Fidelity European Values PLC

Fidelity European Values PLC Interim Report For the 6 months ended 30 June 2005 Managed by

Contents The Investment Objective & Performance Summary 1 Summary of Results 2 Interim Report 3 Top 20 Holdings 5 Financial Statements 6 Investor Information 14 Directory 15

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 2005 5 November 1991 Net asset value per share +13.5% +894.0% Share price +16.2% +853.0% FTSE World Europe (ex UK) Index +5.9% +278.9% Standardised performance on a total return basis 30/06/00 30/06/01 30/06/02 30/06/03 30/06/04 to to to to to 30/06/01 30/06/02 30/06/03 30/06/04 30/06/05 Net asset value per share -6.8% +2.4% -1.8% +25.7% +33.9% Share price +9.5% +0.7% -13.6% +30.2% +41.7% (Past performance is not a guide to future returns.) Fidelity European Values PLC Interim Report 2005 Page 1

Summary of Results 30 June 31 December 1 2005 2004 % change Assets Total assets employed 2 667.9m 576.2m +15.9% Shareholders funds 580.5m 512.7m +13.2% Borrowings as % of shareholders funds 15.1% 12.4% Net asset value per share (NAV) 922.89p 815.04p +13.2% Stockmarket Data FTSE World Europe (ex UK) Index 289.73 279.12 +3.8% Share price period end 888.50p 766.50p +15.9% high 888.50p 786.50p low 765.00p 589.00p Discount (+ premium) period end 3.7% 6.0% high 7.5% 10.3% low +0.2% +1.2% Returns for the six months to 30 June 2005 2004 2004 Capital return per ordinary share 99.46p 36.49p Capital + revenue return per ordinary share 109.60p 42.97p Total Return 3 for the six months to 30 June 2005 2004 FTSE World Europe (ex UK) Index +5.9% +1.3% Total NAV return per share +13.5% +6.6% Share price +16.2% +7.0% 1 Restated (see notes) 2 Total assets less liabilities excluding loan liability. An additional loan of 40m was drawn down in the period. 3 Includes reinvested income (Past performance is not a guide to future returns.) Page 2 Fidelity European Values PLC Interim Report 2005

Interim Report PERFORMANCE During the first six months of the year, the net asset value of the portfolio rose by 13.5% to 922.89p per share, compared with a return of 5.9% for the FTSE World Europe (ex UK) Index, in sterling terms on a total return basis. MARKET REVIEW The performance of European equities during the first six months of 2005 was influenced by a combination of concerns over the strength of the economic recovery and US economic news. The French and Dutch No votes to the European Constitution referendum had little impact on European equity markets. However, the votes weighed on the euro, which weakened relative to the US dollar, the currency falling from $1.36 to $1.21 during the six months. In terms of the economy, European economic growth accelerated in the first three months of 2005 to 0.5% quarter-onquarter. Despite this reasonable first-quarter growth, the underlying components of GDP suggest that growth in Europe, particularly consumer expenditure, remains slow. PORTFOLIO MANAGER REPORT Over the six-month period, performance was helped by successful stock selection and sector allocation. In particular, stock selection within the oil & gas sector proved rewarding, with a particularly strong contribution from the refiningrelated companies; OMV, Magyar Olaj-es Gazipari Rt, ERG and Polski Koncern Naftowy. Other large holdings which performed well included European Aeronautic Defence & Space (aerospace), SAP (German software) and Verbund (Austrian utility). TOTAL RETURN PERFORMANCE FOR THE 6 MONTHS TO 30 JUNE 2005 120 115 110 % +5.9% 105 100 95 90 85 ' 31 Dec 04 ' 31 Jan 05 NAV ' 28 Feb 05 ' 31 Mar 05 Share price ' 30 Apr 05 ' 31 May 05 (Past performance is not a guide to future returns.) The general structure of the portfolio remained unchanged, with a bias to medium-sized and smaller companies combined with the manager s approach of searching for undervalued companies. However, the manager increased the weighting in larger-sized companies as their valuations are attractive. The country weightings have become much more balanced between peripheral and core countries. At sector level, the weighting in telecommunication stocks, which peaked in March 2003, was substantially reduced. The manager believes that a number of growth-oriented sectors have attractive valuations and consequently the portfolio s exposure to pharmaceutical and software stocks was increased. +16.2% +13.5% ' 30 Jun 05 FTSE World Europe (ex UK) Index Fidelity European Values PLC Interim Report 2005 Page 3

