Enriching

lives through

infrastructure

HICL Annual

Report 2023

Contents

Overview

2023 Highlights 2

Chair’s Statement 3

Strategic Report

HICL at a glance 6

The Infrastructure Market 10

HICL’s Business Model 14

Key Performance and Quality Indicators 18

Investment Manager’s Report 20

Top 10 assets 26

Sustainability 36

Financial Review 40

Valuation of the Portfolio 46

Risk & Risk Management 53

Risk Committee Report 62

Viability Statement 64

Strategic Report Disclosures 65

Task Force on Climate-Related

Financial Disclosures (“TCFD”) 67

Governance 73

Board and Governance 74

Board of Directors 76

The Investment Manager 78

Corporate Governance Statement 79

Nomination Committee Report 82

Audit Committee Report 83

Report of the Directors 89

Statement of Directors’ Responsibilities 93

Directors’ Remuneration Report 94

Financials 97

KPMG LLP’s Independent Auditor’s Report 98

Notes to the Financial Statements 114

Appendices 146

Glossary 160

Directors & Advisers 162

For definitions of our financial terms

used throughoutthis report, please see

ourGlossaryonpages 160 to 161.

Chair’s Statement / Page 3

Investment Manager’s Report /

Page 20

Business Model /

Page 14

1HICL Annual Report 2023FinancialsGovernanceOverview Strategic Report

Our vision is to enrich lives

through infrastructure.

Investing in assets with strong

social foundations such as

healthcare and education; assets

that connect communities from

rail and road to communications;

and assets that support the

transition to a low-carbon

modern economy.

How HICL enriches lives

through infrastructure

Page

118

100

108

116

124

120

107 107

110

113

116

123

135

140

147

148

155

150 150

161

163

IPO

Cumulative Dividends (p)

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23

NAV per share (p)

HICL Annual Report 20232

2023 Highlights

Delivering sustainable income and capital growth

from a diversified core infrastructure portfolio

164.9p 6.3% 8.9% p.a.

NAV

per share +1.8p

2022: 163.1p

Total Shareholder Return

2022: 12.8%

Total Shareholder

Return since IPO

0.8x 8.25p 1.31x/1.03x

Inflation correlation

2022: 0.8x

New Dividend Guidance

for 2025

Reaffirmed Dividend Guidance

8.25p for 2024

Dividend cash cover

including / excluding

profits on disposal

2022: 1.05x / 1.02x

Total return of 8.9% p.a. from IPO

The chart below shows how the combination of dividend and Net Asset Value (NAV)

growth has delivered a total return of 8.9% p.a. from IPO to 31 March 2023.

References are made throughout to Alternative Performance Measures “APMs”. These are provided alongside IFRS measures to provide additional information to shareholders.

A full reconciliation of the APMs used is disclosed on page 43.

1 Net Asset Value, including the dividend of 2.07p declared on 17 May 2023

2 Based on interim dividends paid plus change in NAV per share in the year

3 If outturn inflation was 1% p.a. higher than the valuation assumption in each and every forecast period, the expected return from the portfolio (before Corporate Group expenses)

would increase by 0.8%

4 Expressed in pence per Ordinary Share for the financial year ending 31 March. This is a target only and not a profit forecast. There can be no assurance that this target will be met

5 Stated on an Investment Basis including profits on disposal versus original acquisition cost of £45.5m. Excluding this, dividend cash cover is 1.03x

Overview Strategic Report Governance Financials HICL Annual Report 2023 3

Chair’s Statement

I am pleased to present

another resilient set of results

for the Company against

a volatile macroeconomic

backdrop.

HICL’s expertly diversified portfolio of

essential core infrastructure assets has again

demonstrated its defensive characteristics,

delivering a Total Shareholder Return

for the

year of 6.3% and a portfolio return

of 10.2%.

HICL continues to deliver long-term value

for shareholders, despite the current

macroeconomic and financial conditions.

Inflation reached its highest level in over

30 years across HICL’s core geographies,

resulting in increased interest rates and

significant financial market volatility.

Cash flows from the Company’s diversified

portfolio benefit from high inflation correlation

and robust capital structures with limited

sensitivity to higher financing costs.

Proactive management of the Company’s

debt facilities and accretive share issuance

in the year ensured that HICL maintained

asolid balance sheet position throughout.

The Board and HICL’s Investment Manager,

InfraRed Capital Partners (“InfraRed”), remain

focused on the active management of

portfolio composition, with a clear strategy

to markedly increase asset life and future

earnings generation within the portfolio,

suchthat HICL remains well positioned for

the long term as its PPP concessions mature

and redeem capital. Targeted acquisitions

and disposals in the year have contributed

significantly to this strategy; effectively

recycling capital, improving diversification

and introducing highly attractive asset

characteristics into the portfolio.

Financial performance

Financial performance in the year to

31 March 2023 has been resilient, with Net

Asset Value (“NAV”) growth of 1.8p per share

to 164.9p. The return from the portfolio was

10.2% (March 2022: 9.6%), outperforming

the Company’s expected return of 6.6% for

the period (the Company’s weighted average

discount rate as at 31 March 2022).

NAV growth in the year was primarily driven

by the impact of higher actual and forecast

inflation on the Company’s cash flows. HICL’s

strong inflation correlation of 0.8x serves to

protect investors’ capital in higher inflationary

environments such as those experienced

over the past 12 months. Strong inflation

correlation is a deliberate part of portfolio

composition and its positive effect more than

offset the associated impact of higher long-

term government bond yields in the year,

which saw the portfolio’s weighted average

discount rate increase from 6.6% to 7.2%.

A more detailed explanation of the portfolio’s

valuation and discount rate movements over

the past year is given in the Valuation of the

Portfolio section, starting on page 46.

Business model in action

HICL delivers value by investing in and

actively managing high-quality core

infrastructure assets in attractive sectors and

geographies (for more information see HICL’s

core infrastructure framework on page 14).

Societal demand for new infrastructure

remains strong, due to ageing assets and

demographic shifts, and is being driven by

the powerful megatrends of digitalisation

and decarbonisation. These transformative

forces present significant opportunities for

HICL to invest in attractive sectors, where

investments offer a core infrastructure risk

profile, stable income and the prospect of

long-term capital growth. Further discussion

on the core infrastructure market can be

found on page 10.

Our performance

demonstrates

the defensive

nature of core

infrastructure.

Mike Bane

Chair of the Board of Directors

1 Based on interim dividends paid plus change in NAV per share in the year

2 Performance of the portfolio relative to the opening weighted average discount rate as at 31 March 2022

Northwest Parkway

see page 29

Paris-Saclay University

HICL Annual Report 20234

Generating additional

shareholder value

through selective

disposals differentiates

HICL’s approach.

As HICL carefully navigates this evolving core infrastructure

landscape, the Board is confident in InfraRed’s proven

ability to identify and capitalise on attractive opportunities

that will generate long-term value for our shareholders.

The attractive attributes of modern core infrastructure are

evident in the Company’s acquisitions during the year,

which span the electricity transmission, communications

and transport sectors. Together, these investments have

increased the weighted asset life and inflation correlation

of the portfolio, offer predictable income under regulated

and contracted frameworks, and have significant growth

potential through their strategic positioning with exposure

to the powerful growth drivers of the modern economy.

Acquisitions in the year have significantly contributed

to our strategy to futureproof HICL’s investment

proposition, considering the maturity profile of the

Company’s PPP concessions. Since HICL’s first non-PPP

investments in early 2016, the Company has materially

increased itsweighted average asset life to 32 years

(Sept 2015: 21years), increased the portfolio’s inflation

correlation to 0.8x (Sept 2015: 0.6x), and substantially

increased the long-term forecast investment valuation

to£2.4bn in 2050 (Sept 2015: £nil in 2050).

Maintaining a strong balance sheet in the current

volatile market environment is crucial. During the year,

the Company demonstrated its ability to raise funding

across both debt and equity markets to fund its

new acquisitions:

– in July 2022 HICL activated a £330m accordion to its

existing £400m Revolving Credit Facility (“RCF”);

– in July 2022 £160m was raised via an oversubscribed

and NAV accretive share issue;

– in March 2023 the RCF was renegotiated at a higher

level (£650m) and with a longer tenor (three years) to

30 June 2026, maintaining the same margin; and

– in May 2023 HICL completed a £150m Private

Placement, effectively converting existing short-

term drawings to a longer maturity, reducing interest

rate risk and diversifying the Company’s sources

of funding.

The use of selective disposals as a further source

of funding was demonstrated by the sale of Queen

Alexandra Hospital (which completed in May 2022)

and the partial sale of Northwest Parkway (which was

announced after the year-end), both in excess of their

holding value. This accretive recycling of capital not only

provides an additional source of funding to pursue new

investments but improves key portfolio metrics, and

supports the Directors’ Valuation.

Dividend guidance

The Board is pleased to reconfirm the dividend guidance

of 8.25pps for the year to 31 March 2024

, and to extend

that guidance out for the year ending 31 March 2025

the same level of 8.25pps. In reaching this decision, the

Board recognises the positive impact of inflation on the

Company’s portfolio and its cash flows; but also the need

to protect the longer-term interests of shareholders and

futureproof HICL’s investment proposition.

Since the Company’s IPO, HICL’s investment strategy

has underpinned a compelling total return proposition, of

which the dividend has constituted a significant element.

HICL’s shareholders have long been ‘ahead of the curve’,

enjoying the highest cash dividend in the immediate core

infrastructure peer group for the best part of 20 years.

This has been delivered notwithstanding the specific

challenges of recent years (e.g. the Carillion liquidation

and Covid-19) and the effects of proactively reshaping the

portfolio beyond PPP assets to capture longer-term cash

flows with greater growth, which tend to initially provide

lower yields.

The portfolio’s ability to capture inflation, principally in

the NAV, has been a defining benefit for investors over

the year and has provided significant protection against

a higher interest rate environment. Although there is a

contractual lag before this inflation increases distributable

cash in a significant way, the benefit compounds over

time and has significantly enhanced the portfolio’s cash

flow and earnings profile over the long term. Additionally,

those specific assets which have seen their distributions

temporarily constrained are expected to contribute

to cash flows increasingly in time, as are those newer

investments with lower initial yields which will serve to

bolster dividend cover. Increasing cash generation from

the portfolio, coupled with a more enduring platform for

long-term earnings generation, supports the Board’s

ambition to resume dividend growth in due course.

Chair’s Statement continued

3 This is a target only and not a profit forecast. There can be no assurance that this target will be met

Overview Strategic Report Governance Financials HICL Annual Report 2023 5

HICL is well placed to

navigate the significant

investment opportunity

in core infrastructure with

discipline and ambition.

Sustainability progress

HICL invests in essential infrastructure assets that over

20 million people worldwide use and depend on in their

day-to-day lives. The Board recognises that this confers

a responsibility to actively contribute to the ‘social’

component of the ESG framework, and utilises this lens

in the development of the Company’s sustainability

strategy. I am pleased to also see the progress made in

this area by the Investment Manager, who through their

Portfolio Impact team surveyed 61 clients from HICL’s

portfolio to gain a deeper insight into asset-specific

challenges and satisfaction levels. These responses will

flow directly into both targeted and scalable initiatives

to deliver improved social outcomes. A more detailed

explanation of InfraRed’s sustainability initiatives is given

in the Investment Manager’s Report, starting on page 20.

To consistently meet sustainability reporting expectations

and offer accountability to investors requires continuous

improvement. Last year InfraRed launched a data

collection process to ascertain the greenhouse gas

emissions associated with HICL’s entire portfolio,

selecting 2019 as the base year to avoid Covid-19

distortion. The Company has now published its first

‘live’ year of portfolio emissions data, covering 100% of

the portfolio and providing investors with tangible data

that we can look to improve on going forward. To sit

alongside this disclosure, HICL has also published new

net zero targets for the portfolio, plotting the path to

decarbonising the portfolio by 2050.

The Company’s portfolio-wide annual ESG survey has

been expanded again this year, with 95 questions used to

capture greater amounts of data. This has enabled HICL

to report as an Article 8 fund under the EU’s Sustainable

Finance Disclosures Regulation (“SFDR”). Improved data

collection and reporting is also a key component of the

Company’s Task Force on Climate-related Financial

Disclosures (“TCFD”) disclosure, which HICL has now

been undertaking in full for the past three years.

An in-depth review of the Company’s and Investment

Manager’s sustainability performance and ambitions can

be found in HICL’s standalone Sustainability Report,

available on the Company’s website under Reports &

Publications, the highlights of which are on page 36 of

this report.

Board succession

In line with the UK Corporate Governance Code, after

nine years on the Board, Frank Nelson will step down

in July 2023. Frank was appointed to the Board in 2014

and has served as Senior Independent Director for seven

years. I would like to thank Frank for his unwavering

support and valued contribution to the Company.

Kenneth Reid will succeed Frank as Senior Independent

Director in July 2023, subject to re-election at the

2023 AGM.

The Board recognises the significance of having a diverse

range of views and experiences to support improved

decision-making. The Board composition complies with

the recommendations made by the Hampton-Alexander

and Parker Reviews as well as the FCA’s Listing Rules,

as applicable to closed-end investment companies.

Further information can be found in the Report of the

Directors – Diversity Policy on page 90.

Outlook

HICL continues to operate in an unpredictable

macroeconomic and geopolitical environment.

Financial markets remain volatile, and the level and timing

of peak inflation and interest rates remains uncertain.

Against this short-term outlook, the Company’s own

valuation assumes a significant decrease in inflation over

the coming year, with HICL’s UK RPI forecast returning to

2.75% from April 2024. In isolation, were outturn inflation

to be higher than assumed, this would have a positive

impact on the Directors’ Valuation.

InfraRed continues to see strong demand and robust

pricing for high-quality core infrastructure assets,

proven by HICL’s recent disposal, activity across

other InfraRed-managed funds, and observed market

data points. These asset realisations also provide an

important alternative source of capital outside of equity

and debt markets and enable continued refinement

of HICL’s portfolio. Notwithstanding this, the shift in

macroeconomic conditions has negatively impacted

listed market valuations across real assets and is likely to

reduce the Company’s access to equity capital markets

in the short term.

Looking further ahead, the outlook for the core

infrastructure asset class remains buoyant, underpinned

by the growth drivers of decarbonisation and

digitalisation combined with the growing need to

enhance ageing infrastructure. Equipped with a healthy

balance sheet and multiple sources of funding, HICL

is well placed to continue navigating the evolving core

infrastructure landscape with discipline and ambition,

delivering sustainable long-term income and capital

growth to its shareholders.

Mike Bane

Chair

23 May 2023

8.9% p.a.

Total return

since IPO in 2006

0.8x

Inflation

correlation

32.2

years

Weighted average

asset life

£160m

raised through

equity issuance

HICL Annual Report 20236

HICL at a glance

Our purpose is for HICL to be the

pre-eminent investor in essential core

infrastructure in our chosen markets

Read more about the infrastructure market on page 10

Our vision is to enrich lives through infrastructure

Read more about our Top 10 investments on page 26

Strong social

foundations

Connecting

communities

Sustainable modern

economies

47% 38% 15%

of portfolio of portfolio of portfolio

Assets that constitute the

foundation of our societies,

such as:

– Health

– Education

– Fire, Law and Order

– Accommodation

Assets that link people to

the economy and each other,

suchas:

– Availability or toll roads

– Rail and rolling stock

– Fibre networks

– Mobile towers

Assets supporting the energy

transition and continued

resource security, such as:

– Water

– OFTOs

– District energy

– Electricity transmission

A commitment to sustainability

Read more about HICL’s sustainability highlights on page 37

As a prominent long-term investor

in core infrastructure, HICL has a

role in society that extends beyond

its shareholders.

Our infrastructure supports the lives and livelihoods

of the communities in which we operate. Around the

world over 20 million people have access to HICL’s

infrastructure; in the UK alone, HICL’s assets touch

the lives of one in four citizens. As a result, the

Company has an exceptional opportunity to make

a positive social contribution by enhancing the

experience of its end users and wider stakeholders.

The stewardship of

essential infrastructure

assets confers an

important responsibility,

and significant

opportunity, to improve

community outcomes.

Mike Bane

Chair of the Board of Directors

Overview Strategic Report Governance Financials HICL Annual Report 2023 7

InfraRed is the Investment Manager to the Company,

the Operator of the Group’s investment portfolio and

is responsible for delivering HICL’s purpose and vision

A strong Investment

Proposition delivering

key infrastructure

attributes to investors

Read more at www.ircp.com

Geography

Sector

49%

HICL Annual Report 20238

HICL at a glance continued

A diverse portfolio

with over 100 assets

Read more about out Top 10 investments on page 26

A diverse portfolio of over 100 assets

Affinity

Water

Sector: Electricity & Water

Location: UK

% of portfolio: 7%

HICL holding: 33.2%

Texas Nevada

Transmission

Sector: Electricity & Water

Location: USA

% of portfolio: 6%

HICL holding: 45.8%

Southmead

Hospital

Sector: Health

Location: UK

% of portfolio: 4%

HICL holding: 62.5%

1 By value, at 31 March 2023, using Directors’ Valuation

2 Commitment as at 31 March 2023, transaction completed in April 2023

1 UK 64%

2 EU 17%

3 North America 13%

4 Australia/New Zealand 6%

1 Accommodation 9%

2 Education 12%

3 Electricity & Water 15%

4 Health 23%

5 Fire, Law & Order 4%

6 Transport 31%

7 Communications 6%

Overview Strategic Report Governance Financials HICL Annual Report 2023 9

A63

Motorway

Sector: Transport

Location: France

% of portfolio: 6%

HICL holding: 21.0%

Fortysouth

Sector: Communications

Location: New Zealand

% of portfolio: 6%

HICL holding: 40.0%

Pinderfields &

Pontefract Hospitals

Sector: Health

Location: UK

% of portfolio: 3%

HICL holding: 100.0%

High

Speed 1

Sector: Transport

Location: UK

% of portfolio: 4%

HICL holding: 21.8%

Home

Office

Sector: Accommodation

Location: UK

% of portfolio: 3%

HICL holding: 100.0%

Royal School of

Military Engineering

Sector: Accommodation

Location: UK

% of portfolio: 4%

HICL holding: 100.0%

Northwest

Parkway

Sector: Transport

Location: USA

% of portfolio: 6%

HICL holding: 33.3%

1 Following completion of the partial disposal announced 25 April 2023, HICL will retain a 23.3% equity interest

HICL Annual Report 202310

The Infrastructure Market

HICL’s vision is to enrich lives through

infrastructureby developing strong social

foundations, connecting communities and

supporting sustainable modern economies.

The scale of the investment challenge

McKinsey estimates

that an average of USD

3.7 trillion per year of

infrastructure investment is

required globally by 2035,

just to keep pace with

economic growth.

The World Bank estimates

that roughly USD 2.6 trillion

is required annually until

2030 in sustainability-related

infrastructure spending

alone, to meet the UN SDGs

and stay on a path to a

net-zero society by 2050.

The G20 Global

Infrastructure Outlook

estimates that the world

needs to invest USD

94 trillion in infrastructure

by 2040 to meet global

economic growth and

development goals.

Underpinning each of these three themes is a fundamental

need for infrastructure investment across the world, driven

bydemographic shifts, increasing urbanisation, technological

advancement and climate change.

HICL invests in core infrastructure, the segment of the

infrastructure market at the lower end of the risk spectrum, and

in line with HICL’s core infrastructure framework (see page 14).

Core infrastructure captures those critical assets that underpin

the functioning of economies and societies, and therefore

represents the most pressing investment need.

In the OECD, the core infrastructure sectors in need of investment

include transport, healthcare, electricity grid infrastructure and

digitalisation. Investment decisions in infrastructure, which

are inherently long term, will increasingly be viewed through

asustainability lens as developed economies look to harness

technology to combat climate change and grow economies.

Driven by the fundamental trends set out in this section,

thescale of investment required across HICL’s target

sectors and geographies is significant. As a result, the

Company expects to benefit from attractive opportunities

toinvest in a range of core infrastructure projects.

$94

trillion

investment needed to meet

global economic growth

$2.6

trillion

required annually in sustainability-

related infrastructure spending

to meet the UN SDGs

$3.7

trillion

per year of infrastructure

investment is required globally

by 2035

Sources: Please see Appendix 3 on page 159

Overview Strategic Report Governance Financials HICL Annual Report 2023 11

2050

2019

* Europe, North America, Australia and New Zealand

Population by age group in HICL’s core geographies*

+49%

increase in people aged

65+ between 2019 and 2050

65 or over

Under 65

In response, investment is required to both

adequately replace ageing infrastructure,

and to adapt infrastructure, old or new,

to changing patterns of service delivery,

urbanisation and demographic shifts,

including rapidly ageing populations

acrossdeveloped markets.

According to the OECD, healthcare

spending for people aged 65 and over

is on average 2.7 times higher than for

younger age groups.

Government responses acknowledge

the significant task required:

– In the UK, the National Infrastructure

Strategy (“NIS”) published in November

2020 outlines a plan for over £100bn

of infrastructure investment over the

coming years. In October 2020, the UK

government also pledged to build 40

new hospitals by 2030 with a total cost

of close to £4bn. Though subsequently

pared back, this indicates the significant

need for new critical social infrastructure.

In April 2021, the UK government also

announced a commitment to invest

£1.8bn in the construction of new

educational facilities.

– In 2021, the European Union launched

the Recovery and Resilience Facility

(“RRF”), which allows the European

Commission to raise funds that are

used to help Member States implement

investments that are in line with the EU’s

priorities. To date, the RRF has allocated

over €10bn to social infrastructure.

– European countries including France,

Germany and the Netherlands continue

to use the PPP model to develop new

social infrastructure, with c.€3.36bn of

new opportunities in the healthcare and

education spaces launched across the

region between 2020 – 2022.

– In the US, the American Jobs Plan

(2021) aims to invest $2.3tn in a variety of

infrastructure projects, including $400bn

for expanding access to affordable

care for elderly and disabled Americans

and $100bn for building and upgrading

public schools. PPPs (known as P3s) are

expected to be a key delivery mechanism

for these investments.

From schools and hospitals to police and fire stations,

social infrastructure assets are critical to the functioning

of communities and play a crucial role in the global

economy. As new technologies emerge, existing assets

decay and the needs of societies shift over time, upgrading

and building new social infrastructure is critical to people’s

quality of life.

With net zero targets high on the

agenda of most developed nations,

there is a growing need to decarbonise

existing social infrastructure. This is

expected to create opportunities for

additional investment in existing

facilities, working alongside public

sector clients. A report produced by

the New Economics Foundation in

September 2022 found that private

investment in carbon-reduction

activities would need to increase by

£140bn over the next five years if the

UK is to reach its net zero targets.

Strong social

foundations

Sources: Please see Appendix 3 on page 159

HICL Annual Report 202312

Data consumption

Data volume in zetabytes

New Zealand*

Germany

Ireland

Australia*

Finland

Austria

Netherlands

France

Denmark

Portugal

Sweden

Norway

Spain

010 2025

The Infrastructure Market continued

Policy responses across HICL’s markets

recognise the additional investment

required and include:

– The EU’s Gigabit Society vision, under

which all households in the EU should

have access to internet connection

speeds at least 100Mb/s by 2025. This is

estimated to require an overall investment

of c.€500bn by 2025.

– Project Gigabit, a £5bn initiative launched

in 2021 with the primary goal of expanding

networks capable of delivering gigabit

coverage to 85% of UK premises by

2025 and later progressing this to

nationwide coverage.

Transport

Investment in transport infrastructure is

essential to meet the growing demand

for mobility and ensure the smooth

functioning of economies. The trends of

ageing infrastructure and decarbonisation

continue to drive the need for funding in

this space.

Policy responses recognising

this need include:

– The US Bipartisan Infrastructure

Investment and Jobs Act was made

effective in 2021 and allocates over

$110bn to repairing ageing roads and

bridges. Much of this infrastructure

across these markets will be delivered

by private capital through established

funding mechanisms, with operating

models at the lower end of the

infrastructure risk spectrum.

– In March 2020, as part of its budget,

the UK government pledged £640bn of

infrastructure investment between 2020

and 2025. This was followed by the

government setting forth its intention to

earmark £27bn of funds against a new

road investment strategy.

– The EU’s target of becoming carbon

neutral by 2050 is expected to prompt

substantial investments in the rail and

rolling stock sectors as low-carbon

transport mediums supported by the

rollout of electric, hydrogen and hybrid

trains. These investments should also

help the EU achieve its goal of reducing

transport-related greenhouse gas

emissions by 90% before 2050,

which was established in 2020

as partof the European

Green Deal.

Infrastructure that connects communities, such as

roads,bridges and digital communication networks,

plays a vital role in driving development, connecting

people to employment and education and is

fundamentalto our social wellbeing.

Connecting

communities

Communications

Virtually all aspects of our lives are

becoming increasingly digitised over time,

with the amount of data copied, captured

and consumed worldwide projected to

show a 182% increase by 2025 relative

to the 2020 level. As such, there is a

significant requirement for upgraded

digital infrastructure to meet these new

needs. In many mature geographies,

the availability of full fibre connections to

homes and businesses remains nascent,

lagging behind the demands of modern

economies and requiring substantial capex

investment to upgrade.

The roll-out of fibre broadband varies

significantly by country, with different

strategies and regulatory frameworks

employed by national governments to meet

connectivity objectives. In general, countries

with mature regulatory regimes, concession-

based frameworks and subsidised rural

networks, such as France, provide the most

suitable geographies for core infrastructure

investment as they offer long-term cash flow

visibility and have low or no risk of overbuild.

Development of tower infrastructure,

supporting mobile connectivity, is also

expected to grow substantially due to the

rollout of 5G and material increases in

mobile data consumption. Whilst some

geographies are well advanced, others

such as New Zealand are earlier in the 5G

journey and require a significant increase in

tower capacity over the next 5 to 10 years.

* For supplementary notes and sources, please see Appendix 3 on page 159

+182%

Growth in data

consumption from

2020 – 2025

Fibre penetration and 5G

penetration by country

5G Coverage as a % of population

(as of October 2022)

FTTP Coverage – Homes

passed as a proportion

of total households (as

of September 2022)

£51bn

Ofwat announced a £51bn

spending package to improve

the resilience of the UK

water network and promote

environmental sustainability

Overview Strategic Report Governance Financials HICL Annual Report 2023 13

Renewable energy

Traditional uses of Biomas

Non-renewable electricity

Fossil fuels and other

Decarbonisation

While decarbonisation is the long-term

driver, energy strategy in developed

markets is also materially driven by

increased concerns in the short term

over energy security (due to geopolitical

uncertainty), and energy affordability

(cost of living concerns) – together the

‘energy trilemma’. This is expected to

continue to drive significant investment

in energy infrastructure, in particular

across the breadth of the breadth of the

electricity system.

Addressing this trilemma requires new

sources of green electricity supply,

substantial shifts in electricity demand

due to the decarbonisation of heat and

transport, and substantially evolved grid

infrastructure to deal with both.

In the UK and US alone, we estimate an

investment need in energy transmission

and distribution of USD 2.5 trillion,

alongside USD 600bn to achieve the

decarbonisation of heat and USD 110bn

for the decarbonisation of transport.

A recent report by the Energy Transitions

Commission, estimates around USD 1.1

trillion a year is required to be spent on grid

and storage globally out to 2050, versus

USD 260bn a year currently.

Policy responses across HICL’s markets

recognise the challenge ahead and have

introduced a range of initiatives to develop

key infrastructure including:

– The US Inflation Reduction Act (“IRA”)

signed in 2022 allocates USD 386bn of

funding to energy and climate spending.

– The EU’s European Green Deal, (2020)

legally enshrined net-zero carbon

emissions by 2050, with at least 55%

of emissions reduced by 2030 relative

to 1990 levels. A crucial element of the

package is significant investment in the

reach and resilience of electricity grids.

– In the UK’s Infrastructure Delivery Plan

(2016), strategic priorities include the

delivery of electricity interconnectors

and an update to the transmission and

distribution network. The smart meter

roll-out programme sees a requirement

for85% of homes connected by 2024.

– In 2020, Ofgem proposed up to £35bn

upfront funding to improve the UK

energy network, accommodating for

greener energy, in line with the UK’s

NetZero Strategy.

– In 2022, Germany launched its €3bn

subsidy scheme that will support the

development of new district heating

systems using a minimum of 75%

renewable energy and the decarbonisation

of existing networks until 2028.

Sustainable

modern

economies

In the face of a changing climate, sustainable modern

economies need to increasingly manage essential resource

scarcity (e.g. water) and the transition to a low-carbon

economy. Significant investment in the generation,

transmission, distribution and storage of clean energy

isessential to deliver net zero target by 2050.

Resource scarcity

Key challenges faced by the UK water

system include the need to ensure drought

resilience, improve water quality and

combat water pollution. These challenges

can be addressed only with significant

levels of investment into the nation’s

water infrastructure.

In 2019, Ofwat announced a £51bn

spending package to improve the

resilience of the UK water network and

promote environmental sustainability.

Sources: Please see Appendix 3 on page 159

Global heat consumption

HICL Annual Report 202314

Business model

How we create value

Core infrastructure

characteristics we look for…

InfraRed evaluates the infrastructure

marketsystematically using

HICL’s coreinfrastructure framework:

Developed by the Board and

Investment Manager to ensure we

deliver on our Investment Proposition

to deliver on

our strategy…

Cash flow quality

– Low volatility in a range

of macro environments

– Suitable / diverse counterparties

– Inflation protection

– High capital cost

– Low operational complexity

Market positioning

– Monopolistic characteristics

– Regulated in some circumstances

– Capital intensive business model

– Structural protections

Criticality

– Strong social licence and public benefit

– Real assets supporting essential

services or facilitating important

social function

Deliver a sustainabledividend

An annual distribution of at least that

achieved in the prior year, fully cash

coveredand supported by long-term

portfolio earnings.

Grow Net Asset Value

Preserve and grow the capital value

of the investment portfolio over the

long term.

Build a diversified portfolio

tomanage risk

Spanning high-quality assets across

the core infrastructure market.

Provide a compelling

cost proposition

Evidenced through a competitive

Ongoing Charges Ratio.

Accretive

Investment

Value

Preservation

Value

Enhancement

Overview Strategic Report Governance Financials HICL Annual Report 2023 15

See next page for more detail on the three

pillars of HICL’s business model

through our sustainable

approach to value creation…

for the benefit of

our key stakeholders

Our communities

and end-users

We invest in essential assets which have

a social purpose and will have a beneficial

impact on the quality of life for the

communities where they are located.

10m+ 500km+

people with

direct access

to healthcare

facilities

of road and

high-speed

railways

120,000

student places

across schools,

colleges and

university facilities

Our clients

We work together with corporate partners

and public sector clients, including the

UK’s National Health Service (NHS), local

councils, National Highways, and various

government departments.

18 61

NHS Trusts in

the portfolio

Portfolio clients

surveyed in the year

Our shareholders

A long-term sustainable mindset is

imperative to achieve outperformance

for shareholders. We offer long-term real

returns from core infrastructure assets.

8.9% p.a. 164.9p

Total Shareholder

Return since IPO

NAV per share

HICL Annual Report 202316

The three pillars of

our business model

Accretive

Investment

HICL has a clearly defined Investment

Policy. This sets the overarching

framework within which HICL

seeks to construct a resilient core

infrastructure portfolio that delivers

the Investment Proposition and

is consistent with HICL’s overall

riskappetite.

Fundamentally it does this through:

– A structured asset quality evaluation

framework focusing on cash flow

quality, market positioning and criticality

– Careful and deliberate portfolio

construction to limit exposure to any

one factor and in so doing improve

portfolio resilience

– An overarching focus on sustainability

that is built into the investment process

(see HICL’s 2023 Sustainability Report)

– An objective that acquisitions

are generally accretive to key

portfolio metrics

Working within investment parameters

approved by the HICL Board, InfraRed is

responsible for the selection and pricing

of new investments and, from time-to-

time, disposals. The Acquisition Strategy

is periodically reviewed by the Board and

agreed with InfraRed.

InfraRed’s Origination and Execution team,

in coordination with the Fund Management

team, uses a variety of channels to source

accretive transactions for HICL.

The following summarises

HICL’s Acquisition Strategy:

Geography

Located in mature infrastructure markets

Segmentation

Core infrastructure market positioning

Asset quality

Defined by:

– Cash flow quality

– Market positioning

– Criticality

Value-add

Accretive to HICL’s

Investment Proposition

Value

Enhancement

InfraRed’s Asset Management

and Portfolio Management teams

pursue opportunities to deliver

outperformance from the existing

portfolio through a systematic,

strategic programme of value

enhancement. This upside is often

shared between HICL’s shareholders

and public sector clients for PPP

projects, or withthe customers of

regulated assetsthrough periodic

regulatory price reviews.

Fundamentally it does this through:

– Sponsoring the implementation of

initiatives within portfolio companies to

optimise asset business plans, pursue

growth initiatives or enhance capital

structures (for example, refinancing

existing senior debt facilities)

– Developing and implementing

procurement efficiencies across HICL’s

large and diverse portfolio, in particular

by leveraging economies of scale (for

example, management services and

insurances for PPP projects)

– Exploring opportunities to add to or

upgrade asset level facilities to improve

stakeholder outcomes whilst supporting

long-term shareholder returns (for

example, undertaking contract

variations on PPP projects that add to

the scope of services)

– Driving efficient financial and treasury

management of HICL, seeking

opportunities to reduce ongoing costs

– Considering where value can be

improved, or portfolio risk profile

improved, through selective disposals

Value

Preservation

InfraRed’s Asset Management and

Portfolio Management teams work

closely together, in partnership with

the management teams in HICL’s

portfolio companies, to deliver

HICL’s Investment Proposition by

preserving the value of investments

for shareholders and stakeholders.

The objective is to ensure portfolio

companies continue to operate

with the endorsement of their key

stakeholders, including through the

delivery of contractual and regulatory

requirements, in order to deliver the

base-case investment return.

Fundamentally it does this through:

– Providing effective governance of

portfolio companies, usually through

board representation

– Building relationships with key portfolio

company counterparties, in particular

public sector clients/regulators

– Facilitating and/or driving resolution of

operational issues, including disputes

and critical issues

– Delivering HICL’s sustainability strategy

at the asset level by promoting greater

awareness within portfolio company

management teams and driving the

pursuit of specific initiatives to comply

with regulation and support sustainable,

responsible business operations

– Oversight of financial performance of

each investment against HICL forecasts

– Optimising cash efficiency by managing

cash flow from HICL investments and

minimising cash drag on returns

– Managing the process and analysis

required for valuations of HICL’s portfolio

– Following prudent financial management

practices (e.g. accounting and tax

policies; treasury processes)

Overview Strategic Report Governance Financials HICL Annual Report 2023 17

Engaging with

our stakeholders

As a responsible owner of essential public assets,

HICL’s ability to deliver its Investment Proposition over the

long term is inextricably linked to the delivery of positive

stakeholder outcomes for the broader community.

Stakeholder expectations Our approach and touchpoints

Our communities and the end-users of our assets

We invest in infrastructure projects that provide

essential services to local communities.

In some instances, we deliver those services

directly, such as the provision of clean energy

or water, and in other instances these services

are performed by our public sector clients

such as healthcare services.

Communities expect seamless

access to essential services like

water, transport, and energy.

– We support community engagement

initiatives at the company level

– At the portfolio level, we facilitate the sharing

of best practice for engagement and design

of scalable solutions

– At the Manager level, InfraRed forms

dedicated groups to drive key initiatives

Our clients

We work together with corporate partners and

public sector clients, including the UK’s NHS,

local councils, National Highways, and various

government departments to deliver many of

our essential infrastructure services.

Infrastructure assets are built and

maintained in line with contractual

requirements, so that clients can offer

critical services to their communities.

– Direct and proactive client engagement

atthe portfolio company level

– Client surveys to understand the needs

of our clients and their communities.

This is a fundamental driver of our portfolio

impact strategy

– We engage in public-private working

groupsto identify solutions to industry

challenges such as net zero and

hand-back requirements

Our people

HICL portfolio companies employ over 1,200

people and thousands more through each

asset’s supply chain. InfraRed has a talented,

diverse team of over 190 people worldwide

which comprises over 20 nationalities

speaking 20 different languages.

Make a positive impact on the

environment and society whilst

growing personally and professionally.

– Through our governance rights, we ensure

portfolio companies who employ staff

directly have current and appropriate

policies in place such as diversity and

inclusion and modern slavery

– At the Manager level, InfraRed implements

initiatives around the principles of Attracting,

Retaining and Cultivating diverse talent and

empowering its employees

Our delivery and other partners

To enable high-quality infrastructure assets,

we partner with many specialist organisations

which include management service

providers, construction companies, facilities

management companies, financiers,

co-shareholders and advisers.

Collaborate with each company to

fulfil their own business objectives

whilst enabling the sustainable

delivery of high-quality services

toinfrastructure assets.

– Targeted engagement with business

partners at the asset and portfolio levels

– Quarterly and annual monitoring

– Manager-led semi-annual ESG summits

with all portfolio companies

Our shareholders

We invest in infrastructure assets using

the capital provided by our investors.

Our shareholders range from individuals

to substantial international institutions, and

pension funds which have a long-term

investment horizon.

Maximise long-term sustainable

financial returns for a given level of

risk. Accessible and transparent

reporting on the Company

and portfolio.

– Investor presentations targeted at both

institutional and retail investors

– Responding to investor information requests

– Transparent ESG reporting

AGM

2:00 pm Wednesday,

19 July 2023

Brewers Hall, Aldermanbury Square,

Barbican, London EC2V 7HR

HICL Annual Report 202318

Key Performance

and Quality Indicators

The Board has identified metrics to measure

HICL’s performance against its strategic objectives.

The results for the year ended 31 March 2023

are set out below.

Key Performance Indicators

Dividends

8.25p

2022: 8.25p

Measure

Aggregate interim dividends declared

per share for the year.

Objective

An annual distribution of at least that

achieved in the prior year.

Performance

2021 8.25p

2022 8.25p

2023 8.25p

Link to strategy

Positive Inflation Correlation

0.8x

2022: 0.8x

Measure

Changes in the expected portfolio return

for 1% p.a. inflation change for each and

every future period.

Objective

Maintain positive correlation with a

correlation of at least 0.5x.

Performance

2021 0.8x

2022 0.8x

2023 0.8x

Link to strategy

Total Shareholder Return

8.9% p.a.

2022: 9.0% p.a.

Measure

NAV growth and dividends paid per

share since IPO.

Objective

A long-term IRR target of 7% to 8%

asset out at IPO

Performance

2021 8.9%

2022 9.0%

2023 8.9%

Link to strategy

Competitive Cost Proposition

1.09%

2022: 1.06%

Measure

Annualised ongoing charges/average

undiluted NAV

Objective

Efficient gross (portfolio level) to net

(investor level) returns, with the intention

to reduce ongoing charges where

possible. Maintain within the range for

FTSE250 listed infrastructure peers.

Performance

2021 1.07%

2022 1.06%

2023 1.09%

Link to strategy

Cash-covered Dividends

1.31x / 1.03x

Including / excluding

profits on disposal

2022: 1.05x / 1.02x

Measure

Operational cash flow/dividends paid

to shareholders.

Objective

Dividend payments are covered by cash

received from the portfolio.

Performance

2021 0.90x

2022 1.05x

2023 1.31x

Link to strategy

1 Set by reference to the issue price of 100p/share, at the

time of HICL’s IPO in February 2006

2 Including profits on disposals versus original acquisition

cost of £45.5m. Excluding this, dividend cash cover would

have been 1.03x

3 Including profits on disposals versus original acquisition

cost of £4.8m. Excluding this, dividend cash cover would

have been 1.02x

4 Calculated in accordance with Association of Investment

Companies guidelines. Ongoing charges excluding

non-recurring items such as acquisition costs

Overview Strategic Report Governance Financials HICL Annual Report 2023 19

Key Quality Indicators

Investment Concentration Risk

49%, 7%

2022: 48%, 9%

Measure

Percentage of portfolio value represented

by the ten largest investments

Percentage of portfolio value represented

by the single largest investment

Objective

Maintain a diversified portfolio of

investments (thereby mitigating

concentration risk) and, at all times,

remain compliant with HICL’s Investment

Policy. Single asset concentration < 15%.

Performance

2021 46%

2022 48%

2023 49%

Link to strategy

Refinancing Risk

0.6%

2022: 0.0%

Measure

Investments with refinancing risk

within 24 months as a percentage

ofportfolio value

Objective

Manage exposure to refinancing risk

to20% of portfolio value.

Performance

2021 0.2%

2022 0.0%

2023 0.6%

Link to strategy

Risk/Reward Characteristics

22%

2022: 25%

Measure

Percentage of portfolio value represented

by the aggregate value of projects with

construction and/or demand-based risk

Objective

Compliance with HICL’s Investment

Policy, to be lower than the aggregate

limit of 35% for such investment.

Performance

2021 22%

2022 25%

2023 22%

Link to strategy

Sustainability Stewardship

97%

2022: 98%

Measure

Percentage of the portfolio that is rated

‘high’ for ESG performance

Objective

>75% of the portfolio rated high in

ESG performance.

Performance

2021 99%

2022 98%

2023 97%

Link to strategy

Unexpired Concession Length

32.2 years

2022: 29.8 years

Measure

Portfolio’s weighted average unexpired

concession length.

Objective

Seek where possible investments

that maintain or extend the portfolio

concession life such that it remains

above 20 years.

Performance

2021 28.6 yrs

2022 29.8 yrs

2023 32.2 yrs

Link to strategy

1 HICL’s Investment Policy stipulates that any single

investment (being, for this purpose, the sum of all

incremental interests acquired by HICL in the same project)

must be less than 20% (by value) of the gross assets of

HICL, such assessment to be made immediately post

acquisition of any interest in a project

2 ‘More diverse infrastructure investments’ which are made

with the intention ‘to enhance returns for shareholders’

aspermitted under the terms of HICL’s Investment Policy

– namely pre-operational projects, demand-based assets

and/or other vehicles making infrastructure investments.

Further details are set out in the Investment Policy,

available from HICL’s website

3 Refinancing required on Texas Nevada Transmission which

benefits from protection from increased debt coststhrough

the regulatory mechanism

4 Calculated as required asset refinancings within

24 months: lower of: (i) HICL’s share of debt to be

refinanced; and (ii) the valuation of HICL’s equity

investment; divided by HICL’s total Directors’ Valuation

5 ‘High’ rating in ESG performance means scoring 4/5 stars

in the HICL Sustainability Survey or subsequent metrics as

ESG reporting evolves

Link to strategy

Deliver a

sustainabledividend

Grow Net Asset Value

Build a diversified

portfolioto manage risk

Provide a compelling

cost proposition

HICL Annual Report 202320

Investment Manager’s

Report

The underlying portfolio was resilient, benefiting from

expert diversification and sound capital management,

and demonstrated improved cash flow generation in the

year. InfraRed remains focused on enhancing portfolio

composition as reflected in the high-quality acquisitions

and selective disposals made in the year. This approach

to active management and asset rotation has improved

portfolio diversification and significantly enhanced HICL’s

long-term earnings profile.

The quality of the Company’s portfolio, expertise of

its Investment Manager and attractions of the core

infrastructure market ensures that HICL remains resilient

and well positioned to pursue its strategy in a range of

market conditions.

Operational highlights

The underlying performance of the Company’s portfolio

was positive for the year ended 31 March 2023, returning

10.2% (9.6% at 31 March 2022)

which drove a Total

Shareholder Return

of 6.3%, offsetting the increase in

the portfolio weighted average discount rate in the year.

Operational outperformance was driven by the portfolio’s

0.8x correlation to inflation which has been achieved

through disciplined portfolio construction. Actual inflation

was ahead of expectations in the year and benefited the

Company’s cash flows. Further details of the drivers of

portfolio performance can be found in the Valuation of

the Portfolio section starting on page 46.

Right:

Edward Hunt

Head of Core

Income Funds,

InfraRed

Edward leads the

InfraRed team that

manages HICL

Left:

Helen Price

CFO, InfraRed

Helen is

responsible for

managing the

financial activities

carried out by

InfraRed for HICL

– Development and execution of HICL’s strategy

– Stewardship of portfolio assets through

proactive asset and portfolio management,

and the resolution of critical issues

– Stakeholder engagement across both public

and private sectors

– Investment origination, due diligence

and execution

– Capital raising, investor relations and

preparation of key external communications

In a year of heightened

macroeconomic uncertainty,

the Company has performed as

designed. HICL’s strong correlation

to inflation more than offset the

associated impact of higher discount

rates on asset valuations.

1 Performance of the portfolio relative to the opening weighted average discount rate

2 Based on interim dividends paid plus change in NAV per share in the year, divided by opening NAV per share

– Werner von Guionneau (CEO)

– Chris Gill (Deputy CEO)

– Stewart Orrell (Head of Asset

Management)

– Edward Hunt (Head of Core

IncomeFunds)

– Helen Price (CFO)

InfraRed acts as the

Investment Manager

to HICL with day-to-

day responsibility for

the following activities:

HICL’s Investment Committee

is the principal executive

decision-making body for

HICL within InfraRed and

is comprised of:

Fortysouth

see page 30

Texas Nevada

Transmission

see page 31

Overview Strategic Report Governance Financials HICL Annual Report 2023 21

Operational performance overview

Operational performance has been in line with the

Investment Manager’s expectations for the year. HICL’s

Public Private Partnership (“PPP”) portfolio (60% of the

Directors’ Valuation at 31 March 2023; 66% at 31 March

2022) performed well during the period, benefiting

from the inflation linkage built into its availability-based

contracted revenues and highly contracted cost base,

including fixed debt over the life of the project.

The Company’s three largest demand-based

investments (17% of the Directors’ Valuation at 31 March

2023; 22% at 31 March 2022), together experienced

traffic broadly in line with valuation assumptions for the

year. Wider economic volatility has not had any material

impact on the performance of these investments in the

year, helped by their strategically significant locations and

entrenched demand.

The operational performance of the Company’s largest

regulated investment, Affinity Water (7% of the Directors’

Valuation at 31 March 2023; 9% at 31 March 2022),

was negatively impacted by unusually adverse weather

conditions during the year which resulted in increased

operating costs and incentive regime penalties.

This was offset by the positive impact of actual and

forecast inflation, as well as the reflection of Ofwat’s final

PR24 methodology and early view on the allowed return

on capital for the next Asset Management Plan period

(2025 – 2030).

Following the completion of Fortysouth (formerly known

as Aotearoa Towers) during the year, InfraRed has been

working closely with One NZ

to oversee the transition

of the passive infrastructure. Operational and financial

performance over the period was in line with HICL’s

acquisition assumptions. HICL’s investment in Texas

Nevada Transmission completed after the year-end,

and the business has been performing well since the

commitment was made in summer 2022. InfraRed’s

local asset management teams are working closely with

both companies to ensure a smooth transition into the

HICL portfolio.

Enhanced disclosure on the operational performance

of each of HICL’s Top 10 assets is set out starting on

page 26.

HICL’s business model

deliveringvalue

The proactive management of the Company’s balance

sheet and portfolio composition is central to HICL’s

business model.

Proactive balance sheet management

Disciplined management of the Company’s funding

position remains a priority. In March 2023, the

Company’s Revolving Credit Facility (RCF) was

renegotiated to increase its capacity to £650m and to

extend the tenor to 30 June 2026. This replaced the

existing £400m RCF and £330m accordion, which

was activated in July 2022 to support the Company’s

attractive short-term investment pipeline. The new facility,

which remains sustainability linked, provides substantial

funding resources and sufficient tenor to support the

Company’s strategy.

In May 2023, HICL issued a £150m Private Placement,

further diversifying the Company’s sources of capital.

Proceeds of the issue will be used to reduce drawings

on the Company’s RCF, and extend the maturity and

reduce the interest rate risk on the equivalent drawings.

The maturity aligns with the forecast capital returns from

HICL’s PPP portfolio to enable the Company to reinvest

this capital ahead of time.

HICL’s capitalisation was also supported by an accretive

equity issuance in July 2022 that raised £160m and

was subject to scale back. The continued demand

from institutional and retail shareholders demonstrates

the support for HICL’s strategy and appetite for the key

attributes of core infrastructure.

Accretive investment activity

Acquisition and disposal activity in the year served to

improve portfolio composition, enhance diversification

and contribute significantly to the Company’s strategy

to increase asset life and long-term earnings generation

within the portfolio.

Three high-quality investments were announced in the

year, which comprised:

– Fortysouth (New Zealand), a passive mobile tower

infrastructure owner with over 1,500 towers.

Completed in November 2022 (6% of the Directors’

Valuation);

– Cross London Trains (“XLT”) (UK), a PPP asset

comprising 115 electrified trains. Completed in the

period (3% of the Directors’ Valuation); and

– Texas Nevada Transmission (“TNT”) (US), spanning

two distinct electricity transmission systems and

over 800km of high-voltage transmission lines.

Completion occurred post year-end (6% of the

Directors’ Valuation).

Highlights

6.3%

Total return

in FY23

(NAV basis)

10.2%

Portfolio

return

in FY23

£650m

Sustainability

linked RCF

refinanced

in year

£150m

Private Placement

issued May 2023

Largest

single asset

concentration

(Affinity Water)

3 Formerly known as Vodafone New Zealand

Blankenburg

Tunnel

Pinderfields and

Pontefract Hospitals

see page 34

HICL Annual Report 202322

Investment Manager’s Report

continued

Highlights

£630m

across four

acquisitions

announced in

the year (or

post year end)

£174m

across two

disposals

completed or

announced in

the year (or

post year end)

1.8x

Multiple on cash

invested achieved

from Northwest

Parkway

realisation

1,500+

Number of

Fortysouth towers

across NZ

900+ MW

of renewable

energy connected

to TNT’s network

In addition, in April 2023 the Company announced the

acquisition of a stake in Altitude Infra, a leading owner/

operator of fibre-to-the-home (“FTTH”) in rural France

with a total footprint covering over five million households.

These investments were targeted by InfraRed owing to

their attractive core infrastructure attributes; essential

public assets with contracted and/or regulated cash

flows, that enjoy a highly defensive position in their

respective markets. This positioning extends to the

robustness of the investments’ capital structures, with

limited refinancing risk, as well as broader protection

from the risk of higher interest rates through inflation-

linked cash flows and, in the case of TNT, a regulated

cost of capital. In an environment of elevated inflation

and interest rates, assets that provide these protections

are particularly attractive. These investments were

delivered through InfraRed’s deep global relationships,

innovative approach to bidding and strong track record

for execution.

The transaction activity further demonstrates the

evolution of core infrastructure and the compelling set of

investment opportunities arising from modernising global

economies. In particular, the megatrends of digitisation

and decarbonisation provide tailwinds that are expected

to support long-term growth in these recent investments,

funded from the assets’ existing capital resources.

Alongside accretive investments, asset disposals provide

an important lever to optimise portfolio construction,

realise NAV outperformance and provide a valuable

source of funding for the Company. In the year, HICL

completed the disposal of its 100% interest in the Queen

Alexandra Hospital (“QAH”) PPP project, generating

1.5p of NAV outperformance and £108m of proceeds

which were subsequently invested into the accretive

acquisitions described above.

Following the year end, HICL executed an agreement

to sell 10% of its 33.3% shareholding in the Northwest

Parkway for a consideration of USD 86m, achieving a

small premium to carrying value. This sale crystallised

a11.0% holding period IRR since the initial investment

in December 2016 and a 1.8x multiple on cash invested,

demonstrating the continued ability of the Company

to deliver capital growth and compound shareholder

returns. As well as providing a valuable source of funding,

the transaction supported the Directors’ Valuation in a

period of macroeconomic uncertainty. Not least, the

disposal crystallised the significant valuation appreciation

since acquisition to effectively rotate capital and optimise

HICL’s diversification by sector, geography and

revenue type.

Specialist asset management

InfraRed’s dedicated team of specialist asset managers

is key to the delivery of investment performance through

the investment lifecycle. The proficient onboarding of

new acquisitions has been a critical asset management

activity in the year, delivered via InfraRed’s asset

management platforms out of London, New York

and Sydney.

InfraRed’s long track record of successfully delivering

assets through construction was demonstrated in

the period. On 1 July 2022, Paris-Saclay University

commenced operations in line with the agreed availability

date, marking the conclusion of a four-year construction

period. Several key milestones were also achieved at

Blankenburg Tunnel, with works expected to complete

on schedule in 2024, notwithstanding supply chain

pressures linked to the war in Ukraine.

Broader active management by InfraRed of physical

asset condition across the PPP portfolio continued

over the year. This included proactive leadership of

the delivery of remediation works where necessary,

including identified construction defects. The value of this

work was demonstrated at Pinderfields and Pontefract

Hospitals, where commercial agreement to deliver a

major programme of defect remediation works enabled

the resumption of shareholder distributions in the year

and de-risked the future cash flows from the project.

Extensive collaboration with project partners and wider

asset stakeholders is also key to the effective resolution

of broader industry issues. The Investment Manager

maintains its position as a member of the Infrastructure

and Project Authority’s (“IPA”) Project Expiry Working

Group as well as the IPA’s Net Zero Working Group.

At an asset level, InfraRed’s dedicated Portfolio Impact

team and strategy facilitates greater collaboration with

clients and other key stakeholders, while delivering for

local communities. More detail is set out in HICL’s 2023

Sustainability Report.

What does 0.8x inflation

correlation mean?

HICL’s correlation to inflation is expressed

as 0.8x. This means that if inflation were 1%

above assumptions each and every year

in the future, the return from the portfolio

would be expected to increase by 0.8%.

