The City of
London
Investment
Trust plc
Annual Report 2025
JHI9224/2025The City of London Investment Trust plc – Annual Report 2025
The City of London Investment Trust plc
Registered as an investment company in England and Wales
Registration Number: 34871
Registered Office: 201 Bishopsgate, London EC2M 3AE
ISIN number/SEDOL: Ordinary Shares: GB0001990497/0199049
London Stock Exchange (TIDM) Code: CTY
Global Intermediary Identification Number (GIIN): S55HF7.99999.SL.826
Legal Entity Identifier (LEI): 213800F3NOTF47H6AO55
Telephone: 020 7818 1818
Email: itsecretariat@janushenderson.com
www.cityinvestmenttrust.com
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59
The City of London Investment Trust plc Annual Report 2021
Strategic Report
Performance 2-3
The City of London Story 4-5
Chairman’s Statement 6-9
Portfolio Snapshot 10-11
Fund Managers’ Report 12-17
Portfolio Information 18-19
Historical Information 20
Business Review 21-36
Governance
Directors and Fund Managers 38-39
Directors’ Report 40-42
Corporate Governance Report 43-49
Audit and Risk Committee Report 50-52
Nominations Committee Report 53-54
Directors’ Remuneration Report 55-58
Statement of Directors’ Responsibilities 59
Independent Auditor’s Report to the
Members ofThe City of London
Investment Trust plc 60-66
Financial Statements
Income Statement 68
Statement of Changes in Equity 69
Statement of Financial Position 70
Notes to the Financial Statements 71-86
Additional Information
Securities Financing Transactions 88-89
Alternative Performance Measures 90-91
Glossary 92
General Shareholder Information 93
Financial Calendar 94
Notice of AGM
Notice of Annual General Meeting 95-102
Corporate Information 103
The City of London Investment Trust plc Annual Report 2025
Corporate Information
Registered Office
201 Bishopsgate
London EC2M 3AE
Service Providers
Alternative Investment Fund Manager
Janus Henderson Fund Management UK Limited
201 Bishopsgate
London EC2M 3AE
Corporate Secretary
Janus Henderson Secretarial Services UK Limited
201 Bishopsgate
London EC2M 3AE
Telephone: 020 7818 1818
Email: itsecretariat@janushenderson.com
Depositary and Custodian
HSBC Bank plc
8 Canada Square
London E14 5HQ
Stockbroker
Cavendish Capital Markets Limited
1 Bartholomew Close
London EC1A 7BL
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Telephone: 0370 889 3296
Email: WebCorres@computershare.co.uk
Investors with share certificates (i.e. not those with
ashareplan or ISA) can check their holding at
www.investorcentre.co.uk
Independent Auditor
Ernst & Young LLP
25 Churchill Place
London E14 5EY
Information Sources
For more information about The City of London Investment
Trustplc, visit the website at www.cityinvestmenttrust.com
This includes factsheets, interviews, current information on
the Company and up-to-date share price and net asset
valuedetails.
To sign up for expert insights about investment trusts,
updates from our fund managers as well as AGMs and
TrustTV episodes, please visit this page:
www.janushenderson.com/en-gb/investor/subscriptions
Follow the Janus Henderson Investment
Trusts on LinkedIn –
Janus Henderson Investment Trusts, UK
Investing
Shares can be purchased in the market via a stockbroker
orthrough share dealing platforms. They can also be held
through share plans, ISAs or pensions and links to various
providers are included on the website.
Potential investors are reminded that the value of investments
and the income from them may go down as well as up and
investors maynot get back the full amount invested. Tax
benefits may varyas a result of statutory changes and their
value will depend onindividual circumstances.
103
The City of London Investment Trust plc Annual Report 2021
Strategic
Report
Objective
The Company’s objective is to provide
long-term growth in income and
capital, principally by investment in
equities listed on the London Stock
Exchange. The Board fully recognises
the importance of dividend income
toshareholders.
1
Performance at 30 June
Total Return Performance for year to 30June
2025
%
2024
%
NAV
1,6
16.8 15.6
Share price
2,6
21.8 11.3
FTSE All-Share Index (Benchmark) 11.2 13.0
AIC UK Equity Income sector
3
12.6 12.6
IA UK Equity Income OEIC sector 10.5 14.6
Total Return Performance for 10 years to 30June 2025 (rebased to 100)
Share Price
NAV (debt at fair value)
FTSE All-Share Index
AIC UK Equity Income sector
4
IA UK Equity Income OEIC sector
80
100
120
140
160
180
200
220
2015 2016 2020 2021 2025202420232022201920182017
Dividend Growth compared with the Retail Price Index (“RPI”) and Consumer Price
Index(“CPI”) for the 10 years to 30 June 2025 (rebased to 100)
100
110
120
130
140
150
160
2015 2016 2020 2021 2025202420232022201920182017
Dividend Growth
RPI
CPI
The City of London Investment Trust plc Annual Report 2025
2
Performance at 30June
NAV per share
6
2025 2024
472.5p 424.3p
NAV per share (debt at fair value)
6
2025 2024
478.1p 429.6p
Share price
2025 2024
487.5p 420.0p
Revenue earnings per share
2025 2024
21.6p 20.9p
Ongoing charge for the year
5,6
2025 2024
0.36% 0.37%
Premium/(discount)
6
2025 2024
3.2% (1.0)%
Premium/(discount) (debt at fair value)
6
2025 2024
2.0% (2.2)%
Gearing at year end
6
2025 2024
5.3% 7.1%
Dividends per share
2025 2024
21.3p 20.6p
Revenue reserve per share
6
2025 2024
9.9p 9.4p
Dividend Yields
0
1
2
3
4
5
6
%
2025 2024
City of London IA UK Equity
Income OEIC sector
AIC UK Equity
Income sector
FTSE All-Share Index
(Benchmark)
4.9
3.7
4.2
4.3
4.4
3.5
4.1
4.1
1 Net asset value (“NAV”) per ordinary share total return with debt at fair value (including dividends reinvested)
2 Share price total return using mid-market closing price
3 Association of Investment Companies (“AIC”) UK Equity Income sector size-weighted average NAV total return (shareholders’ funds)
4 AIC UK Equity Income sector NAV total return calculated on a simple average basis
5 Calculated using the methodology prescribed by the AIC
6 See Alternative Performance Measures on pages 90 and 91
Sources: Morningstar Direct, Janus Henderson, LSEG Datastream
A glossary of terms is on page 92 and an explanation of Alternative Performance Measures is on pages 90 and 91
The City of London Investment Trust plc Annual Report 2025
3
The City of London Story
Photo credit: Keith Osbourne
In 1932, the name was changed to The City of
London Brewery and Investment Trust Limited, parts
of the business having been sold and the proceeds
invested in securities according to investment trust
principles. In 1968, the remaining part of the brewery
business was sold and the Company concentrated
exclusively on investments in securities.
In 1970, the Company appointed Touche, Remnant &
Co. as Investment Manager and in 1982 the name
was changed to TR City of London Trust PLC. In
1992, Touche, Remnant & Co. was acquired by
Henderson Administration Group plc. The name of
the Company was changed to The City of London
Investment Trust plc in October 1997.
The Company has grown significantly with a strong
performance record. Invested mainly in UK equities
with a bias towards large, multinational companies
and a conservative approach to portfolio
composition, it prioritises sustainable income and
long-term capitalgrowth.
A Brief History
The Company (or “City of London”) was formed
as City of London Brewery Company in 1860 to
acquire Calverts, a family brewing business at
Upper Thames Street in the City of London,
registering as a limited company in 1891. The
brewery had extensive interests in the licensed
premises trade.
The Company has increased its dividend every year since
1966 and this 59 year record is the longest of any
investmenttrust.
In May 2017, Henderson Group plc merged with Janus Capital
Group Inc. to become Janus Henderson Group plc which is
quoted on the New York and Australian Stock Exchanges.
City of London: 59 Years of Dividend Growth
Pence per share
0
2
4
6
8
10
12
14
16
18
20
22
66 70 78 82 86 90 94 98 02 06 2510 14 18 22
74
Source: Janus Henderson
Photo credit: The Brewery History Society (custodians)
The City of London Investment Trust plc Annual Report 2025
4
History of income growth
The summer of 1966 was significant for English football fans
as it was the first (and most recent) time that England’s men’s
team won the World Cup. It was also the start of City of
London’s dividend growth track record which has continued
uninterrupted for 59years.
Over that time, an initial investment of:
£1,000 in CITY OF LONDON has
yielded investors
£53,000 in gross
income, assuming that they had not
reinvested their income.
This compares to just
£3,900 earned
from a SAVINGS ACCOUNT, based on
the Bank of England base rate, or
£35,700 paid out by the UK EQUITY
MARKET, as measured by the FTSE All-Share
Index over the same period.
Cumulative income received from £1,000
initialinvestment
£
City of London
Savings Account
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
66 70 78 82 86 90 94 98 02 06 2510 14 18 22
74
Source: Janus Henderson and LSEG Datastream
£
City of London
FTSE All-Share
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
66 70 78 82 86 90 94 98 02 06 2510 14 18 22
74
Source: Janus Henderson and LSEG Datastream
Compounding income and total return
While City of London has provided investors with a growing
source of income, the Company has also delivered strong
long-term capital growth on a total return basis. If investors
had reinvested their dividends back into shares in the
Company over the period since 1966, an initial investment
of£1,000 would be worth £1.1m today. For comparison,
aninvestment of £1,000 in the UK market over 59 years, as
measured by the Datastream UK Market Index (as data for the
FTSE All-Share Index total return only goes back to 1986),
would be worth £0.6m on a comparable total return basis.
This comparison demonstrates a significant outperformance
by City of London over the long term.
City of London total return from a £1,000
initialinvestment
£
City of London Share Price Total Return
UK Market Total Return
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
1,100,000
66 70 78 82 86 90 94 98 02 06 2510 14 18 22
74
£0.6m
£1.1m
Source: Janus Henderson and LSEG Datastream
Reserves
One of the main advantages of investment trusts is their ability
to retain surplus income and create revenue reserves. These
reserves can be added to in profitable years and paid out in the
leaner years, thereby smoothing the level of dividend payments
to shareholders where appropriate. While the investment
process for City of London aims to avoid companies that
cannot sustain dividend payments and the diversification
oftheportfolio limits the impact of any dividend cuts, the use
ofrevenue reserves and the ability, also, to distribute capital
reserves arising from gains realised from investments sold
provide powerful protection for the dividend in challenging
market conditions.
City of London’s dividend growth track record and strong
reserves position should give investors comfort over the
longterm.
The City of London Investment Trust plc Annual Report 2025
5
Sir Laurie Magnus CBE
Chairman
Chairman’s
Statement
“
City of London’s net asset
value total return of 16.8%
outperformed the FTSE
All-Share Indexreturn of
11.2%. The dividend was
increased for the 59th
consecutive year and
fullycovered by earnings
per share.
”
6
Chairman’s
Statement
City of London produced a net asset value (“NAV”) total return
of 16.8%, outperforming the FTSE All-Share Index total return
of 11.2%. City of London’s NAV total return has exceeded the
FTSE All-Share Index over 1, 3, 5 and 10 years. The dividend
was increased for the 59th consecutive year and fully covered
by earnings per share.
The Markets
The inauguration of Donald Trump as President of the USA for
a second term in January 2025 has had a significant impact on
markets. One of his key election campaign pledges was to
increase tariffs substantially in order to return manufacturing
industry to the US and to raise revenue for the government.
During the following months, world equity markets reacted to a
series of announcements imposing tariffs at varying levels on
particular countries depending on the state of negotiation of
specific trade agreements. This made economic data,
including forecasts, difficult to interpret, with evidence of some
stockpiling of goods ahead of tariffs taking effect. The US
dollar was notably weak, reflecting the consequent policy
uncertainty. Despite these upheavals, the strongest area of US
growth continued to be in artificial intelligence and data
centres, with a positive effect on the value of a small number
ofvery large US technology companies.
Another of Mr Trump’s policies was to encourage allies to pay
more for their defence. There was a step change in Europe, with
the UK, Germany and some other European countries
announcing plans to increase significantly their defence spending.
Concerns over increasing government borrowing caused markets
to take a cautious view of the prospects for interest rates,
particularly in the USA and the UK where 10-year government
bond yields gave up earlier declines. The European Central Bank
was more aggressive than the US Federal Reserve and the Bank
of England in cutting lending rates.
In the UK, the new Labour government’s first Budget, which
significantly increased public spending, had a negative effect
on sentiment in the private sector. The rise in the Employer’s
National Insurance tax rate hit hard those companies with
large labour costs, such as in the hospitality sector. The
combination of increasing energy and food prices, together
with wage cost pressure, led to UK CPI inflation rising above
3% again in April 2025. Over the 12 months to 30 June 2025,
the Bank of England responded to the weakness in economic
growth by cutting its base rate to 4.25% through four cuts of
25 basis points.
The UK stock market benefited from a return to confidence in
the UK banks, which delivered good profit and dividend
growth. Life insurance had a good year, as did the tobacco
industry where profits were more resilient than in most other
consumer staples sectors. Takeovers of UK companies by
overseas companies and private equity firms continued at a
pace, demonstrating the value in the UK equity market.
Performance
Earnings and Dividends
City of London’s earnings per share increased by 3.4% to
21.6p. The growth in dividends from the banks sector was
the most important positive contributor for the second year in
a row. Special dividends accounted as revenue amounted to
£0.6 million, down from £1.0 million the previous year and
reflecting the corporate trend for effecting shareholder
distributions through share buybacks rather than
dividendpayments.
City of London’s annual dividend grew by 3.4% to 21.3p,
marginally behind UK CPI inflation of 3.6%. Over ten years,
City of London’s dividend has grown by 39.2%, slightly ahead
of UK CPI inflation of 38.6%. This has been achieved during a
difficult period for real dividend growth, which has included
both the widespread cuts during the Covid pandemic and a
period when, mainly because of rising energy costs, the
annual rate of inflation exceeded 10%. Over 20 years, City of
London’s dividend has risen by 147.1%, compared to UK CPI
inflation of 77.7%. The Board understands the importance of
growing the dividend in real terms through the economic
cycle and over the long term.
Expenses remained under tight control, with City of London’s
ongoing charge ratio, which declined from 0.37% to 0.36%,
remaining very competitive compared with other actively
managed funds. The reduction in the management fee rate
from 0.325% to 0.300%, which the Board agreed with the
Company’s Manager, Janus Henderson, took effect from
1 January 2024 and had a positive effect on the ongoing
charge ratio over the 12 months to 30 June 2025.
The revenue reserve increased by £2.1 million to £48.7 million
with revenue reserves per share rising by 5.3% to 9.9p.
TheBoard is firmly of the view that dividend payments should,
other than in very exceptional circumstances, be covered by
revenue alone and not be supplemented by distribution from
realised capital profits. Whilst the Company’s capital reserves
arising from gains on investments sold (which rose by
£52.1 million and £398.4 million) could help fund dividend
payments, the Board considers that a healthy revenue
reserve surplus provides an important underpinning for
dividend payments drawn from earnings alone. Revenue
reserves can be particularly useful given the varied timing of
dividend receipts throughout the year from investee
companies. They also provide a facility to cover dividend
payments to shareholders at a time of sudden dividend cuts
and surprises, such as occurred during the Covid pandemic.
NAV Total Return
City of London’s NAV total return of 16.8% was 5.6% ahead
ofthe FTSE All-Share Index. Gearing, which contributed
positively by 0.4%, was financed mainly by secured debt.
The£30 million 2.67% secured notes (maturing in 2046) and
the £50 million 2.94% secured notes (maturing in 2049) will
Chairman’s Statement
The City of London Investment Trust plc Annual Report 2025
7
Chairman’s Statement (continued)
provide low-cost debt financing over the next quarter of a
century for investment in equities.
Stock selection contributed by 5.5%. The biggest stock
contributor relative to the FTSE All-Share Index was
AstraZeneca, the pharmaceutical company, despite the
portfolio being underweight compared with the index.
Thesecond biggest contributor was NatWest, the banking
group, followed by Imperial Brands, the tobacco company.
The biggest detractor to relative performance was not owning
Rolls Royce, the aero engine manufacturer. The second
biggest detractor was Merck, the US-listed pharmaceutical
company, followed by not owning Standard Chartered, the
bank. Overall, we benefited from overweight positions in the
banks, financial services and life insurance sectors. More
detail on our investment performance can be found in our
Fund Managers’ Report.
As mentioned in the introduction, City of London’s NAV total
return was ahead of the FTSE All-Share Index over 1, 3, 5 and
10 years. City of London was also ahead of the AIC UK Equity
Income and IA UK Equity Income OEIC sector averages over
1, 3, 5 and 10 years.
Share Issues and Buybacks
During the first half of the year, City of London’s share price
traded close to its net asset value, except briefly in July 2024
when 28,278 shares were bought back into treasury at a small
discount, costing £119,000. From the start of 2025 until
11 April, 2.5 million shares, costing £11.0 million, were bought
back at a small discount, to be held in treasury. Since 11 April
2025 to 30 June 2025, 1.7 million shares, raising proceeds of
£7.9 million, have been sold from treasury at a small premium.
Since 1 July 2025 to 12 September 2025, with the share price
continuing to trade at a premium to NAV, a further 1,950,000
shares have been sold from treasury for total proceeds of
£9.8 million.
The Board’s policy, subject to prevailing market conditions, is
for the Company’s share price to reflect closely its underlying
NAV while smoothing volatility and encouraging a liquid market
in the shares. The ability to do this is underpinned by the
liquidity of the Company’s portfolio, all of which is listed and
readily marketable, in contrast to the position of some other
investment trusts. The Board’s adherence to a policy of issuing
shares at a premium and buying back at a discount over the
last 15 years has enhanced NAV and, of particular note, kept
the prevailing premium and discount to NAV within narrow
bands rarely exceeding 3%.
Environmental, Social and Governance
The Fund Manager and Deputy Fund Manager, supported
by specialists at Janus Henderson, give careful consideration
to environmental, social and governance (“ESG”) related risks
and opportunities when selecting stocks for the portfolio.
TheBoard recognises that these risks are highly relevant
tothe long-term performance of City of London and of
increasing interest to shareholders and commentators.
Ananalysis by MSCI, a company widely used in the review of
ESG factors, shows that City of London’s portfolio as at
30 June 2025 had a lower weighted score for ESG risks than
the FTSE All-Share Index. ESG-related issues receive careful
consideration at each Board meeting, including how
shareholdings have been voted at investee company
meetings. Further details on how the Fund Managers take
ESG consideration into account in their investment decision-
making process are provided on pages 33 to 36.
Annual General Meeting
The 2025 Annual General Meeting (“AGM”) will be held at the
offices of Janus Henderson, 201 Bishopsgate, London EC2M
3AE on Thursday, 30 October at 1.00pm. The meeting will
include a presentation by our Fund Manager, Job Curtis, and
Deputy Fund Manager, David Smith. Any shareholder who is
unable to travel is encouraged to join virtually by Zoom, the
conference software provider. Wetherefore request all
shareholders and particularly those who cannot attend
physically, to submit their votes by proxy to ensure their vote
counts at the AGM.
Outlook
The tariffs imposed by the Trump administration mark a
seismic break from the post Second World War international
trading system. They are likely to raise the costs of imported
goods for US consumers and reduce demand for exporters to
the USA. The UK, whose economy is predominantly services
based, is less exposed to these tariffs than most other
countries, particularly after reaching a trade agreement for a
relatively low, general tariff of 10% with the US government.
The economic outlook for the UK has become more uncertain,
with business confidence dented by the government’s
imposition of higher payroll taxes, more restrictive labour
regulations and the continuing threat of further tax rises in
theAutumn Budget targeted at investors and entrepreneurs.
The deterioration in the overall UK government fiscal position
remains a concern, particularly the implications for interest
rates as the associated government debt issues are absorbed
by international bond markets. With inflation having increased
above 3%, significantly in excess of its 2% target, the Bank of
England faces a difficult choice on further cutting interest
rates following the 25-basis point cut in August 2025 to 4%.
There is a high risk that inflation becomes persistent as
expectations for pay increases, particularly in the public
sector, remain elevated.
City of London is significantly shielded from the fortunes of the
UK domestic economy given that the revenues of many
UK-listed investee companies in its portfolio are predominantly
from overseas. It can reasonably be claimed that UK-listed
shares “offer global growth at a discount”, given their attractive
share price valuations compared with similar overseas
companies. It can also be expected that the flow of takeovers
for UK companies will continue, given this relative valuation
The City of London Investment Trust plc Annual Report 2025
8
Chairman’s Statement (continued)
discount and the open system for corporate control on the
London stock market.
Many UK-listed companies are buying back their own shares,
enhancing earnings per share for remaining shareholders.
Some companies in which City of London has a large
shareholding, such as Shell and Imperial Brands, have bought
back shares and, given the resulting lower number of shares in
issue, grown their dividends at a reduced total cost. The Board
remains confident that the companies in City of London’s
portfolio can help to achieve its objective of long-term growth
in capital and income.
Sir Laurie Magnus CBE
Chairman
16 September 2025
The City of London Investment Trust plc Annual Report 2025
9
Portfolio Snapshot
Forty Largest Investments as at 30 June 2025
The 40 largest investments, representing 82.66% of the portfolio, are listed below.
Position Company Sector
Market value
£’000
Portfolio
%
1 HSBC Banks 118,148 4.81
2 Shell Oil and Gas 109,801 4.47
3 BAE Systems Aerospace and Defence 105,145 4.28
4 RELX Software and Computer Services 100,305 4.08
5 British American Tobacco Tobacco 91,716 3.74
6 NatWest Banks 90,773 3.70
7 Unilever Personal Care, Drug and Grocery Stores 82,950 3.38
8 Imperial Brands Tobacco 82,685 3.37
9 Tesco Personal Care, Drug and Grocery Stores 79,438 3.23
10 Lloyds Banking Banks 72,079 2.94
Top 10 933,040 38.00
11 M&G Investment Banking and Brokerage Services 66,820 2.72
12 AstraZeneca Pharmaceuticals and Biotechnology 62,238 2.53
13 Phoenix Life Insurance 56,874 2.32
14 Aviva Life Insurance 55,710 2.27
15 Barclays Banks 54,466 2.22
16 National Grid Gas, Water and Multi-utilities 53,075 2.16
17 Land Securities Real Estate Investment Trusts 49,494 2.01
18 Legal & General Life Insurance 48,355 1.97
19 Rio Tinto Industrial Metals and Mining 46,271 1.88
20 BP Oil and Gas 46,078 1.88
Top 20 1,472,421 59.96
21 IG Investment Banking and Brokerage Services 42,520 1.73
22 GSK Pharmaceuticals and Biotechnology 41,685 1.70
23 British Land Real Estate Investment Trusts 40,651 1.65
24 Diageo Beverages 35,819 1.46
25 Munich Re Non-life Insurance 34,033 1.39
26 Severn Trent Gas, Water and Multi-utilities 32,796 1.33
27 Reckitt Benckiser Personal Care, Drug and Grocery Stores 29,730 1.21
28 SSE Electricity 27,457 1.12
29 3i Investment Banking and Brokerage Services 27,398 1.12
30 TotalEnergies Oil and Gas 26,777 1.09
Top 30 1,811,287 73.76
31 Schroders Investment Banking and Brokerage Services 26,744 1.09
32 St. James’s Place Investment Banking and Brokerage Services 26,629 1.08
33 Beazley Non-life Insurance 23,375 0.95
34 Deutsche Telekom Telecommunications Service Providers 21,929 0.89
35 Sage Software and Computer Services 21,384 0.87
36 Novartis Pharmaceuticals and Biotechnology 21,153 0.86
37 BT Telecommunications Service Providers 19,859 0.81
38 Nestlé Food Producers 19,510 0.80
39 Swire Pacific General Industrials 19,366 0.79
40 Persimmon Household Goods and Home Construction 18,533 0.76
Top 40 2,029,769 82.66
All classes of equity in any one company are treated as one investment.
The City of London Investment Trust plc Annual Report 2025
10
Portfolio Snapshot (continued)
Classification of Investments and Portfolio Weighting as at 30 June 2025
Portfolio
%
FTSE All-Share
Index
%
Relative to the FTSE
All-Share Index
percentage points
Energy Oil and Gas 7.6 8.7 (1.1)
7.6 8.7 (1.1)
Basic Materials Chemicals 0.6 0.4 0.2
Industrial Metals and Mining 3.2 4.3 (1.1)
Precious Metals and Mining – 0.3 (0.3)
3.8 5.0 (1.2)
Industrials Aerospace and Defence 4.3 6.3 (2.0)
Construction and Materials 0.9 0.5 0.4
Electronic and Electrical Equipment 1.3 1.1 0.2
General Industrials 2.0 0.9 1.1
Industrial Engineering 0.4 0.5 (0.1)
Industrial Support Services 1.5 3.2 (1.7)
Industrial Transportation – 1.0 (1.0)
10.4 13.5 (3.1)
Consumer Staples Beverages 1.9 2.6 (0.7)
Food Producers 1.8 0.6 1.2
Personal Care, Drug and Grocery Stores 7.8 7.5 0.3
Tobacco 7.1 3.6 3.5
18.6 14.3 4.3
Health Care Health Care Providers – – –
Medical Equipment and Services 0.6 0.6 –
Pharmaceuticals and Biotechnology 6.0 10.0 (4.0)
6.6 10.6 (4.0)
Consumer Discretionary Automobiles and Parts 0.3 – 0.3
Consumer Services – 1.7 (1.7)
Household Goods and Home Construction 1.4 1.0 0.4
Leisure Goods – 0.2 (0.2)
Media – 1.2 (1.2)
Personal Goods – 0.2 (0.2)
Retailers 0.7 1.6 (0.9)
Travel and Leisure 0.1 2.0 (1.9)
2.5 7.9 (5.4)
Telecommunications Telecommunications Service Providers 2.7 1.2 1.5
2.7 1.2 1.5
Utilities Electricity 1.1 1.0 0.1
Gas, Water and Multi-utilities 4.0 3.1 0.9
5.1 4.1 1.0
Financials Banks 14.0 13.0 1.0
Closed End Investments – 5.6 (5.6)
Finance and Credit Services – 2.4 (2.4)
Investment Banking and Brokerage Services 9.0 3.5 5.5
Life Insurance 7.0 2.5 4.5
Non-life Insurance 3.5 1.0 2.5
33.5 28.0 5.5
Real Estate Real Estate Investment Trusts 4.2 2.1 2.1
Real Estate Investment and Services – 0.4 (0.4)
4.2 2.5 1.7
Technology Software and Computer Services 5.0 4.2 0.8
5.0 4.2 0.8
Total 100.0 100.0 –
11
The City of London Investment Trust plc Annual Report 2025
“
The portfolio is designed to continue
growing City of London’s dividend
and provide a competitive total
return, including capital appreciation.
We believe the companies in the
portfolio offer good value relative
toour view of the prospects for
earnings and dividend growth.
”
Job Curtis
Fund Manager
David Smith
Deputy Fund Manager
Fund
Managers’
Report
12
Fund Managers’ Report
Investment Background
The UK equity market, as measured by the FTSE All-Share
Index, produced a total return of 11.2% over the 12 months.
InJuly 2024, Labour returned to government after 14 years in
opposition. The Budget in October raised public spending and
increased the Employer’s National Insurance tax rate. In the
US, Donald Trump won the presidential election, returning to
the White House, in January 2025, after a gap of four years.
Inearly April, the new US administration announced tariffs
against its trading partners, which triggered a brief correction
in equity markets across the world. Stocks quickly rebounded
as Washington announced a partial suspension of some of
these levies. In May, the US and UK agreed a trade deal, with
a10% tariff for most British products.
FTSE All-Share Index total return (rebased to 100)
Jun
24
Jul
24
Aug
24
Sep
24
Oct
24
Nov
24
Dec
24
Jan
25
Feb
25
Mar
25
Apr
25
May
25
Jun
25
90
95
100
105
110
115
Source: LSEG Datastream, as at 30 June 2025
During the 12 months, the Bank of England made four 25
basis point cuts in the base rate, taking it from 5.25% to
4.25%. CPI inflation rose above 3% in the first half of 2025, in
response to wage cost pressure and rising utility and food
prices. UK economic growth was weak, except for an uptick
in the first quarter of 2025, when there was increased factory
production ahead of the tariff announcements. The 10-year
gilt yield rose from 4.2% to 4.5% over the 12 months reflecting
the move in inflation to above 3% and concerns about the
sustainability of the UK’s budget deficit. The dividend yield of
the FTSE All-Share Index was 3.5% at the end of June 2025,
below the 10-year gilt yield and base rate, but with equities
offering the prospect of dividend growth.
FTSE All-Share Index dividend yield, UK 10-year gilt
yield and UK base rate
UK Clearing Banks Base Rate
UK 10-year Gilt Yield
FTSE All-Share – dividend yield
Jun
24
%
Jul
24
Aug
24
Sep
24
Oct
24
Nov
24
Dec
24
Jan
25
Feb
25
Mar
25
Apr
25
May
25
Jun
25
3.0
3.5
4.0
4.5
5.0
5.5
6.0
Source: LSEG Datastream, as at 30 June 2025
In 2017 and 2021, when interest rates were exceptionally low,
the Company was able to fix cheap rates of borrowing for long
periods using the following secured notes: £30 million 2.67%
and £50 million 2.94% 2049. In addition, there is also one
secured note with four years until maturity: £35 million 4.53%
2029. These borrowings remained invested in equities
throughout the year. The HSBC borrowing facility, which is
priced off the base rate, was used opportunistically. £41 million
was drawn down at the start of the 12-month period, falling to
£3 million at 31 October 2024, rising to £76 million at
28 February 2025, and falling to £17 million at 30 June 2025.
UK £ vs US$ and Euro
GBP to EUR
GBP to USD
Jun
24
Jul
24
Aug
24
Sep
24
Oct
24
Nov
24
Dec
24
Jan
25
Feb
25
Mar
25
Apr
25
May
25
Jun
25
1.00
1.05
1.10
1.15
1.20
1.25
1.30
1.35
1.40
Source: LSEG Datastream, as at 30 June 2025
The key feature in the foreign exchange market was the
weakening of the US dollar, which reflected investors’
concerns about the size of the US federal budget deficit and
the effect of tariffs on US inflation and growth. Against
sterling, the US dollar fell from an exchange rate of 1.26 to
1.37. Against the Euro, sterling was more stable, with the
exchange rate moving from 1.18 to 1.17.
Brent Crude Oil US$/bbl
Jun
24
Jul
24
Aug
24
Sep
24
Oct
24
Nov
24
Dec
24
Jan
25
Feb
25
Mar
25
Apr
25
May
25
Jun
25
55
60
65
70
75
80
85
90
US$
Source: Bloomberg, as at 30 June 2025
The oil price weakened over the 12 months, falling from $86/
bbl to $68/bbl, despite continuing conflicts in Ukraine and the
Middle East. Russian oil continued to be bought, mainly by
China and India. The Twelve-Day War between Israel and Iran
had little impact on the oil price, with Iran not attempting to
The City of London Investment Trust plc Annual Report 2025
13
Fund Managers’ Report (continued)
interrupt the flow of oil shipments through the Strait of
Hormuz. Overall, the growth in the non-OPEC supply of oil,
including from the US, along with slower growth in demand
from China, put downward pressure on the oil price.
Iron Ore (US$/metric tonne)
Jun
24
Jul
24
Aug
24
US$
Sep
24
Oct
24
Nov
24
Dec
24
Jan
25
Feb
25
Mar
25
Apr
25
May
25
Jun
25
90
95
100
105
110
115
120
Source: LSEG Datastream, as at 30 June 2025
Iron ore, a key ingredient in steel production, had a subdued
year, with prices falling by around 10%. This reflected the
pattern of demand from China, the world’s dominant consumer
of iron ore. In general, base commodities had a weak year.
Performance Review
Estimated performance attribution (relative to
FTSEAll-Share Index total return)
2025
%
2024
%
Stock selection +5.54 +2.64
Gearing +0.39 +0.25
Expenses -0.36 -0.37
Share issues/buybacks +0.02 +0.07
Total +5.59 +2.59
Source: Janus Henderson
The Company produced a net asset value total return of 16.75%,
which was 5.59 percentage points (“pp”) better than the FTSE
All-Share Index total return of 11.16%. Gearing contributed to
performance by 0.39pp and stock selection by 5.54pp.
The biggest stock contributor to performance relative to the FTSE
All-Share Index was AstraZeneca, the pharmaceutical company,
which is held in the portfolio but at a much smaller position size
than the index weight. AstraZeneca and other pharmaceutical
stocks suffered from uncertainty relating to the Trump
administration’s policies on the pricing of medicines in the US.
The second biggest contributor was NatWest, which
benefited from the higher interest rate environment. Hedges of
cash balances, which had been taken out over five years ago
at low interest rates, were rolled over at much higher interest
rates with a favourable effect on NatWest’s profitability. The
third biggest contributor was Imperial Brands, the tobacco
company, where the large share buyback proved accretive for
the remaining shareholders. The fourth biggest contributor
was BAE Systems, which continued to experience strong
demand from many countries for defence equipment given
the external threats. Thefifth biggest contributor was M&G,
the fund manager and life assurer, which announced a
long-term strategic partnership with Japanese insurer Dai-Ichi
Life, which is expected to deliver new business flows for M&G
while Dai-Ichi will also acquire a 15% stake in the company.
In contrast, the biggest stock detractor to performance
relative to the FTSE All-Share Index was not holding Rolls
Royce, the aero engine manufacturer, which started paying
adividend again but at a low level relative to its share price.
The second biggest detractor was Merck, the US-listed
pharmaceutical company, which suffered from the same
adverse sector influences that affected AstraZeneca. The third
and fourth biggest detractors were not holding Standard
Chartered and being underweight HSBC compared with the
index. Both these banks’ operations are predominantly in Asia
Pacific. The fifth biggest detractor was TotalEnergies, which
was adversely affected by the weakness in the oil price.
FTSE 100, 250 and SmallCap Indices total return
(rebased to 100)
FTSE 100 FTSE 250 FTSE SmallCap
Jun
24
Jul
24
Aug
24
Sep
24
Oct
24
Nov
24
Dec
24
Jan
25
Feb
25
Mar
25
Apr
25
May
25
Jun
25
85
90
95
100
105
110
115
Source: LSEG Datastream, as at 30 June 2025
Large companies, as represented by the FTSE 100 Index,
produced a total return of 11.3%, which was slightly ahead of
the 10.2% return for medium-sized companies, as
represented by the FTSE 250 Index. The FTSE Small Cap
return was 11.1%, in line with the FTSE 100 return. The FTSE
100 benefited from its large weighting in banks, which was the
best performing sector. On the other hand, healthcare, which
is also well represented in the FTSE 100, was a drag on
performance.
FTSE 350 Higher and Lower Yield (rebased to 100)
FTSE 350 Lower Yield FTSE 350 Higher Yield
Jun
24
Jul
24
Aug
24
Sep
24
Oct
24
Nov
24
Dec
24
Jan
25
Feb
25
Mar
25
Apr
25
May
25
Jun
25
90
95
100
105
110
115
Source: LSEG Datastream, as at 30 June 2025
The City of London Investment Trust plc Annual Report 2025
14
Fund Managers’ Report (continued)
Higher and lower-yielding shares produced similar returns.
