Long, strong, indexed property income
VALUE AND INDEXED PROPERTY INCOME TRUST PLC
Annual report and accounts
2023
96%
EPCs rated
A - C
Fully Let
Fully Let
No Voids
100%
rent collection
3.9
%
average rate
7.9
years maturity
33
%
loan to value
12.6
years
weighted average
unexpired lease length
42
leases
96%
rent indexed
6.7
%
P.A
over 36 years
(RPI 3.7%)
-
7.8
%
over 1 year
(Index -13.0%)
5.7
%
P.A.
over 5 years
(Index 2.5% P.A.)
5.8
%
net initial
property yield
Debt
60
%
income
from top 6 tenants
Total property return
Annual dividend growth
Property yield
EPCs
Leases
Rent collection
Rent indexed
Debt
Long, strong, indexed property income
39
properties
3
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Value and Indexed Property Income Trust PLC (VIP - previously Value and Income Trust PLC)
is an investment trust company listed on the London Stock Exchange. It invests directly in UK
commercial property to deliver long, strong, index-related income. Its performance benchmark
is the MSCI UK Quarterly Property Index, the main benchmark for commercial property
performance. OLIM Property Limited is the Investment Manager.
VIP’s dividend per share has risen every year since 1986 when OLIM’s management began. It
has risen by 932% against the Retail Price Index rise of 265%. A first interim dividend of 3.0p
was paid on 28 October 2022, a second interim dividend of 3.1p was paid on 27 January 2023 and
a third interim dividend of 3.2p was paid on 28 April 2023. The targeted total dividend for the
full year is 12.9p (+2.4%). Our medium term dividend policy is for increases at least in line with
inflation, underpinned by VIP’s index-related property income. The dividend yield at 31 March
2023 was 6.3%.
VIP’s property portfolio delivered a total return of -7.8% over the year against -13.0% for the MSCI
UK Quarterly Property Index. Over the past 5 years the VIP property return was 5.7% p.a. (Index
2.4% p.a.) and over 36 years it was 11.7% p.a. (Index 8.1% p.a.).
SUMMARY
Borrowings
31 March 2023
31 March 2022
Average interest rate
3.9%
5.6%
Total loans (loan to value)
£50 million (33%)
£57 million (31%)
Loan maturity
7.9 years
6.2 years
VIP’s balance sheet and revenue account were significantly strengthened in June 2022 by
repaying the 9.375% 2026 Debenture Stock early, increasing an existing loan at an interest rate of
3.5%, and extending its repayment date from 2031 to 2033.
Over the past year, as the table shows, the average interest rate on VIP’s borrowings fell from 5.6%
to 3.9%, the loan to value ratio rose from 31% to 33% and the average loan length rose from 6.2
years to 7.9 years.
VIP property portfolio performance record over 36 years to 31 March 2023
-15
-12
-9
-6
-3
0
3
6
9
12
15
1 year
3 years
5 years
10 years
20 years
36 years
Total Annualised Returns %
VIP property
RPI
MSCI UK Quarterly Index
-
7.8
%
-
13.0
%
13.5
%
4.9
%
2.6
%
8.0
%
5.7
%
2.4
%
5.7
%
8.7
%
6.9
%
4.1
%
9.3
%
6.9
%
3.7
%
11.7
%
8.1
%
3.7
%
4
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Financial calendar
28 October 2022
First quarterly dividend of 3.0p per share for the year ended 31 March 2023
18 November 2022
Announcement of Half-Yearly Financial Report for the six months to 30 September 2022
27 January 2023
Second quarterly dividend of 3.1p per share for the year ended 31 March 2023
28 April 2023
Third quarterly dividend of 3.2p per share for the year ended 31 March 2023
26 June 2023
Announcement of Annual Financial Report for the year ended 31 March 2023
2 August 2023
Annual General Meeting, London (12.30pm)
4 August 2023
Final dividend of 3.6p per share payable for the year ended 31 March 2023
27 October 2023
First quarterly dividend payable for the year ending 31 March 2024
November 2023
Announcement of Half-Yearly Financial Report for the six months ending 30 September 2023
26 January 2024
Second quarterly dividend payable for the year ending 31 March 2024
Over the year, VIP completed its transition to a direct property investment trust, with timely and
profitable sales of its remaining property shares (including the industrial REITs at a premium to
net asset value). VIP reinvested in an RPI-linked M&S Simply Food supermarket at Rayleigh in
Essex, a long let bowling investment in Coventry with RPI-linked and fixed increase leases, and
in October 2022 completed the new CPI-linked Premier Inn development at Alnwick. Six smaller
overrented property sales completed in line with valuation.
31 March 2023
31 March 2022
Portfolio transition
£m
%
£m
%
UK property
150.6
98.5
155.8
83.0
Cash
2.3
1.5
5.2
2.7
UK equities
–
–
26.9
14.3
152.9
100.0
187.9
100.0
The intended retail investor in the Company is a retail investor who is seeking long-term (at least
5 years) real growth in dividends and capital value from investing in directly held UK commercial
property, plus cash or near cash securities, pending re-investment.
5
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
CONTENTS
Strategic Report
Chairman’s Statement
8
Manager’s Report
10
Business Review
32
Governance Report
Directors’ Details
44
Directors’ Report
45
Directors’ Remuneration Report
54
Statement of Corporate Governance
58
Statement of Directors’ Responsibilities
66
Report of the Audit and Management Engagement Committee
67
Independent Auditor’s Report
71
Financial Statements
Group Statement of Comprehensive Income
82
Company Statement of Comprehensive Income
83
Group Statement of Financial Position
84
Company Statement of Financial Position
85
Group Statement of Cashflows
86
Company Statement of Cashflows
87
Statement of Changes in Equity
88
Notes to the Financial Statements
89
Additional Information
Property record over 36 years
116
List of properties
118
Alternative Investment Fund Managers Directive
120
How to Invest in Value and Indexed Property Income Trust PLC
122
Unsolicited Offers for Shares (Boiler Room Scams)
123
Glossary
124
Notice of Annual General Meeting
125
Contact Information
130
Coventry
Strategic
Report
7
8
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
CHAIRMAN’S STATEMENT
This is my first communication with you since I became Chairman in July
2022. We all owe a debt of gratitude to my predecessor, James Ferguson, for
his expert stewardship of the Trust over his 28 years as Chairman. During
the year, we welcomed Lucy Winterburn, with her wide experience of the
property market, to the Board.
The property sector was particularly affected by the economic and
geopolitical turmoil over the year - the rise in inflation and interest rates,
the political chaos of the short-lived Truss administration, and the multiple
consequences of the war in Ukraine. While the Trust’s portfolio, which is not
exposed to offices or high street shops, outperformed the MSCI UK Quarterly
Property Index, it was certainly not immune to the general malaise. In the
year under review, the total net asset value return per share, measuring
debt at carrying value, was -17.9%; the share price total return was -9.2%, the
difference reflecting the substantial narrowing of the discount to asset value,
which is now below the average for the property sector.
This narrowing reflects the completion of the major reconstruction of the
Trust, which has been in progress for the last three years. The last remaining
equity holdings have been sold. Debt has been refinanced and now has an
average maturity of over seven years and an average,
almost entirely fixed,
interest rate below 4%. Our holdings now comprise industrial premises,
supermarkets, and leisure facilities and almost all have rents linked to
inflation. Tenant covenants are strong - all rent due in the last year has been
collected, with 60% of rents coming from our top 6 tenants. The dividend is
now covered by contracted income and since the average yield exceeds the
cost of the Company’s debt, the Board is confident of the Trust’s ability to
continue the progressive dividend policy, which the Company has maintained
for 36 years. At 31 March 2023, VIP’s Ordinary Shares yielded 6.3%.
The majority of the indexed rents in the Company’s portfolio have caps -
which limit the rate of increase - and collars - which specify a minimum
increase. The effect of these arrangements is illustrated in the table below. If
the Consumer Price Index (CPI) increases by 4% annually, the growth of the
Company’s income will more or less match the inflation rate. If inflation is
less than this - and the Bank of England’s target is 2%, although it has recently
been far from achieving this target - income will increase by more than
inflation. However, if inflation is faster than 4%, the caps on rent increases
imply that these increases will fall short of full indexation.
The costs of the Company’s major debt reconstruction provide part of the
explanation of the Trust’s asset value decline in the year under review
- the remaining debenture was repaid at a premium and there are costs
associated with both acquisitions and disposals. The result is a robust
portfolio, which should prove resilient in the face of continued political and
economic uncertainties. The market has recognised these achievements
and the discount to net asset value has narrowed and is below the property
sector average.
Forecast VIP rental income growth over five years
0
1
2
3
4
5
CPI 0%
CPI 2%
CPI 4%
CPI 6%
CPI 8%
CPI 10%
% p.a.
3.0%
3.8%
4.1%
4.3%
4.5%
4.6%
9
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
As Shareholders were advised in 2020, when the process of reconstruction
began, the Board intends to offer Shareholders an exit at net asset value less
costs. Proposals will be put to Shareholders at the 2026 AGM of the Company.
Many uncertainties certainly remain. The fiasco of ‘liability driven
investment’ - in which long term investors purporting to minimise risk were
forced to scramble for short term cash - is now largely resolved. Some of the
banking institutions most exposed to mismatched assets and liabilities in a
period of rising interest rates have been rescued. However, there is still much
illusory wealth in tech stocks and crypto related assets, which will evaporate
as reality dawns. While VIP has restructured its debt on sustainable terms,
there are many capital providers who have yet to do so. Problems in this
‘shadow banking’ sector are likely to continue to have implications for both
the financial system as a whole and the property sector, in particular, for
several years yet.
The Board is recommending a final dividend of 3.6 pence per share, making
total dividends of 12.9 pence per share for the year to 31 March 2023,
compared to 12.6 pence in the previous year, an increase of 2.4%. Subject to
Shareholder approval at the 2023 Annual General Meeting (AGM), the final
dividend will be paid on 4 August 2023 to Shareholders on the register on 7
July 2023. The ex-dividend date is 6 July 2023.
The AGM will be held at the Kingham Room, Broadway House Conference
Centre, Tothill Street, London SW1H 9NQ at 12.30pm on Wednesday, 2
August 2023. The Notice of Annual General Meeting can be found on pages
125 to 129 of this Annual Report. The Board encourages Shareholders to vote
using the proxy form, which can be submitted to the Company’s Registrars,
Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol,
BS99 6ZY. Proxy forms should be completed and returned in accordance
with instructions thereon and the latest time for the receipt of proxy forms is
12.30pm on 31 July 2023. Proxy votes can also be submitted by Crest or online
using the Registrar’s Share Portal service at www.investorcentre.co.uk/eproxy.
John Kay
Chairman
26 June 2023
Sector
March
2023
March
2022
March
2021
March
2020
March
2014
March
2012
Offices
0%
0%
0%
0%
0%
0%
Shops and Retail Warehouses
0%
0%
0%
0%
39%
49%
Supermarkets
29%
27%
16%
2%
5%
0%
Pubs and Restaurants
9%
13%
24%
32%
17%
13%
Leisure
18%
11%
8%
12%
11%
10%
Industrial
29%
33%
35%
32%
8%
8%
Roadside
6%
7%
3%
6%
16%
16%
Other
9%
9%
14%
16%
4%
4%
Total
100%
100%
100%
100%
100%
100%
Number of Properties
39
43
31
26
29
27
VIP property portfolio -
sector weightings since 2012
10
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
MANAGER’S REPORT
The property market
UK commercial property values
peaked in June 2022 after property
yields were pushed down to 40 year
lows. QE (Quantitative Easing) had
been going on too far, for too long,
in the United Kingdom as in most
Western economies, forcing interest
rates unsustainably low and capital
values, especially of low yielding
assets, unsustainably high. The
Bank of England, in particular, had
dropped its guard on its official 2%
inflation target. So Russia’s invasion
of Ukraine, raising world energy and
commodity prices, meant that UK
interest rates and gilt yields had to
shoot up to take the strain when the
UK’s post-pandemic recovery was
already the weakest of the G7 nations
and our public sector and overseas
trade deficits were the worst.
Bond and currency markets have
now stabilised after the economic
and interest rate chaos of the
Truss-Kwarteng administration
last autumn, and average values of
commercial property are now down
about 20% from their mid 2022 peak
and 13% over 2022 as a whole. So
far in 2023, average property values
have been slipping slightly further
on the MSCI UK Monthly Property
Index, but turnover is very low so
this is based more on sentiment
than actual completed transactional
evidence. Investors are cautious
and risk averse. Properties with
long, strong, indexed income let at
sustainable rents to robust tenants
are still in demand, particularly
from cash buyers in smaller lot
sizes, and should continue to
outperform. There should be
attractive investment opportunities
over the next few months from
forced or pressured sellers who
will find it increasingly hard to
refinance highly geared portfolios
as credit conditions tighten.
2023
*
2022
2021
2020
2019
2011
2008
2006
Property (equivalent yield)
6.2
6.1
5.1
5.8
5.6
6.9
8.3
5.4
Long Gilts
Conventional
3.5
3.8
1.0
0.2
1.0
2.5
3.7
4.6
Index linked
-0.1
0.3
-2.6
-2.6
-2.0
-0.2
0.8
1.1
UK Equities
3.6
3.6
3.1
3.4
4.1
3.5
4.5
2.9
RPI (annual rate)
13.5
13.4
7.5
1.2
2.2
4.8
0.9
4.4
Yield gaps:
Property less
Conventional Gilts
2.7
2.3
4.1
5.6
4.6
4.4
4.6
0.8
Property less
Index Linked Gilts
6.3
5.8
7.7
8.4
7.6
7.1
7.5
4.4
Property less
Equities
2.6
2.5
2.0
2.4
1.5
3.4
3.8
2.5
Comparative investment yields – End December (except 2023 – March)
Source: MSCI UK Quarterly Property Index and ONS for the RPI (*to December except March 2023)
Louise Cleary and Matthew Oakeshott
11
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Offices, with a total return of -9.8% over 2022, underperformed the market
as they have over the past 1, 3, 5 and 10 calendar years on the MSCI UK
Quarterly Property Index. Retail property, with a total return of -4.8%
was the best performer of the main sectors for the first time since 2010.
Industrial/warehouse property, by contrast, gave back much of its previous
gains as valuation yields were marked out, with a return of -14.4%. The
alternative sectors generally outperformed, like retail, with marginally
negative total returns.
Rental values were up on average by 3.8% over 2022, but growth has started
to slow in recent months. Industrial rental growth will tail off rapidly in
2023 under pressure from rising business rates and tenant defaults. Sector
differences may, therefore, be less important than individual property
selection in 2023, with rents under pressure but valuation yields bottoming
out. Capital values should be starting to rise again by the year end as inflation
falls back and the UK economy and real incomes start growing again.
Property transaction volumes slowed down markedly between June and
October 2022, especially for the lowest yielding properties, with many
sales only going through after agreed prices had been “chipped” by buyers
and more properties having to be withdrawn from the market unsold. But
more realistically priced stock is starting to appear. This is mainly “off
market”, particularly from property unit trusts under redemption pressure,
and individual pension funds and pooled pension vehicles caught out by
the Liability Driven Investing (LDI) crisis. This led, as the Bank of England
Financial Policy Committee put it, to “a vicious spiral of collateral calls and
forced gilt sales, and a material risk to UK financial stability”. Regulatory
stable doors are now being loudly shut, but risks remain in non-bank credit,
where the Bank of England estimates that global private credit has trebled in
size over the past decade.
1 year
3 years
5 years
10 years
Capital values
All property
-16.8
-2.6
-2.6
1.5
Rental values
All property
3.5
1.2
0.6
1.6
Total returns
All property
-13.0
1.7
1.9
6.5
UK commercial property – Average annual % growth rates to March 2023
Source: MSCI UK Quarterly Property Index March 2023
12
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
MANAGER’S REPORT
CONTINUED
Retail and industrial property void rates are now back to their pre-COVID
levels, but as the table below shows, office void rates have shot up from 13%
pre-COVID to an all time high of over 20% now, well above the previous record
high of 15% for office voids in 2013. This has dragged the average void rate
for all property back up to its previous peak of 10% in 2009, although retail
and industrial void rates are stable between 6% and 7%. Persistently high
void rates will continue to undermine office sector returns, for two reasons:
first, most office occupiers are downsizing their net space requirements to
reflect hybrid working patterns (40% of UK working adults are now working
from home for at least one day a week, compared to 12% pre-pandemic), and
second, many older office buildings contain a ticking Energy Performance
Certificate compliance time bomb, making it ever more costly to retain and
replace tenants.
MSCI UK Monthly Property Index vacancy rates %
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
2007 2008 2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
All Property Types
Retail
Office
Industrial
Source: MSCI UK Monthly Property Index March 2023
In summary, the main property valuers marked capital values down much
further and faster between September and December than in previous
property market downturns, despite little or no evidence of transactions
completed at the new lower levels. That was still realistic with the relentless
rise in gilt yields and base rate, now to 5.0%.
Rental values and rent collection will, however, come under more
recessionary pressures this year, as tenant default rates begin to rise and
rental income falls, particularly in the industrial and office sectors. The key
to portfolio outperformance on both the income and total return fronts in a
difficult market will be reducing risk and sticking to strong tenants, paying
affordable, preferably index-linked, rents on long leases for sustainable
buildings in prosperous locations.
13
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Property prospects by sector
Warehouse / Industrials – Valuation yields stabilising
Following the industrial market’s fall from grace in Q4, investors’ gloom is
starting to lift a little. Average valuation yields, having risen by over 150bps
in Q4 2022, have now stabilised. Any effects of the recent banking crisis have
not yet been seen.
The market remains thin in comparison to recent years, with less than
£700m of industrial property transactions completed during Q1 2023 (over
80% down on Q1 2022). Some institutional money is back for South East
multi-let estates. The key is modern stock in solid locations and buyers are
taking a much more conservative approach towards future potential rental
growth. Equivalent yields are typically now only 75bps to 100bps above the
initial yield, a significant difference to the 200 – 300 bps differential often
seen in the first half of 2022. With EPC ratings coming ever more into focus,
some sellers are needing to take the cost of improvements off the sale price
to get buildings up to scratch and in line with legislative requirements.
The pressure of rising occupational costs, such as the business rate increase
and rising energy prices, will be reflected in weaker occupational demand and
rental levels. In April, the business rates payable on industrial and warehouse
property rose on average by 27% (+33% in London and the South East). These
additional costs will cool occupational demand and the record rental growth
of the past few years will tail off. Industrial occupiers will then be hit with
a further blow in two years’ time when business rates will increase again.
So by the end of 2023, there will be more evidence of rental values falling,
tenants’ incentives becoming more generous and void rates increasing.
We are unlikely to see the sharp yields witnessed in the first half of 2022
for many years, but valuation yields should remain stable over the rest
of the year. The MSCI UK Quarterly Property Index’s net initial yield for
industrials was 4.4% for March with a corresponding equivalent yield of
5.7% compared to 3.1% and 4.0% at the peak of the market in summer 2022.
Westbury
14
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
MANAGER’S REPORT
CONTINUED
Offices –
Still more suffering to come
Completed transactions were few
and far between over the last six
months and yields continued to
soften (significantly in the case of
secondary assets). Agents, having
marked out typical prime West End
and City of London yields by over 75
bps and having cut capital values by
around 20% last year, have limited
evidence to move these yields out
again so are sitting on the fence for
the time being, but their reported
yields are trending weaker. We expect
these yields will move out further
over the course of 2023. Many debt-
financed office owners will need
to cut their office exposure due to
external pressures such as higher
borrowing costs or even a lack of
available financing in addition to the
worsening occupational story and
ESG compliance issues and costs.
Many large office holdings in the
main office markets, London, the
South East and the “Big Six” UK
cities, are predominantly held by
overseas investors, often with high
levels of gearing. When refinancing,
these investors will be affected
by the recent banking crisis and
interest rate rises and some will
be forced to sell, increasing supply
and consequently softening yields
and capital values further. The
occupational market will continue
to suffer through the year as many
large office employers continue to
consolidate spaces and faces, with
permanent working from home
arrangements and job cuts on the
back of the disrupted economy and
the current banking crisis. The
average actual office occupancy
rate across the UK is 29% in
comparison to the 80% recorded
pre pandemic. Occupiers will
continue to demand more flexible
leases and superior amenities
in order to attract the workforce
to use the office, hitting capital
values directly due to high levels
of required capital expenditure.
This lack of occupier demand is
now being borne out in vacancy
rates, which have edged up to 20.5%
in the MSCI UK Monthly Property
Index. These rates will increase
even further over 2023 to levels
never seen in the market before.
ESG compliance issues and costs
may be the final nail in the coffin
for many secondary “zombie”
offices – three-quarters of office
stock in the UK does not comply
with the minimum energy efficiency
standards for 2027. With high costs to
improve these buildings, upgrading
to comply is no longer viable.
The downward pressure on capital
and rental values will continue
throughout the rest of the year
and beyond until the economy
recovers and the market starts to
fully understand and get on the
right side of the structural change.
Many poor secondary assets may not
withstand these changes. We believe
the value of office buildings could
fall by at least a further 20% in the
next two to three years. The MSCI UK
Quarterly Property Index recorded
a capital value fall of -12.5% over the
12 months to December 2022 and it
has already fallen a further -2.6% in
the first quarter of 2023. Industrial
and office yields are now equal, the
market has shifted, and investors
are more likely to purchase occupied
industrial property with land than
vacant, costly, depreciating and
unused office space.
Milton Keynes
15
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Retail – Fighting back as
business rates fall
Consumer confidence is low with
real retail sales falling in 2023
and real living standards under
unprecedented pressure. But
since the pandemic, online sales
penetration has declined faster
than expected, with consumers
still valuing physical retail.
Occupier profit margins will be
under increasing strain as inflation
continues to bite, and with logistics
costs soaring, many occupiers will
seek to direct consumers back into
stores to increase efficiencies. Some
major retailers are now charging
shoppers who return items bought
online, with the cost taken from
their refund but items purchased
online can still be returned for free
in stores. Going into 2023 with a lack
of transactional activity, retail yields
are higher than in other sectors so
should be better protected against
current debt costs and retail may
outperform the property sector as a
whole again in 2023.
