VIN.L Regulatory News (VIN)

VALUE AND INCOME TRUST PLC

Annual financial report

FOR THE YEAR ENDED 31 MARCH 2015

SUMMARY

THE YEAR

· Net Asset Value total return (with debt at par value) of 2.5% over one year and 38.8% over three years.

· Share price total return of -1.7% over one year and 56.5% over three years.

· FTSE All-Share Index total return of 6.6% over one year and 35.4% over three years.

· Dividends for the year up 5.9% - increased for 28th consecutive year.

DIVIDEND

The Directors recommend that a final dividend of 4.70 pence per share (2014: 4.40 pence) is paid on 17 July 2015 to shareholders on the register on 19 June 2015. The ex-dividend date is 18 June 2015. An interim dividend of 4.30 pence per share (2014: 4.10 pence) was paid to shareholders on 2 January 2015.

STRATEGIC REPORT

CHAIRMAN'S STATEMENT

Over the year to 31 March 2015, Value and Income Trust's net asset value total return per share (that is taking the growth in net asset value and dividend together) was 2.5%. Our property portfolio had a good year and produced a total return of 13%. The performance of our equity portfolio was behind the Index, but it should be seen in the context of strong performance over the last three years and the general under performance of higher yielding shares in the UK during the last year.

The share price total return over the twelve months was -1.7% while the FTSE All-Share Index total return was 6.6% over the same period. Over three years the share price total return was 56.5% compared to the increase of the Index of 35.4%. Overall the result was sufficiently good to earn a performance fee of £215,000 for OLIM and £90,000 for OLIM Property.

The proposed final dividend of 4.70p would make total dividends for the year of 9.00p, an increase of 5.9%. Subject to approval at the 2015 Annual General Meeting, the final dividend would be payable on 17 July 2015 to shareholders on the register on 19 June 2015. It is good to be able to report that our dividend has been increased every year since the change of investment policy in 1986.

Value and Income Services Limited (VIS) is established as our Alternative Investment Fund Manager. BNP Paribas Securities Services is our depositary and custodian.

Our two debentures have covenants attached to them. Information about these is included in note 12 to the financial statements; there is plenty of headroom in terms of both capital and income. You will see from the property report that we decided in February to borrow £5 million for five years at an all-in rate of 4% p.a.; this money has been invested at 7% in leases that are index-related.

As this is written we remain fully invested. Our property portfolio is fully let with leases that have an unexpired length of 13½ years and of which 52% are index-related. Our equity portfolio yields 3.7% and the prospects for dividend growth are reasonably encouraging. Both of the portfolios provide good value when compared to the remarkably low yields available from UK gilts.

I hope that we shall see as many shareholders as possible at the Annual General Meeting on Friday 10 July 2015, which is to be held in Edinburgh this year. Our Managers will give a brief presentation on the outlook.

James Ferguson

3 June 2015

INVESTMENT MANAGERS' REPORTS

UK EQUITIES

Market Background

UK equities rose by 3.0% in the year to 31 March 2015, measured by the FTSE All Share Index. For the first nine months of VIT's year, the market moved within a very narrow range but, in the final quarter, fuelled by Quantitative Easing in the Eurozone and encouraging economic reports in the UK the Index rose by 3.7%. Within the overall market, higher yielding shares underperformed significantly, with a fall of 0.9% in the FTSE 350 Higher Yield Index but mid-cap companies outperformed with a rise of 5.0% in the FTSE 250 Index. Overseas, the American equity market rose by 10.4%. The dollar rose by 13.4% against the pound, greatly enhancing the returns to sterling based investors. German equities rose by a quarter but the euro fell by 12.1% against the pound, significantly reducing the return in sterling terms.

Bond yields fell further in all the main markets. In the UK, ten year gilt yields fell from 2.7% at the beginning of our year to 1.6% at the end of March 2015 and the total return on the FTSE All Stocks Index was 13.9%. When the ECB finally introduced a full programme of QE in January, bond yields in the Eurozone fell dramatically. German bond yields fell to just 0.2% and the former 'junk' areas of Italy and Spain ended March with yields similar to our gilt market. Bond yields everywhere demonstrated the desperate attempts by central banks to stimulate economic growth with loose monetary policies. By contrast, commodity prices continued to slide, led by the price of oil (-49%) and natural gas (-40%) and copper (-9%).

