ANNUAL REPORT
October 31, 1996
INVESCO
INTERNATIONAL
FUNDS, INC.
European
Pacific Basin
International Growth
No-Load Mutual Funds Seeking
Opportunities Overseas
INVESCO FUNDS
<PAGE>
Market Overview November 1996
Because the currencies and economies of many countries are closely linked
to that of the U.S., securities markets beyond American shores have paid close
attention to the Federal Reserve Board. The correction in the U.S. stock market
last July jolted equity exchanges from Hong Kong to Switzerland; the subsequent
strong rebound in the S&P 500 had a parallel positive impact.
Markets in the Far East have been particularly challenging this year.
Historically, Asian securities markets have tended to slow or decline during the
summer months. This year, lingering doubts regarding economic recovery and the
outlook for corporate earnings have held down gains in the Japanese stock
market; in local currency terms, the Nikkei Dow advanced a scant 3% over the
first ten months of 1996. In addition, political problems -- including riots in
Indonesia and a tight monetary policy in Thailand -- stymied certain emerging
markets outside of Japan. For instance, the Thai market has dropped over 25%.
However, equity markets in Taiwan, Malaysia and Hong Kong have advanced
vigorously in 1996.
Investors in European markets have enjoyed a less volatile, generally more
rewarding year; as a group these markets have outperformed the S&P 500. Although
governments throughout that region are straining to reduce budget deficits and
unemployment remains high, many analysts believe that economies there will
continue to enjoy a moderate expansion. Key markets such as Germany and France
have produced double-digit returns over the first ten months of 1996, although
performance in the U.K. has lagged.
Results throughout Latin America have been more mixed but generally
positive. Due to an unexpectedly strong economic recovery, the Mexican bolsa has
advanced strongly through the year. Other markets, including Venezuela, Peru,
and Brazil, have also performed well. However, an overheated Chilean economy
caused the market to drop in recent months.
INVESCO International Funds, Inc.
Each of the funds is managed by a team of investment professionals
specializing in various countries. A senior investment policy group determines
the country-by-country allocation of the fund's assets, overall stock selection
methodology, and risk control policies.
The line graphs on the following pages illustrate the value of a $10,000
investment in each of the INVESCO International Funds, plus reinvested dividends
and capital gain distributions, for the ten-year period ended 10/31/96; or, in
the case of International Growth Fund, from inception through 10/31/96. The
charts and other total return figures cited reflect the portfolios' operating
expenses, but the indexes do not have expenses, which would, of course, have
lowered their performance.(2)
<PAGE>
European Fund
European Fund
Average Annualized Total Return
as of 10/31/96(2)
1 year 28.47%
-----------------------------------------
5 years 10.60%
-----------------------------------------
10 years 9.21%
-----------------------------------------
Lipper Analytical Services ranked INVESCO European Fund #5 of 43 European
region funds for the one-year period ended 10/31/96, based on total return
unadjusted for commissions. For the five-year period, the fund was ranked #13 of
17 funds, and for the 10-year period, #3 of 4.(3)
For the one-year period ended 10/31/96, INVESCO European Fund had a total
return of 23.47%, compared to a total return of 15.05% for the Morgan Stanley
Capital Index-Euro 18. (The MSCI-Euro 18 is an unmanaged, weighted index of
European stock markets. Because this index does not extend back a full 10 years,
the line graph compares the fund to the geographically broader MSCI-EAFE. Of
course, past performance is not a guarantee of future results.)(1),(2)
The fund's strong performance against the MSCI-Euro 18 resulted from a
number of factors. As we discussed in the semiannual report dated 4/30/96, the
mediocre performance of the regional index may largely be attributed to sub-par
results in the U.K. While economic growth in the U.K. is expected to strengthen
in 1997, driven by improvements in consumer spending and a cautious fiscal
policy, inflation is running relatively hotter than on the continent, and we
expect to continue underweighting British stocks.
Graph:
This line graph represents a comparison of the value of a $10,000
investment in the INVESCO European Fund to the value of a $10,000
investment in the MSCI Europe/Australia/Far East Index, assuming in each
case reinvestment of all dividends and capital gain distributions, for the
ten year period ended 10/31/96.
Positive trade balances have aided stock prices in Germany and France.
Both countries face serious economic challenges, particularly double-digit
unemployment figures. Nonetheless, stock prices have enjoyed strong advances in
both countries throughout the year. Currently, they represent about 23% of fund
assets.
In 1996, inflation and interest rates remain low throughout most of Europe.
Consequently, we have overweighted growth stocks, particularly in the areas of
health care, services, and luxury/upscale goods. Over the past six months, we
have opened new positions in Fresenius Medical Care AG Sponsored ADR (medical
equipment & supplies) and Cortecs International Ltd (medical related-drugs), as
well as Adidas AG and Puma AG Rudolf Dassler Sport (both textiles and apparel
manufacturers).
<PAGE>
Analysts generally do not anticipate the recovery to accelerate. We are
therefore focusing the fund's holdings on companies which have the potential to
grow earnings despite the economic environment. Sectors such as utilities,
financial services, and cyclical stocks are currently underweighted, in favor of
media related, pharmaceuticals, technology, and business services.
Pacific Basin Fund
Pacific Basin Fund
Average Annual Total Return
as of 10/31/96(2)
1 year 3.55%
-----------------------------------------
5 years 4.86%
-----------------------------------------
10 years 7.22%
-----------------------------------------
Lipper Analytical Services ranked INVESCO Pacific Basin Fund #24 of 38
Pacific region funds for the one-year period ended 10/31/96, based on total
return unadjusted for commissions. For the five-year period, the fund was ranked
#11 of 12 funds, and for the 10-year period, #3 of 4.(3)
For the one-year period ended 10/31/96, INVESCO Pacific Basin Fund had a
total return of 3.55%, compared to a total return of 3.50% for the Morgan
Stanley Capital Index-Pacific. (The MSCI-Pacific is an unmanaged, weighted index
of Far Eastern stock markets. Of course, past performance is not a guarantee of
future results.)(1),(2)
For the first half of 1996, the Japanese stock market reflected investors'
belief that the economy there was in recovery. Over the summer, sentiment
changed. In particular, the recent, inconclusive elections cast doubt on the new
government's ability to maintain -- much less expand -- the climate for economic
growth, and in fact, the economy contracted during the third quarter.
Over the latter half of the year, the Japanese market has backtracked. The
fund's focus on the Nikkei Dow has hurt performance over the latest six-month
period, although we are underweighted relative to the index. Nonetheless,
valuations are more attractive than they have been for some time, and certain
areas have the potential to outperform. In recent months, we have added two
computer software firms, Meitec Corp and NTT Data, and will continue to
selectively seek similar opportunities in the communications and electronics
industries.
At the same time, we have maintained a moderately defensive strategy
regarding emerging economies, while favoring markets such as Hong Kong. Over the
past six months, we have taken positions in Cheung Kong Infrastructure Holdings
Ltd (building & construction), as well as two additional real estate related
firms, Hopewell Holdings Ltd and DC Fiance Holdings Ltd.
<PAGE>
The Malaysian market has advanced strongly this year. In recent months, we
have expanded our weighting here. New holdings include Intria Berhad
(chemicals), Arab Malaysian Berhad (diversified), Landmarks Berhad (hotels), and
Malaysian Resources Berhad (real estate related).
Graph:
This line graph represents a comparison of the value of a $10,000
investment in the INVESCO Pacific Basin Fund to the value of a $10,000
investment in the MSCI Pacific Index, assuming in each case reinvestment
of all dividends and capital gain distributions, for the ten year period
ended 10/31/96.
Given the political and economic outlook in Asia-ex Japan, we remain
cautious about certain emerging markets. We will look for opportunities to
increase holdings on a selective basis in Malaysia, as well as Singapore and
Australia, while concurrently reducing exposure to Thailand, Taiwan, and South
Korea.
International Growth Fund
International Fund
Average Annual Total Return
as of 10/31/96(2)
1 year 12.01%
-----------------------------------------
5 years 5.07%
-----------------------------------------
10 years 5.65%
-----------------------------------------
Lipper Analytical Services ranked INVESCO International Growth Fund #128
of 324 international funds for the one-year period ended 10/31/96, based on
total return unadjusted for commissions. For the five-year period, the fund was
ranked #66 of 69 funds.(3)
For the one-year period ended 10/31/96, INVESCO International Growth Fund
had a total return of 12.01%. The Morgan Stanley Capital
Index-Europe/Australia/Far East had a total return of 10.77% for the same
period. The fund also outperformed the index over the most recent 6-month
period; the fund rose 1.39% compared to (2.29%) for the MSCI-EAFE. (The
MSCI-EAFE is a weighted index of international stock markets. Of course, past
performance is not a guarantee of future results.)(1),(2)
Over the first half of the fiscal year, we decreased Japanese and British
holdings in favor of increased weightings in France and selected emerging
economies of Southeast Asia, such as Malaysia, Singapore, the Philippines, and
South Korea. We also took modest positions in Brazil.
The core position in Hong Kong aided fund results. That market ties its
currency to the U.S. dollar and is highly sensitive to U.S. interest rates; as
the latter stabilized in 1996, results from the Hang Seng market index continued
to improve.
