Fidelity Emerging Markets Limited (the 'Company' or 'FEML')

Legal Entity Identifier: 213800HWWQPUJ4K1GS84

Annual Results for the year ended 30 June 2022

The Directors of Fidelity Emerging Markets Limited announce the Company's results for the year ended 30 June 2022.

Financial Highlights and Performance

Total Return in GBP for the year to 30 June 2022

Chairman's Statement

There have been multiple factors which have led to the poor performance of emerging markets, and the performance of the portfolio, during the period but the most significant of these was doubtless Russia's invasion of Ukraine.

As described in the Portfolio Managers' report, the Company had overweight positions in Russian companies prior to the invasion of Ukraine, which was not anticipated by the Portfolio Managers. Although this was reduced somewhat by judicious use of a hedging index short position immediately prior to the invasion, the overweight positions were not fully offset by the time the military action began.

In response to rapidly imposed sanctions by western governments, Russian authorities effectively closed their market to foreign transactions in the market and as such the manager took the decision to write the valuation of the Russian securities down to zero - leading to a significant negative impact to the valuation of the portfolio overall.

The situation in Russia also led to second order impacts, for instance a sharp re-rating of oil-rich markets such as Saudi Arabia, where the Company was underweight - leading to further relative underperformance as compared with the index. It also had a material impact on the sector positioning of the portfolio where a number of financial and energy stocks were written off creating unintended underweight positions in the short term.

Since the invasion, the Portfolio Managers have repositioned the portfolio in areas of likely growth and recovery, although this has not yet come to fruition. For example, there is now greater focus on food and energy security. The Portfolio managers have been increasing the Company's exposure to areas such as energy, nitrogen-based fertilisers, and financials in resource rich countries.

Outlook

Looking forward, the prospects for many emerging countries remain uncertain but there are reasons for cautious optimism. Their markets will be impacted by the economies and actions of developed countries as well as uncertainty due to climate change, geopolitics and potential pandemic aftershocks, but meaningful value has emerged as many stocks have already derated.

Developed markets are facing the prospect of recession, and persistent inflation. Alongside the Portfolio Managers, the Board believes that inflation will be less severe in many emerging markets but will result in higher commodity prices for several years to come. In addition, the focus on Renewables will increase demand for (and therefore the price of) 'future facing' commodities like copper which are vital to the build out of infrastructure and technological advancement, while the transition to renewable energy is likely to result in a structural underinvestment in fossil fuels meaning that energy prices will remain stubbornly high for some time contributing to incentivise renewables.

As ever, in periods of volatility, stock-picking opportunities arise and the Board is confident that the Portfolio Managers will use the full extent of the investment tools available to them to capitalise on the opportunities taking into account the overall world situation.

Change of Manager and Investment Manager

As set out in last year's annual report, following the last period end several changes were made to the Company's management arrangements. On 1 July 2021, the Board announced that it had selected FIL Investments Services (UK) Limited as the Alternative Investment Fund Manager ('the Manager') of the Company, with the investment management of the Company to be undertaken by FIL Investments International (the 'Investment Manager', 'Fidelity International'), collectively 'Fidelity', to replace the previous Manager, Genesis Investment Management, LLP who remained as Investment Manager until 4 October 2021.

Change of Investment Policy

In advance of Fidelity's formal appointment, shareholders were requested to approve a proposal to change the investment policy of the Company. The change of investment policy was duly approved by shareholders at the extraordinary general meeting ('EGM') held on 1 October 2021. Following shareholder approval, the Company's portfolio was reorganised to permit the implementation of Fidelity's investment policy.

At the heart of Fidelity's strategy is a belief that it can deliver outsized returns in emerging markets through stock selection, driven by fundamental views. Fidelity combines skill, resource and discipline with the aim of generating enhanced risk-adjusted returns.

Change of name

As part of the change of investment management arrangements, shareholders were requested to approve a proposal to change the name of the Company to Fidelity Emerging Markets Limited. The change of name was duly approved by shareholders at the EGM held on 1 October 2021.

Tender Offer

In response to shareholder consultation during 2018 on the level of the Company's share price discount to NAV, the Board announced that a potential tender offer of up to 25% of the Company's shares would be implemented in 2021, if the Company's NAV Total Return over the five years ending 30 June 2021 did not exceed its benchmark Index. As the Company did not produce the necessary performance to outperform its benchmark Index, the Board announced that a tender offer for up to 25% of the Company's shares in issue (excluding any shares held in treasury) ('Tender Offer') would be implemented subject to shareholder approval. The tender price was set at a 2% discount to the prevailing NAV per share. The Tender Offer was subsequently approved by shareholders at the EGM held on 1 October 2021.

The aforementioned Tender Offer had been put in place by the Board to enable shareholders wishing to realise part, or potentially all, of their investment in the Company the opportunity to do so.

Following completion of the Tender Offer on 22 October 2021, a total of 30,366,688 Participating Preference Shares (25% of the Company's issued share capital) were repurchased by the Company for cancellation.

Board composition and succession planning

The Board is mindful of corporate governance best practice and recognises the need to refresh its composition from time to time. I have now served on the Board for over nine years and will duly retire from the Board following the conclusion of the 2022 annual general meeting ('AGM'). I will be succeeded as Chairman by Heather Manners who was newly appointed as a Director of the Company on 5 May 2022. Heather is an award-winning market professional with some 34 years' experience of investment in Asia, mostly recently, and for the past 15 years as the co-founder, CEO and CIO of Prusik Investment Management. A full biography for Heather Manners can be found on page 32.

Sujit Banerji will have served as a Director of the Company for nine years in October 2022 and will also retire following the conclusion of the 2022 AGM.

