Annual Results Announcement

RNS Number : 6316H

HICL Infrastructure Company Ld

21 May 2014

ANNUAL RESULTS FOR YEAR TO 31 MARCH 2014

The Directors of HICL Infrastructure Company Limited announce the results for the year ended 31 March 2014.

Highlights

· Second interim dividend of 3.60 pence per share declared, achieving target of 7.1 pence per share for the year, with good cash cover of 1.51 times.

· Strong operational and cashflow performance from the Group's portfolio, benefiting from active management and accretive acquisitions made over the last two years.

· Profit before tax of £153.8m (2013 restated: £93.1m)¹.

· Directors' valuation of the portfolio of £1,500.6m², up from £1,213.1m at 31 March 2013 and £1,437.6m at 30 September 2013, with the weighted average discount rate reducing from 8.4% to 8.2% over the year.

· Net asset value per share (post distribution) of 123.1p, a 6.7p increase from 116.4p as at 31 March 2013 and up 3.5p from 119.6p as at 30 September 2013.

· 11.9% total return for the year (based on dividends and NAV) and 9.1% p.a. since IPO.

· Net investment of £230.0m during the year, comprising 16 new investments, six incremental acquisitions and two disposals - funded from equity raised including £109.0m by way of tap issues.

· Group revolving credit facility with four lenders renewed and extended to £150m.

· Agreement with Investment Adviser on revised fees to benefit the Group and shareholders

· Demand for UK infrastructure investments currently outstripping supply, impacting prices.

· Pipeline of new investment opportunities being evaluated both in the UK and overseas, with success dependant on price competition.

Graham Picken, Chairman of the Board, said:

"I am pleased to report a strong set of results, a consequence of successful, accretive acquisitions made over the last two years. The Group's portfolio is performing well, with strong cash generation, which has enabled the Company to meet its dividend target for the year of 7.1p per share with good cash cover.

The Group made 16 new investments and six incremental acquisitions in the year, investing £230.0m net of disposal proceeds. This was funded by deploying proceeds from the March 2013 equity raising and from subsequent tap issues, and by utilising the Group's revolving credit facility.

The Board is extremely pleased with the performance of the Group's portfolio and we remain confident of achieving the target total dividend of 7.25p per share for the year to 31 March 2015. This will be paid (for the first time) by way of four quarterly interim dividends, the first of which is expected to be declared in July and paid in September."

Tony Roper, Director at InfraRed Capital Partners Limited (the Company's Investment Adviser), said:

"The Investment Adviser continues to focus on asset management and to exercise pricing discipline on new investments. The latter was illustrated by the acquisition of only four investments from the 18 auction processes in which the Group participated this year.

The prices of UK investments have increased to levels which are at times unattractive for the Group. Elsewhere, we have made progress in France and Ireland and the Group is in the process of making an investment in a PPP project in Australia. Whilst geographic diversity has certain benefits, the geographic composition of the portfolio is expected to remain materially the same. Despite competitive markets, we still believe we will be able to make further investments, both in the UK and, selectively, overseas."

¹The Company has prepared its accounts for the year to 31 March 2014 in accordance with IFRS, including IFRS 10 and the Investment Entity amendments, and 2013 comparatives have been restated. These require the Company to prepare IFRS financial statements which do not consolidate the project company subsidiaries and hence closely resemble the pro-forma Investment Basis financial reporting which have been presented in prior years.

² includes £5.1m of future investment obligations

Contacts for the Investment Adviser on behalf of the Board:

InfraRed Capital Partners Limited: +44 (0) 20 7484 1800

Tony Roper

Keith Pickard

Robin Hubbard

Contacts for Tulchan Communications: +44 (0) 20 7353 4200

Martha Walsh

Victoria Huxster

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 2014 will be available to shareholders in early June, and an electronic version will be available from the Company's website at that time.

Results Summary

for the year to	31 March 2014	31 March 2013
		Restated
• Total Income	£169.3m	£112.7m
• Profit before tax	£153.8m	£93.1m
• Earnings per share	13.1p	10.4p

• Second interim dividend per share	3.60p	3.575p
• Total dividend per share in year	7.10p	7.00p


• Net Asset Value (NAV) per share before deducting the declared second interim dividend	126.7p	120.0p¹

• NAV per share after deducting the declared second interim dividend	123.1p	116.4p

¹ The NAV per share at 31 March 2013 is that applicable to the 976.4m Ordinary Shares in issue on the record date of 1 March 2013. The 140m Ordinary Shares issued on 27 March 2013 pursuant to the New Ordinary Shares Prospectus of 26 February 2013 were not eligible for the second interim dividend of 3.575p. See Note 11 to the financial statements.

Section 1 : Chairman's Statement

Introduction

I am pleased to be writing to you with another good set of results for the Group. Overall performance was strong, with the portfolio generating good underlying profitability and cashflows. The quality of the Group's assets, coupled with their active investment management, has ensured that the dividend target of 7.1p per share was comfortably met.

Social infrastructure assets remain attractive with their low-volatility, inflation-linked yield. With increasingly high valuations attributed to assets in the UK secondary market, the Investment Adviser has had to maintain its disciplined approach to acquisition pricing. The Group has still been able to source attractive new investments in the UK, as well as diversifying into new geographies such as France, and, since the year end, Australia.

Financial Results and Performance

Financial results

The Company has prepared its accounts for the year to 31 March 2014 in accordance with IFRS, including IFRS 10 and the Investment Entity amendments. These require the Company to prepare IFRS financial statements which do not consolidate the project company subsidiaries and hence closely resemble the pro-forma Investment Basis financial reporting which has been presented in prior years.

Profit before tax was £153.8m (2013 restated: £93.1m) and earnings per share were 13.1p (2013 restated: 10.4p).

Cash received from the portfolio by way of distributions, capital repayments and fees was £112.4m (2013 restated: £78.2m). After Group costs, net cash inflows of £94.9m adequately covered the £67.1m distributions paid in the year.

The Company raised a total of £109.0m (before expenses) during the year through two tap issues totalling 83.7m new ordinary shares in July 2013 and February 2014.

In March 2014, the Group renewed and increased its revolving credit facility on improved terms with a larger bank group.

More details of the financial results are set out in Section 2.6.

Portfolio Performance

The Group's portfolio continues to perform well, and as at 31 March 2014 consisted of 93 social and transportation infrastructure projects (79 as at 31 March 2013). The return generated from the portfolio (after rebasing it for new investments, disposals and distributions) was 9.5% (2013: 8.9%) which reflects not only the unwinding of the discount rate, but also value-accretive acquisitions and disposals as well as value enhancements such as insurance premia reductions and other cost saving initiatives.

In January 2014, the Group announced a transaction to rationalise its portfolio through the divestment of an 80% stake in two PFI projects, Swindon Police and Dorset Police, for £9.2m. A £1.1m profit was made on the original cost of these investments.

Although the Group began the financial year with no projects in construction, it has subsequently acquired or invested in four projects in their construction phases. These represent around 7% of the portfolio by value as at 31 March 2014. The largest of these, Allenby and Connaught MoD Accommodation PFI project (5% of the portfolio by value), is expected to complete the final phase of its construction on schedule later this year.

Valuation

As in previous periods, the Investment Adviser has prepared a fair market valuation for each investment in the portfolio as at 31 March 2014.

The Directors have satisfied themselves as to the methodology used, the economic assumptions adopted, and the discount rates applied. The Directors have again taken independent third party advice on the valuation carried out by the Investment Adviser.

The Directors have approved the valuation of £1,500.6m for the portfolio of 93 investments as at 31 March 2014, which includes £5.1m of future subscription obligations. This compares with £1,437.6m as at 30 September 2013, and £1,213.1m as at 31 March 2013 (including £12.7m of subscription obligations). An analysis of the increase in the valuation is detailed in Section 2.7.

The net asset value ("NAV") per share was 126.7p at 31 March 2014 (2013 restated: 120.0p). After taking into account the 3.6p per share second interim distribution, the NAV per share at 31 March 2014 was 123.1p; an increase of 5.8% over the comparable figure (restated) as at 31 March 2013. This increase is attributable to higher valuations of infrastructure investments, the strong operational performance of the portfolio, issuance of shares at a premium to NAV and value-accretive new investments.

Acquisitions

The Group made 16 new investments and six incremental acquisitions during the year for a total consideration of £239.2m including £5.1m commitment for future loan note subscriptions. Further details are set out in Section 2.6 and Note 12b to the accounts.

Despite an increasingly competitive environment, the Investment Adviser has been able to build a consistently strong pipeline of potential acquisitions, sourced through a wide network of relationships, and has successfully secured a fair share of the opportunities presented, sometimes on an exclusive basis. During the year the Investment Adviser participated in 18 auctions and was successful in only four, indicating that prices were generally higher than the Group was prepared to pay.

Since the financial year-end the Group has acquired a 10% interest in the N17/N18 Road Project in Ireland, an additional 16.5% interest in the Miles Platting Project and is in the process of acquiring a 5.85% interest in the AquaSure desalination PPP project, for a combined investment of approximately £52.1m.

Fees and Costs

Given the growth in the size of the Group's investment portfolio, the Investment Adviser engaged with the Board to review the management fee structure. The outcome was agreement to two changes.

Firstly, the provision for a higher annual management fee for projects in ramp-up or under construction was removed, thereby simplifying the fee structure. Secondly, a further taper of the annual management fee was introduced.

As there are no performance fees or any other fees which might be paid to the Investment Adviser from the project companies, the Directors believe the Company leads the sector in terms of transparency and enjoys highly competitive terms.

Distributions

On 13 May 2014, the Board declared a second interim dividend of 3.6p per share for the year to 31 March 2014 (2013: 3.575p). This brought the total distributions paid for the year to 7.1p, representing 1.4% growth on the prior year total of 7p. As in prior years, a scrip dividend alternative will be offered to shareholders on the register as at 23 May 2014.

After taking advice from the Company's corporate broker and the Investment Adviser, the Board has decided to move to paying dividends to shareholders on a quarterly basis, the first of which will be declared in July and paid in September.

It remains the Board's intention to offer a scrip alternative in respect of the quarterly dividends; further details will be provided in July when the first distribution is declared.

Risks and Uncertainties

As infrastructure, particularly social infrastructure, has matured as an asset class so the benefits have become more widely recognised and understood. With growth in the universe of PFI/PPP investments having slowed considerably due to less procurement in the UK, the balance between project supply and investor demand has now tipped in favour of the vendors. This has served to drive up prices, thus reducing returns, a phenomenon which has been particularly evident in competitive auctions.

As the Group invests in project companies, the key revenue risk is the risk of deductions from the availability payment made by the public sector client under each concession contract. To date, through effective asset management, performance deductions made under the contracts have been relatively small and borne by subcontractors. We recognise the importance of working with all stakeholders in a project to ensure value for money is achieved.

The Group seeks investments which are serviced by reliable and experienced, third-party operators. Although there is always a risk that some may not perform satisfactorily or, in extremis, go out of business, diversification of the projects' service partners, provides some mitigation.

With a large portfolio, some projects not unexpectedly experience operating issues from time to time. The Investment Adviser's team closely monitors each project, attends Board meetings and client liaison discussions, and takes appropriate action to resolve issues in a timely manner. There are currently no performance or credit issues of any materiality upon which to report at a portfolio level.

The Group currently has 13 investments located in Scotland representing 15% of the portfolio by value as at 31 March 2014. If Scotland votes for independence in September, it is unclear how, if at all, this would affect these investments which are secured under legal concession contracts from public sector counterparties and provide essential assets and services. The Board will take appropriate action when the outcome is known.

Financial regulation continues to change and affect the Company. The Board monitors such changes, evaluates the likely impact, and takes advice and acts appropriately to ensure that the business is compliant. The key elements of regulatory change that affect us are outlined below.

Corporate Governance and Regulation

As in previous years, all of the Company's Directors will offer themselves for re-election at the AGM. This is more regular than the Company's Articles require but from a governance perspective adopts best practice.

For the first time, the Annual Report includes a Remuneration Committee Report. This sets out the Directors remuneration policy and remuneration recommendations for the coming year and will be included in resolutions for shareholder approval at the forthcoming AGM on 22 July 2014.

As announced on 6 January 2014, following the UK Financial Conduct Authority's rules concerning non-mainstream pooled investments ("NMPI"), the Board confirmed that it conducts the Company's affairs, and intends to continue to conduct the Company's affairs, such that the Company would qualify for approval as an investment trust if it were resident in the United Kingdom. It is the Board's intention that the Company will continue to conduct its affairs in such a manner and that IFAs should therefore be able to recommend its Ordinary Shares to ordinary retail investors in accordance with the NMPI rules.

During the year, in addition to the Board meeting shareholders at the Home Office event, I held a number of one-on-one meetings and was able to feedback the results of these discussions to the Board. Good and effective communication with shareholders is enormously important to the Board which receives regular reports from the Investment Adviser and the Company's broker, both of whom participate in many meetings with existing and prospective investors.

In July 2013, the Alternative Investment Fund Managers Directive ("AIFMD") came into force. The Company has taken advantage of the transitional arrangements which allow a one year's period of grace in order to put in place the policies, procedures and registration to enable compliance by July 2014.

After taking professional and legal advice, the Board has determined that it will become a self-managed Alternative Investment Fund ("AIF"). The Company will, in due course, register as a self-managed AIF, and a small number of changes to processes and procedures are being implemented to enable the Board to fulfil its prescribed role in the supervision of investment decisions and the management of risk across the Group.

Outlook

With the attractions of infrastructure investments better understood, new and additional capital has entered the market. As a result, it has become more challenging to source investment opportunities with the risk-reward characteristics of earlier acquisitions. That said, the Company continues to benefit from the Investment Adviser's network of long-established relationships with potential vendors and developers. The Group has proven to be a reliable party capable of evaluating acquisition opportunities efficiently, having the finance available and possessing the ability to execute a purchase on time and without last minute renegotiation.

Whilst the Group is evaluating more potential investments overseas, and also investments in projects under construction, it is unlikely that the overall composition of the portfolio will change materially.

New investments that meet our requirements continue to come to market and include both single and portfolio opportunities. Despite the more competitive environment in which we now trade, the prospects remain good for the Group to make further value-accretive investments this year.

With the recent acquisitions funded from the Group's revolving credit facility, the Directors are considering the timing and quantum of further tap issuance.

The Board is pleased with the performance of the Group's investment portfolio and the returns generated. We are confident that previous guidance we gave of 7.25p per share aggregate dividend for the year to March 2015 remains appropriate.

Graham Picken

Chairman

20 May 2014

Section 2 : Strategic Report

2.1 Introduction

This Strategic Report sets out:

2.2 - the Company's Objectives;

2.3 - the Strategy adopted to deliver these Objectives;

2.4 - the Company's Business Model;

2.5 - the Investment Policy and Current Acquisition Strategy;

2.6 - an Operational and Financial Review for the year, including KPIs;

2.7 - the Directors' Valuation of the Group's Portfolio as at 31 March 2014;

2.8 - the current Outlook; and

2.9 - the Ten Largest Investments;

References in this report to the Company mean HICL Infrastructure Company Limited (and together with its consolidated subsidiaries, the "Group").

The Company's business purpose is to invest shareholders' funds for returns from capital appreciation, investment income or both.

The Company is an investment company with a current portfolio of investments in social, transportation and related infrastructure projects, mostly structured under a public sector infrastructure procurement model (called PFI or PPP in the UK, and PPP or P3 in other countries) which has been used by a number of countries over the last 20 years to procure new infrastructure investment. These projects provide serviced assets in a number of sectors including education, health, justice, road, rail and general accommodation sectors (such as libraries, barracks, social housing). The majority of the Company's investments are in projects which are operational, having successfully completed their construction phase.

2.2 Objectives

The aim of the Company is to invest shareholders' funds in a portfolio of lower risk, predominantly operational, infrastructure projects to earn a return that allows the Company to pay a sustainable annual dividend with the potential for an element of capital growth.

Financial

In the year to 31 March 2014, the Company was targeting a total dividend of 7.1p per share and this has been achieved. The Directors have set a target for the year to 31 March 2015 of 7.25p per share which is considered achievable based on current portfolio performance. Future targets will be set having regard to the portfolio performance and the long-term sustainability of the dividend level.

Dividends paid are expected to be cash covered (with an allowance for that part of the portfolio's assets still under construction).

The dividend is paid gross as the Company is registered in Guernsey and the Company also offers shareholders a scrip dividend alternative to cash dividends as this can be advantageous to certain investors.

The Company is also seeking to preserve the capital value of a shareholder's investment and deliver an element of capital growth. At the time of the March 2013 share capital raising, the target total return was forecast to be circa 7.0% p.a. over the long term for investors acquiring shares at a price of 119.5p per share. The Board still considers this achievable.

Part of the attraction of the Group's investment portfolio is its positive correlation to inflation (described in more detail in Section 2.7). In making new investments, an important consideration is that this correlation is maintained and, where possible, enhanced.

As the Group has overseas investments, it has a foreign currency hedging policy (explained in Section 2.6) which forward hedges investment cashflows and seeks to reduce balance sheet volatility from currency fluctuations.

Whilst the Group does not need to make further investments to achieve the targeted returns, further growth provides the opportunity to enhance returns and manage any price premium to NAV per share. Issuing further shares, either by way of a prospectus or tap issue, is the main mechanism by which the Board moderates any share price premium. New shares are only issued at or above the current NAV per share, thus avoiding NAV dilution.

Non-Financial

The key non-financial objectives of the Group are:

· To seek and maintain strong relationships with all key stakeholders of both the Company and the Group's investments, including clients, local communities, key contractors and financial lenders. Experience has demonstrated that good relationships and a positive approach to partnering and working together helps to deliver the required investment returns.

· To build and develop a portfolio of investments in infrastructure projects and companies with diversified clients, funders and subcontractors.

· To manage the Group and its investments in accordance with the Company's stated Corporate Social Responsibility statements and policies.

· Through disclosure, case studies, and site visits, to inform existing shareholders and potential investors and increase the understanding of infrastructure as an investment class.

2.3 Strategy

New Investments

Any new investment that the Group makes needs to meet the Investment Policy published by the Company, as well as the Acquisition Strategy which the Company reviews and publishes regularly (both are set out in Section 2.5). All new investments need to support the achievement of the Objectives set out in Section 2.2 above, and balance the risks involved against the projected forecast returns, to enable the Group to achieve its long-term targets without materially changing the risk profile of the Group.

Part of the Investment Strategy is to acquire new investments which are value accretive to the current portfolio. Accretion can be achieved through the initial gross yield, the potential total return, and the inflation correlation.

When acquiring a new investment, the Group seeks sufficient percentage ownership to allow it to appoint at least one director to the project company board. The size of a new investment is less important but must be less than 20% of the current portfolio valuation.

The Group seeks new investments in both the UK and in certain overseas countries where there is a well-developed market for infrastructure assets and appropriate laws, regulations and government sponsorship.

Portfolio Diversification

The Group's strategy is to have a diversified portfolio by asset type, asset location (geography), public sector counterparties, supply chain contractors, and project company managers. The Board believes diversification is important in the portfolio as it mitigates risk.

As at 31 March 2014, the Group had the following geographic diversity:

As at 31 March 2014	Number of Investments	Percentage of Directors' Valuation
England, Wales and Northern Ireland	73	76.8%
Scotland	13	15.1%
Europe (excluding UK)	5	6.4%
Canada	2	1.7%

Each project subcontracts the delivery of services to one or more experienced facilities managers specialising in a particular field (e.g. catering; cleaning; security; mechanical and engineering maintenance). The Group's portfolio of investments has a diversified range of facilities management companies.

Portfolio and Asset Management

The active management of investments to achieve the desired investment returns is a key strategy.

With oversight from the Company, the Investment Adviser is tasked with the day-to-day management of the portfolio and reports to the Board formally on a quarterly basis (or more frequently if there are matters to discuss, note and approve).

This management task is carried out by two functions with the Investment Adviser's team; Portfolio Management and Asset Management.

Portfolio Management is concerned with the financial performance and, working closely with the Asset Managers, it seeks to:

· monitor the financial performance of each investment against Group targets and forecasts;

· consider the portfolio composition and mix with respect to achieving the Group's desired target returns within the agreed risk appetite;

· manage the investment cashflows from the Group's investments;

· minimise cash drag (having un-invested cash on the balance sheet) and improve cash efficiency generally;

· manage the processes and analysis which underpin the draft semi-annual valuation of the Group's portfolio submitted to the Board;

· ensure good financial management of the Group and each investment, having regard to accounting, tax, and debt covenants;

· manage cash and debt at the Group level; and

· hedge non-sterling investments.