In 2022, Aldi overtook Morrisons
to become the UK’s fourth biggest
supermarket, increasing its market
share to around 9.2%, with Lidl
hot on their trail at 7.1%. Tesco’s
market share stands at 27.5% with
Sainsbury’s 15.4% followed by Asda
at 14.2%. Behind Morrisons, Aldi
and Lidl is the Co-op with 5.5%
and Waitrose at 4.7%. The discount
supermarkets grew so fast because
consumers, who had moved online
during the pandemic, returned to
the value-led stores in person due
to their demand for competitive
pricing due to the current economic
climate. The discounters continued
their store expansion last year
competing directly for the best
sites, increasing store coverage
but potentially taking on property
risk to secure representation in
key target locations by doubling
up. Lidl opened 54 stores last year
but have now announced a reduced
acquisition programme. Tesco, Asda,
Morrisons and M&S are also looking
to secure sites in the 15,000 sq ft
to 25,000 sq ft bracket competing
head on, with Aldi stating they are
still focussed on 40 new stores
per year across the UK, targeting
London and the South East. Profits
are under pressure across the whole
food retail sector, with supermarket
margins squeezed between rising
costs and falling customer incomes,
with traditionally loyal customers
trading down to value products or
going to cheaper competitors as
food inflation continues to rise to
the highest on record of over 16%.
Many retailers such as Tesco, Asda
and Lidl are giving further pay rises
this year due to the rising cost of
living and labour shortages, with
the National Minimum wage just
up by 9.7% to £10.42 per hour.
Capital values of supermarkets fell
sharply in the second half of 2022
after valuation yields were forced
down too low last summer, with
an Aldi trading at a 3% yield. There
are glimmers of a recovery in Q1
2023 as the sector offers secure
income in volatile markets (food is
a necessity). Well-let, particularly
smaller, properties are now again
offering low risk, rental growth and
potential for capital recovery. Despite
a substantially reduced volume of
investment transactions (volumes
below £700m in 2022 – down from
£1.85bn in 2021) supermarket
investment activity should stabilise
with a wider differential between
supermarket covenants. The gap in
pricing between supermarkets let on
index-linked leases and those with
open market reviews may continue to
grow. Morrisons are still struggling
with their sale and leasebacks of
larger stores with buyers hard to
find in the investment market where
sellers are unrealistic with pricing.
16
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
MANAGER’S REPORT
CONTINUED
Demand for retail warehousing
cooled towards the end of 2022 as
the reality of consumer pressures
started to bite but could improve in
2023. Transaction volumes were low
in Q1 2023 due to the lack of product,
despite the sector benefiting from
a stronger than forecast Christmas
period and rental growth in 2022.
Previous downturns suggest bigger
ticket items such as household goods
/ appliances and non-essential goods
such as clothing and footwear could
experience a more pronounced
squeeze than areas such as DIY and
trade counters but this sector should
prove its resilience.
High street retail and shopping
centres suffered a miserable few
years of underperformance since
well before COVID, with steep falls
in capital value as institutional
investors turned their backs on these
sectors, which have structurally
changed as institutions sold to
private investors. Values may
have now stabilised and possibly
bottomed out (shopping centres had
the least negative returns in 2022).
They may prove more resilient
than lower-yielding investments
in other sectors but an over supply
of shops will continue to hamper
performance. Despite the squeeze
on real incomes, rebased rents are
now more affordable, with most
retailers now enjoying short, flexible
leases. Retailers with the right offer,
right product and who have not over
expanded in recent years are now
taking advantage of lower rents
and higher vacancy rates to secure
favourable high street positions,
particularly in prosperous suburbs
and smaller towns.
The long awaited business rates
reform came into effect on 1 April
2023 (the revaluation is based on
April 2021 values), giving a 20%
average reduction in retail rateable
values across England and Wales with
no downwards phasing of liabilities,
meaning a property will have its
entire reduction in rates payable from
day one, providing a much needed
boost for bricks and mortar retailing.
Newport, Isle of Wight
17
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Alternatives -
Strong operators thriving
Property in the “Alternatives” sector
– i.e. everything except offices, retail
and industrial/warehouse property
- accounts for about one fifth of
the MSCI UK Quarterly Property
Index. Volatile, often disappointing
returns in the traditional office,
retail and industrial sectors have
led investors to search for higher
returns and lower risk to diversify
their portfolios over the past
decade. Properties in this sector
usually offer strong defensive
characteristics such as long, index-
linked leases and a wide range of
property types and tenants. 2022
saw the RPI and CPI soar to levels
not seen for 40 years, fuelled by ever
increasing energy and food costs.
So properties in the alternatives
sector have become increasingly
sought after and hold the key to
sustained portfolio performance.
December saw valuers moving
yields out further and faster than
in previous downturns to address
market volatility and waning
investor confidence. No sector was
immune but valuation decline in the
alternatives sector was less acute,
with the attraction of inflation-
linked rental uplifts really paying off.
Valuations have started to stabilise.
There is a thinner market for the
larger lot sizes but private property
companies and high net worth
investors continue to see value in
the sector. In some cases, rents will
have risen too high so only robust
tenants with strong balance sheets
will be able to weather the storm.
The trend of “flight to quality” has
gained momentum. Values will
recover faster for properties let at
affordable rents on long index-linked
leases in good locations and to strong
tenants, but it is likely there will be a
widening of the gap between prime
and secondary assets as investors get
increasingly selective.
Rising costs and staff shortages are
hurting the hospitality industry
more than most and at a time when
they were relying on consumers
to dig deep into their pockets. The
leading pubcos, like Greene King, as
well as traditional regional brewers
like Shepherd Neame and Youngs,
have strong balance sheets and will
survive relatively unscathed but
independent pub and restaurant
operators will struggle, particularly
if rents become unaffordable. High
inflation has meant that sales in
real terms continue to lag pre-
pandemic levels in this industry.
The start of the year has seen a
noticeable recovery of confidence
in London pubs and restaurants
as office workers and visitors
returned to the Capital. Consumers
remain eager to eat and drink out
despite the mounting pressure on
disposable incomes but operators
must ensure that they do not
push all their rising costs onto the
consumer, and when possible, return
to investing in their premises, or the
goodwill that they have built up post
pandemic will quickly wane causing
longer term trading problems.
Modern discount hotels are well
placed to benefit from the more cost-
conscious consumer. Premier Inn,
in particular, have been strategic,
opening more hotels in prosperous
smaller towns, rural areas and
tourist hot spots to capture British
staycationers and workers rather
than focusing on city centres or
airports. Constant flight disruption
from ‘unexpected’ weather, striking
workers at key holiday times and
expensive international flights
are still encouraging people to
reconsider holidays abroad amid a
cost-of-living crisis with UK caravan
parks also benefitting. Capital values
of Premier Inn investments slipped
in the general market weakness,
but they are recovering this quarter
and remain a much more secure
investment than Travelodge or other
weaker operators.
18
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
MANAGER’S REPORT
CONTINUED
Health and Fitness clubs in affluent
suburban areas have seen some
benefit from the move to hybrid
working, but capital values are under
pressure right across the sector
as they use so much energy, and
expensive membership renewals are
usually the first to go when customers
cut back on non-essential spending.
There have been no gym transactions
this quarter and a number that came
on to the market last year remain
unsold. When investment does pick
up, only the strongest operators in the
sector are likely to attract attention.
The two main ten pin bowling
companies, who dominate the market,
are trading strongly and investing in
their properties. They offer a sensibly
priced family outing which cannot
be replicated online. Tenpin owner
Ten Entertainment Group enjoyed
a record performance last year with
sales up 87.6% on 2021 and 50.6% up
on the pre-pandemic year of 2019.
Like-for-like sales were 40% higher
than pre-pandemic. Hollywood Bowl
also reported that annual profits and
revenues had grown against pre-
pandemic levels. Both companies look
well placed for the years ahead. But
bingo halls and cinemas have suffered
structural change with online gaming
and streaming the new norm. Cinemas
in multiplexes and retail parks have
no movie magic. Taking the family
to the cinema is now an expensive
treat so only cinemas with genuinely
affordable rents will survive.
Cineworld’s equity has been wiped out
by a deal with its lenders and its rents
in the UK will still need to fall.
Student numbers are rising and
investments on long leases to well-
established universities have been
in great demand. But valuation
yields on student housing, as on
other residential investment types,
now look too low as investment
competition had driven pricing
to very hot levels. However, many
universities are facing a critical
shortage of student housing with
new local supply limited and likely
to remain so with construction costs
rising so fast.
Care homes are struggling with
staff shortages and insufficient
public sector funding. Bed vacancy
rates are rising rapidly because
of more deaths and admissions
are slower. Values will continue
to remain under pressure.
Alnwick
19
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
The economy
The UK economy is still flatlining,
lagging global GDP growth, now
expected by the IMF to be around 3%
over the next year. Average earnings
and productivity have shown little
growth since the Global Financial
Crisis hit us especially hard in
2008-9. More recently, business
investment has stagnated since
2016, in the words of the Office
for Budget Responsibility, due to
uncertainty about the UK’s future
trading relationship with the EU
among other concerns. Different
governments have tried different
policies and remedies, often pulling
in opposite directions from their
predecessors, to increase investment
and productivity growth, but to little
net effect. The UK is running the
highest public sector and overseas
trade deficits in the G7 group of
developed nations and is the only one
with GDP still lower than pre-COVID.
Our labour market is particularly
tight, due partly to Brexit, partly to a
deep seated skills and training deficit
and partly to older people leaving
work post-COVID. Consumer price
inflation remains above Western
Europe and the USA, with rapidly
rising food prices keeping the
Consumer Price Index rising at an
annual rate of 10.1% for March and
13.5% for the Retail Price Index.
The UK’s sclerotic housing
market, with prices and rents
both significantly higher than
in our main Western competitor
countries, remains a drag on our
economic performance, as a source
of financial instability and a barrier
to geographic and social mobility.
The Government’s Help To Buy
scheme increased demand for house
purchase but not supply, pushing
up home prices and housebuilders’
profits. Only 205,000 homes were
completed in the year to April 2022,
against 330,000 in 1972 and about
400,000 in 1962, and this year will
be worse. Private sector completions
have shown little change, but social
housebuilding by local authorities
and housing associations has
collapsed, and existing social
housing has been transferred to the
private rental sector at much higher
cost. Changes to stamp duty and
interest deductibility for private
landlords in recent years have led
to an exodus of small landlords and
upward pressure on rents. With over
80% of mortgages at fixed rates and
employment still high, house prices
are less vulnerable to rising interest
rates than in previous downturns,
but they are already now about 5%
off their late 2022 peak. Housing,
whether to buy or to rent, would still
be exceptionally unaffordable in
most areas of the UK by long-term
standards, with the only obvious
sustainable solution being for
much more genuinely affordable
social housing to be built again.
The UK economy is in a deeper
structural hole than many similar
countries post-COVID, with pay
rises running well behind the rate
of price increases, especially for
essentials like food and heating
which leave little spare spending
power for the lower paid. But
poverty is quite polarised, with many
people still holding high savings
post-pandemic and keen to spend,
but not in predictable patterns.
Business and consumer confidence
are starting to improve, partly out
of relief at calmer Government
and partly as gas and electricity
prices fall back. The warm winter
in Europe, and major reductions in
gas usage, in particular, due both
to high prices and smarter usage,
are leading to sharp falls in some
energy and commodity prices, so
international inflation rates should
fall this year, but not to anywhere
near 2% in the foreseeable future.
20
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
MANAGER’S REPORT
CONTINUED
Bank of England Monetary Policy Committee has had a difficult year. Bank
Rate collapsed from a peak of 5.75% in July 2007 to 0.5% in March 2009, and
it stayed around that level for 13 years before its 9 rises to 3.5% last year. Now
it has been raised to 5.0% and it needs to stay at or above that level at least
into 2024 so that higher inflationary expectations do not become embedded,
especially in the labour market after the current wave of public sector strikes.
The UK cannot afford to run risks on inflation when it will have to borrow so
much for so long from abroad.
There is no particular magic about 2% as the number for the inflation target
for most Central Banks in the developed world. Underlying inflation in
the USA, UK and Eurozone did average around 2% with relatively minor
fluctuations between the early 2000’s and COVID in 2020. As the table below
shows, the Bank of England has been slow since the pandemic to raise their
forecasts for inflation for one year ahead - but at least they have raised them.
Their forecasts for two years ahead have, however, stuck firmly in cloud
cuckoo land around 2% p.a., falling to 1% from 2023. So 2% annual inflation
now looks an unrealistic long term target.
Bank of England Monetary Policy Report inflation projections
Source: Successive Bank of England Monetary Policy Reports
1990
1995
2000
2005
2010
2015
2020
10.1%
-2
0
2
4
6
8
10
12%
Consumer price inflation
Source: ONS
Date
of report
Latest
inflation
One
year ahead
Two
years ahead
August 2020
February 2021
August 2021
February 2021
August 2022
February 2023
0.3%
0.8%
2.7%
9.9%
9.7%
1.8%
2.1%
2.0%
2.1%
2.1%
2.1%
2.0%
1.0%
9.5%
3.0%
5.2%
5.7%
3.3%
21
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
The end of ultra-low interest rates
is inevitably a stressful and uneven
process but it is ultimately helpful
for the economy. Too much cheap
money has inflated asset bubbles,
encouraged speculative frenzies
ranging from over-hyped technology
stocks to crypto currencies,
diverted too much capital into
financial engineering by private
equity, pushed up UK house prices
unaffordably and unsustainably and
kept too many zombie companies
alive for too long when their skilled
workforces, in particular, should
have been more productively
reallocated elsewhere. It is ending
with strains in the international
credit markets, which are being
contained so far as mainstream
regulated banks are concerned
in the USA and Switzerland.
The real danger for world economies
and property markets will come
if the plethora of private equity
and hedge fund property-owning
and lending vehicles, which have
sprung up mainly in the shadows
over the past 5-10 years, run into
serious redemption or refinancing
difficulties. In the words of the Chief
Executive of Brookfield (one of the
largest such vehicles and owner
of Canary Wharf) “What we do is
behind the scenes. Nobody knows
we are there”. What we do know,
however, is that loan default risks,
especially on large offices, are rising
and that most conventional UK
property trusts are also now gated,
although the authorities have still
not stopped them pretending to offer
daily dealings on assets which take
months to sell.
The international economic
outlook and business confidence
are now improving slightly, but two
big question marks remain over
economic forecasts into 2024. On the
upside, if the war in Ukraine ended
either in stalemate or an effective
Russian defeat, inflation and interest
rates would move lower. But that
can only be a hope, not a forecast.
On the downside, tightening credit
conditions and higher interest
rates are not good for growth of
commercial or residential property
values, although plenty of pain is
now properly priced into commercial
property yields and prices, at least in
the United Kingdom.
Conclusion – Safe property
repriced to attractive yields
The rapid valuers’ mark down of
commercial property prices by
about 20% from their mid-2022
peak is now starting to offer good
buying opportunities at safe, high
yields for long-term investors. At
average yields now of over 6%, UK
property offers an attractive yield
premium over UK equities and is
fundamentally undervalued against
UK conventional and index-linked
gilts, which only offer volatility,
doubtful liquidity and negligible
real returns. The key to both relative
outperformance and strong real total
returns for property over the next
few years will be capturing these
high yields in practice by a relentless
focus on strong tenants with long,
preferably index-linked leases with
sustainable rents and buildings.
22
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
MANAGER’S REPORT
CONTINUED
Annual portfolio summary
VIP specialises in direct investment in UK commercial properties with long,
strong, index-related income streams to deliver above average long term real
returns.
The portfolio comprises 39 properties across 7 well diversified sub-sectors,
all let on 42 full repairing and insuring leases (WAULT 12.6 years to the
tenants’ option to break) to 21 different tenant covenants across England,
Scotland and Wales, with 60% of rents coming from the top 6 tenants. All are
freehold except two, which are long leasehold with 108 and 82 years to run
(Doncaster and Fareham).
Indexed Rent Reviews
The contracted income on the whole portfolio stands at £9.3 million per
annum where 96.2% (41 out of 42 tenancies) have index-linked or fixed
increases. Only one property, the industrial at Fareham, has three yearly open
market upwards only reviews.
Over the financial year, 15 rent reviews completed representing 40% of the
rent roll, with an average increase of 6.4% on their rents passing, which added
£0.23 million (2.9%) to all held properties. Nine were annual reviews; eight
were RPI-linked and one with a fixed increase. Four had five yearly RPI-
linked reviews, one with a fixed increase and one with a sweep up clause after
a three yearly upwards only open market rent review.
There are 41 leases, which are reviewed either; RPI-linked (69%), CPI-linked
(11%) or with fixed increases (16%) and there is just one industrial with an
open market review (4%).
Nine tenancies representing 27% (year ending 31 March 2023) of the indexed
rental income have annual rent reviews and thirty two (69%) have five
yearly reviews with one (4%) having a three yearly review pattern. Over the
following five year period VIP expects the following percentage of rental
income to be reviewed in each financial year:
Year ending 31 March
Annual
5 yearly
3 yearly
Total
2024
27%
10%
4%
41%
2025
27%
3%
–
30%
2026
27%
30%
–
57%
2027
27%
10%
4%
41%
2028
27%
15%
–
42%
Over the next 12 months, 14 tenancies representing 41% of the total rent roll,
will undergo a rent review.
Of the indexed rents within the portfolio; 66% of the RPI-linked and CPI-
linked rents are subject to collared uplifts, which average 1.7% per annum and
73% are subject to capped uplifts, which average 3.9% per annum. 12% of the
total indexed income has uncapped RPI increases. Fixed rent review uplifts
average 2.4% per annum.
23
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Purchases and sales
Three long let index-linked purchases for £25.5 million and six sales for £9.8
million completed over the year.
Purchases completed
Supermarket -
Eastwood Road, Rayleigh
The purchase of a dominant town centre freehold M&S Simply Food
supermarket in Rayleigh, Essex completed in July 2022 for a total of £11.3
million let to Marks & Spencer plc until 20 July 2035 (WAULT just under
thirteen years) with five yearly RPI-linked rent reviews with a minimum of
1% pa and maximum 4% pa. The net initial purchase yield was 4.8% which has
risen to an RPI-linked 5.3%.
Hotel -
Willowburn Trading Estate, Alnwick (Development)
The forward funding of an 80 bedroom Premier Inn hotel and inhouse
Brewers Fayre pub/ restaurant at Willowburn Trading Estate, Alnwick,
completed in October 2022 for a total of £7.2 million at a net initial yield of
5.0%. The freehold property is open and trading and is let to Premier Inn for
twenty five years until 2047 with a tenant’s option to break in 2042, and has
five yearly CPI-linked rent reviews to a maximum of 4% per annum.
Bowling -
Crosspoint, Olivier Way, Coventry
The purchase of a freehold purpose built prominently located leisure
investment on a 3.2 acre site with over 140 car parking spaces in Coventry
completed in March 2023 for a total of £8.3 million at a net initial yield of
7.4%. The rental income totals £0.6 million; 77% to Tenpin Limited (bowling)
on a lease without a break until 2050, with RPI-linked rent increases capped
at 4% and collared at 2% p.a. The two purpose built restaurants are let to
Starbucks on a RPI-linked lease and Pizza Hut on an annual fixed increase
lease with 11 and 9 years to run respectively (WAULT just over 23 years).
Retail Price Index -
69%
(29 tenancies)
Consumer Price Index -
11%
(6 tenancies)
Fixed increases -
16%
(6 tenancies)
Open market -
4%
(1 tenancy)
Indexed income review pattern by contracted income
69%
11%
4%
16%
24
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
MANAGER’S REPORT
CONTINUED
Sales
Completed
The sale of six overrented properties completed during the year for £9.8
million: two convenience stores, three pubs and a bingo hall, in line with their
March 2022 valuations at an average net sale yield of 6.1%.
Completed Since 31 March 2023
The sale of a city centre pub in Newcastle upon Tyne let to Stonegate
completed in April 2023 above valuation at a net sale yield of 7.5%.
Exchanged
The sale of a petrol filling station in Melton Mowbray let to BP Oil UK Limited
with a lease expiring in September 2033 exchanged in April 2023, above
valuation at a net sale yield of 6.2% with completion due in July 2023.
Reinvestment of sale proceeds is in hand and other properties are under
investigation to upgrade the portfolio quality further.
Rent Collection
100% of all contracted rents due were collected during the year to 31 March
2023. The top 6 tenants have 20 leases: Marks & Spencer, HM Government/
Local Authorities, Ten Entertainment Group, Premier Inn, Sainsbury’s and
the Co-operative Group representing 60% of the contracted income.
Contracted income by tenant %
Marks & Spencer
HM Government and
Local Authorities
Ten Entertainment Group
Premier Inn
Sainsbury’s
Co-operative Group
Park Resorts
Stonegate
MKM Building Supplies
Kier Group
Winterbotham Darby
Shepherd Neame
A.F. Blakemore (Spar)
BP Oil UK
Arla Foods
Brake Brothers
Halfords
Tesco
Pizza Hut
Starbucks
Screwfix
18%
11%
10%
8%
7%
6%
6%
6%
5%
4%
3%
3%
2%
2%
2%
2%
1%
1%
1%
1%
1%
25
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Fully let
The portfolio is fully let, with no voids (MSCI void rate: 8.2%).
Responsible impact based ESG management
OLIM Property has always taken a cautious and responsible approach
to managing VIP’s property portfolio, with environmental impact,
social responsibility and governance (ESG) taken fully into account in
selecting high quality properties and suitable tenants for acquisition,
long term management and disposal. Occupier relationships are
crucial. We engage with our tenants to understand and establish
sustainable rental levels and grow future income streams, working
closely with them to address value add energy performance targets.
All VIP’s properties are regularly reviewed, ESG improvements
implemented at appropriate asset management stages and properties
sold where performance may be negatively impacted by ESG factors.
Property
Tenant
Sector
% of portfolio
by capital value
Dover
Park Resorts
Caravan Park
8%
Newport Isle of Wight
Marks and Spencer
Supermarket
7%
Rayleigh
Marks and Spencer
Supermarket
7%
Garstang
Sainsbury’s
Supermarket
6%
Coventry (Crosspoint)
Tenpin, Pizza Hut & Starbucks
Bowling
5%
Aylesford
Kier
Industrial
5%
Catterick
Premier Inn
Hotel
4%
Alnwick
Premier Inn
Hotel
4%
Milton Keynes
Winterbotham Darby
Industrial
4%
Gloucester
H.M. Government
Industrial
3%
Total
53%
Top 10 properties by capital value
South East -
29%
(8 properties)
North -
28%
(11 properties)
East Anglia -
12%
(4 properties)
Midlands -
11%
(4 properties)
South West -
9%
(4 properties)
Scotland -
7%
(5 properties)
London -
3%
(2 properties)
Wales -
1%
(1 property)
Capital value % by region
29%
11%
3%
9%
28%
12%
7%
1%
26
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
MANAGER’S REPORT
CONTINUED
Industrials -
29%
Supermarkets -
29%
Bowling -
9%
Pubs -
9%
Hotels -
9%
Other -
9%
Roadside -
6%
Sector weighting % capital value
29%
9%
6%
9%
29%
9%
9%
Supermarkets -
30%
Industrials -
27%
Bowling -
12%
Pubs -
9%
Hotels -
8%
Other -
8%
Roadside -
6%
Sector weighting % contracted income
30%
9%
6%
8%
27%
12%
8%
Contracted income by lease expiry % (if all break options exercised)
25-30 years
20-25 years
15-20 years
10-15 years
5-10 years
Less than 5 years
7%
7%
11%
38%
25%
12%
WAULT* 12.6 years if all tenants
exercise their break options
Newport (10%)
Risca Tesco (<1%)
Thirsk (<1%)
* Weighted Average Unexpired Lease Term
27
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Energy Performance
Certificates (EPCs)
96% of the properties now have an
EPC rating A-C (up from 64% over
the past twelve months). We continue
to work with our tenants to upgrade
properties and improve EPC ratings.
