City of London Investment Group Plc Annual Report 2008 1
city of london
i n v e s t m e n t g r o u p p l c
A N N U A L R E P O R T & A C C O U N T S 
2009
L O N D O N P H I L A D E L P H I A S I N G A P O R E D U B A I L O N D O N P H I L A D E L P H I A S I N G A P O R E D U B A I
London office
77 Gracechurch Street
London
EC3V 0AS
United Kingdom
Telephone: + 44 (0) 207 711 0771
Facsimile: + 44 (0) 207 711 0772
US office
The Barn
1125 Airport Road
Coatesville, PA 19320
United States
Telephone: + 1 610 380 2110
Facsimile: + 1 610 380 2116
Singapore office
20 Collyer Quay
10-04 T ung Centre
Singapore 049319
Telephone: + 65 6236 9136
Facsimile: + 65 6532 3997
Dubai office
Unit 2, 2nd Floor
The Gate Village Building 1
Dubai International Financial Centre
PO Box 506695
Dubai
United Arab Emirates
Telephone: + 971 (0)4 423 1780
Facsimile: + 971 (0)4 437 0510
www.citlon.co.uk
CITY OF LONDON INVESTMENT GROUP PLC  ANNUAL REPORT & ACCOUNTS 2009
L O N D O N P H I L A D E L P H I A S I N G A P O R E D U B A I L O N D O N P H I L A D E L P H I A S I N G A P O R E D U B A I City of London Investment Group Plc is a
leading emerging market and natural resource
asset management group, specialising in the
provision of investment products and services 
to institutional clients. City of London 
operates its business from offices in London, 
the US, Singapore and Dubai.
Highlights 1
City of London at a glance 2
Chairman’s statement 4
Chief Executive Officer’s review 8
Financial review 14
Board of directors 18
Officers, Board Committees and
professional advisers 20
Report of the directors 21
Statement of directors’ 
responsibilities 25
Independent auditors’ report 26
Consolidated income statement 28
Consolidated and Company
balance sheet 29
Consolidated and Company statement
of changes in shareholders’ equity 30
Consolidated and Company
cash flow statement 31
Notes to the financial statements 32
Notice of Annual General Meeting 48
Notes to the Notice of Annual
General Meeting 50
Contents
Designed and produced by fourthquarter Printed by SV.two •
Funds under management at 31st May 2009 were
US$3.5 billion (2008: US$4.7 billion), a decline of
26% compared to a fall in the benchmark emerging
market index (MXEF) of 36%
•
Funds under management at 31st August 2009 were
US$4.0 billion, a rise of 13% since the financial year
end compared to a rise of 9% in the MXEF
•
Unprecedented market volatility during the period
with the MXEF falling by some 70% to its low before
recovering significantly by our year end
•
Profit before tax down 50% to £5.4 million
(2008: £10.7 million)
•
Basic earnings per share down 45% to 16.1p (2008: 29.3p)
•
Recommended final dividend of 10p per share
(2008: 13.5p), payable on 20th November 2009 to
shareholders on the register on 30th October 2009,
making a total for the year of 15p (2008: 19.5p)
•
Good progress made on diversifying the Group’s
product offering with the award of a first mandate to
invest in closed end funds in developed markets and
the launch, post period end, of a fund investing
directly in Asia ex-Japan equities
Highlights
“We believe that leveraging our expertise in closed end funds and global
markets represents a risk-managed route to enhancing the quality and
stability of the Group’s earnings and is a strategy which plays to our
proven strengths.”
Andrew Davison, Chairman
“In my opinion, what we should be attempting to do is to reward clients
(who pay the bills) with superior returns, our shareholders (who own the
business) with significant dividends and capital growth, and our employees
(who manage the business) with relative security and participation in the
firm’s success. If we can continue to achieve these three goals relatively
fairly I would hope that we will be one of the survivors as many parts
of our industry are restructured.”
Barry Olliff, Chief Executive Officer
City of London Investment Group Plc Annual Report 2009 1
05 06 07 08 09
1,558
2,751
3,793 
4,706
3,500
Funds under management US$m
05 06 07 08 09
Pre-tax profit £m
2.1
4.8
7.3
10.7
5.4 2 City of London Investment Group Plc  Annual Report 2009
United Kingdom
The London office, our first,
has been based in the City of
London since 1991. In London
we undertake investment
management for our clients
and research into our global
markets from the European
time zone.
1. Investment performance drives our business
2. T echnology leverages our capabilities
3. Focus on profits, margins, costs
4. Aversion to risk in the management 
of our business
5. 1-4 above create opportunities for further growth
6. CoL differentiation and diversification
City of London’s operating
philosophy can best be represented
by the six key drivers:
Client type
As a percentage of total assets as at 31st May 2009
Other Institutions 11%
Retail 1%
Foundation 26%
Endowment 24%
Pension 38% City of London Investment Group Plc  Annual Report 2009 3
USA
Our second office was established
near Philadelphia in the United
States in 1995 to better service the
growing client base in North
America and to enable us to
provide investment management
from the Americas time zone.
Dubai
In 2008, we opened our fourth
office, in Dubai. The office is in
a prime location in the Dubai
International Financial Centre
and allows us to access investment
opportunities in the region as
well as to increase the Group’s
visibility with funds in the area.
Singapore
The third office, to cover 
Far East emerging markets in real
time, opened in central Singapore
in 2000, thus positioning the
Group to cover our worldwide
target investment markets 24
hours a day.
At a glance The emerging markets in
which the Group
principally invests declined
significantly during the
year ended 31st May 2009
but have staged a
substantial recovery in the
period since. I am pleased
to report that our
investment performance
was resilient during the
last financial year as our
markets fell, but also has
provided clients with
outperformance of
benchmarks during their
recent recovery.
From the end of May 2008 to the end of
May 2009, the MSCI Emerging Markets
Index (MXEF) fell by 36%. Our funds
under management (FuM) declined by
26% over the same period to end the
year at US$3.5 billion, or £2.2 billion,
(2008: US$4.7 billion or £2.4 billion).
Since our year end, the MXEF has risen
by 9% to the end of August while City
of London’s FuM have increased by 13%
to US$4.0 billion, or £2.4 billion.
The period end comparisons to MXEF
mask considerable volatility in emerging
markets during the year with the index at
the end of May 2009 being some 70%
above the lows in October 2008. Volatility
is not new to us, and our investment
model has been honed over our history
in an attempt to provide clients with
outperformance against benchmarks in
both falling and rising markets. Indeed,
during the almost unprecedented volatility
of emerging markets over the last two
years, the Group has added significant
new FuM from both existing and new
clients as recognition of the virtues of
our approach has increased.
Results
Fee income, predominantly US dollar
denominated, for the year to 31st May
2009 fell by 19% to £20.2 million
(2008: £24.9 million) reflecting the
significantly lower FuM resulting from
the falls in emerging markets during the
second and third quarters but benefitting
from the relative weakness of sterling
during most of the period. 
Profit before profit share, interest and
similar income, impairment charges and
tax declined by 41% to £8.6 million
(2008: £14.5 million). Pre-tax profit
declined by almost 50% to £5.4 million
(2008: £10.7 million), after £2.8 million
of profit related staff payments (2008:
£4.7 million), reduced interest receivable
of £0.1 million (2008: £0.4 million) and
a £0.2 million loss on liquidation of seed
investments (2008: gain of £0.4 million).
After a reduced tax charge of £1.5
million, representing 29% of pre-tax
profits (2008: £3.6 million representing
33% of pre-tax profits), basic earnings
per share were 16.1p (2008: 29.3p), a
decline of 45%. Diluted earnings per
share were 15.0p (2008: 26.0p).
The Group ended its financial year with
cash balances of £4.7 million (2008: £5.5
million) and no borrowings (2008: same).
Dividends
Shareholders will be aware that City of
London’s dividend policy is based on
paying dividends that are covered
approximately one and a half times by
full year earnings per share. Although the
Board has no plans to change this policy,
a temporary reduction in earnings cover
has been applied this year in determining
the level of dividends. This is a reflection
of the exceptional market conditions, our
expected strong cash position and the
recovery in our markets and FuM since
our year end. As a consequence, the
Board is recommending a final dividend
of 10p per share (2008: 13.5p), making 
a total for the year of 15p (2008: 19.5p),
covered 1.06 times by earnings per share
(2008: 1.50 times). The final dividend
will be paid on 20th November 2009 
to shareholders on the register on 
30th October 2009.
Operational highlights
The Group took the decline in the
markets as an opportunity and
maintained its focus on organic growth,
both in terms of new products and
geographical expansion of the client base.
We made good progress on both fronts.
In the US, we received our first mandate
– of some US$100 million - to invest in
developed markets via closed end funds
and recruited a fund manager to support
Chairman’s statement
4 City of London Investment Group Plc Annual Report 2009 City of London Investment Group Plc Annual Report 2009 5
this new product area. In the UK, shortly
after the year end on 1st July, we launched
the Asian Value & Growth fund (a spoke
of the World Markets Umbrella Fund),
which will invest directly in equities in
Emerging Asia. Again, a senior fund
manager specialising in Asian investment
was appointed to provide the necessary
expertise for this product, which is
currently being marketed to UK
institutional investors before roll-out, once
a track record has been established, to the
Group’s client base in North America.
Towards the end of 2008 a marketing
manager was appointed to implement
our decision to bring our US marketing
in-house, and ultimately therefore to
avoid the commissions which we have
historically paid to North Bridge Capital
who have served us well since we started
the US marketing activity. He will be
responsible for developing direct
relationships with the consultant industry
which advises institutional investors.
These developments are reported in 
more detail in the Chief Executive
Officer’s review.
Outlook
From the lows recorded following the
collapse of Lehman Brothers in
September 2008, emerging markets
recovered strongly to our financial year
end. The recovery has continued into our
new financial year as investors recognised
that the prospects for many emerging
markets are better, in both the short and
longer term, than those for developed
economies. This is not to say that we
believe there will be no further volatility
but we anticipate that the very
pronounced troughs and peaks of the
last year will be moderated.
The comparative attractions of emerging
markets for our core institutional clients
has led, and is still leading, to the
commitment of new money to the asset
class as evidenced by the outstanding
commitments to be funded in excess of
US$500 million, which will benefit FuM
in the current year. In addition, investors
are becoming receptive to increased
weightings in the natural resource sector
following the protracted period when
they were out of favour.
We plan to take advantage of these
trends by continuing to diversify our
product offering with an increased focus
on natural resources and the launch of
both the Asia Value & Growth fund
(investing directly in Asian equities 
ex-Japan) and the Emerging Markets
Value & Growth fund (also investing
directly in equities). Additionally, as
noted above, we have been mandated to
manage a new global closed end funds
account. We believe that this leveraging
of our expertise in emerging markets and
in closed end funds represents a risk-
managed route to enhancing the quality
and stability of the Group’s earnings 
and is a strategy which plays to our
proven strengths. 
Andrew Davison
Chairman
10th September 2009 At City of London, we focus not on gathering assets, but 
on building products that reflect our expertise. Initially, and
for many years since the firm was founded, that expertise
was very specific to closed end funds which offered emerging
markets exposure. 
This was subsequently complemented by research into the underlying equities,
both via natural resources and via country specific emerging markets stocks,
which in turn spawned regional and global emerging market equity funds. Most
recently, we have applied our unrivalled knowledge of closed end funds around
the world to the development of a global (ex US) closed end fund product.
So today, while we remain both proud and protective of our “boutique” status,
we offer a range of products which are defined by the twin pillars of our
expertise: emerging markets, and closed end funds.
6 City of London Investment Group Plc  Annual Report 2009 Expertise
City of London Investment Group Plc  Annual Report 2009 7 Chief Executive Officer’s review
Extreme emotional behaviour 
I have reproduced on the left a paragraph
from my review at the time of our
Interim Report, not just because the
markets have appreciated significantly
from then, but rather to demonstrate yet
again the extreme emotional behaviour
demonstrated by our asset class.
Placed in context, from the low of 450
in October 2008 the MSCI Emerging
Markets Index (MXEF) rose 75%,
virtually uninterrupted over the next
seven months. You will recall that this
was around the time of some of the
initial references to “green shoots” in
May, which coincided with our year end. 
Since the end of May, MXEF rose to
around 870 in August, an increase of just
over 90% from the low.