<PAGE>
European results have also been encouraging in 1996. Although the outlook
does not favor a more vigorous economic recovery, selected companies have the
potential to perform well despite the economic situation. As a result, we
anticipate favoring continental Europe and certain Asian countries in the
near-term.
Graph:
This line graph represents a comparison of the value of a $10,000
investment in the INVESCO International Growth Fund to the value of a
$10,000 investment in the MSCI Pacific Index, assuming in each case
reinvestment of all dividends and capital gain distributions, for the nine
year period ended 10/31/96.
In recent months, we have selectively added to holdings in a variety of
industries, maintaining the fund's broad level of market sector and geographic
diversification. For example, new financial services positions include Banco
Frances del Rio de la Plata SA Sponsored ADR (Argentina), Malayan Banking Berhad
(Malaysia), and Oversea-Chinese Banking Ltd (Singapore), New Japan Securities
Ltd (Japan), and Schweiz Rueckversicherungs Gesellschaft (Switzerland). On the
consumer side, we added Blue Square-Israel Ltd Sponsored ADR (Israel) and
Controladora Commercial Mexican SA de CV ADR (Mexico). We also took positions in
two telecommunications firms, PT Indonesian Satellite Spnsrd (Indonesia) and
Telecom Brasileiras SA Spnsrd ADR (Brazil).
(1)The MSCI-EAFE, MSCI-Euro 18, and MSCI-Pacific are unmanaged indexes of
common stocks considered to be representative of the overall international,
European, and Pacific Basin regional securities markets, respectively. The
Nikkei Dow and Hang Seng are unmanaged indexes indicative of broad market
performance in Japan and Hong Kong, respectively. The S&P 500 is an unmanaged
index indicative of the broad U.S. stock market.
(2)Total return assumes reinvestment of dividends and capital gain
distributions for the periods indicated. Past performance is not a guarantee of
future results. Investment return and principal value will fluctuate so that,
when redeemed, an investor's shares may be worth more or less than when
purchased.
(3)Rankings provided by Lipper Analytical Services, an independent fund
analyst, are based upon total return performance unadjusted for commissions.
When available, rankings are cited for one-, five- and 10-year periods.
<PAGE>
INVESCO International Funds, Inc.
Ten Largest Common Stock Holdings
October 31, 1996
Description Value
- --------------------------------------------------------------------------------
EUROPEAN Fund
Tomra Systems A/S A $8,395,278
Sandoz AG Ltd Registered Shrs 8,125,045
Gucci Group NV New York Registered Shrs 6,900,000
TT Tieto OY Series B Shrs 6,817,111
Adidas AG 6,604,941
Falck A/S 6,213,448
Cimentos de Portugal SA 5,467,678
Sage Group PLC 5,107,069
Bulgari SpA 5,026,193
Compass Group PLC 4,966,620
INTERNATIONAL GROWTH Fund
Christian Dior SA $1,890,297
Banco Bilbao Vizcaya SA Registered Shrs 1,614,815
BIC SA 1,561,570
Sandoz AG Ltd Registered Shrs 1,363,847
HSBC Holdings PLC 1,287,698
AXA SA 1,279,803
Autoliv AB 1,202,791
Schweiz Rueckversicherungs
Gesellschaft Registered Shrs 1,185,031
Hutchison Whampoa Ltd 1,159,296
Canal Plus 1,151,533
PACIFIC BASIN Fund
HSBC Holdings PLC $4,785,042
New World Development Ltd 4,073,832
Hutchison Whampoa Ltd 4,050,553
CITIC Pacific Ltd 3,890,186
Cheung Kong Holdings Ltd 3,664,380
Sun Hung Kai Properties Ltd 3,584,972
Swire Pacific Ltd Class A Shrs 3,442,388
Malayan Banking Berhad 3,413,542
United Engineers Berhad 3,166,184
Hang Seng Bank Ltd 3,085,119
Composition of holdings is subject to change.
<PAGE>
INVESCO International Funds, Inc.
Statement of Investment Securities
October 31, 1996
Shares or
Industry Principal
Description Code Amount Value
- --------------------------------------------------------------------------------
EUROPEAN Fund
COMMON STOCKS &
WARRANTS 90.40%
AUSTRALIA 0.58%
Cortecs International Ltd
London Shrs* MD 500,000 $1,669,110
-------------
AUSTRIA 1.38%
Wolford AG Bearer Shrs TA 30,000 3,958,644
-------------
BELGIUM 1.00%
Barco NV* EL 17,500 2,878,366
-------------
DENMARK 3.85%
Falck A/S SA 23,000 6,213,448
Oticon Holding A/S Series A Shrs HC 30,000 4,826,564
-------------
11,040,012
-------------
FINLAND 5.27%
KCI Konecranes International* MY 90,000 2,482,571
Orion-yhtyma OY Series A Shrs MD 90,000 3,137,970
Raision Tehtaat OY FD 45,000 2,691,107
TT Tieto OY Series B Shrs CO 101,720 6,817,111
-------------
15,128,759
-------------
FRANCE 9.83%
Altran Technologies SA BS 16,500 4,942,062
Axime* BS 1,283 134,876
CIPE-France SA SA 12,000 1,491,722
Canal Plus BR 15,000 3,714,622
Castorama-Dubois
Investissements RT 14,000 2,398,109
Cegedim SA HC 5,640 444,073
Christian Dior SA DV 22,000 2,928,629
Christian Dior SA
Warrants (Exp 1998)* DV 30,000 625,466
Dassault Systemes SA* CO 71,050 3,059,987
Infogrames Entertainment SA* RR 3,600 403,117
Manutan WH 20,000 1,675,740
Penauille Polyservices BS 14,000 2,521,440
Sodexho SA BS 8,000 3,860,466
-------------
28,200,309
-------------
<PAGE>
GERMANY 8.80%
Adidas AG TA 77,000 6,604,941
Bayer AG Warrants
(Exp 1997)* CH 10,000 1,595,955
Bayerische Motoren Werke AG AM 8,000 4,684,112
Eurobike AG* RT 85,000 1,881,773
Fresenius Medical Care AG
Sponsored ADR* MQ 156,406 4,653,078
Hoechst AG CH 110,000 4,139,901
Puma AG Rudolf Dassler Sport* TA 56,400 1,667,922
-------------
25,227,682
-------------
ITALY 8.11%
Bulgari SpA RT 290,000 5,026,193
De Rigo SpA Sponsored ADR* MP 150,220 1,633,642
Ente Nazionale Idrocarburi SpA
Registered Shrs OG 600,000 2,872,581
Gucci Group NV New York
Registered Shrs TA 100,000 6,900,000
Mediolanum SpA* IN 260,000 2,576,097
SAES Getters SpA Non-Conv
Savings Shrs CH 150,000 1,848,495
Safilo SpA MQ 135,000 2,402,055
-------------
23,259,063
-------------
NETHERLANDS 7.87%
BE Semiconductor Industries NV
New York Registered Shrs* SE 130,600 1,567,200
Baan Co NV* CO 75,000 2,775,000
Getronics NV CO 168,000 4,130,901
ING Groep NV FR 122,500 3,821,125
Oce-Van Der Grinten NV OE 44,500 4,749,392
Randstad Holding NV* BS 54,000 4,368,651
Toolex-Alpha NV* AV 120,000 1,153,369
-------------
22,565,638
-------------
NORWAY 5.17%
Alvern A/S* AD 80,531 972,659
Ark A/S A CO 60,000 1,449,368
Nera A/S A TC 65,000 2,339,929
Sensonor A/S* AM 230,000 1,659,558
Tomra Systems A/S A MY 591,398 8,395,278
-------------
14,816,792
-------------
PORTUGAL 1.91%
Cimentos de Portugal SA BC 260,000 5,467,678
-------------
<PAGE>
SPAIN 1.32%
Banco Bilbao Vizcaya SA
Registered Shrs BK 50,000 2,431,950
Sol Melia SA* HL 50,530 1,345,805
-------------
3,777,755
-------------
SWEDEN 5.83%
Assa Abloy AB Series B Shrs MA 237,446 3,653,305
Autoliv AB AM 80,000 3,400,117
Caran AB Series B Shrs CO 50,000 563,639
Frontec AB Series B Shrs* CO 241,000 3,450,997
Nobel Biocare AB MQ 195,000 3,297,291
Pricer AB Series B Shrs* BS 57,142 1,175,138
Scala International AB* CO 16,000 1,182,120
-------------
16,722,607
-------------
SWITZERLAND 7.39%
Oerlikon-Buhrle Holding AG Ltd
Registered Shrs* DV 20,000 1,982,203
Roche Holding AG Ltd
Genusscheine Non-Voting Shrs MD 300 2,278,540
