HICL Infrastructure Company Ld Annual Results for the year ended 31 March 2017 (0326G)

TIDMHICL

RNS Number : 0326G

HICL Infrastructure Company Ld

24 May 2017

HICL Infrastructure Company Limited

24 May 2017

ANNUAL RESULTS FOR THE YEARED 31 MARCH 2017

The Directors of HICL Infrastructure Company Limited announce the results for the year ended 31 March 2017.

Highlights

For the year ended 31 March 2017

   --    Portfolio performance exceeded expectations during the year 
   --    NAV per share as at 31 March 2017 of 149.0p, up 4.8% from 142.2p as at 31 March 2016 

-- Total shareholder return of 10.3% over the year (on a NAV per share appreciation plus dividends paid basis)

   --    Aggregate dividends declared for the year of 7.65p per share 

-- Target dividend per share of 7.85p for the year to March 2018 - a year-on-year increase of 2.6%

-- Further guidance on a target dividend per share of 8.05p for the year to March 2019, reflecting Board's confidence in near-term forecast cash flow performance

   --    Profit before tax of GBP176.8m (2016: GBP157.2m) 

-- Directors' valuation of the portfolio of GBP2,380.0m, up 17% from GBP2,030.3m at 31 March 2016

-- New investments for an aggregate consideration of GBP266.6m, comprising ten new acquisitions and five incremental investments

-- Successful capital raisings of GBP381.0m in aggregate and an increased Revolving Credit Facility of GBP400m

-- Post period-end, the Company has also acquired a significant interest in Affinity Water, a water-only company

-- Improved inflation correlation in the portfolio: 0.7 at year-end (rising to 0.8 following the Affinity Water acquisition)

   --    Current funding requirement of GBP205m1 
   --    The Board is confident that the current pipeline will generate new investment opportunities 

(1) Following the acquisition of an interest in Affinity Water and taking into account the planned sell-down of GBP25m announced on 22 May 2017

Summary Financial Results

(on an Investment Basis)

 
 for the year to                  31 March     31 March 
                                      2017         2016 
 
 Income                          GBP207.6m    GBP182.9m   + 13.5% 
 Profit before tax               GBP177.1m    GBP157.4m   + 12.5% 
 Earnings per share                  12.4p        11.9p    + 4.2% 
 Total dividends declared 
  per share for the year             7.65p        7.45p    + 2.7% 
 
             Net Asset Values     31 March     31 March 
                                      2017         2016 
 Net Asset Value (NAV) 
  per share                         149.0p       142.2p 
 Fourth quarterly interim 
  dividend declared                  1.92p        1.87p 
 
 NAV per share after 
  deducting fourth quarterly 
  interim dividend                  147.1p       140.3p 
 
 

Ian Russell, Chairman of the Board, said:

"We are pleased to report that HICL has delivered another good set of results this year, underpinned by a portfolio performance that has exceeded expectations. The Company delivered a total shareholder return of 10.3% in the year. The Board is reaffirming the dividend targets for both the year to 31 March 2018 and to 31 March 2019 at 7.85p and 8.05p per share respectively, reflecting the Board's confidence in the future performance of the Group's portfolio.

"HICL's investment proposition to deliver sustainable, long-term income to shareholders, while preserving the capital value of its portfolio, continues to resonate well with investors, particularly in a continued low interest rate environment. This was most evident in the context of the Company's recent GBP260m equity issue, which was more than three times oversubscribed.

"We remain disciplined in our approach and are committed to ensuring that new investments enhance the existing portfolio. During the year we invested GBP266.6m in 10 new and five incremental investments, which increased both the scale and the diversity of the Company's portfolio. We are well placed to take advantage of new investment opportunities in our pipeline and, since the year-end, have secured an interest in Affinity Water which brings new benefits to the portfolio, including enhanced inflation correlation, which has increased from 0.6 at 31 March 2016 to 0.8 currently.

"Today marks the culmination of a two-year succession plan at our Investment Adviser, with Harry Seekings assuming leadership of the InfraRed team responsible for the Company. The Board wishes to thank Tony Roper for his leadership and vision which, together with the excellent team at InfraRed, have driven the Company's successful track record."

Tony Roper, Director, InfraRed Capital Partners Limited, the Investment Adviser added:

"The current Portfolio continues to perform well for both the Company's clients and shareholders, in part due to the value preservation and enhancement initiatives of our asset management team. We remain confident of our ability to deliver outperformance in the medium term, particularly by taking a strategic approach to realising economies of scale across the portfolio.

"Our broad range of industry relationships has enabled us to source a number of new investments at attractive prices during the year, such that only two of the 15 new investments were sourced via full market auctions.

"Although demand for operational infrastructure assets remains high, we remain disciplined in our approach to sourcing new investments. The pipeline for further investments is healthy and diversified across the Company's target market segments and geographies."

This announcement contains Inside Information.

Contacts for the Investment Adviser on behalf of the Board:

InfraRed Capital Partners Limited: [phone]

Tony Roper

Keith Pickard

Harry Seekings

   Contacts for Tulchan Communications:                                       [phone] 

David Allchurch

Latika Shah

   Contacts for Canaccord Genuity Limited:                                     [phone] 

Dominic Waters

Neil Brierley

Will Barnett

David Yovichic

Copies of this announcement can be found on the Company's website, www.hicl.com. The Annual Report and Consolidated Financial Statements for the year ended 31 March 2017 will be published in late May and an electronic version will be available from the Company's website at that time.

Chairman's Statement

"HICL has delivered another good set of results, underpinned by portfolio performance that exceeded expectations."

I am pleased to present the Annual Report for HICL Infrastructure Company Limited. The Company has delivered another good set of results, underpinned by portfolio performance that exceeded expectations.

During the financial year the Company successfully raised GBP381.0m of new equity capital and completed fifteen investments for a combined value on an Investment Basis of GBP266.6m. In addition, since year-end we have completed the GBP269m acquisition of a substantial interest in Affinity Water. These investments demonstrate the excellent progress made in delivering the Company's Acquisition Strategy. The new investments are consistent with the Company's objective of delivering income to shareholders from a portfolio that is positioned at the lower end of the risk spectrum.

Dividends for the year amounted to 7.65p, an increase of 2.7% on the prior year, and a yield on the share price at 31 March 2017 of 4.5%. With our focus on delivering dividend income to shareholders, we believe the investment proposition has remained attractive in a climate of persistently low interest rates. Furthermore, with the prospect of higher inflation in the UK, the inflation-correlated returns generated over the long term by the Group's portfolio have come more into focus.

Both the Board and the Investment Adviser believe the Company is in a good position to make further, suitable investments, based on the current pipeline of prospective investments and the Investment Adviser's origination skills and investment network.

Financial Results

The Investment Adviser prepared a fair market valuation of the portfolio at 31 March 2017. As in prior years, this is based on a discounted cash flow analysis and it uses key assumptions recommended by the Investment Adviser based on its experience and having taken into account market intelligence gained from bidding activities. The Directors have satisfied themselves with the methodology and assumptions used and as usual have taken independent third party advice on the valuation. The Directors have approved the portfolio valuation of GBP2,380.0m on an Investment Basis at 31 March 2017 (GBP2,030.3m at 31 March 2016). A reconciliation between the IFRS basis and Investment Basis financial statements can be found in the Pro Forma Statements in Operational and Financial Review.

The Net Asset Value ("NAV") per share was 149.0p at 31 March 2017, an increase of 6.8p on the 142.2p at 31 March 2016. This increase was supported by portfolio performance that exceeded expectations, downward pressure on discount rates, contributions from new acquisitions and share issuance at a premium to NAV. After deducting the fourth quarterly interim dividend of 1.92p to be paid on 30 June 2017, the NAV per share at 31 March 2017 was 147.1p.

From IPO in March 2006 to 31 March 2017, the Company has delivered a total shareholder return of 9.6% p.a. based on dividends paid and the growth in NAV per share. This compares favourably to Company's long-term target of 7-8% per annum. Further guidance was given in the Company's recent prospectus, being a target long-term return of 5.6% p.a. based on an issue price of 159p per share.

Cash received from the portfolio by way of distributions was ahead of expectations. After operating and finance costs on an Investment Basis, a net cash flow of GBP122.8m (2016: GBP107.3m) covered the cash dividend 1.22 times (2016: 1.15 times).

On an IFRS basis at 31 March 2017 investments at fair value were GBP2,419.4m (2016: GBP1,973.7m).

The Portfolio

During the year the Company completed 10 new investments and made five incremental investments in existing projects. As at 31 March 2017, the portfolio consisted of 114 investments (2016: 104).

The Investment Adviser's Asset Management and Portfolio Management teams actively seek strong day-to-day relationships with key stakeholders and work to find efficiencies and savings across the portfolio over the longer term. This active engagement has contributed to a good performance during the year with cash flow from the portfolio being ahead of our projections.

The Company's acquisition strategy is focused on three principal market segments: PPP projects, regulated assets (e.g. gas and electricity transmission projects; water utilities) and demand-based assets (e.g. toll road concessions and student accommodation). The Investment Adviser maintains a disciplined approach to assessing potential investment opportunities based targeting those that are accretive to the existing portfolio.

The correlation of the portfolio's long-term returns to inflation improved during the year, being 0.7 at 31 March 2017 (2016: 0.6), and the portfolio's weighted-average asset life increased to 24.4 years (2016: 21.5 years). This improvement to the portfolio was largely the result of the investment made by the Group in the Northwest Parkway (Colorado, USA), a long-concession toll road with an operational track record of more than a decade.

The Company's Investment Policy permits up to 35% of the portfolio to be invested in demand-based assets, assets under construction and/or other funds. However, it is the current intention of the Board and the Investment Adviser that no more than 20% of the portfolio by value will be invested in demand-based assets with returns that are correlated to the economic cycle.

Capital Raising

During the period the Company raised equity capital of GBP381.0m, including scrip dividends. In September 2016, GBP113.4m was raised through a tap issue. In March 2017, the Company raised GBP260m through the issue of new shares via a Placing, Open Offer, Offer for Subscription and Intermediaries Offer. The latest issue was more than three times oversubscribed.

The Board is grateful for the support from the Company's shareholders, both existing and new. The success of the capital raisings reflects the attraction and popularity of infrastructure as an asset class and also the Company's track record, portfolio and business model. The Placing, Open Offer, Offer for Subscription and Intermediaries Offer represented the Company's first prospectus fundraising since 2013, enabling both existing and new retail shareholders to subscribe for new shares at a slight discount to the prevailing market share price.

The Company is in advanced discussions to partially sell down up to GBP25m of its investment in Affinity Water. This is part of a strategy to build relationships with aligned co-investors in order to enable the Group to manage its portfolio exposure to larger investment opportunities. Once this has been completed, the Company will have a net funding requirement of approximately GBP205m.

The Company increased the capacity of its revolving credit facility from GBP200m to GBP300m in December 2016 and to GBP400m in April 2017. The facility maintains the Company's flexibility to acquire further investments prior to raising fresh equity. This reduces the impact of cash drag on the investment returns which can result from holding uninvested cash on the balance sheet.

Distributions

Since IPO in 2006, the Company has met or exceeded all of its dividend guidance targets and this set of results marks the Company's tenth successive year of dividend growth.

On 18 May 2017 the Board declared a fourth quarterly interim dividend for the year to 31 March 2017 of 1.92p per share which will be paid on 30 June 2017. This results in an aggregate dividend for the year of 7.65p per share, an increase of 2.7% over the prior year. A scrip dividend alternative is available.

The Board's confidence in the near-term forecast cash flow performance of the Group's portfolio underpins the dividend targets of 7.85p per share for the year ended 31 March 2018 and 8.05p per share for the year ended 31 March 2019 (increases of 2.6% and 2.5% respectively). The Board intends to continue paying quarterly dividends, with a scrip dividend alternative.

Risks and Uncertainties

The risks to which the Company is exposed and the strategies employed to mitigate them have not changed materially since 31 March 2016. They are set out in detail in the February 2017 Prospectus, which is available on the Company's website.

2016 was marked by political uncertainty and this theme has continued into 2017, most recently with the decision to call a general election in the UK. The long-term impact of the UK's EU Referendum is still uncertain. Sterling experienced a significant devaluation in the aftermath of the referendum and, as in previous years, the Company's hedging policy has successfully mitigated the impact of foreign exchange movements on NAV. Another consequence of sterling's relative weakness during the year has been to increase inflationary pressures in the UK, although this may not be sustained over the longer term.

With a large portfolio, investments with operational challenges are to be expected. Overall, the Group's portfolio continues to experience good operational performance. Progress has been made with public sector clients where there had previously been disagreements over operational issues with a series of settlement agreements being concluded. Nonetheless, it is essential that the Group maintains an active approach by continuing to manage stakeholder relationships and monitoring and resolving operational difficulties.

The Board also recognises the importance of identifying and actively monitoring the financial and non-financial risks facing the Company. Following an external review in 2015, an enhanced risk management and reporting framework for the Company was developed with the Investment Adviser. This was reviewed and subsequently adopted by the Directors during 2016. A risk dashboard summarises how risks have evolved, the controls and mitigants and also uses stress and scenario analysis to quantify the potential cash flow and valuation impact of key risks.

Corporate Governance and Regulation

Simon Holden and Kenneth Reid joined the Board of Directors in the year, bringing with them highly relevant financial expertise and commercial knowledge.

On 31 March 2017, Sarah Evans retired from the Board. Sarah joined the Board in 2008 and was chair of the Audit Committee. I would like to thank Sarah for the major contribution that she has made to HICL and her exemplary dedication and professionalism. With effect from 1 April 2017, Susie Farnon became chair of the Audit Committee and Simon Holden assumed the role of chair of the Risk Committee.

As in previous years and in line with good corporate governance, the Directors offered themselves for re-election at the Annual General Meeting ("AGM") held in July 2016 and were duly re-elected. They will be offering themselves for re-election again at the forthcoming AGM on 17 July 2017.

Investment Adviser

At InfraRed, Tony Roper, who has led the Investment Adviser's fund management activity in relation to HICL since 2006, is handing over the day-to-day responsibility for leading the Investment Adviser's team to Harry Seekings, who joined InfraRed in 1998. This is part of a two-year, well-coordinated succession plan that was agreed with the Board. Tony continues as a member of the InfraRed HICL Investment Committee and remains available to both the InfraRed team and the Board for support and advice as needed.

Market Developments and Outlook

Following the UK's Autumn Statement, expectations were raised for the announcement of a new pipeline of PPP projects in 2017. The Board remains optimistic that the Government will bring forward new projects after the current election has concluded. However, HICL's readiness to invest in UK infrastructure opportunities is not limited to PPP projects, as evidenced by the Company's recent acquisition of Affinity Water and participation in the OFTO programme, as well as bids for a number of student accommodation projects. The Investment Adviser actively continues to seek opportunities in the other target geographies identified in the Company's Acquisition Strategy.

Competition across the infrastructure asset class remains intense. The year has seen continued muted activity in PPP secondary markets. Nonetheless, the Investment Adviser has continued to source appropriate opportunities, principally from long-standing relationships. The recent Affinity Water acquisition demonstrated the value of relationships, as the Company partnered with like-minded investors to secure the investment, without the need to participate in an auction process.

The Board remains confident in the Company's future prospects. The Investment Adviser continues to manage the existing portfolio to preserve value and to generate outperformance where possible. Looking ahead, the Board is confident that the current pipeline will generate new investment opportunities that secure the delivery of income to shareholders for the long term.

Ian

Russell

Chairman

23 May 2017

The Infrastructure Market

The Infrastructure market can be segmented by revenue type. Within each market segment, there are assets with differing risk profiles.

The infrastructure asset class covers a variety of sectors and risk profiles. HICL has segmented the market using revenue risk categories. The reason for this approach to segmentation is that in general terms infrastructure investments are perceived to offer long-term, stable and predictable cash flows and revenue is the fundamental building block of cash flow.

The spectrum of risk associated with infrastructure assets varies within each market segment and not all market segments offer the lowest categories of risk. For example, PPP projects can offer some of the lowest risk investment opportunities in the infrastructure market due to the contractual nature of revenues and limited residual risks borne by equity investors. However, if a PPP project is under construction or has not been structured to fully pass down key delivery risks to subcontractors, its risk profile can be incrementally higher when compared to a well-structured, operational PPP project. More information will be available in the Company's Annual Report.

HICL targets selective opportunities within each market segment, with a core focus on PPP projects, regulated assets and demand-based assets. The Company's positioning within the infrastructure market is discussed in more detail in Strategy & Objectives.

Investment Proposition

To deliver to shareholders a long-term, stable income from a portfolio of infrastructure investments positioned at the lower end of the risk spectrum.

Strategy & Objectives

This section summarises the Company's strategy for the key activities covered by the business model. It also sets out objectives against which the Directors measure the Company's delivery of its investment proposition to shareholders, both during the financial year and over the long term.

Strategy

The Company's investments are almost exclusively made as risk capital (e.g. equity) in unlisted companies that operate within highly-structured business environments, e.g. complex contractual frameworks or regulated markets. In this context, specialist skills are a necessary prerequisite for originating and managing infrastructure investments.

Since its IPO in 2006, the Company has delegated to the Investment Adviser, InfraRed Capital Partners ('InfraRed'), the bulk of the day-to-day activities required to deliver HICL's business model.

Value Preservation and Value Enhancement

InfraRed's Asset Management and Portfolio Management teams work closely together, and in partnership with the management teams in the Group's portfolio companies, to preserve the value of the Group's investments: ensuring portfolio companies perform in line with the relevant contractual and/or regulatory framework; and delivering the forecast base case investment return.

A second area of focus for the Asset Management and Portfolio Management teams is to seek opportunities to deliver outperformance from the portfolio. This upside is often shared, with benefit accruing to the Company's shareholders and to public sector clients or, as part of regulatory price reviews, the customers of regulated assets.

More information is available in the Company's Annual Report.

Accretive Investment

The Company has a clearly defined Investment Policy, which can be found on the Company's website. This sets the over-arching framework within which the Company aims to build a portfolio that delivers the Investment Proposition and is consistent with the Company's overall risk appetite.

Working within delegated parameters approved by the HICL Board, InfraRed is responsible for the selection and pricing of new investments. The Acquisition Strategy is periodically reviewed by the Board and agreed with InfraRed, most recently in October 2016.

InfraRed's Origination and Transaction Team sources opportunities that are within the scope of the Acquisition Strategy by focusing on specific strategies and applying a consistent evaluation framework. More information is available in the Company's Annual Report.

InfraRed uses a variety of channels to source investments for the Group. These include:

-- soliciting off-market transactions through relationships within InfraRed's extensive network of investment partners and advisors;

   --      acquiring further equity interests from co-shareholders of existing portfolio companies; 

-- participating selectively in primary investment activity, as part of procurement processes sponsored by the public sector; and

   --      participating in competitive auctions of investments in the secondary market. 

Performance-based Objectives

Dividends

The Company's principal financial return objective is to offer long-term, sustainable income for shareholders. This is delivered through the Company's dividend target - an annual distribution of at least that paid during the prior financial year - with the prospect of increasing the figure, provided it is sustainable with regard to the portfolio's forecast operational performance and the prevailing macro-economic outlook. Interim dividends are paid quarterly.

Total Return

The Company's secondary financial return objective is to preserve the capital value of its investment portfolio and deliver an element of capital growth, as reflected in its longer-term IRR return target of 7-8%, set at IPO. This target has been achieved to date and the Directors believe that it remains achievable looking forward.

Cash Cover

An ability to pay cash-covered dividends is a key measure of the Group's operating cash flow performance. The Company targets a cash-covered dividend and performs stress test analysis to assess the robustness of cash coverage in the future.

Inflation Correlation

The Board considers inflation correlation to be one of the key attributes of infrastructure investment. The Company therefore seeks to provide shareholders who hold their investment for the long term with a total return that has good positive correlation with inflation.

Ongoing Charges

The Board is committed to offering shareholders a competitive investment proposition through management of efficient gross (portfolio level) to net (investor level) returns. This is achieved through attractive ongoing charges relative to the Company's peer group, with the intention to reduce such charges where possible.

Quality-based Objectives

The Company measures performance against other, important objectives to protect shareholders' interests, including to:

-- maintain a diversified portfolio of investments (e.g. by reference to single asset and/or counterparty concentration) and thereby mitigate concentration risk;

-- make accretive investments in line with the risk--appetite of the Company and consistent with its Investment Policy;

-- target long-term, predictable cash flow receipts from the portfolio by seeking where possible assets that maintain or extend the weighted average unexpired portfolio concession life;

-- maintain effective treasury management processes, notably with respect to foreign exchange risk and efficient cash management; and

   --      manage the Group's exposure to refinancing risk. 

Treasury Group Cash Management and Financing

The Board's policy is that the Company should not hold material amounts of un-invested cash beyond what is necessary to meet outstanding equity commitments for existing investments or to fund potential acquisitions in the near term. New investments are typically funded initially by the Group's revolving credit facility. The Board will consider the appropriate timing and price for the issuance of new shares to repay the debt, in consultation with the Company's broker.

The Group's multi-currency revolving credit facility was enlarged during the year from GBP200m to GBP300m - and to GBP400m in April 2017. ING was added to the existing banking group of HSBC, Lloyds Bank, National Australia Bank, Sumitomo Mitsui Banking Corporation and The Royal Bank of Scotland. The facility carries a margin of 1.70% and the term runs until May 2019. It is available to be drawn in cash and letters of credit for future investment obligations.

Treasury Group Foreign Exchange Hedging

The Board's hedging policy is designed to provide confidence in the near-term yield and to limit NAV per share sensitivity to no more than 1% for a 10% foreign exchange movement. This policy is being reviewed by the Board and the Investment Adviser.

Foreign exchange risk from non-sterling assets is managed by hedging investment income from overseas assets through the forward sale of the respective foreign currency (for up to 24 months) combined with balance sheet hedging through the forward sale of non-sterling currencies and by debt drawings under the Group's credit facility.

Volatility

The Board's view is that one of the attributes of investments in infrastructure assets (such as those that form part of the Company's Acquisition Strategy) is that valuations and returns typically demonstrate low correlation to movements in the wider equities markets. In line with this theme, the Company's share price has historically exhibited low correlation to the FTSE All-share Index of the largest equities (by market capitalisation) listed on the London Stock Exchange.

The Directors wish to preserve this low correlation to the extent it is possible.

Case Study: A Decade of Outperformance

Over the 10 years following its IPO in 2006, HICL delivered returns to shareholders of 9.6% per annum, exceeding the target set at IPO of 7-8%.

The ten-year return comprises a combination of NAV growth and dividends of 109.6p per share in aggregate, 44.2p higher than the earnings that could have been forecast from the portfolio managed at IPO without any subsequent acquisition activity. All data expressed in pence (p) is on a pence per share basis, assuming the share was acquired at the time of the IPO.

The Investment Adviser has considered the composition of this growth and determined that of the 44.2p, around 30p is contributed by portfolio outperformance while 14.2p is attributable to changes in economic assumptions.

The table below shows an analysis over the ten-year period taking the NAV at IPO of 98.4p to the NAV (post interim dividend) at March 2016 of 140.3p, taking into account 67.7p of dividends paid or declared.

Portfolio Outperformance

The 30p NAV outperformance has arisen from a variety of initiatives and milestones, the attribution of which has been estimated into 9 different categories, none of which is significantly larger than the others.

The Investment Adviser's Portfolio and Asset Management teams have delivered a substantial increase in NAV growth over the ten years. This has been achieved by identifying and implementing value enhancement opportunities through multiple initiatives, both at asset level and across the portfolio, creating a number of incremental improvements.

Within the portfolio companies, the Investment Adviser's proactive management of project costs has generated savings across the portfolio. For example, InfraRed created an insurance portfolio which has seen a reduction in insurance costs since it was launched in 2007. Successful asset management of construction projects has created value by successfully achieving construction completions to time and budget, leading to steady state operations, and enabling reduced discount rates reflecting the lower risk operational phase.

At the Group level, increased scale through accretive acquisitions has driven a reduction of the ongoing charges ratio, supported by the tapered management fee. Equity issuance, to enable growth through acquisitions, has been at a premium to the prevailing NAV per share which has added further value.

In summary, analysing historic performance shows the benefit of accretive acquisitions combined with proactive portfolio and asset management from InfraRed where many small incremental initiatives contribute to significant outperformance.

The Investment Adviser is confident that there will be future opportunities to outperform current forecasts. However, the scale of outperformance in the current portfolio may be less than delivered historically given the optimisation achieved to date.

Economic Assumptions

Changes in economic assumptions have clearly benefitted HICL over the 10 years with the largest benefit at 10.9p per share coming from reducing corporation tax rates, mainly in the UK which was 30% at IPO and at March 2016 was forecast to fall to 17% in 2020.

There has been a reduction in deposit interest rates since 2006. At IPO the UK assumption was 4% compared with the March 2016 assumption of 1% to March 2020 rising to 2.5% thereafter. This has reduced NAV by 8.4p per share which has largely been offset by the drop in discount rate that has contributed 8.3p of the total movement. The average discount rate at IPO was 8% rising to 8.7% in March 2010 before reducing over time to the average discount rate of 7.5% at March 2016.

Actual UK inflation over the 10 year period has averaged 2.84%, slightly up from valuation assumption applied since 2008 of 2.75% which is estimated to have increased NAV by 1.9p per share.

 
                              Pence per share 
--------------------------  ------------------ 
 NAV IPO                               98.4p 
--------------------------  --------  -------- 
 Forecast EPS                          65.3p 
--------------------------  --------  -------- 
 Portfolio outperformance              30.0p 
--------------------------  --------  -------- 
 Tax rates                   10.9p 
--------------------------  --------  -------- 
 Change in discount 
  rate                       8.3p 
--------------------------  --------  -------- 
 Inflation assumptions       1.9p 
--------------------------  --------  -------- 
 Forex movement              1.5p 
--------------------------  --------  -------- 
 Deposit interest 
  rates                      (8.4p) 
--------------------------  --------  -------- 
 Sub-total economic 
  assumptions                          14.2p 
--------------------------  --------  -------- 
 Dividends paid/declared               (67.7p) 
--------------------------  --------  -------- 
 NAV March 2016 
  (post dividend)                      140.3p 
--------------------------  --------  -------- 
 

Investment Adviser's Report

The year ended 31 March 2017 saw the Group's portfolio deliver performance that exceeded expectations and the addition of new investments that were accretive, as well as increasing scale and diversity. Supporting this performance was an active year with a number of new initiatives pursued by our infrastructure team at InfraRed to increase efficiency, improve portfolio management and generate further value for the Company's shareholders.

The success of the Company is enhanced by our ability to deliver enhancements to portfolio value and cash flows. NAV per share, excluding dividends paid, increased by 6.8p, from 142.2p as at 31 March 2016 to 149.0p as at 31 March 2017. Of this growth, 1.6p per share was delivered through portfolio outperformance, continuing a successful trend over the last 10 years which is explored in more detail in Case Study - A Decade of Outperformance.

Financial Highlights

The Company achieved a profit before tax of GBP176.8m for the year ended 31 March 2017 (March 2016: GBP157.2m). The increase on the prior year's result was predominantly due to growth in the size of the portfolio, which was driven by acquisitions.

Cash received from the portfolio of investments on an Investment Basis was ahead of expectations at GBP148.9m (2016: GBP130.8m). After operating and finance costs, net operating cash flow on an Investment Basis of GBP122.8m covered the cash dividends paid 1.22 times.

The Company's ongoing charges for the year were 1.06% (2016: 1.12%), using the Association of Investment Companies' methodology. This compares well with other investment companies in the sector. Total management fees accruing to the Investment Adviser amounted to GBP24.4m for the year (2016: GBP20.4m), increasing in line with portfolio value. These fees include the tapered management fee (1.1% for assets up to GBP750m, 1.0% for assets above GBP750m, 0.9% for assets above GBP1.5bn and 0.8% for assets above GBP2.25bn).