Increases in inflation expectations are

reflected immediately in the Company’s

NAV. However, the effect of inflation on

future portfolio earnings is not linear and

takes time to make a meaningful impact on

distributable cash in the short term, and it

is also affected by the contractual lags to

implement inflationary uplifts. Accordingly,

it is important to look at total return (NAV

movement plus dividends) to evaluate the

impact of inflation correlation.

Overview Strategic Report Governance Financials HICL Annual Report 2023 23

Highlights

1.31x/

1.03x

Dividend cash

cover

66%

Portfolio company

gearing

Article 8

HICL’s SFDR

fund alignment

Financial highlights

NAV per share increased by 1.8p over the year to 164.9p

at 31 March 2023 (31 March 2022: 163.1p).

The movement in the NAV per share in the year was

largely attributable to the portfolio’s strong inflation

correlation. The positive portfolio performance was offset

by the valuation impact of an increase in the weighted

average portfolio discount rate to 7.2% at 31 March 2023

(6.6% at 31 March 2022). The weighted average discount

rate was increased to recognise elevated government

bond yields throughout the jurisdictions in which HICL

invests, as central banks increased benchmark rates in

reaction to high levels of inflation. There was no material

impact to financial performance from rising interest rates.

Overall, HICL’s portfolio company gearing, which stands

at 66%, is predominantly fixed-rate and the Company

has limited sensitivity to rising interest rates (see NAV

sensitivity chart on page 50).

Dividend guidance

The Board’s extended dividend guidance has been

developed with the full support of the Investment

Manager. Significant strides have been made in recent

years to diversify, and extend, the Company’s revenue

streams through both acquisitions and disposals.

These activities have sought to strike an appropriate

balance between maintaining HICL’s high dividend

(in relative terms), prioritising capital preservation

and building an enduring platform for long-term NAV

appreciation and dividend growth.

To date this strategy has been carried out effectively.

Since HICL acquired its first non-PPP investments in

early 2016, the Company’s weighted average asset life

has increased by over 50%, while inflation correlation has

increased by over 30% to 0.8x over the same timeframe.

The latter has served to provide significant protection

to investors over the past year, offsetting the negative

impact of higher interest/discount rates on the portfolio

valuation while also considerably enhancing HICL’s future

earnings and cash flow profile. All the while, the Company

has continued to pay out the highest dividend in the core

infrastructure peer group.

Short-term distributable cash continues to recover,

as reflected in the further increase in dividend cash

cover (1.03x before profits on disposals), and HICL’s

asset life is now the highest in its history. Nevertheless,

this period of consolidation remains in progress and

accordingly InfraRed supports the decision to maintain

the dividend at 8.25pps for the year ending 31 March

2025. The dividend is a material component of HICL’s

total return profile which, when coupled with high inflation

correlation, the long-term visibility of portfolio cash flows

and potential for NAV growth, provides a compelling

investment proposition for shareholders.

Funding position

As at 31 March the Company’s investment entity

subsidiary, IILP, was £219m drawn on its RCF, with £16m

of short-term commitments at that date. Following year-

end transactions, including the completion of TNT, the

completion of Altitude Infra, the agreed partial disposal of

NWP, the Private Placement proceeds and the expected

investment in the Hornsea II OFTO, the Company is

expected to have drawn c.£360m on its RCF.

Further information on the investment valuation and

financial performance can be found in Valuation of the

Portfolio starting on page 46, and the Financial Review

starting on page 40.

Governance

The Board continues to deliver its succession plan,

with Frank Nelson, HICL’s Senior Independent Director

(SID), planning to step down in July 2023. Frank has

shown steadfast commitment to the Company over

the nine years of his tenure, and we thank him for his

significant contribution.

At the Investment Manager level, Keith Pickard stepped

down from the HICL Investment Committee upon his

retirement from InfraRed in March 2023. In his stead,

Helen Price, CFO for HICL and InfraRed, joined the HICL

Investment Committee in July 2022.

HICL Annual Report 202324

Investment Manager’s Report

continued

Highlights

20m

people worldwide

use and depend

on HICL owned

infrastructure in

their day-to-day

lives

100%

of the portfolio

covered in

newly published

emissions data

Net Zero

targets published

for the portfolio,

plotting the path

to decarbonising

the portfolio by

2050

Sustainability

HICL’s portfolio has an important social impact.

By facilitating the delivery of essential services in a

socially responsible manner, the Company’s underlying

assets contribute to many of the UN SDGs and deliver

an inherent social good. However, a genuine social

contribution requires going beyond the reliable provision

of infrastructure. To that extent, InfraRed has created a

dedicated Portfolio Impact team and strategy which aims

to drive positive social outcomes for local communities

and to enhance relationships with public and private

sector clients.

During the year, InfraRed published its net zero

progress report setting out interim targets for all funds,

incorporating a proportion of HICL’s portfolio which is

aligned or aligning to net zero. Within this framework,

HICL has disclosed its own interim targets, and the entire

portfolio is expected to align with InfraRed’s pledge of

achieving net zero by 2050 or earlier.

Supporting these initiatives and in line with HICL’s active

sustainability strategy, the Investment Manager has

achieved key milestones in data collection and disclosure

in the year for the Company. InfraRed’s expanded

annual ESG survey has enabled HICL to expand its

suite of sustainability metrics and targets to include all

mandatory PAI

indicators under the EU’s SFDR regime,

an important part of the Company’s wider disclosure as

an Article 8 fund.

Sustainability Highlights are provided on pages 36

– 37. Full details are set out in the Company’s 2023

Sustainability Report, available on the HICL website.

Key risks

HICL’s risk appetite statement, approach to risk

management and governance structure are set out

inRisk and Risk Management, starting on page 53.

The Investment Manager’s view on the performance

ofkey risks in the year is set out below.

Political and regulatory risk

Geopolitics

Geopolitical risk was elevated in the period, reflecting the

continuing war in Ukraine. The Company is not directly

exposed to the region, either via its investment portfolio

or its shareholder register. The secondary impacts of

the conflict, including supply chain disruption, increased

energy costs and materials inflation have had a limited

impact on a subset of projects during the period, with

risks to equity mitigated through contractual pass-

through mechanisms.

Political risk also manifested in the UK, with two changes

of Prime Minister in the year. The political situation

has since stabilised, with the next general election

to be held no later than January 2025. The broader

need for infrastructure procurement enjoys bipartisan

political support, though specific areas of policy focus

undoubtedly vary. The Investment Manager continues

to judge UK political risk as low. Notwithstanding that,

the rationale for portfolio diversification, including across

clients, sectors and countries, remains strong and is a

key feature of HICL’s offering and strategy.

PFI handback

The process whereby PFI projects revert to public

ownership is expected to gather momentum over

the next decade. Ensuring the smooth transition of

assets over time is therefore a prominent issue for

all PFI stakeholders, public and private sectors alike.

InfraRed enjoys representation in the IPA’s dedicated

working group on this project, as well as the IPA’s equity

sponsor steering group, and a HICL asset participated

in an IPA-sponsored mid-life contractual review in the

year. The Investment Manager launched its own rolling

programme of handback preparedness reviews, which

focuses initially on the 29 projects due to be handed

back in the next ten years (representing 11% of the

Directors’ Valuation at 31 March 2023). This exercise will

guide InfraRed’s planning and asset management design

around this risk.

Client relationships

There continue to be risks inherent in long-term

partnership frameworks, particularly in the context of

broader operating and financial pressures across the UK

public sector. In specific cases this has resulted in more

adversarial forms of contract management, particularly

in a subset of the Company’s UK healthcare projects.

Though this remains immaterial to the portfolio, the risk

for further instances of this behaviour exists, including the

non-payment of contracted revenues, which could pose

a risk to the Company’s cash flow.

4 Principal Adverse Impact

Affinity Water

see page 26

HS1 see page 32

Overview Strategic Report Governance Financials HICL Annual Report 2023 25

10.5p

The increase in

NAV per share

if inflation is 3%

above HICL’s

assumptions for

the next three

years

Regulation

The Company has six assets classified as being subject

to regulatory oversight, though the nature and extent

of this varies significantly across the assets. Notably,

Affinity Water is approaching a periodic price review by

Ofwat, the UK water regulator in 2024 (PR24) which is

discussed further in the Top 10 assets – Operational

Review. The Investment Manager notes regulatory and

political overtures regarding historic under-investment in

the sector and the potential for a more penal operating

regime from 2025 onwards. InfraRed enjoys a productive

dialogue with Ofwat, plays an important role in relevant

industry forums and believes that this risk is reflected

appropriately in the Directors’ Valuation.

Demand risk and consumer behaviour

The acute risk posed by Covid-19 travel restrictions

on HICL’s demand-based assets has significantly

reduced. This has enabled a greater degree of visibility

over potential long-term fluctuations to usage patterns,

driven by factors such as shifting working patterns as a

result of Covid-19 and the decarbonisation of transport.

An estimate of this impact has been incorporated into

the long-term revenue forecasts for Northwest Parkway

and HS1. Risk remains that current demand forecasts do

not accurately reflect shifts in usage patterns for HICL’s

demand-based assets. The strategic positioning, long

traffic histories and entrenched demand enjoyed by

HICL’s demand-based assets mitigates this risk.

Macroeconomic risk

The returns from HICL’s core infrastructure portfolio are

significantly positively correlated to inflation at 0.8x over

the long term. Recognising the current high inflationary

environment, NAV and cash flow sensitivities have been

calculated. Where inflation is higher than HICL’s valuation

assumptions by 3% for the next three years, NAV would

increase by 10.5p per share.

Discount rates used to value core infrastructure assets

did not fully reflect the significant decrease in risk-

free rates observed over the last decade, serving to

increase the implied equity risk premium to historically

high levels. This anticipation of a normalisation of

the interest rate environment insulated the portfolio

valuation from the full impact of the volatility of risk-

free rates. Notwithstanding this, HICL increased its

weighted average discount rate by 60bps over the

year. The current implied equity risk premium of 3.5%

remains appropriate and commensurate with HICL’s

risk positioning and long track record of delivering

for shareholders.

Market and outlook

During a period of heightened geopolitical and

macroeconomic uncertainty, the Company’s portfolio

has again demonstrated its resilience. Volatile periods

such as this serve to underscore the importance

of the disciplined portfolio construction and expert

diversification that underpin HICL’s continued ability

todeliver long-term outperformance.

The Company is well positioned to continue delivering its

strategy. HICL’s strong inflation linkage, prudent approach

to managing its balance sheet and established track

record of delivering yield and capital growth, ensure that

HICL remains a compelling all-weather investment and

avaluable diversifier for investor portfolios.

InfraRed continues to identify and pursue opportunities

to manage portfolio composition and improve key

portfolio metrics through highly selective acquisitions

and disposals. In this task, InfraRed remains focused

on ensuring that HICL is well positioned for the future as

its PPP concessions approach their capital redemption

phase. This necessitates proactive management, and

careful consideration of the relative merits of short-term

yield as against an enhanced longer-term earnings

profile, such that HICL continues to deliver its compelling

investment proposition for decades to come.

The Company’s vision, to deliver strong social

foundations, connect communities and support

sustainable modern economies guides HICL’s investment

ambition. This vision connects with powerful megatrends

of digitalisation and decarbonisation (see Infrastructure

Market section on pages 10-13) which continue to drive

infrastructure development and provide significant

opportunity for investment. Strong investment discipline,

aided by HICL’s core infrastructure framework (see page

14), and InfraRed’s differentiated capability to source

opportunities, stand the Company in good stead to

deliver its strategy.

HICL has a portfolio of diversified assets with attractive

core infrastructure characteristics, in a sector buoyed by

powerful growth drivers. Together these underscore the

compelling nature of HICL’s investment proposition today

and into the future.

Download the HICL

Sustainability Report

online www.HICL.com

HICL Annual Report 202326

Top 10 assets

–

operational highlights

I am delighted to join

Affinity Water as CEO,

particularly at such an

important time in the

regulatory period...

Affinity is a business

with huge potential.

Keith Haslett

CEO, Affinity Water

1. Affinity Water

Affinity Water provides on average 950 million litres

of clean water each day to a population of more than

3.6 million people in southern and eastern England.

As a regulated utility, the company has clear visibility

over its appointed revenue base through a well-

established price review mechanism.

On 13 December 2022 Ofwat published its final

methodology for the upcoming periodic price review in 2024

(PR24), which included an early view of the allowed return

on capital (“WACC”), and on 20 March 2023 it released

its decision on licence modifications to promote financial

resilience. Together, these increase visibility over Affinity

Water’s business plan for PR24. Ofwat’s methodology

represents a gradual evolution from the PR19 approach and

is expected to result in significant growth in the company’s

Regulatory Capital Value as a result of substantial increases

in total expenditure allowances. The final PR24 methodology,

early view on WACC and PR24 licence amendment have

been reflected in HICL’s valuation of Affinity Water as at

31 March 2023 and had a small positive impact in aggregate.

Free cash flows are currently being reinvested into capital

growth, with shareholder distributions expected to resume

inthe next regulatory period.

Operational performance over the year was slightly behind

expectations as a result of extreme hot weather during the

summer of 2022 and freeze-thaw conditions in December

2022. Both of these events resulted in increased operating

costs and revenue penalties. Operating costs were also

affected by high energy prices during the year, although the

financial impact was substantially mitigated as a result of the

company’s hedging strategy.

Despite the challenging external environment, Affinity Water

did not impose usage restrictions at any point during the

year, achieved its FY2023 leakage target, and is on track to

deliver a 20% reduction in leakage by 2025. This represents

the most ambitious target of all water companies in England

for the current regulatory period.

On 8 December 2022, Ofwat published its annual

assessment of operational performance and a summary

of the financial resilience of the sector

. Affinity Water’s

operational performance ranked in the top half of all

companies, with Ofwat highlighting a sector-leading

improvement in per-capita water consumption. This reflects

the management team’s focus on the sustainable use

of natural resources. Affinity Water’s financial structure

has benefited from steadily reduced levels of gearing

over the current regulatory period, which was reflected in

Ofwat’s report.

In January 2023, Keith Haslett joined Affinity Water as

CEO, having previously served as Group Water Director

at Northumbrian Water. InfraRed worked closely with the

Affinity Water board throughout the recruitment process and

will continue to support Keith as he leads the business into

the next regulatory period.

Sector: Electricity & Water

Location: UK

% of portfolio: 7% (March 2022: 9%)

HICL holding: 33.2%

Concession life remaining: Indefinite

Status: Operational

1 www.ofwat.gov.uk/publication/water-company-performance-report-2021-22/

Overview Strategic Report Governance Financials HICL Annual Report 2023 27

Investing in

infrastructure:

20%

leakage reduction

by 2025

Enriching lives:

950m

litres

clean water daily

providing on average 950 million litres

of clean water each day to a population

of more than 3.6 million people

Clean

water

28 HICL Annual Report 2023

2. A63 Motorway

HICL’s investment relates to a 105km

stretch of the A63 Autoroute in France,

which connects Bordeaux to the

Spanish border.

The road is an important trans-European

transport corridor for both freight and leisure

travel, enabling journeys from the Iberian

Peninsula and south-western France to the

whole of northern Europe.

In the year to 31 March 2023, light vehicle

traffic was 9.6% higher than in the previous

year, with heavy vehicle traffic broadly flat over

the same period. Overall, this resulted in total

traffic levels and distributions slightly ahead of

HICL’s valuation assumption. The management

team closely monitored the potential impact

of several external factors during the year

including industrial action, increased fuel

prices, and reduced economic activity.

Encouragingly, none of these had a material

impact on performance, reinforcing the road’s

strategic positioning. In February 2023, toll

rates were increased by an average of 6.2%,

reflecting the inflationary environment in France

and protecting revenues in real terms.

A major programme of carriageway

resurfacing was completed on schedule in

November 2022. The works were undertaken

in line with the long-term maintenance plan

for the asset, and the total cost was broadly in

line with HICL’s valuation assumption despite

supply chain pressures linked to inflation.

During the year, the portfolio company

installed a contactless payment system.

This has proved popular with road users, now

representing over 80% of all card transactions.

It has also resulted in increased operational

efficiency, fewer printed receipts, and

improved customer satisfaction from shorter

waiting times.

Sector: Transport

Location: France

% of portfolio: 6% (March 2022: 7%)

HICL holding: 21.0%

Concession life remaining: 28 years

Status: Operational

During the year, InfraRed’s Asset

Management team worked with the

A63 management team and HICL’s co-

shareholders to implement a short-term

deposit strategy to take advantage of

higher interest rates.

Top 10 assets –

operational highlights

Investing in

infrastructure:

105km

dual carriageway

Enriching lives:

20.8m

journeys

in FY23

Driving

ambition

connecting Bordeaux to the Spanish

border via the A63 Autoroute

29HICL Annual Report 2023FinancialsGovernanceStrategic ReportOverview

3. Northwest Parkway

The Northwest Parkway is a free-flow

toll road which provides access to key

residential and employment districts in

the Denver Metropolitan area as well as

Denver International Airport.

In the year to 31 March 2023, usage of the

road was 5.8% higher than in the previous

year, driven by the rapid return of passengers

to Denver International Airport, which became

the third busiest airport in the world during

the period

. On average, traffic volumes

were at 86% of pre-Covid levels over this

period, which is slightly behind HICL’s

valuation assumption.

During the year, InfraRed commissioned a

third-party traffic study from an independent

expert advisory firm, which confirmed the

existing long-term growth assumptions for

the asset. In the short term however, recovery

is likely to take slightly longer than previously

forecast as a result of changing commuter

travel patterns and the consequential level of

congestion on alternative routes. Overall, the

new traffic forecast had a modest negative

impact on the valuation as at 31 March 2023,

with a return to pre-Covid levels now expected

in June 2025. The project continued to make

regular shareholder distributions.

Toll rates were increased by 40 cents

(equivalent to 9%) in May 2022, in line with

inflation. The management team retains the

ability to approve further increases based on

both inflation and GDP growth, with a further

40 cent increase expected to be enacted by

July 2023.

Sector: Transport

Location: USA

% of portfolio: 6% (March 2022: 7%)

HICL holding: 33.3%

Concession life remaining

: 84 years

Status: Operational

During the year, InfraRed’s Asset

Management team worked with the

NWP management team and HICL’s co-

shareholders to implement a short-term

deposit strategy to take advantage of

higher interest rates.

Investing in

infrastructure:

75mph

free-flow toll road

toll road which provides access to

key residential and employment districts

Enriching lives:

6.9m

journeys

in FY23

Fast &

flowing

1 www.flydenver.com

30 HICL Annual Report 2023

Top 10 assets –

operational highlights

4. Fortysouth

Fortysouth is the largest independent

mobile tower operator in New Zealand.

With over 1,500 wholly owned towers

covering 98% of New Zealand’s

population, Fortysouth enables mobile

network operators, fixed wireless

providers, and critical communications

operators to deliver communications

services that connect New Zealanders

toeach other, and the world.

Following the completion of the transaction on

1 November 2023, InfraRed has been working

closely with One NZ to oversee the carve-out

process of the passive infrastructure, which

includes the physical towers, masts and

poles. One NZ and other telecommunications

providers will retain responsibility for the

‘active’ equipment.

Fortysouth has a fully formed executive

management team with a wealth of

operational, financial and commercial

experience. During the period, InfraRed

oversaw a process to appoint an independent

non-executive chair, who will sit on the board

of the company alongside senior asset

managers from InfraRed, Northleaf and

One NZ.

Operational and financial performance over

the period was in line with HICL’s acquisition

case. The company’s revenues are principally

derived from a long-term, availability-based

contract with One NZ, which has an initial

term of 20 years with the option of two ten-

year extensions. The agreement grants One

NZ access to the passive tower infrastructure

in exchange for contractual, inflation-linked

access charge payments that are unrelated

to usage and currently account for 96% of

revenues. Extreme weather in New Zealand

inearly 2023 did not materially impact day-to-

day operational performance, despite broader

transport and supply chain disruption.

Under the terms of the carve-out process,

responsibility for the deployment and

upgrade of towers currently sits with One NZ,

which has contractually committed to 390

additional sites over the next ten years and is

currently on schedule. This provides a high

degree of visibility over medium-term growth

in Fortysouth’s asset base and revenues.

The company is also expected to benefit from

the co-location of active equipment, which

is expected to drive further growth given the

reach of the network.

Sector: Communications

Location: New Zealand

% of portfolio: 6% (March 2022: N/A)

HICL holding: 40.0%

Concession life remaining: Indefinite

Status: Operational

Investing in

infrastructure:

1,500+

telecommunication

towers

Enriching lives:

98%

of New Zealand’s

population connected

Connecting

communities

enables mobile network operators,

fixed wireless providers, and critical

communications operators

Overview Strategic Report Governance Financials HICL Annual Report 2023 31

Texas Nevada Transmission (“TNT”) comprises two

distinct electricity transmission systems: Cross Texas

Transmission (“CTT”) and One Nevada Transmission

(“ONLine”). Together, the networks consist of over 800km

of high-voltage transmission lines, as well as a number of

switching stations and substations, which have been fully

operational since 2014.

In the period following HICL’s commitment to the asset in

September 2022, InfraRed has deepened its relationship with

co-owner and operator LS Power, a highly-reputable owner,

operator and developer of transmission and generation assets

in North America. HICL successfully completed the transaction

after the year end, having obtained relevant third-party approvals,

and senior members of InfraRed’s Asset Management team

have conducted a site visit and initial liaison meeting with key

LSPower staff.

Operational performance has been in line with HICL’s acquisition

assumptions to date. Both networks performed well over the

winter months, achieving full availability despite some winter

storm events in Texas. CTT benefits from a stable regulatory

regime, which operates under a cost-of-service recovery model.

This affords a high level of cash flow visibility, as well as inherent

protection against increases in discount rates or financing

costs through the regulatory return on capital. ON Line receives

long-term contracted cash flows under a Transmission Use

Agreement with NV Energy (A-rated), an indirect subsidiary of

Berkshire Hathaway Inc. which holds a c.25% economic interest

in the business.

TNT’s transmission infrastructure is expected to play a key role

in the energy transition as the US build-out of renewables is

accelerated. CTT procured under Texas’s Competitive Renewable

Energy Zone programme in 2009, a regional transmission

expansion plan designed to unlock grid capacity constraints and

facilitate the future build of renewable generation in the state.

Currently, CTT has over 900 MWs of wind generation connected

to its system, and the forecast roll-out of renewable generation

is expected to provide significant opportunity for growth of the

transmission infrastructure over the long term.

5. Texas Nevada Transmission

Sector: Electricity & Water

Location: USA

% of portfolio:

HICL holding: 45.8%

Concession life remaining: Indefinite

Status: Operational

Sector: Electricity & Water

Location: USA

% of portfolio: 6% (March 2022: N/A)

HICL holding: 45.8%

Concession life remaining: Indefinite

Status: Operational

6. High Speed 1

High Speed 1 (“HS1”) is the UK’s only

high-speed rail line, linking London St

Pancras with the Channel Tunnel. It is a

vital component of the UK’s rail link with

Continental Europe, and also enables

fast and frequent domestic rail services

between Kent and Greater London.

In the year to 31 March 2023, international

train path bookings were at 79% of pre-Covid

levels on average. This was slightly ahead of

HICL’s valuation assumption, buoyed by the

rapid return of leisure travellers, and resulted

in total revenue from international train paths

growing c.200% year-on-year. Eurostar also

resumed the practice of booking the vast

majority of its train paths in advance, which

provides enhanced cash flow visibility for HS1.

Although there was some disruption from

strikes during the year, the HS1 management

team worked closely with Network Rail High-

Speed to ensure that a reduced Eurostar

service was able to run on most strike

days, largely mitigating the financial impact.

On 20 March 2023, RMT members voted to

accept a pay offer from Network Rail, which

reduces the short-term risk of industrial action

for HS1.

The HS1 management team and Eurostar

are jointly committed to exploring solutions

to border congestion in London and

Paris, which is limiting the maximum daily

number of international services. The EU’s

ETIAS scheme, which is expected to be

implemented in 2024, may also result in

increased passenger processing times. In this

context, HICL’s forecast continues to assume

that international train path bookings will return

to pre-Covid levels by March 2025.

Domestic services are currently under UK

government control and HS1 continues to

benefit from the contractual underpin from the

Department for Transport, guaranteeing 96%

of pre-Covid domestic track access revenues.

Despite recent evidence that rail passenger

demand has returned to pre-Covid levels

in some market segments, DfT-controlled

train operating companies are likely to resist

increases in service levels in order to control

costs. HICL’s forecast therefore assumes

that domestic train path bookings will remain

at current levels (c.20% below pre-Covid)

until March 2028, three years later than

previously assumed.

As a result of the significant improvement in

international train path bookings during the

year, retail revenue outperformance, and the

contractual inflation linkage built into all track

access revenues, HS1 is expected to resume

shareholder distributions during the 2023

calendar year. The business is well positioned

to capture future growth as it leverages its role

as the green gateway to Europe.

Sector: Transport

Location: UK

% of portfolio: 4% (March 2022: 5%)

HICL holding: 21.8%

Concession life remaining: 18 years

Status: Operational

Investing in

infrastructure:

300kph

top speed of

trains on HS1

Enriching lives:

100%

renewable electricity

used to power trains

the UK’s rail link with

Continental Europe

Green

gateway

Overview Strategic Report Governance Financials HICL Annual Report 2023 33

HICL’s investment covers over 50 buildings and five

training facilities used by the Royal School of Military

Engineering Group (“RSME”), which provides a wide

rangeof training to the British army and defence forces.

Operationally, the project continued to perform well, with

availability during the entire year of over 99.8%. As a result, the

project continued to make regular distributions to HICL in line

with expectations. During the year, the IPA undertook a mid-life

contract review as part of its routine monitoring programme, with

no material issues raised.

In September 2022, the portfolio company was awarded a

contract variation to undertake grounds maintenance at RSME’s

Bicester site, which was outside of the scope of the PPP.

InfraRed worked closely with the client and the portfolio company

subcontractors to ensure that the works were completed on

schedule in January 2023. As a result of the variation, military

staff and students now benefit from a consistent and high-quality

external environment across the RSME estate.

During the year, the portfolio company worked closely with

the client to promote a number of sustainability initiatives

focused on improving biodiversity and community engagement.

Further details are provided in HICL’s 2023 Sustainability Report.

7. Royal School of

Military Engineering

Sector: Accommodation

Location: UK

% of portfolio: 4% (March 2022: 4%)

HICL holding: 100.0%

Concession life remaining: 15 years

Status: Operational

HICL Annual Report 202334

8. Southmead Hospital

Southmead Hospital is a major 800-bed acute

hospital, providing accident and emergency

and specialist medical services to a population

of almost one million people in Bristol, South

Gloucestershire, and North Somerset.

During the period, InfraRed collaborated with the

client and other project stakeholders to progress an

agreed programme of works relating to the contractual

obligations of Carillion Plc, the original construction

contractor for the hospital which was liquidated in 2018.

Because the works require access to critical areas such

as operating theatres, they are expected to be phased

over several years. The complexity and scope of the

works is reflected in the discount rate used to value the

asset as at 31 March 2023. Shareholder distributions

resumed in late 2021 and continued to be paid during

the year.

In order to relieve pressures on the demand for patient

beds, the NHS Trust presented a request to turn

administrative areas into clinical accommodation.

Employing the flexible approach developed during the

Covid-19 pandemic, InfraRed, the portfolio company

and its subcontractor expedited the request through a

bespoke variation process. As a result, the first phase

of the project was completed ahead of schedule in early

January 2023, providing additional beds at the height

of the winter peak. The second and third phases of the

project completed in April 2023, providing an additional

32 beds in total.

On behalf of the NHS Trust, Bouygues Energies &

Services (who provide the facilities management

services under the PPP) undertook a carbon reduction

survey which has been shared with the portfolio

company. InfraRed is working closely with the NHS Trust

to enact the recommendations and share the outcomes

with clients across the PPP portfolio to help progress its

wider net zero strategy.

Sector: Health

Location: UK

% of portfolio: 4% (March 2022: 5%)

HICL holding: 62.5%

Concession life remaining: 23 years

Status: Operational

9. Pinderfields and Pontefract Hospitals

Pinderfields and Pontefract Hospitals provide

acute hospital services to more than half a million

people living in the Wakefield and North Kirklees

districts of West Yorkshire. Pinderfields Hospital

is a designated major trauma centre and is home

to two specialist regional services in burns and

spinal injuries for the north of England.

During the year, InfraRed and other key stakeholders

agreed the terms for a major programme of works which

will take place over the next five years. These include

ventilation upgrades as well as improvements to intensive

care units and Haematology. The agreement of commercial

terms enabled the resumption of shareholder distributions

and de-risked the future cash flows from the project.

Operationally, the project performed in line with

expectations despite a period of heightened pressure

for the NHS over the winter months. Responsibility for

lifecycle rests with the portfolio company, and HICL’s

valuation as at 31 March 2023 acknowledges the

potential risk of short-term cost increases. The portfolio

company’s construction partner has made significant

progress on a large temporary ward which will

accommodate patients whilst components of the main

hospital are being upgraded. This is scheduled to be

completed in the summer of 2023.

During the year, the Investment Manager provided

financial support towards a bereavement suite for

families suffering from stillbirths and miscarriages. HICL’s

portfolio company is also working closely with the NHS

Trust to support its sustainability plan and has agreed

to adapt its grounds maintenance obligations under the

PPP contract to improve biodiversity across the site.

Sector: Health

Location: UK

% of portfolio: 3% (March 2022: 4%)

HICL holding: 100.0%

Concession life remaining: 19 years

Status: Operational

The conversion of gate 10a from

offices to a ward has been a great

success and is testament to what

can be achieved with collaborative

working between project

stakeholders. The project has played

a significant part in increased

patient flow rates across the hospital

and has had a positive impact on

patient experience and waiting

times in the emergency department

and ambulance offloads.

Tony Hudgell

Director of Estates,

NHS North Bristol Trust

Overview Governance Financials HICL Annual Report 2023 35Strategic Report

10. Home Office

Sector: Accommodation

Location: UK

% of portfolio: 3% (March 2022: 3%)

HICL holding: 100.0%

Concession life remaining: 8 years

Status: Operational

HICL’s investment relates to the state-of-the-art

headquarters of the Home Office and the Department for

Environment, Food and Rural Affairs in central London.

The award-winning building has a number of energy-

saving features and has been designed to enhance the

experience of its 3,450 users.

Operationally, the project continued to perform well, despite day-

to-day occupancy of the building remaining well below maximum

levels as a result of changes in working patterns. The portfolio

company has worked closely with its facilities management

partner to ensure that the building has been made available

throughout and that the internal environment is adapted to the

number of users. During the year, the portfolio company also

liaised with the Government Property Agency on their plan to

continually improve working environments and support new ways

of working across government departments.

HICL Annual Report 202336

Sustainability

As a prominent long-term investor

in core infrastructure, HICL has a

role in society that extends beyond

its shareholders.

The Company is a trusted steward of essential assets

and has a responsibility towards the communities that

the assets serve and, in many cases, to which the assets

will be returned at the end of the defined contractual

term. The Board and Investment Manager recognise that

operating in a sustainable manner lies at the very heart of

the Company’s business model and is fundamental for

the successful delivery of its investment proposition.

Our infrastructure supports the lives and livelihoods of the

communities in which we operate. Around the world over

20 million people have access to HICL’s infrastructure; in

the UK alone, HICL’s assets touch the lives of one in four

citizens. As a result, the Company has an exceptional

opportunity to make a positive social contribution by

enhancing the experience of its clients, end users and

wider stakeholders.

HICL actively contributes to the United Nations (“UN”)

Sustainable Development Goals (“SDGs”) through

the delivery of reliable and resilient infrastructure that

supports economic development and human wellbeing.

The nature of HICL’s investment proposition means the

Company inherently contributes to developing industry,

innovation and infrastructure (SDG 9); and building

sustainable cities and communities (SDG 11).

The stewardship of

essential infrastructure

assets confers an

important responsibility,

and significant

opportunity, to improve

community outcomes.

Mike Bane

Chair of the Board

of Directors

Our sustainability strategy

We have evolved our sustainability strategy to focus on four key priorities:

Environment

Preserve the natural environment and

mitigate the impacts of climate change

by investing in the energy transition,

delivering climate resilient infrastructure

and working to reduce carbon emissions

from HICL’s portfolio

People

Promote fair and safe conditions as

well as diverse and inclusive workplaces

within HICL’s portfolio companies and

across the supply chain

Communities

Positively impact the communities in

which HICL’s assets are located by

actively addressing the needs of clients,

end-users and other key stakeholders

Governance

Ensure that HICL maintains high

standards of ethics and integrity

through the rigorous implementation

of policies and the provision of

balanced disclosure

Community

Governance

People

Environment

Download the HICL

Sustainability Report

online www.HICL.com

InfraRed achieves

five-star PRI rating

– Score of over 90% in both relevant modules

of the PRI framework

– 7th consecutive year that InfraRed’s Infrastructure

business has achieved the highest possible rating

– InfraRed has been a Principles of Responsible

Investment signatory since 2011

InfraRed launches Portfolio

Impact strategy

– Client Insights survey conducted across 61 of HICL’s

healthcare and education assets

– 100 targeted initiatives rolled out to support local

communities

– ESG excellence at HICL’s portfolio companies

recognised through Creating Better Futures awards

Prior year objective

InfraRed to broaden stakeholder

engagement through client surveys

and follow-up initiatives

Overview Governance Financials HICL Annual Report 2023 37Strategic Report

HICL sets interim

net zero targets

– 50% of HICL’s portfolio to be net zero, aligned

to net zero, or aligning to net zero by 2030

– 90% of all portfolio company emissions to be

subjectto direct or collective engagement and

stewardship actions by 2030

– Commitment to review each target every

five years at a minimum

Prior year objective

InfraRed to set interim greenhouse

gas reduction targets for HICL

HICL categorised as an

Article 8 Financial Product

under the EU SFDR

– Full compliance with Level 2 disclosure

requirements from 1 January 2023

– Enhanced InfraRed ESG survey enables

HICL to report against all 14 mandatory

PrincipalAdverse Impact (PAI) indicators

– Updated periodic disclosure included

in this report

Prior year objective

Align reporting to the final Regulatory

Technical Standards (RTS) of SFDR (Level 2)

InfraRed strives for best-

in-class governance

– Enhanced application of InfraRed Exclusion Policy

forHICL investments using quantitative thresholds

– Monitoring of supply chains aligned with United

NationsGlobal Compact (UNGC) framework

– Refreshed Sustainability Policy published alongside

thisreport

Prior year objective

InfraRed to undertake a review

of existing policies against external

sustainability frameworks

HICL discloses Scope 1, 2 and 3

greenhouse gas emissions for its

entire portfolio

– Total attributable emissions of 146,181 tCO

incalendar year 2022

– Enhanced data collection exercise supported

byexpert third-party consultant

– Comparison with 2019 baseline

This page demonstrates the reach of

HICL’s portfolio. By facilitating access to

essential services in a socially responsible

manner, our projects contribute to many

of the UN SDGs and deliver an inherent

social good. However, both the Board and

the Investment Manager acknowledge

that making a genuine social contribution

involves going above and beyond the

reliable provision of infrastructure.

Some examples of specific initiatives

undertaken by InfraRed or HICL’s portfolio

companies are highlighted in HICL’s 2023

Sustainability Report and expanding the

Company’s social impact will be a key

priority going forward.

HICL Annual Report 202338

Our impact

11.9m

2.3m

140k

3.6

People served with clean

water by Affinity Water

People served by InfraRed’s courts,

fire stations and police stations

People with access

to HICL’s healthcare

student places across school,

college and university facilities

Overview Governance Financials HICL Annual Report 2023 39Strategic Report

4.5m

1.7

40,000

>5m

Homes connected to renewable

electricity by HICL’s OFTOs

Homes connected to high-speed

internet by Altitude Infra

Accommodation places

Unique users of HICL’s

roads and railways

HICL Annual Report 202340

Financial Review

HICL prepares its financial information in accordance with UK-

adopted International Financial Reporting Standards (“IFRS”). In the

Company’s Strategic Report, the Directors report the financial

performance using the non-GAAP Investment Basis, which

consolidates the results of the Company, HICL Infrastructure 2

S.a.r.l. and Infrastructure Investments LP, referred to as the “Group”

throughout the Financial Review. The reconciliation of the Investment

Basis to the IFRS financial statements is shown on pages 44-45.

The Investment Basis provides additional information on the

underlying performance of the Group to that required by IFRS 10

and the Directors believe this provides additional transparency and

improves understanding for readers of HICL’s Annual Report. It allows

readers to assess the underlying operating performance and gearing,

including its capacity for investment. Total return, which is defined as

total comprehensive income for the year, NAV, and EPS are the same

under IFRS and the Investment Basis.

The Board and the Investment Manager manage HICL on an

Investment Basis, which is an APM and is reconciled on page 43.

Accordingly, the following limited financial information is prepared

under the Investment Basis.

Summary income statement

Investment Basis

£m

For the

year ended

31 March 2023

For the

year ended

31 March 2022

Dividend income 191.1 75.8

Interest income 122.1 117.2

Fair value movement (94.2) 192.0

Realised gain on the sale

ofinvestments – 4.8

Foreign exchange movement

oninvestments 39.4 7.4

Loss on foreign exchange derivatives (13.1) (1.9)

Other income 8.9 10.5

Total income 254.2 405.8

Expenses and finance costs (55.7) (37.4)

Profit before tax 198.5 368.4

Tax (0.1) 0.3

Total return 198.4 368.7

Earnings per share 9.9 19.0

Total income decreased by 37% to £254.2m (2022: £405.8m).

The decrease is principally due to a reduction in the fair value

movement recognised from £192.0m to £(94.2)m which was driven

by the 0.6% increase (2022: 0.2% decline) in the discount rate to 7.2%

(2022: 6.6%). This was partially offset by the positive impact of actual

and forecast inflation on the investment valuations. Dividend income

increased to £191.1m (2022: £75.8m) primarily due to the receipt of an

£85.0m dividend from the sale of Queen Alexandra Hospital (“QAH”).

Further detail on the valuation movements is given in the Valuation of

the Portfolio section starting on page 46.

The hedging policy targets NAV per share volatility of no more than

2% for a 10% movement in foreign exchange rates. During the

year, the net impact of foreign exchange movements was a £26.3m

gain (2022: £5.5m gain), which represents 0.8% of the closing NAV

(2022: 0.2%). This follows a 7.9% movement in weighted average FX

rates in the year.

The hedging compared to non-sterling portfolio values was:

Foreign exchange

hedging

£m Rate

Non-UK

assets FX hedge

FX hedge

as % of

non-UK

assets %

sensitivity to

movement

in FX rates

Euro 1.14 549 382 70% 1.6

USA 1.23 228 71 31% 1.6

Canada 1.67 60 17 29% 0.4

New Zealand 1.97 220 109 50% 1.1

Total 1,057 579 56% 4.7

1 Sensitivity impact is net of derivatives

Expenses and finance costs

Investment Basis

£m

For the

year ended

31 March 2023

For the

year ended

31 March 2022

Finance costs 16.1 4.1

Investment Manager fees 32.7 29.3

Directors’ fees and expenses 0.5 0.6

Acquisition bid costs 1.9 0.4

Professional fees 4.5 3.0

Expenses and finance costs 55.7 37.4

Total fees accruing to the Investment Manager were £32.7m

(2022: £29.3m). The increase related to the uplift in the portfolio

valuation since March 2022, calculated in line with the Investment

Manager agreement as set out on page 78.

Finance costs increased to £16.1m (2022: £4.1m) principally due to

higher absolute borrowing levels and all-in interest costs as well as

the expensing of all unamortised arrangement fees of the previous

£400m RCF and £330m accordion facility.

During the year £1.9m of acquisition bid costs were incurred

(2022: £0.4m), comprising legal, technical and tax due diligence,

onunsuccessful bids.

Overview Strategic Report Governance Financials HICL Annual Report 2023 41

Tax

Tax charged to the Income Statement under the Investment Basis

relates to HICL’s immediate subsidiary, HICL Infrastructure 2 S.a.r.l.

As HICL Infrastructure plc has Investment Trust Company (“ITC”)

status, it is exempt from tax on certain items on the basis that tax

is already paid at the operating company level, thus protecting

shareholders from suffering double taxation. The Directors monitor

compliance with the ITC rules through reporting prepared by the

Investment Manager and are of the opinion that HICL has complied

with its obligations as an ITC for the year.

Ongoing charges

Investment Basis

£m

For the

year ended

31 March 2023

For the

year ended

31 March 2022

Investment Manager 32.7 29.3

Auditor fee for the Corporate Group 0.4 0.4

Non-audit fee paid to the Auditor:

Interim review 0.1 0.1

Directors’ fees and expenses 0.5 0.6

Other ongoing expenses 2.0 2.0

Total expenses 35.7 32.4

Average NAV 3,282.3 3,039.7

Ongoing charges 1.09% 1.06%

Ongoing charges, calculated in line with the Association of Investment

Companies’ (“AIC”) guidance, are defined as annualised ongoing

charges (which excludes acquisition costs and other non-recurring

items) divided by the average published undiluted net asset value of

£3,282.3m for the year (2022: £3,039.7m).

The ongoing charges percentage is 1.09% (2022: 1.06%).

The increase in the OCR principally arises from using the RCF to

fundpurchases of investments (particularly Fortysouth) giving rise

to a higher management fee but the same issued share capital.

Overall, earnings per share decreased to 9.9p (2022: 19.0p).

Summary balance sheet and NAV

Investment Basis

£m 31 March 2023 31 March 2022

Investments at fair value

(net of commitments) 3,498.6 3,216.6

Net other liabilities (1.0) (11.3)

Net debt (147.6) (46.2)

Net assets 3,350.0 3,159.1

NAV per share (before dividend) 164.9p 163.1p

NAV per share (post dividend) 162.8p 161.1p

Investments at fair value increased by 9% to £3,498.6m

(2022: £3,216.6m), principally due to the impact of higher than

forecast inflation, partially offset by a 0.6% increase in the weighted

average discount rate from 6.6% to 7.2%. In addition, the Company

completed net acquisitions of £245.0m, being the investments in

Paris-Saclay University (previously held in commitments), XLT, RMG

Roads and Fortysouth, less the sale of QAH. Further detail on the

movement in Investments at fair value, which are net of commitments

and therefore not in the Directors’ Valuation, is given in the Valuation

of the Portfolio section starting on page 46.

An analysis of the movements in net debt is shown in the Summary

cash flow on the following page. The increase relative to 31 March

2022 is principally driven by the borrowings on the Revolving Credit

Facility (“RCF”) in relation to the Fortysouth acquisition, offset by the

proceeds from the equity tap issuance in July 2022. The tap issuance

resulted in proceeds of £158.0m, net of costs.

NAV per share was 164.9p (2022: 163.1p) before the 2.07p fourth

quarterly distribution. The 1.8p increase in NAV per share was

primarily due to earnings per share of 9.9p, net of 8.2p distributions,

forthe year ending 31 March 2023. NAV per share and earnings per

share are the same under the Investment Basis and the IFRS Basis.

Key accounting estimates and judgments

In preparing these accounts, the key accounting estimate is the

carrying value of the Group’s investments, which are stated at fair

value. Given the importance of the valuation of investments, the

Board’s Audit Committee has oversight of the Investment Manager’s

valuation process and challenges the Valuation Policy, process and

application to individual investments on a bi-annual basis. A third

party is also appointed to carry out an independent review of the

Investment Manager’s valuation. Despite the above, asset valuations

for unquoted investments are inherently subjective, as they are based

on assumptions which may not prove to be accurate.

The Group’s investments are predominantly unquoted and are

therefore valued using a discounted cash flow analysis of the forecast

investment cash flows from each project. The exception to this is the

listed senior debt in the A13 Road project.

A key judgement is the assessment of whether the Company meets

the definition of an investment entity. IFRS 10 requires the Group’s

intermediate holding companies to be presented at fair value, which

reduces the transparency of the underlying investment performance.

As a result, the Group presents limited financial information on a

non-GAAP Investment Basis to ensure that the commentary in

the Strategic Report remains fair, balanced and understandable.

The reconciliation of the Investment Basis to IFRS is shown on

pages44-45.

HICL Annual Report 202342

Financial Review continued

Summary cash flow

Investment Basis

£m 31 March 2023 31 March 2022

Cash from investments 222.7 200.5

Operating costs (43.8) (34.3)

Finance costs (7.9) (3.2)

Net cash inflow before capital

movements 171.0 163.0

Cost of new investments (339.1) (87.5)

Investment disposal proceeds 96.8 18.5

Share capital raised, net of costs 158.0 –

Net cash flow from derivatives (15.9) 15.1

Debt arrangement fees paid (6.7) (0.2)

Dividends paid (165.5) (159.8)

Movement in the year (101.4) (50.9)

Net (debt) / cash at start of year (46.2) 4.7

Net debt at end of year (147.6) (46.2)

The Group ended the year with net debt of £147.6m (31 March

2022: £46.2m net debt). This is a result of drawings on the RCF of

£219.4m (31 March 2022: £75.6m) to support the £339.1m of new

investments in the year. This was offset by the cash proceeds from

the disposal of QAH of £96.8m and the equity tap issuance in July

2022, which resulted in proceeds of £158.0m net of costs.

The debt arrangement fees increased to £6.7m (2022: £0.2m)

reflecting the costs of renegotiating the RCF and the write off of

unamortised costs on the previous RCF.

Dividends paid in the year were £165.5m (2022: £159.8m) and

dividend cash cover increased to 1.31

x (2022: 1.05

x) due to the

above noted improved cash receipts.

Group drawings and gearing levels

As at 31 March 2023, the Group had cash drawings on its RCF

of £219.4m (31 March 2022: £75.6m) and drawings of £15.7m by

way of letters of credit (31 March 2022: £30.0m). The Group also

had drawings by way of letter of credit on its LCF facility of €67.3m

(31 March 2022: €67.3m). Consequently, the Group has the capacity

to fund additional investments as and when further attractive

opportunities arise as well as maintain sufficient working capital.

On 20 March 2023, the Group announced that it had renegotiated

its RCF with Barclays, CIBC, ING, Lloyds, NAB, RBC, Royal Bank of

Scotland International and SMBC, increasing it to £650m, with an expiry

date of 30 June 2026 with an option to extend for two one-year periods

to 30 June 2028. This replaced the Company’s £400m multi-currency

RCF, which was due to expire on 30 June 2024. A €67.5m Letter of

Credit Facility (“LCF”) provided by ING and SMBC with an expiry date of

31 December 2026 is also held to fund existing and future longer-term

funding obligations.

HICL makes prudent use of its available leverage. Under the Articles,

the Corporate Group’s outstanding borrowings, including any financial

guarantees to support outstanding subscription obligations but excluding

internal company borrowings of the Corporate Group’s underlying

investments, are limited to 50% of the Adjusted Gross Asset Value, being

the Directors’ Valuation plus cash balances of the Company and HICL

Infrastructure S.a.r.l 2 and Infrastructure Investments Limited Partnership

(together the “Corporate Subsidiaries”) at any time.

The ratio of debt to Adjusted Gross Asset Value at the end of the year

was as follows:

31 March 2023

£m

31 March 2022

£m

Outstanding drawings

Bank borrowings 219.4 75.6

Letter of credit facility 74.8 86.7

294.2 162.3

Adjusted Gross Asset Value

Directors’ Valuation 3,772.8 3,311.0

Cash and cash equivalents 71.8 29.4

3,844.6 3,340.4

Borrowing ratio 7.7% 4.9%

From time to time the Company issues its own shares to the market;

the timing of these issuances depends on market prices.

Should a discount arise 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 HICL’s approach to capital management

during the year.

Post year end, IILP issued £150m of Private Placement loan notes,

diversify in the Company’s capital strategy.

1 Including profits on disposals versus original acquisition cost of £45.5m. Excluding this, dividend cash cover would have been 1.03x

2 Including profits on disposals versus original acquisition cost of £4.8m. Excluding this, dividend cash cover would have been 1.02x

Overview Strategic Report Governance Financials HICL Annual Report 2023 43

Alternative Performance Measures (“APMs”)

The Directors assess the Company’s performance using a variety of APMs that are not specifically defined under IFRS, which provide additional

information to investors as to how the Company is managed and assessed. The APMs may not be directly comparable with those used by

other companies and therefore the Directors wish to draw users’ attention to GAAP measures in the financial statements from page 110

onwards. The Directors’ Investment Basis is itself an APM.

The explanation and rationale for the Investment Basis is shown on page 40 and its reconciliation to IFRS is shown from page 44. The table

below defines the Company’s APMs.

APM Purpose

2023 Investment

Basis Calculation Reconciliation to IFRS

Annualised return

from the portfolio

A measure of underlying

portfolio performance within

a given year

10.2% £331.2m rebased return

divided by £3,236.5m rebased

valuation as shown on the

Valuation Report on page 46

compounded for a year

The calculation uses figures which are

reconciled to the Investment Basis on

page 44 which, in turn, is reconciled to

IFRS in the Reconciliation of Investment

Basis to IFRS section overleaf

Directors’

Valuation

A measure of the size of

the investment portfolio

including the value of future

contracted investments

committed by the Company

£3,772.8m £3,498.6m investments

at fairvalue plus £274.2m

contracted commitments

The calculation uses portfolio assets

shown in the reconciliation in the

‘Reconciliation of Investment Basis

toIFRS’ section overleaf

Distributable

cash

A measure of cash received

from underlying projects in

the year

£216.5m Calculated as net cash inflow

before capital movements

shown in the ‘Investment Basis

Summary Cash Flow’ plus

£45.5m profit on disposal ofQAH

The calculation uses distributions

received from investments plus profit

ondisposal

Dividend

cash cover

A measure of cash received

from underlying projects

in the period enabling

distributions to shareholders

1.31x

£216.5m distributable cash

received including £45.5m profit

on disposal of QAH divided by

£165.5m dividend for the period

The calculation uses the dividend paid

in the Statement of Changes in Equity

divided by distributable cash

Cash

investments

Identifying new

opportunities in which to

invest capital is a driver of

the Company’s ability to

deliver attractive returns

£339.1m £339.1m Investment Basis cash

paid to acquire investments in

the year

The equivalent balance under IFRS

is shown in the ‘Reconciliation of

Statement of Cash Flows’

Cash proceeds Cash proceeds from our

investments support our

returns to shareholders, as

well as our ability to invest in

new opportunities

£96.8m £96.8m cash received into

IILP,directly or indirectly, from

the disposal of investments in

the year

The equivalent balance under IFRS

is shown in the ‘Reconciliation of

Statement of Cash Flows’

Net cash/(debt) A measure of the available

liquid cash to invest in the

business offset by the

Group’s borrowings. This is

an indicator of the financial

risk in the Group’sStatement

of Financial Position

£(147.6)m £71.8m cash and cash

equivalents, plus £nil

deposits,less £219.4m

loansand borrowings

The equivalent balance under IFRS

and the reconciliation to the Investment

Basis is shown in the Reconciliation

ofStatement of Financial Position

1 The calculation includes total profit on disposal of £45.5m versus the original acquisition cost. Excluding this, dividend cash cover is 1.03x

HICL Annual Report 202344

Financial Review continued

Reconciliation of Investment Basis to IFRS

Reconciliation of Statement of Comprehensive Income

£m

For the year ended 31 March 2023 For the year ended 31 March 2022

Investment

Basis

Consolidation

adjustments

IFRS

Basis

Investment

Basis

Consolidation

adjustments

IFRS

Basis

Dividends received 191.1 (39.6) 151.5 75.8 3.5 79.3

Interest received 122.1 (104.6) 17.5 117.2 (36.7) 80.5

Net gain/(loss) on revaluation of investments (94.2) 127.5 33.3 196.8 15.2 212.0

Foreign exchange movement on investments 39.4 (39.4) – 7.4 (7.4) –

Loss on foreign exchange derivatives (13.1) 13.1 – (1.9) 1.9 –

Other income 8.9 (8.9) – 10.5 (10.5) –

Total investment income 254.2 (51.9) 202.3 405.8 (34.0) 371.8

Management fee (32.7) 32.7 – (29.3) 29.3 –

Finance costs (16.1) 16.1 – (4.1) 4.1 –

Other expenses

(6.9) 3.0 (3.9) (4.0) 0.9 (3.1)

Total expenses (55.7) 51.8 (3.9) (37.4) 34.3 (3.1)

Profit/(loss) before tax 198.5 (0.1) 198.4 368.4 0.3 368.7

Tax (0.1) 0.1 – 0.3 (0.3) –

Earnings 198.4 – 198.4 368.7 – 368.7

Earnings per share 9.9p – 9.9p 19.0p – 19.0p

Notes:

1 Total investment income shown in the IFRS accounts relates only to HICL and not portfolio companies held through investment entity subsidiaries. The consolidation adjustments represent the

results recorded in the Corporate Subsidiaries

2 Other fund expenses comprise audit, valuation and other professional fees

Overview Strategic Report Governance Financials HICL Annual Report 2023 45

Reconciliation of Statement of Financial Position

£m

For the year ended 31 March 2023 For the year ended 31 March 2022

Investment

Basis

Consolidation

adjustments

IFRS

Basis

Investment

Basis

Consolidation

adjustments

IFRS

Basis

Investments at fair value 3,498.6 (148.9) 3,349.7 3,216.6 (58.1) 3,158.5

Trade and other receivables 18.7 (18.3) 0.4 1.2 (1.0) 0.2

Other financial assets 8.5 (8.5) – 5.4 (5.4) –

Trade and other payables (22.3) 21.2 (1.1) (12.6) 11.8 (0.8)

Other current financial liabilities (5.9) 5.9 – (5.3) 5.3 –

Cash and cash equivalents 71.8 (70.8) 1.0 29.4 (28.2) 1.2

Loans and borrowings (219.4) 219.4 – (75.6) 75.6 –

Net assets attributable to Ordinary Shares 3,350.0 – 3.350.0 3,159.1 – 3,159.1

NAV per share (before dividend) 164.9p – 164.9p 163.1p – 163.1p

NAV per share (post dividend) 162.8p – 162.8p 161.1p – 161.1p

Note:

The Investment Basis financial statements are prepared for performance measurement and therefore reserves are not analysed separately under this basis

Reconciliation of Statement of Cash Flows

£m

For the year ended 31 March 2023 For the year ended 31 March 2022

Investment

Basis

Consolidation

adjustments

IFRS

Basis

Investment

Basis

Consolidation

adjustments

IFRS

Basis

Portfolio income from investments 222.7 (53.7) 169.0 200.5 (36.9) 163.6

Operating expenses paid (43.8) 40.0 (3.8) (34.3) 31.3 (3.0)

Finance (costs)/income (7.9) 7.9 – (3.2) 3.2 –

Net cash inflow before capital movements 171.0 (5.8) 165.2 163.0 (2.4) 160.6

Purchase of investments (339.1) 181.2 (157.9) (87.5) 87.5 –

Proceeds from investments 96.8 (96.8) – 18.5 (18.5) –

Share capital raised net of costs 158.0 – 158.0 – – –

Net cash flow from derivatives (15.9) 15.9 – 15.1 (15.1) –

Debt arrangement fees paid (6.7) 6.7 – (0.2) 0.2 –

Dividends paid (165.5) – (165.5) (159.8) - (159.8)

Movement in the year (101.4) 101.2 (0.2) (50.9) 51.7 0.8

Net cash/(debt) at start of year (46.2) 47.4 1.2 4.7 (4.3) 0.4

Net cash/(debt) at end of year (147.6) 148.6 1.0 (46.2) 47.4 1.2

Note:

There is a difference between the change in cash and cash equivalents of the Investment Basis and the IFRS financial statements due to the cash balances held in the Corporate Subsidiaries.

