Invesco Perpetual Select Trust plc HALF-YEARLY FINANCIAL REPORT SIX MONTHS ENDED 30 NOVEMBER 2014 . FINANCIAL PERFORMANCE CUMULATIVE TOTAL RETURNS TO 30 NOVEMBER 2014 UK Equity Portfolio SIX ONE THREE FIVE MONTHS YEAR YEARS YEARS Net Asset Value 4.8% 13.8% 80.9% 139.2% Share Price 6.0% 16.0% 109.1% 147.8% FTSE All-Share Index -0.1% 4.7% 40.7% 60.9% Global Equity Income Portfolio The name and objective of this Portfolio were changed with effect from 30 November 2011. SIX ONE THREE FIVE MONTHS YEAR YEARS YEARS Net Asset Value 5.4% 10.5% 60.0% 68.4% Share Price 5.5% 9.2% 72.4% 73.2% MSCI World Index (£) 9.5% 13.9% 57.1% 76.2% Balanced Risk Portfolio The name and objective of this Portfolio were changed with effect from 8 February 2012. The three and five year figures below are presented for consistency. However, the strategy followed prior to 8 February 2012 was substantially different to the strategy now in place. SINCE SIX ONE 8 FEB THREE FIVE MONTHS YEAR 2012 YEARS YEARS Net Asset Value 1.5% 6.7% 16.6% 14.9% 5.0% Share Price 0.0% 5.2% 27.5% 25.4% 9.2% 3 month LIBOR +5% pa 2.8% 5.5% 15.9% 17.1% 28.5% Managed Liquidity Portfolio SIX ONE THREE FIVE MONTHS YEAR YEARS YEARS Net Asset Value 0.1% 0.3% 1.6% 3.2% Share Price 0.2% 0.9% 2.7% 3.7% Source: Thomson Reuters Datastream. PERIOD END NET ASSET VALUE, SHARE PRICE AND DISCOUNT NET ASSET SHARE VALUE PRICE SHARE CLASS (PENCE) (PENCE) DISCOUNT UK Equity 160.7 159.8 0.6% Global Equity Income 155.6 153.5 1.3% Balanced Risk 120.7 116.0 3.9% Managed Liquidity 103.3 101.6 1.7% . INTERIM MANAGEMENT REPORT INCORPORATING THE CHAIRMAN'S STATEMENT Investment Objective and Policy The Company's investment objective is to provide shareholders with a choice of investment strategies and policies, each intended to generate attractive risk-adjusted returns. The Company's share capital comprises four share classes: UK Equity Shares, Global Equity Income Shares, Balanced Risk Shares and Managed Liquidity Shares, each of which has its own separate portfolio of assets and attributable liabilities. The Company enables shareholders to alter their asset allocation to reflect their view of prevailing market conditions. Shareholders have the opportunity every three months to convert between share classes free of capital gains tax. Performance In NAV terms, with dividends reinvested, the UK Equity Portfolio returned +4.8% over the six months to the end of November 2014 compared with a total return of -0.1% for its benchmark, the FTSE All-Share Index. The share price total return was +6.0%, reflecting the benefit of a slight narrowing of the discount. The Global Equity Income Portfolio returned +5.4% in NAV terms, and +5.5% on the share price, compared with its benchmark, the MSCI World Index's total return over the period of +9.5%. The Balanced Risk Portfolio returned +1.5% in NAV terms, but the discount widened and there was no change in the share price. The Portfolio's benchmark, 3 month LIBOR plus 5% p.a., returned +2.8%. The Company's Managed Liquidity Shares, whose objective is derived from cash returns, returned +0.1% based on the NAV and +0.2% based on the share price. Relative performance across the share classes was more varied than in the recent past. The UK Equity class continued to perform very well both absolutely and relatively. The Global Equity Income class underperformed its benchmark, largely because of a significant underweight position in the US market. This has always been a difficult market in which to find attractive higher yielding equities. However, in the last six months it has outperformed all other developed markets substantially while also being the largest such market. Our performance problems have been far from unique and the share class has in fact performed well relative to most actively managed competitors. The Balanced Risk share class suffered somewhat from major weakness in commodities, most notably oil, and the concentration of equity market performance in the US. The period under review was characterised by increasingly apparent divergence in economic performance. The US looks increasingly healthy while Europe is struggling to find growth and is clearly flirting with deflation, not helped by the constraints of the common currency in the Eurozone. In Asia, China is facing the effects of badly allocated and excessive capital investment while Japan may be waking up from its long slumber. The UK meanwhile has experienced welcome economic growth while avoiding the stresses seen elsewhere in Europe. Taken overall the forces of slower growth and possible deflation proved stronger than the acceleration of the US economy. As a result bond yields, especially in real terms, fell to levels hitherto undreamt of by most fund managers and industrial commodities were very weak, led by the oil price which fell by 48% (WTI Crude, in US dollar terms) over the period. AIFMD The Company became an AIF, or Alternative Investment Fund, under the EU Alternative Investment Fund Managers Directive on 22 July 2014. The Company has appointed Invesco Fund Managers Limited as its AIFM, or Alternative Investment Fund Manager (Manager), and BNY Mellon Trust & Depositary (UK) Limited as its depositary, both effective from 22 July 2014. The portfolio managers responsible for the Company's portfolios on a day to day basis have not changed and nor has the custodian, The Bank of New York Mellon. However, they now operate under delegated authority from the contracted AIFM and depositary. Management Fees The Board announced on 2 September 2014 that it had agreed with the Company's Manager a reduction in the basic management fee on the UK Equity and Global Equity Income portfolios from 0.75% per annum to 0.65% per annum and a reduction in the maximum performance fee payable in any one year on these two portfolios from 0.75% of net assets per annum to 0.65%. The changes were effective retrospectively from 1 June 2014. No changes have been made to the fees payable in respect of the Balanced Risk and Managed Liquidity portfolios. Dividends For the remainder of this financial year it remains the Directors' policy to distribute substantially all net revenues earned between each conversion date for each share class. The following first and second interim dividends have been paid: 15 August 2014 14 November 2014 UK Equity Shares: 1.00p 1.30p Global Equity Income 1.45p 0.95p Shares: Third interim dividends, payable on 13 February 2015, have also been declared, as follows: UK Equity Shares: 1.20p Global Equity Income 0.40p Shares: In consequence of the continued very low interest rates prevailing, the cumulative retained net revenue of the Managed Liquidity Portfolio continues to be minimal and in view of the administrative costs, the Directors have not declared any dividends on the Managed Liquidity Shares since 18 April 2012. In order to maximise the capital return on the Balanced Risk Shares, the Directors only intend to declare dividends on the Balanced Risk Shares to the extent required, having taken into account the dividends paid on the other Share classes, to maintain the Company's status as an investment trust. Present estimates continue to indicate that it is unlikely that any dividend will be declared on the Balanced Risk shares for some time. The Directors have decided to modify the dividend policy in respect of the two equity portfolio share classes for the next and subsequent financial years. Having observed that the existing policy has delivered a rather uneven dividend progression and, in the belief that shareholders would appreciate more consistency of dividends, it is proposed that, for both UK Equity and Global Equity Income, the Company move to a model of three equal interim dividends in July, October and January with a larger `wrap-up' fourth interim in April. Depending on the level of income received in the relevant quarters, some of the three equal dividends for each share class may be enhanced with contributions from capital to achieve this. However, it is intended that total dividends over the course of the year will not be materially different from revenue earnings per share for each share class. Share Buy Backs and Discount The Company has continued to operate a strict discount control policy in respect of all four share classes. During the six months to 30 November 2014, the Company bought back, into treasury, 100,000 Global Equity Income shares, 100,000 Balanced Risk shares and 49,569 Managed Liquidity shares in connection with operating this