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Company Announcements

Preliminary results for the year ended 31 Dec 2016

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By LSE RNS

RNS Number : 8696Z

John Laing Infrastructure Fund

20 March 2017

John Laing Infrastructure Fund Limited

Preliminary results for the year ended 31 December 2016

Another year of good performance

· Today declaring a dividend of 3.48 pence per share for the six months to 31 December 2016, up 2.0%, which is above the Consumer Prices Index

· Today announcing the issue of up to approximately 89.8 million new ordinary shares by way of a shareholder tap issue (see separate announcement for further details)

· Dividends of 6.82 pence per share paid in 2016

· Net Asset Value ("NAV") of £1,080.6m, representing a NAV per share of 120.2 pence

· NAV total return of 10.9%

· Portfolio value of £1,217.6 million, up 40.3% on that as at 31 December 2015

· Underlying portfolio growth of 8.18%, 1.14% ahead of growth arising from discount rate unwind

· £93.2m received in cash from investments

· New investments of approximately £306.0m, including one follow-on interest and interests in seven new projects

· Divestment of interests in two projects for £43.4m, representing a c.36% uplift on the carrying value, and resulting in an aggregate realised IRR of c.16%

· Total Shareholder Return of 76.5% since launch (November 2010), 9.8% annualised (simple basis)

· Intending to seek shareholder approval at AGM in May 2017 to widen the geographic limits of the investment policy to include certain other countries that are fiscally strong and have a track-record of using PPP as a procurement method

Commenting on today's results, Paul Lester, Chairman of JLIF, said:

"I am pleased to present JLIF's year-end results for the financial year 2016. It was a busy 12 months for JLIF, with investments of £306 million, a record amount in any single year since launch. JLIF also sold its interests in two projects having received offers that the Board considered represented better value for shareholders than could be achieved by retaining the interests. The disposals generated proceeds of £43.4 million that were re- invested almost immediately. During the year JLIF paid dividends of 6.82 pence per share, supported by good Portfolio performance, with underlying growth again ahead of the discount rate unwind. With JLIF's share price benefitting from market volatility in the wake of the EU referendum outcome, JLIF delivered a share price total return of 17.5% over the year. I am confident in the outlook for JLIF's business prospects and look forward to being able to report to you news of another successful year in 2017."

For further information, please contact: John Laing Capital Management	020 7901 3326
Andrew Charlesworth
Finsbury	020 7251 3801
Faeth Birch Philip Walters

This Announcement contains Inside Information as defined under the Market Abuse Regulation (EU) No. 596/2014.　

JLIF is one of Europe's largest London-listed equity infrastructure funds, with a Premium Listing on the London Stock Exchange. JLIF partners with public sector counterparties across the world to provide key local and national infrastructure projects that generate government-backed, inflation-linked revenues. JLIF's success is built on a collaborative approach centred on long term relationships with its clients such that their changing
infrastructure needs are met in a timely and cost-effective manner.

John Laing Infrastructure Fund Limited
Annual Report 2016

ACTIVELY GENERATING LONG TERM SUSTAINABLE VALUE CAUTIONARY STATEMENT

Pages 4 to 37 of this Annual Report (including but not limited to the Chairman's Statement, Risk Committee Report and the Investment Adviser Report, together the "Review Section") have been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. These should not be relied on by any other party or for any other purpose.

The Review Section may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "forecasts", "projects", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology.

These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Annual Report and include statements regarding the intentions, beliefs or current expectations of the Directors and the Investment Adviser concerning, amongst other things, the investment objectives and investment policy, financing strategies, investment performance, results of operations, financial condition, liquidity, prospects, opportunities and distribution policy of the Company and the markets in which it invests.

These forward-looking statements reflect current expectations regarding future events and performance and speak only as at the date of this Annual Report.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance or results and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. The Company's actual investment performance, results of operations, financial condition, liquidity, prospects, opportunities, distribution policy and the development of its financing strategies may differ materially from the impression created by the forward-looking statements contained in this Annual Report.

Subject to their legal and regulatory obligations, the Directors and the Investment Adviser expressly disclaim any obligations to update or revise any forward-looking statement contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.

In addition, the Review Section may include target figures for future financial periods. Any such figures are targets only and are not forecasts.

This Annual Report has been prepared for the JLIF Group as a whole and therefore gives greater emphasis to those matters which are significant to John Laing Infrastructure Fund Limited and its subsidiary undertakings when viewed as a whole.

ABOUT US

JLIF is one of Europe's largest listed infrastructure funds, with a Premium Listing on the London Stock Exchange. JLIF launched in November 2010 via an IPO with a seed portfolio of 19 projects, and a mandate to invest in the equity and sub-ordinated debt issued predominantly with respect to operational Public-Private Partnership ("PPP") projects. With no finite life to the Fund, JLIF aims to own infrastructure assets over the long term. As at 31 December 2016, JLIF's Portfolio comprised investments in 62 infrastructure PPP projects, diversified by both geography and sector. Since launch in November 2010, JLIF has delivered a total shareholder return of 76.5%. In 2016, JLIF paid a total of 6.82 pence per share in dividends, while its Portfolio delivered underlying growth in the period of 8.18%.

OVERVIEW

Our purpose

JLIF believes that physical infrastructure plays a crucial role in stimulating economic growth, increasing the efficiency and productivity of both industry and individuals, and in providing employment, both during construction and operations. JLIF also believes that private sector participation is key in the development and renewal of infrastructure assets, bringing efficiencies, expertise and improved affordability. JLIF believes that the need for such investment is increasing with pressures from demographic trends such as population growth, urbanisation and an expanding middle class. JLIF's purpose is to support governments, cities and communities in meeting their infrastructure needs, from delivery and financing through to operations and management, as a responsible owner of infrastructure projects.

Our objective

JLIF's objective is to be the private sector partner of choice for public-sector clients in the markets within which it operates, making available for use high-quality infrastructure assets that meet or exceed contractual requirements and specifications. In doing so, JLIF's aim is to provide its shareholders with a source of stable, predictable income and to deliver a shareholder IRR of 7-8% over the long term, by actively managing our portfolio of projects and selectively investing in new value accretive investments.

Key facts

	2016	2015
Market Capitalisation	£1,166.0m	£950.8m
Ordinary shares in issues	899,003,264	814,751,471
Share price	129.7p	116.7p
Number of projects	62	57
Fair value of investments through profit and loss	£1,078.2m	£883.1m
Portfolio Value1	£1,217.6m	£867.8m
Net Assets	£1,080.6m	£883.1m
NAV per share	120.2p	108.4p
Dividend per share paid	6.82p	6.75p
Company Cash	£5.5m	£2.5m
Group1 Cash	£32.7m	£33.8m
Profit before tax	£160.4m	£47.0m
Management Fees	1.1% on APV* up to £500m; 1.0% from £500m to £1 billion; 0.9% above £1 billion
Board	Six independent Directors	Six independent Directors

1 See Glossary for definition

* Adjusted Portfolio Value

FINANCIAL AND OPERATIONAL HIGHLIGHT

(including events after the balance sheet date)

January

· In January 2016, acquired a 40% interest in Barcelona Metro Stations L9T2 from Iridium

February

· In February 2016, completed the acquisition of a 100% interest in the British Transport Police project from a member of John Laing Group plc and

The John Laing Pension Trust Limited

March

· In March 2016, raised gross proceeds of £92.9 million via a shareholder tap issue, used to repay debt drawn to finance acquisitions earlier in

the year

May

· In May 2016, acquired a 95% interest in the Oldham Social Housing project from a member of John Laing Group plc

· In May 2016, paid a dividend of 3.41 pence per share relating to the six-month period ended 31 December 2015

June

· In June 2016, completed the acquisition of a 100% interest in the Connecticut Service Stations project

· In June 2016, completed the disposal of JLIF's entire interests in the Newham Hospital and Barnsley Building Schools for the Future projects to Equitix for a combined consideration of

£43.4 million

· In June 2016, signed and agreed the terms of a £150 million three-year accordion facility, increasing the total amount of debt finance available to JLIF to £330 million

July

· In July 2016, completed the acquisition of an additional 13.5% interest in Barcelona Metro Stations L9T2 and a new 13.5% interest in Barcelona Metro Stations L9T4

October

· In October 2016, paid a dividend of 3.41 pence per share relating to the six-month period ended 30 June 2016

December

· In December 2016, completed the acquisition of a 100% interest in the A55 Holyhead to Llandegai DBFO project and a 6% indirect interest in the Intercity Express Programme Phase 1 project, both from members of John Laing Group plc

CHAIRMAN'S STATEMENT

Introduction

I am pleased to report another set of good results for the Company. 2016 was a significant year for JLIF in many ways, not least in the area of new investments and markets with the Fund making its first investments in Spain and the US. Continued active management of the existing Portfolio resulted in delivery of a number of value enhancements and underlying Portfolio growth was once again ahead of the discount rate unwind. Overall, distributions from our Portfolio continued to support the ongoing operation of the Company and dividends paid to investors that, together with growth in the share price, resulted in a total shareholder return for the year of 17.5%.

For the UK as a whole, 2016 also saw the UK public voting in favour of leaving the European Union, an event that caused disruption to financial markets both in the run up, but particularly in the aftermath. While perhaps not as extreme as some had feared, these times of increased volatility will require the Company to be increasingly adaptable. As at other times of market uncertainty, listed infrastructure stocks are often seen as 'safe havens' and this once again proved true with JLIF's share price peaking for the year in August. With Sterling depreciating, JLIF's balance sheet also benefitted with the valuation of its non-Sterling projects increasing. However, commensurately investing in new overseas projects has become more expensive.

Dividends and Share Issuance

In 2016, JLIF paid dividends to shareholders of 6.82 pence per share, representing a dividend yield on the closing share price as at 31 December 2016 of 5.3%, the highest dividend yield amongst the London-listed infrastructure equity funds. Today we are announcing a dividend relating to the

six months ended 31 December 2016 of 3.48 pence per share, representing further progression of 2.0% on the most recently paid dividend in October 2016.

In March 2016, the Company issued a further 81.2 million shares via a shareholder tap issue that was accretive to the Company's Net Asset Value ("NAV"). This resulted in gross proceeds of £92.9 million that were used to repay debt drawn in relation to the initial investment made in the Barcelona Metro Stations L9T2 project earlier in the year. As at the end of 2016, JLIF had in issue

899.0 million shares.

Performance

Over the year, JLIF's share price increased from an opening value of 116.7 pence to a closing value of 129.7 pence. This, together with dividends paid in the year of 6.82 pence per share resulted in a total shareholder return ("TSR") for the 12 months of 17.5% (with dividends re- invested). Since launch through to the end of December 2016, JLIF delivered a TSR of 76.5%, equating to a simple-basis annualised TSR of 9.8%. JLIF's NAV increased from £883.1 million to

£1,080.6 million over the year, a 10.9% increase on a NAV per share basis. In addition, as at 31 December 2016 £171.4 million was drawn on the revolving credit facility compared to £17.0 million the previous year.

The value of JLIF's Portfolio grew significantly in 2016, driven largely by new investments, positive exchange rate movements (unrealised), a reduction in discount rates, discount rate unwind and value enhancement activities.

As at every balance sheet date, the discount rates used to value the Portfolio are reviewed to ensure they continue to reflect our market experience. While this resulted in a reduction in the discount rates applied to the projects comprising the Portfolio at the start of the year, this was offset by the acquisition of certain projects during the year at higher discount rates. The weighted average discount rate ("WADR") therefore increased marginally from 7.82% as at 31 December 2015 to 7.87% as at 31 December 2016.

Underlying portfolio growth was ahead of discount rate unwind for the sixth consecutive year, the result of active management and value enhancement efforts across the Portfolio. Examples of

such areas of value enhancement included cost efficiencies (including insurance and SPV management) at both project and Portfolio level, prudent management of lifecycle costs, and reduced margins resulting from the refinancing of senior debt. Additionally, during 2016 JLIF completed the sale of its interests in two projects (Newham Hospital and Barnsley Building Schools for the Future), further details of which are provided below.

JLIF's Portfolio at 31 December 2016 was valued at £1,217.6 million, an increase of £349.8 million (including underlying growth of £92.0 million) on the valuation as at 31 December 20154. Of the

£92.0 million of underlying growth, £12.8 million of this represented outperformance; i.e. growth beyond that expected from the simple unwind of the discount rate (adjusted for the timing of acquisitions, disposals and distributions received in the year). The table below shows the underlying growth of the Portfolio for the past four years, and shows that JLIF's Portfolio has consistently outperformed.

	2013	2014	2015	2016
Underlying portfolio growth	7.24%	9.22%	8.34%	8.18%
Adjusted unwind of the discount rate	6.38%	7.81%	8.12%	7.04%
Outperformance	0.86%	1.41%	0.22%	1.14%

4 See the Investment Adviser Report for further detail on the drivers of this growth.

Investments and Disposals

JLIF made a record £306.0 million of investments in 2016. This included two metro stations projects in Spain, a motorway service stations project in the US, and a rail rolling stock project, road project, social housing project and justice project in the UK. All of the investments were made on a bilateral basis, outside of competitive auction processes.

In June 2016, JLIF sold its entire interests in the Barnsley BSF and Newham Hospital projects. This was having received offers that valued JLIF's interests in both projects at a level significantly above that which the Board considered could be achieved by retaining the interests. It was decided that it was in the best interests of the Company to accept the offers and to redeploy the sale proceeds at better value elsewhere. The disposal proceeds were redeployed almost immediately in July 2016, being used to part-fund the investment in the Connecticut Service Stations project.

The sale value represented an uplift on JLIF's valuation of the investments as at 31 March 2016 of approximately 36% and saw JLIF realise an aggregate IRR of approximately 16%. The Board and Investment Adviser will continue to consider and evaluate potential disposals, taking account of the best interests of the Company.

Gearing

At the Company's AGM in May 2016, shareholders approved an increase in the gearing limit in the articles of association and investment policy from 25% to 35% of JLIF's Total Assets.

Subsequent to this, JLIF signed the terms of an accordion facility in June 2016, providing it with access to an additional £150 million of debt, with the same financial institutions as those who provide the Company's £180 million revolving credit facility. The margin on the accordion facility of 175bps is the same as on the main facility.

JLIF drew on its revolving credit facility several times throughout the year to finance new investments. In July, JLIF drew on its facility in Euros

(€63.0 million) to finance the acquisition of a follow-on interest in the Barcelona Metro Stations L9T2 project and a new interest in the Barcelona Metro Stations L9T4 project. As noted at the time, given the relative weakness of Sterling against the Euro subsequent to last June's referendum on

EU membership by the UK, JLIF intends to use income from its portfolio of Euro-denominated projects to repay this debt so as to provide a

natural hedge.

As at 31 December 2016, JLIF's revolving credit facility was drawn by £171.4 million. We are today announcing a proposed share issuance by way of a shareholder tap issue for up to approximately

89.8 million new ordinary shares, the maximum that can be issued via a shareholder tap issue. The proceeds of the issue will be used to repay most of the outstanding Sterling-borrowings, with the Euro-borrowings remaining drawn as JLIF does not wish to use a historically weak Sterling to repay Euro debt. As at 31 December 2016, the Euro-borrowings totalled €59.0 million (€57.0 million as

at the start of March 2017). With the intention being not to raise against the Euro-borrowings, it was deemed by the Board more cost effective to undertake a shareholder tap issue as opposed to a full open offer and placing which is a more expensive process (and therefore only appropriate when seeking to raise larger amounts).

Governance & Regulation

The Company applies the UK Corporate Governance Code and is required to comply with the EU- wide Alternative Investment Fund Managers Directive ("AIFMD") and the Company remains a self- managed non-EU Alternative Investment Fund ("AIF"). We continue to comply with all of the reporting requirements with respect to AIFMD including quarterly reporting in the jurisdictions in which the Company is marketed, and disclosures contained within the annual and interim reports.

The Board has considered the principles and recommendations of the AIC Code of Corporate Governance, as revised in 2010, ("AIC Code") by reference to the AIC Corporate Governance Guide for Investment Companies ("AIC Guide"). The AIC Code, as explained by the AIC Guide, addresses all the principles set out in Section 1 of the Combined Code, as well as setting out additional principles and recommendations on issues that are of specific relevance to the Company. More information is on page 38 of this report. The Company intends to continue complying with the

AIC Code in this financial year.

Risks & Uncertainties

While the Investment Adviser manages the risks facing the Company on a day-to-day basis, the Board retains ultimate responsibility. JLIF's Risk Committee continues to review on a regular basis the principal risks facing the Company and the controls that we have in place to manage

those risks. An overview of JLIF's risk management strategies, a description of what the Board considers the principal risks, as well as the ways by which these are mitigated, are contained in the Risk Committee report on pages 10 to 15.

One of the risks identified in recent reports to shareholders has been in relation to the OECD's Base Erosion and Profit Shifting ("BEPS") initiative. Based on the most recently published draft legislation (in December 2016) we believe that this no longer represents such a significant risk to JLIF, with our analysis meaning that we do not expect introduction of the legislation to have a material impact on the valuation of the Portfolio. While recognising that draft legislation is not enacted legislation, this risk has been downgraded in the Company's risk register.

Board & AGM

I would once again like to thank my fellow Directors for their regular and meaningful contribution to the Board. We have met a number of times outside of the regular scheduled meetings during the year to support the execution of the Company's business plan and I offer my thanks to the Board for their continued commitment.

The Company's Annual General Meeting will be held at 10.30am BST on 19 May 2017 at The Douglas and Dalrymple Rooms, Old Government House Hotel, St Ann's Place, St Peter Port, Guernsey, Channel Islands.

Market & Business Outlook

The markets in which JLIF invests continue to provide opportunities for growth, although increasingly these opportunities are outside of the UK. Consequently, attached to investing in

these markets is exposure to exchange rate risk. While there are diversification benefits that come with holding a portfolio of investments spread across a number of geographies, and there are ways to manage exchange rate risk, investing increasingly overseas creates a greater exposure to non- Sterling income.

This trend is both a function of a lack of UK greenfield PPP pipeline in recent years and consolidation of the majority of UK operational PPP projects into the ownership of long term investors. While there is discussion around the announcement of a pipeline of PF2 projects, it is likely that most opportunities that do arise will be brought to market via competitive auction processes. These tend to attract very high pricing because of asset scarcity and an attractive investment environment (i.e. strong credit rating of public-sector counterparties, strong legal and regulatory frameworks to support the contractual structures of projects etc.)

More active PPP markets can be found in parts of Continental Europe, North America and further afield in Australia and Latin America. The US in particular, as a less developed PPP market, is likely to present further good investment opportunities over the next few years, especially with the new Administration's stated policy to use private finance to support infrastructure development.

The scale of the infrastructure investment need in the US is significant. JLIF was pleased to complete its first investment in the US market in mid-2016, thereby establishing a presence and foothold for further acquisitions.

In 2016, each of the seven investments made by JLIF were completed on a bilateral basis. Four of these (31% by value) were acquired from members of John Laing Group plc under the First Offer Agreements, and three (69% by value) from other vendors. JLIF and its Investment Adviser invest significant time and effort into developing and maintaining relationships with primary developers and vendors, as well as sale advisers who often advise vendors on potential investors to approach. The JLIF Board remains confident about the prospects of the business and is optimistic for the future growth of the Company.

Paul Lester CBE

Chairman

16 March 2017

STRATEGIC REPORT

OBJECTIVE

JLIF's objective is to be the preferred private sector partner of choice for public-sector clients of operational infrastructure PPP projects within the markets in which it operates, making available for use high-quality infrastructure assets that meet or exceed contractual requirements and specifications. To this end, JLIF aims to develop strong working relationships with its public-sector clients, based on collaboration.

In doing so, JLIF's aim is to provide shareholders with a source of stable, predictable income and to deliver a shareholder IRR of 7-8% over the long term, by actively managing its portfolio of projects and selectively investing in new value accretive investments. JLIF aims to reduce shareholder risk by offering the opportunity to invest in a well-diversified portfolio, with regard to the number of investments, and the mix of public- sector counterparties (both by jurisdiction and sector) and currency exposure, and to provide a degree of inflation protection via inflation-linked returns.

To ensure the Portfolio remains well diversified, JLIF's shareholders have approved an investment policy that includes the following limits with regard to the composition of the Portfolio:

• up to 30% of the Portfolio in assets still in their construction phase;

• up to 10% of the Portfolio in projects that are not classified as PPP projects, but exhibit a substantially similar risk profile and characteristics;

• up to 15% of the Portfolio in projects that are classified as having a demand-based payment mechanism; and

• up to 50% of the Portfolio in overseas jurisdictions, maintaining at least 50% invested in UK assets at all times.

Further details of the Investment Policy are found on pages 20 to 21 of this Annual Report.

JLIF also aims to manage its investments such that they deliver at least the returns expected at the time of acquisition, and to be at the forefront of disclosure and transparency amongst its peer group such that its shareholders remain updated and can understand the performance of the business, the risks facing it and its prospects going forward.

MARKET OUTLOOK

JLIF's investment policy is to invest predominantly in operational, PPP projects. The PPP model is used by various governments around the world as a way by which to procure infrastructure assets. In certain countries, it has been used for a long time and is an established method with a proven history and political support. Such mature markets include the UK, Canada, much of Western Continental Europe, Australia and Chile. Other markets, including the US, have only more recently started using the PPP model, although have the potential to grow significantly over the coming years.

Globally there is a significant need for infrastructure investment, both in more economically developed economies where existing infrastructure assets require upgrading or replacing, and in less developed economies, where the need is driven by the processes of rapid population growth, urbanisation and increasing levels of economic wealth (e.g. car ownership). For a variety of reasons, many governments see the benefits that derive from private sector involvement and consider private sector participation as key to meeting their infrastructure needs over the coming decades.

With competition for assets in more established, traditional PPP markets, remaining high, it is becoming necessary to broaden where JLIF seeks out investment opportunities in order to find new investments that represent good value. Increasingly this may include slightly more nascent PPP markets, although these will only be considered where the degree of risk is considered reasonable and the Company's interests remain adequately protected.

In the short term, developed markets are expected to continue to present the majority of opportunities. However, over the longer term (as pipelines and regulatory and legal frameworks become more established) the best value opportunities may arise in sectors and jurisdictions outside of those that have historically formed the core of JLIF's Portfolio. JLIF is confident that its investment policy provides sufficient flexibility to be able to target and benefit from such opportunities.

These new opportunities are likely to compliment further investments in JLIF's core markets, providing additional diversification across the Portfolio. To succeed in its core markets, JLIF will need to focus increasingly on originating bilateral deals through developing long-term relationships with greenfield developers/sponsors. The Company believes that the Board and the Investment Adviser have the right resources in play to achieve this.

BUSINESS MODEL

JLIF's business model is to predominantly invest in equity and sub-ordinated debt issued with respect to operational infrastructure PPP projects. While the Company's Investment Policy allows up to 30% of its Total Assets to be invested at any one time in projects still in their construction phase, JLIF predominantly targets operational projects, as it is ordinarily upon operations commencement that revenues start to be received. This supports the Company's objective, as described above, to deliver income (or yield, as opposed to capital growth) to shareholders.

Revenue

The majority of projects in which JLIF invests (92.5% by value as at 31 December 2016) have an availability-based payment mechanism. This means that the project company receives a pre- agreed payment (usually on a monthly basis) from the public-sector counterparty, known as a unitary payment. This is received in return for making the infrastructure asset (e.g. school, hospital, police station etc.) available for use and in accordance with the contractual specifications. These specifications may include, for example, the requirement for certain areas of a building (e.g. a hospital) to be maintained within a specific temperature range. Where such specifications are not met, certain parts of, or in extreme cases, whole projects, may be deemed by the public-sector client to be unavailable for use. In this event, deductions may be made against the unitary payment received by the project company, thereby incentivising the project company to ensure that this does not happen. Most of this type of operational risk on a project is passed-down to a specialist facilities management company on a back-to-back basis (although liability caps may apply beyond which the risk is retained by the project company).

Other projects include a demand-based payment mechanism, where the amount of revenue received by the project company is based not on the asset being made available for use, but rather on the level of use of the asset. As at 31 December 2016, JLIF held an investment in one asset (the Connecticut Service Stations P3 project) deemed to have demand-based revenue risk. By value, this asset comprised 7.5% of the Portfolio.

Profit

Availability-based projects

On availability-based projects the unitary payment is agreed prior to signing of the project agreement at the start of a project, and sized to cover the project company's costs of construction, operation and financing. Given JLIF predominantly invests only in operational projects (i.e. after the construction phase is complete), the main costs incurred by the projects at this time are those relating to maintenance and operation of the asset, and costs associated with how the initial construction was financed. As noted, the unitary payment is fixed (other than in the event of contractually agreed variations to the project or inflationary changes). Therefore, if the project company can manage its operating and financing costs more efficiently (i.e. to a level below that originally anticipated at the time of signing of the project agreement), while continuing to deliver the required level of service under the project agreement, then it will make an increased profit/return.

However, attached to certain cost savings generated by the project company are sharing arrangements. These stipulate that, should cost savings be made, a proportion of these efficiencies be shared with the public-sector client. For other costs - usually those that are uncontrollable by the project company (e.g. change in law) - should these increase above what was originally anticipated when sizing the unitary payment, the 'pain' of such increases are also shared with the public-sector client.

Where the risk associated with a particular cost has been passed-down to a sub-contractor, the sub-contractor benefits/suffers from cost savings or increases, as opposed to the project company. Typically, although not always, such costs can include lifecycle and routine maintenance costs.

Those costs whose risk of variability is typically retained by the project company include insurance costs, project company management costs and senior debt finance costs.

Demand-based projects

The cost side of a demand-based project is very similar to that of an availability-based project. The main difference therefore lies on the revenue side. As noted above, in a demand-based project, revenues are based on the level of use of a project, and therefore are inherently less certain (i.e. riskier). The profitability of a demand-based project is therefore as much concerned with managing costs as it is about maximising revenues. Profitability is driven by the project company's ability to encourage higher use of the asset, as well as wider macroeconomic/demographic factors (of which assumptions are made at the time of investment).

Fund Level

Profits made by the underlying project companies in which JLIF invests are ultimately returned to JLIF by way of dividends and sub-ordinated debt interest and principal repayments (collectively known as distributions). Distributions from the projects comprising the Portfolio are aggregated at the Fund level and distributed to JLIF's shareholders by way of dividends, after accounting for costs incurred in managing the Fund. The principal costs incurred in managing the Fund are those related to the Investment Adviser, the Board, the Auditor, the Administrator, fees related to JLIF's corporate credit facility, adviser fees related to capital raising activities and regulatory fees, amongst others. A review of the Ongoing Charges

(i.e. costs in managing the Fund) for 2016 can be found in section 2.2 of the Investment Adviser Report.

The above description is a representative simplification of JLIF's business model and of the project companies in which it invests. In reality the contracts relating to the projects may be more detailed and complex.

OUTCOMES AND KEY PERFORMANCE INDICATORS ("KPIS")

There are two categories of KPIs JLIF is measured against:

• the performance of the investment in JLIF; and

• the compliance of the investments JLIF makes against its policy.

Performance based KPIs

KPI

2015

2014

Yield

Objective: To provide shareholders with a dividend yield of at least 6% on the IPO Issue Price of 100p.

Measurement: This is expressed as a ratio of the total annual dividend yield against both the IPO Issue Price and the year-end share price.

Total dividend paid within the financial year: 6.82pps

Status: 6.82% on the IPO issue price5, being 5.3% yield on share price as at 31 December 2016.

Share price at 31/12/16: 129.7p

Total dividend paid within the calendar year: 6.75pps

Status: 6.75% on the IPO issue price5, being 5.8% yield on share price as at 31 December 2015.

Share price at 31/12/15: 116.7p

Total dividend paid within the calendar year: 6.50pps

Status: 6.50% on the IPO issue price5, being 5.3% yield on share price as at 31 December 2014.

Share price at 31/12/14: 122.8p

Comments

While there was further progression of the total dividends paid within the financial year, the dividend yield

on the closing share price decreased (relative to 2015) as consequence of the increase in share price over

the period.

Fund IRR6

Objective: To target an IRR of 7-8% over the longer term.

Measurement: This is by reference to the IPO Issue Price of 100p, the year-end share price and dividends paid since launch

Fund IRR since launch:

9.8%

Fund IRR since launch:

8.6%

Fund IRR since launch:

10.4%

Comments

The IRR delivered by JLIF to its shareholders over the period from IPO to 31 December 2016 of 8.5% remains above the long term target of 7-

8%.

Policy based KPIs

KPI

2016

2015

2014

The value of any single investment shall not be greater than 25% of the Total Assets of the Group measured post acquisition

Maximum single asset

13.25% of total asset value

Maximum single asset

%: 7.71% of total asset value

Maximum single asset %:

7.59% of total asset value

The borrowings of the

Maximum debt drawn

Group, including financial guarantees supporting subscription obligations, shall not exceed 35%7 of the Total Assets of the Group	during the year: 15.81% of total asset value.	during the year: 1.92% of total asset value.	during the year: 0% of total asset value
The value of investments in the construction phase shall not exceed 30% of the total assets of the Group	Value of investments at the year-end: 3.91% of total asset value	Value of investments at the year-end: 0% of total asset value	Value of investments at the year-end: 0% of total asset value
The value of investments receiving demand-based payments shall not exceed 15% of the Total Assets of the Group	Value of investments at the year-end: 8.45%8 of total asset value	Value of investments at the year-end: 0% of total asset value	Value of investments at the year-end: 0% of total asset value
The value of investments in non- PPP infrastructure assets (but with substantially similar characteristics and risk profiles) shall not exceed 10% of the Total Assets of the Group9	Value of investments at the year-end: 0% of total asset value	Value of investments at the year-end: 0% of total asset value	Value of investments at the year-end: 0% of total asset value

5 £1 in November 2010.

6 Dividends not assumed to be re-invested.

7 Increase from 25% approved by shareholders at AGM in May 2016.

8 As noted above, approximately 37% (NPV basis) of the income received by the SPV over the concession for the Connecticut Service Stations P3 project is dependent upon consumer demand, relating to fuel and retail sales. Under JLIF's investment criteria, this project is therefore categorised as demand-based.

9 This was the subject of a resolution approved by shareholders in February 2014.

RISK COMMITTEE REPORT

Risk is uncertainty of outcome and represents either a threat to or an opportunity for a business's success - its business model, reputation or financial standing. Risk is therefore closely monitored by the Company, and risk management is embedded in its culture and that of its advisers. While is it is not possible to entirely eliminate all risk, it is possible to manage risk through a process of identification, review and mitigation, either to reduce the likelihood of a risk materialising, or in the event that a risk should materialise, to reduce any adverse impact it may have.

JLIF has a dedicated Risk Committee to leads its risk management activities. While the Investment Adviser manages the risks facing the Company on a day-to-day basis, the Board (managed via the Risk Committee) retains ultimate responsibility.

Risk identification, review and mitigation

Risk management is a continuous process as the risks facing the Company evolve. New risks can emerge and risks previously identified can change either in their probability of occurrence or potential impact. With this in mind, the Company maintains a risk register that is reviewed by the Risk Committee on a quarterly basis. This is designed to identify the principal risks facing the Company, and employs a red-amber-green system, which is based on assessment of the probability and impact of each risk identified. The assessment is made for each risk both pre- and post-mitigation.

Risks classified as Red are considered very likely to occur and to have the potential to significantly impact the Company's business prospects in the event of occurrence. Risks classified as Amber are considered to have a medium likelihood of occurrence, with a medium potential impact should they materialise. Risks classified as Green have a low likelihood of occurrence, and a low potential impact should they materialise.

The system described above is designed to help JLIF prioritise and focus its risk mitigation strategies and controls.

