Final Results

JOHN LAING GROUP PLC

AUDITED RESULTS

FOR THE YEAR ENDED 31 DECEMBER 2014

John Laing Group plc (John Laing or the Company or the Group) announces another year of growth in profits and net asset value.

Financial highlights

· Record year for new investments with £217.2 million1 committed to infrastructure projects

· Realisations of £198.5 million from the sale of investments

· Investment portfolio valuation of £772.0 million, up 13% on 2013

· Group profit before tax of £120.4 million, up 7% on 20132,3

· 23% increase in Net Asset Value (NAV), from £528.0 million at 31 December 2013 to £649.8 million3

· Adjusted NAV per share at 31 December 2014 of 210p (30 September 2014 - 204p, 31 December 2013 - 177p)4

· 28% increase in external Assets under Management to £1,020 million5

Operational highlights

· Successful listing on the London Stock Exchange in February 2015, raising net proceeds of £120 million

· Further international growth with two investment commitments in Australia and one in the US

· Expansion of renewable energy activities, including the Group's first investment in a biomass project

· Both phases of the Manchester Waste project, one of our largest investments, operational from January 2015

· Launch of JLEN in March 2014, a listed fund targeting environmental infrastructure investments

· £100 million special contribution in February 2015 to reduce our pension deficit as part of the IPO process

Olivier Brousse, John Laing's Chief Executive, commented:

"I am pleased to announce strong growth in NAV and an increase in like-for-like profits. Now that we have completed our IPO, we can concentrate on continuing to grow our business, in particular our international investments. Our track record and our forward pipeline continue to provide us with confidence for the future."

Notes:

(1) includes £62.7 million commitment to East West Link project, Melbourne (see page 7)

(2) after adjusting 2013 profit before tax to exclude profit on sale of JLIS of £21.2 million

(3) pro forma results prepared on the basis described on page 22 in the Financial Review section

(4) adjusted for net IPO proceeds of £120 million and number of shares in issue of 366.92 million

(5) based on portfolio values of JLIF at 31 December 2014 and JLEN at 30 September 2014

Summary pro forma financial information

Notes:

(1) after adjusting 2013 profit before tax to exclude profit on sale of JLIS of £21.2 million

(2) before special contribution of £100 million in February 2015 as part of the IPO process

(3) adjusted for net IPO proceeds of £120 million and numbers of shares in issue of 366.92 million

(4) includes £62.7 million commitment to East West Link project, Melbourne (see page 7)

(5) gross investment portfolio less £65.6 million shareholding in JLEN (31 December 2013 - £39.7 million shareholding in JLIF)

(6) based on portfolio values of JLIF at 31 December 2014 and JLEN at 30 September 2014

Basis of preparation - the above financial information has been extracted from the pro forma financial statements of the Company which have been prepared on the basis that the restructuring associated with the Company's Admission to listing in February 2015 had occurred on 1 January 2013 and had been in place throughout the years ended 31 December 2013 and 2014. See Financial Review section on page 22 for further details of the basis of preparation.

A conference call for analysts and investors will be held at 10:00 (London time) today. This briefing will be made on an audio-only basis using the dial-in details below. Participants can also view the presentation slides via the link below. At the end of the call, participants will be able to submit their questions via the operator.

Participant telephone number

UK Toll Number: +44 20 3139 4830

UK Toll-Free Number: 080 8237 0030

Participant Pin Code 48834439#

Participant URL to access the on-line presentation for the UK call:

https://arkadin-event.webex.com/arkadin-event/onstage/g.php?d=708492063&t=a

Event Password 655420

The recording of the call along with the presentation will be available at www.laing.com from 14:00 (London time) today.

Further information

www.laing.com

or

Analyst/investor enquiries:

Olivier Brousse, Chief Executive Officer, John Laing +44 20 7901 3200

Patrick O'D Bourke, Group Finance Director, John Laing +44 20 7901 3200

Media enquiries:

Peter Ogden/James Isola, Maitland +44 20 7379 5151

Notes to the results announcement

(1) The Company's ordinary shares were admitted to listing on the FCA's official list and to trading on the London Stock Exchange's main market for listed securities on 17 February 2015 (Admission). Accordingly, the Company was not subject to the Listing Rules or the Disclosure and Transparency Rules for the period under review, and the first set of annual results that will need to comply with those rules will be those for the financial year ending 31 December 2015. Therefore, whilst the information provided in this announcement is intended to be helpful to the Company's shareholders, it does not provide the same level of information that would be required if the Company had been admitted to listing and trading during the period under review.

(2) The accounts for the year ended 31 December 2014, comprising statutory financial information on a Company-only basis and pro forma financial information, have not yet been delivered to the Registrar of Companies. The statutory accounts for the year ended 31 December 2013 have been delivered to the Registrar of Companies. The auditor's reports on the accounts for these years are unqualified and do not contain any matters to which the auditor draws attention by way of emphasis or any statements under section 498 (2) or (3) of the Companies Act 2006. This announcement does not constitute statutory financial statements.

(3) Copies of the 2014 Annual Report and Accounts will be distributed to shareholders on or soon after 9 April 2015.

(4) This announcement may contain forward looking statements. It has been made by the Directors in good faith based on the information available to them up to the time of their approval of this announcement and should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying such forward looking information.

CHAIRMAN'S STATEMENT

I am pleased to report John Laing Group plc's first set of results following our recent listing. Our successful IPO in February marks a new chapter in the Group's development. Founded more than 150 years ago, we were previously listed from the 1950s until early 2007 and are now delighted to welcome our new shareholders as we return to the London stock market.

John Laing Group plc is the listed entity and the holding company for John Laing Limited (formerly John Laing plc) the entity which we previously reported. We therefore have a new board at the John Laing Group plc level. This includes certain members of the previous John Laing plc board, as well as three new independent non-executive directors, each with significant and relevant experience.

The business delivered a strong performance in 2014, notwithstanding the significant time and effort involved in the IPO. Over the year we made further progress in each of our three areas of activity: Primary Investment; Secondary Investment; and Asset Management.

· Our investment commitments in the year grew to £217.2 million

· Our NAV grew to £649.8 million at 31 December 2014; an increase of 23% from 31 December 2013 and ahead of NAV at 30 September 2014

· Our total Assets under Management (AuM) stood at just over £2.0 billion, an increase of 26%, and

· Our profit before tax increased to £120.4 million.

Major projects to which we committed capital included the Intercity Express Programme (Phase 2), a project to provide new rail rolling stock for the UK's East Coast mainline; I-4 Ultimate, a road enhancement project in Florida; and New Perth Stadium, a new sports stadium in Western Australia.

We successfully extended our business model a number of years ago from our original public private partnership (PPP) market in the UK to other geographies and more recently to the renewable energy sector. In each of our principal markets of Asia Pacific, North America and Europe, we see continuing strong demand for new privately-financed infrastructure projects. In particular, recognising the growing opportunity from increasing adoption of the PPP procurement model by individual US states, we opened an office in New York during the year. We continue to monitor other geographies and other sectors adjacent to PPP, where we believe John Laing can leverage its intellectual capital and integrated business model.

In March 2014, following the success of John Laing Infrastructure Fund (JLIF), we launched our second fund, John Laing Environmental Assets Group (JLEN). With the proceeds from its flotation, JLEN acquired a seed portfolio of six renewable energy and waste assets from John Laing and a wastewater treatment asset from a fund managed by Henderson Equity Partners. The Group subscribed for 39.7% of JLEN's shares and realised £97.8 million in proceeds from the sale of the six investments. The launch of a second listed fund bearing the John Laing name was a major step forward for the Group and is consistent with our stated desire to expand our third party asset management activities.

As part of our IPO process, in February 2015 we contributed £100 million to the John Laing Pension Fund (JLPF) satisfied by a 29.9% shareholding in JLEN, a 47% shareholding in the City Greenwich Lewisham (DLR) project and the proceeds from the sale of our Croydon BWH investment.

At the same time, we entered into a new five-year £350 million corporate banking facility. This facility provides us with a stable financing platform for future growth. We are continuing to finance future investments through a combination of cash flow from existing assets, the corporate banking facility and disposals of investments in operational projects. During the second half of 2014, we agreed to sell five investments to JLIF, our first listed fund which was established in 2010.

Our external AuM increased to £1,020 million at 31 December 2014 from £796 million at 31 December 2013, resulting in increased recurring income for our Asset Management division. We expect further growth in external AuM to come from growth in the portfolio values of JLIF and JLEN.

Olivier Brousse joined as Chief Executive in March 2014 and has settled in quickly. As part of the IPO, our Board was restructured; it now comprises a non-executive Chairman, two executive directors, four independent non-executive directors, and two non-executive directors representing the Henderson Funds' position as a major shareholder in the Company. Since our IPO, we have been fully compliant with the Corporate Governance Code (the Code) with regard to Board composition. I am particularly pleased to welcome David Rough, Jeremy Beeton and Anne Wade as new independent non-executive directors to the Group. Each has strong relevant experience and I am confident they will make a positive contribution to the Group.

Our executive team comprises Olivier Brousse as Chief Executive and Patrick O'D Bourke as Group Finance Director, Derek Potts and Chris Waples who continue to manage the Primary Investment and Asset Management divisions respectively, together with Carolyn Cattermole as Group General Counsel and Company Secretary.

I am confident that we have the right blend of skills and experience at both executive and non-executive level to continue to take the Group forward. Once again, I would like to thank all our staff for their continued dedication and commitment; the successful IPO and the performance of the business in 2014 would not have been possible without them.

As set out in the IPO prospectus, the Board expects to pay a base dividend of £20 million for the financial year ending 31 December 2015, pro rata based on the period since listing. Accordingly, we expect to propose our first dividend in August 2015 when we announce our interim results for the six months to 30 June 2015.

The financial year, 2014, has again demonstrated the strength and flexibility of our business model. The Company is in a good position to maintain investment discipline and continue to invest selectively and profitably in the years to come.

Phil Nolan

Chairman

STRATEGIC REPORT

CHIEF EXECUTIVE'S REVIEW

This is my first review as Chief Executive and I am pleased to report a profitable performance by the Group. The highlights included:

· Record year for new investments with £217.2 million committed to new infrastructure projects

· Realisations of £198.5 million from the sale of investments

· Investment portfolio valuation of £772.0 million, up 13% on 2013

· Group pro forma profit before tax of £120.4 million, up 7% on 2013 (excluding profit on sale of JLIS in 2013 of £21.2 million)

· 23% increase in NAV, from £528.0 million to £649.8 million

· Adjusted NAV per share at 31 December 2014 of 210p

· 28% increase in external Assets under Management (AuM) to £1,020 million

· Further international growth with two investment commitments in Australia and one in the US

· Expansion of renewable energy activities with the Group's first investment in a biomass project

· Both phases of the Manchester Waste project, one of our largest investments, now operational from January 2015

· Successful launch of our second listed fund, JLEN, which targets environmental infrastructure investments

· £100 million special contribution in February 2015 to reduce our pension deficit as part of the IPO process.

