LSE: CIN

City of London Group Plc

11 November, 2009

COLG ACHIEVES 24.3P.C. RISE IN NET ASSETS PER SHARE

TO 79.4p IN THE FIRST HALF

� Strength Provided By Diversification Of Net Assets Geographically And Growth Of Portfolio � Pre-Tax Profit Of £240,000 (£22,000) After Prudent Provisions � Portfolio Profits Of £698,000 Taken � Earnings Per Share From Continuing Operations 3.65p (0.07p) � New Top Management Team Appointed ____________________________________________________________________ CHAIRMAN’S STATEMENT I have pleasure presenting my first half yearly report since appointment as your non-executive chairman. David Walton Masters stepped down from the Board on 2 September, having served a year as interim executive chairman; our thanks are due to him for his sterling service. In the ever-changing market conditions, the group has fared well with its mix of overseas investments, convertibles, and cash content, able to cope with the vicissitudes of the times. I am happy to reveal this resulted in net asset value per share rising sharply to 79.4p a 24.3p.c. increase from the 63.9p at the March Year End. Some idea of the strength of the portfolio may be gained from the list of the Top Thirty shares contained at the end of this report. The annual report was cautious in its outlook, highlighting a number of pre-conditions to a sustained recovery, including a return to normal bank lending, stability in the housing and commercial property markets, an increase in corporate capital spending and a pick-up in consumer confidence and spending. Whilst equity markets have bounced back over this period, it is difficult to see convincing evidence of these conditions being fulfilled. We therefore remain cautious of the outlook and our investment decisions reflect this caution. Having said that, major peer economies have now officially moved out of recession and it is likely that the UK economy will follow suit in the next quarter. Our main concern remains the fall in share price of Consolidated Asset Management (Holdings) PLC (formerly ARC Fund Management PLC) which is now delisted. The investment has been

written down to its current market value of £24,000, and is no longer regarded as a core investment. Administrative expenses rose to £205,000 (£105,000), excluding exchange gains of £9,000 (£100,000), mainly for technical reasons, including the full consolidation of the expenses of FTIM now that it has become a subsidiary, and fees that are matched by sundry income. After exceptional costs, earnings per share on continuing operations amounted to 3.65p (0.07p). The available-for-sale financial assets rose from £4,218,000 to £6,464,000 during the first half.

DIVIDEND

Although the results for the first half are very encouraging there remains uncertainty as to the direction of the economy and financial markets. Accordingly, the Board considers that it is premature to recommence dividend payments at the interim stage but is mindful that a return to dividend payments should be a high priority.

INVESTMENT POLICY A formal investment policy was issued to shareholders on 21 September. It is early days to report upon relative performance, but it is interesting to note that over the five year period to 30 September, at 32% total returns (dividends plus growth in net assets per share) have exceeded the benchmark of RPI plus 3% pa, 29%.

PORTFOLIO’S ENERGY SPARKLE The Group’s energy-related holdings continued to add sparkle to its investment portfolio showing in the first half, with realised overall profits of £698,592 boosting the income figures. Acceptance of BG Group’s cash offer for Australian coal seam gas holding Pure Energy brought in £397,552 for a realised gain of £353,826, while a sale of under half the Arrow Energy holding gave a £242,731 profit on proceeds of £273,189. Partial sales of Emerald and Tullow also made useful contributions. Since end-September, sales proceeds of £524,982 have been received from the offer for the balance of the Group’s Emerald Energy holding, to give a realised gain of £450,344. There has also been good news from unlisted investment Hurricane Energy with the announcement in late October of the discovery of “potentially significant quantities of light oil” during its recent drilling of its 100p.c.-owned Lancaster basement prospect in the West Shetlands area. COLG invested £50,000 at £3 a share in the summer of 2008, and in September 2009 the shares changed hands at £10 a share. The company says that subsequent to further fund-raising, in which all shareholders will be eligible to participate, it intends to return to the Lancaster discovery in 2010 for further testing and appraisal. Among other energy-related holdings, in the coal seam gas sector a substantial holding is retained in Arrow Energy (see table below of the Group’s 30 largest holdings), while Whitehaven Coal, a purchase funded from earlier coal seam gas profits, is already showing its paces at over three times cost. During the six months to end-September, new investments included Polo Resources and Strike Oil.

