Annual Financial Report

RNS Number : 2777U

Value and Income Trust plc

22 June 2009

 



VALUE AND INCOME TRUST PLC

ANNUAL FINANCIAL REPORT 

FOR THE YEAR ENDED 31 MARCH 2009

SUMMARY 

	31 March 2009	31 March 2008
Net asset value per share valuing debt at par (including revenue)	165.6p	251.0p
Net asset value per share valuing debt at market value (including revenue)	129.6p	222.7p
Ordinary share price	88.5p	166.0p
Total interim dividend and proposed final dividend per share	7.5p	7.4p
Total assets less current liabilities	£111.5 million	£151.8 million

THE YEAR

• Net Asset Value total return (with debt at market value) of -39.4% over one year and -37.2% over three years.

• Share price total return of -43.6% over one year and -56.1% over three years (FTSE All-Share Index total return of -29.3% over one year and -27.5% over three years).

• Dividends for the year up 1.4% - 22nd consecutive year of real increase.

CHAIRMAN'S STATEMENT

Value and Income Trust had another difficult year against a background of pronounced falls in the UK equity and property markets. Over the year to 31 March 2009, the net asset value total return per share (that is taking the growth in asset value and dividend together) fell by 39.4% with debt valued at market; the share price total return was worse at 43.6% as the discount to net asset value per share widened during the year. The FTSE All-Share Index total return fell by 29.3% over the same period. This result was a consequence of sticking to our policy of investing in higher yielding UK equities and commercial property financed in part by long term borrowing. Our approach has been successful in the past but was painful last year as the gearing worked against us. The position has reversed to some extent since VIT's year end with the share price having risen by 30% to 115.50 pence between 31 March and 29 May 2009. 

This was the first year in which the total return from our property portfolio was negative since the investment policy was changed in 1986. Over the years the performance of the property portfolio has been good and the return during recent dire conditions has continued to be relatively favourable. 

The proposed final dividend of 3.7p per share would make total dividends for the year of 7.5p, an increase of 1.4%, and would be payable on 17 July 2009 to shareholders on the register on 19 June 2009. The ex dividend date will be 17 June 2009.

We received a number of enquiries during the year about the covenants attaching to our two debentures. More information about these is included in Note 12 to the Financial Statements; you will see from this disclosure that there is plenty of headroom on both covenants in terms of capital and income.

I am pleased to report that David Smith will be joining the Board in July. He retired in 2008 from Shepherd and Wedderburn, solicitors, where he was a partner for 34 years, specialising in commercial property. 

You will see in the Managers' Report their view that, by historical standards, both equity and property markets provide good value in relation to long gilts. This is particularly marked in property where the disparity is as wide as it has been in recent memory. As a consequence, we made our first new investment in property since April 2004 this January; the details of which are shown in the Manager's Property Report. At the moment the outlook for dividend income from UK equities for this current financial year is uncertain and so it is too early for us to make a forecast for VIT's dividend.

I hope that we shall see as many shareholders as possible at the Annual General Meeting on Friday 10 July 2009 which is to be held in Edinburgh this year. There will be a brief presentation on the investment outlook.

James Ferguson

29 May 2009

  MANAGER'S REPORT

EQUITY PORTFOLIO

MARKET BACKGROUND

UK equities fell by 29.3% in VIT's year to end March 2009, as measured by the FTSE All Share Index. Within this overall trend, medium and small sized companies fell even more with declines of 36.3% in the FTSE 250 Index and 42.5% in the FTSE Small-cap Index. World equity markets fell on average by 44% measured in dollars, with the USA at -40%, Germany at -50% and Emerging Markets -49%. Companies have had to trade against the most unsettled economic period in history. At March 31st 2008 the price of Brent crude oil was $100 per barrel, but three months later it almost reached $150. Thereafter it gradually fell back, fell below $40 in December and closed our year at $49. Bank base rate was 5.25% a year ago, but by the close of March this year it was only 0.5%. Sterling has fallen heavily against the dollar during the year (1.99 to 1.43$ per pound) and euro (1.25 to 1.08 euro to the pound). Gilts have benefitted from falling interest rates with yields on 20 year stocks falling from 4.5% to 4.2%.

The background to this extraordinary turbulence has been the global banking crisis which intensified greatly after the collapse of Lehman Brothers in September 2008. Until the end of August, the fall in UK equities was relatively modest at 2%. In the first half of 2008, economic growth was slowing, though was still just positive, but in September companies reported very severe declines in sales as the availability of bank finance dried up across the country. UK equities fell by 31% from the end of August to the end of our year, reflecting the economic decline following the demise of Lehman Brothers. Early in our year the world was worried about the likelihood of rising inflation as the price of oil and other commodities continued to rocket. When, however, the scale of September's banking crisis became apparent, these prices fell sharply. Monetary policy was loosened in progressive steps with interest rates reduced almost to zero, and huge sums of public funds were injected into the banking system and parts of industry. Towards the end of our year, the UK Government resorted to quantitative easing, or printing money as the process is more accurately described. Deflation had replaced inflation as the economic fear especially with the overhang of government debt which had developed following the events of the autumn.

PERFORMANCE

VIT's Aims of the Trust are stated as 'investment in higher-yielding, less fashionable areas of the.…quoted equity markets, particularly in medium and smaller sized companies.' After several years of outperformance in this part of the market, the last two years have been relatively poor. Against the market fall overall of 32.2%, small companies fell by 42.5%, and mid cap companies by 36.3%. High-yielding companies performed in line with the All Share Index. VIT's equity performance reflected these trends and had a total return of -29.7% which is just below the All Share Index total return of -29.3%. 

PORTFOLIO

Transactions during the year totalled £28.43m. We continued to alter the portfolio significantly as the events of the year unfolded. We sold all banks other than HSBC, when it became clear that they would cease to pay dividends and before the Government was forced to intervene to support them. We reduced the holdings in both oil companies, and we also reduced the large holdings in VT Group and Rotork, as both had performed well in the falling market conditions, and represented a very high percentage of our equity portfolio relative to their market position. Early in our year we sold Wolseley as the prospect of a recovery in American construction grew ever more remote, and later in the year we sold Headlam, where the dividend income was set to decline. We sold Renishaw and switched into the more defensive electronic company Spectris, and we switched Yule Catto into Croda in the chemical sector. We sold International Personal Finance due to the declining economic prospects in Eastern Europe.

Our strategy in our sales was to diversify from the very large holdings in the mid cap part of the market, by reducing VT Group and Rotork, and in the oil sector, and to continue to weed out the companies which were particularly vulnerable to the deepening recession. Our buying strategy was to take advantage of opportunities in the very depressed markets in the second half of our year to buy quality companies on very low market valuations. We bought new holdings in AMEC, Go Ahead Group and Britvic in these circumstances. We also bought new holdings in Assura, Reed Elsevier and Unilever apart from those already mentioned in our switches. In the mining sector, which we were unable to invest in previously due to the low yields on the companies, we found opportunities to invest in Rio Tinto, which we later sold, and BHP Billiton. We added to many of our smaller companies in very depressed market conditions and were particularly concentrating on investing to obtain relatively secure income streams. At the end of the year we were holding 36 companies with an average net yield of 6.4%.

OUTLOOK

Huge rights issues announced by HSBC and other companies in the last few months initially shocked the market, but as the take up of the various issues was successfully achieved, confidence has begun to return to investors. Retail sales were surprisingly resilient after Christmas, weakened in February, but were stronger than expected again in March.

There are some signs of renewed interest in residential property. Signs of an economic spring are being spotted in a number of gardens, and there seems to be confidence returning in the banking sector, though the winter frost may return before there is a lasting improvement.