Interim Report OUTLOOK After a period of relatively stable economic outlook, the European Commission has recently reduced its economic growth forecast for 2005, from 2.0% down to 1.6%. In particular, the economies of Italy, Germany, France and Portugal have weakened, while Ireland and Spain are improving. The euro has fallen relative to the dollar since the start of 2005. The weakening of the single currency is a positive trend for exporters and dollar-correlated technology stocks. However, it is not clear whether this trend change will be durable. The European Central Bank ('ECB') policy has been for an unchanged 2% interest rate over the last two years and the most recent data appears to increase the chances of rate reductions, although policy statements of the ECB have not supported this view. GEARING On 20 June 2005 the Company entered into a facility with Lloyds TSB Bank plc. The loan was for an amount of 40m at a fixed rate of 3.23% for a period of five years. The loan was drawn down in full on 22 June 2005 and will be repayable on 22 June 2010. The proceeds of the loan are being invested in a manner consistent with the Company s investment objective. Loans held by the Company now total 130m. The Company s level of net gearing is now 14% and the Board will ensure that in normal circumstances net gearing is below 20%. By order of the Board Fidelity Investments International 22 July 2005 Political instability and terrorism continues to weigh on investor sentiment, however stock markets have so far shown resilience and we continue to believe that stock selection based on in depth company analysis will be the key factor in achieving good performance. Page 4 Fidelity European Values PLC Interim Report 2005

Top 20 Holdings as at 30 June 2005 Market Value Holding 000 % Novartis Swiss manufacturer of pharmaceutical and nutrition products 25,876 3.9 SAP German software company 24,416 3.7 European Aeronautic Defence & Space Pan European manufacturer of aerospace and military equipment 19,137 2.9 Total French integrated oil company 18,570 2.8 Koninklijke Philips Electronics Dutch manufacturer of domestic and industrial electronics, multimedia, medical and communications systems 16,363 2.4 Sanofi-Aventis French pharmaceutical company 16,350 2.4 ING Groep Dutch provider of financial services 16,027 2.4 AstraZeneca Leading pharmaceutical company 14,467 2.2 Societe Generale de Paris French bank 13,636 2.0 BASF German chemical company 13,280 2.0 Roche Holdings Swiss developer and manufacturer of pharmaceutical and chemical products 12,973 1.9 BNP Paribas French bank 12,517 1.9 Eni Italian integrated oil company 12,381 1.8 Renault French designer and producer of passenger cars and light commercial vans 12,211 1.8 DNB Norwegian bank 11,497 1.7 ABB Swiss manufacturer of electrical equipment 11,334 1.7 Allied Irish Bank Irish Bank 11,274 1.7 AXA French insurance company 10,688 1.6 Gambro Swedish medical technology and healthcare company 10,644 1.6 E.ON German generator and distributor of electricity and gas 10,500 1.6 Top 20 holdings 294,141 44.0 Total assets less liabilities excluding loan liability Fidelity European Values PLC Interim Report 2005 Page 5

Statement of Total Return for the six months ended 30.06.05 unaudited revenue capital total notes 000 000 000 Gains on investments - 60,705 60,705 Costs of investment transactions - (672) (672) Income 3 13,980-13,980 Investment management fee (3,631) - (3,631) Other expenses (448) - (448) Exchange gains/(losses) 66 (280) (214) Exchange gains/(losses) on loans - 2,815 2,815 Net return before finance costs and taxation 9,967 62,568 72,535 Interest payable (1,617) - (1,617) Return on ordinary activities before taxation 8,350 62,568 70,918 Taxation on return on ordinary activities 4 (1,973) - (1,973) Return on ordinary activities after taxation for the period 6,377 62,568 68,945 Return per ordinary share 5 109.60p These financial statements have been prepared in accordance with the AITC Statement of Recommended Practice ('SORP') issued in January 2003 and the changes to the accounting policies as set out in Note 1. Page 6 Fidelity European Values PLC Interim Report 2005

for the year ended 31.12.04 for the six months ended 30.06.04 audited unaudited restated * restated * revenue capital total revenue capital total 000 000 000 000 000 000-106,079 106,079-20,901 20,901 - (1,286) (1,286) - (748) (748) 12,546-12,546 10,104-10,104 (5,882) - (5,882) (2,809) - (2,809) (902) - (902) (441) - (441) (22) (294) (316) (3) (348) (351) - (2) (2) - 3,150 3,150 5,740 104,497 110,237 6,851 22,955 29,806 (3,239) - (3,239) (1,570) - (1,570) 2,501 104,497 106,998 5,281 22,955 28,236 (1,254) (315) (1,569) (1,209) - (1,209) 1,247 104,182 105,429 4,072 22,955 27,027 167.60p 42.97p * See Note 9 Fidelity European Values PLC Interim Report 2005 Page 7