Cash held within the Corporate Subsidiaries is not shown in the IFRS statements but is shown in the Investment Basis statements

Movement in the Directors’ Valuation in the year ended 31 March 2023:

Future commitments

10.2%

(5.6)%

2.2%

1.2%

Income Statement Revenue

31 March

2022

Valuation

(113.1)

(222.7)

331.2

(180.6)

72.0

39.5

(12.1)

3,522.8

547.6

3,772.8

3,498.6

3,216.6

3,236.5

31 March

2023

Valuation

Acquisitions Divestments Cash

distributions

Return

Change in

discount rate

Change in

economic

assumptions

Change in

FX on net

valuation

Change in

FX on equity

commitments

Rebased

Valuation

3,311.0

HICL Annual Report 202346

Valuation methodology and approach overview

InfraRed, in its capacity as Investment Manager, is responsible for

preparing the fair market valuation of HICL’s investment portfolio

for the Directors’ approval each reporting period. This investment

valuation is called the Directors’ Valuation. The Directors’ Valuation,

which is an Alternative Performance Measure (“APM”), comprises the

valuation of the investment portfolio as well as the future investments

committed to by the Group at the reporting period end.

The Directors’ Valuation is the preferred valuation measure

of the portfolio because it includes future commitments and,

therefore, represents the Group’s total value at risk at the balance

sheet date. Further detail on the Group’s APMs, including a

reconciliation to the IFRS financial statements, is shown on page 44.

The valuation methodology and policy are unchanged from previous

reporting periods.

The valuation is carried out on a six-monthly basis as at 31 March and

30 September each year. The Group’s investments are predominantly

unquoted and are therefore valued using a discounted cash flow

analysis of the forecast investment cash flows from each project.

The exception to this is the listed senior debt in the A13 Road project

which is valued using the quoted market price of the bonds.

There is a secondary market for infrastructure investments and,

where appropriate and publicly available, data points are considered.

The Directors’ Valuation is a sum-of-the-parts valuation, and

no further adjustment is made to reflect the size, scarcity, and

diversification of the overall portfolio.

The key external (macroeconomic and fiscal) factors affecting the

forecast of each portfolio company’s cash flows in local currency

are inflation rates, interest rates, rates of GDP and applicable tax

rates. The Investment Manager makes forecast assumptions

for each of these external metrics, based on market data and

economic forecasts. The Investment Manager exercises its

judgement in assessing the expected future cash flows from each

investment based on the detailed financial models produced

by each portfolio company and adjusting where necessary to

reflect the Group’s economic assumptions as well as any specific

operating assumptions.

The fair value for each investment is then derived from the

application of an appropriate market discount rate and year-end

currency exchange rate. The discount rate takes into account risks

associated with the financing of an investment such as investment

risks (e.g. liquidity, currency risks, market appetite) and any risks

to the investment’s earnings (e.g. predictability and covenant of

the revenues and service delivery challenges), all of which may be

differentiated by the phase of the investment’s life (e.g. in construction

or in operation).

More information on the Valuation Policy can be found on page 158.

The Directors’ Valuation is the key component in determining HICL’s

Net Asset Value (“NAV”) and so the Directors receive and challenge

an independent report and opinion on the Investment Manager’s

valuation from a third-party valuation expert.

Directors’ Valuation at 31 March 2023

The Directors’ Valuation of the portfolio at 31 March 2023 was

£3,772.8m, an increase of 13.9% (31 March 2022: £3,311.0m).

The Directors’ Valuation includes £274.2m of outstanding equity

commitments (31 March 2022: £94.4m) in respect of three projects:

the Blankenburg Connection (Netherlands), TNT (USA) and the B247

Road (Germany).

A breakdown of the movement in the Directors’ Valuation is shown in

the chart below.

Valuation of the Portfolio

1 ‘Return’ comprises the unwinding of the discount rate and project outperformance including actual inflation

2 FX movement net of hedging is a gain of £26.4m

3 £3,772.8m reconciles, on an Investment Basis, to £3,498.6m investments at fair value through £274.2m of future commitments

Overview Strategic Report Governance Financials HICL Annual Report 2023 47

Acquisitions

The acquisitions in the year include XLT, Fortysouth and a final

payment for RMG Roads. Also included within the £547.6m is a

commitment to invest in TNT.

Divestments

The divestments include the disposal of QAH (£107.5m)

and

reduction in commitment for Paris-Sud University (£5.6m).

Rebased net valuation

The three valuations shown in the chart have been split between

investments at fair value

and future commitments. The percentage

movements have been calculated on the rebased valuation of

£3,236.5m to reflect the returns generated on the capital employed in

the year.

The rebased portfolio delivered Income Statement revenue of 8.0%

in the year (2022: 14.6%). The reduced 2023 income return when

compared to 2022 was principally due to the increase in discount

rates in 2023 for all jurisdictions.

Return from the portfolio

The return from the underlying portfolio of £331.2m (2022: £269.8m)

represents a 10.2% (2022: 9.6%) increase in the rebased valuation,

versus the discount rate, or expected annualised return, of 6.6%

at the start of the year. The £125.8m / 3.9% of outperformance

was principally generated from actual inflation (£136.4m), over

and above the base case assumption. This was partially offset by

defect remediation costs that were incurred on healthcare projects,

commodity price and supply chain pressures affecting the lifecycle

costs in the UK PPP sector and a slightly slower recovery in expected

traffic volumes in some of the Company’s demand assets.

Inflation

The HICL portfolio is highly correlated to inflation and, in isolation, is

well placed to benefit in a higher inflationary environment, especially

in the UK and Eurozone. In the UK, RPI in the year ended 31 March

2023 was 13.5% (2022: 9.0%). Similar slightly milder conditions were

experienced in France, where CPI was 5.7% (2022: 4.5%), USA,

where CPI was 5.0% (2022: 8.5%). This higher inflation had a net

positive impact on the portfolio, in particular the Company’s regulated

and demand assets such as Affinity Water, Northwest Parkway

and HS1, whose revenues are more correlated to inflation than the

Company’s PPP portfolio.

Over the year, the actual inflation rates were higher than the

Company’s forecast assumptions for the year. HICL’s portfolio

is deliberately constructed to provide high inflation correlation.

Inflation remained elevated throughout the year and is forecast to

remain high throughout 2023. Therefore, the Company updated

its forecast short-term inflation assumptions in all jurisdictions.

The impact of the change in forecast short-term assumptions is

included within the £72.0m (2022: £72.3m) recognised in the change

in economic assumptions.

Demand assets

HICL has seven demand-based assets in the portfolio, representing

19% of the portfolio value at 31 March 2023 (31 March 2022: 22%).

Five of these demand-based assets, namely HS1, the A63 Motorway

(France), NWP (USA), RMG Roads and M1-A1, are sensitive to GDP

and, as a result, their valuations were more significantly affected by

the Covid-19 pandemic. Demand on the A63 and HS1 was slightly

above the forecast set out at the start of 2022 with traffic on NWP

slightly below the forecast expectation at March 2022. The forecast

demand for HS1 is impacted by lower domestic growth in traffic,

primarily because of the lower post-pandemic domestic commuting

environment, however, this is largely offset by the likelihood of more

international paths over the longer term.

For further information on these assets, refer to the Top 10 assets –

operational highlights.

1 Reconciles to £108.1m of cash received on page 121 of the financial statements through additional sub-debt interest accrued of £0.6m which is included in the £331.2m of Return on the

Rebased Valuation

2 On an IFRS Basis

HICL Annual Report 202348

Discount rates

The discount rate is determined based on the Investment Manager’s

knowledge of the market, which includes intelligence gained

from bidding and disposal activities across the InfraRed platform,

discussions with financial advisers knowledgeable of these markets

and publicly available information on relevant transactions.

As highlighted in the Company’s 2022 Interim Results, the volume of

infrastructure transactions moderated over the Northern Hemisphere

summer period. It has remained at a reduced level for the remainder

of the Company’s financial year. As market participants continue to

assess the impact of rising long-term government bond yields on

asset prices, the Investment Manager has observed greater investor

focus on asset quality, a wider range of bid pricing for assets, and

evidence of differing views between buyers and sellers over asset

pricing, which is contributing to the reduced level of transaction

activity. The Investment Manager expects transaction activity to

increase during 2023 as the pricing of long-term government bond

yields continues to settle.

The limited availability of transaction data points places greater

emphasis on a ‘bottom-up’ approach, based on long-term

government bond yields 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 and service delivery challenges), all of which

may be differentiated by project phase, jurisdiction and market

participants’ appetite for these risks.

As a result, and consistent with the approach taken for the

September 2022 valuation, the Investment Manager has considered

the level of equity risk premium implied by current yields when

setting the discount rate. In the first half of the financial year, the

average 20–30 year government bond yields in the UK increased

from 1.8% at 31 March 2022 to 4.0% at September 2022 before a

slight reduction in the second half of the year to 3.8% at 31 March

2023. Whilst the Investment Manager’s view is that discount rates

used to value investments do not rigidly follow bond yields, there is

some correlation, particularly over the longer term and this has been

reflected in the discount rates applied to UK assets. The UK weighted

average discount rate has increased by 80 basis points to 7.3%

(31 March 2022: 6.5%) and the risk premium is now 3.4% (31 March

2022: 4.7%).

In North America and the Eurozone, increases in long-term

government bond yields have also been observed, albeit to a lesser

degree than those observed in the UK. Therefore, we have increased

the discount rate in the Eurozone by 30 basis points and in North

America by 30 basis points. As a result, the overall weighted average

discount rate of the portfolio has increased by 60 basis points to

7.2%(2022: 6.6%).

In the portfolio, there were two projects in construction at 31 March

2023, both of which are located in the Eurozone (31 March 2022:

three). An investment in a project under construction can offer a

higher overall return (i.e., require a higher discount rate) compared to

buying an investment in an operational project, but it does not usually

yield during the construction period and there is the risk that delays in

construction affect the investment value.

Change in economic assumptions

Changes in economic assumptions resulted in a positive impact

of£72.0m. The increase was principally due to changes in forecast

inflation assumptions in all jurisdictions, as well as various changes

ininterest rate assumptions and other minor movements for tax

ratesoutlined in the assumptions on page 49.

Forex

GBP weakened against the Euro and the USD in the period

resultingin a positive impact of £39.5m pre-hedging. Net of

hedging,the positive impact was £26.4m.

Valuation of the Portfolio continued

Overview Strategic Report Governance Financials HICL Annual Report 2023 49

Valuation assumptions

Apart from the discount rates, the other key economic assumptions used in determining the Directors’ Valuation of the portfolio are as follows:

31 March 2023 31 March 2022

Inflation rates

UK (RPI and RPIx)

5.0% year ending March 2024,

2.75% p.a. to March 2030,

2.0% thereafter

6% year ending March 2023,

3.50% year ending March 2024,

2.75% p.a. to 2030,

2.0% thereafter

UK (CPI/CPIH )

4.25% year ending March 2024,

2.0% thereafter

5.25% year ending March 2023,

2.75% year ending March 2024,

2.0% thereafter

Eurozone (CPI) 5.0% year ending March 2024,

2.0% p.a. thereafter

3.0% year ending March 2023,

2.0% p.a. thereafter

Canada (CPI) 3.0% year ending March 2024,

2.0% p.a. thereafter

3.0% year ending March 2023,

2.0% p.a. thereafter

USA (CPI) 3.0% year ending March 2024,

2.0% p.a. thereafter

4.0% year ending March 2023,

2.0% p.a. thereafter

New Zealand (CPI) 5.0% to 31 March 2024,

2.50% to 31 March 2025,

2.25% thereafter n/a

Interest rates

UK 3.25% p.a. to March 2025, 2.50% p.a. thereafter 0.75% p.a. to March 2025, 1.25% p.a. thereafter

Eurozone 2.25% p.a. to March 2025, 2.00% p.a. thereafter 0.0% p.a. to March 2025, 0.5% p.a. thereafter

Canada 3.50% p.a. to March 2025, 3.00% p.a. thereafter 0.75% p.a. to March 2024, 2.25% p.a. thereafter

USA 4.00% p.a. to March 2025, 3.00% p.a. thereafter 0.75% p.a. to March 2024, 2.00% p.a. thereafter

New Zealand 4.00% p.a. to March 2024, 4.25% p.a. thereafter n/a

Foreign

exchange

rates

GBP / EUR 1.14 1.19

GBP / CAD 1.67 1.64

GBP / USD 1.23 1.31

GBP / NZD 1.97 n/a

Tax rates

UK 25% 19% to 2023, 25% thereafter

Eurozone Ireland 12.5%

France 25%

Netherlands 25.8%

Ireland 12.5%

France 25% – 27.5%

Netherlands 25.8%

Canada 23% and 27% 23% and 27%

USA 21% Federal and 4.6% Colorado State 21% Federal and 4.6% Colorado State

New Zealand 28% n/a

GDP growth

UK 2.0% p.a. 4.0% in 2022,

2.0% p.a. thereafter

Eurozone 1.8% p.a. 3.0% in 2022,

1.8% p.a. thereafter

USA 2.5% p.a. 3.5% in 2022,

2.5% p.a. thereafter

1 Retail Price Index and Retail Price Index excluding Mortgage Interest Payments

2 Consumer Prices Index including owner-occupiers’ housing costs; used in the valuation of Affinity Water

(8.8)

(9.6)

(5.3)

(4.3)

(2.8)

(1.7)

(1.6)

1.6

(1.2)

1.2

2.1

2.8

4.1

5.4

-12p -10p -8p -6p -2p 0p 2p 4p 6p 8p 10p

-4p

12p

10.4

10.7

Negative correlation Positive correlation

Change in NAV in pence per share

HICL Annual Report 202350

Valuation of the Portfolio continued

1 NAV per share based on 2,031 million Ordinary Shares as at 31 March 2023

2 Sensitivities for inflation, interest rates, tax rates and lifecycle are based on the 35 largest investments extrapolated for the whole portfolio

3 Foreign exchange rate sensitivity is net of Group hedging as at 31 March 2023

Valuation sensitivities

The portfolio’s valuation is sensitive to each of the macroeconomic assumptions listed above. An explanation of the reason for the sensitivity

and an analysis of how each variable in isolation (i.e. while keeping the other assumptions constant) impacts the valuation follows below

1,2,3

The sensitivities are also contained in Note 14 to the financial statements.

Discount Rate +/- 0.5%

Inflation -/+ 0.5%

Tax Rate +/- 5%

GDP -/+ 0.5%

Cash Deposit Rate -/+ 1%

Debt Interest Rate +/- 1%

Lifecycle +/- 5%

FX Rates -/+ 5%

Valuation sensitivities – impact in pence per share

Overview Strategic Report Governance Financials HICL Annual Report 2023 51

Discount rate sensitivity

Whilst not a macroeconomic assumption, the weighted average

discount rate that is applied to each portfolio company’s forecast

cash flows, for the purposes of valuing the portfolio, is the single most

important judgement and variable. The impact of a 0.5% change in

the discount rate on the Directors’ Valuation and the NAV per share

is shown above. Despite the volatility in the year, a higher sensitivity

is not considered appropriate as the mix of the portfolio means that

the sensitivity is linear and it is possible to determine the impact if

percentage changes are in multiples of this sensitivity.

Inflation rate sensitivity

PPP projects in the portfolio have contractual income streams derived

from public sector clients, which are rebased every year for inflation.

For the demand-based assets, the concession agreement usually

prescribes how user fees are set, which is generally reset annually for

inflation. On Affinity Water, one of HICL’s regulated assets, revenues

are regulated by Ofwat in a five-yearly cycle with the pricing of water

bills set with the aim of providing an agreed return for equity that is

constant in real terms for the five-year period by reference to RPI

currently and CPIH in the next regulatory period.

The chart shows that the Directors’ Valuation and NAV per share

are both positively correlated to inflation. The portfolio’s inflation

correlation at 31 March 2023 was 0.8x (31 March 2022: 0.8x) such

that should inflation be 1% p.a. higher than the valuation assumption

for all future periods the expected return from the portfolio would

increase from 7.2% to 8.0%.

The portfolio valuation assumes UK inflation of 5% for the year ending

March 2024, 2.75% per annum for both RPI and RPIx to March 2030

and 2.0% thereafter. The March 2023 forecasts for RPI out to December

2023 range from 3.1% to 10.7% from 35 independent forecasters as

compiled by HM Treasury, with an average forecast of 5.5%.

More information can be found on the effect of inflation on page 25.

Gross Domestic Product (“GDP”) sensitivity

At 31 March 2023, the portfolio had five investments which are

considered sensitive to GDP, comprising 18% of the portfolio

value (21% at 31 March 2022), namely the A63, M1-A1 Road, RMG

Roads, NWP and HS1. At times of higher economic activity there

will be greater traffic volumes using these roads and railways,

generating increased revenues for the projects compared to periods

of lower economic activity and therefore we assess these as GDP

sensitive investments.

If outturn GDP growth was 0.5% p.a. lower for all future periods than

those in the valuation assumptions set out on page 49, expected

return from the portfolio (before Group expenses) would decrease

0.2% from 7.2% to 7.0% (31 March 2022: 6.4%).

Interest rate sensitivity

The vast majority of HICL’s portfolio company’s interest costs are

at fixed rates, either through fixed-rate bonds, bank debt which

is hedged with an interest rate swap or linked to inflation through

index-linked bonds. However, there are five investments – Affinity

Water (UK), Northwest Parkway (USA), TNT (USA), XLT (UK) and

Fortysouth (NZ) which have refinancing requirements, exposing these

investments to interest rate risk. The average gearing of the assets is

lower than the portfolio as a whole, at 45%. As set out on page 50,

were interest rates to be 1.0% higher in all future valuation periods, the

expected return from the portfolio would decrease by 0.1% as a result

of higher financing costs, before accounting for the offsetting positive

impact of higher interest rates on cash balances.

In the case of other investments, sensitivity to interest rates

predominantly relates to the cash deposits which the portfolio

company is required to maintain as part of its senior debt funding.

For example, most PPP projects would have a debt service reserve

account in which six months of debt service payments are held.

At 31 March 2023, cash deposits for the portfolio were earning

interest at a rate of 3.0% per annum on average (31 March

2022: 0.2%).

Lifecycle expenditure sensitivity

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 to the FM contractor. Of the 118 investments, 46

have lifecycle as a project company risk (i.e. not subcontracted to the

supply chain).

Corporation tax rate sensitivity

The profits of each portfolio company are subject to corporation tax

in the country where the project is located. The sensitivity considers a

5% movement in tax rates in all jurisdictions.

The UK corporation tax assumption for the portfolio valuation is 25%.

Foreign exchange rate sensitivity

36% of the portfolio by (Directors’) value, has exposure to foreign

exchange rates. The sensitivity shows, post-hedging, the impact of

GBP appreciating or depreciating against these currencies by +/- 5%.

Ten Largest Exposures – Counterparty

FM counterparty

March 2023

1 In house 16%

2 Bouygues 12%

3 Equans 9%

4 EGIS 6%

One NZ 6%

Siemens 5%

7 Network Rail 4%

8 Babcock 4%

9 Mitie 3%

10 Sodexo 3%

11 Other 32%

1 Within 1 year 2%

2 1-2 years 3%

3 2-5 years 7%

4 5-10 years 7%

10+ years 2%

Latent defects

limitation/Warranty

period expired

56%

7 Assets subject to

regulatory regimes

23%

Ten Largest Exposures – Counterparty

Latent defect warranty periods

March 2023

1 Colas 6%

2 Balfour Beatty 3%

3 Siemens 3%

4 DEME 2%

Strabag 2%

Bilfinger 1%

7 Laing O’Rourke 1%

8 Bouygues 1%

9 Galliford Try 1%

10 Other contractors 1%

11 Latent defects

limitation/Warranty

period expired

56%

12 Assets subject to

regulatory regimes

23%

Ten Largest Exposures – Counterparty

Construction counterparty

March 2023

1 Affinity Water 7%

2 A63 Motorway 6%

3 Northwest Parkway 6%

4 Fortysouth 6%

Texas Nevada

Transmission

High Speed 1 4%

7 Royal School of

Military Engineering

8 Southmead Hospital 4%

9 Pinderfields &

Pontefract Hospital

10 Home Office 3%

11 Remaining

Investments

51%

Ten Largest Exposures – Investment

10 Largest Investments

March 2023

HICL Annual Report 202352

Valuation of the Portfolio continued

1 By value, at 31 March 2023, using Directors’ Valuation excluding A13 senior bonds. Where a project has more than one operations contractor in a joint and several contract, the better credit

counterparty has been selected (based on analysis by the Investment Manager). Where a project has more than one operations contractor, not in a joint and several contract, the exposure is split

equally among the contractors, so the sum of the pie segments equals the Directors’ Valuation

2 Assets subject to regulatory regimes that help mitigate the potential impact of defects on equity

Market intelligence

Third-party advisers

Risk assessment and reporting

Oversight and feedback

Board

Risk Committee

Investment Committee

Fund Management team

Asset

Management

team

Portfolio

Management

team

Origination

& Execution

team

Central

Support

functions

InfraRed Capital Partners Limited

HICL Infrastructure PLC

Project / Business Management teams

This schematic sets out the Company’s risk management framework:

Overview Strategic Report Governance Financials HICL Annual Report 2023 53

Risk & Risk Management

Risk management framework

HICL’s risk management framework covers all aspects of HICL’s

business. The Board monitors, challenges and evaluates InfraRed’s

management of risk through the consideration of scenarios that

could materially impact the performance of HICL were they to

occur. Having considered and analysed key risks, mitigating action

may be undertaken to reduce the likelihood and impact of each

risk manifesting.

The Board has ultimate responsibility for setting HICL’s risk policy and

risk appetite. It has convened a Risk Committee to assist the Board

by assessing HICL’s overall risk profile, recommending a risk appetite,

and ensuring its framework is appropriately designed and effective.

The terms of reference for the Risk Committee can be found on

HICL’s website.

Day-to-day monitoring, evaluation and management of risk

is undertaken by InfraRed as HICL’s Investment Manager.

Working closely with portfolio company management teams,

InfraRed’s Asset Management team ensures the timely reporting

ofproject-specific risks to the HICL Fund Management team as and

when they arise; the HICL Investment Committee also undertakes

a formal review of project-specific risks on a quarterly basis.

The Investment Manager is monitored and challenged by the Risk

Committee, which reports to the Board.

The Investment Manager uses its experience, insight from

investments within the Group’s portfolio and the wider infrastructure

market to consider future risks and develop appropriate mitigation

strategies. The Investment Manager oversees the deployment of

these strategies and directs portfolio company management teams

as required. Relevant systems, policies, oversight and third-party

assurance are utilised to ensure effective risk management.

The Board’s Management Engagement Committee reviews the

performance of the Investment Manager (as well as all key service

providers) at least annually and this review includes a consideration

of the Investment Manager’s internal controls and their effectiveness.

No issues were identified in the latest review. The Investment Manager’s

Risk and Compliance team has developed a detailed self-assessment

internal control report, and this is reviewed on a quarterly basis by the

Risk Committee.

HICL Annual Report 202354

Risk classes

Risk is evaluated across seven primary risk classes. These are

set out in the table below along with the Investment Manager’s

assessment of:

– The potential financial impact of plausible 12-month downside

scenarios, which are developed by the Investment Manager and

reviewed by the Risk Committee. They represent the estimated

impact of severe but plausible scenarios, meaning they are not

worst-case. Each scenario is presented before (inherent) and after

(residual) the effect of mitigation strategies is considered; and

– A residual risk rating

based on the likelihood and mitigated impact

of the prudent downside scenario for each risk class.

If any one of the plausible 12-month downside scenarios described

above were to materialise, the NAV / share impact would be impacted

immediately, but the effect on cash flow may extend beyond the

current year, with a consequential impact on dividend cash cover.

The Risk Committee has therefore decided to focus on the five-year

cash flow impact of each scenario.

The Investment Manager regularly presents stress scenarios and

associated mitigation strategies to the Risk Committee to assist its

assessment of more severe but lower-probability downside scenarios.

There has been no change to the residual risk ratings of the seven

primary risk classes over the year. Although the residual risk from

portfolio performance is still considered to be high, the Investment

Manager continues to make progress in delivering defect remediation

works, with a number of key milestones achieved across the

portfolio. The risk posed to HICL’s demand-based assets by Covid-19

significantly reduced during the year as asset usage increased,

although some uncertainty remains around the potential impacts

of long-term behavioural change. InfraRed successfully mitigated

the risk of adverse behaviour from public sector clients through

collaborative and active engagement, although there remains a risk

that persistent high inflation places heightened financial pressure

on public sector counterparties. Supply chain disruption, increased

energy costs and materials inflation had a limited impact on a subset

of projects during the period, with the wider risk to HICL mitigated by

contractual pass-through mechanisms.

The residual risk rating for both the financial / market risk and political

risk classes continues to be assessed as medium. For financial /

market risk, rising base interest rates across HICL’s jurisdictions in

response to high inflation led to increased financial market volatility in

the year, but the valuation impact of rising discount rates was largely

offset by the portfolio’s high correlation to inflation. Political and

regulatory risk is an inherent feature of the infrastructure asset

class which can evolve at relatively short notice, evidenced by the

changes to the UK government during the year. The Company’s

primary mitigation is through its diverse portfolio, which is exposed

to a wide range of different clients, sectors, regulatory regimes

and geographies.

Principal risks

The tables on the following pages summarise the principal risks which

are regularly reviewed by the Risk Committee and have the potential

to reduce the Company’s ability to achieve its strategic objectives

and materially impact HICL’s financial performance and reputation.

They are not an exhaustive list of risks and uncertainties faced by the

Group. Further information on the principal risks and uncertainties

facing HICL can be found in HICL’s March 2019 Prospectus which

isavailable on the Company’s website at www.hicl.com.

The Directors have carried out a robust assessment of the

Company’s emerging and principal risks. The movement in risk status

for each principal risk, when compared with the previous financial

year, is set out in the tables below. The Investment Manager’s Report

(starting on page 20) provides additional commentary on how the risk

landscape faced by the Company has evolved during the year.

The risks posed by climate change, whilst not expected to be material

to the Company, are an integral part of the Investment Manager’s risk

management framework. Further information on the assessment and

management of climate-related risks can be found in the Task Force

on Climate-related Financial Disclosures, starting on page 67.

Risk & Risk Management continued

Primary risk classes

Residual

risk rating

Change

in year

NAV/share impact

Inherent vs Residual

Five-year cash flow impact

Inherent vs Residual

Portfolio performance risk High

Financial / market risk Medium

0 25 0 25

Political risk Medium

Operational risk – execution Low

Operational risk – portfolio and asset management Very Low

0 25 0 25

HICL central management risk Very Low

Operational risk – regulation and compliance Very Low

1 There are five residual risk ratings: the lowest being ‘Very Low’, then ‘Low’, ‘Medium’, ‘High’ and ‘Very High’

ResidualInherent

Overview Strategic Report Governance Financials HICL Annual Report 2023 55

Portfolio performance risk

Principal risk

Adjustments to contracted orregulatedrevenues

Movement in risk

status in FY2023

Potential impact

– Reduced income from PPP

projects due to availability

deductions because of poor

operational performance or a

disputed approach to contract

management by clients

and advisors

– Under certain regulatory

regimes, failure to meet

specified delivery outcomes can

result in penalties being earned,

reducing income

– Projects may be prevented from

making distributions by lenders

or in severe cases, default on

financing arrangements

– Adverse reputational impacts

from loss of revenue linked to

acute operational issues

Risk mitigation

– Contractual pass-through of

deductions to subcontractors,

which can be terminated and

replaced if performance is poor

for an extended period of time

– Collaborative and proactive

agreement with public sector

clients where disagreements

arise over performance

– Diversity of regulatory

mechanisms and

performance regimes

– For most regulated

assets, management

team compensation linked

to performance against

regulatory outcomes

FY23 outcome

– Low overall level of deductions

across the PPP portfolio,

with the vast majority passed

down to subcontractors

– Deeper collaboration with

clients through Portfolio

Impact strategy

– Increase in penalties earned

by Affinity Water, primarily due

to extreme weather

Link to strategic

objectives

Principal risk

Revenue variability

Movement in risk

status in FY2023

Potential impact

– Actual usage of demand-

based assets below

valuation assumptions

– Potential default of financing

arrangements in the case of

significant underperformance

– Uncertain and unpredictable

impact on usage of transport

assets from long-term

behavioural changes, such as

increased home working

– Take up or adoption of new

communications technology

slower or less than expected

Risk mitigation

– Detailed analysis of demand risk

as part of due diligence process

at acquisition

– Use of independent third-

party traffic forecasts

where appropriate

– Assessment of risk of long-term

behavioural changes as part of

the Directors’ Valuation

– Strategic and critical nature

of the Group’s demand-

based assets

– Communications assets benefit

from monopolistic wholesale

market positioning or long-

term contracts

FY23 outcome

– Reduced short-term risk from

Covid-19-related restrictions

of movement, with demand-

based assets experiencing

year-on-year growth in usage

– Update of long-term forecasts

for HS1 and NWP given more

stable operating environment

– HS1 expected to resume

shareholder distributions in

calendar year 2023; all other

demand-based assets making

regular distributions

Link to strategic

objectives

Link to strategy

Deliver a

sustainabledividend

Grow Net Asset Value

Build a diversified

portfolioto manage risk

Provide a compelling

cost proposition

Change in risk level

No change

Decreased risk Increased risk

HICL Annual Report 202356

Risk & Risk Management continued

Portfolio performance risk (continued)

Principal risk

Construction defects

Movement in risk

status in FY2023

Potential impact

– Disputes with the

subcontractor on the scope of

remediation required

– Increased cost to the

portfolio company where the

construction contractor is no

longer solvent or the statutory

limitations period has expired

– Lenders preventing the

project from distributing or,

in severe cases, default on

financing arrangements

– Availability deductions may be

levied depending on the extent

of the defects and the works

required for remediation

– Adverse reputational impact

from material defect issues

Risk mitigation

– Legal rights of portfolio

companies to make claims

against construction

subcontractors for identified

defects during the statutory

limitations period

– Construction defects identified

through targeted surveys as

well as a regular programme of

operations and maintenance

– Adjudication or court

process used where

disputes arise and cannot be

commercially resolved

– Lifecycle budget to offset some

costs following the expiry of the

statutory limitations period

FY23 outcome

– Agreement of commercial

terms for a major programme

of works at Pinderfields

and Pontefract Hospitals

during the year, which

enabled the resumption of

shareholder distributions

– Reduced exposure to the

historical obligations of

Carillion plc through the sale

of QAH

– Proactive leadership and

control of the delivery of

remediation works by

responsible parties where

necessary across the portfolio

Link to strategic

objectives

Principal risk

Construction, operations and maintenance counterparties

Movement in risk

status in FY2023

Potential impact

– Operational underperformance

reducing a portfolio company’s

ability to fulfil its contractual

obligations, potentially leading

to revenue adjustments

(see above)

– Failure of a counterparty,

which is likely to lead to

lenders preventing projects

from distributing until the

counterparty is replaced

Risk mitigation

– Well diversified portfolio,

mitigating concentration risk

– Counterparty credit risk

assessed on a regular basis

by InfraRed’s internal credit

risk team

– Continuous review of

contingency plans for a scenario

in which a key subcontractor

enters administration

or liquidation

– A number of potential

replacement service providers

from InfraRed’s wide network

FY23 outcome

– Acquisition of Engie SA’s

services unit, Equans, by

Bouygues S.A., a high-

quality counterparty

– Increased concentration risk

from the above transaction

offset by new additions

to HICL portfolio and the

disposal of QAH

– No material deterioration in

any counterparty rating

Link to strategic

objectives

Overview Strategic Report Governance Financials HICL Annual Report 2023 57

Principal risk

Operational costs

Movement in risk

status in FY2023

Potential impact

– Budgets for management

services contracts, lifecycle

costs and insurance premia

prove to be insufficient

– For certain regulated assets,

overspend against allowances

may reduce returns

– Overspends can also occur

where portfolio company

management teams are

responsible for operational

service delivery

Risk mitigation

– Risk for several types of

operational cost generally

passed down through

fixed price contracts to

industry specialists

– Regular assessment of lifecycle

budget adequacy

– For regulated businesses,

set stretching but achievable

expenditure allowances

– For some assets, management

team compensation linked to

performance business plan

FY23 outcome

– Supply chain pressures

affecting the lifecycle costs

inthe UK PPP sector

– Ongoing programme of

management service

contract renewals

– Operational costs slightly in

excess of budget at Affinity

Water due to electricity costs

and additional spending

in response to extreme

weather events

Link to strategic

objectives

Financial and market risk

Principal risk

Investor sentiment

Movement in risk

status in FY2023

Potential impact

– Prolonged periods where

the share price trades below

HICL’s prevailing NAV, inhibiting

HICL’s ability to issue new

equity capital

– Inability to capitalise

on attractive

investment opportunities

Risk mitigation

– Ability to refinance HICL’s

Revolving Credit Facility (“RCF”)

to extend maturity and size (if

deemed appropriate)

– Use of HICL’s Letter of Credit

Facility (“LCF”) for longer-term

drawings for construction

assets, where equity

commitments are deferred for

a number of years, to release

RCF capacity

– Strategic disposal to generate

cash to pay down drawings

under the RCF and facilitate

opportunistic acquisitions

without substantially increasing

HICL’s gearing

– Issue of Private Placement

which diversifies sources of

capital, extends the maturity

of debt to a longer tenor at a

fixed rate

FY23 outcome

– Periods of HICL’s share price

trading below prevailing

NAV towards the end of the

financial year

– Successful £160m issuance

of equity capital in July 2022

– Disposal of QAH and partial

disposal of NWP (post period

end) raised c.£174m

– Successful renewal and

extension of HICL’s £650m

RCF in March 2023

Link to strategic

objectives

Link to strategy

Deliver a

sustainabledividend

Grow Net Asset Value

Build a diversified

portfolioto manage risk

Provide a compelling

cost proposition

Change in risk level

No change

Decreased risk Increased risk

HICL Annual Report 202358

Risk & Risk Management continued

Financial and market risk (continued)

Principal risk

Inflation

Movement in risk

status in FY2023

Potential impact

– Adverse impact on portfolio

valuation and distributable cash

flows if inflation levels below

HICL’s long-term assumptions

– Potential defaults under loan

arrangements in sustained

periods of deflation

– Sustained high inflation may

lead to increases in interest

rates and therefore discount

rates (see below)

– In some cases, inflation may

impact costs to a greater extent

than revenues

Risk mitigation

– HICL’s inflation assumptions are

carefully considered as part of

the Directors’ Valuation, drawing

from a wide range of forecasts

– Lower inflation usually coincides

with lower interest rates,

elements which materially

offset each other in the

portfolio valuation

– Negative impact of discount

rate increases would be largely

offset by positive impact of

inflation (see below)

– In many cases, both costs

and revenues are contractually

linked to the same inflation index

FY23 outcome

– Sector-leading correlation

of return to inflation at

0.8x maintained through

new acquisitions

– Portfolio outperformance

driven by actual inflation

ahead of expectations

– Valuation assumptions

assume a significant

decrease in inflation

overthecoming year

Link to strategic

objectives

Principal risk

Discount and interest rates

Movement in risk

status in FY2023

Potential impact

– Increases in interest rates may

lead to increases in long-term

government bond yields, which

in turn may lead to increases

in the discount rate used for

comparable market transactions

– All other things being equal,

higher discount rates would

result in a reduction in the

portfolio valuation

Risk mitigation

– Higher interest rates usually

coincide with higher inflation,

elements which materially

offset each other in the

portfolio valuation

– Higher deposit interest income

when interest rates increase

partly mitigates the value

reduction arising from increased

discount rates

– Low overall sensitivity to the

impact of increased interest

rates on financing costs at

portfolio level

– Adequate and reasonable risk

premium added to risk-free

reference rate (long-dated

government bonds) used

to corroborate reference

discount rates

FY23 outcome

– Impact of increased discount

rates during the year largely

offset by the portfolio’s

positive correlation to inflation

and deposit rates

– Discount rates used in

the Directors’ Valuation

corroborated by market

transactions (including

the disposal of NWP post

period end) and the Board’s

third-party expert opinion on

the valuation

Link to strategic

objectives

Overview Strategic Report Governance Financials HICL Annual Report 2023 59

Political risk

Principal risk

Policy changes

Movement in risk

status in FY2023

Potential impact

– Clients of HICL’s portfolio

companies or national

governments may choose to

terminate contracts

– Heightened public sector activity

around the prospect of PPP

‘handback’ and the mobilisation

of public sector resources for

the transition of UK PPP facilities

back to the public sector at

their expiry

– Governments may consider

taking certain assets back into

public ownership

Risk mitigation

– PPPs generally have a

contractual right to receive

compensation in the event

of counterparties voluntarily

terminating a PPP contract

– InfraRed’s active involvement in

various industry bodies which,

on behalf of the infrastructure

sector, engage with politicians,

civil servants, other policy

shapers, and regulators

– InfraRed’s direct interaction with

stakeholders of the portfolio’s

projects to extol the value that

the private sector brings to the

delivery of public infrastructure

FY23 outcome

– Two changes of UK Prime

Minister during the year,

with some evidence that

the political situation has

now stabilised

– The broader need for

infrastructure procurement

enjoys bipartisan

political support

– Heightened political scrutiny

of UK water companies

as a result of sewage

overflow events

Link to strategic

objectives

Principal risk

Legal or regulatory changes

Movement in risk

status in FY2023

Potential impact

– Exposure to higher contractual

costs or obligations due to legal

and regulatory changes

– Adverse impact on the assets

that are subject to regular price

control reviews in the event of

failure to deliver the specified

levels of service or investment

Risk mitigation

– Continuous monitoring of

potential and actual changes to

regulations by the Investment

Manager and their advisers

to ensure both the Group

and its service providers

remain compliant

– Protection in relation to

changes in legislation is

provided by most social

and transport infrastructure

concessions through their

contractual structures

– InfraRed’s participation in

relevant consultation processes

to ensure that the legislature

and regulators hear the

concerns and views of HICL,

in its capacity as a private

sector investor

– Well-diversified portfolio across

clients, sectors and countries

FY23 outcome

– Ofwat published final

methodology for PR24 and

early view on WACC, which

were broadly in line with

HICL’s expectations for the

valuation of Affinity Water

– Exposure to regulatory

regimes diversified through

the acquisition of TNT

– HS1 has limited direct

exposure to regulatory

price control

Link to strategic

objectives

Link to strategy

Deliver a

sustainabledividend

Grow Net Asset Value

Build a diversified

portfolioto manage risk

Provide a compelling

cost proposition

Change in risk level

No change

Decreased risk Increased risk

HICL Annual Report 202360

Risk & Risk Management continued

Political risk (continued)

Principal risk

Taxation changes

Movement in risk

status in FY2023

Potential impact

– Adverse impact on the Group

and portfolio value due to

taxation legislation or treaty

changes, such as corporation

tax rates and cross-border

tax rules

Risk mitigation

– Closely monitor relevant

cross-border tax rules and

broader taxation legislation

developments for any potential

adverse impact on the Group

FY23 outcome

– Enactment of increase

in UK corporation tax

increase in line with HICL’s

valuation assumption

– No other material changes

intax legislation

Link to strategic

objectives

Operational risk – execution

Principal risk

Inadequate due diligence

Movement in risk

status in FY2023

Potential impact

– Underperformance against

acquisition assumptions

due to poor or inadequate

due diligence

Risk mitigation

– InfraRed’s Origination and

Execution team adopt a

thorough due diligence

approach and have a depth of

experience in buying and selling

infrastructure assets

– Support of specialist advisers

(e.g. lawyers, technical

consultants, sustainability

advisers and tax advisers)

– Oversight is provided by the

HICL Investment Committee,

and by the Risk Committee and

Board in respect of matters

falling outside the Investment

Manager’s Approved Investment

Parameters (“AIP”)

FY23 outcome

– New acquisitions performing

in line with expectations

– Refreshed AIP framework

is expected to enhance

the ability of the Risk

Committee and Board to

appropriately evaluate new

investment opportunities

Link to strategic

objectives

Overview Strategic Report Governance Financials HICL Annual Report 2023 61

Principal risk

Asset pricing

Movement in risk

status in FY2023

Potential impact

– Infrastructure assets become

less attractive due to high

asset pricing

– Overpayment for assets leads

to lower realised investment

returns than expected

Risk mitigation

– InfraRed’s disciplined

and selective Acquisition

Strategy, leveraging the

Investment Manager’s

international Origination and

Execution platform

– New acquisitions can provide

inherent protection against rising

interest rates through inflation

correlation or regulated cost of

capital structures

FY23 outcome

– Discount rates used to value

new acquisitions corroborated

by market data points,

including HICL’s disposal

activity both during and after

the period, and acquisitions

and disposals made by other

InfraRed-managed funds

Link to strategic

objectives

Link to strategy

Deliver a

sustainabledividend

Grow Net Asset Value

Build a diversified

portfolioto manage risk

Provide a compelling

cost proposition

Change in risk level

No change

Decreased risk Increased risk

HICL Annual Report 202362

Risk Committee Report

The following pages set out the Risk

Committee’s report on its activities for

the year ended 31 March 2023. The Risk

Committee operates within clearly defined

terms of reference, which are available on

the Company’s website. The Risk Committee

is comprised of all Directors and meets four

times a year, coinciding with the quarterly

Board meetings, and is available to convene

ad hoc should material matters arise.

In discharging its responsibilities, the duties of the Risk

Committeecomprise defining the risk appetite of the Group,

assessing, monitoring and managing the principal risks to which

theGroup is exposed, as well as establishing and overseeing

mitigating action. In particular, we consider risk exposure and

controls, stress and scenario planning, regulatory compliance,

portfolio company controlsand the three lines of defence.

Simon Holden

Risk Committee Chair

23 May 2023

Main duties and general approach

The Risk Committee’s main duties are, as set out in its terms of

reference, to consider and where necessary make recommendations

to the Board, on the following:

– the Company’s implementation of an effective governance

structure and control framework which covers key risk areas with

appropriate reporting;

– the Group’s risk appetite statement (reviewed annually at a

minimum), taking account of the current economic, political,

and business environment, as well as any short-term shocks or

longer-term trends (such as climate change) which might affect

portfolio performance;

– risk limits and tolerances, and risk management;

– ongoing regulatory compliance;

– the Group’s risk profile, challenging the assessment and

measurement of key risks whilst monitoring the actions taken

to manage and mitigate them;

– scenario analysis to determine whether proposed mitigation is

sufficient to manage the business risk profile within the Board’s

appetite; and

– the Investment Manager’s advice on material changes to

investment strategy, the treasury policy, the hedging policy

and the risk policy.

Statement of the Chair

of the RiskCommittee

The Company has a risk management framework covering all aspects

of the Group’s business. The Company is an Alternative Investment

Fund (“AIF”) and the Investment Manager (as Alternative Investment

Fund Manager, (“AIFM”)) is responsible for risk management and has

well-established systems and controls to manage and monitor risk.

The Board places reliance on the Investment Manager’s systems

and controls and through its Risk Committee, monitors, reviews and

challenges their effectiveness.

The risk management framework operates across a range of

timeframes and likelihoods, from; i) previously identified risks with

mitigating actions already underway, ii) the identification of near-term

emerging risks, including potential catalysts of ‘black swan’ events,

and iii) longer-term ‘horizon risks’ that might influence HICL’s portfolio

and investment policy in the decades ahead.

The risk management framework follows a cascade approach,

with three ‘lines of defence’, to effectively safeguard and protect

the interests of the Company and its shareholders. The Investment

Manager implements mitigation strategies, which are regularly

reported to and assessed by the Risk Committee:

– The first line is the development of systems to implement effective

controls. These are set out in documents such as the Company’s

and the Investment Manager’s Policies and Controls Manuals.

The Company must generally be satisfied that the Investment

Manager’s systems and processes ensure that risk is effectively

anticipated, controlled, reported and overseen. InfraRed, as the

Company’s Investment Manager and the Operator of HICL’s

portfolio, is responsible for the identification, classification,

assessment and management of risk both within the existing

portfolio and in evaluating new investment opportunities.

Overview Strategic Report Governance Financials HICL Annual Report 2023 63

– The second line is that of oversight and engagement from the Risk

Committee, who scrutinise and challenge InfraRed’s approach to

risk management. At each quarterly meeting, the Risk Committee

conducts an in-depth review of the most material risks faced by

the Group, which are assessed quantitatively (based on potential

valuation and cash flow impact) and qualitatively (reputational

impacts). The Committee also considers longer-term factors to

which the Company may need to adapt in the future (‘horizon

risks’) such as climate change, as well as risks which may impact

the future delivery of the Company’s investment proposition,

including ‘black swan’ risks. Mitigation strategies are proposed by

the Investment Manager, with progress being monitored by the

Risk Committee. The Risk Committee also ensures that all relevant

policies are up to date and that delegated authorities are observed.

– The third line is third-party assurance which is used on an as-

needed basis to provide independent scrutiny of the Company’s

risk management framework, an audit of key controls and specialist

guidance. The results are reported to each of the Risk Committee

and the Audit Committee as appropriate.

Routine business

The Committee considered and noted compliance with HICL’s

Investment Policy and other policies relating to gearing, hedging and

risk reportable events, which are fundamental to the Company’s

risk appetite.

Within the Investment Policy, the Risk Committee has established

Approved Investment Parameters (“AIPs”). These are designated

thresholds that are approved by the Board in coordination with the

Investment Manager. These set the perimeter of HICL’s risk appetite

as it relates to portfolio construction, fund level gearing and hedging.

The AIPs have served as intended during year, with compliance

monitored by the Risk Committee and any proposed investment

which would exceed the limits set by the AIPs appropriately

considered in advance. AIPs are adjusted from time to time based

on the evolution of the Company’s investment strategy and operating

environment; during the year a thorough review was undertaken as

set out in more detail in the following section.

The Committee’s routine quarterly agenda covers, inter alia, a

summary of key risks faced by the Group (including changes to the

potential impact or timing of known risks as well as a consideration

of emerging and longer-term ‘horizon’ risks, with climate and

environmental risks notable amongst these), a review of HICL’s risk

management policies and updates on relevant fund or portfolio

company matters as required.

The Committee received quarterly reporting from the Investment

Manager in relation to health and safety matters. The safe working

practices of our contractors and the avoidance of injuries are always

of paramount concern and are closely monitored across the portfolio

at all times.

The Committee considered, at each meeting, regulatory compliance

reports from both the Investment Manager and Aztec, the Company’s

Administrator and Secretary. The Committee also received

compliance reports from the Depositary. No significant action points

or notable comments arose in respect of these regular reviews.

The Committee concluded each quarterly meeting with an

assessment of whether HICL was compliant with its stated risk

appetite and, confirmed that, taken as a whole, this was the

case. The Committee also concludes by ensuring the Investment

Manager’s attention focuses on any areas the Chair wishes to see

closer scrutiny of and reporting against in subsequent quarters.

Process and reporting updates

Over the course of the year, the Investment Manager continued to

refine its risk management process and its quarterly reporting to the

Risk Committee in a number of areas:

Stress testing and scenario analysis

A rolling programme of stress testing and scenario analysis for

HICL was presented to the Risk Committee at each of its meetings

throughout the year. The Investment Manager continued to refine

the scenarios included within each Primary Risk Class based on the

Company’s evolving portfolio and operating environment. As a result

of the volatile macroeconomic backdrop in the second half of the

year, the Investment Manager presented several new stress tests

covering the Financial/Market and Political primary risk classes.

Refreshed AIP framework

During the year, the Investment Manager worked closely with the

Risk Committee to undertake a thorough review and refresh of the

Company’s AIP framework. The main objectives were to ensure that

the Company is not overly exposed to any material risk across its

portfolio of assets, whilst providing an appropriate level of delegated

authority to the Investment Manager given its market expertise.

Each parameter within the framework reflects a distinct risk inherent

within HICL’s evolving portfolio of modern core infrastructure

assets, and the concentration limits are set with the aim of providing

adequate oversight for a company of HICL’s size and capital structure.

The revised framework, which was ratified by the Risk Committee

in February 2023, also clarifies the categorisation of risks and is

expected to enhance the Risk Committee’s ability to appropriately

evaluate new investment opportunities.

Key Risk Indicators

In November 2022, the Investment Manager presented a refreshed

set of Key Risk Indicators (“KRIs”), which are an important part of

its risk management framework and are reported on a quarterly

basis to the Risk Committee. The updated KRIs reflect the evolving

nature of the risks faced by the Company and are designed to be

leading indicators of potential changes to HICL’s residual risk position.

Previously, there were 44 KRIs across the seven primary risk classes,

and subsequent to this review, nine new KRIs were approved, five

were adjusted and five removed as no longer considered appropriate.

‘Black swan’ risks

During the year, the Risk Committee considered potential ‘Black

swan’ risks, which are by definition unlikely to occur but could arise

with limited warning and have a potentially significant impact on the

Company. This included an assessment of the potential impact of

each risk, the degree to which each risk is systemic or Company

specific, as well as the degree of control that the Company or

Investment Manager has in monitoring, preventing or mitigating the

impact of these risks.

HICL Annual Report 202364

Viability Statement

The AIC Code of Corporate Governance (the “AIC Code”) requires

the Directors to make a statement regarding the Company’s viability

in the Annual Report, explaining how they have assessed the

Company’s prospects, the period of time for which they have made

the assessment and why they consider that period to be appropriate.

The Directors have determined that the five-year period to March

2028 remains an appropriate period over which to assess HICL’s

viability as:

– This period aligns with the Company’s business planning exercises,

including how the Directors assess the Company at their annual

strategy Board meeting;

– It is the period over which the internal stress testing is performed;

and

– Although the long-term and/or contractual nature of our

investments means that the Directors have a higher level of

confidence over the endurance and longevity of the Group, it is

challenging to assess the regulatory, tax and political environment

outside of the five-year period with any certainty.

Assessment of HICL’s prospects

The Directors’ primary assessment of the Company’s prospects

is achieved through the annual strategic and business planning

exercise. The Directors review a five-year budget and business plan,

which is prepared by the Investment Manager and includes cash

flow projections to aid strategic planning and provide support for the

dividend approval process. The projections consider cash balances,

investment commitments, key covenants and limits, dividend cover,

investment policy compliance and other key financial indicators over

that five-year period. These projections are based on the Investment

Manager’s expectations of future asset performance, income and

costs and are consistent with the methodology applied to provide

thevaluation of investments.

HICL’s portfolio consists of companies whose underlying assets

are predominantly fully constructed and operating PPPs or similar

projects with public sector counterparties in jurisdictions with

established and proven legal systems. As a result, the Company

benefits from predictable long-term contracted cash flows and a

set of risks that can be identified and assessed (see Risk & Risk

Management on page 53). The projects are each financed on a

non-recourse basis to the Company and are supported by detailed

financial models. The Directors believe that the non-recourse

financing and diversification within the investment portfolio helps to

withstand and mitigate the risks it is most likely to meet. In addition,

the Company has a low level of operating expenses relative to

forecast receipts from its portfolio investments, with the largest cost

being the management fee. The Company funds its investments

using equity and longer-term debt and its gearing is well within its

Board approved investment parameters in the five-year period and

the Company can withstand a material increase in interest costs.