The recession is likely to last for the rest of 2009, with some forecasts of a fall in GDP for 2009 of more than 3% in the UK, but expectations for 2010 GDP show a better picture, with some expecting an end to the recession for the year as a whole. We have seen some substantial dividend cuts in recent announcements, particularly in banks and insurance companies, and in companies where borrowings are approaching bank covenants. So far in 2009 dividend income on the FTSE All Share Index has fallen by almost a third. This period compares with the first quarter of 2008 when all the main banks were increasing their dividends and before most of them fell into Government support. We expect the rate of fall in dividend payments to decelerate later in the year. 

Cash on deposit now gives little if any interest and gilts yield only 3.2% at the ten year date. Equities still yield more than 5% even after the removal of most bank dividends. We have seen a rally of more than 20% since early March and there has been good support for the very large rights issues of recent weeks. Companies and individuals have reined in their spending and gradually the enforced prudence will result in better capitalised corporate and personal finances. When this will begin to stimulate economic growth again is hard to judge, but the current valuation of the market and the prospect of an economic upturn in the second half of 2010 give grounds for optimism for long suffering equity holders.

29 May 2009

PROPERTY PORTFOLIO

THE MARKET

The United Kingdom commercial property market showed a total return of -22.2% in 2008, as measured by the IPD (Investment Property Databank) Annual Index. This was the worst nominal return since the start of the IPD Index in 1971 - the previous trough was -9.2% in 1990. Capital values fell on average by 26.2% (retail -26.5%, offices -26.6% and industrial/warehouse property -25.9%). Rental values fell by 1.3% (retail +0.2%, offices -4.0% and industrials -0.1%). The capital declines were due almost entirely to rising valuation yields, as credit became almost unobtainable and buyers were few and far between. The lending squeeze is far worse that the last property recession in the early 90's but interest rates and inflation are much lower. Rental value falls were concentrated in Central London - elsewhere in the United Kingdom rents were relatively stable, but with a downward trend accelerating at the year end. 

Most property market sectors showed similar returns, apart from standard (i.e. high street) shops, which proved relatively defensive with a return of -17.5%, and retail warehouses, the worst performer at -25.6%, and Central London offices (City -25.2%, West End -23.1%). In general, larger properties fell fastest in value. Pension and life insurance funds were over invested, and large loans were unavailable to property companies. Smaller properties, however, are a little more liquid, with demand from cash and lowly-geared buyers.

The debt markets remain frozen, with banks only now beginning to work through their bad property debts. With the public pressure on RBS and Lloyds (including HBOS) to concentrate lending on mainstream businesses and households, there will be very large property disposals over the next few years, but much of it will be of risky or part-let property on which the banks should not have lent in the first place. But for cash buyers, yields on really safe property let on long leases to strong tenants now offer exceptional value against long term bond yields and short term interest rates. The IPD average property yield, at 9.1%, now gives an unprecedented yield advantage of 5.3% over long term gilts. That discounts substantial falls in property rental values. Well-let commercial property is also very competitive with corporate bonds at these levels, particularly as, unlike a bond you still have a property to relet or sell in the event of default. Property is fairly valued against equities, where dividends remain the biggest uncertainty.

Economic activity in Britain is very weak - GDP may decline by over 3% in 2009, with no bottom in sight until well into 2010. The unprecedented collapse in the credit markets in autumn 2008, withdrawal of foreign banks and the low levels of business lending by British banks, even after they were re-capitalised, is destroying jobs and putting many previously solid companies at risk. Sterling has been devalued by a quarter against the dollar and almost a third against the euro, and the fall in official interest rates from 5% to 0.5% in six months and massive injections of liquidity are just starting to slow the British economy's rate of decline, and help our exporters. But job insecurity is keeping consumer confidence low, debt is a serious problem for many families and unemployment is rising rapidly. Even if average house prices halve from their wildly inflated 2007 peak, they would still be above their normal longterm ratio to average incomes and not easily affordable in many parts of the country. The retail price index is now falling and will stay subdued while the economy is in deep recession. But with a weak currency and ballooning government debt, inflation remains a long-term threat.

Property values are under the most severe downward pressure in the office and retail warehouse sectors. Central London office rents, which have always been highly cyclical, were driven up to unsustainable levels by the hedge fund and private equity boom of recent years. They are now in free fall, as investment and commercial banking activity has dried up and tens of thousands of financial services employees lose their jobs. Meanwhile massive office development completions, especially in the City, are hitting a soft market.

Tenants are struggling and rents falling on most out-of-town retail warehouse properties. Supermarkets, however, are still trading well and gaining market share. Shopping centres and high street shops are suffering rising vacancies, but they remain below other sectors, and retail sales figures are still showing little overall change from a year ago. There is however, more downward pressure on retail rents than in the early 90's recession, particularly as many retailers are exploiting new arrangements for 'prepack administrations' to re-negotiate leases.

Industrial and warehouse property is proving ever harder to re-let and vacancies are rising rapidly, but rental values may still slip back more slowly than in the more over-supplied office sector.

Average rental values on commercial property measured by IPD may decline by 15% - 20% on average in 2009 - with offices down around 25% (and perhaps 50% in Central London), retail property down by 15% and industrial/warehouses down about 10%. Capital values will also decline for most property over 2009, as banks foreclose on loans in default and finance for new purchases stays scarce, but values are now starting to stabilise for safe property with long leases and strong tenants. It will perform relatively well as it is supported by its unprecented yield advantage over bonds.

THE PORTFOLIO

VIT's property portfolio produced a total return of -11% over the year to March, compared with the IPD Monthly Index return of -25% over the twelve months. Over the longer term, VIT's property record against the main benchmark IPD Annual Index which covers calendar years and returned -22% in 2008. In January, we decided to reinvest the proceeds of £3million of property sales (made when the market was strong) in three London pubs and one in Canterbury, let to Shepherd Neame, the old-established Kent brewers, on 35 year leases with rent reviews every five years in line with the Retail Prices Index subject to a minimum uplift of 15%. The net initial yield on the purchases was 7.3%. As part of this sale and leaseback transaction, Shepherd Neame took back VIT's freehold property at Whitstable. Our properties lost less value than most portfolios last year because we have a wide geographical spread of mainly well-let, smaller properties where investor and tenant demand has not been in free fall. Rent reviews on six properties produced an extra £100,000 a year. Of the four properties let to Woolworths, who went into administration in December, Galashiels was assigned to a new tenant, Home Bargains, immediately and the lease extended by a further 10 years. Lymington has been let to 99p Stores at a higher rent on a ten year lease but with substantial incentives. Elgin is under offer to a multiple retailer, on a 10 year lease and Glasgow is being let with an option to purchase.

We concentrate on properties with long, strong income streams to meet the fixed interest payments on our long-term 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 years, 11% over 10 years, and 13% over the 22 years since the start. These returns are all 3% a year above the IPD averages. The weighted average unexpired lease length is 15 years. All properties except the former Woolworths stores in Elgin and Glasgow are fully let on full repairing and insuring leases, with upward only rent reviews, and 99% of income is reviewed five yearly. 

RESULTS OF INDEPENDENT REVALUATION

The VIT property portfolio, including properties held within our subsidiary Audax Properties plc, was subject to an independent professional revaluation by Messrs King Sturge and Co. at 31st March 2009. The revaluation showed a value of £44,850,000; properties within VIT were valued at £15,175,000 while Audax properties totalled £29,675,000. Our properties are revalued independently every six months, at 30th September and 31st March. The portfolio showed a capital fall of 11% over the past six months. Twenty eight of the properties valued at 31 March 2009 were freehold or the Scottish equivalent and one at Horsham is held on a long lease with 48 years to run.