The Company's total shareholder return ('TSR'), based on growth in NAV per share plus dividends paid, was 10.3% for the year (2016: 9.6%). The annualised TSR since the Company's IPO was 9.6% at 31 March 2017, which compares favourably to the 6.2% total return delivered by the FTSE All-Share Index over the same period.

Dividends declared in relation to the financial year were 7.65p per share in total, a 2.7% increase on the previous financial year. This represented the Company's tenth successive year of dividend growth since IPO.

Value Preservation and Value Enhancement

The portfolio's operational performance was in large part driven by the active management undertaken by our Asset and Portfolio Management teams. With a portfolio the size of the Group's, operational challenges are inevitable. However, during the year there were no assets where issues impacted the Company's NAV per share by more than 1%.

Our Asset Management team works hard to maintain relationships with key stakeholders, creating a platform to reduce the risk of commercial problems escalating. Occasionally issues arise that are complex and sometimes intractable. In this situation the team's focus is on bringing parties together to reach a mutually acceptable resolution. However, reaching an agreement is not always possible and formal legal proceedings, although a last resort, are sometimes necessary. In every scenario, our Asset Management team's approach is proactive.

The Asset Management team also works closely with our Portfolio Management team to seek value enhancements across the portfolio, often through cost saving initiatives. A number of variations to PPP contracts were signed during the year, covering over GBP700m of new construction work for public sector clients. The management service agreements for a group of projects were re-tendered during the year as part of a cross-portfolio procurement initiative, the goal being to ensure each project company benefits from high quality management services at a price that provides value to the Group.

More detail on Value Enhancement and Value Preservation can be found in Operational and Financial Review.

Accretive Investment

As Investment Adviser, we have agreed with the Board a clear Acquisition Strategy for the Company, focused on three target market segments: PPP projects, demand-based assets and regulated assets. More detail can be found in Strategy & Objectives.

As in previous years the Acquisition Strategy was reviewed at a dedicated, two-day Board meeting in October 2016. Our team presented portfolio development scenario analysis and stress-tests, helping the Board to assess the alignment of the Acquisition Strategy with the Company's objective of delivering long-term, stable income to shareholders.

Although the Acquisition Strategy provides a framework for new investment, implementation depends on the ability of our Origination and Transaction team to source opportunities that are accretive to the existing portfolio. The year saw material progress in this regard with 15 investments made in PPP projects and operational demand-based assets that are positioned at the lower end of the risk spectrum.

Since 31 March 2017, the Company has also announced the acquisition of a significant equity interest in Affinity Water, its first investment in a UK regulated asset. As in previous years, our Origination and Transaction team's relationships were an important source of off-market opportunities - indeed only two of the Group's acquisitions during the year came as the result of a full market auction.

Two new investments were made during the year in operational demand-based assets: the Northwest Parkway toll road in the USA and the M1-A1 Link shadow toll road in the UK. In addition, completion was reached on the purchase of an interest in the A63 Motorway in France (announced in the year to 31 March 2016). These three road projects, in combination with the University of Sheffield Student Accommodation project, mean that demand-based assets represented 12% of the portfolio at 31 March 2017 (2016: 5%).

Long concessions and inflation-linked revenues are attractive features of toll roads. For example, the portfolio's weighted-average asset life increased to 24.4 years as at 31 March 2017 (2016: 21.5 years) largely due to the impact of the Northwest Parkway acquisition. However, toll road projects also have a degree of exposure to wider economic activity and hence have returns that are influenced by changes in Gross Domestic Product ("GDP"). The Board and the Investment Adviser do not wish to fundamentally change the uncorrelated nature of returns from the Group's portfolio and the current intention is that no more than 20% of the portfolio by value will be invested in demand-based assets with returns that are correlated to the economic cycle.

More detail on individual acquisitions can be found in Operational & Financial Review. Sensitivities on GDP exposure can be found in Valuation of the Portfolio.

Capital Raising/Investor Relations

Our Management team met a large number of shareholders during the year, both in the context of the routine reporting cycle but also in conjunction with the Placing, Open Offer, Offer for Subscription and Intermediaries Offer that took place in March 2017. Retail investors have been an important component of the Company's shareholder register since IPO and this capital raising represented an opportunity for individuals to subscribe for new equity alongside institutional investors.

Feedback from all shareholders is valued by the Board and by us. There was a notable change in sentiment following the 2016 EU Referendum, with investors particularly focused on how the return of inflationary pressures might impact the portfolio. The correlation of returns from the portfolio to inflation is strong, increasing to 0.7 as at 31 March 2017 (2016: 0.6). This improvement was down to a number of acquisitions during the year, in particular the Northwest Parkway and the A13 index-linked senior bonds.

In addition to the standard sensitivity showing the impact of inflation scenarios of NAV per share, a cash flow sensitivity has been provided in Valuation of the Portfolio.

Risk and Risk Management

Considerable focus during the year was given to evolving the Company's risk evaluation and reporting systems. Our Management team has developed bespoke tools to support the work of the Company's Risk Committee. These have been subject to in-depth review and refinement in conjunction with the Directors.

One notable benefit of this initiative was to allocate existing scenario modelling to different classes of risk. This has the effect of facilitating a) systematic quantification of the inherent risks faced by the Company and b) evaluation of the effectiveness of available mitigation.

During the year we worked with the Board to review the Company's hedging policy. In particular, as the number of overseas assets is expected to increase over the medium term, attention is being given to the cost and benefit of the current hedging policy. Although the current policy is effective, consideration is being given to whether it can be adjusted while retaining the key objective of materially mitigating the impact of foreign exchange movements.

Infrastructure Market Developments

United Kingdom

PPP procurement has been limited in recent years but, following indications in the Autumn Statement of a new procurement programme, there may be more UK PPP opportunities announced, once the general election in June is over. In the near term, most UK PPP opportunities are likely to be in the secondary market.

The financial year saw significant activity in the regulated asset market segment. This is expected to continue, both with transactions involving assets subject to price controls and also other models such as certain transportation assets and the OFTO programme.

Demand-based assets in the UK include a small number of PPP assets which have usage risk in their revenues, such as shadow toll roads, and an increasing number of university-sponsored student accommodation projects. The Group will continue to pursue on-campus projects in partnership with key contractor relationships.

Europe

Procurement of new PPP projects has continued, albeit in a limited number of countries (e.g. the Netherlands, Germany, Ireland and Norway) and involving a relatively small number of projects. We expect the current rate of activity to continue in the current financial year, with slightly more deal flow anticipated in the secondary market for PPP projects.

We believe there will be further opportunities to invest in regulated assets in Europe. There was notable deal activity over the last year and this is expected to continue. Sectors of interest include gas and electricity transmission and distribution, district heating and water utilities.

Demand-based assets are mostly in the toll road sector, which we monitor in case suitable opportunities arise. Other sectors, such as car parking, have been reviewed but not all are considered appropriate investments for the Group.

North America

The new US President's clear statements of support for the role of private capital in the US infrastructure market are encouraging. However, our experience since opening an InfraRed New York office in 2008 is that the translation of political will in Washington into PPP procurement activity across the country takes time. Momentum is steady rather than spectacular and the challenge for the Federal Government remains how best to encourage and incentivise new forms of infrastructure procurement - responsibility for which is typically implemented at state or agency level.

The Company will continue to participate in greenfield US PPP and will consider opportunities in demand-based assets (principally operational toll roads) to build on the success of the Northwest Parkway toll road investment.

The 2016 Canadian federal budget promised to double infrastructure spending over 10 years, with CAD60bn in new funds available to build transport and energy systems meant to grow the economy over the long term. The first CAD11.9bn is expected to be allocated in the next two-to-five years. As one of the most sophisticated infrastructure markets globally, Canada is a popular destination for private investment. We will continue to seek opportunities but the need for pricing discipline in the face of domestic competition is expected to continue to limit the opportunity for the Company.

Australia & New Zealand

Our Origination and Transaction team is looking for appropriate opportunities in both the Australian and New Zealand primary and secondary markets, while noting the competition from domestic investors is fierce. Australia has a long history of PPP procurement and there are some signs that the rate of primary investment is picking up. In addition we continue to seek opportunities to develop student accommodation projects which may give rise to opportunities for the Group to invest.

Competition

The tight supply-demand dynamics of the infrastructure asset class represent an ongoing challenge to source new investments at suitable valuations. However, our team's reach across geographies and sectors, through our network of offices, will lead to further investment opportunities.

In the current market conditions, where auction processes continue to attract significant demand, relationships remain key to successful origination through bilateral negotiations. We have a proven track record in this regard and continue to seek off-market opportunities wherever possible.

The InfraRed Team

Tony Roper is handing over day-to-day responsibility for leading InfraRed's activities as Investment Adviser to Harry Seekings. Tony has held the role since the Company's IPO in 2006, when the portfolio was seeded with 15 investments from an infrastructure fund managed by InfraRed. Harry has worked at InfraRed since 1998 and has recently focused on HICL's strategy and origination. The change has been planned over two years, in close co-ordination with the Board. Tony retains his role on the InfraRed HICL Investment Committee and remains available to provide support and advice to both the InfraRed team and the Board as needed.

Outlook

With an infrastructure team of over 60 professionals, we continue to actively manage the existing portfolio, seeking to preserve the value invested in the Group's assets. In addition, there remains scope to deliver outperformance in the medium term, particularly through active management and by taking a strategic approach to realising economies of scale across the portfolio.

The pipeline of new investment opportunities is healthy and diversified across a number of initiatives. Based on experience, existing relationships and the expertise of our Origination and Transaction team, we are confident of sourcing further accretive acquisitions for the Group.

In summary, the prospects remain good for building on the Company's 11-year track record of delivering income for shareholders from a portfolio of attractive infrastructure investments.

Key Performance and Quality Indicators

The Board has identified metrics against which to clearly measure the Company's performance of its strategic objectives. The results for the year ended 31 March 2017 are set out below.

Key Performance Indicators

 
                 Measure                              31 March 2017  31 March 2016 
--------------  ------------------------------------  -------------  ------------- 
                 Aggregate interim dividends 
                  declared per share for 
 Dividends        the year                                7.65p          7.45p 
==============  ====================================  =============  ============= 
 Objective: An annual distribution                     Commentary: Achieved. 
  of at least that achieved 
  in the prior year 
====================================================  ============================ 
 Total           NAV growth and dividends                 9.6%           9.5% 
  Return          paid per share since                     p.a.           p.a. 
                  IPO 
==============  ====================================  =============  ============= 
 Objective: A long-term IRR                            Commentary: Exceeded. 
  target of 7% to 8% as set 
  out at IPO1 
====================================================  ============================ 
                 Operational cash flow 
 Cash-covered     / dividends paid to 
  Dividends       shareholders                            1.22x          1.15x 
==============  ====================================  =============  ============= 
 Objective: Cash covered dividends                     Commentary: Achieved. 
====================================================  ============================ 
                 Changes in the expected 
 Inflation        portfolio return for 
  Correlation     1% p.a. inflation change                0.7%           0.6% 
==============  ====================================  =============  ============= 
 Objective: Maintain positive                          Commentary: Exceeded. 
  correlation 
====================================================  ============================ 
 Competitive 
  Cost           Annualised ongoing charges/average 
  Proposition     undiluted NAV 2                         1.06%          1.12% 
==============  ====================================  =============  ============= 
 Objective: Efficient gross                            Commentary: Achieved. 
  (portfolio level) to net (investor 
  level) returns, with the intention 
  to reduce ongoing charges 
  where possible 
====================================================  ============================ 
 

1 Set by reference to the issue price of 100p/share, at the time of the Company's IPO in February 2006. Previously reported on dividends declared basis.

2 Calculated in accordance with Association of Investment Companies' guidelines. Ongoing charges excluding non-recurring items such as acquisition costs.

Key Quality Indicators

 
 KPI                 Measure                          31 March 2017    31 March 2016 
------------------  -------------------------------  ---------------  --------------- 
 Investment          Percentage of the portfolio 
  Concentration       represented by the ten 
  Risk                largest investments1                 40%              39% 
------------------  -------------------------------  ---------------  --------------- 
  Percentage of the portfolio 
   represented by the single 
   largest investment1                                     6%               6% 
 --------------------------------------------------  ===============  =============== 
 Objective: Maintain a diversified                    Commentary: Achieved. 
  portfolio of investments (thereby 
  mitigating concentration risk) 
  and, at all times, remain 
  compliant with the Company's 
  Investment Policy 
===================================================  ================================ 
                     Percentage of the portfolio 
                      represented by the aggregate 
                      value of projects with 
 Risk/Reward          construction and/or 
  Characteristics     demand-based risk2                   13%              6% 
------------------  -------------------------------  ===============  =============== 
 Objective: Compliance with                           Commentary: Achieved. 
  the Company's Investment Policy                      Substantially lower 
                                                       than the aggregate limit 
                                                       of 35% for such investments. 
===================================================  ================================ 
 Unexpired           Portfolio's weighted                 24.4             21.5 
  Concession          average unexpired concession        years            years 
  Length              length 
------------------  -------------------------------  ===============  =============== 
 Objective: Seek where possible                       Commentary: Achieved. 
  investments that maintain                            Increase year-on-year 
  or extend the portfolio concession                   primarily due to the 
  life                                                 acquisition of Northwest 
                                                       Parkway (89-year concession 
                                                       length remaining). 
===================================================  ================================ 
 Treasury            FX gain (loss)3 as a 
  Management          percentage of the NAV               0.0%             0.3% 
------------------  -------------------------------  ---------------  --------------- 
  Cash less current liabilities 
   as a percentage of the 
   NAV                                                    2.7%             2.0% 
 --------------------------------------------------  ===============  =============== 
             Objective: Maintain effective            Commentary: Achieved. 
              treasury management processes, 
              notably: 
              Appropriate FX management 
              (confidence in near term yield 
              and managing NAV volatility 
              from FX) 
              Efficient cash management 
              (low net cash position) 
===================================================  ================================ 
                     Investments with refinancing 
 Refinancing          risk4 as a percentage 
  Risk                of the portfolio                     9%               3% 
------------------  -------------------------------  ===============  =============== 
 Objective: Manage exposure                           Commentary: Increase 
  to refinancing risk                                  year-on-year due to 
                                                       the acquisition of Northwest 
                                                       Parkway that has refinancing 
                                                       risk. 
===================================================  ================================ 
 

1 The Company's Investment Policy stipulates that any single investment (being, for this purpose, the sum of all incremental interests acquired by the Group in the same project) must be less than 20% (by value) of the gross assets of the Company, such assessment to be made immediately post acquisition of any interest in a project.

2 'More diverse infrastructure investments' which are made with the intention 'to enhance returns for shareholders', as permitted under the terms of the Company's Investment Policy - namely pre-operational projects, demand-based project and/or other vehicles making infrastructure investments. Further details are set out in the Investment Policy, available from the Company's website. In the year ended 31 March 2017, 2% of projects were in construction and 12% were demand-based (13% total); in the year ended 31 March 2016, 5% of projects were demand-based and 1% were in construction (6% total).

3 Impact of foreign exchange after hedging on NAV.

4 There are two projects with refinancing risk - Aquasure Desalination plant, Australia and Northwest Parkway, USA - and their future refinancing requirements are reflective of the fact that their respective debt markets do not offer debt for the concession term.

Operational and Financial Review

Operating Performance

Portfolio Statistics

During the year the number of investments in the portfolio increased from 104 to 114, with the 10 largest holdings representing 40% of the Directors' valuation as at 31 March 2017 (2016: 39%). In May 2017, the Group made a further acquisition, being an equity interest in Affinity Water Group, resulting in 115 investments in the portfolio as at 23 May 2017.

During the year two PPP projects (RD901 and PSBP Northeast Batch) completed construction. Of the 114 investments as at 31 March 2017, five (representing 2% of the portfolio, based on the Directors' valuation) are in construction: Irish Primary Care Centres, the A9 Road, Centrale Supelec, the N17/N18 Road and the accommodation project in northern Europe.

As at 31 March 2017 four assets were exposed to demand risk, comprising 12% of portfolio value, an increase from 31 March 2016 when there were two assets exposed to demand risk representing 5% of portfolio value.

Counterparty exposure

On a quarterly basis the portfolio's counterparty exposure to both the operational supply chain and the financial providers of bank deposit accounts and interest rate swaps is formally reviewed. The Investment Adviser's risk and control function monitors financial creditworthiness between the formal reviews, while the Asset Management team actively monitors the performance of the supply chain, where poor performance can be an early indication of looming financial difficulties. The review processes have not identified any material counterparty concerns for the portfolio's construction or facilities management contractors. The Directors ensure that the portfolio is diversified by counterparty to mitigate concentration risk.

Value Preservation

The operational performance of the portfolio has been good in the year ended 31 March 2017 and there have been no issues at asset level that have resulted in material losses to the Company. In this context, the threshold for materiality is defined as a loss from an investment that negatively impacts NAV per share by more than 1%. The commentary that follows in this section is therefore provided to give an insight into the asset management challenges and activities within the portfolio.

Solid progress has been made on projects which had previously suffered operational challenges. During the previous year, some of the Company's projects experienced instances of public sector clients who alleged asset faults and attempted to make deductions from their service payments using a strict interpretation of contractual terms. This year has seen the Asset Management team resolve many of these issues and a number of important settlement agreements have been signed that provide the solution to appropriately accommodate and bind all parties involved. In doing so, no material financial impact was borne by the Company's investments, with the costs and penalties of rectification being either passed down to the responsible contractor, or retracted.

There are some specific instances of latent construction defects that have caused operational challenges during the year. The following are examples that the Investment Adviser's Asset Management team has been actively managing during year:

In accommodation PPP projects the adequacy of fire-stopping measures in some assets has led to clients deducting - or threatening to deduct - against availability payments. A handful of projects were affected by such deductions and the focus of the Asset Management team has been on ensuring that the contractual framework operates as expected and that deductions applied are passed down to the supply chain.

There has been media coverage, particularly in Scotland, of the alleged deficient installation of brick wall ties (which secure exterior brick walls to the structure of a building) - in relation to public buildings procured both conventionally and using PPP. The Group takes the safety of all facilities seriously, and the Asset Management team is working closely with management service providers to actively investigate this issue, including in collaboration with public sector clients.

On the Aquasure PPP, the project company successfully rectified a defect with the power cable that connects the desalination plant to the local electricity grid. However, the re-powering of the facility led to a technical fault which, in turn, led to a delay in water production. The plant is now performing very well.

The Investment Adviser expects that such operational issues will arise from time to time but it has the resources in place, through its Asset Management team, to help prevent, resolve and mitigate them.

At the time of the 2016 Annual Report, the Company highlighted some non-material ongoing issues. These are updated below:

Progress resolving alleged building defects and operational issues at a hospital PPP has been slow. Although some of the outstanding matters were closed, a number of challenges remain. A concerted effort will be required from all parties if further progress is to be made. The value of the investment in the portfolio is in the range of GBP0-5m.

As previously reported, a school PPP project was voluntarily terminated during the year at the election of the local authority client. Certain building defects need to be solved, and negotiations are ongoing with the client regarding the quantification and payment of market value compensation to the Group. The value of the investment in the portfolio is in the range of GBP5-10m.

Progress has been made on the road PPP that has suffered from a number of operational issues and construction defects. The dispute with the construction subcontractor was proceeding to court but legal action was postponed when heads of terms for an acceptable commercial settlement were agreed between the parties. The focus during the coming year will be to document the agreement. The value of the investment in the portfolio is in the range of GBP0-5m.

The previously reported issues with a biomass boiler at a hospital PPP have been resolved. Since year-end the project has made its first distribution, representing a significant milestone and an indication of the progress made on the ground.

Remedial works on two grouped schools PPPs in the north of England were substantially completed during the year.

Value Enhancement

During the year, a number of cost savings and other incremental revenue-generating initiatives were undertaken by the Investment Adviser. Examples of such initiatives include:

Contract Variations

Public sector clients often make variation requests to amend the scope of services delivered, be it a capital project or an additional or amended service. In some cases the project may earn incremental revenue. During the year over GBP700m of new capital works commenced at PPP projects in the portfolio, including at the Allenby & Connaught project as part of the Army Basing Programme. Some variations do not involve new construction works but can greatly assist clients to more efficiently manage their estate. One example of this was with the Mid Yorkshire NHS Trust where a variation involving energy supply responsibilities saw significant benefit delivered to the Trust.

Re-tendering of Management Service Agreements ("MSAs")

The Investment Adviser identified MSA contracts that were capable of being re-tendered and created an innovative procurement plan to ensure that the best service would delivered by the winning provider at a price that represented best value. The focus of the plan was to select specialist MSA providers who were able to demonstrate an ability to work efficiently and effectively for each project company and in doing so increase robustness, resolve project issues and deliver cost savings. The first procurement batch, involving 18 projects, commenced in November 2016. Preferred providers for the projects have been selected and the handover process from incumbent providers, where applicable, has commenced. The process is expected to be concluded in 2017.

Refinancing of projects

Over GBP600m of debt and derivative products have been refinanced in the year across four projects, where the benefits of doing so are typically shared with the public sector clients in accordance with the contracts and agreed industry guidelines.

Accretive Investment

During the year the Group made 10 new investments and five incremental investments for a total consideration of GBP266.6m. Further detail can be found in Note 14 to the Financial Statements.

 
                                                                            Market          Stake      Overall 
 Date         Amount       Type           Stage           Asset              Segment         Acquired   Stake 
-----------  -----------  -------------  --------------  ----------------  ---------------  ---------  ------- 
 April 
  16          GBP14.5m     New            Operational     M1--A1 Road       Demand--based   30.0%      30.0% 
===========  ===========  =============  ==============  ================  ===============  =========  ======= 
 April                                                    Hinchingbrooke 
  16          GBP5.3m      New            Operational      Hospital         PPP             37.5%      37.5% 
-----------  ===========  -------------  --------------  ----------------  ---------------  ---------  ------- 
 June                                                      Hinchingbrooke 
  16                        Incremental    Construction     Hospital         PPP            37.5%      75.0% 
========================   =============  ==============  ================  ==============  =========  ======= 
                                                          Irish Primary 
 May 16       GBP9.9m      New            Operational      Care Centres     PPP             60.0%      60.0% 
===========  ===========  =============  ==============  ================  ===============  =========  ======= 
 September    GBP50.1m     New            Operational     A13 Senior        PPP             N/A        N/A 
  16                                                       Bonds 
===========  ===========  =============  ==============  ================  ===============  =========  ======= 
                                                          Bangor and 
 November                                                  Nendrum 
  16          GBP22.7m     New            Operational      Schools          PPP             20.4%      20.4% 
-----------  ===========  -------------  --------------  ----------------  ---------------  ---------  ------- 
 November                                                  Salford 
  16                        New            Operational      Schools          PPP            25.5%      25.5% 
------------------------   -------------  --------------  ----------------  --------------  ---------  ------- 
 November                                                  East Ayrshire 
  16                        New            Operational      Schools;         PPP            25.5%      25.5% 
------------------------   -------------  --------------  ----------------  --------------  ---------  ------- 
 November                                                  North Ayrshire 
  16                        New            Operational      Schools          PPP            25.5%      25.5% 
------------------------   -------------  --------------  ----------------  --------------  ---------  ------- 
 November                                                  Manchester 
  16                        Incremental    Operational      School           PPP            25.5%      75.5% 
------------------------   -------------  --------------  ----------------  --------------  ---------  ------- 
 November                                                  Cork School 

  16                        Incremental    Operational      of Music         PPP            25.5%      75.5% 
========================   =============  ==============  ================  ==============  =========  ======= 
 December     GBP19.8 
  16           m           New            Construction    A9 Road           PPP             20.0%      20.0% 
-----------  ===========  -------------  --------------  ----------------  ---------------  ---------  ------- 
 December                                                  Zaanstad 
  16                        Incremental    Operational      Prison           PPP            25.0%      100.0% 
========================   =============  ==============  ================  ==============  =========  ======= 
 March                                                    Northwest 
  17          GBP136.8m    New            Operational      Parkway          Demand-based    33.3%      33.3% 
===========  ===========  =============  ==============  ================  ===============  =========  ======= 
 March        GBP7.5m      Incremental    Operational     Helicopter        PPP             N/A        N/A 
  17                                                       Training 
                                                           Facility 
                                                           (loan) 
===========  ===========  =============  ==============  ================  ===============  =========  ======= 
  GBP266.6m 
 =============================================================================     =======  =========  ======= 
 

* Reconciles to GBP272.7m of investments shown in the analysis of change in the Directors' Valuation in Valuation of the Portfolio with the addition of a GBP6.1m foreign exchange movement on the Euro consideration for A63 Motorway between 31 March 2016 and completion in January 2017.

Since the financial year end, the Group has acquired an equity interest in the various entities that comprise the Affinity Water Group. HICL's share of the consideration for the acquisition amounted to approximately GBP269m, prior to a proposed sell-down of up to GBP25m of the investment to a group of co-investors.

Earlier in the year the Group bid (as part of a consortium) for a minority interest in one of the UK's regulated gas distribution businesses, losing narrowly to a rival bidder. The Group continues to participate in auction processes, gaining valuable market intelligence on competition and pricing. During the year, offers were made as part of eight separate market auction processes, with the Group successful in two of these situations.

Financial Performance

Accounting

The Company applies IFRS 10, 11 and 12 as well as Investment Entities - Amendments to IFRS 10, IFRS 12 and IAS 27. A further amendment to IFRS 10 - Investment Entities: Applying the Consolidation Exemption (Amendments to IFRS 10, IFRS 12 and IAS 28) as issued in December 2014 has been adopted by the Company for these financial statements following endorsement of the amendment by the EU in September 2016. This requires the Company to prepare IFRS financial statements which do not consolidate any subsidiaries, including those that are themselves investment entities.

This has resulted in a change from the March 2016 Consolidated Financial Statements in which the Company consolidated the results of HICL Infrastructure S.a.r.l. 1, HICL Infrastructure S.a.r.l. 2 and Infrastructure Investments Limited Partnership (together the "Corporate Subsidiaries") as under the current IFRS basis the Corporate Subsidiaries can no longer be consolidated.

References to the "Corporate Group" in this section refer to the Company and its Corporate Subsidiaries.

The adoption of the latest IFRS 10 Amendments has not changed the NAV per share or earnings per share compared to the previous approach used for the March 2016 Annual Report.

The Company and its advisers have concluded that in order to continue reporting the most relevant financial performance and position to stakeholders, the Company will prepare pro forma summary financial information on the basis that the Company consolidates the results of the Corporate Subsidiaries. This basis we designate the Investment Basis and presents the financial information in the same manner as previously in the March 2016 Consolidated Financial Statements. In particular they provide shareholders with further information regarding the Corporate Group's gearing and expenses, coupled with greater transparency in the Company's capacity for investment and ability to make distributions.

A reconciliation between the summary financial information prepared on the Investment Basis below and the results of the Company included in the Financial Statements under IFRS can be found in the Pro Forma Statements further below.

Summary financial statements

Investment Basis Summary Income Statement

 
                      Year to 31 March 2017              Year to 31 March 2016 
--------------------  ---------------------------------  -------------------------------------- 
                      Investment  Consolidation          Investment  Consolidation  IFRS 
 GBPm                  Basis       adjustments   IFRS     Basis       adjustments    (Restated) 
--------------------  ----------  -------------  ------  ----------  -------------  ----------- 
 Total income1        207.6       (29.0)         178.6   182.9       (24.1)         158.8 
====================  ==========  =============  ======  ==========  =============  =========== 
 Expenses & finance 
  costs               (30.5)      28.7           (1.8)   (25.5)      23.9           (1.6) 
====================  ==========  =============  ======  ==========  =============  =========== 
 Profit/(loss) 
  before tax          177.1       (0.3)          176.8   157.4       (0.2)          157.2 
====================  ==========  =============  ======  ==========  =============  =========== 
 Tax                  (0.3)       0.3            -       (0.2)       0.2            - 
====================  ==========  =============  ======  ==========  =============  =========== 
 
 Earnings             176.8       -               176.8  157.2       -              157.2 
====================  ==========  =============  ======  ==========  =============  =========== 
 Earnings per 
  share               12.4p       -              12.4p   11.9p       -              11.9p 
--------------------  ----------  -------------  ------  ----------  -------------  ----------- 
 

1 Includes net foreign exchange gain of GBP0.1m (2016: GBP5.2m gain).

On an Investment Basis, Total income of GBP207.6m (2016: GBP182.9m) represents the return from the portfolio recognised as income comprising dividends, sub-debt interest and valuation movements. Total Income has increased by 14% (GBP24.7m) reflecting a 21% increase in investments at fair value on an Investment Basis which has been partly offset by a lower contribution from discount rate reductions in the year than in the prior year. Further detail on the valuation movements is given in Valuation of the Portfolio.