Sandoz AG Ltd Registered Shrs MD 7,000 8,125,045
Schweiz Rueckversicherungs
Gesellschaft Registered Shrs* IN 3,600 3,878,285
Sulzer AG Registered Shrs MA 4,500 2,570,508
Swiss Bank Sandoz Warrants
(Exp 1997)* BK 25,000 552,157
Swissair AG Registered Shrs* TR 2,300 1,799,872
-------------
21,186,610
-------------
UNITED KINGDOM 21.25%
Arsenal Football Club PLC* RR 306 984,124
Ashbourne PLC HC 300,000 691,256
Bass PLC FD 200,000 2,566,358
Business Post PLC BS 200,000 1,506,270
Carlton Communications PLC EL 400,000 3,204,691
Chiroscience Group PLC* MD 322,856 1,871,630
Compass Group PLC BS 500,000 4,966,620
FirstBus Group PLC TR 1,037,771 3,084,079
Glaxo Wellcome PLC MD 175,000 2,747,111
Granada Group PLC AV 240,000 3,456,768
Hays PLC BS 170,000 1,421,512
Kingfisher PLC RT 400,000 4,256,638
Lloyds TSB Group PLC BK 430,800 2,735,907
Manchester United PLC RR 257,000 2,151,084
Marks & Spencer PLC RT 160,000 1,343,104
Memory Corp PLC* CO 75,000 81,216
Misys PLC CO 240,000 3,546,655
National Express Group PLC TR 150,000 1,154,128
National Power PLC UT 160,000 1,060,414
National Westminster Bank PLC BK 220,000 2,513,110
Rentokil Group PLC BS 550,000 3,694,432
Sage Group PLC CO 650,000 5,107,069
Siebe PLC CI 160,000 2,518,158
TC Group PLC HC 600,000 1,416,708
<PAGE>
Tottenham Hotspur PLC RR 165,000 1,426,723
VideoLogic Group PLC* CO 400,000 335,450
Visual Action Holdings PLC BS 300,000 1,121,153
-------------
60,962,368
-------------
UNITED STATES 0.84%
OXiGENE Inc* MD 100,000 2,425,000
TOTAL COMMON STOCKS & WARRANTS
(Cost $211,015,723) 259,286,393
-------------
PREFERRED STOCKS 6.24%
GERMANY 6.24%
Fielmann AG Non-Voting Pfd RT 45,000 1,873,513
Fresenius AG Non-Voting Pfd MP 38,500 8,332,505
SAP AG Non-Voting Pfd CO 47,000 6,330,027
Sander (Jil) AG Non-Voting Pfd TA 2,053 1,356,727
-------------
TOTAL PREFERRED STOCKS
(Cost $14,456,876) 17,892,772
-------------
SHORT-TERM INVESTMENTS -
COMMERCIAL PAPER 3.36%
UNITED STATES 3.36%
Associates Corp of North America
5.650%, 11/1/1996
(Cost $9,640,000) FR 9,640,000 9,640,000
-------------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $235,112,599)
(Cost for Income Tax Purposes
$236,320,805) 286,819,165
=============
INTERNATIONAL GROWTH Fund
COMMON STOCKS & WARRANTS 91.24%
ARGENTINA 0.96%
Banco Frances del Rio de la
Plata SA Sponsored ADR BK 8,400 220,500
Perez Companc SA Sponsored
ADR Representing 2 Class
B Shrs DV 50,850 640,786
-------------
861,286
-------------
AUSTRALIA 3.10%
Aberfoyle Ltd MM 125,000 261,723
Broken Hill Proprietary Ltd MM 21,900 290,929
CRA Ltd MM 23,025 361,205
CSR Ltd DV 85,000 285,833
<PAGE>
National Australia Bank Ltd BK 56,300 618,424
News Corp Ltd PR 95,000 540,974
WMC Holdings Ltd MM 66,000 415,093
-------------
2,774,181
-------------
BRAZIL 0.13%
Rhodia-Ster SA GDR^ CH 33,000 112,418
-------------
CHILE 0.60%
Madeco SA ADR BC 8,500 204,000
Sociedad Quimica y Minera de
Chile SA Sponsored ADR CH 5,800 333,500
-------------
537,500
-------------
CHINA 0.56%
Guangshen Railway Ltd
Sponsored ADR* TR 27,000 502,875
-------------
FRANCE 8.36%
AXA SA IN 20,584 1,279,803
BIC SA DV 10,400 1,561,570
Canal Plus BR 4,650 1,151,533
Carrefour SA RT 1,850 1,027,458
Christian Dior SA DV 14,200 1,890,297
Sodexho SA BS 1,200 579,070
-------------
7,489,731
-------------
GERMANY 4.99%
Adidas AG TA 12,000 1,029,342
Bayer AG CH 28,800 1,089,040
Bayerische Motoren Werke AG AM 1,800 1,053,925
Hoechst AG CH 26,100 982,286
Siemens AG EL 6,100 315,441
-------------
4,470,034
-------------
GREECE 0.43%
Hellenic Telecommunication
Organization SA TC 22,000 389,282
-------------
HONG KONG 5.65%
Bank of East Asia Ltd BK 65,000 253,871
CITIC Pacific Ltd DV 142,000 690,508
Henderson Land Development Ltd RE 109,000 969,152
Hutchison Whampoa Ltd DV 166,000 1,159,296
New World Infrastructure Ltd* EG 393,000 978,399
Sun Hung Kai Properties Ltd RE 88,700 1,009,483
-------------
5,060,709
-------------
INDIA 0.31%
Larsen & Toubro Ltd GDR MY 19,000 273,220
-------------
<PAGE>
INDONESIA 0.60%
PT Indocement Tunggal Prakarsa
Foreign Shrs DV 150,000 226,834
PT Indosat Sponsored ADR TC 10,300 310,288
-------------
537,122
-------------
ISRAEL 1.23%
Blue Square-Israel Ltd
Sponsored ADR* RT 22,000 346,500
Koor Industries Ltd
Sponsored ADR TC 22,000 382,250
Teva Pharmaceutical Industries
Ltd ADR MD 9,000 376,875
-------------
1,105,625
-------------
ITALY 3.22%
Bulgari SpA RT 47,000 814,590
Ente Nazionale Idrocarburi SpA
Registered Shrs OG 208,460 998,030
Telecom Italia Mobile SpA UT 520,000 1,074,302
-------------
2,886,922
-------------
JAPAN 16.04%
Acom Co Ltd FR 8,000 307,368
Bank of Tokyo-Mitsubishi Ltd BK 17,850 364,094
Chugai Pharmaceutical Ltd MD 40,000 365,747
DDI Corp TC 64 481,098
Dai-Tokyo Fire & Marine
Insurance Ltd IN 60,000 375,067
Fanuc Ltd EL 11,000 352,999
Fujitsu Ltd CO 37,000 325,304
Itochu Corp DV 60,000 362,406
Kaneka Corp CH 60,000 337,613
Kawasaki Steel MM 120,000 370,319
Komatsu Ltd MY 38,000 311,377
Kyocera Corp EL 6,000 396,167
Maeda Corp Series 2 Warrants
(Exp 1997)* BC 100 41,250
Mitsubishi Estate Ltd RE 27,000 337,085
Mitsubishi Heavy Industries Ltd MY 40,000 307,720
Mitsubishi Materials MM 58,000 258,028
NTT Data CO 14 414,807
New Japan Securities Ltd* IB 43,000 203,016
Nippon COMSYS TC 31,000 397,926
Nippon Yusen Kabushiki Kaisha TR 58,000 290,664
Nishimatsu Construction Ltd EG 38,000 350,801
Nissan Motor Ltd AM 43,000 325,506
Nomura Securities Ltd IB 26,000 429,753
Onward Kashiyama Ltd TA 22,000 307,544
ORIX Corp FR 12,000 447,337
Rohm Co Ltd EL 7,000 415,422
Sanwa Bank Ltd BK 22,000 375,243
<PAGE>
Secom Co Ltd EL 5,000 298,049
Sega Enterprises Ltd TH 9,500 384,210
Sharp Corp EL 34,000 517,145
Shizuoka Bank Ltd BK 35,000 400,036
Sony Music Entertainment RR 12,200 470,882
Sumitomo Bank Ltd BK 25,000 439,600
Sumitomo Chemical Ltd CH 90,000 384,562
Sumitomo Warehouse Ltd SF 60,000 378,232
Taiyo Yuden Ltd EE 25,000 323,106
Teijin Ltd TA 45,000 208,502
Tokyo Electric Power UT 14,200 325,849
Tokyu Department Store Ltd RT 81,000 462,899
Yamato Transport TR 28,000 290,488
Yamazaki Baking Ltd FD 15,000 238,703
-------------
14,373,924
-------------
MALAYSIA 2.73%
Arab Malaysian Berhad DV 114,000 505,323
Malayan Banking Berhad BK 45,500 450,192
Perusahaan Otomobil Nasional
Berhad-Proton AM 70,000 443,266
Petronas Gas Berhad OG 125,000 509,558
Resorts World Berhad GA 94,000 539,439
-------------
2,447,778
-------------
MEXICO 1.55%
Cemex SA de CV Series B Shrs BC 65,000 234,677
Cifra SA de CV Series B ADR* RT 200,000 238,000
Controladora Comercial
Mexicana SA de CV ADR RT 12,000 211,500
Empresas la Moderna SA de CV
Sponsored ADR TO 11,000 198,000
Panamerican Beverages Class A FD 11,700 510,412
-------------
1,392,589
-------------
NETHERLANDS 4.40%
ABN AMRO Holdings NV BK 8,600 486,314
Elsevier NV PR 40,000 665,133
Getronics NV CO 27,667 680,295
ING Groep NV FR 27,500 857,803
IS Himalayan Fund NV* IC 36,696 440,352
IS Himalayan Fund NV
Warrants (Exp 1996)* IC 5,839 526
Randstad Holding NV BS 10,000 809,009
-------------
3,939,432
-------------
NEW ZEALAND 0.35%
Telecom Corp of New
Zealand Ltd TC 60,000 311,963
-------------
<PAGE>