JLIF's risk register covers six main areas of risk:

1. Economic;

2. Political;

3. Operational;

4. Financial;

5. Taxation; and

6. Compliance and Legal.

	Risk	Pre- Mitigation Risk Rating	Post- Mitigation Risk Rating10	Reputational Risk Rating
Economic	Exchange rates	Red	Green	Green
	Interest and deposit rates	Red	Green	Green
	Equity market sentiment	Red	Green	Amber
Political	Pressures on contract terms and/or early termination	Red	Red	Red
	Change in political environment affecting PPP projects	Red	Amber	Amber
	UK European Union membership	Red	Red	Green
Operational	Competition for assets	Red	Amber	Amber
	Counterparty and demand risk	Red	Green	Red
	Supply chain	Red	Amber	Amber
	Asset availability	Red	Red	Amber
	Lifecycle risk	Amber	Green	Green
	Performance of the Investment Adviser	Amber	Amber	Red

	Cyber risk	Green	Green	Red
Financial	Portfolio valuation	Red	Green	Amber
	Refinancing risk	Red	Amber	Green
Taxation	Changes to tax legislation and rates	Red	Amber	Amber
Compliance and Legal	Regulatory compliance and change	Green	Green	Red
	Contractual Risk	Amber	Green	Green

10 Mitigating actions are described in further detail in the text that follows.

Risk	Description	Pre- Mitigation Rating	Mitigation	Post- Mitigation Rating	Reputational Risk
Economic
Exchange rates	As at 31 December 2016, JLIF held eight investments denominated in currencies other than Sterling. The currencies covered are Euro, Canadian Dollar and US Dollar. Together these eight investments comprised 32.4% of the Portfolio Value. There is a risk that fluctuations in exchange rates may reduce the Sterling-value of the cash flows received from the investments, adversely affecting the valuation of such projects and JLIF's dividend cash cover.	Red	While JLIF's stated policy since launch in November 2010 has been not to hedge the balance sheet value of its non-Sterling assets, JLIF does make prudent use of foreign exchange hedging instruments to hedge non-Sterling cash flows, typically looking out up to 18 months. JLIF's investment policy requires at least 50% of the Portfolio to be UK- based at any time. JLIF can draw on its revolving credit facility in the local currency and repay borrowings in the same currency from its portfolio of assets denominated in the same currency, thereby creating a natural hedge.	Green	Green
Interest and deposit rates	JLIF has exposure to interest rate risk through its own cash deposits, the interest payments on debt at the	Red	JLIF's own long term cash deposits are generally minimal (given its approach to raising new capital).	Green	Green

	underlying projects, borrowings on its revolving credit facility and on cash deposits at the project SPVs in which JLIF is a shareholder.		The senior debt at the underlying projects is typically hedged using interest rate swaps. JLIF has no long term gearing and the periods in which the revolving credit facility is drawn are typically short. Sensitivities to changes in deposit rates are included in the Investment Adviser Report.
Equity market sentiment	There is a risk that, due to disruption to equity markets, the Company is unable to raise new capital and therefore be able to repay any debt drawn on its revolving credit facility (used to finance new acquisitions).	Red	The Investment Adviser and JLIF's Corporate Broker monitor market sentiment and will not recommend drawing significantly on JLIF's revolving credit facility if it is considered likely that subsequent capital raising would be problematic. Furthermore, if JLIF was unable to raise new capital, outstanding borrowings could ultimately be repaid using distributions from JLIF's Portfolio or by disposals of projects.	Green	Amber
Political
Pressures on contract terms and/or early termination	There is a risk that political and financial pressure could result in certain public- sector counterparties seeking to use contractual provisions to extract a financial benefit or	Red	JLIF and the Investment Adviser engage regularly with HM Treasury and other governmental PPP units in order to remain aware of policy developments and to represent the interests of the	Red	Red

voluntarily to terminate a project.

Company.

In the event of voluntary termination, equity investors benefit from compensation provisions that, in the majority of cases, ensures that market value is received.

The Company is a signatory of the Code of Conduct for Operational PFI/PPP contracts in the UK, which sets out the basis on which public and private sector partners agree to work together to make savings in operational PPP contracts.

Change in political environment affecting PPP projects

Concession based PPP projects form the core of JLIF's investment focus. A shift in political policy away from the PPP model could compromise JLIF's ability to access new projects and impact the way it engages with public-sectors clients.

Red

JLIF closely monitors the political environment in countries in which it invests (or is considering investing) to gauge political support for PPP.

Amber

European Union membership

In June 2016, the UK voted in favour of leaving the EU. As a result of this outcome, there is likely to be a prolonged period of market uncertainty, which may see greater volatility in macroeconomic indicators.

Red

The mitigation measures for the risks associated with this event are those described above in respect of interest and deposit rates and with respect to inflation rate risk are as follows. Before making any investment, JLIF undertakes sensitivity analysis

Red

Green

to establish the correlation of such investment to inflation and takes this into consideration in its investment decision and valuation. JLIF discloses to shareholders bi- annually the sensitivity of the Portfolio to inflation, thereby affording the ability to anticipate the likely effect of changes in inflation. JLIF takes a long term view of inflation, both in valuing its current Portfolio and in valuing potential new investments.

Where possible, inflation assumptions are benchmarked to independent sources.

Competition for assets

There is an over- supply of capital seeking investment in PPP infrastructure projects and an under-supply of projects to which to deploy that capital, particularly in the UK. This has the effect of increasing asset pricing. There is a risk that JLIF over- pays for an asset or that JLIF's ability to continue to grow its Portfolio is restricted.

Red

JLIF benefits from an experienced Investment Adviser with significant knowledge of the infrastructure market and appoints a team of external advisers to undertake due diligence on assets prior to investment in order to establish a fair market valuation.

The Investment Adviser seeks to establish bi-lateral investment opportunities by developing long term relationships with potential vendors and co- shareholders in order to avoid

Red

Amber

competitive auction processes.

JLIF also benefits from two First Offer Agreements with John Laing Group plc giving it the right of first offer over a significant portfolio of infrastructure projects.

JLIF's investment policy provides it with scope to invest up to 50% of the Portfolio by value in projects located outside of the UK. This gives it the ability to operate in markets that are not characterised by the same degree of competition as the UK, where better value is more readily achievable. The Investment Adviser maintains a global view with respect to originating new investment opportunities.

Operational

Counterparty and demand risk

There is a risk that one of JLIF's clients has financial difficulties and is unable to meet its payment obligations as they fall due under a PPP agreement, thereby adversely affecting the project cash flows.

In respect of JLIF's investment in the Connecticut Service Stations project, where some of the revenue is related

Red

With a Portfolio of 62 assets, JLIF's exposure to any single counterparty is considered low, with the impact

of any single counterparty failing being reduced.

JLIF's investment policy dictates that JLIF invests only in jurisdictions where public-sector or government-backed obligations carry a satisfactory credit rating and where contract structures

Green

Red

to the level of usage, there is risk that, for reasons outside of the control of the project company, this may be less than forecast/assumed at the time of investment.

and their enforceability are reliable.

Prior to making an investment in a project with demand risk, JLIF undertakes detailed review of the key factors that drive demand. JLIF procures the advice of third party experts and believes that its assumptions in respect of future demand are prudent.

JLIF's Investment Policy limits the percentage of Total Assets invested in projects with revenues exposed to demand risk to no more than 15%.

Supply chain

The project companies in which JLIF invests have agreements with sub- contractors to provide facilities management and SPV management services. There is a risk of poor performance by such sub- contractors that could adversely affect the project cash flows.

There is a risk in the event of having to replace a sub-contractor that a replacement sub-contractor may only be found at a higher cost, which may not be recoverable.

Red

JLIF's Portfolio provides good diversification, reducing the reliance on any single sub- contractor, and supply chain diversification is considered on a frequent basis by the Company and prior to any new investment.

In the event of poor performance by a sub-contractor, the agreements include provisions allowing the SPVs in which JLIF invests to pass-down performance penalties to sub- contractors and ultimately to terminate and

Amber

replace with another provider. Thresholds are set such that this can be done prior to any performance penalties (i.e. deductions) are incurred by the SPV itself.

Asset availability

The majority of the revenues received by the SPVs in which JLIF invests are dependent on the relevant asset being available for use and meeting certain performance criteria. In the event an asset is deemed either wholly or partially unavailable, deductions can be enforced by the public-sector counterparty, adversely affecting revenues and project cash flows.

Red

Unavailability can be caused by a number of factors but is most likely to be caused by underperformance of a service delivery partner. Through its director representation on each of the SPV boards, JLIF is able to monitor operational performance and to identify and correct any trends early.

Contractual provisions allow performance deductions to be passed-down to the sub-contractor at fault, although such provisions may include caps relating

to sub-contractor liability. As discussed above, ultimately a sub- contractor may be terminated for continued poor performance and replaced.

Red

Amber

Lifecycle risk

During the life of a project, there are a number of items that may need replacing (e.g. elevators, air conditioning equipment, flooring etc.).

There is a risk that

Amber

While in some projects this risk is passed-down in full to sub-contractors, on other projects this risk is retained by equity shareholders. As part of JLIF's due diligence process, it

Green

the actual cost of replacement is greater than the forecast cost or the actual timing of replacement is sooner than forecast.

appoints experienced technical advisers to opine on the adequacy of the lifecycle cost profile within the financial model (used to derive JLIF's valuation of the asset).

Benchmarking is also undertaken against other similar projects within JLIF's Portfolio to verify further the adequacy of the lifecycle cost profile.

Performance of the investment adviser

The success of the Company depends to a large degree on the skill and ability of the Investment Adviser to identify, acquire and manage JLIF's investments.

Unlike some of the Company's peers, the Investment Adviser is owned by a corporate group, John Laing Group plc, and accordingly, John Laing (not the Investment Adviser team) have ultimate responsibility for setting the Investment Adviser's strategy and remuneration structures for the team as well as being the beneficiary of the profits of the Investment Adviser. A performance deterioration by

Amber

The Investment Adviser has a strong record of accomplishment of investing and managing infrastructure projects. JLCM, being a wholly- owned subsidiary of John Laing Group plc, has access to the depth of resource provided by its parent company, as well as robust policies, procedures, compliance systems and risk controls. John Laing Group plc has significant personnel to draw from to provide the services under the Investment Advisory Agreement.

Ultimately, in the event of ongoing underperformance by the Investment Adviser, JLIF has the ability to serve notice and to

Amber

Red

	the Investment Adviser, which may be as a result of lack of resource or loss of experienced personnel, would have a material impact on the Company's performance.		replace JLCM as Investment Adviser.
Cyber risk	There exists an increasing threat of cyber-attack in which a hacker or computer virus may attempt to access the IT systems of the Group, the Investment Adviser or one of the SPVs, and attempt to destroy or use this data for malicious purposes. While JLIF considers it unlikely to be the deliberate target of a cyber-attack, there is a possibility that it could be targeted as part of a random or general act.	Green	JLIF, the Investment Adviser and the SPVs' IT providers have procedures in place to mitigate cyber- attacks and business continuity plans. Data is separately stored on multiple servers, which is backed-up regularly. IT controls are regularly reviewed, including by external specialist IT companies, to ensure they remain robust and provide a sufficient level of protection.	Green	Red
Financial
Portfolio valuation	The principal component of the investments of the Company is its Portfolio of PPP assets. JLCM is responsible for preparing a fair market value of the Portfolio, which is presented to and approved by the Board. There is a risk that the valuation is not a fair reflection of the market valuation (i.e. the	Red	An independent verification exercise of the methodology and assumptions applied by JLCM is performed by a leading accountancy firm and an opinion provided to the Board. Additionally, the methodology and assumptions are subjected to significant external audit scrutiny and challenge.	Green	Amber

Portfolio is over- or under-valued).

This risk is a function of the financial models, both at the Group and underlying project level, on which the valuation is based, which may contain incorrect assumptions, and programming, logic or formulaic errors, thereby resulting

in inaccurate outputs.

The financial models are generally subject to audit by external accountancy firms, which is designed to identify and remove errors. As a control, JLCM also reviews the actual performance of investments against past projected performance, with significant deviations indicating a requirement to review a model for inaccuracies or errors.

Refinancing risk

The majority of projects in JLIF's Portfolio have in place long term debt broadly matching the duration of the concessions.

However, the Connecticut Service Stations project has senior debt maturing in 2023.

In addition, while the two Barcelona Metro Stations projects have long term debt in place, both include terms which require the use of equity distributions to pay down debt. There is a risk that refinancings cannot be achieved at forecast rates and costs, or at all, adversely affecting the distributions received by JLIF and hence the valuation of such projects.

Red

JLIF takes advice from the Investment Adviser (that has good knowledge of project finance and the debt markets) and from independent experts familiar with the relevant debt markets and is confident in the prudence of its forecast assumptions where this risk exists.

However, certain macroeconomic conditions are outside of the control of the Company. Projects with this risk are therefore valued at a higher discount rate to compensate for the additional degree of risk retained by equity.

Amber

Green

Taxation
Changes to tax legislation and rates	There is a risk that changes to the tax rules or rates (e.g. BEPS, cross- border tax treatment etc.) across the jurisdictions in which JLIF invests could result in JLIF, or the SPVs in which JLIF invests, having to pay more tax, adversely affecting either the distributions received from the Portfolio or distributions paid to shareholders in JLIF.	Red	JLIF works closely with expert tax advisers and adopts what it believes to be a conservative position with regard to tax planning. That said, other than participating in industry consultation process, there is little within the power of the Company that it is able to do to mitigate changes in corporation tax rates and tax legislation. The diversification across jurisdiction offered by JLIF's Portfolio provides an inherent degree of mitigation against this risk. With respect specifically to the OECD's Base Erosion Profit Shifting initiative, the Company continues to monitor and participate in consultation processes with HMRC, and seeks advice from independent tax experts as to the ramifications for JLIF. The final legislation is due to be enacted from April 2017.	Amber	Amber
Compliance and Legal
Regulatory compliance and change	JLIF is required to comply with certain UK Listing Rules applicable to 'Premium listings' as well as	Green	JLIF and the Investment Adviser monitor regulatory developments and seek independent professional advice	Green	Red

rules relating to the Guernsey Financial Services Commission.

There is a risk that failure to comply with any

of the relevant rules could result in a negative reputational or financial impact.

in order to manage compliance with changing regulatory requirements.

Where appropriate, JLCM participates in consultation processes to ensure that the views of the Company are heard by the legislature.

Contract risk

The projects in which JLIF invests rely on complex contractual arrangements in order to operate as intended. There is a risk that such contracts do not operate as intended, are incomplete, contain unanticipated liabilities, are subject to interpretation contrary to JLIF's expectations, or otherwise fail to provide the protection anticipated.

There is a risk that due diligence does not reveal all the facts and circumstances of a particular project, resulting in over- paying for an investment.

Amber

Such contracts have been entered into usually only after lengthy negotiations and with the benefit of external legal advice. JLIF engages legal advisers when undertaking due diligence on potential investments to understand the risks retained by the SPV.

JLIF seeks to mitigate the risk of over-paying by undertaking a structured due diligence process, with the support of independent expert advisers with strong market knowledge, and often with familiarity of the specific project itself.

Green

Long Term Viability Statement

The Directors have assessed the viability of the Company over the three-year period to December 2019, taking account of the Company's current position and the potential impact of the principal risks documented in the Risk Committee report. Based on this robust assessment, 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 period to December 2019.

In making this statement, the Directors have considered and challenged the reports of the Investment Adviser in relation to the resilience of

the Company, taking account of its current position, the principal risks facing it in severe but possible scenarios, the effectiveness of any mitigating actions and the Company's risk appetite. Where possible, sensitivity analysis has been undertaken to consider the potential impacts of such risks on the business model, future performance, solvency and liquidity over the period. The sensitivity analysis undertaken considered the impact of a significant proportion of the Portfolio not yielding, which is a plausible consequence of a number of the principal risks should they materialise, either in isolation or in parallel.

The sensitivity analysis was premised on a number of assumptions, including that the Company's revolving credit facility remains in place and is available to provide short term finance for future acquisitions undertaken in the period, that there will be sufficient liquidity within the market to raise new capital as and when required, that the Investment Adviser continues on the same terms as those existing and that there is no annual uplift in dividends paid to shareholders.

The Directors have determined that a three-year look forward to December 2019 is an appropriate period over which to provide its viability statement. This is consistent with the outlook period used in economic and other medium term forecasts regularly prepared for the Board by the Investment Adviser and is the outlook period generally used by the Board in its consideration of any new strategies. These reviews consider both the market opportunity and the associated risks, principally the ability to raise third party funds and invest capital.

The Directors' view on the going concern status of the Company can be found in the Report of the Directors.

BOARD OF DIRECTORS

All members of the JLIF Board have been in post since the Company was incorporated in August 2010, with the exception of Helen Green who was appointed in April 2014.

Paul Lester CBE, Chairman

Paul Lester, a resident of the United Kingdom, is currently non-executive Chairman of Greenergy International Ltd and Knight Square Holdings Ltd.

In April 2016 he was appointed non-executive Chairman of Essentra Plc and also Forterra Plc. Paul was chief executive of VT Group plc, the support services company, from July 2002 until its acquisition by Babcock International in July 2010.

Mr Lester was group managing director of Balfour Beatty plc, the international engineering, construction and services group, from 1997 to 2002, and chief executive of Graseby plc from 1990 to 1997. Mr Lester has also held senior management positions at Schlumberger and the Dowty Group plc.

Mr Lester is a former president of the Society of Maritime Industries, the BSA and the EEF.

David MacLellan, Deputy Chairman and Senior Independent Director

David MacLellan, a resident of the United Kingdom, is the founder and currently Chairman of RJD Partners, a midmarket private-equity business focussed on the services and leisure sectors.

Previously, Mr MacLellan was an executive director of Aberdeen Asset Managers plc following its acquisition in 2000 of Murray Johnstone where he was latterly Chief Executive having joined the company in 1984. Mr MacLellan has served on the boards of a number of companies and is currently a non-executive director of J&J Denholm Limited. He is a past council member of the British Venture Capital Association and is a member of the Institute of Chartered Accountants of Scotland.

Christopher Spencer

Christopher Spencer, a resident of Guernsey, qualified as a chartered accountant in London in 1975. Following two years in Bermuda, he moved to Guernsey. Mr Spencer, who specialised in audit and fiduciary work, was Managing Partner/Director of Pannell Kerr Forster (Guernsey) Limited from 1990 until his retirement in May 2000. Mr Spencer is a member of the AIC Offshore Committee, a past President of the Guernsey Society of Chartered and Certified Accountants and a past Chairman of the Guernsey Branch of the Institute of Directors. Mr Spencer also sits on the board of Directors of JPEL Private Equity Limited and SQN Asset Finance Income Fund Limited, each of which is listed on the London Stock Exchange, and Summit Germany Limited, which is listed on the London Stock Exchange's Alternative Investment Market.

Talmai Morgan

Talmai Morgan, a resident of Guernsey, qualified as a barrister in 1976. He holds a MA in Economics and Law from Cambridge University. He moved

to Guernsey in 1988 where he worked for Barings and then for the Bank of Bermuda. From 1999 to 2004, he was Director of Fiduciary Services and Enforcement at the Guernsey Financial Services Commission (Guernsey's financial regulatory agency) where he was responsible for the design and subsequent implementation of Guernsey's law relating to the regulation of fiduciaries, administration businesses and company directors. He was also particularly involved in the activities of the Financial Action Task Force and the Offshore Group of Banking Supervisors.

For the last ten years, Mr Morgan has been the non-executive chairman or a non-executive director of a number of publicly listed investment companies. He is presently Chairman of NB Private Equity Partners Limited, Sherborne Investors (Guernsey) B Limited and Global Fixed Income Realisation Limited. He also sits on the board of BH Global Limited.

Guido Van Berkel

Guido Van Berkel, a resident of Luxembourg, started his career in the financial industry more than 40 years ago and has held various senior positions with Bank Sarasin, Rabobank, Robeco Group and Citibank. Over the course of his career, he has worked in The Netherlands, Jersey, Switzerland, Luxembourg and Scandinavia.

From 2001 until 2007 Mr Van Berkel was active on the Executive Board of Bank Sarasin in Switzerland and as such he acted as chairman of various Sarasin entities across Europe and Asia. Currently Mr Van Berkel is an independent director in a number of Luxembourg, British, Channel Islands and Dutch investment fund ranges and from the beginning of 2012 until mid-2015 was chairman of BlackRock Luxembourg SA and BlackRock Fund Management S.à.r.l in Luxembourg as well as chairman of Blackrock Fund Netherlands BV.

Helen Green

Helen Green, a resident of Guernsey, has been employed by Saffery Champness, a top 15 firm of chartered accountants since 1984. She qualified

in 1987 and became a partner in the London office in 1997. Since 2000 she has been based in the Guernsey office where she is client liaison director responsible for trust and company administration. Mrs Green is a non-executive director of Acorn Income Fund Limited (of which she has been chairman since 2012), UK Mortgages Limited, Aberdeen Emerging Markets Investment Company Limited and City Natural Resources High Yield Trust Plc all of which are listed on the London Stock Exchange's Main Market and Landore Resources Limited which is listed on the London Stock Exchange's Alternative Investment Market.

GROUP INVESTMENT PORTFOLIO

As at 31 December 2016, JLIF's Portfolio comprised investments in 62 low-risk, infrastructure PPP projects, across seven primary sectors and six countries.

Health	Education	Justice & Emergency Services	Transport	Regeneration & Social Housing	Government Buildings	Street Lighting
Kingston Hospital 60%	Glasgow Schools 20%	Greater Manchester Police Stations 27.08%	E18 Road, Finland 50%	Brockley Social Housing PPP 100%	MoD Main Building, London 26%	Manchester Street Lighting 50%
Forth Valley Royal Hospital, Scotland 100%	South Lanarkshire Schools 15%	Metropolitan Specialist Police Training Centre, Gravesend 27.08%	M40 Motorway (UK) 50%	Bentilee Hub Community Centre 100%	Kromhout Barracks PPP Project, The Netherlands 100%	Walsall Street Lighting 100%
Queen Elizabeth Hospital, Greenwich 27.5%	Edinburgh Schools 20%	North East Fire and Rescue 100%	Sirhowy Way 100%	Camden Social Housing 50%	Groningen Tax Office, The Netherlands 40%	Wakefield Street Lighting 50%
Abbotsford Regional Hospital and Cancer Centre, Canada 100%	North Swindon Schools 100%	Avon and Somerset Courts 40%	M6/M74 Motorway (Scotland) 11%	Islington Social Housing I 45%		Barnet Street Lighting 100%
Vancouver General Hospital, Canada 100%	Highland School, Enfield 100%	Cleveland Police Station and HQ 50%	LUL Connect (CityLink), London 33.5%	Islington Social Housing II 45%		Enfield Street Lighting 100%
Roseberry Park Hospital, Middlesbrough 100%	Newham Schools 100%	South East London Police Stations 50%	Barcelona Metro Stations L9T2 53.5%	Miles Platting Social Housing, Manchester 50%		Lambeth Street Lighting 100%
Tunbridge Wells Hospital 37.5%	Enfield Schools 100%	British Transport Police, London 100%	Barcelona Metro Stations L9T4 13.5%	Canning Town Social Housing 100%		Redcar and Cleveland Street Lighting 100%
Newcastle Hospital 15%	Leeds Combined Secondary Schools 100%		Connecticut Service Stations 100%	Kirklees Social Housing 100%		Surrey Street Lighting 50%
Peterborough Hospital 30%	Bexley Schools 100%		A55 Llandegai to Holyhead DBFO 100%	Oldham Social Housing 95%
Realise Health LIFT (Colchester) 60%	Bristol BSF 37.5%		Intercity Express Programme Phase 1 6%
Northampton Mental Health 100%	Peterborough Schools 100%
North

Staffordshire Hospital 75%

Kelowna and Vernon Hospitals, Canada

50%

North Birmingham Mental Health 100%

INVESTMENT POLICY

The following describes JLIF's investment policy which, as noted below, was changed at the Company's AGM in May 2016 to increase the gearing limit from 25% to 35% of Total Assets. At the AGM in May 2017, JLIF intends to put to shareholders an amendment to the investment policy to expand the geographical limits but keeping with the requirement that over 50% of Total Assets (by value) are

UK-based.

General

JLIF's investment policy is to invest predominantly in the equity and subordinated debt issued with respect to infrastructure projects that are predominantly PPP projects. The Company predominantly invests in projects that have completed construction and that are in their operational phase. Investment capital in projects that are under construction is limited to 30% of the Total Assets of the Fund (calculated at the time of investment).

JLIF predominantly invests in projects whose revenue streams:

• are public-sector or government-backed; and

• are predominantly availability-based (where payments received by the Project Entities do not generally depend on the level of use of the asset), other projects being "demand-based" (where payments received by the Project Entities depend on the level of use of the project assets). A project is availability-based or demand-based for these purposes if the Investment Adviser deems that 75% or more of payments received by the relevant Project Entity does or does not, as appropriate, generally depend on the level of use of the project asset.

Whilst it is envisaged that further acquisitions will be of operational PPP projects with availability- based revenues, it may be possible that a limited number of projects in construction and/or with demand-based revenue mechanisms may be acquired.

Investment capital in projects whose revenue streams are predominantly demand-based is limited to 15% of the Total Assets of the Fund (calculated at the time of investment). For the purposes of this restriction, the shadow toll mechanisms for the investments in the M40 and M6/M74 motorway projects and the A55 road project are not regarded as carrying demand risk due to their relative insensitivity to traffic movement.

In addition, the Company may invest up to 10% of its Total Assets (calculated at the time of investment) in infrastructure assets that are not government-backed PPP assets but that have substantially the same risk profile and characteristics as PPP assets.

Geographic focus

We believe that attractive opportunities for JLIF to enhance returns for shareholders are likely to arise in areas of the world where PPP is a practiced route for delivering infrastructure investments. The Company may, therefore, make investments in the European Union, other European countries, Canada, the United States of America and the Asia Pacific region.

The Company will seek to mitigate country risk by concentrating on investment opportunities in jurisdictions where JLCM advises that contract structures and their enforceability are reliable, where (to the extent applicable) JLCM advises that public-sector or government-backed obligations carry a satisfactory credit rating and where financial markets are relatively mature. JLIF will ensure that over 50% of the Company's Total Assets, measured by value, will be in respect of projects based in the UK (although this will not require JLIF to dispose of Investment Capital in respect of non-UK projects if this limit is breached as a result of changes in value of the Investment Portfolio).

Single investment limit and diversity of clients and suppliers

When any new acquisition is made, JLIF will ensure that the investment (or, in the event of an acquisition of a portfolio of investments, each investment in the portfolio) acquired does not have an acquisition value (or, if it is an additional stake in an existing investment, the combined value of both the existing stake and the additional stake acquired is not) greater than 25% of JLIF's Total Assets at the time of investment. In selecting new investments to acquire, JLIF will seek to ensure that its Portfolio comprises a range of public-sector clients and supply chain contractors, in order to avoid over-reliance on any single client or contractor.

Gearing

JLIF intends to make prudent use of leverage held in JLIF Limited Partnership for financing acquisitions of investments and working capital purposes. Under the company articles, and in accordance with JLIF's Investment Policy, JLIF's outstanding borrowings, excluding intra-group borrowings and the debts of underlying Project Entities, but including any financial guarantees to support subscription obligations, will be limited to 35% of JLIF's Total Assets11. JLIF may borrow in currencies other than Sterling as part of its currency hedging strategy.

Origination of investments

All of the investments in the Portfolio have similar characteristics to those set out above and further investment opportunities will only be pursued if they also satisfy these criteria.

It is expected that further investments will include investments that have been originated and developed by members of John Laing Group and may be acquired from them. JLIF has established procedures to deal with any potential conflicts of interest that may arise in relation to any acquisition of assets from John Laing Group. These procedures include:

• complete segregation of JLCM, acting on behalf of JLIF, and the John Laing "sell side" team;

• a requirement to conduct asset due diligence through third party suppliers acting for JLIF, and for an opinion from an independent expert on the Fair Market Value of the Investment Capital to be obtained; and

• a requirement for JLIF board approval prior to submitting an offer to John Laing and prior to execution of the Sale and Purchase Agreement.

JLIF will seek to acquire further investments going forward both from John Laing and from the wider market. In selecting the assets to acquire, JLCM will ensure that these projects have similar characteristics to the projects in the current Portfolio and meet JLIF's investment criteria.

Any proposed acquisition of assets by JLIF from the John Laing Group that fall within the overall investment parameters set by JLIF, including in relation to funding, will be subject to approval by the Directors, who are independent of John Laing.

The relationship between JLIF and John Laing is governed by the Rules, as defined in the Prospectus. These require that any arrangements between a Relevant Person (as defined in the Rules) and JLIF are at least as favourable to JLIF as would be any comparable arrangement effected on normal commercial terms negotiated at arms' length between the Relevant Person and an independent party.

JLIF has a contractual right of first offer (in accordance with the Amended Existing FOA and the New FOA) for relevant Investment Capital in UK, European and Canadian accommodation and roads and certain rail projects of which the John Laing Group wishes to dispose and that are consistent with our Investment Policy. It is envisaged that the John Laing Group will periodically make available for sale further portfolios of Investment Capital in infrastructure projects (although there is no guarantee that this will be the case). Subject to due diligence and agreement on price and transaction documentation, JLIF will seek to acquire those projects that fit its Investment Policy.

JLIF will also seek out and review acquisition opportunities from outside the John Laing Group that arise and will, where appropriate, carry out the necessary due diligence. If, in the opinion of JLCM, as Operator of JLIF Limited Partnership (the Partnership), the risk characteristics, valuation and price of the Investment Capital in the project or portfolio of projects for sale is acceptable and is consistent with our Investment Policy, then (subject to JLIF having funds) an offer will be made (without seeking the prior approval of the Board) and, if successful, the Investment Capital in the relevant project or portfolio of projects will be acquired by JLIF, following approval by the Board.

Potential disposals of investments

Whilst the Directors may elect to retain Investment Capital in the Portfolio and any other further investments made by JLIF over the long term, JLCM will regularly monitor the valuations of such projects and any secondary market opportunities to dispose of Investment Capital and report to the Directors accordingly. The Directors only intend to dispose of Investments where (upon the advice of JLCM) they consider that it would be in the best interest of shareholders. Proceeds from the disposal of investments may be reinvested or distributed at the discretion of the Directors.

Currency and hedging policy

A portion of JLIF's underlying investments may be denominated in currencies other than Sterling. For example, currently some of the Portfolio is denominated in Canadian Dollars, US Dollars and Euros. However, any dividends or distributions in respect of the Ordinary Shares will be made in Sterling and the market prices and Net Asset Value of the Ordinary Shares will be reported in Sterling. Currency hedging will only be carried out to seek to provide protection to the level of Sterling dividends and other distributions that JLIF aims to pay on the Ordinary Shares, and in order to reduce the risk of currency fluctuations and the volatility of returns that may result from such currency exposure. This may involve the use of foreign currency borrowings to finance foreign currency assets, or forward foreign exchange contracts for up to three years to hedge the income from assets that are exposed to exchange rate risk against Sterling.

Interest rate hedging may also be carried out to seek to provide protection against increasing costs of servicing any debt drawn down by the Company to finance investments. This may involve the use of interest rate derivatives and similar derivative instruments.

Currency and interest rate hedging transactions will only be undertaken for the purpose of efficient Portfolio management and these transactions will not be undertaken for speculative purposes.

Amendments to and compliance with the Investment Policy

Material changes to JLIF's Investment Policy may only be made in accordance with the approval of the shareholders by way of ordinary resolution and (for so long as the Ordinary Shares are listed on the official list) in accordance with the UKLA Listing Rules.