Performance and
independent revaluation
Savills’ independent valuation at
31 March 2023 on all 39 properties
totalled £150,500,000, reflecting
a net initial yield of 5.8% after
deducting notional purchase costs
(31 March 2022: 5.1%, 30 September
2022: 5.1%), with a running yield
of 6.0%. The half-yearly valuation
totals at 30 September 2022 were
£157,550,000 and at 31 March 2022
£155,478,000. On a like for like basis,
excluding purchases and sales, the
portfolio’s capital value declined by
0.1% in the first half of the year and
by 12.7% in the second, reflecting
the impact of rising interest rates
across the investment property
market and economic and political
turbulence. Investment turnover
has been very low with values
marked down more on sentiment
than completed evidence. Investors
are cautious and risk averse.
Capital values of the 37 properties
held throughout the financial year
had a like for like total decline in
value of 12.8%, being significantly
better than the MSCI benchmark
of -16.8%. The only sector to gain
in value was bowling up by 3.4%
with the biggest fall in values in the
roadside and supermarket sectors
of -19.4% and -14.9% respectively, as
a consequence of sector repricing.
The valuation reflects an outward
yield shift of 70 basis points over
the six months to 31 March 2023
(six months to September 2022: no
yield shift). Contracted income is
now £9.3 million (up 12.0%) against
£8.3 million at end of March 2022,
due to three new purchases and
fifteen rent increases over the year
providing rental growth in this highly
inflationary environment.
The property portfolio has been
upgraded with the sale of six smaller,
mainly overrented properties,
which completed for £9.8 million
(three pubs, a bingo hall and two
convenience stores) with the net
sale proceeds reinvested in three
long-let property purchases for £25.5
million, a Marks and Spencer Simply
Food supermarket in Rayleigh,
Essex, a new Premier Inn at Alnwick,
Northumberland and a leisure
investment in Coventry; all let on
index linked leases.
The property portfolio produced a
total return on all 39 properties of
-7.8% over the past year to March,
against -13.0% for the MSCI UK
Quarterly Property Index, the main
benchmark for commercial property
performance. Properties held
throughout had a total return of -7.5%.
The returns on VIP’s property
portfolio have been between 5%
and 12% a year over 3, 5, 10, 20, and
36 years and are above the MSCI
averages over all these periods. The
real returns have been behind the
Retail Price Index over 1 and 3 years
but above it over longer periods,
with a real return of 8% a year over
36 years since the inception of OLIM
Property’s Management.
Matthew Oakeshott & Louise Cleary
OLIM Property Limited
26 June 2023
28
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
MANAGER’S REPORT
CONTINUED
Property portfolio at 31 March 2023
1. Industrials
13
properties
27
%
of contracted
rent
10.4
years
WAULT*
*Weighted Average Unexpired Lease length if all break options exercised
86
%
indexed
2. Supermarkets
9
properties
30
%
of contracted
rent
8.7
years
WAULT*
100
%
indexed
Milton Keynes
Garstang
29
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
4. Leisure - Pubs
7
properties
9
%
of contracted
rent
22.4
years
WAULT*
100
%
indexed
3. Leisure - Bowling
3
properties
12
%
of contracted
rent
21.1
years
WAULT*
100
%
indexed
Coventry
Coventry
30
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
MANAGER’S REPORT
CONTINUED
5. Leisure - Hotels
2
properties
8
%
of contracted
rent
15.9
years
WAULT*
100
%
indexed
Alnwick
31
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
6. Other (Caravan park and library)
2
properties
8
%
of contracted
rent
10.1
years
WAULT*
100
%
indexed
7. Roadside
3
properties
6
%
of contracted
rent
9.4
years
WAULT*
100
%
indexed
Dover
Bebington
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 that
invests in accordance with the
investment objective and investment
policy outlined on page 34 of this
Business Review.
Value and Income Trust PLC changed
its name on 22 January 2021 to Value
and Indexed Property Income Trust
PLC (VIP or the Company). VIP’s
Ordinary Shares are listed on the
Premium segment of the Official
List and traded on the main market
of the London Stock Exchange.
The Company is registered as a
public limited company in Scotland
under company number SC050366.
VIP is an investment company
within the meaning of Section 833
of the Companies Act 2006. The
Company has one class of share. VIP
is a member of the Association of
Investment Companies (AIC).
The Group
Value and Indexed Property Income
Services Limited (VIS), a wholly
owned subsidiary of the Company, is
authorised by the Financial Conduct
Authority to act as the Company’s
Alternative Investment Fund
Manager (AIFM).
Capital structure
As at 31 March 2023, and as at the
date of this Annual Report, VIP’s
share capital consisted of 43,012,464
Ordinary Shares of 10p nominal
value in issue and 2,537,511 Ordinary
Shares of 10p each held in Treasury.
Each Ordinary Share in issue entitles
the holder to one vote on a show of
hands and, on a poll, to one vote for
every share held.
Aylesford
33
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
30
Sep
1986
31
Mar
1987
31
Mar
2014
31
Mar
2015
31
Mar
2016
31
Mar
2017
31
Mar
2018
31
Mar
2019
31
Mar
2020
31
Mar
2021
31
Mar
2022
31
Mar
2023
NAV (valuing
debt at carrying
value) (p)*
44.0
55.1
325.5
326.9
319.0
345.5
330.5
332.5
253.1
271.1
314.3
246.9
Share price (p)
42.0
52.0
265.0
254.3
221.8
255.0
262.0
251.0
165.0
218.0
239.0
204.5
Discount of
share price to
NAV (valuing
debt at carrying
value)* (%)
4.6
5.6
18.6
22.2
30.5
26.2
20.7
24.5
34.8
19.6
24.0
17.2
Dividend
per share (p)
N/A
1.25
8.5
9.0
10.5
11.0
11.4
11.8
12.1
12.3
12.6
12.9
Total assets
less current
liabilities (£m)
17.4
24.8
183.6
189.0
185.5
207.3
200.4
205.6
176.2
177.6
196.5
158.0
Financial record
Share dealing
Shares in VIP can be purchased and sold in the market through a stockbroker, or indirectly
through a lawyer, accountant or other professional adviser. Further information on how to invest
in VIP is detailed on page 122.
Recommendation of non-mainstream investment products
VIP currently conducts its affairs so that the shares issued by it can be recommended by
independent financial advisers to ordinary retail investors in accordance with the rules of the
Financial Conduct Authority (FCA) in relation to non-mainstream investment products and
intends to do so for the foreseeable future. VIP’s shares are excluded from the FCA’s restrictions
which apply to non-mainstream investment products because they are shares in an investment
trust company and the returns to investors are based on investments in directly held property.
Highlights of the year
•
Net Asset Value total return (with debt at carrying value)* of -17.9% (2022: 21.3%) over one year
and 11.7% (2022: 7.5%) over three years.
•
Share Price total return* of -9.2% (2022: 15.8%) over one year and 48.3% (2022: 13.3%) over
three years.
•
MSCI UK Quarterly Property Index total return of -13.0% over one year (2022: 19.6%) and 5.1%
(2022: 6.4%) over three years.
•
FTSE All-Share Index total return of 2.9% (2022: 13.0%) over one year and 47.4% (2022: 16.8%)
over three years.
•
Dividends for year up 2.4% - the 36th consecutive year of dividend increases.
•
Dividend yield at 31 March 2023 - 6.3% (2022: 5.3%).
* This is an Alternative Performance Measure (APM) which has been explained in the Glossary on page 124.
34
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
BUSINESS REVIEW
CONTINUED
The UK commercial
property portfolio
The Company will target secure
income and capital returns linked
to inflation, mainly through its
diversified portfolio of UK property
assets, let or pre-let to a broad range
of strong tenants on long leases with
rental growth subject to index-linked
or fixed increases. The Company
has not set any geographical limits,
except that it may invest in all four
nations of the United Kingdom. It
has also set no structural limits and
expects the portfolio to be focused
on (but not limited to), the industrial/
warehouse, supermarket, roadside
and leisure sectors (including for
example, caravan parks, pubs, hotels,
garden and bowling centres) income
strips and ground rents. Offices
and high street retail properties
would not be priority sectors for
investment. In order to manage
risk in the portfolio, at the time of
purchase, no single property asset
will exceed in value 25 per cent. of the
Company’s gross asset value and no
single tenant (except UK Government
and public sector) will account
for more than 30 per cent. of the
Company’s total rental income.
Investment objective and investment policy
Investment objective
The Company invests mainly
in directly held UK commercial
property to deliver secure, long-term,
index-linked income. 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
directly held UK commercial property
and cash or near cash securities.
The Company will not invest in
overseas property or securities or
in unquoted companies. UK directly
held commercial property will
usually account for at least 80 per
cent. of the total portfolio but it may
fall below that level if relative market
levels and investment value, or a
desired increase in cash or near cash
securities, make it appropriate. The
Company will not use derivatives.
The Company is permitted to
invest cash held for working capital
purposes and awaiting investment
in cash deposits, gilts and money
market funds.
35
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Borrowing policy
The Company has a longstanding
policy of funding most of the
increases in its property portfolio
through the judicious use of
borrowings. Gearing will normally
be within a range of 25 per cent. and
50 per cent. of the total portfolio.
The Company will not raise new
borrowings if total net borrowings
would then represent more than 50
per cent. of the total assets.
Detail of the Company’s current
borrowings, comprising two fixed
term secured loan facilities can be
found in Note 12 to the Financial
Statements on pages 102 and 103 of
this Annual Report.
Performance, results
and dividend
As at 31 March 2023, the Net Asset
Value (NAV) total return (with debt
at carrying value) over one year
was -17.9% and the Share Price total
return over one year was -9.2%.
This compares to the MSCI UK
Quarterly Property Index total return
of -13.0%. Total assets less current
liabilities were £158.0 million. A
review of the performance of the
property portfolio is detailed in the
Chairman’s Statement on pages 8
and 9 and in the Manager’s Report on
pages 10 to 31.
For the year to 31 March 2023,
quarterly dividends of 3.0p per
share, 3.1p per share, and 3.2p per
share were paid on 28 October 2022,
27 January 2023 and 28 April 2023,
respectively. The Directors have
declared a final dividend of 3.6p
per Ordinary Share (2022: 3.6p)
which, if approved by Shareholders
at the 2023 AGM, will be paid on 4
August 2023 to Shareholders on
the register on 7 July 2023. The
ex-dividend date is 6 July 2023.
This represents an annual increase
in dividends of 2.4% as compared
with the 13.5% and 10.1% annual
increases in the Retail Price and
Consumer Price Indices, respectively,
as at the end of March 2023.
Principal and emerging
risks and uncertainties
The Board has an ongoing process
for identifying, evaluating and
monitoring the principal and
emerging risks and uncertainties
facing the Group and the Parent
Company. The risk register forms
a key part of the Group and the
Parent Company’s risk management
framework used to carry out a robust
assessment of the risks, including a
significant focus on the controls in
place to mitigate them. The principal
and emerging risks and uncertainties
which affect the Group’s and the
Company’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 two elements
- price risk and interest rate 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.
VIS delegates its portfolio
management responsibilities to
OLIM Property Limited (OLIM
Property), the Investment Manager
responsible for managing the
property portfolio, which reports to
VIS and to the Board, which meet
regularly in order to review the
investment strategy. All investment
properties held by the Group are
commercial properties located in
the UK, mainly with long-term,
index-linked income streams.
36
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
BUSINESS REVIEW
CONTINUED
Interest rate risk
Interest rate movements may affect:
•
the fair value of the investments
in property;
•
the level of income receivable on
cash deposits; and
•
the fair value of borrowings.
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 that gearing levels are
appropriate to market conditions
and reviews these on a regular
basis. Current borrowings comprise
two secured term loans, with three
and ten year terms remaining,
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 50%.
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
investment properties which, by their
nature, are not readily realisable.
The maturity of the Company’s
existing borrowings is set out in the
interest rate risk profile section of
Note 21 to the Financial Statements.
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 weighted
average unexpired lease length to
the break option is 12.6 years. Details
of the tenant and geographical
spread of the portfolio are set out
on pages 24 and 25. The long-term
record of performance through the
varying property cycles since 1987
is set out on pages 116 and 117. OLIM
Property is responsible for property
investment management, with
surveyors, solicitors and managing
agents acting on the portfolio under
OLIM Property’s supervision.
Political risk
Political changes that result in
parties with extreme political
or social agendas having power
or influence over policies
could lead to instability and
uncertainty in the markets,
legislation and the economy.
The Board reviews regularly
the political situation, together
with any associated changes to
the economic, regulatory and
legislative environment, to ensure
that any risks arising are mitigated
as effectively as possible.
An explanation of certain economic
and financial risks and how they are
managed is contained in Note 21 to
the Financial Statements.
37
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Climate change and social
responsibility risk
The Board recognises that climate
change is an important emerging risk
that all companies should take into
consideration within their strategic
planning. As referred to elsewhere
in this Strategic Report on pages 25,
27, 37 and 41 and in the Governance
Report on pages 47 and 64 in this
Annual Report, the Company has
little direct impact on environmental
issues. All of the Company’s
properties are let on full repairing
and insuring leases, with the tenants
responsible for complying with
statutory obligations. The Board is
aware that the Manager continues
to take into account environmental,
social and governance matters, and,
in particular, Energy Performance
Certificates and flood risks, in
managing the portfolio.
Economic risk
The valuation of the Company’s
investments may be affected by
underlying economic conditions,
such as fluctuating interest rates,
rising inflation, increased fuel and
energy costs, and the availability
of bank finance, all of which can be
impacted during times of geopolitical
uncertainty and volatile markets,
including the recent coronavirus
pandemic and the ongoing war in
Ukraine. The Board monitors the
economic and market environment
closely, including the situation
in Ukraine, and believes that the
diverse, well-spread, long let indexed
portfolio should prove resilient.
Other key risks
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 Directors
strive to maintain a good
understanding of the changing
regulatory agenda and consider
emerging issues so that
appropriate changes can be
implemented and developed in
good time. The Group operates
in a complex regulatory
environment and, therefore,
faces a number of regulatory
risks. A breach of Section 1158
of the Corporation Tax Act 2010
would result in the Company
being subject to capital gains
tax on portfolio investments.
Breaches of other regulations,
including but not limited to, the
Companies Act 2006, the FCA
Listing Rules, the FCA Disclosure,
Guidance and Transparency
Rules, the Market Abuse
Regulation, the Packaged Retail
and Insurance-based Investment
Products (PRIIPs) Regulation,
the Second Markets in Financial
Instruments Directive (MiFID II)
and the General Data Protection
Regulation (GDPR), could lead to a
number of detrimental outcomes
and reputational damage.
The Company is also required
to comply with tax legislation
under the Foreign Account
Tax Compliance Act and the
Common Reporting Standard.
The Company has appointed its
registrar, Computershare, to act
on its behalf to report annually to
HM Revenue & Customs (HMRC).
38
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
BUSINESS REVIEW
CONTINUED
The Company’s privacy policy is
available to view on the Company’s
web pages hosted by the Investment
Manager at www.olimproperty.
co.uk/value-and-indexed-property-
income-trust.html
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 from the
Investment Manager.
Alternative investment
fund managers directive
The Alternative Investment Fund
Managers Directive (AIFMD)
introduced an authorisation and
supervisory regime for all managers
of authorised investment funds in
the EU.
In accordance with the requirements
of the AIFMD, the Company
appointed VIS as its Alternative
Investment Fund Manager (AIFM)
and BNP Paribas Trust Corporation
UK Limited as its Depositary. VIS’s
status as AIFM remains unchanged
following the UK’s departure from
the EU. The Board has controls in
place 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
At each Board Meeting, the Directors
consider a number of performance
measures to assess the Company’s
success in achieving its objectives
and which also enable Shareholders
and prospective investors to gain an
understanding of its business.
A historical record of these
performance measures, with
comparatives, together with the
Alternative Performance Measures
(APMs) are shown in the Highlights
of the year and Financial record
section on page 33 of this Business
Review. Definitions of the APMs can
be found in the Glossary on page 124.
Following the change in investment
policy to invest predominantly
in property, the Directors have
carried out a review of the key
performance indicators to determine
the performance of the Company.
The Directors have identified the
following as key performance
indicators:
•
Net asset value and share price
total returns relative to the MSCI
UK Quarterly Property Index
(total returns); and
•
Dividend growth relative to
Consumer Price Inflation.
39
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
The net asset value (NAV)
total return is considered to
be an appropriate measure of
Shareholder value as it includes
the current NAV per share and the
sum of dividends paid to date.
The medium term dividend policy
is for increases at least in line with
inflation.
The Board reviews the Company’s
rental income and operational
expenses on a quarterly basis, as the
Directors consider that both of these
elements are important components
in the generation of Shareholder
returns. Further information can
be found in Notes 2 and 4 to the
Financial Statements on pages 93
and 94.
In addition, the Directors will
consider economic, regulatory and
political trends and factors that may
impact on the Company’s future
development and performance.
Share buy-backs
545,000 Ordinary Shares were
bought back in the year to 31 March
2023 (2022: nil Ordinary Shares
bought back). As at 31 March 2023,
and as at the date of this Annual
Report, 2,537,511 Ordinary Shares
of 10p each are held in Treasury.
Further information can be found in
Note 14 to the Financial Statements
on page 103.
At the forthcoming AGM, the Board
will seek the necessary Shareholder
authority to continue to conduct
share buy-backs.
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 this Annual
Report, and from the information
provided in the Chairman’s
Statement (pages 8 and 9) and in the
Manager’s Report (pages 10 to 31).
40
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
BUSINESS REVIEW
CONTINUED
The Board’s section 172 duty and stakeholder engagement
The Directors recognise the importance of an effective Board and its ability to discuss, review
and make decisions to promote the long-term success of the Company and protect the interests
of its key stakeholders. As required by Provision 5 of The AIC Code of Corporate Governance
(the AIC Code) (and in line with The UK Corporate Governance Code (the Code)), the Board has
discussed the Directors’ duty under Section 172 of the Companies Act and how the interests of key
stakeholders have been considered in the Board discussions and decision making during the year.
This has been summarised in the table below:
Form of Engagement
Influence on Board decision making
Stakeholder: Shareholders
AGM – Shareholders are encouraged
to attend the AGM and are provided
with the opportunity to ask questions
and engage with the Directors and the
Manager. Shareholders are also encouraged
to exercise their right to vote on the
resolutions proposed at the AGM (please
refer to the further information on the AGM
in the Directors’ Report on pages 45 to 53).
Shareholder documents – The Company
reports formally to Shareholders by
publishing Annual and Interim Reports,
normally in June and November each year.
Significant matters or reporting
obligations are disseminated to
Shareholders by way of announcement
to the London Stock Exchange.
The Company Secretary acts as a key
point of contact for the Board and
all communications received from
Shareholders are circulated to the Board.
Other Shareholder events include investor
and wealth manager lunches and roadshows
organised by the Company’s Broker at
which the Manager is invited to present.
Dividend declarations – The Board recognises
the importance of dividends to Shareholders
and takes this into consideration when making
decisions to pay quarterly and propose final
dividends for each year. Further details regarding
dividends for the year under review can be found
in the Chairman’s Statement on pages 8 and 9.
Share buy-back policy – the Directors recognise
the importance to Shareholders of the Company
maintaining a buy-back policy and considered this
when establishing the current programme. Further
details can be found in this Business Review on
page 39, and in the Directors’ Report on page 53.
Shareholder communication and feedback
from the Broker feeds directly into the Board’s
annual strategy review, the asset allocation
considerations and the Manager’s guidance
on desirable investment characteristics.
The Directors recognise the importance to
Shareholders of having a diverse Board with a
range of skilled and experienced individuals
represented, and took this into account when
the decision was made during the year to
appoint Lucy Winterburn as a Director.
Stakeholder: Manager
Quarterly Board Meetings – The Manager
attends every Board Meeting and
presents a detailed portfolio analysis
and reports on key issues such as
performance of the property portfolio.
The Manager reports to the Board on the
Company’s property portfolio and the
Directors challenge the Manager where they
feel it is appropriate.
The Directors and the Manager are cognisant of
the Company’s investment policy and the strategy
agreed by the Board, which the Manager has been
tasked with implementing.
The Directors and Manager worked together during
the year on the restructuring of the Company’s debt,
on competitive terms, and completed the transition
to a direct property investment trust.
The Board engages constructively with the
Manager to ensure investments are consistent with
the agreed strategy and investment policy.
The Manager works closely with all tenants and,
as a result, 100% of all contracted rents due were
collected in the year to 31 March 2023.
41
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Form of Engagement
Influence on Board decision making
Stakeholder: Registrar
Review meetings and control reports.
The Directors review the performance of all third
party service providers; this includes ensuring
compliance with GDPR.
Stakeholder: Depositary andCustodian
Regular statements and control
reports received, with all holdings
and balances reconciled.
The Directors review the performance of all third
party providers, including oversight of securing
the Company’s assets.
Stakeholder: Advisers
The Company relies on the expert
audit, accounting and legal
advice received from its Auditor,
Administrator and Legal Advisers.
The Directors review the performance of all third
party service providers.
As referred to in the Chairman’s Statement,
during the year the Company carried
out a major debt reconstruction, which
included the early repayment of the
9.375% Debenture Stock 2026; secured
an additional £13 million of borrowings
under an existing loan; increased the
term of one of the loans to 2033; and
completed its transition to a direct
property investment trust. There were no
other key decisions made in the year to 31
March 2023 that require to be disclosed.
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 Investment Manager
through members of its portfolio
management team. 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.
Independent auditor
The Company’s Independent Auditor is required
to report if there are any material inconsistencies
between the content of the Strategic Report and
the Financial Statements. The Independent
Auditor’s Report can be found on pages 71 to 79.
Future strategy
The Board and the Investment Manager intend
to maintain the strategic policies set out above
for the year ending 31 March 2024 as it is
believed that these are in the best interests of
Shareholders.
The Company’s Viability Statement is included in
the Directors’ Report on page 46.
Approval
This Business Review, and the Strategic Report as
a whole, was approved by the Board of Directors
and signed on its behalf by:
John Kay
Chairman
26 June 2023
York
Governance
Report
43
44
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
DIRECTORS’ DETAILS
John Kay
Chairman
Sir John Kay is an economist
specialising in the application
of economics to business issues.
