Fidelity European Values PLC

Fidelity European Values PLC Interim Report For the 6 months ended 30 June 2006 Managed by

Contents Investment Objective & Performance Summary 1 Summary of Results 2 Interim Report 3 Top 20 Holdings 5 Financial Statements 6 Investor Information 15 Directory 16

Investment Objective The investment objective of the Company is to achieve long-term capital growth from the stockmarkets of continental Europe. Performance total return (includes reinvested income) 6 months to From launch 30 June 2006 5 November 1991 Net asset value per share +5.5% +1,146.3% Share price -3.2% +1,060.9% FTSE World Europe (ex UK) Index +5.9% +368.5% Standardised performance on a total return basis 30/06/01 30/06/02 30/06/03 30/06/04 30/06/05 to to to to to 30/06/02 30/06/03 30/06/04 30/06/05 30/06/06 Net asset value per share +2.4% -1.8% +25.7% +33.9% +25.4% Share price +0.7% -13.6% +30.2% +41.7% +21.8% (Sources: Fidelity and Datastream.) (Past performance is not a guide to future returns. The value of your investment can go down as well as up.) Fidelity European Values PLC Interim Report 2006 Page 1

Summary of Results 30 June 31 December % 2006 2005 change Assets Total assets employed 1 839.6m 802.0m +4.7 Shareholders funds 725.3m 688.6m +5.3 Borrowings as % of shareholders funds 15.8% 16.5% Net asset value per share (NAV) 1,152.99p 1,094.71p +5.3 Stockmarket Data FTSE World Europe (ex UK) Index 349.72 336.53 +3.9 Share price 2 period end 1,080.00p 1,118.00p -3.4 high 1,232.00p 1,118.00p low 952.00p 765.00p Discount/(premium) 2 period end 6.3% (2.1%) high (5.1%) (2.4%) low 11.3% 7.5% Returns for the six months to 30 June 2006 2005 Capital return per ordinary share 48.11p 99.46p Capital + revenue return per ordinary share 60.78p 109.60p Total Returns 3 for the six months to 30 June 2006 2005 NAV per share +5.5% +13.5% Share price -3.2% +16.2% FTSE World Europe (ex UK) Index +5.9% +5.9% 1 Total assets less liabilities, excluding loan liabilities. 2 The high and low figures relate to the six month period to 30 June 2006 and the year to 31 December 2005. 3 Includes reinvested income. (Sources: Fidelity and Datastream.) (Past performance is not a guide to future returns. The value of your investment can go down as well as up.) Page 2 Fidelity European Values PLC Interim Report 2006

Interim Report PERFORMANCE In sterling terms and on a total return basis, the net asset value rose during the first six months of the year by 5.5% to 1,152.99p per share compared with a return of 5.9% for the FTSE World Europe (ex UK) Index. At the beginning of the period the shares unusually stood at a premium to net asset value but the discount rose to 6.3% at the end of the period. As a result the share price total return was -3.2%. This widening of the discount recognises the more volatile markets. MARKET REVIEW Following a very strong start to 2006 European equity markets experienced a correction in May and June. This was triggered by the release of higher than expected core inflation figures in the US. In addition, fears over further increases in interest rates in the US and elsewhere, together with concerns over the continued high oil price, worried markets across the globe. Notably, European inflation jumped to 2.5% in May and, therefore, above the 2% target level set by the European Central Bank (ECB). This led the ECB to raise its benchmark interest rate in June by a quarter of a percentage point to 2.75%, the second increase in four months. Economic growth accelerated in the eurozone to 0.6% in the first quarter of 2006 compared with 0.3% in the final three months of 2005. Business and consumer confidence continued to improve while the unemployment rate fell in the region. TOTAL RETURN PERFORMANCE FOR THE 6 MONTHS TO 30 JUNE 2006 % 120 115 110 105 100 95 90 85 31 Dec 05 31 Jan 06 NAV Share price 28 Feb 06 31 Mar 06 FTSE World Europe (ex UK) Index 30 Apr 06 (Sources: Fidelity and Datastream.) (Past performance is not a guide to future returns.) PORTFOLIO MANAGER REPORT Over the six-month period stock selection within the industrial engineering and construction sectors proved rewarding. A positive pricing environment and robust demand for products boosted engineering companies, while the construction sector has benefited from corporate activity. However, exposure to pharmaceuticals proved detrimental as other riskier areas of the market performed better. Specific holdings in the aerospace & defence sector also hurt returns, notably EADS, the parent company of Airbus. However, the holding was reduced prior to the recent profit warning. In addition, oil & gas producers hurt returns. Notably, OMV, an Austrian oil refining company, saw its share price fall during the latter part of the review period following a failed takeover bid. 31 May 06 +5.9 +5.5-3.2 30 Jun 06 Fidelity European Values PLC Interim Report 2006 Page 3