29 May 2009

  BUSINESS REVIEW

The Directors have prepared this Business Review in accordance with the requirements of Section 417 of the Companies Act 2006.

A review of the Company's activities is given in the Chairman's Statement and in the Manager's Report which includes likely future developments of the business.

Aims of the Company and Investment Objective

Value and Income Trust ('VIT') is a specialist United Kingdom investment trust designed for both institutional and private investors whose shares are listed on the London Stock Exchange. VIT invests in higher-yielding, less fashionable areas of the UK commercial property and quoted equity markets, particularly in medium and smaller sized companies. VIT's aim is long term real growth in dividends and capital value.

Investment Policy

VIT's policy is to invest in quoted UK equities, UK commercial property and cash or near cash securities. It is VIT's policy not normally to invest in overseas shares or in unquoted companies. UK equities should 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 those ranges if relative market levels and investment value or a desired increase in cash or near cash securities make it appropriate.

VIT focuses on the fundamental values and incomes of the businesses in which it invests - their profitability, cashflows, balance sheets, management and products or services - and the location, tenants and leases of its property investments. The share portfolio has always yielded more than the FTSE All-Share Index. VIT has held between 30 and 40 individual shareholdings and between 20 and 30 individual properties in recent years, but both these ranges may change as market conditions or the size of each portfolio vary in future. No individual shareholding will account for more than 10% of the equity portfolio at the time of purchase.

VIT has had a long standing policy since 1986 of increasing its exposure to equities and, particularly, property through the judicious use of borrowings. 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. Gearing has varied between a quarter and two-fifths of the total portfolio. VIT will not raise new borrowings if total net borrowings would then represent more than half of the total assets.

Principal Risks and Uncertainties

The Directors have identified principal risks and uncertainties which affect its business and these are detailed in Note 20 to the Financial Statements. Additional risks include:

•     Discount volatility: The Company's shares may trade at a discount to its underlying net asset value.

•     Regulatory risk: The Company operates in a complex regulatory environment and faces a number of regulatory risks. Breaches of regulations, such as Section 842 of the Income and Corporation Taxes Act 1988, the UKLA Listing Rules and the Companies Act, could lead to a number of detrimental outcomes and reputational damage. The Audit and Management Engagement Committee monitors compliance with regulations by reviewing internal control reports from the Administrator and the Investment Manager, OLIM Limited ('OLIM').

Key Performance Indicators

The Directors have identified the Company's share price total return and net asset value total return, relative to the FTSE All-Share Index (total return) and the Company's dividend growth, relative to the Retail Prices Index, as the three key performance indicators for determining the progress of the Company and the relevant figures may be found in 'The Year', above.

Dividend

The Directors recommend that a final dividend of 3.7 pence per share (2008 - 3.7 pence) is paid on 17 July 2009 to shareholders on the register on 19 June 2009. The ex-dividend date is 17 June 2009. An interim dividend of 3.8 pence per share (2008 - 3.7 pence) was paid on 9 January 2009.

Principal Activity and Status

The business of the Company is that of an investment trust and the Directors do not envisage any change in this activity in the foreseeable future. The Company is registered as a public limited company and is an investment company as defined by Section 833 of the Companies Act 2006.

The Company has been approved by HM Revenue & Customs as an investment trust for the purposes of Section 842 of the Income and Corporation Taxes Act 1988 for the year ended 31 March 2008. The Directors are of the opinion, under advice, that the Company has conducted its affairs for the year ended 31 March 2009 so as to be able to continue to obtain approval as an investment trust under Section 842 of the Income and Corporation Taxes Act 1988 for that year, although approval for that year would be subject to review were there to be any enquiry under the Corporation Tax Self Assessment regime.

The Company's affairs have also been conducted in such a way as to permit its Ordinary shares to be included in Individual Savings Accounts and the Directors intend that the shares will continue to be eligible in the future.

The Company makes no political donations or expenditures or donations for charitable purposes and, in common with most investment trusts, has no employees.

Share Capital

During the year ended 31 March 2009, the Company had 45,549,975 ordinary shares of 10p nominal in issue. Each ordinary share entitles the holder to one vote on a show of hands and, on a poll, to one vote for every share held. There are no restrictions on the transfer of the ordinary shares.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and the Group financial Statements in accordance with applicable United Kingdom law and those International Financial Reporting Standards as adopted by the European Union.

The Directors are required to prepare Group financial statements for each financial year which present fairly the financial position of the Company and the Group and the financial performance and cash flows of the Group for that period; the Companies Act 1985 ('the Act') provides in relation to such financial statements that references in the relevant part of the Act to financial statements giving a true and fair view are references to their achieving a fair presentation. In preparing those Group financial statements the Directors are required to:

•     select suitable accounting policies and then apply them consistently;

•     make judgements and estimates that are reasonable and prudent;

•     state whether they have been prepared in accordance with IFRSs as adopted by the EU; and

•     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group will continue in business.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the Group financial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the Company and the Group 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 Directors' Report, Directors' Remuneration Report and Corporate Governance statement that comply with that law and those regulations.

The Directors are responsible for preparing the Annual Report in accordance with applicable law and regulations. The Directors confirm to the best of their knowledge, that:

•     the Financial Statements have been prepared in accordance with IFRSs give a true and fair view of the assets, liabilities, financial position and loss; and that

•     the Directors' Report includes a fair review of the development and performance of the business and the position of the Company together with a description of the principal risks and uncertainties that the Company faces.

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

James Ferguson

Chairman

29 May 2009

VALUE AND INCOME TRUST PLC

GROUP INCOME STATEMENT

	Year ended			Year ended
	31 March 2009 (Audited)			31 March 2008  (Audited)
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Investment income
Dividend income	4,350	-	4,350	4,368	-	4,368
	________	________	________	________	________	________
Rental income	3,314	-	3,314	3,284	-	3,284
Interest income on short-term deposits	215	-	215	205	-	205
	________	________	________	________	________	________
Other operating income	3,529	-	3,529	3,489	-	3,489
	________	________	________	________	________	________
Total revenue	7,879	-	7,879	7,857	-	7,857
Gains and losses on investments
Realised (losses)/gains on held-at-fair-value investments	-	(7,673)	(7,673)	-	5,451	5,451
Unrealised losses on investments	-	(32,380)	(32,380)	-	(28,069)	(28,069)
	________	________	________	________	________	________
Total income	7,879	(40,053)	(32,174)	7,857	(22,618)	(14,761)
	________	________	________	________	________	________
Expenses
Investment management fees	(253)	(591)	(844)	(367)	(855)	(1,222)
Other operating expenses	(402)	-	(402)	(396)	-	(396)
Finance costs	(3,501)	-	(3,501)	(3,501)	-	(3,501)
	________	________	________	________	________	________
Total expenses	(4,156)	(591)	(4,747)	(4,264)	(855)	(5,119)
	________	________	________	________	________	________
(Loss)/profit before tax	3,723	(40,644)	(36,921)	3,593	(23,473)	(19,880)
Taxation	-	1,400	1,400	-	1,310	1,310
	________	________	________	________	________	________
(Loss)/profit for the period	3,723	(39,244)	(35,521)	3,593	(22,163)	(18,570)
	________	________	________	________	________	________
Earnings per ordinary share (pence)	8.17	(86.15)	(77.98)	7.89	(48.66)	(40.77)
	________	________	________	________	________	________

