BBGI Global Infrastructure Regulatory News (BBGI)

27 March 2015

BBGI SICAV S.A.

('BBGI' or the 'Company')

Annual Results for financial year ended 31 December 2014

2014 FINANCIAL & OPERATIONAL HIGHLIGHTS

§ 3.57% increase in Net Asset Value on an investment basis ("Investment Basis NAV")1 to £465.29 million as at 31 December 2014 (£449.25 million - 31 December 2013).

§ Investment Basis NAV per share of 109.2 pence as at 31 December 2014 (105.6 pence - 31 December 2013) which represents increase of 3.49%.

§ 2014 interim dividend of 2.88 pence per share paid on 2 October 2014 and further dividend of 2.88 pence per share proposed for year ended 31 December 2014, giving total distributions of 5.76 pence per share for the year. This represents a 4.73% increase from the prior year.

§ Total Shareholder Return ("TSR") in the calendar year 2014 was 10.79% whilst TSR from IPO in December 2011 to 31 December 2014 was 41.25%2.

§ Market capitalisation increased to £531.3 million at 31 December 2014, up 5.8% from £502.2 million at 31 December 2013. Shares continue to trade at premium to Investment Basis NAV, and stood at premium of 14.2% as at 31 December 2014.

§ Completed ten primary acquisitions as well as nine follow-on acquisitions with total value of £120.43 million in 2014.

§ Acquisitions completed during year include Company's first in the US, as well as further acquisitions in Australia, UK and mainland Europe to create a strong, diverse and global portfolio.

§ Portfolio has increased from 26 projects with fair market value c. £324.1 million at 31 December 2013 to 36 projects with fair market value c. £454.9 million at 31 December 2014.

§ Portfolio performance and cash receipts slightly ahead of business plan and underlying financial models.

§ Successful transition of Northern Territory Secure Facilities (Australia) and Mersey Care Mental Health Hospital (UK) from construction to operational status.

§ Ongoing charges percentage decreased to 0.98% (1.11% - 31 December 2013) which we believe to be the lowest within the UK listed infrastructure sector.

§ Average discount rate of 8.21% at 31 December 2014 compared with 8.39% at 31 December 2013.

§ International Financial Reporting Standards ("IFRS") NAV of £466.3 million as at 31 December 2014 (£450.7 million - 31 December 2013).

§ Net profit under IFRS basis of £39.1 million for year ended 31 December 2014 (£18.8 million - year ended 31 December 2013).

§ Further broadening of share register by successful secondary placing in April 2014 of 37,188,000 ordinary shares previously owned by Bilfinger SE.

§ Name changed to BBGI SICAV S.A. on 30 April 2014.

§ Authorisation as internally managed alternative investment fund ("AIF") received from Luxembourg Regulator ("Commission de Surveillance du Secteur Financier" or "CSSF").

COMPANY OVERVIEW

Key characteristics as at 31 December 2014

Notes:

\* Targets only and not profit forecasts. No assurances given that targets will be met.

CHAIRMAN'S STATEMENT

Your Company has had another successful year having completed 10 primary and 9 follow on acquisitions; reached 36 separate projects globally, including its first in the USA; increased the Net Asset Value by 3.57%; and has received authority to act as an internally managed Alternative Investment Fund. Further details are set out in the Financial and Operational Highlights and in the Report of the Management Board. As a consequence, I am delighted to announce that your Directors are recommending a final dividend of 2.88 pence per share bringing the total dividend for 2014 to 5.76 pence per share.

It is now a little over three years since the Company was founded and in accordance with the Articles of Association a resolution on the continuation of the Company will be put before shareholders at the Annual General Meeting to be held on April 30th. Your Directors believe the Company has shown an ability to invest in quality projects around the world which enable it to pay a steady dividend and also to grow the Net Asset Value per share. We have every expectation that this performance can continue. Accordingly, the Directors have no hesitation in recommending that you vote in favour of the resolution as the Directors intend to do with their own shares. The passing of this resolution will enable the Company to continue in its current form with a further continuation vote to be held at the Annual General Meeting in 2017.

In last year's statement I mentioned that we were in the process of reviewing the level of remuneration for the Management Board both to ensure it was in line with the market and to satisfy the new requirements which arose with the AIFMD. This process is now finalised and details of the new packages are set out in the Remuneration Report. The Supervisory Board, which acts as the Remuneration Committee, is satisfied that we now have remuneration packages which should allow us to retain top quality management whilst also maintaining a market leading Ongoing Charges Ratio.

The secondary market for PPP/PFI assets is very competitive and we see no sign of this changing in the near future. We are fully focused on enhancing shareholder value even if this brings slower growth in the size of the Company's asset base. Notwithstanding, the Company has continued to be successful in adding scale whilst maintaining a disciplined approach to pricing and will look to continue to do so throughout the coming year.

David Richardson

Chairman

BBGI SICAV S.A.

26 March 2015

INVESTMENT POLICY AND OBJECTIVES

INVESTMENT POLICY

The Company's investment policy is to invest in equity, subordinated debt and/or similar interests issued in respect of infrastructure projects that have predominantly been developed under the PPP/PFI or similar procurement models. The Company will principally invest in projects that are operational and that have completed construction. Accordingly, investment in projects that are under construction will be limited to 25% of the portfolio value (calculated as at the time of investment).

Project revenue stream characteristics

The Company invests predominantly in projects whose revenue streams are public sector or government-backed, although the Company may invest in projects whose revenue streams are backed by non-governmental organisations that the Directors believe carry an appropriate credit risk and represent a low counterparty risk, for example as alternative infrastructure procurement models develop (such as private-private partnerships). Investment in projects whose revenue streams are not public sector or government-backed will be limited to 25% of the portfolio value, calculated as at the time of investment.

The Company primarily invests in projects where payments received by the project entities, and hence the revenue streams from the projects, do not generally depend on the level of use of the Project Asset and as such are "availability-based". Projects are characterised as having an "availability-based" revenue stream if, on average, 75% or more of payments received by the relevant project entity do not depend on the level of use of the project asset. Investment in projects where, on average, 25% or more of payments received by the project entities depend on the level of use made of the project assets ("demand-based") will be limited to 25% of the portfolio value, calculated as at the time of investment.

Geographic focus

The Directors believe that attractive opportunities for the Company continue to arise in areas of the world where PPP/PFI is a practised route for delivering infrastructure investments. The Company intends to invest predominantly in projects that are located in Europe, North America, Australia and New Zealand. However, the Company may also invest in projects in other markets should suitable opportunities arise.

The Company will seek to mitigate country risk by concentrating predominantly on investment opportunities in countries where the Directors consider that project structures are reliable, where (to the extent applicable) public sector counterparties carry what the Management Board consider to be an appropriate credit risk or alternatively where insurance or guarantees are available for the sovereign credit risk, where financial markets are relatively mature and where a reliable judicial system exists to facilitate the enforcement of rights and obligations under project documentation.

Origination of investments

Each of the investments in the portfolio complies with the investment policy and further investments will only be acquired if they comply with the investment policy.

Further investments will be subject to satisfactory due diligence and agreement on price which will be negotiated on an arm's length basis and on normal commercial terms. It is anticipated that any further investments will be acquired out of existing cash resources, borrowings including letters of credit, funds raised from the issue of new capital in the Company or a combination of all three.

Single investment limit and diversity of clients and suppliers

In order to ensure that the Company has a spread of investment risk, it is the Company's intention that when any new acquisition is made, 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 20% of the portfolio value of the Company immediately post-acquisition (but subject always to a maximum limit of 25% of the portfolio value immediately post-acquisition). In order to avoid over-reliance on either a single client or a single contractor when selecting new investments to acquire, the Company will seek to ensure that the portfolio of project entities in which the Company invests has a range of clients and supply chain contractors.

Borrowing and leverage

The Company intends to make prudent use of leverage (and leverage in the context of the Company shall exclude indebtedness in place at project entity level) primarily to finance the acquisition of investments and for working capital purposes. The Company will ensure that the Company'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 33% of the portfolio value. The Company may borrow in currencies other than Pounds Sterling as part of its currency hedging strategy.

Currency and hedging policy

The Company will continue to invest in project entities that are located not just in the UK, and as a result some of the Company's underlying investments will be denominated in currencies other than Pounds Sterling. For example, investments in the portfolio are denominated in Australian Dollars, Canadian Dollars, Euro, Norwegian Krone and US Dollars as well as Pounds Sterling. However, any dividends declared and paid on the ordinary shares will be made in Pounds Sterling, and the market price and net asset value of the ordinary shares will be reported in Pounds Sterling.

Any currency rate hedging transactions will only be undertaken for the purpose of assisting the Company in meeting its dividend distribution targets. Hedging transactions will not be undertaken for speculative purposes. Management will continue to review the hedging strategy on an annual basis.

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.

Potential disposals of investments

Whilst the Directors may elect to retain investments over the long-term, they will regularly monitor the valuations of such project entities and any secondary market opportunities to dispose of investments. The Company only intends to dispose of investments where it is considered that appropriate value can be realised for the Company or where the Management Board otherwise believe that it is appropriate to do so. Proceeds from the disposal of investments will generally be reinvested, or may be distributed at the discretion of the Management and Supervisory Boards.

Amendments to and compliance with the investment policy

Changes to the investment policy may only be made with the approval of the CSSF and the shareholders by way of ordinary resolution in accordance with the Luxembourg law of 17 December 2010 on undertakings for collective investments (the "Law") and (for so long as the ordinary shares are listed on the Official List) in accordance with the Listing Rules. The investment policy restrictions detailed above apply at the time of the acquisition of any new investment. The Company will not be required to dispose of investments and to rebalance its investment portfolio as a result of a change in the respective valuations of investments, although in such circumstances the Management Board will review the composition of the investment portfolio as a whole and consider whether any rebalancing is in the interests of shareholders.

In the event of any breaches of the investment restrictions contained in the investment policy, the Company will inform shareholders through an announcement on a Regulatory Information Service.

INVESTMENT OBJECTIVES

Looking forward into 2015 and beyond, the Company will continue to seek to provide investors with secure and predictable long-term cash flows whilst actively managing the investment portfolio with the intention of maximising the capital value over the longer term. The Company targets a dividend of 5.76 pence per share per annum with the aim to increase this distribution progressively over the longer term. The Company will target an IRR in the region of 7% to 8% on the £1 IPO issue price, to be achieved over the longer term.

INVESTMENT PORTFOLIO

As at 31 December 2014, BBGI's assets consisted of interests in 36 high-quality,availability-based, PPP/PFI infrastructure assets in the transport, healthcare, education, justice and other services sectors. Located in Australia, Canada, Continental Europe, the UK and the US, 89% of the assets by value are operational, with 4% in early-stage construction5. A further 7% are in late-stage construction and expected to become operational in 2015.

Portfolio Summary

The concessions granted to project entities in the portfolio are predominantly granted by a variety of public sector clients or entities which are government backed. All project entities in the portfolio are located in countries which are highly rated (Aa1/AAA for the UK; Aaa/AAA for Australia, Canada, Germany and Norway; Aaa/AA+ for the US) by Moody's and by Standard & Poor's.

Representation at project level

With regard to the project entities acquired, the Management Board has taken, in most cases, two Board seats within each portfolio asset. More information on the performance of the project entities is provided in the Valuation section below.

FIVE LARGEST PROJECTS

AVAILABILITY ROADS

Golden Ears Bridge, Canada

The Golden Ears Bridge in Vancouver is a 1km, six-lane road that spans the Fraser River and connects Maple Ridge and Pitt Meadows to Langley and Surrey. The scheme, which was opened in 2009, also includes more than 3.5km of structures including ramps, viaducts, minor bridges and underpasses, and more than 13km of mainline roadway, a large part of which has been landscaped. The project consists of the design, construction upgrade, finance and operation for 32 years.

The project brought close to CAD 1 billion in construction-related activity to the area. Commuters using the new bridge can save up to 40 minutes per peak-hour round-trip from Maple Ridge to Langley.

 M80 Motorway, UK

The section of road between Stepps and Haggs is an all-purpose dual carriageway and was the only non-motorway section of the A80 between Glasgow and the end of the M80 at Dunblane. The project involved construction of 18km of dual two/three lane motorway with associated slip roads and infrastructure from Stepps in North Lanarkshire to Haggs in Falkirk. Traffic availability was achieved in August 2011 and the improvements have reduced congestion for road users and have improved journey times and reliability.

E18 Motorway, Norway

The 38km dual carriageway carves through a very rugged and extremely beautiful landscape. A total of seven tunnels and six major bridges were completed as part of the contract.  This new section of highway is part of the trunk road from Oslo to Kristiansand. It is a key element of the transport corridor between southern Norway and the Continent as well as an important connection between the two cities. In August 2009, the King of Norway opened the E18 Highway between Grimstad and Kristiansand after three years of construction.

JUSTICE

Victoria Prisons, Australia

The Metropolitan Remand Centre near Melbourne accommodates up to 600 male prisoners and is the State's major intensive treatment facility for male prisoners. It offers treatment programs aimed to promote rehabilitation, reduce repeat offending and to prepare prisoners for transition back into the community.

The second, smaller facility is the Marngoneet Correctional Centre which houses 300 male prisoners and is also located in greater Melbourne. Both prisons started operation in 2006.

In 2013, two significant augmentation orders were undertaken to expand the prisoner capacity.

Northern Territory Secure Facilities, Australia

The facility, located near Darwin, includes three separate centres

· A 1,000 bed multi-classification men and women's correctional centre to replace the existing outdated facilities at Berrimah.