Asset Management complements Portfolio Management and is focused on the successful management and operational performance of the Group's investments. Activities include:

· the management oversight of each investment through the appointment of a director to each project company board;

· where the project involves the construction of new facilities, the monitoring of progress to ensure successful delivery;

· the building of closer, open relationships with all parties involved;

· the facilitation of early resolution of operational issues as they arise, including contractual disputes; and

· the working together with project companies to achieve contract variations, both to extend the scope of the project, and to find cost savings and efficiencies.

2.4 Business Model

Introduction

The Company is a Guernsey-registered investment company with an independent board of directors whose shares are listed on the London Stock Exchange.

Through the group structure, the Company owns a portfolio of over 90 infrastructure investments and is seeking to protect and enhance value through active management of the existing portfolio and the sourcing of new investments using the expertise of the Investment Adviser.

The Company has a 31 March year-end and announces interim results in November and full year results in May. It also publishes two interim management statements a year, normally in February and July.

The Company's Board and the Committees

The Board of the Company comprises six independent, non-executive directors whose role is to manage the governance of the Company in the interests of shareholders and other stakeholders. In particular the Board approves and monitors adherence to the Investment Policy and Acquisition Strategy, determines risk appetite of the Group, sets Group policies and monitors the activities and performance of the Investment Adviser and other key service providers against agreed objectives.

The Board meets a minimum of four times a year for regular Board meetings and there are a number of other ad hoc meetings dependent upon business need. In addition, the Board convenes five committees, including a newly formed Risk Committee, which meet on a regular basis, such that on four occasions a year the business of the Company spans two days to cover committee agendas.

Management of the Group's portfolio, as well as investment decisions within agreed parameters, are delegated to the Investment Adviser, who reports regularly to the Board. At quarterly Board meetings, operating and financial performance of the portfolio, its valuation and the appropriateness of the risk and controls are reviewed.

In July 2013, the Alternative Investment Fund Managers Directive ("AIFMD") came into force. The Company is deemed to be an Alternative Investment Fund ("AIF") under the Directive. Having taken advice, the Board has determined that the most appropriate status for the Company is to be a self-managed AIF and expects to complete its registration before the expiry of the AIFMD transitional period on 22 July 2014. The practical implications of these changes are modest, being mainly to formalise the current working practices into an appropriately documented reporting structure..

The Investment Adviser

The Investment Adviser (since launch) is InfraRed Capital Partners Limited (formally HSBC Specialist Fund Management Limited until its management buy-out in 2011), part of the InfraRed Group.

The InfraRed Group is a privately owned, dedicated real estate and infrastructure investment business, managing a range of infrastructure and real estate funds and investments. The InfraRed Group has a strong record of delivering attractive returns for its investors, which include pension funds, insurance companies, funds of funds, asset managers and high net worth investors domiciled in the UK, Europe, North America, Middle East and Asia.

The InfraRed Group comprises InfraRed Capital Partners (Management) LLP and a number of wholly-owned subsidiaries, two of which are regulated by the Financial Conduct Authority (including the Investment Adviser). The InfraRed Group currently manages six infrastructure funds and five real estate funds with total equity under management of more than US$7 billion. The InfraRed Group has over 100 employees and partners, based mainly in offices in London and with smaller offices in Paris, Sydney, Hong Kong and New York.

Since 1998, the InfraRed Group (including predecessor organisations) has raised 13 private institutional investment funds investing in infrastructure and property, in addition to the Group and The Renewables Infrastructure Group Limited (which are publicly listed investment companies). InfraRed Capital Partners (Management) LLP is 80.1 per cent. owned by 27 partners through InfraRed Capital Partners (Management) LLP, and 19.9 per cent. owned by a subsidiary of HSBC. This ownership structure was the result of a management buyout of the specialist infrastructure and real estate business which was previously known as HSBC Specialist Investments Limited (HSIL) which was completed in April 2011.

The infrastructure investment team within the InfraRed Group currently consists of 50 investment professionals, all of whom have an infrastructure investment background. The team currently has approximately 500 years' combined experience in the infrastructure sector, and approximately 270 years with the InfraRed Group (including predecessor organisations), and has a broad range of relevant skills, including private equity, structured finance, construction and facilities management.

The Company has an advisory contract with the Investment Adviser which can be terminated with 12 months' notice. The Investment Adviser is also operator of the Group's Limited Partnership, through which the Group's investments are held. Details of the fees paid to the Investment Adviser during the year are set out in Section 2.6.

Other Key Service Providers

Apart from the Investment Adviser, the Company and the Group have the following key service providers:

Provider		Role
Dexion Capital (Guernsey) Ltd		Administrator and Company Secretary to the Company
RSM FHG & Associés		Administrators of the two Luxembourg Sarls
Canaccord Genuity Ltd		Brokers to the Company
Tulchan Communications LLP		Financial PR advisers to the Company
Carey Olsen		Legal advisers to the Company as to Guernsey law
Hogan Lovells International LLP		Legal advisers to the Company as to English law
Capita Registrars Guernsey		Registrars to the Company
KPMG Channel Islands Limited		Independent Auditor
Lloyds, NAB, RBS and SMBC		Lenders to the Group via the £150m revolving credit facility

The Board reviews the performance of all key service providers on an annual basis.

Group Financing, Gearing and Interest Rate Hedging

The Board's policy is that the Company should not hold material amounts of uninvested 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 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 Company raised £109.0m (before expenses) of new equity in the year to 31 March 2014 from tap issues of 66.7m Ordinary Shares in July 2013 and 17.0m Ordinary Shares in February 2014. The net proceeds from the share issues were used to pay down drawings on the Group's revolving credit facility.

There was good take-up by shareholders of the scrip dividend alternatives to the two interim dividends with 7.4m (2013: 4.5m) new Ordinary Shares being issued in April 2013 and December 2013.

In March 2014 the Group signed an increase and extension to its existing £100m debt facility which was due to mature in February 2015. The new multi-currency revolving credit facility is £150m and is available to be drawn in cash and letters of credit for future investment obligations. It matures in May 2016. The Company took the opportunity to broaden its credit providers beyond its current relationship banks, Royal Bank of Scotland and National Australia Bank, who jointly provided the existing facility, and include Lloyds Bank and Sumitomo Mitsui Banking Corporation.

As at 31 March 2014, the Group's drawings under the £150m facility were nil by way of cash and £5.3m by way of letters of credit and guarantees. The Group had net cash as at 31 March 2014 of £42.7m (2013: £146.0m).

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. On this basis, the Group had a net cash position of 2.1% at 31 March 2014 (2013: 10.0% net cash). This analysis excludes any debt in the Group's investments, which are typically leveraged.

Since 31 March 2014, the Group has utilised a further £52.1m in order to make two new investments and the acquisition of an incremental stake. These are the 5.85% stake in the AquaSure PPP project in Victoria, Australia (due to complete shortly), a 10% interest in the N17/N18 Gort to Tuam road PPP in the Republic of Ireland, and a further 16.5% interest (equity only) in the Miles Platting Social Housing PFI project in Manchester.

To manage interest rate risk the Group can use interest rate swaps to hedge drawings under the Group's debt facility. During the year the Group did not utilise any interest rate swaps due to the limited period during which the Group was a net borrower under the facility.

The Company's equity base now comprises almost 6,000 shareholders, broadly split 50:50 between retail investors and institutions. With the share liquidity that a larger market capitalisation offers, the Company's shares are increasingly attractive to large institutional investors.

How a new Investment is made

The Group acquires the majority of its investments from vendors wishing to sell equity in projects once they are operational. In addition, the Group will invest in projects during their construction phase when suitable opportunities arise. Further details of the Group's Investment Policy and Acquisition Strategy are set out in Section 2.5.

Under agreed delegations from the Board, the Investment Adviser identifies potential investments which, if they fall within the Investment Policy and agreed Acquisition Strategy, progress to approval from the Investment Adviser's Investment Committee. Potential acquisitions falling outside these agreed delegations require Board/Risk Committee approval before proceeding. Similar procedures apply if an acquisition is proposed from a fund managed by the Investment Adviser where, in such circumstances, a Buyside Committee is formed, a third party valuation is obtained, the Board approves the transaction and shareholder approval is sought for the related party aspect. Further details are set out in Section 2.5.

As the Group often acquires investment stakes in the secondary market, the long-term contractual arrangements are already in place with limited scope for amendment during the remaining life. Prior to acquisition appropriate due diligence is undertaken to ensure the projects are appropriately structured, the pass-down of obligations to subcontractors is adequate, and that all material counterparties are creditworthy.

New investments are typically financed by borrowing under the Group's committed revolving debt facility. This allows new investments to be made in a timely manner.

Processes by which the Group bids and acquires new investments can vary both in terms of the steps and time taken. The main methods by which the Group interacts with vendors are:

· by way of an auction process, either run by the vendor or using a third party adviser;

· through a one-on-one negotiation with a vendor, usually via a long-standing relationship of the Investment Adviser; and

· in the case of acquiring additional stakes in existing investments, by agreement with the co-shareholder.

Each process involves different steps and varying degrees of due diligence. The Investment Adviser has been successful in making a number of acquisitions through the negotiated process, thus minimising the transaction risks. Bid costs are incurred in carrying out due diligence, involving third party advisers, and the Investment Adviser seeks to focus the cost exposure to the later stages of the acquisition process.

For a typical social infrastructure investment, due diligence will include:

· confirmatory legal due diligence, to check the project is appropriately structured

· technical due diligence, looking at the adequacy of the lifecycle budgets and plans compared to the current state of the built asset

· insurance due diligence, looking at the level of insurances and likely future premiums

· commercial, valuation, tax and accounting due diligence, normally carried out by the Investment Adviser

Additional specialist advice is taken when considering investments with variable revenue streams: for example a traffic consultant will be retained when evaluating a toll road investment.

A typical Infrastructure Project explained

Each investment is made in a project typically with a long-term concession contract with a finite life and limited, if any, residual value. The counterparty to the concession agreement is a public sector body, such as a local authority for a schools project and a NHS Trust for a hospital project.

The Group's investments are structured as equity, subordinated debt and occasionally mezzanine debt stakes in unlisted single-purpose companies ("SPC"), with the sole purpose of delivering the asset and services in accordance with the terms of the project agreement.

Normally all services specified in the project agreement are subcontracted to specialist providers. Construction is subcontracted to a construction company (or companies in joint venture if a large asset) on a fixed priced, date certain construction contract to design and build the asset required under the project agreement.

The operational services such as the provision of catering, cleaning, maintenance, and similar services are subcontracted to a specialist facilities management ("FM") company. Projects either have a single FM subcontractor or more than one, depending on the services being provided.

Day-to-day management of the SPC is either outsourced on a fixed price contract, or is performed by an in-house team. Contract terms vary but usually the contract lengths are between 3 and 5 years.

The key performance indicators ("KPIs") and the service levels set out in the project agreement are mirrored as far as possible in the subcontracts such that the operating risks of the project are passed down to the individual subcontractors who are best placed to manage those risks. The term of the operating subcontracts normally matches the term of the project agreement and the costs of such services are largely fixed at the outset and subject to increases linked to inflation.

The majority of the Group's investments are in projects structured with an availability-based revenue stream such that the public sector client makes a contractual payment under the project agreement provided the asset, such as a school, hospital, prison or road, is available for use. The availability payments are normally linked to inflation, either wholly or partially, depending on whether the project's costs are indexed or fixed.

Each project is typically leveraged with amortising debt which is fully repaid one to two years prior to expiry of the concession. The majority of the projects do not require refinancing during their concessions lives. The interest rate on the debt is either fixed rate or inflation linked, such that changes in interest rates are largely mitigated. The debt raised for a project is secured against that project's cashflows alone, and so is non-recourse to both the Group and its other investments.

Most projects are required by their lenders to withhold some cash in reserve accounts to pay for expected future capital expenditure as well as to potentially service debt if there are operating issues. These cash balances are deposited across a spread of investment grade banks to mitigate default risk and the interest income, which is for the benefit of the project (and hence the Group's investment), varies according to short term deposit rates.

Valuation and Group Investment Cash Flows

As the Group's investments are in projects with long-term contractual income and cost these investments are valued using a discounted cashflow analysis of the forecast investment cashflows from the project.

The key external drivers when forecasting each project's cashflows are the inflation rate; the deposit interest rate; and the local corporation tax rate. These cashflows are used with a market discount rate to derive the value of each investment.

The Investment Adviser makes forecast assumptions for each of these based on market data and economic forecasts, and the Company publishes twice a year the Directors' valuation, the assumptions used and key sensitivities to the valuation of the portfolio (see Section 2.7). The Directors' valuation is the key component in determining the Company's NAV and so the Directors seek a third party opinion on the valuation prepared by the Investment Adviser.

In the current portfolio, the majority of projects are operational and so the number of investments with construction risk is small (four as at 31 March 2014). An investment in a project under construction can offer a higher overall return compared to buying an investment in an operational project, but it does not usually yield during the construction period and there is the risk that delays in construction affect the investment value.

2.5 Investment Policy and Current Acquisition Strategy

Investment Objectives

The Company seeks to provide investors with long-term distributions, at levels that are sustainable, and to preserve the capital value of its investment portfolio over the long term with potential for capital growth. The Company targets an annual distribution of at least 7.10p per Ordinary Share, with the prospect of increasing this figure provided it is sustainable with regard to the portfolio's forecast operational performance and the prevailing macro-economic outlook.

The Company is targeting an IRR of 7 to 8% on the original issue price of its Ordinary Shares in March 2006, to be achieved over the long term via active management, including the acquisition by the Group (being the Company and its wholly-owned subsidiaries) of further investments to complement the Current Portfolio and by the prudent use of gearing.

Investment Criteria

The Group's Investment Policy is to ensure a diversified portfolio which has a number of similarly sized investments and is not dominated by any single investment. The Group will seek to acquire infrastructure equity with similar risk/reward characteristics to the current portfolio, which may include (but is not limited to):

· public sector, government-backed or regulated revenues;

· concessions which are predominantly "availability" based (i.e. the payments from the concession do not generally depend on the level of use of the project asset); and/or

· companies in the regulated utilities sector.

The Group will also seek to enhance returns for Shareholders by acquiring more diverse infrastructure investments. The Directors currently intend that the Group may invest in aggregate up to 35% of its total assets (at the time the relevant investment is made) in:

· project companies which have not yet completed the construction phases of their concessions but where prospective yield characteristics and associated risks are deemed appropriate to the investment objectives of the Company. This may include investment in companies which are in the process of bidding for concessions, to the extent that such companies form part of a more mature portfolio of investments which the Group considers it appropriate to acquire; and/or

· project companies with "demand" based concessions where the Investment Adviser considers that demand and stability of revenues are not yet established, and/or project companies which do not have public sector sponsored/awarded or government-backed concessions; and

· to a lesser extent (but counting towards the same aggregate 35%, and again at the time the relevant investment is made) other funds that make infrastructure investments and/or financial instruments and securities issued by companies that make infrastructure investments, or whose activities are similar or comparable to infrastructure investments.

Geographic Focus

The Directors believe that attractive opportunities for the Group to enhance returns for investors are likely to arise outside as well as within the UK (where the majority of the projects in the current portfolio are based). The Group may therefore make investments in the European Union, Norway, Switzerland, the Americas and selected territories in Asia and Australasia. The Group may also make investments in other markets should suitable opportunities arise.

The Group will seek to mitigate country risk by concentrating on investment opportunities in jurisdictions where it considers that contract structures and enforceability are reliable, where (to the extent applicable) public sector obligations carry a satisfactory credit rating and where financial markets are relatively mature.

Single investment limit and diversity of clients and suppliers

For each new acquisition that is made, the Company will ensure that the investment acquired does not have an acquisition value (or, if it is an additional stake in an existing investment, the combined value of both the existing stake and the additional stake acquired) greater than 20% of the total gross assets of the Company immediately post acquisition. The total gross assets will be calculated based on the last published gross investment valuation of the portfolio plus acquisitions made since the date of such valuation at their cost of acquisition.

The purpose of this limit is to ensure the portfolio has a number of investments and is not dominated by any single investment.

In selecting new investments to acquire, the Investment Adviser will seek to ensure that the portfolio of investments has a range of public sector clients and supply chain contractors, in order to avoid over-reliance on either a single client or a single contractor.

Other investment restrictions

The Company is subject to certain investment restrictions pursuant to the UKLA Listing Rules. These are as follows:

(a) The Company's primary objective is investing and managing its assets with a view to spreading or otherwise managing investment risk. The Company must, at all times, invest and manage its assets in a way which is in accordance with the Investment Policy;

(b) The Company will not conduct a trading activity which is significant in the context of the Group as a whole. The Company will not cross-finance businesses forming part of the Group's investment portfolio; and

(c) No more than 10%, in aggregate, of the Company's assets will be invested in other listed closed-ended investment funds.

The Listing Rules may be amended or replaced over time. To the extent that the above investment restrictions are no longer imposed under the Listing Rules those investment restrictions shall cease to apply to the Company.

Group Gearing

The Group intends to make prudent use of leverage to finance the acquisition of investments, to enhance returns to investors and to finance outstanding subscription obligations.

Under the Articles, the Group's outstanding borrowings, excluding intra-group borrowings and the debts of underlying investee companies, but including any financial guarantees to support subscription obligations, are limited to 50% of the Adjusted Gross Asset Value (meaning the fair market value, without deductions for borrowed money or other liabilities or accruals, and including outstanding subscription obligations) of its investments and cash balances at any time.

The Group may borrow in currencies other than pounds sterling as part of its currency hedging strategy.

Amendments

Any material amendments to the Investment Policy will require the approval of Shareholders.

New investments and conflicts of interest

It is expected that further investments will be sourced by the Investment Adviser and it is likely that some of these will be investments that have been originated and developed by, and may be acquired from, the Investment Adviser (or its affiliates) or from a fund managed by the Investment Adviser (or its affiliates). In order to deal with these potential conflicts of interest, detailed procedures and arrangements have been established to manage transactions between the Group, the Investment Adviser (or its affiliates) or funds managed by the Investment Adviser (or its affiliates) (the "Rules of Engagement"). If the Group invests in funds managed or operated by the Investment Adviser (or its affiliates), the Group shall bear any management or similar fees charged in relation to such fund provided, however, that the value of the Group's investments in such funds shall not be counted towards the valuation of the Group's investments for the purposes of calculating the fees/profit share payable to the Investment Adviser or the General Partner.

It is possible that in future the Group may seek to purchase certain investments from funds managed or operated by the Investment Adviser (or its affiliates) once those investments have matured and to the extent that the investments suit the Group's investment objectives and strategy. If such acquisitions are made, appropriate procedures from the Rules of Engagement will be put in place to manage the conflict.

Key features of the Rules of Engagement include:

· the creation of separate committees within the Investment Adviser. These committees represent the interests of the vendors on the one hand (the "Sellside Committee") and the Group on the other (the "Buyside Committee"), to ensure arm's length decision making and approval processes. The membership of each committee is restricted in such a way as to ensure its independence and to minimise conflicts of interest arising;

· a requirement for the Buyside Committee to conduct an independent due diligence process on the assets proposed to be acquired prior to making an offer for their purchase;

· a requirement for any offer made for the assets to be supported by a report on the Fair Market Value for the transaction from an independent expert;

· the establishment of "Chinese walls" between the Buyside and Sellside Committees with appropriate information barrier procedures to ensure information that is confidential to one or the other side is kept confidential to that side; and

· the provision of a "release letter" to each employee of the Investment Adviser who is a member of the Buyside and Sellside Committees. The release letter confirms that the employee shall be treated as not being bound by his/her duties as an employee to the extent that such duties conflict with any actions or decisions which are in the employee's reasonable opinion necessary for him/her to carry out as a member of the Buyside or Sellside Committee.

In considering any such acquisition the Directors will, as they deem necessary, review and ask questions of the Buyside Committee and the Group's other advisers, to ensure that the Directors are satisfied that the terms of any such acquisitions are negotiated on an arm's length basis.

Current Acquisition Strategy

In seeking new investments, the Group adopts an acquisition strategy which has been consistently applied since May 2009. The focus remains on social and transportation infrastructure (such as PFI/PPP/P3) concessions, predominantly with availability-based contracts and likely to be operational, although projects under construction will be considered. Of possible secondary interest, but only selectively, are:

· debt funding of infrastructure projects (without taking an equity interest), where attractively priced and appropriately structured;

· toll roads where there is proven demand history and an appropriate risk/return profile; and

· regulated utilities and transmission systems, if of an appropriate scale.

The Board and Investment Adviser consider the Acquisition Strategy on a regular basis and there is a specific strategy discussion held at least once a year.

In setting the above strategy, the Board and the Investment Adviser carried out a fundamental analysis of certain market segments to ensure they are complementary or additive to the existing portfolio. All potential investment opportunities are carefully screened by the team, initially to determine whether the opportunity is suitable for the Group, including assessing the counterparties and the jurisdiction.