The Company has not been immune to recent increased market

volatility and its shares have traded at a discount to NAV for a

sustained period. Notwithstanding this current discount, the

Company has successfully demonstrated its ability to support its

near-term investment pipeline with the renegotiation of its £650m

revolving credit facility, £150m Private Placement issue as well as its

active capital recycling programme which provides a valuable source

of funding beyond capital markets and evidence of the robustness

of HICL’s investment portfolio valuation. Since IPO, HICL has sold on

average one asset a year.

Assessment of viability

In making this statement, the Directors have considered the

resilience of the Company, considering both its current position and

its principal risks, in severe but plausible downside scenarios, and

the effectiveness of any mitigating actions. Consideration has been

given to the current market and political environment, as well as the

continued recovery of demand-based assets from the impact of

the Covid-19 pandemic, heightened geopolitical risk, and increased

market volatility.

The Investment Manager has prepared sensitivity analysis including

various stress scenarios which have been considered previously by

the Risk Committee. These include:

– Increasing tax rate assumptions by 5% for all non-UK assets;

– Increasing lifecycle costs by 20%;

– Reducing forecast inflation by 2% compared to the base

case scenario;

– Assuming an increase in projects not distributing of 20% of the

portfolio (note this represents projects entering distribution lock-up

for a period of 12 months after which they are released);

– Deferral of demand-asset lock-up release dates by two years and

no refinancing proceeds;

– Delay of capital raising for a period of at least 12 months, funding

the Company’s acquisitions with an average forecast RCF cost of

at least 200 basis points above base case; and

– Combined scenario assuming:

– Increase in PPP projects not distributing of 20%;

– A delay to distributions from demand assets for a further

24 months beyond the base case assumption;

– 30% increase to MSA costs and 15% increase in other SPV

operating costs;

– Increasing tax rate assumptions by 5% for all non-UK assets;

and

– No refinancing proceeds from key assets.

Individually, due to the diversified nature of the Company’s portfolio,

these scenarios pose a minimal threat to the Company’s solvency.

The analysis therefore demonstrated that the Company should

remain viable over the five-year assessment period.

Viability statement

The Directors have a reasonable expectation that the Company will

be able to continue in operation and meet its liabilities as they fall

due over the five-year period to March 2028, on the assumption that

there is sufficient liquidity in the debt market to allow the Company

to refinance or repay obligations becoming due under its Revolving

Credit Facility and Letter of Credit Facility, and that its investments are

not materially affected by retrospective changes to government policy,

laws or regulations.

Overview Strategic Report Governance Financials HICL Annual Report 2023 65

Strategic Report Disclosures

Investment Policy

HICL’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. HICL 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.

HICL will also seek to enhance returns for shareholders by acquiring

more diverse infrastructure investments. The Directors currently

intend that HICL 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 HICL. 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 HICL considers appropriate

to acquire;

– Project companies with ‘demand-based’ concessions where

the Investment Manager 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% limit, and again at the time the relevant investment is made)

in limited partnerships, 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.

Geographic focus

The Directors believe that attractive opportunities for HICL 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). HICL may therefore make investments in the European Union,

Norway, Switzerland, the Americas and selected territories in Asia

and Australasia. HICL may also make investments in other markets

should suitable opportunities arise. HICL will seek to mitigate country

risk by concentrating on investment opportunities in jurisdictions

where it considers that contract structures and enforceability are

reliable and where (to the extent applicable) public sector obligations

carry what the Investment Manager believes to be a satisfactory

credit rating and where financial markets are relatively mature.

Single investment limit and diversity

ofclients and suppliers

For each new acquisition made, HICL will ensure that such

investment acquired does not have an acquisition value (or, if it is a

further stake in an existing investment, the combined value of both the

existing stake and the further stake acquired is not) greater than 20%

of the total gross assets of HICL 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 Manager 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.

Restrictions under the Listing Rules

In accordance with the requirements of the Financial Conduct

Authority, HICL has adopted the policies set out below:

– HICL’s primary objective is investing and managing its assets

with a view to spreading or otherwise managing investment risk.

HICL must, at all times, invest and manage its assets in a way

which is in accordance with its Investment Policy;

– HICL will not conduct a trading activity which is significant in the

context of HICL as a whole. HICL will not cross-finance businesses

forming part of HICL’s investment portfolio; and

– No more than 10%, in aggregate, of HICL’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 HICL.

HICL Annual Report 202366

Risks and uncertainties

The principal risks and uncertainties facing HICL can be found in

HICL’s March 2019 Prospectus which is available on the Company’s

website at www.hicl.com. An update on the key risks currently faced

by the Company and associated mitigants are set out in the Risk &

Risk Management section of this report starting on page 53.

Environmental, social and community matters

For a detailed explanation of HICL’s approach to Environmental,

Social and Governance / Responsible Investment, please see HICL’s

Sustainability Policy, which can be found on the Company’s website

at www.hicl.com. A comprehensive review of the year, including

case studies from the portfolio, can be found in HICL’s Sustainability

Report 2023, also available on the website.

Research and development activities

None.

Section 172(1) Statement

The Directors discharge their duties under Section 172 of the Companies

Act 2006 to act in good faith and to promote the success of the

Company for the benefit of shareholders as a whole.

As a closed-ended investment company, HICL has no employees;

however, the Directors assess the impact of HICL’s activities on other

stakeholders, in particular public sector clients and the end users of

the infrastructure investments, as well as the community as a whole,

recognising that the investments of HICL are often key community

assets. Details can be found in the Strategic Report.

Gender diversity

At the year end, the Board of Directors comprised eight non-

executives; five male and three female.

HICL has no employees.

Leverage

HICL is required under the Alternative Fund Managers Directive

(“AIFMD”) to make available to investors information in relation

to its leverage. Leverage is considered in terms of HICL’s overall

exposure to financial or synthetic gearing and includes any method

by which its exposure is increased whether through borrowing of

cash or securities, foreign currency holdings, leverage embedded

in derivative positions or by any other means. It is expressed as

the ratio between the total exposure of HICL and its net asset

value such that if its exposure was equal to its net asset value,

leverage would be disclosed as 100%; a value above 100% means

that HICL has leverage equal to the percentage amount above

100%. Exposure values are calculated by two methods, gross and

commitment, as defined within the AIFMD. Exposure under the

gross method represents the aggregate of all HICL’s exposures other

than cash balances held in base currency; the commitment method

takes into account the effect of different treatment of certain cash

and cash equivalent items and of offsetting instruments between

eligible assets to reflect netting and hedging arrangements in line

withregulatory requirements.

Maximum leverage levels have been set by the Board and InfraRed

and are in accordance with the maximum borrowing allowed by

HICL’s Articles of Association.

The table below sets out the current maxima, and permitted limit and

actual level of leverage for HICL as a percentage of its net asset value

as at 31 March 2023.

Leverage

Gross

Method

Commitment

Method

Maximum limit 150% 150%

Actual level 123% 107%

Mike Bane

Chair

23 May 2023

Strategic Report Disclosures continued

Overview Strategic Report Governance Financials HICL Annual Report 2023 67

Introduction

Over recent years, it has become even

more evident that climate change has the

potential to negatively impact infrastructure

assets around the world. For infrastructure

stakeholders, frequent extreme weather

events and rising sea levels are increasingly

visible consequences of manmade

greenhouse gas emissions. The Board

and Investment Manager strongly believe

that making a proactive and positive

contribution to climate action is in the best

interests of HICL’s shareholders, clients and

widerstakeholders.

On behalf of HICL, InfraRed actively identifies and works to mitigate

the risks that climate change poses to the Company whilst also

looking to reduce the actual and potential adverse impacts of

business decisions on societies and the environment. The disclosures

below provide key climate-related information, and cross-references

to where additional information can be found (either within this report,

or within HICL’s 2023 Sustainability Report, published on the HICL

website on the same day as this report).

HICL began voluntarily reporting against a subset of the 11 TCFD

disclosure recommendations in its 2020 Annual Report and Financial

Statements and has reported against all 11 recommendations since

2021. We confirm that we have complied with the requirements of

LR 9.8.6R, by including climate-related financial disclosures that

are consistent with the four TCFD pillars and the 11 recommended

disclosures that are set out on page 72. We also acknowledge that

there is always scope for improvement, and that there are certain

areas where the Company is in the process of gathering and

publishing more data.

Governance

For HICL to act in a sustainable manner, it is critical that its Board,

Investment Manager and portfolio companies are accountable for

their actions. HICL’s robust and ambitious corporate governance

framework helps to ensure this is delivered and provides investors

with transparency on the Company’s sustainability strategy and the

wider impact environmental and societal impact of their investment,

including in relation to climate change.

The Board has overall responsibility for the oversight of HICL’s

sustainability risks and opportunities, of which climate change is an

important subset. The Board and the Investment Manager meet

on a quarterly basis, during which they review the risks facing the

Company, including risks related to climate change.

Sustainability is also a key topic at the Board’s annual

strategy meetings.

Some of the Board’s Committees also have key roles:

– The Risk Committee oversees and challenges InfraRed’s risk

management processes and analysis, and has a specific remit to

examine ‘horizon’ risks such as the long-term consequences of

climate change;

– The Management Engagement Committee considers how

HICL service providers, including InfraRed, adhere to HICL’s

Sustainability Policy;

– The Audit Committee reviews the Company’s approach to

disclosures, including those relating to climate change.

In relation to climate-related opportunities, the Investment Manager

presents a review of the market to the Board on a quarterly basis.

As part of this review, potential new acquisition opportunities are

highlighted, including those which directly support the transition

toalow-carbon economy.

Although management of the portfolio, as well as investment

decisions within agreed parameters, is delegated to InfraRed as

the Investment Manager, the Board has overall responsibility for

theCompany’s investment policy.

Further information on HICL’s corporate governance framework is

provided on page 74 of this report. A diagram setting out HICL’s

reporting and risk management framework is set out on page 53.

TCFD

HICL Annual Report 202368

In FY21, InfraRed engaged Willis Towers Watson to conduct a

detailed climate change impact assessment, the scope of which

included the entirety of HICL’s portfolio

. All new investments made

since the portfolio-wide exercise was completed have also been

subject to a climate change impact assessment as part of InfraRed’s

pre-investment process (as set out in InfraRed’s 2023 Sustainability

Report). The results of the portfolio-wide assessment are still

considered to be valid for the current financial year.

The Investment Manager has identified that in the short term, based

on current climate conditions, a subset of assets in which HICL has

invested are exposed to acute and chronic physical risks arising from

different extreme weather events, but the overall exposure is limited,

and mitigations are in place. The Company may also be exposed to

transition risks if there are rapid, unexpected changes to government

policy, which are more likely under the 1.5°C scenario as set out

below. In general, the portfolio-level findings of the climate change

impact assessment demonstrate that the Company’s strategy is

highly resilient to both physical and transition risks associated with

climate change.

The schematic below sets out the process undertaken to identify and

analyse climate-related risks under a range of scenarios. The process

and methodology undertaken by the Manager to analyse potential

physical and transition risks consists of a five-stage process:

Process and methodology

The flow chart below sets out the process undertaken by the Investment Manager and WTW:

Identify physical risks

based on current conditions

Analysis of exposure to 11 different physical risks

based on current conditions

Each risk ranked 1-5 based on relative severity and frequency

Climate hazard index calculated for each asset

Identify physical risks

based on futureconditions

Additional exposure rankings for five

of the 11 physical risks based on:

– Business as usual (4°C above pre-industrial levels)

– Energy transition/net zero (1.5°C above pre-industrial levels)

Quantify physical

climate risks

For flooding and wind storms, potential financial exposure modelled

For each asset, statistical simulation undertaken 10,000 times

Average annual loss (excluding mitigation/insurance) estimated for each asset

Assess transition

climate risks

Potential impacts of lower-carbon transition, broken down by sector and geography

Focus on UK and EU regulations and market trends with highest impact

Opportunities as well as risks identified

Undertake project level

‘deep dives’

16 deep dives equivalent to over 45% of portfolio value selected by InfraRed based on:

– Climate hazard index score

– Potential financial impact, weighted by concession length and HICL ownership

Key outputs

Overall level of exposure to physical risks based on

current and future conditions (by project value), assuming

no mitigation

Potential financial exposure from flooding/wind storm

(project-level costs, 100% level) assuming no mitigation

Transition risks and opportunities by sector

Next steps

Flow down of climate risk information to project company

management teams

Update of operational procedures and processes at project

level if required

Focused engagement with clients

Reporting back to HICL Risk Committee

1 Excluding the Company’s investments in the Defence Sixth Form College and A13 senior bonds

2 Coastal flood, river flood, heat stress, drought stress, tropical cyclone, winter storm, hailstorm, lightning, wildfire, flash flood

3 Coastal flood, river flood, heat stress, drought stress, tropical cyclone (4°C scenario only)

Strategy

Overview Strategic Report Governance Financials HICL Annual Report 2023 69

Physical risks analysis:

The primary impact of climate change for HICL is likely to be borne

by its portfolio companies: increased operating costs or reduced

revenues as a result of physical risks materialising. In many cases

physical mitigation measures already exist and there is a degree of

contractual protection from increased costs to implement further

measures. Such risks are likely to be exacerbated under a 4°C

scenario, whereas under a 1.5°C scenario assets are more likely

to be impacted by transition risks.

Under a ‘current’ climate scenario, only eight assets have an

unmitigated physical impact index above 3.0 (medium) This rises to

19 assets under a 4°C scenario, demonstrating the resilience of the

portfolio even in the event of extreme climate change.

Beyond 2040, based on a 4°C scenario, there is slightly increased

exposure to physical risks. Under a 1.5°C scenario the impact of

transition risks could be greater, but many assets have inherent

protection as they provide vital services and have low direct

emissions. Conversely, there is likely to be greater scope to take

advantage of opportunities arising from the energy transition,

such as asset repurposing and additional investment.

HICL’s main physical risk exposures based on both current and

future conditions are to winter storms, river flooding and coastal

flooding, which is expected based on the weighting of the portfolio

towards Northern Europe. Geographical location is also an inherent

mitigant against other physical risks such as drought and heat

stress. Although some assets have very high exposure to flooding,

significant physical mitigation already exists in the form of flood

defences, particularly in low-lying countries such as the Netherlands.

The potential annual loss across the portfolio from windstorms and

flooding is not expected to be material, with mitigation measures

further reducing any impact in ‘severe’ years. HICL’s assets benefit

from comprehensive insurance policies, which include physical

damage as a result of climate-related events.

Transition risks analysis:

Examples of transition risks under a 1.5°C scenario include increased

public transport use, a reduction in overall journeys and car sharing,

which could impact some of HICL’s demand-based assets. Such a

scenario is also likely to present a number of opportunities for the

Company at both the asset and market level.

A transition to a low-carbon economy also presents a number of

opportunities. The primary example is the need for related investment

such as rapid charging or retrofitting of energy efficiency solutions.

A key tenet of HICL’s vision is to support sustainable modern

economies by investing in assets linked to the energy transition,

and a 1.5°C scenario is likely to increase the number of investable

opportunities in this space.

During the year, a review of insurance costs was undertaken across

the portfolio. As is common with real assets, insurance is one of the

primary risk mitigants against the financial impact of physical damage.

In the future, and particularly under a 4°C scenario, it is possible that

the cost of obtaining insurance increases as a result of the increased

likelihood of severe weather events, although this is likely to be limited

to a small number of assets. The impact of climate change risks on

future insurance premia is factored into the assumptions used in the

valuation of each of HICL’s assets.

TCFD Category Climate-related trend Potential financial impact Potential materiality

Physical Flooding Risk: damage to physical structures resulting in unavailability / increased cost 4°C – low

1.5°C – low

Physical Winter Storm Risk: damage to physical structures resulting in unavailability / increased cost 4°C – low

1.5°C – low

Physical Drought Risk: Usage restrictions or increased costs at Affinity Water

Opportunity: Increased long-term investment required at Affinity Water

4°C – med

1.5°C – low

Transition Retrofitting of energy

efficiency solutions

Opportunity: variation contracts awarded for existing PPP assets 4°C – low

1.5°C – low

Transition Increased public

transport use

Risk: Lower traffic using toll roads

Opportunity: greater usage of HS1

4°C – low

1.5°C – med

Transition Move towards electric

vehicles & trains

Opportunity: Co-located EV charging at HICL’s toll road projects

Opportunity: Long-term use case for XLT

4°C – low

1.5°C – low

Transition Increased need for

renewable energy

Opportunity: Long-term use case for OFTOs 4°C – low

1.5°C – low

Transition Remote working Risk: reduced traffic volumes using demand-based transport assets

Opportunity: greater take-up and adoption of technology benefiting

communications assets

4°C – low

1.5°C – med

Summary of material risks and opportunities:

HICL Annual Report 202370

How we identify and assess climate risk

For new acquisitions, climate-related risks are considered throughout

the investment process by the Investment Manager. At the deal

screening phase, the identification of climate-related risks (physical

or transition) and the potential impact (positive or negative) are

mandatory requirements. Furthermore, the completion of a climate

change risk assessment prior to entering into a transaction is now

aformal condition of approval.

For existing projects, risks have been identified and assessed through

a detailed climate change impact assessment, as set out in the

section above. The Company’s portfolio companies use the results of

this assessment to undertake proactive monitoring and assessment

at the project level.

Over the year, InfraRed’s Asset Management team engaged with the

management teams of HICL’s portfolio companies. Using the climate

change impact assessment, the vast majority of HICL’s portfolio

companies have adopted the findings by discussing climate-related

risks and opportunities at board level, updating risk matrices, and

developing and implementing mitigation and resilience strategies

as appropriate.

How we manage our risks

InfraRed’s Asset Management team ensures the timely reporting

of project-specific risks relating to climate change to the HICL Fund

Management team as and when they arise; the HICL Investment

Committee also undertakes a formal review of all project-specific

riskson a quarterly basis. This process ensures that material

climate-related risks feed into the Investment Manager’s quarterly

reporting to the Risk Committee, which in turn reports to the Board.

The Company’s positioning with respect to a transition to

a low-carbon economy is primarily considered through the

Investment Manager’s active approach to asset management

andportfolio construction.

HICL’s core infrastructure investments provide essential services to

communities, and as a result are inherently well positioned. For HICL’s

PPP projects, energy use is driven by the client, with the portfolio

company generally responsible for maintaining the equipment which

provides the building’s heating, cooling and lighting. Any changes

to these systems required under a 1.5°C scenario would usually be

accounted for under existing lifecycle budgets or alternatively treated

as a contract variation. HICL’s GDP-correlated demand-based assets

such as toll roads, which may be exposed to transition risks and

opportunities under a 1.5°C scenario, benefit from strong strategic

positioning. The Company also invests directly in assets which are

likely to benefit from a low-carbon transition, such as OFTOs.

More broadly, InfraRed’s exclusion policy specifically covers carbon-

intensive industries such as coal, oil and gas (where not aligned to

a low-carbon transition) and HICL does not invest in assets whose

primary purpose is electricity generation.

Sustainability considerations are incorporated into the Investment

Manager’s risk management framework, which is used as the basis of

risk reporting to the HICL Risk Committee. In particular, sustainability

features as a material risk in the following risk classes:

– Political risk: in particular, policies associated with the transition to

net zero carbon emissions;

– Operational risk – execution: through transaction due diligence and

investment decisions; and

– Portfolio performance risk: sustainability risks can affect operational

performance, including transitional and physical risks associated

with adverse climate change.

Climate change risk is an explicit building block of portfolio

performance risk. Individual project companies submit regular

progress reports to InfraRed on the mitigation measures they are

taking in response to the climate change impact assessment. In turn,

this enables the HICL Risk Committee to consider the overall impact

and opportunities of climate change at fund level.

Further details are provided in the Risk & Risk Management section,

starting on page 53 of this report.

Risk management

Overview Strategic Report Governance Financials HICL Annual Report 2023 71

Metrics and targets

Other metrics and targets

Our specific climate and environment-related metrics and targets, as set out in this report have been made considering the TCFD

recommendations and are set out below:

METRIC Current year Previous year

% PORTFOLIO

REPORTING PAI? TARGETS

Carbon Reduction Initiatives 83% N/A

90%

Net zero targets:

50%

Portfolio coverage

90%

Engagement threshold by 2030

Water Reduction Initiatives 92% 88% 91%

For portfolio companies where

wehaveoperational control:

100%

of portfolio companies with material

water and consumption to have

reduction initiatives in place by 2025

Waste Reduction Initiatives 92% 93% 90%

Positive Biodiversity Impacts 83% 55% 90%

Climate Change risk register

andBoard meetings

91% 91% 90%

Total Attributable GHG

Emissions (Scopes 1, 2 & 3)

146,190

tCO

63,821

tCO

(2019 data)

100%

90%

of emissions to be subject to direct or

collective engagement and stewardship

actions by 2030

1 2023 is HICL’s first year of reporting Carbon Reduction Initiatives for the purpose of aligning to SFDR PAIs

2 A more detailed explanation of HICL’s net zero targets and methodology can be found on page 37

3 Note: this target relates to portfolio companies where we have operational control in relation to setting and implementing water and waste reduction initiatives. Where we do not have operational

control (such as PPP/PFI projects), we will still engage on these initiatives

4 100% of HICL’s portfolio by valuation has emissions data reflected in the Total GHG Emissions calculations. Of that 100%, portfolio companies representing 97% of the portfolio valuation provided

some asset-related data to calculate emissions and the remaining 3% was estimated based on proxy data. For more information on HICL’s methodology for estimating and reporting GHG

emissions, please see pages 146-153

PAI indicators – Mandatory

PAI indicators – Voluntary

GHG emissions

HICL has disclosed the combined Scope 1, 2 and 3 greenhouse gas

emissions of its entire portfolio for calendar year 2022. These can be

found on page 146 of this report. The accurate measurement and

disclosure of emissions forms an important part of InfraRed’s wider

strategy relating to InfraRed’s net zero commitments, further details

of which are provided on page 37 of this report. The enhanced data

collection exercise as part of InfraRed’s net zero commitment will

ensure that Scope 1, 2, and 3 emissions are routinely captured for

allprojects in future years.

Due to the nature of its business, HICL has no Scope 1 or Scope

2 greenhouse gas emissions. The Company’s Scope 3 emissions

primarily relate to the emissions of its portfolio companies, although

there is also a small contribution from office use and business travel

(which is offset using an accredited scheme).

This year, the significant data collection exercise undertaken as part

of InfraRed’s net zero commitment allows for significantly enhanced

disclosure. More details on combined Scope 1, 2 and 3 greenhouse

gas emissions of HICL’s entire portfolio for 2022 can be found on

page 146 of this report.

Emissions (Attributable basis)

Year ended

31 December 2022

Scope 1 Nil

Scope 2 Nil

Scope 3 146,190 tCO

Weighted average carbon intensity (tCO

e/£m) 284 tCO

Flash Flood

Wildfire

Tornado

Lightning

Hailstorm

Winter storm

Tropical Cyclone

Drought Stress

Heat Stress

River Flood

Coastal Flood

None

0 20 40 60 80 100

Very lowLowMediumHighVery high

Portfolio exposure (by number of projects)

HICL Annual Report 202372

Net zero

Currently, 17% of the portfolio by value is fully aligned to net zero.

This represents Affinity Water, XLT, the OFTOs, Dutch High Speed Rail

Link and HS1. Affinity and HS1 have already committed to achieve

net zero by 2030 and InfraRed’s commitment to achieve net zero for

HICL’s entire portfolio by 2050. In addition, other assets inherently

outperform required decarbonisation trajectory for their sector, and

we will ensure that this percentage rises to 100% over time.

As set out in HICL’s Sustainability Report 2023, the Company has set

interim targets relating to net zero:

Portfolio Coverage: 50% of HICL’s portfolio to be net zero, aligned

to net zero, or aligning to net zero by 2030

Engagement Threshold: 90% of all portfolio company emissions

to be subject to direct or collective engagement and stewardship

actions by 2030

The Company commits to reviewing these targets every five years

ata minimum.

As of 31 March 2023, 20% of the portfolio is currently invested

in climate solutions. While the Company anticipates that this will

grow over time and commits to maintaining transparency on the

percentage of the portfolio invested in climate solutions, the Net Zero

Investment Framework for Infrastructure recognises the difficulty

in setting a Climate Solutions target for funds of HICL’s nature.

The Company is therefore not setting a formal target at this time.

Recommendation Recommended Disclosure Pages

Governance

– Describe the board’s oversight of climate-related risks and opportunities.

– Describe management’s role in assessing and managing climate-related

risks and opportunities.

Pages 53 to 54, 62

to 63, 67, 74

Strategy

– Describe the climate-related risks and opportunities the organization

has identified over the short, medium, and long term.

– Describe the impact of climate-related risks and opportunities

on the organization’s businesses, strategy, and financial planning.

– Describe the resilience of the organization’s strategy, taking into consideration

different climate-related scenarios, including a 2°C or lower scenario.

Pages 68 to 69

Risk Management

– Describe the organization’s processes for identifying and assessing

climate-related risks.

– Describe the organization’s processes for managing climate-related risks.

– Describe how processes for identifying, assessing, and managing climate-related

risks are integrated into the organization’s overall risk management.

Pages 53 to 54, 62

to 63, 67, 74

Metrics and Targets

– Disclose the metrics used by the organization to assess climate-related risks

and opportunities in line with its strategy and risk management process.

– Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG)

emissions and the related risks.

– Describe the targets used by the organization to manage climate-related risks

and opportunities and performance against targets.

Pages 71 to 72

Metrics and targets continued

The table below sets out the 11 TCFD recommendations, and where the related information can be found.

The chart below sets out the portfolio exposure (by number of projects) to physical climate

risks based on current climate conditions, without mitigation:

73HICL Annual Report 2023FinancialsGovernanceStrategic ReportOverview

Governance

What’s in this section

Board and Governance 74

Board of Directors 76

The Investment Manager 78

Corporate Governance Statement 79

Audit Committee Report 83

Report of the Directors 89

Statement of Directors’ Responsibilities 93

Directors’ Remuneration Report 94

HICL Annual Report 202374

Board and Governance

Operational structure

HICL Infrastructure PLC (“HICL”, or the “Company” and, together

with its subsidiaries, the “Group”) is a registered investment

company with an independent Board of Directors. Its shares have

a premium listing on the Official List of the UK Listing Authority and

trade on the main market of the London Stock Exchange.

HICL’s portfolio comprises over 100 infrastructure investments.

The Company’s strategy relies on the expertise of its Investment

Manager, InfraRed Capital Partners Limited (“InfraRed”) and is

centred around protecting and enhancing the value of the existing

portfolio, in addition to sourcing new, appropriately priced assets.

HICL has a 31 March year end, announces its full year results in

May and interim results in November. It also publishes two Interim

Update Statements each year, normally in February and July.

Equity

Independent Directors

– Governance

– Oversight

– Strategy

Investment Manager

– HICL’s AIFM

– Management

– Strategy

– Reporting

– Acquisition Pipeline

– Asset Management

– Risk and Portfolio

Management

Administrator and

Company Secretary

– Aztec Financial

Services (UK) Limited

Advisers and

Service Providers

– Legal

– Corporate Broking

– Public Relations

HICL’s Shareholders

HICL Infrastructure 2 S.a.r.l

Infrastructure Investments LP

(English limited partnership)

HICL’s Portfolio Companies

HICL Infrastructure PLC

AIF subject to the full scope of the AIFMD

(UK Investment Trust Company)

Portfolio of underlying investments

Dividends

Interest + Principal

Overview Strategic Report Governance Financials HICL Annual Report 2023 75

Group structure

Investments are made via the Corporate Subsidiaries, which

comprise a group structure involving a Luxembourg-domiciled

investment company and an English limited partnership (the

“Partnership”). HICL’s assets are therefore held indirectly through

theCorporate Subsidiaries and any subsidiaries are wholly owned

bythe general partner of the Partnership on behalf of the Partnership.

InfraRed Capital Partners Limited (“InfraRed”) has been appointed

the Investment Manager of HICL and Operator of the Partnership.

InfraRed has been appointed AIFM in accordance with the AIFM

Directive, and also provides the registered office of HICL.

The Company invests in infrastructure investments indirectly via the

Corporate Subsidiaries:

– HICL Infrastructure 2 S.a.r.l., a société à responsabilité limitée

established in Luxembourg, is the sole limited partner in the

Partnership, an English limited partnership which has a special

purpose vehicle, the General Partner, as its general partner.

The General Partner is a wholly owned indirect subsidiary of

InfraRed Partners LLP. The General Partner, on behalf of the

Partnership, has appointed InfraRed as Operator of the Partnership.

HICL Infrastructure 2 S.a.r.l. invests the contributions it receives in

capital contributions and partner loans to the Partnership, which

acquires and holds the infrastructure investments.

– HICL Infrastructure 2 S.a.r.l. has an independent board, on which

a HICL Board Director sits, and takes advice on administration

matters from RSM Tax & Accounting Luxembourg Sàrl.

Aztec Financial Services (UK) Limited is the Administrator to HICL

andalso provides company secretarial services.

HICL’s infrastructure investments are registered in the name of the

General Partner, the Partnership or wholly owned subsidiaries of

the Partnership.

Each of the underlying investments is made by a portfolio company

(not shown in the structure diagram on the previous page), which

through its contractual structure ensures no cross-collateralisation

ofthe liabilities (being, principally, the debt repayment obligations).

The Board and the Committees

As at 31 March 2023, the Board of HICL comprised eight

independent, non-executive Directors whose role is to manage HICL

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, sets policies,

agrees levels of delegation to key service providers and monitors

their activities and performance (including, specifically, that of the

Investment Manager) against agreed objectives. The Board will

take advice from the Investment Manager, where appropriate – for

example, on matters concerning the market, the portfolio and new

acquisition opportunities.

The Board meets regularly – at least five times a year, each time for

two consecutive days – for formal Board and Committee meetings.

One of these Board meetings is devoted to considering the strategy

of HICL, both in terms of potential acquisitions and the management

of the current portfolio. There are also a number of ad hoc meetings

dependent upon business needs. In addition, the Board has

formed six Committees (Audit, Management Engagement, Market

Disclosure, Nomination, Remuneration and Risk) which manage risk

and governance.

Management of the portfolio, as well as investment decisions within

agreed parameters, is delegated to InfraRed as the Investment

Manager, which reports regularly to the Board.

At the quarterly Board and Committee meetings, the operating

and financial performance of the portfolio, its valuation and the

appropriateness of the risk and controls are reviewed.

HICL Annual Report 202376

Board of Directors

* Assuming a continuation of the years of service as a Director of HICL Infrastructure Company Limited

** Certain of the Directors maintain additional directorships that are also listed but not actively traded on various exchanges. Details may be obtained from the Company Secretary

Mr Mike Bane

Chair of Board of Directors

Chair of Nomination

Committee

Background and experience

Mike Bane (British) is a chartered accountant and retired

from public practice in June 2018. Mike has been a Guernsey

resident for over 20 years. He has more than 35 years of audit

and advisory experience in the asset management industry

including in relation to infrastructure investment companies.

He led EY’s services to the asset management industry in the

Channel Islands and was a member of EY’s EMEIA Wealth

and Asset Management Board. Prior to EY, Mike was at PwC,

in both London and Guernsey. Mike was President of the

Guernsey Society of Chartered and Certified Accountants from

2015 to 2017. Mike graduated with a BA in Mathematics from

the University of Oxford and is a long-standing member of the

Institute of Chartered Accountants in England and Wales.

Date of appointment*

Appointed to the Board on 1 July 2018

Other public company directorships

(listed in London unless noted otherwise)**:

– Apax Global Alpha Limited

– Abrdn Property Income Trust Limited (formerly Standard Life

Investments Property Income Trust Limited)

Ms Rita Akushie

Chair of Audit Committee

Background and experience

Rita Akushie (British) has more than 20 years’ experience

acting in leadership and finance roles for housing associations

and charities, including at Newlon Group, where she was

Chief Financial Officer and then Deputy Chief Executive; and

subsequently as Group Finance Director for Thames Valley

Housing. Rita has recently served as CFO for Cancer Research

UK, and currently serves as CFO & Pro Vice-Chancellor

(Operations) for the University of London. Rita graduated with

a BA in Economics and French from the University of Ghana.

She is a Fellow of the Institute of Chartered Accountants

of England and Wales and a Fellow of the Association of

Corporate Treasurers.

Date of appointment

Appointed to the Board on 1 January 2020

Other public company directorships

(listed in London unless noted otherwise)**:

– None

Mr Frank Nelson

Senior Independent Director

Chair of Management

Engagement Committee

Background and experience

Frank Nelson (British), resident in the UK, is a qualified

accountant. He has over 25 years of experience in the

construction, contracting, infrastructure and energy sectors.

He was appointed to the Board on 1 June 2014. Frank was

Finance Director of construction and house-building group

Galliford Try plc from 2000 until October 2012. He was

previously Finance Director of Try Group plc from 1987,

leading the company through its flotation on the London Stock

Exchange in 1989 and the subsequent merger with Galliford

in 2001. Following his retirement, Frank was appointed as the

Senior Independent Director of Eurocell and as the Chair of Van

Elle Holdings. He is also Chair of a privately owned contracting

and property development group.

Date of appointment*

Appointed to the Board 1 June 2014

Other public company directorships

(listed in London unless noted otherwise)**:

– Eurocell PLC

– Van Elle Holdings PLC

Ms Liz Barber

Background and experience

Liz Barber (British) was previously at Kelda Group (Yorkshire

Water) where she served as Chief Executive Officer from 2019

until 2022, having previously served as Chief Financial Officer

from 2010. Prior to that Liz held a number of senior partner

roles with Ernst & Young.

Liz is a chartered accountant and graduated with a BSc in

Geography from the University of Leeds, where she now

serves as Deputy Chair, and is the Chair of the Yorkshire and

Humber Climate Commission. Liz is a non-executive director

of Cranswick plc and was formerly a non-executive director of

KCOM Plc, a UK fibre broadband provider.

Date of appointment*

Appointed to the Board on 1 September 2022

Other public company directorships

(listed in London unless noted otherwise)**:

– Cranswick plc

– Renew Holdings plc

Overview Strategic Report Governance Financials HICL Annual Report 2023 77

Ms Frances Davies

Chair of Remuneration

Committee

Background and experience

Frances Davies (British) has more than 30 years of experience

across various roles within the banking and asset management

industries. Since 2007, she has been a partner of Opus

Corporate Finance, a corporate finance advisory business.

Frances is also on the Aegon UK plc Group Board and the

Committee of the Federated Hermes Property Unit Trust.

Previously Frances served as Head of Global Institutional

Business at Gartmore Investment Management. She had also

been a Director at Morgan Grenfell Asset Management and

SG Warburg. Ms Davies graduated with a MA in Philosophy,

Politics and Economics and a MPhil in Management Studies,

both from Oxford University.

Date of appointment

Appointed to the Board on 1 April 2019

Other public company directorships

(listed in London unless noted otherwise)**:

– Supermarket Income REIT PLC

Mr Simon Holden

Chair of Risk Committee

Background and experience

Simon Holden (British) is a Chartered Director (CDir) accredited

by the Institute of Directors. Previously an investment director

at Terra Firma Capital Partners (Candover Investments prior to

that), Simon has been an active independent director to listed

investment company, private equity fund and trading company

boards since 2015. In addition, Simon acts as the pro-bono

Business Advisor to Guernsey Ports, a States of Guernsey

enterprise that operates all of the Bailiwick’s critical airport and

harbour infrastructure. Simon is a member of several industry

interest groups in both financial services and intellectual

property and graduated from the University of Cambridge with

an MEng and MA (Cantab) in Manufacturing Engineering.

Date of appointment*

Appointed to the Board 1 July 2016

Other public company directorships

(listed in London unless noted otherwise)**:

– Hipgnosis Songs Fund Limited

– JPMorgan Global Core Real Assets Limited

– Chrysalis Investments Limited

– Trian Investors 1 Limited (traded on the Specialist Funds

Segment of the LSE) – retired 26 April 2023

Mr Martin Pugh

Background and experience

Martin Pugh (British) has over 35 years in the infrastructure

industry, spanning roles in construction, development,

investment, asset management and strategic projects.

Most recently he has provided executive management support

to several major infrastructure projects and prior to this he held

senior executive positions within Bilfinger Project Investments,

overseeing the investment performance of assets in multiple

sectors and across the UK and Europe.

Martin graduated in Civil & Structural Engineering and is a

Chartered Engineer.

Date of appointment*

Appointed to the Board on 1 September 2022

Other public company directorships

(listed in London unless noted otherwise)**:

– None

Mr Kenneth D. Reid

Background and experience

Kenneth D. Reid (British), resident in Singapore, has

more than

35 years of international experience in the sectors

of construction, development and infrastructure investment.

Working initially with Kier Group, and then from 1990 with

Bilfinger Berger AG, he has been a project leader and senior

management executive responsible for businesses and

projects across all continents. From 2007 to 2010, Ken served

as a member of the Group Executive Board of Bilfinger Berger

AG. He graduated in Civil Engineering from Heriot-Watt

University with First Class Honours (BSc), and subsequently

from Edinburgh Business School with an MBA. Ken is a

Chartered Engineer, a non-executive director of Sicon Limited

and James Walker Group Limited, and is a member of the

Singapore Institute of Directors.

Date of appointment*

Appointed to the Board 1 September 2016

Other public company directorships

(listed in London unless noted otherwise)**:

– None

HICL Annual Report 202378

InfraRed is the Investment Manager to HICL. In addition, InfraRed

is the Operator of the Partnership by the General Partner, on behalf

of the Partnership. Under the terms of the Limited Partnership

Agreement, the Operator has full discretion to acquire, dispose of

or manage the assets of the Partnership, subject to investment

guidelines set out by the Board.

InfraRed is part of the InfraRed Group, an infrastructure investment

business, managing a range of infrastructure funds and investments.

InfraRed’s infrastructure investment team 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.

Since 1990, the InfraRed Group (including predecessor organisations)

has launched 22 investment funds investing in infrastructure and

property, including HICL.

Since July 2020, InfraRed has been owned by Sun Life Financial Inc.

(together with its subsidiaries and joint ventures, “Sun Life”), although

InfraRed continues to operate as a distinct business under SLC

Management, Sun Life’s alternatives asset management business.

The Sun Life acquisition has continued to provide further support

to InfraRed in its role as Investment Manager to HICL. Sun Life

is a leading international financial services organisation providing

insurance, wealth and asset management solutions to individual and

corporate clients. As of 31 March 2023, Sun Life had total assets

under management of C$1,325bn. For more information please visit

www.sunlife.com.

The InfraRed Group currently manages eight infrastructure funds

(including HICL). The InfraRed Group currently has a staff of over 190

employees and partners, based mainly in offices in London and with

regional offices in New York, Seoul and Sydney. Its infrastructure

team comprises over 100 professional staff who have, on average,

c. 11 years of relevant industry experience.

Within the infrastructure team, there is:

– a Management team with overall responsibility for the activities

provided to HICL;

– an Origination and Execution team responsible for business

development and sourcing new investments;

– an Asset Management team responsible for managing the portfolio

of investments; and

– a Portfolio Management team responsible for financial reporting,

cash flow management, debt, foreign exchange hedging and tax.

Five senior members of the InfraRed team make up InfraRed’s

Investment Committee on behalf of HICL. The Investment Committee

has combined experience of over 150 years in making infrastructure

investments and managing investments and projects.

Further details on the InfraRed Group can be found at www.ircp.com.

Under the terms of the Investment Management Agreement, InfraRed

is entitled to a fixed management fee of £100,000 per annum,

together with all reasonable out-of-pocket expenses. InfraRed will not

receive any directors’ or other fees from any project company.

InfraRed, in its capacity as Operator, and the General Partner are

together entitled to annual fees calculated on the following basis and

in the following order:

(i) 1.1 per cent of the proportion of the Adjusted Gross Asset Value

of HICL’s investments which have a value of up to (and including)

£750m in aggregate;

(ii) 1.0 per cent of the proportion of the Adjusted Gross Asset Value

of HICL’s investments that is not accounted for under which,

together with the investments under (i) above, have an Adjusted

Gross Asset Value of up to (and including) £1.5bn in aggregate;

(iii) 0.9 per cent of the proportion of the Adjusted Gross Asset Value

of HICL’s investments not accounted for under (i) or (ii) above

which, together with investments under (i) and (ii) above, have an

Adjusted Gross Asset Value of up to (and including) £2.25bn;

(iv) 0.8 per cent of the proportion of the Adjusted Gross Asset Value

of HICL’s investments not accounted for under (i), (ii) or above

which, together with investments under (i), (ii) and above, have an

Adjusted Gross Asset Value of up to (and including) £3.0bn; and

(v) 0.65 per cent of the proportion of the Adjusted Gross Asset

Value of HICL that is not accounted for under (i), (ii), (iii) above.

There are no acquisition or performance fees payable.

These fees are calculated and payable quarterly in arrears and are

based on the Adjusted Gross Asset Value of HICL’s assets at the

beginning of the period concerned, adjusted on a time basis for

acquisitions and disposals during the period.

The Investment Management Agreement may be terminated by either

party giving the other party thirty-six (36) months’ written notice (or,

at HICL’s option, making a payment in lieu of such notice). InfraRed’s

appointment as Operator has corresponding termination provisions,

and if InfraRed’s appointment as Investment Manager is terminated it

may unilaterally terminate its appointment as Operator, and vice versa.

The Investment Manager

Overview Strategic Report Governance Financials HICL Annual Report 2023 79

Introduction

The Board recognises the importance of a strong corporate

governance culture that meets the requirements of the UK

Governance framework, including the UK Listing Authority as well

as other relevant bodies such as the Association of Investment

Companies (“AIC”) of which HICL is a member. The Board has put

in place a framework for corporate governance which it believes

is appropriate for an investment company. All Directors contribute

to the Board discussions and debates. The Board believes in

providing as much transparency for investors and other stakeholders

as is reasonably possible within the boundaries of client and

commercial confidentiality.

AIFM Directive

The Alternative Investment Fund Managers Directive seeks to regulate

AIFMs and imposes obligations on Managers who manage alternative

investment funds (“AIF”) in the EU or who market shares in such

funds to EU investors. HICL is categorised as an externally managed

AIF for the purposes of the AIFM Directive. In order to maintain

compliance with the AIFM Directive, HICL complies with various

organisational, operational and transparency obligations, including

the pre-investment disclosure information required by Article 23 of the

AIFM Directive.

Non-mainstream pooled investments

HICL conducts its affairs as an investment trust. On this basis,

the Ordinary Shares should qualify as an “excluded security”

and therefore be excluded from the FCA’s restrictions in COBS

4.12 of the FCA Handbook that apply to non-mainstream pooled

investment products.

The AIC Code of Corporate Governance

As a member of the AIC, the Board has considered the Principles and

Provisions of the 2019 AIC Code of Corporate Governance (the “AIC

Code”), a framework of best practice in respect of the governance

of investment companies. The 2019 AIC Code applies to accounting

periods beginning on or after 1 January 2019.

The AIC Code addresses the Principles and Provisions set out in the

UK Corporate Governance Code (the UK Code), as well as setting

out additional Provisions on issues that are of specific relevance to

investment companies. The Board considers that reporting against

the Principles and Provisions of the AIC Code, which has been

endorsed by the Financial Reporting Council, provides more relevant

information to shareholders. HICL has complied with the Principles

and Provisions of the AIC Code.

The AIC Code is available on the AIC website (www.theaic.co. uk

It includes an explanation of how the AIC Code adapts the Principles

and Provisions set out in the UK Code to make them relevant for

investment companies.

Board

As at 31 March 2023, the Board comprised eight non-executive

Directors. In accordance with Provision 10 of the AIC Code all of the

non-executives who served during the year are independent of the

Investment Manager. The Chair, Mike Bane, met the independence

criteria of the AIC Code Provision 11 upon appointment and has

continued to meet this condition throughout his term of service.

Although not a requirement of the AIC Code, in accordance with

guidance in Provision 11, the Board has a Senior Independent

Director, Frank Nelson. Frank met the independence criteria of

the AIC Code Provision 11 upon appointment and has continued

to meet this condition throughout his term of service. Being non-

executive Directors, none of the Directors have a service contract

withthe Company.

The Articles of Incorporation provide that each of the Directors

shall retire at each Annual General Meeting in accordance with

Provision 23 of the AIC Code. All eight Directors intend to retire and

the continuing Directors will offer themselves for re-election at the

forthcoming Annual General Meeting in July 2023.

Corporate Governance Statement

Board attendance

Formal Board

Meetings (5)

Audit

Committee (9)

Management

Engagement

Committee (1)

Market

Disclosure

Committee (1)

Nomination

Committee (3)

Remuneration

Committee (2)

Risk

Committee (4)

Mr M Bane* 5 (3c) 9 1 1(c) 3 (1c) 2 (1c) 4

Mr F Nelson 5 8 1 (c) 1 3 2 4

Ms R Akushie 5 9 (6c) 1 1 3 2 4

Mr S Holden 5 8 1 1 3 2 4 (c)

Mr K Reid 5 7 1 1 3 2 4

Ms F Davies 5 9 1 1 3 2 (1c) 4

Joined 1 September 2022:

Ms E Barber 3 4 1 1 1 1 2

Mr M Pugh 3 6 1 1 1 1 2

Retired following 2022 AGM:

Mr I Russell 2 (2c) 3 – – 2 (2c) 1 2

Mrs S Farnon 2 3 (c) – – 2 1 2

* Mr Bane is not a member of the Audit Committee, but is invited to attend

1 www.theaic.co.uk/system/files/policy-technical/AIC2019AICCodeofCorporateGovernanceFeb19.pdf

HICL Annual Report 202380

The Board believes that the composition of the Board and its Committees

reflects a suitable mix of skills and experience and that the Board,

as a whole, and its Committees functioned effectively during the last

12 months. An external review was commissioned in 2021.

The Board is scheduled to meet at least five times a year and

between these formal meetings there is regular contact with the

Investment Manager, the Secretary and the Company’s Joint Brokers.

The Directors are kept fully informed of investment and financial

controls, and other matters that are relevant to the business of the

Company that should be brought to the attention of the Directors.

The Directors also have access, where necessary in the furtherance

of their duties, to independent professional advice at the expense of

the Company.

The attendance record of Directors for the year to 31 March 2023 is

set out on previous page.

During the period to 31 March 2023 a further seven ad hoc and

Committee meetings of the Board took place.

In addition to the statutory matters discussed at each quarterly

Board meeting, the principal focus is on the reports provided by the

Investment Manager, as well as those put forward by HICL’s brokers

and financial public relations (“PR”) Agent. These are all standing

agenda items.

Papers are sent to Directors electronically, normally at least a week

in advance of the Board meetings by the Company Secretary.

Board papers include:

– a review of the infrastructure market detailing key developments;

– investment activity in the period and the pipeline of potential new

investment opportunities;

– a review of portfolio performance in the period with material issues

identified and discussed;

– a review of any sustainability issues and Company sustainability

initiatives from the period;

– a review of any health and safety matters in the period;

– a detailed financial review, including detailed management

accounts, valuation and treasury matters; and

– reports from HICL’s brokers and from the financial PR company.

Matters relating to the Company’s risk management and internal

control systems (including associated stress tests), are considered by

the Risk Committee (which, in turn, reports any significant matters /

findings to the Board) and these are set out in more detail in the Risk

Committee Report on page 62.

The Board regularly requests further information on topics of interest

to allow informed decisions to be taken.

On a semi-annual basis, the Board, through the Audit Committee,

also considers the Interim and Annual Reports as well as the detailed

valuation of the investment portfolio prepared by the Investment

Manager and the third-party expert opinion on the proposed

valuation. On at least an annual basis, the Board considers a detailed

analysis of HICL’s Budget and Business Plan for the coming year.

Performance evaluation

In 2021 an external review was commissioned as part

of the triennial independent Board performance review.

In the year to 31 March 2023 the Board conducted its own internal

evaluation, considering the performance, tenure and independence

of each Director. This annual self-evaluation was undertaken using a

questionnaire, and also by way of one-to-one interviews by the Chair

with each Director holding office in the year. The Chair presented a

summary of the conclusions to the Board. Feedback on the Chair

was collated by the Senior Independent Director who then briefed

the Chair.

The independence of each Director has been considered and each

has been confirmed as being independent of the Company and its

Managers. The Board believes that the composition of the Board and

its Committees reflects a suitable mix of skills and experience, and

that the Board, as a whole, and its Committees functioned effectively

during the last 12 months and since the launch of the Company.

Delegation of responsibilities

The Board has delegated the day-to-day administration of the

Company to Aztec Financial Services (UK) Limited in its capacity

asCompany Secretary and Administrator.

HICL delegates the majority of the day-to-day activities required to

deliver the business model, including responsibility for the majority

ofHICL’s risk and portfolio management, to the Investment Manager,

InfraRed, subject to the overall oversight and supervision of the

Directors. InfraRed also operates and manages the Partnership and

its assets in accordance with and subject to the Investment Policy,

investment guidelines and approved investment parameters that are

adopted by the Directors from time to time in conjunction with (and

with the agreement of) InfraRed.

The strategies and policies which govern the delegated activities

have been set by the Board in accordance with section 172 of the

Companies Act 2016.

Conflict of interest

As at 31 March 2023, the Board comprised eight non-executive

Directors, all of whom are independent of the Investment Manager.

None of the Directors sit on boards of other entities managed by the

Investment Manager.

Each Director is required to inform the Board of any potential or actual

conflicts of interest prior to any Board discussion.

It is expected that further investments for HICL will be sourced by

InfraRed and it is likely that some of these will be investments that

have been originated and developed by, and may be acquired

from InfraRed or from a fund managed by, InfraRed. In order to

deal with these potential conflicts of interest, detailed procedures

and arrangements have been established to manage transactions

between HICL, InfraRed or funds managed by InfraRed (the “Rules

of Engagement”). If HICL invests in funds managed or operated

by InfraRed, HICL shall bear any management or similar fees

charged in relation to such fund provided, however, that the value of

HICL’s investments in such funds shall not be counted towards the

valuation of HICL’s investments for the purposes of calculating the

management fees payable to InfraRed.

It is possible that in the future HICL may seek to purchase certain

investments from funds managed or operated by InfraRed once those

investments have matured and to the extent that the investments suit

HICL’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 are described in HICL’s

March 2019 Prospectus, available on the website at www.hicl.com.

Corporate Governance Statement continued

Overview Strategic Report Governance Financials HICL Annual Report 2023 81

Risk management and internal controls

The Board is responsible for HICL’s system of internal control and

for reviewing its effectiveness. To help achieve this end, the Board

has a designated Risk Committee. It follows a process designed to

meet the particular needs of HICL in managing the risks to which it

is exposed.

At each Board meeting, the Board also monitors HICL’s investment

performance in comparison to its stated objectives and it reviews

HICL’s activities since the last Board meeting to ensure adherence

to approved investment guidelines. The pipeline of new potential

opportunities is considered and the prices paid for new or

incremental investments during the quarter are also reviewed.

The Investment Manager prepares management accounts and

updates business forecasts on a quarterly basis, which allow the

Board to assess HICL’s activities and review its performance.

The Board has reviewed the need for an internal audit function and

it has decided that the systems and procedures employed by the

Investment Manager and the Secretary, including their own internal

review processes, and the work carried out by HICL’s external

auditors, provide sufficient assurance that a sound system of internal

control, which safeguards HICL’s assets, is maintained. An internal

audit function specific to HICL is therefore considered unnecessary

albeit, from time to time, independent assurance assignments may

becommissioned by the Board.

The Board recognises that these control systems can only be

designed to manage rather than eliminate the risk of failure to achieve

business objectives, and to provide reasonable, but not absolute,

assurance against material misstatement or loss, and rely on the

operating controls established by both the Company Administrator

and the Investment Manager.

The Audit Committee also plays a vital role in overseeing internal

controls. For more information please see the Audit Committee

Report starting on page 83.

The Board and the Investment Manager have agreed clearly defined

investment criteria, return targets, risk appetite and exposure limits.

Reports on these performance measures, coupled with cash

projections and investment valuations, are submitted to the Board

and the relevant Committees at each quarterly meeting.

Board Committee membership

Audit

Committee

Management

Engagement

Committee

Market Disclosure

Committee

Nomination

Committee

Remuneration

Committee

Risk

Committee

Chair Ms R Akushie Mr F Nelson Mr M Bane Mr M Bane Ms F Davies Mr S Holden

Members Ms E Barber Ms R Akushie Ms R Akushie Ms R Akushie Ms R Akushie Ms R Akushie

Ms F Davies Mr M Bane Ms E Barber Ms E Barber Mr M Bane Mr M Bane

Mr S Holden Ms E Barber Ms F Davies Ms F Davies Ms E Barber Ms E Barber

Mr F Nelson Ms F Davies Mr S Holden Mr S Holden Mr S Holden Ms F Davies

Mr M Pugh Mr S Holden Mr F Nelson Mr F Nelson Mr F Nelson Mr F Nelson

Mr K Reid Mr M Pugh Mr M Pugh Mr M Pugh Mr M Pugh Mr M Pugh

Mr K Reid Mr K Reid Mr K Reid Mr K Reid Mr K Reid

By invitation Mr M Bane

Relations with shareholders

The Board welcomes the views of shareholders and places great

importance on communication with HICL’s shareholders.

HICL reports its full year results to shareholders in May and interim

results in November as well as publishing two Interim Update

Statements each year, normally in February and July. HICL also holds

an AGM in July.

Results of Extraordinary and Annual General Meetings are

announced by the Company promptly after the relevant meeting.

Additionally, other notices and information are provided to

shareholders on an ongoing basis through the Company’s website in

order to assist in keeping shareholders informed. The Secretary and

Registrar monitor the voting of the shareholders and proxy voting is

taken into consideration when votes are cast at the AGM.