Interim Report In recent months, the manager added to holdings where the recent stock market pullback had corrected overstretched valuations and so provided opportunities to buy stocks where their valuations were reasonable. As a result the manager added to stocks in the oil services sector and cyclical stocks. Furthermore, exposure to financials, where the manager found attractive opportunities in the banking and insurance sectors, was increased. Overall the broad structural changes to the portfolio s exposure have been: a reduction in emerging Europe; increased core Europe; and increased large-cap, although the latter continues to be an underweight exposure. OUTLOOK The macroeconomic outlook for the European economy continues to show signs of improvement with falling unemployment and improving consumer confidence. Company earnings have been rising and merger and acquisition activity has been robust. Companies are continuing to restructure and cut costs and this is feeding through to healthy earnings. For a bottom-up stock picker the recent stock market correction is challenging as sentiment is driving the market rather than underlying earnings power. However, market corrections can also provide excellent buying opportunities in companies where share price movements have penalised very strong fundamentals. We continue to believe that stock selection, based on in-depth company analysis, will be crucial in outperforming the benchmark index. By order of the Board Fidelity Investments International 2 August 2006 Page 4 Fidelity European Values PLC Interim Report 2006

Top 20 Holdings as at 30 June 2006 Market Value Holding 000 % UBS Swiss bank 38,840 4.6 Allianz German insurance and financial services company 32,862 3.9 ING Groep Dutch provider of financial services 31,591 3.8 E.ON German generator and distributor of electricity and gas 30,487 3.6 Novartis Swiss manufacturer of pharmaceutical and nutrition products 29,702 3.5 Roche Holdings Swiss developer and manufacturer of pharmaceutical and chemical products 28,214 3.3 Société Générale de Paris French bank 25,169 3.0 AXA French insurance company 23,270 2.8 Sanofi-Aventis French pharmaceutical company 22,640 2.7 SAP German software company 21,161 2.5 BNP Paribas French bank 20,783 2.5 Unicredito Italiano Italian bank 20,079 2.4 Koninklijke DSM Dutch specialist chemical company 17,146 2.0 Bayer German pharmaceutical and chemical company 15,870 1.9 Schneider Electric French manufacturer of power distribution and automation systems 15,760 1.9 OMV Austrian integrated oil company 13,996 1.7 Hennes & Mauritz Swedish fashion retailer 13,570 1.6 Eni Italian integrated oil company 13,196 1.6 Credit Suisse Swiss bank 11,711 1.4 Alfa Laval Swedish engineering company 11,441 1.4 Top 20 holdings 437,488 52.1 % total assets less liabilities, excluding loan liabilities. Fidelity European Values PLC Interim Report 2006 Page 5

Income Statement for the six months ended 30.06.06 unaudited revenue capital total Notes 000 000 000 Gains on investments 31,714 31,714 Income 2 18,189 18,189 Investment management fee (4,843) (4,843) Other expenses (476) (476) Exchange gains/(losses) 17 (31) (14) Exchange (losses)/gains on loans (941) (941) Net return before finance costs and taxation 12,887 30,742 43,629 Interest payable (2,501) (2,501) Net return on ordinary activities before taxation 10,386 30,742 41,128 Taxation on return on ordinary activities 3 (2,414) (482) (2,896) Net return on ordinary activities after taxation for the period 7,972 30,260 38,232 Return per ordinary share 4 12.67p 48.11p 60.78p A Statement of Total Recognised Gains and Losses has not been prepared as there are no gains and losses other than those reported in this Income Statement. The total column of the Income Statement is the revenue account of the Company. These financial statements have been prepared in accordance with the AITC Statement of Recommended Practice (SORP) issued in January 2003 and revised in December 2005. Page 6 Fidelity European Values PLC Interim Report 2006