TheFTSE 350 High Yield Index (the higher dividend-yielding
half of the largest 350 companies listed in the UK) returned
11.4%. The FTSE 350 Lower Yield Index (the lower-yielding half
of the largest 350 companies listed in the UK) returned 11.0%.
Portfolio Changes
In our view, UK shares continued to provide better value than
overseas equivalents, possibly due to lack of demand from
domestic institutional and retail investors. UK companies
received a steady flow of takeover bids from overseas
companies and private equity firms, indicating the value on
offer. The proportion of the portfolio invested in overseas-
listed companies was reduced from 10% to 8% over the
12 months and compares with 15% at 30 June 2023. The
portfolio remained predominantly invested in large companies
with the amount invested in FTSE 100 companies increasing
slightly from 78% to 81%, with a decline from 12% to 11% in
medium-sized and small companies.
Distribution of the portfolio as at 30 June 2025
Overseas-listed
companies 8%
Medium-sized and
small UK-listed
companies 11%
Large UK-listed companies
(constituents of the
FTSE 100 Index)
81%
Source: LSEG Datastream, as at 30 June 2025
There were three new holdings bought during the 12 months.
Admiral’s main business is UK motor insurance with 5.7 million
customers. It also has much smaller businesses in UK
household insurance and motor insurance in France, Italy and
Spain. It has a good underwriting record and has consistently
outperformed peers on profit margins. It uses reinsurance to
operate a capital-efficient business model. The purchase of
Admiral was funded by the sale of Direct Line, which was in
the process of being taken over by Aviva, which was already
held in the portfolio.
A new holding was bought in TP ICAP, which is the world’s
largest inter-dealer broker between investment banks in
interest rates, foreign exchange, money market and credit
products. It also has smaller operations in executing trades in
equities, energy and commodities broking and OTC data
analytics. The group converts a high percentage of its profits
into cash and is expected to be a good dividend payer.
A small, new holding was bought in Harbour Energy, the oil
and gas exploration and production company. Harbour’s
production is split 61% gas and 39% oil. Geographically,
production is split 35% Norway, 32% UK and 33% rest of the
world (including Latin America, North Africa and Germany).
Ithas proven oil and gas reserves worth nine years of
production. Harbour’s UK North Sea production is expected
to decline, with little incentive to invest due to high taxation.
This will be offset by growth in other countries where they
operate, which are more welcoming to oil and gas investment.
Also in the oil sector, significant additions were made to the
holding in Shell, which was valued at a large discount to its
US peers, Exxon and Chevron. Shell is engaged in a very
substantial share buyback programme, worth $14 billion over
12 months, some 6% of its market capitalisation. It has a
strong balance sheet, with a low level of debt, and has set out
impressive targets for free cash flow over the next five years.
The increased investment in Shell was partly funded by the
sale of ENI, the international oil company with its head office
inItaly.
Significant additions were made to the holdings in diversified
Real Estate Investment Trusts (“REITs”), Land Securities and
British Land, against a backdrop of evidence of a bottoming of
value for high-quality office and retail property, and growth in
rental income. The two REITs have a similar split between retail
(British Land 36%, Land Securities 32%) and London offices
(British Land 53%, Land Securities 52%). Within retail, there is a
difference, with British Land being mainly invested in retail
warehouses and Land Securities large shopping centres. Within
London offices, British Land’s biggest asset is its 50% stake in
Broadgate, while Land Securities’ main focus is Victoria.
Additions were made to both REITs on discounts to their net
asset values of over 30% and dividend yields of over 6%.
Two other stocks left the portfolio through takeovers. Britvic,
the Pepsi bottler and soft drinks company, was bought by
Carlsberg. Britvic had been in the portfolio since its IPO in
2005, during which time it achieved an annual share price total
return of 13.2%. DS Smith, a paper and packaging company,
was taken over by International Paper of the US. Some of the
proceeds from DS Smith were reinvested in the paper and
packaging sector by adding to the holding in Mondi.
In utilities, the holding in Pennon, the water company covering
Southwest England, was sold with the proceeds reinvested in
additions to the holding in Severn Trent, the water company
covering the West Midlands, which has a superior record.
Thewater sector benefited from the conclusion of the
five-yearly regulatory review, ending the uncertainty over
regulated returns, even though press coverage was still
negative. In electricity, SSE was reduced given the lower yield
after its dividend cut and with some uncertainty regarding the
funding of its ambitious investment plans.
Significant profits were also taken in the successful holding in
3i, the investor in private companies. 3i’s portfolio is dominated
by its holding in Action, the fast-growing European discount
retailer. 3i’s investments performed well but its share price was
standing at a large premium to its NAV and therefore it seemed
prudent to reduce the size of the holding.
Some large profits were also taken in BAE Systems, the
leading defence company, whose shares have performed very
The City of London Investment Trust plc Annual Report 2025
15
Fund Managers’ Report (continued)
well since the start of the war in Ukraine. Less successful
were two small holdings in the consumer discretionary area,
DFS Furniture and Burberry. Against a tough backdrop for
consumer spending for large ticket items, both companies
omitted their dividends and were sold.
Portfolio Outlook
Revenue exposure (%)
United Kingdom 40%
North America 22%
Europe ex UK 13%
Asia Pacific
(inc Japan) 15%
Emerging Markets 10%
Source: Factset, as at 30 June 2025
The portfolio remains well diversified, with 60% of investee
companies’ revenues coming from overseas. As shown in the
chart above, the detailed split is UK 40%, North America
22%, Asia Pacific 15%, Europe ex UK 13% and Emerging
Markets 10%.
Largest sector weightings
Portfolio
%
FTSE
All-Share
Index
%
Relative to
the FTSE
All-Share
Index
%
Banks 14.0 13.0 +1.0
Investment Banking and
Brokerage Services 9.0 3.5 +5.5
Personal Care, Drug and
Grocery Stores 7.8 7.5 +0.3
Oil and Gas 7.6 8.7 -1.1
Tobacco 7.1 3.6 +3.5
Life Insurance 7.0 2.5 +4.5
The largest sector exposure is banks at 14.0% of the portfolio,
one percentage point higher than the FTSE All-Share Index
weight, with four large bank holdings: HSBC (4.8% of the
portfolio), NatWest (3.7%), Lloyds (2.9%) and Barclays (2.2%).
City of London moved overweight in the banks sector at the
start of 2024 for the first time since before the Global Financial
Crisis (“GFC”) of 2007 to 2009. During the years following the
GFC, banks were required by regulators to increase capital,
leading to limited or, in some cases, no dividend payments.
Inaddition, low interest rates and bond yields had an adverse
impact on bank profitability because it was harder to earn the
net interest margin (the difference between what banks pay
on deposits and earn on loans). In addition, balances that
were hedged out (“structural hedges”) earned a lower interest
rate than had historically been the case.
By the start of 2024, it was clear that the banks had sufficient
capital and the mood from politicians was shifting towards
wanting banks to lend more to stimulate economic growth.
Inaddition, the rise in interest rates eased pressure on net
interest margins and the rise in gilt yields meant that the
structural hedges, typically lasting five to seven years, would
sharply improve in profitability as old hedges rolled from lower
to higher yields. A further favourable factor was the
consolidation that took place with Barclays buying Tesco’s
retail banking operations and NatWest buying Sainsburys’.
Webelieve it is right to remain overweight in the sector given
the continuing beneficial effect of the structural hedge, our
view that dividend payout ratios can increase and the
undervaluation compared with previous periods of elevated
banking profitability.
The second largest sector weighting is investment banking
and brokerage services (9.0% of the portfolio), which would
better be described as financial services. This is a strong part
of the UK economy and there are holdings in seven companies
in the portfolio. The three largest holdings are: M&G, the fund
manager and life assurer; IG, the online financial trading
company; and 3i, the investor in private companies. In our
view, M&G (2.7% of the portfolio) offers a compelling dividend
yield backed by the cash flow from its life assurance business
and growth potential from its leading position in private credit.
IG (1.7% of the portfolio) has been reinvigorated by its new
management, with potential to grow its share of the large and
growing markets for investing and trading of financial
instruments. As discussed earlier, some profits have been
taken in 3i (reducing the position over the 12 months from
3.3% to 1.1% of the portfolio) on valuation grounds, but its
holding in Action, the European discount retailer which forms
some 70% of its portfolio, is producing exceptional growth.
A third financial sector, life insurance (7.0% of the portfolio), is
among the largest six sectors in the portfolio. Attractive
dividend yields are offered by Phoenix, Aviva and Legal &
General, which are respectively 2.3%, 2.3% and 2.0% of the
portfolio. Phoenix benefits from the cash generation of its life
insurance operations that are closed to new business and
growth from its workplace pensions and retirement income
units. Aviva is expected to continue to produce competitive
earnings growth and shareholder returns from its general
insurance businesses in the UK and Canada and its life
insurance and pensions operations in the UK. Legal & General
has the leading UK business in bulk pension annuities, which
helps companies de-risk defined benefit pensions and is a
growing market. It is also a leading asset manager and has a
strong record of shareholder returns.
The third and fifth largest sector weightings are both in the
consumer staples area. Personal care, drug and grocery
stores is 7.8% of the portfolio and includes Unilever and
The City of London Investment Trust plc Annual Report 2025
16
Fund Managers’ Report (continued)
Tesco, respectively 3.4% and 3.2% of the portfolio. Unilever,
the consumer products and food group, has been focusing
itsportfolio of businesses in recent years and is set to spin
out its ice cream division. Unilever has over half of its sales in
emerging markets, with long-term growth opportunities for the
type of product it sells. Tesco, the UK’s largest food retailer,
remains price competitive and a substantial cash generator.
The other consumer staples sector among the six largest
sectors is tobacco, which is 7.1% of the portfolio. British
American Tobacco and Imperial Brands, which are
respectively 3.7% and 3.4% of the portfolio, offer attractive
dividend yields supported by strong cash generation.
Oil and gas is the fourth largest sector, but the portfolio’s
weighting of 7.6% is less than the FTSE All-Share Index’s
8.7% weighting. The oil price outlook seems subdued.
Russian oil continues to be bought on world markets, while
Saudi Arabia restricts some of its production and non-OPEC
supply, especially from the US, continues to rise. Chinese
demand for oil is being adversely affected by the rise in sales
of electric vehicles. Shell (4.5% of the portfolio) should be
defensive if the oil price weakens, given its strong balance
sheet and large share buyback programme.
The high dividend yields from companies in sectors, such as
life insurance and tobacco, enables some low-yielding stocks
with exceptional growth potential to be held. BAE Systems
(4.3% of the portfolio) is benefiting from the major uplift in
defence spending, in response both to rising external threats
and pressure from the US on its allies to do more. BAE’s
biggest market is the US followed by the UK and Saudi Arabia.
It also has smaller but fast-growing sales with countries such
as Japan and Australia and in Eastern Europe. As mentioned
earlier in this report, some profits have been taken in BAE after
its very strong share price performance, but we have retained
a large position given the robust outlook for the company. RELX
(4.1%of the portfolio) enjoys structural growth characteristics as
the provider of information and analytics for businesses,
professionals and scientists, with an increasing artificial
intelligence capability incorporated in many of its products.
Overall, the portfolio is designed to continue growing City of
London’s dividend and provide a competitive total return,
including capital appreciation. It has a tilt towards stocks
with above-average dividend yield, but some lower-yielding
stocks are included within the mix for their growth potential.
The portfolio is diversified both by geography and by sector.
We believe the companies in the portfolio offer good value
relative to our view of the prospects for earnings and dividend
growth and compared with equivalents overseas.
Job Curtis David Smith
Fund Manager Deputy Fund Manager
16 September 2025
The City of London Investment Trust plc Annual Report 2025
17
Portfolio Information
Valuation
£’000
ENERGY
Oil and gas
Shell 109,801
BP 46,078
TotalEnergies
1
26,777
Harbour Energy 4,310
186,966
Total Energy 186,966
BASIC MATERIALS
Chemicals
Johnson Matthey 10,751
Victrex 4,656
15,407
Industrial Metals and Mining
Rio Tinto 46,271
Glencore 17,013
Anglo American 16,095
79,379
Total Basic Materials 94,786
INDUSTRIALS
Aerospace and Defence
BAE Systems 105,145
105,145
Construction and Materials
Ibstock 11,988
Marshalls 9,129
21,117
Electronic and Electrical Equipment
IMI 15,181
Morgan Advanced Materials 9,130
Rotork 6,099
XP Power 2,132
32,542
General Industrials
Swire Pacific
1
19,366
Smiths 17,936
Mondi 12,252
49,554
Valuation
£’000
Industrial Engineering
Vesuvius 10,393
10,393
Industrial Support Services
PayPoint 18,422
Inchcape 11,253
Hays 6,060
35,735
Total Industrials 254,486
CONSUMER STAPLES
Beverages
Diageo 35,819
Coca-Cola
1
11,352
47,171
Food Producers
Nestlé
1
19,510
Hilton Food 12,542
Tate & Lyle 10,330
42,382
Personal Care, Drug and Grocery Stores
Unilever 82,950
Tesco 79,438
Reckitt Benckiser 29,730
192,118
Tobacco
British American Tobacco 91,716
Imperial Brands 82,685
174,401
Total Consumer Staples 456,072
HEALTH CARE
Medical Equipment and Services
Smith & Nephew 14,135
14,135
Pharmaceuticals and Biotechnology
AstraZeneca 62,238
GSK 41,685
Novartis
1
21,153
Merck
1
11,833
Johnson & Johnson
1
11,584
148,493
Total Health Care 162,628
Sector Breakdown of Investments as at 30 June 2025
1 Overseas listed
All classes of equity in any one company are treated as one investment
The City of London Investment Trust plc Annual Report 2025
18
Valuation
£’000
CONSUMER DISCRETIONARY
Automobiles and Parts
Dowlais 6,660
6,660
Retailers
Kingfisher 13,227
Halfords 4,644
17,871
Household Goods and Home Construction
Persimmon 18,533
Taylor Wimpey 15,259
33,792
Travel and Leisure
Young & Co’s Brewery 2,451
2,451
Total Consumer Discretionary 60,774
TELECOMMUNICATIONS
Telecommunications Service Providers
Deutsche Telekom
1
21,929
BT 19,859
Verizon Communications
1
12,625
Vodafone 12,445
66,858
Total Telecommunications 66,858
UTILITIES
Electricity
SSE 27,457
27,457
Gas, Water and Multi-utilities
National Grid 53,075
Severn Trent 32,796
United Utilities 13,121
98,992
Total Utilities 126,449
FINANCIALS
Banks
HSBC 118,148
NatWest 90,773
Lloyds Banking 72,079
Barclays 54,466
Nationwide Building Society 10.25% Var
PerpCCDS 8,540
344,006
Valuation
£’000
Investment Banking and BrokerageServices
M&G 66,820
IG 42,520
3i 27,398
Schroders 26,744
St. James’s Place 26,629
Rathbones 15,624
TP ICAP 14,280
220,015
Life Insurance
Phoenix 56,874
Aviva 55,710
Legal & General 48,355
Prudential 10,951
171,890
Non-life Insurance
Munich Re
1
34,033
Beazley 23,375
Admiral 11,445
Hiscox 10,667
Sabre Insurance 7,011
86,531
Total Financials 822,442
REAL ESTATE
Real Estate Investment Trusts
Land Securities 49,494
British Land 40,651
Segro 12,233
102,378
Total Real Estate 102,378
TECHNOLOGY
Software and Computer Services
RELX 100,305
Sage 21,384
121,689
Total Technology 121,689
TOTAL INVESTMENTS 2,455,528
Portfolio Information (continued)
1 Overseas listed
All classes of equity in any one company are treated as one investment
The City of London Investment Trust plc Annual Report 2025
19
Historical Information
1 NAV per share total return with debt at fair value (including dividends reinvested)
2 AIC UK Equity Income sector size-weighted average NAV total return (shareholders’ funds)
3 Share price total return using mid-market closing price
4 NAV per ordinary share is calculated after deducting all prior charges, including the preference and preferred ordinary stocks, at fair value
5 Rebased to 100 at 30 June 2015
Sources: Morningstar Direct, Janus Henderson, LSEG Datastream
A glossary of terms and Alternative Performance Measures are on pages 90 to 92
NAV Total Return Performance to 30 June 2025
1 year
%
3 years
%
5 years
%
10 years
%
NAV per ordinary share
1
16.8 41.0 82.0 100.4
FTSE All-Share Index 11.2 35.5 67.3 92.7
AIC UK Equity Income sector average
2
12.6 37.1 72.7 97.7
IA UK Equity Income OEIC sector average 10.5 31.7 64.3 72.1
Share Price Performance Total Return to 30 June 2025
Value of £1,000 with net income reinvested
1 year
£
3 years
£
5 years
£
10 years
£
The City of London Investment Trust plc
3
1,217.8 1,411.1 1,843.4 1,977.7
FTSE All-Share Index 1,111.6 1,355.0 1,672.7 1,926.5
AIC UK Equity Income sector average 1,163.6 1,368.2 1,745.1 1,974.9
IA UK Equity Income OEIC sector average 1,104.8 1,316.6 1,642.7 1,720.9
Ten-Year NAV and Dividend Record
Year ended
Net asset value per
ordinary share
(p)
4
Net asset value per
ordinary share
(rebased)
5
Net dividends per
ordinary share
(p)
Net dividends per
ordinary share
(rebased)
5
30 June 2015 382.7 100.0 15.3 100.0
30 June 2016 378.6 98.9 15.9 103.9
30 June 2017 416.1 108.7 16.7 109.2
30 June 2018 424.3 110.9 17.7 115.7
30 June 2019 416.3 108.8 18.6 121.6
30 June 2020 338.7 88.5 19.0 124.2
30 June 2021 384.1 100.4 19.1 124.8
30 June 2022 393.5 102.8 19.6 128.1
30 June 2023 391.2 102.2 20.1 131.4
30 June 2024 429.6 112.3 20.6 134.6
30 June 2025 478.1 124.9 21.3 139.2
Historical dividend
0
2
4
6
8
10
12
14
16
18
20
22
2015 2017 2018 2020 202120192016
pence per share
2022 2023 20252024
19.6
20.1
20.6
21.3
15.3
15.9
16.7
17.7
18.6
19.0
19.1
Historical NAV
4
0
50
100
150
200
250
300
350
400
450
2015 2017 2018 2020 202120192016
pence per share
2022 2023 20252024
382.7
378.6
416.1
416.3
338.7
384.1
393.5
391.2
429.6
478.1
424.3
The City of London Investment Trust plc Annual Report 2025
20
Business
Review
21
Our Purpose
The Company’s purpose is to deliver growth in income and
capital to shareholders principally by investing in equities
listed on the London Stock Exchange. We do this by following
a disciplined process of investment, by controlling costs and
using borrowings to enhance returns.
Investment Approach
The Fund Manager, Job Curtis, has managed the
Company’sportfolio since July 1991. He is a member of
JanusHenderson’s Global Equity Income team and is
assisted by David Smith, who has been Deputy Fund Manager
since 2021. They manage the portfolio in a conservative way,
focusing on companies with cash-generative businesses able
to grow their dividends with attractive yields. The portfolio is
well diversified. At 30 June 2025, 81% of the portfolio was in
FTSE 100 companies (compared with 78% at 30 June 2024)
and it remains biased towards UK-listed companies with
international exposure to economies likely to grow faster than
the UK. In order to provide a stable and reliable income, the
portfolio aims to provide shareholders with a dividend yield
between 10% and 30% higher than the FTSE All-Share Index.
The Fund Managers are committed to maintaining a
diversifiedportfolio and have structured the portfolio so
thatshareholders stand to gain in the short term through
quarterly dividends, while long-term capital appreciation
iscentral to stock-pickingdecisions.
Benefits
The Company’s business model offers numerous advantages:
●
it provides investors with access to a professionally and
actively managed portfolio of assets;
●
it offers investors exposure to large UK companies;
●
it enables investors to spread the risks of investing;
●
it enhances returns to investors by operating as an
approved investment trust meaning no capital gains tax
ispaid on the realisation of investments;
●
the closed end structure allows the Fund Managers to take
a longer-term view on investments and remain fully invested;
●
the ability to draw on revenue reserves to support the
payment of dividends;
●
the ability to use leverage to increase returns for investors;
and
●
oversight by a Board of Directors wholly independent of
the Manager.
Any material change to the investment policy would require
the prior approval of both shareholders and the FCA.
Business Model
Investment Objective
The Company’s objective is to provide long-term growth in
income and capital, principally by investment in equities listed
on the London Stock Exchange. The Board fully recognises
the importance of dividend income to shareholders.
Investment Policy
Asset allocation
While the Company will mainly invest in equities, there is the
flexibility to invest in debt securities, such as convertibles,
corporate bonds or government debt, if it is deemed that these
will, at a particular time or for a particular period, enhance the
performance of the Company in the pursuit of its objective.
The Company has a portfolio invested predominantly in
larger companies. Typically at least 60% of the portfolio by
value willbe invested in large companies (being companies
with amarket capitalisation greater than £5 billion at the time
of investment). The remainder of the portfolio will be invested
in medium-sized and small companies. No more than 20%
oftheportfolio will be invested in overseas listed stocks.
There are no set limits on sector exposures, although the
Board regularly monitors the Company’s investments and
the Manager’s investment activity. The Manager primarily
employs a bottom-up value-based investment process to
identify suitable opportunities and pays particular regard
tocash generation and dividends.
The portfolio yield will usually be between 10% and 30%
above the average dividend yield for the UK equity market.
There may be some holdings, selected for their above
average growth potential, which have a dividend yield lower
than the market.
Gearing
The Company will at times utilise limited gearing, both
short and long term, in order to enhance performance.
Other than in exceptional market conditions, gearing will
not exceed 20% of net asset value at the time of draw
down of the relevant borrowings. Up to 10% of the net
assets can be held in cash.
Selling traded options where the underlying share is held in
the portfolio can be used to generate income. Buying and
selling FTSE 100 Index Futures can be used to increase or
reduce gearing.
Diversification
The Company achieves an appropriate spread of investment
risk principally through a broadly diversified portfolio.
The Company will not invest more than 15% of its portfolio
inany single investment on acquisition, nor will it invest
more than 15% of the portfolio in any other UK listed
investment trusts or investment companies.
The City of London Investment Trust plc Annual Report 2025
22
Business Model (continued)
Liquidity and Discount Management
The Board’s policy, subject to prevailing market conditions, is
for the Company’s share price to reflect closely its underlying
NAV, while smoothing volatility and encouraging aliquid
market in the shares. The ability to influence thismeaningfully
over the longer term is, of course, limited. However, the Board
intends, subject always to the overall impact on the portfolio,
the pricing of other investment companies and general market
conditions, to consider issuance and buybacks within a
narrow band relative to NAV. We believe that flexibility is
important and thatit isnot in shareholders’ interests to have a
specific issuance and buyback policy.
Borrowings
The Company has a borrowing facility of £120.0 million
(2024:£120.0 million) with HSBC Bank plc, of which
£17.0 million was drawn at the year end (2024:£41.0 million).
The Company has £114.3 million (2024:£114.3 million)
ofsecured notes in issue (fairvalue of the loan notes:
£85.5million (2024:£83.3 million)).
The level of borrowing at 30 June 2025 was 5.8% of NAV with
debt at par (2024:7.5%) and 4.5% with debt at fair value
(2024:6.2%).
Structure
The Company operates as an investment company. Under this
structure, the Board delegates operational matters to specialist
third-party service providers. Their performance ismonitored
and challenged by an independent Board of Directors which
retains oversight of the Company’s operations.
The framework of delegation provides a cost-effective
mechanism for delivering operations whilst allowing the
Company to take advantage of the capital gains treatment
afforded to investment trusts which are approved under
Section 1158/9 of the Corporation Tax Act 2010 as amended
(“Section 1158/9”). The closed-ended nature of the Company
enables the Fund Managers to take a longer-term view on
investments and supports a fully invested portfolio as the
Company has no redemptions to meet. A significant
advantage over other investment fund structures is the
abilityto use leverage to increase returns for shareholders.
The Board is accountable to shareholders, who have the
ability to remove aDirector from office where they deem it to
be in the interests of the Company.
The Company’s Status
The Company is registered as a public limited company,
founded in 1891, and is an investment company as defined
inSection 833 of the Companies Act 2006. The Company is
not a close company. It operates as an investment trust in
accordance with Section 1158/9 and has obtained approval
from HMRC for its status. The Directors are of the opinion that
the Company has conducted its affairs in compliance with
Section 1158/9 since approval was granted and intends to
continue to do so.
The Company is listed on the Main Market of the London
Stock Exchange under the closed ended investment funds
category and is subject to the UK Listing Rules, Prospectus
Rules and Disclosure Guidance and TransparencyRules
published by the Financial Conduct Authority (“FCA”). The
Company is a member of the Association of Investment
Companies (“AIC”).
The Company and the Board are governed by its Articles of
Association, amendments to which must be approved by
shareholders by way of a special resolution.
The Board
It is the Board’s aim to have an appropriate level of diversity in
the boardroom. The current Directors have a diverse range of
experience andskills, bringing knowledge of investment
management, financial markets, accounting and auditing, risk
and governance, and marketing and distribution expertise to
discussions on the Company’s business. At the date of this
report, the Board comprises five Directors, three of whom
aremale and two are female.
The Nominations Committee considers diversity in its broadest
sense when making recommendations for appointments to the
Board. Diversity is an important consideration, although the
Board’s responsibility is to ensure its overall strength and
effectiveness. Accordingly, any new appointments are made
based on objective criteria and merit. Further details regarding
the Board’s Diversity and Inclusion Policy, including its
approach to recommended diversity targets, can be found in
the Nominations Committee report on pages 53 and 54.
The Company has no employees and, therefore, has nothing
further to report in respect of gender representation within
theCompany. Details of Janus Henderson’s diversity and
inclusion initiatives can be found onits website at
www.janushenderson.com/corporate/who-we-are/
diversity-equity-and-inclusion/.
Values and Culture
Good governance is at the heart of any company and is
integral to ensuring its success and sustainability as a
business. The Board aspires to follow high standards of
governance, with a culture based upon openness, mutual
respect, integrity, constructive challenge and trust. The Board
seeks always to act in the best interests of shareholders,
making themost effective use possible of the diversity of skills
and experience of the Directors. This culture of openness and
constructive challenge extends to the Board’s interaction with
the Manager, being the Company’s most important service
provider. The Board expects the Manager and all of the
Company’s other service providers to hold values which
alignwith the high standards promoted by the Board.
The City of London Investment Trust plc Annual Report 2025
23
The Company has a number of policies and procedures in
place to assist with maintaining a culture of good governance
including those relating to Directors’ conflicts of interest,
Directors’ dealings in the Company’s shares, bribery
(including the acceptance of gifts and hospitality) and tax
evasion. The Board assesses and monitors compliance with
these policies regularly through Board meetings and the
annual review process.
Management Arrangements
The Company is an Alternative Investment Fund (“AIF”) in
accordance with the Alternative Investment Fund Managers
Directive (“AIFMD”). The Board has appointed Janus
Henderson Fund Management UK Limited (“JHFM”) toact as
its Alternative Investment Fund Manager. JHFMdelegates
investment management services to JanusHenderson
Investors UK Limited. Both entities are authorised and
regulated by the FCA, and form part of the Janus Henderson
group of companies. References to “Janus Henderson” or the
“Manager” refer to the services provided to the Company by
the Manager’s group.
The Manager is engaged under the terms of an agreement
dated 15 February 2024. The agreement isterminable by
JHFM on sixmonths’ notice. TheCompany mayterminate the
agreement on three months’ notice withoutcompensation.
Janus Henderson and its subsidiaries also provide
accounting, company secretarial and general administrative
services. Some of the administration and accounting services
are carried out, on behalf of the Manager, by BNP Paribas.
Janus Henderson Secretarial Services UK Limited, a
subsidiary of Janus Henderson Investors, acts as the
Corporate Secretary. It has its own reporting lines and audited
internal controls. There are processes and controls in place to
ensure that there is a clear distinction between the Corporate
Secretary and Janus Henderson, particularly when dealing
with any conflicts or issues between the Company and
JanusHenderson.
Management fee
The Manager is paid a fee of 0.3% per annum of net assets
under management on the first £3 billion of assets and
0.275% on any excess over £3 billion of net assets under
management. Fees are payable quarterly in arrears based on
the level of net assets at the relevant quarter end. There is no
performance fee arrangement in place.
Approval
The Strategic Report, set out on pages 1 to 36, has been
approved by the Board.
On behalf of the Board
Sir Laurie Magnus CBE
Chairman
16 September 2025
Business Model (continued)
The City of London Investment Trust plc Annual Report 2025
24
Measuring our Performance
In order to measure the success of the Company in meeting its objective and to evaluate the performance of the Manager,
theDirectors take into account the following Key Performance Indicators (“KPIs”):
KPI Action
Performance against
marketindices
The Board reviews and compares, at each meeting, the performance of the portfolio as well
asthe NAV and share price for the Company and the FTSE All-Share Index.
During the year under review, the Company’s NAV outperformed the Index by5.6% (2024:2.6%)
on a total return basis. Over five years to 30 June 2025, the Company’s NAV has outperformed
the Index by 14.7%.
Share Price NAV (debt at fair value) FTSE All-Share Index
80
100
120
140
160
180
200
Jun 20
Sep 20
Dec 20
Mar 21
Jun 21
Sep 21
Dec 21
Mar 22
Jun 22
Sep 22
Dec 22
Mar 23
Jun 23
Sep 23
Dec 23
Sep 24
Dec 24
Mar 25
Mar 24
Jun 25
Jun 24
Performance against the
Company’s peer group
The Company is included in the AIC UK Equity Income sector. The Board considers the size-
weighted average NAV total return of its AIC peer group at each Board meeting.
During the year under review, the Company outperformed the peer group by 4.2% (2024:3.0%).
Over five years, the Company has outperformed the peer group by 9.3% (on a size-weighted
average basis).
NAV (debt at fair value) AIC UK Equity Income sector
1
80
100
120
140
160
180
200
Jun 20
Sep 20
Dec 20
Mar 21
Jun 21
Sep 21
Dec 21
Mar 22
Jun 22
Sep 22
Dec 22
Mar 23
Jun 23
Sep 23
Dec 23
Sep 24
Dec 24
Mar 25
Mar 24
Jun 25
Jun 24
Key Performance Indicators
1 AIC UK Equity Income sector NAV total return calculated on a simple average basis (see Glossary on page 92)
The City of London Investment Trust plc Annual Report 2025
25
Key Performance Indicators (continued)
KPI Action
Performance against the
OEIC sector
The Board considers the performance of the portfolio against the IA UK Equity Income OEIC sector.
During the year under review, the Company outperformed the OEIC sector average by 6.3%
(2024:1.0%). Over five years, the Company has outperformed the OEIC sector average by 17.7%.
NAV (debt at fair value) IA UK Equity Income OEIC sectorShare Price
80
100
120
140
160
180
200
Jun 20
Sep 20
Dec 20
Mar 21
Jun 21
Sep 21
Dec 21
Mar 22
Jun 22
Sep 22
Dec 22
Mar 23
Jun 23
Sep 23
Dec 23
Sep 24
Dec 24
Mar 25
Mar 24
Jun 25
Jun 24
Premium/discount to net
asset value
The Board’s policy, subject to prevailing market conditions, is for the Company’s share price to reflect
closely its underlying NAV while smoothing volatility and encouraging a liquid market in the
shares. At each meeting, the Board monitors the level of the Company’s premium/discount to
NAV per share and reviews the average premium/discount for the Company’s AIC sector.
At 30 June 2025, the Company’s shares were trading at a premium of 2.0% to NAV (2024:2.2%
discount) with debt at fair value.
City of London Peer Group Average
-10
-8
-6
-4
-2
0
2
4
6
20212020 20232022 20252024
Ongoing charge The Board regularly reviews the ongoing charge and monitors Company’s expenses.
For the year ended 30 June 2025, the ongoing charge as a percentage of average
shareholders’ fundswas 0.36% (2024:0.37%).
2021
2022
2023
2025
2024
0.0 0.1 0.2 0.3 0.4
0.36
0.38
0.37
0.37
0.37
The charts and data on pages 2 and 3 also on page 20 show how the Company has performed against these KPIs. A glossary
ofterms and an explanation of Alternative Performance Measures are included onpages 90 to 92.
The City of London Investment Trust plc Annual Report 2025
26
Promoting the Company’s Success
Section 172 Statement
The Board regards a well-governed business as essential for the successful delivery of its investment proposition. The Directors carry
out their duties under Section 172 of the Companies Act 2006 to act in good faith to promote the success of the Company for the
benefit of its members as a whole, and in doing so have regard (amongst other matters) to the likely consequences of any decisions
in the longer term, the need to foster the Company’s wider stakeholders, the impact of the Company’s operations on the community
and the environment and the desirability of the Company maintaining a reputation for high standards of business conduct.
The Company has no employees, premises, assets other than financial assets, or operations. Core activities are conducted
through the Manager (Janus Henderson), with whom the Board maintains a close working relationship, and the Board holds the
Manager to account for the smooth running of the Company’s day-to-day business. Each service provider has an established
track record and has in place suitable policies and procedures to ensure it maintains high standards of business conduct.
The Board retains responsibility for decisions over corporate strategy, corporate governance, risk and internal control
assessment, investment performance monitoring and setting marketing budgets. It also determines the overall limits and
restrictions for the portfolio, including gearing and asset allocation.
Engagement with Stakeholders
Shareholders’ assets are managed taking account of the Company’s stakeholders and their interests. The Board has mapped
who the stakeholders are to support it in identifying and understanding them and fostering the appropriate level and form of
interaction. Interaction is facilitated through meetings (both face-to-face and via video conferencing and other electronic means),
seminars, presentations, publications and the Company’s website. Set out below are examples of the way the Board and the
Company engages with its key stakeholders.
Why we engage/outcome How we engage
Shareholders and investors
Shareholders rely on the Company to deliver
sustainable and reliable returns on investment,
with regular, ongoing income. The Board
believes that its primary focus should be on
providing an excellent service to its shareholders
and it seeks to ensure that the Company is
accessible and available.
Outcome:
Clear communication of the Company’s strategy
and performance against its objective helps
shareholders to make informed decisions about
their investments, facilitating the retention of
existing shareholders and attracting new ones.
Close interaction with shareholders enables the
Board to run the Company in line with
shareholders’ interests as a whole and for the
Company’s long-term success.
Regular updates on the Company and its activities are provided through the
Annual and Half Year Reports; the Manager’s monthly factsheets; Company
announcements, including daily NAV announcements; the Company’s
website, which includes video interviews with the Company’s Fund Manager,
regular market commentary and investment insights and other relevant
information to enhance investors’ understanding of the Company and its
portfolio and prospects; research notes from Kepler Partners (paid for by
theCompany and available to all investors).
Shareholders are encouraged to attend and vote at the Company’s general
meetings, including the AGM, where they have the opportunity to address
questions directly to the Directors and the Fund Managers. Shareholders who
cannot attend the AGM in person are able to join the meeting and raise questions
online. Details of this year’s AGM are in the Notice of Meeting on pages 95 to 102.
The Board maintains open channels of communication with shareholders.
