Interim Financial Report

FIDELITY CHINA SPECIAL SITUATIONS PLC Preliminary announcement of unaudited Interimresults for the six months ended 30 September 2012 Interim Financial Report For the 6 months ended 30 September 2012 Contents The Investment Objective and Performance Summary of Results Interim Financial Report Directors' Responsibility Statement Twenty Largest Holdings Financial Statements Directory Information for Investors Warning to Shareholders The Investment Objective and Performance The investment objective of the Company is to achieve long term capital growth from an actively managed portfolio made up primarily of securities issued by companies listed in China or Hong Kong and Chinese companies listed elsewhere. The Company may also invest in listed companies with significant interests in China and Hong Kong. Investment Performance Six months ended 30 September 2012 Net Asset Value ("NAV") per Share total return -6.2% Share Price total return -9.5% MSCI China Index total return -2.1% Sources: Fidelity and Datastream Past performance is not a guide to future returns Summary of Results 30 September 31 March 2012 2012 Assets Gross Asset Exposure1 £605.9m £628.5m Net Assets £516.3m £559.0m Bank loans and long Contracts For Difference ("CFDs") 26.1% 23.8% as % of Net Assets Gross Asset Exposure as % of Net Assets 117.4% 112.4% Net Asset Value per Share 78.73p 84.72p Number of Ordinary Shares in issue 655,729,480 659,754,480 Stock market data Share Price at period/year end 72.40p 80.80p Share Price period/year high 81.70p 114.00p Share Price period/year low 70.30p 70.00p Discount at period/year end 8.0% 4.6% (Premium) period/year high (1.4%) (8.8%) Discount period/year high 9.1% 8.8% Earnings/(loss) for the six months ended 30 September 2012 2011 Revenue return per Ordinary Share2 1.49p 1.20p Capital loss per Ordinary Share2 (6.78p) (31.30p) Total loss per Ordinary Share2 (5.29p) (30.10p) 1 Total portfolio exposure whether through direct or indirect investment (including through derivatives) 2 Based on the weighted average number of Ordinary Shares in issue during the reporting period Sources: Fidelity and Datastream Past performance is not a guide to future returns Interim Financial Report MANAGER'S REPORT The last six months to 30 September 2012 has been a further disappointing period for the Company. The net asset value is down 6.2%, underperforming the MSCI China Index benchmark, which is down 2.1%. The main cause continues to be the combination in a falling market of the Company's gearing and its high exposure to medium and smaller sized companies - the MCSI China Mid Cap Index being down 7.3% and the Small Cap Index being down 8.5%. The Shanghai Composite Index is also down 7.6% over the same period, underperforming most world markets. Encouragingly the markets and the Company have performed better in October. In my view the main cause for this poor stock market performance has been the economic slowdown in China; during the period most forecasts of GDP growth for 2012 have been cut. Although the Chinese authorities have been easing economic policy since the fourth quarter of 2011, the pace of easing has been quite slow. Data coming out of China over the summer has been mixed (even allowing for the unreliability of official figures). Some figures indicate that the economy is still slowing while others suggest it is stabilising. Looking at a broad cross section of data I believe that the economy is in the process of stabilising at a lower than consensus growth rate of around 7% and that the fourth quarter of this year will probably mark the low although growth from next year will depend on the shape of policies instigated by the new administration. GDP growth however in the future is likely to settle at a lower rate than in the past although the quality of that growth will be higher. The shift of the economy away from export and investment led growth towards domestic consumption continues apace and supports the investment policy of the Company emphasising companies exposed to domestic consumption or services. Despite their poor relative performance I still believe that the exposure to smaller private companies rather than the larger state owned enterprises will prove to be more rewarding in the longer term. Concerns about the political changes going on in China at the moment have also weighed on markets. The senior politicians change every 10 years and the process is an opaque one; most of the key decisions about who will be the new leaders occur behind closed doors. The 18th National