Our FuM have appreciated similarly,
from US$1.95 billion in October 2008,
doubling to just over US$4 billion at the
beginning of August. However to
compare like with like, and to measure
the actual progress that we are making, 
I would suggest using straight index
tracking which would mean that we would
be managing US$5.4 billion if we returned
to the high that the index achieved in
October 2007, at which time we were in
fact managing US$4.95 billion. This figure
of “index-adjusted” FuM excludes monies
won via new mandates as yet unfunded
that are referenced under the “New
mandates” heading later in this statement.
Returning to the theme of “extreme
emotional behaviour”, what should
happen over the next few months based
upon precedent is that our asset class
should now take a breather for quite
some time. After the rises of 1999 and
2003 it took at least a year before further
highs were established, and whilst I’m
not suggesting that the circumstances are
similar this time around, the emotional
behaviour of participants within our
asset class will in my opinion be
similarly demonstrated. The index will
have increased in value too far too 
fast and there will be some time taken
for reflection prior to any further
significant advance.
Since the low last October, we have
been focusing our business with two
objectives in mind:
1. Diversification
We have established that our
shareholders, our staff and, I would
suggest, our clients do not like our asset
class’ volatility. Volatility equates to risk
and risk leads to insecurity. Whilst our
shareholders understand both what we
do and how we attempt to mitigate risk,
our staff, even in a year when we
outperform our benchmarks, potentially
receive significantly smaller bonuses. By
diversifying our business, employees, and
in particular our investment management
staff, will benefit in the same manner as
shareholders, and so interests are aligned.
In this regard therefore, we have been
attempting to diversify our business in a
number of ways, some of which have been,
very unusually, successful in the short
term, while other initiatives are taking us
longer to deliver. A recent success has been
the winning of a substantial mandate that
is to be invested in the MSCI All Country
World Index (ACWI) ex US. This is a
Closed End Fund mandate and is
becoming a significant area of focus for us
using the well established volatility of
Closed End Fund pricing as the major
source of alpha generation.
Other areas of diversification involving
our Emerging Markets Closed End
Fund business include the Emerging
Markets Plus Fund which allows us
opportunistically to invest in Developed
Markets when the Emerging Markets are
considered to be too high or when the
Developed Markets are attractively
priced. That Fund, which when initially
funded at the end of March 2009 had
8 City of London Investment Group Plc Annual Report 2009
“In my opinion, without
additional new bad news, 
if this market follows its
predecessors, MXEF in
2009 will have appreciated
between 50% and 75%
before there is the first 
sign of good news. This 
is what occurred in 1999
and 2003 after similar falls
under similar emotional
circumstances in our 
asset class.”
Extract from CEO review –
January 2009 City of London Investment Group Plc Annual Report 2009 9
assets of US$17 million, is now US$43
million (end August) after an additional
subscription of US$23 million and then
a rebalancing redemption of US$10
million at the end of June.
Our Equities (as compared to Closed
End Funds) Group has also developed.
We recently added both an Asia Value
and Growth spoke to The World Markets
Umbrella Fund (our Dublin based
mutual fund) and created a new
Delaware Statutory T rust called
Emerging Markets Value and Growth,
with the intention of marketing these
funds to institutional investors after they
have established first or second quartile
performance track records.
2. Employees
As referenced in the Interim Report we
have not made any of our staff redundant
during the difficult market conditions of
the past year or so. This is for two reasons
with which you are familiar:
(i) We run a low cost business. We do 
not spend what we consider to be
shareholders’ money unnecessarily. Our
offices are by no means the most fancy,
and when we travel we do not stay in
expensive hotels or use corporate jets!
Neither are we great entertainers, believing
that good investment performance is what
counts as an aid to winning mandates.
(ii)Our business model is (particularly as
our asset class is risky) as risk averse as
possible. We do not agree with very long
term plans, knowing that markets (as we
have just witnessed) can derail them. Also
we do not overstaff. We attempt to use
staff flexibly, increasing the head count
only when we are sure that in so doing
we would not potentially create a
position only to find that we were then
forced to reconsider due to changed
market circumstances.
Obviously we are fortunate in this regard
as we still remain small. I expect that as
we grow some of these values will be
compromised, but to the extent that we
can be careful with the allocation of our
human resources, I would suggest that
this should be for the benefit of our
shareholders, our clients, and ultimately
our staff.
However, having just implied that we do
not take any risks, we have in fact taken
on a number of experienced staff to fill
certain specialist positions in support of
our diversification plans. In this regard
we were taking on staff at a point when
other fund managers were letting staff go
for whatever reason.
The areas involved (all of which are areas
of diversification) are as follows:
Asian Equities, Developed Closed End
Funds, Absolute Return, US Marketing,
Asia Marketing.
Asian Equities, Developed Closed End
Funds and Absolute Return are all
product specific. However US
Marketing, as referenced in the Interim
CEO Review is a new position created as
a result of the end of our agreement with
North Bridge Capital, who have been our
third party marketing provider for many
years. This agreement ends in October
and we decided well over a year ago to
make an internal appointment that
would enable us to benefit and keep
100% of the new fees generated from 
US assets going forward subsequent to
October. There is one exception to this:
one consultant relationship has been left
with North Bridge Capital for one
further year.
In addition, we have made an
appointment in our Singapore office 
to explore marketing opportunities in
Asia. We hope that as we diversify our
business further we will be able to
continue to develop our business in Asia
potentially with new products from our
Equities group.  10 City of London Investment Group Plc Annual Report 2009
Chief Executive Officer’s review
Continued
Investments
We now hold positions in three CLIM
Funds. These positions have been taken to
facilitate the development of a performance
record in each of these areas. In each case,
at the point that the requisite record has
been established these investments will be
reduced and ultimately liquidated. In the
case of the Global Equity Fund these assets
have been reallocated to the newly-
launched funds. As can be seen below
these investments total US$3.543 million
as of the end of July.
Market value
Seed 31 May 2009 31 July 2009
Investments US$k US$k
US DST’s:
Global Equity Fund 400 –
Emerging Markets
Value & Growth – 1,000
World Markets
Umbrella Fund (Dublin)
Natural Resources 296 306
Asia Value & Growth – 2,237
T otal 696 3,543
Exercise of options
In my Interim Review I gave notice that 
I would be intending to exercise an option
over 189,000 shares at 29p prior to its
expiry in May this year, and would be
intending subject to market conditions to
simultaneously sell around half of the
resulting shares that I purchased. However,
as a result of changed market conditions 
I took up the entire position and have no
present plans for disposing of any shares.
Market volatility 
Last year I made the point that we had
dealt with a lot of volatility, in fact this
financial year just finished was even worse.
For information I have reprinted last year’s
graph and show it above this year’s.
New mandates
As referenced earlier we have been successful
in winning a number of new mandates. As
of the end of August these were in excess of
US$500 million. We expect these mandates
to be funded over the next few months.
800
Source: Bloomberg
900
1,000
1,100
1,200
1,300
1,400
15/1/07
14/2/07
16/3/07
17/4/07
17/5/07
18/6/07
18/7/07
17/8/07
18/9/07
18/10/07
19/11/07
19/12/07
18/1/08
19/2/08
20/3/08
21/4/08
21/5/08
20/6/08
22/7/08
MXEF
40 Day Moving Average
+15.60%
+39.67%
+19.63%
-17.64%
-11.52%
-18.95% -12.69%
+14.77%
MSCI Emerging Markets Index 2007/2008
Source: Bloomberg
MSCI Emerging Markets Index 2008/2009
300
400
500
600
700
800
900
1,000
1,100
1,200
1,300
15/1/08
15/2/08
19/3/08
21/4/08
22/5/08
24/6/08
25/7/08
27/8/08
29/9/08
30/10/08
2/12/08
2/1/09
4/2/09
9/3/09
9/4/09
12/5/09
12/6/09
15/7/09
-62.65%
+32.75%
-23.02%
-21.78%
+27.13%
+67.46%
MXEF
40 Day Moving Average City of London Investment Group Plc Annual Report 2009 11
The financial services industry
I really had hoped that our industry had
learnt some lessons as a result of what had
happened over the past few years, but
unfortunately already the signs are not
good in this regard. In many instances (yet
again) the rewards paid to staff seem to be
out of all proportion to the gains left over
for shareholders. In the US it seems that
there is still a need to legislate away
structural weaknesses with more and more
time consuming and expensive regulation. 
I had hoped that the managements of the
companies that have demonstrated some
of the worst excesses would have been
held accountable by shareholders and
thus would not have survived. But in the
event this has not, at least at the present
time, occurred. 
I fear that what will in fact happen is that
when the wake up call arrives the
restructuring of our industry will be
significantly broader and will leave
significantly more scars than anyone could
at present foresee. In my opinion the
barriers to entry within many areas of the
financial service industry are not high and
it is inevitable that what are now
considered very well capitalised emerging
market banks and other institutions will
assume a significant role within this
industry over the next few years. It can be
seen that there are many precedents for
what I am suggesting. You just have to
look around the changing competitive
landscape for other consumer products
around the world (separate from financial
service products) to see the potential.
For our part we are determined to
continue to run a competitive business
that avoids many of the structural
weaknesses demonstrated by our peers.
In my opinion, what we should be
attempting to do is to reward clients
(who pay the bills) with superior returns,
our shareholders (who own the business)
with significant dividends and capital
growth, and our employees (who manage
the business) with relative security and
participation in the firm’s success. If we
can continue to achieve these three goals
relatively fairly I would hope that we will
be one of the survivors as many parts of
our industry are restructured.
Retirement plans
At the end of this year I will be 65, and
subject to approval from the board and also
from my colleagues and from shareholders,
I would like to stay on in my present
position until I am 70, and then to retire.
The exact date of my retirement could
obviously be managed to suit all parties.
Over the next few years I will gradually be
delegating certain responsibilities to ensure
a smooth handover.
CLIG employees
I would again like to thank staff for their
support and hard work in what has
continued to be a volatile and testing
environment. 
B M Olliff
Chief Executive Officer
10th September 2009
The clients (pay the bills)
The shareholders (own the business)
Expect . . .
Fair treatment
Open communication
To share in success
The employees (manage the business)
Expect . . .
Superior 
investment 
performance
Openness & 
accountability
Ethical 
treatment
Expect . . .
Relevant risk 
controls
Quality earnings
Cost controls Process
We have always strived to develop and nurture an investment
process which does not rely on ‘star’ fund managers, but
rather upon a series of analytical procedures that can produce
repeatable and sustainable first or second quartile
performance versus our peers.
Our process employs an array of proprietary tools for analysing and identifying
value. These quantitative tools supplement both macroeconomic analysis and
the trading expertise that has been developed over a period of nearly 20 years. 
Whether it is taking advantage of discount anomalies in closed end funds, or
company specific valuation in our equity business, through three full market
cycles in Emerging Markets, the process has delivered consistent relative
outperformance combined with low volatility relative to the applicable
emerging markets benchmarks.
12 City of London Investment Group Plc  Annual Report 2009 City of London Investment Group Plc  Annual Report 2009 13 14 City of London Investment Group Plc Annual Report 2009
Financial review
Consolidated income statement
The financial year 2008-9 comprised
four very different quarters, so far as
profit was concerned. The year opened
strongly on the back of funds under
management (FuM) of US$4.7 billion
and, despite some significant market
erosion, averaged US$4.2 billion across
the first three month ends. This relative
stability ended suddenly in the quarter to
end November 2008, as stock markets
around the world fell precipitately,
causing our monthly average FuM for
the quarter to decline to US$2.6 billion.
At the mid-year point FuM stood at a
disappointing US$2.1 billion. The
recovery from the low point began slowly
during the third quarter as monthly
average FuM rose to US$2.3 billion, 
and accelerated in the final quarter of 
the year as global markets rose rapidly, 
with emerging markets leading the way.
Average monthly FuM for the fourth
quarter was slightly over US$3 billion
and the year end position was US$3.5
billion. In percentage terms, from the
start point of US$4.7 billion FuM fell by
60% during the first half year, and then
rose by 80% to the year end figure. Some
of that recovery was the result of new
money, but nevertheless the figures are
indicative of a level of volatility which
was perhaps without precedent. 
Unsurprisingly, given this background,
fee income and therefore profitability
was healthy in the first and fourth
quarters but significantly impaired in
the second and third quarters. Overall,
for the year as a whole, fee income
was £20.2 million (2008: £24.9 million)
and while the year on year reduction
was as unforeseen as it was marked,
the fact that the year closed relatively
strongly provided a considerable
degree of comfort. The Group’s FuM
and income in sterling terms was
smoothed by the 18% decline in the
sterling/dollar exchange rate – in
sterling the starting and ending
FuM for the year were £2.4 billion and
£2.2 billion respectively.
