Annual Financial Report

FIDELITY EUROPEAN VALUES PLC                          

     ANNUAL FINANCIAL REPORT, PROXY FORM AND ADDITIONAL DISCLOSURES TO THE     
                      PRELIMINARY RESULTS FOR THE YEAR TO                      

                               31 DECEMBER 2011                                

Further to the voluntary disclosure of the Company's annual results for the
year ended 31 December 2011 by way of a preliminary announcement dated 6 March
2012, in accordance with the Disclosure and Transparency Rules ("the Rules")
4.1.3 and 6.3.5(2) this announcement contains the text of the preliminary
announcement dated 6 March 2012 together with the additional text in compliance
with the Rules.

The Company's annual report and financial statements for the year ended 31
December 2011 together with the accompanying proxy form have been submitted to
the UK Listing Authority, and will shortly be available for inspection on the
National Storage Mechanism (NSM):

www.hemscott.com/nsm.do

(Documents will usually be available for inspection within two business days of
this notice being given)

The annual report and financial statements will shortly be available on the
Company's website at https://www.fidelity.co.uk/static/pdf/common/
investment-trusts/european/annual-report11.pdf

Rebecca Burtonwood

FIL Investments International

Company Secretary

16 March 2012

01737 836 869

FIDELITY EUROPEAN VALUES PLC

For the year ended 31 December 2011

Announcement of Year End Results

I have pleasure in presenting the Preliminary Announcement of Fidelity European
Values PLC for the year ended 31 December 2011.

PERFORMANCE

Investors entered 2011 in an upbeat mood following a pick up of economic growth
and positive stockmarket returns in 2010. However, the Arab spring, Japanese
tsunami, continued sovereign debt issues in Europe and concerns over global
economic growth swept aside this wave of optimism and pessimism prevailed. In
Europe, the sovereign debt crisis, fears that Greece will leave the euro and
the contagion effects on other indebted nations, such as Italy, dominated the
headlines and investor sentiment. As a result, European equities proved to be
volatile throughout the year and underperformed other asset classes.

Against this backdrop, the net asset value ("NAV") per share of the Company
returned -11.5%, but it outperformed its benchmark, the FTSE World Europe (ex
UK) Index, which returned -14.7%, both figures being on a total return basis.
Overall, companies with defensive characteristics whose earnings are less
correlated to economic growth outperformed companies with more cyclical
business models; and financials struggled once again. The Company benefited
from holdings in the healthcare, food producers and tobacco sectors. However,
returns were held back by positions in the financials sector. A more detailed
review of the performance of the portfolio is provided in the Manager's Review.

Whilst the NAV total return was -11.5%, the share price total return was -8.6%
over 2011, with the share price discount to NAV having narrowed slightly over
the period. It is of course unattractive to see negative returns, but, to look
at the situation more positively, there are many fine and strong companies with
wide international businesses quoted on the European stock exchanges and it is
encouraging to see this loss limited to 8.6%, against a tumultuous and largely
negative political backdrop.

DISCOUNT MANAGEMENT

The Board remains active in discount management, including buying back shares
at a discount. This is a practice it has adopted since launch and buybacks have
continued during the year, during which the level of discount has narrowed. The
purpose of buybacks is to reduce share price volatility and it also results in
an enhancement to the NAV per share. Further details of share buybacks made
during the year may be found in the Directors' Report in the annual report.

In summary, your Board has sanctioned share buybacks over the course of 2011
amounting to just over 10% of the issued share capital of the Company. Yet the
discount remained at 14.2% at the year end. In part, this is a reflection on
European equities being out of favour in relation to other asset classes.
Whilst it is frustrating that the discount remains wide for the time being, we
have been able to help dampen the level of share price volatility against net
asset value; and this we believe is strongly in the interests of shareholders
and it will continue to be an objective of the Board.

DIVIDENDS

The Board intends to continue with its practice of paying out earnings in full.
The objective is one of long term capital growth and we will not seek to
influence the Manager to determine the level of income of your Company's
portfolio in any particular year.