When seeking to acquire an investment, the proposition needs to be fully assessed and vetted by the Investment Committee of the Investment Adviser, and this committee meets on a number of occasions before an investment is acquired for the Group. Detailed, thorough commercial and technical due diligence is undertaken by the team and includes a peer-group review. Third party legal, technical and insurance due diligence is commissioned as appropriate to support the acquisition.

The characteristics of new investments are not expected to deviate materially from the underlying risk and reward characteristics of the existing portfolio, nor should any new investment cashflows be subject to risk or revenue dynamics which are substantially different from the profile already established.

2.6 Operational and Financial Review

Key Financial Objectives and Performance Indicators

The Company has been targeting a long-term total return (IRR) of 7 to 8% on the original 100p issue price of its Ordinary Shares in March 2006. For the period since IPO until 31 March 2014 the total shareholder return has been 9.7% p.a. as measured by share price appreciation and dividends, or 9.1% p.a. as measured by Net Asset Value (NAV) appreciation and dividends. The difference results from the share price premium to NAV per share.

The Company has paid a progressive dividend which has risen from 6.1p per share in the year to 31 March 2007 to 7.1p per share in the year ended 31 March 2014. It was cash covered 1.5 times in the year to 31 March 2014. (2013: 1.4 times). This equates to a dividend yield of 5.2% based on the share price of 135.9p at 31 March 2014 (2013: 5.3%).

Set out below is a table of the Company's key performance indicators ("KPIs") used by the Board to measure the performance of the Company against targets set.

KPI	31 March 2014	31 March 2013	Target
Dividends declared in year	7.1p per share	7.0p per share	7.0p per share 2013 7.1p per share 2014
Total return in year (NAV per share growth plus dividends per share)	11.9%	9.4%	7% to 8% p.a. as set out at IPO
Total return in year (share price plus dividends per share)	10.3%	14.7%	7% to 8% p.a. as set out at IPO
Total return since IPO (NAV plus dividends per share)	9.1%	8.9%	7% to 8% p.a. as set out at IPO
Total return since IPO (share price plus dividends per share)	9.7%	9.7%	7% to 8% p.a. as set out at IPO
Cash cover in year	1.5 times	1.4 times	To be cash covered
Ongoing Charge in year	1.15%	1.19%	To reduce ongoing charges where possible
Weighted average discount rate	8.2%	8.4%	Market rate
Rebased growth	9.5%	8.9%	Seek to outperform the discount rate
Weighted average portfolio life	22.0 years	22.3 years	Seek to maintain, where possible, by suitable acquisitions
Weighted average life of portfolio project debt	20.3 years	20.7 years	Limit the refinancing risk in the portfolio
Ten largest investments as percentage of the portfolio by value	40%	45%	Seek to reduce to increase diversification
Largest investment (as percentage of portfolio valuation)	7%	8%	To be less than 20%
Inflation correlation of the portfolio (See Section 2.7 for details)	0.6% change in gross return for a 1.0% p.a. change in inflation	0.6% change in gross return for a 1.0% p.a. change in inflation	Maintain current correlation

Acquisitions

As noted in the Chairman's Statement, the Group made 16 new investments and six incremental acquisitions in the period for an aggregate consideration of £239.2m including £5.1m commitment for future loan note subscriptions. A summary is set out in the table below and further detail can be found in Note 12b to the accounts.

Amount	Type	Stage	Project	Sector	Stake Acquired	Date
£9.8m¹	New	Operational	Medway LIFT	Health	60%	April-13
£9.8m¹	New	Operational	Redbridge and Waltham Forest LIFT	Health	60%	April-13
£16.0m	New	Operational	Tameside Hospital	Health	50%	May-13
£10.3m	New	Operational	Addiewell Prison	Accommodation	33%	May-13
£41.6m¹	New	Operational	Enniskillen Hospital	Health	39%	May-13
£41.6m¹	New	Operational	University of Sheffield	Accommodation	50%	May-13
£107.9m¹	New	Operational	Gloucester Fire & Rescue	Fire, Law & Order	75%	July-13
	New	Construction	Allenby & Connaught MoD Accommodation	Accommodation	12.5%
	New	Operational	Salford Hospital	Health	50%
	New	Operational	Miles Platting Social Housing	Accommodation	33%
£1.9m	Follow-on	Operational	Birmingham & Solihull LIFT - Dental Hospital	Health	30%	Aug-13
£10.2m¹	Follow-on	Operational	Newton Abbott Hospital	Health	50%	Aug-13
£10.2m¹	Follow-on	Operational	Connect	Transport	5%	Aug-13
£9.2m¹	New	Operational	Falkirk NPD Schools	Education	29%	Oct-13
£9.2m¹	New	Operational	Brighton Hospital	Health	50%	Oct-13
£5.4m¹	New	Construction	University of Bourgogne	Education	85%	Jan-14
£5.4m¹	New	Construction	RD901 Road	Transport	90%	Jan-14
£3.4m¹	Follow-on	Operational	Derby Schools	Education	20%	Jan-14
	Follow-on	Operational	Newport Schools	Education	20%
	Follow-on	Operational	Medway Police	Fire, Law & Order	20%
£23.5m¹	New	Construction	Royal School of Military Engineering	Accommodation	26%	Jan-14
£23.5m¹	New	Operational	Sheffield BSF Schools	Education	40%	Jan-14
£239.2m

1 Aggregate value of consideration paid for multiple acquisitions announced on the same day.

Since the year end, there has been the following new investment activity:

· a new investment of a 10% interest in the N17/N18 Gort to Tuam PPP Scheme. The project is located in the Republic of Ireland, and has just reached financial close. It involves the financing, design, construction and operation of a new 57km dual carriageway section of the N17/N18 near Galway for the National Roads Authority of Ireland. Construction of the new road will commence in June 2014 and is expected to be completed in November 2017.

· an incremental acquisition of a further 16.5% interest (equity only) in the Miles Platting Social Housing PFI Project ("Miles Platting Project") in Manchester from Adactus Housing Association Limited.

· On 15 April 2014, shareholders approved the acquisition, from a fund managed by the Investment Adviser, of a 5.85% equity stake in the AquaSure desalination PPP Project near Melbourne in the State of Victoria, Australia. The process of acquiring this AUS$ 84.5m investment has commenced and will complete shortly.

Acquisitions during the year increased the Group's portfolio to 93 social and transportation infrastructure investments as at 31 March 2014. The acquisitions completed since the year-end and highlighted above have increased the portfolio to 95 investments, of which five are still in construction.

In 2013, the Group signed a conditional contract to acquire an investment in the Bradford Schools BSF (Phase 1) Project for £6.5m. This has been delayed pending agreement of a settlement agreement between the project parties which has now been signed. This transaction will proceed once third party consents and pre-emption processes are complete.

During the year the Group participated in 18 auction processes and was successful in only four, losing the remainder either through the bidding process or through pre-emption by another shareholder. The remaining investments were secured via the Investment Adviser relationships and direct negotiations with vendors. Recent experience suggests that certain disposal processes are attracting prices well above what the Group and the Investment Adviser is prepared to pay. If this continues, the rate at which further acquisitions are made in the UK is likely to slow.

Portfolio Performance

During the year the portfolio increased from 79 to 93 investments, with the top 10 holdings representing 40% of the Directors' valuation as at 31 March 2014. The portfolio once again performed as expected and delivered strong cashflows supporting an increased dividend which was well covered from portfolio returns. This strong performance is the result of value accretive acquisitions made in the last two years and management across the portfolio.

Each of the projects has a public sector client, such as a local government education department, and users such as teaching staff and pupils. The feedback from these important stakeholders was again, generally, very positive on the level of engagement, interaction and influence of the Group's representatives across the portfolio.

As with any operational business, projects have challenges from time to time and during the year a number of projects incurred deductions due to operational issues which reflected the fact that not all the KPIs in the relevant project agreement had been met at all times. Generally, any deductions will have been reclaimed from the relevant service provider although occasionally there may be a cost to equity. On a portfolio basis, there is negligible impact on investment performance from operating issues and the benefits from cost saving and other incremental revenue-generating initiatives, such as contract variations, significantly outweigh any deductions.

On one road project acquired as part of a portfolio of assets, there are a number of ongoing issues including possible construction defects with the road surface, drainage issues, insufficient forecast lifecycle budget and lower than expected revenues. The asset management team is working though these issues but, as there is no certainty of a successful outcome, the valuation of this investment has been prudently written down. Being a small investment, the impact on the whole portfolio is negligible.

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 reviewed. The Investment Adviser's risk and control function monitors financial creditworthiness, while the asset management team monitors project performance for service issues which may indicate financial difficulties. The review processes have not identified any significant counterparty concerns for any of the portfolio's construction or facilities management contractors.

Asset Management and Contract Variations

Each project is assigned an asset manager by the Investment Adviser to represent the Group's interests at the project company board meetings by monitoring performance of the project and ensuring the implementation of appropriate remedial action if and when operational issues arise.

The asset managers ensure that new investments are integrated into the governance and reporting processes employed across the portfolio, as well as focusing on implementing asset level business plans. The aim is to drive additional value through such initiatives as incorporating a new project within the Group's group insurance scheme or changing the provider of management services.

The Investment Adviser added two more asset managers to its staff during the year.

Project or contract variations are a way of enhancing value across the portfolio both for the Company and other stakeholders. Clients typically make variation requests to amend the scope of services delivered, be it a capital project or an additional or amended service for which the project earns incremental revenue. These vary considerably in size. During the year the Investment Adviser processed a number of variations including:

· A £20m variation to support the expansion and redevelopment of emergency service, maternity and neo-natal services at Barnet Hospital, North London was completed in December 2013 ahead of the originally agreed programme. The works formed an integral part of a significant re-organisation of NHS facilities within Barnet, Enfield and Haringey to deliver improvements in patient care.

· At Blackburn Hospital, a programme of variations continued during the year. They included the conversion of an existing ward into a specialist Dementia Ward with a "home in hospital" environment designed to help patients feel more calm and relaxed in what can otherwise be a distressing situation.

· At the Medium Support Helicopter Aircrew Training facility at RAF Benson in Oxfordshire, the simulators continue to be upgraded through variations to ensure that the training carried out in the simulators remains at the vanguard of the operational helicopter requirement. Following extensive upgrade the Puma Mk2 simulator is now training pilots full time.

At Stoke Mandeville Hospital a serious fire broke out in one of the wards in June 2013 which resulted in 48 beds being taken out of service across two wards. All of the building systems operated as designed and the Hospital Trust initiated their major accident plan. Despite the incident occurring at a weekend, the project team was able to mobilise surveyors to scope out the remedial works and commence the planning process.

Following round the clock repairs the least damaged ward was returned to full operational service within a week and a total of 85% of affected bed space was back in service within two months. The worse affected bed bays were finally handed back to the client after just three months. The cost of the remedial works was covered by the project insurances. Fortunately no one was injured as a result of the fire. The Investment Adviser and project company staff liaised closely with the Hospital Trust's senior management throughout the incident and remediation period.

Disposals

As part of the ongoing review of the portfolio, the Group undertook the sale of two investments in December 2013 generating aggregate disposal proceeds of £9.2m. These comprised 80% stakes in the Swindon Police and the Dorset Police projects which had been acquired as part of a portfolio from infrastructure funds managed by Barclays. As with a previous disposal, the purchaser of the two stakes was Vinci Pensions Limited, an affiliate of the 20% co-shareholder in the project, Vinci Investments Limited.

Accounting

The Company has adopted IFRS 10, 11 and 12 as well as Investment Entities - Amendments to IFRS 10, IFRS 12 and IAS 27 following their official adoption by the EU in November 2013. These revised accounting standards require the Company to prepare IFRS financial statements which do not consolidate project subsidiaries, in a similar manner to the pro-forma Investment basis tables that the Company prepared previously.

The Company and its advisers have concluded that these revised standards improve stakeholders' understanding of the financial performance and position of the Group. In particular they provide shareholders with further information regarding the Group's net asset value, coupled with greater transparency in the Company's capacity for investment and ability to make distributions.

This change in accounting has had a material impact on the Consolidated Group's financial statements as described in Note 2(b) to the financial statements, and the 2013 comparatives have been restated accordingly.

The Finance Act 2009 introduced new legislation in respect of the requirement of large companies to appoint a Senior Accounting Officer ('SAO') to ensure the establishment and maintenance of appropriate tax accounting arrangements. Growth in the revenues and assets in the year has resulted in the Group falling within SAO legislation thresholds. This means the main UK Group will be allocated an HMRC customer relationship manager and be required to confirm to HMRC that it has appropriate tax accounting arrangements and reporting processes in place.

Income and Costs

Summary income statement

	Year to 31 March 2014	Year to 31 March 2013
£m		Restated

Total Income¹	175.7	111.1

Fund expenses & finance costs	(21.9)	(18.0)

Profit/(loss) before tax	153.8	93.1

Tax	(0.2)	(0.1)

Earnings	153.6	93.0

Earnings per share	13.1p	10.4p

¹Includes forex hedging movement of £6.3 gain (2013: £1.8m loss)

Total Income has increased 58% to £175.7m (2013 restated: £111.1m) which represents the return from the portfolio recognised in the income statement from dividends, sub-debt interest and valuation movements. The drivers for the increase are contributions from acquisitions combined with a 2% reduction in UK corporation tax rates and the 0.2% reduction in the weighted average discount rate applied in the Directors' valuation supported by continued outperformance from the portfolio. Further detail on the valuation movements is given in Section 2.7.

Foreign exchange movements have not materially impacted profits as £6.7m foreign exchange losses (2013 restated: £2.1m gain) on revaluing the non-UK assets in the portfolio using year-end exchange rates have been offset by £6.3m foreign exchange hedging gains (2013 restated: £1.8m loss).

Earnings were £153.6m, an increase of £60.6m against the prior year. This reflected growth in the portfolio, the reduction in the UK corporation tax rate and a fall in the average discount rate, coupled with a good performance from the portfolio. Earnings per share were 13.1p (2013 restated: 10.4p).

Cost analysis

	Year to 31 March 2014	Year to 31 March 2013
£m		Restated

Interest expense	2.3	3.2

Investment Adviser fees	17.2	13.0

Auditor - KPMG - for the Group	0.3	0.3

Directors fees & expenses	0.2	0.2

Project bid costs	0.7	0.2

Professional fees	1.0	1.0

Other expenses	0.2	0.1

Expenses & finance costs	21.9	18.0

Total fees accruing to InfraRed Capital Partners Limited (the Investment Adviser) were £17.2m (2013: £13.0m) for the year, comprising the 1.1% per annum management fee (1.0% for assets above £750m, 0.9% for assets above £1.5bn and 1.5% for assets in construction - no longer applicable from 1 April 2014), a 1.0% fee on acquisitions made from third parties, and the £0.1m per annum advisory fee.

During the period, the Company and the Investment Adviser agreed to remove the higher management fee for assets in their ramp-up or construction phase such that with effect from 1 April 2014 all assets incur the same management fee per annum as set out above. A new taper level of 0.8% per annum for assets in excess of £2.25bn was also agreed.

In the year, the Group incurred £0.7m of third party bid costs (2013: £0.2m) on unsuccessful bids (mainly legal, technical and tax due diligence). The Investment Adviser earned £2.2m in acquisition fees (2013: £1.7m), for its work on financial, commercial and structuring due diligence on successful acquisitions.

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

Ongoing Charges ('OCs')

	Year to 31 March 2014	Year to 31 March 2013
£m		Restated

Investment Adviser¹	15.0	11.3

Auditor - KPMG, for the Group	0.2	0.3

Directors' fees and expenses	0.2	0.2

Other ongoing expenses	1.2	1.0



Total expenses	16.6	12.8

Average NAV²	1,441.8	1,077.2

Ongoing Charges	1.15%	1.19%

1. Excludes acquisition fees of £2.2m (2013: 2.4m)

2. Excludes £164.7m net share capital raised in March 2013

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 this basis, the Ongoing Charges Percentage is 1.15% (2013: 1.19%) with the reduction arising from further scale economies as the Company grows in size. There are no performance fees paid to any service provider.

Balance Sheet

Summary balance sheet

	31 March 2014	31 March 2013
£m		Restated

Investments at fair value	1,495.5	1,200.4

Working capital	(8.7)	(11.7)

Net cash/(borrowings)	42.7	146.0


Net assets attributable to Ordinary Shares	1,529.5	1,334.7

NAV per Ordinary Share (before distribution)¹	126.7p	120.0p

NAV per Ordinary Share (post distribution)	123.1p	116.4p

1 The NAV per share at 31 March 2013 was that applicable to the 976.4m Ordinary Shares in issue on the record date of 1 March 2013. The 140m Ordinary Shares issued on 27 March 2013 pursuant to the New Ordinary Shares Prospectus of 26 February 2013 were not eligible for the second interim dividend of 3.575p. See Note 11 to the financial statements.

Investments at fair value were £1,495.5m (2013: £1,200.4m) net of £5.1m of future investment obligations on RD901 Road and University of Bourgogne PPP projects. This is an increase from 31 March 2013 of £295.1m or 25%. Further detail on the movement in Investments at fair value is given in Section 2.7.

The Group had cash at 31 March 2014 of £42.7m (2013: net cash of £146.0m) which covers the 3.6p second interim dividend due for payment in June 2014. An analysis of the movements in net cash is shown in the cashflow analysis below.

NAV per share was 126.7p before the 3.6p distribution (31 March 2013: 120.0p). NAV per share has increased by 0.7p more than retained earnings per share over the period as a result of the 83.7m shares issued in July 2013 and February 2014 at a premium to par.

Analysis of the growth in NAV per share

Pence per share

NAV per share at 31 March 2013¹			116.4p

Valuation movements
Reduction in discount rates of 0.2%	3.2p
Reduction in UK tax rates by 2%	1.5p
Lower interest rate to 2018	(0.5)p
		4.2p
Portfolio Performance
Budget NAV growth	0.7p
Project outperformance	1.1p
		1.8p

Accretive Tap Issuance of shares		0.7p

NAV per share at 31 March 2014¹			123.1p

1. Post interim dividend declared

Cashflow Analysis

Summary cash flow

	Year to 31 March 2014		Year to 31 March 2013
£m			Restated

Net cash at start of year		146.0		129.4

Cash from investments¹	112.4		78.2

Operating and finance costs outflow	(17.5)		(13.9)

Net cash inflow before acquisitions/financing		94.9		64.3

Disposal of investments²		8.1		3.9
Cost of new investments		(251.2)		(270.2)

Share capital raised net of costs		107.7		270.1

Forex movement on borrowings/hedging³		4.3		(3.4)
Distributions paid:
Relating to operational investments	(63.0)		(46.6)
Relating to investments in construction	(4.1)		(1.5)

Distributions paid		(67.1)		(48.1)

Net cash at end of year		42.7		146.0

1. The year to 31 March 2014 includes £1.1m profit on disposals (2013: £1.4m).

2. Disposal of £8.1m and profit on disposal of £1.1m equals the proceeds from disposal of investments of £9.2m.

3. Includes amortisation of debt issue costs of £1.1m (2013: £1.7m)

Cash inflows from the portfolio increased to £112.4m (2013: £78.2m). The growth in cash generation was driven by contributions from acquisitions combined with active cash management across the portfolio.

Cost of investments of £251.2m (2013: £270.2m) represents the cash cost of the 16 new investments, the six incremental acquisitions and the £12.7m subscription payment for Perth and Kinross, net of deferred consideration and acquisition costs of £4.5m (2013: £5.1m).

The £4.3m cash inflow (2013: £3.4m cash outflow) in foreign exchange rate hedging arises from the weakening of the Euro against Sterling in the year. The Group enters forward sales to hedge forex exposure on the Dutch High Speed Rail Link, two Irish assets, two French assets and two Canadian assets.

The placing of 83.7m Ordinary Shares via tap issues in July 2013 and February 2014 provided net cash receipts in the year of £107.7m (2013: £270.1m).

Dividends paid increased £19.0m to £67.1m (2013: £48.1m) for the year (being the payment of 3.575p in April 2013 and the payment of 3.5p per share in December 2013). The dividends declared for the year to 31 March 2014 represent a total of 7.1p per share (2013: 7.0p).

Dividend cash cover, which compares operational cash flow of £94.9m (2013: £64.3m) to dividends attributable to operational assets, was 1.51 times (2013: 1.38 times). The proportion of the total dividend attributable to operational assets (93.9%) and construction assets (6.1%) is based on their respective share of the portfolio valuation during the year.