Senior members of the Investment Manager make themselves

available to meet with principal shareholders and key sector analysts.

Feedback from these meetings is provided to the Board on a

regular basis.

Shareholders may contact any of the Directors via the Company

Secretary – including any in his or her capacity as Chair of one of

HICL’s Committees, as appropriate – whose contact details are on

HICL’s website.

During the year Mike Bane (Chair) and Frank Nelson (SID) held

individual meetings with certain large institutional shareholders.

The Board’s intention is to continue to foster an open, two-way

communication with its shareholders.

Committees of the Board

As well as regular Board meetings, the following Committees

met during the course of the year (as set out in the table below):

Audit, Management Engagement, Market Disclosure, Nomination,

Remuneration and Risk. The formal terms of reference for each

Committee have been approved by the Board of HICL and are

available on the Investor Relations section of HICL’s website.

For efficiency and as all Directors are non-executive, all Committees

(apart from the Audit Committee) comprise all the Directors of

the Board.

The respective reports of the Remuneration Committee, the Risk

Committee and the Audit Committee are set out on pages 94, 62

and83, respectively, of this Annual Report.

The Chair and members of each Committee as at 31 March 2023

were as follows below:

HICL Annual Report 202382

Nomination Committee

Market Disclosure

Committee

The Board believes that its composition

with respect to the balance of skills, gender,

experience and knowledge, coupled with the

mixed length of service, provides for a sound

base from which the interests of investors will

be served to a high standard.

There is a good spread of skills on the Board and an appropriate

level of knowledge of regulatory requirements and regulations,

generally, as well as a number of Directors with accounting

qualifications and a good understanding of investment companies.

Succession planning for key roles, including the Chair and the

Chair of the Audit Committee, as well as the mix of skills and

experience on the Board more generally with respect to Director

recruitment, are explicitly considered and discussed by the

Nomination Committee.

Other than in exceptional circumstances, it is the policy of the

Board that Directors, including the Chair, will not serve more

than nine years on the Board, including time spent on the

Board of HICL Infrastructure Company Limited. As a general

rule, a Director who has served more than nine years will not be

considered independent

HICL has adopted a Diversity Policy (see the Report of the Directors,

page 90), which the Nomination Committee takes regard of in all

decision-making.

The Nomination Committee had three meetings in the year to

31 March 2023.

The full terms of reference for the Nomination

Committee are available from HICL’s website.

1 Sally-Ann Farnon and Ian Russell both served for 9 years and 3 months to

assist in the smooth transition for the Board. They were assessed to remain

independent throughout

The Committee has responsibility for

overseeing the disclosure of information

by the Company to meet its obligations

under the Market Abuse Regulation and

theFinancial Conduct Authority’s Listing

Rules and Disclosure Guidance and

Transparency Rules.

The Market Disclosure Committee met once in the year to

31 March 2023.

The full terms of reference for the Market Disclosure

Committee are available from HICL’s website.

The MEC of the Board is responsible

for reviewing all major service providers

to HICL, which includes the Investment

Manager. The terms of reference of this

Committee are approved by the Board of

HICL and are available on HICL’s website.

The MEC met once in the year to 31 March 2023 to review

the performance of the key service providers including the

Investment Manager. No material weaknesses were identified; the

recommendation to the Board was that the current arrangements

are appropriate and that the Investment Manager provides good

quality services and advice to HICL.

The MEC meeting for the financial year occurred in February

2023, when a review of key service providers was undertaken.

Overall, the feedback on performance throughout the year was

that key services had been delivered to a very high standard and

the Committee resolved that the continued appointment of all

providers be recommended to the Board for approval, which was

duly granted.

The full terms of reference for the MEC

are available from HICL’s website.

Management

Engagement

Committee (MEC)

Overview Strategic Report Governance Financials HICL Annual Report 2023 83

Governance and responsibilities

All members of the Committee are independent non-executive

Directors. The Board believes members have the necessary range of

financial, risk, control and commercial experience required to provide

effective challenge to the Investment Manager, external auditor, and

other advisers as appropriate. In particular, the Board is satisfied

that Rita Akushie, Frank Nelson and Liz Barber have the recent and

relevant financial experience as outlined in the FRC’s Corporate

Governance Code.

The external auditor and the third-party valuation expert are invited to

attend the Audit Committee meetings at which the Annual and Interim

Reports are considered, and at which they can meet with the Audit

Committee without representatives of the Investment Manager being

present. The Audit Committee has direct access to KPMG and to

key senior staff of the Investment Manager, and it reports its findings

and recommendations to the Board, which retains the ultimate

responsibility for the Company’s financial statements.

Financial reporting regulators

The Committee considered comment letters and papers from

the FRC, including their publication on “Key matters for 2022/23

reports and accounts” in December 2022 as well as their annual

review of corporate reporting and their published thematic reviews.

The Committee reviewed a paper prepared by InfraRed, which

detailed how it had taken due account of the matters raised and

the enhancements it proposed to relevant disclosures in the Interim

accounts and 2023 Annual Report and accounts.

The Company’s internal control and risk management systems,

including those in relation to the financial reporting process include:

– an overview of the Investment Manager’s system of key control

and oversight processes, line manager reviews and systems’

access controls;

– updates for the Committee on accounting developments, including

draft and new accounting standards and legislation;

– approval of the Company’s budget in February 2023 by the

Board and a comprehensive system of financial reporting to the

Board, based on the annual budget with quarterly reporting of

actual results, analysis of variances, scrutiny of key performance

indicators and regular re-forecasting;

– reports from the Investment Manager on matters relevant to the

financial reporting process, including quarterly assessments of

internal controls, processes and fraud risk;

– independent updates and reports from the external auditor on

accounting developments, application of accounting standards,

key accounting judgements and observations on systems and

controls, where appropriate;

– an overview of the Investment Manager’s appointment of

experienced and professional staff, both by recruitment

and promotion, of the necessary calibre to fulfil their allotted

responsibilities as part of the Management Engagement

Committee in February 2023; and

– appropriate Board oversight of external reporting.

I am pleased to present the Audit Committee

report for the year ended 31 March 2023. My

report outlines the work performed by the

Committee in the year. Subsequent to the

2022 AGM, I replaced Sally-Ann Farnon as

Chair of the Audit Committee who retired from

the Board in July 2022, after nine years of

service to the Company.

We held regular scheduled meetings during the year, four

of which were aligned with the Company’s reporting cycle.

Member attendance can be found on page 79. Other regular

attendees at these meetings included: the Company Chair, members

of the Investment Manager including the CFO, and the external

auditor, KPMG LLP (“KPMG”). In accordance with the Committee’s

role in the investment valuations, separate meetings were held

to review and challenge the Investment Manager’s valuation

assumptions, judgements and resulting valuations of the Company’s

underlying portfolio of infrastructure assets. The full list of Committee

roles and responsibilities can be found in the terms of reference:

www.hicl.com/wp-content/uploads/2022/02/2.-HICL-Audit-

Committee-Terms-of-Reference-Aug-2022.pdf

The Audit Committee is the formal forum through which the external

auditor reports to the Board of Directors.

We have reviewed the independence, objectivity and effectiveness

of KPMG and recommended to the Board that KPMG be appointed

as external auditor of the Company in respect of the coming

financial year.

In advance of each Committee meeting I met with the CFO to discuss

their reports as well as any relevant issues. I also met privately with

KPMG as part of my ongoing review of their effectiveness and,

periodically, with other members of the Investment Manager who

have responsibility for HICL.

I, or another member of the Audit Committee, will continue to be

available at each AGM to respond to any questions from shareholders

regarding our activities.

Rita Akushie

Audit Committee Chair

23 May 2023

Audit Committee Report

HICL Annual Report 202384

Going concern and viability

The Directors are required to make a statement in the Annual Report

as to HICL’s long-term viability. The Committee provides advice to

the Board on the form and content of the statement, including the

underlying assumptions, shown on page 49. To enable it to provide

this advice, the Committee evaluated a report from the Investment

Manager setting out its view of HICL’s long-term viability and content

of the proposed Viability statement. This report was based on the

Group’s five-year strategic plan and covered forecasts for investments

and realisations, liquidity and gearing, including forecast outcomes

of the stress test of the plan and forecast capital and liquidity

performance against an assessment of the Group’s risk profile.

Areas of accounting judgement

and controlfocus

The Committee pays particular attention to matters it considers to

be important by virtue of their complexity, level of judgement and

potential impact on the financial statements and wider business

model. Significant areas of focus considered by the Committee are

detailed in the table on the next page, alongside the actions taken by

the Committee (with appropriate challenge from the external auditor)

to address them.

What the Committee reviewed in the year ended 31 March 2023

Internal control, compliance

and risk management

– HICL’s system of control and riskmanagement

– The Viability statement and the supporting stress

test scenarios

– An update on compliance with HMRC’s Senior Accounting

Officer (“SAO”) Regime including wider tax controls

Risk review

– Valuation reports and the Investment Portfolio valuation

– Updates on compliance with regulatory rules and compliance

monitoring findings

– Reports on approach to tax policy and strategy

– Annual tax update

– Going concern and liquidity

Financial reporting

– Annual and interim reports

– Key accounting judgements andestimates

– Update on the relevant thematic reviews from the FRC

– Application of APMs, including the Investment Basis

– The Annual Report to ensure that it is fair, balanced

and understandable

External audit

– Confirmation of the external auditor’s independence

– Policy and approval for non-audit fees

– FY2023 audit plan, including significant audit risks (being the

valuation of investments in Investment Entity subsidiaries)

– Audit results report, including the results from testing Key

AuditMatters

– External auditor performance andeffectiveness

Audit Committee Report continued

Overview Strategic Report Governance Financials HICL Annual Report 2023 85

Significant issue considered Audit Committee actions and conclusions

Valuation of investments

The total carrying value of ‘Investments at fair value through profit or

loss’ at 31 March 2023 was £3,349.7m (2022: £3,158.5m). See Note

12 to the IFRS financial statements.

The fair value of the Company’s investment is based on the Net

Asset Value of IILP and the sundry assets and liabilities of the direct

Corporate Subsidiary. IILP’s Net Asset Value is based on the fair value

of the underlying investments in its portfolio of infrastructure assets.

Other than the A13 Senior Secured Bonds (which are listed and

therefore valued based on the quoted market price), market

quotations are not available for the Company’s underlying

investments, so their valuation is undertaken using a discounted cash

flow methodology. This methodology requires a series of material

judgements to be made as further explained in the Valuation of the

Portfolio starting on page 46 of this report.

The Audit Committee discussed the valuation process and

methodology with the Investment Manager in September, October,

November and December 2022 as part of its review of the September

2022 Interim Report and early NAV release in October 2022, the

December NAV update as well as in March, April and May 2023 as part

of its review of the March 2023 Annual Report.

The Investment Manager carries out valuations semi-annually and

provides detailed valuation reports to the Audit Committee. The Audit

Committee also receives a half-year and year-end valuation report

and opinion from a third-party valuation expert. An additional valuation

was performed off cycle for 31 December 2022 which followed the

same approach. The Audit Committee considered and challenged the

valuation assumptions, with particular focus on inflation, judgements,

and methodology.

The Audit Committee met with KPMG six times during the year.

In November 2022, the Audit Committee reviewed and agreed KPMG’s

initial audit plan, while in February and April 2023 the Audit Committee

discussed the audit approach as well as in May 2023 following the

conclusion of the audit.

KPMG explained the results of their audit and confirmed that the results

of KPMG’s audit testing were satisfactory.

Valuation of investments – key forecast assumptions

The key forecast assumptions are future inflation rates, interest rates,

rates of gross domestic product and tax rates. These assumptions

are explained in further detail in the Valuation of the Portfolio starting

on page 46 of this report.

The Audit Committee considered in detail and provided robust

challenge to the economic assumptions that are subject to judgement

and that may have a material impact on the valuation. In addition, the

Audit Committee considered the impact (both actual and potential)

of geopolitical issues on these key economic assumptions as well

as on the investments’ underlying cash flows, in particular for those

investments with demand risk.

The Audit Committee reviewed the Investment Manager’s valuation

reports, in conjunction with a report and opinion on the valuation from

a third-party valuation expert.

The Investment Manager confirmed to the Audit Committee that

the economic assumptions were consistent with those used for

acquisitions, and the third-party valuation expert confirmed that the

economic assumptions were within an acceptable range.

Due to the current levels of inflation, the Audit Committee paid particular

focus to the assumptions applied to short-term inflation assumptions.

The third-party valuation expert confirmed that the inflation assumptions

were within an acceptable range.

The Investment Manager provided sensitivities showing the impact of

changing these assumptions, which have been considered by the Audit

Committee and the external auditor.

The external auditor challenged, with support of their internal valuation

specialist, discount rates and macroeconomic assumptions applied

in the valuation by benchmarking these to independent market data,

including recent market transactions, and using their specialist’s

experience in valuing similar investments. They further assessed the

reasonableness of the Company’s assumptions by comparing these

to the assumptions used by comparator companies, sales processes,

back-testing of disposals and other third-party information.

The Audit Committee concluded that the Investment Manager’s

valuation process was robust, that a consistent valuation methodology

had been applied throughout the year and that the key forecast

assumptions applied were appropriate.

HICL Annual Report 202386

Significant issue considered Audit Committee actions and conclusions

Valuation of investments – discount rates

The discount rates used to determine the valuation are selected and

recommended by the Investment Manager. The discount rate is applied

to the expected future cash flows from each investment’s financial

forecasts to arrive at a valuation (discounted cash flow valuation).

The resulting valuation is therefore sensitive to the discount rate selected.

The Investment Manager is experienced in valuing these investments and

adopts discount rates reflecting their current and extensive experience

of the market. The Investment Manager sets out the discount rate

assumptions and the sensitivity of the valuation of the investments to this

discount rate in the Valuation of the Portfolio starting on page 50.

The Audit Committee challenged the Investment Manager on their

material judgements and compared this to feedback from the third-

party valuation expert.

The Investment Manager highlighted to the Audit Committee the

forecast impact on cash flows of several stress scenarios alongside its

assessment of the risk to these cash flows.

The Investment Manager presented analysis of the risk-free rate

movement and implied risk premium when determining discount rates.

The Audit Committee was satisfied that the range of discount rates was

appropriate for the valuation carried out by the Investment Manager.

Going concern and Viability statement

The financial statements have been prepared on a going concern

basis, with the assessment period of five years unchanged in the

Viability statement. See Note 2 for details.

The Investment Manager provided a paper explaining the rationale for

the going concern basis of preparation, which has been considered by

the Audit Committee and the external auditor.

The Audit Committee met with the Investment Manager to discuss the

rationale and challenge key assumptions applied, as part of its review

of the Annual Report.

The Audit Committee also reviewed the Company’s Viability statement

and accompanying commentary, as well as projections and sensitivities

prepared by the Investment Manager to support the statement.

The Audit Committee concluded that the Investment Manager’s

judgement applied to the going concern basis of preparation and the

Company’s Viability statement was appropriate.

Alternative Performance Measures (“APMs”)

There are various APMs used throughout the Annual Report to give

investors more information. One of these is the Investment Basis

which is included to aid users of the Annual Report to assess the

Company’s underlying operating performance and its gearing as

well as providing additional transparency into HICL’s Statement of

Financial Position, including its capacity for investment and ability to

make distributions. Total return, NAV, and EPS are the same under

IFRS and the Investment Basis. The Board and the Investment

Manager manage the Company on an Investment Basis.

The Audit Committee reviewed the Investment Manager’s assessment

of the Investment Basis including its presentation by challenging the

disclosures made in the Annual Report and whether due attention was

given to the distinction between the Investment Basis and IFRS.

Other APMs and their relevance to investors were challenged by the

Audit Committee in order that the Annual Report provides meaningful

disclosure to investors. The Annual Report includes a subsection in the

Financial Review on pages 43 that details the assessment of APMs.

Fair, balanced and understandable

The 2019 AIC Code of Corporate Governance requires the Board

to present a fair, balanced and understandable assessment of the

Company’s position and prospects.

As noted above, the Company prepares pro forma summary

financial information under the Investment Basis, as well as reporting

in accordance with IFRS in order to report the relevant financial

performance and position to stakeholders.

The Audit Committee reviewed the March 2023 Annual Report to

ensure that, when taken as a whole, it presents a fair, balanced and

understandable assessment of the Company’s position and prospects.

The Audit Committee received a draft version of the March 2023 Annual

Report for its review and comment, as well as a specific paper from the

Investment Manager to aid its assessment of the March 2023 Annual

Report being fair, balanced and understandable.

As such, the Audit Committee was able to provide positive confirmation

to the Board, for it to fulfil its obligations under the AIC Code of

Corporate Governance.

Audit Committee Report continued

Overview Strategic Report Governance Financials HICL Annual Report 2023 87

Accounting policies and practices

The Audit Committee reviewed the appropriateness of, and was

satisfied with, the Company’s accounting policies.

The Directors exercised judgement in determining whether the

Company and the Corporate Subsidiaries meet the IFRS 10 definition

of an investment entity. By virtue of the Company and Corporate

Subsidiaries’ status as investment entities, all investments (including

the Corporate Subsidiaries) are accounted for at fair value through

profit or loss. Further detail is contained within Note 2 of the

financial statements.

Internal controls

The Audit Committee reviewed the Company’s statement on internal

controls in relation to accounting records, the valuation process and

accounts preparation, prior to endorsement by the Board.

The Management Engagement Committee reviews the adequacy

and effectiveness of the Investment Manager’s internal controls as

part of its annual review of the Investment Manager’s performance.

In addition, the Board reviews and debates a quarterly self-

assessment internal control report prepared by the Investment

Manager – see the Risk & Risk Management section of this report

starting on page 53 for further detail. In the year, the Committee also

received an paper on the Investment Manager’s internal controls.

Internal audit

In line with FRC guidance, the Audit Committee keeps under review

the need for an internal audit function. This was last considered in

November 2022 as part of the CFO’s update on finance controls.

The Audit Committee is satisfied that the systems of internal control

of the Company, the Investment Manager and the Administrator

are adequate to fulfil the Board ’s obligation in this regard and that

currently an internal audit function is not necessary. Additionally,

HICL’s Depositary provides cash flow monitoring, asset ownership

verification and oversight services to the Company. The Committee

considers the need for discrete internal audit engagements

as appropriate.

External auditor

The Audit Committee notes the requirements of the UK Corporate

Governance Code and in particular the requirement to put the

external audit out to tender at least every ten years. The external

audit was most recently tendered in 2015 for the financial year ended

31 March 2016. As reported in the 31 March 2015 Annual Report,

KPMG was reappointed as auditor at the completion of the last

tender process.

The Audit Committee continues to monitor developments on

“Restoring trust in audit and corporate governance” originally

published by the Department of Business, Energy and Industrial

Strategy. They remain supportive of the stated aims to strengthen

the UK’s framework for major companies and the way in which they

are audited.

The Company is in compliance with the requirements of The Statutory

Audit Services for Large Companies Market Investigation (Mandatory

Use of Competitive Tender Processes and Audit Committee

Responsibilities) Order 2014, which relates to the frequency and

governance of tenders for the appointment of the external auditor

andthe setting of a policy on the provision of non-audit services.

Auditor independence

The Audit Committee is responsible for reviewing KPMG’s

independence and performance. It establishes policies for the

provision of non-audit services by the external auditor and reviews

the terms under which the external auditor may be appointed to

perform non-audit services, and the scope and results of the audit,

including KPMG’s effectiveness. To safeguard the independence

and objectivity of the external auditor, the Audit Committee ensures

that any advisory and/or consulting services provided by the external

auditor do not conflict with their statutory audit responsibilities.

Permitted audit and audit-related services include the statutory audit

of HICL and of its subsidiaries, the Company’s interim review and

other permitted audit-related services. The Audit Committee has

pre-approved these services up to £20,000, which are reported after

the event to the Audit Committee. Non-audit services above this limit

require prior approval from the Committee.

HICL Annual Report 202388

Audit Committee Report continued

Assessment of independence and effectiveness

To fulfil its responsibility regarding the independence of the external

auditor, the Audit Committee considered:

– changes in the audit partner and other audit personnel in the audit

plan for the current year;

– a report from the external auditor describing their arrangements to

identify, report and manage any conflicts of interest;

– the extent of non-audit services provided by the external auditor

and its member network firms. To assess the effectiveness of the

external auditor, the Audit Committee reviewed:

– the external auditor’s fulfilment of the agreed audit plan and

variations from it;

– the external auditor’s UK Transparency Report 2023;

– reports highlighting the major issues that arose during the course

of the audit;

– feedback from the Investment Manager evaluating the performance

of the audit team; and

– the FRC’s annual report on audit quality inspections.

The Audit Committee is satisfied with KPMG’s effectiveness and

independence as auditor, having considered the degree of diligence

and professional scepticism demonstrated by them.

Audit and non-audit fees

The Audit Committee reviews the scope and results of the audit,

its effectiveness and the independence and objectivity of the

external auditor, with particular regard to the level of non-audit fees.

Current year fees were:

March 2023

£m

March 2022

£m

Audit services

Audit of the Company and

intermediate holding entities 0.5 0.4

Audit of HICL’s project subsidiaries

and other audit-related services – 0.1

0.5 0.5

Non-audit services

Interim review of the Company 0.1 0.1

Other non-audit services 0.1 –

0.2 0.1

Total 0.7 0.6

Non-audit services in the table above consisted of audit-related

assurance services for the Company’s Interim Report and for working

capital-related activities. In total, it represented 29% (2022: 20%) of

total audit fees.

The Audit Committee considers KPMG to be independent of the

Company and that the provision of permitted non-audit services

in line with HICL’s policy is not a threat to the objectivity and

independence of the conduct of the audit. KPMG confirmed their

compliance with their standard independence and objectivity

procedures to the Audit Committee.

Overview Strategic Report Governance Financials HICL Annual Report 2023 89

Report of the Directors

The Directors present their Annual Report on the affairs of HICL,

together with the financial statements and auditor’s report, for the

year to 31 March 2023. The Corporate Governance Statement forms

part of this report.

Details of significant events since the balance sheet date are

contained in Note 20 to the financial statements.

An indication of likely future developments in the business of HICL

and details of research and development activities are included in the

Strategic Report.

Information about the use of financial instruments by HICL and its

subsidiaries is given in Note 14 to the financial statements.

Principal activity

HICL is a registered investment company under section 833 of the

Companies Act 2006, incorporated in the UK. Its shares have a

premium listing on the Official List of the UK Listing Authority and

trade on the main market of the London Stock Exchange.

Investment Trust status

The Company has been approved as an Investment Trust Company

(“ITC”) under sections 1158 and 1159 of the Corporation Taxes Act

2010. The Company had to meet relevant eligibility conditions to

obtain approval as an ITC, and must adhere to ongoing requirements

to maintain its ITC status including, but not limited to, retaining no

more than 15% of its annual income. The Company has conducted its

affairs to ensure it complies with these requirements.

Results

HICL’s results for the year are summarised in the Financial Review on

page 40 and are set out in detail in the financial statements.

Distributions and share capital

HICL declared four quarterly interim distributions, totalling 8.25p per

share, for the year ended 31 March 2023 as follows:

Amount Declared Record date Paid/to be paid

2.06p 22/02/2023 02/03/2023 31/03/2023

2.06p 15/11/2022 25/11/2022 31/12/2022

2.06p 20/07/2022 22/08/2022 30/09/2022

The fourth quarterly interim distribution, of 2.07p per share, for the

year ended 31 March 2023 was declared by HICL on 17 May 2023,

and is due to be paid on 30 June 2023.

HICL has one class of share capital, Ordinary Shares, of which there

were 1,936,813,501 in issue as at 1 April 2022.

This number increased to 2,031,488,061 as at 31 March 2023 as a

result of tap issuance during the year. Shareholders may reinvest their

dividends via a Dividend Reinvestment Plan (“DRIP”), the details of

which can obtained by emailing shares@linkgroup.co.uk.

Dividend history

Interim dividend

Year ended

31 March 2023

Year ended

31 March 2022

Year ended

31 March 2021

Year ended

31 March 2020

Year ended

31 March 2019

3-month period ending 30 June 2.06 2.06 2.06 2.06 2.01

3-month period ending 30 September 2.06 2.06 2.06 2.06 2.01

3-month period ending 31 December 2.06 2.06 2.06 2.06 2.01

3-month period ending 31 March 2.07 2.07 2.07 2.07 2.02

Paid/declared 8.25p 8.25p 8.25p 8.25p 8.05p

Directors

The Directors who held office during the year to 31 March 2023 were:

Director Role(s) Years of service*

Mr M Bane* Chair of the Board and Nomination Committee, (previously Chair of Remuneration Committee) 4 years 9 months

Mr F Nelson* Senior Independent Director and Chair of Management Engagement Committee 8 years 10 months

Ms R Akushie Chair of the Audit Committee 3 years 3 months

Mr S Holden* Chair of the Risk Committee 6 years 9 months

Ms F Davies Chair of the Remuneration Committee 4 years 0 months

Mr K Reid* 6 years 7 months

Ms E Barber 7 months

Mr M Pugh 7 months

Mr I Russell* Previously Chair of the Board and Nomination Committee 9 years 3 months**

Mrs S Farnon* Previously Chair of the Audit Committee 9 years 3 months**

* Assuming a continuation of the years of service as a Director of HICL Infrastructure Company Limited

** Retired 20 July 2022. Both Directors were considered to remain independent throughout their term served

HICL Annual Report 202390

Directors’ indemnities

HICL has made qualifying third-party indemnity provisions for the

benefit of its Directors which were made during the period and remain

in force at the date of this report.

Employees

HICL has no employees.

Diversity policy

The Board believes that a diversity of viewpoints and personal

experiences, along with broad professional expertise, lead to

better decisions, are critical to innovation and provide a competitive

advantage in HICL’s marketplace. When recruiting new Directors, the

Board searches for candidates from a diverse range of backgrounds

and communities to attract the widest breadth of talent, skills and

outlook. The Board’s policy is to appoint individuals on merit, based

on their skills, experience and expertise.

HICL has achieved the key targets of the Hampton-Alexander Review

and the Parker Review, that 33% of the Board of Directors should be

women by the end of 2020 and at least one Director is from an ethnic

minority by 2024. As at 31 March 2023, 37% (three) of the Board of

Directors were women and 13% (one) was from an ethnic minority.

The FCA’s Listing Rules require a listed company to disclose in its

annual report whether it has met its diversity target of at least one

senior position on its board of directors (i.e. Chair, Chief Executive,

Senior Independent Director or Chief Financial Officer) being held

by a woman. Furthermore, the Listing Rules recognise that such

a disclosure requirement might not be appropriate in the context

of Chapter 15 closed-ended investment companies, the boards of

which are typically comprised wholly of non-executive directors.

However, the HICL Board believes it important that this target should

be substantively met, and accordingly would highlight that both the

Chair of the Audit Committee and the Investment Manager’s CFO,

who is responsible for managing the financial activities carried out by

the Investment Manager for the Company, are female.

HICL has no employees beyond its non-executive Board.

The executive management of HICL is provided by its Investment

Manager, InfraRed, with the senior decision-making body being

InfraRed’s Investment Committee. InfraRed is a global business

with a broad cultural representation of employees reflecting the

international nature of its activities.

InfraRed supports equal opportunities regardless of age, race, gender

or personal beliefs and preferences, both in their recruitment and

when managing existing employees. InfraRed prioritises workforce

engagement and implements a range of initiatives to enhance

employee wellbeing, including fitness and mental health schemes,

mentorship programmes, promotion of charity work and organising

social activities. HR systems are in place to allow employees to

raise any concerns in confidence. InfraRed recognises that when its

employees are engaged, it will benefit from elevated productivity and

increased employee loyalty.

The data shown in the table below reflects the gender and ethnic

background of the Investment Committee and Company Secretary,

and was collected on the basis of self-reporting by the individuals

concerned. The questions asked were “Which of the Parker Review

ethnicity categories do you consider yourself to fall within?” and

“What is the gender with which you identify?”.

Gender identity and ethnic background reporting as at 31 March 2023

Number of HICL

Board members

Percentage of the

HICL Board

Number of senior

positions on the

HICL Board

Number in

Executive

Management

Percentage

of Executive

Management

Gender identity

Men 5 62.5% 2 5 71.4%

Women 3 37.5% 0 2 28.6%

Ethnic background

White British or other White (including minority-white groups) 7 87.5% 2 7 100.0%

Black/African/Caribbean/Black British 1 12.5% 0 0 0.0%

Other ethnic group 0 0.0% 0 0 0.0%

Report of the Directors continued

Overview Strategic Report Governance Financials HICL Annual Report 2023 91

Corporate governance

The Corporate Governance Statement on page 79 outlines the

code of corporate governance against which HICL reports and its

compliance, or otherwise, with the individual principles. It includes

detail on the various Committees of the Board, their composition and

their terms of reference.

Annual General Meeting (“AGM”)

HICL’s AGM is held in July each year. The forthcoming meeting is

scheduled for July 2023.

Investment Manager and Operator

InfraRed Capital Partners Limited (the “Investment Manager”

or “InfraRed”) acts as Investment Manager to HICL and acts as

Operator of the limited partnership which holds and manages

HICL’s investments. A summary of the contract between HICL, its

subsidiaries and InfraRed in respect of services provided is set out in

Note 18 to the financial statements.

Further information on the Investment Manager, including fee

arrangements with HICL can be found in The Investment Manager

section on page 78.

The Investment Management Agreement was entered into in March

2019 and was reviewed and approved by the Board in connection

with the change in domicile of HICL from Guernsey to the United

Kingdom and shareholders had an opportunity to vote on the

Investment Management Agreement as part of those proposals.

The Board assesses InfraRed’s performance as Investment Manager

annually through the Management Engagement Committee. For more

information, see the Corporate Governance Statement on page 79.

The Directors are of the opinion that the continued appointment of

InfraRed as HICL’s Investment Manager is in the best interests of the

shareholders of HICL.

AIFMD disclosures

In accordance with the Alternative Investment Fund

Managers Directive:

– information in relation to HICL’s leverage can be found in the

Strategic Report;

– remuneration of InfraRed as HICL’s AIFM can be found below in

AIFM Remuneration;

– a summary of the activities of HICL can be found in the Investment

Manager’s Report starting on page 20;

– a full list of the risks facing HICL can be found in HICL’s March 2019

Prospectus, available from the Company’s website (see also the

Risk Committee Report on page 62); and

– none of HICL’s assets are subject to special arrangements arising

from their illiquid nature.

AIFM remuneration

The AIFMD Remuneration Code requires InfraRed in its capacity as

AIFM of HICL, to make relevant remuneration disclosures available

to investors.

InfraRed assesses its list of AIFMD Code Staff. AIFMD Code Staff are

notified of their status and the associated implications.

InfraRed has established a remuneration policy. A summary of

InfraRed’s remuneration policy is contained in the Annual Report and

accounts of InfraRed Capital Partners (Management) LLP, which are

available from Companies House.

The aggregate total remuneration paid by the Group which contains

InfraRed for the year ended 31 March 2023 was £39,279,919.

This was divided into fixed remuneration of £20,034,919 attributable

to 178 beneficiaries and variable remuneration of £19,245,000

attributable to 170 beneficiaries. The aggregate total remuneration

paid by the Group which contains InfraRed to AIFMD Code Staff in

the year was £7,031,962 and the number of senior management and

risk takers was 19.

The Investment Manager fees charged to the Company were £0.1m

(disclosed as Investment Manager fees in Note 18), of which the full

balance remained payable at 31 March 2023. InfraRed is also the

Operator of IILP, the Corporate Subsidiary through which HICL holds

its investments. The total Operator fees were £32.7m of which £8.3m

remained payable at 31 March 2023.

Brokers, Administrator

andCompanySecretary

HICL’s joint corporate brokers at 31 March 2023 are Investec Bank

plc and RBC Capital Markets.

The Administrator and Company Secretary is Aztec Financial

Services (UK) Limited.

Disclosure of information to auditor

The Directors who held office at the date of approval of this Directors’

Report confirm that, so far as they are each aware, there is no

relevant audit information of which HICL’s auditor is unaware; and

each Director has taken all the steps that he or she ought to have

taken as a Director to make him or herself aware of any relevant

audit information and to establish that HICL’s auditor is aware of

that information.

Other information

An indication of likely future developments in the business and

particulars of significant events which have occurred since the end

of the financial year have been included in the Strategic Report.

The Strategic Report includes information required by the Companies

Act 2006 (Strategic Report and Directors’ Report) Regulations 2008.

HICL Annual Report 202392

Report of the Directors continued

Auditor

In accordance with Section 489 of the Companies Act 2006, a

resolution for the reappointment of KPMG LLP as auditor of HICL is to

be proposed at the forthcoming Annual General Meeting.

Substantial interests in share capital

As at 31 March 2023, HICL is aware of or has received notification

in accordance with the Financial Conduct Authority’s Disclosure

Guidance and Transparency Rule 5 of the following interests in 3% or

more of HICL’s shares to which voting rights are attached (at the date

of notification):

Number of

shares held

Percentage

held

Brewin Dolphin Limited 166,101,128 8.18%

Rathbones Investment Management 137,252,513 6.76%

Investec Wealth & Investment Limited 124,926,343 6.15%

Payment of suppliers

It is the policy of HICL to settle all investment transactions in

accordance with the terms and conditions of the relevant market in

which it operates. HICL continues to meet the criteria to qualify for

Payment Practice Reporting. This requires HICL Infrastructure PLC

to report on its payment policies and specific data on payments and

suppliers that demonstrate achieved performance every six months.

For the purpose of this reporting HICL Infrastructure PLC is required

to state a standard payment term. As HICL Infrastructure PLC does

not have standard payment terms defined, the standard payment

period in line with government guidance is the contractual payment

period most commonly used in the period; this has been deemed to

be 30 days.

Greenhouse gas emissions (GHG) reporting

See page 71 – Metrics and targets.

Political contributions

HICL made no political donations during the year (2022: none).

Going concern

The Company’s business activities, together with the factors likely to

affect its future development, performance and position are set out

in HICL’s Business Model on page 14. The financial position of the

Company, its cash flow and liquidity position are described in the

Investment Manager’s Report on page 20 and the Financial Review

on page 40. In addition, the Notes of the financial statements include

the Company’s objectives, policies and processes for managing its

capital; its financial risk management objectives; details of its financial

instruments and hedging activities; and its exposures to credit risk

and liquidity risk.

The Directors have assessed going concern by considering areas

of financial risk, the Company’s access to credit facilities and by

reviewing cash flow forecasts with a number of stress scenarios.

They also considered the Company’s considerable financial

resources, including investments in a significant number of project

assets and access to credit facilities (details of which are set out in the

Financial Review on page 40 and Note 15 to the financial statements).

The majority of these project assets operate long-term contracts

with various public sector customers and suppliers across a range

of infrastructure projects. The financing for these projects is non-

recourse to the Company.

Based on this analysis, the Directors have concluded that the

Company has adequate resources to continue in operational

existence for the foreseeable future, a period of at least 12 months

from the date of approving these financial statements. Thus,

they consider it appropriate to adopt the going concern basis of

accounting in preparing the annual financial statements.

Share repurchases

No shares have been bought back in the year. The latest authority

to purchase shares for cancellation was granted to the Directors on

20 July 2022.

Sustainability

The Board is committed to sustainability leadership in the sector.

To minimise the environmental impact of HICL’s corporate affairs,

all reporting to the Board and its various Committees is paperless.

In addition, the Investment Manager has offset all emissions

associated with Directors’ travel with an accredited scheme and will

continue to do so going forward. For more information, see page 36

for the Sustainability Highlights.

Treasury shares

Section 724 of the UK 2006 Companies Act allows companies

to hold shares acquired by market purchase as treasury shares,

rather than having to cancel them. Issued shares may be held in

treasury and may be subsequently cancelled or sold for cash in the

market. This gives HICL the ability to reissue shares quickly and

cost efficiently, thereby improving liquidity and providing HICL with

additional flexibility in the management of its capital base.

While there are currently no shares held in treasury, the Board would

only authorise the resale of such shares from treasury at prices at

or above the prevailing net asset value per share (plus costs of the

relevant sale). If such a measure were to be implemented, this would

result in a positive overall effect on HICL’s net asset value. In the

interests of all shareholders the Board will keep the matter of treasury

shares under review.

Overview Strategic Report Governance Financials HICL Annual Report 2023 93

The Directors are responsible for preparing the Annual Report

and the financial statements in accordance with applicable law

and regulations.

Company law requires the Directors to prepare financial statements

for each financial year. Under that law they have elected to prepare

the financial statements in accordance with UK-adopted international

accounting standards and applicable law.

Under company law the Directors must not approve the financial

statements unless they are satisfied that they give a true and fair view

of the state of affairs of the Company and of its profit or loss for that

period. In preparing these financial statements, the Directors are

required to:

– select suitable accounting policies and then apply

them consistently;

– make judgements and estimates that are reasonable, relevant

and reliable;

– state whether they have been prepared in accordance with UK-

adopted international accounting standards;

– assess the Company’s ability to continue as a going concern,

disclosing, as applicable, matters related to going concern; and

– use the going concern basis of accounting unless they either

intend to liquidate the Company or to cease operations, or have no

realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting

records that are sufficient to show and explain the Company’s

transactions and disclose with reasonable accuracy at any time the

financial position of the Company and enable them to ensure that its

financial statements comply with the Companies Act 2006. They are

responsible for such internal control as they determine is necessary

to enable the preparation of financial statements that are free from

material misstatement, whether due to fraud or error, and have

general responsibility for taking such steps as are reasonably open

to them to safeguard the assets of the Company and to prevent and

detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also

responsible for preparing a Strategic Report, Directors’ Report,

Directors’ Remuneration Report and Corporate Governance

Statement that complies with that law and those regulations.

The Directors are responsible for the maintenance and integrity of

the corporate and financial information included on the Company’s

website. Legislation in the UK governing the preparation and

dissemination of financial statements may differ from legislation in

other jurisdictions.

Responsibility statement of the Directors

inrespect of the annual financial report

We confirm that to the best of our knowledge:

– the financial statements, prepared in accordance with the

applicable set of accounting standards, give a true and fair view

of the assets, liabilities, financial position and profit or loss of the

Company; and

– the Strategic Report/Directors’ Report includes a fair review of the

development and performance of the business and the position

of the issuer, together with a description of the principal risks and

uncertainties that they face.

We consider the Annual Report and accounts, taken as a whole,

is fair, balanced and understandable and provides the information

necessary for shareholders to assess the Company’s position and

performance, business model and strategy.

In accordance with Disclosure Guidance and Transparency Rule

4.1.14R, the financial statements will form part of the annual financial

report prepared using the single electronic reporting format under

the TD ESEF Regulation. The auditor’s report on these financial

statements provides no assurance over the ESEF format.

By order of the Board authorised signatory:

Aztec Financial Services (UK) Limited

Company Secretary

23 May 2023

Registered Office:

Aztec Financial Services (UK) Limited:

Forum 4, Solent Business Park, Parkway South,

Whiteley, Fareham, PO15 7AD

Statement of Directors’ Responsibilities

in respect of the Annual Report and the financial statements

HICL Annual Report 202394

Directors’ Remuneration Report

The Remuneration Committee’s report is set

out on pages 94 to 96. The report includes

the Directors’ Remuneration Policy, an

explanation of the Committee’s structure and

responsibilities, a report on its activities in

the year ended 31 March 2023 and relevant

required reporting on remuneration and

shareholdings.

This report is prepared in accordance with the Listing Rules of the

FCA, the relevant sections of the Companies Act 2006 and the

Large and Medium-sized Companies and Groups (Accounts and

Reports) Regulations 2008, (as amended by the Large and Medium-

sized Companies and Groups (Accounts and Reports) Amendment

Regulations 2013, the Companies (Miscellaneous Reporting)

Regulations 2018 and the Companies (Directors’ Remuneration

Policy and Directors’ Remuneration Report) Regulations 2019).

Those aspects of the report that are required to be audited are

labelled as such.

The Committee met twice during the year. There have been

no changes to the Directors’ Remuneration Policy or the terms

of reference of the Remuneration Committee. After careful

consideration, the Committee recommended to the Board that the

Chair and Directors’ fees are increased to include a 5% inflationary

uplift, in order to continue to attract and retain Directors with an

appropriate skillset and experience for the Company, but are not

increased to the full level of current inflation.

This Directors’ Remuneration Report was adopted by the Board and

signed on its behalf by:

Frances Davies

Remuneration Committee Chair

23 May 2023

Directors’ Remuneration Policy

The Directors’ Remuneration Policy is determined by the

Remuneration Committee. In accordance with the provisions

of the AIC Code of Corporate Governance (the “AIC Code”),

Directors’ remuneration is designed to reflect their duties and time

commitments. Remuneration is set at a reasonable level to attract and

retain Directors of the necessary quality and experience to execute

effective governance and oversight of the Company, to support

strategy and to promote long-term sustainable success. The specific

additional responsibilities of the Chair, Senior Independent Director,

and the Chairs of the various Committees of the Board are taken

into account. The policy aims to be fair and reasonable compared to

equivalent investment trusts, investment companies and other similar-

sized financial companies. The effects of inflation are also considered.

Reasonable travel and associated expenses are reimbursed.

HICL’s Articles of Association limit the aggregate fees payable to

the Board to a total of £700,000 p.a. (or such amount as HICL’s

shareholders, in a general meeting, shall determine from time-to-

time) excluding reimbursable expenses. Within that limit it is the

responsibility of the Remuneration Committee, as a Committee of the

Board, to determine Directors’ remuneration in conjunction with the

Chair of the Board, and in his case, by the Remuneration Committee

only. Relevant comparative information is considered in forming

these recommendations and the views expressed by shareholders

are taken into consideration. The Remuneration Committee will seek

the views of an independent external remuneration consultant at

least every three years to assist its review of remuneration. This was

last performed in 2020 with an out-of-cycle review performed in

2021. As a result of the additional review, the next triennial review is

scheduled to be performed in late 2023.

Directors’ fees are fixed and are payable in cash. As all Directors

are non-executive, they are not eligible for share options, long-

term incentive schemes or other benefits, performance-related or

otherwise. Directors do not have service contracts and there is no

provision for compensation for loss of office. Each new Director is

provided with a letter of appointment. Additional fees are payable at

the discretion of the Remuneration Committee where Directors are

involved in duties beyond those normally expected, for example, in

relation to the issue of a prospectus.

This policy and the level of Directors’ fees is reviewed annually by the

Remuneration Committee and applies with effect from 1 April of each

year, subject to shareholder approval at the AGM.

Committee structure and responsibilities

The Remuneration Committee is composed of all the Directors

including the Chair of the Company, as he was deemed to be

independent at the time of his appointment. This membership is

deemed appropriate on the basis that all Directors are independent

and have the requisite experience and knowledge of the Company

to appropriately determine remuneration. The membership of eight

Independent Directors ensures that no single Director has undue

influence on the outcome of their own remuneration. The Committee

operates in accordance with the Directors’ Remuneration Policy (as

set out above) and with Principles P, Q and R of the 2019 AIC Code.

450

150

100

200

250

300

HICL TSR (LHS) FTSE 250 TSR (LHS)

350

400

4.0

1.0

0.5

1.5

2.0

2.5

3.0

3.5

Mar 06 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar 16 Mar 17Mar 14 Mar 15 Mar 18 Mar 21 Mar 22Mar 19 Mar 20 Mar 23

FTSE All share TSR (LHS) HICL Beta vs FTSE All-Share (RHS)

Beta

Total Shareholder Return

Overview Strategic Report Governance Financials HICL Annual Report 2023 95

Relevant performance information

In setting the Directors’ remuneration, consideration is given to the

size and relative performance of the Company. The graph below

highlights the comparative Total Shareholder Return (share price

and dividends) (“TSR”) for an investment in the Company

for the

17-year period from inception until 31 March 2023 compared with an

investment in the FTSE 250 Index over the same period. During that

period the TSR was 8.25% p.a. compared with the FTSE 250 Index

which was 6.96% p.a.

The table below is provided to enable shareholders to assess

the relative importance of Directors’ remuneration. It compares

remuneration against dividends paid and share buybacks of the

Company in the year ended 31 March 2023.

Actual expenditure YE 2023 YE 2022

Aggregate Directors’ remuneration £528,831 £516,000

Aggregate dividends paid to

shareholders

£165,638,002 £159,787,113

Aggregate cost of Ordinary Shares

repurchased

£0 £0

Review of remuneration

The Remuneration Committee performed a review of Board

remuneration in the year ended 31 March 2023. The review

noted that CPI inflation in the year to 31 March 2023 was 10.1%

and recommended a lower inflationary increase in fees for all

Board roles of 5%. The inflationary increase is consistent with the

recommendations of the last independent review performed by Trust

Associates representing changes to cost of living to maintain Director

fees at a competitive level but has been determined below the current

level of inflation.

The proposed remuneration, analysed by role, for the year

ending 31 March 2024 is set out in the following table, together

with comparatives.

Statement of implementation of remuneration policy

in the current financial year

The Board has adopted the proposals for Directors’ remuneration

as recommended by the Remuneration Committee and will seek

shareholder approval for the Directors’ Remuneration Policy and

this report including the proposed remuneration at the AGM on

19 July 2023.

Role (YE 2023)

Total fees

proposed

(YE 2024)

Fees approved

(YE 2023)

Chair £110,000 £105,000

Senior Independent Director £74,000 £70,500

Audit Committee Chair £73,000 £69,500

Risk Committee Chair £70,500 £67,000

Director £58,500 £55,500

Luxembourg representative £8,000 £7,500

Total

£511,000 £430,500

1 Including its predecessor, HICL Guernsey Limited, from inception in March 2006 until March 2019

2 Dividends paid in the year rounded to £165.5m for the purposes of the financial statements

3 The fees approved/proposed relate to the roles performed and not to individuals per se

4 Approved at the AGM on 20 July 2022

5 Frank Nelson will step down from the HICL Board at the end of July 2023, following the AGM. As a result, he will receive pro rata remuneration for the period served within the financial year

to 31 March 2024. The total proposed fee presented is based on the full year remuneration for seven Directors (2023: presented on the basis of six Directors) and does not include pro rata

allocations which have not yet been confirmed. Ian Russell and Susie Farnon stepped down from the HICL Board at the end of July 2022, following the AGM and received pro rata remuneration

for this period

HICL Annual Report 202396

Directors’ Remuneration Report continued

The total fees paid to Directors in the year were within the annual fee cap of £700,000, contained in the Remuneration Policy approved by

shareholders at the AGM on 20 July 2022.

Directors’ remuneration – audited

Total remuneration paid/due in year

Year ended

31 March 2023

Year ended

31 March 2022

M Bane*^** £97,435 £60,000

I Russell*^ £31,957 £100,000

F Nelson £70,500 £67,000

R Akushie^ £65,239 £53,000

L Barber^ £32,274 –

F Davies £55,500 £53,000

S Farnon^ £21,152 £66,000

S Holden £67,000 £64,000

M Pugh^ £32,274 –

K Reid £55,500 £53,000

Total £528,831 £516,000

*The Chair was the highest paid Director

**Includes £7,500 in respect of Luxembourg subsidiary (2022: £7,000)

^ Remuneration pro-rated for the year

Statement of Directors’ shareholdings – audited

The Directors of the Company on 31 March 2023, and their interests in the shares of the Company, are shown in the table below:

Number of Ordinary Shares 31 March 2023 31 March 2022

M Bane 14,394 14,394

I Russell* n/a 95,979

F Nelson 51,568 51,568

R Akushie 6,500 –

L Barber* 15,000 n/a

F Davies 15,000 –

S Farnon* n/a 59,931

S Holden 27,694 27,694

M Pugh* 14,000 n/a

K Reid 12,014 11,098

Total 156,170 260,664

* I Russell and S Farnon stood down as Directors during the year and therefore their holdings are no longer reported. L Barber and M Pugh both became Directors in the year and no prior year

comparator is shown

All of the holdings of the Directors and their families are beneficial. No changes to these holdings had been notified up to the date of this report.

Statement of shareholder voting

At the last AGM held on 20 July 2022, the resolutions relating to the Directors’ Remuneration Report for the year ended 31 March 2022, the

Directors’ Remuneration Policy and an increase to the Directors’ aggregate remuneration cap were approved.

The percentage of votes cast was 64%. The results of the votes on resolutions relating to remuneration are summarised in the table below:

In Favour Against Withheld

Resolution Votes % age Votes % age Votes % age

8- Remuneration Report 1,231,570,845 99.97 342,666 0.03% 604,723 0.05

9- Remuneration Policy 1,223,604,811 99.33 8,258,615 0.67% 654,808 0.05

97HICL Annual Report 2023FinancialsGovernanceStrategic ReportOverview

Financials

What’s in this section

KPMG LLP’s Independent Auditor’s Report 98

Income statement 110

Statement of financial position 111

Statement of changes in shareholders’ equity 112

Cash flow statement 113

Notes to the financial statements 114

Appendix 1: SFDR Disclosures 146

Appendix 2: Valuation Policy 158

Appendix 3: Infrastructure Market – Sources 159

Glossary 160

Directors & Advisers 162

HICL Annual Report 202398

KPMG LLP’s Independent Auditor’s Report

To the members of HICL Infrastructure plc

1. Our opinion is unmodified

In our opinion the financial statements of HICL Infrastructure plc (“the Company”):

– give a true and fair view of the state of the Company’s affairs as at 31 March 2023 and of its profit for the year then ended;

– have been properly prepared in accordance with UK-adopted international accounting standards; and

– have been prepared in accordance with the requirements of the Companies Act 2006.

What our opinion covers

We have audited the financial statements of the Company for the year ended 31 March 2023 (FY23) included in the Annual Report which

comprises the Income Statement, Statement of Financial Position, Statement of Changes in Shareholders’ Equity, Cash Flow Statement and

the related Notes, including the accounting policies in note 2.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are

described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion

and matters included in this report are consistent with those discussed and included in our reporting to the Audit Committee (“AC”).

We have fulfilled our ethical responsibilities under, and we remain independent of the Company in accordance with, UK ethical requirements

including the FRC Ethical Standard as applied to listed public interest entities.

2. Overview of our audit

Factors driving

ourview of risks

We considered the developments affecting the Company

since the last audit for the year ended 31 March 2022 and

have updated our risk assessment.

Continued geopolitical tension and global macroeconomic

downturn were the dominant themes for the year ended

31 March 2023. In early 2022, the conflict between

Russia and Ukraine intensified geopolitical tensions which

continued during 2023. In addition, energy costs rocketed

in 2022, combined with the food supply chain disruptions,

inflation remained high in major economies throughout

2022 and 2023. This required central banks to adopt a

series of monetary policy measures, primarily through

increases in interest rates, to seek to contain inflation.

These factors, along with the market volatility in the UK

primarily caused by political uncertainties since September,

contributed to challenging market conditions for the

investment industry.

This means the level of judgement required to be exercised

by the Company in the valuation of investment entity

subsidiaries, which is primarily driven by the valuation of the

underlying infrastructure, PFI and PPP projects, continued

to be a focus area.

As part of our risk assessment, we have maintained our

focus on the valuation of the investment entity subsidiaries,

which is primarily driven by the valuation of the underlying

infrastructure, PFI and PPP projects. We have designed

our audit procedures accordingly. This has included

specific focus on the discount rate used in the valuation

model, macroeconomic assumptions (such as inflation,

GDP growth and interest rates), and project specific cash

flowsand adjustments made by the Company.

Key Audit Matter Vs FY22 Item

Valuation of investment

held at fair value through

profit or loss

4.1

Similar risk to FY2022

Overview Strategic Report Governance Financials HICL Annual Report 2023 99

Audit committee

interaction

During the year, the Audit Committee met nine times. KPMG are invited to attend all Audit Committee meetings and are

provided with an opportunity to meet with the Audit Committee Chair. KPMG attended six of the nine Audit Committee

meetings held. For the Key Audit Matter, we have set out communications with the Audit Committee in section 4.1,

including matters that require particular judgement.

The matters included in the Audit Committee Report on pages 83 to 88 are materially consistent with our observations

of those meetings.

Our independence We have fulfilled our ethical responsibilities under, and

we remain independent of the Company in accordance

with, UK ethical requirements including the FRC Ethical

Standard as applied to listed public interest entities.

We have not performed any non-audit services during

FY23 or subsequently which are prohibited by the FRC

Ethical Standard.

We were first appointed as auditor by the directors

for the period ended 31 March 2019. The period

of total uninterrupted engagement, including HICL

Infrastructure Company Limited (the previous Guernsey

listed entity) is for the seventeen financial years ended

31 March 2023.

The Engagement partner is required to rotate every

5 years. As these are the first set of the financial

statements signed by Fang Fang Zhou, she will be

required to rotate off after the FY27 audit.

Total audit fee for the

company and underlying

holding companies

£528k

Audit related fees

(including interim review)

£93k

Other services £388k

Non-audit fee as a %

of total audit and audit

related fee %

91%

Date first appointed 26 February 2019

Uninterrupted audit tenure 5 years

Next financial period

which requires a tender

2025

Tenure of Engagement

partner

1 year

Materiality

(item 6 below)

The scope of our work is influenced by our

view of materiality and our assessed risk of

material misstatement.

We have determined materiality for the financial

statements as a whole at £33.6m (FY22: £30.0m).

For the current period, total assets have been considered

as a benchmark for computing materiality as compared to

net assets used in prior year. We consider total assets to be

more in line with industry practice and as these are directly

driven by the investment valuations which ultimately is most

influential to the users ofthe financial statements. A change

in benchmark does not materially impact the materiality

as the total liabilities of the Company are not material.