He has been chairman of London
Economics, has held chairs at the
London Business School and Oxford
University and was a director of
Scottish Mortgage Investment
Trust. John was knighted in the
Queen’s 2021 Birthday Honours List
for services to economics, finance
and business. He was appointed
as a Director on 4 February 1994
and as Chairman on 8 July 2022
and is a member of the Audit and
Management Engagement and
Nomination Committees.
Matthew Oakeshott
Matthew Oakeshott, after studying
economics at Oxford University and
a period as special adviser to Mr Roy
Jenkins as Home Secretary, joined
S.G.Warburg & Co in 1976 and became
a director of Warburg Investment
Management in 1978. He was
Investment Manager of Courtaulds
Pension Fund from 1981 to 1985. He is
chairman of OLIM Property Limited,
which manages the Company’s
property portfolio. Matthew is
one of the original founders of the
Company having served previously
on the Board from 1 April 2007 to 1
April 2019. He was re-appointed as a
Director on 10 September 2020.
David Smith
David Smith retired from the legal
firm Shepherd and Wedderburn LLP
in 2008 where he was a partner for
34 years, specialising in commercial
property. He was appointed as
a Director on 10 July 2009 and
chairs the Audit and Management
Engagement Committee and the
Nomination Committee.
Jo Valentine
Baroness Josephine Valentine
was appointed as a Director on 13
November 2020. She is a crossbench
member of the House of Lords and
her other current non-executive roles
include, chair of Heathrow Southern
Railway Ltd and co-director of Place
for Business in the Community.
Other previous roles have included
chief executive of London First; an
investment banker at Barings Bank;
head of the corporate finance and
planning function at The BOC Group;
a National Lottery commissioner; a
member of the Board of Governors
for The Peabody Trust, a London
housing association; a non-executive
director of HS2 and of Crossrail;
and a board member of a Triple
Point venture capital trust. Jo is
the Company’s Senior Independent
Director and a member of the Audit
and Management Engagement and
Nomination Committees.
Lucy Winterburn
Lucy Winterburn was appointed as
Director on 1 August 2022. She is
also a Director in Savills Investment
Management’s UK Investment
Team and is the Fund Manager
for a FTSE 100 Corporate Pension
Fund, invested throughout the UK
across all commercial property
sectors. After graduating from
Aberdeen University, Lucy joined
Savills in 1996 on their graduate
training scheme, qualifying as a
Chartered Surveyor in 1998. Lucy is
a member of the Company’s Audit
and Management Engagement and
Nomination Committees.
All Directors, other than Matthew Oakeshott, are members of the Audit and Management
Engagement Committee and the Nomination Committee.
All Directors, other than Matthew Oakeshott, are also directors of Value and Indexed
Property Income Services Limited.
45
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
DIRECTORS’ REPORT
The Directors submit their report
together with the Financial
Statements of the Group and the
Company for the year ended 31
March 2023. A summary of the
financial results for the year can be
found in the Highlights of the year
and Financial record in the Business
Review on page 33. Details of the final
dividend for the year are set out in
the Chairman’s Statement and in the
Business Review within the Strategic
Report. The Statement of Corporate
Governance, which forms part of this
Directors’ Report, is shown on pages
58 to 65.
Principal activity
and status
The Company has applied for and
has been accepted as an approved
investment trust under Sections
1158 and 1159 of the Corporation
Tax Act 2010 and Part 2, Chapter 1
of Statutory Instrument 2011/2999.
This approval relates to accounting
periods commencing on or after
1 April 2012. The Directors are
of the opinion that the Company
has conducted its affairs so as to
be able to retain such approval.
The Company intends to manage
its affairs so that its Ordinary
Shares continue to be a qualifying
investment for inclusion in the
stocks and shares component of an
Individual Savings Account.
The Company is a member of the AIC,
and its Ordinary Shares are listed on
the London Stock Exchange.
Regulatory status
As an investment trust company
pursuant to Section 1158 of the
Corporation Tax Act 2010, the
rules of the FCA in relation to non-
mainstream investment products do
not apply to the Company.
Going concern
The Group and the Parent Company’s
business activities, together with
the factors likely to affect their
future development and
performance, are set out in the
Directors’ Report, and the financial
position of the Group and of the
Parent Company is described in the
Chairman’s Statement within the
Strategic Report. In addition, Note 21
to the Financial Statements includes:
the policies and processes for
managing the financial risks; details
of the financial instruments; and the
exposures to market risk (price risk
and interest rate risk), liquidity risk,
credit risk and property risk. The
Directors believe that the Group and
the Parent Company are well placed
to manage their business risks.
Following a detailed review,
the Directors have a reasonable
expectation that the Group and the
Parent Company have adequate
financial resources to enable them
to continue in operational existence
for the foreseeable future, being
at least 12 months from approval
of the Financial Statements, and
accordingly, they have continued to
adopt the going concern basis (as
set out in Note 1(b) to the Financial
Statements on page 89) when
preparing the Annual Report and
Financial Statements.
46
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
DIRECTORS’ REPORT
CONTINUED
Viability statement
For the purposes of this Viability
Statement, references to “the
Company” shall include the Group
and the Parent Company. In
accordance with Provision 31 of the
UK Corporate Governance Code,
published in July 2018 and Principle
36 of the AIC Code of Corporate
Governance, published in February
2019 (the Codes), the Board has
considered the Company’s prospects
and risks for the forthcoming five-
year period to 31 March 2028. The
Board considers that this five-
year period is appropriate for an
investment trust company of its size
and based on the financial position
of the Company as detailed in the
Chairman’s Statement, the Manager’s
Report and the Business Review of
this Annual Report.
In making this statement, the Board
carried out a robust assessment of
the principal and emerging risks
facing the Company as set out in the
Business Review, including those
that might threaten its business
model, future performance, solvency,
or degree of liquidity within the
portfolio. The Board concentrated
its efforts on the major factors that
affect the economic, regulatory, and
political environment, including
the recent COVID-19 pandemic,
the impact of the current cost of
living crisis, rising interest rates
and increasing inflation, all being
experienced in the UK at present, and
the ongoing war in Ukraine.
The Board has considered the
Company’s financial position and
its ability to liquidate its portfolio
and meet its liabilities and draws
attention to the following points
which the Board took into account
in its assessment of the Company’s
future viability:
a.
The property portfolio was valued
at £150.5m as at 31 March 2023.
The loan facilities expiring in
2026 and 2033 require security of
£88.625m.
b.
The Company is closed ended in
nature and, therefore, does not
require to sell investments when
Shareholders wish to sell their
shares.
c.
The Board has considered the
risks faced by the Company as
detailed in the Business Review
and referred to in Note 21 to the
Financial Statements on pages
106 to 112 and have concluded
that the Company would be able
to take appropriate action to
protect the value of the Company.
d.
Due to the nature of the business
of the Company and the nature
of its investments and to the
Company’s long history, the
Board are able to conclude that
expenses are predictable and
modest in relation to asset values.
There is a significant proportion
of expenses on an ad valorem
basis (management fees to 31
March 2023 are 21.7% of total
expenses) which reduces as NAV
declines. Expenses including
interest were covered 1.93 times
by income in the year.
e.
There are no capital
commitments currently foreseen
that would alter the Board’s view.
f.
Details of the financial covenants
which the Company complies
with are detailed in Note 12 to the
Financial Statements on pages
102 and 103.
In assessing the Company’s future
viability, the Board have assumed
that investors will wish to continue
to have exposure to the Company’s
activities, in the form of a closed
ended entity; performance will
continue to be satisfactory; and
the Company will continue to have
access to sufficient capital.
Accordingly, given the above, the
Board has concluded that there is
a reasonable expectation that the
Company will be able to continue
in operation and meet its liabilities
as they fall due over the five years
ending 31 March 2028.
47
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Financial instruments
The Company’s financial
instruments comprise its investment
portfolio, cash balances and debtors
and creditors that arise directly
from its operations, including
accrued income and purchases
and sales awaiting settlement.
The main risks that the Company
faces arising from its financial
instruments are disclosed in Note
21 to the Financial Statements.
Global greenhouse
gas emissions
The Company is a low energy
user and is, therefore, exempt
from the reporting obligations
under the Companies (Director’s
Report) and Limited Liability
Partnerships (Energy and Carbon
Report) Regulations 2018, which
implement the Government’s policy
on Streamlined Energy and Carbon
Reporting (SECR). The Company
has no greenhouse gas emissions
to report from the operations of
the Company, nor does it have
any direct responsibility for any
emissions producing sources,
including those within its underlying
investment portfolio under Part
7 of Schedule 7 to the Large and
Medium-sized Companies and
Groups (Accounts and Reports)
Regulations 2008, as amended.
Share capital
and voting rights
As at 31 March 2023, and as at the
date of approval of this Annual
Report, the Company’s share capital
comprised 43,012,464 Ordinary
Shares of 10p nominal value in issue
and 2,537,511 Ordinary Shares of 10p
nominal value held in Treasury (31
March 2022: 43,557,464 Ordinary
Shares of 10p nominal value in issue
and 1,922,511 Ordinary Shares of 10p
nominal value in Treasury).
Each Ordinary Share in issue entitles
the holder to one vote on a show of
hands and, on a poll, to one vote for
every share held.
Directors
Biographies of the Directors who held
office at the year end and as at the
date of this Annual Report are shown
in the Directors’ Details section on
page 44 of this Annual Report.
The Directors’ interests in the shares
of the Company at the year end are
shown in the table on page 57. The
Directors’ interests were unchanged
at the date of this Annual Report.
The Company’s Articles of
Association (the Articles) require
that each Director shall retire and
seek re-election at every third
Annual General Meeting (AGM). A
Director appointed during the year
is required, under the provisions of
the Company’s Articles, to retire and
seek election by Shareholders at the
next AGM.
The Directors take the view, in line
with the AIC Code of Corporate
Governance (AIC Code), that
independence is not compromised
by length of service on the Board and
that experience can add significantly
to the Board’s strength.
Accordingly, all Directors who
served during the year, other
than Matthew Oakeshott, are
considered by the Board to be
independent. Matthew Oakeshott is
not considered to be independent
as he is chairman of OLIM Property,
the Investment Manager, and
a substantial Shareholder.
Notwithstanding the provisions in
the Articles, in accordance with the
AIC Code, the Board has agreed that
all Directors should be subject to
annual re-election.
48
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
DIRECTORS’ REPORT
CONTINUED
During the year under review, the
Nomination Committee undertook
a review of the composition of
the Board, and after considering
a number of potential candidates,
recommended to the Board that
Lucy Winterburn be appointed as a
Non-executive Director. On 26 July
2022, on the recommendation of the
Nomination Committee, the Board
announced the appointment of
Lucy Winterburn to the Board. Lucy
qualified as a Chartered Surveyor
in 1998 and is a Director in Savills
Investment Management’s UK
Investment Team and is the Fund
Manager for a FTSE 100 Corporate
Pension Fund invested throughout
the UK across all commercial
property sectors. Lucy will stand for
election by Shareholders at the 2023
AGM, being the first AGM following
her appointment.
No external search consultancy was
used by the Company during the year
ended 31 March 2023.
The Nomination Committee
reviewed the skills, experience and
independence of John Kay, Matthew
Oakeshott, David Smith, Jo Valentine
and Lucy Winterburn, being the
Directors standing for election/
re-election, and has no hesitation
in recommending to the Board and
to Shareholders their election/re-
election as Directors at the AGM.
The Board confirms that, following
a formal process of evaluation,
the performance of each Director
standing for election/re-election
continues to be effective and all
Directors have demonstrated
commitment to their roles.
John Kay is an economist with
over 35 years investment trust
experience. He was knighted in the
Queen’s 2021 Birthday Honours
List for services to economics,
finance and business. John is the
Chairman of the Company.
Matthew Oakeshott is one of
the original founders of the
Company and had served on the
Board previously for a number
of years. He has extensive
investment trust experience and
is the chairman of OLIM Property
Limited, (OLIM Property) the
Company’s Investment Manager.
David Smith was a partner in the
legal firm Shepherd & Wedderburn
LLP for 34 years, specialising in
commercial property. David is the
Chair of the Audit and Management
Engagement Committee and
Nomination Committee.
Jo Valentine has extensive corporate
finance experience and has
previously worked as an investment
banker with many years’ experience
in holding senior positions on other
boards. Jo is the Company’s Senior
Independent Director.
At the time of her appointment,
the Chairman stated that Lucy
Winterburn’s property experience
would be invaluable as the Company
completes its transition to a direct
property investment trust.
Further information on the
qualifications, skills, and experience
of the Directors subject to election/
re-election can be found in the
Directors’ Details section on page 44
of this Annual Report.
The Board believes that, for the
above reasons, the contribution
of each Director continues to be
important to the continued long-
term success of the Company, as
the combined skills and experience
ensure a balanced Board of Directors
with a wealth of knowledge and
understanding in the key areas that
are relevant to the Company. It is,
therefore, believed to be in the best
interests of Shareholders that those
Directors standing for election/
re-election be elected/re-elected
and Resolutions to this effect will
be proposed at the 2023 AGM.
49
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Investment management
The Company complies with the
AIFMD which came into force
on 22 July 2014. An investment
management agreement was entered
into by the Company (effective from
22 July 2014) in which the Company
appointed VIS, a wholly owned
subsidiary of the Company, as its
AIFM. Under a separate updated and
restated investment management
agreement entered into by the
Company and VIS on 15 May 2015
(and further revised on 20 September
2018 and 5 November 2020), VIS
has contractually delegated its
management responsibilities for the
property portfolio to OLIM Property.
The investment management
agreement provides that, with effect
from 1 October 2020, VIP shall pay
to OLIM Property a management fee
of 0.6% per annum of the total value
of VIP’s assets (such assets being
valued at quarterly valuation dates
on 31 March, 30 June, 30 September,
and 31 December in each year). There
is no performance fee.
Accordingly, during the year ended 31
March 2023, OLIM Property received
an annual investment management
fee of £990,000 (2022 - £1,090,000)
excluding VAT.
The Directors, together with the
Audit and Management Engagement
Committee and the Directors of
VIS, review the performance of the
Investment Manager and review
the terms and conditions of its
appointment on a regular basis.
Following this review, the Directors
are satisfied that the continuing
appointment of OLIM Property as
Investment Manager is in the best
interests of Shareholders as a whole,
as the Company benefits from the
specialised team of investment
professionals within OLIM Property.
The costs and expenses of VIS are
also met by the Company.
An additional fee is payable to
the Company Secretary, Maven
Capital Partners UK LLP, in respect
of company secretarial and
administrative services.
50
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
DIRECTORS’ REPORT
CONTINUED
As at 22 June 2023, being the last practicable date prior to the publication of
this Annual Report, the only persons known to the Company who, directly or
indirectly, were interested in 3% or more of the Company’s issued ordinary
share capital were as follows:
Shareholder
Number of
Ordinary Shares
% held
RATHBONE NOMINEES LIMITED*
12,784,834
29.72%
INTERACTIVE INVESTOR
SERVICES NOMINEES LIMITED
6,876,466
15.98%
HARGREAVES LANSDOWN (NOMINEES)
LIMITED
4,578,235
10.64%
SMITH & WILLIAMSON
NOMINEES LIMITED
1,360,716
3.16%
* Included in the Rathbones Nominees Limited holding is 11,555,000 Ordinary Shares (26.86%) held
by Matthew Oakeshott, as detailed on page 57.
Substantial interests
As at 31 March 2023, the only persons known to the Company who, directly or
indirectly, were interested in 3% or more of the issued ordinary share capital
of the Company were as follows:
Shareholder
Number of
Ordinary Shares
% held
RATHBONE NOMINEES LIMITED*
12,820,383
29.81%
INTERACTIVE INVESTOR
SERVICES NOMINEES LIMITED
6,866,192
15.96%
HARGREAVES LANSDOWN (NOMINEES)
LIMITED
4,611,391
10.72%
SMITH & WILLIAMSON
NOMINEES LIMITED
1,489,716
3.46%
* Included in the Rathbones Nominees Limited holding is 11,555,000 Ordinary Shares (26.86%) held
by Matthew Oakeshott, as detailed on page 57.
51
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Independent auditor
BDO LLP were appointed as the
Company’s Independent Auditor on
19 March 2020.
The Directors are of the view
that the Company’s Independent
Auditor should continue in office
and Resolutions 10 and 11 will be
proposed at the 2023 AGM to propose
the re-appointment of BDO LLP
and to authorise the Directors to
fix its remuneration. The Directors
have received assurances from
BDO LLP that they are independent
and objective and the Directors
remain satisfied that objectivity and
independence is being safeguarded
by BDO LLP. No non-audit services
were provided by BDO LLP to the
Company and, accordingly, no non-
audit fees were paid to BDO LLP
during the year to 31 March 2023.
The Directors confirm that, as far
as they are each aware, as at the
date of this Annual Report, there
is no relevant audit information of
which the Company’s Independent
Auditor is unaware, and that
each Director has taken all the
steps that they might reasonably
be expected to have taken as a
Director to make themselves
aware of any relevant audit
information and to establish that
the Company’s Independent Auditor
was aware of that information.
Additional information
Information relating to dividends,
likely future developments and
important events since the year
end, are detailed in the Chairman’s
Statement on pages 8 and 9 and in
the Business Review on pages 32 to
41. Where not provided elsewhere in
the Directors’ Report, the following
additional information is required
to be disclosed by the Large and
Medium-sized Companies and
Groups (Accounts and Reports)
Regulations 2008.
There are no restrictions on the
transfer of Ordinary Shares in the
Company, or their related voting
rights, other than certain restrictions
which may from time to time be
imposed by law (for example, the
Market Abuse Regulation). The
Company is not aware of any
agreements between Shareholders
that may result in a transfer of
securities and/or voting rights.
The Company’s Articles may only
be amended by the passing of a
Special Resolution at a general
meeting of Shareholders.
52
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
DIRECTORS’ REPORT
CONTINUED
Annual General Meeting
The Notice of the Annual General
Meeting, which will be held on
Wednesday, 2 August 2023 at
12.30pm at the Kingham Room,
Broadway House Conference Centre,
Tothill Street, London SW1H 9NQ and
related notes may be found on pages
125 to 129 of this Annual Report.
The Board encourages Shareholders
to vote at the AGM and votes can be
submitted by hard copy proxy form,
via CREST, or electronically using
the Registrar’s share portal service at
www.investorcentre/eproxy. Please
refer to the notes to the Notice of
Annual General Meeting on pages 127
to 129 of this Annual Report.
The Notice of Annual General
Meeting is normally sent out at least
20 working days in advance of the
meeting.
Among the Resolutions being
put to the AGM, the following is
a more detailed explanation of
Resolutions 12 to 15. Resolutions
1 to 11 are self-explanatory and
require no further explanation.
Issue of Ordinary
Shares by the Company
Resolution 12, which is an Ordinary
Resolution, will, if passed, renew
the Directors’ authority to allot
new Ordinary Shares up to a
nominal value of £430,124. This will
allow the Directors to allot up to
4,301,240 Ordinary Shares (being
approximately 10% of the total
ordinary issued share capital of the
Company as at the date of the Notice
of Annual General Meeting set out
on pages 125 to 129 of this Annual
Report) (excluding Treasury shares).
During the year ended 31 March 2023,
no Ordinary Shares were allotted
(2022: nil).
Limited disapplication
of pre-emption rights
Resolution 13, which is a Special
Resolution, will, if passed, renew
the Directors’ existing authority to
allot new shares or sell Treasury
shares for cash without the shares
first being offered to existing
Shareholders in proportion to their
existing holdings. This will give the
Directors authority to make limited
allotments or sell shares from
Treasury of up to a nominal value
of £430,240, being up to 4,301,240
Ordinary Shares, representing
approximately 10% of the total
ordinary issued share capital. The
authority to issue shares on a non
pre-emptive basis includes shares
held in Treasury (if any) which
the Company sells or transfers,
including pursuant to the authority
conferred by Resolution 12. Since
the introduction of The Companies
(Acquisition of Own Shares)
(Treasury Shares) Regulations
2003 on 1 December 2003, a listed
company is able to hold shares that it
has repurchased in Treasury rather
than cancel them.
New Ordinary Shares will only be
issued at prices representing a
premium to the last published net
asset value per share.
53
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Purchase of the Company’s
Ordinary Shares
During the year ended 31 March
2023, 545,000 Ordinary Shares were
bought back by the Company to be
held in Treasury, (2022: nil shares
bought back and held in Treasury).
As at the date of the approval of this
Annual Report, there were 2,537,511
Ordinary Shares held in Treasury.
The Company’s buy back authority
was last renewed at the AGM held on
8 July 2022. Special Resolution 14
renews the Board’s authority to make
market purchases of the Company’s
Ordinary Shares in accordance
with the provisions contained in
the Companies Act 2006 and the
FCA Listing Rules. Accordingly, the
Company will seek the authority
to purchase up to a maximum
of 14.99% of the issued ordinary
share capital (excluding Treasury
shares) at the date of passing of
Resolution 14 (being approximately
6,447,568 Ordinary Shares as at the
latest practicable date prior to the
publication of this Annual Report) at
a minimum price of not less than 10
pence per share (being the nominal
value). Under the Listing Rules of the
FCA, the maximum price that may be
paid on the exercise of this authority
must not exceed the higher of: (i)
105% of the average of the middle
market quotations (as derived from
the Daily Official List of the London
Stock Exchange) for the shares over
the five business days immediately
preceding the date of purchase; and
(ii) the higher of the last independent
trade and the highest current
independent bid on the trading venue
on which the purchase is carried out.
The authorities being sought under
Resolutions 12, 13 and 14 shall expire
at the conclusion of the AGM in
2024 or, if earlier, on the expiry of 15
months from the date of the passing
of Resolutions 12, 13 and 14 unless
such authority is renewed prior to
such time. The Directors will only
exercise these authorities if they
believe it is advantageous and in the
best interests of Shareholders and
would result in an increase in the net
asset value per share. Any Ordinary
Shares purchased shall either be
cancelled or held in Treasury.
Notice of Meeting
Under the Companies Act 2006,
the notice period for the holding of
general meetings of the Company is
21 clear days unless Shareholders
agreed to a shorter notice period and
certain other conditions are met.
Resolution 15, which is a Special
Resolution, will be proposed to
authorise the Directors to call general
meetings of the Company (other
than AGMs) on not less than 14 clear
days’ notice, as permitted by the
Companies Act 2006 amended by the
Companies (Shareholders’ Rights)
Regulations 2009.
It is currently intended that this
flexibility to call general meetings
on shorter notice will only be used
for non-routine business and where
considered to be in the interests of
all Shareholders. If Resolution 15
is passed, the authority to convene
general meetings on not less than
14 clear days’ notice will remain
effective until the conclusion of the
AGM in 2024 or, if earlier, on the
expiry of 15 months from the date
of passing of Resolution 15, unless
renewed prior to such time.