Administrative expenses were reduced but,
net of the inflationary impact of the fall in
the £/US$ exchange rate, that reduction
was only marginal, from £15.0 million to
£14.5 million. Variable costs – commission
paid on fees plus the profit-share pool –
fell back and as a result the overhead
component of total administrative costs
rose from 45% to 60%. The increase was
principally attributable to people costs and
systems, natural enough given that these
two make up 75% of the fixed cost base
(2008: 74%). Although reflecting an
increase in headcount from 52 to 58 and
some investment in systems (and in
particular in the adoption of the Charles
River front office system), in reality by
far the most significant driver of the
higher costs was the weakness of sterling,
not just as it related to our US office costs
but also, although less materially, as it
related to the costs of the Singapore and
Dubai offices.
In the half year results we took a write
down of £0.7 million against our seed
investments, reflecting a fall in value
from original investment. As markets
recovered during the second half, the
charge to the income statement for the
full year was reduced to £0.4 million
(coincidentally almost precisely matching
the gain of £0.5 million taken to profit
in the preceding two years).
Pre-tax profit of £5.4 million represents 
a fraction over 50% of the previous 
year’s £10.7 million. The tax charge is
equivalent to 28.6% of pre-tax profits
(2008: 33.3%) with the change
resulting from the reduction in the
UK corporation tax rate to 28%, the
changing mix of business as apportioned
under the Group’s transfer pricing policy
and a small write back of tax accrued 
in prior years. Profit after tax was 
£3.8 million (2008: £7.1 million).
Total income £k
05 06 07
Fixed costs
Variable costs
Pre-tax profit
Note: excludes AIM listing costs 
and gains/losses on investments.
7,762
14,228
18,486
25,316
20,302
08 09 City of London Investment Group Plc Annual Report 2009 15
Consolidated balance sheet 
and statement of changes in 
shareholders’ equity
Dividends paid to shareholders during
the year totalled £4.4 million, being 
£3.2 million for the 13.5p final dividend
for 2007/8 and £1.2 million for the
current year’s interim dividend of 5p per
share. The equivalent numbers for the
previous year were £1.7 million (7p) final
and £1.5 million (6p) interim, making 
a total of £3.2 million. None of the 
other components of the change in
shareholders’ equity impact cash in the
current period. The revaluation reserve,
reflecting the valuation of seed
investments, was effectively eliminated
during the year as value declined by 
£0.4 million, reversing the prior year
upward revaluation of £0.5 million. 
The share option reserve was reduced to 
£1.8 million (2008: £3.5 million) based
upon the effect on deferred tax of the
change in price of the Group’s shares,
which stood at £2.285 at 31st May 2009
(31st May 2008: £3.35). Also with 
respect to share options, a receivable of
£1.2 million has been recorded to reflect
the anticipated recovery of corporation
taxes in both the UK and the US in
respect of share option exercises during
the four years ending in May 2009, as
the corporation tax filings had not
hitherto acknowledged the deduction
available against taxable profits. The net
effect of these movements, together 
with the share-based payment charge of 
£0.1 million (2008: £0.1 million), was 
to reduce total equity from £9.8 million
to £8.7 million.
Cash remains the major part of net
assets: £4.7 million representing 54% 
of the total (2008: £5.5 million; 56%). 
The reduction in cash reflects the excess
of the net cash used in financing activities
at £4.1 million (2008: £9.0 million) over
the net cash generated from operating
activities of £3.3 million (2008: £7.4
million). Current and deferred taxes
represent receivables of £2.2 million
(2008: £1.5 million), including the
reclaim of £1.2 million of prior year
taxes as noted above. Investments in
property and equipment and in financial
assets total £1.3 million (2008: £2.2
million), and the balance of the total net
assets of £8.7 million (2008: £9.8
million) is represented by net trade
receivables/payables at £0.5 million
(2008: £0.5 million).
Currency exposure
The strength or weakness of sterling
relative to the US dollar has, and most
likely always will have, a significant
influence on reported earnings, as the
Group’s income is derived almost entirely
in US dollars, whereas close to half of its
expenses are incurred in sterling. As
observed many times before, there is an
inbuilt natural hedge, as US dollar fee
income will tend to rise as the dollar
weakens and fall as the dollar strengthens,
assuming that the weakness/strength is
reflected in the dollar’s value relative to
the currencies that underlie the funds
under management. Ultimately, in effect,
it is the value of sterling relative to those
underlying currencies that feeds through
to earnings. Nevertheless it is helpful to
consider the table below, which illustrates
the impact on post tax profits of moves in
the dollar/sterling rate, ceteris paribus:
FuM – US$bn
3.0 3.5 4.0 4.5
US$/£ Post-tax, £m
1.55 4.2 5.5 6.9 8.2
1.60 4.0 5.3 6.6 7.9
1.65 3.8 5.1 6.4 7.6
1.70 3.6 4.9 6.1 7.3
1.75 3.5 4.7 5.9 7.1
Assumes:
1. Average net fee 87 basis points
2. Annual operating costs £4.0 million
plus US$6.5 million
3. Profit-share 30%
4. Average tax of 31%
The table illustrates annualised profits –
for example at constant FuM of 
US$4.0 billion, and at a constant
exchange rate of 1.65, post-tax earnings
might be expected to be around £6.4
million, whereas the same level of FuM
would generate £6.9 million post-tax at
an exchange rate of 1.55.
While the Group does not aim to lock in
the sterling value of future revenues by
hedging, a portion of anticipated income
is sold forward principally as a mechanism
to hedge the long dollar position in the
balance sheet (i.e. essentially accrued 
fees plus certain of the seed investments). 
At 31st May these forward sales amounted
to US$3.6 million at an average rate of
1.7694 (2008: US$6.2 million at an
average rate of 1.9716).
Share options
As at 31st May 2009 there were
3,135,022 options on ordinary shares
outstanding (2008: 3,958,310). Of those
outstanding options, 1,262,375 (2008:
1,458,310) relate to shares held by the
Employee Share Option T rust, and the
balance of 1,872,647 (2008: 2,500,000)
relate to new shares that would be issued
at exercise. The reduction in the number
of dilutive options reflects the exercise 
of 621,103 options, which increased
shareholders’ equity by £0.3 million, and
the lapse of 6,250 options. At the period
end dilutive share options therefore
represent 7.2% (2008: 9.9%) of issued
share capital.
D F Allison
Finance Director
10th September 2009 16 City of London Investment Group Plc Annual Report 2008
Client service
16 City of London Investment Group Plc  Annual Report 2009 City of London Investment Group Plc Annual Report 2008 17
Our clients are our business. If performance is our 
first priority, then client service is a close second. 
We understand that a “one size fits all” approach is 
not appropriate. 
Our aim is to be open and accessible to each and every client, and while
we have a designated client service team we also expect and encourage our
institutional clients to enjoy direct contact with fund managers and other
key individuals within the investment management team.
We acknowledge that our industry has faced some difficult issues in recent
times, both with respect to the opaque practices of a few, and with respect
to volatile market conditions. We are, and always have been, an open
book to our clients. While we would never seek to impose, we try to
anticipate the concerns of our clients, and with that in mind we offered
personal visits by our senior investment officers to all of our institutional
clients this year, and were delighted at the significant take up rate.
We believe that our focus on client service is a key driver of our long 
term client retention.
City of London Investment Group Plc  Annual Report 2009 17 18 City of London Investment Group Plc Annual Report 2009
Board of directors
A J Davison
NON EXECUTIVE
CHAIRMAN
Andrew Davison, a
Chartered Accountant,
joined County Bank
Limited in 1972 and 
by 1984 had become
Managing Director of
NatWest Ventures. 
In 1987 he became
Chairman and CEO 
of Business Mortgages
Bank which was sold in
1991. He subsequently
joined the Boards of a
number of listed and
unlisted companies.
B M Olliff 
CHIEF EXECUTIVE
OFFICER
Barry Olliff’s career has
spanned over 40 years
within the investment
trust (closed-end fund)
sector. He began his
career in 1964 with
Denny Brothers,
ultimately Pinchin
Denny, as a market
maker in the sector. 
In 1979 he moved to
Laing & Cruickshank 
as a member of their
investment trust
department, and became
a director in 1984. In
1987 he established
Olliff & Partners, the
stockbroker business
from which City of
London was founded in
the early 1990’s.
D F Allison 
FINANCE 
DIRECTOR
Doug Allison graduated
in Economics &
Accountancy at the
University of
Southampton, and 
went on to qualify as 
a Chartered Accountant
with Ernst & Young in
1980. He moved to 
the financial services
sector in 1984, and
joined City of London 
in 1997. Doug is also 
an Associate of the
Chartered Institute 
of Bankers.
C M Yuste
BUSINESS
DEVELOPMENT
DIRECTOR
Carlos Yuste holds 
a Bachelor of Social
Science in International
Relations from the
University of Ottawa,
and an MA in
International Political
Economy from Carleton
University, also in
Ottawa. He worked at
the International
Development Research
Centre in Ottawa from
1994 to 1998, leaving 
to undertake an
International MBA at
York University, T oronto,
which he completed in
2000 before joining 
City of London in the
same year.
T W Griffith
CHIEF OPERATING
OFFICER
Prior to joining City of
London Group in
2000, Thomas Griffith
held various positions
in the institutional
client division of 
The Vanguard Group
including roles as both
a Client Relationship
Manager and a
Marketing Executive. 
In 1986 he obtained 
a bachelor’s degree in
Corporate Finance 
and Investment
Management from the
University of Alabama. City of London Investment Group Plc Annual Report 2009 19
O I Ashur
NON EXECUTIVE
DIRECTOR
Omar Ashur is the 
chief financial officer 
of Future Management
Holdings SA, one of
the founders of the
Company and CFO of
Future Pipe Industries
Group Limited, a
leading fibreglass pipe
manufacturer and has
an MBA and PhD 
from the Wharton
School of the University
of Pennsylvania, in
Philadelphia.
D M Cardale
NON EXECUTIVE
DIRECTOR
David Cardale has
worked extensively in
both Corporate Finance
and Private Equity. 
He has advised a
number of fund
management groups
including Gartmore,
Ivory & Sime and MIM,
and ran the European
operations of NatWest
Equity Partners. He has
been a director of 
two London listed
Investment T rusts.
David Cardale holds an
MBA from INSEAD.
G A Robb 
NON EXECUTIVE
DIRECTOR
George Robb qualified
as a solicitor before
becoming fully involved
with the asset
management sector in
1971. In 1994 he
established Asset
Management Investment
Company PLC as a
specialist vehicle
investing in the asset
management sector and
was appointed managing
director on its flotation.
He is a non-executive
director of Integrated
Asset Management plc
and a number of the
companies in which
AMIC is invested.
Dr A S Bufferd 
NON EXECUTIVE
DIRECTOR
Allan Bufferd is
T reasurer Emeritus of
Massachusetts Institute
of Technology (“MIT”),
where he served for over
30 years prior to his
retirement in 2006. 
At MIT, Allan was an
ex-officio member of
the governing board,
and supervised the
formulation and
implementation of
investment policy for
US$12 billion of
endowment and
retirement fund assets.
He is a current or
former member of a
large number of
corporate, foundation
and investment 
advisory boards.  Officers and Board Committees
Professional advisers
20 City of London Investment Group Plc Annual Report 2009
Audit Remuneration Nominations
Board Committee Committee Committee
D F Allison Executive, and Secretary
O I Ashur Non-executive
•
Chairman
••
A S Bufferd Non-executive
••
D M Cardale* Non-executive
•• •
A J Davison Chairman Non-executive
••
Chairman
T W Griffith Executive
B M Olliff Executive
G A Robb Non-executive
••
Chairman
C M Yuste Executive
*Senior independent non-executive director.
Nominated advisers
and joint brokers
Singer Capital Markets
One Hanover Street
London
W1S 1YZ
Joint brokers
Evolution Securities Ltd
100 Wood Street
London
EC2V 7AN
Auditors
Moore Stephens LLP
Chartered Accountants
St. Paul’s House
Warwick Lane
London
EC4M 7BP
Bankers
The Royal Bank of Scotland plc
London City Office
62-63 Threadneedle Street
London
EC2R 8LA
Financial communications
Tavistock Communications
13 Finsbury Pavement
London
EC2A 1NT
Registrars
Capita Registrars 
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
West Yorkshire
HD8 0GA
77 Gracechurch Street
London
EC3V 0AS
Registered office Report of the directors
City of London Investment Group Plc Annual Report 2009 21
The directors present their annual report and the audited financial statements for the year ended 31st May 2009.
