GCP Infrastructure Investments Regulatory News (GCP)

18 December 2015

GCP Infrastructure Investments Limited (the "Company")

Annual Report and Audited Consolidated Financial Statements for the year ended 30 September 2015

The Directors of the Company are pleased to announce the Company's annual results for the year ended 30 September 2015.The full Annual Report and Accounts can be accessed via the Company's website at http://gcpuk.com/gcp-infrastructure-investments-ltd and will be posted to shareholders over the course of the next few weeks.

Contact details:

Notes to Editors

The Company is a closed-ended London Stock Exchange-listed investment company that seeks to generate returns from senior and subordinated infrastructure debt and related and/or similar assets. The Company is advised by Gravis Capital Partners LLP.

GCP Infrastructure Investments Limited

Annual report and financial statements 2015

Company number: 105775

GCP Infrastructure Investments Limited (the "Company") is the only UK listed fund focused primarily on investments in UK infrastructure debt.

The Company achieves its investment policy by investing substantially all its capital in debt secured against UK infrastructure projects primarily in the renewable energy and PFI sectors that generate long dated, public sector backed revenues. The Company is currently exposed to a diversified portfolio of partially inflation protected investments.

The Company is a closed ended investment company incorporated in Jersey. It was admitted to the Official List and to trading on the London Stock Exchange's Main Market in July 2010 and since then it has grown to a market capitalisation of just over £699.0 million as at 30 September 2015.

Highlights for the year:

· Dividends of 7.6 pence per share paid for the year to 30 September 2015

· Total return for the year of 9.5% and total return since IPO in 2010 of 67.9%

· Profit for the year of £48.7 million up c.58% from £30.8 million in the previous year

· Ordinary shares trading at a 12.8% premium at 30 September 2015

· £140 million successfully raised through two significantly oversubscribed share issues with a further £20 million raised post year end

· New loans advanced totalling c.£220.2 million secured against UK renewable energy, social housing and PFI projects, with a further £25.5 million post year end

· Company NAV per ordinary share as at 30 September 2015 of 107.47 pence

· Third‑party valuation of the Company's investment portfolio at 30 September 2015 of £657.7 million

· Simplification of corporate structure through a successful merger of the Company and GCP Infrastructure Asset Holdings Limited, its wholly‑owned subsidiary on 30 September 2015

Investment objectives

The Company invests in UK infrastructure debt to meet the following key objectives:

Dividend income.

To provide shareholders with regular, sustainable and long‑term dividends.

The Company has maintained or progressively increased its dividend for every period since inception and has paid or declared a dividend of 7.6 pence for the previous three financial years.

Key performance highlights

7.6p

Dividends paid in 2014/15

£48.7m

Profit for the year

Diversification

To create a diversified portfolio of debt secured against UK infrastructure projects

The Company has increased the number of investments in its portfolio from 36 to 40 at the end of the year. The investment portfolio is exposed to a wide variety of sectors in terms of project type and source of underlying cash flow.

Key performance highlights:

40

Number of investments

12.5%

Size of largest investment

Capital preservation

To preserve the capital value of its investment assets over the long term

The valuation of the Company's investments is in excess of the principal value outstanding. The increase in valuation has resulted in a net asset value per share of 107.47 pence. The ordinary shares have always traded at a premium to their net asset value. 

Key performance highlights

107.47p

NAV per share

121.25p

Share price as at 30 September 2015

Chairman's statement

On behalf of the Board I am pleased to report another strong year with the Company experiencing further growth by way of two significantly oversubscribed capital raises and the deployment of £220.2 million of capital in sixteen investments. The Company's portfolio has performed well enabling the Company to deliver consistent returns to shareholders through a dividend of 7.6 pence per share and a total shareholder return for the year of 9.5%. The growth of the Company resulted in its entry to the FTSE 250 index in July of this year which is further testament to the continuing support of the Company's shareholders and the ability of the Company to source attractive investment opportunities.

Outlook for UK infrastructure

High‑quality infrastructure is still regarded as a key foundation for supporting economic growth. Delivery of the right infrastructure at a local, regional and national level, across the UK, therefore remains a stated ambition of government.

Through the updated National Infrastructure Plan and the newly created National Infrastructure Commission there seems to be a high‑level governmental commitment to the successful delivery of many high profile projects such as Crossrail and Thames Tideway. However, procurement of social infrastructure under the successor to the Private Finance Initiative, Private Finance 2, has been more limited than expected.

The Conservative government has been quick to make a number of key renewable energy policy decisions that will significantly curtail the number of new projects developed over the next year or so, particularly in the onshore wind, solar and biomass sectors. Under Electricity Market Reform the government's support for the renewable energy sector will now shift towards the Contracts for Difference (CfDs) model. It remains our feeling that CfDs are less suitable for small scale renewables and that future investment is being encouraged towards the offshore wind sector.

Investment pipeline

Infrastructure as an investment class is becoming better known, better understood and increasingly popular. This rise in capital looking for infrastructure exposure combined with a shrinking pipeline of new assets and the prevailing low interest rate environment has resulted in falling yields on assets within the Company's core sectors of social and renewable energy infrastructure. This has driven an increase in the valuation of some of the Company's assets and a resilient and stable share price performance. However, with the desirable effects of continued demand come the challenges associated with increased competition in a space with limited opportunity.

Over the last four years, the Company has been able to occupy a highly‑competitive position in the long‑dated lending market in many renewable energy sectors. With the withdrawal and reduction of the subsidies underpinning future development in these sectors and a significant increase in competition, investment opportunities have become more limited. The Company has focused on working with existing borrowers where strong relationships have enabled the Company to lend at attractive rates against well‑performing operational assets supported by legacy subsidy regimes. The Company remains alert to similar opportunities, particularly in the solar and wind sectors.

In the secondary PFI market, returns on assets continue to tighten in a crowded market place, with the yields available being generally significantly below the Company's target rates of return. As a result, it is expected that there is also limited scope in the near term for material activity in this sector.

Ancillary areas such as the supported living sub‑sector of social housing continue to present an expanding scope for investment in the near future.

Investment portfolio

The Company's investment portfolio has performed robustly, accruing an average yield of c.9.0% throughout the year, with the operational and construction performance of the projects that support the Company's investment portfolio being materially in line with expectations.

The macro‑economic and political environment has proved challenging for a number of the Company's renewable energy projects, with falling power prices and the government's removal of the Climate Change Levy exemption both negatively impacting actual and future expected cash flows for some of the Company's borrowers. Despite this the Company has benefited from its focus on investing in debt instruments with cash flow short falls in all instances being absorbed by the equity owners. This fundamentally conservative approach to investing means that the Company expects that its debt investments will all be serviced in full.

The Company made sixteen new investments during the year; twelve new loans, three extensions to existing facilities and the refinancing of eight existing loan notes into one note. The funds have been deployed into a variety of PFI, social housing and renewable energy projects.

Merger

The Company merged with its wholly‑owned subsidiary on 30 September 2015 in order to create a more transparent and cost effective vehicle. The merger removed the administrative burden and expense of operating two companies and the expectation is that this will further enhance the Company's operating margin in future years. The merger will also allow the Company to achieve greater transparency in its disclosure of investments in its financial statements whilst continuing to adhere to financial reporting standards.

Financial results

The Company generated a profit of £48.7 million in the year, a 58% increase year‑on‑year. The increased income has been driven by the enlarged income‑generative investment portfolio acquired following the deployment of the capital raised through equity issued and drawn down under the RBSI debt facility. Earnings per share were 9.30 pence which is broadly in line with 2014. The Company continues to maintain a dividend of 7.6 pence per share, paying a dividend of 1.90 pence for each of the four financial quarters of the year ended 30 September 2015.

Net asset growth

The net assets of the Company have grown from £470.8 million at 30 September 2014 to £619.5 million at 30 September 2015 as a result of the £140 million of equity capital raised and the revaluation of the Company's solar and PFI portfolios. The Company's net asset value per share has increased from 104.53 pence to 107.47 pence due to the revaluations and the accretive nature of the share issuances.

Debt facility

On 23 March 2015 the Company executed a three year £50 million revolving credit facility with RBSI. The debt facility has enabled the Company to raise and deploy capital more efficiently. All amounts drawn under the facility have been used in the financing of investments in accordance with the Company's investment policy. As at 30 September 2015, £41.6 million was drawn under the facility.

Board composition

On 6 May 2015 the Company announced the sudden death of Trevor Hunt. Trevor was a Director of the Company from inception and during that time made a huge contribution to its success. Trevor was greatly respected by his colleagues and will be sorely missed.

The Company has taken steps to appoint two new Directors and the Board would like to extend a warm welcome to Michael Gray and Julia Chapman who have been appointed as non‑executive Directors of the Company with effect from 1 October 2015. Michael Gray (FCIBS) is a Jersey resident, a qualified Corporate Banker and Corporate Treasurer. Julia Chapman is a solicitor with over 25 years' experience in the investment fund and capital markets sectors. In line with best practice, the Directors will be offering themselves for re‑election and the two new Directors will be offering themselves for election at the forthcoming Annual General Meeting on 12 February 2016 and annually going forward.

Governance and compliance

The Board held an annual strategy day in June 2015 to consider the structure and investment strategy of the Company. The discussions centred on advice received from the Investment Adviser as to general market conditions and future investment opportunities for the Company.

In December 2014, a formal review of Directors' remuneration was undertaken by Thomas & Dessain, an independent consultant. The review considered the workload and time commitment of Directors as well as the size and complexity of the Company. Following this review, recommendations were put forward and approved at the Annual General Meeting held in February 2015. Further details are contained in the Directors' remuneration report on pages 49 to 51.

Earlier in the year the Board decided it would be in the best interests of the Company's shareholders for the Audit Committee to conduct a formal Audit tender process in order to assist in assessing the performance of the existing external Auditor against other providers in the market and to determine whether it was appropriate to seek a new firm as external Auditor from next year.

As a result of this process, the Audit Committee found that the experience within the sector as well as the strength of the overall audit team demonstrated by KPMG would be more aligned to the Company. Therefore the appointment of KPMG in place of EY will be proposed at the forthcoming Annual General Meeting.

The Board recognises the importance of a strong corporate governance culture and continues to maintain principles of good corporate governance as set out in the UK Code which was updated in September 2014, and the Association of Investment Companies Code of Corporate Governance which was updated in February 2015 and accompanying guide. A copy of the UK Code is available at www.frc.org; a copy of the AIC Code and Guide can be found at www.theaic.co.uk.

The Company is subject to the changes in the Corporate Governance Code which became effective for annual reports for periods beginning on or after 1 October 2014. The Company has therefore included a Directors long‑term viability statement in its principal risks and uncertainties section on pages 32 to 35. The Directors met in October 2015 to discuss the viability statement as part of a bi‑annual risk review. This also included discussions on the risks the Company faces in its normal course of business.

The Company is classed as an externally‑managed AIF under the AIFMD. The Investment Adviser acts as the Company's AIFM and Capita Trust Company (Jersey) Limited act as Depositary to the Company.

Following the Company entering into the FTSE 250 index, the Board has reviewed the additional corporate governance requirements and is satisfied that the Company either already meets those requirements or intends to do so.

In October 2015 the Board held a meeting with shareholders to discuss the Company's strategy and performance as well as introducing the new Directors.

Strategic overview

To provide shareholders with regular, sustained, long-term distributions and to preserve the capital value of its investment assets over the long term.

Investment objectives and policies

The Company's investment objectives are to provide its shareholders with regular, sustained, long‑term distributions and to preserve the capital value of its investment assets over the long term, by generating exposure to subordinated PFI debt and/or similar assets.

The Company makes investments in subordinated debt instruments issued by infrastructure project companies, their owners or their lenders, and assets with a similar economic effect. The Company may also acquire (or acquire interests in) the senior debt of infrastructure project companies, or their owners.

The Company receives debt service payments in accordance with the terms of its investments. The debt service payments, comprising interest and principal payments, are covered by expected cash flows generated by the underlying infrastructure project company.

The objective of the Company is to generate a diversified portfolio of subordinated debt infrastructure assets and related and/or similar assets and to maintain its portfolio so that not more than 10% in value of the Company's total assets from time to time consist of securities or loans relating to any one individual infrastructure asset (having regard to the risks relating to any cross‑default or cross‑collateralisation provisions). This objective is subject to the Company having a sufficient level of investment capital from time to time and the ability of the Company to invest its cash in suitable investments and is subject to the investment restrictions described in the investment strategy.

Similarly, it is the intention of the Directors that the assets of the Company are (as far as is reasonable in the context of a UK infrastructure portfolio) appropriately diversified by asset type (e.g. PFI healthcare, PFI education, solar power, biomass etc.) and by revenue source (e.g. NHS Trusts, local authorities, FiT, ROCs etc.)

Non‑financial objectives of the Company

The key non‑financial objectives of the Company are:

· maintain strong relationships with all key stakeholders of the Company, including shareholders and borrowers; and

· develop and increase the understanding of the investment strategy of the Company and infrastructure as an investment class.

Key policies

Distribution

The Company aims to provide its shareholders with regular, sustained, long‑term distributions.

Capital raising and financing

The Company may seek to raise additional capital from time to time to the extent that the Directors and the Investment Adviser believe the Company will be able to make suitable investments. This will enable the Company to achieve greater diversification of risk and to benefit from economies of scale in relation to the operational costs of the Company.

Leverage and gearing

The Company intends to make prudent use of leverage to finance the acquisition of investments and enhance returns to investors.