After taking advice from the Company's corporate broker and the Investment Adviser, the Board has decided to move to paying distributions to shareholders on a quarterly basis. We believe that shareholders, particularly smaller retail holders, will appreciate more regular dividends. It is intended that they will be broadly equal in size and will be declared in July, November, February and May, with corresponding payments at the ends of September, December, March and June. Based on this timetable, the first quarterly distribution for the year to 31 March 2015 will be declared in July 2014 and paid on 30 September 2014.

It remains the Board's intention to offer a scrip alternative and further details will be provided in July when the first interim dividend is declared.

Group Debt Facility

In March 2014 the Group's revolving credit facility ("RCF") was increased and extended. The previous £100m RCF, jointly provided by Royal Bank of Scotland and National Australia Bank, which was due to expire in February 2015, was increased to £150m and its term extended to May 2016 with the margin reduced to 2.20%. Lloyds Bank and Sumitomo Mitsui Banking Corporation were added to the facility as two new lenders.

With the RCF now available until May 2016, the Company will be able to confirm sufficient working capital for the financial years ending 31 March 2014 and 31 March 2015 prior to needing to refinance.

While no leverage exists at the Company in Guernsey, the Group's RCF is in place which had no cash drawings at the year end and which for the purposes of the Level 2 measures of the Alternative Investment Fund Managers Directive, does not constitute substantial leverage.

Foreign Exchange Hedging

Foreign exchange risk from non-Sterling assets has been 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 Euros and Canadian Dollars and by debt drawings under the Group's credit facility. This has minimised the volatility in the Group's 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 1.0p for a 10% forex movement.

2.7 Valuation of the Group's Portfolio

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 approval and adoption. The valuation is carried out on a six monthly basis as at 31 March and 30 September each year.

The Directors receive an independent report and opinion on this valuation from a third party valuation expert.

For non-market traded investments (being all the investments in the current portfolio), the valuation principles used are based on a discounted cash flow methodology, and adjusted in accordance with the European Venture Capital Associations' valuation guidelines where appropriate to comply with IAS 39 and IFRS 13, given the special nature of infrastructure investments. If an investment was traded, a market quote would be used.

This is the same method used at the time of launch and in each subsequent six month reporting period (further details can be found in the Company's New Ordinary Shares Prospectus of February 2013, available from the Company's website).

The Directors' Valuation of the portfolio as at 31 March 2014 was £1,500.6m. This valuation compares to £1,213.1m as at 31 March 2013 (up 24%). A reconciliation between the valuation at 31 March 2014 and that shown in the financial statements is given in Note 12a to the consolidated financial statements, the principal difference being the £5.1m outstanding equity commitments on the RD 901 Road and University of Bourgogne PPP projects.

A breakdown in the growth in the Directors' Valuation in the year is tabled below.

Valuation movements during the year to 31 March 2014			£m	Percentage change
Valuation at 31 March 2013			1,213.1
Investments	239.2
Divestments	(9.2)
Cash receipts from investments	(111.3)
		118.7
Rebased valuation of the portfolio		1,331.8

Return from the portfolio	126.5			9.5%
Change in discount rate	36.9			2.8%
Economic assumptions	12.1			0.9%
Forex movement on non-UK investments	(6.7)			(0.5)%
		168.8		12.7%
Valuation at 31 March 2014			1,500.6

Allowing for the acquisitions during the year of £239.2m, the divestments of £9.2m (Swindon Police and Dorset Fire and Police) and investment receipts of £111.3m, the rebased valuation was £1,331.8m. The growth in the valuation of the portfolio at 31 March 2014 over the rebased value was 12.7%. This increase is a product of the return from the portfolio, the reduction in the discount rate and UK corporate tax rates partly offset by the lowering of deposit rate assumptions and forex movements.

Return from the Portfolio

The return from the portfolio of £126.5m (2013: £97.5m) represents a 9.5% (2013: 8.9%) increase in the rebased value of the portfolio. As expected, the majority of this 'return' (8.3%, being the average) was generated by the unwinding of the weighted average discount rate used to value the portfolio in the year.

The remaining 1.2% (2013: 0.5%) of incremental value arose as a result of the net positive contributions from a number of factors including:

· Contributions from new investments;

· Acquisitions made at, or above, the portfolio discount rate;

· Gains from disposals;

· Net operational out performance including savings from portfolio insurances;

· UK actual inflation in the year being lower than the 2.75% p.a. valuation assumption; and

· Impairment of an operational road project.

Fair value for each investment is derived from the application of an appropriate discount rate to the investment's future cash flows to give the present value of those cashflows. The Investment Adviser exercises its judgment in assessing the expected future cash flows from each investment based on the detailed concession life financial models produced by each Project Company. Cash flows are adjusted where necessary to include the Group's economic assumptions as well as any specific operating assumptions.

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 project phase and market participants' appetite for these risks.

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

Discount rate	31 March 2014	30 September 2013	31 March 2013
Range	7.8% to 11.0%	7.9% to 10.0%	8.0% to 10.0%
Phase
Operational phase	8.2%	8.3%	8.4%
Construction phase	8.9%	9.0%	n/a
Portfolio - weighted average	8.2%	8.3%	8.4%

The average discount rate reflecting market pricing for an operational asset has been assessed as 8.2% - down 0.2% from the prior year - reflecting market conditions discussed in Section 2.6 above.

An analysis of the weighted average discount rates for the investments in the portfolio analysed by territory is shown below:

Country	31 March 2014			31 March 2013 Discount rate	Movement
Country	Long term Government Bond yield	Risk Premium	Discount rate	31 March 2013 Discount rate	Movement
UK	3.4%	4.8%	8.2%	8.4%	(0.2%)
Canada	2.9%	5.0%	7.9%	8.1%	(0.2%)
France	3.0%	7.6%	10.6%	n/a	n/a
Holland	2.5%	5.8%	8.3%	8.6%	(0.3%)
Ireland	3.2%	5.8%	9.0%	10.0%	(1.0%)
Portfolio	3.3%	4.9%	8.2%	8.4%	(0.2%)

In the UK, there is sufficient market data on discounts rates and hence the risk premium is derived from this market discount rate for operational social and transportation infrastructure investments less the appropriate long-term Government Bond yield. For Canada, France, Holland and Ireland, where there is less market data, the "bottom up" approach is adopted 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, Canada, France and Holland are currently low, this is reflected in higher country risk premium, which includes an allowance for increases from these historically low yields.

An analysis of the movements in the weighted average risk free rate and risk premium for the social and transportation infrastructure assets is shown below:

Year Ending	31 March 2014	31 March 2013	Movement
Government Bond yield	3.3%	2.9%	0.4%
Risk premium	4.9%	5.5%	(0.6)%
Discount Rate	8.2%	8.4%	(0.2)%

The 0.2% reduction is attributable to a more competitive environment for social infrastructure assets. While there is a steady supply of new investment opportunities, new market entrants, attracted by the favourable risk-adjusted returns, have driven prices upwards, and hence caused discount rates to fall during the year.

Valuation Assumptions and Sensitivities

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

		31 March 2014	31 March 2013
Inflation	UK (RPI and RPIx)¹	2.75% p.a.	2.75%
	Euro (CPI)	2.00% p.a.	2.00%
	Canada (CPI)	2.00% p.a.	2.00%
Deposit Rates	UK short term	1.0% p.a. to March 2018	1.0% p.a. to March 2017
Deposit Rates	UK long term	3.5% p.a. thereafter	3.5% p.a. thereafter
Foreign Exchange rates	CAD / GBP	0.54	0.65
Foreign Exchange rates	EUR / GBP	0.83	0.84
Tax Rate	UK corporation tax	21%	23%

1. Retail Price Index or Retail Price Index excluding mortgage interest payments

These assumptions are judgements in determining the valuation and, as in previous years, the Company prepares certain key sensitivities, which are set out in Note 4 to the accounts.

In the UK, RPI and RPIx were 2.5% for the year ending March 2014. 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 2014 forecasts for RPI out to December 2015 range from 2.6% to 4.2% from 24 independent forecasters as compiled by HM Treasury, with an average forecast of 3.3%.

Changing the assumption for future inflation by a 1.0% p.a. increase (i.e. from 2.75% p.a. to 3.75% p.a. for the UK investments) has the effect of increasing the forecast return from the portfolio from 8.2% (being the weighted average discount rate) to 8.8%.

As at 31 March 2014 cash deposits for the portfolio were earning interest at a rate of 0.5% 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 2015 of 1.2%.

The portfolio valuation assumes UK deposit interest rates are 1% p.a. to March 2018 and 3.5% p.a. thereafter. This extends the period of 1% deposit interest rates as applied in the March 2013 valuation, which assumed 1% deposit interest rates to March 2017 and 3.5% thereafter. These changes have reduced the portfolio valuation by approximately £5.7m and are included within the £12.1m aggregate increase in portfolio value attributable to changes in Economic Assumptions.

The UK corporation tax assumption for the portfolio valuation is 21%, which has reduced by 2% from 23% at March 2013, to reflect the current rate of UK corporation tax. This change has increased the portfolio valuation by approximately £17.8m and is included within the £12.1m aggregate change in portfolio value attributable to changes in Economic Assumptions.

Additional Sensitivities

The Investment Adviser has prepared two additional sensitivities this year, for lifecycle and tax rates.

Lifecycle (also called asset renewal or major maintenance) concerns the replacement of material parts of the 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 obligation, together with the budget and the risk, is usually either taken by the project company (and hence the investor) or is subcontracted and taken by the FM contractor. The lifecycle sensitivities consider a +/-10% change to the projected budget for lifecycle where the risk is taken by the project company.

Of the 20 largest assets, only 11 have lifecycle as a project company obligation (i.e. not subcontracted). This is broadly typical of the portfolio as a whole.

The tax sensitivity looks at the effect on changing the tax rates by +/- 5% each year and is provided to show that tax can be a material variable in the valuation of investments.

The analysis to prepare the above sensitivities was carried out on the 20 largest investments (61% of the portfolio by value).


Lifecycle - 11 investments¹	Change in assumption	-10% change p.a.	+10% change p.a.
Lifecycle - 11 investments¹	Change in value	+4.9% increase	-4.9% decrease
Lifecycle - 20 investments²	Change in assumption	-10% change p.a.	+10% change p.a.
Lifecycle - 20 investments²	Change in value	+2.6% increase	-2.6% decrease
Tax Rates	Change in assumption	-5% change in rate p.a.	+5% change in rate p.a.
Tax Rates	Change in value	+3.2% increase	-3.3% decrease

1. Sensitivity on the 11 investments where the project company retains the lifecycle obligation, within the 20 largest investments

2. Sensitivity based on 20 largest investments, of which only 11 have lifecycle as a project company obligation

2.8 Outlook

Portfolio

The current portfolio is performing as expected with no material operating issues. This is due in part to the successful value accretive acquisitions made over the last two years which have been operating and performing in-line or ahead of projections.

Provided unforeseen issues do not arise, the Board is confident that the current portfolio can continue to deliver the targeted returns for the Company. Through careful management, outperformance is possible and the Board regularly reviews the opportunities for this with the Investment Adviser.

As noted in Section 2.6, the Company intends to move to paying quarterly interims dividends to give investors a more regular payment. The first quarterly interim dividend for the year to 31 March 2015 will be announced at the end of July 2014 and paid at the end of September 2014.

Infrastructure Market Developments - UK

The Company's focus has been mainly on secondary, or operational, infrastructure assets, particularly in the UK which has a long history of public sector procurement as a consequence of which it now has the largest number of operational social infrastructure projects of any global economy.

With the maturing of the infrastructure asset class and the greater understanding of its positive investment attributes by the broader investment community, more investors have been seeking to acquire stabilised operational assets in the secondary market. Although the Company was one of the first entrants to the market back in 2006, it has been followed by further listed and unlisted infrastructure funds and, more recently, by institutional investors making direct investments into the asset class. At the same time, the majority of the available equity stakes in the 600+ UK social infrastructure projects have been acquired by long-term, buy-and-hold end investors. The result in the UK is a reduced supply of potential new investment opportunities, with a growing number of investors seeking this type of investment.

Procurement of new infrastructure projects in the UK which would be attractive to the Group remains slow and offers limited potential.

However, new investment opportunities continue to arise in the UK secondary market and, even with more intense competition, the Group is cautiously confident of sourcing new investments with similar risk reward dynamics to the existing portfolio.

Infrastructure Market Developments - Europe, Australia and North America

Outside the UK, investment opportunities vary by country, but with active procurement programmes, the number of potential new investment opportunities continues to grow and the Investment Adviser is using its wide network of relationships to source new opportunities, through the InfraRed offices in New York, Paris and Sydney.

In Europe, the Company made its first two investments in France in January. These were originated through the Investment Adviser's relationship with the Bouygues Group and the Company is optimistic of sourcing further investments in France. In May 2014, the Group secured its third investment in Ireland, an availability-revenue road currently under construction.

The number of projects being procured in France, Belgium and the Netherlands continues to grow and we expect further investment opportunities to arise in the secondary market. There are also several larger multi-jurisdictional portfolios expected to be marketed during the coming year as some unlisted funds mature and look to realise gains for their investors. Competition is expected to be fierce and the Company will continue to be cautious rather than risk overpaying.

The Australian market offers promise with the recently-elected Government indicating its intention to use infrastructure investment, including PPP procurement, as a driver of domestic growth. Whilst the Australian economy is well developed and political risk is low, the long-term foreign exchange and inflation rate risks relative to Sterling are less predictable. Nevertheless, provided new investments meet the investment criteria and objectives on a risk adjusted basis, further opportunities will be considered.

In North America, the largest PPP market remains Canada where there continues to be strong support for P3 procurement. Unfortunately, the tax breaks afforded to domestic pension funds make it challenging for foreign investors to compete for many operational infrastructure assets. The US is a potentially much larger but longer term opportunity. The pace of primary procurement is gradually increasing and, as projects become operational, a secondary market of investment opportunities will develop.

The Group's Investment Pipeline and Acquisition Approach

In the UK, the imbalance between supply and demand for these assets has been driving up the pricing of social and transportation infrastructure investments. The Group has been unsuccessful in a number of auction processes in the last year with pricing levels that the Investment Adviser believes would dilute the Company's ability to meet the return objectives to shareholders. Typically these processes have related to larger investments where the scale of the opportunity attracts a broader universe of bidders. Participating in auction processes is time consuming and often fruitless, but this provides valuable insight into how other parties are pricing investments: not just the yield they are prepared to accept but, to a degree, the underlying cashflows which they assume.

The Investment Adviser is successfully deploying an acquisition strategy built on long-established relationships and direct negotiations with potential vendors. Together with buying incremental stakes in existing projects, the Company has been able to make value-accretive acquisitions without compromising on returns or by making unrealistic assumptions on future forecast cashflows. The Group has also considered assets which some consider too small or too complex, but which can often offer attractive returns.

In addition, the Investment Adviser is actively exploring new investment opportunities outside the UK in developed markets. Only those which fit the Company's Investment Policy and pricing disciplines are considered. Significant due diligence is undertaken in-house by the Investment Adviser before any third-party costs are incurred.

Although there is no exclusive right-of-first-refusal in respect of investments being sold by other infrastructure funds managed by the Investment Adviser, the Company may benefit from these opportunities, and the Board continues to ensure shareholders' interests are protected through establishment of a buy-side engagement committee and independent third-party valuation.

The Company's current portfolio mix geographically is not expected to alter materially, and similarly, the Group's exposure to investments under construction will not materially increase. This is due, in part, to the Group's largest asset in construction, the Allenby and Connaught MoD accommodation project, being expected to achieve final completion this summer.

Overall, the Group still believes it will be able to make further investments in the UK and, selectively, overseas but the rate of growth will be determined by the extent to which price competition impacts value.

2.9 Ten Largest Investments

Set out below are details of the ten largest investments in the portfolio and details of each project. As at 31 March 2014, the largest investment (the Home Office project) accounted for less than 7% (2013: 8%) of the portfolio.


PROJECT	31 March 2014 Valuation as a percentage of Directors' portfolio valuation	31 March 2013 Valuation as a percentage of Directors' portfolio valuation
Directors' Valuation - £m	£1,500.6	1,213.1

Allenby & Connaught	5%	n/a
Birmingham Hospitals	3%	3%
Colchester Garrison	4%	4%
Connect	4%	5%
Dutch High Speed Rail Link	5%	7%
Edinburgh Schools	2%	3%
Highland Schools	3%	3%
Home Office	7%	8%
Oxford John Radcliffe Hospital	2%	3%
Queen Alexandra Hospital	5%	6%
Total - ten largest investments	40%	45%

Consolidated income statement
for the year ended 31 March 2014



			Year ended 31 March 2014		Year ended 31 March 2013 Restated ⃰
	Note			Total		Total
				£million		£million

Investment income	5			169.3		112.7
Total income				169.3		112.7

Fund expenses	6			(19.6)		(14.8)
Profit before net finance costs and tax				149.7		97.9

Finance costs	7			(2.3)		(5.0)
Finance income	7			6.4		0.2
Profit before tax				153.8		93.1

Income tax expense	8			(0.2)		(0.1)
Profit for the year				153.6		93.0

Attributable to:

Equity holders of the parent				153.6		93.0
				153.6		93.0

Earnings per share - basic and diluted (pence)		9		13.1		10.4

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

⃰ Comparative information, including relevant Notes, has been restated as a result of applying IFRS 10, including Investment Entities (Amendments to IFRS10, IFRS 12 and IAS 27).

See Note 2 (b) for details.

Consolidated balance sheet
as at 31 March 2014



		31 March 2014	31 March 2013 Restated ⃰		1 April 2012 Restated ⃰
	Note	£million	£million		£million
Non-current assets
Investments at fair value through profit or loss	12	1,495.5	1,200.4		902.0
Total non-current assets		1,495.5	1,200.4		902.0

Current assets
Trade and other receivables		1.1	0.2		1.8
Other financial assets		0.8	0.8		-
Cash and cash equivalents		42.7	172.9		267.9
Total current assets		44.6	173.9		269.7

Total assets		1,540.1	1,374.3		1,171.7

Current liabilities
Trade and other payables	13	(10.1)	(12.2)		(12.7)
Other current financial liabilities		(0.5)	(0.5)		-
Loans and borrowings	14	-	(26.9)		(138.5)
Total current liabilities		(10.6)	(39.6)		(151.2)

Total liabilities		(10.6)	(39.6)		(151.2)
Net assets		1,529.5	1,334.7		1,020.5

Equity
Ordinary Share capital	15	0.1	0.1		0.1
Share premium	15	1,110.0	992.4		717.6
Retained reserves		419.4	342.2		302.8
Total equity attributable to equity holders of the parent		1,529.5	1,334.7		1,020.5
Total equity		1,529.5	1,334.7		1,020.5
Net assets per Ordinary Share (pence)¹	11	126.7	120.0		116.3
Net assets per C Share (pence)		-	-	98.7

⃰ Comparative information, including relevant Notes, has been restated as a result of applying IFRS 10, including

Investment Entities (Amendments to IFRS10, IFRS 12 and IAS 27). See Note 2 (b) for details.

¹ The Net assets per share at 31 March 2013 is that applicable to the 976.4 million Ordinary Shares in issue on the record date of 1 March 2013. The 140 million Ordinary Shares issued on 27 March 2013 pursuant to the New Ordinary Share Prospectus of 26 February 2013 were not eligible for the second interim dividend of 3.575p.

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 20 May 2014, and signed on its behalf by:

J Hallam G Picken

Director Director

Consolidated statement of changes in shareholders' equity
for the year ended 31 March 2014


Year ended 31 March 2014
		Attributable to equity holders of the parent
	Share capital and share premium		Retained reserves	Total shareholders' equity	Non-controlling interests	Total equity
	£million		£million	£million	£million	£million

Restated shareholders' equity at beginning of year	992.5		342.2	1,334.7	-	1,334.7

Profit for the year	-		153.6	153.6	-	153.6

Distributions paid to Company shareholders	-		(76.4)	(76.4)	-	(76.4)
Ordinary Shares issued	118.3		-	118.3	-	118.3
Costs of Ordinary Share issue	(0.7)		-	(0.7)	-	(0.7)

Shareholders' equity at end of year	1,110.1		419.4	1,529.5	-	1,529.5

Year ended 31 March 2013 ⃰
		Attributable to equity holders of the parent
	Share capital and share premium		Retained reserves	Total shareholders' equity	Non-controlling interests	Total equity
	£million		£million	£million	£million	£million

Previously reported at beginning of year	717.7		307.2	1,024.9	8.4	1,033.3
Movements as a result of adopting new IFRS standard	-		(4.4)	(4.4)	(8.4)	(12.8)
Restated shareholders' equity at beginning of year	717.7		302.8	1,020.5	-	1,020.5

Profit for the year	-		93.0	93.0	-	93.0

Distributions paid to Company shareholders	-		(53.6)	(53.6)	-	(53.6)
Ordinary Shares issued	278.2		-	278.2	-	278.2
Costs of Ordinary Share issue	(3.4)		-	(3.4)	-	(3.4)

Restated Shareholders' equity at end of year	992.5		342.2	1,334.7	-	1,334.7

⃰ Comparative information, including relevant Notes, has been restated as a result of applying IFRS 10, including

Investment Entities (Amendments to IFRS10, IFRS 12 and IAS 27). See Note 2 (b) for details.