for the year ended 31.12.05 for the six months ended 30.06.05 audited unaudited revenue capital total revenue capital total 000 000 000 000 000 000 175,905 175,905 60,033 60,033 16,965 16,965 13,980 13,980 (8,252) (8,252) (3,631) (3,631) (920) (920) (448) (448) 54 (213) (159) 66 (280) (214) 702 702 2,815 2,815 7,847 176,394 184,241 9,967 62,568 72,535 (3,801) (3,801) (1,617) (1,617) 4,046 176,394 180,440 8,350 62,568 70,918 (2,274) (65) (2,339) (1,973) (1,973) 1,772 176,329 178,101 6,377 62,568 68,945 2.82p 280.32p 283.14p 10.14p 99.46p 109.60p Fidelity European Values PLC Interim Report 2006 Page 7

Reconciliation of Movement in Shareholders Funds called-up share share premium capital account Notes 000 000 Opening shareholders funds: 1 January 2005 15,725 58,615 Net recognised gains for the period Revenue after taxation Dividend paid 7 Closing shareholders funds: 30 June 2005 15,725 58,615 Opening shareholders funds: 1 January 2005 15,725 58,615 Net recognised gains for the year Revenue after taxation Dividend paid 7 Closing shareholders funds: 31 December 2005 15,725 58,615 Net recognised gains/(losses) for the period Revenue after taxation Dividend paid 7 Closing shareholders funds: 30 June 2006 15,725 58,615 Page 8 Fidelity European Values PLC Interim Report 2006

capital capital capital redemption reserve reserve revenue total reserve realised unrealised reserve equity 000 000 000 000 000 100 305,447 127,785 5,013 512,685 56,991 5,577 62,568 6,377 6,377 (1,101) (1,101) 100 362,438 133,362 10,289 580,529 100 305,447 127,785 5,013 512,685 119,303 55,949 175,252 1,772 1,772 (1,101) (1,101) 100 424,750 183,734 5,684 688,608 96,466 (66,206) 30,260 7,972 7,972 (1,573) (1,573) 100 521,216 117,528 12,083 725,267 Fidelity European Values PLC Interim Report 2006 Page 9

Balance Sheet 30.06.06 31.12.05 30.06.05 unaudited audited unaudited Notes 000 000 000 Fixed assets Investments held at fair value through profit or loss 833,960 800,634 658,516 Current assets Debtors 7,296 1,712 8,545 Cash at bank 6,118 3,259 9,484 13,414 4,971 18,029 Creditors amounts falling due within one year Fixed rate unsecured loans 8 (62,369) (61,855) Other creditors (7,764) (3,596) (8,646) (70,133) (65,451) (8,646) Net current (liabilities)/assets (56,719) (60,480) 9,383 Total assets less current liabilities 777,241 740,154 667,899 Creditors amounts falling due after more than one year Fixed rate unsecured loans 8 (51,974) (51,546) (87,370) Total net assets 725,267 688,608 580,529 Capital and reserves Called up share capital 15,725 15,725 15,725 Share premium account 58,615 58,615 58,615 Capital redemption reserve 100 100 100 Capital reserve realised 521,216 424,750 362,438 Capital reserve unrealised 117,528 183,734 133,362 Revenue reserve 12,083 5,684 10,289 Total equity shareholders funds 725,267 688,608 580,529 Net asset value per ordinary share 5 1,152.99p 1,094.71p 922.89p Page 10 Fidelity European Values PLC Interim Report 2006

