Overview and strategy
Chair’s statement	2
At a glance	4
Chief Executive’s statement	6
Our thematic approach to investment	12
Our business model	14
Our long-term, responsible approach	16
Strategic objectives and Key performance indicators	18
Business review
Private Equity	21
Infrastructure	34
Scandlines	38
Sustainability
A responsible approach	40
1. Invest responsibly	42
2. Recruit and develop a diverse   pool of talent	52
3. Act as a good corporate citizen	56
Our TCFD disclosures	58
Performance and risk
Financial review	70
Reconciliation of Investment basis and IFRS	75
Alternative Performance Measures	79
Risk management	80
Principal risks and mitigations	85
Directors’ duties under Section 172	94

Governance
Chair’s governance review	97
Governance at a glance	98
Corporate governance statement	99
Governance framework	101
Board of Directors	102
Executive Committee	104
The role of the Board	106
How the Board operates	107
What the Board did in FY2024	108
Engaging with stakeholders	110
Board performance review	114
Nominations Committee report	116
Audit and Compliance Committee report	122
Resilience statement	128
Valuations Committee report	131
Directors’ remuneration report	136
Additional statutory and corporate governance information	150
Audited financial statements
Consolidated statement of comprehensive income	157
Consolidated statement of financial position	158
Consolidated statement of changes in equity	159
Consolidated cash flow statement	160
Company statement of financial position	161
Company statement of changes in equity	162
Company cash flow statement	163
Material accounting policies	164
Notes to the accounts	168
Independent Auditor’s report	203
Portfolio and other information
20 large investments	215
Portfolio valuation – an explanation	217
Information for shareholders	218
Glossary	220

For definitions of our financial terms used throughout this report, please see our Glossary on pages 220 to 222.

Disclaimer

The Annual report and accounts have been prepared solely to provide information to shareholders. They should not be relied on by any other party or for

any other purpose.

The Strategic report on pages 1 to 95, the Directors’ report on pages 96 to 135 and 150 to 155, and the Directors’ remuneration report on pages 136 to

149 have been drawn up and presented in accordance with and in reliance upon UK company law and the liabilities of the Directors in connection with

those reports shall be subject to the limitations and restrictions provided by that law. This Annual report may contain statements about the future,

including certain statements about the future outlook for 3i Group plc and its subsidiaries (“3i” or “the Group”). These are not guarantees of future

performance and will not be updated. Although we believe our expectations are based on reasonable assumptions, any statements about the future

outlook may be influenced by factors that could cause actual outcomes and results to be materially different.

We generate attractive returns for

our shareholders and co-investors

by investing in private equity and

infrastructure assets.

As proprietary capital investors,

we have a long-term, responsible

approach.

We aim to compound value through

thoughtful origination, disciplined

investment and active management

of our assets, driving sustainable

growth in our investee companies.

For more information

and regular updates

www.3i.com

3i Group plc | Annual report and accounts 2024 1

Driving resilient growth

in our portfolio companies

Our strong result in FY2024 reflects another year

of thoughtful and careful allocation of capital and

active asset management of our portfolio companies.

Performance highlights

2,085p

NAV per share

(31 March 2023: 1,745 p)

23%

Total return on equity

( 2023: 36% )

61.0p

Dividend per share

( 2023: 53.0p)

David Hutchison

Chair

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Chair’s statement

3i Group plc | Annual report and accounts 2024 2

3i delivered a strong result in FY2024,

underpinned by another year of excellent

performance from Action and overall resilient

performance from the wider portfolio,

which continues to operate well through

a challenging macro-economic environment

and geopolitical uncertainty.

Performance

I am pleased to report that 3i delivered a strong set of results in the

financial year to 31 March 2024 (“FY2024 ”), with a total return

of £ 3,839 million ( 2023 : £4,585 million). Net asset value (“NAV”)

increased to 2,085 pence per share (31 March 2023: 1,745 pence per

share) and our total return on opening shareholders’ funds was

23%  (2023: 36%). Action delivered another year of strong performance

and was the major driver of the Group’s FY2024 result. The remaining

portfolio saw bifurcated performance, with a number of our portfolio

companies delivering a strong contribution, more than offsetting

those that saw weaker performance.

Market environment

The global economy saw a very modest recovery in 2023, as the

macro-economic environment and geopolitical landscape remained

fragile. Whilst inflation has started to moderate, consumer sentiment

remains quite strained, with a continued focus on affordability. These

trends have supported growth from our value-for-money and private

label portfolio companies in the year. Action’s remarkable growth

story continued in 2023, as the business once again generated

sector-leading results across its key performance indicators and

increased its store presence across Europe. We increased our

exposure to these returns, through the allocation of further 3i capital

into Action in FY2024.

We have also seen an encouraging recovery in the healthcare market

and our Infrastructure portfolio continued to trade robustly overall,

generating strong recurring yields. Our discretionary consumer

businesses remained under pressure and some of our more cyclical

businesses continued to experience weaker end-markets.

The global M&A market was subdued in 2023, impacted by

unfavourable financing conditions and pricing misalignment between

vendors and buyers. Against this backdrop, we have continued to

assess new investments and explore potential exits but have

remained disciplined in deploying or realising capital where we

believe valuations are not reflective of intrinsic business value. As a

result, our activity in the year focused primarily on reinvesting our

capital into some of our existing portfolio companies, and refinancing

some of our existing portfolio companies at attractive terms. We also

continued to accelerate growth in some of our portfolio companies

by acquisition.

Dividend

Our dividend policy is to maintain or grow the dividend year on

year, subject to the strength of our balance sheet and the outlook

for investments and realisations. Cash generation remains strong

and in FY2024, we generated cash inflows of £1.4 billion from our

portfolio companies. During the year, we successfully issued a six-

year €500 million bond at a coupon of 4.875%, further

strengthening our liquidity profile.

In line with the Group’s policy and in recognition of the Group’s

financial performance, the Board recommends a second FY 2024

dividend of 34.5 pence (2023: 29.75 pence), subject to shareholder

approval, which will take the total dividend to 61.0 pence (2023:

53.0 pence). Based on this recommended dividend and expected

payment in July 2024, we will have returned £3.8 billion to shareholders

in dividends since our restructuring was announced in June 2012,

growing our total dividend by an average compound annual growth

rate of 18% over this period.

Board and people

As announced last year, Caroline Banszky retired from our Board

after our 2023 Annual General Meeting (“AGM”) and was succeeded

by Stephen Daintith as Audit and Compliance Committee Chair.

Stephen, who is CFO of Ocado Group plc, has a wealth of financial

and operating experience, and knowledge that he brings to the role.

Environmental, Social, and Governance (“ESG”)

We made good progress across our ESG agenda in FY2024, and

particularly on our climate change approach and strategy. We are

reporting for the first time in alignment with the Task Force for Climate-

related Financial Disclosures (“TCFD”) recommendations, in

compliance with FCA requirements, including aggregate portfolio

emissions. We are also pleased to announce that our near-term

science-based emissions reduction targets (“science-based targets”)

were approved by the Science Based Targets initiative (“SBTi”) in

March 2024 and our teams have now started to work to meet these

targets over the coming years.

Outlook

In the near term, we expect our investment and realisation activity

to reflect our cautious view on the M&A market and wider macro-

economic environment. We will only deploy capital and realise assets

when we feel we are achieving optimal value for our shareholders.

Trading momentum at the start of FY2025 remains strong at Action,

whilst a number of our other assets are well positioned to continue to

grow despite the uncertain macro-economic outlook.

David Hutchison

Chair

8 May 2024

Alternative Performance Measure (“APM”)

3i prepares its statutory financial statements in accordance with UK-adopted international accounting standards. However, we also report a non-GAAP “Investment basis”

which we believe aids users of our report to assess the Group’s underlying operating performance.

The Investment basis is an APM and is described on page 75. Total return, which is defined as Total comprehensive income for the year and net assets are the same under the

Investment basis and IFRS and we provide a reconciliation of our Investment basis financial statements to the IFRS statements from page 76.

We assess our performance using a variety of measures that are not specifically defined under IFRS and are therefore termed APMs. These include: Gross investment return (“GIR”)

as a percentage of opening value, cash realisations, cash investment, operating cash profit, net (debt)/cash and gearing. These APMs are referred to throughout the report and their

purpose, calculation and reconciliation to IFRS can be found on page 79.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Chair’s statement continued

3i Group plc | Annual report and accounts 2024 3

3i is an investment company specialising in Private

Equity and Infrastructure. We invest in mid-market

companies headquartered in Europe and North America.

3i Group investment

portfolio value

as at 31 March 2024

Private Equity £ 19.6 bn Infrastructure £ 1.5 bn Scandlines £0.5 bn

£21.6 bn

( 2023 : £ 18.4bn)

Total assets under management as at 31 March 2024
			Private Equity £27.5bn	Infrastructure £ 6.7 bn	Scandlines £0.5 bn
		£34.7 bn ( 2023 : £ 29.9 bn)

3i Group

investment

portfolio value

as at 31 March 2024

87% of the portfolio is exposed to the value-for-money, infrastructure and healthcare sectors.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

At a glance

3i Group plc | Annual report and accounts 2024 4

	Private Equity
	What we do Our Private Equity business is funded principally from our proprietary capital, with some funding from co-investors for selected assets. Its principal focus is to generate attractive capital returns.		Sectors Our Private Equity business invests in companies with an enterprise value of typically €100 million to €500 million at acquisition in our core investment markets of Europe and North America. Our teams invest in the following sectors:
			Consumer	Services
			Healthcare	Software
			Industrial Technology

	Action
	What is Action? Action is the fastest growing non-food discount retailer in Europe. With over 2,600 stores across 12 European countries, Action offers its customers an ever-changing variety of 6,000 products at the lowest possible prices. Our investment in Action Following our initial investment in 2011, we have actively managed Action through its incredible compounding growth story, with the business surpassing the €10 billion revenue milestone for the first time in 2023.		At 31 March 2024, our investment in Action formed 72% of our Private Equity portfolio value. The business has returned over £2.9 billion of proceeds over our hold period. This reinforces our long-term investment horizon for this investment.
Our thematic approach
Our Private Equity and Infrastructure teams invest in businesses supported by long-term structural growth trends

Page 12

Read more about our thematic approach to investment

	Infrastructure
	What we do Our Infrastructure business manages assets on behalf of third-party investors and 3i’s proprietary capital, with the objective of generating attractive capital returns and earning fund management fees and portfolio income for the Group.	Sectors Our Infrastructure business invests across a broad range of economic infrastructure businesses in Europe and North America, in sectors adjacent to:
		Communications	Utilities
		Healthcare	Energy
		Social Infrastructure
		Transport/Logistics

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

At a glance continued

3i Group plc | Annual report and accounts 2024 5

3i delivered

Simon Borrows

Chief Executive

another strong result

The power of Action’s compounding growth

coupled with several other strongly performing

portfolio companies underpins both our FY2024

result, and our conviction in allocating capital

into our existing “winners”.

3i delivered another strong result in

FY2024, against a backdrop of persistent

global macro-economic headwinds and

geopolitical uncertainty.

The shape of today’s 3i portfolio has served

us well in this challenging year and reflects

investment decisions taken over the last

12 years.

Action’s compelling growth story continues

to be a major driver of the Group’s return,

with overall resilient performance across

the remaining portfolio.

Amidst more difficult markets to match

buyers and sellers, we have remained

disciplined in capital deployment,

prioritising reinvestment in our existing

portfolio either directly or through buy-and-

build acquisitions, whilst receiving good

proceeds and income from some of our

other high-quality portfolio companies.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Chief Executive’s statement

3i Group plc | Annual report and accounts 2024 6

In FY2024, we generated a total return on shareholders’ funds of

£3,839 million, or 23% (2023: £4,585 million, or 36%), ending the

year with a NAV per share of 2,085 pence (31 March 2023: 1,745

pence per share), including a 33 pence per share loss (31 March

2023: 65 pence per share gain) on foreign exchange translation.

Action remains a major driver of our overall result, following

another very strong year of earnings growth, cash generation and

the achievement of a number of important expansion milestones.

We also increased our exposure to Action’s returns in the year by

acquiring further equity in the business and continuing to reduce

the associated carried interest liability.

We have seen resilient performance across the remaining portfolio.

A number of assets operating in the value-for-money and private

label consumer and healthcare sectors delivered strong growth and

some are exhibiting characteristics which could allow them to

compound growth over the longer term. An example of this is

Royal Sanders, which we have now designated as a longer-term

hold asset, following consistent delivery of organic and acquisitive

growth since acquisition (see further details on page 8). Our

stronger performing assets more than offset softer performance

from a number of portfolio companies operating in the

discretionary consumer sector or in sectors that are working

through adverse phases of their market cycles.

Action now has stores across

12 European countries,

following the opening of new

stores in Portugal in Q1 2024.

Pages 22-25

Read more about Action

Our permanent capital, strong balance sheet and disciplined

approach to capital allocation mean that we are under no pressure

to invest or realise when market conditions are unfavourable and

there is misalignment on pricing. This is particularly important in the

current environment of subdued global private equity deal activity,

characterised by a persisting dislocation between private and

public market valuations.

Whilst we continued to build our origination pipeline in FY2024,

we have remained extremely disciplined in considering new

investment, primarily in response to unrealistic vendor

expectations. Instead we focused our capital deployment into

some of our most successful portfolio companies. Our Private

Equity portfolio companies remained acquisitive, completing seven

bolt-on acquisitions, whilst in Infrastructure, 3i Infrastructure plc

(“3iN”) completed further investments in three portfolio companies

and our North American Infrastructure Fund completed three bolt-

on acquisitions.

We generated total realised proceeds and portfolio income of £1.4

billion across our portfolios in FY2024, and in April 2024, we agreed

the sale of nexeye, generating expected exit proceeds of c.€452

million. These exit proceeds, combined with distributions already

received, result in a 2.0x money multiple. Also in early May 2024, we

agreed to invest c.€116 million in a new investment for our Private

Equity portfolio, Constellation, an IT managed services provider

specialised in hybrid cloud and cyber security.

Private Equity performance

In the year to 31 March 2024, our Private Equity portfolio, including

Action, generated a GIR of £4,059 million or 25% on opening value

(2023: £4,966 million, or 40%). Action generated a GIR of £3,718

million, or 33%, on its opening value. In the last 12 months (“LTM”) to

the end of 31 December 2023, 93% of our portfolio companies by

value grew earnings.

Action

Action, the fastest growing non-food discount retailer in Europe and

our largest portfolio company, delivered another step up in

performance in 2023, confirming the relevance of its winning formula

to its customers. Action’s continued focus on ensuring customers

benefit from the lowest prices, as a result of its buying power and

flexibility in its category assortment, saw the business reduce prices

across 42% of its product catalogue in 2023, increasing the price gap

against its competitors.

In the 12 months to 31 December 2023, Action generated net sales of

€11,324 million, 28% ahead of 2022 and like-for-like (“LFL”) sales

growth of 16.7%, mainly as result of an increase in footfall and

transaction volumes. Operating EBITDA was €1,615 million in 2023,

34% ahead of 2022. Action’s improved EBITDA margin of 14.3%

compared to 13.6% in the previous year, reflected its scale benefits

and continuous focus on cost control.

Overview and strategy

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Performance and risk

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Chief Executive’s statement continued

3i Group plc | Annual report and accounts 2024 7

Action achieved a number of milestones in its store expansion

roadmap in 2023. In total, the business added 303 stores in the year,

another store opening record, and surpassed 750 stores in France, 500

in Germany, 300 in Poland, 100 in Austria and 50 in Italy. Action also

entered Slovakia, its eleventh country and a new expansion market,

with 15 new stores at the end of 2023. Action’s youngest roll-out

markets, Poland and the Czech Republic, and newly entered markets

Italy, Spain and Slovakia, are all showing strong trading, providing

sizeable expansion opportunities. Action’s expertise in store roll-outs,

efficient operations and dedicated resourcing means it can accelerate

its ability to grow a significant store network after the pilot phase. In

February 2024, Action entered Portugal, its twelfth country, with three

stores opened to the end of March 2024. At the end of Action’s P3

2024 (which ended on 31 March 2024), Action had 2,608 stores across

12 countries. Action’s estimate of additional white space potential in

existing and identified, in-scope countries is c.4,700 stores, and

includes extending to Switzerland and Romania in 2025.

Action continues to optimise its storage and distribution channels to

ensure it can serve its vast and rapidly growing store network. In 2023,

the business opened two further distribution centres, in France and

Poland, growing its distribution centre network to 13 across Europe.

Action continues to make good progress in delivering its

Sustainability Programme, which is focused on the four pillars of

people, planet, product and partnerships. It has continued to

develop its employees, to improve the sustainability of its products

and supply chain, to reduce its Scope 1 and 2 emissions and to

expand its community partnerships. Importantly, it has measured its

Scope 3 emissions and has committed to set science-based targets.

For further details on Action’s sustainability progress, see page 46.

Action’s conversion of EBITDA to free cash flow is very strong,

achieving 104% in 2023, as a result of particularly strong sales in the

last quarter of 2023, and contributing to significant deleveraging over

the course of the year. This, coupled with its remarkable growth,

positioned the business well for its debut US dollar term loan

issuance in the US leveraged loan market in October 2023. The issue

was oversubscribed, with Action raising $1.5 billion at very attractive

pricing. In October 2023, Action also completed a capital

restructuring with a pro-rata redemption of shares. 3i used £455

million of the £762 million gross proceeds from the share redemption

to acquire further shares in Action, increasing our gross equity stake

from 52.9% to 54.8%.

In addition, Action made two dividend distributions to all

shareholders, in December 2023 and March 2024, returning £375

million to 3i. This means that 3i received over £1.1 billion of cash from

Action in FY2024. Cumulatively, since we first invested in 2011, Action

has returned over £2.9 billion to 3i, and the potential for future

distributions is considerable. After paying the dividends, Action had a

cash balance of €558 million as at 31 March 2024 and a net debt to

run-rate earnings ratio of 2.2x.

At 31 March 2024, we valued our 54.8% stake in Action at £14,158

million. This valuation reflects the continued strong growth in Action’s

LTM run-rate EBITDA, its low leverage and an unchanged LTM run-

rate EBITDA valuation multiple of 18.5x, net of the liquidity discount.

We benchmark our long-term, through-the-cycle view on Action’s

multiple against a broad peer group of discounters, with a higher

weighting towards the top quartile subset of North American value-

for-money retailers, noting Action’s operating KPIs continue to

remain superior to this peer group.

Action had strong trading momentum in the first three periods of

2024, delivering sales of €3,004 million and operating EBITDA of €397

million, 21% and 29% ahead of the same period last year, primarily

driven by the increased volume of transactions. Action delivered LFL

sales growth of 9.8% and added 42 stores in the three-month period.

Longer-term hold assets

Action is a truly unique business and, since our initial investment in

2011, has benefitted from our rigorous active management, strong

governance model and ambitious long-term expansion strategy. We

have been clear for some time that we are going to hold Action for

the long term, enabling us to benefit from its compounding growth

and returns. Across the remaining portfolio, a number of other

companies are also starting to demonstrate significant compounding

potential, with impressive earnings growth and cash generation. For

example, since our initial investment in 2018, we have supported

Royal Sanders’ successful international expansion strategy,

organically and by accessing new markets, with six bolt-on

acquisitions, which have contributed strongly to earnings growth.

The business is now a best-in-class operator in its sector and is cash

generative, returning a total of £231 million in distributions to 3i over

the six-year period, including £109 million from a successful

refinancing in FY2024. Recognising this consistent performance,

we have now designated Royal Sanders as a longer-term hold asset.

Overview and strategy

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Chief Executive’s statement continued

3i Group plc | Annual report and accounts 2024 8

Healthcare portfolio companies

As one of the most differentiated and attractive businesses in the

medical device outsourcing market, Cirtec Medical continues to

demonstrate its commercial momentum, leveraging the capabilities

and offerings of its nine acquisitions since our initial investment in

2017. The business delivered good top-line growth in 2023, driven by

outperformance at a number of its sites, and is well positioned for

another year of growth in 2024. ten23 health, our biologics-focused

contract development and manufacturing organisation (“CDMO”),

had another important year as it continued to execute against key

operational and capability expansion initiatives. The business saw

good customer uptake at its Visp and Basel sites and enters 2024 with

a strong development and manufacturing pipeline. The remaining

business of Q Holding, Q Medical Devices, performed well, largely

driven by growth with new and existing customers. Since our

investment in 2019, SaniSure saw a period of rapid expansion

through the majority of 2022, reflecting strong growth in its

bioprocessing end market and elevated demand during the

pandemic. Over the past 18 months, however, the industry has been

rebalancing stock levels, impacting demand for SaniSure’s products.

SaniSure somewhat mitigated the impact of this destocking with a

strong order book coming into 2023 and through operational

efficiencies, but its sales were softer through the majority of the year.

Bookings across the industry are expected to further normalise from

the middle of 2024 and SaniSure is very well positioned to capitalise

on a full market recovery, as one of the market leaders in this space.

Other consumer portfolio companies

Following the transformational acquisitions of coolback and Panelto

in 2023, supported with a 3i investment of £38 million, European

Bakery Group (“EBG”, formerly Dutch Bakery) has established itself

as a key consolidator in its market, with a good pipeline of further

potential M&A. Strong volume growth was an important driver of

EBG’s top-line growth in 2023. MPM continues to deliver good

performance across all of its key markets, including the US, now its

largest. Its online channel has strong momentum and the business

has significant headroom for growth across its channels. Audley

Travel’s strong post-pandemic recovery has continued, driven by

growth in booking numbers, and it ended 2023 with bookings ahead

of 2019 pre-pandemic levels. Despite macro-economic uncertainty

impacting consumer sentiment, Audley Travel saw strong

performance in the US and the UK in the first quarter of 2024.

In April 2024, we agreed the sale of nexeye, the value-for-money

optical platform in which we first invested in 2017. During our

ownership we have supported the business in its market expansion

and customer proposition. We expect to complete the sale in H1

FY2025, returning exit proceeds of c.€452 million to 3i. These exit

proceeds, combined with distributions already received, result in a

2.0x money multiple.

We have continued to see challenging performance across the

majority of our online retail and discretionary consumer businesses.

Luqom's trading in 2023 remained impacted by lower consumer

demand and discounting in the market due to overstocking.

Encouragingly, there are initial green shoots of trading recovery in

early 2024 and the business continues to expand its international

footprint with the roll-out of webshops in further countries.

Whilst we have seen some improvements in trading at the start of

2024, the outlook for YDEON remains more challenged. Muted

consumer demand continues to impact the furniture market and,

whilst BoConcept largely outperformed its peers in 2023, softer order

intake persisted, particularly across China and North America,

coinciding with a slowdown in their real estate markets.

Industrial Technology portfolio companies

AES traded well in 2023, with strong financial, strategic and

operational performance. Its new factory in Rotherham became

operational in the year and is equipped with state-of-the-art

automation in production and storage, resulting in increased capacity

and efficiency. WP delivered good volume growth in 2023,

outperforming the wider market. This was driven by its diversified

geographic presence, new contract wins and the ramp-up of new

projects. The business distributed £42 million to 3i in the year,

including proceeds from a successful amend and extend of its

funding facilities completed in December 2023.

Tato experienced pressure on volumes across all of its regions in

2023, in line with the wider specialty chemicals and biocides industry,

as a result of inflation and supply driven pressure on input costs,

subdued end-market demand and heightened pricing competition.

Encouragingly, performance at the start of 2024 is showing signs

of improvement.

Services portfolio companies

Evernex delivered a number of third-party maintenance contract wins

in 2023, including a new significant client in the US, progressing its

North American expansion strategy. As a global consolidation

platform in its sector, the business completed its sixth acquisition

since our initial investment in 2019, acquiring Maminfo in Brazil, and

doubling the group’s presence in this region. MAIT has also seen

good momentum in its performance in 2023, through a combination

of organic sales growth and strategic M&A, completing the bolt-on

acquisitions of etagis and Quadrix in the year. Building on our IT

services expertise and experience, we agreed a new c.€116 million

investment in Constellation in early May 2024, an IT managed

services provider specialised in hybrid cloud and cyber security. We

expect this to complete in H1 FY2025.

The market for white collar recruitment faced significant headwinds in

2023, following reduced hiring demand and lower voluntary

employee turnover. As a result of these challenging trading

conditions, WilsonHCG has seen pressure on recruiter spend across

the majority of its end-markets resulting in a top-line decline against

2022. New customer wins and optimisation of resource have

somewhat mitigated the short-term softness, and have positioned

the business well for a wider market recovery, albeit the timing of this

rebound remains uncertain. arrivia exhibited favourable performance

in 2023, driven by strong recovery within its core travel markets.

However, the loss of a significant client will impact bookings

going forward.

Overview and strategy

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Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Chief Executive’s statement continued

3i Group plc | Annual report and accounts 2024 9

Infrastructure performance

In the year to 31 March 2024, our Infrastructure portfolio generated a

GIR of £99 million, or 7% on opening value (2023: £86 million, or 6%).

3iN generated a total return on opening NAV of 11.4% in FY2024,

again exceeding its 8-10% return objective, and delivered its

dividend target of 11.9 pence, a 6.7% increase on last year. Its

underlying portfolio continues to perform robustly, delivering income

growth and capital returns throughout the economic cycle, with

particularly strong performance from TCR, Tampnet and Valorem.

The demand for high-quality infrastructure assets was reflected in the

successful realisation of Attero for proceeds of €214 million, a 31%

uplift on opening value. Whilst 3iN continues to perform well, its

muted share price performance, with an increase of only 4% in the

year to 327 pence at 31 March 2024, was reflective of weak demand

across the market for shares of listed infrastructure investment

companies and a lack of liquidity in the FTSE 250 index.

Our proprietary capital investment in Smarte Carte performed well in

2023, as a result of sustained US and international travel volumes and

positive contract economics. The addition of a long-term contract

with London’s Heathrow Airport provides Smarte Carte with a

foothold for further expansion into the European market. Our North

American Infrastructure Fund had its final close in December 2023.

The Fund completed a new investment in Amwaste, a provider of

non-hazardous solid waste disposal services in the southeastern

region of the US. Regional Rail and EC Waste, two existing

investments in the Fund, completed a total of three bolt-on

acquisitions, as they continue to execute their scaling strategies.

We have agreed to sell our operational projects infrastructure fund

capability to certain members of 3i’s Infrastructure team. The transfer

will comprise the mandates for the management of the BIIF and 3i

European Operational Projects Funds (“3i EOPF”). The rationale for

the sale is to simplify 3i’s Infrastructure business and to facilitate its

focus on core-plus infrastructure. This sale is expected to complete

shortly and its impact will not be material to the Group.

Scandlines performance

Scandlines delivered a steady performance during the year. Leisure

traffic volumes were ahead of last year after a strong summer. This

offset a reduction in freight volumes which was disproportionately felt

across its Scandinavian and German markets, as a result of the more

challenging macro-economic backdrop. Cash generation remains

strong and we received dividends totalling £25 million from

Scandlines in the year.

We continued to advance

our sustainability agenda,

focusing on climate change.

Pages 39-68

Read more about sustainability

Sustainability

During the year, we continued to advance our sustainability agenda.

Our main focus stayed on climate change. We achieved progress

across several initiatives, including:

• Climate transition and targets – we are pleased to announce that

our science-based targets were validated by the SBTi on 22 March

2024. Our targets cover our direct Scope 1 and 2 emissions, as well

as the Scope 3 emissions associated with our portfolio. Our targets

are described in the Sustainability section of this report and in our

TCFD disclosures.

• Climate strategy and risk management – we completed a second

phase of climate change scenario analysis. The results provided

further insights into climate change physical and transition risks and

opportunities across our portfolio, and were used to enhance the

climate element of our ESG investment assessment framework.

• Data and disclosures – we further improved our portfolio

greenhouse gas (“GHG”) emissions data coverage and enhanced

the quality and consistency of this data through the roll-out of a

dedicated portfolio ESG data collection software. This has allowed

us to make aggregate portfolio emissions data disclosures for the

first time, in compliance with TCFD-aligned disclosure

requirements for asset managers. Our TCFD disclosures are on

pages 58 to 68 of this report.

We have also begun to address other important areas that impact the

sustainability of our portfolio, including biodiversity and human rights.

3i is keen to support charities which relieve poverty, promote

education and support elderly and disabled people. Our charitable

giving for the year totalled £1.05 million. This included supporting our

nine charity partners, matching staff fundraising, making a number of

one-off donations and promoting the give-as-you-earn scheme in the

UK, through which we matched c.£55,000 of staff donations. Our

portfolio companies also supported a variety of charities relevant to

them and their operations, with donations totalling c.£4.7 million.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Chief Executive’s statement continued

3i Group plc | Annual report and accounts 2024 10

Balance sheet and foreign exchange management

Our proprietary capital model and conservative balance sheet

strategy are a clear advantage in challenging macro-economic

conditions. We are under no pressure to invest or accelerate the

realisation of investments in order to protect shareholder value over

the longer term. We ended the year as net divestors, and continued

to reduce the carried interest liability related to Action, with total

payments of £735 million in the year. As a result of these payments

and the further investment in Action increasing our gross equity stake

from 52.9% to 54.8%, our net holding in Action, after carried interest,

is now 53.2% (31 March 2023: 48.9%). Over the last five years, we have

increased 3i’s net ownership of Action from 33% to 53.2%, through

stake purchases and carry buy-back transactions.

We also further strengthened our balance sheet and liquidity position

with the successful issue of a six-year €500 million bond at a coupon

of 4.875% and successfully extended the tenor of the £400 million

tranche of our £900 million Revolving Credit Facility (“RCF”) to

November 2026. We ended FY2024 with net debt of £806 million and

4% gearing, after returning £541 million of cash dividends to

shareholders in the year and with liquidity, including our undrawn

RCF, of £1,296 million, meaning we are well funded when suitable

investment opportunities arise. We remain disciplined on costs and

generated an operating cash profit of £467 million in the year, or £92

million excluding dividends received from Action.

In FY2024, we generated an unrealised gain of £116 million from our

foreign exchange hedging. In total, including the gain on hedging,

we recorded a total foreign exchange loss of £316 million in the year,

as sterling strengthened against the euro and US dollar.

Outlook

We expect that the current macro-economic conditions and

geopolitical uncertainty will persist in the near term and that this will

continue to impact confidence and pricing expectations in the wider

mid-cap M&A market. Against this backdrop, our rigorous and

disciplined approach to capital allocation remains unchanged; we are

long-term thematic investors, with the aim of compounding value via

organic and acquisition growth, and our active asset management

means we are on the front foot, building resilient portfolio

companies that are capable of navigating through these

challenging trading conditions.

Over the last financial year, 3i has delivered a very strong total

shareholder return of 71%, the majority of which relates to our share

price performance. Indeed, 3i’s share price has come a long way

since the restructuring of the Group in June 2012. Whilst Action

continues to power ahead, some of our other significant portfolio

companies are also showing strong growth and longer-term

compounding characteristics. Together with Action, these other

portfolio companies should support strong future returns for

our shareholders.

I would like to close by thanking the team at 3i and the teams in our

portfolio companies for another good performance in challenging

trading conditions.

Simon Borrows

Chief Executive

8 May 2024

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Chief Executive’s statement continued

3i Group plc | Annual report and accounts 2024 11

We adopt a thematic approach to origination and portfolio

construction, backing businesses that benefit from structural

trends which can support long-term sustainable growth.

Value-for-money

and discount

The last few years have been characterised by

significant geopolitical and market shocks.

These have had profound consequences for the global economy

and have resulted in significant pressures on consumers through

increases in energy prices, broader inflation, higher interest rates

and slower growth. While there are signs that some of these

pressures may be abating, consumers remain discerning and

continue to seek quality, at a good price.

We believe that these behaviours will endure, as shown by the

permanent shift to“value”concepts by some consumers during,

and in the immediate aftermath of the 2007-2008 financial crisis.

3i response

Value-for-money and discount has long been a winning theme

for our Private Equity portfolio. We highlight a few examples

here. Action has grown from a focus on its Dutch home market to a

pan-European discount retailer, by providing a good-quality and

surprising assortment, including many everyday necessities, at a very

low price.

Royal Sanders, a private label and contract manufacturer of

personal care products, is growing strongly by offering products

at a variety of price points to a broad range of customers,

including value retailers. European Bakery Group, which

produces bake-off bread and snack products for food retailers,

benefits from similar dynamics.

Pages 22-25

Action

Energy transition, energy

security and resource scarcity

The response to the climate and environmental

emergencies is a defining theme of our time.

The transition towards a low-carbon economy is gathering

pace, leading to increased demand for electricity and

associated services. At the same time, natural resources

are overexploited and governments, businesses and consumers

are focusing on developing and supporting more sustainable

consumption models, which embed more circularity and

shared resources.

3i response

We have exposure to this theme in our Infrastructure business, with

investments in businesses like Infinis and Valorem, which generate

renewable energy, Herambiente, which sorts and recycles waste and

generates power from the waste that cannot be recycled, and Future

Biogas, one of the UK’s largest anaerobic digestion plant developers

and biogas producers.

TCR, also in our Infrastructure portfolio, provides pooled

ground support equipment at airports, reducing the amount of

equipment required.

A number of our Private Equity portfolio companies are making

investments in the circular economy theme, either by adapting their

business models or by offering products or services that directly

support a circular economy model. For example, WP is investing in

more easily recyclable packaging materials and Evernex repairs,

reuses and recycles IT equipment.

Page 51

Future Biogas

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Our thematic approach to investment

3i Group plc | Annual report and accounts 2024 12

Digitalisation, digital

transformation and big data

Business is increasingly mobile and data

driven, facilitated by increasing connectivity,

and is focused on simplifying processes and

improving the customer experience.

Technology is developing rapidly and changing business

operating models across many sectors. Digitalisation is part of

daily life, extending to all spheres of human activity and

interactions. It is also intertwined with climate change and is a

precondition to many of the available decarbonisation pathways.

The rapid development of artificial intelligence is accelerating

these trends, creating opportunities not previously possible.

However, not all segments of the economy participate equally in

this transformation. Some businesses are vulnerable to

disruption, and some parts of society are being left behind.

3i response

We have been careful to select investments that benefit from this

theme, while avoiding areas likely to be impacted by disruption. In

our Private Equity portfolio, MAIT provides SMEs with IT solutions

that focus on process optimisation and digitalisation. xSuite

provides accounts payable process automation applications.

Evernex maintains IT equipment that is critical for customers’

business continuity. Luqom, VakantieDiscounter and Konges

Sløjd operate in growing online consumer niches and can benefit

from the ongoing shift to the online channel.

Our Infrastructure business is also exposed to this trend. Tampnet

operates an offshore communication network in the North Sea

and Gulf of Mexico; and Global Cloud Xchange owns one of the

world’s largest subsea fibre optic networks.

Demographic

and social change

Ageing populations are projected to

cause significant social disruption in our

investment markets.

Increasing life expectancy and reduced birth rates in most of our core

markets are resulting in ageing and often declining populations.

These structural, long-term trends are profoundly changing

consumer behaviour and preferences, and are resulting in policy

responses and scientific research to meet the challenges of

greater longevity and the increasing prevalence of age-related

chronic illness.

3i response

Our Private Equity healthcare investments, including Cirtec

Medical, an outsourced medical device manufacturer, as well as

SaniSure and ten23 health, which deliver products and services to

the life sciences industry, provide solutions to the disruption

caused by an ageing population and by scientific breakthroughs

making more advanced medical and pharmaceutical treatments

possible. Ionisos, in our Infrastructure portfolio, provides cold

sterilisation services to the medical and pharmaceutical industries,

amongst others.

Some of our portfolio companies with a consumer focus are also

exposed to this trend. Audley Travel caters to an older and

wealthier demographic cohort that is becoming more dominant.

Konges Sløjd, on the other hand, has developed its offering to

appeal to smaller families, where the spend per child is increasing.

Page 48

ten23 health

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Our thematic approach to investment continued

3i Group plc | Annual report and accounts 2024 13

We aim to compound value over time by investing

in mid-market companies to create a diverse

portfolio with strong growth potential.

Sectors

Private Equity

Consumer

Healthcare

Industrial Technology

Services

Software

Infrastructure

Communications

Healthcare

Energy

Social Infrastructure

Transport/Logistics

Utilities

Our thematic

approach

Our Private Equity and

Infrastructure teams invest

in businesses supported by

long-term structural

growth trends

	Key enablers of value
	Permanent capital and long-term investment horizon			We aim to compound our proprietary capital value through conviction in our best investments and by deploying our capital in new mid- market companies. Our proprietary capital affords us a long-term investment horizon.
	A long- standing office network			We have had teams on the ground across the UK, continental Europe and the US for many decades, which have built strong networks within their local business communities.
	An expert and diverse team				Our international teams are formed of local people with great knowledge and experience of their geography and sector. We view diversity as a strength and a plurality of perspectives enhances our origination, value creation and decision making.
	Careful portfolio construction			We approach portfolio construction with great care, originating opportunities thematically and investing selectively in businesses that can benefit from long-term structural growth trends.
	Active asset management			We engage with portfolio companies’ management teams to manage risks and invest in initiatives that support long-term sustainable growth.
	A strong brand and reputation			As an investment company with a history of over 75 years, our brand strength and long-term approach underpin our reputation as a responsible investor and business.
	Strong values and institutional culture			We promote a strong culture of integrity among our employees and embed that culture in our policies and processes.

Page 16

Our long-term, responsible approach

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Our business model

3i Group plc | Annual report and accounts 2024 14

We cover our operating costs with income from our

portfolio and from fund management fees generated

by our Infrastructure business, thereby minimising

the dilution of ou r capital returns.

		Value creation
		We manage our balance sheet conservatively. We maintain a tight grip on operating costs and cover these with fund management fees and portfolio income.
				Invest We typically make 4 to 7 new Private Equity investments each year, and support the development of our Infrastructure business
					Our value creation model delivers on our strategic objectives
			Realise We work with our portfolio companies to grow them organically and by acquisition to produce strong cash flow and generate at least a >2x return on disposal			Grow We create value from the portfolio through active asset management and organic and acquisition growth

Who benefits

Shareholders

Our model is capable of delivering

mid-teen returns to shareholders

through the investment cycle

23%

Total return on opening

shareholders’ funds

61.0p

Dividend per share

0.4%

Operating costs as a percentage

of our FY 2024 AUM

Portfolio companies

We work in close partnership with

our portfolio companies to provide

expertise and support, enabling them

to grow sustainably and to contribute

to the communities in which they

operate

Our people

Our people are our most important

resource. We foster the professional

development and wellbeing of our

employees

Page 16 Our long-term, responsible approach Page 110 Engaging with shareholders

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Our business model continued

3i Group plc | Annual report and accounts 2024 15

As proprietary capital investors, we have a long-term, responsible

approach. We aim to compound value through thoughtful origination,

disciplined investment and active asset management of our portfolio,

driving sustainable growth in our investee companies. Our success is

founded on the expertise and diverse perspectives of our employees.

We promote a culture of integrity across the organisation.

Invest responsibly

Our responsible approach to investment and portfolio management

is an integral part of our business model. It is based on four pillars:

1. Long-term stewardship					3. Careful portfolio construction
	Thanks to our permanent capital we have a medium- to long- term investment horizon. We have majority or significant minority stakes in our core portfolio companies and are represented on their boards. We therefore have the influence to drive long-term, sustainable growth in our portfolio.					We approach investment origination and portfolio construction with great care, with a focus on resilience across the cycle. We make a limited number of new investments each year, sourced from sectors and geographies where we have built a strong track record, in-house expertise and comprehensive networks.
2. Thematic origination					4. Assessment and management
	We adopt a thematic approach to investment origination. Our approach is flexible and can be adapted to take into account market developments and regulatory, policy, societal or environmental changes. For example, over the last few years we have backed businesses that invest in energy transition, develop products or services that can contribute to a more sustainable consumption model, or support the medical and pharmaceutical industries, all of which can benefit from long- term structural growth trends.					We screen investment opportunities against our Responsible Investment policy and embed an assessment of ESG risks and opportunities across our investment, portfolio management and value creation processes. We have been signatories to the UN Principles for Responsible Investment since 2011.

	Our approach is designed to support long-term, sustainable growth in our portfolio companies.			Pages 12-13 Thematic origination
				Pages 42- 51 Invest responsibly

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Our long-term, responsible approach

3i Group plc | Annual report and accounts 2024 16

Our people are our priority Our success is based on the recruitment, development and retention of a capable and diverse team. We provide training and opportunities for career advancement and reward our employees fairly. We recognise the importance of the wellbeing of our employees and support them by creating a healthy workplace and with tools to improve their mental and physical health. We benefit from a non-hierarchical organisational structure, which underpins a culture of open communication.

249

27

employees1

nationalities

We employ a team of 249 people from 27 countries and value highly the diversity of perspectives that this brings. We cultivate an inclusive environment for existing and prospective employees which respects, involves and leverages diverse talent for greater organisational good. We support a number of initiatives aimed at improving gender, ethnic and social diversity at 3i and on an industry-wide basis.

Pages 39-68 Sustainability

1 Global employee headcount.

Strong values and institutional culture We promote a strong culture of integrity among our employees and embed that culture in our policies and processes. We expect all employees to act with integrity, accountability and a careful ownership mindset and to approach their roles with ambition, rigour and energy. Our corporate values are approved by the Board and the Executive Committee sets the tone and leads by example. We evaluate all employees annually against our corporate values.

Our shared values

Pages 96-155

Governance

Pages 39-68

Sustainability

Ambition • Focus on generating value for all our stakeholders • Strive for excellence and continuous improvement Accountability • Personal and collective responsibility for protecting and enhancing 3i’s assets and reputation • An ownership mentality in managing costs, resources and investments • An aversion to building hierarchy Rigour and energy • Clarity of vision supported by practical execution • Thorough analysis leading to clear decision making and effective implementation • High levels of energy, a strong work ethic and effective team working Integrity • Doing “the right thing” even when difficult • Relationships built on trust, candour and respect

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Our long-term, responsible approach continued

3i Group plc | Annual report and accounts 2024 17

Key performance indicators 1,2,4

Gross investment return (“GIR”)

as % of opening portfolio value

The performance of the proprietary

investment portfolio expressed 

as a percentage of the opening

portfolio value.

Link to strategic objectives

NAV per share

The measure of the fair value per share

of our investments and other assets after

the net cost of operating the business

and dividends paid in the year.

Link to strategic objectives

Cash realisations5

Support our returns to shareholders,

as well as our ability to invest in

new opportunities.

Link to strategic objectives

4% 26% 43% 36% 23%

804p 947p 1,321p 1,745p 2,085p

£801m £319m £758m £885m £883m

l	l	Cash realisations	l		Action reinvestment (2020)
l		Proceeds received from Action’s capital restructuring (2024)

FY2024 progress and FY2025 outlook

• Group GIR of 23%, driven by £3,926 million of

unrealised value growth and £591 million of

portfolio income

• Private Equity GIR of £4,059 million, or 25%,

predominantly driven by Action’s GIR of

£3,718 million

• Infrastructure GIR of £99 million, or 7%,

reflecting the performance of 3iN and US

infrastructure

• Scandlines GIR of £10 million, or 2%, reflecting

steady performance in the year and cash

distributions

• Our portfolios have started FY2025 with good

momentum

FY2024 progress and FY2025 outlook

• 19% increase in NAV per share to 2,085 pence

(31 March 2023: 1,745 pence), after payment of

56.25 pence dividend per share in the year

• Our portfolios have started FY2025 with good

momentum

FY2024 progress and FY2025 outlook

• Cash proceeds of £883 million including £762

million5 of proceeds received from Action’s

capital restructuring

• Realisations and refinancings in FY2025 are

subject to supportive market conditions and

to portfolio company performance

remaining resilient. In April 2024, we agreed

the sale of nexeye, generating expected exit

proceeds of c.€452 million

Overview and strategy Business review Sustainability Performance and risk Governance Audited financial statements Portfolio and other information

Strategic objectives Grow investment portfolio earnings Realise investments with good cash‑to‑cash returns

3i Group plc | Annual report and accounts 2024 18

Cash investment6

Identifying and investing in new and

further investments is a key driver

of the Group’s ability to deliver

attractive returns.

Link to strategic objectives

Operating cash profit3

By covering the cash operating cost

of running our business with cash

income, we reduce the potential

dilution of capital returns.

Link to strategic objectives

Total shareholder return

The return to our shareholders through

the movement of the share price and

dividends paid during the year.

Link to strategic objectives

£1,248m £510m £543m £397m £593m

l	l	Investment	l		Action reinvestment (2020)
l		Action reinvestment (2024)

£40m £23m £340m £364m £467m

l Action dividend l l Other

(17)% 51% 24% 27% 71%

3%

5%

4%

6%

4%

l Dividends l l Share price

FY2024 progress and FY2025 outlook

• Invested £593 million, including the

£455 million reinvestment into Action

• Completed seven bolt-on acquisitions for the

Private Equity portfolio, one of which, for EBG,

we supported with further investment of

£38 million. Completed one new investment

in our North America Infrastructure Fund

• Interesting pipeline of new investment

opportunities and bolt-on acquisitions. In early

May 2024, we agreed to invest c.€116 million in

a new investment for our Private Equity

portfolio, Constellation

FY2024 progress and FY2025 outlook

• Generated total cash income of £594 million

(2023: £497 million) of which £456 million (2023:

£351 million) is from Private Equity,

£113 million (2023: £107 million) from

Infrastructure and £25 million from Scandlines

(2023: £39 million). Private Equity includes

£375 million of dividends from Action (2023:

£325 million)

• Cash operating expenses of £127 million

(2023: £133 million)

• Good cash income expected to continue from

Action, Infrastructure and Scandlines

FY2024 progress and FY2025 outlook

• TSR of 71% driven by a share price increase of

67% and by dividend payments of 56.25 pence

in the year

• Well-positioned balance sheet supports a total

FY2024 dividend of 61.0 pence per share

1 A number of our KPIs are calculated using financial information which is not defined under IFRS and therefore they are classified as APMs. Further details on these APMs

are included in our Financial review on page 79.

2 Further information on how these KPIs are factored into decisions concerning the Executive Directors’ remuneration is included in the Directors’ remuneration report on page 136.

3 Cash operating expenses includes lease payments.

4 Key risks which could potentially impact the respective KPIs can be found on pages 89 to 93, which summarises the Group's current principal risks.

5 Realised proceeds may differ from cash proceeds due to timing of cash receipts. During the year, Private Equity recognised £866 million of realised proceeds, of which £5 million

relates to WHT incurred on the proceeds from Action.

6 Cash investment per the segmental analysis is different to cash investment per the cash flow due to a £10 million investment in Private Equity, which was recognised in FY2023 and

paid in FY2024.

Overview and strategy Business review Sustainability Performance and risk Governance Audited financial statements Portfolio and other information

Maintain an operating cash profit Use our strong balance sheet Increase shareholder distributions

3i Group plc | Annual report and accounts 2024 19

What’s in this section
Private Equity	21
Infrastructure	34
Scandlines	38

Overview and strategy Business review Sustainability Performance and risk Governance Audited financial statements Portfolio and other information

3i Group plc | Annual report and accounts 2024 20

Private Equity

W e invest i n mid-market businesses

headquartered in Europe and North America.

Once invested, we work closely with our portfolio

companies to deliver ambitious growth plans, and

to realise strong cash returns for 3i shareholders

and other investors.

In the year to 31 March 2024 , our Private Equity portfolio delivered

a GIR of £ 4,059 million, or 25%, on the opening portfolio value

(2023: £4,966 million or 40% ), after a £ 341 million foreign exchange

loss, including the impact of foreign exchange hedging.

Action delivered another year of very strong earnings growth and

cash generation, and accounted for the majority of the Private Equity

GIR in FY2024. In the year, we also received significant realised

proceeds from Action and completed a further reinvestment in the

business. Across the remaining portfolio, we saw strong growth from

portfolio companies operating in the value-for-money and private

label and healthcare sectors, more than offsetting softer performance

from portfolio companies exposed to the discretionary consumer

sector or operating in cyclically impacted end-markets. We

designated Royal Sanders as a longer-term hold asset in the Private

Equity portfolio, following its consistent performance since

acquisition and due to its compounding growth characteristics.

Low levels of global private equity transaction activity persisted

through FY2024. We remained very disciplined on price given the

difficulties to match buyers’ and vendors’ expectations, prioritising

reinvestment into some of our existing portfolio companies and

continuing our buy-and-build momentum. We also generated

proceeds from some of our existing portfolio from refinancing

activities and portfolio income.

Overall, the Private Equity portfolio value increased to £19,629 million

(31 March 2023: £16,425 million). The contribution of Action to the

Private Equity performance is detailed in Note 1 of the financial

statements.

Table 1: Gross investment return

for the year to 31 March

Investment basis	2024 £m	2023 £m
Realised profits over value on the disposal of investments	–	169
Unrealised profits on the revaluation of investments	3,874	3,746
Dividends	439	345
Interest income from investment portfolio	80	77
Fees receivable	7	7
Foreign exchange on investments	(437)	493
Movement in fair value of derivatives	96	129
Gross investment return	4,059	4,966
Gross investment return as a % of opening portfolio value	25%	40%

At a glance

Gross investment return

£4,059m

or 25%

( 2023: £ 4,966 m or 40%)

Cash investment

£ 556 m

( 2023: £381m)

Realised proceeds

£866 m

( 2023: £ 857m)

Portfolio dividend income

£ 439m

( 2023: £345m)

Portfolio growing earnings

93%¹

(2023: 90%)

Portfolio value

£ 19,629 m

( 2023: £16,425m)

1 LTM adjusted earnings to 31 December 2023.

Includes  29 portfolio companies.

Overview and strategy Business review Sustainability Performance and risk Governance Audited financial statements Portfolio and other information

3i Group plc | Annual report and accounts 2024 21

For more information

www.action.com

Investing in good businesses

to make them great

Action, the fastest growing non-food discount retailer in Europe and our

largest portfolio company, now has stores in 12 countries, employs over 69,000

people and generated annual revenue in excess of €11 billion in 2023.

Customer focus

“Customers come first” is one of Action’s core values.

On average, over 15 million customers visit Action stores

each week, driven by Action’s unique proposition

offering an assortment of essential and surprise good-

quality products, at the lowest prices.

Its low price points are fundamental to its offering and,

in 2023, it continued to invest in its strong customer

proposition by reducing 2,500 prices across its product

assortment. 67% of its products are priced under €2.

Action has a comprehensive process of ensuring its

stores stay relevant for its customers, through store

relocations, enlargements and refurbishments.

Good-quality products

Action has a simple, efficient, and scalable operating

model. It offers 6,000 products across 14 categories, with

two-thirds of the assortment changing frequently.

Action is able to adapt in response to changing times

and customer needs and, in 2023, it applied particular

focus on daily essential products.

International store roll-out

In 2023, Action added 303 stores across its geographies,

including its first 15 stores in Slovakia. In the first quarter

of 2024, it opened its first three stores in Portugal, its

twelfth country. At 31 December 2023, Action had a total

of 2,566 stores, with significant further growth

opportunities across both existing and new markets.

Net sales1

€m

+21%

CAGR

+26%

CAGR

3i buyout

Operating EBITDA1

€m

3i buyout

+28%

CAGR

+28%

CAGR

Source: Company information

1 Including impact of 53 rd week.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Private Equity continued

3i Group plc | Annual report and accounts 2024 22

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Private Equity continued

3i Group plc | Annual report and accounts 2024 23

Number of stores

2023

2022

2021

2020

2019

at 31 December

303

Stores added

during 2023

Supply chain infrastructure

Action continues to build its distribution network to support its

international expansion, with new distribution centres opening in

France and Poland in 2023. Action now has 13 distribution centres

and three hubs across Europe, with three new distribution centres

planned in 2024 and 2025. Action maintained a high level of product

availability throughout 2023.

People

During 2023, Action created over 8,900 new jobs, and now directly

employs more than 69,000 people across its stores and distribution

network. Action continues to invest in the ongoing development and

engagement of its employees, with over 3,100 internal promotions

and 65,000 employees undertaking training in 2023.

Geographical spread of stores, distribution centres and hubs

at 31 December 20231

Netherlands

414

stores and 2 DCs

Belgium/Luxembourg

226

stores

Germany

526

stores and 2 DCs

France

799

stores, 5 DCs

and 2 hubs

Spain

26

stores

Poland

322

stores, 3 DCs and 1 hub

Czech Republic

63

stores

Slovakia

15

stores and 1 DC

Austria

108

stores

Italy

67

stores

1 Action opened its first stores in Portugal in Q1 2024 and therefore has stores in 12 countries.

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3i Group plc | Annual report and accounts 2024 24

Digital

Action continued to develop its digital ecosystem in 2023. Its app is

now available in eight countries and was downloaded 5.3 million

times in 2023. On average, Action records 9.6 million visits to its

website and its app per week, providing a multi-channel touchpoint

for customers to conduct their research online and then continue

their journey with in-store purchases. Action also continues to

improve the technology to enable further efficiencies in the flow of

goods from suppliers to stores.

Partnership

In 2023, Action’s support for its charity partners and other donations

totalled €4.3 million. Action supports charities such as SOS Children’s

Villages and the Johan Cruyff Foundation. Its scholarship fund,

originally set up in 2017, is now available to employees in almost all of

Action’s countries.

Sustainability

Action made further progress across its sustainability programme

in 2023. Further information is available in the Sustainability section of

this report on pages 46 and 47.

Further information is available on Action’s website:

www.action.com

Action financial metrics

Last 12 months to P12 2023 (2022)

2022 2023

Net sales

2022 2023

Operating

EBITDA

2022 2023

Net new

stores added

2022 2023

LFL sales growth

2022 2023

Operating

EBITDA margin

Last three months to P3 2024 (2023)

2023 2024

Net sales

2023 2024

Operating

EBITDA

2023 2024

Net new

stores added

2023 2024

LFL sales growth

2023 2024

Operating

EBITDA margin

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3i Group plc | Annual report and accounts 2024 25

Investment and realisation activity

Transaction activity at Action was the main driver of Private Equity

investment and realisations in FY2024. In October 2023, Action

successfully completed its debut US dollar term loan issuance in the

US leveraged loan market, raising $1.5 billion at very attractive

pricing. In October 2023, Action also completed a capital

restructuring with a pro-rata redemption of shares. We reinvested

£455 million of the £762 million of proceeds from the share

redemption to acquire further shares in Action, increasing our gross

equity stake from 52.9% to 54.8%.

We typically refinance our most cash generative assets where

appropriate for the business and where market conditions allow. In

December 2023, Royal Sanders completed an all-senior debt

refinancing, upsizing its debt facilities and returning £109 million to 3i,

of which £48 million was recognised as income. We also completed a

£29 million purchase of an incremental stake in the business.

Our buy-and-build strategy remains an integral part of our approach

to value creation and in FY2024, our portfolio companies completed

seven bolt-on acquisitions. This included Dutch Bakery’s combination

with coolback, a German bakery group specialised in bake-off bread,

to create the European Bakery Group (“EBG”), a pan-European

bakery platform. We supported this acquisition with a £38 million

investment in July 2023. In August 2023, EBG completed the self-

funded acquisition of Panelto, a manufacturer of bake-off artisan

breads, establishing a UK and Ireland platform within the group.

Further details of selected bolt-on acquisitions can be found on

pages 28 to 29.

We continued to develop ten23 health with further investment

totalling £25 million and provided £12 million of capital to support

Luqom, YDEON and Digital Barriers through challenging trading

conditions.

WP returned cash of £42 million to 3i in the year, of which £2 million

was recognised as income, primarily from a successful amend and

extend of its debt facilities.

In total, in the year to 31 March 2024, our Private Equity team

invested £556 million (2023: £381 million) and generated total

proceeds of £866 million (2023: £857 million).

In April 2024, we agreed the sale of nexeye, generating expected exit

proceeds of c.€452 million. These exit proceeds, combined with

distributions already received, result in a 2.0x money multiple. The

transaction is expected to complete in H1 FY2025.

In May 2024, we agreed to invest c.€116 million in Constellation, an IT

managed services provider specialised in hybrid cloud and cyber

security. The transaction is expected to complete in H1 FY2025.

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3i Group plc | Annual report and accounts 2024 26

Investments

	Portfolio company	Business description		Date	Proprietary capital investment £m
Reinvestment	Action	General merchandise discount retailer		November 2023	455
	Royal Sanders	Private label and contract manufacturing producer of personal care products		Various	29
	Total reinvestment				484

Further investment to finance portfolio bolt-on acquisitions	European Bakery Group	coolback: German bakery group specialising in bake-off bread		July 2023	38
	Total further investment to finance portfolio bolt-on acquisitions				38

Further investment to support portfolio companies	Luqom	Online specialist lighting retailer	Various	6
	Digital Barriers	Video technology provider	January 2024	4
	YDEON	Online retailer of garden buildings, sheds, saunas and related products	January 2024	2
	Total further investment to support portfolio companies			12

Other further investment	ten23 health	Biologics focused CDMO		Various	25
						Other	Various		Various	2
	Total other further investment				27

FY2024 Private Equity gross investment 561

Return of investment	Konges Sløjd	Premium brand offering apparel and accessories for babies and children		September 2023	(5)
		Total return of investment				(5)

FY2024 Private Equity net investment 556

	Portfolio company	Name of acquisition	Business description of bolt-on investment	Date
Private Equity portfolio bolt-on acquisitions funded from the portfolio company balance sheets	Royal Sanders	Lenhart	Manufacturer of private label products for the personal care industry	April 2023
	MAIT	etagis	Provider of production planning software for ERP systems	June 2023
	AES	Triseal	Engineering company specialising in design, manufacture and application of mechanical seals and associated rotating equipment	June 2023
	European Bakery Group	Panelto	Manufacturer of bake-off artisan breads	August 2023
	MAIT	Quadrix	Product lifecycle management software provider	October 2023
	Evernex	Maminfo	Brazilian provider of third-party maintenance services	January 2024

Realisations

	Portfolio company	Type	Business description	Date	3i realised proceeds £m
Realisations	Action	Capital restructuring proceeds	General merchandise discount retailer	November 2023	762
	Royal Sanders	Refinancing	Private label and contract manufacturing producer of personal care products	December 2023	61
	WP	Refinancing & other	Global manufacturer of innovative plastic packaging solutions	March 2024	40
	Other	Various	Various	Various	3
	FY2024 Private Equity realisations					866

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3i Group plc | Annual report and accounts 2024 27

Private Equity bolt-on acquisitions

and further investments

For more information

www.europeanbakerygroup.com

Case study: Bolt-on acquisition

European Bakery Group’s (“EBG”)

acquisitions of coolback and

Panelto Foods

EBG completed the transformational

acquisitions of coolback and Panelto Foods in

2023, establishing a high-quality pan-European

platform in the fragmented European private

label market for bake-off bread.

coolback is a German bakery group founded in 1999, based in the

Berlin area. The company employs more than 600 full-time

employees across three locations in the German municipality of

Brandenburg, which together produce more than 1.2 billion

baked goods per year. It produces and sells private label, frozen

and ambient bake-off bread products to customers active in food

retail and food service across Germany, the Nordics and Poland.

Panelto Foods was founded in 2004 and is headquartered in

Ireland. It produces a range of high-quality frozen par-baked

breads for major retailers’ in-store bakeries across Ireland, the UK

and Europe. The company employs around 300 employees across

two state-of-the-art bakeries with three production lines, which

produce more than 325 million baked goods annually.

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3i Group plc | Annual report and accounts 2024 28

Case study: Bolt-on acquisition

MAIT’s acquisitions of etagis

and Quadrix

Since our investment in 2021, MAIT has

made seven bolt-on acquisitions, including

two in FY2024, proving itself as an active

consolidator in a fragmented market.

etagis, headquartered in Germany, is a provider of software

solutions for production planning and control. The business was

founded in 2005 and has built a network of around 460

customers. This acquisition expands the reach of MAIT’s

proprietary software.

Quadrix, founded in 1997 in Flawil, Switzerland, is a product

lifecycle management software focused sales and

implementation partner, with c.570 active clients. The acquisition

has strengthened MAIT’s position as a leading provider of

product lifecycle management solutions in Switzerland.

For more information

www.mait-group.com

Case study: Further investment

ten23 health

ten23 health is a biologics-focused contract

development and manufacturing organisation

(“CDMO”).

In 2021, we adopted an innovative approach in creating a new

start up CDMO platform in ten23 health. Swissfillon AG, a drug

product fill and finish CDMO located in Visp, was acquired by the

platform later that year. The combined business’s core service

offering includes formulation and drug development,

manufacturing for clinical and commercial applications, and

testing services for sterile pharmaceutical products.

The business operates across two sites in Visp and Basel,

Switzerland, both of which have seen progression across their

operational initiatives and capability expansion activities in

FY2024. The business is also pursuing a greenfield facility buildout

in Visp (“Visp West”) to further expand its fill and finish

manufacturing and quality control offerings.

Momentum across the business remains strong after ten23 health

secured a good pipeline of service and manufacturing

programmes. The business is well positioned for another year of

growth in 2024.

For more information

www.ten23.health

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3i Group plc | Annual report and accounts 2024 29

Action performance and valuation

As detailed in the Chief Executive’s statement and in the Action case

study, Action delivered another year of very strong performance in

2023, and we reflected this in our valuation of Action at 31 March 2024.

At 31 March 2024, Action was valued using its LTM run-rate EBITDA

to the end of P3 2024 of €1,848 million, which includes the usual

adjustment to reflect stores opened in the last 12 months and one-off

expenses of €18.5 million, the majority of which related to a specific

net payment to each full-time Action employee in December 2023 to

mark Action's 30-year trading anniversary. Action continues to

outperform the peers we use to benchmark its performance across its

most important KPIs, supporting our valuation multiple of 18.5x net of

the liquidity discount (31 March 2023: 18.5x).

Action ended P3 2024 with cash of €558 million and a net debt

to run-rate earnings ratio of 2.2x after paying two dividend

distributions in FY2024, of which 3i received £375 million.

At 31 March 2024, the valuation of our 54.8% stake in Action

was £14,158 million (31 March 2023: 52.9%, £11,188 million) and

we recognised unrealised profits from Action of £3,609 million

(March 2023: £3,708 million) as shown in Table 2.

Performance (excluding Action)

Excluding Action, the Private Equity portfolio valued on an earnings

basis generated £689 million (March 2023: £520 million) of value growth

from performance increases, offsetting £368 million of performance

decreases (March 2023: £310 million).

Royal Sanders, which operates in the private label and contract

manufacturing market for personal care products, was the largest

contributor to our Private Equity performance increases (excluding

Action) in FY2024. A combination of continued growth of key

customers and the benefits of its previous bolt-on acquisitions

beginning to manifest resulted in the business delivering strong top-

line and earnings growth and cash generation in the year,

underscoring its good track record since we invested in 2018. As a

result, we have now designated Royal Sanders as a longer-term hold

asset, as we continue to support the compounding growth potential

of the business. Also operating in the private label space, EBG was

another standout performer in FY2024. Following the formation of

the combined EBG platform earlier in the year (as shown in

investments and realisations activity on page 26), the business is

benefitting from an expanded footprint in new geographies and

product categories.

MPM saw good top-line growth in 2023, driven primarily by increased

volumes across its key markets. The US, now its largest market,

continues to see encouraging sales development and there is

significant headroom to scale it further, including through the online

channel. Audley Travel’s reputable brand and customer loyalty

continues to support its strong recovery post the pandemic.

Low consumer confidence impacted the home and living category in

Luqom’s core DACH and Nordic regions in 2023, resulting in financial

underperformance. In response, the business has focused on an

operational transformation to ensure it is well positioned for

improved market conditions. Encouragingly, it has started 2024 with

more positive trading. YDEON faced a sustained deterioration of

consumer confidence in its markets in 2023, particularly in its core

German market. There are some signs of improving performance for

YDEON at the start of 2024, albeit the wider market environment

remains challenging. Whilst largely outperforming the general

furniture market, BoConcept saw softer order intake across most of

its regions in 2023. This was partially offset by stabilising input and

shipping costs.

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3i Group plc | Annual report and accounts 2024 30

Across our healthcare portfolio, Cirtec Medical saw strong

commercial traction with new wins in 2023, including both production

and product development programmes, and has a strong pipeline

moving into 2024 that is expected to support continued growth.

Since our initial investment in 2021, we have invested our capital in

developing the infrastructure, commercial activities and team

expertise of ten23 health. In 2023, the business continued to develop

the production and development services capabilities of its Basel and

Visp sites, and grew a good pipeline of customer programmes.

Q Medical Devices (Q Holding) performed well in 2023, with strong

demand from most of its customers across its business units, and also

benefitted from a number of operational initiatives.

Demand for single-use bioprocessing products remained muted

across the industry in 2023, as destocking persisted for longer than

expected, impacting SaniSure as a participant in this market. Over

this period, SaniSure has focused on driving further improvements in

its business and processes to position itself for a recovery in demand.

Whilst it is difficult to predict when ordering patterns may normalise,

we have seen positive momentum in its order book in the first quarter

of 2024. SaniSure is well positioned to be an outsized beneficiary of

the return to normalised market growth.

AES delivered another year of strong performance in 2023, driven by

order volume growth across its global end-markets. The business

continued to progress reliability, automation and capacity and

completed the bolt-on acquisition of Triseal, an Australian sealing

technology provider.

A combination of good demand in personal care products and new

customers drove good volume growth in WP in 2023. Weak end-

market demand across the consumer DIY and construction markets

resulted in soft trading performance for Tato in 2023. The business has,

however, benefitted from selling down highly-priced inventory over the

year and is now delivering improved margin performance. Tato

remains highly cash generative and returned £7 million of dividend

income to 3i in the year.

Evernex saw good financial performance in 2023, driven primarily by

third-party maintenance sales growth, particularly in southern Europe,

North America, the Middle East, Africa and Brazil. The business also

secured a significant contract in the US as part of its North American

expansion strategy. In January 2024, Evernex completed the bolt-on

acquisition of Maminfo in Brazil, enabling the business to deliver its

capabilities across all Brazilian states. Also operating in the IT services

market, MAIT continues to grow its revenues through a combination

of organic growth and M&A. The business completed the

acquisitions of etagis and Quadrix in the year, achieving further

progress in its buy-and-build strategy.

WilsonHCG continues to operate in a challenging white collar

recruitment market, resulting in softer performance across the

majority of its end-markets. The business has carefully optimised its

resources ensuring that it can service new customer wins in the year,

and is ready to scale quickly when market demand returns. arrivia’s

encouraging post-pandemic recovery and performance in 2023, was

somewhat offset by the loss of a significant client at the end of the

year. This is expected to impact bookings going forward.

Overall, 93% of the portfolio by value grew LTM adjusted earnings

in the year (31 March 2023: 90%). Chart 1 on page 32 shows the

earnings growth of our top 20 Private Equity investments.

Table 2: Unrealised profits on the revaluation of Private Equity investments1 in the year to 31 March

	2024 £m	2023 £m
Earnings based valuations
Action performance	3,609	3,708
Performance increases (excluding Action)	689	520
Performance decreases (excluding Action)	(368)	(310)
Multiple increases	68	38
Multiple decreases	(107)	(205)
Other bases
Sum of the parts	60	–
Discounted cash flow	(13)	4
Other movements on unquoted investments2	(14)	4
Quoted portfolio	(50)	(13)
Total	3,874	3,746

1 Further information on our valuation methodology, including definitions and rationale, is included in the Portfolio valuation – an explanation section.

2 FY2024 includes nexeye valued on an imminent sale basis.

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3i Group plc | Annual report and accounts 2024 31

Leverage

Our Private Equity portfolio is funded with all-senior debt structures,

with long-dated maturity profiles. As at 31 March 2024, 85% of

portfolio company debt was repayable from 2027 and beyond.

Across our Private Equity portfolio, term debt is well protected

against interest rate rises, with over 70% of total term debt hedged at

a weighted average tenor of more than three years. The average all-

in debt cost on the total hedged term debt is less than 6.5%.

Average leverage across the portfolio was 2.7x (31 March 2023: 2.5x).

Excluding Action, leverage across the portfolio was 3.9x

(31 March 2023: 4.0x).

Chart 2 shows the ratio of net debt to adjusted earnings

by portfolio value.

Multiple movements

When selecting multiples to value our portfolio companies we take a

long-term, through-the-cycle approach and consider a number of

factors including recent performance, outlook and bolt-on activity,

comparable recent market transactions and exit plans, and the

performance of quoted comparable companies. At each reporting

date our valuation multiples are considered as part of a robust

valuation process, which includes independent challenge throughout,

including from our External auditor, culminating in the quarterly

Valuations Committee of the Board.

Whilst public equity markets generally recovered in the year to the

end of March 2024, we have remained cautious in reflecting this

recovery in the valuation multiples we use for our portfolio

companies, given the persisting dislocation between quoted equity

market multiples and the valuations of private market transactions.

We increased the multiples for three of our portfolio companies in

the year to reflect their performance against their respective

investment cases and the scaling or professionalising of these

businesses, and we adjusted four multiples downwards to reflect

private market transaction dynamics, and in some instances, soft

performance. In total, we recognised a net £39 million unrealised

value reduction from multiple movements in the year (March 2023:

£167 million).

We have made no changes to our approach for the valuation of Action.

Action’s performance and KPIs continue to compare very favourably in

relation to its peer group, which consists of North American and

European value-for-money retailers. This supports our post-discount

valuation multiple of 18.5x, which is unchanged from the prior year. We

take comfort from the fact that Action’s continued growth meant that its

valuation at 31 March 2023 translated to only 14.4x the run-rate EBITDA

achieved one year later. Based on the valuation at 31 March 2024, a 1.0x

movement in Action’s post discount multiple would increase or

decrease the valuation of 3i’s investment by £866 million.

Chart 1: Portfolio earnings growth of the top 20

Private Equity1 investments

l 3i value at 31 March 2024 (£m)

	6	5	3	2	4
	<0%	0-9%	10-19%	20-29%	≥30%
	Number of companies
1 Includes top 20 Private Equity companies by value excluding ten23 health and nexeye. This represents 96% of the Private Equity portfolio by value ( 31 March 2023 : 96% ). Last 12 months’ adjusted earnings to 31 December 2023 and Action based on LTM run-rate earnings to the end of P3 2024.

Chart 2: Ratio of net debt to adjusted earnings1

l 3i value at 31 March 2024 (£m)

4		5		5		2		3		3
1-2x		2-3x		3-4x		4-5x		5-6x		>6x
Number of companies
1 This represents 91% of the Private Equity portfolio by value (31 March 2023: 92%). Quoted holdings, nexeye, ten23 health and companies with net cash are excluded from the calculation. Net debt and adjusted earnings at 31 December 2023 and Action based on LTM run-rate earnings to the end of P3 2024.

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3i Group plc | Annual report and accounts 2024 32

Quoted portfolio

Basic-Fit is the only quoted investment in our Private Equity portfolio.

In 2023, the business saw 13% growth in its membership numbers

and added 202 clubs to its network.

In the 12 months to 31 March 2024, its share price decreased by

43.1% to €20.68 (31 March 2023: €36.32). This price values our 5.7%

shareholding in Basic-Fit at £67 million (31 March 2023: £121 million).

Imminent sale

Given the advanced stage of the sale process, we valued nexeye on

an imminent sale basis at 31 March 2024, and we agreed the sale of

the portfolio company in April 2024.

Sum of the parts

At 31 March 2024, ten23 health was valued on a sum of the parts

basis, mainly using a discounted cash flow (“DCF”) methodology.

Assets under management

The assets under management of the Private Equity portfolio,

including third-party capital, increased to £27.5 billion (31 March

2023: £22.9 billion), primarily due to unrealised value movements in

the year.

Private Equity 3i proprietary capital by vintage

The performance of our vintages (Table 4) is driven by our portfolio

companies. Action, the only remaining asset in the Buyouts 10-12

Vintage and the primary driver of the Other category, continues to

perform very strongly. In the year, we designated Royal Sanders as a

longer-term hold Private Equity asset, crystallising the return from

Royal Sanders to date within its previous 2016-19 vintage, at a 5.3x

sterling money multiple. Royal Sanders now sits in the Other

category.

Table 3: Private Equity assets by sector as at 31 March 2024

Sector	Number of companies1	3i carrying value 2024 £m
Action (Consumer)	1	14,158
Consumer	13	2,292
Healthcare	4	1,262
Industrial Technology	6	1,107
Services	9	644
Software	3	166
Total	36	19,629

1 The case count excludes legacy insolvent assets.

Table 4: Private Equity 3i proprietary capital as at 31 March

Vintages	3i proprietary capital value 3 2024 £m	Vintage money multiple 4 2024	3i proprietary capital value 3 2023 £m	Vintage money multiple 4 2023
Buyouts 2010–20121	1,389	16.0x	2,968	15.1x
Growth 2010–20121	22	2.1x	23	2.1x
2013–20161	788	2.5x	814	2.5x
2016–20191	1,363	1.8x	1,872	1.8x
2019–20221	1,743	1.6x	1,524	1.5x
2022-20251	224	1.0x	228	1.0x
Other2	14,100	n/a	8,996	n/a
Total	19,629		16,425

1 Assets included in these vintages are disclosed in the Glossary.

2 Includes value of £12,769 million (31 March 2023: £8,220 million) held in Action through the 2020 and 2023 Co-investment vehicles and 3i.

3 3i proprietary capital is the unrealised value for the remaining investments in each vintage.

4 Vintage money multiple (GBP) includes realised value and unrealised value as at the reporting date.

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3i Group plc | Annual report and accounts 2024 33

Infrastructure

We manage a range of funds investing

principally in mid-market economic infrastructure

and operational projects in Europe and North

America. Infrastructure is a defensive asset class

that provides a good source of income and fund

management fees for the Group, enhancing the

returns on our proprietary capital.

Our Infrastructure portfolio generated a GIR of £ 99 million or 7%

on the opening portfolio value (2023 : £86 million, 6% ), driven

primarily by an increase in the share price of our quoted stake in 3iN,

good value growth from our US infrastructure portfolio and dividend

income. 3iN’s underlying portfolio continues to perform strongly, and

it completed follow-on investments in three portfolio companies, two

self-funded bolt-on acquisitions and disposed of one asset in the year.

We completed the final close of our North American Infrastructure

Fund, and the Fund made one new investment and three bolt-on

acquisitions for its existing portfolio companies in the year.

Table 5: Gross investment return for the year

to 31 March

Investment basis	2024 £m	2023 £m
Realised losses over value on the disposal of investments	(4)	–
Unrealised profits on the revaluation of investments	72	23
Dividends	35	33
Interest income from investment portfolio	11	14
Fees payable	(6)	–
Foreign exchange on investments	(9)	16
Gross investment return	99	86
Gross investment return as a % of opening portfolio value	7%	6%

At a glance

Gross investment return

£99m

or 7%

(2023: £ 86m or 6 %)

AUM

£ 6.7 bn

(2023: £ 6.4 bn)

Cash income

£ 113 m

( 2023: £107 m)

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3i Group plc | Annual report and accounts 2024 34

Infrastructure acquisitions

New investment: North American Infrastructure Fund

Amwaste

Amwaste, founded in 2010, is a provider of non-hazardous solid waste

disposal services in the southeastern US with operations in Alabama,

Georgia and Louisiana. It operates eight landfill sites, eight transfer

stations and one materials recovery facility.

The company’s service offering includes residential and commercial waste collection, landfill and post-collection operations. It serves over 300,000 customers per week including individual homeowners and some of the highest profile industrial, commercial and municipal customers in the southeastern US. The North American waste and recycling industry generates c.$75 billion in annual revenue with c.456 million tonnes of waste produced per annum in the US alone. Amwaste’s vertically integrated platform enables it to efficiently capture and internalise waste volumes, driving margin enhancement and providing a launch pad for future expansion. It has a strong track record of organic growth and significant white space opportunity. 3i invested £32 million in Amwaste in FY2024, as it continues to develop its North American Infrastructure Fund.