Principal activity and review of business
City of London Investment Group Plc is the holding company for a number of investment management subsidiaries. The principal
operating subsidiary is City of London Investment Management Company Limited, which acts as an investment adviser and which
advises on 28 accounts (2008 – 30 accounts) with a total of £2,167 million (2008 – £2,379 million) under management as at the end
of the year. Accounts may be commingled or segregated.
The Report of the directors should be read in conjunction with the Chairman’s statement, the Chief Executive Officer’s review, and
the Financial review on pages 4 to 15, which together provide a commentary on the operations of the Group and include relevant key
performance indicators.
Future prospects
The Board is optimistic as to the future and is committed to increasing the Group’s funds under management.
Results and dividend
The results of the Group for the year, together with details of amounts transferred to reserves, are set out on pages 28 and 30. The
Company has paid dividends of £4,418,079 during the year (2008 – £3,237,691). The final dividend for the year to 31st May 2009
will be paid in November 2009, subject to approval.
Corporate governance
(a) The Board of directors
The Board recognises the importance of good corporate practice and is committed to maintaining high standards of corporate
governance throughout the Group. The Board comprises four executive directors and five non-executive directors. The directors intend
to comply with the Combined Code in such respects as are appropriate for a company of this size, nature and stage of development.
The Board meets regularly and has overall responsibility for ensuring that the Group is properly led and controlled, and is accountable
to shareholders for financial and operational performance. These responsibilities include the overall strategy of the Group, approval of
significant items of expenditure and consideration of significant financing matters pertaining to the Group.
The Board has established an Audit Committee, a Remuneration Committee and a Nominations Committee (each comprising of at
least three non-executive directors, who will invite other members of the Board to join meetings as appropriate) with formally
delegated duties and responsibilities.
(b) The Remuneration Committee
The Remuneration Committee is chaired by George Robb. It reviews the performance of executive directors and sets the scale and
structure of their remuneration and reviews the basis of their service agreements with due regard to the interests of the shareholders.
The Remuneration Committee also makes recommendations to the Board concerning the allocation of share options to executive
directors and employees. It also reviews individual compensation over £100,000. The remuneration and terms of appointment of non-
executive directors is set by the Board.
The Group has a remuneration policy, the aim of which is to provide, in the context of the Group’s business strategy, remuneration that will
attract and retain high calibre executives and staff. In order to achieve this, total rewards are set at levels that are competitive within the
relevant market. Rewards are earned through the achievement of objectives based on measures consistent with shareholder interests.
(c) The Audit Committee
The audit committee is chaired by Omar Ashur. It meets at least twice each year and is responsible for monitoring the quality of
internal control, ensuring that the financial performance of the Group is properly measured and reported on, meeting with the
auditors and reviewing reports from the auditors relating to accounting and internal controls.
The finance director is invited to attend meetings but the committee meets with the auditors at least once a year without the finance
director being present. Report of the directors
Continued
22 City of London Investment Group Plc Annual Report 2009
(d) The Nominations Committee
The Nominations Committee is chaired by Andrew Davison. It is responsible for reviewing and proposing appointments to the Board
and the various Board committees. In addition, the committee has responsibility for reviewing the composition of the Board and for
selecting candidates for appointment, to meet the desired composition.
Directors interests and remuneration
(a) Shareholdings
The directors who served throughout the year and their interests in the Company were as follows:
Ordinary Shares of
1p each 1p each
2009 2008
A J Davison (Chairman) (non-executive) 86,500 49,000
B M Olliff 5,243,683 4,888,025
D F Allison 310,625 260,625
T W Griffith 49,925 16,575
C M Yuste 62,925 29,575
O I Ashur (non-executive) 5,000 5,000
D M Cardale (non-executive) 156,250 156,250
G A Robb (non-executive) 45,000 –
A S Bufferd (non-executive) 10,000 –
(b) Share options
At 31st May 2009 share options were held by the following directors:
Exercise price Date from which
Number £ exercisable Expiry date
B M Olliff 303,897 0.26 14th May 2007 14th May 2014
25,000 1.40 31st March 2009 31st March 2016
5,000 2.61 30th January 2010 30th January 2017
5,000 2.73 30th March 2010 30th March 2017
12,000 2.75 1st October 2011 1st October 2018
D F Allison 200,000 0.26 14th May 2007 14th May 2014
18,750 1.40 31st March 2009 31st March 2016
5,000 2.61 30th January 2010 30th January 2017
5,000 2.73 30th March 2010 30th March 2017
12,000 2.75 1st October 2011 1st October 2018
T W Griffith 50,000 0.45 10th January 2004 10th January 2011
16,650 0.45 13th September 2004 13th September 2011
250,000 0.26 14th May 2007 14th May 2014
12,500 1.40 31st March 2009 31st March 2016
5,000 2.61 30th January 2010 30th January 2017
5,000 2.73 30th March 2010 30th March 2017
12,000 2.75 1st October 2011 1st October 2018
C M Yuste 50,000 0.45 10th January 2004 10th January 2011
16,650 0.45 13th September 2004 13th September 2011
250,000 0.26 14th May 2007 14th May 2014
12,500 1.40 31st March 2009 31st March 2016
5,000 2.61 30th January 2010 30th January 2017
5,000 2.73 30th March 2010 30th March 2017
12,000 2.75 1st October 2011 1st October 2018 City of London Investment Group Plc Annual Report 2009 23
(c) Remuneration
The remuneration of the directors who held office during the year ended 31st May 2009 is set out below:
Health Total Total Pension Pension
Salary Profit share insurance 2009 2008 2009 2008
£ ££ £ £ £ £
Non-executive
A J Davison 30,916 –– 30,916 30,000 – –
G A Robb 20,917 –– 20,917 20,000 – –
O I Ashur 20,917 –– 20,917 20,000 – –
D M Cardale 20,917 –– 20,917 20,000 – –
A Bufferd 21,750 –– 21,750 2,500 – –
115,417 –– 115,417 92,500 – –
Executive
B M Olliff 212,993 527,029 – 740,022 1,111,797 26,624 21,812
D F Allison 139,000 215,200 1,928 356,128 580,733 17,375 17,125
T W Griffith 125,361 129,073 – 254,434 330,549 15,670 12,651
C M Yuste 125,361 129,073 – 254,434 330,549 15,670 12,651
602,715 1,000,375 1,928 1,605,018 2,353,628 75,339 64,239
Substantial shareholdings
At 31st July 2009, the Company had been notified of the following interests of 3% or more in the Company’s ordinary shares:
Number of Percentage of
Interested party shares issued shares
B M Olliff 5,243,683 20.1
BlackRock Investment Management 3,174,903 12.2
F&C Asset Management 2,984,329 11.5
The City of London Employee Share Option T rust 1,597,565 6.1
Insight Investment 1,514,340 5.8
Asset Management Investment Company PLC 1,500,000 5.8
Hargreave Hale 1,320,750 5.1
Baillie Gifford 850,000 3.3
Saracen Fund Managers 787,500 3.0
Creditor payment policy
The Company’s current policy concerning the payment of its trade creditors is to:
(a) settle the terms of payment with suppliers when agreeing the terms of each transaction;
(b) ensure that suppliers are made aware of the terms of payment; and
(c) abide by the terms of payment.
The payment policy applies to all payments to suppliers for revenue and capital supplies of goods and services without exception.
As at 31st May 2009, the creditor days were nil (2008 – nil). Report of the directors
Continued
24 City of London Investment Group Plc Annual Report 2009
Auditors
A resolution to re-appoint Moore Stephens LLP as the Company’s auditor will be put to the forthcoming Annual General Meeting.
Each of the persons who are directors at the time when this report is approved has confirmed that:
(a) so far as each director is aware, there is no relevant audit information of which the Company’s auditors are unaware; and
(b) each director has taken all the steps that ought to have been taken as a director, including making appropriate enquiries of fellow
directors and the Company’s auditors for that purpose, in order to be aware of any information needed by the Company’s auditors
in connection with preparing their report and to establish that the Company’s auditors are aware of that information.
Approved by the Board of directors and signed on behalf of the Board
D F Allison
Company Secretary
10th September 2009 Statement of directors’ responsibilities
City of London Investment Group Plc Annual Report 2009 25
The directors are responsible for preparing the Directors’ report and the financial statements 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 (IFRS) as adopted by the
European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. Under company
law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state
of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements,
the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether applicable IFRSs have been followed, subject to any material departures disclosed and explained in the
financial statement;
• 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 keeping adequate 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
the 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. Independent auditors’ report to the shareholders
of City of London Investment Group Plc
26 City of London Investment Group Plc Annual Report 2009
We have audited the financial statements of City of London Investment Group Plc for the year ended 31st May 2009 which
comprises the Consolidated income statement, the Consolidated and Company balance sheets, the Consolidated and Company
statement of changes in shareholders’ equity, the Consolidated and Company cash flow statements and the related notes. The
financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union and, as regards the Parent Company financial statements, as applied in
accordance with the provisions of the Companies Act 2006.
This report is made solely to the Company’s members, as a body, in accordance with Sections 495 - 496 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for
the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Directors’ responsibilities statement set out on page 25, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the
financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards
require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable
assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an
assessment of: whether the accounting policies are appropriate to the Group’s and the Parent Company’s circumstances and have
been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors;
and the overall presentation of the financial statements.
Opinion on financial statements
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31st May 2009
and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; and
• the Parent Company financial statements have been properly prepared in accordance with IFRSs as adopted by the European
Union and as applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the
Group financial statements, Article 4 of the IAS Regulation.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ report for the financial year for which the financial statements are prepared is
consistent with the financial statements.  City of London Investment Group Plc Annual Report 2009 27
Matters on which we are required to report by exception 
We have nothing to report in respect of the following where the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the Parent Company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Colin Moore (Senior statutory auditor)
11th September 2009
for and on behalf of Moore Stephens LLP , London, Statutory Auditor 28 City of London Investment Group Plc Annual Report 2009
Consolidated income statement
For the year ended 31st May 2009
Total Total
2009 2008
Note £ £
Revenue 1,2 20,151,149 24,878,839
Administrative expenses
Staff costs 4(b) 6,716,230 7,925,916
Other administrative expenses 7,462,602 6,968,479
Depreciation 288,918 158,474
(14,467,750) (15,052,869)
Operating profit 6 5,683,399 9,825,970
Interest receivable and similar income 7 (60,177) 868,870
Impairment of seed investments 8 (238,790) –
Profit before taxation 5,384,432 10,694,840
Income tax expense 9 (1,537,649) (3,559,124)
Profit for the period 3,846,783 7,135,716
Basic earnings per share 10 16.1p 29.3p
Diluted earnings per share 10 15.0p 26.0p Group Company
2009 2008 2009 2008
Note £ £ £ £
Non-current assets
Property and equipment 11 801,554 296,740 476,454 209,179
Other financial assets 12 57,535 52,048 893,380 847,684
Deferred tax asset 13 1,605,855 3,208,323 330,737 811,963
2,464,944 3,557,111 1,700,571 1,868,826
Current assets
T rade and other receivables 14 2,868,398 3,573,214 1,062,701 2,080,639
Current tax receivable 608,965 – 1,323,904 1,142,881
Available-for-sale financial assets 15 431,365 1,861,375 431,365 1,861,375
Other financial assets 16 – 30,335 – 30,335
Cash and cash equivalents 4,718,766 5,498,910 108,638 83,135
8,627,494 10,963,834 2,926,608 5,198,365
Current liabilities
T rade and other payables 17 (2,349,334) (3,068,821) (2,819,866) (3,609,604)
Current tax payable – (1,487,571) – –
Creditors, amounts falling due within one year (2,349,334) (4,556,392) (2,819,866) (3,609,604)
Net current assets 6,278,160 6,407,442 106,742 1,588,761
Total assets less current liabilities 8,743,104 9,964,553 1,807,313 3,457,587
Non-current liabilities
Deferred tax liability 18 (1,424) (193,177) (1,424) (193,177)
Net assets 8,741,680 9,771,376 1,805,889 3,264,410
Capital and reserves
Called up share capital 19 259,816 253,605 259,816 253,605
Share premium account 1,518,441 1,357,283 1,518,441 1,357,283
Investment in own shares 20 (2,633,932) (2,811,878) (2,633,932) (2,811,878)
Revaluation reserve 3,661 450,747 3,661 450,747
Share option reserve 1,767,730 3,468,673 609,542 1,105,886
Capital redemption reserve 14,172 14,172 14,172 14,172
Retained earnings 7,811,792 7,038,774 2,034,189 2,894,595
Total equity 8,741,680 9,771,376 1,805,889 3,264,410
The Board of directors approve and authorise for issue these financial statements on 10th September 2009.
