CoL Annual Report 2024
Proof 11b
23 September 2024
Contact
Simon Peyto, Stuart Pickering, Miles Hutchins
FourthQuarter
30 Maltings Place
169 Tower Bridge Road
London SE1 3JB
Tel: 020 7234 8960
ANNUAL REPORT
& ACCOUNTS
2023 /2024
www.clig.co.uk
Our Purpose
The Group exists for the mutual benefit
of our three primary stakeholders:
Clients, Employees and Shareholders
Corporate statement
SUMMARY
City of London Investment Group PLC Annual Report 2023/2024 1
CONTENTS
Funds under Management (FuM) of $10.2 billion at
30th June 2024. This compares with $9.4 billion at the
beginning of this financial year on 1st July 2023
Net fee income was $66.2 million (2023: $65.5 million)
Underlying profit before tax* was $27.2 million
(2023: $27.0 million). Profit before tax was $22.6 million
(2023: $22.1 million)
Underlying basic earnings per share* were 33.5p (2023:
36.5p). Basic earnings per share were 27.8p (2023: 30.2p).
after an effective tax charge of 24% (2023: 21%) of
profit before taxation
Recommended final dividend of 22p per share (2023: 22p)
payable on 7th November 2024 to shareholders on the
register on 4th October 2024, making a total for the year
of 33p (2023: 33p)
*This is an Alternative Performance Measure (APM). Please refer to page 30 for more
details on APMs.
Overview
Summary 1
Financial highlights 2
At a glance 3
Strategic report
Chair’s statement 4
Our ESG initiatives 7
Chief Executive Officer’s statement 8
Business and investment review 12
Our business model 17
Our strategy and objectives 20
Key performance indicators 23
Risk management 28
Financial review 30
Corporate and social responsibility policy 34
Task Force on Climate-Related
Financial Disclosures 37
Section 172 (1) statement 46
Governance
Chair’s introduction 48
Board of Directors 50
Board activities 52
Stakeholder engagement 58
Corporate governance framework 60
Board evaluation 61
Nomination Committee report 62
Audit & Risk Committee report 66
Chair of the Remuneration
Committee’s annual statement 70
Remuneration overview 72
Annual report on remuneration 75
Directors’ remuneration policy 76
Directors’ report 91
Statement of Directors’ responsibilities 94
Financial statements
Independent auditor’s report 96
Consolidated income statement 106
Consolidated and Company statement
of comprehensive income 106
Consolidated statement of financial position 107
Consolidated statement of changes in equity 108
Company statement of changes in equity 109
Consolidated and Company cash flow statement 110
Notes to the financial statements 111
Shareholder information
Notice of Annual General Meeting 139
Explanatory notes to the Notice of AGM 140
Further notes 142
Company information IBC
Overview
Strategic report Financial statements Shareholder informationGovernanceOverview
June 2020 June 2021 June 2022 June 2023 June 2024
11.4
9.2
9.4
10.2
5.5
Funds under Management $bn
As at period ended:
Average FuM:
FINANCIAL HIGHLIGHTS
2 City of London Investment Group PLC Annual Report 2023/2024
Overview
13.4
27.0
13.9
27.2
18.1
36.5
17.3
33.5
22.0
33.0
22.0
33.0
15.2
14.4
30.2
27.8
33.6
33.6
65.5
66.2
11.1
11.5
22.1
22.6
* Comparative period results have been restated to US dollars
using the average exchange rates in the relevant period.
† This is an Alternative Performance Measure (APM).
Please refer to page 30 for adjustments for amortisation of
acquired intangibles and gain on investments and page 121
for calculation of earnings per share in pence.
First half year
Second half year
16.0
37.1
19.7
44.2
15.4
36.9
36.8
77.4
June
2020*
June
2021*
June
2022*
June
2023*
June
2024
June
2020*
June
2021*
June
2022*
June
2023*
June
2024
June
2020
June
2021
June
2022
June
2023
June
2024
June
2020*
June
2021*
June
2022*
June
2023*
June
2024
June
2020
June
2021
June
2022
June
2023
June
2024
19.1
41.1
18.4
12.4
8.0
18.5
11.0
11.1
11.7
20.7
40.6
31.9
32.6
29.9
Net fee income $m
Profit before tax $m
21.7
10.4
19.9
21.5
15.0
13.4
17.7
6.7
21.4
7.8
21.1
13.6
14.8
Underlying profit before tax
†
$m
Basic earnings per share
†
pence
18.8
24.3
19.4
24.5
18.4
23.8
Underlying earnings per share
†
pence
30.3
39.4
11.8
3.8
30.1
30.9
39.8
71.0
14.5
36.2
38.2
48.1
June
2020
June
2021
June
2022
June
2023
June
2024
20.0
22.0 22.0
13.5
10.0
11.0 11.0
13.3
16.2
11.011.0
Dividends paid and proposed per share pence
30.0
33.0
46.5
Special
Final
Interim
33.0p
$27.2m
33.5p
$66.2m
$22.6m
27.8p
21.2
18.2
38.4
35.1
22.1
44.9
June
2020*
June
2021*
June
2022*
June
2023*
June
2024
33.9
13.1
25.1
22.8
17.2
16.9
19.1
Basic earnings per share cents
38.2
53.0
35.1¢
AT A GLANCE
Overview
City of London Investment Group PLC Annual Report 2023/2024 3
Strategic report Financial statements Shareholder informationGovernanceOverview
Investment Management Company Limited
Karpus Investment Management (KIM) provides
closed-end fund strategies across all asset classes to
wealth management clients in the United States.
City of London Investment Management Company
Limited (CLIM) historically specialised in Emerging
Markets and has expanded its range to include
International, Opportunistic Value and Frontier
strategies, primarily for institutional clients.
City of London Investment Group PLC (CLIG) is an established asset
management group listed on the London Stock Exchange, consisting
of two wholly owned subsidiaries that invest primarily in closed-end
funds for the benefit of their respective clients
CLIG
$10.2b FuM
$6.3b FuM $3.9b FuM
CLIM KIM
CHAIR’S STATEMENT
4 City of London Investment Group PLC Annual Report 2023/2024
Strategic report
Introduction
In my February interim statement,
I had three objectives:
1. to remind readers of CLIG’s
conservative and collaborative
culture;
2. to convey the strength of our
teams; and
3. to highlight the attractive
opportunity set our portfolio
managers were detailing.
As we begin our 2024/2025 financial year,
I am pleased to report Funds under
Management (FuM) have grown, recovering
to $10.2 billion as of 30th June 2024 and
by c.22% from the lows reached last
October. At that time, the confluence of
weak bond markets and the sudden
Middle East violence provoked severe
declines in asset prices. International and
Emerging Markets (EM) were in decline
and closed-end fund (CEF) discounts were
wide. Fortunately, our teams were
energised and prepared to take advantage
of the weakness.
Since late October, we have begun to
enjoy positive momentum on a number of
fronts. We have experienced the start of
discount narrowing in a number of CEFs
and lower inflation readings have
supported bonds and powered very good
performance from our KIM fixed income
and municipal bond strategies.
Corporate governance has been a key
focus and our teams at CLIM and
KIM have been successful in engaging
with CEF Boards to support discount
control measures.
Performance at CLIG has been strong and
our teams have done well on an absolute
basis and in their peer group rankings with
all strategies in first or second quartiles
over five and ten-year timeframes. This
strong relative performance provides
opportunity for our sales and marketing
teams which have been actively engaging
with clients and a growing number of
prospects. Our Global Strategy, managed
by our talented International Developed
CEF Equity team led by Mike Edmonds
and Mike Sugrue, will have a three-year
track record as of December 2024 and
moves are underway to grow this strategy.
While our investment teams successfully
navigated a complex environment,
it was also a year of broad-based
accomplishments for our non-investment
teams. Our Relationship Managers and
Executive Assistants at KIM and
Marketing and Client Servicing teams at
CLIM increased contact and information
flow with clients and prospects, including
the production of informative videos to
highlight the strong capabilities of our
investment teams and the attractive
environment for increasing exposure to
our strategies.
“Performance at CLIG has been strong and our teams have done
well on an absolute basis and in their peer group rankings with
all strategies in first or second quartile over five and ten-year
timeframes. While our investment teams successfully navigated
a complex environment, it was also a year of broad-based
accomplishments for our non-investment teams.”
Rian Dartnell Chair
City of London Investment Group PLC Annual Report 2023/2024 5
Our Operations and Information
Technology teams set high goals for
improving workflows and reducing errors
across the Group with an ever-heightened
focus on cybersecurity.
Our Finance team worked diligently to
improve and streamline processes,
including enhancing their budgeting
process. As of 30th June 2024, the Group
successfully completed its first year using
the US dollar as its reporting currency.
I would like to thank the Finance team
for their diligence in preparing for and
executing this transition.
From my vantage point, it was also a
year in which the Group Executive
Committee (GEC) further solidified its
communications and processes. The
current members of the GEC are Tom
Griffith – CEO, Dan Lippincott –
President of Karpus, Deepranjan Agrawal
– Group CFO and Carlos Yuste – Head of
Business Development. These individuals
meet formally each week to assess detailed
knowledge of Group activities and set
priorities. Group management possess an
ethos of continual improvement and are
engaged in a series of initiatives to make
the business more robust while managing
risk and working proactively to enhance
long-term returns for shareholders. In
addition, at CLIM the Investment
Management Resources and Operations
Committee (IMROC) was formalised
during the year to facilitate even better
support and communication within the
portfolio management teams.
ESG
The Group continues its commitment
to the environment with continual
efforts to reduce negative effects. We
implemented a carbon offset programme
to address our impact related primarily
to air travel and other activities.
Diversity, equity and inclusion continue to
be important areas of focus across the
Group, with two dedicated training
sessions per calendar year provided to all
employees. Additionally, all employees
receive regular monthly training programs
to reinforce awareness of their role in
protecting our technology network and
infrastructure, with an elevated focus on
cybersecurity.
The Group continues to be strongly
committed to regular workforce
engagement events. These sessions ensure
the Non-Executive Directors (NEDs)
maintain a good understanding of the
many elements at play in the Group as
well as the teams and individuals working
to grow and improve the business. As
mentioned in our interim statement, the
Board spent over two days with employees
last September at our Strategy Meeting in
West Chester, Pennsylvania, participating
in a mix of formal presentations, social
and teambuilding events.
Your Board
Your Board maintained active oversight
of Group activities during the year and
engaged with employees on a frequent
basis both in person on visits to Rochester,
West Chester and London as well as
during numerous video sessions.
I began my new role as Chairman in
October 2023. One of my first activities
was to work closely with our Nomination
Committee to identify an excellent
addition to our Board. Sarah Ing joined
us in March of this year and is already
making important contributions.
Peter Roth continues to work diligently
as Senior Independent Director as well as
Chair of the Audit & Risk committee.
Sarah Ing will become Chair of the
Remuneration Committee at the
conclusion of the Company’s Annual
General Meeting (AGM) in October
2024. Tazim Essani has notified the Board
that, having completed her three-year
term, she will not seek re-election. As we
search for a new independent NED, we
will ensure that the Board continues to be
well-balanced with members possessing a
good mix of skills and perspectives.
Assuming I am re-elected as Chair at this
year’s AGM, we will begin the process of
reviewing Chair succession as discussed in
the Nomination Committee statement
later in this report.
Dividends
Your Board formally reviewed the Group
dividend policy and discussed it with
management as part of our regular
process. We continue to believe that the
existing dividend policy will serve the
Group well and formally voted to
extend it. Our dividend policy of
maintaining a 1.2 coverage ratio over a
rolling five-year period has provided a
useful structure and discipline since its
adoption in 2014.
Management has plans in place for cost
reductions of c.$2.5 million over the next
financial year. Subject to approval by
shareholders, we recommend a maintained
final dividend of 22 pence per share,
payable on 7th November 2024. Our
annual dividend will therefore total
33 pence, providing an attractive yield
for our shareholders. Please refer to page
10 for CLIG’s dividend history.
CLIG remains debt-free and has a cash
balance of $33.7 million as of 30th June
2024 (2023: $28.6 million) with the final
dividend of 22 pence per share to be paid
in November 2024.
Overview Financial statements Shareholder informationGovernanceStrategic report
CHAIR’S STATEMENT
CONTINUED
6 City of London Investment Group PLC Annual Report 2023/2024
Strategic report
Shareholder engagement
Since our last AGM on 23rd October
2023, we have pursued a strategy of
engagement with our largest shareholder
and have had a series of constructive
meetings. Discussions on strategy for
CLIG’s businesses have been ongoing and
we welcome the positive engagement.
We are making progress on a number of
shared priorities, including growth and
asset retention, maintaining our
commitment to expense control and
enhancing our focus on the management
of our cash balances. I am pleased to
report that relations with our controlling
shareholder have been progressing well.
All involved are happy to be moving
forward steadily and on an even keel.
We have also been engaging with our
other shareholders and, as always,
plan to maintain transparency in our
ongoing dialogue.
Outlook
As I assess prospects, it gives me
confidence to be a part of a Group with
conservative business practices, dedicated
and talented teams and a recurring
cash flow business model. Positive
momentum appears to be building at
a time when a number of factors are
improving. Discounts in CEFs remain
at wide levels and ongoing corporate
governance initiatives by our teams are
gaining traction. Many CEF Boards have
recently adopted share buyback and
discount narrowing mechanisms.
The level of inquiry and requests for
proposals for International and EM
mandates have improved markedly
over the past six months.
After our AGM twelve months ago,
your Board and members of Senior
Management met to thank retiring
Chairman Barry Aling for his outstanding
decade of service to CLIG. Former Board
Chairmen David Cardale and Andrew
Davison were in attendance, both having
supported and ably steered the Group from
its early days. Tom Griffith, Carlos Yuste,
Deepranjan Agrawal, Dan Lippincott and
Mark Dwyer represented management,
each with many years of excellent service.
Together, this group of individuals
embodied a timely reminder of the talent,
consistency and determination of the
team at CLIG.
CLIG successfully navigated a challenging
year by sticking to its team-based
approach, relying on process, while
emphasising transparency and accountability
to our clients and shareholders. The past
twelve months have been a period of
achievement for the Group and I want
to thank our teams for their dedication
and hard work.
Rian Dartnell
Chair
23rd September 2024
City of London Investment Group PLC Annual Report 2023/2024 7
OUR ESG INITIATIVES
Strategic report
• Carbon offsets were purchased
during the year, to offset all Group
business travel and energy
consumed by the Singapore office
• Our West Chester, Pennsylvania
office is now sourced by
renewable energy
• Additional environmental reporting
and figures can be found on
page 37 in our disclosures
Please refer to page 35 for the Group’s
environmental policy initiatives.
• Continue to refine and adjust the
Group’s hybrid WFH policy
• The London and Pennsylvania
offices offer internship programs
affiliated with either the local
community and/or local university,
in order to provide opportunities for
students to gain experience in the
investment management industry.
Please refer to page 36 for the Group’s
social initiatives.
• Group-wide strategy meeting was
held in September 2023 in West
Chester, Pennsylvania office.
All Group-wide employees and
Board members were invited to
attend, and the session included
presentations, informal gatherings,
and team-building exercises to
foster workforce engagement
with the Board
• Held Board meetings in London,
Rochester, and Pennsylvania during
the financial year, and events were
held with local office employees
to encourage interactions
Please refer to page 46 for our
section 172 statement.
Environment Social Governance
Overview Financial statements Shareholder informationGovernanceStrategic report
CHIEF EXECUTIVE OFFICER’S STATEMENT
8 City of London Investment Group PLC Annual Report 2023/2024
Strategic report
Game of two halves
“Game of two halves” is a British phrase
that is commonly used to describe football
(soccer) matches that have very different
outcomes in each half. In a wider context,
the phrase can refer to a situation or event
that is evenly split into two parts or halves,
often with contrasting or opposing
qualities or outcomes.
We saw an upward momentum swing in
the second half of the financial year, making
it a true game of two halves as Figure 1
illustrates. Net inflows of c.$42 million at
KIM during the second half of the financial
year is a significant development showing a
change in investor sentiment, which also
corresponded with a reduction in net
outflows at CLIM. Performance, both on
an absolute and relative basis, also improved
across the bulk of our main strategies in the
second half of the financial year. Funds
under Management (FuM), driven
primarily by higher market returns,
increased by a greater percentage in the
second half of the financial year.
As commented in recent Annual Reports,
Emerging Markets (EM) strategies have
been out of favour as an asset class for an
extended period. However, there appears to
be a momentum swing underway with a
renewed interest in EM from institutional
investors in the US marketplace. Most
recently, this is evidenced by Figure 2,
which shows a reversal of net outflows
in 2023 from strategies focused on EM
to net inflows in the first calendar quarter
of 2024.
“We saw an upward momentum swing in the
second half of the financial year, making it
a true game of two halves.”
Tom Griffith Chief Executive Officer
Figure 1. Relative results
Full year
Half year
FYE 2024
FY-H1
FY-H2
H2 vs H1
FYE 2024 2024
2024
Fu
nds
under
Management
FuM $ change (billions)
Improved
0.8 0.2
0.6
FuM % change
Improved
8.4% 2.1%
6.3%
Absolute Performance
CLIM Emerging Markets Strategy
Improved
12.16% 4.59%
7.24%
CLIM International Strategy
Improved
13.00% 5.70%
6.90%
CLIM Opportunistic Value Strategy
Flat 13.10% 6.47%
6.20%
KIM Tax-Sensitive Fixed Income Strategy
Improved
8.99% 3.36%
5.45%
KIM Conservative Balanced Strategy
Improved
11.73% 4.22%
7.21%
Relative Performance
CLIM Emerging Markets Strategy
Improved
-1.42% -1.65%
0.33%
CLIM International Strategy
Improved
1.33% 0.07%
1.19%
CLIM Opportunistic Value Strategy
Improved
3.24% 0.69%
2.37%
KIM Tax-Sensitive Fixed Income Strategy
Improved
5.77% -0.28%
5.85%
KIM Conservative Balanced Strategy
Improved
2.64% -0.86%
3.39%
Net Flows
($’000)
Group
Improved (320,095) (294,301)
(25,794)
CLIM
Improved
(316,257) (248,582)
(67,675)
KIM
Improved
(3
,
8
38)
(4
5,
7
19)
41,881
$ Millions
-$20,000-$25,000 -$15,000 -$10,000 -$5,000 $0 $5,000 $10,000
Global Passive All Cap Equity
Europe Fixed Income – Corporate
US Passive Large Cap – Other Indices
Global Emerging Mkts All Cap Core Equity
Europe Fixed Income – Secured Loans
Europe Fixed Income – Government
US Municipal Fixed Income – All Duration
US High Yield Fixed Income
US Securitized Fixed Income – Mortgage
US Corporate Fixed Income
Negative Prior Four Quarters vs. Q1 2024
Source: Nasdaq eVestment Asset Flows
Figure 2. Largest shifts to net inflows Q1 2024
City of London Investment Group PLC Annual Report 2023/2024 9
A leading indicator in the institutional
marketplace of potential future mandates
and subsequent inflows is the volume of
searches performed for a particular asset
class. Our data on flows and searches in
the investment management universe is
from Nasdaq eVestment Advantage.
According to Nasdaq eVestment
Advantage, EM strategies were a primary
focus area for research undertaken by
institutional investors globally and the top
strategy researched by institutions in
North America during Q1 calendar year
(CY) 2024 as compared to Q1 CY 2023
as shown in Figure 3. Substantiating this
trend further, more recent data obtained
from eVestment shows a 32% increase
in EM product searches across the
investment universe from Q2 CY 2023
to Q2 CY 2024.
A positive view towards the asset class is
only part of the story; there also needs to
be a compelling reason for institutional
asset allocators to choose an active
manager. Figure 4 reflects the rolling 90-
day Size Weighted Average Discount
(SWAD) of the largest account in CLIM’s
longest-tenured EM composite over the
past five years. While there has been some
discount narrowing from the extremes in
2020 through 2022, the wide discounts
reflect the value in EM CEFs.
Overview Financial statements Shareholder informationGovernanceStrategic report
APAC
North America
EMEA
Source: Nasdaq eVestment Advantage
Global Emerging Mkts All Cap Core Equity
Global All Cap Core Equity
US Large Cap Value Equity
Global Large Cap Core Equity
Global Emerging Mkts All Cap Core Equity
Global All Cap Core Equity
Global Large Cap Core Equity
Global All Cap Core Equity
Global Emerging Mkts All Cap Core Equity
0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00%
2023
Q1 2024
Figure 3. Primary areas of focus across regions: Q1 2024 vs Q1 2023
% Discount
-14
-15
-16
-17
-18
-19
30 Jun 19
30 Sep 19
31 Dec 19
31 Mar 20
30 Jun 20
30 Sep 20
31 Dec 20
31 Mar 21
30 Jun 21
30 Sep 21
31 Dec 21
31 Mar 22
30 Jun 22
30 Sep 22
31 Dec 22
31 Mar 23
30 Jun 23
30 Sep 23
31 Dec 23
31 Mar 24
30 Jun 24
*Represents the largest segregated account managed against the S&P Emerging Frontier Super Composite Net TR BMI
Source: CLIM
Figure 4. Size Weighted Average Discount (SWAD) – Representative Account*
3-Month rolling average portfolio discount June 2019 to June 2024
Annual results
The Group’s FuM increased by 8.8% from
$9.4 billion to $10.2 billion, revenue by
1.0% from $65.5 million to $66.2
million, and net client outflows of $320
million. All strategies other than EM had
positive relative performance over the
financial year.
10 City of London Investment Group PLC Annual Report 2023/2024
CHIEF EXECUTIVE OFFICER’S STATEMENT
CONTINUED
Strategic report
*Refer to page 30 for the financial review.
Figure 5. CLIG – FuM by line of business ($m)
30 June 2021 30 June 2022 30 June 2023 30 June 2024
% of % of
% of % of
% of % of
% of % of
CLIM CLI
G
CLIM CLIG CLIM CLIG CLIM CLIG
CLIM $m $m total $m total total $m $m total $m $m total
Emerging Markets 5,393 72% 47% 3,703 64% 40% 3,580 61% 38% 3,568 56% 35%
International 1,880 25% 17% 1,812 32% 20% 1,983 34% 21% 2,394 38% 23%
Opportunistic Value 231 3% 2% 193 3% 2% 244 4% 3% 251 4% 3%
Frontier 13 0% 0% 9 0% 0% 9 0% 0% 10 0% 0%
Other/REIT 13 0% 0% 74 1% 1% 88 1% 1% 94 2% 1%
CLIM total 7,530 100% 66% 5,791 100% 63% 5,904 100% 63% 6,317 100% 62%
30 June 2021 30 June 2022 30 June 2023 30 June 2024
% of % of
% of % of
% of % of
% of % of
KIM CLIG KIM CLIG KIM CLIG KIM CLIG
KIM $m $m $m $m total $m $m total total $m total total
Retail 2,804 72% 24% 2,419 70% 26% 2,441 69% 26% 2,655 68% 26%
Institutional 1,115 28% 10% 1,014 30% 11% 1,079 31% 11% 1,269 32% 12%
KIM total 3,919 100% 34% 3,433 100% 37% 3,520 100% 37% 3,924 100% 38%
CLIG total 11,449 100% 9,224 100% 9,424 100% 10,241 100%
Profit before profit-share, EIP, share
option charge and investment gains* was
$39.3 million (2023: $39.0 million),
profit before tax was $22.6 million (2023:
$22.1 million) and profit after tax was
$17.1 million ($17.5 million). Underlying
profit after tax was $20.6 million (2023:
$21.2 million); the difference to the profit
after tax was due to the adjustment of
gain on investments and amortisation of
intangibles (net of tax). Refer to page 30
for further information.
Inclusive of our regulatory and statutory
capital requirements, cash and cash
equivalents were $33.7 million (2023:
$28.6 million).
As a result of this financial performance,
we are happy to announce that the Board
has once again recommended a final
dividend of 22p per share (2023: 22p),
subject to approval by shareholders at
the Group’s Annual General Meeting
(AGM) to be held on 28th October 2024.
This would bring the total dividend for
the year to 33p per share (2023: 33p).
Rolling five-year dividend cover based on
underlying profits is 1.19 (2023: 1.24),
slightly below our target of 1.20.
Please refer to Figure 6 for CLIG’s
dividend history and our website at
https://clig.com/dividend-cover/ for the
dividend cover chart, which provides a
template for determining cover based on
a number of variables.
The Group changed its presentational
currency this year, having reported its
FY 2023 results in sterling ahead of a
switch to US dollars. Consistent with
previous years, the Group’s revenue is
almost entirely in US dollars, whilst the
costs are approximately two-thirds in
US dollars and the remaining one third
are primarily in sterling. A stronger US
dollar improves our profit through
making the sterling-incurred costs
relatively lower. Conversely, a weaker US
dollar relatively increases the weight of
those sterling costs as well as the impact of
the sterling-denominated dividend, while
the US dollar revenue is flat.
The US dollar weakened by an average
of 4% during the year as compared to
sterling and negatively impacted the
Group’s profit before profit-share, EIP,
share option charge and investment gains*
by c.$0.4 million.
Figure 6. Dividend history
Pence per share Dividend cover* Pence per share
Total
Special (inc. special
FY Interim Final Total 1yr Rolling 5yr dividend dividend)
2005-06 8.6 – 8.6 1.48 n/a – 8.6
2006-07 3.0 7.0 10.0 1.99 n/a – 10.0
2007-08 6.0 13.5 19.5 1.51 n/a – 19.5
2008-09 5.0 10.0 15.0 1.05 n/a – 15.0
2009-10 7.0 15.0 22.0 1.28 1.46 – 22.0
2010-11 8.0 16.0 24.0 1.44 1.45 – 24.0
2011-12 8.0 16.0 24.0 1.40 1.34 – 24.0
2012-13 8.0 16.0 24.0 1.04 1.24 – 24.0
2013-14 8.0 16.0 24.0 0.87 1.24 – 24.0
2014-15 8.0 16.0 24.0 1.10 1.17 – 24.0
2015-16 8.0 16.0 24.0 0.96 1.07 – 24.0
2016-17 8.0 17.0 25.0 1.46 1.09 – 25.0
2017-18 9.0 18.0 27.0 1.47 1.17 – 27.0
2018-19 9.0 18.0 27.0 1.30 1.26 13.5 40.5
2019-20 10.0 20.0 30.0 1.01 1.24 – 30.0
2020-21 11.0 22.0 33.0 1.46 1.34 – 33.0
2021-22 11.0 22.0 33.0 1.34 1.32 13.5 46.5
2022-23 11.0 22.0 33.0 1.11 1.24 – 33.0
2023-24 11.0 22.0 33.0 1.01 1.19 – 33.0
Proposed dividend *Excluding special dividends Source: CLIG
Overview Financial statements Shareholder informationGovernance
City
of London Investment Group PLC
Annual Report 2023/2024
11
Share Price KPI
CLIG targets a total return (share price
plus dividends) to compound annually
in a range of 7.5% to 12.5% over a
five-year period. For the five years ended
30th June 2024, the total return was
34.7%, or 6.2% annualised (source,
Bloomberg). The environment for UK
listed asset managers has been negative
for the past three years due to the
broader shift of underlying investors to
passively managed vehicles. We go into
additional detail on the underlying
investment performance and flows in
the Business and Investment Review
on page 12, which provides additional
information to shareholders on our
market positioning.
Cybersecurity
On 19th July 2024, a software update by
CrowdStrike impacted machines running
Microsoft Windows’ operating system.
This widespread incident demonstrated
the vulnerability of global systems to IT
and cybersecurity events. In this case there
was no malicious actor involved but there
often is, and that constitutes one of the
most significant and real risks the
company faces. CLIG was well prepared
to mitigate the CrowdStrike incident, with
our Singapore office providing an early
warning system and both the London
and US teams working out-of-hours to
execute our incident response policy.
Consequently, all offices were fully
functional by the time the US markets
opened, minimising the potential impact.
To mitigate the wider cybersecurity risk,
we provide monthly training and
education to employees. Additionally, our
IT department continues to increase their
use of cyber defence tools and procedures,
working alongside our third-party
cybersecurity vendor who leverage their
extensive capabilities to oversee our
Security Operations Centre.
Environmental reporting update
In the previous years, we have committed to:
• Continue to develop our understanding
of climate-related risk at Board level and
across the employee base;
Strategic report
• Identify and review the tools to enhance
our understanding of how climate-
related risks impact our business;
• Continue to develop our path to a net
zero transition; and
• Make a commitment to reach net zero
emissions by a particular date, which is
2050 at the latest.
As we reported in our interim statement,
CLIG completed its first offset of carbon
emissions. The Group purchased carbon
credits for the carbon emitted primarily
from business travel undertaken by Group
employees during the current financial
year. CLIG’s offset purchases come from
the Gold Standard marketplace.
We note recent market developments,
specifically from The Integrity Council for
the Voluntary Carbon Market and their
ongoing carbon-crediting programs that
meet the high-integrity criteria set out in
its Core Carbon Principles (CCPs). Gold
Standard is amongst the programs to
become CCP-eligible. For any future
offsets, we will also consider CCP
labelling. The Group remains open about
documenting its emissions and
documenting the steps we are taking to
avoid, eliminate and reduce where we can,
and to offset what we cannot.
One of the perennial themes at CLIG is
“constant improvement,” and so we look
forward to seeing how carbon offset
standards evolve and how we can best
position ourselves to ensure any offsets we
purchase are put towards robust emissions
reduction projects.
Please see page 42 for additional
information on these important initiatives.
UK Corporate Governance
As readers may be aware, the Financial
Reporting Council (FRC) issued the
updated UK Corporate Governance
Code in January 2024. The new
Provision 29 enhanced the responsibility
of the Board to not only establish, but
also oversee the monitoring of its
effectiveness and review the Group’s
internal control framework. The Board
has formally created an Internal Audit
(IA) function to support them in
meeting the requirements of Provision
29. During the financial year 2024/25,
the IA function will carry out a complete
mock process, ahead of it being fully
operational and in place, with effect
from 1st July 2025.
We welcome the recent changes to the UK
Listing Rules published by the Financial
Conduct Authority (FCA) in July 2024.
These changes are intended to make
London a more attractive and competitive
place for companies to list and raise
capital, while maintaining high standards
of governance and investor protection.
Mark Dwyer retirement
As announced on 3rd October 2023,
CLIM’s Chief Investment Officer Mark
Dwyer retired from the Company effective
30th June 2024. We are immensely
grateful for Mark’s leadership and diligence
in over two decades with the Group and
wish him a long and happy retirement.
CLIM’s investment leadership now rests
with the senior portfolio managers, all of
whom have extensive experience with the
Group, with an average tenure of nearly
twenty years at CLIM.
Closing thoughts
I would like to thank CLIG’s employees
across our four offices: London, West
Chester, Rochester and Singapore. The
Board and management recognise the
commitment and loyalty shown by our
teams in propelling the Group forward
and look forward to new challenges in
the year ahead.
Tom Griffith
Chief Executive Officer
23rd September 2024
BUSINESS AND INVESTMENT REVIEW
12 City of London Investment Group PLC Annual Report 2023/2024
Strategic report
Funds under Management (FuM) were
$10.2 billion as at 30th June 2024, an
increase of 8.8% as compared to $9.4
billion as at 30th June 2023. The main
theme for the year was one of steady
progress focused on rebuilding the
Emerging Markets (EM) performance
track record, client retention – including
reducing outflows – and cost synergies
across the Group.
Flows & performance
Net investment outflows reduced
significantly to $26 million in the second
half of the financial year, from $294
million in the six months ended 31st
December 2023. Net outflows from the
EM strategy included a $100 million
transfer of a long-term client who
reallocated within CLIM from the EM
strategy to the International Equity
(INTL) strategy, due to their underlying
asset allocation decision. An additional
promising development is that KIM saw
net inflows of $42 million over the
second half of the financial year. Figure 1
shows the underlying data of net
investment flows over the first and
second half of the financial year, to
provide context around the shift in
sentiment during the year.
The total net investment outflows of
$320 million were in large part down to
clients reducing their exposure to EM due
to ongoing geopolitical volatility. By
contrast, INTL strategies attracted more
than $150 million in net new inflows over
the twelve-month period. Attractive
discounts in the strategies continue to be
the focus of marketing efforts across the
Group’s asset classes.
Investment performance was ahead of
the benchmark for the majority of the
Group’s strategies during the financial year.
CLIM’s INTL, Opportunistic Value (OV)
and Frontier Markets outperformed, while
EM equity lagged its index over the
period. On the EM equity side, we have
seen improved relative performance since
1st January 2024, as reflected in Figure 2,
showing CLIM vs EM index over the
three months, six months and twelve
months to 30th June 2024.
After an operational review, the EM and
International REIT strategies were closed
due to lack of institutional interest in the
asset class.
KIM’s Fixed Income strategies, International
Equity, Conservative Balanced and Cash
Management strategies outperformed their
market indices over the period, while the
US Equity strategy lagged its benchmark.
The ability to capture discount volatility of closed-end funds has proved to be a
persistent and exploitable inefficiency over the decades, as evidenced by long-
term outperformance versus the benchmark at both CLIM and KIM.
Figure 1. Net investment flows ($000’s)
Full year Half year
FYE 2022 FYE 2023 FYE 2024 FY-1H2024 FY-2H2024
CLIM
Emerging Markets (315,770) (205,924) (424,101) (171,151) (252,950)
International 452,554 (50,824) 153,371 (89,815) 243,186
Opportunistic Value 617 34,942 (33,237) 15,015 (48,252)
Frontier (4,748) – – – –
Other/REIT 79,133 (5,709) (12,290) (2,631) (9,659)
CLIM total 211,786 (227,515) (316,257) (248,582) (67,675)
KIM
Retail (106,444) (141,952) (39,587) (40,031) 444
Institutional (3,302) 12,530 35,749 (5,688) 41,437
KIM total (109,746) (129,422) (3,838) (45,719) 41,881
CLIG total 102,040 (356,937) (320,095) (294,301) (25,794)
Rate of return (%)
City of London Investment Management Company Limited: Emerging Markets
S&P: Emerging Front Super Comp BMI Net
6 Months
30
25
20
15
10
5
0
-5
1 Year
3 Months
Figure 2. CLIM vs EM Index over 3, 6 and 12 months to 30th June 2024
3 Months 6 Months 1 Year
Rk Rk Rk
5th percentile 7.85 14.39 27.17
25th percentile 5.76 10.18 16.38
Median 4.48 7.28 12.39
75th percentile 2.32 4.38 8.65
Observations 406 405 402
CLIM Company Limited: Emerging Markets 5.28 34 7.58 47 12.40 50
S&P: Emerging Front Super Comp BMI Net 5.09 39 6.91 56 13.58 41
Overview Financial statements Shareholder informationGovernance
City of London Investment Group PLC Annual Report 2023/2024 13
Closed-end fund (CEF)
environment and outlook
The Group’s two operating subsidiaries,
CLIM and KIM, both invest primarily in
CEFs for the benefit of their respective
clients. The key driver for both CLIM and
KIM is their ability to independently
successfully capture the discount volatility
inherent in CEFs. The ability to capture
discount volatility has proved to be a
persistent and exploitable inefficiency over
the decades, as evidenced by long-term
outperformance versus the benchmark
at both CLIM and KIM.
The recent discount cycle has been
challenging, with a correlated de-rating
across asset classes and jurisdictions. Using
the UK-listed market as an example, the
discount headwinds of the last two and a
half years are clear (see Figure 3). To put
this in context, the last time the sector
traded so cheaply was in the weeks
immediately post the collapse of Lehman
Brothers in 2008. As of 30th June 2024,
there had been a slight recovery to a
14.5% discount. The average discount
over the last ten years is 6.1%.
Strategic report
-25
-20
-15
-10
-5
0
5
July
2023
July
2022
July
2021
July
2020
July
2019
July
2018
July
2017
July
2016
July
2015
July
2014
Source: Winterflood Securities, Refinitiv, FTSE as at 30 June 2024
% Discount
Figure 3. Ten-Year sector average discount – UK
CLIM
The Emerging Markets CEF strategy utilises CEFs to provide
exposure to global emerging markets.
The International Equity CEF strategy utilises CEFs to provide
exposure to global developed markets (excluding US).
The Opportunistic Value CEF strategy provides exposure to a
variety of asset classes via CEFs with a go anywhere approach.
Both taxable and tax-exempt products are available.
The Frontier Emerging Markets CEF strategy is an extension
of the EM core equity product focusing on the smallest or pre-
emerging markets with high growth potential.
The Listed Private Equity strategy utilises our experience with
CEFs to provide exposure to private equity globally.
The Global Equity CEF strategy utilises CEFs to provide
exposure to global developed markets (including US).
KIM
The Conservative Balanced and Growth Balanced strategies
utilise a combination of CEFs and other securities, providing
exposure to fixed income and equities in US and global markets.
The Tax-sensitive fixed income strategy utilises a combination
of CEFs and other securities, providing exposure to US
tax-exempt fixed income.
The Taxable fixed income strategy utilises a combination of
CEFs and other securities, providing exposure to US taxable
fixed income.
The Equity strategy utilises a combination of CEFs and other
securities, providing exposure to US and global equity markets.
The Cash Management strategy utilises
a combination of CEFs and other securities providing exposure
to US short-term fixed income.
PRODUCTS
BUSINESS AND INVESTMENT REVIEW
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14 City of London Investment Group PLC Annual Report 2023/2024
Strategic report
Encouragingly, capital markets have
noticed these distortions and are starting
to fix them, as they did in 2009. Hedge
funds and other fast-moving investors
have seen the CEF market as a good
opportunity to buy low and sell high,
using various levers to shrink discounts.
Activist investors have also come back to
buy solid assets at distressed prices, in
structures that can be unwound. Moreover,
Boards are actively taking steps to increase
shareholder value and reduce discounts.
CEF prices have stopped falling but are
still far from their historical levels.
The overall CEF market is thus undergoing
a regime change. The valuation dislocation
of the last two years and the prolonged
relative underperformance of active
managers has driven a predictable
evolution. Specifically:
• Capital is being retired from the sector,
after a fifteen-year net issuance cycle.
• The recent trend of take-privates, wind-
downs and mergers & acquisitions is
well anchored.
• The evolution of shareholder registers
from passive to engaged, and activist
shareholders, has increased the pace of
both of the above.
All of these represent a necessary condition
for a more generalised normalisation in
valuations.
Annualised Rate of Return (%)
0
8
6
4
2
10
CLIM Emerging Markets Global SMA Composite
S&P: Emerging Front Super Comp BMI Net
MSCI: MSCI EM TR Index Net
CLIM Global Developed CEF International Equity Composite
MSCI Index: MSCI ACWI ex-US-ND
CLIM Opportunistic Value Composite
Index: Blended 50/50 MSCI ACWI/Barclays Global Agg Index
KIM Conservative Balanced Composite
Morningstar Mod Con Tgt Risk TR USD
CLIM OV
CLIM Intl CEF
KIM
Conservative
Balanced
*CLIM and KIM returns are compared to their respective eVestment and Morningstar universes. The Opportunistic Value Composite is shown since the strategy’s inception on 1 September 2014.
The above returns are annualized and presented as gross of fees performance figures, which do not reflect the deduction of investment management fees. The Global Emerging Markets SMA
Composite, S&P Emerging Frontier Super Composite BMI Net TR, and MSCI EM Net TR Index are shown against the eVestment Global Emerging Markets Equity Universe of which 90.6% has
been updated. The Global Developed CEF International Equity Composite and MSCI ACWI ex-US Net TR Index are shown against the eVestment All ACWI ex-US Equity Universe of which 92.5%
has been updated. The Opportunistic Value Composite and the Blended 50/50 MSCI AWCI/Bloomberg Global Agg Index are shown against the eVestment All Global Balanced/TAA Universe of
which 78.2% has been updated. The KIM Conservative Balanced Composite and Morningstar Mod Con Tgt Risk TR USD Index are shown against the Morningstar Separate Accounts – U.S. –
Moderately Conservative Allocation Universe.
Data is as of 30th June 2024. Past performance is no guarantee of future results.
Source: eVestment Analytics System, BNY Mellon, City of London Investment Management Company Limited, MSCI, Bloomberg, Morningstar, KIM, S&P
CLIM EM CEF
Figure 4. Ten Year Peer Group Quartile Chart
Overview Financial statements Shareholder informationGovernance
City of London Investment Group PLC Annual Report 2023/2024 15
Strategic report
Capacity
The Group’s return to growth strategy
continues to focus its marketing efforts
on the consultants that dominate the new
business flows in the sector. We calculate
there to be c.$6 billion of spare capacity at
CLIG in the CEF universe ($4 billion
between EM, INTL and OV, $1 billion in
US Municipal Bonds, $1.2 billion across
US Fixed Income and Equity strategies).
Besides the consultant focus, marketing
resources for KIM are geared towards
high-net-worth individuals, family offices
and the Registered Investment Advisor
(RIA) channel in the US.
Aiding this outreach is the fact that
CLIM’s Global Strategy will have a three-
year track record in December 2024, and
that CLIM’s Listed Private Equity strategy
is drawing renewed client interest.
KIM strategies
KIM delivered positive returns in
FY 2024, with four of its six strategies
outperforming their respective benchmarks
by more than 250 bps. KIM clients
benefited from its opportunistic exposure
to US high yield and municipal bond
CEFs, which rallied on the back of a
strong economic recovery and narrowing
discounts (see Figure 5). KIM also saw
gains from its technology and quality
factor holdings in US and international
equities, as well as from CEF activism and
semiconductor-related funds.
The KIM Conservative Balanced
composite net investment returns for the
rolling one year ended 30th June 2024
were 11.73% vs. 9.12% for the
Morningstar US Fund Allocation –
30% to 50% Equity category in USD.
The KIM Growth Balanced composite net
investment returns for the rolling one year
ended 30th June 2024 were 13.76% vs.
10.93% for the Morningstar Average
Balanced Fund category in USD.
The KIM Tax-Sensitive Fixed Income
composite net investment returns for the
rolling one year ended 30th June 2024
were 8.99% vs. 4.36% for the
Morningstar Average Municipal Bond
Fund category in USD.
The KIM Taxable Fixed Income composite
net investment returns for the rolling one
year ended 30th June 2024 were 9.30% vs.
4.75% for the Morningstar Average
General Bond Fund category in USD.
The KIM Equity composite net investment
returns for the rolling one year ended
30th June 2024 were 16.65% vs. 14.72%
for the Morningstar 65% Average
Domestic Fund/35% Average International
Stock Fund category in USD.
The KIM Cash composite net investment
returns for the rolling one year ended
30th June 2024 were 5.97% vs. 4.53%
for the BOA ML benchmark in USD.
CLIM strategies
CLIM Emerging Markets (EM)
CLIM’s EM strategy returned 12.2% net
of fees vs. 13.6% for the S&P EM
Frontier Super Composite BMI Index, as
it lagged the benchmark by 140 bps due
to unfavourable country allocation and
weak NAV performance. However, we
were able to generate positive discount
alpha by exploiting the discount volatility
and engaging with Boards to improve
shareholder value. We saw several mergers,
liquidations and buybacks that helped
narrow the discounts in our portfolio.
We remain optimistic about the prospects
for EM equities, which offer attractive
valuations and exposure to growth sectors
such as artificial intelligence. We believe
that our active and opportunistic approach
will benefit from a shift in sentiment
towards this underappreciated asset class.