Disposals, principally from takeover offers, in the first half brought in £1.03m, while 20 fresh purchases, across a varied range, from UK financial and industrial shares to mineral stocks, absorbed £1.50m. Several of the newer purchases appear in the table, including a further £104,000 investment in Tertiary Minerals.

TOTAL VOTING RIGHTS The total number of ordinary shares in issue as at the date of this announcement is 10,186,642, with each share carrying the right to one vote. Of these, 375,000 shares are held in Treasury. The total number of voting rights in the Company is therefore 9,811,642. The above figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, COLG under the FSA's Disclosure and Transparency Rules.

NEW MANAGEMENT TEAM The Group are delighted to announce the appointment of a new management team with an excellent record in the City. The team’s brief is to continue development of the Group within the financial services field. The team is headed by Eric Anstee, who becomes COLG’s Chief Executive Officer and John Kent, Executive Director, Corporate Development, who have worked together in three FTSE companies: Eastern Electricity, Energy Group and The Old Mutual Group. Further details on the team are subject of an announcement released earlier today.

OFFER PERIOD On 16 September 2009, the Company was put in an offer period following an unsolicited approach that may or may not lead to an offer being made. Discussions continue and a further announcement on the outcome of these talks will be made as soon as possible.

PROSPECTS Your company is going through a period of change, has a strong balance sheet and management team, and sees an exciting future ahead as it carefully grasps the many opportunities emerging. Henry Lafferty Chairman 11 November, 2009 For further information, please contact: Henry Lafferty, Chairman, City of London Group Plc Tel: 0207 628 5518

Interim Accounts 30/9/2009 Unaudited Interim Results CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 6 mths to 6 mths to Year to 30/9/2009 30/09/2008 31/03/2009 £'000 £'000 £'000Continuing Operations Revenue 72 100 189 Administrative expenses Exchange (loss)/profit 9 100 307 Other (205) (105) (326) (196) (5) (19) Share of loss of associated company - (36) - Profit on sale of investments 698 143 888 Provision for impairment of investments (199) - (745) Other operating income 19 3 4 Restructuring costs (41) (198) (199) Operating profit 353 7 118 Financial income - - - Profit before tax on continuing operations 353 7 118 Income tax on continuing operations - - - Profit after tax on continuing operations 353 7 118 (Loss)/Profit after tax on discontinued operations (113) 15 36 Profit for the period 240 22 154

Other comprehensive income Fair value gains on available-for-sale financial assets net of tax : Revaluation 1,843 (1,436) (1,585) Realised on disposals (569) (66) (356) Adjustment in respect of associate becoming a subsidiary - - 16 Other comprehensive income net of tax 1,274 (1,502) (1,925) Total comprehensive income for the period 1,514 (1,480) (1,771) Profit attributable to: Equity holders 245 22 157 Minority interest (5) - (3) 240 22 154 Earnings per share for profits attributable to equity holders: Continuing operations 3.65p 0.07p 1.19p Discontinued operations (1.15)p 0.15p 0.36p Total 2.50p 0.22p 1.55p

Total comprehensive income attributable to: Equity holders 1,519 (1,480) (1,768) Minority interest (5) - (3) 1,514 (1,480) (1,771)

Unaudited Interim Results CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Asset- Issued Share Retained revaluation Total Capital premium earnings reserve Equity £'000 £'000 £'000 £'000 £'000 Balance at 31 March 2008 1,019 5,107 673 1,471 8,270 Profit for the period - - 22 - 22 Equity dividends paid - - (122) - (122) Investments revalued in the period - - - (1,436) (1,436) Realised on disposal of investments - - - (66) (66) Balance at 30 September 2008 1,019 5,107 573 (31) 6,668 Adjustment associate becoming A subsidiary - - 16 - 16 1,019 5,107 589 (31) 6,684 Profit for the period - - 136 - 136 Purchase of treasury shares - - (110) - (110) Investments revalued in the period - - - (149) (149) Realised on disposal of investments - - - (290) (290) Balance at 31 March 2009 1,019 5,107 615 (470) 6,271 Profit for the period - - 245 - 245 Investments revalued in the period - - - 1,843 1,843 Realised on disposal of investments - - - (569) (569) Balance at 30 September 2009 1,019 5,107 860 804 7,790