VALUE AND INCOME TRUST PLC

COMPANY INCOME STATEMENT

	Year ended			Year ended
	31 March 2009 (Audited)			31 March 2008  (Audited)
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Investment income
Dividend income	4,350	-	4,350	4,368	-	4,368
	________	________	________	________	________	________
Rental income	1,195	-	1,195	1,191	-	1,191
Interest income on short-term deposits	188	-	188	162	-	162
	________	________	________	________	________	________
Other operating income	1,383	-	1,383	1,353	-	1,353
	________	________	________	________	________	________
Total revenue	5,733	-	5,733	5,721	-	5,721
Gains and losses on investments
Realised (losses)/gains on held-at-fair-value investments	-	(7,795)	(7,795)	-	5,451	5,451
Unrealised losses on investments	-	(30,794)	(30,794)	-	(26,754)	(26,754)
	________	________	________	________	________	________
Total income	5,733	(38,589)	(32,856)	5,721	(21,303)	(15,582)
	________	________	________	________	________	________
Expenses
Investment management fees	(169)	(394)	(563)	(254)	(593)	(847)
Other operating expenses	(268)	-	(268)	(291)	-	(291)
Finance costs	(1,851)	-	(1,851)	(1,851)	-	(1,851)
	________	________	________	________	________	________
Total expenses	(2,288)	(394)	(2,682)	(2,396)	(593)	(2,989)
	________	________	________	________	________	________
(Loss)/profit before tax	3,445	(38,983)	(35,538)	3,325	(21,896)	(18,571)
Taxation	17	-	17	1	-	1
	________	________	________	________	________	________
(Loss)/profit for the period	3,462	(38,983)	(35,521)	3,326	(21,896)	(18,570)
	________	________	________	________	________	________
Earnings per ordinary share (pence)	7.60	(85.58)	(77.98)	7.30	(48.07)	(40.77)
	________	________	________	________	________	________

The total column of this statement represents the Income Statement 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

GROUP BALANCE SHEET

	As at		As at
	31 March 2009 (Audited)		31 March 2008  (Audited)
	£'000	£'000	£'000	£'000
ASSETS
Non current assets
Investments held at fair value through profit or loss		62,301		92,063
Investment properties held at fair value through profit or loss		44,850		51,000
		__________		__________
		107,151		143,063
Current assets
Cash and cash equivalents	4,903		9,609
Other receivables	1,605		562
	__________		__________
		6,508		10,171
		__________		__________
TOTAL ASSETS		113,659		153,234
Current liabilities
Other payables		(2,189)		(1,406)
		__________		__________
		111,470		151,828
Non-current liabilities
Debenture stock	(35,420)		(35,444)
Deferred tax	(644)		(2,044)
	__________		__________
		(36,064)		(37,488)
		__________		__________
		75,406		114,340
		__________		__________
EQUITY
Called up share capital		4,555		4,555
Share premium		18,446		18,446
Retained earnings		52,405		91,339
		__________		__________
		75,406		114,340
		__________		__________
Net Asset Value per ordinary share (pence)		165.55		251.02
		__________		__________

  VALUE AND INCOME TRUST PLC

COMPANY BALANCE SHEET

	As at		As at
	31 March 2009 (Audited)		31 March 2008  (Audited)
	£'000	£'000	£'000	£'000
ASSETS
Non current assets
Investments held at fair value through profit or loss		76,427		110,944
Investment properties held at fair value through profit or loss		15,175		18,100
		__________		__________
		91,602		129,044
Current assets
Cash and cash equivalents	4,830		9,102
Other receivables	1,339		560
	__________		__________
		6,169		9,662
		__________		__________
TOTAL ASSETS		97,771		138,706
Current liabilities
Other payables		(1,945)		(3,922)
		__________		__________
		95,826		134,784
Non-current liabilities
Debenture stock	(20,420)		(20,444)
Deferred tax	-		-
	__________		__________
		(20,420)		(20,444)
		__________		__________
		75,406		114,340
		__________		__________
EQUITY
Called up share capital		4,555		4,555
Share premium		18,446		18,446
Retained earnings		52,405		91,339
		__________		__________
		75,406		114,340
		__________		__________
Net Asset Value per ordinary share (pence)		165.55		251.02
		__________		__________

VALUE AND INCOME TRUST PLC

GROUP STATEMENT OF CHANGES IN EQUITY

	Year ended 31 March 2009 (Audited)				Year ended 31 March 2008 (Audited)
	Share	Share	Retained		Share	Share	Retained
	capital	premium	earnings	Total	capital	premium	earnings	Total
	£000	£000	£000	£000	£000	£000	£000	£000
Net assets at 31 March 2008	4,555	18,446	91,339	114,340	4,555	18,446	113,189	136,190
Net loss for the year	-	-	(35,521)	(35,521)	-	-	(18,570)	(18,570)
Dividends paid	-	-	(3,413)	(3,413)	-	-	(3,280)	(3,280)
	_______	_______	________	_______	_______	_______	_______	_______
Net assets at 31 March 2009	4,555	18,446	52,405	75,406	4,555	18,446	91,339	114,340
	_______	_______	________	_______	_______	_______	_______	_______

COMPANY STATEMENT OF CHANGES IN EQUITY

	Year ended 31 March 2009 (Audited)				Year ended 31 March 2008 (Audited)
	Share	Share	Retained		Share	Share	Retained
	capital	premium	earnings	Total	capital	premium	earnings	Total
	£000	£000	£000	£000	£000	£000	£000	£000
Net assets at 31 March 2007	4,555	18,446	91,339	114,340	4,555	18,446	113,189	136,190
Net profit for the year	-	-	(35,521)	(35,521)	-	-	(18,570)	(18,570)
Dividends paid	-	-	(3,413)	(3,413)	-	-	(3,280)	(3,280)
	_______	_______	________	_______	_______	_______	_______	_______
Net assets at 31 March 2008	4,555	18,446	52,405	75,406	4,555	18,446	91,339	114,340
	_______	_______	________	_______	_______	_______	_______	_______

  VALUE AND INCOME TRUST PLC

GROUP STATEMENT OF CASH FLOWS

For the year ended 31 March 2009	2009			2008
	(Audited)			(Audited)
	£000	£000	£000		£000
Cash flows from operating activities
Dividend income received		4,705			4,430
Rental received		3,147			3,411
Interest received		215			206
Operating expenses paid		(1,552)			(2,213)
		__________			__________
NET CASH FROM OPERATING ACTIVITIES		6,515			5,834
Cash flows from investing activities
Purchase of investments	(18,214)		(25,800)
Sale of investments	13,931		34,114
NET CASH (OUTFLOW)/INFLOW FROM	__________		__________
INVESTING ACTIVITIES		(4,283)			8,314
Cash flow from financing activities
Interest paid	(3,525)		(3,525)
Dividends paid	(3,413)		(3,280)
	__________		__________
NET CASH FROM FINANCING ACTIVITIES		(6,938)			(6,805)
		__________			__________
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS		(4,706)			7,343
Cash and cash equivalents at 1 April 2008		9,609			2,266
		__________			__________
Cash and cash equivalents at 31 March 2009		4,903			9,609
		__________			__________

   NOTES TO FINANCIAL STATEMENTS:

