Full Year Results for the 12 Months to 31 Dec 2019

Companies

International Public Partnerships Ltd. (INPP)

UK 100

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100%	50%
50%-100%	6%
<50%	%

Construction	9%
Operational	91%
Early Stage Investor³	68%
Later Stage Investor⁴	32%

<20 years	52%
20-30 years	19%
>30 years	29%

Value-focused portfolio development	Originate investments with stable, long-term cash flows and potential growth attributes, whilst maintaining a balanced portfolio of assets	New investments meet at least three of six attributes: 1. Stable, long-term returns 2. Inflation-linked investor cash flows 3. Early stage investor 4. Investment secured through preferential access 5. Other capital enhancement attributes 6. Positive UN Sustainable Development Goals ('UN SDG') contribution	100% Of the investments made in 2019 met at least three of the six attributes (2018: 100%)
ACTIVE ASSET MANAGEMENT	Managing strong ongoing asset performance	- Strong ongoing asset performance as demonstrated by:	- 100% Forecast distributions received2 (2018: 100%) - 0.3% Asset performance deductions achieved against a target of <3% (2018: 1.62%) - 99.7% Asset availability achieved against a target of >98% (2018: 99.6%)
		- Managing in construction investment delivery	- 9.2% of portfolio investments in construction. (2018: 11.0%). All in-construction investments are within budget and on schedule
efficient financial management	Making efficient use of the Company's finances and working capital	- Cash covered dividends - Competitive ongoing charges	- 1.3x Dividends fully cash covered (2018: 1.2x) - 1.10% Ongoing charges ratio (2018: 1.17%)
Strong Responsible Investment	Management of material ESG factors	- Robust integration of ESG into investment lifecycle	- 94%of portfolio has an ESG policy (2018: 94%)

	Location	Sector	Status at 31 December 2019	% holding at 31 December 2019	% investment fair value 31 December 2019	% investment fair value 31 December 2019
Cadent	UK	Gas distribution	Operational	7% Risk Capital	17.1%	12.4%
Cadent owns four of the UK's eight regional gas distribution networks ('GDNs') and in aggregate provides gas to approximately 11 million consumers.
Tideway	UK	Waste water	Under Construction	16% Risk Capital	9.2%	10.6%
Tideway is a £4.2 billion investment and relates to the design, build and operation of a 25km 'super-sewer' under the River Thames.
Diabolo Rail Link	Belgium	Transport	Operational	100% Risk Capital	8.6%	10.0%
Diabolo Rail Link integrates the Brussels Airport with the national rail network allowing passengers to access high-speed trains, such as Amsterdam-Brussels-Paris and NS Hispeed trains.
Lincs Offshore Transmission	UK	Energy transmission	Operational	100% Risk Capital	7.9%	9.0%
The project connects the 270MW Lincs offshore windfarm, located 8km off the east coast of England, to the National Grid. The transmission assets comprise the onshore and offshore substations and under-sea cables, 100km in length.
Ormonde Offshore Transmission	UK	Energy transmission	Operational	100% Risk Capital and 100% senior debt	5.3%	6.2%
The project connects 132kV Ormonde offshore wind farm, located 10km off the Cumbrian coast, to the National Grid. The transmission assets comprise the onshore and offshore substations and under-sea cables, 41km in length.
Reliance Rail	Australia	Transport	Operational	33% Risk Capital	3.7%	4.3%
Reliance Rail is responsible for financing, designing, delivering and ongoing maintenance of 78 next-generation, electrified, 'Waratah' train sets serving Sydney in New South Wales, Australia.
BeNEX	Germany	Transport	Operational	100% Risk Capital	3.5%	2.0%
BeNEX is both a rolling stock leasing company as well as an investor in train operating companies, providing approximately 40 million train km of annual rail transport.
Angel Trains	UK	Transport	Operational	5% Risk Capital	3.3%	3.5%
Angel Trains is a rolling stock leasing company asset base comprising over 4,400 vehicles. Angel Trains has invested over £5 billion in new rolling stock and refurbishment since 1994, and is the second largest investor in the industry after Network Rail.
US Military Housing²	US	Military housing	Operational	100% Risk Capital	2.7%	3.1%
Two tranches of mezzanine debt underpinned by security over seven operational Public-Private Partnerships ('PPP') military housing projects, relating to a total of 19 operational military bases in the US and comprising c.21,800 individual housing units.
Robin Rigg OFTO	UK	Energy transmission	Operational	100% Risk Capital and 100% senior debt	2.3%	1.1%
The project connects the 180MW Robin Rigg East and West offshore windfarms, located 12km off the coast of Cumbria, to the National Grid. The transmission assets comprise the onshore and offshore substations and under-sea cables, 25km in length.

