Final Results

Charlemagne Capital Limited

Annual results to 31 December 2012 (Audited)

Charlemagne Capital ("Charlemagne" or the "Group") has today announced its audited annual results for the year ended 31 December 2012:

Financial Highlights

·; Total revenue for the year - US$30.7 million (2011: US$27.8 million) including:

·; Management Fees - US$20.5 million (2011: US$22.6 million)

·; Performance Fees and other income - US$10.2 million (2011: US$5.2 million)

·; Operating Profit - US$5.1 million (2011: US$6.1 million)

·; Net Profit after Tax and Minority Interest - US$1.9 million (2011: US$3.3 million)

·; Earnings per share - 0.7 US cents per share (2011: 1.2 US cents per share)

·; Total Dividends - paid and declared in 2012 - US$2.8 million (2011: US$2.8 million)

·; Assets Under Management - US$2.63 billion (2011 US$2.33 billion)

·; Strong financial position - US$28.0 million held in cash

Operational Highlights

·; Strong investment performance in key areas

·; New mandates awarded for the Latin American, Eastern Europe and GEMS strategies

·; Asset growth continuing into 2013 with total AUM US$2.72 million as at 28 February 2013

Commenting on the 2012 full year results Chief Executive, Jayne Sutcliffe said:

"In 2012 Emerging Markets moved back into the global spotlight, outperforming developed markets for the first time in two years. As confidence returned to the sector, investors demonstrated an increased appetite for equity risk. Inflows during the second half of the year were particularly pleasing and we are glad to see this momentum continuing into 2013 with assets under management rising to US$2.72 billion as at 28 February 2013.

"Our aim is to invest in quality companies with sustainable growth at reasonable valuations. For this, we look at opportunities across all regions, sectors and market capitalisations to provide strong, risk adjusted returns. This approach provided solid returns in 2012, with investors increasingly differentiating between those companies which produce good returns to shareholders and those that do not, even if some of the latter group might appear superficially cheap. The results were seen in an improved performance for our key strategies over the year.  In particular the Emerging Markets Income and growth strategy, which will reach a 3 year track record in June, continues to have top quartile performance since inception.

"Throughout a challenging period, we have continued to remain focussed on our core expertise and specialisation. Investment resource has been enhanced while fixed costs have been reduced. We remain financially strong, with significant cash resources and no debt. This provides us with a great deal of security and, as global Emerging Markets continue to recover, we maintain a confident outlook for the remainder of 2013."

Enquiries:

Chairman's Statement

2012 was generally a strong year for performance, with the Global Emerging Market funds and the key regional Latin American and East European funds in the 1st and 2nd quartiles at the close of the year. Notably, the Emerging Market Equity Income and Growth strategy has been a top quartile performer since its inception. The Latin American strategy continued its strong long term performance and was the beneficiary of net inflows during the year. The OCCO fund completed a successful fund-raising during this year. The sub-advisory White Label business experienced consistent net outflows throughout the year, principally from US retail clients. The Group's institutional mandates experienced significant outflows in the first quarter; however we are pleased to report a new US$130 million institutional Latin American mandate which was acquired in June. In addition we have been experiencing net inflows from existing mandates in the second half and, towards the end of the year, the Group was awarded two new mandates for Eastern Europe and GEMS, which will be funded in the second quarter of 2013.

Global markets reversed last year's trend and posted significant positive returns for the year with Emerging Markets outperforming developed markets for the first time in two years. The MSCI Emerging Markets Index ended the year up by 18.2% following a strong second half. With increased levels of confidence, investors were encouraged to take more equity risk and, as a result, inflows started to return to our asset class, with industry-wide reported inflows in 2012. The Group ended the year with Assets under Management (AuM) at US$2.6 billion, 13.1% higher than at the beginning. In the second half of the year, net inflows of US$129 million (compared with net outflows of US$150 million in the first six months) and 9.7% positive investment performance, led to an increase in AuM of 15.6% since June.