PERU 0.50%
Compania de Minas
Buenaventura SA Sponsored
ADR Representing
Series B Shrs* MM 26,750 448,062
-------------
PHILIPPINES 0.53%
C&P Homes BC 815,800 372,514
Universal Robina FD 224,400 102,466
-------------
474,980
-------------
PORTUGAL 0.35%
Cimentos de Portugal SA BC 15,000 315,443
-------------
SINGAPORE 1.91%
City Developments Ltd RE 38,400 302,512
DBS Land Ltd RE 89,000 280,454
Keppel Corp Ltd DV 40,000 298,084
Oversea-Chinese Banking Ltd
Foreign Shrs BK 45,000 514,194
Singapore Press Holdings Ltd
Foreign Shrs PR 19,200 318,864
-------------
1,714,108
-------------
SOUTH KOREA 0.56%
Korea Electric Power
Sponsored ADR UT 15,000 270,000
Samsung Electronics Ltd GDR^ EL 10,638 228,717
-------------
498,717
-------------
SPAIN 2.90%
Banco Bilbao Vizcaya SA
Registered Shrs BK 33,200 1,614,815
Empresa Nacional de
Electricidad SA UT 16,025 981,843
-------------
2,596,658
-------------
SWEDEN 3.82%
Astra AB Series A Shrs MD 23,350 1,074,221
Autoliv AB AM 28,300 1,202,791
Telefonaktiebolaget Ericsson
(L M) Series B Shrs TC 42,200 1,144,280
-------------
3,421,292
-------------
SWITZERLAND 5.88%
Adecco SA Bearer Shrs BS 2,480 699,451
Nestle SA Registered Shrs FD 300 327,242
Roche Holding AG Ltd
Genusscheine Non-Voting Shrs MD 125 949,392
<PAGE>
Sandoz AG Ltd Registered Shrs MD 1,175 1,363,847
Schweiz Rueckversicherungs
Gesellschaft Registered Shrs IN 1,100 1,185,031
Swissair AG Registered Shrs* TR 955 747,338
-------------
5,272,301
-------------
TAIWAN 0.46%
Taipei Fund IDR Representing
100 Registered Units* IC 5,000 407,500
-------------
THAILAND 1.05%
Banpu Public Ltd MM 5,600 102,317
Banpu Public Ltd Foreign Shrs MM 5,400 99,933
Land & House PLC Foreign Shrs RE 8,000 66,497
Siam Cement PLC
Registered Foreign Shrs BC 5,700 194,879
Thai Farmers Bank PLC
Foreign Shrs BK 15,000 114,683
Tipco Asphalt PLC BC 67,000 362,517
-------------
940,826
-------------
UNITED KINGDOM 18.07%
BAA PLC TR 46,117 373,607
BOC Group PLC CH 18,400 259,626
BTR PLC DV 63,000 264,167
Bass PLC FD 46,200 592,829
British Airways PLC TR 35,560 320,799
British Telecommunications PLC TC 90,000 521,007
Cadbury Schweppes PLC FD 46,428 386,333
Carlton Communications PLC EL 44,830 359,166
Croda International PLC CH 35,000 204,039
FirstBus Group PLC TR 101,571 301,852
Formosa Fund IDR Representing
Registered Shrs* IC 80 684,000
General Accident PLC IN 44,400 529,605
Glaxo Wellcome PLC MD 22,820 358,223
Glynwed International PLC MM 28,400 162,788
Granada Group PLC AV 34,900 502,672
Grand Metropolitan PLC FD 31,200 235,486
HSBC Holdings PLC BK 63,218 1,287,698
Hays PLC BS 50,400 421,436
Korea Europe Fund IDR* IC 200 620,000
LASMO PLC OG 90,000 313,630
Lloyds TSB Group PLC BK 145,272 922,588
LucasVarity PLC* AM 123,200 498,538
MFI Furniture Group PLC MA 80,900 264,792
Marks & Spencer PLC RT 90,000 755,496
National Power PLC UT 40,000 265,104
National Westminster Bank PLC BK 48,580 554,940
Prudential Corp PLC IN 73,650 556,483
Sainsbury (J) PLC RT 56,100 332,526
Scottish Power PLC UT 54,754 280,413
<PAGE>
Severn Trent PLC UT 41,100 413,610
Shell Transport & Trading PLC OG 30,000 492,184
Siebe PLC CI 37,800 594,915
TI Group PLC EG 34,600 320,308
Tomkins PLC DV 102,500 430,630
Unigate PLC FD 50,000 351,734
Wolseley PLC BC 58,800 456,727
-------------
16,189,951
-------------
TOTAL COMMON STOCKS & WARRANTS
(Cost $73,178,175) 81,746,429
-------------
PREFERRED STOCKS 4.52%
BRAZIL 1.95%
Companhia Energetica de Minas
Gerais Sponsored ADR
Representing Pfd Shrs^ UT 15,000 475,818
Telecomunicacoes Brasileiras
SA-Telebras Sponsored ADR
Representing Pfd Shrs TC 10,845 807,952
Telecomunicacoes Brasileiras
SA-Telebras Sponsored ADR
Representing Pfd Shrs^ TC 455 33,658
Usinas Siderurgicas de Minas
Gerais SA Sponsored ADR
Representing Pfd Shrs^ MM 41,000 427,003
-------------
1,744,431
-------------
GERMANY 2.57%
Fresenius AG Non-Voting Pfd MP 6,600 1,428,429
SAP AG Non-Voting Pfd CO 6,500 875,429
-------------
2,303,858
-------------
TOTAL PREFERRED STOCKS
(Cost $2,925,692) 4,048,289
-------------
FIXED INCOME SECURITIES 0.82%
HONG KONG 0.17%
Bangkok Bank PLC
Unsecured Conv Deb
3.250%, 3/3/2004 BK 154,000 156,695
-------------
MALAYSIA 0.65%
United Engineers Berhad
Conv Deb, 2.000%, 3/1/2004 EG 430,000 580,500
-------------
TOTAL FIXED INCOME SECURITIES
(Cost $638,463) 737,195
-------------
<PAGE>
SHORT-TERM INVESTMENTS -
REPURCHASE AGREEMENTS 3.42%
UNITED STATES 3.42%
Repurchase Agreement with
State Street Bank & Trust Co
dated 10/31/1996 due 11/1/1996
at 5.430%, repurchased at
$3,061,462 (Collateralized
by US Treasury Notes due
8/15/2017 at 8.875%
value $3,395,196)
(Cost $3,061,000) RA 3,061,000 3,061,000
-------------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $79,803,330)
(Cost for Income Tax Purposes
$80,189,294) 89,592,913
=============
PACIFIC BASIN Fund
COMMON STOCKS & WARRANTS 100.00%
AUSTRALIA 2.08%
Comalco Ltd MM 300,000 1,560,821
WMC Holdings Ltd MM 240,000 1,509,428
-------------
3,070,249
-------------
HONG KONG 25.35%
CNPC Hong Kong Ltd* OG 16,800,000 1,194,984
Cheung Kong Holdings Ltd RE 457,000 3,664,380
Cheung Kong Infrastructure
Holdings Ltd* BC 600,000 1,117,394
CITIC Pacific Ltd DV 800,000 3,890,186
Cosco Pacific Ltd BS 1,600,000 1,531,243
DC Finance Holdings Ltd RE 1,600,000 988,066
Guangzhou Investment Ltd RE 2,000,000 646,640
Hang Seng Bank Ltd BK 260,000 3,085,119
Henderson Land Development Ltd RE 275,000 2,445,107
Hopewell Holdings Ltd RE 1,000,000 672,506
Hutchison Whampoa Ltd DV 80,000 4,050,553
New World Development Ltd RE 700,000 4,073,832
New World Infrastructure Ltd* EG 500,403 1,245,785
Shanghai Industrial Holdings
Ltd* DV 786,000 1,783,989
Sun Hung Kai Properties Ltd RE 315,000 3,584,972
Swire Pacific Ltd Class A Shrs DV 390,000 3,442,388
-------------
37,417,144
-------------
JAPAN 38.59%
77 Bank Ltd BK 152,000 1,429,931
Acom Co Ltd FR 22,800 876,000
Asahi Bank Ltd BK 200,000 2,057,328
Bank of Tokyo-Mitsubishi Ltd BK 62,500 1,274,840
Chugai Pharmaceutical Ltd MD 200,000 1,828,736
<PAGE>
DDI Corp TC 210 1,578,604
Dai-Tokyo Fire & Marine
Insurance Ltd IN 238,000 1,487,765
Fanuc Ltd EL 45,000 1,444,086
Fujitsu Ltd CO 170,000 1,494,640
Hankyu Department Stores RT 130,000 1,554,426
Hitachi Metals Ltd MM 160,000 1,318,097
Itochu Corp DV 290,000 1,751,630
Kaneka Corp CH 230,000 1,294,182
Kitagawa Industries Ltd MA 14,300 578,338
Komatsu Ltd MY 200,000 1,638,829
Kyocera Corp EL 30,000 1,980,838
Maeda Corp Series 2 Warrants
(Exp 1997)* BC 400 165,000
Meitec Corp CO 2,000 41,147
Mitsubishi Estate Ltd RE 130,000 1,623,003
Mitsubishi Heavy Industries Ltd MY 192,000 1,477,056
Mitsubishi Materials MM 230,000 1,023,213
NTT Data CO 60 1,777,742
Nippon COMSYS TC 103,000 1,322,141
Nippon Yusen Kabushiki Kaisha TR 210,000 1,052,402
Nippon Yusen Kabushiki
Kaisha Warrants (Exp 1997)* TR 100 48,125
Nishimatsu Construction Ltd EG 140,000 1,292,424
Nissan Motor Ltd AM 165,000 1,249,035
Nomura Securities Ltd IB 100,000 1,652,896
Onward Kashiyama Ltd TA 68,000 950,591
ORIX Corp FR 40,000 1,491,123
Rohm Co Ltd EL 34,000 2,017,764
Secom Co Ltd EL 24,000 1,430,634
Sega Enterprises Ltd TH 39,000 1,577,285