As well as delivering a strong performance, much of our focus during the year has been on preparing for the IPO of the Group. The culmination of this was that, in February 2015, John Laing successfully returned to being listed on the London Stock Exchange. Our listing marks a significant step for the Group and we look forward to meeting the demands of our new shareholder base.

As part of the listing process, the Company issued new shares raising approximately £120 million (net of one-off listing costs). These new funds will allow us to take advantage of the future opportunities in our pipeline, while maintaining our funding model of recycling proceeds of realisations into primary investments.

Objectives and outcomes

Our strategy is to create value for shareholders through originating, investing in and managing infrastructure assets internationally. To achieve this, we have set ourselves the following core strategic objectives:

· growth in primary investment volumes (new capital committed to greenfield PPP and renewable energy infrastructure) over the medium term;

· growth in the value of the Group's investment portfolio; and

· growth in the value of external AuM and related fee income;

while keeping to the discipline and analysis required to mitigate against the potential delivery, revenue and operational risks associated with major infrastructure projects. The projects we invest in are held within special purpose vehicles (SPVs) and structured so that providers of third party debt finance have no contractual recourse to John Laing beyond our equity commitment to those projects.

Growth in primary investment volumes over the medium term

As outlined at the time of our IPO, our strategy for growing the volume of capital committed to PPP infrastructure projects is based on the concentration of our resources on countries or geographic regions carefully selected against four key criteria:

· a political commitment to the development of infrastructure through the PPP procurement model;

· a stable political and legal framework;

· the ability to form relationships with strong supply chain partners; and

· the likelihood of target financial returns, on a risk-adjusted basis, being realised.

In the renewable energy sector, we focus on entering new markets which support our objective of establishing a balanced portfolio of assets with diversified exposure to different power markets, geographic locations (with respect to wind and solar resource levels) and governmental support mechanisms.

This core strategy has helped us to achieve new investment commitments of £217.2 million during 2014. This represents a substantial increase on 2013's investment commitments of £112.4 million, and included the following projects:

· Intercity Express Programme (Phase 2) (UK) - £72.7 million

· New Perth Stadium (Western Australia) - £28.6 million

· I-4 Ultimate road project (Florida, US) - £18.3 million

· Speyside Biomass plant (UK) - £13.3 million

· East West Link road and tunnel project (Melbourne, Australia) - £62.7 million

Following financial close of the East West Link project in October 2014, a change of government took place in the State of Victoria. The incoming Labor government gave notice in December 2014 to the East West Connect consortium, in which the Group has a shareholding, that it was suspending the project. While the outcome of current discussions with the State of Victoria is difficult to anticipate, John Laing is acting on the basis that the consortium is entitled to compensation in accordance with the project agreement if the State of Victoria exercises its right to terminate for convenience. The process that the government will follow during the suspension is not currently known and it may be some months before a conclusion is reached. At that stage, we expect to recover our investment commitment to this project, which is made up of cash collateral and a letter of credit. We are not ascribing any value to this project in our portfolio valuation at 31 December 2014.

Growth in portfolio valuation

In line with our business model, we aim to secure new investments at attractive risk-adjusted base case returns and to enhance these returns through active asset management.

We employ sophisticated financial analysis and investment appraisal techniques in assessing each new investment opportunity. The Group considers the specific risk profiles for each prospective investment with the aim of optimising risk adjusted returns and securing new investments that are likely to best meet the investment appetites of secondary market investors.

As at 31 December 2014, our portfolio of infrastructure investments comprised 40 projects, excluding our shareholding in JLEN (31 December 2013 - 45 projects). Our year-end portfolio value, including the shareholding in JLEN, was £772.0 million (30 September 2014 - £780.5 million, 31 December 2013 - £684.4 million). The reduction from 30 September 2014 was primarily due to investment realisations in the fourth quarter of 2014 offset by growth in the retained portfolio.

The portfolio valuation represents the Directors' assessment of the fair value of investments in projects on the basis that each asset is held to maturity, other than shares in JLEN which are held at market value. The 2014 year end valuation reflected growth of 26% after adjusting for acquisitions, realisations, cash invested and cash yield. This growth is explained further in the Portfolio Valuation section.

The cash yield in 2014 was £24.3 million (2013 - £29.3 million), a yield of 6.6% (2013 - 7.9%) on the average Secondary Investment portfolio. This represents cash receipts in the form of dividends, interest and shareholder loan repayments from project companies and listed investments with the lower yield in 2014 attributable to the effect of investments sold in 2013 and 2014.

Growth in external AuM and related fee income

Our strategy to grow the value of our external AuM is linked to our asset management activities as an investment adviser to JLIF and JLEN. Both JLIF and JLEN have a right of first offer over certain portfolio investments when they are offered for sale by the Group. The Group not only advises and provides management services to the portfolios of JLIF and JLEN, but also sources new investments for both funds.

We made good progress during the year, with the value of external AuM growing from £796 million to £1,020 million, an increase of 28%. Much of this growth was attributable to the launch of JLEN in March 2014. Fee income from external AuM was £10.3 million for 2014, up from £8.2 million in 2013.

Business model

Our business, which integrates origination, investment and asset management capabilities, is organised across three key areas of activity:

· Primary Investment: our activities involve sourcing and originating, bidding for and winning greenfield infrastructure projects, typically as part of a consortium in the case of PPP projects. Our Primary Investment portfolio comprises interests in PPP and renewable energy projects which recently reached financial close, and/or are in the construction phase.

· Secondary Investment: our activities involve ownership of a substantial portfolio of operational PPP and renewable energy projects, almost all of which were previously part of our Primary Investment portfolio.

· Asset Management: we actively manage our own Primary and Secondary Investment portfolios and provide investment advice and asset management services to JLIF and JLEN through our FCA-regulated subsidiary, JLCM, as well as in respect of a small number of PPP assets held by JLPF.

Our business model is based on our investment origination and asset management capabilities and the current strong demand in secondary markets for operational PPP and renewable energy assets.

We initially create value by originating and investing in new greenfield infrastructure investments which, post-construction, aim to produce long-term predictable cash flows that meet our rate of return targets. Once operational, these investments can be held in our Secondary Investment portfolio or sold to secondary market investors targeting a lower rate of return, crystallising an uplift in value for the Group and releasing capital to recycle into primary investment opportunities.

Our asset management activities create additional value through the enhancement of project cash flows, and the management and reduction of project risks (especially, construction risk). We focus on ensuring that subcontractors meet their contractual obligations, in particular with regard to the financial consequences of the risks allocated to them. In addition, we aim to create additional value by identifying and implementing value enhancement initiatives that can increase future cash flows to investors compared to those forecast at project financial close. Opportunities for such value enhancements may arise at any time during a project's life and may vary significantly from investment to investment.

Staff

Our staff numbers grew in 2014 from 215 at the end of 2013 to 242 at 31 December 2014. This increase principally reflects staffing to support Management Services Agreements (MSAs) on new investments in both Australia and the US, as well as a larger Asia Pacific Primary Investment team and the re-establishment of an office in New York. Our business is increasingly international, with the percentage of staff located outside the UK now at 18%.

Since I joined John Laing, I have been impressed by the quality and positive attitude of our staff, both in the UK and in our overseas offices, each of which I visited in my first few months. This bodes well for the future of our business, which ultimately depends on its people. I would like to thank all our staff for their contribution both to the Company's successful IPO and to our 2014 results.

Current trading and outlook

Our balance sheet is underpinned by our investment portfolio, which is making good progress. Our investments in the two Manchester Waste projects have moved from the Primary to the Secondary Investment portfolio in the first quarter of 2015. In addition, a number of other large projects are in the last year or two of construction which is positive for future growth.

Our PPP pipeline at 31 December 2014 of £1,067 million looks out over the next three years and includes opportunities of c£400m for each of 2015 and 2016. We will continue to be selective and invest only in those projects that have the right characteristics, and will also look to maintain an appropriate balance between PPP and renewable energy investments.

We are working to achieve a 2015 budget target of £150 - £200 million for new investment commitments, ahead of our average of c£135 million per annum over the last four years. We have made a good start with the financial close in February of the Sydney Light Rail project, to which we have committed £41 million.

For the balance of our target for 2015, we are currently pursuing a number of specific PPP opportunities in the US, Australia and Continental Europe, most of which are scheduled to reach financial close in the second half of 2015; we will provide an update on their status at the interim stage. In renewable energy, we expect to convert some of our exclusive opportunities over the next few months. We are also well placed to take advantage of some possible late entry opportunities we are seeing in both PPP and renewable energy.

As well as maintaining the constant search for value enhancement opportunities in our portfolio, we are working on realisations of investments, with a budget target of c£100 million in 2015, and are encouraged by current positive signs in the pricing of secondary transactions. Our track record and our forward pipeline provide us with confidence for the future.

Olivier Brousse

Chief Executive

PRIMARY INVESTMENT

Our Primary Investment activities are focused on infrastructure projects awarded under PPP programmes and on renewable energy generation assets.

Highlights

During 2014, the Primary Investment team successfully secured and closed seven new investments, consisting of total commitments of £208.3 million, together with additional commitments of £8.9 million in relation to existing investments.

· The Asia Pacific region delivered excellent results - two new PPP investments were won and closed during the year (the New Perth Stadium in Western Australia and the East West Link road project in Melbourne), and a third investment reached financial close in February 2015 - the Sydney Light Rail project in New South Wales.

· North America - we re-established an office in New York and strengthened our team as we prepare to engage more strongly in this large and growing PPP market. During the year, our consortium won and closed the I-4 Ultimate road enhancement project in Florida.

· In the UK, we reached financial close on IEP (Phase 2), a rail rolling stock project with total financing in excess of £2.0 billion.

· In the renewable energy sector, we further developed our presence, closing two wind farm investments, and investigating new opportunities in other EU markets with strong pipelines under-pinned by feed-in-tariff governmental support mechanisms.

· We also secured and closed the Group's first investment in a stand-alone biomass project. Once operational, the plant will supply an adjacent whisky distillery at Speyside in Scotland and export surplus power to the grid.

The Primary Investment portfolio comprises the Group's shareholdings in 17 PPP projects, as well as in four renewable energy projects, which have recently reached financial close and/or are in the construction phase. The Group's Primary Investment portfolio was valued at £414.3 million at 31 December 2014 (31 December 2013 - £300.7 million).