05 07 09 11 13 15 17 23 2403020100
Source: Bloomberg
04 0806 10 12 14 1816 19 20 21 22
% Discount
5
0
-5
-10
-15
Figure 5. Municipal Bond CEF Universe – Average Discount to Net Asset Value
BUSINESS AND INVESTMENT REVIEW
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16 City of London Investment Group PLC Annual Report 2023/2024
Strategic report
CLIM International (INTL)
Developed Markets performed strongly
over the last twelve months, led by the US
market, which itself was dominated by the
“Magnificent Seven” technology and
communication services companies
namely Apple, Alphabet, Amazon, Meta,
Microsoft, Tesla and Nvidia. Nvidia, in
particular, garnered much attention as
being the leader in providing
semiconductor chips for the Large
Language Models that underpin artificial
intelligence applications. Within non-US
markets these themes were played out in
companies such as the ASML and Taiwan
Semiconductor, which provided strong, if
not magnificent, returns. Other market
themes included the growth in the use of
obesity drugs whereby Denmark’s Novo
Nordisk and the US’s Eli Lilly were the
leading providers and whose share prices
benefitted accordingly. Among non-US
Developed markets, the local Japanese
market was also particularly strong, finally
surpassing its previous peak in 1989
following the bursting of its asset price
bubble and the subsequent decades of
deflation, albeit for international investors
roughly half of these gains were eroded
due the weakness of the Japanese Yen.
CLIM’s INTL strategy returned 13.0% net
of fees vs. its benchmark MSCI ACWI ex-
US Net TR Index which returned 11.6%,
outperforming by 140 bps. Country
allocation was positive, aided by out of
benchmark exposure to the US market,
particularly to the technology sector, as well
as underweight exposure to European ex-
UK markets. Conversely, our underweight
exposure to EM, especially tech-heavy
Taiwan, detracted from returns. Mid-and-
smaller-company exposure also detracted
from returns as large caps continued to
outperform. Discounts remained
historically wide in the INTL universe
but was a positive contributor overall as
discount narrowing was captured largely
through corporate initiatives, such as tender
offers, whereby the CEF returns capital to
the shareholders at the fund’s net asset value.
CLIM’s long history of corporate
engagement continues to bear fruit for the
INTL strategy as we proactively work with
CEF Boards to create sustainable discount
management policies in a constructive
approach focused on creating a fair deal for
shareholders and aligned with our long-
term approach to investing.
CLIM Opportunistic Value (OV)
The OV strategy delivered strong returns
in FY 2024, rising 13.1% net of fees vs.
its benchmark Blended 50/50 MSCI
ACWI/Barclays Global Agg Index,
which returned 9.9%, outperforming by
320 bps. The portfolio benefited from
investing in high-conviction, event-driven
situations with positive discount alpha
and catalysts. The largest gain came from
a takeover bid for the Hipgnosis Songs
Fund. The strategy is well-positioned to
exploit the “Regime Change” theme and
attract additional capital. Single-sleeve
opportunistic mandates in areas of the
fixed income market performed strongly
over the period, most notably US
High Yield and US Municipal Bond
CEF strategies.
Overview Financial statements Shareholder informationGovernance
OUR BUSINESS MODEL
While we remain both proud and protective of our ‘boutique’ status, we seek to meet client needs across a suite of products anchored by
our core expertise in the global universe of CEFs.
City of London Investment Group PLC Annual Report 2023/2024 17
We support teams. What this means is that we discourage the cult of the individual or ‘star’ fund manager, believing that the
risks associated with a star culture are detrimental to both shareholders and clients.
Strategic report
• Emerging Markets
• International Equity (excluding US)
• Opportunistic Value
• Frontier
• Listed Private Equity
• Global Equity (including US)
• Taxable Fixed Income
• Tax-Sensitive Fixed Income
• Equities
• Growth Balanced
• Conservative Balanced
• Cash Management
CLIM (INSTITUTIONAL FOCUS)
KIM (HNW FOCUS)
• Management team of 13 senior managers
• Average tenure of 14 portfolio managers is 17 years
• Management team of 4 senior managers
• Average tenure of 7 portfolio managers is 15 years
CLIM (INSTITUTIONAL FOCUS)
KIM (HNW FOCUS)
WHAT WE DO: For many years since the Group was founded, CLIM’s expertise was very specific to
closed-end funds which offered emerging markets exposure. Over time, CLIM has diversified into a
multi-strategy fund manager. KIM became part of the CLIG Group with effect from 1st October 2020.
HOW WE MANAGE: The way in which we manage our business is different too. We are very
risk-averse. Profits, margins and costs are carefully managed to provide our employees with
appropriate remuneration and shareholders with sustainable dividends.
OUR BUSINESS MODEL
CONTINUED
18 City of London Investment Group PLC Annual Report 2023/2024
Strategic report
Stage 1
Analyse macroeconomic
data on 32 emerging markets
Stage 2
Rank emerging markets based on 3-pillars
incorporating macro, market and political criteria
Stage 3
Re-rank emerging markets based upon relative pricing
of country-specific securities
Stage 1
Macro process (top-down) Country allocation
Stock picking (bottom-up) Stock selection
Corp.
activity
Liquidation dates
Discounts to Net Asset Value
Expertise of the Fund Managers
Stage 2
Stage 3
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Communication – The 24hr trading and management clock (GMT)
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MIDNIGHT
MIDDAY
UK/US
IM Meeting
Plus:
• Emails • Blogs • Intranet • Video Conference
US/Singapore
Ad hoc Review
Singapore/UK
IM Meeting
Weekly
Video Conference
on Monday
(All offices attend)
HOW WE DO IT: At CLIM, we have developed and nurtured a team investment process
that does not rely on ‘star’ fund managers, but rather upon experienced fund managers using
analytical procedures that can produce repeatable and sustainable first or second quartile
performance versus our peers.
CLIM’S INVESTMENT PROCESS
CLIM’S COMPETITIVE ADVANTAGE
Our process employs an array of
proprietary tools for analysing and
identifying value. These quantitative tools
supplement both macroeconomic analysis
and over thirty years of trading expertise.
This process has delivered long-term
relative outperformance combined with
low volatility relative to our clients’
benchmarks through both bull and
bear markets.
We believe that our approach and
philosophy differs significantly from our
peers. Our investment process identifies
opportunities to capture pricing anomalies
in securities trading at a discount to their
net asset value. Our resolute focus is on
generating consistent investment
performance – over time and through
economic cycles within a controlled risk
environment.
Overview Financial statements Shareholder informationGovernance
City of London Investment Group PLC Annual Report 2023/2024 19
Top-down analysis
Global macroeconomic analysis / country, region
and sector analysis / Inflation, interest rates, GDP /
asset allocation targets
Bottom-up analysis
Individual security assessment / Fundamentals
Quantitative
and
qualitative
research
Ongoing
portfolio
monitoring
Select securities
with attractive
risk-adjusted
return potential
Portfolio
construction
Strategic report
KIM has been an active investment manager since the Company’s inception in 1986. With the focus
of managing risk, our Investment Committee formulates our economic overview by reviewing the
economic cycle, analysing historical valuations, analysing growth and policy prospects, and
analysing liquidity and economic momentum.
KIM’S INVESTMENT PROCESS
KIM’S COMPETITIVE ADVANTAGE
By conducting our own proprietary,
in-house research, our strategists, analysts,
portfolio managers, and traders work
together to generate independent and
unbiased ideas.
Our Company’s size also allows us to
capitalise on fundamentally attractive
market inefficiencies as they arise.
Our insight and extensive experience in
closed-end funds identifies opportunities
others may miss. It also allows us to avoid
pitfalls that others may not be aware of.
IN-HOUSE RESEARCH
EXTENSIVE EXPERIENCE
AGILITY
Once an overview is established, a target investment matrix is then created. Sector weightings,
yield curve positioning, and duration targets are guided by this research. Analysts continuously
conduct a security-by-security analysis to identify and capitalise on market inefficiencies.
Our focus is on the advantages offered by purchasing securities, particularly CEFs, at a
discount. However, we also utilise index-based securities if CEFs are not trading at what we
believe are attractive discounts. Once purchased, holdings are analysed on an ongoing basis.
KIM continuously monitors key investment variables, as well as corporate governance
attributes to assess whether shareholder value is being maximised.
OUR STRATEGY AND OBJECTIVES
20 City of London Investment Group PLC Annual Report 2023/2024
Strategic report
Our responsibility is to keep
these three stakeholders in
balance (avoid conflicts) and
to ensure that each of their
interests is safeguarded.
Expect: Superior investment performance,
Openness and accountability, Ethical
treatment.
Expect: Fair treatment, Open
communication, To share in success.
Expect: Relevant risk controls, Quality
earnings, Cost controls.
OUR STRATEGIC GOAL WHY IT IS IMPORTANT
Outperform CLIG’s two operating subsidiaries are active managers, and their
job is to add value over and above a relevant benchmark through
an investment cycle which we define as five years
.
Retain
employees
As shareholders would expect, in a Group that has always used
a partnership approach, we take a very long-term view with
regard to remuneration.
Increase FuM
from long-term
investors
The client base of CLIG’s two operating subsidiaries is long-term
and US based, and includes pension funds, foundations,
endowments and other institutional money managers.
Remain open in
our dealings with
shareholders, available
and accountable
We believe that our shareholders have a right to know what
to expect from us.
Keep costs
down
We keep costs down because we believe that the assets
over which we provide stewardship are, by definition, not
ours but are owned by CLIG shareholders.
Corporate citizenship Over the past few years there has been a realisation that
corporations have a responsibility both for, and separately
within, the community.
Continue to diversify
our business
We see this as an important component of our strategy to make
the business more robust, manage risk and enhance long-term
shareholder return.
T
H
E
C
L
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N
T
S
P
A
Y
T
H
E
B
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S
T
H
E
S
H
A
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E
H
O
L
D
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R
S
O
W
N
T
H
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B
U
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N
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EXPECT. . .
• Relevant risk
controls
• Quality earnings
• Cost controls
EXPECT. . .
•
Superior
investment
performance
•
Openness and
accountability
•
Ethical
treatment
EXPECT. . .
• Fair treatment
• Open communication
• To share in success
THE CLIENTS:
PAY THE BILLS
THE EMPLOYEES:
MANAGE THE BUSINESS
THE SHAREHOLDERS:
OWN THE BUSINESS
WHY IT IS IMPORTANTOUR STRATEGIC GOAL
HOW ARE WE DOING
CLIM
• Our investment horizon is five years, and over this period the three strategies that make up ~99% of CLIM’s Funds under
Management are mostly outperforming their peers and benchmark.
KIM
•
Long and short-term performance remains solid, with the KIM investment process continuing to add value on behalf
of clients in the face of volatile markets.
Investment
performance
page 24.
Our remuneration policy is stress-tested in a number of ways:
• We have to deal with volatile earnings, thus our need to keep salaries towards the lower end of market levels.
• With four offices (not all of which are in financial centres) in three countries, we have to be aware
of different pay scales, policies, costs of living and tax rates.
Employee longevity
page 25.
We have always taken great pride in our client retention outreach programme, and remain open and accountable. Client entity longevity
page 25.
We take the opportunity to meet shareholders whenever possible. This might be at one-to-one meetings with our
larger institutional holders or at group meetings with advisers and individual shareholders. We try to make all of our
announcements clear and accessible. Refer to page 10 for our dividend history and page 22 for our dividend cover chart
and dividend policy.
Dividend paid and
proposed per share
pages 10 and 22.
A stable workforce limits the cost of recruitment and other costs related to employee turnover.
We do not work in expensive offices and when we travel we do not stay in five star hotels.
Keeping overheads down is good business practice as it provides more money for dividends, bonuses and reserves,
and thus assists with relative job security.
In addition, efforts are made to limit inter-office air travel. Internal meetings are almost exclusively conducted by
video conferencing.
Weighted average net
fee rate page 26.
Cost/Income ratio
page 26.
We encourage employee participation in both local events of national and global charities, as well as local community
specific events. Additionally, by the nature of our four-office structure, we are able to offer a wide array of community
involvement events to employees, and we have found that a greater variety allows for greater participation throughout
the year. In turn, this can also provide for meaningful results as some events will be chosen on a personal level and will
have a greater impact for specific employees and their families. These efforts and services work hand in hand to protect
cultures and customs not only within the community outreach programmes but also within the workplace.
Refer to details on
community contributions
referenced within the
corporate and social
responsibility policy
page 36.
The corporate goal of diversifying the Group's income by building strategies complementary to the flagship Emerging
Markets (EM) CEF strategy was, and continues to be, a priority. The merger with KIM has allowed that diversification to
occur more quickly, as the EM strategy has been reduced to 35% of CLIG as of 30th June 2024. Marketing efforts remain
focused on all strategies to grow the business.
FuM and diversification
page 27.
Overview Financial statements Shareholder informationGovernance
City of London Investment Group PLC Annual Report 2023/2024 21
*Refer to pages 24 to 27 of explanation of additional KPIs.
Strategic report
LINK TO
ADDITIONAL KPIs
HOW WE ARE DOING
22 City of London Investment Group PLC Annual Report 2023/2024
OUR STRATEGY AND OBJECTIVES
CONTINUED
Strategic report
Dividends
We have communicated and maintained a
policy of distributing a proportion of net
profits to shareholders by way of ordinary
dividends with a target of 1.2 times (1.2x)
coverage ratio over a rolling five-year
period based on underlying profits*. This
coverage ratio allows for the needs of the
three primary stakeholders to be balanced.
Receive a predictable and consistent income
stream at an attractive yield that drives
demand for the shares in the marketplace.
Retain a conservative amount of cash at the
corporate level to weather shocks due to the
volatility of underlying assets. This allows
for management to take advantage of
opportunities that arise during periods of
market dislocations when competitors and
the marketplace are stressed.
Have confidence that the underlying
business which they are investing in
will be an ongoing entity with stable
ownership/governance/employees.
Dividend policy
This policy was introduced in 2014 and
is reviewed every five years. This policy
was last reviewed in 2019 and has been
reviewed during the current financial
year. No changes were proposed.
It was designed to incorporate the required
flexibility to deal with the potential
volatility of CLIG’s income. This is going
to be applied with flexibility, with
approximately one-third payable as an
interim dividend and two-thirds as final
dividend.
Details are as follows:
• Dividend cover ratio of c.1.2 times
(1.2x) of the underlying earnings on a
rolling five-year basis.
• It will be assessed for appropriateness
annually.
• This Policy specifically takes into
account the implicit volatility in CLIG’s
earnings as a result of its significant
present exposure to emerging markets.
• While the cover is targeted as 1.2x of
the underlying earnings, this will
continue to be applied flexibly and the
annual dividend will approximate to
this cover on a rolling five-year average.
• The Board will take into account both
the CLIG budget for the next year and
market outlook when determining the
current year’s dividend.
Dividend cover chart
We have provided an illustrative framework
on our website at
https://clig.com/
dividend-cover/
to enable interested
parties to calculate our post-tax profits
based upon some key assumptions. The
dividend cover chart shows the quarterly
estimated cost of a maintained dividend
against actual post-tax profits for last year,
the current year and the assumed post-tax
profit for next financial year based upon
assumptions included in the chart.
SHAREHOLDERS
MANAGEMENT/EMPLOYEES
*This is an Alternative Performance Measure (APM). Please refer to page 30 for more details on APMs.
CLIENTS
Overview Financial statements Shareholder informationGovernance
City of London Investment Group PLC Annual Report 2023/2024 23
KEY PERFORMANCE INDICATORS
We retain the share price KPI to show the
total return of CLIG over a market cycle.
The goal of this KPI is for the total return
(share price plus dividends) to compound
annually in a range of 7.5% to 12.5% over
a five-year period. This KPI is meant to
stretch the management team, without
incentivising managers to take undue
levels of risk.
For the five years ended 30th June 2024,
CLIG’s cumulative total return was
34.7%, or 6.2% annualised. CLIG’s
management team is monitoring this
development, as the broad market declines
in the first half of FY 2024 precipitated this
underperformance. Since listing in April
2006, the annualised return is 11.8%.
-40%
-20%
0%
20%
40%
60%
80%
100%
*Note: CLIG LN rebased to 100 as of starting date
CLIG LN Equity (GBP)
Source: Bloomberg
Total return
30/06/2024
30/06/202330/06/202230/06/202130/06/202030/06/2019
CLIG five-year graph
Strategic report
Our focus is to create shareholder value.
KEY PERFORMANCE INDICATORS
CONTINUED
24 City of London Investment Group PLC Annual Report 2023/2024
Strategic report
Annualised % return
*CLIM and KIM returns are compared to their respective eVestment and Morningstar universes.
The above returns are annualized and presented as gross of fees performance figures, which do not reflect the deduction of
investment management fees. The Global Emerging Markets SMA Composite, S&P Emerging Frontier Super Composite BMI Net TR,
and MSCI EM Net TR Index are shown against the eVestment Global Emerging Markets Equity Universe of which 90.6% has been
updated. The Global Developed CEF International Equity Composite and MSCI ACWI ex-US Net TR Index are shown against the
eVestment All ACWI ex-US Equity Universe of which 92.5% has been updated. The Opportunistic Value Composite and the Blended
50/50 MSCI AWCI/Bloomberg Global Agg Index are shown against the eVestment All Global Balanced/TAA Universe of which
78.2% has been updated. The KIM Conservative Balanced Composite and Morningstar Mod Con Tgt Risk TR USD Index are
shown against the Morningstar Separate Accounts – U.S. – Moderately Conservative Allocation Universe.
Data is as of 30th June 2024. Past performance is no guarantee of future results.
Source: eVestment Analytics System, BNY Mellon, City of London Investment Management Company Limited, MSCI,
Bloomberg, Morningstar, KIM, S&P
14
12
10
8
6
4
2
0
-2
CLIM Emerging Markets Global SMA Composite
MSCI EM Net TR Index
CLIM
EM CEF
CLIM Global Developed CEF International Equity Composite
MSCI ACWI ex-US Net TR Index
CLIM Opportunistic Value Composite
Blended 50/50 MSCI ACWI/Bloomberg Global Agg Index
KIM Conservative Balanced Composite
Morningstar Mod Con Tgt Risk TR USD Index
KIM
Conservative
Balanced
CLIM
Intl CEF
CLIM
OV
S&P: Emerging Front Super Comp BMI Net
Five-year peer group* quartile chart
Our reputation depends on consistently
strong investment performance versus
both relevant benchmarks and peers.
Outperformance drives client retention
and provides the opportunity to expand
our client base.
As detailed in the business and investment
review, a significant majority of the Group’s
assets remain ahead of benchmark and in
line with peers over the five years.
Separate from our main KPI of CLIG’s total return (share price plus dividends) over
a market cycle, we have selected additional KPIs that we believe will enable
shareholders to measure the future viability of CLIG. These are as follows:
1. INVESTMENT PERFORMANCE
NON-FINANCIAL
Overview Financial statements Shareholder informationGovernance
City of London Investment Group PLC Annual Report 2023/2024 25
Headcount
Portfolio
Managers
Portfolio
Managers
2020 2021 2022 2023 2024
Other Other Portfolio
Managers
Other Portfolio
Managers
Other Portfolio
Managers
Other
Over 10 years
0-5 years
5-10 years
100
90
80
70
60
50
40
30
20
10
0
Employee longevity
2,000
1,500
1,000
500
0
Number of client entities
2021 (1,999)2020 (173) 2022 (1,967) 2023 (1,901) 2024 (1,927)
Over 10 years
0-5 years
5-10 years
Client entity longevity
Our employees are a major asset. We spend
time ensuring that we recruit, develop and
retain the right people to complement the
team, which in turn helps to create a stable
working environment.
95% of our 21 portfolio managers have
worked for Group subsidiary companies
for five or more years, and 50% of all
employees have worked for Group
subsidiary companies for over ten years.
We find that stability of investment
performance equates to stability of clients,
but in addition there needs to be a belief
amongst clients that both our investment
process will be maintained and that our
employees will remain in place.
We have an active client retention
programme in place which has both educated
and ensured that our clients understand even
more about our investment process. As at
30th June 2024, the Group had 884 client
entities in the over 10 years category (2023:
938), 482 in 5-10 years (2023: 400) and 561
in 0-5 years (2023: 563).
Strategic report
2. EMPLOYEE LONGEVITY
3. CLIENT ENTITY LONGEVITY
26 City of London Investment Group PLC Annual Report 2023/2024
70%
60%
50%
40%
30%
20%
10%
0%
Cost/income ratio
2022 202320212020 2024
Cost / income ratio
100
90
80
70
60
50
20
10
40
30
20242022 202320212020
0
Weighted average net fee rate based on average FuM (bps)
This is the weighted average net fee rate
earned by the Group. Changes in fee
rates, product and investor mix are the
principal factors that impact the weighted
average rate. In general, the change is on
account of a marginal reduction in the
proportion of CLIM’s assets in the EM
strategy from 61% in 2023 to 56% in 2024.
The chart opposite shows the annual net fee
income measured as a percentage of the
average annual FuM.
We believe cost control is an important
discipline for any business to be successful.
We look to balance the cost of growth and
development with stakeholder returns.
The cost/income ratio for the Group is
based on our total overheads before profit-
share, EIP, share options charge and gain on
investment to net fee income (as set out on
page 30) and was 42% in 2024 as compared
to 41% in 2023. The slight increase was due
to a combination of US dollar weakening
against sterling during the year and
inflationary increases in salary and other costs.
4. WEIGHTED AVERAGE
NET FEE RATE
5. COST / INCOME RATIO
KEY PERFORMANCE INDICATORS
CONTINUED
Strategic report
FINANCIAL
Overview Financial statements Shareholder informationGovernance
City of London Investment Group PLC Annual Report 2023/2024 27
The level of FuM is a key driver in the Group’s
profitability. Our main business development
strategy is to diversify our product range.
The merger with KIM has allowed that
diversification to accelerate. Refer to page 13
for our business outlook.
FuM in $ millions
2020 2021 202420232022
13,000
12,000
11,000
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
KIM – Institutional KIM – Retail CLIM – Other CLIM – Frontier
CLIM – Opportunistic Value CLIM – International CLIM– Emerging Markets
FuM by strategy
Strategic report
6. FuM AND DIVERSIFICATION
In the course of conducting our business operations, we are exposed to a variety of
risks, including market, liquidity, operational and other current and emerging risks
that may be material and require appropriate controls and ongoing oversight.
RISK MANAGEMENT
Group’s risk management framework
The CLIG Board has the ultimate
responsibility for setting the risk
management framework for the Group,
including discussing and agreeing what the
Group’s overall top risks are, which are
reviewed by the Board at each scheduled
Board meeting.
A Group-level risk register has been
established which identifies principal
current and emerging risks. The risk register
provides a measure of the principal risks
and a Red, Amber, Green (RAG) status
based on the level of risk, frequency and
mitigating controls in place.
CLIM’s Risk & Compliance Committee
(RCC) and KIM’s Compliance Committee
have the responsibility of the day-to-day
oversight of the risk management process at
the respective operating subsidiaries.
CLIM
CLIM’s Board has established an RCC,
which is co-chaired by CLIM’s Head of
Compliance and US Chief Compliance
Officer. The other members of the RCC
are the Executive Directors of CLIM,
CLIG and CLIM’s COO and CLIG’s
General Counsel. The purpose of the
RCC is to assist the CLIM Board in the
oversight, maintenance and development
of CLIM’s current and emerging risks
and compliance frameworks in adherence
with its risk appetite.
CLIM’s risk management process requires,
on a semi-annual basis, that each
department/line of business, via a
departmental risk assessment, review its
current and emerging risks and the business
processes that occur in each and assign
both an inherent and residual risk rating,
as whilst we cannot eliminate all risk, our
aim is to proactively identify and manage
those risks that have been identified.
The RCC meets quarterly to provide the
members with a regular forum at which to
ensure any relevant issues are discussed
and agreed upon. At its meetings, the
RCC reviews management information
such as the CLIM risk register, breaches
and errors, personal account dealing, other
business interests, gifts and hospitality,
complaints, AML updates including new
clients on-boarded, ongoing screenings,
capital adequacy, liquidity, employee
training, outsourcing and key regulatory
updates, as well as approving new or
updated CLIM policies.
The RCC via CLIM’s Head of
Compliance and US Chief Compliance
Officer reports to the CLIG Audit
& Risk Committee at each of its four
scheduled meetings.
KIM
The KIM Board has established a
Compliance Committee which is chaired
by KIM’s Chief Compliance Officer
(KIM CCO) and includes three other
members: KIM’s Chief Financial Officer;
Senior Vice President and Director of
Operations; and KIM’s Chief Investment
Officer/President.
The Committee’s purpose is to review
and assess the Company’s investment
adviser compliance programme in the
following manner: assist the KIM
CCO with administering the investment
adviser compliance programme; evaluate
the Company’s compliance with federal
securities laws; monitor compliance with
the Company’s policies and procedures
as set forth in the Compliance Manual
and Code of Ethics; oversee and assess
the Company’s Information Security
policy and Business Continuity and
Disaster Recovery Plan; oversee and
assess the Company’s Identity Theft
Prevention Programme; and address
other matters that the Management
Committee deems appropriate.
The Committee meets as often as it may
be deemed necessary or appropriate in
its judgement, either in person or
remotely, and at such times and places
as the Committee shall determine;
provided, however, that the Committee
shall meet at least quarterly in the
discharge of its duties. The Committee,
via the KIM CCO, reports to CLIG’s
Audit & Risk Committee at each of its
four scheduled meetings.
Internal controls
The Group maintains a comprehensive
system of internal controls, including
financial, operational and compliance/
risk controls.
As mentioned earlier, on a six-monthly
basis each department of business
within CLIM is required to review and
update their individual risk assessment.
Additionally, each department of business
within CLIM is subject to an annual
review by senior management, who are
required to identify and report on the key
controls pertinent to their responsibilities.
The senior management team at KIM is
responsible for ensuring adequate internal
controls within KIM.
The Audit & Risk Committee reviews the
effectiveness of the system of internal controls
on an ongoing basis. The Board and the
Audit & Risk Committee continue to
consider the need for an internal audit
function and have concluded that, given the
size of the business, the nature of its activities,
and the other control mechanisms that are
in place, an internal audit function was not
required during the year.
Since the year end an internal audit
function has been set up to provide
independent assurance and to support the
Board in complying with the new Principle
O of the UK Corporate Governance Code
2024 and its responsibility to maintain the
effectiveness of the risk management and
internal control framework. Refer to page
68 for further information.
28 City of London Investment Group PLC Annual Report 2023/2024
Strategic report
Overview Financial statements Shareholder informationGovernance
City of London Investment Group PLC Annual Report 2023/2024 29
In addition, there are a number of less significant financial risks outlined in note 24 on pages 136 to 137.
Team approach, internal procedures and knowledge sharing. Remuneration
packages reviewed as needed to ensure talent/key employees are
retained. In addition, the Nomination Committee regularly reviews talent
and succession plans for both Board and key senior management positions.
Risk that key employees across the business
leave/significant reliance on a small number
of key employees.
IT monitors developments in this area and ensures that systems are
adequately protected. Additional IT spend occurred on both vulnerability
awareness, mitigation, and incident response planning. Each subsidiary of
the Group has a Disaster Recovery/Business Continuity plan. Our offices
maintain backups of local servers, applications and data. Additionally,
back-ups are replicated to other offices and/or an external cloud-based
provider. Employees across its four offices are able to work remotely,
accessing information and maintaining operations.
Risk that technology systems and support
are inadequate or fail to adapt to changing
requirements; systems are vulnerable to
third party penetration or that the business
cannot continue in a disaster.
Mandate guidelines are coded (where possible) into the order
management system by the Investment Management/Compliance
teams of each operating subsidiary.
Risk of a material error or investment
mandate breach occurring.
Compliance teams of each subsidiary monitor relevant regulatory
developments – both new regulations as well as changes to existing
regulations that impact their respective subsidiary. Implementation is
done as practicably as possible taking into account the size and nature
of the business.
The finance team with the support of CLIG’s Company Secretary keeps
abreast of any changes to Listing Rules, accounting and other standards
that may have an impact on the Group.
Finance and both the compliance teams receive regular updates
from a variety of external sources including regulators, law firms,
consultancies etc.
Risk of legal or regulatory action resulting
in fines, penalties, censure or legal action
arising from failure to identify or meet
regulatory and legislative requirements in
the jurisdictions in which the Group and its
operating subsidiaries operate, including
those as a result of being a listed entity on
the London Stock Exchange. Risk that new
regulation or changes to the interpretation
of existing regulation affects the Group’s
operations and cost base.
Key person
risk
Technology, IT/
cybersecurity
and business
continuity risks
Material error/
mandate breach
Regulatory and
legal risk
Strategic report
PRINCIPAL RISK
CONTROLS / MITIGATION
Key risks
The Board has conducted a robust
assessment of the principal risks facing
the Group, including those that would
threaten its business model, future
performance, solvency or liquidity.
This assessment includes continuous
monitoring of both internal and external
environments to identify new and
emerging risks, which in turn are analysed
to determine how they can best be
mitigated and managed. The primary risk
is the potential for loss of FuM as a result
of poor investment performance, client
redemptions, reputational damage, a
breach of mandate guidelines or market
volatility. The Group seeks to attract and
retain clients through consistent
outperformance supplemented by first
class client servicing.
In addition to the above key business
risk, the Group has outlined what it
considers to be its other principal risks,
including the controls in place and any
mitigating factors.
FINANCIAL REVIEW
30 City of London Investment Group PLC Annual Report 2023/2024
Strategic report
FuM
FuM as of 30th June 2024 increased by
$0.8 billion (8.8%) to $10.2 billion from
$9.4 billion at the end of the last financial
year. The increase was a result of a
combination of investment flows, market
movements and performance. Refer to
Figure 5 on page 10 – FuM by line of
business table within the CEO statement
for more details. Average FuM for the year
increased by 3.6% from $9.2 billion in FY
2023 to $9.6 billion in FY 2024.
Functional and reporting
currency change
The functional currency of the Company
and the presentational currency of the
Group changed to US dollars with effect
from 1st July 2023. Following the change
in the Group’s presentational currency, the
Group’s financial statements have been
prepared using US dollars. Prior year
comparatives have been restated to US
dollars using average exchange rate for the
period. Refer to note 1.2 in the financial
statements on page 111 for further
information.
Alternative Performance Measures
The Directors use the following
Alternative Performance Measures (APMs)
to evaluate the performance of the Group
as a whole:
Earnings per share in pence – Earnings
per share in US dollars as per the income
statement is converted to sterling using
the average exchange rate for the period.
Refer to note 8 in the financial statements
on page 121.
Consolidated income for financial years ended 30th June
2024 2023
$’000 $’000
Gross fee income
69,453 68,725
Commissions (1,811) (1,823)
Custody fees (1,475) (1,422)
Net fee income 66,167 65,480
Net interest income 1,079 536
Total net income 67,246 66,016
Employee costs (18,767) (17,802)
Other administrative expenses (8,177) (8,382)
Depreciation and amortisation (975) (835)
Overheads before profit-share, EIP, share option charge
and gain on investments (27,919) (27,019)
Profit before profit-share, EIP, share options charge
and gain on investments 39,327 38,997
Profit-share (10,617) (10,405)
EIP (1,506) (1,518)
Share option charge (35) (37)
Gain on investments 1,051 689
Profit before tax and amortisation on intangibles
28,220 27,726
Amortisation of intangibles (5,599) (5,599)
Profit before tax 22,621 22,127
Tax (5,506) (4,630)
Profit after tax 17,115 17,497
Alternative Performance Measures
2024 2023
$’000 $’000
Profit before tax 22,621 22,127
Add back/(deduct):
Gain on investments
(1,051) (689)
Amortisation of intangibles 5,599 5,599
Underlying profit before tax 27,169 27,037
Tax (5,506) (4,630)
Tax effect on adjustments (1,083) (1,199)
Underlying profit after tax 20,580 21,208
The Group income statement is presented in line with UK-adopted International
Accounting Standards on page 106, but the financial information is reviewed by the
management and the Board as shown in the table below. This makes it easier to
understand the Group’s operating results and shows the profits which is used
to calculate Group’s profit-share.
Overview Financial statements Shareholder informationGovernance
City of London Investment Group PLC Annual Report 2023/2024 31
Underlying profit before tax – Profit before
tax, adjusted for gain on investments and
amortisation of intangibles. This provides a
measure of the profitability of the Group
for management’s decision-making.
Underlying earnings per share in pence
– CLIG’s shares are quoted and the
dividend is declared in sterling. Underlying
profit before tax, adjusted for tax as per
income statement and tax effect of
adjustments, divided by the weighted
average number of shares in issue as at the
period end. Underlying earnings per share
is converted to sterling using the average
exchange rate for the period. Refer to note
8 in the financial statements for
reconciliation on page 121.
Group income statement and
statement of comprehensive income
Revenue
The Group’s gross revenue comprises of
management fees charged as a percentage
of FuM. The Group’s gross revenue
increased by 1% YoY to $69.5 million
(2023: $68.7 million). Increase in revenue
is due to higher average FuM during
the year, offset by general fee erosion
during the year.
Commissions payable of $1.8 million
(2023: $1.8 million) relate to fees due to
US registered investment advisers for the
introduction of wealth management clients,
remained at the similar levels as last year.
The Group’s net fee income, after custody
charges of $1.5 million (2023: $1.4
million), increased by 1% to $66.2 million
(2023: $65.5 million). The Group’s average
net fee margin for FY 2024 was c.69bps as
compared to c.72bps for FY 2023.
Net interest income is made up of interest
earned on bank deposits and short term
investments in treasury money market
instruments offset by interest paid on lease
obligations. Refer to page 116 for our lease
accounting policy and page 119 for details
of net interest earned.
Costs
Overheads before profit share, EIP, share
option charge and gain on investments for
FY 2024 totalling $27.9 million (2023:
$27.0 million) were 3% higher than FY
2023, of which c.1% was due to the
US dollar weakening against sterling
during the year. The US dollar weakened
by an average of 4% during the year as
compared to sterling and c.32% of the
Group’s overheads are incurred in sterling.
The Group’s cost/income ratio is arrived
at by comparing overheads before profit
share, EIP, share option charge and gain
on investments with net fee income, was
42.2% in FY 2024 as compared to 41.2%
in FY 2023.
The largest component of overheads
continues to be employee-related at $18.8
million (2023: $17.8 million), an increase
of c.5% over last year, out of which c.1%
is due to the impact of the US dollar
weakening against sterling during the year
and salary and associated cost increases
with effect from 1st July 2023.
Profit before profit-share, EIP, share
options charge and gain on investments
was $39.3 million (2023: $39.0 million),
an increase of c.1% over the last year.
The total variable profit-share for FY 2024
increased slightly to $10.6 million as
compared with $10.4 million in FY 2023
in line with the Profit before profit-share,
EIP, share options charge and gain on
investments for the year.
The Group’s Employee Incentive Plan
(EIP) charge for FY 2024 remained the
same as FY 2023 at $1.5 million.
Gain on investments
Investment gains of $1.1 million (2023:
gain of $0.7 million) relate to the realised
and unrealised gains/(losses) on the
Group’s seed investments and other
investments in Special Purpose Acquisition
Companies (SPACs). During the year, the
Group fully redeemed its seed investments
in the two REIT funds and subsequently
closed the strategy.
Amortisation of intangibles
Intangible assets relating to direct
customer relationships, distribution
channels and KIM’s trade name recognised
on the merger with KIM are being
amortised over seven to fifteen years (refer
to note 1.8 of the financial statements)
and have resulted in an amortisation
charge of $5.6 million for the year (2023:
$5.6 million). Deferred tax liability on
these intangibles as of 30th June 2024
amounted to $7.9 million (2023: $9.2
million) based on the relevant tax rate,
which will unwind over the useful
economic life of the associated assets.
Goodwill amounting to $90.1 million was
also initially recognised on the completion
of the merger. Refer to note 11 of the
financial statements for more details.
Taxation
Profit before tax of $22.6 million (2023:
$22.1 million), after a corporation tax
charge of $5.5 million (2023: $4.6
million), with an effective rate of 24%
(2023: 21%), resulted in profit after tax of
$17.1 million (2023: $17.5 million),
which is all attributable to the equity
shareholders of the Company. The
effective tax rate increased during the year
due to the higher UK corporation tax rate
of 25% effective from April 2023.
Underlying profits
Underlying profit before tax for the year of
$27.2 million was marginally higher than
the $27.0 million achieved in FY 2023.
Underlying profit after tax for the year was
3% lower at $20.6 million when
compared to FY 2023 at $21.2 million,
which was mainly due to the full year
impact of the increase in the UK
corporation tax rate.
Strategic report
FINANCIAL REVIEW
CONTINUED
32 City of London Investment Group PLC Annual Report 2023/2024
Strategic report
Group statement of financial position
The Group’s financial position continues
to be strong and liquid, with cash
resources of $33.7 million as at 30th June
2024, compared with $28.6 million as at
30th June 2023.
The Group had invested $2.5 million in
seeding the Global Equity CEF in
December 2021 and $2.5 million in
SPACs in March 2022. As at the end of
June 2024, these investments were valued
at $5.7 million (2023: $4.6 million).
During the year, the Group fully
redeemed its seed investments in the two
REIT funds and the strategy was
subsequently closed. Total realised gains
recognised on the de-seeding of its
investments and its SPACs products was
$0.9 million (2023: gain $0.4 million)
and unrealised gains of $0.2 million
(2023: gain $0.3 million) was taken to
the income statement.
The Global Equity CEF fund is assessed
to be under the Group’s control and is
thus consolidated using accounts drawn
up as of 30th June 2024. There were no
third-party investors, collectively known
as the non-controlling interest (NCI)
in this fund as of 30th June 2024
(2023: nil).
The Group’s right-of-use assets (net of
depreciation) amounted to $5.1 million as
of 30th June 2024 as compared with $2.5
million as of 30th June 2023. The Group
took occupancy of the new US office in
West Chester on 1st July 2023 and right-
of-use assets amounting to $3.0 million
were recognised from that date. The
Group also extended its current lease for
the Singapore office and additional right-
of-use assets of $0.2 million were added
as a result of lease modifications with
effect from January 2024.
The Employee Benefit Trust (EBT)
purchased 318,000 shares (2023: 622,746
shares) at a cost of $1.3 million (2023:
$3.1 million) in preparation for the
annual EIP awards due at the end of
October 2024.
The EIP has had a consistently high level
of participation each year since inception
(>60% of Group employees), with the first
tranche of awards vesting in October 2018.
During the year 35.8% (2023: 26.2%) of
the shares vesting were sold to help cover
the employees’ resulting tax liabilities,
leading to a very healthy 64.2% (2023:
73.8%) share retention within the Group.
In addition, Directors and employees
exercised 47,400 (2023: 23,350) options
over shares held by the EBT, raising
$0.1 million (2023: $0.1 million) which
was used to pay down part of the loan
to the EBT.
Dividends paid during the year totalled
$19.9 million (2023: $19.4 million). The
total dividend of 33p per share comprised:
the 22p per share final dividend for
FY 2023 and the 11p per share interim
dividend for the current year (2023: 22p
per share final for FY 2022 and 11p per
share interim dividend). The Group’s
dividend policy is set out on page 22.
The Group is well capitalised, and its
regulated entities complied at all times
with their local regulatory capital
requirements. In the UK, the Group’s
principal operating subsidiary, CLIM, is
regulated by the FCA. As required under
the Capital Requirements Directive, the
underlying risk management controls and
capital position are disclosed on CLIM’s
website
www.citlon.com.
Currency exposure
Following the change in the Group’s
presentational currency with effect from
1st July 2023, the Group’s financial results
for the year ended 30th June 2024 have
been prepared using US dollars.
While Group’s revenue and the bulk of its
expenses are now aligned in US dollars,
c.32% of Group’s overheads are incurred
in sterling and to a lesser degree Singapore
dollars, that are subject to currency rate
fluctuations against US dollars.
The Group’s currency exposure also
relates to its non-US dollar assets and
liabilities, which are mostly in sterling.
The exchange rate differences arising on
their translation into US dollars for
reporting purposes each month is
recognised in the income statement.
Viability statement
In accordance with the provisions of the
UK Corporate Governance Code, the
Directors have assessed the viability of
the Group over a three-year period,
considering the Group’s current position
and prospects, Internal Capital Adequacy
and Risk Assessment (ICARA) and the
potential impact of principal risks and how
they are managed as detailed in the risk
management report on pages 28 to 29.
Period of assessment
While the Directors have no reason to
believe that the Group will not be viable
over a longer period, given the
uncertainties still associated with the
global economic and political factors
and their potential impact on financial
markets, any longer time horizon
assessments are subject to more
uncertainty due to external factors.
Overview Financial statements Shareholder informationGovernance
City of London Investment Group PLC Annual Report 2023/2024 33
Considering the recommendations of the
Financial Reporting Council in their 2021
thematic review, the Board has therefore
determined that a three-year period to
30th June 2027 constitutes an appropriate
and prudent timeframe for its viability
assessment. This three-year view is also
more aligned to the Group’s detailed
stress testing.
Assessment of viability
As part of its viability statement, the Board
has conducted a robust assessment of the
principal risks facing the Group, including
those that would threaten its business
model, future performance, solvency or
liquidity. This assessment includes
continuous monitoring of both internal
and external environments to identify new
and emerging risks, which in turn are
analysed to determine how they can best
be mitigated and managed.
The primary risk is the potential for loss
of FuM as a result of poor investment
performance, reputational damage, client
redemptions, breach of mandate guidelines
or market volatility. The Directors review
the principal risks regularly and consider
the options available to the Group to
mitigate these risks so as to ensure the
ongoing viability of the Group is sustained.
The ICARA is reviewed by the Board and
incorporates stress testing based on loss of
revenue on the Group’s financial position
over a three-year period. The Group has
performed additional stress tests using
several different scenario levels, over a
three-year period which are significantly
more severe than our acceptable risk
appetite, which include:
• a significant fall in FuM;
• a significant fall in net fee margin; and
• combined stress (significant falls both
in FuM and net fee margin).
Having reviewed the results of the stress
tests, the Directors have concluded that the
Group would have sufficient resources in
the stressed scenarios and that the Group’s
ongoing viability would be sustained.
The stress scenario assumptions would be
reassessed, if necessary, over the longer
term. An example of a mitigating action in
such scenarios would be a reduction in
costs along with a reduction in dividend.
Based on the results of this analysis, the
Board confirms it has a reasonable
expectation that the Company and the
Group will be able to continue in
operation and meet their liabilities as
they fall due over the next three years.
On that basis, the Directors also
considered it appropriate to prepare the
financial statements on the going concern
basis as set out on page 91.
Strategic report
CORPORATE AND SOCIAL RESPONSIBILITY POLICY
34 City of London Investment Group PLC Annual Report 2023/2024
Strategic report
CLIG is committed to maintaining transparent policies regarding the Group’s
Corporate and Social Responsibilities, and remaining an engaged member of our
greater communities.
Employee welfare
In addition to the statutory obligations,
CLIG is committed to maintaining
transparent policies in respect of the
following:
• recognition of diversity through
recruitment and promotion based on
merit without regard to ethnicity,
gender, religion, sexual orientation,
disability, family or marital status,
language, national origin, political
affiliation, race, age, or any other
characteristic protected by law;
• strict adherence to and compliance
with the regulatory requirements in
force by all employees supported by
clear guidelines that enable
whistleblowing;
• participation by employees in the
Group’s activities through share
ownership arrangements that
encourage employee retention and
minimise turnover; and
• ensuring good practices and creating
a workplace free of harassment and
bullying and in which all individuals
are treated with dignity and respect.
Under the UK Corporate Governance
Code 2018 (the Code), the Board is
required to agree a mechanism to ensure
ongoing engagement with the workforce.
Rian Dartnell, Chair, has been designated
as the Non-Executive Director for
employee engagement.