Unaudited Interim Results CONDENSED CONSOLIDATED BALANCE SHEET As at As at As at 30/9/09 30/9/08 31/3/09 £'000 £'000 £'000 ASSETS Non-current assets Available for sale financial assets 6,464 5,330 4,218 Investment in associated company - - - Intangible assets 93 49 93 Property, plant and equipment 10 2 4 6,567 5,381 4,315 Current assets Trade and other receivables 74 212 282 Cash and short-term deposits 1,267 1,179 1,797 1,341 1,391 2,079 TOTAL ASSETS 7,908 6,772 6,394 Current liabilities Trade and other payables 114 94 114 Corporation tax - 10 - 114 104 114 NET ASSETS 7,794 6,668 6,280 EQUITY Equity attributable to equity holders of the parent Issued capital 1,019 1,019 1,019 Share premium 5,107 5,107 5,107 Retained earnings 860 573 615 Asset revaluation reserve 804 (31) (470) Total Equity 7,790 6,668 6,271 Minority Interest 4 - 9 TOTAL EQUITY 7,794 6,668 6,280

Unaudited Interim Results CONDENSED CONSOLIDATED CASH FLOW STATEMENT 6 mths to 6 mths to Year to 30/09/09 30/09/08 31/03/09 £'000 £'000 £'000 Net cash used in operating activities (129) (170) (211) Net cash flows (used in)/from investing activities (400) 79 848 Net cash flows used in financing activities (1) (122) (232) Net (decrease)/increase in cash and cash equivalents (530) (213) 405 Cash and cash equivalents at beginning of period 1,797 1,392 1,392 Cash and cash equivalents at end of period 1,267 1,179 1,797

Notes

1. Because the charge for taxation is for a period of less than one year, the provision is based on the best estimate of the effective rate for the full year.

2. The calculation of earnings per Ordinary Share is based on the profit attributable to equity

shareholders of £245,000 (2008: £22,000, 2008/9 full year £157,000) and on the number of shares in issue being the weighted average number of shares in issue during the period (excluding those held in treasury) of 9,811,642 (2008: 10,186,635, 2008/9 full year 10,169,793)

3. These interim financial results do not comprise statutory accounts within the meaning of Section

435 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2009 were approved by the Board of Directors on 9 July 2009 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 237(2) or Section 237(3) of the Companies Act 1985.

4. This condensed consolidated half-yearly financial information for the half-year ended 30

September 2009 has been prepared in accordance with IAS 34 “Interim financial reporting” and should be read in conjunction with the annual financial statements for the year ended 31 March 2009 which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The accounting policies used in preparing the condensed financial information are consistent with those of the annual financial statements for the year ended 31 March 2009 except that IAS 1 (revised) has been adopted. The adoption of IAS 1 has led to certain presentational changes, including the adoption of a single statement of comprehensive income. There have been no changes to the underlying figures as a result of the adoption of the standard. These condensed financial statements have been reviewed by the company’s auditors. A review does not comprise of a full audit.

5. On 15 February 2009, FTIM issued a further 100,000 ordinary shares to the Group increasing the Group's shareholding to 85% of the issued capital and FTIM became a subsidiary of the Group. In the Financial Statements of the year ended 31 March 2009 the change was accounted for in accordance with IFRS 3 "Business Combinations". In the comparative figures in this Interim Statement the change as been accounted for in the second half of the 2008/9 year.

6. The restructuring costs shown on the income statement represent compensation of loss of office

paid to directors and associated costs.

7. The directors did not declare an interim dividend or recommend a final dividend for the year ended 31 March 2009, and have not declared an interim dividend to the year ended 31 March 2010

The interim report, including the financial information contained therein, is the responsibility of, and were approved by the directors on 11 November 2009. The Listing Rules require that accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. There have been no changes to the Group's accounting policies for the period ended 30 September 2009, except as noted above. Each of the persons who is a director confirms that as far as they are aware

- the condensed set of financial statements, which has been prepared in accordance with the applicable set of accounting standards, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the undertakings included in the consolidation as a whole as required by DTR 4.2.4. - the interim management report includes a fair review of the information required to be included, as required by DTR's 4.2.7 and 4.2.8.