Sharp Corp EL 122,000 1,855,640
Sony Music Entertainment RR 40,000 1,543,875
Sumitomo Chemical Ltd CH 370,000 1,580,977
Sumitomo Warehouse Ltd SF 240,000 1,512,927
Taiyo Yuden Ltd EE 125,000 1,615,530
Teijin Ltd TA 200,000 926,677
Tobu Railway Ltd TR 140,000 788,994
Tokyo Electric Power UT 40,600 931,653
Yamato Transport Ltd TR 130,000 1,348,693
Yamazaki Baking Ltd FD 68,000 1,082,119
-------------
56,966,936
-------------
MALAYSIA 15.75%
Arab Malaysian Berhad DV 400,000 1,773,063
Gamuda Berhad EG 60,000 491,550
HICOM Holdings Berhad TR 680,000 1,816,598
HICOM Holdings Berhad
Warrants (Exp 2000)* TR 256,750 290,618
Intria Berhad CH 700,000 1,870,028
Landmarks Berhad HL 1,000,000 1,337,713
Malayan Banking Berhad BK 345,000 3,413,542
Malaysian Resources Berhad RE 400,000 1,535,599
<PAGE>
Petronas Gas Berhad OG 400,000 1,630,585
Rashid Hussain Berhad IB 348,000 2,176,118
Technology Resources
Industries Berhad TC 730,000 1,747,932
Telekom Berhad TC 150,000 1,323,861
Time Engineering Berhad DV 250,000 488,780
Time Engineering Berhad
Warrants (Exp 2001)* DV 375,000 179,582
United Engineers Berhad EG 400,000 3,166,184
-------------
23,241,753
-------------
PHILIPPINES 0.62%
Philippine National Bank* BK 80,000 920,858
-------------
SINGAPORE 7.87%
DBS Land Ltd RE 480,000 1,512,562
Development Bank Ltd
Foreign Shrs BK 165,000 1,979,063
Keppel Corp Ltd DV 155,500 1,158,800
Oversea-Chinese Banking Ltd
Foreign Shrs BK 180,600 2,063,633
Straits Steamship Land Ltd DV 700,000 2,146,202
United Overseas Bank Ltd BK 283,325 2,754,827
-------------
11,615,087
-------------
SOUTH KOREA 1.71%
Cho Hung Bank BK 76,831 752,398
Korea Electric Power UT 60,300 1,771,536
-------------
2,523,934
-------------
TAIWAN 0.26%
Want Want Holdings* AM 153,000 376,380
-------------
THAILAND 4.53%
Bangkok Bank PLC Foreign Shrs BK 240,000 2,559,498
Electricity Generating PLC
Foreign Shrs UT 700,000 2,030,974
Thai Farmers Bank PLC
Foreign Shrs BK 270,000 2,064,301
Warrants (Exp 2002)*^ BK 38,688 37,922
-------------
6,692,695
-------------
UNITED KINGDOM 3.24%
HSBC Holdings PLC BK 234,916 4,785,042
-------------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $139,039,425)
(Cost for Income Tax Purposes
$139,145,463) 147,610,078
=============
<PAGE>
* Security is non-income producing.
^ The following are restricted securities at October 31, 1996:
Value as
Acquisition Acquisition % of
Description Date(s) Cost Net Assets
- --------------------------------------------------------------------------------
International Growth Fund
Companhia Energetica
de Minas Gerais
Sponsored ADR
Representing Pfd Shrs 1/24/96 $301,500 0.50%
Rhodia-Ster SA GDR 9/15/95-
1/19/96 431,750 0.12
Samsung Electronics
GDS Ltd 8/16/95 246,000 0.24
Telecomunicacoes
Brasileiras SA-
Telebras Sponsored
ADR Representing
Pfd Shrs 9/14/94 25,971 0.04
Usinas Siderurgicas
de Minas Gerais SA
Sponsored ADR
Representing Pfd Shrs 4/11/95-
8/22/96 440,625 0.45%
-------
1.35%
=======
Pacific Basin Fund
Thai Farmers Bank PLC
Warrants 9/12/96 38,184 0.03%
=======
SUMMARY OF INVESTMENTS BY INDUSTRY
% of
Industry Investment
Industry Code Securities Value
- --------------------------------------------------------------------------------
EUROPEAN FUND
Advertising AD 0.34% $972,659
Audio/Video AV 1.61 4,610,137
Automobile Related AM 3.40 9,743,787
Banking BK 2.87 8,233,124
Broadcasting BR 1.29 3,714,622
Building & Construction
Related BC 1.91 5,467,678
Business & Commercial
Services BS 10.36 29,712,620
<PAGE>
Chemicals CH 2.64 7,584,351
Computer Related CO 13.54 38,829,540
Control Instruments CI 0.88 2,518,158
Diversified Companies DV 1.93 5,536,298
Electronics EL 2.12 6,083,057
Finance Related FR 4.69 13,461,125
Food Products & Beverages FD 1.83 5,257,465
Health Care Related HC 2.57 7,378,601
Hotels HL 0.47 1,345,805
Insurance IN 2.25 6,454,382
Machinery MY 3.79 10,877,849
Manufacturing MA 2.17 6,223,813
Medical Equipment & Supplies MQ 3.61 10,352,424
Medical Products MP 3.47 9,966,147
Medical Related - Drugs MD 7.76 22,254,406
Office Equipment OE 1.66 4,749,392
Oil & Gas Related OG 1.00 2,872,581
Recreation Related RR 1.73 4,965,048
Retail RT 5.85 16,779,330
Safety Equipment & Services SA 2.69 7,705,170
Semiconductor Equipment SE 0.55 1,567,200
Telecommunications TC 0.82 2,339,929
Textiles & Apparel
Manufacturers TA 7.14 20,488,234
Transportation TR 2.11 6,038,079
Utilities UT 0.37 1,060,414
Wholesale WH 0.58 1,675,740
------------------------
100.00% $286,819,165
========================
INTERNATIONAL GROWTH FUND
Audio/Video AV 0.56% $502,672
Automobile Related AM 3.93 3,524,026
Banking BK 9.79 8,773,887
Broadcasting BR 1.29 1,151,533
Building & Construction
Related BC 2.44 2,182,007
Business & Commercial Services BS 2.80 2,508,966
Chemicals CH 4.13 3,703,084
Computer Related CO 2.56 2,295,835
Control Instruments CI 0.66 594,915
Diversified Companies DV 9.28 8,315,734
Electrical Equipment EE 0.36 323,106
Electronics EL 3.22 2,883,106
Engineering EG 2.49 2,230,008
Finance Related FR 1.80 1,612,508
Food Products & Beverages FD 3.06 2,745,205
Gaming GA 0.60 539,439
Insurance IN 4.38 3,925,989
Investment Brokers IB 0.71 632,769
Investment Companies IC 2.40 2,152,378
<PAGE>
Machinery MY 1.00 892,317
Manufacturing MA 0.30 264,792
Medical Products MP 1.59 1,428,429
Medical Related - Drugs MD 5.01 4,488,305
Metals & Mining MM 3.57 3,197,400
Oil & Gas Related OG 2.58 2,313,402
Printing & Publishing PR 1.70 1,524,971
Real Estate Related RE 3.31 2,965,183
Recreation Related RR 0.53 470,882
Repurchase Agreement RA 3.42 3,061,000
Retail RT 4.68 4,188,969
Storage Facilities SF 0.42 378,232
Telecommunications TC 5.34 4,779,704
Textiles & Apparel
Manufacturers TA 1.72 1,545,388
Tobacco TO 0.22 198,000
Toys & Hobbies TH 0.43 384,210
Transportation TR 3.16 2,827,623
Utilities UT 4.56 4,086,939
------------------------
100.00% $89,592,913
========================
PACIFIC BASIN FUND
Automobile Related AM 1.10% $1,625,415
Banking BK 19.77 29,178,302
Building & Construction Related BC 0.87 1,282,394
Business & Commercial Services BS 1.04 1,531,243
Chemicals CH 3.21 4,745,187
Computer Related CO 2.24 3,313,529
Diversified Companies DV 14.00 20,665,173
Electrical Equipment EE 1.09 1,615,530
Electronics EL 5.91 8,728,962
Engineering EG 4.20 6,195,943
Finance Related FR 1.60 2,367,123
Food Products & Beverages FD 0.73 1,082,119
Hotels HL 0.91 1,337,713
Insurance IN 1.01 1,487,765
Investment Brokers IB 2.59 3,829,014
Machinery MY 2.11 3,115,885
Manufacturing MA 0.39 578,338
Medical Related - Drugs MD 1.24 1,828,736
Metals & Mining MM 3.67 5,411,559
Oil & Gas Related OG 1.91 2,825,569
Real Estate Related RE 14.06 20,746,667
Recreation Related RR 1.05 1,543,875
Retail RT 1.05 1,554,426
Storage Facilities SF 1.03 1,512,927
Telecommunications TC 4.05 5,972,538
Textiles & Apparel
Manufacturers TA 1.27 1,877,268
<PAGE>
Toys & Hobbies TH 1.07 1,577,285
Transportation TR 3.62 5,345,430
Utilities UT 3.21 4,734,163
------------------------
100.00% $147,610,078
========================
See Notes to Financial Statements
<PAGE>
INVESCO International Funds, Inc.