Structural gearing of investments is permitted up to a maximum of 20% of the Company's net asset value immediately following draw down of the relevant debt.

Conflicts of interest

The Company has given its consent for the Investment Adviser to act as the investment manager to Project Finance, a closed‑ended investment company listed on the London Stock Exchange's Main Market. Project Finance is focused predominantly on debt investments secured against physical assets and/or contracted cash flows.

The Company has given its consent on the basis that where the Investment Adviser identifies an investment which, in its opinion acting reasonably and in good faith, falls within the Company's remit, the Company will have a right of first refusal.

Investment strategy

The Company achieves its investment objectives primarily by seeking exposure to debt (both senior and subordinated) secured against UK infrastructure projects with the following characteristics:

· pre‑determined, very long term, public‑sector backed revenues;

· no construction or property risk; and

· contracts where payments do not depend on the level of use of the project assets.

In accordance with the Company's prospectus, investments as described above must make up a minimum of 75% of the Company's total assets. The Company may also consider, in respect of up to an absolute maximum of 25% of its total assets (at the time the relevant investment is made), taking exposure to:

· projects that have not yet completed construction;

· projects in the regulated utilities sector; and

· projects with "demand" based concessions (i.e. where the payments received depend on the level of use of the project assets) or which have private sector‑sponsored concessions, to the extent that the Investment Adviser considers that there is a reasonable level of certainty in relation to:the likely level of demand; and

· the stability of the resulting revenue.

As at 30 September 2015 the Company does not have any exposure to projects purely in the regulated utilities sector or projects with demand based concessions. The Company's exposure to projects that have not yet completed construction with reference to total portfolio value at 30 September 2015 was 10.4%.

There is no, and it is not anticipated that there will be any, outright property exposure of the Company (except potentially as additional security).

Delivery of investment objectives through implementation of investment strategy

UK infrastructure market

UK Infrastructure assets involving private sector investment typically generate revenues from long-term, public-sector backed contracts.

Social and economic infrastructure

Since the mid‑1990s, the UK government has procured in excess of £60 billion of infrastructure using private‑sector finance, initially through the PFI structure and more recently under the new PF2 model. Under PFI and PF2, a private‑sector consortium enters into a contract with a central or local government entity (e.g. a local authority in the case of a school or an NHS trust in the case of a hospital) to design, finance, build and operate an infrastructure asset. The term of the contract post construction is typically 25 to 30 years, during which time the private sector consortium is required to operate the infrastructure asset and in return is paid an ongoing fee. The payment of such a fee is typically not dependent on the level of use of the infrastructure asset, but on whether the asset is available for use. The availability risk is typically passed down to the service providers with which the consortium contracts. As such, PFI and PF2 structures create long dated and predictable cash flows payable by central or local government entities.

Renewable energy infrastructure

Renewable energy is energy from resources which are naturally replenished, such as sunlight, wind and wood. In recent years there have arisen significant concerns in relation to both the limited nature of many traditional sources of power, such as oil, gas and coal, and the impact that the use of such sources has upon the environment. As a result, a substantial political will has developed to encourage the take up of renewable energy as a proportion of total energy use on a global level. Specifically, the EU's Renewable Energy Directive has set binding targets on member states to produce a pre‑agreed proportion of energy consumption from renewable sources such that the EU as a whole shall obtain at least 20% of its total energy from renewables by 2020.

In the UK, a variety of incentives were introduced by the government in order to stimulate private sector investment in renewable energy infrastructure, including the FiT scheme, the Renewables Heat Incentive and the Renewables Obligation scheme. These subsidies are typically payable over a 20‑year period to an owner of eligible renewable energy projects for the generation of energy using renewable sources. As such, renewable energy projects that receive subsidy payments generate long dated and predictable cash flows that are either implicitly or explicitly supported by the UK government.

Typical infrastructure project structure

UK infrastructure assets involving private sector investment are often constructed and (to a greater or lesser extent) maintained by a private sector entity or consortium acting through a single purpose company known as the project company. Such companies typically generate their primary source of revenue from long‑term contracts with public sector or public‑sector backed counterparties and are thus generally considered to be relatively dependable and predictable. The project company also enters into various contracts in order to deliver, inter alia, the construction and operations and maintenance of the project.

Illustrative priority of payments with typical infrastructure project structure

Total revenues, often contracted to rise in line with RPI or another inflation index, will typically be used to service (in order of priority) the cost of operating and/or maintaining the asset to the required standard, senior debt, subordinated debt (if any), and finally to provide a return to the equity holders.

Debt financing of UK infrastructure

Given the high capital cost and long‑dated cash flows generated by infrastructure assets, they are generally most efficiently financed by long‑dated debt. Prior to the financial crisis in 2007, this was typically provided by either the banking or debt capital markets. The banking market withdrew significantly from the long‑dated lending sector for liquidity and regulatory reasons although we have seen a number of international banks returning to the sector over the last few years. Institutional lenders and debt funds have also entered the market as potential debt providers.

Market outlook

Consistent clarity regarding the scale and details of future UK infrastructure development remains elusive whilst an increasing appetite for infrastructure exposure has seen prices rise across the sector.

The updated NIP presents an overview of the government's policy around infrastructure delivery over the medium term. It also details the government's approach to ensuring that the top forty priority investments remain on track, as well as providing the latest detail on the timing, funding and status of each. Recently, the government has backed up the NIP with the formation of the NIC, headed by Lord Adonis, tasked with independently monitoring the government's progress in delivering nationally critical infrastructure.

Whilst the NIP and the NIC are focused on promoting the delivery of high profile projects such as Crossrail, Thames Tideway and Hinkley Point, progress at local and regional levels continues to lag behind. In particular the government's flagship PF2 initiative has yet to gain the traction necessary to deliver the much needed private investment in social infrastructure. To date, PF2 progress has been limited to a modest number of deals under the PSPB and a handful of acute hospital transactions. The continued inactivity in the primary space has had the knock on effect of reduced deal flow in the secondary infrastructure space, as the number of projects available from primary developers dries up.

Recent developments in the renewable energy sector over the year have further compounded the lack of activity in the conventional infrastructure space. Whilst the UK still faces binding targets to increase the proportion of its energy generated from renewable resources to 15% by 2020, a number of recent policy actions have served to undermine the government's commitment to deliver a low‑carbon economy.

Specifically, during the year a number of key incentives to prospective developers of renewable energy assets have been either withdrawn or significantly scaled back, to strong industry opposition. These include the earlier than previously planned withdrawal of ROCs for onshore wind and small‑scale solar, a significant reduction in the FiT subsidy for domestic solar, and a removal of pre‑accreditation and other similar subsidy protections for lesser developed renewable technologies such as biomass. Further to this, the government also announced the removal of LECs which not only served to undermine the economics of prospective renewable energy developments, but also impacted on existing developments.

Under EMR, the government's support for the renewable energy sector will now shift towards to the CfDs model. The first CfDs auctions were conducted during the year, but the industry remains wary of their suitability for small scale renewables. Moving forward, it is expected that investment in renewable energy will be heavily channelled towards the offshore wind sector.

Continuing attractions of infrastructure investment

Investment in the infrastructure sector continues to represent a key source of diversification in investment portfolios. The predictable, long‑term nature of the income associated with the sector make it particularly attractive to institutional investors with similarly dated liabilities and limited capacity for risk. When considered along with the sector's credit profile, typically public‑sector backed and to a large degree insulated from wider economic conditions, these characteristics deliver an asset class with low correlation to the market and economic risks typically associated with the wider universe of public bonds and equities.

More specifically, investment in infrastructure debt generates exposure to long‑term income streams with structural seniority to equity. This increased robustness, coupled with the attractive risk‑adjusted returns on offer, means that an exposure to infrastructure debt is becoming an increasingly popular alternative to the more liquid bond markets.

The diversification benefits of the infrastructure sector continue to attract both equity and debt capital. There are estimated to be in excess of £18 billion of unlisted equity and debt funds with a mandate to invest in infrastructure in the UK. London Stock Exchange listed companies focused on investment in UK infrastructure raised £824 million in the year ended 30 September 2015 alone. Institutional investors such as insurers and pension funds continue to increase their allocations to the sector, driven by attractive risk adjusted returns and through encouragement from strategic initiatives such as the PIP.

Investment focus

Despite the growing attractiveness of the sector in general, institutional investors tend to be restricted to opportunities larger in size and profile, with additional parameters limiting investments to specific types of project technology, security and with overall limits to construction exposure. The Company still remains well positioned to achieve attractive returns in respect of opportunities relating to smaller infrastructure projects backed by long‑dated, public‑sector backed contracts, when such opportunities arise.

The last year has seen returns in some of the Company's core sectors continue to fall from levels already below the target interest rates of the Company, resulting in a challenging investment environment. Declining yields on mature operational assets have seen the Company largely priced out of the secondary market in the traditional renewables and PFI sectors, and the withdrawal of government support for new renewables investment, by way of large subsidy reductions, has rendered the Company an uneconomical source of funding for many primary developers in this space.

Despite these challenges, the Company was still able to advance over £220 million of new loans against renewable energy, social housing and PFI assets during the year. Many of these opportunities were made possible through the strength of the Company's relationships with existing borrowers, as well as through some of the softer non‑economic benefits of borrowing from the Company, such as speed of execution. In particular, the Company was able to lend against two substantial solar portfolios.

The Company remains alert to the possibility of similarly large portfolios coming to market where a similar approach could be adopted in order to enhance the Company's competitiveness.

Aside from the successes noted above, another area where the Company has seen progress this year has been in social housing. In particular, opportunities in the supported living sub‑sector, similar in their credit profile to availability based infrastructure, have seen the Company advance nearly £15 million in loans during the year. There remains significant potential to develop this further through the strategic relationships the Company has developed with prospective borrowers, with a short‑term pipeline in excess of £20 million.

BEPS

BEPS refers to the tax planning strategies of multinational corporations that exploit mismatches in national tax rules to artificially shift profits to low or no‑tax locations. The OECD is currently attempting to introduce a number of measures to address BEPS and announced on 5 October 2015, 13 final reports and an explanatory statement outlining consensus actions.

The Investment Adviser does not believe that OECD's measures to counter BEPS are a material risk to the Company primarily as the Company is a single company and it makes arm's length loans to third parties on wholly‑commercial terms. As such it is neither a multinational corporation nor engaged in artificial arrangements and as a result the Investment Adviser does not believe the Company is an intended target of the OECD's BEPS measures.

Nevertheless, the Investment Adviser will continue to monitor the outputs of the BEPS project with a view to ensuring the correct positioning of the Company in the future.

Review of the year

The Company raised a total of £140 million, put in place a credit facility of £50 million, made sixteen investments totalling £220.2 million and delivered a total shareholder return of 9.5%.

Merger

All of the Company's investments have been historically held through a wholly‑owned subsidiary. The Directors formed the view in July 2015 that it was no longer necessary for this arrangement to continue, and following approval of the merger by shareholders at an extraordinary general meeting on 14 August 2015, the Company merged with the subsidiary, pursuant to Part 18B of the Companies (Jersey) Law 1991 (as amended). The Company will continue as the surviving entity.

The merger will create cost efficiencies with the operation of a single entity, with a reduction in costs such as administration, annual reporting and audit fees. It will also lead to the streamlining of management and governance as there will in future be a single Board of Directors operating at Company level.

In May 2011 the International Accounting Standards Board issued amendments to IFRS 10, the purpose of which was to establish principles for the presentation of consolidated financial statements when an entity controls one or more other entities. The amendments became effective for reporting periods beginning on or after 1 January 2013 with subsequent amendments relating to investment entities published in December 2014 which took effect for accounting periods beginning after 1 January 2014.

The effect of this accounting standard means that under the previous structure the Company would have been unable to publish consolidated financial statements which presented the fair value of the underlying loan note portfolio on the face of the statement of financial position. The merger enables the Company to adopt a structure moving forward allowing it to prepare financial statements which accurately and transparently disclose all of its investments as well as continuing to adhere to financial reporting standards.

Further details of the merger and associated accounting impacts are disclosed in note 3.

Capital raised

The Company raised a total of £140 million during the year through two significantly oversubscribed capital raises under placing programmes. The Company raised £70 million on 21 November 2014 at a placing price per new ordinary share of 111.75 pence and £70 million on 10 June 2015 at a price per new ordinary share of 114.75 pence.

In the period since the year end, on 10 December 2015 the Company raised a further £20 million. The placing price was 118 pence per share.

Further details on the share movements are disclosed in note 17.

Credit facility

On 23 March 2015 the Company executed a three year £50 million revolving credit facility with RBSI. All amounts drawn under the facility are to be used in or towards the financing of investments in accordance with the Company's investment policy.

The terms of the credit facility are more favourable than the terms that were agreed with RBSI in 2011, reflecting the tightening of credit margins in the bank lending market. Interest on amounts drawn under the facility is charged at a rate of LIBOR plus 2.25% per annum. A commitment fee is payable on undrawn commitments. An arrangement fee was levied upon signing, details of which are given in note 16.

As at 30 September 2015, the Company had drawn down £41.6 million under the facility.

Valuation

The valuation of the portfolio as at 30 September 2015 was £657.7 million, compared to a valuation of £432.7 million at 30 September 2014. Comparative information has been restated as a result of applying IFRS 10, which changed the treatment of the Company's investment in subsidiary which previously was consolidated. The 30 September 2014 valuation in the valuation movement chart set out below represents the valuation of investments held by the subsidiary at 30 September 2014, prior to the merger with the Company.