Signed on behalf of the Board of directors
B M Olliff D F Allison
Chief Executive Officer Finance Director
Consolidated and Company balance sheet
31st May 2009
City of London Investment Group Plc Annual Report 2009 29 30 City of London Investment Group Plc Annual Report 2009
Consolidated and Company statement of changes in shareholders’ equity
31st May 2009
Share Investment Share Capital
Share premium in own Revaluation option redemption Retained
capital account shares reserve reserve reserve earnings Total
£ £££ ££££
Group
At 1st June 2007 267,777 1,357,283 (1,573,525) 457,471 2,519,442 – 7,685,181 10,713,629
Purchase of own shares –– (1,590,642) –– –– (1,590,642)
Share option exercise –– 352,289 –– –– 352,289
Share cancellation (14,172) –– –– 14,172 (4,544,432) (4,544,432)
Increase in fair value* –– – 202,136 –– – 202,136
Released on disposal* –– – (208,860) –– – (208,860)
Share-based payment –– –– 141,083 –– 141,083
Deferred tax –– –– 808,148 –– 808,148
Profit for the period –– ––– – 7,135,716 7,135,716
Dividends paid –– ––– – (3,237,691) (3,237,691)
At 1st June 2008 253,605 1,357,283 (2,811,878) 450,747 3,468,673 14,172 7,038,774 9,771,376
Share option exercise 6,211 161,158 177,946 –– –– 345,315
Decrease in fair value* –– – (446,414) –– – (446,414)
Released on disposal* –– – (672) –– – (672)
Share-based payment –– –– 7,113 – 81,136 88,249
Deferred tax –– –– (1,708,056) – (7,663) (1,715,719)
Current tax on share options –– ––– – 1,270,841 1,270,841
Profit for the period –– ––– – 3,846,783 3,846,783
Dividends paid –– ––– – (4,418,079) (4,418,079)
At 31st May 2009 259,816 1,518,441 (2,633,932) 3,661 1,767,730 14,172 7,811,792 8,741,680
Company
At 1st June 2007 267,777 1,357,283 (1,573,525) 457,471 901,735 – 2,734,154 4,153,895
Purchase of own shares –– (1,590,642) –– –– (1,590,642)
Share option exercise –– 352,289 –– –– 352,289
Share cancellation (14,172) –– –– 14,172 (4,544,432) (4,544,432)
Increase in fair value* –– – 202,136 –– – 202,136
Released on disposal* –– – (208,860) –– – (208,860)
Share-based payment –– –– 105,188 –– 105,188
Deferred tax –– –– 89,963 –– 89,963
Profit for the period –– ––– – 7,942,564 7,942,564
Dividends paid –– ––– – (3,237,691) (3,237,691)
At 1st June 2008 253,605 1,357,283 (2,811,878) 450,747 1,105,886 14,172 2,894,595 3,264,410
Share option exercise 6,211 161,158 177,946 –– –– 345,315
Decrease in fair value* –– – (446,414) –– – (446,414)
Released on disposal* –– – (672) –– – (672)
Share-based payment –– –– 43,008 – 31,024 74,032
Deferred tax –– –– (539,352) – (16,262) (555,614)
Current tax on share options –– ––– – 799,950 799,950
Profit for the period –– ––– – 2,742,961 2,742,961
Dividends paid –– ––– – (4,418,079) (4,418,079)
At 31st May 2009 259,816 1,518,441 (2,633,932) 3,661 609,542 14,172 2,034,189 1,805,889
*Net of deferred tax. Consolidated and Company cash flow statement
For the year ended 31st May 2009
City of London Investment Group Plc Annual Report 2009 31
Group Company
2009 2008 2009 2008
Note £ £ £ £
Cash flow from operating activities
Operating profit 5,683,399 9,825,970 82,488 126,099
Adjustments for:
Depreciation charges 288,918 158,474 145,279 67,255
Share based payment charge 88,249 141,083 33,823 51,385
T ranslation adjustments on investments (372,759) 50,223 (372,759) 50,166
Loss on disposal of fixed assets 5,418 – 5,418 –
Cash generated/(used) in operations before changes
in working capital 5,693,225 10,175,750 (105,751) 294,905
Decrease/(increase) in trade and other receivables 704,816 (960,002) 1,017,938 536,222
(Decrease)/increase in trade and other payables (719,487) 906,653 (789,738) 291,060
Cash generated from operations 5,678,554 10,122,401 122,449 1,122,187
Interest received 145,604 438,109 7,962 23,439
Interest paid – (1,691) – (1,691)
Taxation (paid)/received (2,476,595) (3,161,783) 421,621 (532,257)
Net cash generated from operating activities 3,347,563 7,397,036 552,032 611,678
Cash flow from investing activities
Dividends received from subsidiaries – – 3,220,000 7,500,000
Purchase of property and equipment (799,943) (261,852) (418,765) (201,686)
Proceeds from sale of property and equipment 793 – 793 –
Purchase of non-current financial assets (663) – (663) (1,747)
Proceeds from sale of non-current financial assets 663 14,424 663 14,424
Purchase of current financial assets – (1,208,121) – (1,208,121)
Proceeds from sale of current financial assets 744,207 1,961,075 744,207 1,961,075
Net cash (used)/generated from investing activities (54,943) 505,526 3,546,235 8,063,945
Cash flow from financing activities
Proceeds from issue of ordinary shares 167,369 – 167,369 –
Ordinary dividends paid 21 (4,418,079) (3,237,691) (4,418,079) (3,237,691)
Purchase and cancellation of own shares – (4,544,432) – (4,544,432)
Purchase of own shares by employee share option trust – (1,590,642) – (1,590,642)
Proceeds from sale of own shares by employee share option trust 177,946 352,289 177,946 352,289
Net cash used in financing activities (4,072,764) (9,020,476) (4,072,764) (9,020,476)
Net (decrease)/increase in cash and cash equivalents (780,144) (1,117,914) 25,503 (344,853)
Cash and cash equivalents at start of period 5,498,910 6,616,824 83,135 427,988
Cash and cash equivalents at end of period 4,718,766 5,498,910 108,638 83,135  32 City of London Investment Group Plc Annual Report 2009
Notes to the financial statements
For the year ended 31st May 2009
1 Basis of accounting
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted
by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
(a) New IFRS Standards and Interpretations
At the date of authorisation of these financial statements, the following Standards and Interpretations, which are relevant to the
Group, were in issue but not yet effective:
IAS 1 (revised) Presentation of financial statements – comprehensive revision including the requirement to extract “non-
owner changes in equity” from the statement of changes in shareholders’ equity and present in a new
“statement of comprehensive income”.
IFRS 2 Share-based payment – amendments clarify that vesting conditions comprise only service conditions and
performance conditions, and specifies the accounting treatment for a failure to meet a non-vesting condition.
IFRS 7 Financial instruments disclosures – amendment relating to the reclassification of financial assets.
IFRS 8 Operating segments – introduces the “management approach” to segmental reporting whereby information 
is to be disclosed on the same basis as that used for internal reporting purposes.
There are a number of other Standards and Interpretations, and revisions to existing Standards and Interpretations, including the
improvements project, in issue but not in force at 31st May 2009. These are not considered relevant to the Group’s financial statements.
The directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact
on the results or the financial statements of the Group.
(b) Basis of consolidation and preparation
These financial statements consolidate the financial statements of the Company and all of its subsidiary undertakings. The
Company’s principal subsidiaries are City of London Investment Management Company Limited and City of London US
Services Limited, all other subsidiaries being dormant at 31st May 2009.
The Company is domiciled in the UK and its shares are issued in sterling. The functional currency of the business is however 
US Dollars. Management have decided that the presentational currency of the financial statements should be sterling rather than
the functional currency due to the Company being a UK registered entity.
The consolidated financial statements are prepared on the historical cost basis except for the revaluation of certain financial
instruments as outlined in point (c) (ii) below.
The preparation of these financial statements in conformity with IFRS requires management to make estimates and assumptions
that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Whilst estimates are
based on management’s best knowledge and judgement using information and financial data available to them, the actual
outcome may differ from those estimates.
The most significant areas of the financial statements that are subject to the use of estimates and assumptions are noted below:
Income taxes
Significant judgement is required in determining provisions for income taxes and in determining deferred tax assets.
Share-based payments
In order to calculate the charge for share-based compensation as required by IFRS 2, the Group makes estimates principally
relating to the assumptions used in its option pricing model.
The principal accounting polices adopted are set out below and have, unless otherwise stated, been applied consistently to all
periods presented in these accounts. City of London Investment Group Plc Annual Report 2009 33
1 Basis of accounting continued
(c) Significant accounting policies
(i) Property and equipment
For all property and equipment depreciation is calculated to write off their cost to their estimated residual values by equal annual
instalments over the period of their estimated useful lives, which are considered to be:
Short leasehold property improvements – over the remaining life of the lease
Furniture and equipment – four years
Computer and telephone equipment – four years
(ii) Financial instruments
Under IAS 39, “Financial Instruments: Recognition and Measurement”, financial instruments must be classified as either:
• Loans and receivables
• Held-to-maturity investments
• Available-for-sale financial assets
• A financial asset or liability at fair value through profit or loss
The Group’s investments in the funds that it manages are designated as available-for-sale financial assets. Such investments are
initially recognised at fair value, being the consideration given together with any acquisition costs associated with the investment.
They are subsequently carried at fair value, with any gains or losses arising from changes in fair value being recognised in equity.
Fair value is determined using the price based on the net asset value of the fund. Investments are derecognised when the rights to
receive cash flows from the investments have expired or have been transferred and the Group has transferred all risks and rewards of
ownership. When derecognition occurs a realised gain or loss is recognised in the income statement, calculated as the difference
between the net sales proceeds and the original cost of the financial asset. Any fair value gains or losses previously recognised directly
in equity are recycled into the income statement as part of this calculation of the gain or loss arising on derecognition.
The Group assesses at each reporting date whether there is objective evidence that an investment or a group of investments is
impaired. In the case of an investment classified as available-for-sale, a significant or prolonged decline in the fair value of the
investment below its cost is considered as an indicator that the investment is impaired. If any such evidence exists for available-
for-sale investments, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less
any impairment loss on that investment previously recognised in the income statement – is removed from equity and recognised
in the income statement.
The Group’s investments in derivatives are designated as financial assets at fair value through profit and loss. Such investments
are accounted for in the same way as available-for-sale assets but any gains or losses arising from changes in fair value are
recognised in the income statement. The fair value of the derivatives held by the Group is determined as follows:
• Options – priced using the quoted market bid price
• Forward currency trades – priced using prevailing exchange rates
The only exception is where the Group holds an investment in options on unquoted equity instruments, whose fair value cannot
be reliably measured. Such investments are measured at cost less impairment.
The Group’s investments have been classified here for recognition and measurement purposes under IAS39 but are not
necessarily reported in the balance sheet under those headings. Notes to the financial statements
Continued
34 City of London Investment Group Plc Annual Report 2009
1 Basis of accounting continued
The Group and Company’s investments are reported in the balance sheet as follows:
2009 2008
£ £
Non-current assets
Other financial assets:
Investment in funds 11,107 14,129
Investment in unquoted options 46,428 37,919
57,535 52,048
Current assets
Available-for-sale financial assets: investment in funds 431,365 1,861,375
Other financial assets: investment in quoted options – 30,335
Where the Group has invested in Delaware Statutory T rust funds there is a requirement to nominate a tax partner and as
Investment Manager, the Group has adopted this role which requires that a nominal investment be held in each fund for the life
of the fund. Therefore, such nominal investments are reported as other financial assets under non-current assets.
Where the Group has used its own cash to seed new funds, the investment is generally held until the fund’s performance is
established. Such investments are reported as available-for-sale financial assets under current assets.