Health and Safety
CLIG is committed to maintaining a high
level of Health and Safety (H&S). All UK
employees have access through our Group
Income Protection policy to an Employee
Assistance Programme (EAP), which offers
confidential advice on personal and
professional matters to employees and
members of their immediate family.
Areas covered within the EAP include
Mental Health Support, Burnout
Prevention, Life Events Counselling,
and services related to well-being and
healthy living.
Gender diversity
As an employer, CLIG is committed to
equality and valuing diversity within its
workforce. As noted above, we believe that
people should be appointed to their roles
based on skills, merit and performance.
We recognise that diversity adds value,
and our goal is to ensure that our
commitments, reinforced by our values,
are embedded in our day-to-day
working practices.
The gender ratio at the Board level as at
30th June 2024 was 40% female to 60%
male. This is compared to 33% female on
31st July 2023, after the retirement of
George Karpus from the Board on 31st
July 2023.
Of our 117 employees, excluding Non-
Executive Directors, 36% are female
(2023: 35%), including 24% of senior
management including Executive
Directors (2023: 25%), and 38% of the
remaining employees (2023: 37%).
2024 Female Male Total
Executive Director 0 1 1
Senior managers 4 13 17
All other employees 38 61 99
42 75 117
NEDs 2 2 4
44 77 121
Work/life balance
As the Group continues to adapt with
advancements in technology, changes
in culture, and the changing family
circumstances of our employees, we try
to be fair and flexible while retaining
teamwork as one of our core values.
Our management team and the Board
continue to engage with the wider
workforce on the topic of Work from
Home (WFH) during the year. Since the
pandemic subsided, we have progressed
through the transition back to the office
methodically, working with colleagues to
find the right balance. Our WFH policy
is reviewed on an annual basis, as we
continue to work towards finding the right
balance for the three primary stakeholders-
Employees, Clients, and Shareholders.
The Group has a hybrid WFH policy
with effect from 1st July 2024, where
employees are provided a bank of flexible
WFH days to use during the financial
year, pending appropriate coverage on
premise by colleagues in their respective
departments.
Human rights
CLIG is committed to respecting all
human rights. Our operations and
practices relevant to the workplace and
community are aligned with the United
Nations (UN) Universal Declaration of
Human Rights.
Learning and development
Our employees are an asset to us. We
recognise and support the importance of
encouraging all employees to complete
professional qualifications relevant to their
role, in order to progress and realise their
full potential. We partner with our
employees and contribute towards their
development by sponsoring their studies
1. WORKPLACE
Overview Financial statements Shareholder informationGovernance
City of London Investment Group PLC Annual Report 2023/2024 35
Strategic report
and providing study leave. This year we
have sponsored employees for their CFA.
This is in addition to the usual seminars
and conferences our employees attend.
Mandatory anti-money laundering and
Code of Ethics training is provided
annually to all employees. Employees
also take responsibility for their own
development via our annual appraisal
process, where they are able to discuss
further training where they feel it is
necessary. Both subsidiaries transitioned
to a new Human Resource Information
System (HRIS), with CLIM
implementing the system in February
2024 and KIM implementing the system
in July 2024. We believe the improved
system will provide our colleagues with
an improved HR experience.
We continue with the CLIG Security
Education Programme (CSEP), which is
a multi-faceted cybersecurity training
programme that includes online courses
and videos via a web-based portal.
During the financial year, we conducted
an assessment of our colleagues’ retention
of their training and used the findings to
adjust upcoming training to prioritise
areas that need additional education. We
are proud of our employees’ abilities to
keep our data safe. Additionally, we use
this web-based portal to provide training
on Diversity, Equity, and Inclusion topics
twice during each financial year.
In addition, we provide the below to
all employees:
• internal training on our investment
management services;
• awareness sessions on a regular basis
to keep employees up to date with
relevant aspects of the business; and
• induction programme to all new
employees over a period of weeks. It is
an ongoing process to ensure new
employees settle well into the Group
and are confident carrying out the full
scope of their duties.
We have Group-wide policies on a range
of social issues, including Diversity, Equity
& Inclusion, Anti-Slavery & Human
Trafficking, Anti-Corruption & Bribery
and Whistleblowing.
CLIG’s Diversity Working Group which
includes the CEO and other employees
(including HR) is responsible for:
• reporting and assisting in the
implementation of diversity, equity
and inclusion-related initiatives;
• researching best practices, discussing
issues raised by employees and
implementing solutions across the
Group; and
• identifying training needs for
employees and distributing them
via a web-based portal.
Ethics
All CLIG employees are required to act
in accordance with their respective Code
of Ethics. This lays out minimum
standards of conduct to ensure that
employees act ethically when dealing with
our various stakeholders. It also seeks to
ensure that all actual and potential
conflicts of interest are identified,
mitigated and monitored on an ongoing
basis. Any breaches of the Code are
reported to the Board of Directors.
Tom Griffith is the Executive
Director responsible for the Group’s
environmental policy.
Environmental policy initiatives
Employees and management of the
Group are committed to protect the
environment in which we operate.
We provide investment management
services to our clients which have a
relatively modest direct environmental
impact. The Group recognises that we
must first acknowledge, then measure,
and then minimise environmental
risks and, wherever commercially
possible, improve the Group’s overall
environmental performance.
The Group continued our engagement
with a third-party environmental
consultant, ECO3 Partnership Limited
(ECO3). ECO3 assists with the
production of our shareholder disclosures,
and they consult us during the year on
initiatives we are undertaking.
A representative list of initiatives
completed during the year to help
reduce the environmental impact of
our activities, is as follows:
• electricity for our West Chester,
Pennsylvania office is now sourced by
renewable energy;
• carbon offsets were purchased during
the year, to offset all group business
travel and energy consumed by our
Singapore office; and
• investment in further enhancement
of our technology solutions to
promote regular video conferencing,
thereby reducing business travel,
where possible.
We support the work undertaken by
the TCFD and have produced our
detailed response in alignment with its
recommendations. To meet the listing
requirements under LR 9.8.6, we have
included the climate-related financial
disclosures consistent with the TCFD
recommendation on pages 37 to 45.
2. ENVIRONMENT
CORPORATE AND SOCIAL RESPONSIBILITY POLICY
CONTINUED
36 City of London Investment Group PLC Annual Report 2023/2024
Strategic report
CLIG seeks to encourage employees to
regularly participate in community
support activities across a wide spectrum
of causes that encompass both monetary
and non-monetary efforts to help raise
awareness. In turn, this fosters a culture
of leadership, teamwork and appreciation
within our Group and community.
Our long-term goals include:
• encouraging employee volunteer work
in community activities;
• engaging in programmes that make
communities better places to live
and work;
• using local suppliers to help support
businesses within the community; and
• raising awareness, sharing efforts and
encouraging participation via
COLeague news, our internal
newsletter.
Illustrative list of employees’ participation
in FY 2024 include:
• United Way Day of Caring, to weed
and clean the grounds of a local
religious property (US);
• Spring Cleaning Drive for a local
homeless shelter (US);
• Socktober Drive to collect new socks
for the homeless in advance of the
winter months (US);
• Thanksgiving Food Drive for a local
food pantry (US);
• Annual Toy Drive during the Holiday
season for a local shelter (US);
• Gift cards for the homeless students
at the local University (US);
• "Feed a Child This Christmas"
bake-off (UK); and
• various athletic achievements and
fundraisers to support various causes
(US and UK).
As a matter of policy, CLIG does not
make donations to any client-related
charity, event or activity, or to any
political party or candidate.
Both of CLIG’s operating subsidiaries
invest primarily in closed-end funds
(CEFs). CLIM and KIM are committed
to promoting responsible investment.
CLIM’s investment process prioritises
good governance but it also includes an
assessment of the environmental and social
policies of the CEFs’ underlying securities.
We define ESG in the context of
stewardship policies by which we are
committed to responsible allocation,
management and oversight of capital to
create long-term value. In the context of
a CEF strategy, we have a two-pronged
approach to responsible investment:
• We promote effective governance at
the CEFs in which our clients are
invested, both via their Boards and by
engaging with the relevant regulators
and policy makers.
• We promote greater transparency from
the CEFs of the ESG characteristics of
their underlying portfolios.
CLIM is a signatory to the UN-supported
Principles for Responsible Investment
(PRI). CLIM has partnered with
Sustainalytics, a leading independent
provider of ESG research. This partnership
allows CLIM to receive data to monitor
the underlying portfolio of the CEF, and
allows CLIM to question the CEF
investment manager on their portfolio and
stance on ESG issues. We believe good
disclosure requirements by the Board to
the Investment Manager results in more
effective management of ESG risks and
therefore better outcomes for our clients.
CLIM’s Proxy Voting Record and Annual
Stewardship Report are available on our
website at:
https://citlon.com/esg-clients/.
3. COMMUNITY
4. RESPONSIBLE INVESTMENT
CREDIBLE DISCOUNT CONTROL
INDEPENDENT BOARD
CEF GOVERNANCE
UNDERLYING PORTFOLIO: OVERALL ESG RISK
EXPOSURE TO ESG
ISSUES
VS.
BENCHMARK
MANAGEMENT OF
ESG RISKS
VS.
RELEVANT BENCHMARK
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
Overview Financial statements Shareholder informationGovernance
City of London Investment Group PLC Annual Report 2023/2024 37
Strategic report
The following pages summarise our Streamlined Energy and Carbon Reporting disclosure
and our Task Force for Climate Related Financial Disclosure (TCFD), in line with the
Companies (Directors’ Report) and Limited Liability Partnerships (Amendment) Regulations
2018 and listing requirement of LR 9.8.6, for the financial year ended 30th June 2024.
As a listed company, we disclose
environmental initiatives at a Group level
in our Annual Report and Accounts.
We have also produced a detailed 2023/24
Annual TCFD & GHG Emissions
Report, published in September 2024
to complement our position, which has
been included on our website at:
https://clig.com/wp-content/uploads/
2024/09/Annual-TCFD-GHG-
Emissions-Report-June-2024.pdf
In terms of operational emissions
reductions, with reference to scopes 1 & 2,
the majority of our offices have now
transitioned to renewable energy tariffs for
electricity, resulting in market-based
emissions benefits in the current period.
We have also progressed our greenhouse
gas (GHG) offsetting strategy for scope 3
business travel emissions.
Key takeaways from our environmental
summary this year include:
1. A reduction of 26 tCO
2
e scope 1
& 2 market-based emissions.
2. An increase of 255 tCO
2
e in business
travel. To mitigate this, we have
purchased verified Gold Standard
offsets. Further detail is provided
within the relevant section below.
1.1. Governance
1.1.1. Board oversight
Our Board remains committed to
maintaining high standards of corporate
governance throughout the group. The
oversight and structure of our Governance
committees remains unchanged in period.
Key personnel changes have been defined
in the Director’s report and are noted in
the Chair’s statement.
Our approach to overseeing climate-
related risks and reporting is summarised
within our Audit & Risk Committee
(ARC) Terms of Reference, which was
revised in February 2024. For further
details, please see:
https://clig.com/wp-
content/uploads/2024/02/AuditRisk-
Com-2-24.pdf
1.1.2. Management oversight
There has been no substantive change
in the current period. The Group
Executive Committee (GEC) oversees
the daily responsibilities of the Group’s
two operating subsidiaries, CLIM and
KIM, and this includes the environmental
impact of the two businesses. Senior
management in KIM and CLIM support
the assessment of climate-related risks and
opportunities. At CLIM, the oversight
includes the portfolio managers who are
responsible for implementing stewardship
for their respective strategies, with the
assistance of a UK based governance
and ESG specialist. This ensures a
coordinated response where a closed-end
fund (CEF) is held across multiple
strategies within CLIM.
2.1. Identification of Climate
Risks & Opportunities
At investment management level
Our business model remains focused on
exploiting discount volatility in CEFs on
behalf of our clients to achieve capital
growth and outperform relevant
benchmark indices as necessary.
Improving CEF governance has been a key
objective since our business was founded,
but neither CLIM nor KIM select CEFs
solely based on their ESG characteristics.
Their business models are to implement
investment strategies that exploit discount
volatility in CEFs.
With respect to CLIM, further details
(for non-US persons) regarding our
SFDR disclosure are detailed here:
https://citlon.com/sustainable-finance-
disclosure-regulation-sfdr/
1. EXECUTIVE SUMMARY
Figure 1.1. Corporate Governance –
Climate risk management
Board of
Directors
Remuneration
Committee
Audit & Risk
Committee
Nomination
Committee
Group Executive
Committee
CLIM Senior
Management
KIM Senior
Management
CLIM team KIM team
2. STRATEGY
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
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38 City of London Investment Group PLC Annual Report 2023/2024
Strategic report
CLIM’s investment process is driven
predominately by capitalising on CEF
discount inefficiencies. The ESG
characteristics of the underlying CEF
portfolios are not the primary reason for
selection. However, we appreciate that
ESG ratings require consideration, and we
therefore encourage CEFs to be more
explicit regarding the integration of ESG
factors into their investment process.
CLIM’s research teams conduct annual
due diligence on the investment manager
of each CEF investment. ESG issues are
considered as part of this process, with
the assistance of Sustainalytics ESG Risk
Ratings. This work is undertaken in
order to understand better the
sustainability performance of the
underlying CEF portfolios.
We appreciate that climate risk may
materialise over the short and medium
term, and at the Group level, we continue
to monitor the landscape of climate-
related risk drivers, which may cause us
to consider possible future downside
risks to our balance sheet and conversely
alternative opportunities.
Further details regarding CLIM’s
Stewardship & Corporate Governance,
Voting Record & Press Releases are
available within the ‘ESG for Clients’
section of our website, as well as our
Annual Stewardship Report located at:
https://citlon.com/esg-clients/
At CLIG corporate level
Recognising that climate risk manifests
through the physical effects of changing
weather patterns and by efforts to reduce and
eliminate the GHG emissions that drive
those physical risks, we have identified a series
of risks, and their associated drivers, across
three-time horizons – 1) Short Term which is
0-5 years, 2) Medium Term, which is 5-10
years, and 3) Long Term, which is 10+ years.
• Physical risks resulting from climate
events and hazards can be subdivided
into acute and chronic risks.
– Acute physical risks include weather
related or exacerbated events, that are
increasing with climate change, such
as floods, hurricanes, and wildfires.
– Chronic risks consider gradual, long-
term trends such as rising average
temperatures and sea levels. The
climate modelling of Intergovernmental
Panel on Climate Change (IPCC)
forecasts increases to both of these
categories, which could create physical
hazards to business property and
other assets in the built and natural
environment, as well as indirect
impacts from supply chain disruption.
Financial performance could also be
affected by changes in water
availability, extreme temperature
changes affecting our premises and
operations, as well as the transport
needs and safety of our employees.
• Transition risks manifest from the
transition to a lower-carbon economy.
They entail extensive policy, legal and
technology risks as well as changes
in consumer pressures/preferences
to address the mitigation and
adaptation requirements to combat
climate change.
Transition risks and opportunities are
particularly important in the near term,
whilst physical risks are increasingly
important over longer time horizons,
although these will vary by asset class
and risk type.
We have commenced a review of
potential climate risk exposures,
including risk drivers and how they could
translate to CLIG across three time
horizons. Table 2.1 provides high-level
definitions of the climate risk sub-
categories considered. A summary of
key risks, their drivers and potential
transmission routes are illustrated in
Table 2.2 and Table 2.3.
Table 2.1. Definitions of climate risk sub-categories (TCFD)
Market Interest rates Credit Liquidity Strategic Operational Technology
& resilience
Regulatory
compliance
Reputational
Shifts in supply
and demand
related to climate
risk can affect
market prices
(e.g. consumer
preference change)
Governments may
implement policies
to curb climate
change. E.g.
interest rates rise
to curb inflations
due to supply
chain disruptions.
Additionally, firms
may face higher
borrowing costs if
they are deemed
high-risk
Climate risks
can affect the
creditworthiness
of companies,
especially those
reliant on
carbon intensive
industries.
Potentially leading
to higher
borrowing costs
Climate change
can impair a firms
ability to generate
revenue, disrupt
operations, or
reduce asset value
making it harder to
liquidate assets or
secure financing
Involves a firms
failure to account
for shifts in the
market demands
towards more
sustainable
products. E.g.
misalignment with
with regulations
or consumer
preference may
result in loss of
profitability
Firms which are
heavily reliant on
fossil fuels may
find they need
to shift their
operations to
low-carbon
alternatives
Adoption of
cleaner tech to
reduce emissions
can pose
significant costs
to firms who are
already invested
in high-emitting
industries
Constantly
evolving regulatory
spaces to curb
carbon emissions
will expose
businesses to
costs to adapt or
penalties if they
fail to implement
the necessary
changes
Firms that are
perceived to be
detrimental to the
climate or who fail
to comply with
regulations,
may suffer
reputational
damages
City of London Investment Group PLC Annual Report 2023/2024 39
Overview Financial statements Shareholder informationGovernanceStrategic report
Table 2.2. Climate risk exposure over time
High impact Medium impact Low impact
Table 2.3. Climate risk drivers and methods of transmission
Risk Category Sub-category Risk drivers Risk driver description Potential method of transmission to CLIG
Financial risks Market Physical &
Transitional risks
• Particular market/asset sectoral declines
• Market adjustments to pricing of climate risks
• Climate event impacts on clients
• Investment product supply and demand shift
• Climate risks & opportunities that could impact the
value of assets
• Reduced revenue from decreased demand for
goods/services
Interest rates Physical &
Transitional risks
• Inflationary pressure could be created by increasing carbon
prices & increasing investment demand from climate change
• Potential to increase differentials between geographical
zones, and or general interest rate environment
• Policy uncertainty could lead to higher investment premiums
Credit Physical &
Transitional risks
• More stringent criteria resultant from climate driver • Climate risk could impact client creditworthiness or
collateral/assets held by CLIG
Liquidity Physical &
Transitional risks
• Market condition changes impacting access to stable
sources of funding
• Drop in deposits from climate impact to BAU models
• Climate disruption could impact client access to capital,
creating potential constraints to access capital and/or
resulting in declines in their wider asset bases and
lower investment
• Early exit potential could increase
Business risks Strategic Physical &
Transitional risks
• Future sustainability drivers or concerns of our clients
• Pace of development of green products
• Potential for client sentiment to change over time
• Focus on discount volatility may not leverage new investor
profiles (consumer generational preference/product shift)
Operational Physical &
Transitional risks
• Climate resilience of operations • Increasing frequency or magnitude of climate events
may disrupt our operations, increasing potential for operational
loss or error
• Abrupt and unexpected shifts in energy costs
Technology &
resilience
Physical &
Transitional risks
• Acute and chronic physical risks • Costs to adopt/deploy new practices and processes
• The increasing severity of climate events could disrupt
operations, our assets and supporting infrastructure
• R&D expenditure in new technologies
Regulatory
compliance
Physical &
Transitional risks
• Concerns around own or products’ GHG footprint,
or compliance disclosures
• Increasing legal and regulatory compliance risk associated
with climate-sensitive investments and businesses
• Potential legal liabilities or litigation increase related to
product-based disclosures
Reputational Physical &
Transitional risks
• Defining and meeting climate commitments
• Green product disclosures & labelling
• Climate strategy variance across geographical regions
• Changing customer or employee perceptions of our
contribution to or detraction from the transition to a lower-
carbon economy
Risk Category Financial risks Business risks
Sub-category
Market Interest rates Credit Liquidity Strategic Operational
Technology
& resilience
Regulatory
compliance Reputational
Short Term
(0-5yrs)
Medium Term
(5-10 yrs)
Long Term
(10+ yrs)
40 City of London Investment Group PLC Annual Report 2023/2024
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Climate related transitional opportunities
are summarised in Table 2.4.
2.2. Impact of climate risks
and opportunities
We acknowledge that the gradual change
potential in physical risks is happening
now and will only increase over the
coming decades.
Transition risk is more time pressing and
will likely have a higher impact on
CLIG’s operations in the short and
medium term. We continue to enhance
our processes linking the impact of climate
related risks and opportunities, presented
in Table 2.5 below, to our strategy and
financial planning.
2.3. Scenario analysis
As noted previously, neither CLIM nor
KIM select CEFs solely based on their
ESG characteristics. Their business models
are to implement investment strategies that
exploit discount volatility in CEFs.
Nonetheless, we have considered outline
scenarios, more specifically the Network
for Greening the Financial System (NGFS)
climate scenarios (Orderly, Disorderly, Hot
house world, Too little, too late scenarios).
The scenarios generally consider pathways
ranging from a positive scenario where
climate policies, investment and action are
introduced early, and become gradually
more stringent, through to scenarios that
consider failure and/or a late transition
which fails to limit physical risks.
Business-as-usual scenarios, i.e., currently
implemented policies, are estimated to
lead to a world that is at least 3ºC hotter.
The key focus in the industry however is
to reach net-zero emissions by around
2050, limiting global warming to 1.5°C
above pre-industrial levels. The NGFS
scenarios are based upon complex
modelling of physical and socio-economic
systems. A summary of the outline
scenarios considered are:
Current policies: assumed that only
currently implemented policies are
preserved, leading to high physical risks.
Emissions peak in 2080 leading to 3°C
of warming which will cause severe
physical risks.
Delayed transition: assumed global
annual emissions peak in 2030 before
declining, followed by stringent climate
policy implementation to limit warming
to below 2°C.
Below 2°C: assumes that climate policy
will continue to increase in stringency over
time with immediate implementation.
Giving a 67% chance of limiting global
warming to below 2°C. Although this
sub-scenario assumes increasingly climate
policy intensity it is not as stringent as
‘Net Zero 2050’.
Net Zero 2050: is an ambitious scenario
that limits global warming to 1.5°C through
strict climate policy implementation coupled
with rapid technological innovation to reach
net zero by 2050.
The NGFS scenarios provide a useful
framework for understanding how different
pathways could impact the environment,
financial markets and global economy. The
scenarios emphasise the importance of
timely and coordinated climate policies to
minimise both transition and physical risks
and highlight the significant economic and
financial consequences of delayed or
insufficient action.
As noted previously, our focus remains on
relative investment performance. We manage
client assets relative to a benchmark, but do
not screen out investments based on
sustainability risks. Our clients do not
instruct us to manage against a benchmark
that has an ESG screen. Consideration of
Table 2.5. Financial impacts and opportunities from climate risk
Risk category Financial impacts Financial opportunities
Market • Reduced demand for services due to
shift in consumer preferences
• Further abrupt and unexpected shifts
in energy costs
• Change in revenue mix and sources,
resulting in decreased revenues
• Re-pricing of underlying assets
(e.g., land and fund valuations)
• Increased revenues through access
to new markets
• Increased market resilience due to
diversified investment opportunities
Operational • Increased operating costs (e.g., from
higher compliance costs or increased
insurance premiums & costs to
reduce emissions trajectory)
• Write-offs, asset impairment, or
early retirement of assets due to
policy changes
• Reduced operating costs (e.g.,
payback through energy efficiency
measures and reduced operational
demand/consumption)
• Benefits from optimised workforce
management and planning (e.g.,
improved health and safety, employee
satisfaction) resulting in lower costs
Reputational • Reduced revenue from decreased
demand for services
• Reduced revenue from negative
impacts on workforce management
and planning (e.g., employee
attraction and retention)
• Reduction in capital availability
• Reputational benefits resulting in
increased demand for our services
Table 2.4. Climate opportunities
Opportunity category Climate related opportunities
Market & offering • Potential medium to long-term access to new markets
• Ability to diversify business activities
• Shift in consumer preferences
Resilience • Participation in renewable energy programs (market-based) and
adoption of energy efficiency measures
• On site renewable energy generation
Reputational • Reputational benefits resulting in increased demand for
goods/services, and own approach towards GHG mitigation
Operational efficiency • Move to more efficient buildings or refurbishment of existing
• Reduced operational usage and consumption – water,
materials and waste
• Transportation policy changes and humanitarian offsetting of
necessary flights for business travel
City of London Investment Group PLC Annual Report 2023/2024 41
Overview Financial statements Shareholder informationGovernanceStrategic report
3.
RISK MANAGEMENT
the scenarios does however ensure that we
are not blindsided by the economic impacts
of climate change and supports more
informed decision-making.
3.1 Materiality
A critical focus within CLIG is listening to
our stakeholders, particularly our clients,
to meet their investment requirements.
Materiality considers the threshold at
which issues become sufficiently important
to our investors and stakeholders, that
should be reported publicly.
When assessing materiality, we consider
how the Group is affected by climate
change, as well as the Group’s own impact
on the climate. We appreciate that the
needs of our stakeholders, and indeed the
developing sustainability reporting
frameworks, will evolve over time. We
will continue to assess our approach to
materiality so that we continue to report
on what is of relevance to our clients and
stakeholders. The impact from climate
change, at present, relates primarily to
our operational impact.
Our focus remains on relative investment
performance. We manage client assets
relative to a benchmark, but do not screen
out investments based on sustainability risks.
3.2. Identifying and assessing
climate risks
We have reviewed key risks outlined
within the Carbon Disclosure Project
(CDP) and within the TCFD
documentation. We continue to develop
our materiality determination processes.
A list of applicable risks to CLIG have been
defined and codified to support further
assessment on an ongoing basis. Further
detail is presented within our Annual
TCFD & GHG Emissions Report.
3.3. Managing climate related risks
We continue to develop our approach to
help integrate climate-related risk into our
decision process at the Group level.
Climate risk remains an emerging risk, but
it is not currently considered a significant
risk for the Group.
3.4. Integration into risk
management processes
We will consider reviewing the manner in
which we have introduced the management
of climate risk into our Group level risk
management framework.
Consideration will be given as to whether
we could enhance our risk management
processes with the integration of specific
climate risk training, strategic planning or
processes and controls. Any material
climate risks and opportunities identified
will be actioned as necessary on an
ongoing basis. We have a fiduciary duty to
oversee our client’s assets which they have
entrusted us to manage.
ESG is considered at the level of both the
CEF corporate and the underlying CEF
portfolio. CLIM is a large investor in
CEFs and at the corporate level prioritises
governance factors over underlying
portfolio ESG issues when assessing a
potential holding prior to purchase.
In 2023, 65 CEF portfolios were analysed
(64 in 2022) using Sustainalytics data,
representing 71% of CLIM’s FuM at the
calendar year end (vs 70%). In those CEF
portfolios that were analysed, Sustainalytics
covers 94% of the underlying securities on
a size weighted basis.
Sustainalytics does not cover unlisted
companies and has limited small cap
coverage. Small cap securities tend to score
poorly which, in CLIM’s view, often reflects
their weaker disclosure and a relative lack of
resources available to develop relevant
policies as opposed to poor ESG practices.
Lower scores for smaller companies are not
necessarily indicative of higher ESG risk.
Given the fixed capital structure, CEF
investment strategies generally have longer
investment horizons and a majority employ
active, fundamental, bottom-up processes
that favour opportunities in smaller
companies. Accordingly, CLIM’s CEF
portfolios are typically overweight smaller
and mid cap securities.
Overall ESG risk for all CLIM portfolios
as at end December 2023, using
Sustainalytics, was 2.9% lower than their
respective benchmarks. By strategy, overall
ESG risk for the EM strategy was 2.2%
below benchmark and for the
international equity and opportunistic
value strategies it was 4.1% lower.
Weighted average carbon intensity in
those CEF investments which made the
relevant disclosures was over 40% lower
than their respective benchmarks. CLIM
does not set targets for these measures.
Figure 3.1 illustrates the distribution of
securities held in client portfolios as at end
2023, according to their overall ESG risk
compared to their specific benchmark.
Please also refer to our Responsible
Investment Statement and further detail of
our own risk management approach on
our website. Further information is also
provided in our Annual Stewardship
Report:
https://citlon.com/wp-content/
uploads/2024/03/AnnualStewardship
Report3-24.pdf
4
31
7
44
25
22
11
35
30
25
20
15
10
5
0
Number of funds
18
3
Low < -15% Below Average
-15% to -5%
Average
-5% to +5%
Above Average
+5% to +15%
High >+15
end of 2022 (no. of funds) end of 2023 (no. of funds)
Figure 3.1. CLIM’s CEF investments overall ESG risk vs benchmark.
42 City of London Investment Group PLC Annual Report 2023/2024
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4.1. Alignment with strategy
and risk management
The following section relates to our own
operational footprint.
In terms of reducing our scope 2 market-
based emissions, the electricity procured
for our London office is underpinned by
Renewable Energy Guarantees of Origin.
Our Rochester office is supplemented by
renewable energy credits for wind power
generated in New York State. From
February 2024 onwards, our West
Chester, Pennsylvania office has been,
and will continue to be, supported by
renewable energy credits, purchased from
solar and wind resources. Our Singapore
office will be reviewed at the end of the
current tenancy.
In terms of offsetting our carbon
emissions, in December 2023, we
completed our first purchase of verified
offsets from Gold Standard. Our first
batch of offsets from Gold Standard’s
allocation methodology will fund projects
with additionality and permanence, that
will save 173 tonnes of CO
2
e emissions
from being released into the atmosphere.
At year end, we purchased offsets to a
further 287 tonnes of CO
2
e.
The benefits and emissions reductions
from these programmes can be seen
within our Scope 2 market-based
emissions.
4.2. Carbon offsets and credits
We have purchased carbon credits from
the Gold Standard carbon crediting
programme to offset our business travel
emissions. Towards the end of 2023, 173
carbon credits were purchased for a variety
of climate projects, and we have purchased
a total of 460 credits during the financial
year, including a small contingency
(which would in effect offset the utilities
emissions from our Singapore office).
This will offset all our business travel,
including flights, mileage and hotel stays.
Our purchased offset projects
demonstrate additionality and
permanence, ensuring that they are
impactful and sustainable over time.
Each carbon project used in our offsetting
strategy meets at least three of the UN
Sustainable Development Goals.
By purchasing carbon credits from the
Gold Standard Carbon Crediting
programme, we aim to have a positive
impact on the following Sustainable
Development Goals in consultation with
ECO3 Partnership Ltd: Zero Hunger,
Good Health and Wellbeing, Gender
Equality, Affordable and Clean Energy,
Decent Work and Economic Growth,
Climate Action, and Life on Land.
4.3. Footprint & SECR summary
As expected, 97% of our estimated
emissions (scopes 1-3) come from Scope 3
(pre-offset). Our top three emissions are:
• Business travel
• Purchased goods and services
• Employee commuting and
homeworking
Our Scope 1 & 2 emissions have
decreased by 26 tCO
2
e since our previous
reporting period (using a market-based
methodology), resultant from the purchase
of green energy contracts/credits.
A summary of our assessed emissions is
shown in Figure 4.2.
4.
METRICS AND TARGETS
Table 4.1. Details of our Gold Standard Carbon offsetting projects
Project name Project location Project
category
Relevant Sustainable
Development Goal
100 MW Solar
Power Plant
Maharashtra,
India
Renewable
Energy
• Affordable and Clean Energy
• Decent Work and Economic Growth
• Climate Action
Improved
cookstoves for
Conservation
Makera Gallery
Forest, Rwanda
Land Use
Activities and
Nature-based
Solutions
• Good Health and Wellbeing
• Affordable and Clean Energy
• Climate Action
WithOneSeed
Community
Forest Program
Democratic
Republic of
Timor-Leste,
South East Asia
Community-based
Energy Efficiency
• Zero Hunger
• Life on Land
• Climate Action
Figure 4.1. Key sustainable development goals relevant to our
carbon offset programme
City of London Investment Group PLC Annual Report 2023/2024 43
Overview Financial statements Shareholder informationGovernanceStrategic report
tCO
2
e
Year ended 30th June 2024
GHG Emissions summary
Scope 1: 13
Scope 2 (MB): 16
Scope 3: (net
emissions*): 671
tCO
2
e
Scope 3: Purchased
goods and services
Scope 3: Business travel
Scope 3: Employee
commuting and homeworking
Scope 3: Captal goods
321
Scope:
0
50
100
150
200
250
300
350
400
450
500
*including verified carbon offsets
Scope 3
Purchased
goods
and services
Scope 3
Business travel
Scope 3
Capital goods
Scope 3
Employee
commuting
and
homeworking
Figure 4.2. CLIG – Scopes 1-3 GHG emissions summary.
4.3.1. Energy consumption summary
We have used a financial control boundary.
The energy consumption used to calculate
emissions for Scopes 1 & 2 has increased in
period from 388,589 kWh to 479,594 on
the current period. This was driven by the
concurrent closure of Coatesville and the
opening of our larger West Chester office,
as well as an increase in consumption at our
Rochester and Singapore offices. Our West
Chester office allows for Renewable Energy
Credits to be purchased, and is in a
location that is accessible to employees by
bike, public transportation, or walking, in
addition to automobiles. The Coatesville
office was only accessible by automobiles.
Our consolidation strategy, and the
associated energy consumption trends are
shown below.
Scope 3 Year ended Year ended
Scope Emissions type category Indicator name 30th June 2024 30th June 2023
Scope 1 – Total direct GHG emissions Scope 1 Total (tCO
2
e Global) 13.06 6.91
Scope 1 Direct N/A Company facilities – Stationary Combustion (gas) (Non-UK only) 13.06 6.91
Direct N/A Company vehicles – –
Direct N/A Fugitive Emissions – –
Scope 2 – Indirect energy related emissions Scope 2 (market-based) sub-total (tCO
2
e Global) 16.32 48.19
Scope 2 Indirect N/A Purchased electricity for own use (location-based) (UK) 17.15 16.55
Indirect N/A Purchased electricity for own use (location-based) (Non-UK) 72.02 55.93
Indirect N/A Purchased electricity for own use (market-based) (UK) 0.00 0.00
Indirect N/A Purchased electricity for own use (market-based) (Non-UK) 16.32 48.19
Scopes 1 & 2 Total Scopes 1 & 2 (market-based) sub-total (tCO
2
e Global) 29.38 55.10
Scope 3 – Indirect emissions Scope 3 total (tCO
2
e Global) 1,131.03 1,039.58
Carbon 6 Verified carbon offsets purchased and retired in period
offsets (offset of business travel plus contingency) (460.00)
Scope 3 net total (tCO
2
e Global) 671.03
Upstream 1 Purchased goods and services 428.59 533.27
Upstream 2 Capital goods 100.11 134.65
Upstream 3 Fuel & energy related activities (not included in scope 1 and scope 2) 6.57 3.80
Upstream 5 Water & Waste generated in operations 6.25 6.25
Upstream 6 Business travel 437.86 183.01
Upstream 7 Employee commuting & homeworking 151.65 178.61
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
21/22 kWh 22-23 kWh 23-23 kWh
KIM Naples
(US)
West
Chester
(US)
Seattle
(US)
Offices now closed
Coatesville
(US)
SingaporeLondonKIM
Rochester
(US)
Dubai
(UAE)
kWh
Figure 4.3. CLIG – Year on year comparison of electricity consumption
and office closures
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4.3.2. Scope 1 & 2 comparison
with base year
Our Scope 1 & 2 market-based emissions
have reduced by 26 tCO
2
e from last year,
as a result of the following measures:
• Procurement of a green electricity
contract for our London office.
• Purchase of wind energy credits for
our Rochester office (US).
• Purchase of Renewable Energy
Credits (RECs) for our West Chester
office (US).
Our associated Scope 1 & 2 intensity ratio
has reduced from 0.91 tonnes CO
2
e/FTE
in our revised base year (y/e 2022), to
0.25 tonnes CO
2
e/FTE this year, with a
reference value of 118 FTE in period.
4.3.3. Footprint commentary
Operational Scope 1 & 2 (location-based)
emissions increased by 23% from the
previous year, primarily due to increased
energy consumption noted previously. As
noted above, we implemented a series of
emissions reduction initiatives which have
resulted in a reduction of 26 tCO
2
e in our
market-based emissions.
Business travel significantly increased in
period as a result of a focus on marketing
efforts and additional meetings with
clients and prospects. We also held our
Group Strategy Meeting for all Group
employees and our Board in September
2023 after a gap of four years.
0
50
100
150
200
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24
GHG emissions (tCO
2
e)
Reporting period
Figure 4.5. CLIG – Year on year comparison of Scopes 1 & 2 combined (tCO
2
e).
30th June 2022 30th June 2023 30th June 2024
0.91
0.25
0.47
Figure 4.6. CLIG market-based Scopes 1 & 2 intensity ratios (tCO
2
e/FTE)
Figure 4.4. CLIG – Year on year comparison of scopes 1 & 2 energy consumption
Year ended Year ended
Scopes 1 & 2 energy consumption Units Indicator 30th June 2024 30th June 2023
Scope 1 Direct kWh Company facilities- Stationary Combustion (gas)* (Non-UK only) 72,033 38,129
Direct kWh Company vehicles – –
Direct kWh Fugitive Emissions* – –
Scope 2 Indirect kWh Purchased electricity for own use (UK) 82,848 82,444
Indirect kWh Purchased electricity for own use (Non-UK) 324,713 268,016
Scope 1 & 2 total Direct & Indirect kWh All 5 categories 479,594 388,589
City of London Investment Group PLC Annual Report 2023/2024 45
Overview Financial statements Shareholder informationGovernanceStrategic report
To offset the impact of the increased
business travel, the Group implemented
a carbon offset programme as described
previously, and as shown in figure 4.7.
The small contingency of carbon credits
is also highlighted. Air travel accounts
for 98% (428 tCO
2
e) of all business
travel emissions.
4.4. Targets and future actions
Limiting the average global temperature
rise to ‘well below 2°C above pre-
industrial levels’ and pursuing efforts to
limit the rise to 1.5°C above pre-industrial
levels, in line with the Paris Agreement,
is a critical challenge facing the global
economy. Our net zero target considers
alignment with the UK’s legally binding
requirement to reduce its greenhouse gas
emissions by 100% from 1990 levels. The
net zero target for the UK was defined in
the Climate Change Act 2008 (2050
Target Amendment) Order 2019.
We are targeting operational net zero by
2050 at the latest. We will be developing
a Group climate strategy that will set out
our near-term 2030 and long-term 2050
net zero targets. This will consider the
actions we are taking across various
climate pillars. Implementation of our
operational decarbonisation strategy will
be led by our Group Executive
Committee and representatives from
CLIM & KIM, and overseen by the ARC.
Operational net zero targets
under consideration
1. Pillar 1 – Reduce absolute Scope 2
(market-based) GHG emissions to
0 by 2027.
2. Pillar 2 – Reduce absolute Scope 1
& 2 (location-based) greenhouse gas
(GHG) emissions by 40-50% by 2030
from a 2022 baseline. We are actively
considering the role of appropriate and
practicable low and zero carbon
technologies (LZCs) at our sites to
support the reduction of our Scope 1
& 2 emissions, and associated energy
consumption.
3. Pillar 3 – Reducing and offsetting
business travel with additionality and
permanence. Due to our geographical
spread and client base, we are reviewing
our policies. Our approach will consider
reducing what we can in the first
instance, and then offsetting necessary
business travel through verified
schemes, such as Gold Standard.
We note recent market developments,
specifically from The Integrity Council
for the Voluntary Carbon Market and
their ongoing carbon-crediting
programs that meet the high-integrity
criteria set out in its Core Carbon
Principles (CCPs). Gold Standard is
amongst the programs to become CCP-
eligible. Any future offsets procured will
also consider CCP labelling. The group
remains open about documenting its
emissions and documenting the steps
we are taking to avoid, eliminate and
reduce where we can, and to offset what
we cannot. One of the perennial themes
at CLIG is constant improvement, and
so we look forward to seeing how
carbon offset standards evolve and how
we can best position ourselves to ensure
any offsets we purchase are put towards
robust emissions reduction projects.
4. Pillar 4 – We will consider
implementing KPIs and annual
reductions in our Scope 3 emissions.
This may include the volume and
quantity of our operational waste,
material usage and water consumption.
We appreciate that this will require a
level of engagement with our
supply/value chain to reduce these
emissions. It will support our
stewardship role in promoting
sustainability throughout our
business operations.
-600
-400
-200
0
200
400
600
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23
GHG emissions (tCO
2
e)
Scope 3 Business travel: flights
Scope 3 Business travel- All. FY23/24
Verified carbon offset for all business travel
2023/24
Figure 4.7. Business travel flight history & verified carbon offsets in period
SECTION 172 (1) STATEMENT
46 City of London Investment Group PLC Annual Report 2023/2024
Strategic report
Section 172 (1) of the Companies Act 2006 requires Directors to act in the way they consider, in good
faith, would be most likely to promote the success of the Company for the benefit of its shareholders as
a whole and, in so doing, have regard (amongst other matters) to:
• the likely consequences of any decisions in the long term;
• the interests of the Company’s employees;
• the need to foster the Company’s business relationships with suppliers, customers and others;
• the impact of the Company’s operations on the community and environment;
• the desirability of the Company maintaining a reputation for high standards of business conduct; and
• the need to act fairly to all shareholders of the Company.
As part of its decision-making process, the Board considers a broad range of stakeholders; however, it is acknowledged that, in
balancing different perspectives, it may not always be possible to deliver everyone’s desired outcome. Refer to pages 58 to 59 for our
engagement with various stakeholders.
The Board fulfils its duties in collaboration with the senior management teams of its two operating subsidiaries as detailed on page 17,
who manage the day-to-day operations of the business along with the Executive Director and the Group Executive Committee, the
Company’s extensive corporate responsibility activities as set out on pages 34 to 36 and through the application of the corporate
governance framework as set out in the governance report on page 60.
The relationship with the three key stakeholders of our business (Clients, Employees, Shareholders) has been expressly acknowledged
by the Board since CLIG first became a public company in 2006 and has been a key feature of every Annual Report ever since
(see page 20).
Signed on behalf of the Board of Directors of City of London Investment Group PLC.
Tom Griffith
Chief Executive Officer
23rd September 2024
Should shareholders have any questions with regard to the content of this report, they are welcome to email us at
investorrelations@citlon.co.uk, but we will not be able to answer any questions of a price-sensitive nature.
Contents
Board Leadership and Company Purpose
– Chair’s introduction 48
– Board of Directors 50
– Board activities 52
– Stakeholder engagement 58
Division of responsibilities
– Corporate governance framework 60
Composition, succession and evaluation
– Board evaluation 61
– Nomination Committee report 62
Audit, risk and internal control
– Audit & Risk Committee report 66
Remuneration
– Chair of the Remuneration Committee’s annual statement 70
– Remuneration overview 72
– Annual report on remuneration 75
– Directors’ remuneration policy 86
Statutory, regulatory and other information
– Directors’ report 91
– Statement of Directors’ responsibilities 94
City of London Investment Group PLC Annual Report 2023/2024 47
Strategic reportOverview Financial statements Shareholder information
Governance
GOVERNANCE
CHAIR’S INTRODUCTION
On behalf of the Board, I am pleased to introduce the
Company’s corporate governance report for this year which sets
out our corporate governance framework and how we have
complied with the UK Corporate Governance Code.
CLIG’s keen focus on corporate governance has continued
through the year. We have continued to strengthen the reporting
relationship between the Group Executive Committee, begun to
embed the recent changes to the Board and Committees and
discussed succession planning.
Board composition
Following Barry Aling’s retirement last October I took on the
role of Chair of the Board. Shortly afterwards at the start of
March, we were pleased to welcome Sarah Ing as an
Independent Non-Executive Director to the Board. Sarah has
been appointed as a member on all our committees and will
soon become Chair of our Remuneration Committee. I have
taken up the Chair of the Nomination Committee on a
temporary basis.
Tazim Essani has confirmed that she will not be seeking
re-election as a Director of the Company at the forthcoming
2024 Annual General Meeting on 28th October 2024.
The search for a new independent Non-Executive Director
is progressing well with a shortlist of candidates being
considered by the Board. I would like to convey our
appreciation to Tazim for her many contributions.