Russell Edey has also indicated his intention to retire as a Director of the Company in 2023. Having engaged the services of executive head-hunter, our search for his successor, as Chairman of the Audit Committee, is already underway and it is anticipated that a new director will be appointed before the end of 2022 to ensure a smooth handover.

All Directors other than Sujit Banerji and myself are offering themselves for re-election at the forthcoming AGM.

Dividend

A resolution to declare a final dividend of 16 cents per share will be proposed at the AGM of the shareholders of the Company that will be held on Thursday, 8 December 2022. Subject to shareholder approval, the final dividend will be paid on 16 December 2022 to shareholders on the Register of Members on 18 November 2022. The ex-dividend date is 17 November 2022.

Annual General Meeting

This year's AGM will be held on Thursday, 8 December 2022 at 11:00 a.m. at the registered office of the Company, 1st Floor, Les Echelons Court, Les Echelons, South Esplanade, St Peter Port, Guernsey GY1 6JB.

Notice of the AGM, containing full details of the business to be conducted at the meeting, is set out in the Annual Report.

Your attention is also drawn to the Directors' Report within the Annual Report, where resolutions relating to special business are explained.

Electronic proxy voting is now available and shareholders are encouraged to submit voting instructions using the web-based voting facility at www.eproxyappointment.com and www.proxymity.io for institutional shareholders. In order to use electronic proxy voting, shareholders will require their shareholder registration number, control number and pin. If you do not have access to these details please contact the Company's Registrar, Computershare, their contact details can be found in the Annual Report.

Hélène Ploix

Chairman

6 October 2022

Portfolio Managers' Review

Nick Price/Chris Tennant

Portfolio Manager

6 October 2022

Strategic Report

Investment Strategy and Policies

Business and Status

The Company is a closed-ended investment scheme authorised by the Guernsey Financial Services Commission and is listed on the London Stock Exchange.

The Company was incorporated in Guernsey on 7 June 1989 and commenced business on 19 September 1989.

Reviews of the Company's activities are included in the Chairman's Statement and Portfolio Managers' Investment Review.

During the year to 30 June 2022, as set out below, the Company changed its management arrangements, although the Company remains focused on investing in emerging markets. The Directors anticipate that the Company will continue to operate in the same manner during the current financial year following the appointment of Fidelity.

Change of Manager and Investment Manager

The Board has invested considerable time and effort in considering the future direction for the Company in order to best serve the interests of the Company's shareholders as a whole.

With this in mind, the Board conducted an extensive review of the Company's management arrangements and reached the conclusion that Genesis Investment Management LLP should be replaced by FIL Investment Services (UK) Limited as the Company's Manager. This process included consultation with major shareholders.

FIL Investment Services (UK) Limited ('the Manager') was formally appointed on 4 October 2021.

The Manager has delegated the role of Investment Manager to FIL Investments International ('Fidelity International', the 'Investment Manager'). Both the Manager and Investment Manager are part of the FIL Group of companies, collectively 'Fidelity'.

Investment Objective and Policy (for the period from 1 July 2021 to 3 October 2021)

The Company's investment objective is to achieve long- term capital growth from an actively managed portfolio made up primarily of securities and financial instruments providing exposure to emerging market companies, both listed and unlisted.

The Company seeks to identify high-quality companies in emerging markets and invest in them at attractive discounts to their intrinsic value

Following shareholder approval at the EGM of the Company held on 1 October 2021 the Company's investment objective and policy is now as follows:

Investment Objective (for the period 4 October 2021 onwards)

The Company's investment objective is to achieve long-term capital growth from an actively managed portfolio made up primarily of securities and financial instruments providing exposure to emerging market companies, both listed and unlisted.

Investment Policy

The Company seeks to meet its investment objective through investment in a diversified portfolio of equity or equity-linked securities and derivative instruments providing exposure to emerging market companies.

The Manager integrates sustainability analysis into its investment process and promotes environmental and social characteristics in respect of the companies in which it invests.

Investment minimum constraints

At least 80% of the Company's total assets (measured at the time of investment) will be exposed to companies that have their head office in, are listed in or with assets, operations, income or revenues that are predominantly in or derived from emerging markets.

The Company is not subject to any geographical or sector limits, although the Manager will maintain a diversified portfolio of a minimum of 75 holdings (comprised of a mixture of long and short exposures) in companies listed in or operating across at least 15 countries.

Fidelity is not required to seek to ensure that the Company's cash resources are fully invested at all times. Accordingly, there may be times when the Company holds cash or money market instruments pending investment. The Company's net market exposure will not fall below 90% of the Company's net assets save to the extent that the Manager is required to realise cash to fund a tender offer or other return of capital.

Permitted instruments

The Company may invest through equities, index linked securities, contracts for difference (CFD), equity linked and other debt securities, cash deposits, money market instruments, equity related securities, foreign currency exchange forward transactions and other interests including derivative instruments. The Company may invest directly in China A and B Shares and invest in Non- Voting Depository Receipts, American Depositary Receipts, Global Depositary Receipts and Equity Linked Notes. References to "companies" in this investment policy may include operating businesses that are not in corporate form.

Forward transactions and derivatives, including futures, options, swaps and contracts for difference, may be used to enhance portfolio performance as well as for efficient portfolio management and hedging.

The Company may invest in unlisted securities and in other investment funds, subject to the investment restrictions set out below.

Investment Restrictions

The Company will invest and manage its assets with an objective of spreading risk with the following investment restrictions:

Although the Company has no present intention to make any such investments, for so long as required by the Listing Rules, no more than 10% of the Company's total assets (measured at the time of investment) may be invested in other London-listed closed ended funds that do not have stated policies to invest no more than 15% of their total assets in other London-listed closed ended funds.