Key investment highlights

The Company made sixteen new investments during the year totalling £220.2 million; twelve new loans, three extensions to existing facilities and the refinancing of eight existing loan notes into one note.

The Company made four investments totalling £25.5 million post year end.

Investments made during the year

Asset performance

Over 80% of the projects the Company is exposed to are fully operational. The remaining projects are either committed or under construction.

The PFI and social housing projects that support the Company's investments have experienced no material operational or construction issues.

Two macro‑economic and political issues over the period have impacted the cash flow generation on certain renewable energy assets; the removal of the Climate Change Levy exemption and lower than forecast power prices.

In the Summer Budget 2015 the Chancellor announced the removal of the Climate Change Levy exemption for renewable energy projects from 1 August 2015. The Investment Adviser conducted a review of the impact of this change on the assets of the Company and determined that a minority by value of the projects against which the Company has provided debt will see a modest reduction in the forecast net cash flows available to service such debt during the period to 2022. However, the cash flows expected to arise to the Company from such investments will be unaffected by the removal of the Climate Change Levy exemption.

Wholesale power prices have fallen sharply during the last year. However only 4.6% of the Company's current aggregate debt service receipts are expected to arise from cash flows exposed to fluctuations in power prices. As a result, whilst a number of projects to which the Company is exposed will experience net cash flows lower than originally forecast, the cash flows expected to arise to the Company from such projects are not currently expected to be affected by lower power prices.

With regard to asset‑specific issues, the cash flows generated by two biomass projects have been lower than expected due primarily to delays in grid connection and slower than predicted operational ramp up. In one of these cases action has been taken to support the borrower and ensure that the Company's investment is protected; as a result no material concerns have arisen in relation to the performance of the Company's loan. In the second case, throughout the year the Investment Adviser and its technical adviser closely monitored the situation. Post year‑end it was identified that some capital works may need to be carried out to ensure the project operates at optimal capacity. The board have considered the alternative actions available to address the performance issues including possible refinancing and additional capital works and have concluded that the value of this particular asset should be reduced as a result. The valuation of the loan has been reduced post year-end, resulting in a 0.35% reduction in the Company's NAV at the end of November 2015.

Assets under construction

All construction assets where relevant are timed within remaining government subsidy periods.

The assets under construction at 30 September 2015 are progressing in line with expectations (as shown above) or have been completed.

Financial performance

The Company has delivered another set of strong results with a profit of £48.7 million generated this year from the Company's investment portfolio. Investment income has increased this year following the deployment of £220.2 million into a variety of renewable energy and infrastructure projects. Finance costs of £0.7 million were incurred in respect of the Company's revolving credit facility drawn in March 2015.

Cash generation

The Company received debt payments of £48 million during the year, comprising £31.8 million of interest payments and £16.5 million of loan principal payments, in line with expectations. The Company fully drew down and repaid the loan facility during the year and subsequently redrew £41.6 million as at the year end.

The Company raised £140 million of equity capital and paid dividends of £39.0 million during the year. Total cash reserves at the year end were £4.9 million.

Dividends paid

The Company declared a dividend of 1.9 pence per ordinary share for the period from 1 July 2015 to 30 September 2015 on 13 October 2015. The dividend was paid on 25 November 2015 to holders of ordinary shares recorded on the register as at the close of business on 23 October 2015. The fourth interim dividend brings the total dividends declared or paid in the year to 7.6 pence per share.

The Company offered a scrip dividend alternative under which shareholders elected to receive new ordinary shares in lieu of the cash dividend. The price of a new ordinary share to be issued under the scrip dividend alternative was calculated by taking the average of the Company's closing middle market quotations of an ordinary share for the five consecutive dealing days commencing on the ex‑dividend date of 22 October 2015. A circular and form of election was sent to shareholders on 30 October 2015.

Net asset value and share price performance

The Company delivered a total shareholder return of 9.5% over the past twelve months and 67.9% since IPO. The Company has continued to trade at a significant premium to NAV, with an average premium over the year of 8.7% and 12.8% at year end. The share price hit an all‑time peak of 122.50 pence on 19 December 2014. The 52‑week low coincided with the shares going ex‑dividend following the September 2014 dividend announcement as would be expected.

Investment portfolio

The Company is exposed to a portfolio of 40 infrastructure loans valued at £657.7 million with an average annualised yield of 9.0% and an average life across the portfolio of 14 years.

Portfolio overview

The valuation of the Company's investments at 30 September 2015 was £657.7 million. The Company made sixteen new investments during the year; twelve new loans, three extensions to existing facilities and one refinancing of eight existing loan notes). The Company also received one debt prepayment under an existing facility, taking the number of investments to 40. The portfolio value increased by 52% over the year, providing improved diversification over a wider asset base.

Senior loans

At 30 September 2015 the weighted average annualised yield was 9.0% across the portfolio with a weighted average expected term of 14 years. The Company's investments are supported by a total of 93 underlying infrastructure projects located across the UK.

Key exposure

Investment valuation

The Valuation Agent, Mazars LLP carries out of a fair market valuation of the Company's investments on

behalf of the Board on a monthly basis. The valuation principles used by the Valuation Agent are based on a

discounted cash flow methodology. A fair value for each asset acquired by the Company is calculated by applying a discount rate (determined by the Valuation Agent) to the cash flow expected to arise from each asset.

The Valuation Agent determines the discount rate that it believes the market would reasonably apply to

each investment taking into account, inter alia, the following:

• sterling interest rates;

• movements of comparable credit markets; and

• observable yields on comparable instruments.

In addition, the following are also considered as part of the overall valuation process:

• general infrastructure market activity and investor sentiment; and

• changes to the economic, legal, taxation or regulatory environment.

The Valuation Agent exercises itsjudgement in assessing the expected future cash flows from each

investment. Given that the investments of the Company are generally fixed income debt instruments (in some cases with elements of inflation protection) or other investments with a similar economic effect, the focus of the Valuation Agent is on assessing the likelihood of any interruptions to the debt service payments, in light of the operational performance of the underlying asset.

The Valuation Agent utilises the key valuation inputs set out above to determine an appropriate valuation

for each investment. In the year there has been a tightening of yields available on secondary PFI and operational renewables assets, and in January 2015 and June 2015 certain assets in the portfolio were revalued upwards. This led to a ￡10.9 million net revaluation gain on the portfolio. The weighted average discount rate at 30 September 2015 was 8.32%, a decrease of 52 basis points from 8.84% as at 30 September 2014. The valuation of investments is sensitive to changes in discount rates applied. Sensitivity analysis detailing the impact of a change in discount rates is given in note 19.

Principal risks and uncertainties

The Board and the AIFM recognise that risk is inherent in the operation of the Company and are committed to effective risk management to protect and maximise shareholder value.

Risk management

Role of the Board

The Board has the ultimate responsibility for risk management and internal control within the Company.

The Board recognises the existence of inherent risks within the Company's operation and that effective risk management is critical to the success of the organisation. When setting the risk management strategy, the Board also determines the nature and extent of the principal risks they are willing to take to achieve the Company's strategic objectives.

The Board, with the assistance of the Audit Committee, undertakes a formal risk review twice a year to assess the effectiveness of the Company's risk management process and internal control systems. The review covers the operational, compliance and financial risks facing the Company. During the course of such review, the Board has not identified, nor been advised of any failings or weaknesses which it has determined to be of a material nature.

Principal risk and uncertainties

The principal risks and uncertainties the Company faces are set out below.

The principal financial risks, the Company's policies for managing these risks and the policy and practice with regard to financial instruments are summarised in note 19 to the financial statements.

The Board has also identified the following additional risks and uncertainties:

Going Concern and Viability statement

In accordance with provision C.2.2 of the 2014 revision of the UK Corporate Governance Code, the Directors have assessed the financial prospects of the Company for the next twelve months and made an assessment of the Company's ability to continue as a going concern. The Directors are satisfied that the Company has the resources to continue in business for the foreseeable future and furthermore are not aware of any material uncertainties that may cast significant doubt upon the Company's ability to continue as a going concern.

At least once a year, the Board carries out a robust assessment of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency and liquidity. The Directors have considered each of the Company's principal risks and uncertainties detailed on pages 32 to 34 in particular the risk and impact of changes in government policy that could materially affect the cash flows of the underlying projects that support the Company's investments. The Directors also considered the Company's policy for monitoring, managing and mitigating its exposure to these risks.

This assessment involved an evaluation of the potential impact on the Company of these risks occurring. Where appropriate, the Company's financial model was subject to a sensitivity analysis involving flexing a number of key assumptions in the underlying financial forecasts in order to analyse the effect on the Company's net cash flows and other key financial ratios.

In accordance with provision C.2.2 of the 2014 revision of the UK Code, the Directors have assessed the prospects of the Company over a longer period than the twelve months required by the going concern provision. The Board have conducted this review for a period covering the next five years as over this period it believes the risk is low on changes in government policy that would result in retrospective adjustments to such public-sector backed cash flows.

Given that the projects that the Company's investments are secured against are all UK infrastructure projects that generate long-dated, public-sector backed cash flows, the Board thus considers the revenue of the Company over that period to be dependable.

Additionally the Company primarily invests in long-dated, UK infrastructure debt that earns a fixed rate of interest and is repaid over time according to a pre-determined amortisation schedule. As such, assuming that the underlying projects perform as expected, the Company's cash inflows are also predictable.

Based on this assessment of the principal risks facing the Company and the stress testing based assessment of the Company's prospects, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the five year period of their assessment.

Governance

Board of Directors

Ian Reeves CBE, CCMI, FCInstCES, FRSA, FINSTD

Chairman - 71

Ian Reeves CBE, a UK resident, is an entrepreneur, international businessman and adviser. He is Senior Partner of Synaps Partners LLP and visiting Professor of Infrastructure Investment and Construction at Manchester Business School, The University of Manchester. He was made a Commander of the Most Excellent Order of the British Empire (CBE) in 2003 for his services to business and charity. Ian has served as a Director since 15 June 2010.

Clive Spears ACIB, MCISI

Deputy Chairman - 62

Clive Spears, a Jersey resident, is a career qualified corporate banker, with 32 years' experience with the Royal Bank of Scotland Group of which the last 18 years were spent in Jersey until retirement in 2003. Relevant experience has spanned Corporate Finance, Treasury Products, Global Custody and Trust & Fund Administration. Additional experience in audit and compliance has also accrued during the period. Mr Spears serves on the board of an AIM listed company, EPE Special Opportunities plc and on the board of a main market listed investment trust, Invesco Perpetual Enhanced Income Fund Ltd. Clive has served as a Director since 7 February 2014.

David Pirouet FCA

Audit Committee Chairman - 61

David Pirouet, a Jersey resident, is a qualified accountant. He was an audit and assurance partner for 20 years with PwC until he retired in June 2009. He specialised in the financial services sector, in particular in the alternative investment management area. Since retiring from PwC, Mr Pirouet serves on the board of another listed company including the AIM listed Ludgate Environmental Fund Limited and on privately held investment entities. David has served as a Director since 15 June 2010.

Julia Chapman

Non‑executive Director - 50

Resident in Jersey, Julia Chapman was appointed to the Board on 1 October 2015 and is a solicitor qualified in England & Wales and Jersey with over 25 years' experience in the investment fund and capital markets sector. Having trained with Simmons & Simmons in London, Julia moved to Jersey to work for Mourant du Feu & Jeune (now Mourant Ozannes) and became a partner in 1999. Julia was then appointed general counsel to MIFA (the firm's fund administration division) with responsibility for legal, risk and compliance oversight of third‑party administration services to alternative investment funds. Ms Chapman serves on the board of a main market listed company, Henderson Far East Income Limited.

Paul de Gruchy

Non‑executive Director - 43

Paul de Gruchy, a Jersey resident, is a qualified lawyer currently working as Head of Legal at a global financial services business in Jersey. He has extensive experience in the financial services sector, in particular in the area of offshore funds. He has held senior positions at the Jersey Economic Development Department and the Jersey Financial Services Commission (the regulator of the Company). Paul has served as a Director since 7 February 2014.

Michael Gray FCIBS

Non‑executive Director - 49

Michael Gray is a Jersey resident, a qualified Corporate Banker and Corporate Treasurer was appointed to the Board on 1 October 2015. Michael was most recently the Regional Managing Director, Corporate Banking for RBS International, based in Jersey but with responsibility for The Royal Bank of Scotland's Corporate Banking Business in the Crown Dependencies and British Overseas Territories.

In a career spanning 31 years with The Royal Bank of Scotland Group plc, Michael has undertaken a variety of roles including that of an Auditor for four years and has extensive general management and lending experience across a number of industries.

The Investment Adviser

Stephen Ellis

Partner

Stephen Ellis has overall responsibility for the provision of investment advice to the Company.

Stephen graduated from Oxford University in 1980 and after a short service commission with the British Army he spent a 16 year career in investment banking, principally in tax‑based finance, securitisation and debt origination. Stephen formed the Investment Adviser in 2008 after five years as a Director at DTZ Corporate Finance, where he had responsibility for all UK infrastructure financing, in particular in the healthcare and education sectors.

Rollo Wright

Partner

Rollo Wright is responsible for asset acquisition. He is also responsible for monitoring and reporting on the ongoing performance of the Company.

