CCAP.L Regulatory News (CCAP)

Charlemagne Capital Limited

Annual results to 31 December 2013 (Audited)

Charlemagne Capital ("Charlemagne" or the "Group") has today announced its audited annual results for the year ended 31 December 2013:

Financial Highlights

· Total revenue for the year - US$41.3 million (2012: US$30.7 million) including:

· Management Fees - US$23.9 million (2012: US$20.5 million)

· Performance Fees and other income - US$17.4 million (2012: US$10.2 million)

· Operating Profit - US$9.5 million (2012: US$5.1 million)

· Net Profit after Tax and Minority Interest - US$4.2 million (2012: US$1.9 million)

· Earnings per share - 1.5 US cents per share (2012: 0.7 US cents per share)

· Total Dividends - paid and declared in respect of 2013 - US$4.3 million (2011: US$2.8 million)

· Assets Under Management- US$2.73 billion (2012 US$2.63 billion)

· Strong financial position - US$25.3 million held in cash

· Group well positioned for an recovery in Emerging Markets with strong operational base offering significant capacity for future growth in AuM

Commenting on the 2013 full year results Chief Executive, Jayne Sutcliffe said:

"Despite a challenging year with emerging markets continuing to underperform developed markets, our bottom up, quality driven strategy has allowed us to identify good investment opportunities enabling us to outperform our relative benchmarks. In particular, our emerging market equity income and growth strategy has achieved top decile performance over one and three years and six of our Magna sub funds have delivered top quartile performance.

"With the asset class experiencing substantial net outflows our ability to grow assets under management has been particularly pleasing and is testament to the quality of our capabilities.

"We have seen encouraging flows into the Magna funds, notably in the Global Emerging Markets funds, and into Eastern European and Frontiers strategies. With strong underlying performance, we believe we are well positioned to benefit from renewed inflows into emerging markets funds.

"While the short term outlook is challenging, valuations are reasonable and we have confidence that emerging market economies will continue to generate moderate and sustainable growth opportunities going forward."

Enquiries:

Chairman's Statement

Once again we are looking back at a challenging year with Emerging Markets significantly underperforming developed markets. We had hoped that this asset class would perform better than the more mature markets and we would have assumed that Emerging Market Currencies would finally bottom out and start to strengthen again. The asset class as a whole saw substantial net outflows over the year as investors became concerned over the macroeconomic environment in some developing economies.

Despite the unsettled environment, it is very pleasing to report that we grew our Assets under Management (AuM) over the year. The performance of the Group's managed investments was strong and continued to outperform their relative benchmarks during the year. The emerging market equity income and growth strategy has achieved top decile performance over one and three years in its Morningstar peer group and eight out of nine of the Magna sub funds performed better than their respective median fund for the year, with six providing top quartile performance. The OCCO fund has again provided consistent positive investment returns in line with its stated objectives.

In contrast to the general industry trend, the Group has seen net inflows over the year. These inflows have been into the core, long only funds, in line with our asset raising strategy. Magna had net inflows of US$193 million, helping to achieve a nearly 54% increase in mutual fund assets within that range over the year. The sub-advisory white label business again experienced consistent net outflows throughout the year totalling US$129 million by the end of the period. The institutional business benefitted from the acquisition of two new mandates and net inflows from existing mandates; unfortunately, we did see outflows which caused the overall net flows to be negative in this category.

The Group ended the year with Assets under Management (AuM) at US$2.7 billion, 3.8% higher than at the beginning. In the second half of the year, net inflows of US$128 million (compared with net outflows of US$80 million in the first six months) and 7.4% positive investment performance, led to an increase in AuM of 12.9% since June.

I am pleased to report that the business has generated increased revenues and profits for the year. We have continued to ensure our investment management capabilities and resources are suitable to meet our objectives of sustainable superior performance and growth in assets.

Our stated intention and the policy of the Group is to continue to declare regular dividends to reflect the earnings and cash flow of the Group. Shareholders have already received dividends of US$1.4 million (0.5 cents per share) in respect of the first interim distribution for 2013 (2012: US$ nil). A further amount of US$2.9 million (1.0 cents per share) is now being declared in respect of the second interim distribution for 2013 (2012: US$2.8 million).