1	Accounting policies The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) which comprise standards and interpretations approved by the International Accounting Standards Board (IASB) together with interpretations of the International Accounting Standards and Standing Interpretations Committee approved by the International Accounting Standards Committee (IASC) that remain in effect, and to the extent that they have been adopted by the European Union. The functional and reporting currency of the Group is pounds sterling because that is the currency of the primary economic environment in which the Group operates.
	(a)    Basis of preparation The financial statements have been prepared on the historical cost basis, except for the revaluation of certain financial assets. The principal accounting policies adopted are set out below. Where presentational guidance set out in the Statement of Recommended Practice Financial Statements of Investment Trust Companies and Venture Capital Trusts (the SORP) issued by the Association of Investment Companies (AIC) in January 2009 (and adopted early) is consistent with the requirements of IFRSs, the directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP. The directors are of the opinion that the Group is engaged in a single segment of business, being investment business.
	(b)      Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and the entity controlled by the Company (its subsidiary). Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. All intra-group transactions, balances, income and expenses are eliminated on consolidation. Audax Properties plc, a wholly owned subsidiary of the Company, charges expenses wholly to income.  On consolidation, however, an adjustment is made to charge 70% of the investment management fee paid by Audax Properties plc to capital. The allocation has no effect on the total return of the Company or the Group.
	(c)     Presentation of income statement In order to reflect better the activities of an investment trust company and in accordance with guidance issued by the AIC, supplementary information which analyses the income statement between items of a revenue and capital nature has been presented alongside the income statement. In accordance with the Company's status as a UK investment company under section 833 of the Companies Act 2006, net capital returns may not be distributed by way of dividend. Additionally the net revenue is the measure that the directors believe to be appropriate in assessing the Company's compliance with certain requirements set out in section 842 of the Income and Corporation Taxes Act 1988.
	(d)      Income Dividend income from investments is recognised as revenue for the period on an ex-dividend basis. Where no ex-dividend date is available, dividends receivable on or before the period end are treated as revenue for the period. Where the Group has elected to receive dividend income in the form of additional shares rather than cash, the amount of cash dividend foregone is recognised as income. Any excess in the value of shares received over the amount of cash dividend foregone is recognised as a gain in the income statement. Interest receivable from cash and short term deposits and interest payable is accrued to the end of the period. Rental and other income are recognised as earned.
	(e)      Expenses and Finance Costs All expenses and finance costs are accounted for on an accruals basis. Expenses are presented as capital where a connection with the maintenance or enhancement of the value of investments can be demonstrated. In this respect, the investment management fees are allocated 30% to revenue and 70% to capital to reflect the Board's expectations of long term investment returns. Any performance fees payable are allocated to capital, reflecting the fact that, although they are calculated on a total return basis, they are expected to be attributable largely to capital performance. It is normal practice for investment trust companies to allocate finance costs to capital on the same basis as the investment management fee allocation. However as the Company has a significant exposure to property, and property companies do not charge finance costs to capital, the directors consider it inappropriate to allocate finance costs to capital.
	(f)      Taxation Deferred tax is recognised in respect of all temporary differences that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more tax in the future or the right to pay less tax in the future have occurred at the balance sheet date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the temporary differences can be deducted. Due to the Company's status as an investment trust company, and the intention to continue to meet the conditions required to obtain approval for the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments. This is not the case for the subsidiary company and hence the Group where such provision is made, calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
	(g)     Dividends payable Interim dividends are recognised as a liability in the period in which they are paid as no further approval is required in respect of such dividends. Final dividends are recognised as a liability only after they have been approved by shareholders in general meeting.
	(h)     Investments  All investments have been designated upon initial recognition as fair value through profit or loss. Investments are recognised and derecognised on the trade date where a purchase or sale is under a contract whose terms require delivery within the timeframe established by the market concerned, and are initially measured at fair value. Subsequent to initial recognition, investments are recognised at fair value through profit or loss. For listed investments, this is deemed to be bid market prices or closing prices for SETS stocks sourced from the London Stock Exchange. SETS is the London Stock Exchange electronic trading service covering most of the market including all FTSE 100 constituents and most liquid FTSE 250 constituents along with some other securities. Gains and losses arising from changes in fair value are included in net profit or loss for the period as a capital item in the income statement and are ultimately recognised in the retained earnings. In respect of investment properties, fair value is established by half-yearly professional valuation on an open market basis by King Sturge and Co, Chartered Surveyors and Valuers and in accordance with the RICS Valuation Standards.
	(i)     Cash and cash equivalents Cash and cash equivalents comprises deposits held with banks.
	(j)      Non - current liabilities All loans and borrowings are initially recognised at cost, being the fair value of the consideration received, less issue costs where applicable. After initial recognition, all interest-bearing loans and borrowings are subsequently measured at amortised cost. Amortised cost is calculated by taking into account any discount or premium on settlement. The costs of arranging any interest-bearing loans are capitalised and amortised over the life of the loan.
	(k)    Adoption of new and revised Accounting Standards At the date of authorisation of these financial statements, financial standards, amendments to financial standards and interpretations were in issue, but were not yet effective. These have been applied to these financial statements. The directors anticipate that the adoption of these standards and interpretations in future periods will have no material impact on the financial statements of the Group.

		2009		2008
		Group	Company	Group	Company
		£000	£000	£000	£000
2	Income
	Investment income
	Dividends from listed investments in UK - franked	4,315	4,315	4,368	4,368
	Dividends from listed investments in UK - unfranked	35	35	-	-
		_________	_________	_________	_________
		4,350	4,350	4,368	4,368
	Other operating income
	Rental income	3,314	1,195	3,284	1,191
	Interest receivable on short term deposits	215	188	205	162
		_________	_________	_________	_________
	Total income	7,879	5,733	7,857	5,721
		_________	_________	_________	_________

3	Investment management fee
		2009			2008
		Revenue	Capital	Total	Revenue	Capital	Total
	Group	£000	£000	£000	£000	£000	£000
	Investment management fee	253	591	844	367	855	1,222
	Performance fee	-	-	-	-	-	-
		_______	_______	_______	_______	_______	_______
		253	591	844	367	855	1,222
		_______	_______	_______	_______	_______	_______
		2009			2008
		Revenue	Capital	Total	Revenue	Capital	Total
	Company	£000	£000	£000	£000	£000	£000
	Investment management fee	169	394	563	254	593	847
	Performance fee	-	-	-	-	-	-
		_______	_______	_______	_______	_______	_______
		169	394	563	254	593	847
		_______	_______	_______	_______	_______	_______

		2009		2008
		Group	Company	Group	Company
		£000	£000	£000	£000
4	Other operating expenses
	Auditors' remuneration
	- audit	12	9	11	8
	- other non-audit services	1	1	1	1
	- taxation services	2	1	1	1
	- out of pocket expenses	1	1	1	1
	Directors' fees	41	41	41	41
	Fees for secretarial services	130	87	125	83
	Other expenses	215	128	216	156
		____________	____________	____________	____________
		402	268	396	291
		____________	____________	____________	____________

Non executive directors' fees comprise the Chairman's fees of £17,000 (2008 - £17,000) and fees of £12,000 (2008 - £12,000) per annum paid to each other non-executive director.  The executive directors who served during the year received no emoluments directly from the company (2008 - nil). The executive directors are directors of OLIM Limited which received an investment management fee of £844,000 (2008 - £1,222,000) and a performance fee of £nil (2008 - £nil).