Rollo graduated with a degree in Mathematics from Oxford University before qualifying as a chartered accountant with Arthur Andersen. He moved to the capital markets division of Commerzbank Securities where he focused on the origination of pan‑European corporate debt, specifically convertible bonds. He joined the structured finance team at DTZ Corporate Finance in 2004 and specialised in advising on the sale and financing of healthcare and education projects, as well as the structuring of residential property‑backed transactions.

Nick Parker

Partner

Nick Parker is responsible for asset sourcing and acquisition, and the negotiation and documentation of the Company's financing and hedging arrangements.

Nick holds a degree in Economics from Cambridge University. After ten years in investment banking, focused on rate structured products and asset‑backed securities, he became a Director of Structured Finance at DTZ where he advised on the financing of long‑dated cash flows underlying property and infrastructure assets, particularly in respect of their documentation and hedging.

Ronan Kierans

Partner

Ronan Kierans is responsible for asset sourcing and acquisition. His role involves identifying suitable assets, and carrying out and reporting on acquisition due diligence, including financial modelling and insurance, legal and built asset due diligence.

Ronan qualified as a chartered accountant with KPMG Dublin and subsequently worked in corporate finance with KPMG and DTZ Corporate Finance. At KPMG, Ronan worked on a number of corporate tax and M&A transactions. During his time at DTZ Corporate Finance, Ronan worked in the fund structuring team, specialising in the structuring of, and asset acquisition for, European property funds. In 2007, Ronan moved to the Infrastructure team at DTZ, where he primarily worked on healthcare projects.

Chloe Marlow

Head of Operations and Risk

Chloe Marlow is responsible for reporting and monitoring of the ongoing performance of the Company.

Before joining GCP in 2013, she worked in a broad range of financial services roles over ten years. Chloe began her career at Lloyds Banking Group where she qualified as a Chartered Management Accountant. After holding a number of finance roles at the bank, she went on to work as a project accountant for a large IFA before joining fund administrator Capita Sinclair Henderson Limited in 2011 as a fund accountant, where she was responsible for a portfolio of alternative real estate and infrastructure funds.

Ben Perkins

Analyst

Ben Perkins is responsible for asset sourcing and acquisitions, and the reporting and monitoring of the ongoing performance of the Company.

Ben graduated from Warwick University with a degree in Mechanical Engineering. He then spent five years at John Laing where he was involved in originating and monitoring a variety of infrastructure assets, whilst also obtaining the CFA qualification. He then moved to Hadrian's Wall Capital, specialising in infrastructure debt structuring, before joining GCP in 2013.

Corporate governance statement

The Disclosure Rules of the UK Listing Authority require certain listed companies to disclose how they have applied the principles and complied with the provisions of the Corporate Governance Code to which the issuer is subject. The Board has considered the principles and recommendations of the AIC Code by reference to the AIC Guide. The AIC Code, as explained by the AIC Guide, addresses all the principles set out in the UK Code issued by the FRC, as well as setting out additional principles and recommendations on issues that are of specific relevance to the Company.

The FRC has confirmed that AIC member companies who report against the AIC Code and who follow the AIC Guide will be meeting their obligations in relation to the UK Code and the associated disclosure requirements of the Disclosure Rules. The Board considers that reporting against the principles and recommendations of the AIC Code, and by reference to the AIC Guide (which incorporates the UK Corporate Governance Code), will provide better information to shareholders. The AIC Code can be viewed at www.theaic.co.uk.

Statement of compliance with the AIC Code and Guide

The Board recognises the importance of a strong corporate governance culture that meets the Listing Rules of the UKLA. The Board has put in place a framework for corporate governance which it believes is appropriate for the Company. All Directors contribute to Board discussions and debates. The Board believes in providing as much transparency for shareholders as is reasonably possible. It should be noted that most of the Company's day-to-day responsibilities are delegated to third parties, the Company has no employees and the Directors are non-executive.

The Company has complied with the recommendations of the AIC Code and the relevant provisions of the UK Code, except as set out below:

· the role of the Chief Executive: for the reasons set out in the AIC Guide, and as explained in the UK Code the Board considers that the post of Chief Executive Officer is not relevant for the Company, being an externally managed investment Company;

· the appointment of a Senior Independent Director: the Nomination Committee has discussed whether it would be in the best interests of the Company to recommend to the Board the appointment of a Senior Independent Director and have agreed that at the present time the Board has an appropriate balance of skills and experience and as such, an appointment is not considered necessary. However the Nomination Committee has agreed to keep the matter under regular review;

· executive Directors' remuneration: as the Board has no executive Directors, it is not required to comply with the principles of the AIC Code in respect of executive Directors' remuneration and does not have a Remuneration Committee. A full remuneration report is included on pages 49 to 51;

· internal audit function: the Company delegates the majority of its operations to third parties and has no employees. The majority of these third parties have their own internal audit function and the Board has therefore determined that there is no need for the Company to have its own internal audit function but this is reviewed on an annual basis. The Directors consider semi-annually the principal risks relating to the operations of the Company. Such a review includes the consideration of whether the Company's third parties have adequate internal controls in place; and

· the Chairman of the Company, Ian Reeves CBE is a member of the Audit Committee. The Board believes it is appropriate for Mr Reeves to be a member of the Committee as he is considered to be independent and there are no conflicts of interest.

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

Following the Company entering into the FTSE 250 index the Board has reviewed the additional corporate governance requirements and is satisfied that the Company either already meets these requirements or intends to do so. The requirements identified that were not currently being met but where the Company intends to do so are shown below:

· all directors of FTSE 350 companies should be subject to annual election by shareholders -The Company intends to comply as disclosed inthe Chairman's statement.

The Board's responsibilities and processes

The Board is responsible to shareholders for the overall management of the Company, and may exercise all the powers of the Company subject to the relevant statutes, the Company's Articles of Association and any directions given by special resolution of the shareholders. The Articles of Association empower the Board to offer, allot, grant options over or otherwise deal with or dispose of the Company's shares as the Board may decide. The Companies (Jersey) Law 1991 authorises the Company to make market purchases of its own shares if the purchase has first been authorised by a resolution of the Company.

At the Annual General Meeting in February 2015, shareholders renewed the Board's authority to allot ordinary shares and to repurchase ordinary shares on behalf of the Company subject to certain limits. Details of the authorities which the Board will be seeking at the 2016 Annual General Meeting are set out in the 2016 Notice of Annual General Meeting.

At each quarterly meeting of the Board, the Directors follow a formal agenda which includes a review of the Company's investments and associated matters such as gearing, asset allocation, principal risks, marketing and investor relations, and economic and industrial issues. The Board is also active in ensuring any regulatory developments which may affect the operations of the Company are considered. The Board regularly considers the Company's investment objective and strategy. In June 2015 a strategy day was held which all of the Directors attended.

In order to enable the Directors to discharge their responsibilities effectively, they have full and timely access to all relevant information.

Matters reserved for the Board

The Board has approved a formal Schedule of Matters Reserved to it for decision. These matters include:

· approval of the Company's investment policy and commercial strategy;

· approval of the Company's half-yearly report and annual financial statements;

· changes relating to the capital structure of the Company or its status as an investment company;

· changes relating to the Company's listing on the London Stock Exchange;

· approval of the dividend policy;

· appointments to the Board and its Committees;

· adequacy of internal controls;

· appointment and removal of the Investment Adviser;

· approval of any major acquisitions or disposals, including the acquisition or disposal of interests of more than 5% in the voting shares of any company or the making of any takeover bid;

· approval of all circulars, prospectuses and listing particulars;

· periodic review of the Company's corporate governance arrangements including compliance with the terms of the UK Corporate Governance Code and AIC Code; and

· periodically review and determine the remuneration and the expense procedure for Directors of the Company.

The schedule of matters reserved for the Board is available on request from the Company Secretary or on the Company's/Investment Adviser's website.

Composition of the Board

The Board consists of six Directors, all of whom are non-executive Directors and are considered to be independent.

Each of the Directors has signed letters of appointment which set out the terms and conditions of their appointment. These letters are available for inspection at the Company's registered office. No Director has any contract or arrangement in place between themselves and the Company. Further details as to the terms of appointment of the Directors are set out in the remuneration report on pages 49 to 51.

Overview of Board and employees

Appointments to the Board continue to be based on merit, regardless of gender, ethnic group or background. The Board comprises five male Directors and one female Director (2014: five male and no female Directors). The Company has no other employees.

Diversity is an important consideration in ensuring that the Board and its Committees have the right balance of skills, experience, independence and knowledge necessary to discharge their responsibilities. The right blend of perspectives is critical to ensuring a successful Board and Company.

Appointment and re-election of Directors

On 1 October 2015 Julia Chapman and Michael Gray were appointed to the Board of Directors.

Under the provisions of the Company's Articles, the Directors retire by rotation with one-third of the Directors submitting themselves for election at each Annual General Meeting. The Board does recognise that as a FTSE 250 Company and in line with good corporate governance set out in the Code, all Directors should put themselves forward for re-election every year.

It has therefore been determined that each Director will be offering themselves for re-election and the two newly appointed Directors will be offering themselves for election at the forthcoming Annual General Meeting on 12 February 2016.

None of the Directors has served on the Board for more than six years and there are no executive Directors. The Board does not currently have a policy on tenure but it is aware of the potential impact on independence that long tenure may have.

The Board will therefore be confirming its policy on tenure in 2016.

The Board has reviewed the independence of each Director in accordance with the guidance set out under Principle 2 of the AIC Code and the corresponding AIC Guide. The Board acknowledges that Paul de Gruchy has a direct 284,309.45 and an indirect 396,461.30 holding in the shares of OEIC, The OEIC's primary asset is shares in the Company. The Board has discussed Mr de Gruchy's interest in the OEIC and maintains that it does not materially impact his ability to exercise independent judgement on the Board. Accordingly the Board considers all Directors on the Board to be independent.

Performance evaluation

Last year, the Directors participated in a formal evaluation process which was conducted by external independent consultants, Thomas & Dessain and it is intended to carry out an external review every three years with the next review due to take place in 2017.

As part of an internal evaluation process this year the Nomination Committee reviewed the suggestions made in the prior year arising from the external review for further enhancement of the Board and Committees' performance. The evaluation process also included the completion of three separate questionnaires by all Directors. The areas under review included an assessment of the Chairman, Board and Committee process and effectiveness, overall strategy, corporate governance, investment management, shareholders, training requirements and personal development. A report on the results of the evaluation concluded that the Chairman, the Board and the Committees and each of the individual Directors are performing well.

Additionally the Board undertakes annual anti-money laundering training and the Jersey resident Directors undertake the required hours of Continuing Professional Development in accordance with their profession and Jersey regulations including training on areas relating to the Company's activities such as specialist renewable sectors.

The Board attempts to ensure that it has the appropriate balance of skills, experience, knowledge and independence in order to remain effective. Biographical details of the Directors are shown on page 36.

Board operation

The Board holds formal meetings on a quarterly basis and additional ad-hoc meetings are held when necessary. Attendance at the quarterly Board and Committee meetings is displayed in the table below (under 'Meetings').

The principal matters considered by the Board during the year (in addition to matters formally reserved to the Board) included:

· the Company's strategic model, related KPIs and annual budget;

· regular reports from the Board's Committees;

· the annual report and financial statements and half-yearly report;

· the Company's dividend policy; and

· organisational capability and succession planning.

Committees

The structure includes the Audit Committee, an Investment Committee, a Management Engagement Committee and a Nomination Committee.

Audit Committee

The membership and activities of the Audit Committee are described in its report on pages 44 to 46.

Investment Committee

At 30 September 2015 the Investment Committee comprised of two Directors, namely Clive Spears (Chairman), and Paul de Gruchy. Trevor Hunt also served on the Committee until his sad death on 2 May 2015. On 1 October 2015 Julia Chapman was appointed on the Committee.

The Board has agreed Terms of Reference for the Committee which is bound to meet to consider each new investment proposal received from the Investment Adviser and attendant advisory reports and recommendations. The Committee has met twelve times during the year. The Committee is also responsible for ensuring key conditions precedents are complied with for each deal and for sign off on release of capital advances.

Management Engagement Committee

The Management Engagement Committee comprises of all Directors of the Company in view of the wide remit of the Committee. The Board has agreed Terms of Reference for the Committee, which meets at least once a year to consider the performance of the Investment Adviser and other third-party service providers; the terms of their engagement and to consider their continued appointment. The Committee met on two occasions during the last financial year for an interrogative workshop and follow up session and recommended that Gravis Capital Partners LLP be retained as Investment Adviser in addition to the continued engagement of the third party service providers whom the Committee independently evaluated.

Conflicts of interest

The Directors have declared any conflicts or potential conflicts of interest to the Board of Directors which has the authority to approve such situations. The Company Secretary maintains the Register of Directors' Conflicts of Interests which is reviewed quarterly by the Board and whenever changes are notified. The Directors advise the Company Secretary and Board as soon as they become aware of any conflicts of interest. Directors who have conflicts of interest do not take part in discussions which relate to any of their conflicts.

It is the responsibility of each individual Director to avoid a conflict arising. In the event that a conflict of interest arises, the Director(s) must request authorisation from the Board as soon as they become aware of the possibility of a situational conflict arising.