Apart from this change, the increase in audit materiality

reflects an increase in Company’s total asset value, driven

by the increase in investment valuations.

We determined that Total assets is the materiality

benchmark. As such, we based our materiality on total

assets, of which it represents 1.0% (FY22: 1.0% of

net assets).

Materiality levels used in our audit

Materiality

AMPT

£33.6m

£30m

£22.5m

£25.2m

2022

2023

2022

2023

2022

2023

£1.5m

£1.6m

PM: Performance Materiality

AMPT: Audit Misstatement Posting Threshold

The impact of

climate change

onour audit

We have considered the potential impacts of climate change on the financial statements as part of planning our audit.

This included the impacts on the infrastructure, PPP and PFI projects held indirectly by the Company through its

investment entity subsidiaries.

As part of our audit we have made enquiries of management to understand the extent of the potential impact of

climate change risk on the Company’s financial statements. We have performed a risk assessment of how the impact

of climate change may affect the financial statements and our audit. Taking into account the nature of the Company’s

underlying investments, our assessment is that the climate related risks to the Company’s business strategy and

financial planning did not have a significant impact on our audit, including our key audit matters.

We have also read the Board’s Task Force on Climate related Financial Disclosure (TCFD) in the front half of the annual

report and considered consistency with the financial statements and our audit knowledge.

HICL Annual Report 2023100

KPMG LLP’s Independent Auditor’s Report continued

To the members of HICL Infrastructure plc

3. Going concern, viability and principal risks and uncertainties

The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Company or to cease its

operations, and as they have concluded that the Company’s financial position means that this is realistic. They have also concluded that there

are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date

of approval of the financial statements (“the going concern period”).

Going concern

We used our knowledge of the Company, its industry, and the

general economic environment to identify the inherent risks to its

business model and analysed how those risks might affect the

Company’s financial resources or ability to continue operations over

the going concern period. The risks that management considered

most likely to adversely affect the available financial resources over

this period are:

– Operational or performance issues within the portfolio which

increases the number of projects not distributing and its impact on

the Company’s distribution income and cash flows; and

– Widespread economic turmoil due to volatility in the financial

markets and recovery alongside geopolitical uncertainties

contributing to persistent inflation impacting liquidity through the

need to provide further liquidity support to the portfolio.

We considered whether this risk could plausibly affect the liquidity or

covenant compliance in the investment entity in the going concern

period by assessing the degree of downside assumption that, individually

and collectively, could result in a liquidity issue, taking into account the

Company’s current and projected cash and facilities (a stress test).

Our procedures also included an assessment of whether the going

concern disclosure in note 2 to the financial statements gives a

complete and accurate description of the directors’ assessment of

going concern.

Accordingly, based on those procedures, we found the directors’ use of

the going concern basis of accounting without any material uncertainty

for the Company to be acceptable. However, as we cannot predict all

future events or conditions and as subsequent events may result in

outcomes that are inconsistent with judgements that were reasonable

at the time they were made, the above conclusions are not a guarantee

that the Company will continue in operation.

Our conclusions

– We consider that the directors’ use of the going concern basis

of accounting in the preparation of the financial statements

is appropriate;

– We have not identified, and concur with the directors’ assessment

that there is not, a material uncertainty related to events or conditions

that, individually or collectively, may cast significant doubt on the

Company’s ability to continue as a going concern for the going

concern period;

– We have nothing material to add or draw attention to in relation to the

directors’ statement in note 2 to the financial statements on the use of

the going concern basis of accounting with no material uncertainties

that may cast significant doubt over the Company’s use of that basis for

the going concern period, and we found the going concern disclosure

in note 2 to be acceptable; and

– The related statement under the Listing Rules set out on page

92 is materially consistent with the financial statements and our

audit knowledge.

Overview Strategic Report Governance Financials HICL Annual Report 2023 101

Disclosures of emerging and principal risks and longer-term viability

Our responsibility

We are required to perform procedures to identify whether there is a

material inconsistency between the directors’ disclosures in respect

of emerging and principal risks and the viability statement, and the

financial statements and our audit knowledge.

Based on those procedures, we have nothing material to add or draw

attention to in relation to:

– the directors’ confirmation within the Risk & Risk Management

section on page 53 that they have carried out a robust assessment

of the emerging and principal risks facing the Company, including

those that would threaten its business model, future performance,

solvency and liquidity;

– the Emerging and Principal Risks disclosures describing these

risks and how emerging risks are identified and explaining how

they are being managed and mitigated; and

– the directors’ explanation in the viability statement of how they

have assessed the prospects of the Company, over what period

they have done so and why they considered that period to be

appropriate, and their statement as to whether they have a

reasonable expectation that the Company will be able to continue

in operation and meet its liabilities as they fall due over the period

of their assessment, including any related disclosures drawing

attention to any necessary qualifications or assumptions.

We are also required to review the viability statement set out on page

64 under the Listing Rules.

Our work is limited to assessing these matters in the context of only

the knowledge acquired during our financial statements audit. As we

cannot predict all future events or conditions and as subsequent

events may result in outcomes that are inconsistent with judgements

that were reasonable at the time they were made, the absence of

anything to report on these statements is not a guarantee as to the

Company’s longer-term viability.

Our reporting

We have nothing material to add or draw attention to in relation to

these disclosures.

We have concluded that these disclosures are materially consistent

with the financial statements and our audit knowledge.

4. Key audit matter

What we mean

Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and

include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the

greatest effect on:

– the overall audit strategy;

– the allocation of resources in the audit; and

– directing the efforts of the engagement team.

We include below the Key Audit Matter (unchanged from 31 March 2022) together with our key audit procedures to address this matter and our

results from those procedures. That matter was addressed, and our results are based on procedures undertaken, for the purpose of our audit

of the financial statements as a whole. We do not provide a separate opinion on that matter.

HICL Annual Report 2023102

4.1 Valuation of investments held at fair value through profit and loss

Financial Statement Elements

Our assessment of risk vs FY22 Our results

FY23 FY22

Valuation of

investment in

investment entity

subsidiary

£3,349.7m £3,158.5m

Our assessment is the risk

issimilar to FY22

FY23: Acceptable

FY22: Acceptable

Description of the Key Audit Matter

Subjective valuation:

The investment in investment entity subsidiary represents HICL’s

100% investment in HICL Infrastructure 2 SARL (HICL SARL),

which in turn invests in 100% of Infrastructure Investments Limited

Partnership (IILP). IILP invests in a number of infrastructure, PFI and

PPP projects.

The valuation of HICL SARL represents its net asset value, which

is based on the net asset value of IILP. The net asset value of IILP

is determined primarily based on the valuation of the underlying

infrastructure, PFI and PPP projects.

As these investments (except for one), are unquoted and illiquid,

the fair value is determined using discounted cash flow (DCF)

methodology, whereby long-term forecasted cash flows derived

from revenue, expenses and financing streams for each asset are

discounted at a rate reflecting the risk profile. This involves the

exercise of significant judgement by the Company in relation to the

selection of a number of assumptions and data points which are

unobservable in the market.

These include:

Significant assumption:

The discount rate has a high degree of estimation uncertainty with a

potential range of reasonable outcomes (valuations) greater than our

materiality for the financial statements as a whole, and possibly many

times that amount.

Non significant assumptions and datapoints:

Whilst we do not consider other assumptions and data points to be

at a significant risk of misstatement, due to the relevance of these

elements in terms of the overall valuation and associated audit effort,

we consider the following areas to also have the greatest effect on the

overall audit strategy and planning of the audit:

– Inflation

– GDP Growth Rates

– Deposit and Tax rates

– Project revenue and expenses

– Management overlay adjustments to cash flow

The financial statements (note 14) disclose the sensitivity estimated by

the Company.

Our response to the risk

Our procedures included:

Control design:

We obtained an understanding of the Company’s processes to determine

the fair value of investments. We documented and assessed the design

and implementation of the investment valuation processes and controls.

We performed the tests below rather than seeking to rely on any of the

Company’s controls because the nature of the balance is such that we

would expect to obtain audit evidence primarily through the detailed

procedures described.

Risk assessment and understanding of the investments

We held discussions with the asset manager to identify any specific

operational issues relating to the investments, and assessed the impact

of these issues on the forecasted distributions and discount rate.

Management expert

We assessed the objectivity, capabilities and competence of the third

party valuation expert engaged by the Company to challenge the

reasonableness of the Company’s investment valuations. We obtained

and assessed the valuation expert’s findings, held discussions with

them and considered the impact, if any, on our audit work.

Our procedures for significant assumptions included:

Our valuations experience:

With the assistance of our valuations specialists, we critically evaluated

and challenged the significant assumption affecting the valuation of the

underlying assets (discount rates). We assessed whether the discount

rates are within a reasonable range independently developed by us

based on market data.

Test of detail:

Our procedures in respect of the non-significant assumptions and data

points included:

– We agreed key revenue inputs on the forecast cash flows for each

investment to external sources, such as third party contracts and

invoices. Material expenses were agreed to the supplier invoices

received and where possible to underlying agreements for leases and

firm/finance maintenance contracts.

– We obtained the audited financial statements (where available) of the

portfolio companies. We compared historic projections in the model to

the audited financial information. Additionally, we used this information

to assess the reasonableness of the data projected for the next financial

period in the model. We reviewed the financial statements for any

material uncertainty on going concern for the portfolio companies.

Where identified, we held discussions with management to understand

the circumstances and obtained an update on asset performance.

– We reperformed the valuation calculation using the Company’s

inputs and assumptions. We constructed our own discounted cash

flow models for each underlying asset and compared the calculated

results with the Company’s valuation.

Our valuations experience:

We critically evaluated and challenged other assumptions affecting the

valuation of the underlying assets, including inflation, GDP growth rates,

deposit and tax rates, project revenue and overlay adjustments.

KPMG LLP’s Independent Auditor’s Report continued

To the members of HICL Infrastructure plc

Overview Strategic Report Governance Financials HICL Annual Report 2023 103

Retrospective Review:

We have compared the prior year forecasts to current year actual

distributions to consider historical accuracy of the forecasting. We then

agreed the actual distribution to bank statements. We assessed the

valuation for each investment focusing on changes since the prior

reporting date.

Assessing transparency:

We considered the appropriateness, in accordance with relevant

accounting standards, of the disclosures in respect of investments

and the effect of changing one or more inputs to reasonably possible

alternative valuation assumptions.

Communications with the HICL Infrastructure PLC Audit Committee

Our discussions with and reporting to the Audit Committee included:

– Our approach to the audit of the fair value of the investment entity subsidiary, primarily driven by the valuation of the underlying

infrastructure, PFI and PPP projects, including details of our planned substantive procedures and the extent of our control reliance.

– Our conclusions on the appropriateness of the Company’s fair value methodology and policy.

– Our conclusions on the appropriateness of the valuation for the investment entity subsidiary, which is driven by the valuation of the

underlying infrastructure, PFI and PPP projects, and, for the significant assumption, an indication of where the Company’s assumption lies

within our reasonable range.

– The adequacy of the disclosures, particularly as it relates to the sensitivity of the valuation inputs.

Areas of particular auditor judgement

We identified the following as the areas of particular auditor judgement:

– The discount rates used in the discount cash flow model to value the underlying infrastructure, PFI and PPP projects.

Our results

Based on the risk identified and our procedures performed, we consider the valuation of the investment in investment entity subsidiaries to be

acceptable (FY22: acceptable).

Further information in the Annual Report and accounts: See the Audit Committee Report on pages 84 to 86 for details on how the Audit

Committee considered the valuation of unlisted investments as an area of significant attention, pages 114 to 115 for the accounting policy on

the valuation of unlisted investments, and Notes 12 and 14 to the financial disclosures.

HICL Annual Report 2023104

5. Our ability to detect irregularities, and our response

Fraud – identifying and responding to risks of material misstatement due to fraud

Fraud risk

assessment

To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that

could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk

assessment procedures included:

– enquiring of directors and the Audit Committee, as to the Company’s high-level policies and procedures

to prevent and detect fraud, including the Company’s policy and channel for “whistleblowing”, as well as

whether they have knowledge of any actual, suspected or alleged fraud.

– reading Board and Audit Committee minutes.

– considering the Investment Manager’s fee arrangement and how closely it is linked to the valuation of the

Company’s assets.

– Discussions among the engagement team regarding how and where fraud might occur in the financial

statements and any potential indicators of fraud. The engagement team includes audit partners and staff

who have extensive experience of working with companies in the same sectors as the Company operates,

and this experience was relevant to the discussion about where fraud risks may arise.

Risk

communications

We communicated identified fraud risks throughout the audit team and remained alert to any indications of

fraud throughout the audit.

Fraud risks

As required by auditing standards, and taking into account possible pressures to meet profit or investment

valuation targets and our overall knowledge of the control environment, we performed procedures to address

the risk of management override of controls, in particular the risk that the Company may be in a position to

make inappropriate accounting entries and the risk of bias in accounting estimates and judgements. On this

audit we do not believe there is a fraud risk related to revenue recognition because of the simplistic nature of

income, which principally comprises dividend and interest income. We deemed that there is limited opportunity

to manipulate income recognition.

Procedures to

address fraud risks

Our audit procedures included evaluating the design, implementation, and operating effectiveness of internal

controls relevant to mitigate these risks.

We also performed procedures including:

– identifying journal entries to test based on risk criteria and comparing the identified entries to supporting

documentation. These included those posted by senior finance management; those posted and approved

by the same user; and those posted to unusual accounts.

– assessing the accounting estimate related to fair value of investments for bias.

Laws and regulations – identifying and responding to risks of material misstatement

relating to compliance with laws and regulations

Laws and regulations

risk assessment

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the

financial statements from our general commercial and sector experience, through discussion with the directors

and other management (as required by auditing standards), and discussed with the directors and other

management the policies and procedures regarding compliance with laws and regulations.

Risk communications

We communicated identified laws and regulations throughout our team and remained alert to any indications of

non-compliance throughout the audit.

Direct laws context

andlink to audit

The potential effect of these laws and regulations on the financial statements varies considerably.

The Company is subject to laws and regulations that directly affect the financial statements including:

– financial reporting legislation (including related companies legislation);

– distributable profits legislation; and

– taxation legislation.

We assessed the extent of compliance with these laws and regulations as part of our procedures on the related

financial statement items.

KPMG LLP’s Independent Auditor’s Report continued

To the members of HICL Infrastructure plc

Overview Strategic Report Governance Financials HICL Annual Report 2023 105

Most significant

indirect law/

regulationareas

Secondly, the Company is subject to many other laws and regulations where the consequences of non-

compliance could have a material effect on amounts or disclosures in the financial statements, for instance

through the imposition of fines or litigation or the loss of its license to operate in countries where the non-

adherence to laws could prevent trading in such countries.

We identified the following areas as those most likely to have such an effect:

– Anti-bribery and corruption;

– Anti-money laundering;

– Data protection;

– Competition legislation; and

– Certain aspects of company legislation recognising the financial and regulated nature of the Company’s

activities and its legal form.

Auditing standards limit the required audit procedures to identify non-compliance with these laws and

regulations to enquiry of the directors and other management and inspection of regulatory and legal

correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from

relevant correspondence, an audit will not detect that breach.

Context

Context of the ability

of the audit to detect

fraud or breaches of

law or regulation

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some

material misstatements in the financial statements, even though we have properly planned and performed our

audit in accordance with auditing standards. For example, the further removed non-compliance with laws and

regulations is from the events and transactions reflected in the financial statements, the less likely the inherently

limited procedures required by auditing standards would identify it. In addition, as with any audit, there

remained a higher risk of non-detection of fraud, as fraud may involve collusion, forgery, intentional omissions,

misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material

misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to

detect non-compliance with all laws and regulations.

HICL Annual Report 2023106

6. Our determination of materiality

The scope of our audit was influenced by our application of materiality. We set quantitative thresholds and overlay qualitative considerations to

help us determine the scope of our audit and the nature, timing and extent of our procedures, and in evaluating the effect of misstatements,

both individually and in the aggregate, on the financial statements as a whole.

£33.6M

(FY22: £30.0M)

Materiality for the

financial

statements

as a whole

What we mean

A quantitative reference for the purpose of planning and performing our audit.

Basis for determining materiality and judgements applied

Materiality for the financial statements as a whole was set at £33.6m (FY22: £30.0m) which was

determined by applying a percentage to the materiality benchmark (FY23 Total assets: £3,351.1m,

FY22 Net assets – £3,159.1m).

When using a benchmark of total assets to determine overall materiality, KPMG’s approach for listed entities

considers a guideline range of 0.5%-1% of the measure. In setting overall materiality, we applied a percentage

of 1% (FY22: 1% of net assets) to this benchmark.

There is a change to our materiality benchmark from Net assets to Total assets in the current year. We consider

the Total assets to be the main benchmark for the Company as shareholders view the valuation of the

quoted and unquoted investment portfolio as the primary financial indicator to understand the Company’s

performance. The change in benchmark does not significantly impact the materiality.

£25.2M

(FY22: £22.5M)

Performance

materiality

What we mean

Our procedures on individual account balances and disclosures were performed to a lower threshold,

performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements

in individual account balances add up to a material amount across the financial statements as a whole.

Basis for determining performance materiality and judgements applied

We have considered performance materiality at a level of 75% (FY22: 75%) of materiality Company financial

statements as a whole to be appropriate.

We applied this percentage in our determination of performance materiality because we did not identify any

factors indicating an elevated level of risk.

£1.6M

(FY22: £1.5M)

Audit misstatement

posting threshold

What we mean

This is the amount below which identified misstatements are considered to be clearly trivial from a quantitative

point of view. We may become aware of misstatements below this threshold which could alter the nature,

timing and scope of our audit procedures, for example if we identify smaller misstatements which are indicators

of fraud.

This is also the amount above which all misstatements identified are communicated to HICL Infrastructure plc’s

Audit Committee.

Basis for determining the audit misstatement posting threshold and judgements applied

We set our audit misstatement posting threshold at 5% (FY22: 5%) of our materiality for the financial

statements. We also report to the Audit Committee any other identified misstatements that warrant

reporting on qualitative grounds.

The overall materiality for the financial statements of £33.6m (FY22: £30.0m) compares as follows to the main

financial statement caption amounts:

Total income Profit before tax Net assets

FY23 FY22 FY23 FY22 FY23 FY22

Financial statement caption £202.3m £371.8m £198.4m £368.7m £3,350.0m £3,159.1m

Materiality as % of caption 16.6% 8.1% 16.9% 8.1% 1% 1%

KPMG LLP’s Independent Auditor’s Report continued

To the members of HICL Infrastructure plc

Overview Strategic Report Governance Financials HICL Annual Report 2023 107

7. The scope of our audit

Scope

What we mean

How the audit team determined the procedures to be performed.

Our audit of the Company was undertaken to the materiality level specified above and was performed by a

single audit team.

The scope of the audit work performed was fully substantive as we did not rely upon the Company’s internal

control over financial reporting.

8. Other information in the annual report

The directors are responsible for the other information presented in the Annual Report together with the financial statements. Our opinion on

the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated

below, any form of assurance conclusion thereon.

All other information

Our responsibility

Our responsibility is to read the other information and, in doing so,

consider whether, based on our financial statements audit work, the

information therein is materially misstated or inconsistent with the

financial statements or our audit knowledge.

Our reporting

Based solely on that work we have not identified material misstatements

or inconsistencies in the other information.

Strategic report and directors’ report

Our responsibility and reporting

Based solely on our work on the other information described

abovewe report to you as follows:

– we have not identified material misstatements in the strategic

reportand the directors’ report;

– in our opinion the information given in those reports for the financial

year is consistent with the financial statements; and

– in our opinion those reports have been prepared in accordance with

the Companies Act 2006.

Directors’ remuneration report

Our responsibility

We are required to form an opinion as to whether the part of the

Directors’ Remuneration Report to be audited has been properly

prepared in accordance with the Companies Act 2006.

Our reporting

In our opinion the part of the Directors’ Remuneration Report to be

audited has been properly prepared in accordance with the Companies

Act 2006.

HICL Annual Report 2023108

Corporate governance disclosures

Our responsibility

We are required to perform procedures to identify whether there is a

material inconsistency between the financial statements and our audit

knowledge, and:

– the directors’ statement that they consider that the annual report

and financial statements taken as a whole is fair, balanced and

understandable, and provides the information necessary for

shareholders to assess the Company’s position and performance,

business model and strategy;

– the section of the annual report describing the work of the

Audit Committee, including the significant issues that the Audit

Committee considered in relation to the financial statements, and

how these issues were addressed; and

– the section of the annual report that describes the review of the

effectiveness of the Company’s risk management and internal

control systems.

Our reporting

Based on those procedures, we have concluded that each of these

disclosures is materially consistent with the financial statements and

our audit knowledge.

We are also required to review the part of the Corporate Governance

Statement relating to the Company’s compliance with the provisions

of the UK Corporate Governance Code specified by the Listing Rules

for our review.

We have nothing to report in this respect.

Other matters on which we are required to report by exception

Our responsibility

Under the Companies Act 2006, we are required to report to you if,

inour opinion:

– adequate accounting records have not been kept by the Company,

or returns adequate for our audit have not been received from

branches not visited by us; or

– the financial statements and the part of the Directors’

Remuneration Report to be audited are not in agreement with the

accounting records and returns; or

– certain disclosures of directors’ remuneration specified by law are

not made; or

– we have not received all the information and explanations we

require for our audit.

Our reporting

We have nothing to report in these respects.

KPMG LLP’s Independent Auditor’s Report continued

To the members of HICL Infrastructure plc

Overview Strategic Report Governance Financials HICL Annual Report 2023 109

9. Respective responsibilities

Directors’ responsibilities

As explained more fully in their statement set out on page 93, the directors are responsible for: the preparation of the financial statements

including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of

financial statements that are free from material misstatement, whether due to fraud or error; assessing the Company’s ability to continue as a

going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either

intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,

whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not

guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can

arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the

economic decisions of users taken on the basis of the financial statements.

A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.

The Company is required to include these financial statements in an annual financial report prepared using the single electronic reporting format

specified in the TD ESEF Regulation. This auditor’s report provides no assurance over whether the annual financial report has been prepared in

accordance with that format.

10. The purpose of our audit work and to whom we owe our responsibilities

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.

Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an

auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than

the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.

Fang Fang Zhou (Senior Statutory Auditor)

for and on behalf of KPMG LLP, Statutory Auditor

Chartered Accountants

15 Canada Square

Canary Wharf

London

E14 5GL

23 May 2023

HICL Annual Report 2023110

Note

Year ended

31 March 2023

£m

Year ended

31 March 2022

£m

Dividends received 151.5 79.3

Interest received 17.5 80.5

Net gain on revaluation of investment in Investment Entity subsidiary 33.3 212.0

Total investment income

5 202.3 371.8

Company expenses

6 (3.9) (3.1)

Profit before tax 198.4 368.7

Tax – –

Profit for the year

9 198.4 368.7

Earnings per share – basic and diluted (pence)

9 9.9 19.0

All results are derived from continuing operations. There is no other comprehensive income or expense and consequently a statement of other

comprehensive income has not been prepared.

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

Income statement

For the year ended 31 March 2023

Overview Strategic Report Governance Financials HICL Annual Report 2023 111

Note

31 March 2023

£m

31 March 2022

£m

Non-current assets

Investments in Investment Entity subsidiary

12,14 3,349.7 3,158.5

Total non-current assets 3,349.7 3,158.5

Current assets

Trade and other receivables 0.4 0.2

Cash and cash equivalents 1.0 1.2

Total current assets 1.4 1.4

Total assets

 3,351.1 3,159.9

Current liabilities

Trade and other payables (1.1) (0.8)

Total current liabilities

 (1.1) (0.8)

Total liabilities

 (1.1) (0.8)

Net assets 3,350.0 3,159.1

Equity

Share capital

16 0.2 0.2

Share premium 16 1,213.3 1,055.3

Revenue reserve 16 1,992.9 1,993.3

Capital reserve

16 143.6 110.3

Total equity

11 3,350.0 3,159.1

Net assets per Ordinary Share (pence)

11 164.9 163.1

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

The financial statements were approved and authorised for issue by the Board of Directors on 23 May 2023, and signed on its behalf by:

M Bane R Akushie

Director Director

Statement of financial position

As at 31 March 2023

Company registered number: 11738373

HICL Annual Report 2023112

Statement of changes in shareholders’ equity

For the year ended 31 March 2023

Note

capital

£m

premium

£m

Revenue

reserve

£m

Capital

reserve

£m

Total

shareholders’

equity

£m

Shareholders’ equity as at 31 March 2022 0.2 1,055.3 1,993.3 110.3 3,159.1

Profit for the year – – 165.1 33.3

198.4

Issue of share capital – 160.0 – – 160.0

Cost of share issue – (2.0) – – (2.0)

Distributions paid to Company shareholders

10 – – (165.5) – (165.5)

Shareholders’ equity at 31 March 2023 0.2 1,213.3 1,992.9 143.6 3,350.0

1 Revenue and Capital reserves are described in accounting policies Note 16 – Share Capital and reserves

For the year ended 31 March 2022

Note

capital

£m

premium

£m

Revenue

reserve

£m

Capital

reserve

£m

Total

shareholders’

equity

£m

Shareholders’ equity as at 31 March 2021 0.2 1,055.3 1,996.4 (101.7) 2,950.2

Profit for the year – – 156.7 212.0

368.7

Distributions paid to Company shareholders

10 – – (159.8) – (159.8)

Shareholders’ equity at 31 March 2022 0.2 1,055.3 1,993.3 110.3 3,159.1

1 Revenue and Capital reserves are described in accounting policies Note 16 – Share Capital and reserves

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

Overview Strategic Report Governance Financials HICL Annual Report 2023 113

Cash flow statement

For the year ended 31 March 2023

Note

Year ended

31 March 2023

£m

Year ended

31 March 2022

£m

Cash flows from operating activities

Profit before tax 9 198.4 368.7

Adjustments for:

Total investment income

5 (202.3) (371.8)

Operating cash flows before movements in working capital (3.9) (3.1)

Changes in working capital:

Increase in receivables (0.2) –

Increase in payables 0.3 0.1

Cash flow from operations (3.8) (3.0)

Investment income received 169.0 163.6

Net cash from operating activities 165.2 160.6

Cash flow from investing activities

Investment in subsidiary (157.9) –

Net cash used in investing activities (157.9) –

Cash flows from financing activities

Gross proceeds from issue of share capital

16 160.0 –

Cost of share issue (2.0) –

Distributions paid to shareholders

10 (165.5) (159.8)

Net cash used in financing activities (7.5) (159.8)

Net (decrease)/increase in cash and cash equivalents (0.2) 0.8

Cash and cash equivalents at beginning of year 1.2 0.4

Cash and cash equivalents at end of year 1.0 1.2

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

HICL Annual Report 2023114

Notes to the financial statements

For the year ended 31 March 2023

1. Reporting entity

HICL Infrastructure PLC (the “Company” or “HICL”) is a public limited

company incorporated, domiciled and registered in England and

Wales in the United Kingdom. The financial statements as at and for

the year ended 31 March 2023 comprise the financial statements for

the Company only as explained in Note 2.

The Company has two Corporate Subsidiaries being HICL

Infrastructure 2 S.a.r.l. (“Luxco”) and Infrastructure Investments

Limited Partnership (“IILP”) (each a “Corporate Subsidiary” and

together the “Corporate Subsidiaries”). IILP is a direct subsidiary

of Luxco.

The Company and its Corporate Subsidiaries (together the

“Corporate Group”) invest in infrastructure projects in the United

Kingdom, Eurozone, North America and New Zealand.

2. Key accounting policies

Basis of preparation

The financial statements have been prepared in accordance with UK-

adopted International Accounting Standards (“IFRSs”).

The financial statements are presented in pounds sterling, which is

the Company’s functional currency. The principal accounting policies

applied in the preparation of the Company’s financial statements are

shown below. These policies have been consistently applied.

Going concern

The Company’s business activities, together with the factors likely to

affect its future development, performance and position are set out

in HICL’s Business Model section on page 14. The financial position

of the Company, its cash flows, and liquidity position are described

in the Financial Review on page 40. In addition, Notes 2 to 17 of the

financial statements include the Company’s objectives, policies and

processes for managing its capital; its financial risk management

objectives; details of its financial instruments and hedging activities;

and its exposures to credit risk and liquidity risk.

The Directors have assessed going concern by considering areas

of financial risk, the Company’s access to the Revolving Credit

Facility and Letter of Credit Facility (details of which are set out in

the Financial Review starting on page 40) as well as the £150m

Private Placement issue and by reviewing cash flow forecasts under

severe but plausible stress scenarios for at least 12 months after the

approval of the financial statements.

They also considered the Company’s considerable financial

resources, including indirect investments in a significant number of

project assets. The going concern analysis included an assessment

of the potential variability in returns and cash flows from project

companies including the effects of the heightened macroeconomic

volatility on demand assets as well as availability assets. The Directors

also noted that the financing for project companies is non-recourse to

the Company.

Based on this analysis, the Directors have concluded that the

Company has adequate resources to meet its liabilities as they fall

due for a period of at least 12 months from the date of approving

these financial statements (“the going concern period”). Thus,

they consider it appropriate to adopt the going concern basis of

accounting in preparing the annual financial statements.

New and revised standards

There are no new or amended accounting standards or

interpretations adopted during the year that have a significant impact

on the financial statements. The Company notes the following

standards and interpretations which were in issue but not effective at

the date of these financial statements. They are not expected to have

a material impact on the Company’s financial statements.

– IFRS 17: Insurance contracts (effective for accounting periods

beginning on or after 1 January 2023)

– Amendments to IAS 1: Classification of Liabilities as Current or

Noncurrent (effective date of 1 January 2024)

– Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure

of Accounting Policies (effective for accounting periods beginning

on or after 1 January 2023)

– Amendments to IAS 8: Definition of Accounting Estimate (effective

for accounting periods beginning on or after 1 January 2023)

Financial instruments

Financial assets and liabilities are recognised in the Statement

of Financial Position when the Company becomes a party to the

contractual provisions of the instrument. Financial assets and liabilities

are derecognised when the contractual rights to the cash flows

from the instrument expire or the asset or liability is transferred and

the transfer qualifies for derecognition in accordance with IFRS 9

‘Financial Instruments: Recognition and measurement’.

Non-derivative financial instruments

Non-derivative financial instruments comprise the Company’s

investment in the equity and debt of its direct Corporate Subsidiary,

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 loan stock of entities engaged in

infrastructure activities, which are not classified as subsidiaries of

the Company or which are subsidiaries not consolidated in the

Company’s results, are designated at fair value through profit or loss

since the Company manages these investments and makes purchase

and sale decisions based on their fair value.

Overview Strategic Report Governance Financials HICL Annual Report 2023 115

Other

Other non-derivative financial instruments are measured at amortised

cost using the effective interest method, less any impairment losses

for financial assets. Interest income or expenses, foreign exchange

gains and losses and impairment are recognised in the Income

Statement. Any gain or loss on derecognition is recognised in the

Income Statement.

Fair values

Fair value is the price that would be received to sell an asset or

paid to transfer a liability in an orderly transaction between market

participants at the measurement date in the principal or, in absence,

the most advantageous market to which the Company has access at

that date.

The fair value of the Company’s investment in Luxco is based on the

Net Asset Value of IILP and the sundry assets and liabilities of Luxco.

IILP’s Net Asset Value is based on the fair value of the underlying

investments in its portfolio of infrastructure assets, since IILP

manages these investments and makes purchase and sale decisions

based on their fair value.

The fair value of IILP’s underlying investments are determined using

the income approach, which discounts the expected cash flows

attributable to each asset at an appropriate rate to arrive at its fair

value. In determining the appropriate discount rate, regard is given to

relevant long-term government bond yields, the specific risks of each

investment and the evidence of recent transactions. Further detail on

methods and assumptions used in estimating the fair values of the

financial instruments is included in Note 14.

Investment income

Investment income comprises interest income, dividend income and

gains/(losses) on investments, which comprise the change in fair value

of the Company’s direct subsidiary. Interest income is recognised

in the Income Statement based on a calculation specified within the

financing loan agreement with Luxco. Dividend income is recognised

when the Company’s right to receive payment is established.

Share capital and share premium

Ordinary Shares are classified as equity. Costs associated with

the establishment of the Company or directly attributable to the

issue of new shares are recognised as a deduction from the share

premium account.

Equity and reserves

The Company is a UK approved Investment Trust Company.

Financial statements prepared under IFRS are not strictly required to

apply the provisions of the Statements of Recommended Practice

issued by the UK Association of Investment Companies for the

financial statements of Investment Trust Companies (the “SORP”).

However, where relevant and appropriate, the Directors have looked

to follow the recommendations of the SORP. The Directors have

chosen to rename distributable and other reserves into a Revenue

reserve and a Capital reserve respectively. The Directors have

exercised their judgement in applying the SORP and a summary of

these judgements are as follows:

– Net gains on investments are applied wholly to the Capital reserve

as they relate to the revaluation or disposal of investments;

– Dividends are applied to the Revenue reserve except under specific

circumstances where a dividend arises from a return of capital

or proceeds from a refinancing, when they are applied to the

Capital reserve;

– Fees payable are applied to the Capital reserve where the service

provided is, in substance, an intrinsic part of an intention to acquire

or dispose of an investment;

– Management fees are applied to the Revenue reserve as they

reflect ongoing asset management. Where a transaction fee

element is due on the acquisition of an investment it is applied to

the Capital reserve;

– Operating costs are applied wholly to the Revenue reserve as there

is no clear connection between the operating expenses of the

Company and the purchase and sale of an investment;

– Finance costs are applied wholly to the Revenue reserve as the

existing borrowing is not directly linked to an investment; and

– Foreign exchange movements are applied to the Revenue reserve

where they relate to movements on non-portfolio assets.

Capital management

The Company aims to operate within a gearing range of up to 20%

of Gross Asset Value, in line with the Board’s approved investment

policy, to allow it to fund new investments. The Company is an

Investment Trust and looks to raise equity to fund its acquisitions

as soon as practicable once the level of acquisitions gets to an

appropriate level. In addition to equity, the Company will use long-

term debt to fund investments.

Cash and cash equivalents

Cash and cash equivalents held by the Company comprise cash

balances, deposits held at call with banks and other short-term,

highly liquid investments with original maturities of three months or

less. Cash equivalents, including demand deposits, are held for the

purpose of meeting short-term cash commitments rather than for

investment or other purposes.

HICL Annual Report 2023116

2. Key accounting policies continued

Income tax

Income tax represents the sum of the tax currently payable and

deferred tax. Current tax is based on the taxable profit for the year.

Taxable profit differs from net profit as reported in the Income

Statement because it excludes items of income or expense that are

taxable or deductible in other years and it further excludes items

that are never taxable or deductible. Tax is calculated using tax rates

that have been enacted or substantively enacted by the balance

sheet date.

Foreign exchange gains and losses

Transactions entered into by the Company in a currency other

than its functional currency are recorded at the rates ruling when

the transactions occur. Foreign currency monetary assets and

liabilities are translated at the rates ruling at the balance sheet date.

Exchange differences arising on the re-translation of unsettled

monetary assets and liabilities are recognised immediately in the

Income Statement.

Expenses

All expenses are accounted for on an accruals basis. The Company’s

investment management fee, administration fees and all other

expenses are charged through the Income Statement.

Dividends payable

Dividends payable to the Company’s shareholders are recognised

when they become legally payable. In the case of interim dividends,

this is when they are paid. In the case of final dividends, this

is when they are approved by the shareholders at the Annual

General Meeting.

Segmental reporting

The Chief Operating Decision Maker (the “CODM”) has been

determined to be the Board, who are of the opinion that the Company

is engaged in a single segment of business, being the investment in

infrastructure. The Company has no single major customer.

The internal financial information used by the CODM on a quarterly

basis to allocate resources, assess performance and manage the

Company presents the business as a single segment comprising the

portfolio of investments in infrastructure assets.

3. Critical accounting judgements, estimates

and assumptions

The preparation of financial statements in accordance with UK

adopted 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 disclosure or to

the carrying amounts of assets and liabilities are outlined below.

Key judgements

Investment Entities

The Company has applied IFRS 10 ‘Consolidated Financial

Statements’, IFRS 11 ‘Joint Arrangements’ and IFRS 12 ‘Disclosure

of Interests in Other Entities’ in these financial statements, which

require investment entities to measure certain subsidiaries, including

those that are themselves investment entities, at fair value through the

Income Statement, rather than consolidating their results.

To determine that the Company continues to meet the definition of

an investment entity the Company is required to satisfy the following

three criteria:

– It obtains funds from one or more investors for the purpose

of providing these investors with professional investment

management services;

– It commits to its investors that its business purpose is to invest

its funds solely for returns from capital appreciation, investment

income or both; and

– It measures and evaluates the performance of substantially all of its

investments on a fair value basis.

The Corporate Subsidiaries carry out investment activities and incur

overheads and borrowings on behalf of the Company. They are

considered investment entities themselves and are therefore

measured at fair value in these financial statements.

Consistent with previous years, the Company meets the criteria due

to the following reasons:

– It delivers stable returns to shareholders through a mix of income

yield and capital appreciation;

– It provides investment management services and has several

investors who pool their funds to gain access to infrastructure-

related investment opportunities that they might not have had

access to individually; and

– It has elected to measure and evaluate the performance of all its

investments on a fair value basis. The fair value method is used

to represent the Company’s performance in its communication

to the market, including investor presentations. In addition, the

Company reports fair value information internally to Directors,

who use fair value as the primary measurement attribute to

evaluate performance.

The Directors are of the opinion that the Company has all the typical

characteristics of an investment entity and continues to meet the

definition in the standard. This conclusion is reassessed on an

annual basis.

The Company holds significant stakes in the majority of its portfolio

companies and must exercise judgement in the level of control of

the underlying portfolio company that is obtained in order to assess

whether the company should be classified as a subsidiary.

Key estimation uncertainties

The key area where estimates are significant to the financial

statements and have a significant risk of causing a material

adjustment to the carrying amounts of assets and liabilities within

the next financial year is the valuation of the Company’s Investment

Entity subsidiaries. Luxco holds the investment in IILP, which in turn

holds investments in infrastructure assets which are held at fair value.

The portfolio is well-diversified by sector, geography and underlying

risk exposures. The key risks to the portfolio are discussed in further

detail in the Risk report on page 53, with the valuation assumptions

discussed on page 46.

Notes to the financial statements continued

For the year ended 31 March 2023

Overview Strategic Report Governance Financials HICL Annual Report 2023 117

4. Geographical analysis

The tables below provide an analysis based on the geographical location of the Company’s underlying investments.

Total investment income UK Eurozone

Rest of

the World Total

31 March 2023 £115.8m £69.5m £17.0m £202.3m

% of Total investment income 57% 35% 8% 100%

31 March 2022 £283.0m £32.7m £56.1m £371.8m

% of Total investment income 76% 9% 15% 100%

Investment in Investment Entity subsidiaries UK Eurozone

Rest of

the World Total

31 March 2023 £2,318.0m £535.6m £496.1m £3,349.7m

% of Total Investments 69% 16% 15% 100%

March 2022 £2,305.7m £568.5m £284.3m £3,158.5m

% of Total Investments 73% 18% 9% 100%

5. Total income

Year ended

31 March 2023

£m

Year ended

31 March 2022

£m

Dividends received 151.5 79.3

Interest received 17.5 80.5

Net gain on revaluation of investment in Investment Entity subsidiary 33.3 212.0

Total 202.3 371.8

6. Company expenses

Year ended

31 March 2023

£m

Year ended

31 March 2022

£m

Fees to auditor 0.4 0.4

Investment Manager fees (Note 18) 0.1 0.1

Directors’ fees (Note 18) 0.5 0.6

Professional fees 2.9 2.0

Total 3.9 3.1

Fees to auditor comprise the Company’s £0.3m audit fees as well as £0.1m fees to KPMG LLP, in respect of their interim review of the

Company’s accounts (2022: £0.3m audit fees and £0.1m interim review fees). Additional fees relating to the audit of the Company’s subsidiaries

were £0.2m (2022: £0.2m). The non-audit services for the Company, its subsidiaries and affiliates was £0.4m (2022: £0.3m).

7. Employees

The Company had no employees during the year (2022: none).

HICL Annual Report 2023118

8. Income tax

Year ended

31 March 2023

£m

Year ended

31 March 2022

£m

Current taxes

Current year – –

– –

The effective rate of corporation tax in the UK for a large company is 19% (2022: 19%). The tax charge in the year was lower than the standard

and effective tax rate due to differences explained below.

Year ended

31 March 2023

£m

Year ended

31 March 2022

£m

Profit before tax

Profit before tax multiplied by the UK corporation tax rate of 19% 37.7 70.1

Effect of:

Non-deductible capital losses/(gains) (6.3) (40.3)

Non-taxable dividend income (28.8) (15.1)

Dividends designated as interest distributions (3.3) (17.5)

Other 0.7 2.8

Total – –

The Directors are of the opinion that the Company has complied with the requirements for maintaining investment trust status for the purposes

of section 1158 of the Corporation Tax Act 2010. This allows certain capital profits of the Company to be exempt from UK tax. Additionally,

the Company may designate dividends wholly or partly as interest distributions for UK tax purposes. Interest distributions are treated as tax

deductions against taxable income of the Company so that investors do not suffer double taxation on their returns.

Tax payable by investments

The financial statements do not directly include the tax charges for any of the Company’s intermediate holding companies or investments

as these are held at fair value. All of these investments and intermediate holding companies are subject to taxes in the countries in which

they operate.

9. Earnings per share

Basic and diluted earnings per share is 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.

Year ended

31 March 2023

Year ended

31 March 2022

Profit attributable to equity holders of the Company £198.4m £368.7m

Weighted average number of Ordinary Shares in issue

2,004.3m 1,936.8m

Total basic and diluted earnings per Ordinary Share 9.9 p 19.0 p

1 94,674,560 new shares were issued on 14 July 2022. At 31 March 2023 the Company had 2,031,488,061 shares in issue (31 March 2022: 1,936,813,501)

Notes to the financial statements continued

For the year ended 31 March 2023

Overview Strategic Report Governance Financials HICL Annual Report 2023 119

10. Distributions to Company shareholders

Year ended

31 March 2023

£m

Year ended

31 March 2022

£m

Amounts paid and recognised as distributions to equity holders during the year:

Fourth quarterly interim dividend for the year ended 31 March 2022 of 2.07p 40.1 40.1

First quarterly interim dividend for the year ended 31 March 2023 of 2.06p per share 41.8 39.9

Second quarterly interim dividend for the year ended 31 March 2023 of 2.06p per share 41.8 39.9

Third quarterly interim dividend for the year ended 31 March 2023 of 2.06p per share 41.8 39.9

 165.5 159.8

Amounts not recognised as distributions to equity holders during the year:

Fourth quarterly interim dividend proposed for the year ended 31 March 2023 of 2.07p 42.1 40.1

The Company has elected to distribute a percentage of the dividends paid to shareholders as an interest distribution for tax purposes.

Quarterly interest streaming fluctuates due to several factors, including the forecast annual effective interest received from underlying projects

(which moves with acquisitions and disposals) and FX hedging gains/losses.

11. Net assets per Ordinary Share

31 March 2023 31 March 2022

Shareholders’ equity as at 31 March £3,350.0m £3,159.1m

Less: fourth interim dividend £(42.1)m £(40.1)m

£3,307.9m £3,119.0m

Number of Ordinary Shares as at 31 March 2,031.5m 1,936.8m

Net assets per Ordinary Share after deducting fourth interim dividend 162.8p 161.1p

Add fourth interim dividend 2.07p 2.07p

Net assets per Ordinary Share at 31 March 164.9p 163.1p

HICL Annual Report 2023120

12. Investment in Investment Entity subsidiary

31 March 2023

£m

31 March 2022

£m

Opening balance 3,158.5 2,950.3

Additions to investment in the year 157.9 –

Gain on revaluation of investment (Note 5) 33.3 212.0

Other – (3.8)

Carrying amount at year end 3,349.7 3,158.5

The carrying amount at year end of the investment in

Investment Entity subsidiary is broken down as follows:

31 March 2023

£m

31 March 2022

£m

Equity investment in Luxembourg Corporate Subsidiary 2,152.1 1,912.4

Loan investment in Luxembourg Corporate Subsidiary 1,197.6 1,246.1

3,349.7 3,158.5

The Company records the fair value of its direct Corporate Subsidiary, Luxco, based on the Net Asset Value of IILP and the sundry assets and

liabilities of Luxco. IILP’s Net Asset Value is based on the aggregate fair value of each of its investments along with the working capital of its

intermediate holding companies.

Refer to page 46 for the valuation techniques and key model inputs used for determining investment fair values.

The Investment Manager has carried out fair market valuations of IILP’s portfolio companies as at 31 March 2023. The Directors have satisfied

themselves as to the methodology used, the discount rates applied, and the valuation. The Directors have also engaged an independent third

party with experience in valuing these types of investments to assess and opine on the appropriateness of the assumptions and valuations

determined by the Investment Manager. This work included using independent market information, reviewing a selection of underlying data

and determining an appropriate range. Based on this, the Directors received an independent opinion supporting the reasonableness of the

valuation. All investments are valued using a discounted cash flow methodology except for the A13 investment in listed senior bonds which is

valued based on quoted market price at the balance sheet date. The valuation techniques and methodologies have been applied consistently

with the prior year. Discount rates (including the effective rate on A13) range from 3.7% to 8.5% (weighted average of 7.2%) (31 March 2022:

weighted average of 6.6%).

In general, the terms of senior funding arrangements may restrict the ability of portfolio companies to distributions.

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 and have approved

the annual budget for the company; and

– Portfolio company compliance with the terms of senior funding arrangements.

13. Investments – acquisitions and disposals via the Corporate Subsidiaries

Acquisitions

The Company, via its Corporate Subsidiaries, made the following acquisitions during the year ended 31 March 2023:

– An incremental investment of £14.0m into a UK healthcare project;

– An investment of £1.4m into B247 in Germany;

– An investment of £2.9m in Road Management Group;

– An investment of £12.3m into Paris-Saclay University in France;

– The acquisition of a 6.5% stake in Cross London Trains for £105.6m; and

– The acquisition of a 40% stake in Fortysouth for £216.2m.

Notes to the financial statements continued

For the year ended 31 March 2023

Overview Strategic Report Governance Financials HICL Annual Report 2023 121

Disposals

The Company, via its Corporate Subsidiaries, made the following disposal during the year ended 31 March 2023:

– The disposal of the Queen Alexandra Hospital which generated proceeds of £108.1m.

Note 20 details the acquisitions and disposals made by the Company, via its Corporate Subsidiaries, since the year end. The amounts above

reflect the acquisitions and disposals recognised under the IFRS basis. Amounts shown in the Valuation of the Portfolio section on pages 46

to52 are under the Directors’ Valuation basis, which includes commitments.

14. 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.

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 2023

£m

31 March 2022

£m

Financial assets

Investment in Investment Entity subsidiary 3,349.7 3,158.5

Financial assets at fair value through profit or loss 3,349.7 3,158.5

Trade and other receivables 0.4 0.2

Cash and cash equivalents 1.0 1.2

Financial assets – amortised cost 1.4 1.4

Financial liabilities – other financial liabilities

Trade and other payables (1.1) (0.8)

Financial liabilities (1.1) (0.8)

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

Fair value hierarchy

The fair value hierarchy is defined as follows:

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

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

indirectly (i.e. derived from prices)

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

31 March 2023

Level 1

£m

Level 2

£m

Level 3

£m

Total

£m

Investment in Investment Entity subsidiary (Note 12) – – 3,349.7 3,349.7

31 March 2022

Level 1 Level 2 Level 3 Total

£m £m £m £m

Investment in Investment Entity subsidiary (Note 12) – – 3,158.5 3,158.5

There were no transfers between Level 1, 2 or 3 during the year. A reconciliation of the movement in Level 3 assets is disclosed in Note 12.

HICL Annual Report 2023122

14. Financial instruments continued

Level 3

Methodology Description Inputs

Fair value at

31 March (£m)

Sensitivity on key

unobservable input

Fair value impact

of sensitivities (£m)

+5%/-5%

NAV The fair value of the investment

in HICL’s Investment Entity

subsidiary, Luxco, which is

equal to its carrying value

Inputs that are not based on observable

market data. The fair value of HICL’s

investment in Luxco is based on Luxco’s

holding in IILP measured at fair value

£3,349.7 (31

March 2022:

£3,158.5)

A 5% sensitivity

on closing NAV

chosen due to

historical volatility

£167.5

The value of the Company’s investment in its Investment Entity subsidiary is sensitive to changes in the macroeconomic assumptions used as

part of the portfolio valuation process. As part of its analysis, the Directors have considered the potential impact of a change in a number of

the macroeconomic assumptions used in the valuation process. By considering these potential scenarios, the Directors are well positioned to

assess how the Company is likely to perform if affected by variables and events that are inherently outside of the control of the Directors and the

Investment Manager.

Sensitivities

In order to give investors a meaningful sensitivity analysis, the Directors have considered how changes in macroeconomic assumptions in the

underlying assets for which the Company holds an indirect interest would affect the investment that the Company has in its direct Investment

Entity subsidiary, rather than the sensitivity in the Investment Entity subsidiary. Consequently, the following numbers are presented on the

Investment Basis, with the sensitivity having the same impact on both net assets and total investment income. See also the Valuation of the

Portfolio section on page 46.

Sensitivities

-1% p.a.

change

Investment at fair

value through profit

or loss

+1% p.a.

change

Discount rates

31 March 2023 £412.1m £3,498.6m £(338.2)m

31 March 2022 +£366.5m £3,216.6m £(299.3)m

Inflation rates

31 March 2023 £(352.3)m £3,498.6m £415.1m

31 March 2022 £(294.8)m £3,216.6m +£327.8m

Cash deposit rates

31 March 2023 £(58.8)m £3,498.6m £58.2m

31 March 2022 £(30.5)m £3,216.6m +£40.4m

Debt interest rates

31 March 2023 £28.7m £3,498.6m £(20.4)m

31 March 2022 N/A £3,216.6m N/A

1 31 March 2022 sensitivity figures were originally presented using a sensitivity of 0.5%. These figures have been restated using a sensitivity of 1.0% in order to be comparable to current year figures

The Directors have considered the increase in volatility in markets and have increased the sensitivity measure from 0.5% to 1.0%. The sensitivity

assumes that the changes are for all future periods. The increase is consistent with that shown by the Company’s listed infrastructure peers and

this allows for comparisons to be made. A higher sensitivity is not considered necessary as the mix of the portfolio means that the sensitivity is

linear and it is possible to estimate the impact if percentage changes are in multiples of this sensitivity.

The Directors recognise that current levels of macroeconomic volatility are likely to give rise to materially greater possible ranges of values than

has been the case for a number of years.

15. Loans and borrowings

The Group’s multi-currency facility is held by its Corporate Subsidiary, IILP. During the year the facility was renegotiated to a £650m facility with

an extended three-year tenor, which runs to 30 June 2026.

Notes to the financial statements continued

For the year ended 31 March 2023

Overview Strategic Report Governance Financials HICL Annual Report 2023 123

16. Share capital and reserves

Ordinary Shares

31 March 2023

31 March 2022

Authorised and issued at the beginning of the year 1,936.8 1,936.8

Issued for cash 94.7 –

Authorised and issued at end of year – fully paid 2,031.5 1,936.8

The holders of the 2,031,488,061 Ordinary Shares (31 March 2022: 1,936,813,501) are entitled to receive dividends as declared from time to

time and are entitled to one vote per share at meetings of the Company.

For the year ended 31 March 2023

In July 2022, 94.7 million new Ordinary Shares of 0.01p each were issued to various institutional and retail investors at an issue price per share

(before expenses) of 169.0p.

For the year ended 31 March 2022

No new share issuances occurred during the year ended 31 March 2022.

Share capital

31 March 2023

£m

31 March 2022

£m

Opening balance 0.2 0.2

Issue of Ordinary Shares – –

Costs of issue of Ordinary Shares – –

Balance at end of year 0.2 0.2

Share premium

31 March 2023

£m

31 March 2022

£m

Opening balance 1,055.3 1,055.3

Issue of Ordinary Shares 160.0 –

Costs of issue of Ordinary Shares (2.0) –

Balance at end of year 1,213.3 1,055.3

Revenue and Capital reserves

Revenue and Capital reserves are detailed in the Statement of Changes in Equity. The Capital reserve represents the accumulated unrealised

fair value gains/losses on the Company’s investment in its Investment Entity subsidiary since acquisition on 1 April 2019.

17. Financial risk management

A review of the Corporate Group’s objectives, policies and processes for managing and monitoring risk is set out in the Risk management

section on page 70. This Note provides further detail on financial risk management, cross-referring to the Risk management section where

applicable, and includes quantitative data on specific financial risks. The Corporate Group is exposed to market risk (which includes currency

risk, interest rate risk and inflation risk), credit risk and liquidity risk arising from the financial instruments it holds through IILP as disclosed below.

The Corporate Group, via IILP, owns a portfolio of investments predominantly in the subordinated loanstock and equity of project companies.

These companies are structured at the outset to minimise financial risks where possible. Ongoing risk management occurs through the

individual boards of the project companies and monitored through regular financial and operational performance reports.

Market risk

Returns from HICL’s investments are affected by market events giving rise to changes in the value of underlying portfolio assets. 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.