policy. Outlook After a period in which trends reversed before they really became established, those that appeared in the second half of 2014 seem likely to have some staying power. The divergences in economic performance appear well established. In particular the problems of European economies, largely excepting the UK, look stubbornly entrenched and China's difficulties have a substantial long-term structural component. The weakness of demand that these imply and the low short term marginal costs of production should inhibit any immediate revival in commodity markets, although the bulk of the falls may have been seen. The future political scene looks turbulent and clearly capable of disturbing financial markets. Established conflicts in the Middle East and Ukraine are unresolved and appear intractable. In the meantime the passivity of European electorates in the face of poor economic performance is increasingly likely to be challenged whether in Greece or the UK. The US is likely to remain attractively stable while also organisationally dysfunctional. The Board remains confident in the management of the different share classes. Our equity managers are suitably sceptical about the opportunities they see and Balanced Risk has an investment process that should enable it to continue to generate relatively smooth absolute returns. These classes therefore provide attractive alternative investment solutions for existing and prospective shareholders and all offer advantages to holders in the current market conditions. We further believe that the Company's structure, which enables shareholders to switch between share classes on a quarterly basis, without cost or crystallising capital gains tax, is an attractive feature for private investors. . Related Party Transactions and Transactions with the Manager Under United Kingdom Generally Accepted Accounting Practice (UK Accounting Standards and applicable law), the Company has identified the Directors as related parties. No other related parties or related party transactions have been identified during the period. With effect from 22 July 2014, Invesco Fund Managers Limited (IFML), a wholly owned subsidiary of Invesco Limited and associate company of Invesco Asset Management Limited (IAML), was appointed as Manager. Prior to 22 July 2014, IAML was the Manager and it continues to carry out its previous functions under delegated authority from IFML. The fee arrangements with the Manager were changed on 2 September 2014 and are effective from 1 June 2014. Previously the fee arrangements as disclosed in the 2014 annual financial report were in effect. Principal Risks and Uncertainties Explanations of the Company's principal risks and uncertainties are set out on pages 33 to 35 of the 2014 annual financial report, which is available on the Manager's website. These are summarised as follows: • Investment Policy - the investment policies may not achieve the published investment objectives; • Risks Applicable to the Company - the prices of shares in the Company may not appreciate and the level of dividends may fluctuate; • Compulsory Conversion of a Class of Shares - if ownership of a class of shares becomes too concentrated the Directors may serve notice on holders of the affected class requiring them to convert to another class; • Liability of a Portfolio for the Liabilities of Another Portfolio - in the event that any Portfolio was unable to meet its liabilities, the shortfall would become a liability of the other Portfolios; • Market Movements and Portfolio Performance - falls in stock markets will affect the performance of the individual Portfolios and securities held within the Portfolios; • Gearing - borrowing will amplify the effect on shareholders' funds of gains and losses on the underlying securities; • Hedging - where hedging is used there is a risk that the hedge will not be effective; • Regulatory and Tax Related - whilst compliance with rules and regulations is closely monitored, breaches could affect returns to shareholders; • Additional Risks Applicable to Balanced Risk Shares - the use of financial derivative instruments, in particular futures, forms part of the investment policy and strategy of the Balanced Risk Portfolio. The degree of leverage inherent in futures trading potentially means that a relatively small price movement in a futures contract may result in an immediate and substantial loss to the Portfolio; • Additional Risks Applicable to Managed Liquidity Shares - the Shares are not designed to replicate a bank or building society deposit or money market fund; and • Reliance on Third Party Service Providers - the Company has no employees, so is reliant upon the performance of third party service providers, particularly the Manager, for it to function. In the view of the Board these principal risks and uncertainties are as equally applicable to the remaining six months of the financial year as they were to the six months under review. Going Concern The financial statements have been prepared on a going concern basis. The Directors consider this to be appropriate as the Company has adequate resources to continue in operational existence for the foreseeable future being 12 months after approval of the financial statements. In reaching this conclusion, the Directors took into account the value of net assets; the Company's Investment Policy; its risk management policies; the diversified portfolio of readily realisable securities which can be used to meet funding commitments; the credit facility and the overdraft which can be used for short-term funding requirements; the liquidity of the investments which could be used to repay the credit facility in the event that the facility could not be renewed or replaced; its revenue; and the ability of the Company in the light of these factors to meet all its liabilities and ongoing expenses. Patrick Gifford Chairman 29 January 2015 . DIRECTORS' RESPONSIBILITY STATEMENT in respect of the preparation of the half-yearly financial report The Directors are responsible for preparing the half-yearly financial report using accounting policies consistent with applicable law and UK Accounting Standards. The Directors confirm that, to the best of their knowledge: - the condensed set of financial statements contained within the half-yearly financial report have been prepared in accordance with the Accounting Standards Board's Statement "Half-Yearly Financial Report"; - the interim management report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R of the FCA's Disclosure and Transparency Rules; and - the interim management report includes a fair review of the information required on related party transactions. The half-yearly financial report has not been audited or reviewed by the Company's auditor. Signed on behalf of the Board of Directors. Patrick Gifford Chairman 29 January 2015 . UK EQUITY SHARE PORTFOLIO PERFORMANCE RECORD Total Return SIX MONTHS YEAR TO YEAR TO YEAR TO YEAR TO TO 30 NOV 31 MAY 31 MAY 31 MAY 31 MAY 2014 2014 2013 2012 2011 Net Asset Value 4.8% 18.3% 42.8% -1.0% 28.1% Share Price 6.0% 9.2% 63.5% -3.4% 27.5% FTSE All-Share Index -0.1% 8.9% 30.1% -8.0% 20.4% Source: Thomson Reuters Datastream. Revenue return per share 2.41p 5.40p 5.48p 4.22p 4.07p Dividend 2.30p 5.30p 5.55p 4.25p 4.20p UK EQUITY SHARE PORTFOLIO MANAGER'S REPORT Investment Objective The investment objective of the UK Equity Portfolio is to provide shareholders with an attractive real long-term total return by investing primarily in UK quoted equities. Market and Economic Review The six month period under review saw the UK equity market, as measured by the FTSE All-Share Index, finish broadly flat with a fall of 0.1% (with dividends reinvested). This return represented a material pause after a six year long bull market rally, as concerns surfaced over future profit growth, caused by disappointing company results statements, and over the ending of the Quantitative Easing (QE) programme in the US. In addition, over the course of the period, fears over China's growth rate and a weakening European economy became more relevant concerns. Furthermore, rising geopolitical risk and the prospect of UK domestic elections began to affect the previously stable backdrop for the market. On the positive front, inflation remained subdued and, although wage growth was weak, the prices of non-discretionary items including petrol and food were falling, thereby benefiting households and relieving some of the upward pressure