The Board is responsible for considering Directors' requests for authorisation of situational conflicts and for deciding whether or not the situational conflict should be authorised. The factors to be considered will include whether the situational conflict could prevent the Director from properly performing his duties, whether it has, or could have, any impact on the Company and whether it could be regarded as likely to affect the judgement and/or actions of the Director in question. When the Board is deciding whether to authorise a conflict or potential conflict, only Directors who have no interest in the matter being considered are able to take the relevant decision, and in taking the decision the Directors must act in a way they consider, in good faith, will be most likely to promote the Company's success. The Directors are able to impose limits or conditions when giving authorisation if they think this is appropriate in the circumstances.

The Directors must also comply with the statutory rules requiring company directors to declare any interest in an actual or proposed transaction or arrangement with the Company.

Meetings

The number of meetings of the Board and Committees held during the year and the attendance of individual Directors are shown below:

Julia Chapman and Michael Gray were appointed to the Board on 1 October 2015.

Dialogue with shareholders

The Board recognises the importance of maintaining a purposeful relationship with shareholders. The Company, through its Directors, Investment Adviser and Joint Brokers, engages in ongoing communication with its shareholders. The Board encourages shareholders to attend and vote at general meetings of the Company in order that they may discuss governance and strategy and to understand shareholders' issues and concerns. The Chairman of the Board and the Chairmen of each of the Committees attend general meetings of the Company to answer any questions posed by the shareholders.

The Company's annual and interim results are dispatched to shareholders by post and are also available to download from the Company's website at www.gcpuk.com. This information is supplemented by the monthly calculation and publication at the London Stock Exchange of the NAV of the Company's shares and the publication of a monthly factsheet by the Investment Adviser.

In the annual report the Directors seek to provide shareholders with information in sufficient detail to allow them to obtain a reasonable understanding of recent developments affecting the business and the prospects for the Company in the year ahead. The various sections of the strategic report on pages 10 to 35 provide further information.

Communication of up-to-date information is provided through the website at www.gcpuk.com.

Internal controls and risk management review

The Directors acknowledge that they have overall responsibility for ensuring that there are in place systems of internal control, both financial and non-financial, and for reviewing their effectiveness. The purpose of the internal financial controls is to ensure that proper accounting records are maintained, the Company's assets are safeguarded and the financial information used within the business and for publication is accurate and reliable; such a system can provide only reasonable and not absolute assurance against material misstatement or loss.

The Board reviews the effectiveness of its risk management systems and all financial performance and results notifications together with the Investment Adviser. Non-financial internal controls include the systems of operational and compliance controls maintained by the Administrator and the Investment Adviser in relation to the Company's business as well as the management of key risks as referred to in the Directors' report. Please refer to pages 32 to 35 for a more detailed overview of the risks that have been assessed.

Responsibility for accounting and Company secretarial services has been contractually delegated to the Administrator. The Administrator has established its own system of internal controls in relation to these matters, details of which have been reviewed by the Board as part of the semi-annual risk assessment.

Internal control assessment process

The Board conducts a risk assessment on a semi-annual basis. The review covers the operation, compliance and financial risks facing the Company. The Directors confirm that by means of the procedures set out above, and in accordance with the UK Corporate Governance Code and the AIC Code and Guide, they have established a continuing process for identifying, evaluating and managing the significant potential risks faced by the Company and have reviewed the effectiveness of the internal control systems. This process has been in place throughout and subsequent to the accounting year under review.

AIFMD

The Company is classed as an externally-managed alternative investment fund under the Directive. The Board appointed the Investment Adviser as the authorised Alternative Investment Fund Manager to the Company and Capita Trust Company (Jersey) Limited as the Company's Depositary under the Directive on 22 July 2014. On 10 September 2014 the Investment Adviser was approved by the Financial Conduct Authority to act as Alternative Investment Fund Manager of the Company for the purposes of the AIFMD.

AIFM remuneration

With effect from 22 July 2014, the Company's Investment Adviser was authorised as an AIFM by the FCA under the AIFMD regulations. The Company has provided disclosures on its website, www.gcpuk.com, incorporating the requirements of the AIFMD regulations.

All authorised AIFMs are required to comply with the AIFMD Remuneration Code. The FCA's General Guidance on the AIFM Remuneration Code has established that the first full performance year is the first full performance period after the firm becomes authorised. The financial year end of the Company's AIFM is 31 March 2015 and therefore the remuneration information available will not provide materially relevant, reliable, comparable and clear information to investors about the remuneration policy of the AIFM until the Directive has been in force a full performance period.

In circumstances where the items of information relating to remuneration are not available to the AIFM in respect of the relevant reporting period in the required form, the Board have been advised that detailed information on remuneration of the Company's AIFM need not be disclosed until Directive has been in force for a full performance period. The expectation of the Board is that the information will be disclosed in the 30 September 2016 annual report and financial statements.

The total annual fee paid to the Investment Adviser by the Company is disclosed in note 20 to the financial statements.

Annual General Meeting

The Annual General Meeting of the Company will be held on 12 February 2016 at 12 Castle Street, St Helier, Jersey JE2 3RT.

Audit Committee report

Summary

Revised versions of the UK Code and the AIC Code and Guide were published in September 2014 and February 2015 respectively with the amended provisions having a specific impact on audit committee reporting. The Board has adopted the provisions set out in the revised UK Code and the AIC Codes.

The Audit Committee operates within clearly defined Terms of Reference, a copy of which is available on request from the Company Secretary. The terms of reference require the Audit Committee to monitor the Company's financial reporting, internal controls and risk management and external audit process. The Audit Committee is responsible for making recommendations to the Board in respect of appointment, reappointment and remuneration of the Auditor and the Auditor's plan for the year.

Composition

At 30 September 2015, the Audit Committee comprised three of the Company's Directors, the Chairman, David Pirouet, who is a Chartered Accountant and a former audit partner, Ian Reeves CBE and Clive Spears. Subsequent to the year end, Michael Gray was appointed to the Committee on 1 October 2015 and Clive Spears stepped down from the Committee at the conclusion of the Board meeting held on 17 December 2015. The Board considers that the independence, experience and knowledge of each of the Audit Committee members is sufficient for discharging its responsibilities. The Audit Committee meets at least twice a year.

Financial reporting

The Audit Committee considered the requirements of the UK Companies Act 2006 (Strategic Report and Directors' Report) Regulation 2013 with which it is complying voluntarily, in line with best practice reporting. The Audit Committee specifically reviewed the annual report and financial statements to conclude whether the financial reporting is fair, balanced, understandable, comprehensive and consistent with (i) prior year reporting; and (ii) how the Board assesses the performance of the Company's business during the financial year, as required for companies with a Premium Listing under the UK Corporate Governance Code. As part of this review, the Audit Committee considered if the annual report and financial statements provided the information necessary to shareholders to assess the Company's performance, strategy and business model and reviewed the description of the Company's key performance indicators.

The Audit Committee presented its conclusions to the Board and the Board concluded that it considered the annual report and financial statements, taken as a whole, to be fair, balanced and understandable and provides the information necessary for the shareholders to assess the Company's performance, business model and strategy.

In addition to the above matters, the Audit Committee's work was focused on the following areas:

· reviewing the effectiveness of the internal control environment of the Company and the Company's compliance with its regulatory requirements;

· reviewing and recommending to the Board significant accounting matters and accounting disclosures in the half-yearly and annual financial statements of the Company including the effect of the application of IFRS 10 and the merger and matters of judgement in relation to valuation. This year the areas examined include the discount rates applied in the valuation process and the performance of the investments. The Audit Committee discussed these matters with the Valuation Agent, the Investment Adviser and the Auditor, including the Auditor's valuation specialist;

· overseeing the Company's relations with its External Auditor including assessing the conduct and effectiveness of the audit process and the Auditor's independence and objectivity, recommending the Auditor's reappointment and approving the Auditor's fees; and

· reviewing the Company's compliance with its regulatory obligations in Jersey.

The External Auditor is invited to attend the Audit Committee meeting at which the annual report is considered and at which they have the opportunity to meet with the Audit Committee without representatives of the Investment Adviser being present. The Audit Committee has direct access to the external Auditor and to key senior staff of the Investment Adviser, and it reports its findings and recommendations to the Board which retains the ultimate responsibility for the financial statements of the Company. All recommendations were accepted by the Board.

Significant issues considered

After discussions with both the Investment Adviser and the external Auditor, the Audit Committee determined that the key risks of material misstatement of the Company's financial statements related to:

· revenue recognition

· valuation of investments; and

· existence and ownership of investments.

Revenue recognition

The material components of investment income reported in the statement of comprehensive income comprise dividend income, unrealised gains on the investment portfolio and interest received on the loan notes held. The Audit Committee has reviewed the accounting policies applied with regard to these as well as the procedures applied and has concluded these are satisfactory.

Valuation of investments

As outlined in note 19, the total carrying value of financial assets at fair value at 30 September 2015 was £657.7 million (2014: £432.7 million). Market quotations are not available for these financial assets such that their valuation is undertaken using a discounted cash flow methodology. This requires a series of material judgements to be made as further explained in note 19.

The Audit Committee discussed the valuation process and methodology with the Investment Adviser in May, June and October 2015 as part of the review of the half-yearly and annual reports. The Valuation Agent carries out a valuation monthly and provides a detailed valuation report to the Company.

In order to provide further assurance regarding the basis of valuation, the Company meets with the Valuation Agent at least once a year to discuss this as well as reviewing the formal reports from the Valuation Agent on a regular basis.

The Audit Committee met with the external Auditor at the time at which the Audit Committee reviewed and agreed the external Auditor's audit plan in September 2015 and also at the conclusion of the audit of the financial statements in December 2015 and in particular discussed the audit approach and conclusion on the valuation.

The discount rates adopted to determine the valuation are selected and recommended by the Valuation Agent. The discount rate is applied to the expected future cash flows for each investment's financial forecasts derived adopting the assumptions explained above to arrive at a valuation (discounted cash flow valuation). The resulting valuation is sensitive to the discount rate selected. The Valuation Agent is experienced and active in the area of valuing these investments and adopts discount rates reflecting their current and extensive experience of the market. The discount rate assumptions and the sensitivity of the valuation of the investments to this discount rate are disclosed in note 19.

In particular the Audit Committee considered in detail the reductions of the discount rate applied to certain assets during the year. The Valuation Agent explained this was principally as a consequence of increased competition in the secondary market for infrastructure and renewable assets, which had been seen during bidding and general market activity. This was also corroborated by the Investment Adviser.

The Audit Committee discussed the material estimates and judgements and also compared this to feedback from the Investment Adviser. The Audit Committee was satisfied that the range of discount rates was appropriate for the valuation carried out by the Valuation Agent.

The Auditor explained the results of their audit and that on the basis of their audit work there were no adjustments proposed that were material in the context of the financial statements as a whole.

Existence and ownership of investments

The Company held 40 investments at the end of the year. The Board reviews the Custodian and Depositary report on a quarterly basis, which confirms the existence of the assets at the quarter end date and follows up on any outstanding issues to confirm that the Company has satisfactory title to all assets held.

The Audit Committee met with the external Auditor at the time at which the Audit Committee reviewed and agreed the External Auditor's approach to the existence of the Company's investments in its plan in September 2015 and at the conclusion of the audit in December 2015.

External audit

Audit fees for the year amounted to £55k (2014: £40k) and non-audit fees amounting to £37k (2014: £58k)

The Audit Committee reviewed the effectiveness of the external audit process during the year, considering performance, objectivity, independence and relevant experience with EY during the year.

In order to assist in assessing the performance of the existing external Auditor against other providers in the market and to determine whether it was appropriate to seek a new firm as external Auditor from next year the Audit Committee conducted a formal audit tender process.

Mr Pirouet, Chairman of the Audit Committee, together with a partner of the investment Adviser met with four audit firms in September 2015, that had been invited to tender for the external audit work, including EY. The Audit Committee considered each of the tender submissions in detail and received presentations in October 2015. As a result of this process, the Audit Committee found that the experience demonstrated within the sector as well as the strength of the overall audit team at KPMG would be better aligned to the Company's requirements and it was therefore proposed to recommend the appointment of KPMG in place of EY at the Annual General Meeting.

Nomination Committee report

The Nomination Committee comprises Ian Reeves CBE, Clive Spears and David Pirouet. The function of this Committee is to consider appointments to the Board and its individual committees in the context of the requirements of the Company and its need to have a balanced and effective Board. The Nomination Committee is also obliged to consider succession planning for Directors with particular attention paid to the challenges and opportunities facing the Company. Gender and diversity are taken into account when evaluating the skills, knowledge and experience desirable to fill vacancies on the Board as and when they arise. The Committee would like to emphasise that all appointments to the Board are based on merit. The Committee believes the Directors provide, individually and collectively, the necessary breadth of skills and experience to run the Company.

Mr Reeves is Chairman of the Nomination Committee but he will not chair at any meeting when dealing with the appointment of a successor to chairmanship. Following the sad death of Trevor Hunt on 2 May 2015, the Board engaged an external recruitment consultant to identify potential candidates. The Nomination Committee then drew up a shortlist of candidates for interview and following this they made a recommendation to the Board.

The Nomination Committee met to review and evaluate the performance of the Board. The evaluation process involved an analysis of the Board performance and that of its Committees and individual Directors. The Chairman also held one-on-one discussions informed by a checklist with all Directors. The results of the evaluation process were reported to, and discussed by, the Board and the Nomination Committee. The evaluation considered the overall composition of the Board including plans for board succession over time and the delivery of Directors performance appraisals. At this meeting, the Committee noted that each of the Directors had expressed an intention to continue as Directors of the Company for the foreseeable future. The Committee also agreed that Clive Spears would continue to assume the role of Deputy Chairman in the event of Mr Reeves' unavailability.