· A 30 bed secure mental health and behavioural management centre, a first of its kind in the Territory.

· A 48 bed supported accommodation and program centre for community based offenders with facilities designed to support the government's goals of enhanced rehabilitation, education and reduced reoffending rates in the Territory.

BBGI acquired this project while it was still in construction. The facility became operational in HY2 2014. The new facility will allow Northern Territory Corrections to engage prisoners into structured daily programs in order to foster rehabilitation and stronger re-integration.

Relationship with clients

The Management Board continues to work hard to build and maintain a good dialogue with the Group's public sector clients and partners. It is engaged in resolving issues, identifying efficiencies and facilitating variations which benefit both shareholders and public sector clients.

Across the entire portfolio, BBGI remains comfortable with the counter-party risk of the public sector clients and the Management Board is not aware of any instances of financial distress which might lead to default. Facility management continues to be performed at a high level with no major incidents to report.

Environmental and Social Governance ("ESG")

As part of their corporate social responsibility, the Boards recognise the importance of ensuring that the Company develops appropriate environmental, social and ethical policies. The Company has implemented its ESG policies which have been designed to ensure that the Company follows best practices in relation to corporate responsibility. The policies are monitored and updated on an ongoing basis.

In respect of further investments, as part of the due diligence process, the Company will analyse the environmental, social and ethical policies of potential new acquisitions and, where possible, the adherence to those policies by key contractors and service providers. In addition, the Company will undertake an analysis of governance procedures at the relevant project entity with the intention of ensuring that the Company has appropriate Board representation and influence at the project entity level.

Once the Company has acquired an investment in a project entity, it then undertakes regular reviews of the environmental, social and ethical policies that the project entities have in place and their adherence to these policies in the delivery of their services. Health and safety practices are also monitored across the Company's portfolio and any serious breaches or incidents are reported to the Management Board, which in turn reports to the Supervisory Board.

REPORT OF THE MANAGEMENT BOARD

BUSINESS REVIEW

Business of the Company

We are very pleased to present the results for the year ended 31 December 2014.

The Management Board has presented the management report for the consolidated financial statements and the standalone financial statements as a single report.

Highlights

BBGI's goals for 2014 were to manage the portfolio actively to enhance returns and position of the Company for continued selective growth. Certain key performance indicators for 2014 are highlighted below:

Key Performance Indicators ("KPIs")

Growth in the Portfolio

Benefits of the growth

2014 was a year of significant growth for BBGI as the Company increased its portfolio from 26 projects with a fair market value of c.£324.1 million as at 31 December 2013 to 36 projects with a fair market value of c.£454.9 million as at 31 December 2014.

In total, during the course of the year the Company completed the acquisition of 19 separate interests in new and existing projects from a variety of parties for total consideration of approximately £120.4 million. The acquisitions made during the year include the Company's first investment in the U.S., as well as further acquisitions in Australia, the UK, Germany, and Norway. These acquisitions further diversify the Company's already diverse portfolio and create a strong global portfolio with assets located in "AAA" and "AA+" rated countries.

Despite an increasingly competitive landscape, all of these transactions were completed on a negotiated basis without engaging in broad auctions, which can often result in the acquirer overpaying for assets. These transactions were concluded on attractive and accretive terms and will provide the following benefits to shareholders:

§ Further diversify the Group's investment portfolio by geography and sector:

o International portfolio with majority of assets being outside the UK;

o Major exposure to availability-based transport projects which the Management Board believes are less complex and easier to operate than social infrastructure assets.

§ Continue to diversify the counterparty exposure while maintaining an attractive mix of high investment grade, creditworthy counterparties.

§ Ongoing charge percentage has dropped to 0.98%, which we believe to be the lowest within the UK listed infrastructure sector. The decrease was primarily due to the larger asset base for the Company over which its operating costs are spread, given the absence of asset based management fees because of the company's internal management structure.

§ Providing some exposure to projects in construction, thereby increasing the opportunity for greater NAV growth in the future, as these assets are expected to see a valuation uplift before or upon becoming operational.

§ Increasing the issued share capital of the Company, thereby increasing the liquidity of the shares and providing scale benefits.

As the portfolio grows in size, the benefits of the internal management structure become more evident with some potential for the ongoing charge ratio to continue to decline further.

Acquisitions

The Company completed ten primary acquisitions as well as nine follow-on acquisitions with a total value of £120.4 million as summarised below. These projects are availability-based with no volume risk, and are supported by contracted, public sector-backed revenue streams, with inflation-protection characteristics.

January

BBGI completed the acquisition of a 33.33% interest in the Ohio River Bridges / East End Crossing ("ORB") PPP project. This transaction is BBGI's first asset in the US. This is one of a handful of availability-based projects to be delivered in the US using PPP as a procurement method and the Company is excited to gain an early foothold in the promising US market.

The project benefits from a very experienced and financially strong construction joint venture, has long-term financing in place and is not subject to any refinancing risk. ORB is a long-term public-private-partnership concession procured by the Indiana Finance Authority for the development, design, construction, financing, operation and maintenance of a cable-stayed bridge and associated roadway and facilities across the Ohio River, connecting Clark County, Indiana and Jefferson County, Kentucky. The bridge is in close proximity to Louisville, Kentucky.

The concession term is equal to the construction period of 3.6 years plus 35 years of operations. The project payment mechanisms are comprised of a series of milestone payments to be received both during the construction period and shortly after the achievement of substantial completion, and monthly availability payments in the operation period. The construction work relating to the project is being undertaken by a joint venture between Walsh Construction Company and VINCI Construction Grand Projects JV, both of which are experienced in delivering large transportation infrastructure projects. Construction obligations have been designed to be passed down to the design/build joint venture through a fixed price, date-certain, design/build contract.

February

§ BBGI completed the acquisition of additional interests in three LIFT projects from Assura Group Limited. The interests acquired include equity and subordinated debt interests in Liverpool & Sefton Clinics, North London Estates Partnerships and Mersey Care Mental Health Hospital.

The Liverpool & Sefton Clinics LIFT project is a UK concession to develop, fund, build, operate and manage primary healthcare facilities in Liverpool and Sefton. Under the Assura Acquisition Agreement, BBGI acquired 20.0% of the equity interest in the project and 26.1% of the subordinated debt.

The North London Estates Partnership LIFT project is a UK concession to develop, fund, build, operate and manage primary healthcare facilities around Barnet, Enfield and Haringey. BBGI acquired 20.0% of the equity interest in the project and 26.7% of the subordinated debt.

The Mersey Care Mental Health project involves transforming the former Walton Hospital site in Liverpool into a new, 85 bed mental health in-patient facility. The concession expires in 2044 and is availability-based with no volume risk. BBGI acquired an initial stake in the project from Bilfinger and, under the Assura Acquisition Agreement, acquired a further 28.6% of the equity and 30.0% of the subordinated debt. Upon completion of both acquisitions, BBGI now controls 70.1% of the equity and 70% of the subordinated debt. The asset was in construction when it was acquired but became operational in HY2 2014. As expected, BBGI benefitted from an up-lift in valuation when the asset transitioned from the construction phase to the operational phase.

March

§ BBGI signed and completed the acquisition of Bilfinger Group's equity and subordinated debt subscription obligations of approx. £20 million, representing 37.5% of the equity and subordinated debt, in Mersey Gateway Bridge. The subscription obligations are backed by a letter of credit using BBGI's credit facility. BBGI is excited to be involved in this critical piece of infrastructure being delivered under the new UK infrastructure investment programme. This acquisition is on accretive terms and was agreed without engaging in an auction process.

§ BBGI completed the acquisition of a 50% interest in the Northern Territory Secure Facilities ("NTSF") in Australia. NTSF is a new 1,000 bed correctional facility, located on a greenfield site near Darwin, Australia. When the project was acquired it was in construction, but subsequently became operational in H2 2014. As expected, the project benefited from an uplift in value as the asset moved from the construction stage into operations. The concession term runs until June 2044. BBGI will receive availability payments during the concession period from the Northern Territory government which is rated Aa1 by Moody's Investor Services. The construction work relating to the project was undertaken by a joint venture between Baulderstone Pty (now Lend Lease) and Sitzler Pty Ltd. Construction obligations were designed to be passed down to the joint venture through a fixed price, date-certain, design and build contract. Honeywell Limited is responsible for the facility management and the Northern Territory government provides custodial services.

April

§ BBGI completed the acquisition of a 50% equity and loan note interest in four operational PPP Projects in Germany from Hochtief PPP Solutions GmbH. Frankfurt Schools project is a 22 year concession to design, build/refurbish and maintain four schools in the City of Frankfurt am Main with the concession expiring in July 2029. The Cologne Schools project is a 25 year concession to design, build and maintain seven schools at five locations in the City of Cologne with the concession expiring in December 2029. Cologne-Rodenkirchen Comprehensive School consists of a comprehensive school serving 1,200 students. The project is a 25 year concession which expires in November 2034. Fürst Wrede Military Base Munich consists of various accommodation, office and training buildings, vehicle depots and gymnasiums in the Munich region, and is a 20 year concession which expires in March 2028.

§ BBGI signed and completed the acquisition of an additional 6.67% equity and subordinated debt interest in two existing operational LIFT projects from Galliford Try Investments Limited. The two projects are the North London Estates Partnerships, and the Liverpool and Sefton Clinics. Following this acquisition, BBGI owns more than 50% in these projects.

May

BBGI completed the acquisition of 100% equity and subordinated debt interest in Lagan College, an operational long term PPP concession to build a school and partially refurbish and remodel an existing school building in Northern Ireland. Under the sale and purchase agreement BBGI has acquired from the Bilfinger Group 70% of the equity and subordinated debt in the project. Under the Graham Acquisition Agreement, BBGI has acquired the remaining 30% of the equity interest and subordinated debt in the project.

June

§ BBGI completed the acquisition of 100% equity and loan note interests in DBFO-1 Road Service ("M1 Westlink") from the Bilfinger Group and Graham Investment Projects Limited. M1 Westlink is a long term concession to design, upgrade, finance and operate the M1 Westlink road scheme in Belfast, UK. The project commenced in April 2006 and required a significant amount of construction work to upgrade key sections of the existing road network. This consisted of approximately 60km of motorway and a short section of linking dual carriageway through the heart of Belfast. The project was completed approximately six months ahead of schedule in November 2009. The concession expires in 2036.

§ BBGI completed the acquisition of a further 41.2% equity interest in the E18 Roadway Project ("E18") in Norway from Sundt A.S., and now owns 100% of the equity interest in E18. The project is a long term PPP concession contract to operate and maintain a new section of highway between Grimstad and Kristiansand in Norway. The 38km dual carriageway road opened in August 2009 and is part of the trunk road from Oslo to Kristiansand. It is a key element of the transport corridor between southern Norway and the Continent as well as an important connection between the two cities. The concession expires in 2034.

July

BBGI completed the acquisition of a further 6.1% of the equity and 10% of the sub-debt interest in the Mersey Care Mental Health Hospital project in UK from GB Partnerships Investments Limited.

December

§ BBGI completed the acquisition of equity and subordinated debt interest in the Avon & Somerset Police HQ in the UK. The asset consists of four Police buildings (an Operation Base, two Custody and Crime Investigation Centres, and a Tri-forces Firearms Training Centre). Three of the four buildings are operational.

Future Growth

Since going public in 2011, the Management Board has been able to grow the Company successfully from 19 assets to 36 assets as at 31 December 2014. While access to Bilfinger's pipeline was a reliable and attractive initial growth driver for the Company following the IPO, the Company has also benefitted from the Management Board's ability to source investment opportunities from a variety of sources and in different geographies.

The management team has extensive experience in the PPP/PFI secondary market, having been involved in secondary market transactions with an aggregate investment volume in excess of EUR 8 billion. The Management Board believe that BBGI will be well positioned to originate further investments due to their extensive PPP industry contacts in Australia, Europe and North America. During 2014, of the 19 acquisitions of interests completed by the Company, only 6 originated from Bilfinger with the remainder coming from a variety of sources including construction companies, developers, and infrastructure investors.

The Management Board has been very conscious of the need to exercise restraint and discipline in pursuing selective, accretive growth. While there was no shortage of investment opportunities presented to BBGI in 2014 we only moved forward with a fraction of the opportunities presented. We avoided the broad auction processes and had less than £50,000 in bid / pursuit costs for opportunities that did not result in actual investments.

The Management Board has noticed the increased competitive tension in the PPP/PFI secondary market. There is currently more investment capital searching for assets than there is supply, putting pressure on prices. Also, for the last 24 months there has been a very strong inflow of funds into the listed PPP/PFI infrastructure sector. During this time it has been much more difficult to identify and acquire projects on terms that are accretive to shareholders than to source the investment capital. We expect these conditions to continue in 2015; we will remain very selective and surgical in pursuing new investment opportunities and will only move forward with those opportunities which we believe will create shareholder value.

In an increasingly competitive acquisition market, we believe there are a handful of guidelines that will serve us well in 2015:

Remain disciplined on price: We will remain focused on pursuing opportunities that are accretive. We believe our internal management structure serves us well in this regard. As the only internally managed London listed PPP/PFI fund, the individuals making the investment decisions work directly for the Company and not for an external manager. Unlike the structure with a typical external manager, the management team is not rewarded for assets under management or paid acquisition fees. Therefore there is no bias for growth at BBGI unless it is beneficial to shareholders.