It has been another tough year during which external factors have impacted negatively on the sector in which we operate. The effect of market movements and sentiment is significant and is beyond our control. However we are encouraged by the positive growth we have achieved and that the initiatives being worked on over the recent periods have started to provide tangible results.

The Group continues to hold the bulk of its assets in cash or liquid assets and has no borrowings. We have the capacity within our operational base to take on significantly more AuM and grow the profitability of our business accordingly and are well positioned for an upturn in the markets.

Finally, I wish to thank the staff at Charlemagne Capital for their effort and continued commitment. Throughout the recent difficult periods, we have built a strong investment performance track record and refined our management processes. We are well positioned to take advantage of any improvement in the wider market conditions that would provide the stimulus for future growth.

Michael Baer

17 March 2014

Financial and Operating Review

Financial Results

Profit, after taxation and minority interests, was US$4.2 million for the year ended 31 December 2013 compared with US$1.9 million in 2012. The increase in profit for the year reflects the higher average level of assets under management throughout the period compared with the previous year, and the incidence of greater performance fees generated in the year.

AuM at year end stood at US$ 2.7 billion, 3.8% higher than at the beginning of the period, with significant growth in the Magna long only funds and steady performance driven growth in OCCO.

Operating profit before tax and non-recurring items was US$9.5 million, up 86.3% on the previous year. Revenue from net management fees in the period increased by 16.6% from the prior year to US$23.9 million (2012: US$20.5 million). Average AuM was 7% higher than the previous year and the Group's net management fee margin increased to 91 basis points ("bps") by the end of the year (2012: 85 bps) due to there being a full year contribution from the OCCO higher fee classes and the growth in Magna combined with the reduction in lower margin institutional funds.

The overall investment performance of funds managed and advised by the Group was positive in US Dollar terms for the year as a whole. Crystallised net performance fees of US$16.2 million (2012: US$9.0 million) were earned during the year. The majority of this fee was earned on the Group's OCCO product.

Operating expenses for the year were US$31.8 million (2012: US$25.6 million), the increase being due to the increase in profit related compensation and associated payroll taxes attributable to the OCCO division. The Group's operating profit margin for the year improved to 22.9% (2012: 16.5%) due to the increase in revenue from performance fees.

After taxation and other income and expenditure, earnings per share attributable to shareholders were 1.4 US cents per share (2012: 0.7 US cents per share) on a fully diluted basis.

Net cash used during the year was US$2.7 million following the payment of dividends in respect of financial years 2012 and 2013 totalling US$4.2 million. In the absence of unforeseen circumstances it has been the Directors' intention that the bulk of cash generated will be returned to shareholders by means of dividends and share buy back programmes as appropriate. In respect of this financial year, the Directors consider it appropriate to fully distribute the net profit generated in the year.

Net assets attributable to shareholders have increased from US$27.8 million to US$28.7 million before payment of an interim dividend of 1.0 US cents per share which has been declared by the Directors and will be paid on 25 April 2014 at a cost of US$2.9 million. The Group continues to hold substantial cash balances above that required for regulatory capital purposes. It is not proposed to recommend a final dividend as interim dividends have been recommended by the board in order that the funds can be paid to shareholders more quickly than would otherwise be the case.

Operations and Investment Review

There has been an overall increase in AuM of US$99 million for the full year, comprising an increase in market values of US$51 million and net inflows from the Group's products of US$48 million.

Global markets posted positive returns for the year, however, the MSCI Emerging Markets Index ended the year negative and well behind the MSCI World index for developed markets. Alongside this dedicated emerging market funds reported net industry outflows over the year. Investors were enthused by the prospect of a recovery in richer countries and concerned aboutthe worsening macroeconomic environment in some developing economies. There were also worries that the end of the US Federal Reserve's super-easy money would lead to withdrawals from fixed income markets. At the micro level, too, company profits were affected by increased wage costs - a natural and desirable outcome for the long term development of these countries, as long as they are broadly matched by productivity gains.

The outlook depends on the extent to which the above trends are behind us and are now 'in the price'. In the case of some of the weaker economies, currency declines since the second quarter of last year have already had a positive impact on current accounts. The short term outlook is challenging, but valuations are reasonable and we have confidence that emerging market economies will continue to generate moderate and sustainable growth opportunities.