Based on the outcome of the Board performance evaluation process, the Nomination Committee agreed to recommend the re-appointment of Mr Reeves. The Committee believes that Mr Reeves has continued to make valuable contributions to the Company and has exercised his judgement and expressed his opinions in an independent manner.

The Company does not have a Remuneration Committee; the Board fulfils the role of the Remuneration Committee as it was agreed that the size and nature the Board does not warrant the establishment of a separate committee.

The Terms of Reference for each of the Committees are available on request from the Company Secretary.

Remuneration report

The Directors are pleased to present their report on remuneration for the year ended 30 September 2015. The report is made up of two sections; the Directors' policy report and the annual report on remuneration.

The annual remuneration report provides details on remuneration in the year. It will be subject to an advisory shareholder vote at the 2016 Annual General Meeting. Although it is not a requirement under Jersey Company Law to have the annual report on remuneration approved by shareholders, the Board believes that as a company whose shares are listed on the London Stock Exchange it is good practice for it to do so. Accordingly a resolution to approve the annual report on remuneration will be proposed at the forthcoming Annual General Meeting.

This report is not subject to audit.

Directors' policy report

The Board considers that Directors' fees should reflect the time commitment required and the level of responsibility borne by Directors, and should be broadly comparable to those paid by similar companies. It is not considered appropriate that Directors' remuneration should be linked to individual performance and none of the Directors are eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits in respect of their services as non-executive Directors of the Company.

In December 2014, the Board engaged an independent external consultant Thomas & Dessain to conduct a review of the Directors' remuneration and their recommendations were put forward to the 2015 Annual General Meeting. The cumulative cap on Directors' base remuneration was increased from £270,000 to £370,000 at the 2015 Annual General Meeting and the linkage of the fees to net asset value was ceased. In addition the caps were increased as follows:

· Chairman; an increase from £45,000 to £55,000;

· Chairman of Audit Committee: an increase from £35,000 to £45,000;

· Chairman of Investment Committee: an increase from £35,000 to £45,000; and

· Director: an increase from £35,000 to £40,000.

The following table provides a summary of the key elements of the remuneration package for non‑executive Directors:

All non-executive Directors, including the Chairman, serve under letters of appointment and either party can terminate on three months' written notice provided that any such notice shall not expire earlier than the first anniversary of the Director's appointment. Neither the Chairman nor the non-executive Directors have any right to compensation on the early termination of their appointment.

Annual remuneration report

The fees paid to the Directors in the year ended 30 September 2015 are set out in the table below:

Directors' expenses for the year totalled £13k (30 September 2014: £4k), no other remuneration or compensation was paid or payable by the Company during the year to any of the Directors.

Statement of Directors' shareholding and share interests

Paul de Gruchy has an indirect interest in the Company via GCP Infrastructure OEIC Limited. Mr de Gruchy has a direct interest in 284,309.45 ordinary accumulation shares and an indirect interest in 396,461.30 ordinary accumulation shares of GCP Infrastructure OEIC Limited.

None of the Directors have been granted options to acquire shares in the Company.

The Directors do not hold any shares in the Company and there have been no changes from the 30 September 2015 to the date of this report.

Statement of voting at general meeting

The Company is committed to ongoing shareholder dialogue and takes an active interest in voting outcomes. Where there are substantial votes against any resolution at the Annual General Meeting, the Company will liaise with their investors and agree actions it intends to take going forward.

At the last Annual General Meeting 99.99% of shareholders voted for the resolution to approve the Directors' remuneration report.

Approach to recruitment remuneration

The principle adopted by the Board is that fees for future non-executive Directors should reflect the performance of the Company, as well as the responsibilities and time commitment required. The Board seeks to ensure that remuneration packages offered are designed to promote the long-term success of the Company. Any new Director would be paid on the same basis as the existing Directors' remuneration.

In respect of the appointment of the two new Directors in October 2015, the Board used an external recruitment consultant to identify potential candidates. The Nomination Committee then drew up a shortlist of candidates for interview and following this they made a recommendation to the Board.

Company performance

In setting the Directors' remuneration, consideration is given to the size and long-term performance of the Company. The tables below highlight the comparative total shareholder return to ordinary shareholders since launch compared with the GBP Corporate Bond Index over the same period. The GBP Corporate Bond Index is used as a benchmark as the constituents are comparable in asset type with the Company's investments portfolio (being a portfolio of debt instruments) During the year, the total shareholder return for the Company was c.67.86% compared with the GBP Corporate Bond Index which was 41.54%.

Cumulative performance to 30 September 2015

Annual performance to 30 September 2015

Relative importance of the spend on pay

The table below sets out in respect of the financial years ended 30 September 2015 and 30 September 2014, Directors fees for the Company as a relative proportion of the Company's total expenses for the year:

Directors' report

The Directors are pleased to present their annual report and the audited financial statements for the year ended 30 September 2015. The corporate governance statement set out on pages 38 to 43 forms part of this report.

Principal activity and business review

The strategic report has been prepared by the Directors and should be read in conjunction with the Chairman's statement which forms part of the annual report to shareholders.

Greenhouse gas emissions reporting

The Company funds renewable energy projects which are seeking to reduce the United Kingdom's greenhouse gas emissions. The Company has no employees or property, and it does not purchase electricity, heat, steam or cooling for its own use.

The Company outsources all services on a fee basis, and, as such it is not practical to attempt to measure or quantify emissions in respect of any outsourced energy use. Additionally, the Company loans money to SPVs and does not have the ability to control the activities of these SPVs and has no responsibility for their emissions.

Therefore the Directors believe the Company has no reportable emissions for the year ended 30 September 2015.

Dividends

The Directors have announced a fourth interim dividend of 1.9 pence per ordinary share which was paid on 25 November 2015 to ordinary shareholders on the register on 23 October 2015.

The Company offered a scrip dividend alternative under which shareholders elected to receive new ordinary shares in lieu of the cash dividend. The price of a new ordinary share to be issued under the scrip dividend alternative was calculated by taking the average of the Company's closing middle market quotations of an ordinary share for the five consecutive dealing days commencing on the ex-dividend date of 22 October 2015. A circular and form of election was sent to shareholders on 30 October 2015.

Share capital

During the year the Company issued 126,060,923 ordinary shares of £0.01. Details of the movements in share capital during the year are set out in the statement of changes in equity on page 64 and in note 17.

At 30 September 2015 the Company's issued share capital comprised 576,481,586 ordinary shares of £0.01, none of which were held in treasury. At general meetings of the Company, every holder shall have one vote in respect of every ordinary share.

Significant voting rights

As at 30 September 2015 the Company had received notification of the following disclosable interests in the voting rights of the Company:

No changes have been notified to the Company between 30 September 2015 and the date of this report.

Directors

The Directors in office as at 30 September 2015 are listed on page 36.

Details as to the Directors' terms of appointment can be found in the corporate governance statement on pages 38 to 43 and the remuneration report on pages 49 to 51.

Directors' interests

None of the Directors have been granted options to acquire shares in the Company.

None of the Directors or any persons connected with them have had a material interest in the Company's transactions or agreements during the year.

There are no agreements between the Company and its Directors concerning compensation for loss of office.

Directors' and officers' liability insurance and indemnity agreements

The Company has purchased insurance to cover Directors' and officers' liability as permitted by the Law.

Key service providers

Gravis Capital Partners LLP (the "Investment Adviser"), provides advice to the Directors of the Company to enable them to make informed decisions for the Company's funding requirements (including advice and assistance in any equity/further fund raising process) and also borrowings/gearing requirements. The terms of appointment of the Investment Adviser and their fees are explained on note 20.

The Investment Adviser also provides advice which enables the Directors of the Company to identify potential investments, the performance of existing assets and the financial and infrastructure markets generally.

The partners of the Investment Adviser formed Gravis Capital Partners LLP in May 2008 with a view to developing a specialist infrastructure advisory boutique. This business model was amended to focus specifically on fund management, principally in the area of UK infrastructure in July 2009.

The partners in the Investment Adviser have a long track record of working within the UK infrastructure market, particularly with regard to debt advisory work.

The partners of the Investment Adviser have advised extensively on debt structures in a wide variety of infrastructure sectors, including a wide variety of renewable energy sectors, healthcare, education, court buildings, specialised offices, registered social landlord accommodation and transport. They have primarily advised project companies or their owners.

The personnel primarily responsible for delivering investment advice to the Company on behalf of the Investment Adviser are detailed on page 37.

The Company is party to an Investment Adviser Agreement under which the Investment Adviser provides advisory services relating to the Company's assets on a day-to-day basis in accordance with the investment objectives and policies agreed by the Company and under the overall supervision and direction of the Board of Directors.

The Investment Adviser Agreement was amended in January 2014 to reflect a change in methodology for the calculation of fees and the provision of AIFM services to the Company. An increase in the fees payable for the provision of AIFM services was agreed by the Board in October 2014. The Investment Adviser Agreement was further amended and restated in November 2015 in order to ensure that the key person provisions of that agreement remain up to date. The remuneration of the Investment Adviser is set out in note 20 to the financial statements.

The Company has noted the publication of a prospectus on 29 September 2015 by Project Finance, a new fund for which the investment manager is Gravis Capital Partners LLP, which is also the Investment Adviser to the Company. The Directors further note that Project Finance will seek to make investments in a portfolio of project finance loans across multiple sectors. Under its Investment Advisory Agreement, the Company's prior consent is required for the Investment Adviser to act as the adviser, manager or sponsor of any fund or entity that may invest in assets within the scope of the Company's investments or engage in any activity which may compete in the same or substantially similar investment area as the Company.

The Company has given its consent for the Investment Adviser to act as the investment manager of Project Finance, on the basis that the Investment Adviser has agreed with the Company that where it identifies an investment which, in its opinion acting reasonably and in good faith, falls within the Company's remit, the Company will have a ROFR.

The Directors believe that the Company's investment objectives, and the pipeline of opportunities available to it, will not be adversely affected, and that the ROFR Agreement protects the Company's interests in the event of any conflict. The Investment Advisory Agreement continues to contain other clauses specifying minimum time commitments from key Investment Adviser personnel and general provisions for dealing with conflicts of interest.

Fund accounting administration services and company secretarial services are provided to the Company by Capita Financial Administrators (Jersey) Limited pursuant to an Agreement dated 31 January 2014. The fee for the provision of these services during the year was £531k (2014: £461k). The Agreement with Capita Financial Administrators (Jersey) Limited continues until terminated by either party on giving not less than six months' written notice.

Custodian services are provided to the Company by Capita Trust Company (Jersey) Limited pursuant to an agreement dated 21 July 2014. The fee for the provision of these services during the year was £170k (2014: £125k). The agreement with Capita Trust Company (Jersey) Limited continues until terminated by either party on giving not less than six months' written notice.

Registrar services are provided to the Company by Capita Registrars (Jersey) Limited pursuant to an agreement dated 28 June 2010. The fee for the provision of these services during the year was £75k (2014: £69k). The agreement with Capita Registrars (Jersey) Limited continues until terminated by either party on giving not less than six months' written notice.

The Directors undertake an annual review of the effectiveness of all third-party service providers. Following this review, it is the Directors' opinion that the continuing appointment of the Investment Adviser, the Fund Administrator and the Company Secretary, the Custodian and the Registrar, is in the best interests of the Company and its shareholders.

Political donations

The Company made no donations to political parties or organisations during the year and no political expenditure was incurred.

Annual general meetings

The Company's annual report and financial statements for the year will be tabled for approval at the Company's 2016 Annual General Meeting. It is anticipated that this Annual General Meeting will be held on 12 February 2016 at 12 Castle Street, St Helier, Jersey JE2 3RT.

Share repurchases

No shares have been bought back in the year. The latest authority to purchase ordinary shares for cancellation was granted to the Directors on 12 February 2015 and expires on the date of the next Annual General Meeting. The Directors are proposing that their authority to buy back shares be renewed at the forthcoming Annual General Meeting on 12 February 2016.

Treasury shares

The Companies (Jersey) Law allows companies to hold shares acquired by market purchase as treasury shares, rather than having to cancel them. Up to 10% of the issued shares may be held in treasury and may be subsequently cancelled or sold for cash in the market. This gives the Company the ability to reissue shares quickly and cost efficiently, thereby improving liquidity and providing the Company with additional flexibility in the management of its capital base.

Auditor

Each of the persons who is a Director at the date of approval of this annual report confirms that:

· so far as the Director is aware, there is no relevant audit information of which the Company's Auditor is unaware; and

· the Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company's Auditor is aware of that information.

Following an audit tender process in October, the Board are recommending that KPMG be appointed as Auditor and a resolution to appoint them will be proposed at the upcoming Annual General Meeting. The Board would like to thank the current Auditor EY who will not be standing for re-election as Auditor at the upcoming Annual General Meeting.

Non-mainstream pooled investments

The Board notes the rules of the UK Financial Conduct Authority on the promotion of non-mainstream pooled investments, effective from 1 January 2014. The Board confirms that it conducts the Company's affairs, and intends to continue to conduct its affairs, so that the Company's shares will be "excluded securities" under the FCA's new rules. This is on the basis that the Company, which is resident outside the EEA, would qualify for the approval as an investment trust by the Commissioners for HM Revenue and Customs under Sections 1158 and 1159 of the Corporation Tax Act 2010 if resident and listed in the United Kingdom. Therefore, the Company's shares will not amount to non-mainstream pooled investments. Accordingly, promotion of the Company's shares will not be subject to the FCA's restriction on promotion of non-mainstream pooled investments.