For more information

www.amwaste.net

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3i Group plc | Annual report and accounts 2024 35

Fund management

3iN

3iN generated a total return on opening NAV of 11.4% for the year to

31 March 2024, exceeding its total return target of 8% to 10%

per annum, and delivered its dividend target of 11.9 pence per share,

a 6.7% increase on last year.

This result was underpinned by the strong performance of 3iN’s

portfolio companies, as they continued to benefit from long-term

sustainable growth trends. TCR outperformed our expectations for

the year due to a number of contract wins, further increasing its

global presence and strong utilisation rates of its fleet as air traffic

levels continue to grow post the pandemic. Tampnet traded well in

the year, driven by the outperformance of its fixed and mobile units

and by the delivery of new installations across the North Sea and the

Gulf of Mexico. Valorem saw revenues from electricity generation

ahead of expectations driven by favourable wind conditions. Other

notable contributors include Infinis, Joulz, ESVAGT and Global

Cloud Xchange. DNS:NET continues to face challenges with its fibre

network roll out in Germany resulting in weaker performance in the year.

During the year, 3iN completed the realisation of Attero for proceeds

of €214 million, a 31% uplift on opening value. 3iN also completed

follow on investments in Future Biogas, DNS:NET and Ionisos and a

bolt-on acquisition for both TCR and Tampnet, both of which

required no further investment.

As investment manager to 3iN, in FY2024, we recognised a

management and support services fee of £51 million (2023: £49

million) and a NAV-based performance fee of £41 million (2023: £ 35

million). This performance fee comprised a third of the potential

performance fee for each of FY2024, FY2023 and FY2022, after the

performance hurdle was met in each year. In addition, we received a

performance fee of £21 million on the realisation of Attero from

managed funds that invested alongside 3iN.

North American Infrastructure Fund

Our North American Infrastructure Fund completed its final close in

December 2023, with final commitments of $739 million. As part of

this process, we received further external commitments during the

year, which resulted in a pro-rata rebalancing of existing fund

holdings, resulting in proceeds to 3i of £22 million.

The Fund completed a £32 million new investment in Amwaste, a

provider of non-hazardous solid waste disposal services in the

southeastern region of the US. Regional Rail continued its growth via

new customer additions and bolt-on activity, with the acquisitions of

Indiana Eastern Railroad, Ohio South Central Railroad and Clinton

Terminal Railroad, adding over 100 miles of freight rail to the

platform. Freight load traffic across Regional Rail's existing railroads

continued to grow. EC Waste saw good performance from its landfill

and transfer stations and, the business completed the acquisition of a

further landfill site in Puerto Rico in the year.

Assets under management

Infrastructure AUM increased to £6.7 billion (2023: £6.4 billion),

principally due to an increase in the share price of 3iN and good

performance across our US infrastructure portfolio and 3i Managed

Infrastructure Acquisitions Fund (“3i MIA”).

During the year, we agreed to sell our operational projects

infrastructure fund capability, comprising the management of the

BIIF and 3i EOPF funds, to certain members of the 3i Infrastructure

team, with the aim of simplifying 3i’s Infrastructure business and

facilitating its focus on core-plus infrastructure. At 31 March 2024, this

represented total AUM of £796 million. The sale is expected to

complete shortly. There is no material impact to 3i Group’s net assets

or return from this transaction.

Table 6: Assets under management as at 31 March 2024

Fund/strategy	Close date	Fund size	3i commitment/ share	Remaining 3i commitment	% invested3 at 31 March 2024	AUM £m	Fee income earned in 2024 £m
3iN1	Mar-07	n/a	£879m	n/a	n/a	3,011	51
3i Managed Infrastructure Acquisitions LP	Jun-17	£698m	£35m	£5m	87%	1,399	4
3i managed accounts	various	n/a	n/a	n/a	n/a	689	4
BIIF4	May-08	£680m	n/a	n/a	91%	437	3
3i North American Infrastructure Fund	Dec-232	US$739m	US$300m	US$85m	75%	541	3
3i European Operational Projects Fund4	Apr-18	€456m	€40m	€4m	87%	359	3
US Infrastructure	Nov-17	n/a	n/a	n/a	n/a	306	–
3i India Infrastructure Fund	Mar-08	US$1,195m	US$250m	n/a	73%	–	–
Total						6,742	68

1 AUM based on the share price at 31 March 2024.

2 First close completed in March 2022. Final close completed in December 2023.

3 % invested is the capital deployed into investments against the total Fund commitment.

4 Fee income earned is non-recurring.

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Infrastructure continued

3i Group plc | Annual report and accounts 2024 36

3i’s proprietary capital infrastructure portfolio

The Group’s proprietary capital infrastructure portfolio consists

of its 29% quoted stake in 3iN, its investment in Smarte Carte

and direct stakes in other managed funds.

Quoted stake in 3iN

Our 29% stake in 3iN (31 March 2023: 29%) was valued at £879 million

(31 March 2023: £841 million) at 31 March 2024, as its share price

increased by 4% year-on-year to 327 pence (31 March 2023: 313

pence). As a result, we recognised an unrealised gain of £38 million

(2023: unrealised loss of £93 million) and £31 million of dividend

income (2023: £29 million).

North American Infrastructure proprietary capital

Smarte Carte traded well in 2023 across most of its business lines,

supported by favourable economics and new contract wins. The

business continues to grow its international presence, recently

signing a new carts contract at London Heathrow Airport, one of the

largest cart operations in the world with over 14,000 trolleys. At 31

March 2024, Smarte Carte was valued at £306 million on a DCF basis

(31 March 2023: £300 million).

Table 7: Infrastructure portfolio movement for the year to 31 March 2024

Investment	Valuation	Opening value at 1 April 2023 £m	Investment £m	Disposals at opening book value £m	Unrealised profit  £m	Other movements 1 £m	Closing value at 31 March 2024 £m
3iN	Quoted	841	–	–	38	–	879
Smarte Carte	DCF	300	–	–	7	(1)	306
North American Infrastructure Fund2	DCF	171	36	(26)	20	(2)	199
3i MIA	Fund	65	–	–	6	–	71
3i EOPF	Fund	32	–	–	1	–	33
Total		1,409	36	(26)	72	(3)	1,488

1 Other movements include foreign exchange.

2 Includes Regional Rail, EC Waste and Amwaste.

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3i Group plc | Annual report and accounts 2024 37

Scandlines

Scandlines is held for its ability to deliver

long-term capital returns, whilst generating

cash dividends.

Performance

Scandlines’ performance was stable in the year, and it generated a GIR

of £10 million, or 2% of opening portfolio value (2023: £52 million, 10%).

Leisure volumes continued to grow, following a strong peak over the

summer. Freight volumes were softer compared to record levels in

2022, as a result of normalising demand, and a weaker macro-

economic environment particularly in Scandinavia and Germany. The

business remained cash generative in the year, resulting in the

receipt of £25 million of dividend income in FY2024 (2023:

£38 million).

Scandlines continues to invest in upgrading its fleet and reducing its

emissions. A new freight ferry for the Rødby-Puttgarden route, which

will be capable of sailing without direct emissions when fully

operating on electricity, is in the later stages of construction.

We continue to value Scandlines on a DCF basis and, at 31 March 2024,

its value of £519 million (31 March 2023 : £554 million) reflected the

dividends received in the year and a degree of caution on the outlook.

Foreign exchange

We hedge the balance sheet value of our investment in Scandlines.

We recognised a £15 million loss on foreign exchange translation

(March 2023: gain of £21 million) offset by a £20 million fair value

gain (March 2023: loss of £7 million) from derivatives in our

hedging programme.

Table 8: Gross investment return for the year

to 31 March

Investment basis	2024 £m	2023 £m
Unrealised losses on the revaluation of investments	(20)	–
Dividends	25	38
Foreign exchange on investments	(15)	21
Movement in fair value of derivatives	20	(7)
Gross investment return	10	52
Gross investment return as a % of opening portfolio value	2%	10%

At a glance

Gross investment return

£10m

or 2%

(2023: £ 52m or 10 %)

Dividend income

£25m

(2023: £38m)

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3i Group plc | Annual report and accounts 2024 38

What’s in this section
A responsible approach	40
1. Invest responsibly	42
2. Recruit and develop a diverse pool of talent	52
3. Act as a good corporate citizen	56
Our TCFD disclosures	58

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3i Group plc | Annual report and accounts 2024 39

A responsible

approach

We aim to generate attractive returns across the

cycle by behaving responsibly as an investor, an

employer and a corporate citizen.

We are a small organisation of fewer than 250 employees, with a

limited direct footprint. With assets under management of £34.7

billion, our impact on the environment and society is determined

largely by our portfolio. We have a long-term, responsible approach

to investment and aim to compound value through thoughtful

origination, disciplined investment and the active management of our

portfolio, with regard to the consequences of our actions on

stakeholders. This practice is built on our values, strong governance

and robust processes, both at 3i itself and at its portfolio companies.

This approach has allowed us to earn the trust of our shareholders, co-

investors and portfolio companies, and to recruit and develop

employees who share our values and ambitions.

Our reporting

We have chosen to report in accordance with the Global Reporting

Initiative (“GRI”) and Sustainability Accounting Standards Board

(“SASB”) standards. Please refer to our website for the GRI content

index and SASB disclosures. We also provide additional disclosures

across a number of areas in our data appendix and in the summaries

of relevant policies that are available on our website.

Governance and resources

The Board of Directors is responsible for the oversight of the Group’s

sustainability strategy, approach and policies, including the

Responsible Investment policy. It delegates day-to-day accountability

for sustainability to the executive management and, in particular, the

Chief Executive. The Chief Executive has established a number of

committees to support him in overseeing and monitoring policies

and procedures and to address issues if they arise. This includes an

ESG Committee, which assists and advises the Chief Executive,

directly and through the Investment and Group Risk Committees, on

relevant environmental, social and governance risks and matters,

including developing and proposing the Group’s approach to

managing ESG. It also coordinates the Group’s various sustainability

activities, including the management of ESG risks and opportunities

across the portfolio.

We have several dedicated sustainability professionals, both at

Group level, with a focus on the Group’s overall sustainability

strategy, objectives and reporting, and embedded within each of our

Private Equity and Infrastructure investment teams, with a focus on

the assessment and management of sustainability-related risks and

opportunities within existing and potential portfolio companies.

Page 101

Governance framework

GRI, SASB, Data appendix and summaries of sustainability policies

www.3i.com/sustainability/

Our sustainability strategy is defined by three key priorities:
Invest responsibly		Recruit and develop a diverse pool of talent		Act as a good corporate citizen
We give due consideration to the sustainability profile of portfolio companies before investing and throughout the holding period. We use our influence with our portfolio companies to ensure that they assess their environmental and social impacts and dependencies and, where relevant, devise strategies to address them.		Recruiting, retaining and developing our talent is a priority. We value diversity and believe that a variety of perspectives enhances our decision making.		We embed responsible business practices throughout our organisation by promoting our values and culture.
	Pages 42-51 Read more		Pages 52-55 Read more		Pages 56-57 Read more

Overview and strategy Business review Sustainability Performance and risk Governance Audited financial statements Portfolio and other information

3i Group plc | Annual report and accounts 2024 40

Science-based targets

On 22 March 2024, the SBTi approved 3i’s science-

based targets. Our targets cover our own

operations and our portfolio.

Scope 1 & 2 (own operations)

3i Group plc commits to reduce its absolute Scope

1 and 2 (market-based) GHG emissions by 42% by

FY2030 from a FY2023 base year.

Scope 3 (portfolio emissions)

3i Group’s portfolio targets cover 82% of its total

investment and lending1 by invested capital as of

FY2023.2

3i commits to:

• 31% of its listed and eligible Private Equity

portfolio by invested capital setting SBTi

validated targets by FY2028 and 100% by

FY2040 from a FY2023 base year

• A 68% per megawatt-hour (“MWh”) reduction

in GHG emissions from the electricity

generation sector within its eligible portfolio by

FY2030 from a FY2023 base year

• Continue providing electricity generation

project finance only for renewable electricity

through FY2030

1 The target language makes reference to “lending activities”. 3i does not

engage in lending activities, but had to word its targets in alignment with the

SBTi’s standard language for Financial Institutions.

2 As of FY2023, required activities made up 82% of 3i Group’s total investment

and lending by invested capital while optional activities made up 3% and out of

scope activities made up 15%.

External benchmarking

We believe that it is important to evidence our commitment to

operating sustainably. We therefore provide a wealth of relevant

information to shareholders and other interested stakeholders.

UN Principles for Responsible Investment

We have been signatories to the UN Principles for Responsible

Investment (“UN PRI”) since 2011. 3i scored four out of five stars for

the Policy, Governance and Strategy, Private Equity and Infrastructure

modules in the 2023 UN PRI assessment report.

Sustainability indices

3i is a member of FTSE4Good Index Series and of the Solactive

Europe Corporate Social Responsibility Index.

Orbis Advisory 2023 Private Equity ESG Transparency Index

3i was recognised as the Top ESG Performer overall and in the mid-

market category of the Orbis Advisory 2023 Private Equity ESG

Transparency Index. This index assesses the ESG disclosures of 161

private equity firms listed in the BVCA directory across six categories:

global buy-out funds, mid-market private equity, growth equity,

alternative lenders, direct investors and infrastructure funds.

Sustainability ratings

We engage with multiple rating providers that assess our ESG

performance based on their own methodologies. The summary of

our ratings as at 8 May 2024 (except where indicated) is as follows:

Rating body	Latest rating and scoring scale
CDP	Climate change score: B Scale: A to D-
S&P Global CSA	48 (93rd percentile) Scale: 0-100 (higher scores are better)
FTSE Russell	3.8 (81st percentile) Scale: 0 to 5 (higher scores are better)
ISS ESG	ISS ESG Corporate Rating: B- Scale: A+ to D-
Sustainalytics3	10.4 Low Risk Scale: from Negligible (0-10) to Severe (40+)

3 As at October 2023. Copyright © 2024 Morningstar Sustainalytics. All rights reserved. This section contains

information developed by Sustainalytics (www.sustainalytics.com). Such information and data are proprietary

of Sustainalytics and/or its third party suppliers (Third Party Data) and are provided for informational purposes

only. They do not constitute an endorsement of any product or project, nor an investment advice and are not

warranted to be complete, timely, accurate or suitable for a particular purpose. Their use is subject to

conditions available at https://www.sustainalytics.com/legal-disclaimers.

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A responsible approach continued

3i Group plc | Annual report and accounts 2024 41

Invest responsibly

We believe that a responsible approach to

investment aligns with our values and supports

the delivery of attractive returns from our

portfolio over the long term.

We have majority or significant minority holdings in our core portfolio

companies and are represented on their boards. We exercise our

influence to ensure that they assess their material environmental and

social impacts and dependencies and, where relevant, support them

in developing plans to mitigate ESG risks and invest in value creation

opportunities that may arise.

Our investment approach is based on four pillars:

• Long-term stewardship

• Thematic origination

• Careful portfolio construction

• Assessment and management

Pages 16-17

Our long-term, responsible approach

The ESG Committee is responsible for refining our approach to

ensure that it remains aligned with emerging best practice, evolving

stakeholder expectations and recent and upcoming sustainability

regulations across our markets. It reviews how ESG-related risks and

opportunities are assessed throughout our investment and portfolio

management activities and develops and recommends changes to

our processes and to our Responsible Investment policy.

Our Responsible Investment policy

Our Responsible Investment (“RI”) policy sets out the types of

businesses in which 3i will not invest, as well as minimum

requirements in relation to ESG matters, which we expect new

portfolio companies to either meet or commit to meeting over a

reasonable time period. We screen all investments against the RI

policy, irrespective of their country or sector.

3i’s expectations as set out in the RI policy are to invest

in businesses which are committed to:

The environment

A cautious and responsible approach to the environmental

management of their business operations (and those of their supply

chain) by making efficient use of natural resources and mitigating

environmental risks and damage.

Business integrity

Upholding high standards of business integrity, avoiding corruption in all

its forms, and complying with applicable anti-bribery, anti-fraud, anti-

money laundering and data protection laws and regulations.

Fair and safe working conditions

Respecting the human rights of their workers and of the people working

in their supply chain; maintaining safe and healthy working conditions for

their employees, contractors and the people working in their supply

chain; treating their employees fairly; upholding the right to freedom of

association and collective bargaining; treating their customers fairly and

respecting the health, safety and wellbeing of those affected by their

business activities.

Good governance

Implementing a strong corporate governance and risk management

culture and complying in form and substance with established best

practice in corporate governance which is appropriate to the relative

size and complexity of the relevant business and the markets in which it

operates.

Our RI policy was updated in May 2024 to reflect the introduction of

considerations and criteria to enable 3i to achieve its science-based

targets over time, including:

• restrictions on coal investments and a referral mechanism for

consideration of other fossil fuel investments and investments in

companies that derive a significant proportion of their revenues

from fossil fuel-related activities; and

• the introduction of a requirement for in-scope portfolio companies

to set science-based targets within a reasonable timeframe.

A summary of our Responsible Investment policy

www.3i.com/sustainability/responsible-investment/responsible-investment-policy/

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3i Group plc | Annual report and accounts 2024 42

Assessment and management of ESG factors in our investment and portfolio management processes

The active management of ESG risks and opportunities is integral to our investment, portfolio management and value creation processes.

We embed an assessment of the long-term sustainability profile of existing and new investments in our processes. Once invested, we support

companies as they develop strategies and respond to stakeholder expectations, and we gather data to measure progress against ESG

objectives. This enables us to prepare companies ahead of any exit opportunity.

Pre-investment

During investment period

Exit

Assessment and action planning • Screen each opportunity against the requirements of the RI policy at the first stage of our process • Identify and give due consideration to the most material ESG factors inherent in each investment opportunity • Commission specialist due diligence on ESG matters where required • Include ESG considerations in Investment Committee materials • Integrate relevant action points into the post- investment action plan

Use of influence and engagement • Implement robust governance and procedures at the portfolio company to ensure that ESG risks and opportunities are assessed and managed appropriately • Use active participation and influence on portfolio company boards to ensure they are addressing the ESG risks in respect of their businesses • Leverage the 3i portfolio and network to provide introductions to other companies, useful contacts and advisers and share best practice • Engage with portfolio companies and provide support as they devise their sustainability strategies and implement and deliver related projects

Data collection and monitoring • Collect ESG data from portfolio companies on an annual basis to understand the baseline and measure progress over time • Prepare detailed quantitative and qualitative ESG assessments annually as part of the portfolio company review process • Discuss ESG assessment during portfolio company review meetings, involving investment teams, Investment Committee members and selected 3i Board members • Set and monitor progress with portfolio-wide objectives in line with ESG minimum requirements set in the RI policy

Preparation and communication • Consider the data collection, reporting and governance structures which may be required in advance of a sale process • Work with advisers to communicate relevant sustainability information to potential buyers

Objectives

The Investment Committee may decline investment opportunities where red flags are raised in the pre-investment ESG risk assessment that cannot be remedied post investment. Further specialist due diligence may be commissioned to assess whether a situation can be remedied.

We use our influence to assess and mitigate risk and ensure value creation opportunities are captured.

Data is used to develop our understanding and management of ESG matters, to enhance our decision making, to facilitate better financing opportunities and to identify key themes, trends and opportunities across the portfolio. It is also used to comply with our reporting obligations.

Good ESG performance can protect and potentially enhance the value achieved in an exit.

In FY2024, we undertook a second phase of climate change scenario analysis for our portfolio. This work improved our understanding of the

critical drivers behind climate-related risks and opportunities in our existing holdings. We used some of the outputs of this work in the

enhancement of our due diligence framework which we will use to assess our forthcoming investment pipeline.

During the year, we implemented a new software tool to increase the consistency and quality of the ESG data we receive from portfolio

companies as part of the annual ESG assessment questionnaire. This tool enables us to prepare year-on-year analyses of portfolio company

performance, enhancing our portfolio monitoring activities.

We continued to offer training to our investment executives on ESG topics that may be relevant to our portfolio, including human rights.

Pages 58-68

TCFD disclosures and climate change scenario analysis

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3i Group plc | Annual report and accounts 2024 43

Proactive engagement with our portfolio

Once invested, we use our influence with portfolio companies with a

view to ensuring, over the life of the investment, that they monitor

ESG factors and that they have a proportionate sustainability strategy

in place. This includes:

• board or management-level responsibility and appropriate

governance, reporting structures and resourcing to manage ESG

risks and opportunities that may impact their business over the

holding period;

• assessing material ESG issues and devising appropriate strategies

to address them;

• measuring their carbon footprint, setting science-based targets or

appropriate decarbonisation plans, and demonstrating

decarbonisation progress within a reasonable timeframe;

• establishing relevant and proportionate governance and

sustainability-related policies and procedures;

• ensuring they are well prepared to meet regulatory requirements;

and

• considering stakeholders in their management of ESG issues and

communicating transparently.

We leverage our knowledge and expertise across our portfolio and

facilitate the sharing of best practice, either through introductions, or

through forums on themes including plastics, carbon and information

security and digital innovation. In addition, ESG was a key agenda

item at our portfolio company CFO forum in November 2023, where

a discussion facilitated by an external specialist consultancy and our

internal portfolio sustainability team focused on the role of the CFO

and finance team in enabling the delivery and monitoring of

sustainability strategies with applicable KPIs. This theme is particularly

relevant given upcoming sustainability regulations in the EU.

In February 2024, we held our inaugural sustainability forum in

Amsterdam, welcoming sustainability representatives from 30 of our

Private Equity and Infrastructure portfolio companies. The agenda

included discussions and expert presentations on topics ranging

from how to develop an effective sustainability strategy and prepare

for ESG regulation, to science-based targets and value-led

decarbonisation. A number of delegates from our portfolio

companies also presented their strategies and experiences of these

topics. The forum was an opportunity for the delegates to get to

know one another in an informal setting and establish a network of

peers across our portfolio. Following the forum, we launched a virtual

space where our team and the sustainability representatives of our

portfolio companies can remain engaged on these and other

relevant topics.

The case studies on pages 46 to 51 highlight a few examples of the

progress achieved by our portfolio companies on some of their

material ESG issues.

69%

of portfolio companies with board or

management team-specific responsibility

for ESG management and compliance1

46%

of portfolio companies publish

sustainability reports1

97%

of portfolio companies report carbon

emissions1

1 Excluding PPP project investments and some legacy minority and other

minority investments where we have limited influence.

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3i Group plc | Annual report and accounts 2024 44

ESG risks in our portfolio

Through our pre-investment assessment and subsequent monitoring and engagement, we have identified a number of key ESG risks that our

portfolio companies are exposed to. These, together with applicable mitigating actions, are summarised in the table below.

Key risk	Mitigation
Climate change Risk of losses due to the physical effects of climate change or to the transition to a low- carbon economy	Climate change affects many of our investments through changes in the regulatory framework, changes in consumer preferences or stakeholder pressure to reduce their carbon and broader environmental footprint. In addition, many countries have set demanding net zero or emissions reduction targets, the achievement of which relies heavily on the decarbonisation of the private sector. We carried out climate change scenario analyses in each of the last two years. These have allowed us to refine our understanding and assessment of climate risks in our investment and portfolio management activities. Specific climate change risks and strategies we use to mitigate them are set out in our TCFD disclosures on pages 58 to 68.
Human rights Risk of potential adverse impacts on human rights resulting from the actions or operations of a portfolio company	3i’s approach to human rights in the context of its investment portfolio is incorporated within its RI policy. 3i’s policy has been not to invest in businesses which we view as unethical, including those which do not respect the human rights of their workers. We specialise in core investment markets in Europe and North America, which are generally considered to have a relatively low potential risk of human rights breaches. However, we are aware that many of the companies we invest in have operations and/or supply chains based in higher risk countries. Human rights risks are assessed in our detailed portfolio company reviews. For companies with higher-risk supply chains, there is a focus on whether the company has a supply chain policy or code of ethics in place, who at board level has responsibility for monitoring supply chain issues, the extent to which supply chain audits are carried out and whether there have been any material issues in these areas.
Occupational health and safety Risk that a person may be harmed or suffers adverse health effects if exposed to a hazard as part of their employment	The safety and wellbeing of our portfolio companies’ employees is a priority for us. Occupational health and safety is a risk across many of our portfolio companies. We monitor health and safety data through our ESG assessments and log incidents on our central risk register. To mitigate health and safety risks, as significant shareholders we work to ensure that portfolio companies have robust health and safety policies and procedures in place, that incidents are logged appropriately and acted upon, that there is clear board-level responsibility for health and safety and that sufficient resources are dedicated to this area.
Environmental and social regulation Risk that the development of existing or new ESG laws and regulations could impact portfolio companies operationally or financially	We ensure that our portfolio companies stay abreast of regulatory developments, understand their impacts on their operations and finances, and that they comply in a timely fashion.
Cyber security Risk of exposure or loss resulting from a cyber attack or data breach	3i actively promotes cyber resilience in its portfolio companies as a key component of the corporate governance programme through its representatives on the boards. We use an external firm of cyber security specialists to conduct reviews of the cyber resilience of our core portfolio companies’ key systems. The resulting reports are discussed with the management teams of the relevant portfolio companies and specific actions agreed where appropriate. Cyber resilience is one of the governance topics reviewed at the semi-annual portfolio company process using the cyber security-related data collected as part of the ESG questionnaire and is monitored on a portfolio-wide basis.
Fraud Risk of unexpected loss resulting from fraudulent activities carried out by either internal or external actors	We monitor and manage fraud risk in our portfolio companies through our investment and portfolio management processes and aim to ensure that all portfolio companies have adequate governance structures and resources to manage this risk. Fraud incidents are logged and shared among investment teams.
Sanctions Risk of potential exposure or harm resulting from violations of economic sanctions imposed by international bodies or individual countries	The increase in sanctions following Russia’s invasion of Ukraine impacted a very small number of our portfolio companies. 3i’s policy is to comply with all applicable UK and international economic sanctions, both directly and in relation to its investment activities. Compliance with our sanctions policy is monitored by our compliance team.
Changing consumer preferences Risk that consumers may switch to competitors who better understand and cater to their evolving ESG preferences	We ensure that our portfolio companies understand their material environmental and social impacts, stay abreast of market developments and of customer and consumer preferences, and that they develop their commercial offering so that it remains attractive and meets stakeholder expectations.

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3i Group plc | Annual report and accounts 2024 45

Action
Action believes that sustainability should be accessible for all. Its comprehensive Action Sustainability Programme is structured around four pillars: people, planet, product and partnerships. It sets out Action’s ambitions on climate, the development of its people, on community partnerships and ensuring minimum social and environmental standards in its supply chain. Since we became a long-term shareholder in Action in 2011, we have supported it as it has developed its sustainability strategy. Action renewed its materiality assessment in 2023, which identified eight material sustainability topics. We will cover progress on two of these in this section. Please refer to the Action Update 2023 for more detail on these and other material topics. Progress on material topic: energy and emissions Action has a target to reduce its Scope 1 and 2 emissions by at least 60% by 2030 from a 2021 baseline. By the end of 2023, it had achieved a 46% reduction against the baseline while delivering strong growth in its network of stores and distribution centres. To achieve this, 90% of electricity is now procured from renewable sources, most stores have been disconnected from the gas supply and solar panels have been installed at seven out of its 13 distribution centres. Action aims to have disconnected gas, and fitted LED lighting, at all stores by the end of 2024. In addition, the company is now using HVO fuel for all of its 150 owned trucks and is piloting four new zero-emission1 e-trucks at distribution centres in the Netherlands and Germany. Action calculated its Scope 3 emissions for the first time in 2023, using a 2021 baseline. The exercise showed that Scope 3 emissions account for 99% of Action’s total carbon footprint, with product raw materials, manufacturing and transportation representing 75% of the total. The company will use the insights from this exercise to develop its climate strategy, engaging with suppliers and supply chain partners to reduce Scope 3 and product-related emissions in the future. As a first step to addressing its Scope 3 emissions, Action has agreed with its most significant ocean freight carriers to use eco-fuels for shipments from Asia to Europe. The company has committed to set near-term emissions reduction science-based targets covering Scopes 1, 2 and 3 and aims to submit these for validation by the SBTi during 2024.		Progress on material topic: supply chain transparency and responsible sourcing Action requires its suppliers to sign up to an ethical sourcing policy, which sets out minimum standards in areas such as forced labour, health and safety, pay and working rights. In addition, it requires all factories in high-risk countries to have an annual social compliance audit. Regular spot checks are performed to ensure factories remain compliant. The company looks to expand this programme every year, and conducted 2,104 assessments at suppliers and factories in 2023, compared to 1,682 in 2022. Action works with external partners to ensure expected standards are upheld, including amfori and supply chain expert ImpactBuying. Action has a long-term commitment to supply chain transparency and aims to deliver transparency to all tiers of production by 2030. The current priority is final manufacturing factories (tier 1), where the company has an ambition to achieve 100% transparency by 2024 (from 88% in 2023). This is an important step to ensure that suppliers respect human rights and safety. The business thinks strategically about where it sources its products from and is actively diversifying its product sourcing to more geographies. Last year, despite significant sales growth, total European sourcing was maintained at 45%. During 2023, Action achieved its goals to source 100% sustainable cotton (private and white label products) and cocoa (private label products) and made significant progress towards its goal of achieving 100% sustainably sourced timber by 2024, with 95% of timber products certified as sustainable in 2023.
		1 The trucks will have zero direct emissions if they are charged using renewable electricity.

Pages 22-25

Action

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3i Group plc | Annual report and accounts 2024 46

Overview and strategy

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3i Group plc | Annual report and accounts 2024 47

	ten23 health
	ten23 is a leading development, manufacturing and testing provider of sterile products for the pharmaceutical and biotech industries. Since its establishment in 2021, ten23 has been strongly purpose-driven, with commitments to placing patients, people and planet at the centre of its decisions, and operating with a core principle of “fairstainability” (fairness and sustainability). This ethos is a key differentiator in a market primarily focused on patient health and safety, and where the environment is frequently a secondary consideration. ten23 has a number of initiatives ongoing across its patients and people pillars. As part of its planet strategy, ten23 identified plastic waste and GHG emissions reduction as material focus areas. Progress on material topic: plastic waste ten23 set an objective to reduce, substitute or recycle plastics wherever possible, with a goal of removing twice as much plastic from the environment than is sent to final disposal, by 2025. To achieve this, ten23 reduced the use of plastic disposables in labs, switched to biodegradable or reusable materials where possible, and improved sorting and recycling rates through the use of plastic waste collection bins. During 2023, plastic waste sent to incineration reduced from 5.0 tonnes (in 2022) to 2.7 tonnes, thanks to an increase in the recycling rate from 34.4% to 43.3%, despite the company’s year-on-year growth. Any plastic waste which cannot be separated for recycling is offset through a partnership with Seven Clean Seas, an organisation which removes plastic waste from marine environments. Through this partnership, ten23 has removed 19 tonnes of waste from oceans and rivers to date, representing more than 150% of the plastic waste generated by the company since its inception.		Progress on material topic: GHG emissions reductions ten23 aims to reduce Scope 1 and 2 emissions by 50% by 2025 on an intensity basis to reflect the growth and maturity of the business since its establishment. In the first two years of operations, the company established a baseline for 2021 and delivered a 44% reduction against this, through a combination of procuring 100% renewable electricity and implementing several energy efficiency measures throughout its two facilities, including a cooling system upgrade, a new HVAC system installation, office shut-downs implemented to reduce heating requirements between Christmas and New Year, retrofitting of motion sensors into lighting and the purchase of an electric minivan and electric bikes to enable commuting between company locations. ten23 expects to meet its initial emissions reduction target one year ahead of plan and has an ambition to set further emissions reduction targets in line with the SBTi criteria during 2024. Collaboration In addition to making meaningful changes within its own operations, ten23 aims to address systemic industry issues by working in collaboration with its suppliers, other pharmaceutical companies and various other healthcare stakeholders. One example of this includes a partnership between ten23 and Elio, an eco-design software provider, to co-design and develop a tool which will enable technical experts to integrate sustainability considerations into product and process design. The purpose of this collaboration is to enable change across the healthcare industry, by prioritising sustainable practices without compromising the innovation, efficacy, safety and quality of sterile medicine formulations and manufacturing practices.

Read more

www.ten23.health

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3i Group plc | Annual report and accounts 2024 48

WilsonHCG		WilsonHCG extends its experience and expertise in DEIB to support clients to attract diverse and qualified candidates. For example, the company supported a global IT consulting company to achieve a specific objective of increasing diversity hires across North America and EMEA. WilsonHCG provided an inclusive and targeted approach to candidate sourcing, and networking strategies to encourage applications from underrepresented groups. This resulted in a 32% increase in the female diversity slate and a 98% offer-to-hire rate. Progress on material topic: employee engagement and development Employee development at WilsonHCG begins in the first 90 days of an employee’s career, when a personalised onboarding plan ensures they are set up for success. Following this, multiple internal certification programmes provide dedicated training into specialist areas of recruitment. Once employees reach leadership positions, a dedicated programme provides them with foundational skills and helps to build a peer support network. An ongoing development programme with monthly content is attended by 87% of leaders across the business. WilsonHCG’s commitment to fostering an innovative working environment has enabled the company to become an employer of choice. Employees are supported to work how and where they are most effective, including through a flexible daily schedule and the opportunity to work from anywhere. As a result, the organisation has a blended workforce of office-based and virtual employees spanning 65 countries and 78% of employees state they have a healthy balance between work and personal life. The prioritisation of workplace culture led to the company earning Great Place To Work Certification™ for the third consecutive year in 2023, being named a Fortune Best Workplaces in Consulting & Professional Services™ for two years in a row and named as a Best Workplace for Millennials™.
WilsonHCG is a provider of talent solutions offering recruitment process outsourcing, executive search, contingent workforce solutions, labour market intelligence and talent consulting services. As a professional services business, employee development and recognition, and diversity are material topics for WilsonHCG. The company is focused on attracting, developing and retaining a diverse, global pool of over 1,500 talented employees, and supporting their clients to do the same. Progress on material topic: diversity WilsonHCG is committed to fostering Diversity, Equity, Inclusion and Belonging (“DEIB”) through its culture and values, and by hiring top talent from across a diverse society. One way the company achieves this is through its BRITE programme (Belonging, Respect, Inclusion, Togetherness and Equity) to promote inclusiveness across the organisation by highlighting employees’ upbringing and background to break down social barriers and enable greater understanding of others. To support DEIB, collaboration and networking across the workplace, nine Employee Belonging Groups have been established as safe places for individuals to discuss traits and experiences which make people diverse. These voluntary groups, which include the Black community, veterans and military spouses, and neurodivergent employees, have over 500 members. Understanding that achieving diversity requires an ongoing commitment, a DEIB committee is tasked with implementing initiatives across the organisation. During 2023, the committee hosted its first company-wide Diversity Summit, attended by more than 1,200 employees. Highlights included a workshop on inclusive hiring practices, a leadership panel, and a discussion on DEIB hosted by an external speaker.
			Read more www.wilsonhcg.com

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3i Group plc | Annual report and accounts 2024 49

	Joulz
	Joulz owns and provides essential energy infrastructure equipment and complementary services to industrial and commercial customers in the Netherlands, assisting them in their energy transition journey. Joulz’s service offering includes medium-voltage infrastructure (transformers and their related infrastructure), storage (mainly battery energy storage systems), solar (large-scale installations under operational lease or with government subsidies), metering (electricity and gas meters) and EV charging (AC and DC charge points). Its expertise is in the provision of integrated solutions which combine multiple service offerings to create a “virtual grid”, addressing challenges such as grid congestion. Progress on material topic: GHG emissions reduction Given Joulz’s key role in supporting customers with electrification, the business identified the development of its own credible decarbonisation plan as a key pillar of its sustainability strategy. Joulz’s assessment of its Scope 1 and 2 emissions in 2022 indicated that they were limited and largely driven by its vehicle fleet, stationary combustion used in their operations and gas heating in offices, which accounted for c.83% of the combined Scope 1 and 2. The remaining 17% was due to purchased electricity, mainly for office use. Following this assessment, Joulz set near-term emissions reduction science-based targets, receiving SBTi validation in January 2024. These targets include a commitment to reduce Scope 1 and 2 emissions by 42% by 2030 from a 2021 baseline and a commitment to measure and reduce Scope 3 emissions in due course. Due to its size, Joulz was able to follow the SME route developed by SBTi and did not have to include a specific Scope 3 reduction target.		Joulz plans to achieve its targets through: a detailed reduction plan aligned with its sustainability strategy, including the use of biofuels; a transition to a full electric car fleet; procuring renewable electricity in its offices; potential rooftop solar solutions; and the reduction of natural gas use in offices and operations. Progress on material topic: occupational health and safety performance and initiatives Health and safety is another important topic for Joulz. In 2023, the business expanded its health and safety team to increase safety efforts and deliver on safety initiatives. For example, emergency response procedures were refreshed and evacuation training provided to employees, and a number of safety campaigns were held. An awareness campaign was executed during 2023, consisting of live sessions with employees, narrowcasting and intranet messaging. Special attention was given to asbestos, which is a risk in the environment in which Joulz operates. This is in addition to the regular workplace inspections, employee certifications and incident/near miss reporting which are part of Joulz’s safety and quality certifications. As a result, the business demonstrated improved performance in 2023 with the ratio of Lost Time Incident Frequency Rate decreasing to 0 (from 7.9 in the prior year). Both emissions and health and safety incidents are on the Joulz top level scorecard, to which senior executive remuneration is linked.

Read more

joulz.nl

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3i Group plc | Annual report and accounts 2024 50

	Future Biogas
	Future Biogas is one of the largest anaerobic digestion (“AD”) plant developers and producers of biomethane in the UK. Established in 2010, it owns two AD plants with one further AD plant in construction, and operates 10 AD plants mainly on behalf of institutional investors under medium- to long-term contracts, converting energy crop feedstocks into biogas. Biogas can be used to generate renewable electricity or be upgraded into biomethane and injected into the UK’s national gas network. There is growing demand for domestically produced biomethane which, as a direct substitute for fossil natural gas, plays an essential role in decarbonising some of the UK’s gas dependent sectors such as heat, transport and manufacturing. Progress on material topic: decarbonisation Future Biogas is developing a new generation of unsubsidised AD plants and plans to sell the resulting biomethane under long-term offtake agreements to its offtake partners. In September 2023, Future Biogas entered into a 15-year partnership with AstraZeneca to establish the UK’s first unsubsidised industrial- scale supply of biomethane gas. Future Biogas will supply several of AstraZeneca’s sites with up to 100 gigawatt hours (GWh) per year. Such a partnership provides a blueprint for wider commercial adoption of renewable gas in the UK. The collaboration with AstraZeneca, set to begin in early 2025, is expected to result in a significant reduction of GHG emissions of approximately 20,000 tonnes of CO2 equivalent.		Future Biogas is optimising the carbon intensity of its biomethane production. This pioneering effort includes reducing methane slip and facilitating the accumulation of soil organic carbon in soils, alongside a range of other measures targeting emissions from both crop production and on-site activities at the AD facility. Progress on material topic: sustainable farming Future Biogas is actively engaging with the farmers it purchases feedstock from to support them in the transition to more regenerative land management practices. The co-production of food and energy can offer multiple environmental benefits – increasing crop yields, reducing the demand for plant protection products (pesticides), enriching biodiversity, and improving soil health, while decarbonising food and energy systems. In addition, the anaerobic digestion of the crops for the production of biogas has a by-product, known as digestate, which is used as a carbon and nutrient-rich bio-fertiliser displacing the need for artificial fertilisers, and replenishing soils with organic matter which is essential for healthy soil and its ability to act as a carbon sink. In October 2023, Future Biogas established an agricultural advisory board made up of leading academics and industry experts to provide the business with independent farming, scientific and market expertise focusing on a broad range of subjects including sustainable farming, scientific research and policy. This will ensure a wide spectrum of perspectives and specialisms are considered in the scrutiny applied to Future Biogas’ subsidy-free projects.

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3i Group plc | Annual report and accounts 2024 51

Recruit and

develop a diverse

pool of talent

Our people are our most valuable asset.

Recruiting, retaining and developing our talent

is therefore a priority.

We have an open and non-hierarchical culture, provide an inclusive

and supportive working environment with opportunities for training

and career development, and foster the physical and mental

wellbeing of our employees. We value diversity and believe that a

variety of perspectives enhances our decision making. Our

recruitment, promotion and reward processes are based solely on

merit. We are an equal opportunities employer and prohibit all forms

of discrimination.

Human rights

We do not procure services from, nor invest in businesses which

make use of slavery, servitude, human trafficking, forced labour,

exploitation, compulsory labour or harmful child labour.

Our policies are consistent with internationally-recognised human

rights principles such as the UN Global Compact. We comply fully

with applicable human rights legislation in the countries in which we

operate, for example covering areas such as freedom of association

and the right to collective bargaining, equal remuneration and

protection against discrimination. We also encourage our business

partners and suppliers to adopt the same standards with respect to

human rights. Given the composition of our workforce, which is

characterised by a very small number of employees with very diverse

roles, and considering the nature of our business, our employees are

not unionised, nor do they engage in collective bargaining.

We published our statement on modern slavery for the financial year

ended 31 March 2023 on our website in September 2023, and will

update this statement in September 2024.

Diversity, equity and inclusion strategy and initiatives

We cultivate an inclusive environment for existing and prospective

employees which respects, involves and leverages diverse talent for

greater organisational good. Our main focus is gender and ethnic

diversity, as well as diversity of thought, perspective and background.

We have made reasonable progress in achieving greater diversity

within our organisation across a number of senior investment and non-

investment roles. We aim to continue to improve diversity within our

ranks by considering diversity in all recruitment processes. However, we

are a small organisation with relatively low turnover and recruitment

volumes, which means that it is not feasible for us to implement formal

diversity targets. We recognise, therefore, that achieving better

diversity for us will continue to be an incremental journey, and we aim

to build on our progress with a number of initiatives.

In FY2023, we set up a Diversity, Equity and Inclusion (“DE&I”)

steering group chaired by our Chief Human Resources Officer and

with members drawn from several functions across the organisation.

This steering group provides a forum to discuss DE&I issues and

suggest potential initiatives to improve our performance in this area.

During the year, we expanded the reach of our Leading with Impact

Programme, through which we encourage leaders to reflect on

personal and group biases, with the objective of gaining insights into

how these influence their everyday behaviours and decision making.

Building upon the successful implementation of this programme

within our Private Equity and Infrastructure investment teams in

FY2023, we extended it to our Professional services team leadership

in FY2024. To date, 19 senior employees have taken part in this

programme.

Our internal mentoring programme contributes to our DE&I efforts

by ensuring that mentees receive personalised guidance aligned with

their individual needs and career aspirations. Our mentors undergo

training in bias awareness and inclusion, building their DE&I

knowledge, skills and confidence. This programme is open to all

employees across all geographies and levels of seniority and

supports our wider goal of creating a diverse pipeline of talent, based

on the principles of fairness and equity.

We place great importance on diversity of thought and perspectives.

Recognising its significance, we have been evaluating our individual

and team dynamics to enhance effectiveness and foster inclusivity. In

FY2024, our professional services employees participated in the

Myers Briggs Type Indicator assessment, one of the most widely used

tools for understanding normal personality variations, and a great

instrument to help shape the professional development of individuals

and teams. This was followed by externally facilitated sessions,

delving into our preferences and different ways of working. These

sessions had already been implemented within our Private Equity and

Infrastructure investment teams in the preceding financial year.

During the year, we also arranged a training session with Dr Eliza

Filby, an historian of generational evolution and contemporary

values, on managing a multi-generational workforce in the post-

pandemic age.

Our Equal Opportunities and Diversity, and Global Recruitment and

Selection policies establish that all 3i employees, contract workers

and job applicants are treated fairly and are offered equal

opportunity in selection, training, career development, promotion

and remuneration.

Read more

www.3i.com/sustainability/sustainability-policies/

No incidents of discrimination were reported in FY2024.

249	27
employees1 as at 31 March 2024	nationalities as at 31 March 2024

1 Global employee headcount.

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3i Group plc | Annual report and accounts 2024 52

Progress and action on gender diversity

We recognise the importance of achieving better gender diversity at

3i and believe we are making reasonable progress in that respect,

within the constraints of a small organisation with modest staff

turnover. Of the 23 new hires we made during the year, 13 were

female and 10 were male1.

As at 31 March 2024, 3i’s total of 249 employees was broken down as

follows, based on biological sex1:

	Female	Male	Total
3i employees	101	148	249
Senior managers2	7	17	24

1 Note that we refer to “female” and “male” when discussing biological sex and to “women” and “men” when

discussing gender. The information of biological sex is gathered through employees’ legal documents shared

with us.

2 Senior managers include Simon Borrows, James Hatchley and Jasi Halai, our Chief Executive, Group Finance

Director and Chief Operating Officer, who are also Board members. This disclosure is based on the criteria set

out in Section 414C of the Companies Act 2006. This data is different to the data provided for the FTSE

Women’s Leader review which defines senior management as a level below Executive Committee (excluding

personal assistants and administrative staff). Using that definition, out of 61 senior managers, 15 were female

while 46 were male as at 31 March 2024.

Gender diversity has long been a challenge in the investment

industry. According to the BVCA and Level 20 Diversity & Inclusion

Report 2023, there have been positive developments, but progress

towards gender parity remains slow across the industry: women

made up 40% of the UK private equity and venture capital workforce

in 2022 (38% in 2021), but only 24% of UK investment team

professionals (20% in 2020). Slow progress towards gender parity has

been largely attributed to: (i) a narrow talent pool, as typical feeder

industries (such as investment banking, accounting and consulting)

remain male-dominated, particularly at more senior levels; (ii) a

perception of poor work/life balance, both in the investment industry

and feeder industries; and (iii) a lack of relevant role models.

A substantial improvement in gender diversity in our industry will take

many years, and will only be achieved through a multi-pronged

approach which will include grass-roots education and advocacy work

in schools and universities, for example, as well as positive action

taken by us and other investment firms on recruitment, flexible

working and parental policies. In addition to focusing on diversity in

our recruitment processes and continuing our mentoring

programme, we also offer reasonable flexibility at work and a range

of family-friendly policies, the details of which can be found on our

website. For example, as part of family-friendly benefits in the UK, we

provide maternity and paternity leave, adoption leave, an option for

shared paternal leave as well as bereavement and compassionate

leave. Our HR team periodically reviews our polices and legal

requirements to ensure they are competitive and compliant with 

local practices.

Read more on family-friendly policies

www.3i.com/sustainability/sustainability-policies/

We continue our contribution to industry-wide work and advocacy on

gender parity through a number of industry associations and by

participating in forums and initiatives that promote the advancement

of women in the investment sector.

3i is a member of Level 20 in the UK. We also recently joined

Synergist Network, the US national network of women in investing,

focused on connecting women in the first decade of their investing

careers and providing them with the infrastructure and network

critical for long-term success.

We also have signed up two members of our Professional Services

team to WeQual, a global, peer-led community for large

organisations seeking to support, connect and develop their women

leaders.

3i is an official sponsor of Level 20

Level 20 is a not-for-profit organisation dedicated to

improving gender diversity in the European private equity

industry. It is sponsored by over 120 private equity firms. Its

ambition is for women to hold 20% of senior positions in this

industry. It works to empower women who already work

within the industry, encourage new talent to join and provide

leadership teams with insight and best practice solutions to

help them address current gender imbalances within the

industry and their firms. It aims to achieve its goals through

four key pillars of activity:

• Mentoring and development

• Networking and events

• Outreach and advocacy

• Research

Read more

www.level20.org

3i participates in the GAIN Empower

Investment Internship Programme

(in partnership with Level 20)

GAIN (Girls Are INvestors) is a community of investors, with

charitable status, set to improve gender diversity in

investment management by building a talent pipeline of

entry-level female and non-binary candidates. GAIN aims to

inform young women with online resources and to inspire

them with a strong network of relevant role models, who

speak in high schools and universities around the UK and

feature on its online channels, delivering compelling and

high-impact messages on the many benefits of investing as a

career. Among the initiatives managed by GAIN is a summer

GAIN empower investment internship programme, open to

women and non-binary students across the UK. 3i was one of

98 firms participating in the 2023 summer internship

programme, taking on three interns for paid internships. We

will renew our participation in the scheme with three further

interns joining 3i’s investment teams for paid internships in

the summer of 2024. In addition to the internship

programme, a number of our employees are taking part in

the GAIN 1-2-1 mentoring programme, both as mentors 

and mentees.

Read more

www.gainuk.org

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3i Group plc | Annual report and accounts 2024 53

Progress and actions on ethnic diversity

We continue to make progress towards the fair representation of

ethnic minorities within our organisation.

As at 31 March 2024, approximately 15% of 3i’s total UK employees

declared to have an ethnic minority (excluding white minority)

background. This statistic is based on the responses to a DE&I survey

we carried out for our existing UK employees at the beginning of

2023 and among new joiners on an ongoing basis. The proportion of

our UK-based employees from an ethnic minority (excluding white

minority) background in mid to higher salary brackets was

approximately 16%.

We are committed to advocating for better representation of ethnic

minorities in our industry and have been participating in the

#10000BlackInterns (formerly #100BlackInterns) initiative organised by

the 10000 Interns Foundation since 2021.

3i participates in the

#10000BlackInterns initiative

by the 10000 Interns Foundation

3i has partnered with the 10,000 Interns Foundation since it

was first established in 2021 to help transform the horizons

and prospects of young black people in the UK. The

#10000BlackInterns initiative seeks to offer 2,000 paid

internships to black students and graduates each year for five

consecutive years. The initiative has partnered up with firms

across over 30 sectors, delivering internships across a range

of business functions. Since its launch, the programme has

garnered great support with over 500 companies offering

internships to black students in the UK as a way of attracting

a more diverse range of talent to their sectors. We welcomed

two students for paid internships in our investment teams in

each of the summers of 2021 and 2022 and one student in

the summer of 2023. We look forward to welcoming another

student for a paid internship in 2024.

Read more

10000internsfoundation.com

Employee engagement

We encourage a collaborative culture, ensuring an open

communication between employees and senior management. As a

small organisation, we operate a relatively flat structure with few

hierarchies. This approach facilitates direct interaction and

accessibility. In addition, our Executive Committee maintains an

open-door policy, encouraging dialogue at all levels. We encourage

feedback from employees to senior management through informal

conversations and more formal forums, including regular team

meetings, as well as through the annual appraisal process. Managers

throughout 3i are expected to keep their teams informed of

developments and to communicate financial results and other

matters of interest.

Additionally, we organise regular conferences for our Private Equity,

Infrastructure and Professional Services teams to review progress

against our strategy, align our goals and discuss future plans in an

open and relaxed manner with all employees involved.

The Board of Directors typically holds at least one of its meetings

every year in one of our international offices. This provides an

opportunity for non-executive Directors to meet the local teams,

often in a more informal setting. In FY2024, the Board held meetings

in our Amsterdam and New York offices. The non-executive Directors

also have other opportunities to engage with employees, for

example, by attending our semi-annual portfolio company reviews.

These important meetings provide the non-executive Directors with

an insight into how our investment business operates and into our

culture. Employees also enjoy this opportunity to interact with the

Board. Our Chair aims to visit all our major international offices on a

rolling cycle and engages with as many employees as possible during

these visits.

At 3i, we actively encourage and facilitate employee share ownership

through variable compensation and share investment plans. The

engagement and the sense of ownership we have fostered over the

years are reflected in low employee turnover rates.

	FY2024	FY2023	FY2022	FY2021	FY2020
Participation in UK SIP1	90%	87%	89%	88%	87%
Voluntary employee turnover rate (global)	6.0%	9.5%	12.2%	7.3%	8.8%

1Proportion of UK-based employees who subscribe to a Share Incentive Plan available to UK employees only.

Living wage

3i is an accredited London Living Wage Employer. This means that

every member of staff based in London, including contracted

maintenance and reception teams, earns at least a “living wage”

which is an hourly rate higher than the UK minimum wage and is set

independently, updated annually and based on the cost of living in

London.

Outside of London, our overseas offices tend to employ only

investment and professional services staff, as well as support staff,

who are remunerated above applicable minimum or living wage

requirements.

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3i Group plc | Annual report and accounts 2024 54

Learning and development

We can only achieve our strategic objectives if we continue to attract,

retain and develop capable people. We therefore provide our

employees with the opportunities, experience and training to

contribute to the success of the organisation, realise their potential

and develop their knowledge and capabilities.

We encourage employees to take responsibility for their own

development, working with their line managers to devise personal

development plans to support the achievement of their individual

aspirations, consistent with 3i’s objectives. Given the specialised

nature of many of the roles in 3i, an emphasis is placed on work-

based learning, with the provision of development opportunities

supported by appropriate targeted training and mentoring. This is

supplemented by formal courses conducted both internally and

externally and usually with a multinational group drawn from across

the countries in which 3i operates.

In FY2024, we provided formal specialist training on areas and skills

including value creation, presentation and communication skills,

climate change and human rights. We also offered executive

coaching for some employees. Our investment executives regularly

receive education on issues of wider topical interest and impact. For

example, our sustainability professionals delivered a number of

training and information sessions on sustainability.

Some of our employees have access to the Sama Professional

Coaching app, which provides individual personal career coaching by

experienced, credentialed executive coaches, all DEIB trained.

We also have comprehensive induction plans for all new joiners,

including sessions with different teams across the business to help

facilitate integration.

This year, we held a two-day conference for our global support team,

in recognition of the critical contribution of our executive assistants

and support staff to our business. The conference provided a great

opportunity to share knowledge and best practice and to build

relationships and networks to facilitate better collaboration across the

business. It also provided a forum to reflect on how we capitalise on

developments in digitalisation and technology post pandemic.

During the conference, we launched a dedicated learning hub,

facilitated by an external provider, providing tools for our support

teams to enhance their skills and own their professional

development.

Our formal appraisal and objective setting process, held annually for

each employee, is key to their personal development. During this

process, we measure each employee’s performance against their

agreed objectives and 3i’s values to inform decisions on

remuneration, training, career development and future progression.

We encourage employees to make use of an online facility to obtain

360-degree feedback as part of this process.

Employee wellbeing

We recognise the importance of supporting the wellbeing of our

employees by providing a healthy working environment and work/life

balance. All employees enjoy a broad range of formal benefits

aligned with local custom and practice and often enhanced relative

to the statutory minimum. Summaries of our employment and benefit

policies are available on our website.

Physical health

We promote the physical wellbeing of our employees. For example,

in the UK, we provide our employees with annual medical insurance.

All UK employees also qualify for annual health checks and have

access to a Bupa Digital General Practitioner.

Building on our progress last year, in FY2024 we published a

Menopause Policy formalising the details of support available to our

employees. Specifically, our UK-based employees have access to a

range of menopause services, including access to Bupa’s Women’s

Health Hub, a consultation and a follow-up with a menopause-trained

GP, personalised clinical advice on managing symptoms and access

to menopause-trained nurses on a 24/7 basis through the Bupa

Anytime Healthline for a period of one year.

For a number of years, we have provided the services of a personal

fitness and nutrition adviser, bookable free of charge for one-on-one

fitness, nutrition and broader wellness advice sessions. Our adviser

also hosts twice-weekly fitness and Pilates classes which are

complimentary for employees. Recognising the unique needs of our

female employees, our adviser offers specialised sessions focused on

exercise and nutritional strategies to support them with their needs.

Mental health and employee assistance

We recognise the importance of mental wellbeing for our employees.

We have trained 18 “mental health champions” across our business.

These individuals act as first points of contact for employees facing

mental health challenges. Over the past five years, most employees

have participated in workshops facilitated by a specialist mental

health consultancy. These workshops offer a basic understanding of

mental health, strategies to develop and strengthen it, and insights

to recognise the early warning signs of struggle. In addition, our

employees have access to Headspace for Work, the leading

mindfulness-based mental health app offering meditations and

exercises for stress, focus, sleep, and movement.

All UK-based employees have access to an Employee Assistance

Programme that offers free, confidential telephone counselling on a

range of personal and work-related issues and problems, as well as

face-to-face counselling services. The service also provides legal and

financial advice and other information and services and is run by

Health Assured, an independent external service provider.

Employees who are members of the UK private medical insurance,

for which 3i covers premiums, have access to up to 10 sessions per

annum of psychological support without a requirement for General

Practitioner referral.

Flexible working

Employees are provided with the tools to work remotely and can

apply to work flexibly to manage personal or family commitments as

and when required. Flexible working options include remote working,

flexible hours and job sharing.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Recruit and develop a diverse pool of talent continued

3i Group plc | Annual report and accounts 2024 55

Act as a good

corporate citizen

We expect our employees to act with integrity,

accountability and a careful ownership mindset

and to approach their roles with ambition, rigour

and energy. We embed that culture in our

policies and processes.

Governance

Good corporate governance is fundamental to 3i and its activities

and is critical to the delivery of value to our stakeholders. The

corporate values are approved by the Board and the Executive

Committee sets the tone and leads by example.

For full details of our governance structure and processes, please see

the Governance section of this report.

Standards of conduct and behaviour

Our standards of conduct and behaviour are promoted and enforced

through a comprehensive suite of policies and procedures which,

together with our compliance manual and our values, constitute our

code of conduct. Our policies and procedures are reviewed annually.

Our Internal Audit and Compliance teams perform regular reviews

which include compliance with our established standards of conduct

and behaviour. The results of this work are reported quarterly to the

Audit and Compliance Committee, which also carries out an annual

review of risk and internal control effectiveness including general

standards of conduct and policy compliance. Quarterly updates are

also provided to the Board of 3i’s main regulated entity, 3i

Investments plc, which includes members of the Executive

Committee.

We evaluate our employees against our values as part of our annual

formal performance review process. In addition, all employees have a

mandatory conduct objective against which they are formally

assessed as part of their annual performance review.

Public policy

Although 3i will not participate directly in party political activity, it may

engage in policy debate on subjects of legitimate concern to 3i, its

staff and the communities in which it operates. This is done

principally through industry representative bodies such as the British

Venture Capital Association and Invest Europe, where we might

contribute to the formulation of policy positions. From time to time

we may engage directly with government and regulatory bodies on

matters of particular and direct importance to 3i and its businesses.

Lobbying must only be undertaken with the prior approval of the

Executive Committee and in a manner that is lawful and adheres to

3i’s values.

Compliance and policies

Our compliance manual includes policies on:

• Anti-bribery and corruption

• Hospitality, gifts and inducements

• Political donations

• Public policy and activity

• Data protection

Read more

www.3i.com/sustainability/sustainability-policies/

Transparency and openness

We believe that all employees and people connected with 3i deserve

fair treatment and respect for their fundamental rights and therefore

encourage everyone to speak up and report their concerns.

Where any employee discovers information which they believe shows

malpractice or wrongdoing within 3i, under most circumstances they

will raise concerns with their line manager, who will pass this

information to the appropriate Executive Committee member.

Should this route not be suitable, then the employee may approach

the Directors of Compliance or Internal Audit, or the General Counsel

and Company Secretary, who have been designated to provide

impartial advice on the appropriate course of action to follow.

Alternatively, all employees across all our office locations may express

and report their concerns on a completely confidential and

anonymous basis to an independent “hotline” whistle-blowing

service provided by EthicsPoint, an independent, external party. Our

policies make clear that there should be no fear of reprisal or

victimisation or harassment for whistle blowing. There were no

incidents of whistle blowing in the year.

Environmental impact

With fewer than 250 employees globally, 3i has a relatively small

direct impact in terms of the environment and other sustainability

issues. Our impact on the environment is determined largely by our

portfolio. We are committed to minimising our environmental impact

and to improving our environmental performance wherever possible.

We have an Environmental Management System that is

proportionate to the operational size and environmental risk profile

of our business.

We use the precautionary principle to manage environmental risk for

our business and our portfolio proactively.

Our GHG emissions and those associated with our portfolio are

reported in our TCFD disclosures.

Pages 80-84

Risk management

Pages 42-51

Invest responsibly

Pages 58-68

TCFD disclosures

Environmental information

www.3i.com/sustainability/corporate-citizenship/environment/

Overview and strategy Business review Sustainability Performance and risk Governance Audited financial statements Portfolio and other information

3i Group plc | Annual report and accounts 2024 56

Community

3i is keen to support charities which relieve poverty, promote

education and support elderly and disabled people. A few examples

of the charities we support are set out on this page.

Read more

www.3i.com/sustainability/corporate-citizenship/charitable-giving/

Ordinary charitable giving

The charities we partner with are supported on the basis of their

effectiveness and impact. Our charitable giving for the year to 31

March 2024 totalled £1.05 million. This included supporting our nine

charity partners, matching staff fundraising, making a number of one-

off donations and promoting the give-as-you-earn scheme in the UK,

which is administered by the Charities Aid Foundation, and through

which 3i matched c.£55,000 of employee donations.

Career Ready

Since 2018 we have partnered with Career Ready, a UK-based organisation that

connects employers with schools and colleges to provide disadvantaged young people

aged 15-18 with mentors, internships, masterclasses, and employer-led activities that

prepare them for the world of work. 3i takes part in the mentoring programme which

supports young people aged 16 to 18 who lack the opportunities, professional networks

and confidence to find their undiscovered talents.

Community Links

Community Links is a social action charity based in Newham, one of the most deprived

boroughs in London. It offers free legal advice, provides youth and employment

services, delivers projects to promote the early diagnosis of cancer by increasing the

uptake of NHS screening programmes, and advocates for social change by contributing

to public policy debates. At Christmas, our London-based employees raised £3,000 for

the charity’s Toy Appeal. This enabled the charity to buy c.250 toys, which were

distributed to 135 families.

The Passage

The Passage, based near our London office in Westminster, is a homelessness charity

whose services have a high impact on the local community. We support The Passage’s

Employment and Education team, which provides homeless people with life skills and

helps them to end their homelessness by returning to work. Support includes computer

training, literacy classes, help with CV writing and job hunting, and financial and welfare

rights advice. During the year, 17 of our London-based staff volunteered for The

Passage and the charity was one of the recipients of the funds raised by our London-

based staff at our Summer Charity event.

Re-engage

Re-engage is a UK national charity dedicated to tackling loneliness and social isolation

amongst older people. It provides life-enhancing social connections for older people at

a time in their lives when their social circles are diminishing. Supported by a network of

volunteers, the charity provides regular opportunities for companionship for thousands

of older people across the UK.

Snowdon Trust

The Snowdon Trust aims to break down barriers for disabled students on their journey

through post-school education and into employment, for instance through grants to

cover the additional costs that students incur because of their disability or through

scholarships. Snowdon Trust was one of the recipients of the funds raised by our

London-based staff at our Summer Charity event.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Act as a good corporate citizen continued

3i Group plc | Annual report and accounts 2024 57

These disclosures reflect 3i’s response to the recommendations of the

TCFD. They set out how we incorporate climate-related risks and

opportunities for our business and portfolio into our governance,

strategy and risk management. They also include disclosures on our

direct GHG emissions metrics and, for the first time, those associated

with our portfolio.

Regulatory background

3i Group plc is an Alternative Investment Fund managed by 3i

Investments plc, a UK Alternative Investment Fund Manager. 3i

Investments plc is a wholly-owned subsidiary of 3i Group plc. This

TCFD report is published in line with the requirements outlined in the

FCA’s Environmental, Social and Governance (“ESG”) sourcebook.

They require 3i Investments plc to disclose publicly specific climate-

related metrics and processes as part of a product report for 3i Group

plc based on the TCFD recommendations. These disclosures also

cover the Group’s, including 3i Investments plc’s, overall approach to

climate change in line with the TCFD recommendations.

The diagram below shows the TCFD reporting requirements for the

entities described above.

				3i Investments plc (AIFM)
3i Infrastructure plc (AIF)							3i Group plc (AIF)				Other AIFs in scope of FCA TCFD reporting requirements

ò	Funds with public TCFD product reports
Å	Funds with on-demand TCFD product report
ò	AIFM with entity-level report

This TCFD report should be read in conjunction with the 3i

Investments plc TCFD entity report, which is available on 3i’s website,

and with the rest of this Annual report, which contains other relevant

information. Specific references are provided where applicable.

Read more

www.3i.com/sustainability/

Governance

TCFD recommendations

Disclose the organisation’s governance around climate-related

risks and opportunities:

• Describe the board’s oversight of climate-related risks and

opportunities

• Describe management’s role in assessing and managing

climate-related risks and opportunities

The management of climate-related risks and opportunities is integral

to our processes and operations, including our investment and

portfolio management activities, with oversight by the Board and

delegated authority to the Chief Executive. In determining 3i’s

strategy and approach to climate change, both the Board and the

Chief Executive, assisted by a number of committees, take into

account the laws and regulations of the countries in which 3i and its

portfolio companies operate, as well as the perspectives of relevant

stakeholders, such as those identified on pages 112 and 113. The

governance structure is set out in the graphic below.

Board of Directors
Chief Executive		Audit and Compliance Committee
	ESG Committee
Group Risk Committee
Investment Committee

l	Oversight
l	Implementation

Non-executive oversight

The Board as a whole is responsible for the approval of the Group’s

approach in relation to ESG matters (including climate-related

matters) and has oversight of the Group’s sustainability strategy,

approach and policies, including our Responsible Investment policy. It

is assisted by the Audit and Compliance Committee in the review and

consideration of any disclosures related to ESG matters, including

climate-related disclosures.

The Board and Audit and Compliance Committee receive regular

updates on ESG matters and climate-related issues from the Chief

Executive and members of the ESG Committee as they become

relevant and material. In FY2024, the main updates on climate-related

issues included:

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Our TCFD disclosures

3i Group plc | Annual report and accounts 2024 58

May 2023		Review and approval of the FY2023 Annual report, including the TCFD disclosures and other climate- and sustainability-related disclosures contained elsewhere in the report
June 2023		Update to the Board on the ESG risk profile of the portfolio, following presentations made to the Group Risk Committee by our investment teams on the results of the annual ESG assessment of portfolio companies in March
November 2023		Update to the Board from the Chief Executive on a number of sustainability-related themes, including the development and setting of science-based targets, the second phase of our portfolio climate change scenario analysis, and the implementation of a portfolio ESG data gathering tool
December 2023		Session held during the Board Strategy Day, led by members of the ESG Committee, covering 3i’s science-based targets and implications for 3i and its portfolio

Board skills and training

The Board received four dedicated training sessions on climate

change during FY2023, which were externally facilitated by EY’s

sustainability practice. This training programme provided the Board

with some of the tools necessary to improve its oversight of the

Group’s approach to climate change and the resulting impacts on

the portfolio and investment strategy, and to inform the Board’s

decision making.

During FY2024, the Directors engaged with members of the ESG

Committee on a regular basis on 3i’s approach to climate change

and related workstreams and received updates on regulatory and

other relevant developments. For example, the annual Board

Strategy Day in December included a dedicated session on the

science-based targets that 3i had submitted for validation to the

SBTi. In addition, our Directors attend our semi-annual portfolio

company reviews, which include discussions of the material aspects

of portfolio companies’ climate strategy.

A number of our Directors also have experience of assessing climate-

related factors and have received training on this topic through other

executive and non-executive roles.

Executive responsibility

Day-to-day accountability for sustainability, including climate-related

issues, rests with executive management and, in particular, the Chief

Executive. The Chief Executive is supported by a number of

committees in overseeing and monitoring policies and procedures

and addressing issues that arise. These include the ESG Committee,

Investment Committee and Group Risk Committee.

ESG Committee

The ESG Committee membership, shown in the diagram below, is

drawn from a range of investment and non-investment functions

across the Group. The Group Treasurer joined the Committee in

FY2024. The ESG Committee also benefits from input from relevant

functional areas as required.

General Counsel and Company Secretary (Chair)
Central functions		Investment teams
	Group Finance Director			Sustainability Director, Private Equity
Chief Operating Officer		Sustainability Director, Infrastructure
Group Investor Relations and Sustainability Strategy Director
Group Treasurer

The ESG Committee focuses on three main areas:

• reporting to the Chief Executive (directly and through the Group

Risk Committee and Investment Committee) on relevant ESG

matters, including climate-related risks and opportunities, and

developing and reviewing policies, processes and strategies to

manage ESG risks and opportunities for the Group and its

investment activities;

• developing and recommending to the Chief Executive the Group’s

ESG approach (including a climate strategy) for review by the

Board; and

• coordinating and facilitating ESG-related activities and initiatives

across the Group.

The Committee considers relevant legal and regulatory requirements

and industry standards, as well as best market practice, and monitors

progress against its agenda.

The ESG Committee met formally four times in FY2024, but held

three additional informal meetings in the year to implement its busy

agenda. The ESG Committee’s activities and focus for the year are

described throughout this TCFD report.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Our TCFD disclosures continued

3i Group plc | Annual report and accounts 2024 59

Investment Committee

The role of the Investment Committee is described on page 82. In

performing its activities, the Investment Committee ensures that

material ESG matters, including relevant climate-related risks and

opportunities, are properly identified, assessed and managed in the

course of our investment, divestment and portfolio management

activities. The Investment Committee is chaired by our Chief

Executive and comprises individuals drawn from our central functions

(including the Group Finance Director and Chief Operating Officer),

as well as from our Private Equity and Infrastructure investment teams

(including the two heads of Private Equity, the two heads of

Infrastructure and other senior investment and professional services

team members). It meets frequently on an ad-hoc basis to discuss

potential new investments and significant portfolio activity.

Group Risk Committee

The role of the Group Risk Committee is described on pages 82 and

83. As part of its responsibilities, it identifies the principal risks and

new and emerging risks, including climate-related risks, facing 3i, as

well as the associated mitigating actions and key risk indicators. This

committee also maintains oversight of the Responsible Investment

policy and considers and approves amendments to this policy as

required, taking into account legal, regulatory and market

developments regarding climate change. The Group Risk

Committee, which meets four times a year, is chaired by the Chief

Executive, and also comprises the Group Finance Director, Chief

Operating Officer, the General Counsel and the Chief Human

Resources Officer, as well as the heads of our Private Equity and

Infrastructure businesses and a number of functional heads drawn

from across the organisation, including the Group Compliance,

Internal Audit and Investor Relations and Sustainability Strategy

Directors.

Dedicated sustainability resource

We have dedicated sustainability resource embedded across the

organisation, including:

• a Sustainability Director in our Private Equity investment team;

• a Sustainability Director and a Sustainability Senior Associate in our

Infrastructure investment team; and

• a Sustainability Manager in the Group Investor Relations function

to co-ordinate the Group’s work on sustainability and implement

Group-wide projects.

This resource is key in implementing the ESG Committee’s many

activities.

Participation in industry working groups

We are part of the Initiative Climat International (“iCI”), a global,

practitioner-led community of over 250 private markets firms and

investors which represented US$4.1 trillion in AUM as of the end of

August 2023. These firms seek to improve the understanding and

management of the risks associated with climate change. We

contributed our feedback on iCI’s portfolio company decarbonisation

playbook, which focused on Scope 3 reduction in the supply chain

through procurement.

As members of the BVCA, we contributed to the BVCA’s feedback to

the Financial Reporting Council’s call for evidence on the

implementation of International Sustainability Standards Board

(“ISSB”) sustainable disclosure standards in the UK.

Executive remuneration

The Executive Directors receive, in addition to their salary, an annual

bonus and long-term share incentive awards based on the

achievement of a number of performance conditions. For FY2024,

annual bonuses for executive management were awarded based on

a balanced scorecard of both financial and strategic measures

agreed by the Remuneration Committee of the Board, alongside a

consideration of the wider context of personal performance

(including values and behaviours), risk, market and other factors.

Among the strategic and qualitative measures included in the

balanced scorecard to determine the FY2024 annual bonus award, up

to 10% of the maximum annual bonus opportunity was tied to

progress against a number of ESG targets. The Remuneration report

on pages 136 to 149 sets out the Remuneration Committee’s

assessment of the performance of the Executive Directors against the

scorecard’s ESG objectives. This TCFD report and the broader

Sustainability section of this Annual report describe the measures

taken by the Group to make progress against these objectives.

Pages 80-83

Risk management

Page 101

Governance framework

Pages 136-149

Remuneration report

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Our TCFD disclosures continued

3i Group plc | Annual report and accounts 2024 60

Strategy

TCFD recommendations

Disclose the actual and potential impacts of climate-related risks

and opportunities on the organisation’s businesses, strategy,

and financial planning where such information is material:

• Describe the climate-related risks and opportunities the

organisation has identified over the short, medium, and long

term

• Describe the impact of climate-related risks and opportunities

on the organisation’s businesses, strategy, and financial

planning

• Describe the resilience of the organisation’s strategy, taking

into consideration different climate-related scenarios,

including a 2°C or lower scenario

Our investment strategy is to make a small number of new

investments each year in our Private Equity and Infrastructure

businesses, selected within our target sectors and geographies on

the basis of their compatibility with our return objectives. We screen

investments against our Responsible Investment policy, which has

been in place for many years and is reviewed as appropriate, and

most recently in May 2024. We believe that the careful assessment

and management of ESG factors, including climate-related risks and

opportunities, can be an important lever for value preservation and,

at times, for value creation in our portfolio. We therefore integrate

this assessment into our investment screening and portfolio

management processes and provide the necessary training and

guidance to our investment professionals. These processes are

described on pages 42 to 45 of this Annual report.

Resilience of our strategy to climate-related risks

Our business model is simple: we invest our proprietary capital and

manage a small number of third-party funds (principally in our

Infrastructure business). We do not manage products with specific

sustainability mandates. Our investment and portfolio construction

approach is flexible and not constrained by overly prescriptive

investment mandates or by limited duration funds, given the

permanent nature of our proprietary capital. The third-party funds we

manage in our Infrastructure business are either permanent or of very

long duration. We make majority or, in a small number of cases,

significant minority investments in our portfolio companies, and exert

influence on their boards.

This flexibility in mandates and holding periods is a considerable

strength, including with respect to the management of climate-

related risks and opportunities, and which has supported our ability

to pivot our investment towards sectors and niches that can benefit

from sustainable growth trends. Combined with the influence we

exert on portfolio companies this has allowed us, for example, to

increase our exposure to renewable energy generation and the

energy transition theme in our Infrastructure portfolio over the last

few years (see the case studies on pages 50 and 51). It has also

allowed us to approve investments within our portfolio companies

that support climate change resilience, for example, through a

reduction in their GHG emissions or the development of products

and services with lower associated emissions.

We do not invest directly in extractive industries (including coal, oil

and gas), albeit some of our investments do have exposure to some

of these sectors.

Climate scenario analysis

Climate change scenario analysis can be a useful tool to assess the

potential future exposure of a portfolio to climate-related risks under

different climate warming scenarios.

Early in FY2023, we carried out our initial, top-down climate scenario

analysis on our Private Equity and economic infrastructure

investments with the help of an external consultant. This analysis

assessed climate-related physical and transition risks for each of these

portfolio companies over short- (< one year), medium- (to 2030) and

long-term (to 2050) time horizons under three broad scenarios: an

orderly net zero transition by 2050; a disorderly net zero transition by

2050; and a hot-house world scenario. We described this scenario

analysis in last year’s TCFD report.

This top-down analysis did not provide detailed insights into our

portfolio, which is relatively concentrated, even in an industry context,

(with investments in approximately 60 companies across Private

Equity, Infrastructure and Scandlines, excluding the PPP project

investments which were not covered) and exposed to a relatively

small number of sectors and geographies. It did, however, help us to

develop our understanding of climate scenario analysis and to

crystallise our belief that a bottom-up approach is better suited to the

characteristics of our portfolio. The output of this analysis also helped

us to form a view on which areas of the portfolio would merit deeper

assessment.