The last year has again showed the value of stock picking in emerging markets, as investors distinguish between good and bad companies, and as better businesses - those that create consistent value for shareholders - continue to command a premium valuation. In the absence of a massive beta rally in risk assets, we expect this trend to continue, and thus provide an environment in which our investment process should further add value.

Magna UCITS Funds

Overall, 2013 saw net inflows into the Magna range. The GEMS Dividend sub fund attracted net inflows of US$240 million for the year on the back of continued strong performance. This strategy has seen top quartile performance over one and three years.

At the end of 2013, there were ten sub-funds within the Magna Umbrella Fund with a total AuM of US$560 million (2012: US$364 million).

OCCO

The OCCO fund has grown from US$597 million at the end of 2012 to US$664 million as at the end of 2013 due to investment performance. The fund remained closed to new subscriptions during the year.

Specialist

This fund area comprises principally a range of Private Equity property funds. During 2013 a new directional UCITs hedge fund targeting opportunities in emerging and frontier markets was launched. At the end of the year, Specialist Mandates had a total AuM of US$130 million (2012: US$150 million).

Institutional Business

This category includes segregated accounts together with a range of pooled funds tailored to the needs of institutions and some sub-advisory/white label accounts. This category has seen a decrease in asset values due mainly to outflows from white label accounts. At the end of the year, Institutional Mandates had a total AuM of US$137 million (2012: US$153 million).

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Approved by the Board of Directors on 17 March 2014.

Lloyd Jones Jane McAndry

Consolidated Statement of Changes in Equity

Consolidated Cash Flow Statement

Company Statement of Financial Position

Approved by the Board of Directors on 17 March 2014.

Lloyd Jones Jane McAndry

Notes to the Financial Statements

1. The Company

Charlemagne Capital Limited (formerly Regent Fund Management (Cayman) Limited and Regent Europe Limited) was incorporated in the Cayman Islands as an exempt company with limited liability (registered number CR-75327) on 29 July 1997. The Company's registered office is at P.O. Box 309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands, British West Indies. The consolidated financial statements of the Company for the year ended 31 December 2013 comprise the Company and its subsidiaries (together referred to as the "Group").

2. Basis of Preparation

Statement of Compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union (EU). The financial statements were authorised for issue by the Directors on 17 March 2014.

Basis of Measurement

The consolidated financial statements are prepared on the historical cost basis except for the following that are stated at their fair value: financial instruments at fair value through profit or loss including derivative financial instruments. Recognised assets and liabilities that are hedged are stated at fair value in respect of the risk that is hedged.

Functional and Presentation Currency

The Company's shares are issued in United States Dollars ("US Dollars") as the US Dollar is a more widely recognised currency internationally than the local currency of the Cayman Islands. The functional and presentation currency of the Parent Company and subsidiary financial statements is US Dollars and not Cayman Islands Dollars reflecting the fact that the transactions are denominated in US Dollars.

Use of Estimates and Judgements

The preparation of financial statements in conformity with IFRS, as adopted by the EU, requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

In particular, information about significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are described in note 26.

Changes in Accounting Policies

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2013, and have not been applied in preparing these consolidated financial statements. None of these are expected to have a significant effect on the consolidated financial statements of the Group.

3. Significant Accounting Policies

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements and have been applied consistently by the Group entities.

Basis of Consolidation

Subsidiaries

Subsidiaries are those enterprises controlled by the Group. Control exists where the Group has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

Jointly controlled entities

Jointly controlled entities are those entities over whose activities the Group has joint control, established by contractual agreement, and are accounted for using the equity accounting method in the consolidated financial statements.

Transactions eliminated on consolidation

Intra-group balances and transactions and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Investment in funds managed by Charlemagne Capital Group companies

Certain Group companies, from time to time, purchase shares in funds managed by other Charlemagne Capital Group companies. Such holdings can amount to over 20% of the issued share capital and occasionally more than 50%. Those holdings over 50% of the issued share capital are treated as subsidiaries. Those holdings which are over 20% but not more than 50% of the issued share capital are treated as associates and equity accounted in the consolidated financial statements for the Group. No holdings of over 20% but below 50%, and no holdings of over 50% in Charlemagne managed funds existed at 31 December 2013 or 2012.

Foreign Currency

Foreign currency transactions

Transactions in foreign currencies are translated to US Dollars at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to US Dollars at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies, which are stated at historical cost, are translated to US Dollars at the foreign exchange rate ruling at the date of the transaction.

Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to US Dollars at foreign exchange rates ruling at the reporting date. The income and expenses of foreign operations are translated to US Dollars at the foreign exchange rates at the dates of the transactions. Foreign currency differences are recognised in other comprehensive income, and presented in the "foreign currency exchange reserve" in equity. When a foreign operation is disposed of, in part or in full, the relevant amount in the foreign currency exchange reserve is transferred to profit or loss.

Property and Equipment

Items of property and equipment are measured at cost less accumulated depreciation and impairment losses.

Depreciation

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of items of property and equipment taking into account the items residual value. The estimated useful lives are as follows:

Furniture and fixtures 5 years

Computer equipment 3 years

Other equipment 4 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

Investments at Fair Value Through Profit or Loss

Classification and measurement

An instrument is classified at fair value through profit or loss if it is classified as held for trading or is designated as such upon initial recognition. Financial instruments are designated at fair value through profit or loss if the Group manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Group's risk management or investment strategy. Upon initial recognition attributable transaction costs are recognised in profit or loss when incurred. Financial instruments at fair value through profit or loss are measured at fair value, and changes therein are recognised in profit or loss. All investments are designated at fair value through profit or loss, except for derivative financial instruments which are classified as held for trading.

Recognition and derecognition

The Group recognises financial assets at fair value through profit or loss on the date it commits to purchase the instruments. From this date any gains and losses arising from changes in fair value of the assets are recorded. These assets are derecognised when the contractual rights to receive cash flows from the assets have expired or when the Group has transferred the right to receive the contractual cash flows in a transaction in which substantially all risks and rewards of ownership are transferred.

Fair value measurement principles

The value of financial instruments is based on their quoted market bid price, where available, at the balance sheet date without any deduction for transactions costs. If a quoted market price is not available on a recognised exchange or from a broker/dealer for non-exchange traded financial instruments, the fair value of the instrument is estimated by the Board of Directors.

The following represents the fair value hierarchy of financial instruments measured at fair value in the statement of financial position. The hierarchy groups financial assets and liabilities into three levels based on the significance of inputs used in measuring the fair value of the financial assets and liabilities. The fair value hierarchy has the following levels:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The level within which the financial asset or liability is classified is determined based on the lowest level of significant input to the fair value measurement.

Trade and Other Receivables

Trade and other receivables are measured at amortised cost less impairment losses.

Trade and Other Payables

Trade and other payables are measured at amortised cost.

Cash and Cash Equivalents

Cash and cash equivalents comprise cash balances and call deposits. For the purpose of the statement of cash flows, cash and cash equivalents would be presented net of bank overdrafts if any existed.

Impairment of Non Financial Assets

The carrying amounts of the Group's assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. All impairment losses and reversals are recognised in profit or loss.

Share Capital

Ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of tax effects.

Repurchase of share capital

When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, is recognised as a change in equity. Repurchased shares are classified as cancelled shares and presented as a deduction from total equity.

Treasury shares

Shares issued to the Charlemagne 2005 Employee Benefit Trust (note 22) are accounted for as treasury shares within equity (see note 20).

Dividends

Dividends are recognised as a liability in the year in which they are declared and approved.

Revenue Recognition

Provided it is probable that the economic benefits will flow to the Group and the revenue and costs, if applicable, can be measured reliably, revenue is recognised in profit or loss as follows:-

(a) investment management, administration and advisory fees contractually receivable by the Group, net of rebates, are recognised in the year in which the respective fees are earned. Performance fees arising upon the achievement of specified targets are recognised at the respective funds' year-ends, when such performance fees are confirmed as receivable, or when there is a crystallising event, including but not limited to redemption of shares against which performance fees have been accrued;

(b) profit or loss on sale of investments is recognised when title is passed;

(c) interest is recognised on a time apportioned basis using the effective interest rate;

(d) dividend income from unlisted investments is recognised when the shareholder's right to receive payment is established. Dividend income from listed investments is recognised when the share price of the investment turns ex-dividend;

(e) revenue related to provision of services is recognised on an accruals basis.

Operating Lease Payments

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease.