Regular net management fee income for the year was lower than the previous year due to the lower average level of assets managed over the year as a whole. During a period of reduced levels of assets under management, we have taken measures to manage costs, which include reducing fixed costs, while continuing to strengthen our investment management capabilities and resources. I am pleased to report that overall the business was profitable during the year.

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. The Directors are of the opinion that the overall level of dividend of the previous year should be maintained. No dividend was declared at the interim and therefore an amount of US$2.8 million (1.0 cents per share) is now being declared. This will utilise US$0.9 million support from reserves.

It has been a challenging year but the final quarter has produced very encouraging signs that real momentum for growth is now gathering. Inflows in the last period have been strong and have continued to be positive so far in 2013; investment performance has been good and we are in the process of finalising the details of new distribution agreements. We are particularly encouraged by the ongoing development of our income and growth strategy which we are confident can quickly provide a greater contribution to our business. This has grown from US$18 million at the start of 2012 to over US$80 million at the date of this report. The Group is focussed on adding new assets supported by strong performance of key strategies. Higher levels of AuM will result in the increasing utilisation of our operational base, which has the capacity to take on much greater volumes of business, and should therefore generate additional value for shareholders.

The Group continues to hold the bulk of its assets in cash or liquid assets and has no borrowings. We are well positioned to take advantage of the recent upturn and grow our business accordingly.

Finally, I wish to thank the staff at Charlemagne Capital for their effort and continued commitment. During this difficult period we have sought to ensure our focus has been on the best use of resources and the refining of our investment management process. The cooperation of all stakeholders has been paramount and we are looking forward to continuing to deliver superior investment solutions to our clients.

Michael Baer

26 March 2013

Financial and Operating Review

Financial Results

Profit, after taxation and minority interests, was US$1.9 million for the year ended 31 December 2012 compared with US$3.3 million in 2011. The results for the year reflect the average level of assets under management throughout the period compared with the previous year, and the changes in the underlying asset mix and related margins. AuM at year end stood at US$ 2.6 billion, 13.1% higher than at the beginning of the period, with the contributions to this increase in AuM of US$304 million being generated equally by the long only and OCCO (long short) parts of the business. The new money raised for OCCO this year was at a higher margin than previous fund raising. Fee income arising from this source is subject to a minority interest therefore is not fully retained within the Group.

Operating profit before tax and non-recurring items was US$5.1 million, down 16.4% on the previous year. Although AuM at year end was higher than at the beginning of the period, the main impact of inflows and positive performance was in the second half, and the last quarter in particular. This was in contrast to the previous year when there was a significant fall in AuM in the second half. Therefore average AuM for the year as a whole was 20% lower compared to the previous year. Revenue from net management fees in the period decreased by 9.3% from the prior year to US$20.5 million (2011: US$22.6 million). The Group's net management fee margin increased to 85 basis points ("bps") by the end of the year (2011: 78 bps) due to the changes in relative weightings in different products, principally a reduction in lower margin institutional funds combined with the increase in the OCCO fund assets.

The overall investment performance of funds managed and advised by the Group was positive in US Dollar terms for three out of the four quarters and for the year as a whole. Crystallised net performance fees of US$9.0 million (2011: US$4.9 million) were earned during the year. The majority of this fee was earned on the Group's OCCO product with some contribution from Specialist funds. The remainder of the performance fee paying funds managed by the Group are below required thresholds and are unlikely to generate performance fees in 2013.

Operating expenses for the year were US$25.6 million (2011: US$21.8 million) with fixed costs showing a reduction of 9%, the increase being due to profit related compensation for the OCCO division and share option costs. This has also impacted the Group's operating profit margin for the year which fell to 16.5% (2011: 21.7%). Exchange rate movements have had minimal effect on costs.

After taxation and other income and expenditure, earnings per share attributable to shareholders were 0.7 US cents per share (2011: 1.2 US cents per share) on a fully diluted basis.

Cash generated by the group during the year was US$1.9 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 support the level of dividend by utilising some of the Group's cash reserves in addition to surplus cash generated in the year.