With the benefit of these insights, we designed and carried out a

second phase of climate scenario analysis in FY2024, also with the

support of a specialist consultancy. This analysis used similar

scenarios to those we used for the first phase of our analysis in

FY2023. They are described in detail in the next page. As an initial

step, we performed an analysis of approximately half of our portfolio

companies by number, excluding PPP investments. For each of these

companies, we assessed potential physical and transition risks using

sector information and the geolocation of their main operations and

suppliers. This first step helped us to determine the potential hot

spots of inherent climate-related risks within this part of our portfolio

and to select a small number of portfolio companies for the second

step, “deep dive” analysis of the work.

In this second step, with the use of additional data, and with the

benefit of in-depth interviews with portfolio companies or investment

teams, we carried out a more detailed assessment of inherent and

residual physical and/or transition risks for these portfolio companies.

As part of this, we further developed our understanding of how these

companies assess, manage and mitigate those risks and capitalise on

the related opportunities. This allowed us to improve our assessment

of the residual risk levels for each risk driver significant to the portfolio

companies analysed, and to identify additional engagement levers

that we can use, as significant shareholders, to drive progress. We

have communicated the results of this analysis to the relevant

portfolio companies.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Our TCFD disclosures continued

3i Group plc | Annual report and accounts 2024 61

Orderly transition

We used an orderly transition scenario, which assumes that policies

to mitigate the impacts of climate change are introduced early and

become gradually more stringent, culminating in the achievement of

global net zero CO2 emissions in around 2050 and likely limiting

global warming to below 2°C on pre-industrial averages.

Under this orderly transition scenario, our portfolio is potentially

exposed to a number of inherent risk drivers and respective

opportunities in the categories described on the next page.

Disorderly transition

A disorderly transition scenario assumes that climate policies are

delayed or divergent, requiring sharper emissions reductions,

achieved at a higher cost and with increased physical risks in order to

limit temperature rise to below 2°C on pre-industrial averages by

2050.

Under this scenario, the risks identified as part of the orderly

transition scenario are delayed but amplified in the run-up to 2050,

with a higher potential impact on portfolio companies. For example,

carbon prices could be higher and regulations could have much

quicker implementation timeframes, resulting in higher costs to

achieve compliance. However, the mitigation strategies and

opportunities remain broadly the same and would include investment

in low-carbon products and more resilient and efficient supply chains,

as well as the active monitoring of and compliance with upcoming

regulations and a proactive approach to developing transition plans.

Hot-house world

A hot-house world scenario assumes that no new climate change

mitigation policies are introduced and that only those that have been

implemented already are preserved, that current commitments are

not met and that emissions continue to rise, resulting in a failure to

limit temperature increases, as well as in high physical risks and

severe social and economic disruption.

The climate change scenario analyses we have performed to date

have not identified significant physical risk drivers for the majority of

the portfolio companies assessed in the medium term, with

moderate to low inherent physical risks driven principally by chronic

temperature changes, heatwaves and flooding. A few companies,

however, were identified as having medium or high physical risks in

relation to their own operations or key suppliers. We focused our

attention in the deep dive analysis on some of the companies

identified as having higher risks and have engaged with them with

the results of that assessment.

For our deep dive physical risk analysis, we used a >4°C, SSP5-8.5

2050 climate scenario, which shows an end-of-century temperature

rise of 4.5°C and is considered to be the worst-case hot-house

scenario.

The results of this climate change scenario analysis work were used to

develop a more detailed climate change assessment framework,

which has been incorporated into our overall ESG risk and

opportunity assessment processes.

We intend to refine our approach to climate scenario analysis on a

regular basis. This will be an iterative process, through which we will

build on our understanding and on market and scientific

developments over time.

Value at risk

Following careful consideration, we did not conduct an analysis of

value at risk from climate change impacts. Current climate models to

determine value at risk are at an early stage of development, and do

not yet provide sufficiently reliable results for a concentrated portfolio

like ours. Where relevant and possible, we embed certain climate-

related considerations in the valuations of our portfolio companies.

We will continue to assess climate modelling tools as they develop

and will report on this annually.

Viability statement

In addition to the climate change scenario analyses described above,

we have been assessing the potential financial impact of climate

change on our portfolio as a whole for some time through the work

we do to conduct our annual viability assessment (see pages 129 and

130). When preparing our Viability statement, we carry out a number

of tests which consider the impact on the Group of multiple severe,

yet plausible individual and combined stress scenarios, including the

impact that climate change might have on the value of a number of

our potentially more vulnerable assets through changes in regulation,

in consumer preferences, an increase in physical risks and other

business risks. This analysis is carried out over a three-year timeframe,

and is different to climate change scenario analysis, which analyses

the impacts of climate change over a much longer time period.

Because of the diverse exposures of our current portfolio companies

and the flexibility we have in portfolio construction, our analysis

showed that a climate-related stress scenario is unlikely to impact the

viability of the Group over the three-year time period.

Transition to a low-carbon economy

The ESG Committee discussed the most appropriate approach to

align 3i and its portfolio to the UK’s net zero ambitions and set

relevant targets. We performed a detailed analysis of the portfolio

(excluding the PPP projects) to establish how challenging it is for each

portfolio company to set science-based targets, in light of (i) available

sector guidance and decarbonisation pathways; and (ii) the carbon

maturity of the portfolio company itself.

This analysis supported our decision to set SBTs, which were

validated by the SBTi in March 2024. Information on our SBTs can be

found within the Metrics and targets pillar of this report on page 68.

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3i Group plc | Annual report and accounts 2024 62

Principal climate-related transition risks under the orderly transition scenario

	Risk category	Risk drivers	Time horizon	Potential impact, mitigation and opportunities
	Policy and legal	• New regulations and commitments	Short and medium term	Potential impact • Non-compliance with regulations and commitments could result in reputational damage for 3i and its portfolio as well as in legal fees and fines. Mitigation • 3i and its portfolio companies monitor the evolution of the regulatory landscape to ensure that they are prepared for compliance. • Minimum ESG requirements within our RI policy include compliance with applicable laws and regulations. Opportunities • Compliance with upcoming regulations facilitates the exit process.
		• Carbon pricing mechanisms	Medium term	Potential impact • The introduction of carbon pricing could increase the operating costs of the portfolio companies to which they apply. Mitigation • Where material, 3i has begun to engage with portfolio companies to identify those at risk from the introduction of carbon pricing mechanisms, and understand the potential impacts before addressing next steps. Opportunities • Portfolio companies subject to carbon pricing mechanisms could develop low-carbon processes and products to reduce this impact.
	Technology	• Increased investment required in sustainable or green technologies and low carbon processes • Competitor innovation	Medium and long term	Potential impact • Increased investments in new technology and processes to reduce carbon emissions may result in higher costs. • Successful competitor innovation could result in reduced revenue and market share. Mitigation • Portfolio companies monitor their markets to identify potential technology risks and, with the support of 3i on their board, assess the new investments required to stay abreast of developments. Opportunities • Investment in lower-emissions products and services could lead to improved revenues and profitability over time.
	Market	• Changing consumer and investor preferences • Unexpected shifts in market • Changes in job market	Medium and long term	Potential Impact • Changes in consumer preferences in response to climate change (eg preference for products and services with a lower carbon impact) could result in decreased revenues for portfolio companies. • An increasing employee focus on sustainability could make it harder for portfolio companies to retain and attract talent if they are not perceived to be responding adequately to the challenges posed by climate change. Mitigation • Portfolio companies monitor their offering against evolving consumer preferences and employee/potential employee expectations. Opportunities • Portfolio companies could invest in innovation to ensure that their products and services align with evolving consumer preferences.
	Reputation	• Stigmatisation of the sector • Increased stakeholder concerns	Short and medium term	Potential impact • Stigmatisation and stakeholder concerns may result in decreased revenue and increased operating costs for certain portfolio companies operating in sectors perceived as having a high impact on climate change. Mitigation • Where material, 3i has begun working with portfolio companies to develop transition plans and develop their business models to ensure that they transition away from carbon intensive sectors or end markets. Opportunities • Portfolio companies that adopt a proactive approach to climate transition could strengthen their market position, particularly in a disorderly transition scenario.

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3i Group plc | Annual report and accounts 2024 63

Risk management

TCFD recommendations

Disclose how the organisation identifies, assesses, and manages

climate-related risks

• Describe the organisation’s processes for identifying and

assessing climate-related risks

• Describe the organisation’s processes for managing climate-

related risks

• Describe how processes for identifying, assessing, and

managing climate-related risks are integrated into the

organisation’s overall risk management

We recognise the increasing importance of climate-related risks and

monitor these as we do other risks through our comprehensive risk

governance framework, both on a portfolio company level and for

the Group as a whole. The framework is described in detail on pages

80 to 84, and our portfolio ESG assessment process (which covers an

assessment of material climate risks for each portfolio company) is

described on page 43 of this report.

3i’s own operations are not in themselves exposed to material

physical climate risks. We employ fewer than 250 people across seven

offices. Nevertheless, the business is increasingly affected directly by

climate-related legal and regulatory risks, as well as by the related

reputational risks.

The majority of 3i’s climate risk exposure is through its portfolio. We

describe our processes to identify and manage climate-related risks

and opportunities under the Strategy pillar above.

Identification, assessment and management

of climate-related risks

We consider climate-related risks on the Group and the portfolio

through our risk management framework, which is coordinated by

the Group Risk Committee and implemented across the organisation

as described in the Risk review. Specifically, in relation to the

management and mitigation of climate-related risks in the portfolio,

we rely, over the life of the investment, on:

• the assessment of material climate-related risks in the pre-

investment phase. This is performed internally and supplemented

as appropriate by external specialists and can result in Investment

Committee requiring further due diligence to be performed or in

investments being declined. Our climate change assessment

framework was enhanced following the completion of the second

stage of our climate scenario analysis in FY2024 and we will begin

trialling this in the current financial year;

• our ongoing portfolio monitoring process, which involves, in

addition to the monthly monitoring of bespoke financial and

operational KPIs and in-depth semi-annual portfolio company

reviews, a detailed annual ESG assessment which covers a number

of climate factors. This annual ESG assessment was also enhanced

with the benefit of the outputs of our climate change scenario

analysis;

• the Investment Committee to manage portfolio risks;

• the influence we have on portfolio companies. We make majority

or significant minority investments in our core portfolio companies

and exercise influence through membership of their boards;

• the measurement of portfolio company GHG emissions (see

“Metrics and targets” on the next page) and engagement with

portfolio companies on abatement, mitigation and adaptation

strategies; and

• climate scenario analysis, as described under “Strategy” on pages

61 to 63.

Our investment processes are described on page 43 of this Annual

report. We further mitigate climate-related risks by improving our

understanding of climate change and refining our processes over

time. These processes involve an increasing number of employees.

We have been encouraged by the level of staff engagement on this

topic and intend to continue to provide forums for employees to

provide their input and views on how to improve our performance.

Portfolio data collection and management

To support the assessment and management of portfolio

sustainability risks, including climate-related risks, in FY2024 we

continued to improve the quality of the annual sustainability data

(including GHG emissions) we collect from portfolio companies by

refining our ESG assessment questionnaires to ensure that they

reflect our improved understanding of climate drivers across the

portfolio, as well as evolving disclosure requirements, market practice

and other stakeholder needs. We continue to work on improving the

consistency and comparability of portfolio GHG emissions data, as

this will underpin the quality of our portfolio emissions disclosures.

The ESG Committee therefore selected and rolled out a new

dedicated software tool to help us gather, organise and analyse ESG

data from the portfolio, including the data used for the calculation of

the portfolio climate metrics disclosed in this TCFD report. This tool

provides detailed guidance for each of the metrics collected as well

as access to a support team. See “Metrics and targets” on the next

page for more information on portfolio emissions data.

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3i Group plc | Annual report and accounts 2024 64

Metrics and targets

TCFD recommendations

Disclose the metrics and targets used to assess and manage

relevant climate-related risks and opportunities where such

information is material:

• Disclose the metrics used by the organisation to assess

climate-related risks and opportunities in line with its strategy

and risk management process

• Disclose Scope 1, Scope 2, and, if appropriate, Scope 3

greenhouse gas emissions, and the related risks

• Describe the targets used by the organisation to manage

climate-related risks and opportunities and performance

against targets

3i Group’s portfolio climate metrics

The metrics below provide information on the GHG emissions from

our portfolio companies. These metrics cover 99.5% of the portfolio

value1 of 3i Group plc as at 31 March 2024 and are calculated in line

with the TCFD recommendations implementation guidance.

Results as at 31 March 2024	Definitions of climate metrics
Portfolio emissions 323,539 tCO2 e	Total portfolio emissions is the absolute Scope 1 and 2 GHG emissions associated with a portfolio. We are allocating GHG emissions for each portfolio company using 3i Group’s fully diluted equity ownership2.
Carbon footprint 15.0 tCO 2 e/£m invested	Carbon footprint is total portfolio emissions (Scope 1 and 2) normalised by the value of the portfolio2, expressed in tonnes of CO2 e/£m invested.
WACI 42.5 tCO 2 e/£m revenue3	Weighted Average Carbon Intensity (“WACI”) is a portfolio’s exposure to carbon-intensive companies, expressed in tonnes CO2e/£m revenue. It is calculated using the carbon intensity for each portfolio company (Scope 1and 2 emissions/ revenue) apportioned based on the weight of each portfolio company within the whole portfolio.

1 Note that 3i Investments plc manages a number of co-investment vehicles whose investors are employees or

former employees of 3i. For the purpose of this calculation, we have included these co-investment vehicles

within the 3i Group scope.

2 Sourced from 3i’s finance systems.

3 Sourced from portfolio companies.

Methodology and GHG emissions data source

As a private equity and infrastructure asset manager and owner, 3i is

able to collect data from its portfolio companies.

3i requests Scope 1 and Scope 2 (location and market-based) GHG

emissions data from all core portfolio companies on an annual basis.

This data is provided directly to 3i from portfolio companies through

an ESG data collection tool. If a company provides Scope 2 market-

based data, this is used for the climate metrics calculation. If Scope 2

market-based data is unavailable, location-based data is used. Scope

3 GHG emissions data is provided by portfolio companies where

available and we are working to improve our Scope 3 data coverage

further.

Estimations and data gaps

Where current year data is not available, but previous year data is

available, we estimate the current year data using data from the

previous year, adjusted based on year-on-year changes in revenue.

Where the data is not available, it is noted as a data gap. The

significance of the data gap is disclosed through the data coverage

indicator (99.5% of the portfolio value).

Data quality

As we invest in private companies that are at different levels of

climate-related risk maturity, we have decided to add a data quality

score to the data that we are disclosing to ensure that readers

understand the reliability and quality of the data provided. Some of

our portfolio companies have only just started to estimate their GHG

emissions while others have robust processes in place to calculate

and assure the data.

We have used a custom scale to reflect overall data quality using the

Partnership for Carbon Accounting Financials (“PCAF”) methodology

as a guide and adjusting it to reflect the specificities of our

business model:

Characteristics of the data	Data quality	Certain
Emissions of the company are available and reported by the portfolio company as being verified by a third party	1
Prior year emissions of the company are available and reported by the portfolio company as being verified by a third party. The emissions for the current year are estimated based on prior year emissions and year-on-year changes in revenue	2
Emissions of the company are available and reported by the portfolio company as being verified internally	3
Unverified emissions of the company are available, including those calculated using our ESG data collection tool	4
Emissions of the company, including those calculated by the portfolio company using our ESG data collection tool, are estimated using a GHG emissions calculator using spend data	5
		Uncertain

The data quality score for 3i Group plc is 2.6. It is derived by

assigning each portfolio company a data quality score, weighted by

that company’s emissions as a percentage of total portfolio

emissions.

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3i Group plc | Annual report and accounts 2024 65

Portfolio net zero alignment scale

ò	Not started	14%
ò	Capturing data	7%
ò	Preparing to decarbonise	78%
ò	Aligning	1%
ò	Aligned to net zero	1%

Initiative Climat International (iCI) and the Sustainable Markets Initiative’s Private Equity Task Force have developed the Private Markets

Decarbonisation Roadmap to enable private markets firms to drive their transition to a low-carbon economy. The metric used within this

roadmap is based on the climate maturity of each portfolio company rather than on an implied temperature rise metric which is the

methodology suggested by the FCA for climate disclosures. We are using the Private Markets Decarbonisation Roadmap metric because it

aligns best with our science-based targets. The Alignment Scale of the Roadmap (as published by the leaders of the initiative) is summarised

in the table below:

	Not started		Capturing data		Preparing to decarbonise		Aligning		Aligned to net zero
Definition	Not started to measure emissions or plan how to reduce them		Reporting emissions data but currently no plan in place to reduce emissions		Planning to reduce emissions in line with an approach agreed with the GP		Committed to a decarbonisation plan aligned to a transition pathway		Delivering against a net zero plan and operations aligned to science-based target
Criteria	• Minimal or no emissions data • No decarbonisation plan in place		• Measuring Scope 1 and 2 emissions from operations, alongside material Scope 3 emissions, and making data available to fund		• Decarbonisation plan in place but level of ambition not aligned to net zero pathway		• Committed to near- term science-based target aligned to a long-term net zero pathway		• Demonstrated YoY emissions profile in line with pathway

3i Group plc categorised portfolio companies covering 99.2% of its investment portfolio value as at 31 March 2024 in line with the roadmap’s

Alignment Scale. The current alignment of the portfolio based on total portfolio emissions is set out in the diagram below.

While the majority of our portfolio is preparing to decarbonise, we have had to categorise a number of our portfolio companies in the “not

started” categories. Many of these companies have only recently begun to calculate their Scope 3 GHG emissions, but are not yet in a

position to report all material Scope 3 categories to us.

We have categorised companies that have set science-based targets using the SBTi’s SME target setting process as “aligning”, even though

some of them have not yet reported all material Scope 3 categories to us.

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3i Group plc | Annual report and accounts 2024 66

3i Group’s emissions from its own operations

This section has been prepared in accordance with our regulatory

obligation to report GHG emissions pursuant to the Companies

(Directors’ Report) and Limited Liability Partnerships (Energy and

Carbon Report) Regulations 2019 which implement the government’s

policy on Streamlined Energy and Carbon Reporting. During the year

to 31 March 2024, our measured Scope 1 and 2 emissions (market-

based) totalled 232.8 tCO2e. This comprised:

	FY2024 (tCO2e)			FY2023 (tCO2e)
GHG emissions (Scope) 1	UK	Rest of the world	Total	UK	Rest of the world	Total
1	101.0	34.7	135.7	105.6	34.4	140.0
2 – location-based	92.2	118.7	210.9	86.6	72.4	159.0
2 – market-based	–	97.1	97.1	–	41.6	41.6
Total 1 and 2 (location-based)	193.2	153.4	346.6	192.2	106.8	299.0
Total 1 and 2 (market-based)	101.0	131.8	232.8	105.6	76.0	181.6
3	n/a	n/a	9,612.8	n/a	n/a	6,802.3

1 Based on IEA data (2023) Emissions factors, www.iea.org/statistics. All rights reserved; as modified by 3i Group

plc.

This is equivalent to 1.0 tCO2e per full-time equivalent employee,

based on an average of 244 employees (2023: 0.8 tCO2e; 241

employees). Overall, our Scope 1 and 2 (market-based) emissions

increased by 28.2% year-on-year. Most of the increase can be

attributed to the move of our offices in New York and Amsterdam, as

we were unable to procure green electricity immediately after the

move, and to the fact that our new premises in New York are heated

with steam.

Our measured Scope 3 emissions totalled 9,612.8 tCO2e. The 41.3%

increase in our Scope 3 emissions in FY2024 compared to the

previous year is attributable to a few factors, including: (i)

improvements to the methodology we adopt to calculate the

emissions related to our purchased goods and services; (ii) the

emissions associated with the move to new offices in New York and

Amsterdam; and (iii) increased business travel following the lifting of

travel restrictions associated with the Covid-19 pandemic.

Our total energy consumption was 1,451.4 MWh (1,451,400 kWh) in

FY2024, 57% of which was consumed in the UK. The split between

energy consumption is shown in the table below.

	FY2024			FY2023
Energy consumption (kWh in 000s )	UK	Rest of the world	Total	UK	Rest of the world	Total
Electricity	445.5	297.2	742.7	447.6	225.8	673.4
Fuels1	378.1	155.1	533.2	578.6	168.3	746.9
District heating, cooling, steam	–	175.5	175.5	–	25.2	25.2

1Natural gas and transportation fuels (petrol and diesel).

Methodology

We quantify and report our organisational GHG emissions in

alignment with the World Resources Institute’s Greenhouse Gas

Protocol Corporate Accounting and Reporting Standard and in

alignment with the Scope 2 Guidance. Scope 3 emissions are

calculated in line with the World Resources Institute’s Greenhouse

Gas Protocol: Corporate Value Chain (Scope 3) Accounting and

Reporting Standard as well as the World Resources Institute’s GHG

Protocol Technical Guidance for Calculating Scope 3 emissions. We

consolidate our organisational boundary according to the

operational control approach, which includes all our offices. We have

adopted a materiality threshold of 5% for GHG reporting purposes.

The GHG sources that constituted our operational boundary for the

year to 31 March 2024 are:

• Scope 1: natural gas combustion within boilers, fuel combustion

within leased vehicles and use of refrigeration and air-conditioning

equipment;

• Scope 2: purchased electricity and heat, cooling and steam

consumption for our own use, including leased vehicles;

• Scope 3: purchased goods and services, capital goods, fuel- and

energy-related activities, waste generated in operations, business

travel and employee commuting and emissions associated with

working from home.

In some cases, where data is missing, for example, due to the timing

of invoices from our utilities providers, values have been estimated

using either extrapolation of available data or by using data from the

previous year as a proxy.

The Scope 2 Guidance requires that we quantify and report Scope 2

emissions according to two different methodologies (“dual

reporting”): (i) the location-based method, using the average

emissions intensity of grids for the country in which the reported

operations take place; and (ii) the market-based method, which

reflects the emissions from purposefully chosen energy (eg bundled

electricity, supplier specific rates, direct electricity contracts).

Although we have a relatively low environmental footprint, we are

committed to reducing it further. In our London, Paris, and

Luxembourg offices, which account for over 86% of our overall

electricity consumption, we purchased our electricity from 100%

renewable sources during FY2024. Our New York and Amsterdam

teams moved to new premises during the year. Our New York

landlord is working on delivering green energy, however, it relies on

initiatives to be implemented by the New York state government to

achieve that objective. Our new Amsterdam office switched to green

energy at the end of FY2024. Although the options for energy

efficiency improvements for our offices are limited, we are assessing

whether it is possible to switch to renewable tariffs in our remaining

offices where we do not currently purchase all of our electricity from

100% renewable sources.

Third-party verification

The 3i emissions from its own operations disclosed on this page have

been verified to a limited level of assurance by Accenture to the ISO

14064-3 standard. The portfolio emissions disclosed on page 65 are

not included in this third-party verification.

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3i Group plc | Annual report and accounts 2024 67

Science-based targets

On 5 April 2023, we wrote to the SBTi to indicate our commitment to

set up near-term science-based targets for 3i. We submitted our

targets to SBTi for validation on 31 October 2023. SBTi approved our

targets on 22 March 2024. Our science-based targets cover our direct

Scope 1 and 2 emissions, as well as the Scope 3 emissions associated

with our portfolio and are formulated in line with the guidance

published by SBTi for financial institutions and the private equity

sector.

Operations emissions target

3i Group plc commits to reduce its absolute Scope 1 and 2 (market-

based) GHG emissions by 42% by FY2030 from a FY2023 base year.

Our strategy to meet this target involves engaging with our landlords

on the energy efficiency of our premises and on using less carbon

intensive energy sources. We are also engaging with energy suppliers

directly or through our landlords on the procurement of renewable

electricity.

Financed emissions targets

3i Group’s portfolio targets cover 82% of its total investment and

lending by invested capital as of FY2023. As of FY2023, the required

activities made up 82% of 3i Group’s total investment and lending

activities by invested capital while optional activities made up 3% and

out of scope activities made up 15%.

3i Group plc commits to 31% of its listed and eligible Private Equity

portfolio by invested capital setting SBTi-validated targets by FY2028

and 100% by FY2040 from a FY2023 base year.

3i Group plc commits to reduce GHG emissions from the electricity

generation sector within its eligible portfolio by 68% per MWh by

FY2030 from a FY2023 base year.

3i Group plc commits to continue providing electricity generation

project finance only for renewable electricity through FY2030.

Our strategy to meet these targets involves the following actions:

1 As a majority or significant minority investor in our core portfolio

companies, we will continue to use our influence and engage with

portfolio companies to support them to:

(i) measure and report on Scope 1 and 2 GHG emissions at least

annually;

(ii) measure and report on material Scope 3 GHG emissions at

least annually when appropriate; and

(iii) develop decarbonisation plans and set science-based targets.

2 We will manage our electricity generation portfolio to reduce its

GHG emissions intensity as a whole.

3 We will facilitate knowledge sharing between portfolio companies

in relation to formulating decarbonisation plans and setting

science-based targets.

We will disclose on progress towards achieving these targets on an

annual basis from FY2025.

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3i Group plc | Annual report and accounts 2024 68

What’s in this section
Financial review	70
Reconciliation of Investment basis and IFRS	75
Alternative Performance Measures	79
Risk management	80
Principal risks and mitigations	85
Directors’ duties under Section 172	94

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3i Group plc | Annual report and accounts 2024 69

Strong financial performance

	Highlights – Investment basis
	Gross investment return	Operating profit before carried interest	Total return
	£4,168 m ( 2023 : £ 5,104m)	£4,077 m ( 2023 : £ 4,956m)	£3,839 m ( 2023 : £ 4,585m)
	Total return on opening shareholders’ funds	Diluted NAV per share at 31 March 2024	Total dividend
	23% ( 2023 : 36% )	2,085p ( 31 March 2023 : 1,745 p)	61.0p (31 March 2023: 53.0 p)

Table 9: Total retu rn for the year to 31 March

Investment basis	2024 £m	2023 £m
Realised (losses)/profits over value on the disposal of investments	(4)	169
Unrealised profits on the revaluation of investments	3,926	3,769
Portfolio income
Dividends	499	416
Interest income from investment portfolio	91	91
Fees receivable	1	7
Foreign exchange on investments	(461)	530
Movement in the fair value of derivatives	116	122
Gross investment return	4,168	5,104
Fees receivable from external funds	72	70
Operating expenses	(147)	(138)
Interest receivable	13	4
Interest payable	(61)	(54)
Exchange movements	29	(29)
Other income/(expense)	3	(1)
Operating profit before carried interest	4,077	4,956
Carried interest
Carried interest and performance fees receivable	62	41
Carried interest and performance fees payable	(305)	(418)
Operating profit before tax	3,834	4,579
Tax charge	(2)	(2)
Profit for the year	3,832	4,577
Re-measurements of defined benefit plans	7	8
Total comprehensive income for the year (“Total return”)	3,839	4,585
Total return on opening shareholders’ funds	23%	36%

Investment basis and Alternative Performance Measures (“APMs”)

In our Strategic report, we report our financial performance using our Investment basis. We do not consolidate our portfolio companies as

private equity and infrastructure investments are not operating subsidiaries. IFRS 10 sets out an exception to consolidation and requires us to

fair value other companies in the Group (primarily intermediate holding companies and partnerships). As explained in the Investment basis,

Reconciliation of Investment basis and IFRS sections below, the total comprehensive income and net assets are the same under our audited

IFRS financial statements and our Investment basis. The Investment basis is simply a “look through” of IFRS 10 to present the underlying

performance and we believe it is more transparent to readers of our Annual report and accounts.

In October 2015, the European Securities and Markets Authority (“ESMA”) published guidelines about the use of APMs. These

are financial measures such as KPIs that are not defined under IFRS. Our Investment basis is itself an APM, and we use a number of other

measures which, on account of being derived from the Investment basis, are also APMs.

Further information about our use of APMs, including the applicable reconciliations to the IFRS equivalent where appropriate, is provided at the

end of the Financial review and should be read alongside the Investment basis to IFRS reconciliation. Our APMs are gross investment return as a

percentage of the opening investment portfolio value, cash realisations, cash investment, operating cash profit, net cash/(debt) and gearing.

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3i Group plc | Annual report and accounts 2024 70

Realised losses/profits

In the year, we recognised a small realised loss of £4 million (2023:

profit of £169 million) relating to Infrastructure. We generated total

realised proceeds of £888 million (2023: £857 million) primarily from

Action’s capital restructuring.

Unrealised value movements

We recognised an unrealised profit of £ 3,926 million ( 2023:

£ 3,769 million). Action’s continued strong performance contributed

£ 3,609 million ( 2023: £3,708 million). We also saw good contributions

from a number of our other Private Equity investments including

Royal Sanders, EBG, AES, Cirtec Medical, Q Holding, MPM, ten23

health, MAIT and Audley Travel, offsetting negative contributions

from arrivia, Tato, WilsonHCG, Luqom, SaniSure and Basic-Fit. Our

infrastructure portfolio delivered a good return, driven by the

increase in the share price of our quoted investment in 3iN.

Further information on the Private Equity, Infrastructure and

Scandlines valuations is included in the business reviews.

Portfolio income

Portfolio income increased to £ 591 million for the year (2023:

£514 million), primarily due to dividend income of £499 million (2023:

£ 416 million), particularly from Action and Royal Sanders and interest

income from portfolio companies, the majority of which is non-cash.

Fees receivable from external funds

Fees received from external funds increased to £72 million (2023:

£70 million). 3i receives a fund management fee from 3iN, which

amounted to £51 million in FY2024 (2023: £49 million).

The remaining fee income received in the year of £21 million (2023:

£21 million) includes fees from 3i MIA, our management of the 3i

2020 Co-investment Programme related to Action and other funds.

Operating expenses

Operating expenses increased in the year to £147 million (2023: £138

million) driven by a higher share-based payment charge reflecting the

strong performance of 3i’s share price during the year which was

offset by delayed staff recruitment.

Interest payable

The Group recognised interest payable of £61 million (2023:

£54 million). Interest payable predominantly includes interest on the

Group’s loans and borrowings and amortisation of capitalised fees.

Operating cash profit

We generated an operating cash profit of £467 million in the year

(2023 : £364 million). Cash income increased to £594 million (2023:

£497 million), principally due to an increase in dividend income, which

included £375 million of cash dividends from Action (2023:

£325 million). We also received cash dividends from Royal Sanders,

3iN, Scandlines, Tato and AES, as well as cash fees from our external

funds. Excluding the dividends received from Action, the operating

cash profit was £92 million.

Cash operating expenses of £127 million (2023: £133 million)

decreased in the year due to the timing of payments. Cash operating

expenses are lower than the £147 million (2023: £138 million) of

operating expenses recognised in the Consolidated statement of

comprehensive income as a result of share-based payments and

other non-cash expenses.

Table 10: Unrealised value movements on the revaluation of investments for the year to 31 March

Investment basis	2024 £m	2023 £m
Private Equity	3,874	3,746
Infrastructure	72	23
Scandlines	(20)	–
Total	3,926	3,769

Table 11: Operating cash profit for the year to 31 March

Investment basis	2024 £m	2023 £m
Cash fees from external funds	74	67
Cash portfolio fees	12	5
Cash portfolio dividends and interest	508	425
Cash income	594	497
Cash operating expenses1	(127)	(133)
Operating cash profit	467	364

1 Cash operating expenses include operating expenses paid and lease payments.

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3i Group plc | Annual report and accounts 2024 71

Carried interest and performance fees

We receive carried interest and performance fees from third-party

funds and 3iN. We also pay carried interest and performance fees to

participants in plans relating to returns from investments. These are

received and/or paid subject to meeting certain performance

conditions. In Private Equity (excluding Action), we typically accrue

net carried interest payable of c.12% of GIR and for Action carried

interest payable of c.3% of Action’s GIR, based on the assumption

that all investments are realised at their balance sheet value. Carried

interest is paid to participants when cash proceeds have actually

been received following a realisation, refinancing event or other cash

distribution and performance hurdles are passed in cash terms. Due

to the length of time between investment and realisation, the

schemes are usually active for a number of years and their

participants include both current and previous employees of 3i.

In the year to 31 March 2024, we reduced our carried interest and

performance fees payable balance to £818 million (2023: £1,351

million), primarily driven by £735 million paid in relation to Action, as

a result of crystallising a further portion of the carried interest liability

in the Buyouts 2010-12 carry scheme. As a result of these payments

and the further investment in Action in the year, our net holding in

Action, after carried interest, is now 53.2% (31 March 2023: 48.9%).

The strong performance of Action in the Buyouts 2010-12 vintage

and good performance of a number of portfolio companies in our

other vintages in Private Equity led to a £262 million increase in

carried interest payable in FY2024.

In Infrastructure, 3iN pays a performance fee based on its NAV on an

annual basis, subject to a hurdle rate of return. The continued strong

performance of the assets held by 3iN and the sale of Attero, resulted

in the recognition of £62 million (2023: £35 million) of performance

fees receivable. £43 million (2023: £25 million) was recognised as

carried interest and performance fees payable. During the year, we

received £58 million of performance fees and paid £33 million to the

Infrastructure team.

Overall, the effect of the income statement charge of £305 million

(2023: £418 million), cash payments of £778 million (2023: £51 million),

as well as currency translation meant that the balance sheet carried

interest and performance fees payable was £818 million (31 March

2023: £1,351 million).

Table 12: Carried interest and performance fees for the year to 31 March

Investment basis Statement of comprehensive income	2024 £m	2023 £m
Carried interest and performance fees receivable
Private Equity	–	4
Infrastructure	62	37
Total	62	41
Carried interest and performance fees payable
Private Equity	(262)	(392)
Infrastructure	(43)	(26)
Total	(305)	(418)
Net carried interest payable	(243)	(377)

Table 13: Carried interest and performance fees at 31 March

Investment basis Statement of financial position	2024 £m	2023 £m
Carried interest and performance fees receivable
Private Equity	5	6
Infrastructure	42	37
Total	47	43
Carried interest and performance fees payable
Private Equity	(803)	(1,325)
Infrastructure	(15)	(26)
Total	(818)	(1,351)

Table 14: Carried interest and performance fees paid in the year to 31 March

Investment basis cash flow statement			2024 £m	2023 £m
Carried interest and performance fees cash paid
Private Equity			745	24
Infrastructure			33	27
Total			778	51

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3i Group plc | Annual report and accounts 2024 72

Net foreign exchange movements

The Group recorded a total foreign exchange translation loss

of £316 million including the impact of foreign exchange hedging

in the year (March 2023: £623 million gain), as a result of sterling

strengthening by 3% against the euro and by 2% against the

US dollar.

At 31 March 2024, the notional value of the Group’s forward foreign

exchange contracts was €2.6 billion and $1.2 billion. The €2.6 billion

includes the €600 million notional value of the forward foreign

exchange contracts related to the Scandlines hedging programme.

Including the impact from foreign exchange hedging, 75% of the

Group’s net assets are denominated in euros or US dollars. Based on

the Group’s net assets at 31 March 2024, including the impact from

foreign exchange hedging, a 1% movement in euro and US dollar

foreign exchange rates would impact total return by £140 million

and £12 million, as shown in Table 15 below.

Pension

The Group’s UK defined benefit plan (“the Plan”) is fully insured

following previous buy-in policies with Legal & General in May 2020

and February 2019 and Pension Insurance Corporation in March 2017.

These polices provide long-term security for the Plan members and 3i

is no longer exposed to any material longevity, interest or inflation

risk in the Plan or any ongoing requirement to fund the Plan. The

Trustees of the Plan wrote to members on 18 March 2024 to confirm

that they were proceeding with their plan to buy out members’

benefits and to distribute the surplus to the Company. This

transaction is expected to complete in FY2025.

During the year the Group recognised a £7 million re-measurement

gain on the Plan, following a reduction in the tax rate used to restrict

the surplus to 25% (31 March 2023: 35%), following a legislative

change made by the government effective from 6 April 2024. There

was no re-measurement gain (2023: £8 million) on the German

defined benefit plan.

Tax

The Group’s parent company continues to operate in the UK as

an approved investment trust company. An approved investment

trust is a UK investment company, which is required to meet certain

conditions set out in the UK tax rules to obtain and maintain its tax

status. This approval allows certain investment profits of the

Company, broadly its capital profits, to be exempt from tax in the UK.

The Group’s tax charge for the year was £2 million (2023: £2 million).

The Group’s overall UK tax position for the financial year is

dependent on the finalisation of tax returns of the various corporate

and partnership entities in the UK group.

Table 15: Net assets1 and sensitivity by currency at 31 March

	FX rate	£m	%	1% sensitivity £m
Sterling	n/a	4,817	24	n/a
Euro2	1.1695	13,947	69	140
US dollar2	1.2633	1,180	6	12
Danish krone	8.7236	200	1	2
Other	n/a	26	–	n/a

1The Group’s foreign exchange hedging is treated as a sterling asset within the above table.

2The sensitivity impact calculated on the net assets position includes the impact of foreign exchange hedging.

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3i Group plc | Annual report and accounts 2024 73

Balance sheet and liquidity

During the year, we successfully issued a six-year €500 million bond at

a coupon of 4.875% and extended the tenor of the £400 million

tranche of our £900 million RCF to November 2026, with both

transactions further strengthening our liquidity profile.

At 31 March 2024, the Group had net debt of £806 million

(31 March 2023: £363 million) and gearing of 4% after the receipt

of strong cash income of £594 million and net cash proceeds

of £280 million, offsetting the payment of carried interest and

performance fees of £778 million and Group dividend payments of

£541 million.

The Group had liquidity of £1,296 million as at 31 March 2024 (31

March 2023: £1,312 million), comprising cash and deposits of £396

million (31 March 2023: £412 million) and an undrawn RCF of £900

million.

The investment portfolio value increased to £21,636 million

at 31 March 2024 (31 March 2023: £18,388 million), mainly driven

by unrealised profits of £3,926 million in the year.

Further information on investments and realisations is included

in the Private Equity, Infrastructure and Scandlines business reviews.

Going concern

The Annual report and accounts 2024 are prepared on a going

concern basis. The Directors made an assessment of going concern,

taking into account the Group’s current performance and the

outlook, and performed additional analysis to support the going

concern assessment. Further details on going concern can be found

on page 128 in the Resilience statement.

Dividend

The Board has recommended a second FY2024 dividend of 34.50

pence per share (2023: 29.75 pence), taking the total dividend for the

year to 61.0 pence per share (2023: 53.0 pence). Subject

to shareholder approval, the dividend will be paid to shareholders

in July 2024.

Table 16: Simplified consolidated balance sheet at 31 March

Investment basis Statement of financial position	2024 £m	2023 £m
Investment portfolio	21,636	18,388
Gross debt	(1,202)	(775)
Cash and deposits	396	412
Net debt	(806)	(363)
Carried interest and performance fees receivable	47	43
Carried interest and performance fees payable	(818)	(1,351)
Other net assets	111	127
Net assets	20,170	16,844
Gearing1	4%	2%

1Gearing is net debt as a percentage of net assets.

Key accounting judgements and estimates

A key judgement is the assessment required to determine the degree of control or influence the Group exercises and the form of

any control to ensure that the financial treatment of investment entities is accurate. The introduction of IFRS 10 resulted in a number

of intermediate holding companies being presented at fair value, which has led to reduced transparency of the underlying investment

performance. As a result, the Group continues to present a non-GAAP Investment basis set of financial statements to ensure that the

commentary in the Strategic report remains fair, balanced and understandable. The reconciliation of the Investment basis to IFRS

is shown on pages 76 to 78 .

In preparing these accounts, the key accounting estimates are the carrying value of our investment assets, which is stated at fair value,

and the calculation of carried interest payable.

Given the importance of the valuation of investments, the Board has a separate Valuations Committee to review the valuation policy,

process and application to individual investments. However, asset valuations for unquoted investments are inherently subjective, as they

are made on the basis of assumptions which may not prove to be accurate. At 31 March 2024, 96% by value of the investment assets

were unquoted (31 March 2023: 95%).

The valuation of the proprietary capital portfolio is a primary input into the carried interest payable and receivable balances,

which are determined by reference to the valuation at 31 March 2024 and the underlying investment management agreements.

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3i Group plc | Annual report and accounts 2024 74

Background to Investment basis financial statements

The Group makes investments in portfolio companies directly, held

by 3i Group plc, and indirectly, held through intermediate holding

company and partnership structures (“Investment entity

subsidiaries”). It also has other operational subsidiaries which provide

services and other activities such as employment, regulatory activities,

management and advice (“Trading subsidiaries”). The application

of IFRS 10 requires us to fair value a number of intermediate holding

companies that were previously consolidated line by line. This fair

value approach, applied at the intermediate holding company level,

effectively obscures the performance of our proprietary capital

investments and associated transactions occurring in the

intermediate holding companies.

The financial effect of the underlying portfolio companies and

fee income, operating expenses and carried interest transactions

occurring in Investment entity subsidiaries are aggregated into

a single value. Other items which were previously eliminated

on consolidation are now included separately.

To maintain transparency in our report and aid understanding we

introduced separate non-GAAP “Investment basis” Statements of

comprehensive income, financial position and cash flow in our 2014

Annual report and accounts. The Investment basis is an APM and the

Strategic report is prepared using the Investment basis as we believe

it provides a more understandable view of our performance. Total

return and net assets are equal under the Investment basis and IFRS;

the Investment basis is simply a “look through” of IFRS 10 to present

the underlying performance.

Reconciliation of Investment basis and IFRS

A detailed reconciliation from the Investment basis to IFRS basis

of the Consolidated statement of comprehensive income,

Consolidated statement of financial position and Consolidated

cash flow statement is shown on the following pages.

Investment basis of consolidation

3i Group plc

The Group

Investment entity subsidiaries

Trading subsidiaries (regulated investment advisers, employment entities, etc.)

Inter-company balance eliminated on consolidation

Portfolio companies (held directly by 3i Group plc)

Portfolio companies

l

Consolidated

l

Fair valued

IFRS 10 basis of consolidation

3i Group plc

The Group

Investment entity subsidiaries

Trading subsidiaries (regulated investment advisers, employment entities, etc.)

Inter-company balance

Portfolio companies (held directly by 3i Group plc)

Portfolio companies

l

Consolidated

l

Fair valued

l

Portfolio company included in fair value of Investment entity subsidiaries

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3i Group plc | Annual report and accounts 2024 75

Reconciliation of consolidated statement of comprehensive income

for the year to 31 March

	Notes	Investment basis 2024 £m	IFRS adjustments 2024 £m	IFRS basis 2024 £m	Investment basis 2023 £m	IFRS adjustments 2023 £m	IFRS basis 2023 £m
Realised (losses)/profits over value on the disposal of investments	1,2	(4)	5	1	169	(105)	64
Unrealised profits on the revaluation of investments	1,2	3,926	(1,184)	2,742	3,769	(1,872)	1,897
Fair value movements on investment entity subsidiaries	1	–	861	861	–	2,112	2,112
Portfolio income
Dividends	1,2	499	(136)	363	416	(187)	229
Interest income from investment portfolio	1,2	91	(62)	29	91	(62)	29
Fees receivable	1,2	1	2	3	7	3	10
Foreign exchange on investments	1,3	(461)	223	(238)	530	(327)	203
Movement in the fair value of derivatives		116	–	116	122	–	122
Gross investment return		4,168	(291)	3,877	5,104	(438)	4,666
Fees receivable from external funds		72	–	72	70	–	70
Operating expenses	4	(147)	1	(146)	(138)	1	(137)
Interest receivable	1	13	(4)	9	4	–	4
Interest payable		(61)	–	(61)	(54)	–	(54)
Exchange movements	1,3	29	23	52	(29)	23	(6)
Income from investment entity subsidiaries	1	–	21	21	–	30	30
Other income/(expense)		3	–	3	(1)	–	(1)
Operating profit before carried interest		4,077	(250)	3,827	4,956	(384)	4,572
Carried interest
Carried interest and performance fees receivable	1,4	62	–	62	41	–	41
Carried interest and performance fees payable	1,4	(305)	254	(51)	(418)	380	(38)
Operating profit before tax		3,834	4	3,838	4,579	(4)	4,575
Tax charge	1,4	(2)	–	(2)	(2)	–	(2)
Profit for the year		3,832	4	3,836	4,577	(4)	4,573
Other comprehensive income
Exchange differences on translation of foreign operations	1,3	–	(4)	(4)	–	4	4
Re-measurements of defined benefit plans		7	–	7	8	–	8
Other comprehensive income for the year		7	(4)	3	8	4	12
Total comprehensive income for the year (“Total return”)		3,839	–	3,839	4,585	–	4,585

The IFRS basis is audited and the Investment basis is unaudited.

Notes to the Reconciliation of consolidated statement of comprehensive income above:

1Applying IFRS 10 to the Consolidated statement of comprehensive income consolidates the line items of a number of previously consolidated subsidiaries into a single line item “Fair value movements on investment entity

subsidiaries”. In the “Investment basis” accounts we have disaggregated these line items to analyse our total return as if these Investment entity subsidiaries were fully consolidated, consistent with prior years. The adjustments

simply reclassify the Consolidated statement of comprehensive income of the Group, and the total return is equal under the Investment basis and the IFRS basis.

2Realised profits, unrealised profits and portfolio income shown in the IFRS accounts only relate to portfolio companies that are held directly by 3i Group plc and not those portfolio companies held through Investment entity

subsidiaries. Realised profits, unrealised profits and portfolio income in relation to portfolio companies held through Investment entity subsidiaries are aggregated into the single “Fair value movement on investment entity

subsidiaries” line. This is the most significant reduction of information in our IFRS accounts.

3Foreign exchange movements have been reclassified under the Investment basis as foreign currency asset and liability movements. Movements within the Investment entity subsidiaries are included within “Fair value movements

on investment entities”.

4Other items also aggregated into the “Fair value movements on investment entity subsidiaries” line include fees receivable from external funds, audit fees, administration expenses, carried interest and tax.

Notes to the Reconciliation of consolidated statement of financial position on page 77:

1Applying IFRS 10 to the Consolidated statement of financial position aggregates the line items into the single line item “Investments in investment entity subsidiaries”. In the Investment basis we have disaggregated these items

to analyse our net assets as if the Investment entity subsidiaries were consolidated. The adjustment reclassifies items in the Consolidated statement of financial position. There is no change to the net assets, although for reasons

explained below, gross assets and gross liabilities are different. The disclosure relating to portfolio companies is significantly reduced by the aggregation, as the fair value of all investments held by Investment entity subsidiaries

is aggregated into the “Investments in investment entity subsidiaries” line. We have disaggregated this fair value and disclosed the underlying portfolio holding in the relevant line item, ie, quoted investments or unquoted

investments. Other items which may be aggregated include carried interest, other assets and other payables, and the Investment basis presentation again disaggregates these items.

2Intercompany balances between Investment entity subsidiaries and trading subsidiaries also impact the transparency of our results under the IFRS basis. If an Investment entity subsidiary has an intercompany balance with a

consolidated trading subsidiary of the Group, then the asset or liability of the Investment entity subsidiary will be aggregated into its fair value, while the asset or liability of the consolidated trading subsidiary will be disclosed

as an asset or liability in the Consolidated statement of financial position for the Group.

3Investment basis financial statements are prepared for performance measurement and therefore reserves are not analysed separately under this basis.

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3i Group plc | Annual report and accounts 2024 76

Reconciliation of consolidated statement of financial position

as at 31 March

	Notes	Investment basis 2024 £m	IFRS adjustments 2024 £m	IFRS basis 2024 £m	Investment basis 2023 £m	IFRS adjustments 2023 £m	IFRS basis 2023 £m
Assets
Non-current assets
Investments
Quoted investments	1	946	(67)	879	962	(121)	841
Unquoted investments	1	20,690	(6,497)	14,193	17,426	(8,749)	8,677
Investments in investment entity subsidiaries	1,2	–	5,804	5,804	–	7,844	7,844
Investment portfolio		21,636	(760)	20,876	18,388	(1,026)	17,362
Carried interest and performance fees receivable	1	2	1	3	3	–	3
Other non-current assets	1	36	(8)	28	33	(3)	30
Intangible assets		4	–	4	5	–	5
Retirement benefit surplus		61	–	61	53	–	53
Property, plant and equipment		4	–	4	3	–	3
Right of use asset		49	–	49	9	–	9
Derivative financial instruments		83	–	83	73	–	73
Total non-current assets		21,875	(767)	21,108	18,567	(1,029)	17,538
Current assets
Carried interest and performance fees receivable	1	45	–	45	40	–	40
Other current assets	1	53	(6)	47	41	(11)	30
Current income taxes		1	–	1	1	–	1
Derivative financial instruments		82	–	82	48	–	48
Cash and cash equivalents	1	396	(38)	358	412	(250)	162
Total current assets		577	(44)	533	542	(261)	281
Total assets		22,452	(811)	21,641	19,109	(1,290)	17,819
Liabilities
Non-current liabilities
Trade and other payables	1	(50)	45	(5)	(11)	7	(4)
Carried interest and performance fees payable	1	(280)	250	(30)	(1,049)	1,006	(43)
Loans and borrowings		(1,202)	–	(1,202)	(775)	–	(775)
Derivative financial instruments		–	–	–	(3)	–	(3)
Retirement benefit deficit		(21)	–	(21)	(20)	–	(20)
Lease liability		(45)	–	(45)	(5)	–	(5)
Deferred income taxes		(1)	–	(1)	(1)	–	(1)
Provisions		(2)	–	(2)	(4)	–	(4)
Total non-current liabilities		(1,601)	295	(1,306)	(1,868)	1,013	(855)
Current liabilities
Trade and other payables	1	(136)	2	(134)	(85)	9	(76)
Carried interest and performance fees payable	1	(538)	514	(24)	(302)	268	(34)
Derivative financial instruments		–	–	–	(1)	–	(1)
Lease liability		(4)	–	(4)	(5)	–	(5)
Current income taxes		(3)	–	(3)	(4)	–	(4)
Total current liabilities		(681)	516	(165)	(397)	277	(120)
Total liabilities		(2,282)	811	(1,471)	(2,265)	1,290	(975)
Net assets		20,170	–	20,170	16,844	–	16,844
Equity
Issued capital		719	–	719	719	–	719
Share premium		791	–	791	790	–	790
Other reserves	3	18,752	–	18,752	15,443	–	15,443
Own shares		(92)	–	(92)	(108)	–	(108)
Total equity		20,170	–	20,170	16,844	–	16,844

The IFRS basis is audited and the Investment basis is unaudited.

Notes: see page 76 .

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3i Group plc | Annual report and accounts 2024 77

Reconciliation of consolidated cash flow statement

for the year to 31 March

	Notes	Investment basis 2024 £m	IFRS adjustments 2024 £m	IFRS basis 2024 £m	Investment basis 2023 £m	IFRS adjustments 2023 £m	IFRS basis 2023 £m
Cash flow from operating activities
Purchase of investments	1	(603)	97	(506)	(330)	284	(46)
Proceeds from investments	1	883	(340)	543	885	(658)	227
Amounts paid to investment entity subsidiaries	1	–	(674)	(674)	–	(535)	(535)
Amounts received from investment entity subsidiaries	1	–	580	580	–	841	841
Net cash flow from derivatives		69	–	69	23	–	23
Portfolio interest received	1	8	(3)	5	19	(7)	12
Portfolio dividends received	1	500	(134)	366	406	(183)	223
Portfolio fees received	1	12	–	12	5	–	5
Fees received from external funds		74	–	74	67	–	67
Carried interest and performance fees received	1	58	–	58	58	–	58
Carried interest and performance fees paid	1	(778)	725	(53)	(51)	22	(29)
Operating expenses paid	1	(121)	–	(121)	(128)	–	(128)
Co-investment loans received	1	42	(37)	5	3	2	5
Tax paid	1	(3)	–	(3)	–	–	–
Other cash income	1	3	(1)	2	–	–	–
Interest received	1	13	(4)	9	4	–	4
Net cash flow from operating activities		157	209	366	961	(234)	727
Cash flow from financing activities
Issue of shares		1	–	1	1	–	1
Purchase of own shares		–	–	–	(30)	–	(30)
Dividends paid		(541)	–	(541)	(485)	–	(485)
Repayment of long-term borrowing		–	–	–	(200)	–	(200)
Proceeds from long-term borrowing		422	–	422	–	–	–
Lease payments		(6)	–	(6)	(5)	–	(5)
Interest paid		(40)	–	(40)	(54)	–	(54)
Net cash flow from financing activities		(164)	–	(164)	(773)	–	(773)
Cash flow from investing activities
Purchase of property, plant and equipment		(3)	–	(3)	(1)	–	(1)
Net cash flow from investing activities		(3)	–	(3)	(1)	–	(1)
Change in cash and cash equivalents	2	(10)	209	199	187	(234)	(47)
Cash and cash equivalents at the start of year	2	412	(250)	162	229	(17)	212
Effect of exchange rate fluctuations	1	(6)	3	(3)	(4)	1	(3)
Cash and cash equivalents at the end of year	2	396	(38)	358	412	(250)	162

The IFRS basis is audited and the Investment basis is unaudited.

Notes to the Reconciliation of consolidated cash flow statement above:

1The Consolidated cash flow statement is impacted by the application of IFRS 10 as cash flows to and from Investment entity subsidiaries are disclosed, rather than the cash flows to and from the underlying portfolio. Therefore

in our Investment basis financial statements, we have disclosed our cash flow statement on a “look through” basis, in order to reflect the underlying sources and uses of cash flows and disclose the underlying investment activity.

2There is a difference between the change in cash and cash equivalents of the Investment basis financial statements and the IFRS financial statements because there are cash balances held in Investment entity subsidiaries.

Cash held within Investment entity subsidiaries will not be shown in the IFRS statements but will be seen in the Investment basis statements.

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3i Group plc | Annual report and accounts 2024 78

We assess our performance using a variety of measures that are not specifically defined under IFRS and are therefore termed APMs. The APMs

that we use may not be directly comparable with those used by other companies. Our Investment basis is itself an APM. The explanation of

and rationale for the Investment basis and its reconciliation to IFRS is provided on page 75. The table below defines our additional APMs.

Gross investment return as a percentage of opening portfolio value
Purpose A measure of the performance of our proprietary investment portfolio.	Calculation It is calculated as the gross investment return, as shown in the Investment basis Consolidated statement of comprehensive income, as a % of the opening portfolio value.	Reconciliation to IFRS The equivalent balances under IFRS and the reconciliation to the Investment basis are shown in the Reconciliation of the consolidated statement of comprehensive income and the Reconciliation of the consolidated statement of financial position respectively.
				Page 18 KPIs
Cash realisations
Purpose Cash proceeds from our investments support our returns to shareholders, as well as our ability to invest in new opportunities.	Calculation The cash received from the disposal of investments in the year as shown in the Investment basis Consolidated cash flow statement.	Reconciliation to IFRS The equivalent balance under IFRS and the reconciliation to the Investment basis is shown in the Reconciliation of the consolidated cash flow statement.
				Page 18 KPIs
Cash investment1
Purpose Identifying new opportunities in which to invest proprietary capital is the primary driver of the Group’s ability to deliver attractive returns.	Calculation The cash paid to acquire investments in the year as shown on the Investment basis Consolidated cash flow statement.	Reconciliation to IFRS The equivalent balance under IFRS and the reconciliation to the Investment basis is shown in the Reconciliation of the consolidated cash flow statement.
				Page 18 KPIs
Operating cash profit
Purpose By covering the cash cost of running the business with cash income, we reduce the potential dilution of capital returns.	Calculation The cash income from the portfolio (interest, dividends and fees) together with fees received from external funds less cash operating expenses and leases payments as shown on the Investment basis Consolidated cash flow statement. The calculation is shown in Table 11 of the Financial review.	Reconciliation to IFRS The equivalent balance under IFRS and the reconciliation to the Investment basis is shown in the Reconciliation of the consolidated cash flow statement.
				Page 18 KPIs
		Net (debt)/cash
Purpose A measure of the available cash to invest in the business and an indicator of the financial risk in the Group’s balance sheet.		Calculation Cash and cash equivalents plus deposits less loans and borrowings as shown on the Investment basis Consolidated statement of financial position.	Reconciliation to IFRS The equivalent balance under IFRS and the reconciliation to the Investment basis is shown in the Reconciliation of the consolidated statement of financial position.
Gearing
Purpose A measure of the financial risk in the Group’s balance sheet.	Calculation Net debt (as defined above) as a % of the Group’s net assets under the Investment basis. It cannot be less than zero.	Reconciliation to IFRS The equivalent balance under IFRS and the reconciliation to the Investment basis is shown in the Reconciliation of the consolidated statement of financial position.
1 Cash investment of £593 million is different to cash investment per the cash flow of £603 million due to a £10 million investment in Private Equity which was recognised in FY2023 and paid in FY2024.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Alternative Performance Measures (“APMs”)

3i Group plc | Annual report and accounts 2024 79

Effective risk management underpins

the successful delivery of our strategy

and longer-term sustainability of the business.

Our values and culture are integral to our

approach to risk management.

Understanding our risk appetite

As both an investor and asset manager, 3i is in the business of taking

risks in order to seek to achieve its targeted returns for shareholders

and other investors.

The Board approves the strategic objectives that determine the level

and types of risk that 3i is prepared to accept. The Board reviews 3i’s

strategic objectives and associated risk appetite at least annually.

The Group’s risk management framework is designed to support the

delivery of the Group’s strategic objectives and the longer-term

sustainability of the business and its investment portfolio, within the

agreed risk appetite parameters.

3i’s Risk appetite statement, which is consistent with previous years,

is built on rigorous and comprehensive investment procedures

and conservative capital management. Please refer to page 81

for further details.

Values and culture

Strong values and institutional culture are integral to our approach to

risk management and are embedded in 3i’s approach to risk

governance, described in the next section, led by the Board and the

Chief Executive. To underpin this, 3i has in place a comprehensive

compliance manual, code of conduct and policy framework,

supported by a systematic programme of refresher training and

independent monitoring.

Members of the Executive Committee are responsible for ensuring

individual behaviours meet the Group’s high standards of conduct

across their respective business or functional areas. All employees

share the responsibility for upholding 3i’s strong control culture and

supporting effective risk management. Senior managers, typically

those who report to Executive Committee members, are required to

confirm their individual and business area compliance annually. In

addition, all staff are required to comply with regulatory conduct

rules, complete an annual verification questionnaire, and are

assessed on how they demonstrate 3i’s values as part of their annual

appraisal. 3i’s global policies and procedures are reinforced through

an annual e-learning programme covering topics such as financial

crime, anti-bribery and money laundering, market abuse and

regulatory conduct rules.

Finally, the Remuneration Committee is responsible for ensuring the

Group’s remuneration policy is aligned with the Group’s culture and

values, weighted towards variable compensation dependent

on performance, and does not encourage inappropriate or excessive

risk taking. More specifically, our investment teams, who are

responsible for investment origination and asset management, have

reward structures specifically designed to ensure alignment with

the Group’s investment objectives and risk management appetite.

Approach to risk governance

The Board is responsible for risk assessment, the risk management

process and the protection of the Group’s reputation, brand integrity

and longer-term sustainability. It considers the most significant

current and emerging risks facing the Group using a range of

quantitative data and analyses where possible. These include: vintage

controls which consider the portfolio concentration by geography

and sector; periodic reporting of financial and non-financial KPIs from

the portfolio, including leverage levels and ESG indicators; and

liquidity reporting. Longer-term and new and emerging risks are

evaluated as part of the strategic review process and development of

the Group’s investment strategy.

Board oversight is exercised through the Audit and Compliance

Committee which focuses on: upholding standards of integrity;

financial and non-financial reporting; risk management; going

concern and resilience; and internal control. This includes monitoring

and reviewing the effectiveness of the risk management and internal

control systems. The Audit and Compliance Committee’s activities

are discussed further in its report on pages 122 to 127.

The Investment Committee oversees the investment pipeline

development and approves new investments, significant portfolio

changes and divestments. It is integral to ensuring a consistent

approach to managing the Group’s most material risks. This includes

alignment with 3i’s financial and strategic objectives and risk appetite,

and ensuring that the long-term sustainability of portfolio companies

is taken into consideration.

The Board has delegated the responsibility for risk oversight to the

Chief Executive. He is assisted by the Group Risk Committee (“GRC”)

in managing this responsibility, and is guided by the Board’s appetite

for risk and any specific limits set. The GRC maintains the Group risk

review, which summarises the Group’s principal risks, associated

mitigating actions and key risk indicators, and identifies any changes

to the Group’s risk profile. The review also incorporates a watch list

of new and emerging risks for monitoring and risk mitigation

purposes. The risk review takes place four times a year, with the last

review in April 2024, and the Chief Executive provides updates after

each meeting to the Audit and Compliance Committee.

Please refer to pages 82 to 84 for further details on the Group’s risk

governance framework.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Risk management

3i Group plc | Annual report and accounts 2024 80

Risk appetite Our risk appetite is defined by our strategic objectives. We invest capital in businesses to deliver capital returns, and portfolio and fund management cash income to cover our costs and increase returns to our investors. As proprietary capital investors we have a long-term, responsible approach. Investment risk The substantial majority of the Group’s capital is invested in Private Equity. Before the Group commits to a Private Equity investment, we assess the opportunity using the following criteria: • return objective: individually assessed and subject to a minimum target of a 2x money multiple over four to six years; • geographic focus: headquartered in our core markets of Europe and North America; • sector expertise: focus on Consumer, Healthcare, Industrial Technology, Services and Software; • responsible investment: all investments are screened against the criteria and exclusions set out in our Responsible Investment policy; and • vintage: invest up to £750 million per annum in four to seven new investments in companies with an enterprise value range of €100 million to €500 million at investment. Investments made by 3iN need to be consistent with 3iN’s overall return target of 8% to 10% over the medium term and generate a mix of capital and income returns. Other Infrastructure investments made by the Group should be capable of delivering capital growth and fund management fees which together generate mid-teen returns. All Infrastructure investments are also made subject to the criteria set out in the Group’s Responsible Investment policy. On occasion, the Group may conclude that it is in the interest of shareholders, and consistent with our strategic objectives, to hold a Private Equity investment for a longer period. Capital management 3i adopts a conservative approach to managing its capital resources as follows: • the Group aims to operate within a range of £500 million net cash to £1 billion net debt, with tolerance to operate outside of this range on a short-term basis and up to a gearing level of 15% dependent on investment and realisation flows. The Group may raise debt, or use other financing from time to time, to manage investment and realisation flows. The Group has no appetite for structural gearing; the achievement of its returns objectives is not reliant on gearing; • the Group manages liquidity conservatively; maintaining a RCF to provide additional committed liquidity and financial flexibility, and monitoring using a framework that assesses forecast cash flows and a broader range of factors; • the Group accepts a degree of currency exposure risk with respect to its investment portfolio, but aims to partially reduce the impact of currency movements on its net asset value through a combination of matching currency realisations with investments and the use of its euro and US dollar foreign exchange hedging programmes, taking into account the associated costs and liquidity risks. These portfolio hedging programmes have a total size of €2.0 billion and $1.2 billion respectively; • in addition, the Group may hedge specific assets or exposures where appropriate; for example, in relation to currency exposures on longer-term investments, such as Scandlines (€600 million hedging programme); and • we have limited appetite for the dilution of capital returns as a result of operating and interest expenses. All our business lines generate cash income to mitigate this risk.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Risk management continued

3i Group plc | Annual report and accounts 2024 81

Role of the Investment Committee

Our Investment Committee is fundamental to the management of

investment risk. It is involved in and approves every material step of

the investment, portfolio management and realisation process.

3i’s approach to portfolio construction is built on originating

opportunities thematically and investing selectively in businesses that

benefit from long-term structural sustainable growth. Integral to this

thematic approach is the identification of new and emerging risks

and opportunities, in areas such as: consumer preferences; the

environment and sustainability; technological change; and

demographic and social trends.

New investment opportunities are considered at the outset of the

investment process. Investment proposals cover the expected

benefit of operational improvements, growth initiatives, ESG

initiatives, and M&A activity, that will be driven by a combination of

our investment professionals and the portfolio company’s

management team. They will also include a view on the likely exit

strategy and timing. All proposed investments are screened against

3i’s Responsible Investment policy.

In evaluating new and existing investments, the Investment

Committee considers potential reputational risks and broader ESG

developments and trends. The latter includes the risks and

opportunities in relation to the environmental and social aspects of

each company’s products and services, the markets in which they

operate, and the supply chain. Investment cases may include

consideration of the feasibility and cost of initiatives to reduce

the company’s environmental footprint, where material.

After investing, 3i works with portfolio companies’ management to

manage risks and invest in initiatives that support sustainable long-

term growth, whilst closely monitoring each investment case:

• our monthly portfolio monitoring reviews assess current

performance against budget, prior year and a set of traffic light

indicators and bespoke, forward-looking financial and non-financial

KPIs;

• we hold semi-annual in-depth reviews of our portfolio companies.

These focus on the longer-term performance and plan for the

investment compared to the original investment case, together

with any strategic developments, a detailed assessment of ESG

risks and opportunities, and market outlook; and

• where necessary, additional reviews may take place for assets

where there are more significant operational challenges. As part

of this process, leverage, banking covenants and counterparty risks

are closely monitored across the portfolio.

Our monitoring processes consider instances where individual

portfolio company underperformance could have adverse

reputational consequences for the Group, even though the value

impact may not be material.

The monthly portfolio monitoring reviews and the semi-annual

reviews are attended by the Investment Committee and the senior

members of the investment teams. A number of non-executive

Directors attend the semi-annual reviews.

Finally, we recognise the need to plan and execute a successful

exit at the optimum time, taking consideration of market conditions.

This exit risk is closely linked to the external economic environment.

Exit plans are refreshed where appropriate in the semi-annual

portfolio reviews and the divestment process is clearly defined

and overseen by the Investment Committee.

We regularly review our internal processes and investment decisions

in light of actual outcomes. This includes periodic back-testing of the

more recent Private Equity investments by comparing their

performance and forecast returns on exit against the original

investment case presented at the time of the investment.

Role of the Group Risk Committee

The quarterly Group risk review process includes an analysis of key

developments since its last review; new and emerging risks; and the

key strategic and financial metrics (such as KPIs) considered to be

indicators of potential changes in the Group’s risk profile. The GRC

uses this information to determine and review its principal risks and

the implications of any new and emerging risks.

It then evaluates the impact and likelihood of each principal risk in

the context of the Group’s strategic objectives, risk appetite and with

reference to associated measures and KPIs. The adequacy of the

mitigation plans is then assessed and, if necessary, additional actions

are agreed and reviewed at the subsequent meeting. A report

summarising the key conclusions of each GRC meeting together with

a copy of the risk review report is provided to the Audit and

Compliance Committee, which provides independent oversight of

the work of the GRC, as described on pages 122 to 127.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Risk management continued

3i Group plc | Annual report and accounts 2024 82

A number of focus topics are also agreed in advance of each

meeting. In FY2024, the GRC covered the following:

• a review of the Group’s IT framework including cyber security,

systems developments, the use of Artificial Intelligence tools, and

IT resilience;

• an update on the Group’s business continuity and resilience

planning and testing, including oversight of third-party suppliers;

• a review of the Group’s stress tests to support its Going concern,

Viability and Resilience statements;

• semi-annual updates from the investment business lines on ESG

issues and themes with respect to the Group’s portfolio

companies, including progress with carbon reporting;

• semi-annual updates from 3i’s ESG Committee, including progress

with TCFD-aligned reporting; and

• the proposed risk disclosures in the FY2024 Annual report

and accounts.

There were no significant changes to the GRC’s overall approach

to risk governance or its operation in FY2024. This approach is

benchmarked from time to time against a peer group of private

equity investment trusts, European investment companies, traditional

asset managers and a selection of US alternative asset managers to

ensure it remains fit for purpose.

The GRC also receives an update on the Group’s risk log which is

used to record operational risk incidents and “near misses”. The

Board and Executive Committee have a very limited tolerance for

operational risk events and errors. Accordingly, a relatively low

reporting threshold is applied. This involves both a qualitative and

quantitative impact assessment; any financial losses or exposures

greater than £20,000 must be reported.

The risk log is also used to record incidents at portfolio companies

which could impact 3i’s reputation as an investor or where 3i may

have regulatory reporting obligations. Examples include fraud, cyber

security, data protection, health and safety, and litigation. The

responsible 3i investment team is required to set out the risk

mitigation steps being undertaken and provide updates on progress.

Role of the ESG Committee

The Group’s ESG Committee provides input and advice on

developing the Group’s ESG strategy; the assessment and

management of relevant ESG risk and opportunities; ESG related

regulatory and reporting obligations; and coordination of ESG-

related activities and initiatives.

The GRC receives semi-annual updates on the work of the

Committee as part of its risk review process. Refer to the

Sustainability section on pages 39 to 68 for further details.

Related risk management activities

3i’s risk management framework is augmented by a separate Risk

Management function (“function”) which has specific responsibilities

under the FCA’s Investment Funds sourcebook and is functionally

and hierarchically separate from the investment teams. It considers

the separate risk reports for each Alternative Investment Fund (“AIF”)

managed by the Group, including areas such as portfolio

composition, portfolio valuation, operational updates and team

changes, which are then considered by the GRC. The function meets

ahead of the GRC meetings to consider the AIF risk reports, and also

to discuss any key developments that might impact the principal risks

affecting the Group.

In practice, the Group operates a “three lines of defence” framework

to support the identification and management of risk. These are:

(1) First line – line management across our business lines and

professional services teams.

(2) Second line – teams with specific oversight and control

responsibilities – for example, Compliance, HR, Finance and IT –

and oversight and challenge by the GRC.

(3) Third line – Internal Audit, which provides independent assurance

over the operation of the Group’s risk management framework

and the internal controls designed to manage and mitigate risk.

Our responsible investment policy

www.3i.com/sustainability/sustainability-policies

Pages 16- 17

Our long-term, responsible approach

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Risk management continued

3i Group plc | Annual report and accounts 2024 83

3i’s approach to risk management consists of a number of interrelated processes, illustrated

below, the operation of which is overseen by a combination of the Investment Committee,

Executive Committee, Group Risk Committee and ESG Committee.

l	Responsibility of Investment Committee
l	Responsibility of Group Risk Committee
l	Responsibility of ESG Committee

Six-monthly portfolio company reviews and monthly updates Valuation process and monitoring Oversight by Group Risk Committee Regular Board and Audit and Compliance Committee updates Board review of business line plans and Group strategic model Approval of strategic objectives Review of organisational capability, diversity and succession plans

	Regular monitoring of market, economic and geopolitical developments Analysis of technological, societal and demographic changes and trends			Setting of sustainability strategy covering responsible investment, people and corporate citizenship Assessment of long-term sustainability, ESG and reputational risk profile of portfolio companies Oversight of ESG regulatory reporting requirements and associated processes, eg TCFD
		Our purpose
		Attractive returns Responsible approach Driving sustainable growth
	Investment Committee operates investment strategy, vintage control and asset management			Board review of risk appetite covering investment risk and capital management Setting of an appropriate conduct and culture framework and policies Alignment with remuneration strategy

Treasury policy and control framework, including oversight of Treasury Transactions Committee, as required Group Risk Committee review and monitoring of risk mitigation plans Assessment of principal, new and emerging risks Development and testing of viability and going concern scenarios

Page 80

Further details of the risk governance structure

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Integrated approach to risk management

3i Group plc | Annual report and accounts 2024 84

Business and risk environment in FY2024

We define our principal risks as those that have the potential

to  impact materially the delivery of our strategic objectives. During

the year, the Directors considered a robust assessment of the

principal and new and emerging risks facing the Group, including

those that would threaten its business model, future performance,

solvency or liquidity. Further details can be found in the Audit and

Compliance Committee report on pages 122 to 127.

This section provides an overview of the Group’s principal risks,

new and emerging risks, and the key matters considered during

the year as part of the risk assessment process.

The Group’s overall principal risk profile, summarised on on pages 89

to 93, has remained relatively stable although the precise nature of

the individual risks may have evolved. The main changes agreed by

the GRC during the year were:

• for the reasons noted opposite, “Geopolitical risks” have

increased; in particular, the potential impact of a wider conflict in

the Middle East;

• the likelihood and impact of the risk of “Volatility in capital markets,

foreign exchange and commodities” has reduced; however, this

could easily change given the current geopolitical backdrop;

• the risk of “Global economic uncertainty” is considered to be lower

compared to last year based on recent economic data and

forecasts, albeit this could be adversely affected by geopolitical

developments and other factors;

• the risk of “Lower investment or realisation rates” increased,

reflecting the low levels of deal activity and lack of liquidity in

private markets; and

• the risk of “Underperformance of portfolio companies” has been

split out to show Action separately from the remainder of the

investment portfolio in view of the materiality of the former.

The Group’s principal risk mitigation plans, which are subject to

regular review by the GRC, have not required any notable changes

during the year.

External

External risks are the risks to our business which are usually outside

of our direct control such as political, economic, environmental,

social, regulatory and competitor risks.

Geopolitical uncertainty has been a focal point of discussion for the

GRC over the past year. Of particular concern has been the potential

impact of the conflict in the Middle East and the risk of further

escalation or widening of the conflict with Russia. These conflicts have

the potential, inter alia, to increase market volatility and disrupt

supply chains, which could affect the operations of some of 3i’s

portfolio companies and impact 3i’s investment and realisation plans.

The period has been characterised by continued inflation, high

interest rates and slow economic growth. More recently, the global

economic outlook has improved, with evidence of falling inflation and

the expectation that interest rates may have peaked. There are still,

however, areas of continued weakness and considerable

uncertainties given the current geopolitical backdrop. The number of

key elections taking place in 2024 may also result in policy changes,

which could add further uncertainty in due course.

The main focus of the GRC has been on understanding how these

changes potentially play out across the different geographies and

sectors in which 3i’s portfolio companies operate, supply chain risks,

and the impact on deal activity. Measures and initiatives put in place

some time ago have enabled portfolio companies to manage their

performance through various economic headwinds. This is reflected

in the continued positive momentum in the overall portfolio

performance across both business lines; in particular, investments in

the areas of value-for-money, private label, healthcare and

infrastructure.

The Group’s resilience assessment and viability testing covers

a range of stress test scenarios including a number of severe

yet plausible external events linked back to the Group’s principal

risks. Further details can be found in the Group’s Resilience

statement on pages 128 to 130. As part of its overall resilience

planning, 3i continues to maintain a conservative approach to

managing its capital resources and costs.

ESG considerations are an important component of our strategic and

investment objectives and approach to risk management. Further

information on work done in relation to ESG reporting and

compliance obligations, including TCFD-aligned reporting, and our

approach to climate-related risk and opportunities can be found in

the Sustainability section on pages 39 to 68.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Principal risks and mitigations – aligning risk to our strategic objectives

3i Group plc | Annual report and accounts 2024 85

Investment

The Investment Committee is responsible for managing the Group’s

investment risks. The focus of the quarterly GRC meetings is on 3i’s

investment outcomes in the context of the Group’s risk appetite,

overall risk profile and potential risks to the achievement of its

strategic objectives.

The core areas of the Group’s investment strategy and focus remain

unchanged, although delivery of these continues to be refined in

terms of approach, resourcing and processes. The underlying views

on key long-term risks and trends remains consistent with last year.

During the year, the GRC discussed the lack of liquidity and low levels

of deal activity in private markets and the factors contributing to this,

including higher interest rates and unrealistic price expectations on

the part of sellers. This has impacted new investment levels; however,

a very selective and disciplined approach to investment remains

appropriate in the current market.