Follow through on integration and asset management initiatives: In an increasingly competitive acquisition environment, bidders are often required to consider synergies and various savings as part of their bids to be successful. Synergies and savings will only be priced when Management are confident they can be achieved. For an acquisition to be profitable these enhancements need to be implemented post acquisition, so we will continue to remain very focused on bedding in the assets, implementing cost savings and active asset management post acquisition.

Keep an eye on bid costs: While we will continue to examine and consider a wide variety of opportunities, we will remain focused on bid costs and will only incur due diligence costs for opportunities where we have a reasonable prospect of success. We will be careful in allocating our energy and budgets only to the best opportunities. We have also kept our costs low by having a relatively modest credit facility (£80 million) which results in lower standby fees, while still retaining the flexibility to consider larger transactions by having a further £100 million accordion tranche for which no standby fees are paid.

The Management Board will continue to be cautious in its approach to engaging in competitive auction processes and will only do so when it can see the possibility of making an accretive investment. Furthermore it will seek to acquire additional stakes in existing projects and will continue to review primary deals, an area where BBGI is currently focused, with several opportunities in Canada and Continental Europe.

While price is always a key consideration, BBGI has been able to differentiate itself in certain circumstances by being able to transact quickly or discreetly, having specific regional knowledge or offering the best value by being able to consider synergies or efficiencies. We remain optimistic that we will be able to continue to grow the portfolio on attractive terms.

Construction Exposure

The Company's investment policy is to invest principally in projects that are operational and that have completed construction. Accordingly, investment in projects that are under construction will be limited to 25% of the Portfolio Value (calculated as at the time of investment). The rationale for this approach is to be able to produce a stable dividend for our shareholders, while at the same time gaining some exposure to the potential NAV uplift that can occur when projects move from the construction stage to the operational stage.

During the course of 2014, BBGI had six projects which were in construction and the monitoring and management of these projects was a key focus for the Management Board. The Company expanded its asset management team with individuals with specific PPP construction experience to help manage and mitigate any potential risks including, in April 2014, hiring a second Director in Asset Management. By the end of 2014, two of the projects in construction, Northern Territory Secure Facilities in Australia and Mersey Care Mental Health Hospital in the UK, became operational as expected.

The completion of both Northern Territory Secure Facilities and Mersey Care Mental Health Hospital helped validate our investment thesis of investing in projects during the construction phase when the returns are higher.

While there is some increased risk associated with investing in projects during the construction phase, we believe the higher returns afforded during the construction phase are attractive on a risk-adjusted basis. We also consider the risks to be quite manageable, the construction risk generally being passed down to creditworthy construction sub-contractors. The typical construction contract is a fixed-price, date-certain contract where the construction contractor is responsible for any potential cost over-runs or delays. Construction support packages typically consist of letters of credit or bonds from third parties and, to the extent necessary, parent company guarantees from the parent of the construction companies.

As at 31 December 2014, four projects (11% of portfolio value) are in construction. Two of these projects (7% of portfolio value) are in late stage construction and expected to become operational in 2015. The remaining two projects (4% of portfolio value)13 are in early stage construction and are scheduled to become operational in 2016 or 2017. The Management Board believes that the Company's ability to meet its dividend targets has not been compromised by this construction exposure and will continue to monitor this closely as the portfolio grows.

BBGI remains optimistic for further NAV growth, particularly once the four projects currently in construction within the Company's portfolio move closer to, and into, the operational phase. The ability to provide such organic growth in NAV as particular potential risks in assets reduce over time is an important and differentiating characteristic of the Company. It also provides a potential future mitigant to any possible adverse movements in NAV that might arise from changes in macro-economic factors.

Investment performance

Share Price

The Company's share price has performed well and has maintained a premium to net asset value. We continue to believe that a key benefit of the portfolio is the high quality cash flows that are derived from long-term government backed contracts. As a result, the portfolio performance is largely uncorrelated to the many wider economic factors that may cause market volatility in other sectors.

The share price closed the year at £1.2475, an increase of 5.7% in 2014. Shares traded at a premium to net asset value throughout the year in a range from 8.9% to 20.2%. TSR in calendar year 2014 was 10.79% whilst TSR from IPO to 31 December 2014 was 41.25%.

Distribution policy

Distributions on the ordinary shares are planned to be paid twice a year, normally in respect of the six months to 30 June and the year ended 31 December. Subject to market conditions and to the level of the Company's income, it is intended that distributions will be paid as final dividends, subsequent to shareholder approval at the AGM at the end of April, and as interim dividends in October of each year.

Dividends

On 27 June 2014, the Company paid a final dividend of 2.75 pence per share for the year ended 31 December 2013. A scrip alternative was also offered to shareholders. On 2 October 2014, an interim dividend of 2.88 pence per share was paid. Payment of this interim dividend was consistent with the Company's revised target dividend payment of at least 5.76 pence per share p.a. This revised target represents an increase of 4.7% on the previous target dividend payment of 5.5% p.a. by reference to the IPO Issue Price of £1.

In addition to the interim dividend the Company proposes a final dividend of 2.88 pence per share for the year ended 31 December 2014, giving total distributions of 5.76 pence per share for the year.

Hedging

The Company is exposed to foreign exchange movements on future portfolio distributions denominated in AUD, CAD, EUR, NOK and USD. The Management Board has implemented a policy of hedging forward a portion of its anticipated foreign currency cash flows. The Company seeks to provide protection to the level of Sterling dividends that the Company aims to pay on the ordinary shares, in order to reduce the risk of currency fluctuations and the volatility of returns that may result from such currency exposure. The Company currently uses forward contracts to hedge against exchange rate exposure. The Company does not currently hedge the future Euro cash flows as it is envisaged that these cash flows will be used to cover the fund's running costs which are largely Euro denominated.

An in-depth review of hedging strategy is carried out on an annual basis.

Investment opportunity

The Management Board believes that an investment in BBGI provides shareholders with the following benefits:

· Exposure to high quality PPP infrastructure assets with the following attributes:

§ Long-term stable cash flows from assets that are mainly operational (or near operational) and backed by public sector or government backed counterparties

§ Potential for NAV growth as a limited number of projects currently in construction within the Company's portfolio move closer to, and into, the operational phase

§ Strong yield characteristics and attractive inflation protection characteristics

§ A portfolio which is diversified by sectors with a focus on availability based transport projects

§ Spread across a number of high quality creditworthy countries

§ High degree of project control with BBGI controlling more than 50% of the equity in 96% of its project entities (calculated by reference to project value).

§ Availability-based road projects and a range of social infrastructure projects

§ Potential for value enhancement opportunities and acquisition of further stakes

· Alignment of interest between the Company, the management team and shareholders through an internal management structure

· 0.98% Ongoing charge percentage which we believe to be the lowest within the UK listed infrastructure sector This is primarily due to the internal management structure; no NAV-based management fees, no acquisition fees and no performance fees charged; director fees earned from the project entities are also for the benefit of BBGI and are not paid to a third party

· Experienced PPP/PFI management team

· Continuation vote in 2015 and every two years thereafter

Investor Communications

The Company places great importance on communication with its shareholders and welcomes their views. It is the intention of the Company to remain at the forefront of disclosure and transparency in its asset class, and therefore the Boards regularly review the level and quality of the information that the Company makes public.

Formal reports are made by the Company twice a year through the annual and interim reports and financial statements. In addition, management statements and other current information on the Company provided through the Company's website pages, market announcements and investor briefings, assist in keeping investors and other interested parties informed. At Shareholder General Meetings, each share is entitled to one vote; all votes validly cast at such meetings (including by proxy) are counted, and the results of such meetings are announced by the Company on the day of the relevant meeting.

The Boards are keen to maintain and develop engagement with shareholders. Regular and comprehensive feedback from investors is received via the Management Board and the Corporate Brokers, and reported to each scheduled meeting of the Supervisory Board. Throughout the year under review, Board members have made themselves available to major shareholders and key sector analysts, both collectively and on a one-to-one basis, for discussion of key issues and expectations around Company performance, and will continue to do so. Board members intend to continue to be available to meet with shareholders periodically to facilitate open two-way communication on the development of the Company. Shareholders may contact members of both the Management and Supervisory Boards at the registered office of the Company.

Share capital

The issued share capital of the Company is 425,916,568 ordinary shares of no par value. All of the ordinary shares issued rank pari passu. There are no special voting or other rights attaching to any of the ordinary shares.

Voting rights

There are no restrictions on the voting rights attaching to ordinary shares.

Discount management

Although the Company's shares have traded at a premium since flotation, the Management Board will actively monitor any discount to the net asset value per ordinary share at which the ordinary shares may trade in the future. The Management Board will report to the Supervisory Board on any such discount and propose actions to mitigate this.

Purchases of ordinary shares by the Company in the market

In order to assist in the narrowing of any discount to the net asset value at which the ordinary shares may trade from time to time and/or to reduce discount volatility, the Company may, subject to shareholder approval:

§ make market purchases of up to 14.99% p.a. of its issued ordinary shares

§ make tender offers for the ordinary shares

Share repurchases

No shares have been bought back in the year. The most recent authority to purchase ordinary shares for cancellation was granted to the Company on 30 April 2014 and expires on the date of the next Annual General Meeting ("AGM"). The Company is proposing that its authority to buy back shares be renewed at the forthcoming AGM.

Continuation Vote

The Company's Articles of Association provide that the Directors must propose a continuation vote to the shareholders of the Company at the Annual General Meeting ("AGM") to be held in April 2015, and then every second AGM following, to allow the Company to continue in its current form. Resolution 12 provides shareholders with that vote which, as an Ordinary Resolution, requires a positive simple majority to be passed.

The Company has had a positive start since IPO in December 2011, growing from the initial 19 investments to 36 in the following three years, delivering a Total Shareholder Return of 41.25% since IPO to 31 December 2014, trading at a premium to NAV throughout that period, and delivering on all its targets. The Management Board considers that it is in shareholders' interests for the Company to continue in its current form in order to deliver on those targets and enhance shareholder value. The Management Board therefore has no hesitation in recommending that shareholders vote in favour of the resolution, as the Directors intend to do with their own shares. This will enable the Company to continue as an investment company for a further two years until the AGM to be held in 2017 at which point the continuation vote will be put to shareholders once again.

Details of substantial shareholders

As at 10 March 2015, being the latest available information, the management are aware of the following shareholders holding more than 5% of the Company's ordinary shares.

VALUATION

The Management Board is responsible for carrying out the fair market valuation of the Company's investments, which it then presents to the Supervisory Board. The valuation is carried out on a six monthly basis as at 30 June and 31 December each year. An independent professional third party reviews this valuation.

The valuation is determined using the discounted cash flow methodology. The cash flows forecasted to be received by the Company or its subsidiaries, generated by each of the underlying assets, and adjusted as appropriate to reflect the risk and opportunities, have been discounted using project specific discount rates. The valuation methodology is the same one used for the valuation of the portfolio last year and as part of the Company's mid-year results.

The Company uses the following macroeconomic assumptions for the cash flows:

Macro-economic assumptions

Deposit rate sensitivity

The project cash flows are correlated with the deposit rates. The table below demonstrates the effect of a change in deposit rates compared to the macroeconomic assumptions above.

1 Sensitivity in comparison to the assumptions as set out in the macroeconomic assumptions table above

Lifecycle costs sensitivity

Out of the 36 projects in the portfolio, 12 project companies retain the lifecycle obligations. The remaining 24 projects have this obligation passed down to the sub-contractor. The table below demonstrates the impact of a change in lifecycle costs.

1Sensitivity applied to the 12 projects retaining the lifecycle obligation, i.e. the obligation is not passed down to the sub-contractor. These projects represent 52% of the total portfolio value as at 31 December 2014.

The Management and Supervisory Boards have approved the net asset value calculation on an Investment Basis as at 31 December 2014.

FINANCIAL RESULTS

BASIS OF ACCOUNTING

The Company has prepared its financial statements under IFRS. In accordance with IFRS 10, IFRS 12 and IAS 27 the Company (an Investment Entity) does not consolidate certain subsidiaries, in a similar manner to the Company's pro forma investment basis tables which continue to be included in this section of the Report of the Management Board. As a result the Company no longer consolidates on a line by line basis its investments in PPP assets that are subsidiaries, but instead recognises them as investments at fair value through profit or loss.

INCOME AND COSTS

Group Level Corporate Cost Analysis

The table below is prepared on an accruals basis.

1 The increase in interest and other finance costs is for the most part due to the larger amount drawn on the corporate credit facility throughout the year ended 31 December 2014 in comparison to the amount drawn in 2013.

2 The Company is an internally managed AIF with no fees payable to external managers. Further detail of staff costs is provided in the Remuneration section.

Ongoing Charges

The "Ongoing Charges" ratio was prepared in accordance with the AIC-recommended methodology. The ratio represents the reduction in shareholder returns as a result of recurring operational expenses incurred in managing BBGI.

The Company is internally managed and as such is not subject to performance fees or acquisition-related fees.

BALANCE SHEET

Pro forma Balance Sheet

(1) Under IFRS the forward currency contracts are presented at fair value.

Summary net corporate cash flow

Cash received from the portfolio of investments during the reporting period was by way of distributions including dividends, interest payments, capital and principal repayments amounting to £33 million. These distributions are treated as a transfer from portfolio value to net cash at the Group level. After deducting cash outflow for Group-level costs, including those costs generated from operating activities and net finance costs, the net cash receipts for the period were £26.9 million.

The table below summarises the cash received by the holding companies from the investments net of the cash outflows for the Group level corporate costs.

(1)Cash outflow resulting from all Group level corporate costs paid during the year.