Statement of Assets and Liabilities
October 31, 1996
<TABLE>
<CAPTION>
International Pacific
European Growth Basin
Fund Fund Fund
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investment Securities:
At Cost~ $235,112,599 $79,803,330 $139,039,425
================================================
At Value~ 286,819,165 89,592,913 147,610,078
Cash 0 19,648 0
Foreign Currency
(Cost $0, $567,156 and
$0, respectively) 0 570,687 0
Receivables:
Investment Securities Sold 9,519,173 2,247,822 1,840,470
Fund Shares Sold 9,106,424 4,016,974 4,439,502
Dividends and Interest 407,672 267,510 725,740
Prepaid Expenses and
Other Assets 56,850 28,255 61,796
------------------------------------------------
TOTAL ASSETS 305,909,284 96,743,809 154,677,586
------------------------------------------------
LIABILITIES
Payables:
Custodian 1,402,251 0 4,407,734
Foreign Sub-Custodian
(Cost $0, $1,159,165 and
$0, respectively) 0 1,154,671 0
Distributions to
Shareholders 28,059 3,271 0
Investment Securities
Purchased 2,916,964 838,800 129,416
Fund Shares Repurchased 922,875 135,626 223,998
Depreciation on Forward
Foreign Currency Contracts 1,468 3,595 2,985
Accrued Expenses and Other
Payables 49,439 21,450 43,534
------------------------------------------------
TOTAL LIABILITIES 5,321,056 2,157,413 4,807,667
------------------------------------------------
Net Assets at Value 300,588,228 94,586,396 149,869,919
================================================
NET ASSETS
Paid-in Capital* 229,565,888 80,877,433 132,415,633
Accumulated Undistributed
Net Investment Income 113,293 131,783 39,834
Accumulated Undistributed
Net Realized Gain on
Investment Securities and
<PAGE>
Foreign Currency Transactions 19,194,448 3,783,899 8,840,121
Net Appreciation of Investment
Securities and Foreign
Currency Transactions 51,714,599 9,793,281 8,574,331
------------------------------------------------
Net Assets at Value 300,588,228 94,586,396 149,869,919
================================================
Shares Outstanding 18,969,832 5,594,587 10,619,681
Net Asset Value, Offering
and Redemption Price
per Share 15.85 16.91 14.11
================================================
</TABLE>
~ Investment securities at cost and value at October 31, 1996 include a
repurchase agreement of $3,061,000 for the International Growth Fund.
* The Fund has 500 million authorized shares of common stock, par value of $0.01
per share. Of such shares, 100 million have been allocated to each individual
Fund.
See Notes to Financial Statements
<PAGE>
INVESCO International Funds, Inc.
Statement of Operations
Year Ended October 31, 1996
<TABLE>
<CAPTION>
International Pacific
European Growth Basin
Fund Fund Fund
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME
Dividends $4,142,698 $1,847,954 $2,564,897
Interest 407,526 310,411 472,651
Foreign Taxes Withheld (563,385) (215,531) (248,194)
-----------------------------------------------
TOTAL INCOME 3,986,839 1,942,834 2,789,354
-----------------------------------------------
EXPENSES
Investment Advisory Fees 1,793,380 893,966 1,396,490
Transfer Agent Fees 839,761 383,054 870,770
Administrative Fees 45,868 23,409 37,930
Custodian Fees and Expenses 318,368 142,128 412,646
Directors' Fees and Expenses 19,592 11,999 16,992
Professional Fees and Expenses 32,345 26,395 29,910
Registration Fees and Expenses 57,999 51,149 79,211
Reports to Shareholders 96,092 57,731 96,479
Other Expenses 54,920 18,480 38,643
-----------------------------------------------
TOTAL EXPENSES 3,258,325 1,608,311 2,979,071
Fees and Expenses
Paid Indirectly (147,516) (52,556) (117,351)
-----------------------------------------------
NET EXPENSES 3,110,809 1,555,755 2,861,720
-----------------------------------------------
NET INVESTMENT INCOME
(LOSS) 876,030 387,079 (72,366)
-----------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENT SECURITIES
Net Realized Gain
(Loss) on:
Investment Securities and
Foreign Currency
Transactions 19,780,096 4,539,279 6,973,332
Forward Foreign Currency
Contracts 0 (40,982) 3,115,934
-----------------------------------------------
Total Net Realized Gain 19,780,096 4,498,297 10,089,266
-----------------------------------------------
Change in Net Appreciation
(Depreciation) of Investment
Securities and Foreign
Currency Transactions 29,753,509 5,988,409 (1,230,912)
-----------------------------------------------
<PAGE>
NET GAIN ON INVESTMENT
SECURITIES 49,533,605 10,486,706 8,858,354
-----------------------------------------------
Net Increase in Net
Assets from Operations $50,409,635 $10,873,785 $8,785,988
===============================================
</TABLE>
See Notes to Financial Statements
<PAGE>
INVESCO International Funds, Inc.
Statement of Changes in Net Assets
Year Ended October 31
<TABLE>
<CAPTION>
International Growth Pacific Basin
European Fund Fund Fund
--------------------------- -------------------------- ---------------------------
1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net Investment Income (Loss) $876,030 $3,053,200 $387,079 $391,520 $(72,366) $766,938
Net Realized Gain on
Investment Securities and
Foreign Currency
Transactions 19,780,096 20,628,193 4,498,297 2,758,199 10,089,266 1,741,520
Change in Net Appreciation
(Depreciation) of
Investment Securities
and Foreign Currency
Transactions 29,753,509 (4,510,681) 5,988,409 (9,940,632) (1,230,912) (30,092,655)
---------------------------- --------------------------- ----------------------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM
OPERATIONS 50,409,635 19,170,712 10,873,785 (6,790,913) 8,785,988 (27,584,197)
---------------------------- --------------------------- ----------------------------
DISTRIBUTIONS TO
SHAREHOLDERS
Net Investment Income (876,030) (3,301,697) (387,079) (439,663) 0 (673,006)
In Excess of Net
Investment Income (516,756) 0 (394,151) (146,866) (432,102) 0
Net Realized Gain on
Investment
Securities (18,669,435) 0 (2,897,940) (5,845,914) (2,389,197) (28,585,579)
---------------------------- ---------------------------- ----------------------------
TOTAL DISTRIBUTIONS (20,062,221) (3,301,697) (3,679,170) (6,432,443) (2,821,299) (29,258,585)
---------------------------- ---------------------------- ----------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales
of Shares 466,074,093 290,034,808 349,892,500 178,375,413 667,157,615 439,843,358
<PAGE>
Reinvestment of
Distributions 19,468,999 3,205,612 3,657,292 6,364,834 2,720,245 28,336,832
---------------------------- ---------------------------- ----------------------------
485,543,092 293,240,420 353,549,792 184,740,247 669,877,860 468,180,190
Amounts Paid for Repurchases
of Shares (439,501,864) (434,751,959) (341,548,549) (258,010,566) (680,346,294) (609,852,076)
---------------------------- ---------------------------- ----------------------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM FUND
SHARE TRANSACTIONS 46,041,228 (141,511,539) 12,001,243 (73,270,319) (10,468,434) (141,671,886)
---------------------------- ---------------------------- ----------------------------
Total Increase (Decrease)
in Net Assets 76,388,642 (125,642,524) 19,195,858 (86,493,675) (4,503,745) (198,514,668)
NET ASSETS
Beginning of Period 224,199,586 349,842,110 75,390,538 161,884,213 154,373,664 352,888,332
---------------------------- ---------------------------- ----------------------------
End of Period $300,588,228 $224,199,586 $94,586,396 $75,390,538 $149,869,919 $154,373,664
============================ ============================ ============================
Accumulated Undistributed
Net Investment Income
Included in Net Assets
at End of Period $113,293 $507,201 $131,783 $396,296 $39,834 $426,568
FUND SHARE TRANSACTIONS
Shares Sold 31,746,297 21,836,397 21,434,516 11,482,388 45,840,305 31,754,627
Shares Issued from
Reinvestment of
Distributions 1,465,160 227,514 231,481 418,271 188,387 2,003,639
---------------------------- ---------------------------- ----------------------------
33,211,457 22,063,911 21,665,997 11,900,659 46,028,692 33,758,266
Shares Repurchased (30,152,989) (33,171,784) (20,850,135) (16,486,989) (46,568,736) (43,270,385)
---------------------------- ---------------------------- ----------------------------
Net Increase (Decrease)
in Fund Shares 3,058,468 (11,107,873) 815,862 (4,586,330) (540,044) (9,512,119)
</TABLE>
See Notes to Financial Statements
<PAGE>
INVESCO International Funds, Inc.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO International
Funds, Inc. (the "Fund"), was incorporated in Maryland and presently consists of
three separate Funds: European Fund, International Growth Fund and Pacific Basin
Fund. The investment objectives of the Funds are to seek capital appreciation
through investments in designated geographical sectors for European and Pacific
Basin Funds and to seek a high total return through investments in designated
geographical sectors for International Growth Fund. The Fund is registered under
the Investment Company Act of 1940 (the "Act") as a diversified, open-end
management investment company.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
A. SECURITY VALUATION - Equity securities traded on national securities
exchanges or in the over-the-counter market are valued at the last sales
price in the market where such securities are primarily traded. If last
sales prices are not available, securities are valued at the highest
closing bid price obtained from one or more dealers making a market for
such securities or by a pricing service approved by the Fund's board of
directors.