The risk of “Underperformance of portfolio companies” was split out

to show Action separately from the remainder of the investment

portfolio in view of the materiality and strong, cash generative

characteristics of the former. The GRC concluded that the

performance risk assessment for the portfolio excluding Action, has

been stable over the period, reflecting a resilient performance by the

majority of the portfolio, partly offset by a mixed performance by a

minority of companies in more challenged sectors.

Notwithstanding the challenging external environment described

previously, portfolio performance continues to benefit from: a

combination of the diversity and structure of the portfolio; a

disciplined approach to investment and exit planning; and mitigating

steps taken to address cost pressures and weaker consumer demand

where there is a particular exposure.

Our investment and portfolio monitoring processes continue to

evolve in response to new and evolving risks. 3i has recently updated

its Responsible Investment policy. ESG due diligence on new

investments is shifting from broader screening to a more targeted, in-

depth assessment process, together with enhanced standards and a

clearer ESG maturity roadmap to support portfolio companies.

The GRC receives updates on the work of the ESG Committee and

progress with ESG initiatives across the portfolio. Good progress has

been made in advancing the ESG maturity of the portfolio and

improving carbon measurement and reporting capabilities. This

includes the roll-out of a new ESG data collection tool for the

portfolio, which will support improved ESG reporting and monitoring.

Operational

3i’s operational risk profile has remained stable over the year.

Attracting and retaining key people remains a principal risk and

significant operational priority. Whilst competition in the recruitment

market has eased compared to last year, our overall risk assessment

is unchanged.

During the year, the Group experienced modest levels of voluntary

staff turnover; 6.0% in FY2024. This reflects 3i’s strong performance

and helps to underpin the longer-term resilience of the business.

Our Remuneration Committee ensures that our variable

compensation schemes are in line with market practice and

consistent with sound risk management. These schemes include

carried interest for investment executives, an important long-term

incentive, which rewards cash-to-cash returns.

The effective on-boarding and integration of new hires remains a

priority and is an important part of maintaining a cohesive Group

culture and good control mindset.

Detailed succession plans are in place for each business area.

The Board completed its last formal annual review of the Group’s

organisational capability and succession plans in September 2023.

The GRC also receives updates on IT security and operational

resilience. 3i has continued to operate robust and secure IT systems

supported by key third-party service providers. There were no

significant IT performance or security issues in the period. 3i

continues to review and refresh its IT systems, device strategy, and

cyber security framework. 3i engages the services of a leading cyber

security services company, including a part-time Chief Information

Security Officer, which provides ready access to intelligence and

expert advice on new and emerging cyber security threats.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Principal risks and mitigations – aligning risk to our strategic objectives continued

3i Group plc | Annual report and accounts 2024 86

Incident management and business continuity plans are reviewed

at least annually. This includes consideration of a broad range

of “severe but plausible” business disruption scenarios and

incorporates an assessment of third-party supplier risks.

Fraud risk is considered on a regular basis. 3i has a robust fraud risk

assessment and anti-fraud programme in place. The latter includes

fraud prevention work by Internal Audit, awareness training and

provision of an independent reporting service or “hotline” accessible

by all staff. The Group’s cyber security programme also aims to

identify and mitigate the risks of third-party frauds, for example,

ransomware and phishing attacks, through the use of IT security

tools and regular staff training.

Capital management

3i continues to maintain a conservative approach to managing its

capital resources and has operated within the limits set out in its Risk

appetite statement on page 81 and in accordance with the Treasury

policy approved by the Board. The latter includes a detailed liquidity

and currency exposure risk monitoring and reporting framework,

incorporating a range of quantitative and qualitative measures and

associated risk tolerance levels.

Accordingly, there are currently no principal risks in relation to capital

management.

New and emerging risks

The key elements to 3i’s approach to identifying and monitoring new

and emerging risks include the following:

• a thematic approach to investment origination and portfolio

construction, which involves consideration of emerging risks

and trends that can support long-term sustainable growth in the

portfolio;

• the quarterly review by the GRC of significant developments which

could potentially impact the Group’s risk profile and the

achievement of its strategic objectives;

• maintenance of a watch list of risks which are deemed of sufficient

importance to require active monitoring by the GRC, but are not

currently regarded as risks to the achievement of the Group’s

strategic objectives; and

• monitoring of developments by 3i’s professional service teams,

covering their respective specialist areas such as tax, legal and

regulatory compliance, and ESG.

3i’s thematic approach to investment origination and portfolio

construction is developed based on an analysis of new and emerging

risks and trends over a longer time horizon. The current themes

(pages 12 and 13) include: value-for-money and discount; energy

transition, energy security and resource scarcity; digitalisation, digital

transformation and big data; and demographic and social change.

This approach enables 3i to adapt its investment strategy in a way

which manages longer-term risks whilst taking advantage of the

upside opportunities.

The Board carries out an in-depth annual strategic review which

includes an update and discussion on current and emerging risks and

the Group’s risk appetite. The outputs are linked back to the work of

the GRC and the Investment Committee, the latter being responsible

for the execution of the investment strategy, including the

assessment and management of risks over the investment lifecycle.

The outputs also form part of our medium-term viability stress testing

and long-term business resilience assessment (pages 128 to 130).

New and emerging ESG risks are factored into the development of

3i’s investment themes. In addition, changes in legislation and

reporting requirements are closely monitored. Investment

opportunities are screened at an early stage against 3i’s Responsible

Investment policy to filter out any which are exposed to excessive

risks. Once invested, we monitor ESG risks closely and use our

influence to support our portfolio companies across a range of ESG-

related areas, including improvements in risk management processes;

addressing emerging regulations and legislation; and encouraging

the development of more environmentally sustainable behaviours. 3i

also has the flexibility to sell investments that become or have the

potential to become overly exposed to ESG risks. Further information

can be found in the Sustainability section on pages 39 to 68.

The quarterly GRC risk review considers any significant developments

which could impact the Group’s principal risks and the achievement

of its strategic objectives. The areas of risk considered include

external developments, investment outcomes, the Groups’ capital

management and operational risks. External developments typically

cover geopolitical developments, the economic outlook and market

performance. The focus is on near to medium-term emerging risks

and trends. Based on this analysis, the GRC reviews the need to

update principal risks and initiate or change the risk mitigation plan.

The Group’s current principal risks and risk mitigation plan are

summarised on pages 85 to 93.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Principal risks and mitigations – aligning risk to our strategic objectives continued

3i Group plc | Annual report and accounts 2024 87

In addition to the review of principal risks, the GRC maintains a watch

list of risks which are deemed of sufficient importance to require

active monitoring by the GRC but are not currently regarded as risks

to the achievement of the Group’s strategic objectives. This includes

new and emerging risks. The watch list sets out details of how these

risks are being mitigated and any further actions agreed by the GRC.

Risks on the watch list may be reclassified as principal risks and vice

versa based on the GRC’s assessment.

During the year, the risk of the “Impact of Artificial Intelligence (AI)”

was added to the watch list. The risk mitigation steps taken included

the introduction of a specific Group AI policy and the formation of an

AI steering group to make recommendations on the selection,

assessment and deployment of AI tools and to promote training and

awareness.

The other risks on the watch list remain unchanged from last year.

These include:

• external environment – increased ESG reporting and compliance

obligations; reputational risks in relation to the private equity

industry; uncertainty regarding the impact of global and local tax

initiatives; UK/EU trading relationship; and the potential re-

emergence of a global pandemic;

• investment outcomes – portfolio concentration; and the impact of

AI; and

• operations – third-party supplier resilience; and cyber security.

The risk mitigation plans for risks on the watch list are reviewed

quarterly by the GRC. The main changes during the year were in

relation to AI, as outlined above, and the application of 3i’s supplier

relationship management toolkit, which was extended to include

more suppliers for ongoing assessment and tracking purposes as

part of improvements to 3i’s business resilience planning.

Outlook

The longer-term economic outlook continues to be affected by a

number of factors including price inflation; cost-of-living pressures;

higher interest rates; and geopolitical tensions. Whilst there have

been some positive economic indicators, our outlook remains

cautious in view of the number of potential downside factors which

could impact economic growth and market volatility.

3i’s business model, its disciplined approach to investment, active

portfolio management, and diverse investment portfolio have been

resilient to the challenges of the past year. This resilience has also

been confirmed in the results of the latest stress tests carried out as

part of our viability assessment.

3i continues to work closely with portfolio management teams to

support their respective business and contingency plans in response

to challenging economic and market conditions. Where appropriate,

enhanced portfolio monitoring and reporting processes may be put in

place to support portfolio companies through more difficult periods

and to identify possible further actions.

Although we did not make any new Private Equity investments in the

year, we have continued to grow portfolio value; for example,

through our buy-and-build strategy and increased equity stake in

Action. For further information, please refer to the Business review

section (pages 21 to 33). We have a clear and consistent strategy and

a disciplined approach to investment whilst looking to put more

capital behind those portfolio companies we already know well. We

expect competition for the best assets in our sectors to remain

intense and prices high. Accordingly, our focus remains on identifying

attractive and sensibly priced new investments, and value accretive

bolt-on acquisitions for our portfolio companies.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Principal risks and mitigations – aligning risk to our strategic objectives continued

3i Group plc | Annual report and accounts 2024 88

The disclosures on the following pages are not an exhaustive list of risks and uncertainties faced

by the Group, but rather a summary of the principal risks which are regularly reviewed by the

GRC and the Board, and have the potential to affect materially the achievement of the Group’s

strategic objectives and impact its financial performance, reputation and brand integrity.

Movements in risk status and link to strategic objectives

		Risk exposure has increased		Grow investment portfolio earnings		Realise investments with good cash‑to‑cash returns		Maintain an operating cash profit
		No significant change in risk exposure		Use our strong balance sheet		Increase shareholder distributions
		Risk exposure has decreased

External
Principal risk Global economic uncertainty
		Movement in risk status in FY 2024 Link to strategic objectives		Potential impact • Impacts general market confidence and risk appetite • Higher risk of market volatility, price shocks or a significant market correction • Potential for extended period of higher inflation and interest rates • Limits earnings growth or reduces NAV owing to contraction of earnings in our investments and/or changes in multiples and discount rates used for their valuation • Increases liquidity or covenant risks across the portfolio or limits ability to refinance our investments • Leads to reduced M&A volumes in 3i’s core markets, economic instability and lower growth, which impacts investment portfolio exit plans and realisation levels		Risk management and mitigation • Regular portfolio company reviews and Investment Committee focus on investment strategy, exit processes and refinancing strategies • Monthly portfolio monitoring to identify and address portfolio issues promptly • Monitoring of valuations and application of the valuations policy by the Valuations Committee • Regular liquidity and currency monitoring and strategic reviews of the Group’s balance sheet • Regular review of resourcing and key man exposures as part of business line reviews and the portfolio company review process • Overall shape and resilience of the portfolio		FY2024 outcome • Strong performance of Action and overall resilient performance from the remainder of the portfolio • Overall increase in portfolio valuation particularly in value-for-money and private label consumer, healthcare and infrastructure sectors • Group GIR of 23% • Low Group gearing of 4% and liquidity of £ 1,296 million. Undrawn RCF of £900  million

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Principal risks and mitigations – aligning risk to our strategic objectives continued

3i Group plc | Annual report and accounts 2024 89

External continued
Principal risk Impact of higher interest rates on debt markets and pricing of specific assets
		Movement in risk status in FY 2024 Link to strategic objectives		Potential impact • Higher risk of market volatility, price shocks or a significant market correction • Limits earnings growth or reduces NAV owing to contraction of earnings in our investments and/or changes in multiples and discount rates used for their valuation • Increases liquidity or covenant risks across the portfolio or limits ability to refinance our investments • Impacts market confidence and risk appetite more generally		Risk management and mitigation • Regular portfolio company reviews as well as Investment Committee focus on investment strategy, exit processes and refinancing strategies • Monthly portfolio monitoring, including financing arrangements, to identify and address issues promptly • Monitoring of valuations and application of the valuations policy by the Valuations Committee • Regular liquidity, currency and counterparty risk monitoring and strategic reviews of the Group’s balance sheet		FY2024 outcome • Strong performance of Action and resilient performance overall from the remainder of the portfolio • Overall increase in portfolio valuation particularly in value-for-money and private label consumer, healthcare and infrastructure sectors • Group GIR of 23% • Low Group gearing of 4% and liquidity of £ 1,296 million. Undrawn RCF of £900 million • Average leverage across the Private Equity portfolio was 2.7x (31 March 2023: 2.5 x) • Over 70% of our Private Equity term debt is hedged at a weighted average tenor of more than three years. The average all-in debt cost on the total hedged term debt is less than 6.5%

Principal risk Volatility in capital markets, foreign exchange and commodities
		Movement in risk status in FY 2024 Link to strategic objectives		Potential impact • May impact portfolio company valuations and realisation processes • Increases risks with exit plans and bank financing • Potential for large equity market fall to impact asset valuations • Unhedged foreign exchange rate movements impact total return and NAV		Risk management and mitigation • Portfolio company reviews focus on investment strategy, exit plans and refinancing strategies • Long-term approach to setting valuation multiples • Active management of exit strategies by Investment Committee to enable us to adapt to market conditions • Regular liquidity and currency monitoring, and strategic reviews of the Group’s balance sheet • Foreign exchange hedging programmes and management of investment and realisation currency flows		FY2024 outcome • Continuation of euro and US dollar medium-term foreign exchange hedging programme • Foreign exchange exposures at the portfolio company level monitored and hedged where appropriate • Strong portfolio performance, demonstrating resilience, leading to an increase in portfolio value in the year • At 31 March 2024, 75% of the investment portfolio was denominated in euros or US dollars. Sterling strengthened by 3% against the euro and  2%  against the US dollar and as a result, we generated a total foreign exchange translation loss of £316 million (2023: £ 623 million gain) net of derivatives in the year

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Principal risks and mitigations – aligning risk to our strategic objectives continued

3i Group plc | Annual report and accounts 2024 90

External continued
Principal risk Transaction execution challenges in current market
		Movement in risk status in FY 2024 Link to strategic objectives		Potential impact • Reduced investment rates in Private Equity and Infrastructure as a result of higher pricing or market uncertainties • Risk of wider outcomes on core investment case assumptions, impacting returns • Market uncertainty may result in some attractive investment opportunities • Reduced level of realisations and refinancing		Risk management and mitigation • Strong central oversight and disciplined approach to investment pipeline and pricing • Active management of investments and exit strategies by Investment Committee • 3i’s local teams and networks facilitate the origination of off-market transactions		FY2024 outcome • Increased investment in Action and Royal Sanders and completed seven bolt-on acquisitions, with one requiring 3i proprietary capital investment • Realised proceeds of £888 million including £762 million proceeds received from Action’s capital restructuring • In April 2024, we agreed the sale of nexeye, generating expected exit proceeds of c.€452 million

Principal risk Geopolitical risks
		Movement in risk status in FY 2024 Link to strategic objectives		Potential impact • Indirect operational impact, eg third- party suppliers or supply chain disruption • Impact of higher energy and commodity prices, price shocks and supply chain issues • Increased transportation times and costs • Increased number and complexity of sanctions • Direct or indirect reputational risks, eg exposures to Russia • Impact on NAV through contraction of Private Equity portfolio earnings or changes in valuation multiples • Reduced realisation potential, impacting shareholder returns		Risk management and mitigation • Detailed scenario and contingency planning at the portfolio company level • Steps taken by portfolio companies to manage through an extended period of disruption • Regular assessment of portfolio company operations and performance • Sanctions policy and monitoring • Long-term approach to valuation multiples		FY2024 outcome • Contingency plans in place to address key risks and subject to review as part of the portfolio company review process • Continued monitoring of headwinds faced from international conflict • Supply side constraints and price inflation continue to be closely managed and monitored across the portfolio

Investment
Principal risk Lower investment or realisation rates
		Movement in risk status in FY 2024 Link to strategic objectives		Potential impact • May impact longer-term returns and capital management and therefore ability to deliver strategic plan • May impact progress with specific strategic initiatives • May reduce staff morale and confidence • Cost base may not be sustainable • May impact Group’s reputation as an investor of proprietary capital and as a manager of 3iN and other funds • Increases the importance of the role of bolt-on acquisition opportunities		Risk management and mitigation • Regular monitoring of investment and divestment pipeline • Early involvement of Investment Committee as new investment ideas are identified • Disciplined approach to sourcing investment opportunities and pricing • Regular review of asset allocation • Focus on bolt-on acquisition opportunities, which can be more attractively priced and offer synergy benefits		FY2024 outcome • Increased investment in Action and Royal Sanders and completed seven bolt-on acquisitions in Private Equity, with one requiring 3i proprietary capital investment • Investment Committee maintained a cautious stance, declining a number of investment proposals where price and risk and reward failed to meet Group requirements • In early May 2024, we agreed to invest c.€116 million in a new investment for our Private Equity portfolio, Constellation

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Principal risks and mitigations – aligning risk to our strategic objectives continued

3i Group plc | Annual report and accounts 2024 91

Investment continued
Principal risk Underperformance of portfolio companies (ex-Action)
		Movement in risk status in FY 2024 Link to strategic objectives		Potential impact • Reduction in NAV and realisation potential impacting shareholder returns • Impacts reputation as an investor of proprietary capital and as a manager of 3iN and other funds • May set back specific strategic initiatives • May impact long-term returns		Risk management and mitigation • Rigorous initial assessment of new investment opportunities to maintain quality of our investment pipeline • Monthly portfolio monitoring of all investments to review operating performance, identify weaknesses and opportunities early and act as appropriate • Active management of portfolio company Chair, CEO and CFO appointments • Sharing of any incidents of portfolio fraud and cyber breaches across investment teams to ensure monitoring is up to date		FY2024 outcome • Liquidity support provided to three portfolio companies in the year • Close monitoring and adaptation of portfolio company exit plans • 93% of our portfolio companies valued on an earnings basis grew their earnings over the last 12 months to 31 December 2023

Principal risk Underperformance of Action
		This risk was previously considered as part of the risk of “Underperformance of portfolio companies” but has been separated out as a standalone principal risk on materiality grounds Link to strategic objectives		Potential impact • Reduction in NAV and realisation potential impacting shareholder returns • Impact on 3i’s reputation as an investor of proprietary capital • Materiality of the investment increases the potential impact and profile of underperformance • May set back specific strategic initiatives		Risk management and mitigation • Regular monthly monitoring to review operating performance, identify weaknesses and opportunities early and take action as appropriate • Additional asset monitoring and reporting, including 3i Chief Executive in the role of chair of the Action board • Sharing of any operational incidents such as fraud and cyber breaches to ensure appropriate remedial actions and monitoring		FY2024 outcome • Close monitoring of Action, including frequent performance updates to the 3i Board • Action is currently valued on a run-rate EBITDA, with growth of 28% during the year • Action added 303 new stores during 2023

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Principal risks and mitigations – aligning risk to our strategic objectives continued

3i Group plc | Annual report and accounts 2024 92

Investment continued
Principal risk Portfolio ESG and sustainability risk profile/performance
		Movement in risk status in FY 2024 Link to strategic objectives		Potential impact • Poor or insufficient management of ESG risks or adverse developments impact 3i’s reputation as an investor • Potential impact on NAV, realisation potential and shareholder returns and on new Infrastructure fundraising initiatives • May affect 3i’s ability to meet external reporting obligations or published targets		Risk management and mitigation • Investment Committee, GRC and ESG Committee involvement with Board oversight • Responsible Investment policy • Structured approach to identify and manage ESG and sustainability risks and “themes” and to collect relevant data as part of the semi-annual portfolio company review process • Early engagement with 3i Communications team in the event of any incidents • Limited exposure to remote/more challenging geographies and higher risk sectors • Close monitoring of trends and developments in external reporting • Dedicated 3i ESG resources and provision of training where required		FY2024 outcome • Further refinements in the monitoring of ESG risks • Implementation of a new ESG data collection tool for portfolio companies • Approval of science-based targets for 3i in March 2024 • Collected Scope 1 and 2 data from over 97% of our Private Equity portfolio companies and over 95% of our economic infrastructure investments1
								1 Excludes some legacy minority and other minority investments where we have limited influence.

Operational
Principal risk Ability to recruit, develop and retain key people
		Movement in risk status in FY 2024 Link to strategic objectives		Potential impact • Impairs ability to deliver key performance objectives • Potential to delay execution of strategic plan with possible impact on shareholder returns		Risk management and mitigation • Specific focus by Remuneration Committee which approves all material incentive arrangements to ensure they reflect market practice • Annual Board review of succession planning • Regular review of resourcing and key man exposures as part of business line reviews and the portfolio company review process • HR policies and procedures for recruitment and vetting, and ongoing performance management		FY2024 outcome • Organisational capability and succession plan reviewed by the Board in September 2023 • Successful talent recruitment and continuous training and development programmes throughout the year. 23  new hires in FY 2024 • Limited staff voluntary turnover of 6.0% • Good progress with recruitment and integration of new hires

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Principal risks and mitigations – aligning risk to our strategic objectives continued

3i Group plc | Annual report and accounts 2024 93

Section 172 statement

The Directors believe that during the year they

have, individually and together, acted in way

that they consider, in good faith, was most likely

to promote the success of the Company for the

benefit of its members as a whole, and in doing

so had regard to the factors set out below

(“section 172 factors”)

Our business model is set out on pages 14 and 15 and the Board’s

strategic objectives and key performance indicators are set out

on pages 18 and 19.

When making decisions, the Board takes into consideration the

Company’s purpose and strategic objectives, as well as the potential

long-term impact of those decisions on its various stakeholder

groups, including those listed in section 172 of the Companies Act

2006 (“section 172”). A summary of the principal section 172 factors is

set out below.

Section 172 factors

		The likely consequences of any decision in the long term		Our purpose and strategy, including our long-term responsible investment approach, aims to drive sustainable growth in our investment portfolio.
		The interests of the Company’s employees		Our employees are critical to the success of the Company. Our approach as a responsible employer is described more fully in the Sustainability section.
		The need to foster the Company’s business relationships with suppliers, customers and others		We engage with all our third-party service providers, suppliers and customers in an open and transparent way to foster strong business relationships to ensure both the success of the Company and its legal and regulatory compliance.
		The impact of the Company’s operations on the community and the environment		We embed responsible business practices throughout our organisation by promoting the right values and culture. In addition we partner with charities which relieve poverty, promote education and support elderly and disabled people.
		The desirability of maintaining a reputation for high standards of business conduct		Our success relies on maintaining a strong reputation and seeking to ensure our values and culture are aligned to our purpose, our strategy and our ways of working.
		The need to act fairly towards all members of the Company		The Board engages actively with its shareholders and takes into account their interests when implementing our strategy.

Read more in the

Strategic report

Read more in the

Governance report

Read more in the

Sustainability report

Read more in the

Sustainability report

Read more in the Overview and strategy

section and the Sustainability report

Read more in this section

and in the Governance report

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Directors’ duties under Section 172

3i Group plc | Annual report and accounts 2024 94

How stakeholder

interests have influenced

decision making

The Board takes into account stakeholder interests

and other section 172 factors in its key business

decisions. Directors are reminded of their section

172 duties at Board meetings.

Throughout the year and when implementing the Company’s

strategic priorities, the Board has considered the varied interests of

the Company’s stakeholders and the impact of key decisions on

them. The Board recognises that not all decisions will yield positive

outcomes for every stakeholder group. Therefore, the Board and the

Executive Committee evaluate these conflicts during decision

making.

Key decisions made by the Board this year, along with how

stakeholder interests and other section 172 factors were considered,

are detailed below. Additional information on Board decision making

can be found on pages 107 to 109.

Key decisions in the year

FY2023 second dividend and FY2024 first dividend

Background: In May 2023 the Board decided on an increased

total dividend for FY2023 and in November 2023 a first dividend

for FY2024 (in line with the Company’s dividend policy announced

in May 2018) of one half of the total dividend for the previous year.

Stakeholder considerations: Amidst a difficult macro-economic

environment, the Board carefully considered several factors. These

included shareholders’ desire for income distributions, the necessity

to maintain sufficient liquidity to cover investment activity and

operational and other costs, whilst maintaining a robust, low-geared

balance sheet. Despite adverse macro-economic conditions, the

Company’s investment portfolio had performed well overall with

excellent performance from Action and resilient performance across

the rest of the portfolio, notwithstanding pockets of weakness in

companies with significant exposure to discretionary consumer

spending, the construction sector and recruitment. Additionally, the

Board factored in various external influences, such as inflation, higher

interest rates, elevated energy prices, supply chain disruptions, and

Russia’s continued invasion of Ukraine. These considerations, along

with the Company’s strong financial performance and positive

outlook, informed the decisions regarding the proposed FY2024

second dividend for the current year.

Impact on the success of 3i: Being thoughtful about setting the

dividend is particularly important as it potentially impacts a number

of the Company’s stakeholders. In particular, shareholders can rely on

the Company’s consistent approach to its dividend policy which is an

important aspect of the investment case for 3i’s shareholders.

€500 million bond issuance

Background: For over 11 years, the Company has operated a

conservative balance sheet strategy with no structural gearing. Over

the period, this has significantly de-risked the Group. Alongside the

significant growth in the value of the Company’s investment portfolio,

management has tightly controlled costs resulting in a consistent

operating cash profit. These factors have enabled 3i to adjust to the

pace of investment and divestment flows with limited external

pressure.

The issuance was deemed appropriate because, following the

repayment of the £200 million 2023 bond and the significant growth

in the Group’s NAV, the Company had significant capacity to raise

additional debt whilst maintaining our conservative balance sheet

strategy and prudent approach to managing liquidity.

Stakeholder considerations: In issuing the bond, the Board took into

consideration shareholders’ expectations for the Company to

maintain a conservative balance sheet strategy. Issuing the bond was

within its policy range of £500 million net cash to £1 billion net debt

and was within its tolerance for up to 15% gearing. The Board

considered a range of factors relating to the key terms of the bond

and how these would benefit shareholders. Issuing in euros provided

a natural hedge to the euro portfolio and diversified the funding base

to a larger European investor base. The timing of execution,

proposed tenor and size of the issuance were also considered, with

shareholder interests being an important factor. The consistency of

approach to our balance sheet strategy also sent a positive message

to rating agencies, bond investors and our lenders.

Impact on the success of 3i: Despite volatile financial markets 3i was

able to successfully issue the €500 million bond at a coupon of

4.875%. The bond forms part of the wider approach to maintaining a

conservative balance sheet and prudent liquidity management, which

is fundamental to the Company’s proprietary capital model.

As at 31 March 2024, the Group had gross debt of £1,202m and

gearing of 4%.

For the purposes of the UK Companies Act 2006, the Strategic report

of 3i Group plc comprises pages 1 to 95.

By order of the Board

Simon Borrows

Chief Executive

8 May 2024

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Directors’ duties under Section 172 continued

3i Group plc | Annual report and accounts 2024 95

What’s in this section
Chair’s governance review	97
Governance at a glance	98
Corporate governance statement	99
Governance framework	101
Board of Directors	102
Executive Committee	104
The role of the Board	106
How the Board operates	107
What the Board did in FY2024	108
Engaging with stakeholders	110
Board performance review	114
Nominations Committee report	116
Audit and Compliance Committee report	122
Resilience statement	128
Valuations Committee report	131
Directors’ remuneration report	136
Additional statutory and corporate governance information	150

Overview and strategy Business review Sustainability Performance and risk Governance Audited financial statements Portfolio and other information

3i Group plc | Annual report and accounts 2024

Chair’ s governance review

David Hutchison

Chair

Our corporate governance

framework remains an anchor

for 3i’s execution of its

strategic objectives.

I am pleased to present our Corporate Governance Report. The

purpose of this report is to summarise our corporate governance

framework and to explain how we, as a Board, have taken decisions.

Robust and effective corporate governance is fundamental to 3i’s

operations and to the generation of consistent, long-term value for

our shareholders.

As set out in my letter on pages 2 and 3, 3i has responded well to

challenging macro-economic circumstances. As a Board, we are

confident in 3i’s ability to execute its strategic objectives and

discussed more fully in the CEO’s report on pages 6 to 11.

Board activities and consideration of stakeholders

The Board is conscious of its duty to consider the interests of a broad

spectrum of stakeholders and other section 172 factors, particularly in

the current challenging macro-economic and geopolitical climate. An

overview of the range of matters that the Board discussed and

debated at its meetings during the year can be found on pages 108

and 109. How we engaged with our stakeholders is summarised on

pages 110 to 113. The Company’s section 172 statement is available

on page 94.

We work with 3i’s management to ensure that the Company

possesses the necessary financial and human resources to execute its

long-term strategy and promote its long-term success.

Culture and values

Consistent with previous years, the Board recognises the importance

and differentiation that culture and strong values bring to the delivery

of performance. As a Board and as Directors individually we aim to

lead by example, promoting a culture of integrity, rigour and energy,

accountability and ambition in line with 3i’s values as detailed on

page 17, in addition to providing constructive challenge to

management.

Board composition

As announced last year, Caroline Banszky retired from the Board at

the end of the 2023 AGM. There have been no further changes to the

Board composition this year and we continue to maintain an effective

succession plan, more details of which are contained in my

Nominations Committee report on pages 116 to 121.

Dividend

We have continued with our dividend policy to maintain or grow the

dividend year-on-year, subject to the strength of our balance sheet

and the outlook for investment and realisations. As a result the Board

has recommended a second FY2024 dividend of 34.50 pence per

share, taking the total dividend for the year to 61.0 pence per year.

Subject to shareholder approval this will be paid in July 2024.

David Hutchison

Chair

8 May 2024

Overview and strategy Business review Sustainability Performance and risk Governance Audited financial statements Portfolio and other information

3i Group plc | Annual report and accounts 2024 97

Strong corporate governance is essential to create

value for our stakeholders and underpins the long-term

success of our company.

Highlights as at 31 March 2024	23% Total return on equity	Supporting management in a challenging macro-economic climate to enable them to pursue 3i’s long-term value creation strategy in the portfolio.
			Read more in the Chief Executive‘s statement and the Financial review
	2,085p NAV per share	An increase of 19% in the NAV in FY2024.
			Read more in Key performance indicators
	61.0p Dividend per share	Payment of the first dividend of 26.50 pence per share in January 2024 and recommendation of the second dividend in July 2024 of 34.50 pence per share.
			Read more in Financial review

Board focus areas as at 31 March 2024	Strategy			Financial			Portfolio companies
			Read more in Key performance indicators			Read more in Financial review			Read more in Business review
	Purpose, culture and values			Risk management and internal control			Governance
		Read more in Sustainability report			Read more in Risk Management			Read more in Governance report
A balanced Board as at 31 March 2024	44% Female representation			11% Ethnically diverse			66% Independent directors

Board priorities for FY2025 Growth To support the management in delivering the strategic plan Shareholders To achieve long-term growth for shareholders Sustainability Continue to oversee delivery of the sustainability strategy

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Governance at a glance

3i Group plc | Annual report and accounts 2024 98

The Financial Reporting Council’s UK Corporate Governance Code 2018 (the “Code”)

is the standard against which we measured ourselves in FY2024.

The Board is pleased to confirm that we complied with all of the

provisions set out in the Code for the period under review, save for

provision 19 of the Code in respect of tenure of the Chair.

Details on how we have applied the principles set out in the Code

and how governance operates at 3i have been summarised

throughout this Governance section and elsewhere in this Annual

report as set out below.

Our Governance framework is set out on page 101. (The Code is

available to view on the Financial Reporting Council’s website).

Corporate Governance code

Board leadership and Company purpose

Page(s)

Audit, risk and internal control

Page(s)

Effective Board

102–109

External Auditor and Internal Auditor

126–127

Purpose, values and culture

1, 16–17, 40–57, 80, 109, 127

Fair, balanced and understandable review

125, 155

Governance framework

101

Internal financial controls and risk management

80–93, 122–130

Stakeholder engagement

110–113

Workforce policies and practices

52–55, 153–154

Division of responsibilities

Page(s)

Remuneration

Page(s)

Role of Chair

107

Linking remuneration to purpose and strategy

136–137

Independence

150

Remuneration policy review

137

External commitments and conflicts of interest

102-103, 153

Independent judgement and discretion

136–149

Board resources

97, 107

Composition, succession and evaluation

Page(s)

Appointment to the Board

100, 116, 151

Board skills, experience and knowledge

102-103, 119

Annual Board evaluation

114–115

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Corporate governance statement

3i Group plc | Annual report and accounts 2024 99

Explanation on Provision 19

– Chair tenure

The Board and the Nominations Committee

have carefully considered the extended tenure

of the Chair.

As detailed in our FY2023 Annual report, when appointing David

Hutchison as Chair, the Nominations Committee and the Board were

fully aware of the Code’s provision regarding a Chair’s tenure

exceeding nine years, and the fact that David had then already

served as a non-executive Director for eight years. Despite this, the

Nominations Committee and the Board, when considering the

Company’s long-cycle investment business, recognised that David’s

extensive knowledge of the Company’s business and portfolio assets

– gained in part from his seven-year tenure as Chair of the Valuations

Committee – and his understanding of the Board’s conservative

balance sheet and selective investment strategies, made him the

most suitable candidate to promote the success of the Company.

The Nominations Committee and the Board recognise the potential

risks associated with extended tenure of a chair, including the

possibility of compromised objectivity, inadequate management

accountability, and insufficient promotion of constructive challenge

among Board members. To mitigate these risks further, a number of

additional steps were taken as detailed below.

Steps taken to mitigate risks associated with extended tenure

• The Committee and the Board sought to balance this appointment by appointing an experienced senior director as Senior Independent Director. This role, filled by Lesley Knox in October 2021, includes ensuring corporate governance arrangements remain robust and appropriate and leading the annual review of whether David’s continued tenure as Chair is in the best interests of the Company. • It was agreed that the Nominations Committee would undertake an annual review, led by the Senior Independent Director, of the continued appropriateness of David’s appointment. This would be in addition to the mitigation provided by the Board and Chair annual performance reviews.     The first such annual review was held by the Nominations Committee in March 2023 and a second review was conducted in March 2024 (both in the absence of David). Both reviews concluded that David continued to perform effectively as Chair, maintained objective judgement and independence, and promoted constructive challenge among     Board members. The Committee also noted that in a business where long-term knowledge of the business and its assets is crucial, David’s continued appointment was appropriate. The Committee’s overall conclusion was that David’s continued appointment as Chair for the coming year was in the best interests of the Company and that the balance and independence of the Board remained appropriate. • Since 31 March 2023, David has not been a member of the Remuneration Committee. • The appointment in November 2021 of Peter McKellar, an independent non-executive Director with extensive experience of asset management and asset valuation, as Chair of the Valuations Committee, provided continuity and effective governance of that Committee. The Nominations Committee will undertake its next review in March 2025.

Recommendation

The Board has carefully considered the Chair’s tenure and believes that it is in the best interests of 3i and its stakeholders that

David remains as Chair. The Board is therefore recommending to shareholders the re-election of David at the forthcoming

AGM on 27 June 2024.

For more information

Page 117

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Corporate governance statement continued

3i Group plc | Annual report and accounts 2024 100

Governance framework

Board

• Approves risk appetite and strategy

• Responsible for ensuring effective risk management and oversight processes exist

• Oversees ESG and sustainability strategy, approach and policies

• Assisted by four Board Committees with responsibility for specific areas

• Delegates management to the Chief Executive

• Assesses investment performance against objectives

Company

Secretary

	Nominations Committee			Audit and Compliance Committee			Valuations Committee			Remuneration Committee
• Responsible for ensuring that the Board has the necessary skills, experience and knowledge • Responsible for appointing a diverse Board • Responsible for Board and senior executive succession			• Reviews and oversees financial and non- financial reporting (including sustainability matters), risks and internal controls, and the relationship with the External auditor • Reviews and challenges management reports • Receives updates from the Chief Executive on outputs from GRC • Oversees tax policy and strategy			• Specific and primary responsibility for the valuation policy and valuations (including underlying assumptions) of the Group’s investment portfolio • Direct engagement with the External auditor, including its specialist valuations team			• Ensuring a remuneration culture weighted towards performance based variable reward, whilst discouraging inappropriate risk taking and taking non- financial indicators, including ESG indicators, into account • Approves carried interest and asset performance linked schemes • Ensuring Executive Directors’ remuneration is closely aligned with shareholder returns • Oversees the implementation of fair remuneration for employees

Chief Executive

• Delegated responsibility for management of the Group

• Delegated responsibility for investment decisions

• Delegated responsibility for risk management

• Delegated responsibility and day-to-day accountability for sustainability matters

Executive Committee			Investment Committee			Group Risk Committee			ESG Committee
• Assists the Chief Executive in setting the Group strategy, including sustainability aspects • Monitors divisional performance • Facilitates information sharing between divisions • Responsible for recruitment and retention • Meets monthly			• Manages the Group’s investment portfolio and monitors its most material risks • Meets when required • Strict oversight of each step of the investment lifecycle • Approves all investment, divestment and material portfolio decisions • Monitors investments against original investment case • Ensures investments are in line with the Group’s investment policy and risk appetite • Implements the Responsible Investment policy • Chaired by the Chief Executive			• Assists the Chief Executive with the oversight of risk management • Implements the Group’s risk appetite policy and monitors performance • Maintains the Group risk review which details its principal risk exposures; a watch list of new and emerging risks; and appropriate mitigations and controls • Two members of the GRC form the Risk Management function as required by FCA rules • Maintains oversight of ESG risks, and relevant ESG regulations • Oversight and review of the Responsible Investment policy • Chaired by the Chief Executive			• Advises the Chief Executive, directly and through the Investment and Group Risk Committees, on ESG risks and opportunities • Develops the Group’s ESG approach, and related policies and procedures • Ensures the Group’s compliance with relevant ESG-related legal and regulatory requirements, standards and guidelines • Coordinates ESG-related activities and initiatives • Reviews and monitors the Group’s ESG performance • Monitors stakeholder expectations, market developments, trends and best practice in relation to relevant ESG matters • Chaired by the General Counsel
Conflicts Committee
• Deals with potential conflicts as required
Treasury Transactions Committee
• Considers specific treasury transactions as required
Market Abuse Regulation Committee
• Considers potential disclosure matters as required

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Corporate governance statement continued

3i Group plc | Annual report and accounts 2024 101

Board

of Directors

at 31 March 2024

The Board promotes a culture

of strong governance across

the business.

David Hutchison

Chair

Chair since November 2021 and non-executive

Director since 2013. David has considerable

investment and banking experience across a

range of asset classes which supports

his leadership of the Board.

Previous experience

Chief Executive of Social Finance Limited from

2009 to March 2022. Until 2009 Head of UK

Investment Banking at Dresdner Kleinwort Limited

and a member of its Global Banking Operating

Committee. From 2012 to 2017, a non-executive

director of the Start-Up Loans Company.

James Hatchley

Group Finance Director

Group Finance Director since June 2022 and an

Executive Director since May 2022. A member of

the Executive Committee, Investment Committee,

Group Risk Committee and ESG Committee.

Joined 3i in 2017 and was Group Strategy Director

until June 2022.

Previous experience

Formerly Chief Operating Officer of KKR in

Europe and, before that, Co-CEO of Avoca

Capital. Earlier in his career, James was a

corporate finance professional for 20 years,

principally with Greenhill & Co. and Schroders. He

qualified as a chartered accountant in 1992.

Formerly a non-executive director of Great

Ormond Street Hospital for Children NHS

Foundation Trust.

Simon Borrows

Chief Executive

Chief Executive since 2012, and an Executive

Director since he joined 3i in 2011. Chair

of the Group’s Risk Committee, Executive

Committee and Investment Committee. Chair of

the Supervisory Board of Peer Holding I B.V., the

Dutch holding company for the Group’s

investment in Action.

Previous experience

Formerly Chair of Greenhill & Co International

LLP, having previously been Co-Chief Executive

Officer of Greenhill & Co, Inc. Before founding

the European operations of Greenhill & Co in

1998 he was the Managing Director of Baring

Brothers International Limited. Formerly a non-

executive director of the British Land Company

PLC and Inchcape plc.

Jasi Halai

Chief Operating Officer

Chief Operating Officer and an Executive Director

since May 2022. A Member of the Executive

Committee, Investment Committee, Group Risk

Committee and ESG Committee. Joined 3i in

2005 and has held a variety of posts in the

business, most recently as Group Financial

Controller and Operating Officer. Also a non-

executive director of Barratt Developments PLC.

Previous experience

Prior to joining 3i, worked for CDC Group (now

British International Investment) and at Actis

following its demerger from CDC. Jasi is a

chartered management accountant. Formerly

a non-executive director of Porvair PLC.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Board leadership and Company purpose

3i Group plc | Annual report and accounts 2024 102

Stephen Daintith

Independent non-executive Director

Non-executive Director since 2016. Chief Financial

Officer and an executive director of Ocado Group

plc. Stephen contributes directly relevant financial

and operating experience as Chair of the Audit

and Compliance Committee, drawn from a range

of consumer, digital, engineering and other

international businesses, to the Board’s decision

making.

Previous experience

Formerly an executive director of Rolls-Royce

Holdings plc from 2017 to March 2021 and

Finance Director of Daily Mail and General Trust

plc (“DMGT”) from 2011 to 2017. Non-executive

director of ZPG Plc. Prior to joining DMGT he was

Chief Operating Officer and Chief Financial

Officer of Dow Jones and prior to that Chief

Financial Officer of News International. He

originally qualified as a chartered accountant with

Price Waterhouse (now part of PwC).

Peter McKellar

Independent non-executive Director

Non-executive Director since June 2021. Also

Chair of Princess Private Equity Holdings Limited,

non-executive director of Investcorp Capital plc

and a non-executive board member of Scottish

Enterprise, from which he will retire in July 2024 .

Peter brings to the Board significant experience

and understanding of financial services and asset

management, with a particular expertise in private

equity and infrastructure. This enables him to

bring a valuable asset management perspective

to the Board’s discussions and to those of the

Valuations Committee, which he now chairs.

Previous experience

Formerly Deputy Chair of AssetCo plc, Global Head

of Private Markets at Standard Life Aberdeen plc

and previously led Standard Life Investments’

private equity and infrastructure business and was

their Chief Investment Officer. Prior to that, he

held a variety of finance posts in industry and

corporate finance positions.

Lesley Knox

Independent non-executive Director

Non-executive Director since October 2021 and

Senior Independent Director since November

2021. Also Senior Independent Director of Legal

& General Group plc, non-executive director of

Dovecot Studios Limited, Senior Independent

Director and Chair of Remuneration Committee

of Genus Plc, and a trustee of Grosvenor Group

Limited pension fund and National Galleries of

Scotland Foundation. Lesley brings to the Board’s

discussions a wealth of international, strategic and

financial services experience having spent over 17

years in senior roles in financial services, including

in asset management and corporate finance.

Previous experience

Formerly held a number of senior roles in financial

services, including head of institutional asset

management at Kleinwort Benson. Also previously

served as Chair of Alliance Trust PLC, as Senior

Independent Director at Hays plc and non-

executive director of SAB Miller plc, Centrica plc

and Thomas Cook Group plc.

Alexandra Schaapveld

Independent non-executive Director

Non-executive Director since January 2020. Also

non-executive director and Chair of the Audit

Committee at Société Générale S.A. Alexandra

brings extensive financial services expertise in a

number of important markets for 3i as well as

considerable board experience in a variety of

sectors. These help provide an international

perspective to the Board’s decision-making

process.

Previous experience

Formerly on the boards of Bumi Armada Berhad,

Vallourec S.A., FMO N.V., Stage Entertainment

N.V., Holland Casino N.V., VU University and VU

Medical Center and Duin & Kruidberg. Prior to

that, many years of corporate and investment

banking at RBS and ABN AMRO.

Coline McConville

Independent non-executive Director

Non-executive Director since 2018. Also a member

of the Supervisory Board of Tui AG and a non-

executive director and Chair of the ESG

Committee at King’s Cross Central General

Partnership. Coline has a diverse commercial

background, having worked in a range of sectors

and also brings to the Board significant listed

board experience including chairing several

remuneration committees and previously acting as

Senior Independent Director at Fevertree. This

enables her to make valuable contributions to the

Board’s discussions and to those of the

Remuneration Committee, which she now chairs.

Previous experience

Formerly a non-executive director of Fevertree

Drinks plc, Travis Perkins plc, Tui Travel plc, UTV

Media plc, Wembley National Stadium Limited,

Shed Media plc, HBOS plc and Inchcape plc. Prior

to that was Chief Operating Officer and Chief

Executive Officer Europe of Clear Channel

International Limited and had previously worked

for McKinsey and LEK.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Board leadership and Company purpose continued Board of Directors continued

3i Group plc | Annual report and accounts 2024 103

Executive

Committee

at 31 March 2024

Simon Borrows

Chief Executive

James Hatchley

Group Finance Director

Jasi Halai

Chief Operating Officer

Page 102

See profiles

Simon Borrows

Chief Executive

Jasi Halai

Chief Operating Officer

James Hatchley

Group Finance Director

Kevin Dunn

General Counsel and Company Secretary

Joined 3i in 2007 as General Counsel and

Company Secretary. Responsible for 3i’s

legal, compliance, internal audit and

company secretarial functions. A member of

the Executive Committee, Group Risk

Committee and ESG Committee.

Previous experience

Prior to joining 3i, was a Senior Managing

Director, running GE’s European Leveraged

Finance business after serving as European

General Counsel for GE. Prior to GE, was a

partner at the law firms Travers Smith and

Latham & Watkins.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Board leadership and Company purpose continued

3i Group plc | Annual report and accounts 2024 104

Rob Collins

Managing Partner,

Head of North American Infrastructure

Joined 3i in 2017 as the Managing Partner

for North American Infrastructure. A member

of the Executive Committee. Also a non-executive

director of Smarte Carte, Regional Rail and

EC Waste.

Previous experience

Prior to joining 3i, led Hastings’ infrastructure

investment team in North America and Europe.

Founded the infrastructure M&A practice

at Morgan Stanley and Greenhill where he was

a Managing Director at both firms. Started his

infrastructure career at Goldman Sachs after

serving as a nuclear-power officer in the US Navy.

Scott Moseley

Managing Partner,

Co-Head of European Infrastructure

Joined 3i in 2007 and was made a Partner in 2012.

Managing Partner, Co-Head of European

Infrastructure since July 2022 and a member of

the Executive Committee, Investment Committee

and Group Risk Committee. Also a non-executive

director of Tampnet, ESVAGT and GCX.

Previous experience

Prior to joining 3i more than 16 years ago, Scott

held various roles within the capital markets teams

at WestLB and Credit Agricole.

Pieter de Jong

Co-Head of Private Equity

Joined 3i in 2004 and served as Managing

Director of 3i Benelux between 2011 and 2019. A

member of the Executive Committee, Investment

Committee and Group Risk Committee. Also a

non-executive director of Yanga, Mepal,

European Bakery Group, Royal Sanders and

Weener Plastics.

Previous experience

Started his career at Stork in the US, before

joining Van Den Boom Group, a corporate

finance consulting firm in Benelux, where he

became partner/owner responsible for M&A.

After selling the firm to NIBC in 2000, he headed

the M&A department until 2003.

Bernardo Sottomayor

Managing Partner,

Co-Head of European Infrastructure

Joined 3i in 2015 as a Partner with responsibility

for origination and execution of new investments

across Europe. Managing Partner, Co-Head of

European Infrastructure since July 2022 and a

member of the Executive Committee, Investment

Committee and Group Risk Committee. Also a

non-executive director of TCR and ESP.

Previous experience

Prior to joining 3i, was a Partner at Antin

Infrastructure and his other previous infrastructure

management experience includes roles as

Managing Director at Deutsche Bank’s European

infrastructure fund, Head of M&A at Energias de

Portugal and further infrastructure M&A advisory

experience with UBS and Citigroup in London.

Julien Marie

Chief Human Resources Officer

Joined 3i in 2001 as HR Manager and was

appointed HR Director in 2004. A member

of the Executive Committee and Group Risk

Committee.

Previous experience

Prior to joining 3i, worked at Bouygues

Construction and Bouygues Telecom for six years.

Peter Wirtz

Co-Head of Private Equity

Joined 3i in 1998 and served as 3i Germany

Co-Head between 2009 and 2019. A member

of the Executive Committee, Investment

Committee and Group Risk Committee. Also

a non-executive director of Luqom and YDEON.

Previous experience

Prior to joining 3i, worked for Deutsche Bank

and spent four years with Procter & Gamble

in various finance functions.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Board leadership and Company purpose continued Executive Committee continued

3i Group plc | Annual report and accounts 2024 105

The role of the Board

The Board’s role is to lead the Company

in promoting its long-term success and thereby

generating value for shareholders. The Board

operates within a robust corporate governance

framework and ensures that this framework is

embedded across the organisation.

The Board oversees the Company’s purpose, values and strategy and

satisfies itself that these are aligned with the Company’s culture. All

Directors are expected to demonstrate integrity, set a positive tone

and adhere to the Company’s culture and values.

The Board, through its Audit and Compliance Committee, assesses

and monitors behaviours and adherence to the Company’s values.

Regular reports from the Internal Audit and Group Compliance

teams consider and comment on culture within the business. The

Remuneration Committee reviews workforce remuneration and the

alignment of incentives and rewards with culture. The Board ensures

that employee policies and practices are consistent with the

Company’s culture and values and supports its long-term success

during its annual review of succession planning and strategic

capability.

The Board approves the Group’s strategic objectives and ensures the

necessary resources are in place for the Company to meet these

objectives through a Board approved planning and budgeting

process. The Board measures performance against those objectives

using the KPIs set out on pages 18 and 19 which are reported to the

Board in the monthly Board report.

The Board meets formally on a regular basis for scheduled Board

meetings and on an ad hoc basis when the need arises. There is a

clearly defined schedule of matters reserved for the Board. The

Board is assisted by various Principal Board Committees which report

to it regularly. Details of their activities in the year are provided on

pages 116 to 149.

Attendance at Board and Committee meetings1

	Independence	Board	Audit and Compliance Committee	Nominations Committee	Remuneration Committee	Valuations Committee
Total meetings held1		7	6	2	6	4
Number attended:
D A M Hutchison	Independent on appointment	7(7)	–	1(2)	–	4(4)
S A Borrows	Executive Director	7(7)	–	–	–	4(4)
J G Hatchley	Executive Director	7(7)	–	–	–	4(4)
J H Halai	Executive Director	7(7)	–	–	–	–
S W Daintith2	Independent	7(7)	6(6)	2(2)	–	1(4)
L M S Knox	Independent	7(7)	–	2(2)	5(6)	2(4)
C McConville	Independent	7(7)	6(6)	2(2)	6(6)	–
P A McKellar	Independent	7(7)	–	2(2)	6(6)	4(4)
A Schaapveld3	Independent	7(7)	6(6)	2(2)	3(3)	4(4)
C Banszky4	Independent	2(2)	1(1)	–	3(3)	–

1 This table shows the number of scheduled full meetings of the Board and its Committees attended by each Director who is a member thereof in the year, together with (in brackets) the number of meetings they were eligible

to attend. In addition to these meetings a number of additional meetings of the Board and its Committees were held, often at short notice, to deal with ad hoc business as it arose. Non-attendance at meetings was due to

unavoidable prior commitments or illness. As explained in this report Mr Hutchison did not attend the Nominations Committee meeting which included discussion of the Chair’s tenure and performance.

2 Mr Daintith stepped down from the Valuations Committee when he was appointed Chair of the Audit and Compliance Committee after the 2023 AGM.

3 Ms Schaapveld joined the Remuneration Committee after the 2023 AGM.

4 Ms Banszky retired from the Board on 29 June 2023.

Non-executive Directors also attended a number of other Company meetings, portfolio company reviews and Infrastructure partner reviews to

increase their understanding of the 3i business, the portfolio companies and the strength and depth of our people.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Board leadership and Company purpose continued

3i Group plc | Annual report and accounts 2024 106

How the Board operates

The Board holds one to two meetings a year at or near one of our

non-UK offices or one of our portfolio companies, providing a chance

for non-executive Directors to meet our local teams and the

management of selected portfolio companies. In January of this year

the Board and Committee meetings were held in Amsterdam where

Directors met the Action senior management team at Action’s

headquarters and visited an Action store. They also met and received

presentations from the CEO of Mepal and the Private Equity team for

Royal Sanders. In March the Board and Committee meetings were

held at 3i’s New York office where Directors met 3i’s US-based teams

and received presentations from the CEOs of Cirtec, SaniSure and

WilsonHCG.

The Board holds an annual Strategy Day.

The Board receives regular reports on potential conflicts of interests

involving Directors and any actual conflicts of interest identified are

managed appropriately. This may involve excluding the Director

concerned from relevant information and discussions.

There is a clear division of responsibilities between the Chair and

Chief Executive. Day-to-day management of the Group is the

responsibility of the Chief Executive. To assist him in this role, the

Chief Executive has established a number of additional management

committees, including the Investment Committee, Group Risk

Committee and ESG Committee, which are outlined in our

governance framework on page 101.

The Board ensures that it has the policies, processes, information,

time and resources it needs in order to function effectively and

efficiently.

		Responsibilities of the Chair • Leads the Board and is responsible for its overall effectiveness in directing the Company. • Leads the Board in its oversight of the Company’s purpose, values and culture. • Leads the Board in setting its agenda, approving strategy, monitoring financial and operational performance, and establishing the Group’s risk appetite. • Organises the business of the Board, ensuring the Company’s effectiveness, and the maintenance of an effective system of internal controls. • Ensures that Directors receive accurate, timely and clear information. This includes ensuring that the non-executive Directors receive regular reports on shareholders’ views on the Group. • Responsible for the composition of the Board, facilitates constructive Board relations and the effective contribution of all non-executive Directors. • Leads the annual Board and Board Committee evaluation process.				Responsibilities of the Chief Executive • Direct charge of the Group on a day-to-day basis and is accountable to the Board for the financial and operational performance of the Group. • Chairs the Investment Committee to review the acquisition, management and disposal of investments. • Leads the Executive management team to develop and implement the Group’s strategy and manage the risk and internal control framework. • Reports to the Board on financial and operational performance, risk management and progress in delivering the strategic objectives. • Regularly engages with shareholders and other key stakeholders on the Group’s activities and progress. • Oversees the implementation of the ESG strategy. • Oversees the Group’s values and culture.
		Role of the Senior Independent Director • The Senior Independent Director provides a sounding board for the Chair and serves as an intermediary for the other Directors and the shareholders. • Leads succession planning for the Chair. • Leads the Chair’s performance review and the annual review of the continued appropriateness of the Chair’s appointment.				Role of non-executive Directors • Provide constructive challenge, strategic guidance and hold management to account. • Scrutinise the performance of management in meeting agreed objectives. • Seek assurance on the integrity of the financial information and that financial and non-financial controls and systems of risk management are robust and defensible. • Determine appropriate levels of remuneration for Executive Directors and Executive Committee and together with the Chair, have a prime role in appointing Directors and in succession planning for the Board. • Ensure that they have sufficient time to meet their Board responsibilities.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Division of responsibilities

3i Group plc | Annual report and accounts 2024 107

What the Board did

in FY2024

In FY2024, the Board met for seven

scheduled meetings and a strategy day

in December 2023 (see page 106).

The Chair sets the Board’s agenda. Board members and, as

appropriate, executives from the relevant business areas are invited

to present on key items allowing the Board the opportunity to debate

and challenge initiatives directly with the senior management team.

As described on page 94, when making decisions the Board has

regard to the interests of stakeholders, as well as the section 172

factors.

Examples of some important decisions taken by the Board in the year

and how, where relevant, the Board had regard to the interests of

relevant stakeholders are set out on page 95. Our key stakeholders

are set out below and discussed in more detail on pages 110 to113.

In addition to the Board decisions referred to above, the Board also

dealt with its regular annual cycle of business, examples of which are

set out on the next page.

Our key stakeholders

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Division of responsibilities continued

3i Group plc | Annual report and accounts 2024 108

	FY2024 Focus areas	Matters approved	Other matters considered/outcomes	Stakeholders
	Purpose, culture and values	• Slavery and human trafficking statement • Operation and effectiveness of the Remuneration Policy both for Executive Directors and the wider employee group	• Executive and senior management succession planning • Organisational capability • Employee leadership and development initiatives • Diversity, equity and inclusion initiatives • Equal Opportunities and Diversity policy • Board evaluation • Ongoing meeting of Board diversity targets
	Portfolio companies	• Non-executive Director approvals for certain investments and divestments • Portfolio company valuations	• Presentations from the CEOs of Action, Mepal, Cirtec, SaniSure and WilsonHCG, and the deal team of Royal Sanders • Visit to Action HQ and Action store • Detailed reporting on Action and rotating updates on portfolio companies at Board and Valuations Committee • ESG reviews of portfolio companies • Attendance at portfolio company reviews and Infrastructure partner reviews
	Strategy	• Group’s approach to environmental sustainability and climate change • Senior leadership succession and contingency planning	• Strategy day – 3i Group strategic financial planning and analysis – Private Equity strategic plan – Infrastructure strategic plan – ESG updates – designation of Royal Sanders as a longer-term hold asset – further investment in Action through the buy back of carried interest – visit to Action HQ and an Action store • Private Equity and Infrastructure business and portfolio updates
	Financial	• Payment of the first dividend in January 2024 and recommendation of the second dividend to be paid in July 2024 • Operating budget • Annual report, half-year report and quarterly updates • Approval of investment valuations • €500 million bond	• Financial reporting from the Group Finance Director including key financial highlights and performance against budget • Valuations reporting from Group Finance Director and Chief Operating Officer • Market overviews • Funding and Treasury review • Assessment of investment performance against objectives
	Risk management and internal control	• Board risk appetite • Risk review	• Compliance and internal controls updates • Detailed reporting from the Group Risk Committee including updates on the business continuity plan, cyber security and IT • Going concern, Viability statement, Resilience statement and stress testing
	Governance	• Approval of the Chair’s continued tenure • Approval of a shareholder reunification programme and utilisation of funds realised as a result of this programme for charitable purposes	• Updates on the Code • Oversight of ESG strategy and compliance with ESG regulation

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Division of responsibilities continued What the Board did in FY2024 continued

3i Group plc | Annual report and accounts 2024 109

Engaging with stakeholders

July

• Q1 performance update

• Chair’s meetings with

shareholders

March

• Action capital

markets seminar

• Morgan Stanley Financials

Conference

November

• Half-yearly results

announcement and

presentation webcast

May

• Annual results announcement

and presentation webcast

Engaging and communicating with our stakeholders is an integral part of 3i’s business

		June • BNP Paribas Exane European CEO Conference • Kepler Investment Companies conference • Annual General Meeting					February • Q3 performance update
			September • Private Equity capital markets seminar • Bank of America Financial Services conference
	2023								2024

and critical to ensuring our continued success. We engage with our stakeholders in a variety

of ways, as detailed in this section.

Engaging with shareholders

In FY2024, shareholders engaged principally on the performance of

Action and of the rest of the portfolio, capital allocation strategy and

market conditions for new investments and realisations.

The CEO, Group Finance Director and the Group Investor Relations

and Sustainability Strategy Director meet with institutional

shareholders and potential investors after the announcement of the

annual results and throughout the year. The Chair meets with

institutional shareholders at their request.

The Investor Relations and Company Secretariat teams are available

to retail shareholders to respond to their queries.

In addition to this ongoing investor engagement, the Company has

an extensive engagement programme detailed below which enables

investors to make informed decisions about their investment in the

Company:

Our FY2024 Investor Relations programme

We engage shareholders through a full programme of events. Our results presentations and capital markets seminars are webcast live

and available to all who are interested. On-demand webcasts and transcripts are also available on the Company’s website after the events.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Division of responsibilities continued

3i Group plc | Annual report and accounts 2024 110

		Institutional investors • UK and international one-on-one meetings with 3i’s principal shareholders twice a year and throughout the year as required. • Large group investor calls are held after the publication of the annual and half-year results, and quarterly performance updates, to target both existing and potential investors. • Meetings held with the Chair at the request of institutional shareholders. The SID and the Audit and Compliance Committee Chair are also available as required. • Meetings with potential shareholders on a regular basis as part of arranged UK and international roadshows and as required. • Participation in conferences for institutional investors organised by a number of international banks and brokers. • Engagement with analysts from investment banks by the Group Investor Relations and Sustainability Strategy Director.				Annual and half-year results presentations • The annual and half-year results are presented via live webcasts accessible to all investors on the 3i website. Listeners are encouraged to submit questions during the webcasts.
						Individual investors • Can attend live webcasts of the results presentations and capital markets seminars. • Can engage directly with non-executive Directors, Executive Directors, the Company Secretary and the Group Investor Relations Director at the AGM. • Can engage with and contact the Group Investor Relations and Sustainability Strategy Director and the Company Secretary, whose contact details are on the website, to raise issues and provide feedback.
						Annual General Meeting • The AGM is held as an in person meeting, preceded by business presentations from the Chair and Chief Executive. • Shareholders are encouraged to ask questions during the meeting, and have the opportunity to meet Directors before and after the formal proceedings.
			Capital market seminars • Two capital markets seminars in FY2024, held in September 2023 and March 2024, both held via a webcast accessible to all on the 3i website. • The September 2023 seminar included presentations from the deal teams on our Private Equity investments of nexeye and European Bakery Group, and an update on the role and work of 3i’s Private Equity banking team. • The March 2024 seminar focused on Action with results and strategy updates from the CEO and CFO of Action, along with presentations on Action’s sustainability programme.
								Website • The 3i website provides a wealth of useful and detailed information for all shareholders, who can also sign up for our email alert service to be notified of key announcements.

Outcome of engagement with shareholders

The outcome of this engagement is that we maintain a strong

relationship with shareholders. The Board recognises the importance

of fostering a proactive and meaningful relationship with current and

prospective shareholders.

The extensive Investor Relations programme enables investors to

understand 3i’s performance, assists them in making their investment

decisions and provides them with an opportunity to engage with

Directors and senior management. Executive Directors routinely

update the Board on investor relations activities and on any feedback

received from analysts and shareholders. Any major issues brought

up by shareholders concerning the Group are communicated to and

discussed with the Board.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Division of responsibilities continued Engaging with stakeholders continued

3i Group plc | Annual report and accounts 2024 111

Engaging with other stakeholders

Stakeholders		Engagement		Outcome
Fund investors		Why? Fund investors, like shareholders, want to understand and have confidence in 3i’s strategy, performance, culture, sustainability policies, compliance and governance. It is also important that the Board and management understand issues that are specific to them. How? There is an engagement programme with fund investors and co-investors led by the Fund Investor Relations team with regular and ad hoc meetings, supported by comprehensive reporting. The Chief Executive and relevant investment professionals participate in some of these meetings, as appropriate.		Fund investors have provided capital we have invested in certain assets as part of our investment management activities and which generates fee income for 3i. They are customers to whom we owe regulatory duties. Positive engagement with Fund investors enhances our relationship with them and provides them with the information they require to maintain their investment in the relevant fund.
					Page 36 Total assets under management
Employees		Why? 3i is a people business. Our people are critical to the success of the Company and we rely on having motivated people with the appropriate expertise and skills required to deliver our strategy. How? Our approach as a responsible employer is described in the Sustainability section. The Directors’ report on page 154 includes details on their engagement with our employees. We continue to support our employees and to maintain strong employee engagement.		Having meaningful engagement with employees helps create a strong, supportive work culture, which develops and retains talent, enabling 3i to continue to deliver strong performance.
					Pages 52 to 55 Sustainability report www.3i.com/sustainability/sustainability-reports-library
Portfolio companies			Why? 3i’s long-term, responsible approach to its investments means that it participates in the active management of its portfolio companies. Close engagement and a strong governance framework enables us to help them grow and create value. How? Our investment teams work closely with investee companies and their management teams. One or more investment team professionals are usually appointed as directors of each investee company. In addition, regular forums across the Private Equity and Infrastructure portfolios share best practice and experience. This year we held a Sustainability forum for ESG and sustainability representatives from across the PE and Infrastructure portfolios where colleagues could discuss best practice, shared experiences and develop peer networks. A CFO forum was held which included presentations on what data-driven organisations look like, the impact of artificial intelligence (“AI”) on the role of the CFO, the evolving role of the CFO in enabling sustainability success and the debt markets and how to effectively mitigate the higher interest rate environments. The CTO forum focused on cyber security and how to enable generative AI adoption in companies. More recently an online forum was held for portfolio HR directors.				We are able to share best practice and connect management teams across the portfolio. Growing and generating value in the portfolio companies enables 3i to generate attractive returns for our shareholders and fund investors, contributing towards the long-term success of 3i.
						Pages 14 to 15 Our business model Pages 42 to 51 Sustainability report Pages 21 to 38 Investment activity

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Division of responsibilities continued Engaging with stakeholders continued

3i Group plc | Annual report and accounts 2024 112

Stakeholders		Engagement		Outcome
Debt holders		Why? Access to debt markets provides important flexibility and resilience to the Company’s financial structure. How? Together with the Group Finance Director, the Group Treasurer engages with debt providers and hedging counterparties through regular reviews and updates including the Group’s results presentations. A dedicated section on 3i.com is maintained for debt investors.		The successful issue of the recent euro bond demonstrates the benefits of positive engagement with debt holders. This provided well priced additional liquidity, diversified our funding base and provided additional foreign exchange hedging whilst maintaining our conservative balance sheet strategy.
					Page 70 Financial review Page 94 Directors’ duties under Section 172 Pages 184 to 185 Notes to the accounts
Government and Regulators		Why? The Company works in a regulated environment and can only continue to operate if it complies with relevant laws and regulations. How? Our Group Compliance team and local professionals lead our relationships with national and international regulators, including the UK FCA, the US SEC and the Luxembourg CSSF. The Company actively participates in policy forums, engages on regulatory matters and is a member of a number of industry bodies, including the British Private Equity & Venture Capital Association and Invest Europe. We maintain active relationships with other governance-related bodies including the FRC, relevant UK government departments, ESG rating agencies, the FTSE Women Leaders Review, the Parker Review and proxy advisers through participation in consultations, surveys and events.		Maintaining open and constructive dialogue and strong relationships with relevant authorities and governance bodies helps support the achievement of our strategic goals within a compliant framework.
Third-party professional advisers and service providers		Why? The Company relies on its extensive network of professional advisers and service providers to help it originate, analyse and execute new investments, to assist with portfolio management and to support the business operations of the Company. How? The investment teams, Executive Directors and functional teams lead these relationships and maintain close and regular dialogue with our professional advisers and service providers who include due diligence providers, operational and IT support providers, law firms, the Registrars, the External auditor and the Company’s corporate brokers.		The support from our advisers and service providers contributes to 3i’s long-term success.
Communities		We embed responsible business practices throughout our organisation by promoting our values and culture. We use our influence with our portfolio companies to ensure that they assess their environmental and social impacts and dependencies and, where relevant, devise strategies to address them. We also partner with organisations and charities that support charities which relieve poverty, promote education and support elderly and disabled people.		For details of the Company’s contribution to and engagement with communities see the Sustainability section.
					Page 56 Act as a good corporate citizen

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Division of responsibilities continued Engaging with stakeholders continued

3i Group plc | Annual report and accounts 2024 113

Board performance review

In accordance with the Code, the Board conducted its annual performance review of its own

performance and that of its Committees and the Chair. The Board performance review process

operates on a three-year cycle. This year, the performance review was undertaken internally led by

the Chair and the Company Secretary.

	Board performance review process
	Each Director and the General Counsel and Company Secretary completed a Board performance review questionnaire and all Directors (except the Chair) and the General Counsel and Company Secretary completed a Chair performance review questionnaire.		Responses to the questionnaire were collated by the Company Secretary and shared with the Chair on a non- attributable basis.	Sections specifically relating to the Chair were shared with the Senior Independent Director.	The Chair held one-on- one discussions with each Director to discuss their performance and that of the Board.	Feedback was shared and discussed with the Board at its March 2024 meeting.

Topics covered in the performance review • Board composition and expertise; • stakeholder engagement; • Board dynamics; • Board support and meeting management; • performance of the Board’s Committees; • Board’s strategic and operational oversight; • risk management and internal control; • succession and talent oversight; and • priorities for change. Findings from the 2024 review and recommendations The overall finding of the review was that the Board had continued to perform strongly and had benefitted from the leadership provided by the Chair. The Board agreed to focus on a number of areas including: • continued oversight on the performance of Action and other longer-term hold assets, and ensuring the Board developed and maintained appropriate mechanisms to satisfy itself in this regard; • maintaining oversight over the rest of the Private Equity and Infrastructure portfolio; • non-executive Director succession planning; and • the form and process for the FY2025 performance review.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Composition, succession and evaluation

3i Group plc | Annual report and accounts 2024 114

Findings from the 2023 performance review	Actions and steps taken
The value of the January 2023 meeting with Action senior management and that this should be a more regular event.	In January 2024, the Board and Committee meetings were held in Amsterdam and included meetings with Action senior management, visits to the Action headquarters and an Action store. The Board also met with the Benelux investment teams.
The importance to the Board of visits and meetings with 3i’s other significant overseas investment teams, visiting one of them each year as time permitted.	In March 2024, Board and Committee meetings were held in 3i’s New York offices and included presentations from New York team members and US-based portfolio companies.
To continue focus on employee capability and development.	This was addressed in the annual organisational capability and succession planning review and on the Strategy day. This was supplemented by increased reporting to the Board from the Chair of the Remuneration Committee.
The Board’s size and composition was broadly appropriate. The Board agreed that following the appointment of Stephen Daintith as the Audit and Compliance Committee Chair it would, in due course, be appropriate to search for a potential successor to him.	Russell Reynolds, an independent search firm, has been engaged to assist in the search for a new non-executive Director. The Directors agreed that any such recruitment process would include focus on diversity in its widest form, alongside finding a candidate with the appropriate skills and qualifications.
A desire to hear from more external speakers on topics of relevance and interest.	Directors received a presentation from Bain on artificial intelligence and from a senior Bank of America economist on developments in the US economy and its outlook. Presentations were given by the CEOs of Cirtec, SaniSure and WilsonHCG. In addition, members of the Private Equity team presented to the Board on ESG, data analytics and other topics during the year.
To maintain oversight of the Group’s approach to sustainability.	Over the year the Directors received presentations on the science-based targets and their impact on the Group and the portfolio, on sustainability reporting requirements and on sustainability matters within portfolio companies.

Directors review of the performance of the Chair

In her role as Senior Independent Director, Lesley Knox led a review by the Directors of the performance of the Chair which was also

facilitated by a questionnaire and summary results report prepared by the Company Secretary. Ms Knox subsequently reported back

to the Board on the review and provided feedback to the Chair.

Read more on page 117

Nominations Committee report

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Composition, succession and evaluation continued Board performance review continued

3i Group plc | Annual report and accounts 2024 115

Nominations Committee report

David Hutchison

Committee Chair

	What the Committee reviewed in FY2024 • Board and senior management succession – Chair tenure – Contingency Executive Director succession plan – Board and senior management succession plans
	• Board and Chair evaluation
	• Size, balance and composition of the Board
		Committee membership	Meetings
	David Hutchison (Chair)		1(2)
	Stephen Daintith		2(2)
	Lesley Knox		2(2)
	Coline McConville		2(2)
	Peter McKellar		2(2)
	Alexandra Schaapveld		2(2)
	The column above headed “Meetings” shows the number of meetings of the Committee attended by each member during the year, together with, in parentheses, the number of meetings they were entitled to attend. As explained in this report Mr Hutchison did not attend the meeting which included discussion of the Chair’s tenure and performance.

I am pleased to present the

Nominations Committee report

for the year ended 31 March

2024. My report explains the role

of the Committee and its

work this year.

Dear Shareholder

Role and purpose of the Committee

The Committee’s principal role is to monitor the size, balance and

composition of the Board to ensure that it has the necessary skills and

experience to enable the Group to deliver its current and future

strategic objectives. In doing so it ensures that plans are in place for

orderly succession for both the Board and senior management

positions, including contingency plans for unanticipated events. It

also reviews the Company’s work on diversity, equity and inclusion.

The Committee’s discussions are complemented by discussions at

meetings of the full Board where appropriate.

Directors

Directors’ biographical details are set out on pages 102 and 103.

All Directors are subject to re-appointment every year. Accordingly,

at the AGM to be held on 27 June 2024, all the Directors will retire

from office and, being eligible, will seek re-appointment. The Board’s

recommendation for re-appointment of Directors is set out in the

2024 Notice of AGM.

Caroline Banszky retired from the Board at the end of the 2023 AGM

and there were no changes to the membership of the Board this year.

Throughout the year Lesley Knox continued to serve as Senior

Independent Director. As Senior Independent Director, Lesley

provides support to me, acts as an intermediary with the other

Directors, if necessary, and oversees my appraisal and review of

tenure by the other Directors. Lesley is also available to the

Company’s shareholders to address any concerns they have been

unable to resolve through me, Simon Borrows or James Hatchley

or where they consider these channels to be inappropriate.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Composition, succession and evaluation continued

3i Group plc | Annual report and accounts 2024 116

Appointments and appointment process

We maintain a structured and transparent procedure for identifying

the requisite skills and experience, evaluating suitable candidates,

and appointing new Directors. For non-executive Directors, the

assessment process includes an evaluation of their availability to fulfil

their roles. Recommendations for appointments require Board

approval. There have been no non-executive Director appointments

this year. However, the Committee has appointed Russell Reynolds,

an external search consultancy, to assist in the next appointment

process and the search is ongoing. The Committee conducted a

review of its appointment process and confirmed its continued

appropriateness.

Succession planning for the Board

The Committee considers long-term succession planning as part of

ensuring an appropriate level of refreshment and diversity on the

Board. Our approach to succession planning seeks to ensure that

retirements are planned for and occur in a coordinated manner. This

mitigates risks to the Company’s strategic objectives by avoiding

gaps in key skills or a lack of continuity. The Committee believes that

length of service will not necessarily compromise the independence

or contribution of Directors of 3i. The Nominations Committee

evaluates the appropriate balance between the retention of the

corporate memory of the Company (including detailed knowledge of

portfolio companies in which it has been invested for many years), with

maintaining a suitable rate of refreshment at any given point in time.

The Board and Nominations Committee have carefully considered

the question of Chair tenure as detailed on page 100. In my absence

the Nominations Committee, chaired by the Senior Independent

Director, reviewed my tenure as Chair in March 2024. Further details

are set out here in the Report from the Senior Independent Director

and in the Corporate Governance statement on page 100.

The Board also recognises that in providing leadership, governance,

challenge and support it must, when considering the Chair tenure,

take account of matters including: the importance of Director

independence; the need to periodically refresh the Board and its

leadership; knowledge and understanding of the Company’s

investment business and its strategic objectives; as well as diversity,

continuity and retention of corporate memory. We believe that

an appropriate balance of all these factors is essential both for

the effective functioning of the Board and the delivery of the Board’s

purpose. At times this may result in some longer-serving Directors,

including the Chair.

Report from the Senior Independent

Director on the Committee’s annual

review of Chair’s tenure

David Hutchison, who was appointed as Chair of the Board

in November 2021, has now served as a Director for more

than ten years. This does not comply with the provisions of

the UK Corporate Governance Code (“the Code”) and a full

explanation of the background to David’s appointment as

Chair and why the Nominations Committee and the Board

believe it appropriate for the Chair to continue in office is

therefore set out on page 100.

The Board and Nominations Committee are aware of the risks

to good corporate governance which could follow from

excessive Chair tenure. As one of the measures adopted to

mitigate this risk the Nominations Committee has decided

that it will review annually the continued appropriateness of

the Chair’s appointment. This review is led by the Senior

Independent Director and will take place in the absence of

the Chair.

The first such review, led by me, took place in March 2023

and a further review was conducted in March 2024.

The Nominations Committee discussed the reasoning

behind the provisions of the Code limiting Chair tenure,

reviewed the circumstances of David Hutchison’s

appointment as Chair and reviewed his performance in this

role over the past year. This review was conducted in parallel

with the annual Chair evaluation which acts as a further

mitigant to the risks associated with tenure beyond nine years.