on interest rates. Government bond yields were supportive of equities over the period and the 30 year US government bond yield fell below 3%, suggesting that the market views the longer term outlook for global inflation as subdued. Portfolio Performance On a total return basis, the UK Equity Share Portfolio's net asset value per share, including re-invested dividends, rose by 4.8% over the six months to the end of November 2013, compared to a fall of 0.1% in the FTSE All-Share Index. Portfolio Strategy and Review The Portfolio's outperformance over the six month period reflected some strong contributions from across its holdings. The most significant positive contributions came from BAE Systems, BTG, AstraZeneca, Reynolds American and Imperial Tobacco. BAE Systems' share price continued to rise amid growing instability in the Middle East, helped also by the ongoing implementation of its £1 billion share repurchase programme and the successful resolution of a large contract negotiation with Saudi Arabia. BTG saw a sharp rise in its share price over the period on the back of significant positive news flow. Having previously announced that it had received approval from the US Food and Drug Administration for its Varithena injectable foam medication for the non-surgical treatment of varicose veins, further positive news came during the period under review when the company announced that its DC Bead® oncology product had been approved for sale in China, which represents the largest potential market for patients suffering with liver cancer. AstraZeneca continued to grow its drug pipeline in 2014, with its chief executive commenting post the company's half year results in July that `significant progress' had been made and that there was `visible momentum' across their cardiovascular, diabetes and respiratory franchises, as well as strong growth in the emerging markets. Meanwhile, Reynolds American and Imperial Tobacco have seen their share prices rise following merger & acquisition activity, with both companies awaiting final US government approval for Reynolds' planned merger with Lorillard and Imperial Tobacco's purchase of certain of both companies' brands. Amongst the detractors to performance over the period were Thomas Cook, Rolls-Royce, BP and N Brown. Thomas Cook saw its share price decline sharply when it failed to match last year's sales growth, and more latterly in reaction to fears that the Ebola outbreak and unrest in Turkey would negatively affect bookings. We note here that the disruption in Turkey is several hundred miles from the holiday destinations on the Mediterranean coast. Rolls-Royce warned that sales would decline this year and could fall again in 2015 as a result of lower demand for defence equipment due to a deteriorating global economic backdrop, client specific order delays and Russian sanctions, which have blocked diesel-engine exports to Russia. In spite of the recent share price falls we remain supportive of this holding, not least due to the company's continuing positive long term prospects, strong market position, global reputation and specialist technological and manufacturing expertise. BP's shares retreated over the period in sympathy with falling oil prices and from negative fallout relating to its minority stake in the Russian state controlled oil company, Rosneft, which has been affected by the weakness of the rouble. Finally, UK retailer N Brown's profits were hampered by weaker performance from its mail-order business, as it sought to expand its digital offering, as well as by a challenging winter clothing sales environment as the month of September proved to be one of the warmest on record. In terms of portfolio activity, new investments comprised Game Digital and Friends Life, with no disposals being made over the period. Outlook The UK equity market is likely to become more volatile. The key issues which continue to overshadow the performance of the equity market remain the interplay between growing investor pessimism on the global economic outlook and the ability of policymakers to create the conditions to reinvigorate growth prospects where necessary. The recent performance of the Eurozone and Chinese economies in particular is concerning. Weaker than expected growth in these areas and the deflationary forces that are exported will undoubtedly have an impact on other developed economies such as the US and the UK, which performed relatively well in 2014. The overall background for revenue growth is likely to remain challenging in 2015. The speed and severity of the decline in the oil price neatly encapsulates both sides of the economic debate. On the positive side, it is certainly a boost to consumption in the developed world, but it is clearly a deflationary force and represents a reminder of the underlying weakening demand in the Chinese economy. The speed of the recent decline and how companies respond to this new volatility represents an additional contributor to stock market volatility. Given the recent economic news it is likely that the anticipated increase in rates in the US and UK will be deferred until at least mid-2015 as there is very little sign of inflationary pressure in these economies, despite rapidly falling levels of unemployment. The political backdrop both domestically and internationally is another issue which has taken on more relevance in the recent past and which is likely to remain an important influence for the next 12 months. The changes in the political agenda ahead of the UK general election in May 2015 are likely to be another source of uncertainty for the UK stock-market. Moments of market weakness in recent weeks are symptomatic of some of these concerns. It is true that equities continue to look attractive relative to other asset classes, but in some cases absolute valuations still look elevated where share prices do not appropriately anticipate the risk to earnings and cash flows. The portfolio strategy is therefore largely unchanged. A high price is placed on companies in the market that offer visibility of revenues, profits and cash flows in this low growth world and which are managed for the principal purpose of delivering shareholder value in the form of a sustainable and growing dividend. Mark Barnett Portfolio Manager 29 January 2015 UK EQUITY SHARE PORTFOLIO LIST OF INVESTMENTS AT 30 NOVEMBER 2014 Ordinary shares listed in the UK unless stated otherwise MARKET VALUE % OF COMPANY SECTOR† £'000 PORTFOLIO British American Tobacco Tobacco 3,667 4.9 Imperial Tobacco Tobacco 3,425 4.6 Reynolds American - US common Tobacco 3,402 4.6 stock AstraZeneca Pharmaceuticals & 3,194 4.3 Biotechnology BT Group Fixed Line 3,181 4.3 Telecommunications Roche - Swiss common stock Pharmaceuticals & 2,862 3.8 Biotechnology BAE Systems Aerospace & Defence 2,818 3.8 GlaxoSmithKline Pharmaceuticals & 2,040 2.7 Biotechnology BTG Pharmaceuticals & 1,900 2.6 Biotechnology SSE Electricity 1,883 2.5 Legal & General Life Insurance 1,855 2.5 Babcock International Support Services 1,781 2.4 Reckitt Benckiser Household Goods & Home 1,777 2.4 Construction Provident Financial Financial Services 1,651 2.2 Reed Elsevier Media 1,627 2.2 BP Oil & Gas Producers 1,619 2.2 Capita Support Services 1,561 2.1 Beazley Non-life Insurance 1,554 2.1 Bunzl Support Services 1,527 2.0 GAME Digital General Retailers 1,436 1.9 Compass Travel & Leisure 1,386 1.9 London Stock Exchange Financial Services 1,373 1.8 Hiscox Non-life Insurance 1,370 1.8 Thomas Cook Travel & Leisure 1,370 1.8 Rolls-Royce - Ordinary Shares Aerospace & Defence 1,350 - C Shares 14 1.8 G4S Support Services 1,356 1.8 Novartis - Swiss common stock Pharmaceuticals & 1,343 1.8 Biotechnology Amlin Non-life Insurance 1,283 1.7 Rentokil Initial Support Services 1,280 1.7 Shaftesbury Real Estate Investment 1,176 1.6 Trusts Drax Electricity 1,140 1.5 NewRiver Retail Real Estate Investment 1,125 1.5 Trusts Derwent London Real Estate Investment 1,112 1.5 Trusts KCOM Fixed Line 967 1.3 Telecommunications Centrica Gas, Water & Multiutilities 958 1.3 Workspace Real Estate Investment 958 1.3 Trusts TalkTalk Telecom Fixed Line 911 1.2 Telecommunications A J Bell - Unquoted Financial Services 781 1.1 Friends Life Life Insurance 765 1.0 Lancashire Non-life Insurance 755 1.0 HomeServe Support Services 723 1.0 N Brown General Retailers 721 1.0 Ladbrokes Travel & Leisure 672 0.9 Macau Property Opportunities Real Estate Investment & 656 0.9 Fund Services Smith & Nephew Health Care Equipment & 597 0.8 