The investment restrictions detailed above apply at the time of the acquisition of Investment Capital. In the ordinary course of business, JLIF will not be required to dispose of Investment

Capital and to rebalance its investment Portfolio as a result of a change in the respective valuations of Investment Capital. Minor changes to the Investment Policy must be approved by the JLIF Board, taking into account advice from the Investment Adviser where appropriate.

11 Increased from 25% following shareholder approval at the Company's AGM in May 2016.

THE INVESTMENT ADVISER

JLIF is advised by John Laing Capital Management ("JLCM"), a specialist infrastructure manager, which is able to draw upon a wealth of experience in infrastructure investments, management and development.

Andrew Charlesworth

Andrew Charlesworth is a Director of JLCM and JLCM's Investment Adviser to JLIF, responsible for delivering the JLIF's performance targets. He has more than 21 years of experience in infrastructure development and finance. He has overseen the growth of JLIF's Portfolio from

£259.0 million at launch to £1,217.6 million. Andrew's broad experience of the PPP market, having acted as advisor to authorities in procuring PPP projects and to senior lenders in funding them, has ensured that the investments JLIF has made have been accretive to shareholder value, delivering above forecast returns.

Prior to his current role, Andrew led significant parts of the primary investment business within John Laing Group plc, initially as CEO of Regenter (a John Laing social housing PPP joint venture), then as Local Authority PPP Director and lastly as the Financial and Commercial Director for the global John Laing Investments business. Andrew holds the CFA UK's Investment Management Certificate (Part 1).

Gianluca Mazzoni

Gianluca Mazzoni is JLCM's Deputy Investment Adviser and Head of Business Development for JLIF, responsible for originating deals globally. He is a Director of JLCM and also sits on the board of the Connecticut Service Stations P3 project, and has more than 19 years' experience working in infrastructure investments.

Prior to joining JLCM, Gianluca worked for Société Générale (then Access Capital Partners) developing significant experience in the origination and execution of global investment opportunities in equity infrastructure. Prior to this Gianluca worked in corporate finance, private equity and M&A across a wide range of sectors including infrastructure as part of The Boston Consulting Group and Bain & Co. He holds an MBA from Bocconi University (Italy) and Columbia Business School (USA) and an M.Sc. in Economics and Finance from Universita Politecnica delle Marche (Italy).

Joanne Griffin

Joanne Griffin is JLCM's Director of Investments for JLIF, responsible for the sourcing, valuation and execution of acquisitions, development of JLIF's business into new PPP markets. Joanne has over 13 years' experience in infrastructure investments and serves as a director at both asset and corporate levels.

Prior to joining JLCM, Joanne led the finance and commercial elements of multiple PPP projects across most sectors of the infrastructure market, both in the UK and internationally. Previously, Joanne worked at Carillion, a construction-to-services company, and gained significant experience in financial modelling for bidding and advising consortia on their investments. Joanne is an Associate member of the Chartered Institute of Securities and Investment.

Jamie Pritchard

Jamie Pritchard is JLCM's Director of Asset Management for JLIF. His primary focus is valuation of the JLIF Portfolio, ensuring forecast returns from JLIF's investments are delivered and on identification and management of value enhancements. In his role, Jamie also serves as a director on the board of a number of the project companies in which JLIF is a shareholder. With over 16 years' experience in infrastructure investment gained across both the primary and secondary markets, Jamie's extensive portfolio management experience helps deliver value enhancements that underpin underlying growth. Jamie also provides support to JLIF's bidding activities with specific focus on valuation, identifying value enhancements and

portfolio structuring.

Prior to joining JLCM, Jamie worked at Serco plc leading the commercial and financial structuring of bids, prior to which he worked at Balfour Beatty Investments for 10 years. He is a member of the Institute of Chartered Accountants in England and Wales.

Matthew McLintock

Matthew is JLCM's Senior Analyst for JLIF, responsible for fund and portfolio analysis and reporting to shareholders and to the JLIF Board. Matthew also plays a key role in both reviewing and executing new investments, capital raising and portfolio valuations. Matthew serves as a director on the board of three of the project companies in which JLIF is a shareholder and acts as shadow director on the Intercity Express Programme Phase 1 project. Matthew has over eight years' experience in infrastructure, both in an advisory and investor capacity.

Prior to joining JLCM, Matthew worked for URS Corporation (now AECOM) as part of their Infrastructure Economics and Strategy team, advising lenders and sponsors in respect of commercial and technical risk. Matthew is a Chartered Member of the Institute for Securities and Investment.

1. ABOUT THE INVESTMENT ADVISER

John Laing Capital Management Limited ("JLCM"), a wholly owned subsidiary of John Laing, acts as the Investment Adviser to the Company and as the Operator of JLIF Limited Partnership. JLCM was incorporated in England and Wales on 19 May 2004 under the Companies Act 1985 (registered number 5132286) and has been authorised and regulated in the UK by the Financial Services Authority (now the Financial Conduct Authority) since December 2004. JLCM has the ability to call on and utilise the substantial experience of the John Laing Group in the management of the Fund.

2. INVESTMENT PERFORMANCE

2.1 Share Price Performance

During 2016 JLIF's share price climbed from 116.7p at the start of the year to 129.7p at its close. 6.82p per share of dividends were paid during the year and therefore JLIF delivered a share price total return to shareholders of 17.5% for the year (with dividends re-invested).. Whilst JLIF is not managed with regard to any benchmark, the share price of JLIF, with its government-backed

and partially inflation-linked revenues should, arguably, broadly track the capital performance of a basket of Gilts (the "Gilt Basket"). JLIF's share price over the year as a whole broadly tracked the Gilt Basket's capital performance. The share price went ex-dividend 3.41p on each of 3 March and 22 September.

Overall JLIF's share price remained relatively stable, trading throughout the period at a premium to NAV and growing its dividend versus 2015. JLIF, along with the Gilt Basket, experienced strong performance in the aftermath of the UK Referendum on EU membership, especially following the Bank of England's stimulus measures announced in early August 2016. This was reversed through the autumn with the decline in the capital values of the Gilt Basket partly linked to the election of Donald Trump as the next President of the US, promising tax cuts and a large programme of infrastructure spending. The premium to NAV at which the Company's shares traded over 2016 reflects both the historical performance of the Fund and general market appetite for income and infrastructure stocks such as JLIF. From launch in November 2010 to the end of December 2016, JLIF has delivered total shareholder returns of 76.5%, and an annualised return of 9.8% (simple basis, dividends re-invested).

2.2 Ongoing Charges

Ongoing charges is a measure of the efficiency of managing a fund and takes account of day-to-day management costs. It is expressed in terms of percentage impact on shareholder returns, assuming that markets remain static and that the Portfolio is not traded.

JLIF's ongoing charges ratio has been calculated in accordance with the Association of Investment Companies ("AIC") recommended methodology12. Calculated on a profit and loss basis, JLIF's ongoing charges ratio for 2016 was 1.25% while for 2015 it was 1.24%.

The AIC's recommended methodology does not include acquisition fees in the calculation of the ongoing charges ratio. JLCM earns acquisition fees on acquisitions not deriving from JLIF's First Offer Agreements with John Laing Group. In accordance with the AIC's recommended disclosure we have presented below the impact of these acquisition fees.

Ongoing Charges	2016 (£m)	2016 (£m)
Investment Adviser fee	10.9	9.6
Group audit fees	0.3	0.3
Directors' fees and expenses	0.3	0.3
Other ongoing expenses	0.9	0.8
Total expenses	12.5	11.0
Average NAV	1,002.0	884.8
Ongoing charges ratio (using AIC recommended methodology)	1.25%	1.24%
Acquisition fees	0.2	0.0
Ongoing charges including acquisitions fees	1.40%	1.24%

12For further details see http://www.theaic.co.uk/sites/default/files/hidden- files/AICOngoingChargesCalculationMay12.pdf

3. VALUATION

3.1. Valuation of the Company

The Company accounts for its interest in its wholly owned subsidiary JLIF Luxco 1 S.à.r.l. as an investment at fair value through profit or loss. The fair value of the Company's investment in JLIF Luxco 1 S.à.r.l. comprises the fair value of JLIF Luxco 1 S.à.r.l., all the intermediate holding companies and the Portfolio of PPP investments.

The fair value of JLIF Luxco 1 S.à.r.l. and all the intermediate holding companies is equivalent to their net book value. The investment at fair value through profit and loss of the Company as at 31 December 2016 was £1,078.2 million (31 December 2015:

£883.1 million).

The fair value of the intermediate holding companies is principally comprised of cash, debt drawn on the Company's revolving credit facility and working capital balances, while the principal component of the investments of the Company are its Portfolio of 62 PPP assets. Further details of the value of this Portfolio follow below.

3.2. Portfolio Value

JLCM is responsible for undertaking a fair market valuation of the JLIF Portfolio (of 62 PPP assets as at 31 December 2016), which is presented to the Board. To provide additional assurance to both the Board and to JLIF's investors, the valuation is independently verified by a leading accountancy firm who provide a valuation opinion to the Directors. Subsequently, the Board approves the valuation of the Portfolio for the year ended 31 December 2016.

The valuation methodology is based on discounting forecast future cash flows from the underlying assets in the Portfolio. This is consistent with the methodology used to the value the Portfolio since launch in November 2010.

JLIF's Portfolio value increased over the 12 months to 31 December 2015 from £867.8 million to £1,217.6 million. A breakdown of the movements in Portfolio value is provided in the table below, as well as a comparative table for 2015.

	£'000s	% growth
Opening value at 31 December 2015	867,830
Investments	306,042
Disposals	(43,380)
Cash received from investments	(93,208)
Discount rate movements	43,396
Exchange rate movements	44,919
Opening value rebased at 31 December 2015	1,125,599
Growth from discount rate unwind	79,209	7.04
Growth from value enhancements	12,839	1.14
Value at 31 December 2016	1,217,647

	£'000s	% growth
Opening value at 31 December 2014	864,887
Investments	14,363
Disposals	-
Cash received from investments	(73,261)
Discount rate movements	7,462
Exchange rate movements	(12,435)
Opening value rebased at 31 December 2014	801,016
Growth from discount rate unwind	65,064	8.12
Growth from value enhancements	1,750	0.22
Value at 31 December 2015	867,830

After adjusting for investments of £306.0 million, disposals of £43.4 million, cash received from investments of £93.2 million, changes to discount rates of £43.4 million and positive unrealised exchange rate movements of £44.9 million, the rebased valuation as at 31 December 2015 was £1,125.6 million. Therefore, underlying growth in the Portfolio to 31 December 2016 was 8.18%.

The weighted average discount rate ("WADR") for the Portfolio was 7.87% as at 31 December 2016. If all 62 assets comprising the Portfolio as at 31 December 2016 had been held for the full year and all cash distributions from the investments had been received at the beginning of the year, the expected growth in the Portfolio due to the unwind of the discount rate would have been the WADR, i.e. 7.87%. In reality, acquisitions and disposals were made and distributions were received at various times throughout the year (see sections 4.1 for details). After adjusting for the actual timing of acquisitions, disposals and distributions, the expected growth (the "Adjusted DRU") was 7.04%. The underlying growth delivered of 8.18% therefore compares favourably, being 1.14% ahead of the Adjusted DRU. The drivers for this outperformance are discussed further in section 4.5.

3.3 Valuation Assumptions

3.3.1. Discount Rate

The methodology used by JLCM in determining the appropriate discount rate by which to value each asset in the Portfolio is based on historical five-year rolling average gilt rates (of equal duration to the relevant project concessions). These represent a proxy for the 'risk free rate'. Specific premiums are added to these to reflect the individual project risks and to ensure that the resultant rate is reflective of market conditions. This methodology has been consistently applied each year since JLIF launched in 2010.

Since the discount rates used are a key driver of the valuation, they are reviewed by an independent accountancy firm with a long track record in PPP valuation as part of their overall assessment of the Portfolio valuation. An opinion on the appropriateness of the

range of discount rates used is provided to the Directors to give them additional assurance.

The table below shows the range of discount rates used to value the Portfolio versus those used for the 2015 year-end valuation, together with the sensitivity of the Portfolio valuation to movements in discount rates.

Year	2016	2015
Weighted average gilt rate	2.73%	2.89%
Weighted average risk premium	5.14%	4.93%
WADR at 31 December	7.87%	7.82%
Range of asset discount rates	7.02% - 9.00%	7.19% - 8.46%
Number of assets	62	57
Sensitivity of the Portfolio Valuation to movements in the discount rate
+ 1% (8.87% for 2016)	Decreases by 7.9% (£96.7m)	Decreases by 7.5% (£65.1m)
- 1% (6.87% for 2016)	Increases by 9.2% (£111.7m)	Increases by 8.6% (£74.8m)

The increase in WADR from 7.82% (as at 31 December 2015) to 7.87% is a result of investments in certain projects during the year (Connecticut Service Stations, Intercity Express Programme Phase 1 and Barcelona Metro Stations L9T2 and L9T4) at higher discount rates, partially offset by a reduction in discount rates applied to the projects comprising the Portfolio as at the end of December 2015. The table below shows this in more detail. The reduction in the WADR of projects comprising the Portfolio as at 31 December 2015 was a consequence of a reduction in gilt rates over the period.

	2016	2015
WADR of projects comprising Portfolio as at 31/12/15	7.45%	7.82%
WADR of acquisitions during 2016	8.65%	-
WADR at 31 December	7.87%	7.82%

3.3.2. Interest rates

Each of the projects in the Portfolio are funded effectively with fixed-rate financing, either through the use of interest rate swaps or through fixed-rate or index-linked bond finance. Changes to interest rates therefore have little impact on the finance costs of the projects and therefore the returns received by JLIF are largely insulated from this risk.

Long term gilt yields in the UK, Continental Europe and North America continued to decrease over 2016 and remain at historically low levels. There is the potential that these could increase over time. Historically, there appears only limited correlation between movements in gilt rates and discount rates used to value PPP projects. The current Portfolio WADR of 7.87% is significantly higher than the Portfolio weighted average gilt rate, a differential that remains at an historic high since launch.

3.3.3 Cash deposit rates

Each asset in JLIF's Portfolio holds cash deposits (usually six-month terms) in reserve accounts, typically a requirement of the senior debt providers. As a result, investment income from the Portfolio can vary depending on the interest earned on these deposits. The table below shows the deposit rate assumptions used to establish the Portfolio

value as at 31 December 2016. The deposit rate assumptions have been updated based on rates being achieved and the latest market forecasts of future deposit rates.

	2016	2015
UK	2017 - 1.0%	2016 - 1.0%
	2018 - 1.5%	2017 - 2.0%
	2019 - 2.0%	2018 - 3.0%
	Thereafter 2.75%	Thereafter - 3.25%
Continental Europe	2017 - 1.0%	2016 - 1.0%
(incl. Finland, the Netherlands and Spain)	2018 - 1.0%	2017 - 1.5%
	2019 - 1.5%	Thereafter 2.5%
	2020 - 2.0%
	Thereafter 2.5%
North America	2017 - 1.0%	2016 - 1.0%
(incl. Canada & USA)	2018 - 1.5%	2017 - 2.0%
	2019 - 2.0%	Thereafter 3.0%
	Thereafter 2.5%

The impact on the Portfolio valuation to changes in deposit rates is shown in the table below.

Portfolio Value Impact

2016

Portfolio Value Impact

2015

Increase by 1%

Increases by 1.79%

(£21.8m)

Increases by 2.12%

(£18.4m)

Decrease by 1%

Decreases by 1.77%

(£21.5m)

Decreases by 2.11%

(£18.3m)

If actual deposit rates were to vary from those assumed in the valuation of JLIF's Portfolio for only the next few years, as opposed to the entire remaining life of the projects (average life of the Portfolio was 19.8 years at 31 December 2016), the impact on Portfolio valuation would consequently be much reduced.

3.3.4.Foreign Exchange

As at the 31 December 2016 the Portfolio comprised nine assets that have exposure to foreign exchange cash flows, being the Euro, the Canadian Dollar and the US Dollar.

These projects with non-Sterling denominated cash flows comprised 32.4% of the Portfolio valuation (31 December 2015: 12.5%).

JLIF uses the spot rate as at the valuation date to value its Portfolio. The table below illustrates the impact on the Portfolio value (Sterling) resulting from a 10% change in the relevant exchange rates.

Non-Sterling denominated income from JLIF's assets is considered relative to the foreign exchange market to determine whether the potential volatility is material enough to enter into a forward contract to hedge against currency movements.

Scenario

EUR:GBP

at 31 December

2016

CAD:Sterling

at 31 December

2016

USD:GBP

at 31 December

2016

Portfolio

Valuation

at 31 December

2016

Impact

Portfolio value

1.1708

1.6565

1.2329

£1,217.6m

GBP

1.0537

1.4909

1.1096

£1,257.1m

+ £39.5m

depreciates by 10%

((+3.2%)

GBP

appreciates by 10%

1.2879

1.8222

1.3562

£1,181.8m

-£35.9m (-2.9%)

During 2016, JLIF Limited Partnership did not hedge, or hold any hedges, of any of its foreign currency income with forward foreign exchange contracts. As at 31 December 2016, JLIF did not hold any open foreign exchange contracts (31 December 2015: none held). However, as noted, in respect of the income received from JLIF's Euro- denominated projects, for the immediate future at least (while Sterling remains at historically low levels versus the Euro), JLIF has chosen to create a natural hedge by using this income to service and repay the Euro debt.

In line with JLIF's policy since launch, the Balance Sheet value of its non-Sterling denominated assets is not hedged. While in 2016 JLIF's Portfolio benefitted from unrealised positive exchange rate movements of £44.9 million, there is an equal possibility that the value of JLIF's non-Sterling projects may decrease at future valuation dates, should exchange rates move in the opposite direction.

3.3.5 Inflation

Each asset in JLIF's Portfolio receives revenue from its public-sector client that is partially or, in some cases, wholly linked to inflation. The weighted average assumption used for inflation for the Portfolio valuation is 2.52% (31 December 2015: 2.67%).

After taking account of the cost indexation arrangements of the project agreements, cash flows from the Portfolio as a whole are positively correlated to inflation, meaning if inflation increases, then the value of the Portfolio increases and vice versa.

The approximate correlation between Portfolio valuation and inflation is approximately

0.5 (31 December 2015: 0.5); meaning for every one-percentage point increase in inflation above the level assumed in JLIF's Portfolio valuation, returns increase by approximately 0.5%. The correlation is broadly symmetrical and so a fall in inflation would produce a similar but opposite effect.

The most significant long term indexation assumptions used to value the Portfolio at 31 December 2016 are set out below. The assumptions are based on the latest long term market forecasts for each jurisdiction.

Country	Index	2016	2015
Portfolio	Weighted average	2.52%	2.67%
United Kingdom	RPI / RPIx	2.75%	2.75%
Canada	CPI	2.10%	2.10%
The Netherlands	CPI	2.00%	1.90%
Finland	MAKU / Elpsot	3.0% / 2.5%	3.0% / 2.5%
Spain	CPI	2.00%	n/a
USA	CPI	2.00%	n/a

Sensitivity analysis has been performed to demonstrate the impact of movements in inflation on the Portfolio valuation. The results of this analysis is presented below.

Portfolio Value Impact 2016

Portfolio Value Impact 2015

Increase by 1% (i.e. 3.52%)

Increases by 4.31% (£52.5m)

Increases by 3.90%

(£33.8m)

Decrease by 1% (i.e.

Decreases by 3.88% (£47.3m)

Decreases by 3.55%

1.52%)

(£30.8m)

3.3.6 Corporation tax

The taxable profits of each of the project companies in the Portfolio are subject to corporation tax in their respective jurisdictions and, over their lifetimes, each project is likely to pay significant amounts of tax.

The amount of tax to be paid over the remaining life of each project has been estimated and included as a negative item in its valuation. JLIF has made certain assumptions regarding the availability of group relief to reduce the tax payable to HMRC and has included part

of the benefit attributable to this within its Portfolio valuation. This benefit arises from the availability of tax losses within the intermediate holding companies to surrender to profit-making project companies. JLIF believes that its assumptions with respect to group relief rules are prudent. The value of the benefit attributable to group relief is immaterial in the context of the valuation of the Portfolio.

Country	2016	2015
United Kingdom	20%, then 19% from 1 April 2017,	20%, then 19% from April 2017,
	then 17% from 1 April 2020 onwards	then 18% from 1 April 2020 onwards
Canada	26%	26%
The Netherlands	20% - 25%	20% - 25%
Finland	20%	20%
Spain	25%	n/a
USA	35%/9%13	n/a

13 Federal tax rate / Connecticut State tax rate.

The long term rate applied across JLIF's UK portfolio has decreased since last year from 18% to 17% from April 2020 onwards reflecting the provisions of the Finance Bill enacted in September 2016. This resulted in an increase in the Portfolio valuation of approximately £4.4 million. The rates assumed in the valuation of the overseas assets reflect the enacted rates in those jurisdictions and are unchanged from those used to value the Portfolio as at 31 December 2015.

In December 2016, the UK Government published draft legislation in response to the OECD's Base Erosion Profit Sharing ("BEPS") initiative. Having sought advice from independent tax experts, the Company's assessment of the risk presented by the proposals contained within the draft legislation has resulted in no specific adjustment to be made in the valuation of the Portfolio as at 31 December 2016.

3.3.7 Lifecycle

One of the key areas of risk within some of JLIF's projects is major maintenance or lifecycle costs. This is the cost of maintaining or replacing structural installations, building fabric or high value items (e.g. air conditioning, heating units, flooring etc.) that is required to ensure a project continues to meet the contractual specifications. Each of the financial models used to establish the valuation of JLIF's Portfolio contain allowances for lifecycle costs. On some projects, the risk of actual costs varying from budgeted costs is retained by the project company, while on others this risk is passed down to the Hard Facilities Management ("Hard FM") provider.

As at 31 December 2016, of the 62 projects comprising the Portfolio, lifecycle risk is retained by the project company in 31 instances. For the remaining 31 projects lifecycle risk is passed down to the Hard FM provider, the cost allowances for which are included in the Hard FM service payments, which are fixed in real terms. The Hard FM

provider takes the full risk of these payments being adequate. In five of the 31 projects, JLIF has an upside only sharing mechanism with the Hard FM provider and in a further two cases the lifecycle risk (upside and downside) is shared between the project company and the Hard FM provider.

Impact on 24 assets

where lifecycle risk retained by SPV

Portfolio Value Impact 2015

Increase in forecast lifecycle expenditure by 10%

Decreases by 3.08%

(£17.0m)

Decreases by 1.40%

(£17.0m)

Decrease in forecast lifecycle expenditure by 10%

Increases by 2.88%

(£16.0m)

Increases by 1.31%

(£16.0m)

The sensitivity analysis was performed across a sample of the five largest assets by value in which lifecycle risk is retained by the project company. The analysis therefore covered approximately 60% of all assets by value in which lifecycle risk is held in full at the project company level. The results of the sensitivity were then extrapolated across each of the 24 assets in which lifecycle risk is retained in full by the project company.

4. PORTFOLIO PERFORMANCE

4.1 Investments and Disposals

During the period, JLIF made investments totalling £306.0 million, including interests in seven new projects. Approximately £95.6 million was in UK projects and £210.4 million in overseas projects.

• In January 2016, JLIF acquired a 40% indirect interest in Barcelona Metro Stations L9T2 from Iridium, a wholly-owned subsidiary of Grupo ACS;

• In February 2016, JLIF acquired a 100% interest in the British Transport Police PPP project from a member of John Laing Group plc and The John Laing Pension Trust Limited;

• In May 2016, JLIF acquired a 95% interest in the Oldham Social Housing project from a member of John Laing Group plc;

• In June 2016, JLIF acquired a 100% interest in the Connecticut Service Stations project from The Carlyle Group;

• In July 2016, JLIF acquired an incremental 13.5% interest in the Barcelona Metro Stations L9T2 project and a new 13.5% interest in the Barcelona Metro Stations L9T4 project, both from Acsa, Obras e Infraestructuras, a member of the Sorigué group;

• In December 2016, JLIF acquired a 100% interest in the A55 Holyhead to Llandegai DBFO project from a member of John Laing Group plc; and

• In December 2016, JLIF acquired a 6% indirect interest in the Intercity Express Programme Phase 1 project from a member of John Laing Group plc.

JLIF's investment in the Connecticut Service Stations project saw it acquire a 100% interest in the project company, Project Service LLC, which is the exclusive provider of 23 highway service areas in the State of Connecticut (USA). The project involves the renovation (completed in August 2015), operation and maintenance of 23 highway

service areas under a 35-year concession signed in 2009. Project Service LLC is the exclusive provider of on-highway fuel and food facilities along three distinct corridors between New York and Boston. Long term tenant agreements are in place (15-35 years) with major food and fuel providers, including four key anchor tenants - McDonald's, Dunkin' Donuts, Subway Restaurants and Alliance Energy (Mobil brand).

With respect to the investments made in the two Barcelona Metro Stations projects, it is JLIF's strategy to refinance the senior debt over the next few years. JLIF has included certain assumptions within its valuation of these projects with respect to refinancing. The risks associated with refinancing is discussed in more detail in the Risk Committee report on pages 10 to 15.

Also during the period, JLIF sold its entire interests in the Newham Hospital and Barnsley Building Schoolsfor the Future projects for a combined consideration of £43.4 million, an uplift on the carrying value of the investments as at 31 March 2016 of approximately 36%. These realisation values resulted in an aggregate realised IRR of approximately 16%. Given that the Board considered these offers to be significantly ahead of the value that could be achieved by retaining the interests, the decision was made to sell and to re-deploy the capital more effectively and at better value elsewhere.

4.2 Distributions from investments

During 2016, JLIF continued to receive cash income from its Portfolio, principally in the form of dividends and interest and repayment of principal on shareholder loans. During the 12-month period ended 31 December 2016, these totalled £93.2 million (31 December 2015:£73.3 million). Distributions from the underlying project companies naturally reduce the Portfolio Value since the cash flows have been realised and are no longer included within forecast future income.

4.3 Exchange rate impact

As noted in section 3.3.4, JLIF's policy remains not to hedge the balance sheet value of its non-Sterling denominated assets. As a result, the value of JLIF's overseas assets can vary depending on movements in the Canadian Dollar, Euro and US Dollar exchange rates relative to Sterling. Relative to the opening rates as at 1 January 2016, the Canadian Dollar appreciated by 19.6% from an exchange rate of 2.060 to 1.657 and the Euro appreciated by 13.8% from an exchange rate of 1.359 to 1.171. The investment in the Connecticut Service Stations project made in June 2016 benefitted from a subsequent 10.1% appreciation of the US Dollar against Sterling from a weighted average rate of 1.371 to 1.233. The net impact of these movements was an increase in the Portfolio Value of £44.9 million.

The Portfolio Value is the principal component of the Net Asset Value ("NAV"), NAV being Total Assets (including Portfolio Value) minus the liabilities of the Group. To aid clarity, the table below shows the NAV with and without the impact of exchange rate movements, recognised in 2016 and 2015 respectively.

	As at 31 December 2016	As at 31 December 2015
	Net Asset Value per share	Net Asset Value per share
Including exchange variations	120.2p	108.4p
Excluding exchange variations	115.3p	109.9p

4.4 Rebased valuation

After taking account of acquisitions and disposals in the period, distributions from investments and changes in both discount rates and exchange rates, the rebased valuation as at 31 December 2016 was £1,125.6 million.

4.5 Portfolio growth

The WADR of the Portfolio as at 31 December 2016 was 7.87% (31 December 2015: 7.82%). If all investments were held throughout the entire year, and all cash income from investments received at the beginning of the year this would be the percentage growth forecast due to the natural unwinding of the discount rate. However, certain acquisitions were made during the course of the year and cash income from investments was received at various times throughout the year. Adjusting for this timing, the expected growth (i.e. the "Adjusted DRU") for 2016 was 7.04% or £79.2 million.

JLIF delivered underlying Portfolio growth that was ahead of that expected from the unwind of the Adjusted DRU by £12.8 million or 1.14% in 2016. This was principally the result of the following:

• The disposal of JLIF's interests in the Newham Hospital and Barnsley Building Schools for the Future projects at an uplift to carrying value of c.36%;

• More efficient management of our projects including cost efficiencies identified and delivered both at a Portfolio and individual project level, such as insurance and SPV management costs;

• Prudent management of lifecycle costs where this risk is retained by the SPV;

• Better than forecast traffic performance on UK road projects;

• Reduced margins from the refinancing of senior debt on our Kirklees Social Housing project; and

• The net impact of changes to macroeconomic assumptions, principally being the downside impact of lower than forecast inflation during the year and a reduction in deposit rate assumptions, partially offset by the reduction in UK corporation tax rates to 17% as enacted in the Finance Bill 2016.

As a result of this continued asset focus and active management of the Portfolio, every year since it launched in November 2010, JLIF has delivered underlying Portfolio growth in excess of that expected from the unwind of the Adjusted DRU, as detailed below.

	2011	2012	2013	2014	2015	2016
Underlying portfolio growth	9.22%	8.49%	7.24%	9.22%	8.34%	8.18%
Adjusted unwind of the discount rate	7.62%	7.20%	6.38%	7.81%	8.12%	7.04%
Excluding exchange variations	1.60%	1.29%	0.86%	1.41%	0.22%	1.14%

As at 31 December 2016, the Portfolio comprised investments in 62 projects. As described above, overall the underlying growth in Portfolio Value exceeded that forecast from the Adjusted DRU. However, as with any portfolio there is a degree of variability in the valuation growth exhibited by each individual project, some growing by more than forecast and others by less.

Those projects for which growth exceeded expectations included the M40 Motorway, Kirklees Social Housing and the Connecticut Service Station project. The increases in value largely resulted from value enhancement activities undertaken during the year including major maintenance cost reviews, refinancing of project finance debt and the reduction of operational maintenance costs.

Those projects for which growth was below expectations were mainly in the UK Health sector, where a number of legal disputes have been continuing during 2016, and the Edinburgh Schools project. Performance on the remaining assets in the Portfolio was generally in line with expectations. The paragraphs below describe the status of the projects where major disputes were conducted during 2016.

In 2013 a legal dispute arose between the Newcastle Hospital project company (in which JLIF holds a 15% shareholding) and the public-sector client regarding the completion of phase 8 (the clinical office block) of the project, and other operational aspects of the project. This resulted in court action between the construction contractor, the project company and the public-sector client. During 2016, negotiations took place amongst all parties, which resulted in a settlement agreement being reached in August 2016. The outcome of this agreement is broadly in line with our expectations. All legal agreements relating to the dispute have now been executed and the project is operating within the parameters of the settlement agreement.

In 2015, a legal dispute also arose between the Peterborough Hospital project company (in which JLIF holds a 30% shareholding) and the public-sector client regarding certain alleged construction defects relating to fire compartmentation within the building and other operational aspects of the project. This dispute is ongoing; however, the outcome is not anticipated to have a material impact on the valuation of the Portfolio or its expected investment income.

During 2016, a dispute arose between the Roseberry Park Hospital project company (100% owned by JLIF) and the public-sector client regarding the provision of certain Hard FM services, the operation of the Service Helpdesk at the project as well as certain alleged construction defects. Settlement negotiations between all parties are continuing, the outcome of which is not yet certain.

During 2016, a dispute arose in respect of the Edinburgh Schools project in which JLIF holds a 20% shareholding, following the identification of material construction defects at the Oxgangs Primary School. Consequently, all of the project's 17 schools were closed pending further surveys, in agreement with the City of Edinburgh Council. All the schools re-opened prior to the start of the academic year in August. Commercial discussions between the private sector parties involved in the project continue, and the exact magnitude of the financial impact will not be known until these are concluded.