The Board has decided to recommend a final dividend of 26.50 pence per share
for the year ended 31 December 2011 (2010: final dividend 15.75p). This
dividend will be payable on 25 May 2012 to shareholders on the register at
close of business on 16 March 2012 (ex-dividend date 14 March 2012).

The proposed dividend increase for 2011 over 2010 is therefore 68%. Whilst we
would continue emphasising that the increase is a function of stock selection
and cannot be extrapolated into the future, there are two positive factors
shareholders may like to note. Firstly, the fall in European share prices has
taken place even as underlying earnings and dividend growth has been positive,
thereby enhancing the yield on the market. The dividend yield on the FTSE World
Europe (ex UK) index at 31 December 2011 was 4.38% Secondly, your Portfolio
Manager, Sam Morse, who took over management of the portfolio from 1 January
2011, focuses on companies which are able to grow their dividends as being one
of the underlying factors in his stock selection. A further explanation of the
investment process can be found in the annual report.

Performance over one year, five years and since launch to 31 December 2011

(on a total return basis)

                          NAV               Share price     FTSE World Europe  
                                                                               
                                                            (ex UK) Index1     
                                                                               
One year                  -11.5%            -8.6%           -14.7%             
                                                                               
Five years                -1.3%             -9.1%           -7.3%              
                                                                               
Since launch (1991)       +1,269.8%         +1,083.3%       +390.0%            

Source: Fidelity and Datastream as at 31 December 2011

Basis: bid-bid with net income reinvested

Past performance is not a guide to future returns

1 Data prior to the year ended 31 December 2011 is on a net of tax basis

INVESTMENT POLICY AND GEARING

During the year, shareholders approved a change in investment policy
predominantly to allow the introduction of Contracts For Difference ("CFDs")
for gearing purposes. Following the repayment of the drawn down variable rate
unsecured credit facility from Lloyds TSB Bank plc on 18 November 2011 and the
unsecured bank loan from Barclays Bank PLC on 15 December 2011, the Company has
no loans. However, the Company has obtained equivalent exposure, on a
significantly more cost effective basis, to the market through the use of CFDs.
As at 31 December 2011 the total portfolio exposure represented 108.6% of
Shareholders' funds.

Additional disclosures to the financial statements have been added explaining
the Company's geared position through the use of CFDs, including details of how
they are measured and how they are reported. Further details on the use of CFDs
can be found in the Directors' Report in the annual report.

CURRENCY HEDGING

Shareholders will be aware that there are inevitably heightened risks in
holding a portion of the portfolio in euro denominated shares at a time of
considerable stresses for the euro. Although the portfolio has never been
hedged out of European currencies into sterling since the Company was first
formed in 1991, this is allowable and the Board has considered this option
carefully.

We continue to believe on balance that shareholders are looking for continental
European exposure, including currency exposure, in making an investment choice;
and on this basis euro exposure has not been hedged back into sterling.

It should be noted that a large number of the underlying investments have
significantly diversified businesses and non-euro income streams. Companies are
also carrying out their own hedging operations, which may or may not be
disclosed to the marketplace. Furthermore, from an operational standpoint, your
Board has discussed arrangements and contingency plans with your Manager,
should the Euro run into further difficulty.

As a result of our overweight position in a number of non-Eurozone markets, the
Company has a 14.1% underweight position in euro denominated stocks.

PERFORMANCE FEES

With effect from 1 January 2012 the Board entered into a newly negotiated
performance fee arrangement with the Manager. We are pleased to inform you that
the performance fee element has been reduced from 20% to 15%; and the upper
limit of the performance related fee payable in any one year has been reduced
from 1.5% to 1% of net asset value. It remains the case that the Manager must
recoup any underperformance against the benchmark before any subsequent
outperformance can be rewarded. Further details are included in the Directors'
Report in the annual report.

DIRECTORATE

In accordance with the UK Corporate Governance Code for Directors of FTSE 350
companies the entire Board is subject to annual re-election. The Directors'
biographies can be found in the annual report. The Directors have a wide range
of appropriate skills and experience to make up a balanced board for your
Company. With the exception of Simon Fraser, in the opinion of the Board, all
other Directors are independent.