Services Nimrod Sea Assets Equity Investment Instruments 592 0.8 CLS Real Estate Investment & 590 0.8 Services Vectura Pharmaceuticals & 510 0.7 Biotechnology Doric Nimrod Air Two - Equity Investment Instruments 338 0.5 Preference Shares Doric Nimrod Air Three - Equity Investment Instruments 334 0.5 Preference Shares Sherborne Investors Guernsey B Financial Services 279 0.4 - A Shares Chemring Aerospace & Defence 267 0.4 Serco Support Services 207 0.3 PuriCore Health Care Equipment & 184 0.3 Services Coalfield Resources Real Estate Investment & 79 0.1 Services Barclays Bank - Nuclear Power Electricity 52 0.1 Notes 28 Feb 2019 HaloSource Chemicals 18 - 74,352 100.0 †FTSE Industry Classification Benchmark. . UK EQUITY SHARE PORTFOLIO INCOME STATEMENT YEAR ENDED SIX MONTHS ENDED SIX MONTHS ENDED 31 MAY 30 NOVEMBER 2014 30 NOVEMBER 2013 2014 REVENUE CAPITAL TOTAL REVENUE CAPITAL TOTAL TOTAL £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments - 2,476 2,476 - 4,363 4,363 8,384 Foreign exchange gains - - - - 4 4 (1) /(losses) Income 1,137 - 1,137 919 60 979 2,556 Management fee - note 2 (61) (142) (203) (63) (147) (210) (442) Performance fee - note 2 - (331) (331) - (289) (289) (561) Other expenses (93) - (93) (85) - (85) (176) Net return before 983 2,003 2,986 771 3,991 4,762 9,760 finance costs and taxation Finance costs (19) (46) (65) (17) (39) (56) (106) Return on ordinary 964 1,957 2,921 754 3,952 4,706 9,654 activities before tax Tax on ordinary (10) - (10) (11) - (11) (46) activities Return on ordinary 954 1,957 2,911 743 3,952 4,695 9,608 activities after tax for the financial period Basic return per 2.41p 4.95p 7.36p 1.92p 10.20p 12.12p 24.59p ordinary share - note 4 SUMMARY OF NET ASSETS AT AT AT 30 NOVEMBER 30 NOVEMBER 31 MAY 2014 2013 2014 £'000 £'000 £'000 Fixed assets 74,352 64,730 70,373 Current assets 313 2,671 758 Creditors falling due within one (1,299) (1,298) (1,447) year, excluding borrowings Bank loan (9,800) (8,800) (8,200) Net assets 63,566 57,303 61,484 Net asset value per ordinary share - 160.7p 146.5p 155.6p note 5 Gearing: - gross 15.4% 15.4% 13.3% - net 15.3% 11.1% 12.7% . GLOBAL EQUITY INCOME SHARE PORTFOLIO PERFORMANCE RECORD The name, objective and benchmark of this Portfolio were changed with effect from 30 November 2011. Total Return SIX MONTHS YEAR TO YEAR TO YEAR TO YEAR TO TO 30 NOV 31 MAY 31 MAY 31 MAY 31 MAY 2014 2014 2013 2012 2011 Net Asset Value 5.4% 9.6% 33.9% -8.6% 9.8% Share Price 5.5% 8.3% 40.4% -8.0% 8.1% MSCI World Index (£) 9.5% 7.4% 29.7% -4.8% 13.0% Source: Thomson Reuters Datastream. Revenue return per share 1.55p 4.22p 3.28p 2.69p 1.99p Dividend 2.40p 3.55p 3.40p 2.50p 1.70p GLOBAL EQUITY INCOME SHARE PORTFOLIO MANAGER'S REPORT Investment Objective The investment objective of the Global Equity Income Portfolio is to provide an attractive and growing level of income return and capital appreciation over the long term, predominantly through investment in a diversified portfolio of equities worldwide. Market and Economic Review In a year characterised by a series of economic, geopolitical, and market shifts, economic growth has been disappointing virtually everywhere with the exception of the US and UK. Over the past six months in particular, focus has shifted to the accelerating slide in oil prices (more than 40% decline since June 2014). A surprise surge in production and weaker than expected global demand for crude have sent oil reserves soaring and prices tumbling, which has increased concerns about slower economic growth across global financial markets in recent months. Energy stocks have suffered as have oil-dependent countries such as Venezuela and Russia. However, in our view, financial markets appear to be overreacting. The focal point has been stock price volatility rather than the real benefit of lower oil prices, which we view as a greater level of consumption amid the transfer of wealth from (oil) producers to consumers (and corporates) around the world. This has the potential to provide a significant boost to global economic growth in the months ahead. Nonetheless, we remain vigilant about the negative impact on the energy sector and the potential for worsening credit quality for some financial institutions. Portfolio Performance On a total return basis, the Portfolio's net asset value per share increased 5.4% over the six months to the end of November 2014, compared to a return of 9.5% by the benchmark MSCI World Index (£, net of withholding tax). Portfolio Strategy and Review The Portfolio underperformed the benchmark during the six months due to its overweight positions in Europe and the UK relative to the index, which both underperformed the broader benchmark, and its underweight exposure to the US. Notwithstanding the geographical returns of the benchmark index, portfolio stock selection was strong in the UK. The US accounts for approximately 58% of the MSCI World Index and outperformed the broader benchmark due to economic growth picking up, driven by a surge in business and consumer spending, strong corporate results, and the commitment to loose monetary conditions by policymakers. Albeit that exposure to the US was underweight relative to the index, which significantly contributed to the portfolio lagging in the period, some of the strongest stock performers in the portfolio included US stocks Amgen, Microsoft, Covidien and Macy's. Despite worries over Chinese economic growth, stock selection within Asia ex-Japan was positive. Some of the strongest individual stock performers in that region included Yue Yuen Industrial, ComfortDelGro and Telekomunikasi Indonesia. At the sector level, performance from both cyclical stocks (those more sensitive to the economic cycle) and more defensive areas of the market (those less sensitive to the economic cycle) was mixed. Consumer staples, health care, IT, telecoms and utilities all performed well at the broader market level, and the Portfolio's overweight exposure to consumer staples (Mead Johnson Nutrition) and health care (Novartis) as well as stock picking within materials (Orora) and consumer discretionary (Macy's, Target), was beneficial for performance. However, the Portfolio's underweight exposure to IT and telecoms as well as a zero weight in utilities detracted from returns. Amid a strong appetite for dividend-paying stocks, the de-rating of more economically-sensitive areas of the market provided us with a number of attractively-valued opportunities within financials and other out-of-favour sectors. Together with the strong performance of defensive, or so called bond proxy stocks, this has led us to reduce the Portfolio's overweight exposure to health care and other stable, defensive areas of the market. Outlook Against a backdrop of disappointing economic growth globally, Europe has been particularly weak. However, in our view, pessimism about the region is overdone. We remain optimistic that a number of European companies offer compelling valuation opportunities and should benefit from the combined tailwinds of a weaker euro, lower oil price and loose monetary policy. Our strategy remains constant, to invest in high quality companies at attractive valuations. We view high quality companies as those that can sustain profit margins and deliver positive returns through the economic cycle. We view growing and sustainable dividends as clear evidence of these sorts of companies. In aggregate therefore, we target companies that offer attractive yields, sustainable income and capital upside. Nick Mustoe Portfolio Manager 29 January 2015 GLOBAL EQUITY INCOME SHARE PORTFOLIO LIST OF INVESTMENTS AT 30 NOVEMBER 2014 Ordinary shares unless stated otherwise MARKET VALUE % OF COMPANY INDUSTRY GROUP† COUNTRY† £'000 PORTFOLIO Novartis Pharmaceuticals Switzerland 2,524 4.6 Biotechnology & Life Sciences Reed Elsevier NV Media Netherlands 2,063 3.7 BT Group Telecommunication Services UK 1,994 3.6 Roche Pharmaceuticals Switzerland 1,695 3.1 Biotechnology & Life Sciences Legal & General Insurance UK 1,685 3.0 British American Food Beverage & Tobacco UK 1,637 3.0 Tobacco Amgen Pharmaceuticals US 1,628 2.9 Biotechnology & Life Sciences Pfizer Pharmaceuticals US 1,596 2.9 Biotechnology & Life Sciences Microsoft Software & Services US 1,580 2.9 Nordea Banks Sweden 1,462 2.6 HSBC Banks UK 1,427 2.6 Macy's Retailing US 1,423 2.6 RTL Media Luxembourg 1,410 2.5 United Technologies Capital Goods US 1,408 2.5 Allianz Insurance Germany 1,317 2.4 Atlantia Transportation Italy 1,228 2.2 