(iii) T rade receivables
T rade receivables are measured at initial recognition at fair value, and are subsequently carried at the lower of original fair value
and their recoverable amount. Appropriate allowances for estimated irrecoverable amounts are recognised in the income
statement when there is objective evidence that the asset is impaired.
(iv) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand, deposits with an original maturity of three months or less, and
other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in value.
(v) T rade payables
T rade payables are measured at initial recognition at fair value and subsequently measured at amortised cost.
(vi) Deferred taxation
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the amounts of
assets and liabilities for financial reporting purposes and the amounts used for tax purposes. However, deferred tax is not
accounted for if it arises from goodwill or the initial recognition (other than in a business combination) of other assets or
liabilities in a transaction that affects neither the accounting nor the taxable profit or loss.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. The
carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. City of London Investment Group Plc Annual Report 2009 35
1 Basis of accounting continued
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised.
The tax rates used are those that have been enacted, or substantially enacted, by the end of the reporting period. Deferred tax is
charged or credited to the income statement, except when it relates to items charged or credited directly to equity, in which case
the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when there is a legally enforceable right to
set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority
and the Group intends to settle its current tax assets and liabilities on a net basis.
(vii) Share-based payments
The Company operates an Employee Share Option Plan. In accordance with IFRS2, the fair value of the employee services
received in exchange for share options is recognised as an expense. The fair value has been calculated using the Binomial pricing
model, and has then been expensed on a straight line basis over the vesting period, based on the Company’s estimate of the
number of shares that will actually vest.
In accordance with the transitional provisions, IFRS2 has been applied only to grants of share options after 7th November 2002
that had not vested as at 1st June 2006, although, as required by IFRS2, the disclosures in note 24(b) include grants of share
options prior to 7th November 2002.
(viii) Revenue
Revenue arises in North America, Europe and Australia and comprises investment management fees earned. Fees are recognised
in revenue as the investment management services are provided, in accordance with the underlying agreements.
(ix) Foreign currency translation
Foreign currency transactions are translated using the exchange rates prevailing at the transaction date. Foreign exchange gains
and losses resulting from the settlement of such transactions and from the translation of period-end monetary assets and
liabilities are recognised in the income statement.
The functional currency of the Group and its main trading subsidiaries, City of London Investment Management Company
Limited and City of London US Services Limited, is US dollars. The functional currency of City of London Investment Group
Plc (the “Company”) is sterling. The Group uses sterling as the presentation currency. Under IAS 21 this means that exchange
differences caused from translating from the functional currency to presentational currency for the main trading subsidiaries
would be recognised in equity. However, the Group operates a policy whereby the foreign exchange positions of the subsidiaries
are sold to the Company and therefore it is the only entity with any exchange differences. As such any exchange differences
arising in the Company are “real” in that the functional currency matches the presentational currency. This means that all such
exchange differences are included in the income statement and no split is required between equity and the income statement.
(x) Leases
The cost of operating leases is charged to the income statement in equal periodic instalments over the periods of the leases.
(xi) Pensions
The Group operates defined contribution pension schemes covering the majority of its employees. The costs of the pension
schemes are charged to the income statement as they accrue. Notes to the financial statements
Continued
36 City of London Investment Group Plc Annual Report 2009
2 Revenue
2009 2008
£ £
Management fees earned by subsidiary companies charged
as a percentage of funds under management 20,151,149 24,878,839
3 Analysis of revenue, operating profit and net assets
The directors consider that the Group only undertakes one class of business, and hence only analysis by geographical location is given.
2009 2008
Europe N.America Other Total Europe N.America Other Total
£ £££ £ £££
Revenue 2,364,609 17,346,969 439,571 20,151,149 2,811,774 21,541,398 525,667 24,878,839 
Operating profit 1,093,440 4,411,205 178,754 5,683,399 1,354,136 8,216,889 254,945 9,825,970 
Total assets 6,011,630 4,955,295 125,512 11,092,438 7,082,194 7,320,819 117,932 14,520,945 
Total liabilities (275,679) (2,023,831) (51,248) (2,350,758) (526,660) (4,126,637) (96,272) (4,749,569)
Net assets 5,735,951 2,931,465 74,264 8,741,680 6,555,534 3,194,182 21,660 9,771,376 
Other information:
Capital additions 418,765 381,178 – 799,943 201,686 60,166 – 261,852 
Depreciation 145,279 143,639 – 288,918 67,255 91,219 – 158,474 
4 Employees
2009 2008
(a) Average number of persons employed by the Group in the year: Number Number
Investment Management/Research 18 16
Performance and Attribution 4 5
Business Development/Marketing 3 –
Client Services 8 6
Administration, Accounts and Settlements 22 23
55 50
2009 2008
(b) Staff costs incurred during the year in respect of these employees were: £ £
Wages and salaries 3,220,921 2,600,303
Profit sharing payments 2,527,130 4,287,676
Social security costs 508,416 605,905
Defined contribution pension costs 371,514 290,949
Share options charge 88,249 141,083
6,716,230 7,925,916
The Group made contributions of £371,514 (2008 – £290,949) in the period to individual defined contribution pension
schemes established for directors and employees. There were no outstanding or prepaid contributions at the balance sheet date. City of London Investment Group Plc Annual Report 2009 37
5 Directors
2009 2008
Directors’ emoluments comprise: £ £
Emoluments (excluding pension contributions and awards under share option schemes) 1,720,435 2,446,128
Pension contributions 75,339 64,239
Share option charge 13,072 24,346
Gains on exercise of share options 797,101 467,838
2009 2008
Number Number
Number of directors on whose behalf pension contributions were paid during the year 4 4
Number of directors who exercised share options during the period 4 2
2009 2008
Highest paid director’s remuneration: £ £
Emoluments (excluding pension contributions and awards under share option
schemes and other long-term incentive schemes) 740,022 1,111,797
Pension contributions 26,624 21,812
Share option charge 3,870 8,723
Gains on exercise of share options 487,171 176,563
6 Operating profit
2009 2008
The operating profit is arrived at after charging: £ £
Depreciation of owned assets 288,918 158,474
Auditors’ remuneration:
– Statutory audit 45,271 45,000
– Taxation services 23,629 18,018
– Other services 23,852 15,228
Operating lease rentals:
– Land and buildings 363,746 231,075
– Other 16,914 9,258
Operating sublease rentals:
– Land and buildings 6,091 8,919
Foreign exchange losses/(gains) 94,256 (94,753) Notes to the financial statements
Continued
38 City of London Investment Group Plc Annual Report 2009
7 Interest receivable and similar income
2009 2008
£ £
Interest on bank deposit 145,604 436,418
(Loss)/gain on sale of investments (214,981) 426,220
Fair value of investments 9,200 6,232
(60,177) 868,870
8 Impairment of seed investments
Due to the deterioration in market conditions, the Group has recognised an impairment charge of £238,790 against the fair
value of its seed investments in new funds in-line with IAS 39.
9 Tax charge on profit on ordinary activities
2009 2008
(a) Analysis of tax charge on ordinary activities: £ £
Tax at 28% (2008 – 30%) based on the profit for the year 1,634,820 3,255,640
Double taxation relief (422,174) (637,640)
Deferred tax (113,251) (42,324)
Adjustments in respect of prior years (39,037) (9,882)
1,060,358 2,565,794
Foreign tax for the current period 610,544 950,355
Adjustments in respect of prior years (133,253) 42,975
477,291 993,330
1,537,649 3,559,124 City of London Investment Group Plc Annual Report 2009 39
9 Tax charge on profit on ordinary activities continued
(b) Factors affecting tax charge for the current period:
The tax assessed for the period is different to that resulting from applying the standard rate of corporation tax in the UK – 28%
(prior year – 30%). The differences are explained below:
2009 2008
£ £
Profit on ordinary activities before tax 5,384,432 10,694,840
Tax at 28% (2008 – 30%) thereon (1,507,641) (3,208,452)
Effects of:
Expenses not deductible for tax purposes (35,685) (20,122)
Capital allowances less than depreciation (15,706) (10,519)
Unrelieved overseas tax (188,370) (312,715)
Impairment in seed investments not tax deductible (66,861) –
Deferred tax on share based-payments and impairment 113,251 42,324
Prior period adjustments 172,290 (33,093)
Other (8,927) (16,547)
(1,537,649) (3,559,124)
10 Earnings per share
The calculation of earnings per share is based on the profit for the period of £3,846,783 (2008 – £7,135,716) divided by the
weighted average number of ordinary shares in issue for the year ended 31st May 2009 of 23,844,801 (2008 – 24,338,540).
As set out in Note 20 the Employee Benefit T rust held 1,617,650 ordinary shares in the Company as at 31st May 2009. The
T rustees of the T rust have waived all rights to dividends associated with these shares. In accordance with IAS 33 the ordinary shares
held by the Employee Benefit T rust have been excluded from the calculation of the weighted average of ordinary shares in issue.
The calculation of diluted earnings per share is based on the profit for the year of £3,846,783 (2008 – £7,135,716) divided by
the diluted weighted average of ordinary shares for the year ended 31st May 2009 of 25,587,418 (2008 – 27,404,870).
Reconciliation of the figures used in calculating basic and diluted earnings per share:
2009 2008
Number of shares Number of shares
Weighted average number of shares – basic earnings per share 23,844,801 24,338,540
Effect of dilutive potential shares – share options 1,742,618 3,066,330
Weighted average number of shares – diluted earnings per share 25,587,418 27,404,870 Notes to the financial statements
Continued
40 City of London Investment Group Plc Annual Report 2009
11 Property and equipment
2009 2008
Computer Computer 
Furniture and Short Furniture and Short
and telephone leasehold and telephone leasehold
equipment equipment improvements T otal equipment equipment improvements T otal
£ £££ ££££
Group
Cost
At 1st June 111,852 830,381 224,332 1,166,565 91,427 667,966 159,163 918,556
Additions 65,634 540,128 194,181 799,943 20,425 176,258 65,169 261,852
Disposals (32,073) (76,202) (125,288) (233,563) – (13,843) – (13,843)
At 31st May 145,413 1,294,307 293,225 1,732,945 111,852 830,381 224,332 1,166,565
Accumulated depreciation
At 1st June 89,619 620,271 159,935 869,825 77,802 493,175 154,217 725,194
Charge for the year 24,916 228,630 35,372 288,918 11,817 140,939 5,718 158,474
Disposals (25,862) (76,202) (125,288) (227,352) – (13,843) – (13,843)
At 31st May 88,673 772,699 70,019 931,391 89,619 620,271 159,935 869,825
Net book value
At 31st May 56,740 521,608 223,206 801,554 22,233 210,110 64,397 296,740
Company
Cost
At 1st June 60,369 370,119 197,588 628,076 40,878 260,109 132,419 433,406
Additions 65,634 158,950 194,181 418,765 19,491 117,026 65,169 201,686
Disposals (32,073) (35,801) (125,288) (193,162) – (7,016) – (7,016)
At 31st May 93,930 493,268 266,481 853,679 60,369 370,119 197,588 628,076
Accumulated depreciation
At 1st June 43,703 241,295 133,899 418,897 36,869 191,908 129,881 358,658
Charge for the year 21,011 89,604 34,664 145,279 6,834 56,403 4,018 67,255
Disposals (25,862) (35,801) (125,288) (186,951) – (7,016) – (7,016)
At 31st May 38,852 295,098 43,275 377,225 43,703 241,295 133,899 418,897
Net book value
At 31st May 55,078 198,170 223,206 476,454 16,666 128,824 63,689 209,179 City of London Investment Group Plc Annual Report 2009 41
12 Other financial assets (non-current)
Unlisted Unlisted
investments investments
2009 2008
Group £ £
Cost
At 1st June 52,048 46,859
Additions 596 2,762
Disposals (1,242) (3,741)
Fair value gains transferred to equity 6,133 6,168
At 31st May 57,535 52,048
2009 2008
Investment in Investment in
Unlisted subsidiary Unlisted subsidiary
investments undertakings Total investments undertakings Total
Company £££ £££
Cost
At 1st June 52,048 795,636 847,684 45,789 714,778 760,567
Additions 596 74,584 75,180 2,762 82,756 85,518
Disposals (1,242) (34,375) (35,617) (2,730) (1,898) (4,628)
Fair value gains transferred to equity 6,133 – 6,133 6,227 – 6,227
At 31st May 57,535 835,845 893,380 52,048 795,636 847,684
The movement in investments in subsidiary undertakings reflect the allocation of share-based payments from the Company to its
subsidiaries under IFRIC 11.