At the 2023 AGM, over 91% of shareholders who voted at the

AGM voted in favour of David Hutchison’s continued

appointment. To date, no shareholders have expressed any

concerns to the Company relating to David’s continued

appointment. This year’s review concluded that David

continued to perform effectively as Chair, continued to

exercise objective judgement and continued to appropriately

promote constructive challenge amongst Board members.

The Committee noted the very favourable results from the

Chair evaluation review, in particular David’s thoughtful and

respectful approach and ability to build strong relationships

with fellow non-executive Directors, Executive Directors and

wider management whilst promoting constructive challenge.

The Nominations Committee also noted that in the context

of a company where long-term knowledge of the business

and its portfolio companies was of great importance, David’s

continued appointment was all the more appropriate. The

Committee concluded unanimously that David’s continued

appointment for the coming year was in the best interests of

the Company.

Lesley Knox

Senior Independent Director

8 May 2024

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Composition, succession and evaluation continued Nominations Committee report continued

3i Group plc | Annual report and accounts 2024 117

Diversity and inclusion

The Board strongly supports the principle of boardroom diversity and

actively promotes diversity, inclusion and equal opportunity in 3i. The

Board’s aim is to have Directors who have an appropriate mix of skills,

experience and knowledge and who are diverse in terms of gender,

social and ethnic backgrounds, as well as cognitive and personal

strengths. When we engage external consultancies to assist with

Director appointments, they are instructed to put forward a diverse

range of candidates for consideration from which the Board can

make appointments on merit and against objective criteria.

The Board currently comprises nine Directors of whom four are

women. This exceeds the 40% female gender diversity target set by

the FTSE Women Leaders review. The Board meets the Parker

Review recommendation of having at least one Director from a

minority ethnic group.

During the year the Committee reviewed the Company’s Equal

Opportunities and Diversity policy and decided that no changes to

the policy were required at this time. The Committee also reviewed

the Company’s diversity, equity and inclusion activities during the

year and considered how the Company’s Equal Opportunities and

Diversity policy had been implemented. Further details are set out in

the Sustainability report on pages 52 and 55.

The Committee reviews and monitors initiatives aimed at developing

a diverse pipeline of talent within the Company below Board level

through the succession planning process referred to above and the

appointments process. When hiring, we seek to recruit on merit from

a diverse pool of candidates.

Whilst we take a long-term approach to improving the diversity of our

workforce and are committed to creating an inclusive culture in which

both existing and newly-recruited staff can reach their potential,

regardless of their sex, gender, social or ethnic backgrounds, the

challenge nonetheless remains that there is a limited size talent pool,

particularly at senior levels, within an extremely competitive market.

The gender balance of our employees and our senior managers

is reported in more detail in the Sustainability section on page 53.

At 31 March 2024, our employees were 59.4% male and 40.6%

female. The under-representation of women in senior management

and investment roles at 3i is an issue we share with much of the

private equity and alternative asset investment sector. Nonetheless,

3i continues to focus on increasing the number of women in these

roles, whilst recognising that significant change will take time to

achieve. As at 31 March 2024, 29.2% of Executive Committee plus

their direct reports who were senior managers were female (for

further information and details on how this figure is calculated see

page 53 of the Sustainability report).

As at 31 March 2024, approximately 15% of 3i’s total UK employees

declared to have an ethnic minority (excluding white minority)

background. The proportion of our UK-based employees from an

ethnic minority (excluding white minority) background in mid to

higher salary brackets was approximately 16%.

The Company participates in a number of diversity, equity and

inclusion initiatives, details of which are contained in the Sustainability

section on pages 53 and 54.

Diversity of individuals on the Company’s Board and in executive management

In accordance with LR 9.8.6 R (9) of the FCA Listing Rules the Board confirms that, as at 31 March 2024 , the Company met the targets

set out in that rule in that at least 40% of the Board were women, that at least one of the specified senior positions on the Board

(the Chair, the Chief Executive, the Senior Independent Director or the Chief Financial Officer) was held by a woman and that at least

one Director was from a minority ethnic background. There have been no changes to the Board since 31 March 2024 which would

affect the Company’s ability to meet these targets.

In accordance with LR 9.8.6 R (10) of the FCA Listing Rules, the following tables set out data, as at 31 March 2024, on the ethnic

background and the gender identity or sex of the individuals on the Company’s Board and in its executive management.

			Number of Board members	Percentage of the Board	Number of senior positions on the Board (CEO, CFO, SID and Chair)	Number in executive management	Percentage of executive management
	Gender identity or sex
	Men		5	56%	3	9	90%
	Women		4	44%	1	1	10%
	Not specified/prefer not to say		–	–	–	–	–
	Ethnic background
	White British or other white (including minority-white groups)		8	89%	4	6	60%
	Mixed/Multiple ethnic groups		–	–	–	–	–
	Asian/Asian British		1	11%	–	1	10%
	Black/African/Caribbean/Black British		–	–	–	–	–
	Other ethnic group including Arab		–	–	–	–	–
	Not specified/prefer not to say		–	–	–	3	30%
	The tables above include data for three individuals who are included in both the Board and executive management. The Company’s approach to collecting the data used for the purposes of the above disclosures was to use data on gender or sex from our employee records and to ask the individuals which ethnic background was applicable to them together with permission to use it for this purpose, save where individuals were located in non-UK jurisdictions where we believe it would be inappropriate or unlawful to make such a request.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Composition, succession and evaluation continued Nominations Committee report continued

3i Group plc | Annual report and accounts 2024 118

Composition of the Board

at 8 May 2024

Tenure

l 22 % >9 years	l 22 % 6-9 years
l 11 % 3-6 years	l 45 % 1-3 years
l 0 % 0-1 years

Ethnicity

l 11% Ethnically diverse l 89% Not ethnically diverse

Gender diversity

l 44 % Women l 66 % Men

Directors’ skills, experience and knowledge

The Directors have a range of core skills, experience and knowledge

which enable them to effectively support and appropriately challenge

management on the delivery of 3i’s strategy. These skills include the

following:

• Audit and finance

• Financial services and global markets

• Investment trusts and asset management

• Consumer/Commercial

• Remuneration

• Sustainability

• Digital

• UK plc governance

• Prior CEO/CFO/CIO

Training and advice

The Company has a training policy which provides a framework within

which training for Directors is planned with the objective of ensuring

Directors understand the duties and responsibilities of being

a director of a listed company and are updated on developments

that particularly impact 3i. All Directors are required to keep

their skills up to date and maintain their familiarity with the Company

and its business.

On appointment, all non-executive Directors participate in an

extensive induction programme. They have discussions with the Chair

and the Chief Executive. This is followed by briefings on: strategy;

finance; Private Equity and Infrastructure including portfolio assets;

external funds and co-investment and legacy funds; HR,

remuneration and carry schemes; and legal, regulatory and

compliance matters including the responsibilities of Directors. The

Company provides opportunities for non-executive Directors to

obtain a thorough understanding of the Company’s business by

meeting members of the senior management team who in turn

arrange, as required, visits to investment or support teams.

In the year, Directors received presentations on data and generative

AI and the US economy, in addition to presentations given by the

CEOs and Private Equity investment teams of a number of portfolio

companies. They also received, during the course of Board and

Committee meetings, updates on developments in relation to

regulatory matters, ESG, risk, financial and other reporting

requirements and the UK and global tax environment. Directors have

the opportunity to suggest additional subjects for presentations

where they believe it would be helpful. All non-executive Directors

have the opportunity to access the Company’s compliance e-training

modules which are used to train the Company’s employees on

regulatory compliance matters.

The Company has procedures for Directors to take independent

legal or other professional advice in relation to the performance

of their duties. In addition, Directors have access to the advice

and services of the Company Secretary, who advises the Board,

through the Chair, on governance matters.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Composition, succession and evaluation continued Nominations Committee report continued

3i Group plc | Annual report and accounts 2024 119

Activities in the year

What was discussed		What the Committee did		Outcome
Board and senior management succession		Size, balance and composition of the Board, and non-executive Director appointments Whilst there were no new non-executive Director appointments during the year, the Committee has continued to keep the size, balance and composition of the Board under review. Immediately following the 2024 AGM, the Board will continue to comprise nine Directors, being the Chair, three executive Directors and five independent non-executive Directors.		The Committee remains of the view that a nine or 10 member Board is an appropriate size of Board for the Company and that the Board has the right balance of skills and experience. The Committee decided that whilst there was no immediate need for non-executive Director recruitment, in the interests of long-term succession planning it commenced a search process for a further non-executive Director to join the Board during FY2025. This process is ongoing.
		Contingency Executive Director succession plan The Committee reviewed its short-term contingency succession plans for scenarios where any of the executive Directors were unexpectedly unable to carry out their duties.		The Committee noted the existing contingency arrangements for circumstances where any of the executive Directors suddenly became unable to carry out their duties. No changes to these arrangements were recommended.
		Senior management succession plans In relation to succession planning below Board level, and as part of the Board’s work to support the development of a diverse pipeline of talent, the Committee and the Board considered and discussed the 2024 Group Succession Planning and Strategic Capability Review, which was presented to the Directors by relevant Executive Committee members and the Chief Human Resources Officer. This annual review identifies development and succession plans for key staff, including all members of the Executive Committee and their direct reports, with details of short-term contingency arrangements in case of a sudden vacancy, planned successors and identification of those who, with further experience, could be potential longer- term successors.		The Board and the Committee were able to satisfy themselves as to the appropriateness of the succession planning process in place for senior positions within the Group.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Composition, succession and evaluation continued Nominations Committee report continued

3i Group plc | Annual report and accounts 2024 120

What was discussed		What the Committee did		Outcome
Board performance review		Details on how the annual Board performance review process was conducted and areas covered are on pages 114 and 115. The evaluation process for the year was conducted internally led by the Chair supported by the Company Secretary. The Committee reviewed the evaluation process which had been followed in the year with a view to identifying whether any changes or improvements should be made for future years.		Details on the outcome of the evaluation are set out on pages 114 and 115. The evaluation process informed the development of the Board’s rolling agenda for the subsequent year and confirmed the Board’s key strategic priorities and objectives. The Committee and the Board agreed that further consideration should be given over the coming year to evaluation arrangements going forward including benchmarking for external facilitators to conduct the Board’s next externally facilitated evaluation process.
Review of Chair tenure		The Committee keeps the continued tenure of the Chair under regular review. This process is led by the Senior Independent Director and is particularly important given that the Chair has served as a Director for in excess of nine years.		Details of the review are set out on page 117 in the report from the Senior Independent Director. The Committee concluded that the Chair’s continued appointment for the coming year was in the best interests of the Company.

David Hutchison

Chair, Nominations Committee

8 May 2024

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Composition, succession and evaluation continued Nominations Committee report continued

3i Group plc | Annual report and accounts 2024 121

Audit and Compliance Committee report

Stephen Daintith

Committee Chair

What the Committee reviewed in FY2024

• Financial and non-financial reporting

• External audit

• Internal control, compliance and risk management

• Risk review

		Committee membership	Meetings
	Stephen Daintith (Chair)		6(6)
	Coline McConville		6(6)
	Alexandra Schaapveld		6(6)
	Caroline Banszky1		1(1)
	1 Ms Banszky retired from the Board on 29 June 2023.
	The column above headed “Meetings” shows the number of meetings of the Committee attended by each member during the year, together with, in parentheses, the number of meetings they were entitled to attend. Other regular attendees at the Committee meetings include the following: the Chair; Chief Executive; Group Finance Director; Chief Operating Officer; Company Secretary; Director of Group Reporting and Valuations; Head of Internal Audit; Head of Group Compliance; and the External auditor, KPMG LLP.

.

I am pleased to present the Audit

and Compliance Committee report

for the year ended 31 March 2024.

This is my first report and I would

like to thank the previous

Committee Chair, Caroline Banszky,

for her stewardship of this role over

the last nine years. My report

explains the Committee’s work this

year.

Dear Shareholder

We held six regular scheduled meetings this year, four of

which were coordinated with 3i’s external reporting timetable.

On 24 May 2023, the Financial Reporting Council (“FRC”) launched a

consultation regarding the Corporate Governance Code and our

response endorsed the views of the General Counsel 100 (“GC100”)

to the proposed changes to the Code. Subsequent to this

consultation, the FRC published a revised version of the UK

Corporate Governance Code 2024 ("revised Code") on 22 January

2024. The revised Code will apply to financial years beginning on or

after 1 January 2025, other than Provision 29, which will come into

effect for financial years beginning on or after 1 January 2026. We

welcome the revised Code and specifically the focus on the

effectiveness of material internal controls.

In addition to the Committee’s usual focus on internal controls and

the integrity of the Group’s financial reporting, this year the

Committee has overseen the implementation of a new financial

reporting key internal controls system, an important enhancement to

our existing control environment. The Committee will continue its

focus on internal material controls across the Group.

The revised Code states that the Audit and Assurance policy and

Resilience statement, which we published in 2021 and 2022

respectively in response to the Brydon Review, are no longer

required. On that basis we have removed the Audit and Assurance

policy from our Annual report and accounts this year, but will retain it

as a standalone document for internal purposes. The intention is that

the policy will be considered by the Committee as part of its review

of the effectiveness of 3i’s risk management and internal control

system; in particular, in its assessment of the scope and adequacy of

audit and assurance activities. We have, however, retained the

Resilience statement as we believe the Resilience statement provides

the user with important insight into how our business model remains

a going concern and viable over the short, medium and long-term

periods.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Audit, risk and control

3i Group plc | Annual report and accounts 2024 122

In advance of each Committee meeting, I met with the Group

Finance Director, the Chief Operating Officer and the Heads

of Compliance and Internal Audit to discuss their reports as well as

any relevant issues. I also met privately with KPMG as part of my

ongoing review of their effectiveness and, periodically, with other

members of the 3i senior management team. I continue to have

regular discussions and planning meetings with management and

KPMG on delivering and effective audit.

The rest of the report sets out in detail the Committee’s activities

in the year. It is structured as follows:

• Governance

• Report on the year

• Areas of accounting judgement and control focus

• Risk management and internal control effectiveness

• Internal audit

• External audit

I look forward to engaging with you on the work of the Committee.

Stephen Daintith

Chair, Audit and Compliance Committee

8 May 2024

Audit and Compliance committee’s terms of reference

www.3i.com/investor-relations/governance/principal-board-committees

What the Committee reviewed in FY2024

Financial and non-financial reporting

• Annual and half-year reports and quarterly performance

updates

• Key accounting judgements and estimates

• Update on the relevant thematic reviews from the FRC

• Reviewed the Annual report to ensure that it is fair,

balanced and understandable, including APMs

• Going concern, Viability and Resilience statement

• Bond issuance and RCF extension

• ESG disclosure enhancements including TCFD reporting

and science-based targets

External audit

• Confirmation of the External auditor independence

• Policy and approval for non-audit fees

• FY2024 audit plan, including significant audit risks (being the

valuation of the unquoted investment portfolio and the

calculation of carried interest)

• Audit results report, including the results

from testing Key Audit Matters

• External auditor performance and effectiveness

Internal control, compliance

and risk management

• Review of 3i’s system of risk management and internal

control, including overseeing implementation of a new

financial reporting key internal controls system, replacing the

existing system

• Internal audit reports assessing internal control, processes,

fraud and matters relevant to financial reporting

• Review of the Viability statement and the supporting stress

test scenarios

• Update on cyber security and penetration tests

• Business resilience including IT and disaster recovery

• Annual staff verification exercise

• Audit and Assurance policy

Risk review

• Valuation reports and recommending the investment

portfolio valuation to the Board

• Review of investment themes from portfolio company

review process and portfolio performance including ESG

issues and risks

• Regular reviews of compliance with regulatory rules and

compliance monitoring findings

• Annual tax update and reports on tax policy and strategy

• Reports from the Group Risk Committee (“GRC”) and the

risk log

• Update on litigation matters

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Audit, risk and control continued Audit and Compliance Committee report continued

3i Group plc | Annual report and accounts 2024 123

Governance

All members of the Committee are independent non-executive

Directors. The Board believes members have the necessary range

of financial, risk, control and commercial experience required to

provide effective challenge to management. In particular, the Board

is satisfied that Stephen Daintith has recent and relevant financial

experience as outlined in the Code and the Committee as a whole

has competence relevant to the sector in which it operates.

The attendance of members at meetings is shown in the table

on page 122.

The Committee meets privately for part of its meetings and also has

regular private meetings with the External auditor, the Group Finance

Director, the Chief Operating Officer, the Head of Internal Audit

and the Head of Compliance in the absence of other members

of the management team.

Report on the year

The review work of the Committee in the past year is summarised in

the table on page 123. This work included the assessment and

evaluation of the areas of significant accounting judgement, and

monitoring the effectiveness of 3i’s risk management framework as

described in more detail later in this section. In addition, the

Committee focused on a number of topics, which are set out below.

Taxation

The Committee received an annual update from the Group Tax

Director on the Group’s taxation status which covered liaison with

fiscal authorities in the UK and other jurisdictions, relevant external

developments, and material tax projects.

Cyber security and IT

The Committee also received an annual update on cyber security and

key IT projects. There were no serious cyber incidents reported in the

year and the Committee noted the steps taken to improve 3i’s

detective and protective controls, and maintain staff training and

awareness on cyber security risks. The update on IT projects covered

a new AI policy and related oversight process; the continued

migration of “on-premise” data and services to cloud-based

solutions; the device refresh strategy; resilience and continuity

planning; and the roadmap for key systems projects, including the

replacement of the Treasury Management, HR and ERP systems.

Going concern and viability

The Directors are required to make a statement in the Annual report

and accounts as to 3i’s viability. The Committee provides advice to

the Board on the form and content of the statement, including the

underlying assumptions. In advance of the year-end the Committee

reviewed the Group’s proposed stress test scenarios to support the

going concern basis and Viability statement. At the year end, the

Committee evaluated a report from management setting out its view

of 3i’s viability and content of the proposed Viability statement.

This report was based on the Group’s strategic plan and covered

forecasts for investments and realisations, liquidity and gearing,

including forecast outcomes of the stress tests and forecast capital

and liquidity performance against an assessment of the Group’s risk

profile. It incorporated the 31 March 2024 valuations

and consideration of a range of economic outcomes. The Committee

discussed whether the choice of the three-year period remained

appropriate and concluded that it remained the most appropriate

period and provided more certainty on the Group’s performance due

to the nature of the Group’s business and its risk appetite to invest

in Private Equity and Infrastructure investments for a period of four

to six years, whilst acknowledging the reduced reliability of

assumptions in the later period of the plan. See our Resilience

statement on page 128 for further details.

The Directors believe the Group has sufficient financial resources

and liquidity, is well placed to manage business risks in the current

economic environment, and can continue operations for a period

of at least 12 months from the date of issue of these financial

statements. The Directors have also considered key dependencies

set out within the Risk management section including investment

and operational requirements.

Taking into account the assessment of the Group’s stress testing

results and its risk appetite statement on page 80, the Committee

agreed to recommend the Viability statement and three-year viability

period which was subsequently approved by the Board.

Audit and Assurance policy

3i first published an Audit and Assurance policy in FY2021, in

response to the recommendations of the Brydon Review published in

December 2019. We welcomed this initiative and anticipated that it

would eventually become a requirement under the UK government’s

planned audit and corporate governance reforms. The final version of

UK Corporate Governance Code 2024 published in January 2024,

however, does not include the requirement for such a policy nor its

publication.

Accordingly, the Committee has decided not to publish a policy

going forward, but to maintain one for internal purposes. The

intention is that the policy will be considered by the Committee as

part of its review of the effectiveness of 3i’s risk management and

internal control system; in particular, in its assessment of the scope

and adequacy of audit and assurance activities.

Areas of accounting judgement and control focus

The Committee pays particular attention to matters it considers

to be important by virtue of their complexity, level of judgement

and potential impact on the financial statements and wider business

model. Significant areas of focus considered by the Committee are

detailed on the next page, alongside the actions taken by the

Committee (with appropriate challenge from the External auditor)

to address them.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Audit, risk and control continued Audit and Compliance Committee report continued

3i Group plc | Annual report and accounts 2024 124

Areas of accounting judgement and control focus

	Valuation of the proprietary capital investment portfolio		Area of significant attention The most material area of judgement and estimation in the financial statements, and noted as a significant risk and Key Audit Matter by the External auditor, relates to the valuation of the unquoted investment portfolio, which, at 31 March 2024, was £20,690 million, or 92% of gross assets, under the Investment basis. In recognition of the importance of this area, the Board has a Valuations Committee to review the valuations policy, process and application to individual investments. The Valuations Committee provides quarterly oral reports to the Audit and Compliance Committee and the Board, supported by the relevant minutes of the Valuations Committee.		What the Committee reviewed and concluded On behalf of the Board, the Committee received and evaluated quarterly reports from the Chair of the Valuations Committee and the External auditor, with particular focus on the assumptions supporting the valuation of unquoted asset investments, any valuation uncertainties and the proposed disclosures in the financial statements. Members of the Committee also attend the Valuations Committee meetings. The detail on the key valuation considerations and the review and challenge undertaken in the year is included in the Valuations Committee report on pages 131 to 135. The Committee also reviewed and concluded that no fair value adjustment should be made to the investment entity subsidiaries’ NAVs and judgement for control is appropriate for those investees and funds consolidated within the Group.
	Carried interest payable		Area of significant attention The valuation of the investment portfolio is a primary input into the carried interest payable and receivable balances, which are determined by reference to the valuation at 31 March 2024. During the year the Group crystallised £778 million of carried interest liability, with the majority of payments being made to participants in the Buyouts 2010-12 scheme.		What the Committee reviewed and concluded Internal Audit reviews the carried interest balances and carry plan distributions made to plan participants before the payments are made. Summaries of the work done are included in updates to the Committee. The Committee reviewed a summary of carried interest payable as part of the overall summary prepared by management to support the Annual report and accounts 2024.
	Fair, balanced and understandable and the presentation of 3i’s reports and accounts		Area of significant attention Under the Code, the Board should establish arrangements to ensure the Annual report presents a fair, balanced and understandable assessment of the Group’s position and prospects. The Group prepares the non-GAAP Investment basis financial statements to provide a disaggregated view of the underlying portfolio alongside the IFRS basis to aid in the understanding of the results and performance of the underlying portfolio.		What the Committee reviewed and concluded The Committee reviewed the half-yearly and annual financial statements as well as the quarterly performance updates with management, focusing on the integrity and clarity of disclosures and enabling the Board to provide the fair, balanced and understandable confirmation to shareholders in the Annual report and accounts 2024. A report summarising the considerations for the Annual report and accounts 2024 was reviewed by the Committee in advance of the year end and a summary of the detailed procedures undertaken was prepared alongside the Annual report and accounts 2024.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Audit, risk and control continued Audit and Compliance Committee report continued

3i Group plc | Annual report and accounts 2024 125

Internal audit

The Committee continued to monitor the scope, activity,

and resources of the Group’s Internal Audit function, including

approving the internal audit plan and assessing whether its operating

model remained effective and in line with relevant professional

standards. The Committee receives quarterly updates on internal

audit activity, including the results of reviews of 3i’s investment offices

and professional services teams; updates on outstanding agreed

actions from previous reports; and any changes to the audit plan in

response to business developments or new areas of higher risk.

In the absence of an external quality assessment in FY2024, the

Committee also received an effectiveness self-assessment from the

Head of Internal Audit which is designed to assist the Committee in

its monitoring of the function.

Based on reports and other evidence seen, and meetings held over

the course of the year, the Committee concluded that the Internal

Audit function remained effective.

External audit

The Committee has responsibility for making recommendations

to the Board on the appointment of the External auditor,

determining its independence from the Group and its management

and agreeing the scope and fee for the audit.

KPMG were appointed auditors of 3i Group plc for the year ending

31 March 2021, following a tender process in July 2018. Consistent

with the IESBA Code of Ethics, the current audit partner on the 3i

Group audit is expected to rotate after a maximum of five years.

Auditor independence

The Group has a policy for setting out what non-audit services can be

purchased from the firm appointed as External auditor or a member

of the firm’s network. The aim of the policy is to support and

safeguard the objectivity and independence of the External auditor

and to comply with the FRC’s Ethical Standards for auditors. It also

ensures that where fees for approved non-audit services are greater

than a pre-determined limit, they are subject to the Committee

Chair’s prior approval.

The policy permits certain non-audit services to be procured,

following approval, when the Committee continues to see benefits

for the Group in engaging KPMG. Examples of this include work:

• that is closely related to the external audit as described in para 5.36

of the FRC’s Ethical Standards;

• where a detailed understanding of the Group is required; and

• where KPMG is able to provide a higher quality and/or better

value service than other potential providers.

The key principle of our policy is that permission to engage

the External auditor will always be refused when a threat to

independence and/or objectivity is present or perceived or without

any proper safeguards in place. In line with the FRC’s Ethical

Standards, 3i will not generally use KPMG for any non-audit services

(unless explicitly permitted) that are not closely related to KPMG’s

role as 3i’s External auditor. This includes tax and legal, consulting

and investment-related services such as due diligence.

All proposals for services with KPMG must be forwarded to the Chief

Operating Officer in the first instance and will require approval by the

Chair of the Audit and Compliance Committee above a defined limit

and provided the work is not closely related to KPMG’s role as 3i’s

External auditor. Examples of services that require additional

approval include:

• the fee exceeds £100,000; or

• the service is work other than services closely related to KPMG’s

role as 3i’s External auditor.

Smaller engagements with fees of less than £100,000 and services

that are explicitly permitted and are not considered closely related

to the audit are approved by the Chief Operating Officer on behalf

of the Committee.

KPMG has reviewed its own independence in line with these criteria

and its own ethical guideline standards. This includes the review of

due diligence processes undertaken within the Group’s investment

activities. KPMG has confirmed to the Committee that following its

review it is satisfied that it has acted in accordance with relevant

regulatory and professional requirements.

Audit and non-audit fees

The total audit fee for the year was £3.1 million (2023: £2.8 million).

Non-audit fees paid to the External auditor were £0.4 million

(2023: £0.4 million). The Committee concluded that these fees fell

within its criteria for engaging KPMG and do not believe they pose

a threat to the External auditor’s independence or objectivity.

Assessing external audit effectiveness

The Committee reviews the effectiveness of KPMG through the

use of questionnaires completed by management, by considering

the extent of its contribution at Committee meetings throughout

the course of the year, and in one-to-one meetings.

The FY2024 evaluation also reviewed the quality of the audit process,

the use of KPMG’s valuation specialists to support the audit of the

portfolio valuations and the technical knowledge of the team.

The Committee concluded that the audit was effective and that

there should be a resolution to shareholders to recommend the

re-appointment of KPMG LLP at the 2024 AGM.

Risk management and internal control framework

The Committee is responsible, on behalf of the Board, for

overseeing the effectiveness of the Group’s risk management

and internal control system. The overall framework is reviewed by the

Committee in accordance with the Guidance on Risk Management,

Internal Control and Related Financial and Business Reporting issued

by the FRC.

The GRC, Executive Committee and senior managers are required to

provide the Committee with regular updates on a range of topics to

enable the Committee to form a view on the Group’s principal risks,

risk mitigation plans and any significant new risks, themes or

developments.

The GRC provides an update on the assessment of the Group’s

principal risks and new and emerging risks, together with details of

how these are being managed or mitigated in the context of the

Group’s strategic objectives and risk appetite. The reports also

include updates on key ESG risks and developments, both in relation

to the Group and the investment portfolio. Further details on can be

found in the Risk management section on pages 80 to 93.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Audit, risk and control continued Audit and Compliance Committee report continued

3i Group plc | Annual report and accounts 2024 126

The Committee receives a range of reports and information on the

operation of the Group’s system of internal control, including controls

over financial reporting. The Group’s external reporting is subject to

a well-established input, review and verification process, which the

Committee is briefed and consulted on.

Details of what the Committee reviewed can be found in the tables

on pages 123 and 125. A summary of the key control framework is set

out below.

Review of effectiveness

For monitoring and reporting purposes, a significant control

failure or weakness is defined as one resulting in or with potential

to result in a material misstatement in the financial statements or loss

to the business, or significant reputational damage, penalties or

sanctions.

Both the External and Internal Auditors provide the Committee with

details of their respective reporting frameworks, including materiality

limits and risk ratings. This is to ensure there is an understanding of

how the definitions are applied in evaluating the nature and severity

of any risk or internal control findings and the appropriateness

of remedial action plans.

The Committee’s review of the risk management and internal control

system takes into account the various updates and reports outlined in

this section. In addition, the Committee receives an annual risk and

internal control effectiveness review from Internal Audit and an end-

of-audit report from the External auditor. The Executive Committee,

supported by their direct reports, is also required to sign-off an

annual control attestation, the results of which are reported by

Internal Audit. The Committee also reviews the Group’s anti-fraud

programme and use of the whistle blowing facility.

The Committee performed its annual review of the system’s

effectiveness and reported its conclusions to the Board. The Board

noted that the system has been in place for the year under review

and up to the date of approval of this Annual report and accounts

2024, and that there had been no significant control failings or

weaknesses which required remedial action.

	Summary of key control framework
		Investment process		Investment portfolio companies		Investment portfolio management
		• Due diligence process • Investment procedures • Investment Committee review and approval • ESG assessment • Responsible Investment policy		• 3i board representatives • Active management of senior appointments • Minimum ESG requirements		• Procedures for portfolio management • Monthly portfolio company dashboards and performance monitoring • Six-monthly investment and portfolio company reviews, including reporting against ESG requirements
		Viability and going concern		Valuations process		Financial reporting
		• Stress testing methodology and modelling • Analysis of assets and liabilities • Capital adequacy review process • Group strategy and liquidity forecasting models		• Approved Valuations policy • Investment and portfolio company review processes • Central oversight by the Valuations team, Investment Committee and Valuations Committee		• Framework of key financial controls and reconciliations • Portfolio, fund and partnership accounting processes • Documented analyses of complex transactions and changes in accounting requirements and disclosures • Operating expense budget
		People and culture		Advisory relationships		Third-party service suppliers
		• Values framework and HR policies • Performance management framework • Remuneration policies • Conduct and compliance policies and monitoring • Succession planning process		• Pre-approved suppliers of investment due diligence services • Tendering and approval process for other advisers, eg legal, tax • Monitoring of performance and patronage • Confidentiality and conflicts management		• Use of 3i’s Supplier Relationship Management tool • Required contractual protections, eg data security and business continuity • Oversight and governance frameworks for critical suppliers • Independent service organisation reports
		Balance sheet management		Change management		IT systems and security
		• Treasury policy and control framework • Liquidity monitoring framework • Fund transfer and release controls • Portfolio concentration and vintage control monitoring framework • FX hedging programmes		• Approval process for changes to corporate structure or new products/business areas • Ongoing monitoring of legal and regulatory changes • Active participation and engagement with government, regulators and trade bodies • Business systems project governance and oversight		• IT governance and policy framework • Access and data security controls • Back-up and disaster recovery procedures and testing • IT and cyber security monitoring and control framework, and regular penetration tests • Staff cyber security awareness training

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Audit, risk and control continued Audit and Compliance Committee report continued

3i Group plc | Annual report and accounts 2024 127

Resilience statement

Our resilience is dependent on the success

of our investment strategy, careful management

of our balance sheet and costs, and the ability

to attract and retain a capable and diverse team.

This is underpinned by a strong institutional culture

and values, robust corporate governance, and

effective risk and operational management.

The success of our investment strategy, in particular, requires a long-

term, responsible and risk-based approach to building a resilient

portfolio with strong growth potential, and maintaining and

developing the expertise, relationships and institutional culture

to support this. This foundation supports 3i’s ability to generate

attractive returns through sustainable growth.

Our resilience assessment draws upon a number of interdependent

components, illustrated below. Further information can be found

in the sections on the Group’s business strategy (pages 12 to 17),

Approach to risk management (pages 80 to 93) and Sustainability

(pages 39 to 68).

Resilience

assessment

People

Portfolio

Net asset value

Liquidity

Sustainability approach

Stress test scenarios

• Economic downturn

• Concentration

• Geopolitical crisis

• Climate change

Principal risks analysis

Long-term risks

and opportunities

3i business model

Investment Committee

Investment strategy and

Responsible Investment policy

Megatrends/investment themes

Demographic and social change

Value-for-money and discount

Digitalisation, automation

and big data

Energy transition, energy security

and resource scarcity

Strategy and risk

assessment

Strategic objectives

and Key performance

indicators

Short to medium-term

risk assessment

• External environment

• Investment outcomes

• Operational

Longer-term

risk assessment

• Climate/environmental

• Geopolitical

• Societal and demographic

• Technological

• Economic

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Audit, risk and control continued

3i Group plc | Annual report and accounts 2024 128

Short-term resilience

In assessing our short-term resilience, we undertake regular portfolio

monitoring, including six-monthly strategic portfolio company

reviews and monthly trading updates for each portfolio company.

These reviews highlight and appraise sources of risk at a portfolio

company level and feed into the quarterly valuation process.

Regular portfolio updates are provided to the Board and Audit

and Compliance Committee.

We also carry out periodic assessments of the Group’s operational

resilience, including key people risks, IT systems and security

infrastructure, and critical third-party suppliers.

Active management of liquidity underpins our short-term resilience,

which is supported by the ready availability of short-term funding

and a conservative balance sheet policy that ensures a low level

of structural gearing at the holding company level.

The identification of material uncertainties, that could cast significant

doubt over the ability of the Group to continue as a going concern,

forms the basis of the Directors’ Going concern statement below.

Going concern statement

Going concern is assessed for a period of at least 12 months

from the date of approval of the Annual report and accounts.

The Directors are required to evaluate whether the Group has

adequate resources to continue in operational existence for at

least the next 12 months. The Directors have made an assessment

of going concern, taking into account both the Group’s current

performance and outlook using the information available up

to the date of issue of these financial statements.

In carrying out their assessment of going concern and short-term

resilience, the Directors considered a wide range of information,

including:

• details of the Group’s strategy, risk appetite, and business

and operating models;

• information on the Group’s principal risks and mitigation plans;

• a summary of the financial position considering performance; and

• current market volatility and geopolitical and economic

uncertainties.

The Group monitors its funding position and its liquidity risk

throughout the year to ensure it has access to sufficient funds

to meet forecast cash requirements.

At 31 March 2024, the Group remained well funded with liquidity

of £1,296 million (31 March 2023: £1,312 million). Liquidity comprised

cash and deposits of £396 million (31 March 2023: £412 million)

and undrawn RCF of £900 million (31 March 2023: £900 million).

During the year, we successfully issued a six-year €500 million bond at

a coupon of 4.875% and extended the tenor of the £400 million

tranche of our £900 million RCF to November 2026. The Group

monitors its liquidity regularly, ensuring it is adequate and sufficient.

This is underpinned by the monitoring of investments, realisations,

foreign exchange hedging (including the liquidity impact of the

Group hedging programme implemented last year), operating

expenses and receipt of portfolio cash income.

Liquidity is also central to the Group’s dividend policy to maintain

or grow the dividend year-on-year. This policy is subject to

maintaining a conservative balance sheet approach and is therefore

informed by the outlook for investment and realisation levels.

Allowing the Group to exercise discretion over the level of dividends

paid ensures that the Directors can recommend a sustainable

dividend which takes into account the need to maintain liquidity

for new investment and operating expenses.

The Directors have acknowledged their responsibilities in relation

to the financial statements for the year to 31 March 2024. After

making the assessment on going concern and short-term resilience,

the Directors considered it appropriate to prepare the financial

statements of the Company and the Group on a going concern basis.

The Group has sufficient financial resources and liquidity and is well

positioned to manage business risks in the current economic

environment and can continue operations for a period of at least

12 months from the date of this report. The Directors have concluded

that there are no material uncertainties or risks that could cast

significant doubt over the short-term resilience of the Group

or its ability to continue as a going concern over the duration

of that period based on investment and operational requirements.

Medium-term resilience

The assessment of medium-term resilience, which includes

the modelling of stress tests and reverse stress tests, considers

the viability and performance of the Group in the event of specific

stressed scenarios which are assumed to occur over a five-year

horizon in line with the Group’s strategic planning process.

The stress testing focuses upon the principal risks, but also

considers those new and emerging risks which are considered to be

of sufficient importance to require active monitoring by the GRC;

these include, for example, concentration risk in the portfolio and

the impact of climate change. The medium-term resilience of the

Group is examined through analysing the impact of these scenarios

on key metrics such as net asset value and liquidity.

In each stress test scenario, the Group remains viable. The medium-

term resilience of 3i is further supported by the availability of

controllable management actions that can mitigate the impact

of certain stress events. These actions include, for example,

the flexing of investment and dividend levels for liquidity purposes.

Viability statement

The stress testing as detailed above forms the basis of the Viability

statement. 3i conducts its strategic planning over a five-year period;

the Viability statement is based on the first three years, which reflects

the nature of the Group’s business and its risk appetite to invest in

Private Equity and Infrastructure investments for a period of four to

six years and, therefore, provides more certainty over the forecasting

assumptions used. The Directors assess 3i’s viability and medium-

term resilience over a three-year period from the date that the

Annual report and accounts is approved. 3i’s strategic plan and

associated principal risks, as set out on pages 85 to 93, are the

foundation of the Directors’ assessment.

The assessment is overseen by the Chief Operating Officer and Group

Finance Director and is subject to challenge by the GRC, review by the

Audit and Compliance Committee and approval by the Board.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Audit, risk and control continued Resilience statement continued

3i Group plc | Annual report and accounts 2024 129

The Group’s strategic plan projects the performance, net asset value

and liquidity of 3i over a five-year period and is presented at the

Directors’ annual strategy meeting in December and updated during

the year as appropriate. At the strategy meeting, the Directors

consider the strategy and opportunities for, and threats to, each

business line and the Group as a whole. The outcome of those

discussions is included in the next iteration of the strategic plan which

is then used to support the assessment of viability and medium-term

resilience. The current iteration of the strategic plan reflects the

current macro-economic headwinds and geopolitical uncertainty.

The Group’s viability testing considers multiple severe, yet plausible,

individual and combined stress scenarios. These scenarios include a

range of estimated impacts, primarily based on providing additional

support to portfolio companies as a result of a downturn and

delaying the Group’s ability to realise and make new investments.

A key judgement applied is the extent of the impact of certain market

and economic developments, including the outlook on interest rates,

inflation and economic growth. The scenarios tested are as follows:

• widespread economic turmoil – considers the impact of

a recession, triggered by persistent inflation, high interest rates

and weak consumer demand, with a significant impact

on valuations and realisations;

• concentration risk – considers a material adverse event affecting

a single large asset in the investment portfolio;

• combined scenario with widespread economic turmoil and

concentration risk – considers both scenarios occurring at the same

time;

• impact of a significant event – considers the impact of a loss in

value of certain portfolio companies following a material event

such as significant operational underperformance, covenant

breaches, fraud, a cyber security breach or other ESG issues; and

• climate change – considers the impact of climate change on

3i’s portfolio, driven by changes in consumer behaviour,

regulations, and other physical and business risks.

The assessment projects the amount of capital the Group needs

in the business to cover its risks, including financial and operational

risks, under such stress scenarios. The results of each of the stress test

scenarios indicate that the Group is able to meet its obligations as

they fall due for the viability period over three years from the date of

approval of these financial statements by, in certain cases, making

use of controllable management actions. In all these scenarios the

Directors expect the Group to be able to absorb the impact on NAV,

whilst the liquidity and solvency of the Group is protected.

Mitigating actions within management control include reducing new

investment levels, dividend levels and drawing on the existing RCF.

The analysis shows that, while there may be a significant impact on

the Group’s reported performance in the short term under a number

of these scenarios, the resilience and quality of the balance sheet is

such that solvency is maintained, and the business remains viable.

As part of the assessment of viability and medium-term resilience,

the Group also undertakes reverse stress testing to identify the

circumstances under which the Group’s business model would no

longer remain viable. These circumstances include a prolonged delay

in the projected realisation date of investments, at the same time as

continued investment by the Group at a level not supported by the

liquidity forecast. In the absence of any mitigating management

actions, these reverse stress tests determine the point at which the

Group would lack the liquidity to remain viable. Overall, the reverse

stress tests are sufficiently improbable as to provide a low risk

of impact to the Group’s viability and medium-term resilience.

In practice, in the event of a market downturn and a significant

delay in realisations, mitigating actions within management control

would be exercised to provide sufficient liquidity.

Taking the inputs from the strategic planning process and its stress

scenarios, the Directors reviewed an assessment of the potential

effects of 3i’s principal risks on its current portfolio and forecast

investment and realisation activity, and the consequent impact

on 3i’s capital and liquidity.

Based on this assessment, the Directors have a reasonable

expectation that the Company and the Group will be able to

continue in operation and meet all their liabilities as they fall due

up to at least the end of the three-year period of the assessment.

Long-term resilience

The long-term resilience of our business is underpinned

by our capabilities as a leading investor in Private Equity

and Infrastructure assets and our effective risk management of the

core elements of our business model (pages 14 and 15). This includes

our long-term responsible approach to investment, conservative

balance sheet strategy and an effective team built on a consistent

set of shared values.

Fundamental to our long-term resilience is our investment strategy.

We invest capital in businesses to deliver capital returns and portfolio

and fund management cash income to cover our costs, and increase

returns to our investors. Our long-term investment horizon is possible

because we have a permanent capital base and are not driven

by fundraising cycles. We adopt a sector and thematic approach

to origination and portfolio construction which in turn supports long-

term sustainable growth in the portfolio.

Crucially, this investment approach can be adapted in response

to new and emerging risks and challenges including climate change,

societal and demographic trends and technological changes. It also

informs decision taking on portfolio realisations enabling

the composition of the investment portfolio to evolve over time.

The analysis and management of our principal risks is focused on

the short to medium term, and used as a basis to develop a range

of stress test scenarios. Although these are modelled over a five-year

horizon, the resilience shown by the Group, and its ability to recover

from these stressed situations, supports the assessment of our

resilience over a longer term. The availability and effectiveness of

management actions employed in the stress testing scenarios

demonstrates the flexibility with which we can respond to new

and emerging risks.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Audit, risk and control continued Resilience statement continued

3i Group plc | Annual report and accounts 2024 130

Valuations Committee report

Peter McKellar

Committee Chair

	Committee membership		Meetings
	Peter McKellar (Chair)		4(4)
	Simon Borrows		4(4)
	Stephen Daintith1		1(1)
	James Hatchley		4(4)
	David Hutchison		4(4)
	Lesley Knox		2(4)
	Alexandra Schaapveld		4(4)
	The column above headed “Meetings” shows the number of meetings of the Committee attended by each member during the year, together with, in parentheses, the number of meetings they were entitled to attend. Other regular attendees at the Committee include the following: Audit and Compliance Committee Chair; Chief Operating Officer; Group General Counsel; Managing Partners of Private Equity; Director of Group Reporting and Valuations; and the External Auditor, KPMG LLP. 1 Stephen Daintith stepped down from the Valuations Committee when he was appointed Chair of the Audit and Compliance Committee at the end of the 2023 AGM.

I am pleased to present the

Valuations Committee report

for the year ended 31 March 2024.

My report explains the role of the

Committee, as well as the work we

reviewed this year.

Dear Shareholder

The Valuations Committee plays a key role in providing the Board

with assurance that the valuation methodology and process are

robust and independently challenged. During the year, we met

four times as part of the Group’s external reporting timetable.

We reviewed and challenged the assumptions behind management’s

proposed asset valuations and reported to the Audit and

Compliance Committee and the Board.

Our principal focus year-on-year is the Group’s unquoted

investments in Private Equity and Infrastructure, as a high level of

judgement is required to value this portfolio of assets. This portfolio

accounts for 96% of 3i’s investment portfolio. The valuation of the

Group’s largest Infrastructure investment, namely the quoted holding

in 3iN, represents 4% of 3i’s investment portfolio, and the valuation is

based on the share price of 3iN at the relevant balance sheet date.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Audit, risk and control continued

3i Group plc | Annual report and accounts 2024 131

This year, we have predominantly focused on how our portfolio

companies have navigated adverse macro-economic headwinds such

as higher interest rates, inflation and weaker discretionary consumer

sentiment, as well as geopolitical instability that introduced further

volatility and uncertainty into capital markets. Whilst the majority of

our portfolio companies continue to mitigate these headwinds well

and demonstrate resilient trading, some of our portfolio companies

have seen prolonged weaker end-markets or company-specific

challenges. In these instances, alongside our usual rigour and

challenge of earnings and multiples, we have also applied particular

focus on the quality of the normalisations and the overall

maintainability of earnings. In setting our valuation multiples, we have

also applied particular focus and consideration to private market

transactions where there have been difficulties matching buyers and

sellers due to pricing misalignment, compared to quoted market

multiples which have largely seen a good recovery.

Valuations Committee’s terms of reference

www.3i.com/investor-relations/governance/principal-board-committees

At each Committee meeting, we received a detailed report from the

Group Finance Director and Chief Operating Officer recommending

the proposed valuation of the Group’s investment portfolio. This

report highlights the main drivers of value movement, analysed

between performance (movement in earnings and net debt), multiple

movements and other factors. At each meeting, we also reviewed

selected assets for detailed discussion; examples of such assets

covered during the year included Action, European Bakery Group,

Royal Sanders, SaniSure, Tato and WilsonHCG.

I met the Group Finance Director and Chief Operating Officer in

advance of each meeting to discuss the key valuation assumptions

and to review management’s paper before circulation. I also met

the External auditor, KPMG, privately to discuss the results of its

quarterly reviews. These reviews challenged management’s approach

to valuations, the selection of comparable companies and the

relevance of earnings adjustments. Additionally, KPMG selected

a sample of 13 assets, equivalent to 80% of the 31 March 2024

unquoted portfolio by value, across the half-year and full-year ends,

for an in-depth review by its specialist valuations team to help to

derive an independent valuation range. In March 2024, KPMG and

I discussed their approach to the year-end audit and their sample

of assets selected.

In advance of the full-year and half-year ends, management hold

portfolio company review (“PCR”) meetings with the respective

investment teams. Non-executive Directors, including myself, the

Chair and members of the Committee, attended a significant

proportion of the meetings held in September 2023 and March 2024.

Our valuation methodology and process remains consistent. The

valuation inputs for the Group’s portfolio companies are reviewed on

a case-by-case basis and considered against business plans, budgets,

shorter and longer-term views on trading, and sector performance.

Management considers various data points to support the fair value

of investments, including estimates of run-rate and forecast earnings

and the maintainability of these, in addition to historic earnings.

The judgements applied and resulting valuations were discussed

with the Committee and the External auditor throughout the year.

We embed an assessment of ESG factors on our portfolio companies

throughout our investment lifecycle. These assessments form part of

our normal portfolio management process, and as part of our PCR

process, which helps inform investment decisions, mitigation of risk

or value creation opportunities. Management continues to progress

the collection of quantitative and qualitative ESG data and the ability

to store and monitor it. As part of our case-by-case review of our

portfolio companies, the risks and opportunities from climate change

and other ESG factors are an important consideration in the overall

discussion on fair value.

By count, we have a relatively small portfolio of assets, which allows

us to challenge each valuation on an individual basis. We welcome

the FCA’s upcoming review of the disciplines and governance

around private market valuations. We believe our valuation

methodology and process are rigorous and robust and, given we are

a listed entity, we offer greater transparency on our valuation practice

for our shareholders, regulators and other interested parties.

The rest of this report sets out in more detail what the Committee

did during the year.

Peter McKellar

Chair, Valuations Committee

8 May 2024

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Audit, risk and control continued Valuations Committee report continued

3i Group plc | Annual report and accounts 2024 132

The Committee focused on the following significant issues in FY2024 :

Earnings and multiple assumptions Area of significant attention Of the total portfolio by value, 87% is valued using a multiple of earnings at 31 March 2024, or 22% excluding Action (see further detail on Action as an area of significant attention on page 134). This requires judgement, as the earnings of the portfolio company may be adjusted so that they are considered “maintainable”. We also apply a liquidity discount to the enterprise value determined according to factors such as our alignment with management and other shareholders and our investment rights in the company. The liquidity discounts vary between 5%-33% of the enterprise value of each portfolio company. There is also a significant degree of judgement in selecting the set of comparable quoted companies and transactions which are used as a key data point in determining the appropriate multiple to calculate an enterprise value. Multiples are selected by reference to the market valuation of quoted comparable companies, M&A transactions and input, in certain cases, from corporate finance advisers. We also take into account growth profile, geographic location, business mix, degree of diversification, and leverage/refinancing risk. The multiple implied by the quoted comparables may be adjusted if, in certain cases, the longer-term view (cycle or exit plan) supports the use of a different multiple. This continues to be an important exercise given the market volatility we have seen as a result of the macro-economic environment. We continue to consider the impact of IFRS 16 and ASC 842 on the quoted comparable companies for those assets that report under local GAAP. Private Equity assets are typically valued using a multiple of earnings. However, alternative valuation methodologies, such as a DCF valuation or a sum-of-the- parts, may be considered as an alternative benchmark for potential values or as a cross-check relative to the earnings-based valuation. In the year, the Committee placed a key focus on: • the budgets and projections for each portfolio company versus performance, considering the uncertainty around the macro-economic outlook; • the maintainability of earnings across LTM, forecast and run-rate earnings; • the quality of earnings across the portfolio and the impact of one-off related normalisation adjustments; • portfolio company leverage and covenant monitoring; and • our long-term, through-the-cycle, view on multiples against a challenging environment for private market transactions and the recovery of capital markets and the average of the quoted comparable peer sets. What the Committee reviewed and concluded Earnings data is received monthly from Private Equity portfolio companies and monitored closely by management. Actual earnings may then be adjusted in management’s proposed valuations, for example, to reflect a full year’s trading of an acquired business, removing profit from discontinued activities, any forecast uncertainty or to exclude exceptional transaction costs. Material adjustments are highlighted to the Committee in the quarterly report for review and approval. All multiples used by management have been adjusted, where the longer-term view of the exit or multiple supports the use of a different multiple. At 31 March 2024, two portfolio company valuation multiples, including Action, were valued above their peer set averages but remain well within the peer set range. Notable changes in multiples, which commonly result from significant bolt-on acquisitions, a change in performance or a shift in market sentiment in that sector, are presented to the Committee quarterly and adjustments are reviewed by the Committee at each meeting.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Audit, risk and control continued Valuations Committee report continued

3i Group plc | Annual report and accounts 2024 133

The Committee focused on the following significant issues in FY 2024 :

	Action		Area of significant attention Action forms 65% of the total portfolio by value. Valued on a multiple of earnings basis, Action is the largest investment for the Group and, therefore, its valuation is a key area of focus. Action’s run-rate earnings grew significantly in the 12 months to the end of Action’s P3 2024 (which ended on 31 March 2024), driven by new store openings and increased transaction volumes. All geographies performed well, with a reduction in prices across 42% of its catalogue in 2023, contributing to the strong growth in volumes. Following the successful debut of a US dollar term loan, Action returned £762 million of proceeds to 3i, in addition to £375 million of cash dividends further to its strong cash generation. 3i reinvested £455 million of these proceeds, increasing its equity interest in Action from 52.9% to 54.8%. Action was valued using its run-rate earnings for the 12 months to P3 2024 of €1,848 million and a run-rate multiple of 18.5x (31 March 2023: 18.5x) after applying a liquidity discount of 5%. When considering the multiple for Action we paid particular attention to the following areas: • the appropriateness of the comparable peers from both a forward and backward-looking view; and • the strength of Action’s performance across its key performance indicators compared to its peers. Management also cross-checked the earnings-based valuation against a DCF model.		What the Committee reviewed and concluded The Committee noted Action’s impressive performance in the year and noted the momentum in its trading and strong like-for-like sales growth. The Committee reviewed the work done by management on the comparable peer set and Action’s relative performance across its key performance indicators, as well as the potential use of the DCF model. The Committee agreed with management’s approach of valuing Action on the basis of a multiple of earnings, but noted that the DCF model provides a useful reference point. The Committee reviewed the run-rate adjustments and earnings normalisations to ensure a consistent valuation methodology was applied.
	Assets valued using a DCF basis		Area of significant attention For assets valued using a DCF basis, which represent 5%  of the total portfolio by value, the key valuation judgements relate to longer-term assumptions that drive the underlying business plan and cash flows and decisions on the appropriate discount rates. EC Waste, Regional Rail, Scandlines and Smarte Carte are the significant investments valued using a DCF valuation basis. A DCF model also forms the most significant input into an early-stage investment, ten23 health, which is valued on a sum-of-the-parts basis.		What the Committee reviewed and concluded Material assumptions for the DCF valuations are reviewed by the Committee. Sensitivity to assumptions is also noted. Any material changes are reviewed by the Committee.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Audit, risk and control continued Valuations Committee report continued

3i Group plc | Annual report and accounts 2024 134

The Committee focused on the following significant issues in FY2024:

Imminent sale assets Area of significant attention At any point in time, it is likely that a number of potential exit processes from the portfolio are underway. Judgement is applied by management as to the likely eventual exit proceeds and certainty of completion. This means that in some cases an asset may not be moved to an imminent sales basis until very shortly before completion; in other cases, the move may occur on signing, even if the time to completion is a period of some months. However, as a general rule an asset moves to an imminent sale basis only when a process is materially complete and the remaining risks are estimated to be small, given the completion risk around unquoted equity transactions. In April 2024, we reached an agreement to sell nexeye for expected proceeds of c.€452 million. The valuation at 31 March 2024 is in line with these proceeds, less a 2.5% discount to reflect the residual execution risk. What the Committee reviewed and concluded Active sales processes are reviewed by the Committee, including details such as the timeline to potential completion, the number and make-up of bidders for investments, execution and due diligence risks, and regulatory or competition clearance issues. Management proposes a treatment for each asset in a sales process, which the Committee reviews at each meeting.

Review process

As part of its challenge and review process, the Committee:

• considered the management information provided to support

the Committee’s review of the valuations, including management’s

responses to any challenges raised by Committee members or the

External auditor;

• sought assurance from the External auditor as to whether and how

they had considered the appropriateness of valuations and the

underlying assumptions made;

• reviewed the consistency of the views of management and

the External auditor and their valuation specialists; and

• reviewed and challenged the differential between carrying values

and those implied by the multiples of comparable quoted

companies and transactions.

The Committee was satisfied that the application of the valuation

policy and process was appropriate during the period under review,

and recommended the portfolio valuation to the Audit and

Compliance Committee and the Board at each quarter end

for approval by the Board.

In addition, the Committee is responsible for keeping the Group’s

valuation policy under review and recommending any changes to

the policy to the Audit and Compliance Committee and the Board.

The policy is reviewed at least annually, with the last update in

January 2024.

More information on our valuation methodology, including

definitions and rationale, is included in Note 13 – Fair values of

assets and liabilities on page 178 and in the Portfolio valuation –

an explanation section on page 217.

External audit

As part of its year-end audit, KPMG’s specialist valuations team

reviews a selection of investments to support its overall audit opinion

on the financial statements as a whole.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Audit, risk and control continued Valuations Committee report continued

3i Group plc | Annual report and accounts 2024 135

Directors’ remuneration report

Coline McConville

Committee Chair

	Committee membership during the year
		Name	Meetings
	Coline McConville		6(6)
	Caroline Banszky		3(3)
	Alexandra Schaapveld		3(3)
	Lesley Knox		5(6)
	Peter McKellar		6(6)
		The column above headed “Meetings” shows the number of meetings of the Committee attended by each member during the year, together with, in parentheses, the number of meetings they were entitled to attend. The Chief Executive, the Company Chair, the Remuneration Director and the General Counsel & Company Secretary attend Committee meetings by invitation, other than when their personal remuneration is being discussed.

Dear Shareholder

This letter summarises the key Executive Director remuneration issues

considered by the Remuneration Committee in the year and

decisions we arrived at.

FY2024 Performance

3i delivered a strong FY2024 total return on opening shareholders’

funds of 23% (2023: 36%). The FY2024 scorecard, as set out in the

Annual report on remuneration, shows a mix in performance within

the quantitative section, with another year of excellent performance

from Action resulting in it materially overachieving against its target

range. The wider portfolio saw Infrastructure deliver above target

performance, with the Private Equity (ex Action) portfolio delivering a

7% return, below its threshold target of 10%. These strong results

were delivered in spite of challenging economic conditions during

the year.

We saw a modest recovery in the global economy in 2023 as the

fragile macro-economic environment and geopolitical uncertainty

persisted. Although inflation has begun to moderate, consumer

confidence remains strained, with a strong emphasis on affordability.

During the year, these dynamics supported substantial growth for our

value-for-money and private label portfolio companies. Notably,

Action, with its impressive performance, continued its growth

trajectory by expanding its store footprint across Europe. The

healthcare market saw a positive rebound and our Infrastructure

portfolio maintained its resilient performance.

Against the backdrop of a subdued M&A market in 2023, we

continued our disciplined approach to the deployment of capital,

investing a total of £593 million in FY2024, including a further £455

million of investment into Action to increase our stake from 52.9%   

to 54.8%. Seven bolt-on acquisitions were completed in the Private

Equity portfolio, one of which required further investment of           

£38 million.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Remuneration

3i Group plc | Annual report and accounts 2024 136

During the year, we made significant progress with our ESG agenda,

with a particular focus on our climate change strategy. We are

reporting for the first time in alignment with TCFD recommendations,

in compliance with FCA requirements, including aggregate portfolio

emissions. Additionally, our near-term science-based targets were

approved by the Science Based Targets initiative in March 2024.

Over the year, we delivered very strong total shareholder returns of

71%, the majority of which is based on our share price performance.

We also further strengthened our balance sheet and liquidity position

with the issue of a six-year €500 million bond.

FY2024 bonus outcomes

As reflected in our remuneration policy, when considering annual

bonuses, the Committee uses the scorecard outcome as a “prompt

and guide to judgement” and “has the discretion to adjust the

annual bonus outcomes, both upwards and downwards (where

significant adjustment is required), to ensure the outcome is a fair

reflection of the overall performance of the Company and the

individual”.

In considering an appropriate FY2024 bonus, reflective of overall

performance, the Committee considered whether the scorecard

outcome of 70.6% reflected the exceptional overall Company

performance. The Committee acknowledged that, in hindsight, the

weighting of Action’s returns within the scorecard was low. Had the

weighting been allocated on the same ratio as the portfolio value (as

at 31 March 2023) the overall scorecard outcome would have been

almost 80%.

Action’s continued exceptional returns have a substantial impact on

the Company’s overall results. The importance of this investment is

reflected in the Chief Executive holding the position of Chair of

Action. In addition, the Group Finance Director and Chief Operating

Officer have been very engaged in executing our strategy of

continuing to reduce the carried interest liability related to Action

and increasing our investment in Action when opportunities arise,

with our shareholding increasing from 52.9% to 54.8% in the year.

The Committee considered whether it was appropriate to exercise its

discretion and award bonuses of 80% (FY2023: 85%) of maximum and

concluded that while overall performance, as well as the shareholder

experience, could be argued to warrant a higher bonus, the

adjustment was not deemed to be sufficiently “significant” (as

required within our Policy) to merit the exercise of discretion.

2021 LTIP outcomes

The 2021 LTIP award was based on two equally weighted

performance conditions: absolute TSR and relative TSR against the

FTSE 350. You will see in this report that based on performance over

the three-year period, the 2021 LTIP achieved 100% vesting with

absolute TSR growth of 33% per annum and relative TSR well above

the upper decile of the peer group. The Committee considered that

the value of awards vesting was appropriate without adjustment.

FY2025 scorecard

The scorecard structure and metrics have remained materially

unchanged since the appointment of the Chief Executive in 2012.

Following the Committee’s discussion of the appropriate FY2024

bonus, it concluded that it will conduct a thorough review of the

scorecard and the appropriate measures of performance for FY2025

and future years. The Company has undergone significant change

since 2012, which should be reflected in the structure and metrics by

which management is assessed. Details of these changes will be

included in next year’s remuneration report.

Looking forward

As noted in previous letters, Jasi Halai joined the Board on 12 May

2022, with remuneration arrangements set in line with the

shareholder-approved policy and at a level that would allow

progression in her role over time. The Committee reviewed Jasi’s

performance, continued progress in the role and overall

remuneration opportunity against a relevant peer group, and

decided that it would be appropriate to increase Jasi’s base salary by

10%. As set out later in the report, the base salaries for Simon

Borrows and James Hatchley will be increased by 4.5%, in line with

other employees in the Group.

Thoughtful allocation of capital and rigorous management of

invested capital are the core components underpinning 3i’s ability to

generate long-term sustainable returns. Our remuneration policy

needs to reflect this and align with our strategy. The existing policy

was approved at last year’s AGM but has remained largely

unchanged for more than 10 years. Whilst our Policy has delivered

appropriate outcomes since the Chief Executive implemented the

new strategy in 2012, the Company has changed significantly since

then in terms of portfolio structure and overall size (by NAV and

market capitalisation). Therefore, over the coming year the

Committee will conduct a thorough review of this policy to ensure

that it remains aligned with the Company’s strategy and will continue

to incentivise and reward management in the medium to long term. If

changes to our policy are required, we will consult with our largest

shareholders, and present any new policy to shareholders to approve

in due course.

I hope that you will find this report a clear account of the way in which

the Committee has implemented the remuneration policy during

the year and I look forward to your support for our Annual report

on remuneration at the upcoming AGM.

Coline McConville

Chair, Remuneration Committee

8 May 2024

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Directors’ remuneration report continued

3i Group plc | Annual report and accounts 2024 137

During FY2024 , we operated under the remuneration policy approved at the 2023 AGM, which can be found on our website at www.3i.com .

Director remuneration for the year (audited)

Single total figure of remuneration for each Director

								FY2024								FY2023
£’000	Salary /fees	Benefits	Pension	Total Fixed Pay	Annual bonus	LTIP	Total Variable Pay	Total	Salary/ fees	Benefits	Pension	Total Fixed Pay	Annual bonus	LTIP	Total Variable Pay	Total
S A Borrows	713	17	21	751	2,031	5,483	7,514	8,265	687	16	18	721	2,357	6,428	8,785	9,506
J G Hatchley	503	17	53	573	895	283	1,178	1,751	431	14	45	490	921	346	1,267	1,757
J S Wilson	–	–	–	–	–	–	–	–	121	5	13	139	–	–	–	139
J H Halai	357	19	46	422	577	191	768	1,190	298	16	31	345	573	232	805	1,150
D A M Hutchison	335	–	–	335	–	–	–	335	325	–	–	325	–	–	–	325
C J Banszky	24	–	–	24	–	–	–	24	96	–	–	96	–	–	–	96
S W Daintith	89	–	–	89	–	–	–	89	84	–	–	84	–	–	–	84
L M S Knox	96	–	–	96	–	–	–	96	94	–	–	94	–	–	–	94
P A McKellar	98	–	–	98	–	–	–	98	96	–	–	96	–	–	–	96
C McConville	98	–	–	98	–	–	–	98	96	–	–	96	–	–	–	96
A Schaapveld	92	–	–	92	–	–	–	92	84	–	–	84	–	–	–	84

• Benefits for Executive Directors include a car allowance, provision of health insurance and, for Mrs Wilson and Ms Halai, the value

of the Share Incentive Plan matching share awards.

• The amounts shown as pension are salary supplements in lieu of pension contributions. These supplements were in line with pension

contributions for the Group’s employees generally (12% of pensionable salary).

• Annual bonus awards made in respect of the year are delivered as 60% 3i Group plc shares deferred over four years, and the remaining 40%

as a cash payment in May 2024. All annual bonus awards are subject to the malus/clawback policy. Those shares deferred over four years

are released in four equal annual instalments commencing June 2025 and all share awards carry the right to receive dividends and other

distributions.

• In addition to the table above, dividends or dividend equivalents on unvested deferred share awards were paid during the year

(Mr Borrows: £134k, Mr Hatchley: £53k and Ms Halai: £20k).

• The values shown in the FY2024 LTIP column represent the performance shares vesting from the 2021 LTIP, together with the value

of accrued dividends on those shares. The shares have been valued using the three-month average closing share price to 31 March 2024

(2,450.92 pence). The 2021 LTIP value attributable to share price growth since the awards were granted is £2,585k, £134k and £90k for

Mr Borrows, Mr Hatchley and Ms Halai respectively. Further detail is provided on page 141. The values shown in the FY2023 LTIP column

represent the shares that vested from the 2020 LTIP last year, together with the value of accrued dividends on those shares. This value has

been restated using the prevailing share price at the time of vesting (1,857 pence for Mr Borrows and 1,936.5 pence for Mr Hatchley and Ms

Halai), being the third anniversary of grant.

• The fees shown for the non-executive Directors include fees used to purchase shares in the Company.

• Non-executive Directors receive reimbursement for their reasonable expenses for attending Board meetings. The Group meets

the associated tax cost.

• Ms Halai retained Directors’ fees of £70k from Barratt Developments plc.

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3i Group plc | Annual report and accounts 2024 138

FY2024 performance

Formulaic performance measures (70% of total. FY2024 payout 40.6%)

Area of strategic focus	Weighting	Metric	Threshold	Maximum	Performance	Pay-out
Portfolio returns (Action)	32.5%	Gross investment return (% of opening portfolio value)	16%	21%	33%	100%
Portfolio returns (excl. Action)	27.5%	Private Equity gross investment return (% of opening portfolio value)	10%	15%	7%	0%
Portfolio returns (Infrastructure)	7.5%	Gross investment return (% of opening portfolio value)	8%	10%	9.3%	74%
Operating performance	2.5%	Operating cash profit	£0m	>£0m	£467m	100%

• The threshold and maximum return targets are set in line with 3iN’s public return objectives.

• Excluding the dividend received from Action  the operating cash profit was £92 million.

Qualitative performance measures (30% of total. FY2024 payout 30%)

Area of strategic focus		Weighting	Metric	Expectation	Performance	Comments
Investment management and operations		7.5%	Private Equity portfolio earnings growth	>10%	24%	93% of our Private Equity portfolio by value grew earnings in 2023, with particularly strong performance from Action, Royal Sanders and European Bakery Group.
			New capital invested in Private Equity	Up to €700m	€642m	During the year, Action completed its debut US dollar term loan issuance in the US leveraged loan market raising $1.5 billion. Action also completed a capital restructuring with a pro-rata redemption of shares. 3i reinvested £455 million of the £762 million of proceeds from the Action share redemption to increase our gross equity stake from 52.9% to 54.8%. Across the remaining portfolio, we prioritised our capital deployment into further reinvestments into existing portfolio companies and continued our buy-and-build activities.
			New 3iN capital committed in Core/PPP	£100m	£99.5m	The 3iN team has continued to deploy capital while retaining its pricing discipline and during the year, the team completed follow on investments in Future Biogas, DNS:NET and Ionisos.
			Development of assets relative to their investment plans			Action delivered another year of very strong performance and across the remaining portfolio we have seen resilient performance. A number of assets operating in the value-for-money and private label consumer and healthcare sectors delivered strong growth. These stronger performing assets largely offset softer performance from companies working through adverse phases of their market cycles or experiencing company- specific issues. In aggregate, in a challenging environment, we generated total Private Equity proceeds of £866 million inclusive of the proceeds from the Action capital restructuring (£104 million ex-Action). During the year the Infrastructure business completed the realisation of Attero for proceeds of €214 million, a 31% uplift on opening value.

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3i Group plc | Annual report and accounts 2024 139

Area of strategic focus		Weighting	Metric	Expectation	Performance	Comments
ESG		10.0%	Environmental, social and governance targets across the portfolio and 3i Group			Our science-based targets were validated by the SBTi on 22 March 2024. These targets cover our direct Scope 1 and 2 emissions, as well as the Scope 3 emissions associated with our investment portfolio. The second phase of climate change scenario analysis was completed in the year. The results provide further insights into climate change risks and opportunities across our portfolio and were used to enhance the climate element of our ESG investment assessment framework. The Company has supported nine charity partners which work across a variety of areas, donating a total of £1 million through the year.
Strategy		5.0%	Development of the strategic vision of the Group and progress of corporate projects			The Company continues to crystallise outstanding carried interest in the Buyouts 2010-12 scheme relating to Action. The North American Infrastructure Fund completed its final close in December 2023. The Fund completed a new investment in Amwaste and Regional Rail completed two bolt-on acquisitions adding over 100 miles of freight rail to the platform. Together with Action, a number of other companies are starting to demonstrate significant compounding potential, with impressive earnings growth and cash generation. We have designated Royal Sanders as a longer-term hold.
People		7.5%	Development of the quality and strength of the Group’s staff			The Private Equity business presented its plans for the reorganisation of the team structure. The Private Equity leaders are now focused on executing the investment team reorganisation to support our continued origination and portfolio management. We continue to take part in various initiatives to improve DE&I internally and across the industry, including sponsorship of Level 20, offering internships as part of GAIN (Girls Are INvestors) and #10000BlackInterns programmes.

Consistent with previous years, the Board did not set a threshold and maximum for all metrics, and set expectations rather than targets for

some. This is because the timing of investments and realisations is highly sensitive to market conditions, and a more prescriptive approach

would run the risk of creating perverse incentives for executives. For example, setting a target level of realisations may result in the earlier sale

of assets than would otherwise be appropriate, and setting a target level of investments may result in investing at inflated prices.

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Executive Director annual bonus outcomes

In light of the performance detailed above, and following an assessment taking into account the shareholder, employee, and wider

stakeholder experience, the Committee awarded bonuses to the Executive Directors of 70.6% of maximum. As set out in the Committee

Chair’s covering letter, the Committee considered whether it was appropriate to exercise its discretion and award bonuses above 70.6% and

concluded that while overall performance could be argued to warrant a higher bonus, the adjustment was not sufficiently “significant” (as

required within our Policy) to merit the exercise of discretion. Bonuses are delivered as 40% paid in cash immediately and 60% deferred into

the Company’s shares, vesting in equal instalments over four years. Annual bonus awards are subject to the malus/clawback policy.

Share awards vesting in FY2024 subject to performance conditions

2021 Long-term incentive award (audited)

The Long-term incentive awards granted in June 2021 were subject to performance conditions based on absolute and relative total

shareholder return over the three financial years to 31 March 2024. The table below shows the achievement against these conditions

and the resulting proportion of the awards which will vest in June 2024.

	Weighting	Threshold		Maximum		Actual		Total
Total shareholder return measure	%	Performance	% vesting	Performance	% vesting	Performance	% vesting	% vesting
Absolute total shareholder return	50%	10% pa	20%	18% pa	100%	33% pa	100%	100%
Relative total shareholder return (as measured against the FTSE 350 Index)	50%	Median	25%	Upper quartile	100%	Above Upper quartile	100%

The table below shows the grants made to the Executive Directors in 2021, at a share price of 1,226.3 pence, and the resulting number

of shares that will vest due to the achievement against the performance targets as set out above. The value of the shares vesting has been

included in the single figure table using the three-month average closing share price to 31 March 2024 of 2,450.92 pence.

As set out in the cover letter from the Committee Chair, reflecting on performance delivered over the performance period (in terms of

operational performance of the business and returns delivered to our shareholders), the Committee considered the formulaic out-turn to be

an appropriate reflection of performance and therefore did not exercise any discretion or downwards adjustment in relation to the award.

	Basis of award at grant	Face value at grant £'000	Number of shares awarded at 1,226.3p per share	% vesting	Number of shares vesting	Value of shares vesting at 2,450.92p per share £'000
S A Borrows	Face value award of 4 times base salary of £647k	2,589	211,095	100%	211,095	5,174
J Hatchley	Discretionary award made in 2021	134	10,912	100%	10,912	267
J Halai	Discretionary award made in 2021	90	7,339	100%	7,339	180

The proportion of the award vesting to Simon Borrows is subject to a further holding period, and shares will be released on the fifth

anniversary of grant together with the value of dividends that would have been received during the period from grant to the release date.

The awards made to James Hatchley and Jasi Halai were granted before they became Executive Directors and are not subject to a further

holding period. Accordingly, they will be released in June 2024.

Change in the remuneration of the Directors compared to other employees

The table below shows the percentage change in remuneration paid to each Director and employees as a whole for the past four

performance years.

			FY2024			FY2023			FY2022			FY2021
	Salary/ Fees	Benefits	Bonus	Salary/ Fees	Benefits	Bonus	Salary/ Fees	Benefits	Bonus	Salary/ Fees	Benefits	Bonus
S A Borrows	4%	12%	(14)%	4%	–%	(10%)	3%	–%	9%	–%	–%	149%
J G Hatchley	17%	19%	(3)%
J H Halai	20%	38%	1%
D A M Hutchison	3%			74%			85%			9%
C J Banszky	(75%)			3%			–%			–%
S W Daintith	6%			4%			–%			–%
L M S Knox	2%			114%			–%			–%
P A McKellar	2%			33%			–%			–%
C McConville	2%			3%			3%			3%
A Schaapveld	10%			4%			(5%)			467%
Employees	7%	27%	(5)%	13%	2%	6%	7%	9%	32%	2%	2%	76%

D A M Hutchison was appointed Chair in November 2021. The change in the fees shown above is due to part-year payments.

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3i Group plc | Annual report and accounts 2024 141

Details of share awards granted in the year

LTIP

Performance share awards were granted to the Executive Directors during the year as shown in the table below.

Description of award	A performance share award, which releases shares, subject to satisfying the performance conditions, on the fifth anniversary of award.
Face value	Chief Executive – 400% of salary, being 155,184 shares. Group Finance Director – 250% of salary, being 68,386 shares. Chief Operating Officer – 225% of salary, being 44,098 shares. The share price used to make the award was the average mid-market closing price over the five working days starting with the day of the announcement of the 2023 annual results (1,853.9 pence). We continue to apply our long-held consistent policy of measuring performance using the three-month average closing share price to 31 March and granting awards using the five-day average closing price (starting on the day of the announcement of the annual results).
Performance period	1 April 2023 to 31 March 2026.
Performance targets	50% of the award is based on absolute TSR measured over the performance period, and vests: • 0% vesting below 10% pa TSR; • 20% vesting at 10% pa TSR; • straight-line vesting between 10% and 18% pa TSR; and • 100% vesting at 18% pa TSR. 50% of the award is based on relative TSR measured against the FTSE 350 Index over the performance period, and vests: • 0% vesting for below median performance against the index; • 25% vesting for median performance against the index; • 100% vesting for upper quartile performance against the index; and • straight-line vesting between median and upper quartile performance. Total shareholder returns are calculated based on the average closing share price over the first three months of the calendar year.
Remuneration Committee discretion	The Committee can reduce any award which would otherwise vest if there are unauthorised breaches of the Group’s liquidity and gearing policies or where significant adjustment is required to ensure the outcome is a fair reflection of the performance of the Company and the individual.

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3i Group plc | Annual report and accounts 2024 142

Deferred bonuses awarded in FY2024

All Directors are considered to be Identified Staff and, for awards made during FY2024, 60% of the annual bonus was delivered in 3i Group plc

shares deferred over four years (and which vest one quarter per annum over those four years). The remaining 40% was delivered as a cash

bonus in May 2023. The following awards were made on 4 June 2023 in respect of FY2023 performance:

	Face value at grant	Number of shares awarded at 1,853.9p per share	Vesting
S A Borrows	£1,406k	75,834	Four equal instalments annually from 1 June 2024
J G Hatchley	£620k	33,418	Four equal instalments annually from 1 June 2024
J H Halai	£386k	20,797	Four equal instalments annually from 1 June 2024

The face value of the awards were reported in the FY2023 single figure of remuneration. The share price used to calculate face value was the

average of the mid-market closing prices over the five working days starting with the date of the announcement of the Company’s results for

the year ended 31 March 2023 (11 May 2023 to 17 May 2023), which was 1,853.9 pence. These awards are not subject to further performance

conditions but are subject to our malus and clawback policy.