Net assets attributable to shareholders have increased from US$26.2 million to US$27.8 million before payment of an interim dividend of 1.0 US cents per share which has been declared by Directors and will be paid on 26 April 2013 at a cost of US$2.8 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. 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$304 million for the full year, comprising an increase in market values of US$326 million and net outflows from the Group's products of US$22 million.

Global markets posted positive returns for the year, particularly at the very start and towards the end of the year. Emerging markets ended the year ahead of developed markets and alongside this dedicated emerging market funds reported net inflows of US$49.5 billion. For the year as a whole, the best market performers included Turkey, Thailand and Mexico with three of the larger markets - China, Russia and Brazil - among the laggards. Investors started to believe that the US's fiscal cliff would be avoided and that China's economy was again accelerating. These factors, combined with continued low interest rates around the world, encouraged investors to take more equity risk. This benefited emerging markets after two years of underperformance. This underperformance has been partly due to rising statutory wages in several countries. These have lowered corporate profits, although we consider in the long run that the process of higher wages is part of the refocusing of emerging markets from export dependency to domestic demand.

We seek to invest in quality businesses at reasonable valuations both in larger and smaller companies, including those not in the benchmark. After the headwinds of 2011, this approach paid off in 2012, with investors increasingly differentiating between those companies which produce good returns to shareholders and those that do not, even if some of the latter group might appear superficially cheap. The results were seen in an improved performance for nearly all of our strategies over the year. We have long considered that this approach pays off in the long run and will lead to inflows in the coming year. We also continue to believe that emerging markets will outperform developed markets in the next few years.

Magna UCITS Funds

Overall, 2012 saw net inflows into the magna range. The GEMS Dividend sub fund and the Latin American sub fund attracted net inflows of US$78 million between them for the year on the back of continued strong performance. The GEMS Dividend strategy has seen top quartile performance over the year and since inception. This strategy, which will reach its 3 year track record in June, provides the combination of a high level of income with the opportunity for growth in a low volatility portfolio of quality emerging market companies.

At the end of 2012, there were nine sub-funds within the Magna Umbrella Fund with a total AuM of US$364 million (2011: US$260 million).

OCCO

The OCCO fund has grown from US$444 million at the end of 2011 to US$597 million as at the end of 2012 with net subscriptions of US$113 million during the year. The fund is again closed to new subscriptions for the time being. The fund earned performance fees of US$8.8 million in 2012.

Specialist

This fund area comprises principally a range of Private Equity property funds. 2012 has seen further direct property investments completed in Brazil. Performance fees of US$0.2 million were earned in this category in 2012. It is not possible to predict when conditions may be such that asset sales can be made within the vehicles that would then lead to further such fees becoming payable. At the end of the year, Specialist Mandates had a total AuM of US$0.15 billion (2011: US$0.17 billion).

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 an increase in asset values due to investment performance. At the start of the year the Group saw institutional redemptions, however a new Latin America mandate of US$130 million was awarded in June and there were net inflows of US$75 million into institutional mandates during the fourth quarter, though this was offset somewhat by outflows from white label accounts. No performance fees were generated during the year. At the end of the year, Institutional Mandates had a total AuM of US$1.53 billion (2011: US$1.45 billion).

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Approved by the Board of Directors on 26 March 2013.

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 26 March 2013.

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 2012 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 26 March 2013.

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 2012, and have not been applied in preparing these consolidated financial statements. None of these is 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 2012 or 2011.

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.

Derivative Financial Instruments

The Group uses derivative financial instruments including forward exchange contracts to manage its exposure to foreign exchange, interest rate and equity market risks arising from operational, financing and investment activities and for trading purposes.

Derivative financial instruments are recognised initially at fair value; any attributable transaction costs are recongised in profit or loss as incurred. Subsequent to initial recognition, derivative financial instruments are stated at fair value. The gain or loss on remeasurement to fair value is recognised immediately in profit or loss. However, where derivatives qualify for hedge accounting, recognition of the resultant gain or loss depends on the nature of the item being hedged (see Cash flow hedges below).