Statement of Directors' responsibilities

The Directors are responsible for preparing the Annual report and the financial statements in accordance with applicable law and regulations.

The Companies (Jersey) Law 1991 requires the Directors to prepare such financial statements for each financial year. Under Article 105 (2) (a) of that law, the Directors are required to prepare the Company financial statements in accordance with one of the stated generally accepted accounting principles. The Directors have chosen International Financial Reporting Standards ("IFRS") as adopted by the European Union. As a company listed on the London Stock Exchange, the Company is subject to the FCA's Listing Rules and Disclosure and Transparency Rules as well as to all applicable laws and regulations of Jersey, where it is incorporated. Under the Law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, International Accounting Standard 1 requires that Directors:

· properly select and apply accounting policies;

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

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

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

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies (Jersey) Law 1991, as amended. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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

Directors' responsibility statement

In accordance with the FCA's Disclosure and Transparency Rules, each of the Directors, whose names are set out on page 36 confirms that to the best of his/her knowledge:

1. the financial statements, prepared in accordance with IFRS as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

2. the strategic report and the Directors' report, includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that they face.

The annual report and financial statements, taken as a whole, are considered by the Board to be fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

Independent Auditor's reportOur opinion on the financial statements

In our opinion:

· GCP Infrastructure Investments Limited's financial statements (the "financial statements") give a true and fair view of the state of the Company's affairs as at 30 September 2015 and of its profit for the year then ended;

· the financial statements have been properly prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union; and

· the financial statements have been prepared in accordance with the requirements of the Companies (Jersey) Law 1991.

What we have audited

GCP Infrastructure Investments Limited's financial statements comprise:

· statement of comprehensive income for the year ended 30 September 2015;

· statement of financial position as at 30 September 2015;

· statement of changes in equity for the year ended 30 September 2015;

· statement of cash flows for the year ended 30 September 2015; and

· related notes 1 to 24 to the financial statements.

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

Overview of our audit approach

Risks of material misstatement:

· existence and ownership of investments;

· valuation of investments; and

· revenue recognition.

Audit scope:

· we performed an audit of the complete financial statements of the Company for the year ended 30 September 2015;

· as a result of the application of the IFRS10 amendments for Investment Entities ("IFRS10 amendments"), consolidated financial statements are no longer prepared for the entity, with its investment in subsidiary instead being held at fair value through profit or loss until the subsidiary was merged with GCP Infrastructure Investments Limited on 30 September 2015 (refer to note 3 for further details); and

· procedures were performed by the audit team in a single location with any work relating to the subsidiary during the period prior to merger being directly conducted by the audit team.

Materiality:

· overall materiality of £6.2 million which represents 1% of total equity.

Our assessment of risk of material misstatement

We identified the risks of material misstatement described below as those that had the greatest effect on our overall audit strategy, the allocation of resources in the audit and the direction of the efforts of the audit team. In addressing these risks, we have performed the procedures below which were designed in the context of the financial statements as a whole and, consequently, we do not express any opinion on these individual areas.

In the prior year, our Auditor's report included a risk of material misstatement in relation to risk of management override. Addressing the risk of management override is a requirement of auditing standards and we concluded that this risk is most likely to occur in the risk areas identified above. In the current year, as a result, we have not provided separate responses to the risk of management override and have instead reflected this consideration of risk as part of our responses to the specific risks set out above.

The scope of our audit

Tailoring the scope

Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope. Taken together, this enables us to form an opinion on the financial statements.

In prior periods we conducted an audit of the consolidated financial statements of the Company and its wholly owned subsidiary, GCP Infrastructure Asset Holding Limited. In the current year, as a result of the required application of IFRS10 amendments, the Company was required to hold its investment in its subsidiary at fair value for financial reporting purposes and as a result consolidated financial statements have not been presented.

In addition, with effect from 30 September 2015, the subsidiary was merged into the Company leaving a single operating entity with direct exposure to the investment portfolio held at the year end.

Our audit scope was tailored to reflect the above changes.

The primary accounting and administrative activities for both the Company and its subsidiary were conducted in the same geographical locations and by the same service providers during the year and as a result our work was conducted as a single audit process.

Our application of materiality

We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit and in forming our audit opinion.

Materiality

This is the magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the economic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our audit procedures.

We determined materiality for the Company to be £6.2 million (2014: £4.7 million), which is 1% (2014: 1%) of total equity.

It was considered inappropriate to determine materiality based on Company profit before tax as the primary focus of the Company is the overall performance of investments held which includes a significant asset revaluation component. In addition, profit is not a key metric reported upon by the Company, with the ability to make dividend payments not limited by the profitability of the Company in any particular period.

We believe that total equity provides us with an appropriate basis for audit materiality as net asset value is a key published performance measure and is a key metric used by management in assessing and reporting on the overall performance of the Company.

During the course of our audit, we reassessed initial materiality and noted no factors leading us to amend materiality levels from those originally determined at the audit planning stage.

Performance materiality

This refers to the application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.

On the basis of our risk assessments, together with our assessment of the Company's overall control environment, our judgement was that performance materiality was 75% (2014: 75%) of our planning materiality, namely £4.6 million (2014: £3.5 million). We have set performance materiality at this percentage due to investment strategy remaining consistent with our previous experience and limited identification of audit findings in previous periods.

Reporting threshold

An amount below which identified misstatements are considered as being clearly trivial.

We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of £0.3 million (2014: £0.2 million), which is set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.

We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of other relevant qualitative considerations in forming our opinion.

Scope of the audit of the financial statements

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

Respective responsibilities of Directors and Auditor

As explained more fully in the Directors' responsibilities statement set out on page 55, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

This report is made solely to the Company's members, as a body, in accordance with Article 113A of the Companies (Jersey) Law 1991. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Matters on which we are required to report by exception

Statement on the Directors' assessment of the principal risks that would threaten the solvency or liquidity of the entity

Notes:

1. The maintenance and integrity of the Company information published on the Gravis Capital Partners LLP/GCP Infrastructure Investments Limited website is the responsibility of the Directors; the work carried out by the Auditor does not involve consideration of these matters and, accordingly, the Auditor accepts no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

2. Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Statement of comprehensive incomeFor the year ended 30 September 2015

1. Comparative information, including relevant notes, has been restated as a result of applying IFRS 10, including Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27). Refer to note 2 and 3 for details.

Statement of financial positionAs at 30 September 2015

1. Comparative information, including relevant notes, has been restated as a result of applying IFRS 10, including Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27). Refer to note 2 and 3 for details.

Statement of changes in equityFor the year ended 30 September 2015

1. Comparative information, including relevant notes, has been restated as a result of applying IFRS 10, including Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27). Refer to note 2 and 3 for details.

Statement of cash flowsFor the year ended 30 September 2015

1. Comparative information, including relevant notes, has been restated as a result of applying IFRS 10, including Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27). Refer to note 2 and 3 for details.

Notes to the financial statementsFor the year ended 30 September 2015

1. General information

GCP Infrastructure Investments Limited is a public company incorporated and domiciled in Jersey with registration number 105775, on 21 May 2010. The Company is governed by the provisions of the Companies (Jersey) Law, 1991, as amended, and the Collective Investment Funds (Jersey) Law 1988.

The Company is a closed‑ended investment company incorporated under the laws of Jersey. The ordinary shares of the Company are listed on the Main Market of the London Stock Exchange.

The Company makes infrastructure investments through acquiring (or acquiring interests in) debt instruments issued by infrastructure project companies (or by their existing lenders or holding vehicles) that are, or are expected to be, in receipt of public‑sector backed cash flows. These acquisitions were made through the subsidiary before the merger of the Company and its subsidiary at 30 September 2015.

At the 30 September 2015 the Company merged with its subsidiary. The Company now holds all the assets of the original Company and the subsidiary to create a more transparent and cost effective vehicle to deploy capital.

2. Significant accounting policies

2.1 Basis of preparation

These financial statements are prepared in accordance with IFRS and interpretations issued by the International Financial Reporting Interpretations Committee of the International Accounting Standards Board ("IASB") as they apply to the financial statements of the Company for the year as required by IFRS and as adopted by the European Union.

The financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities held at fair value through profit or loss. The financial statements are presented in sterling and all values have been rounded to the nearest thousand pounds (£'000) except where otherwise indicated.

The Company has historically raised new capital through placings of ordinary shares, and through placings of C shares which convert in accordance with the relevant C share prospectus into ordinary shares. When in issue, the net assets attributable to the C share class are accounted for and managed by the Company as a distinct pool of assets, with the Company ensuring that separate cash accounts are created and maintained. Similarly, C share cash invested by the Company is managed as a distinct pool of C share assets.

Changes to accounting standards and interpretations

The accounting policies adopted are consistent with those followed in the preparation of the Company's annual financial statements for the year ended 30 September 2014, except for the adoption of IFRS 10 and new standards and interpretations effective as of 1 October 2014.

IAS 24 Related Party Disclosures on key management personnel (effective for annual periods beginning on or after 1 July 2014) has had no impact on the financial statements of the Company.

The Company has applied, for the first time, IFRS 10 Consolidated Financial Statements.

IFRS 10 (including the investment entities amendments) has made a significant impact to the financial performance and position of the Company as its adoption requires the restatement of results previously presented.

IFRS 10 replaces the portion of IAS 27 Consolidated and Separate Financial Statements that addresses the accounting for consolidated financial statements. It also addresses the issues raised in SIC‑12 Consolidation - Special Purpose Entities. IFRS 10 establishes a single control model that applies to all entities including special purpose entities.

In addition, IFRS 10 includes an exception from consolidation for entities, which meet the definition of an investment entity, and requires such entities to recognise investments at fair value through profit or loss, other than investments in entities that provide investment‑related services.

The Company met the definition of an investment entity (see note 2.2), and therefore all investments are recognised at fair value through profit or loss. This has changed the treatment of the Company's investment in the subsidiary, which was previously consolidated, was treated as an investment in subsidiary at fair value up to the date of merger on 30 September 2015 upon which the assets and liabilities were then merged with the Company. Under the transitional provisions of IFRS 10 this change in accounting policy is required to be accounted for retrospectively. Therefore, the relevant comparative figures have been restated.

Due to the underlying nature of the Company investing in an open ended vehicle, there are variances between the operating profit reported at Company level and consolidation due to the valuation of investments and varying ownership percentages. As a result of the restatement of the comparatives, there is an increase in the reserves of £27,000 as at 1 October 2013 attributable to this fact.

The impact of these changes on the statement of financial position as at 30 September 2014 and the statement of comprehensive income and statement of cash flows for the year ended 30 September 2014 are shown below:

The most significant change relates to the recognition under IFRS 10 of the receivable from subsidiary that was previously eliminated on consolidation. In addition the financial assets at fair value through profit or loss are impacted by the remainder of net assets and liabilities no longer being consolidated.

The most significant changes relates to certain items of income and expenditure, recognised by the subsidiary, previously reflected in the consolidated statement of comprehensive income but now form part of the movement in fair value of subsidiary. Income that was historically received by the subsidiary is no longer reflected in the statement of comprehensive income other than to the extent income was formally distributed from subsidiary to parent during the period. The decrease in distributions to non‑controlling interests relates to the removal of distributions paid to minority interests of the subsidiary that were previously reflected in the consolidated statement of comprehensive income.

The decrease in cash flow from operating activities upon application of IFRS 10 results primarily from investment income cash inflows at the subsidiary level not being recorded in the company cash flow statement. The increase in cash generated from financing activities results from the cash paid as dividends from subsidiary to parent that was previously eliminated on consolidation.

New standards, amendments and interpretations

There are a number of new standards and amendments to existing standards which have been published and are mandatory for the Company's accounting periods beginning after 1 October 2015 or later periods, but the Company has decided not to early adopt them. The following are the most relevant to the Company:

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

· IFRS 7 Financial Instruments: Disclosures - amendments regarding additional hedge accounting disclosures (applies when IFRS 9 is applied);

· IFRS 15 Revenue from Contracts with Customers was issued in May 2014 and applies to an annual reporting period beginning on or after 1 January 2018; and

Other than the above details it is not practical to provide a reasonable estimate of the effect of these standards until a detailed review has been completed.

The Company does not expect that the adoption of new accounting standards issued but not yet effective to have a significant impact on its financial statements.

2.2 Significant accounting judgements and estimates

The preparation of financial statements in accordance with IFRS requires the Directors of the Company to make judgements, estimates and assumptions that affect the reported amounts recognised in the financial statements. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability in the future. For more details in respect of the judgements and estimates applied in the valuation of investment please refer to note 19.

Assessment as investment entity

Entities that meet the definition of an investment entity within IFRS 10 are required to measure their subsidiaries at fair value through profit or loss rather than consolidate them. The criteria which define an investment entity are, as follows:

· an entity that obtains funds from one or more investors for the purpose of providing those investors with investment services;

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

· an entity that measures and evaluates the performance of substantially all of its investments on a fair value basis.

The Company reports to its investors via monthly investor information, and to its management, via internal management reports, on a fair value basis. All investments are reported at fair value to the extent allowed by IFRS in the Company's annual reports.

The Board has also concluded that before the merger the Company met the additional characteristics of an investment entity, in that it indirectly held a portfolio of investments by investing in an investment entity that itself holds a portfolio of investments; the investments are predominantly in the form of equities and similar securities; it has more than one investor and its investors are not related parties.