A provision based on our current view of the most likely outcome of these disputes has been included in the Portfolio Valuation at 31 December 2016, none of which are considered material.

During 2016, John Laing Group plc completed the sale of its Project Management Services activities in the UK to HCP Management Services ("HCP"). As at 31 December 2016 HCP provided management services to 34 of JLIF's UK-based PPP projects.

5. GEARING

JLIF benefits from a £180 million multi-currency revolving credit facility, provided by Royal Bank of Scotland ("RBS"), HSBC Bank plc ("HSBC"), ING Bank NV ("ING") and Commonwealth Bank of Australia ("CBA"). The term of the facility is five years and runs until

August 2020. Attached to the facility is a £150 million accordion facility, which was signed in June 2016. The margin on both facilities is 175bps over LIBOR (with commitment fees of 35bps of the margin).

As at 1 January 2016, JLIF's revolving credit facility was drawn by £17.0 million. This was repaid in early January 2016, using distributions received from the Portfolio at the end of December 2015. In late January 2016, JLIF drew on its revolving credit facility in Sterling to finance the acquisition of a 40% interest in the Barcelona Metro Stations L9T2 project. The facility was repaid in March 2016 using the proceeds of a JLIF shareholder tap issue.

In June 2016, the revolving credit facility was drawn (in Sterling) to part-finance the acquisition of a 100% interest in the Connecticut Service Stations P3 project. In July, the facility was further drawn to finance the acquisition of an incremental 13.5% interest in Barcelona Metro Stations L9T2 and a new 13.5% interest in Barcelona Metro Stations L9T4. On this occasion, the drawing was made in Euros to mitigate the exchange rate risk, providing a natural hedge.

In December 2016, the facility was drawn to part-finance the acquisition of a 100% interest in the A55 Holyhead to Llandegai DBFO road project and to finance the acquisition of a 6% indirect interest in the Intercity Express Programme Phase 1 project. As at 31 December 2016, the revolving credit facility was drawn by £171.4 million, while the accordion facility was undrawn.

6. FINANCIAL RESULTS

The financial statements of JLIF (or "the Company") for the year ended 31 December 2016 are on pages 55 to 86.

The Company prepared the financial statements for the year ended 31 December 2016 in accordance with International Financial Reporting Standards ("IFRS") as published by the EU.

In order to continue providing useful and relevant information to its investors, the financial statements also refer to the "Group" (defined below) which comprises the Company and its intermediate holding companies.

Basis of accounting

The Company applies IFRS 10 and Investment Entities - Amendments to IFRS 10, IFRS 12 and IAS 27. The Company accounts for its interest in its 100% owned immediate subsidiary JLIF Luxco 1 S.à.r.l. as an investment at fair value through profit or loss.

The Company does not consolidate its subsidiaries that provide investment services or its project companies subsidiaries, instead reporting them as investments at fair value. All intermediate holding companies and all the investments in PPP assets are accounted for on the same consistent basis.

The Group comprises the Company, its two wholly owned Luxembourg subsidiaries (JLIF Luxco 1 S.à.r.l. and JLIF Luxco 2 S.à.r.l.), JLIF (GP) Limited (the General Partner), JLIF Limited Partnership (the English Limited Partnership) and 31 (2015: 27) wholly owned subsidiaries of the English Limited Partnership.

The Company's subsidiaries provide services that relate to the Company's investment activities on its behalf, which are incidental to the management of the investment portfolio. These companies are recognised in the financial statements at their fair value, which is equivalent to their Net Assets.

As at 31 December 2016, the Group held investments in 62 (2015: 57) PPP projects which make distributions comprising returns on investments (interest on subordinated loans and dividends on equity) together with repayments of investments (subordinated loan repayments and equity redemptions).

Results for the year ended 31 December 2016

All amounts presented in £000s (except as noted)	Year ended 31 December 2016	Year ended 31 December 2015
Net assets14	1,080,568	883,096
PPP Assets15, 16	1,217,647	867,830
Intermediate Holding companies assets15	(139,472)	15,302
Operating income (including unrealised foreign exchange gains)	175,242	58,359
Net assets per share (pence)	120.2	108.4
Distributions, repayments and fees from PPP investments	93,208	73,261
Profit before tax	160,429	46,966

14 Also referred to as Net Asset Value or "NAV"

15 Classified as investments at fair value through profit or loss on the Balance Sheet

16 Also referred to as Portfolio Value

Key points to note:

• Interim dividend of 3.41 pence per share declared in September 2016 and paid in October 2016.

• 8.18% increase on a rebased Portfolio Value as at 31 December 2016 to £1,217.6 million (2015: 8.34% increase to £867.8 million).

Net assets

The Company's Net Assets increased by £197.5 million from £883.1 million to £1,080.6 million at 31 December 2016. During the year, the movement in Net Assets is driven by the equity raise in March 2016 (generating net proceeds of £91.7 million), the increase in Portfolio Value mainly driven by unrealised positive exchange rate movements (£44.9 million), lower discount rates (£43.4 million), net effect of macroeconomic factors and value enhancement (£12.8 million) and unwind of discount (£79.2 million), offset by operating and financing cost (£19.9 million) and dividend paid to shareholders (£54.6 million). The Net Assets include investments at fair value through profit and loss of £1,078.2 million (of which

£1,217.6 million relates to the PPP investments, offset by £139.4 million of negative fair value of intermediate holding companies), a cash balance of £5.5 million, offset by other net liabilities of £3.1 million.

The intermediate holding companies' negative fair value of £139.4 million comprises of cash balances of £27.2 million, other net assets of £4.7 million, offset by outstanding debt of

£171.4 million drawn on the revolving credit facility.

Analysis of the Group's net assets

£'000s (except as noted)	2016	2015
Portfolio value	1,217,647	867,830
Intermediate holding companies cash	27,228	31,255
Intermediate holding companies credit facility debt	(171,393)	(17,000)
Intermediate holding companies other net assets	4,693	1,047
Fair value of the Company's investment in JLIF Luxco 1 S.à.r.l.	1,078,175	883,132

Company's cash	5,511	2,533
Company's other net liabilities	(3,118)	(2,569)
Net Asset Value	1,080,568	883,096
Number of shares	899,003,264	814,751,471
Net Asset Value per share (pence)	120.2	108.4

At 31 December 2016, the Group (Company plus intermediate holdings companies) had a total cash balance of £32.7 million comprising £5.5 million in the Company's balance sheet (31 December 2015: £2.5 million) and £27.2 million in the intermediate holding companies, which is included in the Company's balance sheet under Investment at fair value though profit or loss (31 December 2015: £31.3 million).

The intermediate holding companies other net liabilities include the outstanding debt of

£171.4 million (31 December 2015: £17.0 million) under the Group's revolving credit facility.

The Portfolio Value is the fair value of the investments in 62 (31 December 2015: 57) PPP projects calculated using the discounted cash flow method.

The movement in the valuation of the Portfolio of PPP assets is summarised as follows:

£'000s
Portfolio value at 31 December 2015	867,830
Acquisitions	306,042
Disposals	(43,380)
Growth from discount rate unwind Growth from value enhancements	79,209 12,839
Underlying growth of the PPP investments	92,048
Positive exchange rate movements	44,919
Discount rate movements	43,396
Subordinated debt and equity repayments	(7,577)
Increase in movement in accrued interest receivable on subordinated loans	2,000
Distributions received from the PPP investments	(87,631)
Portfolio value at 31 December 2016	1,217,647

Further details on the Portfolio Valuation and the movements over the period are provided in Section 3 of this Investment Adviser's Report.

Profit before tax

The Company's profit before tax ("PBT") for the year ended 31 December 2016 is £160.4 million (2015: £47.0 million), generating earnings per share of 18.1p (2015: 5.8p).

In 2016, the operating income was £175.2 million (2015: £58.4 million). This increase reflects the underlying growth of the Portfolio Value of £92.0 million (2015: £66.8 million),the impact of discount rate movements of £43.4 million (2015: £7.4 million) and an unrealised foreign exchange gain of £44.9 million (2015: loss of £12.4 million), offset by the intermediate holding companies' expenses and other net costs of

£5.1 million (2015: £3.4 million).

The operating costs included in the income statement were £14.8 million in the year (2015:

£11.4 million) reflecting higher administrative expenses principally arising from the higher investment advisory fee due to the increased value of the Portfolio and Asset Origination Fee paid on acquisitions not acquired from a member of John Laing Group plc.

Cash flow statement

The Company had a total cash balance at 31 December 2016 of £5.5 million (31 December 2015: £2.5 million). The breakdown of the movements in cash is shown below.

Cash flows of the Company for the year (£ million):

	2016	2015
Cash balance as at 1 January	2.5	4.3
Capital raising	92.9	-
Listing/ share issue cost	(1.2)	(0.1)
Loan to JLIF Luxco 1 S.à.r.l.	(91.6)	-
Interest received from JLIF Luxco 1 S.à.r.l.	71.8	60.9
Directors fee and expenses	(0.4)	(0.3)
Investment Adviser and origination fee	(12.1)	(9.5)
Administrative and other expenses	(1.8)	(1.7)
Dividends paid in cash to shareholders	(54.6)	(51.1)
Cash balance at 31 December	5.5	2.5

The Group had a total cash balance at 31 December 2016 of £32.7 million (31 December 2015: £33.8 million), and borrowings of £171.4 million (31 December 2015: £17.0 million). The breakdown of the movements in cash is shown below.

Cash flows of the Group for the year (£ million):

	2016	2015
Cash balance as at 1 January	33.8	26.5
Capital raising	92.9	-
Listing / share issue costs	(1.2)	(0.1)
Investments in projects	(306.0)	(14.4)
Disposal proceeds	43.4	-
Acquisition costs	(3.8)	(0.1)
Cash received from projects (net of withholding tax)	93.2	73.3
Administrative and other expenses	(15.0)	(13.8)
Proceeds from borrowings	153.3	17.0
Financing costs (net of interest income)	(3.3)	(3.5)
Dividends paid in cash to shareholders	(54.6)	(51.1)
Cash balance at 31 December	32.7	33.8

During the year, the Group received cash of £93.2 million (2015: £73.3 million) from its Portfolio. The cash received from investments in the year more than sufficiently covers the operating and administrative expenses, financing costs as well as the dividends paid to its shareholders. JLCM anticipates future revenues from the Portfolio will continue to be in line with expectations and therefore will continue to fully cover future costs as well as planned dividends payable to shareholders.

The Company has declared a dividend of £31.3 million (3.48 pence per share) for the second half of 2016, which is an increase of 2.0% (against the most recent dividend paid by the Company in October 2016) and is payable on 16 May 2017. JLIF continues to offers a scrip dividend alternative that is the subject of a separate shareholder communication.

7. OUTLOOK

In the UK, while there is increasing optimism that a pipeline of projects may be announced in 2017 (across education, health, justice & emergency, government buildings and transport) under the UK Government's "PF2" programme, it remains to be seen as to whether there is sufficient political support for the delivery of a significant pipeline using private finance.

Overall, the UK market remains competitive with a large proportion of operational assets already in the ownership of long term secondary market investors, and a lack of primary projects over the past few years to replenish the portfolios of primary investors and developers. In 2016, JLIF was invited to bid for a portfolio of six street lighting PPP projects, and made four investments in UK projects (all under the First Offer Agreements with John Laing Group plc), but otherwise, its participation in UK market activity was down compared to previous years. JLIF continues to benefit from the First Offer Agreements, giving it the right of first offer over a pipeline of infrastructure projects valued by John Laing at over £400 million over the next three years.

With many forecasts of a weakening of the Euro against the pound in 2017, the Eurozone may become relatively more attractive for non-Euro investors. The Netherlands has been one of the most active greenfield markets in recent times with four significant projects currently in procurement, including three roads and a lock project. Further new projects are expected to be launched in 2017, also in the transportation sector. While the Iberian markets have seen little in the way of major greenfield PPP developments in recent years, the two markets have been active for secondary market acquisitions and sales of assets. This is expected to continue in 2017. The Italian market has also been relatively active, and has a reasonable pipeline of greenfield projects at various stages of development (from planning to preferred bidder to financing). The pipeline in Italy primarily covers the road and rail sectors. In Norway, the Ministry of Transport has recently tabled a bill for the first project in the country's upcoming availability-based road PPP pipeline, with parliamentary approval expected shortly. However, there remains political disagreement that must be resolved first around the level of public-sector capital contribution before progress can be made.

Relative to the UK market, the Canadian greenfield market continues to remain active with a sectoral focus on health and transportation, including an extensive pipeline of light rail PPP projects. In the US, with a new Administration in place, it is expected that spending on infrastructure will increase significantly, and that private finance will be used to play an important role in this. This could see significant, and long-awaited, opportunities for investors in Public-Private Partnerships. To incentivise private sector investment in infrastructure, the new President's plan will offer tax credits to attract greater investment and reduce project finance costs. The plan will also seek to lower project costs by reducing regulatory 'red tape' and the burdens of federal project delivery requirements. JLIF expects the US to present a significant source of investment opportunities over the coming years.

Both the Australian primary and secondary markets remain active with a number of transactions closing in both in 2016. Similar to other markets, much of the focus here is also on the transport sector, and particularly light rail and metro projects. However, other activity has included prison, student accommodation and road projects. In November 2016, the Australian and New Zealand Governments together launched a combined pipeline of approximately 50 projects, including 32 possible or confirmed PPP projects. In Latin America, Chile, a country with a long track record of using the PPP model, saw the financial close of several PPP transactions in the airports and health sectors and has a number of road PPPs currently in procurement.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) POLICY

The JLIF Board and its Investment Adviser, John Laing Capital Management Limited ("JLCM"), are committed to environmentally and socially responsible investing and understand the need to carry out our activities in a sustainable manner.

JLIF recognises the environmental, social and economic needs of the communities in which it works and looks for suitable opportunities to engage and support communities, by using the skills, time and financial support of its staff and those of the Investment Adviser. The commitment to corporate social responsibility ("CSR") is delivered through programmes directly supported by JLIF and through the activities of JLCM and JLIF's other partners who manage the projects and provide facilities management services to the Portfolio assets. JLIF actively encourages its partners to engage with the local communities in which our projects are located. It is the engagement of these teams that operate our assets on a daily basis and support the communities in which they operate that makes the greatest difference. A number of the CSR activities that have been undertaken during 2015 are detailed in the following section.

Community Engagement

At our North Swindon Schools project, the project company continued its sponsorship of the Isambard Community School and the Nova Hreod Academy to the Princes Teaching Institute. The Institute helps teachers rediscover their love of their subject, inspiring them to bring the latest thinking into their classrooms and supporting them to make lasting improvements in how they teach. It re-engages teachers with their specialist subjects, inspiring them to bring renewed enthusiasm into their classrooms and raise the aspirations of their pupils.

At our Peterborough Hospital project, the project company liaised with the specialist dementia nurse to identify ways by which the hospital environment could be improved to benefit patients suffering from dementia. A number of changes were identified and funded by the project company, including the introduction of blue crockery, new dementia friendly signs on five inpatient wards and Trust-wide plain curtains in calming colours. Research has shown that patients living with dementia find hospital environments less confusing when there are clear directions on signs that support way finding and navigation. Plain coloured curtains and environments, as opposed to patterned ones, help generate a greater feeling of safety.

At our Leeds Schools project, the project company sponsored, organised, compered and funded in full a Leed's Got Talent event in which each school (Ralph Thoresby School, John Smeaton Academy, Cooperative Academy, Carr Manor High School, South Leeds Academy and Shakespeare Primary) put forward two acts to perform on the evening, with each act including up to 20 pupils. The venue, the New Dock Hall at the Royal Armouries Museum in Leeds, opened at 2pm to allow the acts to familiarise themselves with the space and their surroundings, and all the children were provided with a healthy option meal before they performed. The event was linked to Leeds City Council's Children and Young People's Plan, and was open to all pupils (including those with special educational needs) and provided the opportunity to participate in an event in front of their peers. The event also helped to instil positive behaviour, promote working as a team, physical activity (a number of the acts included dance routines) and foster relationships between pupils from different schools. Participation in previous events like this have also been shown to help improve the social and emotional well-being of the pupils who take part, helping them to feel that they have a voice and influence. The event received critical acclaim by both those who took part and those forming part of the audience:

"I just wanted to say thank you for organising the event on Wednesday. It was an amazing opportunity for my students, one that is rare and unforgettable for them. They are still so excited if not exhausted from the day and have thoroughly enjoyed the experience. We are looking forward to next year already!"

John Smeaton Academy Teacher

"You gave these children an experience that no one can ever take away from them and they will carry it with them for the rest of their lives, that is a great achievement and one you should be very proud of, well done"

Leeds City Councillor

We would like to congratulate every one of the pupils that took part, and particularly 'Dance Legacy' from Carr Manor High School that was awarded first place. 'Lectryx' from the Cooperative Academy came a close second, with 'JSA Choir' from John Smeaton Academy claiming third place.

At our Miles Platting Social Housing, the project company part-funded and helped prepare a successful bid for National Lottery funding for a new community garden designed to help promote informed food choices and healthy eating through a weekly after-school club with pupils from one of the local schools. Surplus produce from the garden is donated to a local church to help provide meals at their homeless shelter.

Greenhouse Gas Emissions Statement

JLIF is an investment company and as such holds equity and sub-ordinated debt interests in its underlying investments. The approach that it has used to consolidate its greenhouse gas ("GHG") emissions reflects this structure and aggregates JLIF's equity share of emissions from each asset. In collating its data, JLIF has considered the GHG emissions from the facilities that it manages for the public-sector. However, JLIF does not have direct control over the energy usage of the facilities it manages as these are controlled by their public-sector end-users. As such, JLIF has limited ability to directly influence or reduce the energy consumption of the facilities.

Carbon Trust Certification Limited has verified that John Laing Infrastructure Fund Ltd has reported a carbon footprint of 127,925 tCO2e in accordance with the measurement requirements of the Carbon Trust Standard and in accordance with the principles of the WRI/WBCSD GHG Protocol.

Our footprint has been verified for the period of 1 July 2015 to 30 June 2016 and certification corresponds to the following boundary:

Organisational Boundary

All global investments less social housing.

Operational Boundary

Equity approach over Scope 1 and Scope 2 GHG emissions (Electricity, Gas and Fuel Oil).

Materiality

Carbon Trust Certification Limited has verified that all material non-conformities identified during the sampling performed on the footprint submitted have been closed and that no material errors, omissions or misrepresentations remain.

Scope 1 GHG emissions represent JLIF's share of direct emissions from the project facilities, typically through the consumption of gas. Scope 2 emissions are JLIF's share of indirect emissions from the project resulting from the generation of purchased energy.

Greenhouse Gas Emissions Source17	2016 (tC02e)	2016 (tC02e/£m)18
Scope 1	29,745	0.03
Scope 2	98,180	0.09
Total	127,925	0.12
Greenhouse Gas Emissions Source19	2015 (tC02e)	2015 (tC02e/£m)18
Scope 1	27,239	0.03

Scope 2	99,346	0.11
Total	126,585	0.14

In demonstrating our environmental stewardship, JLIF also participates in the public reporting of its GHG emissions through CDP (formerly the Carbon Disclosure Project). Our responses from 2013 onwards can be reviewed on the CPD website, www.cdp.net.

APPROVAL OF THE STRATEGIC REPORT

Paul Lester CBE

Chairman

20 March 2017

17 In order to ensure the accurate collation and verification of data the GHG emissions above represent JLIF's equity share of annual emissions from the underlying asset portfolio for the period 1 July 2015 to 30 June 2016. As such, these are not consistent with the time period of the rest of the financial statements being 1 January 2016 to 31 December 2016. Assets acquired during the financial statements period are excluded from the GHG emissions data reported.

18 CO

tonnes per £m of Net Asset Value.

19 In order to ensure the accurate collation and verification of data the GHG emissions above represent JLIF's equity share of annual emissions from the underlying asset portfolio for the period 1 July 2014 to 30 June 2015. As such, these are not consistent with the time period of the rest of the financial

statements being 1 January 2015 to 31 December 2015. Assets acquired during the financial statements period are excluded from the GHG emissions data reported.

CORPORATE GOVERNANCE

The Board of JLIF has considered the principles and recommendations of the AIC Code of Corporate Governance ("AIC Code") by reference to the AIC Corporate Governance Guide for Investment Companies ("AIC Guide"). The AIC Code, as explained by the AIC Guide, addresses all the principles set out in Section 1 of the Combined Code, as well as setting out additional principles and recommendations on issues that are of specific relevance to JLIF.

Procedures have been put in place to ensure compliance with the UK Corporate Governance code which was published in September 2014 and which applies to reporting periods beginning on or after 1 October 2014.

The Board considers that reporting against the principles and recommendations of the AIC Code, and by reference to the AIC Guide (which incorporates the Combined Code), will provide better information to shareholders.

The Company has complied with the recommendations of the AIC Code and the relevant provisions of Section 1 of the Combined Code, except as set out below.

The Combined Code includes provisions relating to:

• the role of the chief executive (not applicable to JLIF);

• executive Directors' remuneration (not applicable to JLIF); and

• the need for an internal audit function.

For the reasons set out in the AIC Guide, and in the preamble to the Combined Code, the Board considers these provisions are not relevant to the position of JLIF, being an externally managed investment company. The company has therefore not reported further in respect of these provisions.

THE BOARD

The Board consists of six Non-Executive Directors, all of whom are independent of the Company's Investment Adviser. As the Company has no Executive Directors, the provision of the UK Corporate Governance Code relating to the combining of the roles of Chairman and Chief Executive Officer does not apply to the Company. Directors' details are contained in pages 16 and 17, which set out the range of investment, financial, and business skills and experience represented. The Chairman is an independent non-executive Director and the Deputy Chairman acts as Senior Independent Director.

The Board meets at least four times a year and, should the nature of the activity of the Company require it, additional meetings may be scheduled, sometimes at short notice. Between meetings there is regular contact with the Investment Adviser and the Administrator and the Board requires to be supplied in a timely manner with information by the Investment Adviser, the Company Secretary and other Advisers in a form and of a quality appropriate to enable it to discharge its duties.

The Company intends for all Directors to be subject to annual re-election at the Annual General Meeting of the Company. The Board intends to consider the tenure of each Director after six years. The tenure of Directors is expected to be between six and nine years to allow for phased board appointments and retirements. This process will take account of any changes to the Board's composition arising from the need to fill a casual vacancy.

The terms and conditions of appointment of non-executive Directors are available for inspection from the Company's registered office.

During the period the Board was pleased to support the work undertaken by the not-for-profit organisation "Board Apprentice" by welcoming Ms Theresa Grant, Chief Executive of Trafford Council, as an apprentice to JLIF's Board, on an unpaid basis. The initiative is designed to support increasing diversity on company boards by widening the pool of board-ready candidates. Ms Grant's role is to observe and learn from the Board and the work it does. The purpose of the role is educational only (to gain experience of the workings of a company at board level) and does not involve participation in the Board's work. Ms Grant's apprentice placement lasts for one year and is due to finish in April 2017.

Performance and Evaluation

The Board has adopted a process to review its performance on a regular basis and such reviews are expected to be carried out internally on an annual basis and through external facilitation every three years. This annual evaluation of the Board, the Audit Committee and individual Directors has taken the form of questionnaires and discussion to determine effectiveness and performance in various areas.

In November 2015, the Board engaged Optimus Group Limited ("Optimus"), a Guernsey based independent consultancy, to carry out an external evaluation. This involved meeting with the Board of Directors and the completion of a questionnaire by each Director as well as meetings with representatives from JLCM and Heritage International Fund Managers (the Administrator), reviewing key Board documentation, and evaluating Board and committee structures. Optimus reported its findings at the first scheduled Board meeting in 2016, concluding that the JLIF Board has a high standard of Corporate Governance and is compliant with the Codes (being the FRC UK Corporate Governance Code and the Association of Investment Companies Code). The next external evaluation will take place in 2018.

Any new Directors will receive an induction from the Investment Adviser. All Directors will receive relevant training as necessary.

Duties and Responsibilities

The Board is responsible to shareholders for the overall management of the Company. The Board has adopted a set of reserved powers that set out the particular duties of the Board. Such reserved powers include decisions relating to the determination of the Investment Policy and approval of investments, strategy, capital raising, statutory obligations and public disclosure, financial reporting and entering into any material contracts by the Company.

The Directors have access to the advice and services of the Company Secretary and Administrator, who is responsible to the Board for ensuring that board procedures are followed and that the Board complies with Guernsey Law and applicable rules and regulations of the Guernsey Financial Services Commission and the London Stock Exchange. Where necessary, in carrying out their duties, the Directors may seek independent professional advice at the expense of the Company. The Company maintains appropriate Directors' and Officers' liability insurance in respect of legal action against its Directors on an ongoing basis.

The Board has responsibility for ensuring that the Company keeps proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and which enable it to ensure that the financial statements comply with The Companies (Guernsey) Law, 2008 as amended. It is the Board's responsibility to present a fair, balanced and understandable assessment, which extends to interim and other price-sensitive public reports.

Committees of the Board

The Board has not deemed it necessary to appoint a remuneration committee as, being comprised of six Non-Executive Directors, it considers that such matters may be considered by the whole Board.

The Company has established an Audit Committee, chaired by Mr C Spencer, which operates within clearly-defined terms of reference and comprises five Non-Executive Directors: Mr Spencer,

Mr MacLellan, Mr Morgan, Mr Van Berkel and Ms Green, whose qualifications and experience are noted on pages 16 and 17. The Audit Committee meets at least three times a year at times appropriate to the financial reporting calendar.

The duties of the Audit Committee in discharging its responsibilities include reviewing the Annual Report and Financial Statements; the Interim Report and Financial Statements; the system of internal controls; and the terms of appointment of the Auditor, together with the Auditor's remuneration. It is also the forum through which the Auditor reports to the Board. The Audit Committee also reviews the objectivity of the Auditor along with the terms under which it is engaged to perform non-audit services. The provisions in place to maintain the independence and objectivity of the Auditor include the requirement to replace the lead audit partner every five years, and restrictions on the delivery of non-audit services to the Company with such services and the terms under which these are to be provided, considered by the Audit Committee on a case-by- case basis. Notwithstanding such services, the Audit Committee considers Deloitte LLP independent of the Company and that the provision of such non-audit services is not a threat to the objectivity and independence of the conduct of the audit.

The Audit Committee, having reviewed the performance of the Auditor, has recommended to the Board that the Auditor be offered for re-appointment at the Annual General Meeting of the Company in May 2017.

The Company has also established a Nomination Committee appointed in 2013. This is chaired by Mr D MacLellan and comprises three Non-Executive Directors: Mr MacLellan, Mr Spencer and Mr Morgan.

The duties of the Nomination Committee include regularly reviewing the structure, size and composition of the Board, keeping under review the leadership needs of the Company, leading the process for Board appointments and identifying suitable candidates.

The Board believes that diversity of experience and approach, including gender diversity, amongst Board members is of great importance and it is the Company's policy to consider carefully issues of Board balance and diversity when making new appointments.

The Company has also a Risk Committee, chaired by Ms H Green and comprising Mr Spencer, Mr Morgan and Mr Van Berkel. The Risk Committee, which reports to the Board, is mandated to review the effectiveness of the Company's (and that of the Investment Adviser, Administrator and other third party service providers as it deems fit) internal control policies and procedures for the identification, assessment and reporting of risks. The Risk Committee liaises with the Audit Committee (and vice versa) as appropriate.

Meeting attendance

	Board Meeting max 4	Audit Committee Meeting max 3	Nomination Committee Meeting max 1	Risk Committee Meeting max 3
Paul Lester, CBE	4	n/a	n/a	n/a
David MacLellan	4	3	1	n/a
Guido Van Berkel	4	3	n/a	4
Talmai Morgan	4	3	1	4
Christopher Spencer	4	3	-	4
Helen Green	4	3	n/a	4

A total of eleven other unscheduled Board meetings, ten other unscheduled Committee meetings and three unscheduled Board discussions were held during the year for specific purposes which were attended by some but not all of the Directors.

INTERNAL CONTROL AND FINANCIAL REPORTING

The Board is responsible for the Company's systems of internal control and for reviewing its effectiveness, and has established a set of ongoing processes designed to meet the particular needs of the Company in managing the risks to which it is exposed. These processes have been in place throughout the year ended 31 December 2016 and up until the date of this Report.

The process is based on a risk-based approach to internal control. It considers the key functions carried out by the Investment Adviser and other key service providers, the various activities undertaken within those functions, the risks associated with each activity and the controls employed to minimise those risks. A residual risk rating is then applied. A regular report is provided to the Board highlighting material changes to risk ratings and then a formal review of these procedures is carried out by the Audit Committee on an annual basis. By their nature, these procedures will provide a reasonable, but not absolute, assurance against material misstatement or loss.

At each Board meeting, the Board also monitors the Group's investment performance and activities since the last Board meeting to ensure that the Investment Adviser and Operator adhere to the agreed Investment Policy and approved investment guidelines. Furthermore, at each Board meeting, the Board receives reports from the Company Secretary and Administrator in respect of compliance matters and duties performed by them on behalf of the Company.

The Board considers that an internal audit function specific to the Company is unnecessary and that the systems and procedures employed by the Investment Adviser and Operator, including their own internal audit functions, provide sufficient assurance that a sound system of internal control, which safeguards the Company's assets, is maintained.

Investment Advisory services are provided to the Company by John Laing Capital Management Limited ("JLCM"). The Board is responsible for setting the overall Investment Policy and monitors the action of the Investment Adviser and Operator at regular Board meetings. The Board has also delegated administration and company secretarial services to Heritage International Fund Managers Limited but retains accountability for all functions it delegates.

RELATIONS WITH SHAREHOLDERS

The Company welcomes the views of shareholders and places great importance on communication with its shareholders. Senior members of the Investment Adviser make themselves available at all reasonable times to meet with principal shareholders and key sector analysts. The Chairman and other Directors are also available to meet with shareholders if required.

Reports on the views of shareholders are provided to the Board on a regular basis. The Board is also kept fully informed of all relevant market commentary on the Company by the Investment Adviser.

All shareholders can address their individual concerns to the Company in writing at its registered address, while the Annual General Meeting of the Company provides a forum for shareholders to meet and discuss issues with the Directors and the Investment Adviser.

SUMMARY OF THE ROLE OF THE AUDIT COMMITTEE

The Audit Committee is appointed by the Board from the non-executive Directors of the Company. The Audit Committee's terms of reference include all matters indicated by Disclosure and Transparency Rule 7.1 and the UK Corporate Governance Code. The terms of reference are considered annually by the Audit Committee and are then referred to the Board for approval. A copy of the terms of references is available upon request from the Company Secretary.

The main role and responsibilities of the Audit Committee are:

• monitoring the integrity of the financial statements of the Group and any formal announcements relating to the Group's financial performance and reviewing significant financial reporting judgements contained therein;

• reviewing the Group's internal financial controls (including liaising with the Investment Adviser who reviews the systems and internal controls of service providers) and, unless expressly addressed by the Board itself, the Group's internal control and risk management systems;

• making recommendations to the Board, for a resolution to be put to the shareholders for their approval in general meeting, on the appointment of the external auditor and the approval of the remuneration and terms of engagement of the external auditor;

• reviewing and monitoring the external auditor's independence and objectivity and the effectiveness of the audit process, taking into consideration relevant UK professional and regulatory requirements;

• reviewing the Group's accounts;

• developing and implementing a policy on the engagement of the external auditor to supply non- audit services, taking into account relevant guidance regarding the provision of non-audit services by the external audit firm; and

• reporting to the Board on how it has discharged its responsibilities.