Shareholders can raise issues or concerns with the Directors at any time by
writing to the Chairman at the registered office or by email to
itsecretariat@janushenderson.com. The Senior Independent Director is
also available to shareholders if they have concerns that have not been
addressed through the normal channels. Correspondence from shareholders
is shared with the Chairman immediately and with the Board at each meeting.
The Chairman, Senior Independent Director, other members of the Board and
the Fund Managers are available to meet with shareholders. The Manager’s sales
and marketing team, the Broker and external marketing research provider (Kepler
Partners) also meet with shareholders and analysts. The Fund Manager provides
presentations to research analysts following the publication of the Company’s
annual financial results. Feedback from all meetings is shared with the Board.
The Fund Managers promote the Company with the support of the
Manager’s dedicated investment trust sales team and the Board makes
additional spend available to support marketing activities aimed at raising
the profile of the Company.
The City of London Investment Trust plc Annual Report 2025
27
Promoting the Company’s Success (continued)
Why we engage/outcome How we engage
Manager – Janus Henderson
The Manager provides the following services:
●
Fund management
●
Sales and marketing
●
Company secretarial
●
Financial reporting
●
Internal controls functions
●
Investment accounting and administration
(outsourced by Janus Henderson to BNP
Paribas)
●
Oversight of third-party service providers
Successful management of the Company’s
portfolio is essential for the Company to meet
itsstrategic objectives and enable its long-term
sustainable success, whilst effective provision
ofthe ancillary services ensures the efficient
running ofthe Company’s day-to-day affairs.
Outcome:
The Company is well managed and the Board
places great value on the expertise and
experience of the Fund Manager and Deputy
Fund Manager toexecute the investment
objective and deliver returns for shareholders,
and on the Manager’s internal controls and
riskmanagement.
The Board sets and oversees the parameters for the Manager’s activities,
including asset allocation, gearing and risk management. The Board seeks
to engage with the Manager in a collaborative and collegiate manner,
encouraging open and constructive discussion and debate, whilst also
ensuring appropriate and regular challenge.
The Board receives presentations from the Fund Manager and Deputy Fund
Manager at each Board meeting and receives timely and accurate
information from the Manager. There is continuous engagement and
dialogue between Board meetings with the Fund Manager, Deputy Fund
Manager and Corporate Secretary, as well as with other representatives, as
and when necessary, with communication channels remaining open and
information, ideas and advice flowing freely.
The Board meets with other key representatives of the Manager throughout
the year to develop strategy, assess internal controls and risk management,
and to discuss the sales and marketing activities to promote the success of
the Company and raise its profile.
The Board, with the assistance of the Nominations Committee, formally
reviews the performance and terms of appointment of the Manager at least
annually (see pages 48 and 54 for further details).
The portfolio activities undertaken by the Manager and the impact of
decisions are set out in the Fund Manager’s Report on pages 12 to 17.
Third-party service providers
The Company is supported by experienced and
capable third parties for all the services required
to be a well-functioning company and the costs
are commensurate with the services provided.
Outcome:
The Board is confident that Janus Henderson
has developed and maintains good working
relationships with all of the Company’s third-
party suppliers.
The Board is conscious of the need to foster good business relationships
with its suppliers. As an investment company, all services are outsourced.
The Manager maintains the overall day-to-day relationship with the other
service providers and reports back to the Board on performance.
The Board regularly considers the support provided by the service
providers, including quality of service, succession planning, costs and any
potential interruption of service or other risks to provision.
The Board evaluates the terms of engagement and the control environments
in place at each service provider and, through the Nominations Committee,
formally assesses their appointment annually.
Investee companies
Stewardship is a fundamental part of the
Manager’s long-term, active approach to
investment management. Strong ownership
practices, including engagement with
management and boards, can help protect and
enhance long-term shareholder value.
Outcome:
The Company is a responsible investor.
The Board sets the investment objective and discusses stock selection,
asset allocation and engagement with investee companies with the Fund
Manager and Deputy Fund Manager at each Board meeting.
The fund management team regularly conducts face-to-face and/or virtual
meetings with portfolio companies’ management teams to enable them to
understand current trading and prospects for their businesses. The Manager
is a responsible investor and has a dedicated Responsible Investment and
Governance Team that the Fund Managers can utilise when making
investment decisions and voting.
The Manager’s approach to engagement and voting is set out on
pages 33to 36.
The City of London Investment Trust plc Annual Report 2025
28
Promoting the Company’s Success (continued)
Why we engage/outcome How we engage
Communities and the environment
The Board is conscious of the need to take
appropriate account of broader ESG concerns
and to act as a good corporate citizen.
The Board is also conscious of the importance
of providing an investment product which meets
the needs of its investors, including retail
investors and pensioners.
Outcome:
The Company is a responsible investor and
provides an accessible, affordable and reliable
investment for retail and institutional investors.
The Board mandates the Manager, supported by its governance function,
toengage with investee companies on ESG matters in line with good
stewardship practices. The Manager’s integration of ESG considerations
intoinvestment decisions is set out on pages 33 to 36.
A reliable dividend stream from a prudently invested fund is particularly
important in an era of great uncertainty and an increasing requirement on
individuals to organise their own pensions and investments.
Board decision making
The Board strives to act in the best interests of shareholders
as a whole, as well as the interests of the Company’s
stakeholders and taking account of other applicable Section
172 factors, and this forms part of the Board’s decision-
making process. Examples of this can be seen in theyear
under review as follows.
Strategy and performance review
The Board commissioned an external investment trust analyst
to review the Company relative to its six largest peers in the
UKEquity Income sector, in order to provide an independent
perspective of the Company and its performance. The
analysis included a review of the Company’s track record,
highlighting key statistics, investment style, asset allocation,
gearing, dividends and share price discount and premium
management. The review confirmed the Company’s
consistency of performance and dividend track record and
concluded that the Company was in a strong position to
continue as a core holding in the UK Equity Income sector.
Dividends paid to shareholders
As set out in its investment objective, the Board recognises
the importance of dividend income to its shareholders. One of
the advantages of investment trust status is the ability to retain
surplus income. This enables the Company to draw on the
revenue reserves built up over previous years to ensure that
there is no disruption to dividends for shareholders. The
capital reserve arising on investments sold is also available to
fund the dividend, if necessary. The Board has exercised this
flexibility to top up dividends from revenue reserves (but never
from capital reserves) to maintain its policy of increasing the
total dividend each year, even in years (such as most recently
in the year to 30 June 2020) when the dividend per share has
not been covered by revenue earnings per share. In the year
to 30 June 2025, the annual dividend was increased by 3.4%,
the 59th year of continuous dividend growth, with £1.3 million
added to the revenue reserve.
Marketing and promotion
Retail investors form a significant and growing part of the
Company’s share register. Recognising the importance that
such investors have in the demand for the Company’s shares,
the Board approved an increase in the marketing budget to
ensure the ongoing momentum of the retail advertising
campaign commenced in the previous year.
Issuing and buying back the Company’s shares
As set out on page 23, the Board’s policy is for the
Company’s share price to reflect closely its underlying NAV,
while smoothing volatility and encouraging a liquid market in its
shares. The Board considers that it is in shareholders’
interests for the Company to be able to issue shares if they
aretrading at a premium to NAV and to buy back shares at a
discount to NAV. The Company’s NAV is enhanced in both
cases by doing so and, in the case of share issues, some of
the Company’s costs are spread across a larger asset base.
This policy was reconfirmed at the annual strategy meeting of
the Board. During the year, the Company both sold shares
from treasury and bought back shares.
Market background
The Board had regular discussions with the Fund Managers
during the year about the uncertainties facing the UK
economy and global markets in the context, inter alia, of
changes in the UK and US governments, the macroeconomic
and geopolitical implications from US trade tariff reforms
andthe ongoing conflicts in Ukraine and the Middle East.
TheBoard focused on the potential impact on the Company’s
portfolio and dividend income arising from these uncertainties
and the general investment strategy recommended by the
Fund Managers in response.
The City of London Investment Trust plc Annual Report 2025
29
Managing Our Risks
The Board, with the assistance of the Manager, has carriedout a robust assessment of the principal and emerging risks and
uncertainties facing the Company, including those that would threaten its business model, future performance, solvency or
liquidity and reputation.
The Board regularly considers the principal and emerging risks facing the Company and has drawn up a register of these risks.
TheBoard has also put in place a schedule of investment limits and restrictions, appropriate to the Company’s investment
objective and policy. Emerging risks are defined as potential trends, sudden events or changing risks which are characterised by
a high degree of uncertainty in terms of the probability of them happening and the possible effects on the Company. Should an
emerging risk become sufficiently clear, itmay be moved to a significant risk. During the year under review, the Board did not
identify any emerging risks which are not already encompassed within the existing principal risks.
The principal risks which have been identified and the steps taken by the Board to mitigate these are set out in the table below.
The principal financial risks are detailed in note 16 to the financial statements. Details of how the Board monitors the services
provided by Janus Henderson and its other suppliers, and the key elements designed to provide effective internal control, are
explained further in the internal controls section of the Corporate Governance Report on pages 48 and 49.
Principal risk Trend Mitigating measure
Portfolio and market price
Although the Company invests almost entirely in
securities that are listed on recognised markets, share
prices may move rapidly. The companies in which
investments are made may operate unsuccessfully, or
fail entirely. A fall in the market value of the Company’s
portfolio would have an adverse effect on equity
shareholders’ funds.
The Board reviews the portfolio at the seven Board meetings
held each year and receives regular reports from the
Company’s brokers. A detailed liquidity report is considered
on a regular basis.
The Fund Managers closely monitor the portfolio between
meetings and mitigate this risk through diversification of
investments. The Fund Managers periodically present the
Company’s investment strategy in respect of current market
conditions to the Board. Performance relative to the FTSE
All-Share Index, other UK equity income trusts and IA
UKEquity Income OEICs is also monitored.
The majority of the Company’s investments are multi-national
companies with operations in local markets and are
therefore not dependent on the UK economy.
Dividend income
A reduction in dividend income from investee companies
could adversely affect the Company’s ability to maintain
its record of paying a growing dividend to shareholders
each year.
The Board reviews income forecasts at each meeting.
TheCompany has revenue reserves of £48.7 million (before
payment of the fourth interim dividend) and distributable
capital reserves of £398.4 million.
Investment activity, gearing and performance
An inappropriate investment strategy (for example, in
terms ofasset allocation or the level of gearing) may
result in underperformance against the Company’s
benchmark.
Investment performance could be affected over the
longer term by the impact of sudden potentially
catastrophic events, whether man-made (for example
extreme political tensions, conflict, poor trade relations,
wide-scale financial market disruption), or natural
disasters, whether arising from climate change, adverse
weather events or disease.
At each meeting, the Board reviews investment performance,
the level of gearing, the level of premium/discount, income
forecasts and a schedule of expenses. It also has an annual
meeting focused on strategy at which these matters are
considered in more depth.
The City of London Investment Trust plc Annual Report 2025
30
Managing Our Risks (continued)
Principal risk Trend Mitigating measure
Tax and regulatory
Changes in the tax and regulatory environment, including
the Company failing to identify and implement any
necessary regulatory change, could adversely affect the
Company’s financial performance, including the return
on equity. These may also include government measures
which damage the market appeal of investment trusts
for investors.
A breach of Section 1158/9 could lead to a loss of
investment trust status, resulting in capital gains realised
within the portfolio being subject to corporation tax.
Abreach of the UK Listing Rules could result in
suspension of the Company’s shares, while a breach
ofthe Companies Act 2006 could lead to criminal
proceedings, or financial or reputational damage.
The Manager provides its services, inter alia, through suitably
qualified professionals and the Board receives internal control
reports produced by the Manager on a quarterly basis, which
confirm legal and regulatory compliance. The Fund Managers
also consider tax and regulatory change in their monitoring of
the Company’s underlying investments.
Operational
The disruption or failure of technology systems used by
the Manager or its Administrator (BNP Paribas), whether
through inter alia, cyber attacks, failed software updates
or data breaches, could profoundly impact the accurate
reporting and monitoring of the Company’s financial
position. The Company is also exposed to the
operational risk that one or more of its suppliers may not
provide the required level of service.
The Board monitors the services provided by the Manager
and its other suppliers and receives reports on the key
elements in place to provide effective internal control.
Cyber security is closely monitored and the Audit and Risk
Committee receives regular updates from Janus Henderson’s
Chief Information Security Officer.
The Board considers the loss of the Fund Manager as a risk
but this is mitigated by the experience of the team at
JanusHenderson as detailed on page 39.
The City of London Investment Trust plc Annual Report 2025
31
The AIC Code of Corporate Governance includes a
requirement for the Board to assess the future prospects for
the Company, and to report on the assessment within the
Annual Report. The Directors have completed their
assessment for the year under review and report as set
outbelow.
The Board considers that certain characteristics of the
Company’s business model and strategy are relevant to
thisassessment:
●
The Board seeks to deliver long-term performance by
theCompany.
●
The Company’s investment objective, strategy and policy,
which are subject to regular Board monitoring, mean
thatthe Company is invested mainly in readily realisable,
UK-listed securities and that the level of borrowings
isrestricted.
●
The Company is a closed end investment company and
therefore does not suffer from the liquidity issues arising
from unexpected redemptions.
●
The Company has an ongoing charge of 0.36%, which is
lower than other comparable investment trusts.
Also relevant are a number of aspects of the Company’s
operational agreements:
●
The Company retains title to all assets held by the
Custodian under the terms of formal agreements with
theCustodian and Depositary.
●
Long-term borrowing is in place, being 4.53% secured
notes 2029, 2.94% secured notes 2049 and 2.67%
secured notes 2046 which are subject to financial
covenants with which the Company complied in full during
the year. Thevalue of long-term borrowing is relatively
small in comparison to the value of net assets, being
4.9%.
●
Revenue and expenditure forecasts are reviewed by the
Directors at each Board meeting. This includes stress
testing of the forecast under different scenarios.
●
Cash is held with approved banks.
Three model scenarios are considered which evaluate the
impact on revenue reserves. These range from a worst-case
scenario which includes low consensus dividend estimates
and significant dividend cuts of up to 50% from specific
sectors and investee companies, to a best-case scenario with
high consensus dividend estimates, no dividend cuts in any
specific sector and limited dividend cuts in specific investee
companies. Increasing dividend payments to shareholders
could continue under all three scenarios whether through
revenue, or supported by distributable capital reserves. None
of the results from the three scenarios would therefore
threaten theviability of the Company.
Covenant limits are tested to ascertain the level that net
assets would need to fall by to breach any covenant
conditions. Net assets would need to fall by amounts in
excess of £1.9 billion to breach covenants, with all other
factors remaining constant. The Board considers this to be
highly unlikely and therefore does not threaten the viability
ofthe Company.
In addition, the Directors carried out a robust assessment of
the principal risks and uncertainties which could threaten the
Company’s business model, including future performance,
liquidity and solvency, and considered emerging risks that
could have a future impact on the Company.
The principal risks identified as relevant to the viability
assessment were those relating to investment portfolio
performance, including climate change, and its effect on the
NAV, share price and dividends, and threats to security over
the Company’s assets. The Board took into account: the
liquidity of the Company’s portfolio; the existence of the
long-term fixed rateborrowings; the effects of any significant
future falls in investment values and income receipts on the
ability to repay and renegotiate borrowings, grow dividend
payments and retain investors; and the potential need for share
buybacks to maintain a narrow share price discount.
The Directors assess viability over five-year rolling periods,
taking account of foreseeable severe but plausible scenarios.
The Directors believe that a rolling five-year period best
balances the Company’s long-term objective, its financial
flexibility and scope with the difficulty in forecasting economic
conditions affecting the Company and its shareholders.
TheDirectors have considered the current geopolitical and
macroeconomic uncertainties andthe potential for sudden
catastrophic events such as pandemics, conflict and climate
events, in particular the impact on income and the Company’s
ability to meet its investment objective. The Directors do not
believe that they will have a terminal impact on the viability of
the Company andits ability to continue in operation,
notwithstanding the short-term uncertainty these events could
cause in the markets and specific short-term issues, such as
energy, supply chain disruption, inflation and labour
shortages.
Based on their assessment, and in the context of the
Company’s business model, strategy and operational
arrangements set out above, the Directors have a reasonable
expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the
five-year period.
The Company’s Viability
The City of London Investment Trust plc Annual Report 2025
32
How we integrate Environmental, Social
and Governance considerations in our
investment decisions
The Board believes that integrating ESG into investment
decision-making and ownership practices is an important
factor for delivering the investment outcomes our
shareholders seek. ESG considerations are therefore a fully
embedded component of the investment process employed
by the Fund Managers, and the wider Janus Henderson
investment teams. The Company integrates ESG but does not
pursue a sustainable investment objective or otherwise take
ESG factors into account in a binding manner. ESG integration
is the practice of incorporating material environmental/social
and governance information or insights in a non-binding
manner alongside traditional measures into the investment
decision process to improve long-term financial outcomes
ofportfolios. ESG related research is one of many factors
considered within the investment process.
Defining ESG
Environmental factors include climate change, use of natural
resources, pollution, waste management, water usage and
deforestation.
Social factors include corporate culture, diversity, health and
safety, community relations and supply chain management.
Governance factors include business ethics, board
composition, remuneration and shareholder rights.
Investment considerations
Resilience of business models is crucial to the Company’s
investment strategy. The Company’s investment philosophy is
valuation driven, with a dividend yield considered the most
important measure of value. As such, a considerable amount
of time is spent by the Fund Managers identifying fundamental
factors, including ESG factors which may impact profits, cash
flow and dividends and ensuring that investee companies
have robust policies and processes in place to manage these.
Whilst no company is specifically excluded based on ESG
considerations, the Fund Managers would seek to avoid
companies where ESG risks are not sufficiently considered or
managed. As the Fund Managers strive to understand all
drivers of company performance, theyalso strive to
understand the risks. An evaluation of ESGfactors is integral
to this.
Governance is a key part of fundamental factor analysis with
good corporate governance supportive of long-term decision-
making and investment returns. The significance of
environmental and social factors can vary depending on the
sector and the region in which a company operates.
Nonetheless, each ESG factor, in addition to the quantitative
and qualitative assessments, is an important consideration
when evaluating the opportunity in an equity investment.
Fundamental factors considered vary, but may include:
Financial
Analysis
Dividend sustainability, free cash flow,
operating margin, balance sheet strength,
leverage, profitability, earnings growth.
Qualitative
Evaluation
Competitive position, industry trends,
business volatility, business model, barriers
to entry, exposure to disruption.
Environmental Pollution, carbon emissions, water usage,
waste management, resource use,
sustainable sourcing.
Social Health and safety, employee relations,
diversity and inclusion, employee
development, data privacy, supply chain
management.
Governance Shareholder alignment, board
independence, shareholder rights, business
ethics, voting structure, remuneration, board
experience, accounting standards.
Valuation Dividend yield, free cash flow, price to
earnings ratio (“P/E”), earnings per share
(“EPS”), enterprise value/earnings before
interest, tax, depreciation and amortisation
(“EV/EBITDA”) and dividend cover.
The Manager engages MSCI (see footnote 1 on page 36),
aleading firm researching and rating ESG factors globally,
tosupport investment research. MSCI can also be used to
monitor the holdings within the Company and analyse its
overall ESG risk exposure.
Weighted average ESG score
0 2 4 6 8 10
Benchmark
City of London
8.0
7.7
Source: MSCI, City of London and Index weights as at 30 June 2025
MSCI Risk data as at 30 June 2025
MSCI provides an ESG quality score which measures the
ability of the underlying holdings to manage key medium to
long-term risks and opportunities that arise from ESG factors.
It is based on MSCI ESG ratings and is measured on a scale
of 0 to 10 (0 being worst and 10 being best). For this metric
the Company scores 8.0 and the benchmark 7.7. The risk
ratings are aggregated for the Company’s portfolio and the
benchmark, the FTSE All-Share Index. The Company’s ESG
risk is 3.5% lower than the benchmark, as assessed by MSCI.
ESG
The City of London Investment Trust plc Annual Report 2025
33
Distribution of MSCI ESG Fund Ratings Universe
CCC B BB BBB A AA AAA
City of London
Benchmark
% of portfolio
0
10
20
30
40
50
LAGGARD AVERAGE LEADER
Source: MSCI, City of London and Index weights as at 30 June 2025
MSCI Risk data as at 30 June 2025
MSCI’s ESG ratings are ranked using a seven-point AAA-CCC
scale. Both the Company and the benchmark score AA
ratings using this analysis. The Company has no exposure to
companies with the lowest CCC scores, with more exposure
to AAA rated stocks than the benchmark.
Carbon emissions
0
1,000,000
500,000 1,500,000 2,000,000 2,500,000
Benchmark
City of London
Tons CO2e
Source: MSCI, City of London and Index weights as at 30 June 2025
MSCI Risk data as at 30 June 2025
The above chart shows the direct and indirect carbon
emissions of the holdings in both the Company and the
benchmark. These emissions are based on the assets under
management of the Company compared to an equivalent
portfolio of assets under management invested in the
benchmark. Scope 1 and 2 emissions are the direct emissions
from a company’s operations and scope 3 emissions are
indirect emissions. The Company’s direct and indirect carbon
emissions are 15.8% lower than the benchmark.
Engagement and stewardship
Stewardship is a fundamental part of the Manager’s long-
term, active approach to investment management. Strong
ownership practices, including engagement with management
and boards, can help protect and enhance long-term
shareholder value. Janus Henderson is a signatory to the UK
Stewardship Code and is a founding member of the UN
Principles of Responsible Investment (“UN PRI”). Additionally,
Janus Henderson is a supporter of a number of broader ESG
initiatives such as the Access to Medicine Index which aims to
improve availability of healthcare in developed and emerging
markets and Climate Action 100+, an investor-led initiative to
engage with heavily emitting companies to reduce their
greenhouse gas emissions.
As a part of the research process, portfolio managers and
analysts meet frequently with company management, senior
executives and boards, with Janus Henderson conducting
thousands of meetings per year. These meetings typically
occur prior to initiating a position and throughout the holding
period. The portfolio managers develop long-term
relationships with the management of firms in which they
invest. Should concerns arise over a firm’s practices or
performance, they would seek to leverage these constructive
relationships by engaging with company management or
express their views through voting on management or
shareholder proposals. Escalation of engagement activities
depends upon a company’s individual circumstances.
Voting
The Board believes that voting at general meetings is an
important aspect of corporate stewardship, and a means of
signalling shareholder views on board policy, practices and
performance. The Board has delegated responsibility for voting
the rights attached to the shares held in the Company’s portfolio
to the Manager, who actively votes at shareholder meetings
and engages with companies as part of the voting process.
Voting decisions are guided by the best interests of the
investee companies’ shareholders and made in consultation
with the Fund Managers, who have an in-depth understanding
of the respective company’s operations. Voting decisions
aretaken in keeping with the provisions of the Manager’s
Responsible Investment Policy, which sets out the Manager’s
approach to corporate governance, corporate responsibility
and compliance with the Stewardship Code, and is
publiclyavailable on the Manager’s website at
www.janushenderson.com. To retain oversight of the
process, the Directors regularly receive reports on how the
Manager has voted the shares held in the Company’s
portfolio, and they review the Responsible Investment Policy
at least annually.
In the period under review, the shares in the Company’s
portfolio were voted in respect of 86 meetings. The level of
governance in leading global companies is generally of a high
standard in terms of best practice, which meant support in
ESG (continued)
The City of London Investment Trust plc Annual Report 2025
34
favour of the resolutions proposed by management was
warranted. However, in respect of 6 resolutions (<1% of
theresolutions proposed), support was not warranted
and,following discussion between the Fund Managers and
Janus Henderson’s governance team, the shares were voted
against the investee board recommendation. On occasion,
the Fund Managers take voting decisions after consultation
with the Chairman on behalf of the Board.
As an active manager, Janus Henderson’s preference is to
engage with management and boards to resolve issues of
concern rather than to vote against shareholder meeting
proposals. This approach is more likely to be effective in
influencing company behaviour. The Fund Managers therefore
actively seek to engage with companies throughout the year
and in the lead up to the annual shareholder meeting to
discuss any potentially controversial agenda items. However,
where they believe that proposals are not in shareholder
interests or where engagement proves unsuccessful, they will
vote against.
Voting record
84% of meetings where all
resolutions were voted in favour
16% of meetings with at least
one vote against or withheld
In terms of resolutions not supported, these covered three
main areas: compensation, director-related and other
business*.
Director-related 17%
Other business* 17%
Compensation 66%
Source: Janus Henderson using Institutional Shareholder Services (“ISS”)
categories
Note: Some meetings had more than one vote against management
* Janus Henderson routinely votes against proposals labelled ‘other business’.
Many companies put forward proposals labelled ‘other business’. This is
a request to allow the board and shareholders to raise other issues and
discuss them at the meeting. It is often a routine request, however as it could
potentially lead to subsequent approval of items without prior disclosure to
minority shareholders, Janus Henderson routinely votes against these items
The environment
As an investment company, the Company’s own direct
environmental impact is minimal. The Company has no
greenhouse gas emissions to report from its operations, nor
does it have responsibility for any other emissions producing
sources under the Companies Act 2006 (Strategic Report and
Directors’ Reports) Regulations 2013. For the same reasons,
the Company considers itself to be a low energy user under
the Streamlined Energy & Carbon Reporting (“SECR”)
regulations and therefore is not required to disclose energy
and carbon information.
The Manager recognises the importance of managing its
operational activities in a sustainable way and minimising any
adverse impact on the environment.
In 2021 Janus Henderson reached its three-year target to
reduce its carbon footprint by 15% per full-time employee
(“FTE”) from 2018 levels. In 2022, using guidance from the
Science-Based Target Initiative, Janus Henderson set
ambitious new five-year reduction targets versus a 2019
baseline and per FTE:
●
reduction target of 29.4% in Scope 1 (fuel) and Scope 2
(electricity) emissions;
●
reduction target of 17.5% in Scope 3 (business travel,
freight, paper, water, waste) emissions; and
●
reduction target of 17.5% on water and waste
consumption by FTEs.
ESG (continued)
Engagement Example
The Fund Manager engaged with investee companies in
the housebuilding sector to discuss developments in
regulation. Job Curtis (Fund Manager) and Olivia Jones
(Janus Henderson Responsible Investment & Governance
Analyst) met with executives of Taylor Wimpey (on 10 April
2025) and Persimmon (on 8 May 2025). The aim was to
assess the impact new regulations would have on the
businesses. From the engagement, comfort was gained
that the companies had strategies in place and are likely to
benefit. The National Planning Policy Framework has
increased visibility on planning, enabling housebuilders to
have more clarity in their land buying. These improvements
in predictability would be further supported by the Planning
and Infrastructure Bill. Regarding Biodiversity Net Gain
legislation, housebuilders have been meeting the regulation
and prioritising onsite biodiversity gains given limited
supply of biodiversity offsets on the market. The Future
Home Standards are set to be finalised in the autumn,
although the housebuilders commented that they have
accounted for the increase in costs in the majority of land
values. Both companies have been preparing for the
regulation, including by trialling low carbon technologies.
Cladding issues remain more of a challenge for the
industry. Housebuilders pay a 4% Residential Property
Development Tax, have provisioned for remedial works and
face additional taxation through the Building Safety Levy
from October 2026.
The City of London Investment Trust plc Annual Report 2025
35
ESG (continued)
In addition to this, Janus Henderson has been certified as
aCarbonNeutral
®
company since 2007 and offsets all its
operational Scope 1, Scope 2 and Scope 3 emissions each
year. Janus Henderson discloses its carbon emissions annually
through regulatory and voluntary reporting frameworks,
including the CDP (formerly the Carbon Disclosure Project),
aswell as in its 2024 Responsibility Report.
Janus Henderson produces product-level Task Force on
Climate-Related Financial Disclosures (“TCFD”) reports for
funds in scope as well as an entity-level TCFD report.
Thesereports include an overview of the climate-related
governance, strategy, risk management, and metrics and
targets of Janus Henderson and its portfolios. Product-level
metrics include absolute carbon emissions, carbon
footprint,weighted average carbon intensity, implied
temperature rise and climate scenario analysis (Climate
Valueat Risk). JanusHenderson’s TCFD Report specific
toCity of London isavailable on the Company’s website
atwww.cityinvestmenttrust.com.
Business ethics
As the Company’s operations are delegated to third-party
service providers, the Board seeks assurances, at least
annually, from its suppliers that they comply with the
provisions of the UK Modern Slavery Act 2015 and maintain
adequate safeguards in keeping with the provisions of the
Bribery Act 2010, Criminal Finances Act 2017 and the
sanctions element of the Economic Crime Act (Transparency
and Enforcement) 2022.
1 Certain information contained herein (the “Information”) is sourced from/copyright of MSCI Inc, MSCI ESG Research LLC, or their affiliates (“MSCI”), or information
providers (together the “MSCI Parties”) and may have been used to calculate scores, signals, or other indicators. The Information is for internal use only and may not
be reproduced or disseminated in whole or part without prior written permission. The Information may not be used for, nor does it constitute, an offer to buy or sell,
or a promotion or recommendation of, any security, financial instrument or product, trading strategy, or index, nor should it be taken as an indication or guarantee of
any future performance. Some funds may be based on or linked to MSCI indexes, and MSCI may be compensated based on the fund’s assets under management
or other measures. MSCI has established an information barrier between index research and certain Information. None of the Information in and of itself can be used
to determine which securities to buy or sell or when to buy or sell them. The Information is provided “as is” and the user assumes the entire risk of any use it may
make or permit to be made of the Information. No MSCI Party warrants or guarantees the originality, accuracy and/or completeness of the Information and each
expressly disclaims all express or implied warranties. No MSCI Party shall have any liability for any errors or omissions in connection with any Information herein,
orany liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages
The City of London Investment Trust plc Annual Report 2025
36
Governance
37
Directors and Fund Managers
All Directors are non-executive and independent of Janus Henderson.
All Directors are members of the Nominations Committee.
The Audit and Risk Committee comprises Sally Lake, Ominder Dhillon, Ted Holmes and Clare Wardle.
Sally Lake
Position: Chair of the Audit and
RiskCommittee
Date of Appointment:
1 August 2024 (Chair of the Audit and
Risk Committee from 31 October 2024)
Skills and Experience: Sally is a fellow
of the Institute of Actuaries, and has
spent themajority of her career within
non-life commercial insurance. During
her time at Beazley plc, from 2006 to
2024, she held avariety of roles,
including within both business units and
the actuarial and finance functions.
In her final five years with Beazley, Sally
served as group CFO during a period of
significant change both within the
business, within the finance and
accounting function as well as the wider
macro environment. Aspart of her role,
she also was responsible for
investments, investor relations, actuarial,
corporate governance, compliance,
finance change and modernisation as
well as all aspects of finance. She was a
member of the plc board until May 2024,
as well as a number of subsidiaries.
Sally is a very proud and active DEI
advocate. She was the executive
sponsor for HM Treasury’s Women in
Finance Charter, as well as a supporter
of a number of changes at Beazley to
improve inclusion and representation for
women, families and people of colour.
Current External Appointments:
None.
Sir Laurie Magnus CBE
Position: Chairman of the Board and
Nominations Committee
Date of Appointment:
1 March 2020 (Chairman on
27 October 2020)
Skills and Experience: Sir Laurie
hasover 45 years of experience in
corporate finance markets and over
20years as a member of investment
supervisory bodies, including as a
director of various investment trusts.
Hewas Chairman of Pantheon
International plc until October 2022.
Hehas held senior positions at financial
institutions including Samuel Montagu,
Phoenix Securities, Donaldson Lufkin
&Jenrette and Lexicon Partners (latterly
as Chairman prior to its merger with
Evercore). He iscurrently a non-
executive senior adviser toEvercore’s
European business.
Current External Appointments:
Sir Laurie is the Independent Adviser
tothe Prime Minister on Ministerial
Standards. In the not-for-profit sector,
heis Chairman of The Heritage of
London Trust.
Ominder Dhillon
Position: Director
Date of Appointment:
1 September 2021
Skills and Experience: Ominder brings
to the Board strong investment
knowledge across public and private
markets, especially in regard to
sustainable investing, sales and
marketing expertise and a good
understanding of governance and risk
management. He was, until January
2020, Global Head of Institutional
Distribution at M&G plc. Prior to that,
from 2011 to 2015, he was Head of
Distribution at Impax Asset
Management. He was also formerly
Head of UK and Ireland at Fidelity
International, Director of Institutional
Sales at Scottish Widows Investment
Partnership and a trustee of UK charity
Facing History and Ourselves.
Current External Appointments:
Non-executive Director of Fidelity Special
Values PLC and a Director of Ocris
Partners SL.
Directors
The City of London Investment Trust plc Annual Report 2025
38
Fund Manager
Job Curtis has been City of London’s Fund Manager since 1 July 1991. After graduating from Oxford University
in 1983 with a BAHons in Philosophy, Politics and Economics, he joined Grieveson Grant stockbrokers as
atrainee. In 1985, he joined Cornhill Insurance as an assistant fund manager and then moved to Touche
Remnant in 1987 where he became a fund manager. Touche Remnant was taken over by Henderson Group
plc in 1992 and Job is currently a member of Janus Henderson’s Global Equity Income team.
Deputy Fund Manager
David Smith is a Fund Manager on the Janus Henderson Global Equity Income team, a position he has held
since 2008. David manages Henderson High Income Trust plc, a number of UK equity institutional funds and
co-manages the Janus Henderson Cautious Managed Fund. He joined Janus Henderson in 2002, initially
working in operations and progressing to the UK Equities team, and is now part of the Global Equity Income
team. David graduated with a BSc degree (Hons) in Chemistry from Bristol University. He holds the Investment
Management Certificate and the Chartered Financial Analyst designation.
Directors and Fund Managers (continued)
Clare Wardle
Position: Senior Independent Director
Date of Appointment:
1 November 2019
Skills and Experience: Clare brings to the
Board considerable international experience
in risk, governance, competition and
compliance. She has played a leading role
in the growth of Coca-Cola Europacific
Partners plc from a $15 billion market cap
company operating in Europe to a
$33billion market cap company operating
in 30 countries. Previously she was Group
General Counsel and Company Secretary
of Kingfisher, Europe’s largest home
improvement group. Before that, Clare was
Commercial Director, General Counsel and
Company Secretary of Tube Lines, held a
number of senior roles in Royal Mail Group
and worked atwhat is now Hogan Lovells.
She is currently chair of a fundraising
committee for Royal British Legion
Industries. She was also formerly a non-
executive Director of ViaCode Limited, Chair
of Basketball England, Senior Independent
Director of Modern Pentathlon GB and a
trustee of the Friendly Almshouses.
Current External Appointments: General
Counsel and Company Secretary of
Coca-Cola Europacific Partners plc, which
she joined in May2016.
Robert Holmes (Ted)
Position: Director
Date of Appointment:
1 January 2018
Skills and Experience: Ted has a
strong background in investment
management. Ted joined the Board
following a twenty-year career at
UBS Asset Management. During that
time, he worked as a managing
director in both the Chicago office
(previously Brinson Partners) and
London office (previously Phillips and
Drew) in a variety of positions, from
analyst to European Head of
Equities. Prior to UBS, he worked for
Ernst & Young in Washington, D.C.
He has an MBA from the University
of Chicago Booth School of
Business, is a Chartered Financial
Analyst and is a Certified Public
Accountant.
Current External Appointments:
Non-executive Director and Chair of
the Audit Committee of River UK
Micro Cap Limited and Director of
Blue Ocean Investment Partners
Limited.