Discontinued operations 6 mths to 6 mths to Year to 30/9/09 30/9/08 31/03/09 £'000 £'000 £'000 Revenue - - 16

Administrative expenses (Bad debt provision)

(113)

15 14 Profit on sale of trade - - 8

Profit before tax

(113)

15 38 . Income tax - - (2)

Profit for the year

(113)

15 36 Available for sale financial assets £'000 £'000 £'000 Listed securities - Equity Securities – Australia 1,146 1,277 1,019 - Equity Securities - US and Canada 400 341 318 - Equity Securities – UK 3,146 2,308 1,539 - Debentures - UK 15 15 15Cumulative redeemable preference shares - UK 49 - - Non-cumulative non-redeemable preference shares - UK 727 845 533Convertible loan - UK 225 104 225Equity fund – UK 382 363 294Unlisted securities - equity securities traded on inactive markets 374 77 275 6,464 5,330 4,218

Principal Holdings Book Cost

Holding Security Net of

provision Value £,000 £,000

70,000 Emerald Energy 1p Ordinary 75 522500,300 Munro UK Fund X Class (Income Shares) 500 382160,000 Arrow Energy Ordinary 34 377

7,000,000 Tertiary Minerals Ordinary 308 315240,000 Barclays 14% Var. Sub. Pref 234 30485,808 BAE Systems 2.5p Ordinary 223 299

200,000 Abbey National £1 10.375% NC Pref 213 225 Vatukoula Gold

8,333,333 Ordinary shares ( 108 ( 118100,000 Convertible Loan Notes ( 100 ( 100282,520 FX Capital 210 210200,000 Standard Chartered 7.375% 200 210

RSA Insurance Group 100,000 Ordinary shares ( 122 ( 13350,000 7.375 Prefs ( 43 ( 5025,000 Orient Express Hotels Ordinary 125 180

150,000 Co-Op Bank £1 9.25% NCI Pref 171 174127,127 Phamaxis Ltd Ordinary 159 168

Consolidated Asset Management Holdings 15,875,000 Ordinary shares ( 24 ( 24

125,000 Convertible £1 Loan Notes ( 125 ( 125 Lloyds TSB

100,000 Ordinary Shares ( 66 ( 10350,000 9.25% Preference Shares ( 24 ( 39

100,000 Qinetiq 133 14070,000 Whitehaven Coal 41 14075,000 Bodycote 107 12310,000 Glaxo 119 123

2,199,286 SIPA Resources 83 112 74,401 City Merchants High Yield Trust 93 110 Global Diamonds Convertible Loan 99 99

200,000 Platinum Australia 100 90750 Apple Inc 67 87

5,000,000 Red Rock Resources 50 85429,000 Prime People Ord 1p 216 8240,000 Centennial Coal 43 70

672,600 AFC Energy 105 67856,550 Shield Mining 43 66

4,363 5,452

Directors Remuneration and related party transactions Salary Benefits Fees Compensation Total

for loss of

office Half Year Ended 30 September 2009 DR Walton Masters 29,167 - - 40,000 69,167 H Lafferty - - 11,167 - 11,167 JW Greenhalgh - 568 16,167 - 16,735 29,167 568 27,334 40,000 97,069 Half Year Ended 30 September 2008 DR Walton Masters 6,613 - 3,119 - 9,732 H Lafferty - - 3,500 - 3,500 JW Greenhalgh 24,045 568 - 122,739 147,352 PC Doye 13,128 - - 54,687 67,815 43,786 568 6,619 177,426 228,399 DR Walton Masters became Executive Chairman on 21st August 2008 and resigned 2nd September 2009. Previous to becoming Executive Chairman he was a Non-Executive Director. H Lafferty became Non- Executive Chairman on 2nd September 2009 he was previously a Non-Executive Director. JW Greenhalgh became a Non-Executive Director on 21st August 2008 , previously he had been Chairman and Managing Director. PC Doye resigned his directorship on 31st August 2008. There are no key management personnel other than the Board of Directors, and no other related party transactions.

Independent Review Report to City of London Group PLC Introduction We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2009 which comprises the condensed consolidated statement of comprehensive income, the condensed consolidated statement of changes in equity, the condensed consolidated balance sheet, the condensed consolidated cash flow statement and the related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. Directors’ Responsibilities The half-yearly financial report is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom’s Financial Services Authority. As disclosed in note 4, the annual financial statements of the group are prepared in accordance with IFRS as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting,” as adopted by the European Union. Our Responsibility Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. Scope of Review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2009 is not prepared, in all material aspects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom’s Financial Services Authority. Rees Pollock Chartered Accountants and Registered Auditors London 11 November 2009

Notes: (a) The maintenance and integrity of the City of London Group PLC website is the responsibility of

the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the interim report since it was initially presented on the website.

(b) Legislation in the United Kingdom governing the presentation and dissemination of financial information may differ from legislation in other jurisdictions.