The Audit Committee is required to report its findings to the Board, identifying any matters on which it considers that action or improvement is needed, and make recommendations on the steps to be taken.

COMPOSITION OF THE AUDIT COMMITTEE

The members of the Audit Committee are:

Christopher Spencer (Chairman) David MacLellan

Talmai Morgan Guido Van Berkel Helen Green

See pages 16 to 17 for biographical details of the current Audit Committee members.

MEETINGS

The Audit Committee shall meet not less than three times a year and at such other times as the Audit Committee Chairman shall require.

Any member of the Audit Committee may request that a meeting be convened by the Secretary of the Audit Committee. The external auditor may request that a meeting be convened if it is deemed necessary.

Other Directors and third parties may be invited by the Audit Committee to attend meetings as and when appropriate.

ANNUAL GENERAL MEETING

The Audit Committee Chairman shall attend each Annual General Meeting of the Company and shall be prepared to respond to any shareholder questions on the Audit Committee's activities.

SIGNIFICANT ACCOUNTING RISKS

The Audit Committee considers the following significant risk in relation to the financial statements:

Fair value of investments

JLIF is required to determine the fair value of the investments. Whilst there is an active market for investments of this nature there is not a suitable listed, or other public market in these investments against which their value can benchmarked. As a result, a valuation is performed based on a discounted cash flow methodology in line with IAS 39 Financial Instruments: Recognition and Measurement and IFRS 13 Fair Value Measurement.

The calculation of the fair value of the investments carries elements of risk, mainly in relation to the assumptions and judgements made with respect to:

• the determination of appropriate macroeconomic assumptions underlying the forecast investment cash flows;

• the impact of project specific matters to the forecast cash flows for each investment;

• the determination of appropriate discount rates for each investment that is reflective of the current market conditions;

• the determination of appropriate sensitivities to apply to meet the required disclosures;

• the underlying project financial models may not reflect the underlying performance of the investment;

• the cash flows from the underlying financial models may not take into account current known issues;

• the updates performed on the underlying financial models may result in errors in forecasting;

• major maintenance/lifecycle is a significant cost in some investments with judgement around timing and quantum. This can have a significant impact on distributions; and

• terms and costs of the future refinancing of senior debt on certain projects.

The Audit Committee is satisfied that the Investment Adviser's assumptions have been reviewed and challenged for:

• the macroeconomic assumptions, including comparison of these assumptions to observable market data, actual results and prior year comparatives; and

• the build-up of the discount rates for consistency and reasonableness, benchmarking against market data and peers and project-specific items.

The Audit Committee is also satisfied that the Portfolio valuation and associated disclosures have been appropriately calculated, ensuring that the investments are brought on balance sheet at fair value and that the independent valuation carried out by an independent firm has been reviewed and challenged by the Audit Committee and that the fair value of the investments is challenged by the Auditor.

INTERNAL AUDIT

The Audit Committee shall consider at least once a year whether or not there is a need for an internal audit function. Currently, the Audit Committee does not consider there to be a need for an internal audit function at the Group level. However, internal audits of the underlying PPP projects are performed periodically by the Investment Adviser who will report findings to the Audit Committee.

EXTERNAL AUDIT

Deloitte LLP has been the Company's external auditor since launch in 2010, and this is its seventh consecutive annual audit. As a result of its work during the year, the Audit Committee has concluded that it has acted in accordance with its terms of reference.

The Audit Committee has assessed the quality and the effectiveness of the audit process. To draw its conclusions, the Audit Committee reviewed:

• the scope of the audit, the audit fee and the external auditor's fulfilment of the agreed audit plan;

• the degree of diligence demonstrated by them in the course of their interaction with the Board, the Audit Committee and the Investment Adviser;

• the external auditor's assessment of the Group's financial statement risks; and

• the report highlighting the matters that arose during the course of the audit and the recommendations made by the external auditor.

The Audit Committee has noted the revisions to the UK Corporate Governance Code introduced by the Financial Reporting Council in September 2012 and the AIC Code of Corporate Governance issued in February 2013 and in particular the recommendation, in each, to put the external audit out to tender every five to ten years. The Audit Committee has also noted the requirements of The Competition and Markets Authority (formerly the UK Competition Commission) with respect to external auditor services and retendering.

The Audit Committee is satisfied with the effectiveness and independence of the audit process and as such recommended to the Board that Deloitte LLP be re-appointed as external auditor for the year ending 31 December 2017. The Audit Committee also recommended the Audit appointment is retendered every nine years, with the Audit partner changing every five years.

NON-AUDIT SERVICES

The Audit Committee considered the extent of non-audit services provided by the external auditor. The external auditor's objectivity and independence is safeguarded through limiting non-audit services such as work pertaining to their role as reporting accountants for capital raising services.

ACTIVITIES OF THE AUDIT COMMITTEE

The Audit Committee met on three occasions during the period 1 January 2016 to 31 December 2016. Matters considered at these meetings included but were not limited to:

• review of the appointment of the external auditor;

• review of the effectiveness of the external auditor;

• approval of the external audit fees;

• consideration and agreement of the terms of reference of the Audit Committee for approval by the Board;

• review of the proposed accounting policies and format of the Financial Statements;

• review of the audit plan and timetable for the preparation of the Report and Financial Statements; and

• review of the 2015 Annual Accounts Report and Financial Statements and the 2016 Interim report.

APPROVAL

On behalf of the Audit Committee

Christopher Spencer

Chairman of the Audit Committee 20 March 2017

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and Financial Statements in accordance with applicable laws and regulations. The Companies (Guernsey) Law 2008 requires the Directors to prepare financial statements for each financial year. Under that law, the Directors are required to prepare the Group financial statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union and the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

In preparing these financial statements, International Accounting Standard 1 requires that Directors:

• properly select and apply accounting policies;

• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

• provide additional disclosures when compliance with the specific requirements in IFRS are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and

• make an assessment of the Company's ability to continue as a going concern.

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 which enable them to ensure that the financial statements comply with the Companies (Guernsey) Law, 2008. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in Guernsey and the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Responsibility Statement

We confirm that to the best of our knowledge:

• The financial statements, prepared in accordance with IFRS, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole;

• The strategic report includes a fair review of the development and performance of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that the Company faces; and

• The Annual Report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's performance, business model and strategy.

By order of the Board

Paul Lester CBE

Chairman

20 March 2017

REPORT OF THE DIRECTORS

The Directors have pleasure in submitting their report and the Audited Financial Statements of the Company and its investments for the year ended 31 December 2016.

PRINCIPAL ACTIVITIES

John Laing Infrastructure Fund Limited ("JLIF") is a company incorporated and registered in Guernsey under the Companies (Guernsey) Law, 2008. JLIF was incorporated on 6 August 2010 with the company register number 52256.

As at 31 December 2015, the total number of Ordinary Shares of JLIF in issue was 814.8 million. This was increased by 81.2 million shares in March 2016 as a consequence of a shareholder tap issue, by a further 2.3 million shares in May 2016 as a result of certain shareholders electing to take up the Scrip Dividend Alternative option and by a further 0.7 million as a result of the Scrip Dividend Alternative option in October 2016. As at 31 December 2016, the total number of Ordinary Shares in issue was 899.0 million.

The Company is a registered fund under the Registered Collective Investment Scheme Rules 2015 and is regulated by the Guernsey Financial Services Commission and, during the period, its principal activity was as an investor in PPP projects in the UK, North America and Continental Europe.

BUSINESS REVIEW

We are required to present a fair review of our business during the year ended 31 December 2016, our position at period end and a description of the principal risks and uncertainties that we face.

This information is contained within the Strategic Report over pages 6 to 37.

DISCLOSURE OF INFORMATION UNDER LISTING RULE 9.8.4

Information on any contract of significance subsisting during the period under review:

(a) to which the Company, or one of its subsidiary undertakings, is a party and in which a director of the Company is or was materially interested; and

(b) between the Company, or one of its subsidiary undertakings, and a controlling shareholder can be found in note 17.

The Directors note that no shareholder has waived or agreed to waive any dividends.

RESULTS AND DIVIDENDS

The results for the year are set out in the Financial Statements on pages 55 to 86. On 20 March 2017 the Directors declared a dividend in respect of the period 1 July 2016 to 31 December 2016 of 3.48 pence per Ordinary Share to shareholders on the register as at the close of business on 24 March 2017.

GOING CONCERN

The Company's business activities, together with the factors likely to affect its future development, performance and prospects, are set out in the Investment Adviser Report on pages 24 to 35. The financial position of the Company, its cash flows and its liquidity position are also described in the Investment Adviser Report. In particular, the current economic conditions continue to present a number of risks and uncertainties for the Company and these are set out in the Risk Committee Report on pages 10 to 15. The financial risk management objectives and policies of the Company and the exposure of the Company to credit risk, market risk and liquidity risk are discussed in note 18 of the Financial Statements.

The Company continues to meet its requirements and day-to-day liquidity needs through both its own cash resources and those of the Group, to which it has full recourse.

In June 2016, JLIF Limited Partnership, a subsidiary of the Company, signed and agreed the terms of a three-year £150 million multi-currency accordion facility with the same lenders that provide JLIF's five-year £180 million revolving credit facility (signed in August 2015). The signing of this facility means JLIF has access to up to £330 million of debt financing that it can use to finance acquisitions. The margin on the accordion facility of 175bps is the same as that on the revolving credit facility. The facilities are used primarily to finance acquisitions and repaid through raising equity in the market or using distributions from the Portfolio. The facilities are intended to be additional resource and not structural gearing.

As at 31 December 2016 the Company had a cash balance of £5.5 million, a further £27.2 million within the rest of the JLIF Group and facility headroom of £158.6 million (being drawn by £171.4 million) available for future acquisitions and working capital. The Company has sufficient cash balances to meet other current obligations as they fall due while all key financial covenants are forecast to continue to be complied with.

The Directors have reviewed forecasts and projections that cover a period of not less than 12 months from the date of this Annual Report, taking into account reasonably-possible changes in investment and trading performance, which show that the Company has sufficient financial resources. The Group has sufficient financial resources together with long term contracts with various public-sector clients and suppliers across a range of infrastructure projects. Consequently, the Directors believe that the Company is well placed to manage its business risks successfully.

Based on this review, and after making due enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

SHARE CAPITAL

The issued Ordinary Share capital of the Company was increased through a shareholder tap issue in March 2016, the offer of a Scrip Dividend Alternative in May 2016 and a second offer of a Scrip Dividend Alternative in October 2016. Further details can be found in note 17 to the financial statements.

The Company has one class of Ordinary Shares that carries no rights to fixed income. On a show of hands, each member present

in person or by proxy has the right to one vote at our general meetings. On a poll, each member is entitled to one vote for every

share held.

The issued nominal value of the Ordinary Shares represents 100% of the total issued nominal value of all share capital. There are no specific restrictions on the size of a holding nor on the transfer of shares, which are both governed by the general provisions of the Articles of Incorporation and prevailing legislation. The Directors are not aware of any agreements between holders of the Company's shares that may result in restrictions on the transfer of securities or on voting rights. No person has any special rights of control over the Company's share capital and all issued shares are fully paid.

The Company's Memorandum and Articles of Incorporation contain details relating to the rules that the Company has about the appointment and removal of Directors or amendment to the Company's Articles of Incorporation that are incorporated into this report by reference.

UCITS ELIGIBILITY

The Company has been advised that the ordinary shares should be "transferable securities" and, therefore, should be eligible for investment by authorised funds in accordance with the UCITS Directive ("UCITS") or Non-UCITS retail schemes ("NURS"). This is on the basis that: (a) the

Company is a closed-ended investment company; (b) the ordinary shares are admitted to trading on the Main Market of the London Stock Exchange; (c) the ordinary shares have equal voting rights; and (d) the Company is an internally managed alternative investment fund ("AIF") regulated by the Guernsey Financial Services Commission as a registered fund under the Registered Collective Investment Scheme Rules 2015. However, the manager of the relevant UCITS or NURS should satisfy itself that the ordinary shares are eligible for investment by the relevant UCITS or NURS.

AUTHORITY TO PURCHASE OWN SHARES

A resolution to provide the Company with authority to purchase its own shares will be tabled at the AGM on 19 May 2017. This shareholder authority was renewed at the 2016 AGM.

MAJOR INTERESTS IN SHARES AND VOTING RIGHTS

As at 31 December 2016, the Company had been notified, in accordance with chapter 5 of the Disclosure and Transparency Rules, of the following voting rights as a shareholder in the Company.

Shareholder	Percentage of voting rights and issued share capital	No. of ordinary shares
The Bank of New York (Nominees) Limited	18.42	165,640,741
State Street Nominees Limited	14.95	134,385,088
Chase Nominees Limited	8.26	74,223,247
HSBC Global Custody Nominee (UK)	4.65	41,846,776
BBHISL Nominees Limited	3.83	34,399,425
Luna Nominees Limited	3.15	28,349,508
Ferlim Nominees Limited	3.11	27,987,997

BOARD OF DIRECTORS

The Board members that served during the year and up until the date of this Report, all of whom are non-executive Directors and independent of the Investment Adviser, are listed below. Their biographical details are shown on pages 16 and 17.

Name	Function
Paul Lester, CBE	Chairman
David MacLellan	Deputy Chairman & Senior Independent Director
Talmai Morgan	Director
Christopher Spencer	Director
Guido Van Berkel	Director
Helen Green	Director

RE-ELECTION OF DIRECTORS

All Directors are standing for election or re-election on an annual basis and each has letters of appointment rather than service contracts.

DIRECTORS' INTERESTS

Directors who held office during the period and had interests in the shares of the Company as at 31 December 2016 were:

	Ordinary shares of 0.01p each held at 31 December 2016	Ordinary shares of 0.01p each held at 31 December 2015
Paul Lester, CBE*	139,379	139,379
David MacLellan**	28,125	28,125
Talmai Morgan	25,000	25,000
Christopher Spencer	30,000	30,000
Guido Van Berkel	-	-
Helen Green	-	-

There have been no changes in the Directors' interests from 31 December 2016 to the date of this report.

*139,379 of which is held by his spouse

**28,125 of which is held by his spouse

DIRECTORS' REMUNERATION

During the year, the Directors earned the following emoluments in the form of Directors' fees from the Company. This followed a benchmarking exercise undertaken by an independent third party during 2015.

	2016 Directors' fees	2015 Directors' fees
Paul Lester, CBE	£73,000	£56,000
David MacLellan	£63,000	£46,000
Talmai Morgan	£53,000	£38,500
Christopher Spencer	£58,000	£41,000
Guido Van Berkel	£56,541	£45,000
Helen Green20	£53,000	£38,500

20 Helen Green's remuneration is paid via Saffery Champness. Helen was appointed to the Board in April 2014.

ANNUAL GENERAL MEETING

JLIF's AGM will be held at 10.30am BST on 19 May 2017 at The Douglas and Dalrymple Rooms, Old Government House Hotel, St Ann's Place, St Peter Port, Guernsey, Channel Islands. Details of the business to be conducted are contained in the Notice of AGM.

APPOINTMENT OF INVESTMENT ADVISER AND OPERATOR

John Laing Capital Management ("JLCM") acts as the Investment Adviser to the Company and acts as Operator of the Limited Partnership that holds and manages the Group's investments. A summary of the contract between the Company, its group companies and JLCM in respect of services provided is set out in note 17 to the financial statements. It is in the Directors' opinion that, based upon the performance in the period to 31 December 2016, the continuing appointment of JLCM on the agreed terms is in the best interests of the shareholders as a whole.

EVENTS AFTER BALANCE SHEET DATE

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

AUDITOR

The Audit Committee reviews the appointment of the external auditor, its effectiveness and its relationship with the Group, which includes monitoring our use of the Auditor for non-audit services and the balance of audit and non-audit fees paid. Following a review of the independence and

effectiveness of our external auditor, a resolution will be proposed at the 2017 AGM to re-appoint Deloitte LLP.

Each Director believes that there is no relevant information of which our Auditor is unaware. Each has taken all steps necessary, as a Director, to be aware of any relevant audit information and to establish that Deloitte LLP is made aware of any pertinent information. This confirmation is given and should be interpreted in accordance with the provisions of Section 249 of the Companies (Guernsey) Law 2008.

By order of the Board

Paul Lester CBE

Chairman

20 March 2017

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF JOHN LAING INFRASTRUCTURE FUND LIMITED

Opinion on financial statements of John Laing Infrastructure Fund Limited In our opinion:

• the financial statements give a true and fair view of the state of the company's affairs as at 31 December 2016 and of its profit for the year then ended;

• have been properly prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union; and

• have been prepared in accordance with the requirements of the Companies (Guernsey) Law, 2008.

The financial statements that we have audited comprise:

• the Income Statement;

• the Balance Sheet;

• the Cash Flow Statement;

• the Statement of Changes in Equity; and

• the related notes 1 to 22.

The financial reporting framework that has been applied in their preparation is applicable law and IFRSs as adopted by the European Union.

Summary of our audit approach
Key risks	The key risks that we identified in the current year were: • valuation of investments at fair value; and • recognition of operating income. Within this report, any new risks are identified with [N] and any risks which are the same as the prior year identified with [P]
Materiality	We determined materiality for the company to be £21.6m, which is below 2% of equity. We have applied a lower materiality threshold of £3.5 million based on 2% of annual investment income, to administrative costs.
Scoping	Our audit was scoped by obtaining an understanding of the entity and its environment, including internal control, and assessing the risks of material misstatement. Audit work to respond to the risks of material misstatement was performed directly by the audit engagement team.

Significant changes in our approach

There has been no significant changes in our

approach from the prior year.

Going concern and the directors' assessment of the principal risks that would threaten the

solvency or liquidity of the company

As required by the Listing Rules we have reviewed the directors' statement regarding the appropriateness of the going concern basis of accounting contained within note 2(c) to the financial statements and the directors' statement on the longer-term viability of the company contained within the strategic report on page 15.

We are required to state whether we have anything material to add or draw attention to in relation to:

• the directors' confirmation on page 15 that they have carried out a robust assessment of the principal risks facing the company, including those that would threaten its business model, future performance, solvency or liquidity;

• the disclosures on pages 10 - 15 that describe those risks and explain how they are being managed or mitigated;

• the directors' statement in note 2(c) to the financial statements about whether they considered it appropriate to adopt the going concern basis of accounting in preparing them and their identification of any material uncertainties to the company's ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements; and

• the directors' explanation on page 15 as to how they have assessed the prospects of the company, over what period they have done so and why they consider 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 confirm that we have nothing material to add or draw attention to in respect of these matters.

We agreed with the directors' adoption of the going concern basis of accounting and we did not identify any such material uncertainties. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company's ability to continue as a going concern.

Independence
We are required to comply with the Financial Reporting Council's Ethical Standards for	We confirm that we are independent of the company and we have fulfilled our other

Auditors and confirm that we are independent of the company and we have fulfilled our other ethical responsibilities in accordance with those standards.

ethical responsibilities in accordance with those standards. We also confirm we have not provided any of the prohibited non-audit services referred to in those standards.

Our assessment of risks of material misstatement

The assessed risks of material misstatement described below are those that had the greatest effect on our audit strategy, the allocation of resources in the audit and directing the efforts of the engagement team.

Valuation of investments at fair value [P]

Risk description

The Company holds an investment in JLIF Luxco 1 S.à.r.l. valued at £1,078.2 million (2015:

£833.1 million) and this investment in turn owns indirect investments in intermediate holding companies and equity and subordinated debt interests in PPP infrastructure projects. These investments in PPP projects are valued at

£1,217.6 million (2015: £867.8 million), and the subsidiaries within the intermediate holding structure are in a net liability position of £139.5 million (2015: asset £15.3 million). Refer to Note 10 to the financial statements for the movements in these investments for the financial year.

As described in the Accounting Policies in Note 2 to the financial statements and Audit Committee Report on page 41, the fair value of investments in PPP infrastructure projects is determined using a discounted cash flow methodology, as there is no liquid market for these projects. The complexity of this methodology, as well as the numerous, significant judgments, mean there is a risk that the fair value of these investments may not be appropriate. The key judgements are:

• Discount rates - the determination of the appropriate discount rate for each investment that is reflective of current market conditions and the specific risks within each project;

• Macroeconomic assumptions - including corporation tax, inflation and deposit rates;

• Forecast future cash flows - enhancements made to underlying project cash flows to enhance or change the timings of cash flows from the PPP infrastructure projects;

• Tax considerations - the potential impact of Base Erosion Profit Shifting action 4, and the surrendering of losses within the group

structure on the fair value of the PPP infrastructure projects; and

• Additional consideration to the effects of the UK's decision to leave the EU on the fair value of PPP investments - the Company's ability to remain competitive in European markets with the weakening of Sterling as well as the potential effect of instable markets on macro- economic assumptions.

• Discussing with our valuation specialists the valuation of investments, the appropriateness of management's judgements, discount rates applied, the impact of the EU referendum result on the valuation of the PPP projects and challenging management's independent specialists;

• Using our tax specialists to assess the impact of certain tax considerations and then challenging management concerning the impact of those in the fair value of the Company's PPP infrastructure projects; and

• Considering the sensitivity of the fair value of investments to key macroeconomic assumptions in light of the volatility noted in

2016, particularly as a result of Brexit.

How the scope of our audit responded to the risk

We obtained assurance over the appropriateness of management's judgements applied in determining the fair value of PPP infrastructure projects by:

• Testing the operating effectiveness of controls at various service providers, focussing on the financial reporting and treasury cycles and the controls around project models;

• Testing the operating effectiveness of controls around the valuation process adopted by management and the Board;

• Challenging management concerning the discount rates applied to individual projects and to each sector, and comparing to relevant peers and recent market transactions;

• Challenging macroeconomic assumptions by reference to observable market data and forecasts;

• Reviewing forecast cash flows, in particular movements since acquisition and value

enhancements made, particularly by reference

to third party support;

• Reviewing the historical accuracy of management's cash flow forecasts against actual results;

• Running audit analytics on the valuation model and a sample of project models to test them for integrity and material formula errors;

• Visiting a selection of sites and holding discussions with the local management on potential project issues which might affect

future cash flows;

Key observations

We found that management's judgements and assumptions fall within the reasonable range against comparable market evidence.

We found that the methodology applied was

appropriate in all material respects.

Recognition of operating income [P]

Risk description

Operating income of £175 million (2015: £58 million) represents the movement in fair value of JLIF's investment in JLIF Luxco 1 S.à.r.l. This is determined by reference to the increase in the fair value of PPP infrastructure projects of £94 million (2015: decrease of £7 million) and the increase in the fair value of the intermediate subsidiaries of £81 million (2015: £64 million).

There is a risk that there may be double counting of forecast cash flows used in determining the fair value of these investments, with the cash flow included as both a receivable held at fair value and as a discounted forecast cash flow.

The Accounting policies related to this risk can be found in note 2(d) of the financial statements

How the scope of our audit responded to the risk

As well as the procedures highlighted above for challenging the fair value of investments, we have:

• Traced the distributions from the underlying investments through to the valuation model, and into the direct subsidiary and indirect subsidiaries;

• Assessed the consistency of the accounting treatment of cash received in the intermediate subsidiary structure to assess whether revenue is recognised in the correct period; and

• Reviewed receivables against the fair value of

investments in PPP infrastructure projects to assess whether there is cash flow receipt included in both.

Key observations

We noted no material instances of inappropriate operating income recognition arising in our

testing.

Our application of materiality We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work. Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Materiality	£21.6 million (2015: £16.0 million)
Basis for determining materiality	We determined materiality for the company to be below 2% of equity (2015: below 2% of equity). We have applied a lower materiality threshold of £3.5 million (2015: £2.9 million) based on 2% of annual investment income (2015: 5% of annual investment income), to administrative costs. We have reduced the percentage applied to annual investment income as a result of the significant growth of the fair value of investments.
Rationale for the benchmark applied	We believe equity is the most appropriate benchmark as it is considered to be one of the principal considerations for members of the Company in assessing its financial performance. We have applied a lower materiality threshold of £3.5 million to administrative costs as amounts less than £21.6m could reasonably be expected to influence the economic decisions of shareholders as they provide the net income to support distributions to shareholders.

We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £0.43 million (2015: £0.32 million), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements.

An overview of the scope of our audit

Our scoping has been tailored by assessing the risks of material misstatement for the company. We have applied a risk based approach in scoping the portfolio of investments, considering the cash flows of the company's PPP investments, and grouping assets with similar characteristics and risk profiles together. Based on each level of assessed risk, we have tailored our procedures to respond to these risks.

JLIF uses a number of service organisations to manage its investments and to support in the preparation of the financial statements. As such, we have assessed the design and implementation, and tested the operating effectiveness of controls at a sample of these service

organisations, which gives coverage of 80.2% (2015: 73.8%) of the PPP investments by value. In addition, we have reviewed the competency and capabilities of other service organisations to provide the services for which they are engaged.

Matters on which we are required to report by exception

Adequacy of explanations received and accounting records

Under the Companies (Guernsey) Law 2008 we are required to report to you if, in our opinion:

• we have not received all the information and explanations we require for our audit; or

• 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 are not in agreement

with the accounting records and returns.

We have nothing to report in respect of these matters.

Corporate Governance Statement

Under the Listing Rules we are also required to review part of the Corporate Governance Statement relating to the company's compliance with certain provisions of the UK

Corporate Governance Code.

We have nothing to report arising from our review.

Our duty to read other information in the Annual Report

Under International Standards on Auditing (UK and Ireland), we are required to report to you if, in our opinion, information in the annual report is:

• materially inconsistent with the information in the audited financial statements; or

• apparently materially incorrect based on, or materially inconsistent with, our knowledge of the company acquired in the course of performing our audit; or

• otherwise misleading.

In particular, we are required to consider whether we have identified any inconsistencies between our knowledge acquired during the audit and the directors' statement that they consider the annual report is fair, balanced and understandable and whether the annual report appropriately discloses those matters that we communicated to the audit committee which we

consider should have been disclosed.

We confirm that we have not identified any such inconsistencies or

misleading statements.

RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITOR

As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). We also comply with International Standard on Quality Control 1 (UK and Ireland). Our audit methodology and tools aim to ensure that our quality control procedures are effective, understood and applied. Our quality controls and systems include our dedicated professional standards review team and independent partner reviews.

This report is made solely to the company's members, as a body, in accordance with Section 262 of the Companies (Guernsey) Law, 2008. 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.

SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

John Clacy, FCA

for and on behalf of Deloitte LLP

Chartered Accountants and Recognised Auditor Guernsey, Channel Islands

20 March 2017

INCOME STATEMENT

for the year ended 31 December

	Notes	2016 £'000s	2015 £'000s
Operating income		175,242	58,359
Administrative expenses	5	(14,815)	(11,397)
Operating profit		160,427	46,962
Net finance income	6	2	4
Profit before tax		160,429	46,966
Tax	7	-	-
Profit for the year		160,429	46,966
Attributable to:
Owners of the Company		160,429	46,966
		160,429	46,966
Earnings per share
From continuing operations
Basic and diluted (pence)	9	18.13	5.78

All results are derived from continuing operations.

There are no items of Other Comprehensive Income in both the current and preceding year, other than profit for the year and therefore no separate Statement of Comprehensive Income has been presented.

STATEMENT OF FINANCIAL POSITION

as at 31 December

	Notes	2016 £'000s	2015 £'000s
Non-current assets
Investments at fair value through profit or loss	10	1,078,175	883,132
Total non-current assets		1,078,175	883,132
Current assets
Trade and other receivables	11	163	159
Cash and cash equivalents		5,511	2,533
Total current assets		5,674	2,692
Total assets		1,083,849	885,824
Current liabilities
Trade and other payables	12	(3,281)	(2,728)
Total current liabilities		(3,281)	(2,728)
Total liabilities		(3,281)	(2,728)
Net assets		1,080,568	883,096
Equity
Share capital	14	90	81
Share premium account	15	946,907	851,459
Retained earnings	16	133,571	31,556
Equity attributable to owners of the Company		1,080,568	883,096
Total equity		1,080,568	883,096
Net Asset Value per share		120.2	108.4

The financial statements were approved by the Board of Directors and authorised for issue on 20 March 2017. They were signed on its behalf by:

P Lester C Spencer

Chairman Director

STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December

Statement of Changes in Equity in 2016
		Share capital £'000s	Share premium account £'000s	Retained earnings £'000s	Total equity £'000s
	Notes		Share premium account £'000s
Balance at 1 January 2016	14 & 15	81	851,459	31,556	883,096
Profit for the year	16	-	-	160,429	160,429
Total comprehensive income for the year				160,429	160,429
Ordinary shares issued	14 & 15	9	96,685	-	96,694
Cost of shares issued	15	-	(1,237)	-	(1,237)
Dividends paid	8	-	-	(58,414)	(58,414)
Balance at 31 December 2016		90	946,907	133,571	1,080,568
Statement of Changes in Equity in 2015
		Share capital £'000s	Share premium account £'000s	Retained reserves £'000s	Total equity £'000s
	Notes		Share premium account £'000s
Balance at 1 January 2015	14 & 15	81	847,837	39,411	887,329
Profit for the year	16	-	-	46,966	46,966
Total comprehensive income for the year				46,966	46,966
Ordinary shares issued	14 & 15	-	3,707	-	3,707
Cost of shares issued	15	-	(85)	-	(85)
Dividends paid	8	-	-	(54,821)	(54,821)
Balance at 31 December 2015		81	851,459	31,556	883,096

CASH FLOW STATEMENT

for the year ended 31 December

	Notes	2016 £'000s	2015 £'000s
Operating profit		160,427	46,962
Adjustments for:
Decrease in accrued interest income		(44,320)	(12,361)
Net (gain) / loss on investments at fair value through profit or loss		(59,223)	14,902
Operating cash flows before movements in working capital		56,884	49,503
(Increase) in receivables		(4)	(86)
Increase in payables		553	58
Cash inflow from operations		57,433	49,475
Net cash inflow from operating activities		57,433	49,475
Investing activities
Loan to subsidiaries		(91,500)	-
Net cash used in investing activities		(91,500)	-
Financing activities
Dividends paid - equity shareholders	8	(54,649)	(51,114)
Net finance income	6	2	4
Proceeds on issue of share capital (net of costs)	15	91,691	(85)
Net cash from financing activities		37,044	(51,195)
Net increase / (decrease) in cash and cash equivalents		2,977	(1,720)
Cash and cash equivalents at beginning of the year		2,533	4,253
Effect of exchange rate movement		1	-
Cash and cash equivalents at end of year		5,511	2,533

Cash and cash equivalents comprise cash and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets is approximately equal to fair value.

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 31 December 2016

1. GENERAL INFORMATION

John Laing Infrastructure Fund Limited (the "Company", or "JLIF") is a company domiciled and incorporated in Guernsey, Channel Islands, whose shares are publicly traded on the London Stock Exchange under a Premium Listing. The financial statements of the Company as at and for the year ended 31 December 2016 have been prepared on the basis of the accounting policies set out below. The financial statements comprise the Company and its investment in JLIF Luxco 1 S.à.r.l. The Company and its subsidiaries invest in PPP infrastructure projects in the UK, Europe and North America.

The Company accounts for its investment in its direct subsidiary JLIF Luxco 1 S.à.r.l. at fair value. The Company, together with its direct subsidiary JLIF Luxco 1 S.à.r.l. and all the intermediate holding subsidiaries compose the Group investing in PPP assets (the "Group").

The net assets of the intermediate holding companies, which at 31 December 2016 principally comprise working capital and outstanding loan balances, are included at fair value in the carrying value of investments.