Leverage and derivatives

The Company may be geared through (i) borrowing of up to 10% of its net asset value and/or (ii) by entering into derivative positions (both long and short) which have the effect of gearing the Company's portfolio, to enhance performance.

Derivatives usage will focus on, but will not be limited to the following investment strategies:

The Company is subject to the following limits in respect of its use of derivatives:

Exposure Definitions

Benchmark Index

The Company's benchmark is the MSCI Emerging Markets (Total Return) Index.

Life of the Company

The Company has committed to hold a continuation vote in 2026 and every five years thereafter. The Company will propose the continuation vote at its annual general meeting in the relevant year and, if the continuation vote is not passed, will thereafter present proposals to shareholders in respect of the future of the Company.

Management

The Company has no employees or premises and the Board is comprised of non-executive Directors. During the year under review, the majority of day-to-day operations and functions of the Company were delegated to GIML and to third party service providers who are subject to the oversight of the Board. There are therefore no disclosures to be made in respect of employees.

During the year under review GIML provided investment and risk management services, JP Morgan Chase Bank was the Custodian and JP Morgan Administration Services (Guernsey) Limited was the Administrator and Company Secretary. The Board regularly reviews the performance and risks of its primary service providers and checks that they have appropriate frameworks in place for the oversight of their internal controls, monitoring and reporting.

With effect from 4 October 2021, the day-to-day operations and functions of the Company previously delegated to GIML will be undertaken by Fidelity.

Principal and Emerging Risks and Uncertainties, Risk Management

In accordance with the AIC Code, the Board has a robust ongoing process for identifying, evaluating and managing the principal risks and uncertainties faced by the Company, including those that could threaten its business model, future performance, solvency or liquidity. The Board, with the assistance of the Alternative Investment Fund Manager (FIL Investment Services (UK) Limited/the "Manager"), has developed a risk matrix which, as part of the risk management and internal controls process, identifies the key existing and emerging risks and uncertainties that the Company faces. The Audit and Risk Committee continues to identify any new emerging risks and take any action necessary to mitigate their potential impact. The risks identified are placed on the Company's risk matrix and graded appropriately. This process, together with the policies and procedures for the mitigation of existing and emerging risks, is updated and reviewed regularly in the form of comprehensive reports considered by the Audit and Risk Committee. The Board determines the nature and extent of any risks it is willing to take in order to achieve its strategic objectives.

The also has responsibility for risk management for the Company. It works with the Board to identify and manage the principal and emerging risks and uncertainties and to ensure that the Board can continue to meet its Corporate Governance obligations.

Key emerging issues that the Board has identified include; rising geopolitical tensions, including contagion of the Ukraine crisis or tensions between China and Taiwan into the wider region or an increase in tensions in the South China Sea; rising inflation and the so-called cost of living crisis impacting demand for UK-listed shares; and climate change, which is one of the most critical emerging issues confronting asset managers and their investors. The Board notes that the Manager monitors these issues, and has integrated macro and ESG considerations, including climate change, into the Company's investment process. The Board will continue to monitor how this may impact the Company as a risk, the main risk being the impact on investment valuations.

The Board considers the following as the principal risks and uncertainties faced by the Company.

Other risks facing the Company include:

Tax and Regulatory Risks

There is a risk of the Company not complying with the regulatory requirements of the Guernsey Financial Services Commission, UK listing rules, corporate governance requirements or local tax requirements that could result in loss of status as an Authorised Closed Ended Investment Scheme, becoming subject to additional tax charges or to exclusion from trading in particular markets.

The Board monitors tax and regulatory changes at each Board meeting and through active engagement with regulators and trade bodies by the Manager.

Operational Risks

The Company relies on a number of third-party service providers, principally the Manager, Registrar, Custodian and Depositary. It is dependent on the effective operation of the Manager's control systems and those of its service providers with regard to the security of the Company's assets, dealing procedures, accounting records and the maintenance of regulatory and legal requirements. The Registrar, Custodian and Depositary are all subject to a risk-based programme of internal audits by the Manager. In addition, service providers' own internal control reports are received by the Board on an annual basis and any concerns are investigated. Risks associated with these service providers is rated as low, but the financial consequences could be serious, including reputational damage to the Company.

Viability Statement

In accordance with provision 35 of the 2019 AIC Code of Corporate Governance the Directors have assessed the prospects of the Company over a longer period than the twelve month period required by the "Going Concern" basis. The Company is an investment fund with the objective of achieving long-term capital growth investing in emerging markets. The Board considers long-term to be at least five years, and accordingly, the Directors believe that five years is an appropriate investment horizon to assess the viability of the Company, although the life of the Company is not intended to be limited to this or any other period. In making an assessment on the viability of the Company, the Board has considered the following:

The Company has assumed for the purposes of the viability statement that the continuation vote in 2026 would be passed.

The Company's performance for the five year reporting period to 30 June 2022 is notably behind the Benchmark Index, with a NAV total return of -27.9%, a share price total return of -30.0% compared to the Benchmark Index total return of -14.9%, but the Board notes the significant impacts of the war in Ukraine, which it believes to be idiosyncratic and unlikely to be repeated in the near term.

The Board regularly reviews the investment policy and considers whether it remains appropriate. The Board has concluded that there is a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the next five years based on the following considerations:

When considering the risk of under-performance, a series of stress tests was carried out including in particular the effects of any substantial future falls in investment value on the ability to maintain dividend payments and repay obligations as and when they arise.