		2009		2008
		Group	Company	Group	Company
		£000	£000	£000	£000
5	Finance costs
	11% First Mortgage Debenture Stock 2021	1,650	-	1,650	-
	9.375% Debenture Stock 2026	1,875	1,875	1,875	1,875
	Less amortisation of issue premium	(24)	(24)	(24)	(24)
		___________	___________	___________	__________
		3,501	1,851	3,501	1,851
		___________	___________	___________	__________

6	Taxation
	a)    Analysis of the tax (credit)/charge for the year:
	Group
		2009			2008
		Revenue	Capital	Total	Revenue	Capital	Total
		£000	£000	£000	£000	£000	£000
	Corporation tax payable	-	-	-	-	-	-
	Decrease in deferred tax provision	-	(1,400)	(1,400)	-	(1,310)	(1,310)
		_______	_______	_______	_______	_______	_______
		-	(1,400)	(1,400)	-	(1,310)	(1,310)
		_______	_______	_______	_______	_______	_______
	Factors affecting the current tax (credit)/charge for year:
	Revenue / capital return on ordinary activities before tax			(36,921)			(19,880)
				________			________
	Tax thereon at 28% (2008 - 30%)			(10,338)			(5,964)
	Effects of:
	Non taxable UK dividends			(1,218)			(1,310)
	Losses on investments not taxable			9,815			5,621
	Excess expenses not utilised			341			489
	Reduction in tax rates - deferred tax			-			(146)
				________			________
				(1,400)			(1,310)
				________			________
	Company
		2009			2008
		Revenue	Capital	Total	Revenue	Capital	Total
		£000	£000	£000	£000	£000	£000
	Corporation tax credit	(17)	-	(17)	(1)	-	(1)
		_______	_______	_______	_______	_______	_______
		(17)	-	(17)	(1)	-	(1)
		_______	_______	_______	_______	_______	_______
	Factors affecting the current tax charge for year:
	Revenue / capital return on ordinary activities before tax			(35,538)			(18,571)
				________			________
	Tax thereon at 28% (2008 - 30%)			(9,951)			(5,571)
	Effects of:
	Non taxable UK dividends			(1,218)			(1,310)
	Losses on investments not taxable			10,805			6,391
	Excess expenses not utilised			364			490
	Group relief			(17)			(1)
				________			________
				(17)			(1)
				________			________

	b)     Factors affecting the tax charge for the year The Group has losses for tax purposes arising in the year of £1,218,000 (2008 - £1,631,000). Under current legislation, it is unlikely that these losses will be capable of offset against the Group's future taxable profits. Audax Properties plc revalues its property portfolio on a six monthly basis and is required to recognise a deferred tax liability in respect of all unrealised gains recognised. Any movement in this provision is recognised within taxation in the Group's Income Statement.
	c)     Factors affecting future tax charges Both the Company and Audax Properties plc have deferred tax assets of £4,273,000 (2008 - £3,932,000) and £61,000 (2008 - £61,000) respectively at 31 March 2009 relating to total accumulated unrelieved tax losses carried forward. These have not been recognised in the accounts as it is unlikely that they will be capable of offset against the Group's future taxable profits.

7	Return per ordinary share
	The return per ordinary share is based on the following figures:
		2009		2008
		Group	Company	Group	Company
		£000	£000	£000	£000
	Revenue return	3,723	3,462	3,593	3,326
	Capital return	(39,244)	(38,983)	(22,163)	(21,896)
	Weighted average ordinary shares in issue	45,549,975	45,549,975	45,549,975	45,549,975
	Return per share - revenue	8.17p	7.60p	7.89p	7.30p
	Return per share - capital	(86.15p)	(85.58p)	(48.66p)	(48.07p)
		___________	___________	___________	___________
	Total return per share	(77.98p)	(77.98p)	(40.77p)	(40.77p)
		___________	___________	___________	___________

		2009	2008
		£000	£000
8	Dividends
	Dividends on ordinary shares:
	Final dividend of 3.7p per share (2008 - 3.5p) paid 18 July 2008	1,685	1,594
	Interim dividend of 3.8p per share (2008 - 3.7p) paid 9 January 2009	1,731	1,686
	Unclaimed dividends refunded by Registrar	(3)	-
		__________	__________
	Dividends paid in the period	3,413	3,280
		__________	__________
	The proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. We note below the total dividend paid and proposed in respect of the financial year, which is the basis upon which the requirements of Section 842 ('s842') of the Income and Corporation Taxes Act 1988 are considered. The revenue available for distribution by way of dividend for the year is £3,462,000 (2008 - £3,326,000).
		2009	2008
		£000	£000
	Interim dividend for the year ended 31 March 2009 - 3.8p	1,731	1,686
	(2008 - 3.7p) paid 9 January 2009
	Proposed final dividend for the year ended 31 March 2009 - 3.7p	1,685	1,685
	(2008 - 3.7p) payable 17 July 2009
	Unclaimed dividends refunded by Registrar	(3)	-
		__________	__________
		3,413	3,371
		__________	__________

9	Investments
	Group
			Investment
		Equities	properties		Total
		£'000	£'000		£'000
	Cost at 31 March 2008	77,630	28,283		105,913
	Unrealised appreciation	14,433	22,717		37,150
		__________	__________		__________
	Valuation at 31 March 2008	92,063	51,000		143,063
	Purchases	14,999	4,195		19,194
	Sales proceeds	(13,890)	(1,163)		(15,053)
	Realised (losses)/gains on sales	(7,795)	122		(7,673)
	Movement in unrealised appreciation in year	(23,076)	(9,304)		(32,380)
		__________	__________		__________
	Valuation at 31 March 2009	62,301	44,850		107,151
		__________	__________		__________
	Company
			Investment
		Equities	properties		Total
		£'000	£'000		£'000
	Cost at 31 March 2008	77,655	11,300		88,955
	Unrealised appreciation	33,289	6,800		40,089
		__________	__________		__________
	Valuation at 31 March 2008	110,944	18,100		129,044
	Purchases	14,999	38		15,037
	Sales proceeds	(13,890)	-		(13,890)
	Realised losses on sales	(7,795)	-		(7,795)
	Movement in unrealised appreciation in year	(27,831)	(2,963)		(30,794)
		__________	__________		__________
	Valuation at 31 March 2009	76,427	15,175		91,602
		__________	__________		__________
	Transaction costs During the year expenses were incurred in acquiring and disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains and losses on investments in the Income Statement. The total costs were as follows:-
		2009		2008
		£'000		£'000
	Purchases	276		167
	Sales	32		57
		__________		__________
		308		224
		__________		__________

		2009		2008
		Group	Company	Group	Company
		£000	£000	£000	£000
10	Other receivables
	Amounts falling due within one year:
	Dividends receivable	178	178	533	533
	Amounts due from brokers	1,122	1,122	-	-
	Value Added Tax receivable	245	-	-	-
	Amounts due from subsidiary	-	17	-	-
	Prepayments and accrued income	60	22	29	27
		__________	__________	__________	__________
		1,605	1,339	562	560
		__________	__________	__________	__________
	The amount due from the subsidiary relates to an inter-company adjustment for group relief. (2008 - £1,000, which is reflected in Note 11)

		2009		2008
		Group	Company	Group	Company
		£000	£000	£000	£000
11	Other payables
	Amounts due to brokers	980	980	-	-
	Value Added Tax payable	-	43	102	50
	Amounts due to subsidiary	-	-	-	2,999
	Amounts due to OLIM Limited	68	45	-	-
	Accruals and other creditors	1,141	877	1,304	873
		__________	__________	__________	__________
		2,189	1,945	1,406	3,922
		__________	__________	__________	__________
	The amounts due to OLIM Limited comprise management fees for the month of March 2009, subsequently paid in April 2009. The amounts due to the subsidiary related to an interest free unsecured loan from Audax Properties plc to the Company. The loan was repaid during the year.