Asset management services in respect of the Primary Investment portfolio are provided by John Laing's Asset Management division. When underlying projects reach the end of construction, the investments transfer into our Secondary Investment portfolio.

Activities

The Primary Investment team is responsible for all the Group's bid development activities both in the UK and internationally. The team takes responsibility for developing and managing a pipeline of opportunities, including market research, project selection, bid co-ordination and finalisation of negotiations with public sector authorities or with vendors and the supply chain through to financial close. Activities are focused on Europe, North America and Asia Pacific. John Laing works with strong delivery partners in each market. For instance, in the Asia Pacific region, the Group is currently working with leading contractors and service providers including Acciona, Bombardier, Bouygues, Laing O'Rourke, Leighton, Lend Lease, Serco and Spotless. This approach is replicated in each region.

We target a wide range of infrastructure sectors:

· Social infrastructure - healthcare, education, public sector accommodation and social housing;

· Transport - roads, street lighting, highways maintenance and rail, including rolling stock; and

· Environmental - waste management and renewable energy, including biomass.

In the PPP sector, we strengthened our international reach during the year, and deepened our engagement in the most active markets. This was particularly the case in Australia, where three new investment opportunities were secured, two of which reached financial close. In North America, we re-established an office in New York and our consortium won the I-4 Ultimate road project in Florida. In the UK, we closed the second phase of the IEP rail rolling stock project during the year, although social infrastructure programmes remained at low levels. In Continental Europe, John Laing's bidding activities steadily increased, although public expenditure constraints in certain markets moderated the pace of deal flow.

In the renewable energy sector, we financially closed two further wind farm investments during the year, as well as the Group's first investment in a biomass project in the UK. Renewable energy offers a valuable complement to governmental PPP procurement. We target investments where a substantial proportion of revenue is covered by governmental support mechanisms. During the year, we investigated new opportunities in other EU markets with strong pipelines supported by feed-in-tariffs, and these will be a key focus during 2015. At the end of the year, projects under our ownership had a combined peak power capacity of 128 MW, comprising onshore wind farms of 113 MW and solar farms of 15 MW. In the second half of 2014, European power price expectations for the short to medium term decreased and, where applicable, the impact of these on our investments has been reflected in our portfolio valuation as at 31 December 2014.

Project finance

Project finance markets continued to improve during 2014, with more banks participating in long term facilities. Pricing also improved, and we were able to secure financing for projects where required. In the UK, this was further supported by the new UK Government Treasury Guarantee Scheme, under which project finance was secured for our Speyside biomass investment. New institutional sources of long-term project finance continued to be available in Europe. In Australia and New Zealand, medium-term bank debt and refinancing requirements are well established. In Canada and the US, projects tend to be financed in the debt capital markets rather than with bank financing. Overall, financial markets in the regions in which the Group is active have continued to support our growing levels of investment.

Pipeline 

PPP

Our PPP investment pipeline comprises opportunities to invest equity in projects with the potential to reach financial close over the next three years while the renewable energy pipeline (explained further below) relates to the next two years. Both PPP and renewable energy pipelines are constantly evolving as new opportunities are added and other opportunities drop out. We budget a win rate of 30% and our 2015 budget target for new investment commitments is £150 - £200 million, ahead of our average of c£135 million per annum over the last four years.

At 31 December 2014, our overall PPP pipeline of £1,067 million was at similar levels to the pipeline of £1,089 million at 30 September 2014 as set out in the IPO prospectus. Since the year end, the Sydney Light Rail project, which was at the preferred bidder stage at 31 December 2014, has reached financial close.

PPP - Overseas

The Group's main growth potential in both the medium and long-term continues to be in international markets. In some economies, levels of public sector investment are moderated due to government spending constraints, but for John Laing, this is mitigated by the international spread of markets in which we operate.

Asia Pacific offers substantial opportunities and the Group's current bidding activities are focused on Australia and New Zealand, which continue to offer a strong pipeline and where the Group has a strong base.

In North America, our focus has shifted from Canada more to the US, where the Group is engaged in what is increasingly becoming a very substantial PPP market.

In Continental Europe, activity remains at a consistent level in selected countries such as the Netherlands and Belgium.

In addition to the above, the Group continues to monitor potential new markets, whilst maintaining tight control over costs. Markets which offer potential in the medium to long term include South America, for instance Chile, and other markets in Europe, such as Slovakia and Turkey.

PPP - United Kingdom

The UK market for PPP in 2015 includes potential opportunities in the rail sector (specifically rail rolling stock), and a pipeline for transportation and social infrastructure projects in Scotland. However, other PPP procurement in the UK, particularly new social infrastructure, remains at modest levels.

Renewable Energy

The renewable energy pipeline includes a number of wind and solar projects in the UK and other European countries as well as potential investment opportunities in biomass plant. Our renewable energy pipeline was £264 million at 31 December 2014, consistent with £275 million at 30 September 2014, split 46% UK and Ireland and 54% rest of Europe.

Derek Potts

Managing Director, Primary Investment

SECONDARY INVESTMENT

At 31 December 2014, the Secondary Investment portfolio comprised 14 PPP projects and five Renewable Energy projects with a book value of £292.1 million (31 December 2013 - £344.0 million). The Secondary Investment portfolio also included a 39.7% shareholding in JLEN: this was valued at £65.6 million at 31 December 2014 (31 December 2013 - JLIF shareholding valued at £39.7 million). In February 2015, most of the shareholding (29.9%) in JLEN was transferred to JLPF as part of the IPO process, leaving the Group owning 9.8% of JLEN.

Asset management services in respect of the Secondary Investment portfolio are provided by John Laing's Asset Management division.

The majority of our secondary investments were originated as Primary Investments of John Laing. However, during 2014, a further 12% stake in the City Greenwich Lewisham (DLR) project was acquired, taking our shareholding to 52%. In February 2015, a 47% stake in this project was transferred to JLPF as part of the IPO process.

Investment realisations

During the year, we realised total proceeds of £198.5 million from disposals of investments:

· As part of JLEN's launch in March 2014, John Laing sold its investments in six waste and renewable energy projects to the fund: East London Waste, Dumfries and Galloway Waste, Amber Solar Parks, Bilsthorpe Wind Farm, Hall Farm Wind Farm and WALLP Wind Farms for proceeds of £97.8 million.

· Also in March 2014, we sold our remaining shareholding in JLIF for net proceeds of £38.9 million.

· During the second half of the year, we sold our investments in four projects - Kirklees Social Housing, Groningen Tax Office, Surrey Street Lighting (sold shortly before the end of construction) and Metropolitan Police SEL - to JLIF for total proceeds of £37.1 million. Money multiples on these disposals were above our historic average of 2.0 times.

· We realised our interest in the Croydon BWH project for £20.1 million after Croydon Council exercised its option to acquire the property.

· We sold down at a premium our shareholding in the New Perth Stadium project, a Primary Investment, from 100% to 50%.

· Our investment in the Kinnegar waste water project was also sold.

Our budget target for realisations in 2015 is c£100 million.

Transfers from the Primary Investment portfolio

During 2014, five investments became part of the Secondary Investment portfolio, transferring at their fair value:

· Kirklees Social Housing, UK - this project, which comprised the construction of new homes on 27 sites to provide affordable homes in Kirklees, was completed on schedule.

· Four wind farms became operational:

- Svartvallsberget, Sweden - 20.0 MW commissioned in June 2014, John Laing's first wind farm outside the UK

- Carscreugh, Dumfries and Galloway, UK - 15.3 MW commissioned in May 2014

- Wear Point, Milford Haven, UK - 8.2 MW commissioned in June 2014

- Burton Wold, Kettering, UK - 14.4 MW commissioned in July 2014.

ASSET MANAGEMENT

The Asset Management division's activities comprise Investment Management Services and Project Management Services.

Investment Management Services

Investment Management Services (IMS) are provided to both JLIF and JLEN and also to our internal investment portfolio.

External IMS

John Laing Capital Management (JLCM) provides advisory services to JLIF and JLEN under investment advisory agreements. As at 31 December 2014, JLIF had a portfolio value of £865 million and JLEN had a portfolio value of £155 million at 30 September 2014. JLCM has two separate dedicated fund management teams whose senior staff are authorised and regulated by the FCA. The teams focus their advice primarily on sourcing new investments for and capital raisings by the two funds. They operate behind information barriers in view of the market sensitive nature of their activities and to ensure the separation of "buyside" and "sellside" teams when John Laing is selling investments to either fund. Both funds are separate entities from the Group, each maintaining a fully independent board of directors.

At 31 December 2014, the Group also managed two PPP investments valued at £7.0 million held by JLPF. Since February 2015, the Group is also managing the 47% shareholding in the City Greenwich Lewisham (DLR) project transferred to JLPF as part of the IPO process.

JLIF was launched in November 2010 and had a market capitalisation at 31 December 2014 of £997 million. It focuses predominantly on operational, availability-based PPP projects. JLEN was launched in March 2014 and had a market capitalisation at 31 December 2014 of £165 million. It focuses on environmental infrastructure projects. The investment strategies of the two funds are differentiated from each other and from that of John Laing.

Fee income from external IMS grew from £8.2 million in 2013 to £10.3 million in 2014.

Internal IMS

John Laing actively manages its own Primary and Secondary Investment portfolios. Our strategies are designed to deliver the base case investment returns as a minimum and enhance those returns through active asset management. There are two main strategies, value protection and value enhancement:

Value protection - examples

· To target PPP projects which have revenue streams based on availability of the underlying infrastructure asset rather than revenues based on patronage or volume.

· To ensure construction risks associated with design, workmanship, cost overruns and delays lie with our construction supply chain partners who are best able to manage them.

· To ensure operational performance and cost risks lie principally with our service supply chain partners.

· To eliminate the risk of increased interest costs over the life of an infrastructure project by swapping from variable interest rates to fixed interest rates on third party debt finance.

· To structure projects so that there is a positive correlation between investment returns and inflation rates.

· To reduce the impact of short-term volatility on revenues in our renewable energy projects by entering into short or medium term power purchase agreements with electricity suppliers.

Value enhancement - examples

· To optimise SPV management costs and project insurance premiums through bulk purchasing or efficiency gains, thereby increasing investor returns.

· To optimise major maintenance and asset renewal costs over the life of an infrastructure project and thereby increase investor returns.

· To maximise working capital efficiency within SPVs.

· To respond to clients' needs for changes over the life of PPP infrastructure projects and, where possible, generate incremental revenues therefrom.