Employee Benefits

Obligations for contributions to employees' International Pension Plans are recognised as an expense in profit or loss as incurred. Obligations to the Charlemagne 2005 Employee Benefit Trust are recognised as an expense in profit or loss to the extent that these have been provisionally allocated to discretionary revocable sub-trusts of which certain Directors and employees of the Group may become beneficiaries.

In common with other groups which have initiated employee benefit trusts, from time to time the Group may receive inquiries from revenue authorities regarding taxation aspects. It is the policy of the Group to account for any taxation due as a result of such inquiry in the year in which the substance of any settlement becomes probable.

The fair value of the amount payable to employees in respect of share appreciation rights, which are settled in cash, is recognised as an expense, with a corresponding increase in liabilities, over the period the employees become unconditionally entitled to payment. The liability is remeasured at each reporting date and at settlement date. Any changes in the fair value of the liability are recognised as personnel expense in profit or loss.

The fair value of employee stock options is measured using a Black-Scholes or binomial lattice model. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility, weighted average expected life of the instruments (based on general option holder behaviour), expected dividends, and a risk-free interest rate. Service and non-market performance conditions attached to the transactions are not taken into account in determining fair value.

Income Tax

Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. A deferred tax asset is reduced to the extent that it is no longer probable that the related tax benefit will be realised.

From time to time the Group receives inquiries from revenue authorities into its taxation affairs, as is common for entities operating international transfer pricing policies. It is the policy of the Group to account for any taxation due as a result of such inquiry in the year in which the substance of any settlement become probable.

Investment in Subsidiaries and Associates

The Company's investments in the subsidiaries and associates are stated at cost less impairment losses.

Comparative Figures

Where necessary, comparative figures have been adjusted to conform to changes in presentation for the current year.

Earnings per Share

The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees.

4. Revenue

5. Personnel Expenses

The highest paid Director had emoluments of US$0.57 million (2012: US$0.45 million).

The number of employees of the Group as at the end of the year was 62 (2012: 61) full time equivalent.

The Group operates a discretionary bonus scheme, as approved by the Board, which is based on the Group's divisional profit before tax. Bonuses are accounted for in the financial year in which the bonus is earned.

In 2005 the Group created an employee benefit trust, the Charlemagne 2005 Employee Benefit Trust ("EBT"). The EBT is controlled by an independent Trustee (the "Trustee"). The EBT was created in order to motivate and retain the Group's Directors and employees, each of whom is a potential beneficiary from the trust. Her Majesty's Revenue and Customs ("HMRC") in the United Kingdom have made certain enquiries in respect of these arrangements and protective assessments in respect of social security contributions have been raised. This stance is consistent with the approach taken by HMRC to many businesses which have utilised such employee benefit trust structures.

Management are firmly of the opinion that challenges by HMRC against entities within the Group are without merit and will be robustly defended. Accordingly, no provisions have been made by any Group entities in respect of additional tax obligations, including any related interest or penalties thereon. However, should any challenges prove successful or should tax legislation change significantly to the detriment of the Group, liabilities may arise which may or may not be significant.

The Group's EBT arrangements provide that the Trustee must retain sufficient sums to allow such liabilities to be met. During 2011 the UK Treasury published legislation that further impacts upon EBT arrangements. Based upon advice received, the Board remains of the view that no liabilities to the Group exist in relation to these EBT arrangements. However the Board will continue to monitor the position in the light of the new legislation and the UK Tax Authorities' actions in relation to similar structures.

No contributions have been made to the EBT during this or the prior year.

6. Related Party Transactions

Identity of related parties

The Group is related to its subsidiaries (note 14), and to its Directors and executive officers.

Transactions with Directors and executive officers

As at 31 December 2013 Directors of the Company and their immediate interests controlled 31% (2012: 31%) of the voting shares of the Company. The Directors' Remuneration Report on pages 15 and 16 gives details of share interests and remuneration.

Summary of transactions

The following is a summary of transactions with related parties during the current and prior years. All such transactions were entered into in the ordinary course of business.

a. Approximately 81% (2012: 74%) of the turnover from investment management, administration, performance incentive fees, advisory fees and commissions is derived from funds over which the Directors consider the Group has influence by virtue of its management, administration and advisory roles.

b. Certain Directors and the Company have shareholdings in certain funds managed by Charlemagne Capital Group companies.

c. During 2009 the Group established a subsidiary entity and entered into an economic interest agreement with this entity in respect of one of the management contracts held by the Group. An employee of the Group holds a 49.9% minority interest in the shares of this entity and has an option to acquire a further 12.6% of the shares in issue (see notes 14 and 22).