Holding of
Subsidiary undertakings Activity ordinary shares
City of London Investment Management Company Limited Management of funds 100%
City of London Unit T rust Managers Limited Dormant company 100%
City of London US Investments Limited Holding company for US companies 100%
City of London US Investments Limited holds 100% of the ordinary shares in the following:
City of London US Services Limited Service company
City of London Quantitative Management Limited Dormant company
City of London Latin America Limited Dormant company
The companies above are incorporated in Great Britain and registered in England and Wales.
City of London Investment Management Company Limited holds 100% of the ordinary shares in the following:
City of London Investment Management Singapore PTE Ltd Dormant company
The company above is incorporated and registered in Singapore.
All of the above mentioned companies are included in the consolidated financial statements of the Group. In the opinion of the
directors, the value of the subsidiaries is at least equal to their cost. Notes to the financial statements
Continued
42 City of London Investment Group Plc Annual Report 2009
13 Deferred tax asset
Share-based payments Impairment Total
Group Company Group Company Group Company
At 1st June 2007 2,357,851 705,669 –– 2,357,851 705,669
Credit/(charge) to income 42,324 16,331 –– 42,324 16,331
Credit/(charge) to equity 808,148 89,963 –– 808,148 89,963
At 1st June 2008 3,208,323 811,963 –– 3,208,323 811,963
Credit/(charge) to income 46,390 7,527 66,861 66,861 113,251 74,388
Credit/(charge) to equity (1,715,719) (555,614) –– (1,715,719) (555,614)
At 31st May 2009 1,538,994 263,876 66,861 66,861 1,605,855 330,737
14 Trade and other receivables
Group Company
2009 2008 2009 2008
£ £ £ £
T rade debtors 2,508,242 3,258,666 – –
Amounts owed by Group undertakings – – 817,885 1,858,061
Other debtors 68,828 72,002 57,988 58,278
Prepayments and accrued income 291,328 242,546 186,828 164,300
2,868,398 3,573,214 1,062,701 2,080,639
15 Available-for-sale financial assets
2009 2008
Group and Company £ £
Unlisted investments at market value 431,365 1,861,375
Unlisted investments at cost 670,155 1,226,180
16 Other financial assets (current)
2009 2008
Group and Company £ £
Listed investments at market value – 30,335
Listed investments at cost – 39,476 City of London Investment Group Plc Annual Report 2009 43
17 Trade and other payables
Group Company
2009 2008 2009 2008
£ £ £ £
T rade creditors 394,201 491,321 – –
Sundry creditors 209,886 43,209 15,978 366
Amounts owed to Group undertakings – – 1,980,420 2,468,605
Other taxation and social security 118,339 57,385 118,339 57,385
Accruals and deferred income 1,626,908 2,476,906 705,129 1,083,248
2,349,334 3,068,821 2,819,866 3,609,604
18 Deferred tax liability
Group Company
2009 2008 2009 2008
£ £ £ £
Deferred tax on revaluation reserve 1,424 193,177 1,424 193,177
19 Share capital
2009 2008
Group and Company £ £
Authorised
90,000,000 Ordinary shares of 1p each 900,000 900,000
2009 2008
Group and Company £ £
Allotted, called up and fully paid
At start of year 25,360,500 (2008 – 26,777,800) Ordinary shares of 1p each 253,605 267,777
Shares repurchased; nil (2008 – 1,417,300) – (14,172)
Dilutive share options exercised; 621,103 (2008 – nil) 6,211 –
At end of year 25,981,603 (2008 – 25,360,500) Ordinary shares of 1p each 259,816 253,605 Notes to the financial statements
Continued
44 City of London Investment Group Plc Annual Report 2009
20 Investment in own shares
Investment in own shares relates to City of London Investment Group Plc shares held by an Employee Benefit T rust on behalf
of City of London Investment Group Plc.
At 31st May 2009 the T rust held 1,617,650 ordinary 1p shares (2008 – 2,013,085), of which 1,262,375 ordinary 1p shares
(2008 – 1,458,310) were subject to options in issue.
21 Dividend
2009 2008
£ £
Dividends paid:
Interim dividend of 5p per share (2008 – 6p) 1,197,492 1,509,883
Final dividend in respect of year ended:
31st May 2008 of 13.5p per share (2007 – 7p) 3,220,587 1,727,808
4,418,079 3,237,691
A final dividend of 10p per share has been proposed, payable on 20th November 2009, subject to shareholder approval, to
shareholders who are on the register of members on 30th October 2009.
22 Profit of the Parent Company
As permitted by section 408 of the Companies Act 2006, the income statement of the Parent Company is not presented
as part of these financial statements. The Parent Company’s profit for the financial period, amounted to £2,742,961
(2008 – £7,942,564).
23 Operating lease commitments
At 31st May 2009 the Group had the following commitments for future minimum lease payments under non-cancellable
operating leases:
Group Company
Land and Motor Land and Motor Land and Motor Land and Motor
buildings vehicle buildings vehicle buildings vehicle buildings vehicle
2009 2009 2008 2008 2009 2009 2008 2008
££ ££ ££ ££
Within one year 316,960 8,200 145,955 6,988 174,384 – 34,115 –
In the second to fifth
years inclusive 652,256 – 48,787 6,696 537,685 – ––
969,216 8,200 194,742 13,684 712,069 – 34,115 –
Operating lease payments relating to land and buildings represent rents payable by the Group for its various offices and
apartment rental for staff posted overseas. Included in this category is a sublease agreement on part of the old London office
space which expired 11th November 2008 (2008 – £6,010). The Group enters into formal occupational property leases
ranging from one to ten years. City of London Investment Group Plc Annual Report 2009 45
24 Share-based payments
(a) The estimated fair values of options which fall under IFRS2, and the inputs used in the Binomial pricing model to calculate
those fair values, are as follows:
Number
Expected Risk-free Share price Exercise Dividend Estimated originally
Date of grant Expiry date life (yrs) rate at grant (£) price (£) Volatility yield fair value (£) granted
14/05/2004 14/05/2014 3.00 5.0411% 0.2600 0.2600 33.5589% 4.50% 0.0668 2,000,000
17/12/2004 17/12/2014 3.00 4.5420% 0.4500 0.4500 30.9463% 4.50% 0.1061 536,250
31/03/2006 31/03/2016 3.00 4.5300% 1.4000 1.4000 25.4798% 4.50% 0.2450 818,750
10/10/2006 10/10/2016 3.00 4.9865% 1.8000 1.8000 29.3594% 4.50% 0.3196 50,000
30/01/2007 30/01/2017 3.00 5.4828% 2.6100 2.6100 29.8223% 4.50% 0.4834 140,500
30/03/2007 31/03/2017 3.00 5.4338% 2.7300 2.7300 29.3557% 4.50% 0.4948 143,500
01/10/2008 01/10/2018 3.00 4.0720% 2.3000 2.7500 32.9241% 7.00% 0.2401 312,000
13/01/2009 13/01/2019 3.00 1.9645% 1.6300 2.7500 41.9187% 11.82% 0.1324 20,000
The expected life of the options has been assumed to be three years based upon the empirical evidence available. The risk-free rate
has been assumed to be represented by the yield to maturity at the date of grant of a UK Gilt strip with term to maturity equal to
the expected life of the option. The volatility of the Company’s share price at each date of grant has been calculated as the average
of the standard deviations of daily continuously compounded returns on the stock of a group of comparable companies.
(b) The number and weighted average exercise price of share options for each of the following groups is as follows:
2009 2008
Weighted average Weighted average
Number exercise price Number exercise price
Outstanding at the beginning of the year 3,958,310 0.71 4,797,675 0.68
Granted during the year 332,000 2.75 ––
Forfeited during the year 138,750 1.30 56,500 1.93
Exercised during the year 1,016,538 0.34 782,865 0.45
Expired during the year –– ––
Outstanding at the end of the year 3,135,022 1.02 3,958,310 0.71
Exercisable at the end of the year 2,548,022 0.63 2,862,060 0.32
The weighted average share price at the date of exercise
for share options exercised during the year was 2.15 3.12
25 Related party transactions
(i) Remuneration of key management personnel
The remuneration of the directors who are the key management personnel of the Group is provided in the directors’ interests
and remuneration report on pages 22 to 23 and in note 5.
(ii) Intra-group transactions
During the period the Company received from its subsidiaries £5,460,306 (2008 – £5,610,196) in respect of management
service charges and dividends of £3,220,000 (2008 – £7,500,000).
Amounts outstanding between the Company and its subsidiaries as at 31st May 2009 are given in notes 14 and 17. Notes to the financial statements
Continued
46 City of London Investment Group Plc Annual Report 2009
26 Financial instruments
The Group’s financial assets include cash and cash equivalents, investments and other receivables. Its financial liabilities include
accruals and other payables. The fair value of the Group’s financial assets and liabilities is materially the same as the book value.
(i) Foreign currency risk
Most of the Group’s revenues, and a significant part of its expenses, are denominated in currencies other than sterling, principally
US and Canadian Dollars. These revenues are derived from fee income which is based upon the net asset value of accounts
managed, and have the benefit of a natural hedge by reference to the underlying currencies in which investments are held.
Inevitably, debtor and creditor balances arise which in turn give rise to currency exposure. Each of the Group’s subsidiaries
eliminates its currency exposure by transfer to the holding company. All hedging activity is therefore assessed at the Group level.
Forward foreign exchange transactions are executed so as to substantially reduce the Group’s exposure to currency market
movements. The level of forward currency hedging is such as is judged by the directors to be consistent with market conditions.
As at 31st May 2009, the Group had net asset balances of US$4,422,628 (2008 – US$6,625,564), offset by forward sales
totalling US$3,600,000 (2008 – US$6,200,000), and net asset balances of C$371,190 (2008 – C$532,661).
Had the US Dollar strengthened or weakened against Sterling as at 31st May 2009 by 10%, with all other variables held
constant, there would have been no material impact on the Group’s profit or equity.
Further details on the effects on the Group’s post-tax profits due to movements in the US Dollar/Sterling exchange rate have
been demonstrated in the Financial review on page 15.
(ii) Market risk
Changes in market prices, such as foreign exchange rates and equity prices will affect the Group’s income and the value of its
investments.
The Group is, from time to time, exposed to market risk directly via its investment holdings and indirectly via its assets under
management, from which its fee income is derived. T o hedge against any potential loss in fee income due to a fall in the markets, the
Group will look to invest in out of the money put options on the emerging markets index. The purchase and sale of these options are
subject to limits established by the Board and are monitored on a regular basis. The investment management and settlement
functions are totally segregated.
The income from hedging recognised in the Group income statement for the period is £21,194 (2008 – cost £26,886).
(iii) Credit risk
The majority of debtors relate to management fees due from funds and segregated account holders. As such the Group is able
to assess the credit risk of these debtors as minimal. For other debtors a credit evaluation is undertaken on a case by case basis.
The Group has zero experience of bad or overdue debts.
The majority of cash and cash equivalents held by the Group are with leading UK banks. The credit risk is managed by carrying
out regular reviews of each institution’s credit rating and of their published financial position. Given their high credit ratings,
management does not expect any counterparty to fail to meet its obligations. City of London Investment Group Plc Annual Report 2009 47
26 Financial instruments continued
(iv) Liquidity risk
The Group’s liquidity risk is minimal due to its strategy to maximise its cash position. In addition, the Group’s current
available-for-sale assets represent investments in funds that it manages and can be liquidated immediately if required.
(v) Interest rate risk
The Group has no borrowings, and therefore has no exposure to interest rate risk other than that which attaches to its interest
earning cash balances. The Group’s strategy is to maximise the amount of cash which is maintained in interest bearing accounts,
and to ensure that those accounts attract a competitive interest rate. At 31st May 2009 the Group held £4,718,766 (2008 –
£5,498,910) in cash balances, of which £4,693,287 (2008 – £5,492,455) was held in bank accounts which attract variable
interest rates. The effect of a 100 basis points increase/decrease in interest rates on pre-tax profits or equity would not be material.
(vi) Capital risk management
The Group manages its capital to ensure that all entities within the Group are able to operate as going concerns and exceed any
minimum externally imposed capital requirements. The capital of the Group and Company consists of equity attributable to the
equity holders of the Parent Company, comprising issued share capital, share premium, retained earnings and other reserves as
disclosed the statement of changes in shareholders’ equity on page30.