· To ensure projects are efficiently financed over their concessions or useful lives.

Project Management Services

The Group also provides project management services (PMS), largely of an administrative or financial nature to project companies in which John Laing, JLIF or JLEN are investors. These services are provided under Management Services Agreements (MSAs). As at 31 December 2014, there were 71 MSAs comprising 33 MSAs with projects in which John Laing invests, 31 MSAs with projects in which JLIF invests, 6 MSAs with projects in which JLEN invests and one MSA with a project invested in by another party. PMS revenue also includes non-contractual income earned from project companies and occasional development management fees from property-related investments.

Revenues from PMS in 2014 were £14.6 million (2013 - £15.5 million), delivered by some 134 staff across North America, the UK, Continental Europe and Australia. Revenues were lower than in 2014 because of lower development management fees.

The aim is to provide profitable MSA services following divestment of investments in projects; our experience is that stakeholders benefit from the continuity of staff, retained project knowledge and active asset management.

Investments in projects under construction

An update on significant projects under construction is set out below:

Intercity Express Programme (IEP)- John Laing is in partnership with Hitachi to manage the contracts that cover the finance, design, manufacture, delivery into daily service and maintenance over 26 years of a fleet of 122 Super Express trains for the UK's Great Western Main Line (Phase 1 - 24% interest) and the East Coast Main Line (Phase 2 - 30% interest). With a total capital expenditure value across the two phases of £3.4bn, it is one of the largest PPP projects to be awarded.

The first train arrived in the UK on 12 March 2015 for reliability testing on the UK rail network. The initial trains are being manufactured in Japan, prior to transfer of manufacturing to the UK. Construction of train maintenance depots is well advanced and ahead of programme.

Manchester Waste, UK - after certain construction delays and a prolonged commissioning phase, significant progress was made in 2014 on both projects - Manchester Waste VLCo (50% interest) and Manchester Waste TPSCo (37.43% interest). At the former, all 42 sites are now operational, following the successful take-over of the last Mechanical Biological Treatment (MBT) plant in November 2014. Solid Recovered Fuel (SRF) produced at the VLCo MBT plants is now being transported by rail to the TPSCo thermal power station at Runcorn in Cheshire which produces both heat and power. In January 2015, TPSCo also moved into the operational phase having successfully passed its commissioning phase with the final completion certificate issued. The additional cost and associated time delays to complete both VLCo and TPSCo have been funded by liquidated damages from the principal contractors which limited the impact on the value of our investment.

New Royal Adelaide Hospital (NRAH), Australia - at A$1.85 billion, this project is currently one of the largest construction projects in Australia. Containing 700 single bedrooms and 100 same-day beds, NRAH will have the capacity to admit over 80,000 patients per year. Construction is due to be complete in 2016. Time lost due to ground contamination has not been fully recovered by the building contractor to date. Financing costs which may ultimately result from delays are being funded by contractors' liquidated damages. Any delays in receipt of yields from our investment are currently offset by additional interest income on cash balances.

Denver Eagle P3, US - this project is to design, build, finance, maintain and operate two new commuter rail lines and a portion of a third in the Denver metropolitan area. Four train cars per month are scheduled to be delivered over the coming months, with the first four having arrived in December 2014. The operations and maintenance contractor is gearing up its workforce ahead of the training, testing and commissioning phases. The building contractor has identified some structuring issues and has proposed solutions which the project company is considering. Final completion is expected in mid 2017.

Dungavel wind farm, UK - while this 26MW project has encountered some delays in site preparation, we expect it to become fully operational by January 2016.

Auckland South Corrections Facility, New Zealand - the works completion certificate for this 960-place corrections facility was issued in January 2015 and the expected service commencement date is May 2015.

Street lighting projects, UK - the Surrey Street Lighting project, involving the replacement of 88,000 orange street lights, was sold to JLIF in December 2014 shortly before the end of its construction. The Croydon and Lewisham Street Lighting project is behind schedule due to technical constraints arising from electrical connection to particular cable types and the programming of electrical shutdowns to streets.

A15 Road, Netherlands - construction is more than 90% complete and the vast majority of the road is operational. The project involved the construction of the Botlek bridge (a lifting bridge designed for vehicles and trains). Although the bridge infrastructure has been installed, there are a number of variations requested by the public sector authority that will defer completion until mid 2016.

On each project that John Laing invests in, the Asset Management division monitors closely the construction stage and provides active input where necessary to help ensure deadlines are met. Despite this, since the projects that we invest in are principally large, sophisticated infrastructure projects, delays can occur. As described above, some delays are occurring on a number of investments in the Primary Investment portfolio for a variety of reasons. When delays are caused by contractors, liquidated damages are typically payable and provide significant protection to our equity. For certain events, the project company may be able to claim compensation from the relevant public sector authority. In all instances, when we prepare our portfolio valuation, we factor any construction delays into the assumptions we make.

Chris Waples

Managing Director, Asset Management

PORTFOLIO VALUATION

The portfolio valuation increased to £772.0million at 31 December 2014 from £684.4 million at 31 December 2013. This represented a movement in fair value of £158.6 million (25.9%) after adjusting for cash invested, cash yield and realisations.

Of the 25.9% increase in fair value, approximately 8.6% represented the increase that would be expected as a result of the unwinding of discount rates, i.e. future cash flows drawing one year closer, with the remainder reflecting the positive effect of new investments being closed, reductions in construction risk premia, underlying project performance and other value enhancements, offset by adverse exchange rate movements. Growth in the value of the Group's listed investments was £3.2 million after adjusting for cash yield, purchases and disposals.

The Primary Investment portfolio includes investments in PPP and renewable energy assets in the construction phase. Secondary investments comprise investments in operational PPP and renewable energy assets. The listed investment in JLEN (2013 - in JLIF) is included within the Secondary Investment portfolio.

The split between primary and secondary investments is shown in the table below:

The increase in the Primary Investment portfolio is principally due to a movement in fair value of £120.1 million, including value enhancements and financial closes achieved during the year, and cash invested of £81.1 million, offset by investment realisations of £14.3 million, transfers to the Secondary Investment portfolio of £72.7 million and cash yield of £0.6 million.

The reduction in the Secondary Investment portfolio is principally due to investment realisations during the year of £184.2 million and cash yield of £23.7 million, offset by cash invested and acquisitions of £70.7 million, primarily the acquisition of JLEN shares of £63.5 million, a movement in fair value of £38.5 million and transfers from the Primary Investment portfolio of £72.7 million.

Methodology

A full valuation of the Group portfolio is prepared on a consistent basis every six months, at 30 June and 31 December, with a review at 31 March and 30 September, principally using a discounted cash flow methodology. The valuation is carried out on a fair value basis assuming that forecast cash flows from investments are received until maturity of the underlying assets.

Under the Group's valuation methodology, a base case discount rate for an operational project is derived from secondary market information and other available data points. The base case discount rate is then adjusted to reflect additional project-specific risks. In addition, risk premia are added to reflect the additional risk during the construction phase. These premia reduce over time as the project progresses through its construction programme, reflecting the significant reduction in risk once the project reaches the operating stage.

The cash flows at 31 December 2014 on which the discounted cash flow valuation was based were those forecast to be distributable to the Group as at that date, derived from detailed financial models for each underlying project. These incorporate the Group's expectations of likely future cash flows including value enhancements.

For the 31 December 2014 valuation, the overall weighted average discount rate was 9.8% (31 December 2013 - 9.7%) in line with the weighted average discount rate at 30 September 2014. The rate at 31 December 2014 was made up of 10.0% for the Primary Investment portfolio and 9.2% for the Secondary Investment portfolio. The shareholding in JLEN (31 December 2013 - JLIF) was valued at its closing market price on 31 December 2014 of 103.25p per share (31 December 2013 - 115.2 p per JLIF share).

The discount rate ranges used in the portfolio valuation at 31 December 2014 were as set out below:

The Directors have obtained an independent opinion from a third party, which has considerable expertise in valuing the type of investments held by the Group, that the portfolio valuation represented a fair market value in the market conditions prevailing at 31 December 2014.

Changes in valuation

The increase in the portfolio valuation was attributable to new investment commitments, discount rate unwinding and construction risk premia reduction, and value enhancements, offset by the net effect of realisations and distributions during the period.

Cash investments in respect of five new investment commitments entered into during 2014, comprising three PPP investments and two renewable energy investments, totalled £25.9 million. A further two new investment commitments were entered into without cash investment in the year. In addition, equity and loan note subscriptions of £56.4 million were injected into existing projects in the portfolio as they progressed through, or completed, construction. Also during the year, JLEN shares costing £63.5 million were purchased when the fund was launched and an additional shareholding in the City Greenwich Lewisham (DLR) project was acquired from a co-shareholder for £6.0 million.

During 2014, the Group completed the full or partial realisation of 13 investments, plus its remaining JLIF shareholding, for total proceeds of £198.5 million. Cash yield during 2014 totalled £24.3 million.

The overall movement in fair value was £158.6 million which comprised improvements to forecast future cash flows largely driven by new investments closed (£38.4 million) and value enhancements, as well as discount rate unwinding (£53.0 million) and the reduction of construction risk premia (£16.3 million). This growth represented the net position when taking into account adverse foreign exchange movements (£7.8 million) and the benefit from a wide range of project-specific value enhancements built into forecast cash flows.

Impact of economic indicators

During the year, lower than previously forecast inflation had a minor negative impact on the majority of forecast project cash flows within the portfolio. Deposit rates received on cash balances during 2014 were low but this was anticipated in forecasts made in prior valuations for the majority of projects. Deposit rates are anticipated to remain at low levels in the short-term.

Certain investments are denominated in foreign currencies (including Australian, New Zealand and US Dollars, and Euro). Foreign exchange movements relative to Sterling had a net negative impact on the portfolio valuation, principally because of weakness in the Euro, and are included in the net movement in fair value.

Discount rate sensitivity

The weighted average discount rate used at 31 December 2014 was 9.8% (31 December 2013 - 9.7%). The table below shows the sensitivity of each 1% change in this rate of up to plus or minus 3.0%.

Analysis of the portfolio valuation on a number of different bases is shown in the following tables. These analyses are as at 31 December 2014 prior to the transfer to JLPF of the 29.9% shareholding in JLEN and the 47% shareholding in the City Greenwich Lewisham (DLR) project as part of the IPO process in February 2015.

Value by time remaining on project concession/life

PPP projects are based on long-term concessions and renewable energy assets have long-term useful economic lives. As demonstrated in the table above, at 31 December 2014, 21% of the portfolio by value had a greater than 30-year unexpired concession term or useful economic life remaining at 31 December 2014, 48% had 20 to 30 years remaining and a further 17% had 10 to 20 years remaining. The investment in JLEN (31 December 2013 - JLIF), which represented 8.5% (31 December 2013 - 5.8%) of the portfolio value, is shown separately.