Diversity and inclusion
Last year we reported that a key priority of the Board and
Nomination Committee was to actively consider diversity
initiatives. We are pleased to be able to confirm that as at
30th June 2024 we have met two of the three diversity targets
set by Listing Rule 9.8.6 R(9)(a). Full details can be found on
page 65 of the Nomination Committee Report. We are
committed to having a Board that is diverse and balanced but,
we are also aware of the challenges of finding a diverse group of
candidates with the skills and experience for our business.
We seek to draw on as wide a pool of talent as possible.
It remains our firm intention to comply fully with best practice
in respect of independence, diversity and inclusion both on the
Board and throughout the Group. Compliance will need to be
achieved in a way that ensures an appropriate level of continuity
and aligns with the needs of CLIG’s business.
The Company’s Board and Committee Diversity Policy and
its objectives can be found on the Company’s website:
www.clig.co.uk and our detailed statement on diversity can
be found in the Nomination Committee report.
Succession planning
Succession planning shall remain a key priority for the
Nomination Committee with a particular focus on the process
for identifying a new Chair to replace me in due course and a
new independent Non-Executive Director to replace Tazim
Essani who will not be seeking re-election at the AGM in
October 2024. As mentioned, we are progressing with the
selection of a new NED to join the Board. Further details can
be found in the Nomination Committee report on page 62.
UK Corporate Governance Code
During the year, the Group was fully compliant with the
provisions of the UK Corporate Governance Code.
Please refer to pages 54 and 55 for more information.
48 City of London Investment Group PLC Annual Report 2023/2024
Governance: Board Leadership and Company Purpose
“A solid governance framework and appropriate
processes are well-embedded throughout the Group,
and we continue to enhance our arrangements
where we identify opportunities to do so.”
Rian Dartnell Chair
City of London Investment Group PLC Annual Report 2023/2024 49
Board performance
The Board reviewed its own performance and effectiveness along
with that of its Committees and individual Directors, with the
results and feedback from the Directors due to be discussed at
the Board meeting in October.
An update on the outcomes and actions from the 2024
performance will be available in our next Annual Report.
Further details about the 2024 process can be found on page 61.
Culture, purpose, values and strategy
The Board is responsible for setting the Group’s purpose, values
and strategy and strives to set a positive tone from the top,
leading by example and acting with integrity. During the year,
the Board visited the Group’s offices in the UK and US. We
value being able to engage with employees in this way as it
provides a valuable opportunity for us to gauge the culture of
the Group in a more practical and direct way, in addition to the
regular monitoring of performance at Board meetings. Further
details on the Group’s culture, purpose and values can be found
on page 57 and detail on the Group’s strategy can be found on
pages 20 to 22.
Looking ahead
A solid governance framework and appropriate processes are
well-embedded throughout the Group, and we continue to
improve where we identify opportunities to do so. At each
meeting, our Company Secretary provides the Board with
updates on relevant legal, governance and regulatory matters
and ably supports the Directors as necessary.
We have a Board and management team keenly focused on
taking advantage of opportunities and addressing periodic
challenges in the interests of all of our stakeholders.
I am grateful to my Board colleagues and the CLIG team
for their care and commitment.
Rian Dartnell
Chair of the Board
23rd September 2024
Strategic reportOverview Financial statements Shareholder information
Governance
BOARD OF DIRECTORS
50 City of London Investment Group PLC Annual Report 2023/2024
Governance: Board Leadership and Company Purpose
Audit & Risk Committee
Nomination Committee
Remuneration Committee
Committee Chair
Rian Dartnell
CHAIR OF THE BOARD
Date of appointment:
1st October 2020
Aggregate tenure: >9 years
Experience
Rian Dartnell is the Managing Partner of
PAXIS Key Holdings and works with
endowment, foundation and family
relationships to identify and monitor
exceptional managers and investments.
He also serves as a Trustee, Adviser, or
Investment member for high quality family,
endowment and institutional investors.
Rian served as a Non-Executive Director
on the Group Board from June 2011 to
July 2016.
External listed directorships: none
Contributes to the Board: strong leadership;
extensive experience of asset management
industry; experienced investor; and financial
and emerging markets knowledge.
CHAIR
Peter Roth
SENIOR INDEPENDENT
NON-EXECUTIVE DIRECTOR
Date of appointment:
1st June 2019
Tenure: >5 years
Experience
Peter Roth has more than 40 years of
experience in the financial services industry.
He has held senior executive positions with
Fox-Pitt, Kelton and Keefe, Bruyette &
Woods. Peter currently serves as Managing
Partner of Rothpoint Group LLC, a New
York based consulting firm focusing on the
financial services industry. He also serves
as a trustee of the Guggenheim Credit
Income Fund and is chairman of the
audit committee and a member of the
nominating and governance committee and
independent trustee committee. Peter is
also a Director of the Stone Point Credit
Corporation and is the Chairman of the
audit committee and member of the
nomination and governance committee.
He also serves on the Board of St Mary’s
Healthcare System for Children where he
chairs the finance committee and serves
on the executive, nomination and
development committees.
External listed directorships: none
Contributes to the Board: experienced
investor; extensive knowledge of financial
services industry; Audit Committee Chair
experience; and wide-ranging governance
experience.
Tazim Essani
INDEPENDENT NON-EXECUTIVE
DIRECTOR
Date of appointment:
1st February 2021
Tenure: >3 years
Experience
Tazim Essani has over 30 years of
experience in executive roles at Close
Brothers Group plc, Santander UK plc
and GE Capital. She has a significant
track record in strategy and M&A in
financial services in the UK and
internationally covering integration,
management transition and realization
of synergy benefits.
External listed directorships: None
Contributes to the Board: extensive
knowledge of financial services industry;
leadership; strategic consulting; and strong
entrepreneurial skills.
INDEPENDENT NON-EXECUTIVE DIRECTORS
City of London Investment Group PLC Annual Report 2023/2024 51
Strategic reportOverview Financial statements Shareholder information
Governance
EXECUTIVE DIRECTOR
Sarah Ing
INDEPENDENT NON-EXECUTIVE
DIRECTOR
Date of appointment:
1st March 2024
Aggregate tenure: <1 year
Experience
Sarah is a qualified chartered accountant
with over 30 years of experience in the
financial services sector including audit,
corporate finance, investment banking and
asset management. She is an experienced
NED in quoted financial services
companies. Previously, Sarah founded and
ran an investment management business
and was also a top-rated equity research
analyst covering the financial sector. She is
the Chair of the Remuneration Committee
at CMC Markets plc, Chair of the Audit
and Risk Committee at XPS Pensions
Group plc and at Marex Group plc she is
senior independent Director and Chair of
the Audit and Compliance Committee.
External listed directorships: Non-Executive
Director - CMC Markets plc, XPS Pensions
Group plc and Marex Group plc.
Contributes to the Board: extensive
knowledge of financial services industry;
leadership; Audit Committee & Remuneration
Committee Chair; and wide-ranging
governance experience.
INDEPENDENT NON-EXECUTIVE
DIRECTORS
Tom Griffith
CHIEF EXECUTIVE OFFICER
Date of appointment:
1st June 2004
Aggregate tenure: >20 years
Experience
Tom was the Deputy Chief Executive
Officer and COO of the firm before
becoming CEO in March 2019. Prior to
joining City of London Group in 2000,
Tom 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.
External listed directorships: none
Contributes to the Board: strong
entrepreneurial leadership; asset
management experience; proven track
record implementing successful business
strategies; and Board experience.
BOARD ACTIVITIES
BOARD AND COMMITTEE MEETING AND ATTENDANCE
Board Audit & Risk Committee Nomination Committee Remuneration Committee
Number of scheduled meetings 6 5 4 4
Current Directors
Executive Directors
Tom Griffith 6/6 – – –
Non-Executive Directors
Barry Aling
(1)
2/2 – – –
Jane Stabile
(2)
5/5 – 3/3 3/3
George Karpus
(3)
1/1 – – –
Peter Roth 6/6 5/5 4/4 4/4
Rian Dartnell 6/6 2/2 1/1 4/4
Tazim Essani 6/6 5/5 4/4 4/4
Sarah Ing
(3)
1/1 2/2 1/1 1/1
Notes:
• Includes scheduled meeting dates that have taken place up until the financial year ended 30th June 2024.
1) Barry Aling retired from the Board on 23rd October 2023.
2) Jane Stabile retired from the Board on 29th February 2024.
3) George Karpus retired from the Board on 31st July 2023.
4) Sarah Ing was appointed to the Board on 1st March 2024.
TOTAL BOARD AND COMMITTEE MEETINGS
Board 6
Audit & Risk Committee 5
Nomination Committee 4
Remuneration Committee 4
BOARD STATISTICS*
52 City of London Investment Group PLC Annual Report 2023/2024
Governance: Board Leadership and Company Purpose
Male
Female
2
3
Non-Executive
Executive
1
4
3-6 years
0-3 years
6-8+ years
Rian Dartnell’s previous tenure as
CLIG’s Director has been included
1
2
2
Non-Independent
Independent
3
1
Gender balance Executive vs.
Non-Executive
Tenure Independent vs.
Non-Independent
(excluding Chair)
City of London Investment Group PLC Annual Report 2023/2024 53
CORPORATE GOVERNANCE ARRANGEMENTS
Compliance with the UK Corporate Governance Code
The Board applies and reports against the UK Corporate
Governance Code 2018 (the Code), a copy of which can be
found at
www.frc.org.uk.
This report has been structured to assist shareholders and
other stakeholders to interpret the Company’s application of
the Code principles. Appropriate cross-references are made
where relevant information is disclosed outside of the
corporate governance report.
Throughout the financial year ended 30th June 2024 the
Company complied with all the provisions of the Code.
Further details can be found on pages 54 to 55.
The role of the Board
The Board is responsible for promoting the Company’s long-
term success. It achieves this by setting the Group’s strategy and
monitoring delivery against it. Further details can be found on
pages 20 to 22. Group strategy is guided by the Company’s
purpose and values, further details of which can be found on
page 57.
Matters reserved to the Board
The Board operates a policy of matters formally reserved for its
decision, which includes items that are material in delivering on
the Group’s strategy and purpose. These matters include:
• Setting the Company’s values and standards and monitoring
progress against them.
• Approval of strategic aims and objectives.
• Approval of budgets, capital expenditure and changes to the
Group’s capital structure.
• Ensuring a sound system of internal controls and risk
management.
• Approval of financial results and trading updates.
• Approval of dividends and review of dividend policy.
• Approval of workforce policies.
The full schedule of matters reserved can be found on the
Company’s website:
www.clig.co.uk.
Board meetings
The Group Chief Financial Officer prepares an agenda for each
Board meeting in conjunction with the Company Secretary,
Chief Executive Officer and Chair of the Board. Agendas are
structured to allow sufficient time for discussion and debate, and
to ensure that the Board covers all items it needs to in order to
discharge its duties.
Conflicts of interest
On appointment, Directors are required to disclose conflicts of
interest to the Company. Details of existing conflicts of interest
are tabled at each Board meeting and Directors are asked to
provide updates where required. Conflicts of interest are also
verified as part of year-end reporting.
Director time commitment and external appointments
Director time commitments are assessed annually by the
Nomination Committee. Directors are required to disclose
any significant commitments upon appointment and all
external appointments must be approved by the Board
before they are accepted.
Strategic reportOverview Financial statements Shareholder information
Governance
BOARD ACTIVITIES
CONTINUED
54 City of London Investment Group PLC Annual Report 2023/2024
Governance: Board Leadership and Company Purpose
Application of Code Principles
The table below provides an explanation of how the Board has applied the Code Principles during the year ended 30th June 2024.
BOARD LEADERSHIP AND COMPANY PURPOSE
DIVISION OF RESPONSIBILITIES
CODE PRINCIPLE SUMMARY
A
A successful Company is led by an effective and entrepreneurial Board, whose role is to promote the long-term
sustainable success of the Company, generating value for shareholders and contributing to wider society.
The role of the Board is set out on page 53. The section 172 (1) statement on page 46 explains how the Directors carry
out their duty to promote the long-term success of the Company, taking into account the outcome of engagement
with key stakeholders.
B
The Board should establish the Company’s purpose, values and strategy, and satisfy itself that these and its
culture are aligned. All Directors must act with integrity, lead by example and promote the desired culture.
Please see page 57 for a summary of the Group’s culture, purpose, values and pages 20 to 22 for strategy.
C
The Board should ensure that the necessary resources are in place for the Company to meet its objectives,
and measure performance against them. The Board should also establish a framework of prudent and effective
controls, which enable risk to be assessed and managed.
The Board’s role in ensuring the Group has the necessary resources is stated on page 60. The Audit & Risk Committee
report on pages 66 to 69 includes a description of the Group’s approach to risk management and internal control.
D
In order for the Company to meet its responsibilities to shareholders and stakeholders, the Board should ensure
effective engagement with, and encourage participation from, these parties.
Commentary about stakeholder engagement can be found on pages 58 to 59.
E
The Board should ensure that workforce policies and practices are consistent with the Company’s values and
support its long-term sustainable success. The workforce should be able to raise any matters of concern.
The approval of workforce policies is a matter reserved to the Board. Please see page 58 for more details on the
Board’s role in relation to workforce policies and whistleblowing.
F
The Chair leads the Board and is responsible for its overall effectiveness in directing the Company. He or she
should demonstrate effective judgement throughout their tenure and promote a culture of openness and debate.
In addition, the Chair facilitates constructive Board relations and the effective contribution of all Non-Executive
Directors, and ensures that Directors receive accurate, timely and clear information.
Information about the Chair’s role and responsibilities can be found on page 60. Details of the Chair’s tenure and
succession plans can be found on 63.
G
The Board should include an appropriate combination of Executive and Non-Executive (and in particular,
Independent Non-Executive) Directors, such that no one individual or small group of individuals dominates the
Board’s decision-making. There should be a division of responsibilities between the leadership of the Board and
the executive leadership of the Company’s business.
The composition of the Board is kept under review. A description of the division of responsibilities between the Board
and the Group Executive Committee can be found on page 60.
H
Non-Executive Directors should have sufficient time to meet their Board responsibilities. They should provide
constructive challenge and strategic guidance, offer specialist advice, and hold management to account.
Expectations about time commitment and the duties of the role are set on appointment and the Chair of the Board provides
support to the Non-Executive Directors as necessary thereafter. Please see pages 52 and 61 for additional commentary.
I
The Board, supported by the Company Secretary, should ensure that it has the policies, processes, information,
time and resources it needs in order to function effectively and efficiently.
Information about the Company’s Board performance evaluation, which includes a review of Board processes,
can be found on page 61.
City of London Investment Group PLC Annual Report 2023/2024 55
Strategic reportOverview Financial statements Shareholder information
Governance
COMPOSITION, SUCCESSION AND EVALUATION
AUDIT, RISK AND INTERNAL CONTROL
REMUNERATION
CODE PRINCIPLE SUMMARY
J
Appointments to the Board should be subject to a formal, rigorous and transparent procedure and an effective
succession plan should be maintained for Board and senior management. Both appointments and succession
plans should be based on merit and objective criteria and, within this context, should promote diversity of
gender, social and ethnic backgrounds, cognitive and personal strengths.
The approach to Board appointments and succession planning and the Board Diversity policy are described on
pages 63 to 65.
K
The Board and its committees should have a combination of skills, experience and knowledge. Consideration
should be given to the length of service of the Board as a whole and membership regularly refreshed.
The Board reviews the balance of skills and experience needed as part of its discussions on succession planning.
See page 63 for more information.
L
Annual evaluation of the Board should consider its composition, diversity and how effectively members work
together to achieve objectives. Individual evaluation should demonstrate whether each Director continues to
contribute effectively.
Information about the annual Board evaluation and the individual evaluation of Directors can be found on page 61.
M
The Board should establish formal and transparent policies and procedures to ensure the independence
and effectiveness of internal and external audit functions and satisfy itself on the integrity of financial and
narrative statements.
The Board monitors the need for an internal audit function and the policies and processes in place to ensure the
independence and effectiveness of the external auditor. Further details can be found in the Audit & Risk Committee
Report on pages 66 to 69.
P
Remuneration policies and practices should be designed to support strategy and promote long-term
sustainable success. Executive remuneration should be aligned to Company purpose and values, and be
clearly linked to the successful delivery of the Company’s long-term strategy.
The Remuneration Committee considers the alignment of rewards policies with long-term strategy. Refer to pages 70 to 71.
Q
A formal and transparent procedure for developing policy on executive remuneration and determining
Director and senior management remuneration should be established. No Director should be involved in
deciding their own remuneration outcome.
Details about the operation of the Remuneration Committee are included in the Chair of the Remuneration Committee’s
Annual Statement and the Annual Report on Remuneration on pages 70 to 85.
R
Directors should exercise independent judgement and discretion when authorising remuneration outcomes,
taking account of Company and individual performance, and wider circumstances.
The Remuneration Committee exercises appropriate discretion when authorising remuneration outcomes, as described
in the Annual Report on Remuneration on pages 75 to 85.
N
The Board should present a fair, balanced and understandable assessment of the Company’s position
and prospects.
The Audit & Risk Committee and the Board consider whether the annual report is fair, balanced and understandable
and the appropriate statement is included on page 67.
O
The Board should establish procedures to manage risk, oversee the internal control framework and determine
the nature and extent of the principal risks the Company is willing to take in order to achieve its long-term
strategic objectives.
Disclosures on the Company’s internal control and risk management systems are included in the Audit & Risk Committee
Report on pages 66 to 69 and in the Directors’ Report on page 93.
56 City of London Investment Group PLC Annual Report 2023/2024
BOARD ACTIVITIES
CONTINUED
Governance: Board Leadership and Company Purpose
The Board discharges its duties through an annual programme of meetings.
Some key areas of focus during the financial year are shown below.
STRATEGY AND PERFORMANCE
•
Received and discussed regular reports from the Executive
Director and senior management on performance.
• Reviewed and approved Group strategy and KPIs, as set
out on pages 20 to 27.
• Reviewed culture, purpose and values and alignment
with culture.
LEGAL AND GOVERNANCE
Succession and appointments
• The Board considered proposals from the Nomination
Committee for transition of the Chair’s role.
Annual General Meeting
• Held an AGM.
Governance
• Considered reports from the Committee Chairs.
• Approved various Group policies.
• Assessed the Group’s compliance with corporate
governance guidelines and regulation.
FINANCIAL OVERSIGHT
Dividends
• Reviewed the Company’s dividend policy.
• Considered and declared an interim dividend of 11p per
share for payment on 28th March 2024.
• Considered and recommended a final dividend of 22p per
share for payment on 7th November 2024.
External reporting
• Upon the recommendation of the Audit & Risk Committee,
reviewed and approved full and half year results and the
Annual Report and Accounts.
• Reviewed and approved quarterly trading statements.
Budget and financial resource
• Reviewed and approved the 2023/2024 Group budget.
AUDIT, RISK AND INTERNAL CONTROL
•
Oversaw the audit tender process.
• Reviewed and approved the Internal Capital and Risk
Assessment (ICARA).
• Reviewed systems of risk management and internal control.
• Approved the going concern statement and assessment
of viability.
• Carried out a robust assessment of the Company’s principal
and emerging risks.
City of London Investment Group PLC Annual Report 2023/2024 57
Strategic reportOverview Financial statements Shareholder information
Governance
The Board reviewed its purpose, values and methods for
assessing and monitoring culture in September 2024.
PURPOSE
The Group exists for the mutual benefit of our three primary
stakeholders: Clients, Employees and Shareholders.
CULTURE
The Board is responsible for setting the cultural tone of the
Group by way of clear policies, procedures and codes
which set out, and aim to ensure attainment of, stakeholder
expectations. By setting an appropriate cultural framework
the Board’s goal is to empower employees to deliver
consistently and sustainably against the strategy it sets.
New employees receive an induction including coaching on
the Company’s Code of Ethics, which covers behavioural
expectations around topics such as bribery and corruption,
conflicts of interest, insider dealing, confidentiality, personal
securities account dealing, inclusion, gifts and hospitality and
delegated levels of authority.
The Board receives updates on employee retention, an
important indicator that the Board has succeeded in
embedding a positive culture. The Group boasts a very low
level of employee turnover with high levels of reported
employee satisfaction. Employee retention remains a key
cornerstone of the Group’s strategy and is one of the
Group’s additional key performance indicators. Further
details on strategy can be found on pages 20 to 22 and
additional key performance indicators can be found on
pages 24 to 27.
The Board receives regular updates from CLIM’s Head of
Compliance and KIM’s Chief Compliance Officer, which
contain details of policy breaches, including in relation to the
Code of Ethics. The Board monitors such breaches closely
with a view to taking action should the reported issues
indicate a trend as opposed to an exception.
The Board also reviews and assesses the Group’s culture
by directly engaging with the employees at both operating
subsidiaries. The following are some examples of such
engagement that have taken place during the financial year
and up to the date of the Annual Report:
September 2023 Group Strategy Meeting in West Chester, PA
• Spent over two days with all Group employees
participating in a mix of formal presentations, social
and team building events
October 2023 AGM and Board meetings in London
• Board visit to London office
• Board’s informal interaction with all UK employees
April 2024 Board meeting in West Chester, PA
• CLIM & KIM employee presentations to Board
• Board’s informal interaction with all CLIM’s US employees
Refer to pages 58 to 59 for details of the Board’s engagement
with various stakeholders.
VALUES
•
The Clients pay the bills – Clients expect superior
investment performance, openness and accountability,
and ethical treatment.
• The Employees manage the business – Employees expect
fair treatment, open communication and to share in the
success of the Group.
• The Shareholders own the business – Shareholders expect
relevant risk and cost controls, quality earnings and within
the bounds of prudential balance sheet management,
regular dividend distributions.
The Board is responsible for setting the Company’s purpose, values and strategy,
and for satisfying itself that these and its culture are aligned.
58 City of London Investment Group PLC Annual Report 2023/2024
STAKEHOLDER ENGAGEMENT
Governance: Board Leadership and Company Purpose
CLIENTS
Key considerations
• Ensure client needs are understood
and met.
• Ensure transparency on key issues
related to investment products,
including investment performance,
regulatory requirements and
ESG considerations.
• Clear communication.
How the Board engaged
• Received regular reports providing
updates on client relationships, including
details of client calls and engagement.
EMPLOYEES
Key considerations
• Ensure employees have an ongoing opportunity to share ideas and raise issues
with senior management and the Board of Directors.
• Develop employee expertise and provide opportunities for advancement.
• Ensure that employees are supported in their lives outside of their work in order
to support their families’ and communities’ well-being (see page 34 for further
detail on employee welfare).
How the Board engaged
• Board meetings are held at Company offices to provide employees with the
opportunity for informal interaction with the Board.
• Regular site visits take place.
• Board’s informal interaction with all Group employees in Group’s Strategy
Meeting in September 2023.
• Board’s informal interaction with employees from various offices in October 2023
and April 2024.
• The Board keeps workforce policies under review to ensure they are consistent
with the Group’s values and support the Company’s long-term success.
How the business engaged
• Refer to page 34 for employee welfare policies.
SHAREHOLDERS
Key considerations
• Ensure that shareholder interests and
concerns are understood and addressed.
• Ensure transparency on key issues and
provide clear communications.
How the Board engaged
• Annual General Meeting.
• Regular in-person/video conference
meetings with shareholders.
How the business engaged
• Video conference presentations and
in-person/virtual roadshows around
results announcements.
STATEMENT OF VOTING AT
GENERAL MEETING
Provision 4 of the UK Corporate
Governance Code
At the Company’s AGM held on 23rd
October 2023, sixteen resolutions were
proposed to shareholders with Resolutions 5
to 8, 11 and 13 to 16 receiving less than 80%
approval. Since the AGM the Board has
pursued a strategy of engagement with the
controlling shareholder group and have had
a series of constructive meetings. We have
also been engaging with our other
shareholders and, as always, plan to maintain
transparency in our ongoing dialogue.
Workforce engagement
Provision 5 of the UK Corporate Governance Code
The Board is required to agree a mechanism for ensuring ongoing engagement
with the workforce and has designated Rian Dartnell, the Chair of the Board,
as the Non-Executive Director in charge of employee engagement. This role entails
championing strength of communication between the Board and employees,
and ensuring appropriate opportunities are created for employees to give feedback.
Whistleblowing
Provision 6 of the UK Corporate Governance Code
The Company’s whistleblowing mechanism enables the workforce to report concerns
anonymously. The Board receives details about reports received pursuant to this
mechanism at each scheduled meeting and ensures that a proportionate and
independent investigation and follow up action is taken in relation to all reports.
Since the year end an external third party whistleblowing reporting service is being
set up, in addition to the existing advice hotline, which will provide a secure,
independent and confidential channel for employees to report concerns,
demonstrating our commitment to ethical behaviour and transparency.
The Board must act in a way that promotes the success of the Company for the
benefit of shareholders, whilst having due regard to its wider stakeholders.
Details of the Board and wider Group’s engagement with its stakeholders are set out below and the s172 (1) statement
can be found on page 44.
Key stakeholders
City of London Investment Group PLC Annual Report 2023/2024 59
Strategic reportOverview Financial statements Shareholder information
Governance
THE ENVIRONMENT
Key considerations
• The Group is dedicated to ensuring
that the environment is protected.
How the Board engaged
• Receives reports regarding the
Group’s carbon footprint and
sustainability data.
• Refer to disclosures recommended
by TCFD on pages 37 to 45.
How the business engaged
• Continued our engagement with a third-
party environment consultant to enhance
our climate-related disclosures on
environmental risks and opportunities.
• The Group endeavours to limit its
carbon footprint through a series of
Group-wide initiatives with an aim to
reduce absolute levels of emissions and
waste volumes as detailed on pages 35
and 37 to 45.
• We utilise Sustainalytics to ensure
that the investment process supports
ESG initiatives. Refer to page 36 in
relation to responsible investment.
• Refer to disclosures recommended
by TCFD on pages 37 to 45.
OUR COMMUNITIES
Key considerations
• The Group is dedicated to ensuring
that we are good citizens in the
communities in which we have offices.
How the Board engaged
• The Board challenged the Group to
review engagement in local areas, in
the form of internships and outreach.
How the business engaged
• Community outreach and support
efforts are a key element of our
ongoing business operations. Further
details can be found on page 36.
REGULATORS
Key considerations
• Ensure that the Group complies with
all relevant regulatory requirements.
• Proactively monitor changes in
regulatory requirements and ensure
the Group makes changes as required.
How the Board engaged
• Received and challenged regular
reports from finance and compliance.
How the business engaged
• Each operating subsidiary has a
compliance function which is
integral to investment management
and client functions and reports
to the Board.
VENDORS
Key considerations
• Ensure that vendors adopt and execute
data security practices consistent with
internal Group policies.
• Ensure that arms-length relationships
exist in order to protect client and
shareholder interests.
How the Board engaged
• Received and challenged regular
reports from operations.
How the business engaged
• Vendor relationships are managed
by senior management with
responsibilities clearly enumerated.
• ESG considerations are applied to
all vendors.
• Expense authorisations are approved
by an Executive Director, after
considering the rationale for
choosing a vendor.
CONSIDERATION OF STAKEHOLDERS IN DECISION-MAKING
Key considerations
Dividends
The Board approved an interim dividend of 11p which was paid on 28th March 2024 and is recommending a final dividend of 22p,
making a total of 33p for the year.
Other stakeholders
60 City of London Investment Group PLC Annual Report 2023/2024
BOARD ROLES
Chair
• Leads the Board and ensures its effectiveness.
• Supports the CEO in the execution of duties and providing constructive challenge.
• Works closely with Executive and Non-Executive Directors, and facilitates a culture of open, robust and effective debate.
• Ensures that the Board maintains effective communications with shareholders and other stakeholders.
• Ensures stakeholder interests are considered in Board’s decision-making.
Chief Executive Officer
• Responsible for executive management of the Group.
• Formulates and recommends Group strategy for Board approval and responsible for execution of approved strategy.
• Runs the business within appropriate delegated authorities, risk management and internal controls.
• Communicates and embeds a shared purpose, sets business values and builds management talent.
• Develops an effective relationship with the Chair and leverages the knowledge of Non-Executive Directors.
Senior Independent Director
• Provides a sounding board for the Chair and, if required, acts as an intermediary between Directors and shareholders.
• Leads the annual evaluation of the Chair’s performance.
• Leads the search for the appointment of a successor to the roles of Chair of the Board and Chair of the
Nomination Committee, where required.
• Available as an additional point of contact for shareholders and other stakeholders if they feel matters raised have not
been appropriately dealt with by the Chair and CEO.
Non-Executive Director
• Bring a broad external perspective, independent judgement and objectivity to the Board’s decision making and discussions.
• Challenge and support Executive Director in the development and implementation of the strategy and objectives of the Company.
• Take responsibility for monitoring the performance of Executive Directors.
• Other responsibilities include determining appropriate levels of remuneration, overseeing succession planning and ensuring
financial controls and risk management systems are robust.
CORPORATE GOVERNANCE FRAMEWORK
Governance: Division of responsibilities
BOARD OF DIRECTORS
Chaired by Rian Dartnell
Roles and responsibilities
• Establishes the Company’s purpose, values and strategy, satisfying itself that these
and its culture are aligned.
• Ensures that the Group’s financial structure, resources, talent and culture support
its objectives and long-term success.
• Oversees the framework for risk management and internal control.
• Maintains engagement with stakeholders.
AUDIT & RISK COMMITTEE
Chaired by Peter Roth
Comprised exclusively of three
Independent Non-Executive Directors.
Roles and responsibilities
• Oversees financial reporting,
audit and risk.
See page 66 for the Audit & Risk
Committee report.
NOMINATION COMMITTEE
Chaired by Rian Dartnell
Comprised exclusively of four
Independent Non-Executive Directors.
Roles and responsibilities
• Oversees Board composition,
succession planning and
governance matters.
See page 62 for the Nomination
Committee report.
REMUNERATION COMMITTEE
Chaired by Tazim Essani
Comprised exclusively of four
Independent Non-Executive Directors.
Roles and responsibilities
• Oversees Group remuneration policy
and strategy ensuring there is an
appropriate linkage between strategy
and reward.
See page 70 for the Remuneration
Committee report.
GROUP EXECUTIVE COMMITTEE (GEC)
Chaired by Tom Griffith
Comprised of four members – Carlos Yuste,
Dan Lippincott, Deepranjan Agrawal
and Tom Griffith.
Roles and responsibilities
• Provides executive oversight of the
Group’s operating businesses and day-
to-day management of the Group.
There is a clear division of responsibilities between the Board and its Committees.
Each role is clearly defined and distinct.
City of London Investment Group PLC Annual Report 2023/2024 61
BOARD EVALUATION
UPDATE ON 2023/4 EVALUATION PROCESS
The Board continues to review its own performance and
effectiveness and that of its Committees and individual Directors
on an annual basis. The 2023/24 effectiveness review was
sponsored by Rian Dartnell, Chair of the Nomination Committee,
and facilitated by the Company Secretary during May 2024.
The 2023/24 review was again conducted by way of a
questionnaire. The questions remained broadly similar to those
used in the 2022/23 review to allow a comparison of results over
time. Each Director was asked to complete the questionnaire and
the responses were collated into a report by the Company
Secretary for review by the Board.
As the Company is not a constituent of the FTSE 350, the Board
determined that it would not undertake an externally facilitated
Board evaluation in 2023/24 but the need for a periodic external
perspective will remain under review by the Board.
Overall, the results of the 2023/24 evaluation were positive and
showed that the Board continued to perform effectively.
Questionnaire topics included:
• Strategy
• The Board and stakeholders
• Board discussion and processes
• Risk, internal control and the Audit & Risk Committee
• Succession and the work of the Nomination Committee
• The Remuneration Committee
• The role of the Chair
OUTCOMES
The outcomes of the 2023/24 Board effectiveness review will be
discussed by the Board at its meeting in October 2024. The
Board will then confirm any key priorities and agree actions to
be taken during the year.
2023/24 Evaluation Process
The 2023/24 evaluation process followed a similar approach to
that used in 2022/23 and was again internally facilitated by the
Company Secretary. Rian Dartnell was sponsor of the process.
A questionnaire was sent to each Director for completion by
mid-June and the responses were collated into a report which will
be considered by the Board at its October 2024 Board meeting.
An update of the outcomes form the 2024 performance review
will be provided in the 2024/25 Annual Report.
Individual Directors
The individual skills, time commitment and independence of
each Director, are assessed annually and the Board confirmed
that each Director continues to contribute effectively to the
Board both within and outside of Board meetings.
Chair of the Board
The Non-Executive Directors met in April 2024 without Rian
Dartnell, Chair of the Board present to discuss his performance.
It was concluded that the Chair had continued to lead the
Board well, facilitating open dialogue and encouraging the
participation of all Directors. The Non-Executive Directors were
also appreciative of Mr. Dartnell’s contribution to the Board as
its Chair since October 2023. Additionally, during the year the
Chair held meetings with the Non-Executive Directors twice
without management present.
Strategic reportOverview Financial statements Shareholder information
Governance: Composition, succession and evaluation
Governance
NOMINATION COMMITTEE REPORT
62 City of London Investment Group PLC Annual Report 2023/2024
Governance: Composition, succession and evaluation
COMMITTEE MEMBERSHIP
Rian Dartnell (Chair)
Tazim Essani
Peter Roth
Sarah Ing
I am pleased to present the Nomination Committee report for the
year ended 30th June 2024.
The committee is functioning well. Peter Roth continues his
diligent work as the Senior Independent Director and Chair of the
Audit & Risk Committee. Sarah Ing will soon become Chair of
the Remuneration Committee, succeeding Tazim Essani. With
Jane Stabile’s retirement last February, I became Chair of the
Nomination Committee. Tom Griffith is CLIG’s CEO and
represents Executive Management on the Board.
I would like to thank Jane Stabile again for her service as a Non-
Executive Director (NED), as well as Chair of our Nomination
Committee. Jane was instrumental in recruiting Sarah Ing to our
Board and we have already benefitted from Sarah’s judgment and
experience. I am pleased that the Nomination Committee
identified a strong set of candidates for us to consider for our
future needs. Tazim Essani has advised that she will be stepping
down as a Director of the Company and relinquishing her role as
Chair of the Remuneration Committee. This will be effective from
the close of the forthcoming 2024 Annual General Meeting. As we
search for a new independent Non-Executive Director, we will
ensure that the Board continues to be well-balanced and each of
our NEDs brings complementary skills and perspectives.
It has been a busy year in the Nomination Committee. As part of
our planning process, we engaged with a number of shareholders
on the subject of our Board composition and solicited their
thoughts on my tenure on the Board. Our discussions included
our Controlling Shareholder, several of our largest shareholders and
a mix of smaller shareholders. The clear feedback was of support
for our current Board and a preference for continuity at this
important time for the company.
My current tenure on the Board began 31st October 2020
putting me in my fourth year as a NED for CLIG. I did, however,
serve as a NED from 2011 to 2016, having resigned then due
to a particularly demanding time in my full-time employment.
I maintained almost no contact with CLIG during the four
interim years from 2016 to 2020. In 2020, I was approached and
asked to consider rejoining the Board to assist with oversight of the
merger with KIM. In addition to the merger, it is worth noting
that CLIG evolved a great deal in the interim years I was not on
the Board. CLIG’s Founder retired, there was a transition of
Board Chairs and Tom Griffith was promoted to CEO.
It is the view of the Board that I should seek re-election as Chair.
I would be happy to serve and agree that more time would be
beneficial to continue with our strategic plans as well as
communicate and work with our shareholders. I agree that this
is a pragmatic step that would foster continuity during an
eventful and active period for your Company.
I am grateful to my colleagues on the Nomination Committee
for their continued diligence and support.
Rian Dartnell
Chair of the Nomination Committee
23rd September 2024
“Board composition is well-balanced at this stage
and each of our NEDs brings complementary
skills and perspectives.”
Rian Dartnell Chair of the Nomination Committee
City of London Investment Group PLC Annual Report 2023/2024 63
Committee composition and attendance
The Committee held four scheduled meetings during the year.
Attendance details for scheduled meetings can be found on page
52. The Committee comprises of four Independent Non-
Executive Directors. At the invitation of the Committee,
meetings are regularly attended by the Executive Director. Other
members of senior management are invited to attend and
present at meetings from time to time. The Company Secretary
is secretary to the Committee.
COMMITTEE ACTIVITIES
Terms of reference
The Committee reviewed its terms of reference in April 2024
and recommended minor changes.
Succession planning
The Committee kept the Board and senior management
succession plans during the year under review.
Succession and contingency plans have been formulated to
cover the following scenarios:
• Emergencies.
• Unplanned departures.
• Planned departures.
To support sound succession planning at the Board level, the
Committee reviewed the current and remaining tenure of each
Non-Executive Director through to the year 2030, in order to
plan for the succession in terms of diversity, experience and
skills. To support this evaluation, we created a skills and
experience matrix to evaluate how the composition of the Board
might change with any new Non-Executive Director appointed.
During the year, Rian Dartnell was appointed Chair of the
Board. A new independent Non-Executive Director was
appointed in March 2024 to replace Jane Stabile.
Board and Committee evaluation
During the year, the Committee reviewed the process for the
annual Board effectiveness evaluation. It was agreed that the
questionnaire-based approach used in the previous years worked
well and would again form the basis of the Board effectiveness
evaluation in 2024. Full details of the Board evaluation process
can be found on page 61.
Director induction and ongoing training
A formal induction process is in place for new Directors,
which aims to:
• familiarise Directors with the Group’s business, departments
and processes;
• cover the role, duties and responsibilities of Directors of a
UK listed company; and
• facilitate engagement with employees.
Comprehensive and tailored programmes are formulated for
each Director, depending on their individual background and
experience. New Directors meet members of the Board,
including the Chair, as well as Heads of Departments from
around the business. They are given documentation providing
key information related to the Group, including financial
performance, Board policies and procedures and governance
matters. These documents remain available to Directors as a
continuing point of reference.
The ongoing training needs of Directors are kept under review
and training sessions are planned as necessary.
Board size and composition
The size of the current Board is in-line with the size of the firm,
with three independent Non-Executive Directors, one Executive
Director who is also the CEO and our Chair of the Board.
We feel that the size of the Board has been effective and
appropriate and intend to keep the Board at the same level,
with the exception of recruiting an additional independent
Non-Executive Director in due course, bearing in mind the
length of our Chair of the Board’s tenure.
Post year end
Since year-end Tazim Essani has advised that she will be
stepping down as a Director of the Company and relinquishing
her role as Chair of the Remuneration Committee. This will
be effective from the close of the forthcoming 2024 Annual
General Meeting. The Board is in discussions to appoint a
new independent Non-Executive Director and will provide
a further update in due course.
Strategic reportOverview Financial statements Shareholder information
Governance
KEY ROLES AND RESPONSIBILITIES
•
Monitor the structure, size and composition of the Board
and its principal Committees.
• Oversee succession planning for Board and senior
management roles.
• Identify and nominate candidates to fill Board vacancies.
• Review time commitment for Non-Executive Directors.
• Approve Directors for re-appointment at the end of their
terms and at Annual General Meetings.
• Review results of annual Board effectiveness reviews.
• Approve Directors’ external appointments.
Full terms of reference of the Committee can be found on
the Company’s website:
www.clig.co.uk.
64 City of London Investment Group PLC Annual Report 2023/2024
NOMINATION COMMITTEE REPORT
CONTINUED
Governance: Composition, succession and evaluation
Appointment of Directors
A formal, rigorous and transparent process is in place for the
recruitment of new Directors. Appointments are made on merit
against objective criteria, with due regard to the importance of
promoting diversity of gender, social and ethnic backgrounds,
and cognitive and personal strengths. During the year the
Company recruited a new Non-Executive Director. An
independent external recruiter (Sapphire Partners), who has no
connections with the Company or individual directors, was
appointed. Following a clear process, in February the
Committee recommended to the Board for approval the
appointment of Sarah Ing as an Independent
Non-Executive Director.
All Directors are subject to annual re-election by shareholders at
the Company’s Annual General Meeting. The Committee makes
recommendations to the Board regarding the election or re-
election of Directors following consideration of Directors’ time
commitments, independence and tenures. At the meeting in April
2024 it was agreed that all Directors seek re-election at the 2024
AGM with the exception of Sarah Ing who will seek election
following her appointment to the Board earlier in the year.
Diversity and inclusion
The Board is committed to ensuring that its membership
reflects diversity in its broadest sense, with a diverse range of
demographics, skills, experience, race, age, gender, educational
and professional backgrounds and other relevant personal
attributes being reflected on the Board. The Company’s Board
and Committee Diversity Policy is regularly reviewed. Following
review by the Committee in April 2024, the current policy was
approved by the Board in September 2024. Company’s Board
and Committee Diversity Policy and its objectives can be found
on the Company’s website: www.clig.co.uk
It remains a key area of focus for the Committee to consider the
Company’s approach to diversity among the Board and senior
management. Details of the gender breakdown across the Group
can be found in the Strategic Report on page 34.
The Company remains committed to fostering diversity when
making future Board appointments.
Draw up an initial list of role requirements
Appoint an executive search agency, where necessary
Draw up long- and short-lists of candidates with support
from the search consultant to conduct screening
interviews and take up references
Short-listed candidates interviewed by a number of Directors
and discussion had as to which candidates to take forward
Feedback gained from candidates and second
interviews undertaken
Nomination Committee members conduct detailed references
Recommendation made to the Board regarding appointment
Review undertaken of actual or potential conflicts of
interest and assessment of the proposed Directors’
existing commitments
APPOINTMENT PROCESS FOR NEW DIRECTORS
City of London Investment Group PLC Annual Report 2023/2024 65
Strategic reportOverview Financial statements Shareholder information
Governance
NEW STATEMENT ON DIVERSITY
Listing Rule 9.8.6 R(9)(a) requires the Company to report on
whether it has met specified diversity targets. The specific
diversity targets are to ensure that at least 40% of the Board are
women, at least one of the senior Board positions (Chair, CEO,
CFO and SID) is a woman and that at least one Director is
from a minority ethnic background, requiring companies to
report on a ‘comply or explain’ basis. As at 30th June 2024 and
at the date of publication of this report, the Company has met
two of these targets as one Director is from a minority ethnic
group, and there are two female Directors on the Board which
represents 40%. Currently none of the senior Board positions
are held by a female Director.
The Directors remain aware of the changes to the Listing Rules
and have been able to make changes as soon as the opportunity
arose with the appointment of a new Non-Executive Director,
Sarah Ing. Whilst there are no further changes to the composition
of the Board planned, the members will ensure that when there
is an opportunity to meet the final target, they will do so.
The Nomination Committee has not formally set any diversity
targets but is mindful of the target set by the FTSE Women
Leaders Review to achieve 40% female representation by 2025
and is pleased to confirm that it has now met this target. The
tables below report our data on the gender identity and ethnic
diversity of the Board, senior Board positions and executive
management, based on the data we collect from individuals
when joining the Company.
Gender representation data
Number of
Senior Positions on Number Percentage
Number of Percentage of Board (CEO, CFO
1
, in executive of executive
Board Members Board Members SID & Chair) management
2
management
2
Men 3 60% 3 4 100%
Women 2 40% 0 0 0
Ethnicity representation data
Number of Number Percentage
Number of Percentage of Senior Positions in executive of executive
Board Members
1
Board Members
1
on Board
1
management
2
management
2
White British or other White
(including minority-white groups) 4 80% 3 3 75%
Asian/Asian British 1 20% 0 1 25%
1 The CFO is not a Board Director but is a member of executive management.
2 We regard our Group Executive Committee as executive management for the purposes of LR 9.8.6. CEO is a member of the Group Executive Committee.