The Group’s principal operating subsidiary company, City of London Investment Management Company Ltd is subject to the
requirements of the Financial Services Authority (“FSA”) in the UK. This subsidiary held surplus capital over its requirements
throughout the year. 48 City of London Investment Group Plc Annual Report 2009
Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of City of London Investment Group Plc (the "Company") will be held at
77 Gracechurch Street, London EC3V 0AS on Monday 26th October 2009 at 11.30 am for the following purposes:
Ordinary business
1. To receive and adopt the financial statements for the year ended 31st May 2009 together with the reports of the directors and
auditors thereon.
2. Having last been re-elected at the 2006 Annual General Meeting, to re-elect Barry Martin Olliff as a director of the Company in
accordance with section 130(a) of the Company’s articles of association.
3. Having last been re-elected at the 2006 Annual General Meeting, to re-elect Omar Issam Ashur as a director of the Company in
accordance with section 130(a) of the Company’s articles of association.
4. Having retired by rotation, to re-elect Thomas Wayne Griffith as a director of the Company in accordance with article 130(b) 
and article 131 of the Company’s articles of association.
5. Having served longer than nine years as a non-executive director, to re-elect Andrew John Davison as a director of the Company
in accordance with section A.7.2 of the Combined Code.
6. Having served longer than nine years as a non-executive director, to re-elect George Alan Robb as a director of the Company in
accordance with section A.7.2 of the Combined Code.
7. To re-appoint Moore Stephens LLP as auditors of the Company to hold office from the conclusion of the meeting until the
conclusion of the next general meeting of the Company at which accounts are laid before the Company and authorise the
directors to determine the auditors’ remuneration.
Special business
To consider and, if thought fit, pass the following resolution as a special resolution:
8. THAT the Company be generally and unconditionally authorised to make market purchases (within the meaning of section
163(3) of the Companies Act 1985 and section 693(4) of the Companies Act 2006 which is scheduled to come into force on 
1st of October 2009) of any of its ordinary shares of £0.01 (1p) provided that:
(a) the maximum number of ordinary shares which may be purchased is 2,603,000 (representing approximately 10% of the
Company’s issued ordinary share capital at the time of this resolution);
(b) the minimum price which may be paid for each ordinary share is £0.01 (1p) which amount shall be exclusive of expenses, if any; City of London Investment Group Plc Annual Report 2009 49
(c) the maximum price, exclusive of any expenses, which may be paid for any ordinary share is an amount equal to 105% of the
average of the middle market quotations for the ordinary shares of the Company as derived from the Daily Official List of the
London Stock Exchange plc for the five business days immediately preceding the date on which such ordinary share
is contracted to be purchased; 
(d) unless previously renewed, revoked or varied, this authority shall expire at the conclusion of the Company's next annual
general meeting, or on 31st May 2011 (whichever is the earlier), 
under this authority the Company may make a contract to purchase ordinary shares which would or might be executed
wholly or partly after the expiry of this authority and may make purchases of ordinary shares pursuant to it as if this authority
had not expired.
By order of the board
D F Allison
Company Secretary
10th September 2009
Registered office:
77 Gracecurch Street
London
EC3V 0AS
Registered in England and Wales No 2685257 50 City of London Investment Group Plc Annual Report 2009
Notes to the Notice of Annual General Meeting
1. A member entitled to receive notice, attend and vote at the annual general meeting (“AGM”) is entitled to appoint a proxy or
proxies to attend and, on a poll, vote instead of him. Such proxy need not be a member of the Company. Completion of a form
of proxy does not preclude the member attending the meeting and voting in person if they so wish. To be valid, the instrument
appointing a proxy, together, if appropriate, with a power of attorney or other authority (if any) under which it is signed, or a
notarially certified copy of such authority, must be deposited at the offices of the Company’s registrars, Capita Registrars, The
Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU no later than 11.30 am on 24th October 2009. A form of proxy
accompanies this notice.
2. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the time by which a person must be entered on
the register of members of the Company in order to have the right to attend and vote at the annual general meeting (and for
the purposes of the determination by the Company of the numbers of votes they may cast) is 6.00 pm on 24th October 2009.
The rights of members to attend and vote at the meeting will be determined by reference to entries on the register of members at
6.00 pm on 24th October 2009. Changes to entries on the register of members of the Company after that time will be disregarded
in determining the rights of any person to attend or vote at the meeting.
3. In order to facilitate voting by corporate representatives at the meeting, arrangements will be put in place at the meeting so that 
(i) if a corporate shareholder has appointed the Chairman of the meeting as its corporate representative with instructions to vote
on a poll in accordance with the directions of all of the other corporate representatives for that shareholder at the meeting, then
on a poll those corporate representatives will give voting directions to the Chairman and the Chairman will vote (or withhold a
vote) as corporate representative in accordance with those directions; and (ii) if more than one corporate representative for the
same corporate shareholder attends the meeting but the corporate shareholder has not appointed the Chairman of the meeting as
its corporate representative, a designated corporate representative will be nominated, from those corporate representatives who
attend, who will vote on a poll and the other corporate representatives will give voting directions to that designated corporate
representative. Corporate shareholders are referred to the guidance issued by the Institute of Chartered Secretaries and
Administrators on proxies and corporate representatives – www.icsa.org.uk – for further details of this procedure. The guidance
includes a sample form of representation letter if the Chairman is being appointed as described in (i) above.
4. The right to appoint a proxy does not apply to persons whose ordinary shares are held on their behalf by another person and who
have been nominated to receive communication from the Company in accordance with section 146 of the Companies Act 2006
(‘nominated persons’). Nominated persons may have a right under an agreement with the registered shareholder who holds shares
on their behalf to be appointed (or to have someone else appointed) as a proxy. Alternatively, if nominated persons do not have
such a right, or do not wish to exercise it, they may have a right under such an agreement to give instructions to the person
holding the ordinary shares as to the exercise of voting rights.
5. In the case of joint holders, the signature of only one of the joint holders is required on the form of proxy, but the vote of the first
named on the register of members will be accepted to the exclusion of the other joint holders.
6. The following documents are available for inspection between 10.00 am and 12.00 noon at the registered office of the Company
on any weekday and will also be available for inspection at the place of the AGM from the commencement of the meeting until
the conclusion thereof:
(a) The register of interests of the directors (and their families) in the share capital of the Company.
(b) Copies of the directors’ contracts of service and letters of appointment of the non-executive directors.
(c) Terms of reference of the Audit, Remuneration and Nominations Committees.
(d) Copies of the Company’s articles of association. Explanation of the business of the Annual General Meeting
City of London Investment Group Plc Annual Report 2009 51
Report and accounts (Resolution 1)
The first item on the agenda requires that the directors must present the accounts of the Company for the year ended 31st May 2009
together with the directors’ report and the independent auditors’ report thereon.
Re-appointment of directors (Resolutions 2 - 6)
Article 130 of the Company’s articles of association requires that at each annual general meeting, any director who has been in office
for more than three years or has been appointed by the directors since the last annual general meeting of the Company will stand for
re-appointment. In addition, such further directors (if any) shall retire by rotation as would bring the number retiring by rotation
up to one-third of the number of directors in office as at 10th September 2009 (or if their number is not a multiple of three,
the number nearest to but not greater than one third).
Article 136 of the Company’s articles of association requires that a resolution for the appointment or re-appointment of two or more
persons as directors by a single motion may not be moved unless a resolution that it shall be so moved has first been agreed to by the
meeting without any vote being given against it. Consequently separate resolutions will be put to the meeting.
Section A.7.2 of the Combined Code provides that non-executive directors may serve longer than nine years (e.g. three three year
terms), subject to annual re-election.
Brief biographical details of all the directors may be found on pages 18 and 19 of the annual report.
Re-appointment of Auditors (Resolution 7)
The Company is required at each general meeting at which accounts are laid before the shareholders to appoint auditors for the next
financial year to hold office from the conclusion of that meeting until the conclusion of the next general meeting at which audited
accounts are laid. Moore Stephens LLP are the current auditors and have indicated their willingness to continue in office. If Resolution 7
is passed, Moore Stephens LLP will be re-appointed as auditors to the Company, at a fee to be agreed by the board of directors.
Purchase by the Company of its own shares (Resolution 8)
Under section 166 of the Companies Act 1985 and section 701 of the Companies Act 2006 scheduled to come into force on
1st October 2009, the directors of a company may make market purchases of that company’s shares if authorised to do so.
The Company’s articles of association give a general authority to the directors to purchase shares on the market but that authority
is subject to the approval of shareholders. Your directors believe that granting such approval would be in the best interests of
shareholders in allowing directors the flexibility to react promptly to circumstances requiring market purchases.
Accordingly, Resolution 8, which will be proposed as a special resolution, will give the directors the authority to purchase issued shares
of the Company under section 166 of the Companies Act 1985 and section 701 of the Companies Act 2006. The authority contained
in this Resolution will be limited to an aggregate nominal value of £26,030 which represents approximately 10% of the issued
ordinary share capital of the Company as at the current time. The price which may be paid for those shares is also restricted as set out
in the Resolution. This authority will expire at the conclusion of the Company’s annual general meeting in 2010 or on 31st May
2011 (whichever is the earlier). 52 City of London Investment Group Plc Annual Report 2009
The board has no present intention of exercising this authority. However, this will be kept under review, and the board will use this
power only if and when, taking account of market conditions prevailing at the time, other investment opportunities, appropriate
gearing levels and the overall financial position of the Group, they believe that the effect of such purchases will be in the best interests
of shareholders generally and that they will result in an increase in earnings per share.
Shares purchased under this authority may be held as treasury shares. The Company may purchase and hold shares as treasury shares
up to a maximum amount equal to 10% of the nominal value of the issued ordinary share capital at that time, rather than cancelling
them. Shares held in treasury do not carry voting rights and no dividends will be paid on any such shares. Shares held in treasury in
this way can be sold for cash or cancelled. This would allow the Company to manage its capital base more effectively and to replenish
its distributable reserves.
If and when the board resolves to exercise its authority to make market purchases, it will at that time decide whether shares purchased
are to be cancelled or held in treasury.
Explanation of the business of the Annual General Meeting
Continued City of London Investment Group Plc is a
leading emerging market and natural resource
asset management group, specialising in the
provision of investment products and services 
to institutional clients. City of London 
operates its business from offices in London, 
the US, Singapore and Dubai.
Highlights 1
City of London at a glance 2
Chairman’s statement 4
Chief Executive Officer’s review 8
Financial review 14
Board of directors 18
Officers, Board Committees and
professional advisers 20
Report of the directors 21
Statement of directors’ 
responsibilities 25
Independent auditors’ report 26
Consolidated income statement 28
Consolidated and Company
balance sheet 29
Consolidated and Company statement
of changes in shareholders’ equity 30
Consolidated and Company
cash flow statement 31
Notes to the financial statements 32
Notice of Annual General Meeting 48
Notes to the Notice of Annual
General Meeting 50
Contents
Designed and produced by fourthquarter Printed by SV.two City of London Investment Group Plc Annual Report 2008 1
city of london
i n v e s t m e n t g r o u p p l c
A N N U A L R E P O R T & A C C O U N T S 
2009
L O N D O N P H I L A D E L P H I A S I N G A P O R E D U B A I L O N D O N P H I L A D E L P H I A S I N G A P O R E D U B A I
London office
77 Gracechurch Street
London
EC3V 0AS
United Kingdom
Telephone: + 44 (0) 207 711 0771
Facsimile: + 44 (0) 207 711 0772
US office
The Barn
1125 Airport Road
Coatesville, PA 19320
United States
Telephone: + 1 610 380 2110
Facsimile: + 1 610 380 2116
Singapore office
20 Collyer Quay
10-04 T ung Centre
Singapore 049319
Telephone: + 65 6236 9136
Facsimile: + 65 6532 3997
Dubai office
Unit 2, 2nd Floor
The Gate Village Building 1
Dubai International Financial Centre
PO Box 506695
Dubai
United Arab Emirates
Telephone: + 971 (0)4 423 1780
Facsimile: + 971 (0)4 437 0510
www.citlon.co.uk
CITY OF LONDON INVESTMENT GROUP PLC  ANNUAL REPORT & ACCOUNTS 2009
L O N D O N P H I L A D E L P H I A S I N G A P O R E D U B A I L O N D O N P H I L A D E L P H I A S I N G A P O R E D U B A I