The City of London Investment Trust plc Annual Report 2025
39
Directors’ Report
The Directors present their report and the audited financial
statements for the year ended 30 June 2025.
The Investment Portfolio on pages 18 and 19, Corporate
Governance Statement, Audit and Risk Committee Report
and Nominations Committee Report on pages 43 to 54,
Statement of Directors’ Responsibilities on page 59,
explanations to the AGM resolutions on pages 98 to 100 and
Securities Financing Transactions, Alternative Performance
Measures and other information on pages 88 to 94 form part
of the Directors’ Report.
Results and Dividends
The results for the year are set out in the financial statements.
Two interim dividends of 5.25p each and two interim dividends
of 5.40p each, totalling 21.30p per share, have been declared
and paid in respect of the year to 30June 2025, an increase
of3.4% over the previous year. Seenote 10 on page 77 for
more information. No final dividend is being proposed.
A review of the year and the outlook for the forthcoming year
can be found in the Strategic Report.
Directors
The Directors of the Company are listed on pages 38 and 39.
All served throughout the period. Samantha Wren retired from
the Board on 31 October 2024.
In accordance with the recommendations ofthe AIC Code of
Corporate Governance, all Directors will offer themselves for
re-election at the forthcoming AGM.
The beneficial interests of the current Directors and their
connected persons in the securities of the Company as at
30June 2025 are set out in the Directors’ Remuneration
Report on page 57. Details of Directors’ insurance and
indemnification are set out on page 47.
Share Capital
There are no restrictions on the transfer of the Company’s
share capital and there are no shares or stock which carry
specific rights with regards to control of the Company. The
Company is not aware of any agreements or arrangements
between holders of securities which would result in
restrictions on the transfer of securities or voting rights.
The Company’s equity and non-equity share capital comprises:
Ordinary shares of 25p nominal value each
The voting rights of the ordinary shares on a poll are one vote
for every 15 shares held. At the beginning of the year, there
were 502,664,868 ordinary shares in issue, of which 8,301,867
shares were held in treasury. Accordingly, there were
494,363,001 shares in issue with voting rights. During the year,
1,685,000 ordinary shares with a nominal value of £421,250
(representing 0.3% of the number of shares in issue at the
beginning of the year) were sold from treasury to Cavendish
Capital Markets Limited at a price range of 437.0p to 490.0p for
total proceeds (net of commissions) of £7,941,000.
2,530,895 shares with a nominal value of £632,724
(representing 0.5% of the issued share capital at the beginning
of the year) were bought back in the market and placed into
treasury for a total net payment of £11,154,000.
At 30 June 2025, the number of ordinary shares in issue was
502,664,868, of which 9,147,762 shares were held in treasury.
Accordingly, the number of shares in issue with voting rights
was 493,517,106.
Since 30 June 2025 and up to 12 September 2025, being the
last practicable date prior to publication of the Annual Report,
1,950,000 shares have been sold from treasury. No shares
have been bought back since the year end.
Cumulative first preference stock
The voting rights of the first preference stock on a poll are one
vote per £10 of stock held. At 1 July 2024 and at 30 June
2025 there was £301,982 of first preference stock in issue.
Non-cumulative second preference stock
Second preference stockholders have no rights to attend and vote
at general meetings (except on the winding-up of the Company
or if dividends are in arrears). At 1 July 2024 and at 30 June
2025 there was £507,202 of second preference stock in issue.
Non-cumulative preferred ordinary stock
The voting rights of the preferred ordinary stock on a poll are
one vote per £20 of stock held. At 1 July 2024 and at 30 June
2025 there was £589,672 of preferred ordinary stock in issue.
Further details on the first and second preference stock and
the preferred ordinary stock are contained in note 15 on
pages 79 and 80.
Total voting rights
At 30 June 2025, the total voting rights in the Company were
32,960,822, comprising 32,901,140 ordinary share voting rights
(99.8%), 30,198 first preference stock voting rights (0.1%) and
29,484 preferred ordinary stock voting rights (0.1%).
Shareholder authorities
The Directors seek annual authority from the shareholders to
allot new ordinary shares, to dis-apply the pre-emption rights
of existing shareholders and to buy back, for cancellation or to
be held in treasury, the Company’s ordinary shares. In
addition, the Directors seek annual authority to buy back and
cancel the Company’s preferred and preference stocks.
At the AGM held on 31 October 2024, the Directors were
granted authority to allot up to 49,433,472 ordinary shares
(with an aggregate nominal amount of £12,358,368) for cash
and to repurchase 74,100,774 ordinary shares (with a nominal
value of £18,525,194) for cancellation or to be held in treasury.
3,635,000 shares have been sold from treasury and 2,502,617
The City of London Investment Trust plc Annual Report 2025
40
shares have been bought back under these authorities.
During the year and up to the date of this report, the Directors
have not bought back any preferred or preference stocks.
The Directors will once again be seeking to renew the authorities
to allot and repurchase the ordinary shares at the upcoming
AGM, when the existing authorities will expire.
Holdings in the Company’s Shares
There are no declarations of interests in the voting rights of
the Company as at 30 June 2025 in accordance with the
Disclosure Guidance and Transparency Rules of the FCA.
No changes have been notified in the period from 1 July 2025
to 12 September 2025.
Fund Manager’s Interests
As at 30 June 2025, Job Curtis, the Fund Manager, has a
beneficial interest in 313,306 shares and a non-beneficial
interest in 18,700 shares.
Related Party Transactions
The Company’s transactions with related parties in the year
were with the Directors and the Manager. There were no
material transactions between the Company and its Directors
during the year and the only amounts paid to them were in
respect of expenses and remuneration for which there were
no outstanding amounts payable at the year end.
In relation to the provision of services by the Manager, other
than fees payable by the Company in the ordinary course of
business and the provision of marketing services, there were
no material transactions with the Manager affecting the
financial position of the Company during the year under
review. More details on transactions with the Manager,
including amounts outstanding at the year end, are given
innote 23 on page 86.
Financial Risk Management
The principal risks and uncertainties facing the Company are
set out on pages 30 and 31. The principal financial risks and
the Company’s policies and procedures for managing these
risks are set out in note 16 to the financial statements on
pages 80 to 84.
Greenhouse Gas Emissions
The Company’s environmental statements are set out in the
Strategic Report on pages 33 to 36.
Annual General Meeting
The AGM will be held on 30 October 2025 at 1.00pm. The
Board invites shareholders to attend the meeting at the
registered office at 201 Bishopsgate, London EC2M 3AE. The
Meeting will include a presentation by the Fund Manager, Job
Curtis, and Deputy Fund Manager, David Smith. Shareholders
will also be able to join the Meeting via Zoom webinar by
registering at www.janushenderson.com/cty-agm.
There will be live voting for those physically present at the
AGM and the Board therefore requests all shareholders, and
particularly those who cannot attend physically, tosubmit
their votes by completing a Form of Proxy. Shareholders with
shares held in their own names will receive a Form of Proxy
enabling them to vote; shareholders holding shares through
nominee accounts, such as through ashare dealing service or
platform, should contact their provider directly and ask them
to submit the proxy votes ontheir behalf.
Instructions for attending the AGM and details of
resolutionsto be put to the AGM are included in the
NoticeofAGM on pages 95 to 102. If shareholders would
liketo submitany questions in advance of the Meeting,
theyare welcome to send these to the Corporate Secretary
atitsecretariat@janushenderson.com.
The Board considers that the resolutions to be proposed
atthe AGM are in the best interests of the Company’s
shareholders as a whole. The Board therefore recommends
unanimously to shareholders that they vote in favour of each
of the resolutions, as the Directors intend to do in respect
oftheir own beneficial holdings.
Directors’ Statement as to Disclosure
ofInformation to Auditor
Each of the Directors who were members of the Board at the
date of approval of this report confirms that, to the best of his
or her knowledge and belief, there is no information relevant to
the preparation of the Annual Report of which the Company’s
Auditor is unaware and he or she has taken all the steps a
Director might reasonably be expected to have taken to be
aware of relevant audit information and to establish that the
Company’s Auditor is aware of that information.
Re-appointment of Auditor
Ernst & Young LLP (“EY”) have indicated their willingness to
continue in office as Auditor and resolutions proposing their
re-appointment and authorising the Audit and Risk Committee
to determine their remuneration forthe ensuing year will be
put to shareholders at the forthcoming AGM. Further
information inrelation to their re-appointment can be found in
the Auditand Risk Committee Report on pages 50 to 52.
UK Listing Rule 6.6.4
UK Listing Rule (“UKLR”) 6.6.4 requires the Company to
include certain information in a single identifiable section of
the Annual Report or a cross-reference table indicating
where the information is set out. The Directors confirm that
there are nodisclosures to be made in this regard, other
than in accordance with UKLR 6.6.1(6), the information for
which is detailed on page 40 under Share Capital.
Directors’ Report (continued)
The City of London Investment Trust plc Annual Report 2025
41
Directors’ Report (continued)
Securities Financing Transactions
As the Company undertakes securities lending, it is required
to report on securities financing transactions (as defined in
Article 3 of Regulation (EU) 2015/2365, securities financing
transactions include repurchase transactions, securities or
commodities lending and securities or commodities
borrowing, buy-sell back transactions or sell-buy back
transactions and margin lending transactions). In accordance
with Article 13 of the Regulation, the Company’s involvement
in and exposures related to securities lending for the
accounting period ended 30 June 2025 are detailed on
pages 88 and 89.
Approval
The Directors’ Report has been approved by the Board.
By order of the Board
Janus Henderson Secretarial Services UK Limited
Corporate Secretary
16 September 2025
The City of London Investment Trust plc Annual Report 2025
42
The Company has also constituted an Insider Committee toassist the Board in its obligations under the Market Abuse Regulation.
Corporate Governance Report
Governance Structure
HSBC Bank plc
(Depositary and Custodian)
Ensure safe custody of the
Company’s assets, verification of
ownership and valuation
Computershare Investor
Services plc
(Registrar)
Maintain the register of members
andassist shareholders with queries
in respect of their shareholdings
Cavendish Capital Markets
Limited
(Corporate Broker)
Conduit between the stock market
and the Company, keeping the Board
updated on market conditions and
shareholder views
Nominations Committee
Purpose: Ensure the Board has a balance of skills, experience
and diversity, oversee performance evaluations of the Board
and its committees, and maintain an effective framework for
succession planning, with a formal approach to the
appointment ofDirectors
Ensure that the performance of service providers meets
expectations and their terms of engagement remain appropriate
Chairman: Sir Laurie Magnus
See pages 53 and 54 for the Nominations
Committee Report
Audit and Risk Committee
Purpose: Ensure the integrity of the financial reporting,
evaluate the effectiveness of the systems of internal control
and risk management, and oversee the relationship with the
external auditors
Chair: Sally Lake
See pages 50 to 52 for the Audit and Risk Committee Report
Third-party service providers appointed by the Board
Janus Henderson Investors
Fund Management: Global Equity Income team with Job Curtis and
DavidSmith as the Company’s appointed Fund Manager and
DeputyFundManager respectively
Sales, Marketing, Administration
Corporate Secretary: Janus Henderson Secretarial Services UK Limited
Alternative Investment Fund Manager: Janus Henderson Fund
Management UK Limited
Board of Directors
Responsible for providing leadership, setting the investment objective and policy of the Company, establishing
anappropriately robust framework of internal control and risk management, and appointing and monitoring the
performance of the Company’s third-party service providers
Chairman: Sir Laurie Magnus
Senior Independent Director: Clare Wardle
The City of London Investment Trust plc Annual Report 2025
43
Corporate Governance Report (continued)
Corporate Governance
The Board is accountable to shareholders for the governance
of the Company’s day-to-day affairs and is pleased to report
to shareholders on the Company’s governance arrangements
and how the principles of the applicable codes have been
applied during the year under review.
Applicable Corporate Governance Codes
By virtue of the Company’s listing on the London Stock
Exchange, the Board is required to report on how the
principles of the 2018 UK Corporate Governance Code (“UK
Code”) have been applied. Being an investment company, a
number of the provisions of the UK Code are notapplicable
as the Company has no executive directors or internal
operations and all day-to-day activities are outsourced to
external service providers. The Board has therefore
considered the principles and recommendations of the Code
of Corporate Governance published by the Association of
Investment Companies in February 2019 (“AIC Code”). The
AIC Code addresses the principles set out in the UK Code as
well as additional principles and recommendations on issues
that are of specific relevance to investment companies.
TheFinancial Reporting Council (“FRC”) has endorsed the
AICCode and confirmed that, by following it, the boards of
investment companies should fully meet their obligations in
relation to the UK Code and UK Listing Rule 6.6.6. TheBoard
considers that reporting against the principles and provisions
of the AIC Code provides more relevant information to
shareholders in terms of its governancearrangements.
A new UK Code was published in January 2024, with an
updated AIC Code published in August 2024 and these are
applicable to the Company for the year ending 30 June 2026.
The effective date of Provision 34 of the AIC Code (29 in the
UK Code) in relation to internal controls will apply for the year
ending 30 June 2027. The Board has been reviewing the
changes to the Codes to ensure the Company will continue to
comply and that any new processes that may be required are
put into place.
The AIC Code and the UK Code can be found on the
respective organisations’ websites: www.theaic.co.uk and
www.frc.org.uk. The AIC Code includes an explanation of
how it adapts the principles and provisions set out in the UK
Code to make them relevant for investment companies.
Statement of Compliance
The Company has complied with the principles and provisions
of the 2019 AIC Code throughout the year to 30 June 2025
except as set out below.
The Company has no chief executive or other executive
directors. It therefore has no need to consider the
remuneration of executive directors and has notreported
further in respect of these provisions. In addition, the
Company does not have any internal operations and therefore
does not maintain an internal audit function. However, the
Audit and Risk Committee considers the need for such a
function at least annually (see page 49 for further information).
As the Company has no employees and has a small Board of
solely non-executive Directors, the Board has not established
a separate remuneration committee. The remuneration of
Directors is dealt with by the Board as a whole.
Given the business model operated by the Company and
theimportance of the role of the Manager in ensuring the
success of the Company, the Board believes that it remains
its responsibility to keep under review the level of service
provided by the Manager. It is assisted in this by the
Nominations Committee, as set out in the Nominations
Committee Report on pages 53 and 54. Accordingly, a
separate Management Engagement Committee has not
beenformed.
The AIC Code includes two deviations from the UK Code
permitting the Chairman of the Board to be a member of
theAudit and Risk Committee and for his or her tenure to
exceed nineyears. The Company has not taken advantage of
these provisions and continues to comply with the provisions
of theUK Code in this respect.
Board Leadership and Purpose
The Board has overall responsibility for the Company’s affairs
and for promoting the long-term success of the Company.
TheBoard is collectively responsible for providing leadership,
setting the investment objective and policy, appointing the
Company’s third-party service providers, establishing a robust
internal control and risk management system and monitoring
the performance delivered by service providers within the
established control framework. It is also responsible for setting
the Company’s standards and values and for ensuring that its
obligations to its shareholders and other stakeholders are
understood and met. Information relating to the Company’s
purpose and values can be found in the Business Model on
pages 22 to 24 andto the Board’s engagement with
stakeholders on pages 27 to 29.
The City of London Investment Trust plc Annual Report 2025
44
Division of Responsibilities
Role Primary responsibilities
Shareholders/
investors
●
Approving material changes to the Company’s investment policy.
●
Making decisions regarding changes to the Company’s constitution.
●
Electing and re-electing Directors to the Board, or removing them from office if deemed appropriate.
●
Determining the overall limit for Directors’ remuneration.
Chairman
●
Leading and managing Board business and ensuring the timely flow of information from service
providers to the Board, facilitating open, honest and constructive debate among Directors.
●
Leading the Nominations Committee in developing succession planning and the identification of
potential candidates for appointment to the Board (except when considering his own succession).
●
Leading the Board in determining its governance framework, culture and values.
●
Leading the Board’s relationship and engagement with shareholders and other stakeholders.
●
Managing the relationship with the Manager.
The role description for the Chairman is available on the Company’s website.
Senior Independent
Director
●
Fulfilling the role of sounding board for the Chairman and intermediary for the other Directors as
necessary.
●
Leading the performance evaluation of the Chairman.
●
Acting as a channel of communication for shareholders in the event that contact through the
Chairman is inappropriate.
The role description of the Senior Independent Director is available on the Company’s website.
Independent non-
executive Directors
●
Providing constructive and effective challenge, especially to the decisions of the Manager.
●
Scrutinising and holding to account the performance of the:
– Fund Managers in meeting the investment objective; and
– Manager in the promotion of the Company and day-to-day smooth operations of the Company’s
business.
●
Providing strategic guidance and offering specialist advice.
Committee Chairs
●
The leadership and governance of their Committee.
●
Maintaining the relationships with specialist service providers delivering services within the remit of
their Committee.
●
Reporting on the activities of their Committee to the Board.
●
Seeking approval from the Board for the responsibilities set out in their respective terms of
reference.
Manager (AIFM)
●
Promoting the Company’s investment proposition to professional and retail investors.
●
Making the necessary reporting to the FCA regarding the Company’s status as an AIF.
●
Providing accounting, company secretarial and other administrative services to the Company
ensuring compliance with the applicable statutory and regulatory provisions.
●
Coordinating the delivery of services provided by the Company’s other third-party service
providers.
Fund Managers
●
Selecting the stocks held within the portfolio.
●
Diversification and risk management through stock selection and size of investment.
●
Determining the volume and timing of acquisitions and disposals.
●
Determining the frequency and level of gearing within the overall limits set by the Board.
Corporate Governance Report (continued)
The City of London Investment Trust plc Annual Report 2025
45
Operation of the Board
The Board meets formally at least seven times a year, with
additional Board or Committee meetings arranged when
required. The Directors have regular contact with the Fund
Managers, Corporate Secretary and other employees of the
Manager between meetings.
The Board has a formal schedule of matters specifically
reserved for its decision, which includes setting strategy and
oversight of performance, risk management and internal
controls. All matters that are not delegated to the Manager
under the management agreement are reserved for the
Board’s decision. A copy of the schedule of matters reserved
is available on the Company’s website. A procedure for
Directors, in the furtherance of their duties, to take
independent professional advice at the expense of the
Company has been adopted.
At each meeting the Board reviews with the Fund Managers the
Company’s investment performance and compliance with
theapproved investment policy, and also considers financial
analyses and other reports of an operational nature. TheBoard
monitors compliance with the Company’s objective and
isresponsible for setting asset allocation, investment and
gearing limits within which the Fund Managers have discretion
to act.The Fund Managers take decisions as to the purchase
and sale of individual investments, although the Board has
responsibility for the approval of any investments in in-house
funds managed or advised by the Manager.
The Board has engaged third-party service providers to
deliver the operations of the Company. Management of the
investment portfolio has been delegated contractually to
Janus Henderson, which also provides the day-to-day
accounting, company secretarial, administrative, sales
andmarketing activities. The Company has appointed
aDepositary, HSBC Bank plc, which in turn appoints the
Custodian which is responsible for the safe custody of the
Company’s assets. The Company has appointed a Registrar,
Computershare Investor Services plc, to maintain the Register
of Members and assist shareholders with queries about their
holdings. Each of these principal contracts was entered into
after full and proper consideration by the Board of the quality
and cost of the services offered, including the control
systemsin operation in so far as they relate to theaffairs
ofthe Company. The Board and its Committees maintain
oversight of the third-party service providers through regular
and ad hoc reporting. The Board meets annually with
representatives from the Depositary and Custodian to discuss
amongst other matters performance, service levels, their value
for money, information security and business resilience plans.
The Manager and Corporate Secretary ensure that all
Directors receive, in a timely manner, all relevant management,
financial, regulatory and other information to allow them to
discharge their responsibilities and to enable the Board (and
its Committees) to function effectively. Representatives of the
Manager attend each Board meeting enabling the Directors to
probe further on matters of concern. In addition, the Chairman
is invited to attend meetings of all the chairs of the investment
trust companies managed by Janus Henderson which provide
a forum to discuss industry matters, and then reports back to
the Board.
The Directors have access to the advice and services of the
Corporate Secretary through its appointed representative
whois responsible to the Board for ensuring that Board and
Committee procedures are followed and that applicable rules
and regulations are complied with. The proceedings at all
Board and Committee meetings are fully minuted, in a
process that allows any Director’s concerns to be recorded
inthe minutes.
The Corporate Secretary, Janus Henderson Secretarial
Services UK Limited, is a subsidiary of Janus Henderson with
its own reporting lines and audited internal controls. There are
processes and controls in place to ensure that there is a clear
distinction between the two entities, particularly when dealing
with any conflicts or issues between the Company and
JanusHenderson.
Any correspondence from shareholders addressed to the
Chairman or the Board received at JanusHenderson’s offices
is forwarded to the Chairman inline with the established
procedures in place. Any correspondence is submitted to
thenext Board meeting.
Janus Henderson and BNP Paribas, which is engaged by
Janus Henderson, have arrangements in place by which their
staff may, in confidence, raise concerns about possible
improprieties in relation to financial reporting or other matters.
The Board, the Manager and the Corporate Secretary operate
in a supportive, co-operative and open environment.
The Board
Board composition and independence
Under the Company’s Articles of Association, the total
number of Directors shall not be less than three nor more than
seven. Asat the date of this report, the Board comprises five
non-executive directors, whose biographies are included
onpages 38 and 39. Thesebiographies demonstrate the
breadth of investment, financial, commercial and professional
experience relevant totheir positions as Directors.
Sir Laurie Magnus was appointed as Chairman of the Board
on 27 October 2020. Sir Laurie was independent on
appointment in accordance with the criteria set out in the AIC
Code and has no relationships that may create a conflict
ofinterest between his interests and those of shareholders.
Details of his other significant commitments can be found on
page 38. Following review by the Nominations Committee as
part of the performance evaluation, the Board is satisfied that
Sir Laurie has sufficient time to devote to the Company.
Corporate Governance Report (continued)
The City of London Investment Trust plc Annual Report 2025
46
The independence of the Directors is determined with
reference to the AIC Code. The Nominations Committee
considers the independence of each Director at least annually
by reviewing their other appointments and commitments, as
well as their tenure of service and any connection they may
have with the Manager.
Following evaluation, the Nominations Committee determined
that all Directors continued to be independent in character
and judgement and that their individual skills, broad business
experience and knowledge and understanding of the
Company were of benefit to shareholders. All Directors are
considered by the Board to be independent of the Manager
and free of any relationship which could materially interfere
with the exercise of their independent judgement.
There were no contracts subsisting during or at the end of
theyear in which any Director is or was materially interested
and which is or was significant in relation to the Company’s
business. No Director has a contract of service with the
Company and there are no agreements between the
Company and its Directors concerning compensation
forlossof office.
Appointment and retirement
The Board may appoint Directors and any Director so
appointed will stand for election by shareholders at the next
AGM following appointment, in accordance with the Articles
of Association and the AIC Code. Each Director receives a
letter of appointment that sets out, amongst other matters,
what is expected of them in terms oftime commitment.
In keeping with the provisions of the AIC Code, the Board
hasadopted a policy for all Directors to retire and stand for
re-election annually at each AGM.
Under the Articles of Association, shareholders may remove
aDirector before the end of his or her term by passing an
ordinary resolution at a general meeting.
The Board considers a potential candidate’s other
commitments on appointment and then annually through the
performance evaluation process to ensure that Directors have
sufficient time to commit to the Company. A schedule of
Directors’ other commitments is reviewed at each Board
Meeting and Directors are required to seek the Chairman’s
approval prior to accepting further appointments.
Tenure
The Board’s policy for Directors, including the Chairman, is
that they serve for no more than nine years, other than in
exceptional circumstances. This ensures the regular
refreshment of the Board and its Committees and forms
anintegral part of the Board’s succession planning.
In advance of each AGM, the Nominations Committee will
consider and make recommendations to the Board about
whether it is appropriate for eligible Directors to be
recommended for re-election, taking into account the results
of the annual performance evaluation andthe ongoing
requirements of the AIC Code.
Professional development
An induction process is in place for new Directors which
covers the legal and regulatory framework for investment
companies and the operations of the Manager, including the
compliance and risk management frameworks, accounting,
sales and marketing, and other administration services
provided by the Manager.
Directors are also provided on a regular basis with key
information on the Company’s policies, regulatory and
statutory requirements and internal controls. Changes
affecting Directors’ responsibilities are advised to the Board
as they arise. Directors also regularly participate in relevant
training and industry seminars and may do so at the
expense of the Company.
Directors’ individual training requirements are considered
aspart of the annual evaluation process which is led by the
Chairman of the Board.
Conflicts of Interest
The Company’s Articles of Association permit the Board to
consider and, if it sees fit, to authorise situations where a
Director has an interest that conflicts, or may possibly conflict,
with the interests of the Company (“situational conflicts”).
TheBoard has a formal system in place for Directors to
declare situational conflicts to be considered for authorisation
by those Directors who have no interest in the matter being
considered. In deciding whether to authorise a situational
conflict, the non-conflicted Directors must act honestly and in
good faith with a view to the best interests of the Company
and they may impose limits or conditions when giving the
authorisation, or subsequently, if they think this is appropriate.
Any situational conflicts considered, and any authorisations
given, are recorded in the relevant meeting’s minutes. The
Board believes that the systems it has in place for reporting
and considering situational conflicts continue to operate
effectively. No situational conflicts of interest were considered
during the year or up to the date of this report.
Insurance and Indemnification
Directors’ and officers’ liability insurance cover is in place in
respect of the Directors. Under the Company’s Articles of
Association and subject to the provisions of UK legislation, a
qualifying third-party indemnity may be provided to Directors
in respect of costs which they may incur relating to the
defence of any proceedings brought against them arising out
of their positions as Directors, in which they are acquitted or
judgment is given in their favour by the Court. No indemnity
was given during the year or up to the date of this report.
Corporate Governance Report (continued)
The City of London Investment Trust plc Annual Report 2025
47
Corporate Governance Report (continued)
Committees of the Board
The Board has two principal Committees: the Audit and Risk
Committee and the Nominations Committee. The terms
ofreference for these committees are available on the
Company’s website. The Company has also constituted
anInsider Committee to assist the Board in meeting its
obligations under the Market Abuse Regulation.
Board Attendance
The table below sets out the number of scheduled formal
Board and Committee meetings held during the year under
review andthe number of meetings attended by each
Director. All Directors attended the 2024 AGM. Thenumber in
brackets denotes the number of meetings each Director was
entitled to attend.
Board
Audit and Risk
Committee
Nominations
Committee
Number of scheduled
meetings 7 3 1
Ominder Dhillon 7 (7) 3 (3) 1 (1)
Ted Holmes 7 (7) 3 (3) 1 (1)
Sally Lake* 6 (6) 3 (3) 0 (0)
Sir Laurie Magnus 7 (7) 3 (3) 1 (1)
Clare Wardle 7 (7) 3 (3) 1 (1)
* Appointed as a Director on 1 August 2024
Notes:
Sir Laurie Magnus attended each of the Audit and Risk Committee meetings by
invitation. An additional meeting of the Nominations Committee was held during
the year to consider the Board evaluation process and the appointment of an
independent reviewer. The Insider Committee did not meet during the year
Continued Appointment of the Manager
The Board monitors investment performance at each meeting,
including information about performance relative to the
benchmark and competitors in the AIC’s UK Equity Income
sector, receives updates in respect of professional sales
andmarketing activities carried out by the Manager for the
Company twice annually and receives a formal
recommendation from the Nominations Committee in
respectof the continued appropriateness of the terms
ofthemanagement agreement at least annually.
The assessment of the Manager by the Nominations
Committee included consideration of the quality of the team
involved in all aspects of servicing the Company, including
company secretarial, administration, sales and marketing,
the Manager’s use of gearing and management of the
portfolio’s risk profile, the stability of the management
group, its business priorities and the adequacy of
succession planning.
Following completion of the review, the Board was satisfied
with the performance of the Manager and the services being
provided and believes that the continued appointment of the
Manager on the terms agreed is in the interests of the
Company’s shareholders as awhole.
Internal Control and Risk Management
The Board has overall responsibility for the Company’s system
of internal control and for reviewing its effectiveness, as set
out in the chart on the following page. The Audit and Risk
Committee supports the Board in the continuous monitoring
of the internal control andrisk management framework.
Details of the principal risks facing the Company, including
emerging risks, and how these are mitigated are set out on
pages 30 and 31.
The Board has established an ongoing process for identifying,
evaluating and managing the principal and emerging risks
faced by the Company. The process accords with the FRC’s
guidance on Risk Management, Internal Control and Related
Business and Financial Reporting. The system was in operation
throughout the period and up to the date of this report. The
system is designed tomeet the specific risks faced by the
Company and takes account of the nature of the Company’s
reliance on its service providers and their internal controls.
Thesystem therefore manages rather than eliminates the risk
offailure toachieve the Company’s business objectives and
provides reasonable, butnot absolute, assurance against
material misstatement orloss.
The key components of the internal control framework
include:
●
clearly defined investment criteria which specify levels of
authority and exposure limits. The Board reviews reports
on compliance with the criteria at each meeting;
●
regular reporting which allows the Board to assess the
Company’s financial position. The management accounts
and forecasts are reviewed by the Board at each meeting;
●
the contractual agreements with the Manager and other
third-party service providers. The Board reviews
performance levels and adherence to relevant provisions
of the agreements on a regular basis. The Nominations
Committee conducts a formal evaluation of the overall
level of service provided at least annually (see Nominations
Committee Report on pages 53 and 54);
●
the review of controls (including financial, operational and
compliance) at the Manager and other third-party service
providers. The Board receives quarterly reporting from the
Manager and Depositary, and reviews annual assurance
reports on the effectiveness of the control environments
atthe Company’s key service providers; and
●
the review of additional reporting provided by:
– the Manager’s Operational Risk team on the control
environment in operation at the Manager and their view
of the control environments in place at the third-party
service providers used by the Company; and
– the Manager’s Internal Audit team on areas of operation
which are relevant to the Company.
The Board has carried out a review of the effectiveness of the
Company’s system of internal controls for the year ended 30June
2025. During the course of its review the Board did not identify
and was not advised of any failings or weaknesses relating to
the Company’s portfolio that have been determined as material.
The City of London Investment Trust plc Annual Report 2025
48
Internal Audit Function
Systems are in operation to safeguard the Company’s assets
and shareholders’ investments, to maintain proper accounting
records and to ensure that financial information used within
the business, or published, is reliable.
The Company is an investment company, has no employees
and delegates all executive activities to third-party service
providers, principally among them, the Manager. The Board
places reliance on the Company’s framework of internal
control and the Audit and Risk Committee’s view on reporting
received from specific second and third line of defence teams
at theManager.
The Manager’s Operational Risk team supports the Audit and
Risk Committee in considering the independently audited
reports on the effectiveness of internal controls in place at the
Company’s third-party service providers. The Manager’s
Internal Audit department provides regular reporting to the
Board on the operations at the Manager and presents at least
annually to the Audit and Risk Committee. The Board
considers the need for its own internal audit function annually
and continues to conclude that it is not necessary atthe
present time for the Company to have its own function.
Communication with Shareholders
Please see page 27 for information about how the Company
communicates with shareholders.
Corporate Governance Report (continued)
Framework of Internal Controls
How the system of internal control operates
The Board delegates contractually to third-party service providers all of the Company’s operational requirements. It maintains
oversight of these providers throughout the year by receiving regular reporting on their activities. All are consideredstakeholders.
The Nominations Committee formally evaluates the performance and service delivery of key third-party service providers
atleastannually.
The Audit and Risk Committee evaluates theperformance of the Auditor on completion of each auditcycle and monitors the
effectiveness of the control environment of the key third-party service providers each year through review of their annual
assurance reports (usually ISAE 3202), supplemented by the view of the Manager’s Operational Risk team.
Ernst & Young LLP has been appointed as the Company’s Auditor.
Janus Henderson
(Investment management,
company secretarial,
sales, marketing, PR,
financial reporting and
administration)
Reporting
• Investment
performance update (at
each meeting)
• Compliance with
investment limits and
restrictions (monthly)
• Internal controls report
(quarterly)
• Effectiveness of control
environment (annually)
HSBC
(Depositary & Custodian)
Reporting
• Depositary report
(quarterly)
• Presentation from the
Depositary and
Custodian (annually)
• Effectiveness of control
environment (annually)
BNP Paribas
(Accounting and
administration services
(engaged by the Manager))
Reporting
• Balance sheet
• Liquidity and gearing
• Revenue forecasts
• Portfolio valuation
• Portfolio transactions
• Effectiveness ofcontrol
environment (annually)
Computershare
(Registrar)
Reporting
• Voting reports pre- and
post-shareholder
meetings
• Shareholder
correspondence
• Operational service
updates (semi-annually)
• Effectiveness of control
environment (annually)
Board of Directors
(independent non-executive Directors)
The City of London Investment Trust plc Annual Report 2025
49
Audit and Risk Committee Report
I am pleased to present the Audit and Risk Committee Report
for the year ended 30 June 2025.
Membership
The members of the Audit and Risk Committee (“Committee”)
are Sally Lake (Committee Chair), Ominder Dhillon, Ted
Holmes and Clare Wardle. Sally Lake became Chair of the
Committee following the retirement of Samantha Wren on
31 October 2024. The Committee Chair is considered by the
Board to have recent and relevant financial experience, and
the Committee as a whole has competence relevant to the
sector in which the Company operates and to the Company
as an investment trust. The Chairman of the Board may attend
meetings by invitation of the Chair.
Meetings
The Committee usually meets at least three times a year, to
review the half-year results, the annual results and to review the
Company’s internal controls. It met three times in the year
under review. The Company’s Auditor, the Fund Managers and
the Manager’s Financial Reporting Senior Manager for
Investment Trusts are invited to attend meetings of the
Committee on a regular basis. Other representatives of the
Manager and BNP Paribas may also be invited to attend if
deemed necessary by the Committee.
Role and Responsibilities
The primary responsibilities of the Committee are: to ensure
the integrity of the Company’s financial reporting, including
oversight of the preparation and audit of the annual financial
statements; to monitor and review the effectiveness of the
systems of internal control and risk management in place at
the Manager and the Company’s other third-party service
providers; and to monitor the effectiveness and objectivity
ofthe external Auditor. The Committee oversees the
relationship with the external Auditor, approving the terms of
their appointment or their removal.
The Audit and Risk Committee reports to the Board after each
meeting and its responsibilities are set out in formal terms of
reference which are reviewed at least annually.
Activities during the Year
In the year under review, the Committee considered the
following matters:
Financial reporting
●
The appropriateness of the Company’s accounting
policies and of the quality and effectiveness of the
accounting records and management information
maintained on behalf of the Company.
●
The level of dividends to be paid by the Company, for
recommendation to the Board.
●
The disclosures made in the annual and half year reports
in relation to internal controls and risk management,
viability, going concern and related parties and
consideration of whether the report is fair, balanced and
understandable and provides the information necessary
for shareholders to assess the Company’s position and
performance, business model and strategy in order to
make recommendations to the Board.
Auditor
●
The audit plan, including the principal areas of focus.
●
The nature, scope and cost of the external audit and
reviewing the Auditor’s findings in this respect.
●
The re-appointment and evaluation of the independence,
effectiveness and objectivity of the Auditor.