Recommendation
Your Board considers Resolutions 1
to 12 inclusive, which are all Ordinary
Resolutions, and Resolutions 13 to
15 inclusive, which are all Special
Resolutions, to be in the best interests
of the Company and most likely to
promote the success of the Company
for the benefit of its members as
a whole. Accordingly, your Board
unanimously recommends that
Shareholders vote in favour of
Resolutions 1 to 15 inclusive to be
proposed at the AGM to be held on
Wednesday, 2 August 2023.
By order of the Board
Maven Capital Partners UK LLP
Company Secretary
26 June 2023
54
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
DIRECTORS’ REMUNERATION REPORT
This report has been prepared in accordance with the requirements of the
Companies Act 2006. An Ordinary Resolution for the approval of this report
will be put to the members of the Company at the forthcoming AGM. The law
requires the Company’s Auditor to audit certain of the disclosures
made.
Where disclosures have been audited, they are indicated as such, and the
Auditor’s opinion is included in their report on pages 71 to 79.
The Nomination Committee of the Board, chaired by David Smith, fulfils
the functions of a remuneration committee in relation to setting the level of
Directors’ fees and the Remuneration Policy. As none of the Directors is an
executive director, the Company is not required to comply with the Principles
of the UK Corporate Governance Code in respect of executive directors’
remuneration.
As at 31 March 2023, and as at the date of this Annual Report, the Company
had five Directors and their biographies are shown in the Directors’ Details
section on page 44 of this Annual Report. The names of the Directors who
served during the year together with the fees paid during the year are shown
in the table on page 55.
Remuneration policy
The Company’s policy is that the remuneration of the Directors should
reflect the experience of the Board as a whole and be fair and comparable
with that of other investment trust companies that are similar in size, have
a similar capital structure and a similar investment objective. Directors
are remunerated in the form of fees, payable monthly in arrears, to the
Director personally or to a third party specified by him or her. The fees for
the Directors are determined within the limits set out in the Company’s
Articles of Association, which limit the aggregate of the fees payable to the
Directors to £200,000 and the approval of Shareholders in general meeting
would be required to change this limit. It is intended that the fees payable
to the Directors should reflect their duties, responsibilities, and the value
and amount of time committed to the Company’s affairs, and should also be
sufficient to enable candidates of a high quality to be recruited and retained.
The Directors do not receive bonuses, pension benefits, share options, long-
term incentive schemes or other benefits, and the fees are not specifically
related to the Directors’ performance, either individually or collectively.
A copy of the Remuneration Policy may be inspected by the members of the
Company at its registered office.
It is the Board’s intention that the above Remuneration Policy be put to a
Shareholders’ vote at least once every three years and, as a resolution was
approved at the AGM held in 2020, an Ordinary Resolution for its approval for
the three years to 31 March 2026 will next be proposed at this year’s AGM.
At the AGM held on 3 September 2020, the result in respect of the Ordinary
Resolution to approve the Directors’ Remuneration Policy for the three years
to 31 March 2023 was as follows:
Percentage of
votes cast for
Percentage of
votes cast against
Number of
votes withheld
Remuneration Policy
99.50
0.50
275,095
During the year ended 31 March 2023, the Board was not provided with advice
or services by any person in respect of its consideration of the Directors’
remuneration. However, in the application of the Board’s policy on Directors’
remuneration, as defined above, the Committee expects, from time to time, to
review the fees paid to the directors of other investment trust companies.
55
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
During the year ended 31 March 2023, the Nomination Committee carried out a review of the
remuneration policy and the level of Directors’ fees and it was resolved that as the rates of
remuneration had remained unchanged since 1 April 2020, and given the increased activity
during the year to reconstruct the Company’s debt and complete the transition to a direct property
investment trust, together with rising inflation, the rates should be increased by approximately
10% for each Director with effect from 1 April 2023. Accordingly, the rates for the year to 31 March
2024, will be £33,000 for the Chairman, £27,000 for the Chairman of the Audit and Management
Engagement Committee and £24,500 for each other Director. It was further resolved that these
revised fees would be fixed for the year to 31 March 2024 and for the year to 31 March 2025.
An Ordinary Resolution to approve this Directors’ Remuneration Report will be put to
Shareholders at the 2023 AGM. At the AGM held on 8 July 2022, the result in respect of the
Ordinary Resolution to approve the Directors’ Remuneration Report for the year ended 31 March
2022 was as follows:
Percentage of
votes cast for
Percentage of
votes cast against
Number of
votes withheld
Remuneration Policy
95.44
4.56
12,498
Directors’ fees and total remuneration (audited)
The Company does not have any employees and Directors’ remuneration comprises solely of
Directors’ fees. The Directors’ fees for the years ended 31 March 2021, 31 March 2022, 31 March
2023, and projected fees for the year ending 31 March 2024, respectively are as follows:
Directors’
fees (fixed)
Year ended
31 March
2021
£
% change
for the
year to
31 March
2021
Directors’
fees (fixed)
Year ended
31 March
2022
£
% change
for the
year to
31 March
2022
Directors’
fees (fixed)
Year ended
31 March
2023
£
% change
for the
year to
31 March
2023
Directors’
fees (fixed)
Year ending
31 March
2024
£
James Ferguson
1
30,000
3.9
30,000
0.0
8,145
–
–
John Kay
2
22,000
4.8
22,000
0.0
27,828
10.0
33,000
Dominic Neary
3
22,000
4.8
6,860
0.0
–
–
–
Matthew
Oakeshott
4
–
–
–
–
–
–
–
David Smith
(Chair of the
Audit and
Management
Engagement
Committee)
24,500
4.3
24,500
0.0
24,500
10.0
27,000
Jo Valentine
5
8,433
4.8
22,000
0.0
22,000
10.0
24,500
Lucy Winterburn
6
–
–
–
–
14,667
10.0
24,500
Total
106,933
105,360
97,140
109,000
1 James Ferguson retired as Chairman and from the Board following the conclusion of the 2022 AGM.
2 John Kay was appointed as Chairman following the conclusion of the 2022 AGM.
3 Dominic Neary retired from the Board following the conclusion of the 2021 AGM.
4 Matthew Oakeshott was appointed as a Director on 10 September 2020. No additional fees are payable to Mr Oakeshott for
his services as a Director.
5 Jo Valentine was appointed as a Director on 13 November 2020.
6 Lucy Winterburn was appointed as a Director on 1 August 2022.
56
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
DIRECTORS’ REMUNERATION REPORT
CONTINUED
The above amounts exclude any employers’ national insurance contributions,
if applicable. No other form of remuneration was received by the Directors
and no Director has received any taxable expenses, compensation for loss of
office or non-cash benefit for the year ended 31 March 2023 (2022: £nil).
Directors do not have service contracts, but new Directors are provided
with a letter of appointment. The terms of appointment provide that
Directors should retire and be subject to election at the first AGM after
their appointment. The Company’s Articles require all Directors to retire
by rotation at least every three years. As noted in the Directors’ Report, the
Board has decided that, in accordance with the AIC Code, all Directors should
stand for annual re-election. There is no notice period and no provision for
compensation upon early termination of appointment, save for any arrears of
fees which may be due.
During the year ended 31 March 2023, no communication had been received
from Shareholders regarding Directors’ remuneration.
Relative cost of Directors’ remuneration
The chart below shows, for the years ended 31 March 2022 and 31 March 2023,
the cost of Directors’ fees compared with the level of dividend distribution.
Relative Cost of Directors‘ Remuneration
0
1,000
2,000
3,000
4,000
5,000
6,000
Directors’
fees 2022
£’000
Dividends
2022
Directors’
fees 2023
Dividends
2023
As noted in the Strategic Report, none of the Directors is executive and,
therefore, the Company does not have a chief executive officer, nor does it
have any employees. In the absence of a chief executive officer or employees,
there is no related information to disclose.
Directors’ and Officers’ liability insurance
The Company purchases and maintains liability insurance covering the
Directors and Officers of the Company. This insurance is not a benefit in kind,
nor does it form part of the Directors’ remuneration.
Company performance
The Board is responsible for the Company’s investment strategy and
performance, although the management of the Company’s investment
portfolio is delegated to the Investment Manager through the investment
management agreement, as referred to in the Directors’ Report.
57
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
The graph below compares the total returns on an investment of £100 in the
Ordinary Shares of the Company, for each annual accounting period for the
ten years to 31 March 2023, assuming all dividends are reinvested, with the
total shareholder return on a notional investment of £100 made up of shares
of the same kinds and number as those by reference to which the FTSE All-
Share Index is calculated. This index was chosen for comparison purposes
as it was the most relevant to the Company’s investment portfolio for the ten
year period under review.
Cumulative total return for the ten year period ended 31 March 2023
(figures rebased to 100)
Directors’ interests (audited)
The Directors’ interests in the share capital of the Company as at 31 March
2023, 31 March 2022, and as at the date of this Annual Report are shown
below. There is no requirement for Directors to hold shares in the Company.
Approval
The Directors’ Remuneration Report was approved by the Board of Directors
and signed on its behalf by:
David Smith
Director
26 June 2023
100
120
140
160
180
200
VIP share price total return
FTSE all-share total return
Total return
31 March 2023 Ordinary
Shares of 10p each
31 March 2022 Ordinary
Shares of 10p each
John Kay
238,114
238,114
John Kay – Family
19,274
19,274
John Kay – as Trustee
74,830
74,830
Matthew Oakeshott & family
4,500,000
4,500,000
Matthew Oakeshott – the AIL
Pension Scheme
2,555,000
2,555,000
Matthew Oakeshott - The
Coltstaple Charitable Trust
4,500,000
4,500,000
David Smith
19,320
19,320
Jo Valentine
13,500
13,500
Lucy Winterburn
–
N/A
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
58
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
STATEMENT OF CORPORATE GOVERNANCE
The Company is committed to, and
is accountable to the Company’s
Shareholders for, a high standard
of corporate governance. The Board
has put in place a framework for
corporate governance that it believes
is appropriate for an investment
trust company and enables it to
comply with The UK Corporate
Governance Code (the Code), which is
available from the website of the FRC
at www.frc.org.uk.
During the year under review,
the Company was a member of
the Association of Investment
Companies (AIC), which published a
revised version of its own AIC Code
of Corporate Governance (the AIC
Code) in February 2019. The Board
has adopted the principles of the
AIC Code and reports on compliance
with these below. The AIC Code
provides a comprehensive guide
to best practice in certain areas
of governance where the specific
characteristics of investment trusts
suggest alternative approaches
to those set out in the Code.
The key requirements of the AIC
Code include:
•
a requirement for the annual
re-election of all directors of all
investment companies;
•
a requirement that a board
should understand the views of
its company’s key stakeholders
and describe in the annual report
how their interests and the
matters set out in Section 172
of the Companies Act 2006 (the
duty to promote the success of the
company) have been considered
in board discussions and decision
making;
•
that the chairman of an
investment company may now
remain in post beyond nine years
from the date of first appointment
by the board. Notwithstanding
this more flexible approach, the
board is required to determine
and disclose a policy on the
tenure of the chairman.
The AIC Code is available from the
AIC website at www.theaic.co.uk.
This Statement of Corporate
Governance forms part of the
Directors’ Report.
Application of the main
principles of the AIC code
This statement describes how
the main principles identified in
the AIC Code have been applied
by the Company throughout
the year, as is required by the
Listing Rules of the FCA.
The Board has considered the
Principles and Provisions of the
AIC Code, which address the
Principles and Provisions set out
in the Code, as well as setting out
additional Provisions on issues
that are of specific relevance to the
Company. The Board considers that
reporting against the Principles and
Provisions of the AIC Code, which
has been endorsed by the FRC,
provides more relevant information
to Shareholders. The endorsement
by the FRC means that by reporting
against the AIC Code, the Company
is meeting its obligations under the
Code and the associated disclosure
requirements of the Listing Rules,
and as such does not need to report
further on issues contained in the
Code which are irrelevant to them.
These include:
•
Provision 9 (dual role of chairman
and chief executive);
•
Provision 19 (tenure of the chair);
•
Provision 25 (internal audit
function); and
•
Provision 33 (executive
remuneration).
The Board is of the opinion that
the Company has complied
fully with the Principles and
Provisions of the AIC Code.
59
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
The Board
As at the date of this Annual Report, the Board consists of two female
and three male Directors. Biographies of the current Directors
are shown on page 44 and indicate their high level and range of
investment, industrial, commercial and professional experience.
Other than Matthew Oakeshott, who is chairman of OLIM Property and a
substantial Shareholder, all other Directors who served during the year
are considered by the Board to be independent of the Investment Manager
and free of any material relationship with the Investment Manager. The
Board sets the Company’s values and objectives and ensures that its
obligations to Shareholders are met. It has formally adopted a schedule of
matters which are required to be brought to it for decision, thus ensuring
that it maintains full and effective control over appropriate strategic,
financial, operational and compliance issues. These matters include:
•
the maintenance of clear investment objectives and risk management
policies;
•
the monitoring of the business activities of the Company including
investment performance and revenue budgets;
•
Companies Act requirements such as the approval of the periodic
financial statements and approval and recommendation of any dividends;
•
major changes relating to the Company’s structure, including any share
buy backs and share issues;
•
succession planning including Board appointments and removals and the
related terms;
•
the appointment and removal of the AIFM, the Investment Manager and
the terms and conditions of the investment management agreement
relating thereto;
•
terms of reference and membership of Board Committees; and
•
London Stock Exchange/ Financial Conduct Authority matters, including
responsibility for approval of all circulars, listing particulars and approval
of all releases concerning matters decided by the Board.
The Board has a procedure in place to deal with a situation where a Director
has a conflict of interest, as required by the Companies Act 2006.
There is an agreed procedure for Directors to take independent professional
advice, if necessary, at the Company’s expense.
The Directors have access to the advice and services of the Company
Secretary, Maven Capital Partners UK LLP, through its appointed
representatives who are responsible to the Board:
•
for ensuring that Board procedures are complied with;
•
under the direction of the Chairman, for ensuring good information flows
within the Board and its Committees; and
•
for advising on corporate governance matters.
An induction meeting will be arranged on the appointment of any new
Director, covering details about the Company, the AIFM, the Investment
Manager, legal responsibilities, and investment trust industry matters.
60
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
STATEMENT OF CORPORATE GOVERNANCE
CONTINUED
Directors are provided, on a regular basis, with key information on the
Company’s policies, regulatory and statutory requirements and internal
controls. Changes affecting Directors’ responsibilities are advised to the
Board as they arise.
John Kay is Chairman of the Company.
Jo Valentine is the Company’s Senior Independent Director.
David Smith is Chair of the Nomination Committee as the other Directors
consider that he has the skills and experience relevant to that role. There is
no Remuneration Committee as the Nomination Committee is responsible
for considering appointments to the Board and reviewing the level of
Directors’ fees.
David Smith also chairs the Audit and Management
Engagement Committee as the other Directors consider that he has the skills
and experience relevant to that role.
The Board meets at least four times each year.
The primary focus of quarterly Board Meetings is a review of investment
performance and related matters including asset allocation, peer group
information and industry issues. Between meetings, the Board maintains
contact with the Investment Manager and has access to senior members of
the management teams and to the company secretarial team.
During the year ended 31 March 2023, the Board held four quarterly Board
Meetings; and five meetings of a Committee of the Board to approve the
release of financial results, approve changes to one of the loan agreements;
and approve the appointment of Lucy Winterburn. In addition, there were
three meetings of the Nomination Committee and two meetings of the Audit
and Management Engagement Committee.
Accordingly, Directors have attended Board and Committee Meetings during
the year ended 31 March 2023
1
as follows:
1 The number of meetings which the Directors were eligible to attend is in brackets.
2 James Ferguson retired from the Board following the conclusion of the 2022 AGM.
3 Lucy Winterburn was appointed as a Director on 1 August 2022.
To enable the Board to function effectively and allow Directors to discharge
their responsibilities, full and timely access is given to all relevant
information. In the case of Board Meetings, this consists of a comprehensive
set of papers, including the Investment Manager’s review and discussion
documents regarding specific matters. The Directors make further enquiries
when necessary.
Board
Board
Committee
Audit and
Management
Engagement
Committee
Nomination
Committee
John Kay
4 (4)
3 (5)
2 (2)
3 (3)
James Ferguson
2
2 (2)
2 (2)
1 (1)
1 (1)
Matthew Oakeshott
4 (4)
5 (5)
N/A
N/A
David Smith
4 (4)
3 (5)
2 (2)
3 (3)
Jo Valentine
4 (4)
3 (5)
2 (2)
3 (3)
Lucy Winterburn
3
2 (2)
1 (2)
1 (1)
1 (1)
61
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
The Nomination Committee has undertaken a formal performance evaluation
of the Chairman, the other Directors and the Board as a whole. The evaluation
of the Chairman is led by the Senior Independent Director, Jo Valentine. The
Board considered having an externally facilitated board evaluation, but after
discussion, agreed that the current process worked well based on the size of
the Board.
Directors’ terms of appointment and policy on tenure
All Directors are appointed for an initial period of three years, subject to re-
election and Companies Act provisions and, in accordance with the Articles,
stand for election at the first AGM following their appointment. The Articles
state that Directors must offer themselves for re-election at least once every
three years. Notwithstanding the Articles, the Board has determined that in
accordance with the AIC Code, all Directors should be subject to annual re-
election.
The Board subscribes to the view expressed in the AIC Code that long-serving
Directors should not be prevented from forming part of an independent
majority. It does not consider that a Director’s tenure necessarily reduces his
ability to act independently and, following a formal performance evaluation,
believes that each Director is independent in character and judgement and
that there are no relationships or circumstances which are likely to affect the
judgement of any Director. The Board’s policy on tenure is that continuity and
experience are considered to add significantly to the strength of the Board
and, as such, no limit on the overall length of service of any of the Company’s
Directors, including the Chairman, has been imposed. The policy on tenure
and the independence of each Director is reviewed on an annual basis, before
the re-election of any Director is recommended, and the Board considers the
need for regular refreshment of the Directors prior to doing so. The Company
has no executive Directors or employees.
62
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
STATEMENT OF CORPORATE GOVERNANCE
CONTINUED
Committees
Each of the Committees has been established with written terms of reference.
The terms of reference of each of the Committees, which are available
on request from the Registered Office of the Company, are reviewed and
reassessed for their adequacy at least annually.
Audit and Management Engagement Committee
Information regarding the composition, responsibilities and activities of the
Audit and Management Engagement Committee is detailed in the Report of
the Audit and Management Engagement Committee on pages 68 to 70.
Nomination Committee
The Nomination Committee comprises all of the independent Directors
and is chaired by David Smith. Matthew Oakeshott is not a member of
the Nomination Committee as he is not considered by the Board to be
independent. As the Board has not established a Remuneration Committee,
the Nomination Committee fulfils the functions of a remuneration committee
in relation to setting the level of Directors’ fees and the remuneration policy.
The Nomination Committee met three times during the year. The Committee
makes recommendations to the Board on the following matters:
•
the evaluation of the performance of the Board and its Committees;
•
reviewing the Board structure, size, composition and age profile
(including the skills, knowledge, experience and diversity (including
gender);
•
succession planning;
•
the identification and nomination of candidates to fill Board vacancies, as
and when they arise, for the approval of the Board;
•
the tenure and re-appointment of any non-executive Director on an
annual basis;
•
proposals for the re-election by Shareholders of any Director on an annual
basis, having due regard to the provisions of the AIC Code, the Director’s
performance and ability to contribute to the Board and long-term success
of the Company;
•
the continuation in office of any Director at any time;
•
the appointment of any Director to another office, such as Chairman of
the Audit and Management Engagement Committee, other than to the
position of Chairman; and
•
reviewing the level of Directors’ fees.
63
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Board diversity policy
The Board recognises the importance of having a range of skilled,
experienced individuals with the right knowledge represented on the Board
(and the Committees of the Board) in order to allow it to fulfil its obligations.
The Board also recognises the benefits and is supportive of the principle
of diversity in its recruitment of new Board members. The Board will not
display any bias for age, gender, education, professional background,
ethnicity, sexual orientation,
disability and socio-economic backgrounds in
considering the appointment of its Directors. In view of its size, the Board
will continue to ensure that all appointments are made on the basis of merit
against the specification prepared for each appointment and the Board does
not, therefore, consider it appropriate to set measurable objectives in relation
to its diversity.
At 31 March 2023, there were three male and two female Directors on the
Board. One of the male Directors is Chairman of the Company; one of
the male Directors is Chair of the Audit and Management Engagement
Committee and Chair of the Nomination Committee; and one of the female
directors is the Company’s Senior Independent Director. None of the
Directors is from a minority ethnic background.
In accordance with the FCA’s Listing Rule 9.8.6R (9)(a), the table below reports
on gender identity or sex and ethnic background within the Board as at 31
March 2023.
Number
of Board
Members
% of the
Board
Number
of senior
positions on
the Board
(CEO, CFO, SID
and Chair)
Number in
Executive
Management
% of
Executive
Management
Men
3
60
1
0
0
Women
2
40
1
0
0
White British
or other White
(including
minority-white
groups)
5
100
2
0
0
Minority ethnic
background
0
0
0
0
0
1.
Following the appointment of Lucy Winterburn to the Board on 1 August 2022, the Company
complies with the FCA’s diversity target that 40% of individuals on the Board are to be women.
2.
Following the appointment of Jo Valentine as Senior Independent Director on 8 July 2022, the
Company complies with the FCA’s diversity target that one of the senior positions on the Board
is to be held by a woman.
3.
The Company does not comply currently with the FCA’s diversity target that requires one
individual on the Board to be from a minority ethnic background. As referred to above, in view
of its size, the Board will continue to ensure that all appointments are made on the basis of
merit against the specification prepared for each appointment and, in doing so, the Board will
seek to meet the FCA’s diversity targets.
64
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
STATEMENT OF CORPORATE GOVERNANCE
CONTINUED
External agencies
The Board has contractually
delegated to external agencies,
certain services: the depositary and
custodial services (which include
the safeguarding of assets); the
registration services; and the day-
to-day accounting and company
secretarial requirements. Each of
these contracts was entered into
after full and proper consideration
by the Board of the quality and
cost of services offered. The Board
receives and considers reports from
the external agencies on a regular
basis. In addition, ad hoc reports
and information are supplied to the
Board as requested.
As the AIFM, VIS has responsibility
for the overall investment
management and risk management
of the assets of the Company. VIS
has contractually delegated its day-
to-day investment management
responsibilities for the property
portfolio to OLIM Property (the
Investment Manager). The delegation
by VIS of its investment management
responsibilities is in accordance
with the delegation requirements
of the AIFMD. The Investment
Manager remains subject to the
supervision and direction of VIS and
is responsible to VIS and ultimately
to the Company in regard to the
management of the investment of the
assets of the Company in accordance
with the Company’s investment
objective and policy. VIS has
established a Risk Committee to keep
under review the effectiveness of the
Company’s internal control and risk
management systems and procedures
and to identify, measure, manage
and monitor the risks identified as
affecting the Company’s business.