Cash Flow Statement 30.06.06 31.12.05 30.06.05 unaudited audited unaudited 000 000 000 Operating activities Investment income received 14,561 13,882 11,062 Interest received 92 117 70 Investment management fee paid (4,779) (7,496) (3,345) Directors' fees paid (40) (75) (37) Other cash payments (365) (921) (864) Net cash inflow from operating activities 9,469 5,507 6,886 Returns on investments and servicing of finance Interest paid (2,514) (3,673) (807) Net cash outflow from returns on investments and servicing of finance (2,514) (3,673) (807) Taxation Overseas taxation recovered 185 874 140 Taxation recovered 185 874 140 Financial investment Purchase of investments (400,157) (557,685) (270,624) Disposal of investments 397,430 504,390 243,809 Net cash outflow from financial investments (2,727) (53,295) (26,815) Equity dividend paid (1,573) (1,101) (1,101) Net cash inflow/(outflow) before financing 2,840 (51,688) (21,697) Financing 3.23% fixed rate unsecured loan drawn down 26,625 26,625 3.54% fixed rate unsecured loan drawn down 23,919 Net cash inflow from financing 50,544 26,625 Increase/(decrease) in cash 2,840 (1,144) 4,928 Fidelity European Values PLC Interim Report 2006 Page 11

Notes to the Financial Statements 1. ACCOUNTING POLICIES The interim financial statements have been prepared on the basis of the accounting policies set out in the Company s annual report and financial statements dated 31 December 2005. 2. INCOME 30.06.06 31.12.05 30.06.05 unaudited audited unaudited 000 000 000 UK dividends 1 325 178 Overseas dividends 18,083 16,517 13,741 Deposit interest 105 123 61 18,189 16,965 13,980 3. TAXATION ON RETURN ON ORDINARY ACTIVITIES 30.06.06 31.12.05 30.06.05 unaudited audited unaudited revenue capital total revenue capital total revenue capital total 000 000 000 000 000 000 000 000 000 Overseas taxation suffered 3,404 282 3,686 3,066 26 3,092 2,559 2,559 Overseas taxation recovered (790) (790) (753) (753) (586) (586) Tax (credit)/charge for use of revenue expenses (200) 200 (39) 39 2,414 482 2,896 2,274 65 2,339 1,973 1,973 4. RETURN PER ORDINARY SHARE 30.06.06 31.12.05 30.06.05 revenue capital total revenue capital total revenue capital total Return per ordinary share 12.67p 48.11p 60.78p 2.82p 280.32p 283.14p 10.14p 99.46p 109.60p Basic returns per ordinary share are based on the return on ordinary activities after taxation of 7,972,000 (31.12.05: 1,772,000; 30.06.05: 6,377,000) and the capital return in the period of 30,260,000 (31.12.05: 176,329,000; 30.06.05: 62,568,000) and on 62,903,233 ordinary shares (31.12.05: 62,903,233; 30.06.05: 62,903,233), being the weighted average number of shares in issue during the period. Page 12 Fidelity European Values PLC Interim Report 2006

Notes to the Financial Statements 5. NET ASSET VALUE PER SHARE The basic net asset value per ordinary share is based on net assets of 725,267,000 (31.12.05: 688,608,000; 30.06.05: 580,529,000) and on 62,903,233 ordinary shares (31.12.05: 62,903,233; 30.06.05: 62,903,233), being the number of ordinary shares in issue at the period end. 6. COSTS OF INVESTMENT TRANSACTIONS 30.06.06 31.12.05 31.06.05 unaudited audited unaudited 000 000 000 Included in the gains on investments are the following costs of investment transactions: Purchases expenses 478 773 358 Sales expenses 461 686 314 939 1,459 672 7. DIVIDENDS No dividend has been declared in respect of the current period. The dividend shown on the Reconciliation of Movements in Shareholders Funds for the six months ended 30.06.06 relates to the year ended 31.12.05. 8. LOAN FACILITIES The fixed rate loan from National Australia Bank of?40,000,000 was drawn down in two tranches;?33,000,000 on 24 December 2001 and?7,000,000 on 28 December 2001, for a period of five years at an interest rate of 5.54% per annum. The loan is repayable on 29 December 2006. The fixed rate loan from The Royal Bank of Scotland plc of?50,000,000 was drawn down on 28 December 2001 for a period of five years at an interest rate of 4.96% per annum. The loan is repayable on 29 December 2006. The fixed rate loan from Lloyds TSB Bank plc of?40,000,000 was drawn down on 22 June 2005 for a period of five years at an interest rate of 3.23% per annum. The loan is repayable on 22 June 2010. The fixed rate loan from Lloyds TSB Bank plc of?35,000,000 was drawn down on 22 November 2005 for a period of three years at an interest rate of 3.54% per annum. The loan is repayable on 24 November 2008. Fidelity European Values PLC Interim Report 2006 Page 13