66 City of London Investment Group PLC Annual Report 2023/2024
AUDIT & RISK COMMITTEE REPORT
COMMITTEE MEMBERSHIP
Peter Roth (Chair)
Tazim Essani
Sarah Ing
I am pleased to present the report of the Audit & Risk
Committee (the Committee) for the year ended 30th June
2024, setting out how the Committee has discharged its duties.
It has once again been a busy year for the Committee and I can
confirm that it has fulfilled its responsibilities through activities
taken during the year, as set out on pages 67 to 69. Sarah Ing
joined the CLIG Board and the Audit & Risk Committee on
1st March 2024. She is a qualified chartered accountant with
over thirty years of experience including audit, corporate
finance, investment banking and asset management. The
Committee’s key areas of focus during the year were as follows:
Audit Tender
Following much discussion earlier in the year it was agreed that
we would undertake an audit tender which would be overseen
by the Committee. The process that took place in the first few
months of 2024 saw a short list of candidates being considered,
and the Board was pleased to confirm in March 2024 that Grant
Thornton UK LLP would be appointed as external auditor with
immediate effect for the year ended 30th June 2024. RSM UK
Audit LLP, who had been the Company’s auditors since 2018
resigned by mutual agreement with the Company. We thank
RSM UK Audit LLP for their significant contribution as
CLIG’s auditor over recent years. The Committee is satisfied
that both firms have adequately managed the handover to
ensure a smooth transition.
Change of functional and presentation currency
As mentioned in my letter last year, the functional currency of
the Company and the presentational currency of the Group
changed to US dollars with effect from 1st July 2023. Following
the change in the Group’s presentational currency, the Group’s
interim results for the six-month period ended 31st December
2023 and these annual results have been prepared using US
dollars as the presentational currency.
Risk Management and Internal Control Framework
During the year an overview of the current risk management and
internal control framework was once again reviewed by the
Committee along with details of the long-standing process already
in existence for the ongoing maintenance of the framework
through an external and internal monitoring and testing program.
In response to the publication of the new UK Corporate Governance
Code 2024, the Committee has focused its attention on a number
of the main changes which shall affect audit, risk and control
(specifically Principle O and Provision 29). Preparations are already
underway to address these changes so as to ensure compliance with
the new Code. A deep dive on the changes that would come into
effect was held by the Committee. Undertaking this review so early
on will ensure the Committee has sufficient time to introduce and
enhance our internal controls and risk management framework
ahead of the new disclosures to be reported in the Group’s 2026
Annual Report and Accounts. We look forward to sharing these
details with you in next year’s annual report.
Environmental and Climate Risk
In relation to environmental and sustainability policy, the
Committee discussed a carbon offsetting proposal which
was new for the Group. The members discussed the proposed
approach and considered any risks that may be associated with
it, following which they gave their approval. Environmental
initiatives were also tabled for discussion at Committee meetings.
Cybersecurity
Cybersecurity continues to be a critical focal area for the
Committee, with updates being presented during the year. I am
pleased to confirm that a Group Chief Information Security
Officer (CISO) role was created to further support our work to
put in place a robust risk framework in respect of cybersecurity.
My thanks go to my fellow Committee members for their continued
insight and support in what has been a busy year for the Committee.
Peter Roth
Chair of the Audit & Risk Committee
23rd September 2024
Governance: Audit, risk and internal control
“In response to the publication of the new UK Corporate
Governance Code 2024, the Committee has focused its
attention on a number of the main changes which shall affect
audit, risk and control (specifically Principle O and Provision
29). Preparations are already underway to address these
changes so as to ensure compliance with the new Code.”
Peter Roth Chair of the Audit & Risk Committee
City of London Investment Group PLC Annual Report 2023/2024 67
Strategic reportOverview Financial statements Shareholder informationGovernance
Committee composition and attendance
Five Committee meetings were held during the year, all of
which were fully attended by all Committee members. As of
June 2024, the Committee comprises three Independent Non-
Executive Directors. All members have extensive knowledge of
the asset management industry and the analytical tools used in
the appraisal of Company reports and accounts. The Chair of
the Committee, Peter Roth, has recent and relevant experience
serving on audit committees in the financial services industry.
At the invitation of the Committee, meetings are regularly
attended by the Chair of the Board, the Executive Director, the
Chief Financial Officer and the external auditor. Other members
of senior management are invited to attend and present at
meetings from time to time.
FINANCIAL AND NARRATIVE REPORTING
The Committee reviews the Group financial statements,
including half and full year results and the Annual Report and
Accounts, and makes recommendations to the Board for
approval. The Committee is responsible for reviewing the
significant financial judgements, key assumptions and estimates
employed by management, an analysis of which can be found in
the table on the following page. As part of the review, the
Committee satisfies itself that the policies set out in note 1 of
the financial statements on pages 111 to 117 are appropriate.
Task-Force on Climate-Related Financial Disclosures (TCFD)
The Committee continued its increased scrutiny and challenge
around the disclosure requirements relating to climate change
and publication of our TCFD report. In line with the previous
year, our external environmental consultant (ECO3) was
retained during the year to help the Group in preparing its 2024
TCFD report (included within this Annual Report).
Fair, balanced and understandable
The Committee reviewed the Annual Report and Accounts for
the year ended 30th June 2024 and concluded that they are
representative of the year and present a fair, balanced and
understandable overview, providing the necessary information
for shareholders to assess the Group’s position, performance,
business model and strategy.
Viability and going concern
The Committee concluded that a three-year assessment period
continued to be appropriate and recommended the viability
statement to the Board for approval (Refer to page 32 for
viability statement). The Committee also reviewed the going
concern disclosure (see page 91) and recommended to the Board
that the Group had adequate resources to continue in
operational existence for the foreseeable future and that it was
appropriate for the financial statements to be prepared on a
going concern basis.
Significant financial judgements, key assumptions
and estimates
The following table sets out the key accounting issues and
judgements reviewed and monitored by the Committee during
the year in accordance with UK Corporate Governance Code
provision 26.
KEY ROLES AND RESPONSIBILITIES
Financial and narrative reporting
• Monitor the integrity of the financial statements of the
Company and report to the Board on significant financial
reporting issues and judgements.
• Review the content of the Annual Report and Accounts and
advise the Board on whether, taken as a whole, it is fair,
balanced and understandable.
• Considered the half year report for six months ended
December 2023.
External audit
• Make recommendations to the Board regarding the
appointment/re-appointment of the external auditor.
• Oversee the relationship with the external auditor.
• Assess the external auditor’s independence and objectivity,
including oversight of the policy on non-audit services.
• Assess the effectiveness of the external audit.
Risk management and internal control
• Review the adequacy and effectiveness of the Company’s
systems of risk management and internal control.
• Review and approve statements to be included in the annual
report regarding risk management and internal control,
principal and emerging risks and the viability statement.
• Consider the need for an internal audit function.
Compliance, speaking up and fraud
• Review the adequacy and security of the Company’s
whistleblowing arrangements, and procedures related to
fraud, bribery and money laundering.
Full terms of reference of the Committee can be found on
the Company’s website:
www.clig.co.uk.
OTHER
Terms of reference
The Committee reviewed its terms of reference in February
2024 and recommended some minor changes.
Committee evaluation
An internal Board and Committee evaluation exercise was carried
out in May and June 2024. This was by way of a questionnaire
issued to each Board member, a section of which was devoted to
the performance of the Audit & Risk Committee. Full details of
the Board evaluation process can be found on page 61.
RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK
Audit & Risk Committee
The Committee is responsible for assisting the Board in
maintaining an effective internal control environment.
To achieve this objective, the Committee receives regular
reports on compliance and internal control procedures from
CLIG’s General Counsel, the US Chief Compliance Officer,
CLIM’s Head of Compliance, KIM’s Chief Compliance
Officer and CLIG’s management. The Group maintains
a Group risk register which is kept under review by the
Group Executive Committee.
CLIM’s Risk & Compliance Committee (RCC) and KIM’s
Compliance Committee have responsibility for the day-to- day
oversight of the risk management process at the respective
operating subsidiaries. They are also tasked with identifying any
areas of perceived risk exposure for their respective subsidiaries.
For the year ended 30th June 2024, the Committee is satisfied
that the risk register has been appropriately amended and
maintained.
Internal audit function
The Committee continued to review and consider the need for
an internal audit function. It remains satisfied that the objectives
and activities of an internal audit function are sufficiently
fulfilled by the Group’s current systems of risk management and
internal control, as described above, and considering the current
size and complexity of the business, that a stand-alone function
was not required during the year.
During the year the Committee discussed the amended UK
Corporate Governance Code 2024 Provision O and Provision
29, which will come into force in 2026. It was agreed to address
the new requirements as necessary during the course of the next
year and to keep the need for an internal audit function under
review and to appropriately challenge and debate the topic.
Since the year end an internal audit function has been set up to
provide independent assurance and to support the Board in
complying with the new Principle O of the UK Corporate
Governance Code 2024 and its responsibility to maintain the
effectiveness of the risk management and internal control
framework. This will be supported by a software to help
establish systems and aid business processes and internal
controls testing and remediation.
AUDIT & RISK COMMITTEE REPORT
CONTINUED
68 City of London Investment Group PLC Annual Report 2023/2024
Governance: Audit, risk and internal control
Goodwill
Goodwill for the Group’s cash generating unit is tested for
impairment annually by assessing that its recoverable amount is
not less than its carrying value. Recoverable amount of an asset
is the greater of its ‘fair value less cost of disposal’ or its ‘value in
use’. This requires estimates concerning future cash flows,
financial multiples, growth rates and associated discount rates.
The services of an independent valuation consultant, Kroll
Advisory Limited (‘Kroll’) was retained during the year to
perform an assessment of impairment as of 30th April 2024.
The Committee considered Kroll’s report outlining the
methodology for the impairment assessment and challenged the
assumptions underpinning the goodwill valuation model
including cash flow projections, multiples, discount rates and
any other inputs.
The Committee also considered whether there were any
significant changes or indicators of impairment in the period
from the assessment date to 30th June 2024.
Further details can be found in note 11 of the financial
statements on page 124.
SIGNIFICANT JUDGEMENTS, KEY ASSUMPTIONS AND ESTIMATES COMMITTEE ACTIONS
City of London Investment Group PLC Annual Report 2023/2024 69
Strategic reportOverview Financial statements Shareholder information
Governance
EXTERNAL AUDIT
RSM UK Audit LLP (RSM) was the Company’s appointed
external auditor for a period during the year. During that time
RSM attended each scheduled meeting of the Committee
during the year and reported on the status of the Group external
audit process. RSM performed the review of the half yearly
report for six-month period ended 31st December 2023.
Keeping RSM partner’s (Geoff Wightwick) forthcoming
retirement in mind, during the year it was agreed by the Board
to undertake an audit tender. Following a comprehensive tender
process, the Committee recommended Grant Thornton UK
LLP (GT) due to the depth of their relevant financial services
practice in auditing similar sized companies to CLIG. The
Committee had agreed to recommend, and the Board
subsequently approved in February 2024, a proposal to request
that RSM resign, and GT be appointed as auditor for the full
year to 30th June 2024.
The Committee met privately with both external auditors at
each meeting to allow for any concerns to be flagged by the
external auditor. No such concerns were flagged during the year.
Rotation
The Statutory EU Audit Directive (the Directive) sets out rules
for public interest entities audit firm tenure and rotation and the
provision of non-audit services.
After RSM serving as Group’s auditor for six consecutive years,
the Company undertook an audit tender in the current financial
year and appointed GT as the Group auditor for the year ended
30th June 2024. This is therefore GT’s first year of serving as
auditor. In order to comply with the Directive, the Company
intends to undertake an audit tender at least every ten years.
There are no contractual obligations that restrict the
Committee’s choice of external auditor.
Assessment of external audit effectiveness
The Committee makes an annual assessment of the performance
of the external auditor and the effectiveness of the audit process.
This assessment is based on the Committee’s interactions with,
and observations of, the external auditor. The Committee
concluded that the effectiveness of the external audit process
carried out by RSM was satisfactory and that their independence
and objectivity were sufficiently maintained. Therefore, the
Committee recommended to the Board the re-appointment of
RSM at the Company’s next Annual General Meeting. However,
as discussed earlier, after the Annual General Meeting, the Board
decided to undertake an audit tender and appointed GT as the
Group’s auditor for the full year to 30th June 2024.
The disclosures provided within this report constitute the
Company’s statement of compliance with the requirements of
the Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender Processes
and Audit Committee Responsibilities) Order 2014.
Independence and objectivity
Both the Committee and the external auditor have policies and
procedures designed to protect the independence and objectivity
of the external auditor. During the year, the Committee was
provided with a number of assurances by the external auditor
regarding the checks and balances in place to safeguard
independence and objectivity. Overall, the Committee has
concluded that GT remains independent.
Non-audit services policy
The Company’s non-audit services policy sets out a list of non-
audit services that the external auditor is either permitted or
prohibited from providing to the Group. The policy places a
requirement for all non-audit services that the external auditor
is engaged for to be approved in advance as follows:
Value of non-audit service Approver
Up to £50,000 Chair of the Audit & Risk Committee
£50,001 and above Audit & Risk Committee
The policy further mandates that the total fees for non-audit
services provided by the external auditor to the Group shall be
limited to no more than 70% of the average of the statutory
audit fee for the Company, of its controlled undertakings and
of the consolidated financial statements paid to the external
auditor in the last three consecutive financial years.
Pursuant to the policy, the Committee undertakes to seek
annually from the external auditor information about policies
and processes for maintaining independence and monitoring
compliance with relevant requirements, including those
regarding the rotation of audit partners and staff.
External auditor fee
During the year, the Committee reviewed and approved the
external auditor’s fee. Refer to note 5 of the financial statements
on page 119 for fees paid to the Company’s auditors in the year
ended 30th June 2024.
CHAIR OF THE REMUNERATION COMMITTEE’S ANNUAL STATEMENT
70 City of London Investment Group PLC Annual Report 2023/2024
Governance: Remuneration
COMMITTEE MEMBERSHIP
Tazim Essani (Chair)
Rian Dartnell
Peter Roth
Sarah Ing
On behalf of our Board and the Remuneration Committee, I am
pleased to present our report for the year ended 30th June 2024.
Our Remuneration Policy aims to maintain a consistent and
balanced approach to compensation that recognises individual
and team contributions that support CLIG’s goals and objectives.
As always, the Group aims to maintain a long-term focus on its
remuneration to ensure an equitable and sustainable plan. This
Remuneration Report has three parts: this Annual Statement,
the Remuneration Overview which explains our policy and our
Annual Report on Remuneration which sets out how the policy
has been applied during the year.
As noted in both the Chair and CEO statements, the business
climate over the last year has been mixed with a tough first
half and then increased positive momentum through the
second half. As discounts have narrowed flows have improved
with positive relative performance across all strategies other
than EM. The CLIG team approach, not just across investment
management but through client service, IT and operations
was once again in evidence as Group FuM ended the year
at over $10 billion.
Code compliance
Our Remuneration Policy and arrangements comply with the
requirements of the UK Corporate Governance Code (Code).
The statement of compliance with the UK Corporate
Governance Code is set out on page 53.
Group key performance indicator
The Group key performance indicator (KPI) targets a total
return (share price plus dividends) to compound annually in
a range of 7.5% to 12.5% over a five-year period. This KPI
applies to employees and the Executive Director alike and is
a key cornerstone of our inclusive and team-based culture,
helping to create a common goal for the Group. As noted in
the CEO’s Statement on page 10, for the five years ended
30th June 2024, the total return was 34.7%, or 6.2%
annualised (source, Bloomberg). Since listing in April 2006,
the annualised return has been 11.8%. The share price
underperformance largely being driven by broader market
factors rather than reflecting CLIG specific concerns.
As mentioned, CLIG’s investment performance has been
good and flows are on an improving trend.
KEY ROLES AND RESPONSIBILITIES
•
Determine policy for Directors’ remuneration and set
remuneration for the Chair, Executive Director and
senior management.
• Establish remuneration schemes aligning Executive
Director with shareholder interests.
• Review workforce remuneration and related policies.
Full terms of reference of the Committee can be found on
the Company’s website:
www.clig.co.uk.
“The Committee believes that our approach to executive
remuneration remains appropriate, supports the
Company’s culture and circumstances and aligns
well with shareholder interests.”
Tazim Essani Chair of the Remuneration Committee
City of London Investment Group PLC Annual Report 2023/2024 71
Strategic reportOverview Financial statements Shareholder information
Governance
Remuneration outcomes
In setting remuneration, the Committee has taken this into
careful consideration and reflected it in the Executive Director’s
salary which was unchanged on 2023 and his profit-share which
was down 7% (on constant currency). Page 75 sets out the single
figure total remuneration for the Executive Director of $857,631
(2023: $911,317). Variable pay for the wider employee base
was held broadly flat to last year in recognition of the good
underlying business performance.
Directors’ Remuneration Policy
The Directors’ Remuneration Policy (the Policy) was last put
to a binding shareholder vote at the AGM in October 2022
and passed with a vote of 97.7%. The Policy will remain in
force until the 2025 AGM. More detail on how the Policy
was implemented during the year can be found on pages 75
to 79.
And finally…
The Committee believes that our approach to executive
remuneration remains appropriate, supports the Group’s culture
and circumstances and aligns well with shareholder interests.
We engaged with our largest shareholders during the 2022
remuneration policy review which was overwhelmingly supported
by shareholders. No further specific discussions in relation to
remuneration have been requested or taken place during the year.
We are always happy to discuss our approach to remuneration
with shareholders and would be happy to answer any shareholder
questions about the work of the Committee.
Tazim Essani
Chair of the Remuneration Committee
23rd September 2024
72 City of London Investment Group PLC Annual Report 2023/2024
REMUNERATION OVERVIEW
Governance: Remuneration
REMUNERATION OVERVIEW
Executive Director remuneration components
Remuneration 2022 Remuneration Policy
Fixed Base salary Aligns with pay adjustments for the wider employee population
Fees Market competitive
Benefits Market competitive
Pension No higher than workforce contribution
Variable Profit-share Maximum of 2.5 times aggregate salary and fees
Employee Incentive Plan One times match on profit-share waived (up to 30% of profit-share earned)
Share options No further ESOP awards will be granted to the Executive Director
Governance Share ownership guidelines 200% of salary (in and post-employment)
Malus and clawback Profit-share and EIP up to 24 months after payment/vesting date
Executive Director remuneration outcomes
Executive Directors’ single total remuneration figures
The chart below compares the single total remuneration figures for FY 2024 for the CEO with the maximum total remuneration
that could be awarded under the Directors’ Remuneration Policy as per 30th June 2023 illustrative reward scenario and the single
total remuneration figures for FY 2023.
Executive Director
Tom Griffith
Chief Executive Officer
Salary and related costs Variable cash bonus Employee Incentive Plan (EIP)
Single total remuneration figure ($’000)
2023 Actual
2024 Maximum
2024 Actual
44% 51% 5%
27%
39%
34%
47% 53% 0%
911
1,484
858
Single total remuneration figures
Assumptions:
1) Based on FY2023 and FY2024 actual results. Comparative period amounts have been restated to US dollars using average exchange rate in the relevant period.
2) 2024 maximum is the level of remuneration that could have been received in FY2024 in accordance with Group’s Director’s remuneration policy as included in FY 2023’s
illustrative reward scenario (converted in USD using average exchange rate). This reflects the minimum remuneration plus the maximum bonus opportunity as detailed
in the future policy table. The maximum variable cash bonus has been adjusted by the maximum amount of the bonus that can be waived, which in turn is matched by
the Company and the total is shown as EIP.
3) Under the Directors’ remuneration policy, the EIP awards once awarded, will vest one-fifth per annum over a five-year period, and from October 2024 onwards over a
five-year period with one-third vesting each year for the third, fourth and fifth anniversaries following grant.
Profit-share payments during the year are based on forecasted annual profit determined using quarterly results.
The fourth and largest payment is made once the final results are known.
Percentage splits are therefore approximate.
Fee income is received on both a monthly and quarterly basis.
Q1
September
Q2
December
Q3
March
Q4
July
10%
20%
40%
For Executive Director, 10%
of this payment is deferred
until September
30%
Profit-share payment schedule – financial year 1st July 2023 – 30th June 2024
City of London Investment Group PLC Annual Report 2023/2024 73
Strategic reportOverview Financial statements Shareholder information
Governance
Our Group’s interplay between the legitimate needs of our various constituents is
exemplified by the relationship between our KPI and our Directors’ Remuneration
Policy. In order to understand our corporate culture and the tone from the top,
one must understand this key relationship.
CLIG KPI’S RELATIONSHIP TO OUR DIRECTORS’ REMUNERATION POLICY
We continue to believe that a key measure of the management team is the long-
term total return of the shares of the Company they manage.
Our business model
is very simple. We receive fees for managing client assets against a benchmark index.
As an active investment manager, our job is to beat the relevant benchmark through an
investment cycle, which we define as five years. We believe that our approach and
philosophy differs significantly from our peers. Our investment process identifies
opportunities to capture pricing anomalies in securities trading at a discount to their net
asset value. Our resolute focus is on generating consistent
investment performance –
over time and through economic cycles within a controlled risk environment.
We have developed and nurtured a team investment process which does not rely on
“star” fund managers, but rather upon experienced fund managers using a disciplined
analytical process that can produce repeatable and sustainable first or second quartile
performance versus our peers.
We support teams and a team approach across the Group. What this means is that
we discourage the cult of the individual, believing that the
risks associated with
a star culture are detrimental to both shareholders and clients.
If we do our job well, our FuM and fee income can grow over time. Proactively
managing operating costs is the lever that allows us to maintain profitability levels.
Profits lead to shareholder value through dividends, retained earnings and the
CLIG share price increases.
Although the business is simple, a large part of the assets are in a volatile asset class –
EM. As a result of this volatility our FuM and, therefore, our future
fee income are
difficult to predict with any level of accuracy.
This volatility is also why total return of CLIG over a market cycle which is defined as a
rolling five-year period has been selected as the KPI. This
KPI presents a challenge for
the management team to achieve,
without incentivising managers to take undue risks.
We have a conservative approach to risk. We do not charge performance fees and there
is no debt on our balance sheet.
As a specialist in CEFs, the universe of EM equity investment options is capacity
constrained. To address this constraint we have added strategies by market segment that
take advantage of our expertise in CEFs. This enables us to grow FuM for clients who
support our investment philosophy, which drives increased fee revenues on a more
predictable scale.
CLIG share price total return:
best measurement of management
Volatility of earnings
Business managed through:
team approach
Management team KPI
(See page 23 for further details)
Main business driver:
outperformance
Delivered through:
team approach
Results in: FuM, fee income
and profitability
Leads to: dividends, retained earnings
and share price
74 City of London Investment Group PLC Annual Report 2023/2024
REMUNERATION OVERVIEW
CONTINUED
Governance: Remuneration
Employees are compensated through a combination of salary and profit-share. Salaries
are a fixed cost and are managed to account for the volatility of earnings.
The profit-
share pool is fixed at a maximum of up to 30% of operating profit of the Group
and aligns employees’ variable income component of total compensation with
Group profitability and shareholder value.
All employees are offered the opportunity to defer a portion of their annual profit-share
allocation to purchase CLIG shares through the Employee Incentive Plan (EIP). The
Company matches the employees’ deferral 100%. Both the employee deferral and
Company matching amounts vest over a three-year period in equal amounts each year.
These amounts vest annually over a five-year period for Executive Director from FY 2021.
As per the current Directors’ Remuneration Policy, for the Executive Director, these amounts
will vest one-third each year after the 3rd, 4th and 5th anniversaries of grant from FY 2023.
Employee share purchases and the vesting schedule further align them with
long-term shareholder value.
Rather than making large numbers of employees redundant during market downturns and
negatively impacting the business, the variable component of compensation can take the
brunt of reduced revenues. Maintaining a high ratio of variable pay for all employees, but
in particular for Directors, underscores the message that we are a team and rewards
should be reduced when the Group underperforms.
Variable pay can be adjusted in
line with profitability.
On balance, when markets are good, employees share in the increased profits of the
Group. We accomplish this through profit sharing. Ingrained in our culture is the belief that
all employees contribute to the success of the Group. The Portfolio Manager may have
made the right decision on the investment, but he or she was able to do so because the
data was correct, the systems were running properly, compliance applied the correct
constraints, and so on.
Allocation of profit-share is a management responsibility. We operate in an open office
environment. While annual appraisals are completed, the open office environment
provides for daily, honest feedback through interactions between colleagues. This allows
for an
ongoing, real-time evaluation of a number of variable factors that
influence performance.
Individual KPIs are not relevant to a business that employs a team-based approach to
operating a business, which in many respects is similar to a partnership. In fact, individual
KPIs would not only be divisive, but would introduce unnecessary risks. Our team approach
to managing the business, with a profit-share pool based on operating profit, aligns the
constituents of our business, as summarised below:
Clients expect superior investment performance. Long-term investment performance
drives FuM and revenue growth over time. The clients pay the bills.
Employees expect to share in the success of the Group as they provide the investment
performance that generates the earnings, while managing risks and controlling costs to
ensure their sustainability. Employees manage the business. Employees’ and Directors’
compensation are in alignment with our corporate culture, and these are taken into
account when setting the policy for Directors’ compensation.
Shareholders expect appropriate risk and cost controls to help deliver quality earnings
and dividends. The shareholders own the business.
CLIG KPI’S RELATIONSHIP TO OUR DIRECTORS’ REMUNERATION POLICY CONTINUED
Profit-share pool aligns
employees compensation
with shareholder value
Volatility of earnings
requires flexibility
Profit-share pool provides
single focus
Individual appraisals
and evaluation
Individual KPIs are not appropriate
for CLIG due to our team-based
environment
EIP further aligns employees
with shareholder value
City of London Investment Group PLC Annual Report 2023/2024 75
Strategic reportOverview Financial statements Shareholder information
Governance
The information provided within the Annual Report on Remuneration has been audited where indicated
and summarises how the Directors’ remuneration policy was implemented during the financial period under
review, as well as setting out total remuneration figures and rationales.
Committee composition and attendance
The Committee comprises of four Independent Non-Executive
Directors: Rian Dartnell, Sarah Ing, Peter Roth and Tazim
Essani serving as Chair. The Committee is focused on
maintaining the entrepreneurial can-do team-based culture of
the Group, while at the same time continuing to deepen its
processes. Our goal is to be a balanced Group, managing
investment mandates with consistent long-term outperformance
while empowering a culture of inclusion and an atmosphere in
which colleagues strive to do their best work.
The Committee held four meetings during the year. Committee
Members’ attendance details can be found on page 52. Meetings
are regularly attended by the Executive Director and the Chief
Financial Officer, at the Committee’s invitation. Other members
of senior management are invited to attend and present at
meetings from time to time. No executives participate in any
discussion regarding their own remuneration.
This section of the Report is made up of four parts:
1) Single total figure of remuneration
2) Future implementation
3) Further remuneration disclosures
4) Governance disclosures
The Directors’ Remuneration Policy is summarised in the future
Policy table on pages 86 to 88 and will govern all future
remuneration to be awarded to Directors.
1) SINGLE TOTAL FIGURE OF REMUNERATION (AUDITED)
The table below shows the single total figure of remuneration for the Executive Director in relation to the financial year ending
30th June 2024 relative to the previous financial year ended 30th June 2023.
Fixed pay Variable pay
Salary/ Waived
(2)
EIP
(3)
Dividend
Director advisory
(1)
Taxable Profit- profit- share equivalent Total Total
fees fee Pension benefits share share awards EIP vesting Total fixed variable
2023/2024 $ $ $ $ $ $ $ $ $ $ $
Current Directors
Executive Director
Tom Griffith 2024 44,012 288,040 36,005 9,879 458,500 – – 21,195 857,631 377,936 479,695
2023
(8)
42,098 289,229 36,154 11,864 483,582 (23,345) 46,690 25,045 911,317 379,345 531,972
Non-Executive Directors
Rian Dartnell 2024 100,429 – – 1,219 – – – – 101,648 101,648 –
2023
(8)
64,049 – – 225 – – – – 64,274 64,274 –
Peter Roth 2024 80,479 – – 9,039 – – – – 89,518 89,518 –
2023
(8)
71,567 – – 12,124 – – – – 83,691 83,691 –
Tazim Essani 2024 66,293 – – – – – – – 66,293 66,293 –
2023
(8)
50,518 – – – – – – – 50,518 50,518 –
Sarah Ing
(4)
2024 18,518 – – – – – – – 18,518 18,518 –
2023
(8)
–––––––––––
Past Directors
Barry Aling
(5)
2024 32,585 – – – – – – – 32,585 32,585 –
2023
(8)
95,623 – – – – – – – 95,623 95,623 –
George Karpus
(6)
2024 4,658 – – – – – – – 4,658 4,658 –
2023
(8)
50,517 26,219 – 1,262 – – – – 77,998 77,998 –
Jane Stabile
(7)
2024 47,270 – – 8,452 – – – – 55,722 55,722 –
2023
(8)
64,049 – – – – – – – 64,049 64,049 –
Total 2024 394,244 288,040 36,005 28,589 458,500 – – 21,195 1,226,573 746,878 479,695
2023
(8)
438,421 315,448 36,154 25,475 483,582 (23,345) 46,690 25,045 1,347,470 815,498 531,972
Notes:
(1) See explanation on benefits on page 76.
(2) The EIP share awards relate to the waived bonus plus a 100% match by the Company. The combined amount is the value of the awards that will be awarded
in October following the year end. For non-UK Directors, the value is subject to movement as a result of currency translation.
(3) This represents dividend equivalent on EIP shares vested during the year.
(4) Sarah Ing joined the board on 1st March 2024
(5) Barry Aling ceased to be a Director of the Company with effect from 23rd October 2023
(6) George Karpus ceased to be a Director of the Company with effect from 31st July 2023
(7) Jane Stabile ceased to be a Director of the Company with effect from 29th February 2024
(8) Comparative period amounts have been restated to US dollars using average exchange rate for the period.
ANNUAL REPORT ON REMUNERATION
Governance: Remuneration
ANNUAL REPORT ON REMUNERATION
CONTINUED
Non-Executive Director fees
(1,2)
2024
(1,3)
2023
£ £
Base fee for services as a Non-Executive Director 44,000 44,000
Supplemental fee for services as Chair of the Board
40,000 40,000
Supplemental fee for services as Chair of a Committee
12,500 12,500
Supplemental fee for services as Senior Independent Director 7,500 7,500
Notes:
(1) Base fees and supplemental fees are set in sterling and thus have been not converted to US dollars
(2) Base fees and supplemental fees for services as Chair of the Board and Committees and the Senior Independent Director are due to be reviewed with effect
from 1st January 2025 in line with Director's Remuneration Policy.
(3) Base fees and supplemental fees for services as Chair of the Board and Committees and the Senior Independent Director were increased with effect from
1st January 2023. The increase reflects the time undertaken in fulfilling their roles.
Commentary on single total figure table
The Remuneration Committee satisfied itself that the single total figures of remuneration for each Director are appropriate.
A commentary on each element of the Directors’ fixed and variable remuneration is set out below.
a) Fixed pay
Salary/advisory fee
The Executive Director’s salary is kept at the lower end of what may be described as market average to allow the Group to manage
fixed remuneration costs. A high proportion of total remuneration is provided by way of variable pay, allowing for remuneration to
be trimmed in a timely fashion if market events threaten to impact profitability.
Tom Griffith’s CEO salary (including Director’s fee) was $332,500 (FY 2023: $332,500) and he did not receive a pay rise during the
year (no pay rise in FY 2023 either). His salary is paid in US dollars but was reported in sterling in FY 2023. His FY 2023 salary has
been converted back to US dollars at the average rate for FY 2023. The difference between FY 2024 and FY 2023 is due to the
weaker US dollar to sterling during the current year as compared to last year.
Further, as approved at the 2019 AGM, a separate Director’s fee has been carved out from the CEO’s current salary to reflect his
Director/governance duties. In both FY 2023 and FY 2024 this was £35,000 per annum.
Pension
All employees*, including the Executive Director, are entitled to membership of the Group’s defined contribution pension
arrangements. Contributions are capped at 12.5% of annual salary. Employer contributions in respect of the Executive Director was
12.5% for the period under review.
* As per the merger agreement, compensation and benefits for KIM employees remain consistent with pre-merger practices of KIM.
Benefits
Taxable benefits relate to private medical insurance for the Executive Director and his dependants. It should be noted that although
the Group offers private medical insurance to all employees it is not considered a taxable benefit for those resident in the US.
Taxable benefits for Non-Executive Directors relate to reimbursed accommodation expenses whilst attending UK Board and
Committee meetings. The amounts shown are grossed up in the Group accounts for the tax due on these benefits.
76 City of London Investment Group PLC Annual Report 2023/2024
Governance: Remuneration
1) SINGLE TOTAL FIGURE OF REMUNERATION (AUDITED) CONTINUED
City of London Investment Group PLC Annual Report 2023/2024 77
Strategic reportOverview Financial statements Shareholder information
Governance
b) Variable pay
Profit-share
The Company operates a profit-share plan for all employees, including the Executive Director, that is linked to Group profitability.
Profit-share constitutes a large part of employee and Executive Director’s remuneration – being variable, it can be adjusted in line with
profitability and can therefore account for inherent volatility in earnings. A maximum profit-share of up to 30% of the pre-profit-
share, pre-tax, operating profit has been allocated as per Group's Remuneration Policy. Such allocation may be reduced infrequently as
a result of an assessment of the projected intermediate term financial performance of the Group, and consistent with our fundamental
objective of an appropriate balance of interests among all stakeholders, including clients, employees and shareholders.
Measuring performance
We are focused on fostering a team approach across the Group, discouraging the ‘cult of the individual’ and the risks associated with
a star culture. The Group therefore takes the view that individual KPIs are not appropriate for a business that employs a team-based
approach, and that individual KPIs could prove divisive and introduce unnecessary risk. Refer to pages 73 to 74 for information
about the relationship of the overall CLIG KPI to our remuneration policy.
The profit-share pool aligns employees and the Executive Director’s variable income with Group profitability. Both employees and
the Executive Director are therefore incentivised to drive Group profitability. Driving Group profit leads to shareholder value by way
of dividends, retained earnings and Company share price increases.
The Executive Director’s performance is appraised annually by the Chair reflecting feedback gathered from board members and senior
leaders across the business. Discretion is applied appropriately, with bonus awards being adjusted upwards or downwards depending on
the outcome of the annual performance appraisal.
In the case of market downturns due to extenuating circumstances not linked to poor individual performance, the Committee can use
its discretion to reduce profit-share awards for employees and the Executive Director. Being the more accountable parties, the Executive
Director and Group Executive Committee members take a larger proportion of the reduction in comparison with other employees.
See ‘Executive Director remuneration outcomes’ on page 72 for details of profit-share awards for FY 2024 compared with the
illustrative reward scenario disclosed in the FY 2023 Annual report on remuneration.
Deferred profit-share payment
Profit-share in the fourth quarter of each financial year is calculated based upon an estimate of full year operating profits, and
there is the possibility that the actual audited results could be below expectation. The Executive Director therefore has up to 10%
of his fourth quarter’s profit-share award deferred to the following quarter in order that the award can be adjusted based upon
the final audited results. See profit-share payment schedule on page 72. The table below sets out the amount deferred for payment
once the financial statements have been audited and approved.
2024 2023
(1)
Deferred profit-share payments $ % of annual award $ % of annual award
Tom Griffith 21,742 5% 21,050 4%
Note:
(1) Comparative period amounts have been restated to US dollars using average exchange rate in the relevant period.
This amount is included in the profit-share reported in the single total figure of remuneration table on page 75.
1) SINGLE TOTAL FIGURE OF REMUNERATION (AUDITED) CONTINUED
ANNUAL REPORT ON REMUNERATION
CONTINUED
78 City of London Investment Group PLC Annual Report 2023/2024
Governance: Remuneration
1) SINGLE TOTAL FIGURE OF REMUNERATION (AUDITED) CONTINUED
Employee Incentive Plan
Summary of Employee Incentive Plan (EIP) interests
The EIP was approved by shareholders at the October 2016 AGM and adopted by the Group in December 2016. It is open to
employees of all Group companies, including the Executive Director. Participants are invited to waive up to 20% (or up to 30% if
there is headroom within the cap agreed by shareholders) of their annual profit-share in return for the right to participate in the EIP
for the relevant financial year. Under the EIP, participants are granted Restricted Share Awards (RSAs) over shares in the Company
equal in value to two times the amount they have waived.
Due to the high level of employee elections, participation had to be scaled back this year across the Group. In order to encourage
maximum employee participation, and ownership of CLIG shares, the Executive Director elected to reduce his participation in the
EIP for FY 2024 to 0% of the profit-share so that employees were not scaled below 10%.
For the Executive Director, the RSAs vest one-third each year over a three-year period following grant for the awards made up until
October 2020 and one-fifth each year over a five-year period following grant for awards made from October 2021 onwards. As per
the 2022 Remuneration Policy, for the awards to be made in October 2024 and onwards, the RSAs for Executive Director will vest
in three equal instalments after the third, fourth and fifth anniversaries following grant.
These awards accrue an amount equal to the dividend that the Director would have received had they owned the shares from the
date of grant. The dividend equivalent paid on shares vested during the year is disclosed in the single total figure of remuneration
table on page 75.
The RSAs are subject to forfeiture upon termination. For further details see the future policy table on pages 86 to 88.
EIP Restricted Share Awards
Market Market
Awards
Awards price on price on
held Awarded Vested
held date of date of
Date of 30th June during during
30th June award vesting
Vesting period
Director Award 2023 the year the year 2024 £ £ From To
Tom Griffith 26/10/2020 13,373 (13,373) – 4.0280 3.01 26/10/2020 26/10/2023
26/10/2021 7,334 (1,833) 5,501 5.2450 3.01 26/10/2021 26/10/2026
26/10/2022 15,352 (3,070) 12,282 3.5950 3.01 26/10/2022 26/10/2027
26/10/2023 11,750 11,750 3.3040 26/10/2023 26/10/2028
36,059 11,750 (18,276) 29,533
(1) The number of shares awarded is calculated using the ten day average share price on the day prior to award.
City of London Investment Group PLC Annual Report 2023/2024 79
Strategic reportOverview Financial statements Shareholder information
Governance
Summary of share option plan interests
The Company operates an Employee Share Option Plan which is open to employees of all Group companies and which, prior
to changes made to the Company’s Directors’ Remuneration Policy at the 2022 AGM, was open to Executive Directors who
worked more than 25 hours per week, provided they did not have a material interest in the Company, that is to say the ability to
control more than 25% of the ordinary share capital. During the year, no options over ordinary shares of the Company were
granted to any employees.
Number of options
Exercised Lapsed Granted Exercise Price at Face value
Held during the during the during the
Held price grant at grant Vesting Vesting Expiry
2023 period period period 2024 £ £ £ period date date
Tom Griffith 17,000 (17,000) – – – 2.55 2.5 – 3 yrs 30/1/17 30/1/24
23,500 – – – 23,500 3.52 3.52 82,720 3 yrs 19/6/18 19/6/25
Total 40,500 (17,000) – – 23,500
The closing market price of the Company’s ordinary shares at 30th June 2024 was £3.70 (2023: £4.04) and the price moved
during the year between a low of £3.01 to a high of £4.24 (2023: low £3.44 high £4.70).
2) FUTURE IMPLEMENTATION
The Directors’ Remuneration Policy on pages 86 to 88 was approved by shareholders at the 2022 AGM and will also apply for the
next financial year.
The Executive Director will continue to receive fixed elements of salary, Director fee, taxable benefits and pension, and the variable
element of profit-share.
The base salary (including Director’s fee) with effect from 1st July 2024 for Tom Griffith is US$332,500. There is no change in
Tom’s base salary as compared to last year. The annual profit-share will have a maximum value of 250% of base salary (including
Director’s fee). The maximum cash profit-share will be adjusted by the maximum amount of profit-share that can be waived (30%),
which in turn is matched by the Company.
The current fee arrangements for Non-Executive Directors for FY 2025 are shown on page 77. Non-Executive Director’ biennial fee
review process is next due to occur on 1st January 2025.
1) SINGLE TOTAL FIGURE OF REMUNERATION (AUDITED) CONTINUED
3) FURTHER REMUNERATION DISCLOSURES
Total shareholder return
The following graph illustrates the total shareholder return of a holding in the Company against an appropriate index for the
ten years to 30th June 2024. We have chosen the MSCI Emerging Markets T/R Net Index which is calculated on a total return basis,
i.e. assuming reinvestment of dividends.
80 City of London Investment Group PLC Annual Report 2023/2024
ANNUAL REPORT ON REMUNERATION
CONTINUED
Governance: Remuneration
30/6/2014
30/6/2015
30/6/2016
30/6/2017
30/6/2018
30/6/2019
30/6/2020
30/6/2021
30/6/2022
30/6/2023
30/6/2024
350%
300%
250%
200%
150%
100%
50%
0%
Total shareholder return (dividends reinvested) for ten years to 30th June 2024 (GBP)
City of London
MSCI Emerging Markets
Source: Bloomberg.
City of London Investment Group PLC Annual Report 2023/2024 81
Strategic reportOverview Financial statements Shareholder information
Governance
3) FURTHER REMUNERATION DISCLOSURES CONTINUED
Chief Executive Officer single figure of remuneration
The following table shows the change in total remuneration for the Chief Executive Officers, Barry Olliff (CEO 1) and Tom
Griffith (CEO 2) during the ten years to 30th June 2024. This table is included for the purpose of comparison against total
shareholder return as detailed above.
Year to
Year to Year to Year to Year to 30th June Year to Year to Year to Year to
Year to
30th June 30th June 30th June 30th June 2019 30th June 30th June 30th June 30th June
30th June
2015 2016 2017 2018 Prorated
(1)
2020 2021 2022 2023 2024
$$$$$$$$$$
Single total figure
(2)
CEO 1 1,265,894 1,133,422 1,317,497 1,108,646 812,642 – – – –
–
CEO 2 –––– 274,427 986,930 1,108,754 1,161,999 911,317 857,631
Annual bonus
(as % of current cap)
(3)
CEO 1 85% 84% 84% 84% 74% – – – –
–
CEO 2 ––––88%64%79%84%58%55%
EIP – % of maximum
opportunity
(4)
CEO 1 n/a n/a n/a n/a n/a n/a n/a n/a n/a
n/a
CEO 2 ––––100% 100% 100% 100% 100% n/a
Notes:
(1) Barry Olliff stepped down as CEO on 1st March 2019, being replaced by Tom Griffith. Barry Olliff remained on the Board, serving as Non-Independent
Non-Executive Director until his retirement from the Board on 31st July 2022. Tom Griffith’s total remuneration received in accordance with this role is
not detailed here but can instead be found in the total single figure of remuneration table on page 75.
(2) Comparative period amounts have been restated to US dollars using average exchange rate in the relevant period.
(3) In 2015 the Directors Remuneration Policy was amended to include a cap on bonuses paid to Directors and Barry Olliff’s cap was set at 5% of operating
profits pre-bonus and EIP. The cap on Tom Griffith’s bonus was 2.5% of operating profit pre-bonus and EIP until 30th June 2019 and was changed to
250% of salary and base fee for the year ended 30th June 2020 onwards.
(4) As detailed in the single total figure commentary on page 76, EIP awards are made on the basis of the amount of the bonus that has been waived in the
scheme year. These awards vest based on continued service and therefore have been shown at 100% in the table. Tom Griffith did not participate in 2024
EIP scheme year to make room for other employees to participate. As he did not do a waiver, his EIP has been shown as n/a.