Corporate governance
and stewardship
The UK Stewardship Code 2020
sets high stewardship standards for
those investing money on behalf of
UK savers and pensioners, such as
asset owners and asset managers
(and those that support them).
Stewardship is the responsible
allocation, management and
oversight of capital to create
long-term value for clients and
beneficiaries, leading to sustainable
benefits for the economy, the
environment and society.
Socially responsible
investment policy
The Directors and the Investment
Manager are aware of their duty
to act in the best interests of the
Company and acknowledge that there
are risks associated with investment
in properties with tenants who fail to
conduct their business in a socially
responsible manner. Therefore,
the Directors and the Investment
Manager take account of the social,
environmental and ethical factors
that may affect the performance or
value of the Company’s investments.
The Directors and the Investment
Manager believe that a business
run in the long-term interests of
its shareholders should manage its
relationships with its employees,
suppliers and customers and behave
responsibly towards the environment
and society as a whole.
65
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Communication with shareholders
The Company places a great deal of importance on communication with its
Shareholders, all of whom are encouraged to attend and participate in the
AGM, as this is the key forum for communication with Shareholders. The
AGM is an event that all Shareholders are welcome to attend and participate
in. The Notice of Annual General Meeting sets out the business of the AGM
and the Resolutions are explained more fully in the Directors’ Report and
in the Directors’ Remuneration Report. Separate Resolutions are proposed
for each substantive issue and Shareholders have the opportunity to put
questions to the Board and to the Investment Manager. The results of proxy
voting are relayed to Shareholders after the Resolutions have been voted on
by a show of hands. Nominated persons, often the beneficial owners of shares
held for them by nominee companies, may attend shareholder meetings and
are usually invited to contact the registered shareholder, normally a nominee
company, in the first instance in order to be nominated to attend the meeting
and to vote in respect of the shares held for them.
In addition, both the Chairman and Senior Independent Director are available
to meet major shareholders. Shareholders may contact the Directors
by writing to the Chairman at the Registered Office. The address for the
Registered Office can be found on page 130.
The Board aims to post the Annual Report to Shareholders at least twenty
business days before the AGM. Annual and Interim Reports and Financial
Statements are distributed to Shareholders and other parties who have an
interest in the Company’s performance.
Shareholders and potential investors may obtain up-to-date information on
the Company through the Investment Manager and the Company Secretary.
In order to ensure that the Directors develop an understanding of the views
of Shareholders, correspondence between Shareholders and the Investment
Manager or the Chairman is copied to the Board.
The Company’s web pages are hosted on the Manager’s website, and can be
visited at https://www.olimproperty.co.uk/value-and-indexed-property-
income-trust.html from where Annual and Interim Reports, Company
Announcements and other information on the Company can be viewed,
printed or downloaded.
Accountability and audit
The Statement of Directors’ Responsibilities in respect of the Financial
Statements is on page 66 and the Statement of Going Concern and the
Viability Statement are included in the Directors’ Report on pages 45 and 46.
The Independent Auditor’s Report is on pages 71 to 79.
By order of the Board
Maven Capital Partners UK LLP
Company Secretary
26 June 2023
66
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for ensuring
that the Annual Report and Financial
Statements, taken as a whole, is fair, balanced
and understandable and provides the
information necessary for Shareholders to
assess the Group’s position and performance,
business model and strategy.
The Directors are responsible for ensuring
the Annual Report and Financial Statements
are made available on a website. Financial
Statements are published on the Company’s
web pages hosted by the Investment
Manager in accordance with legislation
in the United Kingdom governing the
preparation and dissemination of financial
statements, which may vary from legislation
in other jurisdictions. The maintenance
and integrity of the Company’s web pages
is the responsibility of the Directors. The
Directors’ responsibility also extends
to the ongoing integrity of the Financial
Statements contained therein.
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
set of accounting standards and give a
true and fair view of the assets, liabilities,
financial position and profit or loss of the
Group and Company; and that
•
the Annual Report includes a fair review
of the development and performance of
the business and the financial position of
the Group and Company, together with
a description of the principal risks and
uncertainties that they face.
The Directors confirm that the Annual
Report and Financial Statements
taken as a whole is fair, balanced and
understandable and provides the information
necessary for Shareholders to assess
the Group’s position and performance,
business model and strategy.
For and on behalf of the Board of Value and
Indexed Property Income Trust PLC
John Kay
Chairman
26 June 2023
The Directors are responsible for preparing the
Annual Report and the Financial Statements
in accordance with UK adopted international
accounting standards and applicable laws 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, and
have elected to prepare the Company Financial
Statements, in accordance with UK adopted
international accounting standards. Under
company law, the Directors must not approve
the Financial Statements unless they are
satisfied that they give a true and fair view of
the state of affairs of the Group and Company
and of the profit or loss for the Group and
Company for that period.
In preparing these Financial Statements, the
Directors are required to:
•
select suitable accounting policies and then
apply them consistently;
•
make judgements and accounting estimates
that are reasonable and prudent;
•
state whether they have been prepared in
accordance with international accounting
standards in conformity with the
requirements of the Companies Act 2006,
subject to any material departures disclosed
and explained in the Financial Statements;
•
state whether they have been prepared in
accordance with UK adopted international
accounting standards, subject to any
material departures disclosed and
explained in the Financial Statements;
•
prepare the Financial Statements on
the going concern basis unless it is
inappropriate to presume that the Company
will continue in business; and
•
prepare a Directors’ Report, a Strategic
Report and Directors’ Remuneration Report
which comply with the requirements of the
Companies Act 2006.
The Directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the Company’s
transactions and disclose with reasonable
accuracy at any time the financial position
of the Company and enable them to ensure
that the Financial Statements comply with
the Companies Act 2006. 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.
67
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
REPORT OF THE AUDIT AND MANAGEMENT ENGAGEMENT COMMITTEE
The Audit and Management Engagement Committee is chaired by David
Smith. The Committee comprises all of the independent Directors. Matthew
Oakeshott is not a member of the Committee as he is not considered by the
Directors to be independent. The Board is satisfied that at least one member
of the Committee has recent and relevant financial experience, and that the
Committee as a whole has competence relevant to the sector in which the
Company operates.
Responsibilities
The principal responsibilities of the Committee include:
•
the review of the effectiveness of the internal control environment of the
Company, including the receipt of reports from the Investment Manager
and the Administrator on a regular basis;
•
the integrity of the Interim and Annual Reports and Financial Statements
and reviewing any significant financial reporting judgements contained
therein;
•
the review of the terms of appointment of the Auditor, together with its
remuneration;
•
the review of the scope and results of the audit and the independence and
objectivity of the Auditor;
•
the review of the Auditor’s Board Report and any required response;
•
meetings with representatives of the Investment Manager;
•
the review of the AIFM agreement and investment management
agreement;
•
providing advice on whether the Annual Report and Financial Statements,
taken as a whole, is fair, balanced and understandable and provides the
information necessary for Shareholders to assess the Company’s position
and performance, business model and strategy; and
•
making appropriate recommendations to the Board.
Internal control and risk management
The Directors are ultimately responsible for the Company’s system of internal
controls and risk management and for reviewing its effectiveness. Following
publication by the FRC of “Guidance on Risk Management, Internal Control
and Related Financial and Business Reporting” (the FRC Guidance), the
Directors confirm that there is an ongoing process for identifying, evaluating
and managing the principal and emerging risks faced by the Company.
This process, which has been in place for the year under review and up
to the date of approval of this Annual Report and Financial Statements,
is regularly reviewed by the Board and accords with the FRC Guidance.
68
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
REPORT OF THE AUDIT AND MANAGEMENT ENGAGEMENT COMMITTEE
CONTINUED
The Directors have, in tandem with VIS, reviewed the effectiveness of the
system of internal controls and risk management. In particular, the Directors
have reviewed and updated the process for identifying and evaluating the
principal and emerging risks affecting the Company and the policies by
which these risks are managed. The significant risks faced by the Company
are as follows:
•
Financial;
•
Operational; and
•
Compliance.
The key components designed to provide effective internal controls are
outlined below:
•
Forecasts and management accounts are prepared which allow the
Directors to assess the Company’s activities and review its performance;
the emphasis is on obtaining the relevant degree of assurance and not
merely reporting by exception;
•
OLIM Property regularly reports to VIS and to the Directors on the
investment portfolio;
•
OLIM Property’s Compliance Officer keeps OLIM Property’s operations
under review;
•
VIS regularly reports to the Directors on compliance with the AIFMD;
•
written agreements are in place which specifically define the roles and
responsibilities of VIS, OLIM Property and other third party service
providers; and
•
at its meeting in May 2023, the Audit and Management Engagement
Committee carried out its annual assessment of internal controls and
risk management for the year ended 31 March 2023 by considering
documentation from OLIM Property and Maven Capital Partners UK LLP
and by taking account of events since 31 March 2023.
Internal control systems are designed to meet the Company’s particular
needs and the risks to which it is exposed. Accordingly, the internal control
systems are designed to manage rather than eliminate the risk of failure to
achieve business objectives and by their nature can only provide reasonable
and not absolute assurance against misstatement and loss.
Assessment of key risks
The Company’s policy is to invest in directly held UK commercial property
and cash or near cash securities.
As the property portfolio is a significant element of the Financial Statements,
the recognition and valuation of the property portfolio is, therefore, a key risk
that requires the particular attention of the Committee.
Specifically, the risk is that investments are not recognised and measured
in line with the Company’s stated accounting policy on the valuation of the
property portfolio. Similarly, as rental income is a major source of revenue for
the Company and a significant element of the Statement of Comprehensive
Income, the recognition of rental income is a further risk that requires the
particular attention of the Committee.
69
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Valuation, existence and ownership of the investment
portfolio - How the risk was addressed
The Company uses the services of an independent depositary and custodian,
BNP Paribas Trust Corporation UK Limited for the safe keeping of the
Company’s assets. The title deeds for the property portfolio are held by the
Company’s lawyers to the order of the Company. An annual internal control
report is received from the Depositary and Custodian which provides details
of the Depositary and Custodian’s control environment.
The reconciliation of the records held by the Depositary and Custodian
(and by the Company’s lawyers in the case of the title deeds) to the records
maintained by the Company’s administrator is reviewed and tested by the
Independent Auditor. The property portfolio is reviewed by OLIM Property
regularly. Management accounts are prepared quarterly and considered at
the quarterly meetings of the Board.
The valuation of the property portfolio is undertaken in accordance with the
Company’s stated accounting policy as set out in Note 1(k) to the Financial
Statements on page 91.
The Committee reviews and challenges the valuation of the investment
properties. This includes review of the valuation report prepared by
independent professional valuers. In addition, the Committee reviews the
Financial Statements disclosures in line with the reporting framework.
The Committee satisfied itself that there were no issues associated with the
existence and ownership of the Company’s investments which required to be
addressed.
Rental and dividend income recognition - How the risk
was addressed
The recognition of rental and dividend income is undertaken in accordance
with accounting policy Note 1(e) to the Financial Statements on page 90.
The management accounts are reviewed by the Board on a quarterly basis
and discussion takes place with the Investment Manager at the quarterly
Board Meetings regarding the revenue generated from rental and dividend
income. The Directors are satisfied that the levels of income recognised are
in line with revenue estimates. The Committee concluded that there were no
further issues associated with rental and dividend income recognition which
required to be addressed.
Review of investment manager and risk reporting
The Committee met twice during the year under review, once in May and
once in November 2022. At the meetings in May and November 2022, the
Committee considered the key risks detailed above and the corresponding
control and risk reports provided by the Investment Manager and the
Company Secretary. No significant weaknesses in the control environment
were identified and it was also noted that there had not been any adverse
comment from the Auditor and that the Auditor had not identified any
significant issues in its audit report. The Committee, therefore, concluded that
there were no significant issues which required to be reported to the Board.
Also, at its meeting in May 2022, the Committee reviewed, for
recommendation to the Board, the Audit Report from the Independent
Auditor and the draft Annual Report and Financial Statements for the year
ended 31 March 2022, along with the amount of the final dividend for the year
then ended. At its meeting in November 2022, the Committee reviewed the
Half-Yearly Report for the period to 30 September 2022 and also considered
the performance of BDO LLP as Auditor, and its independence and tenure.
70
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Subsequent to 31 March 2023, the Committee considered the draft Annual
Report and Financial Statements for the year ended 31 March 2023, and
provided advice to the Board that it considered that the Annual Report and
Financial Statements, taken as a whole, is fair, balanced and understandable
and provided the information necessary for Shareholders to assess the
Company’s position and performance, business model and strategy. The
Committee also reviewed the performance of the Investment Manager
and the terms and conditions of its appointment and concluded that the
performance of the Investment Manager was satisfactory and that the
continued appointment of the Investment Manager was in the best interests
of Shareholders as a whole.
Review of effectiveness of external auditor
As part of its annual review of audit services, the Committee reviews the
performance, cost effectiveness and general relationship with the external
Auditor (Auditor or BDO LLP).
In addition, the Committee reviews the independence and objectivity of the
Auditor. Key elements of these reviews include separate meetings with the
Auditor and consideration of the completeness and accuracy of BDO LLP’s
reporting.
The Auditor’s Report is on pages 71 to 79. Vanessa-Jayne Bradley of BDO LLP
is the Senior Statutory Auditor responsible for the audit and BDO LLP will
rotate the Senior Statutory Auditor every five years. Vanessa-Jayne Bradley
was appointed as Senior Statutory Auditor for the Company during the year
to 31 March 2020 and will be rotated for the audit for the year to 31 March
2025. Details of the amounts paid to the Auditor for audit services are set out
in Note 4 to the Financial Statements.
Shareholders are asked to approve the reappointment, and the Directors’
responsibility for the remuneration, of the Auditor at each AGM. No non-audit
services were provided to the Company by BDO LLP during the year under
review. There are currently no contractual obligations which restrict the
Committee’s choice of Auditor.
The Committee is mindful of the requirement to conduct an audit tender
at least every 10 years and to rotate the statutory auditor after a maximum
period of twenty years. The Committee will continue to keep the matter of
tenure of the Auditor under review.
The Board has concluded that BDO LLP is independent of the Company and
that a Resolution for the re-appointment of BDO LLP as Auditor should be put
to the 2023 AGM.
David Smith
Director
26 June 2023
REPORT OF THE AUDIT AND MANAGEMENT ENGAGEMENT COMMITTEE
CONTINUED
71
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
INDEPENDENT AUDITOR’S REPORT
Independent auditor’s report to the members of Value
and Indexed Property Income Trust PLC
Opinion on the Financial Statements
Basis for opinion
We conducted our audit in
accordance with International
Standards on Auditing (UK)
(ISAs (UK)) and applicable law.
Our responsibilities under those
standards are further described
in the Auditor’s responsibilities
for the audit of the Financial
Statements section of our report.
We believe that the audit evidence
we have obtained is sufficient and
appropriate to provide a basis for
our opinion. Our audit opinion
is consistent with the additional
report to the Audit and Management
Engagement Committee.
Independence
Following the recommendation
of the Audit and Management
Engagement Committee, we were
appointed by the Board of Directors
on 3 September 2020 to audit the
Financial Statements for the year
ended 31 March 2020 and subsequent
financial periods. The period of total
uninterrupted engagement including
retenders and reappointments is 4
years, covering the years ended 31
March 2020 to 31 March 2023. We
remain independent of the Group and
the Parent Company in accordance
with the ethical requirements that
are relevant to our audit of the
Financial Statements in the UK,
including the FRC’s Ethical Standard
as applied to listed public interest
entities, and we have fulfilled our
other ethical responsibilities in
accordance with these requirements.
The non-audit services prohibited by
that standard were not provided to
the Group or the Parent Company.
In our opinion the
Financial Statements:
•
give a true and fair view of the
state of the Group’s and of the
Parent Company’s affairs as at 31
March 2023 and of the Group and
of the Parent Company’s loss for
the year then ended;
•
have been properly prepared
in accordance with UK adopted
international accounting
standards; and
•
have been prepared in accordance
with the requirements of the
Companies Act 2006.
We have audited the Financial
Statements of Value and Indexed
(the ‘Parent Company’) and its
subsidiaries (the ‘Group’) for the
year ended 31 March 2023, which
comprise the Group Statement
of Comprehensive Income,
the Company Statement of
Comprehensive Income, the Group
Statement of Financial Position, the
Company Statement of Financial
Position, the Group Statement of
Cashflows, the Company Statement
of Cashflows, the Statement of
Changes in Equity and the Notes to
the Financial Statements, including
a summary of significant accounting
policies. The financial reporting
framework that has been applied
in their preparation is applicable
law and UK adopted international
accounting standards.
72
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
INDEPENDENT AUDITOR’S REPORT
CONTINUED
Conclusions relating to going concern
In auditing the Financial Statements, we have concluded that the Directors’
use of the going concern basis of accounting in the preparation of the
Financial Statements is appropriate. Our evaluation of the Directors’
assessment of the Group and the Parent Company’s ability to continue to
adopt the going concern basis of accounting included:
•
Evaluating the appropriateness of the Directors’ method of assessing
going concern in light of property market volatility and the present
uncertainties in economic recovery by reviewing the information used by
the Directors in completing their assessment;
•
Assessing the appropriateness of the Directors’ assumptions and
judgements made in their forecasts by comparing forecasts to current
year audited amounts and considering the available cash resources
relative to forecast expenditure and commitments;
•
Obtaining the loan agreements to identify the covenants and assessing
the likelihood of them being breached based on the Directors’ forecasts
and our sensitivity analysis; and
•
Challenging the Directors’ assumptions and judgements made with
regards to forecasts which included consideration of the covenant
headroom.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Group and Parent Company’s
ability to continue as a going concern for a period of at least twelve months
from when the Financial Statements are authorised for issue.
In relation to the Parent Company’s reporting on how it has applied the
UK Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the Directors’ statement in the Financial
Statements about whether the Directors considered it appropriate to adopt
the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to
going concern are described in the relevant sections of this report.
73
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Overview
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group
and its environment, including the Group’s system of internal control, and
assessing the risks of material misstatement in the Financial Statements.
We also addressed the risk of management override of internal controls,
including assessing whether there was evidence of bias by the Directors that
may have represented a risk of material misstatement.
We tailored our audit to ensure we have performed sufficient work to be
able to give an opinion on the Group Financial Statements as a whole taking
into account the structure of the Group and its accounting processes and
controls. The Group is based in the United Kingdom and has one main trading
entity, the Parent Company, Value and Indexed Property Income Trust PLC,
whose principal activity is that of an Investment Trust. The Group has one
subsidiary, Value and Indexed Property Income Services Limited whose
principal activity is to act as alternative investment fund manager (AIFM) to
The Group audit engagement team carried out full scope audits for the Parent
Company and Value and Indexed Property Income Services Limited which
was not considered to be a significant component of the Group. Although not
necessary for Group purposes, Value and Indexed Property Income Services
is audited as it is an FCA Regulated entity.
Key audit matters
2023
2022
Materiality
Coverage
Valuation of
investment property
Group Financial
Statements as a whole
100% (2022: 100%) of
Group revenue
Recognition of
rental income
£1.5m (2022: £1.8m)
based on 1%
(2022: 1%) of total
investment value
100% (2022: 100%) of
Group total assets
74
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the Financial Statements of the current period and include the
most significant assessed risks of material misstatement (whether or not due to fraud) that
we identified, including those which had the greatest effect on: the overall audit strategy, the
allocation of resources in the audit, and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the Financial Statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
How the scope of our audit addressed the key audit matter
Valuation of investment property
(Note 1 and Note 9)
The Group has opted to carry its
investment properties at fair value
rather than cost as permitted
by the accounting standards.
The Group engaged independent
external experts to value these
properties at the end of the
reporting period.
The valuation
uses a cash flow methodology
with key inputs including detailed
data on the underlying assets
and the market environment for
each asset. The valuation models
applied are complex and require
consideration of the existing market
conditions including yields and
estimates regarding current and
future rental income, occupancy
and property management costs.
The Investment Manager’s fee
is based on the value of the
Investment properties managed
by the Investment Manager. The
Investment Manager is responsible
for reviewing these valuations
which are approved by the Board.
Notwithstanding this review and
approval, there is a potential risk
of misstatement in the investment
properties valuations. Investment
Properties are Level 3 investments
and a highly subjective area.
Due to the level of complexity
and assumptions involved
in this area we determined it
to be a key audit matter.
We responded to this matter by testing the valuation of
the portfolio of investment property. We performed the
following procedures:
•
Held discussions with the independent external valuer
engaged by the Group, to understand the assumptions
and methodologies used in valuing these properties,
the market evidence supporting the valuation
assumptions and the valuation movements in the
period.
•
Assessed the competency, independence and
objectivity of the independent external valuer which
included making inquiries regarding interests and
relationships that may have created a threat to the
valuer’s objectivity.
•
Agreed key observable valuation inputs supplied to and
used by the independent external valuer to supporting
documentation. For all the properties we agreed that
the passing rental income and lease terms agrees to the
underlying lease agreements.
•
With the use of our internal real estate experts, we
evaluated and challenged the valuation assumptions,
methodologies and the inputs used. This included
establishing our own range of expectations for the
valuation of investment property based on externally
available metrics and wider economic and commercial
factors. We assessed the valuation of all investment
properties against our own expectations and
challenged those valuations which fell outside of our
range of expectation with the use of our internal real
estate experts and obtaining corroborating evidence
from the external valuer.
Key observations
Based on the procedures performed we found the
investment valuations to be within a reasonable range and
the assumptions used in the valuations to be appropriate.
INDEPENDENT AUDITOR’S REPORT
CONTINUED
75
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Key audit matter
How the scope of our audit addressed the key audit matter
Recognition of rental income
(Note 1 and Note 2)
Rental agreements have fixed
rental increases and RPI increases
subject to caps and collars. The
accounting policy states that
rental income is recognised over
a straight-line basis which means
that any future anticipated rental
income is spread evenly over the
term of the lease, giving rise to
a rent smoothing adjustment.
The calculation for the rent
smoothing adjustment can be
complex due to the number of
leases, different start and end dates
and increase conditions, and we
therefore considered this to be a key
audit matter.
We responded to this matter by testing the existence,
accuracy and completeness of rental income. We
performed the following procedures:
•
Obtained Management’s reconciliation of expected
revenue based on the tenancy schedules to revenue
recognised in the Financial Statements and performed
the following:
•
Agreed the rent income received per the tenancy
schedules to the underlying lease agreements
and other documentation such as rent review
memoranda.
•
Checked the integrity of the formulae used to
calculate the expected revenue based on the tenancy
schedule.