Three year comparative of Investment Basis NAV

The Company did not complete any further capital raise in 2014 but did experience further NAV growth. The published NAV increased by 3.57% to £ 465.29 at 31 December 2014 (2013: £ 449.25 million). This equates to a growth in NAV per share of 3.49% to 109.2 pence at 31 December 2014 (2013: 105.6 pence).

Financing

· Tap issue

The Company has the ability to issue up to 10% of its issued share capital via tap issues in order to finance further acquisitions. The Company does not use structural gearing.

· Credit facility

In July 2012 the Company entered into a three year £35 million revolving credit facility and letter of credit option with three lenders (The Royal Bank of Scotland plc, National Australia Bank Limited and KfW IPEX-Bank GmbH) to finance acquisitions, to provide letters of credit for outstanding equity obligations and for working capital purposes. The arrangement fee was 1.5% and the margins are 2.25% over LIBOR when loan to value is less than 25% and 2.75% over LIBOR when loan to value is greater than or equal to 25%. The commitment fee is 1.00% of the available commitment per annum.

As of 31 December 2014 £1.3 million was available to be drawn down. The Company has utilised £21 million of the facility to provide three letters of credit.

At 31 December 2014 the Company was not in breach of any of the covenants under the credit facility.

In accordance with the AIC Code of Corporate Governance Principle 21, the consequences of a material breach of the borrowing covenants are stated below. On and at any time after the occurrence of an event of default which is continuing the agent may, and shall, if so directed by the majority lenders:

a) Cancel the total commitments;

b) Declare that all or part of the amounts drawn, together with accrued interest, and all other amounts accrued or outstanding under the agreement be immediately due and payable;

c) Declare that all or part of the drawn amounts be payable on demand, at which time they shall immediately become payable on demand by the agent on the instructions of the majority lenders;

d) Declare that cash cover in respect of each letter of credit is immediately due and payable;

e) Declare that cash cover in respect of each letter of credit is payable on demand at which time it shall immediately become due and payable on demand by the agent on the instructions of the majority lenders;

f) Exercise or direct the security agent to exercise any or all of its rights, remedies, powers or discretions under the agreement.

· Refinancing of corporate credit facility (Post balance sheet event)

In January 2015 the Company secured a new three year Revolving Credit Facility of £80 million from ING Bank and KfW IPEX-Bank. BBGI retains the flexibility to consider larger transactions by virtue of having structured a further £100 million incremental accordion tranche, for which no commitment fees are paid, which allows it to increase the facility to £180 million, at BBGI's option. This facility replaces the £35 million facility with Royal Bank of Scotland, National Australia Bank and KfW IPEX-Bank, which was due to expire in July 2015.

The new facility will be used primarily to fund acquisitions and provide letters of credit for investment obligations, and the intention will be to repay the facility from time to time through equity fundraisings.

The term of the facility is three years, expiring in January 2018. The borrowing margin has decreased from 225 bps under the old facility to 185 bps over LIBOR under the new facility.

The larger facility gives BBGI the ability to complete larger portfolio transactions or acquisitions from multiple vendors very quickly. The revolving facility can be repaid through a future equity issue which is more cost efficient for investors. This new credit facility will support the continued growth of the business.

· Project refinancing

Apart from the Royal Women's Hospital and the Northern Territory Secure Facility, the individual PPP/PFI projects in the portfolio all have long term amortising debt in place which does not need to be refinanced. The Royal Women's Hospital has one tranche of debt which needs to be refinanced between 2017 and 2021. The Northern Territory Secure Facility asset has a refinancing need in 2016 when the senior debt facilities expire.

Women's College Hospital has long term amortising debt in place, but it is expected that this will be refinanced sometime after construction completion in March 2016 and before July 2019 when there is an increase in the lending margin and a cash sweep in favour of the lenders, both of which act as an incentive to encourage refinancing. The valuation used for Women's College Hospital therefore assumes that the project will be refinanced during this period.

As at 31 December 2014, the weighted average PPP project concession length remaining was 24.2 years and the weighted average portfolio debt tenor was 21.3 years. BBGI is not aware of any recourse to the Company for debt financing at the project entity level.

Status for taxation

The Company is not liable for any Luxembourg tax on profits or income, nor are distributions paid by the Company subject to any Luxembourg withholding tax. The Company is, however, liable to a subscription tax of 0.05% per annum of its net asset value, such tax being paid quarterly on the basis of the value of the aggregate net assets of the Company at the end of the relevant calendar quarter. No stamp duty or other tax is payable in Luxembourg on the issues of Shares. No Luxembourg tax is payable on the realised capital appreciation of the assets of the Company.

The Company continues to monitor the OECD's Base Erosion and Profit Shifting (BEPS) project and any potential impact it may have on the sector. The BEPS project is still at consultation stage and as a result it is too early to determine the effect it could have, if any on the Company's cash flows if implemented.

Going concern basis of accounting

The Management Board has examined significant areas of possible financial risk including cash and cash requirements and has considered the forthcoming continuation vote. It has not identified any material uncertainties which would cast significant doubt on the Company's ability to continue as a going concern for a period of not less than 12 months from the date of approval of the financial statements. The Management Board has satisfied itself that the Company has adequate resources to continue in operational existence for the foreseeable future. After due consideration, the Management Board believes it is appropriate to adopt the going concern basis in preparing the financial statements. Please see note 2 to the financial statements.

MARKET DEVELOPMENT

BBGI's growth strategy in the current market

In a low interest rate environment, PPP/PFI assets, with stable, predictable, inflation-linked cash flows derived from credit worthy government counterparties are seen as an attractive investment proposition by many investors. As a result, there have been several new market entrants who are aggressively bidding on the limited supply of PPP/PFI product and causing prices to increase.

The secondary market for social and transport infrastructure is expected to continue to remain very competitive throughout 2015. As a result, discount rates are expected to continue to tighten in the sector with an expected corresponding positive effect on the valuation of our existing assets.

While BBGI should benefit as increased pressure on pricing may warrant an increase in valuation of the existing portfolio, it also creates an environment where the potential to overpay for new assets remains high. In this increasingly competitive environment, vendors are requiring prospective purchasers to price in lifecycle savings, refinancing gains, aggressive tax structures, portfolio efficiencies and other upsides. The result is that the margin for error has decreased and it is increasingly difficult to find acquisitions that will be accretive to shareholders.

BBGI followed a path of disciplined growth in 2014 and will be selective and surgical in its approach going forward and may buy assets on an opportunistic basis. Following this principle, BBGI declined to bid on several secondary market transactions as they were not expected to be accretive for shareholders. The Management Board believe that this approach is in the best interest of shareholders and ultimately the Company avoids incurring costs related to unsuccessful bids. Due to the internal management structure, the interests of the management of BBGI and its shareholders are aligned and management is not incentivised to grow the Company to the detriment of its return targets.

Despite the increasingly competitive market in 2014, the Management Board completed the acquisition of 19 separate interests in new and existing projects from a variety of parties for total consideration of approximately £120.4 million. These acquisitions were done on favourable terms and were accretive.

A key component of our growth strategy to-date has been to consider opportunities in creditworthy countries outside the UK. Often the competition is not quite as intense and more attractive pricing and terms can be obtained. This approach will continue in 2015.

Another key component of our growth strategy will be to consider projects in the bidding / construction stage as we believe the pricing on construction projects is more attractive on a risk adjusted basis. Often the competition for construction assets is less intense as some investors require current yield, do not have sufficient and adequate asset management staff to oversee construction assets, or have mandates that restrict investment at this stage.

The construction risk on PPP/PFI projects is described below in the Governance section under the heading 'Risk and Risk Management'.

The Management Board expect it will be able to acquire construction assets at higher discount rates during the construction stage and will be well positioned to realise the potential value uplift when the assets become operational. In addition, projects acquired at this stage often have pre-emption rights which can facilitate further investment on favourable terms.

In 2014, the Management Board oversaw the successful transition of two projects from construction phase into the operational phase. The Management Board further expects that two more projects will transition into the operational phase in 2015. The Management Board is actively looking to replenish some of this construction stage exposure by pursuing select primary projects at the bidding phase.

BBGI is part of a consortium that was shortlisted for the North Commuter Parkway and Traffic Bridge Project, a primary P3 development in the city of Saskatoon, Canada. Three teams have been shortlisted from seven applicants. This represents an exciting opportunity for BBGI and could provide an attractive alternative to only acquiring assets in the secondary market. BBGI intends to pursue the strategy further and will selectively consider development opportunities so long as, in aggregate, construction assets remain below 25% of the portfolio and they do not compromise the Company's ability to satisfy its dividend targets.

We are committed to maintaining our pricing discipline in 2015 regardless of whether we are considering assets in construction or in operation. We will continue to focus on our core markets in Australia, Canada, US, UK, and Germany but will also look to expand in other creditworthy European countries.

UK

The UK PPP/PFI market is considered one of the most mature and robust in the world. Over 725 PFI projects delivering investments of over £57 billion have been signed since 1992. As a result we expect it will continue to be the largest source of secondary market transactions in principle.

The secondary market in the UK still appears to be the most active market globally, although more equity investors are chasing a similar or reduced number of transactions. This appears to have resulted in a trend of lower discount rates for stable mature secondary projects.

The outlook for the UK primary PFI/PPP market is subdued. The 2014-15 projected capital spending by the private sector under PFI contracts is £2 billion and the projected capital spending for 2015-16 onwards is £2.9 billion.

BBGI will continue to participate cautiously and selectively in auctions but also actively look for negotiated transactions. Our focus will be on smaller, more opportunistic investments where the competition is less intense.

Canada & USA

Canada has one of the most mature and stable P3 markets in the world. The country, with over 150 deals to have reached financial close, is the world's second most prolific P3 market, behind the UK. Half a dozen provinces, approximately 15-plus municipalities and the federal government are the major drivers of the market. 

Over the years, Canada's PPP market landscape has evolved considerably. Provincial bodies such as Infrastructure Ontario, Partnerships BC, Alberta Infrastructure, Partnerships New Brunswick and Société Québécoise des Infrastructures have, historically, been focused on social infrastructure, particularly within the healthcare sector. The country's long and positive experience with PPPs and the maturity of the marketplace has prompted many Governments (Federal, Provincial and Municipal) to pursue larger transportation projects in 2014, with more to come in 2015. 

While Canada has seen significant movements in terms of transportation infrastructure there is still a robust pipeline of small and mid-sized social infrastructure projects. These factors have combined to established Canada as one of the world's most significant PPP markets in both volume and capital size of transactions.

The secondary market has great potential throughout Canada, considering that 138 deals have reached financial close since 2004. The Canadian secondary market is expected to be active in 2015 as projects developed over the last couple of years come into operations and may be offered for sale. With 6 projects in Canada, BBGI is a well-known market participant and has very good exposure to deal flow.

The future is bright for the US PPP market. The USA represents a potentially vast infrastructure market with figures of US$2.32 trillion quoted as the level of infrastructure required over the next five years.

The US PPP market has diversified beyond transportation infrastructure to include a number of social and water-oriented projects as well.

The US has seen a dramatic increase in the number and diversity of PPP projects in recent years. Currently there are 16 high profile transactions in procurement and as a result more than twice as many PPPs could reach financial close in 2015 than in 2014. 

Having completed its first investment in the US in January 2014, BBGI is familiar with the nuances of this market and will look to expand its presence should attractive investment opportunities become available.

Continental Europe

The market differs from country to country quite significantly.

Greenfield infrastructure procurement was particularly strong during the year in countries which traditionally have had only smallish pipelines. While procurement was buoyant in the Netherlands, Turkey, Scotland and Ireland, it was less so in France and Germany.

The Netherlands, Scandinavia, Belgium, and Slovakia are expected to continue on the path to procure infrastructure projects via the PPP route. These are some of the markets which are expected to have the greatest activity in Europe.

BBGI currently does not focus on Southern and much of Eastern Europe given the weak credit ratings of these countries.

Australia

Australia is considered a strong market for PPP investment as it enjoys a stable economy and a growing popularity of PPP model among different states.

New South Wales ('NSW') and Victoria have been responsible for procuring the majority of Australian PPPs. Of the 131 contracted PPPs to date, NSW has closed 32 deals and Victoria 46. Over the past three years, states including Queensland and Western Australia have also successfully utilised PPP structure and the federal government has closed nine PPPs.

Within the PPP pipeline, rail and light rail transactions make up the bulk of the projects - including the North West Rail Link OTS, Cranbourne-Pakenham Rail Corridor PPP and the Sydney Light Rail project. In addition, Sydney Rapid Transit, Canberra Light Rail and Newcastle Light Rail are likely to utilise PPP delivery.

BBGI has three large operational assets in Australia and is widely viewed as one of the more active secondary investors in the market. We will continue to monitor the market and are hopeful that some select opportunities may emerge in 2015.

In summary, the Company is actively pursuing acquisitions from third parties in its core markets. BBGI has a reasonable pipeline of opportunities which are being considered. BBGI will continue to remain extremely focused on maintaining pricing discipline and being selective.

ADMINISTRATION

Incorporation and administration

The ordinary shares were created in accordance with Luxembourg law and conform to the regulations made thereunder, have all necessary statutory and other consents, and are duly authorised according to, and operate in conformity with, the Articles of Incorporation.

Articles of incorporation

The Articles of Incorporation were approved and formalised before a Luxembourg notary public on 24 November 2011. The Articles are filed with the Luxembourg Registre de Commerce et des Sociétés and are published in the Mémorial. The Articles may be amended in accordance with the rules set out in article 32 of the Articles.

A copy of the Articles is available for inspection at the Company's registered offices during normal business hours.