For investors in the UK equity market, there were several opposing trends. The domestic economy has continued to strengthen, a pattern which began in mid-2013, which marked the end of the downgrades in forecasts. UK GDP grew by 2.8% in 2014, the fastest among the developed countries, and has finally exceeded the level it reached before the collapse of the world banking system. Real wage growth was reported late in our year, again for the first time since 2008. A further helpful factor for UK GDP was the fall in the rate of reported inflation to zero in the early months of 2015. Economists are concerned about the weakness of the euro, which will make exports to Europe from the UK less competitive, and the failure of the economies in the Eurozone to grow. International terrorism has cast a heavy shadow on the global picture and Ebola was a major concern in the middle of our year. Political tensions have continued in Ukraine and Russia, with a detrimental effect on their economies, and the election of a left wing government in Greece again threatens the future of the euro.

Performance

After significant outperformance in recent years, VIT's equity performance this year was behind the All Share Index. In capital terms the portfolio fell by 0.5%, slightly less than the 0.9% fall in the Higher Yield Index. Including income, the total return was +3.4%, compared with the total return on the All Share Index of +6.5%. Over the last three years the performance of the portfolio has been +48.3% compared to the All Share Index return of +34.6%.

Our underweight allocations to the resource sectors of Oil & Gas and Mining made a positive contribution to performance. Our overweighting in Telecommunications (BT +15%) and Travel & Leisure also benefited the portfolio, in particular with Go Ahead Group (+25%) and Cineworld (+54%). In addition to the general underperformance of higher yielding shares, VIT's performance was negatively affected by the Retail sector (N Brown - 44%). Our large holding of Babcock in the Support Services sector fell by 17%, as investors worried about the acquisition of Avincis, the safety and rescue helicopter company which operates in mainland Europe.

Portfolio

Sales and purchases of equities over the year totalled £24.0m, with net sales of £2.2m. As the year progressed and the market became more volatile, we became a little more cautious about world growth and we reduced the investment in Rotork, which was our largest holding at the end of March 2014, by just over a quarter. Babcock was historically our second largest holding and we therefore sold the rights to the new shares issued for the acquisition of Avincis. In the media sector we took profits on Reed Elsevier and reinvested the proceeds in Daily Mail and General Trust, where we felt there was more potential for price appreciation. We sold the holding in Tesco as the sector became critically competitive and the management revealed serious accounting discrepancies.

In the second half of our year we reduced the holding in Pennon after strong performance and reinvested in Centrica. We reduced Legal and General and added to Johnson Matthey. We started two new holdings. Crest Nicholson is a housebuilder with a geographic focus on Southern England and Wales. It has one of the longest land banks in the industry and a differentiated design approach which appeals to both planners and buyers, and has scope to raise the annual number of units completed from 2,500 to 3,500. Sanne is a Jersey registered company and was a new issue just before the end of our year. Originally a private client focused fiduciary business, it has evolved into an independent and recognised global leader in fund and corporate services for institutional clients in alternative asset classes, with offices around the world. At the end of the year we held investments in 38 companies with a total value of £132.1m and a net yield of 3.7%.

Outlook

Recent equity market peaks have been powered by the ECB's announcement of the enlarged asset purchase programme of 60bn Euros per month which includes, for the first time, the purchase of sovereign debt, known as QE. Investors have also been encouraged by the announcement of falling levels of unemployment, now below 6%, a zero rate of inflation and real growth in wages. Prospects for rising consumer spending here in the UK look brighter than for the last five years or more and our GDP should continue to grow in 2015. We expect that government spending will continue to reduce as a proportion of GDP. This is necessary due to the enormous overhang of public sector debt which is 80% of UK GDP.