HICL Annual Report 2023124

17. Financial risk management continued

As at 31 March 2023, the portfolio had five investments which are considered sensitive to GDP, comprising 18% of the portfolio value (21%

at 31 March 2022): namely, the A63, M1-A1 Road, RMG Roads, NWP and HS1. At times of higher economic activity there will be greater traffic

volumes using these roads and railways, generating increased revenues for the projects than compared to periods of lower economic activity and

they are categorised as GDP sensitive investments.

Interest rate risk

The Corporate Group has indirect exposure to interest rates through changes to the financial performance and the valuation of portfolio

companies caused by interest rate fluctuations in loans and borrowings. The Company itself does not have any borrowings but does have

an interest-bearing loan with Luxco and therefore is exposed to interest rate risk. The sensitivity of the portfolio companies to interest rates is

shown in Note 14.

Inflation risk

The infrastructure project companies in which the Corporate Group invests are generally structured so that contractual income and costs

are either wholly or partially linked to specific inflation where possible to minimise the risks of mismatch between income and costs due to

movements in inflation. The Corporate Group’s overall cash flows vary with inflation, although they are not fully correlated as not all flows are

indexed. The effects of inflation changes do not always immediately flow through to the Corporate Group’s cash flows, particularly where a

project’s loanstock debt carries a fixed coupon and the inflation changes flow through by way of changes to dividends in future periods. As RPI

is to be aligned with CPIH from 2030, RPI linked project companies have been aligned to CPIH from this date. The sensitivity of the Corporate

Group to inflation is shown on page 50.

Currency risk

The Corporate 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 against the effect of exchange rate fluctuations on the level of sterling distributions that the

Corporate Group expects to receive over the medium term, where considered appropriate. This may involve the use of forward exchange and

other currency hedging contracts at IILP level, as well as the use of Euro, Canadian dollar, US dollar, NZ dollar and other currency denominated

borrowings. At 31 March 2023, the Corporate Group, via IILP, hedged its currency exposure through Euro, Canadian dollar, New Zealand dollar

and US dollar forward contracts. This has reduced the volatility in the NAV from foreign exchange movements.

The hedging policy is designed to provide confidence in the near-term yield and to limit NAV per share sensitivity to no more than 2% for a 10%

foreign exchange movement. The sensitivity of the Corporate Group to currency risk is shown on page 50.

Credit risk

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

the Corporate Group.

The Corporate Group is subject to credit risk on its loans, receivables, cash and deposits. The Corporate Group’s cash and deposits are held

with reputable banks. The credit quality of loans and receivables within the Investment Portfolio is based on the financial performance of the

individual portfolio companies. For those assets that are not past due, it is believed that the risk of default is small and capital repayments and

interest payments will be made in accordance with the agreed terms and conditions of the investment.

The Corporate Group’s maximum exposure to credit risk over financial assets is the carrying value of those assets in the balance sheet.

The Corporate Group does not hold any collateral as security.

Liquidity risk

The table below analyses the Company’s financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet

date to the contractual maturity date.

31 March 2023

Less than

1 year

£m

Between 1

and 2 years

£m

Between 2

and 5 years

£m

More than

5 years

£m

Trade and other payables 1.1 – – –

Total 1.1 – – –

31 March 2022

Less than

1 year £m

Between 1

and 2 years

£m

Between 2

and 5 years

£m

More than

5 years

£m

Trade and other payables 0.8 – – –

Total 0.8 – – –

Notes to the financial statements continued

For the year ended 31 March 2023

Overview Strategic Report Governance Financials HICL Annual Report 2023 125

18. Related party transactions

InfraRed was appointed under an Investment Management Agreement, dated 4 March 2019, as Investment Manager to, and the AIFM of HICL.

The Investment Management Agreement may be terminated by either party to the agreement, being HICL or InfraRed, giving three years’

written notice or if InfraRed’s appointment as Operator (see below) is terminated. Under the Investment Management Agreement, InfraRed is

entitled to a fee of £0.1m per annum, payable half-yearly in arrears by the Company and which is subject to review, from time to time.

The Investment Manager fees charged to the Company were £0.1m (2022: £0.1m) (disclosed as Investment Manager fees in Note 6).

InfraRed is also the Operator of IILP, the Corporate Subsidiary through which HICL holds its investments. InfraRed has been appointed as the

Operator by the General Partner of IILP, Infrastructure Investments General Partner Limited, a company within the same Group as InfraRed.

The Operator and the General Partner may each terminate the appointment of the Operator by either party giving three years’ written notice.

Either the Operator or the General Partner may terminate the appointment of the Operator by written notice if the Investment Management

Agreement is terminated in accordance with its terms. The General Partner’s appointment does not have a fixed term, however if InfraRed

ceases to be the Operator, HICL has the option to buy the entire share capital of the General Partner and the InfraRed Group has the option

to sell the entire share capital of the General Partner to HICL, in both cases for nominal consideration. The Directors consider the value of the

option to be insignificant.

In the year to 31 March 2023, in aggregate InfraRed and the General Partner were entitled to fees and/or profit share equal to: 1.1 per cent per

annum of the Adjusted Gross Asset Value of all investments of HICL up to £750m, 1.0 per cent per annum for the incremental value in excess of

£750m up to £1,500m, 0.9 per cent for the incremental value in excess of £1,500m, 0.8 per cent for the incremental value in excess of £2,250m

and 0.65 per cent for the incremental value in excess of £3,000m.

The total Operator fees were £32.5m (2022: £29.1m) of which £8.3m remained payable at 31 March 2023 (2022: £7.4m).

InfraRed is 80% owned by Sun Life Financial Inc. (together with its subsidiaries and joint ventures, “Sun Life”). InfraRed is a distinct business

under SLC Management, the alternatives asset manager of Sun Life under a put and call framework agreed with the InfraRed owners,

exercisable after four and five years respectively from 1 July 2020.

The Directors of the Company, who are considered to be key management, received fees for their services. Their fees were £0.5m

(2022: £0.6m) for the year ended 31 March 2023 (see Note 6). One Director also receives fees for serving as Director of the Luxembourg

subsidiary – the annual fees are £7.5k (2022: £7k). (see the Directors’ Remuneration Report on page 94).

19. Guarantees and other commitments

As at 31 March 2023, the Company, via a Corporate Subsidiary, had £274.2m of commitments for future project investments (31 March

2022: £94.4m).

20. Events after balance sheet date

On 21 April 2023, HICL, via a corporate subsidiary, acquired a 40% stake in the Texas Nevada Transmission Project. The interest was acquired

from John Hancock. HICL’s total investment into the Project will amount to USD 255.9m.

On 4 May 2023, via a corporate subsidiary, HICL acquired a 5.9% equity interest in Altitude Infra THD. The interest was acquired from Altitude

Group. HICL’s total investment into the Project will amount to c. EUR 97m.

On 25 April 2023, the Board announced that, via a corporate subsidiary, HICL had signed an agreement to dispose of 10% of its 33% interest in

the Northwest Parkway for USD 86m. The transaction is expected to complete by 30 June 2023.

On 22 May 2023, the Company’s corporate subsidiary, IILP, issued £150m of Private Placement loan notes. The notes were issued in two

tranches; £100m expiring in 2033 and £50m expiring in 2035. The weighted average yield is 5.80% (5.75% after hedging).

HICL Annual Report 2023126

21. Related undertakings

Below is a list of the Company’s subsidiaries and related undertakings – incorporated in the United Kingdom unless otherwise stated. Further,

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).

Entity Registered address

Shareholding

Year end

Profit/

(Loss)

£m

Aggregate

Capital &

Reserves

£m31-Mar-23 31-Mar-22

2003 Schools Services

(Holdings) Limited

Cannon Place, 78 Cannon Street,

London, EC4N 6AF

– 100% N/A

N/A

2003 Schools Services Limited Cannon Place, 78 Cannon Street,

London, EC4N 6AF

– 100% N/A

N/A

Academy Services Norwich

Holdings Limited

10 St. Giles Square, London, United

Kingdom, WC2H 8AP

75% 75% N/A

N/A

Academy Services Norwich Limited 10 St. Giles Square, London, United

Kingdom, WC2H 8AP

75% 75% N/A

N/A

Academy Services Oldham

Holdings Limited

10 St. Giles Square, London, United

Kingdom, WC2H 8AP

75% 75% N/A

N/A

Academy Services Oldham Limited 10 St. Giles Square, London, United

Kingdom, WC2H 8AP

75% 75% N/A

N/A

Academy Services Sheffield

Holdings Limited

10 St. Giles Square, London, United

Kingdom, WC2H 8AP

75% 75% N/A

N/A

Academy Services Sheffield Limited 10 St. Giles Square, London, United

Kingdom, WC2H 8AP

75% 75% N/A

N/A

ADAGIA B.V. BV Strawinskylaan 1021, 1077 XX,

Amsterdam, Netherlands

100% 100% N/A

N/A

Addiewell Prison (Holdings) Limited C/O Sodexo Remote Sites Limited,

4thFloor, The Exchange No.1, 62 Market

Street, Aberdeen, Scotland, AB11 5PJ

67% 67% N/A

N/A

Addiewell Prison Limited C/O Sodexo Remote Sites Limited,

4thFloor, The Exchange No.1, 62 Market

Street, Aberdeen, Scotland, AB11 5PJ

67% 67% N/A

N/A

Affinity Water Acquisitions

(HoldCo) Limited

The Hub, Tamblin Way, Hatfield,

Hertfordshire, United Kingdom,

AL10 9EZ

– 33% N/A

N/A

Affinity Water Acquisitions

(Investments) Limited

The Hub, Tamblin Way, Hatfield,

Hertfordshire,United Kingdom,

AL109EZ

– 33% N/A

N/A

Affinity Water Acquisitions

(MidCo) Limited

The Hub, Tamblin Way, Hatfield,

Hertfordshire, United Kingdom,

AL109EZ

– 33% N/A

N/A

Affinity Water Acquisitions Limited The Hub, Tamblin Way, Hatfield,

Hertfordshire, United Kingdom,

AL109EZ

– 33% N/A

N/A

Affinity Water Capital Funds Limited The Hub, Tamblin Way, Hatfield,

Hertfordshire, United Kingdom,

AL109EZ

33% 33% 31 Mar 22 (4.3) 177.7

Affinity Water East Limited The Hub, Tamblin Way, Hatfield,

Hertfordshire, United Kingdom,

AL109EZ

33% 33% 31 Mar 22 2.4 65.2

Affinity Water Finance (2004) PLC The Hub, Tamblin Way, Hatfield,

Hertfordshire, United Kingdom,

AL109EZ

33% 33% N/A

N/A

Notes to the financial statements continued

For the year ended 31 March 2023

Overview Strategic Report Governance Financials HICL Annual Report 2023 127

Entity Registered address

Shareholding

Year end

Profit/

(Loss)

£m

Aggregate

Capital &

Reserves

£m31-Mar-23 31-Mar-22

Affinity Water Finance PLC The Hub, Tamblin Way, Hatfield,

Hertfordshire, United Kingdom,

AL10 9EZ

33% – N/A

N/A

Affinity Water Holdco Finance Limited The Hub, Tamblin Way, Hatfield,

Hertfordshire, United Kingdom,

AL109EZ

33% – 31 Mar 22 (0.9) 287.1

Affinity Water Holdings Limited The Hub, Tamblin Way, Hatfield,

Hertfordshire, United Kingdom,

AL109EZ

33% 33% 31 Mar 22 0.0 291.7

Affinity Water Limited The Hub, Tamblin Way, Hatfield,

Hertfordshire, United Kingdom,

AL109EZ

33% 33% 31 Mar 22 (96.9) 44.3

Affinity Water Pension Trustees Limited The Hub, Tamblin Way, Hatfield,

Hertfordshire, United Kingdom,

AL109EZ

33% 33% N/A

N/A

Affinity Water Programme

FinanceLimited

The Hub, Tamblin Way, Hatfield,

Hertfordshire, United Kingdom,

AL109EZ

– 33% N/A

N/A

Affinity Water Shared Services Limited The Hub, Tamblin Way, Hatfield,

Hertfordshire, United Kingdom,

AL109EZ

– 33% N/A

N/A

Affinity Water Southeast Limited The Hub, Tamblin Way, Hatfield,

Hertfordshire, United Kingdom,

AL109EZ

33% 33% 31 Mar 22 2.1 66.7

AGP (2) Limited 8 White Oak Square, London Road,

Swanley, United Kingdom, BR8 7AG

100% 100% N/A

N/A

AGP Holdings (1) Limited 8 White Oak Square, London Road,

Swanley, United Kingdom, BR8 7AG

100% 100% N/A

N/A

Albion Healthcare (Doncaster)

HoldingsLimited

Third Floor Broad Quay House,

PrinceStreet, Bristol, United Kingdom,

BS1 4DJ

50% 50% N/A

N/A

Albion Healthcare (Doncaster) Limited Third Floor Broad Quay House,

PrinceStreet, Bristol, United Kingdom,

BS1 4DJ

50% 50% N/A

N/A

Albion Healthcare (Oxford)

HoldingsLimited

Third Floor Broad Quay House,

PrinceStreet, Bristol, United Kingdom,

BS1 4DJ

25% 25% N/A

N/A

Albion Healthcare (Oxford) Limited Third Floor Broad Quay House,

PrinceStreet, Bristol, United Kingdom,

BS1 4DJ

25% 25% N/A

N/A

Amalie Infrastructure Limited Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Amalie PFI (UK) Limited Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% 31 Mar 22 2.3 34.8

Annes Gate Property Plc 8 White Oak Square, London Road,

Swanley, United Kingdom, BR8 7AG

100% 100% N/A

N/A

Aotearoa Towers GP limited 15 Customs Street West, Auckland

Central, Auckland, 1010 , New Zealand

40% – N/A

N/A

HICL Annual Report 2023128

Entity Registered address

Shareholding

Year end

Profit/

(Loss)

£m

Aggregate

Capital &

Reserves

£m31-Mar-23 31-Mar-22

Aotearoa Towers Group LP 15 Customs Street West, Auckland

Central, Auckland, 1010 , New Zealand

40% – N/A

N/A

Aotearoa Towers Hold LP 15 Customs Street West, Auckland

Central, Auckland, 1010 , New Zealand

40% – N/A

N/A

Ashburton Services (Holdings) Limited Cannon Place, 78 Cannon Street,

London, United Kingdom, EC4N 6AF

100% 100% N/A

N/A

Ashburton Services Limited Cannon Place, 78 Cannon Street,

London, United Kingdom, EC4N 6AF

100% 100% N/A

N/A

Aspire Defence Finance plc Aspire Business Centre, Ordnance

Road, Tidworth, United Kingdom,

SP9 7QD

12% 12% N/A

N/A

Aspire Defence Holdings Limited Aspire Business Centre, Ordnance

Road, Tidworth, United Kingdom,

SP9 7QD

12% 12% N/A

N/A

Aspire Defence Limited Aspire Business Centre, Ordnance

Road, Tidworth, United Kingdom,

SP9 7QD

12% 12% N/A

N/A

Atlandes 15, avenue Léonard de Vinci, CS60024,

Cedex, Pessac, 33615, France

21% 21% N/A

N/A

Axiom Education (Edinburgh)

Holdings Limited

Blake House 3 Frayswater Place,

Cowley, Uxbridge, Middlesex,

United Kingdom, UB8 2AD

100% 100% N/A

N/A

Axiom Education

(Edinburgh) Limited

Blake House 3 Frayswater Place,

Cowley, Uxbridge, Middlesex,

UnitedKingdom, UB8 2AD

100% 100% 31 Dec 21 1.8 (36.8)

Axiom Education (Perth & Kinross)

Holdings Limited

Blake House 3 Frayswater Place,

Cowley, Uxbridge, Middlesex,

UnitedKingdom, UB8 2AD

100% 100% N/A

N/A

Axiom Education

(Perth & Kinross) Limited

Blake House 3 Frayswater Place,

Cowley, Uxbridge, Middlesex,

UnitedKingdom, UB8 2AD

100% 100% 31 Dec 21 1.0 (81.5)

BAAK Blankenburg B.V. (Project Co) Strawinskylaan 1021, 1077 XX,

Amsterdam, Netherlands

70% 70% 31 Dec 21 11.5 584.1

Bangor & Nendrum Schools Services

Holdings Limited

50 Bedford Street, Belfast,

UnitedKingdom, BT2 7FW

26% 26% N/A

N/A

Bangor & Nendrum Schools

Services Limited

50 Bedford Street, Belfast,

UnitedKingdom, BT2 7FW

26% 26% N/A

N/A

BaS LIFT limited 5 The Triangle, Wildwood Drive,

Worcester, Worcestershire,

UnitedKingdom, WR5 2QX

60% 60% N/A

N/A

BaSS LIFT Holdings Limited 5 The Triangle, Wildwood Drive,

Worcester, Worcestershire,

UnitedKingdom, WR5 2QX

100% 100% N/A

N/A

Bee Invest 1 91 RUE DU FAUBOURG SAINT

HONORE 75008 PARIS

100% 100% N/A

N/A

Betjeman Holdings Jvco Limited 5th Floor Kings Place 90 York Way,

London, United Kingdom, N1 9AG

22% 22% 31 Mar 22 0.0 336.4

Betjeman Holdings Midco Limited 5th Floor Kings Place 90 York Way,

London, United Kingdom, N1 9AG

22% 22% 31 Mar 22 (29.5) 81.6

Notes to the financial statements continued

For the year ended 31 March 2023

21. Related undertakings continued

Overview Strategic Report Governance Financials HICL Annual Report 2023 129

Entity Registered address

Shareholding

Year end

Profit/

(Loss)

£m

Aggregate

Capital &

Reserves

£m31-Mar-23 31-Mar-22

Betjeman Holdings Limited 5th Floor Kings Place 90 York Way,

London, United Kingdom, N1 9AG

22% 22% 31 Mar 22 (29.5) 81.6

Betjeman Holdings Midco Limited 5th Floor Kings Place 90 York Way,

London, United Kingdom, N1 9AG

22% 22% 31 Mar 22 (12.4) 257.4

Birmingham and Solihull

(Fundco 1) Limited

5 The Triangle, Wildwood Drive,

Worcester, Worcestershire,

UnitedKingdom, WR5 2QX

60% 60% N/A

N/A

Birmingham and Solihull

(Fundco 2) Limited

5 The Triangle, Wildwood Drive,

Worcester, Worcestershire,

UnitedKingdom, WR5 2QX

60% 60% N/A

N/A

Birmingham and Solihull

(Fundco 3) Limited

5 The Triangle, Wildwood Drive,

Worcester, Worcestershire,

UnitedKingdom, WR5 2QX

60% 60% N/A

N/A

Birmingham and Solihull

(Fundco 4) Limited

5 The Triangle, Wildwood Drive,

Worcester, Worcestershire,

UnitedKingdom, WR5 2QX

60% 60% N/A

N/A

Birmingham and Solihull Local

Improvement Finance Trust Limited

5 The Triangle, Wildwood Drive,

Worcester, Worcestershire,

UnitedKingdom, WR5 2QX

100% 100% N/A

N/A

Blue Light Holdings Limited Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Blue (Gloucestershire Fire)

(Holdings) Limited

10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

75% 75% N/A

N/A

Blue (Gloucestershire Fire) Limited 10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

75% 75% N/A

N/A

BNC IXAS SPC Holding B.V

(Incorporated in Holland)

Ringwade 71, 3439 LM Nieuwegein,

Netherlands

100% 100% N/A

N/A

BNC Pi2 Holding B.V.

(Incorporated in Holland)

Ringwade 71, 3439 LM Nieuwegein,

Netherlands

100% 100% N/A

N/A

Boldon School (Holdings) Limited Cannon Place, 78 Cannon Street,

London, United Kingdom, EC4N 6AF

100% 100% N/A

N/A

Boldon School Limited Cannon Place, 78 Cannon Street,

London, United Kingdom, EC4N 6AF

100% 100% N/A

N/A

Brentwood Healthcare

Partnerships Holdings Limited

10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

75% 75% N/A

N/A

Brentwood Healthcare

Partnerships Limited

10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

75% 75% N/A

N/A

By Education (Barking)

Holdings Limited

First Floor Templeback, 10 Temple

Back, Bristol, United Kingdom, BS1 6FL

100% 100% N/A

N/A

By Education (Barking) Limited First Floor Templeback, 10 Temple

Back, Bristol, United Kingdom, BS1 6FL

100% 100% N/A

N/A

ByCentral (Holdings) Limited 8 White Oak Square London Road,

Swanley, United Kingdom, BR8 7AG

100% 100% N/A

N/A

ByCentral Limited 8 White Oak Square London Road,

Swanley, United Kingdom, BR8 7AG

100% 100% N/A

N/A

ByWest (Holdings) Limited 8 White Oak Square London Road,

Swanley, United Kingdom, BR8 7AG

100% 100% N/A

N/A

HICL Annual Report 2023130

Entity Registered address

Shareholding

Year end

Profit/

(Loss)

£m

Aggregate

Capital &

Reserves

£m31-Mar-23 31-Mar-22

ByWest Limited 8 White Oak Square London Road,

Swanley, United Kingdom, BR8 7AG

100% 100% N/A

N/A

CAE Aircrew Training Services Plc RAF Benson, Wallingford, Oxfordshire,

United Kingdom, OX10 6AA

22% 22% N/A

N/A

Catalyst Healthcare (Romford)

Financing Plc

C/O Albany Spc Services Ltd 3rd Floor,

3-5 Charlotte Street, Manchester,

UnitedKingdom, M1 4HB

67% 67% N/A

N/A

Catalyst Healthcare (Romford)

Holdings Limited

C/O Albany Spc Services Ltd 3rd Floor,

3-5 Charlotte Street, Manchester,

UnitedKingdom, M1 4HB

67% 67% N/A

N/A

Catalyst Healthcare (Romford) Limited C/O Albany Spc Services Ltd 3rd Floor,

3-5 Charlotte Street, Manchester,

UnitedKingdom, M1 4HB

67% 67% N/A

N/A

Catalyst Higher Education

(Sheffield) Holdings Limited

C/O Albany Spc Services Ltd 3rd Floor,

3-5 Charlotte Street, Manchester,

UnitedKingdom, M1 4HB

50% 50% N/A

N/A

Catalyst Higher Education

(Sheffield) plc

C/O Albany Spc Services Ltd 3rd Floor,

3-5 Charlotte Street, Manchester,

UnitedKingdom, M1 4HB

50% 50% N/A

N/A

Central Blackpool PCC Holding

Company Limited

10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

75% 75% N/A

N/A

Central Blackpool PCC Limited 10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

75% 75% N/A

N/A

Children’s Ark Partnerships Holding

Limited

10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

50% 50% N/A

N/A

Children’s Ark Partnerships Limited 10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

50% 50% N/A

N/A

Citylink Telecommunications

Holdings Limited

C/O Interpath Ltd, 10 Fleet Place,

London, EC4M 7RB

34% 34% N/A

N/A

Citylink Telecommunications Limited C/O Interpath Ltd, 10 Fleet Place,

London, EC4M 7RB

34% 34% N/A

N/A

Claymore Road (Holdings) Limited Cannon Place, 78 Cannon Street,

London, United Kingdom, EC4N 6AF

50% 50% N/A

N/A

Claymore Road Limited Cannon Place, 78 Cannon Street,

London, United Kingdom, EC4N 6AF

50% 50% N/A

N/A

Connect M1-A1 Holdings Limited Q14 Quorum Business Park, Benton

Lane, Newcastle Upon Tyne, England,

United Kingdom, NE12 8BU

30% 30% N/A

N/A

Connect M1-A1 Limited Q14 Quorum Business Park, Benton

Lane, Newcastle Upon Tyne, England,

United Kingdom, NE12 8BU

30% 30% 31 Mar 22 3.1 46.4

Consort Healthcare

(Birmingham) Funding plc

C/O Pario Ltd 18 Riversway Business

Village, Navigation Way, Preston,

England, PR2 2YP

30% 30% N/A

N/A

Consort Healthcare (Birmingham)

Holdings Limited

C/O Pario Ltd 18 Riversway Business

Village, Navigation Way, Preston,

England, PR2 2YP

30% 30% N/A

N/A

Notes to the financial statements continued

For the year ended 31 March 2023

21. Related undertakings continued

Overview Strategic Report Governance Financials HICL Annual Report 2023 131

Entity Registered address

Shareholding

Year end

Profit/

(Loss)

£m

Aggregate

Capital &

Reserves

£m31-Mar-23 31-Mar-22

Consort Healthcare (Birmingham)

Intermediate Limited

C/O Pario Ltd 18 Riversway Business

Village, Navigation Way, Preston,

England, PR2 2YP

30% 30% N/A

N/A

Consort Healthcare

(Birmingham) Limited

C/O Pario Ltd 18 Riversway Business

Village, Navigation Way, Preston,

England, PR2 2YP

30% 30% N/A

N/A

Consort Healthcare (Blackburn)

Funding Plc

8 White Oak Square, Swanley, Kent,

United Kingdom, BR8 7AG

100% 100% N/A

N/A

Consort Healthcare (Blackburn)

Holdings Limited

8 White Oak Square, Swanley, Kent,

United Kingdom, BR8 7AG

100% 100% N/A

N/A

Consort Healthcare (Blackburn)

Intermediate Limited

8 White Oak Square, Swanley, Kent,

United Kingdom, BR8 7AG

100% 100% N/A

N/A

Consort Healthcare

(Blackburn) Limited

8 White Oak Square, Swanley, Kent,

United Kingdom, BR8 7AG

100% 100% N/A

N/A

Consort Healthcare (Mid Yorks)

Funding Plc

8 White Oak Square, London Road,

Swanley, Kent, United Kingdom,

BR8 7AG

100% 100% N/A

N/A

Consort Healthcare (Mid Yorks)

Holdings Limited

8 White Oak Square, London Road,

Swanley, Kent, United Kingdom,

BR87AG

100% 100% N/A

N/A

Consort Healthcare (Mid Yorkshire)

Intermediate Limited

8 White Oak Square, London Road,

Swanley, Kent, United Kingdom,

BR87AG

100% 100% N/A

N/A

Consort Healthcare

(Mid Yorkshire) Limited

8 White Oak Square, London Road,

Swanley, Kent, United Kingdom,

BR87AG

100% 100% N/A

N/A

Consort Healthcare (Salford)

Holdings Limited

ALBANY SPC SERVICES LTD, Third

Floor, 3-5 Charlotte St, Manchester,

United Kingdom, M1 4HB

50% 50% N/A

N/A

Consort Healthcare (Salford)

Intermediate Limited

ALBANY SPC SERVICES LTD, Third

Floor, 3-5 Charlotte St, Manchester,

United Kingdom, M1 4HB

50% 50% N/A

N/A

Consort Healthcare (Salford) Plc ALBANY SPC SERVICES LTD, Third

Floor, 3-5 Charlotte St, Manchester,

United Kingdom, M1 4HB

50% 50% N/A

N/A

Consort Healthcare (Tameside)

Holdings Limited

ALBANY SPC SERVICES LTD, Third

Floor, 3-5 Charlotte St, Manchester,

United Kingdom, M1 4HB

50% 50% N/A

N/A

Consort Healthcare (Tameside)

Intermediate Limited

ALBANY SPC SERVICES LTD, Third

Floor, 3-5 Charlotte St, Manchester,

United Kingdom, M1 4HB

50% 50% N/A

N/A

Consort Healthcare (Tameside) Plc ALBANY SPC SERVICES LTD, Third

Floor, 3-5 Charlotte St, Manchester,

United Kingdom, M1 4HB

50% 50% N/A

N/A

Criterion Healthcare Holdings Limited C/O Equitix Management Services Ltd

2nd Floor, Toronto Square, Toronto

Street, Leeds, United Kingdom, LS12HJ

36% 36% N/A

N/A

Criterion Healthcare Plc C/O Equitix Management Services Ltd

2nd Floor, Toronto Square, Toronto

Street, Leeds, United Kingdom, LS12HJ

36% 36% N/A

N/A

HICL Annual Report 2023132

Entity Registered address

Shareholding

Year end

Profit/

(Loss)

£m

Aggregate

Capital &

Reserves

£m31-Mar-23 31-Mar-22

Cross London Trains Finance

Company Limited

8 White Oak Square, London Road,

Swanley, Kent, BR8 7AG

6% 6% N/A

N/A

Cross London Trains Holdco 1 Limited 8 White Oak Square, London Road,

Swanley, Kent, BR8 7AG

6% - 30 June 22 59.6 676.5

Cross London Trains Holdco 2 Limited 8 White Oak Square, London Road,

Swanley, Kent, BR8 7AG

6% - 30 June 22 47.5 (195.1)

Cross London Trains Limited 8 White Oak Square, London Road,

Swanley, Kent, BR8 7AG

6% - 30 June 22 48.2 (118.9)

CSES (Dorset) Limited Level 7 One Bartholomew Close, Barts

Square, London, United Kingdom,

EC1A7BL

100% 100% N/A

N/A

CSM PPP Services Holdings Limited

(Incorporated in Ireland)

Suite 54, Morrison Chambers, 32

Nassau Street, Dublin 2, Ireland

76% 76% N/A

N/A

CSM PPP Services Limited

(Incorporated in Ireland)

Suite 54, Morrison Chambers, 32

Nassau Street, Dublin 2, Ireland

76% 76% N/A

N/A

CVS Leasing Limited RAF Benson, Wallingford, Oxfordshire,

United Kingdom, OX10 6AA

87% 87% N/A

N/A

D3 – Societe de la deviation de

Troissereux (Incorporated in France)

21 rue Hippolyte Bayard, PAE du

Haut-Villé, 60000 Beauvais, France

90% 90% N/A

N/A

Daiwater Investment Limited The Hub, Tamblin Way, Hatfield,

Hertfordshire, United Kingdom,

AL109EZ

37% 37% 31 Mar 22 0.0 747.9

Derby School Solutions

(Holdings)Limited

Cannon Place, 78 Cannon Street,

London, England, EC4N 6AF

100% 100% N/A

N/A

Derby School Solutions Limited Cannon Place, 78 Cannon Street,

London, England, EC4N 6AF

100% 100% N/A

N/A

Diamond Transmission

Partners BBE Limited

Mid City Place, 71 High Holborn,

London, United Kingdom, WC1V 6BA

49% 49% N/A

N/A

Diamond Transmission

Partners BBE Holdings Limited

Mid City Place, 71 High Holborn,

London, United Kingdom, WC1V 6BA

49% 49% N/A

N/A

Diamond Transmission Partners

Galloper (Holdings) Limited

Mid City Place, 71 High Holborn,

London, United Kingdom, WC1V 6BA

49% 49% N/A

N/A

Diamond Transmission Partners

Galloper Limited

Mid City Place, 71 High Holborn,

London, United Kingdom, WC1V 6BA

49% 49% N/A

N/A

Diamond Transmission Partners

Galloper Limited

Mid City Place, 71 High Holborn,

London, United Kingdom, WC1V 6BA

49% 49% N/A

N/A

Diamond Transmission

Partners RB (Holdings) Limited

Mid City Place, 71 High Holborn,

London, United Kingdom, WC1V 6BA

49% 49% N/A

N/A

Diamond Transmission

Partners RB Limited

Mid City Place, 71 High Holborn,

London, United Kingdom, WC1V 6BA

49% 49% N/A

N/A

Diamond Transmission Partners

Walney Extension (Holdings) Limited

Mid City Place, 71 High Holborn,

London, United Kingdom, WC1V 6BA

29% 29% N/A

N/A

Diamond Transmission Partners

Walney Extension Limited

Mid City Place, 71 High Holborn,

London, United Kingdom, WC1V 6BA

29% 29% N/A

N/A

Directroute (Tuam) Holdings Limited M17/M18 Operations Centre, Furzy Park,

Athenry, Co Galway, Ireland

100% 100% N/A

N/A

Notes to the financial statements continued

For the year ended 31 March 2023

21. Related undertakings continued

Overview Strategic Report Governance Financials HICL Annual Report 2023 133

Entity Registered address

Shareholding

Year end

Profit/

(Loss)

£m

Aggregate

Capital &

Reserves

£m31-Mar-23 31-Mar-22

Directroute (Tuam) Limited M17/M18 Operations Centre, Furzy Park,

Athenry, Co Galway, Ireland

100% 100% N/A

N/A

Dorset Emergency Services PPP

(Holdings) Limited

Unit 18 Riversway Business Village

Navigation Way, Ashton-on-Ribble,

Preston,United Kingdom, PR2 2YP

100% 100% N/A

N/A

Ealing Care Alliance (Holdings) Limited 10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

63% 63% N/A

N/A

Ealing Care Alliance Limited 10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

63% 63% N/A

N/A

Ealing Schools Partnerships

Holdings Limited

10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

50% 50% N/A

N/A

Ealing Schools Partnerships Limited 10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

50% 50% N/A

N/A

Eastbury Park (Holdings) Limited 8 White Oak Square, London Road,

Swanley, United Kingdom, BR8 7AG

50% 50% N/A

N/A

Eastbury Park Limited 8 White Oak Square, London Road,

Swanley, United Kingdom, BR8 7AG

50% 50% N/A

N/A

Education 4 Ayrshire

Holdings Limited

2 Lochside View Edinburgh, United

Kingdom, EH12 1LB

100% 100% N/A

N/A

Education 4 Ayrshire Limited 2 Lochside View Edinburgh,

UnitedKingdom, EH12 1LB

100% 100% N/A

N/A

EIPF 15, avenue Léonard de Vinci, CS60024,

Cedex, Pessac, 33615, France

70% 70% N/A

N/A

Emblem Schools (Holdings) Limited 2nd Floor, 11 Thistle Street, Edinburgh,

United Kingdom, EH2 1DF

30% 30% N/A

N/A

Emblem Schools Limited 2nd Floor, 11 Thistle Street, Edinburgh,

United Kingdom, EH2 1DF

30% 30% N/A

N/A

Enterprise Civic Buildings (Holdings)

Limited

Unit 18 Navigation Way, Ashton-on-

Ribble, Preston,United Kingdom,

PR22YP

100% 100% N/A

N/A

Enterprise Civic Buildings Limited Unit 18 Navigation Way, Ashton-on-

Ribble, Preston,United Kingdom,

PR22YP

100% 100% N/A

N/A

Enterprise Education Conwy Limited Unit 18 Riversway Business Village

Navigation Way, Ashton-on-Ribble,

Preston, United Kingdom, PR2 2YP

90% 90% N/A

N/A

Enterprise Education Holdings

Conwy Limited

Unit 18 Riversway Business Village

Navigation Way, Ashton-on-Ribble,

Preston, United Kingdom, PR2 2YP

90% 90% N/A

N/A

Enterprise Healthcare

Holdings Limited

Unit 18 Riversway Business Village

Navigation Way, Ashton-on-Ribble,

Preston, England, PR2 2YP

100% 100% N/A

N/A

Enterprise Healthcare Limited Unit 18 Riversway Business Village

Navigation Way, Ashton-on-Ribble,

Preston, United Kingdom, PR2 2YP

100% 100% N/A

N/A

Euro IV PPP Platform

Limited Partnership

1st Floor Connaught House, 1

Burlington Road, Dublin 4, Ireland

100% 100% N/A

N/A

HICL Annual Report 2023134

Entity Registered address

Shareholding

Year end

Profit/

(Loss)

£m

Aggregate

Capital &

Reserves

£m31-Mar-23 31-Mar-22

European Healthcare Projects Limited Level 7 One Bartholomew Close, Barts

Square, London, United Kingdom,

EC1A7BL

100% 100% N/A

N/A

Falkirk Schools Gateway HC Limited 1 George Square, Glasgow, Scotland,

G2 1AL

29% 29% N/A

N/A

Falkirk Schools Gateway Limited 1 George Square, Glasgow, Scotland,

G2 1AL

29% 29% 31 Mar 22 0.1 (47.1)

FCC (East Ayrshire) Holdings Limited 2nd Floor, 11 Thistle Street, Edinburgh,

United Kingdom, EH2 1DF

26% 26% N/A

N/A

FCC (East Ayrshire) Limited 2nd Floor, 11 Thistle Street, Edinburgh,

United Kingdom, EH2 1DF

26% 26% N/A

N/A

Fibre Business Infrastructure

France SAS

91 Rue du Faubourg Saint Honore,

75008, Paris 8, France

100% – N/A

N/A

Galvani Bidco Limited 3rd Floor, South Building, 200

Aldersgate Street, London,

UnitedKingdom, EC1A 4HD

19% – 31 Dec 21 31.8 362.5

Galvani JVCo Limited 3rd Floor, South Building, 200

Aldersgate Street, London,

UnitedKingdom, EC1A 4HD

19% – 31 Dec 21 (7.9) 334.0

Galvani Midco Limited 3rd Floor, South Building, 200

Aldersgate Street, London,

UnitedKingdom, EC1A 4HD

19% – 31 Dec 21 6.6 336.9

GGB inBalans B.V Hagenweg 3 c, 4131 LX,Vianen,

Netherlands

85% 85% N/A

N/A

GGB inBalans Investco B.V Hagenweg 3 c, 4131 LX,Vianen,

Netherlands

100% 100% N/A

N/A

Glasgow Healthcare Facilities

(Holdings) Limited

INFRASTRUCTURE MANAGERS

LIMITED, 2nd Floor, 11 Thistle Street,

Edinburgh, EH2 1DF

25% 25% N/A

N/A

Glasgow Healthcare Facilities Limited 2nd Floor, 11 Thistle Street, Edinburgh,

United Kingdom, EH2 1DF

25% 25% N/A

N/A

GO-PASS Mobility Services LLC 2711 Centerville Road, Suite 400,

Wilmington, Delaware 19808, USA

33% 33% N/A

N/A

Green Timbers GP Limited

(Incorporated in Canada)

1060 – 1500 West Georgia Street,

Vancouver, BC, V6G 2Z6, Canada

100% 100% N/A

N/A

Green Timbers Holdings Limited

(Incorporated in Canada)

1060 – 1500 West Georgia Street,

Vancouver, BC, V6G 2Z6, Canada

100% 100% N/A

N/A

Green Timbers Limited Partnership

(Incorporated in Canada)

1060 – 1500 West Georgia Street,

Vancouver, BC, V6G 2Z6, Canada

100% 100% 31 Mar 22 8.5 59.8

GT (NEPS) Limited Blake House 3 Frayswater Place,

Cowley, Uxbridge, Middlesex,

UnitedKingdom, UB8 2AD

90% 90% N/A

N/A

GT NEPS (Holdings) Limited Blake House 3 Frayswater Place,

Cowley, Uxbridge, Middlesex,

UnitedKingdom, UB8 2AD

90% 90% N/A

N/A

H&D Support Services

(Holdings) Limited

Cannon Place, 78 Cannon Street,

London, England, EC4N 6AF

100% 100% N/A

N/A

Notes to the financial statements continued

For the year ended 31 March 2023

21. Related undertakings continued

Overview Strategic Report Governance Financials HICL Annual Report 2023 135

Entity Registered address

Shareholding

Year end

Profit/

(Loss)

£m

Aggregate

Capital &

Reserves

£m31-Mar-23 31-Mar-22

H&D Support Services Limited Cannon Place, 78 Cannon Street,

London, England, EC4N 6AF

100% 100% N/A

N/A

Hadfield Healthcare

Partnerships Holdings Limited

10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

75% 75% N/A

N/A

Hadfield Healthcare

Partnerships Limited

10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

75% 75% N/A

N/A

HDM Schools Solution Limited C/O Dla Piper Scotland Llp Fao Stuart

Mcmillan Collins House, Rutland

Square, Edinburgh, United Kingdom,

EH1 2AA

75% 75% N/A

N/A

HDM Schools Solutions

(Holding) Limited

C/O Dla Piper Scotland Llp Fao Stuart

Mcmillan Collins House, Rutland

Square, Edinburgh, United Kingdom,

EH1 2AA

75% 75% N/A

N/A

Healthcare Centres PPP

Holdings Limited

Suite 54 Morrison Chambers, 32

Nassau Street, Dublin 2, Republic

ofIreland

60% 60% N/A

N/A

Healthcare Centres PPP Limited Suite 54 Morrison Chambers, 32

Nassau Street, Dublin 2, Republic

ofIreland

60% 60% N/A

N/A

Helix Acquisition Limited 5th Floor, Kings Place, 90 York Way,

London, United Kingdom, N1 9AG

22% 22% 31 Mar 22 (4.0) (37.0)

Helix Bufferco Limited 5th Floor, Kings Place, 90 York Way,

London, United Kingdom, N1 9AG

22% 22% 31 Mar 22 (4.0) (36.9)

Helix Holdings Limited 5th Floor, Kings Place, 90 York Way,

London, United Kingdom, N1 9AG

22% 22% 31 Mar 22 (68.5) (754.6)

Helix MidCo Limited 5th Floor, Kings Place, 90 York Way,

London, United Kingdom, N1 9AG

22% 22% 31 Mar 22 (4.0) (36.9)

HICL Infrastructure (Green Timbers)

Inc (Incorporated in Canada)

1060 – 1500 West Georgia Street,

Vancouver, BC, V6G 2Z6, Canada

100% 100% N/A

N/A

HICL Infrastructure 2 SARL 6, rue Adolphe, L-1116, Luxembourg 100% 100% 31 Mar 22 86.7 2,467.8

HICL Infrastructure 3 SARL 6, rue Adolphe, L-1116, Luxembourg 100% 100% N/A

N/A

HICL Infrastructure Canada Inc.

(Incorporated in Canada)

Suite 2600, Three Bentall Centre,

PO BOX 49314, 595 Burrard Street,

Vancouver BC V7X 1L3, Canada

100% 100% 31 Mar 22 48.1 118.3

High Speed One (HS1) Limited 5th Floor, Kings Place, 90 York Way,

London, United Kingdom, N1 9AG

22% 22% N/A

N/A

High Speed Rail Finance (1) PLC 5th Floor, Kings Place, 90 York Way,

London, United Kingdom, N1 9AG

22% 22% N/A

N/A

High Speed Rail Finance PLC 5th Floor, Kings Place, 90 York Way,

London, United Kingdom, N1 9AG

22% 22% N/A

N/A

Highway Management M80

Investment Management Limited

Part First Floor, 1 Grenfell

Road, Maidenhead, Berkshire,

UnitedKingdom, SL6 1HN

50% 50% 31 Dec 21 0.4 (38.4)

Highway Management

Scotland (Holdings) Limited

Part First Floor, 1 Grenfell

Road, Maidenhead, Berkshire,

UnitedKingdom, SL6 1HN

50% 50% 31 Dec 21 0.3 (34.8)

HICL Annual Report 2023136

Entity Registered address

Shareholding

Year end

Profit/

(Loss)

£m

Aggregate

Capital &

Reserves

£m31-Mar-23 31-Mar-22

Highway Management

Scotland Limited

Part First Floor, 1 Grenfell

Road, Maidenhead, Berkshire,

UnitedKingdom, SL6 1HN

50% 50% 31 Dec 21 0.3 (34.8)

Holdfast Training Services Limited Building 29, Hq Rsme Brompton

Barracks, Chatham, Kent, England,

ME44UG

100% 100% N/A

N/A

HS1 Limited 5th Floor, Kings Place, 90 York Way,

London, United Kingdom, N1 9AG

22% 22% 31 Mar 22 30.2 (88.9)

Information Resources

(Oldham) Holdings Limited

10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

75% 75% N/A

N/A

Information Resources

(Oldham) Investments

10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

75% 75% N/A

N/A

Information Resources

(Oldham) Limited

10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

75% 75% N/A

N/A

InfraRed Towers Investments Limited Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% – N/A

N/A

Infraspeed (Holdings) BV

(Incorporated in Holland)

2132 LS Hoofddorp, Taurusavenue 155,

Netherlands

43% 43% 31 Dec 22 9.0 42.0

Infraspeed BV

(Incorporated in Holland)

2132 LS Hoofddorp, Taurusavenue 155,

Netherlands

43% 43% 31 Dec 22 9.5 40.7

Infrastructure Central Limited Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% 31 Mar 22 (45.6) 272.7

Infrastructure Investment

Limited Partnership

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% 31 Mar 22 371.7 3,159.1

Infrastructure Investments

(A63)Holdings Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% 31 Mar 22 17.8 191.8

Infrastructure Investments

(Affinity)Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

91% 91% 31 Mar 22 65.7 315.8

Infrastructure Investments (Aria)

HoldcoLimited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% – N/A

N/A

Infrastructure Investments (Aria)

TopCoLimited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% – N/A

N/A

Infrastructure Investments

(Australia)LLP

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% 31 Mar 22 (34.7) 13.1

Infrastructure Investments (Bond)

Holdings LLP

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% 31 Mar 22 (35.3) 12.5

Infrastructure Investments

(Bond) LLP

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Notes to the financial statements continued

For the year ended 31 March 2023

21. Related undertakings continued

Overview Strategic Report Governance Financials HICL Annual Report 2023 137

Entity Registered address

Shareholding

Year end

Profit/

(Loss)

£m

Aggregate

Capital &

Reserves

£m31-Mar-23 31-Mar-22

Infrastructure Investments

(Colorado)Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% 31 Mar 22 57.5 248.1

Infrastructure Investments

(Defence)Holdings Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% – N/A

N/A

Infrastructure Investments

(Defence)Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% 31 Mar 22 22.5 91.0

Infrastructure Investments

(Germany)Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% – N/A

N/A

Infrastructure Investments

(Health)Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Infrastructure Investments

(HSL ZUID) Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% 31 Mar 22 2.8 38.9

Infrastructure Investments

(No 7) Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Infrastructure Investments

(No 8) Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Infrastructure Investments

(OFTO 1) Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Infrastructure Investments

(Portal) GP Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Infrastructure Investments

(Portal) Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Infrastructure Investments

(Portal) Limited Partnership

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% 31 Mar 22 3.7 50.9

Infrastructure Investments

(Portsmouth) Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% 31 Mar 22 50.0 94.9

Infrastructure Investments

(Roads) Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Infrastructure Investments

(TNT) Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% – N/A

N/A

Infrastructure Investments

Betjeman (Holdco) Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

HICL Annual Report 2023138

Entity Registered address

Shareholding

Year end

Profit/

(Loss)

£m

Aggregate

Capital &

Reserves

£m31-Mar-23 31-Mar-22

Infrastructure Investments

BetjemanLimited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

62% 62% N/A

N/A

Infrastructure Investments

GalvaniLimited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% – N/A

N/A

Infrastructure Investments

GroupLimited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% 31 Mar 22 261.6 1,463.4

Infrastructure Investments

HoldingsLimited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% 31 Mar 22 78.7 481.3

Infrastructure Investments

NWP (US)LLC

701 Northwest Parkway, Broomfield,

CO80023, USA

100% 100% N/A

N/A

Infrastructure Investments

OFTO 2 Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% – N/A

N/A

Infrastructure Investments

PortsmouthLimited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% 31 Mar 22 50.0 94.9

Infrastructure Investments

PPP OFTO holdings LLP

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% – N/A

N/A

Infrastructure Investments

PPP OFTO LLP

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% – N/A

N/A

Infrastructure Investments PPP OFTO

Midco LLP

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% – N/A

N/A

Infrastructure Investments Roads

Management Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Infrastructure Investments TNT

(US)LLC

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% – N/A

N/A

Integrated Bradford Hold Co

TwoLimited

3rd Floor 3 – 5 Charlotte Street,

Manchester, England, M1 4HB

62% 62% N/A

N/A

Integrated Bradford Holdco

OneLimited

3rd Floor 3 – 5 Charlotte Street,

Manchester, England, M1 4HB

48% 48% N/A

N/A

Integrated Bradford SPV One Limited 3rd Floor 3 – 5 Charlotte Street,

Manchester, England, M1 4HB

48% 48% N/A

N/A

Integrated Bradford SPV Two Limited 3rd Floor 3 – 5 Charlotte Street,

Manchester, England, M1 4HB

62% 62% N/A

N/A

Ivywood College Holdings Limited 7 Queens Road, Belfast,

UnitedKingdom, BT3 9DT

75% 75% N/A

N/A

Ivywood College Limited 7 Queens Road, Belfast,

UnitedKingdom, BT3 9DT

75% 75% N/A

N/A

Ivywood Colleges Parking Limited 7 Queens Road, Belfast,

UnitedKingdom, BT3 9DT

75% 75% N/A

N/A

Notes to the financial statements continued

For the year ended 31 March 2023

21. Related undertakings continued

Overview Strategic Report Governance Financials HICL Annual Report 2023 139

Entity Registered address

Shareholding

Year end

Profit/

(Loss)

£m

Aggregate

Capital &

Reserves

£m31-Mar-23 31-Mar-22

IXAS Zuid-Oost B.V (Incorporated

inHolland)

Langbroekdreef 18, 1108 EB,

Amsterdam

25% 25% N/A

N/A

Kajima Darlington Schools

HoldingLimited

10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

50% 50% N/A

N/A

Kajima Darlington Schools Limited 10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

50% 50% N/A

N/A

Kajima Haverstock Holding Limited 10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

50% 50% N/A

N/A

Kajima Haverstock Limited 10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

50% 50% N/A

N/A

Kajima Newcastle Libraries

HoldingsLimited

10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

50% 50% N/A

N/A

Kajima Newcastle Libraries Limited 10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

50% 50% N/A

N/A

Kajima North Tyneside HoldingsLimited 10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

50% 50% N/A

N/A

Kajima North Tyneside Limited 10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

50% 50% N/A

N/A

Kent Education Partnership

(Holdings)Limited

Part First Floor, 1 Grenfell

Road, Maidenhead, Berkshire,

UnitedKingdom, SL6 1HN

50% 50% N/A

N/A

Kent Education Partnership Limited Part First Floor, 1 Grenfell

Road, Maidenhead, Berkshire,

UnitedKingdom, SL6 1HN

50% 50% N/A

N/A

Kluster (Incorporated in France) 1 avenue Eugène Freyssinet,

78280Guyancourt, France

85% 85% N/A

N/A

Liaison Infrastructure Routiere

Investissement (Incorporated in France)

91, Rue du Faubourg Saint-Honore,

75008 Paris

100% 100% N/A

N/A

Mahi Tahi Towers Investment

PtyLimited

15 Customs Street West, Auckland

Central, Auckland, 1010, New Zealand

100% – N/A

N/A

Mahi Tahi Towers Limited 15 Customs Street West, Auckland

Central, Auckland, 1010, New Zealand

40% – N/A

N/A

Manchester Housing

(MP Equity) Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Manchester Housing

(MP Subdebt) Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Manchester Housing

(MP TopCo) Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Manchester School Services

HoldingsLimited

Cannon Place, 78 Cannon Street,

London, United Kingdom, EC4N 6AF

76% 76% N/A

N/A

Manchester School Services Limited Cannon Place, 78 Cannon Street,

London, United Kingdom, EC4N 6AF

76% 76% N/A

N/A

Medway Community Estates Limited

(Medway LiftCO)

55 Station Road, Beaconsfield,

Buckinghamshire, United Kingdom,

HP9 1QL

60% 60% N/A

N/A

HICL Annual Report 2023140

Entity Registered address

Shareholding

Year end

Profit/

(Loss)

£m

Aggregate

Capital &

Reserves

£m31-Mar-23 31-Mar-22

Medway Fundco Limited 55 Station Road, Beaconsfield,

Buckinghamshire, United Kingdom,

HP9 1QL

60% 60% N/A

N/A

Medway Fundco Two Limited 55 Station Road, Beaconsfield,

Buckinghamshire, United Kingdom,

HP9 1QL

60% 60% N/A

N/A

Metier Healthcare Limited 4 Estates Yard, Wellhouse Lane,

Barnet, Hertfordshire, United Kingdom,

EN53DG

100% 100% N/A

N/A

Metier Holdings Limited 4 Estates Yard, Wellhouse Lane,

Barnet, Hertfordshire, United Kingdom,

EN53DG

100% 100% N/A

N/A

New Intermediate Care Limited Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

New Schools Investment

CompanyLimited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Newham Learning Partnership

(HoldCo) Limited

Third Floor Broad Quay House,

PrinceStreet, Bristol, United Kingdom,

BS1 4DJ

80% 80% N/A

N/A

Newham Learning Partnership

(ProjectCo) Limited

Third Floor Broad Quay House,

PrinceStreet, Bristol, United Kingdom,

BS1 4DJ

80% 80% N/A

N/A

Newham Learning Partnership

(PSP)Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Newham Transformation

PartnershipLimited

Third Floor Broad Quay House,

PrinceStreet, Bristol, United Kingdom,

BS1 4DJ

80% 80% N/A

N/A

Newport School Solutions Limited Cannon Place, 78 Cannon Street,

London, England, EC4N 6AF

100% 100% N/A

N/A

Newport Schools Solutions

(Holdings)Limited

Cannon Place, 78 Cannon Street,

London, England, EC4N 6AF

100% 100% N/A

N/A

Newton Abbot Health Holdings Limited Unit 18 Riversway Business Village

Navigation Way, Ashton-on-Ribble,

Preston, United Kingdom, PR2 2YP

100% 100% N/A

N/A

Newton Abbot Health Limited Unit 18 Riversway Business Village

Navigation Way, Ashton-on-Ribble,

Preston, United Kingdom, PR2 2YP

100% 100% N/A

N/A

Nordie Limited Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

39% – N/A

N/A

Nordie 2 Limited 75008 PARIS 8 100% – N/A

N/A

Northwest Connect General

Partnership (Incorporated in Canada)

10060 Jasper Avenue, Suite 1201,

Edmonton, AB T5J 4E5, Canada

50% 50% 31 Dec 22 7.8 43.9

Northwest Connect Holdings Inc.