On an IFRS basis, both Total income and Expenses and finance costs are lower than the Investment Basis as they do not include expenses incurred by the Corporate Subsidiaries. Total Income of GBP178.6 (2016: GBP158.8m) comprises interest income received by the Company and valuation movements in its investments.

Foreign exchange movements have not materially impacted profits. On an Investment Basis a GBP17.8m foreign exchange gain (2016: GBP13.9m gain) on revaluing the non-UK assets in the portfolio using March 2017 exchange rates has been offset by GBP17.7m (2016: GBP8.7m loss) foreign exchange hedging losses. The net gain of GBP0.1m (2016: GBP5.2m) is included in Total Income.

Earnings on an Investment Basis and IFRS basis were GBP176.8m, an increase of GBP19.6m against the prior year. This reflects the factors stated above whilst Corporate Group Expenses and finance costs were higher at GBP30.5m compared with GBP25.5m in the comparable period, reflecting acquisition activity and the growth in the portfolio. Earnings per share were 12.4p (2016: 11.9p).

A reconciliation between the Investment Basis Income Statement and the Income Statement of the Company can be found further below.

Investment Basis Cost Analysis

 
                                  Year to    Year to 
                                   31 March   31 March 
 GBPm                              2017       2016 
--------------------------------  ---------  --------- 
 Interest expense                 2.4        2.2 
--------------------------------  ---------  --------- 
 Investment Adviser fees          24.4       20.4 
--------------------------------  ---------  --------- 
 Auditor - KPMG - for the Group   0.3        0.3 
--------------------------------  ---------  --------- 
 Directors' fees & expenses       0.4        0.3 
--------------------------------  ---------  --------- 
 Acquisition bid costs            1.7        0.8 
--------------------------------  ---------  --------- 
 Professional fees                1.1        1.3 
================================  =========  ========= 
 Other expenses                   0.2        0.2 
================================  =========  ========= 
 Expenses & finance costs         30.5       25.5 
================================  =========  ========= 
 

Total fees accruing to InfraRed Capital Partners Limited ("the Investment Adviser") were GBP24.4m (2016: GBP20.4m) for the year, comprising the 1.1% p.a. management fee for assets up to GBP750m, 1.0% for assets above GBP750m, 0.9% for assets above GBP1.5bn and 0.8% for assets above GBP2.25bn, a 1.0% fee on acquisitions made from third parties, and the GBP0.1m p.a. advisory fee.

The increase in the Investment Adviser's fees is due to a larger portfolio and includes acquisition fees of GBP3.4m (2016: GBP1.5m).

In the year, the Corporate Group incurred GBP1.7m of third party costs (2016: GBP0.8m) on unsuccessful bids and bids in progress (mainly legal, technical and tax due diligence). The increase in bid costs in the year arose from greater bid activity for regulated assets and demand-based assets.

Neither the Investment Adviser nor any of its affiliates receives other fees from the Corporate Group or the Corporate Group's portfolio of investments.

On an IFRS basis, expenses and finance costs were GBP1.8m (2016: GBP1.6m) as they exclude those incurred by the Corporate Subsidiaries.

Ongoing Charges

 
                                  Year to    Year to 
                                   31 March   31 March 
 GBPm                              2017       2016 
--------------------------------  ---------  --------- 
 Investment Adviser(1)            21.0       18.9 
--------------------------------  ---------  --------- 
 Auditor - KPMG - for the Group   0.3        0.3 
--------------------------------  ---------  --------- 
 Directors' fees and expenses     0.4        0.3 
================================  =========  ========= 
 Other ongoing expenses           1.3        1.3 
================================  =========  ========= 
 Total expenses                   23.0       20.8 
--------------------------------  ---------  --------- 
 Average NAV                      2,172.2    1,852.1 
================================  =========  ========= 
 Ongoing charges                  1.06%      1.12% 
================================  =========  ========= 
 

1 Excludes acquisition fees of GBP3.4m (2016: GBP1.5m), in line with AIC calculation methodology.

Ongoing charges, in accordance with AIC guidance, is defined as annualised ongoing charges (i.e. excluding acquisition costs and other non-recurring items) divided by the average published undiluted net asset value in the period. On the basis of including costs incurred by the Corporate Subsidiaries, the Ongoing charges percentage is 1.06% (March 2016: 1.12%) with the reduction arising from the impact of the GBP373m of equity capital raisings in September 2016 and March 2017 combined with the growth in the portfolio providing efficiencies.

Investment Basis Summary Balance Sheet

 
                                                      31 March                             31 March 
                                                       2017                                 2016 
-------------------------  ----------  -------------  --------  ----------  -------------  ----------- 
                                                                                           IFRS 
 
                           Investment  Consolidation            Investment  Consolidation 
 GBPm                       Basis       adjustments   IFRS       Basis       adjustments    (Restated) 
-------------------------  ----------  -------------  --------  ----------  -------------  ----------- 
 Investments at 
  fair value               2,347.5     71.9           2,419.4   1,932.9     40.8           1,973.7 
-------------------------  ----------  -------------  --------  ----------  -------------  ----------- 
 Working capital           (10.3)      9.4            (0.9)     (11.7)      11.4           (0.3) 
=========================  ==========  =============  ========  ==========  =============  =========== 
 Net cash                  82.2        (81.3)         0.9       52.7        (52.2)         0.5 
=========================  ==========  =============  ========  ==========  =============  =========== 
 Net assets attributable 
  to Ordinary shares       2,419.4     -              2,419.4   1,973.9     -              1,973.9 
=========================  ==========  =============  ========  ==========  =============  =========== 
 NAV per share 
  (before dividend)        149.0p      -              149.0p    142.2p      -              142.2p 
-------------------------  ----------  -------------  --------  ----------  -------------  ----------- 
 NAV per share 
  (post dividend)          147.1p      -              147.1p    140.3p      -              140.3p 
-------------------------  ----------  -------------  --------  ----------  -------------  ----------- 
 

On an Investment Basis, Investments at fair value increased 21% to GBP2,347.5m (March 2016: GBP1,932.9m), being the Directors' valuation of GBP2,380.0m (March 2016: GBP2,030.3m) net of GBP32.5m of future investment obligations (March 2016: GBP97.4m). Further detail on the movement in Investments at fair value is given in Valuation of the Portfolio.

The Corporate Group had net cash, on an Investment Basis, at 31 March 2017 of GBP82.2m (31 March 2016: net cash of GBP52.7m), which covers the 1.92p fourth quarterly interim dividend of GBP31.2m due for payment at the end of June 2017. The Group expects to invest its net cash holdings by June 2017 by completing the recently announced acquisition of Affinity Water. An analysis of the movements in net cash is shown in the cash flow analysis below.

On an IFRS basis, Investments at fair value increased to GBP2,419.4m (March 2016: GBP1,973.7m), reflecting the Investment Basis movements above as well as a GBP30.8m increase in the fair value of the Corporate Subsidiaries as a result of changes in net cash held by the Corporate Subsidiaries. On an IFRS basis, cash and cash equivalents increased marginally to GBP0.9m (March 2016: GBP0.5m). The Group's cash is mainly held in the Corporate Subsidiaries.

NAV per share was 149.0p before the 1.92p distribution (31 March 2016: 142.2p). NAV per share has increased 6.8p, of which 2.1p was as a result of the 67m tap issue shares issued at a premium in September 2016 and the 164m shares in March 2017 issued via the February 2017 Prospectus. The expected NAV growth, being the budgeted return attributable to the unwinding of the discount rate, less Corporate Group costs and the dividends paid, was 0.8p.

A reconciliation between the Investment Basis Balance Sheet and the Balance Sheet of the Company can be found further below.

 
 Analysis of the Growth in NAV 
  per Share Pence per share 
---------------------------------  -----  ---  ----- 
 NAV per share at 31 March 20161               140.3 
---------------------------------  -----  ---  ----- 
 Valuation movements 
---------------------------------  -----  ---  ----- 
 Reduction in discount rates       2.8 
=================================  =====  ===  ===== 
 Changes in economic assumptions   (0.5) 
=================================  =====  ===  ===== 
                                          2.3 
---------------------------------  -----  ---  ----- 
 Portfolio performance 
---------------------------------  -----  ---  ----- 
 Project outperformance            1.6 
=================================  =====  ===  ===== 
 Expected NAV growth               0.8 
=================================  =====  ===  ===== 
 
                                          2.4 
---------------------------------  -----  ---  ----- 
 Accretive issuance of shares             2.1 
=================================  =====  ===  ===== 
 Total                                    6.8 
=================================  =====  ===  ===== 
 NAV per share at 31 March 20171               147.1 
=================================  =====  ===  ===== 
 

1 Post interim dividend declared, 1.92p for March 2017 and 1.87p for 31 March 2016

2 Expected NAV growth is the Company's budgeted EPS less target dividend

Cash Flow Analysis

Investment Basis Summary cash flow

 
                                                      31 March                             31 March 
                                                       2017                                 2016 
-------------------------  ----------  -------------  --------  ----------  -------------  ----------- 
                                                                                           IFRS 
 
                           Investment  Consolidation            Investment  Consolidation 
 GBPm                       Basis       adjustments   IFRS       Basis       adjustments    (Restated) 
-------------------------  ----------  -------------  --------  ----------  -------------  ----------- 
 Cash from investments     148.9       (40.7)         108.2     130.8       (32.3)         98.5 
=========================  ==========  =============  ========  ==========  =============  =========== 
 Operating and 
  finance costs 
  outflow                  (26.1)      24.9           (1.2)     (23.5)      21.9           (1.6) 
=========================  ==========  =============  ========  ==========  =============  =========== 
 Net cash inflow 
  before capital 
  movements                122.8       (15.8)         107.0     107.3       (10.4)         96.9 
-------------------------  ----------  -------------  --------  ----------  -------------  ----------- 
 Net cost of new 
  investments              (339.5)     (36.2)         (375.7)   (165.7)     (15.2)         (180.9) 
-------------------------  ----------  -------------  --------  ----------  -------------  ----------- 
 Share capital 
  raised net of 
  costs                    369.7       -              369.7     176.8       -              176.8 
=========================  ==========  =============  ========  ==========  =============  =========== 
 Forex movement 
  on borrowings/hedging1   (22.9)      22.9           -         (6.2)       6.2            - 
=========================  ==========  =============  ========  ==========  =============  =========== 
 Distributions 
  paid                     (100.6)     -              (100.6)   (93.0)      -              (93.0) 
=========================  ==========  =============  ========  ==========  =============  =========== 
 Movement in the 
  year                     29.5        (29.1)         0.4       19.2        (19.4)         (0.2) 
=========================  ==========  =============  ========  ==========  =============  =========== 
 Net cash at start 

  of year                  52.7        (52.2)         0.5       33.5        (32.8)         0.7 
=========================  ==========  =============  ========  ==========  =============  =========== 
 Net cash at end 
  of year                  82.2        (81.3)         0.9       52.7        (52.2)         0.5 
=========================  ==========  =============  ========  ==========  =============  =========== 
 

1 Includes capitalised debt issue costs of GBP0.7m (2016: GBP1.4m)

Cash inflows from the portfolio on an Investment Basis were GBP148.9m (2016: GBP130.8m). Growth in underlying cash generation was driven by contributions from acquisitions combined with active cash management across the portfolio.

The cost of new investments by the Corporate Group on an Investment Basis of GBP339.5m (2016: GBP165.7m) represents the cash cost of the 10 new investments and the five incremental acquisitions, loan note subscriptions on three investments and acquisition costs of GBP2.0m (2016: GBP3.1m).

On an IFRS basis, the Company received GBP108.2m from a direct Corporate Subsidiary (2016: GBP98.5m). These payments are sized by the Company to pay shareholder dividends assuming no scrip dividend take up and the Company's operating costs. On an IFRS basis, costs of new investments of GBP375.7m (2016: GBP180.9m) reflects loans extended by the Company to its direct Corporate Subsidiary in the year and broadly reflects scrip dividend take up and share capital raised net of costs.

Hedging and borrowing for the Corporate Group is undertaken by a Corporate Subsidiary and therefore the Company had no cash flows for this on an IFRS basis. On an Investment Basis, the GBP22.9m cash outflow (2016: GBP6.2m cash outflow) in foreign exchange rate hedging and borrowings arises from strengthening of the Euro, Australian Dollar and Canadian Dollar against Sterling in the year, as well as including GBP0.7m in debt issue costs (2016: GBP1.4m) to increase the revolving credit facility by GBP100m. The Corporate Group enters forward sales to hedge forex exposure in line with the Company's hedging policy set out in Strategy & Objectives. Overall foreign exchange movement has not materially impacted the Company's total income in the year, as set out in detail under the Income Statement above.

The issue of 231m shares in September 2016 and March 2017 at a premium to the prevailing NAV per share provided net cash receipts in the year of GBP369.7m (2016: GBP176.8m).

Dividends paid in the year increased GBP7.6m to GBP100.6m (2016: GBP93.0m). Dividend cash cover, which compares operational cash flow of GBP122.8m (2016: GBP107.3m) to dividends paid, was 1.22 times (2016: 1.15 times).

The scrip dividend alternatives for the fourth quarterly interim dividend in respect of the year ended 31 March 2016, and for the first three quarterly interim dividends for the reported financial year, resulted in an aggregate of 4.6m (2016: 3.6m) new shares being issued in June 2016, September 2016, December 2016 and March 2017.

It remains the Board's intention to continue both the payment of dividends on a quarterly basis and to offer a scrip alternative. Further details of the scrip alternative will be provided in July when the first quarterly interim dividend is declared.

Corporate Group Drawings and Gearing Levels

As at 31 March 2017, the Corporate Group's drawings under its multi-currency revolving credit facility ("RCF") were GBPnil by way of cash and GBP30.9m by way of letters of credit.

The Association of Investment Companies ("AIC") has published guidance in relation to gearing disclosures which is defined for a company with net cash as the net exposure to cash and cash equivalents, expressed as a percentage of shareholders' funds after any offset against its gearing. It is calculated by dividing total assets (less cash/cash equivalents) by shareholders funds. Applying this to the Investment Basis, the Corporate Group had a net cash position of 2.7% at 31 March 2017 (2016: 2.0% net cash). This analysis excludes any debt in the Corporate Group's investments.

In view of the current term of the RCF, the Company is able to confirm that sufficient working capital is available for the financial year ending 31 March 2018, without needing to refinance. The Investment Adviser will, however, consider refinancing options periodically aligned to the pipeline of potential transactions.

Further details of the Group's Revolving Credit Facility are set out in Strategy and Objectives.

Pro Forma Financial Statement Reconciliations

Below are reconciliations between the Company's IFRS financial statements and the Corporate Group's Investment Basis financial statements.

The IFRS financial statements comprise the Company only and all subsidiaries are measured at fair value through profit or loss. The Investment Basis financial statements consolidate the Corporate Subsidiaries in the Company's financial statements, while all other subsidiaries are measured at fair value through profit or loss.

All the adjustments in the reconciliations are due to the IFRS 10 Amendments under which the Company cannot consolidate the Corporate Subsidiaries. Further details are in Note 2 of the financial statements.

The below reconciliations are for the year ended 31 March 2017 for the Income Statement, Balance Sheet and Cash Flow Statement.

Further reconciliations for the year ended 31 March 2016 for the Income Statement and Cash Flow Statement and for the years ended 31 March 2015 and 31 March 2016 for the Balance Sheet can be found in Note 2 to the Financial Statements.

Unaudited Pro Forma Income Statement for the year ended 31 March 2017

 
                                   Investment               IFRS 
                                    Basis      Adjustments   Basis 
                                    GBPm        GBPm         GBPm 
---------------------------------  ----------  -----------  ------ 
 Investment income                 207.5       (28.9)       178.6 
=================================  ==========  ===========  ====== 
 Total income                      207.5       (28.9)       178.6 
=================================  ==========  ===========  ====== 
 Fund expenses                     (28.1)      26.3         (1.8) 
=================================  ==========  ===========  ====== 
 Profit before net finance costs 
  and tax                          179.4       (2.6)        176.8 
---------------------------------  ----------  -----------  ------ 
 Finance costs                     (2.4)       2.4          - 
=================================  ==========  ===========  ====== 
 Finance income                    0.1         (0.1)        - 
=================================  ==========  ===========  ====== 
 Profit before tax                 177.1       (0.3)        176.8 
=================================  ==========  ===========  ====== 
 Income tax expense                (0.3)       0.3          - 
=================================  ==========  ===========  ====== 
 Profit for the period             176.8       -            176.8 
=================================  ==========  ===========  ====== 
 
 Earnings per share - basic 
  and diluted (pence)              12.4        -            12.4 
---------------------------------  ----------  -----------  ------ 
 

Unaudited Pro Forma Balance Sheet At 31 March 2017

 
                                      Investment               IFRS 
                                       Basis      Adjustments   Basis 
                               Notes   GBPm        GBPm         GBPm 
-----------------------------  -----  ----------  -----------  ------- 
 Non-current assets 
=============================  =====  ==========  ===========  ======= 
 Investments at fair 
  value through profit 
  or loss                      1      2,347.5     71.9         2,419.4 
=============================  =====  ==========  ===========  ======= 
 Total non-current assets             2,347.5     71.9         2,419.4 
=============================  =====  ==========  ===========  ======= 
 Current assets 
-----------------------------  -----  ----------  -----------  ------- 
 Trade and other receivables           1.8         (1.7)       0.1 
-----------------------------  -----  ----------  -----------  ------- 
 Other current financial 
  assets                              5.1         (5.1)        - 
=============================  =====  ==========  ===========  ======= 
 Cash and cash equivalents            82.2        (81.3)       0.9 
=============================  =====  ==========  ===========  ======= 
 Total current assets                 89.1        (88.1)       1.0 
=============================  =====  ==========  ===========  ======= 
 Total assets                         2,436.6     (16.2)       2,420.4 
=============================  =====  ==========  ===========  ======= 
 Current liabilities 
-----------------------------  -----  ----------  -----------  ------- 
 Trade and other payables             (15.2)      14.2         (1.0) 
=============================  =====  ==========  ===========  ======= 
 Other current financial 
  liabilities                         (2.0)       2.0          - 
=============================  =====  ==========  ===========  ======= 
 Total current liabilities            (17.2)      16.2         (1.0) 
=============================  =====  ==========  ===========  ======= 
 Total liabilities                    (17.2)      16.2         (1.0) 
=============================  =====  ==========  ===========  ======= 
 Net assets                           2,419.4     -            2,419.4 
=============================  =====  ==========  ===========  ======= 
 Equity 
-----------------------------  -----  ----------  -----------  ------- 
 Ordinary Share capital               0.2         -            0.2 
-----------------------------  -----  ----------  -----------  ------- 
 Share premium                        1,753.3     -            1,753.3 
=============================  =====  ==========  ===========  ======= 

 Retained reserves                    665.9       -            665.9 
=============================  =====  ==========  ===========  ======= 
 Total equity                         2,419.4     -            2,419.4 
=============================  =====  ==========  ===========  ======= 
 Net assets per Ordinary 
  Share (pence)                       149.0       -            149.0 
=============================  =====  ==========  ===========  ======= 
 

Note 1 to the Unaudited Pro Forma Balance Sheet

 
                                             31 March  31 March 
                                              2017      2016 
                                              GBPm      GBPm 
-------------------------------------------  --------  -------- 
 Directors' valuation                        2,380.0   2,030.3 
===========================================  ========  ======== 
 Less: future commitments (Note 18)          (32.5)    (97.4) 
===========================================  ========  ======== 
 Investments at fair value on Investment 
  Basis                                      2,347.5   1,932.9 
-------------------------------------------  --------  -------- 
 Net cash in Corporate Subsidiaries          81.3      52.2 
===========================================  ========  ======== 
 Working capital in Corporate Subsidiaries   (9.4)     (11.4) 
===========================================  ========  ======== 
 Investments at fair value per Balance 
  Sheet                                      2,419.4   1,973.7 
===========================================  ========  ======== 
 

Unaudited Pro Forma Cash Flow Statement for the year ended 31 March 2017

 
                                        Investment               IFRS 
                                         Basis      Adjustments   Basis 
                                         GBPm        GBPm         GBPm 
--------------------------------------  ----------  -----------  ------- 
 Cash flows from operating activities 
--------------------------------------  ----------  -----------  ------- 
 Profit before tax                      177.1       (0.3)        176.8 
--------------------------------------  ----------  -----------  ------- 
 Adjustments for: 
--------------------------------------  ----------  -----------  ------- 
 Investment income                      (207.5)     28.9         (178.6) 
--------------------------------------  ----------  -----------  ------- 
 Finance costs                          2.4         (2.4)        - 
--------------------------------------  ----------  -----------  ------- 
 Finance income                         (0.1)       0.1          - 
======================================  ==========  ===========  ======= 
 Operator acquisition investment 
  fees                                  3.4         (3.4)        - 
======================================  ==========  ===========  ======= 
 Operating cash flow before 
  changes in working capital            (24.7)      22.9         (1.8) 
--------------------------------------  ----------  -----------  ------- 
 Changes in working capital: 
--------------------------------------  ----------  -----------  ------- 
 Decrease in receivables                (0.2)       0.2          - 
======================================  ==========  ===========  ======= 
 Decrease in payables                   3.9         (3.3)        0.6 
======================================  ==========  ===========  ======= 
 Cash flow from operations              (21.0)      19.8         (1.2) 
--------------------------------------  ----------  -----------  ------- 
 Interest received on bank deposits     0.1         (0.1)        - 
--------------------------------------  ----------  -----------  ------- 
 Interest paid                          (1.9)       1.9          - 
--------------------------------------  ----------  -----------  ------- 
 Corporation tax paid                   (0.3)       0.3          - 
--------------------------------------  ----------  -----------  ------- 
 Interest received on investments       92.0        16.2         108.2 
--------------------------------------  ----------  -----------  ------- 
 Dividends received                     32.0        (32.0)       - 
--------------------------------------  ----------  -----------  ------- 
 Fees and other operating income        14.3        (14.3)       - 
======================================  ==========  ===========  ======= 
 Loanstock and equity repayments 
  received                              10.6        (10.6)       - 
======================================  ==========  ===========  ======= 
 Net cash from operating activities     125.8       (18.8)       107.0 
======================================  ==========  ===========  ======= 
 Cash flows from investing activities 
======================================  ==========  ===========  ======= 
 Purchases of investments               (339.5)     (36.2)       (375.7) 
======================================  ==========  ===========  ======= 
 Net cash used in investing 
  activities                            (339.5)     (36.2)       (375.7) 
======================================  ==========  ===========  ======= 
 Cash flows from financing activities 
--------------------------------------  ----------  -----------  ------- 
 Proceeds from issue of share 
  capital                               369.7       -            369.7 
--------------------------------------  ----------  -----------  ------- 
 Proceeds from issue of loans 
  and borrowings                        176.5       (176.5)      - 
--------------------------------------  ----------  -----------  ------- 
 Repayment of loans and borrowings      (176.5)     176.5        - 
--------------------------------------  ----------  -----------  ------- 
 Foreign exchange (loss)                (22.2)      22.2         - 
======================================  ==========  ===========  ======= 
 Distributions paid to Company 
  shareholders                          (100.6)     -            (100.6) 
======================================  ==========  ===========  ======= 
 Net cash from / (used in) financing 
  activities                            246.9       22.2         269.1 
======================================  ==========  ===========  ======= 
 Net increase/(decrease) in 
  cash and cash equivalents             33.2        (32.8)       0.4 
======================================  ==========  ===========  ======= 
 Cash and cash equivalents at 
  beginning of period                   52.7        (52.2)       0.5 
======================================  ==========  ===========  ======= 
 Exchange gains on cash                 (3.7)       3.7          - 
======================================  ==========  ===========  ======= 
 Cash and cash equivalents at 
  end of period                         82.2        (81.3)       0.9 
======================================  ==========  ===========  ======= 
 

Valuation of the Portfolio

Valuation Methodology and Approach Overview

InfraRed, as the Investment Adviser, is responsible for carrying out the fair market valuation of the Group's investments, which is presented to the Directors for their consideration and, if appropriate, approval. The valuation is carried out on a six-monthly basis as at 31 March and 30 September each year, with the result, the assumptions used and key sensitivities (see Valuation Assumptions and Sensitivities below) published in the interim and annual results.

The Group's investments are predominantly non-market traded investments, such that these investments are valued using a discounted cash flow analysis of the forecast investment cash flows from each project. The exception to this is the listed senior debt in the A13 road project which is valued at a quoted market price of the bonds. This valuation methodology is the same as that used at the time of the Company's launch and in each subsequent six-month reporting period (further details can be found in the Company's February 2017 Prospectus, available from the Company's website).

The key external (macroeconomic and fiscal) factors affecting the forecast of each portfolio company's cash flows in local currency are inflation rates, deposit interest rates and local corporation tax rates. The Investment Adviser makes forecast assumptions for each of these external metrics, based on market data and economic forecasts. The Investment Adviser exercises its judgement in assessing the expected future cash flows from each investment based on detailed financial models produced for each portfolio company and adjusting where necessary to reflect the Group's economic assumptions as well as any specific operating assumptions.

The fair value for each investment is then derived from the application of an appropriate market discount rate and year-end currency exchange rate. The discount rate takes into account risks associated with the financing of a portfolio company such as specific risks (e.g. liquidity, currency risks, market appetite) and any risks to project earnings (e.g. predictability and covenant of the income), all of which may be differentiated by market segment and/or operational status. The Investment Adviser uses its judgement in arriving at the appropriate discount rate. This is based on its knowledge of the market, taking into account intelligence gained from its bidding activities, discussions with financial advisers in the appropriate market and publicly available information on relevant transactions.

The Directors' Valuation is the key component in determining the Company's NAV and so the Directors seek, from a third party valuation expert, an independent report and opinion on the valuation provided by the Investment Adviser. The Directors' valuation is the preferred valuation measure of the portfolio because it is the total value at risk for the group, as compared to investments at fair value through profit or loss which nets off future commitments. A reconciliation of the Directors' Valuation to investments at fair value as per the Balance Sheet and on an Investment Basis is provided in Note 1 to the Unaudited Pro Forma Balance Sheet in Operational and Financial Review.

Directors' Valuation at 31 March 2017

The Directors' Valuation of the portfolio at 31 March 2017 was GBP2,380.0m. This valuation compares to GBP2,030.3m at 31 March 2016 (up 17.2%). A reconciliation between the Directors' Valuation at 31 March 2017 and that shown in the financial statements is given in Note 13 to the financial statements, the principal difference being that the Directors' valuation includes the GBP32.5m outstanding equity commitments in respect of the A9, Centrale Supelec, Irish Primary Care, N17/N18 Road, Willesden Hospital and the Northern European Fire, Law & Order project.