Simon Fraser, due to his previous employment relationship with the Manager and
his directorship of another investment trust managed by Fidelity, namely
Fidelity Japanese Values PLC, is deemed non-independent by the UK Corporate
Governance Code. The Board is convinced that Simon Fraser's experience serves
the Company well; and the Directors support unanimously his continued position
as a Director of the Company.

It may interest shareholders to know that, again in line with good corporate
governance, the Board has arranged for an independent, externally facilitated
assessment of its performance to take place during 2012.

The Board has considered the proposals for the re-election of all of the
Directors and recommends to shareholders that they vote in favour of the
proposals.

CONTINUATION VOTE

In accordance with the Articles of Association of the Company, an ordinary
resolution that the Company continue as an investment trust for a further two
years was passed at the 2011 Annual General Meeting. A further continuation
vote will take place at next year's Annual General Meeting.

ANNUAL GENERAL MEETING

The Annual General Meeting of the Company is due to take place on 16 May 2012
at midday at Fidelity's offices at 25 Cannon Street. Full details of the
meeting are given in the annual report and I look forward to talking with as
many shareholders as possible on this occasion.

CONCLUSION

European equities will have to contend with a wide range of complex factors in
2012, ranging from a lack of economic growth and high budget deficits and debt
in the periphery, to the continued possibilities of a disorderly Greek exit
from the euro and the consequences for the Eurozone as a whole of such an
event. There also remains a worrying lack of competitiveness mainly in southern
Europe, resulting in a `two speed' Eurozone, which has yet to be addressed
satisfactorily in the political arena.

There is a risk that aggregate earnings may fall in 2012. However, as already
mentioned, there are many fine companies quoted on the continental European
bourses, with strong and internationally competitive businesses. We support
your Manager's view that overall valuations look attractive.

Humphrey van der Klugt

Chairman

6 March 2012

MANAGER'S REVIEW

PERFORMANCE REVIEW

As shown in the Financial Summary in the annual report, the NAV per share of
Fidelity European Values decreased by 11.5 % in the year to 31 December 2011,
outperforming the FTSE World Europe (ex UK) Index, which fell by 14.7 %. (All
performance figures are quoted on a total return basis and in sterling.)

MARKET BACKGROUND

2011 was a very disappointing year for the European markets.

The year started well. There was an expectation that the economic rebound from
the financial crisis would continue to strengthen. This optimism was reflected
in a strong reversionary bounce in stockmarkets in January, led by the banking
sector and companies listed in the "periphery" of Europe (Spain, Italy,
Portugal, Greece and Ireland).

This early optimism, shared by your Manager, was rattled as uncertainty about
global economic growth rose following the Arab spring and the dreadful
earthquake and tsunami in Japan. The European Central Bank, however, still
fearing inflation, raised interest rates fifty basis points with hikes in April
and July. Uncertainty turned into a full scale rout, during the summer months,
when a suspicion that the economy might slow threatened to turn a sovereign
debt crisis into a European catastrophe with global consequences.

Some commentators even began to suggest the unthinkable: disorderly
disintegration of the Eurozone and a return to national currencies. Companies
in the financials sector, in particular banks, whose fortunes are inextricably
linked to the prospects for economic growth and sovereign debt risk, took the
brunt of investors' pessimism.

As markets fell, politicians struggled to come up with any policy response that
provided optimism that the twin problems of high debt and a lack of growth
would be overcome. A series of "summits" produced new lows to the point that
pessimism pervaded. The market bottomed in late September, having fallen more
than 30% from its peak in February.

The year ended, however, on a more positive note. The new Governor of the
European Central Bank, Mario Draghi, announced two cuts in interest rates,
reversing his predecessor's hikes, and introduced a new three year Long Term
Refinancing Operation (LTRO) with expanded collateral. This provided investors,
and banks, with a chink of light at the end of a very long tunnel, given the
positive impact this would have, in the short term, on funding and liquidity
thereby providing more planning time for lasting solutions to the sovereign
debt crisis.