ANNUAL REPORT ON REMUNERATION
CONTINUED
3) FURTHER REMUNERATION DISCLOSURES CONTINUED
Annual percentage change in the remuneration of Directors and employees
The table below shows the change in Director and employee salary/fees, benefits and profit-share over the preceding two years.
The average change for employees as a whole is given using a per capita figure based on the average number of employees for the period.
Salary/fees
Benefits
Profit-share
%%%
2024
(1)
2023
(2)
2022
(3)
2024
(1)
2023
(2)
2022
(3)
2024
(1)
2023
(2)
2022
(3)
% %%% %%% %%
Employees
(4)
6% 16% 8% 9% 21% 6% 0% 8% 3%
Executive Director
Tom Griffith
(5)
0% 0% 1% -3% 11% -3% -7% -27% 1%
Non-Executive Directors
(6)
Rian Dartnell
50% 6% 47% n/a n/a n/a n/a n/a n/a
Peter Roth
8% 8% 8% n/a n/a n/a n/a n/a n/a
Tazim Essani
25% 5% 135% n/a n/a n/a n/a n/a n/a
Sarah Ing
(6)
n/a n/a n/a n/a n/a n/a n/a n/a n/a
Notes – Only current Directors are included in the above analysis:
(1) 2024 – June 2024 month end exchange rate has been applied to GBP payments for the two accounting periods 2023 to 2024 to eliminate the impact
of FX movements.
(2) 2023 – June 2023 month end exchange rate has been applied to USD payments for the two accounting periods 2022 to 2023 to eliminate the impact
of FX movements.
(3) 2022 – June 2022 month end exchange rate has been applied to USD payments for all two accounting periods 2021 to 2022 to eliminate the impact
of FX movements.
(4) Based on average cost per employee. The increases during the year are due to full year cost of replacing relationship managers and assistants, primarily due
to retirements, and the full year impact of restoring employee health care benefits at KIM.
(5) % increase in FY 2022 reflects the full impact of the mid-year salary increase on 1st January 2021 in FY 2021. There was no change in salary in FY 2023.
(6) Sarah Ing joined the Board on 1st March 2024 and thus not analysed.
Relative importance of spend on pay
The table below shows the overall expenditure on employee remuneration and shareholder distributions and the percentage
change between the current and previous period.
2024 2023 Change
$’000 $’000 %
Total employee spend
(1)
30,925 29,762 4%
Average headcount (number)
116 116 0%
Profit after tax
(1)
17,115 17,497 -3%
Dividends relating to the period
(1)(2)
20,430 19,357 6%
Dividend per share (pence) 33p 33p 0%
Note:
(1) Comparative period amounts have been restated to US dollars using average exchange rate in the relevant period.
(2) The current period includes an estimate of the final dividend based on the number of qualifying shares as at 30th June 2024 excluding those held in the
employee benefit trust. The Board are recommending a final dividend of 22p per share (2023: 22p), which would make the total for the year 33p per share
(2023: 33p). This is subject to shareholder approval at the AGM in October. The prior period estimate has been restated to include the actual final
dividend paid.
A breakdown of the employee spend can be found in note 3 to the financial statements on page 118.
82 City of London Investment Group PLC Annual Report 2023/2024
Governance: Remuneration
City of London Investment Group PLC Annual Report 2023/2024 83
Strategic reportOverview Financial statements Shareholder information
Governance
4) GOVERNANCE DISCLOSURES
Payments to past Directors
No payment or transfer of assets was made during the financial period to any past Director of the Company.
Payments for loss of office
There were no termination payments made to any person who has served as a Director during the financial period.
Directors’ interests
Beneficial interest of the Directors and their families in the shares of the Company at the period end were as follows:
Ordinary shares of 1p each Restricted share awards of 1p each
2024 2023 2024 2023
Executive Director
Tom Griffith 527,614 492,338 29,533 36,059
Non-Executive Directors
Rian Dartnell 50,000 50,000 ––
Peter Roth
5,000 5,000 ––
Tazim Essani
5,350 5,350 ––
Sarah Ing
(1)
10,000 n/a – n/a
Past Directors
Barry Aling
(2)
n/a 184,300 n/a –
George Karpus
(3)
n/a 18,371,205 n/a –
Jane Stabile
(4)
n/a 5,000 n/a –
Notes:
(1) Sarah Ing joined the Board on 1st March 2024.
(2) Barry Aling ceased to be a Director of the Company with effect from 23rd October 2023.
(3) George Karpus ceased to be a Director of the Company with effect from 31st July 2023.
(4) Jane Stabile ceased to be a Director of the Company with effect from 29th February 2024.
Executive Director shareholding guidelines
The Executive Director is required to hold shares equivalent in value to 200% of salary within a five-year period from date of
appointment. The below illustration shows the Executive Director’s share ownership against this target as at 30th June 2024.
To reduce the impact of share price volatility on this calculation, the closing share price of £3.70 for the financial year ended
30th June 2024 has been used.
Tom Griffith
Shares held
0% 100% 200% 300% 400% 500% 600% 700% 800% 900%
Unvested EIP shares (net of tax) Shareholding guidelines
777%
Shareholding guidelines
ANNUAL REPORT ON REMUNERATION
CONTINUED
4) GOVERNANCE DISCLOSURES CONTINUED
Remuneration Committee
The Executive Director does not attend during discussions regarding his own remuneration.
Details of attendance by members of the Remuneration Committee are set out on page 52.
Dividends received by Directors and their families from holdings of shares in the Company during the financial year were as follows:
2024
(1)
2022
(1)
£ £
Executive Director
Tom Griffith 166,352 157,088
Non-Executive Directors
Rian Dartnell 16,500 16,500
Peter Roth
1,650 1,650
Tazim Essani
1,766 1,766
Sarah Ing
(2)
n/a n/a
Past Directors
Barry Aling
(3)
n/a 60,819
George Karpus
(4)
n/a 6,062,498
Jane Stabile
(5)
1,100 1,650
Notes:
(1) Dividend is declared in sterling and thus the amounts have been not converted to US dollars.
(2) Sarah Ing joined the Board on 1st March 2024.
(3) Barry Aling ceased to be a Director of the Company with effect from 23rd October 2023.
(4) George Karpus ceased to be a Director of the Company with effect from 31st July 2023.
(5) Jane Stabile ceased to be a Director of the Company with effect from 29th February 2024.
Statement of voting at the last Annual General Meeting (AGM)
The table below shows the votes on the Directors’ Remuneration Report, and Policy, at the AGM held on 23rd October 2023.
Votes For* % For Votes Against % Against Total Votes**
Directors’ Remuneration Report
2023 18,331,222 93.59 1,256,199 6.41 19,587,421
Directors’ Remuneration Policy
2022 16,231,003 97.67 387,513 2.33 16,818,516
* Includes discretionary votes.
** Excludes votes withheld.
Consideration of employment conditions elsewhere in the Group
The Group has always adopted a partnership approach so in essence this policy is consistent with that applied across the Group.
As noted on page 82, average salary change for employees was 6% in FY 2024 as compared to 0% for the Executive Director,
reflecting the strong contribution from employees and the impact of missing our group KPI as referred to on page 70.
While employees were not directly consulted on the Directors’ remuneration, the Group remuneration policy is available to all
employees and any feedback or concerns are welcomed.
Terms of reference
The Committee reviewed its terms of reference in March 2024 and recommended minor administrative changes to the Board
for approval.
84 City of London Investment Group PLC Annual Report 2023/2024
Governance: Remuneration
City of London Investment Group PLC Annual Report 2023/2024 85
Strategic reportOverview Financial statements Shareholder information
Governance
4) GOVERNANCE DISCLOSURES CONTINUED
Compliance with Provision 40 of the UK Corporate Governance Code
CLARITY
Remuneration arrangements should be transparent and promote
effective engagement with shareholders and the workforce.
Executive Director remuneration is aligned to employee remuneration,
meaning that both parties have common goals and incentives. The
Group remuneration policy is available to all employees and any
feedback or concerns are welcomed. The simplicity of Directors’
remuneration assists in effective engagement with shareholders.
SIMPLICITY
Remuneration structures should avoid complexity and their rationale
and operation should be easy to understand.
The Policy for Executive Director remuneration is extremely simple
and straightforward, with fixed remuneration consisting of salary,
Director fees, taxable benefits and pensions, and variable pay
consisting of the profit-share plan and Employee Incentive Plan.
There are no complex individual KPIs – Executive Director simply
share in the operating profit that their performance helps to generate
over the course of the financial year.
RISK
Remuneration arrangements should ensure reputational and other
risks from excessive rewards, and behavioural risks that can arise
from target-based incentive plans, are identified and mitigated.
There are no individual KPIs that introduce the behavioural risks that
can arise from target-based forms of incentive. The appropriate risk
and cost controls necessary to deliver high quality earnings and
dividends, and thus increased the profit-share pool, robustly aligns
the interests of Executive Director, employees and shareholders.
PREDICTABILITY
The range of possible values of rewards to individual Directors and
any other limits or discretions should be identified and explained at
the time of approving the policy.
Due to its simplicity, both fixed and variable Executive Director
remuneration is very predictable. See page 72 for 2024
remuneration outcomes for Executive Director, plus a forecast
for 2025, on page 89.
PROPORTIONALITY
The link between individual awards, the delivery of strategy and the
long-term performance of the Company should be clear. Outcomes
should not reward poor performance.
The Group’s simple approach to remunerating its Director means
that it is impossible for poor performance to be rewarded. If the
Company’s operating profit is down, then so is the pool from which
the Director profit-share are paid and Employee Incentive Plan shares
are matched. The Executive Director has a greater impact on the
Group than other employees, therefore holds himself more
accountable in instances of market downturns, and therefore has
his profit-share participation adjusted accordingly.
ALIGNMENT TO CULTURE
Incentive schemes should drive behaviours consistent with Company
purpose, values and strategy.
The Group has an inclusive and team-based culture. The Executive
Director and employees have a common KPI tied to their variable
remuneration, being operating profit, a metric that shareholders
value due to its potential to provide increased distributions and an
increase in the Company’s share price. This alignment of interests is
consistent with the Group’s purpose, to exist for the mutual benefit
of its three primary stakeholders: clients, employees and
shareholders, as well as its values. Further detail on the Group’s
culture, purpose and values can be found on page 57.
86 City of London Investment Group PLC Annual Report 2023/2024
DIRECTORS’ REMUNERATION POLICY
Governance: Remuneration
The Directors’ Remuneration Policy (the Policy) was last put to a binding shareholder vote at the AGM in October 2022 and passed
with a vote of 97.7% in favour. The policy will remain in force until the 2025 AGM unless material changes are proposed in the
intervening period. An overview of the Policy is provided below.
Policy table
The following table sets out the principal components of the Policy.
Base salary (fixed pay)
EXECUTIVE DIRECTOR
To pay a fair base salary,
commensurate with the size of
the business and the individual’s
role and experience.
Reviewed annually, with changes, if any,
generally effective 1st January or 1st July. The
Committee considers salaries in the context of
an overall package with regard to market data,
Group performance and individual experience
and performance. Adjustments may be made at
other times to reflect a change of responsibility.
The annual pay review does not guarantee
an increase. The Committee considers it
important to keep fixed costs under tight
control and as such salaries are at the
lower end of what may be described as
market average.
There is no set maximum salary, however,
the Committee is guided by market
data/practice when setting pay awards
and the average level of increase across
the workforce.
Not applicable. Not applicable.
Component
and purpose
Operation Maximum opportunity Performance measures
and targets
Recovery
Base fee (fixed pay)
Provides a fee allocation to
cover UK Director duties.
The fees are equivalent to the Non-Executive
Directors’ base fee. These are reviewed
periodically with the last review effective from
January 2023. It is Company’s intention to
review these fees every two years.
As this fee relates specifically to the Executive
Directors’ governance duties, it is capped at
no more than the Non-Executive Directors’
base fee. The aggregate annual fees for
Executive and Non-Executive Directors are
limited to £450,000.
Not applicable. Not applicable.
Pension (fixed pay)
To provide defined contribution
pension arrangements to assist
with recruitment and retention.
Employer contributions are made to defined
contribution pension arrangements or
equivalent cash allowances are paid, subject to
local practice in the relevant country.
The maximum defined pension contribution
or cash equivalent is 12.5% per annum of
base salary. It is no higher than the defined
pension contribution level of the wider
employee workforce.
Not applicable. Not applicable.
Other benefits (fixed pay)
To provide market competitive
fringe benefits.
Currently benefits offered include: life insurance,
medical insurance (or a contribution towards the
cost), disability insurance, sabbatical, paid
holiday and travel season ticket loans.
Executives will be eligible for any other benefits
which are introduced for the wider workforce on
broadly similar terms.
Additional benefits may be provided if required,
for example to support international relocation.
These benefits represent a small element of
the overall remuneration package and as
such are not subject to a specific cap.
Directors are entitled to 30 days paid
holiday, in addition to public holidays.
Not applicable. Benefits are provided up to termination
of employment and any outstanding
travel season ticket loan is repayable
in full.
Profit-share (variable pay)
To incentivise and reward
Directors for their contribution to
the corporate goals outlined in
the strategic report.
The Company operates a profit-share plan for
all employees, including the Executive Director,
which is linked to the Group’s profitability,
allocating a maximum of up to 30% of
pre-profit-share, pre-tax, operating profit for
this purpose. Profit-share awards are made by
the Board following recommendations by the
Remuneration Committee.
Profit-share is paid quarterly in September
(approximately 10% of the estimated annual
bonus), December (20%), March (30%)
and July (40%). A minimum of 10% of the
July payment is deferred until September
once the financial statements have been
audited and approved.
The maximum payment for an Executive
Director is capped at 2.5 times the
aggregate of salary and fees.
Profit-share is not subject
solely to individual
performance conditions and
are paid in cash. The Board
believes that this profit-share
scheme has worked well in
motivating employees at all
levels within the Company
and that this is demonstrated
by the high employee
retention rates experienced
by the Group.
See malus and clawback section below.
City of London Investment Group PLC Annual Report 2023/2024 87
Strategic reportOverview Financial statements Shareholder information
Governance
EXECUTIVE DIRECTOR continued
Component
and purpose
Operation Maximum opportunity Performance measures
and targets
Recovery
Employee Incentive Plan (Plan)
To encourage and reward
loyalty, and to align the long-
term interests of Directors with
that of shareholders and clients.
The Plan is designed to work in
line with the Group’s current
annual bonus policy.
The Plan is open to employees of all existing
Group companies and Executive Director.
Participants will initially be invited to waive up
to 20% of their annual profit-share in return
for the right to participate in the Plan for the
financial year. Under the Plan, they will be
granted Restricted Share Awards (RSAs) in the
Company equal in value to two times the
amount they have waived.
The number of RSAs (shares) is calculated
based on the average share price over the ten
days preceding the grant date.
The RSAs for Executive Director will vest in
equal instalments after the 3rd, 4th and 5th
anniversaries following grant.
The RSAs are funded 50% by waived profit-
share and 50% by the Company.
Depending on the level of participation,
if there is headroom, employees and
Executive Director will be offered the
opportunity to increase their participation
up to 30% of their annual bonus.
Awards held until they vest will receive a
dividend equivalent payment, equal to the
amount that they would have received has
they been entitled to dividends from the
date of grant.
In the event of a change of control of the
Company, the RSAs relating to the waived
bonus will vest in full on an accelerated
basis. Only a prorated number of the
Company matching RSAs will vest on an
accelerated basis according to the number
of days elapsed since grant over the total
vesting period.
Not applicable. See malus and clawback section.
Malus and clawback
To provide a way of recovering
payments where there have been
exceptional negative events.
The Committee can seek to recover the annual
bonus and EIP in the exceptional event of:
misstatement or misleading representation of
performance; a material error; a significant failure
of risk management and control; reputational
damage; or serious misconduct of an individual.
The Committee has discretion to determine
the amount of any award which it seeks for
malus and/or clawback.
Not applicable. Up to 24 months after payment/vesting.
Minimum shareholding
Guidance to encourage Director
share ownership and ensure
alignment of their long-term
interests with that of
shareholders.
The Committee will monitor the Executive
Directors’ share ownership and participation in
the EIP annually to ensure they are on track to
meet the minimum shareholding requirement
within the desired timeframe.
Shares that count towards these guidelines
include shares that are owned outright,
vested and unvested EIP shares (on a net of
tax basis).
In addition a post-employment shareholding
requirement applies. The Executive Director is
required to hold the lower of 200% of their
base salary or the value of shares held by the
Executive Director at the date of termination of
employment. Only awards granted and shares
vested thereof after the introduction of this
policy in September 2021 will count against
the post cessation guideline. All awards granted
or vested or shares acquired before the
implementation of the policy (September 2021)
are excluded.
The Committee retains discretion to allow for
the sale of shares by the Executive Director
before the second anniversary of termination
of employment in the event of exceptional
circumstances.
The Committee expects the Executive
Director to build up a shareholding of
at least 200% of salary within a
five-year period.
Not applicable. Not applicable.
DIRECTORS’ REMUNERATION POLICY
CONTINUED
88 City of London Investment Group PLC Annual Report 2023/2024
Governance: Remuneration
Component
and purpose
Operation Maximum opportunity Performance measures
and targets
Recovery
Fees
To pay a fair fee, commensurate
with the skills, experience and
time required to undertake
the role.
Fees are normally reviewed every two years
taking into account factors such as the time
commitment and contribution of the role and
market levels in companies of a comparable
size and complexity. Adjustments may be made
at other times to reflect a change of
responsibility.
Fees for Non-Executive Directors may include
a base fee and additional fees for further
responsibilities (for example chair-ship of Board
committees or holding the office of Senior
Independent Director or taking up significant
additional responsibility).
Fees are paid monthly or quarterly in arrears,
depending on the Director’s preference.
The aggregate annual fees for Non-
Executive Directors are limited to £310,000
in the Company’s Articles of Association.
Not applicable. Not applicable.
NON-EXECUTIVE DIRECTORS
Expenses
To enable the Non-Executive
Directors to perform their duties.
All reasonable travelling, hotel and other
expenses properly incurred in the performance of
their duties as Directors, including any expenses
incurred in attending meetings of the Board or
any committee of the Board or general meetings
or separate meetings of the shareholders may
be repaid.
Expenses are not subject to a specific cap
but they must be reasonable and
appropriate. The Company may settle any
tax incurred.
Not applicable. Not applicable.
City of London Investment Group PLC Annual Report 2023/2024 89
Strategic reportOverview Financial statements Shareholder information
Governance
Reward scenarios
The chart below illustrates the level of remuneration that would be received by the Director in accordance with the Group
Directors’ remuneration policy in the year ending 30th June 2025, provided all components of remuneration remain the same as
they currently are.
Assumptions:
1) Based on FY2024 results.
2) Minimum – reflects salary as of 1st July 2024, and current pension and taxable benefits, as disclosed in the single figure remuneration table.
3) In line with expectation – reflects the minimum remuneration plus bonus and total EIP awards as disclosed in the single figure remuneration table.
It includes expected dividend equivalent payments due on vesting EIP awards.
4) Maximum – reflects the minimum remuneration plus the maximum bonus opportunity as detailed in the future policy table on pages 86 to 88. The
maximum variable cash bonus has been adjusted by the maximum amount of bonus that can be waived (30%), which in turn is matched by the Company
and the total is shown as EIP. For FY2025, the Company has however capped the maximum amount of bonus that can be waived at 10% but that has
not been taken into consideration for the purpose of this analysis. It includes expected dividend equivalent payments due on vesting EIP awards.
5) Under the current remuneration Policy, the EIP awards once awarded, will vest one-third per annum from the end of the third year after participation.
This means that RSAs will not vest in years one and two. RSAs will vest one-third each in years three, four and five.
The above reward scenario chart is not a projection and is being provided for guidance only. This chart is based on future
remuneration scenarios for the year ending June 2025.
Share price impact
Directors’ remuneration is not linked to performance targets or measures relating to more than one financial year. Hence no
illustrations are shown in respect of the impact on the Director’s remuneration outcomes based on future share price movements.
Recruitment of new Directors
The structure of the package offered to new Directors mirrors that offered to current Directors under the Directors’ remuneration
policy as detailed in the policy table. The base salary positioning will take into consideration a number of factors including external
market forces, the nature of the role, and the experience, calibre and background of the new Directors. Pension contributions,
profit-share and EIP participation will not exceed the levels set out in the Policy table.
In addition, the Group may pay compensation to new Directors for remuneration the individual has forfeited in order to take up the
role at CLIG. The Committee may offer additional cash and/or share-based buyout awards when it considers these to be in the best
interests of the Company (and therefore shareholders) to take account of remuneration given up at the individual’s former employer.
Maximum
1,277
Minimum (Fixed) In line with expectation
799
0
200
400
600
800
1,000
1,400
1,200
$’000
Salary and related costs Variable cash bonus Employee Incentive Plan (EIP)
100% 42% 26%
57%
40%
34%
1%
334
Tom Griffith
Chief Executive Officer
DIRECTORS’ REMUNERATION POLICY
CONTINUED
90 City of London Investment Group PLC Annual Report 2023/2024
Governance: Remuneration
This includes the use of awards made under 9.4.2 of the Listing Rules. Such awards would be capped at a reasonable estimate of the
value foregone and would reflect, as far as possible, the delivery mechanism, time horizons and whether performance requirements are
attached to that remuneration. Shareholders will be informed of any such payments at the time of appointment and/or in the next
published Annual Report. For internal appointments, any outstanding share awards held may continue to vest on their original terms.
For external and internal appointments, the Committee may agree that the Company will meet appropriate relocation and/or
incidental expenses as appropriate.
For the appointment of a new Chair or Non-Executive Director, the fee arrangement would be set in accordance with the approved
Remuneration Policy.
Service contracts and letters of appointment and policy on payments for loss of office
Executive Director
In line with general market practice, the Executive Director’s service contract is based on a rolling twelve-month period. Termination
of any service contract requires twelve months written notice by either party, and the Company may terminate the contract with
immediate effect with or without cause by making a payment in lieu of notice, typically in monthly instalments equal to the value
of one year’s base salary only.
No bonus shall be payable for any time after the Director has given or received notice of termination.
In respect of the EIP, in the event of termination before the normal vesting date, the RSAs funded by the waived bonus will be
repaid at the lower of the value of those shares on the date of award and the date of forfeiture. The Company-funded RSAs will be
forfeited upon termination, except in the case of a good leaver, where there will be an entitlement to a prorated amount. A good
leaver is a Director who leaves due to ill health or disability, sale of the business, on retirement, through redundancy or in other
special circumstances approved by the Remuneration Committee (acting fairly and reasonably).
Non-Executive Directors
Non-Executive Directors do not have service contracts, but are engaged under letters of appointment. As with the Executive
Director, they are required to stand for re-election annually in accordance with the UK Corporate Governance Code.
Details of service contracts and letters of appointment are below:
Notice period Notice period
Name Date of appointment from Company from Director Provision of compensation
Executive Director
Tom Griffith 31st March 2020 One year One year One year’s salary
Non-Executive Directors
Rian Dartnell 30th September 2020 Six months Six months Six months’ fees
Tazim Essani 20th January 2021 Six months Six months Six months’ fees
Peter Roth 1st June 2019 Six months Six months Six months’ fees
Sarah Ing 1st March 2024 Six months Six months Six months’ fees
Consideration of shareholders’ views
The Committee greatly values and has considered the views of shareholders and proxy advisers in developing this Remuneration Policy.
City of London Investment Group PLC Annual Report 2023/2024 91
Strategic reportOverview Financial statements Shareholder information
Governance
DIRECTORS’ REPORT
Governance: Statutory, regulatory and other information
Principal activity
City of London Investment Group PLC is the holding company
for its two principal operating subsidiaries: City of London
Investment Management Company Limited (CLIM) and
Karpus Investment Management (KIM). Both CLIM and
KIM act as investment managers with a total of $10.2 billion
(2023: $9.4 billion) funds under management as at
30th June 2024.
Going concern
The Directors’ report should be read in conjunction with the
governance report on pages 49 to 90 and the strategic report on
pages 4 to 46, which together provide a commentary on the
operations of the Group and include factors likely to affect its
future development as well as relevant key performance indicators
and principal risks and how they are managed, using the
information available to the date of these financial statements.
During the year to 30th June 2024, the Group had no external
borrowings and is wholly funded by equity. As at 30th June
2024, cash and cash equivalents were $33.7 million (2023:
$28.6 million). Accordingly, the Directors are satisfied that the
Group and Parent Company have adequate resources to meet
their business needs for the foreseeable future, and the Financial
Statements have therefore been prepared on the going concern
basis. Please see page 33 for the viability statement.
Results and dividend
The results of the Group for the year to 30th June 2024,
together with details of amounts transferred to reserves, are set
out on pages 106, 108 and 109. The Company has paid
dividends of $19.9 million during the period (2023: $19.4
million). The final dividend for the year to 30th June 2024
of 22p per share (2023: 22p) has been proposed, payable on
7th November 2024, subject to shareholder approval, to
shareholders who are on the register of members on 4th
October 2024. Refer to page 22 for dividend policy.
Annual General Meeting
The Company’s AGM will be held at 11.30am on 28th October
2024 at 77 Gracechurch Street, London EC3V 0AS. All
resolutions will be taken on a poll and, accordingly, you are
asked to vote by the means as set out in the Notes of the
Notice of meeting.
The information contained in the sections of this Annual Report and Accounts identified below forms part of this Directors’ report:
DISCLOSURE LOCATION
Strategic report Pages 4 to 46
Group’s corporate governance arrangements Pages 49 to 90
Statement of compliance with 2018 UK Page 53 of Corporate Governance report
Corporate Governance Code
Future business developments Pages 4 to 16 of the Strategic report
Greenhouse gas emissions Page 43 of the TCFD report
People, culture and employee engagement Pages 57 to 59
Financial risk management objectives and policies Note 24 to the Financial Statements – pages 136 to 137
Exposure to price risk, credit risk, liquidity Note 24 to the Financial Statements – pages 136 to 137
risk and cash flow risk
Statement of Directors’ responsibilities Page 94
Directors’ interests Page 83 of the Directors’ remuneration report
s172 Statement Page 46 of the Strategic report
Stakeholder engagement in key decisions Pages 58 to 59
Corporate responsibility Pages 34 to 36
The Directors’ report together with the strategic report on pages 4 to 46 form the management report for the basis of DTR 4.1.5R.
DIRECTORS’ REPORT
CONTINUED
92 City of London Investment Group PLC Annual Report 2023/2024
Governance: Statutory, regulatory and other information
Directors
The Directors of the Company who held office during the year are:
Rian Dartnell
(Chair)
Tom Griffith
(Chief Executive Officer)
Peter Roth
(Senior Independent Director and
Independent Non-Executive Director)
Tazim Essani
(Independent Non-Executive Director)
Sarah Ing
(Independent Non-Executive Director)
(appointed on 1st March 2024)
Barry Aling
(Chair) (stepped down on
23rd October 2023)
Jane Stabile
(Independent Non-Executive Director)
(stepped down on 29th February 2024)
George Karpus
(Non-Executive Director)
(stepped down on 31st July 2023)
The biographical details of the current Directors of the
Company are given on pages 50 to 51, whilst the roles
are on page 60.
Directors’ indemnity arrangements
The Company maintains appropriate Directors’ and Officers’
insurance. The Directors also have the benefit of the indemnity
provisions in the Company’s Articles of Association. These
provisions, which are qualifying third party indemnity
provisions as defined by s236 of the Companies Act 2006
were in force throughout the year and are currently in force.
Powers of Directors
Subject to the Company’s Articles, UK legislation and any
Directions given by special resolution, the business of the
Company is managed by the Directors and they may exercise all
the powers of the Company. Provisions relating to the issuing of
shares are included in the Articles and shareholders are asked
each year at the Company’s AGM to renew the Directors’
authorities to issue shares.
Share capital
As at 30th June 2024, the issued share capital of the Company
was 50,679,095 (2023: 50,679,095) fully paid ordinary shares
of 1p each, carrying one vote per share and a right to dividends,
amounting to $643,777 (£506,791) (2023: $827,501
(£506,791)). There are no restrictions on the transfer of shares.
Following completion of the merger with KIM, the Company
entered a relationship agreement with the ‘Controlling
Shareholder Group’ which regulates the ongoing relationship
between the Company and the Controlling Shareholder Group.
The members of the Controlling Shareholder Group agreed to
limit their voting rights at any shareholder meeting, including
the Annual General Meeting, to the lower of: (i) the number of
shares held by them; and (ii) 24.99% of the votes cast on any
resolution by all shareholders.
Own shares
The Company is, until the date of the next AGM on 28th
October 2024, generally and unconditionally authorised to buy
back up to 5,067,910 of its own ordinary shares of nominal
value £0.01, representing approximately 10% of the Company’s
issued share capital. In the year under review, the Company
purchased and cancelled nil shares (2023: nil).
The number of own shares purchased by the Company’s
Employee Benefit Trust during the year was 318,000 (2023:
622,746). The number of own shares held by the Trust as at
30th June 2024 was 1,829,637 (2023: 1,989,355), of which
238,500 shares (2023: 290,900) were subject to options in issue.
The Trust has waived its entitlement to receive dividends in
respect of the shares held. The trust will abstain from voting on
resolutions that concern a change of control in the Company.
The Trust also holds 1,133,649 shares (2023: 1,003,944) in
custody for employees under the terms of the Employee
Incentive Plan, see the Directors’ remuneration report on
page 78 for further details of the plan.
Substantial shareholdings
At 31st August 2024, the Company had been notified of
the following interests of 3% or more in the Company’s
ordinary shares:
Number of % of total
Name of shareholder voting rights voting rights held
Aberforth Partners LLP 2,560,745 5.1
George Karpus 15,948,201 31.5
City of London Investment Group PLC Annual Report 2023/2024 93
Strategic reportOverview Financial statements Shareholder information
Governance
Conflict of interests
There are no potential conflicts of interest between any duties
owed by the Directors or senior managers to the Company and
their private interests and/or other duties; and no arrangements
or understandings with any of the shareholders of the Company,
clients, suppliers or others pursuant to which any Director or
senior manager was selected to be a Director or senior manager.
The Company tests regularly to ensure awareness of any future
potential conflicts of interest and related party transactions.
Political donations
The Company did not make any political donations or incur
any political expenditures to candidates or political campaigns
during the period.
Engagement with Employees Statement
The Company is exempted from some reporting requirements,
as it has not employed more than 250 employees in the UK
during the year under review.
Auditors
The auditors for the financial year were Grant Thornton UK
LLP. 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.
Internal control and risk management
The Audit & Risk Committee has responsibility for overseeing
the framework for risk management and internal control and
ensuring it functions appropriately.
The Group also has a robust financial controls framework
designed to provide assurance that proper accounting records are
adequately maintained and that information used within the
business and for external publication is reliable and free from
material misstatement. This includes segregation of duties,
balance sheet reconciliations, and quarterly compliance checks
on revenue recognition.
The Board reviews the effectiveness of the system of internal
control annually and this process is subsequently evaluated by
the Audit & Risk Committee.
The Board is also responsible for the Internal Capital and Risk
Assessment (ICARA) document, as required by the UK
regulator, which summarises the Group’s risk management
framework and regulatory capital requirements.
A detailed description of the risk management framework and
the principal risks identified is set out on pages 28 to 29.
Shareholder relations
Engagement with shareholders is of paramount importance to
the Group. The Directors, including on occasions the Senior
Independent Non-Executive Director and the Chair of the
Board, endeavour to meet with large shareholders at least twice
annually, generally following interim and final results
announcements. Following these meetings, the Directors report
back to the Board. All of the Directors aim to attend the Annual
General Meeting either in person or by video conference.
Approved by the Board of Directors and signed on behalf of
the Board.
Tom Griffith
Chief Executive Officer
23rd September 2024
94 City of London Investment Group PLC Annual Report 2023/2024
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Strategic report,
the Directors’ report, the Directors’ remuneration report and
the Financial statements in accordance with applicable law
and regulations.
Company law requires the Directors to prepare Group and
Company financial statements for each financial year. The
Directors have elected under Company law and are required
under the Listing Rules of the Financial Conduct Authority to
prepare Group financial statements in accordance with UK-
adopted International Accounting Standards. The Directors have
elected under Company law to prepare the Company financial
statements in accordance with UK-adopted International
Accounting Standards.
The Group and Company financial statements are required by
law and UK-adopted International Accounting Standards to
present fairly the financial position of the Group and the
Company and the financial performance of the Group; the
Companies Act 2006 provides in relation to such financial
statements that references in the relevant part of that Act to
financial statements giving a true and fair view are references
to their achieving a fair presentation.
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 Group and the
Company and of the profit or loss of the Group for that period.
In preparing each of the Group and Company 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 they have been prepared in accordance with
UK-adopted International Accounting Standards; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and the
Company will continue in business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s and
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Group and
the Company and enable them to ensure that the financial
statements and the Directors’ remuneration report comply
with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Group and the Company and
hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
Directors’ statement pursuant to the Disclosure
and Transparency Rules
Each of the Directors, whose names and functions are listed
on pages 50 and 51 confirm that, to the best of each person’s
knowledge:
• the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit of
the Company and the undertakings included in the
consolidation taken as a whole; and
• the Strategic Report and Directors’ report contained in the
Annual Report includes a fair review of the development and
performance of the business and the position of the Company
and the undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and
uncertainties that they face.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
City of London Investment Group’s website.
Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
For and on behalf of the Board
Tom Griffith
Chief Executive Officer
23rd September 2024
City of London Investment Group PLC Annual Report 2023/2024 95
Strategic reportOverview Shareholder information
Governance Financial statements
FINANCIAL STATEMENTS
Contents
Independent auditor’s report 96
Consolidated income statement 106
Consolidated and Company statement of
comprehensive income 106
Consolidated and Company statement of financial position 107
Consolidated statement of changes in equity 108
Company statement of changes in equity 109
Consolidated and Company cash flow statement 110
Notes to the financial statements 111
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF CITY OF LONDON INVESTMENT GROUP PLC
96 City of London Investment Group PLC Annual Report 2023/2024
Opinion
Our opinion on the financial statements is unmodified
We have audited the financial statements of City of London
Investment Group PLC (the ‘parent company’) and its
subsidiaries (the ‘group’) for the year ended 30th June 2024,
which comprise of the Consolidated Income Statement,
Consolidated and Company Statement of Comprehensive
Income, Consolidated and Company Statement of Financial
Position, Consolidated Statement of Changes in Equity,
Company Statement of Changes in Equity, Consolidated and
Company Cash Flow Statement and notes to the financial
statements, including a summary of significant accounting
policies. The financial reporting framework that has been
applied in their preparation is applicable law and UK-
adopted international accounting standards and, as regards
the parent company financial statements, as applied in
accordance with the provisions of the Companies Act 2006.
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 30th June 2024 and of the group’s profit for the year
then ended;
• the group financial statements have been properly
prepared in accordance with UK-adopted international
accounting standards;
• the parent company financial statements have been
properly prepared in accordance with UK-adopted
international accounting standards 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.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described
in the ‘Auditor’s responsibilities for the audit of the financial
statements’ section of our report. We are independent of the
group and the parent company in accordance with the ethical
requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as
applied to listed public interest entities, and we have fulfilled
our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for
our opinion.
Conclusions relating to going concern
We are responsible for concluding on the appropriateness of the
directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast
significant doubt on the group’s and the parent company’s
ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in
our report to the related disclosures in the financial statements
or, if such disclosures are inadequate, to modify the auditor’s
opinion. Our conclusions are based on the audit evidence
obtained up to the date of our report. However, future events
or conditions may cause the group or the parent company to
cease to continue as a going concern.
Our evaluation of the directors’ assessment of the group’s and
the parent company’s ability to continue to adopt the going
concern basis of accounting included:
• Determining the appropriateness of the group and parent
company’s going concern policy and procedures under the
relevant accounting framework;
• Assessing the adequacy of disclosures concerning the basis of
preparation of the financial statements and going concern;
• Assessing the accuracy of the prior year forecast and the
underlying data used in management’s forecasts;
• Inspecting management's going concern assessment and
assessing its appropriateness by applying relevant sensitivities
to the underlying assumptions and the conclusions made;
• Evaluating the reasonableness of the income forecasts
prepared by management, including the assumptions used
and level of headroom available in terms of cash resources;
• Obtaining an understanding of the liquidity position of the
group and parent company;
Financial statements: Independent Auditor’s report
City of London Investment Group PLC Annual Report 2023/2024 97
Strategic reportOverview Shareholder informationGovernance
• Considering the robustness of the forecasts to potential
changes in underlying key assumptions;
• Obtaining an understanding of how management has
assessed the impact of geopolitical events and market
conditions in relation to ongoing global macroeconomic
factors in their forecasts;
• Assessing disclosures included in the financial statements in
relation to the impact of macroeconomic uncertainties and
geopolitical events such as the impact of the Russian invasion
of Ukraine, rising inflation and geopolitical instability in the
Middle East; and
• Identifying applicable subsequent events and discussing
their implications with management.
In our evaluation of the directors’ conclusions, we considered
the inherent risks associated with the group’s and the parent
company’s business model including effects arising from
macro-economic uncertainties and geopolitical events, we
assessed and challenged the reasonableness of estimates made
by the directors and the related disclosures and analysed how
those risks might affect the group’s and the parent company’s
financial resources or ability to continue operations over the
going concern period.
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
group’s and the parent company’s ability to continue as a going
concern for a period of at least twelve months from when the
financial statements are authorised for issue.
In relation to the group’s reporting on how it has applied the UK
Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the directors’ statement in the
financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections
of this report.
Our approach to the audit
Overview of our audit approach
Overall materiality:
Group: $1,131,064 which represents 5% of the group’s profit
before tax.
Parent company: $1,074,511, which represents approximately
1% of the parent company’s net assets, capped at 95% of
Group materiality.
Key audit matters were identified as:
• Management fees (same as previous year); and
• Impairment of goodwill and intangible assets (same as
previous year).
The auditor’s report for the year ended 30th June 2023 included
no key audit matters that have not been reported as key audit
matters in our current year’s report.
Scope:
The group is comprised of the parent company and seven
subsidiaries, and we have performed an audit of the financial
information of the components using component materiality
(full scope audit) on three components, specific audit procedures
on one component and analytical procedures at group level on
three components.
Financial statements
Key audit
matters
Materiality
Scoping
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
financial statements of the current period and include the most
significant assessed risks of material misstatement (whether or
not due to fraud) that we identified. These matters included
those that had the greatest effect on: the overall audit strategy;
the allocation of resources in the audit; and directing the efforts
of the engagement team. These matters were addressed in the
context of our audit of the financial statements as a whole, and
in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
INDEPENDENT AUDITOR’S REPORT
CONTINUED
98 City of London Investment Group PLC Annual Report 2023/2024
Financial statements: Independent Auditor’s report
Description Audit response
Disclosures Key observations
KAM
Low
Management fees
Going concern
Change in functional currency
Key audit matter Significant risk Other risk
Management override of controls
Impairment of goodwill
and intangible assets
High
Low
Extent of management judgement
Potential
financial
statement
impact
High
In the graph below, we have presented the key audit matters, significant risks and other risks relevant to the audit.
City of London Investment Group PLC Annual Report 2023/2024 99
Strategic reportOverview Shareholder informationGovernance Financial statements
Key Audit Matter – Group How our scope addressed the matter – Group
Management fees
We identified occurrence of management fees as one of the
most significant assessed risks of material misstatement due to
fraud and error.
As described in the accounting policies on page 116
management fees of $69,452,706 (note 2) are based on a
percentage of Funds under Management in accordance with
the respective management agreements. There is a risk of
management fee income being overstated as a result of fees
being inappropriately recognised. Whilst the computation of
fees is not inherently complex or judgemental, revenue is
material in the context of the financial statements as a whole
and it is therefore determined to be a key audit matter.
In responding to the key audit matter, we performed the
following audit procedures:
• assessing whether the Group’s accounting policy for
recognition of management fees is in accordance with UK-
adopted international accounting standards;
• independently confirmed third party custodian records of
the relevant month-end Net Asset Value (NAV), and
checked that the correct fund values had been used to
calculate the fee;
• for a sample of management fees selected from the revenue
listing we agreed the key inputs into the management fee
calculation to the Investment Management Agreements
(IMA) and recalculated the expected management fee based
on the NAV and fee income percentage as documented in
the IMA;
• for a sample of outliers identified by our Audit Data
Analytics software based on pre-set expectations, we agreed
the items to agreements and invoices; and
• considered the design and implementation of controls over
the inputs and calculation of management fee income with
a sample tested to evidence review and approval of the
management fee calculation.
Relevant disclosures in the Annual Report Our results
Financial statements: Note 1.17, Revenue recognition
The group’s accounting policy on management fees, is shown
in note 1.17 to the financial statements and related disclosures
are included in note 2.
Our testing did not identify any material misstatements in
the management fees recognised during the year.
INDEPENDENT AUDITOR’S REPORT
CONTINUED
100 City of London Investment Group PLC Annual Report 2023/2024
Financial statements: Independent Auditor’s report
Key Audit Matter – Group How our scope addressed the matter – Group
Impairment of goodwill and intangible assets
We identified impairment of goodwill and intangible assets
as one of the most significant assessed risks of material
misstatement due to error.
Goodwill of $90,072,110 and intangible assets, including
customer relationships, distribution channels and the trade
name, arising on acquisition of $32,761,000 as set out in note
11 are included in the consolidated Statement of Financial
Position at 30th June 2024. Management is required by IAS
36 ‘Impairment of assets’ to perform an annual impairment
review for goodwill and for finite-life intangible assets where
there are indicators of impairment. The test for impairment
compares the carrying value of the cash generating unit to
which the assets are allocated to their recoverable amount
which is the higher of their fair value less costs of disposal or
value in use. Calculating the recoverable amount requires
management judgement as set out in the accounting policies
in note 1.4 and the disclosures in note 11. The headroom in
the impairment assessment is sensitive to changes in key
assumptions (see note 11) and thus we consider this to
represent a key audit matter.
In responding to the key audit matter, we performed the
following audit procedures:
• assessed whether the Group’s accounting policy for the
impairment of goodwill and intangible assets is in accordance
with UK-adopted international accounting standards and is
compliance with the requirements of IAS 36;
• recalculated the fair value less costs of disposal (FVLCD) for
mechanical accuracy and consistency with the requirements
of IAS 36;
• considered the appropriateness of management’s assessment
of the allocation of goodwill and intangible assets to a cash
generating unit;
• assessed the reasonableness of comparable companies used
in the market comparable approach;
• challenged management on key assumptions used in the
fair value model including selected AUM and EBITDA
multiples, calibration to the original transaction date and
comparison against market comparables;
• challenged management on key assumptions used in the
Value In Use (VIU) model, including medium and long-
term growth rates and discount rates;
• worked with our internal valuation specialists to determine
the appropriateness of the impairment assessment and
accuracy of supporting data used in the fair value estimate;
• evaluated the sensitivity analysis prepared by management;
• considered the qualifications, credentials and independence
of the valuation expert engaged by management; and
• assessed the completeness and accuracy of disclosures within
the financial statements.
Relevant disclosures in the Annual Report Our results
Financial statements: Note 1.9, Impairment of
goodwill and other assets
The group’s accounting policy on the impairment of goodwill
and intangibles, is shown in note 1.9 to the financial
statements and related disclosures are included in note 11.
Our testing did not identify impairment in the goodwill and
intangibles during the year and we are satisfied that the
impairment review has been carried out in accordance with
the requirements of IAS 36.
We did not identify any key audit matters relating to the audit of the financial statements of the parent company only.
City of London Investment Group PLC Annual Report 2023/2024 101
Our application of materiality
We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified
misstatements on the audit and of uncorrected misstatements, if any, on the financial statements and in forming the opinion
in the auditor’s report.