A breakdown of the movement in the Directors' Valuation in the year

 
 Valuation movements 
  during the year to 31 
  March 2017                                        % 
  (GBPm)                                             change 
--------------------------------  -------  -------  ------- 
 Directors' Valuation 
  at 31 March 2016                         2,030.3 
--------------------------------  -------  -------  ------- 
 Investments                      272.7 
--------------------------------  =======  -------  ------- 
 Cash receipts from investments   (148.9) 
--------------------------------  =======  -------  ------- 
 
 Less future commitments                   (30.9) 
================================  =======  =======  ======= 
 Rebased valuation of 
  the portfolio                            2,123.2 
================================  =======  =======  ======= 
 Return from the portfolio        173.3             8.2% 
--------------------------------  -------  -------  ------- 
 Change in discount rate          40.4              1.9% 
--------------------------------  -------  -------  ------- 
 Economic assumptions             (7.2)             (0.3%) 
--------------------------------  =======  =======  ======= 
 Forex movement on non-UK 
  investments                     17.8              0.8% 
--------------------------------  =======  =======  ======= 
                                           224.3    10.6% 
================================  =======  =======  ======= 
 Future commitments                        32.5 
================================  =======  =======  ======= 
 Directors' Valuation 
  at 31 March 2017                         2,380.0 
================================  =======  =======  ======= 
 

Future commitments of GBP30.9m measures year end commitments at 31 March 2016 exchange rates

Allowing for the investments during the year of GBP272.7m, and investment receipts of GBP148.9m, the rebased valuation was GBP2,123.2m. The growth in the Directors' Valuation of the portfolio at 31 March 2017 over the rebased value was 10.6%.

The increase arises from a GBP173.3m return from the portfolio, a GBP40.4m uplift from a 0.1% decrease in the weighted average discount rate used to value the portfolio combined with a GBP10.6m net valuation uplift from changes to certain economic assumptions (-GBP7.2m) and foreign exchange rates (+GBP17.8m). The negative movement in economic assumptions included lower forecast long term deposit rates and near term European inflation rates, partly offset by lower UK and French corporation tax rates.

Return from the Portfolio

The return from the portfolio of GBP173.3m (2016: GBP138.0m) represents an 8.2% (2016: 7.9%) increase in the rebased value of the portfolio. As expected, the majority of this 'return' (7.4%, being the average) was generated by the unwinding of the weighted-average discount rate used to value the portfolio in the year.

Incremental value was generated from the revaluation of acquisitions completed in the year as well as operational outperformance from various cost saving and efficiency initiatives, though these efficiencies were mostly negated by the adverse impact of actual UK inflation on average in the year running lower than the 2.75% p.a. forecast assumption.

Discount rates

The main method for determining the appropriate discount rate used for valuing each investment is based on the Investment Adviser's knowledge of the market, taking into account intelligence gained from bidding activities, discussions with financial advisers knowledgeable of these markets and publicly available information on relevant transactions.

When there are limited transactions or information available, and as a second method and sense check, a "bottom up" approach is taken based on the appropriate long-term Government Bond yield and an appropriate risk premium.

The risk premium takes into account risks and opportunities associated with the project earnings (e.g. predictability and covenant of the concession income), all of which may be differentiated by market segment, operational status, jurisdiction and market participants' appetite for these risks.

In the portfolio there were five PPP projects in construction at 31 March 2017, all of which are located in Europe. An investment in a project under construction can offer a higher overall return (i.e. require a higher discount rate) compared to buying an investment in an operational project. However construction assets do not usually yield during the construction period and there is the risk that delays in construction may affect the investment value.

An analysis of the weighted-average discount rates for the investments in the portfolio analysed by territory, and showing movement in the year, is shown below.

 
                              31 March 
                               2017 
---------------  -----------  --------  --------  ---------  -------- 
                 Long-term                        31 March 
                  government                       2016 
                  bond        Risk      Discount   Discount 
 Country          yield        premium   rate      rate      Movement 
---------------  -----------  --------  --------  ---------  -------- 
 UK              1.7%         5.5%      7.2%      7.5%       (0.3%) 
---------------  -----------  --------  --------  ---------  -------- 
 Australia       3.1%         4.2%      7.3%      7.9%       (0.6%) 
---------------  -----------  --------  --------  ---------  -------- 
 Eurozone        1.4%(1)      6.2%      7.6%      7.8%       (0.2%) 
===============  ===========  ========  ========  =========  ======== 
 North America   2.8%         5.4%      8.2%      7.1%       1.1% 
===============  ===========  ========  ========  =========  ======== 
 Portfolio       1.8%         5.6%      7.4%      7.5%       (0.1%) 
===============  ===========  ========  ========  =========  ======== 
 

1 The long-term government bond yield for a region is the weighted average for all of the countries in which the portfolio is invested in that region (for example for the Eurozone this is France, the Netherlands and Ireland).

In the UK, there is sufficient market data on discount rates and hence the risk premium is derived from this market discount rate for investments less the appropriate long-term government bond yield. For Australia, North America and the Eurozone, where there is less market data, more emphasis is placed on the "bottom up" approach to determine discount rates. The Board discusses the proposed valuation with the third-party valuation expert to ensure that the valuation of the Group's portfolio is appropriate.

As long-term government bond yields in the UK, Australia, North America and the Eurozone are currently low, this has resulted in higher country risk premiums (as discount rates have not fallen as far as bond yields). The Investment Adviser's view is that discount rates used to value investments don't rigidly follow bond yields, although naturally there is some correlation over the longer term. The implication from this is that an increase from these historically low bond yields could happen without necessarily directly adversely impacting discount rates.

The 0.1% reduction in the weighted average discount rate in the year arose from a reduction of 0.2% in the weighted average discount rate attributable to a more competitive environment for infrastructure assets which was then offset by a 0.1% increase from the US$166.4m acquisition of the Northwest Parkway toll road which is valued using a higher discount rate than the weighted average. While there is a slow supply of new PPP investment opportunities, new market entrants, attracted by the favourable risk-adjusted returns, have driven prices upward, and hence caused discount rates to reduce during the year.

Valuation Assumptions

Apart from the discount rates, the other key economic assumptions used in determining the Directors' valuation

of the portfolio are as follows:

 
                                       31 March 2017        31 March 2016 
------------------  ----------------  -------------------  --------------------- 
 Inflation           UK (RPI and       2.75% p.a.           2.75% p.a. 
  Rates               RPIx)(1) 
==================  ----------------  -------------------  --------------------- 
                     Eurozone (CPI)    1.0% p.a.            1% p.a. until 
                                        to 2019,             2018, 
                                         2.0% thereafter      2.0% p.a. 
                                                              thereafter 
==================  ----------------  -------------------  --------------------- 
                     Canada (CPI)      2.0% p.a.            2.0% p.a. 
                    ----------------  -------------------  --------------------- 
                     USA (CPI)         2.0% p.a.            N/A 
                    ----------------  -------------------  --------------------- 
                     Australia         2.5% p.a.            2.5% p.a. 
                      (CPI) 
==================  ================  ===================  ===================== 
 Deposit Rates       UK                1.0% p.a.            1.0% p.a. 
                                        to March 2021,       to March 2020, 
                                         2.0% p.a.            2.5% p.a. 
                                         thereafter           thereafter 
==================  ----------------  -------------------  --------------------- 
                     Eurozone          1.0% p.a.            1.0% p.a. 
                                        to March 2021,       to March 2020, 
                                         2.0% p.a.            2.5% p.a. 
                                         thereafter           thereafter 
==================  ----------------  -------------------  --------------------- 
                     Canada            1.0% p.a.            1.0% p.a. 
                                        to March 2021,       to March 2020, 
                                         2.0% p.a.            2.5% p.a. 
                                         thereafter           thereafter 
                    ----------------  -------------------  --------------------- 
                     USA               1.0% p.a.            N/A 
                                        with a gradual 
                                        increase to 
                                        2.0% 
                    ----------------  -------------------  --------------------- 
                     Australia         2.6% p.a.            2.6% p.a. 
                                        with a gradual       with a gradual 
                                        increase to          increase to 
                                        3.0% p.a.            3.0% p.a. 
                                        long-term            long-term 
==================  ================  ===================  ===================== 
 Foreign Exchange 
  Rates              EUR / GBP         0.85                 0.79 
==================  ----------------  -------------------  --------------------- 
  CAD / GBP                            0.60                 0.54 
 -----------------------------------  -------------------  --------------------- 
                     USD / GBP         0.80                 N/A 
                    ----------------  -------------------  --------------------- 
  AUD / GBP                            0.61                 0.53 
 ===================================  ===================  ===================== 
 Tax Rates           UK                19% p.a. to          20% p.a. to 
                                        March 2020,          March 2017, 
                                                             19% p.a. to 
                                                             March 2020, 
                                                             18% p.a. thereafter 
                                         17% p.a. 
                                         thereafter 
 -----------------------------------  -------------------  --------------------- 
  Eurozone                             Various (no          Various (no 
                                        change apart         change) 
                                        from French 
                                        tax rate reducing 
                                        from 33.3% 
                                        p.a. to 28% 
                                        p.a. by 2019) 
 -----------------------------------  -------------------  --------------------- 
  Canada                               26% p.a. and         26% p.a. and 
                                        27% p.a.             27% p.a. 
 -----------------------------------  -------------------  --------------------- 
  USA                                  35% p.a. Federal     N/A 
                                        & 4.6% p.a. 
                                        Colorado 
                                        State 
 -----------------------------------  -------------------  --------------------- 
  Australia                            30% p.a.             30% p.a. 
 ===================================  ===================  ===================== 
 GDP                 UK                2.0% p.a.            N/A 
 
                      Eurozone          1.8% p.a.            N/A 
 
                      USA               2.5% p.a.            N/A 
==================  ================  ===================  ===================== 
 

1 Retail Price Index and Retail Price Index excluding mortgage interest payments

Valuation Sensitivities

The portfolio's valuation is sensitive to each of the macro-economic assumptions listed above. An explanation of the reason for the sensitivity and an analysis of how each variable in isolation (i.e. while keeping the other assumptions constant) impacts the NAV per share follows below. Sensitivities are also contained in Note 4 to the financial statements.

Discount Rate Sensitivity

Whilst not a macro-economic assumption, the weighted-average discount rate that is applied to each project's forecast cash flows, for the purposes of valuing the portfolio, is the single most important judgement and variable. The impact of a 0.5% change in the discount rate on the NAV per share is shown above.

Inflation Rate Sensitivity

The projects in the portfolio have contractual income streams derived from public sector clients, which are rebased every year for inflation. UK projects tend to use either RPI (Retail Price Index) or RPIx (RPI excluding mortgage payments) while non-UK projects use CPI (consumer price index) and revenues are either partially or totally indexed (depending on the contract and the nature of the project's financing). Facilities management sub-contracts have similar indexation arrangements.

The correlation and sensitivity of the portfolio to inflation increased in the year with the acquisitions of the A63 Motorway and Northwest Parkway toll roads. The portfolio's inflation correlation at 31 March 2017 was 0.7 (2016: 0.6) such that should inflation be 1% higher than the valuation assumption for all future periods the expected return from the portfolio would increase 0.7% from 7.4% to 8.1%.

In the UK RPI and RPIx were 3.1% and 3.4% respectively as at March 2017. The portfolio valuation assumes UK inflation of 2.75% per annum for both RPI and RPIx, the same assumption as for the prior year. The March 2017 forecasts for RPI out to December 2018 range from 2.5% to 4.1% from 25 independent forecasters as compiled by HM Treasury, with an average forecast of 3.3%.

Deposit Rate Sensitivity

Each portfolio company's interest costs are typically at fixed rates, either through fixed rate bonds or bank debt which is hedged with an interest rate swap, or linked to inflation through index-linked bonds. A portfolio company's sensitivity to interest rates relates to cash deposits, which are often required to be maintained as part of senior debt funding. For example most PPP projects would have a debt service reserve account in which six months of debt service payments are held.

At 31 March 2017, cash deposits for the portfolio were earning interest at a rate of 0.2% per annum on average. There is a consensus that UK base rates will remain low for an extended period, with a current median forecast for UK base rates in December 2018 of 0.25% p.a.

The portfolio valuation assumes UK deposit interest rates are 1.0% p.a. to March 2021 and 2.0% p.a. thereafter. Once again this extends the period of 1.0% p.a. deposit interest rates and applies a lower long-term rate compared to that applied in the March 2016 valuation, which assumed 1.0% p.a. deposit interest rates to March 2020 and 2.5% p.a. thereafter. These changes have reduced the portfolio valuation and are included within the GBP7.2m aggregate decrease in portfolio value attributable to changes in Economic Assumptions.

Lifecycle Expenditure Sensitivity

'Lifecycle' (also called asset renewal or major maintenance) expenditure concerns the replacement of material parts of an asset to maintain it over the concession life. It involves larger items that are not covered by routine maintenance and for a building will include items like the replacement of boilers, chillers, carpets and doors when they reach the end of their useful economic lives.

The lifecycle expenditure, together with the budget and the risk, is usually either taken by a portfolio company (and hence the investor) or is subcontracted and taken by a suitable sub-contractor. Of the 114 investments, 53 have lifecycle as a portfolio company risk (i.e. not subcontracted to the supply-chain).

Corporation Tax Rate Sensitivity

The profits of each portfolio company are subject to corporation tax in the country where the company is located. The UK corporation tax assumption for the portfolio valuation is 19% to March 2020 and 17% thereafter, which is a reduction from the rates assumed at March 2016, to reflect the legal enactment of the prospective changes to the rate of UK corporation tax. The French corporation tax rate assumption has reduced from 33% to 28% in line with French legislation enacted in 2016. These rate changes, have resulted in an increase to the portfolio valuation, which is netted off within the GBP7.2m aggregate reduction in portfolio value attributable to changes in Economic Assumptions.

Gross Domestic Product ("GDP") Sensitivity

The acquisition of demand risk assets in the year has resulted in an increased sensitivity of the portfolio to changes in GDP. At 31 March 2017 the portfolio had three investments which are considered sensitive to GDP, namely the A63 Motorway, M1-A1 Road and Northwest Parkway. Together these projects comprised 10.0% of the Directors' Valuation at year end. At times of higher economic activity there will be greater traffic volumes using these roads generating increased revenues for the projects than compared to periods of lower economic activity and therefore we assess these as GDP-sensitive investments. If GDP was 0.5% lower than our valuation assumptions for every future period, the expected return from the portfolio (before group expenses) would decrease from 7.4% to 7.2%.

Financial Statements

Income Statement

For the year ended 31 March 2017

 
                                    Year ended  Year ended 
                                     31          31 March 
                                     March       2016 
                                     2017        Restated* 
                                     Total       Total 
                              Note   GBPm        GBPm 
----------------------------  ----  ----------  ---------- 
 Investment income            6     178.6       158.8 
============================  ====  ==========  ========== 
 Total income                       178.6       158.8 
============================  ====  ==========  ========== 
 Fund expenses                7     (1.8)       (1.6) 
============================  ====  ==========  ========== 
 Profit before tax                  176.8       157.2 
============================  ====  ==========  ========== 
 Profit for the year 
----------------------------  ----  ----------  ---------- 
 Earnings per share - basic 
  and diluted (pence)         10    12.4        11.9 
----------------------------  ----  ----------  ---------- 
 

*Comparative information has been restated. See Note 2 for details.

All results are derived from continuing operations. There is no other comprehensive income or expense apart from those disclosed above and consequently a statement of comprehensive income has not been prepared.

Balance Sheet

As at 31 March 2017

 
                                                     31 March 
                                           31 March   2016 
                                            2017      Restated* 
                                     Note   GBPm      GBPm 
-----------------------------------  ----  --------  ---------- 
 Non-current assets 
===================================  ====  ========  ========== 
 Investments at fair value through 
  profit or loss                     13    2,419.4   1,973.7 
===================================  ====  ========  ========== 
 Total non-current assets                  2,419.4   1,973.7 
===================================  ====  ========  ========== 
 Current assets 
-----------------------------------  ----  --------  ---------- 
 Trade and other receivables                0.1       0.1 
===================================  ====  ========  ========== 
 Cash and cash equivalents                 0.9       0.5 
===================================  ====  ========  ========== 
 Total current assets                      1.0       0.6 
===================================  ====  ========  ========== 
 Total assets                              2,420.4   1,974.3 
===================================  ====  ========  ========== 
 Current liabilities 
===================================  ====  ========  ========== 
 Trade and other payables                  (1.0)     (0.4) 
===================================  ====  ========  ========== 
 Total current liabilities                 (1.0)     (0.4) 
===================================  ====  ========  ========== 
 Total liabilities                         (1.0)     (0.4) 
===================================  ====  ========  ========== 
 Net assets                                2,419.4   1,973.9 
===================================  ====  ========  ========== 
 Equity 
-----------------------------------  ----  --------  ---------- 
 Ordinary Share capital              16    0.2       0.1 
-----------------------------------  ----  --------  ---------- 
 Share premium                       16    1,753.3   1,376.5 
-----------------------------------  ----  --------  ---------- 
 Retained reserves                         665.9     597.3 
===================================  ====  ========  ========== 
 Total equity                              2,419.4   1,973.9 
===================================  ====  ========  ========== 
 Net assets per Ordinary Share 
  (pence)                            12    149.0     142.2 
===================================  ====  ========  ========== 
 

* Comparative information has been restated. See Note 2 for details.

The accompanying notes are an integral part of these financial statements.

The financial statements were approved and authorised for issue by the Board of Directors on 23 May 2017, and signed on its behalf by:

   S Farnon                                                          I Russell 
   Director                                                                                   Director 

Statement of Changes in Shareholders' Equity

For the year ended 31 March 2017

 
                                 Year ended 31 March 
                                  2017 
                                  Attributable to equity 
                                  holders of the parent 
-------------------------------  ----------------------------------- 
                                 Share 
                                  capital 
                                  and                 Total 
                                  share    Retained    shareholders' 
                                  premium   reserves   equity 
                                  GBPm      GBPm       GBPm 
-------------------------------  --------  ---------  -------------- 
 Shareholders' equity at 1 
  April 2016                     1,376.6   597.3      1,973.9 
===============================  ========  =========  ============== 
 Profit for the year             -         176.8      176.8 
-------------------------------  --------  ---------  -------------- 
 Distributions paid to Company 
  shareholders in cash           -         (100.6)    (100.6) 
===============================  ========  =========  ============== 
 Distributions paid to Company 
  shareholders by scrip issue    -         (7.6)      (7.6) 
===============================  ========  =========  ============== 
 Total distributions paid to 
  Company shareholders in the 
  year                           -         (108.2)    (108.2) 
===============================  ========  =========  ============== 
 Ordinary Shares issued for 
  cash                           373.3     -          373.3 
===============================  ========  =========  ============== 
 Ordinary Shares issued for 
  scrip dividend                 7.6       -          7.6 
===============================  ========  =========  ============== 
 Total Ordinary Shares issued 
  in the year                    381.0     -          381.0 
===============================  ========  =========  ============== 
 Costs of issue of Ordinary 
  Shares                         (4.1)     -          (4.1) 
===============================  ========  =========  ============== 
 Shareholders' equity at 31 
  March 2017                     1,753.5   665.9      2,419.4 
===============================  ========  =========  ============== 
 
 
                                 Year ended 31 March 
                                  2016 
                                  Attributable to equity 
                                  holders of the parent 
-------------------------------  ----------------------------------- 
                                 Share 
                                  capital 
                                  and                 Total 
                                  share    Retained    shareholders' 
                                  premium   reserves   equity 
                                  GBPm      GBPm       GBPm 
-------------------------------  --------  ---------  -------------- 
 Shareholders' equity at 1 
  April 2015                     1,194.3   538.6      1,732.9 
===============================  ========  =========  ============== 
 Profit for the year             -         157.2      157.2 
-------------------------------  --------  ---------  -------------- 
 Distributions paid to Company 
  shareholders in cash           -         (93.0)     (93.0) 
===============================  ========  =========  ============== 
 Distributions paid to Company 
  shareholders by scrip issue    -         (5.5)      (5.5) 
===============================  ========  =========  ============== 
 Total distributions paid to 
  Company shareholders in the 
  year                           -         (98.5)     (98.5) 
===============================  ========  =========  ============== 
 Ordinary Shares issued for 
  cash                           178.2     -          178.2 
===============================  ========  =========  ============== 
 Ordinary Shares issued for 

  scrip dividend                 5.5       -          5.5 
===============================  ========  =========  ============== 
 Total Ordinary Shares issued 
  in the year                    183.7     -          183.7 
===============================  ========  =========  ============== 
 Costs of issue of Ordinary 
  Shares                         (1.4)     -          (1.4) 
===============================  ========  =========  ============== 
 Shareholders' equity at 31 
  March 2016                     1,376.6   597.3      1,973.9 
===============================  ========  =========  ============== 
 
 

Cash Flow Statement

For the year ended 31 March 2017

 
                                                       Year 
                                              Year      ended 
                                               ended    31 
                                               31       March 
                                               March    2016 
                                               2017     Restated* 
                                               GBPm     GBPm 
--------------------------------------------  -------  ---------- 
 Cash flows from operating activities 
--------------------------------------------  -------  ---------- 
 Profit before tax                            176.8    157.2 
--------------------------------------------  -------  ---------- 
 Adjustments for: 
============================================  =======  ========== 
 Investment income                            (178.6)  (158.8) 
============================================  =======  ========== 
 Operating cash flow before changes 
  in working capital                          (1.8)    (1.6) 
--------------------------------------------  -------  ---------- 
 Changes in working capital: 
============================================  =======  ========== 
 Increase in payables                         0.6      - 
============================================  =======  ========== 
 Cash flow from operating activities          (1.2)    (1.6) 
============================================  =======  ========== 
 Interest received on investments             108.2    98.5 
============================================  =======  ========== 
 Net cash from operating activities           107.0    96.9 
============================================  =======  ========== 
 Cash flows from investing activities 
============================================  =======  ========== 
 Purchases of investments                     (375.7)  (180.9) 
============================================  =======  ========== 
 Net cash used in investing activities        (375.7)  (180.9) 
============================================  =======  ========== 
 Cash flow from financing activities 
--------------------------------------------  -------  ---------- 
 Net proceeds from issue of share 
  capital                                     369.7    176.8 
============================================  =======  ========== 
 Distributions paid to Company shareholders   (100.6)  (93.0) 
============================================  =======  ========== 
 Net cash from financing activities           269.1    83.8 
============================================  =======  ========== 
 Net increase/(decrease) in cash and 
  cash equivalents                            0.4      (0.2) 
============================================  =======  ========== 
 Cash and cash equivalents at beginning 
  of year                                     0.5      0.7 
============================================  =======  ========== 
 Cash and cash equivalents at end 
  of year                                     0.9      0.5 
============================================  =======  ========== 
 

*Comparative information has been restated. See Note 2 for details.

The accompanying notes are an integral part of these financial statements.

Notes to the Financial Statements

1. Reporting entity

HICL Infrastructure Company Limited (the "Company") is a company domiciled in Guernsey, Channel Islands, whose shares are publicly traded on the London Stock Exchange. The financial statements of the Company as at and for the year ended 31 March 2017 comprise the Company only. Up to and including 31 March 2016 the Company consolidated three subsidiaries (HICL Infrastructure 1 S.a.r.l., HICL Infrastructure 2 S.a.r.l. and Infrastructure Investments Limited Partnership - together the "Corporate Subsidiaries" and each a "Corporate Subsidiary") which are no longer consolidated due to a change in IFRS 10 - see Note 2 (b) for details.

2. Key accounting policies

(a) Basis of preparation

The financial statements were approved and authorised for issue by the Board of Directors on 23 May 2017.

The financial statements, which give a true and fair view, have been prepared in compliance with the Companies (Guernsey) Law, 2008 and in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU") using the historical cost basis, except that the financial instruments classified at fair value through profit or loss are stated at their fair values. The financial statements are presented in Sterling, which is the Company's functional currency.

The preparation of financial statements, in conformity with IFRS as adopted by the EU, requires the Directors and advisers to make judgements, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expense. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The 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 if the revision affects only that year or the period of the revision and future periods if the revision affects both current and future periods. Note 3 shows critical accounting judgements, estimates and assumptions which have been applied in the preparation of these financial statements.

The Directors are of the opinion that the Company has all the typical characteristics of an investment entity and meets the three essential criteria as defined in IFRS 10 and therefore the Company continues to apply Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS27).

The three essential investment entity criteria met by the Company are:

It obtains funds from one or more investors for the purpose of providing these investors with professional investment management services;

It commits to its investors that its business purpose is to invest its funds solely for returns from capital appreciation, investment income or both; and

It measures and evaluates the performance of substantially all of its investments on a fair value basis.

(b) Change in accounting policy

The Company has applied Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS27) and in these financial statements it has also applied Investment Entities: Applying the Consolidation Exemption (Amendment to IFRS 10, IFRS 12 and IAS 28) - this amendment was issued in December 2014 and adopted by the EU in September 2016, and first applied by the Company in its interim financial statements for September 2016.

The effect of applying the latest amendment is that the Company cannot consolidate subsidiaries that are themselves judged to be investment entities and as a result the Corporate Subsidiaries are no longer consolidated but instead included in Investments at fair value through profit or loss.

The change in accounting has not affected the Profit for the year or Net assets of the Company in this year or in comparative periods.

A reconciliation for the financial statements for the current year comparing the current IFRS basis with the previous basis, which is designated the Investment Basis, is shown in Operational and Financial Review.

Comparatives

Below is a reconciliation for each of the Income Statement, Balance Sheet and Cash Flow Statement as reported originally for 31 March 2016 compared to the restated results for 31 March 2016 as well as a reconciliation for the Balance Sheet as reported originally for 31 March 2016 and 31 March 2015 compared to the restated results.

The movements shown in the adjustments column are all as a result of the adoption of Investment Entities: Applying the Consolidation Exemption (Amendment to IFRS 10, IFRS 12 and IAS 28). The impact on the financial statements of adopting the current IFRS basis, as opposed to the Investments Basis, can be summarised as follows:

Income Statement

As discussed in the Operational and Financial Review of the Strategic Report, Fund Expenses previously reported in the Consolidated Income Statement for 31 March 2016 included fees payable to the Investment Adviser (see Note 17 for further details). These expenses and various other costs are incurred by a Corporate Subsidiary whose results are no longer consolidated within the financial statements of the Company. As a consequence, Investment income recognised by the Company is net of these expenses and hence the restated Investment income is GBP24.0 million lower.

Balance Sheet

The increase in the Investments at fair value on the Balance Sheet is a result of now including the fair value of the Corporate Subsidiaries within this amount, including cash and working capital balances at the year end.

The reduction in Cash and cash equivalents is due to the Corporate Subsidiaries no longer being consolidated within the results of the Company. The Company's treasury function is undertaken by a Corporate Subsidiary, which receives distributions from the Company's underlying investment portfolio.

Cash Flow Statement

The Net cash from operating activities for the Company is lower on the restated basis because the only funds distributed to the Company are those to enable the Company to pay dividends and meet its sundry expenses.