PORTFOLIO REVIEW

Your Manager continues to focus on identifying, and investing in, attractively
valued companies, with sound balance sheets, which can deliver consistent
dividend growth. The Company is constructed from the "bottom up" which means
that stock selection drives sector and country positioning rather than the
other way around. Your Manager does, however, apply "top down" risk control to
make sure that the fund will not be blown too far off course, relative to its
European benchmark, in the event of a change in the economic or market
back-drop.

In 2011 the NAV outperformed a declining benchmark by 3.2%. Relative
performance was aided, mainly, by stock selection but was held back by gearing
which was kept at a level of between 4% and 10% during the year. CFDs replaced
fixed term loans for gearing purposes in the later months of 2011 and the
process has `bedded down' well.

Key positive stock contributions mainly came from sectors with less short term
sensitivity to the economy such as healthcare, food producers, tobacco and
energy. Outside those sectors, there were three companies among the top ten
contributors all of which made positive absolute returns in a year when the
market fell. Hugo Boss benefited from strong results and an upgrade to its
longer term guidance. Iliad was marked higher on the introduction of a new
set-top box which helped the company to regain a share in the French broadband
market and as investors looked forward to the launch of their mobile business.
Finally, SAP enjoyed a strong year as it became apparent that new products and
demand from companies for their software, partly to reduce costs in a more
difficult environment, were driving earnings above expectations.

Most of the detractors to performance were financials, banks in particular.
Your Manager increased the weighting in financials during the year on the view
that many of these companies, unlike non-financial cyclicals, were already
discounting a very pessimistic outlook such that they were attractively valued
on a low level of earnings. Your Manager was also encouraged, in the early part
of the year, that some banks were beginning to re-instate and grow dividends.
That optimism proved misplaced, however, as the prospects for dividends and
dividend growth worsened as the year progressed due to growing sovereign debt
risks and evidence of slowing economies. The French banks, BNP and Societe
Generale, were particularly poor performers suffering from concerns about a
lack of capital and funding in the face of increased sovereign debt and
economic risk. Your Manager sold the holding in Societe Generale, following its
announcement that it would not be paying a dividend for 2011, and redistributed
the proceeds among other bank holdings with more robust prospects for dividends
and dividend growth.

OUTLOOK

Although stockmarkets fell in 2011, European companies overall grew their
earnings and dividends such that valuations ended the year at a historic low
with an aggregate dividend yield approaching 4.5%, which is a full 50% above
the longer term average for Europe over the last few decades.

2011 was a poor year for European stockmarkets because markets look ahead.
Valuation is attractive but there is a risk that aggregate earnings, and
dividends, fall in 2012, given that nonfinancial corporate margins are at a
historical high, a European recession is possible and governments may target a
relatively prosperous corporate sector.

Even in a pessimistic scenario it would be hard, however, to envisage a
reduction in dividends that mirrored the 30% cut experienced during the
financial crisis when many banks reduced dividends from generous levels to
nothing. There are risks to forecasts, but these are largely discounted and so
your Manager believes there is fundamental value in European shares. As always,
risk and reward are common bed-fellows and the biggest rewards often come when
risk appears high.

There are few optimistic market forecasts for 2012 (unlike at the beginning of
2011). This is understandable given the on-going uncertainty about economic
growth in Europe in 2012 and the "tailrisk" of more upheaval in the Eurozone
with investors mulling the possibility of a disorderly Greek exit and the
resulting contagion. Politics will, again, play an important role in 2012 and
noise around the elections in France and Greece may unsettle the markets. The
technocratic government, led by Mario Monti, seems to have been successful in
bringing an element of relative calm to Italy but, with elections looming in
2013, investors may become more cautious as the year progresses.

Your Manager's base case scenario remains that the Eurozone should stay
together in 2012 because, although austerity is painful, the costs of exit are
too great for the Eurozone nations to bear. Europe's economies are likely,
therefore, to remain sluggish, partly due to continued austerity, particularly
in the "periphery". In such an environment, attractively valued companies, with
sound balance sheets, which can deliver consistent dividend growth, will
continue to perform well.