Value split between PPP and renewable energy  

Primary PPP investments made up the largest sector within the portfolio, representing 48% of the portfolio valuation at 31 December 2014.

Value by revenue type

Availability-based investments continued to make up the majority of the portfolio valuation, representing 69% of the portfolio at 31 December 2014. Renewable energy investments comprise the majority of the volume-based investments (21%). The investment in JLEN (31 December 2013 - JLIF), which holds investments in PPP and renewable energy projects, is shown separately.

Value by sector

Investments in the transport sector (excluding rail rolling stock) continued to make up the largest proportion of the portfolio valuation, representing 33% of the portfolio at 31 December 2014, with rail rolling stock investments accounting for a further 15%. Renewable energy investments made up 16% of the portfolio by value, social infrastructure investments - 14%, and environmental investments - 13%. The portfolio underlying the JLEN shareholding consists of a mix of renewable energy and environmental projects.

Value by currency

The percentage of investments denominated in foreign currencies increased from 28% to 34%. The growth in international investments is consistent with our pipeline and our strategy.

Value by geographical region

Investments in the UK continued to make up the majority of the portfolio valuation, representing 58% of the portfolio at 31 December 2014. Continental Europe remained the next largest category with 19%. Investments in projects located in the Asia Pacific region made up 9% and investments in North America 6%. The JLEN portfolio consists of investments in UK based projects.

Value by investment size

The top five investments in the portfolio made up 42% of the portfolio at 31 December 2014. The next five largest investments made up a further 20%, with the remaining investments in the portfolio comprising 29%. The shareholding in JLEN made up 8.5% of the portfolio.

FINANCIAL REVIEW

Basis of preparation

Pro forma financial statements of the Company have been prepared on the basis that the restructuring associated with the Company's Admission in February 2015 had occurred on 1 January 2013 and had been in place throughout the years ended 31 December 2013 and 2014, as described in more detail below.

Statutory financial information

At 31 December 2014, the Company owned 22.46% of Henderson Infrastructure Holdco Limited (HIH) (now John Laing Holdco Limited). The remaining 77.54% was owned by Henderson Infrastructure Holdco (Jersey) Limited (HIHJ). HIH is the holding company of John Laing Limited (formerly John Laing plc).

On 17 February 2015, the Company's ordinary shares were admitted to listing on the main market of the London Stock Exchange. Between 31 December 2014 and 17 February 2015, the following restructuring occurred and became effective on or prior to 17 February 2015:

· The Company acquired 77.54% of the issued share capital of HIH from HIHJ for consideration of £1. This increased the Company's shareholding in HIH to 100%.

· HIHJ waived £357.3 million of its shareholder loans of £987.3 million due from HIH.

· HIHJ assigned the balance of the loans of £630.0 million to the Company in return for a consideration of 299,999,980 ordinary shares of £0.10 issued by the Company at a premium of £2.00 each.

· The Company undertook a reduction of its share premium account by £500 million from the existing share premium account of £600 million to £100 million.

· The loans to HIH were discharged in full by the issue to the Company of 630,000,000 ordinary shares of £0.000001 each in the share capital of HIH, fully paid and at a premium of £0.999999 each.

Following the above transactions, the ordinary share capital of the Company comprised 300 million ordinary shares of £0.10 each held by HIHJ prior to Admission. On 17 February 2015, the Company issued a further 66.92 million ordinary shares in connection with its IPO.

On Admission, the Company entered into a £350 million corporate banking facility which replaced the corporate banking facility that existed prior to Admission held by John Laing Limited, now a wholly owned subsidiary of the Company.

During 2014, the Company transitioned to International Financial Reporting Standards (IFRS) and adopted Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) (the Amendments) as it met the definition of an investment entity. As a result of adopting the Amendments, the Company recognises its investment in HIH at fair value through profit or loss (FVTPL) rather than at book value.

Statutory financial information on a Company-only basis for the year ended 31 December 2014 is shown on pages 85 to 96 and reflects the 22.46% investment in HIH at a fair value of £nil. The investment was valued at £nil because HIH had net liabilities at 31 December 2014 arising from the shareholder loans from HIHJ.

Pro forma financial information

As at 31 December 2014, the Company did not form a group as it only held 22.46% of HIH and the restructuring described above had not become effective. Consequently, the Company is unable to produce group accounts nor show financial information in respect of the newly formed group within its statutory results for the year ended 31 December 2014.

In the opinion of the Directors, not to present this information would not give a true and fair view of the state of the Company's affairs. Consequently pro forma financial statements have been prepared in compliance with IFRS on the basis that both the restructuring described above and the corporate banking facility now held by John Laing Group plc had been in place throughout the years ended 31 December 2014 and 31 December 2013.

As the Company meets the definition of an investment entity set out within IFRS 10, the pro forma financial information has been prepared accordingly. Investment entities are required to account for all investments in controlled entities, as well as investments in associates and joint ventures, at fair value through profit and loss, except for those subsidiaries that provide investment related services or engage in permitted investment related activities with investees (Service Companies). Service Companies are consolidated rather than recorded at fair value through profit and loss. On 17 February 2015, the legal ownership of certain Service Companies in the HIH group was transferred to the Company and these transfers are also reflected in the pro forma financial information as if they had occurred on 1 January 2013 and had been in place throughout the years ended 31 December 2013 and 2014.

In respect of the corporate banking facility, as this was previously held by John Laing Limited, which is part of the corporate structure through which the Group's investment portfolio is held, outstanding borrowings amounts and associated balances at 31 December 2014 would have been included within the "investments at fair value through profit or loss" line item on the Group Balance Sheet, and finance costs incurred on the corporate banking facility in the year ended 31 December 2014 would have been included within the "net gain on investments at fair value through profit or loss" line item in the Group Income Statement. However, because the new corporate banking facility is at the Company level, the pro forma financial information presents cash borrowings under the new facility within "interest bearing loans and borrowings" on the Group Balance Sheet rather than within "investments at fair value through profit or loss". Finance costs on the facility are presented in finance costs.

The pro forma financial statements have been prepared on the historical cost basis except for the revaluation of the investment portfolio and financial instruments that are measured at fair value at the end of each reporting period, as explained in the accounting policies. The pro forma financial information presents, as closely as possible, the basis on which the Group will report in subsequent periods.

The pro forma financial information is presented on pages 38 to 84.

Project companies in which the Group invests are described as "non-recourse" i.e. providers of debt to such project companies do not have recourse beyond John Laing's equity commitments in the underlying projects. Subsidiaries through which the Company holds its investments in project companies, which are held at FVTPL, and subsidiaries that are Service Companies, which are consolidated, are described as "recourse".

Pro forma results for the year

Profit before tax from continuing operations for the year ended 31 December 2014 was £120.4 million (2013 - £134.1 million). As set out in the following table, our core divisions continued to deliver good results after a strong 2013:

Note:

(1) net cash includes cash balances held to collateralise future investment commitments of £60.5 million (31 December 2013 - £7.9 million) and is presented net of short-term cash borrowings of £nil (31 December 2013 - £6.0 million).

· The main profit contributor in 2014 was the Primary Investment division. The increase from 2013 was principally due to new investment commitments in 2014 and value enhancements identified in the Primary Investment portfolio, including within the two IEP projects.

· In 2013, a number of significant value enhancements were identified in the Secondary Investment portfolio, particularly in the A1 Gdansk Poland investment, which resulted in an increase in the Secondary Investment division profit in that year.

· The Asset Management division's contribution on a like for like basis was higher in 2014 than 2013 primarily as a result of higher fees from external AuM.

The principal matters affecting the financial performance, financial position and cash flows of the Group in 2014 were:

· Total investment commitments of £217.2 million across 11 projects (2013 - ten projects with investment commitments of £112.4 million), including acquisitions;

· Cash investment of £88.3 million into existing projects during and at the end of their construction phase or on acquisitions of projects (2013 - £115.5 million);

· Full realisation of investments in twelve projects (including four investments to JLIF and six investments to JLEN) and partial realisation in one project for total proceeds of £159.6 million. In 2013, there were realisations of investments in five projects, resulting in total proceeds of £110.5 million;

· The combined deficit of the Group's defined benefit pension (under IAS 19) and post-retirement medical schemes at 31 December 2014 decreased to £185.8 million (31 December 2013 - £204.4 million), due to the effect of lower inflation expectations and cash contributions to JLPF of £26.1 million partially offset by a lower discount rate. The cash contribution in 2014 was in line with a schedule of contributions agreed as part of the actuarial valuation of JLPF at 31 March 2013. In February 2015, as part of the IPO process, the Company made a special contribution of assets, including cash, valued at £100 million to JLPF and the schedule of contributions was revised.

Pro Forma Group Income Statement

The Group Income Statement includes:

· the consolidated results of the Company and the Company's recourse subsidiaries that perform service related activities;

· the movement in the fair value of the Company's investment in its recourse investment entity subsidiaries through which it invests in both non-recourse project companies and listed investments, as adjusted for dividends received during the period.

The Group achieved financial close on seven projects in 2014 and achieved recoveries on financial close of £13.2 million (2013 - £9.7 million).

The Group's valuation of its investments in project companies is calculated by discounting their future cash flows as set out in the Portfolio Valuation section on page 17. The Group's investment in JLEN is held at its closing market value at the year end. After adjusting for the impact of investments, distributions and disposals, there was an uplift of £158.6 million (2013 - £134.0 million) in the fair value of investments. This uplift is included within 'net gain on investments at fair value through profit or loss' on the Group Income Statement. Note 13 to the pro forma financial statements shows a total fair value movement of £158.7 million on investments in project companies and listed investments which includes £0.1 million in respect of non-portfolio investments in small joint ventures.

During the year, investments in four projects were sold to JLIF and investments in six projects were sold to JLEN, with a further two investments and one partial investment sold to third parties, resulting in total proceeds of £159.6 million. Any gain arising on investment realisations is included in fair value movements on investments through the Group Income Statement. The Group's shareholding in JLIF was sold for net proceeds of £38.9 million.

Finance costs include the costs arising on the corporate banking facility and the excess of the IAS 19 interest on pension fund liabilities over the expected return on pension fund assets, resulting in a net finance cost of £25.7 million in 2014 (2013 - £18.3 million) with the increase in 2014 being primarily due to the write off of £4.3 million of unamortised upfront fees relating to the previous corporate banking facility that was replaced in February 2015.