Consolidated cash flow statement
for the year ended 31 March 2014



	Year ended 31 March 2014	Year ended 31 March 2013 Restated ⃰
	£million	£million

Cash flows from operating activities
Profit before tax	153.8	93.1
Adjustments for:
Investment income	(169.3)	(112.7)
Finance costs	2.3	5.0
Finance income	(6.4)	(0.2)
Operator acquisition investment fees	2.3	1.7

Operating cash flow before changes in working capital	(17.3)	(13.1)

Changes in working capital:
(Increase)/Decrease in receivables	(0.9)	0.8
(Decrease)/Increase in payables	2.1	-
Cash flow from operations	(16.1)	(12.3)

Interest received on bank deposits	0.1	0.2
Interest paid	(1.1)	(1.9)
Corporation tax paid	(0.7)	-
Interest received on investments	70.7	51.1
Dividends received	28.3	16.0
Fees and other operating income	7.4	8.1
Loanstock and equity repayments received	4.9	1.6
Net cash from operating activities	93.5	62.8

Cash flows from investing activities
Proceeds from disposal of investments	9.2	5.3
Purchases of investments	(251.2)	(270.2)
Net cash used in investing activities	(242.0)	(264.9)

Cash flows from financing activities
Proceeds from issue of share capital	107.7	270.1
Proceeds from issue of loans and borrowings	89.6	64.5
Repayment of loans and borrowings	(118.0)	(177.8)
Distributions paid to Company shareholders	(67.1)	(48.1)
Net cash from financing activities	12.2	108.7
Net increase in cash and cash equivalents	(136.3)	(93.4)
Cash and cash equivalents at beginning of year	172.9	267.9
Exchange gains on cash	6.1	(1.6)
Cash and cash equivalents at end of year	42.7	172.9
⃰ Comparative information, including relevant Notes, has been restated as a result of applying IFRS 10, including Investment Entities (Amendments to IFRS10, IFRS 12 and IAS 27). See Note 2 (b) for details.

1. Reporting entity

The financial information set out above does not constitute the company's statutory accounts for the years ended 31 March 2014 or 2013 but is derived from those accounts. Statutory accounts for 2013 are available on the Company's website, and those for 2014 will be made available in due course. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 263 of the Companies (Guernsey) Law, 2008 in respect of the accounts for 2013 or 2014.

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 consolidated financial statements of the Company as at and for the year ended 31 March 2014 comprise the Company and its consolidated subsidiaries, together referred to as the "Consolidated Group" (see Note 20).

As a result of changes in International Financial Reporting Standards ("IFRS") which have been implemented in these financial statements, there has been a significant change in the way the Company presents its consolidated financial statements. The Company has early adopted IFRS 10, 11 and 12 as well as early adopted Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS27). These amendments require that entities categorised as "Investment Entities" exclude certain investments from consolidation. The impact of this amendment is described in more detail in Note 2(b).

These changes have resulted in a number of entities that were previously consolidated into the financial statements not being consolidated in these financial statements and in the opinion of the Directors this presents the financial statements in a more consistent manner with the objectives and commercial substance of the Consolidated Group's investments. The Consolidated Group invests in infrastructure projects in the UK, Canada and Europe.

Of the Consolidated Group's portfolio of 93 investments at 31 March 2014, all have been treated as investments, including 29 entities which would have been consolidated prior to the changes to IFRS 10 for Investment Entities as described in more detail in Note 2.

In accordance with section 244(5) of the Companies (Guernsey) Law, 2008, as the Directors have prepared consolidated financial statements for the period, they have not prepared individual statements for the Company in accordance with section 243 for the period.

2. Key accounting policies

(a) Basis of preparation

The consolidated financial statements were approved and authorised for issue by the Board of Directors on 20 May 2014.

The consolidated financial statements, which give a true and fair view, have been prepared in compliance with the Companies (Guernsey) Law, 2008 and in accordance with 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 accounting policies have been applied consistently in these consolidated financial statements. The consolidated 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 in 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.

The Consolidated Group's business activities, together with the factors likely to affect its future development, performance and position are set out in Sections 2.4 and 2.5. The financial position of the Consolidated Group, its cash flows, liquidity position and borrowing facilities are described in Sections 2.6 and 2.7. In addition, Notes 1 to 4 of the financial statements include the Consolidated Group'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 Consolidated Group 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 Consolidated Group. As a consequence, the Directors believe that the Consolidated Group is well placed to manage its business risks successfully.

The Directors believe that the Consolidated Group has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

New standards effective for the current year

The Consolidated Group has early adopted IFRS 10 and Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS27) which has had a material impact on the Consolidated Group's financial statements as described in Note 2(b).

The Consolidated Group has early adopted IFRS 11 and 12 which has not had a material impact on the Consolidated Group's financial statements.

The above standards are all effective from 1 January 2014. As permitted, the Company has early adopted these standards for this financial year.

The Consolidated Group also adopted IFRS 13 Fair Value Measurement - IFRS 13 establishes a single framework for measuring fair value and making disclosures about fair value measurements. IFRS 13 replaces and expands the disclosure requirements about fair value measurements in other IFRSs, including IFRS 7. The adoption of IFRS 13 has had no material impact on the fair value of any assets or liabilities.

Standards not yet applied

The Consolidated Group anticipate that the adoption of the following new, revised, amended and improved published standards and interpretations, which were in issue at the date of authorisation of these Financial Statements, will have no material impact on the Financial Statements of the Consolidated Group when they become applicable in future periods:

§ Amendments to IAS 32 'Offsetting Financial Assets and Financial Liabilities' (mandatory for year commencing on or after 1 January 2014).

§ Amendments to IAS 39 'Novation of Derivatives and Continuation of Hedge Accounting' (mandatory for year commencing on or after 1 January 2014).

(b) Comparatives

Comparatives have been restated to reflect the early adoption of IFRS10 Consolidated Financial Statements and Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS27).

The impact of adopting the amended Investment Entities standard is that a number of entities consolidated in previous periods are no longer consolidated as explained in Note 2(c) and as a result the net assets of the Consolidated Group as at 31 March 2013 have increased by £15.0 million with profit after tax increasing by £25.5 million for the year to 31 March 2013. It has not been practical to calculate the impact on net assets as at 31 March 2014 and profit after tax for the year to 31 March 2014.

Below is a reconciliation for each of the Consolidated income statement and Consolidated cash flow showing the results as reported originally for 31 March 2013 compared to the restated results for 31 March 2013. The reconciliation for the Consolidated balance sheet is showing results as reported originally for 31 March 2013 and 31 March 2012 compared to the restated results for 31 March 2013 and 1 April 2012.

The movements shown in the adjustments column are all as a result of the adoption of IFRS 10 and Investment Entities (Amendments to IFRS10, IFRS 12 and IAS 27).

	Consolidated income statement



		Year ended 31 March 2013

		Original	Adjustments	Restated
		£million	£million	£million

Services revenue		190.4	(190.4)	-	Services revenue
Gains on finance receivables		149.0	(149.0)	-	Gains on finance receivables
Gains/(loss) on investments		68.1	44.6	112.7	Investment income
Total income		407.5	(294.8)	112.7	Total income

Services costs		(169.2)	169.2	-	Services costs
Administrative expenses		(20.0)	5.2	(14.8)	Fund expenses
Profit before net finance costs and tax		218.3	(120.4)	97.9	Profit before net finance costs and tax

Finance costs		(163.9)	158.9	(5.0)	Finance costs
Finance income		1.0	(0.8)	0.2	Finance income
Profit/(loss) before tax		55.4	37.7	93.1	Profit/(loss) before tax

Income tax (expense)/credit		12.1	(12.2)	(0.1)	Income tax (expense)/credit
Profit for the year		67.5	25.5	93.0	Profit for the year

Attributable to:					Attributable to:
Equity holders of the parent		65.2	27.8	93.0	Equity holders of the parent
Non-controlling interests		2.3	(2.3)	-	Non-controlling interests
		67.5	25.5	93.0

Earnings per share - basic and diluted (pence)		7.3	3.1	10.4

Consolidated balance sheet



	31 March 2013
	Original	Adjustments	Restated
	£million	£million	£million
Non-current assets
Investments at fair value through profit or loss	670.5	529.9	1,200.4
Finance receivables at fair value through profit or loss	2,435.0	(2,435.0)	-
Intangible assets	420.7	(420.7)	-
Deferred tax assets	153.4	(153.4)	-
Total non-current assets	3,679.6	(2,479.2)	1,200.4
Current assets
Trade and other receivables	26.6	(26.4)	0.2
Other financial assets	0.8	-	0.8
Finance receivables at fair value through profit or loss	40.2	(40.2)	-
Cash and cash equivalents	326.6	(153.7)	172.9
Total current assets	394.2	(220.3)	173.9
Total assets	4,073.8	(2,699.5)	1,374.3

Current liabilities
Trade and other payables	(61.3)	49.1	(12.2)
Other current financial liabilities	(0.5)	-	(0.5)
Current tax payable	(1.6)	1.6	-
Loans and borrowings	(79.5)	52.6	(26.9)
Total current liabilities	(142.9)	103.3	(39.6)
Non-current liabilities
Loans and borrowings	(1,871.4)	1,871.4	-
Other financial liabilities (fair value of derivatives)	(452.2)	452.2	-
Deferred tax liabilities	(287.6)	287.6	-
Total non-current liabilities	(2,611.2)	2,611.2	-
Total liabilities	(2,754.1)	2,714.5	(39.6)
Net assets	1,319.7	15.0	1,334.7

Equity
Shareholders' equity	1,311.3	23.4	1,334.7
Non-controlling interests	8.4	(8.4)	-
Total equity	1,319.7	15.0	1,334.7
Net assets per Ordinary Share (pence)	117.9	2.1	120.0

Consolidated balance sheet



						1 April 2012
						Original			Adjustments	Restated
						£million			£million	£million
Non-current assets
Investments at fair value through profit or loss						524.3			377.7	902.0
Finance receivables at fair value through profit or loss						1,739.4			(1,739.4)	-
Intangible assets						375.2			(375.2)	-
Deferred tax assets						109.7			(109.7)	-
Total non-current assets						2,748.6			(1,846.6)	902.0
Current assets
Trade and other receivables						29.2			(27.4)	1.8
Other financial assets						-			-	-
Finance receivables at fair value through profit or loss						31.2			(31.2)	-
Cash and cash equivalents						373.7			(105.8)	267.9
Total current assets						434.1			(164.4)	269.7
Total assets						3,182.7			(2,011.0)	1,171.7

Current liabilities
Trade and other payables						(48.1)			35.6	(12.5)
Other current financial liabilities						-			-	-
Current tax payable						(1.4)			1.2	(0.2)
Loans and borrowings						(191.4)			52.9	(138.5)
Total current liabilities						(240.9)			89.7	(151.2)
Non-current liabilities
Loans and borrowings						(1,409.9)			1,409.9	-
Other financial liabilities (fair value of derivatives)						(259.9)			259.9	-
Deferred tax liabilities						(238.7)			238.7	-
Total non-current liabilities						(1,908.5)			1,908.5	-
Total liabilities						(2,149.4)			1,998.2	(151.2)
Net assets						1,033.3			(12.8)	1,020.5

Equity
Shareholders' equity						1,024.9			(4.4)	1,020.5
Non-controlling interests						8.4			(8.4)	-
Total equity						1,033.3			(12.8)	1,020.5
Net assets per Ordinary Share (pence)						117.0			(0.7)	116.3
Net assets per C Share (pence)						98.7			-	98.7
	Consolidated cash flow


			Year ended 31 March 2013
				Original	Adjustments		Restated
				£million	£million		£million

		Cash flows from operating activities						Cash flows from operating activities
		Profit/(loss) before tax		55.4	37.7		93.1	Profit/(loss) before tax
		Adjustments for:						Adjustments for:
		(Gains)/loss on investments		(68.1)	(44.6)		(112.7)	Income from investments
		Gains on finance receivables		(149.0)	149.0		-
		Interest payable and similar charges		94.0	(89.0)		5.0	Finance costs
		Changes in fair value of derivatives		69.9	(69.9)		-
		Operator acquisition investment fees		1.7	-		1.7	Operator acquisition investment fees
		Interest income		(1.0)	0.8		(0.2)	Finance income
		Amortisation of intangible assets		17.6	(17.6)		-
		Operating cash flow before changes in working capital		20.5	(33.6)		(13.1)	Operating cash flow before changes in working capital

		Changes in working capital:						Changes in working capital:
		(Increase)/Decrease in receivables		0.6	0.2		0.8	(Increase)/Decrease in receivables
		(Decrease)/Increase in payables		(1.5)	1.5		-	(Decrease)/Increase in payables
		Cash flow (used in)/from operations		19.6	(31.9)		(12.3)	Cash flow (used in)/from operations

		Interest received on bank deposits and finance receivables		1.0	(0.8)		0.2	Interest received on bank deposits
		Cash received from finance receivables		134.3	(134.3)		-
		Interest paid		(81.4)	79.5		(1.9)	Interest paid
		Corporation tax received/(paid)		(0.6)	0.6		-	Corporation tax received/(paid)
		Interest received on investments		38.9	12.2		51.1	Interest received on investments
		Dividends received		12.9	3.1		16.0	Dividends received
		Fees and other operating income		6.4	1.7		8.1	Fees and other operating income
		Loanstock and equity repayments received		1.6	-		1.6	Loanstock and equity repayments received
		Net cash from operating activities		132.7	(69.9)		62.8	Net cash from operating activities

		Cash flows from investing activities						Cash flows from investing activities
		Proceeds from disposal of investment		5.3	-		5.3	Proceeds from disposal of investment
		Purchases of investments		(188.1)	(82.1)		(270.2)	Purchases of investments
		Acquisition of subsidiaries net of cash acquired		(54.6)	54.6		-
		Net cash (used in)/from investing activities		(237.4)	(27.5)		(264.9)	Net cash (used in)/from investing activities

		Cash flows from financing activities						Cash flows from financing activities
		Proceeds from issue of share capital		270.1	-		270.1	Proceeds from issue of share capital
		Proceeds from issue of loans and borrowings		64.5	-		64.5	Proceeds from issue of loans and borrowings
		Repayment of loans and borrowings		(224.9)	47.1		(177.8)	Repayment of loans and borrowings
		Distributions paid to Company shareholders		(48.1)	-		(48.1)	Distributions paid to Company shareholders
		Distributions paid to non-controlling interests		(2.4)	2.4		-
		Net cash from/(used in) financing activities		59.2	49.5		108.7	Net cash from/(used in) financing activities
		Net increase in cash and cash equivalents		(45.5)	(47.9)		(93.4)	Net increase in cash and cash equivalents
		Cash and cash equivalents at beginning of year		373.7	(105.8)		267.9	Cash and cash equivalents at beginning of year
		Exchange gains on cash		(1.6)	-		(1.6)	Exchange gains on cash
		Cash and cash equivalents at end of year		326.6	(153.7)		172.9	Cash and cash equivalents at end of year

In these consolidated financial statements the Company has early adopted IFRS 10 'Consolidated Financial Statements', IFRS 11 'Joint Arrangements' and IFRS 12 'Disclosure of Interests in Other entities'. IFRS 10 supersedes IAS 27 'Consolidated and Separate Financial Statements'. The International Accounting Standards Board ("IASB") has also issued Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS27) which requires entities that meet the definition of an investment entity to fair value relevant subsidiaries through the profit or loss rather than consolidate their results for periods beginning on or after 1 January 2014. The Company has chosen to early adopt the Investment Entities amendment. Under the amendment, those entities that provide investment related services or activities to the Company will continue to be consolidated. This change in accounting policy means that a number of entities previously consolidated are not consolidated in these financial statements. This change also aligns the Consolidated Group to the "Investment Group" as defined for risk management purposes in previous financial statements. The impact of this change is described in more detail in Note 2(b) and comparatives have been restated accordingly.

The consolidated financial statements of the Consolidated Group include the financial statements of the Company and its subsidiaries, except those required to be held at fair value, up to 31 March 2014. Subsidiaries are those entities controlled by the Company. The Company has control of an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee as defined in IFRS 10 'Consolidated Financial Statements'. The financial statements of subsidiaries, except those held at fair value, are included in the consolidated financial statements on a line by line basis from the date that control commences until the date control ceases.

The Directors note that following its meeting on 29/30 January 2014, the International Financial Reporting Interpretations Council (IFRIC) has proposed that the IASB should clarify the position on accounting for investment entity subsidiaries engaged in investment related activities themselves. At present it is uncertain as to whether the accounting standard will be amended.

The Directors are of the opinion that the Company has all the typical characteristics of an investment entity and the three essential criteria specific in the standard. In addition, certain subsidiaries provide specific investment management services and undertake investment activities that require the results of those subsidiaries to be consolidated in the Group financial statements.

The three essential criteria are that the entity must:

1. Obtain funds from one or more investors for the purpose of providing these investors with professional investment management services;

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

3. Measure and evaluate the performance of substantially all of its investments on a fair value basis.

In respect of the first essential criteria, typically an investment entity would have several investors who pool their funds to gain access to investment management services and investment opportunities that they might not have had access to individually. Investing in PFI/PPP/P3 infrastructure, as per the Company's investment policy, would be considered an investment that is not generally available to individual investors due to the high capital costs, large barriers to entry and other regulatory issues. The Company, being listed on the London Stock Exchange main market, obtains "funds" from a diverse group of external shareholders.

In respect of the second essential criteria, investments are managed in order to achieve desired investment returns and value enhancement opportunities are created where possible. An investment entity should not hold its investments indefinitely. Although the Consolidated Group invests in equity interests that have an indefinite life, the underlying PFI/PPP/P3 contracts have fixed terms and no residual value. Once the PFI/PPP/P3 contracts have reached the end of their terms, the investment entities will have no purpose and will be wound up in order to return all capital to the Consolidated Group to provide the full return to investors.

In respect of the third criteria, the Consolidated Group measures and evaluates the performance of all of its investments as one portfolio. Subsidiaries are consolidated into the Consolidated Financial Statements when they provide investment management services to the Company or investment activities are undertaken while all other subsidiaries and investments are held at fair value - similar to the Investment Basis of accounting previously reported separately to the Company's accounts.

Associates are those entities over which the Company has significant influence as defined in IAS 28 'Investments in Associates'. By virtue of the Company's status as an investment fund and the exemption provided by IAS 28.1, investments in such entities are designated upon initial recognition to be accounted for at fair value through profit or loss.

In these consolidated financial statements the Company has early adopted IFRS 11 'Joint Arrangements'. IFRS 11 supersedes IAS 31 'Interests in Joint Ventures'. Joint arrangements are those entities over which the Consolidated Group has joint control as defined by IFRS 11 'Joint Arrangements'. By virtue of the Company's status as an investment fund and the exemption provided by IAS 28.1, investments in such entities are designated upon initial recognition to be accounted for at fair value through profit or loss.

Intra-Consolidated Group receivables, liabilities, revenue and expenses are eliminated in their entirety when preparing the consolidated financial statements. Gains that arise from intra- Consolidated Group transactions and that are unrealised from the standpoint of the Consolidated Group on the balance sheet date are eliminated in their entirety. Unrealised losses on intra-group transactions are also eliminated in the same way as unrealised gains, to the extent that the loss does not correspond to an impairment loss.

(d) Financial instruments

Financial assets and liabilities are recognised on the Consolidated Group's balance sheet when the Consolidated Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised when the contractual rights to the cash flows from the instrument expire or the asset is transferred and the transfer qualifies for derecognition 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 Consolidated Group or which are subsidiaries not consolidated in the Consolidated Group are designated at fair value through profit or loss since the Consolidated Group 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.

Loans and borrowings

Borrowings are recognised initially at fair value of the consideration received, less transaction costs. Subsequent to initial recognition, borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the period of the borrowings on an effective interest basis.

Other

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

(ii) Derivative financial instruments

The Consolidated Group holds derivative financial instruments to mitigate their foreign currency risk exposure. All derivatives are recognised initially at fair value with attributable transaction costs recognised in the income statement as incurred. Thereafter, derivatives are measured at fair value with changes recognised in the income statement as part of finance costs or finance income. Fair value is based on price quotations from financial institutions active in the relevant market. The Consolidated Group does not use hedge accounting.

(iii) Fair values

The fair values are determined using the income approach, except for derivative financial instruments, 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.