FIL Investments International

6 March 2012

PRINCIPAL RISKS AND UNCERTAINTIES

The Board confirms that there is an ongoing process for identifying, evaluating
and managing the principal risks faced by the Company. The Board, with the
assistance of the Manager, has developed a risk matrix which, as part of the
internal controls process, identifies the key risks that the Company faces. The
matrix has identified strategic, marketing, investment management, company
secretarial and other support function risks. The review by the Board is in
accordance with the FRC's "Internal Control:

Revised Guidance for Directors". The Board also determines the nature and
extent of any risks it is willing to take in order to achieve its strategic
objectives.

Risks identified in the matrix are:

1. Market risks

The Company's assets consist mainly of listed securities and the principal
risks are therefore market related such as market downturn, interest rate
movements, deflation/inflation, terrorism and protectionism.

The Portfolio Manager's success or failure to protect and increase the
Company's assets against this background are core to the Company's continued
success. Other factors affected by market forces, such as exchange and bond
rates, contribute to risks which have to be taken as part of the Company's
normal business. Risks associated with the Eurozone crisis can be found in the
Chairman's Statement and Manager's Review.

Risks to which the Company is exposed and which form part of the market risks
category are included in Note 17 to the financial statements in the annual
report together with summaries of the policies for managing these risks. These
comprise: market price risk (comprising other price risk, interest rate risk
and foreign currency risk), liquidity risk, counterparty risk, credit risk and
derivative instruments risks.

The Company's €65,000,000 fixed term loan facility with Barclays Bank PLC and
the amount drawn down from the €25,000,000 revolving credit facility with
Lloyds TSB Bank plc were both repaid on maturity. The Company sought and
received approval from shareholders to use CFDs for gearing purposes on 18 May
2011. The Company now has geared exposure through the use of long CFDs.

2. Performance risk

The achievement of the Company's performance objective relative to the market
requires the application of risk. Strategy, asset allocation and stock
selection might lead to underperformance of the benchmark index and target.
Management of the risks set out above is carried out by the Board which, at
each Board meeting, considers the asset allocation of the portfolio and the
risk associated with particular countries and industry sectors within the
parameters of the investment objective. The Portfolio Manager is responsible
for actively monitoring the portfolio selected in accordance with the asset
allocation parameters and seeks to ensure that individual stocks meet an
acceptable risk/reward profile.

3. Income risks - dividends

In addition to the risk of the mis-management of funds by poor investment
decisions, there is also a risk involved in income. The Company's objective is
capital growth and, as explained in the Chairman's Statement in the annual
report, the Portfolio Manager is not constrained in any way to determine the
level of income. The Board monitors this risk through the receipt of detailed
income reports and forecasts which are considered at each meeting.

4. Share price, NAV and discount volatility risk

The price of the Company's shares relative to the benchmark index and in
absolute terms, as well as its discount to net asset value, are factors which
are not within the Company's total control. Some short term influence over the
discount may be exercised by the use of share repurchases at acceptable prices.
Details of repurchases during the year are given in the annual report. The
Company's share price, NAV and discount volatility are monitored daily by the
Manager and considered by the Board at each of its meetings.

5. Gearing risk

The Company has the option to invest up to the total of any loan facilities or
to use CFDs to invest in equities. In a rising market the Company will benefit
but in a falling market the impact would be detrimental. In order to manage the
level of gearing the Board regularly considers gearing and gearing risk and
sets limits accordingly. The Portfolio Manager follows these and may hold short
term cash deposits to control the level of net gearing (if gearing is held by
way of a loan facility) appropriate to the circumstances as viewed at the time.
The aggregate exposure will not exceed 130% of net assets at the time of
investment.

6. Counterparty risk

The Company relies on a number of main counterparties, namely the Manager,
Registrar and Custodian. The Manager is the member of a privately owned group
of companies on which a regular report is provided to the Board. The Manager,
Registrar and Custodian are subject to regular audits by Fidelity's internal
audit team and the counterparties' own internal controls reports are received
by the Board and any concerns investigated.