These financial statements are presented in Sterling which is the currency of the primary economic environment in which the Company operates. Foreign operations are included in accordance with the policies set out in note 2.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of accounting

The financial statements have been prepared in accordance with the Companies (Guernsey) Law 2008 and in accordance with International Financial Reporting Standards ("IFRS") as adopted by the EU and therefore the Company's financial statements comply with Article 4 of the EU International Accounting Standards ("IAS") Regulation.

The Company has not adopted during the year any new and revised International Financial Reporting Standards interpretations and amendments.

At the date of approval of these financial statements, the Company has not applied the following new and revised IFRS standards that have been issued but are not yet effective and have not yet been adopted by the EU:

IFRS 9	Financial Instruments
IFRS15	Revenue from Contracts with Customers
IFRS16	Leases
IFRS 2 (amendments)	Classification and Measurement of Share-based Payment Transactions
IAS 7 (amendments)	Disclosure Initiative
IAS 12 (amendments)	Recognition of Deferred Tax Assets for Unrealised Losses
IFRS 10 and IAS 28 (amendments)	Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

The Directors do not expect that the adoption of the standards listed above will have a material impact on the financial statements of the Group in future periods. The

Directors intend to perform a detailed analysis of the potential impact of these standards on the Company and its investments during 2017.

(b) Basis of preparation The Company

a) Obtains funds from one or more investors for the purpose of providing those investor(s) with investment management services;

b) Commits to its investor(s) that its business purpose is to invest funds solely for returns from investment income, capital appreciation, or both; and

c) Measures and evaluates the performance of substantially all of its investments on a fair value basis.

Consequently, the Company does not consolidate its subsidiaries or apply IFRS 3 'Business Combinations' when it obtains control of another entity as it is considered to be an Investment Entity under IFRS. Instead, the Company measures its investment in its subsidiary at fair value through profit or loss.

The financial statements incorporate the financial statements of the Company only. The Company recognises its investment in its direct subsidiary, JLIF Luxco 1 S.à.r.l., at fair value through profit or loss. The fair value estimate of JLIF Luxco 1 S.à.r.l. includes the fair value of both this company and all of the Company's subsidiaries and PPP investments.

The Company invests solely for capital appreciation, investment income, or both. Consequently, the Company does not plan to hold its investments indefinitely. The Company has an exit strategy for the portfolio of investments held indirectly.

JLIF Luxco 1 S.à.r.l. is itself an investment entity. Consequently, the Company need not have an exit strategy for its investment in JLIF Luxco 1 S.à.r.l. Similarly, any other subsidiaries that are investment entities themselves do not require an exit strategy to meet the definition of an investment entity.

Each investment indirectly held (subordinated debt together with equity) has a finite life. The subordinated debt will mature towards the end of the concession and at the end of the concession the investment will be liquidated. The exit strategy is that investments will normally be held to liquidation at the end of the concession unless the Company sees an opportunity in the market to dispose of investments. John Laing Capital Management Limited (the Investment Adviser) and the JLIF Board regularly consider whether any disposals should be made.

(c) Going concern

The Directors, in their consideration of going concern have reviewed comprehensive cash flow forecasts prepared by the Investment Adviser, which are based on prudent market data and past experience and believe, based on those forecasts and an assessment of the Company's and the Group's committed banking facilities, that it is appropriate to prepare the financial statements of the Company on the going concern basis. In arriving at their conclusion that the Group has adequate financial resources, the Directors were mindful that the Group had unrestricted cash of £32.7 million (including £5.5 million for the Company) and a five-year banking facility (available for investment in new or existing projects and working capital) of £180.0 million, which expires in August 2020, and an accordion facility of £150.0 million which expires in June 2019.

As at 31 December 2016, there was the equivalent of £171.4 million drawn under the facility which was used to acquire investments in the year. All key financial covenants

are forecast to continue to be complied with. On 20 March 2017 the Company announced a proposed share issuance by way of a shareholder tap issue for up to approximately 89.8 million new ordinary shares. The proceeds of the issue will be used to repay most of the outstanding Sterling borrowings.

The Company, through its intermediate holding companies, holds investments in 62 infrastructure PPP project companies which yield annual interest, dividends and loan repayments. The cash flow yields from the projects cover the Group's expected cash flow requirements for overheads and targeted dividend distribution policy.

The Company and its intermediate holding companies have sufficient financial resources together with their PPP investments' public-sector long-term contracts across a range of infrastructure projects. As a consequence, the Directors consider that the Company and its intermediate holdings companies are well placed to manage its business risks successfully.

Certain risks and uncertainties, as detailed in note 18 have been considered by the Board. The Board has concluded that these do not represent a significant threat to the Company and the Group as the Group's income is generated from a portfolio of PPP concessions which are supported by government-backed cash flows and are forecast to cover the Group's committed costs.

The Directors, at the time of approving the financial statements, are satisfied that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future, a period of not less than 12 months from the date of this report. Thus, they continue to adopt the going concern basis of accounting in preparing these annual financial statements.

(d) Revenue recognition - Operating income

Operating income in the income statement represents the combination of the income from and the movement in the fair value of the Company's investment in JLIF Luxco 1 S.à.r.l. Refer to note 10 for details.

(e) Cash and cash equivalents

Cash and cash equivalents comprise cash balances, deposits held on call with banks and other short-term highly liquid deposits with original maturities of three months or less. Bank overdrafts that are repayable on demand are included as a component of cash and cash equivalents for the purpose of the cash flow statement. Deposits held with original maturities of greater than three months are included in other financial assets.

(f) Foreign currencies

The financial statements are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the financial statements, the results and financial position of the Company and the underlying fair valued financial position of JLIF Luxco 1 S.à.r.l. are expressed in Sterling, which is the functional currency of the Company, and the presentation currency for the financial statements.

In preparing the financial statements of the Company, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing on the dates of the transactions. At each Balance Sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

(g) Taxation

Under the current system of taxation in Guernsey, the Company is exempt from paying taxes on income, profits or capital gains. Dividend income and interest income received by the Group may be subject to withholding tax imposed in the country of origin of such income. The underlying project companies in which the Group invests provide for and pay taxation at the appropriate rates in the countries in which they operate.

(h) Financial instruments

Financial assets and financial liabilities are recognised on the Company's Statement of Financial Position when the Company becomes party to the contractual provisions of the instrument. Financial assets are derecognised when the contractual rights to the cash flows from the instrument expire or the asset is transferred and the transfer qualifies for derecognition in accordance with IAS 39 'Financial Instruments: Recognition and Measurement' and IFRS13 'Fair Value Measurement'.

i) Financial assets

The Company classifies its financial assets in the following categories: fair value through profit or loss and loans and receivables. The classification depends on the purpose for which the financial assets were acquired. The Company determines the classification of its financial assets at initial recognition.

a) Investments at fair value through profit or loss

Investments at fair value through profit or loss are designated upon initial recognition as financial assets at fair value through profit or loss. In these financial statements, investment at fair value through profit or loss is the fair value of the Company's direct subsidiary, JLIF Luxco 1 S.à.r.l., which comprises the fair value of JLIF Luxco 1 S.à.r.l., all the intermediate holding companies and the PPP investments.

JLIF Luxco 1 S.à.r.l. and the intermediate holding companies' net assets are mainly composed of cash and working capital and an outstanding loan balance of £171.4 million (comprising €59.0 million and £121.0 million) and are recognised at fair value which is equivalent to their net assets.

The Company's investment in JLIF Luxco 1 S.à.r.l. comprises both equity and a Profit Participating Agreement ("PPA"). Both elements are exposed to the same primary risk, being performance risk. This performance risk is taken into consideration when determining the discount rate applied to the forecast cash flows. In determining fair value the Board considered observable market transactions and have measured fair value using assumptions that market participants would use when pricing the asset including assumptions regarding risk. The PPA and equity are considered to have the same risk characteristics and as such the PPA and equity form a single class of financial instrument for the purposes of disclosure. The Company measures its investment as a single class of financial asset at fair value in accordance with IFRS 13 'Fair Value Measurement'.

b) Loans and receivables

Trade receivables, loans and other receivables that are non-derivative financial assets and that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and other receivables'. Loans and other receivables are measured at amortised cost using the effective interest method, less any impairment. They are included in current assets, except where maturities are greater than 12 months after the Balance Sheet date which are classified as Non-Current Assets. The Company's loans and receivables

comprise 'trade and other receivables' and 'cash and cash equivalents' in the Statement of Financial Position.

ii) Financial liabilities and equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.

a) Equity instruments - share capital and share premium

Ordinary shares are classified as equity. Costs directly attributable to the issue of new shares or associated with the establishment of the Company that would otherwise have been avoided are written off against the balance of the Share Premium Account.

b) Financial liabilities

Financial liabilities are classified as other financial liabilities, comprising of:

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

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

iii) Effective interest rate method

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

iv) Fair value estimation

The Company's investments at fair value are not traded in active markets.

Fair value of the PPP investments is calculated by discounting at an appropriate discount rate future cash flows expected to be received by the Group's intermediate holdings, from investments in both equity (dividends and equity redemptions) and subordinated loans (interest and repayments). The discount rates are relevant and in the range of those applied in the market for similar PPP investments. The basis of discount rates are long run average government bond rates adjusted for an appropriate premium to reflect PPP specific risk. Risk premia are then added to this adjusted base gilt rate depending on the phase of the project and any specific risks to which the project is exposed. The discount rates that have been applied to the PPP investments at 31 December 2016 were in the range 7.02% to 9.00% (31 December 2015: 7.19% to 8.46%). Refer to note 10 for details of the areas of estimation in the calculation of the fair value.

JLIF Luxco 1 S.à.r.l. and the intermediate holding companies' net assets are mainly composed of cash and working capital and loan balances and are recognised at fair value which is equivalent to their net assets.

(i) Segmental reporting

In the financial statements, the Company recognises one investment in its 100% owned subsidiary JLIF Luxco 1 S.à.r.l. The Directors consider and analyse the performance of the Company by considering the Group's main activity which is to invest into PPP investments through its intermediate holding companies. Information reported to the Company's Directors for the purposes of resource allocation and assessment of segment performance is focused on the sector risk associated within the Group. The Group has investments in the Health, Education, Justice & Emergency Services, Transport, Regeneration & Social Housing, Government Buildings and Street Lighting sectors and therefore these form the Group's reportable segments under IFRS

8. The Directors also consider and analyse the performance of the Group by Geography as the Group predominately invests in the UK, but also has investments in Continental Europe, North America as well as administration functions in Guernsey. Geographical segments therefore form part of the Group's reportable segments under IFRS 8.

(j) Statement of compliance

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

3. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

In the application of the Company's accounting policies, which are described in note 2, the Directors are required to make judgements, estimates and assumptions about the fair value of assets and liabilities that affect reported amounts.

Fair value of PPP investments

Fair values for those investments for which a market quote is not available are determined using the income approach which discounts the expected cash flows at the appropriate rate.

Estimates such as future cash flows are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. These cash flows also contain various assumptions, most significantly the inflation rate, deposit rate and tax rates used in forecasting the expected cash flows for each period. Sensitivities to these critical assumptions and their impact on the fair value of investments at fair value through profit and loss is disclosed in note 10.

In determining the discount rate, management applies their judgement in determining the appropriate risk-free rates and specific risks, and considering the evidence of recent transactions. Management deems the discount rate to be one of the most significant unobservable inputs and any change in it could have a material impact on the fair value of the investments. Underlying assumptions and discount rates are disclosed in note 10.

The Directors have satisfied themselves that the PPP investments share the same investment characteristics and as such constitute a single asset class for IFRS 7 disclosure purposes.

Fair value of intermediate holding companies

The Directors consider that the carrying value of the financial assets and financial liabilities in the underlying holding which are recorded at amortised cost in those financial statements are approximately equal to their fair value.

4. OPERATING SEGMENTS

Information reported to the Company's Board of Directors for the purposes of resource allocation and assessment of segment performance is focused on the sector risk associated within the Group. The Board reviews the Portfolio Valuation analysis by sector and the Directors, Investment Advisers and Asset Management teams monitor the business considering sector split. Currently the Company, via its 100% owned subsidiary JLIF Luxco 1 S.à.r.l. has investments in the Health, Education, Justice & Emergency Services, Transport, Regeneration & Social Housing, Government Buildings and Street Lighting sectors and therefore these form the Company's reportable segments under IFRS 8.

Segment results

The following is an analysis of the Company's operating income and results by reportable segment for the year ended 31 December 2016.

Year ended 31 December 2016
	Health £'000s	Education £'000s	Justice & Emergency Services £'000s	Transport £'000s	Regeneration & Social Housing £'000s	Government Buildings £'000s	Street Lighting £'000s	Unallocated £'000s	Total £'000s
Operating income	55,893	15,713	4,436	75,710	6,920	11,759	2,024	2,787	175,242
Profit/(loss) before tax	55,893	15,713	4,436	75,710	6,920	11,759	2,024	(12,026)	160,429
Reportable segment profit/(loss)	55,893	15,173	4,436	75,710	6,920	11,759	2,024	(12,026)	160,429

The following is analysis of the Company's operating income and results by reportable segment for the year ended 31 December 2015.

Year ended 31 December 2015
	Health £'000s	Education £'000s	Justice & Emergency Services £'000s	Transport £'000s	Regeneration & Social Housing £'000s	Government Buildings £'000s	Street Lighting £'000s	Unallocate d £'000s	Total £'000s
Operating income/(loss)	15,570	14,883	4,663	12,744	8,438	5,033	888	(3,860)	58,359
Profit/(loss) before tax	15,570	14,883	4,663	12,744	8,438	5,033	888	(15,253)	46,966
Reportable segment profit/(loss)	15,570	14,883	4,663	12,744	8,438	5,033	888	(15,253)	46,966

The unallocated segment above includes the Company's and subsidiaries' investment adviser fee, general overhead costs and fair value movement of intermediate holding companies.

No inter-segment income was earned in the year ended 31 December 2016 (2015: £nil).

The following is an analysis of the Company's assets and liabilities by reportable segment for the year ended 31 December 2016.

Year ended 31 December 2016
	Health £'000s	Education £'000s	Justice & Emergency Services £'000s	Transport £'000s	Regeneration & Social Housing £'000s	Government Buildings £'000s	Street Lighting £'000s	Unallocated £'000s	Total £'000s
Total assets	380,536	121,776	58,462	451,775	106,972	68,020	33,997	(137,689)	1,083,849
Total liabilities	-	-	-	-	-	-	-	(3,281)	(3,281)
Total net assets	380,536	121,776	58,462	451,775	106,972	68,020	33,997	(140,970)	1,080,568

The following is analysis of the Company's assets and liabilities by reportable segment for the year ended 31 December 2015.

Year ended 31 December 2015
	Health £'000s	Education £'000s	Justice & Emergency Services £'000s	Transport £'000s	Regeneration & Social Housing £'000s	Government Buildings £'000s	Street Lighting £'000s	Unallocated £'000s	Total £'000s
Total assets	354,460	145,700	52,393	125,042	93,018	65,169	34,282	15,760	885,824
Total liabilities	-	-	-	-	-	-	-	(2,728)	(2,728)
Total net assets	354,460	145,700	52,393	125,042	93,018	65,169	34,282	13,032	883,096

Information about major customers

The Company, via its subsidiaries, has one (31 December 2015: one) investment from which it receives more that 10% of the Company's operating income. The operating income from the major customer was £35.6 million (31 December 2015: £6.9 million) which was reported within the Transport (31 December 2015: Transport) segment. The Company has treated each PPP asset as a separate customer.

Analysis by geographical areas

The following is an analysis of the Group's operating income and results by geographical area:

Year ended 31 December 2016
	UK £'000s	Continental Europe £'000s	North America £'000s	Other - (incl Guernsey) £'000s	Total £'000s
Operating income	83,507	50,596	41,139	-	175,242
Profit/(loss) before tax	83,507	50,596	41,139	(14,813)	160,429
Profit/(loss)	83,507	50,596	41,139	(14,813)	160,249

Year ended 31 December 2015
	UK £'000s	Continental Europe £'000s	North America £'000s	Other - (incl Guernsey) £'000s	Total £'000s
Operating income/(loss)	61,181	748	(3,570)	-	58,359
Profit/(loss) before tax	61,181	748	(3,570)	(11,393)	46,966
Profit/(loss)	61,181	748	(3,570)	(11,393)	46,966

The operating income included in the above tables is derived from the distributions from PPP investments and the movements in fair value of investments. No inter-segment income was earned in the year ended 31 December 2016 (31 December 2015: £nil).

The following is an analysis of the Group's net assets by geographical area:

Year ended 31 December 2016
	UK £'000s	Continental Europe £'000s	North America £'000s	Other - (incl Guernsey) £'000s	Total £'000s
Total assets	683,549	211,357	183,268	5,675	1,083,849
Total liabilities	-	-	-	(3,281)	(3,281)
Total net assets	683,549	211,357	183,268	2,394	1,080,568

Year ended 31 December 2015
	UK £'000s	Continental Europe £'000s	North America £'000s	Other - (incl Guernsey) £'000s	Total £'000s
Total assets	774,659	35,254	73,219	2,692	885,824
Total liabilities	-	-	-	(2,728)	(2,728)
Total net assets	774,659	35,254	73,219	(36)	883,096

5. ADMINISTRATIVE EXPENSES

	2016 £'000s	2015 £'000s
Investment advisory fees & asset origination fee	12,479	9,573
Directors' fees and expenses	376	263
Administration fee	169	169
Other expenses	1,791	1,392
	14,815	11,397

The Company had no employees other than the Directors for the current year or preceding year. There was no Directors' remuneration for the year or preceding year other than directors' fees as detailed in note 17.

An amount of £145,000 (2015: £134,000) was paid to Deloitte LLP by the Company for the audit of the Company for the year ended 31 December 2016, which included £10,000 (2015:

£10,000) of other assurance work and £39,000 (2015: £38,000) in respect of non-audit services for the year ended 31 December 2016.

6. NET FINANCE INCOME

2016

£'000s

2015

£'000s

Bank interest income

Net finance income

7. TAX

The Company has obtained exempt status from income tax in Guernsey under the Income Tax (Exempt Bodies) (Guernsey) Ordinance, 1989. The income from its investments is therefore not subject to any further tax in Guernsey, although the underlying project companies in which the Group invests provide for and pay taxation at the appropriate rates in the countries in which they operate, for further details refer to note 10.

During 2016, the UK proposed new legislation which is broadly in line with a number of the actions from the OECD / G20's Base Erosion and Profit Shifting ("BEPS") initiative. Based on the most recent draft legislation (in December 2016), we believe that the current response, particularly in relation to the potential restriction of tax deductions for interest, no longer represents such a significant risk to JLIF. We do not expect the introduction of this legislation to have a material impact on the valuation of the Portfolio. While recognising that draft legislation is not enacted legislation, the risk has been downgraded in the Company's risk

register. We will continue to monitor proposed legislation, both in the UK and other territories in which JLIF operates, as governments continue to introduce new legislation aligned with the BEPS actions.

8. DIVIDENDS

	2016 £'000s	2015 £'000s
Amounts recognised as distributions to equity holders during the year:
Final dividend for the year ended 31 December 2015 of 3.41 pence (final dividend for the year ended 31 December 2014: 3.375 pence) per share	27,783	27,392
Interim dividend for the six months ended 30 June 2016 of 3.41 pence (six months ended 30 June 2015: 3.375 pence) per share	30,631	27,429
	58,414*	54,821*
Approved final dividend for the year ended 31 December 2016 of 3.48 pence (2015: 3.41 pence) per share	31,285	27,783

* Includes two tranches of scrip dividends of £3,765,000 with 3,091,698 new shares being issued (2015: £3,707,000 with 3,150,510 new shares issued).

The approved final dividend for the year ended 31 December 2016 is 3.48 pence per share, amounting to £31.3 million (2015: £27.8 million) and was approved by the Board on 17 March 2017 and is payable in May 2017. The dividend has not been included as a liability at 31 December 2016.

9. EARNINGS PER SHARE

The calculation of the basic and diluted earnings per share is based on the following data:

	2016 £'000s	2015 £'000s
Earnings
Earnings for the purposes of basic and diluted earnings per share being net profit attributable to owners of the Company	160,429	46,966
Number of shares
Weighted average number of ordinary shares for the purposes of basic and diluted earnings per share	885,116,345	812,680,563

The denominator for the purposes of calculating both basic and diluted earnings per share are the same as the Company had not issued any share options or other instruments that would cause dilution.

	Pence	Pence
Basic and diluted earnings per share	18.13	5.78

10. INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

1.

As set out in Note 1, the Company accounts for its interest in its 100% owned subsidiary JLIF Luxco 1 S.à.r.l. as an investment at fair value through profit or loss. JLIF Luxco 1 S.à.r.l. in turn owns investments in intermediate holding companies and in PPP projects.

The table below shows the Company's investment in JLIF Luxco 1 S.à.r.l. in the year as recorded in the Company Statement of Financial Position:

	2016 £'000s	2015 £'000s
Fair value of PPP investments	1,217,647	867,830
Fair value of intermediate holding companies	(139,472)	15,302
Fair value at 31 December	1,078,175	883,132

Reconciliation of movement in fair value of the portfolio of assets

The table below shows the movement in the fair value of the Company's portfolio of PPP investments. These investments are held through other intermediate holding companies. The table below also presents a reconciliation of the fair value of the asset portfolio to the Company balance sheet as at 31 December 2016, by incorporating the fair value of these intermediate holding companies.

	Portfolio Value 2016 £'000s	Cash and other FV in intermediate holdings £'000s	Total £'000s	Portfolio Value 2015 £'000s	Cash and other FV in intermedia te holdings £'000s	Total £'000s
Opening balance	867,830	15,302	883,132	864,887	20,787	885,674
Acquisitions and further loan and equity subscriptions	306,042	-	306,042	14,363	-	14,363
Disposals	(43,380)	-	(43,380)	-	-
Dividends received from PPP investments	(52,500)	52,500	-*	(36,782)	36,782	-*
Interest received from PPP investments	(34,423)	34,423	-*	(31,758)	31,758	-*
Loan and equity repayments	(7,577)	7,577	-	(9,558)	9,558	-
Movement in accrued interest	2,000	-	2,000	5,200	-	-
Discount rate movements	43,396	-	43,396*	7,462	-	7,462*
Foreign currency exchange rate movements	44,919	-	44,919*	(12,435)	-	(12,435)*
Growth in value	92,048	-	92,048*	66,814	-	66,814*
Other fee income	(708)	708	-*	(363)	363	-*
Administrative expenses	-	(5,121)	(5,121)*	-	(3,482)	(3,482)*
PPA Interest costs distributed	-	(116,019)	(116,019)	(73,261)	(73,261)
External borrowing	-	(154,393)	(154,393)	(17,000)	(17,000)
Difference in timing of capital movements between the Company and the intermediate holding companies	-	25,551	25,551	9,797	9,797
Fair value of the Company's Investment in JLIF Luxco 1 S.à.r.l. at 31 December	1,217,647	(139,472)	1,078,175	867,830	15,302	883,132

* Operating income for the year ended 31 December 2016 is £175.2 million (2015: £58.4 million).

The above balances represent the total net movements in the fair value of the Company's investment. The "Cash and other FV in intermediate holdings" balances reflect investment in, distributions from or movement in working capital and are not value generating.

The following table categorises the total net movement in fair value into its component factors:

2016

£'000s

2015

£'000s

Portfolio valuation at 1 January

867,830

864,887

Acquisitions and further loan and equity subscriptions	306,042	14,363
Disposals	(43,380)	-
Distributions	(93,208)21	(73,261)21
Growth due to discount rate	43,396	7,462
Growth / (Decline) due to exchange rate	44,919	(12,435)
Growth from discount rate unwind	79,20922	65,06422
Growth from valuation enhancements	12,83922	1,75022
Portfolio valuation at 31 December	1,217,647	867,830
Fair value of intermediate holding companies	(139,472)	15,302
Fair value of the Company's Investment in JLIF Luxco 1 S.à.r.l. at 31 December	1,078,175	883,132

21 Distributions include dividends, interest, loan stock and equity repayments (including movement in accrued interest) and other fees.

22 In 2016, the total growth in value of the Portfolio is £92,048,000 (2015: £66,814,000).

The fair value of the intermediate holding companies comprises cash of £27.2 million (2015:

£31.3 million), working capital balances of £4.7 million (2015: £1.0 million), offset by debt drawn under the JLIF Limited Partnership's revolving credit facility of £171.4 million (2015:

£17.0 million).

The Investment Adviser has carried out fair market valuations of the PPP investments as at 31 December 2016. The Directors have satisfied themselves as to the methodology used and the discount rates applied for the valuation of the PPP investments. The Directors have also obtained an independent opinion from a third party, with considerable expertise in valuing these type of investments, supporting the reasonableness of the Portfolio Value.

Investments in PPP projects are valued using a discounted cash flow methodology. The valuation techniques and methodologies have been applied consistently with the methodology used to value the Portfolio since launch in 2010. Discount rates applied range from 7.02% to 9.00% (weighted average 7.87%) (2015: 7.19% to 8.46% (weighted average

7.82%)).

The following long-term economic assumptions were used in the discounted cash flow valuation are detailed below:

Inflation assumptions

Country	Index	2016	2015
UK	RPI / RPIx	2.75%	2.75%
The Netherlands	CPI	2.00%	1.90%
Finland	MAKU / Elpsot	3.0% / 2.5%	3.0% / 2.5%
Spain	CPI	2.00%	n/a
Canada	CPI	2.10%	2.10%
USA	CPI	2.00%	n/a

Deposit rates

Country	Index	2016	2015
UK		2017 - 1.0%	2016 - 1.0%
		2018 - 1.5%	2017 - 2.0%
		2019 - 2.0%	2018 - 3.0%
	Thereafter 2.75%		Thereafter - 3.25%

Continental Europe	2017 - 1.0%	2016 - 1.0%
	2018 - 1.0%	2017 - 1.5%
	2019 - 1.5%	2018 - 2.5%
	2020 - 2.0%	Thereafter 2.5%
	Thereafter 2.5%
Canada & USA	2017 - 1.0%	2016 - 1.0%
	2018 - 1.5%	2017 - 2.0%
	2019 - 2.0%	2018 - 3.0%
	Thereafter 2.5%	Thereafter 3.0%

The prevailing Sterling exchange rate at 31 December was:

	2016	2015
Euro	1.1708	1.3592
Canadian Dollar	1.6565	2.0599
US Dollar	1.2329	1.4833

The UK Finance Bill enacted in September 2016 reduced the UK corporation tax rate from 18% to 17% from 1 April 2020. This reduction has been included in the valuation at 31 December 2016. The fair value of the Continental European, Canadian and US investments include assumed tax payments at the appropriate local rates which are 20% - 25%, 26% and 35%/9%23 respectively.

The fair value of the PPP investments would be an estimated £111.7 million higher or £96.7 million lower (2015: estimated £74.8 million higher or £65.1 million lower) if the discount rate used in the discounted cash flow analysis were to differ by an absolute 1% from that used in the fair value calculation. The weighted average discount rate for the PPP portfolio as at 31 December 2016 was 7.87% (2015: 7.82%).

23 Federal tax rate / Connecticut State tax rate.

The fair value of the PPP investments would be an estimated £52.5 million higher (2015:

£33.8 million higher) if the inflation rate used in the discounted cash flow analysis was an absolute 1% higher than that used in the fair value calculation, and £47.3 million lower (2015:

£30.8 million lower) if the inflation rate was an absolute 1% lower.

The fair value of the PPP investments would be an estimated £21.8 million higher or £21.5 million lower (2015: estimated £18.4 million higher or £18.3. million lower) if the deposit rates used in the discounted cash flow analysis were to differ by an absolute 1% from that used in the fair value calculation.

The fair value of the PPP investments would be an estimated £39.5 million higher or £35.8 million lower (2015: estimated £10.8 million higher or £9.9 million lower) if the exchange rates used in the discounted cash flow analysis were to differ by 10% from that used in the fair value calculation.

Details of PPP assets were as follows:

% holding 31 December 2016			% holding 31 December 2015
Investments (project name - see note 21 for further details)	Equity	Subordinated loan stock	Equity	Subordinated loan stock
Abbotsford Regional Hospital and Cancer Centre	100.0%	100.0%	100.0%	100.0%
A55 Holyhead to Llandegai DBFO	100.0%	100.0%	-	-
Avon and Somerset Courts	40.0%	40.0%	40.0%	40.0%
Barnet Lighting	100.0%	100.0%	100.0%	100.0%
Barnsley BSF	-	-	40.0%	40.0%
Barcelona Metro Stations L9T2	53.5%	53.5%	-	-
Barcelona Metro Stations L9T4	13.5%	13.5%	-	-
Bentilee Community Centre	100.0%	100.0%	100.0%	100.0%
Bexley Schools	100.0%	100.0%	100.0%	100.0%
Bristol BSF	37.5%	36.0%	37.5%	36.0%
Brockley Social Housing PFI	100.0%	100.0%	100.0%	100.0%
British Transport Police PPP	100.0%	100.0%	-	-
Camden Social Housing	50.0%	50.0%	50.0%	50.0%
Canning Town Social Housing	100.0%	100.0%	100.0%	100.0%
Cleveland Police Headquarters	50.0%	50.0%	50.0%	50.0%
Connecticut Service Stations	100.0%	100.0%	-	-
E18 Road, Finland	50.0%	50.0%	50.0%	50.0%
Edinburgh Schools	20.0%	20.0%	20.0%	20.0%
Enfield Street Lighting	100.0%	100.0%	100.0%	100.0%
Enfield Schools	100.0%	100.0%	100.0%	100.0%
Forth Valley Royal Hospital	100.0%	100.0%	100.0%	100.0%
Glasgow Schools	20.0%	20.0%	20.0%	20.0%
Greater Manchester Police Stations	27.1%	27.1%	27.1%	27.1%
Groningen Tax Office	40.0%	40.0%	40.0%	40.0%
Highlands School, Enfield	100.0%	100.0%	100.0%	100.0%
Islington I Social Housing	45.0%	45.0%	45.0%	45.0%
Islington II Social Housing	45.0%	45.0%	45.0%	45.0%
Intercity Express Programme Phase 1	6.0%	6.0%	-	-
Kelowna and Vernon Hospitals	50.0%	50.0%	50.0%	50.0%
Kingston Hospital	60.0%	60.0%	60.0%	60.0%
Kirklees Social Housing	100.0%	100.0%	100.0%	100.0%
Kromhout Barracks	40.0%	40.0%	40.0%	40.0%
Lambeth Street Lighting	100.0%	100.0%	100.0%	100.0%
Leeds Combined Secondary Schools	100.0%	100.0%	100.0%	100.0%
LUL Connect (CityLink)	33.5%	33.5%	33.5%	33.5%
M40 Motorway	50.0%	50.0%	50.0%	50.0%
M6/M74 Motorway, Scotland	11.0%	11.0%	11.0%	11.0%
Manchester Street Lighting	50.0%	50.0%	50.0%	50.0%
Metropolitan Police Training Centre (Gravesend)	27.1%	27.1%	27.1%	27.1%
Miles Platting Social Housing	50.0%	66.7%	50.0%	66.7%
Ministry of Defence Main Building	26.0%	26.0%	26.0%	26.0%
Newcastle Hospital	15.0%	15.0%	15.0%	15.0%
Newham Hospital	-	-	50.0%	50.0%
Newham Schools	100.0%	100.0%	100.0%	100.0%
North Birmingham Mental Health	100.0%	100.0%	100.0%	100.0%
North East Fire and Rescue Authority	100.0%	100.0%	100.0%	100.0%
North Staffordshire Hospital	75.0%	75.0%	75.0%	75.0%
North Swindon Schools	100.0%	100.0%	100.0%	100.0%
Northampton Mental Health	100.0%	100.0%	100.0%	100.0%
Oldham Social Housing	95.0%	95.0%	-	-
Peterborough Hospital	30.0%	30.0%	30.0%	30.0%

Peterborough Schools	100.0%	100.0%	100.0%	100.0%
Queen Elizabeth Hospital, Greenwich	27.5%	27.5%	27.5%	27.5%
Realise Health LIFT	60.0%	60.0%	60.0%	60.0%
Redcar and Cleveland Lighting	100.0%	100.0%	100.0%	100.0%
Roseberry Park Hospital	100.0%	100.0%	100.0%	100.0%
Sirhowy Way	100.0%	100.0%	100.0%	100.0%
South East London Police Stations	50.0%	50.0%	50.0%	50.0%
South Lanarkshire Schools	15.0%	15.0%	15.0%	15.0%
Surrey Street Lighting	50.0%	50.0%	50.0%	50.0%
Tunbridge Wells Hospital	37.5%	37.5%	37.5%	37.5%
Vancouver General Hospital	100.0%	100.0%	100.0%	100.0%
Wakefield Street Lighting	50.0%	50.0%	50.0%	50.0%
Walsall Street Lighting	100.0%	100.0%	100.0%	100.0%

On 27 January 2016, the Group completed the acquisition of a 40% stake in the Barcelona Metro Stations L9T2 project for approximately £85 million from Iridium Concesiones de Infraestructuras, a subsidiary of Grupo ACS.