Share Incentive Plan

During the year, Ms Halai participated in the HMRC-approved Share Incentive Plan which allowed employees to invest up to £150 per month

from pre-tax salary in ordinary shares (“partnership shares”). For each partnership share, the Company grants two free ordinary shares

(“matching shares”) which are forfeited if the participant resigns within three years of grant. Dividends are reinvested in further ordinary shares

(“dividend shares”).

Ms Halai purchased 85 partnership shares, and received 170 matching shares and 600 dividend shares at prices ranging between 1,728.67

pence and 2,805 pence per share, with an average price of 2,146.87 pence.

Hedging of share awards

As a matter of policy the Group ensures that it holds the maximum potential number of shares granted under the LTIP and Deferred Share

Plan from the date of grant. Shares are purchased by the Employee Benefit Trust in the market as and when required to ensure that coverage

is maintained.

Pension arrangements (audited)

The Executive Directors receive pension benefits on the same percentage basis (12%) of their pensionable salaries as other employees

of the Company. During the year, they received salary supplements in lieu of pension of £21k (Mr Borrows), £53k (Mr Hatchley) and £37k

(Ms Halai) respectively.

Prior to 2011, Executive Directors were eligible for membership of the 3i Group Pension Plan, a defined benefit contributory scheme. Pension

accrual ceased for all members with effect from 5 April 2011. Salary linkage was removed in February 2023 and replaced with a time-limited

cash allowance, which the Chief Operating Officer receives (£9k), in line with other, similarly affected staff.

Payments to past Directors (audited)

No payments to past Directors were made in the year.

Payments for loss of office (audited)

No payments to Directors for loss of office were made in the year.

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3i Group plc | Annual report and accounts 2024 143

Statement of Directors’ shareholding and share interests (audited)

The Company’s share ownership and retention policy requires Executive Directors to build up over time and thereafter maintain a

shareholding in the Company’s shares equivalent to at least 3.0 times gross salary in the case of the Chief Executive and 2.0 times gross salary

for the Group Finance Director and Chief Operating Officer. In addition, shareholding targets have been introduced for other members of the

Executive Committee at 1.5 times their gross salaries and for partners in the Group’s businesses at 1.0 times their gross salaries. Since 2018

non-executive Directors and the Chair are required to build up over time and thereafter maintain a shareholding in the Company’s shares

equivalent to at least the same as their respective annual base fees (cash and shares).

Executive Directors are expected to maintain a shareholding in the Company for two years post-employment, at the lower of their

shareholding at the time they leave employment and the levels set out above.

Details of Directors’ interests (including interests of their connected persons) in the Company’s shares as at 31 March 2024 are shown

in the table below. The closing share price on 31 March 2024 was 2,809 pence.

	Owned outright	Deferred shares	Subject to performance	Shareholding requirement	Current shareholding (% salary)
S A Borrows	16,502,204	835,442	365,976	300%	69,142
J G Hatchley	357,798	105,374	161,278	200%	3,459
J H Halai	87,990	54,072	101,908	200%	1,886

	Shares owned outright	Shareholding requirement	Current shareholding (% base fee)
D A M Hutchison	107,170	100%	898
S W Daintith	20,902	100%	836
L M S Knox	2,607	100%	104
P A McKellar	103,030	100%	4,120
C McConville	9,886	100%	395
A Schaapveld	10,054	100%	402

• The share interests shown for Ms Halai include shares held in the 3i Group Share Incentive Plan. The owned outright column includes partnership and dividend shares under the SIP. The deferred shares column includes matching

shares under the SIP.

• The number of shares shown includes the 2021 Performance Share award. The performance against the performance targets results in 100% of the shares being released as described on page 141.

• Directors are restricted from hedging their exposure to the 3i share price.

• From 1 April 2024 to 8 May 2024, Ms Halai became interested in a further 5 shares overall outright (SIP Partnership Shares) and a further 10 deferred shares (SIP Matching Shares). There were no other changes to Directors’ share

interests in that period.

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3i Group plc | Annual report and accounts 2024 144

Performance graph – TSR graph

This graph compares the Company’s total shareholder return for the 10 financial years to 31 March 2024 with the total shareholder return

of the FTSE 350 Index. The FTSE 350 Index is considered to be an appropriate comparator as it reflects both the variety of the Company’s

portfolio of international investments as well as the diverse currencies in which those investments are denominated.

3i Total shareholder return vs FTSE 350 total return over the 10 years to 31 March 2024

l 3i Group l FTSE 350 Rebased at 100 at 31 March 2014

Chief Executive’s single figure remuneration history (£’000)

l Fixed remuneration l Cash bonus l Deferred Share Award l Value of LTIP vesting at grant price l Additional LTIP value due to share price growth and dividends

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Performance table

Table of historic Chief Executive data

Year	Chief Executive	Single figure of total remuneration £’000	Percentage of maximum annual bonus paid	Percentage of maximum LTIP vesting
FY2024	S A Borrows	8,265	70.6%	100%
FY2023	S A Borrows	9,506	85.0%	100%
FY2022	S A Borrows	6,215	98.0%	100%
FY2021	S A Borrows	5,310	92.0%	71%
FY2020	S A Borrows	4,124	37.0%	91%
FY2019	S A Borrows	7,877	92.5%	100%
FY2018	S A Borrows	6,847	92.5%	100%
FY2017	S A Borrows	7,544	95.0%	100%
FY2016	S A Borrows	5,821	92.5%	98%
FY2015	S A Borrows	8,278	92.5%	91%

Relative importance of spend on pay

	FY2024	FY2023	Change %
Remuneration of all employees	£102m	£97m	5%
Dividends paid to shareholders	£541m	£485m	12%

Statement of implementation of the remuneration policy in the coming year

The table below sets out how the Committee intends to operate the remuneration policy in FY2025. As mentioned in the Chair’s letter, whilst

our Policy has delivered appropriate outcomes since the Chief Executive implemented the new strategy in 2012, the Company has changed

significantly since then in terms of portfolio structure and overall size (by NAV and market capitalisation). Therefore, over the coming year the

Committee will conduct a thorough review of this Policy to ensure that it remains aligned with the Company’s strategy and will continue to

incentivise and reward management in the medium to long term. If changes to our Policy are required we will consult with our largest

shareholders, and present any new Policy to shareholders to approve at the 2025 AGM.

Policy element	Implementation of policy during FY2025
Base salary	Base salaries for most employees will be increased by 4.5%. The 4.5% increase will also be applied to the Chief Executive and Group Finance Director. The base salary of the Chief Operating Officer will be increased to reflect development in the role. Effective from 1 July 2024, salaries for the current Executive Directors will therefore be as follows: • Chief Executive: £751,605 (4.5%) • Group Finance Director: £529,951 (4.5%) • Chief Operating Officer: £399,685 (10%)
Pension	No changes to the current arrangements are proposed for FY2025 and a pension contribution or salary supplement will be as follows: • Chief Executive: 12% of benefit salary (subject to a 3i earnings cap. FY2025: £217,241) • Group Finance Director: 12% of base salary • Chief Operating Officer: 12% of base salary Prior to 2011, Executive Directors were eligible for membership of the 3i Group Pension Plan, a defined benefit contributory scheme. Pension accrual ceased for all members with effect from 5 April 2011. Salary linkage was removed in February 2023 and replaced with a time-limited cash allowance, which the Chief Operating Officer receives, in line with other, similarly affected staff.

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Policy element	Implementation of policy during FY2025
Annual bonus	The maximum annual bonus opportunities for FY2025 will remain unchanged, in line with the remuneration policy, as follows: • Chief Executive: 400% of salary • Group Finance Director: 250% of salary • Chief Operating Officer: 225% of salary The scorecard structure and metrics have remained materially unchanged since the appointment of the Chief Executive in 2012. Following the Committee’s discussion of the appropriate FY2024 bonus it concluded that it will conduct a thorough review of the scorecard and the appropriate measures of performance for FY2025 and future years. The Company has undergone significant change since 2012, which should be reflected in the structure and metrics by which management are assessed. Details of these changes will be included in next year’s Remuneration Report. The Committee considers that the specific targets and expectations contained within the FY2025 scorecard are commercially sensitive and therefore will not be disclosed in advance. We will report to shareholders next year on performance and the resulting bonus out-turns. At least 50% of any bonus award will be deferred into shares vesting in equal instalments over four years. Awards are subject to the Company’s malus and clawback policy.
Benefits	No changes to the current arrangements are proposed for FY2025 . Benefits will continue to include a car allowance, provision of health insurance and any Share Incentive Plan matching share awards.
Long-term Incentive Plan	Awards under the Long-term Incentive Plan in FY2025 will remain unchanged and be made as follows: • Chief Executive: 400% of salary • Group Finance Director: 250% of salary • Chief Operating Officer: 225% of salary Performance will be measured over a three-year period and will be determined by the Remuneration Committee. Performance measures remain unchanged from the previous year and will be as follows: 50% of the award is based on absolute TSR measured over the performance period, and vests: • 0% vesting below 10% pa TSR; • 20% vesting at 10% pa TSR; • straight-line vesting between 10% and 18% pa TSR; and • 100% vesting at 18% pa TSR. 50% of the award is based on relative TSR measured against the FTSE 350 Index over the performance period, and vests: • 0% for below median performance against the index; • 25% for median performance against the index; • 100% for upper quartile performance against the index; and • straight-line vesting between median and upper quartile performance. Total shareholder returns are calculated based on the average closing share price over the first three months of the calendar year. Awards are subject to the Company’s malus and clawback policy. To the extent that shares vest, awards are subject to a holding period whereby they are released on or around (but not earlier than) fifth anniversary of grant. The Chief Executive, Group Finance Director and Chief Operating Officer do not participate in carried interest plans or similar arrangements.

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Policy element	Implementation of policy during FY2025
Shareholding requirements	Shareholding requirements will be as follows: • Chief Executive: 300% of salary • Group Finance Director: 200% of salary • Chief Operating Officer: 200% of salary • Non-executive Directors (including the Company Chair): 100% of base fee (cash and shares) • Executive Directors will be expected to maintain a shareholding in the Company for two years post-employment, at the lower of their shareholding at the time they leave employment and of the levels set out above. Deferred bonus awards and shares to be released under the Long-term Incentive Plan may be reduced or withheld if the post-employment shareholding targets for the Executive Directors are not met.
Non-executive Director fees	The base fees for the non-executive Directors have increased by the same percentage (4.5%) as salaries for employees. The Chair, Senior Independent Director, Committee Chair and Committee membership fees have been benchmarked against other FTSE 100 organisations and have been increased accordingly. Overall, fees remain moderately positioned relative to similar FTSE 100 companies. Fees for FY2025 will be: Chair fee: £288,000 plus £82,000 in 3i shares Non-executive Directors: Board membership base fee: £56,500 plus £17,000 in 3i shares Senior Independent Director fee:£20,000 Committee Chair:£25,000 Committee member:£10,000 Committee fees are payable in respect of the Audit and Compliance Committee, Remuneration Committee and Valuations Committee.
Malus and clawback policy	Long-term incentive awards and deferred bonus share awards made during the year to Executive Directors may be forfeited or reduced in exceptional circumstances, on such basis as the Committee considers to be fair, reasonable and proportionate, taking into account an individual’s role and responsibilities. Such exceptional circumstances include: (1) a material misstatement in the financial statements of the Company or Group or any Member of the Group; or (2) where an individual has caused, wholly or in part, a material loss for the Group as a result of: (i)  reckless, negligent or wilful actions or omissions; or (ii) inappropriate values or behaviour; (3) an error in assessing any applicable Performance Conditions or the number of shares; (4) the assessment of any applicable Performance Conditions and/or the number of shares to be released being based on inaccurate or misleading information; (5) misconduct on the part of the individual concerned; (6) a Member of the Group is censured by a regulatory body or suffers a significant detrimental impact on its reputation, provided that the Committee determines that the individual was responsible for, or had management oversight over, the actions, omissions or behaviour that gave rise to that censure or detrimental impact; or (7) the Company (or entities representing a material proportion of the Group) becomes insolvent or otherwise suffers a corporate failure so that ordinary shares in the Company cease to have material value, provided that the individual is responsible (in whole or in part) for that insolvency or failure. In exceptional circumstances (and on such basis as the Committee considers fair, reasonable and proportionate taking into account an individual’s role and responsibilities), the Group may recover amounts that have been paid or released from awards (including cash bonus awards), as long as a written request for the recovery of such sums is made in the two-year period from the date of payment or release and in circumstances where either (a) there has been a material misstatement of Group financial statements or (b) the Group suffers a material loss. In arriving at its decision, the Committee will take into consideration such evidence as it may reasonably consider relevant including as to the impact of the affected individual’s conduct, values or behaviours on the material misstatement or material loss, as the case may be.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

The Annual report on remuneration (Implementation report) continued

3i Group plc | Annual report and accounts 2024 148

Remuneration Committee advisers

The Committee appointed Deloitte LLP as advisers in 2013 and during the year they provided the Committee with external, independent

advice.

Deloitte LLP are members of the Remuneration Consultants Group and as such, voluntarily operate under the code of conduct in relation to

executive remuneration consulting in the UK. During the year, Deloitte LLP also provided 3i with certain tax advisory services. The Committee

has reviewed the advice provided during the year and is satisfied that it has been objective and independent. The total fees for advice during

the year were £50,250 (excluding VAT) (2023: £63,500 (excluding VAT)).

Result of voting at the 2023 AGM

At the 2023 AGM, shareholders approved the Remuneration report that was published in the 2023 Annual report and accounts. At the 2023

AGM, shareholders approved the Directors’ remuneration policy. The results for both of these votes are shown below:

Resolution	Votes for	Votes against	Total votes cast	Votes withheld
Approval of the Directors’ remuneration report at the 2023 AGM	717,956,004	35,957,994	753,913,998	8,479,583
	95.23%	4.77%
Approval of the Directors’ remuneration policy at the 2023 AGM	717,765,664	37,374,379	755,140,043	7,253,538
	95.05%	4.95%

Audit

The tables in this report (including the Notes thereto) on pages 138 to 149 marked as “audited” have been audited by KPMG.

By order of the Board

Coline McConville

Chair, Remuneration Committee

8 May 2024

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

The Annual report on remuneration (Implementation report) continued

3i Group plc | Annual report and accounts 2024 149

This section of the Directors’ report contains the

corporate governance statement required by FCA

Disclosure Guidance and Transparency Rule 7.2.

Corporate governance

The Corporate Governance Code to which the Company is subject

is the UK Corporate Governance Code (the “Code”) which

was published by the FRC in July 2018 and which is available on

the FRC website.

Details on the Company’s compliance with the Code and an

explanation as to why the Company has not complied throughout

the year with provision 19 of the Code in respect of Chair tenure are

set out in the Corporate Governance statement on pages 99 and 100

and in the report on the Nominations Committee’s review of Chair

tenure on page 117.

The Group’s internal control and risk management systems, including

those in relation to the financial reporting process, are described

in the Risk management section on pages 80 to 93.

Directors: independence and time commitments

Directors’ biographical details are set out on page 102. The Board

currently comprises the Chair, five non-executive Directors and three

Executive Directors. Mr D A M Hutchison (Chair), Mr S A Borrows,

Mr J G Hatchley, Ms J H Halai, Mr S W Daintith, Ms L M S Knox,

Mr P A McKellar, Ms C L McConville and Ms A Schaapveld all served

as Directors throughout the year under review.

The Board regularly considers the independence of non-executive

Directors. The Board considers all of the Company’s non-executive

Directors to be independent for the purposes of the Code. The Chair

was independent on appointment as Chair. Consideration was also

given to time commitments when Directors seek to take on any

additional external appointments and on any Director’s appointment.

	Investment policy
	The UK Listing Authority’s Listing Rules require 3i, as a closed- ended investment fund, to publish an investment policy. Shareholder approval is required for material changes to this policy. Non-material changes can be made by the Board. The current policy is set out below. No changes have been made to the policy since it was published in the Company’s 2018 Report and Accounts. • 3i is an investment company which aims to provide its shareholders with quoted access to private equity and infrastructure returns. Currently, its main focus is on making quoted and unquoted equity and/or debt investments in businesses and funds in Europe, Asia and the Americas. The geographies, economic sectors, funds and asset classes in which 3i invests continue to evolve as opportunities are identified. Proposed investments are assessed individually and all significant investments require approval from the Group’s Investment Committee. Overall investment targets are subject to periodic reviews and the investment portfolio is also reviewed to monitor exposure to specific geographies, economic sectors and asset classes. • 3i seeks to diversify risk through significant dispersion of investments by geography, economic sector, asset class and size as well as through the maturity profile of its investment portfolio.	• Although 3i does not set maximum exposure limits for asset allocations, it does have a maximum exposure limit that, save as mentioned below, no investment will be made unless its cost 1 does not exceed 15% of the investment portfolio value as shown in the last published valuation. A further investment may be made in an existing portfolio business provided the aggregate cost of that investment and of all other unrealised investments in that portfolio business does not exceed 15% of the investment portfolio value as shown in the last published valuation. A higher limit of 30% will apply to the Company’s investment in 3i Infrastructure plc. For the avoidance of doubt, 3i may retain an investment, even if its carrying value is greater than 15% or 30% (as the case may be) of the portfolio value at the time of an updated valuation. • Investments are generally funded with a mixture of debt and shareholders’ funds with a view to maximising returns to shareholders, whilst maintaining a strong capital base. 3i’s gearing depends not only on its level of debt, but also on the impact of market movements and other factors on the value of its investments. The Board takes this into account when, as required, it sets a precise maximum level of gearing. The Board has therefore set the maximum level of gearing at 150% and has set no minimum level of gearing. If the gearing ratio should exceed the 150% maximum limit, the Board will take steps to reduce the gearing ratio to below that limit as soon as practicable thereafter. 3i is committed to achieving balance sheet efficiency.
	1 Where 3i makes an investment in an existing portfolio business as part of a restructuring or reorganisation of its investment in that existing portfolio business (which restructuring or reorganisation may involve, without limitation, 3i disposing of all or part of its existing investment in the relevant portfolio business and reinvesting all or part of the proceeds into a different entity which acquires or holds the relevant portfolio business or a substantial part thereof), the cost of that investment, for the purposes of determining the maximum exposure limit under this policy, shall, to the extent that the investment does not increase 3i’s exposure to the relevant portfolio business, be deemed to be the cost of 3i’s existing investment in the relevant portfolio business (or, in the case of a partial reinvestment, the pro-rated cost of 3i’s existing investment in the relevant portfolio business) immediately prior to the restructuring or reorganisation. If 3i’s investment includes a further investment, such that 3i increases its overall exposure to the relevant portfolio business as part of the restructuring or reorganisation, the cost of any such further investment at the date of such investment shall be added to the cost of the investment in the existing portfolio business as determined pursuant to the previous sentence.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Additional statutory and corporate governance information

3i Group plc | Annual report and accounts 2024 150

Appointment and re-election of Directors

Subject to the Company’s Articles of Association, the Companies Act

and satisfactory performance evaluation, non-executive Directors are

appointed for an initial three-year term. Before the third and sixth

anniversaries of first appointment, the Director discusses with the

Board whether it is appropriate for a further three-year term to be

served.

Under the Company’s Articles of Association, the minimum number

of Directors is two and the maximum is 20, unless otherwise

determined by the Company by ordinary resolution. Directors are

appointed by ordinary resolution of shareholders or by the Board.

The Company’s Articles of Association provide for all Directors to

retire from office at every Annual General Meeting of the Company

although they may offer themselves for re-appointment by the

shareholders.

Shareholders can remove any Director by special resolution and

appoint another person to be a Director in their place by ordinary

resolution. Shareholders can also remove any Director by ordinary

resolution of which special notice has been given.

Subject to the Company’s Articles of Association, retiring Directors

are eligible for re-appointment. The office of Director is vacated

if the Director resigns, becomes bankrupt or is prohibited by law

from being a Director or where the Board so resolves following

the Director suffering from ill health or being absent from Board

meetings for 12 months without the Board’s permission.

The Board’s responsibilities and processes

The composition of the Board and its Committees, as well as

the Board’s key responsibilities and the way in which it and its

Committees work, are described on pages 97 to 149. The Board

is responsible to shareholders for the overall management of the

Group and may exercise all the powers of the Company subject

to the provisions of relevant statutes, the Company’s Articles of

Association and any directions given by special resolution of the

shareholders. The Articles of Association empower the Board

to offer, allot, grant options over or otherwise deal with or dispose

of the Company’s shares as the Board may decide.

The Companies Act 2006 authorises the Company to make market

purchases of its own shares if the purchase has first been authorised

by a resolution of the Company.

At the AGM in June 2023, shareholders renewed the Board’s

authority to allot ordinary shares and to repurchase ordinary shares

on behalf of the Company subject to certain limits. Details of the

authorities which the Board will be seeking at the 2024 AGM are

set out in the 2024 Notice of AGM.

The Board’s diversity policies in relation to Directors are described

in the Nominations Committee report on page 118 and such policies

in relation to employees are described on pages 153 and 154.

Matters reserved for the Board

The Board has approved a formal schedule of matters reserved

to it and its duly authorised Committees for decision. These include

matters such as the Group’s overall strategy, strategic plan and

annual operating budget; approval of the Company’s financial

statements and changes to accounting policies or practices; changes

to the capital structure or regulated status of the Company; major

capital projects or changes to business operations; investments

and divestments above certain limits; policy on borrowing, gearing,

hedging and treasury matters; and adequacy of internal control

systems.

Rights and restrictions attaching to shares

A summary of the rights and restrictions attaching to shares as at

31 March 2024 is set out below.

The Company’s Articles of Association may be amended by special

resolution of the shareholders in a general meeting. Holders of

ordinary shares enjoy the rights set out in the Articles of Association

of the Company and under the laws of England and Wales. Any share

may be issued with or have attached to it such rights and restrictions

as the Company by ordinary resolution or, failing such resolution,

the Board may decide.

Holders of ordinary shares are entitled to attend, speak and vote

at general meetings and to appoint proxies and, in the case of

corporations, corporate representatives to attend, speak and vote

at such meetings on their behalf. To attend and vote at a general

meeting a shareholder must be entered on the register of members

at such time (not being earlier than 48 hours before the meeting)

as stated in the Notice of general meeting. On a poll, holders

of ordinary shares are entitled to one vote for each share held.

Holders of ordinary shares are entitled to receive the Company’s

Annual report and accounts, to receive such dividends and other

distributions as may lawfully be paid or declared on such shares

and, on any liquidation of the Company, to share in the surplus assets

of the Company after satisfaction of the entitlements of the holders

of any shares with preferred rights as may then be in issue.

There are no restrictions on the transfer of fully paid shares in the

Company, save that the Board may decline to register: a transfer

of uncertificated shares in the circumstances set out in the

Uncertificated Securities Regulations 2001; a transfer to more than

four joint holders; a transfer of certificated shares which is not in

respect of only one class of share; a transfer which is not

accompanied by the certificate for the shares to which it relates;

a transfer which is not duly stamped in circumstances where a duly

stamped instrument is required; or a transfer where in accordance

with section 794 of the Companies Act 2006 a notice (under section

793 of that Act) has been served by the Company on a shareholder

who has then failed to give the information required within the

specified time.

In the latter circumstances, the Company may make the relevant

shares subject to certain restrictions (including in respect of the ability

to exercise voting rights, to transfer the shares validly and, except in

the case of a liquidation, to receive the payment of sums due from

the Company).

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Additional statutory and corporate governance information continued

3i Group plc | Annual report and accounts 2024 151

There are no shares carrying special rights with regard to control

of the Company. There are no restrictions placed on voting rights

of fully paid shares, save where in accordance with Article 12 of

the Company’s Articles of Association a restriction notice has been

served by the Company in respect of shares for failure to comply with

statutory notices or where a transfer notice (as described below) has

been served in respect of shares and has not yet been complied with.

Where shares are held on behalf of former or current employees

under employee share schemes, those participants can give

instructions to the holder of such shares as to how votes attached

to such shares should be exercised.

In the circumstances specified in Article 38 of the Company’s Articles

of Association, the Company may serve a transfer notice on holders

of shares. The relevant circumstances relate to: (a) potential tax

disadvantage to the Company, (b) the number of “United States

Residents” who own or hold shares being 75 or more, or (c) the

Company being required to be registered as an investment company

under relevant US legislation. The notice would require the transfer

of relevant shares and, pending such transfer, the rights and

privileges attaching to those shares would be suspended.

The Company is not aware of any agreements between holders

of its securities that may restrict the transfer of shares or exercise

of voting rights.

Share capital and debentures

The issued ordinary share capital of the Company as at 1 April 2023

was 973,312,950 ordinary shares and at 31 March 2024 was

973,366,445 ordinary shares of 73 19∕22 pence each. It increased

over the year by 53,495 ordinary shares on the issue of shares

to the Trustee of the 3i Group Share Incentive Plan.

At the AGM on 29 June 2023, the Directors were authorised to

repurchase up to 97,000,000 ordinary shares in the Company

(representing approximately 10% of the Company’s issued ordinary

share capital as at 8 May 2023) until the Company’s AGM in 2024 or

28 September 2024, if earlier. This authority was not exercised in the

year. Details of the authorities which the Board will be seeking at the

2024 AGM are set out in the 2024 Notice of AGM.

As at 31 March 2024, the Company had sterling and euro fixed rate

notes in issue as detailed in Note 17 to the accounts.

The Articles of Association also specifically empower the Board

to exercise the Company’s powers to borrow money and to

mortgage or charge the Company’s assets and any uncalled

capital and to issue debentures and other securities.

Portfolio management and voting policy

In relation to unquoted investments, the Group’s approach is to seek

to add value to the businesses in which the Group invests through

the Group’s extensive experience, resources and contacts and

through active engagement with the Boards of those companies.

In relation to quoted investments, the Group’s policy is to exercise

voting rights on all matters affecting its interests.

Tax and investment company status

The Company is an investment company under section 833 of

the Companies Act 2006. HM Revenue & Customs has approved

the Company as an Investment Trust under section 1158 of the

Corporation Tax Act 2010 and the Company directs its affairs

to enable it to continue to remain so approved.

Where appropriate, the Company looks to the provisions included

within the Association of Investment Companies SORP.

Major interests in ordinary shares

The table below shows notifications of major voting interests in

the Company’s ordinary share capital (notifiable in accordance with

Chapter 5 of the FCA’s Disclosure Guidance and Transparency Rules

or section 793 Companies Act 2006) which had been received

by the Company as at 31 March 2024 and 18 April 2024.

	As at 31 March 2024	% of issued share capital	As at 18 April 2024	% of issued share capital
BlackRock, Inc	104,843,078	10.77	104,462,265	10.73
Vanguard Group Inc	44,327,827	4.55	44,444,774	4.57
Invesco Asset Management Ltd	35,481,279	3.65	35,781,215	3.68
FMR LLC	34,428,051	3.54	34,485,382	3.54
J.P. Morgan	30,091,063	3.09	29,405,869	3.02

3i Investments plc

3i Investments plc is authorised by the FCA to, among other things,

manage Alternative Investment Funds (“AIFs”). It is currently the

Alternative Investment Fund Manager (“AIFM”) of seven AIFs,

including the Company and 3i Infrastructure plc. In compliance

with regulatory requirements, 3i Investments plc has ensured that

a depository has been appointed for each AIF. This is Citibank

UK Limited.

The Annual report and accounts meet certain investor disclosure

requirements as set out in FUND 3.2.2R, 3.2.3R, 3.2.5R and 3.2.6R

of the FCA’s Investment Funds sourcebook (“FUND Disclosures”)

for the Company as a standalone entity. The Company’s profit for

the year is stated in its Company statement of changes in equity

on page 159 and its financial position is shown on page 158.

The Company performs substantially all of its investment-related

activities through its subsidiaries and therefore the Group’s

Consolidated statement of comprehensive income is considered

to be more useful to investors than a Company statement.

Furthermore, in some instances the relevant FUND Disclosures

have been made in relation to the Group on a consolidated basis

rather than in respect of the Company on a solo basis. This is because

the Company operates through its Group subsidiaries and therefore

reporting on the Group’s activities provides more relevant

information on the Company and its position. There have been

no material changes to the disclosures required to be made

under FUND 3.2.2R in the past year.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Additional statutory and corporate governance information continued

3i Group plc | Annual report and accounts 2024 152

Although certain FUND Disclosures are made in this Annual report,

full disclosures are summarised on the 3i website at www.3i.com.

This will be updated as required and changes noted in future

Annual reports.

For the purposes of the FUND Disclosures set out in FUND 3.3.5(R)

(5) and (6), the total amount of remuneration paid by the AIFM to its

staff for the year to 31 March 2024 was £292 million, of which

£48 million was fixed remuneration and £244 million was variable

remuneration. The total number of beneficiaries is 242.

The aggregate total remuneration paid to AIFM Remuneration

Code Staff for the year to 31 March 2024 was £82 million, of which

£68 million was paid to senior management and £13 million was paid

to other AIFM Remuneration Code Staff. A summary of the

remuneration policy of 3i can be found on the Company’s website.

Dividends

A first FY2024 dividend of 26.50 pence per ordinary share in respect

of the year to 31 March 2024 was paid on 12 January 2024.

The Directors recommend a second FY2024 dividend of 34.50 pence

per ordinary share be paid in respect of the year to 31 March 2024

to shareholders on the Register at the close of business

on 21 June 2024.

The trustee of The 3i Group Employee Trust and the trustee

of the 2010 Carry Trust have each waived (subject to certain minor

exceptions) dividends declared on shares in the Company held

by those trusts and the trustee of The 3i Group Share Incentive

Plan has waived dividends on unallocated shares in the Company

held by it.

Directors’ conflicts of interests, external

appointments and indemnities

Directors have a statutory duty to avoid conflicts of interest with the

Company. The Company’s Articles of Association enable Directors

to approve conflicts of interest and include other conflict of interest

provisions. The Company has implemented processes to identify

potential and actual conflicts of interest. Such conflicts are then

considered for approval by the Board, subject, if necessary,

to appropriate conditions.

The Board has adopted a policy on Directors’ other appointments

under which additional external appointments should not be

undertaken without prior approval of the Board. Executive Directors

should not take on more than one non-executive directorship in

a FTSE 100 company or other significant appointment.

As permitted by the Company’s Articles of Association during the

year and as at the date of this Directors’ report, there were in place

Qualifying Third-Party Indemnity Provisions (as defined under

relevant legislation) for the benefit of the Company’s Directors

and Qualifying Pension Scheme Indemnity Provisions for the benefit

of the directors of one associated company, Gardens Pension

Trustees Limited.

Directors’ employment contracts

Mr S A Borrows, Ms J H Halai and Mr J G Hatchley each have

employment contracts with the Group with notice periods

of 12 months where notice is given by the Group and six months

where notice is given by the Director. Save for these notice periods

their employment contracts have no unexpired terms. None of

the other Directors has a service contract with the Company.

Employment

The employment policy of the Group is one of equal opportunity

in the selection, training, career development and promotion of

employees, regardless of age, gender, sexual orientation, ethnic

origin, religion and whether disabled or otherwise. Further details

on equal opportunities and diversity are included in the Sustainability

report on pages 52 to 54 and in the Nominations Committee report

on pages 118 and 119.

3i treats applicants and employees with disabilities fairly and provides

facilities, equipment and training to assist disabled employees to do

their jobs. Arrangements are made as necessary to ensure support

to job applicants who happen to be disabled and who respond

to requests to inform the Company of any requirements. Should an

employee become disabled during their employment, efforts would

be made to retain them in their current employment or to explore the

opportunities for their retraining or redeployment within 3i. Financial

support is also provided by 3i to support disabled employees who

are unable to work, as appropriate to local market conditions.

3i’s principal means of keeping in touch with the views of its

employees is through employee appraisals, informal consultations,

team briefings and employee conferences. Managers throughout 3i

have a continuing responsibility to keep their staff informed of

developments and to communicate financial results and other

matters of interest. This is achieved by structured communication

including regular meetings of employees. Members of the Board

have regular formal and informal interaction with a significant number

of 3i employees, including through office visits and one-to-one

meetings.

3i is an equal opportunities employer and has clear grievance and

disciplinary procedures in place. 3i also has an employee assistance

programme which provides a confidential, free and independent

counselling service and is available to all UK employees and their

families in the UK.

3i’s employment policies are designed to provide a competitive

reward package which will attract and retain high-quality staff, whilst

ensuring that the relevant costs remain at an appropriate level.

3i’s remuneration policy is influenced by 3i’s financial and other

performance conditions and market practices in the countries in

which it operates. All employees receive a base salary and are also

eligible to be considered for a performance-related annual variable

incentive award. For those members of staff receiving higher levels

of annual variable incentive awards, a proportion of such awards is

delivered in 3i shares, vesting over a number of years. Remuneration

policy is reviewed by the 3i Group plc Remuneration Committee,

comprising 3i Group plc non-executive Directors.

Where appropriate, employees are eligible to participate in 3i share

schemes to encourage employees’ involvement in 3i’s performance.

Investment executives in the Private Equity business line may also

participate in carried interest schemes, which allow executives to

share directly in future profits on investments. Similarly, investment

executives in the Infrastructure business line may participate in asset-

linked and/or fee-linked incentive arrangements. Employees

participate in local state or company pension schemes as

appropriate to local market conditions.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Additional statutory and corporate governance information continued

3i Group plc | Annual report and accounts 2024 153

Employees are able to raise in confidence with the Company any

matters of concern. Issues can be raised with line management, the

Internal Audit team and the Human Resources team as appropriate.

Employees can also raise matters with an externally run confidential

telephone reporting line, and can do so anonymously if they wish.

Matters raised are investigated and followed up as appropriate.

The Board monitors any matters reported to the externally run

telephone reporting line through an annual report to Audit and

Compliance Committee from Internal Audit.

Workforce engagement

The Company has a Staff Engagement strategy which has been

adopted by the Board as the most appropriate way for the Company

to comply with the relevant requirements of the Code. This is in

preference to adopting one of the three workforce engagement

examples specifically mentioned in the UK Corporate Governance

Code. The Board believes this Strategy is appropriate and

proportionate in the context of an office-based workforce with in the

region of 250 employees worldwide, all of whom engage regularly

with members of senior management. Senior management and

members of the Board meet formally and informally with staff in a

variety of contexts including office visits, investment reviews, Board

and Committee presentations and Board dinners with investment

teams. A general “open door” policy (whether physically or virtually)

adopted by senior management encourages interaction with staff.

The Human Resources team are a point of contact for all members of

staff and they, as well as line managers, report issues requiring

management attention to senior management as they occur. The

Internal Audit and Group Compliance teams consider employee

matters including culture, compliance with the Company’s values and

staff turnover in their reports to senior management. The formal

annual appraisal process provides a further opportunity for

engagement.

During the year the Board visited 3i’s Amsterdam and New York

offices and met formally and informally with the teams based there.

Directors receive updates on employee matters in presentations from

the business line heads, as well as from the Chief Human Resources

Officer, in the annual Board consideration of the Group Succession

Planning and Strategic Capability Review. Committee Chairs held a

number of private and other meetings with function heads during the

year. Non-executive Directors also meet with a wide range of

members of the investment teams at the twice-yearly PCR meetings.

Diversity and inclusion policy

Details of the Company’s approach to diversity and inclusion are set

out under the heading Employment on page 153, in the Sustainability

section on pages 52 and 55 and in the Nominations Committee

report on pages 118 and 119.

Political donations

In line with Group policy, during the year to 31 March 2024,

no donations were made to political parties or organisations,

or independent election candidates, and no political expenditure

was incurred.

Share reunification programme

The Board approved a programme to reunify shareholders with their

dormant shareholding. A tracing programme was conducted by the

Registrar to attempt to contact dormant shareholders, and where this

was not possible, the relevant shares and unpaid dividends were

forfeited in accordance with 3i’s Articles of Association. The Board

agreed that the proceeds of such forfeiture would be used for

charitable purposes. Those dormant shareholders affected by this

programme have a further six years from the point of forfeiture to

contact the Registrar to make a claim.

Significant agreements

As at 31 March 2024, the Company was party to one agreement

subject to a renegotiation period on a change of control of the

Company following a takeover bid. This agreement is a £900 million

multi-currency Revolving Credit Facility Agreement dated 13 March

2020 and as amended from time to time between the Company,

Barclays Bank PLC and a number of other banks. The Company is

required to promptly notify Barclays Bank PLC, as agent bank, of a

change of control. This opens a 20-day negotiation period to

determine if each lender is willing to continue participating in the

facility. For any lender with whom no agreement is reached, amounts

outstanding to that lender would be repayable and their

commitment cancelled, with no less than 10 business days’ notice

after the end of the negotiation period.

Internal control and risk management systems

A description of the Group’s internal control and risk management

systems in relation to the financial reporting process is set out in the

Risk management section on pages 80 to 93.

Going concern

The Directors have acknowledged their responsibilities in relation

to the financial statements for the year to 31 March 2024.

After making enquiries, the Directors considered it appropriate

to prepare the financial statements of the Company, and the Group,

on a going concern basis. The Viability statement is included

on pages 129 and 130.

Audit information

Pursuant to section 418(2) of the Companies Act 2006, each

of the Directors confirms that:

• so far as they are aware, there is no relevant audit information

of which the Company’s Auditor is unaware; and

• they have taken all steps they ought to have taken to make

themselves aware of any relevant audit information and to establish

that the Company’s Auditor is aware of such information.

Overview and strategy

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Performance and risk

Governance

Audited financial statements

Portfolio and other information

Additional statutory and corporate governance information continued

3i Group plc | Annual report and accounts 2024 154

Appointment of Auditor

In accordance with section 489 of the Companies Act 2006,

a resolution proposing the reappointment of KPMG LLP as the

Company’s Auditor will be put to members at the forthcoming AGM.

Information required by Listing Rule 9.8.4

Information required by Listing Rule 9.8.4 not included in this section

of the Directors’ report may be found as set out below:

Topic	Location
Capitalised interest	Portfolio income on page 71
Share allotments	Note 20 on page 186

Website

3i’s website provides a brief description of 3i’s history, current

operations, strategy and portfolio, as well as articles, interviews and

videos to showcase specific themes and investments. It also includes

an archive of over 10 years of news and historical financial information

on the Group and details of forthcoming events for shareholders and

analysts.

Information included in the Strategic report

In accordance with section 414 C (11) of the Companies Act 2006,

the following information otherwise required to be set out in the

Directors’ report has been included in the Strategic report: risk

management objectives and policies; post-balance sheet events;

likely future developments in the business; engagement with

suppliers, customers and others; employee involvement; and

greenhouse gas emissions. The Directors’ Viability statement

is also shown in the Resilience statement on pages 129 and 130.

Statement of Directors’ responsibilities

The Directors are responsible for preparing the Annual report

and the Group and parent Company financial statements for each

financial year in accordance with applicable United Kingdom law

and regulations. They are required to prepare the Group financial

statements in accordance with UK adopted international accounting

standards and applicable law and have elected to prepare the parent

Company financial statements on the same basis.

Under company law, the Directors must not approve the financial

statements unless they are satisfied that they give a true and fair view

of the state of affairs of the Group and parent Company and of their

profit or loss for that period. In preparing each of the Group and

parent Company financial statements, the Directors are required to:

• select suitable accounting policies and then apply them

consistently;

• make judgements and estimates that are reasonable, relevant

and reliable;

• state whether they have been prepared in accordance with UK-

adopted international accounting standards and applicable law;

• assess the Group and parent Company’s ability to continue

as a going concern, disclosing, as applicable, matters related

to going concern; and

• use the going concern basis of accounting unless they either

intend to liquidate the Group or the parent Company or to cease

operations, or have no realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting

records that are sufficient to show and explain the parent Company’s

transactions and disclose with reasonable accuracy at any time the

financial position of the parent Company and enable them to ensure

that its financial statements comply with the Companies Act 2006.

They are responsible for such internal control as they determine is

necessary to enable the preparation of financial statements that are

free from material misstatement, whether due to fraud or error, and

have general responsibility for taking such steps as are reasonably

open to them to safeguard the assets of the Group and to prevent

and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also

responsible for preparing a Strategic report, Directors’ report,

Directors’ remuneration report and Corporate governance statement

that complies with that law and those regulations.

The Directors are responsible for the maintenance and integrity of

the corporate and financial information included on the Company’s

website. Legislation in the UK governing the preparation and

dissemination of financial statements may differ from legislation

in other jurisdictions.

Responsibility statement of the Directors in respect

of the Annual financial report

The Directors confirm that to the best of their knowledge:

• the financial statements, prepared in accordance with the

applicable set of accounting standards, give a true and fair view

of the assets, liabilities, financial position and profit or loss of the

Company and the undertakings included in the consolidation

taken as a whole; and

• the Strategic report includes a fair review of the development

and performance of the business and the position of the Company

and the undertakings included in the consolidation taken

as a whole, together with a description of the principal risks

and uncertainties that they face.

The Directors consider this Annual report and accounts, taken

as a whole, is fair, balanced and understandable and provides

the information necessary for shareholders to assess the Group’s

position and performance, business model and strategy.

The Directors of the Company and their functions are listed on pages

102 and 103.

3i Group plc is registered in England with company number 1142830.

Directors’ report

For the purposes of the UK Companies Act 2006, the Directors’

report of 3i Group plc comprises the Governance section on pages

97 to 155 other than the Directors’ remuneration report on pages 136

to 149.

The Strategic report, Directors’ report and Directors’ remuneration

report have been drawn up and presented in accordance with and in

reliance upon English company law and the liabilities of the Directors

in connection with those reports shall be subject to the limitations

and restrictions provided by that law.

By order of the Board

K J Dunn

Company Secretary

8 May 2024

Registered office:

16 Palace Street

London SW1E 5JD

Overview and strategy

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Performance and risk

Governance

Audited financial statements

Portfolio and other information

Additional statutory and corporate governance information continued

3i Group plc | Annual report and accounts 2024 155

What’s in this section
Consolidated statement of comprehensive income	157
Consolidated statement of financial position	158
Consolidated statement of changes in equity	159
Consolidated cash flow statement	160
Company statement of financial position	161
Company statement of changes in equity	162
Company cash flow statement	163
Material accounting policies	164
Notes to the accounts	168
KPMG LLP’s independent auditor’s report	203

Overview and strategy Business review Sustainability Performance and risk Governance Audited financial statements Portfolio and other information

3i Group plc | Annual report and accounts 2024 156

	Notes	2024 £m	2023 £m
Realised profits over value on the disposal of investments	2	1	64
Unrealised profits on the revaluation of investments	3	2,742	1,897
Fair value movements on investment entity subsidiaries	12	861	2,112
Portfolio income
Dividends		363	229
Interest income from investment portfolio		29	29
Fees receivable	4	3	10
Foreign exchange on investments		(238)	203
Movement in the fair value of derivatives	18	116	122
Gross investment return		3,877	4,666
Fees receivable from external funds	4	72	70
Operating expenses	5	(146)	(137)
Interest receivable		9	4
Interest payable		(61)	(54)
Exchange movements		52	(6)
Income from investment entity subsidiaries		21	30
Other income/(expense)		3	(1)
Operating profit before carried interest		3,827	4,572
Carried interest
Carried interest and performance fees receivable	14	62	41
Carried interest and performance fees payable	15	(51)	(38)
Operating profit before tax		3,838	4,575
Tax charge	8	(2)	(2)
Profit for the year		3,836	4,573
Other comprehensive income that may be reclassified to the income statement
Exchange differences on translation of foreign operations		(4)	4
Other comprehensive income that will not be reclassified to the income statement
Re-measurements of defined benefit plans	26	7	8
Other comprehensive income for the year		3	12
Total comprehensive income for the year		3,839	4,585
Earnings per share
Basic (pence)	9	397.9	475.0
Diluted (pence)	9	396.7	473.8

The Notes to the accounts section forms an integral part of these financial statements.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Consolidated statement of comprehensive income for the year to 31 March

3i Group plc | Annual report and accounts 2024 157

	Notes	2024 £m	2023 £m
Assets
Non-current assets
Investments
Quoted investments	11,13	879	841
Unquoted investments	11,13	14,193	8,677
Investments in investment entity subsidiaries	12,13	5,804	7,844
Investment portfolio		20,876	17,362
Carried interest and performance fees receivable	14	3	3
Other non-current assets	16	28	30
Intangible assets		4	5
Retirement benefit surplus	26	61	53
Property, plant and equipment		4	3
Right of use asset		49	9
Derivative financial instruments	18	83	73
Total non-current assets		21,108	17,538
Current assets
Carried interest and performance fees receivable	14	45	40
Other current assets	16	47	30
Current income taxes		1	1
Derivative financial instruments	18	82	48
Cash and cash equivalents		358	162
Total current assets		533	281
Total assets		21,641	17,819
Liabilities
Non-current liabilities
Trade and other payables	19	(5)	(4)
Carried interest and performance fees payable	15	(30)	(43)
Loans and borrowings	17	(1,202)	(775)
Derivative financial instruments	18	–	(3)
Retirement benefit deficit	26	(21)	(20)
Lease liability		(45)	(5)
Deferred income taxes	8	(1)	(1)
Provisions		(2)	(4)
Total non-current liabilities		(1,306)	(855)
Current liabilities
Trade and other payables	19	(134)	(76)
Carried interest and performance fees payable	15	(24)	(34)
Derivative financial instruments	18	–	(1)
Lease liability		(4)	(5)
Current income taxes		(3)	(4)
Total current liabilities		(165)	(120)
Total liabilities		(1,471)	(975)
Net assets		20,170	16,844
Equity
Issued capital	20	719	719
Share premium		791	790
Capital redemption reserve		43	43
Share-based payment reserve	27	42	31
Translation reserve		(6)	(2)
Capital reserve		17,154	14,044
Revenue reserve		1,519	1,327
Own shares	21	(92)	(108)
Total equity		20,170	16,844

The Notes to the accounts section forms an integral part of these financial statements.

David Hutchison

Chair

8 May 2024

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Consolidated statement of financial position as at 31 March

3i Group plc | Annual report and accounts 2024 158

2024	Share capital £m	Share premium £m	Capital redemption reserve £m	Share- based payment reserve £m	Translation reserve £m	Capital reserve 1 £m	Revenue reserve 1 £m	Own shares £m	Total equity £m
Total equity at the start of the year	719	790	43	31	(2)	14,044	1,327	(108)	16,844
Profit for the year	–	–	–	–	–	3,309	527	–	3,836
Exchange differences on translation of foreign operations	–	–	–	–	(4)	–	–	–	(4)
Re-measurements of defined benefit plans	–	–	–	–	–	7	–	–	7
Total comprehensive income for the year	–	–	–	–	(4)	3,316	527	–	3,839
Share-based payments	–	–	–	27	–	–	–	–	27
Release on exercise/forfeiture of share awards	–	–	–	(16)	–	–	16	–	–
Exercise of share awards	–	–	–		–	(16)	–	16	–
Ordinary dividends	–	–	–	–	–	(190)	(351)	–	(541)
Purchase of own shares	–	–	–	–	–	–	–	–	–
Issue of ordinary shares	–	1	–	–	–	–	–	–	1
Total equity at the end of the year	719	791	43	42	(6)	17,154	1,519	(92)	20,170

1 Refer to Note 20 for the nature of the capital and revenue reserves.

2023	Share capital £m	Share premium £m	Capital redemption reserve £m	Share- based payment reserve £m	Translation reserve £m	Capital reserve 1 £m	Revenue reserve 1 £m	Own shares £m	Total equity £m
Total equity at the start of the year	719	789	43	33	(6)	10,151	1,125	(100)	12,754
Profit for the year	–	–	–	–	–	4,064	509	–	4,573
Exchange differences on translation of foreign operations	–	–	–	–	4	–	–	–	4
Re-measurements of defined benefit plans	–	–	–	–	–	8	–	–	8
Total comprehensive income for the year	–	–	–	–	4	4,072	509	–	4,585
Share-based payments	–	–	–	19	–	–	–	–	19
Release on exercise/forfeiture of share awards	–	–	–	(21)	–	–	21	–	–
Exercise of share awards	–	–	–	–	–	(22)	–	22	–
Ordinary dividends	–	–	–	–	–	(157)	(328)	–	(485)
Purchase of own shares	–	–	–	–	–	–	–	(30)	(30)
Issue of ordinary shares	–	1	–	–	–	–	–	–	1
Total equity at the end of the year	719	790	43	31	(2)	14,044	1,327	(108)	16,844

1 Refer to Note 20 for the nature of the capital and revenue reserves.

The Notes to the accounts section forms an integral part of these financial statements.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Consolidated statement of changes in equity for the year to 31 March

3i Group plc | Annual report and accounts 2024 159

	Notes	2024 £m	2023 £m
Cash flow from operating activities
Purchase of investments		(506)	(46)
Proceeds from investments		543	227
Amounts paid to investment entity subsidiaries		(674)	(535)
Amounts received from investment entity subsidiaries		580	841
Net cash flow from derivatives		69	23
Portfolio interest received		5	12
Portfolio dividends received		366	223
Portfolio fees received		12	5
Fees received from external funds		74	67
Carried interest and performance fees received	14	58	58
Carried interest and performance fees paid	15	(53)	(29)
Operating expenses paid		(121)	(128)
Co-investment loans received		5	5
Tax paid		(3)	–
Other cash income		2	–
Interest received		9	4
Net cash flow from operating activities		366	727
Cash flow from financing activities
Issue of shares		1	1
Purchase of own shares	21	–	(30)
Dividends paid	10	(541)	(485)
Repayment of long-term borrowing	17	–	(200)
Proceeds from long-term borrowing	17	422	–
Lease payments	17	(6)	(5)
Interest paid		(40)	(54)
Net cash flow from financing activities		(164)	(773)
Cash flow from investing activities
Purchases of property, plant and equipment		(3)	(1)
Net cash flow from investing activities		(3)	(1)
Change in cash and cash equivalents		199	(47)
Cash and cash equivalents at the start of the year		162	212
Effect of exchange rate fluctuations		(3)	(3)
Cash and cash equivalents at the end of the year		358	162

The Notes to the accounts section forms an integral part of these financial statements.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Consolidated cash flow statement for the year to 31 March

3i Group plc | Annual report and accounts 2024 160

	Notes	2024 £m	2023 £m
Assets
Non-current assets
Investments
Quoted investments	11,13	879	841
Unquoted investments	11,13	14,193	8,677
Investment portfolio		15,072	9,518
Carried interest and performance fees receivable	14	5	81
Interests in Group entities	23	5,877	7,867
Other non-current assets	16	16	16
Derivative financial instruments	18	83	73
Total non-current assets		21,053	17,555
Current assets
Carried interest and performance fees receivable	14	71	17
Other current assets	16	9	9
Derivative financial instruments	18	82	48
Cash and cash equivalents		328	128
Total current assets		490	202
Total assets		21,543	17,757
Liabilities
Non-current liabilities
Loans and borrowings	17	(1,202)	(775)
Derivative financial instruments	18	–	(3)
Total non-current liabilities		(1,202)	(778)
Current liabilities
Trade and other payables	19	(760)	(728)
Derivative financial instruments	18	–	(1)
Total current liabilities		(760)	(729)
Total liabilities		(1,962)	(1,507)
Net assets		19,581	16,250
Equity
Issued capital	20	719	719
Share premium		791	790
Capital redemption reserve		43	43
Share-based payment reserve	27	42	31
Capital reserve		17,685	14,563
Revenue reserve		393	212
Own shares	21	(92)	(108)
Total equity		19,581	16,250

The Company profit for the year to 31 March 2024 is £ 3,844 million (2023 : £ 4,538 million).

The Notes to the accounts section forms an integral part of these financial statements.

David Hutchison

Chair

8 May 2024

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Company statement of financial position as at 31 March

3i Group plc | Annual report and accounts 2024 161

2024	Share capital £m	Share premium £m	Capital redemption reserve £m	Share- based payment reserve £m	Capital reserve 1 £m	Revenue reserve 1 £m	Own shares £m	Total equity £m
Total equity at the start of the year	719	790	43	31	14,563	212	(108)	16,250
Profit for the year	–	–	–	–	3,328	516	–	3,844
Total comprehensive income for the year	–	–	–	–	3,328	516	–	3,844
Share-based payments	–	–	–	27	–	–	–	27
Release on exercise/forfeiture of share awards	–	–	–	(16)	–	16	–	–
Exercise of share awards	–	–	–	–	(16)	–	16	–
Ordinary dividends	–	–	–	–	(190)	(351)	–	(541)
Purchase of own shares	–	–	–	–	–	–	–	–
Issue of ordinary shares	–	1	–	–	–	–	–	1
Total equity at the end of the year	719	791	43	42	17,685	393	(92)	19,581

1 Refer to Note 20 for the nature of the capital and revenue reserves.

2023	Share capital £m	Share premium £m	Capital redemption reserve £m	Share- based payment reserve £m	Capital reserve 1 £m	Revenue reserve 1 £m	Own shares £m	Total equity £m
Total equity at the start of the year	719	789	43	33	10,577	146	(100)	12,207
Profit for the year	–	–	–	–	4,165	373	–	4,538
Total comprehensive income for the year	–	–	–	–	4,165	373	–	4,538
Share-based payments	–	–	–	19	–	–	–	19
Release on exercise/forfeiture of share awards	–	–	–	(21)	–	21	–	–
Exercise of share awards	–	–	–	–	(22)	–	22	–
Ordinary dividends	–	–	–	–	(157)	(328)	–	(485)
Purchase of own shares	–	–	–	–	–	–	(30)	(30)
Issue of ordinary shares	–	1	–	–	–	–	–	1
Total equity at the end of the year	719	790	43	31	14,563	212	(108)	16,250

1 Refer to Note 20 for the nature of the capital and revenue reserves.

The Notes to the accounts section forms an integral part of these financial statements.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Company statement of changes in equity for the year to 31 March

3i Group plc | Annual report and accounts 2024 162

	Notes	2024 £m	2023 £m
Cash flow from operating activities
Purchase of investments		(506)	(46)
Proceeds from investments		543	227
Amounts paid to subsidiaries		(1,013)	(805)
Amounts received from subsidiaries		838	1,034
Net cash flow from derivatives		69	23
Portfolio interest received		5	12
Portfolio dividends received		366	223
Portfolio fees paid		(2)	(1)
Carried interest and performance fees received	14	46	34
Co-investment loans received		5	5
Interest received		8	3
Other cash income		2	–
Net cash flow from operating activities		361	709
Cash flow from financing activities
Issue of shares		1	1
Purchase of own shares	21	–	(30)
Dividends paid	10	(541)	(485)
Repayment of long-term borrowing	17	–	(200)
Proceeds from long-term borrowing	17	422	–
Interest paid		(40)	(54)
Net cash flow from financing activities		(158)	(768)
Change in cash and cash equivalents		203	(59)
Cash and cash equivalents at the start of the year		128	188
Effect of exchange rate fluctuations		(3)	(1)
Cash and cash equivalents at the end of the year		328	128

The Notes to the accounts section forms an integral part of these financial statements.

Overview and strategy

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Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Company cash flow statement for the year to 31 March

3i Group plc | Annual report and accounts 2024 163

Reporting entity

3i Group plc (the “Company”) is a public limited company incorporated and domiciled in England and Wales . The consolidated financial

statements (“the Group accounts”) for the year to 31 March 2024 comprise of the financial statements of the Company and its consolidated

subsidiaries (collectively, “the Group”).

The Group accounts have been prepared and approved by the Directors in accordance with section 395 of the Companies Act 2006

and the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008. The Company has taken advantage

of the exemption in section 408 of the Companies Act 2006 not to present its Company statement of comprehensive income and related

Notes.

A Basis of preparation

The Group and Company accounts have been prepared and approved by the Directors in accordance with UK-adopted international

accounting standards. The financial statements are presented to the nearest million sterling (£m), the functional currency of the Company.

The following standards, amendments and interpretations have been adopted by the Group for the first time during the year. These new

standards have not had a material impact on the Group.

Effective for annual periods beginning on or after
IAS 1 and IFRS Practice Statement 2	Disclosure of Accounting Policies	1 January 2023
IFRS 17	Insurance Contracts	1 January 2023

The principal accounting policies applied in the preparation of the Group accounts are disclosed below, but where possible, they have been

shown as part of the Note to which they specifically relate in order to assist the reader’s understanding. These policies have been consistently

applied and apply to all years presented, except for in relation to the adoption of new accounting standards.

Going concern

These financial statements have been prepared on a going concern basis as disclosed in the Directors’ report. The Directors have made

an assessment of going concern for a period of at least 12 months from the date of approval of the accounts, taking into account the Group’s

current performance, financial position and the principal and emerging risks facing the business.

The Directors’ assessment of going concern, which takes into account the business model on pages 14 and 15 and the Group’s liquidity

of £1,296 million, indicates that the Group and parent company will have sufficient funds to continue as a going concern, for at least the next

12 months from the date of approval of the accounts. As detailed within the Financial review on pages 70 to 74 on the Investment basis the

Group covers its cash operating costs, £127 million at 31 March 2024, with cash income generated by our Private Equity and Infrastructure

businesses and Scandlines, £594 million at 31 March 2024. The Group’s liquidity comprises cash and deposits of £396 million (31 March 2023:

£412 million) and an undrawn multi-currency facility of £900 million (31 March 2023: £900 million), which has no financial covenants. During the

year the Group further strengthened its liquidity profile through the successful issue of a six-year €500 million bond at a coupon of 4.875% and

successfully extended the tenor of the £400 million tranche of our £900 million RCF to November 2026. Post the year end in April 2024, we

agreed the sale of nexeye, generating expected exit proceeds of c.€452 million. These exit proceeds, combined with distributions already

received, result in a 2.0x money multiple. The transaction is expected to complete in H1 FY2025.

As a proprietary investor, the Group has a long-term, responsible investment approach, and is not subject to external pressure to realise

investments before optimum value can be achieved. The Board has the ability to take certain actions to help support the Group in adverse

circumstances. Mitigating actions within management control during extended periods of low liquidity include, for example, drawing on the

existing RCF or temporarily reducing new investment levels. The Group manages liquidity with the aim of ensuring it is adequate and

sufficient, by regular monitoring of investments, realisations, operating expenses and portfolio cash income and there have been no post

balance sheet changes that would be materially detrimental to liquidity. The Directors are of the opinion that the Group’s cash flow forecast is

sufficient to support the Group given the current market, economic conditions and outlook.

Having performed the assessment on going concern, the Directors considered it appropriate to prepare the financial statements

of the Company and Group on a going concern basis, and have concluded that the Group has sufficient financial resources, is well placed

to manage business risks in the current economic environment, and can continue operations for a period of at least 12 months from the

date of issue of these financial statements.

Overview and strategy

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Performance and risk

Governance

Audited financial statements

Portfolio and other information

Material accounting policies

3i Group plc | Annual report and accounts 2024 164

B Basis of consolidation

In accordance with IFRS 10, the Company meets the criteria as an investment entity and therefore is required to recognise subsidiaries that

also qualify as investment entities at fair value through profit or loss. It does not consolidate the investment entities it controls. Subsidiaries

that provide investment-related services, such as advisory, management or employment services, are not accounted for at fair value through

profit and loss and continue to be consolidated unless those subsidiaries qualify as investment entities, in which case they are recognised at

fair value. Subsidiaries are entities controlled by the Group. Control, as defined by IFRS 10, is achieved when the Group has all of the

following:

• power over the relevant activities of the investee;

• exposure, or rights, to variable returns from its involvement with the investee; and

• the ability to affect those returns through its power over the investee.

The Group is required to determine the degree of control or influence the Group exercises and the form of any control to ensure that

the financial treatment is accurate.

Subsidiaries are fully consolidated from the date on which the Group effectively obtains control. All intragroup balances and transactions

with subsidiaries are eliminated upon consolidation. Subsidiaries are de-consolidated from the date that control ceases.

The Group comprises several different types of subsidiaries. For a new subsidiary, the Group assesses whether it qualifies as an investment

entity under IFRS 10, based on the function the entity performs within the Group. For existing subsidiaries, the Group annually reassesses the

function performed by each type of subsidiary to determine if the treatment under IFRS 10 exception from consolidation is still appropriate.

The types of subsidiaries and their treatment under IFRS 10 are as follows:

General Partners (“GPs”) – Consolidated

General Partners provide investment management services and do not hold any direct investments in portfolio assets. These entities are not

investment entities.

Investment managers/advisers – Consolidated

These entities provide investment-related services through the provision of investment management or advice. They do not hold any direct

investments in portfolio assets. These entities are not investment entities.

Holding companies of investment managers/advisers – Consolidated

These entities provide investment-related services through their subsidiaries. Typically they do not hold any direct investment in portfolio

assets and these entities are not investment entities.

Limited partnerships and other intermediate investment holding structures – Fair valued

The Group makes investments in portfolio assets through its ultimate parent company as well as through other limited partnerships and

corporate subsidiaries which the Group has created to align the interests of the investment teams with the performance of the assets through

the use of various carried interest schemes. The purpose of these limited partnerships and corporate holding vehicles, many of which also

provide investment-related services, is to invest for investment income and capital appreciation. These partnerships and corporate

subsidiaries meet the definition of an investment entity and are accounted for at fair value through profit and loss.

Portfolio investments – Fair valued

Under IFRS 10, the test for accounting subsidiaries takes wider factors of control as well as actual equity ownership into account. In accordance

with the investment entity exception, these entities have been held at fair value with movements in fair value being recognised in profit or loss.

Associates – Fair valued

Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies.

Investments that are held as part of the Group’s investment portfolio are carried in the Consolidated statement of financial position

at fair value even though the Group may have significant influence over those companies.

Further detail on our application of IFRS 10 can be found in the Reconciliation of Investment basis to IFRS section.

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3i Group plc | Annual report and accounts 2024 165

C Critical accounting judgements and estimates

The reported results of the Group are sensitive to the accounting policies, assumptions and estimates that underpin the preparation

of its financial statements. UK company law and IFRS require the Directors, in preparing the Group’s financial statements, to select suitable

accounting policies, apply them consistently and make judgements and estimates that are reasonable and prudent. The Group’s estimates

and assumptions are based on historical experience and expectation of future events and are reviewed periodically. The actual outcome

may be materially different from that anticipated.

(a) Critical judgements

In the course of preparing the financial statements, one judgement has been made in the process of applying the Group’s accounting

policies, other than those involving estimations, that has had a significant effect on the amounts recognised in the financial statements

as follows:

I. Assessment as an investment entity

The Board has concluded that the Company continues to meet the definition of an investment entity, as its strategic objective of investing

in portfolio investments and providing investment management services to investors for the purpose of generating returns in the form

of investment income and capital appreciation remains unchanged.

(b) Critical estimates

In addition to these significant judgements, the Directors have made two estimates, which they deem to have a significant risk of resulting

in a material adjustment to the amounts recognised in the financial statements within the next financial year. The details of these estimates

are as follows:

I. Fair valuation of the investment portfolio

The investment portfolio, a material group of assets of the Group, is held at fair value. Details of valuation methodologies used and

the associated sensitivities are disclosed in Note 13 Fair values of assets and liabilities in this document. Given the importance of this area,

the Board has a separate Valuations Committee to review the valuations policies, process and application to individual investments.

A report on the activities of the Valuations Committee (including a review of the assumptions made) is included in the Valuations Committee

report on pages 131 to 135.

II. Carried interest payable

Carried interest payable is calculated based on the underlying agreements, and assuming all portfolio investments are sold at their fair

values at the balance sheet date. The actual amounts of carried interest paid will depend on the cash realisations of these portfolio

investments and valuations may change significantly in the next financial year. The fair valuation of the investment portfolio is itself a critical

estimate, as detailed above. The sensitivity of carried interest payable to movements in the investment portfolio is disclosed in Note 15.

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3i Group plc | Annual report and accounts 2024 166

D Other accounting policies

(a) Gross investment return

Gross investment return is equivalent to “revenue” for the purposes of IAS 1. It represents the overall increase in net assets from

the investment portfolio net of deal-related costs and includes foreign exchange movements in respect of the investment portfolio.

The substantial majority is investment income and outside the scope of IFRS 15. It is analysed into the following components with

the relevant standard shown where appropriate:

i. Realised profits or losses over value on the disposal of investments are the difference between the fair value of the consideration

received in accordance with IFRS 13 less any directly attributable costs, on the sale of equity and the repayment of interest income from

the investment portfolio, and its carrying value at the start of the accounting period, converted into sterling using the exchange rates

in force at the date of disposal. See Note 2 for more details.

ii. Unrealised profits or losses on the revaluation of investments are the movement in the fair value of investments in accordance with IFRS 13

between the start and end of the accounting period converted into sterling using the exchange rates in force at the date of fair value

assessment. See Note 3 for more details.

iii. Fair value movements on investment entity subsidiaries are the movements in the fair value of Group subsidiaries which are classified

as investment entities under IFRS 10. The Group makes investments in portfolio assets through these entities which are usually limited

partnerships or corporate subsidiaries. See Note 12 for more details.

iv. Portfolio income is that portion of income that is directly related to the return from individual investments. It is recognised to the extent

that it is probable that there will be economic benefit and the income can be reliably measured. The following specific recognition criteria

must be met before the income is recognised:

• Dividends from equity investments are recognised in profit or loss when the shareholders’ rights to receive payment have been

established;

• Interest income from the investment portfolio is recognised as it accrues. When the fair value of an investment is assessed to be below

the principal value of a loan, the Group recognises a provision against any interest accrued from the date of the assessment going

forward until the investment is assessed to have recovered in value; and

• The accounting policy for fee income is included in Note 4.

v. Foreign exchange on investments arises on investments made in currencies that are different from the functional currency of the Company,

being sterling. Investments are translated at the exchange rate ruling at the date of the transaction in accordance with IAS 21. At each

subsequent reporting date, investments are translated to sterling at the exchange rate ruling at that date.

vi. Movement in the fair value of derivatives relates to the change in fair value of forward foreign exchange contracts which have been used

to minimise foreign currency risk in the investment portfolio. See Note 18 for more details.

(b) Foreign currency translation

For the Company and those subsidiaries and associates whose balance sheets are denominated in sterling, which is the Company’s functional

and presentational currency, monetary assets and liabilities and non-monetary assets held at fair value denominated in foreign currencies are

translated into sterling at the closing rates of exchange at the balance sheet date. Foreign currency transactions are translated into sterling at

the average rates of exchange over the year and exchange differences arising are taken to profit or loss.

The statements of financial position of subsidiaries, which are not held at fair value, denominated in foreign currencies are translated into

sterling at the closing rates. The statements of comprehensive income for these subsidiaries and associates are translated at the average rates

and exchange differences arising are taken to other comprehensive income. Such exchange differences are reclassified to profit or loss in the

period in which the subsidiary or associate is disposed of.

(c) Treasury assets and liabilities

Short-term treasury assets, and short and long-term treasury liabilities are used in order to manage cash flows.

Cash and cash equivalents comprise cash at bank and amounts held in money market funds which are readily convertible into cash and there

is an insignificant risk of changes in value. Financial assets and liabilities are recognised in the balance sheet when the relevant Group entity

becomes a party to the contractual provisions of the instrument. Derecognition occurs when rights to cash flows from a financial asset expire,

or when a liability is extinguished.

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3i Group plc | Annual report and accounts 2024 167

1 Segmental analysis

Operating segments are the components of the Group whose results are regularly reviewed by the Group’s chief operating decision maker

to make decisions about resources to be allocated to the segment and assess its performance.

The Chief Executive, who is considered to be the chief operating decision maker, managed the Group on the basis of business divisions

determined with reference to market focus, geographic focus, investment funding model and the Group’s management hierarchy.

A description of the activities, including returns generated by these divisions and the allocation of resources, is given in the Strategic report.

For the geographical segmental split, revenue information is based on the locations of the assets held. To aid the readers’ understanding

we have split out Action, Private Equity’s largest asset, into a separate column. Action is not regarded as a reported segment as the chief

operating decision maker reviews performance, makes decisions and allocates resources to the Private Equity segment, which includes Action.

The segmental information that follows is presented on the basis used by the Chief Executive to monitor the performance of the Group.

The reported segments are Private Equity, Infrastructure and Scandlines.

The segmental analysis is prepared on the Investment basis. The Investment basis is an APM and we believe it provides a more

understandable view of performance. For more information on the Investment basis and a reconciliation between the Investment basis

and IFRS, see pages 75 to 78.

Investment basis Year to 31 March 2024	Private Equity £m	Of which Action £m	Infrastructure £m	Scandlines £m	Total4 £m
Realised losses over value on the disposal of investments	–	–	(4)	–	(4)
Unrealised profits/(losses) on the revaluation of investments	3,874	3,609	72	(20)	3,926
Portfolio income
Dividends	439	377	35	25	499
Interest income from investment portfolio	80	–	11	–	91
Fees receivable	7	6	(6)	–	1
Foreign exchange on investments	(437)	(332)	(9)	(15)	(461)
Movement in the fair value of derivatives	96	58	–	20	116
Gross investment return	4,059	3,718	99	10	4,168
Fees receivable from external funds	4		68	–	72
Operating expenses	(92)		(52)	(3)	(147)
Interest receivable					13
Interest payable					(61)
Exchange movements					29
Other income					3
Operating profit before carried interest					4,077
Carried interest
Carried interest and performance fees receivable	–		62	–	62
Carried interest and performance fees payable	(262)		(43)	–	(305)
Operating profit before tax					3,834
Tax charge					(2)
Profit for the year					3,832
Other comprehensive income
Re-measurements of defined benefit plans					7
Total return					3,839
Realisations1	866	762	22	–	888
Cash investment2	(556)	(455)	(36)	(1)	(593)
Net divestment/(investment)	310	307	(14)	(1)	295
Balance sheet
Opening portfolio value at 1 April 2023	16,425	11,188	1,409	554	18,388
Investment3	683	455	36	1	720
Value disposed	(866)	(762)	(26)	–	(892)
Unrealised value movement	3,874	3,609	72	(20)	3,926
Foreign exchange (including other movements)	(487)	(332)	(3)	(16)	(506)
Closing portfolio value at 31 March 2024	19,629	14,158	1,488	519	21,636

1 Realised proceeds may differ from cash proceeds due to timing of cash receipts. During the year, Private Equity recognised £866 million of realised proceeds, of which £5 million relates to WHT.

2 Cash investment per the segmental analysis is different to cash investment per the cash flow due to a £10 million investment in Private Equity which was recognised in FY2023 and paid in FY2024.

3 Includes capitalised interest and other non-cash investment.

4 The total is the sum of Private Equity, Infrastructure and Scandlines, “Of which Action” is part of Private Equity.

Interest receivable, interest payable, exchange movements, other income, tax charge and re-measurements of defined benefit plans

are not managed by segment by the chief operating decision maker and therefore have not been allocated to a specific segment.

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3i Group plc | Annual report and accounts 2024 168

1 Segmental analysis continued

Investment basis Year to 31 March 2023	Private Equity £m	Of which Action £m	Infrastructure £m	Scandlines £m	Total4 £m
Realised profits over value on the disposal of investments	169	–	–	–	169
Unrealised profits on the revaluation of investments	3,746	3,708	23	–	3,769
Portfolio income
Dividends	345	328	33	38	416
Interest income from investment portfolio	77	–	14	–	91
Fees receivable	7	1	–	–	7
Foreign exchange on investments	493	285	16	21	530
Movement in the fair value of derivatives	129	22	–	(7)	122
Gross investment return	4,966	4,344	86	52	5,104
Fees receivable from external funds	4		66	–	70
Operating expenses	(88)		(48)	(2)	(138)
Interest receivable					4
Interest payable					(54)
Exchange movements					(29)
Other income					(1)
Operating profit before carried interest					4,956
Carried interest
Carried interest and performance fees receivable	4		37	–	41
Carried interest and performance fees payable	(392)		(26)	–	(418)
Operating profit before tax					4,579
Tax charge					(2)
Profit for the year					4,577
Other comprehensive income
Re-measurements of defined benefit plans					8
Total return					4,585
Realisations1	857	–	–	–	857
Cash investment2	(381)	(30)	(16)	–	(397)
Net divestment/(investment)	476	(30)	(16)	–	460
Balance sheet
Opening portfolio value at 1 April 2022	12,420	7,165	1,352	533	14,305
Investment3	496	30	16	–	512
Value disposed	(688)	–	–	–	(688)
Unrealised value movement	3,746	3,708	23	–	3,769
Foreign exchange (including other movements)	451	285	18	21	490
Closing portfolio value at 31 March 2023	16,425	11,188	1,409	554	18,388

1 Realised proceeds may differ from cash proceeds due to timing of cash receipts. During the year, Private Equity received £1 million and Infrastructure received £33 million of cash proceeds which were recognised as realised

proceeds in FY2022. Private Equity recognised £6 million of realised proceeds which are to be received in FY2024.

2 Cash investment per the segmental analysis is different to cash investment per the cash flow due to a £57 million syndication in Infrastructure which was recognised in FY2022 and received in FY2023 and a £10 million investment

in Private Equity which was recognised in FY2023 and is to be paid in FY2024.

3 Includes capitalised interest and other non-cash investment.

4 The total is the sum of Private Equity, Infrastructure and Scandlines, “Of which Action” is part of Private Equity.

Interest received, interest paid, exchange movements, other income, tax charge and re-measurements of defined benefit plans

are not managed by segment by the chief operating decision maker and therefore have not been allocated to a specific segment.

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3i Group plc | Annual report and accounts 2024 169

1 Segmental analysis continued

Investment basis Year to 31 March 2024	Europe1 £m	North America £m	Other £m	Total £m
Realised losses over value on the disposal of investments	(1)	(3)	–	(4)
Unrealised profits on the revaluation of investments	3,919	7	–	3,926
Portfolio income	579	12	–	591
Foreign exchange on investments	(416)	(44)	(1)	(461)
Movement in fair value of derivatives	88	28	–	116
Gross investment return	4,169	–	(1)	4,168
Realisations	865	22	1	888
Cash investment	(532)	(61)	–	(593)
Net (investment)/divestment	333	(39)	1	295
Balance sheet
Closing portfolio value at 31 March 2024	19,485	2,124	27	21,636

Investment basis Year to 31 March 2023	Europe1 £m	North America £m	Other £m	Total £m
Realised profits over value on the disposal of investments	169	–	–	169
Unrealised profits on the revaluation of investments	3,445	317	7	3,769
Portfolio income	498	16	–	514
Foreign exchange on investments	418	113	(1)	530
Movement in fair value of derivatives	22	100	–	122
Gross investment return	4,552	546	6	5,104
Realisations	525	332	–	857
Cash investment	(323)	(74)	–	(397)
Net (investment)/divestment	202	258	–	460
Balance sheet
Closing portfolio value at 31 March 2023	16,239	2,122	27	18,388

1 Includes UK.

2 Realised profits over value on the disposal of investments

	2024 Unquoted investments	Total £m
Realisations	543	543
Valuation of disposed investments	(542)	(542)
	1	1
Of which:
– profits recognised on realisations	1	1
	1	1
	2023 Unquoted investments	Total £m
Realisations	193	193
Valuation of disposed investments	(129)	(129)
	64	64
Of which:
– profits recognised on realisations	64	64
	64	64

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3i Group plc | Annual report and accounts 2024 170

3 Unrealised profits on the revaluation of investments

	2024 Unquoted investments £m	2024 Quoted investments £m	Total £m
Movement in the fair value of investments	2,704	38	2,742
Of which:
– unrealised profits	2,896	38	2,934
– unrealised losses	(192)	–	(192)
	2,704	38	2,742
	2023 Unquoted investments £m	2023 Quoted investments £m	Total £m
Movement in the fair value of investments	1,990	(93)	1,897
Of which:
– unrealised profits	2,152	–	2,152
– unrealised losses	(162)	(93)	(255)
	1,990	(93)	1,897

4 Revenue

Accounting policy:

The following items from the Consolidated statement of comprehensive income fall within the scope of IFRS 15:

Fees receivable are earned for providing services to 3i’s portfolio companies, which predominantly fall into one of two categories:

Negotiation and other transaction fees are earned for providing services relating to a specific transaction, such as when a portfolio

company is bought, sold or refinanced. These fees are generally of a fixed nature and the revenue is recognised in full at the point

of transaction completion.