With spreading tensions in the Middle East and the Yemen, the UK market may be volatile over the next few months, but we believe that the investment case remains intact for long-term investors. Equity dividends continue to rise, and in the first quarter of 2015, the adjustment for dividends on the FTSE All Share Index rose by nearly 8%. Although the price earnings ratio is now around 15x, which is just above the long-term average of 14x, the average yield of 3.3% is more than double the yield of 1.6% available from ten year gilts.

Angela Lascelles

OLIM Limited

3 June 2015

PROPERTY PORTFOLIO

The Market

Commercial property values are now growing steadily in most areas of the United Kingdom, not just the hotspots in Central London. The total returns on the IPD Annual Index in 2014, at 17.7%, were the highest since 2005, with office and industrial property each returning 23% and retail property on 14%. The Scottish property market, however, has been under political pressure. Stamp duty on Scottish commercial properties changed on 1 April. It is now higher than in the rest of the United Kingdom on properties over £1.9m and lower on the rest.

After underperforming for some years, risky, shorter-let, "recovery stock" office and industrial properties led the market higher as they were seen to offer the best odds for short term capital growth, especially by aggressive overseas buyers. London office and retail rents are still rising, but Central London valuation yields are wafer-thin.

Two years into economic recovery, rental values are now improving across most regions and property types. Office and industrial/warehouse rents and tenant demand are growing as expected across much of Southern and Middle England. Average retail rental values stabilised in Spring 2014 and are now edging ahead. Intensive competitive pressure in retailing is still depressing retail rents where local spending power and population are in decline, usually in conurbations outside Southern England. But rents are growing again in some prosperous smaller towns, suburban high streets and edge of town locations throughout the United Kingdom as real consumer incomes move ahead. Medium term retail rental growth outside London will benefit from the rates revaluation, which will take effect in 2017, based on rents today rather than at their peak in 2008.

The internet continues to change established shopping patterns, but the more savvy retailers are turning it from a threat into an opportunity and many high streets are benefitting from new openings by convenience and discount stores, cafes and bar/restaurants. Leisure property capital and rental values are also rising, with strong operators such as Greene King (now including Spirit), Marstons, Mitchells and Butlers, Prezzo, Restaurant Group and Wetherspoons competing for new units both in and out of town. Household spending on eating out, for example, is estimated to be rising by 7% p.a. Leisure property is also rapidly gaining acceptance as a serious institutional investment, with health and fitness and cinemas leading the way in 2014 in the IPD rankings for net new investment. Voids and overrenting in the IPD Monthly Index are at their lowest levels since 2008, which augurs well for continuing rental growth in most sectors.

Demand for scarce investments with long index-related leases in most sectors is very strong, as insurance companies and pension funds seek to match their long-term annuity and inflation-linked liabilities with realistic returns from well let property instead of the "return-free risk" offered by index-linked gilts on negative real yields. But capital and rental values are falling for large supermarkets (the worst performing sub sector in IPD last year with a 6.2% return), in view of the rapid structural change highlighted by Tesco's and Morrison's troubles in particular. Consumers' preferences are moving rapidly towards more frequent trips to smaller, more convenient supermarkets combined with growth in on-line shopping for bulkier items.

UK Property simply offers outstanding value at a yield premium of 4 points over conventional gilts and 7 points over long-dated index-linked gilts. Long term property investors can lock in an average real yield premium at all-time high since index-linked gilts were first issued in the UK a generation ago. Property's prospects are also highly competitive with UK equities at almost double their running yield, with voids and tenant defaults declining and rental income from property portfolios growing again - the usual cyclical pattern at this stage of an economic recovery.

British and Irish banks continue to dispose of property owned by distressed borrowers and by sales of non-performing loan portfolios, formal Receiverships and "consensual sales" under the threat of Receivership. Most banks are also lending freely again on commercial as well as residential property. Reasonable quality property is still available from these bank-driven sales, but the prices are rising and the competition for larger lot sizes and portfolios is fierce, with US hedge funds competing at a premium for larger packages. Individual properties and small groups for sale between £2m and £10m still offer the best value, in the gap between private and institutional/overseas demand.

Average property capital values should continue to rise in 2015, giving average total returns of 10%-12%. Average rental values should also show useful real growth throughout 2015 as employment continues to grow and the economic recovery spreads to the parts of the United Kingdom furthest from London.