		2009			2008
		Group	Company	Group		Company
		£000	£000	£000		£000
12	Non-current liabilities
	9.375% Debenture Stock 2026	20,000	20,000	20,000		20,000
	Add:- Balance of premium less issue expenses	444	444	468		468
	Less : Credit to income for the year	(24)	(24)	(24)		(24)
		__________	__________	__________		__________
		20,420	20,420	20,444		20,444
	11% First Mortgage Debenture Stock 2021	15,000	-	15,000		-
		__________	__________	__________		__________
		35,420	20,420	35,444		20,444
		__________	__________	__________		__________
	The 11% First Mortgage Debenture Stock 2021 issued by Audax Properties plc is repayable at par on 31 March 2021 and is secured over specific assets of Audax Properties plc and the Company. The Trust Deed of the Audax Properties plc Debenture Stock contains four covenants, with which the Company must comply; the assets which are subject to charge and which secure the Debenture Stock may be owned by either Audax Properties plc or its parent company, Value and Income Trust. Firstly, the value of the assets should not be less than one and one-half times the amount of the Debenture Stock; secondly, the rental income from the assets should not be less than one and one-half times the annual interest of the Debenture Stock (£1.65 million); thirdly, not more than 20 per cent. of the total value of the assets should be attributable to a single property; and finally, not more than 10 per cent. of the assets should be attributable to leaseholds having an unexpired term of less than 50 years. The 9.375% Debenture Stock 2026 issued by Value and Income Trust plc is repayable at par on 30 November 2026 and is secured by a floating charge over the property and assets of the Company. The Trust Deed of the Value and Income Trust plc Debenture Stock contains restrictions and events of default. The restriction requires that the aggregate group borrowings, £35 million, must not at any time exceed the total group capital and reserves (equivalent to net assets of £75.4m as at 31 March 2009).

		2009		2008
		Group	Company	Group	Company
		£000	£000	£000	£000
13	Deferred tax
	Opening balance at 31 March 2008	2,044	-	3,354	-
	Decrease in deferred tax provision (see note 6)	(1,400)	-	(1,310)	-
		__________	__________	__________	__________
	Closing balance at 31 March 2009	644	-	2,044	-
		__________	__________	__________	__________
	Calculated as follows:-
	Unrealised gains subject to tax on realisation	2,694	-	7,696	-
	Less capital losses previously realised	(395)	-	(395)	-
		__________	__________	__________	__________
		2,299	-	7,301	-
		__________	__________	__________	__________
	Whereof 28% (2008 - 28%)	644	-	2,044	-
		__________	__________	__________	__________
	Under IAS 12, provision must be made for any potential tax liability on revaluation surpluses. As an investment trust, the Company does not incur capital gains tax. However, some properties are owned by Audax Properties plc, a subsidiary of the Company, either to ensure that the investment trust status tests are not breached or for other commercial reasons. Provision for capital gains tax has therefore been made for the revaluation surpluses on property assets held by the subsidiary to the extent that the gain cannot be sheltered by capital losses brought forward or by non trade losses.

		2009	2008
		£000	£000
14	Share capital
	Authorised:
	56,000,000 ordinary shares of 10p each (2008 - 56,000,000)	5,600	5,600
	13,000,000 6.25% convertible redeemable preference shares of £1	13,000	13,000
		__________	__________
		18,600	18,600
		__________	__________
	Allotted, called up and fully paid:
	45,549,975 ordinary shares of 10p each (2008 - 45,549,975)	4,555	4,555
		__________	__________

		2009		2008
		Group	Company	Group	Company
		£000	£000	£000	£000
15	Share premium
	Opening balance	18,446	18,446	18,446	18,446
		__________	__________	__________	__________

			2009					2008
			Group		Company			Group		Company
16	Retained earnings
	Opening balance at 31 March 2008		91,339		91,339			113,189		113,189
	Loss for the year		(35,521)		(35,521)			(18,570)		(18,570)
	Dividends paid (see note 8)		(3,413)		(3,413)			(3,280)		(3,280)
			__________		__________			__________		__________
	Closing balance at 31 March 2009		52,405		52,405			91,339		91,339
			__________		__________			__________		__________
	The table below shows the movement in retained earnings analysed between revenue (distributable) and capital (non-distributable) items:
		2009					2008
		Revenue		Capital		Total	Revenue		Capital		Total
		£000		£000		£000	£000		£000		£000
	Group
	Opening balance at 31 March 2008	3,163		88,176		91,339	2,850		110,339		113,189
	(Loss)/profit for the year	3,723		(39,244)		(35,521)	3,593		(22,163)		(18,570)
	Dividends paid (see note 8)	(3,413)		-		(3,413)	(3,280)		-		(3,280)
		________		________		________	________		________		________
	Closing balance at 31 March 2009	3,473		48,932		52,405	3,163		88,176		91,339
		________		________		________	________		________		________
	Company
	Opening balance at 31 March 2008	2,022		89,317		91,339	1,976		111,213		113,189
	(Loss)/profit for the year	3,462		(38,983)		(35,521)	3,326		(21,896)		(18,570)
	Dividends paid (see note 8)	(3,413)		-		(3,413)	(3,280)		-		(3,280)
		________		________		________	________		________		________
	Closing balance at 31 March 2009	2,071		50,334		52,405	2,022		89,317		91,339
		________		________		________	________		________		________

17

Net asset value per equity share The net asset value per ordinary share is based on net assets attributable of £75,406,000 (2008 - £114,340,000) and on 45,549,975 (2008 - 45,549,975) ordinary shares in issue at the year end. The net asset value per ordinary share, based on the net assets of the Group adjusted for borrowings at market value (see note 20) is 129.63p (2008 - 222.72p)

18	Reconciliation of income from operations before tax to net cash inflow from operating activities
		2009		2008
		Group	Company	Group	Company
		£000	£000	£000	£000
	Income from operations before tax	(32,174)	(32,856)	(14,761)	(15,582)
	Gains and losses on investments	40,053	38,589	22,618	21,303
	Investment management fee	(844)	(563)	(1,222)	(847)
	Other operating expenses	(402)	(268)	(396)	(291)
	Decrease in receivables	79	360	65	54
	(Decrease)/increase in other payables	(197)	42	(470)	(573)
		__________	__________	__________	__________
	Net cash from operating activities	6,515	5,304	5,834	4,064
		__________	__________	__________	__________

19

Related Party Transactions Angela Lascelles and Matthew Oakeshott are directors of OLIM Limited which has an agreement with the Company to provide investment management services, the terms of which are outlined in Note 3. Audax Properties plc is a wholly owned subsidiary of Value and Income Trust PLC and accordingly the latter is the ultimate controlling party. Details of the year end financial relationship between Audax Properties plc and Value and Income Trust PLC may be found in Note 11.