 
 Restated Income Statement for     Original  Adjustments  Restated 
  the year ended 31 March 2016      GBPm      GBPm         GBPm 
---------------------------------  --------  -----------  -------- 
 Investment income                 182.8     (24.0)       158.8 
=================================  ========  ===========  ======== 
 Total income                      182.8     (24.0)       158.8 
=================================  ========  ===========  ======== 
 Fund expenses                     (23.3)    21.7         (1.6) 
=================================  ========  ===========  ======== 
 Profit before net finance costs 
  and tax                          159.5     (2.3)        157.2 
---------------------------------  --------  -----------  -------- 
 Finance costs                     (2.2)     2.2          - 
=================================  ========  ===========  ======== 
 Finance income                    0.1       (0.1)        - 
=================================  ========  ===========  ======== 
 Profit before tax                 157.4     (0.2)        157.2 
=================================  ========  ===========  ======== 
 Income tax expense                (0.2)     0.2          - 
=================================  ========  ===========  ======== 
 Profit for the period             157.2     -            157.2 
=================================  ========  ===========  ======== 
 
 Earnings per share - basic 
  and diluted (pence)              11.9      -            11.9 
---------------------------------  --------  -----------  -------- 
 
 
 Restated Balance Sheet As at            Original  Adjustments  Restated 
  31 March 2016                           GBPm      GBPm         GBPm 
---------------------------------------  --------  -----------  -------- 
 Non-current assets 
=======================================  ========  ===========  ======== 
 Investments at fair value through 
  profit or loss                         1,932.9   40.8         1,973.7 
=======================================  ========  ===========  ======== 
 Total non-current assets                1,932.9   40.8         1,973.7 
=======================================  ========  ===========  ======== 
 Current assets 
---------------------------------------  --------  -----------  -------- 
 Trade and other receivables              1.5       (1.4)        0.1 
---------------------------------------  --------  -----------  -------- 
 Other financial assets                  0.2       (0.2)        - 
=======================================  ========  ===========  ======== 
 Cash and cash equivalents               52.7      (52.2)       0.5 
=======================================  ========  ===========  ======== 
 Total current assets                    54.4      (53.8)       0.6 
=======================================  ========  ===========  ======== 
 Total assets                            1,987.3   (13.0)       1,974.3 
=======================================  ========  ===========  ======== 
 Current liabilities 
---------------------------------------  --------  -----------  -------- 
 Trade and other payables                (11.3)    10.9         (0.4) 
=======================================  ========  ===========  ======== 
 
   Other current financial liabilities   (2.1)     2.1          - 
=======================================  ========  ===========  ======== 
 
   Total current liabilities             (13.4)    13.0         (0.4) 
=======================================  ========  ===========  ======== 
 
   Total liabilities                     (13.4)    13.0         (0.4) 
=======================================  ========  ===========  ======== 
 
   Net assets                            1,973.9   -            1,973.9 
=======================================  ========  ===========  ======== 
 
   Equity 
---------------------------------------  --------  -----------  -------- 
 
   Ordinary Share capital                0.1       -            0.1 
---------------------------------------  --------  -----------  -------- 
 
   Share premium                         1,376.5   -            1,376.5 
=======================================  ========  ===========  ======== 
 
   Retained reserves                     597.3     -            597.3 
=======================================  ========  ===========  ======== 
 
   Total equity                          1,973.9   -            1,973.9 
=======================================  ========  ===========  ======== 
 
   Net assets per Ordinary Share 
   (pence)                               142.2     -            142.2 
=======================================  ========  ===========  ======== 
 
 
 Restated Balance Sheet As at          Original  Adjustments  Restated 
  1 April 2015                          GBPm      GBPm         GBPm 
-------------------------------------  --------  -----------  -------- 
 Non-current assets 
=====================================  ========  ===========  ======== 
 Investments at fair value through 
  profit or loss                       1,709.7   22.7         1,732.4 
=====================================  ========  ===========  ======== 
 Total non-current assets              1,709.7   22.7         1,732.4 
=====================================  ========  ===========  ======== 
 Current assets 
-------------------------------------  --------  -----------  -------- 
 Trade and other receivables            0.7       (0.6)        0.1 
-------------------------------------  --------  -----------  -------- 
 Other financial assets                1.9       (1.9)        - 
=====================================  ========  ===========  ======== 
 Cash and cash equivalents             33.5      (32.8)       0.7 
=====================================  ========  ===========  ======== 
 Total current assets                  36.1      (35.3)       0.8 
=====================================  ========  ===========  ======== 
 Total assets                          1,745.8   (12.6)       1,733.2 
=====================================  ========  ===========  ======== 
 Current liabilities 
-------------------------------------  --------  -----------  -------- 
 Trade and other payables              (12.3)    12.0         (0.3) 
=====================================  ========  ===========  ======== 
 Other current financial liabilities   (0.6)     0.6          - 
=====================================  ========  ===========  ======== 
 Total current liabilities             (12.9)    12.6         (0.3) 
=====================================  ========  ===========  ======== 
 Total liabilities                     (12.9)    12.6         (0.3) 
=====================================  ========  ===========  ======== 
 Net assets                            1,732.9   -            1,732.9 
=====================================  ========  ===========  ======== 
 Equity 
-------------------------------------  --------  -----------  -------- 
 Ordinary Share capital                0.1       -            0.1 
-------------------------------------  --------  -----------  -------- 
 Share premium                         1,194.2   -            1,194.2 
=====================================  ========  ===========  ======== 
 Retained reserves                     538.6     -            538.6 
=====================================  ========  ===========  ======== 
 Total equity attributable to 
  equity shareholders of the 
  Company                              1,732.9   -            1,732.9 
=====================================  ========  ===========  ======== 
 Total equity                          1,732.9   -            1,732.9 
=====================================  ========  ===========  ======== 
 Net assets per Ordinary Share 
  (pence)                              136.7     -            136.7 
=====================================  ========  ===========  ======== 
 
 
 Restated Cash Flow Statement 
  for the year ended 31 March           Original  Adjustments  Restated 
  2016                                   GBPm      GBPm         GBPm 
--------------------------------------  --------  -----------  -------- 
 Cash flows from operating activities 
--------------------------------------  --------  -----------  -------- 
 Profit before tax                      157.4     (0.2)        157.2 
--------------------------------------  --------  -----------  -------- 
 Adjustments for: 
--------------------------------------  --------  -----------  -------- 
 Investment income                      (182.8)   24.0         (158.8) 
--------------------------------------  --------  -----------  -------- 
 Finance costs                          2.2       (2.2)        - 
--------------------------------------  --------  -----------  -------- 
 Finance income                         (0.1)     0.1          - 
======================================  ========  ===========  ======== 
 Operator acquisition investment 
  fees                                  1.5       (1.5)        - 
======================================  ========  ===========  ======== 
 Operating cash flow before 
  changes in working capital            (21.8)    20.2         (1.6) 
--------------------------------------  --------  -----------  -------- 
 Changes in working capital: 
--------------------------------------  --------  -----------  -------- 
 Decrease in receivables                (0.8)     0.8          - 
======================================  ========  ===========  ======== 
 Decrease in payables                   (1.0)     1.0          - 
======================================  ========  ===========  ======== 
 Cash flow from operations              (23.6)    22.0         (1.6) 
--------------------------------------  --------  -----------  -------- 
 Interest received on bank deposits     0.1       (0.1)        - 

--------------------------------------  --------  -----------  -------- 
 Interest paid                          (1.7)     1.7          - 
--------------------------------------  --------  -----------  -------- 
 Corporation tax                        (0.1)     0.1          - 
--------------------------------------  --------  -----------  -------- 
 Interest received on investments       88.5      10.0         98.5 
--------------------------------------  --------  -----------  -------- 
 Dividends received                     26.7      (26.7)       - 
--------------------------------------  --------  -----------  -------- 
 Fees and other operating income        7.8       (7.8)        - 
======================================  ========  ===========  ======== 
 Loanstock and equity repayments 
  received                              6.0       (6.0)        - 
======================================  ========  ===========  ======== 
 Net cash from operating activities     103.7     (6.8)        96.9 
======================================  ========  ===========  ======== 
 Cash flows from investing activities 
--------------------------------------  --------  -----------  -------- 
 Proceeds from sale of investments      8.9       (8.9)        - 
======================================  ========  ===========  ======== 
 Purchases of investments               (172.9)   (8.0)        (180.9) 
======================================  ========  ===========  ======== 
 Net cash used in investing 
  activities                            (164.0)   (16.9)       (180.9) 
======================================  ========  ===========  ======== 
 Cash flows from financing activities 
--------------------------------------  --------  -----------  -------- 
 Proceeds from issue of share 
  capital                               176.8     -            176.8 
--------------------------------------  --------  -----------  -------- 
 Proceeds from issue of loans 
  and borrowings                        61.1      (61.1)       - 
--------------------------------------  --------  -----------  -------- 
 Repayment of loans and borrowings      (61.1)    61.1         - 
======================================  ========  ===========  ======== 
 Distributions paid to Company 
  shareholders                          (93.0)    -            (93.0) 
======================================  ========  ===========  ======== 
 Net cash from/(used in) financing 
  activities                            83.8      -            83.8 
======================================  ========  ===========  ======== 
 Net increase/(decrease) in 
  cash and cash equivalents             23.5      (23.7)       (0.2) 
======================================  ========  ===========  ======== 
 Cash and cash equivalents at 
  beginning of period                   33.5      (32.8)       0.7 
======================================  ========  ===========  ======== 
 Exchange gains on cash                 (4.3)     4.3          - 
======================================  ========  ===========  ======== 
 Cash and cash equivalents at 
  end of period                         52.7      (52.2)       0.5 
======================================  ========  ===========  ======== 
 

Going concern

The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in this report. The financial position of the Company, its cash flows, and liquidity position are described in Operational and Financial Review and Valuation of Portfolio. In addition, Notes 1 to 4 of the financial statements include the Company's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.

The Company through its Corporate Subsidiaries has considerable financial resources together with long-term contracts with various public sector customers and suppliers across a range of infrastructure projects. The financing for these projects is non-recourse to the Company. As a consequence, the Directors believe that the Company is well placed to manage its business risks.

The Directors believe that the Company has adequate resources to continue in operational existence for the next 12 months. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

New standards effective for the current year

As per the above, the Company has applied Investment Entities: Applying the Consolidation Exemption (Amendment to IFRS 10, IFRS 12 and IAS 28) for the first time. Additional standards and amendments to standards that became effective during the period are listed below. These have no material impact on the reported performance or financial statements of the Company.

Annual improvements to IFRSs 2012-2014 cycle (effective date 1 January 2016)

Amendments to IFRS 11 Accounting for Acquisitions of interest in Joint Operations (1 January 2016)

Amendments to IAS 1 Disclosure initiative (1 January 2016)

Standards not yet applied

The Company notes the following amended and improved published standards and interpretations which were in issue at the date of authorisation of these Financial Statements. These are not expected to have a material impact on the reported performance or financial statements of the Company following endorsement.

IFRS 9 Financial Instruments (effective for annual periods beginning on or after 1 January 2018)

IFRS 15 Revenue from contracts with customers (effective for annual periods beginning on or after 1 January 2018)

IFRS 16 Leases (effective for annual periods beginning on or after 1 January 2019)

(c) Financial instruments

Financial assets and liabilities are recognised on the Company's Balance Sheet when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are de-recognised when the contractual rights to the cash flows from the instrument expire or the asset or liability is transferred and the transfer qualifies for de-recognition in accordance with IAS 39 'Financial instruments: Recognition and measurement'.

(i) Non-derivative financial instruments

Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equivalents, loans and borrowings and trade and other payables.

Non-derivative financial instruments are recognised initially at fair value including directly attributable transaction costs, except for financial instruments measured at fair value through profit or loss. Subsequent to initial recognition, non-derivative financial instruments are measured as described below.

Investments in equity and debt securities

Investments in the equity and loanstock of entities engaged in infrastructure activities which are not classified as subsidiaries of the Company or which are subsidiaries not consolidated in the Company, are designated at fair value through profit or loss since the Company manages these investments and makes purchase and sale decisions based on their fair value.

The initial difference between the transaction price and the fair value, derived from using the discounted cash flows methodology at the date of acquisition, is recognised only when observable market data indicates there is a change in a factor that market participants would consider in setting the price of that investment. After initial recognition, Investments at fair value through profit or loss are measured at fair value with changes recognised in the Income Statement.

Other

Other non-derivative financial instruments are measured at amortised cost using the effective interest method less any impairment losses.

(ii) Fair values

Fair values are determined using the income approach, which discounts the expected cash flows attributable to each asset at an appropriate rate to arrive at fair values. In determining the appropriate discount rate, regard is had to relevant long-term government bond yields, the specific risks of each investment and the evidence of recent transactions.

(iii) Investment income

Income from investments is recognised in the Income Statement as it accrues on from the Company's direct subsidiary. Gains on investments relates solely to the investments held at fair value.

(d) Share capital and share premium

Ordinary Shares are classified as equity. Costs associated with the establishment of the Company or directly attributable to the issue of new shares that would otherwise have been avoided are written-off against the balance of the share premium account.

(e) Cash and cash equivalents

Cash and cash equivalents comprises cash balances, deposits held at call with banks and other short-term, highly liquid investments with original maturities of three months or less. Cash equivalents, including demand deposits, are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.

(f) Income tax

Under the current system of taxation in Guernsey, the Company itself is exempt from paying taxes on income, profits or capital gains. The profits of each project company are subject to corporation tax in the country the project is located in. Sensitivity of the Company's portfolio to changes in tax rates are provided in Note 4 and impacts are reflected in the fair value of underlying investments.

(g) Foreign exchange gains and losses

Transactions entered into by the Company in a currency other than its functional currency are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the balance sheet date. Exchange differences arising on the re-translation of unsettled monetary assets and liabilities are recognised immediately in the Income Statement.

(h) Segmental and geographical reporting

The Chief Operating Decision Maker (the "CODM") is of the opinion that the Company is engaged in a single segment of business, being investment in infrastructure which is currently predominately in private finance initiatives and public private partnership companies. The Company does not derive revenue from Guernsey. The Company has no single major customer.

The financial information used by the CODM to allocate resources, assess performance and manage the Company presents the business as a single segment comprising a homogeneous portfolio.

(i) Expenses

All expenses are accounted for on an accruals basis. The Company's investment advisory and administration fees, finance costs and all other expenses are charged through the Income Statement.

(j) Dividends payable

Dividends payable to the Company's shareholders are recognised when they become legally payable. In the case of interim dividends, this is when they are paid. In the case of final dividends, this is when they are approved by the shareholders at the Annual General Meeting. For scrip dividends, where the Company issues shares with an equal value to the cash dividend amount as an alternative to the cash dividend, a credit to equity is recognised when the shares are issued.

3. Critical accounting judgements, estimates and assumptions

The preparation of financial statements in accordance with IFRS as adopted by the EU requires management to make judgements, estimates and assumptions in certain circumstances that affect reported amounts. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below.

Investments at fair value through profit or loss

Judgements

By virtue of the Company's status as an investment entity and the exemption provided by IAS 28 and IFRS 11 as well as the adoption of Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27), investments are designated upon initial recognition to be accounted for at fair value through profit or loss.

Estimates

The Company recognises the investment in its single directly owned holding company at fair value which includes the fair value of each of the individual project companies and holding companies in which the Company holds an indirect investment. Fair values for those investments for which a market quote is not available are determined using the income approach which discounts the expected cash flows at the appropriate rate. In determining the discount rate, regard is had to relevant long-term government bond yields, specific risks and the evidence of recent transactions. The Directors have satisfied themselves that PPP or similar investments share the same investment characteristics and as such constitute a single asset class for IFRS 7 disclosure purposes.

The weighted average discount rate applied in the March 2017 valuation was 7.4% (2016: 7.5%). The discount rate is considered one of the most significant unobservable inputs through which an increase or decrease would have a material impact on the fair value of the Investments at fair value through profit or loss.

The other material impacts on the measurement of fair value are inflation rates, deposit rates and tax rates which are further discussed in Note 4 and include sensitivities to these key judgements.

4. Financial instruments

Fair value estimation

The following summarises the significant methods and assumptions used in estimating the fair values of financial instruments:

Financial instruments

The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date.

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Company uses the income approach which discounts the expected cash flows attributable to each asset at an appropriate rate to arrive at fair values. In determining the discount rate, regard is had to relevant long-term government bond yields, the specific risks of each investment and the evidence of recent transactions.

Note 2 discloses the methods used in determining fair values on a specific asset or liability basis. Where applicable, further information about the assumptions used in determining fair value is disclosed in the Notes specific to that asset or liability.

Classification of financial instruments

 
                                                     31 
                                            31         March 
                                              March    2016 
                                              2017    (Restated) 
                                             GBPm     GBPm 
------------------------------------------  -------  ----------- 
 Financial assets 
==========================================  =======  =========== 
    Investments designated at fair value 
     through profit or loss                 2,419.4  1,973.7 
==========================================  =======  =========== 
 Financial assets at fair value through 
  profit or loss                            2,419.4  1,973.7 
==========================================  =======  =========== 
   Trade and other receivables              0.1      0.1 
==========================================  =======  =========== 
   Cash and cash equivalents                0.9      0.5 
==========================================  =======  =========== 
 Financial assets - loans and receivables   1.0      0.6 
==========================================  =======  =========== 
 Financial liabilities 
==========================================  =======  =========== 
   Trade and other payables                 (1.0)    (0.4) 
==========================================  =======  =========== 
 Financial liabilities - payables           (1.0)    (0.4) 
==========================================  =======  =========== 
 

The Directors believe that the carrying values of all financial instruments are equal to their fair values.

Fair value hierarchy

The fair value hierarchy is defined as follows:

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)

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

 
                         As at 
                          31 March 2017 
-----------------------  ------------------------------ 
                         Level  Level  Level 
                          1      2      3       Total 
                          GBPm   GBPm   GBPm     GBPm 
-----------------------  -----  -----  -------  ------- 
 Investments at fair 
  value through profit 
  or loss (Note 13)      -      -      2,419.4  2,419.4 
=======================  =====  =====  =======  ======= 
                         -      -      2,419.4  2,419.4 
=======================  =====  =====  =======  ======= 
 
 
                         As at 
                          31 March 2016 
                          Restated 
-----------------------  ------------------------------ 
                         Level  Level  Level 
                          1      2      3       Total 
                          GBPm   GBPm   GBPm     GBPm 
-----------------------  -----  -----  -------  ------- 
 Investments at fair 
  value through profit 
  or loss (Note 13)      -      -      1,973.7  1,973.7 
=======================  =====  =====  =======  ======= 
                         -      -      1,973.7  1,973.7 
=======================  =====  =====  =======  ======= 
 

There were no transfers between Level 1, 2 or 3 during the year (2016: None). A reconciliation of the movement in level 3 assets is disclosed in Note 13.

Level 3

Valuation methodology

The Directors have satisfied themselves as to the methodology used, the discount rates and key assumptions applied, and the valuation. All equity investments in PPP or similar projects are valued using a discounted cash flow methodology. The A13 investment in listed senior bonds is valued based on the quoted market price at the balance sheet date. The valuation techniques and methodologies have been applied consistently with those used in the prior year. This valuation uses key assumptions which are benchmarked from a review of recent comparable market transactions in order to arrive at a fair market value. Valuations are performed on a six monthly basis every September and March for all investments.

The Company records the fair value of the single directly owned top holding company by calculating and aggregating the fair value of each of the individual project companies and holding companies in which the Company holds an indirect investment.

For the valuation of investments, the Directors have also obtained an independent opinion from a third party with experience in valuing this type of investments, supporting the reasonableness of the valuation.

Investments - The key valuation assumptions and sensitivities for the valuation

The following economic assumptions were used in the discounted cash flow valuations:

 
                                          31 March            31 March 
                                           2017                2016 
------------------------  --------------  ------------------  ------------------ 
 Inflation Rates           UK (RPI and    2.75% p.a.          2.75% p.a. 
                            RPIx) 
========================  ==============  ==================  ================== 
                           Eurozone       1.0% p.a.           1.0% p.a. 
                            (CPI)          to 2019,            to 2018, 
                                           2.0% p.a.           2.0% p.a. 
                                            thereafter          thereafter 
========================  ==============  ==================  ================== 
                           Canada (CPI)   2.0% p.a.           2.0% p.a. 
                          ==============  ==================  ================== 
                           USA (CPI)      2.0% p.a.           N/A 
                          ==============  ==================  ================== 
                           Australia      2.5% p.a.           2.5% p.a. 
                            (CPI) 
========================  ==============  ==================  ================== 
 Deposit Rates             UK             1.0% p.a.           1.0% p.a. 
                                           to March            to March 
                                           2021,               2020, 
                                            2.0% p.a.           2.5% p.a. 
                                            thereafter          thereafter 
========================  ==============  ==================  ================== 
                           Eurozone       1.0% p.a.           1.0% p.a. 
                                           to March            to March 
                                           2021,               2020, 
                                            2.0% p.a.           2.5% p.a. 
                                            thereafter          thereafter 
========================  ==============  ==================  ================== 
                           Canada         1.0% p.a.           1.0% p.a. 
                                           to March            to March 
                                           2021,               2020, 
                                            2.0% p.a.           2.5% p.a. 
                                            thereafter          thereafter 
                          ==============  ==================  ================== 
                           USA            1.0% p.a.           N/A 
                                           with a gradual 
                                           increase 
                                           to 2.0% 
                          ==============  ==================  ================== 
                           Australia      2.6% p.a.           2.6% p.a. 
                                           with a gradual      with a gradual 
                                           increase            increase 
                                           to 3.0% long-term   to 3.0% long-term 
========================  ==============  ==================  ================== 
 Foreign Exchange Rates    CAD/GBP        0.60                0.54 
========================  ==============  ==================  ================== 
  EUR/GBP                                 0.85                0.79 
 =======================================  ==================  ================== 
                           USD/GBP        0.80                N/A 
                          ==============  ==================  ================== 
  AUD/GBP                                 0.61                0.53 
 =======================================  ==================  ================== 
 Tax Rates                 UK             19% to March        20% to March 
                                           2020,               2017, 
                                           17% thereafter      19% to March 
                                                                2020, 
                                                               18% thereafter 
========================  ==============  ==================  ================== 
                           Eurozone       Various (no         Various (no 
                                           change apart        change) 
                                           from French 
                                           tax rate 
                                           reducing 
                                           from 33.3% 
                                           to 28% by 
                                           2019) 
========================  ==============  ==================  ================== 
                           USA            35% Federal         N/A 
                                           & 
                                           4.5% Colorado 
                                           State 
                          ==============  ==================  ================== 
                           Canada         26% and 27%         26% and 27% 
                          ==============  ==================  ================== 
  Australia                               30%                 30% 
 =======================================  ==================  ================== 
 GDP                       UK             2.0%                N/A 
========================  ==============  ==================  ================== 
  Eurozone                                1.8%                N/A 
 =======================================  ==================  ================== 
  USA                                     2.5%                N/A 
 =======================================  ==================  ================== 
 

Discount rates

Judgement is used in arriving at the appropriate discount rate for each investment based on the Investment Adviser's knowledge of the market, taking into account intelligence gained from bidding activities, discussions with financial advisers knowledgeable in these markets and publicly available information on relevant transactions.

The discount rates used for valuing each infrastructure investment vary on a project-by-project basis and take into account risks and opportunities associated with the project earnings (e.g. predictability and covenant of the concession income), all of which may be differentiated by project phase, jurisdiction and market participants' appetite for these risks.

The discount rates used for valuing the projects in the portfolio are as follows:

 
                               Weighted 
 Period ending       Range      average 
-------------------  --------  -------- 
                     7.0% to 
 31 March 2016        10.1%    7.5% 
===================  ========  ======== 
                     6.5% to 
 30 September 2016    9.9%     7.3% 
===================  ========  ======== 
                     5.6% 
                      to 
 31 March 2017        9.8%     7.4% 
===================  ========  ======== 
 

A change to the weighted average rate of 7.4% by plus or minus 0.5% has the following effect on the Investments at fair value through profit or loss and NAV per Ordinary Share.

 
                                                 Investments 
                                                  at 
                                                  fair 
                                                  value 
                                                  through 
                                     -0.5%        profit      +0.5% 
 Discount rate                        change      or loss      change 
-----------------------------------  ----------  -----------  ---------- 
 March 2016 (Restated (2) )          +GBP101.5m  GBP1,973.7m  -GBP93.7m 
===================================  ==========  ===========  ========== 
 March 2017                          +GBP121.5m  GBP2,419.4m  -GBP111.2m 
===================================  ==========  ===========  ========== 
 Implied change in NAV per Ordinary  +7.5        149.0        -6.9 
  Share1 - March 2017 (March          pence       pence        pence 
  2016) 
 
                                      (+7.3 
                                      pence)      (142.2       (-6.7 
                                                  pence)       pence) 
===================================  ==========  ===========  ========== 
 

1 NAV per Ordinary Share based on 1,623 million Ordinary Shares at 31 March 2017

2 Comparative information has been restated. See Note 2 for details.

Inflation rates

All projects in the portfolio have contractual income streams with public sector clients, which are rebased every year for inflation. UK projects tend to use either RPI (Retail Price Index) or RPIx (RPI excluding mortgage payments), and revenues are either partially or totally indexed (depending on the contract and the nature of the project's financing).

A change to the inflation rate by plus or minus 0.5% has the following effect on the Investments at fair value through profit or loss and NAV per Ordinary Share:

 
                                                 Investments 
                                                  at 
                                                  fair 
                                                  value 
                                     -0.5%        through     +0.5% 
                                      p.a.        profit       p.a. 
 Inflation assumption                 change      or loss      change 
-----------------------------------  ----------  -----------  ---------- 
 March 2016 (Restated (3) )          -GBP65.3m   GBP1,973.7m  +GBP72.0m 
===================================  ==========  ===========  ========== 
 March 2017                          -GBP90.9m   GBP2,419.4m  +GBP100.4m 
===================================  ==========  ===========  ========== 
 Implied change in NAV per Ordinary  -5.6 pence  149.0        +6.2 pence 
  Share - March 2017                  (-4.7       pence        (+5.2 
  (March 2016)                        pence)      (142.2       pence) 
                                                  pence) 
===================================  ==========  ===========  ========== 
 

1 Analysis is based on the Company's 25 largest investments, pro-rata for the whole portfolio

2 NAV per Ordinary Share based on 1,623 million Ordinary Shares at 31 March 2017

3 Comparative information has been restated. See Note 2 for details.

Deposit rates

Each project in the portfolio has cash held in bank deposits, which is a requirement of their senior debt financing. As at 31 March 2017 cash deposits for the portfolio were earning interest at a rate of 0.2% per annum on average.

Each project's interest costs are either inflation-linked or fixed rate. This is achieved through fixed rate or inflation-linked bonds, or bank debt which is hedged with an interest rate swap. A project's sensitivity to interest rates relates to the cash deposits required as part of the project funding.

A change to the deposit rate by plus or minus 0.5% has the following effect on the Investments at fair value through profit or loss and NAV per Ordinary Share:

 
                                                 Investments 
                                                  at 
                                                  fair 
                                                  value 
                                     -0.5%        through     +0.5% 
                                      p.a.        profit       p.a. 
 Cash deposit rate                    change      or loss      change 
-----------------------------------  ----------  -----------  ---------- 
 March 2016 (Restated (3) )          -GBP24.5m   GBP1,973.7m  +GBP23.2m 
===================================  ==========  ===========  ========== 
 March 2017                          -GBP28.6m   GBP2,419.4m  +GBP27.5m 
===================================  ==========  ===========  ========== 
 Implied change in NAV per Ordinary  -1.8 pence  149.0        +1.7 pence 
  Share(1) - March 2017               (-1.8       pence        (+1.7 
  (March 2016)                        pence)      (142.2       pence) 
                                                  pence) 
===================================  ==========  ===========  ========== 
 

1 This analysis is based on the Company's 25 largest investments, pro-rata for the whole portfolio

2 NAV per Ordinary Share based on 1,623 million Ordinary Shares at 31 March 2017

3 Comparative information has been restated. See Note 2 for details.

Gross Domestic Product

The portfolio has 3 projects (2016: nil) where revenues are positively correlated to changes in Gross Domestic Product. The projects are A63 Motorway, M1-A1 Road and Northwest Parkway which together comprise 9.8% of the Investments at fair value through profit or loss.

A change to the Gross Domestic Product by plus or minus 0.5% has the following effect on the Investments at fair value through profit or loss and NAV per Ordinary Share:

 
                                                 Investments 
                                                  at 
                                                  fair 
                                                  value 
                                     -0.5%        through     +0.5% 
 Gross Domestic Product               p.a.        profit       p.a. 
  (GDP)                               change      or loss      change 
-----------------------------------  ----------  -----------  ---------- 
 March 2016 (Restated (2) )          GBP0m       GBP1,973.7m  GBP0m 
===================================  ==========  ===========  ========== 
 March 2017                          -GBP49.5m   GBP2,419.4m  +GBP46.5m 
===================================  ==========  ===========  ========== 
 Implied change in NAV per Ordinary  -3.0 pence  149.0        +2.9pence 
  Share - March 2017                  (0 pence)   pence        (0 pence) 
  (March 2016)                                    (142.2 
                                                  pence) 
===================================  ==========  ===========  ========== 
 

1 NAV per Ordinary Share based on 1,623 million Ordinary Shares at 31 March 2017

2 Comparative information has been restated. See Note 2 for details.

Tax Rates

The profits of each project company are subject to corporation tax in the country the project is located in. The UK Finance Act 2016 enacted a reduction to the corporation tax rate to 17% effective from April 2020, which is assumed in the valuation of the portfolio.