Internal controls and management of risk
●
The principal risks facing the Company, including
consideration of emerging risks, the risk management
systems in place and the Company’s risk map.
●
Reports on the effectiveness of the internal controls in
place at Janus Henderson and the Company’s other
principal third-party service providers and discussing them
with the Manager’s Operational Risk Team.
●
Compliance with the terms of the loan notes in issue.
●
The need for the Company to have its own internal audit
function.
●
The whistleblowing arrangements in place at the Manager
and other key service providers for their staff to raise
concerns, in confidence, about possible improprieties,
including in relation to the Company.
●
The Manager’s policies and arrangements in relation to
information security, meeting with the Janus Henderson
Chief Information Security Officer.
●
Meeting with representatives of Janus Henderson’s
business resilience and internal audit teams.
●
The Company’s anti-bribery policy, approach to tax
evasion and the confirmations received from third-party
service providers as to whether they have appropriate
procedures in place in these respects.
●
The annual confirmation from the Company’s Depositary
in respect of the safe-keeping of the Company’s assets.
External Audit
Appointment and Tenure of the Auditor
Regulations currently in force require the Company to rotate
audit firms after a period of ten years, which may be extended
where audit tenders are carried out or where more than one
audit firm is appointed to carry out the audit, subject to a
maximum tenure of 20 years.
An audit tender was last carried out in 2023. The appointment
of Ernst & Young LLP (“EY”) as Auditor was recommended to
the Board, and their appointment was confirmed by
shareholders at the 2023 AGM. The financial statements for
the year ended 30 June 2025 will be the second to be audited
by EY and the second year for the audit partner, Mike Gaylor.
The City of London Investment Trust plc Annual Report 2025
50
Audit and Risk Committee Report (continued)
The Committee confirms that the Company is in 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. This order relates to the
frequency and governance of tenders for the appointment
ofthe external auditors and the setting of the policy on the
provision of non-audit services.
Auditor’s Independence
The Committee monitors the Auditor’s independence through
three aspects of its work:
●
the approval of a policy regulating the non-audit services
that may be provided by the Auditor to the Company;
●
assessing the appropriateness of the fees paid to the
Auditor for all work undertaken by them; and
●
reviewing the information and assurances provided by the
Auditor on their compliance with the relevant ethical
standards. The Auditor provided no non-audit services
during the year.
For the year ended 30 June 2025, EY confirmed that all of its
partners and staff involved with the audit were independent
ofany links to the Company, and that these individuals had
complied with their ethics and independence policies and
procedures, which are fully consistent with the FRC’s Ethical
Standards. Having considered the above-mentioned aspects,
the performance and behaviour of the Auditor during the
auditprocess and the assurances received from EY, the
Committee is satisfied that auditor independence and
objectivity are safeguarded.
Audit Fees
The fees payable to the Auditor for audit services in respect of
the year ended 30 June 2025 were £65,000 (2024: £63,000)
(inclusive of VAT).
Policy on Non-Audit Services
The Committee has approved, and keeps under regular
review, the policy on the provision of non-audit services by the
auditor. The policy sets out that the Company’s auditor will not
be considered for non-audit work where this is prohibited by
the current regulations and where it appears to affect their
independence and objectivity. In addition, the provision of any
non-audit services by the auditor is not permitted to exceed
70% of the average annual statutory audit fee for the three
consecutive financial periods preceding the financial period
towhich the cap applies. Such services require approval
inadvance by the Committee, or Audit and Risk Committee
Chair, following due consideration of the proposedservices.
No non-audit services were provided by EY in the year
underreview.
Audit for the Year ended 30 June 2025
In the year under review, EY challenged both the Manager’s
and the Board’s judgements and exercised professional
scepticism. The audit team required detailed evidence of all
metrics, numbers and disclosures made within the Annual
Report to support a robust assessment and evaluation of the
financial information contained therein. As an example, the
Manager provides the Committee and the Auditor with an
analysis of special dividends and the rationale for whether
these should be treated as income or capital. The Auditor’s
review included challenge to the Manager to provide
additional justification or background to the dividends before
confirming whether they concurred with the proposed
treatment.
The Committee faces fewer issues of judgement than might
apply with an operating business. Areas where theCommittee
challenges the Manager include the determination of the fair
market value of debt in order to confirm the appropriate basis
for calculation, and stress testing of the revenue forecast to
support the dividend payment policy and the assumptions in
the viability statement.
The Committee did not consider it necessary to request the
Auditor to look at any specific areas in addition to those
already identified in the audit plan in relation to the audit for
the year ended 30 June 2025.
The Committee is satisfied that the Annual Report for the year
ended 30 June 2025, taken as a whole, is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Company’s position and
performance, business model and strategy.
The City of London Investment Trust plc Annual Report 2025
51
Audit and Risk Committee Report (continued)
In relation to the Annual Report for the year ended 30 June 2025, the following significant issues were considered by
theCommittee:
Significant issue How the issue was addressed
Valuation and ownership of
the Company’s investments
The Directors have appointed the Manager, who outsources administration and
accounting services to BNP Paribas, to perform the valuation of the assets of the
Company in accordance with its responsibilities under the AIFMD rules. As required
under the AIFMD rules, the Manager has adopted a written valuation policy, which may
be modified from time to time. Actively traded investments are valued using stock
exchange prices provided by third-party pricing vendors.
Ownership of listed investments is verified by reconciliation to the Custodian’s records
and the Directors have received quarterly reports from the Depositary, which has
responsibility for overseeing the Company’s operations, including verification of
ownership and valuation.
Recognition of income Income received, including special dividends, is accounted for in line with the Company’s
accounting policy (as set out on page 72). Special dividends, and their treatment as
revenue or capital, have been reviewed by the Committee and the rationale agreed.
The Board reviews revenue forecasts at each Board meeting in support of the
Company’s future dividends.
Maintaining internal controls Information about the internal control and risk management framework adopted by the
Company is set out in the Corporate Governance Statement on pages 48 and 49.
The Committee receives regular reports on internal controls from Janus Henderson,
BNP Paribas, HSBC Bank plc and Computershare Investor Services plc and has access
to the relevant personnel of Janus Henderson who have a responsibility for risk
management and internal audit. The assurance report for one of the Company’s service
providers was qualified by the respective service auditor. The Committee thoroughly
reviewed the instances giving rise to the qualification and received confirmation that the
exceptions identified had no impact on the Company.
The Committee also meets annually with representatives from Janus Henderson and
HSBC Bank plc to discuss and challenge their reports.
Maintenance of investment
truststatus
The Committee has considered regularly the controls in place to ensure that the
regulations for ensuring investment trust status are observed at all times, receiving
supporting documentation from Janus Henderson and BNP Paribas.
Effectiveness of the External Audit
The Committee carried out a post-audit assessment of the
performance of the Auditor. The Committee reviewed and
assessed the robustness of the audit, the level of challenge
offered by the audit team, the quality of the audit team and
the timeliness of delivering the tasks required for the audit
andreporting for the Committee.
The Auditor attended two Committee meetings in the year,
when the Committee was considering the audit plan and the
annual results. An initial audit planning meeting between EY,
BNP Paribas, the Fund Managers and the Manager’s staff
was held. The Committee Chair met with the Auditor prior to
the commencement of the audit and again to review the audit
results prior to these being presented to the Committee.
The Auditor presented and discussed the findings of the
FRC’s latest Audit Quality Inspection Report on EY to the
Committee and reported on the progress made by the firm in
addressing the areas identified for improvement in the prior
year’s report.
In assessing the effectiveness of the audit process, the
Committee Chair invited views from the Directors, the Fund
Managers and other members of the Manager’s staff in
assessing the robustness of the audit, level of challenge
offered by the audit team, the quality of the audit team and
timeliness of delivering the tasks required for the audit and
reporting to the Committee. The Committee also met privately
with the Audit Partner to discuss how the audit operated from
his perspective.
Overall, the Committee considers that the audit quality for the
year ended 30 June 2025 has been high and that the
Manager and EY have worked together effectively. Following
completion of the assessment, the Committee remained
satisfied with the effectiveness of the audit provided by EY.
EYhave indicated their willingness to continue in office and
resolutions re-appointing them as Auditor to the Company
and authorising the Committee to determine their
remuneration will be proposed at the AGM.
Sally Lake
Chair of the Audit and Risk Committee
16 September 2025
The City of London Investment Trust plc Annual Report 2025
52
Nominations Committee Report
Membership
All Directors are members of the Committee. The Chairman
ofthe Board is the Chairman of the Committee but would
notchair meetings when the Committee is considering
appointments for his successor.
Meetings
The Committee meets at least once a year. One additional
meeting was held in the year under review to agree theformat
for the annual Board evaluation.
Role and Responsibilities
The Committee advises the Board on the composition of the
Board and its Committees, in making appointments to the
Board and ensuring suitable succession plans are in place
forthe Directors and the Fund Manager. It also reviews and
monitors the engagement and performance of the Manager
and other third-party service providers.
Its principal responsibilities include: reviewing the structure, size
and composition of the Board and its Committees and leading
the search for suitable candidates to fill roles as required, taking
into consideration the balance of skills, knowledge, experience
and diversity on the Board; ensuring annual performance
evaluations are carried out, discussing the outcomes from those
evaluations and making recommendations to the Board;
considering the proposed election and re-election of Directors
ahead of eachAGM; and evaluating the overall performance
and terms of engagement of the Manager and other third-party
service providers.
Succession Planning and Recruitment
When considering succession planning, the Committee bears
in mind the balance of skills, knowledge, experience and
diversity existing on the Board. Once a decision is made to
recruit an additional Director, a formal job description is drawn
up. The Committee will engage external recruitment agencies
to facilitate the search. The Committee will assess candidates
against objective criteria and with due regard for the benefits
ofdiversity on the Board (including gender, social and ethnic
backgrounds, as well as cognitive and personal strengths),
taking care that any candidates recommended for appointment
will be able to allocate sufficient time to the Company to
discharge their responsibilities fully and effectively.
New appointments to the Board are made on a staggered
basis in line with the tenure policy, ensuring ongoing
refreshment combined with the importance of maintaining
continuity and corporate knowledge. As part of the evaluation
process, the Committee reviews the tenure of the Directors.
Atthe date of this report, the Directors have been on the
Boardfor between 1 and 7years.
In the normal course of events, Mr Holmes will be due to retire
at the 2027 AGM. The Committee currently intends to
commence steps to recruit a successor to Mr Holmes during
the final quarter of 2026.
The Committee also reviews and recommends to the Board
the Directors seeking re-election. Recommendation is not
automatic and will follow a process of evaluation of each
Director’s performance and consideration of the Director’s
independence, including their time commitment. The
Committee also takes into account the mix of skills and
experience of the current Board members.
Directors’ Performance Review
Each year, the Committee assesses the composition of the
Board and its performance, including that of individual
Directors. An external review is conducted every three years,
and this year the evaluation was carried out by Stogdale St
James (“Stogdale”). The appraisal of the Chairman was led by
Clare Wardle as the Senior Independent Director, assisted by
Stogdale. Stogdale have no connection with the Company or
any of the Directors.
The evaluation was conducted by way of in-depth interviews
individually with each Director, and also with the Fund
Managers, Corporate Secretary, various members of the JHI
Investment Trusts team and the Corporate Broker.
The areas considered included Board composition and
dynamics, management of meetings and support from the
Manager in this respect, the appropriateness of the
investment strategy and performance, the quality of the
Board’s understanding of shareholders’ views and the
Manager’s sales and marketing activities, succession
planning and priorities for change. A review of the
performance and effectiveness of the Board Committees
wasincluded as part of the evaluation process.
Following completion of the review, the Committee concluded
that the Board remained fit for purpose and worked in a
harmonious, effective and collegiate manner. Directors gave
an appropriate level of focus and discussion to the oversight
of strategy and performance. There was a very good range of
skills represented on the Board and a clear understanding of
the risks facing the Company. The Board Committees were
operating effectively. Mrs Wardle also reported that the
Chairman provided effective leadership. No areas of material
weakness or concern were identified by the external evaluator.
The Committee accordingly recommended to the Board that
it should support those Directors seeking re-election at the
2025 AGM.
Diversity and Inclusion
All Board appointments are subject to a formal, rigorous
andtransparent procedure. The Company seeks to ensure
that any Board vacancies are filled by the most qualified
candidates based on objective criteria and merit and in the
context of the skills, knowledge and experience that are
needed for the Board to be effective.
Whilst the Board does notfeel that it would be appropriate to
use specific diversity targets, given its small size, the Directors
acknowledge thatdiversity is important to ensure that the
The City of London Investment Trust plc Annual Report 2025
53
Nominations Committee Report (continued)
Company can draw on a broad range of backgrounds, skills,
knowledge, experience and perspectives to achieve effective
stewardship of the Company. An integral part of the
appointment process includes the consideration of diversity in
its broadest sense and the Nominations Committee ensures
that long lists of potential non-executive Directors include
diverse candidates of appropriate experience and merit.
In all the Nominations Committee’s activities, there will be
nodiscrimination on the grounds of gender, race, ethnicity,
religion, sexual orientation, age or physical ability.
As at 30 June 2025, two out of the five Directors (40%) were
women and the two women Directors both held senior
positions, one being the Senior Independent Director and the
other the Audit and Risk Committee Chair. The Board was also
meeting the recommendation that at least one Director is from
an ethnic minority background.
The following tables set out the gender and ethnic diversity of
the Board at 30 June 2025:
Gender identity
Number of
Board
members
Percentage
of the Board
Number of
senior
positions on
the Board
1
Men 3 60 1
Women 2 40 2
Ethnic background
White British or other
White (including
minority-white groups) 4 80 3
Asian/Asian British 1 20 –
1 Senior positions include Chairman, Senior Independent Director and Audit and
Risk Committee Chair
As an investment trust company with solely independent,
non-executive Directors, the Company does not have a Chief
Executive or a Chief Financial Officer and has no employees.
Accordingly, there are no disclosures about executive
management positions to be included. The role of Audit and
Risk Committee Chair is considered to be a senior position
and has been included in the above tables. The categories for
ethnic groups which are not represented on the Board are not
included in the ethnic background table. The information in
the tables was provided by individual Directors in response to
a request from the Company.
There have been no changes to the Board or the roles of
Directors since 30June 2025.
Performance of Third-Party
ServiceProviders
Each year, the Committee carries out an evaluation of
theManager and the Company’s key third-party service
providers and their respective terms of engagement.
The Committee’s evaluation of the Manager includes assessing
whether the contractual arrangements and remuneration
structure in place remain appropriate and competitive and in
theinterests of shareholders as a whole. The Committee also
considers the arrangements in place at Janus Henderson in
terms of a short-term incapacity of the Fund Manager and
succession planning for the Fund Manager over the longer
term. The evaluation includes consideration of the quality of
the team involved in all aspects of servicing the Company and
a review of the stability of the management group and its
business priorities.
Following its review, the Committee concluded that it was in
the interests of shareholders as a whole to recommend to
theBoard that the appointment of the Manager should
continue on the existing terms. The Committee also
recommended the continuation of the appointment of
theother keythird-party service providers.
Sir Laurie Magnus CBE
Nominations Committee Chairman
16 September 2025
The City of London Investment Trust plc Annual Report 2025
54
Directors’ Remuneration Report
Remuneration Policy
The Remuneration Policy (“the Policy”) sets out the
principles applied in the remuneration of the Company’s
Directors. ThePolicy was last approved by shareholders at
the AGM on 31 October 2023. It will continue in force until
the AGM in 2026.
The Board has not established a separate remuneration
committee and matters relating to Directors’ remuneration are
dealt with by the Board as a whole. Individual Directors do not
participate in discussions relating to their own remuneration.
The appropriateness and relevance of the Policy is reviewed
at least annually, particularly in terms of whether the policy
supports the Company’s long-term sustainable success.
Indetermining the Policy,the Board takes into account all
factors which it deemsnecessary, including relevant legal and
regulatory requirements, the provisions and recommendations
of the UKCode and the AIC Code and fees paid to directors
of comparable investment trusts.
The objective of the Policy is to attract, retain and motivate
non-executive Directors of the quality required to manage the
Company successfully. The Company’s approach is that fees
payable to the non-executive Directors should reflect the time
spent on the Company’s affairs, reflect the responsibilities
borne by the Directors, and be sufficient to promote the
long-term success of the Company.
Directors are remunerated in the form of fees payable to the
Director personally quarterly in arrears. Fees are pro-rated
where a change takes place during a financial year. The total
annual aggregate fees payable to Directors shall not
exceed£350,000.
The Chairman of the Board is paid a higher fee in recognition
of his additional responsibilities, as is the Senior Independent
Director and Chair of the Audit and Risk Committee. The
Directors may be reimbursed for all reasonable and properly
documented expenses incurred in the performance of their
duties. The level of fees paid to each Director is reviewed
annually, although such a review may not necessarily result in
any change to therates. The level of fees paid to the directors
of other investment companies of a similar size and nature is
taken into account when carrying out the review in order to
avoid and manage conflicts of interest in determining
remuneration levels. The Board may amend the level of
remuneration paid to individual Directors within the
parameters of the Policy.
No Director is eligible to receive bonuses, pension benefits,
share options or other benefits and no long-term incentive
schemes are in place.
The Policy, irrespective of any changes, is put to shareholders
at intervals of not more than three years with the next approval
due to be sought at the AGM in 2026.
Letters of appointment
All Directors are non-executive and are appointed under a
Letter of Appointment. No Director has a service contract with
the Company. There are no set notice periods and a Director
may resign by notice in writing to the Board at any time.
Nocompensation is payable for loss of office.
Recruitment principles
All Directors, including any new appointments to the Board,
are paid at the same rate. The Chairman of the Board,
SeniorIndependent Director and Chair of the Audit and Risk
Committee are paid higher fees in recognition of their
additional responsibilities.
The Board will not pay any introductory fee or incentive to any
person to encourage them to become a Director, but may pay
the fees of search and selection specialists in connection with
the appointment of any new non-executive Director.
The Company intends to appoint only non-executive Directors
for the foreseeable future.
Views of shareholders
Any views expressed by shareholders on the fees being paid
to Directors would be taken into consideration by the Board
when reviewing levels of remuneration.
Annual Report on Remuneration
This report is submitted in accordance with Schedule 8
ofTheLarge and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 as amended (the
“Regulations”). The report also meets the relevant
requirements of the Companies Act 2006 (the “Act”) and the
UK Listing Rules of the FCA and describes how the Board has
applied the principles relating toDirectors’ remuneration.
As required by the Act, an ordinary resolution to approve the
Directors’ Remuneration Report will be proposed at the
forthcoming AGM.
The City of London Investment Trust plc Annual Report 2025
55
Directors’ Remuneration Report (continued)
The Company’s Auditor is required to report on certain
information contained within this report; where information
setout below has been audited, it is indicated as such.
All Directors are non-executive and the Company has no chief
executive officer or employees; as such some of the reporting
requirements contained in the Regulations are not applicable
and have not been reported on, including the requirement for
a future policy table and an illustrative representation of the
level of remuneration that could be received by each individual
Director. It is believed that all relevant information is disclosed
within this report in an appropriate format.
The Board has not been provided with advice or services by
any person in respect of its consideration of the Directors’
remuneration.
Statement from the Chairman
As the Company has no employees and the Board comprises
entirely non-executive Directors, the Board hasnot
established a separate Remuneration Committee. Directors’
remuneration is reviewed annually and is determined by the
Board as a whole within the parameters approved by
shareholders.
During the year, the Board reviewed the fees paid by other
investment companies in the AIC UK Equity Income sector
(the Company’s peer group), fees paid to directors of other
large investment trusts with assets of over £1 billion (excluding
sector specialists) and those paid by the Janus Henderson
managed investment trusts. The Board also took into
consideration the prevailing rate of inflation, looking at RPI,
CPI, as well as the increasing responsibilities and time
commitment required of Directors. Following consideration,
the Directors’ fees were increased with effect from 1January
2025 by 2.3% (rounded to the nearest £100), in line with CPI.
The new rates are as set out in the table below. Theincreases
were to ensure that the Directors are properly remunerated for
their services to the Company and so that the Company can
remain competitive when seeking new Directors. There have
been no other major decisions on Directors’ remuneration or
any other changes to the remuneration paid to each individual
Director in the year underreview.
The Board is satisfied that the changes to the remuneration
of the Directors are compliant with the Directors’
Remuneration Policy approved by shareholders at the 2023
AGM. There will be no significant change in the way that the
Remuneration Policy will be implemented in the course
ofthe next financial year.
Directors’ annual fees
The current fees for specific responsibilities are set out in
thetable below. Other than the Chair of the Audit and Risk
Committee, no fees are payable for membership of the
Board’s Committees.
Role
Rate at
30 June 2025
£
Rate at
30 June 2024
£
Chairman of the Board 56,500 55,200
Chair of the Audit and Risk
Committee 42,500 41,500
Senior Independent Director 38,900 38,000
Other non-executive Directors 35,300 34,500
Performance
The chart below illustrates the total shareholder return for a
holding in the Company’s shares over the ten-year period to
30 June 2025 as compared with the FTSE All-Share Index,
which was adopted as the Company’s benchmark index with
effect from 1 July 2019.
Total return performance over the ten-year period
to 30June 2025
City of London share price total return, assuming the investment
of £100 on 30 June 2015 and the reinvestment of all dividends
(excluding dealing expenses)
FTSE All-Share Index total return, assuming the notional investment of
£100 on 30 June 2015 and the reinvestment of all income (excluding
dealing expenses)
Sources: Morningstar Direct and LSEG Datastream
£
2015 2018 2021 20222020201920172016 2023 20252024
80
100
120
140
160
180
200
The City of London Investment Trust plc Annual Report 2025
56
Directors’ Remuneration Report (continued)
Directors’ remuneration (audited)
The remuneration paid to the Directors who served during the year ended 30 June 2025 and 30 June 2024 was as follows:
Year ended
30 June 2025
Total salary and
fees
£
Year ended
30 June 2024
Total salary and
fees
£
Year ended
30 June 2025
Total expenses
and taxable
benefits
£
Year ended
30 June 2024
Total expenses
and taxable
benefits
£
Year ended
30 June 2025
Total
£
Year ended
30 June 2024
Total
£
Ominder Dhillon 34,900 33,700 250 815 35,150 34,515
Ted Holmes 34,900 33,700 – – 34,900 33,700
Sally Lake
1
36,804 – – – 36,804 –
Sir Laurie Magnus
2
55,850 53,900 – – 55,850 53,900
Clare Wardle 38,550 37,000 – – 38,550 37,000
Samantha Wren
3
13,833 40,500 – – 13,833 40,500
Total 214,837 198,800 250 815 215,087 199,615
Notes:
The amounts paid by the Company to the Directors were for services as non-executive Directors. The table above omits other columns set out in the relevant regulations
because no payments of other types such as performance-related pay and pension-related payments were made. No variable pay was paid to any Director
1 Appointed as a non-executive Director on 1 August 2024 and appointed as Chair of the Audit and Risk Committee on 31 October 2024
2 Chair and highest paid Director
3 Chair of the Audit and Risk Committee until resignation on 31 October 2024
No other remuneration or compensation was paid or payable by the Company during the year to any of the current or former
Directors or third parties.
Annual change in Directors’ remuneration
The table below sets out the annual percentage change in
Directors’ fees for the Directors for the last five years in
respect of each Director that has served for a minimum of
twofinancial years.
Director
Year to
30 June
2025
%
Year to
30 June
2024
%
Year to
30 June
2023
%
Year to
30 June
2022
%
Year to
30 June
2021
%
Ominder Dhillon
1
3.6 5.0 n/a n/a n/a
Ted Holmes 3.6 5.0 4.4 2.5 1.9
Sally Lake
2
n/a n/a n/a n/a n/a
Sir Laurie Magnus
3
3.6 5.0 4.4 16.3
4
n/a
Clare Wardle
5
3.9 4.7 7.5
6
9.6
6
n/a
1 Appointed a Director on 1 September 2021
2 Appointed a Director on 1 August 2024
3 Appointed a Director on 1 March 2020
4 Sir Laurie Magnus was appointed Chairman on 27 October 2020.
The%increase reflects his change of role during the course of the year to
30June 2021 and the additional fee associated with this position
5 Appointed a Director on 1 November 2019
6 Clare Wardle was appointed as Senior Independent Director on 28 October
2021. The % increase reflects her change of role during the course of the year
to 30 June 2022
Directors’ interests in shares (audited)
Ordinary shares of 25p
Beneficial interest 30 June 2025
1 July 2024
or date of appointment,
if later
Ominder Dhillon 5,943 5,943
Ted Holmes 10,000 10,000
Sally Lake 9,200 –
Sir Laurie Magnus 110,000 110,000
Clare Wardle 16,447 16,447
Samantha Wren
1
n/a 9,820
1 Resigned as a Director on 31 October 2024
The interests of the Directors and their connected persons in
the ordinary shares of the Company at the beginning and end
of the financial year are shown in the above table. There have
been no changes toany of the Directors’ interests in the
period from 1 July 2025to the date of this report. No Director
has any interests in the preference or preferred stock of
theCompany.
The Company does not have a shareholding requirement
forDirectors.
The City of London Investment Trust plc Annual Report 2025
57
Directors’ Remuneration Report (continued)
Relative importance of spend on pay
In order to show the relative importance of spend on pay, the table below sets out the total level of remuneration compared with
the distributions to shareholders by way of dividends. In the year under review, 2,530,895 ordinary shares were bought back by
the Company into treasury. There were no other significant distributions, payments or other uses of the Company’s net return or
cash flow deemed to assist in the understanding of the relative importance of spend on pay.
2025
£
2024
£
Change
£
Change
%
Total Directors’ remuneration
1
215,087 199,615 15,472 7.8
Ordinary dividends paid 104,438,793 102,343,736 2,095,057 2.1
1 The higher % increase in Directors’ remuneration relative to the increase in dividends reflects that there were six Directors on the Board for part of the year to ensure
an orderly handover of the Audit and Risk Committee Chair responsibility
Statement of voting at AGM
At the Company’s last AGM held on 31 October 2024, shareholders approved the Directors’ Remuneration Report in respect
ofthe year ended 30 June 2024. Shareholders last approved the Directors’ Remuneration Policy at the AGM on 31 October 2023.
Resolution
For (including
discretionary) % of total votes
1
Against % of total votes
1
Withheld
Remuneration Policy 6,622,825 99.2 56,004 0.8 53,908
Remuneration Report 6,117,823 99.4 39,464 0.6 30,799
1 Excluding votes withheld
Approval of the Annual Report on Remuneration
The Annual Report on Remuneration was approved by the Board on 16 September 2025.
On behalf of the Board
Sir Laurie Magnus CBE
Chairman
16 September 2025
The City of London Investment Trust plc Annual Report 2025
58
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual
Report, the Directors’ Remuneration Report and the financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the
Directors have prepared the financial statements in
accordance with United Kingdom Generally Accepted
Accounting Practice (UK Accounting Standards, comprising
FRS 102 “The Financial Reporting Standard applicable in the
UK and the Republic of Ireland”, and applicable law). Under
company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and
fair view of the state of affairs of the Company and ofthe net
return or loss of the Company for that period. In preparing
thesefinancial statements, the Directors are required to:
●
select suitable accounting policies and then apply them
consistently;
●
make judgements and accounting estimates that are
reasonable and prudent;
●
state whether applicable UK Accounting Standards,
comprising FRS 102, have been followed, subject to any
material departures disclosed and explained in the
financial statements; and
●
prepare the financial statements on a going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain the
Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Company
and enable them to ensure that thefinancial statements and
the Directors’ Remuneration Report comply with the
Companies Act 2006. They are also responsible
forsafeguarding the assets of the Company and hence for
taking reasonable steps for the prevention and detection of
fraud and otherirregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’ Report
and Statement of Corporate Governance that comply with that
law and those regulations.
The Directors consider that the Annual Report, taken as a whole,
isfair, balanced and understandable and provides the information
necessary for shareholders to assess the Company’s position
and performance, business model and strategy.
Directors’ Responsibility Statement
Each of the Directors, who are listed on pages 38 and 39,
confirms that, to the best of his or her knowledge:
●
the Company’s financial statements, which havebeen
prepared in accordance with UK Accounting Standards on
a going concern basis, give a true and fair view of the
assets, liabilities, financial position and return of the
Company; and
●
the Strategic Report and financial statements include a
fair review of the development and performance of the
business and the position of the Company, together with
a description of the principal risks and uncertainties that
it faces.
On behalf of the Board
Sir Laurie Magnus CBE
Chairman
16 September 2025
The financial statements are published on the website www.cityinvestmenttrust.com.
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
The maintenance and integrity of the website is the responsibility of Janus Henderson; the work carried out by the Auditor
does not involve consideration of these matters and, accordingly, the Auditor accepts no responsibility for any changes
that may have occurred to the Annual Report since it was initially presented on the website.
The City of London Investment Trust plc Annual Report 2025
59
Independent Auditor’s Report to the Members
ofThe City of London Investment Trust plc
Opinion
We have audited the financial statements of The City of London Investment Trust plc (the “Company”) for the year ended 30 June
2025 which comprise the Income Statement, the Statement of Changes in Equity and the Statement of Financial Position and
the related notes 1 to 23, including a summary of significant accounting policies. The financial reporting framework that has been
applied in their preparation is applicable law and United Kingdom Accounting Standards including FRS 102 “The Financial
Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
●
give a true and fair view of the Company’s affairs as at 30 June 2025 and of its profit for the year then ended;
●
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
●
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.
Ourresponsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
abasis for our opinion.
Independence
We are independent of the 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 public interest entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Company and we remain independent
of the Company in conducting the audit.
Conclusions relating to going concern
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. Our evaluation of the Directors’ assessment of the Company’s ability to
continue to adopt the going concern basis of accounting included:
●
Confirming our understanding of the Company’s going concern assessment process by engaging with the Directors and the
Corporate Secretary to determine if all key factors were considered in their assessment.
●
Inspecting the Directors’ assessment of going concern, including the revenue forecast, for the period to 16 September 2026
which is at least 12 months from the date these financial statements are authorised for issue. In preparing the revenue
forecast, the Company has concluded that it is able to continue to meet its ongoing costs as they fall due.
●
Reviewing the factors and assumptions, including the impact of the current economic environment and other significant
events that could give rise to market volatility, as applied to the revenue forecast and the liquidity assessment of the
investments. We considered the appropriateness of the methods used to calculate the revenue forecast and the liquidity
assessment and determined, through testing of the methodology and calculations, that the methods, inputs and assumptions
utilised were appropriate to be able to make an assessment for the Company.
●
Considering the mitigating factors included in the revenue forecast that are within the control of the Company. We reviewed
the Company’s assessment of the liquidity of investments held and evaluated the Company’s ability to sell those investments
to cover the working capital requirements should revenue decline significantly.
●
In relation to the Company’s borrowing arrangements, inspecting the Directors’ assessment of the level of gearing. We
recalculated the Company’s compliance with debt covenants and performed stress testing to assess the likelihood of the
Company breaching the financial covenants as a result of a reduction in the value of the Company’s portfolio.
●
Reviewing the Company’s going concern disclosures included in the annual report in order to assess that the disclosures
were appropriate and in conformity with the reporting standards.
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 Company’s ability to continue as a going concern for the period
assessed by the Directors, being the period to 16 September 2026, which is at least 12 months from the date these financial
statements are authorised for issue.
The City of London Investment Trust plc Annual Report 2025
60
Independent Auditor’s Report to the Members
ofThe City of London Investment Trust plc
(continued)
In relation to the Company’s reporting on how they have 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. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the
Company’s ability to continue as a going concern.
Overview of our audit approach
Key audit matters
●
Risk of incomplete or inaccurate revenue recognition, including the classification of special dividends as
revenue or capital items in the Income Statement.
●
Risk of incorrect valuation or ownership of the investment portfolio.
Materiality
●
Overall materiality of £23.32m which represents 1% of shareholders’ funds.
An overview of the scope of our audit
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit
scope for the Company. This enables us to form an opinion on the financial statements. We take into account size, risk profile,
the organisation of the Company and effectiveness of controls, the potential impact of climate change and changes in the
business environment when assessing the level of work to be performed. All audit work was performed directly by the audit
engagement team.
Climate change
There has been increasing interest from stakeholders as to how climate change will impact companies. The Company has
determined that the impact of climate change could affect the Company’s investments. This is explained in the principal and
emerging risks and uncertainties section on page 30, which forms part of the “Other information,” rather than the audited
financial statements. Our procedures on these disclosures therefore consisted solely of considering whether they are materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appear to be
materially misstated.
Our audit effort in considering climate change was focused on the adequacy of the Company’s disclosures in the financial
statements as set out in note 1(a) and conclusion that there was no further impact of climate change to be taken into account as
the investments are valued based on market pricing as required by FRS 102. We also challenged the Directors’ considerations of
climate change risks in their assessment of going concern and viability and associated disclosures.
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 which 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 our opinion thereon, and we do not provide a separate opinion on these matters.
The City of London Investment Trust plc Annual Report 2025
61
Independent Auditor’s Report to the Members
ofThe City of London Investment Trust plc
(continued)
Risk Our response to the risk
Key observations communicated to the Audit
and Risk Committee
Incomplete or inaccurate revenue
recognition, including the
classification of special dividends
as revenue or capital items in the
Income Statement (as described on
page 52 in the Audit and Risk
Committee Report and as per the
accounting policy set out on page 72.
The total revenue for the year to 30 June
2025 is £112.47m (2024: £109.71m),
consisting primarily of dividend income
from listed equity investments.
The Company received three special
dividends amounting to £0.62m
(2024: £6.46m), of which £0.62m
(2024: £1.04m) was classified as revenue
and £nil (2024: £5.42m) was classified
ascapital.
There is a risk of incomplete or
inaccurate recognition of revenue
through the failure to recognise proper
income entitlements or to apply an
appropriate accounting treatment.
The Directors may be required to
exercise judgement in determining
whether income receivable in the form
ofspecial dividends should be classified
as ‘revenue’ or ‘capital’ in the
IncomeStatement.
We performed the following
procedures:
We obtained an understanding of the
processes and controls surrounding
revenue recognition, including the
classification of special dividends by
performing walkthrough procedures.
For 100% of dividends received and
accrued, we recalculated the income by
multiplying the investment holdings at
the ex-dividend date, traced from the
accounting records, by the dividend
pershare, which was agreed to an
independent data vendor. We also
agreed all exchange rates to an
independent data vendor and agreed
asample of dividend receipts to
bankstatements.
For 100% of dividends accrued,
wereviewed the investee company
announcement to assess whether the
dividend entitlements arose prior to
30 June 2025.
To test completeness of recorded
income, we verified that expected
dividends for each investee company
held during the year had been recorded
as income with reference to investee
company announcements obtained from
an independent data vendor.
For all investments held during the year,
we inspected the type of dividends paid
with reference to an external data
vendor to identify those which were
special dividends. The Company
received three special dividends in the
year, all classified as revenue. The total
value of special dividends were
immaterial to our audit.
The results of our procedures identified
no material misstatement in relation to
the risk of incomplete or inaccurate
revenue recognition, including incorrect
classification of special dividends as
revenue or capital items in the
IncomeStatement.