Balance Sheet 30.06.05 31.12.04 30.06.04 unaudited audited unaudited restated * notes 000 000 000 Fixed assets Investments 658,516 572,722 494,432 Current assets Debtors 8,545 1,690 5,951 Cash at bank 9,484 4,455 1,166 18,029 6,145 7,117 Creditors amounts falling due within one year Other creditors (8,646) (2,623) (6,859) Net current assets 9,383 3,522 258 Total assets less current liabilities 667,899 576,244 494,690 Creditors amounts falling due after more than one year Fixed rate unsecured loans 7 (87,370) (63,559) (60,407) Total net assets 580,529 512,685 434,283 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 362,438 305,447 292,588 Capital reserve - unrealised 133,362 127,785 59,414 Revenue reserve 10,289 5,013 7,841 Total equity shareholders funds 580,529 512,685 434,283 Net asset value per ordinary share 8 922.89p 815.04p 690.40p * See Note 9 Page 8 Fidelity European Values PLC Interim Report 2005

Cash Flow Statement 30.06.05 31.12.04 30.06.04 unaudited audited unaudited notes 000 000 000 Operating activities Investment income received 11,062 10,873 8,384 Interest received 70 72 38 Investment management fee paid (3,345) (5,601) (2,703) Directors fees paid (37) (52) (17) Other cash payments (864) (874) (349) Net cash inflow from operating activities 6,886 4,418 5,353 Returns on investments and servicing of finance Interest paid (807) (3,239) (1,579) Net cash outflow from returns on investments and servicing of finance (807) (3,239) (1,579) Taxation Overseas taxation recovered 140 399 189 Taxation recovered 140 399 189 Financial investment Purchase of investments (270,624) (382,807) (216,418) Disposal of investments 243,809 385,297 213,310 Net cash (outflow)/inflow from financial investment (26,815) 2,490 (3,108) Equity dividend paid (1,101) (944) (944) Net cash (outflow)/inflow before financing (21,697) 3,124 (89) Financing 3.23% fixed rate unsecured loan drawn down 7 26,625 - - Net cash inflow from financing 26,625 - - Increase/(decrease) in cash 4,928 3,124 (89) Fidelity European Values PLC Interim Report 2005 Page 9

Notes to the Accounts 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 accounts dated 31 December 2004 except as stated below: UK GAAP is converging with International Financial Reporting Standards ('IFRS') and the following Financial Reporting Standards ('FRS') have been introduced. FRS26: Financial Instruments: Measurement requires that quoted investments are valued at fair value which is deemed to be bid price. The Company s investments have accordingly been revalued to bid price but no adjustments have been made to the prior period s results as the Company has taken advantage of paragraph 108D of the Standard and disclosed the effect of valuing the investments at bid price as shown in Note 9 on page 12. FRS26 also requires that where investments are held at fair value through the profit and loss account the transaction costs should be recognised as a separate item from gains and losses on investments and prior period results have accordingly been restated as disclosed in the Statement of Total Return. FRS21: Events after the Balance Sheet Date states that dividends declared and approved by the Company after the balance sheet date should not be recognised as a liability of the Company at the balance sheet date. Prior year results have accordingly been restated and this is shown in Note 9 on page 12. 2. STATEMENT OF TOTAL RETURN The total column on this statement is the profit and loss account of the Company. 3. INCOME 30.06.05 31.12.04 30.06.04 unaudited audited unaudited 000 000 000 UK dividends 178 55 40 Overseas dividends 13,741 12,410 10,026 Deposit interest 61 81 38 13,980 12,546 10,104 4. TAXATION ON RETURN ON ORDINARY ACTIVITIES 30.06.05 31.12.04 30.06.04 unaudited audited unaudited revenue capital total revenue capital total revenue capital total '000 '000 '000 '000 '000 '000 '000 '000 '000 Overseas taxation suffered 1,973-1,973 1,566 3 1,569 1,209-1,209 Tax (credit)/charge for use of revenue expenses - - - (312) 312 - - - - 1,973-1,973 1,254 315 1,569 1,209-1,209 Page 10 Fidelity European Values PLC Interim Report 2005