Deutsche Boerse Diversified Financials Germany 1,182 2.1 PNC Financial Banks US 1,166 2.1 Services Adecco Commercial & Professional Switzerland 1,165 2.1 Services Target Retailing US 1,072 1.9 Total Energy France 1,066 1.9 UBS Diversified Financials Switzerland 1,047 1.9 Philip Morris Food Beverage & Tobacco US 1,046 1.9 International Hutchison Whampoa Capital Goods Hong Kong 1,041 1.9 Baxter International Health Care Equipment & US 1,038 1.9 Services BP Energy UK 1,006 1.8 Kellogg Food Beverage & Tobacco US 991 1.8 United Parcel Transportation US 919 1.7 Service - B Shares Aon - A Shares Insurance US 896 1.6 Statoil Energy Norway 863 1.6 ING Banks Netherlands 858 1.5 GlaxoSmithKline Pharmaceuticals UK 858 1.5 Biotechnology & Life Sciences Booker Food & Staples Retailing UK 825 1.5 Chevron Energy US 818 1.5 Deutsche Post Transportation Germany 808 1.5 BNP Paribas Banks France 777 1.4 Canon Technology Hardware & Japan 763 1.4 Equipment Nielsen Commercial & Professional US 744 1.3 Services Hiscox Insurance UK 717 1.3 Honda Motor Automobiles & Components Japan 711 1.3 Las Vegas Sands Consumer Services US 675 1.2 Orora Materials Australia 622 1.1 Mead Johnson Food Beverage & Tobacco US 618 1.1 Nutrition Standard Chartered Banks UK 612 1.1 Telekomunikasi Telecommunication Services Indonesia 604 1.1 Indonesia Amcor Materials Australia 604 1.1 Yue Yuen Industrial Consumer Durables & Apparel Hong Kong 597 1.1 Rolls-Royce - Capital Goods UK 582 Ordinary Shares - C Shares 6 1.1 Koninklijke Ahold Food & Staples Retailing Netherlands 558 1.0 DS Smith Materials UK 533 1.0 Ladbrokes Consumer Services UK 432 0.8 Denbury Resources Energy US 381 0.7 ComfortDelGro Transportation Singapore 84 0.1 55,362 100.0 †MSCI and Standard & Poor's Global Industry Classification Standard. . GLOBAL EQUITY INCOME SHARE PORTFOLIO INCOME STATEMENT YEAR ENDED SIX MONTHS ENDED SIX MONTHS ENDED30 31 MAY 30 NOVEMBER 2014 NOVEMBER 2013 2014 REVENUE CAPITAL TOTAL REVENUE CAPITAL TOTAL TOTAL £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments - 1,896 1,896 - 1,801 1,801 3,015 Foreign exchange losses - - - - (2) (2) (9) Income 658 - 658 509 - 509 1,850 Management fees - note 2 (47) (109) (156) (50) (117) (167) (343) Other expenses (71) (1) (72) (67) (3) (70) (138) Net return before 540 1,786 2,326 392 1,679 2,071 4,375 finance costs and taxation Finance costs (12) (28) (40) (1) (3) (4) (32) Return on ordinary 528 1,758 2,286 391 1,676 2,067 4,343 activities before tax Tax on ordinary (42) - (42) (41) - (41) (137) activities Return on ordinary 486 1,758 2,244 350 1,676 2,026 4,206 activities after tax for the financial period Basic return per 1.55p 5.60p 7.15p 1.12p 5.39p 6.51p 13.45p ordinary share - note 4 SUMMARY OF NET ASSETS AT AT AT 30 NOVEMBER 30 NOVEMBER 31 MAY 2014 2013 2014 £'000 £'000 £'000 Fixed assets 55,362 47,062 51,398 Current assets 584 314 564 Creditors falling due within one year, (196) (144) (129) excluding borrowings Bank loan (7,000) (1,500) (4,400) Net assets 48,750 45,732 47,433 Net asset value per ordinary share - note 5 155.6p 145.9p 150.9p Gearing: - gross 14.4% 3.3% 9.3% - net 13.7% 2.9% 8.6% . BALANCED RISK SHARE PORTFOLIO PERFORMANCE RECORD The name and objective of this Portfolio were changed with effect from on 8 February 2012. Total Return SIX MONTHS YEAR TO YEAR TO YEAR TO YEAR TO TO 30 NOV 31 MAY 31 MAY 31 MAY 31 MAY 2014 2014 2013 2012 2011 Net Asset Value 1.5% 5.5% 8.3% -8.0% -0.3% Share Price 0.0% 4.5% 20.7% -12.4% -1.9% 3 month LIBOR +5% pa 2.8% 5.5% 5.7% 5.9% 5.7% Source: Thomson Reuters Datastream. Total Return - since change of objective (8 February 2012) 8 FEBRUARY TO 30 NOVEMBER 2014 Net Asset Value 16.6% Share Price 27.5% 3 month LIBOR +5% pa 15.9% BALANCED RISK SHARE PORTFOLIO MANAGER'S REPORT Investment Objective The investment objective of the Balanced Risk Portfolio is to provide shareholders with an attractive total return in differing economic and inflationary environments, and with low correlation to equity and bond market indices by gaining exposure to three asset classes: debt securities, equities and commodities. Market and Economic Review Stocks, bonds and commodities all started the period off on a positive note. Bond yields fell as geopolitical concerns drove demand for safe-haven assets. Bonds also benefited from weak economic data as evidenced by the final iteration of US GDP for the first quarter of the calendar year coming in below expectations. Government bond yields across developed markets continued to contract throughout the six months under review in response to weak manufacturing data and activity slowing in the Eurozone, Japan and China. Equity prices continued to climb higher through June despite elevated valuations in key markets and lacklustre economic data, indicating that investor sentiment was most likely the primary driver of returns. However, equity prices pulled back in July as volatility returned amidst geopolitical tensions and softening business conditions in Europe, while bond prices continued to rise. Developed equity markets were mixed from August through to October, but ended in positive territory in November, despite headwinds presented by the uneven global economic landscape. Energy and metals commodity prices rose on geopolitical fears in the first months of the period under review. Agriculture prices tailed off over the second quarter of the calendar year, as more favourable weather patterns helped to alleviate concerns over poor crop yields, and then commodity prices generally came under pressure from August through to the end of November. In September, a rising US Dollar and weak economic data out of China and Europe caused negative returns across all four primary complexes. Oversupply and OPEC's decision in November to maintain output at its current levels caused further commodity price contraction. Portfolio Performance The Balanced Risk Share Portfolio posted a positive return per share of 1.5% for the period, but underperformed the benchmark, 3 month LIBOR plus 5%, which returned 2.8%. Portfolio Strategy and Review Stocks and bonds started the period off with positive performance while commodity prices were mixed. Results of the opening tactical positioning were positive as we had overweighted all six bond and all six equity markets. Bonds contributed positively to results through to August as yields contracted in the face of continued conflict in Ukraine and the escalation of hostilities in the middle east. German and Japanese bonds generated positive results while yields in the US, UK, Australia and Canada rose meaningfully during September before settling at slightly higher yield levels at the end of that month. Bonds ended the period in positive territory as yields fell across all the markets represented within the strategy and our tactical overweights to all bond markets during November paid off nicely. Equity markets weakened in July but bounced back slightly in August. The six developed equity markets posted mixed results through to October but then posted gains in November despite weak manufacturing data and the bleak economic outlook for Japan, which prompted the Bank of Japan to launch an enhanced quantitative easing program. Overweight positions to all six markets proved timely and helped bolster results. Commodity performance was positive in June, but mixed in July and weakened in August with all four complexes posting losses. Commodities continued to face headwinds through to November. Precious metals declined the least as gold managed a slight gain on news of major purchases by foreign central banks which helped to soften the negative result from silver, which declined on weak manufacturing data. With a few exceptions, like wheat and corn, agricultural commodity prices generally declined on strong supply estimates, while industrial metals softened on sub-par manufacturing PMI (purchasing managers index) data, especially from China. Energy commodities were the biggest loser, with WTI (West Texas intermediate) crude, Brent crude and key distillates all down double digits. Underweight tactical positions across the majority of the commodity spectrum helped to soften the blow from the weak asset class performance. Outlook As we see out 2014, it is hard to ignore the performance divergences that have grown between asset classes over the past 11 months. Global government bond yields are reaching depths not seen since the financial crisis, or in some cases, in all of history. At the same time, economically sensitive