The Group's tax credit on continuing activities for 2014 was £2.4 million (2013 - credit of £6.7 million). This comprised a tax credit of £0.2 million in recourse group subsidiary entities that are consolidated (shown on the 'Tax credit/(charge)' line of the Group Income Statement), in relation to a foreign tax credit, and a tax credit of £2.2 million in recourse group subsidiary entities that are held at FVTPL (included within 'net gain on investments at fair value through profit or loss' on the Pro Forma Group Income Statement), primarily in relation to group and consortium relief received from project companies. The annual contributions made to JLPF are tax deductible when paid and, as a result, there is minimal tax payable by the UK holding and asset management activities of the Group. Capital gains from the realisation of investments in projects are generally exempt from tax under the Substantial Shareholding Exemption for shares in trading companies. To the extent this exemption is not available, gains may be sheltered using current year losses or losses brought forward within the Group's holding companies. There are no losses in the Company but there are tax losses in recourse group subsidiary entities that are held at FVTPL.

Pro Forma Group Balance Sheet

The Group Balance Sheet includes on a line by line basis the assets and liabilities of the Company and of the Company's recourse subsidiaries that perform service related activities (Service Companies) and the fair value of the Company's investment in its recourse investment entity subsidiaries through which it invests in non-recourse project companies and listed investments.

The Directors' valuation of the Group's portfolio of investments in project companies and listed investments was £772.0 million at 31 December 2014 (31 December 2013 - £684.4 million). The valuation methodology is set out in the Portfolio Valuation section.

The portfolio value is reconciled to the Pro Forma Group Balance Sheet as follows:

Note:

(1) other assets and liabilities within recourse group investment entity subsidiaries include cash and cash equivalents and trade and other receivables less trade and other payables.

The combined accounting deficit in the Group's defined benefit pension and post-retirement medical schemes at 31 December 2014 was £185.8 million (31 December 2013 - £204.4 million). The Group operates two defined benefit schemes in the UK - the John Laing Pension Fund (JLPF) and the John Laing Pension Plan (the Plan). Both schemes are closed to new members and future accrual.

Within the combined accounting deficit of £185.8 million, the pension deficit in JLPF was £177.6 million, based on a discount rate of 3.6%. The amount of the deficit is dependent on key assumptions, principally: inflation; the discount rate used; and the anticipated longevity of members. The discount rate used, as prescribed by IAS 19, is based on the yields from high quality corporate bonds. During January and February 2015, the yields from such bonds were volatile and at 28 February 2015, the discount rate was 3.4% giving rise to an estimated deficit of £94.9 million (unaudited) (which includes the benefit of the £100 million special contribution in February 2015). The sensitivity of JLPF's pension liabilities to changes in key assumptions is illustrated in note 20 to the pro forma financial statements.

During 2014, the Company continued to work with the JLPF trustee on risk reduction initiatives. Pension benefits for current John Laing staff are delivered through a defined contribution scheme.

In December 2013, a schedule of contributions was agreed with the JLPF trustee over a period of 10 years, comprising annual contributions of £26.1 million, increasing by 3.55% annually, payable each March, starting from March 2014. The Company made cash contributions to JLPF in 2014 of £26.1 million (2013 - £25.2 million). As part of the IPO process, in February 2015, the Group made a special contribution satisfied by the transfer of assets, including cash, valued at £100 million to JLPF and agreed a reduction in contributions payable in March 2016 and March 2017. The next triennial actuarial valuation of JLPF is due as at 31 March 2016.

Liquidity

At 31 December 2014, the Group had a corporate banking facility of £353.9 million expiring in February 2017 (31 December 2013 - £305.0 million). Of this facility, £109.0 million was undrawn at 31 December 2014 (31 December 2013 - £139.1 million). Net available financial resources at 31 December 2014 were £128.5 million (31 December 2013 - £188.4 million).

Analysis of Group financial resources (recourse)

Notes:

(1) in February 2015, the Group entered into a new £350 million corporate banking facility expiring in March 2020.

(2) include cash and cash equivalents and other financial assets included in discontinued operations but exclude cash collateral of future investment commitments.

(3) cash and bank deposits include amounts in both Group entities that are fair valued and Group entities that are consolidated.

Cash and bank deposits are included in the Pro Forma Group Balance Sheet within several lines:

Together, letters of credit issued and cash collateral represent future cash investment by the Group into projects which have reached financial close.

Cash collateral balances of £60.5 million at 31 December 2014 included £39.7 million relating to the East West Link project. In the pro forma financial statements, cash collateral is included within 'investments at fair value through profit or loss' on the Pro Forma Group Balance Sheet. Letters of credit issued included a letter of credit for £21.0 million relating to the East West Link project. The aggregate of £60.7 million of the cash collateral balance and the letter of credit amount in relation to the East West Link project is lower in sterling terms than the total investment commitment of £62.7 million due to movement in the Australian dollar between financial close of this project and 31 December 2014.

The Group tends not to be a cash borrower at the corporate level for significant periods of time and does not, therefore, generally seek to hedge its exposure to interest rate movements. However, there are significant non-recourse borrowings within the project companies in which the Group invests. The interest rate exposure on the debt of such project companies is, in almost all circumstances, fixed on financial close, through the issue of either a long-dated bond or fixed rate debt, or through the fixing of floating rate bank debt via interest rate swaps. Given this, the impact on the Group's returns from investments in project companies of changes in interest rates on project borrowings is minimal. There is an impact from changes in interest rates on the investment income from monies held on deposit both at Group level and within project companies but such an effect has not been, and is unlikely to be, significant in the context of the Pro Forma Group Income Statement.

The Group monitors its total exposure to particular currencies. The Group may apply an appropriate hedge to a specific currency transaction exposure, which could include borrowing in that currency or entering into forward foreign exchange contracts. An analysis of the portfolio value by currency is set out in the Portfolio Valuation section on page 20.

At 31 December 2014, the Group held investments valued at £142.9 million (31 December 2013 - £142.2 million) where the underlying project was denominated in Euro, equivalent to 18.5% (31 December 2013 - 20.8%) of the total portfolio valuation of £772.0 million (31 December 2013 - £684.4 million). The Group regularly reviews its exposure to foreign currency, in particular its sensitivity to changes in exchange rates relative to Sterling and to the timing and amount of forecast cash flows. As illustrated in the table below, future cash injections arising from existing investment commitments are partly hedged by letters of credit issued in the same foreign currency. At 31 December 2014, the Group held foreign exchange forward contracts of £28.9 million (31 December 2013 - £31.0 million) against its Euro denominated investments.

Letters of credit in issue denominated in foreign currencies are revalued monthly to Sterling. This retranslation risk does not directly impact the Group Balance Sheet or the Group Income Statement. Letters of credit in issue at 31 December 2014 of £243.8 million (31 December 2013 - £158.8 million) are analysed by currency as follows:

Adjusted Pro Forma Group Balance Sheet

On 17 February 2015, the Company issued 66.92 million new ordinary shares raising £130.5 million of new capital (gross) resulting in proceeds of £120 million net of costs. In addition, on 17 February 2015, the Group made a special contribution of £100 million to JLPF made up of investments and cash. The impact of both transactions on the Pro Forma Group Balance Sheet at 31 December 2014 is shown in the adjusted Pro Forma Group Balance Sheet below. Adjusted on this basis, net assets at 31 December 2014 were £769.8 million, equating to 210 pence per share.

Note:

(1) The total net proceeds receivable by the Company from the Offer were approximately £120 million, after deduction of underwriting commissions, other estimated offering-related fees, and other related expenses incurred by the Group.

(2) The Group entered into an agreement with the JLPF trustee to make a special contribution of £100 million, on Admission, to reduce the Group's outstanding pension liability and future contributions. This contribution was satisfied by the transfer of certain of the Group's assets (including cash).

Going concern

The Group has a committed corporate banking facility until March 2020 and has sufficient resources available to meet its committed capital requirements, investments and operating costs for the foreseeable future. Accordingly, the Group has adopted the going concern basis in the preparation of its pro forma financial statements for the year ended 31 December 2014.

Patrick O'D Bourke

Group Finance Director

Principal Risks and Risk Management

The effective management of risks within the Group is essential to the successful delivery of the Group's objectives. The Board is responsible for ensuring that risks are identified and appropriately managed across the Group and has delegated to the Audit Committee responsibility for reviewing the effectiveness of the Group's internal controls, including the systems established to identify, assess, manage and monitor risks.

The principal internal controls that operated throughout 2014 and up to the date of this announcement include:

· an organisational structure which provides adequate segregation of responsibilities, clearly defined lines of accountability, delegated authority and extensive reporting;

· clear business objectives aligned with the Group's risk appetite;

· risk reporting, including identification of risks through Group-wide risk registers, that is embedded in the regular management reporting of business units and is communicated to the Board; and

· an independent internal audit function, which reports to the Audit Committee. The external auditor also reports to the Audit Committee on the effectiveness of controls.

In addition, a Risk Committee, comprising senior members of management and chaired by the Group Finance Director, assists the Board, Audit and Executive Committees in monitoring and executing the Group's risk management policy.

The Group risk register is reviewed at every meeting of the Audit Committee and every six months by the Board.

The above procedures are underpinned by a control environment which is supported by a culture of openness of communication between operational and executive management on all matters, including risk and control and procedures for bringing matters to the attention of the Board. All investment decisions are scrutinised in detail by the Executive Committee, the Investment Committee and, if outside the Investment Committee's terms of reference, also by the Board.

The Directors' assessment of the principal risks applying to the Group is set out below, including the way in which risks are linked to the three strategic objectives set out in the Chief Executive's review. Additional risks and uncertainties not presently known to the Directors, or which they currently consider not to be material, may also have an adverse effect on the Group:

Note: The Group's three strategic objectives, as set out in the Chief Executive's review, are:

1. Growth in Primary Investment volumes (new capital committed to greenfield PPP and renewable energy infrastructure) over the medium term

2. Growth in the value of the Group's investment portfolio

3. Growth in the value of external Assets under Management and related fee income

John Laing Group plc

Pro Forma Group Income Statement

for the year ended 31 December 2014

Pro Forma Group Statement of Comprehensive Income

for the year ended 31 December 2014

*Exchange differences could subsequently be recycled to the income statement on disposal of overseas operations.