7. Profit from Operations

8. Segment Reporting

In accordance with IFRS 8 Operating Segments, the Group presents segment information in respect of its business segments that is consistent with information reviewed by management and based on the internal reports regularly reviewed by the Group's Chief Operating Decision Maker in order to assess each segment's performance and to allocate resources to them.

9. Taxation

10. Profit Attributable to Shareholders

The net profit attributable to shareholders reflected in the financial statements of the Company itself amounts to US$2.1 million (2012: US$0.3 million).

11. Dividends

A second interim dividend of 1.0 US cents (GB0.6583p) per ordinary share in respect of the year ended 31 December 2012 was paid on 26 April 2013 to those shareholders on the register on 5 April 2013 and was distributed from retained earnings in 2013.

An interim dividend of 0.5 US cents (GB0.3133p) per ordinary share in respect of the year ended 31 December 2013 was paid on 25 October 2013 to those shareholders on the register on 27 September 2013 and was distributed from retained earnings in 2013.

An interim dividend of 1.0 US cents (GB0.6014p) per ordinary share in respect of the year ended 31 December 2013 will be paid on 25 April 2014 to those shareholders on the register on 28 March 2014 and will be distributed from retained earnings in 2014.

12. Earnings Per Share

The calculation of basic earnings per share of the Group is based on the net profit attributable to shareholders for the year of US$4.16 million (2012: US$1.89 million) and the weighted average number of shares of 279,749,386 (2012: 278,110,208) in issue during the year.

The calculation of diluted earnings per share of the Group includes options that have vested but not yet been exercised and the weighted average number of share options where the specified performance conditions have been satisfied, but the service criteria have not yet been met (note 22). The weighted average number of shares in respect of diluted earnings per shares is 294,489,706 (2012: 278,110,208) for the year.

13. Property and equipment

There was no property and equipment in the Company.

Assets which were purchased at a historic cost of US$1.0 million and are fully depreciated are still being used by the Group.

14. Interests in Subsidiaries

Balances with subsidiaries are included within current assets and current liabilities within the parent company statement of financial position.

Particulars of the principal subsidiaries of the Company at 31 December 2013 are as follows:

15. Investments

There were no investments held by the Company.

The group's exposure to credit and market risks, and fair value information related to investments are disclosed in note 23.

16. Deferred Taxation

There is an unrecognised deferred taxation asset of US$5,415 (2012: unrecognised liability of US$5,059) representing the tax effect of depreciation in excess of capital allowances.

17. Trade and Other Receivables

As at 31 December 2013, there were no margin deposits held by the Group (2013:$nil) in respect of the normal trading in currencies, futures and options (note 23).

The group's exposure to credit and market risks, and impairment losses related to trade and other receivables are disclosed in note 23.

18. Cash and Cash Equivalents

19. Trade and Other Payables

The Group's exposure to currency and liquidity risk related to trade and other payables is disclosed in note 23.

20. Issued Share Capital

During the year ended 31 December 2013 and 2012, the Company did not repurchase any of its own shares. Following the year end the Company issued 10,500,000 new ordinary shares of US$0.01 each.

Included within share capital are nil (2012: 1,409,076) shares which are held on behalf of a subsidiary of the Company (see note 22). These are accounted for as treasury shares and are included as a debit reserve within equity.

As at the date of signing the financial statements there were 290,885,616 ordinary shares of US$0.01 each issued and fully paid of which 5,670,357 are held as treasury shares with the intention that they will be utilised to settle equity settled share awards.

21. Share Capital and Reserves

Under Cayman Island law all categories of reserves are distributable. However, under normal circumstances the Company considers that only retained profits are distributable to shareholders. In the previous periods, the Company has repurchased some of its own shares. These shares were cancelled upon repurchase and accordingly the issued share capital of the Company was reduced by their nominal value.

The Board's policy is to maintain an adequate capital base so as to maintain investor, creditor and market confidence and to sustain future development of business. The Board of Directors monitors the return on capital and the level of dividends to ordinary shareholders.

There were no changes to the Group's approach to capital management during the year.