(iv) Effective interest

The effective interest rate is that rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to the relevant asset's carrying amount.

(e) Share capital and share premium

Ordinary and C 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.

(f) 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. Bank overdrafts that are repayable on demand are included as a component of cash and cash equivalents for the purpose of the consolidated cash flow statement.

(g) Revenue

Interest income is recognised in the income statement as it accrues on a time-apportioned basis, using the effective interest rate of the instrument concerned as calculated on acquisition or origination date.

Dividends are recognised when the Consolidated Group's rights to receive payment have been established.

Fees and other operating income are recognised when the Consolidated Group's rights to receive payment have been established.

Gains on investments relates solely to the investments held at fair value.

(h) Income tax

Under the current system of taxation in Guernsey, the Company itself is exempt from paying taxes on income, profits or capital gains. Dividend and interest income received by the Consolidated Group may be subject to withholding tax imposed in the country of origin of such income, but all such tax is currently recoverable.

(i) Foreign exchange gains and losses

Transactions entered into by the Consolidated Group in a currency other than their 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 retranslation of unsettled monetary assets and liabilities are recognised immediately in the consolidated income statement.

(j) Segmental reporting

The Chief Operating Decision Maker (the "CODM") is of the opinion that the Consolidated Group 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 in one geographical area, the United Kingdom.

The financial information used by the CODM to allocate resources and manage the Consolidated Group presents the business as a single segment comprising a homogeneous portfolio.

(k) Expenses

All expenses and the profit share of the General Partner of Infrastructure Investments Limited Partnership are accounted for on an accruals basis (refer to Note 16). The Consolidated Group's investment management and administration fees, finance costs and all other expenses are charged through the consolidated income statement.

(l) Dividends

Dividends 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 AGM. 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.

(m) Provisions

Provisions are recognised when the Consolidated Group has a present obligation as a result of a past event, and it is probable that the Consolidated Group will be required to settle that obligation. Provisions are measured at the Directors' best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where the effect is material.

(n) Statement of compliance

Pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 1987 the Company is an Authorised Closed-Ended Investment Scheme. As an authorised scheme, the Company is subject to certain ongoing obligations to the Guernsey Financial Services Commission.

Following formal implementation of the Alternative Investment Fund Managers Directive ("AIFMD"), the Company is taking advantage of the transitional provisions which extend the deadline for authorisation or registration until 22 July 2014. As the Company is regarded as an Alternative Investment Fund ("AIF"), the Board has taken legal and regulatory advice, and intends to register the Company as a self-managed AIF.

3. Critical accounting judgements, estimates and assumptions

The preparation of financial statements in accordance with IFRS 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.

(i) Investments at fair value through profit or loss

By virtue of the Company's status as an investment fund and the exemption provided by IAS 28.1 and IFRS 11 as well as the early 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.

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 the PFI/PPP/P3 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 2014 valuation was 8.2%. 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.

(ii) Investment Entities

The Directors have agreed to adopt IFRS 10, 11, 12 and Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) early as permitted following EU endorsement. As explained in Note 2(c) to the accounts, the Directors are of the opinion that the Company meets the requirements of an "Investment Entity". The Company has subsidiaries that provide investment management services or undertake investment activities which require that their results are consolidated by the Company - together the Company and these subsidiaries form the Consolidated Group. The adoption of this standard requires the consolidated financial statements to include the investments at fair value rather than consolidating their results.

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 Consolidated Group 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 March 2014	31 March 2013 (Restated)
	£million	£million
Financial assets

Investments designated at fair value through profit or loss	1,495.5	1,200.4

At fair value through profit or loss
Other financial assets (fair value of derivatives)	0.8	0.8

Financial assets at fair value through profit or loss	1,496.3	1,201.2


Trade and other receivables	1.1	0.2
Cash and cash equivalents	42.7	172.9

Financial assets - loans and receivables	43.8	173.1

Financial liabilities

At fair value through profit or loss
Other financial liabilities (fair value of derivatives)	(0.5)	(0.5)

Financial liabilities at fair value through profit or loss	(0.5)	(0.5)

Trade and other payables	(10.1)	(12.2)
Loans and borrowings	-	(26.9)

Other financial liabilities	(10.1)	(39.1)

The Directors believe that the carrying values of all financial instruments are not materially different 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 2014
	Level 1	Level 2	Level 3	Total
	£million	£million	£million	£million

Investments at fair value through profit or loss (Note 12)	-	-	1,495.5	1,495.5
Other financial assets	-	0.8	-	0.8
	-	0.8	1,495.5	1,496.3

Other financial liabilities	-	(0.5)	-	(0.5)
	-	(0.5)	-	(0.5)
	As at 31 March 2013 (Restated)
	Level 1	Level 2	Level 3	Total
	£million	£million	£million	£million

Investments at fair value through profit or loss (Note 12)	-	-	1,200.4	1,200.4
Other financial assets	-	0.8	-	0.8
	-	0.8	1,200.4	1,201.2

Other financial liabilities (fair value of derivatives)	-	(0.5)	-	(0.5)
	-	(0.5)	-	(0.5)

There were no transfers between Level 1 and 2 during the year.

Level 2

Valuation methodology

The Directors have satisfied themselves as to the methodology used for the valuation of Level 2 financial assets and liabilities. All financial assets and liabilities are valued using a discounted cashflow methodology, consistent with the prior period. The key inputs to this methodology are foreign currency exchange rates and foreign currency forward curves. Fair value is based on price quotations from financial institutions active in the relevant market.

Valuations are performed on a 6 monthly basis every September and March for all financial assets and liabilities.

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 investments in PFI/PPP/P3 projects are valued using a discounted cashflow methodology. The valuation techniques and methodologies have been applied consistently with the prior period. 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 6 monthly basis every September and March for all investments.

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

Investments - The key valuation assumptions and sensitivities for the valuation are:

Discount rates

The discount rates used for valuing each social infrastructure investment are based on the appropriate long-dated government bond yield and a 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 project phase, and market participants appetite for these risks.

Judgement is used in arriving at the appropriate discount rate. This 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.

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

Period ending	Range	Weighted average
31 March 2013	8.0% to 10.0%	8.4%
30 September 2013	7.9% to 10.0%	8.3%
31 March 2014	7.8% to 11.0%	8.2%

A change to the weighted average rate of 8.2% by plus or minus 0.5% has the following effect on the valuation.

Discount rate

-0.5% change

Total portfolio value

+0.5% change

Directors' valuation

+£72.1m

£1,495.5m

-£66.7m

Implied change in Net Asset Value per Ordinary Share

+6.0 pence

-5.5 pence

1. Net Asset Value per Ordinary Share based on 1,207 million Ordinary Shares at 31 March 2014

Inflation rates

The social infrastructure 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). Facilities management sub-contracts have similar indexation arrangements.

The portfolio valuation assumes long term UK inflation of 2.75% per annum for both RPI and RPIx, the same assumption as used at 30 September 2013. For non-UK investments, long term CPI of 2.0% per annum is used for Holland, Ireland, Canada and France, the same assumption as used at 30 September 2013.

Inflation assumption	-0.5% p.a. change	Total portfolio value	+0.5% p.a. change
Changing inflation assumption across whole portfolio¹
Directors' valuation	-£44.1m	£1,495.5m	+£48.1m
Implied change in Net Asset Value per Ordinary Share	-3.7 pence		+4.0 pence

1. Analysis is based on the Consolidated Group's 20 largest investments, pro-rata for the whole portfolio

2. Net Asset Value per Ordinary Share based on 1,207 million Ordinary Shares at 31 March 2014

Deposit rates

Each PFI/PPP/P3 project in the portfolio has cash held in bank deposits, which is a requirement of their senior debt financing. As at 31 March 2014 cash deposits for the portfolio were earning interest at a rate of 0.5% per annum on average.

The portfolio valuation assumes UK deposit interest rates are 1% p.a. to March 2018 and 3.5% p.a. thereafter.

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.

Cash deposit rate

Base case is 1.0% p.a. till March 2018, then 3.75% pa

-0.5% p.a. change

Total portfolio

value

+0.5% p.a. change

Directors' valuation

-£18.5m

£1,495.5m

+£18.6m

Implied change in Net Asset Value per Ordinary Share

-1.5 pence

+1.5 pence

1. This analysis is based on the Consolidated Group's 20 largest investments, pro-rata for the whole portfolio

2. Net Asset Value per Ordinary Share based on 1,207 million Ordinary Shares at 31 March 2014

Tax Rates

The profits of each UK PFI project company are subject to UK corporation tax. On 1 April 2014 the prevailing rate of corporation tax fell from 23% to 21%. The Finance Act 2013 enacted a further reduction of 1% to 20% effective from 1 April 2015.

The UK corporation tax assumption for the portfolio valuation at 31 March 2014 was 21% for all future periods with no further step down.

Tax rate assumption

-1% p.a. change

Total portfolio

value

+1% p.a. change

Directors' valuation

+£9.7m

£1,495.5m

-£9.9m

Implied change in Net Asset Value per Ordinary Share

+0.8 pence

-0.8 pence

1. This analysis is based on the Consolidated Group's 20 largest investments, pro-rata for the whole portfolio

2. Net Asset Value per Ordinary Share based on 1,207 million Ordinary Shares at 31 March 2014

Market risk

Returns from the Consolidated Group'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 Consolidated Group'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 financial risks, however the review and management of financial risks are delegated to the Investment Adviser and the Operator of the Consolidated Group which has documented procedures designed to identify, monitor and manage the financial risks to which the Consolidated Group is exposed. This Note presents information about the Consolidated Group's exposure to financial risks, its objectives, policies and processes for managing risk and the Consolidated Group's management of its financial resources.

The Consolidated Group 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 Consolidated Group invests in subordinated loanstock of project companies, usually with fixed interest rate coupons. Where floating rate debt is owned the primary risk is that the Consolidated Group's cash flows will be subject to variation depending upon changes to base interest rates. The portfolio's cash flows are continually monitored and reforecasted 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 Consolidated Group has made limited use of borrowings 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 Consolidated Group's policy is to ensure that interest rates are sufficiently hedged to protect the Consolidated Group's net interest margins from significant fluctuations when entering into material medium/long term borrowings. This includes engaging in interest rate swaps or other interest rate derivative contracts.

The Consolidated Group has an indirect exposure to changes in interest rates through its investment in 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 Consolidated Group's project companies 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 Consolidated Group's overall cashflows 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 Consolidated Group's cashflows, 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 is shown in Note 4.

Currency risk

The projects in which the Consolidated Group invests all conduct their business and pay interest, dividends and principal in sterling other than its investments in Dutch High Speed Rail, Cork School of Music, Irish Grouped Schools, RD901 Road and University of Bourgogne PPP/PFI projects (comprising 6% of the portfolio by value), which conduct their business and pay their interest, dividends and principal in Euros and its investments in North West Anthony Henday P3 and Kicking Horse Canyon P3 projects (comprising 2% of the portfolio by value), which conduct their business and pay interest, dividends and principal in Canadian dollars. The Consolidated Group 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 to the level of sterling distributions that the Consolidated Group expects to receive over the medium term, where considered appropriate. This may involve the use of forward exchange and other currency hedging contracts, as well as the use of Euro, Canadian and other currency denominated borrowings. The Group at 31 March 2014 hedged its currency exposure through Euros and Canadian dollar forward contracts.

Credit risk

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

The Consolidated Group's key direct counterparties are the project companies in which it makes investments. The Consolidated Group's near term cash flow forecasts are used to monitor the timing of cash receipts from project counterparties. Underlying to the cash flow forecast 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 Consolidated Group's investment and subsidiary entities receive revenue from government departments, and public sector or local authority clients. Therefore a significant portion of the Consolidated Group's investments' revenue is with counterparties of good financial standing.

The Consolidated Group is also reliant on each project's subcontractors continuing to perform their service delivery obligations such that revenues to projects are not disrupted. The Investment Adviser has a subcontractor counterparty monitoring procedure in place. The credit standing of subcontractors 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 Consolidated Group's largest credit risk exposure to a project at 31 March 2014 was to the Home Office project (7% of portfolio by value) and the largest subcontractor counterparty risk exposure was to subsidiaries of the Carillion group which provided facilities management services in respect of 17% of the portfolio by value.

The Consolidated Group is subject to credit risk on its loans, receivables, cash and deposits. The Consolidated Group'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. Fair value adjustments, or "loan impairments", are made when the net present value of the future cash flows predicted to arise from the asset, discounted using the effective interest rate method, implies non-recovery of all or part of the Consolidated Group's loan investment. In these cases a loan impairment is recorded equal to the valuation shortfall.

At 31 March 2014 there were no loans and other receivables considered impaired (2013: £Nil) for the Consolidated Group.

The Consolidated Group's maximum exposure to credit risk over financial assets is the carrying value of those assets in the balance sheet. The Consolidated Group does not hold any collateral as security.

Liquidity risk

Liquidity risk is the risk that the Consolidated Group will not be able to meet its financial obligations as these fall due. The Consolidated Group'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 Consolidated Group ensures it maintains adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The Consolidated Group investments are predominantly funded by share capital and medium term debt funding.

The Consolidated Group'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 Consolidated Group's investments have borrowings which rank senior to the Consolidated Group'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 Consolidated Group.

The Consolidated Group's investments may include obligations to make future investment amounts. These obligations will typically be supported by standby letters of credit, issued by the Consolidated Group's bankers in favour of the senior lenders to the investment companies. Such subscription obligations are met from the Consolidated Group's cash resources when they fall due. Such obligations totalled £5.1 million (2013: £12.7 million) at the year end.

The next table analyses the Consolidated Group's financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts in the table are the contracted undiscounted cashflows (including the impact of netting agreements).

31 March 2014	Less than 1 year	Between 1 and 2 years	Between 2 and 5 years	More than 5 years
	£million	£million	£million	£million
Bank borrowings	-	-	-	-
Trade and other payables	10.1	-	-	-
Other financial liabilities	0.5	-	-	-
Total	10.6	-	-	-

31 March 2013 (Restated)	Less than 1 year	Between 1 and 2 years	Between 2 and 5 years	More than 5 years
	£million	£million	£million	£million
Bank borrowings	26.9	-	-	-
Trade and other payables	12.2	-	-	-
Other financial liabilities	0.5	-	-	-
Total	39.6	-	-	-

Capital management

The Consolidated Group has a £150 million revolving acquisition facility 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 Consolidated Group makes prudent use of its leverage. Under the Articles the Consolidated Group's outstanding borrowings, including any financial guarantees to support outstanding subscription obligations but excluding internal Consolidated Group borrowings of the Consolidated Group'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 Consolidated Group's debt to Adjusted Gross Asset Value at the end of the year was as follows:

	31 March 2014	31 March 2013

	£million	£million
Outstanding drawings
Bank borrowings	-	27.9
Letter of credit facility	5.1	12.8
	5.1	40.7

Adjusted Gross Asset Value
Portfolio valuation (Note 12a)	1,500.6	1,213.1
Cash and cash equivalents	42.7	172.9
	1,543.3	1,386.0

Borrowing concentration	0.33%	2.90%

From time to time the Company issues its own shares to the market; the timing of these purchases 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 Consolidated Group's approach to capital management during the year.

5. Investment income

	For the year ended	For the year ended
	31 March 2014	31 March 2013
		(Restated)
	Total	Total
	£million	£million

Interest from investments	60.2	47.9
Dividend income from investments	22.2	11.6
Fees and other operating income	7.4	8.2
Gains on investments (Note 12)	79.5	45.0

	169.3	112.7

Included within the gains on investments is an unrealised exchange loss of £6.7 million on the Consolidated Group's Euro and Canadian investments (2013: £2.1 million gain). The following exchange rates were used at the year end:

	31 March 2014	31 March 2013

Euro	0.83	0.84
Canadian	0.54	0.65

6. Fund expenses

	For year ended	For year ended
	31 March 2014	31 March 2013
		(Restated)
	£million	£million

Fees payable to the Consolidated Group's auditors for the audit of the Consolidated Group accounts	0.2	0.2
Fees payable to the Consolidated Group's auditors and its associates for other services:
Audit-related assurance services	0.1	0.1
Operator fees (Note 16)	14.9	11.2
Investment fees (Note 16)	2.3	1.8
Directors' fees (Note 16)	0.2	0.2
Project bid costs	0.7	0.2
Professional fees	1.0	1.0
Other costs	0.2	0.1
	19.6	14.8

In addition to the above an amount of £0.6 million (2013 restated: £0.5 million) was paid to associates of the Consolidated Group's auditors in respect of audit and tax services provided to project companies (and therefore not included within consolidated administrative expenses).

The Consolidated Group had no employees during the year.

7. Net finance income

8.	For year ended	For year ended		9.
10.	31 March 2014	31 March 2013		11.
12.	13.	(Restated)		14.
15.	Total	Total		16.
17.	£million	£million		18.
19.				20.
21. Interest on bank loans	(0.2)	(0.2)		22.
23. Foreign exchange loss	-	(1.8)		24.
25. Other finance costs	(2.1)	(3.0)		26.
27. Total finance costs	(2.3)	(5.0)		28.
29.				30.
31. Interest on bank deposits	0.1	0.2		32.
33. Foreign exchange gain	6.3	-		34.
35. Total finance income	6.4	0.2
Net finance income	4.1		(4.8)

8. 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 income tax expense in the Consolidated income statement relates to the tax charge for the four subsidiaries of the Company which form the Consolidated Group, of which two are subject to taxes in Luxembourg and two in the UK.

The Consolidated financial statements do not include the tax charges for any of the Consolidated Group's 93 investments as these are held at fair value. All of these investments are subject to taxes in the countries in which they operate.

9. 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.

	2014	2013

Profit attributable to equity holders of the Company	£153.6 million	£93.0 million
Weighted average number of Ordinary Shares in issue	1,170.4 million	898.3 million
Basic and diluted earnings per Ordinary Share	13.1 pence	10.4 pence

Further details of shares issued in the year are set out in Note 15.

10. Dividends

	For year ended	For year ended
	31 March 2014	31 March 2013
	£million	£million

Amounts recognised as distributions to equity holders during the year:

Second interim dividend for the year ended 31 March 2013 of 3.575p (2012: 3.5p) per share	34.9	23.3
Interim dividend for the year ended 31 March 2014 of 3.5p (2013: 3.425p) per share	41.5	30.3
	76.4	53.6

Second interim dividend for the year ended 31 March 2014 of 3.6 p (2013: 3.575p) per share	43.5	34.9

The second interim dividend was approved by the Board on 13 May 2014 and is payable on 30 June 2014 to shareholders on the register as at 23 May 2014. The second interim dividend is payable to shareholders as a cash payment or alternatively as a scrip dividend. The dividend has not been included as a liability at 31 March 2014.

The 2013 second interim dividend of 3.575p and the first 2014 interim dividend of 3.5p are included in the statement of changes in shareholder equity.

	For year ended	For year ended
	31 March 2014	31 March 2013

Interim dividend for the period ended September	3.5p	3.425p
Interim dividend for the period ended March	3.6p	3.575p
	7.1p	7.0p

11. Net assets per Ordinary Share

	2014	2013 (Restated)
	£million	£million

Shareholders' equity at 31 March	1,529.5	1,334.7
Less: second interim dividend	(43.5)	(34.9)
	1,486.0	1,299.8

Number of shares at 31 March	1,207.4	1,116.3

Net assets per share after deducting second interim dividend	123.1p	116.4p

Add second interim dividend	3.6p	3.575p


Net assets per Ordinary Share at 31 March	126.7p	120.0p

The Net assets per share at 31 March 2013 is that applicable to the 976.4 million Ordinary Shares in issue on the record date of 1 March 2013. The 140 million Ordinary Shares issued on 27 March 2013 pursuant to the New Ordinary Share Prospectus of 26 February 2013 were not eligible for the second interim dividend of 3.575p.

The Net assets per share at 31 March 2013 applicable to the 140 million Ordinary Shares issued on 27 March 2013 was 116.4p.

12a. Investments at fair value through profit or loss

	2014	2013 (Restated)
	£million	£million

Opening balance	1,200.4	902.0
Investments in the year	234.1	278.8
Disposals in the year	(9.4)	(4.0)
Accrued interest	(2.3)	(2.1)
Repayments in the year	(23.9)	(16.9)
Subscription obligations	12.7	-
Gains on valuation	80.7	44.1
Other movements	3.2	(1.5)
Carrying amount at year end	1,495.5	1,200.4

This is represented by:
Less than one year	-	-
Greater than one year	1,495.5	1,200.4
Carrying amount at year end	1,495.5	1,200.4

Gains on valuation as above	80.7	44.1
Gain on disposal	-¹	1.3
Less : transaction costs incurred	(1.2)	(0.4)
Gains on investments	79.5	45.0

¹ Gain measured against carrying value as at 31 March 2013

The gains on investment have been included in Investment income presented in the consolidated income statement. Gains on investments also include an immaterial movement as a result of the disposal in December 2013 when measured against the carrying value. A gain on disposal of £1.1m was realised against the original cost of the investments.

