CIN.L Regulatory News (CIN)

City of London Group plc ("COLG" or "the Company")

AGM Management Statement

Highlights

·; Our investment portfolio performs well against falling markets

·; Net Asset Value per share at 31 July 2010 stands at 71.0p (70.9p per share)

·; COLG has made significant progress in developing its strategy

·; Share Placing with an Institutional Investor at 75p per share has just raised £562,500 of new Equity funds

·; We have agreed a new Bank overdraft facility with Lloyds Banking Group for £1.2million

At COLG's AGM today, the Chairman will make the following statement:

In the four months between our year end at the end of March and the end of July 2010, stock markets have been extremely volatile, with the increasing threat of a double-dip recession. Our investment strategy, being developed by the new management team, is to move a number of our existing holdings into alternative fund management opportunities, particularly focusing on the legal services sector and other specialist financing opportunities, where the Banks have withdrawn support and where strong management skills can be identified. This will make us much less dependent on the whim of stock markets to grow shareholder value.

During this period we have been evaluating a number of business opportunities and are hopeful of developing some of these in the coming months, as well as increasing third party funds under management.

Alongside this, we have concentrated on increasing our funding capability and that has culminated in the Directors using their powers, granted at the last AGM, to issue shares and warrants for cash at or above our net asset value, realizing initial gross proceeds of £562,500.

In addition, City of London Group has agreed to transfer its primary banking relationship to Lloyds Banking Group, where we have agreed an overdraft facility of £1.2million secured against the portfolio of our UK quoted shares. This facility will enable us to continue to fund new opportunities as they arise, whilst retaining fully our ownership of selected UK quoted holdings to maximize values on exit.

Our prospects and opportunities for the future look strong, but will depend heavily on our ability to grow new funding opportunities.

Results for the first six months to 30 September 2010 are expected to be announced on 14 December 2010.

Management presentations will follow the AGM and copies will be placed on the COLG website.

18 August 2010

For further information:

Notes to Editors:

City of London Group plc (COLG)is an investment company, with a wide range of national and international investments. A public company since 1986, COLG has had a full London Stock Exchange listing since August 1996 (LSE symbol CIN).

The Group's strategy is to build a quality financial services Group centred on specialist financing and Alternative Fund Management. It seeks above-average performance in growth and income via a prudent mix of low, medium and higher-risk investments. It holds a legacy portfolio of income stocks, offering a high degree of security, which are balanced by a higher risk portfolio, which is primarily focused on the minerals and resources sector, where the Board has particular experience. Its future strategy is to create a number of specialist funds to support business models and management skills where financing opportunities exist and yet conventional funding is not available.

Since the final quarter of 2009, significant Seed funds have been pledged to Therium Capital Management Limited, a third party litigation funder, and St.Helens Finance Legal Funding, which provides working capital loans to law firms. Historical investments have been made in Fundamental Tracker Investment Management Ltd, a privately quoted asset management company based in Glasgow (www.fundamentaltracker.com) and FX Capital Group, a privately quoted foreign exchange dealing company (www.fxcapitalgroup.co.uk). These investments are part of a policy of building a range of interests in the financial services sector.