2014 was the best year for the British economy since the 2008 crash, with growth at almost 3%. 2015 may be slower. House prices in London have boiled over after their very rapid rise but most house prices elsewhere are benefitting from cuts in stamp duty. Consumer incomes are now clearly growing again in real terms, with average earnings growth around 2%, usefully above both the Retail Price Index at 0.5%, and the Consumer Price Index in negative territory. Falling commodity prices, especially oil, will give a welcome boost to British real incomes in 2015. The UK service sector is buoyant but manufacturing output, construction and investment remain patchy and the trade deficit, at 6% of GDP, may become a serious concern if our public sector deficit also stays high and Britain has to continue borrowing large sums from abroad for the foreseeable future. Abroad, the IMF is warning of several years of slow growth - the USA is performing reasonably, and the Eurozone GDP is edging ahead, but Greece and Russia are in serious trouble and China, India and Brazil continue to disappoint.

There is still no sign of the Bank of England Monetary Policy Committee raising interest rates, with market expectations delayed well into 2016. With ultra-low interest rates right across the yield curve in most developed economies, rises in short rates here may be small and slow unless sterling comes under sustained pressure. Meanwhile property's exceptionally high yield premium over both short and long-term interest rates provides solid medium-term protection against interest rate rises. Buying pressure from many new as well as established investors should keep prices rising throughout 2015. Affordable and rising real rents, and the specific property locations and types which deliver them, remain the key to high long term real returns when bought at realistic yields.

The Portfolio

VIT's property portfolio produced a total return of 13% over the year to March. The IPD Monthly Index return over the same period was 18%.

We concentrate on properties with strong income streams to meet the fixed interest payments on our debt. These have also produced good long-term capital performance. The total return on our property portfolio has averaged 9% a year over the past 5 and 10 years, 12% over 20 years and 13% over the 28 years since the start. These returns are below the IPD average over 5 years but above over longer periods. Real returns over the R.P.I. from VIT's property portfolio averaged 6% a year over the past 5 and 10 years and 8% a year over longer periods.

Two properties were sold for £1.9 million at a net yield of 4.7% during the year, in Central London and Haddington in Scotland. The proceeds of these sales, and a £5 million 5-year fixed-rate loan at 4% p.a. (including all fees), were reinvested at an average net initial yield of 7% in four Stonegate pub/restaurants in Bedford, Bournemouth, Coventry and Selby and a Prezzo restaurant in Brentwood. All these properties have index-related leases with R.P.I-linked rent reviews for 25 or 30 years without a break. They were bought for £7.5 million including purchase costs and valued at £7.75 million at our year end.

All properties are fully let on full repairing and insuring leases, with upward only rent reviews and an average unexpired lease length of 13½ years. The portfolio has been fully let and income-producing throughout the year, apart from two months' loss of rent at Haddington. 10% of the rental income is reviewed annually, with 90% five yearly. This year's purchases take the proportion of index-related income up to 52% of the portfolio (it was 35% three years ago).

The property portfolio has been funded for many years by long term fixed rate loans - £20 million of VIT 93/8% Debenture Stock repayable in 2026 and £15 million of VIT 11% Debenture Stock repayable in 2021. Because these Debenture Stocks were issued at a premium, their effective interest cost averaged 9%, which compares with the 13% p.a. long-term return on VIT's properties. Interest rates have now fallen so low compared to property yields that we decided to borrow £5 million in February for five years at a fixed interest rate, including all fees, of 4% p.a. and reinvest it in property let on good covenants on long index-related leases at 7% increasing VIT's net income by over £100,000 a year.

Results of Independent Revaluation

The VIT property portfolio was subject to an independent professional revaluation at 31 March 2015 by Savills, who have replaced Jones Lang LaSalle as the independent valuers.

The revaluation showed a value of £54,500,000. Our properties are revalued every six months, at 30 September and 31 March.

Capital values rose by 5% over the year and rental income rose by 1% on a like for like basis. Index-related properties performed best (+8½% in capital value) and Scottish properties worst (-10%). Thirty-one of the properties valued at 31 March 2015 were freehold or the Scottish equivalent and one is held on a long lease with 42 years to run.