Party Congress starts on 8 November 2012 where the members of the Politburo Standing Committee will be chosen. The Standing Committee members are the most senior politicians in China and include the president and premier. There are currently 9 members but the new committee may only have 7. The process is often not smooth and the events surrounding the sacking of Bo Xilai and Xi Jinping's "disappearance" for nearly two weeks are illustrations of this. The economy continues to face challenges especially the weakness of local government finances, increasing bad debts at the banks, the growth of wealth management, trust and unofficial lending products, the big slowdown in exports and the slowdown in investment. I remain of the view that although these challenges should not be underestimated, the central government has adequate resources to address them. Once the Standing Committee has been decided and other political appointees are confirmed in March next year, we should see new policies to address some of these issues, such as the weakness of local government finances and bad debts at the banks. A number of new infrastructure projects have been announced over the last six months (although headline figures can sometimes be misleading as the same project gets announced several times leading to double counting). Although fixed asset investment is on the increase again, the financing of these projects could be more challenging than in the past. Most commentators do not expect anything on the scale of the investment spending seen after the global financial crisis. The general view is that the scale of investment spending at that time, although solving short term problems, was responsible for several of the financial problems China is now experiencing. My investment strategy remains unchanged. Over the last six months probably the most significant change I have made to the portfolio is to increase the Company's exposure to companies in the internet space. As well as rebuilding the position in Tencent, adding a 2.1% position in Baidu and a smaller position in Sina, the Company recently purchased a 2.6% holding in the convertible shares of the unlisted Alibaba Group. The poor performance of Chinese shares and particularly those listed in the U.S. has led to the opportunity to buy some companies at what I believe will prove to be attractive valuations. Interestingly these companies with very strong business franchises have been selling well below the valuations of many China consumer staple companies; the staple companies have been some of the best performers and in many cases the valuations look expensive to me. The use of internet services in China is booming at the same time as internet penetration is increasing and companies like Tencent, Baidu and Alibaba are benefiting from this trend. Alibaba Group's subsidiaries, Taobao and TMall, account for over 75% of all e-commerce spending in China. Often the lack of a developed bricks and mortar retailing sector in lower tier cities is leading consumers to go straight to buying goods on the internet rather than on the high street. The Alibaba Group is well known to Fidelity as my private equity colleagues have followed it and invested in it for about 12 years. Valuations of Chinese securities remain low on an historic basis for the market as a whole and across a broad selection of sectors. Sentiment also remains very depressed, which I believe is positive for markets. For example, the proportion of trading on the Hong Kong stock exchange that is short related, earlier this summer reached a ten year high. In mid-October, I accompanied the Board on its third trip to China visiting Beijing, Shenzhen and Hong Kong. We visited fourteen companies held in the portfolio as well as meeting a number of strategists, economists, diplomats, businessmen and alternative research providers. The trip reinforced our view that many attractively valued investment opportunities situations currently exist in China. Additionally, there is the prospect of the new Government embarking on an exciting decade of deregulation as well as stimulating private enterprise. In a world where growth is likely to be in short supply, I remain of the view that those countries, such as China, where growth is largely based on domestic factors and which can grow at rates well above the global average will offer some of the best investment opportunities. Investors in the Company have needed more patience than I initially anticipated but I still believe this patience will be rewarded. Additionally, there