7. Control systems, regulation, governance including shareholder relations
risks

The Company is dependent on the Manager's control systems and those of its
Custodian and Registrar, both of which are monitored and managed by the Manager
in the context of the Company's assets and interests on behalf of the Board.
The security of the Company's assets, dealing procedures and the maintenance of
investment trust status under Section 1159 of the Corporation Tax Act 2010,
among other things, rely on the effective operation of such systems. These are
regularly tested and a programme of internal audits is carried out by the
Manager to maintain standards. Regular reports are provided to the Board.

8. Other risks

Other risks monitored on a regular basis include loan covenants, at times when
the Company takes out loans, which are subject to daily monitoring, together
with the Company's gearing and cash position, and the continuation vote (at a
time of poor performance). Regular reports are provided to the Board.

RELATED PARTIES

Mr Fraser was employed by the FIL Limited group until the end of December 2008.
Mr Fraser is a Director of Barclays PLC and Barclays Bank PLC. Mr Fraser had no
influence over the decision by Barclays Bank PLC in its former lending
relationship with the Company.

FIL Limited has no interest in shares of the Company (2010: 112,379 shares or
0.23%).

No Director is under a contract of service with the Company and no contracts
existed during or at the end of the financial period in which any Director was
materially interested and which were significant in relation to the Company's
business, except as disclosed previously in relation to Mr Fraser's interest in
the Management Agreement and his directorship of Barclays Bank PLC. There have
been no other related party transactions requiring disclosure under Financial
Reporting Standard ("FRS") 8. The interests of the Directors in the ordinary
shares of the Company as at 31 December 2011 and 31 December 2010 are shown
above.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the annual report and financial
statements in accordance with applicable law and regulations. Company law
requires the Directors to prepare financial statements for each financial
period. Under that law they have elected to prepare the financial statements in
accordance with UK Generally Accepted Accounting Practice.

The financial statements are required by law to give a true and fair view of
the state of affairs of the Company and of the profit or loss for the period.

In preparing these financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject
to any material departures disclosed and explained in the financial statements;
and

• prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.

The Directors are responsible for ensuring that adequate accounting records are
kept which disclose with reasonable accuracy at any time the financial position
of the Company and to enable them to ensure that its financial statements
comply with the Companies Act 2006. They are also responsible for safeguarding
the assets of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.

Under applicable law and regulations the Directors are also responsible for
preparing a Directors' Report, including a Business Review, a Directors'
Remuneration Report and a Corporate Governance Statement that comply with that
law and those regulations. The Directors are responsible for the maintenance
and integrity of the corporate and financial information included on the
Company's pages of the Manager's website www.fidelity.co.uk/its. Visitors to
the website need to be aware that legislation in the United Kingdom governing
the preparation and dissemination of the financial statements may differ from
legislation in their own jurisdictions.

We confirm that to the best of our knowledge the financial statements, prepared
in accordance with the applicable set of accounting standards, give a true and
fair view of the assets, liabilities, financial position and profit or loss of
the Company; and the Directors' Report includes a fair review of the
development and performance of the business and the position of the Company
together with a description of the principal risks and uncertainties it faces.

Approved by the Board on 6 March 2012 and signed on its behalf.

Humphrey van der Klugt

Chairman

6 March 2012

INCOME STATEMENT

for the year ended 31 December 2011

                                         2011                      2010          
                                                                                 
                                revenue capital   total     revenue capital total  
                                £'000   £'000     £'000     £'000   £'000   £'000  
                                                                                 
(Losses)/gains on investments       -  (94,320)  (94,320)       -  33,621  33,621
designated at fair value                                                         
through profit or loss                                                           
                                                                                 
Gains on derivative                 -     3,201     3,201       -       -       -
instruments held at fair                                                         
value through profit or loss                                                     
                                                                                 
Income*                        22,831         -    22,831  18,883       -  18,883
                                                                                 