Matthew Oakeshott

OLIM Property Limited

3 June 2015

BUSINESS REVIEW

This Business Review is intended to provide an overview of the strategy and business model of the Company as well as the key measures used by the Directors in overseeing its management. The Company is an investment trust company which invests in accordance with the investment aims and investment policy below.

The Group

On 28 March 2014, all of the assets and liabilities of Audax Properties plc (Audax), including the debenture stock previously issued by Audax, were transferred to the Company. On 31 January 2015, Audax was placed into members' voluntary liquidation.

In July 2014, Value and Income Services Limited (VIS), a wholly owned subsidiary of the Company, was authorised by the Financial Conduct Authority and was appointed as the Company's Alternative Investment Fund Manager (AIFM).

Investment Aims

The Company invests in higher yielding, less fashionable areas of the UK commercial property and quoted equity markets, particularly in medium and smaller sized companies. The Company aims to achieve long term real growth in dividends and capital value without undue risk.

Investment Policy

The Company's policy is to invest in quoted UK equities, UK commercial property and cash or near cash securities. It is not normally the Company's policy to invest in overseas shares or in unquoted companies. UK equities usually account for between half and three-quarters of the total portfolio and property for a quarter to a half but the asset allocation may go outside these ranges if relative market levels and investment value, or a desired increase in cash or near cash securities, make it appropriate.

The Company focuses on the fundamental values and incomes of businesses in which it invests - their profitability, cash flows, balance sheets, management and products or services - and the location, tenants and leases of its property investments. The equity portfolio has generally yielded more than the FTSE All-Share Index. The Group has held between 30 and 40 individual shareholdings and between 20 and 30 individual properties in recent years. However, as at the year end the number of individual properties increased to 32. These ranges may change as market conditions or the size of each portfolio vary in future. In order to limit the risk to the equity portfolio that is derived from any particular investment, no individual shareholding will account for more than 10% of the equity portfolio at the time of purchase.

The Company has, since 1986, had a long standing policy of increasing its exposure to equities and to property through the judicious use of borrowings. Until recently, all borrowings have been long term debentures to provide secure long term funding, avoiding the risks associated with short term funding of having to sell illiquid assets at a low point in markets if loans have to be repaid. On 26 February 2015, a five year secured term loan facility of £5m was arranged with Santander UK plc at a five year fixed interest rate of 4% p.a. including all fees.

Gearing has varied between 25% and 40% of the total portfolio. The Company will not raise new borrowings if total net borrowings would then represent more than 50% of the total assets. No material changes may be made to the Company's investment policy described above without the prior approval of shareholders by the passing of an Ordinary Resolution.

Performance, Results and Dividend

A review of the performance of the equity and property portfolios is detailed in the Chairman's Statement and the Investment Managers' Reports. The Directors recommend that a final dividend of 4.70 pence per share (2014: 4.40 pence) is paid on 17 July 2015 to shareholders on the register on 19 June 2015. The ex-dividend date is 18 June 2015.

An interim dividend of 4.30 pence per share (2014: 4.10 pence) was paid to shareholders on 2 January 2015.

The table below shows the revenue reserve position and dividends paid and payable by the Company, subject to shareholders approval of the proposed final dividend at the forthcoming Annual General Meeting.

Company Revenue

Reserves

Principal Risks and Uncertainties

The Board carries out a regular review of the risk environment in which the Group operates. The principal risks and uncertainties which affect the Group's business are:

Market risk

The fair value of, or future cash flows from, a financial instrument held by the Group may fluctuate because of changes in market prices. This market risk comprises three elements - price risk, interest rate risk and currency risk.

Price risk

Changes in market prices (other than those arising from interest rate or currency risk) may affect the value of the Group's investments.

It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a particular sector. For equities, asset allocation and stock selection, as set out in the Investment Policy, both act to reduce market risk. VIS delegates its portfolio management responsibilities to the Investment Managers, OLIM Limited (OLIM) and OLIM Property Limited (OLIM Property) (collectively, the Managers) who monitor market prices throughout the year and report to VIS and the Board, which meet regularly in order to review investment strategy. The equity investments held by the Group are listed on the UK Stock Exchange. All investment properties held by the Group are commercial properties located in the UK with long, strong income streams.