In preparing the Financial Statements, the Directors have considered the impact of climate change, particularly in the context of the climate change risk identified within the ESG Risk in the Annual Report. The Board has also considered the impact of regulatory changes and how this may affect the Company. In addition, the Directors' assessment of the Company's ability to operate in the foreseeable future is included in the Going Concern Statement which is included in the Directors' Report within the Annual Report.

Duty to promote the success of the Company

A director of a company must act in a way he/she considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other things) to:

As an externally managed investment company, the Company has no employees or physical assets. The key stakeholders in the Company are its shareholders, the Manager, the Investment Manager, and other third party service providers.

The Board seeks to ensure high standards of business conduct are adhered to by all of the Company's service providers and that agreed service levels are met.

The Board is responsible for promoting the long-term success of the Company for the benefit of all stakeholders and in particular its shareholders. Although the majority of the day-to-day activities of the Company are delegated to the Manager, Investment Manager, and other third party service providers, the responsibilities of the Board are set out in the schedule of matters reserved for the Board and the relevant terms of reference of its committees, all of which are reviewed regularly by the Board.

To ensure that the Board is able to discharge this duty, the Manager, Investment Manager and other third party service providers are required to provide the Board with regular updates. In addition, Directors, or the Board as a whole, have the authority to seek advice from professional advisers including the Company Secretary and independent external advisers as well as attend any relevant training seminars.

The investment management function is critical to the long- term success of the Company. During the period under review, the Board monitored the performance of GIML and Fidelity against key performance indicators. The Board received updates from GIML and Fidelity on the performance of the Company at each Board meeting with additional performance updates being provided on a monthly basis. In addition to performance updates, the Board received regular updates on the marketing of the Company from both GIML and Fidelity and the Company's brokers. As part of these updates the Board received and considered feedback from its shareholders.

During the period under review, GIML and Fidelity and the Company's corporate brokers held periodic meetings with the Company's major shareholders to discuss aspects of the

Company's positioning, performance and outlook. Members of the Board were available to attend meetings with shareholders upon request.

The Board also received updates from its key third party service providers at each Board meeting, the main purpose of which is to ensure that the services provided to the Company remain in line with expectations and are to the benefit of its shareholders.

The Board also considered the impact of the Company's decisions on the environment and the community. The Board received updates on ESG matters from GIML and Fidelity and discussed how ESG factors are taken into account by GIML and Fidelity as part of its selection process of investee companies.

The Board recognises the need for good communications with its shareholders and is committed to listening to their views. The primary medium through which the Company communicates with shareholders is through its Annual and Half Year Financial Reports. Monthly factsheets are also produced. Company related announcements are released via the Regulatory News Service ('RNS') to the London Stock Exchange. All of the aforementioned information is available on the Company's website www.fidelity.co.uk/emergingmarkets.

In addition to the annual general meeting, all shareholders are invited to attend the Company's annual information meeting. This provides shareholders with the opportunity to interact directly with the Board.

The Board can be reached via either the Investment Manager or the Company Secretary at the addresses within the Annual Report.

Examples of the principal decisions taken by the Board during the year under review (and post year-end) are as follows:

Change of Manager and Investment Manager - following the underperformance of the Company against its benchmark over five years, the Board decided to undertake a thorough review of its investment management arrangements. In June 2021, the Company's brokers were instructed to invite tenders to provide investment management services to the Company. Following a competitive tender process, the Board announced that it had selected FIL Investments Services (UK) Limited as Manager of the Company, with the investment management of the Company to be undertaken by FIL Investments International, collectively 'Fidelity'. Fidelity has a depth of expertise in emerging markets, and a proven track record of managing and growing investment trusts. The Board believes that the Company will benefit considerably from Fidelity's brand, and its ability to attract a larger range of shareholders with its significant and broad ranging marketing resource. In addition, the appointment of Fidelity brings a significant saving in ongoing management fees from 0.90 per cent to 0.60 per cent. of net asset value.

The activities and processes performed by Fidelity following its appointment on 4 October 2022 are expected to be broadly consistent those provided by GIML with the addition of activities relating to derivatives trading.

Covid-19 - The Board continues to review emerging risks that could have a potential impact on the operational capability of the Investment Manager and the Company's other key service providers. During the year under review, the Board received updates from GIML (up until their resignation) and Fidelity and other key service providers confirming that they continued to service the Company in line with service level agreements and have suitable arrangements in place to ensure that they can continue to provide their services to the Company during the ongoing pandemic.

Succession Planning - as previously detailed in the Chairman's Statement, and in the Nomination Committee's Report within the Annual Report, both Helene Ploix and Sujit Banerji will retire as Directors of the Company following the conclusion of the 2022 AGM. Russell Edey has also indicated his intention to retire from the Board in 2023. Having engaged the services of executive head-hunter, our search for his successor, as Chairman of the Audit Committee, is already underway and it is anticipated that a new director will be appointed before the end of 2022 to ensure a smooth handover.

Marketing - marketing has continued in support of widening the Company's shareholder base. The Board agreed that the ongoing marketing of the Company was a key consideration of the tender process, and it is hoped that the Company will benefit considerably from Fidelity's brand, and its marketing resources.

The Board is committed to the long term success of the Company for the benefit of its shareholders, however in doing so it also has regard to the impact of its actions on all of its stakeholders. The Board takes into account section 172 considerations in all material decisions of the Company.

Diversity

The Company's policy on board diversity is included in the Nomination Committee's Report as contained in the Annual Report.