Directors' and Officers' liability insurance

The Company has taken out Directors' and Officers' Liability Insurance on behalf of the Directors of the Boards at the expense of the Company.

Donations

The Company made no political donations during the year. Total charitable donations for the year did not exceed £500.

Material contracts

During the year ended 31 December 2014, as required under the AIFMD, the following service contracts were entered into:

§ Depository Bank and Paying Agent Agreement: RBC Investor Services Bank S.A.

§ Service Agreement as Compliance Officer: The ICE Breakers S.A.

§ Service Agreement as Internal Auditor: Grant Thornton ABAX Consulting

§ Service Agreement for Risk Management Services: Grant Thornton ABAX Investment Services

GOVERNANCE

INTRODUCTION

The Company is internally managed with a two-tier governance structure that comprises a Supervisory Board and a Management Board (together, the "Boards"), with the responsibilities of each as indicated in this report.

The Company is regulated by the CSSF under Part II of Luxembourg Law of 17 December 2010 on undertakings for collective investments and is subject to the Luxembourg Law of 12 July 2013 on Alternative Investment Fund Managers ("AIFM Law") that implemented the EU Alternative Investment Funds Managers Directive ("AIFMD") into national legislation.

The Boards recognise the importance of a strong corporate governance culture and have put in place a framework for corporate governance which they believe is appropriate for the Company. BBGI is a member of the Association of Investment Companies (the "AIC"). As such, it reports against the AIC Code of Corporate Governance (the "AIC Code"), which principles and recommendations are carefully considered, and follows the AIC's Corporate Governance Guide for Investment Companies (the "AIC Guide").

The applicable version of the AIC Code (February 2013), as explained by the AIC Guide, addresses all the principles set out in the 2012 edition of the UK Corporate Governance Code (the "UK Code"), as well as setting out additional principles and recommendations on issues that are of specific relevance to the Company. A revised version of the UK Corporate Governance Code was published during the year under review; for those companies that follow this code, it will apply to reporting periods beginning on or after 1 October 2014. As an AIC member however, the Company has followed the February 2013 AIC Code and Guide for the 2014 reporting period. The Company has worked throughout the year with its company secretary in order to ensure it complies with the AIC Code, and where it does not, to explain why. The Boards consider that reporting against the AIC Code, and by reference to the AIC Guide (which incorporates the 2012 UK Code), provides appropriate information to shareholders.

AIFM

During the year under review, the Company applied to, and received authorisation from, the CSSF to act as an authorised Alternative Investment Fund Manager ("AIFM") with effect from 7 October 2014. Being so authorised, the Company is now subject to increased regulatory supervision from the CSSF. Having completed all key engagements required for compliance with the AIFM Law, the Company expects a recurring cost of compliance of approximately £150,000 per annum.

During the year under review there have been no material changes in respect to Art. 20 Para. 2(d) of the AIFM Law which would warrant further disclosure to investors.

Delegated Functions

Amongst other requirements, the Company is required under the AIFM Law to have dedicated Risk Management (to include portfolio management), Compliance, and Internal Audit functions, each of which is required to be both functionally and hierarchically separate from the functions of the operating units. Accordingly, the following Third Party Service Providers, who are experts in their respective fields, have been appointed to these roles:

§ Compliance: The ICE Breakers S.A.

§ Internal Audit: Grant Thornton ABAX Consulting

§ Risk Management: Grant Thornton ABAX Investment Services

Notwithstanding these appointments, the Company retains overall responsibility for the correct and effective operation of the delegated functions. Accordingly, the members of the Management Board have been appointed as Designated Board Members ("DBMs") with oversight and control responsibilities for their respective functions.

§ Compliance

The responsibilities of the Compliance Officer are to establish the Company's compliance risk matrix, its compliance plan and the required documents necessary to perform the monitoring duties, and then to ensure the effective operation of the Company's compliance department and the proper performance of the plan.

§ Internal Audit

The Management Board is responsible for establishing and documenting in writing the scope of the Company's internal control system to ensure that, amongst other things, the Company is able to operate effectively, comply with Statute and Regulation, business objectives and internal policies and procedures, and safeguard the Company's assets. The Internal Auditor is responsible for providing the Management Board with an independent review of the internal control system in place, and report deficiencies of these controls as well as suggest appropriate action if so required.

§ Risk Manager

The appointed Risk Manager reports directly to the DBM within the framework of the permanent risk management function which has been organised to ensure the Risk Manager has the appropriate authority and access to all relevant information necessary to fulfil its duties. This includes inter alia: advising on the Company's risk profile, changes in the current risk "universe" and new/potential future risks, and the provision of updates and ongoing assessments; formalising the risk management process; identifying, assessing and monitoring key operational risks faced by the Company; and provision of quarterly risk assessment updates.

Internal Controls - General

The Management Board is responsible for setting up the Company's system of internal control, and the Supervisory Board for reviewing its effectiveness. The Management Board has therefore established an ongoing process designed to meet the particular needs of the Company in managing the risks to which it is exposed.

In addition to the above, at each quarterly meeting the Supervisory Board monitors the Company's investment performance against its stated objective, and reviews its activities to ensure that the Management Board is adhering to the investment policy and guidelines. During these meetings, the Management Board (which has agreed clearly defined investment criteria, returns targets and risk appetite) reports in detail on these issues including operating performance, cash projections, and investment valuations. In addition, the company secretary reports in respect of compliance matters.

The Company recognises that control systems can only seek to manage and mititgate the risks of failure to achieve business objectives, they cannot eliminate them. By their very nature, these procedures are not able to provide absolute assurance against material misstatement or loss.

RISK AND RISK MANAGEMENT

The Boards consider the process of identifying, evaluating and managing the significant risks faced by the Company on an ongoing basis. The Management Board has established internal controls to manage these risks by reference to a risk register, and reviews and monitors this register and the various risks on at least a quarterly basis. The Supervisory Board also reviews the key risks affecting the Company at each scheduled Board meeting, by reference to said risk register. If a new risk develops or the likelihood of a risk occurring increases, where appropriate and to the extent possible, a mitigation strategy is developed and implemented, together with enhanced monitoring. The Audit Committee also reviews the effectiveness of the Company's risk management and internal control systems at least annually.

The Management Board set out the material risks relating to the Company's portfolio as at 6 December 2011 in the Company's IPO prospectus, and updated them in the two prospectuses that followed dated 26 June 2013 and 19 November 2013; all of these prospectuses are available on the Company's website. General areas of risk and the processes are set out below.

Economic, external and financial risks

§ The Company has investments in project entities and business activities in different jurisdictions and external, economic and financial factors have the capacity to impact these. In particular the performance of the investments can be affected by changes in macro-economic factors such as foreign exchange, inflation rates and interest rates.

§ A significant proportion of the Company's underlying investments are denominated in currencies other than Pounds Sterling. The Company maintains its financial statements, prepares the valuation and pays distributions in Pounds Sterling. Accordingly, fluctuations in exchange rates between Pounds Sterling and the relevant local currencies will directly affect the value of the Company's underlying investments, the distributions and the ultimate rate of return realised by investors. The Company has implemented currency hedging arrangements in respect of the non-Sterling investments denominated in AUD, CAD, EUR, NOK and USD for a period of four years in order to mitigate some of this risk.

§ The revenues and expenditure of project entities developed under PPP/PFI are frequently partly or wholly subject to indexation. From a financial modelling perspective, an assumption is usually made that inflation will increase at a long-term rate (which may vary depending on country and prevailing inflation forecasts). The effect on investment returns if inflation exceeds or falls below the original projections for this long-term rate is dependent on the nature of the underlying project earnings, the extent to which the project entity's costs are affected by inflation and any unitary charge indexation provisions agreed with the client on any project. The Company's ability to meet targets and its investment objectives may be adversely or positively affected by higher or lower than expected inflation. There is also a risk that general operating costs may be higher than forecast in the financial model. This may inter alia be due to inflation. Project entities typically mitigate that risk to some extent by seeking to match the indexation of the revenues to the indexation of the operational cost.

§ The project entities typically have some cash reserves and deposits. From a financial modelling perspective, an assumption is usually made that the deposits can be placed at a forecast rate which varies depending on country and historical long term averages. The effect on investment returns if deposit rates exceed or fall below the original projections for this long-term rate is dependent on the amount of deposits.

§ Different laws and regulations apply within the jurisdictions the Company and the project entities are located, and the Company and investments in such countries may be affected by changes in law, tax and accounting regimes, directives, political climate, and other changes that cannot be easily foreseen. The underlying financial models of project entities and the business model of the Company are based on assumptions regarding the prevailing tax, accounting and legal frameworks. Any change in those assumptions could affect the Company's ability to meet targets and its investment objectives. Where possible, this will be mitigated, but there may be instances where this will not be possible. The Company and the service providers for the underlying project entities continually monitor any potential or actual changes.

§ To the extent that the Company does not have cash reserves pending investment, the Company expects to bridge finance further investments by way of the credit facility or by issuing additional equity. Although the Company has a credit facility in place since July 2012 and refinanced in January 2015, there can be no guarantee that this will always be the case or that it will be able to issue further shares in the market.

§ The Company's debt facility has a floating rate which is not hedged. The Company's performance may be affected by changes in interest rates. The underlying project entities have sought to hedge substantially all their floating rate interest liabilities against changes in underlying interest rates.

Operational / asset related risks

§ Although it is intended that the main construction and operational risks will be passed on by the project entities contractually to the relevant subcontractor or service providers, or covered by insurance (including any penalty payments or deductions to the client), there is some risk that the anticipated returns of the project entities will be adversely affected by underperformance or performance failures.

§ To the extent that the actual costs incurred by a project entity differ from the forecast costs, and cannot be passed on to subcontractors, e.g. insurance cost, the expected investment returns may be adversely affected.

§ During the life of an investment, components of the project assets (such as asphalt in the case of roads and elevators, roofs and air handling plants in the case of buildings) are likely to need inter alia to be replaced or undergo a major refurbishment. The timing and costs of such replacements or refurbishments is forecast, modelled and provided for by each project entity based upon manufacturers' data and warranties and specialist advisers are usually retained by the project entities to assist in such forecasting of life-cycle timings, scope of work and costs. However, various factors such as shorter than anticipated asset lifespans, vandalism, or underestimated costs and/or inflation higher than forecast may result in life-cycle costs being higher than the financial model projections or occurring earlier than projected. The contractual matrix for the current portfolio is intended to pass this risk down to subcontractors (in particular for the social infrastructure projects), but where this risk is retained (generally on transport projects) or where it is not otherwise effectively passed down to subcontractors, any cost implication will generally be borne by the affected project entities.

§ If there is a subcontractor service failure or subcontractor insolvency which is sufficiently serious to cause a project entity to terminate or to be required by the client to terminate a subcontract, or the relevant subcontract expires prior to the end of the concession period (which is the case on some road projects), there may be a loss of revenue during the time taken to find a replacement subcontractor. In addition, the replacement subcontractor may levy a surcharge to assume the subcontract or charge more to provide the services. Despite available securities such as parent company guarantees and letters of credit, these losses and costs may not be recoverable from the defaulting subcontractor.

§ The client is generally given rights of termination under PPP/PFI contractual agreements. The compensation (if any) which the project entity is entitled to receive on termination will depend on the reason for termination and the terms of the project agreement. In some instances, the compensation will not include amounts designed specifically to repay the equity investment. Where termination is for client default or the client voluntarily terminates the project agreement without fault on either side, the compensation is likely to extend to some of the lost equity returns, although this cannot be guaranteed. The Company has currently no indication that any of the clients intend to voluntarily terminate the agreement or of any potential client default.

§ The costing of, and pricing for, infrastructure projects relies on large and detailed financial models. There is a risk that errors may be made in the assumptions, calculations or methodology used in a financial model. In such circumstances the figures and/or the returns generated by the project entity may be different to those estimated or projected. The risk is mitigated for project entities where the models have been updated a number of times and /or operational model audits have been undertaken.

§ Typically the client will have the right to terminate the project agreement where the project entity or a shareholder or subcontractor (or one of their employees) has committed bribery, corruption or other fraudulent act. In these circumstances it is likely that the majority, if not all, of the investment will be lost. The Company has a compliance system in place and is not aware of any such acts which could trigger that risk.

§ In some projects, a refinancing may be required to repay the project entity's obligations as they fall due. For the existing portfolio, in relation to senior debt financing, this applies to the Royal Women's Hospital project and only with respect to one of two tranches of bonds, which must be refinanced between 2017 and 2021, and Women's College Hospital where the bond expires in 2018 and in case no refinancing can be arranged a cash sweep applies where all net operational cash will be used to repay the bond. Additionally the Northern Territory Secure Facility asset has a refinancing risk in 2016 when the senior debt facilities expire. Where a project carries a requirement to refinance, there is a risk that such refinancing cannot be secured at the forecasted financing costs or at all. This could have an impact on the timing and/or amounts of distributions or other payments in respect of investment capital by such project entity. The Company believes that the current refinancing assumptions in the models are adequate.

Strategic and management risks

§ The Company seeks to provide its shareholders with a minimum 5.76 pence per share per annum target dividend and a 7% to 8% IRR on the £1 IPO issue price based on long term stable and contracted Government-backed revenue streams which are inflation linked. The Company's portfolio value is prepared semi-annually by the Management Board in good faith; it is then independently reviewed by a professional valuer, and finally reviewed/audited by KPMG. However, there is a risk that the Company may fail to reach the return objectives. The ultimate realisation of the market value of an asset depends to a great extent on judgements, economic and other conditions beyond the control of the Company, and valuations do not necessarily represent the price at which an investment can be sold.