Investment management fee     (5,127)         -   (5,127) (5,036)       - (5,036)
                                                                                 
Other expenses                  (710)         -     (710)   (664)       -   (664)
                                                                                 
Exchange (losses)/gains on       (73)   (2,639)   (2,712)      65 (4,808) (4,743)
other net assets                                                                 
                                                                                 
Exchange gains on loans             -     1,394     1,394       -   4,153   4,153
                                                                                 
Net return/(loss) before       16,921  (92,364)  (75,443)  13,248  32,966  46,214
finance costs and taxation                                                       
                                                                                 
Finance costs                 (2,617)         -   (2,617) (3,025)       - (3,025)
                                                                                 
Net return/(loss) on ordinary  14,304  (92,364)  (78,060)  10,223  32,966  43,189
activities before taxation                                                       
                                                                                 
Taxation on return/(loss) on  (1,511)        50   (1,461) (2,262)    (60) (2,322)
ordinary activities**                                                            
                                                                                 
Net return/(loss) on ordinary  12,793  (92,314)  (79,521)   7,961  32,906  40,867
activities after taxation for                                                    
the year                                                                         
                                                                                 
Return/(loss) per ordinary     26.94p (194.42p) (167.48p)  15.95p  65.91p  81.86p
share                                                                            

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 profit and loss account of the
Company.

All revenue and capital items in the above statement derive from continuing
operations.

No operations were acquired or discontinued in the year.

* Income

                                                            2011     2010   
                                                                         
                                                           £'000    £'000  
                                                                         
Income from investments designated at fair value through                 
profit or loss                                                           
                                                                         
Overseas dividends                                         20,518  18,344
                                                                         
Overseas scrip dividends                                    1,987     352
                                                                         
UK dividends                                                  244       -
                                                                         
                                                           22,749  18,696
                                                                         
Other income                                                             
                                                                         
Deposit interest                                               46      55
                                                                         
Income from Fidelity Institutional Liquidity Fund plc          36     132
                                                                         
Total income                                               22,831  18,883

** Relates to overseas taxation only.

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

for the year ended 31 December 2011

                           share   share   capital    capital  revenue  total   
                           capital premium redemption reserve  reserve  equity  
                           £'000   account reserve    £'000    £'000    £'000   
                                   £'000   £'000                                
                                                                                
Opening shareholders'       12,779  58,615      3,046  558,047   16,448  648,935
funds: 1 January 2010                                                           
                                                                                
Net return on ordinary           -       -          -   32,906    7,961   40,867
activities after taxation                                                       
for the year                                                                    
                                                                                
Repurchase of ordinary       (417)       -        417 (17,968)        - (17,968)
shares                                                                          
                                                                                
Dividend paid to                 -       -          -        - (11,292) (11,292)
shareholders                                                                    
                                                                                
Closing shareholders'       12,362  58,615      3,463  572,985   13,117  660,542
funds: 31 December 2010                                                         
                                                                                
Net (loss)/return on                                                            
ordinary activities after                                                       
                                                                                
taxation for the year            -       -          - (92,314)   12,793 (79,521)
                                                                                
Repurchase of ordinary     (1,289)       -      1,289 (55,664)        - (55,664)
shares                                                                          
                                                                                
Dividend paid to                 -       -          -        -  (7,740)  (7,740)
shareholders                                                                    
                                                                                
Closing shareholders'       11,073  58,615      4,752  425,007   18,170  517,617
funds: 31 December 2011                                                         
                                                                                

Balance Sheet as at 31 December 2011

                                                     2011          2010        
                                                                       
                                                    £'000         £'000       
                                                                       
Fixed assets                                                           
                                                                       
Investments designated at fair value through       504,409      693,547
profit or loss                                                         
                                                                       
Current assets                                                         
                                                                       
Derivative assets held at fair value through         4,423            -
profit or loss                                                         
                                                                       