Environmental, Social and Governance Factors

During the year under review, the Fidelity investment team assessed ESG factors, including climate-related risks and opportunities, in the context of materiality, mindful of the Sustainability Accounting Standards Board framework. Sector Specialists are responsible for assessing the materiality and relevance of ESG factors in their respective sectors and providing an ESG framework to the team. Each Portfolio Manager ('PM') is individually responsible for the integration of the relevant ESG factors into their investment analysis of a company, before investing in a company and throughout the investment period.

Fidelity's Annual Stewardship Report 2021 (formally the Annual ESG Report) can be found on their website, www.fidelity.co.uk/responsible-investing. The Stewardship report contains more information on ESG integration in the portfolio as well as Fidelity's approach to stewardship and a qualitative review of the top ten portfolio positions including the company-level ESG metrics.

Similarly, Fidelity is committed to ESG and incorporates ESG factors into its investment process. Details can be found at www.fidelity.co.uk/responsible-investing.

Signed on behalf of the Board

Hélène Ploix

6 October 2022

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Annual Report in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards as adopted by the European Union to meet the requirements of applicable law and regulations.

Under company law the Directors must not approve the financial statements unless they are satisfied that taken as a whole, they give a true and fair view of the state of affairs of the Company and of its profit or loss for that period. In preparing these financial statements, the Directors are required to:

The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies (Guernsey) Law, 2008. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. The work carried out by the auditor does not include consideration of the maintenance and integrity of the website and, accordingly , the auditor accepts no responsibility for any changes that have occurred to the accounts when they are presented on the website.

The Directors who hold office at the date of approval of this Directors' Report confirm that so far as they are aware, there is no relevant audit information of which the Company's auditor is unaware, and that each Director has taken all the steps he/she ought to have taken as a Director to make himself or herself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Responsibility statement of the Directors in respect of the Annual Report

The Directors confirm that to the best of their knowledge that:

The Directors consider the Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy.

There were no instances where the Company is required to make disclosures in respect of Listing Rule 9.8.4 during the financial period under review.

For and on behalf of the Board

Hélène Ploix

6 October 2022

Statement of Financial Position

as at 30 June 2022

The Financial Statements were approved by the Board of Directors of the Company on 6 October 2022 and signed on its behalf by:

Hélène Ploix                             Russell Edey

Statement of Comprehensive Income Statement

for the year ended 30 June 2022

The total column of this statement represents the Company's Statement of Profit or Loss and Other Comprehensive Income prepared in accordance with IFRS. The supplementary information on the allocation between the revenue account and capital reserve is presented under guidance published by the AIC.

The Company does not have any other comprehensive income. Accordingly the profit/(loss) after taxation for the year is also the total comprehensive income for the year.

Statement of Changes in Equity

for the year ended 30 June 2022

Statement of Cash Flows

for the year ended 30 June 2022

The cash and cash equivalents comprises cash balances. As at 30 June 2022 there are no cash equivalents (2021: nil).

Notes to the Financial Statements

for the year ended 30 June 2022

1.   General

Fidelity Emerging Markets Limited (formerly Genesis Emerging Markets Fund Limited) (the 'Company') was incorporated in Guernsey on 7 June 1989 and commenced activities on 19 September 1989. The Company is an Authorised Closed-Ended Investment Scheme as defined by the Authorised Closed-Ended Investment Schemes Rules (2008) (and, as such, is subject to ongoing supervision by the Guernsey Financial Services Commission). The Company is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.

The Company's registered office is 1st Floor, Les Echelons Court, Les Echelons, South Esplanade, St. Peter Port, Guernsey, GY1 6JB, Channel Islands.

These financial statements were approved by the Board of Directors and authorised for issue on 6 October 2022.

2.   Summary of Significant Accounting Policies

(a)  Basis of Preparation

The principal accounting policies applied in the preparation of these financial statements on a going concern basis are set out below. These policies have been consistently applied to all years presented, unless otherwise stated. The Company's financial statements, which give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company, have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ('IFRS'), which comprise standards and interpretations approved by the International Accounting Standards Board ('IASB'), the IFRS Interpretations Committee and interpretations approved by the International Accounting Standards Committee ('IASC') that remain in effect and the Companies (Guernsey) Law, 2008. The financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities at fair value through profit or loss.

Going concern

The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least twelve months from the date of approval of these financial statements. Accordingly, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing these financial statements. This conclusion also takes into account the Board's assessment of the continuing risks arising from Covid-19 and the current tension between Russia and Ukraine.

Significant accounting estimates, assumptions and judgements

The preparation of financial statements in conformity with IFRS may require management to make critical accounting judgements, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from the estimates.

Valuations use observable data to the extent practicable. Changes in any assumptions could affect the reported fair value of the financial instruments. The determination of what constitutes observable requires significant judgement by the Company. The Company considers observable data to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

Adoption of new and revised International Financial Reporting Standards

The accounting policies adopted are consistent with those of the previous financial year, other than those stated below. Their adoption has not had any material impact on the disclosures or the amounts reported in these financial statements.

At the date of authorisation of these financial statements, the following revised International Accounting Standards (IAS) were in issue but not yet effective:

The Directors do not expect that the adoption of the above standards will have a material impact on the financial statements of the Company in future periods.

(b) Financial Instruments

Classification

(i) Assets

The Company classifies its investments based on both the Company's business model for managing those financial assets and the contractual cash flow characteristics of the financial assets. The portfolio of financial assets is managed and performance is evaluated on a fair value basis. The Company is primarily focused on fair value information and uses that information to assess the assets' performance and to make decisions. The Company has not taken the option to irrevocably designate any equity securities as fair value through other comprehensive income. All investments are measured at fair value through profit or loss. The Company's investments are included in the Financial assets at fair value through profit and loss line in the Statement of Financial Position.