§ Further investments intended to be made by the Company comprise interests in project entities which are not publicly traded or freely marketable and often subject to restrictions on transfer; such investments may, therefore, be difficult to value. This could lead to an overpayment for investments during an acquisition. The Company has internal processes in place which seek to minimise these risks through regular review of the peer group, discussions with advisors, regular external confirmation of the portfolio value, and the annual audit process.

§ The due diligence process undertaken during an acquisition may not reveal all facts and circumstances relevant to a particular investment. The Company seeks to mitigate this risk where possible by a structured due diligence process, typically with the support of external advisors, market knowledge, site visits and protections in the acquisition agreements.

§ A single subcontractor may be responsible for providing services to various project entities in which the Company will invest, and the Company has set no limit as to the number of project entities to which a single subcontractor may provide services. In such instances, the default or insolvency of such single subcontractor could adversely affect a number of the Company's investments. A similar situation may apply with respect to default, impairment or insolvency relating to financial counterparties, such as banks and insurance companies. Any credit support provided in respect of the performance of the relevant obligation may not be sufficient and may not respond at all. This could have a material adverse effect on the project entity concerned and might not only reduce financial returns but could adversely affect the Company's reputation.

o Bilfinger Real Estate Asset Management (BREAM) is the day-to-day management service provider for the majority of these project entities and as such there is some concentration risk from this relationship.

§ Where the project entities have made deposits with financial institutions, these are typically short or medium term. By monitoring the exposure across the portfolio, the Company seeks to mitigate any over-reliance on any single counterparty and ensure that these institutions have an acceptable credit rating.

§ The concessions granted to project entities are predominantly granted by a variety of public sector clients in the UK, Canada, Australia, Germany, Norway and the US. Although the Management Board believes such public sector clients generally represent a low counterparty risk, the possibility of a default remains and has increased in recent years, and may vary from country to country. This risk could increase if the Company has one public sector client which is the counterparty to more than one investment. The Company is currently invested in the UK, Canada, Australia, Germany, Norway and the US and has a wide range of public clients.

§ To assist the Company in managing any share price premiums or discounts to NAV, the Company has the ability to make market purchases of up to 14.99% per annum of the ordinary shares in issue. In addition, a continuation vote is available to shareholders at the Company's forthcoming annual general meeting on 30 April 2015, and at the annual general meeting held every two years thereafter.

§ The success of the Company will depend inter alia upon the skill and expertise of the Management Board and the individuals employed by BBGI Management HoldCo in identifying, selecting, acquiring and managing the investments. There is also no certainty that key investment professionals will continue to work for the Group for the long-term.

§ The Company and its business may be impacted by bribery, fraud and corruption. The Company has a compliance system in place and is not aware of any such acts which could trigger that risk.

REMUNERATION

Supervisory Board remuneration

The Supervisory Board members are the Company's Non-Executive Directors and are paid a fixed quarterly fee. These fees are considered annually by the Supervisory Board, acting as the Remuneration Committee, based on the advice and recommendations of the Management Board. No member of the Supervisory Board is entitled to vote on his own remuneration. Supervisory Board members are not entitled to any other fees, pension payments, incentive plans or any other form of compensation, with the exception of ex gratia fees such as those described below which are considered on a case-by-case basis.

The 2014 fee review concluded that an increase in the fees for the members of the Supervisory Board was appropriate because the Company has grown substantially since its IPO in 2011, increased regulation has significantly increased the responsibilities of the members, and fees had remained unchanged since then .The annual fee for the Chairman of the Supervisory Board was increased to £55,000 (2013: £45,000) and the annual fees for both the Senior Independent Director and the Chairman of the Audit Committee increased to £42,500 (2013: £32,500).

The aggregate fee for the members of the Supervisory Board during 2014 was £140,000 (2013: £181,703).The figure for 2013 included an amount of £11,703 paid to Thomas Toepfer who resigned from the Supervisory Board in May 2013 and was not replaced. The total fees for 2013 also included an ex gratia amount of £60,000 (£20,000 for each Director) for extra work involved in the two capital raises carried out during 2013.

Management and Staff Remuneration

Introduction

The Company believes that an appropriate remuneration programme for each Manager and member of staff plays an important role in achieving the short and long-term business objectives that ultimately drive business success and alignment with long-term shareholder goals.

The level and structure of the remuneration to which Board members and employees of BBGI Management HoldCo are entitled are reviewed on an annual basis by the Supervisory Board acting as the Company's Remuneration Committee. During this process, appropriate benchmarking with comparable listed businesses is undertaken with the intention of ensuring that the remuneration programme remains competitive. The Supervisory Board makes appropriate recommendations and the Management Board implements them. It should be noted that the annual review may not result in any change in the levels of remuneration.

Remuneration Programme Objectives

The objectives of the remuneration programme are to:

§ attract and retain highly qualified employees with a history of proven success;

§ align the interests of the Group's employees with Shareholders' interests, the execution of the Company's investment policy and fulfilment of the Company's investment objectives;

§ establish performance goals that, if met, are expected to improve long-term Shareholder value; and

§ link compensation to performance goals and provide meaningful rewards for achieving them.

Under the programme, every employee of BBGI Management HoldCo benefits from an annual base salary payable monthly in arrears.

Management Board Remuneration

Each member of the Management Board receives an annual base salary payable monthly in arrears and participates in a long-term incentive plan ("LTIP"). In addition, Mr Schramm and Mr Ball participate in a short-term incentive plan ("STIP") and Mr Denny can receive an annual bonus. No member receives an additional fee for acting as a member of the Management Board.

Management Board Contracts

Since the IPO in December 2011, the Company has grown substantially and the Supervisory Board determined that a detailed external review of the remuneration of Mr Schramm and Mr Ball was appropriate, in order to ensure that remuneration remained competitive. Accordingly, PwC (UK) was engaged to undertake the review, at a cost to the Company of GBP 20,000. Subsequent to this review, new remuneration packages were agreed with Mr Schramm and Mr Ball.

Mr Schramm and Mr Ball: Service Contracts

BBGI Management HoldCo S.à r.l. has agreed separate service contracts with Mr Schramm and Mr Ball (each being a "service contract"). These contracts are on identical terms and conditions, save that payments to Mr Schramm are made in Euros and those to Mr Ball in Canadian Dollars. Following the PwC review, the Company amended the terms of each service contract as follows:

§ Base salaries and car allowances were increased to competitive levels from May 2014

§ Threshold, Target and Maximum levels of Short Term Bonus were increased to 50%, 100% and 125% of average salary respectively. (Previously 0%, 48% and 80%)

§ Threshold Target and Maximum levels of LTIP awards were increased to 50%, 100% and 150% of salary at the date of grant. (Previously 50%, 100% and 100%)

§ LTIPs granted after December 2014 will be satisfied in Company shares. (Previously all cash)

§ A new expected shareholding of 150% of salary was set. This can be attained over 5 years.

§ Malus clauses enabling unpaid bonuses to be withdrawn are included for both STIP and LTIP

§ Notice periods to/from the company are aligned at 12 months from May 2016. Previously the company needed to give 24 months' notice.

Mr Denny: Contract of Employment

BBGI Management HoldCo and Mr Denny entered into a contract of employment in February 2012, which is terminable on three months' written notice by either party.

From March 2015 onwards both parties agreed to change from a Contract of Employment to a Management Contract. As a result the notice period has now increased from three months to six months for each party.

Fixed remuneration

Following the 2014 review, the Pound sterling equivalent of the combined annual base salaries (payable in Euro/Canadian Dollars) for the members of the Management Board increased to GBP 718,745 (2013: GBP 545,552). In addition, both Mr Schramm and Mr Ball received a monthly car allowance during the year amounting to GBP 24,680 (2013: GBP 24,934) and a supplementary annual payment of 5% of their salary to provide pension, retirement or similar benefits.

Short-Term Incentive Plan ("STIP") and Bonus

Under the STIP for Mr Ball and Mr Schramm awards are subject to the achievement of pre-determined performance objectives set by the Supervisory Board at the beginning of the relevant financial year. The maximum amount payable under the STIP is 125% of the relevant executive's annual salary, with a target performance to produce an entitlement of 100% of salary and a minimum performance threshold to produce 50%. For 2014 only, the relevant annual salary is the entitlement at the year end. Otherwise it is the average salary in the year.

The Supervisory Board is responsible for determining both whether the relevant performance objectives (which may be financial and non-financial) have been satisfied and the level of award under the STIP for the relevant year. If agreed, Awards will be paid after the accounts have been audited.

The maximum amount payable to Mr Denny as an annual bonus is EUR 50,000, with a target performance entitling him to EUR 45,000.

In respect of the financial year ended 2014 the combined amount accrued but not yet paid in respect of the 2014 STIP/annual bonus amounted to the Euro/Canadian Dollar equivalent of GBP 628,761 (2013: GBP 366,505).

Long-Term Incentive Plan ("LTIP")

Implementation of the proposed amendment of the LTIP to provide for the delivery of awards partly in cash and partly in shares, which was approved by shareholders at the Annual General Meeting on 30 April 2014, was delayed to take into account any proposed changes from the PWC review and the result of the AIFM authorisation process. The resulting changes to the LTIP will be tabled as a resolution for shareholder approval at the Company's Annual General Meeting in April 2015.

In February 2015, Mr Schramm and Mr Ball received the combined Euro/Canadian Dollar equivalent of GBP 391,017 with respect to the LTIP award letter granted in 2011.

With respect to LTIP awards previously made to Mr Schramm and Mr Ball in 2012 and 2013, any payment will be calculated based on the achieved targets: the payment for achieving a TSR of 16.50% will be EUR 125,000 / CAD 176,445 gross per year under the 2012 award and EUR 129,688 / CAD 183,062 gross per year under the 2013 award; for achieving a TSR above 16.50% the award is to be determined by interpolation to a maximum amount of EUR 250,000 / CAD 352,890 gross per year under the 2012 award and EUR 259,375 / CAD 363,123 under the 2013 award, payable for an achieved TSR of approx. 25%. The award will be measured by reference to a threshold hurdle of a TSR of 16.5% achieved over the three year return period, starting from the date of each individual annual award letter. Subject to satisfaction of the performance targets, these LTIP awards will be paid in cash. 

With respect to Mr Schramm and Mr Ball, for the 2014 award, it is proposed that the maximum award that may be made under the LTIP is 150% of the relevant executive's base salary in that financial year, with a target award of 100% and a minimum threshold of 50%. Half of the LTIP target award will be measured by reference to total shareholder return ("TSR"). The other half of the award will be measured by reference to the percentage increase in the Company's net asset value per share (''NAV'').

With respect to the LTIP award made to Mr Denny in 2014, any payment will be calculated based on the achieved TSR over the 3 year period. A TSR of 16.5%, the threshold, will pay EUR 50,000; achieving a TSR of approx. 25% will earn the maximum amount of EUR 100,000. Interim achievements will be interpolated. The LTIP award will be paid in cash. 

During the year under review a combined Euro/Canadian Dollar equivalent of £586,852 was accrued against those LTIP's which had been awarded but had not yet vested.

As of 31 December 2014 the combined cumulative amount accrued but not yet paid to Mr Schramm, Mr Ball and Mr Denny with respect to the 2011, 2012, 2013 and 2014 award letters amounted to the Euro/Canadian Dollar equivalent of GBP 978,091.

No loan has been granted to, nor any guarantee provided for the benefit of, any manager by BBGI Management HoldCo.

There are no family relationships between Mr Schramm, Mr Ball or Mr Denny.

At no time will Mr Schramm, Mr Ball or Mr Denny acquire or have options over any shares in BBGI Management HoldCo, which is and is intended to be wholly owned by the Company.

As at the date of this Annual Report, there are no amounts set aside, needing to be set aside or accrued by the Company to provide pension, retirement or similar benefits.

Obligations of Luxembourg authorised AIFMs according to article 12 of the AIFM Law and pursuant to annex II of the AIFM Law

§ General Requirements

The AIFM Law requires the disclosure of the total amount of remuneration for the financial year, divided into fixed and variable elements, paid by the AIFM to its staff (and any beneficiaries) and, in 2013, the European Securities and Markets Authority ("ESMA") published its final guidelines on sound remuneration policies under the AIFMD. These guidelines indicate that remuneration disclosures may be made on a 'proportional' basis and acknowledge that the application of proportionality may lead, exceptionally, to the 'disapplication' of some requirements provided this is reconcilable with the risk profile, risk appetite and strategy of the AIFM and the AIFs it manages. 

According to the Guidelines, the different risk profiles and characteristics among AIFMs justify a proportionate implementation of the remuneration principles and, where a company chooses to disapply requirements, it must be able to explain the rationale to a competent authority. The principles that may be disapplied are:

1. the requirements on pay-out processes for all (or some) Identified Staff including:

a. the payment of variable remuneration in instruments;

b. retention periods;

c. deferral requirements; or

d. ex post incorporation of risk (also sometimes known as 'Malus or clawback').

2. the requirement to establish a Remuneration Committee.

Finally, ESMA has stated that in the case of an existing AIFM with an accounting period ending on 31 December which submitted its application by 22 July 2014 and obtained its authorisation after that date, the AIFMD variable remuneration rules should apply to the calculation of payments relating to the 2015 accounting period.

§ The Company's position

The Company's final application for AIFM authorisation was submitted to the CSSF in June 2014. CSSF approval of the application and formal authorisation was received on 27 October 2014 but taking effect on 7 October 2014.