Interest rate risk

Interest rate movements may affect:

- the fair value of the investments in property; and

- the level of income receivable on cash deposits

The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment and borrowing decisions.

The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on a regular basis. Current borrowings comprise debenture stock and the five year secured term loan, providing secure long term funding. It is the Board's policy to maintain a gearing level, measured on the most stringent basis of calculation after netting off cash equivalents, of between 25% and 40%.

Currency risk

A small proportion of the Group's investment portfolio is invested in securities whose fair value and dividend stream are affected by movements in foreign exchange rates. It is not the Company's policy to hedge this risk.

Liquidity risk

This is the risk that the Group will encounter difficulty in meeting obligations associated with its financial liabilities. The Group's assets comprise of readily realisable securities which can be sold to meet commitments if required and investment properties which, by their nature, are less readily realisable. The maturity of the Company's existing borrowings is set out in the interest risk profile section of note 20 of the Financial Statements.

Credit risk

This is the failure of a counterparty to a transaction to discharge its obligations under that transaction that could result in the Group suffering a loss.

The risk is not significant and is managed as follows:

- investment transactions are carried out with a large number of brokers, whose credit standing is reviewed periodically by OLIM (who report to VIS) and limits are set on the amount that may be due from any one broker.

- the risk of counterparty exposure due to failed trades causing a loss to the Group is mitigated by the review of failed trade reports on a daily basis. In addition, a stock reconciliation to third party administrators' records is performed on a daily basis to ensure that discrepancies are picked up on a timely basis. OLIM's Compliance Officer (together with VIS) carry out periodic reviews of the Depositary's operations and report their findings to the OLIM and VIS Risk Management Committees. This review will also include checks on the maintenance and security of investments held.

- cash is held only with reputable banks with high quality external credit ratings which are monitored on a regular basis.

None of the Group's equity investments are secured by collateral or other credit enhancements.

Property risk

The Group's commercial property portfolio is subject to both market and specific property risk. Since the UK commercial property market has been markedly cyclical for many years, it is prudent to expect that to continue. The price and availability of credit, real economic growth and the constraints on the development of new property are the main influences on the property investment market.

Against that background, the specific risks to the income from the portfolio are tenants being unable to pay their rents and other charges, or leaving their properties at the end of their leases. All leases are on full repairing and insuring terms, with upward only rent reviews and the average unexpired lease length is 13½ years (2014: 13 years). OLIM Property is responsible for property investment management, with surveyors, solicitors and managing agents acting on the portfolio under OLIM Property's supervision.

Additional risks and uncertainties include:

§ Discount volatility: The Company's shares may trade at a price which represents a discount to its underlying net asset value;

§ Regulatory risk: The Group operates in a complex regulatory environment and faces a number of regulatory risks. A breach of Section 1158 of the Corporation Tax Act 2010 (Section 1158) would result in the Company being subject to capital gains tax on portfolio investments. Breaches of other regulations, including the Companies Act 2006, the UKLA Listing Rules or the UKLA Disclosure and Transparency Rules, could lead to a number of detrimental outcomes and reputational damage. Breaches of controls by service providers to the Company could also lead to reputational damage or loss. The Audit and Management Engagement Committee monitors compliance with regulations by reviewing internal control reports from the Administrator and the Managers.

The Alternative Investment Fund Managers Directive (AIFMD) introduced a new authorisation and supervisory regime for all managers of authorised investment funds in the European Union.

In accordance with the requirements of the AIFMD, the Company has appointed VIS as its AIFM and BNP Paribas Securities Services as its Depositary. The Board has put in place controls in the form of regular reporting from the AIFM and the Depositary to ensure that both are meeting their regulatory responsibilities in relation to the Company.