•
Agreed a sample of reconciling adjustments between
the expected revenue and the amount recorded in the
Financial Statements to supporting documentation.
•
Checked that the tenancy schedule covers all the
Investment Property which has been valued at the
year-end.
•
Checked that the rent smoothing adjustment has
been posted correctly in the Financial Statements.
Key observations
Based on the procedures performed we consider the
recognition of rental income to be appropriate.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in
evaluating the effect of misstatements.
We consider materiality to be the magnitude by which
misstatements, including omissions, could influence the economic decisions of reasonable users
that are taken on the basis of the Financial Statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed
materiality, we use a lower materiality level, performance materiality, to determine the extent
of testing needed. Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of identified misstatements, and
the particular circumstances of their occurrence, when evaluating their effect on the Financial
Statements as a whole.
76
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Based on our professional judgement, we determined materiality for the
Financial Statements as a whole and performance materiality as follows:
Specific materiality
We also determined that for Revenue
return before tax, a misstatement
of less than materiality for the
Financial Statements as a whole,
specific materiality, could influence
the economic decisions of users
as it is a measure of the Group’s
performance of income generated
from its investments after expenses.
As a result, we determined materiality
for these items to be £476,000 (2022:
219,000), based on 9.20% of Revenue
return before tax (2022: 10% of
Revenue return before tax). We further
applied a performance materiality
level of 65% (2022:65%) of specific
materiality to ensure that the risk of
errors exceeding specific materiality
was appropriately mitigated.
Component materiality
Materiality for the parent company,
which was the only significant
component, is set out in the table
above.
Reporting threshold
We agreed with the Audit and
Management Engagement Committee
that we would report to them all
individual audit differences in excess
of £24,000 (2022: £11,000).
We also
agreed to report differences below this
threshold that, in our view, warranted
reporting on qualitative grounds.
Group
financial statements
Parent company
financial statements
2023
£’000
2022
£’000
2023
£’000
2022
£’000
Materiality
1,505
1,829
1,500
1,827
Basis for
determining materiality
1% of total investment
value (2022: 1% of total
investment value)
99.67% of Group
materiality (2022: 99.89%
of Group materiality)
Rationale for the
benchmark applied
As an Investment Trust,
the value of investments
is the key measure of
performance.
Percentage of Group
materiality for Group
reporting purposes
given the assessment
of aggregation risk
Performance materiality
980
1,190
980
1,188
Basis for determining
performance materiality
65% of materiality (2022: 65% of materiality) based
on the historical and anticipated level of errors and
management’s attitude to proposed adjustments.
Other information
The Directors are responsible
for the other information. The
other information comprises
the information included in the
Annual Report and Accounts other
than the Financial Statements
and our Auditor’s Report thereon.
Our opinion on the Financial
Statements does not cover the other
information and, except to the
extent otherwise explicitly stated
in our report, we do not express
any form of assurance conclusion
thereon. Our responsibility is to
read the other information and,
in doing so, consider whether the
other information is materially
inconsistent with the Financial
Statements, or our knowledge
obtained in the course of the audit,
or otherwise appears to be materially
misstated. If we identify such
material inconsistencies or apparent
material misstatements, we are
required to determine whether this
gives rise to a material misstatement
in the Financial Statements
themselves. If, based on the work we
have performed, we conclude that
there is a material misstatement
of this other information, we are
required to report that fact.
We have nothing to report in this
regard.
INDEPENDENT AUDITOR’S REPORT
CONTINUED
77
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Corporate governance statement
The Listing Rules require us to review the Directors’ statement in relation to going concern,
longer-term viability and that part of the Corporate Governance Statement relating to the Parent
Company’s compliance with the provisions of the UK Corporate Governance Code specified for
our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following
elements of the Corporate Governance Statement is materially consistent with the Financial
Statements, or our knowledge obtained during the audit.
Going concern and longer-term viability
Other code provisions
•
The Directors’ statement with regards
to the appropriateness of adopting the
going concern basis of accounting and
any material uncertainties identified;
and
•
The Directors’ explanation as to their
assessment of the Group’s prospects,
the period this assessment covers and
why the period is appropriate.
•
Directors’ statement on fair, balanced and understandable;
•
Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks;
•
The section of the annual report that describes the review
of effectiveness of risk management and internal control
systems; and
•
The section describing the work of the Audit and
Management Engagement Committee.
Other companies act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the
audit, we are required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and
matters as described below.
Strategic Report and Directors’ Report
In our opinion, based on the work undertaken
in the course of the audit:
•
the information given in the Strategic
Report and the Directors’ Report for the
financial year for which the Financial
Statements are prepared is consistent with
the Financial Statements; and
•
the Strategic report and the Directors’
Report have been prepared in accordance
with applicable legal requirements.
In the light of the knowledge and
understanding of the Group and Parent
Company and its environment obtained in
the course of the audit, we have not identified
material misstatements in the strategic report
or the Directors’ Report.
Directors’ remuneration
In our opinion, the part of the Directors’
Remuneration Report to be audited has been
properly prepared in accordance with the
Companies Act 2006.
Matters on which we are required to report
by exception
We have nothing to report in respect of the
following matters in relation to which the
Companies Act 2006 requires us to report to
you if, in our opinion:
•
adequate accounting records have
not been kept, or returns adequate for
our audit have not been received from
branches not visited by us; or
•
the Financial Statements and the part of
the Directors’ Remuneration Report to
be audited are not in agreement with the
accounting records and returns; or
•
certain disclosures of Directors’
remuneration specified by law are not
made; or
•
we have not received all the information
and explanations we require for our audit.
78
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Responsibilities of Directors
As explained more fully in the Statement of Directors’ Responsibilities,
the Directors are responsible for the preparation of the Financial
Statements and for being satisfied that they give a true and fair
view, and for such internal control as the Directors determine is
necessary to enable the preparation of Financial Statements that are
free from material misstatement, whether due to fraud or error.
In preparing the Financial Statements, the Directors are responsible
for assessing the Group and Parent Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or the Parent Company
or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the
Financial Statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance but is not a
guarantee that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of
users taken on the basis of these Financial Statements.
Extent to which the audit was capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance with laws
and regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
Non-compliance with laws and regulations
Based on:
•
Our understanding of the Group and the industry in which it operates;
•
Discussion with management and those charged with governance;
we considered the significant laws and regulations to be Companies Act 2006,
the FCA listing and DTR rules, the principles of the AIC Code of Corporate
Governance, industry practice represented by the AIC SORP, the applicable
accounting framework, and qualification as an Investment Trust under
UK tax legislation as any non-compliance of this would lead to the Parent
Company losing various deductions and exemptions from corporation tax.
Our procedures in respect of the above included:
•
Agreement of the Financial Statement disclosures to underlying
supporting documentation;
•
Enquiries of management and those charged with governance relating to
the existence of any non-compliance with laws and regulations;
•
Reviewing minutes of meeting of those charged with governance
throughout the period for instances of non-compliance with laws and
regulations; and
•
Reviewing the calculation in relation to Investment Trust compliance to
check that the Parent Company was meeting its requirements to retain
their Investment Trust Status.
INDEPENDENT AUDITOR’S REPORT
CONTINUED
79
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Fraud
We assessed the susceptibility of
the financial statement to material
misstatement including fraud.
Our risk assessment procedures
included:
•
Enquiry with management and
those charged with governance
regarding any known or
suspected instances of fraud;
•
Review of minutes of meeting of
those charged with governance
for any known or suspected
instances of fraud;
•
Discussion amongst the
engagement team as to how and
where fraud might occur in the
Financial Statements.
Based on our risk assessment,
we considered the areas most
susceptible to be valuation of
investment property, revenue
recognition and management
override of controls.
Our procedures in respect of the
above included:
•
The procedures set out in the Key
Audit Matters section above;
•
Recalculating investment
management fees in total;
•
Obtaining independent
confirmation of bank balances;
and
•
Testing journals which
met a defined risk criteria
by agreeing to supporting
documentation and evaluating
whether there was evidence
of bias by the Investment
Manager and Directors that
represented a risk of material
misstatement due to fraud.
We also communicated relevant
identified laws and regulations
and potential fraud risks to all
engagement team members who
were all deemed to have appropriate
competence and capabilities and
remained alert to any indications of
fraud or non-compliance with laws
and regulations throughout the audit.
Our audit procedures were
designed to respond to risks of
material misstatement in the
Financial Statements, recognising
that the risk of not detecting a
material misstatement due to
fraud is higher than the risk of not
detecting one resulting from error,
as fraud may involve deliberate
concealment by, for example, forgery,
misrepresentations or through
collusion. There are inherent
limitations in the audit procedures
performed and the further removed
non-compliance with laws and
regulations is from the events
and transactions reflected in the
Financial Statements, the less likely
we are to become aware of it.
A further description of our
responsibilities is available on
the Financial Reporting Council’s
website at: www.frc.org.uk/
auditorsresponsibilities. This
description forms part of our
auditor’s report.
Use of our report
This report is made solely to the
Parent Company’s members, as a
body, in accordance with Chapter
3 of Part 16 of the Companies Act
2006.
Our audit work has been
undertaken so that we might state
to the Parent Company’s members
those matters we are required
to state to them in an auditor’s
report and for no other purpose.
To the fullest extent permitted by
law, we do not accept or assume
responsibility to anyone other than
the Parent Company and the Parent
Company’s members as a body, for
our audit work, for this report, or
for the opinions we have formed.
Vanessa-Jayne Bradley
Senior Statutory Auditor
For and on behalf of BDO LLP,
Statutory Auditor
London, UK
26 June 2023
BDO LLP is a limited liability
partnership registered in England
and Wales (with registered number
OC305127).
80
Milton Keynes
Financial
Statements
81
82
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
GROUP STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 March 2023
Year ended 31 March 2022
Note
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Income
Rental income
2
Investment income
2
Other income
2
Gains and losses
on investments
Realised gains on held-at-
fair-value investments and
investment properties
9
Unrealised (losses)/ gains
on held-at-fair-value
investments and
investment properties
9
(24,695 )
(24,695 )
Total income
(23,249 )
(14,409 )
Expenses
Investment management fees
3
(990 )
(990 )
(1,088 )
(2 )
(1,090 )
Other operating expenses
4
(895 )
(895 )
(870 )
(870 )
Finance costs
5
(1,779 )
(6,269 )
(8,048 )
(3,177 )
(3,177 )
Total expenses
(3,664 )
(6,269 )
(9,933 )
(5,135 )
(2 )
(5,137 )
Profit/(loss) before taxation
(29,518 )
(24,342 )
Taxation
6
(979 )
(321 )
Profit/(loss) attributable to
equity shareholders of
parent company
(28,093 )
(23,896 )
Earnings per Ordinary
Share (pence)
7
(64.92 )
(55.22 )
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.
The Group does not have any other comprehensive income and so the total profit/(loss),
as disclosed above, is the same as the Group’s total comprehensive income. All income is
attributable to the equity holders of Value and Indexed Property Income Trust PLC, the parent
company. There are no minority interests.
The Board is proposing a final dividend of 3.6 p per share, making a total dividend of 12.9 p
per share for the year ended 31 March 2023 (2022: 12.6 p per share) which, if approved by
Shareholders, will be payable on 4 August 2023 (see Note 8).
The Notes on pages 89 to 113 form part of these Financial Statements.
83
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
COMPANY STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 March 2023
Year ended 31 March 2022
Note
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Income
Rental income
2
8,358
–
8,358
5,647
–
5,647
Investment income
2
168
–
168
1,682
–
1,682
Other income
2
314
–
314
–
–
–
8,840
–
8,840
7,329
–
7,329
Gains and losses
on investments
Realised gains on held-at-
fair-value investments and
investment properties
9
–
1,446
1,446
–
10,440
10,440
Unrealised (losses)/ gains
on held-at-fair-value
investments and
investment properties
9
–
(24,695)
(24,695)
–
8,797
8,797
Total income
8,840
(23,249)
(14,409)
7,329
19,237
26,566
Expenses
Investment management fees
3
(990)
–
(990)
(1,088)
(2)
(1,090)
Other operating expenses
4
(895)
–
(895)
(870)
–
(870)
Finance costs
5
(1,779)
(6,269)
(8,048)
(3,177)
–
(3,177)
Total expenses
(3,664)
(6,269)
(9,933)
(5,135)
(2)
(5,137)
Profit/(loss) before taxation
5,176
(29,518)
(24,342)
2,194
19,235
21,429
Taxation
6
(979)
1,425
446
(321)
3,154
2,833
Profit/(loss) attributable to
equity shareholders of
parent company
4,197
(28,093)
(23,896)
1,873
22,389
24,262
Earnings per Ordinary
Share (pence)
7
9.70
(64.92)
(55.22)
4.30
51.40
55.70
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.
The Company does not have any other comprehensive income and so the total profit/(loss), as
disclosed above, is the same as the Company’s total comprehensive income.
The Notes on pages 89 to 113 form part of these Financial Statements.
84
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
GROUP STATEMENT OF FINANCIAL POSITION
As at
31 March 2023
As at
31 March 2022
Note
£’000
£’000
£’000
£’000
Assets
Non current assets
Investment properties
9
Investments held at fair value through profit or loss
9
Deferred tax asset
6
Receivables
10
Current assets
Cash and cash equivalents
Receivables
10
Total assets
Current liabilities
Payables
11
(2,376 )
(2,423 )
(2,376 )
(2,423 )
Total assets less current liabilities
Non-current liabilities
Payables
12
(2,845 )
(2,854 )
Borrowings
12
(49,000 )
(56,723 )
(51,845 )
(59,577 )
Net assets
Equity attributable to equity shareholders
Called up share capital
14
Share premium
15
Retained earnings
16
Total equity
Net asset value per Ordinary Share (pence)
17
These Financial Statements were approved by the Board on 26 June 2023 and were signed on its
behalf by:
John Kay
Chairman
The Notes on pages 89 to 113 form part of these Financial Statements.
85
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
COMPANY STATEMENT OF FINANCIAL POSITION
As at
31 March 2023
As at
31 March 2022
Note
£’000
£’000
£’000
£’000
Assets
Non current assets
Investment properties
9
150,636
155,838
Investments held at fair value through profit or loss
9
200
27,071
150,836
182,909
Deferred tax asset
6
4,537
4,091
Receivables
10
2,366
2,238
157,739
189,238
Current assets
Cash and cash equivalents
2,073
4,953
Receivables
10
599
4,709
2,672
9,662
Total assets
160,411
198,900
Current liabilities
Payables
11
(2,376)
(2,423)
(2,376)
(2,423)
Total assets less current liabilities
158,035
196,477
Non-current liabilities
Payables
12
(2,845)
(2,854)
Borrowings
12
(49,000)
(56,723)
(51,845)
(59,577)
Net assets
106,190
136,900
Equity attributable to equity shareholders
Called up share capital
14
4,555
4,555
Share premium
15
18,446
18,446
Retained earnings
16
83,189
113,899
Total equity
106,190
136,900
Net asset value per Ordinary Share (pence)
17
246.88
314.30
These Financial Statements were approved by the Board on 26 June 2023 and were signed on its
behalf by:
John Kay
Chairman
The Notes on pages 89 to 113 form part of these Financial Statements.
86
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
GROUP STATEMENT OF CASHFLOWS
Year ended
31 March 2023
Year ended
31 March 2022
Note
£’000
£’000
£’000
£’000
Cash flows from operating activities
Rental income received
Dividend income received
Interest and other income received/(paid)
(1 )
Operating expenses paid
(1,974 )
(1,914 )
Taxation paid
(29 )
Net cash inflow from operating activities
18
Cash flows from investing activities
Purchase of investments held at fair
value through profit or loss
(7,215 )
(30,132 )
Purchase of investment properties
(25,353 )
(63,412 )
Sale of investments held at fair value
through profit or loss
Sale of investment properties
Net cash inflow/(outflow) from investing activities
(58,057 )
Cash flow from financing activities
Repayment of debenture stock
(26,380 )
Drawdown of loan
Fees paid on new loan
(176 )
Interest paid on loans
(2,815 )
(3,113 )
Finance cost of leases
(78 )
(78 )
Payments of lease liabilities
(9 )
(9 )
Dividends paid
8
(5,507 )
(5,445 )
Buyback of Ordinary Shares for Treasury
14
(1,307 )
Net cash outflow from financing activities
(23,272 )
(8,645 )
Net decrease in cash and cash equivalents
(2,880 )
(60,812 )
Cash and cash equivalents at 1 April
Cash and cash equivalents at 31 March
The Notes on pages 89 to 113 form part of these Financial Statements.
87
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
COMPANY STATEMENT OF CASHFLOWS
Year ended
31 March 2023
Year ended
31 March 2022
Note
£’000
£’000
£’000
£’000
Cash flows from operating activities
Rental income received
8,936
5,970
Dividend income received
266
1,835
Interest and other income received/(paid)
295
(1)
Operating expenses paid
(1,974)
(1,914)
Taxation paid
(29)
–
Net cash inflow from operating activities
18
7,494
5,890
Cash flows from investing activities
Purchase of investments held at fair
value through profit or loss
(7,215)
(30,132)
Purchase of investment properties
(25,353)
(63,412)
Sale of investments held at fair value
through profit or loss
35,720
32,042
Sale of investment properties
9,746
3,445
Net cash inflow/(outflow) from investing activities
12,898
(58,057)
Cash flow from financing activities
Repayment of debenture stock
(26,380)
–
Drawdown of loan
13,000
–
Fees paid on new loan
(176)
–
Interest paid on loans
(2,815)
(3,113)
Finance cost of leases
(78)
(78)
Payments of lease liabilities
(9)
(9)
Dividends paid
8
(5,507)
(5,445)
Buyback of Ordinary Shares for Treasury
14
(1,307)
–
Net cash outflow from financing activities
(23,372)
(8,645)
Net decrease in cash and cash equivalents
(2,880)
(60,812)
Cash and cash equivalents at 1 April
4,953
65,765
Cash and cash equivalents at 31 March
2,073
4,953
The Notes on pages 89 to 113 form part of these Financial Statements.
88
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
STATEMENT OF CHANGES IN EQUITY
Year ended 31 March 2023
Note
Share
capital
£’000
Share
premium
£’000
Retained
earnings
£’000
Total
£’000
Group
Net assets at 31 March 2022
Loss for the year
(23,896 )
(23,896 )
Dividends paid
8
(5,507 )
(5,507 )
Buyback of Ordinary Shares for Treasury
14
(1,307 )
(1,307 )
Net assets at 31 March 2023
Company
Net assets at 31 March 2022
4,555
18,446
113,899
136,900
Loss for the year
–
–
(23,896)
(23,896)
Dividends paid
8
–
–
(5,507)
(5,507)
Buyback of Ordinary Shares for Treasury
14
–
–
(1,307)
(1,307)
Net assets at 31 March 2023
4,555
18,446
83,189
106,190
The Notes on pages 89 to 113 form part of these Financial Statements.
Year ended 31 March 2022
Note
Share
capital
£’000
Share
premium
£’000
Retained
earnings
£’000
Total
£’000
Group
Net assets at 31 March 2021
Profit for the year
Dividends paid
8
(5,445 )
(5,445 )
Net assets at 31 March 2022
Company
Net assets at 31 March 2021
4,555
18,446
95,082
118,083
Profit for the year
–
–
24,262
24,262
Dividends paid
8
–
–
(5,445)
(5,445)
Net assets at 31 March 2022
4,555
18,446
113,899
136,900
89
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
NOTES TO THE FINANCIAL STATEMENTS
The Financial Statements have been prepared
in accordance with UK adopted international
accounting standards.
of the Group and Company is pounds
sterling because that is the currency of the
primary economic environment in which
the Group and Company operate. The
Financial Statements and the accompanying
Notes are presented in pounds sterling and
rounded to the nearest thousand pounds
The Financial Statements have been prepared
on a going concern basis as disclosed on page
89 and on the historical cost basis, except
for the revaluation of equities, investment
properties and investment in subsidiaries,
all of which are valued at fair value through
profit and loss. 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 July 2022 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, except for the allocation of finance
costs to revenue as explained in Note 1(f).
The Board has considered the requirements
of IFRS 8, ‘Operating Segments’. The Board is
charged with setting the Group’s investment
strategy. The Board has delegated the day to
day implementation of this strategy to the
Investment Manager but the Board retains
responsibility to ensure that adequate
resources of the Group are directed in
accordance with its decisions. The Board is of
the view that the Group is engaged in a single
segment of business, being investments in
UK commercial properties. The view that
the Group is engaged in a single segment of
business is based on the fact that one of the
key financial indicators received and reviewed
by the Board is the total return from the
investment portfolio taken as a whole. A review
of the investment portfolio is included in the
report from the Investment Manager on pages
The Group’s business activities, together
with the factors likely to affect its future
development and performance, are set out
in the Strategic Report on pages 8 to 41. The
financial position of the Group as at 31 March
2023 is shown in the Statement of Financial
Position on page 84. The cash flows of the
Group for the year ended 31 March 2023 are
set out on page 86. The Group had fixed debt
totalling £49,000,000 as at 31 March 2023,
as set out in Notes 11 and 12 on pages 101 and
102; none of the borrowings is repayable
before March 2026. Note 21 on pages 106 to
111 sets out the Group’s risk management
policies and procedures, including those
covering market price risk, liquidity risk and
credit risk. As at 31 March 2023, the Group’s
total assets less current liabilities exceeded
its total non current liabilities by a factor of
over three. The assets of the Group consist
mainly of investment properties that are held
in accordance with the Group’s investment
policy, as set out on page 34. The Directors,
who have reviewed carefully the Group’s
forecasts for the coming year and having
taken into account the liquidity of the Group’s
investment portfolio and the Group’s financial
position in respect of cash flows, borrowing
facilities and investment commitments (of
which there is none of significance), are not
aware of any material uncertainties that may
cast significant doubt upon the Group’s ability
to continue as a going concern. Accordingly,
the Directors believe that it is appropriate
to continue to adopt the going concern basis
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
The consolidated Financial Statements
incorporate the Financial Statements of the
Company and the entity controlled by the
Company (its subsidiary). An investor controls
an investee when it is exposed, or has rights,
to variable returns from its involvement with
the investee and has ability to affect those
returns through its power over the investee.
The Company consolidates the investee that
it controls. All intra-group transactions,
balances, income and expenses are eliminated
on consolidation. The investment in the
subsidiary is recognised at fair value in the
Financial Statements of the Company. This
is considered to be the net asset value of the
Shareholders’ funds, as shown in its Statement
of Financial Position.
incorporated in Scotland
number SC467598. It is a wholly owned
subsidiary of the Company and has been
appointed to act as Alternative Investment
(d) Presentation of Statement of
Comprehensive Income
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 Statement of Comprehensive Income
between items of a revenue and capital nature
has been presented alongside the Statement of
Comprehensive Income. In accordance with the
Company’s Articles, net realised capital returns
may 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 sections 1158-
1160 of the Corporation Tax Act 2010.