(ii) Liabilities

Derivative contracts that have a negative fair value are presented as derivative financial liabilities at fair value through profit or loss. As such, the Company classifies all of its investment portfolio as financial assets or liabilities at fair value through profit or loss. The Company's policy requires the Manager and the Board of Directors to evaluate the information about these financial assets and liabilities on a fair value basis together with other related financial information.

Recognition/derecognition

The Company recognises a financial asset or a financial liability when, and only when, it becomes a party to the contractual provisions of the instrument.

Regular-way purchases and sales of investments are recognised on their trade date, the date on which the Company commits to purchase or sell the investment. Investments are derecognised when the rights to cash flows from the investments have expired or the Company has transferred substantially all risks and rewards of ownership. The Company derecognises a financial liability when the obligation under the liability is discharged, cancelled or expires.

Measurement

Financial assets and financial liabilities are measured initially at fair value being the transaction price. Transaction costs incurred to acquire financial assets at fair value through profit or loss are expensed in the Statement of Comprehensive Income. Transaction costs include fees and commissions paid to agents, advisers, brokers and dealers. Subsequent to initial recognition, all financial assets and financial liabilities at fair value through profit or loss are measured at fair value. Gains and losses arising from changes in the fair value of the 'financial assets or financial liabilities at fair value through profit or loss' category are presented in the Statement of Comprehensive Income in the year in which they arise.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Securities listed on active markets are valued based on their last traded price for valuation and financial statement purposes.

In the normal course of business, the Company may utilise Participatory notes ('P Notes') to gain access to markets that otherwise would not be allowable as a foreign investor. P Notes are issued by banks or broker-dealers and allow the Company to gain exposure to local shares in foreign markets. They are valued based on the last price of the underlying equity at the valuation date.

The Company's investment in other funds ('Investee Funds') are subject to the terms and conditions of the respective Investee Fund's offering documentation. The investments in Investee Funds are primarily valued based on the latest available redemption price for such units in each Investee Fund, as determined by the Investee Funds' administrators. The Company reviews the details of the reported information obtained for the Investee Funds and considers the liquidity of the Investee Fund or its underlying investments, the value date of the net asset value provided, any restrictions on redemptions and the basis of the Investee Funds' accounting. If necessary, the Company makes adjustments to the net asset value of the Investee Funds to obtain the best estimate of fair value.

The Company may make adjustments to the value of a security if it has been materially affected by events occurring before the Company's NAV calculation but after the close of the primary markets on which the security is traded. The Company may also make adjustment to the value of its investments if reliable market quotations are unavailable due to infrequent trading or if trading in a particular security was halted during the day and did not resume prior to the Company's NAV calculation.

In preparing these financial statements the Directors have considered the impact of climate change risk as a principal and as an emerging risk as set out on pages 25 and 27, and have concluded that there was no further impact of climate change to be taken into account as the investments are valued based on market pricing. In line with IFRS 13 - "Fair Value Measurement"investments are valued at fair value, which for the Company are quoted bid prices for investments in active markets at the statement of financial position date. Investments which are unlisted are priced using market-based valuation approaches. All investments therefore reflect the market participants view of climate change risk on the investments held by the Company.

Derivative Instruments

When appropriate, permitted transactions in derivative instruments are used. Derivative transactions into which the Company may enter include long and short contracts for difference ("CFDs"), futures and options.

Under IFRS 9 derivatives are classified at fair value through profit or loss - held for trading, and are initially accounted and measured at fair value on the date the derivative contract is entered into and subsequently measured at fair value as follows:

Where transactions are used to protect or enhance income, if the circumstances support this, the income and expenses derived are included in derivative income in the revenue column of the Statement of Comprehensive Income. Where such transactions are used to protect or enhance capital, if the circumstances support this, the income and expenses derived are included in net gains on derivative instruments in the capital column of the Statement of Comprehensive Income. Any positions on such transactions open at the reporting date are reflected on the Statement of Financial Position at their fair value within current assets or current liabilities.

Amortised cost measurement

Cash and cash equivalents, amounts held at futures clearing houses and brokers and other receivables are carried at amortised cost using the effective interest method less any allowance for impairment. Gains and losses are recognised in profit or loss when the receivables are derecognised or impaired, as well as through the amortisation process.

Capital gains tax payable and other payables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, as well as through the amortisation of these liabilities.

(C) Foreign Currency Translation

Functional and Presentation Currency

The books and records of the Company are maintained in the currency of the primary economic environment in which it operates (its functional currency). The Directors have considered the primary economic environment of the Company and considered the currency in which the original capital was raised, past distributions have been made and ultimately the currency in which capital would be returned on a break up basis. The Directors have also considered the currency to which underlying investments are exposed.

On balance, the Directors believe that US dollars best represent the functional currency of the Company. The financial statements, results and financial position of the Company are also expressed in US dollars which is the presentation currency of the Company and have been rounded to the nearest thousand unless otherwise stated.

Transactions and Balances

Transactions in currencies other than US dollars are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items and non-monetary assets and liabilities that are fair valued and are denominated in foreign currencies are retranslated at rates prevailing at the end of the reporting period. Gains and losses arising on translation are included in the Statement of Comprehensive Income for the year. Foreign exchange gains and losses relating to cash and cash equivalents are presented in the Statement of Comprehensive Income within 'Net foreign exchange gains or losses'. Foreign exchange gains and losses relating to financial assets at fair value through profit or loss and derivatives are presented in the Statement of Comprehensive Income within 'Net gains or losses on investments' and 'Net gains on derivative instruments' respectively.