Key Performance Indicators

The Directors have identified the three key performance indicators below to determine the performance of the Company:

● Share price total return relative to the FTSE All-Share Index (total return);

● Net asset value total return relative to the FTSE All-Share Index (total return); and

● Dividend growth relative to the Retail Prices Index

At each Board Meeting, the Directors consider a number of performance measures to assess the Company's success in achieving its objectives.

Statement of Compliance with Investment Policy

The Company is adhering to its stated investment policy and managing the risks arising from it. This can be seen in various tables and charts throughout the Annual Report, and from the information provided in the Chairman's Statement, and the Investment Managers' Reports.

Employee, Environmental and Human Rights Policy

As an investment trust company, the Company has no direct employee or environmental responsibilities, nor is it responsible for the emission of greenhouse gases. Its principal responsibility to Shareholders is to ensure that the investment portfolio is properly managed and invested. The Company has no employees and accordingly, has no requirement to report separately on employment matters. Management of the investment portfolio is undertaken by the Managers through members of their portfolio management teams. In light of the nature of the Company's business, there are no relevant human rights issues and, therefore, the Company does not have a human rights policy.

Future Strategy

The Board and the Managers intend to maintain the strategic policies set out above for the year ending 31 March 2016 as it is believed that these are in the best interests of Shareholders.

James Ferguson

Chairman

3 June 2015

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare Financial Statements for each financial year. Under that law, the Directors are required to prepare the Group Financial Statements in accordance with IFRS as adopted by the EU and Article 4 of the EU IAS Regulation and have also chosen to prepare the parent company financial statements under IFRS as adopted by the EU. The Financial Statements are required by law to give a true and fair view of the state of affairs of the Company and of the net return of the Company for that period. In preparing these Financial Statements, the Directors are required to:

§ select suitable accounting policies and then apply them consistently;

§ make judgments and estimates that are reasonable and prudent;

§ state whether applicable IFRS have been followed, subject to any material departures disclosed and explained in the Financial Statements; and

§ prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping proper accounting records that disclose with adequate accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements comply with the Companies Act. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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 comply 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 websites hosted by the Managers. Legislation in the United Kingdom governing the preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.

The Directors are also responsible for ensuring that the Annual Report and Financial Statements, taken as a whole are fair balanced and understandable and provide the information necessary to assess the Company's performance, business model and strategy.

Directors' Responsibility Statement

Each Director confirms, to the best of his or her knowledge, that:

§ the Financial Statements have been prepared in accordance with the applicable accounting standards and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and its undertakings as at 31 March 2015 and for the year to that date; and that

§ 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 it faces.

The Directors confirm that the Annual Report and Financial Statements taken as a whole are fair, balanced and understandable and provide the information necessary to assess the Company's performance, business model and strategy.

For and on behalf of the Board of Value and Income Trust PLC

James Ferguson

3 June 2015

VALUE AND INCOME TRUST PLC

GROUP STATEMENT OF COMPREHENSIVE INCOME

The total column of this statement represents the Statement of Comprehensive Income of the Group, prepared in accordance with IFRS. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations.

All income is attributable to the equity holders of Value and Income Trust PLC, the parent company.

There are no minority interests.

The Board is proposing a final dividend of 4.70p per share, making a total dividend of 9.00p per

share for the year ended 31 March 2015 (2014: 8.50p per share) which, if approved, will be payable

on 17 July 2015 (see note 8).

VALUE AND INCOME TRUST PLC

COMPANY STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 March 2015

The total column of this statement represents the Statement of Comprehensive Income of the Company prepared in accordance with IFRS. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations.

All income is attributable to the equity holders of Value and Income Trust PLC, the parent company. There are no minority interests.

VALUE AND INCOME TRUST PLC

STATEMENT OF FINANCIAL POSITION

VALUE AND INCOME TRUST PLC

STATEMENTS OF CHANGES IN EQUITY

VALUE AND INCOME TRUST PLC

GROUP STATEMENT OF CASHFLOWS

For the year ended 31 March

VALUE AND INCOME TRUST PLC

COMPANY STATEMENT OF CASHFLOWS

For the year ended 31 March

 VALUE AND INCOME TRUST PLC

NOTES TO THE FINANCIAL STATEMENTS