The Board has concluded that the Company, before the merger, met the definition of an investment entity.

Fair value of subsidiary

Before the merger, the Company had a wholly‑owned subsidiary, which was a vehicle to hold the Company's investments. These investments are valued by a third party Valuation Agent using the discounted cash flow methodology, which is deemed an appropriate method in measuring their fair value.

Following the introduction of IFRS 10, which became applicable for accounting periods beginning on or after 1 January 2013, the Company is no longer allowed to prepare consolidated financial statements and had to fair value its subsidiary. This has resulted in a significant change in the accounting policy for the subsidiary and the opening comparative figures were restated. The most significant impact of these changes was the restatement of the investment in subsidiary on the statement of financial position at fair value. The income statement was also restated to show the movement in fair value of the subsidiary.

During the year, the subsidiary continued to be held at fair value through profit or loss with only income distributions recorded as income together with any unrealised movement in the fair value of the subsidiary. The merger took effect on the 30 September 2015 at which point the Company has taken over the assets and liabilities of the subsidiary at their fair values and eliminated against the Company's cost of investment, resulting in no gains or losses upon the merger. The holding of the portfolio of loan notes held by the subsidiary prior to merger is now shown as financial assets through profit or loss on the statement of financial position.

Going concern

The Directors have made an assessment of the Company's ability to continue as a going concern and are satisfied that the Company has the resources to continue in business for the foreseeable future. Furthermore, the Directors are not aware of any material uncertainties that may cast significant doubt upon the Company's ability to continue as a going concern. Therefore, the financial statements have been prepared on the going concern basis. In addition to a going concern assessment the Directors have undertaken a longer term assessment of the Company, the results of which can be seen on page 35 in the viability statement.

2.3 Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below.

(a) Financial instruments

(i) Classification

The Company classifies its financial assets and financial liabilities into the categories below in accordance with IAS 39.

Financial assets and liabilities at fair value through profit or loss

This category consists of financial instruments designated at fair value through profit or loss upon initial recognition. These financial assets are designated on the basis that they are part of a group of financial assets which are managed and have their performance evaluated on a fair value basis, in accordance with the risk management and investment strategies of the Company, as set out in the prospectus dated 30 March 2015. The financial information about the financial assets of the Company is provided by the Investment Adviser to the Directors with the valuation model being supplied by the Valuation Agent.

In accordance with IAS 32 (Financial Instruments: Presentation) the Company's C share class fund when in existence, is designated as a financial liability on the Company's statement of financial position, due to the obligation to convert the C shares to ordinary shares and the inherent variability in the number of ordinary shares attributable to C shareholders on conversion. No C shares have been issued in the year and as at 30 September there were no C shares in issue.

(ii) Recognition

The Company recognises a financial asset or a financial liability when, and only when, it becomes a party to the contractual provisions of the instrument. Purchases or sales of financial assets that require delivery of assets within the time frame generally established by regulation or convention in the marketplace are recognised on the trade date, i.e. the date that the Company commits to purchase or sell the asset.

(iii) Derecognition

A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised where:

· the rights to receive cash flows from the asset have expired; or

· the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a 'pass‑through' arrangement; and

· either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company transfers its rights to receive cash flows from an asset or has entered into a pass‑through arrangement, and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Company's continuing involvement in the asset.

The Company derecognises a financial liability when the obligation under the liability is discharged, cancelled or expired.

(iv) Initial measurement

Financial assets and financial liabilities at fair value through profit or loss are recorded in the statement of financial position at fair value. All transaction costs for such instruments are recognised directly in the statement of comprehensive income.

(v) Subsequent measurement

After initial measurement, the Company measures financial instruments which are classified as fair value through profit or loss at fair value. Subsequent changes in the fair value of those financial instruments are recorded in the statement of comprehensive income.

(b) Determination of fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. For all other financial instruments not traded in an active market, the fair value is determined by using appropriate valuation techniques. Valuation techniques include using recent arm's length market transactions, referenced to appropriate current market data, and discounted cash flow analysis, at all times making as much use of available and supportable market data as possible.

An analysis of fair values of financial instruments and further details as to how they are measured are provided in note 19.

(c) Functional and presentation currency

The primary objective of the Company is to generate returns in sterling, its capital‑raising currency. The Company's performance is evaluated in sterling. Therefore, the Directors consider sterling as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions and have therefore adopted it as the presentation currency.

(d) Dividends paid to shareholders

In accordance with the Company's constitution, in respect of the ordinary shares and C shares when in issue, the Company will distribute the income it receives to the fullest extent that is deemed appropriate by the Directors. Dividends due to the Company's shareholders are recognised when they become payable.

(e) Cash and cash equivalents

Cash and cash equivalents in the statement of financial position and statement of cash flows comprise cash on hand, demand deposits, short term deposits in banks with original maturities of three months or less and short‑term, highly‑liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(f) Borrowings

Borrowings are recognised initially at fair value, less attributable costs. Borrowings are subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the statement of comprehensive income over the period of the borrowings using the effective interest method.

(g) Receivables and payables

Receivables and payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

A provision for impairment is established when there is objective evidence that the Company will not be able to collect all amounts according to the original terms of the receivable/payable.

(h) Interest revenue and expense

Interest revenue and interest expense other than interest received on financial assets at fair value through profit or loss are recognised on an accruals basis in the statement of comprehensive income.

(i) Dividend income

Dividend income is recognised when the right to receive payment has been established.

(j) Arrangement fees

Arrangement fee income comprises reimbursement of fees relating to the issue and setup of loan notes by the respective project company. The income and related expense is recognised in the statements of comprehensive income upon completion of the relevant deal.

(k) Finance expense

Interest expense in the statement of comprehensive income comprises of loan arrangement and commitment fees which are expensed in the year they occur and interest accrued on the facility incurred in connection with the borrowing of funds.

(l) Fees and commissions

Fees and commissions in the statement of comprehensive income and the statement of financial position are recognised on an accruals basis.

(m) Share capital

The Directors of the Company continually assess the classification of the ordinary shares and C shares. If the ordinary shares cease to have all the features or meet all the conditions set out to be classified as equity, they will be reclassified as financial liabilities and measured at fair value at the date of reclassification, with any differences from the previous carrying amount recognised in equity. If the C shares subsequently have all the features and meet the conditions as equity, they will be reclassified as equity instruments and measured at the carrying amount of the liabilities at the date of reclassification.

Upon issuance of shares, the consideration on the ordinary shares received is included in equity and the consideration received on the C shares is included in financial liabilities.

Transaction costs incurred by the Company in issuing, acquiring or reselling its own equity instruments are accounted for as a deduction from equity to the extent that they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

No gain or loss is recognised in the statement of comprehensive income on the purchase, sale, issuance or cancellation of the Company's own equity instruments.

3. Merger of subsidiary

Investment in subsidiary is accounted for at fair value in accordance with the principles of IFRS 10. In prior years the results of the subsidiary were consolidated within the Company's financial statements but with the application of IFRS 10 the comparative figures have been restated to take account of this change. The Company has accounted for its investment in subsidiary at fair value up to the date of merger on the 30 September 2015.

In preparation for the merger the subsidiary distributed to the Company all capital and income held at the subsidiary level. The result of this distribution meant that the Company was able to assume the assets and liabilities of the subsidiary at their fair values which were eliminated against the Company's cost of investment resulting in no gains or losses upon merger.

The results of the subsidiary up to the date of merger are disclosed below:

Below are details of the subsidiary which was held by the Company at the comparative year end and until merger at 30 September 2015:

4. Segment information

For management purposes, the Company is organised into one main operating segment. All of the Company's activities are interrelated, and each activity is dependent on the others. Accordingly, all significant operating decisions are based upon analysis of the Company as one segment. The financial results from this segment are equivalent to the financial statements of the Company as a whole.

Operating income

The following table analyses the Company's underlying operating income per geographical location. The basis for attributing the operating income is the place of incorporation of the underlying counterparty.

The Company's main income is derived from dividends paid by the former subsidiary, which was a company domiciled in the Channel Islands.

The table below analyses the Company's operating income for the year per investment type:

The table below analyses the operating income derived from the Company's financial assets and liabilities at fair value through profit or loss:

5. Auditor's remuneration

6. Operating expenses

7. Finance expenses

8. Directors' remuneration

The Directors of the Company are remunerated on the following basis:

Full details of the Directors' remuneration policy can be found in the Directors' remuneration report on pages 49 to 51.

9. Taxation

Profits arising in the Company for the year ended 30 September 2015 are subject to tax at the standard rate of 0% (30 September 2014: 0%) in accordance with the Income Tax (Jersey) Law 1961 as amended.

10. Dividends

Total dividends paid at Company level for the year ended 30 September 2015 totalled 7.6 pence per share (30 September 2014: 7.6 pence per share) as follows:

The dividends settled in shares where shareholders have elected to take the scrip dividend alternative.

The Directors have announced a fourth interim dividend of 1.9 pence per ordinary share amounting to £10,953,150 which was paid on 25 November 2015 to ordinary shareholders on the register on 23 October 2015.

11. Earnings per share

Basic and diluted earnings per share are calculated by dividing profit for the year attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the year.

12. Other receivables and prepayments

13. Other payables and accrued expenses

14. Amounts held on security account

Until 11 June 2015, amounts held on security account related to a cash deposit of £1,230,482 belonging to GPFI. The cash was held in a segregated Company account as collateral to protect the Company against under performance of the loans made to GPFI (the "GPFI Loans"). On 11 June 2015 GPFI Loans were refinanced by a loan to Cardale PFI Investments Limited (the "Cardale Loan"). Under the terms of the Cardale Loan, the amounts held on the security account can be distributed to GPFI but not released to the shareholders of GPFI until the Cardale Loan is fully repaid. It is expected that the amounts held on security account will be released to GPFI is early 2016.

15. Cash and cash equivalents

Cash is held at a number of financial institutions to spread credit risk and cash awaiting investment is held on behalf of the Company in interest‑bearing bank accounts (at banks carrying a minimum rating of A‑1, P‑1 or F‑1 from Standard & Poor's, Moody's or Fitch respectively), or in one or more similarly‑rated money market or short‑dated gilt funds. Cash held by institution at year end is shown in the table below:

16. Borrowings

On 23 March 2015 the Company entered into a three‑year £50 million revolving credit facility with RBSI; (the ''Facility''). Interest on amounts drawn under the Facility is charged at LIBOR plus 2.25% per annum. A commitment fee is payable on undrawn amounts. An arrangement fee of £675,000 was levied upon signing. The Facility was fully drawn on 24 March 2015. The total costs incurred to establish the facility (including the arrangement fee) of £754,000 has been offset against the amount drawn down. The loan was subsequently repaid on 24 June 2015, then £5 million was drawn down on 27 July 2015 and a further £36.6 million was drawn down on 28 August 2015.

For the purposes of the AIFMD, leverage is any method which increases the Company's exposure, including the borrowing of cash and the use of derivatives. It is expressed as a ratio between the Company's exposure and its net asset value and is calculated under the Gross and Commitment Methods, in accordance with AIFMD.

The Company is required to state its maximum and actual leverage levels, calculated as prescribed by the AIFMD as at 30 September 2015, figures are as follows:

The leverage figures above represent leverage calculated under the AIFMD methodology as follows:

The Company's leverage limit under the AIFMD is 1.20 which equates to a gearing limit of 20%. The Company has maintained significant headroom against the limit throughout the year.

17. Authorised and issued share capital

The Company's share capital is represented by ordinary shares, in addition to C shares and deferred shares when in issue. Quantitative information about the Company's capital is provided in the statement of changes in equity.

The Company is authorised to issue 800 million ordinary shares, 150 million C shares and 150 million deferred shares, each having a par value of 1 pence per share.

The ordinary shares, and C shares when in issue, carry the rights to assets attributable to their respective share class and do not carry the rights to assets attributable to the Company as a whole.

The ordinary shares and C shares carry the right to dividends out of the profits available for distribution attributable to each share class, if any, as determined by the Directors. Each holder of an ordinary share or C share is entitled to attend meetings of shareholders and, on a poll, to one vote for each share held. No C shares have been issued in the year and as at 30 September there were no C shares in issue. The deferred shares do not carry the right to dividends out of the profits available for distribution or assets attributable to the Company and are in existence for C share conversion purposes only. As at 30 September 2015 there are no deferred shares in issue (30 September 2014: nil).

On 25 November 2014, the Company issued 787,758 new ordinary shares following the offer of scrip dividend alternative for the interim dividend for the period 1 July 2014 to 30 September 2014.

On 25 November 2014, the Company issued 62,639,821 new ordinary shares following the fundraising of £70 million by way of a placing programme.

On 24 February 2015, the Company issued 602,044 new ordinary shares following the offer of scrip dividend alternative for the interim dividend for the period 1 October 2014 to 31 December 2014.

On 26 May 2015, the Company issued 305,536 new ordinary shares following the offer of scrip dividend alternative for the interim dividend for the period 1 January 2015 to 31 March 2015.

On 12 June 2015, the Company issued 61,002,179 new ordinary shares following the fundraising of £70 million by way of a placing programme.

On 26 August 2015, the Company issued 723,585 new ordinary shares following the offer of scrip dividend alternative for the interim dividend for the period 1 April 2014 to 30 June 2014.

As at 30 September 2015, the Company's issued share capital comprised 576,481,586 ordinary shares, none of which were held in treasury.

18. Other reserve