The Investment Adviser has carried out fair market valuations of the investments as at 31 March 2014. 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 investments in PFI/PPP/P3 projects are valued using a discounted cashflow methodology. The valuation techniques and methodologies have been applied consistently with the prior year. Discount rates applied range from 7.8% to 11.0% (weighted average of 8.2%) (2013: 8.0% to 10.0% (weighted average of 8.4%)).

The following economic assumptions were used in the discounted cashflow valuations:

UK inflation rates	2.75%
Holland, Ireland and Canada inflation rates	2.0%
UK deposit interest rates	1% to March 2018 and 3.5% thereafter
UK corporation tax rate	21%
Euro/Sterling exchange rate	0.83 for all future periods
Can$/Sterling exchange rate	0.54 for all future periods

The economic assumptions for the year ended 31 March 2013 were as follows:

UK inflation rates	2.75%
Holland, Ireland and Canada inflation rates	2.0%
UK deposit interest rates	1% to March 2017 and 3.5% thereafter
UK corporation tax rate	23%
Euro/Sterling exchange rate	0.84 for all future periods
Can$/Sterling exchange rate	0.65 for all future periods

The valuation of the Consolidated Group's portfolio at 31 March 2014 reconciles to the consolidated balance sheet as follows:
	31 March 2014	31 March 2013
	31 March 2014	31 March 2013
	£million	£million

Portfolio valuation	1,500.6	1,213.1
Less: future commitments	(5.1)	(12.7)
Investments per Consolidated balance sheet	1,495.5	1,200.4

Investments are generally restricted on their ability to transfer funds to the Consolidated Group 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 2014						31 March 2013
	Equity			Subordinated Debt	Mezzanine Debt		Equity		Subordinated Debt	Mezzanine Debt
A249 Road	50.00%			50.00%			50.00%		50.00%
A92 Road	50.00%			50.00%			50.00%		50.00%
Addiewell Prison	33.30%			33.30%			-		-
Allenby & Connaught PFI Project	12.50%			12.50%			-		-
Barking and Dagenham Schools	85.00%			100.00%			85.00%		100.00%
Barnet Hospital ¹	100.00%			100.00%			100.00%		100.00%
Birmingham and Solihull LIFT	30.00%			44.00%			30.00%		44.00%
Birmingham Hospitals	30.00%			30.00%			30.00%		30.00%
Bishop Auckland Hospital	36.00%			37.00%	100.00%		36.00%		36.00%	100.00%
Blackburn Hospital ¹	100.00%			100.00%			100.00%		100.00%
Blackpool Primary Care Facility	75.00%			75.00%			75.00%		75.00%
Boldon School¹	100.00%			100.00%			100.00%		100.00%
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%			-		-
Central Middlesex Hospital ¹	100.00%			100.00%			100.00%		100.00%
Colchester Garrison	56.00%			56.00%			56.00%		56.00%
Connect PFI	33.50%			33.50%			28.50%		28.50%
Conwy Schools ¹	90.00%			90.00%			90.00%		90.00%
Cork School of Music²	50.00%			50.00%			50.00%		50.00%
Croydon Schools¹	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 Schools¹	100.00%			100.00%			80.00%		80.00%
Doncaster Mental Health	50.00%			50.00%			50.00%		50.00%
Dorset Fire and Rescue¹	100.00%			100.00%			100.00%		100.00%
Dorset Police⁶	-			-			80.00%		80.00%
Durham and Cleveland Police Tactical Training Centre¹	72.90%			72.90%			72.90%		72.90%
Dutch High Speed Rail Link³	43.00%			43.00%			43.00%		43.00%
Ealing Care Homes	84.00%			84.00%			84.00%		84.00%
Ealing Schools	50.00%			50.00%			50.00%		50.00%
Edinburgh Schools¹	100.00%			100.00%			100.00%		100.00%
Exeter Crown Court ¹	100.00%			100.00%			100.00%		100.00%
Falkirk NPD Schools	29.10%			29.10%			-		-
Fife Schools 2 PPP	30.00%			30.00%			30.00%		30.00%
Fife Schools	50.00%			64.00%	100.00%		50.00%		50.00%
Glasgow Hospital	25.00%			25.00%			25.00%		25.00%
Gloucester Fire and Rescue	75.00%			75.00%			-		-
Greater Manchester Police Authority¹	72.90%			72.90%			72.90%		72.90%
Haverstock School	50.00%			50.00%			50.00%		50.00%
Health and Safety Executive (HSE) Merseyside Headquarters	50.00%			50.00%			50.00%		50.00%
Health and Safety Laboratory	80.00%			90.00%			80.00%		90.00%
Helicopter Training Facility ¹	87.60%			7.20%			87.60%		7.20%
Helicopter Training Facility	23.50%			74.10%			23.50%		74.10%
Highland Schools ¹	100.00%			100.00%			100.00%		100.00%
Home Office Headquarters ¹	100.00%			100.00%			100.00%		100.00%
Irish Grouped Schools²	50.00%			50.00%			50.00%		50.00%
Kent Schools PFI	50.00%			50.00%			50.00%		50.00%
Kicking Horse Canyon Transit P3⁴	50.00%			-			50.00%		-
Lewisham Hospital¹	100.00%			100.00%			100.00%		100.00%
M80 DBFO	50.00%			50.00%			50.00%		50.00%
Manchester School	50.00%			50.00%			50.00%		50.00%
Medway LIFT	60.00%			60.00%			-		-
Medway Police¹	100.00%			100.00%			80.00%		80.00%
Metropolitan Police Specialist Training Centre¹	72.90%			72.90%			72.90%		72.90%
Miles Platting Social Housing ⁷	33.30%			33.30%			-		-
Newcastle Libraries	50.00%			50.00%			50.00%		50.00%
Newport Schools¹	100.00%			100.00%			80.00%		80.00%
Newton Abbot Hospital¹	100.00%			100.00%			50.00%		100.00%
North Tyneside Schools	50.00%			50.00%			50.00%		50.00%
Northwest Anthony Henday Ring Road P3⁴	50.00%			50.00%			50.00%		50.00%
Northwood MoD HQ	50.00%			50.00%			50.00%		50.00%
Norwich Area Schools PFI Project	75.00%			75.00%			75.00%		75.00%
Nuffield Hospital	25.00%			25.00%			25.00%		25.00%
Oldham Library	50.00%			50.00%			50.00%		50.00%
Oldham Secondary Schools PFI Project	75.00%			75.00%			75.00%		75.00%
Oxford Churchill Oncology	40.00%			40.00%			40.00%		40.00%
Oxford John Radcliffe PFI Hospital¹	100.00%			100.00%			100.00%		100.00%
Perth and Kinross Schools¹	100.00%			100.00%			100.00%		100.00%
Pinderfields and Pontefract Hospitals	50.00%			50.00%			50.00%		50.00%
Queen Alexandra Hospital Portsmouth ¹	100.00%			100.00%			100.00%		100.00%
Queen's (Romford) PFI Hospital	66.70%			66.70%			66.70%		66.70%
RD901 Road ⁵	90.00%			-			-		-
Redbridge & Waltham Forest LIFT	60.00%			60.00%			-		-
Renfrewshire Schools	30.00%			30.00%			30.00%		30.00%
Rhonnda Cynon Taf Schools¹	100.00%			100.00%			100.00%		100.00%
Royal School of Military Engineering PPP Project	26.00%			32.10%			-		-
Salford Hospital		50.00%	50.00%			-		-
Sheffield BSF		40.00%	40.00%			-		-
Sheffield Hospital		75.00%	75.00%			75.00%		75.00%
Sheffield Schools		37.50%	37.50%			37.50%		37.50%
South Ayrshire Schools ¹		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%			-		-
Staffordshire LIFT		30.00%	44.00%			30.00%		44.00%
Stoke Mandeville Hospital ¹		100.00%	100.00%			100.00%		100.00%
Sussex Custodial Services ¹		100.00%	100.00%			100.00%		100.00%
Swindon Police⁶		-	-			80.00%		80.00%
Tameside General Hospital		50.00%	50.00%			-		-
Tyne and Wear Fire Stations¹		100.00%	-			100.00%		-
University of Bourgogne France⁵		85.00%	-			-		-
University of Sheffield Project		50.00%	50.00%			-		-
West Lothian Schools		75.00%	75.00%			75.00%		75.00%
West Middlesex Hospital ¹		100.00%	100.00%			100.00%		100.00%
Willesden Hospital		50.00%	50.00%			50.00%		50.00%
Wooldale Centre for Learning		50.00%	50.00%			50.00%		50.00%

1. The company is a subsidiary that has not been consolidated.

2. The company is incorporated in Ireland.

3. The company is incorporated in the Netherlands.

4. The company is incorporated in Canada.

5. The company is incorporated in France.

6. The investment was sold in December 2013.

7. A further 16.70% equity was acquired in May 2014, see Note 18.

12b. Investments - acquisitions and disposals

Acquisitions

· In April the Company acquired a 60% shareholding in two LIFT (Local Improvement Finance Trusts) companies, the Medway LIFTCo and the Redbridge and Waltham Forest LIFTCo, for a combined consideration of £9.8 million.

· In May the Company announced four new investments:

· The acquisition of a 50% stake in the Tameside General Hospital PFI project from Balfour Beatty Infrastructure Investments Limited for £16.0m and the acquisition of a 33.3% interest in the Addiewell Prison PFI project from a division of RBS for £10.3 million.

· The acquisition of a 39% equity and loan note interest in the South West Hospital Enniskillen PFI Project for £20.8 million from FCC Construcción SA. It is a 33 year concession to design, construct, finance and maintain a new acute hospital and key worker accommodation on a greenfield site at Enniskillen in Northern Ireland and was completed in May 2012. The facilities include outpatient facilities, an Accident and Emergency unit, a new energy centre and key worker.

· The acquisition of a 50% equity and loan note interest for £20.8 million in the University of Sheffield Student Accommodation Project from InfraRed Infrastructure Fund II. This fully operational project was identified in February 2013 as one of the two Conditional Investments described in the Company's Ordinary Share prospectus issued in February 2013. In making this acquisition the Group complied with its stated policies for dealing with conflicts of interest.

· On 1 July the Company announced four new investments with an aggregate consideration of £107.9 million:

· The Salford Hospital PFI Project: The Group acquired a 50% equity and loan note interest in this 35 year concession to design, construct and commission new-build hospital facilities and associated site infrastructure in Salford, Greater Manchester. The project reached financial close in 2007 and construction of the new facilities was completed in 2012.

· The Miles Platting Social Housing PFI Project: The Group acquired a 33.33% equity and loan note interest in this 30 year concession, procured by the City of Manchester Council, to redesign and refurbish approximately 1,500 occupied properties, as well as to build 20 new extra-care homes and 11 new family homes in Miles Platting, Manchester. The project reached financial close in 2007 and construction was completed in 2012.

· The Gloucester Fire and Rescue PFI Project: The Group acquired a 75% equity and loan note interest in this 26 year concession, procured by the Gloucester Fire Authority, to finance, design, construct and subsequently operate and maintain four community fire stations and a "SkillZone" in Gloucestershire. The project reached financial close in 2011 and construction of the new facilities was completed in 2012.

· The Allenby and Connaught Ministry of Defence ("MoD") Accommodation PFI Project: The Group acquired a 12.5% equity and loan note interest in this 35 year concession to design, build and finance new and refurbished MoD accommodation across four garrisons on Salisbury Plain and at Aldershot, comprising working, leisure and living quarters as well as ancillary buildings. The Project reached financial close in April 2006 and construction is being undertaken by a joint venture between subsidiaries of Carillion and KBR Holdings LLC. Construction is due for completion in 2014.

· In August 2013 the Company invested £1.9 million in the new Birmingham Dental Hospital and School of Dentistry which is to be developed by Birmingham Community Healthcare NHS Trust together with its partners the University of Birmingham, Birmingham and Solihull LIFT ("BaS LIFT") (in which the Group has a 30% equity interest) and Calthorpe Estates, and will be one of the largest facilities to have been developed under the NHS LIFT initiative. It involves the construction of a new 15,465sqm four-storey dental hospital and school of dentistry. Construction is expected to be completed in 2015.

· In August 2013 the Company completed two acquisitions for a combined consideration of £10.2 million :

· A 50% equity stake in the Newton Abbot Community Hospital Project concession which runs until December 2038 for the construction and operation of a community hospital for Torbay and Southern Devon Health and Care NHS Trust. This takes the Company's equity stake to 100%.

· A further 5% equity and loan notes interest in the Connect Project giving it a 33.5% interest overall. Connect is a 20 year concession which runs until November 2019 to upgrade and operate London Underground Limited's radio and telecommunications systems.

· In October 2013 the Company completed two acquisitions for a combined consideration of £9.2 million :

· A 50% equity and loan note stake in the Brighton Children's Hospital Project, a £37.1 million scheme which involved the design, construction, financing and subsequent maintenance of a new children's hospital on behalf of the Brighton and Sussex University Hospitals NHS Trust. The hospital reached Financial Close in June 2004 and has been operational since May 2007 and comprises 100 beds, diagnostic facilities, ambulatory care, teaching areas, two operating theatres and an X-ray facility. The vendor was Kajima Partnerships.

· A 29.1% subordinated loan note in the Falkirk Schools NPD project, a £120 million scheme which involved the design, construction, financing and subsequent operation of four secondary schools in Falkirk, Scotland on behalf of Falkirk Council. The Project reached Financial Close in May 2007 and the schools became operational in phases up to July 2009. The stake was acquired from Royal Bank Project Investments Limited.

· In December 2013 the Company acquired for a consideration of £3.4 million the final 20% stakes in the Derby Schools, Newport Schools and Medway Police projects which it did not already own taking its ownership in all three projects to 100%

· In January 2014 the Company completed four acquisitions for a combined consideration of £28.9 million:

· An 85% stake in the University of Bourgogne PPP project which achieved financial close July 2013 and is a contract to design, construct, finance and maintain four new academic buildings on the Bourgogne university campus, and to refurbish an existing building, with a total gross internal floor area of 7,000sqm. The Group acquired its stake from Pertuy Construction who is undertaking the c.£17 million construction programme over the next two years following which there is a 25 year operational period.

· A 90% interest in the Troissereux by-pass RD901 PPP project which achieved financial close in January 2014 and comprises the design, construction, finance and maintenance of a new 7km dual carriageway bypassing the small town of Troissereux, near Beauvais.

· A 26% interest from a subsidiary of Carillion plc in the Royal School of Military Engineering PPP project, a 30-year concession to design, build, refurbish and maintain 32 new buildings, 21 refurbishments and five training areas across three UK locations on behalf of the UK Ministry of Defence.

· A 40% interest from Vinci Investments Limited in the Sheffield BSF Schools project, a 27-year PFI concession to design, build, finance, maintain and operate two new secondary schools and one new special educational needs secondary school in Sheffield for Sheffield City Council. The project was signed in July 2007 and has been fully operational since September 2009.

As part of the consideration for the Perth and Kinross Schools PFI project acquisition in December 2012, the Company had a contractual investment obligation of £12.7 million which was paid in April 2013.

These investments are all held at fair value.

Disposals

The Group undertook the sale of two investments in December 2013 generating aggregate disposal proceeds of £9.2 million. These comprised 80% stakes in the Swindon Police and the Dorset Police projects.

13. Trade and other payables

	31 March 2014	31 March 2013 (Restated)
	£million	£million
Trade payables	9.6	9.2
Other payables	0.5	3.0
Trade and other payables	10.1	12.2

14. Loans and borrowings

	31 March 2014	31 March 2013 (Restated)
	£million	£million
Current liabilities
Bank borrowings	-	26.9

Total loans and borrowings	-	26.9

Terms and debt repayment schedule

The terms and conditions of outstanding loans are as follows:

	Carrying amount
	Carrying amount
	2014	2013 (Restated)
	£million	£million

Secured Bank borrowings	-	26.9
	-	26.9

The currency profile of the Consolidated Group's loans and borrowings is as follows:

	2014	2013 (Restated)
	£million	£million

Pound Sterling	-	21.2
Euro	-	6.7
	-	27.9

The Consolidated Group has the following undrawn borrowing facilities at 31 March:

Floating rate:	£million	£million

Secured
- expiring within one year	-	59.3
- expiring between 1 and 2 years	-	-
- expiring between 2 and 5 years	144.7	-
- expiring after 5 years	-	-
	144.7	59.3

During the year, the Consolidated Group was required to meet certain bank covenants on its £100 million three year revolving bank facility (which was renewed and increased to £150 million on 28 March 2014), 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.

15. Share capital and reserves

	Ordinary Shares
	31 March 2014	31 March 2013
	million	million

Issued at 1 April	1,116.3	665.4
C Shares converted to Ordinary Shares	-	218.1
Issued for cash	83.7	228.3
Issued as a scrip dividend alternative	7.4	4.5
Issued at 31 March - fully paid	1,207.4	1,116.3

The holders of the 1,207,428,625 Ordinary Shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company (2013: 1,116,360,139 Ordinary Shares).

Ordinary Share capital and share premium

	31 March 2014	31 March 2013
	£million	£million

Opening balance	992.5	470.9
Premium arising on issue of equity shares	118.3	525.0
Expenses of issue of equity shares	(0.7)	(3.4)
Balance at 31 March	1,110.1	992.5

Share capital is £120.7 thousand (2013: £111.6 thousand).

For the year ended 31 March 2014

On 22 April 2013 3.9 million new Ordinary Shares of 0.01 p each fully paid in the Company were issued as a scrip dividend alternative in lieu of cash for the second interim dividend of 3.575p in respect of the year ending 31 March 2013.

On 31 December 2013 3.5 million new Ordinary Shares of 0.01 p each fully paid in the Company were issued as a scrip dividend alternative in lieu of cash for the first interim dividend of 3.5p in respect of the year ending 31 March 2014.

In the year ending 31 March 2014 83.7 million new Ordinary Shares were issued to various institutional investors at an issue price per share (before expenses) ranging between 129.0p and 135.0p.

For the year ended 31 March 2013

250,000,000 C Shares were converted to 218,050,000 Ordinary Shares on 27 April 2012 at a conversion rate of 0.8722 Ordinary Shares for each C Share.

On 30 June 2012 1.5 million new Ordinary Shares of 0.01 p each fully paid in the Company were issued as a scrip dividend alternative in lieu of cash for the second interim dividend of 3.5p in respect of the year ending 31 March 2012.

On 31 December 2012 3.0 million new Ordinary Shares of 0.01p each fully paid in the Company were issued as a scrip dividend alternative in lieu of cash for the first interim dividend of 3.425p in respect of the year ending 31 March 2013.

In the year ending 31 March 2013 88.3 million new Ordinary Shares were issued to various institutional investors at an issue price per share (before expenses) ranging between 119.0p and 119.5p.

On 22 March 2013, the Company announced the results of its Placing, Open Offer and Offer for Subscription of Ordinary Shares. The Company raised £167.3 million (before expenses) through the issue of 140,000,000 Ordinary Shares at a price of 119.5p per Ordinary Share, of which 61,968,542 Ordinary Shares were issued pursuant to the Open Offer, 9,558,673 Ordinary Shares were issued pursuant to the Offer for Subscription and 68,472,785 Ordinary Shares were issued by way of the Placing. The Ordinary Shares were admitted to trading on the London Stock Exchange on 27 March 2013.

Retained reserves

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

16. Related party transactions

The Investment Adviser to the Company and the Operator of a limited partnership through which the Consolidated Group 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 £0.1 million per annum (disclosed within investment fees in Note 6) (2013: £0.1 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 sister 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 2014, 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 Consolidated Group that are not in either their construction or ramp-up phases up to £750 million, 1.0 per cent per annum for the incremental value in excess of £750 million up to £1,500 million and 0.9 per cent for the incremental value in excess of £1,500 million; ii) 1.5 per cent per annum of investments of the Consolidated Group that are in either their construction or ramp-up phases, excluding investments acquired with the acquisition of the initial portfolio (the ramp-up phase of an investment means the period following completion of a project's construction phase during which it is building up to be fully operational with full service provision); and iii) 1.0 per cent of the value of new portfolio investments, that were not sourced from entities, funds or holdings managed by the IRCP Group.

In March 2014 the Company announced that from 1 April 2014, IRCP and the General Partner will in aggregate be 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 Consolidated Group up to £750 million, 1.0 per cent per annum for the incremental value in excess of £750 million up to £1,500 million, 0.9 per cent for the incremental value in excess of £1,500 million up to £2,250 million and 0.8 per cent for the incremental value in excess of £2,250 million. The Consolidated Group has therefore ceased to pay the differentiated and higher annual management fee for assets in construction (previously 1.5% p.a.), so that the fee payable will be the same for all investments, regardless of whether they are operational, in ramp-up or under construction.