Foreign securities are valued at the closing price on the principal
stock exchange on which they are traded. In the event that closing prices
are not available for foreign securities, prices will be obtained from the
principal stock exchange at or prior to the close of the New York Stock
Exchange. Foreign currency exchange rates are determined daily prior to
the close of the New York Stock Exchange.
Debt securities are valued at evaluated bid prices as determined by a
pricing service approved by the Fund's board of directors. If evaluated
bid prices are not available, debt securities are valued by averaging the
bid prices obtained from one or more dealers making a market for such
securities.
If market quotations or pricing service valuations are not readily
available, securities are valued at fair value as determined in good faith
by the Fund's board of directors. Restricted securities are valued in
accordance with procedures established by the Fund's board of directors.
Short-term securities are stated at amortized cost (which approximates
market value) if maturity is 60 days or less at the time of purchase, or
market value if maturity is greater than 60 days.
Assets and liabilities initially expressed in terms of foreign
currencies are translated into U.S. dollars at the prevailing market rates
as quoted by one or more banks or dealers on the date of valuation. The
cost of securities is translated into U.S. dollars at the rates of
exchange prevailing when such securities are acquired. Income and expenses
are translated into U.S. dollars at rates of exchange prevailing when
accrued.
B. REPURCHASE AGREEMENTS - Repurchase agreements held by the Fund are fully
collateralized by U.S. Government securities and such collateral is in the
possession of the Fund's custodian. The collateral is evaluated daily to
<PAGE>
ensure its market value exceeds the current market value of the repurchase
agreements including accrued interest.
C. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security
transactions are accounted for on the trade date and dividend income is
recorded on the ex dividend date. Certain dividends from foreign
securities will be recorded as soon as the Fund is informed of the
dividend if such information is obtained subsequent to the ex dividend
date. Interest income, which may be comprised of stated coupon rate,
market discount and original issue discount, is recorded on the accrual
basis. Discounts on debt securities purchased are amortized over the life
of the respective security as adjustments to interest income. Cost is
determined on the specific identification basis.
The Fund may have elements of risk due to concentrated investments in
foreign issuers located in a specific country. Such concentrations may
subject the Fund to additional risks resulting from future political or
economic conditions and/or possible impositions of adverse foreign
governmental laws or currency exchange restrictions. Net realized and
unrealized gain or loss from investments includes fluctuations from
currency exchange rates and fluctuations in market value.
The Fund's use of short-term forward foreign currency contracts may
subject it to certain risks as a result of unanticipated movements in
foreign exchange rates. The Fund does not hold short-term forward foreign
currency contracts for trading purposes. The Fund may hold foreign
currency in anticipation of settling foreign security transactions and not
for investment purposes.
Restricted securities held by the Fund may not be sold except in
exempt transactions or in a public offering registered under the
Securities Act of 1933. The risk of investing in such securities is
generally greater than the risk of investing in the securities of widely
held, publicly traded companies. Lack of a secondary market and resale
restrictions may result in the inability of each Fund to sell a security
at a fair price and may substantially delay the sale of the security which
each Fund seeks to sell. In addition, these securities may exhibit greater
price volatility than securities for which secondary markets exist.
D. FEDERAL AND STATE TAXES - The Fund has complied and continues to comply
with the provisions of the Internal Revenue Code applicable to regulated
investment companies and, accordingly, has made or intends to make
sufficient distributions of net investment income and net realized capital
gains, if any, to relieve it from all federal and state income taxes and
federal excise taxes.
To the extent future capital gains are offset by capital loss
carryovers, such gains will not be distributed to shareholders.
Dividends paid by the Fund from net investment income and
distributions of net realized short-term capital gains are, for federal
income tax purposes, taxable as ordinary income to shareholders. Each Fund
has elected to treat a portion of distributions of both realized and
unrealized gains on forward foreign currency contracts as capital gain
distributions.
Investment income received from foreign sources may be subject to
foreign withholding taxes. Dividend and interest income is shown gross of
foreign withholding taxes in the accompanying financial statements.
E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions
to shareholders are recorded by the Fund on the ex dividend/distribution
<PAGE>
date. The Fund distributes net realized capital gains, if any, to its
shareholders at least annually, if not offset by capital loss carryovers.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments for foreign currency transactions, nontaxable
dividends, net operating losses and expired capital loss carryforwards.
For the year ended October 31, 1996, the effects of such differences
were as follows:
Accumulated
Accumulated Undistributed
Undistributed Net Realized
Net Gain on
Investment Investment
Fund Income Securities
- --------------------------------------------------------------------------------
European Fund $122,848 $(122,848)
International Growth Fund 129,638 (129,638)
Pacific Basin Fund 117,734 (117,734)
Net investment income, net realized gains and net assets were not affected.
F. FORWARD FOREIGN CURRENCY CONTRACTS - The Fund enters into short-term
forward foreign currency contracts in connection with planned purchases or
sales of securities as a hedge against fluctuations in foreign exchange
rates pending the settlement of transactions in foreign securities. A
forward foreign currency contract is an agreement between contracting
parties to exchange an amount of currency at some future time at an agreed
upon rate. These contracts are marked-to-market daily and the related
appreciation or depeciation of the contracts is presented in the Statement
of Assets and Liabilities.
G. EXPENSES - Each of the Funds bears expenses incurred specifically on its
behalf and, in addition, each Fund bears a portion of general expenses,
based on the relative net assets of each Fund.
Under an agreement between each Fund and the Fund's Custodian, agreed
upon Custodian Fees and Expenses are reduced by credits granted by the
Custodian from any temporarily uninvested cash. Similarly, Transfer Agent
Fees are reduced by credits earned by each Fund from security brokerage
transactions under certain broker/service arrangements with third parties.
Such credits are included in Fees and Expenses Paid Indirectly in the
Statement of Operations.
For the year ended October 31, 1996, Fees and Expenses Paid Indirectly
consisted of the following:
Custodian Fees Transfer
Fund and Expenses Agent Fees
- --------------------------------------------------------------------------------
European Fund $147,230 $286
International Growth Fund 52,534 22
Pacific Basin Fund 116,841 510
NOTE 2 - INVESTMENT ADVISORY AND OTHER AGREEMENTS. INVESCO Funds Group, Inc.
("IFG") serves as the Fund's investment adviser. As compensation for its
services to the Fund, IFG receives an investment advisory fee which is accrued
<PAGE>
daily at the applicable rate and paid monthly. The fee for European and
Pacific Basin Funds is based on the annual rate of 0.75% on the first $350
million of average net assets; reduced to 0.65% on the next $350 million of
average net assets; and 0.55% on average net assets in excess of $700 million.
International Growth Fund's fees are based on the annual rate of 1.00% on the
first $500 million of average net assets; reduced to 0.75% on the next $500
million of average net assets; and 0.65% on average net assets in excess of $1
billion.
In accordance with a Sub-Advisory Agreement between IFG and INVESCO Asset
Management Limited ("IAM"), an affiliate of IFG, investment decisions of the
Fund are made by IAM. Prior to February 2, 1996, a separate Sub-Advisory
Agreement between IFG and INVESCO International Limited ("IIL"), an affiliate of
IFG, provided that investment decisions for International Growth Fund were made
by IIL. Terms of the new Sub-Advisory Agreement are similar to the previous
Sub-Advisory Agreement between IFG and IIL. Fees for such sub- advisory services
are paid by IFG.
In accordance with an Administrative Agreement, each Fund pays IFG an
annual fee of $10,000, plus an additional amount computed at an annual rate of
0.015% of average net assets to provide administrative, accounting and clerical
services. The fee is accrued daily and paid monthly.
IFG received a transfer agent fee at an annual rate of $14.00 per
shareholder account, or per participant in an omnibus account through April 30,
1996. IFG may pay such fee for participants in omnibus accounts to affiliates or
third parties. The fee is paid monthly at one-twelfth of the annual fee and is
based upon the actual number of accounts in existence during each month. As of
May 1, 1996, the transfer agent fee became $20.00 per shareholder account or,
where applicable, per participant in an omnibus account, per year, computed in a
manner similar to the previous fee.