Materiality was determined as follows:
Strategic reportOverview Shareholder informationGovernance Financial statements
Materiality measure Group Parent company
Materiality for financial
statements as a whole
We define materiality as the magnitude of misstatement in the financial statements that,
individually or in the aggregate, could reasonably be expected to influence the economic
decisions of the users of these financial statements. We use materiality in determining the
nature, timing and extent of our audit work.
Materiality threshold $1,131,064 (2023: £937,000), which
represents 5% of profit before tax.
$1,074,511 (2023: £528,500), which
represents 1% of net assets (2023: 0.44%),
capped at 95% of Group materiality.
Significant judgements
made by auditor in
determining materiality
In determining materiality, we made the
following significant judgements:
• profitability is considered to be a key
benchmark monitored by management
and investors as the investors return is
based on profit.
Materiality for the current year is higher than
the level that was determined for the year
ended 30 June 2023 to reflect an increase in
the management fees received during the year.
In determining materiality, we made the
following significant judgements:
• net assets is considered to be a key
benchmark as the entity primarily exists
to hold and manage its investments in
trading subsidiaries.
Materiality for the current year is higher
than the level that was determined for the year
ended 30 June 2023 to reflect an appropriate
change from prior year in the percentage of
net assets chosen.
Performance materiality
used to drive the extent
of our testing
We set performance materiality at an amount less than materiality for the financial statements as
a whole to reduce to an appropriately low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds materiality for the financial statements as a whole.
Performance materiality
threshold
$735,192 (2023: £703,000), which is 65%
(2023: 75%) of financial statement materiality.
$698,432 (2023: £396,000), which is 65%
(2023: 75%) of financial statement materiality.
Significant judgements
made by auditor in
determining performance
materiality
In determining performance materiality, we
made the following significant judgements:
• the work performed reviewing the
predecessor auditor's work noted that there
were no material audit adjustments, and
through our understanding obtained from
planning procedures and meetings with
management to date, we understand it to be
a non-complex investment management
business. As a result of this it is considered
appropriate to use a performance
materiality of 65%.
In determining performance materiality, we
made the following significant judgements:
• the work performed reviewing the
predecessor auditor's work noted that there
were no material audit adjustments, and
through our understanding obtained from
planning procedures and meetings with
management to date, we understand it to be
a non-complex investment management
business. As a result of this it is considered
appropriate to use a performance
materiality of 65%.
102 City of London Investment Group PLC Annual Report 2023/2024
INDEPENDENT AUDITOR’S REPORT
CONTINUED
Financial statements: Independent Auditor’s report
The graph below illustrates how performance materiality interacts with our overall materiality and the threshold for
communication to the audit committee.
FSM: Financial statement materiality, PM: Performance materiality, TfC: Threshold for communication to the audit and risk committee.
Materiality measure Group Parent company
Communication of
misstatements to the audit
and risk committee
We determine a threshold for reporting unadjusted differences to the audit and risk committee.
Threshold for
communication
$56,600 (2023: £46,800), which represents
5% of financial statement materiality, and
misstatements below that threshold that,
in our view, warrant reporting on
qualitative grounds.
$53,700 (2023: £26,425), which represents
5% of financial statement materiality, and
misstatements below that threshold that,
in our view, warrant reporting on
qualitative grounds.
Overall materiality – Group
FSM: $1.1m, 5%
Profit before tax: $22.6m
PM
$735,192
TfC
$56,600
FSM
$1,131,064
5%
Overall materiality – Parent
FSM: $1m, 1%
Net assets: $155.2m
PM
$698,432
TfC
$53,700
FSM
$1,074,511
1%
City of London Investment Group PLC Annual Report 2023/2024 103
Strategic reportOverview Shareholder informationGovernance Financial statements
An overview of the scope of our audit
We performed a risk-based audit that requires an understanding
of the group’s and the parent company’s business and in
particular matters related to:
Understanding the group, its components, and their
environments, including group-wide controls
• The engagement team obtained an understanding of the group
and its environment, including group-wide controls and
assessed the risks of material misstatement at the group level.
• The engagement team obtained an understanding of relevant
internal controls at both the group and subsidiaries. This
included obtaining an understanding of the internal
controls and assessing whether they are designed and
implemented effectively.
Identifying significant components
• The group audit team evaluated the identified components to
assess their significance and determined the planned audit
response based on a measure of materiality. Significance was
determined, as a percentage of the group’s revenue and profit
before taxation as well as considering qualitative factors, such
as a component’s specific nature or circumstances.
• Three components (Parent Company and two subsidiaries)
were identified as significant components.
Type of work to be performed on financial information of
parent and other components (including how it addressed
the key audit matters)
• Performance of full-scope audits of the financial information
using component materiality of City of London Investment
Group PLC (Parent Company), Karpus Management Inc and
City of London Investment Management Company Limited.
These full-scope audits included the work on the identified key
audit matters as described in the Key Audit Matter section above.
• Analytical procedures at group level using group materiality were
performed for four components and for one component we
audited one or more account balances, classes of transactions or
disclosures of the component.
Performance of our audit
• Our full scope procedures gave a coverage of 100% of the
Group’s total income, 95% of the Group’s total assets and 86%
of the Group’s profit before tax.
• We made visits to the Finance team in London, who are the
central finance team for the group including overseas
subsidiaries, to assess the control environment and to aid
fieldwork procedures. The Group consists of components
based in the United Kingdom, United States of America
and Singapore.
• The Group’s trading subsidiary in the United States of
America was subject to a full scope audit to component overall
materiality because the component was assessed as significant
to the Group based on its individual financial significance and
the nature of the significant risks identified. The group audit
team carried out analytical procedures at Group level on the
overseas subsidiary based in Singapore.
No. of % coverage % coverage % coverage
Audit approach components total assets revenue PBT
Full-scope audit 3 95% 100% 86%
Specified audit procedures 1 3% 0% 0%
Analytical procedures 4 2% 0% 14%
Total 8 100% 100% 100%
Other information
The other information comprises the information included in
the annual report, other than the financial statements and our
auditor’s report thereon. The directors are responsible for the
other information contained within the annual report. Our
opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance
conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to determine
whether there is a material misstatement in the financial
statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
Our opinions on other matters prescribed by the
Companies Act 2006 are unmodified
In our opinion, the part of the directors’ remuneration report
to be audited has been properly prepared in accordance with
the Companies Act 2006.
In our opinion, based on the work undertaken in the course
of the audit:
• the information given in the strategic report and the
directors’ report for the financial year for which the
financial statements are prepared is consistent with the
financial statements; and
• the strategic report and the directors’ report have been
prepared in accordance with applicable legal requirements.
104 City of London Investment Group PLC Annual Report 2023/2024
INDEPENDENT AUDITOR’S REPORT
CONTINUED
Financial statements: Independent Auditor’s report
Matter on which we are required to report under the
Companies Act 2006
In the light of the knowledge and understanding of the group
and the parent company and their environment obtained in
the course of the audit, we have not identified material
misstatements in the strategic report or the directors’ report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in
relation to which 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 and the part of the
directors’ remuneration report to be audited 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.
Corporate governance statement
• We have reviewed the directors’ statement in relation to going
concern, longer-term viability and that part of the Corporate
Governance Statement relating to the group’s compliance
with the provisions of the UK Corporate Governance Code
specified for our review by the Listing Rules.
• Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements or our knowledge obtained during the audit:
– the directors’ statement with regards to the appropriateness
of adopting the going concern basis of accounting and any
material uncertainties identified set out on page 91;
– the directors’ explanation as to their assessment of the
group’s prospects, the period this assessment covers and
why the period is appropriate as set out on page 91;
– the director’s statement on whether they have a reasonable
expectation that the group will be able to continue in
operation and meet its liabilities set out on page 91;
– the directors’ statement on fair, balanced and
understandable set out on page 67;
– the board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out on
page 29;
– the section of the annual report that describes the review of
the effectiveness of risk management and internal control
systems set out on page 93; and
– the section describing the work of the audit committee set
out on page 93.
Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement set out on page 94, the directors are responsible for
the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group’s and the parent company’s
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate
the group or the parent company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. The extent to which our procedures
are capable of detecting irregularities, including fraud, is
detailed below:
• we obtained an understanding of the legal and regulatory
frameworks applicable to the group and parent company and
the industry in which it operates. We identified areas of laws
and regulations that could reasonably be expected to have a
material effect on the financial statements from our sector
experience and through discussion with the directors and
management. We determined that the most significant laws
and regulations were Financial Services and Markets Act 2000
(FSMA 2000) legislation and those that relate to the financial
reporting framework, being UK-adopted international
accounting standards, the Companies Act 2006 and the
Listing Rules of the Financial Conduct Authority (the ‘FCA’);
City of London Investment Group PLC Annual Report 2023/2024 105
Strategic reportOverview Shareholder informationGovernance Financial statements
• we enquired of the directors and management to obtain an
understanding of how the group and parent company is
complying with those legal and regulatory frameworks and
whether there were any instances of non-compliance with
laws and regulations and whether they had any knowledge of
actual or suspected fraud. We corroborated the results of our
enquiries through reading the minutes of Board and Audit
Committee meetings;
• we assessed the susceptibility of the group and parent
company’s financial statements to material misstatement,
including how fraud might occur by evaluating management’s
incentives and opportunities for manipulation of the financial
statements. This included an evaluation of the risk of
management override of controls. Audit procedures
performed by the engagement team in connection with the
risks identified included:
– evaluation of the design and implementation of controls that
management has put in place to prevent and detect fraud;
– testing journal entries, including manual journal entries
processed at the year-end for financial statements
preparation and journals with unusual account
combinations; and
– challenging the assumptions and judgements made by
management in its significant accounting estimates.
• these audit procedures were designed to provide reasonable
assurance that the financial statements were free from fraud or
error. The risk of not detecting a material misstatement due
to fraud is higher than the risk of not detecting one resulting
from error and detecting irregularities that result from fraud is
inherently more difficult than detecting those that result from
error, as fraud may involve collusion, deliberate concealment,
forgery or intentional misrepresentations. Also, the further
removed non-compliance with laws and regulations is from
events and transactions reflected in the financial statements,
the less likely we would become aware of it;
• the engagement partner’s assessment of the appropriateness of
the collective competence and capabilities of the engagement
team included consideration of the engagement team’s:
– understanding of, and practical experience with audit
engagements of a similar nature and complexity through
appropriate training and participation;
– knowledge of the industry in which the group and parent
company operates;
– understanding of the legal and regulatory frameworks
applicable to the company.
• we communicated relevant laws and regulations and potential
fraud risks to all engagement team members, and remained
alert to any indications of fraud or non-compliance with laws
and regulations throughout the audit.
A further description of our responsibilities for the audit of the
financial statements is located on the Financial Reporting
Council’s website at:
www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Other matters which we are required to address
We were appointed by the City of London Investment Group
audit committee on 15th May 2024 to audit the financial
statements for the year ending 30th June 2024. Our total
uninterrupted period of engagement is one year, covering the
year ended 30th June 2024.
The non-audit services prohibited by the FRC’s Ethical
Standard were not provided to the group or the parent company
and we remain independent of the group and the parent
company in conducting our audit.
Our audit opinion is consistent with the additional report to
the audit committee.
Use of our report
This report is made solely to the company’s members, as a body,
in accordance with Chapter 3 of Part 16 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.
William Pointon
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
23rd September 2024
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30TH JUNE 2024
| Year to | |||
Year to | 30th June 2023 | ||
30th June 2024 | (restated) | ||
Note | $’000 | $’000 | |
| Revenue | |||
Gross fee income | 2 | ||
| Commissions payable | ( | ( | |
Custody fees payable | ( | ( | |
Net fee income | |||
| Administrative expenses | |||
Employee costs | 3(b) | ||
| Other expenses | |||
Depreciation and amortisation | |||
( | ( | ||
Operating profit | 5 | ||
| Finance income | 6a | ||
| Finance expense | 6b | ( | ( |
Gain on investments | 6c | ||
Profit before taxation | |||
Income tax expense | 7 | ( | ( |
Profit for the period | |||
| Profit attributable to: | |||
Equity shareholders of the parent | |||
Basic earnings per share (cents) | 8 | ||
Diluted earnings per share (cents) | 8 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30TH JUNE 2024
| Year to | ||
Year to | 30th June 2023 | |
30th June 2024 | (restated) | |
$’000 | $’000 | |
Profit for the period | ||
| Other comprehensive income: Items that may be subsequently | ||
| reclassified to profit or loss if specific conditions are met | ||
Foreign currency translation differences | ( | |
Total comprehensive income for the period | ||
| Attributable to: | ||
Equity shareholders of the parent |
106 City of London Investment Group PLC Annual Report 2023/2024
Financial statements
CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION
30TH JUNE 2024
City of London Investment Group PLC Annual Report 2023/2024 107
Group | Company | ||||||
30th June 2023 | 30th June 2022 | 30th June 2023 | 30th June 2022 | ||||
30th June 2024 | (restated) | (restated) | 30th June 2024 | (restated) | (restated) | ||
Note | $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | |
| Non-current assets | |||||||
Property and equipment | 9 | 227 | 280 | 302 | |||
| Right-of-use assets | 10 | 925 | 1,152 | 1,321 | |||
| Intangible assets | 11 | 20 | 30 | 22 | |||
| Other financial assets | 12 | 134,283 | 139,150 | 133,328 | |||
Deferred tax asset | 13 | 313 | 332 | 272 | |||
135,768 | 140,944 | 135,245 | |||||
| Current assets | |||||||
Trade and other receivables | 14 | 3,654 | 3,860 | 6,309 | |||
| Current tax receivable | 2,426 | 981 | 1,379 | ||||
Cash and cash equivalents | 15 | 20,381 | 14,779 | 8,427 | |||
26,461 | 19,620 | 16,115 | |||||
| Current liabilities | |||||||
| Trade and other payables | 16 | ( | ( | ( | (5,519) | (5,239) | (4,566) |
| Lease liabilities | 17 | ( | ( | ( | (284) | (44) | (148) |
Current tax payable | ( | ( | – | – | – | ||
| Creditors, amounts falling due | |||||||
within one year | ( | ( | ( | (5,803) | (5,283) | (4,714) | |
Net current assets | 20,658 | 14,337 | 11,401 | ||||
Total assets less current liabilities | 156,426 | 155,281 | 146,646 | ||||
| Non-current liabilities | |||||||
| Lease liabilities | 17 | ( | ( | ( | (964) | (1,257) | (1,250) |
Deferred tax liability | 18 | ( | ( | ( | (256) | (311) | (277) |
Net assets | 155,206 | 153,713 | 145,119 | ||||
| Capital and reserves | |||||||
Share capital | 19 | 644 | 828 | 828 | |||
| Share premium account | 20 | 2,866 | 4,080 | 4,080 | |||
| Merger relief reserve | 19 | 128,984 | 131,188 | 131,188 | |||
| Investment in own shares | 20 | ( | ( | ( | (9,227) | (13,162) | (11,883) |
| Share option reserve | 20 | 187 | 740 | 714 | |||
| EIP share reserve | 20 | 2,046 | 2,246 | 1,943 | |||
| Foreign currency translation reserve | 20 | ( | ( | ( | 466 | (4,732) | (10,866) |
| Capital redemption reserve | 20 | 33 | 52 | 52 | |||
Retained earnings | 20 | 29,207 | 32,473 | 29,063 | |||
| Attributable to: | |||||||
Equity shareholders of the parent | 155,206 | 153,713 | 145,119 | ||||
Total equity | 155,206 | 153,713 | 145,119 |
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 $20,445k (2023: $22,754k).
Strategic reportOverview Shareholder informationGovernance
Financial statements
Financial statements
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
30TH JUNE 2024
Foreign | Total | |||||||||
Share | Merger | Investment | Share | EIP | currency | Capital | attributable | |||
Share | premium | relief | in own | option | share | translation | redemption | Retained | to | |
capital | account | reserve | shares | reserve | reserve | reserve | reserve | earnings | shareholders | |
$’000 | $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | |
As at 30th June 2022 (restated) | ( | ( | ||||||||
Profit for the period | ||||||||||
Other comprehensive income | ||||||||||
Total comprehensive income | ||||||||||
| Transactions with owners | ||||||||||
Share option exercise | ( | |||||||||
Purchase of own shares | ( | ( | ||||||||
Share-based payment | ||||||||||
EIP vesting/forfeiture | ( | |||||||||
Deferred tax on share options | ( | ( | ( | |||||||
Current tax on share options | ||||||||||
Deferred tax on leases | ||||||||||
Dividends paid | ( | ( | ||||||||
Total transactions with owners | ( | ( | ( | |||||||
As at 30th June 2023 (restated) | ( | ( | ||||||||
Effect of change in functional currency | ( | ( | ( | ( | ( | ( | ( | |||
As at 1st July 2023 | ( | ( | ||||||||
Profit for the period | ||||||||||
Other comprehensive income | ( | ( | ||||||||
Total comprehensive income | ( | |||||||||
| Transactions with owners | ||||||||||
Share option exercise | ( | |||||||||
Purchase of own shares | ( | ( | ||||||||
Share-based payment | ||||||||||
EIP vesting/forfeiture | ( | |||||||||
Deferred tax on share options | ( | ( | ( | |||||||
Current tax on share options | ||||||||||
Dividends paid | ( | ( | ||||||||
Total transactions with owners | ( | ( | ( | |||||||
As at 30th June 2024 | ( | ( |
108 City of London Investment Group PLC Annual Report 2023/2024
Financial statements
COMPANY STATEMENT OF CHANGES IN EQUITY
30TH JUNE 2024
City of London Investment Group PLC Annual Report 2023/2024 109
Foreign Total
Share Merger Investment Share EIP currency Capital attributable
Share premium relief in own option share translation redemption Retained to
capital account reserve shares reserve reserve reserve reserve earnings shareholders
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
As at 30th June 2022 (restated) 828 4,080 131,188 (11,883) 714 1,943 (10,866) 52 29,063 145,119
Profit for the period – – – –––––22,754 22,754
Other comprehensive income – – – – – – 6,134 – – 6,134
Total comprehensive income – – – – – – 6,134 – 22,754 28,888
Transactions with owners
Share option exercise – – – 88 (10) – – – 9 87
Purchase of own shares – – – (3,078) – – – – – (3,078)
Share-based payment – – – – 36 1,174 – – – 1,210
EIP vesting/forfeiture – – – 1,711 – (871) – – – 840
Current tax on share options – – – –––––33
Deferred tax on leases – – – –––––2222
Dividends paid – – – –––––(19,378) (19,378)
Total transactions with owners – – – (1,279) 26 303 – – (19,344) (20,294)
As at 30th June 2023 (restated) 828 4,080 131,188 (13,162) 740 2,246 (4,732) 52 32,473 153,713
Effect of change in functional currency (184) (1,214) (2,204) 2,861 (579) (46) 5,200 (19) (3,815) –
As at 1st July 2023 644 2,866 128,984 (10,301) 161 2,200 468 33 28,658 153,713
Profit for the period – – – –––––20,445 20,445
Other comprehensive income – – – –––––––
Total comprehensive income – – – –––––20,445 20,445
Transactions with owners
Share option exercise – – – 154 (9) – – – (1) 144
Purchase of own shares – – – (1,315) – – – – – (1,315)
Share-based payment – – – – 35 1,039 – – – 1,074
EIP vesting/forfeiture – – – 2,235 – (1,193) – – – 1,042
Deferred tax on share options – – – –––––(6)(6)
Foreign exchange translation – – – – – – (2) – – (2)
Dividends paid – – – –––––(19,889) (19,889)
Total transactions with owners – – – 1,074 26 (154) (2) – (19,896) (18,952)
As at 30th June 2024 644 2,866 128,984 (9,227) 187 2,046 466 33 29,207 155,206
Strategic reportOverview Shareholder informationGovernance
Financial statements
Financial statements
CONSOLIDATED AND COMPANY CASH FLOW STATEMENT
FOR THE YEAR ENDED 30TH JUNE 2024
Group | Company | ||||
30th June 2023 | 30th June 2023 | ||||
30th June 2024 | (restated) | 30th June 2024 | (restated) | ||
Note | $’000 | $’000 | $’000 | $’000 | |
| Cash flow from operating activities | |||||
| Cash flow from operating activities | |||||
| Profit before taxation | 1,675 | 776 | |||
| Adjustments for: | |||||
| Depreciation of property and equipment | 9 | 97 | 92 | ||
| Depreciation of right-of-use assets | 10 | 227 | 215 | ||
| Amortisation of intangible assets | 11 | 10 | 8 | ||
| Loss on disposal of property and equipment | – | – | |||
| Share-based payment charge | 3b | 4 | 4 | ||
| EIP-related charge | 581 | 549 | |||
| Gain on investments | 6c | ( | ( | (323) | (115) |
| Interest receivable | 6a | ( | ( | (898) | (252) |
| Interest payable | 6b | 24 | – | ||
| Interest payable on leased assets | 6b | 17 | 92 | ||
Translation adjustments | ( | 149 | 22 | ||
| Cash generated from operations before changes | |||||
| in working capital | 1,563 | 1,391 | |||
| (Increase)/decrease in trade and other receivables | ( | 880 | 3,662 | ||
Increase/(decrease) in trade and other payables | ( | 3,038 | 2,832 | ||
Cash generated from operations | 5,481 | 7,885 | |||
| Interest received | 6a | 898 | 252 | ||
| Interest payable | 6b | ( | (24) | – | |
| Interest paid on leased assets | 6b | ( | ( | (17) | (92) |
Taxation paid | ( | ( | (3,857) | (1,876) | |
Net cash generated from operating activities | 2,481 | 6,169 | |||
| Cash flow from investing activities | |||||
Dividends received from subsidiaries | 19,150 | 22,131 | |||
| Purchase of property and equipment and intangibles | 9/11 | ( | ( | (44) | (74) |
| Purchase of non-current financial assets | 12 | ( | ( | – | – |
Proceeds from sale of current financial assets | 5,203 | – | |||
Net cash generated from/(used in) investing activities | ( | 24,309 | 22,057 | ||
| Cash flow from financing activities | |||||
Ordinary dividends paid | 21 | ( | ( | (19,889) | (19,378) |
| Purchase of own shares by employee share option trust | ( | ( | (1,315) | (3,078) | |
| Proceeds from sale of own shares by employee benefit trust | 154 | 88 | |||
Payment of lease liabilities | 17(c) | ( | ( | (48) | (149) |
Net cash used in financing activities | ( | ( | (21,098) | (22,517) | |
Net increase/(decrease) in cash and cash equivalents | ( | 5,692 | 5,709 | ||
| Cash and cash equivalents at start of period | 14,779 | 8,427 | |||
| Cash held in funds | – | – | |||
Effect of exchange rate changes | ( | (90) | 643 | ||
Cash and cash equivalents at end of period | 20,381 | 14,779 |
110 City of London Investment Group PLC Annual Report 2023/2024
Financial statements
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30TH JUNE 2024
City of London Investment Group PLC Annual Report 2023/2024 111
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Financial statements
Financial statements
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
112 City of London Investment Group PLC Annual Report 2023/2024
1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Controlling | Country of | ||
Subsidiary undertakings | Activity | interest | incorporation |
City of London Investment Management Company Limited | Management of funds | 100% | UK |
City of London US Investments Limited | Holding company | 100% | UK |
Karpus Management Inc. (aka – Karpus Investment Management) | Management of funds | 100% | USA |
Global Equity CEF Fund | Delaware Statutory Trust Fund | 100% | USA |
City of London Investment Management (Singapore) PTE Ltd | Management of funds | Singapore |
City of London Latin America Limited | Dormant Company | UK |
Financial statements
City of London Investment Group PLC Annual Report 2023/2024 113
1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
| Country of | ||
Subsidiary undertakings | Activity | incorporation |
City of London US Services Limited | Service company | UK |
City of London Investment Management Company Limited | 77 Gracechurch Street, London EC3V 0AS, UK | |
| City of London US Investments Limited | ||
| City of London US Services Limited | ||
| City of London Latin America Limited | ||
City of London Investment Management Company (Singapore) PTE Ltd | 20 Collyer Quay, #10-04, Singapore 049319 | |
Karpus Management Inc. | 183 | Sully’s Trail, Pittsford, New York 14534, USA |
Global Equity CEF Fund | 4005 | Kennett Pike, Suite 250, Greenville, DE 19807, USA |
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NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
114 City of London Investment Group PLC Annual Report 2023/2024
Financial statements
City of London Investment Group PLC Annual Report 2023/2024 115
1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
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NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
116 City of London Investment Group PLC Annual Report 2023/2024
Financial statements
City of London Investment Group PLC Annual Report 2023/2024 117
1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
2. SEGMENTAL ANALYSIS
The Directors consider that the Group has only one reportable segment, namely asset management, and hence only analysis by
geographical location is given.
| Europe | ||||||
USA | Canada | UK | (ex UK) | Other | Total | |
$’000 | $’000 | $’000 | $’000 | $’000 | $’000 | |
| Year to 30th June 2024 | ||||||
Gross fee income | 66,885 | 1,465 | – | 1,001 | 102 | 69,453 |
| Non-current assets: | ||||||
| Property and equipment | 901 | – | 205 | – | 22 | 1,128 |
| Right-of-use assets | 4,030 | – | 925 | – | 121 | 5,076 |
Intangible assets | 122,833 | – | 20 | – | – | 122,853 |
| Year to 30th June 2023 (restated) | ||||||
Gross fee income | 66,110 | 1,414 | – | 1,121 | 80 | 68,725 |
| Non-current assets: | ||||||
Property and equipment | 641 | – | 264 | – | 16 | 921 |
Right-of-use assets | 1,319 | – | 1,152 | – | 53 | 2,524 |
Intangible assets | 128,432 | – | 30 | – | – | 128,462 |
3. EMPLOYEES
Group | Company | |||
Year to | Year to | Year to | Year to | |
| (a) Average number of persons employed | 30th June 2024 | 30th June 2023 | 30th June 2024 | 30th June 2023 |
by the Group in the period: | Number | Number | Number | Number |
Investment Management/Research | 39 | 40 | 18 | 19 |
| Performance and Attribution | 5 | 5 | – | – |
| Business Development/Marketing | 16 | 14 | 1 | 1 |
| Client Services | 15 | 15 | 2 | 2 |
Administration, Accounts and Settlements | 43 | 42 | 10 | 8 |
118 | 116 | 31 | 30 |
Strategic reportOverview Shareholder informationGovernance Financial statements
3. EMPLOYEES CONTINUED
| Group Company | ||||
Year to | Year to | |||
Year to | 30th June 2023 | Year to | 30th June 2023 | |
| (b) The aggregate employment costs of | 30th June 2024 | (restated) | 30th June 2024 | (restated) |
employees and Directors were: | $’000 | $’000 | $’000 | $’000 |
Wages and salaries | 14,881 | 13,934 | 4,611 | 4,298 |
| Profit sharing payments | 9,588 | 9,458 | 3,062 | 3,086 |
| Social security costs | 1,956 | 1,857 | 1,046 | 999 |
| Defined contribution pension costs | 2,110 | 1,892 | 511 | 458 |
| EIP-related charges | 1,438 | 1,464 | 631 | 683 |
| Share options charge | 35 | 37 | 4 | 4 |
Other staff costs | 917 | 1,120 | 259 | 281 |
30,925 | 29,762 | 10,124 | 9,809 |
4. DIRECTORS
Year to
Year to | 30th June 2023 | |
30th June 2024 | (restated) | |
Directors’ emoluments comprise: | $’000 | $’000 |
Emoluments (excluding pension contributions and awards under share option schemes) | 1,141 | 1,214 |
| EIP participation | – | 23 |
| Pension contributions | 36 | 36 |
| EIP-related charges | 33 | 48 |
| Gains on exercise of share options | 12 | – |
Other taxable benefits ^ | 28 | 26 |
1,250 | 1,347 | |
Social security costs | 35 | 40 |
1,285 | 1,387 |
Year to | Year to | |
30th June 2024 | 30th June 2023 | |
Number | Number | |
Number of Directors on whose behalf pension contributions were paid during the period | 1 | 1 |
Number of Directors who exercised share options during the period | 1 | – |
| Year to | ||
Year to | 30th June 2023 | |
30th June 2024 | (restated) | |
Highest paid Director’s remuneration: | $’000 | $’000 |
Emoluments (excluding pension contributions and awards under share option schemes) | 791 | 792 |
| EIP participation | – | 23 |
| Pension contributions | 36 | 36 |
| EIP-related charges | 33 | 48 |
| Gains on exercise of share options | 12 | – |
Other taxable benefits ^ | 10 | 12 |
882 | 911 | |
Social security costs | 21 | 22 |
903 | 933 |
(^) The regulations require us to disclose taxable benefits. Health insurance is offered to all employees but is not considered a taxable benefit in all countries.
For comparative purposes, we have based our calculations on all health insurance costs incurred, whether a taxable benefit or not.
Further details relating to Directors’ emoluments can be found in the Remuneration report on pages 70 to 90.
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
118 City of London Investment Group PLC Annual Report 2023/2024
Financial statements
City of London Investment Group PLC Annual Report 2023/2024 119
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| Year to | ||
Year to | 30th June 2023 | |
30th June 2024 | (restated) | |
The operating profit is arrived at after charging: | $’000 | $’000 |
Depreciation of property and equipment | 293 | 274 |
| Depreciation of right-of-use assets | 672 | 553 |
| Amortisation of intangible assets | 5,609 | 5,607 |
| Auditor’s remuneration: | ||
| – Statutory audit of the parent and consolidated financial statements | 149 | 132 |
| – Statutory audit of subsidiaries of the Company | 134 | 100 |
| – Audit related assurance services | 62 | 36 |
Short-term lease expense | 21 | 18 |
| Year to | ||
Year to | 30th June 2023 | |
30th June 2024 | (restated) | |
$’000 | $’000 | |
Interest on cash and cash equivalents | 1,460 | 700 |
| Year to | ||
Year to | 30th June 2023 | |
30th June 2024 | (restated) | |
$’000 | $’000 | |
Interest payable on lease liabilities | 357 | 164 |
Interest payable other | 24 | – |
381 | 164 |
| Year to | ||
Year to | 30th June 2023 | |
30th June 2024 | (restated) | |
$’000 | $’000 | |
Unrealised gain on investments | 180 | 305 |
Realised gain on investments | 871 | 384 |
1,051 | 689 |
Financial statements
7. TAX CHARGE ON PROFIT ON ORDINARY ACTIVITIES
| Year to | ||
Year to | 30th June 2023 | |
30th June 2024 | (restated) | |
(a) Analysis of tax charge on ordinary activities: | $’000 | $’000 |
| Current tax: | ||
| UK corporation tax at 25% (2023: 19%) based on the profit for the period | 5,417 | 4,225 |
| Double taxation relief | (887) | (1,074) |
| Change in tax rate to 25% | – | 157 |
Adjustments in respect of prior years | (7) | 106 |
UK tax total | 4,523 | 3,414 |
| Foreign tax | 2,453 | 3,188 |
Adjustments in respect of prior years | (123) | (600) |
Foreign tax total | 2,330 | 2,588 |
Total current tax charge | 6,853 | 6,002 |
| Deferred tax: | ||
UK – origination and reversal of temporary differences | 68 | (5) |
Foreign – origination and reversal of temporary differences | (1,415) | (1,367) |
Total deferred tax credit | (1,347) | (1,372) |
Total tax charge in income statement | 5,506 | 4,630 |
(b) Factors affecting tax charge for the current period:
The tax charge on profit for the year is different to that resulting from applying the standard rate of corporation tax in the UK – 25%
(prior year – 19%). The differences are explained below:
| Year to | ||
Year to | 30th June 2023 | |
30th June 2024 | (restated) | |
$’000 | $’000 | |
Profit on ordinary activities before tax | 22,621 | 22,127 |
| Tax on profit from ordinary activities at the standard rate | (5,655) | (4,204) |
| Effects of: | ||
| Unrelieved foreign tax at rates different to those of the UK | (166) | (1,051) |
| Income ineligible for tax | 75 | 315 |
| Capital allowances greater than/(less than) depreciation | 98 | (26) |
| Prior period adjustments | 129 | 494 |
| Change in tax rate to 25% | – | (157) |
Other | 13 | (1) |
Total tax charge in income statement | (5,506) | (4,630) |
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
120 City of London Investment Group PLC Annual Report 2023/2024
Financial statements
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8. EARNINGS PER SHARE
The calculation of earnings per share is based on the profit for the period attributable to the equity shareholders of the parent
divided by the weighted average number of ordinary shares in issue for the period ended 30th June 2024.
As set out in the Directors’ report on page 92 the Employee Benefit Trust held 1,829,637 (2023: 1,989,355) ordinary shares in
the Company as at 30th June 2024. The Trustees of the Trust have waived all rights to dividends associated with these shares.
In accordance with IAS 33 Earnings per share, the ordinary shares held by the Employee Benefit Trust have been excluded from
the calculation of the weighted average number of ordinary shares in issue.
The calculation of diluted earnings per share is based on the profit for the period attributable to the equity shareholders of the
parent divided by the diluted weighted average number of ordinary shares in issue for the period ended 30th June 2024.
Reported earnings per share
Year to
Year to | 30th June 2023 | |
30th June 2024 | (restated) | |
$’000 | $’000 | |
Profit attributable to the equity shareholders of the parent for basic earnings | 17,115 | 17,497 |
Number of shares | Number of shares | |
Issued ordinary shares as at 1st July | 50,679,095 | 50,679,095 |
Effect of own shares held by EBT | (1,875,340) | (1,842,182) |
| Weighted average shares in issue | 48,803,755 | 48,836,913 |
Effect of movements in share options and EIP awards | 978,997 | 892,422 |
Diluted weighted average shares in issue | 49,782,752 | 49,729,335 |
| Basic earnings per share (cents) | 35.1 | 35.8 |
Diluted earnings per share (cents) | 34.4 | 35.2 |
| Basic earnings per share (pence)** | 27.8 | 30.2 |
Diluted earnings per share (pence)** | 27.3 | 29.6 |
** Average exchange rate for the year used to convert from cents to pence.
Underlying earnings per share*
Underlying earnings per share is based on the underlying profit after tax*, where profit after tax is adjusted for gain on investments,
amortisation of intangibles and their relating tax impact.
Underlying profit for calculating underlying earnings per share
| Year to | ||
Year to | 30th June 2023 | |
30th June 2024 | (restated) | |
$’000 | $’000 | |
Profit before tax | 22,621 | 22,127 |
| Add back/(deduct): | ||
| – (Gain) on investments | (1,051) | (689) |
– Amortisation on acquired intangibles | 5,599 | 5,599 |
| Underlying profit before tax | 27,169 | 27,037 |
| Tax expense as per the consolidated income statement | (5,506) | (4,630) |
| Tax effect of fair value adjustments | 261 | 145 |
Unwinding of deferred tax liability | (1,344) | (1,344) |
Underlying profit after tax for the calculation of underlying earnings per share | 20,580 | 21,208 |
| Underlying earnings per share (cents) | 42.2 | 43.4 |
Underlying diluted earnings per share (cents) | 41.3 | 42.6 |
| Underlying earnings per share (pence)** | 33.5 | 36.5 |
Underlying diluted earnings per share (pence)** | 32.8 | 35.8 |
* This is an Alternative Performance Measure (APM). Please refer to the Financial Review for more details on APMs.
** Average exchange rate for the year used to convert from cents to pence.
Financial statements
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
122 City of London Investment Group PLC Annual Report 2023/2024
9. PROPERTY AND EQUIPMENT
30th June 2024 | 30th June 2023 (restated) | ||||||||
Computer | Short | Computer | Short | ||||||
Furniture | and | leasehold | Furniture | and | leasehold | ||||
and | telephone | improve- | and | telephone | improve- | ||||
equipment | equipment | ments | Total | equipment | equipment | ments | Total | ||
$’000 | $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | ||
| Group | |||||||||
| Cost | |||||||||
At start of period | 491 | 2,021 | 877 | 3,389 | 490 | 2,216 | 788 | 3,494 | |
| Currency translation | – | – | – | – | (24) | (142) | (104) | (270) | |
| Additions | 62 | 210 | 228 | 500 | 161 | 207 | 195 | 563 | |
Disposals | – | (53) | (439) | (492) | (136) | (260) | (2) | (398) | |
At close of period | 553 | 2,178 | 666 | 3,397 | 491 | 2,021 | 877 | 3,389 | |
| Accumulated depreciation | |||||||||
At start of period | 209 | 1,677 | 582 | 2,468 | 354 | 1,944 | 574 | 2,872 | |
| Currency translation | – | – | – | – | (37) | (152) | (91) | (280) | |
| Charge for the period | 52 | 201 | 40 | 293 | 28 | 145 | 101 | 274 | |
Disposals | – | (52) | (440) | (492) | (136) | (260) | (2) | (398) | |
At close of period | 261 | 1,826 | 182 | 2,269 | 209 | 1,677 | 582 | 2,468 | |
| Net book value | |||||||||
At close of period | 292 | 352 | 484 | 1,128 | 282 | 344 | 295 | 921 | |
| Company | |||||||||
| Cost | |||||||||
At start of period | 284 | 650 | 171 | 1,105 | 272 | 624 | 163 | 1,059 | |
| Additions | 3 | 37 | 4 | 44 | – | 56 | 3 | 59 | |
| Disposals | – | (53) | – | (53) | – | (57) | (2) | (59) | |
Currency translation | – | – | – | – 12 | 27 | 7 | 46 | ||
At close of period | 287 | 634 | 175 | 1,096 | 284 | 650 | 171 | 1,105 | |
| Accumulated depreciation | |||||||||
At start of period | 175 | 547 | 103 | 825 | 147 | 522 | 89 | 758 | |
| Charge for the period | 23 | 60 | 14 | 97 | 21 | 59 | 12 | 92 | |
| Disposals | – | (53) | – | (53) | – | (57) | (2) | (59) | |
Currency translation | – | – | – | – | 7 | 23 | 4 | 34 | |
At close of period | 198 | 554 | 117 | 869 | 175 | 547 | 103 | 825 | |
| Net book value | |||||||||
At close of period | 89 | 80 | 58 | 227 | 109 | 103 | 68 | 280 | |
Financial statements
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30th June 2024 | 30th June 2023 (restated) | |||||
Office | Office | |||||
Property | equipment | Property | equipment | |||
leases | leases | Total | leases | leases | Total | |
$’000 | $’000 | $’000 | $’000 | $’000 | $’000 | |
| Group | ||||||
| Cost | ||||||
At start of period | 4,474 | 82 | 4,556 | 4,181 | 82 | 4,263 |
| Currency translation | – | – | – | 293 | – | 293 |
| Lease additions | 3,012 | 89 | 3,101 | – | – | – |
| Lease modifications | 150 | – | 150 | – | – | – |
Disposals | (239) | (82) | (321) | – | – | – |
At close of period | 7,397 | 89 | 7,486 | 4,474 | 82 | 4,556 |
| Depreciation charge | ||||||
At start of period | 1,969 | 63 | 2,032 | 1,280 | 38 | 1,318 |
| Currency translation | – | – | – | 161 | – | 161 |
| Charge for the period | 649 | 23 | 672 | 528 | 25 | 553 |
Disposals | (214) | (80) | (294) | – | – | – |
At close of period | 2,404 | 6 | 2,410 | 1,969 | 63 | 2,032 |
| Net book value | ||||||
At close of period | 4,993 | 83 | 5,076 | 2,505 | 19 | 2,524 |
| Company | ||||||
| Cost | ||||||
At start of period | 2,058 | – | 2,058 | 1,973 | – | 1,973 |
Currency translation | – | – | – | 85 | – | 85 |
At close of period | 2,058 | – | 2,058 | 2,058 | – | 2,058 |
| Depreciation charge | ||||||
At start of period | 906 | – | 906 | 652 | – | 652 |
| Charge for the period | 227 | – | 227 | 215 | – | 215 |
Currency translation | – | – | – | 39 | – | 39 |
At close of period | 1,133 | – | 1,133 | 906 | – | 906 |
| Net book value | ||||||
At close of period | 925 | – | 925 | 1,152 | – | 1,152 |
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
124 City of London Investment Group PLC Annual Report 2023/2024
30th June 2024 | 30th June 2023 | ||||||
| Direct | |||||||
customer | Distribution | Long-term | Total | ||||
Goodwill | relationships | channels | Trade name | software | Total | (restated) | |
$’000 | $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | |
| Group | |||||||
| Cost | |||||||
At start of period | 90,072 | 46,052 | 6,301 | 1,405 | 914 | 144,744 | 144,692 |
| Additions | – | – | – | – | – | – | 15 |
Currency translation | – | – | – | – | – | – | 37 |
At close of period | 90,072 | 46,052 | 6,301 | 1,405 | 914 | 144,744 | 144,744 |
| Amortisation charge | |||||||
At start of period | – | 12,665 | 2,476 | 257 | 884 | 16,282 | 10,639 |
| Currency translation | – | – | – | – | – | – | 36 |
Charge for the period | – | 4,605 | 900 | 94 | 10 | 5,609 | 5,607 |
At close of period | – | 17,270 | 3,376 | 351 | 894 | 21,891 | 16,282 |
| Net book value: | |||||||
At close of period | 90,072 | 28,782 | 2,925 | 1,054 | 20 | 122,853 | 128,462 |
| Company | |||||||
| Cost | |||||||
At start of period | – | – | – | – | 112 | 112 | 93 |
| Additions | – | – | – | – | – | – | 15 |
Currency translation | – | – | – | – | – | – | 4 |
At close of period | – | – | – | – | 112 | 112 | 112 |
| Amortisation charge | |||||||
At start of period | – | – | – | – | 82 | 82 | 71 |
| Charge for the period | – | – | – | – | 10 | 10 | 8 |
Currency translation | – | – | – | – | – | – | 3 |
At close of period | – | – | – | – | 92 | 92 | 82 |
Net book value | – | – | – | – | 20 | 20 | 30 |
Financial statements
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11. INTANGIBLE ASSETS CONTINUED
| 2024 | ||
From | To | |
EV / December LYM FuM – (USD Mn) | 3.5% | 2.5% |
EV / CY 2024 FuM – (USD Mn) | 3.5% | 2.6% |
EV / CY 2023 EBITDA Post Bonus | 10.0x | 7.4x |
EV / CY 2024 EBITDA Post Bonus | 9.0x | 6.4x |
30th June 2024 | 30th June 2023 (restated) | |||||
Unlisted | Listed | Unlisted | Listed | |||
investments | investments | Total | investments | investments | Total | |
Group | $’000 | $’000 | $’000 | $’000 | $’000 | $’000 |
At start of period | 2,431 | 7,589 | 10,020 | 2,214 | 6,840 | 9,054 |
| Additions | – | 4,594 | 4,594 | – | 1,356 | 1,356 |
| Disposals | (2,537) | (7,091) | (9,628) | – | (973) | (973) |
Fair value gains | 156 | 608 | 764 | 217 | 366 | 583 |
At close of period | 50 | 5,700 | 5,750 | 2,431 | 7,589 | 10,020 |
30th June 2024 | 30th June 2023 (restated) | |||||
Investment in | Investment in | |||||
Unlisted | subsidiary | Unlisted | subsidiary | |||
investments | undertakings | Total | investments | undertakings | Total | |
Company | $’000 | $’000 | $’000 | $’000 | $’000 | $’000 |
At start of period | 2,431 | 136,719 | 139,150 | 2,214 | 131,114 | 133,328 |
| Additions | – | 50 | 50 | – | 214 | 214 |
| Disposals | (2,537) | (2,536) | (5,073) | – | (13) | (13) |
Fair value gains | 156 | – | 156 | 217 | 5,404 | 5,621 |
At close of period | 50 | 134,233 | 134,283 | 2,431 | 136,719 | 139,150 |
Share-based payments | Other | Total | |
Group | $’000 | $’000 | $’000 |
At 30th June 2022 (restated) | 444 | 37 | 481 |
Other movements* | – | 683 | 683 |
Revised 30th June 2022 | 444 | 720 | 1,164 |
Credited/(charged) to income statement | 61 | (36) | 25 |
Charged to equity | (17) | – | (17) |
Currency translation | 5 | (1) | 4 |
Other movements* | – | (14) | (14) |
At 30th June 2023 (restated) | 493 | 669 | 1,162 |
Credited to income statement | 23 | 724 | 747 |
Charged to equity | (30) | – | (30) |
At 30th June 2024 | 486 | 1,393 | 1,879 |
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
126 City of London Investment Group PLC Annual Report 2023/2024
Financial statements
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13. DEFERRED TAX ASSET CONTINUED
Share-based payments | Other | Total | |
Company | $’000 | $’000 | $’000 |
At 30th June 2022 (restated) | 6 | – | 6 |
Other movements* | – | 266 | 266 |
Revised 30th June 2022 | 6 | 266 | 272 |
Credited to income statement | 1 | – | 1 |
Other movements* | – | 59 | 59 |
At 30th June 2023 (restated) | 7 | 325 | 332 |
Credited/(charged) to income statement | 1 | (14) | (13) |
Charged to equity | (6) | – | (6) |
At 30th June 2024 | 2 | 311 | 313 |
Group | Company | |||
30th June 2023 | 30th June 2023 | |||
30th June 2024 | (restated) | 30th June 2024 | (restated) | |
$’000 | $’000 | $’000 | $’000 | |
Trade receivables | 310 | 108 | – | – |
| Accrued income* | 6,131 | 5,834 | – | – |
| Amounts owed by Group undertakings | – | – | 3,102 | 3,155 |
| Other receivables | 246 | 416 | 148 | 235 |
Prepayments | 1,693 | 1,732 | 404 | 470 |
8,380 | 8,090 | 3,654 | 3,860 |
15. CASH AND CASH EQUIVALENTS
Group | Company | |||
30th June 2023 | 30th June 2023 | |||
30th June 2024 | (restated) | 30th June 2024 | (restated) | |
$’000 | $’000 | $’000 | $’000 | |
Cash held with banks | 1,689 | 2,697 | 140 | 495 |
| Short-term notice deposits | 1,288 | 10,633 | – | 1,905 |
| Short-term treasuries/money market funds | 30,761 | 15,162 | 20,241 | 12,379 |
Cash held by consolidated entities | – | 77 | – | – |
33,738 | 28,569 | 20,381 | 14,779 |
Group | Company | |||
30th June 2023 | 30th June 2023 | |||
30th June 2024 | (restated) | 30th June 2024 | (restated) | |
$’000 | $’000 | $’000 | $’000 | |
Trade payables | 2 | 22 | – | – |
| Sundry payables | 129 | 90 | 5 | – |
| Amounts owed to Group undertakings | – | – | 1,803 | 1,145 |
| Other taxation and social security | 196 | 201 | 180 | 179 |
Accruals and deferred income* | 10,105 | 10,420 | 3,531 | 3,915 |
10,432 | 10,733 | 5,519 | 5,239 |
Group | Company | |||
30th June 2023 | 30th June 2023 | |||
30th June 2024 | (restated) | 30th June 2024 | (restated) | |
a) Lease liabilities | $’000 | $’000 | $’000 | $’000 |
| Lease liabilities | ||||
| Current | 526 | 251 | 284 | 44 |
Non-current | 5,207 | 2,498 | 964 | 1,257 |
5,733 | 2,749 | 1,248 | 1,301 |
Group | Company | |||
Present value | Undiscounted | Present value | Undiscounted | |
of minimum | minimum | of minimum | minimum | |
lease payments | lease payments | lease payments | lease payments | |
b) Lease maturities | $’000 | $’000 | $’000 | $’000 |
Within one year | 526 | 916 | 284 | 336 |
| In the second to fifth year inclusive | 2,075 | 3,248 | 964 | 947 |
After five years | 3,132 | 4,361 | – | – |
5,733 | 8,525 | 1,248 | 1,283 |
Group | Company | |
c) Liabilities from financing activities | $’000 | $’000 |
Lease liabilities as at 30th June 2022 (restated) | 3,170 | 1,398 |
Cash flows | (476) | (149) |
Currency translations | 55 | 52 |
Lease liabilities as at 30th June 2023 (restated) | 2,749 | 1,301 |
Cash flows | (231) | (48) |
New and modified leases | 3,224 | – |
Currency translations | (9) | (5) |
Lease liabilities as at 30th June 2024 | 5,733 | 1,248 |
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
128 City of London Investment Group PLC Annual Report 2023/2024
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Right-of-use assets | Intangible assets | Other financial assets | Total | |
Group | $’000 | $’000 | $’000 | $’000 |
At 30th June 2022 (restated) | 22 | 10,550 | (48) | 10,524 |
Other movements* | 634 | – | – | 634 |
Revised 30th June 2022 | 656 | 10,550 | (48) | 11,158 |
Credited to income | (4) | (1,340) | – | (1,344) |
Charged to equity – currency translation | 1 | (4) | (2) | (5) |
Other movements* | (20) | – | – | (20) |
At 30th June 2023 (restated) | 633 | 9,206 | (50) | 9,789 |
Debited to income | 2 | (1,343) | 106 | (1,235) |
Other movements* | 608 | – | – | 608 |
At 30th June 2024 | 1,243 | 7,863 | 56 | 9,162 |
Right-of-use assets | Intangible assets | Other financial assets | Total | |
Company | $’000 | $’000 | $’000 | $’000 |
At 30th June 2022 (restated) | 22 | – | 4 | 26 |
Other movements* | 251 | – | – | 251 |
Revised 30th June 2022 | 273 | – | 4 | 277 |
Credited to income | (4) | – | – | (4) |
Charged to equity – currency translation | 1 | – | – | 1 |
Other movements* | 37 | – | – | 37 |
At 30th June 2023 (restated) | 307 | – | 4 | 311 |
Debited to income | 2 | – | – | 2 |
Other movements* | (57) | – | – | (57) |
At 30th June 2024 | 252 | – | 4 | 256 |
Share capital | Merger relief reserve | |
Group and Company | $’000 | $’000 |
At start and end of period 50,679,095 ordinary shares of 1p each | 644 | 128,984 |
21. DIVIDEND
| 30th June 2023 | ||
30th June 2024 | (restated) | |
$’000 | $’000 | |
| Dividends paid: | ||
| Interim dividend of 11p per share (2023: 11p) | 6,840 | 6,472 |
30th June 2023 of 22p per share (2022: 22p) | 13,049 | 12,906 |
19,889 | 19,378 |
A final dividend of 22 p per share (gross amount payable $14,098k; net amount payable $13,589k*) has been proposed, payable on
7th November 2024, subject to shareholder approval, to shareholders who are on the register of members on 4th October 2024.