The total Operator fees charged to the Consolidated Income Statement was £14.9 million (2013: £11.2 million) of which £7.8 million remained payable at year end (2013: £5.9 million). The total charge for new portfolio investments (disclosed within investment fees in Note 6) was £2.2 million (2013: £1.7 million) of which £0.5 million remained payable at year end (2013: £1.0 million).

Transactions during the year

A number of transactions took place between the Consolidated Group and its associates in the year which are summarised below, further details on balances outstanding are provided in Note 12a.

	Transactions
	Year ended 31 March 2014	Year ended 31 March 2013
	£million	£million
Loanstock repayments	(17.0)	(12.4)
Equity repayments	(6.9)	(4.5)
Loanstock interest	60.2	47.9
Dividends received	22.2	11.6
Fees and other income	7.4	8.2

Total fees for Directors for the year were £210,000 (2013: £190,000). Directors expenses of £16,797 (2013: £7,632) were also paid in the year. One Director also receives fees of £5,000 (2013: £5,000) for serving as director of the two Luxembourg subsidiaries.

In May 2013 the Group completed the acquisition of 50% equity and loanstock in the University of Sheffield project for a consideration of £20.8 million from InfraRed Infrastructure Fund II. The acquisition was identified in the New Ordinary Share Prospectus of February 2013 as a Conditional Investment.

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

17. Guarantees and other commitments

As at 31 March 2014 the Consolidated Group had £5.1 million commitments for future project investments (2013: £12.7 million).

18. Events after the balance sheet date

On 15 April 2014, the Company held an Extraordinary General Meeting where a resolution was passed to in favour of the proposed purchase by the Company (or a subsidiary of the Company) of a 5.85% equity interest in the AquaSure Project from the InfraRed Environmental Infrastructure Fund on such terms as may be agreed by the Company and the InfraRed Environmental Infrastructure Fund, subject to all other actions necessary to effect such purchase.

On 7 May 2014 the Company announced a new investment in the form of a 10% interest in the N17/N18 Gort to Tuam PPP Scheme (the "N17/N18 Project") which has just reached financial close and involves the financing, design, construction and operation of a new 57km dual carriageway section of the N17/N18 near Galway for the National Roads Authority of Ireland (the "NRA"). The financial commitment to the N17/N18 Project comprises an obligation to subscribe for 10% of shareholder loans at the end of the construction works and a conditional commitment to acquire a further 32% interest in early 2019.

The Company also announced on 7 May 2014 the acquisition of a further 16.7% equity interest in the Miles Platting Social Housing PFI Project ("Miles Platting Project").

The total investment for the initial 10% interest in the N17/N18 Project and the additional 16.5% interest in the Miles Platting Project was approximately £5.1m.

The Company is in the process of completing an acquisition of 5.85% equity and loanstock in Aquasure Holdings Pty Limited ("Aquasure") for a consideration of Australian $84.5 million (approximately £47.0 million).

There are no other events after the balance sheet date which are required to be disclosed.

19. Disclosure - Service Concession Arrangements

The Consolidated Group holds investments in 93 service concession arrangements 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. As at 31 March 2014, all of the service concessions were fully operational.

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.

Project	Short description of concession arrangements	Start date	End date	Number of years	Project Capex	Key subcontractors
A249 Road	Design, construct, finance, operate and maintain the section from Iwade Bypass to Queensborough of the A249 road for the Secretary of State for Transport	2006	2036	30	£79m	Carillion
A92 Road	Design, construct, finance and operate the upgraded A92 shadow toll road between Dundee and Arbroath for Transport for Scotland	2005	2035	30	£54m	Bear
Addiewell Prison	Design, build, finance and operate a new maximum security prison at Addiewell, West Lothian	2008	2033	25	£74m	Sodexo
Allenby & Connaught PFI Project	Design, build and finance new and refurbished MoD accommodation across four garrisons on Salisbury Plain and in Aldershot, comprising working, leisure and living quarters as well as ancillary buildings	2006	2041	35	£1,557m	Carillion KBR
Barking and Dagenham Schools	Design, construct, finance, operate and maintain the Eastbury Comprehensive and Jo Richardson Community Schools for London Borough of Barking & Dagenham	2004	2030	26	£47m	Bouygues Energies & Services
Barnet Hospital	Design, construct, operate and maintain the re-building of Barnet General Hospital in North London for the Wellhouse National Health Service Trust	1999	2032	33	£65m	Bouygues Energies & Services
Birmingham and Solihull LIFT	Design, construct and invest in facilities of new health and social care facilities	2004	2031	27	£65m	Carillion
Birmingham Hospitals	Design, construct, 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	2006	2046	40	£553m	Cofely
Bishop Auckland Hospital	Design, construct, finance, service and maintain a redevelopment of Bishop Auckland General Hospital, County Durham for South Durham Health Care NHS Trust	1999	2059	60 (with break clause option by Grantor at Year 30, 40 & 50)	£66m	ISS
Blackburn Hospital	Design, construct, finance and maintain new facilities at the Queens Park Hospital in Blackburn for the East Lancashire Hospitals NHS Trust	2003	2041	38	£100m	Cofely
Blackpool Primary Care Facility	Design, construct, finance and operate a primary care centre in Blackpool for Blackpool Primary Care Trust	2008	2040	32	£19m	Eric Wright
Boldon School	Design, construct, finance, operate and maintain Boldon School for the Borough of South Tyneside	2005	2031	26	£18m	Mitie
Bradford BSF Phase 2	Design, construct, finance and maintain four secondary schools for Bradford Metropolitan District Council	2009	2036	27	£230m	Amey
Brentwood Community Hospital	Design, construct, finance and maintain a new community hospital for South West Essex Primary Care Trust	2006	2036	30	£23m	Initial
Brighton Hospital	Construction and operation of new children's hospital in Brighton	2004	2034	30	£37m	Integral
Central Middlesex Hospital	Design, construct, 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	2003	2036	33	£75m	Bouygues Energies & Services
Colchester Garrison	Design, construct, finance and maintain a new garrison facility at Colchester, Essex for The Secretary of State for Defence	2004	2039	35	£550m	Sodexo
Connect PFI	To upgrade London Underground Limited's existing radio and telecommunications systems and implement and operate a new system	1999	2019	20	£300m	Thales
Conwy Schools	Design, build, operate and maintain three schools for Conwy County Borough Council in North Wales	2003	2030	27	£40m	Sodexo
Cork School of Music	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 Education and Science (Republic of Ireland).	2005	2030	25	€50m	Bilfinger Berger
Croydon Schools	Design, construct, finance, operate and maintain a secondary school and community library in Croydon for the London Borough of Croydon	2004	2034	30	£20m	Vinci
Darlington Schools	Design, construct, finance, operate and maintain an Education Village comprising four schools	2004	2029	25	£31m	Mitie
Defence Sixth Form College	Design, build, operate, finance and maintain a new residential sixth form college for the Secretary of State for Defence	2003	2033	30	£40m	Pearson
Derby Schools	Design, construct, finance, operate and maintain three primary schools and two secondary schools in Derby for Derby City Council	2004	2031	27	£37m	Vinci
Doncaster Mental Health	Design, construct, finance, operate and maintain a service accommodation for an elderly mental health unit in Doncaster for the Rotherham Doncaster and South Humber Mental NHS Foundation Trust	2003	2031	28	£15m	Royal BAM
Dorset Fire and Rescue	Design, construct, 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	2007	2034	27	£45m	Cofely
Durham and Cleveland Police Tactical Training Centre	Construction of a state of the art firearms and tactical training centre at Urlay Nook in the North of England	2000	2025	25	£6m	Carillion
Dutch High Speed Rail Link	Design, construct, finance, operate and maintain power, track and signalling for the high speed railway between Schiphol Airport and Belgian border in the Netherlands	2001	2026	25	£625m	Fluor
Ealing Care Homes	Design, construct, finance, operate and maintain four care homes for the elderly in the London Borough of Ealing for the London Borough of Ealing	2005	2035	30	£22m	Viridian
Ealing Schools	Design, construct, finance, operate and maintain a four-school education PFI project consisting of one secondary school and three primary schools in the London Borough of Ealing	2002	2029	27	£31m	Mitie
Edinburgh Schools	Design, construct, finance, operate and maintain six secondary schools and two primary schools for the City of Edinburgh Council	2007	2039	32	£165m	Mitie
Exeter Crown Court	Build and service a new crown and county court building in Exeter	2002	2034	32	£20m	Sodexo
Falkirk NPD Schools	Design, construct, finance and operate four secondary schools in the Falkirk area of Scotland	2007	2039	32	£120m	FES
Fife Schools	Design, construct, finance and maintain 3 new schools and a sports hall in Fife, Scotland	2001	2028	27	£40m	Sodexo
Fife Schools 2	Design, construct, finance and maintain nine primary schools and one special education facility in Fife, Scotland	2005	2032	27	£64m	FES
Glasgow Hospital	Design, construct, finance, operate and maintain two new ambulatory care and diagnostic hospitals in Glasgow for the Greater Glasgow and Clyde Health Board	2006	2036	30	£178m	Cofely
Gloucester Fire and Rescue	Construction and operation of 4 community fire stations in Gloucestershire and a SkillZone education centre	2011	2037	26	£23m	Capita
Greater Manchester Police Authority	Design, build, finance and operate a new traffic headquarters and 16 new police stations for the Greater Manchester Police Authority (GMPA)	2002	2031	29	£82m	Carillion
Haverstock School	Design and construction of a single new secondary school on an existing school site on Haverstock Hill, Camden	2004	2030	26	£21m	Mitie
Health and Safety Laboratory	Construction of new workshops and offices in Buxton	2002	2034	32	£60m	Interserve
Health and Safety Executive (HSE) Merseyside Headquarters	HSE Merseyside HQ is an accommodation PFI project. It is a four-storey office building that serves as the HSE's operational headquarters and houses 1,500 employees	2005	2035	30	£62m	Honeywell
Helicopter Training Facility	Design, construction, management, operation and financing of simulators based training facility for Royal Airforce (RAF) helicopter pilots	1997	2037	40 (with break clause by Grantor at Year 20)	£100m	Serco
Highland Schools	Design, construction and operate eleven urban and rural schools	2007	2037	30	£143m	Mears
Home Office Headquarters	Build, finance, operate and maintain a new headquarters building to replace the Home Office's existing London office accommodation with purpose-built serviced offices	2002	2031	29	£200m	Bouygues Energies & Services
Irish Grouped Schools	Design, construct, finance, operate and maintain five secondary schools in the Republic of Ireland for the Department of Education and Skills	2001	2026	25	€34m	Bilfinger Berger
Kent Schools PFI	Design, build, funding and partial operation of six schools in Kent	2005	2035	30	£95m	Mitie
Kicking Horse Canyon Transit P3	Upgrade, operate and maintain a section of highway in British Columbia, Canada	2005	2027	22	CAD$ 127m	HMC Services
Lewisham Hospital	Design, construct, finance, operate and maintain a new wing in Lewisham Hospital for the Department of Health	2004	2036	32	£58m	Carillion
M80 DBFO	Design, build, finance and operate a section of the M80 motorway in Scotland	2009	2039	30	£275m	Bear
Manchester School	Design, construct, finance, operate and maintain the Wright Robinson College in Manchester for Manchester City Council	2005	2031	26	£29m	Hochtief
Medway LIFT	Deliver health and social care infrastructure to NHS property services and Community Health Partnerships within the Medway area of North Kent	2005	2034	29	£19m	Rydon
Medway Police	Design, construct, finance, operate and maintain a divisional police headquarters for Police and Crime Commissioner for Kent	2004	2034	30	£21m	Vinci
Metropolitan Police Specialist Training Centre	Construction of a firearms and public order training facility in Gravesend, Kent for the Mayor's Office for Policing and Crime	2001	2026	25	£40m	Carillion
Miles Platting Social Housing	Redesign and refurbish approximately 1,500 occupied properties, as well as to build 20 new extra care homes and 11 new family homes in Miles Platting, Manchester	2007	2037	30	£79m	Morgan Sindall
Newcastle Libraries	Finance, develop, 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	2007	2032	25	£30m	Integral
Newport Schools	Design, construct, finance, operate and maintain a nursery, infant and junior school for Newport City Council	2008	2033	25	£15m	Vinci
Newton Abbot Hospital	Design, construct, finance, operate and maintain a community hospital for Devon Primary Care Trust	2007	2039	32	£20m	Rydon
North Tyneside Schools	Design, construct, finance, operate and maintain a four-school education PFI project consisting of one secondary school and three primary schools in North Tyneside	2002	2033	31	£30m	Mitie
Northwest Anthony Henday Ring Road P3	Finance, build, maintain and rehabilitate the northwest leg of the Anthony Henday Drive ring road in the City of Edmonton, Alberta, Canada	2008	2041	33	CAD$ 995m	Vinci
Northwood MoD HQ	Design, construct and commission new-built facilities on behalf of the Ministry of Defence in Northwood, Greater London	2006	2031	25	£198m	Carillion
Norwich Area Schools PFI Project	Design, construct, 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	2006	2032	26	£44m	Kier
Nuffield Hospital	Design, construct, finance, operate and maintain a new orthopaedic hospital for the Secretary of State for Health	2002	2036	34	£37m	G4S
Oldham Library	Design, construct, finance, operate and maintain the Oldham Library and Lifelong Learning Centre for Oldham Metropolitan Borough Council	2004	2029	25	£15m	Kier
Oldham Secondary Schools PFI Project	Design, construct, finance and operate two secondary schools for Oldham Metropolitan Borough Council	2006	2033	27	£54m	Kier
Oxford Churchill Oncology	Design, construct, finance, operate and maintain a 100 bed oncology unit, including provision of medical equipment for Oxford Radcliffe Hospitals NHS Trust.	2005	2038	33	£124m	Impregilo
Oxford John Radcliffe PFI Hospital	Design, construct, manage, finance, operate and maintain a new wing adjacent to the former Radcliffe Infirmary	2003	2036	33	£161m	Carillion
Perth and Kinross Schools	Design, construct, financing and operation of four secondary schools and five primary schools for the Perth and Kinross Council	2007	2041	34	£136m	Mitie
Pinderfields and Pontefract Hospitals	Design, construct, manage, finance and operate a new 708 bed acute hospital in Pinderfield, West Yorks and a new diagnostic and treatment hospital in Pontefract, West Yorks for the Mid Yorkshire NHS Trust	2007	2042	35	£311m	Cofely
Queen Alexandra Hospital, Portsmouth	Design and construction of a new hospital and retained estates work in Portsmouth	2005	2040	35	£255m	Carillion
Queen's (Romford) PFI Hospital	Design, construction, management, financing, operation and maintenance of a new hospital in Romford	2004	2040	36	£211m	Sodexo
RD901 Road, France	Design, construction, finance and maintenance of a new 7km dual carriageway bypassing the small town of Troissereux, near Beauvais in France.	2014	2039	25	€84m	Bouygues
Redbridge & Waltham Forest LIFT	Deliver health and social care infrastructure for NHS Property Services and Community Health Partnerships within Redbridge and Waltham Forest in North London.	2005	2030	25	£15m	Rydon
Renfrewshire Schools	Design, construction, management, financing, operation and maintenance of six primary and four secondary schools in Renfrewshire, Scotland	2008	2038	30	£100m	Amey
Rhonnda Cynon Taf Schools	Design, construct, 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	2004	2028	24	£22m	Vinci
Royal School of Military Engineering PPP Project	Design, build, refurbish and maintain 32 new 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	2008	2038	30	£300m	Carillion
Salford Hospital	Design, construct and commission new-build facilities and associated site infrastructure for the Salford Royal NHS Foundation Trust	2007	2042	35	£137m	Cofely
Sheffield BSF	Design, build, finance, maintain and operate two new secondary schools and one new special educational needs secondary school in Sheffield for Sheffield City Council	2009	2034	25	£75m	Vinci
Sheffield Hospital	Design, construction, financing and management of a new 168 bed wing at the Sheffield Northern General Hospital for the Sheffield Teaching Hospitals NHS Foundation Trust	2004	2036	32	£26m	Dalkia
Sheffield Schools	Design, construct, finance and operate two primary schools and two secondary schools for Sheffield City Council	2004	2030	26	£52m	Kier
South Ayrshire Schools	Design, construct, 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	2006	2039	33	£76m	Mitie
South East London Police stations	Design, construct, finance and operate four police stations in South East London for the Mayor's Office for Policing and Crime	2001	2026	25	£80m	Carillion
South West Hospital, Enniskillen	Design, construct, finance and maintain a new acute hospital and key worker accommodation at Enniskillen in Northern Ireland	2012	2042	34	£227m	Interserve
Staffordshire LIFT	Develop, design, construct, invest in and maintain health and social care facilities	2005	2030	25	£40m	Integral
Stoke Mandeville Hospital	Design, finance, construct, refurbish, operate and maintain a new hospital facility for the Buckingham Hospitals NHS Trust	2004	2034	30	£40m	Sodexo
Sussex Custodial Services	Build and service 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	2001	2031	30	£20m	Capita
Tameside General Hospital	Design, construct and commission new-build facilities and associated site infrastructure for the Tameside Hospital NHS Foundation Trust.	2007	2041	34	£78m	Cofely
Tyne and Wear Fire Stations	Design, construct, 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	2006	2031	25	£23m	Carillion
University of Bourgogne, France	Design, construct, finance and maintain 3 new buildings on the Bourgogne university campus in France and the refurbishment of an existing one.	2013	2040	27	€20m	Bouygues
University of Sheffield Project	Construction and management of a new student village at the University of Sheffield	2006	2046	40	£160m	Lend Lease
West Lothian Schools	Design, construct, finance and operate two new schools, Armadale Academy and the Deans Community High School for West Lothian Council	2008	2039	31	£60m	Dawn Construction
West Middlesex Hospital	Design, construct, finance, operate and maintain a new 228 bed hospital for West Middlesex University Hospital NHS Trust	2001	2036	35	£60m	Bouygues Energies & Services
Willesden Hospital	Design, construct, manage and finance a community hospital in north London for NHS Brent	2002	2034	32	£19m	Accuro
Wooldale Centre for Learning	Design, construct, 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	2004	2029	25	£24m	Mitie

20. Consolidated subsidiaries

Name	Country	Ownership interest

HICL Infrastructure 1 SARL	Luxembourg	100.0%
HICL Infrastructure 2 SARL	Luxembourg	100.0%
Infrastructure Investments Limited Partnership	United Kingdom	100.0%
Infrastructure Investments Holdings Limited	United Kingdom	100.0%

21. 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 2):

2003 Schools Services Limited	United Kingdom	100.0%
Ashburton Services Limited	United Kingdom	100.0%
Annes Gate Property Plc*	United Kingdom	100.0%
Alpha Schools Highland Limited **	United Kingdom	100.0%
Axiom Education (Edinburgh) Limited*	United Kingdom	100.0%
Axiom Education (Perth & Kinross) Limited*	United Kingdom	100.0%
Boldon School Limited	United Kingdom	100.0%
ByCentral Limited*	United Kingdom	100.0%
ByWest Limited*	United Kingdom	100.0%
Consort Healthcare (Blackburn) Limited*	United Kingdom	100.0%
CVS Leasing Limited	United Kingdom	87.6%
Derby School Solutions Limited*	United Kingdom	100.0%
PFF (Dorset) Limited*	United Kingdom	100.0%
Education 4 Ayrshire Limited*	United Kingdom	100.0%
Enterprise Civic Buildings Limited*	United Kingdom	100.0%
Enterprise Education Conwy Limited*	United Kingdom	90.0%
Enterprise Healthcare Limited*	United Kingdom	100.0%
H&D Support Services Limited*	United Kingdom	100.0%
Metier Healthcare Limited	United Kingdom	100.0%
Newport Schools Solutions Limited*	United Kingdom	100.0%
Newton Abbot Health Limited*	United Kingdom	100.0%
Ravensbourne Health Services Limited*	United Kingdom	100.0%
Services Support (Cleveland) Limited*	United Kingdom	72.9%
Services Support (Gravesend) Limited*	United Kingdom	72.9%
Services Support (Manchester) Limited*	United Kingdom	72.9%
Sussex Custodial Services Limited*	United Kingdom	100.0%
THC (OJR) Limited*	United Kingdom	100.0%
THC (QAH) Limited*	United Kingdom	100.0%
TW Accommodation Services Limited	United Kingdom	100.0%

* = Reporting date 31 December
** = Reporting date 31 January

This information is provided by RNS

The company news service from the London Stock Exchange

END

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