INVESTMENTS MADE DURING 2019	LOCATION		KEY ATTRIBUTES					OPERATIONAL STATUS	INVESTMENT	INVESTMENT DATE
		1	2	3	4	5	6
Luton Building Schools for Future ('BSF') Project	UK	ü	ü		ü		ü	Operational	£0.2 million	17 January 2019
Midlands Batch Priority Schools Project (Batch 4)	UK	ü	ü		ü		ü	Operational	£12.4 million	30 April 2019
Wolverhampton BSF Projects 1 & 2	UK	ü	ü		ü		ü	Operational	£1.8 million	7 June 2019
Cadent	UK	ü	ü		ü	ü	ü	Operational	£153.2 million	28 June 2019
BeNEX	Germany	ü	ü	ü	ü	ü	ü	Operational	£29.4 million¹	28 June 2019
National Digital Infrastructure Fund ('NDIF')	UK			ü	ü	ü	ü	Operational	£12.8 million	Various
OFTO Refinancing	UK	ü	ü		ü		ü	Operational	£71.5 million	26 September 2019
									£281.3 million

KNOWN/COMMITTED OPPORTUNITIES	LOCATION	ESTIMATED INVESTMENT¹	EXPECTED INVESTMENT PERIOD	INVESTMENT STATUS
NDIF	UK	£17.2 million	Operational businesses	Of the £45 million commitment to NDIF, c.£27.8 million has been invested to 31 December 2019
Offenbach Police Headquarters	Germany	£8.0 million²	c.30 years	Investment commitment made. Expected to be funded mid-2021
Rampion OFTO	UK	c.£35-45 million	c.20 years	Preferred bidder. Investment expected late 2020
Beatrice OFTO	UK	Up to £60 million	c.23 years	Preferred bidder. Investment expected H2 2020

SECTOR OF INVESTMENT OPPORTUNITY	LOCATION	ESTIMATED CAPITAL VALUE ³	EXPECTED INVESTMENT LENGTH	INVESTMENT STATUS
OFTO	UK	c.£1.0 billion	c.20 years	Various opportunities, including the one remaining Tender Round 6, for which it is shortlisted
Education	UK, Europe, Australia	c.£0.7 billion	Various	Various opportunities
Health	Europe	c.£1.0 billion	Various o	Various opportunities
Transport	Australia, Europe	c.£0.7 billion	Various	Various opportunities
Regulated	UK	c.£7.0 billion	Various	Regulated opportunities
Other	UK, US, Europe	c.£10.0 billion	Various	Various opportunities

ASSET	LOCATION	CONSTRUCTION COMPLETION DATE	DEFECTS COMPLETION DATE	STATUS	% OF FAIR VALUE OF INVESEMENT
Tideway	UK	2024¹	2027²	On Schedule	9.2%
Offenbach Police Headquarters	Germany	2021	2025	On Schedule	0.0%³

SUMMARY OF CONSOLIDATED CASH FLOW	YEAR TO 31 DECEMEBER 2019 MILLION	YEAR TO 31 DECEMEBER 2018 MILLION
Opening cash balance	84.7	33.9
Cash from investments	159.6	138.8
Corporate costs (for ongoing charges ratio)	(25.1)	(24.5)
Other corporate costs	(0.1)	(0.1)
Net financing costs	(4.7)	(3.2)
Net operating cash flows before capital activity¹	129.7	111.0
Cost of new investments	(281.3)	(63.3)
Investment transaction costs	(3.7)	(1.2)
Net movement of CDF	27.9	(17.8)
Proceeds of capital raisings (net of costs)	190.1	114.9
Dividends paid	(101.8)	(92.8)
Closing cash balance	45.6	84.7
Cash dividend cover	1.3x	1.2x

CORPORATE COSTS	YEAR TO 31 DECEMBER 2019 MILLION	YEAR TO 31 DECEMBER 2019 MILLION
Management fees	(23.4)	(22.7)
Audit fees	(0.3)	(0.3)
Directors' fees	(0.4)	(0.4)
Other running costs	(1.0)	(1.1)
Corporate costs	(25.1)	(24.5)

ONGOING CHARGES RATIO	YEAR TO 31 DECEMBER 2019 MILLION	YEAR TO 31 DECEMBER 2018 MILLION
Annualised Ongoing Charges¹	(25.1)	(24.5)
Average NAV²	2,285.3	2,097.8
Ongoing Charges	(1.10%)	(1.17%)

	31 DECEMBER 2019	31 DECEMBER 2018	MOVEMENT
Weighted Average Government Bond Yield - Portfolio	0.98%	1.83%	(0.85%)
Weighted Average Investment Premium - Portfolio	6.04%	5.43%	0.61%
Weighted Average Discount rate - Portfolio	7.02%	7.26%	(0.24%)
Weighted Average Discount rate - Risk Capital	7.52%	7.55%	(0.03%)
NAV per share	150.6p	148.1p	2.5p

Mike Gerrard	John Le Poidevin
Chairman	Director
8 April 2020	8 April 2020

INCREASE	Risk exposure has increased in the period
DECREASE	Risk exposure has reduced in the period
NO SIGNIFICANT CHANGE	No significant change in risk exposure since last reporting period

RISK				DESCRIPTION	MITIGATION/APPROACH
MACROECONOMIC RISKS
Inflation				Inflation may be higher or lower than expected. Investment cash flows are positively correlated to inflation therefore increases/decreases to inflation compared to current projections would impact positively or negatively on the Company's future projected cash inflows. Negative inflation (deflation) will reduce the Company's future cash flows in absolute terms. The Company's portfolio has been developed in anticipation of continued inflation at, or above, the levels used in the Company's valuation assumptions. Where inflation is at levels below the assumed levels, investment performance may be impaired. The level of inflation-linkage across the investments held by the Company varies and is not consistent. Some investments have no inflation-linkage, and some have a geared exposure to inflation. The consequences of higher or lower levels of inflation than that assumed by the Company will not be uniform across its portfolio. The Company is also exposed to the risk of changes to the manner in which inflation is calculated by the relevant authorities.	The Company monitors the effect of inflation on its portfolio through its biannual valuation process. It also provides sensitivities to investors indicating the projected impact on the Company's NAV of a number of alternative inflation scenarios, offering investors an ability to anticipate the likely effects alternative inflation scenarios may have on their investment. The Company uses a long-term view of inflation within its forecasts, benchmarked where possible to independent analysis.
			1
NO SIGNIFICANT CHANGE