is the prospect of the new Government embarking on an exciting decade of deregulation as well as stimulating private enterprise. Anthony Bolton Portfolio Manager 12 November 2012 DISCOUNT AND PREMIUM The Board believes it is in the best interests of shareholders if the share price of the Company tracks closely the underlying Net Asset Value, which is published each business day. The Board has the ability to issue shares at a premium to NAV and to buy shares back at a discount to NAV for cancellation. During the reporting period, in furtherance of this policy, the Board authorised the repurchase and cancellation at a discount of 4,025,000 Ordinary Shares. Since the period end, the Company has repurchased a further 500,000 Ordinary Shares for cancellation. GEARING On 17 February 2012, the Company entered into a revolving facility agreement with Scotiabank Europe PLC for US$150,000,000, which has been fully drawn down. The Company continues to use derivatives to achieve further gearing by the use of Contracts For Difference on a number of the holdings in the Company's portfolio, totalling a further £41,756,000 as at 30 September 2012. PRINCIPAL RISKS AND UNCERTAINTIES The Board believes that the principal risks and uncertainties faced by the Company fall into two broad categories. The first, external risks, being country risk, stock market risk, share price and discount risk and the second, internal risks, being portfolio and governance, operational, financial, compliance, administration etc. Information on each risk is detailed in full in the Prospectus of the Company and a risk matrix listing the specific top risks identified by the Board is contained in the Annual Report. Both the Prospectus and the Annual Report are available for inspection on the Company's pages of its website www.fidelity.co.uk/china. GOING CONCERN The Board receives regular reports from the Manager and the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements as outlined in the Annual Report for the year ended 31 March 2012. By order of the Board 9 November 2012 Directors' Responsibility Statement RESPONSIBILITY STATEMENT The Directors confirm to the best of their knowledge that: a) the condensed set of financial statements contained within the Interim Financial Report has been prepared in accordance with the International Accounting Standards 34: "Interim Financial Reporting"; b) the Interim Financial Reporting (constituting the interim management report) includes a fair review of the information required by Rule 4.2.7R of the FSA's Disclosure and Transparency Rules and their impact on the condensed set of financial statements and a description of the principal risks and uncertainties for the remaining six months of the financial year; and c) in accordance with Disclosure and Transparency Rule 4.2.8R there have been no related party transactions during the six month period to 30 September 2012 and therefore nothing to report on any material effect by such a transaction on the financial position or the performance of the Company during that period; and there have been no changes in this position since the last Annual Report that could have a material effect on the financial position or performance of the Company in the first six months of the current financial year. The Interim Financial Report has not been audited by the Company's Independent Auditor. The Interim Financial Report was approved by the Board on 9 November 2012 and the above responsibility statement was signed on its behalf by John Owen, Chairman. Twenty Largest Holdings at 30 September 2012 Twenty Largest Holdings, including derivatives Balance Gross %1 Sheet Asset Value Exposure £'000 £'000 Ping An Insurance (Group) Company of China 26,128 26,128 4.3 Insurance company Tencent Holdings Limited* 17,841 23,605 3.9 Provides internet, mobile and telecommunications value-added services China Unicom (Hong Kong) Limited* 13,967 22,029 3.6 Integrated telecommunications provider AIA Group* 12,846 19,741 3.3 Insurance company based in Hong Kong CITIC Securities Company Limited 19,459 19,459 3.2 Broker and asset manager Wing Hang Bank Limited 18,720 18,720 3.1 Provider of commercial banking and related financial services Bank of China Hong Kong* 10,539 17,387 2.9 A subsidiary of the Bank of China based in Hong Kong TVB 15,875 15,875 2.6 Hong Kong television broadcaster Alibaba Group2 15,497 15,497 2.6 Major e-commerce internet company SAIC Motor Corporation Limited 13,948 13,948 2.3 Automobile manufacture and distribution company HSBC Holdings plc (Hong Kong listed)* 