A change to the tax rate by plus or minus 1.0% has the following effect on the Investments at fair value through profit or loss and NAV per Ordinary Share:

 
                                                 Investments 
                                                  at 
                                                  fair 
                                                  value 
                                     -1%          through     +1% 
                                      p.a.        profit       p.a. 
 Tax rate assumption                  change      or loss      change 
-----------------------------------  ----------  -----------  --------- 
 March 2016 (Restated (3) )          +GBP13.5m   GBP1,973.7m  -GBP13.4m 
===================================  ==========  ===========  ========= 
 March 2017                          +GBP14.8m   GBP2,419.4m  -GBP14.3m 
===================================  ==========  ===========  ========= 
 Implied change in NAV per Ordinary  +0.9 pence  149.0        0.9 pence 
  Share - March 2017                  (+1.0       pence        (-1.0 
  (March 2016)                        pence)      (142.2       pence) 
                                                  pence) 
===================================  ==========  ===========  ========= 
 

1 This analysis is based on the Company's 25 largest investments, pro-rata for the whole portfolio

2 NAV per Ordinary Share based on 1,623 million Ordinary Shares at 31 March 2017

3 Comparative information has been restated. See Note 2 for details.

Risk management

Market risk

Returns from the Company's investments are affected by the price at which they are acquired. The value of these investments will be a function of the discounted value of their expected future cash flows and as such will vary with, inter alia, movements in interest rates, market prices and the competition for such assets.

Financial risk management

The objective of the Company's financial risk management is to manage and control the risk exposures of its investment portfolio. The Board of Directors has overall responsibility for overseeing the management of risks, including financial risks, however the review and management of financial risks are delegated to the Investment Adviser and the Operator which has documented procedures designed to identify, monitor and manage the financial risks to which the Company is exposed. This Note presents information about the Company's exposure to financial risks, its objectives, policies and processes for managing risk and the Company's management of its financial resources.

The Company owns a portfolio of investments predominantly in the subordinated loanstock and equity of project finance companies. These companies are structured at the outset to minimise financial risks where possible, and the Investment Adviser and Operator primarily focus their risk management on the direct financial risks of acquiring and holding the portfolio but continue to monitor the indirect financial risks of the underlying projects through representation, where appropriate, on the boards of the project companies and the receipt of regular financial and operational performance reports.

Interest rate risk

The Company invests indirectly in subordinated loanstock of infrastructure project companies, usually with fixed interest rate coupons. Where floating rate debt is owned the primary risk is that the Company's cash flows will be subject to variation depending upon changes to base interest rates. The portfolio's cash flows are continually monitored and re-forecasted both over the near future (five year time horizon) and the long term (over whole period of projects' concessions) to analyse the cash flow returns from investments. The Company has made limited use of borrowings at Corporate Subsidiary level to finance the acquisition of investments and the forecasts are used to monitor the impact of changes in borrowing rates against cash flow returns from investments as increases in borrowing rates will reduce net interest margins.

The Company's policy is to ensure that interest rates are sufficiently hedged, when entering into material medium/long-term borrowings, typically via a Corporate Subsidiary, to protect the Company and Corporate Subsidiary's net interest margins from significant fluctuations in interest rates. This may include engaging in interest rate swaps or other interest rate derivative contracts.

The Company has an indirect exposure to changes in interest rates through its investment in infrastructure project companies, which are financed by senior debt. Senior debt financing of project companies is generally either through floating rate debt, fixed rate bonds or index linked bonds. Where senior debt is floating rate, the projects typically have concession length hedging arrangements in place, which are monitored by the project companies' managers, finance parties and boards of directors. Floating rate debt is hedged using fixed floating interest rate swaps.

Inflation risk

The infrastructure project companies in which the Company invests are generally structured so that contractual income and costs are either wholly or partially linked to specific inflation where possible to minimise the risks of mismatch between income and costs due to movements in inflation indexes. The Company's overall cash flows vary with inflation, although they are not directly correlated as not all flows are indexed. The effects of these inflation changes do not always immediately flow through to the Company's cash flows, particularly where a project's loanstock debt carries a fixed coupon and the inflation changes flow through by way of changes to dividends in future periods. The sensitivity of the portfolio valuation to inflation is also shown above within Note 4.

Currency risk

The Company monitors its foreign exchange exposures using its near-term and long-term cash flow forecasts. Its policy is to use foreign exchange hedging to provide protection against the effect of exchange rate fluctuations on the level of Sterling distributions that the Company expects to receive over the medium term, where considered appropriate. This may involve the use of forward exchange and other currency hedging contracts at Corporate Subsidiary level, as well as the use of Euro, Canadian dollar, Australian dollar, US dollar and other currency denominated borrowings via a Corporate Subsidiary. The Company at 31 March 2017 hedged its currency exposure through Euro, Canadian dollar, US dollar and Australian dollar forward contracts. This has reduced the volatility in the NAV from foreign exchange movements.

The hedging policy is designed to provide confidence in the near-term yield and to limit NAV per share sensitivity to no more than 1% for a 10% foreign exchange movement.

A change to foreign currency/Sterling exchange by plus or minus 5.0% has the following effect on the Net Asset Value and NAV per Ordinary share:

 
                                                 Net 
 Foreign Exchange                    -5%          Asset       +5% 
  sensitivities                       change      Value        change 
-----------------------------------  ----------  -----------  ---------- 
 March 2016 (Restated (3) )          -GBP5.5m    GBP1,973.9m  +GBP5.5m 
===================================  ==========  ===========  ========== 
 March 2017                          -GBP4.8m    GBP2,419.4m  +GBP4.8m 
===================================  ==========  ===========  ========== 
 Implied change in NAV per Ordinary  -0.3 pence  149.0        +0.3 pence 
  Share - March 2017                  (-0.4       pence        (+0.4 
  (March 2016)                        pence)      (142.2       pence) 
                                                  pence) 
===================================  ==========  ===========  ========== 
 

1 Sensitivities include effect of foreign exchange hedging contracts

2 NAV per Ordinary Share based on 1,623 million Ordinary Shares at 31 March 2017

3 Comparative information has been restated. See Note 2 for details.

Credit risk

Credit risk is the risk that a counterparty of the Company will be unable or unwilling to meet a commitment that it has entered into with the Company.

The Company's key direct counterparties are the project companies in which it makes investments. The Company's near term cash flow forecasts are used to monitor the timing of cash receipts from project counterparties. Underlying the cash flow forecasts are project company cash flow models which are regularly updated by project companies and provided to the Operator, for the purposes of demonstrating the projects' ability to pay interest and dividends based on a set of detailed assumptions. Many of the Company's investment and subsidiary entities receive revenue from government departments and public sector or local authority clients. Therefore a significant portion of the Company's investments' revenue is with counterparties of good financial standing.

The Company is also reliant on each project's sub-contractors continuing to perform their service delivery obligations such that revenues to projects are not disrupted. The Operator has a sub-contractor counterparty monitoring procedure in place.

The credit standing of sub-contractors is reviewed, and the risk of default estimated for each significant counterparty position. Monitoring is ongoing and period end positions are reported to the Board on a quarterly basis. The Company's largest credit risk exposure to a project at 31 March 2017 was to the Northwest Parkway project (6% of investments at fair value) and the largest sub-contractor counterparty risk exposure was to subsidiaries of the Carillion group which provided facilities management services in respect of 17% of the investments at fair value.

The Company is subject to credit risk on its loans, receivables, cash and deposits. The Company's cash and deposits are held with well-known banks. The credit quality of loans and receivables within the investment portfolio is based on the financial performance of the individual portfolio companies. For those assets that are not past due, it is believed that the risk of default is small and capital repayments and interest payments will be made in accordance with the agreed terms and conditions of the investment.

The Company's maximum exposure to credit risk over financial assets is the carrying value of those assets in the Balance Sheet. The Company does not hold any collateral as security.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient financial resources and liquidity to meets its liabilities when due. The Company ensures it maintains adequate reserves and its Corporate Subsidiaries have sufficient banking facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Company investments are predominantly funded by share capital.

The Company's investments are generally in private companies in which there is no listed market and therefore such investment would take time to realise and there is no assurance that the valuations placed on the investments would be achieved from any such sale process.

The Company's investments have third party borrowings which rank senior to the Company's own investments into the companies. This senior debt is structured such that, under normal operating conditions, it will be repaid within the expected life of the projects. Debt raised by the investment companies from third parties is without recourse to the Company.

The Company's investments may include obligations to make future investment amounts. These obligations will typically be supported by standby letters of credit, issued by the Company's bankers in favour of the senior lenders to the investment companies. Such investment obligations are met from the Company's cash resources when they fall due. Investment obligations totalled GBP32.5 million (2016: GBP97.4 million) and the Company also has a contingent commitment of EUR16.8 million at March 2017 (2016: EUR16.8 million) (See Note 18).

Unconsolidated subsidiaries are subject to contractual agreements that may impose temporary restrictions on their ability to distribute cash. Such restrictions are not deemed significant in the context of the Company's overall liquidity.

The table below analyses the Company's financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date.

 
                            Less     Between   Between 
                             than     1 and     2 and    More than 
                             1 year   2 years   5 years   5 years 
 31 March 2017               GBPm     GBPm      GBPm      GBPm 
--------------------------  -------  --------  --------  --------- 
 Trade and other payables   1.0      -         -         - 
==========================  =======  ========  ========  ========= 
 Total                      1.0      -         -         - 
==========================  =======  ========  ========  ========= 
 
 
                            Less     Between   Between 
                             than     1 and     2 and    More than 
                             1 year   2 years   5 years   5 years 
 31 March 2016               GBPm     GBPm      GBPm      GBPm 
--------------------------  -------  --------  --------  --------- 
 Trade and other payables   0.4      -         -         - 
==========================  =======  ========  ========  ========= 
 Total                      0.4      -         -         - 
==========================  =======  ========  ========  ========= 
 

Capital management

The Company at 31 March 2017 had a GBP300 million revolving acquisition facility via a Corporate Subsidiary which had no cash drawings at year end. Further equity raisings are considered when debt drawings are at an appropriate level. The proceeds from the share issues are used to repay debt and to fund future investment commitments.

The Company makes prudent use of its available leverage. Under the Articles the Company's outstanding borrowings, including any financial guarantees to support outstanding subscription obligations but excluding internal Company borrowings of the Company's underlying investments, are limited to 50% of the Adjusted Gross Asset Value of its investments and cash balances at any time.

The ratio of the debt of the Company and the Corporate subsidiaries, to Adjusted Gross Asset Value at the end of the year was as follows:

 
                                 31 March  31 March 
                                  2017      2016 
                                  GBPm      GBPm 
-------------------------------  --------  -------- 
 Outstanding drawings 
-------------------------------  --------  -------- 
 Bank borrowings                 -         - 
===============================  ========  ======== 
 Letter of credit facility       30.9      36.6 
===============================  ========  ======== 
                                 30.9      36.6 
-------------------------------  --------  -------- 
 Adjusted Gross Asset Value 
-------------------------------  --------  -------- 
 Portfolio valuation (Note 13)   2,380.0   2,030.3 
===============================  ========  ======== 
 Cash and cash equivalents       82.2      52.7 
===============================  ========  ======== 
                                 2,462.2   2,083.0 
===============================  ========  ======== 
 Borrowing ratio                 1.3%      1.8% 
===============================  ========  ======== 
 

From time to time the Company issues its own shares to the market; the timing of these issuances depends on market prices.

In order to assist in the narrowing of any discount to the Net Asset Value at which the Ordinary Shares may trade from time to time the Company may, at the sole discretion of the Directors:

make market purchases of up to 14.99% per annum of its issued Ordinary Shares; and

make tender offers for the Ordinary Shares.

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

5. Geographical analysis

The tables below analyse the revenue and investments at fair value by the different regions the Company has indirect investments in.

 
 March                                            North 
  2017                    UK           Europe      America   Australia  Total 
------------------------  -----------  ---------  ---------  ---------  ----------- 
 Revenue                  GBP129.5m    GBP32.7m   GBP6.8m    GBP9.6m    GBP178.6m 
========================  ===========  =========  =========  =========  =========== 
 % of Total Revenue       78%          18%        3%         6%         100% 
========================  ===========  =========  =========  =========  =========== 
 Investments at           GBP1,921.6m  GBP224.0m  GBP190.5m  GBP83.3m   GBP2,419.4m 
  fair value through 
  profit and loss 
========================  ===========  =========  =========  =========  =========== 
 % of Total Investments   80%          9%         8%         3%         100% 
========================  ===========  =========  =========  =========  =========== 
 
 
 March                                            North 
  2016                    UK           Europe      America  Australia  Total 
------------------------  -----------  ---------  --------  ---------  ----------- 
 Revenue                  GBP130.1m    GBP18.1m   GBP3.2m   GBP7.3m    GBP158.8m 
========================  ===========  =========  ========  =========  =========== 
 % of Total Revenue       82%          11%        2%        5%         100% 
========================  ===========  =========  ========  =========  =========== 
 Investments at           GBP1,754.3m  GBP100.7m  GBP50.2m  GBP68.5m   GBP1,973.7m 
  fair value through 
  profit and loss 
========================  ===========  =========  ========  =========  =========== 
 % of Total Investments   89%          5%         3%        3%         100% 
========================  ===========  =========  ========  =========  =========== 
 

6. Investment income

 
                                     For year 
                          For year    ended 
                           ended      31 March 
                           31 March   2016 
                           2017       (Restated) 
                           Total      Total 
                           GBPm       GBPm 
------------------------  ---------  ----------- 
 Income from investment   108.6      98.4 
------------------------  ---------  ----------- 
 Gains on valuation       70.0       60.4 
========================  =========  =========== 
                           178.6     158.8 
========================  =========  =========== 
 

7. Fund expenses

 
                                                          For year 
                                               For year    ended 
                                                ended      31 March 
                                                31 March   2016 
                                                2017       (Restated) 
                                                Total      Total 
                                                GBPm       GBPm 
---------------------------------------------  ---------  ----------- 
 Fees to Company's auditor for audit 
  of Company                                   0.1        0.1 
---------------------------------------------  ---------  ----------- 
 Fees to Company's auditor for audit-related 
  assurance services                           0.1        0.1 
---------------------------------------------  ---------  ----------- 
 Investment Adviser fees                       0.1        0.1 
---------------------------------------------  ---------  ----------- 
 Directors' fees (Note 17)                     0.4        0.3 
---------------------------------------------  ---------  ----------- 
 Professional fees                             1.1        1.0 
=============================================  =========  =========== 
                                               1.8        1.6 
=============================================  =========  =========== 
 

The Company had no employees during the year (31 March 2016: Nil).

8. Net finance costs

In the year ended 31 March 2017 the Company had de minimus net finance income consisting of interest earned on bank deposits offset by some bank charges.

9. Income tax

Guernsey

Under the current system of taxation in Guernsey, the Company itself is exempt from paying taxes on income, profits or capital gains. Therefore, income from investments is not subject to any further tax in Guernsey.

Overseas tax jurisdictions

The financial statements do not include the tax charges for any of the Company's 114 (2016: 104) investments as these are held at fair value. All of these investments are subject to taxes in the countries in which they operate.

10. Basic and diluted earnings per share

Basic and diluted earnings per share are calculated by dividing the profit attributable to equity shareholders of the Company by the weighted average number of Ordinary Shares in issue during the year.

 
                                           2017        2016 
-----------------------------------------  ----------  ---------- 
 Profit attributable to equity holders     GBP176.8    GBP157.2 
  of the Company                            million     million 
-----------------------------------------  ----------  ---------- 
 Weighted average number of Ordinary       1,427.5     1,319.8 
  Shares in issue                           million     million 
=========================================  ==========  ========== 
 Basic and diluted earnings per Ordinary   12.4 pence  11.9 pence 
  Share 
=========================================  ==========  ========== 
 

Further details of shares issued in the year are set out in Note 16.

11. Dividends

 
                                              For year   For year 
                                               ended      ended 
                                               31 March   31 March 
                                               2017       2016 
                                               GBPm       GBPm 
--------------------------------------------  ---------  --------- 
 Amounts recognised as distributions 
  to equity holders during the year: 
--------------------------------------------  ---------  --------- 
 Fourth quarterly interim dividend 
  for the year ended 31 March 2016 
  of 1.87p (2015: 1.87p) per share            25.9       23.7 
--------------------------------------------  ---------  --------- 
 First quarterly interim dividend 
  for the year ended 31 March 2017 
  of 1.91p per share (2016: 1.86p)            26.5       24.7 
--------------------------------------------  ---------  --------- 
 Second quarterly interim dividend 
  for the year ended 31 March 2017 
  of 1.91p per share (2016: 1.86p)            27.9       24.7 
--------------------------------------------  ---------  --------- 
 Third quarterly interim dividend 
  for the year ended 31 March 2017 
  of 1.91p per share (2016: 1.86p)            27.9       25.4 
============================================  =========  ========= 
                                              108.2      98.5 
============================================  =========  ========= 
 Distributions paid to Company shareholders 
  in cash                                     100.6      93.0 
--------------------------------------------  ---------  --------- 
 Distributions paid to Company shareholders 
  by scrip issue                              7.6        5.5 

============================================  =========  ========= 
  Total distributions paid to Company 
   shareholders in the year                   108.2      98.5 
============================================  =========  ========= 
 Amounts not recognised as distributions 
  to equity holders during the year: 
--------------------------------------------  ---------  --------- 
 Fourth quarterly interim dividend 
  for the year ended 31 March 2017 
  of 1.92p (2016: 1.87p) per share            31.2       26.0 
============================================  =========  ========= 
 

The fourth quarterly interim dividend was approved by the Board on 18 May 2017 and is payable on 30 June 2017 to shareholders on the register as at 26 May 2017. The fourth quarterly interim dividend is payable to shareholders as a cash payment or alternatively as a scrip dividend. The fourth quarterly interim dividend has not been included as a liability at 31 March 2017.

The 2016 fourth quarterly interim dividend of 1.87p and the first three 2017 quarterly interim dividends of 1.91p each are included in the statement of changes in shareholder equity.

 
                         Year ended  Year ended  Year ended  Year ended  Year ended 
 
 
                          31 March    31 March    31 March    31 March    31 March 
 Interim dividend         2017        2016        2015        2014        2013 
-----------------------  ----------  ----------  ----------  ----------  ---------- 
 3 month period ending 
  30 June                1.91p       1.86p       1.81p 
-----------------------  ----------  ----------  ----------  ----------  ---------- 
 3 month period ending 
  30 September           1.91p       1.86p       1.81p 
-----------------------  ----------  ----------  ----------  ----------  ---------- 
 3 month period ending 
  31 December            1.91p       1.86p       1.81p 
-----------------------  ----------  ----------  ----------  ----------  ---------- 
 3 month period ending 
  31 March               1.92p       1.87p       1.87p 
-----------------------  ----------  ----------  ----------  ----------  ---------- 
 6 month period ending 
  30 September                                               3.5p        3.425p 
-----------------------  ----------  ----------  ----------  ----------  ---------- 
 6 month period ending 
  31 March                                                   3.6p        3.575p 
=======================  ==========  ==========  ==========  ==========  ========== 
                         7.65p       7.45p       7.3p        7.1p        7.0p 
=======================  ==========  ==========  ==========  ==========  ========== 
 

12. Net assets per Ordinary Share

 
                                          31 March  31 March 
                                           2017      2016 
                                           GBPm      GBPm 
----------------------------------------  --------  -------- 
 Shareholders' equity at 31 March         2,419.4   1,973.9 
========================================  ========  ======== 
 Less: fourth interim dividend (2016: 
  fourth interim dividend)                (31.2)    (26.0) 
========================================  ========  ======== 
                                          2,388.2   1,947.9 
----------------------------------------  --------  -------- 
 Number of Ordinary Shares at 31 March 
  (million)                               1,623.3   1,388.4 
========================================  ========  ======== 
 Net assets per share after deducting 
  fourth interim dividend (2016: fourth 
  interim dividend)                       147.1p    140.3p 
========================================  ========  ======== 
 Add fourth interim dividend (2016 
  fourth interim dividend)                1.92p     1.87p 
========================================  ========  ======== 
 Net assets per Ordinary Share at 
  31 March                                149.0p    142.2p 
========================================  ========  ======== 
 

13. Investments at fair value through profit or loss

 
                                         31 March 
                                          2016 
                               31 March 
                                2017      (Restated) 
                                GBPm      GBPm 
-----------------------------  --------  ----------- 
 Opening balance               1,973.7   1,723.4 
-----------------------------  --------  ----------- 
 Investments in the year       375.7     180.9 
-----------------------------  --------  ----------- 
 Gains on valuation            70.0      60.4 
=============================  ========  =========== 
 Carrying amount at year end   2,419.4   1,973.7 
=============================  ========  =========== 
 This is represented by: 
-----------------------------  --------  ----------- 
 Greater than one year         2,419.4   1,973.7 
=============================  ========  =========== 
 Carrying amount at year end   2,419.4   1,973.7 
=============================  ========  =========== 
 

The Company recognises the investment in its single directly owned holding company at fair value which includes the fair value of each of the individual project companies and holding companies in which the Company holds an indirect investment.

Investments in the period reflect funds paid to the Company's immediate Corporate Subsidiary following issuance of equity to shareholders.

Refer to Note 3 for the valuation techniques and key model inputs used for determining investment fair values.

The Investment Adviser has carried out fair market valuations of the investments as at 31 March 2017. The Directors have satisfied themselves as to the methodology used, the discount rates applied, and the valuation. The Directors have also obtained an independent opinion from a third party with experience in valuing these types of investments, supporting the reasonableness of the valuation. All equity investments in PPP or similar projects are valued using a discounted cash flow methodology. The A13 investment in listed senior bonds is valued based on quoted market price at the balance sheet date. The valuation techniques and methodologies have been applied consistently with the prior year. Discount rates applied range from 5.6% to 9.8% (weighted average of 7.4%) (2016: 7.0% to 10.1% (weighted average of 7.5%)).

The valuation of the Company's underlying portfolio at 31 March 2017 reconciles to the Balance Sheet as follows:

 
                                                       31 March 
                                                        2016 
                                             31 March 
                                              2017      (Restated) 
                                              GBPm      GBPm 
-------------------------------------------  --------  ----------- 
 Directors' valuation                        2,380.0   2,030.3 
===========================================  ========  =========== 
 Less: future commitments                    (32.5)    (97.4) 
===========================================  ========  =========== 
 Investments at fair value per Investment 
  Basis                                      2,347.5   1,932.9 
-------------------------------------------  --------  ----------- 
 Net cash in Corporate Subsidiaries          81.3      52.2 
-------------------------------------------  --------  ----------- 
 Working capital in Corporate Subsidiaries   (9.4)     (11.4) 
===========================================  ========  =========== 
 Investments per Balance Sheet               2,419.4   1,973.7 
===========================================  ========  =========== 
 

Investments are generally restricted on their ability to transfer funds to the Company under the terms of their senior funding arrangements for that investment. Significant restrictions include:

Historic and projected debt service and loan life cover ratios exceed a given threshold;

Required cash reserve account levels are met;

Senior lenders have agreed the current financial model that forecasts the economic performance of the project company;

Project company is in compliance with the terms of its senior funding arrangements; and

Senior lenders have approved the annual budget for the company.

Details of percentage holdings in investments recognised at fair value through profit or loss were as follows

 
                              31 March 2017                     31 March 2016 
----------------------------  --------------------------------  -------------------------------- 
                                       Subordinated  Mezzanine           Subordinated  Mezzanine 
 Project 
  name                        Equity    Debt          Debt      Equity    Debt          Debt 
----------------------------  -------  ------------  ---------  -------  ------------  --------- 
 A13 Road (7)                 -        -                        -        - 
============================  =======  ============  =========  =======  ============  ========= 
 A249 Road                    50.00%   50.00%                   50.00%   50.00% 
============================  =======  ============  =========  =======  ============  ========= 
 A63 Motorway                 13.82%   13.82%                   13.82%   13.82% 
============================  =======  ============  =========  =======  ============  ========= 
 A9 Road (2)                  20.00%   -                        -        - 
============================  =======  ============  =========  =======  ============  ========= 
 A92 Road                     50.00%   50.00%                   50.00%   50.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Addiewell Prison             33.30%   33.30%                   33.30%   33.30% 
============================  =======  ============  =========  =======  ============  ========= 
 Allenby & Connaught 
  MoD                         12.50%   12.50%                   12.50%   12.50% 

============================  =======  ============  =========  =======  ============  ========= 
 AquaSure Desalination 
  Plant (5)                   9.70%    -                        9.70%    - 
============================  =======  ============  =========  =======  ============  ========= 
 Bangor and Nendrum 
  Schools                     20.40%   25.50%                   -        - 
============================  =======  ============  =========  =======  ============  ========= 
 Barking and Dagenham 
  Schools                     100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Barnet Hospital              100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Birmingham & Solihull 
  LIFT                        60.00%   60.00%                   60.00%   60.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Birmingham Hospitals         30.00%   30.00%                   30.00%   30.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Bishop Auckland 
  Hospital                    36.00%   37.00%        100.00%    36.00%   37.00%        100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Blackburn Hospital           100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Blackpool Primary 
  Care Facility               75.00%   75.00%                   75.00%   75.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Boldon School                100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Bradford BSF Phase 
  1                           29.20%   35.00%                   29.20%   35.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Bradford BSF Phase 
  2                           34.00%   34.00%                   34.00%   34.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Brentwood Community 
  Hospital                    75.00%   75.00%                   75.00%   75.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Brighton Hospital            50.00%   50.00%                   50.00%   50.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Central Middlesex 
  Hospital                    100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Connect                      33.50%   33.50%                   33.50%   33.50% 
============================  =======  ============  =========  =======  ============  ========= 
 Conwy Schools                90.00%   90.00%                   90.00%   90.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Cork School of Music 
  (1)                         75.50%   75.50%                   50.00%   50.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Croydon Schools              100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Darlington Schools           50.00%   50.00%                   50.00%   50.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Defence Sixth Form 
  College                     45.00%   45.00%                   45.00%   45.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Derby Schools                100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Doncaster Mental 
  Health Unit                 50.00%   50.00%                   50.00%   50.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Dorset Fire & Rescue         100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Durham & Cleveland 
  Police Tactical 
  Training Centre             100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Dutch High Speed 
  Rail Link (2)               43.00%   43.00%                   43.00%   43.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Ealing Care Homes            63.00%   63.00%                   63.00%   63.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Ealing Schools               50.00%   50.00%                   50.00%   50.00% 
============================  =======  ============  =========  =======  ============  ========= 
 East Ayrshire Schools        25.00%   25.00%                   -        - 
============================  =======  ============  =========  =======  ============  ========= 
 Ecole Centrale Supelec 
  4                           85.00%   -                        85.00%   - 
============================  =======  ============  =========  =======  ============  ========= 
 Edinburgh Schools            100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Exeter Crown Court           100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Falkirk NPD Schools          29.10%   29.10%                   29.10%   29.10% 
============================  =======  ============  =========  =======  ============  ========= 
 Fife Schools 2               30.00%   30.00%                   30.00%   30.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Glasgow Hospital             25.00%   25.00%                   25.00%   25.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Gloucestershire 
  Fire & Rescue               75.00%   75.00%                   75.00%   75.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Government Accommodation 
  in Northern Europe          85.00%   -                        85.00%   - 
============================  =======  ============  =========  =======  ============  ========= 
 Greater Manchester 
  Police Authority            72.90%   72.90%                   72.90%   72.90% 
============================  =======  ============  =========  =======  ============  ========= 
 Haverstock School            50.00%   50.00%                   50.00%   50.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Health & Safety 
  Executive (HSE) 
  Merseyside Headquarters     50.00%   50.00%                   50.00%   50.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Health & Safety 
  Laboratory                  80.00%   90.00%                   80.00%   90.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Helicopter Training 
  Facility - AssetCo          86.60%   7.20%         100.00%    86.60%   7.20% 
============================  =======  ============  =========  =======  ============  ========= 
 Helicopter Training 
  Facility - OpCo             23.50%   74.10%                   23.50%   74.10% 
============================  =======  ============  =========  =======  ============  ========= 
 Highland Schools             100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Hinchingbrooke Hospital      75.00%   75.00%                   -        - 
============================  =======  ============  =========  =======  ============  ========= 
 Home Office Headquarters     100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Irish Grouped Schools 
  (1)                         50.00%   50.00%                   50.00%   50.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Ireland Primary 
  Care Centres (1)            60.00%   -                        -        - 
============================  =======  ============  =========  =======  ============  ========= 
 Kent Schools                 50.00%   50.00%                   50.00%   50.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Kicking Horse Canyon 
  P3 (3)                      50.00%   -                        50.00%   - 
============================  =======  ============  =========  =======  ============  ========= 
 Lewisham Hospital            100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 M1-A1 Link Road              30.00%   30.00%                   -        - 
============================  =======  ============  =========  =======  ============  ========= 
 M80 Motorway                 50.00%   50.00%                   50.00%   50.00% 
============================  =======  ============  =========  =======  ============  ========= 