Debtors                                                887        2,106
                                                                       
Fidelity Institutional Liquidity Fund plc               31       21,533
                                                                       
Cash at bank                                        12,371        3,976
                                                                       
                                                    17,712       27,615
                                                                       
Creditors - amounts falling due within one                             
year                                                                   
                                                                       
Derivative liabilities held at fair value          (1,314)            -
through profit or loss                                                 
                                                                       
Other creditors                                    (3,190)      (4,808)
                                                                       
Fixed rate unsecured loan                                -     (55,812)
                                                                       
                                                   (4,504)     (60,620)
                                                                       
Net current assets/(liabilities)                    13,208     (33,005)
                                                                       
Total net assets                                   517,617      660,542
                                                                       
Capital and reserves                                                   
                                                                       
Share capital                                       11,073       12,362
                                                                       
Share premium account                               58,615       58,615
                                                                       
Capital redemption reserve                           4,752        3,463
                                                                       
Capital reserve                                    425,007      572,985
                                                                       
Revenue reserve                                     18,170       13,117
                                                                       
Total equity shareholders' funds                   517,617      660,542
                                                                       
Net asset value per ordinary share               1,168.57p    1,335.78p

Cash Flow Statement

for the year ended 31 December 2011

                                                             2011      2010     
                                                                            
                                                            £'000     £'000    
                                                                            
Operating activities                                                        
                                                                            
Investment income received                                  16,783    14,713
                                                                            
Deposit interest received                                       78       188
                                                                            
Investment management fee paid                             (5,384)   (4,958)
                                                                            
Directors' fees paid                                         (107)     (112)
                                                                            
Other cash payments                                          (494)     (735)
                                                                            
Net cash inflow from operating activities                   10,876     9,096
                                                                            
Servicing of derivatives and bank loans                                     
                                                                            
Interest paid on long CFDs and bank loans                  (2,606)   (3,054)
                                                                            
Net cash outflow from servicing of finance                 (2,606)   (3,054)
                                                                            
Taxation                                                                    
                                                                            
Taxation recovered                                           2,608     1,485
                                                                            
Taxation recovered                                           2,608     1,485
                                                                            
Financial investment                                                        
                                                                            
Purchase of investments                                  (278,237) (555,131)
                                                                            
Disposal of investments                                    372,990   554,223
                                                                            
Net cash inflow/(outflow) from financial investment         94,753     (908)
                                                                            
Derivative activities                                                       
                                                                            
Proceeds of long CFD positions closed                           92         -
                                                                            
Net cash inflow from derivative activities                      92         -
                                                                            
Dividend paid to shareholders                              (7,740)  (11,292)
                                                                            
Net cash inflow/(outflow) before use of liquid resources    97,983   (4,673)
and financing                                                               
                                                                            
Cash flow from management of liquid resources                               
                                                                            
Fidelity Institutional Liquidity Fund plc                   21,502    24,290
                                                                            
Net cash inflow from management of liquid resources         21,502    24,290
                                                                            
Net cash inflow before financing                           119,485    19,617
                                                                            
Financing                                                                   
                                                                            
Repurchase of ordinary shares                             (54,354)  (19,590)
                                                                            
Loans repaid                                              (54,418)  (33,147)
                                                                            
Net cash outflow from financing                          (108,772)  (52,737)
                                                                            
Increase/(decrease) in cash                                 10,713  (33,120)

The above statements have been prepared on the basis of the accounting policies
as set out in the financial statements in the annual report to 31 December
2011. This preliminary statement, which has been agreed with the Auditor, was
approved by the Board on 6 March 2012. It is not the Company's statutory
financial statements.  The statutory financial statements for the financial
year ended 31 December 2010 have been delivered to the Registrar of Companies.
The statutory financial statements for the financial year ended 31 December
2011 have been approved and audited but have not yet been filed. The statutory
financial statements for the financial years ended 31 December 2010 and 31
December 2011 received unqualified audit reports, did not include a reference
to any matters to which the Auditor drew attention by way of emphasis without
qualifying the report and did not contain statements under section 498(2) and
(3) of the Companies Act 2006.

 
The annual report and financial statements have been posted to shareholders.