commodities like copper and energy have fallen by double digits. Clearly, the picture being painted by bonds and commodities is one of disinflation, if not outright deflation, while equities, at least in local currency terms, continue to trade higher, reflecting optimism about continued central bank largesse and the solid prospects for the US economy. Our tactical positioning continues to overweight all bond markets, although on a reduced scale. All six equity markets also continue to carry overweights with increased exposure to Europe and the UK and tempered exposures to Hong Kong and the US. The strategy remains underweight commodities and, from a target risk contribution perspective, that segment is now at the low end of the allowable range for the first time since inception of the strategy (all references to overweights and underweights represent tactical active overlays relative to their respective strategic allocations as determined by our proprietary analysis process). Scott Wolle Chief Investment Officer Invesco Global Strategies 29 January 2015 BALANCED RISK SHARE PORTFOLIO LIST OF INVESTMENTS AT 30 NOVEMBER 2014 MARKET % YIELD VALUE OF NET % £'000 ASSETS Short Term Investments UK Treasury Bill 9 Feb 2015 0.378 2,997 32.3 Short-Term Investment Company (Global Series) 0.449 2,750 29.7 UK Treasury Bill 2 Mar 2015 0.495 2,597 28.0 Total Short Term Investments 8,344 90.0 Hedge Funds(1) 22 0.2 Total Fixed Asset Investments 8,366 90.2 (1)The hedge fund investments are residual holdings of the previous investment strategy, which are in process of disposal and/or liquidation. LIST OF DERIVATIVE INSTRUMENTS AT 30 NOVEMBER 2014 NOTIONAL NOTIONAL EXPOSURE EXPOSURE AS % OF £'000 NET ASSETS Government Bonds UK 1,763 19.0 Australia 1,707 18.4 Germany 1,580 17.0 Canada 1,538 16.6 Japan 1,108 11.9 US 912 9.8 Total Bond Futures 8,608 92.7 Equities Hong Kong 692 7.5 Europe 671 7.2 Japan 608 6.6 UK 538 5.8 US large cap 530 5.7 US small cap 454 4.9 Total Equity Futures 3,493 37.7 Commodities Industrial Metals Copper 526 5.7 Aluminium 230 2.5 Agriculture Soy bean 230 2.5 Soy meal 227 2.4 Sugar 212 2.3 Precious Metals Gold 301 3.2 Silver 200 2.2 Energy WTI crude 131 1.4 Gasoline 101 1.1 Brent crude 95 1.0 Total Commodities Futures 2,253 24.3 Total Derivative Instruments 14,354 154.7 The targeted annualised risk (volatility of monthly returns) for the portfolio as listed above is analysed as follows: ASSET CLASS RISK CONTRIBUTION Bonds 3.3% 36.5% Equities 4.2% 46.8% Commodities 1.5% 16.7% 9.0% 100.0% Derivative instruments held in the Balanced Risk Share Portfolio are shown above. At the period end all derivative instruments held in this Portfolio were exchange traded future contracts. Holdings in futures contracts that are not exchange traded are permitted as explained in the investment policy which is disclosed in full on page 28 of the 2014 annual financial report. . BALANCED RISK SHARE PORTFOLIO INCOME STATEMENT YEAR ENDED SIX MONTHS ENDED SIX MONTHS ENDED30 31 MAY 30 NOVEMBER 2014 NOVEMBER 2013 2014 REVENUE CAPITAL TOTAL REVENUE CAPITAL TOTAL TOTAL £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains/(losses) on - 2 2 - (1) (1) - investments Gains on derivative 54 149 203 64 110 174 641 instruments Foreign exchange gains/ - 14 14 - (45) (45) (67) (losses) Income 17 - 17 15 - 15 31 Management fees - note 2 (10) (24) (34) (11) (25) (36) (70) Other expenses (22) - (22) (22) - (22) (45) Return on ordinary 39 141 180 46 39 85 490 activities before finance costs Finance costs - - - - - - - Return on ordinary 39 141 180 46 39 85 490 activities before tax Tax on ordinary - - - - - - - activities Return on ordinary 39 141 180 46 39 85 490 activities after tax for the financial period Basic return per 0.51p 1.82p 2.33p 0.52p 0.44p 0.96p 5.61p ordinary share - note 4 SUMMARY OF NET ASSETS AT AT AT 30 NOVEMBER 30 NOVEMBER 31 MAY 2014 2013 2014 £'000 £'000 £'000 Fixed assets 8,366 9,035 8,370 Derivative assets held at fair value 262 307 357 through profit or loss Current assets 793 670 704 Derivative liabilities held at fair value (105) (43) (54) through profit or loss Other creditors excluding borrowings (40) (27) (54) Net assets 9,276 9,942 9,323 Net asset value per ordinary share - note 120.7p 113.1p 118.4p 5 Exposure 154.7% 144.4% 172.1% . MANAGED LIQUIDITY SHARE PORTFOLIO PERFORMANCE RECORD Total Return SIX MONTHS YEAR TO YEAR TO YEAR TO YEAR TO TO 30 NOV 31 MAY 31 MAY 31 MAY 31 MAY 2014 2014 2013 2012 2011 Net Asset Value 0.1% 0.2% 0.5% 0.8% 1.0% Share Price 0.2% 0.4% 1.3% 0.3% 1.0% Source: Thomson Reuters Datastream. Revenue return per share -0.07p 0.02p 0.10p 0.33p 0.49p Dividend nil nil nil 0.50p 0.50p MANAGED LIQUIDITY SHARE PORTFOLIO MANAGER'S REPORT Investment Objective The investment objective of the Managed Liquidity Share Portfolio is to produce an appropriate level of income return combined with a high degree of security. Market and Economic Review Although the Bank of England kept interest rates at the record low level of 0.5% for the entire six month period, market expectations about the timing of the first hike in interest rates since this level was set in March 2009 shifted considerably. With the UK unemployment rate falling and wage growth showing potential for improvement two members of the Monetary Policy Committee (MPC) voted for a 0.25% rate increase at the August meeting. The remaining seven members voted for no change. This divide of the vote persisted until the January 2015 meeting at which point unanimity for no change in the bank rate once again prevailed. The split vote initially brought forward expectations about the timing of the first hike. However, subsequently there has been a marked fall in inflation that has seen expectations about the timing once again pushed out. The market's expectation is that the first rate increase will now not occur until late 2015, or even early 2016. As recently as August the market was expecting the first hike to occur in February 2015. After peaking at 1.9% in June UK Consumer Price Index (CPI) inflation fell to 1.0% in November. The fall has largely been driven by lower fuel prices, which have in turn reduced transport costs. Economic growth has remained robust with quarterly growth of 0.9% in the quarter to June 2014 (Q2) and 0.7% in Q3. The unemployment rate has continued to fall with the latest data as at 30 November recording a level of 6%, its lowest level since 2008. Wage growth increased over the period but although the bank noted that this was promising it did not think it enough to offset the medium term outlook for inflation. Longer dated gilt yields were lower over the period reflecting the drop in inflation expectations. The 10 year Gilt yield fell from 2.6% to 1.9% at 30 November, while the 2 year fell from 0.7% to 0.5%. According to data from Merrill Lynch, Gilts had a total return for the period of 8.2%. Portfolio Performance The Managed Liquidity Share Portfolio posted a return per share of 0.1% for the period. Portfolio Strategy and Review Our investment strategy is achieved by investing in the Invesco Perpetual Money Fund and Short-Term Investments Company (Global Series), each of which invests in a diversified portfolio of high quality sterling denominated short-term money market instruments. In terms of strategy, the Invesco Perpetual Money Fund has some holdings in floating-rate notes (FRNs) where yields are reset every three months to reflect changes in LIBOR. As we continue to believe that UK interest rates will remain near their current low levels for a considerable time - because we think any policy adjustments will be gradual and drawn out - the fund also has positions in government, quasi-government and corporate bonds. In order to limit risk exposure, these bonds are both short dated and of high quality. The Short-Term Investments Company (Global Series) portfolio is managed in a modified barbell structure, investing in repurchase agreements, time deposits, commercial paper, certificates of deposit, medium-term notes and floating rate notes, rated A-1/ P-1 or better, with a maximum weighted average maturity of 60 days and a maximum weighted average life of 120 days. Outlook While economic growth remains robust in the UK the sharp fall in the oil price has a clear deflationary impact that has greatly reduced the pressures on the Bank of England to hike interest rates. Given this we do not expect interest rates will rise very quickly from their current levels. Stuart Edwards Portfolio Manager 29 January 