Pro Forma Group Statement of Changes in Equity

for the year ended 31 December 2014

Pro Forma Group Balance Sheet

as at 31 December 2014

The pro forma financial statements of John Laing Group plc, registered number 5975300, were approved by the Board of Directors and authorised for issue on 24 March 2015. They were signed on its behalf by:

Olivier Brousse Patrick O'D Bourke

Director Director

24 March 2015 24 March 2015

Pro Forma Group Cash Flow Statement

for the year ended 31 December 2014

Notes to the pro forma financial statements

1. General information

The pro forma results of John Laing Group plc (the Company or the Group) (formerly Henderson Infrastructure Holdco (UK) Limited) are stated according to the basis of preparation section below. The registered office of the Company is 1 Kingsway, London, WC2B 6AN. The principal activity of the Company is the origination, investment in and management of international infrastructure projects.

The pro forma financial statements are presented in pounds sterling. The statutory financial statements on a Company-only basis can be found on pages 85 to 96.

2. Accounting policies

Basis of preparation

Pro forma financial statements of the Company have been prepared on the basis that the restructuring associated with the Company's Admission in February 2015 had occurred on 1 January 2013 and had been in place throughout the years ended 31 December 2013 and 2014, as described in more detail on pages 22 and 23 of the Financial Review section.

As at 31 December 2014, the Company did not form a group as it only held 22.46% of HIH and the restructuring had not become effective. Consequently, the Company is unable to produce group accounts nor show financial information in respect of the newly formed group within its statutory results for the year ended 31 December 2014.

In the opinion of the Directors, not to present this information would not give a true and fair view of the state of the Company's affairs. Consequently pro forma financial statements have been prepared in compliance with IFRS on the basis that both the restructuring described above and the corporate banking facility now held by John Laing Group plc had been in place throughout the years ended 31 December 2014 and 31 December 2013.

As the Company meets the definition of an investment entity set out within IFRS 10, the pro forma financial information has been prepared accordingly. Investment entities are required to account for all their investments in controlled entities, as well as investments in associates and joint ventures, at fair value through profit and loss (FVTPL), except for those subsidiaries that provide investment-related services or engage in permitted investment-related activities with investees (Service Companies). Service Companies are consolidated rather than recorded at fair value through profit and loss. On 17 February 2015, the legal ownership of certain Service Companies in the HIH group was transferred to the Company.

In respect of the corporate banking facility, as this was previously held by John Laing Limited, which is part of the corporate structure through which the Group's investment portfolio is held, outstanding borrowings amounts and associated balances at 31 December 2014 would have been included within the "investments at fair value through profit or loss" line item on the Group Balance Sheet, and finance costs incurred on the corporate banking facility in the year ended 31 December 2014 would have been included within the "net gain on investments at fair value through profit or loss" line item in the Group Income Statement. However, because the new corporate banking facility is at the Company level, the pro forma financial information presents cash borrowings under the new facility within "interest bearing loans and borrowings" on the Group Balance Sheet rather than within "investments at fair value through profit or loss." Finance costs on the facility are presented in finance costs on the Group Income Statement.

The pro forma financial statements have been prepared on the historical cost basis except for the revaluation of the investment portfolio and financial instruments that are measured at fair value at the end of each reporting period, as explained in the accounting policies. The pro forma financial information presents, as closely as possible, the basis on which the Group will report in subsequent periods.

Project companies in which the Group invests are described as "non-recourse" i.e. providers of debt to such project companies do not have recourse beyond John Laing's equity commitments in the underlying projects. Subsidiaries through which the Company holds its investments in project companies, which are held at FVTPL, and subsidiaries that are Service Companies, which are consolidated, are described as "recourse".

The historical financial information presented in the IPO prospectus of the Company dated 29 January 2015 did not reflect the transactions in respect of the part waiver and part capitalisation of the shareholder loans from HIHJ to HIH that occurred between 31 December 2014 and Admission on 17 February 2015. Preparing the historical financial information in the prospectus on the basis that these transactions had occurred on or before 1 January 2013 would have had the following impact:

Adoption of new and revised standards

At the date of authorisation of these pro forma financial statements, the following standards and interpretations which have not been applied in the pro forma financial statements were in issue but not yet effective and in some cases had not yet been adopted by the EU (any other standard not listed below has been applied in these pro forma financial statements):

· IFRS 9 Financial Instruments;

· IFRS 11 Accounting for Acquisitions of Interests in Joint Operations;

· IAS 16 / IAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation;

· IFRS 14 Regulatory Deferral Accounts;

· IFRS 15 Revenue from Contracts with Customers;

· IFRS 10 / IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture;

· IAS 27 Equity Method in Separate Financial Statements;

· Annual Improvements to IFRS (2012-2014) Cycle; and

· IAS 1 Disclosure Initiative.

With the exception of IFRS 9, the Directors do not anticipate that the adoption of the standards listed above will have a material impact on the financial statements of the Group in future reporting periods. The adoption of IFRS 9, when it becomes mandatory, will have an impact on the classification and disclosures of financial instruments.

The principal accounting policies applied in the preparation of these pro forma financial statements are set out below. These policies have been applied consistently to all the years presented, unless otherwise stated.

(a) Application of investment entity guidance

Following EU endorsement of Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) in November 2013, the Group considered whether it met the definition of an investment entity. Under the guidance, an investment entity is considered to be an entity which:

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

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

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

In assessing whether it meets the definition of an investment entity, an entity must consider whether it has the following typical characteristics:

· More than one investment;

· More than one investor;

· Investors that are not related parties of the entity; and

· Ownership interests in the form of equity or similar interests.

The Group concluded that the Company met the definition of an investment entity. The Group has also adopted the amendments to IFRS 12 and IAS 27 which are applicable to an investment entity. Following adoption of these standards, the Group, as an investment entity, measures all its investments in project companies (including subsidiary project companies which it controls and joint ventures and associates) at FVTPL in accordance with IAS 39: Financial Instruments: Recognition and Measurement (to be replaced by IFRS 9: Financial Instruments when it becomes effective).

The fair value of investments in project companies is calculated by discounting the future cash flows of the underlying projects at an appropriate discount rate. The discount rates used are based on market discount rates for similar assets adjusted by an appropriate premium to reflect project specific risk and the stage of the project. The discount rates applied to investments at 31 December 2014 were in the range of 7.5% to 13.0% (31 December 2013: 7.5% to 11.0%).

The fair value of other investments, which comprises listed investments, is determined by the number of shares held at the period end date and the share price at that date.

The Company consolidates those directly owned subsidiaries which provide services in relation to the Group's investment activities. These subsidiaries include Laing Investments Management Services Limited, John Laing Capital Management Limited and John Laing Services Limited. The Group also consolidated its former subsidiary, John Laing Integrated Services Limited ('JLIS'), until its disposal on 18 October 2013.

(b) Going concern

The Directors have reviewed the Group's financial projections and cash flow forecasts and believe, based on those projections and forecasts, that it is appropriate to prepare the financial statements of the Group on the going concern basis.

As set out in the Financial Review section of the Strategic Report on pages 22 to 29, in arriving at their conclusion, the Directors took into account the Group's policy towards liquidity and cash flow management and the availability of a £350 million committed corporate banking facility until March 2020. The Directors are of the opinion that, based on the Group's forecasts and projections and taking account of expected bidding activity and operational performance, the Group will be able to operate within its bank facilities and comply with the financial covenants therein for the foreseeable future.

In determining that the Group is a going concern, certain risks and uncertainties, some of which arise or increase as a result of the economic environment in some of the Group's markets, have been considered. The Directors believe that the Group is adequately placed to manage these risks. The most important risks and uncertainties identified and considered by the Directors are set out in the Principal Risks and Risk Management section on pages 30 to 37. In addition, the Group's policies for management of exposure to financial risks, including liquidity, foreign exchange, credit and interest rate risks are set out in note 18.

(c) Dividend income

Dividend income from investments at FVTPL is recognised when the shareholders' rights to receive payment have been established (provided that it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably). Dividend income is recognised gross of withholding tax, if any, and only when approved and paid by the project company.

(d) Dividend payments

Dividend payments to the Company's shareholders are recognised as a liability in the Group's financial statements in the period in which the dividends are approved by the Company's shareholders.

(e) Net gain on investments at FVTPL

Net gain on investments at FVTPL excludes dividend income referred to above. Please refer to accounting policy (g)(i) for further detail.

(f) Other income

The Group earns income from the following sources:

 (i) Fees from asset management services

Fees from asset management services to projects in the Group's investment portfolio and external parties are recognised as services provided in accordance with IAS 18: Revenue.

When it is probable that the expected outcome over the life of a management services contract will result in a net outflow of economic benefits or overall loss, a provision is recognised immediately. The provision is determined based on the net present value of the expected future cash inflows and outflows.

(ii) Fees from facilities management services

Until the sale of JLIS on 18 October 2013, fees from long-term facilities management contracts were accounted for in accordance with IAS 18: Revenue. Revenues and profits recognised were determined by reference to services provided in the period.

(iii) Recovery of bid costs on financial close

Bid costs in respect of primary investments are charged to the Group Income Statement until such time as the Group is virtually certain that it will recover the costs. Virtual certainty is generally achieved when an agreement is in place demonstrating that costs are fully recoverable even in the event of cancellation of a project. From the point of virtual certainty, bid costs are held in the Group Balance Sheet as a debtor prior to achieving financial close. On financial close (finalisation of project and financing agreements), the Group recovers bid costs by charging a fee to the relevant company in the investment portfolio.

Other income excludes the value of intra-group transactions and VAT and includes revenue derived from the provision of services to project companies which are held at FVTPL by consolidated Service Companies.

(g) Financial instruments

Financial assets and financial liabilities are recognised in the Group Balance Sheet when the Group becomes a party to the contractual provisions of the financial instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in profit or loss.

(i) Financial assets

All financial assets are recognised and derecognised on a trade date where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within the timeframe established by the market concerned, and are initially measured at fair value, plus transaction costs, except for those financial assets classified as at FVTPL, which are initially measured at fair value.

Financial assets are classified into the following specified categories: financial assets at FVTPL; 'held-to-maturity' investments; 'available-for-sale' financial assets; and 'loans and receivables'. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

The financial assets that the Group holds are classified as financial assets at FVTPL and loans and receivables:

· Investments at FVTPL comprise the investments in project companies, investments in listed companies and other assets and liabilities of investment entity subsidiaries. Investments in project companies and in listed companies are designated upon initial recognition as financial assets at FVTPL. The Group's policy is to fair value together both the equity and subordinated debt investments in project subsidiaries, joint ventures and associates. Subsequent to initial recognition, the investments are measured on a combined basis at fair value using a discounted cash flow methodology, with changes recognised within operating income in the Group Income Statement;

The Directors consider that the carrying value of other assets and liabilities held in investments at FVTPL approximates to their fair value. The changes in value of these assets and liabilities are recognised in net gains on investments at fair value through profit or loss in the Group Income Statement; and

· Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted on an active market. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short term receivables when the recognition of interest would be immaterial. Loans and receivables are included in current assets, except for maturities greater than 12 months after the balance sheet date which are classified as non-current assets. The Group's loans and receivables comprise 'trade and other receivables', 'cash and cash equivalents' and 'other financial assets' in the Group Balance Sheet.