As part of the AIFM authorisation application, the Company obtained the following derogations from the CSSF, on proportionate grounds, from three of the remuneration policy principles: i) to pay a substantial part of the variable remuneration in shares ii) the ex post incorporation of risk for variable remuneration ('Malus or clawback'); and iii) to establish a Remuneration Committee. Accordingly the Company has technically disapplied these three remuneration policy principles. However the Company has applied the spirit of the rules for the joint CEO's. LTIP's granted from December 2014 onwards will be satisfied in company shares. Furthermore, Malus clauses are included in their STIP and LTIP contracts. As mentioned above the Supervisory Board acts as the company's Remuneration Committee

Total Fixed and Variable Remuneration for the financial year

The total fixed remuneration paid to all members of staff (including the Management Board members) during the year under review was £1.54 million (2013: £1.25 million). The total variable remuneration accrued for all members of staff for the financial year ending 31 December 2014 was £1.37 million. The total variable remuneration paid to all members of staff for the financial year ending 31 December 2013 was £0.64 million.

THE BOARD OF DIRECTORS

This table sets out the expiry dates of the current terms of the directors' appointments. All appointments may be renewed in accordance with the provisions of the Company's Articles.

Board members and other interests

Frank Schramm, Duncan Ball and Michael Denny, the members of the Management Board, are also BBGI Management HoldCo managers. Apart from Mr Schramm and Mr Ball, no other member had Service Contracts during the year under review. Subsequent to the year-end Mr Denny changed from a Contract of Employment to a Management Contract.

No loan has been granted to, nor any guarantee provided for the benefit of, any director by the Company.

There are no family relationships between the members of the Boards. David Richardson, Colin Maltby and Howard Myles are all considered to be independent Board members as: (i) they have not been employees of the Company; (ii) have not had material business relationships with the Company; (iii) have not received performance based remuneration from the Company; (iv) do not have family ties with any of the Company's advisers, directors or senior employees; (v) do not hold cross-directorships or have links with other directors through involvement on other companies; (vi) do not represent a significant shareholder; and (vii) have not served on the Board for more than nine years.

Board members shareholdings

Board Diversity

The Boards have considered their diversity, as recommended by the AIC Code, along with the "Women on Boards" report of February 2011 (the "Davies Report") as supplemented in April 2013 and March 2014. They concur with the Davies Report and the AIC Code that Board appointments must always be made on merit, that boards should have a balance of relevant skills, experience, length of service and knowledge of the Company, and that Independent Directors should take the lead in the appointment of new Directors.

The Company is still early in its life and no new appointments have been made to either the Supervisory or the Management Board since its shares were first listed and admitted to trading on the London Stock Exchange. The Boards believe however that their present composition embodies an appropriate diversity of perspectives and relevant skills, qualifications and experience. As the Company matures, it may become relevant to seek greater diversity by length of service, gender, ethnicity, nationality or other criteria. However, the Boards remain committed to conducting any evaluation of prospective candidates, as of their own members, without discrimination on grounds of gender, age, nationality, ethnicity, faith or sexual orientation. Their overriding objective is to select members on merit with relevant and complementary skills to help the Company maximise value for shareholders. 

Management Board

General

The Management Board is responsible for the day-to-day management of the Company, including administration, preparation of semi-annual valuations, the statutory financial statements, the management accounts, business plans, presenting results and information to shareholders, coordinating all service providers to the Group and giving the Supervisory Board general advice and feedback. The Management Board is responsible inter alia for undertaking the discretionary investment management of the Company's assets and those of the rest of the Group; it therefore carries out the function of investment manager. Accordingly the Company has not engaged an external investment manager.

The Management Board comprises three members, each contractually engaged by BBGI Management HoldCo, a subsidiary of the Company, therefore none of them is deemed independent by AIC Code Principle 2. However the Management Board functions are overseen by the Supervisory Board which itself meets the independence criteria set out in AIC Principle 2. This two tier structure is not envisaged by the AIC Code. However, the Company considers that an independent Supervisory Board ensures the Company is compliant with AIC Code Principle 2.

The Company's Articles require that the Management Board members are appointed on an annual basis by the Supervisory Board, not by shareholders; in itself therefore, this does not meet the requirements of the AIC Code Principles 3 or 4, which require company shareholders to vote on the appointment/reappointment of Directors. However, as the Management Board carries out the role of an investment manager, the Supervisory Board deems it appropriate that the Management Board members are appointed and dismissed by the Supervisory Board on an annual basis. The members of the Supervisory Board themselves are elected (and may also be dismissed) by shareholders on an annual basis and therefore the Company considers that this does meet the requirements of Principles 3 and 4.

Performance evaluation and reappointment

As stated above, the Management Board carries out the functions of the Company's investment manager, and its members are appointed by the Supervisory Board for a period of one year renewable. Mr Ball and Mr Schramm were both originally appointed as members of the Management Board on 5 October 2011; their appointments were renewed for the first time with effect from 5 October 2012 and then again on the same date in 2013. Mr Denny was first appointed to the Management Board with effect from 30 April 2013 and his appointment renewed for the first time with effect from 30 April 2014.

During the year under review, the Supervisory Board conducted an evaluation of the performance of the Management Board and its members. It concluded that both the Management Board collectively, and its members individually, were operating effectively and efficiently, and the continued appointment of the individual members was in the best interests of the Company and its shareholders as a whole. Accordingly the Supervisory Board appointed Mr Ball and Mr Schramm as members of the Management Board for a further term of one year with effect from 5 October 2014. Mr Denny's appointment will be considered for renewal prior to 30 April 2015.

* From time to time there are unscheduled meetings of the Management Board, most of which are called at short notice to approve documents previously discussed or of a technical nature. Due to the generally short notice given, not all members are able to attend.

Supervisory Board

General

The Supervisory Board consists of three members who are all Non-Executive Directors, each of whom are considered to be independent.

In accordance with the Articles, all members of the Supervisory Board are elected for a period ending at the Annual General Meeting of the Company in April every year, at which time they are required to retire. They may, if they so wish, offer themselves for re-election by shareholders; however, re-appointment is not automatic. Although the Company is not a member of the FTSE 350, the annual re-election requirement of the AIC Code Principle 3 is met by the Articles which provide for a more stringent process than that required for non-FTSE 350 companies.

The Supervisory Board believes that its members have an appropriate balance of skills and experience to enable them to fulfil their obligations. The Supervisory Board meets at least four times a year and between these formal meetings there is regular contact with the Management Board and the Company's brokers. The members of the Supervisory Board are kept fully informed of investment and financial controls, and other matters relevant to their remit. Both Supervisory and Management Board members also have access, where necessary in the furtherance of their duties, to independent professional advice at the expense of the Company. In the period under review, the Supervisory Board met five times. Attendance of individual Supervisory Board members can be found in the table below.

As previously mentioned, the Supervisory Board members have a breadth and diversity of experience relevant to the Company, and the Company believes that any future changes to the composition of the Supervisory Board can be managed without undue disruption. On appointment to the Supervisory Board, new members will be provided with an induction.

The Supervisory Board considers items laid out in the Notices and Agendas of meetings, which are formally circulated to its members in advance of the meeting as part of the Board papers; members may also request the addition of any agenda item they consider appropriate for Board discussion. At each meeting, the members are required to advise of any potential or actual conflicts of interest prior to discussion.

Annual performance evaluation

The Supervisory Board evaluates its performance and considers the term and independence of each member on an annual basis; for the year ended 31 December 2014, this process has now been completed. The evaluation performed comprised completion of a questionnaire followed by collation of all comments into a summary. The Supervisory Board considered the results of this evaluation process and agreed that the current composition of both the Supervisory Board and its Audit Committee reflected a suitable mix of skills and experience, that each body was functioning effectively, and that the performance of each individual member had been effective and appropriate. For the evaluation of the Chairman, the Senior Independent Director discussed the results of the questionnaire with the Chairman personally prior to further distribution to, and discussion with, the remaining member.

As the Company is not a FTSE 350 company, an externally facilitated evaluation of the Supervisory Board every three years (as proposed by AIC Code Principle 7) was not conducted. In addition, no independent third party has been appointed to manage the exercise as the Board considers the current process to be appropriate.

* From time to time there are unscheduled meetings of the Supervisory Board, most of which are called at short notice to approve documents previously discussed or of a technical nature. Due to the generally short notice given, not all members are able to attend. No unscheduled meetings were however called during 2014.

Other listed company directorships

David Richardson

Assura plc (in place of Assura Group Limited following approval of scheme of arrangement in January 2015)

Colin Maltby

HarbourVest Senior Loans Europe Limited (in voluntary winding up from 27 November 2014)

BACIT Limited (formerly known as Battle Against Cancer Investment Trust Limited)

Ocean Wilson Holdings Limited

Howard Myles

The World Trust Fund

Aberdeen Private Equity Fund Limited

Baker Steel Resources Trust Limited

BlackRock Hedge Selector Limited (voluntarily wound up on 31 January 2015)

JP Morgan Brazil Investment Trust plc

Small Companies Dividend Trust plc

Re-election of Supervisory Board members

In accordance with the Articles of Incorporation, Supervisory Board members are elected for a period ending at the Company's next annual general meeting, at which time they are eligible for reappointment. Each member of the Supervisory Board has decided to offer himself for re-election at the forthcoming Annual General Meeting and, as a result of the successful performance evaluation described above, the Supervisory Board recommends the re-election of each member.

Review / monitoring obligations / delegation of responsibilities of Supervisory Board

The primary focus at Supervisory Board meetings is a review of investment performance and associated matters such as risk management, marketing/investor relations, gearing, general administration and compliance, peer group information and industry issues. In addition, it is responsible for establishing and monitoring compliance with the Company's investment policy, providing general supervisory oversight to the operations of the Group as a whole, appointing (or dismissing) the members of the Management Board, supervising and monitoring the appointment and performance of the Company's third party service providers (and those of its subsidiaries). In the case of these later two roles, the Board acts as Nominations Committee and Management Engagement Committee respectively, as described below.

The Supervisory Board will continue to regularly consider the Company's strategy taking account of market conditions and feedback from the Management Board, the Company's joint Brokers and shareholders. The investment strategy, as set out in the Company's prospectuses and this annual report, is reviewed regularly in conjunction with the Management Board.

COMMITTEES OF THE SUPERVISORY BOARD

There is only one constituted Committee of the Supervisory Board; that is, the Audit Committee. It operates under clearly defined terms of reference, and these are available from the Company Secretary upon request.

There are no other Committees as the Supervisory Board considers its size to be such that it would be unnecessarily burdensome to establish them. The Board as a whole therefore carries out the functions of Management Engagement, Nominations and Remuneration Committees, including inter alia making recommendations in relation to the Group's remuneration programme and on proposed changes of the Group's senior personnel. There are therefore no terms of reference in relation to such Committees. When acting in the capacity as these individual Committees, the meetings are chaired by Mr Richardson, the Chairman of the Supervisory Board.

Other Committee functions

§ Remuneration Committee

Acting as Remuneration Committee, the Supervisory Board met five times during the financial year to review the levels and structure of the remuneration, compensation and other benefits and entitlements for the directors, officers and employees of the Company and its subsidiaries. Further information in relation to both Executive and Non-Executive Directors remuneration can be found in the Remuneration section above.

§ Nominations Committee

During the financial year, the Supervisory Board met three times as Nominations Committee, to consider the renewal of the appointments of the Management Board members (which appointments are renewable annually for one year only), and to discuss succession planning for both Boards.

As stated under "Management Board - Performance Evaluation", each member of the Management Board was reappointed for a further year. In respect of succession planning, this issue was discussed and detailed plans developed for all senior positions. These plans are regularly updated by the Management Board and reviewed with the Supervisory Board at least annually. However, as the Company is in the earlier stages of its life, and given the successful performance evaluations of individual members described earlier, and the fact that each member remains willing to continue to serve the Company, the search for new directors was not considered necessary at the current time.

§ Management Engagement Committee

In its role as Management Engagement Committee, the Supervisory Board met once during the financial year to consider, together with the Management Board, the performance and ongoing appointments of the Company's third party service providers. Over the year, it concluded that the ongoing appointments of these service providers continue to be in the best interests of the Company as a whole, with the additions described below.

During the year under review, as required by the AIFMD, three new service providers were appointed in the latter half of the year to provide compliance, internal audit and risk management services. Initial indications on performance are positive, although it is too early to judge performance.

§ Audit Committee

* From time to time there are unscheduled meetings of the Audit Committee, most of which are called at short notice meetings to approve documents previously discussed or of a technical nature. Due to the generally short notice given, not all members are able to attend. No unscheduled meetings were however called during 2014.

The Audit Committee (the "Committee") has operated throughout the year in accordance with the AIC Code. As indicated above, it does so within clearly defined terms of reference including all matters indicated by Disclosure and Transparency Rule 7.1 and the AIC Code. It comprises the three independent Non-Executive Directors who are also members of the Supervisory Board: Howard Myles is Chairman of the Committee, with Colin Maltby and David Richardson the other members.

The Committee's responsibilities are as follows:

§ 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 and, unless expressly addressed by the Board itself, the Group's internal control and risk management systems

§ making recommendations to the Supervisory Board for resolutions to be put to shareholders for approval at the Annual General Meeting on the appointment of the external auditor, and for 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 and Luxembourg professional and regulatory requirements

§ reviewing the Group's Annual and Interim Reports and Financial Statements

§ 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

The Committee is required to report its findings to the Supervisory Board, identifying any matters on which it considers that action or improvement is needed, and make recommendations on the steps to be taken. In the event of any conflict between the provisions of the AIC Code and the provisions of the law on the Audit Profession, the Company will comply with the provisions of the law on the Audit Profession.