On 29 February 2016, the Group acquired a 100% interest in the British Transport Police PPP project from a member of John Laing Group plc and The John Laing Pension Trust Limited, and on 30 May 2016 completed the purchase of a 95% interest in the Oldham Social Housing project from a member of John Laing Group plc for a combined amount of approximately £22 million.

On 1 June 2016 and 22 June 2016 respectively the Group sold to Equitix its entire 50% equity and subordinated debt interest in the Newham Hospital project and its entire 40% equity and sub-ordinated debt interest in the Barnsley BSF project, for a combined consideration of £43.4 million.

On 30 June 2016, the Group completed the acquisition of a 100% interest in Project Service LLC, the provider of 23 motorway service plazas in the State of Connecticut (USA), between New York and Boston. The interest was acquired from Carlyle Infrastructure Service Plazas,

L.P. (an affiliate of The Carlyle Group), Doctor's Associates Inc. (the parent company of Subway Restaurants) and Subcon, Inc. (a major Subway franchisee and developer) for approximately £72.5 million.

On 20 July 2016 the Group, completed a further acquisition of a 13.5% interest in the Barcelona Metro Stations L9T2 project and a 13.5% interest in the Barcelona Metro Stations L9T4 project for a total consideration of £50 million. The project was acquired from the co- shareholder Acsa, Obras e Infraestructuras, S.A.U. ("Acsa"), a member of the Sorigué group.

On the 23 December 2016, the Group completed the acquisition of a 100% interest in the A55 Holyhead to Llandegai DBFO project from a member of John Laing Group plc. The consideration for the acquisition was £28.3 million.

On the 30 December 2016, the Group completed the acquisition of a 6% interest in the Intercity Express Programme Phase 1 project from a member of John Laing Group plc for a consideration of £42.4 million.

There are no future loan stock or capital commitments on investments held at fair value through profit or loss.

11. TRADE AND OTHER RECEIVABLES

1.

	31 December 2016 £'000s	31 December 2015 £'000s
Other debtors	76	64
Prepayments and accrued income	87	95
Balance at 31 December	163	159

There were no overdue amounts included in trade and other receivables.

12. TRADE AND OTHER PAYABLES

	31 December 2016 £'000s	31 December 2015 £'000s
Accruals and deferred income	3,279	2,726
Other payables	2	2
Balance at 31 December	3,281	2,728

13. LOANS AND BORROWINGS

On 22 June 2016, the Company's indirect subsidiary, JLIF Limited Partnership agreed and signed the terms of an accordion facility of £150.0 million, thereby increasing the Group's borrowing capability to £330.0 million.

At 31 December 2016, the Company had no outstanding loans and borrowings (31 December 2015: £nil).

The Company's indirect subsidiary, JLIF Limited Partnership had a £171.4 million outstanding loan under its revolving credit facility (31 December 2015: £17.0 million) comprising €59.0 million and £121.0 million. The outstanding amount is included in the 'Investment at fair value through profit or loss' in the Company's Statement of Financial Position.

There were no other outstanding loans and borrowings (31 December 2015: £nil).

14. SHARE CAPITAL

Issued and fully paid

2016

£'000s

2015

£'000s

899,003,264 (31 December 2015: 814,751,471) ordinary shares of 0.01p each

The Company is authorised to issue an unlimited number of shares.

On 9 March 2016, the Company placed an additional 81,160,095 new ordinary shares via a shareholder tap issue, raising gross proceeds of £92.9 million, which was primarily used to repay debt drawn for the acquisition of the Barcelona Metro Stations L9T2 and British Transport Police PPP projects.

On 13 May 2016, 2,357,416 new Ordinary Shares of 0.01 pence each at an Issue Price of

119.40 pence were issued and fully paid as a scrip dividend alternative in lieu of cash for the final dividend in respect of the year ended 31 December 2015.

On 27 October 2016, 734,282 new Ordinary Shares of 0.01 pence each at an Issue Price of

129.36 pence were issued and fully paid as a scrip dividend alternative in lieu of cash for the interim dividend in respect of the year ended 31 December 2016.

All new shares issued rank pari passu with the original ordinary shares of 0.01 pence each in the capital of the Company including the right to receive all future dividends and distributions declared, made or paid.

At present, the Company has one class of ordinary shares which carry no right to fixed income.

15. SHARE PREMIUM ACCOUNT

	2016 £'000s	2015 £'000s
Opening balance	851,459	847,837
Premium arising on issue of equity shares	96,685	3,707
Expenses of issue of equity shares	(1,237)	(85)
Balance at 31 December	946,907	851,459

16. RETAINED EARNINGS

	2016 £'000s	2015 £'000s
Opening balance	31,556	39,411
Net profit for the year	160,429	46,966
Dividends paid (note 8)	(58,414)	(54,821)
Balance at 31 December	133,571	31,556

17. TRANSACTIONS WITH INVESTMENT ADVISER AND RELATED PARTIES

Details of transactions between the Company and its related parties are disclosed below. This note also details the terms of engagement by the Company with John Laing Capital Management Limited ("JLCM") as Investment Adviser and Operator of JLIF Limited Partnership ("the Limited Partnership") together with the details of further investment acquisitions from members of John Laing Group plc, of which JLCM is a wholly owned subsidiary.

JLCM's appointment as Investment Adviser is governed by an Investment Advisory Agreement (amended and restated on 12 November 2015) which may be terminated by either party giving one year's written notice or (subject to the payment to JLCM of certain termination fees) by the Company by giving JLCM six months' notice. The appointment may also be terminated if JLCM's appointment as Operator is terminated.

JLCM is also the Operator of JLIF Limited Partnership, the limited partnership through which the Group holds its investments, by JLIF (GP) Limited ("the General Partner"), General Partner of the partnership. The Operator and the General Partner may each terminate the

appointment of the Operator, by either party giving one year's written notice. Either the Operator or the General Partner may terminate the appointment of the Operator by written notice if the Investment Advisory Agreement is terminated in accordance with its terms.

JLCM is entitled to fees equal to: i) a Base fee of a) 1.1% per annum of the Adjusted Portfolio Value* of the Fund up to and including £500 million; b) 1.0% per annum of the Adjusted Portfolio Value of the Fund in excess of £500 million up to and including £1 billion; c) 0.9% per annum of the Adjusted Portfolio Value of the Fund in excess of £1 billion; and ii) an Asset Origination Fee of 0.75% of the purchase price of new investment capital acquired by the Fund that is not sourced from any of John Laing Group plc, its subsidiary undertakings, or funds or holdings managed by John Laing Group plc or any of its subsidiary undertakings.

The total Investment Adviser, Operator fee and asset origination fee charged to the Income Statement for the year was £12,479,000 (2015: £9,573,000) of which £2,877,000 remained payable at year end (2015: £2,453,000).

* Adjusted Portfolio Value is defined in the Investment Advisory Agreement as:

(a) the Fair Value of the Investment Portfolio; plus

(b) any cash owned by or held to the order of the Fund (the Consolidated Group); plus

(c) the aggregate amount of payments made to Shareholders by way of dividend in the period ending on the relevant Valuation Day, less

(i) any borrowings and any other liabilities of the Fund; and

(ii) any Uninvested Cash.

During the year, the Group acquired interests in the Oldham Social Housing Project and British Transport Police PPP project from a member of John Laing Group plc under an arm's length sale and purchase agreement. The Group paid approximately £22 million for these interests.

On the 23 December 2016, the Group completed the acquisition of a 100% interest in the A55 Holyhead to Llandegai DBFO project from a member of John Laing Group plc under an arm's length sale and purchase agreement, for a consideration of £28.3 million.

On the 30 December 2016, the Group completed the acquisition of a 6% indirect interest in the Intercity Express Programme Phase 1 project from a member of John Laing Group plc under an arm's length sale and purchase agreement, for a consideration of £42.4 million.

The Company has loans under a Profit Participating Agreement under which it received interest income from its direct subsidiary JLIF Luxco 1 S.à.r.l.

As at 31 December 2016 the Profit Participating Agreement loan balance was £933,872,000 (31 December 2015: £830,011,000) following the interest capitalisation of £12,361,000 in the year (2015: £23,413,000).

The balance of interest receivable increases from £12,361,000 on 31 December 2015 to

£44,319,000 as at 31 December 2016. This is due to the interest earned for the year ended 31 December 2016 of £116,019,000 (2015: £73,261,000), offset by the receipt of

£71,700,000 (2015: £60,900,000).

The Company accounts for the Profit Participating Agreement as part of its investment into JLIF Luxco 1 S.à.r.l. which has been fair valued.

The Directors of the Company, who are considered to be key management, received fees for their services. Further details are provided in the Report of the Directors on pages 45 to 48. Total fees paid in the year were £356,541 (2015: £253,376). The Directors were paid

£19,405 of expenses in the year (2015: £10,359). The interests of the Directors and their close family members in the shares of the Company as at 31 December 2016 and 31 December 2015 are detailed in the Report of Directors on pages 45 to 48.

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

The Directors and their close family members were paid dividends in the year of £15,175 (2015: £15,019).

18. FINANCIAL INSTRUMENTS CAPITAL RISK MANAGEMENT Capital management

The Company manages its capital to ensure it will be able to continue as a going concern while maximising the return to stakeholders. The capital structure of the Company consists of equity comprising issued capital, share premium account, reserves and retained earnings as detailed in notes 14 to 16.

The capital structure of the Group, which comprises the Company, its 100% owned subsidiary JLIF Luxco 1 S.à.r.l. and the intermediate holding companies, principally consists of a revolving credit facility (for which the Company is a guarantor), cash and cash equivalents and equity comprising issued capital, share premium account, reserves and retained earnings.

When required, the Company considers equity raising, mainly to finance acquisitions. Such proceeds from share issues are used to repay any bank debt drawn under the Company's indirect subsidiary's credit facility.

The Group aims to deliver its objective by investing available cash and using leverage whilst maintaining sufficient liquidity to meet ongoing expenses and dividend payments. The Group's Investment Policy is set out on pages 20 to 21 of the Annual Report.

Gearing ratio

The Group's Investment Adviser reviews the capital structure of the Company and the Group on a semi-annual basis. The Company and its subsidiaries intend to make prudent use of leverage (leverage in the context of the Group excluding senior debt in place at the PPP investment entities level) for financing acquisitions of investments and working capital purposes. Under the Company's articles, and in accordance with JLIF's Investment Policy, JLIF's outstanding borrowings, excluding intra-group borrowings and the debts of underlying PPP investments but including any financial guarantees to support subscription obligations, will be limited to 25% of JLIF's Total Assets. The Group may borrow in currencies other than Sterling as part of its currency hedging strategy.

As at the balance sheet date, the Company had no outstanding debt, however, as set out in note 2 (c), the Company's indirect subsidiary, JLIF Limited Partnership benefits from a revolving credit facility of £180 million and the accordion facility of £150 million of which the Company is a guarantor. As at 31 December 2016, £171.4 million was drawn under the facility (31 December 2015: £17 million).

FINANCIAL RISK MANAGEMENT

The Group's activities expose it to a variety of financial risks: market risk (including foreign currency exchange rate risk, interest rate risk and inflation risk), credit risk, liquidity risk, and capital risk. The Group's overall risk management programme focuses on the unpredictability

of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. The Group and its investment entities use derivative financial instruments to hedge certain risk exposures.

For the Company and the intermediate holding companies' subsidiaries, financial risks are managed by the Investment Adviser who operates within the Board approved policies. In relation to the Group's investment in project companies, due to the nature of the investments, certain financial risks (typically interest rate and inflation risks) are hedged at the inception of a project. The various types of financial risk are managed as follows:

Financial risk management - Company only

The Company accounts for its investments in its subsidiaries at fair value. To the extent there are changes as a result of the risks set out below, these impact the fair value of the Company's investments.

Capital risk

The Company has implemented an efficient financing structure that enables it to manage its capital effectively. The Company's capital structure comprises its equity only (refer to the Statement of Changes in Equity). As at 31 December 2016 the Company had no debt (2015:

£nil).

Liquidity risk

The Directors monitor the Company's liquidity requirements to ensure there is sufficient cash to meet the Company's operating needs. The Company adopts a prudent approach to liquidity management by maintaining sufficient cash and available committed facilities to meet its obligations. Due to the nature of its investments the timing of cash outflows is reasonably predictable and, therefore, is not a major risk to the Company.

The Company's liquidity management policy involves projecting cash flows and forecasting the level of liquid assets necessary to meet these.

The Company was in a net cash position and had no outstanding debt at the balance sheet date (2015: £nil).

Market risk - foreign currency exchange rate risk

The Company accounts for its investment in JLIF Luxco 1 S.à.r.l. at fair value in Sterling. The Company's investment in JLIF Luxco 1 S.à.r.l. and its subsidiaries have a small proportion of their expenses and net assets denominated in Euro. The Company considers that the currency exposure is minimal and as such does not require currency hedging.

Financial risk management - Company and subsidiaries

The following risks impact the Company's subsidiaries and in turn may impact the fair value of investments held by the Company.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group adopts a prudent approach to liquidity management by ensuring it maintains adequate cash and available banking facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of the financial assets and liabilities.

Due to the nature of its investments (PPP projects) the timing of cash outflows is reasonably predictable and, therefore, is not a major risk to the Group. The Group's liquidity management policy involves projecting cash flows in major currencies and assuming the level of liquid assets necessary to meet these.

Credit risk

Credit risk is the risk that a counterparty of the Company, its intermediate holding companies or its PPP project companies will default on the contractual obligations they entered into.

Credit risk is subsumed within the overall Company's performance risk.

The Company, its 100% owned direct subsidiary and the intermediate holding companies rely on the performance of their main counterparties where credit risk arises, mainly from the Group's investments in PPP projects.

The performance risk arises from the PPP investments' inability to pay the forecast distributions as the Group relies on its PPP investments project companies to perform adequately and return the expected yields.

Several factors could hinder this ability such as poor operational performance, exceptional expenditures, major maintenance overspend or an event that would affect the PPP project company's cover ratios. The Group's PPP investments are also dependent on the performance of their main operational contractors. The Group regularly monitors the contractors' concentration and financial strength.

The Directors and Investment Adviser regularly assess the returns forecast from PPP investments through the update of cash flow forecasts and by monitoring the operational and financial performance of these investments with regular performance meetings.

The Group's PPP investments' project companies receive regular, long-term, index-linked revenue from government departments, public-sector or local authority clients or directly from the public via real tolls, providing a stable and low-risk income stream.

Credit risk also arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions. The Group mitigates its risk on cash investments and derivative transactions by only transacting with banking counterparties with high credit ratings assigned by international credit rating agencies (a minimum of Standard and Poor's A-1).

The Directors believe that the Group is not significantly exposed to credit risk and that its investments' underlying risks are monitored and sufficiently mitigated for the investments to deliver the expected return to the Group.

The Directors have considered the above factors and the discount rate sensitivities disclosed in note 10 and does not consider it appropriate to present a separate analysis of credit risk.

Market risk - inflation risk

Each of the Group's PPP investments will typically have part of its revenue and costs linked to a specific inflation index at inception of the project. In most cases this creates a natural hedge, meaning a derivative does not need to be entered into in order to mitigate inflation risk. However, in a minority of cases where the investment has index-linked cash flows that fall outside of this natural hedge, the inflation risk is hedged using RPI inflation swaps. For a sensitivity analysis of investments at fair value through profit or loss, refer to note 10.

Market risk - foreign currency exchange rate risk

The Company has one investment in its direct subsidiary, JLIF Luxco 1 S.à.r.l., which has exposure to foreign currency exchange rate risk through holding Euro cash balances and contracting with service providers paid in Euro. The level of these balances and expenditures are marginal and do not pose a significant risk to the value recognised in the Company's Statement of Financial Position.

As at 31 December 2016, the fair value of the Company's investment in JLIF Luxco 1 S.à.r.l. includes nine (2015: six) overseas investments. The Company and its subsidiaries' foreign

currency exchange rate risk policy is not to hedge automatically on an individual project basis but to determine the total Group exposure to individual currencies.

At 31 December 2016, the Company's investment at fair value through profit or loss does not includes any foreign exchange forward contract (31 December 2015: £nil).

The Company and its subsidiaries are mainly exposed to fluctuations in the Euro, US Dollar and Canadian Dollar exchange rates. The amount of the Company's investment's fair value foreign currency denominated assets and liabilities at the reporting date was as follows:

Fair Value
	2016 £'000s	2015 £'000s
Canadian Dollar	91,651	73,219
Euro	211,357	35,254
US Dollar	91,617	-
	394,625	108,473

The following table details the Company's sensitivity to a 10% increase or decrease in Sterling against relevant foreign currencies. The sensitivity analysis includes only outstanding foreign currency-denominated monetary items fair valued within the Company's investment in JLIF Luxco 1 S.à.r.l. and reflects a 10% change in foreign currency exchange rates. A negative number below indicates a decrease in profit from operations where the relevant currency weakens by 10% against Sterling. For a 10% strengthening of the relevant currency against Sterling, there would be an approximately equal and opposite impact on profit from operations, and the negative balances below would be positive.

31 December 2016
Effect on operating profit and investments at fair value of relevant currency weakening by 10% against Sterling:	Profit before tax £'000s	Investments at fair value £'000s
Canadian Dollar	9,164	9,164
Euro	21,135	21,135
US Dollar	9,162	9,162
	39,462	39,462

31 December 2015
Effect on operating profit and investments at fair value of relevant currency weakening by 10% against Sterling:	Profit before tax £'000s	Investments at fair value £'000s
Canadian Dollar	7,322	7,322
Euro	3,525	3,525
	10,847	10,847

While JLIF's stated policy since launch in November 2010 has been not to hedge the balance sheet value of its non-Sterling assets, JLIF does make prudent use of foreign exchange hedging instruments to hedge non-Sterling cash flows, typically looking out up to 18 months. Furthermore, JLIF's investment policy requires that at least 50% of the Portfolio be UK-based at any time. JLIF is also able to draw on its revolving credit facility in the local currency and repay borrowings in the same currency from its portfolio of assets denominated in the same currency, thereby creating a natural hedge.

Market risk - interest rate risk

The Group's interest rate risk arises on the credit facility borrowings and floating rate deposits. Borrowings issued at variable rates expose the Group to variability of interest payment cash flows.

Each PPP investment hedges its interest rate risk at the inception of a project. This will either be done by issuing a fixed rate bond or, if the project is bank financed, with fixed rate bank debt or variable rate debt which will be swapped into fixed rate by the use of interest rate swaps.

The fluctuations in interest rates impact the return from floating rate deposits and hence the income from investments at fair value through profit or loss. A 1% increase or decrease represents the Directors' assessment of the reasonable possible change in interest rates.

The Group was in a net cash position and had outstanding debt of £171.4 million at the balance sheet date (31 December 2015: net cash position, £17.0 million outstanding debt). The interest rate sensitivity of the Group's assets and liabilities does not have a material impact.

For a sensitivity analysis of investments at fair value through profit or loss, refer to note 10.

The Company held the following financial instruments at fair value at 31 December 2016. There have been no transfers of financial instruments between levels of the fair value hierarchy. There are no non-recurring fair value measurements.

Financial instruments by category

31 December 2016
	Cash and bank balances £'000s	Loans and receivables £'000s	Financial assets at FVTPL* £'000s	Financial liabilities at amortised cost £'000s	Total £'000s
Levels	1	1	3	1
Non-current assets
Investments at fair value through profit or loss	-	-	1,078,175	-	1,078,175
Current assets
Trade and other receivables	-	163	-	-	163
Cash and cash equivalents	5,511	-	-	-	5,511
Total financial assets	5,511	163	1,078,175	-	1,083,849
Current liabilities
Trade and other payables	-	-	-	(3,281)	(3,281)
Total financial liabilities	-	-	-	(3,281)	(3,281)
Net financial instruments	5,511	163	1,078,175	(3,281)	1,080,568

31 December 2015

Cash and

bank balances

£'000s

Loans and receivables

£'000s

Financial assets at FVTPL*

£'000s

Financial liabilities at amortised

cost

£'000s

Total

£'000s

Levels	1	1	3	1
Non-current assets
Investments at fair value through profit or loss	-	-	883,132	-	883,132
Current assets
Trade and other receivables	-	159	-	-	159
Cash and cash equivalents	2,533	-	-	-	2,533
Total financial assets	2,533	159	883,132	-	885,824
Current liabilities
Trade and other payables	-	-	-	(2,728)	(2,728)
Total financial liabilities	-	-	-	(2,728)	(2,728)
Net financial instruments	2,533	159	883,132	(2,728)	883,096

* FVTPL = Fair value through profit or loss

The above table provides an analysis of financial instruments that are measured subsequent to their initial recognition at fair value as follows:

• Level 1: fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2: fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3: fair value measurements are those derived from valuation techniques that include inputs to the asset or liability that are not based on observable market data (unobservable inputs).

There were no Level 2 assets or liabilities during the year (2015: none). There were no transfers between Level 1 and 2, Level 1 and 3 or Level 2 and 3 during the year (2015: none).

In the table above, financial instruments are held at carrying value as an approximation to fair value unless stated otherwise.

Reconciliation of Level 3 fair value measurement of financial assets and liabilities

An analysis of the movement between opening to closing balances of the investments at fair value through profit or loss is given in note 10.

The investments at fair value through profit or loss, whose fair values include the use of Level 3 inputs, include the fair value of the Company's 100% owned subsidiary JLIF Luxco 1 S.à.r.l., the intermediate holding companies and the Group's PPP investments.

The fair value of the Company's direct subsidiary and the intermediate holding companies mainly comprises cash and working capital and an outstanding loan balance of £171.4 million. The fair values of these companies are equivalent to their Net Assets.

The Group's PPP investments are valued by discounting future cash flows from investments in both equity (dividends and equity redemptions) and subordinated loans (interest and repayments) to the Group at an appropriate discount rate. The basis of each discount rate, which is a weighted average cost of capital, is the long run average government bond rates

adjusted by an appropriate premium to reflect PPP specific risk, phase of the PPP project and counterparty credit risk. The weighted average discount rate applied was 7.87% (31 December 2015: 7.82%). The discount rate is considered the most significant unobservable input through which an increase or decrease would have a material impact on the fair value of the investments at fair value through profit or loss. An absolute increase of 1% in the discount rate would cause a decrease in fair value of the PPP investments of £96.7 million (31 December 2015: £65.1 million). An absolute decrease of 1% could cause an increase in fair value of the PPP investments of £111.7 million (31 December 2015: £74.8 million).

For a sensitivity analysis of Financial Assets at fair value through profit or loss, refer to note 10.

The Directors consider that the carrying value amounts of financial assets and financial liabilities recorded at amortised cost in the financial statements are approximately equal to their fair values.

Foreign currency and interest rate profile of financial liabilities

The Company's financial liabilities at 31 December 2016 were £3.3 million (2015: £2.7 million). These principally comprise accruals.

31 December 2016 Financial liabilities
		Floating rate £'000s	Fixed rate £'000s	Non- interest bearing £'000s	Total £'000s
	Currency			Non- interest bearing £'000s
Trade and other payables < 1 year	- Sterling	-	-	3,281	3,281
Total		-	-	3,281	3,281
31 December 2015 Financial liabilities
		Floating rate £'000s	Fixed rate £'000s	Non-interest bearing £'000s	Total £'000s
	Currency	Floating rate £'000s	Fixed rate £'000s	Non-interest bearing £'000s
Trade and other payables < 1 year	- Sterling	-	-	2,728	2,728
Total		-	-	2,728	2,728

19. GUARANTEES AND OTHER COMMITMENTS

The Company has provided a guarantee under the JLIF Limited Partnership's £180 million multicurrency revolving credit facility which expires in August 2020, and under the accordion facility of £150 million which expires in June 2019. As at 31 December 2016, £171.4 million was drawn on the facility. The fair value of the guarantee is considered to be immaterial to the Company accounts as the probability of the guarantee being called upon is considered to be extremely unlikely. In making this assessment, consideration has been given to the proximity of the current and forecast metrics to default.

20. EVENTS AFTER BALANCE SHEET DATE

On 20 March 2017 the Company announced a proposed share issuance by way of a shareholder tap issue for up to approximately 89.8 million new ordinary shares, the maximum

that can be issued via a shareholder tap issue. The proceeds of the issue will be used to repay most of the outstanding Sterling-borrowings.

21. DISCLOSURE - SERVICE CONCESSION ARRANGEMENTS

The Group holds investments in 62 service concession arrangements in the Health, Education, Justice and Emergency Services, Government Buildings, Regeneration and Social Housing, Transport and Street Lighting sectors. The concessions vary on the obligations required, but typically require the construction and operation of an asset during the concession period. The concession may require the acquisition or replacement of an existing asset or the construction of a new asset. The operation of the asset may include the provision of facilities management services such as cleaning, catering, caretaking, and major maintenance. As at 31 December 2016, for all but four (2015: all but two) of the Company's investments, the residual interest will be transferred to the relevant government/public authorities at the end of each concession term. For these four (2015: two) concessions the head lease will be retained by the concession provider at the end of the concession period. The value of these head leases is not considered to be material. As at 31 December 2016 all of the service concessions apart from one (Intercity Express Programme phase 1) were fully operational (31 December 2015: all).

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

Period of concession
Sector	Company name	Project name	% owned	Short description of concession arrangement	Start date	End date	No. years	Project capex
Health
	Meridian Hospital Company Limited	Queen Elizabeth	27.5%	Design, build, finance and operate new hospital in the	08-Jul- 1998	31-Oct- 2031	33	Construction of hospital costing
		Hospital, Greenwich		Greenwich area of London.				£96 million.
	Prime Care Solutions (Kingston) Limited	Kingston Hospital	60%	Design, build, finance and operate extension to Kingston Hospital.	23-Nov- 2004	22-Jul- 2036	32	Construction of extension and temporary car park costing £29 million.
	AHA Access Health Abbotsford Limited	Abbotsford Regional Hospital and Cancer Centre	100%	Design, build, finance and operate new hospital in Abbotsford, British Columbia, Canada.	07-Dec- 2004	06-May- 2038	33	Construction of hospital costing CAN$355 million.
	AHV Access Health Vancouver Limited	Vancouver General Hospital	100%	Design, build, finance and operate new outpatient facility in Vancouver, British Columbia, Canada.	02-Sep- 2004	18-Aug- 2036	32	Construction of outpatient facility Costing CAN$95 million.
	Forth Health Limited	Forth Valley Royal Hospital	100%	Design, build, finance and operate new hospital in Larbert.	04-May- 2007	31-Mar- 2042	35	Construction of hospital

							costing £293 million.
Three Valleys Healthcare Limited	Roseberry Park Hospital	100%	Design, build, finance and operate a mental health facility in Middlesbrough.	18-Dec- 2007	23-Mar- 2040	32	Construction of hospital costing £75 million.
Healthcare Support (Newcastle) Limited	Newcastle Hospital	15%	Design, build, finance and operate hospitals in Newcastle.	04-May- 2005	03-May- 2043	38	Refurbishme nt and construction at the Freeman Hospital and Royal Victoria Infirmary and construction of a multi-storey car park for the Freeman Hospital, costing £295 million.
Kent and East Sussex Weald Hospital Limited	Tunbridge Wells Hospital	37.5%	Finance, constriction, operation and maintenance of District General hospital in Tunbridge Wells	01-Mar- 2008	25-Sep- 2042	35	Construction of hospital costing £232 million.
Peterborough (Progress Health) plc	Peterborough Hospital	30%	Design, build, finance and operate three healthcare premises in Peterborough.	31-Jan- 2007	31-Oct- 2042	36	Construction of three hospitals costing £347 million.
IIC (C&T) Limited	Realise Health LIFT (Colchester)	60%	Design, build, finance and operate a primary care centre in Colchester and a medical centre in Harwich	31-Jul- 2004	30-Apr- 2031	27	Construction of two medical buildings costing £39 million.
IIC Northampton Limited	Northampton Mental Health	100%	Design, build, finance and operate a mental health facility in Northampton	31-Oct- 2007	31-Oct- 2037	30	Construction of hospital costing £39 million.
Infusion Health KVH General Partnership	Kelowna & Vernon Hospitals	50%	Design, build, finance and operate three new healthcare premises in Kelowna and Vernon, Canada.	31-Aug- 2008	31-Aug- 2042		Construction of two hospitals costing CAN$342 million.
Healthcare Support (North Staffs) Limited	North Staffordshire Hospital	75%	Design, build, finance and operate new acute hospital at the City General site and a new community hospital in Stoke-on-Trent.	30-Jun- 2007	31-Aug- 2044	37	Construction of two hospitals costing £306 million.
Healthcare Support (Erdington) Limited	North Birmingham Mental Health Hospital	100%	Design, build, finance and operate a 128 bed mental health facility for the North Birmingham Mental Health Trust.	22-Mar- 2002	22-Mar- 2037	35	Construction comprised a mix of new build and refurbishme nt of existing Trust estates costing £16.5 million.

Education

3ED Glasgow Limited

Glasgow Schools

20%

Design, build, finance and operate 29 secondary schools and one primary school in Glasgow.

26-Jul-

2000

30-Jun-

2030

Major refurbishme nt and extension of 18 schools -

£135 million. Construction of 11 new secondary schools and one new primary school -

£90 million.

InspirED Education (South Lanarkshire) plc

South Lanarkshire Schools

15%

Design, build, finance and operate 15 new secondary schools and two refurbishments in the South Lanarkshire area.

28-Jun-

2006

30-Sep-

2039

Construction and refurbishme nt costing

£320 million.

Education Support (Swindon) Limited

North Swindon Schools

100%

Design, build, finance and operate seven new schools in Swindon.

01-Apr-

2005

30-Jun-

2032

Construction costing

£70 million.

Education Support (Enfield) Limited

Highlands School, Enfield

100%

Design, build, finance and operate one secondary school in Enfield.

25-Feb-

1999

31-Aug-

2025

Construction

costing £17 million.

Education Support (Newham) Limited

Newham Schools

100%

Design, build, finance and operate one secondary school in Newham.

24-Sep-

2003

31-Aug-

2029

Construction costing £22 million.

Education Support (Enfield 2) Limited

Enfield Schools

100%

Design, build, finance and operate three schools in Enfield, two primary and one secondary.

24-Sep-

2003

31-Aug-

2029

Construction costing £27 million.