 Manchester School            75.50%   75.50%                   50.00%   50.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Medway LIFT                  60.00%   60.00%                   60.00%   60.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Medway Police                100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Metropolitan Police 
  Specialist Training 
  Centre                      72.90%   72.90%                   72.90%   72.90% 
============================  =======  ============  =========  =======  ============  ========= 
 Miles Platting Social 
  Housing                     50.00%   33.30%                   50.00%   33.30% 
============================  =======  ============  =========  =======  ============  ========= 
 Newcastle Libraries          50.00%   50.00%                   50.00%   50.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Newham Schools BSF           80.00%   80.00%                   80.00%   80.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Newport Schools              100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Newton Abbot Hospital        100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 North Ayrshire Schools       25.50%   25.50%                   -        - 
============================  =======  ============  =========  =======  ============  ========= 
 North Tyneside Schools       50.00%   50.00%                   50.00%   50.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Northwest Anthony 
  Henday P3 (3)               50.00%   50.00%                   50.00%   50.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Northwest Parkway 
  (6)                         33.33%   -                        -        - 
============================  =======  ============  =========  =======  ============  ========= 
 Northwood MoD Headquarters   50.00%   50.00%                   -        - 
============================  =======  ============  =========  =======  ============  ========= 
 Norwich Schools              75.00%   75.00%                   75.00%   75.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Nuffield Hospital            25.00%   25.00%                   25.00%   25.00% 
============================  =======  ============  =========  =======  ============  ========= 
 N17/N18 Road                 10.00%   -                        10.00%   - 
============================  =======  ============  =========  =======  ============  ========= 
 Oldham Library               90.00%   90.00%                   90.00%   90.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Oldham Schools               75.00%   75.00%                   75.00%   75.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Oxford Churchill 
  Oncology                    40.00%   40.00%                   40.00%   40.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Oxford John Radcliffe 
  Hospital                    100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 PSBP North East 
  Batch Schools               45.00%   -                        45.00%   - 
============================  =======  ============  =========  =======  ============  ========= 
 Perth and Kinross 
  Schools                     100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Pinderfields and 
  Pontefract Hospitals        100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Queen Alexandra 
  Hospital Portsmouth         100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Queen's (Romford) 
  Hospital                    66.70%   66.70%                   66.70%   66.70% 
============================  =======  ============  =========  =======  ============  ========= 
 RD901 Road (4)               90.00%   90.00%                   90.00%   - 
============================  =======  ============  =========  =======  ============  ========= 
 Redbridge & Waltham 
  Forest LIFT                 60.00%   60.00%                   60.00%   60.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Renfrewshire Schools         30.00%   30.00%                   30.00%   30.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Rhonnda Cynon Taf 
  Schools                     100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Royal Canadian Mounted 
  Police 'E' Division 
  Headquarters 3              100.00%  -                        100.00%  - 
============================  =======  ============  =========  =======  ============  ========= 
 Royal School of 
  Military Engineering        26.00%   32.10%                   26.00%   32.10% 
============================  =======  ============  =========  =======  ============  ========= 
 Salford Hospital             50.00%   50.00%                   50.00%   50.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Salford Schools              25.50%   25.50%                   -        - 
============================  =======  ============  =========  =======  ============  ========= 
 Salford & Wigan 
  BSF Phase 1                 80.00%   80.00%                   80.00%   80.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Salford & Wigan 
  BSF Phase 2                 80.00%   80.00%                   80.00%   80.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Sheffield BSF                59.00%   59.00%                   59.00%   59.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Sheffield Hospital           75.00%   75.00%                   75.00%   75.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Sheffield Schools            75.00%   75.00%                   75.00%   75.00% 
============================  =======  ============  =========  =======  ============  ========= 
 South Ayrshire Schools       100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 South East London 
  Police Stations             50.00%   50.00%                   50.00%   50.00% 
============================  =======  ============  =========  =======  ============  ========= 
 South West Hospital, 
  Enniskillen                 39.00%   39.00%                   39.00%   39.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Southmead Hospital           62.50%   62.50%                   62.50%   62.50% 
============================  =======  ============  =========  =======  ============  ========= 
 Staffordshire LIFT           60.00%   60.00%                   60.00%   60.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Stoke Mandeville 
  Hospital                    100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Sussex Custodial 
  Services                    100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Tameside General 
  Hospital                    50.00%   50.00%                   50.00%   50.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Tyne & Wear Fire 
  Stations                    100.00%  -                        100.00%  - 
============================  =======  ============  =========  =======  ============  ========= 
 University of Bourgogne 
  (4)                         85.00%   85.00%                   85.00%   85.00% 
============================  =======  ============  =========  =======  ============  ========= 
 University of Sheffield 
  Accommodation               50.00%   50.00%                   50.00%   50.00% 
============================  =======  ============  =========  =======  ============  ========= 
 West Lothian Schools         75.00%   75.00%                   75.00%   75.00% 
============================  =======  ============  =========  =======  ============  ========= 
 West Middlesex Hospital      100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Willesden Hospital           100.00%  100.00%                  100.00%  100.00% 
============================  =======  ============  =========  =======  ============  ========= 
 Wooldale Centre 
  for Learning                50.00%   50.00%                   50.00%   50.00% 

============================  =======  ============  =========  =======  ============  ========= 
 Zaanstad Prison 
  2                           100.00%  100.00%                  75.0%    - 
============================  =======  ============  =========  =======  ============  ========= 
 

1 The project is located in Ireland.

2 The project is located in the Netherlands.

3 The project is located in Canada.

4 The project is located in France.

5 The project is located in Australia.

6 The project is located in the United States of America.

7 Senior debt investment

14. Investments - acquisitions and disposals

The Company, via its Corporate Subsidiaries, made the following acquisitions for the year ended 31 March 2017:

In April 2016 the Company acquired a 30% equity and loan interest in the M1-A1 Link Road project for a total consideration of GBP14.5 million.

In April 2016 and June 2016 the Company acquired through two transactions a 75% equity and loan interest in the Hinchingbrooke Hospital project for a total consideration of GBP5.3 million through an existing joint venture holding company, Redwood Partnership Ventures 2 Limited in which the Company has a 75% shareholding.

In May 2016 the Company acquired a 60% equity and loan interest in the Irish Primary Care Centres project for a total consideration of EUR11.6 million including a loanstock subscription obligation of EUR9.5 million in 2018.

In September 2016 the Company acquired a proportion of the Road Management Services (A13) PLC Index-Linked Guaranteed Secured Bonds 2028 for a total consideration of GBP50.1 million.

In November 2016 the Company acquired a portfolio of six operational education PPPs for a total consideration of GBP22.7 million. The Portfolio compromised of four new investments; 20.4% interest in Bangor and Nendrum Schools, 25.5% interest in Salford Schools, 25.5% interest in East Ayrshire Schools, 25.5% interest in North Ayrshire Schools and incremental interests of 25.5% each in both Manchester School and Cork School of Music.

In December 2016 the Company acquired a 20% equity interest in A9 Road Project in the Netherlands and an incremental 25% equity interest in Zaanstad Prison for a total consideration of EUR21.3 million which includes a loan stock subscription obligation payable following the substantial completion of construction of the A9 Project.

In January 2017 the Company completed the acquisition of 13.8% interest in A63 Motorway project for a total consideration of EUR87.0 million.

In March 2017 the Company acquired a 33.3% equity interest in Northwest Parkway for a total consideration of $166.4 million.

In March 2017 the Company invested in an incremental mezzanine loan investment in the Medium Support Helicopter Aircrew Training Facility project of GBP7.5 million.

Acquisition after 31 March 2017

In May 2017, the Company, via its Corporate Subsidiaries, completed the acquisition of a 36.6% equity interest in the various entities that comprise the Affinity Water Group ("Affinity Water") (including the regulated entity, Affinity Water Limited) for a consideration of approximately GBP269 million.

HICL is part of a consortium, alongside DIF Infrastructure and Allianz Capital Partners on behalf of Allianz Group, which has acquired 100% of the equity interest in Affinity Water Acquisitions (Investments) Limited.

15. Loans and borrowings

The Company had no cash loans or borrowings outstanding at 31 March 2017 (2016: Nil). A Corporate Subsidiary had letters of credit utilised on the revolving bank facility totalling GBP30.9 million at 31 March 2017 (2016: GBP36.6 million).

The Company through its Corporate Subsidiaries has the following undrawn borrowing facilities at 31 March:

 
                                    2017   2016 
                                     GBPm   GBPm 
----------------------------------  -----  ----- 
 Secured 
----------------------------------  -----  ----- 
 - expiring within one year         -      - 
----------------------------------  -----  ----- 
 - expiring between 1 and 2 years   -      - 
----------------------------------  -----  ----- 
 - expiring between 2 and 5 years   269.1  163.4 
----------------------------------  -----  ----- 
 - expiring after 5 years           -      - 
==================================  =====  ===== 
                                    269.1  163.4 
==================================  =====  ===== 
 

The Company's multi-currency revolving bank facility via a Corporate Subsidiary was increased from GBP200m to GBP300m in November 2016 and was jointly provided by The Royal Bank of Scotland, National Australia Bank, Lloyds Bank, Sumitomo Mitsui Banking Corporation, ING and HSBC. In April 2017, the multi-currency revolving bank facility was increased from GBP300m to GBP400m and Santander joined the existing banking group. The tenor and margin remained as before.

The facility runs until May 2019 and has a margin of 1.70%. It is available to be drawn in cash and letters of credit for future investment obligations.

During the year, the Company complied with its bank covenants on its revolving bank facility, the most significant of which were maintaining a forward and historic interest cover ratio above 3:1 and gearing ratio not greater than 0.275:1.

16. Share capital and reserves

 
                                          31 March  31 March 
 Ordinary Shares (million)                 2017      2016 
----------------------------------------  --------  -------- 
 Authorised and issued at 1 April         1,388.4   1,267.7 
----------------------------------------  --------  -------- 
 Issued for cash                          230.2     117.1 
----------------------------------------  --------  -------- 
 Issued as a scrip dividend alternative   4.7       3.6 
========================================  ========  ======== 
 Authorised and issued at 31 March 
  - fully paid                            1,623.3   1,388.4 
========================================  ========  ======== 
 

The holders of the 1,623,260,735 Ordinary Shares of 0.01p each are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company (2016: 1,388,426,479 Ordinary Shares).

 
                                      31 March  31 March 
 Ordinary Share capital and share      2017      2016 
  premium                              GBPm      GBPm 
------------------------------------  --------  -------- 
 Opening balance                      1,376.6   1,194.3 
------------------------------------  --------  -------- 
 Premium arising on issue of equity 
  shares                              381.0     183.7 
------------------------------------  --------  -------- 
 Expenses of issue of equity shares   (4.1)     (1.4) 
====================================  ========  ======== 
 Balance at 31 March                  1,753.5   1,376.6 
====================================  ========  ======== 
 

Share capital at 31 March 2017 is GBP162.3 thousand (2016: GBP138.8 thousand).

For the year ended 31 March 2017

On 30 June 2016, 1.6 million new Ordinary Shares of 0.01p each fully paid in the Company were issued at a reference price of 162.6p as a scrip dividend alternative in lieu of cash for the fourth quarterly interim dividend in respect of the year ended 31 March 2016.

On 30 September 2016, 1.0 million new Ordinary Shares of 0.01p each fully paid in the Company were issued at a reference price of 175.72p as a scrip dividend alternative in lieu of cash for the first quarterly interim dividend in respect of the year ending 31 March 2017.

On 31 December 2016, 1.2 million new Ordinary Shares of 0.01p each fully paid in the Company were issued at a reference price of 161.34p as a scrip dividend alternative in lieu of cash for the second quarterly interim dividend in respect of the year ending 31 March 2017.

On 31 March 2017, 0.8 million new Ordinary Shares of 0.01p each fully paid in the Company were issued at a reference price of 164.14p as a scrip dividend alternative in lieu of cash for the third quarterly interim dividend in respect of the year ending 31 March 2017.

In September 2016, 66.7 million new Ordinary Shares of 0.01p each were issued to various institutional investors at an issue price per share (before expenses) of 170.0p.

In March 2017, 163.5 million new Ordinary Shares of 0.01p each were issued to various institutional investors at an issue price per share (before expenses) of 159.0p through issuing a Prospectus on 23 February 2017.

For the year ended 31 March 2016

On 30 June 2015, 0.7 million new Ordinary Shares of 0.01p each fully paid in the Company were issued at a reference price of 152.66p as a scrip dividend alternative in lieu of cash for the fourth interim dividend of 1.87p in respect of the year ending 31 March 2015.

On 30 September 2015, 1.3 million new Ordinary Shares of 0.01p each fully paid in the Company were issued at a reference price of 151.5p as a scrip dividend alternative in lieu of cash for the first quarterly interim dividend of 1.86p in respect of the year ending 31 March 2016.

On 31 December 2015, 0.5 million new Ordinary Shares of 0.01p each fully paid in the Company were issued at a reference price of 152.34p as a scrip dividend alternative in lieu of cash for the second quarterly interim dividend of 1.86p in respect of the year ending 31 March 2016.

On 31 March 2016, 1.1 million new Ordinary Shares of 0.01p each fully paid in the Company were issued at a reference price of 155.66p as a scrip dividend alternative in lieu of cash for the third quarterly interim dividend of 1.86p in respect of the year ending 31 March 2016.

In the year ending 31 March 2016, 117.1 million new Ordinary Shares of 0.01p each were issued to various institutional investors at an issue price per share (before expenses) ranging between 150.0p and 156.0p.

Retained reserves

Retained reserves comprise retained earnings and the balance of the share premium account, as detailed in the statements of changes in shareholders' equity.

17. Related party transactions

The Investment Adviser to the Company and the Operator of a limited partnership through which the Company holds its investments is InfraRed Capital Partners Limited ("IRCP").

IRCP's appointment as Investment Adviser is governed by an Investment Advisory Agreement which may be terminated by either party giving one year's written notice. The appointment may also be terminated if IRCP's appointment as Operator is terminated. The Investment Adviser is entitled to a fee of GBP0.1 million per annum (disclosed within investment fees in Note 7) (2016: GBP0.1 million), payable half-yearly in arrears and which is subject to review, from time to time, by the Company.

IRCP has been appointed as the Operator of Infrastructure Investments Limited Partnership by the General Partner of the Partnership, Infrastructure Investments General Partner Limited, a fellow subsidiary of IRCP. The Operator and the General Partner may each terminate the appointment of the Operator by either party giving one year's written notice. Either the Operator or the General Partner may terminate the appointment of the Operator by written notice if the Investment Advisory Agreement is terminated in accordance with its terms. The General Partner's appointment does not have a fixed term, however if IRCP ceases to be the Operator, the Company has the option to buy the entire share capital of the General Partner and IRCP Group has the option to sell the entire share capital of the General Partner to the Company, in both cases for nominal consideration. The Directors consider the value of the option to be insignificant.

In the year to 31 March 2017, in aggregate IRCP and the General Partner were entitled to fees and/or profit share equal to: i) 1.1 per cent per annum of the adjusted gross asset value of all investments of the Company up to GBP750 million, 1.0 per cent per annum for the incremental value in excess of GBP750 million up to GBP1,500 million, 0.9 per cent for the incremental value in excess of GBP1,500 million and 0.8 per cent for the incremental value in excess of GBP2,250 million and ii) 1.0 per cent of the value of new portfolio investment, that were not sourced from entities, funds or holdings managed by the IRCP Group.

The total Operator fees was GBP20.9 million (2016: GBP18.9 million) of which GBP10.8 million remained payable at year end (2016: GBP9.7 million). The total charge for new portfolio investments (disclosed within investment fees in Note 7) was GBP3.4 million (2016: GBP1.5 million) of which GBP2.6 million remained payable at year end (2016: GBP0.4 million).

The Directors of the Company received fees for their services. Total fees for Directors for the year were GBP393,334 (2016: GBP307,000). Directors expenses of GBP34,006 (2016: GBP12,939) were also paid in the year. One Director also receives fees of GBP5,000 for serving as director of the two Luxembourg subsidiaries.

All of the above transactions were undertaken on an arm's length basis.

18. Guarantees and other commitments

As at 31 March 2017 the Company had GBP32.5 million commitments for future project investments (2017: GBP97.4 million), and an additional contingent commitment of EUR16.8 million (2016: EUR16.8 million) to acquire a further 32% equity and loan interest in the N17/N18 Road project from existing co-shareholders following completion of construction which is currently expected to occur in 2018.

19. Events after the balance sheet date

The fourth quarterly interim dividend for the year ended March 2017 of 1.92 pence per share was approved by the Board on 18 May 2017 and is payable on 30 June 2017 to shareholders on the register as at 26 May 2017.

In April 2017, the Company's multi-currency revolving bank facility via a Corporate Subsidiary was increased from GBP300m to GBP400m and to be jointly provided by The Royal Bank of Scotland, National Australia Bank, Lloyds Bank, Sumitomo Mitsui Banking Corporation, ING, HSBC and Santander. The facility runs until May 2019 and has a margin of 1.70%.

In May 2017, the Company, via its Corporate Subsidiaries, completed the acquisition of a 36.6% equity interest in the various entities that comprise the Affinity Water Group ("Affinity Water") (including the regulated entity, Affinity Water Limited) for a consideration of approximately GBP269 million. HICL is part of a consortium, alongside DIF Infrastructure and Allianz Capital Partners on behalf of Allianz Group, which has acquired 100% of the equity interest in Affinity Water Acquisitions (Investments) Limited.

20. Disclosure - Service Concession Arrangements

The Company held at 31 March 2017 investments in 114 (2016: 103) service concession arrangements and one conditional contract to acquire an investment in the Accommodation, Education, Health, Transport and Law and Order sectors. The concessions vary on the required obligations but typically require the financing and operation of an asset during the concession period.

The rights of both the concession provider and concession operator are stated within the specific project agreement. The standard rights of the provider to terminate the project include poor performance and in the event of force majeure. The operator's rights to terminate include the failure of the provider to make payment under the agreement, a material breach of contract and relevant changes of law which would render it impossible for the service company to fulfil its requirements.

 
                                                                   Number 
                          Short description                 End     of       Project    Key 
 Project                   of concession arrangements        date   years     Capex      subcontractors 
-----------------------  ---------------------------------  -----  --------  ---------  ------------------ 
                          Finance, construct, 
                           operate and maintain 
                           a section of the A9 
 A9 Road                   road in the Netherlands          2041   20        EUR574m    Fluor 
=======================  =================================  =====  ========  =========  ================== 
 A13 Road                 Design, build, finance            2028   30        GBP220m    Carillion 
                           and operate a 20km                                            KBR 
                           section of the A13 
                           road between Limehouse, 
                           London and Wennington, 
                           Essex on behalf of 
                           Transport for London 
                           ("TfL"). 
=======================  =================================  =====  ========  =========  ================== 
 A249 Road                Design, construct,                2036   30        GBP79m     Carillion 
                           finance, operate and 
                           maintain the section 
                           from Iwade Bypass 
                           to Queensborough of 
                           the A249 road for 
                           the Secretary of State 
                           for Transport 
=======================  =================================  =====  ========  =========  ================== 
                          Design, build, finance, 
                           operate and maintain 
                           an upgrade to the 
                           A63 highway between 
                           Salles and Saint Geours 
 A63 Motorway              de Maremne in France             2051   40        EUR1,130m  Colas 
=======================  =================================  =====  ========  =========  ================== 
 A92 Road                 Design, construct,                2035   30        GBP54m      Bear 
                           finance and operate 
                           the upgraded A92 shadow 
                           toll road between 
                           Dundee and Arbroath 
                           for Transport for 
                           Scotland 
=======================  =================================  =====  ========  =========  ================== 
 Addiewell                Design, build, finance            2033   25        GBP75m     Sodexo 
  Prison                   and operate a new 
                           maximum security prison 
                           at Addiewell, West 
                           Lothian 
=======================  =================================  =====  ========  =========  ================== 
 Allenby &                Design, build and                 2041   35        GBP1,557m  Carillion 
  Connaught                finance new and refurbished                                   KBR 
  MoD                      MoD accommodation 
                           across four garrisons 
                           on Salisbury Plain 
                           and in Aldershot, 
                           comprising working, 
                           leisure and living 
                           quarters as well as 
                           ancillary buildings 
=======================  =================================  =====  ========  =========  ================== 
 AquaSure Desalination    Design, build, finance            2039   30        A$3,512m   SUEZ Environmental 
  Plant                    and operate a 150GL/year 
                           desalination plant 
                           and associated infrastructure. 
=======================  =================================  =====  ========  =========  ================== 
 Bangor & Nendrum         Design, build, finance            2038   32        GBP31m     Bilfinger 
  Schools                  and operate two schools                                       Berger 
                           on behalf of the South 

                           Eastern Education 
                           and Library Board 
                           in Northern Ireland 
=======================  =================================  =====  ========  =========  ================== 
 Barking and              Design, construct,                2030   26        GBP47m     Bouygues 
  Dagenham Schools         finance, operate and 
                           maintain the Eastbury 
                           Comprehensive and 
                           Jo Richardson Community 
                           Schools for London 
                           Borough of Barking 
                           & Dagenham 
=======================  =================================  =====  ========  =========  ================== 
 Barnet Hospital          Design, construct,                2032   33        GBP65m     Bouygues 
                           operate and maintain 
                           the re-building of 
                           Barnet General Hospital 
                           in North London for 
                           the Wellhouse National 
                           Health Service Trust 
=======================  =================================  =====  ========  =========  ================== 
 Birmingham               Design, construct                 2031   27        GBP65m     Carillion 
  & Solihull               and invest in facilities 
  LIFT                     of new health and 
                           social care facilities 
=======================  =================================  =====  ========  =========  ================== 
 Birmingham               Design, construct,                2046   40        GBP553m    Cofely 
  Hospitals                finance and maintain 
                           a new acute hospital 
                           and six mental health 
                           facilities for University 
                           Hospitals Birmingham 
                           NHS Foundation Trust 
                           and Solihull Mental 
                           Health NHS Foundation 
                           Trust 
=======================  =================================  =====  ========  =========  ================== 
 Bishop Auckland          Design, construct,                2059   60        GBP66m     ISS 
  Hospital                 finance, service and                     (with 
                           maintain a redevelopment                 break 
                           of Bishop Auckland                       clause 
                           General Hospital,                        option 
                           County Durham for                        by 
                           South Durham Health                      Grantor 
                           Care NHS Trust                           at 
                                                                    Year 
                                                                    30, 
                                                                    40 
                                                                    & 50) 
=======================  =================================  =====  ========  =========  ================== 
 Blackburn                Design, construct,                2041   38        GBP100m    Cofely 
  Hospital                 finance and maintain 
                           new facilities at 
                           the Queens Park Hospital 
                           in Blackburn for the 
                           East Lancashire Hospitals 
                           NHS Trust 
=======================  =================================  =====  ========  =========  ================== 
 Blackpool                Design, construct,                2040   32        GBP19m     Eric Wright 
  Primary Care             finance and operate 
  Facility                 a primary care centre 
                           in Blackpool for Blackpool 
                           Primary Care Trust 
=======================  =================================  =====  ========  =========  ================== 
 Boldon School            Design, construct,                2031   26        GBP18m     Mitie 
                           finance, operate and 
                           maintain Boldon School 
                           for the Borough of 
                           South Tyneside 
=======================  =================================  =====  ========  =========  ================== 
 Bradford BSF             Design, construct,                2035   27        GBP84m     Amey 
  Phase 1                  finance and operate 
                           three new secondary 
                           schools (Buttershaw 
                           High School, Salt 
                           Grammar School and 
                           Tong School), along 
                           with routine and major 
                           lifecycle maintenance 
                           for the life of the 
                           concession. 
=======================  =================================  =====  ========  =========  ================== 
 Bradford BSF             Design, construct,                2036   27        GBP230m    Amey 
  Phase 2                  finance and maintain 
                           four secondary schools 
                           for Bradford Metropolitan 
                           District Council 
=======================  =================================  =====  ========  =========  ================== 
 Brentwood                Design, construct,                2036   30        GBP23m     Interserve 
  Community                finance and maintain 
  Hospital                 a new community hospital 
                           for South West Essex 
                           Primary Care Trust 
=======================  =================================  =====  ========  =========  ================== 
 Brighton Children's      Construct and operate             2034   30        GBP37m     Integral 
  Hospital                 a new children's hospital 
                           in Brighton 
=======================  =================================  =====  ========  =========  ================== 
 Central Middlesex        Design, construct,                2036   33        GBP75m     Bouygues 
  Hospital                 finance and maintain 
                           new hospital facilities, 
                           and to refurbish some 
                           existing facilities, 
                           for the Brent Emergency 
                           Care and Diagnostic 
                           Centre on the Central 
                           Middlesex Hospital 
                           site in North West 
                           London 
=======================  =================================  =====  ========  =========  ================== 
 Connect                  Upgrade London Underground        2019   20        GBP330m    Thales 
                           Limited's existing 
                           radio and telecommunications 
                           systems and implement 
                           and operate a new 
                           system 
=======================  =================================  =====  ========  =========  ================== 
 Conwy Schools            Design, build, operate            2030   27        GBP40m     Sodexo 
                           and maintain three 
                           schools for Conwy 
                           County Borough Council 
                           in North Wales 
=======================  =================================  =====  ========  =========  ================== 
                          Design, construct, 
                           finance and operate 
                           a new school of music 
                           in Cork to accommodate 
                           130 academic staff, 
                           400 full time and 
                           2,000 part-time students 
                           for the Minister of 
 Cork School               Education and Science                                        Bilfinger 
  of Music                 (Republic of Ireland).           2030   25        EUR50m      Berger 
=======================  =================================  =====  ========  =========  ================== 
 Croydon Schools          Design, construct,                2034   30        GBP20m     Vinci 
                           finance, operate and 
                           maintain a secondary 
                           school and community 
                           library in Croydon 
                           for the London Borough 
                           of Croydon 
=======================  =================================  =====  ========  =========  ================== 
 Darlington               Design, construct,                2029   25        GBP31m     Mitie 
  Schools                  finance, operate and 
                           maintain an Education 
                           Village comprising 
                           four schools 
=======================  =================================  =====  ========  =========  ================== 
 Defence Sixth            Design, build, operate,           2033   30        GBP40m     Interserve 
  Form College             finance and maintain 
                           a new residential 
                           sixth form college 
                           for the Secretary 
                           of State for Defence 
=======================  =================================  =====  ========  =========  ================== 
 Derby Schools            Design, construct,                2031   27        GBP37m     Vinci 
                           finance, operate and 
                           maintain three primary 
                           schools and two secondary 