20		Financial instruments Risk management The Group's financial instruments comprise securities, property and other investments, cash balances, loans and debtors and creditors that arise directly from its operations; for example, in respect of sales and purchases awaiting settlement or debtors for accrued income. The Group also has the ability to enter into derivative transactions in the form of futures and options for the purpose of managing market risks arising from the Group's activities. The Manager has a dedicated investment management process which ensures that the Investment Policy is achieved. Stock selection procedures are in place based on the active portfolio management and identification of stocks. The portfolio is reviewed on a periodic basis by a senior investment manager and also by the Manager's Investment Committee. Additionally, the Manager's Compliance Officer continually monitors the Group's investment and borrowing powers and reports to the Manager's Risk Management Committee. The main risks that the Group faces from its financial instruments are: (i)    market price risk (comprising interest rate risk, currency risk and other price risk) (ii)    liquidity risk (iii)    credit risk The Board regularly reviews and agrees policies for managing each of these risks. The Manager's policies for managing these risks are summarised below and have been applied throughout the year.  The numerical disclosures exclude short-term debtors and creditors.
		(i)     Market price 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 - interest rate risk, currency risk and other price risk. Interest rate risk - the fair value of the investments in property - 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. Borrowings comprise debenture stock, 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%. Details of borrowings at 31 March 2009 are shown in note 12.
		Interest risk profile The interest rate risk profile of the portfolio of financial assets and liabilities at the balance sheet date was as follows:
		At 31 March 2009	Weighted average period for which rate is fixed Years	Weighted average interest rate %	Fixed rate £'000	Floating rate £'000
		Assets
		Sterling	-	-	-	4,903
			__________	__________	__________	__________
		Total assets	__________	__________	__________	__________
		At 31 March 2009	Weighted average period for which rate is fixed Years	Weighted average interest rate %	Fixed rate  £'000	Floating rate £'000
		Liabilities
		Sterling	15	10.07	35,000	-
			__________	__________	__________	__________
		Total liabilities			35,000	-
			__________	__________	__________	__________
		At 31 March 2008	Weighted average period for which rate is fixed Years	Weighted average interest rate %	Fixed rate £'000	Floating rate £'000
		Assets
		Sterling	-	4.27	-	9,609
			__________	__________	__________	__________
		Total assets			-	9,609
			__________	__________	__________	__________
		At 31 March 2008	Weighted average period for which rate is fixed Years	Weighted average interest rate %	Fixed rate £'000	Floating rate £'000
		Liabilities
		Sterling	16	10.07	35,000	-
			__________	__________	__________	__________
		Total liabilities			35,000	-
			__________	__________	__________	__________
		The weighted average interest rate is based on the current yield of each asset, weighted by its market value. The weighted average interest rate on debentures is based on the interest rate payable, weighted by the total value of the loans. The maturity dates of the Group's loans are shown in note 12.  The non-interest bearing assets represent the equity element of the portfolio and other receivables. The floating rate assets consist of cash deposits on call earning interest at prevailing market rates. The Group's equity and property portfolios and short term receivables and payables have been excluded from the above tables. All financial liabilities are measured at amortised cost. Interest rate sensitivity The sensitivity analyses below have been determined based on the exposure to interest rates at the balance sheet date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in the case of instruments that have floating rates.
		If interest rates had been 100 basis points higher or lower and all other variables were held constant, the Group's: -     profit for the year ended 31 March 2009 would increase/decrease by £96,000 (2008 - increase/decrease       by £23,000). This is mainly attributable to the Group's exposure to interest rates on its floating rate cash        balances. -     the Group holds no financial instruments that will have an equity reserve impact. In the opinion of the directors, the above sensitivity analyses are not representative of the year as a whole, since the level of exposure changes frequently as part of the interest rate risk management process used to meet the Group's objectives. 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 Group's policy to hedge this risk. Currency sensitivity There is no sensitivity analysis included as the Group has no outstanding foreign currency denominated monetary items. Where the Group's equity investments (which are non-monetary items) are affected, they have been included within the other price risk sensitivity analysis so as to show the overall level of exposure. Other price risk Other price risks (i.e. 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. Asset allocation and stock selection, as set out in the Investment Policy, both act to reduce market risk. The Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to review investment strategy. The investments held by the Group are listed on the UK Stock Exchange and all investment properties are commercial property located in UK with long strong income streams. The weighted average unexpired lease length is 15 years (2008 - 13 years) and all properties are fully let on full repairing and insuring leases with upward only rent reviews. Other price risk sensitivity If market prices at the balance sheet date had been 10% higher or lower, while all other variables remained constant, the return attributable to ordinary shareholders for the year ended 31 March 2009 would have increased/decreased by £9,884,000 (2008 - increase/decrease of £13,385,000) and equity reserves would have increased/ decreased by the same amount.
	(ii)     Liquidity risk This is the risk that the Group will encounter difficulty in meeting obligations associated with 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 rather less readily realisable. The maturity of the Group's existing borrowings is set out in the interest risk profile section of this note.
	(iii)    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 the Manager 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 monthly basis. In addition, the Custodian carries out a stock        reconciliation to third party administrators' records on a daily basis to ensure that discrepancies are       picked up on a timely basis. The Manager's Compliance department carries out periodic reviews of the        Custodian's operations and reports its findings to the Manager's Risk Management Committee. This       review will also include checks on the maintenance and security of investments held.  -     cash is held only with reputable banks None of the Group's assets is secured by collateral or other credit enhancements. Credit risk exposure In summary, compared to the amounts on the balance sheet, the maximum exposure to credit risk at 31 March was as follows:

		2009		2008
		Balance  Sheet  £'000	Maximum exposure £'000	Balance  Sheet  £'000	Maximum exposure £'000
	Non-current assets
	Investments held at fair value through profit or loss	107,151	147,439	143,063	177,764
	Current assets
	Other receivables	1,605	1,113	562	2,544
	Cash and cash equivalents	4,903	9,092	9,609	9,609
		__________	__________	__________	__________
		113,659	157,644	153,234	189,917
		__________	__________	__________	__________

(iv)     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 15 years (2008 - 13 years). OLIM is responsible for property investment management, with surveyors, solicitors and managing agents acting on the portfolio under OLIM's supervision. None of the Group's financial assets is past due or impaired. Fair values of financial assets and financial liabilities The fair value of borrowings has been calculated at £51,781,000 as at 31 March 2009 (2008 - £48,333,000) compared to a balance sheet value in the financial statements of £35,420,000 (2008 - £35,444,000) per note 12.  The fair values of the debentures are determined by comparison to the fair values of equivalent gilt edged securities, discounted to reflect the differing levels of credit worthiness of the borrowers. All other assets and liabilities of the Group are included in the balance sheet at fair value.

		Fair value		Carrying Value
		2009	2008	2009	2008
		£000	£000	£000	£000
	11% First Mortgage Debenture Stock 2021	22,824	21,090	15,000	15,000
	9.375% Debenture Stock 2026	28,957	27,243	20,420	20,444
		__________	__________	__________	__________
		51,781	48,333	35,420	35,444
		__________	__________	__________	__________

21    Contingent asset On 28 June 2007, the European Court of Justice ruled that management fees payable by investment trust companies should be exempt from VAT. HMRC announced on 5 November 2007 its intention not to appeal against this case to the UK VAT Tribunal and therefore protective claims which have been made in relation to the Company are being processed by HMRC with our Manager, OLIM Limited.  The Board is currently in the process of quantifying the potential repayment that should be due.  However, the amount the Company will receive, the period to which it will refer, and the timescale for receipt are all uncertain and hence the Company has made no provision in these financial statements for any such repayment.

Statutory Financial Statements and Annual General Meeting

The income statements, balance sheets, statements of changes in equity and cashflow statements set out above do not represent full accounts in accordance with Section 240 of the Companies Act 1985. The financial information for the year ended 31 March 2008 has been extracted from the Annual Report and Accounts of the Company which have been filed with the Registrar of Companies and restated where required as a result of the implementation of the new Financial Reporting Standards. The auditors' report on those accounts as originally filed was unqualified. The statutory accounts for the year ended 31 March 2009 are unqualified and will be delivered to the Registrar of Companies following the Company's Annual General Meeting which will be held at 12.30pm on Friday 10 July 2009 at 7th Floor, 40 Princes Street, Edinburgh, EH2 2BY.

Publication of Financial Statements

The Annual Report and Financial Statements were posted to shareholders in June 2009 and copies are available from the Manager, OLIM Limited, (www.olim.co.uk), Pollen House, 10/12 Cork Street, London, W1S 3NP or from the Secretary, Aberdeen Asset Management PLC, 7th Floor, 40 Princes Street, Edinburgh, EH2 2BY.

For Value and Income Trust plc

Aberdeen Asset Management PLC

Secretary

29 May 2009

END

 

END

 

 

FR SEUFFESUSEEM