(Incorporated in Canada)

10060 Jasper Avenue, Suite 1201,

Edmonton, AB T5J 4E5, Canada

50% 50% N/A

N/A

Notes to the financial statements continued

For the year ended 31 March 2023

21. Related undertakings continued

3 Minerva Education and Training (Holdings) Limited and Minerva Education and Training Limited located at C/O Albany Spc Services Limited 3rd Floor, 3-5 Charlotte Street, Manchester, England,

M1 4HB, 45% shareholding (2022: 45%). Refer also to footnote 2

Overview Strategic Report Governance Financials HICL Annual Report 2023 141

Entity Registered address

Shareholding

Year end

Profit/

(Loss)

£m

Aggregate

Capital &

Reserves

£m31-Mar-23 31-Mar-22

Northwest Connect Inc.

(Incorporatedin Canada)

10060 Jasper Avenue, Suite 1201,

Edmonton, AB T5J 4E5, Canada

50% 50% N/A

N/A

Northwest Connect Investment Inc.

(Incorporated in Canada)

10060 Jasper Avenue, Suite 1201,

Edmonton, AB T5J 4E5, Canada

50% 50% N/A

N/A

Northwest Parkway LLC 701 Northwest Parkway, Broomfield,

CO80023, USA

33% 33% N/A

N/A

NWP Holdco LLC 701 Northwest Parkway, Broomfield,

CO80023, USA

33% 33% N/A

N/A

Ochre Solutions (Holdings) Limited Third Floor Broad Quay House,

PrinceStreet, Bristol, United Kingdom,

BS1 4DJ

40% 40% N/A

N/A

Ochre Solutions Limited Third Floor Broad Quay House,

PrinceStreet, Bristol, United Kingdom,

BS1 4DJ

40% 40% N/A

N/A

Paradigm (Sheffield BSF)

HoldingsLimited

Third Floor Broad Quay House,

PrinceStreet, Bristol, United Kingdom,

BS1 4DJ

59% 59% N/A

N/A

Paradigm (Sheffield BSF) Limited Third Floor Broad Quay House,

PrinceStreet, Bristol, United Kingdom,

BS1 4DJ

59% 59% N/A

N/A

PFF (Dorset) Limited Unit 18 Riversway Business Village

Navigation Way, Ashton-on-Ribble,

Preston, United Kingdom, PR2 2YP

100% 100% N/A

N/A

Pi2 B.V (Incorporated in Holland) Ringwade 71, 3439 LM Nieuwegein,

Netherlands

100% 100% N/A

N/A

Pi2 Holding B.V (Incorporated

inHolland)

Ringwade 71, 3439 LM Nieuwegein,

Netherlands

100% 100% N/A

N/A

PIP Infrastructure Investments

(Southmead) Ltd

C/O Foresight Group Llp The Shard,

32London Bridge Street, London,

United Kingdom, SE1 9SG

25% 25% N/A

N/A

Platon-Saclay 1 Avenue Eugène Freyssinet, 78280

Guyancourt, France

85% 85% N/A

N/A

PPP Services (North Ayrshire)

HoldingsLimited

Infrastructure Managers Limited,

2ndFloor, 11 Thistle Street, Edinburgh,

EH2 1DF

26% 26% N/A

N/A

PPP Services (North Ayrshire) Limited Infrastructure Managers Limited,

2ndFloor, 11 Thistle Street, Edinburgh,

EH2 1DF

26% 26% N/A

N/A

Prima 200 Fundco No 1 Limited 5 The Triangle, Wildwood Drive,

Worcester, Worcestershire,

UnitedKingdom, WR5 2QX

60% 60% N/A

N/A

Prima 200 Fundco No 2 Limited 5 The Triangle, Wildwood Drive,

Worcester, Worcestershire,

UnitedKingdom, WR5 2QX

60% 60% N/A

N/A

Prima 200 Fundco No 3 Limited 5 The Triangle, Wildwood Drive,

Worcester, Worcestershire,

UnitedKingdom, WR5 2QX

60% 60% N/A

N/A

HICL Annual Report 2023142

Entity Registered address

Shareholding

Year end

Profit/

(Loss)

£m

Aggregate

Capital &

Reserves

£m31-Mar-23 31-Mar-22

Prima 200 Limited 5 The Triangle, Wildwood Drive,

Worcester, Worcestershire,

UnitedKingdom, WR5 2QX

60% 60% N/A

N/A

Prime Infrastructure

InvestmentsLimited

5 The Triangle, Wildwood Drive,

Worcester, Worcestershire,

UnitedKingdom, WR5 2QX

100% 100% N/A

N/A

Prime LIFT Investments 5 The Triangle, Wildwood Drive,

Worcester, Worcestershire,

UnitedKingdom, WR5 2QX

100% 100% N/A

N/A

Prisma 21 (Incorporated in France) 1 avenue Eugène Freyssinet,

78280Guyancourt, France

85% 85% N/A

N/A

Prospect Healthcare

(Hinchingbrooke)Holdings Limited

8 White Oak Square, London Road,

Swanley, Kent, United Kingdom,

BR87AG

75% 75% N/A

N/A

Prospect Healthcare

(Hinchingbrooke)Limited

8 White Oak Square, London Road,

Swanley, Kent, United Kingdom,

BR87AG

75% 75% N/A

N/A

Ravensbourne Health Services

Holdings Limited

Cannon Place, 78 Cannon Street,

London, United Kingdom, EC4N 6AF

100% 100% N/A

N/A

Ravensbourne Health Services Limited Cannon Place, 78 Cannon Street,

London, United Kingdom, EC4N 6AF

100% 100% N/A

N/A

RBLH Limited Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

RBLH Medway Investment

CompanyLimited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

RBLH RWF Investment

CompanyLimited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Redwood Partnership Ventures

2Limited

10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

75% 75% N/A

N/A

Redwood Partnership Ventures

3Limited

10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

90% 90% N/A

N/A

Redwood Partnership Ventures Limited 10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

50% 50% N/A

N/A

Renaissance Miles Platting Holding

Company Limited

3rd Floor Suite 6c, Sevendale House,

5-7 Dale Street, Manchester, United

Kingdom, M1 1JB

50% 50% N/A

N/A

Renaissance Miles Platting Limited 3rd Floor Suite 6c, Sevendale House,

5-7 Dale Street, Manchester, United

Kingdom, M1 1JB

50% 50% N/A

N/A

RL Investment Limited Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Road Infrastructure (Ireland) Limited Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% 31 Mar 22 6.0 73.6

Notes to the financial statements continued

For the year ended 31 March 2023

21. Related undertakings continued

Overview Strategic Report Governance Financials HICL Annual Report 2023 143

Entity Registered address

Shareholding

Year end

Profit/

(Loss)

£m

Aggregate

Capital &

Reserves

£m31-Mar-23 31-Mar-22

Road Management Consolidated PLC Cannon Place, 78 Cannon Street,

London, EC4N 6AF

58% 58% N/A

N/A

Road Management Group Limited Cannon Place, 78 Cannon Street,

London, EC4N 6AF

58% 58% 31 Dec 21 (4.3) 91.5

Road Management Limited Cannon Place, 78 Cannon Street,

London, EC4N 6AF

58% 58% N/A

N/A

Road Management Services

(Gloucester) Limited

Cannon Place, 78 Cannon Street,

London, EC4N 6AF

58% 58% 31 Dec 21 (1.7) 50.2

Road Management Services

(Peterborough) Limited

Cannon Place, 78 Cannon Street,

London, EC4N 6AF

58% 58% 31 Dec 21 (4.8) 41.4

RSP (Holdings) Limited Precision House, Mcneil Drive,

Motherwell, United Kingdom, ML1 4UR

30% 30% N/A

N/A

RWF Health and Community

Developers (Tranche 1) Limited

55 Station Road, Beaconsfield,

Buckinghamshire, United Kingdom,

HP9 1QL

60% 60% N/A

N/A

RWF Health and Community

Developers Limited

55 Station Road, Beaconsfield,

Buckinghamshire, United Kingdom,

HP9 1QL

60% 60% N/A

N/A

S&W (Hold Co Two) Limited Suite 6c, 3rd Floor Sevendale House,

5-7 Dale Street, Manchester, England,

M1 1JB

80% 80% N/A

N/A

S&W (Hold Co) One Limited Suite 6c, 3rd Floor Sevendale House,

5-7 Dale Street, Manchester, England,

M1 1JB

80% 80% N/A

N/A

S&W TLP (Project Co One) Limited Suite 6c, 3rd Floor Sevendale House,

5-7 Dale Street, Manchester, England,

M1 1JB

80% 80% N/A

N/A

S&W TLP (Project Co Two) Limited Suite 6c, 3rd Floor Sevendale House,

5-7 Dale Street, Manchester, England,

M1 1JB

80% 80% N/A

N/A

S&W TLP (PSP One) Limited Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

80% 80% N/A

N/A

S&W TLP (PSP Three) Limited Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

80% 80% N/A

N/A

S&W TLP (PSP Two) Limited Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

80% 80% N/A

N/A

S&W TLP Education

PartnershipLimited

Suite 6c, 3rd Floor Sevendale House,

5-7 Dale Street, Manchester, England,

M1 1JB

80% 80% N/A

N/A

Salford Schools Solutions

HoldCoLimited

3rd Floor Suite 6c, Sevendale House,

5-7 Dale Street, Manchester, United

Kingdom, M1 1JB

26% 26% N/A

N/A

Salford Schools Solutions Limited Suite 6c, 3rd Floor Sevendale House,

5-7 Dale Street, Manchester, England,

M1 1JB

26% 26% N/A

N/A

HICL Annual Report 2023144

Entity Registered address

Shareholding

Year end

Profit/

(Loss)

£m

Aggregate

Capital &

Reserves

£m31-Mar-23 31-Mar-22

Schools Capital Ltd Cannon Place, 78 Cannon Street,

London, United Kingdom, EC4N 6AF

51% 51% N/A

N/A

Schools Investment Company

(Irl)Limited

Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Schools Public / Private Partnership

(Ireland) Limited

Suite 54, Morrison Chambers,

32Nassau Street, Dublin 2, Ireland

50% 50% N/A

N/A

Services Support (Cleveland)

HoldingsLimited

8 White Oak Square, London Road,

Swanley, Kent, United Kingdom, BR8 7AG

100% 100% N/A

N/A

Services Support (Cleveland) Limited 8 White Oak Square, London Road,

Swanley, Kent, United Kingdom,

BR87AG

100% 100% N/A

N/A

Services Support (Gravesend)

HoldingsLimited

8 White Oak Square, London Road,

Swanley, Kent, United Kingdom,

BR87AG

73% 73% N/A

N/A

Services Support (Gravesend) Limited 8 White Oak Square, London Road,

Swanley, Kent, United Kingdom,

BR87AG

73% 73% N/A

N/A

Services Support (Manchester)

Holdings Limited

8 White Oak Square, London Road,

Swanley, Kent, United Kingdom,

BR87AG

73% 73% N/A

N/A

Services Support

(Manchester) Limited

8 White Oak Square, London Road,

Swanley, Kent, BR8 7AG

73% 73% N/A

N/A

Sheffield Limited Education

PartnershipLimited (LEP)

Unit 18 Riversway Business Village

Navigation Way, Ashton-on-Ribble,

Preston, United Kingdom, PR2 2YP

50% 50% N/A

N/A

Sheffield Schools Topco Limited 10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

75% 75% N/A

N/A

Sheppey Route (Holdings) Limited Cannon Place, 78 Cannon Street,

London, United Kingdom, EC4N

50% 50% N/A

N/A

Sheppey Route Limited Cannon Place, 78 Cannon Street,

London, United Kingdom, EC4N 6AF

50% 50% N/A

N/A

Sussex Custodial Services

(Holdings)Limited

Unit 18 Riversway Business Village

Navigation Way, Ashton-on-Ribble,

Preston, United Kingdom, PR2 2YP

100% 100% N/A

N/A

Sussex Custodial Services Limited Unit 18 Riversway Business Village

Navigation Way, Ashton-on-Ribble,

Preston, United Kingdom, PR2 2YP

100% 100% N/A

N/A

The Hospital Company (Oxford

JohnRadcliffe) Holdings Limited

Unit 18 Riversway Business Village,

Navigation Way, Ashton-On-Ribble,

Preston, England, PR2 2YP

100% 100% N/A

N/A

The Hospital Company (Oxford

JohnRadcliffe) Limited

Unit 18 Riversway Business Village,

Navigation Way, Ashton-On-Ribble,

Preston, England, PR2 2YP

100% 100% 31 Dec 21 3.0 (82.5)

The Hospital Company

(Southmead)Limited

8 White Oak Square, London Road,

Swanley, England, BR8 7AG

63% 63% 31 Dec 21 0.7 (108.7)

The Hospital Company

(Southmead)Holdings Limited

8 White Oak Square, London Road,

Swanley, Kent, United Kingdom, BR87AG

63% 63% N/A

N/A

Notes to the financial statements continued

For the year ended 31 March 2023

21. Related undertakings continued

Overview Strategic Report Governance Financials HICL Annual Report 2023 145

Entity Registered address

Shareholding

Year end

Profit/

(Loss)

£m

Aggregate

Capital &

Reserves

£m31-Mar-23 31-Mar-22

The Renfrewshire Schools

PartnershipLimited

Precision House, Mcneil Drive,

Motherwell, United Kingdom, ML1 4UR

30% 30% N/A

N/A

Transpark Highway Finance Inc.

(Incorporated in Canada)

2800 Park Place, 666 Burrard Street,

Vancouver BC V6C 2Z7, Canada

50% 50% N/A

N/A

Transpark Highway General

Partnership(Incorporated in Canada)

2800 Park Place, 666 Burrard Street,

Vancouver BC V6C 2Z7, Canada

50% 50% N/A

N/A

Transpark Highway Holdings Inc.

(Incorporated in Canada)

2800 Park Place, 666 Burrard Street,

Vancouver BC V6C 2Z7, Canada

50% 50% N/A

N/A

Transpark Highway Inc. (Incorporated

in Canada)

2800 Park Place, 666 Burrard Street,

Vancouver BC V6C 2Z7, Canada

50% 50% N/A

N/A

Transpark Highway Investment Inc.

(Incorporated in Canada)

2800 Park Place, 666 Burrard Street,

Vancouver BC V6C 2Z7, Canada

50% 50% N/A

N/A

TW Accommodation Limited Cannon Place, 78 Cannon Street,

London, United Kingdom, EC4N 6AF

100% 100% N/A

N/A

TW Accommodation Services

(Holdings)Limited

Cannon Place, 78 Cannon Street,

London, United Kingdom, EC4N 6AF

100% 100% N/A

N/A

UK GDN Investments Holdco Ltd Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

UK GDN Investments Ltd Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

UK GDN Investments Topco Ltd Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Via Erste

Beteiligungsgesellschaft mbH

Franz-Ehrlich-Str. 5 12489,

Berlin,Germany

100% – N/A

N/A

Via Muehlhausen GmbH & Co KG Vor dem Riedtor 7,

99998 Mühlhausen, Germany

50% – N/A

N/A

Willcare (MIM) Limited 128 Buckingham Palace Road,

London,United Kingdom, SW1W 9SA

100% 100% N/A

N/A

Willcare Holdings Limited 128 Buckingham Palace Road,

London,United Kingdom, SW1W 9SA

100% 100% N/A

N/A

Wooldale Partnerships

HoldingsLimited

10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

50% 50% N/A

N/A

Wooldale Partnerships Limited 10 St. Giles Square, London,

UnitedKingdom, WC2H 8AP

50% 50% N/A

N/A

Yorker Holdings PKR Limited Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

Zealburg Holdings Limited Level 7 One Bartholomew Close,

BartsSquare, London, United Kingdom,

EC1A 7BL

100% 100% N/A

N/A

1 Denotes a direct shareholding

2 In line with the Companies Act requirements, no disclosure has been made where capital and reserves and profit or loss are not considered to be material

HICL Annual Report 2023146

Appendix 1

Mandatory indicators

Adverse sustainability indicator Metric Unit

Metric as at

31 December 2022

Portfolio

Coverage

Greenhouse

gas emissions

1. GHG emissions Scope 1 GHG emissions tCO

e 37,896 100%

Scope 2 GHG emissions tCO

e 26,007 100%

Scope 3 GHG emissions tCO

e 82,212 100%

Total GHG emissions tCO

e 146,115 100%

2. Carbon footprint

Carbon footprint

tCO

e/£m

invested 37 100%

3. GHG intensity of investee

companies GHG intensity of investee companies

tCO

e/£m

revenue 469 100%

4. Exposure to companies

active in the fossil fuel

sector

Share of investments in companies active

in the fossil fuel sector % 0 100%

5. Share of non-renewable

energy consumption and

production

Share of non-renewable energy

consumption and non-renewable energy

production of investee companies

from non-renewable energy sources

compared to renewable energy sources,

expressed as a percentage of total

energy sources % 92 99%

6. Energy consumption

intensity per high impact

climate sector

Energy consumption in GWh per million

EUR of revenue of investee companies,

per high impact climate sector GWh/£m 4.86 100%

Biodiversity 7. Activities negatively

affecting biodiversity-

sensitiveareas

Share of investments in investee

companies with sites/operations located

in or near to biodiversity-sensitive

areas where activities of those investee

companies negatively affect those areas % 0 93%

Water 8. Emissions to water Tonnes of emissions to water

generated by investee companies per

million EUR invested, expressed as a

weighted average Tonnes/£m 0 91%

Waste 9. Hazardous waste and

radioactive waste ratio

Tonnes of hazardous waste and

radioactive waste generated by investee

companies per million EUR invested,

expressed as a weighted average Tonnes/£m 108 89%

SFDR Principal Adverse

Impact (“PAI”) Disclosures

The indicators set out below outline HICL’s non-financial impact of its

investments in accordance with Article 7 of the SFDR. The Company

has reported in line with all 14 mandatory PAIs and seven voluntary

PAIs to provide a high level of transparency as to HICL’s ESG

performance andtoenable HICL’s shareholders to meet their own

regulatory and voluntary reporting requirements.

The sustainability report outlines the actions already taken as well as

actions planned in order for HICL to improve performance

against thesePAIs. To read about those specific metrics and targets,

please see page 71.

All PAIs have been calculated in accordance with the requirements

of Annex 1 of the SFDR Regulatory Technical Standards (RTS)

andasindicated in the notes below.

Overview Strategic Report Governance Financials HICL Annual Report 2023 147

Adverse sustainability indicator Metric Unit

Metric as at

31 December 2022

Portfolio

Coverage

Social and

employee

matters

10. Violations of UN Global

Compact principles

and Organisation for

Economic Cooperation

and Development (OECD)

Guidelines for Multinational

Enterprises

Share of investments in investee

companies that have been

involved in violations of the UNGC

principles or OECD Guidelines for

Multinational Enterprises % 0 90%

11. Lack of processes and

compliance mechanisms

to monitor compliance

with UN Global

Compact principles and

OECD Guidelines for

Multinational Enterprises

Share of investments in investee

companies without policies to

monitor compliance with the UNGC

principles or OECD Guidelines for

Multinational Enterprises or grievance/

complaints handling mechanisms

to address violations of the UNGC

principles or OECD Guidelines for

Multinational Enterprises % 18 88%

12. Unadjusted gender

pay gap

Average unadjusted gender pay gap

ofinvestee companies % 20 23%

13. Board gender diversity

Average ratio of female to male board

members in investee companies,

expressed as a percentage of all

board members % 27 90%

14. Exposure to controversial

weapons (anti-personnel

mines, cluster munitions,

chemical weapons and

biological weapons)

Share of investments in investee

companies involved in the manufacture

or selling of controversial weapons % 0 100%

HICL Annual Report 2023148

Voluntary climate and other environment-related indicators

Adverse sustainability indicator Metric Unit

Metric as at

31 December 2022

Portfolio

Coverage

Greenhouse

gas emissions

4. Investments in companies

without carbon emission

reduction initiatives

Share of investments in investee

companies without carbon emission

reduction initiatives aimed at aligning with

the Paris Agreement % 17%

90%

Water, waste

and material

emissions

7. Investments in

companieswithout water

management policies

Share of investments in investee

companies without water

management policies % 15%

91%

Voluntary indicators for social and employee, respect

for human rights, anti-corruption and anti-bribery matters

Adverse sustainability indicator Metric Unit

Metric as at

31 December 2022

Portfolio

Coverage

Social and

employee

matters

1. Investments in companies

without workplace accident

prevention policies

Share of investments in investee

companies without a workplace accident

prevention policy % 0 93%

3. Number of days lost to

injuries, accidents, fatalities

orillness

Number of workdays lost to injuries,

accidents, fatalities or illness of

investee companies expressed as

aweighted average

Number

of days 0.38

117

projects

6. Insufficient whistleblower

protection

Share of investments in entities

without policies on the protection

of whistleblowers % 12 93%

Human

rights

11. Lack of processes and

measures for preventing

trafficking in human beings

Share of investments in investee

companies without policies against

trafficking in human beings % 16 93%

Anti-corruption

and anti-

bribery

15. Lack of anti-corruption

andanti-bribery policies

Share of investments in entities without

policies on anti-corruption and anti-

bribery consistent with the United

Nations Convention against Corruption % 0 93%

1 Calculated using valuation information as at 31 March 2023

2 Calculated as the average of each investee company’s share of non-renewable energy as a proportion of its total energy consumption

3 As per our interpretation of the material sectors based on NACE code categories A-H and J-L, the following sectors would be considered as high-impact climate sectors:

road, rail, power transmission and water treatment

4 Calculated as the weighted average based on investment value to date

5 Only six assets within the portfolio have direct employees. Of those assets, Affinity Water is the only asset which has more than 250 employees and hence is required

to measure and report gender pay gap

6 Calculated as the average of each investee company’s board gender diversity

7 Share of investments calculated by valuation as at 31 March 2023

8 Share of investments calculated by valuation as at 31 March 2023

9 Share of investments calculated by valuation as at 31 March 2023

10 Share of investments calculated by valuation as at 31 March 2023. For the purposes of this metric we have assessed whether a project undertakes training

and audit procedures in respect to the Modern Slavery Act or equivalent

Appendix 1 continued

Product name: HICL Infrastructure PLC

Legal entity identifier: 213800BVXR1E5L7PEV94

Environmental and/or social characteristics

To what extent were the environmental and/or social characteristics

promoted by this financial product met?

HICL Infrastructure PLC s (the "Company" or "HICL") nvestment propos t on s

to de ver susta nab e ncome and cap ta growth from a d vers f ed portfo o of

nvestments n core nfrastructure. The Company offers nvestors stab e, ong-term

returns from core nfrastructure assets that are v ta to commun t es. HICL's v s on s to

enr ch ves through nfrastructure and to atta n the E/S Character st cs. The Company's

E/S Character st cs were met by focus ng on the fo ow ng susta nab ty themes:

• Strong Soc a Foundat on, through nvestments n hea th, educat on, aw & order,

and accommodat on;

Did this financial product have a sustainable investment objective?

Yes

It made sustainable

investments with an

environmental objective: ___%

in economic activities that

qualify as environmentally

sustainable under the EU

Taxonomy

in economic activities that do

not qualify as environmentally

sustainable under the EU

Taxonomy

It promoted Environmental/Social (E/S)

characteristics and

while it did not have as its objective a

sustainable investment, it had a proportion of

___% of sustainable investments

with an environmental objective in economic

activities that qualify as environmentally

sustainable under the EU Taxonomy

with an environmental objective in

economic activities that do not qualify as

environmentally sustainable under the EU

Taxonomy

with a social objective

It made sustainable investments

with a social objective: ___%

It promoted E/S characteristics, but did not

make any sustainable investments

Sustainable

investment means

an investment in an

economic activity

that contributes to

an environmental or

social objective,

provided that the

investment does not

significantly harm

any environmental or

social objective and

that the investee

companies follow

good governance

practices.

The EU Taxonomy is

a classification

system laid down in

Regulation (EU)

2020/852,

establishing a list of

environmentally

sustainable

economic activities.

That Regulation

does not lay down a

list of socially

sustainable

economic activities.

Sustainable

investments with an

environmental

objective might be

aligned with the

Taxonomy or not.

Overview Strategic Report Governance Financials HICL Annual Report 2023 149

• Connect ng Commun t es, through nvestments n ra and ro ng stock, f bre

networks and te ecom towers; and

• Susta nab e Modern Econom es, through nvestments n assets that contr but ng

to the energy trans t on to ach eve net zero carbon em ss ons and de ver c mate

res ent nfrastructure, nc ud ng water, offshore e ectr c ty transm ss on, d str ct

energy and e ectr c ty d str but on.

(together, the "E/S Character st cs").

HICL s Manager, InfraRed Cap ta Partners, (“The Investment Manager”, “The Manager”

or “InfraRed”) ensured that, through the report ng per od, HICL:

• nvested n assets w th a soc a purpose and proact ve y engaged w th ts

stakeho ders to mprove susta nab ty outcomes across the portfo o;

• promoted env ronmenta n t at ves for the benef t of current and future generat ons;

• made a pos t ve overa mpact on the commun t es n wh ch our assets are ocated;

and

• through a of the above, a gned the nterests of stakeho der groups of HICL s

nvestments wh ch typ ca y have ong asset ves.

How did the sustainability indicators perform?

InfraRed used the fo ow ng key performance nd cators to measure the atta nment of the

E/S Character st cs that the Company promotes:

• Env ronmenta : Energy, water and waste management, cons derat on of c mate

r sks and Scope 1, 2, 3 em ss ons; and

• Soc a : commun ty contr but ons to env ronmenta or soc a n t at ves, and hea th

& safety po ces and performance, assessment of human r ghts and d vers ty and

nc us on po c es

(together, the "Susta nab ty Ind cators").

Informat on regard ng the performance of HICL's nvestments aga nst a susta nab ty

nd cators bes des Scope 1, 2 and 3 Em ss ons s prov ded n the tab e on page 146 of

th s Annua Report. Informat on regard ng the Company's nvestments' performance

aga nst Scope 1, 2 and 3 Em ss ons s prov ded n the tab e on page 71 of th s Annua

Report.

…and compared to previous periods?

HICL Annual Report 2023150

Appendix 1 continued

Overview Strategic Report Governance Financials HICL Annual Report 2023 151

How did this financial product consider principal adverse impacts on

sustainability factors?

Pr or to acqu s t on of an nvestment, the Investment Manager cons ders

performance aga nst the mandatory pr nc pa adverse mpact nd cators n Tab e 1 Annex 1 of

the SFDR RTS, to the extent that re evant data s ava ab e from each potent a nvestee

company. Post-acqu s t on, the Manager ensured assessment of the mandatory pr nc pa

adverse mpacts on an ongo ng bas s through an annua ESG Survey wh ch portfo o

compan es are asked to comp ete, the resu ts of wh ch are pub shed n HICL s Susta nab ty

Report each year. Informat on regard ng InfraRed s cons derat on of the pr nc pa adverse

mpacts n respect of HICL s nvestments s prov ded n HICL s Susta nab ty Report.

What were the top investments of this financial product?

The nformat on shown n the tab e be ow has a so been prov ded on page 26 of

th s Annua Report.

What was the proportion of sustainability-related investments?

N/A

What was the asset allocation?

100% of HICL s nvestments were made to atta n the E/S Character st cs n the

report ng per od.

To conf rm, the Company's asset a ocat on has been ca cu ated based on market

va ues n respect of "#1 A gned w th E/S Character st cs" nvestments and mark-to-

market va ue n respect of the "#2 Other" assets.

Largest investments

Sector

% Assets

Country

Affinity Water

Water & Electricity

A63 Motorway

Transport

France

Northwest Parkway

Transport

USA

Texas Nevada Transmission

Water & Electricity

USA

Fortysouth

Communications

New Zealand

High Speed 1

Transport

Royal School of Military Engineering

Education

Southmead Hospital

Healthcare

Pinderfields & Pontefract Hospital

Healthcare

ome Office

Fire, Law & Order

Asset

allocation

describes the

share of

investments

in specific

assets.

The list includes

the investments

constituting the

greatest

proportion of

investments of the

financial product

during the

reference period

which is: 1

January to 31

December 2022

HICL Annual Report 2023152

Appendix 1 continued

In which economic sectors were the investments made?

The Company s nvestments were n core nfrastructure assets, n the fo ow ng sectors:

Accommodat on, Educat on, E ectr c ty & Water, Hea thcare, F re, Law & Order and

Transport.

To what extent were the sustainable investments with an environmental

objective aligned with the EU Taxonomy?

InfraRed s not current y n a pos t on to d sc ose how and to what extent the nvestments

under y ng the Company are n econom c act v t es that qua fy as env ronmenta y susta nab e

econom c act v t es (as def ned n Art c e 3 of the EU Taxonomy). Th s s because HICL's

nvestments are n soc a nfrastructure, wh ch cannot at present be assessed aga nst the EU

Taxonomy. In accordance w th the European Comm ss on s Dec s on Not ce of 13 May 2022

(C(2022) 3051), InfraRed conf rms that the Company's nvestments are 0% EU Taxonomy-

a gned.

Did the financial product invest in fossil gas and/or nuclear energy related activities

complying with the EU Taxonomy

Yes

X No

Fossil gas and/or nuclear related activities will only compy with the EU Taxonomy where they contribute to limiting

climate change (“climate change mitigation”) and do not significantly harm any EU Taxonomy objective – see

explanatory not in the left hand margin. The full criteria for fossil gas and nuclear energy economy activities that

comply with the EU Taxonomy are laid down in Commission Delegated Regulation (EU) 2022/1214.

#1 Aligned with E/S characteristics nc udes the nvestments of the f nanc a product used to

atta n the env ronmenta or soc a character st cs promoted by the f nanc a product.

#2 Other nc udes the rema n ng nvestments of the f nanc a product wh ch are ne ther a gned

w th the env ronmenta or soc a character st cs, nor are qua f ed as susta nab e nvestments.

Investments

#1 Aligned with E/S

characteristics - 80%

#2 Other - 20%

Taxonomy-aligned

activities are

expressed as a

share of:

- turnover

reflects the

“greenness” of

investee

companies

today.

- capital

expenditure

(CapEx) shows

the green

investments

made by

investee

companies,

relevant for a

transition to a

green economy.

- operational

expenditure

(OpEx) reflects

the green

operational

activities of

investee

companies.

Overview Strategic Report Governance Financials HICL Annual Report 2023 153

What was the share of investments made in transitional and enabling activities?

As noted above, the Company s not current y n a pos t on to d sc ose how and to what

extent the nvestments under y ng the Company a gn w th the EU Taxonomy. Therefore,

the Company s not n a pos t on to d sc ose the m n mum share of nvestments n

trans t ona and enab ng act v t es.

How did the percentage of investments that were aligned with the EU Taxonomy compare

with previous reference periods?

N/A

The graphs below show in green the percentage of investments that were aligned with the EU

Taxonomy. As there is no appropriate methodology to determine the taxonomy-alignment of sovereign

bonds*, the first graph shows the Taxonomy alignment in relation to all the investments of the financial

product including sovereign bonds, while the second graph shows the Taxonomy alignment only in

relation to the investments of the financial product other than sovereign bonds.

*For the purpose of these graphs, ‘sovereign bonds’ consist of all sovereign exposures

To comply with

the EU

Taxonomy, the

criteria for fossil

gas include

limitations on

emissions and

switching to

fully renewable

power or low-

carbon fuels by

the end of 2035.

For nuclear

energy, the

criteria include

comprehensive

safety and waste

management

rules.

Enabling

activities

directly enable

other activities

to make a

substantial

contribution to

environmental

objective.

Transitional

activities are

activities for

which low-carbon

alternatives are

not yet available

and among others

have greenhouse

gas emission

levels

corresponding to

the best

performance.

OpEx

CapEx

Turnover

0% 50% 100%

1. Taxonomy-alignment of investments

including sovereign bonds*

Other investments

OpEx

CapEx

Turnover

0% 20% 40% 60% 80% 100%

2. Taxonomy-alignment of investments

excluding sovereign bonds*

Other investments

HICL Annual Report 2023154

Appendix 1 continued

What was the share of sustainable investments with an environmental

objective not aligned with the EU Taxonomy?

N/A

What was the share of socially sustainable investments?

N/A

What investments were included under “other”, what was their purpose and

were there any minimum environmental or social safeguards?

In re at on to “other” nvestments, currency, nterest rate and power pr ce hedg ng

s carr ed out to seek to prov de protect on aga nst fore gn exchange r sk and

ncreas ng costs of serv c ng Group Debt (as def ned n the Prospectus) drawn

down to f nance nvestments. However, currency and nterest rate hedg ng

transact ons w on y be undertaken for the purpose of eff c ent portfo o

management and w not be carr ed out for specu at ve purposes. In respect ve of

th s report ng per od spec f ca y, the va ue of nvestments n “other” was 0%.

What actions have been taken to meet the environmental and/or social

characteristics during the reference period?

HICL took severa act ons dur ng the per od to meet ts E/S Character st cs. An

out ne and a few examp es are prov ded be ow, for more deta ed nformat on p ease refer to

HICL s 2023 Susta nab ty Report.

Social impact:

As a trusted steward of essent a nfrastructure assets, HICL s ts at the heart of commun t es

and p ays a key ro e n modern soc ety. An examp e of one of HICL's soc a n t at ves over the

past year s n one of ts hea thcare assets. East Lancash re Hosp ta s Trust Char ty,

ELHT&Me, was ook ng to move ts operat ons to a more prom nent ocat on to ncrease pub c

exposure. B ackburn Hosp ta had two vacant reta un ts at ts ma n entrance wh ch prov de

an dea ocat on for obta n ng max mum mpact. The un ts were converted nto the Char ty

Hub, wh ch s now home to the Char ty s shop, a donat on desk and off ce for the Char ty staff,

who run the shop and organ se events.

The Hub prov des an nc us ve, access b e space for a w th n the oca commun ty,

part cu ar y the most vu nerab e. The reta out et stocks popu ar tems at extreme y

compet t ve pr ces, so peop e w th ess can a so donate wh e access ng what they need, a

part cu ar y mportant factor n the current econom c c mate.

W th the n t at ve comp eted, a new and prev ous y unobta nab e revenue stream has been

created for the Char ty resu t ng n spend now reach ng areas former y nfeas b e, such as on

essent a med ca equ pment. Consequent y, the project has enhanced the Char ty s ab ty to

g ve more back to the Trust for years to come.

are

sustainable

investments with an

environmental

objective that do

not take into

account the criteria

for environmentally

sustainable

economic activities

under Regulation

(EU) 2020/852.

Overview Strategic Report Governance Financials HICL Annual Report 2023 155

To ensure our n t at ves dr ve pos t ve soc a outcomes across the portfo o, InfraRed created

a Portfo o Impact Strategy. To ga n a deeper ns ght nto what operat ona and other

cha enges the peop e work ng at our assets are fac ng, the portfo o mpact team created The

C ent Ins ghts survey. The survey was des gned to capture the soc a cha enges and

sat sfact on of the c ent teams that ead our hea thcare and educat on assets. In 2022, the

survey was sent out for the second t me s nce ts ncept on. We more than tr p ed our

response rate from 2021 and donated over £30k to causes nom nated by our c ents to

encourage them to subm t the survey. From the survey we saw key themes emerge wh ch

have ed us n our th nk ng and subsequent creat on of new soc a susta nab ty n t at ves

across HICL s portfo o.

Environment:

HICL's key themes for env ronment surround b od vers ty, resources and c mate change. In

2022 for b od vers ty Aff n ty Water, one of HICL s assets, re aunched the INNS OUT scheme

for a second year, as part of an ongo ng comm tment to protect and enhance the hab tats of

nat ve w d fe on ts and and across ts supp y area by reduc ng the spread and ntroduct on

of Invas ve Non-Nat ve Spec es (INNS). INNS have a negat ve mpact on the economy and

w d fe hab tats, threaten ng nat ve spec es by spread ng harmfu d seases, out-compet ng for

resources, or damag ng natura ecosystems.

Through the scheme, the company has engaged w th 20 oca commun ty groups and

organ sat ons to he p stop the spread of INNS across mu t p e r ver catchments n the supp y

area. The support was both n k nd w th over 35 Aff n ty staff comm tt ng over 50 vo unteer

days towards the scheme, and f nanc a w th 16 projects rece v ng support tota ng £65,000.

The scheme demonstrated that a jo nt approach to work ng w th other organ sat ons to

comb ne resources and expert se s key to mprov ng the oca env ronment. The scheme w

reopen aga n for 2023, bu d ng on the work that has a ready been undertaken and expand ng

nto new areas.

In regards to resources, as a resu t of the ESG survey responses,

this year the Managers

resource focus has centred around reducing water consumption and the quantity of waste

disposed. Consumption habits vary significantly across the portfolio, however through the

ESG survey responses InfraRed can identify sector specific trends and then support with

scalable initiatives.

For examp e, severa s ng e use p ast c n t at ves have been ro ed out

across some of HICL s educat on assets w th an a m to ro out portfo o w de n th s sector.

HICL s act ons th s year n the f e d of c mate change are presented be ow n two parts; Net

zero and Em ss ons.

Net zero:

HICL’s Investment Manager, InfraRed, reinforced its commitment to reducing greenhouse

gas emissions by publishing its 2022 Net Zero Progress Report which outlined interim

targets set as part of their net zero commitment. These targets include an undertaking to

achieve net zero emissions for HICL’s entire portfolio by 2050 or sooner.

InfraRed’s chosen methodology for its net zero targets is the Paris-aligned Investment

Initiative’s (PAII) Net Zero Investment Framework (NZIF) for Infrastructure.

Framework developed by the Institutional Investor Group on Climate Change (IIGCC)

HICL Annual Report 2023156

Appendix 1 continued

Following this methodology, HICL’s two types of net zero targets that have been

approved by the Net Zero Asset Managers initiative. HICL commits to reviewing these

targets every five years at a minimum.

Portfolio Coverage Target = 50% aligned or aligning by 2030

Engagement Threshold Target = 90% portfolio engagement

The manager has a so set nter m net zero targets, wh ch nc ude HICL, out ned n th s report:

2022 NET ZERO PROGRESS REPORT

Em ss ons Report ng:

Over the ast 12 months, HICL has pr or t sed asset GHG data co ect on, ensur ng that th s

exerc se forms a centra e ement of our engagement act v ty. Integrated nto the Manager s

annua c mate outreach through a GHG em ss ons quest onna re, 97% of portfo o compan es

prov ded responses. Th s s a s gn f cant ncrease from a 75% response rate n the pr or year.

In add t on, we have a so seen mprovements n data granu ar ty wh ch can be d rect y nked

to efforts at project- eve through cons stent d a ogue ed by the Manager s Asset

Management team and at portfo o- eve through d scuss ons he d dur ng InfraRed s b -annua

ESG summ t w th a management teams.

How did this financial product perform compared to the reference

benchmark?

N/A

How does the reference benchmark differ from a broad market index?

N/A

How did this financial product perform with regard to the sustainability indicators to

determine the alignment of the reference benchmark with the environmental or social

characteristics promoted?

N/A

How did this financial product perform compared with the reference benchmark?

N/A

How did this financial product perform compared with the broad market index?

N/A

Reference

benchmarks are

indexes to

measure whether

the financial

product attains

the

environmental or

social

characteristics

that they

promote.

Overview Strategic Report Governance Financials HICL Annual Report 2023 157

HICL Annual Report 2023158

Valuation Policy

As described in the Valuation of the Portfolio section on page 46, the

Group’s investments are predominantly valued using a discounted

cash flow (“DCF”) analysis of the forecast investment cash flows from

each portfolio company.

The following is an overview of the key assumptions and principles

applied in the valuation and forecasting of future cash flows:

– Discount rates and other key valuation assumptions (as outlined

above) continue to be applicable

– Contracts for PPP projects and demand-based assets are not

terminated before their contractual expiry date

– A reasonable assessment is made of operational performance,

including in relation to PPP projects, payment deductions and the

ability to pass these down to subcontractors

– Distributions from each portfolio company reflect reasonable

expectations, including consideration of financial covenant

restrictions from senior lenders

– Lifecycle and capital maintenance risks are either not borne

by the portfolio company because they are passed down to a

subcontractor or, where borne by the portfolio company, are

incurred per current forecasts

– For demand-based assets, a reasonable assessment is made of

future revenue growth, typically supported by forecasts made by

an independent third party

– Where assets are in construction, a reasonable assessment is

made as to the timing of completion and the ability to pass down

any costs of delay to subcontractors

– Where a portfolio company expects to receive residual value from

an asset, that the projected amount for this value is realised

– Non-UK investments are valued in local currency and converted to

sterling at the period end exchange rates

– A reasonable assessment is made of regulatory changes in the

future which may impact cash flow forecasts

– Perpetual investments are assumed to have a finite life (e.g.

Affinity Water is valued using a terminal value assumption)

– In forming the above assessments, the Investment Manager works

with portfolio companies’ management teams, as well as engaging

with suitably qualified third parties such as technical advisers, traffic

consultants, legal advisers and regulatory experts.

Regulated assets – Affinity Water

The valuation drivers and metrics for certain regulated assets are

different in certain aspects from the Company’s other market

segments – in particular, it is necessary to forecast future regulatory

outcomes as well as operational performance against targets and

allowances agreed with the regulator.

The Regulated Capital Value (“RCV”) multiple, which measures a

company’s enterprise value as a multiple of RCV, is the most widely

used valuation metric for UK regulated assets and forms a useful

cross-check to the DCF-derived valuation. An RCV multiple will vary

depending on a company’s risk profile and operational performance,

influenced by factors such as whether the business is listed, its level

of gearing, whether it is responsible for funding a pension deficit, and

its business scope and complexity.

Appendix 2

Overview Strategic Report Governance Financials HICL Annual Report 2023 159

Appendix 3

The Infrastructure Market – Sources

Page 10

– Bridging infrastructure gaps: Has the world made progress?

McKinsey Global Institute (2017)

– Mind the gap: Time to rethink infrastructure finance,

WorldBank.Org (2022)

– Global Infrastructure Outlook, Global Infrastructure Hub (2018)

Page 11

– Health at a Glance 2019, OECD (2019)

– National Infrastructure Strategy, Policy Paper, Gov.UK (2020)

– World Population Prospects 2019 Highlights, The United Nations,

Department of Economic and Social Affairs (2019)

– World Population Ageing 2019 Highlights, The United Nations,

Department of Economic and Social Affairs (2019)

– £1.8bn to keep schools in top condition, Press Release,

Gov.UK (2021)

– PM confirms £3.7bn for 40 hospitals in biggest hospital building

programme in a generation, Press Release, Gov.UK (2020)

– The Recovery and Resilience Facility, the European Commission

– Market Update, 2022, 2021 & 2020 editions, European PPP

Expertise Centre (2023, 2022 & 2021)

– Fact Sheet: The American Jobs Plan, Whitehouse.gov (2021)

– UK Net-Zero Ambitions Threatened by Higher Interest Rates,

New Economics Foundation (2022)

Page 12

– Volume of data/information created, captured, copied, and

consumed worldwide from 2010 to 2020, with forecasts from 2021

to 2025, Statista (2022)

– Support for Broadband rollout, the European Commission

– Digital infrastructure, Bottlenecks hamper Europe’s progress,

Deutsche Bank Research (2018)

– Project Gigabit Delivery Plan: Autumn update, Policy Paper,

Gov.UK (2021)

– Project Gigabit Delivery Plan: Spring update, Policy Paper,

Gov.UK (2022)

– Updated Fact Sheet: Bipartisan Infrastructure Investment and Jobs

Act, Whitehouse.gov (2021)

– PM: A New Deal for Britain, Press Release, Gov.UK (2020)

– £27billion roads investment to support 64,000 jobs, Press Release,

Gov.UK (2020)

– Sustainable and Smart Mobility Strategy,

the European Commission

– Real Assets Viewpoint: Infrastructure Investment

and Jobs Act, BlackRock

Page 13

– Inflation Reduction Act: Muted near-term macro impacts but a

strong statement on sustainability, Fidelity International (2022)

– The ‘Fit For 55’ package at a glance,

European Climate Foundation (2022)

– Smart meter rollout delayed for four years, BBC (2019)

– £35bn green energy overhaul to prepare UK for zero-carbon

electricity system – and makes bills cheaper, i Newspaper (2020)

– EU approves €3bn German green heating scheme,

Reuters (2022)

– Renewable Energy Policies in a Time of Transition: Heating and

Cooling, IEA (2020)

– State aid: Commission approves €2.98bn German scheme

to promote green district heating, European Commission (2022)

– PN 23/19: Ofwat gives green light to massive investment

programme to transform water sector, Ofwat (2019)

– National Infrastructure Delivery Plan 2016 to 2021,Gov.UK, (2016)

Supplementary notes

* The data was taken from various publications released over several

years: Forecast for the years 2018 and 2019 as of 2018; Forecast

for 2020 as of May 2021; Forecast for 2021 to 2025 as of March

2021 based on figure for 2020 provided by the source. Figures were

rounded to provide a better understanding of the statistic.

The figures from 2021 to 2025 were calculated by Statista based on

the 2020 forecast figure and the five-year compound annual growth

rate (CAGR) of 23 percent provided by the source. The figures prior to

2020 are based on IDC’s forecast from late 2018.

HICL Annual Report 2023160

Glossary

Item Definition

Acquisition Strategy This identifies the scope for current acquisitions; further details can be found in HICL’s Business Model section

of this report

AIPs Approved Investment Parameters

AIF Alternative Investment Fund

AIFM Alternative Investment Fund Manager

AIFMD The Alternative Investment Fund Managers Directive seeks to regulate alternative investment fund managers

(“AIFM”) and imposes obligations on managers who manage alternative investment funds (“AIF”) in the EU or

who market shares in such funds to EU investors

AIC The Association of Investment Companies is a United Kingdom trade association for the closed-ended

investment company industry

AIC Code The 2019 AIC Code of Corporate Governance

AMP8 The UK water industry regulatory period from 2025 to 2030

Corporate assets These are assets that provide services or access to essential assets for corporate counterparties. The

relationship between the infrastructure asset owner and the corporate counterparty is usually contractual, with

prices set through a commercial negotiation or a market-clearing price

Corporate Group Refers to HICL and its Corporate Subsidiaries

Corporate Subsidiaries HICL Infrastructure 2 S.a.r.l. and Infrastructure Investments Limited Partnership

Demand-based assets Infrastructure assets with revenues linked to the usage of the underlying assets

Directors’ Valuation Fair market valuation of HICL’s investments and commitments at the balance sheet date. Further details

can be found in the Valuation of the Portfolio section of the report

ESG Environmental, Social and Governance

EPS Earnings per share

FATCA The Foreign Account Tax Compliance Act provisions of the US Hiring Incentives to Restore Employment Act

FCA UK Financial Conduct Authority

FM Facilities Management

IFRS Basis Basis on which HICL prepares its IFRS financial statements. HICL applies IFRS 10 and Investment Entities

(Amendments to IFRS 10, IFRS 12 and IAS 27) and therefore does not consolidate any of its subsidiaries,

including those that are themselves investment entities

HICL HICL Infrastructure Company Limited prior to 31 March 2019 and HICL Infrastructure PLC from 1 April 2019

InfraRed InfraRed Capital Partners and its Group, more details of which can be found at www.ircp.com

Investment Manager InfraRed Capital Partners Limited acting in its capacity as Investment Manager to HICL pursuant to the

Investment Advisory Agreement

Investment Basis Pro forma financial information on the basis that HICL consolidates the results of the Corporate Subsidiaries

Investment Policy HICL’s Investment Policy has not materially changed since IPO and can be found on the website at

/www.hicl.com/about-us/strategy-investment-policy/

Overview Strategic Report Governance Financials HICL Annual Report 2023 161

Item Definition

IPO Initial Public Offering, the act of offering the stock of a company on a public stock exchange for the first time.

HICL completed its IPO in March 2006

Lifecycle Concerns the replacement of material parts of an asset to maintain it over its concession life

Market capitalisation A measure of the size of a company calculated by multiplying the number of shares in issue by the price

of the shares

NAV Net Asset Value, being the value of the investment company’s assets, less any liabilities it has. The NAV per

share is the NAV divided by the number of shares in issue. The difference between the NAV per share and

theshare price is known as the discount or premium

Net Zero A portfolio coverage target, defined by the NZIF for Infrastructure, is the percentage of assets under

management that will be net zero, aligned or aligning by a given year. To be considered aligning, an asset must

have short and medium term targets that are underpinned by science-based pathways for its sector; it must

disclose all material scope emissions (including Scope 3) and evidence the governance of net zero plans.

The requirements of aligned status have a greater focus on implementation. The asset must have forecast

emissions performance against targets set as well as a decarbonisation strategy to support the reduction

projection. To be considered net zero, actual emissions must match or outperform the science-based

decarbonisation pathway

Ofwat The Water Services Regulation Authority

Ongoing charges A measure of the regular, recurring costs of running an investment company, expressed as a percentage

ofNAV

Operating company A company that owns and operates infrastructure assets

Partnership Infrastructure Investments Limited Partnership

Portfolio Company Companies that own or operate infrastructure assets, in which HICL has an investment

PPP project Public-Private Partnership projects involving long-term contracts between a public sector client and a private

company for the delivery of a service or facility for the use by the general public, public bodies, authorities

oragencies, usually in return for an availability payment

PR19 Ofwat’s final methodology for the 2019 Price Review, covering the regulatory period from 2020 to 2025 (“AMP7”)

PR24 Ofwat’s proposed methodology for the 2024 Price Review, covering the regulatory period from

2025 to 2030(“AMP8”)

PRI Principles for Responsible Investment

Project Company An infrastructure project or concession with a defined expiry date, including a special purpose company

(orother entity) formed with the specific purpose of undertaking an infrastructure project

Regulated assets Infrastructure assets with monopolistic characteristics and which are subject to regulatory price controls

Revolving Credit Facility An acquisition facility provided by lenders, held via a Corporate Subsidiary and expiring in June 2026. Seethe

Financial Review section of the report

RIDDOR Reporting of Injuries, Diseases and Dangerous Occurrences Regulations

Total Shareholder Return Return based on interim dividends paid plus movement in the period, divided by opening NAV per share

UN SDGs United Nations’ Sustainable Development Goals

HICL Annual Report 2023162

Directors & Advisers

Directors

Mike Bane (Chair)

Rita Akushie

Liz Barber

Frances Davies

Simon Holden

Frank Nelson

Martin Pugh

Kenneth D. Reid

Registered Office

One Bartholomew Close

Barts Square

London

EC1A 7BL

Registrar

Link Asset Services

The Registry

34 Beckenham Road

Beckenham

Kent BR3 4TU

Helpline: 0871 664 0300

Company Secretary

and Administrator

Aztec Financial Services (UK)

Limited

Forum 4, Solent Business Park

Parkway South

Whiteley

Fareham

PO15 7AD

Investment Manager

and Operator

InfraRed Capital

Partners Limited

One Bartholomew Close

Barts Square

London

EC1A 7BL

+44 (0)20 7484 1800

Auditor

KPMG LLP

15 Canada Square

London

E14 5GL

Financial PR

Brunswick Group Advisory Ltd

16 Lincoln’s Inn Fields

London

WC2A 3ED

Joint Corporate Brokers

Investec Bank plc

30 Gresham Street

London

EC2V 7QP

RBC Capital Markets

2 Swan Lane

London

EC4R 3BF

Company

HICL Infrastructure PLC is incorporated in England and Wales

under the Companies Act 2006 with registered no. 11738373

and registered as an investment company under Section 833

of the Companies Act 2006.

Investment Manager and Operator

InfraRed Capital Partners Limited is an English limited company

registered in England & Wales under number 03364976 and

authorised and regulated by the Financial Conduct Authority

(authorisation number 195766). InfraRed is a part of SLC

Management which is the institutional alternatives and traditional

asset management business of Sun Life.

Shareholders’ funds

£3.4bn as at 31 March 2023

Market capitalisation

£3.1bn as at 31 March 2023

Investment Manager and Operator fees

1.1% per annum of the Adjusted Gross Asset Value

of the portfolio

up to £750m, 1.0% from £750m up to £1.5bn, 0.9% from £1.5bn

up to £2.25bn, 0.8% from £2.25bn to £3.0bn, 0.65% above £3.0bn

plus £0.1m per annum investment management fee

No fee on new acquisitions

No performance fee

Fees relating to shareholder matters from underlying

project companies are paid to the Group (and not to the

Investment Manager).

ISA, NISA, PEP and SIPP status

The shares are eligible for inclusion in NISAs, ISAs and PEPs

(subject to applicable subscription limits) provided that they

have been acquired by purchase in the market, and they are

permissible assets for SIPPs.

NMPI status

HICL conducts its affairs as an investment trust. On this basis,

the Ordinary Shares should qualify as an ‘excluded security’

and therefore be excluded from the FCA’s restrictions in COBS

4.12 of the FCA Handbook that apply to non-mainstream pooled

investment products.

AIFMD status

HICL is a UK domiciled and tax-resident public limited company,

which will operate its affairs as a UK Investment Trust Company,

and an Alternative Investment Fund under the AIFM Directive.

HICL has appointed InfraRed Capital Partners Limited as

its Investment Manager and AIFM under the Investment

Management Agreement.

FATCA

HICL has registered for FATCA and has GIIN number

E6TB47.99999.SL.826

Investment Policy

HICL’s Investment Policy is set out in the Strategic Report Disclosures

of the Company’s 2022 Annual Report and can be found in full on the

website at www.hicl.com

ISIN and SEDOL

ISIN: GB00BJLP1Y77 SEDOL: BJLP1Y7

Website

www.hicl.com

1 Adjusted Gross Asset Value means fair market value, without deductions for borrowed

money or other liabilities or accruals, and including outstanding subscription obligations

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Registered address

HICL Infrastructure PLC

(Registered number: 11738373)

Level 7, One Bartholomew Close

Barts Square, London, EC1A