(d) Recognition of Dividend and Interest Income

Dividends arising on the Company's investments are accounted for on an ex-dividend basis, gross of applicable withholding taxes. Deposit interest and interest on short-term paper is accrued on a day-to-day basis using the effective interest method. Dividends and interest income are recognised in the Statement of Comprehensive Income.

(e) Income from Derivatives

Derivative instrument income received from dividends on long (or payable from short) CFDs are accounted for on the date on which the right to receive the payment is established, normally the ex-dividend date. The amount net of tax is credited (or charged) to the revenue column of the Statement of Comprehensive Income.

Interest received on CFDs is accounted for on an accruals basis and credited to the revenue column of the Statement of Comprehensive Income. Interest received on CFDs represent the finance costs calculated by reference to the notional value of the CFDs.

(f) finance cost  

Finance costs comprise bank charges and finance costs paid on CFDs, which are accounted for on an accruals basis, and dividends paid on short CFDs, which are accounted for on the date on which the obligation to incur the cost is established, normally the ex- dividend date. Finance costs are charged in full to the revenue column of the Statement of Comprehensive Income.

(g) Dividend Distribution

Dividend distributions are at the discretion of the Board of Directors. A dividend is recognised as a liability in the period in which it is approved at the Annual General Meeting of the shareholders and is recognised in the Statement of Changes in Equity.

(h) Cash and Cash Equivalents

Cash comprises current deposits with banks. Cash equivalents are short-term highly liquid investments that are readily convertible to known amounts of cash, are subject to an insignificant risk of changes in value, and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.

Bank overdrafts are accounted for as short term liabilities on the Statement of Financial Position and the interest expense is recorded using the effective interest rate method. Bank overdrafts are classified as other financial liabilities.

(i) Amounts held at futures clearing houses and brokers

Cash deposits are held in segregated accounts on behalf of brokers as collateral against open derivative contracts. These are carried at amortised cost.

(j) Due To and Due From Brokers

Amounts due from/to brokers are recognised initially at fair value and subsequently measured at amortised cost. At each reporting date, the Company shall measure the loss allowance on amounts due from broker at an amount equal to the lifetime expected credit losses if the credit risk has increased significantly since initial recognition. If, at the reporting date, the credit risk has not increased significantly since initial recognition, the Company shall measure the loss allowance at an amount equal to 12-month expected credit losses. Significant financial difficulties of the broker, probability that the broker will enter bankruptcy or financial reorganisation, and default in payments are all considered indicators that amounts may be credit impaired. If the credit risk increases to the point that

it is considered to be credit impaired, interest income will be calculated based on the gross carrying amount adjusted for the loss allowance. A significant increase in credit risk is defined by management as any contractual payment which is more than 30 days past due. Any contractual payment which is more than 90 days past due is considered credit impaired.

(k) Segment Reporting

Operating Segments are reported in a manner consistent with the internal reporting used by the chief operating decision maker ('CODM'). The CODM, who is responsible for allocation of resources and assisting performance of the operating segments, has been identified as the Directors of the Company, as the Directors are ultimately responsible for investment decisions.

The Company is engaged in a single segment business and, therefore, no segmental reporting is provided.

(l) Expenses

All expenses are accounted for on an accruals basis and are charged to the Statement of Comprehensive Income.

Expenses are allocated wholly to revenue with the following exceptions:

(m) Taxation

The Company currently incurs withholding taxes imposed by certain countries on investment income and capital gains taxes upon realisation of its investments. Such income or gains are recorded gross of withholding taxes and capital gains taxes in the Statement of Comprehensive Income. Withholding taxes and capital gains taxes are shown as separate items in the Statement of Comprehensive Income.

In accordance with IAS 12, 'Income taxes', the Company is required to recognise a tax liability when it is probable that the tax laws of foreign countries require a tax liability to be assessed on the Company's capital gains sourced from such foreign country, assuming the relevant taxing authorities have full knowledge of all the facts and circumstances. The tax liability is then measured at the amount

expected to be paid to the relevant taxation authorities, using the tax laws and rates that have been enacted or substantively enacted by the end of the reporting period. There is sometimes uncertainty about the way enacted tax law is applied to offshore investment funds. This creates uncertainty about whether or not a tax liability will ultimately be paid by the Company. Therefore, when measuring any uncertain tax liabilities, management considers all of the relevant facts and circumstances available at the time that could influence the likelihood of payment, including any formal or informal practices of the relevant tax authorities.

(n) Share Capital

Participating Preference Shares have no fixed redemption date and do not automatically participate in the net income of the Company but are entitled to receive dividends. They are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds net of tax.

(o)  Purchase of Own Shares

The cost of purchases of the Company's own shares is shown as a reduction in Shareholders' Funds. The Company's net asset value and return per Participating Preference Share are calculated using the number of shares outstanding after adjusting for purchases.

(p) Securities Lending

During the year ended 30 June 2022, the Company was engaged in securities lending with third party investment companies. As of 30 June 2022, the Company is no longer engaged in securities lending activities. JPMorgan Chase Bank N.A. acted as the securities lending agent (the 'Lending Agent') providing the securities lending services, record keeping services and served as securities custodian, maintaining custody of all Company-owned listed investments. Under the terms of its lending agreement, the Company received compensation in the form of fees, 20% of which are commissions payable to the Lending Agent for their services. The Company received dividends on the securities loaned and any gains and losses that occurred during the term of the loan were accounted for by the Company. Income earned from the securities lending agreement is recognised on the Statement of Comprehensive Income on an accruals basis and shown net of the commissions paid to the Lending Agent.