The City of London Investment Trust plc Annual Report 2025
62
Independent Auditor’s Report to the Members
ofThe City of London Investment Trust plc
(continued)
Risk Our response to the risk
Key observations communicated to the Audit
and Risk Committee
Incorrect valuation or ownership of
the investment portfolio (as described
on page 52 in the Audit and Risk
Committee Report and as per the
accounting policy set out on page 71.
The valuation of the investment portfolio
at 30 June 2025 was £2,455.88m
(2024: £2,246.59m) consisting primarily
of listed investments.
The valuation of the investments held by
the Company is the key driver of the
Company’s net asset value and total
return. Incorrect investment pricing, or a
failure to maintain proper legal title of the
assets held by the Company could have
a significant impact on the net asset
value and the return generated
forshareholders.
The fair value of listed investments is
determined using quoted market bid
prices at close of business on the
reporting date.
The Company participates in stock
lending activity governed by a stock
lending agreement with the custodian,
HSBC. The agreement allows the
custodian to use, for their own
purposes, the collateral posted for the
stocks on loan. There is a risk that
valuation or ownership of the stocks
onloan is incorrect.
We performed the following
procedures:
We obtained an understanding of the
processes surrounding investment
pricing and legal title of listed
investments by performing walkthrough
procedures.
For 100% of investments in the portfolio,
including the stocks on loan and
collateral, we verified the market prices
and exchange rates applied to an
independent pricing vendor and
recalculated the investment valuations
as at the year end.
For all investments in the portfolio, we
obtained the market prices from an
independent pricing vendor for five
business days pre and post the year end
date and calculated the day-on-day
movements to identify any stale prices.
We verified that the listed prices are valid
fair values through review of trading
activity.
We compared the Company’s
investment holdings including the stocks
on loan as at 30 June 2025 to an
independent confirmation received
directly from the Company’s Custodian
and Depositary.
The results of our procedures identified
no material misstatement in relation to
the risk of incorrect valuation or
ownership of the investment portfolio.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on
the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence
the economic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and
extent of our audit procedures.
We determined materiality for the Company to be £23.32m (2024: £20.98m), which is 1% (2024: 1%) of net assets. We believe
that shareholders’ funds provide us with materiality aligned to the key measurement of the Company’s performance.
During the course of our audit, we reassessed initial materiality and found no reason to alter the basis of calculation at year end.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low
level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Company’s overall control environment, our
judgement was that performance materiality was 75% (2024: 50%) of our planning materiality, namely £17.49m (2024: £10.49m).
We have set performance materiality at this percentage due to our past experience of working with the Company which therefore
indicates a lower risk of misstatements, both corrected and uncorrected.
The City of London Investment Trust plc Annual Report 2025
63
Independent Auditor’s Report to the Members
ofThe City of London Investment Trust plc
(continued)
Given the importance of the distinction between revenue and capital for investment trusts, we also applied a separate testing
threshold for the revenue column of the Income Statement of £5.36m (2024: £5.26m) being 5% (2024: 5%) of the revenue net
return before taxation.
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit and Risk Committee that we would report to them all uncorrected audit differences in excess of £1.17m
(2024: £1.05m), which is set at 5% (2024: 5%) of planning materiality, as well as differences below that threshold that, in our view,
warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of
other relevant qualitative considerations in forming our opinion.
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 this 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 course of 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 this gives rise to 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 the other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
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 Directors’ Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we
have not identified material misstatements in the Strategic Report or Directors’ Report.
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, or returns adequate for our audit have not been received from branches
not visited by us; or
●
the 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 Company’s compliance with the provisions of the UK Corporate Governance Code
specified for our review by the UK 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 City of London Investment Trust plc Annual Report 2025
64
Independent Auditor’s Report to the Members
ofThe City of London Investment Trust plc
(continued)
●
Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material
uncertainties identified set out on page 71;
●
Directors’ explanation as to its assessment of the Company’s prospects, the period this assessment covers and why the
period is appropriate set out on page 32;
●
Director’s statement on whether it has a reasonable expectation that the Company will be able to continue in operation and
meets its liabilities set out on page 32;
●
Directors’ statement on fair, balanced and understandable set out on page 59;
●
Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 30;
●
The section of the annual report that describes the review of effectiveness of risk management and internal control systems
set out on page 48; and
●
The section describing the work of the Audit and Risk Committee set out on page 50.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ Responsibilities set out on page 59, 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 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 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
isa 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
inthe aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
Explanation as to what extent the audit was considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to
fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of
the Company and management.
●
We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined
that the most significant are UK GAAP, the Companies Act 2006, the UK Listing Rules, the UK Corporate Governance Code,
the Statement of Recommended Practice for the Financial Statements of Investment Trust Companies as issued by the
Association of Investment Companies, Section 1158 of the Corporation Tax Act 2010 and The Companies (Miscellaneous
Reporting) Regulations 2018.
●
We understood how the Company is complying with those frameworks through discussions with the Audit and Risk
Committee and Company Secretary, review of Board and committee minutes and review of papers provided to the Audit and
Risk Committee.
●
We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might
occur by considering the key risks impacting the financial statements. We identified a fraud risk with respect to the
incomplete or inaccurate revenue recognition through incorrect classification of special dividends as revenue or capital items
in the Income Statement. Further discussion of our approach is set out in the section on key audit matters above.
●
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations.
Our procedures involved review of the reporting to the Directors with respect to the application of the documented policies and
procedures and review of the financial statements to ensure compliance with the reporting requirements of the Company.
The City of London Investment Trust plc Annual Report 2025
65
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s
website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Other matters we are required to address
●
Following the recommendation from the Audit and Risk Committee, we were appointed by the Company on 31 October 2023
to audit the financial statements for the year ending 30 June 2024 and subsequent financial periods.
●
The period of total uninterrupted engagement including previous renewals and reappointments is two years, covering the
year ended 30 June 2025.
●
The audit opinion is consistent with the additional report to the Audit and Risk 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.
Mike Gaylor (Senior statutory auditor)
For and on behalf of Ernst & Young LLP
Statutory Auditor
London
16 September 2025
Independent Auditor’s Report to the Members
ofThe City of London Investment Trust plc
(continued)
The City of London Investment Trust plc Annual Report 2025
66
Financial
Statements
67
Income Statement
Year ended 30 June 2025 Year ended 30 June 2024
Notes
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
2 Gains on investments held at fair
value through profit or loss – 244,522 244,522 – 200,864 200,864
3 Income from investments held at
fair value through profit or loss 112,223 – 112,223 109,335 – 109,335
4 Other interest receivable and
similar income 242 – 242 371 – 371
Gross revenue and
capitalgains 112,465 244,522 356,987 109,706 200,864 310,570
5 Management fee (2,006) (4,680) (6,686) (1,927) (4,497) (6,424)
6 Other administrative expenses (1,228) – (1,228) (1,009) – (1,009)
Net return before finance costs
and taxation 109,231 239,842 349,073 106,770 196,367 303,137
7 Finance costs (1,954) (4,191) (6,145) (1,666) (3,520) (5,186)
Net return before taxation 107,277 235,651 342,928 105,104 192,847 297,951
8 Ta xation (812) – (812) (533) – (533)
Net return after taxation 106,465 235,651 342,116 104,571 192,847 297,418
9 Return per ordinary share –
basic and diluted 21.57p 47.74p 69.31p 20.87p 38.48p 59.35p
The total columns of this statement represent the Company’s Income Statement. The revenue return and capital return columns
are supplementary to this and are prepared under guidance published by the Association of Investment Companies. All revenue
and capital items in the above statement derive from continuing operations. The Company has no recognised gains or losses
other than those recognised in the Income Statement.
The notes on pages 71 to 86 form part of these financial statements
68
The City of London Investment Trust plc Annual Report 2025
Statement of Changes in Equity
Notes Year ended 30 June 2025
Called up
share capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Other capital
reserves
£’000
Revenue
reserve
£’000
Total
£’000
At 1 July 2024 125,666 1,072,624 2,707 849,910 46,621 2,097,528
Net return after taxation – – – 235,651 106,465 342,116
17, 19 Buyback of 2,530,895
ordinary shares for treasury – – – (11,154) – (11,154)
17, 18, 19 Sale of 1,685,000 ordinary
shares from treasury – 855 – 7,086 – 7,941
10 Dividends paid – – – – (104,392) (104,392)
At 30 June 2025 125,666 1,073,479 2,707 1,081,493 48,694 2,332,039
Notes Year ended 30 June 2024
Called up
share capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Other capital
reserves
£’000
Revenue
reserve
£’000
Total
£’000
At 1 July 2023 124,339 1,053,061 2,707 691,463 44,322 1,915,892
Net return after taxation – – – 192,847 104,571 297,418
17, 19
Buyback of 8,301,867
ordinary shares for treasury – – – (34,400) – (34,400)
17, 18 Issue of 5,310,000 new
ordinary shares 1,327 19,563 – – – 20,890
10 Dividends paid – – – – (102,272) (102,272)
At 30 June 2024 125,666 1,072,624 2,707 849,910 46,621 2,097,528
The notes on pages 71 to 86 form part of these financial statements
69
The City of London Investment Trust plc Annual Report 2025
Statement of Financial Position
Notes
30 June 2025
£’000
30 June 2024
£’000
Fixed assets
11 Investments held at fair value through profit or loss
Listed at market value in the United Kingdom 2,163,235 1,657,638
Listed at market value overseas 190,162 216,147
Investments on loan 102,131 372,460
12 Investment in subsidiary undertakings 347 347
2,455,875 2,246,592
Current assets
13 Debtors 14,443 12,911
14,443 12,911
14 Creditors: amounts falling due within one year (22,552) (46,307)
Net current liabilities (8,109) (33,396)
Total assets less current liabilities 2,447,766 2,213,196
15 Creditors: amounts falling due after more than one year (115,727) (115,668)
Net assets 2,332,039 2,097,528
Capital and reserves
17 Called up share capital 125,666 125,666
18 Share premium account 1,073,479 1,072,624
19 Capital redemption reserve 2,707 2,707
19 Other capital reserves 1,081,493 849,910
20 Revenue reserve 48,694 46,621
21 Total shareholders’ funds 2,332,039 2,097,528
21 Net asset value per ordinary share - basic and diluted 472.53p 424.29p
The financial statements on pages 68 to 86 were approved by the Board of Directors on 16 September 2025 and signed on its
behalf by:
Sir Laurie Magnus CBE
Chairman
The notes on pages 71 to 86 form part of these financial statements
Registration number: 34871
70
The City of London Investment Trust plc Annual Report 2025
Notes to the Financial Statements
1 Accounting policies
(a) Basis of accounting
The Company is a registered investment company as defined in Section 833 of the Companies Act 2006 and is
incorporated in the UK. It operates in the UK and is registered at the address on page 103.
The financial statements have been prepared in accordance with the Companies Act 2006, FRS 102, the Financial
Reporting Standard applicable in the UK and Republic of Ireland, and with the Statement of Recommended Practice:
Financial Statements of Investment Trust Companies and Venture Capital Trusts (“the SORP”) issued in July 2022 by the
Association of Investment Companies.
The principal accounting policies applied in the presentation of these financial statements are set out below. These policies
have been consistently applied to all the years presented.
As an investment fund the Company has the option, which it has taken, not to present a cash flow statement. A cash flow
statement is not required when an investment fund meets all the following conditions: substantially all of the entity’s
investments are highly liquid, substantially all of the entity’s investments are carried at market value, and the entity provides
a Statement of Changes in Equity. The Directors have assessed that the Company meets all of these conditions.
The financial statements have been prepared under the historical cost basis except for the measurement at fair value of
investments. In applying FRS 102, financial instruments have been accounted for in accordance with Section 11 and 12 of
the standard. All of the Company’s operations are of a continuing nature.
The financial statements of the Company’s three subsidiaries have not been consolidated on the basis of immateriality.
Consequently, the financial statements present information about the Company as an individual entity. The Directors
consider that the values of the subsidiary undertakings are not less than the amounts at which they are included in the
financial statements.
The preparation of the Company’s financial statements on occasion requires the Directors to make judgements, estimates
and assumptions that affect the reported amounts in the primary financial statements and the accompanying disclosures.
These assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of
assets or liabilities affected in the current and future periods, depending on circumstance.
The decision to allocate special dividends as income or capital and the allocation of expenses to income or capital are
judgements taken by the Directors. Neither of these have any impact on net assets but do impact the net revenue return
that is available to pay dividends from current year revenue in any specific year. The Directors believe that any accounting
judgements or estimates applied to this set of financial statements do not create significant risk of material adjustments in
the future to the carrying amount of assets and liabilities.
(b) Going concern
The assets of the Company consist of securities that are readily realisable. As set out in the Viability Statement, the Directors
consider three model scenarios that stress test the revenue reserves. None of the results from these scenarios would
threaten the viability of the Company and its ability to continue as a going concern. The Directors have also considered the
current geopolitical and macroeconomic uncertainties and the potential for sudden catastrophic events such as pandemics,
conflict and climate events, including cash flow forecasting, a review of covenant compliance including the headroom
abovethe most restrictive covenants and an assessment of the liquidity of the portfolio. They have concluded that the
Company is able to meet its financial obligations, including the repayment of the bank overdraft, as they fall due for a period
to 16 September 2026, which is at least 12 months from the date of approval of the financial statements. Having assessed
these factors, the principal risks and other matters discussed in connection with the viability statement, the Board has
determined that it is appropriate for the financial statements to be prepared on a going concern basis.
(c) Valuation of investments held at fair value through profit or loss
Listed investments are valued at fair value, which is deemed to be closing bid market prices or the last traded price
depending on the convention of the exchange on which the investment is quoted.
The only unquoted investments are the Company’s subsidiaries which are valued at the net asset value according to their
latest financial statements and this is considered to be fair value.
Changes in the fair value of investments held at fair value through profit or loss and gains and losses on disposal are
recognised in the Income Statement as “Gains on investments held at fair value through profit or loss”. Transaction costs
incurred on the purchase and disposal of investments are recognised as a capital item in the Income Statement. All
purchases and sales are accounted for on a trade date basis.
71
The City of London Investment Trust plc Annual Report 2025
Notes to the Financial Statements (continued)
1 Accounting policies (continued)
(d) Foreign currency
The results and financial position of the Company are expressed in pounds sterling, which is the functional currency and
presentational currency of the Company. Sterling is the functional currency because it is the currency of the primary
economic environment in which the Company operates.
Transactions recorded in overseas currencies during the year are translated into sterling at the appropriate daily exchange
rates. Assets and liabilities denominated in overseas currencies at the Statement of Financial Position date are translated
into sterling at the exchange rates ruling at that date.
Any gains or losses on the translation of foreign currency balances, whether realised or unrealised, are taken to the capital
or to the revenue return of the Income Statement, depending on whether the gain or loss is of a capital or revenue nature.
(e) Income
Dividends receivable from equity shares are taken to the revenue return on an ex-dividend basis except where, in the
opinion of Directors, the dividend is capital in nature in which case it is taken to the capital return. Special dividends are
recognised on an ex-dividend basis and treated as capital or revenue depending on the facts and circumstances of each
dividend. Bank interest and stock lending revenue are accounted for on an accruals basis.
The ordinary element of scrip dividends received in lieu of cash dividends is recognised as revenue. Any enhancement
above the cash dividend is treated as capital.
Where the Company enters into a commitment to underwrite an issue of securities in exchange for the receipt of
commission, this creates a derivative financial instrument. Any such derivatives are recognised initially at fair value and are
subsequently re-measured at fair value, with the related gains and losses being reflected in the Income Statement. Net
losses arising from derivatives, where the actual or expected loss from taking up the securities underwritten exceeds the
commission income, are allocated to the capital return. Net gains are allocated to the revenue return.
Fees earned from stock lending are accounted for on an accruals basis and shown in the revenue return based on
amounts to which the Company is entitled. This is after deduction of amounts withheld by the counterparty arranging the
stock lending facility. The stock lending accounting policy is set out in note 16.3.
(f) Management and other administrative expenses and finance costs
All expenses and finance costs are accounted for on an accruals basis. In accordance with the Board’s expectation, over
the long term, that investment returns will be attributable 70% to capital and 30% to revenue, the Company charges to
capital 70% of the finance costs (excluding dividends payable on the preference and preferred ordinary stocks) and
management fees with the remaining 30% being charged to revenue. Other administrative expenses are charged 100%
torevenue except where they relate directly to a capital transaction.
(g) Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on the taxable profit for the year. Taxable profit differs from net profit as reported in the
Income Statement because it excludes items of income or expense that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using the effective tax
rate of corporation tax for the accounting period.
The tax effect of different items of expenditure is allocated between the capital return and revenue return using the Company’s
effective rate of tax for the year. In line with the recommendations of the SORP, the allocation method used to calculate tax relief
on expenses presented against capital returns in the supplementary information in the Income Statement is the “marginal
basis”. Under this basis, if taxable income is capable of being offset entirely by expenses presented in the revenue return
column of the Income Statement, then no tax relief is transferred to the capital return column.
Deferred taxation is provided on all timing differences that have originated but not reversed by the Statement of Financial
Position date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will
be suitable profits from which the future reversal of timing differences can be deducted. Any liability to deferred tax is provided
at the average rate of tax expected to apply based on tax rates and laws that have been enacted or substantially enacted at the
Statement of Financial Position date. Deferred tax assets and liabilities are not discounted to reflect the time value of money.
72
The City of London Investment Trust plc Annual Report 2025
Notes to the Financial Statements (continued)
1 Accounting policies (continued)
(h) Borrowings
Overdrafts and secured notes are initially recorded at the value of the proceeds received, net of direct issue costs. They are
subsequently measured at amortised cost. Finance costs, including interest payable, premiums payable on settlement or
redemption and direct issue costs, are accounted for on an accruals basis in the Income Statement using the effective
interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the
period in which they arise.
(i) Preference stocks
The preference and preferred ordinary stocks have been assessed against the criteria set out in section 22.5 of FRS 102
and are deemed to be debt and are therefore classified as financial liabilities. The dividends associated with the preference
and preferred ordinary stocks are fixed amounts paid in priority to dividends on ordinary shares and on a winding up are
repaid in priority to ordinary shareholders. Dividends in respect of preference and preferred ordinary stocks are charged
fully to the Company’s revenue return within finance costs.
(j) Dividends payable to shareholders
Dividends payable to shareholders are recognised in the financial statements when they are paid, or in the case of final
dividends, when they are approved by shareholders. Dividends are disclosed in the Statement of Changes in Equity.
(k) Issue and repurchase of ordinary shares and associated costs
The proceeds from the issue of new ordinary shares (including those relating to the sale of shares out of treasury) and the
aggregate cost of repurchasing ordinary shares (including those to be held in treasury) are taken directly to equity and dealt
with in the Statement of Changes in Equity. Issue costs incurred in respect of shares sold out of treasury are offset against
proceeds received and dealt with in other capital reserves. Share issues and repurchase transactions are accounted for on
a trade date basis.
(l) Capital and reserves
Called up share capital represents the nominal value of ordinary shares issued.
The share premium account represents the premium above nominal value received by the Company on issuing shares
net of issue costs and proceeds of sales of shares held in treasury in excess of the weighted average purchase price paid
by the Company to repurchase the shares.
The revenue reserve represents accumulated revenue profits retained by the Company that have not currently been
distributed to shareholders as a dividend.
The capital redemption reserve represents the nominal value of ordinary shares, preference stock and preferred ordinary
stock that have been repurchased and cancelled.
Other capital reserves are split into two components, the capital reserve arising on investments sold and the capital
reserve arising on revaluation of investments held. The following analyses what is accounted for in each of these
components.
Capital reserve arising on investments sold
The following are accounted for in this reserve: gains and losses on disposals of investments; expenses and finance costs
allocated to capital net of tax relief; realised foreign exchange differences of a capital nature; and cost of repurchasing
ordinary share capital.
Capital reserve arising on revaluation of investments held
The following are accounted for in this reserve: increases and decreases in the valuation of investments held at the year
end; and unrealised foreign exchange differences of a capital nature.
(m) Distributable reserves
The Company’s capital reserve arising on investments sold and revenue reserve may be distributed by way of a dividend.
There may however, be other factors that restrict the value of reserves that can be distributed. In the case of the Company,
there are small priority amounts that are payable to preference stock and preferred stockholders, which amount to less
than 1% of distributable reserves at 30 June 2025. In addition, unrealised fair value losses on investments held would be
deducted from distributable reserves, but at 30 June 2025, the Company had unrealised fair value gains of £683,071,000.
73
The City of London Investment Trust plc Annual Report 2025
Notes to the Financial Statements (continued)
2 Gains on investments held at fair value through profit or loss
2025
£’000
2024
£’000
Gains on the sale of investments based on historical cost 65,072 44,765
Revaluation gains recognised in previous years (50,280) (3,835)
Gains on investments sold in the year based on carrying value at the previous statement of
financial position date 14,792 40,930
Revaluation of investments held at 30 June 229,729 160,581
Exchange gains/(losses) 1 (647)
Total gains on investments held at fair value through profit or loss 244,522 200,864
3 Income from investments held at fair value through profit or loss
2025
£’000
2024
£’000
UK dividends:
Listed - ordinary dividends
97,526 94,307
Listed - special dividends
616 985
98,142 95,292
Other dividends:
Dividend income – overseas investments 8,665 10,678
Dividend income – overseas special dividends – 59
Dividend income – UK REIT 5,416 3,306
14,081 14,043
112,223 109,335
4 Other interest receivable and similar income
2025
£’000
2024
£’000
Bank interest
1 84
Underwriting commission (allocated to revenue)
1
5 45
Stock lending revenue
236 242
242 371
1 During the year the Company was not required to take up shares in respect of its underwriting (2024:none)
Stock lending revenue has been shown net of brokerage fees of £59,000 (2024: £61,000).
74
The City of London Investment Trust plc Annual Report 2025
Notes to the Financial Statements (continued)
5 Management fee
2025 2024
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Management fee 2,006 4,680 6,686 1,927 4,497 6,424
A summary of the terms of the Management Agreement is given on page 24 and in note 23 on page 86.
Details of apportionment between revenue and capital can be found in note 1 on page 72.
6 Other administrative expenses
2025
£’000
2024
£’000
Directors’ fees and expenses (see Directors’ Remuneration Report on page 57) 215 200
Auditors’ remuneration – for statutory audit services
1
65 63
Marketing 377 172
Bank charges (overdraft facility fees) 10 –
Annual and Half Year reports 28 53
Registrar’s fees 80 93
AIC 23 22
Listing fees 219 219
Advisory and consultancy fees 75 63
Depositary fees 63 58
Other expenses 73 66
1,228 1,009
1 Includes VAT
All transactions with Directors are disclosed in the Directors’ Remuneration Report and are related party transactions.
7 Finance costs
2025 2024
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Interest on secured notes repayable wholly or partly
– after five years (includes amortisation of secured
notes issue costs) 1,178 2,748 3,926 1,171 2,733 3,904
Bank overdraft interest 619 1,443 2,062 338 787 1,125
Dividends per share:
– cumulative first preference stock 18 – 18 18 – 18
– non–cumulative second preference stock 21 – 21 21 – 21
– non-cumulative preferred ordinary stock 118 – 118 118 – 118
1,954 4,191 6,145 1,666 3,520 5,186
Details of apportionment between revenue return and capital return can be found in note 1 on page 72.
75
The City of London Investment Trust plc Annual Report 2025
Notes to the Financial Statements (continued)
8 Taxation
Analysis of tax charge for the year
2025 2024
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Analysis of tax charge for the year
Overseas withholding tax 1,108 – 1,108 952 – 952
Less: overseas withholding tax recoverable (296) – (296) (419) – (419)
812 – 812 533 – 533
The Company’s profit for the accounting year is taxed at 25% (2024: 25%). The tax charge for the year is lower than the
corporation tax rate. The differences are explained below:
Factors affecting the tax charge for the year
2025 2024
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Net return before taxation 107,277 235,651 342,928 105,104 192,847 297,951
Corporation tax at 25% (2024: 25%) 26,819 58,913 85,732 26,276 48,212 74,488
Effects of:
Non-taxable UK dividends (24,391) – (24,391) (23,448) – (23,448)
Non-taxable overseas dividends (2,568) – (2,568) (3,060) – (3,060)
Overseas tax suffered 812 – 812 533 – 533
Expenses not deductible for tax purposes – – – 1 – 1
Excess management expenses 101 2,218 2,319 192 2,004 2,196
Preference and preferred ordinary dividends not
allowable for tax 39 – 39 39 – 39
Net capital gains not subject to tax – (61,131) (61,131) – (50,216) (50,216)
812 – 812 533 – 533
Investment trusts are exempt from corporation tax on capital gains provided that the Company complies with tests under
Section 1158 of the Corporation Tax Act 2010.
Deferred taxation
No provision for deferred taxation has been made in the current or prior accounting year. The Company has not provided
for deferred tax on capital gains or losses arising on the revaluation and disposal of investments as it is exempt from tax on
these items because of its investment trust status.
Factors that may affect future tax charges
The Company can offset management fees, other administrative expenses and interest costs against taxable income to
eliminate any tax charge on such income. The tax legislation refers to these as management expenses (management fees
and other administrative expenses) and non-trade loan relationship deficits (interest costs) and these are captured together
under the heading “Excess management expenses” in the table above. Where these are not fully utilised, they can be
carried forward to future years. As the Company is unlikely to generate future taxable profits to utilise these amounts, the
Company cannot recognise an asset to reflect them, but must still disclose the deferred tax amount carried forward arising
from any unutilised amounts.
Consequently, the Company has not recognised a deferred tax asset totalling £42,680,000 (2024: £41,397,000) arising
as a result of having unutilised management expenses and unutilised non-trade loan relationship deficits totalling
£170,721,000 (2024: £165,588,000). These expenses will only be utilised, to any material extent, if changes are made
either to the tax treatment of the capital gains made by investment trusts or to the Company’s investment profile which
require them to be used.
76
The City of London Investment Trust plc Annual Report 2025
Notes to the Financial Statements (continued)
9 Return per ordinary share – basic and diluted
The return per ordinary share is based on the net return attributable to the ordinary shares of £342,116,000
(2024: £297,418,000) and on 493,599,088 ordinary shares (2024: 501,134,608), being the weighted average number of
ordinary shares in issue during the year, excluding treasury shares.
The return per ordinary share is analysed between revenue and capital as below.
2025
£’000
2024
£’000
Net revenue return 106,465 104,571
Net capital return 235,651 192,847
Net total return 342,116 297,418
Weighted average number of ordinary shares in issue during the year 493,599,088 501,134,608
2025
Pence
2024
Pence
Revenue return per ordinary share 21.57 20.87
Capital return per ordinary share 47.74 38.48
Total return per ordinary share 69.31 59.35
The Company does not have any dilutive securities, therefore the basic and diluted returns per share are the same.
10 Dividends paid on ordinary shares
Record date Payment date
2025
£’000
2024
£’000
Fourth interim dividend (5.05p) for the year ended 30 June 2023
27 July 2023 31 August 2023 – 25,374
First interim dividend (5.05p) for the year ended 30 June 2024
26 October 2023 30 November 2023 – 25,385
Second interim dividend (5.05p) for the year ended 30 June 2024
25 January 2024 29 February 2024 – 25,385
Third interim dividend (5.25p) for the year ended 30 June 2024
25 April 2024 31 May 2024 – 26,200
Fourth interim dividend (5.25p) for the year ended 30 June 2024
26 July 2024 30 August 2024 25,953 –
First interim dividend (5.25p) for the year ended 30 June 2025
25 October 2024 29 November 2024 25,953 –
Second interim dividend (5.25p) for the year ended 30 June 2025
24 January 2025 28 February 2025 25,953 –
Third interim dividend (5.40p) for the year ended 30 June 2025
25 April 2025 30 May 2025 26,580 –
Unclaimed dividends over 12 years old
(47) (72)
104,392 102,272
In accordance with FRS 102, interim dividends payable to equity shareholders are recognised in the Statement of Changes
in Equity when they have been paid to shareholders.
All dividends have been paid or will be paid out of revenue reserves or current year revenue profits and at no point during
the year did the revenue reserve move to a negative position.
The total dividends payable in respect of the financial year which form the basis of the test under Section 1158 of the
Corporation Tax Act 2010 are set out below.
2025
£’000
2024
£’000
Revenue available for distribution by way of dividend for the year 106,465 104,571
First interim dividend of 5.25p (2024: 5.05p) (25,953) (25,385)
Second interim dividend of 5.25p (2024: 5.05p) (25,953) (25,385)
Third interim dividend of 5.40p (2024: 5.25p) (26,580) (26,200)
Fourth interim dividend of 5.40p (2024: 5.25p) paid on 29 August 2025¹ (26,650) (25,953)
Transfer to revenue reserve² 1,329 1,648
1 Based on 493,517,106 ordinary shares in issue at 24 July 2025 (the ex-dividend date) (2024: 494,334,723)
2 The surplus of £1,329,000 (2024: surplus of £1,648,000) has been taken to the revenue reserve
Since the year end, the Board has announced a first interim dividend of 5.40p per ordinary share, in respect of the year ending
30 June 2026. This will be paid on 28 November 2025 to holders registered at the close of business on 24 October 2025. The
Company’s shares will be quoted ex-dividend on 23 October 2025.
77
The City of London Investment Trust plc Annual Report 2025
Notes to the Financial Statements (continued)
11 Investments held at fair value through profit or loss
2025
Investments in
subsidiaries
£’000
Other investments
£’000
Total
£’000
Valuation at 1 July 2024 347 2,246,245 2,246,592
Investment holding gains at 1 July 2024 – (503,622) (503,622)
Cost at 1 July 2024 347 1,742,623 1,742,970
Additions at cost – 170,312 170,312
Disposals at cost – (140,478) (140,478)
Cost at 30 June 2025 347 1,772,457 1,772,804
Investment holding gains at 30 June 2025 – 683,071 683,071
Valuation at 30 June 2025 347 2,455,528 2,455,875
2024
Investments in
subsidiaries
£’000
Other investments
£’000
Total
£’000
Valuation at 1 July 2023 347 2,034,300 2,034,647
Investment holding gains at 1 July 2023 – (346,877) (346,877)
Cost at 1 July 2023 347 1,687,423 1,687,770
Additions at cost – 211,630 211,630
Disposals at cost – (156,430) (156,430)
Cost at 30 June 2024 347 1,742,623 1,742,970
Investment holding gains at 30 June 2024 – 503,622 503,622
Valuation at 30 June 2024 347 2,246,245 2,246,592
The portfolio valuation at 30 June 2025 of £2,455,528,000 (2024: £2,246,245,000) is shown on the Statement of Financial
Position as investments held at fair value through profit or loss.
At 30 June 2025, the total value of securities on loan by the Company for stock lending purposes was £102,131,000
(2024: £372,460,000). The maximum aggregate value of securities on loan at any one time during the year ended 30 June
2025 was £383,119,000 (2024: £393,436,000). The Company’s agent holds collateral at 30 June 2025, with a value of
£108,057,000 (2024: £393,377,000) in respect of securities on loan, the value of which is reviewed on a daily basis and
comprises CREST Delivery By Value (“DBVs”) and Government Bonds with a market value of 106% (2024:106%) of the
market value of any securities on loan.
Purchase transaction costs for the year ended 30 June 2025 were £845,000 (2024: £1,141,000). These comprise mainly of
stamp duty and commission. Sale transaction costs for the year ended 30 June 2025 were £65,000 (2024: £71,000).
The Company received £205,550,000 (2024: £201,195,000) from investments sold in the year. The book cost of these
investments when they were purchased were £140,478,000 (2024: £156,430,000). These investments have been revalued
over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.
12 Subsidiaries and related undertakings
The Company’s related undertakings are its three wholly-owned subsidiary undertakings, all of which are registered in
England and Wales: The City of London European Trust Limited, City of London Investments Limited and The City of
London Finance Company Limited.
The financial statements of the three companies have not been consolidated on the basis of immateriality. Consequently
the financial statements present information about the Company as an individual entity. The Directors consider that the
values of the subsidiary undertakings are not less than the amounts at which they are included in the financial statements.
The subsidiaries are maintained in order to protect the company names.
●
The City of London European Trust Limited was incorporated in 1899 as Patrick & McGregor Limited and is dormant,
not having traded since 1968. Its registered office is 201 Bishopsgate, London, EC2M 3AE. The aggregate amount of
the capital and reserves of The City of London European Trust Limited at 30 June 2025 was £347,000 (2024: £347,000).
This company has 10,000 issued ordinary shares of £1 each.
●
City of London Investments Limited is a dormant company and has not traded since its incorporation in 1982. Its registered
office is 201 Bishopsgate, London, EC2M 3AE. The aggregate amount of the capital and reserves of City of London
Investments Limited at 30 June 2025 was £2 (2024: £2). This company has two issued ordinary shares of £1 each.
78
The City of London Investment Trust plc Annual Report 2025
Notes to the Financial Statements (continued)
12 Subsidiaries and related undertakings (continued)
●
The City of London Finance Company Limited was incorporated in 1978 as a share dealing company. It is a dormant
company, having not traded since 2009. Its registered office is 201 Bishopsgate, London, EC2M 3AE. The aggregate
amount of capital and reserves of The City of London Finance Company Limited at 30 June 2025 was £2 (2024: £2).
This company has two issued ordinary shares of £1 each.
13 Debtors
2025
£’000
2024
£’000
Withholding and income tax recoverable 2,526 2,589
Sales for future settlement – 641
Share issues for future settlement 1,960 –
Prepayments and accrued income 9,957 9,681
14,443 12,911
14 Creditors: amounts falling due within one year
2025
£’000
2024
£’000
Bank overdraft 17,020 41,035
Amounts owed to subsidiary undertakings 347 347
Purchases for future settlement 1,776 1,818
Dividends payable on preference and preferred ordinary stocks 79 79
Accruals and deferred income 3,330 3,028
22,552 46,307
The Company has an uncommitted overdraft facility of £120,000,000 at 30 June 2025 (2024: £120,000,000) provided by
its Custodian and has provided a floating charge over its assets in return. The overdraft may be withdrawn by the
Custodian at any time and is repayable on demand. Interest on the overdraft was payable at a rate of HSBC base rate
plus 1.25% at 30 June 2025 (2024: plus 1.25%). Covenants relating inter alia to a maximum level of borrowings apply to
the Company’s borrowing facility. A breach of these covenants may result in any overdraft drawn down becoming
repayable immediately.
15 Creditors: amounts falling due after more than one year
2025
£’000
2024
£’000
4.53% secured notes 2029 34,856 34,816
2.67% secured notes 2046 29,774 29,766
2.94% secured notes 2049 49,698 49,687
£301,982 cumulative first preference stock 302 302
£507,202 non-cumulative second preference stock 507 507
£589,672 non-cumulative preferred stock 590 590
115,727 115,668
On 22 January 2014 the Company issued £35,000,000 (nominal) 4.53% secured notes due 2029, net of issue costs
totalling £476,000. The issue costs will be amortised over the life of the secured notes.
On 17 November 2017 the Company issued £50,000,000 (nominal) 2.94% secured notes due 2049, net of issue costs
totalling £360,000. The issue costs will be amortised over the life of the secured notes.
On 19 March 2021 the Company issued £30,000,000 (nominal) 2.67% secured notes due 2046, net of issue costs totalling
£257,000. The issue costs will be amortised over the life of the secured notes.
The repayment terms of the secured notes are as follows:
●
£35,000,000 4.53% secured notes 2029 redeemable at par on 22 January 2029.