Notes to the Accounts 5. RETURN PER ORDINARY SHARE 30.06.05 31.12.04 30.06.04 revenue capital total revenue capital total revenue capital total Return per ordinary share 10.14p 99.46p 109.60p 1.98p 165.62p 167.60p 6.48p 36.49p 42.97p Basic returns per ordinary share are based on the return on ordinary activities after taxation of 6,377,000 (31.12.04: 1,247,000; 30.06.04: 4,072,000) and the capital appreciation in the period of 62,568,000 (31.12.04: 104,182,000; 30.06.04: 22,955,000) and on 62,903,233 ordinary shares (31.12.04: 62,903,233; 30.06.04: 62,903,233), being the weighted average number of shares in issue during the period. 6. DIVIDEND No dividend has been declared in respect of the current period. The dividend shown on the revenue account for the six months ended 30.06.05 relates to the year ended 31.12.04 and prior year comparatives have been restated accordingly. In terms of paragraph 35 of FRS25, the dividend paid by the Company is no longer disclosed in the Statement of Total Return. 7. LOAN FACILITY The fixed rate loan from National Australia Bank of 40 million was drawn down in two tranches; 33 million on 24 December 2001 and 7 million 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 million 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 million 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. 8. NET ASSET VALUE PER ORDINARY SHARE The basic net asset value per ordinary share is based on net assets of 580,529,000 (31.12.04: 512,685,000; 30.06.04: 434,283,000) and on 62,903,233 ordinary shares (31.12.04: 62,903,233; 30.06.04: 62,903,233), being the number of ordinary shares in issue at the period end. Fidelity European Values PLC Interim Report 2005 Page 11

Notes to the Accounts 9. PRIOR YEAR ADJUSTMENTS AND RESTATEMENTS 30.06.05 31.12.04 Shareholders' Shareholders' funds funds '000 '000 Opening balance as previously stated 511,584 407,256 Effect of prior year adjustment as a result of a change in accounting policy regarding the treatment of proposed dividends 1,101 944 Opening balance as restated 512,685 408,200 Effect of changing prices at 1 January 2005 (1,077) - Other recognised gains for the period 63,645 104,182 Revenue after taxation 6,377 1,247 Dividend (1,101) (944) 580,529 512,685 The capital net return before finance costs and taxation for the period ended 30 June 2004 has been restated from 19,802,000 to 22,952,000. This restatement has been necessary as exchange gains/(losses) have been included as part of the net return before finance costs at 31 December 2004 and subsequently rather than as a finance cost. This restatement has no impact on the Company's return on ordinary activities for the period ended 30 June 2004. 10. STATEMENT OF CHANGES IN EQUITY For the six months ended 30 June 2005 Share Capital Capital Capital Share premium redemption reserve reserve Revenue capital account reserve realised unrealised reserve '000 '000 '000 '000 '000 '000 At 1 January 2004: as previously stated 15,725 58,615 100 245,461 83,589 3,766 Effect of prior year adjustment as a result of a change in the accounting policy regarding the treatment of proposed dividends - - - - - 944 At 1 January 2004: as restated 15,725 58,615 100 245,461 83,589 4,710 Net recognised gains for the year - - - 59,986 44,196 1,247 Dividend to shareholders - - - - - (944) At 31 December 2004: as restated 15,725 58,615 100 305,447 127,785 5,013 Net recognised gains for the period - - - 56,991 5,577 6,377 Dividend to shareholders - - - - - (1,101) At 30 June 2005 15,725 58,615 100 362,438 133,362 10,289 Page 12 Fidelity European Values PLC Interim Report 2005

Notes to the Accounts 11. The results for the six months to 30 June 2005 and 30 June 2004, 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 2004 are extracted from the latest published accounts and have been restated as disclosed in Note 9. These accounts, on which the auditors gave an unqualified report, have been delivered to the Registrar of Companies. Fidelity European Values PLC Interim Report 2005 Page 13

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 328 5680 www.fidelity.co.uk 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 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 FINANCIAL CALENDAR 30 June 2005 interim period end 25 July 2005 announcement of interim results to 30 June 8 August 2005 publication of interim report 31 December 2005 financial year end March 2006 publication of annual report May 2006 Annual General Meeting The Fidelity Individual Savings Account ('ISA') is offered and managed by Financial Administration Services Limited and the Fidelity Investment Trust Share Plan is managed by Fidelity Investments International. Both companies are authorised and regulated by the Financial Services Authority. The value of savings and eligibility to invest in an ISA will depend on individual circumstances and all tax rules may change in the future. 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 an Independent Financial Adviser. Issued by Fidelity Investments International. Page 14 Fidelity European Values PLC Interim Report 2005

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 Close Brothers Securities (a division of Winterflood Securities Limited) 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 Fidelity European Values PLC Interim Report 2005 Page 15

Fidelity European Values PLC Beech Gate Millfield Lane Lower Kingswood Tadworth Surrey KT20 6RP CB23403 Page 16 Fidelity European Values PLC Interim Report 2005