Cash flow hedges

Where a derivative is designated as a hedge of the variability in cash flows attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction that could affect profit or loss, the effective portion of changes in the fair value of the derivative are recognised in other comprenhensive income and presented in the hedging reserve directly in equity. The amount recognised in equity is removed and recognised in profit or loss in the same period as the hedged cash flows affect profit or loss under the same profit or loss line item as the hedged item. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in the profit or loss.

If the derivative expires or is sold, terminated, or exercised, or no longer meets the criteria for cash flow hedge accounting, or the designation is revoked, then hedge accounting is discontinued prospectively and the amount recognised in equity until the forecast transaction affects profit or loss. If the forecast transaction is no longer expected to occur, then hedge accounting is discontinued and the balance in equity is recognised immediately in 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 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$0.45 million (2011: US$0.99 million).

The number of employees of the Group as at the end of the year was 61 (2011: 66) 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.

Under UK tax legislation, certain UK income tax and social security obligations can be imposed on the Group in relation to these arrangements. 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 2012 Directors of the Company and their immediate interests controlled 31% (2011: 31%) of the voting shares of the Company. The Directors' Remuneration Report on pages 17 and 18 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 74% (2011: 60%) 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$0.3 million (2011: US$0.8 million).

11. Dividends

A second interim dividend of 0.6 US cents (GB0.3786p) per ordinary share in respect of the year ended 31 December 2011 was paid on 27 April 2012 to those shareholders on the register on 30 March 2012 and was distributed from retained earnings in 2012.

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

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$1.89 million (2011: US$3.33 million) and the weighted average number of shares of 278,110,208 (2011: 277,123,431) 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 the same as the basic earnings per share calculations for the year.

Shares held by Sanne Trust Company Limited (note 22) have been excluded from the earnings per share calculation as such shares are currently accounted for as treasury shares.

13. Property and equipment

There was no property and equipment in the Company.

Assets which were purchased at a historic cost of US$0.7 million and are fully depreciated are still being used by the company.

14. Interests in Subsidiaries

Balances with subsidiaries are included within current assets and current liabilities within the parent company statement of financial position. The Company has agreed to provide ongoing financial support to one of its subsidiaries, Charlemagne Capital (Investments) Limited, in order to allow it to meet its liabilities as they fall due.

Particulars of the principal subsidiaries of the Company at 31 December 2012 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 liability of US$5,059 (2011: unrecognised liability of US$2,412) representing the tax effect of depreciation in excess of capital allowances.

17. Trade and Other Receivables

As at 31 December 2012, there were no margin deposits held by the Group (2011:$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 2012 and 2011, the Company did not repurchase any of its own shares.

As at the date of signing the financial statements there were 280,385,616 (2011: 280,385,616) ordinary shares of US$0.01 each issued and fully paid.

Included within share capital are 1,409,076 (2011: 3,262,185) shares which are held on behalf of a subsidiary of the Company (see note 21). These are accounted for as treasury shares and are included as a debit reserve within equity.

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 premium on shares repurchased during 2009 was transferred to retained earnings.

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:

The options outstanding at 31 December 2012 have an exercise price between GBPNil and GBP0.748 and a weighted average contractual life of 1.3 years. Outstanding share options are contingent upon specified performance and service criteria being satisfied.

During the period 445,971 nil price share awards vested and were exercised.

During the period 820,030 options were cancelled for cash of GBP92,546. In these instances the company had already recognised the full original fair values of these options as an expense in profit or loss. The Company did not recognise any gain in profit or loss where the cash award was less than the fair value of the options.

During the period 20,000 options failed to meet the required service criteria. Amounts of GBP1,285 previously provided for these options were written back to profit or loss.

During the period 66,667 options failed to meet the required performance criteria. Amounts of GBP7,191 previously provided for these options were written back to profit or loss.

As at 31 December 2012 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.

The weighted average fair value of the options issued during the period was GBP0.10 (2011: GBP0.15)

The estimate of the fair value of the share options granted with a grant price of GBPNil 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.