Foreign Exchange Movements				The Company indirectly holds part of its investments in entities in jurisdictions with currencies other than sterling, but borrows corporate level debt, reports its NAV and pays dividends in sterling. Changes in the rates of foreign currency exchange are outside the Company's control and may impact positively or negatively on cash flows and valuation.	The Company uses forward foreign exchange contracts to mitigate the risk of short-term volatility in foreign exchange rates on investment returns from overseas investments. These may not be fully effective and rely on the strength of the counterparties to those contracts to be enforceable. The Company monitors the effect of foreign exchange on its portfolio through its biannual valuation process and reports this to investors. The Company also provides sensitivities to investors indicating the projected impact on the NAV of a limited number of alternative foreign exchange scenarios, offering investors an ability to anticipate the likely effects of some foreign exchange scenarios on their investment. We continue to be mindful of the potential for exchange rate volatility in light of international economic and political change, including during the UK's withdrawal from the EU We note a devaluation of sterling against the main currencies (in which non-UK investments are made) would typically have a positive impact on NAV. The opposite would also be true for an increase in the value of sterling.
			2
NO SIGNIFICANT CHANGE

Interest Rates				Changes in market rates of interest can affect the Company in a variety of different ways: Valuation Discount Rate The Company, in valuing its investments, uses a discounted cash flow methodology. Changes in market rates of interest (particularly government bond yields) may directly impact the discount rate used to value the Company's future projected cash flows and thus its valuation. Higher rates will have a negative impact on valuation while lower rates will have a positive impact.	In determining the discount rates used to value its investments, the Company generally uses nominal government bond yields to which specific investment risk premia are added to determine discount rates. The investment risk premia may provide a buffer against rising bond yields assuming market demand for investment is sustained. Where the Company's cash investment inflows are linked to inflation, higher interest rates can often be precipitated by higher inflation expectations, and therefore any inflation-linkage may partly mitigate the effect of interest rate changes.
		3
NO SIGNIFICANT CHANGE

				Corporate Debt Facility The Company has a corporate debt facility that may be drawn from time-to-time. Interest is charged on a floating rate basis, so higher than anticipated interest rates will increase the cost of this facility adversely impacting on cash flow and the Company's valuation.	In the event that the interest rate increases, the Company has the option of repaying its corporate debt facility at any time with minimal notice, providing sufficient funds are available. The maximum facility is £400 million compared to a current investment portfolio valuation of c.£2.4 billion.
				Underlying portfolio considerations Changes in interest rates have potential impacts on the portfolio at underlying investee entity level. Portfolio entities typically choose or can be required to hold various cash balances, including contingency reserves for future costs (such as major lifecycle maintenance or debt service reserves). These are generally held on interest bearing accounts and under the contractual terms applicable to certain investments which in many cases are projected to be held for the long-term. The Company assumes that it will earn interest on such deposits over the long-term. Changes in interest rates may mean that the actual interest receivable by the Company is different to that projected. If the Company receives less interest than it projects this will impact cash flows and NAV adversely. Certain assets within the portfolio contain refinancing assumptions. Increases in lending rates available to these projects would have the potential to increase their cost of financing and therefore impact the overall returns from these assets.		As presented in the sensitivity analysis, variations in cash deposit rates have little impact on the Company's NAV. Due to the spread of cash holdings within ring-fenced SPV structures and relatively smaller balances in the SPVs, it is not economically feasible to hedge against adverse deposit rate movements. The Company monitors the effect of historical and projected interest rates on its portfolio through its biannual valuation process and reports this to investors. It also provides sensitivities to investors indicating the projected impact on the Company's NAV of a limited number of alternative scenarios, offering investors an ability to anticipate the likely effects of some deposit interest rate scenarios on their investment. The risk of adverse movements in debt interest rates for unhedged debt within regulated entities is limited through protections provided by the regulatory regime.
	Tax and Accounting			Change in Tax Rates Rates of tax, both in the UK and overseas jurisdictions in which the Company operates, may increase in the future if government policy were to change.		The Company typically incorporates changes in tax rates within its forecast cash flows and NAV once substantively enacted. We have conservatively departed from this approach on this occasion with regard to the UK tax rates following the UK Government's recent corporation tax rate announcements.
	4 NO SIGNIFICANT CHANGE
				Change in tax legislation Changes in tax legislation across the multiple jurisdictions in which the Company has investments can reduce returns impacting on the Company's future cash flow returns and hence valuation (calculated on a discounted cash flow basis). The OECD's Action Plan on Base Erosion and Profit Shifting ('BEPS'), published in 2013, seeks to address perceived flaws in international tax rules. It sets out 15 actions to counter BEPS in a comprehensive and coordinated way. Countries in which the Company invests have been assessing their compliance or otherwise with this guidance.		The diversified jurisdictional mix of the Company's investments may provide some mitigation to tax changes in any one jurisdiction. The Company believes it takes a cautious approach to tax planning. The Board monitors changes in tax legislation and takes advice as appropriate from external, independent, qualified advisers. While the Board and the Company's Investment Adviser seek to minimise the impact of adverse changes in tax requirements, its ability to do so is naturally limited. The Company's Investment Adviser continues to monitor developments relating to tax reform across the jurisdictions in which the Company has operations. Future legislation in response to the OECD proposals, or changes in approach to existing legislation as a consequence of market practice or updated guidance, continue to have the potential to negatively impact the Company.
				Accounting The Company and its portfolio of investments and holding entities form an international group structure. The Group uses long-term cash flow forecasts from its portfolio as part of its valuation process. These cash flow forecasts are dependent upon distribution profiles/cash tax profiles and therefore can fluctuate because of future changes in accounting standards, or challenges to accounting judgements. Therefore, future changes to accounting standards, or changes in interpretation and application of existing standards, have the potential to impact the distributable profits of entities in the portfolio and so the cash flows available to the Group and overall portfolio valuation.		A portion of the Company's income is received in the form of shareholder debt interest income i.e. from pre-tax cash flows and not constrained by distributable profits tests. However, changes in accounting standards or challenges to accounting judgements can potentially have an impact on distributable profits or post-tax cash flows.
	POLITICAL AND REGULATORY RISKS
				The nature of the businesses in which the Company invests exposes it to potential changes in policy and legal requirements. All investments have a public sector infrastructure service aspect and are exposed to political scrutiny and the potential for adverse public sector or political criticism.		Most of the Company's existing investments benefit from long-term service and asset availability-based pricing contracts or regulatory frameworks and the countries in which the Company operates do not tend to have a tradition of penal retrospective legislation. They tend to be long-term supporters of infrastructure and similar investment and recognise the risk of deterring future investment in the event that penal or disproportionate steps are taken in respect of existing contractual engagements.

Political Policy			Change in political policy Political policy and financing decisions may adversely impact either on existing investments, or on the Company's ability to source new investments, at attractive prices or at all. This may impact the Company's reputation. A certain degree of reputational risk exists in this area as policy decisions adversely impacting the Company have the potential to be made as a direct or indirect result of reputational developments seen across the wider sector.	Current global policy practice continues to support the use of private sector capital to finance public infrastructure, despite challenge from some political parties, particularly in the UK, around the role of the private sector in the provision of such services. The Company seeks to maintain strong and positive relationships with its public sector clients where possible. It also has an active relationship with other external stakeholders including investors.
	5
NO SIGNIFICANT CHANGE
			Termination of Contracts Often contracts between public sector bodies and the Company's investment entities contain rights for the public sector to voluntarily terminate contracts in certain situations. While the contracts typically provide for some compensation in such cases, this may be less than required to sustain the Company's valuation, causing loss of value. There have been instances of contracts being voluntarily terminated in the UK (although not affecting the Company).	The Company engages with its public sector clients in developing cost-saving initiatives and seeks to act as a 'good partner' including by focusing on the ESG aspects of its investments. None of the Company's investments have been identified, by any government audit or public sector report, as poor value for money or not in the public interest. The Investment Adviser is a signatory to the Code of Conduct for Operational PFI/PPP contracts in the UK. The voluntary code of conduct sets out the basis on which public and private sector partners agree to work together to make savings in operational PPP contracts. Compensation on termination clauses within such contracts serve to partially mitigate the risk of voluntary termination. Furthermore, in the current financial climate where voluntary termination leads to a requirement to pay compensation, such compensation is likely, in many cases to represent an unattractive immediate call on the public finances for the public sector.
			Nationalisation The UK Labour Party's policy is to nationalise privately owned infrastructure. Despite the recent UK general election results, this risk remains over the medium term.	The Company believes significant compensation would be required in order to enact this policy legitimately within existing contractual arrangements. Therefore, we maintain the view that the Company is defensively positioned in this regard.
Law and regulation 6 NO SIGNIFICANT CHANGE			Change in law or regulation Changes in law or regulation may increase costs of operating and maintaining facilities or impose other costs or obligations that indirectly adversely affect the Company's cash flow from its investments and/or valuation of them.	Some investments maintain a reserve or contingency designed to meet change in law costs and/or have a mechanism to allow some change in law costs (typically building maintenance related) to be passed back to the public sector. There remains the possibility for there to be changes in law or regulation (including for example in relation to climate change , as a result of Brexit) which have the potential to impact costs or obligations of the Company or portfolio projects, which may not be fully capable of mitigation.
OPERATIONAL AND VALUATION RISKS
Asset Performance			Construction For the Company's assets under construction, there is an element of construction risk that takes the form of cost overruns or delays that could impact on investment returns. Of particular note at this time are the implications of Covid-19 on the construction industry and potential consequential impacts on the Company. At this time, it is not possible to fully assess with confidence what the short, medium or long-term impacts of Covid-19 may be on the Company or if these will be negative or positive. Operational Performance Assets in the portfolio contain revenues which are based on the availability of the asset, as well as revenues not solely dependent on availability but also have linkage to other factors including being subject to regulatory frameworks. The entitlement of the Company's PPP and OFTO investments to receive revenues is generally dependent on underlying physical assets remaining available for use and continuing to meet certain performance standards. Failure to maintain assets available for use or operating in accordance with pre-determined performance standards may dis-entitle (wholly or partially) the continued receipt of income that the Company has projected to receive. Two of the Company's investments are subject to regulatory regimes which are designed by the regulators to, among other things, protect the interests of consumers whilst ensuring that regulated companies are able to earn a reasonable return on their capital. Changes in the regulatory regimes have the potential to impact the returns of the Company's two regulated assets.	Contractual mechanisms allow for significant pass-down of construction cost overrun and delay risk to sub-contractors and/or consumers, subject to credit risk (see below). The Company's investment in Tideway benefits from a government support mechanism which ultimately backstops investors' downside risk in the event of a major construction cost overrun. The Board reviews underlying investment performance of each investment, quarterly, allowing asset performance to be monitored. Historically, the Company has seen very high levels of asset performance, which suggests a positive trend for the future. For regulated assets, the regulatory regimes under which the assets operate provide a level of protection of cash flows for these assets. Contractual mechanisms and underlying regulatory frameworks also allow for significant pass-down of unavailability and performance risk to sub-contractors in many cases, subject to credit risk (see below). In addition, investments in regulated assets are considered very long-term, beyond any individual regulatory cycle. This long-term view of such assets takes into account the robustness of yield as well as potential for increases in the regulated asset base over time.
		7
NO SIGNIFICANT CHANGE

OPERATIONAL AND VALUATION RISKS CONTINUED
Counterparty Risk		The Company's investments are dependent on the performance of a series of counterparties to contracts including public sector bodies, consortium partners, construction contractors, facilities management and maintenance contractors, asset and investment managers (including the Investment Adviser), banks and lending institutions and others. Failure by one or more of these counterparties to perform their obligations fully or as anticipated could adversely affect the performance of affected investments. There may be disruption or delay to the services provided to investments, or replacement counterparties (where they can be obtained) may only be obtained at a greater cost. These risks would negatively impact the Company's cash flows and valuation. Over recent years there has been particular pressure on construction and facilities management firms operating across the sector, particularly within the UK. Where borrowings exist in respect of the Company's investments, interest rates are generally fixed through the use of interest rate swaps. The Company is therefore exposed if the counterparties of these swaps were to default or the swaps otherwise become ineffective.	The Company has a broad range of suppliers and believes that supplier counterparty risk is diversified across its investments. All contracts include the provision of a security package from counterparties to mitigate the impact of supplier failure. In addition, generally payments are made in arrears to service providers giving the Company some protection against failures in performance. CovidOVID-19 can potentially lead to a greater pressure on the facilities management sector, however the recent government announcements to support businesses are encouraging and should help mitigate the risk of counter party defaults. The credit quality of supplier counterparties is reviewed as part of the Company's due diligence at the time of making its investments and for key supplies on a regular basis. Most of the services provided to the Company's investments are reasonably established with competing providers. Therefore, there are expectations that there will be a pool of potential replacement supplier counterparties in the event that a service counterparty fails, albeit not necessarily at the same cost. The Company closely monitors the risk of adverse developments occurring in relation to its significant counterparties, and develops contingency plans as appropriate to ensure risk of counterparty failure is minimised. Information regarding relevant counterparty risk developments during the year can be found on pages 21-23. The credit risk of such swap counterparties is considered at the time of entering into these arrangements and is regularly reviewed. However, there is a risk of credit deterioration which could impact affected investments. The Company continues to aim to use reputed financial institutions with good credit ratings.
	8
NO SIGNIFICANT CHANGE

OPERATIONAL AND VALUATION RISKS CONTINUED
Physical Asset Risk		The Company indirectly invests in physical assets used by the public and thus is exposed to possible risks, both reputational and legal, in the event of damage or destruction to such assets and their users, including loss of life, personal injury and property damage. While the assets the Company invests in benefit from insurance policies, these may not be effective in all cases. Climate change Investments may be subject to extreme weather and changes in precipitation and temperature, all of which may result in physical damage to assets.	The Company's investments benefit from regular risk reviews and external insurance advice which is intended to ensure that those assets continue to benefit from insurance cover that is standard for such assets. The Company continues to strengthen its climate change considerations and processes throughout the investment cycle.
	9
NO SIGNIFICANT CHANGE

Contract Risk		The performance of the Company's investments is dependent on the complex set of contractual arrangements specific to each investment continuing to operate as intended. The Company is exposed to the risk that such contracts do not operate as intended, are incomplete, contain unanticipated liabilities, are subject to interpretation contrary to its expectations or otherwise fail to provide the protection or recourse anticipated.	Such contracts have been entered into, usually, only after lengthy negotiations and with the benefit of external legal advice. A legal review of contract documentation is undertaken as part of the Company's due diligence at the time of making new investments. See Political Policy on page 49 for further commentary on contractual risk of voluntary termination.
	10
NO SIGNIFICANT CHANGE

Financial Forecasts		The Company's projections depend on the use of financial models to calculate its future projected investment returns. These are in turn dependent on the outputs from other financial model forecasts at the underlying investment entity level. There may be errors in any of these financial models, including calculation errors, incorrect assumptions, programming, logic or formulaic errors and output errors. Once corrected, such errors may lead to a revision in projected cash flows and thus impact valuation. Recent investments in operating infrastructure businesses that can result in more variability in performance than contracted concessions special purpose companies, are inherently more difficult to forecast accurately given the wider range of variables that apply.	Financial forecasts are generally subject to model audit by external accountancy firms, which is a process designed to identify errors. The comparison of past actual performance of investments against past projected performance also gives confidence in financial models where actual performance has closely matched projected performance. However, there can be no assurance that forecast results will be realised, particularly in relation to operational infrastructure businesses where more variables can impact forecast results. Investments in regulated business are considered very long-term, beyond the much shorter regulatory cycles. Valuations of such business should take into account robustness of yield and potential for increases in regulated asset base over time.
	11
NO SIGNIFANT CHANGE

POSITION	2020 FEE P.A. £	2019 FEE P.A. £
Board Chair	86,800	85,000
Audit and Risk Committee Chair	59,200	58,000
Director (Independent and Non-Independent)	45,900	45,000
Senior Independent Director¹	£2,000	£2,000
Risk Sub-Committee Chair¹	£2,000	£2,000
Management Engagement Committee Chair¹	£2,000	£2,000
Nomination & Remuneration Committee Chair¹	£2,000	£2,000

DIRECTOR	2019 FEES PAID £	2018 FEES PAID £
Mike Gerrard	85,000	21,683
Julia Bond¹	48,666	43,000
John Le Poidevin	58,000	46,000
John Stares²	45,333	43,000
Claire Whittet	47,000	43,000
John Whittle	47,000	49,000
Giles Frost³	45,000	43,000

DIRECTOR	31 DECEMBER 2019 NUMBER OF ORDINARY SHARES¹	31 DECEMBER 2018 NUMBER OF ORDINARY SHARES¹
Mike Gerrard	136,851	55,739
Julia Bond	43,014	14,020
John Le Poidevin	130,350	97,883
John Stares	75,000	75,000
Claire Whittet²	71,134	69,602
John Whittle³	58,864	58,864
Giles Frost⁴	917,833	893,797

DIRECTORS	QUARTERLY BOARD	AUDIT AND RISK COMMITTEE	INVESTMENT COMMITTEE	MANAGEMENT ENGAGEMENT COMMITTEE	NOMINATION AND REMUNERATION COMMITTEE
Maximum number	4	5	2	1	3
Mike Gerrard²	4	N/A	1	1	3
Julia Bond	4	4	-	1	2
John Le Poidevin	4	5	2	1	3
John Stares	4	5	1	1	3
Claire Whittet	4	4	2	1	3
John Whittle	4	4	2	1	3
Giles Frost³	4	N/A	N/A	N/A	N/A

NAME OF HOLDER	% ISSUED CAPITAL	NO. OF ORDINARY SHARES	DATE NOTIFIED
Investec Wealth & Investment Ltd	12.00%	168,673,159	5 September 2018

Risk	Misstatement or manipulation of investment fair value £2,383 million (2018: 2,097 million) " Investments comprise a portfolio of assets measured at fair value through profit or loss. The fair values of these investments are determined using the income approach which discounts the expected cash flows at a rate appropriate to the risk profile of each investment. In determining the discount rate, the relevant long-term government bond yields, specific investment risks and the evidence of recent transactions are considered. Details of the valuation process and key sensitivities are provided in note 11 of the financial statements and are discussed in the strategic report - "operating review" and "continuous risk management" sections. The valuation risk includes the risk of an inappropriate valuation model being applied, the risk of manipulation or error in both the assumptions applied and the amount and timing of expected cash flows.
Our response to the risk	Test of Controls: We have tested the effectiveness of controls in operation over investment acquisitions, valuation, forecasting cashflows and distributions and placed reliance on control over these processes. Verification of existence and ownership of Investments: We have tested, on a sample basis, the existence and ownership of investments to ensure the Group is entitled to distributions from the investments. Valuation assumptions: We have been supported in our testing of macro economic inputs and discount rates by specialists from our EY Valuation & Business Modelling ('EYVBM') team. We selected a sample of investments that cover specific risks identified. The following procedures were performed: Macroeconomic Inputs: We tested that the macroeconomic inputs (inflation rates, foreign exchange rates, deposit rates and tax rates) reviewed by our EY VBM team were applied consistently and accurately in the selected models. Discount Rates: We engaged our EYVBM specialists to test the discount rates used in the selected models. Model integrity: We reviewed management controls including management's use of third party audits of the initial model and analysis of yields. We engaged our EYVBM specialists to test the changes to the logical operation on the selected models. We have compared the model used to determine the year end valuation to the most recent model that was audited or was reviewed as a part of previous audit work. Model inputs: We agreed a sample of contractual cashflows to contractual agreements and actual cashflows. We engaged EYVBM specialists to assess the assumptions used to determine the underlying variable cash flows which require significant judgement. Their assessment was based on a combination of market data and experience of valuing other similar investments. For an extended sample, we tested that the macroeconomic inputs (inflation rates, foreign exchange rates, deposit rates and tax rates) reviewed by our EYVBM team were applied consistently and accurately to the models. We performed the following procedures across the whole portfolio: - We reviewed the changes in discount rate of the assets in INPP's portfolio by analysing the components of the discount rate build up approach adopted by management. Any material movements in the components were discussed/challenged with management and explanations obtained were corroborated with appropriate evidence. - We have performed a detailed analytical review based on year on year movement on each investment and validating significant variances from expectation. - We tested the historical accuracy of forecasting by comparing the historical forecast distributions from the projects to the actual distributions. Acquisitions: We tested all acquisitions during the year, reviewing the key transaction documents, including share purchase agreements and agreeing the consideration paid to bank statements. There were no disposals during the year. Market Review: We engaged EYVBM specialists to provide benchmarking information on the variable components e.g. inflation rates, risk free rates, deposit rates etc.
Key Observations communicated to the Audit Committee	We confirmed that there were no material matters arising from our audit work that we needed to bring to the attention of the Audit Committee. We confirmed that the valuation of the investments is fairly stated and was in line with IFRSs as adopted by the European Union.
Risk	Income recognition Income primarily comprises of the dividend and interest income stream (i.e. distributions) generated by the investments held in underlying consolidated subsidiaries. Management may seek to overstate income as a result of seeking to report the desired level of return to investors.
Our response to the risk	We updated our understanding of the Group's processes and policies for income recognition including our understanding of the systems and controls implemented. We reviewed minutes of board meetings during the year to ensure dividends declared have been recognised and checked bank statements to ensure any dividends paid have also been recognised. We compared the actual distributions received in 2019 to the forecast made at the end of 2018 to test the completeness of distributions. We agreed a representative sample of dividend and interest receipts to documentation from underlying project entities and we checked the calculation of interest amounts and the allocation thereof to the appropriate period. We have performed cut off and completeness testing to conclude on accuracy.
Key Observations communicated to the Audit Committee	We confirmed that there were no matters to bring to the attention of the Audit Committee.
Risk	Going Concern (including potential impact of Covid-19) Since the balance sheet date there has been a global Covid-19 pandemic which continues to affect all businesses across the world in different ways. The governments of the countries affected have designed measures to mitigate the resulting adverse economic impact of this pandemic. There is a risk that this Covid-19 pandemic may impact some infrastructure investment activity in the short to medium term, and lead to issues with asset performance (e.g staff shortages, supply chain breakdowns) which impacts Going Concern. There is also a risk that management has not appropriately disclosed the impact of Covid-19 in the financial statements.
Our response to the risk	We obtained an understanding of the process followed by management to make its going concern assessment and assessment of the impact of Covid-19. We reviewed the underlying project cashflows to ensure there are no unidentified or undisclosed events that could have an impact on the forecasts. We challenged management on the appropriateness of the key assumptions and considered their reasonableness in the context of other supporting evidence gained from our audit work. We reviewed corporate level cash flows including management's ability to access future financing. We performed testing to evaluate whether the covenant requirements of the corporate debt facility would be met under all base and stress scenarios. We performed back testing on the historical accuracy of management's cash flow forecasts. We evaluated the appropriateness of management's stress test scenarios and their impact on the cashflow/liquidity position. We performed our own scenario analysis using a number of alternative assumptions to assess the reasonableness of management's assessment. We obtained supporting evidence to assess the appropriateness of mitigation plans in relation to management's Covid-19 risk assessment. We reviewed minutes of board meetings with a view to identifying any matters which may impact the going concern assessment. We ensured the disclosures in the financial statements in relation to Covid-19 adequately disclose the risk, impact on the group and mitigation actions adopted.
Key observations communicate to the Audit Committee	We confirm that the matter has been appropriately evaluated and reflected in the financial statements.

	Notes	Year ended 31 December 2019 £'000s		Year ended 31 December 2018 £'000s
Interest income	4	76,405		71,201
Dividend income	4	48,181		32,018
Net change in investments at fair value through profit or loss	4	44,132		63,826
Total investment income		168,718		167,045
Other operating income	5	4,797		622
Total income		173,515		167,667

Management costs	17	(24,537)		(22,798)
Administrative costs		(1,568)		(1,520)
Transaction costs	6, 17	(4,221)		(957)
Directors' fees		(386)		(359)
Total expenses		(30,712)		(25,634)
Profit before finance costs and tax		142,803		142,033

Finance costs	8	(5,053)		(3,944)
Profit before tax		137,750		138,089

Tax credit	9	418		280
Profit for the year		138,168		138,369

Earnings per share
From continuing operations
Basic and diluted (pence)	10	9.17	9.75

	NOTES	SHARE CAPITAL and share premium	OTHER DISTRIBUTABLE RESERVE	RETAINED EARNINGS	TOTAL
		£'000s	£'000s	£'000s	£'000s
Balance at 31 December 2018		1,560,243	182,481	456,023	2,198,747

Total comprehensive income		-	-	138,168	138,168

Issue of Ordinary shares	15	195,553	-	-	195,553
Issue costs applied to new shares	15	(1,956)	-	-	(1,956)
Dividends in the year	15	-	-	(105,273)	(105,273)
Balance at 31 December 2019		1,753,840	182,481	488,918	2,425,239

	NOTES	31 DECEMBER 2019 £'000S	31 DECEMBER 2018 £'000S
Non-current assets
Investments at fair value through profit or loss	11	2,382,645	2,097,468
Total non-current assets		2,382,645	2,097,468
Current assets
Other financial costs	11, 13	31,150	25,234
Cash and cash equivalents	11	45,610	84,718
Derivative financial instruments	11	4,161	-
Total current assets		80,921	109,952
Total assets		2,463,566	2,207,420

Current liabilities
Trade and other payables	11, 14	10,471	8,366
Derivative financial instruments	11	-	307
Total current liabilities		10,471	8,673
Non-current liabilities
Bank loans	8, 11	27,856	-
Total non-current liabilities		27,856	-
Total liabilities		38,327	8,673
Net assets		2,425,239	2,198,747

Equity
Share capital and share premium	15	1,753,840	1,560,243
Other distributable reserve	15	182,481	182,481
Retained earnings	15	488,918	456,023
Equity attributable to equity holders of the parent		2,425,239	2,198,747
Net assets per share (pence per share)	16	150.6	148.1

					Year ended 31 December 2019
			UK £'000s	Europe (EXCL. UK) £'000s			North America £'000s		Australia £'000s		Total £'000s
	Segmental results
	Dividend and interest income		94,707	7,674			8,795		13,410		124,586
	Fair value gain on investments		26,442	11,324			2,102		4,264		44,132
	Total investment income		121,149	18,998			10,897		17,674		168,718
	Reporting segment profit¹		85,803	22,242			11,429		18,694		138,168
	Segmental financial position
	Investments at fair value		1,755,755	321,337			105,001		200,552		2,382,645
	Current assets		80,921	-			-		-		80,921
	Total assets		1,836,676	321,337			105,001		200,552		2,463,566
	Total liabilities		(38,327)	-			-		-		(38,327)
	Net assets		1,798,349	321,337			105,001		200,552		2,425,239
					Year ended 31 December 2018
		UK £'000s				Europe (EXCL. UK) £'000s		North America £'000s		Australia £'000s		Total £'000s
Segmental results
Dividend and interest income		76,463				6,907		8,521		11,328		103,219
Fair value gain on investments		30,184				23,485		6,298		3,859		63,826
Total investment income		106,647				30,392		14,819		15,187		167,045
Reporting segment profit¹		77,348				30,887		14,570		15,564		138,369
Segmental financial position
Investments at fair value		1,496,423				290,406		103,767		206,872		2,097,468
Current assets		109,952				-		-		-		109,952
Total assets		1,606,375				290,406		103,767		206,872		2,207,420
Total liabilities		(8,673)				-		-		-		(8,673)
Net assets		1,597,702				290,406		103,767		206,872		2,198,747

Full Year Results for the 12 Months to 31 Dec 2019

Important Information

Companies

UK 100

Latest directors dealings

	Year ended 31 December 2019 £'000s	Year ended 31 December 2018 £'000s

Fair value gain on foreign exchange contracts	4,468	1,397
Other gains / (losses) on foreign exchange movements	329	(775)
Total other operating income	4,797	622

	Year ended 31 December 2019 £'000s	Year ended 31 December 2018 £'000s
Investment advisory costs	4,221	935
Legal and professional costs	-	22
Total transaction costs	4,221	957

	Year ended 31 December 2019 £'000s	Year ended 31 December 2018 £'000s
Fees payable to the Group's auditor for the audit of the Group's financial statements	304	304

Fees payable to the Group's auditor and their associates for other services to the Group
- The audit of the Group's consolidated subsidiaries	46	46
- The audit of the Group's unconsolidated subsidiaries	111	111
Total audit fees	461	461
Other fees
- Audit related assurance services	11	11
- Other services	24	42
Total non-audit fees	35	53

	Year ended 31 December 2019 £'000s	Year ended 31 December 2018 £'000s
Current tax:
UK corporation tax credit - current year	(521)	(412)
UK corporation tax - prior year	23	-
Other overseas tax - current year	106	82
Other overseas tax - prior year	(26)	50
Tax credit for the year	(418)	(280)

	Year ended 31 December 2019 £'000s	Year ended 31 December 2018 £'000s
Earnings for the purposes of basic and diluted earnings per share being net profit attributable to equity holders of the parent	138,168	138,369
	Number	Number
Weighted average number of Ordinary shares for the purposes of basic and diluted earnings per share	1,506,701,793	1,418,962,119
Basic and diluted (pence)	9.17	9.75

	31 December 2019 £'000s	31 December 2018 £'000s
Financial liabilities at amortised cost
Trade and other payables	10,471	8,366
Bank loans	27,856	-
Derivative financial instruments
Foreign exchange contracts	-	307
Total financial liabilities	38,327	8,673

	31 December 2019 £'000s	31 December 2018 £'000s
Cash
Euro	2,951	2,555
Canadian dollar	654	1,184
Australian dollar	1,623	97
US Dollar	664	1,227
	5,892	5,063
Current receivables
Euro receivables	124	1,454
US dollar receivables	539	183
	663	1,637
Investments at fair value through profit or loss
Euro	321,337	290,406
Canadian dollar	39,911	38,163
Australian dollar	200,552	206,872
US dollar	65,090	65,604
	626,890	601,045
Total	633,445	607,745

31 december 2019	UK	Europe (Excl. UK)	North America	Australia
Inflation	2.75% RPI, 2.00% CPIH	2.00%	2.00%	2.50%
Long-term tax	19.00%	12.50%-32.28%	23.00% -26.50%¹	30.00%
Foreign exchange rates	N/A	1.13	1.37-1.80	1.92
Long-term deposit rates	2.00%	2.00%	2.50%	3.00%
31 december 2018	UK	Europe (Excl. UK)	North America	Australia
Inflation	2.75% RPI, 2.00% CPIH	2.00%	2.00%	2.50%
Long-term tax	19.00%-17.00%	12.50%-29.58%	26.50% -27.00%¹	30.00%
Foreign exchange rates	N/A	1.05	1.34-1.80	1.88
Long-term deposit rates	2.00%	2.00%	2.00%	3.00%

Valuation ASSUMPTIONS	31 December 2019	31 December 2018	Movement
Weighted Average Government Bond Yield	0.98%	1.83%	(0.85%)
Weighted Average Investment Risk Premium	6.04%	5.43%	0.61%
Weighted Average Discount Rate	7.02%	7.26%	(0.24%)

Weighted Average Discount Rate on Risk Capital¹	7.52%	7.55%	(0.03%)

Reconciliation of Level 3 fair value measurements of financial assets:	31 DECEMBER 2019	31 DECEMBER 2018
Balance at 1 January	2,097,468	2,005,292
Additional investments during the year	281,286	63,293
Net repayments during the year	(40,241)	(34,943)
Net change in investments at fair value through profit or loss	44,132	63,826
Balance at 31 December	2,382,645	2,097,468