                           schools in Derby for 
                           Derby City Council 
=======================  =================================  =====  ========  =========  ================== 
 Doncaster                Design, construct,                2031   28        GBP15m     Royal 
  Mental Health            finance, operate and                                          BAM 
  Unit                     maintain a service 
                           accommodation for 
                           an elderly mental 
                           health unit in Doncaster 
                           for the Rotherham 
                           Doncaster and South 
                           Humber Mental NHS 
                           Foundation Trust 
=======================  =================================  =====  ========  =========  ================== 
 Dorset Fire              Design, construct,                2034   27        GBP45m     Cofely 
  & Rescue                 finance, operate and 
                           maintain the fire 
                           and police facilities 
                           at three sites in 
                           Dorset for the Dorset 
                           Fire Authority & Police 
                           and Crime Commissioner 
                           for Dorset 
=======================  =================================  =====  ========  =========  ================== 
 Durham & Cleveland       Finance, construct,               2025   25        GBP6m      Carillion 
  Police Tactical          operate and maintain 
  Training Centre          a state of the art 
                           firearms and tactical 
                           training centre at 
                           Urlay Nook in the 
                           North of England 
=======================  =================================  =====  ========  =========  ================== 
                          Design, construct, 
                           finance, operate and 
                           maintain power, track 
                           and signalling for 
                           the high speed railway 
 Dutch High                between Schiphol Airport                                     Fluor 
  Speed Rail               and Belgian border                                            Royal 
  Link                     in the Netherlands               2026   25         EUR890m    BAM Siemens 
=======================  =================================  =====  ========  =========  ================== 
 Ealing Care              Design, construct,                2035   30        GBP22m     Viridian 
  Homes                    finance, operate and 
                           maintain four care 
                           homes for the elderly 
                           in the London Borough 
                           of Ealing for the 
                           London Borough of 
                           Ealing 
=======================  =================================  =====  ========  =========  ================== 
 Ealing Schools           Design, construct,                2029   27        GBP31m     Mitie 
                           finance, operate and 
                           maintain a four-school 
                           education project 
                           consisting of one 
                           secondary school and 
                           three primary schools 
                           in the London Borough 
                           of Ealing 
=======================  =================================  =====  ========  =========  ================== 
 East Ayrshire            Design, build, finance            2038   32        GBP78m     Mitie 
  Schools                  and operate three 
                           senior campus schools 
                           and a primary school 
                           on behalf of the North 
                           Ayrshire Council. 
=======================  =================================  =====  ========  =========  ================== 
                          Design, construct, 
                           finance and maintain 
                           a new facility for 
                           the Ecole Centrale 
                           Supelec in France, 
                           as well as a shared 
 Ecole Centrale            teaching and research 
  Supelec                  facility                         2041   26        EUR65m     Bouygues 
=======================  =================================  =====  ========  =========  ================== 
 Edinburgh                Design, construct,                2039   32        GBP165m    Mitie 
  Schools                  finance, operate and 
                           maintain six secondary 
                           schools and two primary 
                           schools for the City 
                           of Edinburgh Council 
=======================  =================================  =====  ========  =========  ================== 
 Exeter Crown             Build and service                 2034   32        GBP20m     Sodexo 
  & County Court           a new crown and county 
                           court building in 
                           Exeter 
=======================  =================================  =====  ========  =========  ================== 
 Falkirk NPD              Design, construct,                2039   32        GBP120m    FES 
  Schools                  finance and operate 
                           four secondary schools 
                           in the Falkirk area 
                           of Scotland 
=======================  =================================  =====  ========  =========  ================== 
 Fife Schools             Design, construct,                2032   27        GBP64m     FES 
  2                        finance and maintain 
                           nine primary schools 
                           and one special education 
                           facility in Fife, 
                           Scotland 
=======================  =================================  =====  ========  =========  ================== 
 Glasgow Hospital         Design, construct,                2036   30        GBP178m    Cofely 
                           finance, operate and 
                           maintain two new ambulatory 
                           care and diagnostic 
                           hospitals in Glasgow 
                           for the Greater Glasgow 
                           and Clyde Health Board 
=======================  =================================  =====  ========  =========  ================== 
 Gloucestershire          Construct and operate             2037   26        GBP23m     Capita 
  Fire & Rescue            4 community fire stations 
                           in Gloucestershire 
                           and a SkillZone education 
                           centre 
=======================  =================================  =====  ========  =========  ================== 
 Greater Manchester       Design, build, finance            2031   29        GBP82m     Carillion 
  Police Authority         and operate a new 
                           traffic headquarters 
                           and 16 new police 
                           stations for the Greater 
                           Manchester Police 
                           Authority 
=======================  =================================  =====  ========  =========  ================== 
 Haverstock               Design and construction           2030   26        GBP21m     Mitie 
  School                   of a single new secondary 
                           school on an existing 
                           school site on Haverstock 
                           Hill, Camden 
=======================  =================================  =====  ========  =========  ================== 
 Health & Safety          Construct new workshops           2034   32        GBP60m     Interserve 
  Laboratory               and offices in Buxton 
=======================  =================================  =====  ========  =========  ================== 
 Health and               Finance, construct,               2035   30        GBP62m     Honeywell 
  Safety Executive         operate and maintain 
  (HSE) Merseyside         a new four-storey 
  Headquarters             office building for 
                           the Health and Safety 
                           Executive 
=======================  =================================  =====  ========  =========  ================== 
 Helicopter               Design, construct,                2037   40        GBP100m    CAE 
  Training Facility        management, operate                      (with 
                           and finance simulators                   break 
                           based training facility                  clause 
                           for Royal Airforce                       by 
                           (RAF) helicopter pilots                  Grantor 
                                                                    at 
                                                                    Year 
                                                                    20) 
=======================  =================================  =====  ========  =========  ================== 
 Highland Schools         Design, construct                 2037   30        GBP143m    Mears 
                           and operate eleven 
                           urban and rural schools 
=======================  =================================  =====  ========  =========  ================== 
 Hinchingbrooke           Construction, financing,          2035   31        GBP19m     Kier 
  Hospital                 maintenance and operation 
                           of a two storey 8,500m2 
                           diagnostic and treatment 
                           centre situated adjacent 

                           to the existing Hinchingbrooke 
                           District General Hospital. 
=======================  =================================  =====  ========  =========  ================== 
 Home Office              Build, finance, operate           2031   29        GBP200m    Bouygues 
  Headquarters             and maintain a new 
                           headquarters building 
                           to replace the Home 
                           Office's existing 
                           London office accommodation 
                           with purpose-built 
                           serviced offices 
=======================  =================================  =====  ========  =========  ================== 
                          Design, construct, 
                           finance, operate and 
                           maintain five secondary 
                           schools in the Republic 
                           of Ireland for the 
 Irish Grouped             Department of Education                                      Bilfinger 
  Schools                  and Skills                       2026   25        EUR34m      Berger 
=======================  =================================  =====  ========  =========  ================== 
                          Design, build, finance 
                           and maintain 14 primary 
 Ireland Primary           care centres across                                          Balfour 
  Care Centres             Republic of Ireland.             2042   26        EUR145      Beatty 
=======================  =================================  =====  ========  =========  ================== 
 Kent Schools             Design, build, funding            2035   30        GBP95m     Mitie 
                           and partially operate 
                           six schools in Kent 
=======================  =================================  =====  ========  =========  ================== 
 Kicking Horse            Upgrade, operate and              2027   22        CAD$         HMC Services 
  Canyon P3                maintain a section 
                           of highway in British 
                           Columbia, Canada 
                                                                              127m 
=======================  =================================  =====  ========  =========  ================== 
 Lewisham Hospital        Design, construct,                2036   32        GBP58m     Carillion 
                           finance, operate and 
                           maintain a new wing 
                           in Lewisham Hospital 
                           for the Department 
                           of Health 
=======================  =================================  =====  ========  =========  ================== 
 M1-A1 Link               Finance, construct,               2026   30        GBP250m    Balfour 
  Road                     operate, and maintain                                         Beatty 
                           a motorway linking 
                           the M1, M621 and M62 
                           motorways to the south 
                           of Leeds and the A1(M) 
                           south of Wetherby. 
=======================  =================================  =====  ========  =========  ================== 
 M80 Motorway             Design, build, finance            2039   30        GBP275m    Bear 
                           and operate a section 
                           of the M80 motorway 
                           in Scotland 
=======================  =================================  =====  ========  =========  ================== 
 Manchester               Design, construct,                2031   26        GBP29m     Hochtief 
  School                   finance, operate and 
                           maintain the Wright 
                           Robinson College in 
                           Manchester for Manchester 
                           City Council 
=======================  =================================  =====  ========  =========  ================== 
 Medway LIFT              Deliver health and                2034   29        GBP19m     Rydon 
                           social care infrastructure 
                           to NHS property services 
                           and Community Health 
                           Partnerships within 
                           the Medway area of 
                           North Kent 
=======================  =================================  =====  ========  =========  ================== 
 Medway Police            Design, construct,                2034   30        GBP21m     Vinci 
  Station                  finance, operate and 
                           maintain a divisional 
                           police headquarters 
                           for Police and Crime 
                           Commissioner for Kent 
=======================  =================================  =====  ========  =========  ================== 
 Metropolitan             Finance, operate and              2026   25        GBP40m     Carillion 
  Police Specialist        maintain firearms 
  Training Centre          and public order training 
                           facility in Gravesend, 
                           Kent for the Mayor's 
                           Office for Policing 
                           and Crime 
=======================  =================================  =====  ========  =========  ================== 
 Miles Platting           Redesign and refurbish            2037   30        GBP79m     Morgan 
  Social Housing           approximately 1,500                                           Sindall 
                           occupied properties, 
                           as well as to build 
                           20 new extra care 
                           homes and 11 new family 
                           homes in Miles Platting, 
                           Manchester 
=======================  =================================  =====  ========  =========  ================== 
 Newcastle                Finance, develop,                 2032   25        GBP30m     Integral 
  Libraries                construct and operate 
                           a new city centre 
                           library in Newcastle 
                           and an additional 
                           satellite library 
                           in High Heaton, both 
                           in the North East 
                           of the UK 
=======================  =================================  =====  ========  =========  ================== 
 Newham Schools           Design, build, finance,           2036   27        GBP53m     Mitie 
  BSF                      maintain and operate 
                           two new secondary 
                           schools in Newham, 
                           London on behalf of 
                           the London Borough 
                           of Newham Council. 
=======================  =================================  =====  ========  =========  ================== 
 Newport Schools          Design, construct,                2033   25        GBP15m     Vinci 
                           finance, operate and 
                           maintain a nursery, 
                           infant and junior 
                           school for Newport 
                           City Council 
=======================  =================================  =====  ========  =========  ================== 
 Newton Abbot             Design, construct,                2039   32        GBP20m     Rydon 
  Hospital                 finance, operate and 
                           maintain a community 
                           hospital for Devon 
                           Primary Care Trust 
=======================  =================================  =====  ========  =========  ================== 
 North Ayrshire           Design, build, finance            2038   32        GBP84m     Mitie 
  Schools                  and operate three 
                           secondary schools 
                           and one primary school 
                           on behalf of the North 
                           Ayrshire Council. 
=======================  =================================  =====  ========  =========  ================== 
 North Tyneside           Design, construct,                2033   31        GBP30m     Mitie 
  Schools                  finance, operate and 
                           maintain a four-school 
                           education project 
                           consisting of one 
                           secondary school and 
                           three primary schools 
                           in North Tyneside 
=======================  =================================  =====  ========  =========  ================== 
 Northwest                Finance, build, maintain          2041   33        CAD$       Vinci 
  Anthony Henday           and rehabilitate the                               995m 
  P3                       northwest leg of the 
                           Anthony Henday Drive 
                           ring road in the City 
                           of Edmonton, Alberta, 
                           Canada 
=======================  =================================  =====  ========  =========  ================== 
                          Operate, manage, maintain, 
                           rehabilitate and toll 
                           a 14km four-lane road 
                           under an agreement 
                           with the Northwest 
 Northwest                 Parkway Public Highway 
  Parkway                  Authority.                       2106   99        NA         None 
=======================  =================================  =====  ========  =========  ================== 

 Northwood                Design, construct                 2031   25        GBP198m    Carillion 
  MoD Headquarters         and commission new-built 
                           facilities on behalf 
                           of the Ministry of 
                           Defence in Northwood, 
                           Greater London 
=======================  =================================  =====  ========  =========  ================== 
 Norwich Area             Design, construct,                2032   26        GBP43m     Kier 
  Schools                  finance and operate 
                           five primary schools 
                           and one secondary 
                           school; all new build 
                           with the exception 
                           of a small element 
                           of retained estate 
                           at the secondary school 
                           for the Norwich City 
                           Council 
=======================  =================================  =====  ========  =========  ================== 
 Nuffield Hospital        Design, construct,                2036   34        GBP37m     G4S 
                           finance, operate and 
                           maintain a new orthopaedic 
                           hospital for the Secretary 
                           of State for Health 
=======================  =================================  =====  ========  =========  ================== 
                          Design, build, finance, 
                           operate and maintain 
                           the N17/N18 road in 
                           Ireland for the National 
                           Road Authority, which 
                           is responsible for 
                           the development and 
                           improvement of national 
                           roads in Republic 
 N17/N18 Road              of Ireland.                      2042   28        EUR336m    Strabag 
=======================  =================================  =====  ========  =========  ================== 
 Oldham Library           Design, construct,                2029   25        GBP15m     Kier 
                           finance, operate and 
                           maintain the Oldham 
                           Library and Lifelong 
                           Learning Centre for 
                           Oldham Metropolitan 
                           Borough Council 
=======================  =================================  =====  ========  =========  ================== 
 Oldham Schools           Design, construct,                2033   27        GBP54m     Kier 
                           finance and operate 
                           two secondary schools 
                           for Oldham Metropolitan 
                           Borough Council 
=======================  =================================  =====  ========  =========  ================== 
 Oxford Churchill         Design, construct,                2038   33        GBP124m    Impregilo 
  Oncology                 finance, operate and 
                           maintain a 100 bed 
                           oncology unit, including 
                           provision of medical 
                           equipment for Oxford 
                           Radcliffe Hospitals 
                           NHS Trust. 
=======================  =================================  =====  ========  =========  ================== 
 Oxford John              Design, construct,                2036   33        GBP161m    Carillion 
  Radcliffe                manage, finance, operate 
  Hospital                 and maintain a new 
                           wing adjacent to the 
                           former Radcliffe Infirmary 
=======================  =================================  =====  ========  =========  ================== 
 PSBP North               Design, construct,                2041   26        GBP103m    Galliford 
  East Batch               operate and maintain                                          Try 
  Schools                  6 new primary and 
                           6 new secondary schools 
                           in various UK locations. 
=======================  =================================  =====  ========  =========  ================== 
 Perth and                Design, construct,                2041   34        GBP136m    Mitie 
  Kinross Schools          financing and operation 
                           of four secondary 
                           schools and five primary 
                           schools for the Perth 
                           and Kinross Council 
=======================  =================================  =====  ========  =========  ================== 
 Pinderfields             Design, construct,                2042   35        GBP311m    Cofely 
  and Pontefract           manage, finance and 
  Hospitals                operate a new 708 
                           bed acute hospital 
                           in Pinderfields, West 
                           Yorks and a new diagnostic 
                           and treatment hospital 
                           in Pontefract, West 
                           Yorks for the Mid 
                           Yorkshire NHS Trust 
=======================  =================================  =====  ========  =========  ================== 
 Queen Alexandra          Design and construct              2040   35        GBP255m    Carillion 
  Hospital,                a new hospital and 
  Portsmouth               retained estates work 
                           in Portsmouth 
=======================  =================================  =====  ========  =========  ================== 
 Queen's (Romford)        Design, construct,                2040   36        GBP211m    Sodexo 
  Hospital                 manage, finance, operate 
                           and maintain a new 
                           hospital in Romford 
=======================  =================================  =====  ========  =========  ================== 
                          Design, construct, 
                           finance and maintain 
                           a new 7km dual carriageway 
                           bypassing the small 
                           town of Troissereux, 
 RD901 Road                near Beauvais in France.         2039   25        EUR84m     Bouygues 
=======================  =================================  =====  ========  =========  ================== 
 Redbridge                Deliver health and                2030   25        GBP15m     Rydon 
  & Waltham                social care infrastructure 
  Forest LIFT              for NHS Property Services 
                           and Community Health 
                           Partnerships within 
                           Redbridge and Waltham 
                           Forest in North London. 
=======================  =================================  =====  ========  =========  ================== 
 Renfrewshire             Design, construct,                2038   30        GBP100m    Amey 
  Schools                  manage, finance, operate 
                           and maintain six primary 
                           and four secondary 
                           schools in Renfrewshire, 
                           Scotland 
=======================  =================================  =====  ========  =========  ================== 
 Rhonnda Cynon            Design, construct,                2028   24        GBP22m     Vinci 
  Taf Schools              manage, finance and 
                           operate a primary 
                           school, secondary 
                           school, a day nursery 
                           and an adult learning 
                           centre in South Wales 
                           for Rhondda Cynon 
                           Taf Authority 
=======================  =================================  =====  ========  =========  ================== 
 Royal Canadian           Design, construct,                2040   28        CAD234m    Bouygues 
  Mounted Police           finance, operate and 
  'E' Division             maintain a 72,000 
  Headquarters             sqm headquarters office 
                           facility building 
                           in Surrey, British 
                           Columbia, Canada 
=======================  =================================  =====  ========  =========  ================== 
 Royal School             Design, build, refurbish          2038   30        GBP300m    Carillion 
  of Military              and maintain 32 new 
  Engineering              buildings, 21 refurbishments 
                           and five training 
                           areas across three 
                           UK locations on behalf 
                           of the UK Ministry 
                           of Defence, that supports 
                           the Royal School of 
                           Military Engineering 
=======================  =================================  =====  ========  =========  ================== 
 Salford Hospital         Design, construct                 2042   35        GBP137m    Cofely 
                           and commission new-build 
                           facilities and associated 
                           site infrastructure 
                           for the Salford Royal 
                           NHS Foundation Trust 
=======================  =================================  =====  ========  =========  ================== 
 Salford Schools          Design, build, finance            2033   27        GBP36m     Mitie 
                           and operate two schools 
                           on behalf of the Salford 
                           City Council. 

=======================  =================================  =====  ========  =========  ================== 
 Salford &                Design, build, finance,           2036   26        GBP56m     SPIE 
  Wigan BSF                maintain and operate 
  Phase 1                  two new secondary 
                           schools in Salford 
                           and Wigan, Greater 
                           Manchester on behalf 
                           of Salford City Council 
                           and Wigan Borough 
                           Council. 
=======================  =================================  =====  ========  =========  ================== 
 Salford &                Design, build, finance,           2038   27        GBP70m     SPIE 
  Wigan BSF                maintain and operate 
  Phase 2                  three new secondary 
                           schools in Salford 
                           and Wigan, Greater 
                           Manchester on behalf 
                           of Salford City Council 
                           and Wigan Borough 
                           Council. 
=======================  =================================  =====  ========  =========  ================== 
 Sheffield                Design, build, finance,           2034   25        GBP75m     Vinci 
  BSF                      maintain and operate 
                           two new secondary 
                           schools and one new 
                           special educational 
                           needs secondary school 
                           in Sheffield for Sheffield 
                           City Council 
=======================  =================================  =====  ========  =========  ================== 
 Sheffield                Design, construction,             2036   32        GBP26m     Dalkia 
  Hospital                 financing and management 
                           of a new 168 bed wing 
                           at the Sheffield Northern 
                           General Hospital for 
                           the Sheffield Teaching 
                           Hospitals NHS Foundation 
                           Trust 
=======================  =================================  =====  ========  =========  ================== 
 Sheffield                Design, construct,                2030   26        GBP53m     Kier 
  Schools                  finance and operate 
                           two primary schools 
                           and two secondary 
                           schools for Sheffield 
                           City Council 
=======================  =================================  =====  ========  =========  ================== 
 South Ayrshire           Design, construct,                2039   33        GBP76m     Mitie 
  Schools                  finance and operate 
                           of three primary schools, 
                           two secondary academy 
                           schools and a new 
                           performing arts annex 
                           at an existing academy 
                           for South Ayrshire 
                           Schools 
=======================  =================================  =====  ========  =========  ================== 
 South East               Design, construct,                2026   25        GBP80m     Carillion 
  London Police            finance and operate 
  Stations                 four police stations 
                           in South East London 
                           for the Mayor's Office 
                           for Policing and Crime 
=======================  =================================  =====  ========  =========  ================== 
 Southmead                Design, construct,                2049   35        GBP431m    Carillion 
  Hospital                 finance, operate and 
                           maintain an 800-bed 
                           acute hospital on 
                           a single site at Southmead 
                           in North Bristol, 
                           on behalf of the North 
                           Bristol NHS Trust. 
=======================  =================================  =====  ========  =========  ================== 
 South West               Design, construct,                2042   34        GBP227m    Interserve 
  (Enniskillen)            finance and maintain 
  Hospital                 a new acute hospital 
                           and key worker accommodation 
                           at Enniskillen in 
                           Northern Ireland 
=======================  =================================  =====  ========  =========  ================== 
 Staffordshire            Develop, design, construct,       2030   25        GBP40m     Integral 
  LIFT                     invest in and maintain 
                           health and social 
                           care facilities 
=======================  =================================  =====  ========  =========  ================== 
 Stoke Mandeville         Design, finance, construct,       2034   30        GBP40m     Sodexo 
  Hospital                 refurbish, operate 
                           and maintain a new 
                           hospital facility 
                           for the Buckingham 
                           Hospitals NHS Trust 
=======================  =================================  =====  ========  =========  ================== 
 Sussex Custodial         Build and service                 2031   30        GBP20m      Capita 
  Services                 custody centres in 
                           Sussex for the Police 
                           and Crime Commissioner 
                           for Sussex (formerly 
                           the Sussex Police 
                           Authority). The centres 
                           are at Worthing, Chichester, 
                           Brighton and Eastbourne 
=======================  =================================  =====  ========  =========  ================== 
 Tameside General         Design, construct                 2041   34        GBP78m     Cofely 
  Hospital                 and commission new-build 
                           facilities and associated 
                           site infrastructure 
                           for the Tameside Hospital 
                           NHS Foundation Trust. 
=======================  =================================  =====  ========  =========  ================== 
 Tyne & Wear              Design, construct,                2031   25        GBP23m     Carillion 
  Fire Stations            manage, finance and 
                           operate seven fire 
                           station facilities 
                           and a headquarters 
                           building in Tyne and 
                           Wear for the Tyne 
                           and Wear Fire and 
                           Civil Defence Authority 
=======================  =================================  =====  ========  =========  ================== 
                          Design, construct, 
                           finance and maintain 
                           3 new buildings on 
                           the Bourgogne university 
                           campus in France and 
 University                the refurbishment 
  of Bourgogne             of an existing one.              2040   27        EUR20m     Bouygues 
=======================  =================================  =====  ========  =========  ================== 
 University               Construct and manage              2046   40        GBP160m    Lend Lease 
  of Sheffield             a new student village 
  Accommodation            at the University 
                           of Sheffield 
=======================  =================================  =====  ========  =========  ================== 
 West Lothian             Design, construct,                2039   31        GBP60m     Dawn Construction 
  Schools                  finance and operate 
                           two new schools, Armadale 
                           Academy and the Deans 
                           Community High School 
                           for West Lothian Council 
=======================  =================================  =====  ========  =========  ================== 
 West Middlesex           Design, construct,                2036   35        GBP60m     Bouygues 
  Hospital                 finance, operate and 
                           maintain a new 228 
                           bed hospital for West 
                           Middlesex University 
                           Hospital NHS Trust 
=======================  =================================  =====  ========  =========  ================== 
 Willesden                Design, construct,                2034   32        GBP24m     Accuro 
  Hospital                 manage and finance 
                           a community hospital 
                           in north London for 
                           NHS Brent 
=======================  =================================  =====  ========  =========  ================== 
 Wooldale Centre          Design, construct,                2029   25        GBP24m     Mitie 
  for Learning             manage, finance and 
                           operate the Wooldale 
                           Centre for Learning 
                           consisting of a Centre 
                           for Learning (CfL) 
                           comprising a secondary 
                           school with sixth 
                           form, public library, 
                           primary school and 
                           nursery on a large 
                           site in Northamptonshire 
=======================  =================================  =====  ========  =========  ================== 

                          Design, build, finance, 
                           maintain and operate 
                           of a new penitentiary 
                           institution at business 
                           park Hoogtij in Zaanstad,                                    Ballast 
 Zaanstad Prison           the Netherlands.                 2041   25        EUR160m     Nedam 
=======================  =================================  =====  ========  =========  ================== 
 

21. Corporate Subsidiaries

The following subsidiaries have not been consolidated in these Financial Statements, as a result of applying IFRS 10 and Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27). See Note 1 for details on the Corporate Subsidiaries.

 
                                                   Ownership 
 Name                                 Country       interest 
------------------------------------  -----------  --------- 
 HICL Infrastructure 1 SARL           Luxembourg   100.0% 
------------------------------------  -----------  --------- 
 HICL Infrastructure 2 SARL           Luxembourg   100.0% 
====================================  ===========  ========= 
 Infrastructure Investments Limited   United 
  Partnership                          Kingdom     100.0% 
====================================  ===========  ========= 
 

22. Subsidiaries

The following project subsidiaries have not been consolidated in these Financial Statements, as a result of applying IFRS 10 and Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27):

 
                                           United 
 2003 Schools Services Limited              Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 Ashburton Services Limited                 Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 Annes Gate Property Plc*                   Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 Alpha Schools Highland Limited **          Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 Axiom Education (Edinburgh) Limited*       Kingdom      100.0% 
=========================================  ============  ====== 
 Axiom Education (Perth & Kinross)         United 
  Limited*                                  Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 Boldon School Limited                      Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 ByCentral Limited*                         Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 By Education (Barking) Limited*            Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 ByWest Limited*                            Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 Consort Healthcare (Blackburn) Limited*    Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 Consort Healthcare (Mid Yorks) Limited*    Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 CVS Leasing Limited                        Kingdom      87.6% 
=========================================  ============  ====== 
                                           United 
 Derby School Solutions Limited*            Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 Education 4 Ayrshire Limited*              Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 Enterprise Civic Buildings Limited*        Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 Enterprise Education Conwy Limited*        Kingdom      90.0% 
=========================================  ============  ====== 
                                           United 
 Enterprise Healthcare Limited*             Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 H&D Support Services Limited*              Kingdom      100.0% 
=========================================  ============  ====== 
 Green Timbers Limited Partnership         Canada        100.0% 
=========================================  ============  ====== 
                                           United 
 Information Resources (Oldham) Limited*    Kingdom      90.0% 
=========================================  ============  ====== 
                                           United 
 Metier Healthcare Limited                  Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 Newport Schools Solutions Limited*         Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 Newton Abbot Health Limited*               Kingdom      100.0% 
=========================================  ============  ====== 
 Pi2 B.V.                                  Netherlands   100.0% 
=========================================  ============  ====== 
                                           United 
 PFF (Dorset) Limited*                      Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 Ravensbourne Health Services Limited*      Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 Services Support (Cleveland) Limited*      Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 Services Support (Gravesend) Limited*      Kingdom      72.9% 
=========================================  ============  ====== 
                                           United 
 Services Support (Manchester) Limited*     Kingdom      72.9% 
=========================================  ============  ====== 
                                           United 
 Sussex Custodial Services Limited*         Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 THC (OJR) Limited*                         Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 THC (QAH) Limited*                         Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 TW Accommodation Services Limited          Kingdom      100.0% 
=========================================  ============  ====== 
                                           United 
 Willcare (MIM) Limited*                    Kingdom      100.0% 
=========================================  ============  ====== 
 

* = Reporting date 31 December

** = Reporting date 31 January

All other reporting dates are 31 March.

END

This information is provided by RNS

The company news service from the London Stock Exchange

END

FR DMGZKNFKGNZM

(END) Dow Jones Newswires

May 24, 2017 02:00 ET (06:00 GMT)