Monitoring and other ongoing service fees are earned for providing a range of services to a portfolio company over a period of time.

These fees are generally of a fixed nature and the revenue is recognised evenly over the period, in line with the services provided.

Fees receivable from external funds are earned for providing management and advisory services to a variety of fund partnerships and other

entities. Fees are typically calculated as a percentage of the cost or value of the assets managed during the year and are paid quarterly,

based on the assets under management at that date. The revenue is recognised evenly over the period, in line with the services provided.

Carried interest and performance fees receivable – the accounting policy for carried interest and performance fees receivable is shown

in Note 14.

Items from the Consolidated statement of comprehensive income which fall within the scope of IFRS 15 are included in the table below:

Year to 31 March 2024	Private Equity £m	Infrastructure £m	Total £m
Total revenue by geography1
Europe2	11	120	131
North America	2	4	6
Total	13	124	137
Revenue by type
Fees receivable3	9	(6)	3
Fees receivable from external funds	4	68	72
Carried interest and performance fees receivable3	–	62	62
Total	13	124	137

1 For fees receivable from external funds and carried interest and performance fees receivable the geography is based on the domicile of the fund.

2 Includes UK.

3 Fees receivable and carried interest receivable above are different to the Investment basis figures included in Note 1 . This is due to the fact that Note 1 is disclosed on the Investment basis and the table above is shown on the IFRS

basis. For an explanation of the Investment basis and a reconciliation between Investment basis and IFRS basis see pages 75 to 78.

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3i Group plc | Annual report and accounts 2024 171

4 Revenue continued

Year to 31 March 2023	Private Equity £m	Infrastructure £m	Total £m
Total revenue by geography1
Europe2	16	101	117
North America	2	2	4
Total	18	103	121
Revenue by type
Fees receivable3	10	–	10
Fees receivable from external funds	4	66	70
Carried interest and performance fees receivable3	4	37	41
Total	18	103	121

1 For fees receivable from external funds and carried interest and performance fees receivable the geography is based on the domicile of the fund.

2 Includes UK.

3 Fees receivable and carried interest receivable above are different to the Investment basis figures included in Note 1. This is due to the fact that Note 1 is disclosed on the Investment basis and the table above is shown on the IFRS

basis. For an explanation of the Investment basis and a reconciliation between Investment basis and IFRS basis see pages 75 to 78.

Consolidated statement of financial position

As at 31 March 2024, other current assets in the Consolidated statement of financial position include balances relating to fees receivable

from portfolio and fees receivable from external funds of £5 million and £1 million respectively (31 March 2023: £4 million and £5 million

respectively). Details of the carried interest and performance fees receivable included in the Consolidated statement of financial position

are shown in Note 14. These are different to the balances included in the Investment basis Consolidated statement of financial position.

For an explanation of the Investment basis and a reconciliation between Investment basis and IFRS basis see pages 75 to 78.

5 Operating expenses

Operating expenses of £ 146 million ( 2023: £ 137 million) recognised in the IFRS Consolidated statement of comprehensive income,

include the following amounts:

	2024 £m	2023 £m
Depreciation of property, plant and equipment	2	1
Depreciation of right of use assets	5	4
Amortisation of intangible assets	1	1
Audit fees (Note 7)	3	3
Staff costs (Note 6)	102	97
Redundancy costs	2	–

Including expenses incurred in the entities accounted for as investment entity subsidiaries of £1 million ( 2023: £ 1 million), the Group’s total

operating expenses on the Investment basis for the year were £147 million ( 2023: £138 million).

6 Staff costs

The table below is prepared in accordance with Companies Act requirements, which is consistent with both the IFRS and the Investment basis.

	2024 £m	2023 £m
Wages and salaries	74	72
Social security costs	15	12
Share-based payment costs (Note 27)	9	9
Pension costs	4	4
Total staff costs	102	97

The average number of employees during the year was 246 ( 2023 : 241 ), of which 158 ( 2023: 152 ) were employed in the UK.

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3i Group plc | Annual report and accounts 2024 172

6 Staff costs continued

Wages and salaries shown above include salaries paid in the year, as well as bonuses and portfolio incentive schemes relating to the year

ended 31 March 2024 . These costs are included in operating expenses. The table below analyses these costs between fixed and variable

elements.

	2024 £m	2023 £m
Fixed staff costs	48	45
Variable staff costs1	54	52
Total staff costs	102	97

1 Includes cash bonuses and equity and cash-settled share awards.

More detail on staff costs for Directors is included in the Directors’ remuneration report on pages 136 to 149.

7 Information regarding the Group’s Auditor

During the year, the Group received the following services from its External auditor, KPMG LLP. The table below is prepared in accordance

with Companies Act requirements, which is consistent with both the IFRS and the Investment basis.

	2024 £m	2023 £m
Audit services
Statutory audit – Company	1.8	1.7
– UK subsidiaries	0.8	0.7
– Overseas subsidiaries	0.5	0.4
Total audit services	3.1	2.8
Non-audit services
Other assurance services	0.4	0.4
Total audit and non-audit services	3.5	3.2

8 Tax

Accounting policy:

Tax represents the sum of the tax currently payable, withholding taxes suffered and deferred tax. Tax is charged or credited in the

Consolidated statement of comprehensive income, except where it relates to items charged or credited directly to equity, in which

case the tax is also dealt with in equity. The tax currently payable is based on the taxable profit for the year. This may differ from the profit

included in the Consolidated statement of comprehensive income because it excludes items of income or expense that are taxable or

deductible in other years and it further excludes items that are never taxable or deductible.

The affairs of the Group’s parent company are directed so as to allow it to meet the requisite conditions to continue to operate as an

approved investment trust company for UK tax purposes. An approved investment trust company is a UK investment company which

is required to meet certain conditions set out in the UK tax rules to obtain and maintain its tax status. This approval allows certain

investment profits of the Company, broadly its capital profits, to be exempt from tax in the UK.

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. The deferred tax assets and liabilities have

been calculated using the corporation tax rate in the UK of 25% (2023: 25%).

IFRIC 23 has been applied to the recognition and measurement of uncertain tax provisions held at the year end. There were no material

uncertain tax positions arising during the year or at the year end.

The Group is within the scope of the OECD Pillar Two model rules. The United Kingdom, the jurisdiction in which the ultimate parent

company of the Group is tax resident, has enacted the Pillar Two legislation. The Group has no related current tax exposure for its year

ended 31 March 2024, as the rules will first apply to the Group’s accounting period ended 31 March 2025. The Group has applied the

exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes, as provided

in the amendments to IAS 12 issued in May 2023.

Under the Pillar Two legislation, the Group is liable to pay a top-up tax for the difference between its GloBE effective tax rate per

jurisdiction and the 15% minimum rate. The application of the legislation and calculating GloBE income to determine the quantitative

impact is complex and the Group is engaged with tax specialists to assist it with applying the legislation. The Group’s key business

operations are not based in low tax jurisdictions and the application of the Pillar Two rules is not anticipated to have a material impact on

the Group.

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3i Group plc | Annual report and accounts 2024 173

8 Tax continued

	2024 £m	2023 £m
Current taxes
Current year:
UK	3	2
Overseas	1	1
Prior year:
UK	(1)	(1)
Overseas	(1)	(1)
Deferred taxes
Current year	–	1
Total tax charge in the Consolidated statement of comprehensive income	2	2

Reconciliation of tax in the Consolidated statement of comprehensive income

The tax charge for the year is different to the standard rate of corporation tax in the UK, currently 25% ( 2023 : 19% ), and the differences are

explained below:

	2024 £m	2023 £m
Profit before tax	3,838	4,575
Profit before tax multiplied by rate of corporation tax in the UK of 25% (2023: 19%)	960	869
Effects of:
Non-taxable capital profits due to UK-approved investment trust company status	(838)	(793)
Non-taxable dividend income	(120)	(75)
	2	1
Other differences between accounting and tax profits:
Permanent differences – non-deductible items	2	4
Temporary differences on which deferred tax is not recognised	2	1
Overseas countries’ taxes	1	1
Tax losses brought forward and utilised on which deferred tax not previously provided	(3)	(3)
Prior year tax credits	(2)	(2)
Total income tax charge in the Consolidated statement of comprehensive income	2	2

Including a net tax charge of nil (2023: nil ) in investment entity subsidiaries, the Group recognised a total tax charge of £2 million (2023:

£2 million) under the Investment basis.

Deferred income taxes

	2024 £m	2023 £m
Opening deferred income tax asset/(liability)
Tax losses	1	1
Income in accounts taxable in the future	(2)	(1)
	(1)	–
Recognised through Consolidated statement of comprehensive income
Tax losses recognised	–	–
Income in accounts taxable in the future	–	(1)
	–	(1)
Closing deferred income tax asset/(liability)
Tax losses	1	1
Income in accounts taxable in the future	(2)	(2)
	(1)	(1)

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3i Group plc | Annual report and accounts 2024 174

8 Tax continued

At 31 March 2024, the Group had carried forward tax losses of £1,371 million (31 March 2023: £1,379 million), capital losses of £87 million

( 31 March 2023: £87 million) and other deductible temporary differences of £86 million (31 March 2023: £59 million). With the additional

restrictions on utilising brought forward losses introduced from 1 April 2017, and the uncertainty that the Group will generate sufficient

or relevant taxable profits not covered by the Investment Trust exemption in the foreseeable future to utilise these amounts, no deferred tax

asset has been recognised in respect of these losses. Deferred tax assets and liabilities have been calculated using the corporation tax rate

in the UK of 25% (2023: 25%).

9 Per share information

The calculation of basic net assets per share is based on the net assets and the number of shares in issue at the year end. When calculating

the diluted net assets per share, the number of shares in issue is adjusted for the effect of all dilutive share awards. Dilutive share awards

are equity awards with performance conditions attached see Note 27 Share-based payments for further details.

	2024	2023
Net assets per share (£)
Basic	20.92	17.50
Diluted	20.85	17.45
Net assets (£m)
Net assets attributable to equity holders of the Company	20,170	16,844
	2024	2023
Number of shares in issue
Ordinary shares	973,366,445	973,312,950
Own shares	(8,997,664)	(10,660,078)
	964,368,781	962,652,872
Effect of dilutive potential ordinary shares
Share awards	3,104,739	2,849,520
Diluted shares	967,473,520	965,502,392

The calculation of basic earnings per share is based on the profit attributable to shareholders and the weighted average number of shares

in issue. The weighted average shares in issue for the year to 31 March 2024 are 964,007,876 (2023: 962,674,183). When calculating the diluted

earnings per share, the weighted average number of shares in issue is adjusted for the effect of all dilutive share awards. The diluted weighted

average shares in issue for the year to 31 March 2024 are 966,901,059 (2023: 965,273,696).

	2024	2023
Earnings per share (pence)
Basic	397.9	475.0
Diluted	396.7	473.8
Earnings (£m)
Profit for the year attributable to equity holders of the Company	3,836	4,573

10 Dividends

	2024 pence per share	2024 £m	2023 pence per share	2023 £m
Declared and paid during the year
Ordinary shares
Second dividend	29.75	286	27.25	262
First dividend	26.50	255	23.25	223
	56.25	541	50.50	485
Proposed dividend	34.50	332	29.75	285

The Group introduced a simplified dividend policy in May 2018. In accordance with this policy, subject to maintaining a conservative balance

sheet approach, the Group aims to maintain or grow the dividend each year. The first dividend has been set at 50% of the prior year’s total

dividend.

The dividend can be paid out of either the capital reserve or the revenue reserve subject to the investment trust rules, see Note 20 and the

statement of changes in equity for details of reserves.

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3i Group plc | Annual report and accounts 2024 175

10 Dividends continued

The distributable reserves of the Company are £8,282 million (31 March 2023: £ 4,940 million) and the Board reviews the distributable reserves

bi-annually, including consideration of any material changes since the most recent audited accounts, ahead of proposing any dividend. The

Board also reviews the proposed dividends in the context of the requirements of being an approved investment trust. Shareholders are given

the opportunity to approve the total dividend for the year at the Company’s Annual General Meeting. Details of the Group’s continuing

viability and going concern can be found in the Risk management section.

11 Investment portfolio

Accounting policy:

Investments are recognised and derecognised on the date when their purchase or sale is subject to a relevant contract and the associated

risks and rewards have been transferred. The Group manages its investments with a view to profiting from the receipt of investment

income and capital appreciation from changes in the fair value of investments.

All investments are initially recognised at the fair value of the consideration given and are subsequently measured at fair value,

in accordance with the Group’s valuation policies.

Quoted investments are accounted for at fair value through profit and loss. Fair value is measured using the closing bid price

at the reporting date, where the investment is quoted on an active stock market.

Unquoted investments, including both equity and loans, are accounted for at fair value through profit and loss. Fair value is determined

in line with 3i’s valuation policy, which is compliant with the fair value guidelines under IFRS and the International Private Equity

and Venture Capital (“IPEV”) Valuation Guidelines, details of which are available in “Valuations Committee report” on pages 131 to 135.

Interest bearing loans accrue interest which is either settled in cash or capitalised on a regular basis and included as part of the principal

loan balance. The capitalisation of accrued interest is treated as part of investment additions during the year. If the fair value of an

investment is assessed to be below the principal value of the loan the Group recognises a fair value reduction against any interest income

accrued from the date of the assessment going forward. “Capitalisation at nil value” is the term used to describe the capitalisation of

accrued interest which has been fully provided for. These transactions are disclosed as additions to portfolio cost with an equal reduction

made where loan notes have nil value.

In accordance with IFRS 10, the proportion of the investment portfolio held by the Group’s unconsolidated subsidiaries is presented

as part of the fair value of investment entity subsidiaries, along with the fair value of their other assets and liabilities.

A reconciliation of the fair value of Investments in investment entities is included in Note 12.

	Group 2024 £m	Group 2023 £m	Company 2024 £m	Company 2023 £m
Opening fair value	9,518	6,642	9,518	6,642
Additions	3,596	908	3,596	908
– of which loan notes with nil value	(6)	(6)	(6)	(6)
Disposals, repayments and write-offs	(542)	(129)	(542)	(129)
Fair value movement1	2,742	1,897	2,742	1,897
Other movements2	(236)	206	(236)	206
Closing fair value	15,072	9,518	15,072	9,518
Quoted investments	879	841	879	841
Unquoted investments	14,193	8,677	14,193	8,677
Closing fair value	15,072	9,518	15,072	9,518

1 All fair value movements relate to assets held at the end of the year.

2 Other movements includes the impact of foreign exchange and accrued interest.

3i’s investment portfolio is made up of longer-term investments, with average holding periods greater than one year, and thus is classified

as non-current.

The table on the next page reconciles between purchase of investments in the cash flow statement and additions as disclosed in the table

above.

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3i Group plc | Annual report and accounts 2024 176

11 Investment portfolio continued

	2024 £m	2023 £m
Purchase of investments	506	46
Transfer of portfolio investments from investment entity subsidiaries1	3,068	781
Syndication	–	57
Investment (paid)/payable	(2)	2
Investment	3,572	886
Capitalised interest received by way of loan notes	24	22
Additions	3,596	908

1 Includes £2,770 million (31 March 2023: £781 million) related to Action. See Note 12 for further details.

Included within profit or loss is £29 million (2023: £29 million) of interest income. Interest income included £18 million (2023: £14 million)

of accrued income capitalised during the year noted above, £5 million (2023: £12 million) of cash income and £6 million (2023: £3 million)

of accrued income remaining uncapitalised at the year end.

Quoted investments are classified as Level 1 and unquoted investments are classified as Level 3 in the fair value hierarchy, see Note 13 for details.

12 Investments in investment entity subsidiaries

Accounting policy:

Investments in investment entity subsidiaries are accounted for as financial instruments at fair value through profit and loss in accordance

with IFRS 9.

These entities are typically limited partnerships and other intermediate investment holding structures which hold the Group’s interests

in investments in portfolio companies. The fair value can increase or decrease from either amounts paid to or received from the investment

entity subsidiaries or valuation movements in line with the Group’s valuation policy.

Substantially all of these entities meet the definition of a Fund under the IPEV guidelines and the fair value of these entities is their net asset

value.

We determine that, in the ordinary course of business, the net asset value of investment entity subsidiaries is considered to be the most

appropriate to determine fair value. At each reporting period, we consider whether any additional fair value adjustments need to be made

to the net asset value of the investment entity subsidiaries. These adjustments may be required to reflect market participants’

considerations about fair value that may include, but are not limited to, liquidity and the portfolio effect of holding multiple investments

within the investment entity subsidiary. There was no particular circumstance to indicate that a fair value adjustment was required (31 March

2023 : no adjustment required) and, after due consideration, we concluded that the net asset values were the most appropriate reflection

of fair value at 31 March 2024.

Level 3 fair value reconciliation – investments in investment entity subsidia ries

Non-current	Group 2024 £m	Group 2023 £m
Opening fair value	7,844	6,791
Amounts paid to investment entity subsidiaries	674	535
Amounts received from investment entity subsidiaries	(580)	(841)
Fair value movements on investment entity subsidiaries	861	2,112
Transfer of portfolio investments from investment entity subsidiaries	(3,068)	(781)
Transfer of assets to investment entity subsidiaries	73	28
Closing fair value	5,804	7,844

Transfer of portfolio investments from investment entity subsidiaries includes the transfer of investment portfolio between investment entity

subsidiaries and the Company at fair value. The consideration for these transfers can either be cash or intra-group receivables. During the year

the Company received a transfer of assets of £3,068 million (31 March 2023: £781 million) from partnerships which are classified as investment

entity subsidiaries, of which £2,770 million (31 March 2023: £781 million) related to Action.

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3i Group plc | Annual report and accounts 2024 177

12 Investments in investment entity subsidiaries continued

Restrictions

3i Group plc, the ultimate parent company, receives dividend income from its subsidiaries. There is £21 million (31 March 2023: £225 million) of

restrictive cash held in investment entity subsidiaries relating to carried interest and performance fees payable.

Support

3i Group plc continues to provide, where necessary, ongoing support to its investment entity subsidiaries for the purchase of portfolio

investments. The Group’s current commitments are disclosed in Note 24.

13 Fair values of assets and liabilities

Accounting policy:

Financial instruments are initially classified at either amortised cost or fair value through profit or loss. Financial instruments classified at fair

value through profit or loss are subsequently measured at fair value with gains and losses arising from changes in fair value recognised

in profit or loss in the Statement of comprehensive income. Financial instruments classified at amortised cost are subsequently measured

at amortised cost using the effective interest method with interest income or expense and foreign exchange gains and losses recognised

in profit or loss in the Statement of comprehensive income.

(A) Cla ssification

The following tables analyse the Group’s assets and liabilities in accordance with the categories of financial instruments in IFRS 9:

	Group 2024 Classified at fair value through profit and loss £m	Group 2024 Other financial instruments at amortised cost £m	Group 2024 Total £m	Group 2023 Classified at fair value through profit and loss £m	Group 2023 Other financial instruments at amortised cost £m	Group 2023 Total £m
Assets
Quoted investments	879	–	879	841	–	841
Unquoted investments	14,193	–	14,193	8,677	–	8,677
Investments in investment entities	5,804	–	5,804	7,844	–	7,844
Other financial assets	182	106	288	142	82	224
Total	21,058	106	21,164	17,504	82	17,586
Liabilities
Loans and borrowings	–	1,202	1,202	–	775	775
Other financial liabilities	–	242	242	4	167	171
Total	–	1,444	1,444	4	942	946

	Company 2024 Classified at fair value through profit and loss £m	Company 2024 Other financial instruments at amortised cost £m	Company 2024 Total £m	Company 2023 Classified at fair value through profit and loss £m	Company 2023 Other financial instruments at amortised cost £m	Company 2023 Total £m
Assets
Quoted investments	879	–	879	841	–	841
Unquoted investments	14,193	–	14,193	8,677	–	8,677
Other financial assets	170	96	266	131	113	244
Total	15,242	96	15,338	9,649	113	9,762
Liabilities
Loans and borrowings	–	1,202	1,202	–	775	775
Other financial liabilities	–	760	760	4	728	732
Total	–	1,962	1,962	4	1,503	1,507

Within the Company, Interests in Group entities of £ 5,877 million ( 31 March 2023 : £7,867 million) includes £ 5,862 million ( 31 March 2023:

£7,845  million) held at fair value and £ 15 million (31 March 2023: £22 million) held at cost less impairment.

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3i Group plc | Annual report and accounts 2024 178

13 Fair values of assets and liabilities continued

(B) Valuation

The fair values of the Group’s financial assets and liabilities not held at fair value, are not materially different from their carrying values, with

the exception of loans and borrowings. The fair value of the loans and borrowings is £ 1,166 million (31 March 2023: £686 million), determined

with reference to their published market prices. The carrying value of the loans and borrowings is £1,202 million (31 March 2023: £775 million)

and accrued interest payable (included within trade and other payables) is £29 million (31 March 2023: £12 million).

Valuation hierarchy

The Group classifies financial instruments measured at fair value according to the following hierarchy:

Level	Fair value input description	Financial instruments
Level 1	Quoted prices (unadjusted) from active markets	Quoted equity instruments
Level 2	Inputs other than quoted prices included in Level 1 that are observable either directly (ie as prices) or indirectly (ie derived from prices)	Derivative financial instruments
Level 3	Inputs that are not based on observable market data	Unquoted investments

Unquoted equity instruments and debt instruments are measured in accordance with the IPEV Guidelines with reference to the most

appropriate information available at the time of measurement. Further information regarding the valuation of unquoted equity instruments

can be found on page 181.

The table below shows the classification of financial instruments held at fair value into the valuation hierarchy at 31 March 2024:

	Group 2024 Level 1 £m	Group 2024 Level 2 £m	Group 2024 Level 3 £m	Group 2024 Total £m	Group 2023 Level 1 £m	Group 2023 Level 2 £m	Group 2023 Level 3 £m	Group 2023 Total £m
Assets
Quoted investments	879	–	–	879	841	–	–	841
Unquoted investments	–	–	14,193	14,193	–	–	8,677	8,677
Investments in investment entity subsidiaries	–	–	5,804	5,804	–	–	7,844	7,844
Other financial assets	–	165	17	182	–	121	21	142
Liabilities
Other financial liabilities	–	–	–	–	–	(4)	–	(4)
Total	879	165	20,014	21,058	841	117	16,542	17,500

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3i Group plc | Annual report and accounts 2024 179

13 Fair values of assets and liabilities continued

We determine that, in the ordinary course of business, the net asset value of an investment entity subsidiary is considered to be the

most appropriate to determine fair value. The underlying portfolio is valued under the same methodology as directly held investments,

with any other assets or liabilities within investment entity subsidiaries fair valued in accordance with the Group’s accounting policies.

Note 12 details the Directors’ considerations about the fair value of the underlying investment entity subsidiaries.

Movements in the directly held investment portfolio categorised as Level 3 during the year are set out in the table below:

	Group 2024 £m	Group 2023 £m	Company 2024 £m	Company 2023 £m
Opening fair value	8,677	5,708	8,677	5,708
Additions3	3,596	908	3,596	908
– of which loan notes with nil value	(6)	(6)	(6)	(6)
Disposals, repayments and write-offs	(542)	(129)	(542)	(129)
Fair value movement1	2,704	1,990	2,704	1,990
Other movements2	(236)	206	(236)	206
Closing fair value	14,193	8,677	14,193	8,677

1All fair value movements relate to assets held at the end of the year.

2Other movements include the impact of foreign exchange and accrued interest.

3 The table in Note 11 reconciles additions.

Unquoted investments valued using Level 3 inputs also had the following impact on profit and loss: realised profits over value on disposal

of investments of £1 million (2023: £64 million), dividend income of £332 million (2023: £200 million) and foreign exchange losses of

£238 million (2023: gains of £203 million).

Assets move between Level 1 and Level 3 when an unquoted equity investment lists on a quoted market exchange. There were no transfers

in or out of Level 3 during the year. In the 12 months to 31 March 2024, four assets changed valuation basis within Level 3. One asset moved

from an other basis valuation to a DCF basis valuation, two assets moved from an earnings-based valuation to an other basis valuation and

one asset moved from an earnings-based valuation to an imminent sale basis. The changes in valuation methodology in the period reflect our

view of the most appropriate method to determine the fair value of the four assets at 31 March 2024. Further information can be found in the

Private Equity and Infrastructure sections of the Business and Financial reviews starting on page 20.

The following table summarises the various valuation methodologies used by the Group to fair value Level 3 instruments, the inputs and the

sensitivities applied and the impact of those sensitivities to the unobservable inputs. Overall, our portfolio companies have delivered a resilient

performance, despite persistent global macro-economic headwinds. Higher interest rates, inflation and low consumer confidence, caused in

part by geopolitical uncertainty, have been important considerations in our portfolio valuations at 31 March 2024. As part of our case-by-case

review of our portfolio companies the risks and opportunities from climate change are an important consideration in the overall discussion on

fair value. These risks are adequately captured in the multiple sensitivity. All numbers in the table below are on an Investment basis.

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3i Group plc | Annual report and accounts 2024 180

13 Fair values of assets and liabilities continued

Level 3 unquoted investments

Methodology	Description	Inputs	Fair value at 31 March 2024 (£m)	Sensitivity on key unobservable input	Fair value impact of sensitivities (£m) +5%/-5%
Earnings (Private Equity)	Most commonly used Private Equity valuation methodology. Used for investments which are typically profitable and for which we can determine a set of listed companies and precedent transactions, where relevant, with similar characteristics	Earnings multiples are applied to the earnings of the Company to determine the enterprise value Earnings multiples When selecting earnings multiples, we consider: (1) Comparable listed companies current performance and through-the-cycle averages (2) Relevant market transaction multiples (3) Company performance, organic growth and value-accretive add-ons, if any (4) Exit expectations and other company specific factors For point 1 and 2 of the above we select companies in the same industry and, where possible, with a similar business model and profile in terms of size, products, services and customers, growth rates and geographic focus The pre-discount multiple ranges from 7.5x - 20.0 x (2023 : 6.4x - 20.0 x) Other inputs: Earnings Reported earnings are adjusted for non- recurring items, such as restructuring expenses, for significant corporate actions and, in exceptional cases, adjustments to arrive at maintainable earnings The most common measure is earnings before interest, tax, depreciation and amortisation (“EBITDA”) Earnings are usually obtained from portfolio company management accounts to the preceding quarter end, with reference also to forecast earnings and the maintainable view of earnings Action, our largest asset, is valued using run-rate earnings	18,916 ( 2023 : 16,109 )	For the assets valued on an earnings basis, we have applied a 5% sensitivity to the earnings multiple Action is our largest asset, and we have included a 5% sensitivity on Action’s earnings multiple of 19.5x (equivalent to 18.5 x net)	1,103 ( 2023 : 928 ) (1,104) ( 2023: (930)) 801 ( 2023 : 618) (801) ( 2023 : (619) )
Discounted cash flow (Private Equity/ Infrastructure/ Scandlines)	Appropriate for businesses with long- term stable cash flows, typically in Infrastructure or, alternatively, businesses where DCF is more appropriate in the short term	Long-term cash flows are discounted at a rate which is benchmarked against market data, where possible, or adjusted from the rate at the initial investment based on changes in the risk profile of the investment The range of discount rates used in our DCF valuations is 10.5% to 16.9 % (2023 : 10.5% to 16.9%). An outlier has been excluded from the range.	1,047 ( 2023 : 1,024 )	For the assets valued on a DCF basis, we have applied a 5% sensitivity to the discount rate	(34) ( 2023 : (37) ) 36 ( 2023: 39)
NAV (Private Equity/ Infrastructure)	Used for investments in unlisted funds	Net asset value reported by the fund manager. The valuation of the underlying portfolio is consistent with IFRS	104 ( 2023 : 97 )	A 5% increase on closing NAV	5 ( 2023 : 5 )
Imminent sale (Private Equity)	Used for assets where a sale has been agreed	A 2.5% discount is applied to expected proceeds	377 (2023: –)	n/a	n/a
Other (Private Equity/ Infrastructure)	Used where elements of a business are valued on different bases	Values of separate elements prepared on or triangulated against one of the methodologies listed above	246 ( 2023 : 196 )	A 5% increase in the closing value	12 ( 2023 : 10 )

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3i Group plc | Annual report and accounts 2024 181

14 Carried interest and performance fees receivable

Accounting policy:

The Group earns a share of profits (“carried interest receivable”) from funds which it manages on behalf of third parties. These profits

are earned when the funds meet certain performance conditions and are paid by the fund when these conditions have been met on a cash

basis. In certain limited circumstances the carried interest received may be subject to clawback provisions if the performance of the fund

deteriorates materially following carried interest being paid.

Carried interest receivable

The carried interest receivable recognised at the balance sheet date is calculated based on the valuation of the remaining portfolio assets

in the fund at that date, discounted to reflect the estimated realisation dates. Following initial recognition, carried interest receivable

is accounted for under the amortised cost method in accordance with IFRS 9.

This includes the requirement to calculate expected credit losses at inception. Given that carried interest is received from a small number

of entities which are managed by the Group and are paid shortly following receipt of the proceeds or finalisation of the calculation which

causes the payments to become due, the expected credit losses for these receivables are expected to be negligible.

Performance fees receivable

The Group earns performance fees from the investment management services it provides to 3i Infrastructure plc (“3iN”) when 3iN’s total

return for the year exceeds a specified threshold. These fees are calculated on an annual basis and paid in three equal instalments over

three years. The second and third instalments will only be recognised and received if either: (a) 3iN’s performance in the year in which the

instalment is paid also triggers payment of a performance fee in respect of that year, or (b) if 3iN’s performance over the three years

starting with the year in which the performance fee is earned exceeds a specified threshold.

The Group also earns performance fees from the investment management services it provides to certain other funds when the net asset

value of the fund exceeds the performance threshold. These fees are calculated on an annual basis, and are recognised and paid at the

end of successive five-year performance periods. The first five-year performance period ended on 31 March 2024. In accordance with IFRS

15, revenue from performance fees is recognised when it is sufficiently certain that there will not be a significant reversal, which is usually at

the end of the relevant financial year or performance period, when the calculation is finalised and agreed.

Following initial recognition, performance fees receivable are accounted for under the amortised cost method in accordance with IFRS 9.

This includes the requirement to calculate expected credit losses at inception. Given that performance fees are received from a small

number of entities which are managed by the Group and are paid shortly following receipt of the proceeds or finalisation of the calculation

which causes the payments to become due, the expected credit losses for these receivables are expected to be negligible.

	Group 2024 Carried interest receivable £m	Group 2024 Performance fees receivable £m	Group 2024 Total £m	Group 2023 Carried interest receivable £m	Group 2023 Performance fees receivable £m	Group 2023 Total £m
Opening carried interest and performance fees receivable	6	37	43	9	51	60
Carried interest and performance fees receivable recognised in profit and loss during the year1	–	62	62	4	37	41
Received in the year1	–	(58)	(58)	(7)	(51)	(58)
Other movements2	–	1	1	–	–	–
Closing carried interest and performance fees receivable	6	42	48	6	37	43
Of which: receivable in greater than one year	3	–	3	3	–	3

1 Includes £21 million (2023: nil) of performance fees received from the sale of Attero.

2Other movements include the impact of foreign exchange.

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3i Group plc | Annual report and accounts 2024 182

14 Carried interest and performance fees receivable continued

	Company 2024 Carried interest receivable £m	Company 2024 Performance fees receivable £m	Company 2024 Total £m	Company 2023 Carried interest receivable £m	Company 2023 Performance fees receivable £m	Company 2023 Total £m
Opening carried interest and performance fees receivable	98	–	98	63	25	88
Carried interest and performance fees receivable recognised in profit and loss during the year	25	–	25	42	–	42
Received in the year	(46)	–	(46)	(9)	(25)	(34)
Other movements1	(1)	–	(1)	2	–	2
Closing carried interest and performance fees receivable	76	–	76	98	–	98
Of which: receivable in greater than one year	5	–	5	81	–	81

1 Other movements include the impact of foreign exchange.

The closing carried interest receivable balance above is calculated using the fair value of the assets in the relevant funds at the balance sheet

date. The carried interest receivable recognised in profit and loss during the year predominantly relates to changes in the fair value of the

investments in the relevant funds.

As explained in the accounting policy above, no expected credit losses have been recognised for carried interest and performance fees

receivable as these are deemed to be negligible.

15 Carried interest and performance fees payable

Accounting policy:

The Group offers investment executives the opportunity to participate in the returns from investments subject to certain performance

conditions. “Carried interest and performance fees payable” is the term used for amounts payable to executives on these investment-

related transactions.

A variety of asset pooling arrangements are in place so that participants may have an interest in one or more carried interest plans and

participants include current and former investment participants. Carried interest payable is accrued if its performance conditions, measured

at the balance sheet date, would be achieved if the remaining assets in that plan were realised at fair value. An accrual is made equal to the

participants’ share of profits in excess of the performance conditions in place in the carried interest plan, discounted to reflect the likely

actual cash payment date, which may be materially later than the time of the accrual.

The Infrastructure performance fee payable is accrued based on the expected award. A significant proportion of the amount awarded

is deferred over time and may be granted in 3i Group plc shares. This is recognised over the vesting period in line with the requirements

of IFRS 2 or IAS 19, depending on the type of award.

Under IFRS 10, where carried interest payable reduces the fair value of an investment entity subsidiary, that movement is recorded through

“Fair value movements on investment entity subsidiaries”. At 31 March 2024, £764 million of carried interest payable was recognised in the

Consolidated statement of financial position of these investment entity subsidiaries (31 March 2023: £1,274 million).

	Group 2024 £m	Group 2023 £m
Opening carried interest and performance fees payable	77	77
Carried interest and performance fees payable recognised in profit and loss during the year	51	38
Cash paid in the year	(53)	(29)
Other movements1	(21)	(9)
Closing carried interest and performance fees payable	54	77
Of which: payable in greater than one year	30	43

1 Other movements include the impact of foreign exchange and a transfer from trade and other payables.

The carry payable expense in the table above includes a £23 million (2023 : £ 13 million) charge arising from Infrastructure share-based payment

carry related schemes. The charge includes £16 million ( 2023: £10 million) of equity awards and £1 million ( 2023: nil ) of cash-settled awards,

see Note 27 Share-based payments for further details and £6 million (2023: £ 3 million) of social security cost.

A 5% increase in the valuation of all individual assets in the underlying investment portfolio held by investment entity subsidiaries would result

in a £41 million increase in carried interest and performance fees payable ( 31 March 2023: £60 million).

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3i Group plc | Annual report and accounts 2024 183

15 Carried interest and performance fees payable continued

A 5% decrease in the valuation of all individual assets in the underlying investment portfolio held by investment entity subsidiaries would result

in a £41 million decrease in carried interest and performance fees payable (31 March 2023: £60 million).

16 Other assets

Accounting policy:

Assets, other than those specifically accounted for under a separate policy, are stated at their cost less impairment losses. Financial assets

are recognised at amortised cost in accordance with IFRS 9, which includes the requirement to calculate expected credit losses (“ECLs”)

on initial recognition. Any ECLs are recognised directly in profit and loss, with any subsequent reversals recognised in the same location.

	Group 2024 £m	Group 2023 £m	Company 2024 £m	Company 2023 £m
Prepayments	4	3	–	–
Other debtors	71	51	25	25
Proceeds/syndication receivable	–	6	–	–
Total other assets	75	60	25	25
Of which: receivable in greater than one year	28	30	16	16

At 31 March 2024, no ECLs have been recognised against other assets as they are negligible (31 March 2023: nil).

17 Loans and borrowings

Accounting policy:

All loans and borrowings are initially recognised at the fair value of the consideration received. After initial recognition, these are

subsequently measured at amortised cost using the effective interest method, which is the rate that exactly discounts the estimated

future cash flows through the expected life of the liabilities. Financial liabilities are derecognised when they are extinguished.

	Group 2024 £m	Group 2023 £m
Loans and borrowings are repayable as follows:
Within one year	–	–
Between the second and fifth year	–	–
After five years	1,202	775
	1,202	775

Principal borrowings include:

	Rate	Maturity	Group 2024 £m	Group 2023 £m	Company 2024 £m	Company 2023 £m
Fixed rate
€500 million notes (public issue)	4.875%	2029	427	–	427	–
£375 million notes (public issue)	5.750%	2032	375	375	375	375
£400 million notes (public issue)	3.750%	2040	400	400	400	400
			1,202	775	1,202	775
Committed multi-currency facilities: Revolving Credit Facility (RCF)
£400 million tranche	SONIA+0.75%	2026	–	–	–	–
£500 million tranche	SONIA+0.50%	2027	–	–	–	–
Total loans and borrowings			1,202	775	1,202	775

During the year, the Company issued a €500 million maturity bond with a maturity date of June 2029 and extended its £400 million multi-

currency facility to November 2026. The syndicated multi-currency facility of £900 million has no financial covenants.

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3i Group plc | Annual report and accounts 2024 184

17 Loans and borrowings continued

All of the Group’s borrowings are repayable in one instalment on the respective maturity dates. None of the Group’s interest-bearing loans

and borrowings are secured on the assets of the Group. The fair value of the loans and borrowings is £1,166 million (31 March 2023: £686

million), determined with reference to their published market prices. The interest payable for loans and borrowings recognised within profit

and loss is £60 million (2023 : £53 million) and the interest paid for loans and borrowings recognised within the Consolidated cash flow

statement is £40 million (2023: £54 million).

In accordance with the FCA’s Investment Funds sourcebook (FUNDS 3.2.2R and Fund 3.2.6R), 3i Investments plc, as AIFM of the Company,

is required to calculate leverage and disclose this to investors. The leverage is calculated using the gross method and commitment method.

Gross method calculates the overall exposure over the net asset value whereas the commitment method calculates the net exposure over

the net asset value. Leverage at 31 March 2024 for the Group is 118% (31 March 2023: 121%) and the Company is 116% (31 March 2023: 117% )

under both the gross method and the commitment method. The leverage for 3i Investments plc at 31 March 2024 is 100% (31 March 2023:

100% ) under both the gross method and the commitment method.

Under the Securities Financing Transactions Regulation and the FCA’s Investment Funds sourcebook (FUNDS 3.2.4A), 3i is required to disclose

certain information relating to the use of securities financing transactions (“SFTs”) and total return swaps. At 31 March 2024, 3i was not party

to any transactions involving SFTs or total return swaps.

Reconciliation of liabilities arising from financing activities

The changes in the Group’s liabilities arising from financing activities are classified as follows:

	Loans and borrowings 2024 £m	Lease liability 2024 £m	Loans and borrowings 2023 £m	Lease liability 2023 £m
Opening liability	775	10	975	14
Additions	422	44	–	1
Interest	–	1	–	–
Repayments	–	(6)	(200)	(5)
Exchange movements	5	–	–	–
Closing liability	1,202	49	775	10

18 Derivatives

Accounting policy:

Derivative financial instruments are accounted for at fair value through profit and loss in accordance with IFRS 9. They are revalued at the

balance sheet date based on market prices, with any change in fair value being recorded in profit and loss. Derivatives are recognised in

the Consolidated statement of financial position as a financial asset when their fair value is positive and as a financial liability when their fair

value is negative. Derivative contracts are disclosed in the Consolidated statement of financial position as either current or non-current

according to there maturity profile. The Group’s derivative financial instruments are not designated as hedging instruments.

Statement of comprehensive income	Group 2024 £m	Group 2023 £m	Company 2024 £m	Company 2023 £m
Movement in the fair value of derivatives	116	122	116	122

Statement of financial position	Group 2024 £m	Group 2023 £m	Company 2024 £m	Company 2023 £m
Non-current assets
Forward foreign exchange contracts	83	73	83	73
Current assets
Forward foreign exchange contracts	82	48	82	48
Non-current liabilities
Forward foreign exchange contracts	–	(3)	–	(3)
Current liabilities
Forward foreign exchange contracts	–	(1)	–	(1)

The Group uses forward foreign exchange contracts to mitigate the effect of fluctuations arising from movements in exchange rates in the

value of the Group’s investments in euro and US dollar. As at 31 March 2024 , the notional amount of these forward foreign exchange contracts

held by the Company was € 2.6 billion ( 31 March 2023: € 2.6 billion) and $1.2 billion (31 March 2023 : $ 1.2 billion).

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3i Group plc | Annual report and accounts 2024 185

19 Trade and other payables

Accounting policy:

Liabilities, other than those specifically accounted for under a separate policy, are stated based on the amounts which are considered

to be payable in respect of goods or services received up to the balance sheet date. Financial liabilities are recognised at amortised cost

in accordance with IFRS 9.

	Group 2024 £m	Group 2023 £m	Company 2024 £m	Company 2023 £m
Trade and other payables	139	80	29	11
Amounts due to subsidiaries	–	–	731	717
Total trade and other payables	139	80	760	728
Of which: payable in greater than one year	5	4	–	–

20 Issued capital and reserves

Accounting policy:

Ordinary shares issued by the Group are recognised at the proceeds or fair value received with the excess of the amount received over

nominal value being credited to the share premium account. Direct issue costs net of tax are deducted from equity.

Capital reserve recognises all profits and losses that are capital in nature or have been allocated to capital, which include the accumulation

of investment gains and losses as well as changes to the value of financial instruments measured at fair value through profit and loss.

Revenue reserve recognises all profits and losses that are revenue in nature or have been allocated to revenue and is the accumulation

of revenue profits and losses.

Issued and fully paid	2024 Number	2024 £m	2023 Number	2023 £m
Ordinary shares of 7319 ∕ 22p
Opening balance	973,312,950	719	973,238,638	719
Issued under employee share plans	53,495	–	74,312	–
Closing balance	973,366,445	719	973,312,950	719

The Company issued 53,495 ordinary shares to the Trustee of the 3i Group Share Incentive Plan for a total cash consideration of £1,137,723

at various prices from 1,729 pence to 2,805 pence per share (being the market prices on the issue dates which were the last trading day

of each month in the year, with the exception of December 2023, when the issue date was 4 January 2024 ). These shares were ordinary shares

with no additional rights attached to them and had a total nominal value of £39,513 .

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3i Group plc | Annual report and accounts 2024 186

21 Own shares

Accounting policy:

Own shares are recorded by the Group when ordinary shares are acquired by the Company or by The 3i Group Employee Benefit Trust.

Own shares are deducted from shareholders’ equity. A transfer is made to retained earnings at their weighted average cost in line with the

vesting of own shares held for the purposes of share-based payments. The number of own shares held by the Trust and the schemes are

described in Note 27 .

	Group 2024 £m	Group 2023 £m	Company 2024 £m	Company 2023 £m
Opening cost	108	100	108	100
Additions	–	30	–	30
Awards granted	(16)	(22)	(16)	(22)
Closing cost	92	108	92	108

During the year to 31 March 2024, The 3i Group Employee Benefit Trust did not acquire any shares. During the year to 31 March 2023, the

trust acquired 2.4 million shares at an average price of 1,271 pence per share.

22 Capital structure

The capital structure of the Group consists of shareholders’ equity and net debt or cash. The type and maturity of the Group’s borrowings are

analysed further in Note 17. Capital is managed with the objective of maximising long-term return to shareholders, whilst maintaining a capital

base to allow the Group to operate effectively in the market and sustain the future development of the business.

	Group 2024 £m	Group 2023 £m	Company 2024 £m	Company 2023 £m
Cash and deposits	358	162	328	128
Borrowings and derivative financial liabilities	(1,202)	(779)	(1,202)	(779)
Net debt1	(844)	(617)	(874)	(651)
Total equity	20,170	16,844	19,581	16,250
Gearing (net debt/total equity)	4%	4%	4%	4%

1 The above numbers have been prepared under IFRS and differ from the Investment basis as detailed in the Strategic report.

Capital constraints

The Group is generally free to transfer capital from subsidiary undertakings to the parent company, subject to maintaining each subsidiary

with sufficient reserves to meet local statutory/regulatory obligations. No significant constraints (other than those disclosed in Note 12) have

been identified and the Group has been able to distribute profits as appropriate.

The Group has been subject to the FCA’s MIFIDPRU sourcebook (“MIFIDPRU”) since 1 January 2022. The regulatory capital requirements for

the Group and 3i Investments plc, an investment firm regulated by the FCA, are calculated in accordance with MIFIDPRU 2.5, 4.3, 4.5 and 4.6.

These capital requirements are reviewed regularly by the Group’s Audit and Compliance Committee, and the Board of 3i Investments plc,

respectively. In addition, 3i Investments plc prepares an Internal Capital and Risk Assessment (“ICARA”), which is approved by the Board of

3i Investments plc on an annual basis.

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3i Group plc | Annual report and accounts 2024 187

23 Interests in Group entities

Accounting policy:

The Company has controlling equity interests in, and makes loans to, both consolidated and fair valued Group entities. Equity investments

in, and loans to, investment entities are held at fair value in the Company’s accounts, as this reflects the Group’s business model to hold

assets to seek returns on capital and not contractual cash flow. The net assets of these entities represent fair value. Equity investments in

other subsidiaries are held at cost less impairment and any loans to these subsidiaries are held at amortised cost in accordance with IFRS 9,

which includes the requirement to calculate expected credit losses on initial recognition.

	Company 2024 Equity investments £m	Company 2024 Loans £m	Company 2024 Total £m
Opening book value	5,061	2,806	7,867
Additions	29	173	202
Share of profits from partnership entities	–	2,548	2,548
Disposals and repayments	–	(2,752)	(2,752)
Fair value movements	(1,951)	(72)	(2,023)
Exchange movements	–	35	35
Closing book value	3,139	2,738	5,877

	Company 2023 Equity investments £m	Company 2023 Loans £m	Company 2023 Total £m
Opening book value	3,912	2,889	6,801
Additions	20	453	473
Share of profits from partnership entities	–	1,148	1,148
Disposals and repayments	–	(1,475)	(1,475)
Fair value movements	1,129	(225)	904
Exchange movements	–	16	16
Closing book value	5,061	2,806	7,867

Equity investments in, and loans to investment entities, are held at fair value and equity investments in other subsidiaries are held at cost less

impairment. The measurements at fair value and cost less impairment are assessed against the Company’s equity and loan instruments into

these subsidiaries, which are eliminated on consolidation for the Group. For this reason equity investments and loans into investments entities

do not form part of the investment portfolio for the Company and instead are included within Interests in Group entities. Amounts for equity

investments in, and loans to, investment entities held at fair value and other subsidiaries at amortised cost are detailed in Note 13.

Details of significant Group entities are given in Note 30. No expected credit losses have been recognised on those equity investments

and loans held at amortised cost as they are not material.

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3i Group plc | Annual report and accounts 2024 188

24 Commitments

Accounting policy:

Commitments represent amounts the Group has contractually committed to pay third parties but do not yet represent a charge or asset.

This gives an indication of committed future cash flows. Commitments are recognised in the balance sheet at the point of settlement

subject to associated risks and rewards being transferred. Commitments at the year end do not impact the Group’s financial results

for the year.

	Group 2024 due within 1 year £m	Group 2024 due between 2 and 5 years £m	Group 2024 due over 5 years £m	Group 2024 Total £m	Group 2023 due within 1 year £m	Group 2023 due between 2 and 5 years £m	Group 2023 due over 5 years £m	Group 2023 Total £m
Unquoted investments	8	–	–	8	9	–	–	9

	Company 2024 due within 1 year £m	Company 2024 due between 2 and 5 years £m	Company 2024 due over 5 years £m	Company 2024 Total £m	Company 2023 due within 1 year £m	Company 2023 due between 2 and 5 years £m	Company 2023 due over 5 years £m	Company 2023 Total £m
Unquoted investments	8	–	–	8	9	–	–	9

The amounts shown above include £ 8 million of commitments made by the Group and Company, to invest into funds ( 31 March 2023:

£ 9 million). The Group and Company were contractually committed to these investments as at  31 March 2024.

25 Contingent liabilities

Accounting policy:

Contingent liabilities are potential liabilities where there is even greater uncertainty, which could include a dependency on events not

within the Group’s control, but where there is a possible obligation. Contingent liabilities are only disclosed and not included within the

Consolidated statement of financial position.

The Company has provided a guarantee to the Trustees of the 3i Group Pension Plan (“the Plan”) in respect of liabilities of 3i plc to the Plan.

At 31 March 2024 , there was no ( 31 March 2023: no) material litigation outstanding, nor any other matter, against the Company or any of its

subsidiary undertakings, which may indicate the existence of a contingent liability.

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3i Group plc | Annual report and accounts 2024 189

26 Retirement benefits

Accounting policy:

Payments to defined contribution retirement benefit plans are charged to profit and loss as they fall due.

For defined benefit retirement plans, the cost of providing benefits is determined using the projected unit method with actuarial valuations

being carried out at each balance sheet date. Interest on the net defined benefit asset/liability, calculated using the discount rate used to

measure the defined benefit obligation, is recognised in profit and loss. Re-measurement gains or losses are recognised in full as they arise

in other comprehensive income.

A retirement benefit deficit is recognised in the Consolidated statement of financial position to the extent that the present value of the

defined benefit obligations exceeds the fair value of plan assets.

A retirement benefit surplus is recognised in the Consolidated statement of financial position where the fair value of plan assets exceeds

the present value of the defined benefit obligations limited to the extent that the Group can benefit from that surplus. Where the

retirement benefit scheme is in surplus, this is recognised net, being the lower of any surplus in the fund and the asset ceiling.

(i) Defined contribution plans

The Group operates a number of defined contribution retirement benefit plans for qualifying employees throughout the Group. The assets

of these plans are held separately from those of the Group. The total expense recognised, in operating expenses, in profit and loss

is £ 3 million (2023: £3 million), which represents the contributions paid to these defined contribution plans. There were no outstanding

payments due to these plans at the balance sheet date.

(ii) Defined benefit plans

The Group operates a final salary defined benefit plan for qualifying employees of its subsidiaries in the UK (“the Plan”). The Plan is approved

by HMRC for tax purposes, is operated separately from the Group and governed by an independent set of Trustees, whose appointment

and powers are determined by the Plan’s documentation.

The defined benefit plan is a funded scheme, the assets of which are independent of the Company’s finances and administered by

the Trustees. The Trustees are responsible for managing and investing the Plan’s assets and for monitoring the Plan’s funding position.

The Plan has entered into buy-in policies which means that the Plan benefits of all members are now insured and 3i, as sponsor, is no longer

exposed to longevity, interest or inflation risk. On an IAS 19 basis, the fair value of three buy-in policies will match the present value of the

liabilities insured. The valuation of the Plan was updated on an IAS 19 basis by an independent qualified actuary as at 31 March 2024. The

Plan’s assets do not include any of the Group’s own equity instruments nor any property in use by the Group.

During the year, the Trustees have taken further steps towards a buy-out and wind up of the Plan. Trustees wrote to members to confirm they

were proceeding with their plan to buy out members’ benefits and to distribute the surplus to the Company. This transaction is expected to

complete in FY2025.

Qualifying employees in Germany are entitled to a pension based on their length of service. The future liability calculated by German

actuaries is £21 million (31 March 2023: £20 million). There is a £1 million expense (2023: £1 million) recognised in operating expenses, in profit

and loss for the year and no gain or loss (2023: £8 million gain) in other comprehensive income for this scheme. Changes in the present value

of the obligation, assumptions and sensitivities of this scheme have not been disclosed as they are not material.

The amount recognised in the Consolidated statement of financial position in respect of the Group’s defined benefit plans is as follows:

	2024 £m	2023 £m
Present value of funded obligations	(446)	(450)
Fair value of the Plan assets	530	532
Asset restriction	(23)	(29)
Retirement benefit surplus in respect of the Plan	61	53
Retirement benefit deficit in respect of other defined benefit schemes	(21)	(20)

The total re-measurement gain recognised in other comprehensive income in respect of the Group’s defined benefit plans was £7 million

(2023: £8 million).

A retirement benefit surplus under IAS 19 is recognised in respect of the Plan on the basis that the Group is entitled to a refund of any

remaining surplus once all benefits and expenses have been settled in the expected course. The asset restriction relates to tax that would be

deducted at source in respect of a refund of the Plan surplus. During the year, the tax rate used to restrict the surplus has reduced to 25%

(31 March 2023: 35%) following a legislative change made by the government effective from 6 April 2024.

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3i Group plc | Annual report and accounts 2024 190

26 Retirement benefits continued

The amounts recognised in the Consolidated statement of comprehensive income in respect of the Plan are as follows:

	2024 £m	2023 £m
Included in interest payable
Interest income on net defined benefit asset	3	2
Included in other comprehensive income
Re-measurement gain/(loss)	–	–
Asset restriction	7	1
Total re-measurement gain and asset restriction	7	1
Total	10	3

Changes in the present value of the defined benefit obligation were as follows:

	2024 £m	2023 £m
Opening defined benefit obligation	450	641
Interest on Plan liabilities	21	17
Re-measurement gain/loss:
– gain from change in financial assumptions	(16)	(188)
– experience loss	12	4
Benefits paid	(21)	(25)
Curtailments and settlements	–	1
Closing defined benefit obligation	446	450

Changes in the fair value of the Plan assets were as follows:

	2024 £m	2023 £m
Opening fair value of the Plan assets	532	723
Interest on Plan assets	25	20
Actual return on Plan assets less interest on Plan assets	(4)	(184)
Expenses	(2)	(2)
Benefits paid	(21)	(25)
Closing fair value of the Plan assets	530	532

The fair value of the Plan’s assets at the balance sheet date is as follows:

	2024 £m	2023 £m
Annuity contracts	446	451
Cash and cash equivalents	84	81
	530	532

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3i Group plc | Annual report and accounts 2024 191

26 Retirement benefits continued

Changes in the asset restriction were as follows:

	2024 £m	2023 £m
Opening asset restriction	29	29
Interest on asset restriction	1	1
Re-measurements	(7)	(1)
Closing asset restriction	23	29

The principal assumptions made by the actuaries and used for the purpose of the year-end valuation of the Plan were as follows:

	2024	2023
Discount rate	4.8%	4.8%
Expected rate of pension increases	0% to 3.5%	0% to 3.6%
Retail Price Index (“RPI”) inflation	3.4%	3.5%
Consumer Price Index (“CPI”) inflation	2.8%	2.9%

In addition, it is assumed that members exchange 25% of their pension for a lump sum at retirement on the conversion terms in place at

31 March 2024, with an allowance for the terms to increase in future. The duration of the Plan’s defined benefit obligation at the accounting

date was around 14 years.

The post-retirement mortality assumption used to value the benefit obligation at 31 March 2024 is 90% of the S3NA very light mortality tables,

allowing for improvements in line with the CMI 2021 core projections with a long-term annual rate of improvement of 1.75% (31 March 2023:

90% of the S3NA very light mortality tables, allowing for improvements in line with the CMI 2021 core projections with a long-term annual rate

of improvement of 1.75%). The life expectancy of a male member reaching age 60 in 2044 (31 March 2023: 2043) is projected to be 32.4

(31 March 2023: 32.7) years compared to 30.5 (31 March 2023: 30.9) years for someone reaching 60 in 2024.

As the Plan was closed to future accrual of benefits by members with effect from 5 April 2011, the Group ceased to make regular contributions

to the Plan in the year to 31 March 2012. The latest triennial valuation for the Plan was completed in September 2020, based on the position

as at 30 June 2019. The outcome was an actuarial surplus of £89 million. This valuation is produced for funding purposes and is calculated

on a different basis to the IAS 19 valuation net asset of £61 million which is shown in the Note above. A triennial valuation at 30 June 2022 was

not required as the Plan Trustees intended to pursue a buy-out and wind-up of the Plan and have since commenced the wind-up process with

effect from 4 April 2023. For regulatory purposes, a valuation was carried out as at 30 June 2022 using the Pension Protection Fund's

prescribed methodology and assumptions under Section 179 of the Pensions Act 2004 and this valuation confirmed that the Plan is in surplus.

The third buy-in policy with Legal & General in 2020 was secured using Plan assets and it is expected that the Group will not have to pay any

further contributions to the Plan.

For the year to 31 March 2024, the defined benefit surplus is not impacted by changes in assumptions and sensitivity assumptions are nil

(2023: nil); this is because the defined benefit obligation is matched by annuity contracts.

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3i Group plc | Annual report and accounts 2024 192

27 Share-based payments

Accounting policy:

The Group has equity-settled and cash-settled share-based payment transactions with certain employees. Equity-settled schemes are

measured at fair value at the date of grant, which is then recognised in profit or loss over the period that employees provide services,

generally the period between the start of the performance period and the vesting date of the shares. The number of share awards

expected to vest takes into account the likelihood that performance and service conditions included in the terms of the award will be met.

Fair value is measured by use of an appropriate model which takes into account the current share price, the risk-free interest rate,

the expected volatility of the share price over the life of the award and any other relevant factors. In valuing equity-settled transactions,

no account is taken of any vesting conditions, other than conditions linked to the price of the shares of 3i Group plc. The charge is adjusted

at each balance sheet date to reflect the actual number of forfeitures, cancellations and leavers during the year. The movement

in cumulative charges since the previous balance sheet is recognised in profit and loss, with a corresponding entry in equity.

Liabilities arising from cash-settled share-based payment transactions are recognised in profit or loss over the vesting period. They are fair

valued at each reporting date. The cost of cash-settled share-based payment transactions is adjusted for the forfeitures of the participants’

rights that no longer meet the plan requirements as well as for early vesting.

The cost of the share-based payments is allocated either to operating expenses or carried interest depending on the original driver

of the award. Executive Director Long-term Incentive Plans are allocated to operating expenses.

To ensure that employees’ interests are aligned with shareholders, a significant amount of variable compensation paid to higher earning

employees is deferred into shares that vest over a number of years. For legal, regulatory or practical reasons certain participants may be

granted cash-settled awards under these schemes, which are intended to replicate the financial effects of a share award without entitling

the participant to acquire shares. The weighted average fair value grant price for cash-settled awards granted during the year was 1,956p

( 31 March 2023 : 1,102p) and the reporting price for these awards at 31 March 2024 was 2,809 pence (31 March 2023: 1,685 pence). The carrying

amount of liabilities arising from cash-settled awards at 31 March 2024 is £24 million (31 March 2023 : £17 million). The total equity-settled

share-based payment reserve at 31 March 2024 is £42 million (31 March 2023: £31 million).

The cost of the share-based payments is allocated either to operating expenses or carried interest depending on the original driver

of the award. Executive Director Performance Share Awards are allocated to operating expenses.

The total cost recognised in the Consolidated statement of comprehensive income is shown below:

	2024 £m	2023 £m
Share awards included as operating expenses1,2	11	9
Share awards included as carried interest1	16	10
Cash-settled share awards3	14	8
	41	27

1 Credited to equity.

2 For the year ended 31 March 2024, £9 million shown in Note 6 ( 2023: £9 million), is net of a £2 million (2023: nil) release from the bonus accrual.

3 For the year ended 31 March 2024, £13 million ( 2023: £8 million) is recognised in operating expenses and £1 million (2023: nil) is recognised in carried interest.

Movements in share awards 1

The number of equity and cash-settled share-based awards outstanding as at 31 March is as follows:

	2024 Number	2023 Number
Outstanding at the start of the year	6,277,107	6,309,498
Granted	2,336,288	3,181,041
Exercised	(2,387,539)	(2,787,794)
Forfeited	(14,878)	(425,638)
Lapsed	–	–
Outstanding at the end of year	6,210,978	6,277,107
Weighted average remaining contractual life of awards outstanding in years	1.7	1.8
Weighted average fair value of awards granted (pence)	1,708	872
Weighted average market price at date of exercise (pence)	1,953	1,228

1 The above table does not include shares funded by the Carry Trust, for which there is no impact on the Statement of Comprehensive Income or Statement of Financial Position. The prior year comparatives have been updated to

reflect this.

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Performance and risk

Governance

Audited financial statements

Portfolio and other information

Notes to the accounts continued

3i Group plc | Annual report and accounts 2024 193

27 Share-based payments continued

Details of the different types of awards are as follows:

Performance Share Awards

Performance Share Awards are granted to employees and Executive Directors under the 3i Group Discretionary Share Plan 2020

(and predecessor rules).

Employees

Performance Share Awards granted to employees (other than Executive Directors) after the financial year-end are subject to performance

conditions based on absolute and relative Total Shareholder Return over three financial years. Awards performance vest, to the extent they

satisfy the performance conditions, following the three-year performance period and are then released in the third year from the date of grant

together with a payment equal to the dividends which would have been paid on the released shares during the period from grant to release.

The method of settlement can either be equity or cash depending on the type of award. The equity awards are measured using the Monte

Carlo model. The model simulates the total shareholder return which has been incorporated into the fair value at grant date by applying

a discount to the valuation obtained.

Executive Directors

Performance Share Awards granted to Executive Directors after the financial year-end are subject to performance conditions based on

absolute and relative total shareholder return over three financial years. Awards performance vest, to the extent they satisfy the performance

conditions, following the three-year performance period. Outstanding Executive Director awards granted up to and including 2019 are

released, to the extent they have performance vested, together with a payment equal to the value of the dividends which would have been

paid on the released shares during the period from grant to release as to 50% in year three and 25% in each of years four and five. Executive

Director Performance Share Awards granted from 2020 onwards are released, to the extent they have performance vested, in the fifth year

from the date of grant together with a payment equal to the value of the dividends that would have been paid on the released shares during

the period from grant to release. The method of settlement is equity. These awards are measured using the Monte Carlo model. The model

simulates the total shareholder return which has been incorporated into the fair value at the grant date by applying a discount to the valuation

obtained. The features of the Group’s share schemes for Executive Directors are described in the Directors’ remuneration report on pages 136

to 149.

Restricted Share Awards

Restricted Share Awards are granted under the 3i Group Deferred Bonus Plan 2020 (and predecessor rules) and are granted to employees

and Executive Directors after the financial year-end and are subject to continued service conditions. The shares subject to the awards are

transferred to the participants on grant subject to forfeiture if the service condition is not fulfilled and cease to be subject to forfeiture in equal

proportions generally over the three years following grant or over four years in the case of certain such awards granted to members of the

Executive Committee. Cash dividends are received by participants on the shares during the period in which they remain subject to forfeiture.

The method of settlement can either be equity or cash depending on the type of award. The equity awards are measured using the Black

Scholes model.

Infrastructure Performance Fee Share Awards

Infrastructure Performance Fee Share Awards are granted to employees in the Infrastructure team under the 3i Special Share Award Plan.

Awards are granted to employees after the financial year-end and are subject to performance conditions based on receipt by 3i plc of certain

instalments of performance fees payable by 3i Infrastructure plc under the terms of its Investment Management Agreement with 3i. The shares

vest and are released, subject to satisfying the performance conditions, in equal instalments in the first and second years after grant together

with payments equal to the value of the dividends which would have been paid on the released shares during the period from grant to

release. If the performance condition is not met in year one, the award does not lapse but is retested in year two when some or all of the

shares may vest. The method of settlement can either be equity or cash depending on the type of award. The equity awards are measured

using the Black Scholes model.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Notes to the accounts continued

3i Group plc | Annual report and accounts 2024 194

27 Share-based payments continued

Measurement of fair values

The fair values of the plans have been measured using either the Monte Carlo model or Black Scholes model for equity share awards.

The inputs used in the measurement of the grants are based on the following assumptions:

	Monte Carlo model		Black Scholes
	2024	2023	2024	2023
Share price at grant date (pence)1	1,943	1,171	1,956	1,102
Fair value at grant date (pence)1	1,290	449	1,803	971
Exercise price (pence)	–	–	–	–
Expected volatility (weighted average)	28.2%	32.6%	30.8%	31.0%
Expected life (weighted average)	4 years	4 years	3 years	3 years
Dividend yield	–	–	2.7 %	4.2%
Risk free interest rate	4.70%	1.70%	4.36%	1.72%

1 Where share awards are granted on multiple dates the average price is disclosed.

Expected volatility was determined by reviewing share price volatility for the expected life of each award up to the date of grant.

Holdings of 3i Group plc shares

The Group has established an employee benefit trust and the total number of 3i Group plc shares held in this trust at 31 March 2024 was

9 million (31 March 2023: 11 million). Dividend rights have been waived on these shares. During the year, the trust did not acquire any shares.

During the year to 31 March 2023, the trust acquired 2.4 million shares at an average price of 1,271 pence per share. The total market value of

the shares held in trust based on the year-end share price of 2,809 pence (31 March 2023: 1,685 pence) was £253 million (31 March 2023: £180

million).

28 Financial risk management

Introduction

A review of the Group’s objectives, policies and processes for managing and monitoring risk is set out in the Risk management section

on pages 80 to 93. This Note provides further detail on financial risk management, cross-referring to the Risk management section where

applicable, and includes quantitative data on specific financial risks.

The Group is a highly selective investor and each investment is subject to an individual risk assessment through an investment approval

process. The Group’s Investment Committee is part of the overall risk management framework set out in the Risk section. The risk

management processes of the Company are aligned with those of the Group and both the Group and the Company share the same

financial risks.

Financial risks

Concentration risk

3i’s investment process seeks to diversify risk through significant dispersion of investments by geography, economic sector, asset class and

size as well as through the maturity profile of its investment portfolio. Although 3i does not set maximum limits for asset allocation, it does

have a maximum exposure limit for the cost of new investments. This is detailed in the Investment policy on page 150 in the Governance

section. Quantitative data regarding the concentration risk of the portfolio across geographies can be found in the Segmental analysis in Note

1 and in the 20 large investments table on pages 215 and 216.

Action is the largest asset in the Group’s investment portfolio. We first invested in Action in 2011 and throughout our investment have

acquired further stakes in the business seeing strong organic growth over our hold period. A 5% increase or decrease in value would result in a

£708 million (31 March 2023: £559 million) or £(708) million (31 March 2023: £(559) million) impact on the overall value. For further details on

Acton see Action case study on pages 22 to 26.

Credit risk

The Group is subject to credit risk on its unquoted investments, derivatives, cash and deposits. The maximum exposure is the balance sheet

amount. The Group’s cash is held with a variety of counterparties with a minimum rating above A- with 75% of the Group’s unrestricted surplus

cash held on demand in AAA rated money market funds (31 March 2023: 78%). The counterparties selected for the derivative financial

instruments were all banks with a minimum of a A- credit rating with at least one major rating agency.

The credit quality of unquoted investments, which are held at fair value and include debt and equity elements, is based on the financial

performance of the individual portfolio companies. The credit risk relating to these assets is based on their enterprise value and is reflected

through fair value movements. Further detail can be found in the Price risk – market fluctuations disclosure in this Note and the sensitivity

disclosure to changes in the valuation assumptions is provided in the valuation section of Note 13.

Overview and strategy

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Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Notes to the accounts continued

3i Group plc | Annual report and accounts 2024 195

28 Financial risk management continued

Liquidity risk

The liquidity outlook is monitored at least monthly by management and regularly by the Board in the context of periodic strategic reviews

of the balance sheet. The new investment pipeline and forecast realisations are closely monitored and assessed against our vintage control

policy, as described on page 80 of the Risk management section. The table below analyses the maturity of the Group’s gross contractual

liabilities.

Financial liabilities

As at 31 March 2024	Due within 1 year £m	Due between 1 and 2 years £m	Due between 2 and 5 years £m	Due more than 5 years £m	£m Total £m
Gross commitments:
Fixed loan notes	56	56	172	1,482	1,766
Committed multi-currency facility	2	2	2	–	6
Carried interest and performance fees payable within one year	24	–	–	–	24
Trade and other payables	134	–	–	5	139
Lease liabilities	4	3	15	27	49
Derivative financial instruments	–	–	–	–	–
Total	220	61	189	1,514	1,984

Gross commitments include principal amounts and interest and fees where relevant. Carried interest and performance fees payable within

non-current liabilities of £30 million ( 31 March 2023: £43 million) has no stated maturity as it results from investment-related transactions and it

is not possible to identify with certainty the timing of when the investments will be sold. Carried interest and performance fees payable within

non-current liabilities is shown after discounting, which has no impact (31 March 2023: £2 million).

As at 31 March 2023	Due within 1 year £m	Due between 1 and 2 years £m	Due between 2 and 5 years £m	Due more than 5 years £m	£m Total £m
Gross commitments:
Fixed loan notes	36	36	110	1,070	1,252
Committed multi-currency facility	2	1	2	–	5
Carried interest and performance fees payable within one year	34	–	–	–	34
Trade and other payables	76	–	–	4	80
Lease liabilities	5	4	1	–	10
Derivative financial instruments	1	2	1	–	4
Total	154	43	114	1,074	1,385

The Company disclosures are the same as those for the Group, with the following exceptions: carried interest and performance fees payable

due within one year is nil (31 March 2023: nil), trade and other payables due within one year is £760 million (31 March 2023: £728 million), trade

and other payables due more than five years nil (31 March 2023: nil) and lease liabilities due within one year nil (31 March 2023: nil), lease

liabilities due between one and two years nil (31 March 2023: nil), lease liabilities due between two and five years nil (31 March 2023: nil) and

lease liabilities due more than five years nil (31 March 2023: nil ).

Market risk

The valuation of the Group’s investment portfolio is largely dependent on the underlying trading performance of the companies within

the portfolio, but the valuation and other items in the financial statements can also be affected by interest rate, currency and quoted market

fluctuations. The Group’s sensitivity to these items is set out below.

(i) Interest rate risk

On the liability side, the direct impact of a movement in interest rates is limited to any drawings under the committed multi-currency facility

as the Group’s outstanding debt is fixed rate. The sensitivities below arise principally from changes in interest receivable on cash and deposits.

An increase of 100 basis points, based on the closing balance sheet position over a 12-month period, would lead to an approximate increase

in total comprehensive income of £4 million (2023: £2 million) for the Group and £3 million (2023: £1 million) for the Company. In addition,

the Group and Company have indirect exposure to interest rates through changes to the financial performance and the valuation of portfolio

companies caused by interest rate fluctuations.

(ii) Currency risk

The Group’s net assets in sterling, euro, US dollar, Danish krone and all other currencies combined are shown in the table on the next page.

This sensitivity analysis is performed based on the sensitivity of the Group’s net assets to movements in foreign currency exchange rates

assuming a 10% movement in exchange rates against sterling. The sensitivity of the Company to foreign exchange risk is not materially

different from the Group.

Overview and strategy

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Performance and risk

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Notes to the accounts continued

3i Group plc | Annual report and accounts 2024 196

28 Financial risk management continued

The Group considers currency risk on specific investment and realisation transactions. Further information on how currency risk is managed

is provided on page 90.

As at 31 March 2024	Sterling £m	Euro £m	US dollar £m	Danish krone £m	Other £m	Total £m
Net assets1	4,817	13,947	1,180	200	26	20,170
Sensitivity analysis
Assuming a 10% movement in exchange
rates against sterling:
Impact on net assets	n/a	1,399	117	20	3	1,539

1 The Group’s foreign exchange hedging is treated as a sterling asset within the above table.

As at 31 March 2023	Sterling £m	Euro £m	US dollar £m	Danish krone £m	Other £m	Total £m
Net assets1	4,797	10,641	1,154	222	30	16,844
Sensitivity analysis
Assuming a 10% movement in exchange
rates against sterling:
Impact on net assets	n/a	1,064	115	22	3	1,204

1 The Group’s foreign exchange hedging is treated as a sterling asset within the above table.

(iii) Price risk – market fluctuations

The Group’s management of price risk, which arises primarily from quoted and unquoted equity instruments, is through the careful

consideration of the investment, asset management and divestment decisions at the Investment Committee. The Investment Committee’s

role in risk management is detailed on page 82 in the Risk management section. A 5% change in the fair value of those investments would

have the following direct impact in profit or loss:

Group	Quoted investment £m	Unquoted investment £m	Investment in Investment entity subsidiaries £m	Total £m
At 31 March 2024	44	710	290	1,044
At 31 March 2023	42	434	392	868

Company		Quoted investment £m	Unquoted investment £m	Total £m
At 31 March 2024		44	710	754
At 31 March 2023		42	434	476

29 Related parties and interests in other entities

The Group has various related parties stemming from relationships with limited partnerships managed by the Group, its investment portfolio

(including unconsolidated subsidiaries), its advisory arrangements and its key management personnel. In addition, the Company has related

parties in respect of its subsidiaries. Some of these subsidiaries are held at fair value (unconsolidated subsidiaries) due to the treatment

prescribed in IFRS 10.

Related parties

Limited partnerships

The Group manages a number of external funds which invest through limited partnerships. Group companies act as the general partners

of these limited partnerships and exert significant influence over them. The following amounts have been included in respect of these limited

partnerships:

Statement of comprehensive income	Group 2024 £m	Group 2023 £m	Company 2024 £m	Company 2023 £m
Carried interest receivable	21	6	25	42
Fees receivable from external funds	19	20	–	–

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Performance and risk

Governance

Audited financial statements

Portfolio and other information

Notes to the accounts continued

3i Group plc | Annual report and accounts 2024 197

29 Related parties and interests in other entities continued

Statement of financial position	Group 2024 £m	Group 2023 £m	Company 2024 £m	Company 2023 £m
Carried interest receivable	6	8	76	99

Investments

The Group makes investments in the equity of unquoted and quoted investments where it does not have control, but may be able to

participate in the financial and operating policies of that company. IFRS presumes that it is possible to exert significant influence when

the equity holding is greater than 20%. The Group has taken the investment entity exception, as permitted by IFRS 10, and has not equity

accounted for these investments, in accordance with IAS 28, but they are related parties. The total amounts included for investments

where the Group has significant influence, but not control, are as follows:

Statement of comprehensive income	Group 2024 £m	Group 2023 £m	Company 2024 £m	Company 2023 £m
Realised profits over value on the disposal of investments	1	–	1	–
Unrealised (losses)/profits on the revaluation of investments	(23)	89	(23)	89
Portfolio income	14	18	14	17

Statement of financial position	Group 2024 £m	Group 2023 £m	Company 2024 £m	Company 2023 £m
Unquoted investments	754	775	754	775

Advisory and management arrangements

The Group acted as Investment Manager to 3i Infrastructure plc (“3iN”), which is listed on the London Stock Exchange, for the year

to 31 March 2024. The following amounts have been recognised in respect of the management relationship:

Statement of comprehensive income	Group 2024 £m	Group 2023 £m	Company 2024 £m	Company 2023 £m
Unrealised profits/(losses) on the revaluation of investments	38	(93)	38	(93)
Fees receivable from external funds	50	49	–	–
Performance fees receivable	41	35	–	–
Dividends	31	29	31	29

Statement of financial position	Group 2024 £m	Group 2023 £m	Company 2024 £m	Company 2023 £m
Quoted equity investments	879	841	879	841
Performance fees receivable	42	35	–	–

Subsidiaries

Transactions between the Company and its fully consolidated subsidiaries, which are related parties of the Company, are eliminated

on consolidation. Details of related party transactions between the Company and its subsidiaries are detailed below.

Management, administrative and secretarial arrangements

The Company has appointed 3i Investments plc, a wholly-owned subsidiary of the Company incorporated in England and Wales, as

its investment manager. 3i Investments plc received a fee of £8 million (2023: £8 million) from 3i plc, a fellow subsidiary, for this service.

The Company has appointed 3i plc, a wholly-owned subsidiary of the Company incorporated in England and Wales, to provide the Company

with a range of investment management and administrative services. 3i plc received a fee of £25 million (2023: £108 million) for this service.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Notes to the accounts continued

3i Group plc | Annual report and accounts 2024 198

29 Related parties and interests in other entities continued

Key management personnel

The Group’s key management personnel comprise the members of the Executive Committee and the Board’s non-executive Directors.