2015 MANAGED LIQUIDITY SHARE PORTFOLIO LIST OF INVESTMENTS AT AT AT 30 NOVEMBER 30 NOVEMBER 31 MAY 2014 2013 2014 MARKET MARKET MARKET VALUE VALUE VALUE £'000 £'000 £'000 Invesco Perpetual Money Fund† 4,876 6,610 4,870 Short-Term Investments Company (Global 1,080 640 980 Series) 5,956 7,250 5,850 †At the period end the Managed Liquidity Share Portfolio held 9.6% (November 2013: 11.4%; May 2014: 10.3%) of the outstanding shares in the Invesco Perpetual Money Fund. MANAGED LIQUIDITY SHARE PORTFOLIO INCOME STATEMENT YEAR ENDED SIX MONTHS ENDED SIX MONTHS ENDED30 31 MAY 30 NOVEMBER 2014 NOVEMBER 2013 2014 REVENUE CAPITAL TOTAL REVENUE CAPITAL TOTAL TOTAL £'000 £'000 £'000 £'000 £'000 £'000 £'000 Losses on investments - - - - (2) (2) (1) Income 8 - 8 14 - 14 25 Management fees - note 2 (1) - (1) - - - - Other expenses (11) - (11) (12) - (12) (23) (Loss)/return on (4) - (4) 2 (2) - 1 ordinary activities before tax for the financial period Tax on ordinary - - - - - - - activities (Loss)/return on (4) - (4) 2 (2) - 1 ordinary activities after tax for the financial period Basic (loss)/return per (0.07)p - (0.07)p 0.03p (0.03)p - 0.01p ordinary share - note 4 SUMMARY OF NET ASSETS AT AT AT 30 NOVEMBER 30 NOVEMBER 31 MAY 2014 2013 2014 £'000 £'000 £'000 Fixed assets 5,956 7,250 5,850 Current assets 97 59 197 Creditors falling due within one year, (157) (161) (158) excluding borrowings Net assets 5,896 7,148 5,889 Net asset value per ordinary share - note 5 103.3p 103.2p 103.3p . INVESCO PERPETUAL SELECT TRUST PLC CONDENSED INCOME STATEMENT YEAR ENDED SIX MONTHS ENDED SIX MONTHS ENDED30 31 MAY 30 NOVEMBER 2014 NOVEMBER 2013 2014 REVENUE CAPITAL TOTAL REVENUE CAPITAL TOTAL TOTAL £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments - 4,374 4,374 - 6,161 6,161 11,398 Gains on derivative 54 149 203 64 110 174 641 instruments Foreign exchange gains/ - 14 14 - (43) (43) (77) (losses) Income 1,820 - 1,820 1,457 60 1,517 4,462 Management fees - note 2 (119) (275) (394) (124) (289) (413) (855) Performance fees - note 2 - (331) (331) - (289) (289) (561) Other expenses (197) (1) (198) (186) (3) (189) (382) Net return before 1,558 3,930 5,488 1,211 5,707 6,918 14,626 finance costs and taxation Finance costs (31) (74) (105) (18) (42) (60) (138) Return on ordinary 1,527 3,856 5,383 1,193 5,665 6,858 14,488 activities before tax Tax on ordinary (52) - (52) (52) - (52) (183) activities Return on ordinary 1,475 3,856 5,331 1,141 5,665 6,806 14,305 activities after tax for the financial period Basic return/(loss) per ordinary share - note 4 UK Equity Share 2.41p 4.95p 7.36p 1.92p 10.20p 12.12p 24.59p Portfolio Global Equity Income 1.55p 5.60p 7.15p 1.12p 5.39p 6.51p 13.45p Share Portfolio Balanced Risk Share 0.51p 1.82p 2.33p 0.52p 0.44p 0.96p 5.61p Portfolio Managed Liquidity (0.07)p - (0.07) 0.03p (0.03)p - 0.01p Share Portfolio p The total column of this statement represents the Company's profit and loss account, prepared in accordance with UK Accounting Standards. The supplementary revenue and capital columns are prepared in accordance with the Statement of Recommended Practice issued by the Association of Investment Companies. All items in the above statement derive from continuing operations and the Company has no other gains or losses. Therefore no statement of recognised gains or losses is presented. No operations were acquired or discontinued in the period. Income Statements for the different Share classes are shown on pages 11, 15, 20 and 23 for the UK Equity, Global Equity Income, Balanced Risk and Managed Liquidity Share Portfolios respectively. . INVESCO PERPETUAL SELECT TRUST PLC CONDENSED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS CAPITAL REDEMPTION SHARE SHARE SPECIAL RESERVE CAPITAL REVENUE CAPITAL PREMIUM RESERVE £'000 RESERVE RESERVE TOTAL £'000 £'000 £'000 £'000 £'000 £'000 SIX MONTHS ENDED 30 NOVEMBER 2014 At 31 May 2014 1,062 1,290 83,467 340 37,598 372 124,129 Shares bought back - - (309) - - - (309) and held in treasury Net return on - - - - 3,856 1,475 5,331 ordinary activities Dividends - note 8 - - - - - (1,663) (1,663) At 30 November 2014 1,062 1,290 83,158 340 41,454 184 127,488 YEAR ENDED 31 MAY 2014 At 31 May 2013 1,070 1,290 85,147 332 26,827 23 114,689 Cancellation of (8) - - 8 - - - deferred shares Net proceeds from - - 284 - - - 284 shares issued from treasury Shares bought back - - (1,964) - - - (1,964) and held in treasury Net return on - - - - 10,771 3,534 14,305 ordinary activities Dividends for the - - - - - (3,185) (3,185) year At 31 May 2014 1,062 1,290 83,467 340 37,598 372 124,129 30 NOVEMBER 2013 At 31 May 2013 1,070 1,290 85,147 332 26,827 23 114,689 Cancellation of (5) - - 5 - - - deferred shares Net proceeds from - - 284 - - - 284 shares issued from treasury Shares bought back - - (417) - - - (417) and held in treasury Net return on - - - - 5,665 1,141 6,806 ordinary activities Dividends - - (73) - - (1,164) (1,237) At 30 November 2013 1,065 1,290 84,941 337 32,492 - 120,125 . INVESCO PERPETUAL SELECT TRUST PLC CONDENSED BALANCE SHEET REGISTERED NUMBER 5916642 GLOBAL UK EQUITY BALANCED MANAGED EQUITY INCOME RISK LIQUIDITY TOTAL £'000 £'000 £'000 £'000 £'000 AT 30 NOVEMBER 2014 Fixed assets Investments held at fair 74,352 55,362 8,366 5,956 144,036 value through profit or loss Current assets Derivative assets held at - - 262 - 262 fair value through profit or loss Debtors 267 255 12 46 580 Cash, short-term deposits and 46 329 781 51 1,207 cash held at brokers 313 584 1,055 97 2,049 Creditors: amounts falling due within one year Derivative liabilities held - - (105) - (105) at fair value through profit or loss Other creditors (11,099) (7,196) (40) (157) (18,492) Net current (liabilities)/ (10,786) (6,612) 910 (60) (16,548) assets Net assets 63,566 48,750 9,276 5,896 127,488 Shareholders' funds Share capital 461 359 118 124 1,062 Share premium - - 1,290 - 1,290 Special reserve 40,958 30,992 5,854 5,354 83,158 Capital redemption reserve 73 78 22 167 340 Capital reserve 21,870 17,182 2,161 241 41,454 Revenue reserve 204 139 (169) 10 184 Shareholders' funds 63,566 48,750 9,276 5,896 127,488 Net asset value per ordinary share Basic - note 5 160.7p 155.6p 120.7p 103.3p AT 31 MAY 2014 Fixed assets Investments held at fair 70,373 51,398 8,370 5,850 135,991 value through profit or loss Current assets Derivative assets held at - - 357 - 357 fair value through profit or loss Debtors 394 266 8 56 724 Cash, short-term deposits and 364 298 696 141 1,499 cash held at brokers 758 564 1,061 197 2,580 Creditors: amounts falling due within one year Derivative liabilities held - - (54) - (54) at fair value through profit or loss Other creditors (9,647) (4,529) (54) (158) (14,388) Net current (liabilities)/ (8,889) (3,965) 953 39 (11,862) assets Net assets 61,484 47,433 9,323 5,889 124,129 Shareholders' funds Share capital 460 359 120 123 1,062 Share premium - - 1,290 - 1,290 Special reserve 40,879 31,165 6,079 5,344 83,467 Capital redemption reserve 73 78 22 167 340 Capital reserve 19,913 15,424 2,020 241 37,598 Revenue reserve 159 407 (208) 14 372 Shareholders' funds 61,484 47,433 9,323 5,889 124,129 Net asset value per ordinary share Basic - note 5 155.6p 150.9p 118.4p 103.3p AT 30 NOVEMBER 2013 Fixed assets Investments held at fair 64,730 47,062 9,035 7,250 128,077 value through profit or loss Current assets Derivative assets held at - - 307 - 307 fair value through profit or loss Debtors 258 150 12 57 477 Cash, short-term deposits and 2,413 164 658 2 3,237 cash held at brokers 2,671 314 977 59 4,021 Creditors: amounts falling due within one year Derivative liabilities held - - (43) - (43) at fair value through profit or loss Other creditors (10,098) (1,644) (27) (161) (11,930) Net current (liabilities)/ (7,427) (1,330) 907 (102) (7,952) assets Net assets 57,303 45,732 9,942 7,148 120,125 Shareholders' funds Share capital 452 358 124 131 1,065 Share premium - - 1,290 - 1,290 Special reserve 40,259 30,984 7,100 6,598 84,941 Capital redemption reserve 73 78 21 165 337 Capital reserve 16,367 14,216 1,669 240 32,492 Revenue reserve 152 96 (262) 14 - Shareholders' funds 57,303 45,732 9,942 7,148 120,125 Net asset value per ordinary share Basic - note 5 146.5p 145.9p 113.1p 103.2p . INVESCO PERPETUAL SELECT TRUST PLC CONDENSED CASH FLOW STATEMENT SIX MONTHS SIX MONTHS YEAR ENDED ENDED ENDED 30 NOVEMBER 30 NOVEMBER 31 May 2014 2013 2014 £'000 £'000 £'000 Total return before finance costs and tax 5,488 6,918 14,626 Adjustment for gains on investments (4,374) (6,161) (11,398) Adjustment for gains on derivatives (149) (110) (506) Adjustment for exchange (gains)/losses (14) 43 77 Scrip dividends received as income (37) (8) (27) Decrease/(increase) in debtors 157 29 (153) (Decrease)/increase in creditors (165) (116) 194 Overseas tax (52) (52) (183) Net cash inflow from operating activities 854 543 2,630 Servicing of finance (105) (60) (140) Taxation 64 65 (7) Capital expenditure and financial (3,346) 133 (2,312) investment Equity dividends paid (1,663) (1,237) (3,185) Net cash outflow before management of (4,196) (556) (3,014) liquid resources and financing Management of liquid resources - - - Financing Shares bought back (310) (419) (1,965) Net proceeds from issue of shares - 284 284 Increase in bank borrowings 4,200 2,600 4,900 (Decrease)/increase in cash (306) 1,909 205 Reconciliation of net cash flow to movement in net debt (Decrease)/increase in cash (306) 1,909 205 Exchange movements 14 (43) (77) Cash movement from changes in debt (4,200) (2,600) (4,900) Movement in period (4,492) (734) (4,772) Net debt at beginning of year (11,101) (6,329) (6,329) Net debt at end of period (15,593) (7,063) (11,101) Analysis of changes in net debt 31 MAY EXCHANGE CASH 30 NOVEMBER 2014 MOVEMENTS FLOW 2014 £'000 £'000 £'000 £'000 Cash, short-term deposits and 1,499 14 (306) 1,207 cash held at brokers Bank loan (12,600) - (4,200) (16,800) Net debt (11,101) 14 (4,506) (15,593) . INVESCO PERPETUAL SELECT TRUST PLC NOTES TO THE CONDENSED FINANCIAL STATEMENTS 1. Accounting Policy The condensed financial statements have been prepared using the same accounting policies as those adopted in the 2014 annual financial report, which are consistent with applicable United Kingdom Accounting Standards and with the Statement of Recommended Practice `Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued by the Association of Investment Companies, in January 2009. 2. Management Fees Revisions to the UK Equity and Global Equity Income Portfolios' management fees are explained in the Chairman's Statement on page 3. Further to this, the Manager is entitled to a basic fee which is calculated and payable quarterly. The fee is based on the net assets of each Portfolio, at the following percentages: - 0.65% (up to 31 May 2014: 0.75%) per annum in the case of the UK Equity and Global Equity Income Portfolios; - 0.75% per annum for the Balanced Risk Portfolio; and - 0.25% per annum for the Managed Liquidity Portfolio. The Manager is also entitled to receive performance fees in respect of the UK Equity and Global Equity Income Portfolios of 12.5% of the increase in net assets per relevant Share in excess of a hurdle of the relevant benchmark plus 1% per annum. The amount of the performance fee that can be earned in any one year is limited to 0.65% (up to 31 May 2014: 0.75%) of the net assets of the relevant Portfolio and payment is subject to a high water mark. Any underperformance of the benchmark, or performance above the cap, is carried forward to subsequent periods. The UK Equity Portfolio earned a performance fee of £331,000 in the period (six months ended 30 November 2013: £289,000 and for the year ended 31 May 2014: £ 561,000) which is charged wholly to capital. No performance fee was earned by the Global Equity Portfolio during the six months. For the comparable six months to 30 November 2013 and the year to 31 May 2014, the Global Equity Income Portfolio outperformed its benchmark by more than the 1% hurdle. However, this overperformance was used to offset underperformance bought forward and at 31 May 2014 the underperformace carried forward was £259,000. The management fees and finance costs are charged to the applicable Portfolio as follows, in accordance with the Board's expected split of long-term income and capital returns: REVENUE CAPITAL PORTFOLIO RESERVE RESERVE UK Equity 30% 70% Global Equity Income 30% 70% Balanced Risk 30% 70% Managed Liquidity 100% - Any entitlement to the investment performance fee which is attributable to the UK Equity or Global Equity Income Portfolio is allocated 100% to capital as it is directly attributable to the capital performance of the investments in those Portfolios. 3. Tax expense represents the sums of tax currently payable and deferred tax. Any tax payable is based on the taxable profit for the period. It is the intention of the Directors to conduct the affairs of the Company so that it satisfies the conditions for approval as an investment trust company. Any company so approved is not liable for taxation on capital gains. 4. Basic Return per Ordinary Share Basic revenue, capital and total return per ordinary share is based on each of the returns on ordinary activities after taxation as shown by the income statement for the applicable Share class and on the following number of shares being the weighted average number of shares in issue throughout the period for each applicable Share class: WEIGHTED AVERAGE NUMBER OF SHARES SIX MONTHS SIX MONTHS YEAR ENDED ENDED ENDED 30 NOVEMBER 30 NOVEMBER 31 May 2014 2013 2014 £'000 £'000 £'000 UK Equity 39,543,866 38,782,924 39,077,545 Global Equity Income 31,405,689 31,109,723 31,262,679 Balanced Risk 7,736,808 8,886,283 8,742,185 Managed Liquidity 5,701,014 7,619,791 6,956,381 5. Net Asset Values per Ordinary Share The net asset values per ordinary share were based on the following Shareholders' funds and shares (excluding treasury shares) in issue at the period end: AT AT AT 30 NOVEMBER 30 NOVEMBER 31 MAY 2014 2013 2014 £'000 £'000 £'000 PORTFOLIO SHAREHOLDERS' FUNDS UK Equity 63,566 57,303 61,484 Global Equity Income 48,750 45,732 47,433 Balanced Risk 9,276 9,942 9,323 Managed Liquidity 5,896 7,148 5,889 PORTFOLIO shares in issue at period end UK Equity 39,561,880 39,123,468 39,509,336 Global Equity Income 31,323,049 31,340,725 31,443,444 Balanced Risk 7,684,451 8,787,651 7,876,821 Managed Liquidity 5,708,510 6,928,668 5,699,509 6. Movements in Share Capital and Share Class Conversion IN THE SIX MONTHS ENDED 30 NOVEMBER 2014 GLOBAL UK EQUITY BALANCED MANAGED EQUITY INCOME RISK LIQUIDITY Ordinary 1p shares (number) At 31 May 2014 39,509,336 31,443,444 7,876,821 5,699,509 Shares bought back into - (100,000) (100,000) (49,569) treasury Arising on share conversion: - August 2014 53,834 (13,899) (103,488) 60,256 - November 2014 (1,290) (6,496) 11,118 (1,686) At 30 November 2014 39,561,880 31,323,049 7,684,451 5,708,510 Treasury Shares (number) At 31 May 2014 6,523,000 4,438,000 4,050,000 6,638,216 Shares bought back into - 100,000 100,000 49,569 treasury At 30 November 2014 6,523,000 4,538,000 4,150,000 6,687,785 Total shares in issue at 46,084,880 35,861,049 11,834,451 12,396,295 30 November 2014 Average buy back price - 143.0p 115.8p 101.5p (including costs) Average issue price - - - - As part of the conversion process 57,839 deferred shares of 1p each were created. All deferred shares are cancelled before each period end and so no deferred shares are in issue at the start or end of a period. 7. Share Prices GLOBAL UK EQUITY BALANCED MANAGED PERIOD END EQUITY INCOME RISK LIQUIDITY 30 November 2013 143.0p 144.9p 110.3p 100.8p 31 May 2014 153.0p 148.0p 116.0p 101.4p 30 November 2014 159.8p 153.5p 116.0p 101.6p 8. Dividends on Ordinary Shares The first and second interim dividends were paid on 15 August 2014 and 14 November 2014 respectively: PORTFOLIO NUMBER DIVIDEND TOTAL OF SHARES RATE £'000 UK Equity First interim 39,509,136 1.00p 395 Second interim 39,562,970 1.30p 514 2.30p 909 Global Equity Income First interim 31,443,444 1.45p 456 Second interim 31,323,049 0.95p 298 2.40p 754 Dividends paid for the six months to 30 November 2014 totalled £1,663,000 (six months to 30 November 2013: £1,237,000). 9. The financial information contained in this half-yearly financial report, which has not been reviewed or audited by the independent auditor, does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The financial information for the half years ended 30 November 2014 and 30 November 2013 have not been audited. The figures and financial information for the year ended 31 May 2014 are extracted and abridged from the latest published accounts and do not constitute the statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and include the Report of the Independent Auditors, which was unqualified and did not include a statement under section 498 of the Companies Act 2006. By order of the Board Invesco Asset Management Limited Company Secretary
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