10,791 13,433 2.2 Global banking and financial services company Asiainfo Linkage 13,321 13,321 2.2 Telecommunications software solutions provider WuXi Pharma Tech 13,187 13,187 2.2 Pharmaceutical, biotechnology, and medical device research company REXLot Holdings Limited 13,054 13,054 2.2 Supplies lottery related systems, machines and services for the Chinese lottery Baidu 12,950 12,950 2.1 Major search internet company Ports Design* 9,511 12,572 2.1 Designs, manufactures and retails ladies and mens fashion garments Lee & Man Paper Manufacturing Limited 9,391 9,391 1.5 Paper making company Hutchison China MediTech Limited 9,113 9,113 1.5 Pharmaceutical and healthcare group China Lodging Group 8,962 8,962 1.5 Operates a chain of economy hotels CSI Properties Limited* 8,327 8,665 1.4 Hong Kong property company Twenty Largest Holdings 273,427 307,037 50.7 * Includes investment via CFDs 1 % of total gross asset exposure 2 Unlisted investment Income Statement Six months ended Year ended Six months ended 30.09.12 31.03.12 30.09.11 unaudited audited unaudited Notes revenue capital total revenue capital total revenue capital total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Revenue Investment income 2 12,468 - 12,468 12,912 - 12,912 11,291 - 11,291 Other income 2 2 - 2 9 - 9 4 - 4 Net derivative 2 835 - 835 550 - 550 407 - 407 income Total revenue 13,305 - 13,305 13,471 - 13,471 11,702 - 11,702 Losses on - (39,845) (39,845) - (155,156) (155,156) - (214,259) (214,259) investments designated at fair value through profit or loss Net (losses)/gains - (2,850) (2,850) - 27,460 27,460 - 12,169 12,169 on derivative instruments held at fair value through profit or loss Foreign exchange (29) (74) (103) 80 6 86 16 615 631 (losses)/gains on other net assets Foreign exchange - 861 861 - (1,605) (1,605) - (3,178) (3,178) gains/(losses) on bank loans Total revenue and 13,276 (41,908) (28,632) 13,551 (129,295) (115,744) 11,718 (204,653) (192,935) losses Expenses Investment (1,942) (1,942) (3,884) (4,156) (4,156) (8,312) (2,183) (2,183) (4,366) management fee Other expenses (770) - (770) (1,655) - (1,655) (817) - (817) Profit/(loss) 10,564 (43,850) (33,286) 7,740 (133,451) (125,711) 8,718 (206,836) (198,118) before finance costs and taxation Finance costs Interest on bank (448) (448) (896) (878) (878) (1,756) (452) (452) (904) loans Profit/(loss) 10,116 (44,298) (34,182) 6,862 (134,329) (127,467) 8,266 (207,288) (199,022) before taxation Taxation (282) (303) (585) (289) (237) (526) (305) - (305) Net profit/(loss) 9,834 (44,601) (34,767) 6,573 (134,566) (127,993) 7,961 (207,288) (199,327) after taxation for the period Earnings/(loss) per 3 1.49p (6.78p) (5.29p) 0.99p (20.33p) (19.34p) 1.20p (31.30p) (30.10p) Ordinary Share The Company does not have any income or expenses that are not included in the net profit/(loss) for the period. Accordingly the "Net profit/(loss) after taxation for the period" is also the "Total comprehensive income for the period" and no separate Statement of Comprehensive Income has been presented. The total column of this statement represents the Income Statement of the Company and is prepared in accordance with IFRS. The revenue return and capital return columns are supplementary and presented for information purposes as recommended by the Statement of Recommended Practice issued by the Association of Investment Companies. All of the profit/(loss) and total comprehensive income is attributable to the equity shareholders of the Company. There are no minority interests. All items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period. Statement of Changes in Equity Notes share share capital other capital revenue total capital premium redemption reserve reserve reserve equity £'000 account reserve £'000 £'000 £'000 £'000 £'000 £'000 Equity 6,564 204,648 - 452,232 18,188 2,331 683,963 shareholders' funds at 31 March 2011 Issue of Ordinary 5 63 6,921 - - - - 6,984 Shares Repurchase of 5 (5) - 5 (423) - - (423) Ordinary Shares Net (loss)/profit - - - - (207,288) 7,961 (199,327) after taxation for the period Dividend paid 4 - - - - - (1,656) (1,656) Equity 6,622 211,569 5 451,809 (189,100) 8,636 489,541 shareholders' funds at 30 September 2011 Equity 6,564 204,648 - 452,232 18,188 2,331 683,963 shareholders' funds at 31 March 2011 Issue of Ordinary 5 63 6,921 - - - - 6,984 Shares Repurchase of 5 (29) - 29 (2,323) - - (2,323) Ordinary Shares Net (loss)/profit - - - - (134,566) 6,573 (127,993) after taxation for the year Dividend paid 4 - - - - - (1,656) (1,656) Equity 6,598 211,569 29 449,909 (116,378) 7,248 558,975 shareholders' funds at 31 March 2012 Repurchase of 5 (41) - 41 (2,989) - - (2,989) Ordinary Shares Net (loss)/profit - - - - (44,601) 9,834 (34,767) after taxation for the period Dividend paid 4 - - - - - (4,934) (4,934) Equity 6,557 211,569 70 446,920 (160,979) 12,148 516,285 shareholders' funds at 30 September 2012 Balance Sheet Company No. 7133583 Notes 30.09.12 31.03.12 30.09.11 unaudited audited unaudited £'000 £'000 £'000 Non current assets Investments designated at fair value 596,661 629,709 577,015 through profit or loss Current assets Derivative assets held at fair value 6,908 11,582 6,224 through profit or loss Amounts held at futures clearing houses 8,022 3,922 5,722 and brokers Other receivables 10,464 9,146 1,843 Cash and cash equivalents 7,208 20,123 11,432 32,602 44,773 25,221 Current liabilities Derivative liabilities held at fair value (5,224) (3,792) (11,285) through profit or loss Bank loans (92,980) (93,841) (96,015) Other payables (14,774) (17,874) (5,395) (112,978) (115,507) (112,695) Net current liabilities (80,376) (70,734) (87,474) Net assets 516,285 558,975 489,541 Equity attributable to equity shareholders Share capital 5 6,557 6,598 6,622 Share premium account 211,569 211,569 211,569 Capital redemption reserve 70 29 5 Other reserve 446,920 449,909 451,809 Capital reserve (160,979) (116,378) (189,100) Revenue reserve 12,148 7,248 8,636 Total equity shareholders' funds 516,285 558,975 489,541 Net asset value per Ordinary Share 6 78.73p 84.72p 73.93p Cash Flow Statement Six Year Six months ended months ended 31.03.12 ended 30.09.12 audited 30.09.11 unaudited £'000 unaudited £'000 £'000 Operating activities Cash inflow from investment income 11,199 11,063 9,365 Cash inflow from derivative income 892 508 313 Cash inflow from other income 2 11 6 Cash outflow from directors' fees (75) (146) (72) Cash outflow from other payments (5,361) (9,933) (3,358) Cash outflow from purchase of investments (236,058) (613,873) (423,838) Cash outflow from the cost of derivatives (13,561) (13,711) (8,634) Cash inflow from sale of investments 226,718 554,516 352,033 Cash inflow from the proceeds of derivatives 16,817 34,528 27,011 Cash outflow from amounts held at futures (4,100) (642) (2,442) clearing houses and brokers Net cash outflow from operating activities before (3,527) (37,679) (49,616) servicing of finance Servicing of finance Cash outflow from interest on bank loans (875) (1,594) (480) Net cash outflow from operating activities and (4,402) (39,273) (50,096) servicing of finance Financing activities Cash inflow from the issue of Ordinary Shares - 6,984 6,984 Cash outflow from the repurchase of Ordinary (3,505) (1,345) (423) Shares Cash inflow from bank loans - 30,223 34,002 Cash outflow from dividends paid to shareholders (4,934) (1,656) (1,656) Net cash (outflow)/inflow from financing (8,439) 34,206 38,907 activities Decrease in cash and cash equivalents (12,841) (5,067) (11,189) Cash and cash equivalents at the beginning of the 20,123 25,184 25,184 period Effect of foreign exchange movements (74) 6 (2,563) Cash and cash equivalents at the end of the 7,208 20,123 11,432 period Notes to the Financial Statements 1 ACCOUNTING POLICIES The Interim Financial Statements have been prepared in accordance with International Accounting Standard ("IAS") 34 "Interim Financial Reporting". The accounting policies adopted in the preparation of the Interim Financial Statements are the same as those applied in the Company's Annual Report for the year ended 31 March 2012. 2 INCOME Six Year Six months ended months ended 31.03.12 ended 30.09.12 audited 30.09.11 unaudited £'000 unaudited £'000 £'000 Income from investments designated at fair value through profit or loss Overseas dividends 11,924 11,145 10,362 Overseas scrip dividends 373 1,252 929 UK dividends 69 515 - UK scrip dividends 102 - - 12,468 12,912 11,291 Other income Deposit interest 2 9 4 Net derivative income Dividends received on long CFDs 1,010 1,064 550 Interest paid on long CFDs (160) (390) (143) Interest received on short CFDs - 10 - Dividends paid on short CFDs (15) (134) - 835 550 407 Total income 13,305 13,471 11,702 3 EARNINGS/(LOSS) PER ORDINARY SHARE Six months Year ended Six months ended 31.03.12 ended 30.09.12 audited 30.09.11 unaudited unaudited Revenue earnings per Ordinary Share 1.49p 0.99p 1.20p Capital loss per Ordinary Share (6.78p) (20.33p) (31.30p) Total loss per Ordinary Share (5.29p) (19.34p) (30.10p) The revenue, capital and total earnings/(loss) per Ordinary Share are based on the net profit/ (loss) after taxation in the period divided by the weighted average number of Ordinary Shares in issue during the period, as shown below: Six months Year ended Six months ended 31.03.12 ended 30.09.12 audited 30.09.11 unaudited £'000 unaudited £'000 £'000 Revenue net profit after taxation 9,834 6,573 7,961 Capital net loss after taxation (44,601) (134,566) (207,288) Total net loss after taxation (34,767) (127,993) (199,327) Weighted average number of Ordinary Shares 657,844,644 661,971,830 662,189,453 in issue 4 DIVIDEND Six months Year ended Six months ended 31.03.12 ended 30.09.12 audited 30.09.11 unaudited £'000 unaudited £'000 £'000 Dividend paid Final dividend paid of 0.75 pence per Ordinary Share for the year ended 31 March 2012 (period ended 31 March 2011: 0.25 pence) 4,934 1,656 1,656 No dividend has been declared for the six month period to 30 September 2012. 5 SHARE CAPITAL Six months Year ended Six months ended 31.03.12 ended 30.09.12 audited 30.09.11 unaudited unaudited Shares £'000 Shares £'000 Shares £'000 Issued, allotted and fully paid Ordinary Shares of 1 penny each Beginning of the period 659,754,480 6,598 656,404,480 6,564 656,404,480 6,564 Issue of Ordinary Shares - - 6,250,000 63 6,250,000 63 Repurchase of Ordinary (4,025,000) (41) (2,900,000) (29) (450,000) (5) Shares End of the period 655,729,480 6,557 659,754,480 6,598 662,204,480 6,622 6 NET ASSET VALUE PER ORDINARY SHARE The net asset value per Ordinary Share is based on net assets of £516,285,000 (31 March 2012: £558,975,000 and 30 September 2011: £489,541,000) and on 655,729,480 (31 March 2012: 659,754,480 and 30 September 2011: 662,204,480) Ordinary Shares, being the number of Ordinary Shares in issue at the period end. 7 UNAUDITED FINANCIAL STATEMENTS The results for the six month periods ended 30 September 2012 and 30 September 2011, which are unaudited, constitute non-statutory accounts within the meaning of Section 435 of the Companies Act 2006. The figures and financial information for the year to 31 March 2012 are extracted from the latest published Financial Statements, on which the Independent Auditor gave an unqualified report, and they have been delivered to the Registrar of Companies. Directory BOARD OF DIRECTORS John Owen CMG MBE DL (Chairman) Nicholas Bull FCA (Senior Independent Director) David Causer FCA (Chairman of the Audit Committee) The Hon. Peter Pleydell-Bouverie DL (Chairman of the Investment Committee) Elisabeth Scott Andrew Wells INVESTMENT MANAGER FIL Investment Management (Hong Kong) Limited Level 21 Two Pacific Place 88 Queensway Admiralty Hong Kong UNLISTED INVESTMENT MANAGER, SECRETARY AND REGISTERED OFFICE FIL Investments International Beech Gate Millfield Lane Lower Kingswood Tadworth Surrey KT20 6RP FINANCIAL ADVISERS AND STOCKBROKERS Cenkos Securities plc 6,7,8 Tokenhouse Yard London EC2R 7AS INDEPENDENT AUDITOR Grant Thornton UK LLP Chartered Accountants and Registered Auditor 30 Finsbury Square London EC2P 2YU BANKERS AND CUSTODIAN JPMorgan 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 Information for Investors CONTACT INFORMATION Private investors: call free on 0800 41 41 10, 9am to 6pm, Monday to Saturday. Financial advisers: call free on 0800 41 41 81, 8am to 6pm, Monday to Friday. www.fidelity.co.uk/its Existing shareholders who have a specific query regarding their holding or need to provide update information, for example a change of address, should contact the appropriate administrator. Holders of ordinary shares Capita Registrars, Registrars to Fidelity China Special Situations PLC, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU. Telephone: 0871 664 0300 (calls cost 10p per minute plus network extras. Lines are open 8.30am to 5.30pm, Monday to Friday) Email: ssd@capitaregistrars.com. 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, PO Box 24035, 12 Blenheim Place, Edinburgh EH7 9DD. Telephone: 0845 358 1107 (calls to this number are charged at 3.95p per minute from a BT landline. Other telephone service providers' costs may vary). Fidelity ISA investors Fidelity, using the freephone numbers given above, or by writing to: UK Customer Service, Fidelity Investments, Oakhill House, 130 Tonbridge Road, Hildenborough, Tonbridge, Kent TN11 9DZ. General enquiries should be made to FIL Investments International, the Secretary, at the Company's registered office: FIL Investments International, Investment Trusts, Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey KT20 6RP. Telephone: 01732 36 11 44 Fax: 01737 83 68 92 www.fidelity.co.uk/its FINANCIAL CALENDAR 