The external auditor is invited to attend those Committee meetings at which the annual and interim financial statements are considered, and at other times if considered necessary by the Committee.

Meetings

The Committee is required to meet not less than two times a year, and at such other times as the Committee Chairman may require. Additional meetings may be requested by any other member of the Committee, or the external Auditor, if deemed necessary. Other Directors and third parties may be invited by the Committee to attend meetings as and when appropriate.

Annual General Meeting

The Committee Chairman attends each Annual General Meeting of the Company and is prepared to respond to any shareholder questions on the Committee's activities.

AUDIT COMMITTEE REPORT

Introduction

I am pleased to present the Committee's formal report to shareholders on how the Committee has conducted its responsibilities for the year ended 31 December 2014.

Responsibilities and Composition

The main responsibilities of the Audit Committee can be found within the Governance section of this Annual Report, under the heading "Committees of the Supervisory Board".

Each of the three Non-Executive Directors is a member of the Committee, which is chaired by myself. The Board considers that at least one Committee member has recent and relevant financial experience for the Committee to discharge its functions effectively. Due to the size of the Supervisory Board, the Chairman, David Richardson, is also a member of the Committee, and this enables him to not only bring his extensive accounting knowledge to the table but also keeps him fully informed of any issues that may arise.

2014: the year under review

The Audit Committee met twice in the year to 31 December 2014 and members attendance can be found within the Governance section of this Annual Report, under the heading "Committees of the Supervisory Board". At these meetings, the Committee considered, inter alia:

§ the 2013 Annual and 2014 Interim financial statements;

§ the Reports of the external Auditor;

§ the external Auditor's terms of appointment and remuneration (including overseeing the independence of the Auditor particularly as it relates to the provision of non-audit services) in accordance with the Law on the Audit Profession dated 18 December 2009;

§ reviewing and approving the external Auditor's plan for the following financial year;

§ reviewing the appropriateness of the Company's accounting policies;

§ reviewing the risk register of the Company; and

§ ensuring the adequacy of the internal control systems and standards

Significant Risks

The most significant risk in the Company's financial statements is whether its investments are fairly valued and this issue is considered carefully when the Committee reviews the Company's annual and interim financial statements. The fair market valuation of the investments (which is carried out by the Management Board) is conducted every six months at 30 June and 31 December respectively; this is then reviewed by an independent third party valuer, after which it is presented to the Supervisory Board.

Management Board members were available during the Audit Committee review process to provide detailed explanations of the rationale used for the valuation of investments. The external auditor was also invited to attend the Audit Committee meetings at which the annual and interim financial statements were considered in order to present the conclusion of their work, which included a review of the adequacy of the valuation.

Subsequent to the valuation and the subsequent reviews, the Committee concluded that the valuation process of the Company's investments for the year ended 31 December 2014 had been properly carried out and that the investments have been fairly valued.

Appointment of External Auditors

As stated above, the Committee annually reviews the performance of KPMG Luxembourg Société coopérative ("KPMG"), the Company's external auditor. In doing so, we consider a range of factors including the quality of service, specialist expertise and the level of audit fee. Following that review, the Committee remains satisfied with KPMG's effectiveness and therefore has not considered it necessary, to date, to require it to tender for the audit work. There are no contractual obligations restricting the choice of external auditor. The reappointment of the external auditor is subject to shareholder approval at the Annual General Meeting.

The Committee has also reviewed the provision by KPMG of non-audit services, and considers them to be cost-effective and not an impediment to KPMG's objectivity and independence.

As a result of its work during the period, the Audit Committee concludes that it has acted in accordance with its terms of reference and has ensured the independence and objectivity of the external auditor. The Audit Committee has recommended to the Board therefore that KPMG Luxembourg Société coopérative be re-appointed as the Company's external auditor.

Conclusion

In conclusion, the Audit Committee is of the opinion that 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.

APPROVAL

On behalf of the Audit Committee

Howard Myles

Chairman of the Audit Committee

26 March 2015

MANAGEMENT BOARD RESPONSIBILITIES STATEMENT

The Management Board of the Company is responsible for ensuring proper preparation of the annual report and financial statements of the Company for each financial period in accordance with applicable laws and regulations, which require them:

i) to give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group as of and at the end of the financial period in accordance with International Financial Reporting Standards as adopted by the European Union and the Listing Rules; and

ii) to give a true and fair view of the development and performance of the business and the position of the Group as well as a true and fair description of the principal risks and uncertainties the Group may encounter.

In addition, the Management Board is responsible for ensuring that the Company is in compliance with applicable company law and other UK or Luxembourg applicable laws and regulations and to provide a description of the risks and uncertainties the Group may encounter and to put in place an appropriate control framework designed to meet the Group's particular needs and the risks to which it is exposed.

In preparing such financial statements the Management Board is responsible for:

§ Selecting suitable accounting policies and applying them consistently

§ Making judgments and estimates that are reasonable and prudent

§ Stating whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements

§ Preparing the financial statements on a going concern basis unless it is inappropriate to presume that the Group will continue in business

§ Maintaining proper accounting records which disclose with reasonable accuracy the financial position of the Group and enable them to ensure that the financial statements comply with all relevant regulations

§ Safeguarding the assets of the Group and taking reasonable steps for the prevention and detection of fraud and other irregularities

Management Board Responsibility Statement

We confirm that to the best of our knowledge:

• The financial statements have been prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and Group included in the consolidation as a whole.

• The Chairman's statement and the report of the Management Board include a fair review of the development and performance of the business and the position of the Company and Group included in the consolidation taken as a whole together with a description of the principal risks and uncertainties that it faces.

Luxembourg, 26 March 2015

Signatures

Duncan Ball, Co-CEO Frank Schramm, Co-CEO Michael Denny, Director

To the Shareholders of

BBGI SICAV S.A.6E, route de Trèves

L-2633 Senningerberg

REPORT OF THE REVISEUR D'ENTREPRISES AGREE

Report on the consolidated financial statements and separate financial statements

Following our appointment by the annual general meeting of the shareholders of 30 April 2014, we have audited the accompanying consolidated financial statements of BBGI SICAV S.A. (the 'Company') and its subsidiaries (the 'Group'), which comprise the consolidated statement of financial position as at 31 December 2014 and the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory notes.

We have also audited the accompanying separate financial statements of the Company, which comprise the statement of financial position as at 31 December 2014 and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory notes.

Management Board's responsibility for the consolidated financial statements and separate financial statements

The Management Board is responsible for the preparation and fair presentation of these consolidated financial statements and separate financial statements in accordance with International Financial Reporting Standards as adopted by the European Union, and for such internal control as the Management Board determines is necessary to enable the preparation of consolidated financial statements and separate financial statements that are free from material misstatement, whether due to fraud or error.

Responsibility of the Réviseur d'Entreprises agréé

Our responsibility is to express an opinion on these consolidated financial statements and separate financial statements based on our audits. We conducted our audits in accordance with International Standards on Auditing as adopted for Luxembourg by the Commission de Surveillance du Secteur Financier. Those standards require that we comply with ethical requirements and plan and perform the audits to obtain reasonable assurance whether the consolidated financial statements and separate financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements and separate financial statements. The procedures selected depend on the judgement of the Réviseur d'Entreprises agréé, including the assessment of the risks of material misstatement of the consolidated financial statements and the separate financial statements, whether due to fraud or error. In making those risk assessments, the Réviseur d'Entreprises agréé considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements and the separate financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Management Board, as well as evaluating the overall presentation of the consolidated financial statements and the separate financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of BBGI SICAV S.A. as of 31 December 2014, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union. In our opinion, the separate financial statements give a true and fair view of the financial position of BBGI SICAV S.A. as of 31 December 2014, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union.

Other matters

Supplementary information included in the annual report has been reviewed in the context of our mandate but has not been subject to specific audit procedures carried out in accordance with the standards described above. Consequently, we express no opinion on such information. However, we have no observation to make concerning such information in the context of the consolidated financial statements and separate financial statements taken as a whole.

Report on other legal and regulatory requirements

The consolidated management report, which is the responsibility of the Management Board Directors is consistent with the consolidated financial statements. The accompanying Corporate Governance Statements, which is the responsibility of the Management Board, is consistent with the consolidated financial statements and includes the information required by the law.

Luxembourg, 26 March 2015 KPMG Luxembourg

Société coopérative

Cabinet de révision agréé

Frauke Oddone

The accompanying notes form an integral part of the consolidated financial statements.

The accompanying notes form an integral part of the consolidated financial statements.

The accompanying notes form an integral part of the consolidated financial statements.

The accompanying notes form an integral part of the consolidated financial statements

The accompanying notes form an integral part of the consolidated financial statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

for the year ended 31 December 2014

1. Reporting entity

BBGI SICAV S.A. (previously Bilfinger Berger Global Infrastructure SICAV S.A.) ("BBGI", or the "Company") is an investment company incorporated in Luxembourg in the form of a public limited company (société anonyme) with variable share capital (société d'investissement à capital variable, or "SICAV") and regulated by the Commission de Surveillance du Secteur Financier ("CSSF") under Part II of Luxembourg Law of 17 December 2010 on undertakings for collective investments with an indefinite life. The Company qualifies as an alternative investment fund within the meaning of Article 1 (39) of the law of 12 July 2013 on alternative investment fund managers ("2013 Law") implementing Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 and is authorised as an internal alternative investment fund manager in accordance with Chapter 2 of the 2013 Law with effect from 07 October 2014. The Company's registered office is EBBC, 6E, route de Trèves, L-2633 Senningerberg, Luxembourg. The Company was admitted to the official list of the UK Listing Authority (premium listing, closed-ended investment fund) and to trading on the main market of the London Stock Exchange on 21 December 2011.

The Company is a closed-ended investment company that principally invests in a diversified portfolio of operational Public Private Partnership (PPP)/ Private Finance Initiative (PFI) infrastructure assets or similar assets. The Company has limited investments in projects that are under construction.

The Group employed 14 employees as of 31 December 2014 (11 as of 31 December 2013).

Reporting period

The Company's reporting period runs from 1 January to 31 December, each year. The Company's ("the Group" or "the Fund" if referred together with its consolidated subsidiaries) consolidated statement of financial position, consolidated income statement, consolidated statement of comprehensive income and consolidated statement of cash flows includes comparative figures as at 31 December 2013.

The amounts presented as non-current in the consolidated statement of financial position are those which are expected to be settled after more than one year. The amounts presented as current are those which are expected to be settled within one year.

2. Basis of preparation

Statement of compliance

The consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) and the provisions of the Standard of Recommended Practices issued by the Association of Investment Companies (AIC SORP).

All items presented in the consolidated income statement and consolidated comprehensive income are considered "capital" in nature. As such, no further disclosure is required as there are no longer items deemed "revenue" in nature.

These consolidated financial statements were approved by the Management Board and Supervisory Board on 26 March 2015.

 Changes in accounting policy

The accounting policies, measurement and valuation principles applied by the Group in these consolidated financial statements are the same as those applied by the Group in its annual consolidated financial statements as of and for the year ended 31 December 2013.

Basis of measurement

These consolidated financial statements have been prepared on historical costs basis, except for derivative financial instruments and investments at fair value through profit or loss which are reflected at fair value.

Functional and presentation currency

These consolidated financial statements are presented in Pounds Sterling, which is the Company's functional currency.

Use of estimates and judgements

The preparation of consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

In the process of applying the Group's accounting policies, which are described in Note 3, the management has made the following judgements that have the most significant effect on the amounts recognized in the financial statements.

The Company as an Investment entity

The management have assessed that the Company is an Investment Entity in accordance with the provisions of IFRS 10. The Company meets the following criteria to qualify as an Investment Entity:

a) obtains funds from one or more investors for the purpose of providing those investors with investment management services

The Company is publicly listed in the London Stock Exchange with its shares are held by a number of shareholders/investors. The Fund is internally managed with management solely focused on managing the funds received from its shareholders in order to maximize investment income/return.

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

The investment objectives of the Fund are as follows:

 - provide investors with secure and highly predictable long-term cash flows whilst actively managing the investment portfolio with the intention of maximizing the capital value over the long term

- target a dividend of 5.76 pence per share per annum. The Fund will aim to increase this distribution progressively over the longer term

- target an IRR in the region of 7% to 8% on the £1 IPO issue price issue price of its ordinary shares to be achieved over the longer term via active management to enhance the value of existing investments.

 The abovementioned objectives support the fact that the main business purpose of the Fund is to maximize investment income for the benefit of its shareholders.

c) measures and evaluates performance of substantially all of its investments on a fair value basis

The investment policy of the Fund is to invest in equity, subordinated debt or similar interests issued in respect of infrastructure projects that have predominantly been developed under the PPP/PFI or similar procurement models. Each of these PPP/PFI projects is valued at fair value. The valuation is carried out on a six-monthly basis as at 30 June and 31 December each year.

Based on management's assessment, the Company also meets the typical characteristics of an Investment Entity as follows:

a) it has more than one investment - at 31 December 2014 the Company has 36 PPP/PFI investments

b) it has more than one investor - the Company is listed in the London Stock Exchange with its shares held by a broad pool of investors

c) it has investors that are not related parties of the entity - other than the shares held by the Supervisory Board, the Management Board and certain employees, all remaining shares in issue (more than 99%) are held by non-related parties of the entity.

d) it has ownership interests in the form of equity or similar interests - the Fund's ownership in PPP/PFI projects is in the form of equity interests, subordinated debt and similar instruments.