Two of the Company's subsidiaries are subject to externally imposed capital requirements and are required to submit periodic returns summarising their financial resources. These companies have complied with relevant regulatory requirements in all material respects during the year.

22. Share Based Incentive Plans

Equity Settled

The Group has established several share based incentive programmes that entitle certain employees to acquire shares in the Company subject to the vesting conditions set out below at an exercise price that was set at the date of grant.

The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the vesting period. The amount recognised as an expense is adjusted to reflect the actual number of share options that are expected to vest.

The number and weighted average exercise price of outstanding share options is as follows:

22. Share Based Incentive Plans (continued)

Equity Settled (continued)

The options outstanding at 31 December 2013 have an exercise price between GBPNil and GBP0.748 and a weighted average contractual life of 0.5 years. Outstanding share options are contingent upon specified performance and service criteria being satisfied.

During the period 2,762,697 nil price share awards vested and were exercised.

During the period 45,000 options failed to meet the required service criteria. Amounts of GBP5,112 previously provided for these options were written back to profit or loss.

During the period 66,666 options failed to meet the required performance criteria. Amounts of GBP6,742 previously provided for these options were written back to profit or loss.

As at 31 December 2013 99,988 options had vested but had not been exercised. The average exercise price of these options is GBP0.74.

The fair values of the options granted during the year are measured at the grant date using a Black-Scholes or binomial lattice model and spread over the vesting period of these schemes. The values are adjusted to reflect the actual number of shares that are expected to vest and recognised as an employee expense with a corresponding increase in equity.

There were no options issued during the year.

The estimate of the fair value of the share options and share awards granted has been calculated by reference to the face value of the award adjusted for the loss of dividends over the vesting period. All other options are measured using a binomial lattice model to estimate the early exercise behaviour. The contractual life of the options, 7-10 years, is used as an input to this model.

The Company's shares were not traded before the initial options were granted. In setting the volatility assumption therefore regard was given to the share price volatilities of the Company's closest traded comparator companies, as well as the share price since listing. Based on daily and weekly price observations, the share price volatility was estimated at around 50% which was comparable to that of its competitors over a longer period. For those options issued substantially after listing the share price volatility has been assumed to be 40% or 37.4% or 60% relating the average volatility between listing and the grant dates.

An employee of the Group holds a 49.9% minority interest in the shares of a group entity and has an option to acquire a further 12.6% of the shares in issue. The Group has retained an option to re-acquire the shares held by the employee for a nominal

sum under certain conditions, should the employee's option no longer be exercisable for any reason. As at the grant date, the Directors believe that the option granted to the employee had no significant value. All options involved in this arrangement expire on 31 December 2018.

The share options are granted under service and non-market performance conditions. Such conditions are not taken into account in the grant date fair value measurement of the services received. There are no market conditions associated with the share option grants.

At 1 January 2013 the trustees of the Charlemagne 2005 Employee Benefit Trust (EBT) held 1,409,076 Company shares with the intention that they would be utilised to settle equity settled options as they vested and were exercised. During the year all 1,409,076 shares were transferred to employees in respect of share awards that had been exercised leaving no shares held by the EBT as at 31 December 2013.

Cash settled

There were no cash settled share-based incentive plans in issue during the year.

Expenses in respect of share based incentive plans

The following amounts have been charged as an expense within these financial statements:

Included in the charge for equity settled incentive plans shown above were amounts totalling US$290,780 (2012: US$217,785) relating to directors.

23. Financial Instruments - Fair Values and Risk Management

a) Accounting Classification and Fair Values

The following table shows the carrying amounts and fair values of financial assets and financial assets and financial liabilities, including their levels in the fair value hierarchy.

b) Measurement of Values

i) Valuation techniques

The valuation technique applied to level 2 financial instruments is based on the net asset value per share of the relevant investments which are published by their appointed custodian.

Level 3 financial assets consist solely of investments in a private company. The fair value of this investment is determined based on the most recent net assets of the company.

There have been no changes to the valuation techniques used during the year.

ii) Level 3 fair values

Reconciliation of Level 3 fair values

The following table shows a reconciliation from the opening balances to the closing balances for Level 3 fair values.