(q) Critical Accounting Estimates and Assumptions

As stated in Note 2(a) Basis of Preparation, the preparation of financial statements, in conformity with IFRS, requires the use of certain critical accounting estimates. It also requires the Board of Directors to exercise its judgment in the process of applying the Company's accounting policies. For example, the Company may, from time to time, hold financial instruments that are not quoted in active markets, such as minority holdings in investment and private equity companies. Fair values of such instruments are determined using different valuation techniques validated and periodically reviewed by the Board of Directors.

(r) Capital reserve

The following are transferred to capital reserve:

3.   Earnings/(loss) Per Participating Preference Share

4.   Capital Reserve

Share Premium

Share Premium is the amount by which the value of shares subscribed for exceeded their nominal value at the date of issue.

The capital reserve balance at 30 June 2022 includes unrealised losses on the revaluation of financial assets at fair value through profit or loss of $180,459,000 (2021: gains of $495,679,000) as detailed in Note 10 above.

5.   Transactions with the Managers and Related Parties

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions. Related parties also include key management personnel and entities under common control of the Manager.

(a) GIML's remuneration and terms of appointment

Under the terms of its Management Agreement, GIML was entitled to receive a management fee from the Company, payable monthly in arrears equal to 0.90% (2021: 0.90%) per annum, calculated and accrued on the Net Asset Value of the Company as at each weekly Valuation Day, except for investments in Investee Funds, where GIML will absorbed the expenses of the management of such funds to a maximum of 1% per annum of the value of the Company's holding in the relevant fund at the relevant time. Genesis related investment companies, do not pay a separate management fee to GIML. The management fee for the financial year ended 30 June 2022 was $4,636,000 (2021: $13,950,000).

GIML ceased to act as manager to the Company on 4 October 2021, however, in accordance with the notice of termination and under the terms of the management agreement, it received a management fee until 31 October 2021.

(b) Fidelity's remuneration and terms of appointment

On 4 October 2021, FIL Investment Services (UK) Limited was appointed as Manager ('the Manager') to the Company and has delegated the role of Investment Manager to FIL Investments International ('the Investment Manager'), both the Manager and Investment Manager are part of the FIL Group of companies, ('Fidelity'). Under the Investment Management Agreement ('the IMA'), the Manager is entitled to receive a Management Fee of 0.60% per annum of the Net Asset Value of the Company.

The Management Fee is calculated and charged daily and payable monthly in arrears.

Under the terms of the IMA, the Manager has waived its entitlement to receive a Management Fee for a period of nine months from its date of appointment.

No Management Fee is payable by the Company in respect of the Company's holdings in collective investment schemes or investment trusts managed or advised by the Manager.

(c) Administration fees

The Administrator is entitled to receive a fee, payable monthly, based on the Net Asset Value of the Company and time incurred. Administration fees for the year were $359,000 and charged by JP Morgan Administration Services (Guernsey) Limited (2021: $330,000).

(d) Custodian fee

Under the Custodian Agreement, the Custodian to the Company is entitled to receive a fee payable monthly, based on the Net Asset Value of the Company. All custody services are performed by JP Morgan Chase Bank.

The Company also reimburses the charges and expenses of other organisations with whom securities are held. The total of all Custodian fees for the year represented approximately 0.08% (2021: 0.05%) per annum of the average Net Assets of the Company. Custodian fees for the year were $1,002,000 (2021: $925,000).

(e) Securities lending fees

During the year ended 30 June 2022, the Company was engaged in securities lending. As of 30 June 2022, the Company is no longer engaged in securities lending activities. The Company generated gross income of $47,000 (2021: $41,000) from securities lending transactions during the year. Commissions amounting to $9,000 (2021: $8,000) were paid to JPMorgan Chase Bank N.A. during the year in respect of these transactions of which none were outstanding at the year end.

(f) Directors' fees and expenses

Included in Directors' fees and expenses for the year of $282,000 (2021: $313,000) are Directors' fees and also travelling, hotel and other expenses which the Directors are entitled to when properly incurred by them in travelling to, attending and returning from meetings and while on other business of the Company.

Directors' related party interests are stated on page 37 as part of the Directors' Remuneration Report.

There were no transactions between the Company and such related parties during the year and there were no outstanding balances between these entities at 30 June 2022.

6.   Dividends Paid to Shareholders

The Directors have proposed the payment of a dividend for the year ended 30 June 2022 of 16.0¢ per Participating Preference Share which is subject to approval by shareholders at the Annual General Meeting on 8 December 2022 and has not been included as a liability in these financial statements. The dividend will be paid on 16 December 2022 to shareholders on the register at the close of business on 18 November 2022 (ex-dividend date 17 November 2022).

7.   Subsequent events

No significant events have occurred since the end of the reporting date which would impact on the financial position of the Company disclosed in the Statement of Financial Position as at 30 June 2022 or on the financial performance and cash flows of the Company for the year ended on that date.

8.   Annual Results

This Annual Results announcement does not constitute the Company's statutory accounts for the years ended 30 June 2022 and 30 June 2021 but is derived from those accounts. Statutory accounts for the year ended 30 June 2021 have been delivered to the Guernsey Financial Services Commission. The statutory accounts for the year ended 30 June 2022 and the year ended 30 June 2021 both received an audit report which was unqualified and did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report.

9.   Availability of Annual Report

A copy of the Annual Report will shortly be submitted to the National Storage Mechanism and will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

A copy of the Annual Report will also be available for download from the Company's website www.fidelity.co.uk/emergingmarkets

For further information, please contact:

Natalia De Sousa

FIL Investments International

01737 837846

J.P. Morgan Administration Services (Guernsey) Limited

Company Secretary

01481758 620

6 October 2022

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