The Edinburgh School Partnership Limited

Edinburgh Schools

20%

Design, build, finance and operate 17 schools in total, ten new primaries, two new secondary schools, three refurbished secondary schools and two special schools.

15-Nov-

2001

30-Sep-

2033

Refurbishme nt of three secondary schools and one special school - £25 million. New build of ten primary schools, two secondary and one special school -£82 million.

Investors in the Community (Bexley Schools) Limited

Bexley Schools

100%

Design, build, finance and operate two new secondary schools in Bexley, Kent.

20-Apr-

2004

31-Oct-

2030

New schools construction costing £33 million.

Bristol PFI Limited

Bristol BSF

37.5%

Design, build, finance and operate four new secondary schools in Bristol.

31-Jul-

2006

31-Aug-

2034

New schools construction costing

£132 million.

IIC (Leeds Schools) Limited

Leeds Combined Secondary

100%

Design, build, finance and operate six new secondary schools in Leeds.

30-Apr-

2005

31-Jul-

2033

Construction of

six new secondary schools costing

£115 million.

IIC By Education

(Peterborough Schools) Limited

Peterborough

Schools

100%

Design, build, finance and

operate three new secondary

schools in Peterborough.

31-Jul-

2006

30-Sep-

2037

Construction

three new secondary schools costing

£55 million.

Justice and Emergency Services

Service Support (Avon & Somerset) Limited

Avon & Somerset Courts

40%

Design, build, finance and operate two new courts in Worle and Bristol, offices,

a podium and a bus station.

23-Aug-

2004

26-Oct-

2034

Construction costing £43 million.

Services Support (Gravesend) Limited

Metropolitan Specialist Police Training Centre

27.1%

Design, build, finance and operate firearms training facility in Gravesend.

20-Apr-

2001

10-Feb-

2028

New training facility

and refurbishme nt

of accommodat ion costing

£40 million.

Services Support Manchester (Limited)

Greater Manchester Police Stations

27.1%

Design, build, finance and operate 16 new police stations in Manchester.

04-Dec-

2002

31-Mar-

2030

Construction costing £82 million.

Cleveland FM Services Limited

Cleveland Police Station & HQ

50%

Design, build, finance and operate five police stations.

31-Mar-

2005

31-Jan-

2032

Construction costing £26 million.

Collaborative Services Support NE Limited

North East Fire & Rescue

100%

Design, construction, finance and operation of five community fire stations in North East England.

26-Jun-

2009

16-May-

2035

Construction costing £27 million.

Services Support (SEL) Limited

South East London

Police Stations

50%

Design, build, finance and operate four police stations.

20-Oct-

2001

30-Jan-

2029

Construction costing £80 million.

Services Support (BTP) Limited

West Ham and Tottenham Court Road Police Stations

100%

Design, build, finance and operate two police stations, and operate and maintain five existing stations

29-Mar-

1999

28-Feb-

2022

Construction costing £4 million.

Government Buildings

Modus Services Limited

MOD Main Building

26%

Design, build, finance and operate Ministry of Defence offices in Whitehall.

04-May-

2000

03-May-

2030

Refurbishme nt of

existing buildings costing £416 million

Komfort BV

Kromhout Barracks PPP Project

40%

Design, build, finance and operate Dutch Ministry of Defence HQ in Utrecht.

01-Jul-

2008

30-Sep-

2035

Total expenditure of €205 million.

Duo2 BV

Groningen Tax Office Project

40%

Design, build, finance and operate the Information Management and Tax Authority Office

26-Jun-

2008

28-Feb-

2031

Total Expenditure of

€135 million.

Regeneration and Social Housing

Regenter LCEP Limited

Canning Town Social Housing

100%

Refurbish, finance and operate council housing in Newham.

03-Jun-

2005

31-May-

2035

Refurbishme nt of

existing buildings costing £20 million.

Regenter B3 Limited

Brockley Social Housing PPP

100%

Refurbish, finance and operate council housing in Brockley.

04-Jun-

2007

30-Apr-

2027

Refurbishme nt of

existing buildings costing £74 million.

Regenter Bentilee District Centre Limited

Bentilee Hub Community Centre

100%

Design, build, finance and operate joint services community facility.

01-Feb-

2005

31-Jan-

2032

Construction costing £8 million.

Partners for Improvement in Camden Limited

Camden Social Housing

50%

Refurbish, finance and maintain council housing in five tower blocks in Camden.

02-May-

2006

02-May-

2021

Construction Costing £69 million.

Partners for Improvement in Islington Limited

Islington Social Housing I

45%

Refurbish, finance and maintain in excess of 2300 council housing properties in Islington

12-May-

2003

31-Mar-

2033

Construction costing

£39 million.

Partners for Improvement in Islington 2 Limited

Islington Social Housing II

45%

Refurbish, finance and maintain in excess of 4000 council housing properties in Islington

15-Sep-

2006

07-Jul-

2022

Construction costing

£151 million.

Renaissance Miles Platting Limited

Miles Platting Social Housing

50%

Refurbish, maintain and manage in excess of 1500 social housing properties in Manchester.

31-May-

2007

31-Mar-

2037

Refurbishme nt of existing buildings costing £89 million in Manchester.

JLW Excellent Homes for Life Limited

Kirklees Social Housing

100%

Design, build, finance and operate 466 social housing units.

20-Dec-

2011

30-Jun-

2034

Construction costing £70 million.

Inspiral Oldham Limited

Oldham Social Housing

95%

Design, regenerate, finance and operate 633 social housing units.

30-Nov-

2011

30-Nov-

2036

Construction costing £70 million.

Transport

Sirhowy Enterprise Way Limited

Sirhowy Way

100%

Design, build, finance and operate improvements to the A4048/A472 Strategic Highway Network between the north of

Blackwood and the east of Ponllanfraith, South Wales.

21-Jan-

2004

20-Jan-

2034

Upgrade and maintain part of existing road and build new carriageway at a cost of

£44 million.

Tiehytio Ykkostie Oy

E18 Road

50%

Design, build, finance and operate the E18 Muurla- Lohja Motorway Project in Finland.

27-Oct-

2005

15-Nov-

2029

Upgrade and maintain existing road at a cost of

€327 million

UK Highways M40 Limited	M40 Motorway (UK)	50%	Design, build, finance and operate the M40 Motorway.	08-Oct- 1996	07-Dec- 2026	30	Upgrade and maintain existing motorway at a cost of £90 million.
Autolink Concessionaires (M6) plc	M6/M74 Motorway (Scotland)	11%	Design, build, finance and operate project to maintain 90 km of the M6 and M74 (from Gretna, on the Scottish border to Millbank, 30 miles south of Glasgow). Project includes the upgrade of the A74 to a 29 km stretch of dual three lane motorway.	24-Apr- 1997	29-Jul- 2027	30	Upgrade and maintain existing motorway costing £95 million.
Citylink Telecommunicatio ns Limited	LUL Connect	33.5%	Upgrade of London Underground's existing radio and telecommunications systems and implementing and operating a new system.	21-Nov- 1999	21-Nov- 2019	20	Maintain the existing radio and communicati ons systems and replace at a cost of £198 million.
Línia Nou Tram Dos, S.A.	Barcelona Metro Stations L9T2	53.5%	Design, build, finance, operate and maintain 15 metro stations along Section II of the Line 9 metro system in Barcelona, Spain.	26-Nov- 2010	15-Oct- 2042	32	Upgrade and maintain 15 metro stations costing €734 million
Línia Nou Tram Quatre, S.A.	Barcelona Metro Stations L9T4	13.5%	Design, construction, operation and maintenance of 13 metro stations along Line 9, Section IV of the Barcelona Metro system.	15-Dec- 2008	30-Sept- 2040	32	Upgrade and maintain 13 metro stations costing €605 million.
Project Service LLC	Connecticut Service Stations	100%	Renovation (completed in August 2015, operation and maintenance of 23 highway service areas.	7-Dec- 2009	16-Dec- 2044	35	Upgrade and maintain 23 highway service areas costing $150 million.
UK Highways A55 Limited	A55 Holyhead to Liandegai DBFO	100%	Design, construction, operation and maintenance of a 31km section of the A55, O&M of 9km of local roads and maintenance of two historic bridges on the Isle of Anglesey crossing the Menai Strait.	16-Dec- 2008	23-Dec- 2028	30	Construction costing £101million.
Agility Trains West Limited	Intercity Express Programme Phase 1	6%	Design, manufacture and maintenance of high speed trains and associated despot for the Great West Mainline route between Paddington and Swansea.	24-Jul- 2012	30-Nov- 2044	28	Construction costing £265 million.
Street Lighting

Amey Highways

Lighting (Manchester) Limited

Manchester

Street Lighting

50%

Installation and maintenance

of street lighting

31-Mar-

2004

30-Jun-

2029

Replacemen

t column

programme costing £33 million.

Amey Highways Lighting (Wakefield) Limited

Wakefield Street Lighting

50%

Installation and maintenance of street lighting

23-Dec-

2003

02-Feb-

2029

Replacemen t

column

programme costing £26 million.

Walsall Public Lighting Limited

Walsall

Street Lighting

100%

Installation and maintenance of street lighting.

28-Mar-

2002

31-Mar-

2028

Replacemen t

column programme costing £16 million.

Barnet Lighting Services Limited

Barnet

Street Lighting

100%

Installation and maintenance of street lighting.

30-Apr-

2006

30-Apr-

2031

Replacemen t

column programme costing £26 million.

Lambeth Lighting Services Limited

Lambeth Street Lighting

100%

Installation and maintenance of street lighting.

30-Nov-

2005

31-Dec-

2029

Replacemen t

column programme costing £16 million.

Enfield Lighting Services

Enfield

Street Lighting

100%

Installation and maintenance of street lighting.

30-Apr-

2006

30-Apr-

2031

Replacemen t

column programme costing £27 million.

Redcar & Cleveland Lighting Services

Redcar & Cleveland Street Lighting

100%

Installation and maintenance of street lighting.

31-Aug-

2007

31-Dec-

2029

Replacemen t

column programme costing £22 million.

Surrey Lighting Services Limited

Surrey Street Lighting

50%

Installation and maintenance of street lighting.

27-Nov-

2009

28-Feb-

2035

Replacemen t

column programme costing £79

million.

22. PRINCIPAL SUBSIDIARIES

Details of the Company's subsidiaries at 31 December 2016 are as follows:

Name	Category	Place of Incorporation	Proportion of ownership interest	Proportion of voting power held
JLIF Luxco 1 S.à.r.l.	Intermediate holding	Luxembourg	100%	100%
JLIF Luxco 2 S.à.r.l.	Intermediate holding	Luxembourg	100%	100%
JLIF Pyrenees S.à.r.l.	Intermediate holding	Luxembourg	100%	100%

JLIF Pyrenees (GP) S.à.r.l.	Intermediate holding	Luxembourg	100%	100%
JLIF Limited Partnership24	Intermediate holding	United Kingdom	100%	100%
JLIF (GP) Limited25	Intermediate holding	United Kingdom	100%	100%
Palio (No 1) Limited	Intermediate holding	United Kingdom	100%	100%
Palio (No 2) Limited	Intermediate holding	United Kingdom	100%	100%
Palio (No 3) Limited	Intermediate holding	United Kingdom	100%	100%
Palio (No 5) Limited	Intermediate holding	United Kingdom	100%	100%
Palio (No 6) Limited	Intermediate holding	United Kingdom	100%	100%
Palio (No 7) Limited	Intermediate holding	United Kingdom	100%	100%
Palio (No 8) Limited	Intermediate holding	United Kingdom	100%	100%
Palio (No 9) Limited	Intermediate holding	United Kingdom	100%	100%
Palio (No 10) Limited	Intermediate holding	United Kingdom	100%	100%
Palio (No 11) Limited	Intermediate holding	United Kingdom	100%	100%
Palio (No 12) Limited	Intermediate holding	United Kingdom	100%	100%
Palio (No 13) Limited	Intermediate holding	United Kingdom	100%	100%
Palio (No 14) Limited	Intermediate holding	United Kingdom	100%	100%
Palio (No 15) Limited	Intermediate holding	United Kingdom	100%	100%
Palio (No 16) Limited	Intermediate holding	United Kingdom	100%	100%
Palio (No 17) Limited	Intermediate holding	United Kingdom	100%	100%
Palio (No 18) Limited	Intermediate holding	United Kingdom	100%	100%
Palio (No 19) Limited	Intermediate holding	United Kingdom	100%	100%
JLIF Holdings (Pembury Hospital) Limited	Intermediate holding	United Kingdom	100%	100%
JLIF Investments Limited	Intermediate holding	United Kingdom	100%	100%
JLIF Holdings (Justice and Emergency Services) Limited	Intermediate holding	United Kingdom	100%	100%
JLIF Holdings (Regeneration and Social Housing) Limited	Intermediate holding	United Kingdom	100%	100%
JLIF Holdings (Street Lighting) Limited	Intermediate holding	United Kingdom	100%	100%
JLIF Holdings (Peterborough Hospital) Limited	Intermediate holding	United Kingdom	100%	100%
JLIF Holdings (Project Service) UK Limited	Intermediate holding	United Kingdom	100%	100%
JLIF Holdings (Project Service)	Operating	USA	100%	100%

US Inc	Subsidiary
Project Service LLC	Operating Subsidiary	USA	100%	100%
JLIF Holdings (Barcelona Metro) Limited	Intermediate holding	United Kingdom	100%	100%
Servicios, Transportes y Equipamientos Públicos Dos, S.L	Operating Subsidiary	Spain	80%	80%
Linea Nou Tram Dos S.A,.	Operating Subsidiary	Spain	53.5%	53.5%
Linea Nou Mainteniment S.L,	Operating Subsidiary	Spain	53.5%	53.5%
Linea Nou Tram Quatre S.A,	Operating Subsidiary	Spain	13.5%	13.5%
JLIF (Holdings) A55 Limited	Intermediate holding	United Kingdom	100%	100%
UK Highways A55 (Holdings) Limited	Operating Subsidiary	United Kingdom	100%	100%
UK Highways A55 Limited	Operating Subsidiary	United Kingdom	100%	100%
Louise Co Limited	Intermediate holding	United Kingdom	100%	100%
JLIF Holdings (AWT) Limited	Intermediate holding	United Kingdom	100%	100%
AHA Access Health Abbotsford Limited	Operating Subsidiary	Canada	100%	100%
AHA Holdings Abbotsford Limited	Operating Subsidiary	Canada	100%	100%
AHV Access Health Vancouver Limited	Operating Subsidiary	Canada	100%	100%
AHV Holdings Vancouver Limited	Operating Subsidiary	Canada	100%	100%
Barnet Lighting Services Limited**	Operating Subsidiary	United Kingdom	100%	100%
Collaborative Services Support (NE) Holdings Limited	Operating Subsidiary	United Kingdom	100%	100%
Collaborative Services Support NE Limited	Operating Subsidiary	United Kingdom	100%	100%
Education Support (Enfield 2) Holdings Limited	Operating Subsidiary	United Kingdom	100%	100%
Education Support (Enfield 2) Limited	Operating Subsidiary	United Kingdom	100%	100%
Education Support (Enfield) Holdings Limited	Operating Subsidiary	United Kingdom	100%	100%
Education Support (Enfield) Limited	Operating Subsidiary	United Kingdom	100%	100%
Education Support (Newham) Holdings Limited	Operating Subsidiary	United Kingdom	100%	100%
Education Support (Newham) Limited	Operating Subsidiary	United Kingdom	100%	100%
Education Support (Swindon) Holdings Limited	Operating Subsidiary	United Kingdom	100%	100%
Education Support (Swindon) Limited	Operating Subsidiary	United Kingdom	100%	100%
Enfield Lighting Services Limited**	Operating Subsidiary	United Kingdom	100%	100%
Equion Health (Newcastle)	Operating	United	18.75%	18.75%

Limited	Subsidiary	Kingdom
Forth Health Holdings Limited	Operating Subsidiary	United Kingdom	100%	100%
Forth Health Limited	Operating Subsidiary	United Kingdom	100%	100%
Healthcare Support (Erdington) Holdings Limited	Operating Subsidiary	United Kingdom	100%	100%
Healthcare Support (Erdington) Limited	Operating Subsidiary	United Kingdom	100%	100%
Healthcare Support (Newcastle) Holdings Limited	Operating Subsidiary	United Kingdom	15%	15%
Healthcare Support (Newcastle) Limited	Operating Subsidiary	United Kingdom	15%	15%
Healthcare Support (Newcastle) Finance plc	Operating Subsidiary	United Kingdom	15%	15%
Healthcare Support (North Staffs) Holdings Limited	Operating Subsidiary	United Kingdom	100%	100%
Healthcare Support (North Staffs) Finance Plc	Operating Subsidiary	United Kingdom	100%	100%
Healthcare Support (North Staffs) Limited	Operating Subsidiary	United Kingdom	100%	100%
Support Services (BTP) Holdings Limited	Operating Subsidiary	United Kingdom	100%	100%
Support Services (BTP) Limited	Operating Subsidiary	United Kingdom	100%	100%
IIC (C&T) Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC (Leeds Schools) Fund Investment Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC (Leeds Schools) Subdebt Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Barnet Funding Investment Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Barnet Holding Company Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Barnet Subdebt Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Bristol Funding Investment Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Bristol Infrastructure Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Bristol Subdebt Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC By Education (Peterborough Schools) Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Enfield Funding Investment Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Enfield Holding Company Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Enfield Subdebt Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Lambeth Funding Investment Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Lambeth Holding Company Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Lambeth Subdebt Limited**	Operating Subsidiary	United Kingdom	100%	100%

IIC Miles Platting Equity Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Miles Platting Funding Investment Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Miles Platting Subdebt Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Northampton (Pendereds) Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Northampton Funding Investment Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Northampton Holding Company Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Northampton Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Northampton Subdebt Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Peterborough Funding Investment Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Peterborough Holding Company Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Peterborough Subdebt Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Redcar & Cleveland Holding Company Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Redcar and Cleveland Funding Investment Limited**	Operating Subsidiary	United Kingdom	100%	100%
IIC Redcar and Cleveland Subdebt Limited**	Operating Subsidiary	United Kingdom	100%	100%
Investors in the Community (Bexley Schools) Limited**	Operating Subsidiary	United Kingdom	100%	100%
Investors in the Community (Leeds Schools)
Holding Company Limited**	Operating Subsidiary	United Kingdom	100%	100%
Investors in the Community (Leeds Schools) Limited**	Operating Subsidiary	United Kingdom	100%	100%
John Laing Investments KVH Holdings Limited	Operating Subsidiary	Canada	100%	100%
John Laing Investments KVH Limited	Operating Subsidiary	Canada	100%	100%
JLW Excellent Homes for Life Holdings Company Limited	Operating Subsidiary	United Kingdom	100%	100%
JLW Excellent Homes for Life Limited	Operating Subsidiary	United Kingdom	100%	100%
Lambeth Lighting Services Limited**	Operating Subsidiary	United Kingdom	100%	100%
Redcar and Cleveland Lighting Services Limited**	Operating Subsidiary	United Kingdom	100%	100%
Regenter B3 Limited	Operating Subsidiary	United Kingdom	100%	100%
Regenter B3 (Holdco) Limited	Operating Subsidiary	United Kingdom	100%	100%
Regenter LCEP (Holdco) Limited	Operating Subsidiary	United Kingdom	100%	100%
Regenter LCEP Limited	Operating Subsidiary	United Kingdom	100%	100%
Regenter Bentilee District	Operating	United	100%	100%

Centre Holdings Limited	Subsidiary	Kingdom
Regenter Bentilee District Centre Limited	Operating Subsidiary	United Kingdom	100%	100%
Realise Health Limited	Operating Subsidiary	United Kingdom	60%	60%
Investors in Health (C&T) Holdings Ltd	Operating Subsidiary	United Kingdom	60%	60%
Investors in Health (C&T 1) Limited	Operating Subsidiary	United Kingdom	60%	60%
Investors in Health (C&T 2) Limited	Operating Subsidiary	United Kingdom	60%	60%
Inspiral Oldham Holdings Company Limited	Operating Subsidiary	United Kingdom	95%	95%
Inspiral Oldham Holdings Company Limited	Operating Subsidiary	United Kingdom	95%	95%
Sirhowy Enterprise Way Holdings Limited*	Operating Subsidiary	United Kingdom	100%	100%
Sirhowy Enterprise Way Limited*	Operating Subsidiary	United Kingdom	100%	100%
Three Valleys (Healthcare) Holdings Limited	Operating Subsidiary	United Kingdom	100%	100%
Three Valleys (Healthcare) Limited	Operating Subsidiary	United Kingdom	100%	100%
Walsall Public Lighting Holdings Limited	Operating Subsidiary	United Kingdom	100%	100%
Walsall Public Lighting Limited	Operating Subsidiary	United Kingdom	100%	100%

All the above subsidiaries are not consolidated.

Except where indicated, all companies have 31 December year ends.

* Reporting date 31 March

** Reporting date 30 June

The "Operating subsidiaries" and all the "Intermediate Holding" companies are recognised as investments at fair value through profit or loss.

24 JLIF Limited Partnership (registered office: 1 Kingsway, London, WC2B 6AN) is a limited partnership formed under the Limited Partnership Act 1907. The results of JLIF Limited Partnership are included in the investments at fair value of the Company.

25 JLIF (GP) Limited (registered office: 1 Kingsway, London, WC2B 6AN) is the General Partner of the partnership of which JLIF Limited Partnership is the limited partner. The results of JLIF (GP) Limited are also included in the investments at fair value of the Company.

GLOSSARY

Adjusted DRU	means the natural unwind of the discount rate, adjusted for the timing of acquisitions and distributions in the period.
Adjusted Portfolio Value	(a) the Fair Value of the Investment Portfolio (see Portfolio Value); plus
	(b) any cash owned by or held to the order of the Company (the Group); plus
	(c) the aggregate amount of payments made to shareholders by way of dividend in the period ending on the relevant valuation day, less
	(i) any borrowings and any other liabilities of the Company; and
	(ii) any uninvested cash.
Amended Existing FOA	means the first offer agreement between JLIF, the General Partner for and on behalf of the Partnership and John Laing dated 21 January 2014 amending the First Offer Agreement dated 28 October 2010.
Company	means John Laing Infrastructure Fund Limited.
First Offer Agreements	means the first offer agreements between JLIF, the General Partner for and on behalf of the Partnership and John Laing dated 29 October 2010, and 21 January 2014.
Group	The group of companies comprised of the Company, its two wholly owned Luxembourg subsidiaries (JLIF Luxco 1 S.à.r.l. and JLIF Luxco 2 S.à.r.l.), the English Limited Partnership (JLIF Limited Partnership), the General Partner (JLIF (GP) Limited) and the 31 wholly owned subsidiaries of the English Limited Partnership that together held the investments in the 62 assets at 31 December 2016.
HMRC	Her Majesty's Revenue and Customs
Initial Public Offering (IPO)	means JLIF's first sale of stock to the public on 29 November 2010.
Investment Adviser	John Laing Capital Management Limited, acting in its capacity as Investment Adviser to John Laing Infrastructure Fund Limited pursuant to the Investment Advisory Agreement.
Investment Advisory Agreement	The investment advisory agreement between the Investment Adviser and John Laing Infrastructure Fund Limited dated 27 October 2010, as amended on 10 September 2014.
Investment/Investment Capital	Partnership equity, loans, share capital, trust units, shareholder loans and/or debt interests in or to project entities or any other entities or undertakings in which the fund invests or in which it may invest.

John Laing or John Laing Group plc	John Laing Group plc and all of its wholly owned subsidiaries, including John Laing Capital Management Limited.
John Laing Capital Management Limited	Investment Adviser to the John Laing Infrastructure Fund Limited and Operator of JLIF (GP) Limited.
Net Asset Value (NAV)	Total Assets (including Portfolio Value) minus liabilities of the Group.
Net Asset Value (NAV) per share	Net Asset Value (NAV) divided by the total number of Ordinary Shares issued as at 31 December 2016.
New FOA	means the new first offer agreement between JLIF, the General Partner for and on behalf of the Partnership and John Laing dated 21 January 2014.
OECD countries	means the member countries of The Organisation for Economic Co-operation and Development.
Partnership	means JLIF Limited Partnership, a limited partnership registered in England (registered number LP014109), which will hold and manage JLIF's investments.
PPP	Public private partnerships ("PPPs") are arrangements typified by joint working between the public and private sector. In the broadest sense, PPPs can cover all types of collaboration across the interface between the public and private sectors to deliver policies, services and infrastructure. Where delivery of public services involves private sector investment in infrastructure, the most common form of PPP is the Private Finance Initiative ("PFI"). Source: http://www.hm-treasury.gov.uk/ppp_index.htm.
Portfolio	The 62 assets in which JLIF had a shareholding as at 31 December 2016.
Portfolio Value	The sum of all of the individual assets' net present values ("NPV"). Each asset's NPV is calculated by discounting the future cash flows entitled to be received by JLIF, as shareholder, to the 31 December 2016.
Project Entity	means a special purpose entity (including any company, partnership or trust) formed to undertake an infrastructure project or projects or provide infrastructure services.
Prospectus	The Prospectus dated September 2013. The Prospectus can be found at www.jlif.com.
Special Purpose Vehicle (SPV)	A company that is used to facilitate a PPP contract between the public and private sector. A company is incorporated and shareholders invest equity capital and a subordinated debt into the company. The company enters into financing arrangements with senior lenders or bond providers to finance the development of the asset. The company contracts with the public-sector to design, build, finance and operate an asset. It enters into subcontracts with contractors

and operating companies to carry out the required works and

services.

Total Assets of the Group

means the Fair Value of the investment in JLIF Luxco 1 S.à.r.l. (which includes the Portfolio Value and the fair value of the intermediate holding companies) + the Company's cash + the Company's debtors + other receivables of the Company.

GROUP STRUCTURE

JLIF has invested in its current Portfolio and will continue to invest in further infrastructure investments indirectly via a series of holding entities, as follows:

• The Company invests in equity and profit participation instruments of JLIF Luxco 1 S.à.r.l. ('Luxco 1'), a société à responsabilité limitée ('S.à.r.l.') established in Luxembourg, which in turn invests in equity and debt of a similar entity, JLIF Luxco 2 S.à.r.l. ('Luxco 2'). Both Luxco 1 and Luxco 2 (together 'the Luxcos') are wholly owned subsidiaries of the Company (direct and indirect respectively, with Luxco 2 being wholly owned by Luxco 1).

• Luxco 2 is the sole limited partner in the Partnership, an English limited partnership which has a special purpose vehicle as its general partner, JLIF (GP) Limited (the 'General Partner'). The General Partner is a wholly owned subsidiary of Luxco 1. The General Partner, on behalf of the Partnership, has appointed JLCM as Operator of the Partnership.

• Luxco 2 primarily invests the contributions it receives from Luxco 1 in capital contributions and partner loans to the Partnership, which acquires and holds infrastructure investments directly or indirectly through intermediate wholly owned companies and/or other entities.

The Company's infrastructure investments are registered in the name of the General Partner, the Partnership, subsidiaries of the Partnership or their respective nominees.

Heritage International Fund Managers Limited is the Administrator and Company Secretary to JLIF Limited. All other management functions are fulfilled by JLCM.

Intertrust (Luxembourg) S.à.r.l (formerly ATC Corporate Services (Luxembourg) S.A) is the Administrator and Company Secretary to the Luxembourg entities.

PricewaterhouseCoopers LLP, in Luxembourg, is supplying the accounting and tax functions to those companies. JLIF Limited Partnership has an Operator Agreement with JLCM to provide all necessary management functions.

JLIF Limited Partnership has an Operator Agreement with JLCM to provide all necessary management functions.

DIRECTORS, AGENTS AND ADVISERS

DIRECTORS (ALL NON-EXECUTIVE)

Paul Lester (Chairman)

David MacLellan (Deputy Chairman & Senior Independent Director) Helen Green

Talmai Morgan Christopher Spencer Guido Van Berkel

INVESTMENT ADVISER AND OPERATOR

John Laing Capital Management Limited

1 Kingsway

London WC2B 6AN United Kingdom

ADMINISTRATOR TO COMPANY, COMPANY SECRETARY AND REGISTERED OFFICE

Heritage International Fund Managers Limited

P.O. Box 225, Heritage Hall Le Marchant Street

St Peter Port Guernsey GY1 4HY Channel Islands

REGISTRAR

Capita Registrars (Guernsey) Limited

Longue Hougue House St Sampson

Guernsey GY2 4JN Channel Islands

UK TRANSFER AGENT

Capita Registrars Limited

The Registry

34 Beckenham Road Beckenham

Kent BR3 4TU United Kingdom

CORPORATE BROKER

J.P. Morgan Securities Limited

25 Bank Street Canary Wharf London E14 5JP United Kingdom

AUDITOR

John Clacy Fca (For An On Behalf Of Deloitte Llp, Chartered Accountants And Recognised Auditor)

Regency Court Glategny Esplanade St Peter Port Guernsey GY1 3HW Channel Islands

PUBLIC RELATIONS

RLM Finsbury Tenter House 45 Moorfields

London EC2Y 9AE United Kingdom

CORPORATE BANKERS

Royal Bank Of Scotland International

PO Box 55

35 High Street St Peter Port

Guernsey GY1 4BE

This information is provided by RNS

The company news service from the London Stock Exchange

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John Laing Infrastructure Fund Limited Annual Report 2016

ABOUT US

OVERVIEW

Our purpose

Our objective

Key facts

FINANCIAL AND OPERATIONAL HIGHLIGHT

January

February

March

May

June

July

October

December

CHAIRMAN'S STATEMENT

Introduction

Dividends and Share Issuance

Performance

Investments and Disposals

Gearing

Governance & Regulation

Risks & Uncertainties

Board & AGM

Market & Business Outlook

Paul Lester CBE

STRATEGIC REPORT

MARKET OUTLOOK

BUSINESS MODEL

Revenue

Profit

OUTCOMES AND KEY PERFORMANCE INDICATORS ("KPIS")

There are two categories of KPIs JLIF is measured against:

RISK COMMITTEE REPORT

Risk identification, review and mitigation

1. Economic;

Long Term Viability Statement

BOARD OF DIRECTORS

All members of the JLIF Board have been in post since the Company was incorporated in August 2010, with the exception of Helen Green who was appointed in April 2014.

David MacLellan, Deputy Chairman and Senior Independent Director

Christopher Spencer

Talmai Morgan

Guido Van Berkel

Helen Green

GROUP INVESTMENT PORTFOLIO

As at 31 December 2016, JLIF's Portfolio comprised investments in 62 low-risk, infrastructure PPP projects, across seven primary sectors and six countries.

Geographic focus

Single investment limit and diversity of clients and suppliers

Gearing

Origination of investments

Potential disposals of investments

Currency and hedging policy

Amendments to and compliance with the Investment Policy

THE INVESTMENT ADVISER

JLIF is advised by John Laing Capital Management ("JLCM"), a specialist infrastructure manager, which is able to draw upon a wealth of experience in infrastructure investments, management and development.

Gianluca Mazzoni

Joanne Griffin

Jamie Pritchard

Matthew McLintock

1. ABOUT THE INVESTMENT ADVISER

2. INVESTMENT PERFORMANCE

2.2 Ongoing Charges

3. VALUATION

3.2. Portfolio Value

3.3 Valuation Assumptions

3.3.2. Interest rates

3.3.3 Cash deposit rates

3.3.4.Foreign Exchange

3.3.5 Inflation

3.3.6 Corporation tax

3.3.7 Lifecycle

4. PORTFOLIO PERFORMANCE

4.2 Distributions from investments

4.3 Exchange rate impact

4.4 Rebased valuation

4.5 Portfolio growth

John Laing Infrastructure Fund Limited
Annual Report 2016