NOTE 3 -- PURCHASES AND SALES OF INVESTMENT SECURITIES. For the year ended
October 31, 1996, the aggregate cost of purchases and proceeds from sales of
investment securities (excluding all U.S. Government securities and short-term
securities) were as follows:
Fund Purchases Sales
- --------------------------------------------------------------------------------
European Fund $219,224,041 $209,280,607
International Growth Fund 57,337,198 53,094,266
Pacific Basin Fund 123,585,688 139,208,636
There were no purchases or sales of U.S. Government securities.
NOTE 4 -- APPRECIATION AND DEPRECIATION. At October 31, 1996, the gross
appreciation of securities in which there was an excess of value over tax cost,
the gross depreciation of securities in which there was an excess of tax cost
over value and the resulting net appreciation by Fund were as follows:
Gross Gross Net
Fund Appreciation Depreciation Appreciation
- --------------------------------------------------------------------------------
European Fund $59,956,973 $9,458,613 $50,498,360
International Growth Fund 14,021,619 4,618,000 9,403,619
Pacific Basin Fund 18,683,020 10,218,405 8,464,615
<PAGE>
NOTE 5 - TRANSACTIONS WITH AFFILIATES. Certain of the Fund's officers and
directors are also officers and directors of IFG, IAM or IIL.
The Fund has adopted an unfunded deferred compensation plan covering all
independent directors of the Fund who will have served as an independent
director for at least five years at the time of retirement. Benefits under this
plan were based on an annual rate equal to 25% of the retainer fee at the time
of retirement. As of July 1, 1996, benefits are based on an annual rate of 40%
of the retainer fee at the time of retirement.
Pension expenses for the year ended October 31, 1996, included in Directors'
Fees and Expenses in the Statement of Operations, and unfunded accrued pension
costs and pension liability included in Prepaid Expenses and Accrued Expenses,
respectively, in the Statement of Assets and Liabilities were as follows:
Unfunded
Pension Accrued Pension
Fund Expenses Pension Costs Liability
- --------------------------------------------------------------------------------
European Fund $2,579 $10,073 $20,759
International Growth Fund 866 4,856 9,444
Pacific Basin Fund 1,812 10,998 21,166
NOTE 6 - LINE OF CREDIT. The Fund has available a Redemption Line of Credit
Facility ("LOC"), from a consortium of national banks, to be used for temporary
or emergency purposes to fund redemptions of investor shares. The LOC permits
borrowings to a maximum of 10% of the Net Assets at Value of each respective
Fund. Each Fund agrees to pay annual fees and interest on the unpaid principal
balance based on prevailing market rates as defined in the agreement. For the
year ended October 31, 1996, there were no such borrowings.
<PAGE>
INVESCO International Funds, Inc.
Financial Highlights
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Year Ended October 31
---------------------------------------------------------------------
1996 1995 1994 1993 1992
European Fund
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $14.09 $12.95 $12.20 $10.14 $11.14
---------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.05 0.23 0.16 0.14 0.20
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 3.00 1.12 0.75 2.06 (1.00)
---------------------------------------------------------------------
Total from Investment Operations 3.05 1.35 0.91 2.20 (0.80)
---------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.08 0.21 0.16 0.14 0.20
Distributions from Capital Gains 1.21 0.00 0.00 0.00 0.00
---------------------------------------------------------------------
Total Distributions 1.29 0.21 0.16 0.14 0.20
---------------------------------------------------------------------
Net Asset Value - End of Period $15.85 $14.09 $12.95 $12.20 $10.14
=====================================================================
TOTAL RETURN 23.47% 10.42% 7.43% 21.78% (7.22%)
RATIOS
Net Assets - End of Period
($000 Omitted) $300,588 $224,200 $349,842 $270,544 $117,276
Ratio of Expenses to Average
Net Assets 1.36%@ 1.40%@ 1.20% 1.28% 1.29%
Ratio of Net Investment Income
to Average Net Assets 0.37% 1.26% 1.28% 1.76% 2.23%
Portfolio Turnover Rate 91% 96% 70% 44% 87%
Average Commission Rate Paid^^ $0.0367 - - - -
<PAGE>
Pacific Basin Fund
PER SHARE DATA
Net Asset Value - Beginning of Period $13.83 $17.07 $15.11 $11.02 $13.19
---------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.02) 0.06 0.04 0.04 0.07
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 0.51 (1.45) 2.28 4.09 (2.18)
---------------------------------------------------------------------
Total from Investment Operations 0.49 (1.39) 2.32 4.13 (2.11)
---------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.03 0.06 0.04 0.04 0.06
Distributions from Capital Gains 0.18 1.79 0.32 0.00 0.00
---------------------------------------------------------------------
Total Distributions 0.21 1.85 0.36 0.04 0.06
---------------------------------------------------------------------
Net Asset Value - End of Period $14.11 $13.83 $17.07 $15.11 $11.02
=====================================================================
TOTAL RETURN 3.55% (8.31%) 15.63% 37.51% (16.03%)
RATIOS
Net Assets - End of Period
($000 Omitted) $149,870 $154,374 $352,888 $299,192 $26,488
Ratio of Expenses to Average
Net Assets 1.60%@ 1.52%@ 1.24% 1.22% 1.78%
Ratio of Net Investment Income (Loss)
to Average Net Assets (0.04%) 0.37% 0.28% 0.63% 0.66%
Portfolio Turnover Rate 70% 56% 70% 30% 123%
Average Commission Rate Paid^^ $0.0148 - - - -
</TABLE>
< The per share information for 1993 was computed based on weighted average
shares.
@ Ratio is based on Total Expenses of the Fund, which is before any expense
offset arrangements.
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the total
number of related shares purchased or sold which is required to be disclosed for
fiscal years beginning September 1, 1995 and thereafter.
<PAGE>
INVESCO International Funds, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Period Ended Year Ended
Year Ended October 31 October 31 December 31
-------------------------------------- ------------ -------------------------
1996 1995 1994< 1993^< 1992 1991
<S> <C> <C> <C> <C> <C> <C>
International Growth Fund
PER SHARE DATA
Net Asset Value -
Beginning of Period $15.78 $17.29 $15.75 $12.57 $14.51 $13.69
-------------------------------------- ------------ -------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.07 0.08 0.04 0.08 0.12 0.17
Net Gains or (Losses) on
Securities (Both Realized
and Unrealized) 1.77 (0.61) 1.57 3.16 (1.94) 0.82
-------------------------------------- ------------ -------------------------
Total from Investment
Operations 1.84 (0.53) 1.61 3.24 (1.82) 0.99
-------------------------------------- ------------ -------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.15 0.09 0.07 0.06 0.11 0.17
In Excess of Net
Investment Income 0.00 0.03 0.00 0.00 0.00 0.00
Distributions from Capital
Gains 0.56 0.86 0.00 0.00 0.01 0.00
-------------------------------------- ------------ -------------------------
Total Distributions 0.71 0.98 0.07 0.06 0.12 0.17
-------------------------------------- ------------ -------------------------
Net Asset Value -
End of Period $16.91 $15.78 $17.29 $15.75 $12.57 $14.51
====================================== ============ =========================
TOTAL RETURN 12.01% (2.84%) 10.21% 29.08%* (12.52%) 7.19%
<PAGE>
RATIOS
Net Assets - End of Period
($000 Omitted) $94,586 $75,391 $161,884 $108,677 $35,192 $42,039
Ratio of Expenses to
Average Net Assets 1.80%@ 1.81%@ 1.50% 1.43%~ 1.36% 1.48%
Ratio of Net Investment Income
to Average Net Assets 0.43% 0.41% 0.46% 0.94%~ 0.83% 1.17%
Portfolio Turnover Rate 64% 62% 87% 46%* 50% 71%
Average Commission Rate Paid^^ $0.0329 - - - - -
</TABLE>
^ From January 1, 1993 to October 31, 1993, the Fund's current fiscal year-end.
< The per share information was computed based on weighted average shares.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
@ Ratio is based on Total Expenses of the Fund, which is before any expense
offset arrangements.
~ Annualized
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the total
number of related shares purchased or sold which is required to be disclosed for
fiscal years beginning September 1, 1995 and thereafter.
---------------------------------------------------
OTHER INFORMATION
UNAUDITED
On February 2, 1996, a special meeting of the International Growth Fund was held
at which approval of a new sub-advisory agreement between the Fund's investment
advisor and INVESCO Asset Management Limited (Proposal 1) and an increase in the
Fund's limit on investing in companies located in developing countries (Proposal
2) were ratified. The following is a report of the votes cast:
Proposal For Against Abstain Total
- --------------------------------------------------------------------------------
Proposal 1 2,902,663 38,425 79,275 3,020,363
Proposal 2 2,404,996 69,304 57,341 3,020,363
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholders of
INVESCO International Funds, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the statement of investment securities, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the European Fund, International
Growth Fund, and Pacific Basin Fund (constituting INVESCO International Funds,
Inc., hereafter referred to as the "Fund") at October 31, 1996, the results of
each of their operations for the year then ended, the changes in each of their
net assets for each of the two years in the period then ended and the financial
highlights for each of the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 1996 by
correspondence with the custodian and the application of alternative auditing
procedures for unsettled security transactions, provide a reasonable basis for
the opinion expressed above.
/s/ Price Waterhouse LLP
- ------------------------
Price Waterhouse LLP
Denver, Colorado
December 6, 1996