The Group holds an investment in equity shares of a private company, which had previously been classified within trade and other receivables as it was only intended to be held temporarily on behalf of one of the funds it manages. The fair value of this investment was US$198k at 31 December 2012. The Group has reclassified the holding as an equity investment available for sale in the year ended 31 December 2013 as the Group is now retaining the investment.

c) Financial Risk Management

Financial assets of the Group include cash and cash equivalents, investments and other receivables. Financial liabilities include accruals and other payables. The carrying amounts of these other assets approximate their fair values.

The Group operates a central Treasury function based upon weekly cash flow forecasts for each of the operating entities and the Group as a whole. This enables the regulatory liquidity requirements to be managed accurately for each entity subject to them. The Group normally operates a position of holding US dollars for all amounts in excess of working capital needs held in local currencies. Such balances are placed on deposit with major banks taking account of prudent spreading of risk. Where a decision is taken to hold local currency balances in excess of working capital needs, it is required that an Executive Director approves the position. All currency positions are formally monitored monthly by the Board as part of the Group's reporting procedures.

There is strict segregation between the investment management and deal settlement functions.

The Group has established a Group Risk Committee that reports to the directors and oversees how management monitors compliance with the Group's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.

In the course of the Group's normal trading in currencies, futures and options, margin deposits of varying amounts of cash are held by the Group's brokers. As at 31 December 2013, no margin deposits were held (2012: US$nil).

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation.

The Group is exposed to liquidity risk to the extent that it holds stakes in certain financial instruments for which no developed market exists. Therefore, the Group might be unable to sell such stakes quickly at close to fair value. This risk is managed by the Group by means of cash flow planning to ensure that future cash requirements are anticipated and, where financial instruments have to be sold to meet these requirements, the process is carried out in a controlled manner intended to minimize the liquidity risk involved.

Residual contractual maturities of financial liabilities:

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group's receivables from customers and investment securities.

The majority of debtors arise from fund management and related activities of the Group. As such the Group is able to determine that the credit risk is considered minimal in relation to the majority of its debtors. For other debtors a credit evaluation is undertaken on a case by case basis. To reduce exposure to credit risk arising from non-performance by counterparties in derivative transactions, the Group's policy is to transact business through brokers with high credit ratings wherever practicable. The Group invests available cash and cash equivalents with various banks. The Group is exposed to credit-related losses in the event of non-performance by counterparties to financial instruments but, given their high credit ratings, management does not expect any counterparty to fail to meet its obligations.

At the reporting date, the maximium credit exposure of the Group's financial assets exposed to credit risk amounted to the following:

The credit risk on transactions with funds primarily relates to transactions awaiting settlement. This risk is considered low due to the short settlement period involved and the high credit quality of the funds involved. Included in receivables past due more than 90 days are amounts totalling US$206,000 (2012: US$397,683) after allowing for a total impairment provision of US$554,471 (2012: US$ 740,097).

The cash and cash equivalents held by the Group are held by a number of international banks and it is the Group's policy to avoid concentrating credit risk in any one institution.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and equity prices will affect the Group's income or the value of its holding of financial instruments.

The Group is exposed to market risk directly via its investment holdings and indirectly via assets under its management, from which its fee income is derived. As the investments held directly and indirectly are mostly in the emerging markets, there is a concentration of this risk and any general movement in these markets would have a significant impact on the Group's income and the value of the Group's investments. Investments subject directly to market risks which are held at fair value amounting to US$7,433,000. If the value of these investments, as at 31 December 2013, increased by 1% the profit of the Group would be increased by US$74,330. A decrease of 1% would have had an equal and opposite effect.

Foreign currency risk

The Group is exposed to foreign currency risk on investments and expenses denominated in currencies other than US Dollars. The Group will normally hedge large exposures to foreign currency risk by using forward exchange contracts.

In respect of monetary assets and liabilities denominated in foreign currencies, the Group ensures that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short term imbalances.

The Group's exposure as at the reporting date was as follows:

As at 31 December 2013, had the US Dollar strengthened by 1% in relation to all other currencies, with all other variables held constant, the net assets of the Group would have been decreased in both profit and equity by US$14,890 (2012: US$9,930). A weakening of the US Dollar by 1% against the above currencies would have had an equal and opposite effect.

Interest rate risk

The Group is exposed to interest rate risk with regard to holdings in cash and cash equivalents. All cash holdings and cash equivalents are held in accounts with variable rates. The Group does not have any borrowings. Surplus funds are placed on short term deposit.