*Difference between gross and net amounts is due to shares held at EBT that do not receive dividend. Year end fx rate 1.2645 was used to translate the
proposed amounts from sterling to US dollars.
22. SHARE-BASED PAYMENTS
(a) The estimated fair value of options which fall under IFRS 2, and the inputs used in the Black-Scholes model to calculate those
values at fair value, 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 |
31/03/2022 | 31/03/2032 | 6.5 | 1.4678% | 4.86 | 4.795 | 35.7981% | 6.79% | 0.8037 | 18,500 |
The expected share price volatility is based on historical volatility over the past 6.5 years. The expected life of the options has been
assumed to be 6.5 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.
(b) All share options granted are equity settled. The number and weighted average exercise price of share options for each of the
following groups is as follows:
Year to 30th June 2024 | Year to 30th June 2023 | |||
Weighted average | Weighted average | |||
exercise price | exercise price | |||
Number | £ | Number | £ | |
Outstanding at the beginning of the period | 290,900 | 4.15 | 328,750 | 4.11 |
| Granted during the period | – | – | – | – |
| Forfeited during the period | 5,000 | 5.04 | 14,500 | 5.04 |
| Exercised during the period | 47,400 | 2.55 | 23,350 | 3.04 |
| Outstanding at the end of the period | 238,500 | 5.07 | 290,900 | 4.15 |
| Exercisable at the end of the period | 220,000 | 4.43 | 136,400 | 3.18 |
| The weighted average share price at the date of exercise | ||||
for share options exercised during the period was | 3.11 | 4.34 |
The total share-based payment for the period is a charge of $35k (2023: charge of $37k). For outstanding share options the exercise
price ranged between £3.52 and £5.04 (2023: between £2.55 and £5.04), and their weighted average contractual life was 4.7 years
(2023: 4.9 years).
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
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22. SHARE-BASED PAYMENTS CONTINUED
(c) The Group introduced an Employee Incentive Plan (EIP) in 2016/17 which is open to employees of all Group companies and
Executive Director, details of the EIP can be found in the Directors’ Remuneration Report.
Awards are made to participating employees over shares under the EIP where they have duly waived an element of their annual
profit-share before the required waiver date.
Awards under the EIP are made up of two elements: Deferred Shares and Bonus Shares. The Deferred Shares represent the waived
profit-share and the Bonus Shares represent the additional award made by the Company as a reward for participating in the EIP.
The Deferred Shares are treated as cash settled and the full cost is recognised in the income statement in the year of service. The Bonus Shares
are treated as equity settled and as such their estimated fair value is spread over the period from the time the employee elects to participate, to
when the award vests (i.e. no longer forfeitable). This will be re-calculated when the awards are granted and any amount under or over the
estimated value will be recognised through the income statement at that point in time. The estimated fair value of the Bonus Share awards is
based on the cash equivalent at the time of award.
Estimated | Actual | |||||||||||||
Vesting | charge | charge | 2019/20 | 2020/21 | 2021/22 | 2022/23 | 2023/24 | 2024/25 | 2025/26 | 2026/27 | 2027/28 | 2028/29 | Total | |
date | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s | |
| Awards granted October 2020 | ||||||||||||||
Bonus Shares tranche 1 | Oct-21 | 242 | 241 | 103 | 103 | 35 | – | – | – | – | – | – | – | 241 |
Bonus Shares tranche 2 | Oct-22 | 242 | 240 | 72 | 72 | 72 | 24 | – | – | – | – | – | – | 240 |
Bonus Shares tranche 3 | Oct-23 | 242 | 240 | 55 | 55 | 56 | 56 | 18 | – | – | – | – | – | 240 |
726 | 721 | 230 | 230 | 163 | 80 | 18 | – | – | – | – | – | 721 | ||
| Awards granted October 2021 | ||||||||||||||
Bonus Shares tranche 1 | Oct-22 | 289 | 281 | – | 88 | 154 | 39 | – | – | – | – | – | – | 281 |
Bonus Shares tranche 2 | Oct-23 | 289 | 281 | – | 88 | 81 | 85 | 27 | – | – | – | – | – | 281 |
Bonus Shares tranche 3 | Oct-24 | 289 | 281 | – | 88 | 41 | 65 | 66 | 21 | – | – | – | – | 281 |
Bonus Shares tranche 4 | Oct-25 | 33 | 32 | – | 8 | 4 | 6 | 6 | 6 | 2 | – | – | – | 32 |
Bonus Shares tranche 5 | Oct-26 | 33 | 32 | – | 9 | 2 | 8 | 4 | 4 | 4 | 1 | – | – | 32 |
933 | 907 | – | 281 | 282 | 203 | 103 | 31 | 6 | 1 | – | – | 907 | ||
| Awards granted October 2022 | ||||||||||||||
Bonus Shares tranche 1 | Oct-23 | 360 | 360 | – | – | 112 | 197 | 51 | – | – | – | – | – | 360 |
Bonus Shares tranche 2 | Oct-24 | 360 | 361 | – | – | 113 | 105 | 108 | 35 | – | – | – | – | 361 |
Bonus Shares tranche 3 | Oct-25 | 360 | 361 | – | – | 111 | 55 | 85 | 83 | 27 | – | – | – | 361 |
Bonus Shares tranche 4 | Oct-26 | 52 | 52 | – | – | 13 | 6 | 10 | 10 | 10 | 3 | – | – | 52 |
Bonus Shares tranche 5 | Oct-27 | 52 | 52 | – | – | 14 | 3 | 8 | 8 | 8 | 8 | 3 | – | 52 |
1,184 | 1,186 | – | – | 363 | 366 | 262 | 136 | 45 | 11 | 3 | – | 1,186 | ||
| Awards granted October 2023 | ||||||||||||||
Bonus Shares tranche 1 | Oct-24 | 338 | 313 | – | – | – | 108 | 162 | 43 | – | – | – | – | 313 |
Bonus Shares tranche 2 | Oct-25 | 338 | 312 | – | – | – | 108 | 80 | 93 | 31 | – | – | – | 312 |
Bonus Shares tranche 3 | Oct-26 | 338 | 314 | – | – | – | 108 | 37 | 73 | 73 | 23 | – | – | 314 |
Bonus Shares tranche 4 | Oct-27 | 5 | 4 | – | – | – | 1 | 1 | 1 | – | 1 | – | – | 4 |
Bonus Shares tranche 5 | Oct-28 | 4 | 4 | – | – | – | 1 | – | 1 | – | – | 1 | 1 | 4 |
1,023 | 947 | – | – | – | 326 | 280 | 211 | 104 | 24 | 1 | 1 | 947 | ||
Awards expected to be granted October 2024 | ||||||||||||||
Bonus Shares tranche 1 | Oct-25 | 188 | – | – | – | – | – | 80 | 80 | 28 | – | – | – | 188 |
Bonus Shares tranche 2 | Oct-26 | 188 | – | – | – | – | – | 56 | 56 | 56 | 20 | – | – | 188 |
Bonus Shares tranche 3 | Oct-27 | 188 | – | – | – | – | – | 44 | 44 | 43 | 42 | 15 | – | 188 |
564 | – | – | – | – | – | 180 | 180 | 127 | 62 | 15 | – | 564 | ||
Total EIP charge | 230 | 511 | 808 | 975 | 843 | 558 | 282 | 98 | 19 | 1 | 4,325 |
Note: The amount of the EIP charge is stated in sterling, as at the point of vesting the sterling amount charged will be used to off-set the share awards.
24. FINANCIAL INSTRUMENTS
The Group’s financial assets include cash and cash equivalents, investments and other receivables. Its financial liabilities include
accruals, lease liabilities and other payables. The fair value of the Group’s financial assets and liabilities is materially the same as the
book value.
| Assets at fair | |||
Financial assets | value through | ||
30th June 2024 | at amortised cost | profit or loss | Total |
Assets as per statement of financial position | $’000 | $’000 | $’000 |
Other non-current financial assets | – | 5,750 | 5,750 |
| Trade and other receivables | 6,687 | – | 6,687 |
Cash and cash equivalents | 33,738 | _ | 33,738 |
Total | 40,425 | 5,750 | 46,175 |
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
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24. FINANCIAL INSTRUMENTS CONTINUED
| Liabilities at | |||
Financial | fair value | ||
liabilities at | through | ||
amortised cost | profit or loss | Total | |
Liabilities as per statement of financial position | $’000 | $’000 | $’000 |
Trade and other payables | 10,236 | – | 10,236 |
| Current lease liabilities | 526 | – | 526 |
Non-current lease liabilities | 5,207 | – | 5,207 |
Total | 15,969 | – | 15,969 |
| Assets at fair | |||
Financial assets at | value through | ||
30th June 2023 (restated) | amortised cost | profit or loss | Total |
Assets as per statement of financial position | $’000 | $’000 | $’000 |
Other non-current financial assets | – | 10,020 | 10,020 |
Trade and other receivables | 6,259 | 99 | 6,358 |
Cash and cash equivalents | 28,569 | _ | 28,569 |
Total | 34,828 | 10,119 | 44,947 |
| Liabilities at | |||
Financial | fair value | ||
liabilities at | through | ||
amortised cost | profit or loss | Total | |
Liabilities as per statement of financial position | $’000 | $’000 | $’000 |
Trade and other payables | 10,532 | – | 10,532 |
Current lease liabilities | 251 | – | 251 |
Non-current lease liabilities | 2,498 | – | 2,498 |
Total | 13,281 | – | 13,281 |
| Company Assets at fair | ||||
Investment in | Financial assets at | value through | ||
30th June 2024 | subsidiaries | amortised cost | profit or loss | Total |
Assets as per statement of financial position | $’000 | $’000 | $’000 | $’000 |
Other non-current financial assets | 131,733 | 2,500 | 50 | 134,283 |
| Trade and other receivables | – | 3,250 | – | 3,250 |
Cash and cash equivalents | – | 20,381 | – | 20,381 |
Total | 131,733 | 26,131 | 50 | 157,914 |
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
24. FINANCIAL INSTRUMENTS CONTINUED
| Liabilities at | |||
Financial | fair value | ||
liabilities at | through | ||
amortised cost | profit or loss | Total | |
Liabilities as per statement of financial position | $’000 | $’000 | $’000 |
Trade and other payables | 5,339 | – | 5,339 |
| Current lease liabilities | 284 | – | 284 |
Non-current lease liabilities | 964 | – | 964 |
Total | 6,587 | – | 6,587 |
Financial | Assets at fair | |||
Investment | assets at | value through | ||
30th June 2023 (restated) | in subsidiaries | amortised cost | profit or loss | Total |
Assets as per statement of financial position | $’000 | $’000 | $’000 | $’000 |
Other non-current financial assets | 131,719 | 5,000 | 2,431 | 139,150 |
Trade and other receivables | – | 3,300 | 90 | 3,390 |
Cash and cash equivalents | – | 14,779 | – | 14,779 |
Total | 131,719 | 23,079 | 2,521 | 157,319 |
| Liabilities at | |||
Financial | fair value | ||
liabilities at | through | ||
amortised cost | profit or loss | Total | |
Liabilities as per statement of financial position | $’000 | $’000 | $’000 |
Trade and other payables | 5,060 | – | 5,060 |
Current lease liabilities | 44 | – | 44 |
Non-current lease liabilities | 1,257 | – | 1,257 |
Total | 6,361 | – | 6,361 |
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24. FINANCIAL INSTRUMENTS CONTINUED
Level 1 | Level 2 | Level 3 | Total | |
30th June 2023 | $’000 | $’000 | $’000 | $’000 |
| Financial assets at fair value through profit or loss | ||||
Investment in other non-current financial assets | 5,700 | 50 | – | 5,750 |
Total | 5,700 | 50 | – | 5,750 |
Level 1 | Level 2 | Level 3 | Total | |
30th June 2023 (restated) | $’000 | $’000 | $’000 | $’000 |
| Financial assets at fair value through profit or loss | ||||
Investment in other non-current financial assets | 7,589 | 2,431 | – | 10,020 |
Foreign currency trades | – | 99 | – | 99 |
Total | 7,589 | 2,530 | – | 10,119 |
Level 1 | Level 2 | Level 3 | Total | |
30th June 2024 | $’000 | $’000 | $’000 | $’000 |
Investment in other non-current financial assets | – | 50 | – | 50 |
Forward currency trades | – | – | – | – |
Total | – | 50 | – | 50 |
Level 1 | Level 2 | Level 3 | Total | |
30th June 2023 (restated) | $’000 | $’000 | $’000 | $’000 |
Investment in other non-current financial assets | – | 2,431 | – | 2,431 |
Foreign currency trades | – | 90 | – | 90 |
Total | – | 2,521 | – | 2,521 |
24. FINANCIAL INSTRUMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
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24. FINANCIAL INSTRUMENTS CONTINUED
Contents
Notice of Annual General Meeting
– Notice of Annual General Meeting 139
– Explanatory notes to the Notice of AGM 140
– Further notes 142
Company information IBC
SHAREHOLDER INFORMATION
138 City of London Investment Group PLC Annual Report 2023/2024
City of London Investment Group PLC Annual Report 2023/2024 139
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the AGM of the Company will be held on 28th October 2024 at 77 Gracechurch Street,
London EC3V 0AS at 11:30am to consider and, if thought appropriate, pass the following resolutions, all of which will be
proposed as ordinary resolutions.
Voting
In order to save paper we no longer post hard copy Proxy Forms, and encourage shareholders to vote online by logging on to
www.signalshares.com and following the instructions given. CREST members may also use the CREST electronic proxy
appointment service to submit their proxy appointment in respect of the AGM. Full details regarding voting can be found in
the Further Notes to the Notice of the AGM on pages 142 to 144.
Please note that all Proxy Forms and appointments must be received by 11:30am on Thursday 24th October 2024.
Voting on the business of the meeting will be conducted by way of a poll. The results of voting on the resolutions will be posted
on the Company’s website as soon as practicable after the AGM.
Ordinary Resolutions
Reports and Accounts
1. To receive the Directors’ Report and the accounts of the Company for the year ended 30th June 2024.
Directors’ remuneration report
2. To approve the Directors’ Remuneration Report for the year ended 30th June 2024, set out on pages 75 to 85 of the Annual
Report and Accounts for the year ended 30th June 2024.
Dividend
3. To declare a final dividend of 22p per Ordinary Share of 1p each in the Company (Ordinary Share) for the year ended
30th June 2024, payable on 7th November 2024 to members on the register as at 4th October 2024.
Directors
4. To re-elect Thomas Griffith as a Director.
5. To re-elect Rian Dartnell as a Director.
6. To re-elect Peter Roth as a Director.
7. To elect Sarah Ing as a Director.
Auditors
8. To re-appoint Grant Thornton UK LLP as auditors of the Company, to hold office from the conclusion of this AGM until
the conclusion of the next AGM at which accounts are laid before the Company.
9. To authorise the Audit & Risk Committee of the Company to fix the remuneration of the auditors.
Special Resolutions
Employee benefit trust
10. That the trustees of City of London Employee Benefit Trust (the EBT) be and are hereby authorised to hold ordinary shares
in the capital of the Company from time to time, for and on behalf of the Employee Share Ownership Plan and Employee
Incentive Plan, up to a maximum in aggregate equal to 10% of the issued Ordinary Share capital of the Company.
By order of the Board
Prism Cosec Limited
Company Secretary
23rd September 2024
Registered in England and Wales No. 02685257
Registered Office: 77 Gracechurch Street, London EC3V 0AS
Strategic reportOverview Financial statementsGovernance Shareholder information
EXPLANATORY NOTES TO THE NOTICE OF AGM
140 City of London Investment Group PLC Annual Report 2023/2024
Other information
The notes on the following pages give an explanation
of the proposed resolutions
Resolutions 1 to 9 are proposed as ordinary resolutions. For each
of these resolutions to be passed, more than half of the votes cast
must be in favour of the resolution.
Resolution 10 is proposed as a special resolution. For this
resolution to be passed, at least three-quarters of the votes cast
must be in favour of the resolution.
Resolution 1: Report and Accounts
The first item of business is the receipt by the shareholders of
the Directors’ report and the accounts of the Company for the
year ended 30th June 2024. The Directors’ Report, the
accounts, and the Report of the Company’s auditors on the
accounts and on those parts of the Directors’ remuneration
report that are capable of being audited, are contained within
the 2024 Annual Report.
Resolution 2: Directors’ remuneration report
Resolution 2 seeks shareholder approval of the Directors’
remuneration report for the year ended 30th June 2024, which
is set out on pages 75 to 85 of the 2024 Annual Report. The
Company’s auditors, Grant Thornton UK LLP, have audited
those parts of the Directors’ remuneration report that are
required to be audited and their report may be found on pages
96 to 105 of the 2024 Annual Report. The vote on this
resolution is advisory in nature and Directors’ remuneration is
not conditional on the passing of this resolution.
Resolution 3: Dividend
Resolution 3 seeks approval for a final dividend of 22p per
ordinary share for the year ended 30th June 2024 (Final
Dividend). If approved by shareholders, the Final Dividend
will be paid on 7th November 2024 to all shareholders on the
register at the close of business on 4th October 2024.
Resolutions 4 to 7: Election and Re-election of Directors
The Company’s Articles of Association (Articles) require all
Directors to stand for re-appointment at each AGM. Therefore,
and in line with provision 18 of the UK Corporate Governance
Code, all Directors are submitting themselves for election or
re-election by shareholders with the exception of Tazim Essani
who shall be stepping down as a Director with effect from
the close of the AGM.
The Board carries out a review of the independence of its
Directors on an annual basis. In considering the independence
of the Independent Non-Executive Directors proposed for re-
appointment, the Board has taken into consideration the guidance
provided by the UK Corporate Governance Code. Accordingly,
the Board considers Rian Dartnell, Peter Roth and Sarah Ing to
be independent (the Independent Directors).
On 1st October 2020, the Company completed its merger with
Karpus Management Inc. (KIM). Pursuant to the merger, the
KIM stockholders received shares in the Company capable of
being voted at meetings of the shareholders of the Company.
Due to familial relationships, certain of the KIM stockholders
are regarded as controlling shareholders and form part of a
Controlling Shareholder Group holding, in aggregate, 19,145,215
shares, being 37.8% of the Company’s issued share capital, and
consisting of: George W. Karpus, Karin Popham Anello, Katie
Popham McCormick, William Popham, Alana Heahl, Nicholas
Kuszlyk, Douglas Kuszlyk, Barbara Kuszlyk, Donald Heahl,
Deborah Haehl, Alexandria Haehl, Dianna Kuszlyk and Rodd
Riesenberger (the ‘Controlling Shareholder Group’).
Under the Listing Rules, because the Controlling Shareholder
Group together control in concert more than 30% of the voting
rights of the Company (even though they have agreed to limit
their voting rights as noted in note 21 of Further Notes to
this Notice of AGM), the appointment or re-election of any
Independent Director by shareholders must be approved by a
majority vote of both:
(i) the shareholders of the Company; and
(ii) the independent shareholders of the Company (that is the
shareholders of the Company entitled to vote on the
election of Directors who are not part of the Controlling
Shareholder Group).
Resolutions 5 to 7 are therefore being proposed as ordinary
resolutions which all shareholders may vote on, but in addition
the Company will separately count the number of votes cast by
independent shareholders in favour of the resolution (as a
proportion of the total votes of independent shareholders cast on
the resolution) to determine whether the second threshold referred
to in (ii) above has been met. The Company will announce the
results of the resolutions on this basis as well as announcing the
results of the ordinary resolutions of all shareholders.
Under the Listing Rules, if a resolution to re-appoint an
Independent Director is not approved by a majority vote of both
the shareholders as a whole and the independent shareholders
of the Company at the AGM, a further resolution may be put
forward to be approved by the shareholders as a whole at a
meeting which must be held more than 90 days after the date of
the first vote but within 120 days of the first vote. Accordingly,
if any of resolutions 5 to 7 are not approved by a majority vote
of the Company’s independent shareholders at the AGM, the
relevant Director(s) will be treated as having been re-appointed
only for the period from the date of the AGM until the earlier
of: (i) the close of any general meeting of the Company,
convened for a date more than 90 days after the AGM but
within 120 days of the AGM, to propose a further resolution to
re-appoint him or her; (ii) the date that is 120 days after the
AGM; and (iii) the date of any announcement by the Board
that it does not intend to hold a second vote.
City of London Investment Group PLC Annual Report 2023/2024 141
Strategic reportOverview Financial statementsGovernance Shareholder information
In the event that the Director’s re-appointment is approved by
a majority vote of all shareholders at a second meeting, the
Director will then be re-appointed until the next AGM.
The Company is also required to provide details of:
(i) any previous or existing relationship, transaction or
arrangement between an Independent Director and the
Company, its Directors, any controlling shareholder or
any associate of a controlling shareholder;
(ii) why the Company considers the proposed Independent
Director will be an effective Director;
(iii) how the Company has determined that the proposed
Director is an Independent Director; and
(iv) the process by which the Company has selected each
Independent Director.
This is set out below:
Previous/existing relationships: The Company has received
confirmation from each of the Independent Directors that,
except as disclosed below, there is no existing or previous
relationship, transaction or arrangement that the Independent
Directors have or have had with the Company, its Directors,
any controlling shareholder or any associate of a
controlling shareholder.
Effectiveness: Biographical details of each Director seeking re-
appointment, appear on pages 50 to 51 of this document. The
biographical details also set out each Independent Director’s
experience. The Board considers, following a formal Board
performance evaluation, that each Director seeking re-
appointment continues to contribute effectively and to
demonstrate commitment to his or her role.
This consideration of effectiveness is based on, amongst
other things, the business skills, industry experience, business
model experiences and other contributions individuals may
make (including diversity considerations), both as an
individual and also in contributing to the balance of skills,
knowledge and capability of the Board as a whole, as well as
the commitment of time for Board and Committee meetings
and other duties.
Independence: As previously stated, each Independent Director’s
independence was determined by reference to the relevant
provisions of the 2018 UK Corporate Governance Code. The
Board also considers that each of the Independent Directors is
independent in character and judgement and that there are no
relationships or circumstances which are likely to affect, or
could appear to affect, their judgement.
Selection: For the selection of Independent Directors,
recruitment consultants are engaged to assist in conducting a
thorough search to identify suitable candidates. The selection
process involves, amongst other things, giving the recruitment
consultants a detailed brief of the desired candidate profile
against objective criteria and a rigorous process of interviews
and assessments is then carried out. The Nomination
Committee is responsible in each case for identifying and
nominating, for the approval of the Board, candidates to fill
Board vacancies.
Resolution 8: Re-appointment of auditors
The auditors of a company must be appointed or re-appointed
at each general meeting at which the accounts are laid.
Resolution 8 proposes, on the recommendation of the Audit
& Risk Committee, the re-appointment of Grant Thornton
UK LLP as the Company’s auditors, until the conclusion of
the next general meeting of the Company at which accounts
are laid.
Resolution 9: Remuneration of auditors
This resolution seeks shareholder consent for the Company’s
Audit & Risk Committee to set the remuneration of the auditors.
Resolution 10: Employee Benefit Trust (EBT)
In accordance with the Investment Association’s Principles of
Remuneration, the prior approval of shareholders should be
obtained before 5% or more of the Company’s issued share capital
is held on behalf of the EBT.
Your Board of Directors therefore seeks the approval of
shareholders by ordinary resolution to permit the trustees of the
EBT to hold a maximum of 10% of the Company’s issued
ordinary share capital from time to time. Your Directors believe
that granting such approval would be in the best interests of
shareholders because it will offer the opportunity to align more
closely the interests of employees and shareholders, will extend the
Company’s opportunities with respect to attracting new talent
and will promote confidence in the stability of the Company’s
investment process from a client perspective.
FURTHER NOTES
142 City of London Investment Group PLC Annual Report 2023/2024
Other information
Entitlement to attend and vote
1. Only those shareholders registered in the Company’s register
of members as at close of business on 24th October 2024,
or, if this meeting is adjourned, at close of business on the
day which is two business days prior to the adjourned
meeting, shall be entitled to attend and vote at the meeting.
Changes to the register of members after the relevant
deadline shall be disregarded in determining the rights of
any person to attend and vote at the meeting.
Entry to the AGM, security arrangements and
conduct of proceedings
2. If any shareholders or their proxies intend to attend the
meeting in person, we request that they advise the Company
at least 48 hours in advance of the meeting by email to
investorrelations@citlon.co.uk.
Our website,
www.clig.com, contains the latest information
for shareholders and will be updated before the AGM
should there be any changes to the arrangements set out
above. Where appropriate, we will notify shareholders of the
change via a Regulatory Information Service announcement
as early as is possible before the date of the meeting.
Website giving information regarding the meeting
3. A copy of this Notice of AGM and other information
regarding the meeting, including the information required
by section 311A of the 2006 Act, can be found at
www.clig.com. Shareholders may not use any electronic
address provided in either this Notice of AGM or any
related documents (including the Proxy Form) to
communicate with the Company for any purposes other
than those expressly stated.
Appointment of proxies
4. Hard copy Proxy Forms are not being issued this year to
save paper, however shareholders can request a hard copy
directly from the registrar, Link Group, on +44 (0)371 664
0300. Calls are charged at the standard geographic rate and
will vary by provider. Calls from outside the United
Kingdom will be charged at the applicable international
rate. Lines are open between 09:00 – 17:30, Monday to
Friday, excluding public holidays in England and Wales.
5. Although shareholders are entitled to appoint another person
as their proxy to exercise all or any of their rights to attend and
to speak and vote at the AGM, shareholders are encouraged to
appoint the Chair of the meeting as their proxy. A proxy need
not be a shareholder of the Company. A shareholder may
appoint more than one proxy in relation to the AGM provided
that each proxy is appointed to exercise the rights attached to
a different share or shares held by that shareholder.
The appointment of a proxy does not preclude a shareholder
from attending and voting in person at the AGM.
6. In the case of joint holders, any one holder may vote.
If more than one holder is present at the meeting, only
the vote of the senior will be accepted, seniority being
determined in the order in which the names appear on the
register. A space has been included in the Proxy Form to
allow members to specify the number of shares in respect of
which that proxy is appointed. Shareholders who return the
Proxy Form duly executed but leave this space blank will be
deemed to have appointed the proxy in respect of all of their
shares. Where appointing multiple proxies, shareholders
should indicate on each Proxy Form the name of the proxy
they wish to appoint and the number of Ordinary Shares in
respect of which the proxy is appointed. All Proxy Forms
should be returned together.
Shareholders can also appoint multiple proxies by logging
on to
www.signalshares.com and completing the online
instructions.
7. To appoint a proxy, either: (a) deposit the Proxy Forms, and
any power of attorney or other authority under which it is
executed (or a duly certified copy of any such power or
authority), with the Company’s Registrar, Link Group,
PXS1, Central Square, 29 Wellington Street, Leeds,
LS1 4DL; or (b) lodge the proxy appointment using the
CREST Proxy Voting Service in accordance with note 12
below; or (c) lodge online proxies, in accordance with note
10 below, in each case so as to be received no later than 48
hours (excluding non-working days) before the time of the
holding of the AGM or any adjournment thereof.
Please note that all Proxy Forms and appointments,
whether postal or electronic, must be received by 11:30am
on 24th October 2024.
Corporate representatives
8. A corporation that is a shareholder can appoint one or more
corporate representatives who may exercise, on its behalf, all
its powers as a shareholder provided that no more than one
corporate representative exercises powers over the same
share. Corporate shareholders are encouraged to complete
and return a Proxy Form appointing the Chair of the
meeting to ensure their votes are included in the poll.
Nominated persons
9. The right to appoint a proxy does not apply to persons
whose shares are held on their behalf by another person and
who have been nominated to receive communications from
the Company in accordance with section 146 of the 2006
Act (Nominated Persons). Nominated Persons may have a
right under an agreement with the member who holds the
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 shares as to the
exercise of voting rights.
City of London Investment Group PLC Annual Report 2023/2024 143
Strategic reportOverview Financial statementsGovernance Shareholder information
Voting
10. The website address for online voting is www.signalshares.com.
You will need your Shareholder Reference Number to log in
and follow the instructions to lodge your votes.
You can vote either:
• by logging on to www.signalshares.com and following
the instructions;
• requesting a hard copy form of proxy directly from the
registrars, Link Group, on Tel: 0371 664 0300. Calls are
charged at the standard geographic rate and will vary by
provider. Calls from outside the United Kingdom will
be charged at the applicable international rate. We are
open between 09:00 – 17:30, Monday to Friday,
excluding public holidays in England and Wales; or
• in the case of CREST members, by utilising the
CREST electronic proxy appointment service in
accordance with the procedures set out below.
Total voting rights
11. The total number of issued ordinary shares in the Company
on the Latest Practicable Date, is 50,679,095. As described
in note 21, the Controlling Shareholder Group’s voting is
capped at the lower of (i) the number of shares held by
them; and (ii) 24.99% of the votes cast on any resolution
by all shareholders. Therefore, the total number of votes
exercisable as at the Latest Practicable Date is 42,039,568.
CREST proxy instructions
12. CREST members who wish to appoint a proxy or proxies
through the CREST electronic proxy appointment service
may do so for the meeting (and any adjournments thereof)
by following the procedures described in the CREST
Manual (available via
www.euroclear.com). CREST Personal
Members or other CREST sponsored members (and those
CREST members who have appointed a voting service
provider) should refer to their CREST sponsor or voting
service provider, who will be able to take the appropriate
action on their behalf.
13. In order for a proxy appointment or instruction made by
means of CREST to be valid, the appropriate CREST
message (a CREST Proxy Instruction) must be properly
authenticated in accordance with Euroclear’s specifications
and must contain the information required for such
instructions, as described in the CREST Manual. The
message (regardless of whether it constitutes the
appointment of a proxy or an amendment to the instruction
given to a previously appointed proxy) must, in order to
be valid, be transmitted so as to be received by the issuer’s
agent (ID RA10) by the latest time(s) for receipt of proxy
appointments specified in note 7, above. For this purpose,
the time of receipt will be taken to be the time (as
determined by the timestamp applied to the message by the
CREST Applications Host) from which the issuer’s agent is
able to retrieve the message by enquiry to CREST in the
manner prescribed by CREST. After this time, any change
of instructions to proxies appointed through CREST should
be communicated to the appointee through other means.
14. CREST members (and, where applicable, their CREST
sponsors or voting service providers) should note that
Euroclear does not make available special procedures in
CREST for any particular messages. Normal system timings
and limitations will therefore apply in relation to the input
of CREST Proxy Instructions. It is the responsibility of the
CREST member concerned to take (or, if the CREST
member is a CREST personal member or sponsored
member or has appointed a voting service provider, to
procure that their CREST sponsor or voting service provider
takes) such action as shall be necessary to ensure that a
message is transmitted by means of the CREST system by
any particular time. In this connection, CREST members
(and, where applicable, their CREST sponsors or voting
service providers) are referred, in particular, to those sections
of the CREST Manual concerning practical limitations of
the CREST system and timings.
The Company may treat as invalid a CREST Proxy
Instruction in the circumstances set out in Regulation
35(5)(a) of the Uncertificated Securities Regulations 2001.
Proxy appointment via Proxymity
15. If you are an institutional investor you may be able to
appoint a proxy electronically via the Proxymity platform.
For further information regarding Proxymity, please go to
www.proxymity.io. Your proxy must be lodged 48 hours
prior to the time appointed for the Meeting in order to be
considered valid. Before you can appoint a proxy via this
process you will need to have agreed to Proxymity’s
associated terms and conditions. It is important that you
read these carefully as you will be bound by them and they
will govern the electronic appointment of your proxy.
Automatic poll voting
16. Each of the resolutions to be put to the meeting will be
voted on by poll and not by show of hands. A poll reflects
the number of voting rights exercisable by each member and
so the Board considers it a more democratic method of
voting. Members and proxies will be asked to complete a
poll card to indicate how they wish to cast their votes. These
cards will be collected at the end of the meeting. The results
of the poll will be published on the Company’s website and
notified to the London Stock Exchange once the votes have
been counted and verified.
FURTHER NOTES
CONTINUED
144 City of London Investment Group PLC Annual Report 2023/2024
Other information
Publication of audit concerns
17. Under section 527 of the 2006 Act, members meeting the
threshold requirements set out in that section have the
right to require the Company to publish, on a website,
a statement setting out any matter relating to: (a) the audit
of the Company’s accounts (including the auditors’ report
and the conduct of the audit) that are to be laid before the
AGM; or (b) any circumstance connected with an auditor
of the Company ceasing to hold office since the previous
meeting at which annual accounts and reports were laid in
accordance with section 437 the 2006 Act. The Company
may not require the shareholders requesting any such
website publication to pay its expenses in complying with
sections 527 or 528 of the 2006 Act. Where the Company is
required to place a statement on a website under section 527
of the 2006 Act, it must forward the statement to the
Company’s auditor not later than the time when it makes
the statement available on the website. The business which
may be dealt with at the AGM includes any statement that
the Company has been required under section 527 of the
2006 Act to publish on a website.
Right to request circulation or resolutions
18. Under section 338 and section 338A of the Companies Act
2006, members meeting the threshold requirements in those
sections have the right to require the Company: (i) to give,
to members of the Company entitled to receive notice of the
meeting, notice of a resolution which may properly be
moved and is intended to be moved at the meeting; and/or
(ii) to include in the business to be dealt with at the meeting
any matter (other than a proposed resolution) which may be
properly included in the business. A resolution may properly
be moved or a matter may properly be included in the
business unless (a) (in the case of a resolution only) it
would, if passed, be ineffective (whether by reason of
inconsistency with any enactment or the Company’s
constitution or otherwise), (b) it is defamatory of any
person, or (c) it is frivolous or vexatious. Such a request may
be in hard copy form or in electronic form, must identify
the resolution of which notice is to be given or the matter
to be included in the business, must be authorised by the
person or persons making it, must be received by the
Company not later than the date which is six clear weeks
before the AGM, and (in the case of a matter to be included
in the business only) must be accompanied by a statement
setting out the grounds for the request.
Questions
19. All shareholders will have the opportunity to ask questions
at the AGM.
Documents on display
20. Copies of Directors’ service contracts or letters of
appointment are available for inspection at the Company’s
registered office during usual business hours on any weekday
(Saturdays, Sundays and public holidays excluded) and at
the AGM until the end of the meeting.
Controlling Shareholder Group
21. Following completion of the merger with KIM, the
Company entered into a relationship agreement with the
Controlling Shareholder Group which regulates the ongoing
relationship between the Company and the Controlling
Shareholder Group. The members of the Controlling
Shareholder Group agreed to limit their voting rights at
any shareholder meeting, including the Annual General
Meeting, to the lower of: (i) the number of shares held by
them; and (ii) 24.99% of the votes cast on any resolution
by all shareholders.
Other information
COMPANY INFORMATION
Financial calendar
Ex-dividend date for the final dividend 3rd October 2024
Final dividend record date 4th October 2024
First quarter FuM announcement 21st October 2024
AGM 28th October 2024
Final dividend payment 7th November 2024
Second quarter FuM announcement 20th January 2025
Half year results and interim dividend announcement 25th February 2025
Ex-dividend date for the interim dividend 27th February 2025
Interim dividend record date 28th February 2025
Interim dividend payment 3rd April 2025
Third quarter FuM announcement 22nd April 2025
Year end 30th June 2025
For further information, please visit our website
www.clig.co.uk
Financial adviser and broker
Zeus Capital
10 Old Burlington Street
London
W1S 3AG
Auditors
Grant Thornton UK LLP
30 Finsbury Square
London
EC2A 1AG
Bankers
The Royal Bank of Scotland plc
London City Office
62-63 Threadneedle Street
London
EC2R 8LA
Registrar
Link Group
Central Square
29 Wellington Street
Leeds
LS1 4DL
By phone on 0871 664 0300 from the
UK and +44 371 664 0300 from overseas.
(Calls cost 12 pence per minute plus
network extras. Calls outside the United
Kingdom will be charged at the applicable
international rate. Lines are open from
9am to 5:30pm Mon – Fri, excluding
public holidays in England and Wales).
By email:
enquiries@linkgroup.co.uk
Company registered office
City of London Investment Group PLC
Company registration number
2685257
Company Secretary
Prism Cosec Ltd
enquiries@prismcosec.com
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CLIG office locations
London
77 Gracechurch Street
London
EC3V 0AS
United Kingdom
Telephone: + 44 (0) 207 711 0771
US
17 E. Market Street
West Chester
PA 19382
United States
Telephone: + 1 610 380 2110
Karpus Investment Management
183 Sully’s Trail
Pittsford
NY 14534
Telephone: + 1 866 527 7871
Singapore
20 Collyer Quay
#10-04
Singapore 049319
Telephone: + 65 6236 9136
www.clig.co.uk