Notes to the Financial Statements 9. NON-STATUTORY FINANCIAL STATEMENTS The results for the six months to 30 June 2006 and 30 June 2005, which are unaudited, constitute non-statutory accounts within the meaning of s240 of the Companies Act 1985. The figures and financial information for the year ended 31 December 2005 are extracted from the latest published financial statements. These accounts, on which the auditors gave an unqualified report, have been delivered to the Registrar of Companies. Page 14 Fidelity European Values PLC Interim Report 2006

Investor Information CONTACT INFORMATION Private investors can call free on 0800 41 41 10 9am to 6pm, seven days a week. Financial advisers can call free on 0800 41 41 81 8am to 6pm, on any business day. Existing investors who have specific queries regarding their holding, for example a change of address, should contact the appropriate administrator: Holders of ordinary shares the Company s Registrars, Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU Telephone: 0870 162 3100 Details of individual shareholdings and other information can also be obtained from the Registrars website: www.capitaregistrars.com Fidelity Share Plan investors Fidelity Investment Trust Share Plan, Lloyds TSB Registrars, The Causeway, Worthing, West Sussex BN99 6DA Telephone: 0800 41 41 10 www.fidelity.co.uk/its Fidelity ISA/PEP investors Fidelity, using the freephone numbers given above, or by writing to: Financial Administration Services Limited, Oakhill House, 130 Tonbridge Road Hildenborough, Kent TN11 9DZ www.fidelity.co.uk/its General enquiries should be made to Fidelity Investments International, the Investment Manager and Secretary, at the Company s registered office: Fidelity Investments International, Beech Gate, Millfield Lane, Lower Kingswood Tadworth, Surrey KT20 6RP Telephone: 01732 361144 Fax: 01737 836892 www.fidelity.co.uk/its FINANCIAL CALENDAR 30 June 2006 interim period end 2 August 2006 announcement of interim results to 30 June 16 August 2006 publication of interim report 31 December 2006 financial year end March 2007 publication of annual report May 2007 Annual General Meeting Fidelity Investment Trusts are managed by Fidelity Investments International. Fidelity only provides information about its products and will not give investment advice based on individual circumstances. Should you wish to seek advice, please contact a Financial Adviser. The Fidelity Individual Savings Account (ISA) is managed by Financial Administration Services Limited and the Fidelity Investment Trust Share Plan is offered by Fidelity Investments International. Both companies are authorised and regulated by the Financial Services Authority. The Fidelity Investment Trust Share Plan is administered by Lloyds TSB Registrars and shares will be held in the name of Lloyds TSB Registrars Savings Nominees Limited. Issued by Fidelity Investments International authorised and regulated by the Financial Services Authority. Fidelity European Values PLC Interim Report 2006 Page 15

Directory BOARD OF DIRECTORS Robert Walther (Chairman) Johan Björkman Simon Duckworth Simon Fraser David Simpson (Audit Committee Chairman) MANAGER, SECRETARY AND REGISTERED OFFICE Fidelity Investments International Beech Gate, Millfield Lane Lower Kingswood Tadworth Surrey KT20 6RP FINANCIAL ADVISERS AND STOCKBROKERS Winterflood Investment Trusts The Atrium Building Cannon Bridge 25 Dowgate Hill London EC4R 2GA BANKERS AND CUSTODIAN JP Morgan Chase Bank (London Branch) 125 London Wall London EC2Y 5AJ REGISTRARS Capita Registrars The Registry 34 Beckenham Road Beckenham Kent BR3 4TU LAWYERS Slaughter and May One Bunhill Row London EC1Y 8YY INDEPENDENT AUDITORS PricewaterhouseCoopers LLP Chartered Accountants and Registered Auditors Southwark Towers 32 London Bridge Street London SE1 9SY CB27835/na Page 16 Fidelity European Values PLC Interim Report 2006