●
£30,000,000 2.67% secured notes 2046 redeemable at par on 19 March 2046.
●
£50,000,000 2.94% secured notes 2049 redeemable at par on 17 November 2049.
79
The City of London Investment Trust plc Annual Report 2025
Notes to the Financial Statements (continued)
15 Creditors: amounts falling due after more than one year (continued)
The notes are secured by a first floating charge over the Company’s assets.
A summary of the rights that attach to each of the Preference and Preferred Ordinary Stocks, all of which are non-
redeemable, is given below.
First Preference Stock Second Preference Stock Preferred Ordinary Stock
a) Rights to dividends A fixed cumulative
dividend of 6% per
annum, of which 5.5%
is payable in preference
to the dividend on the
second preference
stock and 0.5% is
payable after it.
A fixed non-cumulative
dividend of 4.2% per
annum, which is
payable after the first
5.5% per annum
entitlement on the first
preference stock.
A fixed non-cumulative
dividend of 20% per
annum, which is
payable after the
entitlements on the
first and second
preference stocks.
b) Priority and amounts
receivable on a winding-up
Repayment of capital in
priority to payment to
the other members of
the Company. Any
arrears of dividend are
payable after the
repayment of the capital
on the second
preference stock.
Repayment of capital
after the repayment
of the capital on the
first preference stock.
Payment of £3.50 in
respect of each £1 of
capital, after the
repayment of the
entitlements on the
first and second
preference stocks.
c) Voting rights at general
meetings
Right to attend and
vote at general
meetings. On a poll,
voting rights are one
vote per £10 of stock
held.
No rights to attend or
vote at general
meetings (except on a
winding-up of the
Company or if
dividends are in
arrears).
Right to attend and
vote at general
meetings. On a poll,
voting rights are one
vote per £20 of stock
held.
Notes:
i) The dividend entitlements of the first preference stock and the preferred ordinary stock reverted on 6 April 1999 to the rates which applied before 6 April 1973
ii) In the event of a winding-up, the preferred ordinary stock would be repaid at £3.50 per £1 of stock. However, its share of equity shareholders’ funds is
included in the financial statements at par because no winding-up is envisaged
16 Risk management policies and procedures
The Directors manage investment risk principally through setting an investment policy (that is approved by shareholders)
which incorporates risk parameters (see page 22), by contracting management of the Company’s investments to an
investment manager (Janus Henderson) under a contract which incorporates appropriate duties and restrictions and by
monitoring performance in relation to these. Internal control and the Board’s approach to risk is on pages 48 and 49.
Therehave been no material changes to the management or nature of the Company’s investment risks from the prior year.
The main risks arising from the Company’s pursuit of its investment objective are market risk (comprising market price risk,
currency risk and interest rate risk), credit risk and liquidity risk. The effects of these can also be increased by gearing.
The Board and Janus Henderson coordinate the Company’s risk management and there are various risk management
systems in place as detailed below.
●
Straight-through processing via a deal order and management system (“OMS”) is utilised for listed securities.
●
Portfolio modelling and investment management functions (including order-raising, dealing and trade execution) are
performed using one of, or a combination of, the following third-party software applications: Charles River
Development OMS and/or Imagine.
●
Fund pricing and accounting services are outsourced to a third-party administrator (currently BNP Paribas) which
utilises HiPortfolio software.
●
The IT tools to which the Janus Henderson risk, compliance and operations teams have access for independent
monitoring and risk measurement purposes include:
– Charles River Compliance module for investment restrictions monitoring;
– SAI360 operational risk database;
– RiskMetrics, UBS Delta, Style Research and Barra for market risk measurement;
– Bloomberg for market data and price-checking; and
– HiPortfolio for portfolio holdings and valuations.
80
The City of London Investment Trust plc Annual Report 2025
Notes to the Financial Statements (continued)
16 Risk management policies and procedures (continued)
16.1 Market risk
The fair value of a financial instrument held by the Company may fluctuate due to changes in market prices. This market
risk comprises market price risk (see note 16.1.1), currency risk (see note 16.1.2) and interest rate risk (see note 16.1.3). The
Fund Manager assesses the exposure to market risk when making each investment decision, and monitors the overall level
of market risk on the whole of the investment portfolio on an ongoing basis.
16.1.1 Market price risk
Market price risk (changes in market prices other than those arising from interest rate risk or currency risk) may affect the
value of investments. The Company’s investments are susceptible to market price risk arising from uncertainties about the
future prices of the investments.
Management of the risk
The Board manages the risks inherent in the investment portfolio by ensuring full and timely access to relevant information
from Janus Henderson. The Board meets regularly and at each meeting reviews investment performance. The Board
monitors Janus Henderson’s compliance with the Company’s objectives, including investment strategy and asset allocation.
When appropriate, the Company may buy/sell put or call options or futures on indices and on equity investments in its portfolio
to manage its exposure to price risk or to generate income. At 30 June 2025, the Company had no open positions (2024: nil).
Concentration of exposure to market price risk
An analysis of the Company’s investment portfolio is shown on pages 18 and 19. This shows that the majority of the
Company’s investments are in UK-listed companies. Accordingly, there is a concentration of exposure to the UK, though
itis recognised that an investment’s country of domicile or of listing does not necessarily equate to its exposure to the
economic conditions in that country.
Market price risk sensitivity
The sensitivity of (a) the return after taxation for the year and (b) the Company’s net assets to an increase or decrease of
10% in the fair values of the Company’s investments at each Statement of Financial Position date is shown below. This level
of change is considered to be reasonably possible, based on observation of current market conditions.
The impact of a 10% increase in the value of the investments on the revenue return as at 30 June 2025 is a decrease of
£221,000 (2024: £202,000) and on the capital return is an increase of £245,037,000 (2024: £224,153,000). The total impact
on equity shareholders’ funds would be an increase of £244,816,000 (2024: £223,951,000).
The impact of a 10% decrease in the value of the investments on the revenue return as at 30 June 2025 is an increase of
£221,000 (2024: £202,000) and on the capital return is a decrease of £245,037,000 (2024: £224,153,000). The total impact
on equity shareholders’ funds would be a decrease of £244,816,000 (2024: £223,951,000).
16.1.2 Currency risk
The Company is not itself materially exposed to currency risk, although some of the investments will be in companies that
have operations that involve currency risk and pay dividends in foreign currencies.
Management of the risk
Investment income denominated in foreign currencies is converted into sterling on receipt. The Company does not use
financial instruments to mitigate the currency exposure in the period between the time that income is included in the
financial statements and its receipt. However, the Company does sometimes hedge foreign currency exposure ahead of
the declaration of dividends from companies in which it invests.
Foreign currency exposure
The fair values of the Company’s monetary items that have foreign currency exposure at 30 June 2025 are £2,350,000
(2024: £3,209,000). These include dividend receivables, withholding tax recoverable and outstanding settlements.
Foreign currency sensitivity
The Company’s sensitivity to movements in exchange rates affecting its investment income, assuming a 10% movement in
the sterling/US dollar rate, will be a loss of £1,456,000 (2024: £1,577,000) if sterling strengthens and a profit of £2,513,000
(2024: £1,928,000) if sterling weakens and, assuming a 10% movement in the sterling/euro rate, will be a loss of £129,000
(2024: £592,000) if sterling strengthens and a profit of £1,051,000 (2024: £723,000) if sterling weakens. The 10% movement
has been based on average market volatility in exchange rates in the previous 12 months.
81
The City of London Investment Trust plc Annual Report 2025
Notes to the Financial Statements (continued)
16 Risk management policies and procedures (continued)
16.1.3 Interest rate risk
Interest rate movements may affect:
●
the level of income receivable from cash at bank and on deposit; and
●
the interest payable on the Company’s variable rate bank borrowings.
Management of the risk
The Company, generally, does not hold significant cash balances. The Company finances part of its activities through
borrowings at levels approved and monitored by the Board. Derivative contracts have not been used during the year to
hedge against the exposure to interest rate risk. There has been no hedging during the year.
Interest rate exposure
The Company’s exposure at 30 June 2025 of financial liabilities to fixed interest rate risk can be found in note 15. The
exposure to floating interest rates can be found on the Statement of Financial Position under cash at bank and under bank
overdraft in note 14.
Interest receivable and finance costs are at the following rates:
●
interest paid on borrowings under the overdraft facility provided by the Custodian is at a margin of 1.25% above the
HSBC base rate (2024: same).
The table below analyses the Company’s aggregated interest costs and principal amounts due over the life of the liabilities.
2025 2024
Within
1 year
£’000
Between 1
and 5 years
£’000
More than
5 years
£’000
Within
1 year
£’000
Between 1
and 5 years
£’000
More than
5 years
£’000
Secured notes
1
3,857 48,840 121,481 3,857 50,426 123,752
Preference stock and preferred ordinary stock
2
157 628 1,399 157 628 1,399
Bank overdrafts and interest 17,020 – – 41,035 – –
Other creditors and accruals 5,532 – – 5,272 – –
26,566 49,468 122,880 50,321 51,054 125,151
1 The above figures show interest payable over the remaining term of the secured notes. The figure in the “between 1 and 5 years” column also includes the
capital to be repaid on the 2029 secured notes. The figure in the “more than 5 years” column also include the capital to be repaid on the 2046 and 2049
secured notes. Details of repayment are set out on page 79 and interest payment dates on page 94
2 The figures in the “more than 5 years” columns are the repayments at par value of the preference and preferred ordinary stock. They do not include the
ongoing annual finance cost of £157,000
Interest rate risk sensitivity
The Company is not materially exposed to changes in interest rates.
16.2 Liquidity risk
This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.
Management of the risk
Liquidity risk is not significant as the majority of the Company’s assets is in investments in quoted equities that are readily
realisable. For details of the Company’s bank borrowing facility, see note 14.
The Board gives guidance to Janus Henderson as to the maximum amount of the Company’s resources that should be
invested in any one company. The policy is that the Company should remain fully invested in normal market conditions and
that short-term borrowings should be used to fund short-term cash requirements.
Liquidity risk exposure
The remaining contractual maturities of the financial liabilities at 30 June 2025, based on the earliest date on which
payment can be required, is given on page 79.
82
The City of London Investment Trust plc Annual Report 2025
Notes to the Financial Statements (continued)
16 Risk management policies and procedures (continued)
16.3 Credit and counterparty risk
The failure of the counterparty to a transaction to discharge its obligations under that transaction could result in the Company
suffering a loss.
Management of the risk
The risk is not significant and is managed as follows:
●
investment transactions are carried out with a large number of brokers, whose credit standard is reviewed periodically
by the Fund Manager, and limits are set on the amount that may be due from any one broker; and
●
cash at bank and overdrafts is held only with reputable banks with high quality external credit ratings.
Stock lending transactions are carried out with a number of approved counterparties, whose credit rating is reviewed
regularly by Janus Henderson and limits are set on the amount that may be lent to any one counterparty. Stock lending is
the temporary transfer of securities by a lender to a borrower, with an agreement by the borrower to return equivalent
securities to the lender at an agreed future date. Stock lending revenue is received for making the investments available to
the borrower, which increases the returns on the portfolio. Securities lent are disclosed separately in the Statement of
Financial Position. Details of the value of securities on loan at the year end, and the collateral held, can be found in note 11.
In summary, the Company only transacts with counterparties that it considers to be creditworthy. In addition to the stock
lending exposure referred to above, the exposure to credit and counterparty risk at 30 June 2025 was to other debtors of
£14,443,000 (2024: £12,911,000).
None of the Company’s financial assets are past their due date or impaired.
16.4 Fair values of financial assets and financial liabilities
The financial assets and financial liabilities (other than long-term liabilities) are either carried in the Statement of Financial
Position at their fair value or at a reasonable approximation of their fair value (sales for future settlement, dividends, interest
receivable, purchases for future settlement, accruals and deferred income, bank overdraft). The secured notes, preference
stocks and preferred ordinary stock are carried in the Statement of Financial Position at par.
At 30 June 2025, the fair value of the secured notes was estimated to be £85,446,000 (2024: £87,069,000). At 30 June
2025, the fair value of the preference and preferred ordinary stock was £2,635,000 (2024: £2,469,000). The valuation of the
preference and preferred ordinary stock is from the Daily Official List quotations.
The fair value of the secured notes is calculated using a discount rate which reflects the yield of a UK Gilt of similar maturity
plus a suitable credit spread.
The preference stocks and preferred ordinary stock are categorised as Level 1 in the fair value hierarchy. The secured
notes are categorised as Level 3 in the fair value hierarchy. These are not included in the values in note 16.5.
16.5 Fair value hierarchy disclosures
The table below sets out fair value measurements using FRS 102 fair value hierarchy.
Financial assets at fair value through profit or loss at 30 June 2025
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Equity investments 2,455,528 – 347 2,455,875
Total 2,455,528 – 347 2,455,875
Financial assets at fair value through profit or loss at 30 June 2024
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Equity investments 2,246,245 – 347 2,246,592
Total 2,246,245 – 347 2,246,592
Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair
value measurement of the relevant asset as follows:
Level 1 – the unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at the
measurement date;
Level 2 – inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for
the asset or liability, either directly or indirectly; and
Level 3 – inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.
The valuation techniques used by the Company are explained in the accounting policies note on page 71.
83
The City of London Investment Trust plc Annual Report 2025
Notes to the Financial Statements (continued)
16 Risk management policies and procedures (continued)
16.6 Capital management policies and procedures
The Company’s capital management objectives are to ensure that it will be able to continue as a going concern, and to
provide long-term growth in income and capital, principally by investment in UK equities.
The Company’s capital at 30 June 2025 comprises its equity share capital, reserves and bank debt that are shown in the
Statement of Financial Position as a total of £2,332,039,000 (2024: £2,097,528,000).
The Company is subject to several externally imposed capital requirements:
●
borrowings under the overdraft facility are not to exceed the lower of £120,000,000 or 15% of the portfolio;
●
as a public company, the Company has a minimum share capital of £50,000;
●
in order to be able to pay dividends out of profits available for distribution by way of dividends, the Company has to be
able to meet one of the two capital restriction tests imposed on investment companies by company law; and
●
the terms of the secured loan notes include financial covenants in relation to the level of borrowings, including net
worth not being less than £400,000,000, the ratio of gross borrowings to net worth not exceeding 50%, and gross
borrowings owed to the custodian not exceeding the greater of 12% of net worth and £80,000,000 (for the 2029
notes)/£120,000,000 (for the 2046 and 2049 notes).
The Company has complied with these requirements.
Other than in exceptional market conditions, gearing will not exceed 20% of the net asset value at the time of the draw
down of the relevant borrowings.
17 Called up share capital
Number of
shares held
in treasury
Number of
shares entitled
to dividend
Total number
of shares in
issue
Nominal value
of total
shares in issue
£’000
Allotted and issued ordinary shares of 25p each
At 1 July 2024 8,301,867 494,363,001 502,664,868 125,666
Buyback of shares for treasury 2,530,895 (2,530,895) – –
Sale of shares from treasury (1,685,000) 1,685,000 – –
At 30 June 2025 9,147,762 493,517,106 502,664,868 125,666
Number of
shares held
in treasury
Number of
shares entitled
to dividend
Total number
of shares in issue
Nominal value
of total
shares in issue
£’000
Allotted and issued ordinary shares of 25p each
At 1 July 2023 – 497,354,868 497,354,868 124,339
Buyback of shares for treasury 8,301,867 (8,301,867) – –
Issue of new ordinary shares – 5,310,000 5,310,000 1,327
At 30 June 2024 8,301,867 494,363,001 502,664,868 125,666
The Company sold 1,685,000 (2024: 5,310,000) ordinary shares from treasury with total proceeds of £7,941,000
(2024: £20,890,000) after deduction of issue costs of £12,000 (2024: £31,000). The average price of the ordinary shares
that were issued was 468.5p (2024: 396.5p). During the year 2,530,895 shares were bought back into treasury
(2024: 8,301,867) for a net payment of £11,154,000 (2024: £34,400,000).
84
The City of London Investment Trust plc Annual Report 2025
Notes to the Financial Statements (continued)
18 Share premium account
2025
£’000
2024
£’000
At beginning of year 1,072,624 1,053,061
Issue of shares 855 19,594
Less: issue costs – (31)
At end of year 1,073,479 1,072,624
19 Other capital reserves
Capital
redemption
reserve
£’000
Capital reserve arising
on revaluation of
investments held
£’000
Capital reserve
arising on
investments sold
£’000
Total other
capital
reserves
£’000
At 1 July 2024 2,707 503,622 346,288 849,910
Transfer on disposal of investments – (50,280) 50,280 –
Net gains on investments – 229,729 14,792 244,521
Exchange gains – – 1 1
Buyback of shares to treasury – – (11,154) (11,154)
Sale of shares from treasury – – 7,086 7,086
Management fees charged to capital – – (4,680) (4,680)
Finance costs charged to capital – – (4,191) (4,191)
At 30 June 2025 2,707 683,071 398,422 1,081,493
Capital
redemption
reserve
£’000
Capital reserve arising
on revaluation of
investments held
£’000
Capital reserve
arising on
investments sold
£’000
Total other
capital
reserves
£’000
At 1 July 2023 2,707 346,876 344,587 691,463
Transfer on disposal of investments – (3,835) 3,835 –
Net gains on investments
1
– 160,581 40,930 201,511
Exchange losses – – (647) (647)
Buyback of shares to treasury – – (34,400) (34,400)
Management fees charged to capital – – (4,497) (4,497)
Finance costs charged to capital – – (3,520) (3,520)
At 30 June 2024 2,707 503,622 346,288 849,910
1 During the year the Company received no special dividends (2024: £5,425,000) which were deemed to be capital in nature and were taken to the capital
reserve arising on investments sold. These dividends are available to be distributed to shareholders as part of realised capital profits.
85
The City of London Investment Trust plc Annual Report 2025
Notes to the Financial Statements (continued)
20 Revenue reserve
£’000
At 1 July 2024 46,621
Net return for the year 106,465
Dividends paid (note 10) (104,392)
At 30 June 2025 48,694
£’000
At 1 July 2023 44,322
Net return for the year 104,571
Dividends paid (note 10) (102,272)
At 30 June 2024 46,621
21 Net asset value per ordinary share – basic and diluted
The net asset value per ordinary share of 472.53p (2024: 424.29p) is based on the net assets attributable to the ordinary
shares of £2,332,039,000 (2024: £2,097,528,000) and on 493,517,106 (2024: 494,363,001) shares in issue on 30 June 2025,
excluding treasury shares.
An alternative net asset value per ordinary share can be calculated by deducting from the total assets less current liabilities
of the Company the preference and preferred ordinary stocks and secured notes at their market (or fair) values rather than
at their par (or book) values. The net asset value per ordinary share at 30 June 2025 calculated on this basis was 478.14p
(2024: 429.57p). See page 90 for further details of the Alternative Performance Measure and how it is calculated.
The movements during the year of the assets attributable to the ordinary shares were as follows: £’000
Total net assets attributable to the ordinary shares at 30 June 2024 2,097,528
Total net return after taxation 342,116
Dividends paid on ordinary shares in the year (104,392)
Buyback of shares (11,154)
Sale of shares from treasury 7,941
Total net assets attributable to the ordinary shares at 30 June 2025 2,332,039
The Company does not have any dilutive securities.
22 Capital commitments and contingent liabilities
Capital commitments
There were no capital commitments as at 30 June 2025 (2024: none).
Contingent liabilities
As at 30 June 2025, there were no contingent liabilities (2024: none).
23 Transactions with the Manager and related parties
The Company appointed subsidiaries of Janus Henderson Group plc to provide investment management, accounting,
secretarial and administrative services under an agreement dated 22 July 2014. This agreement was updated and restated
with effect from 15 February 2024. Janus Henderson has contracted BNP Paribas to provide accounting and
administration services.
With effect from 1 January 2024, the management fee was changed to 0.3% per annum of net assets under management
on the first £3 billion of assets and 0.275% thereafter. Prior to this, the management fee was 0.325% per annum of net
assets under management. The total of management fees paid or payable to Janus Henderson under this agreement in
respect of the year ended 30 June 2025 was £6,686,000 (2024: £6,424,000). The amount outstanding at 30 June 2025
was £1,740,000 (2024: £1,561,000).
In addition to the above services, Janus Henderson facilitates marketing activities with third parties which are recharged to
the Company. The total fees paid or payable for these services for the year ended 30 June 2025 amounted to £367,000
including VAT (2024: £163,000) of which £180,000 was outstanding at 30 June 2025 (2024: £30,000).
Details of fees paid to Directors are included in the Directors’ Remuneration Report on page 57 and in note 6 on page 75.
86
The City of London Investment Trust plc Annual Report 2025
Additional
Information
87
Securities Financing Transactions
The Company engages in Securities Financing Transactions (as defined in Article 3 of Regulation (EU) 2015-2365, securities
financing transactions include repurchase transactions, securities or commodities lending and securities or commodities
borrowing, buy-sell back transactions and margin lending transactions). In accordance with Article 13 of the Regulation, the
Company’s involvement in and exposures related to securities lending for the year ended 30 June 2025 are detailed below.
Global Data
The amount of securities on loan as a proportion of total lendable assets and the Company’s net assets as at 30 June 2025 are
disclosed below:
Stock lending 2025
Market value of securities on loan £’000 % of lendable assets % of assets under management
102,131 4.16 4.38
Concentration Data
The ten largest collateral issuers across all the securities financing transactions as at 30 June 2025 are disclosed below:
Issuer
Market value of
collateral received
£’000
Government of France 16,648
Government of Belgium 4,162
Sony 3,649
ABB 3,507
Sandvik 3,507
Subsea 3,507
Tele2 3,507
Novartis 3,507
Toyota 3,506
Sumitomo 3,506
49,006
The top ten counterparties of each type of securities financing transactions as at 30 June 2025 are disclosed below:
Counterparty
Market value of
securities on loan
£’000
Skandinaviska Enskilda 33,086
Barclays 30,765
Merrill Lynch 19,819
Société Générale 14,644
UBS 1,771
BNP Paribas 1,348
Goldman Sachs 485
Morgan Stanley 213
102,131
All counterparties are shown.
The City of London Investment Trust plc Annual Report 2025
88
Securities Financing Transactions (continued)
Aggregate Transaction Data
The following table discloses a summary of aggregate transaction data related to the collateral received from securities on loan as at
30 June 2025:
Stock lending
Counterparty
Counterparty
country of
origin Type Quality
Collateral
currency
Settlement
basis Custodian
Market
value of
collateral
received
£’000
Barclays London Equity Main Market Listing GBP Tri-party HSBC 145
Equity Main Market Listing JPY Tri-part y HSBC 5,843
Equity Main Market Listing USD Tri-par ty HSBC 12,774
Equity Main Market Listing EUR Tri-party HSBC 10,590
Equity Main Market Listing CAD Tri-party HSBC 3,122
Equity Main Market Listing HKD Tri-party HSBC 25
Government Debt Investment Grade JPY Tri-party HSBC 27
UK Gilts Investment Grade GBP Tri-party HSBC 85
BNP Paribas France Equity Main Market Listing JPY Tri-party HSBC 1,429
Morgan Stanley US Government Debt Investment Grade USD Tri-party HSBC 224
Merrill Lynch US Government Debt Investment Grade EUR Tri-par ty HSBC 20,810
Goldman Sachs US Government Debt Investment Grade USD Tri-par ty HSBC 510
Société Générale France Equity Main Market Listing JPY Tri-party HSBC 13,478
Equity Main Market Listing USD Tri-par ty HSBC 2,046
UBS Switzerland Equity Main Market Listing USD Tri-par ty HSBC 289
Equity Main Market Listing GBP Tri-party HSBC 362
Equity Main Market Listing JPY Tri-part y HSBC 402
Equity Main Market Listing SGD Tri-part y HSBC 89
Equity Main Market Listing EUR Tri-party HSBC 9
Equity Main Market Listing AUD Tri-par ty HSBC 181
Equity Main Market Listing HKD Tri-party HSBC 546
Skandinaviska Sweden Equity Main Market Listing USD Tri-par ty HSBC 138
Enskilda Equity Main Market Listing CHF Tri-party HSBC 7,014
Equity Main Market Listing JPY Tri-part y HSBC 14,881
Equity Main Market Listing NOK Tri-party HSBC 3,507
Equity Main Market Listing SEK Tri-par ty HSBC 9,531
108,057
The lending and collateral transactions are on an open basis and can be recalled on demand.
Re-use of collateral
The Company does not engage in re-use of collateral.
Return and cost
The return and cost of engaging in securities lending by the Company and the securities lending agent in absolute terms and as
a percentage of overall returns are disclosed below:
Total gross amount of
securities lending income
Direct and indirect costs
andfees deducted by
securities lending agent
% return of the securities
lending agent
Net securities lending
incomeretained by the
Company % return of the Company
£295,000 £59,000 20 £236,000 80
The City of London Investment Trust plc Annual Report 2025
89
Alternative Performance Measures (unaudited)
The Company uses the following Alternative Performance Measures (“APMs”) throughout the annual report, financial statements
and notes to the financial statements. The APMs are reconciled to the financial statements through the narrative below.
TheBoard believes that each of the APMs, which are typically used within the investment trust sector, provide additional useful
information to shareholders to help assess the Company’s performance against its peer group.
Discount or Premium
The amount by which the market price per share of an investment trust is either higher (premium) or lower (discount) than the
NAV per share, expressed as a percentage of the NAV per ordinary share.
NAV with debt at
fair value
Pence
NAV with debt at
par value
Pence
Share price
Pence
Premium/
(discount)
to fair
value NAV
%
Premium/
(discount)
to par
value NAV
%
At 30 June 2025 478.14 472.53 487.50 2.0 3.2
At 30 June 2024 429.57 424.29 420.00 (2.2) (1.0)
Gearing/(Net Cash)
Gearing means borrowing money to buy assets with the expectation that the return on investments bought will exceed the
interest cost of the borrowings. The gearing percentage reflects the amount of borrowings (e.g. bank loans, overdrafts or
secured notes) the Company has used to invest in the market, and is calculated by taking the difference between total
investments (see note 11 on page 78) and total shareholders’ funds (see Statement of Financial Position), dividing this by total
shareholders’ funds and multiplying by 100 as indicated below:
2025 2024
Investments held at fair value through profit or loss (see note 11) (£’000) (A) 2,455,528 2,246,245
Net assets (page 70) (£’000) (B) 2,332,039 2,097,528
Gearing (C = A/B -1) (%) (C) 5.3 7.1
The Company can also use synthetic gearing through derivatives and foreign exchange hedging.
NAV with Debt at Par and Fair Value
2025
£’000
2024
£’000
Investment held at fair value through profit or loss (see note 11) 2,455,528 2,246,245
Investment in subsidiary undertakings (see note 12) 347 347
Current assets (see page 70) 14,443 12,911
Creditors amounts falling due within one year (see note 14) (22,552) (46,307)
Creditors amounts falling due after more than one year (see note 15) (115,727) (115,668)
NAV with debt at par (A) 2,332,039 2,097,528
Less fair value of preference and preferred stock and secured notes (see note 16.4) (88,081) (89,538)
Add back: par value of preference and preferred stock and amortised cost of secured notes 115,727 115,668
NAV with debt at fair value (B) 2,359,685 2,123,658
Ordinary shares in issue excluding treasury shares (see note 17) (C) (number) (C) 493,517,106 494,363,001
NAV per ordinary share with debt at par (see page 70) (A/C x 100) (pence) 472.53 424.29
NAV per ordinary share with debt at fair value (B/C x 100) (pence) 478.14 429.57
The aggregate NAV is also referred to as total shareholders’ funds in the Statement of Financial Position. The NAV per ordinary
share is published daily and the year end NAV can be found on page 70 and further information is available on page 86 in note 21.
The City of London Investment Trust plc Annual Report 2025
90
Alternative Performance Measures (unaudited) (continued)
Ongoing Charge
The ongoing charge ratio has been calculated in accordance with the guidance issued by the AIC. It represents the total investment
management fee and other administrative expenses expressed as a percentage of the average net asset values with debt at fair
value throughout the year.
2025
£’000
2024
£’000
Management fee (see note 5) 6,686 6,424
Other administrative expenses (see note 6) 1,228 1,009
Less: non-recurring expenses (31) (65)
Ongoing charge 7,883 7,368
Average net assets¹ 2,200,090 2,016,041
Ongoing charge ratio 0.36% 0.37%
1 Calculated using the average daily net asset value with debt at fair value
The non-recurring expenses include those relating to board evaluation and research on the company and its competitors (2024:
Director recruitment, delisting from the New Zealand Stock Exchange, French dividend reclaims and the New Zealand climate
change consultation).
Revenue Earnings per Share
The revenue earnings per share is the revenue return for the year (see Income Statement) divided by the weighted average
number of ordinary shares in issue during the year (see note 9 on page 77).
Revenue Reserve per Share
The revenue reserve per share is the revenue return for the year (see Statement of Financial Position) at the year end divided by
the number of shares in issue (see note 17 on page 84) at the year end date.
Total Return
The total return is the return on the share price or NAV with debt at fair value taking into account both the rise and fall of NAVs/
share prices and dividends paid to shareholders. Each component of the total return needs to be compounded as a geometric
return to arrive at the total return. Any dividends received by a shareholder are assumed to have been reinvested in either
additional shares (for share price total return) or the Company’s assets (for NAV with debt at fair value total return). Dividends paid
and payable are set out in note 10 on page 77.
2025 2024
NAV per share with
debt at fair value Share price
NAV per share with
debt at fair value Share price
Opening NAV/Share price per share (pence)
429.57 420.00 391.24 397.00
Closing NAV/Share price per share (pence)
478.14 487.50 429.57 420.00
Change in the year (%)
11.3 16.1 9.8 5.8
Impact of dividends reinvested (%)
4.9 4.9 5.3 5.3
Total return for the year (%)
16.8 21.8 15.6 11.3
Yield
The yield is the annual dividend expressed as a percentage of the year end share price.
30 June
2025
30 June
2024
Annual dividend (pence) (A) 21.30 20.60
Share price (pence) (B) 487.5 420.0
Yield (C = A/B) (%) (C) 4.4 4.9
The City of London Investment Trust plc Annual Report 2025
91
Glossary
Alternative Investment Fund Managers
Directive (“AIFMD”)
The AIFMD classifies certain investment vehicles, including
investment companies, as Alternative Investment Funds
(“AIFs”) and requires them to appoint an Alternative
Investment Fund Manager (“AIFM”) and depositary
tomanage and oversee the operations of the investment
vehicle. TheBoard of Directors retains responsibility for
strategy, operations and compliance and the Directors
retaina fiduciary dutyto shareholders.
Alternative Performance Measures
Details of alternative performance measures used by the
Company can be found on pages 90 and 91.
Association of Investment Companies
(“AIC”)
The Company is a member of the AIC which is the trade
body for investment companies and represents the industry
in relation to various matters which impact the regulation of
such entities. The Company is a constituent of the UK Equity
Income sector.
Benchmark
A measure against which performance is compared. For the
Company this is the FTSE All-Share Index.
Custodian
The custodian is responsible for ensuring the safe custody
of the Company’s assets and ensuring that all transactions
in the underlying holdings are transacted in an accurate and
timely manner.
Depositary
As an AIF, the Company is required to appoint a depositary
who has responsibility for overseeing the operations of the
Company including safekeeping, cash monitoring and
verification of ownership and valuation. TheDepositary is
strictly liable for the loss of any investments or other assets in
its custody unless it has notified that ithas discharged its
liability in certain markets. TheDepositary has confirmed that
it has not discharged liability inrelation to any of the
Company’s assets.
The Depositary has further confirmed that, in all material
respects, the Company has been managed in accordance
with the FCA’s Investment Funds Sourcebook, the Company’s
Articles of Association and as required by the AIFMD.
Derivative
A contract between two or more parties in relation to an
underlying security. The value of a derivative will fluctuate in
accordance with the value of the security and is a form of
gearing as the fluctuations in value are usually greater than
thefluctuations in the underlying security’s value. Examples
ofderivatives are put and call options, swap contracts,
futuresand contracts for difference. Foreign exchange,
interest rates and commodities may also be traded using
derivative contracts.
Dividend Dates
When declared or recommended, each dividend will have
three key dates applied to it. The payment date is the date on
which shareholders will receive their dividend, either by BACS
transfer or by receipt of a dividend cheque. The record date
applied to the dividend is used as a cut-off for the Company’s
Registrar to know which shareholders should be paid a
dividend. Only shareholders on the Register of Members at
the close of business on the record date will receive the
dividend. The ex-dividend date is the business day before the
record date and is the date upon which the Company’s net
asset value will be disclosed ex-dividend.
Investment Trusts
Investment trusts are public limited companies, listed on the
London Stock Exchange, which provide shareholders with a
professionally managed portfolio of investments. Investment
trusts are exempt from tax on the capital gains arising on
their investments subject to meeting certain criteria. Income,
net of expenses and tax, is substantially distributed to
shareholders. Investment trusts are also known as
investment companies, although the tax legislation retains
the reference to investment trusts.
Liquidity
In the context of the liquidity of shares in the stock market, this
refers to the availability of buyers in the market for the share in
question. Where the market in a particular share is described as
liquid, that share will be in demand and holders wishing to sell
their shares should find ready buyers. Conversely, where the
market in a share is illiquid the difficulty of finding a buyer will
tend to depress the price that might be negotiated for a sale.
Market Capitalisation
The market value of a company, calculated by multiplying the
mid-market price per share by the number of shares in issue.
Ongoing Charge
The ongoing charge reflects those expenses of a type which
are likely to recur in the foreseeable future, whether charged
to revenue or capital, and which relate to the operation of
theCompany as a collective fund, excluding the costs of
acquisition or disposal of investments, finance costs and
gains or losses arising on investments. Details of the
calculation of the ongoing charge can be found on page 91.
Simple versus Weighted Average
The simple average ignores the fund size and assigns an equal
weight to all data points. Under the weighted average, greater
importance (weight) is assigned to funds of a larger size.
The City of London Investment Trust plc Annual Report 2025
92
General Shareholder Information
AIFMD Disclosures and Remuneration
In accordance with the AIFMD, information in relation to the
Company’s leverage and remuneration of Janus Henderson
Fund Management UK Limited, asthe Company’s AIFM are
required to be made available to investors. These disclosures,
including those on the AIFM’s remuneration policy, are
contained in an AIFMD Disclosure document which can
befound on the Company’s website.
BACS
Dividends and interest can be paid to shareholders and
stockholders by means of BACS (Bankers’ Automated Clearing
Services); mandate forms for this purpose are available from the
Registrar. Alternatively, shareholders can write to the Registrar to
give their instructions; these must include thebank account
number, the bank account title and the sort code ofthe bank to
which payments are tobe made.
Common Reporting Standard (“CRS”)
Tax legislation requires the Company toprovide personal
information to HMRC on certain investors who purchase
shares in investment trusts. This information is provided
annually to thelocal tax authority of the tax residencies of
anumber of non-UK based certificated shareholders and
corporate entities.
Equality Act 2010
This report and other documents issued by the Company are
available from the Corporate Secretary. If needed, copies can
be made available in a variety of formats, including Braille or
larger type as appropriate.
A ‘typetalk’ operator (provided by the Royal National Institute
for Deaf People) is available to support speech and hearing-
impaired people to make telephone calls. Please dial 18001
followed by the number you wish to dial.