30 September - Interim period end 2012 November 2012 - announcement of Interim results Beginning of - publication of Interim Financial Report December 31 March 2013 - financial year end June 2013 - publication of Annual Report July 2013 - Annual General Meeting FURTHER INFORMATION The Fidelity Individual Savings Account ("ISA") is offered and managed by Financial Administration Services Limited. The Fidelity Investment Trust Share Plan is managed by FIL Investments International. Both companies are authorised and regulated by the Financial Services Authority. The Fidelity Investment Trust Share Plan is administered by The Bank of New York Mellon and shares will be held in the name of The Bank of New York Nominees Limited. 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 investment trusts are managed by FIL Investments International. Fidelity only gives information about its own products and services and does not provide investment advice based on individual circumstances. Should you wish to seek advice, please contact a Financial Adviser. Please note that the value of investments and the income from them may fall as well as rise and the investor may not get back the amount originally invested. Past performance is not a guide to future returns. For funds that invest in overseas markets, changes in currency exchange rates may affect the value of your investment. Investing in small and emerging markets can be more volatile than other more developed markets. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only. Investors should also note that the views expressed may no longer be current and may already have been acted upon by Fidelity. Fidelity, Fidelity Worldwide Investment, the Fidelity Worldwide Investment logo and symbol are trademarks of FIL Limited. The content of websites referred to in this document do not form part of this Interim Financial Report. Warning to Shareholders SHARE FRAUD WARNING Share fraud includes scams where investors are called out of the blue and offered shares that often turn out to be worthless or non-existent, or an inflated price for shares they own. These calls come from fraudsters operating in `boiler rooms' that are mostly based abroad. While high profits are promised, those who buy or sell shares in this way usually lose their money. The Financial Services Authority (FSA) has found most share fraud victims are experienced investors who lose an average of £20,000, with around £200m lost in the UK each year. PROTECT YOURSELF If you are offered unsolicited investment advice, discounted shares, a premium price for shares you own, or free company or research reports, you should take these steps before handing over any money: 1. Get the name of the person and organisation contacting you. 2. Check the FSA Register at www.fsa.gov.uk/fsaregister to ensure they are authorised. 3. Use the details on the FSA Register to contact the firm. 4. Call the FSA Consumer Helpline on 0845 606 1234 if there are no contact details on the Register or you are told they are out of date. 5. Search the FSA's website list of unauthorised firms and individuals to avoid doing business with. 6. REMEMBER: if it sounds too good to be true, it probably is! If you use an unauthorised firm to buy or sell shares or other investments, you will not have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) if things go wrong. REPORT A SCAM If you are approached about a share scam you should tell the FSA using the share fraud reporting form at www.fsa.gov.uk/scams, where you can find out about the latest investment scams. You can also call the Consumer Helpline on 0845 606 1234. If you have already paid money to share fraudsters you should contact Action Fraud on 0300 123 2040 Fidelity, Fidelity Worldwide Investment, the Fidelity Worldwide Investment logo and symbol are trademarks of FIL Limited Printed on FSC certified paper. 100% of the inks used are vegetable oil based 95% of press chemicals are recycled for further use and on average 99% of any waste associated with this production will be recycled. The FSC logo identifies products which contain wood from well managed forests certified in accordance with the rules of the Forest Stewardship Council. This document is printed on Cocoon Silk; a paper made using 50% recycled fibre from genuine waste paper and 50% virgin fibre. The unavoidable carbon emissions generated during the manufacture and delivery of this document, have been reduced to net zero through a verified, carbon offsetting project.

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