Cash Settled

At 1 January 2012 the trustees of the Charlemagne 2005 Employee Benefit Trust (EBT) held 3,262,185 Company shares with the intention that they would either be sold to satisfy existing cash settled awards as they vested or utilised to settle equity settled options as they vested and were exercised. The Trustee of the EBT may at its discretion allocate the proceeds to discretionary sub-trusts of which certain employees and their families are beneficiaries.

During the year 750,000 shares were sold to satisfy cash settled options and 1,103,109 shares were transferred to employees in respect of share awards that had been exercised. The proceeds from the sale and transfers were less than the original cost of these shares and the difference of US$1.4 million was transferred from retained earnings to treasury shares within reserves. The 1,409,076 remaining shares held by the EBT had a fair value of US$190,335 as at 31 December 2012 (2011: US$541,866), based on the market price as at that date, after adjusting for the waiver of dividend rights at an assumed dividend yield of 5%.

During the year 3,561,926 awards met their service criteria and the associated liabilities were met at fair market value.

The fair value of the future cash settlement is spread over the vesting period, and recognised as an expense in the accounts with a corresponding increase in liabilities. The fair value is re-measured at each reporting date, with any adjustment in the cumulative fair value being recognised in the reporting period.

Expenses in respect of share based incentive plans

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

As at 31 December 2012, total liabilities in respect of cash-settled share-based incentive plans were US$nil (2011: US$437,069). No liabilities had vested by the end of the period. Included in the charge for equity settled incentive plans shown above were amounts totalling US$217,785 (2011: US$42,250) relating to directors.

23. 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.

The Group's periodic use of derivatives is partly for hedging purposes, and partly for speculative investment. Where hedging is involved, the policy is fully or partly to match positions held in other assets. Speculative investment is carefully used, in accordance with parameters set by the Board, in short term situations where physical assets are inappropriate.

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 2012, no margin deposits were held (2011: 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$397,683 (2011: US$558,733) after allowing for a total impairment provision of US$740,097 (2011: US$ 701,216).

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 risk which are held at fair value amount to US$1,939,000. If the value of these investments, as at 31 December 2012, increased by 1% the profit of the Group would be increased by US$19,390. 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 2012, 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$9,930 (2011: US$39,410). 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 at maturity dates and at variable rates. The Group does not have any borrowings. Surplus funds are placed on short term deposit.

Other price risk

Price risk arises from equity securities held by the Group. As at the reporting date these assets amounted to the following:

The majority of the Group's investments are readily realisable into cash. A 3% increase in the reported market price of these assets at the reporting date would lead to a US$58,170 increase in the value of those investments (2011: US$49,200). An equal and opposite decrease in the reported Net Asset Values would have decreased the value of the investments by an equal and opposite amount.

Fair value hierarchy

The table below analyses financial instruments measured at fair value at the end of the reporting period, by the level of the fair value hierachy (see note 2)

24. Operating Leases

At the end of the reporting period, the future minimum lease payments under operating lease commitments during the next twelve months are as follows:

The group leases a number of offices under operating leases. The lease terms vary between 5 years to 15 years. One of the 5 year leases has an option to break after 3 years and the 15 year lease has an option to break after 7th year. During the year an amount of US$643k was recognised as expense in profit or loss in respect of operating leases (2011: US$664k). The rent paid to the landlord is increased to market rent at intervals as stated in lease agreements and the Group does not participate in the residual value of the office as all the risks and rewards of the offices are with the landlords.

25. Amounts due to and from Subsidiaries

The amounts due to and from subsidiaries are unsecured, repayable on demand and bear interest at commercial rates.

The Directors considered the development, selection and disclosure of the Group's critical accounting policies and estimates and the application of these policies and estimates. Estimates and judgements are continually evaluated and are based on historical and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Fair value of financial instruments

The fair value of financial instruments that are not quoted in an active market are determined by the Directors by using valuation techniques.

Where valuation techniques are used to determine fair values, they are validated and periodically reviewed by qualified personnel independent of the area that created them. To the extent practical, models use only observable data. However areas such as credit risk, volatilities and correlations require the Directors to make estimates. Changes to the assumptions about these factors could affect reported fair values of financial instruments.

27. Contingent Liabilities

The Group has no significant contingent liabilities.