General Data Protection Regulation
(“GDPR”)
A privacy statement can be found on the website
www.janushenderson.com.
ISA
The Company intends to continue to manage its affairs in
order toqualify as an eligible investment for a stocks and
shares ISA.
Non-Mainstream Pooled Investments
Status
The Company currently conducts its affairs so that its
ordinary shares of 25p each can be recommended by IFAs
to ordinary retail investors in accordance with the FCA’s rules
in relation to non-mainstream investment products and
intends to continue to do so for the foreseeable future.
Theshares are excluded from the FCA’s restrictions which
apply to non-mainstream investment products because
theyare shares in an investment trust.
Performance Details/Share Price
Information
Information about the Company’s share price and NAV is
available onits website, www.cityinvestmenttrust.com
andin the London Stock Exchange Daily Official List. The
Company’s NAV is published daily.
The market price of the Company’s ordinary shares is
published dailyin The Financial Times and other leading
newspapers. TheFinancial Times also shows figures for
theestimated NAV andthe premium/discount.
Shareholder Details
Shareholders who hold their shares in certificated form can
check their shareholding with the Registrar, Computershare
Investor Services PLC, via www.investorcentre.co.uk.
To gain access to your details on the Computersharesite
youwill need the holder reference number shown on your
share certificate.
Taxonomy Regulation
Regulation (EU) 2020/852 establishes the basis for the EU
taxonomy. This is a classification system, establishing a list of
environmentally sustainable economic activities to provide
companies, investors and policymakers with appropriate
definitions for which economic activities can be considered
environmentally sustainable. The Company confirms that the
investments underlying this financial product do not take into
account the EU criteria for environmentally sustainable
economic activities.
The City of London Investment Trust plc Annual Report 2025
93
FCA Share Fraud Warning
Investment and pension scams are
often sophisticated and di�cult to spot
Be a ScamSmart investor and spot the warning signs
Fraudsters will often:
• contact you out of the blue
• apply pressure to invest quickly
• downplay the risks to your money
• promise tempting returns that sound too good to be true
• say that they’re only making the o�er available to you or
even ask you to not tell anyone else about it
How to avoid investment and pension scams
If you’re suspicious, report it
You can report the �rm or scam to us by
contacting our Consumer Helpline on
0800 111 6768 or using our reporting form
using the link below.
If you’ve lost money in a scam, contact
Action Fraud on 0300 123 2040 or
www.actionfraud.police.uk
Reject unexpected o�ers
Scammers usually cold call, but contact
can also come by email, post, word of mouth
or at a seminar. If you’ve been o�ered an
investment out of the blue, chances are it’s
a high risk investment or a scam.
Check the FCA Warning List
Use the FCA Warning List to check the risks
of a potential investment – you can also search
to see if the �rm is known to be operating without
our authorisation.
Get impartial advice
Get impartial advice before investing – don’t use
an adviser from the �rm that contacted you.
Be ScamSmart and visit
www.fca.org.uk/scamsmart
1
2
3
Financial Calendar
Financial Calendar
Annual results: September
Annual General Meeting: October
Half-year results: February
Dividends
1
Ordinary shares:
●
first interim payable on 30 November
●
second interim payable on 28 February
●
third interim payable on 31 May
●
fourth interim payable on 31 August
Preference and preferred ordinary stocks:
●
payable on 28 February and 31 August
1 Payments are made on the nearest working day prior tothedatesindicated above
Secured Notes Interest
4.53% secured notes 2029:
●
payable on 22 January and 22 July
Redeemable at par on 22 January 2029
2.94% secured notes 2049:
●
payable on 17 May and 17 November
Redeemable at par on 17 November 2049
2.67% secured notes 2046:
●
payable on 19 March and 19 September
Redeemable at par on 19 March 2046
The City of London Investment Trust plc Annual Report 2025
94
Notice of
Annual General
Meeting
95
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt as to what action you should take, you should consult your stockbroker, solicitor, accountant or
other independent financial adviser authorised under the Financial Services and Markets Act 2000 (as amended) if you are
resident in the UK, or if not, from another appropriately authorised independent financial adviser in your own jurisdiction.
If you have sold, transferred or otherwise disposed of all your shares or other voting securities in The City of London
Investment Trust plc (the “Company”), please pass this document, but not any accompanying personalised Form of Proxy,
to the purchaser or transferee or to the bank, stockbroker or other agent through whom or by whom the sale or transfer
was made, for delivery to the purchaser or transferee. If you have sold or transferred or otherwise disposed of only part of
your holding, you should retain this document and the accompanying Form of Proxy and consult the stockbroker, bank or
other agent through whom you made the sale, transfer or disposal.
Notice is hereby given that the 133rd Annual General Meeting
ofThe City of London Investment Trust plc will be held at
201Bishopsgate, London EC2M 3AE on Thursday, 30 October
2025 at 1.00pm for the transaction of the following business:
Ordinary Business
1 To receive the Annual Report and the audited financial
statements for the year ended 30 June 2025.
2 To approve the Directors’ Remuneration Report for the year
ended 30 June 2025.
3 To re-elect Sir Laurie Magnus CBE as a Director of the
Company.
4 To re-elect Mr Ominder Dhillon as a Director of the
Company.
5 To re-elect Mr Robert Holmes as a Director of the
Company.
6 To re-elect Ms Sally Lake as a Director of the Company.
7 To re-elect Mrs Clare Wardle as a Director of the Company.
8 To re-appoint Ernst & Young LLP as independent auditor to
the Company.
9 To authorise the Audit and Risk Committee to determine
the auditor’s remuneration.
Special Business
To consider and, if thought fit, pass the following resolutions,
of which resolutions 10 and 11 will be proposed as ordinary
resolutions and resolutions 12 to 15 will be proposed as
special resolutions:
10 To approve the Company’s dividend policy of continuing
to pay four quarterly interim dividends in each year.
11 THAT, in substitution for all existing authorities, the
Directors of the Company be and they are hereby
generally and unconditionally authorised pursuant to and
in accordance with Section 551 of the Companies Act
2006 (“the Act”) to exercise all the powers of the
Company to allot ordinary shares of 25p each in the
capital of the Company (“ordinary shares”) and to grant
rights to subscribe for, or to convert any security into,
ordinary shares up to an aggregate nominal amount of
£12,386,678 (orsuch other amount as shall be equivalent
to 10% of the issued ordinary share capital at the date of
passing of this resolution, excluding shares held in
treasury), provided that this authority shall expire at the
conclusion of the next annual general meeting of the
Company or, if earlier, on theexpiry of 15 months from the
passing of this resolution, unless renewed at a general
meeting prior to such time, save that the Directors may
before such expiry make an offer or enter into an
agreement which would or might require ordinary shares
to be allotted or rights to be granted after such expiry and
the Directors may allot ordinary shares and grant rights in
pursuance of such anoffer or agreement as if the
authority conferred hereby hadnot expired.
12 THAT, subject to the passing of Resolution 11 and in
substitution for all existing authorities, the Directors be
and they are hereby empowered pursuant to Sections
570 and 573 of the Companies Act 2006 (“the Act”) to
allot ordinary shares for cash pursuant to the authority
conferred by Resolution 11 and to sell ordinary shares
from treasury for cash as if Section 561(1) of the Act did
not apply to any such allotment or sale, provided that this
authority shall be limited to the allotment or sale of
ordinary shares:
(a) up to an aggregate nominal amount of £12,386,678
(orsuch other amount as shall be equivalent to 10% of
the issued ordinary share capital at the date of passing
of this resolution, excluding shares held in treasury); and
(b) at a price not less than the net asset value per share;
and shall expire at the conclusion of the next annual general
meeting of the Company, or if earlier, on the expiry of
15 months from the passing of this resolution, unless renewed
at a general meeting prior to such time, save that the Directors
may before such expiry make an offer or enter into an
agreement which would or might require ordinary shares to
beallotted or sold from treasury after such expiry and the
Directors may allot ordinary shares or sell ordinary shares
from treasury in pursuance of such an offer or agreement as if
the authority conferred hereby had not expired.
Notice of Annual General Meeting
The City of London Investment Trust plc Annual Report 2025
96
Notice of Annual General Meeting (continued)
13 THAT, in substitution for all existing authorities, the
Company be and is hereby generally and unconditionally
authorised in accordance with Section 701 of the
Companies Act 2006 (“the Act”) to make market
purchases (within the meaning of Section 693(4) of the
Act) of ordinary shares of 25p each in the capital of the
Company, on such terms and in such manner as the
Directors may from time to time determine, provided that:
(a) the maximum number of ordinary shares which may
be purchased is 14.99% of the Company’s issued
ordinary share capital at the date of the resolution,
excluding shares held in treasury (equivalent to
74,270,519 ordinary shares as at 12 September 2025,
being the last practicable date prior to publication of
this Notice);
(b) the maximum price (exclusive of expenses) which may
be paid for an ordinary share shall not exceed the higher
of:
(i) 105% of the average of the middle market
quotations for the shares as taken from the London
Stock Exchange Daily Official List for the five
business days preceding the date of purchase; and
(ii) the higher of the last independent trade and the
highest current independent bid on the London
Stock Exchange;
(c) the minimum price (exclusive of expenses) which may
be paid for an ordinary share shall be 25p, being the
nominal value per share;
(d) the authority hereby conferred shall expire at the
conclusion of the next annual general meeting of the
Company, or, if earlier, on the expiry of 15 months from
the passing of this resolution, unless such authority is
renewed before that expiry;
(e) the Company may make a contract to purchase
ordinary shares under the authority hereby conferred
which will or may be executed wholly or partly after the
expiration of such authority and may make a purchase
of ordinary shares pursuant to any such contract; and
(f) any ordinary shares so purchased shall be:
(i) cancelled immediately upon completion of the
purchase; or
(ii) held, sold, transferred or otherwise dealt with as
treasury shares in accordance with the provisions of
the Act.
14 THAT the Company be and is hereby authorised in
accordance with Section 701 of the Companies Act 2006
(“the Act”) to make market purchases (within the meaning
of Section 693(4) of the Act) of the Company’s 4.2%
cumulative first preference stock (“the First Preference
Stock”), 4.2% non-cumulative second preference stock
(“the Second Preference Stock”) and 14% non-cumulative
preferred ordinary stock (“the Preferred Ordinary Stock”)
(together “the Preferred Stock”), provided that:
(a) the maximum amount of Preferred Stock hereby
authorised to be purchased is the entire issued capital
amount of each such class of Preferred Stock as at the
date of this resolution, being:
(i) £301,982 of First Preference Stock;
(ii) £507,202 of Second Preference Stock; and
(iii) £589,672 of Preferred Ordinary Stock;
(b) the minimum price (exclusive of expenses) which may
be paid for each £1 of capital of Preferred Stock is 1p;
(c) the maximum price (exclusive of expenses) which may
be paid for each £1 of capital of Preferred Stock is an
amount equal to a yield of 175 basis points over the
50-year gilt at the time of purchase;
(d) the authority hereby conferred shall expire at the
conclusion of the next annual general meeting of the
Company, or, if earlier on the expiry of 15 months from
the passing of this resolution, unless such authority is
renewed before that expiry; and
(e) the Company may make a contract to purchase any
class of Preferred Stock under the authority hereby
conferred prior to the expiry of such authority which
will or may be executed wholly or partly after the
expiration of such authority and may make a purchase
of Preferred Stock pursuant to any such contract.
15 THAT a general meeting other than an annual general
meeting may be called on not less than 14 clear days’
notice, such authority to expire at the conclusion of the
next annual general meeting of the Company.
By order of the Board
Janus Henderson Secretarial Services UK Limited
Corporate Secretary
16 September 2025
Registered Office:
201 Bishopsgate, London EC2M 3AE
The City of London Investment Trust plc Annual Report 2025
97
MOORGATE
BISHOPSGATE
PRIMROSE ST.
WORSHIP STREET
201 Bishopsgate
London EC2M 3AE
LIVERPOOL
STREET
STATION
APPOLD ST.
SUN STREET
BROADGATE
CIRCLE
FINSBURY PAVE.
EARL ST.
WORSHIP STREET
ROPEMAKER STR EET
LIVERPOOL ST
LONDON WALL
WILSON ST.
BISHOPSGATE
GREAT EASTERN ST.
COMMERCIAL ST.
SHOREDITCH
HOUNDSDITCH
AL DGATE
MIDDLESEX
STREET
CHISWELL STREET
SOUTH PLACE
ELDON ST.
FINSBU RY
CIRCUS
CITY ROAD
FINSBURY SQ.
FINSBURY SQ.
CLIFTON ST.
SPITALFIELDS
MARKET
FOLGATE ST.
NORTON
MIDDLESEX ST.
BRUSHFIELD STREET
APPOLD ST.
Janus Henderson Investors is located in the
City of London at 201 Bishopsgate. It is a few
minutes’ walk from Liverpool Street Station.
Notice of Annual General Meeting (continued)
Explanations of the Resolutions
The information below is an explanation of the business to be
considered at the 2025 Annual General Meeting.
Resolutions 1 to 11 are proposed as ordinary resolutions. This
means that for each of those resolutions to be passed more than
half of the votes cast must be in favour of the resolution.
Resolutions 12 to 15 are proposed as special resolutions. This
means that for each of those resolutions to be passed at least
three-quarters of the votes cast must be in favour of the
resolution.
Ordinary Business
Resolution 1: Annual Report
(ordinary resolution)
The Directors are required to present to the Meeting the
Annual Report and audited financial statements for the year
ended 30 June 2025, including the Strategic Report,
Directors’ Report, Independent Auditor’s Report and the
Directors’ Remuneration Report. Shareholders will be given
an opportunity to ask questions on these items at the Meeting
before being invited to receive the Annual Report and audited
financial statements.
Resolution 2: Directors’ Remuneration Report
(ordinary resolution)
Shareholders are asked to approve the Directors’
Remuneration Report for the year ended 30 June 2025, which
is set out on pages 55 to 58. The vote on the Remuneration
Report is advisory and does not affect the remuneration
payable to any individual Director. However, the Board will
take feedback from shareholders regarding remuneration and
incorporate this into any future remuneration discussions.
Resolutions 3 to 7: Re-election of Directors
(ordinary resolutions)
In keeping with provisions of the AIC Code of Corporate
Governance, all Directors will be retiring at the Meeting and
offer themselves for re-election.
The Board has reviewed the performance and commitment of
the Directors standing for re-election and considers that each
of the Directors should continue in office as they bring wide,
current and relevant business experience that allows them to
contribute effectively to the leadership of the Company.
Furthermore, the Board is satisfied that, having considered
each Director’s experience and the nature of, and anticipated
demands on his or her time by their other business
commitments, each Director is able to commit the time
required to fulfil his or her responsibilities as a Director of
theCompany.
Resolution 3 relates to the re-election of Sir Laurie Magnus
CBE, who joined the Board in March 2020 and was appointed
Chairman of the Company following the conclusion of the
2020 Annual General Meeting. Sir Laurie has over 45 years of
experience in corporate finance markets and over 20 years as
a member of investment supervisory bodies, including as a
director of various investment trusts.
Resolution 4 relates to the re-election of Ominder Dhillon,
who joined the Board in September 2021. Ominder has strong
investment knowledge across public and private markets,
especially in regard to sustainable investing, sales and
marketing expertise and a good understanding of governance
and risk management.
AGM Venue
The City of London Investment Trust plc Annual Report 2025
98
Notice of Annual General Meeting (continued)
Resolution 5 relates to the re-election of Robert (Ted)
Holmes, who joined the Board in January 2018. Ted has a
strong background in investment management.
Resolution 6 relates to the re-election of Sally Lake, who
joined the Board in August 2024. Sally has spent the majority
of her career within non-life commercial insurance and was
until recently CFO of a FTSE 100 company.
Resolution 7 relates to the re-election of Clare Wardle, who
joined the Board in November 2019. Clare brings to the Board
considerable international experience in risk, governance,
competition and compliance.
A detailed biography of each Director is given on pages 38
and 39.
Resolutions 8 and 9: Re-appointment and
remuneration of the auditor
(ordinary resolutions)
In accordance with Sections 489 and 492 of the Companies
Act 2006 (the “Act”), shareholders are required to approve the
appointment of the Company’s auditor, Ernst & Young LLP.
Ernst & Young have expressed their willingness to continue as
auditor to the Company. Following a satisfactory performance
review, the Board is recommending their re-appointment in
respect of the year ending 30 June 2026 and seeking
authority for the Audit and Risk Committee to determine their
remuneration.
Special Business
Resolution 10: Dividend payment policy
(ordinaryresolution)
The Company’s policy is to pay dividends on a quarterly
basis, with dividends declared in September, December, April
and July and paid in November, February, May and August
each year. As the fourth dividend is payable prior to the
Annual General Meeting, which is held in October each year, it
is declared as an interim dividend and there is accordingly no
final dividend.
The Board is conscious that this means shareholders will not
be given the opportunity to vote on payment of a final dividend.
Accordingly, shareholders are asked to confirm their ongoing
approval of the approach to paying four quarterly interim
dividends, which in the year ended 30 June 2025 totalled
21.3p per ordinary share.
Resolutions 11 and 12: Authority to allot shares
and disapply pre-emption rights
(ordinary and special
resolutions respectively)
On 31 October 2024, the Directors were granted authority to
issue up to 49,433,472 ordinary shares, having a nominal
value of £12,358,368 and representing 10% of the issued
ordinary share capital, on a non pre-emptive basis. Whilst no
new shares have been issued, 3,635,000 shares have been
sold from treasury in the period since the 2024 AGM to
12 September 2025 (the latest practicable date prior to
publication of this notice). The authorities will expire at the
2025 AGM.
Resolution 11 will renew the authority to allot shares and
Resolution 12 will authorise the Directors to disapply pre-
emption rights when issuing shares and selling shares from
treasury. The authorities will allow the Directors to issue or sell
up to 49,546,710 ordinary shares (with a nominal value of
£12,386,678) (or such other amount as shall be equivalent to
10% of the issued ordinary share capital (excluding shares
held in treasury) at the date of passing the resolution) on a non
pre-emptive basis. If renewed, the authorities will expire on
the earlier of the date falling 15 months after the passing of
the resolution and the conclusion of the next AGM.
The Board’s policy, subject to prevailing market conditions, is for
the Company’s share price to reflect closely its underlying NAV
while smoothing volatility and encouraging a liquid market in the
ordinary shares. For this reason, the Board has, when
appropriate, sought to utilise the Company’s ability to issue
additional ordinary shares to satisfy investor appetite and reduce
share price volatility by preventing the build-up of excessive
demand for the ordinary shares. By issuing the shares at a
premium to NAV, the Board seeks to protect the interests of
existing shareholders so they benefit from an enhancement to
NAV, to increase liquidity and to spread the fixed costs of the
Company over a larger asset base. The Board also seeks to
ensure that the price at which new ordinary shares are issued
remains attractive to potential investors.
Resolution 13: Repurchase of the Company’s
ordinary shares
(special resolution)
On 31 October 2024, the Directors were granted authority to
repurchase 74,100,744 ordinary shares (with a nominal value
of £18,525,186). Resolution 13 will renew the Company’s
authority to buy back shares. The authority under this
resolution is limited to the purchase of a maximum of 14.99%
of the ordinary shares in issue at the date of the resolution
(excluding shares held in treasury), equal to 74,270,519
ordinary shares at 12 September 2025.
The minimum price which may be paid for an ordinary share is
25p, being the nominal value per share. In accordance with
the UK Listing Rules of the FCA, the maximum price which
may be paid for an ordinary share is the higher of:
(i) 105% of the average of the middle market quotations for
the shares as taken from the London Stock Exchange Daily
Official List for the five business days preceding the date of
purchase; and
(ii) the higher of the last independent trade and the highest
current independent bid on the London Stock Exchange.
Both the minimum and maximum price are exclusive of any
relevant tax and expenses payable by the Company.
2,502,617 shares have been bought back under the existing
authority in the period to 12 September 2025. The Directors
believe that, from time to time and subject to market
conditions, it will continue to be in the shareholders’ interests
to buy back the Company’s shares when they are trading at a
discount to the underlying net asset value per share.
The City of London Investment Trust plc Annual Report 2025
99
Notice of Annual General Meeting (continued)
The Company may utilise the authority to purchase shares by
either a single purchase or a series of purchases when market
conditions allow, with the aim of maximising the benefit to
shareholders. This proposal does not indicate that the
Company will purchase shares at any particular time or price,
nor imply any opinion on the part of the Directors as to the
market or other value of the Company’s shares.
The Company may cancel or hold in treasury any shares
bought back under this authority. The authority granted under
Resolution 13 will expire at the earlier of the date falling
15 months after the passing of this resolution and the
conclusion of the next AGM and it is the present intention of
the Directors to seek a similar authority annually.
Resolution 14: Repurchase of the Company’s
Preferred Stock
(special resolution)
The Company has in issue 4.2% cumulative first preference
stock (“First Preference Stock”), 4.2% non-cumulative second
preference stock (“Second Preference Stock”) and 14%
non- cumulative preferred ordinary stock (“Preferred Ordinary
Stock”) (together the “Preferred Stock”).
On 31 October 2024, the Directors were granted authority to
repurchase for cancellation up to the entire issued capital
amount of each class of Preferred Stock. At the date of this
Notice, no repurchases have been made of any of the
Preferred Stock under this authority.
The Board considers that the Company should continue to have
the power to make market purchases of its Preferred Stock in
the event that appropriate opportunities to make such
purchases arise. Accordingly, a resolution will be proposed at
the forthcoming AGM to authorise the Company to make market
purchases for cancellation of the Preferred Stock, up to the
entire issued capital amount of each class in issue. The
maximum price that can be paid for each £1 of Preferred Stock
is an amount equal to a yield of 175 basis points over the
50-year gilt at the time of purchase. By way of example, as at
12September 2025, the 50-year gilt was at a 5.11% yield to
maturity. The lowest yield that would therefore be paid would be
6.86%, resulting in maximum prices (excluding accrued interest
and calculated as the stock interest coupon divided by the yield)
of 87.5p on the First Preference Stock, 61.2p on the Second
Preference Stock and 291.5p on the Preferred Ordinary Stock.
The Directors will only use the authority if to do so will result in
an increase in the NAV per ordinary share and will be in the
best interests of shareholders generally. This authority will
expire at the earlier of the date falling 15 months after the
passing of this resolution and the conclusion of the next AGM.
Resolution 15: Notice of general meetings
(specialresolution)
The Act and the Company’s Articles of Association provide
that all general meetings (other than an annual general
meeting) can be convened on 14 clear days’ notice. However,
one of the requirements of the Shareholders’ Rights
Regulation is that all general meetings must be held on
21clear days’ notice, unless shareholders agree to a shorter
notice period. The Board is of the view that it is in the
Company’s interests to have a shorter notice period which
allows all general meetings (other than an annual general
meeting) to be called on not less than 14 clear days’ notice.
The passing of Resolution 15 would constitute shareholders’
agreement for the purposes of the Shareholders’ Rights
Regulation and would therefore preserve the Company’s
ability to call general meetings (other than an annual general
meeting) on 14 clear days’ notice. The Board would utilise this
authority to provide flexibility when merited and would not use
it as a matter of routine. The Board intends to seek a renewal
of such authority at subsequent annual general meetings.
The City of London Investment Trust plc Annual Report 2025
100
Notice of Annual General Meeting (continued)
Notes to the Notice of Annual General
Meeting
1. Voting record date
Only members registered in the Registers of Members of the
Company at close of business on Tuesday, 28 October 2025
(the “voting record date”) shall be entitled to attend, speak
and vote at the AGM in respect of the number of voting rights
registered in their name at that time. Changes to entries on
the Registers of Members after the voting record date shall be
disregarded in determining the rights of any person to attend
and vote at the Meeting.
If the AGM is adjourned for no more than 48 hours after the
original time, the same voting record date will also apply for
the purpose of determining the entitlement of members to
attend, speak and vote (and for the purpose of determining
the number of votes they may cast) at the adjourned meeting.
If the AGM is adjourned for more than 48 hours, then the
voting record date will be close of business on the day which
is two days (excluding non-working days) before the day of the
adjourned meeting or, if the Company gives notice of the
adjourned meeting, at any time specified in that notice.
In the case of joint holders of a voting right, the vote of the
senior who tenders a vote, whether in person or by proxy,
shall be accepted to the exclusion of the votes of the other
joint holders and, for this purpose, seniority shall be
determined by the order in which the names stand in the
Register of Members in respect of the joint holding.
2. Right to attend and vote
Holders of ordinary shares, First Preference and Preferred
Ordinary Stock are entitled to attend, speak and vote on a poll
or show of hands. On a poll holders of: (a) ordinary shares
have one vote for every 15 shares; (b) First Preference Stock
have one vote for every £10 of stock held; and (c) Preferred
Ordinary Stock have one vote for every £20 of stock held.
3. Holders of Second Preference Stock
This notice is sent for information only to holders of the
Second Preference Stock who are not entitled to attend,
speak or vote at the Meeting.
4. Right to appoint proxies
Pursuant to Section 324 of the Act, a member entitled to
attend, speak and vote at the Meeting may appoint one or
more proxies, provided that each proxy is appointed to
exercise the rights attached to different shares/stock held by
him/her. A proxy need not be a member of the Company.
A Form of Proxy is enclosed. The return of the Form of Proxy
or a CREST proxy instruction will not preclude a member from
attending and voting in person at the Meeting.
If the total number of voting rights that the Chairman will be
able to vote (taking into account any proxy appointments
from shareholders over which he is given discretion and any
voting rights in respect of his own shares) is such that he
will have a notifiable obligation under the Disclosure
Guidance and Transparency Rules (“DTRs”) of the FCA,
theChairman will make the necessary notifications to the
Company and to the FCA.
Therefore, any member holding 3% or more of the voting
rights in the Company who grants the Chairman a
discretionary proxy in respect of some or all of those voting
rights and so would otherwise have a notification obligation
under the DTRs, need not make a separate notification to the
Company and to the FCA. However, any member holding 3%
or more of the voting rights in the Company who appoints a
person other than the Chairman as proxy will need to ensure
that both the member and the proxy comply with their
respective disclosure obligations under the DTRs.
Section 324 does not apply to persons nominated to receive
information rights pursuant to Section 146 of the Act. Persons
nominated to receive information rights under Section 146 of
the Act have been sent this Notice and are hereby informed,
in accordance with Section 149(2) of the Act, that they may
have the right under an agreement with the registered
member by whom they are nominated to be appointed, or to
have someone else appointed, as a proxy for this Meeting. If
they do not wish to exercise their right or do not have such
right, they may have a right under such an agreement to give
instructions to the member as to the exercise of voting rights.
Nominated persons should contact the registered member by
whom they were nominated (not the Company) in respect of
their arrangements.
The rights of members relating to the appointment of proxies
do not apply to nominated persons.
5. Proxies’ right to vote at the Meeting
On a vote by a show of hands, each proxy has one vote.
If a proxy is appointed by more than one member and all such
members have instructed the proxy to vote in the same way,
the proxy will only be entitled on a show of hands to vote “for”
or “against” as applicable. If a proxy is appointed by more than
one member, but such members have given different voting
instructions, the proxy may on a show of hands vote both “for”
and “against” in order to reflect the different voting instructions.
All or any of the voting rights of the member may be exercised
by one or more duly appointed proxies. However, where a
member appoints more than one proxy, Section 285(4) of the
Act does not permit the exercise by the proxies taken together
of more extensive voting rights than could be exercised by the
member in person.
6. Voting by corporate representatives
Corporate representatives are entitled to attend, speak and
vote on behalf of the corporate member in accordance with
Section 323 of the Act provided they do not do so in relation
to the same shares.
The City of London Investment Trust plc Annual Report 2025
101
Notice of Annual General Meeting (continued)
7. Receipt and termination of proxies
To be valid the enclosed Form of Proxy must be received by
the Company’s Registrar (Computershare Investor Services
PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY)
before 1.00pm on Tuesday, 28 October 2025 (or, in the case
of an adjournment, no later than 48 hours before the time
fixed for the holding of the adjourned meeting).
As an alternative to completing and returning the printed Form
of Proxy, you may submit your proxy electronically by accessing
www.investorcentre.co.uk/eproxy. For security purposes,
you will be asked to enter the control number, your
shareholder reference number (“SRN”) and personal
identification number (“PIN”) to validate the submission of your
proxy online. The control number and members’ individual SRN
and PIN numbers are shown on the Form of Proxy. To be valid,
electronic proxies must be received no later than 1.00pm on
Tuesday, 28 October 2025 (or, in the case of an adjournment, no
later than 48 hours before the time fixed for the holding of the
adjourned meeting).
A member may terminate a proxy’s authority at any time
before the commencement of the Meeting. Termination must
be provided in writing and submitted to the Company’s
Registrar.
In accordance with the Company’s Articles of Association, in
determining the deadline for receipt of proxies, no account
shall be taken of any part of a day that is not a working day.
8. Communication with the Company
Members may not use any electronic address provided either
in the Notice or any related documents (including the Form of
Proxy) to communicate with the Company for any purpose
other than those expressly stated.
9. Submitting proxies through CREST
To appoint one or more proxies or to give an instruction to a
proxy (whether previously appointed or otherwise) via the
CREST system, CREST messages must be received by the
Company’s agent (ID number 3RA50) no later than the
deadline specified in Note 7. For this purpose, the time of
receipt will be taken to be the time (as determined by the
timestamp generated by the CREST system) from which the
issuer’s agent is able to retrieve the message. The Company
may treat as invalid a proxy appointment sent by CREST in
the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
Instructions on how to vote through CREST can be found on
the website www.euroclear.com.
10. Questions at the Meeting
Any member attending the Meeting has the right to ask
questions. Section 319A of the Act requires the Directors to
answer any question raised at the AGM which relates to the
business of the Meeting, although no answer need be given:
(a) if to do so would interfere unduly with the proceedings of the
Meeting or involve disclosure of confidential information; or
(b) if the answer has already been given on the Company’s
website; or
(c) if it is undesirable in the best interests of the Company or the
good order of the Meeting that the question be answered.
11. Website
Members satisfying the thresholds in Section 527 of the Act
can require the Company to publish a statement on its
website setting out any matter relating to (a) the audit of the
Company’s financial statements (including the Auditors’ report
and the conduct of the audit) that are to be laid before the
Meeting; or (b) any circumstances connected with an auditor
of the Company ceasing to hold office since the last AGM,
that the members propose to raise at the Meeting. The
Company cannot require the members requesting the
publication to pay its expenses.
Any statement placed on the website must also be sent to the
Company’s Auditors no later than the time it makes its
statement available on the website. The business which may
be dealt with at the Meeting includes any statement that the
Company has been required to publish on its website.
By attending the Meeting, members and their proxies and
representatives are understood by the Company to have
agreed to receive any communications relating to the
Company’s shares made at the Meeting.
A copy of this Notice, including the information required by
Section 311A of the Act, is available from the Company’s
website, www.cityinvestmenttrust.com.
12. Documents available for inspection
Copies of the Directors’ letters of appointment may be
inspected at the registered office of the Company during
normal business hours on any day (Saturdays, Sundays and
public holidays excepted) and will be available at the AGM
from 15 minutes prior to the commencement of the Meeting
until its conclusion. No Director has a contract of service
with the Company.
13. Total voting rights
As at 12 September 2025 (being the last practicable date prior
to the publication of this Notice) the Company’s total voting
rights were:
(a) 495,467,106 ordinary shares (excluding shares held in
treasury), representing 33,031,140 votes;
(b) £301,982 of First Preference Stock, representing 30,198
votes;
(c) £589,672 of Preferred Ordinary Stock, representing 29,484
votes.
Therefore, the total number of voting rights in the Company as
at 12 September 2025 was 33,090,822. There are 7,197,762
ordinary shares held in treasury.
The City of London Investment Trust plc Annual Report 2025
102
The City of London Investment Trust plc Annual Report 2021
Strategic Report
Performance 2-3
The City of London Story 4-5
Chairman’s Statement 6-9
Portfolio Snapshot 10-11
Fund Managers’ Report 12-17
Portfolio Information 18-19
Historical Information 20
Business Review 21-36
Governance
Directors and Fund Managers 38-39
Directors’ Report 40-42
Corporate Governance Report 43-49
Audit and Risk Committee Report 50-52
Nominations Committee Report 53-54
Directors’ Remuneration Report 55-58
Statement of Directors’ Responsibilities 59
Independent Auditor’s Report to the
Members ofThe City of London
Investment Trust plc 60-66
Financial Statements
Income Statement 68
Statement of Changes in Equity 69
Statement of Financial Position 70
Notes to the Financial Statements 71-86
Additional Information
Securities Financing Transactions 88-89
Alternative Performance Measures 90-91
Glossary 92
General Shareholder Information 93
Financial Calendar 94
Notice of AGM
Notice of Annual General Meeting 95-102
Corporate Information 103
The City of London Investment Trust plc Annual Report 2025
Corporate Information
Registered Office
201 Bishopsgate
London EC2M 3AE
Service Providers
Alternative Investment Fund Manager
Janus Henderson Fund Management UK Limited
201 Bishopsgate
London EC2M 3AE
Corporate Secretary
Janus Henderson Secretarial Services UK Limited
201 Bishopsgate
London EC2M 3AE
Telephone: 020 7818 1818
Email: itsecretariat@janushenderson.com
Depositary and Custodian
HSBC Bank plc
8 Canada Square
London E14 5HQ
Stockbroker
Cavendish Capital Markets Limited
1 Bartholomew Close
London EC1A 7BL
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Telephone: 0370 889 3296
Email: WebCorres@computershare.co.uk
Investors with share certificates (i.e. not those with
ashareplan or ISA) can check their holding at
www.investorcentre.co.uk
Independent Auditor
Ernst & Young LLP
25 Churchill Place
London E14 5EY
Information Sources
For more information about The City of London Investment
Trustplc, visit the website at www.cityinvestmenttrust.com
This includes factsheets, interviews, current information on
the Company and up-to-date share price and net asset
valuedetails.
To sign up for expert insights about investment trusts,
updates from our fund managers as well as AGMs and
TrustTV episodes, please visit this page:
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Investing
Shares can be purchased in the market via a stockbroker
orthrough share dealing platforms. They can also be held
through share plans, ISAs or pensions and links to various
providers are included on the website.
Potential investors are reminded that the value of investments
and the income from them may go down as well as up and
investors maynot get back the full amount invested. Tax
benefits may varyas a result of statutory changes and their
value will depend onindividual circumstances.
103
The City of London Investment Trust plc Annual Report 2021
The City of
London
Investment
Trust plc
Annual Report 2025
JHI9224/2025The City of London Investment Trust plc – Annual Report 2025
The City of London Investment Trust plc
Registered as an investment company in England and Wales
Registration Number: 34871
Registered Office: 201 Bishopsgate, London EC2M 3AE
ISIN number/SEDOL: Ordinary Shares: GB0001990497/0199049
London Stock Exchange (TIDM) Code: CTY
Global Intermediary Identification Number (GIIN): S55HF7.99999.SL.826
Legal Entity Identifier (LEI): 213800F3NOTF47H6AO55
Telephone: 020 7818 1818
Email: itsecretariat@janushenderson.com
www.cityinvestmenttrust.com
JHI9224/2025Designed and typeset by 2112 Communications, London. Printed by Paragon Leycol.
This report is printed on Revive 100 Silk manufactured from FSC
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59