(ii) Impairment of financial assets

Financial assets, other than those at FVTPL, are assessed for indications of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events which have occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected. For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the financial asset's original effective interest rate. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets.

(iii) Derecognition of financial assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

(iv) Financial liabilities

Interest bearing bank loans and borrowings are initially recorded at fair value, being the proceeds received, net of direct issue costs and subsequently at amortised cost using the effective interest rate method. Finance charges, including premiums payable on settlement or redemption, and direct issue costs are accounted for on an accruals basis in the Group Income Statement and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.

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

The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they expire.

(v) Derivative financial instruments

The Group treats forward foreign exchange contracts and currency swap deals it enters into as FVTPL derivative financial instruments. Changes in the fair value of these instruments are taken through the Group Income Statement.

(h) Provisions

Provisions are recognised when:

· the Group has a legal or constructive obligation as a result of past events;

· it is probable that an outflow of resources will be required to settle the obligation; and

· the amount has been reliably estimated.

Where there are a number of similar obligations, the likelihood that an outflow will be required on settlement is determined by considering the class of obligations as a whole.

(i) Finance costs

Finance costs relating to the corporate banking facility, other than set-up costs, are recognised in the year in which they are incurred. Set-up costs are recognised over the facility term.

Finance costs also include the net interest cost on retirement benefit obligations and the unwinding of discounting of provisions.

(j) Taxation

The tax charge or credit represents the sum of tax currently payable and deferred tax.

Current tax

Current tax payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the Group Income Statement because it excludes both items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted, or substantively enacted, by the balance sheet date.

Deferred tax

Deferred tax liabilities are recognised for taxable temporary differences arising from investments in project companies, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The measurement of deferred tax liabilities in project companies reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited to the Group Income Statement except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

(k) Foreign currencies

The individual financial statements of each Group subsidiary are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the pro forma financial statements, the results and financial position of each Group subsidiary are expressed in pounds sterling, the functional currency of the Company and the presentation currency of the pro forma financial statements.

Exchange differences arising in the ordinary course of trading are reflected in the Group Income Statement; those arising on translation of net results of foreign operations are transferred to the Group's retained earnings in the Group Balance Sheet. On disposal of foreign operations, such translation differences are reclassified to the Group Income Statement in the period in which the disposal has occurred.

For the purposes of presenting the pro forma financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing at the balance sheet date. Income and expense items are translated at the average exchange rates for the period. Monetary assets and liabilities expressed in foreign currency are reported at the rate of exchange prevailing at the balance sheet date or, if appropriate, at the forward contract rate. Any difference arising on the retranslation of these amounts is taken to the Group Income Statement, except for long-term shareholder loans, which form part of net investment in a foreign operation, where any difference arising on the retranslation of these amounts is taken to the translation reserve in the Group Balance Sheet. In the event of disposal of a foreign investment, this reserve is reclassified to the Group Income Statement as part of the profit or loss on disposal.

(l) Non-current assets held for sale and discontinued operations

Where a disposal group represents a separate major line of business or geographical area of operations, or is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations, it is treated as a discontinued operation. The post-tax profit or loss of this discontinued operation together with the gain or loss recognised on its disposal is shown as a single amount on the face of the Group Income Statement, with all historical financial periods being presented on this basis.

Non-current assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amount is recoverable through a sale rather than through continuing use. This condition is regarded as having been met only when the sale is highly probable, the asset (or disposal group) is available for immediate sale in its present condition and the sale is completed within one year of the date of its classification.

(m) Intangible assets

Computer software classified as an intangible asset is amortised over three to five years on a straight line basis.

(n) Plant and equipment

Plant and equipment, including fixtures and fittings and computer equipment, are stated at cost less accumulated depreciation and any impairment loss.

Depreciation is charged so as to write off the cost or valuation of assets over their estimated useful lives using the straight line method on the following bases:

Computer equipment 3 to 5 years; and

Office equipment 3 to 5 years

(o) Retirement benefit costs

The Group operates both defined benefit and defined contribution pension arrangements. Its two defined benefit pension schemes are the John Laing Pension Fund (JLPF) and the John Laing Pension Plan, which are both closed to future accrual. The Group also provides post-retirement medical benefits to certain former employees.

Payments to defined contribution pension arrangements are charged as an expense as they fall due.

For the defined benefit pension schemes and the post-retirement medical benefit scheme, the cost of providing benefits is determined in accordance with IAS 19: Employee Benefits (revised) using the projected unit credit method, with actuarial valuations being carried out at least every three years. Actuarial gains and losses are recognised in full in the year in which they occur and are presented in the Group Statement of Comprehensive Income. Curtailment gains arising from changes to members' benefits are recognised in full in the Group Income Statement.

The retirement benefit obligations recognised in the Group Balance Sheet represent the present value of: (i) defined benefit scheme obligations as adjusted for unrecognised past service costs and as reduced by the fair value of scheme assets, where any asset resulting from this calculation is limited to past service costs plus the present value of available refunds and reductions in future contributions to the schemes; and (ii) unfunded post-retirement medical benefits.

Net interest expense or income is recognised within finance costs.

(p) Cash and cash equivalents

Cash and cash equivalents in the Group Balance Sheet comprise cash at bank and in hand and short term deposits with original maturities of three months or less. For the purposes of the Group Cash Flow Statement, cash and cash equivalents comprise cash and short term deposits as defined above, net of bank overdrafts.

Deposits held with original maturities of greater than three months are shown as other financial assets.

(q) Leasing

All leases are classified as operating leases. Rentals payable under operating leases are charged to income on a straight line basis over the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight line basis over the lease term.

(r) Share capital

Ordinary shares are classified as equity instruments on the basis that they evidence a residual interest in the assets of the Group after deducting all its liabilities.

Incremental costs directly attributable to the issue of new ordinary shares are recognised in equity as a deduction, net of tax, from the proceeds in the period in which the shares are issued.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group's accounting policies, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates made and the underlying assumptions on which they are based are reviewed regularly. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical accounting judgement

Determining whether the Group qualifies as an investment entity

The Group has assessed whether it falls within the criteria of an investment entity under Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27):

(i) the Group has historically been wholly owned by Henderson Infrastructure Holdco (Jersey) Limited on behalf of two funds, Henderson PFI Secondary Fund LP and Henderson PFI Secondary Fund II LP (the Henderson Funds), which in turn have a number of investors. Following Admission, the Group is now also owned by a number of investors directly;

(ii) the Group's strategy is to originate, invest in, and manage infrastructure assets. It invests in PPP projects and renewable energy project companies with the sole purposes of earning investment income and capital appreciation. The underlying project companies have businesses and activities that the Group is not directly involved in. The Group's returns from the provision of management services to project companies are small in comparison to the Group's overall investment-based returns; and

(iii) the Group measures all its investments in PPP projects and renewable energy projects on a fair value basis. Information on the fair value of investments forms part of monthly management reports reviewed by the Board of Directors.

Although the Group has a defined benefit pension liability, IFRS does not exclude companies with non-investment related liabilities from qualifying as investment entities.

Unconsolidated project company subsidiaries are 'non-recourse' entities. Based on the arrangements in place with those subsidiaries, the Group has concluded that there are no:

(i) significant restrictions (resulting from borrowing arrangements, regulatory requirements or contractual arrangements) on the ability of an unconsolidated subsidiary to transfer funds to the Group in the form of cash dividends or to repay loans or advances made to the unconsolidated subsidiary by the Group; and

(ii) current commitments or intentions to provide financial or other support to an unconsolidated subsidiary, including commitments or intentions to assist the subsidiary in obtaining financial support, beyond commitments made at financial close of a project.

Key sources of estimation uncertainty

Fair value of investments in project companies

A valuation of the Group's investment portfolio is prepared on a consistent, principally discounted cash flow basis at 30 June and 31 December. The valuation is carried out on a fair value basis assuming that forecast cash flows are received until maturity of the underlying assets.

A base case discount rate for an operational project is derived from secondary market information and other available data points. The base case discount rate is then adjusted to reflect project-specific risks. In addition, risk premia are added during the construction phase to reflect the additional risk during construction. These premia reduce over time as the project progresses through its construction programme, reflecting the significant reduction in risk once the project reaches the operating stage.

The cash flows on which the discounted cash flow valuation is based are those forecast to be distributable to the Group at each balance sheet date, derived from detailed financial models. These incorporate assumptions reflecting the Group's expectations of likely future cash flows including value enhancements.

Pension and other post-retirement liability accounting

The combined accounting deficit in the Group's defined benefit pension and post-retirement medical schemes at 31 December 2014 was £185.8 million (31 December 2013: £204.4 million). The value of the pension deficit is highly dependent on assumptions for price inflation, discount rate and longevity experience. The sensitivity of the pension liabilities to certain changes in these assumptions is illustrated in note 20.

In determining the Group's defined benefit pension liability, consideration is also given to whether there is a minimum funding requirement under IFRIC 14 which is in excess of the IAS 19 liability. If the minimum funding requirement is higher, an additional liability would need to be recognised. Under the trust deed and rules of JLPF, the Group has an ultimate unconditional right to any surplus, accordingly the excess of the minimum funding requirement over the IAS 19 liability has not been recognised as an additional liability.

3. Operating segments

Information is reported to the Group's Board (the chief operating decision maker under IFRS 8) for the purposes of resource allocation and assessment of segment performance based on the category of activities undertaken within the Group. The principal categories of activity, and thus the reportable segments under IFRS 8, are: Primary Investment, Secondary Investment and Asset Management.

The results included within each of the reportable segments comprise:

Primary Investment - costs and cost recoveries associated with originating, bidding for and winning greenfield infrastructure and renewable energy projects; investment returns from and growth in the value of the Primary Investment portfolio, net of associated costs.

Secondary Investment - investment returns from and growth in the value of the Secondary Investment portfolio, net of associated costs.

Asset Management - fee income and associated costs from investment management services in respect of both the Primary and Secondary Investment portfolios and in respect of JLIF's and JLEN's portfolios plus fee income and associated costs from project management services and, up to 18 October 2013, fee income and associated costs from facilities management services.

The Board's primary measure of profitability for each segment is adjusted profit before tax.

The following is an analysis of the Group's adjusted profit before tax and adjusted operating income for the years ended 31 December 2014 and 31 December 2013: