Investment entity, IFRS 12 paras 19A-19G, unconsolidated subsidiaries, restrictions, support

3i Infrastructure plc – Annual report – 31 March 2021

Industry: investments

Significant accounting policies (extract)

A Classification (extract)

(i) Subsidiaries – Subsidiaries are entities controlled by the Company. Control exists when the Company is exposed, or has rights, to variable returns from its involvement with the subsidiary entity and has the ability to affect those returns through its power over the subsidiary entity. In accordance with the exception under IFRS 10 Consolidated Financial Statements, the Company only consolidates subsidiaries in the Financial statements if they are deemed to perform investment-related services and do not meet the definition of an investment entity. Investments in subsidiaries that do not meet this definition are accounted for as Investments at fair value through profit or loss with changes in fair value recognised in the Statement of comprehensive income in the year. The Directors have assessed all entities within the structure and concluded that 3i Infrastructure Seed Assets GP Limited was the only subsidiary of the Company that provides investment-related services or activities. In prior years this subsidiary was consolidated with the Company to form ‘the Group’. 3i Infrastructure Seed Assets GP Limited was dissolved during the financial year to 31 March 2020.

19 Unconsolidated subsidiaries and related undertakings

The list above comprises the unconsolidated subsidiary undertakings of the Company as at 31 March 2021.

There are no current commitments or intentions to provide financial or other support to any of the unconsolidated subsidiaries, including commitments or intentions to assist the subsidiaries in obtaining financial support except for those disclosed in Note 16 (2020: none). No such financial or other support was provided during the year (2020: none).

There are no significant restrictions on the ability of any of the unconsolidated subsidiaries to transfer funds to the Company in the form of cash dividends or to repay loans or advances made to the unconsolidated subsidiaries.

Oystercatcher Luxco 2 S.à r.l. has total borrowings of €228 million or £194 million (2020: €227 million, £201 million). These consist of three euro denominated term loans (EUR Private Placement (‘PP’) tranches) totalling €183 million or £156 million and a Singapore dollar denominated term loan (SGD PP tranche) of SGD 71 million or £38 million. The EUR and SGD PP tranches are with financial institutions.

The three EUR PP tranches are repayable between March 2026 and December 2027 and the SGD PP tranche in March 2029. The facilities have certain loan covenants including interest cover ratios and a leverage ratio which may restrict the future payment of cash dividends from the subsidiary. RBC Europe Ltd, as security agent, has security over the equity investments held by Oystercatcher Luxco 2 S.à r.l. The value of this security at 31 March 2021 was £347 million (2020: £347 million).

16 Commitments

As at 31 March 2021, the Company was committed to investing a further US$38 million (£27 million) (2020: US$38 million, £30 million) of loan commitment in the India Fund. This commitment is not expected to be drawn. In addition, the Company committed to invest a further DKK 100 million (£11 million) in ESVAGT.