The following amounts have been included in respect of these individuals:

Statement of comprehensive income	Group 2024 £m	Group 2023 £m
Salaries, fees, supplements and benefits in kind	6	6
Cash bonuses	2	2
Carried interest and performance fees payable	31	34
Share-based payments	11	13
Termination payments	–	–

Statement of financial position	Group 2024 £m	Group 2023 £m
Bonuses and share-based payments	18	14
Carried interest and performance fees payable within one year	38	22
Carried interest and performance fees payable after one year	30	64

No carried interest and performance fees payable was paid or accrued for the Executive or non-executive Directors, as they do not participate

in these schemes (2023: nil). Carried interest and performance fees paid in the year to other key management personnel was £58 million (2023:

£7 million).

Unconsolidated structured entities

The application of IFRS 12 requires additional disclosure on the Group’s exposure to unconsolidated structured entities.

The Group has exposure to a number of unconsolidated structured entities, as a result of its investment activities across its Private Equity

and Infrastructure business lines. The nature, purpose and activities of these entities are detailed below along with the nature of risks

associated with these entities and the maximum exposure to loss.

Closed-end limited partnerships

The Group manages a number of closed-end limited partnerships, which are either Private Equity or Infrastructure focused, in return

for a management fee. The purpose of these partnerships is to invest in Private Equity or Infrastructure investments for capital appreciation.

Limited Partners, which in some cases may include the Group, finance these entities by committing capital to them and cash is drawn down

or distributed for financing investment activity.

The Group’s attributable stakes in these entities are held at fair value, fees receivable are recognised on an accruals basis and carried interest

is accrued when relevant performance hurdles are met.

The risk and maximum exposure to loss arising from the Group’s involvement with these entities are summarised below:

	Carrying amount			Maximum loss exposure £m
Balance sheet line item of asset or liability	Assets £m	Liabilities £m	Net £m
Unquoted investments	104	–	104	104
Carried interest receivable	6	–	6	6
Total	110	–	110	110

At 31 March 2023, the carrying amount of assets and maximum loss exposure of unquoted investments and carried interest receivable was

£98 million and £8 million respectively. The carrying amount of liabilities was nil.

At 31 March 2024, the total assets under management relating to these entities was £10.9 billion (31 March 2023: £9.0 billion).

Regulatory information relating to fees

3i Investments plc acts as the AIFM of 3i Group plc. In performing the activities and functions of the AIFM, the AIFM or another 3i company

may pay or receive fees, commissions or non-monetary benefits to or from third parties of the following nature:

Transaction fees

3i companies receive monitoring and directors’ fees from portfolio companies. The amount is agreed with the portfolio company at the time

of the investment but may be renegotiated. Where applicable, 3i may also receive fees on the completion of transactions such as acquisitions,

refinancings or syndications either from the portfolio company or a co-investor. Transaction fees paid to 3i are included in portfolio income.

Overview and strategy

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Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Notes to the accounts continued

3i Group plc | Annual report and accounts 2024 199

29 Related parties and interests in other entities continued

Payments for third-party services

3i companies may retain the services of third-party consultants; for example, for an independent director or other investment management

specialist expertise. The amount paid varies in accordance with the nature of the service and the length of the service period and is usually,

but not always, paid/reimbursed by the portfolio companies. The payment may involve a flat fee, retainer or success fee. Such payments,

where borne by 3i companies, are usually included in portfolio income.

Payments for services from 3i companies

One 3i company may provide investment advisory services to another 3i company and receive payment for such services.

30 Subsidiaries and related undertakings

IFRS 10 deems control, as opposed to equity ownership, as the key factor when determining what meets the definition of a subsidiary. If a

group is exposed to, or has rights to, variable returns from its involvement with the investee, then under IFRS 10 it has control. This is inconsistent

with the UK’s Companies Act 2006, where voting rights being greater than 50% is the key factor when identifying subsidiaries.

Under IFRS 10, 34 of the Group’s portfolio company investments are considered to be accounting subsidiaries. As the Group applies the

investment entity exception available under IFRS 10, these investee companies are classified as investment entity subsidiaries.

The Companies Act 2006 requires disclosure of certain information about the Group’s related undertakings. Related undertakings are subsidiaries,

joint ventures, associates and other significant holdings. In this context, significant means either a shareholding greater than or equal to 20%

of the nominal value of any class of shares or a book value greater than 20% of the Group’s assets.

The Company’s related undertakings at 31 March 2024 are listed below:

Description	Holding/share class	Footnote
Subsidiaries
3i Holdings plc	100% ordinary shares	1
3i Investments plc	100% ordinary shares	1
3i plc	100% ordinary shares	1
3i International Holdings	100% ordinary shares	1
Investors in Industry plc	100% ordinary shares/ cumulative preference shares	1
3i Corporation	100% ordinary shares	2
3i Deutschland Gesellschaft für Industriebeteiligungen mbH	100% ordinary shares	4
Gardens Nominees Limited	100% ordinary shares	1
Gardens Pension Trustees Limited	100% ordinary shares	1
3i Europe plc	100% ordinary shares	1
3i Nominees Limited	100% ordinary shares	1
3i Osprey GP Limited	100% ordinary shares	1
3i Nordic plc	100% ordinary shares	1
3i GP 2004 Limited	100% ordinary shares	3
3i Ademas LP	100% partnership interest	3
The 3i Group Employee Trust	n/a	6
3i International Services plc	100% ordinary shares	1
3i EFV Nominees A Limited	100% ordinary shares	1
3i EFV Nominees B Limited	100% ordinary shares	1
3i India Private Limited	100% ordinary shares	7
3i Sports Media (Mauritius) Limited	100% ordinary shares	8
3i EFV GP Limited	100% ordinary shares	1
IIF SLP GP Limited	100% ordinary shares	3
3i Buyouts 2010 A LP	85% partnership interest	1
3i Buyouts 2010 B LP	79% partnership interest	1
3i Buyouts 2010 C LP	60% partnership interest	1
GP CCC 2010 Limited	100% ordinary shares	3
3i GC GP Limited	100% ordinary shares	1

Description	Holding/share class	Footnote
3i GP 2010 Limited	100% ordinary shares	1
3i Growth Capital A LP	100% partnership interest	1
3i Growth Capital G LP	100% partnership interest	1
3i Growth 2010 LP	85% partnership interest	1
Strategic Investments FM (Mauritius) Alpha Limited	70% ordinary shares	8
3i GC Nominees A Limited	100% ordinary shares	1
3i GC Nominees B Limited	100% ordinary shares	1
3i India Infrastructure Fund B LP	99% partnership interest	1
3i 2004 GmbH & Co. KG	100% partnership interest	4
3i General Partner 2004 GmbH	100% ordinary shares	4
Pan European Growth Co-invest 2006-08 LP	100% partnership interest	1
Pan European Growth (Dutch)A Co-invest 2006-08 LP	100% partnership interest	1
Asia Growth Co-invest 2006-08 LP	100% partnership interest	1
Pan European Growth (Nordic) Co-invest 2006-08 LP	100% partnership interest	1
3i PE 2013-16A LP	100% partnership interest	1
3i PE 2013-16C LP	100% partnership interest	1
3i GP 2013 Ltd	100% ordinary shares	1
GP 2013 Ltd	100% ordinary shares	3
3i BIFM Investments Limited	100% ordinary shares	1
BIIF GP Limited	100% ordinary shares	1
BAM General Partner Limited	100% ordinary shares	1
BEIF Management Limited	100% ordinary shares	1
3i BIIF GP LLP	100% partnership interest	1
3i PE 2016-19 A LP	100% partnership interest	1
3i Managed Infrastructure Acquisitions GP (2017) LLP	100% partnership interest	1
3i Managed Infrastructure Acquisitions GP Limited	100% ordinary shares	1
3i 2016 Gmbh & Co. KG	100% partnership interest	4
3i European Operational Projects GmbH & Co. KG	100% partnership interest	4

Overview and strategy

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Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Notes to the accounts continued

3i Group plc | Annual report and accounts 2024 200

30 Subsidiaries and related undertakings continued

Description	Holding/share class	Footnote
GP 2016 Limited	100% ordinary shares	3
3i GP 2016 Limited	100% ordinary shares	1
3i European Operational Projects GP s.a.r.l	100% ordinary shares	10
3i SCI Holdings Limited	100% ordinary shares	1
3i North American Infrastructure Partners, LLC	80% equity shares	26
3i Abaco ApS	100% ordinary shares	23
3i Investments (Luxembourg) S.A.	100% ordinary shares	10
3i 2019-22 DLP SCSp	100% partnership interest	10
3i PE 2019-22 A LP	100% partnership interest	1
3i PE 2019-22 B LP	100% partnership interest	1
3i PE 2019-22 Warehouse LP	100% partnership interest	3
3i 2020 Co-investment LP	100% partnership interest	3
3i GP 2019 Limited	100% ordinary shares	1
3i GP 2020 Limited	100% ordinary shares	3
3i GP 2019 s.a.r.l	100% ordinary shares	10
3i GP 2019 (Scots) Limited	100% ordinary shares	3
3i 2020 Co-investment GP s.a.r.l	100% ordinary shares	10
3i France SAS	100% ordinary shares	16
3i IP Acquisitions Limited	100% ordinary shares	1
3i IP Acquisitions GP LLP	100% partnership interest	1
2020 Co-Investment 1 LP	100% partnership interest	1
2020 Co-Investment 2 LP	94% partnership interest	1
3i IIF GP 2020 Limited	100% ordinary shares	1
3i IIF GP LLP	100% partnership interest	1
Coral LP	50% carried interest units	3
3i Benelux B.V.	100% ordinary shares	12
3i Mountain LP	99% partnership interest	3
3i NAI Holdings GP Limited	100% ordinary shares	3
3i PE 2022-25 A LP	100% partnership interest	1
3i PE 2022-25 B LP	100% partnership interest	1
3i GP 2022 Limited	100% ordinary shares	1
3i GP 2022 (Scots) Limited	100% ordinary shares	3
3i PE 2022-25 A (Lux) SCSp	100% partnership interest	10
3i PE 2022-25 B (Lux) SCSp	100% partnership interest	10
3i GP 2022 s.a.r.l	100% ordinary shares	10
3i North American Infrastructure Fund A LP	100% partnership interest	26
3i NAI Holdings LP	100% partnership interest	3
3i North American Infrastructure GP, LLC	100% equity units	26
3i ECW Coinvest GP, LLC	100% equity units	26
3i RR Coinvest GP, LLC	100% equity units	26
3i Aura GP (2022) Limited	100% ordinary shares	1
3i Zephyr GP (2022) Limited	100% ordinary shares	1
3i Infra GP 2022 (Scots) Limited	100% ordinary shares	3
3i Infra 2022 Warehouse LP	100% partnership interest	3
3i 2023 Co-investment LP	51% partnership interest	1
3i MME Coinvest GP, LLC	100% equity units	26

Description	Holding/share class	Footnote
Associates
3i Growth Carry A LP	25% partnership interest	3
3i Growth Carry B LP	25% partnership interest	3
Pan European Buyouts (Nordic) Co-invest 2006-08 LP	26% partnership interest	1
Global Growth Co-invest 2006-08 LP	30% partnership interest	38
Strategic Investments FM (Mauritius) B Limited	36% ordinary shares	8
3i Growth Capital B LP	36% partnership interest	1
Moon Topco GmbH	49% ordinary shares	13
Layout Holdco A/S	49% ordinary shares	14
Boketto Holdco Limited	47% ordinary shares	15
Klara HoldCo S.A.	43% ordinary shares	10
Shield Holdco LLC	49% equity units	31
Q Holdco Limited	27% ordinary shares	18
3i Infrastructure plc	29% ordinary shares	17
Peer Holding I B.V.	49% ordinary shares	19
AES Engineering Limited	43% ordinary shares	20
Carter Thermal Industries Limited	32% ordinary shares	21
Harper Topco Limited	42% ordinary shares	22
Orange County Fundo de Investmento EM Participacoes	40% equity units	25
Tato Holdings Limited	27% ordinary shares	28
Nimbus Communications Ltd	30% ordinary shares	29
Aurela TopCo Gmbh	49% ordinary shares	5
nexeye holding B.V.	49% ordinary shares	27
C Medical Holdco, LLC	49% equity units	2
Crown Holdco B.V.	49% ordinary shares	42
3i India Infrastructure Holdings Ltd	21% ordinary shares	8
Racing Topco GmbH	49% ordinary shares	24
Panda Holdco LLC	49% equity units	2
Scandlines Infrastructure ApS	35% ordinary shares	30
Alinghi 1 S.A.S	49% ordinary shares	11
SaniSure Holdings GP LLC	49% equity units	2
New Amsterdam Software GP LLC	49% equity units	31
Garden & House International GmbH	36% ordinary shares	32
T&J Holdco Limited	49% ordinary shares	9
WHCG GP LLC	49% equity units	31
Hydra Holdco B.V.	49% ordinary shares	40
European Bakery Group B.V.	49% ordinary shares	41
Himalaya Topco B.V.	46% ordinary shares	39
MAIT Group GmbH	49% ordinary shares	33
Ten23 Health GP LLC	49% equity units	31
George Topco Limited	49% ordinary shares	34
xSuite Top Holding GmbH	49% ordinary shares	35
Balearia Topco B.V.	49% ordinary shares	36
Kite Topco ApS	49% ordinary shares	37

There are no joint ventures or other significant holdings. The 20 large portfolio companies by fair value are detailed on pages 215 and 216.

The combination of the table above and that on pages 215 and 216 is deemed by the Directors to fulfil the requirements under IFRS 12

on the disclosure of material subsidiaries.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Notes to the accounts continued

3i Group plc | Annual report and accounts 2024 201

30 Subsidiaries and related undertakings continued

Footnote	Address
1	16 Palace Street, London, SW1E 5JD, UK
2	300 Park Avenue, 23rd Fl, New York, NY 10022, USA
3	50 Lothian Road, Festival Square, Edinburgh, EH3 9WJ, UK
4	OpernTurm, Bockenheimer Landstresse 2-4, 60306 Frankfurt am Main, Germany
5	Seelbüde 13, 36110 Schlitz, Germany
6	13 Castle Street, St Helier, JE1 1ES, Jersey
7	Level 7, The Capital B-Wing, Bandra Kurla Complex, Bandra East, Mumbai, 400051, India
8	5th Floor, Ebene Esplanade, 24 Bank Street, Cybercity, Ebene, Mauritius
9	Floor 2, Trident 3, Trident Business Park, Styal Road, Manchester, M22 5XB, UK
10	9 Rue Sainte Zithe, L-2763 Luxembourg, Grand Duchy of Luxembourg
11	16 place de l’Iris, 92 400 Courbevoie, France
12	Cornelis Schuytstraat 74, 1071JL Amsterdam, Netherlands
13	Einsteinring 10, 85609 Aschheim, Germany
14	Mørupvej 16 Mørup, 7400 Herning, Denmark
15	New Mill, New Mill Lane, Witney, Oxfordshire, OX29 9SX, UK
16	29-31, rue de Berri, 75008 Paris, France
17	Aztec Financial Services (Jersey) Limited, Aztec Group House, IFC 6, The Esplanade, St Helier, JE2 3BZ, Jersey
18	1 Bartholomew Lane, London, EC2N 2AX, UK
19	Perenmarkt 15, Zwaagdijk East, 1681PG, Netherlands
20	Bradmarsh Business Park, Mill Close, Rotherham, South Yorkshire, S60 1BZ, UK
21	90 Lea Ford Road, Birmingham, B33 9TX, UK
22	1st James Court, Whitefriars, Norwich, Norfolk, NR3 1RU, UK
23	Nybrogade 12, 1203 Copenhagen, Denmark
24	Schanzenstr. 6-20, Gebäude 2.08, 51063 Cologne, Germany
25	Avenida Brigadeiro Faria Lima, 2055, 19 andar, 01452-001 – Sao Paulo, SP, Brazil
26	Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle, Delaware, 19801, USA
27	Papland 21, 4206CK Gorinchem, Netherlands
28	Thor Specialities (Uk) Ltd, Wincham Avenue, Wincham, Northwich, CW9 6GB, UK
29	44 Oberoi Complex, Andheri (West), Mumbai, India
30	Havneholmen 25, 8.,1561 Copenhagen, Denmark
31	251 Little Falls Drive, Wilmington, DE 19808, New Castle, USA
32	Bahrenfelder Chaussee 49, 22761, Hamburg, Germany
33	Berner Feld 10, 78628 Rottweil, Germany
34	Milton Gate, 60 Chiswell Street, London, EC1Y 4AG, UK
35	Hamburger Str. 12, 22926 Ahrensburg, Germany
36	Herengracht 262, 1016 BV Amsterdam, Netherlands
37	Konges Sløjd, Store Kongensgade 77, 1., 1264 Copenhagen, Denmark
38	2nd Floor, Gaspé House, 66-72 Esplanade, St Helier, JE1 1GH, Jersey
39	Aalsvoort 101, 7241 MB Lochem, Netherlands
40	Weidehek 46, 4824 AS Breda, Netherlands
41	Kronosstraat 2, 5048 CE Tilburg, Netherlands
42	Industriepark Vliedberg 12, 5251 RG Vlijmen, the Netherlands

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Notes to the accounts continued

3i Group plc | Annual report and accounts 2024 202

1. Our opinion is unmodified

In our opinion:

• the financial statements of 3i Group plc give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 March 2024, and

of the Group’s profit for the year then ended;

• the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;

• the Parent Company financial statements have been properly prepared in accordance with UK-adopted international accounting standards as applied in

accordance with the provisions of the Companies Act 2006; and

• the Group and Parent Company financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

What our opinion covers

We have audited the Group and Parent Company financial statements of 3i Group plc (“the Group”) for the year ended 31 March 2024 (FY 2024 ) included in the

Annual Report and Accounts, which comprise:

Group (3i Group plc and its subsidiaries)	Parent Company (3i Group plc)
Consolidated statement of comprehensive income	Company statement of financial position
Consolidated statement of financial position	Company statement of changes in equity
Consolidated statement of changes in equity	Company cash flow statement
Consolidated cash flow statement	Notes to the accounts, including the summary of material accounting policies
Notes to the accounts, including the summary of material accounting policies

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are described below.

We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion and matters included in this report

are consistent with those discussed and included in our reporting to the Audit and Compliance Committee (“ACC”).

We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with UK ethical requirements, including the FRC

Ethical Standard as applied to listed public interest entities.

2. Overview of our audit

Factors driving our view of risks
The year ended 31 March 2024 is our fourth year as the Group’s auditor. Much of the uncertainty in the macro-economic environment that existed at the end of FY23 remains. Due to the continued geopolitical tension and global macroeconomic downturn, several portfolio companies experienced difficult trading conditions, although the Company’s largest investment, Action, has demonstrated resilience. In comparison, some portfolio companies experienced company-specific issues including lower demand level for products and services and higher cost base. Hence, the level of judgement required to be exercised by the Group and Parent Company in valuations of unquoted investments, in particular as a result of volatility in earnings (including earnings adjustments), comparable company multiples, and cash flows continued to be a focus area. During the year, the private asset market continues to experience challenges and a low level of market activity. This is primarily driven by the persistent high interest rate environment and low investor confidence during a period of geopolitical and macro-economic uncertainty. As a result, we have increased our focus on the level of judgement required for some key assumptions, namely valuations earnings adjustments and multiples (for assets valued using earnings multiple approach) and discount rates (for assets valued using the discounted cash flow approach). Carried Interest payable in investment entity subsidiaries has been similarly impacted, as its calculation is primarily driven by the valuation of the investment portfolio as at the year end.		Investment entity subsidiaries composed mainly of unquoted investments and carried interest liabilities. Unquoted investments are considered in 4.1 below with directly held unquoted investments. Whilst the carried interest liability is included in 4.2 below. As part of our risk assessment, we have maintained our focus on the valuation of the unquoted investment portfolio held directly and by investment entity subsidiaries, and on the accuracy of the carried interest payable included in the valuation of investment entities. We have designed our audit procedures accordingly. This has included specific focus on key assumptions adopted by management. We have considered management’s evaluation of the impact of the current geopolitical uncertainty and macro-economic downturn on the portfolio companies. We have also designed additional procedures over the largest asset in the portfolio, Action.

Key Audit Matters (Group and Parent Company)		Vs FY23	Items
Valuation of Unquoted Investments (Group and Parent Company)			4.1
Carried interest payable included in investments in investment entity subsidiaries (Group) and interests in group entities (Parent Company)			4.2
	Newly identified risk
	Similar risk to FY2023

Increase in risk since FY2023

Decrease in risk since FY2023

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

KPMG LLP’s independent auditor’s report to the members of 3i Group plc

3i Group plc | Annual report and accounts 2024 203

Audit and compliance committee interaction
During the year, the ACC met 6 times. KPMG are invited to attend all ACC meetings and are provided with an opportunity to meet with the ACC in private sessions without the Executive Directors being present. For each Key Audit Matter, we have set out communications with the ACC in section 4,		including matters that required particular judgement for each. The matters included in the Audit and Compliance Committee Chair’s report on page 122 are materially consistent with our observations of those meetings.
Our independence
We have fulfilled our ethical responsibilities and remain independent of the Group in accordance with UK ethical requirements, including the FRC Ethical Standard as applied to listed public interest entities. We have not performed any non-audit services during the year ended 31 March 2024 or subsequently which are prohibited by the FRC Ethical Standard. We were first appointed as auditor by the shareholders for the year ended 31 March 2021. The period of total uninterrupted engagement is for the four financial years ended 31 March 2024. The Group engagement partner is required to rotate every 5 years. As these are the fourth set of the Group’s financial statements signed by Jonathan Mills, he will be required to rotate off after the FY2025 audit.
Materiality (item 6 below)
The scope of our work is influenced by our view of materiality and our assessed risk of material misstatement. We have determined overall materiality for the Group financial statements as a whole at £176m (FY2023: £141m) and for the Parent Company financial statements as a whole at £159m (FY2023: £124m). A key judgement in determining materiality was the most relevant metric to select as the benchmark, by considering which metrics have the greatest bearing on shareholder decisions. Consistent with FY2023, we determined that Total Assets remains the benchmark for the Group as the valuation of the investment portfolio remains the key financial measure. As such, we based our Group materiality on Total Assets, of which it represents 0.8% (FY2023: 0.79%). Materiality for the Parent Company financial statements was determined with reference to a benchmark of Parent Company Total Assets of which it represents 0.75% (FY2023: 0.7%).

Total audit fee	£3m (FY2023 : £2.7m)
Audit related fees (including interim review)	£0.3m (FY2023 : £0.3m)
Non-audit fee as a % of total audit and audit related fee %	10% (FY2023 : 11%)
Date first appointed	25 June 2020
Uninterrupted audit tenure	4 years
Next financial period which requires a tender	31 March 2031
Tenure of Group engagement partner	4 years

Materiality levels used in our audit

Group

Group Materiality

GPM

Group Performance

Materiality

PLC

Parent Company

Materiality

AMPT

Reporting Differences

Threshold

l FY2023 £m

l FY2024 £m

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

KPMG LLP’s independent auditor’s report to the members of 3i Group plc continued

3i Group plc | Annual report and accounts 2024 204

Group scope (item 7 below)
We have performed risk assessment and planning procedures to determine which of the Group’s components are likely to include risks of material misstatement to the Group financial statements, the type of procedures to be performed and the extent of involvement required. The Parent Company is the only component in scope for full scope audit of financial information for consolidation purposes. This is consistent with the prior year. The component within the scope of our work accounted for the percentages illustrated below.		We have performed audit procedures centrally across the Group, as set out in more detail in item 7. In addition, we have performed Group level analysis on the remaining components to determine whether further risks of material misstatement exist in those components. We consider the scope of our audit, as communicated to the Audit and Compliance Committee, to be an appropriate basis for our audit opinion.
The impact of climate change on our audit
In planning our audit, we have considered the potential impacts of climate change on the Group’s business and its financial statements. Climate change impacts the Group in a variety of ways including the impact of climate risk on investment valuations, potential reputational risk associated with the Group’s delivery of its climate related initiatives, and greater emphasis on climate related narrative and disclosure in the annual report. The Group’s exposure to climate change is primarily through the portfolio companies, as the key valuation assumptions and estimates may be impacted by climate change risks.		We have performed a risk assessment of how the impact of climate change may affect the financial statements and our audit, in particular over the valuation of portfolio companies. Our assessment of the impact of climate change was limited to the valuation of unquoted investments. We held discussions with our own climate change professionals to challenge our risk assessment. For the biggest asset in the portfolio, Action, we read its sustainability report to understand the climate change risks and considered the impact on its valuation. On the basis of the risk assessment procedures performed above, we concluded that, while climate change posed a risk to the determination of the valuation of portfolio companies due to the potential impact on the maintainability of valuation earnings or free cash flows forecast, the risk was not significant when we considered the portfolio of investments. As a result, there was no material impact from this on our key audit matters. We have also read the disclosure of climate related information in the front half of the annual report as set out on pages 58 to 68 and considered consistency with the financial statements and our audit knowledge. We have not been engaged to provide assurance over the accuracy of these disclosures.

Coverage of Group financial statements
Total assets l Full scope audit l Remaining components	Revenue	Net assets

l	96%
l	4%

l	97%
l	3%

l	98%
l	2%

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

KPMG LLP’s independent auditor’s report to the members of 3i Group plc continued

3i Group plc | Annual report and accounts 2024 205

3. Going concern, viability and principal risks and uncertainties

The Directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Group or the Parent Company or to

cease their operations, and they have concluded that the Group’s and the Parent Company’s financial position means that this is realistic. They have also

concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for at least a year from

the date of approval of the financial statements (“the going concern period”).

Going concern
We used our knowledge of the Group and Parent Company, their industry, and the general economic environment to identify the inherent risks to its business model and analysed how those risks might affect the Group’s and Parent Company’s financial resources or ability to continue operations over the going concern period. The risks that management considered most likely to adversely affect the Group’s and Parent Company’s available financial resources over this period are: • Continued geopolitical tension and macro-economic downturn, including persistent inflation, high interest rates and weak consumer demand impacting the performance of portfolio companies, including their liquidity (which may require 3i to provide further liquidity support to portfolio companies); • A material downturn in performance of the Group’s largest portfolio company, Action; and • A combination of the two scenarios. We considered whether these risks could plausibly affect the liquidity of the Group and the Parent in the going concern period by comparing severe, but plausible downside scenarios that could arise from these risks individually and collectively against the level of available financial resources indicated by the Group’s and Parent Company’s financial forecasts. Our procedures also included an assessment of whether the going concern disclosure in Accounting Policy A to the financial statements gives a complete and accurate description of the Directors’ assessment of going concern.		Accordingly, based on those procedures, we found the Directors’ use of the going concern basis of accounting without any material uncertainty for the Group and Parent Company to be acceptable. However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Group or the Parent Company will continue in operation. Our conclusions • We consider that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate; • We have not identified, and concur with the Directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Group’s or Parent Company's ability to continue as a going concern for the going concern period; • We have nothing material to add or draw attention to in relation to the Directors’ statement in Accounting Policy A to the financial statements on the use of the going concern basis of accounting with no material uncertainties that may cast significant doubt over the Group and Parent Company’s use of that basis for the going concern period, and we found the going concern disclosure in Accounting Policy A to be acceptable; and • The related statement under the Listing Rules set out on page 129-130 is materially consistent with the financial statements and our audit knowledge.
Disclosures of emerging and principal risks and longer-term viability
Our responsibility We are required to perform procedures to identify whether there is a material inconsistency between the Directors’ disclosures in respect of emerging and principal risks and the viability statement, and the financial statements and our audit knowledge. Based on those procedures, we have nothing material to add or draw attention to in relation to: • the Directors’ confirmation within the Principal risks and mitigations statement that they have carried out a robust assessment of the emerging and principal risks facing the Group, including those that would threaten its business model, future performance, solvency and liquidity; • the Principal risks and mitigations disclosures describing these risks and how emerging risks are identified and explaining how they are being managed and mitigated; and • the Directors’ explanation in the Viability Statement of how they have assessed the prospects of the Group, over what period they have done so and why they considered that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.		We are also required to review the Viability statement set out on page 129-130 under the Listing Rules. Our work is limited to assessing these matters in the context of only the knowledge acquired during our financial statements audit. As we cannot predict all future events or conditions, and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the absence of anything to report on these statements is not a guarantee as to the Group’s and Parent Company’s longer-term viability. Our reporting We have nothing material to add or draw attention to in relation to these disclosures. We have concluded that these disclosures are materially consistent with the financial statements and our audit knowledge.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

KPMG LLP’s independent auditor’s report to the members of 3i Group plc continued

3i Group plc | Annual report and accounts 2024 206

4. Key audit matters

What we mean
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest effect on: • the overall audit strategy; • the allocation of resources in the audit; and • directing the efforts of the engagement team.		We include below the Key Audit Matters (unchanged from FY2023) in decreasing order of audit significance together with our key audit procedures to address those matters and our results from those procedures. These matters were addressed, and our results are based on procedures undertaken, for the purpose of our audit of the financial statements as a whole. We do not provide a separate opinion on these matters.

4.1 Valuation of unquoted investments (Group and Parent Company)
Financial Statement Elements				Our assessment of risk vs FY2023	Our results
	FY2024	FY2023		Our assessment of the risk has increased since last year.	FY2024: Acceptable FY2023: Acceptable
Unquoted investments – Group and parent	£14,193m	£8,677m
Investments in investment entity subsidiaries	£5,804m	£7,844m
Interests in group entities – Parent Company,	£5,804m	£7,844m

Description of the Key Audit Matter		Our response to the risk
Subjective valuation The investment portfolio comprises a number of unquoted investments. These are held by the Group and the Parent Company As these investments are unquoted and illiquid, the fair value is determined through the application of valuation techniques. The application of valuation techniques involves the exercise of significant judgement by the Group and Parent Company in relation to the assumptions and inputs into the respective models (e.g. maintainability of the earnings, earnings multiple, and discount rate). Due to the continued geopolitical tension and global macro-economic downturn, several portfolio companies experienced difficult trading conditions, although the Company’s largest investment, Action, has demonstrated resilience. In comparison, some portfolio companies experienced company-specific issues including lower demand level for products and services and higher cost base. Accordingly, the level of judgement required to be exercised by the Group and the Parent Company, in particular as a result of the volatility in earnings (including earnings adjustments) and comparable company multiples, remains high in FY2024. In addition, the private asset market continues to experience challenges and a low level of market activity. This is primarily driven by the persistent high interest rate environment and low investor confidence during a period of geopolitical and macro-economic uncertainty. As a result, we have increased our focus on the level of judgement required for some key assumptions, namely valuations earnings adjustments and multiples (for assets valued using earnings multiple approach) and discount rates (for assets valued using the discounted cash flow approach). As part of our risk assessment, we considered management’s evaluation of the impact of the geopolitical uncertainty and macro-economic downturn on the valuation of portfolio companies and have designed our audit procedures accordingly. The effect of these matters is that, as part of our risk assessment, we determined that the subjective estimates in fair value measurement of certain unquoted investments, as detailed above, have a high degree of estimation uncertainty, with a potential range of reasonable outcomes greater than our materiality for the financial statements as a whole, and possibly many times that amount.		We performed the tests below rather than seeking to rely on any of these controls because the nature of the balance is such that we would expect to obtain audit evidence primarily through the detailed procedures described below. Control design: We obtained an understanding of any key changes to the processes and controls to determine the fair value of unquoted investments. We documented and assessed the design and implementation of the investment valuation processes and controls. Benchmarking assumptions: We challenged the Group and Parent Company on key judgements affecting portfolio company valuations, such as the maintainability of the earnings used in valuations, the appropriateness of earnings multiples, and projected cash flows, discount rates and terminal values for discounted cash flow valuations. We compared key underlying financial data inputs to external sources such as the investee company audited accounts, and management information as applicable. We challenged the assumptions around maintainability of earnings based on the plans of portfolio companies and whether these are achievable. In addition, we checked mathematical accuracy of the underlying models. Our valuation expertise: For a sample of investments, selected based on audit materiality and risk profile of each investment, we used our own valuations specialists to assist us in assessing the principles and appropriateness of the valuation methodology, critically reviewing the key assumptions, and independently providing a reasonable range for earnings multiples and discount rates. Understanding of the business: For the largest asset in the portfolio, Action, we visited Action’s Head Office in the Netherlands, and held discussions with Action management and the external audit team for Action to understand the business strategy, how accounting estimates are made and any key audit findings. Historical comparisons: We compared the actual performance or cash flows achieved by portfolio companies to the inputs used in the valuation model for the prior year to understand the reasons for any significant variances and determine whether they are indicative of bias and error in the Group’s approach to valuations. Assessing transparency: We considered the appropriateness, in accordance with relevant accounting standards, of the disclosures in respect of unquoted investments and the effect of changing one or more inputs to reasonably possible alternative valuation assumptions.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

KPMG LLP’s independent auditor’s report to the members of 3i Group plc continued

3i Group plc | Annual report and accounts 2024 207

Communications with the 3i Group plc Audit and Compliance Committee and Valuations committee Our discussions with and reporting to the Audit and Compliance Committee and the Valuations Committee included: • Our approach to the audit of the fair value of the unquoted investment portfolio including details of our planned substantive procedures and the extent of our controls reliance. • Our conclusions on the appropriateness of 3i’s fair value methodology and policy. • Our conclusions on the appropriateness of the valuation outcome for individual portfolio companies and, for the sample of investments subject to valuation specialists’ review, an indication of where the Group’s valuations multiple and discount rate (where applicable) falls within our acceptable range. • The adequacy of the sensitivity disclosures, particularly as they relate to valuation inputs. • Our assessment of whether any misstatement identified through these procedures was material. Areas of particular auditor judgement Auditor judgement is required to assess whether the Directors' estimate of the following key assumptions fall within an acceptable range: • For assets valued using an earnings multiple approach: – Determination of valuation multiples – Determination of maintainable earnings (including any earnings adjustments) • For assets valued using a discounted cash flow approach: – Discount rate – Projected cash flows – Terminal value exit multiple – Terminal value earnings Our results Based on the risk identified and our procedures performed, we consider the valuation of the unquoted investments to be acceptable (FY2023: acceptable).

Further information in the Annual Report and Accounts: See the Audit and Compliance Committee Report on page 122-127 and the Valuation Committee

report on page 131-135 for details on how the committees considered Valuation as an area of significant attention, and page 176 for the accounting policy for

unquoted investments.

4.2 Carried interest payable included in investments in investment entity subsidiaires (Group) and interests in group entities (Parent Company)
Financial Statement Elements				Our assessment of risk vs FY2023	Our results
	FY2024	FY2023		Our assessment of the risk is similar to FY2023.	FY2024: Acceptable FY2023: Acceptable
Investments in investment entity subsidiaries – Group	£5,804m	£7,844m
Carried interest payable included in investment entity subsidiaries – Group (Note 15)	£764m	£1,274m
Carried interest payable included Interests in Group entities – Parent Company amounting to £764m	£5,804m	£7,844m

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

KPMG LLP’s independent auditor’s report to the members of 3i Group plc continued

3i Group plc | Annual report and accounts 2024 208

Description of the Key Audit Matter

Our response to the risk

The valuation of investment entity subsidiaries and interests in group entities is primarily driven by the valuation of unquoted investments held (see key audit matter above) and the fair value of the carried interest liabilities. Carried interest payable is a liability for the investment entity subsidiaries and interest in group entities which reduces the fair value of investment entity subsidiaries and interest in group entities. Carried interest payable is calculated as a function of the investment returns that would be achieved if the investments within each fund or scheme were realised at reported fair value at the year-end date, subject to the relevant hurdle rates or performance conditions (as set out in relevant limited partnership agreements) being met. Calculation error Due to the number of bespoke, complex agreements and the manual nature of the calculation and recognition process, there is an increased risk of error in relation to carried interest payable.

We performed the tests below rather than seeking to rely on any of these controls because the nature of the balance is such that we would expect to obtain audit evidence primarily through the detailed procedures described below. Subjective valuation Our audit procedures for the valuation of unquoted investments held in investment entity subsidiaries and interest in group entities are consistent with those outlined in section 4.1. Control design: We obtained an understanding of the Group and Parent Company’s processes to determine the carried interest payable. We documented and assessed the design and implementation of the processes and controls. Test of details: We performed the following: • Agreed key inputs, including estimated valuations, relevant hurdles, and performance obligations to supporting documentation. • Independently reperformed calculations and compared the results to management’s calculations. • Independently reperformed calculations of the funds’ investment returns and compared them to the relevant hurdle rates or performance conditions. Methodology implementation: We agreed the methodology used in management’s calculations to the relevant limited partnership agreements. Assessing transparency: We considered the appropriateness, in accordance with relevant accounting standards, of the disclosures in respect of carried interest.

Communications with the 3i Group plc Audit and Compliance Committee and Valuations committee Our discussions with and reporting to the Audit and Compliance Committee and the Valuations Committee on unquoted investments are covered in section 4.1 including areas of particular auditor judgement. In addition, we have covered the following on carried interest: • Our approach to the audit of carried interest payable component of the fair value of investment entities and interest in group entities • Our assessment of whether any misstatement identified through these procedures was material • The results of our work over the carried interest payable balance held within investment entities and interest in group entities Our results Based on the risk identified and our procedures performed, we consider the valuation of carried interest payable included in investment entity subsidiaries and interest in group entities to be acceptable (FY2023: acceptable).

Further information in the Annual Report and Accounts: See the Audit and Compliance Committee Report on page 122-127 for details on how the Audit and

Compliance Committee considered carried interest as an area of significant attention, and page 182-183 for the accounting policy and sensitivity disclosure on

carried interest payable, and page 177 for accounting policy on investments in subsidiaries.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

KPMG LLP’s independent auditor’s report to the members of 3i Group plc continued

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5. Our ability to detect irregularities, and our response

Fraud – identifying and responding to risks of material misstatement due to fraud
Fraud risk assessment
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. In this risk assessment we considered the following: • Our meetings throughout the year with the Group General Counsel, internal audit and Head of Compliance including obtaining and reviewing supporting documentation such as: – Board and Audit and Compliance Committee minutes; – Internal audit reports; – Internal risk registers; and – Breaches registers.		• Enquiries of directors, finance team, the Group General Counsel, the Head of Compliance, internal audit, and the Audit and Compliance Committee as to whether they have knowledge of any actual, suspected, or alleged fraud. • Consideration of the Group’s remuneration policies, key drivers for remuneration and bonus levels; and • Discussions among the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. The engagement team includes audit partners and staff who have extensive experience of working with companies in the same sectors as 3i operates, and this experience was relevant to the discussion about where fraud risks may arise.
Risk communications
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit.
Fraud risks
As required by auditing standards, and taking into account possible pressures to meet performance targets, we performed procedures to address the risk of management override of controls, in particular the risk that Group management may be in a position to make inappropriate accounting entries and the risk of bias in accounting estimates and judgements such as the valuation of the unquoted investment portfolio and investment entity subsidiaries. On this audit we assessed there to be no fraud risk related to revenue recognition because the Group has a relatively simple revenue model with no material estimation or judgement; the simple nature and low volume of individual revenue transactions means there is a remote risk of material misstatement from fraudulent manipulation; and opportunities for a material misstatement due to fraudulent revenue recognition are limited due to the nature of the portfolio income received. We identified additional fraud risks relating to the valuation of unquoted investments held on balance sheet and within investment entity subsidiaries.		As these investments are unquoted and illiquid, they are valued using valuation techniques. Such techniques are subjective and involve the exercise of judgement by the Group and Parent Company over areas such as the maintainability of the earnings used in valuations, the determination of earnings multiples, and projected cash flows, discount factors and terminal values for discounted cash flow valuations. In addition, the valuation of unquoted investments drives the share price of the Group, which in turn drives remuneration of the Executive Directors, and is a key indicator for their performance. Due to the highly judgemental nature of these valuations, the reliance on unobservable inputs, and the linkage to Executive Directors’ remuneration, we consider there to be increased risk of fraud in relation to the valuation of unquoted investment portfolio. We have further identified that the group CEO is also the chair of the group’s largest investment, Action. The CEO can influence decisions made from an operational point of view and could affect the investment held in Action. We consider this to be increased risk of fraud in relation to the valuation of Action.
Link to KAMs
We have challenged key judgements and assumptions used in the valuation of unquoted investments. Further detail in respect to procedures		performed over the valuation of unquoted investments is contained within the key audit matter disclosures in section 4.1 of this report.
Procedures to address fraud risks
We performed substantive audit procedures including: • Identifying journal entries to test based on risk criteria and comparing the identified entries to supporting documentation. These included post close journals, those journals containing unusual pairings or those with same preparer and approvers; and		• Assessing significant accounting estimates, including valuation of unquoted investments and investment entity subsidiaries after deducting carried interest payable in investment entities as a liability, for any indicators of management bias.
Laws and regulations – identifying and responding to risks of material misstatement relating to compliance with laws and regulations
Laws and regulations risk assessment
Identifying and responding to risks of material misstatement related to compliance with laws and regulations We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the Directors and other management (as required by auditing standards), and from inspection of the Group’s regulatory and legal correspondence and discussed with the Directors and other management the policies and procedures regarding compliance with laws and regulations.		As the Group operates in a highly regulated environment, our assessment of risks involved gaining an understanding of the control environment including the entity’s procedures for complying with regulatory requirements. Our assessment included inspection of key frameworks, policies, and standards in place, understanding and evaluating the role of the compliance function in establishing these and monitoring compliance.
Risk communications
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.
Direct laws context and link to audit
The potential effect of these laws and regulations on the financial statements varies considerably. Firstly, the Group is subject to laws and regulations that directly affect the financial statements including: • financial reporting legislation (including related companies legislation),		• distributable profits legislation • taxation legislation We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

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3i Group plc | Annual report and accounts 2024 210

Most significant indirect law/regulation areas
Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or the loss of the Group’s license to operate in countries where the non-adherence to laws could prevent trading in such countries. We identified the following areas as those most likely to have such an effect: • Anti-bribery and corruption; • Competition legislation; • Pensions legislation;		• Regulatory capital and liquidity • Health and safety legislation; • Market abuse regulations; and • Certain aspects of company legislation recognising the financial and regulated nature of two of the Group’s subsidiaries and their legal form. Auditing standards limit the required audit procedures to identify non- compliance with these laws and regulations to enquiry of the Directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.		In addition, as with any audit, there remained a higher risk of non-detection of fraud, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non- compliance with all laws and regulations.

6. Our determination of materiality

The scope of our audit was influenced by our application of materiality. We set quantitative thresholds and overlay qualitative considerations to help us

determine the scope of our audit and the nature, timing and extent of our procedures, and in evaluating the effect of misstatements, both individually and in the

aggregate, on the financial statements as a whole.

£176m (FY2023: £141m) Materiality for the group financial statements as a whole		What we mean A quantitative reference for the purpose of planning and performing our audit. Basis for determining materiality and judgements applied Materiality for the Group financial statements as a whole was set at £176m (FY2023: £141m). Consistent with FY2023, we determined that Total Assets remains the main benchmark for the Group as the valuation of the investment portfolio remains the key financial measure.		Our Group materiality of £176m was determined by applying a percentage to the Total Assets. When using an asset related measure to determine overall materiality, KPMG’s approach for listed public interest entities considers a guideline range 0.5% - 1% of the measure. In setting overall Group materiality, we applied a percentage of 0.8% (FY2023:0.79%) to the benchmark. Materiality for the Parent Company financial statements as a whole was set at £159m (FY2023: £124m), determined with reference to a benchmark of Parent Company total assets, of which it represents 0.74% (FY2023: 0.70%).
£132m (FY2023: £105m) Performance materiality		What we mean Our procedures on individual account balances and disclosures were performed to a lower threshold, performance materiality, to reduce to an acceptable level the risk that individually immaterial misstatements in individual account balances add up to a material amount across the financial statements as a whole. Basis for determining performance materiality and judgements applied We have considered performance materiality at a level of 75% (FY2023: 75%) of materiality for 3i Group financial		statements as a whole to be appropriate. The Parent Company performance materiality was set at £119m (FY2023: £93m), which equates to 75% (FY2023: 75%) of materiality for the Parent Company financial statements as a whole. We applied this percentage in our determination of performance materiality because we did not identify any factors indicating an elevated level of risk.
£9m (FY2023: £7m) Audit misstatement posting threshold		What we mean This is the amount below which identified misstatements are considered to be clearly trivial from a quantitative point of view. We may become aware of misstatements below this threshold which could alter the nature, timing, and scope of our audit procedures, for example if we identify smaller misstatements which are indicators of fraud. This is also the amount above which all misstatements identified are communicated to 3i Group plc’s Audit and Compliance Committee.		Basis for determining the audit misstatement posting threshold and judgements applied We set our audit misstatement posting threshold at 5% (FY2023: 5%) of our materiality for the Group financial statements. We also report to the Audit and Compliance Committee any other identified misstatements that warrant reporting on qualitative grounds.

The overall materiality for the Group financial statements of £176m (FY2023: £141m) compares as follows to the main financial statement

caption amounts:

	Total Gross investment income		Group profit for the year		Total Group Net Assets
	FY2024	FY2023	FY2024	FY2023	FY2024	FY2023
Financial statement Caption	£3,877m	£4,666m	£3,836m	£4,573m	£20,170m	£16,844m
Group Materiality as % of caption	4.5%	3.0%	4.6%	3.1%	0.9%	0.8%

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3i Group plc | Annual report and accounts 2024 211

7. The scope of our audit

Group scope
What we mean How the Group audit team determined the procedures to be performed across the Group.		We have performed risk assessment and planning procedures to determine which of the Group’s components are likely to include risks of material misstatement to the Group financial statements, the type of procedures to be performed and the extent of involvement required. We have scoped in one component for the audit of financial information for consolidation purposes.
The scope of the audit work performed was fully substantive as we did not rely upon the Group's internal control over financial reporting We have performed audit procedures centrally across the Group in the following areas: • Journal entry testing;		• Share based payments; and • Defined Benefit Pension. In addition, we have performed Group level analysis on the remaining components to determine whether further risks of material misstatement exist in those components.
Group audit team oversight
What we mean The extent of the Group audit team’s involvement in component audits.		Only the Parent Company was scoped in for full scope audit. As this audit is performed by the Group engagement team, no additional audit team oversight was required.

Scope	Number of components	Range of materiality applied
Full scope audit	1 (FY2023:1)	£159m (FY2023:£124m)
Audit of one or more account balances	0 (FY2023: 0)	n/a (FY2023: n/a)
Specified audit procedures	0 (FY2023: 0)	n/a (FY2023: n/a)

8. Other information in the annual report

The Directors are responsible for the other information presented in the Annual Report together with the financial statements. Our opinion on the financial

statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of

assurance conclusion thereon.

All other information
Our responsibility Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge.		Our reporting Based solely on that work we have not identified material misstatements or inconsistencies in the other information.
Strategic report and Directors’ report
Our responsibility and reporting Based solely on our work on the other information described above we report to you as follows: • we have not identified material misstatements in the strategic report and the Directors’ report; • in our opinion the information given in those reports for the financial year is consistent with the financial statements; and • in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Directors’ remuneration report
Our responsibility We are required to form an opinion as to whether the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006.		Our reporting In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006.
Corporate governance disclosures
Our responsibility We are required to perform procedures to identify whether there is a material inconsistency between the financial statements and our audit knowledge, and: • the Directors’ statement that they consider that the annual report and financial statements taken as a whole is fair, balanced and understandable, and provides the information necessary for shareholders to assess the Group’s position and performance, business model and strategy; • the section of the annual report describing the work of the Audit and Compliance Committee, including the significant issues that the Audit and Compliance Committee considered in relation to the financial statements, and how these issues were addressed; and • the section of the annual report that describes the review of the effectiveness of the Group’s risk management and internal control systems.		Our reporting Based on those procedures, we have concluded that each of these disclosures is materially consistent with the financial statements and our audit knowledge.

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3i Group plc | Annual report and accounts 2024 212

We are also required to review the part of the Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance Code specified by the Listing Rules for our review.		We have nothing to report in this respect.
Other matters on which we are required to report by exception
Our responsibility Under the Companies Act 2006, we are required to report to you if, in our opinion: • adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or • the Parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting records and returns; or • certain disclosures of directors’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit.		Our reporting We have nothing to report in these respects.

9. Respective responsibilities

Directors’ responsibilities

As explained more fully in their statement set out on page 155, the Directors are responsible for: the preparation of the financial statements including being

satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free

from material misstatement, whether due to fraud or error; assessing the Group and Parent Company’s ability to continue as a going concern, disclosing, as

applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or the Parent

Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud

or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in

accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,

individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.

The Company is required to include these financial statements in an annual financial report prepared using the single electronic reporting format specified in

the TD ESEF Regulation. This auditor’s report provides no assurance over whether the annual financial report has been prepared in accordance with that format.

10. The purpose of our audit work and to whom we owe our responsibilities

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been

undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose.

To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a body,

for our audit work, for this report, or for the opinions we have formed.

Jonathan Mills (Senior Statutory Auditor)

for and on behalf of KPMG LLP, Statutory Auditor

Chartered Accountants

15 Canada Square

Canary Wharf

London

E14 5GL

8 May 2024

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3i Group plc | Annual report and accounts 2024 213

What’s in this section
20 large investments	215
Portfolio valuation – an explanation	217
Information for shareholders	218
Glossary	220

Overview and strategy Business review Sustainability Performance and risk Governance Audited financial statements Portfolio and other information

3i Group plc | Annual report and accounts 2024 214

The 20 investments listed below account for 95% of the portfolio at 31 March 2024 (31 March 2023: 94%). All investments have been assessed

to establish whether they classify as accounting subsidiaries under IFRS and/or subsidiaries under the UK Companies Act. This assessment

forms the basis of our disclosure of accounting subsidiaries in the financial statements.

The UK Companies Act defines a subsidiary based on voting rights, with a greater than 50% majority of voting rights resulting in an entity

being classified as a subsidiary. IFRS 10 applies a wider test and, if a Group is exposed, or has rights to variable returns from its involvement

with the investee and has the ability to affect these returns through its power over the investee then it has control, and hence the investee is

deemed an accounting subsidiary. Controlled subsidiaries under IFRS are noted below. None of these investments are UK Companies Act

subsidiaries.

In accordance with Part 5 of The Alternative Investment Fund Managers Regulations 2013 (“the Regulations”), 3i Investments plc, as AIFM,

requires all controlled portfolio companies to make available to employees an annual report which meets the disclosure requirements

of the Regulations. These are available either on the portfolio company’s website or through filing with the relevant local authorities.

		Residual	Residual
	Business line	cost1	cost1	Valuation	Valuation
	Geography	March	March	March	March
Investment	First invested in	2024	2023	2024	2023	Relevant transactions
Description of business	Valuation basis	£m	£m	£m	£m	in the year
Action*	Private Equity	1,108	653	14,158	11,188	£762 million of capital
General merchandise discount retailer	Netherlands					restructuring proceeds
	2011/2020/2024					and a £375 million cash
	Earnings					dividend received.
						Completed a £455 million
						reinvestment
3i Infrastructure plc*	Infrastructure	305	305	879	841	£31 million dividend
Quoted investment company, investing in infrastructure	UK					received
	2007
	Quoted
Cirtec Medical*	Private Equity	172	172	586	552
Outsourced medical device manufacturing	US
	2017
	Earnings
Royal Sanders*	Private Equity	165	136	580	369	£109 million received
Private label and contract manufacturing producer of personal care products	Netherlands					from the refinancing, of
	2018					which £48 million is a
	Earnings					dividend. Completed £29
						million of further
						investment and acquired
						Lenhart in April 2023
Scandlines	Scandlines	530	530	519	554	£25 million dividend
Ferry operator between Denmark and Germany	Denmark/ Germany					received
	2018
	DCF
AES Engineering	Private Equity	30	30	403	351	£6 million dividend
Manufacturer of mechanical seals and provision of reliability services	UK					recorded. Acquisition of
	1996					Triseal in June 2023
	Earnings
nexeye*	Private Equity	270	269	377	393	Sale agreed in
Value-for-money optical retailer	Netherlands					April 2024
	2017
	Imminent sale
Tato	Private Equity	2	2	335	411	£7 million dividend
Manufacturer and seller of specialty chemicals	UK					recorded
	1989
	Earnings

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Performance and risk

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20 large investments

3i Group plc | Annual report and accounts 2024 215

		Residual	Residual
	Business line	cost1	cost1	Valuation	Valuation
	Geography	March	March	March	March
Investment	First invested in	2024	2023	2024	2023	Relevant transactions
Description of business	Valuation basis	£m	£m	£m	£m	in the year
SaniSure*	Private Equity	76	76	334	389
Manufacturer, distributor and integrator of single-use bioprocessing systems and components	US
	2019
	Earnings
Evernex*	Private Equity	316	299	331	305	Acquisition of Maminfo in
Provider of third-party maintenance services for data centre infrastructure	France					January 2024
	2019
	Earnings
Smarte Carte*	Infrastructure	194	189	306	300	£5 million distribution
Provider of self-serve vended luggage carts, electronic lockers and concession carts	US					received
	2017
	DCF
European Bakery Group*	Private Equity	84	46	267	73	EBG formed following the
Industrial bakery group specialised in home bake-off bread and snack products	Netherlands					acquisition of coolback in
	2021					July 2023 (3i further
	Earnings					investment of £38 million)
						and Panelto in August 2023
WP*	Private Equity	238	257	234	274	£42 million distribution
Global manufacturer of innovative plastic packaging solutions	Netherlands					received
	2015
	Earnings
MPM*	Private Equity	169	153	233	181
An international branded, premium and natural pet food company	UK
	2020
	Earnings
Luqom*	Private Equity	262	245	222	271	£6 million further
Online lighting specialist retailer	Germany					investment
	2017
	Earnings
ten23 health*	Private Equity	129	104	192	111	£25 million further
Biologics focused CDMO	Switzerland					investment
	2021
	Other
Audley Travel*	Private Equity	303	271	192	162
Provider of experiential tailor-made travel	UK
	2015
	Earnings
Q Holding*	Private Equity	162	162	150	117
Manufacturer of catheter products serving the medical device market	US
	2014
	Earnings
BoConcept*	Private Equity	121	110	133	160
Urban living designer	Denmark
	2016
	Earnings
Dynatect*	Private Equity	65	65	130	128
Manufacturer of engineered, mission critical protective equipment	US
	2014
	Earnings
		4,701	4,074	20,561	17,130

*Controlled in accordance with IFRS.

1 Residual cost includes cash investment and interest, net of cost disposed.

Overview and strategy

Business review

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Performance and risk

Governance

Audited financial statements

Portfolio and other information

20 large investments continued

3i Group plc | Annual report and accounts 2024 216

Policy

The valuation policy is the responsibility of the Board, with additional

oversight and annual review from the Valuations Committee. The

policy is reviewed at least annually, with the last update in January

2024 . Our policy is to value 3i’s investment portfolio at fair value

and we achieve this by valuing investments on an appropriate basis,

applying a consistent approach across the portfolio. The policy

ensures that the portfolio valuation is compliant with the fair value

guidelines under IFRS and, in so doing, is also compliant with

the IPEV guidelines. The policy covers the Group’s Private Equity,

Infrastructure and Scandlines investment valuations. Valuations

of the investment portfolio of the Group and its subsidiaries

are performed at each quarter end.

Fair value is the underlying principle and is defined as “the price

that would be received to sell an asset in an orderly transaction

between market participants at the measurement date” (IPEV

guidelines, December 2022). Fair value is an estimate and,

as such, determining fair value requires the use of judgement.

The quoted assets in our portfolio are valued at their closing

bid price at the balance sheet date. The majority of the portfolio,

however, is represented by unquoted investments.

Private Equity unquoted valuation

To arrive at the fair value of the Group’s unquoted Private Equity

investments, we first estimate the entire value of the company we

have invested in – the enterprise value. We then apportion that

enterprise value between 3i, other shareholders and lenders.

Determining enterprise value

The enterprise value is determined using one of a selection of

methodologies depending on the nature, facts and circumstances

of the investment.

Where possible, we use methodologies which draw heavily on

observable market prices, whether listed equity markets or reported

merger and acquisition transactions, and trading updates from our

portfolio.

As unquoted investments are not traded on an active market, the

Group adjusts the estimated enterprise value by a liquidity discount.

The liquidity discount is applied to the total enterprise value and we

apply a higher discount rate for investments where there are material

restrictions on our ability to sell at a time of our choosing.

Note 13 Fair values of assets and liabilities outlines in more detail

the range of valuation methodologies available to us, as well as the

inputs and adjustments necessary for each. Overall, we have seen

resilient performance across the portfolio, driven by a number of

assets in the value-for-money and private label consumer, healthcare

and infrastructure sectors. The fair value of each investment has been

assessed on a case-by-case basis considering historical, current and

forward looking data. Where forward-looking data forms the base of

a valuation, the accuracy, reliability and maintainability of these

forecasts has been considered.

Apportioning the enterprise value between 3i, other

shareholders and lenders

Once we have estimated the enterprise value, the following steps

are taken:

(1) We subtract the value of any claims, net of free cash balances

that are more senior to the most senior of our investments.

(2) The resulting attributable enterprise value is apportioned to

the Group’s investment, and equal ranking investments by other

parties, according to contractual terms and conditions, to arrive

at a fair value of the entirety of the investment. The value is then

distributed amongst the different loan, equity and other financial

instruments accordingly.

(3) If the value attributed to a specific shareholder loan investment

in a company is less than its carrying value, a shortfall is implied,

which is recognised in our valuation. In exceptional cases, we may

judge that the shortfall is temporary; to recognise the shortfall

in such a scenario would lead to unrepresentative volatility

and hence we may choose not to recognise the shortfall.

Other factors

In applying this framework, there are additional considerations

that are factored into the valuation of some assets.

Impacts from structuring

Structural rights are instruments convertible into equity or cash

at specific points in time or linked to specific events. For example,

where a majority shareholder chooses to sell, and we have a minority

interest, we may have the right to a minimum return on our

investment.

Debt instruments, in particular, may have structural rights. In the

valuation, it is assumed third parties, such as lenders or holders of

convertible instruments, fully exercise any structural rights they might

have if they are “in the money”, and that the value to the Group

may therefore be reduced by such rights held by third parties.

The Group’s own structural rights are valued on the basis they

are exercisable on the reporting date.

Assets classified as “terminal”

If we believe an investment has more than a 50% probability of failing

in the 12 months following the valuation date, we value the

investment on the basis of its expected recoverable amount in the

event of failure. It is important to distinguish between our investment

failing and the business failing; the failure of our investment does not

always mean that the business has failed, just that our recoverable

value has dropped significantly. This would generally result in the

equity and loan components of our investment being valued at nil.

Value movements in the period relating to investments classified as

terminal are classified as provisions in our value movement analysis.

Infrastructure unquoted valuation

The primary valuation methodology used for unquoted Infrastructure

investments is the DCF method. Fair value is estimated by deriving

the present value of the investment using reasonable assumptions of

expected future cash flows and the terminal value and date, and the

appropriate risk-adjusted discount rate that quantifies the risk

inherent to the investment. The discount rate is estimated with

reference to the market risk-free rate, a risk-adjusted premium and

information specific to the investment or market sector.

Scandlines unquoted valuation

Scandlines is valued on a DCF basis. This is consistent with

the Infrastructure methodology.

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Portfolio valuation – an explanation

3i Group plc | Annual report and accounts 2024 217

Financial calendar

Ex-dividend date	Thursday 20 June 2024
Record date	Friday 21 June 2024
Annual General Meeting	Thursday 27 June 2024
Second FY2024 dividend to be paid	Friday 26 July 2024
Half-year results (available online only)	November 2024
First FY2025 dividend expected to be paid	January 2025

Information on ordinary shares

Shareholder profile: Location of investors at 31 March 2024

UK	51%
North America	31%
Continental Europe	15%
Other international	3%

Share price

Share price at 28 March 2024	2,809
High during the year 26 March 2024	2,822
Low during the year 5 April 2023	1,665

Dividends paid in the year to 31 March 2024

Second FY2023 dividend, paid 28 July 2023	29.75p
First FY2024 dividend, paid 12 January 2024	26.50p

Balance analysis summary

	Number of holdings			Balance as at 31 March 2024
Range	Individuals	Corporate bodies	Number of shares	% shares	Total holdings	Individual shares	Corporate shares
1–1,000	9,133	184	3,934,434	0.40	9,314	3,861,132	73,302
1,001–10,000	3,880	408	10,001,266	1.03	4,288	8,358,215	1,643,051
10,001–100,000	98	546	22,401,298	2.30	644	2,225,996	20,175,302
100,001–1,000,000	5	414	145,311,165	14.93	419	1,005,489	144,305,676
1,000,001–10,000,000	–	130	375,504,746	38.58	130	–	375,504,746
10,000,001–highest	–	13	416,213,536	42.76	13	–	416,213,536
Total	13,116	1,695	973,366,445	100.00	14,808	15,450,832	957,915,613

The table above provides details of the number of shareholdings within each of the bands stated in the register of members at 31 March 2024.

It should be noted that because many individuals and institutions hold shares through nominees (such as brokers, investment managers

or investment platforms) the actual number of beneficial owners of shares will be greater than the numbers of holdings in the above table.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Information for shareholders

3i Group plc | Annual report and accounts 2024 218

The Common Reporting Standard

Tax legislation under the Organisation for Economic Co-operation

and Development (“OECD”) Common Reporting Standard for

Automatic Exchange of Financial Account Information requires

investment trust companies to provide information about certain

shareholders in the company to HMRC. As an investment trust

company, 3i Group plc is required to provide information annually to

HMRC on certain certificated shareholders and corporate entities.

This information includes country of tax residency as well as details of

shares held and dividends received. HMRC may in turn exchange

such information with the tax authorities of another country or

countries in which the shareholder may be tax resident, where those

countries (or tax authorities in those countries) have entered into

agreements with the UK to exchange financial account information.

Certain shareholders have been and will in future be sent a self-

certification form for the purposes of collecting required information.

Boiler room and other scams

Shareholders should be wary of any unsolicited investment advice,

offers to buy shares at a discounted price or offers to buy 3i

shareholdings. These fraudsters use persuasive and high-pressure

tactics to lure shareholders into scams. We have become aware

of what appears to be an increase in calls to current and former

3i shareholders.

The Financial Conduct Authority (“FCA”) has found that victims

of share fraud are often seasoned investors with victims losing

an average of £20,000.

Please keep in mind that firms authorised by the FCA are unlikely

to contact you unexpectedly with an offer to buy or sell shares.

You should consider getting independent financial or professional

advice before you hand over any money or even share any

information with them.

If you receive any unsolicited approaches or investment advice,

you should proceed with caution. Steps that you might wish to take

could include the following:

• always ensure the firm is on the FCA Register and is allowed to give

financial advice before handing over your money. You can check

at www.fca.org.uk/register;

• double-check the caller is from the firm they say they are – ask for

their name and telephone number and say you will call them back.

Check their identity by calling the firm using the contact number

listed on the FCA Register. This is important as there have been

instances where an authorised firm’s website has been cloned but

with a few subtle changes, such as a different phone number or

false email address;

• check the FCA’s list of known unauthorised overseas firms.

However, these firms change their name regularly, so even if a firm

is not listed it does not mean they are legitimate. Always check

that they are listed on the FCA Register; and

• if you have any doubts, call the FCA Consumer Helpline on

0800 111 6768. If you deal with an unauthorised firm,

you will not be eligible to receive payment under the

Financial Services Compensation Scheme.

Annual reports and Half-yearly reports online

If you would prefer to receive shareholder communications

electronically in future, including annual reports and notices

of meetings, please visit our Registrars’ website at

www.shareview.co.uk/clients/3isignup and follow the instructions

there to register.

The 2024 Half-yearly report will be available online only. Please

register to ensure you are notified when it becomes available

at www.3i.com/investor-relations/financial-news.

More general information on electronic communications is available

on our website at https://www.3i.com/investor-relations/

shareholder-centre/.

Investor relations enquiries

For all investor relations enquiries about 3i Group plc, including

requests for further copies of the Annual report and accounts,

please contact:

Investor relations

3i Group plc

16 Palace Street

London, SW1E 5JD

Telephone +44 (0)20 7975 3131

email IRTeam@3i.com

or visit the Investor relations section of our website at www.3i.com/

investor-relations, for full up-to-date investor relations information,

including the latest share price, results presentations and financial

news.

Registrars

For shareholder administration enquiries, including changes

of address please contact:

Equiniti

Aspect House

Spencer Road

Lancing

West Sussex, BN99 6DA

Telephone 0371 384 2031

Lines are open from 8.30am to 17.30pm (UK time), Monday to Friday

(excluding public holidays in England and Wales).

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Information for shareholders continued

3i Group plc | Annual report and accounts 2024 219

3i 2013-2016 vintage includes Audley Travel, Basic-Fit, Dynatect,

JMJ, Q Holding and WP. Realised investments include Aspen Pumps,

ATESTEO, Blue Interactive, Christ, Geka, Kinolt, Óticas Carol and

Scandlines further.

3i 2016-2019 vintage includes arrivia, BoConcept, Cirtec Medical,

Formel D, Luqom and nexeye. Realised investments include Havea,

Magnitude Software, Royal Sanders (transferred out of the vintage in

March 2024) and Schlemmer.

3i 2019-2022 vintage includes European Bakery Group, Evernex,

insightsoftware, MAIT, Mepal, MPM, ten23 health, SaniSure,

WilsonHCG, Yanga and YDEON.

3i 2022-2025 vintage includes Digital Barriers, Konges Sløjd,

VakantieDiscounter and xSuite

3i Buyouts 2010-2012 vintage includes Action. Realised

investments include Amor, Element, Etanco, Hilite, OneMed and

Trescal.

3i Growth 2010-2012 vintage includes BVG. Realised investments

include Element, Hilite, Go Outdoors, Loxam, Touchtunes and WFCI.

Alternative Investment Funds (“AIFs”) At 31 March 2024,

3i Investments plc as AIFM, managed seven AIFs. These were

3i Group plc, 3i Growth Capital B LP, 3i Growth Capital C LP,

3i Europartners Va LP, 3i Europartners Vb LP, 3i Managed

Infrastructure Acquisitions LP and 3i Infrastructure plc. 3i Investments

(Luxembourg) SA as AIFM, managed one AIF, 3i European

Operational Projects SCSp.

Alternative Investment Fund Manager (“AIFM”) is the regulated

manager of AIFs. Within 3i, these are 3i Investments plc and

3i Investments (Luxembourg) SA.

APAC The Asia Pacific region.

Approved Investment Trust Company This is a particular UK tax

status maintained by 3i Group plc, the parent company of 3i Group.

An approved Investment Trust company is a UK company which

meets certain conditions set out in the UK tax rules which include

a requirement for the company to undertake portfolio investment

activity that aims to spread investment risk and for the company’s

shares to be listed on an approved exchange. The “approved” status

for an investment trust must be agreed by the UK tax authorities

and its benefit is that certain profits of the company, principally

its capital profits, are not taxable in the UK.

Assets under management (“AUM”) A measure of the total

assets that 3i has to invest or manages on behalf of shareholders

and third-party investors for which it receives a fee. AUM is measured

at fair value. In the absence of a third-party fund in Private Equity,

it is not a measure of fee generating capability.

B2B Business-to-business.

Board The Board of Directors of the Company.

CAGR is the compound annual growth rate.

Capital redemption reserve is established in respect

of the redemption of the Company’s ordinary shares.

Capital reserve recognises all profits and losses that are capital

in nature or have been allocated to capital. Following changes

to the Companies Act, the Company amended its Articles

of Association at the 2012 Annual General Meeting to allow

these profits to be distributable by way of a dividend.

Carried interest payable is accrued on the realised and

unrealised profits generated taking relevant performance hurdles

into consideration, assuming all investments were realised at the

prevailing book value. Carried interest is only actually paid when

the relevant performance hurdles are met and the accrual is

discounted to reflect expected payment periods.

Carried interest receivable The Group earns a share of profits

from funds which it manages on behalf of third parties. These profits

are earned when the funds meet certain performance conditions and

are paid by the fund once these conditions have been met on a cash

basis. The carried interest receivable may be subject to clawback

provisions if the performance of the fund deteriorates following

carried interest being paid.

Company 3i Group plc.

DACH The region covering Austria, Germany and Switzerland.

Discounting The reduction in present value at a given date of a

future cash transaction at an assumed rate, using a discount factor

reflecting the time value of money.

EBITDA is defined as earnings before interest, taxation, depreciation

and amortisation and is used as the typical measure of portfolio

company performance.

EBITDA multiple Calculated as the enterprise value over EBITDA,

it is used to determine the value of a company.

EMEA The region covering Europe, the Middle East and Africa.

Executive Committee The Executive Committee is responsible

for the day-to-day running of the Group (see page 104).

Fair value movements on investment entity subsidiaries

The movement in the carrying value of Group subsidiaries, classified

as investment entities under IFRS 10, between the start and end

of the accounting period converted into sterling using the exchange

rates at the date of the movement.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Glossary

3i Group plc | Annual report and accounts 2024 220

Fair value through profit or loss (“FVTPL”) is an IFRS measurement

basis permitted for assets and liabilities which meet certain criteria.

Gains and losses on assets and liabilities measured as FVTPL are

recognised directly in the Statement of comprehensive income.

Fee income (or Fees receivable) is earned for providing services

to 3i’s portfolio companies and predominantly falls into one of two

categories. Negotiation and other transaction fees are earned for

providing transaction related services. Monitoring and other ongoing

service fees are earned for providing a range of services over

a period of time.

Fees receivable from external funds are earned for providing

management and advisory services to a variety of fund partnerships

and other entities. Fees are typically calculated as a percentage

of the cost or value of the assets managed during the year and are

paid quarterly, based on the assets under management to date.

Foreign exchange on investments arises on investments made

in currencies that are different from the functional currency of the

Company. Investments are translated at the exchange rate ruling

at the date of the transaction. At each subsequent reporting date

investments are translated to sterling at the exchange rate ruling

at that date.

Gross investment return (“GIR”) includes profit and loss on

realisations, increases and decreases in the value of the investments

we hold at the end of a period, any income received from the

investments such as interest, dividends and fee income, movements

in the fair value of derivatives and foreign exchange movements. GIR

is measured as a percentage of the opening portfolio value.

Interest income from investment portfolio is recognised

as it accrues. When the fair value of an investment is assessed to be

below the principal value of a loan, the Group recognises a provision

against any interest accrued from the date of the assessment going

forward until the investment is assessed to have recovered in value.

International Financial Reporting Standards (“IFRS”) are

accounting standards issued by the International Accounting

Standards Board (“IASB”). The Group’s consolidated financial

statements are prepared in accordance with UK adopted

international accounting standards.

Investment basis Accounts prepared assuming that IFRS 10 had not

been introduced. Under this basis, we fair value portfolio companies

at the level we believe provides useful comprehensive financial

information. The commentary in the Strategic report refers to this

basis as we believe it provides a more understandable view of our

performance.

IRR Internal Rate of Return.

Key Performance Indicator (“KPI”) is a measure by reference

to which the development, performance or position of the Group

can be measured effectively.

Like-for-like compare financial results in one period with those

for the previous period.

Liquidity includes cash and cash equivalents (as per the Investment

basis Consolidated cash flow statement) and undrawn RCF.

Money multiple is calculated as the cumulative distributions plus

any residual value divided by paid-in capital.

Net asset value (“NAV”) is a measure of the fair value of our

proprietary investments and the net costs of operating the business.

Operating cash profit is the difference between our cash income

(consisting of portfolio interest received, portfolio dividends received,

portfolio fees received and fees received from external funds as per

the Investment basis Consolidated cash flow statement) and our

operating expenses and lease payments (as per the Investment

basis Consolidated cash flow statement).

Operating profit includes gross investment return, management

fee income generated from managing external funds, the costs

of running our business, net interest payable, exchange movements,

other income, carried interest and tax.

Organic growth is the growth a company achieves by increasing

output and enhancing sales internally.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Glossary continued

3i Group plc | Annual report and accounts 2024 221

Performance fee receivable The Group earns a performance fee

from the investment management services it provides to 3i

Infrastructure plc (“3iN”) when 3iN’s total return for the year exceeds

a specified threshold. This fee is calculated on an annual basis

and paid in cash early in the next financial year.

Portfolio effect is the level of risk based on the diversity

of the investment portfolio.

Portfolio income is that which is directly related to the return from

individual investments. It is comprised of dividend income, income

from loans and receivables and fee income.

Proprietary Capital is shareholders’ capital which is available

to invest to generate profits.

Public Private Partnership (“PPP”) is a government service

or private business venture which is funded and operated through

a partnership of government and one or more private sector

companies.

Realised profits or losses over value on the disposal of

investments is the difference between the fair value of the

consideration received, less any directly attributable costs, on the sale

of equity and the repayment of loans and receivables and its carrying

value at the start of the accounting period, converted into sterling

using the exchange rates at the date of disposal.

Revenue reserve recognises all profits and losses that are revenue

in nature or have been allocated to revenue.

Revolving Credit Facility (“RCF”) The Group has access to a credit

line which allows us to access funds when required to improve our

liquidity.

Segmental reporting Operating segments are reported in a manner

consistent with the internal reporting provided to the Chief Executive

who is considered to be the Group’s chief operating decision maker.

All transactions between business segments are conducted on an

arm’s length basis, with intrasegment revenue and costs being

eliminated on consolidation. Income and expenses directly

associated with each segment are included in determining business

segment performance.

Share-based payment reserve is a reserve to recognise those

amounts in retained earnings in respect of share-based payments.

SORP means the Statement of Recommended Practice: Financial

Statements of Investment Trust Companies and Venture Capital

Trusts.

Syndication is the sale of part of our investment in a portfolio

company to a third party, usually within 12 months of our initial

investment and for the purposes of facilitating investment by a co-

investor or portfolio company management in line with our original

investment plan. A syndication is treated as a negative investment

rather than a realisation.

Total return comprises operating profit less tax charge less

movement in actuarial valuation of the historic defined benefit

pension scheme.

Total Shareholder Return (“TSR”) is the measure of the overall

return to shareholders and includes the movement in the share price

and any dividends paid, assuming that all dividends are reinvested

on their ex‑dividend date.

Translation reserve comprises all exchange differences arising from

the translation of the financial statements of international operations.

Unrealised profits or losses on the revaluation of investments is

the movement in the carrying value of investments between the start

and end of the accounting period converted into sterling using the

exchange rates at the date of the movement.

Overview and strategy

Business review

Sustainability

Performance and risk

Governance

Audited financial statements

Portfolio and other information

Glossary continued

3i Group plc | Annual report and accounts 2024 222

3i Group plc

Registered office: 16 Palace Street,

London, SW1E 5JD, UK

Registered in England No. 1142830

An investment company as defined by

section 833 of the Companies Act 2006

This report was printed by Pureprint Group using

their environmental print technology which

minimises the negative environmental impacts

of the printing process. Vegetable-based inks

were used throughout and 99% of the dry waste

and 95% of the cleaning solvents associated

with this production were recycled. This report

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ISO 14001 Environmental Management Systems

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a Carbon balanced paper which means that the

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have been measured and offset using the World

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FSC® – Forest Stewardship Council®

This ensures that there is an audited chain

of custody from the tree in the well-managed

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ISO 14001

A pattern of control for an environmental

management system against which an

organisation can be accredited by a third party.

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3i Group plc

www.3i.com

16 Palace Street, London, SW1E 5JD, UK

Telephone +44 (0)20 7975 3131

THR27388

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