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 receivable and lease incentives,
where material, from investment properties
under operating leases are recognised in the
Statement of Comprehensive Income over the
term of the lease on a straight line basis. Other
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 and in accordance with the SORP,
the investment management fees have been
allocated, 100% to revenue to reflect the Board’s
expectations of long term investment returns.
It is normal practice and in accordance with
the SORP 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 allocate finance costs to revenue to
match rental income, the Directors consider
that, contrary to the SORP, it is inappropriate to
Financial assets classified as loans and
receivables are held to collect contractual
cash flows and give rise to cash flows
representing solely payments of principal
and interest. As such they are measured at
amortised cost. Other receivables do not
carry any interest, they have been assessed
for any expected credit losses over their
Payables are non-interest bearing and are
The Company’s liability for current tax is
calculated using tax rates that have been
enacted or substantially enacted by the date of
the Statement of Financial Position.
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
temporary differences that have originated
but not reversed at the date of the Statement
of Financial Position, 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 date of the
Statement of Financial Position.
This is subject to deferred tax assets only being
recognised if it is considered more probable
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 maintain
approval for the foreseeable future, the
Company has not provided deferred tax on
any capital gains and losses arising on the
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
(k) Investments
All equity investments were classified on
the basis of their contractual cashflow
characteristics and the Group’s business model
for managing its assets. The business model,
which is the determining feature, was such
that the portfolio of equity investments was
managed, and performance was evaluated,
on the basis of fair value. Consequently, all
equity investments were measured at fair value
through profit or loss.
For listed investments, fair value through profit
or loss was 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 were included in net profit or loss for
the period as a capital item in the Statement of
Comprehensive Income and were ultimately
Investment properties are initially recognised
at cost, being the fair value of consideration
given, including transaction costs associated
with the investment property. Any subsequent
capital expenditure incurred in improving
investment properties is capitalised in the
period incurred and is included within the book
cost of the property.
After initial recognition, investment properties
are measured at fair value. 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 Statement of Comprehensive
Income and are ultimately recognised in the
retained earnings.
As disclosed in Note 21, the Group leases
out all of its properties on operating leases.
A property held under an operating lease is
classified and accounted for as an investment
property where the Group holds it to earn
rental, capital appreciation or both. Any such
property leased under an operating lease is
carried at fair value. Fair value is established
by half-yearly professional valuation on an
open market basis by Savills (UK) Limited,
Chartered Surveyors and Valuers, and in
accordance with the RICS Valuation - Global
Standards (January 2022) (the ‘RICS Red
Book’). The determination of fair value by
Savills is supported by market evidence,
excluding prepaid or accrued operating lease
income arising from the spreading of lease
incentives or minimum lease payments
because it has been recognised as a separate
liability or asset. The fair value of investment
property held by a lessee as a right-of-use asset
reflects expected cash flows (including variable
lease payments that are expected to become
payable). Accordingly, if a valuation obtained
for a property is net of all payments expected
to be made, it will be necessary to add back
any recognised lease liability, to arrive at the
carrying amount of the investment property
using the fair value model. These valuations
are disclosed in Note 9 on pages 98 to 100.
The Company accounts for its investment
in its subsidiary at fair value. All fair value
adjustments in relation to the subsidiary are
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
(m) Non - current liabilities
All new loans and borrowings are initially
measured at cost, being the fair value of the
consideration received, less issue costs where
applicable. Thereafter, 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. When the
term of a loan is modified, the amortisation of
costs is adjusted in line and the loan measured
at fair value on the balance sheet.
The Group leases properties that meet the
definition of investment property. These
right-of-use assets are presented as part of
Investment Properties in the Statement of
Financial Position and held at fair-value. All
properties are leased out under operating
leases and rental income is recognised on a
straight line basis over the expected term of
the relevant lease. Many leases have fixed
or minimum rental uplifts and where lease
incentives or temporary rent reductions have
been granted as a result of the recent COVID
pandemic, rental income is recognised on
a straight line basis over the expected term
of the lease. The capital element of lease
obligations is recorded as a finance lease
payable liability in the Statement of Financial
Position on inception of the arrangement.
Lease payments are apportioned between
capital repayment and finance charge, using
the effective interest rate method, to produce
a constant rate of charge on the balance of the
capital repayments outstanding. The lease
liability relates to the head rent on the property
in Fareham. The current lease is for a period of
99 years with an option for a further 26 years.
The liability is based on the option being taken
and key estimates
The preparation of the Financial Statements
requires the Directors to make judgements,
estimates and assumptions that may affect
the application of accounting policies and the
reported amounts of assets and liabilities,
income and expenses. The critical accounting
area involving a higher degree of judgement or
complexity comprises the determination of fair
value of the investment properties. The Group
engages independent professional qualified
valuers to perform the valuation. Information
about the valuation techniques and inputs used
in determining fair value as at 31 March 2023 is
disclosed in Note 9 to the Financial Statements
(p) Adoption of new and
revised Accounting Standards
New and revised standards and interpretations
that became effective during the year had no
significant impact on the amounts reported
in these Financial Statements but may impact
accounting for future transactions and
arrangements.
At the date of authorisation of these Financial
Statements, the following Standards and
interpretations, which have not been applied to
these Financial Statements, were in issue but
were not yet effective.
Standards
IAS 1 Amendments - Presentation of Financial
Statements (effective 1 January 2023)
IAS 8 Amendments - Accounting Policies,
Changes in Accounting Estimates and Errors
(effective 1 January 2023)
IAS 12 Amendments -Deferred Tax related to
Assets and Liabilities arising from a Single
Transaction (effective 1 January 2023)
IFRS 17 (Initial Application of IFRS 17 and
IFRS 9 - Comparative Information) (effective 1
January 2023)
IFRS 16 Amendments (Lease Liability in a Sale
and Leaseback) (effective 1 January 2024)
IAS 1 Amendments - Presentation of Financial
Statements (effective 1 January 2024)
The Directors do not expect the adoption of
these Standards and interpretations (or any
other Standards and interpretations which are
in issue but not effective) will have a material
impact on the Financial Statements of the
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Year ended
31 March 2023
Year ended
31 March 2022
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Investment income
Dividends from listed investments in UK
168
168
1,682
1,682
Other operating income
Rental income
8,358
8,358
5,647
5,647
Interest receivable on short term deposits
155
155
–
–
Other income
159
159
–
–
Total income
8,840
8,840
7,329
Year ended 31 March 2023
Year ended 31 March 2022
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Group and Company
Investment management fee
990
–
990
1,088
2
1,090
A summary of the terms of the management agreement is given on page 49 of the Directors’
Report.
OLIM Property Limited received an investment management fee of £990,000 (2022 - £1,090,000),
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
31 March 2023
Year ended
31 March 2022
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Fee payable to the Company’s auditor for
the audit of the Company’s accounts
65
65
55
55
- audit of the Subsidiary’s accounts
–
–
2
2
Directors’ fees
97
97
105
105
NIC on Directors’ fees
3
3
3
3
Fees for company secretarial services
237
237
222
222
Direct property costs
(23)
(23)
(2)
(2)
Other expenses
516
516
485
485
895
895
870
Directors’ fees comprise the Chairman’s fees of £30,000 (2022 - £30,000), the Audit and
Management Engagement Committee Chairman’s fees of £24,500 (2022 - £24,500) and fees of
£22,000 (2022 - £22,000) per annum paid to each other Director.
5. Finance costs
Year ended
31 March 2023
Year ended
31 March 2022
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Interest payable on:
9.375% Debenture Stock 2026
456
456
1,875
1,875
Less amortisation of issue premium
(111)
(111)
(24)
(24)
Bank loan interest payable
1,753
1,753
1,181
1,181
Loan expenses derecognised
385
385
–
–
Gain on loan modification
(908)
(908)
–
–
Borrowing costs expensed on recognition of fair value
80
80
–
–
Effective interest
24
24
–
–
Amortisation of loan expenses
22
22
67
67
Finance costs attributable to lease liabilities
78
78
78
78
1,779
1,779
3,177
3,177
In June 2022, the 9.375% Debenture Stock 2026 was repaid early at a premium of £6,380,000
and a balance of £111,000 unamortised premium from the issue of the debenture was expensed,
resulting in a capital charge of £6,269,000 for the year to 31 March 2023 (see Note 12).
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
6. Taxation
Year ended 31 March 2023
Year ended 31 March 2022
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
a) Analysis of the tax credit/(charge)
for the year:
Group
Current tax
(979)
979
–
(321)
321
–
Deferred tax
–
446
446
–
2,833
2,833
(979)
1,425
446
(321)
3,154
2,833
Factors affecting the total tax credit/
(charge) for year:
(Loss)/profit before tax
(24,342)
21,429
Tax charge thereon at 19% (2022 - 19%)
(4,625)
4,072
Effects of:
Non taxable dividends
32
(320)
Losses/(gains) on investments not taxable
4,417
(3,655)
Unrelieved finance costs
(270)
(2,930)
(446)
(2,833)
Company
Current tax
(979)
979
–
(321)
321
–
Deferred tax
–
446
446
–
2,833
2,833
(979)
1,425
446
(321)
3,154
2,833
Factors affecting the total tax credit/
(charge) for year:
Profit before tax
(24,342)
21,429
Tax charge thereon at 19% (2022 - 19%)
(4,625)
4,072
Effects of:
Non taxable dividends
32
(320)
Losses/(gains) on investments not taxable
4,417
(3,655)
Unrelieved finance costs
(270)
(2,930)
(446)
(2,833)
On 28 November 2019, the Company entered into a £22,000,000 fixed term secured loan facility
for a period of up to seven years to 30 November 2026. On 3 March 2021, this facility was extended
until 31 March 2031. During the year ended 31 March 2023, the loan was increased to £35,000,000
and extended for a further two years until 31 March 2033, costs previously incurred on the loan
were extinguished at this point.
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Year ended 31 March 2023
Year ended 31 March 2022
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
b) Factors affecting future tax charges
Unutilised tax losses
18,148
23,192
Potential tax benefit at 19%
–
635
Potential tax benefit at 25%
4,537
4,963
4,537
5,598
Recognised as a deferred
tax non-current asset
4,537
4,091
Not recognised as a deferred tax asset
–
1,507
4,537
5,598
The Company and Group have deferred tax assets of £4,537,000 (2022 - £5,598,000) at 31 March
2023 relating to total accumulated unrelieved tax losses carried forward of £18,148,000 (2022 -
£23,192,000). The Company and Group have recognised deferred tax assets of £4,537,000 (2022 -
£4,091,000), based on forecast profits for the next five years but have not recognised deferred tax
assets of £nil (2022 - £1,507,000) arising as a result of losses carried forward. These losses do not
have an expiry date but it is considered too uncertain that the Group will generate profits against
which these losses would be available to offset and, on that basis, the deferred tax asset in respect
of these losses has not been recognised.
Year ended
31 March 2023
Year ended
31 March 2022
Group
£’000
Company
£’000
Group
£’000
Company
£’000
The return per Ordinary Share is based
on the following figures:
Revenue return
4,197
4,197
1,873
1,873
Capital return
(28,093)
(28,093)
22,389
22,389
Weighted average number of Ordinary Shares in issue
43,272,601
43,272,601
43,557,464
43,557,464
Return per share - revenue
9.70p
9.70p
4.30p
4.30p
Return per share - capital
(64.92p)
(64.92p)
51.40p
51.40p
Total return per share
(55.22p)
(55.22p)
55.70p
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Year ended
31 March 2023
£’000
Year ended
31 March 2022
£’000
Dividends on Ordinary Shares:
Third quarterly dividend of 3.00p per share
(2022 - 2.90p) paid 29 April 2022
1,307
1,263
Final dividend of 3.60p per share
(2022 - 3.60p) paid 29 July 2022
1,568
1,568
First quarterly dividend of 3.00p per share
(2022 - 3.00p) paid 28 October 2022
1,296
1,307
Second quarterly dividend of 3.10p per share
(2022 - 3.00p) paid 27 January 2023
1,336
1,307
Dividends paid in the period
5,507
5,445
The third interim dividend of 3.20p (2022 - 3.00p), paid on 28 April 2023, has not been included as
a liability in these financial statements.
The final dividend of 3.60p (2022 - 3.60p), to be paid on 4 August 2023, has not been included as a
liability in these financial statements.
Set out below is the total dividend paid and proposed in respect of the financial year, which is the
basis upon which the requirements of Sections 1158 - 1159 of the Corporation Tax Act 2010 are
considered. The current year’s revenue available for distribution by way of dividend is £4,197,000
(2022 - £1,874,000).
Year ended
31 March 2023
£’000
Year ended
31 March 2022
£’000
First quarterly dividend of 3.00p per share
(2022 - 3.00p) paid 28 October 2022
1,296
1,307
Second quarterly dividend of 3.10p per share
(2022 - 3.00p) paid 27 January 2023
1,336
1,307
Third quarterly dividend of 3.20p per share
(2022 - 3.00p) payable 28 April 2023
1,376
1,307
Final quarterly dividend of 3.60p per share
(2022 - 3.60p) payable 4 August 2023
1,549
1,568
5,557
5,489
The final dividend is based on the latest share capital of 43,012,464 Ordinary Shares in issue,
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Investment
properties
£’000
Equities
£’000
Total
£’000
Group
Cost at 31 March 2022
129,913
24,395
154,308
Unrealised appreciation
25,925
2,476
28,401
Valuation at 31 March 2022
155,838
26,871
182,709
Purchases
25,353
6,891
32,244
Sales proceeds
(9,746)
(31,527)
(41,273)
Realised gains on sales
1,005
441
1,446
Movement in unrealised appreciation in year
(21,814)
(2,676)
(24,490)
Valuation at 31 March 2023
150,636
–
150,636
Investment
properties
£’000
Investment
in subsidiary
£’000
Equities
£’000
Total
£’000
Company
Cost at 31 March 2022
129,913
200
24,395
154,508
Unrealised appreciation
25,925
–
2,476
28,401
Valuation at 31 March 2022
155,838
200
26,871
182,909
Purchases
25,353
–
6,891
32,244
Sales proceeds
(9,746)
–
(31,527)
(41,273)
Realised gains on sales
1,005
–
441
1,446
Movement in unrealised
appreciation in year
(21,814)
–
(2,676)
(24,490)
Valuation at 31 March 2023
150,636
200
–
150,836
The fair value valuation given by Savills plc excludes prepaid or accrued operating lease income
arising from the spreading of lease incentives or minimum lease payments and for adjustments
to recognise finance lease liabilities for one leasehold property, both in accordance with IFRS 16.
The valuation has, therefore, been increased.
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Year ended
31 March 2023
£’000
Year ended
31 March 2022
£’000
Savills plc valuation
150,500
155,478
Operating lease assets
(2,717)
(2,502)
Finance lease liabilities
2,853
2,862
Valuation of Investment Properties
150,636
155,838
Increase in fair value
136
360
The fair value valuation given by Savills plc includes £1,600,000 relating to the property at
Newcastle where contracts have been exchanged for sale in April 2023.
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 Statement of Comprehensive Income. The total
costs were as follows:
Year ended
31 March 2023
£’000
Year ended
31 March 2022
£’000
Purchases
9
95
Sales
32
32
41
127
The fair values of the investment properties were independently valued by professional valuers
from Savills (UK) Limited, acting in the capacity of External Valuers as defined in the RICS Red
Book (but not for the avoidance of doubt as an External Valuers of the portfolio as defined by
the Alternative Investment Fund Managers Regulations 2013). The valuations were prepared on
the basis of Fair Value as required by the IFRS (International Financial Reporting Standards).
In addition, the valuations have also been prepared in accordance with RICS Valuation –
Professional Standards VPS 3.5 Fair Value and VPS 4.1 Valuations for Inclusion in Financial
Statements. The definition of Fair Value is set out in IFRS 13 and is adopted by the International
Accounting Standards Board as follows:
“The price that would be received to sell an asset, or paid to transfer a liability, in an orderly
transaction between market participants at the measurement date”
The RICS Red Book directs us to consider that Fair Value is consistent with the concept of Market
Value, the definition of which is set out in Valuation Practice Statement 4 1.2 of the Red Book, as
follows:
“The estimated amount for which an asset or liability should exchange on the valuation date
between a willing buyer and a willing seller in an arm’s length transaction after proper marketing
and where the parties had each acted knowledgeably, prudently and without compulsion.”
The valuations have been arrived at predominantly by reference to market evidence for
comparable property (Level 3 of the Fair Value Hierarchy). As part of Savills’ standard process,
the valuations were carried out by specialist valuers, which were peer reviewed and reviewed
again prior to the valuation date. During the review process, the various characteristics of each
property were taken into consideration.
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Property portfolio
Passing rent
range
£
Fair value
- Group
£’000
Key
unobservable input
Inputs range
Blended yield
Industrials
49,500 – 400,000
46,570
Net Equivalent Yield
4.00% - 7.50%
5.50%
Supermarkets
87,000 – 967,590
43,124
Net Equivalent Yield
5.25% - 8.00%
6.00%
Other
61,097 – 559,968
14,297
Net Equivalent Yield
5.00% - 9.50%
7.25%
Bowling
66,788 – 469,586
13,632
Net Equivalent Yield
7.25% - 8.50%
8.00%
Hotels
360,000 -373,549
13,233
Net Equivalent Yield
5.00% - 5.50%
5.25%
Pubs
75,129 – 176,932
11,113
Net Equivalent Yield
5.25% - 9.50%
7.50%
Roadside
181,025 – 213,784
8,667
Net Equivalent Yield
6.75% - 7.50%
7.00%
150,636
A 25 bps decrease in the equivalent yield applied would have increased the net assets attributable
to the Group and Company’s Shareholders and the total gain for the year by £6,500,000. A 25 bps
increase in the equivalent yield applied would have decreased the net assets attributable to the
Group and Company’s Shareholders and the total gain for the year by £6,150,000. A 5% decrease
in the rental value applied would have decreased the net assets attributable to the Group and
Company’s Shareholders and the total gain for the year by £3,725,000. A 5% increase in the rental
value applied would have increased the net assets attributable to the Group and Company’s
Shareholders and the total loss for the year by £3,825,000.
Country of
incorporation
Date of
acquisition
%
ownership
Principal
activity
Name
Value and Indexed Property
Income Services Limited
UK
16 January 2014
100
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
31 March 2023
Year ended
31 March 2022
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Amounts falling due within one year:
Dividends receivable
–
–
98
98
Prepayments and accrued income
599
599
418
418
Amounts due from brokers
–
–
4,193
4,193
599
599
4,709
4,709
Amounts falling due after more than one year: Rent
2,366
2,366
2,238
2,238
2,965
2,965
6,947
Many of the Company’s leases provide for minimum and maximum increases of rent at future
rent reviews. Minimum increases have been averaged over the life of the lease, generating
31 March 2023
Year ended
31 March 2022
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Amounts due to OLIM Property Limited
53
53
103
103
Accruals and other creditors
1,907
1,907
1,676
1,676
Value Added Tax payable
408
408
312
312
Amounts due to brokers
–
–
324
324
Lease liability
8
8
8
8
2,376
2,376
2,423
The amount due to OLIM Property Limited comprises the monthly management fee for March
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Year ended
31 March 2023
Year ended
31 March 2022
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Bank loans
50,000
50,000
37,000
37,000
Balance of costs incurred
(388)
(388)
(473)
(473)
Costs written off in the year
385
385
–
–
Gain on fair value valuation of debt
(908)
(908)
–
–
Borrowing costs expensed on recognition of fair value
80
80
–
–
Effective interest
24
24
–
–
Costs incurred in the year
(215)
(215)
–
–
Add: Debit to income for the year
22
22
85
85
49,000
49,000
36,612
36,612
9.375% Debenture Stock 2026
–
–
20,000
20,000
Add: Balance of premium less issue expenses
111
111
135
135
Less: Credit to income for the year
(111)
(111)
(24)
(24)
–
–
20,111
20,111
Total borrowings
49,000
49,000
56,723
56,723
Lease liability payable in more than one year
- within 2 - 5 years
28
28
28
28
- over 5 years
2,817
2,817
2,826
2,826
Total payables
2,845
2,845
2,854
2,854
51,845
51,845
59,577
59,577
The Company has a £15,000,000 fixed term secured loan facility for a period of up to ten years to
31 March 2026 (2022 - £15,000,000). At 31 March 2023, £11,893,750 was drawn down at a rate of
4.344% and £3,106,250 was drawn down at a rate of 3.60%. The terms of the loan facility contain
financial covenants that require the Company to ensure that:
•
in respect of each 3 month period ending on 31 March and 30 September (the Half Year dates),
net rental income shall be at least 200 per cent of interest costs;
•
in respect of each 12 month period beginning immediately after 31 March and 30 September,
net rental income shall be at least 200 per cent of interest costs; and
•
at all times, the loan shall not exceed 60 per cent of the value of the properties that have been
charged.
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
On 28 November 2019, the Company entered into a £22,000,000 fixed term secured loan facility
for a period of up to seven years to 30 November 2026. On 3 March 2021, this facility was extended
until 31 March 2031. On 27 April 2022, the loan was increased to £30,000,000 and on 22 June
2022, the loan was increased to £35,000,000 and extended for a further two years until 31 March
2033, costs previously incurred on the loan were extinguished at this point. Subsequent to this
the loan is recorded on the Statement of Financial Position at it’s fair value. 95% of the loan is at
a fixed rate and 5% at a floating rate of interest. At 31 March 2023, £35,000,000 was drawn down
at a net effective interest rate of 3.65%. The terms of the loan facility contain financial covenants
that require the Company to ensure that:
•
the total debt ratio does not at any time exceed 50 per cent;
•
projected interest cover is not less than 200 per cent at all times; and
•
the Loan to Value shall not exceed 68% of the value of the properties that have been charged.
The 9.375% Debenture Stock 2026 issued by VIP was repayable at par on 30 November 2026 and
secured by a floating charge over the property and assets of the Company. In June 2022, it was
repaid early at a premium of £6,380,000 and a balance of £111,000 unamortised premium from
the issue of the debenture was taken to profit and loss.
The fair values of the loan and the Debenture are disclosed in Note 21 on pages 106 to 110 and the
Net Asset Value per share, calculated with the borrowings at fair value, is disclosed in Note 17 on
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 and no provision for deferred
tax is therefore required in this respect.
As disclosed in Note 6 on pages 95 and 96, a deferred tax asset has been recognised to reflect
the estimated value of tax losses carried forward which are likely to be capable of offset against
future profits.
14. Share capital
31 March 2023
£’000
Year ended
31 March 2022
£’000
Authorised:
56,000,000 Ordinary Shares of 10p each (2022 - 56,000,000)
5,600
5,600
Called up, issued and fully paid:
43,012,464 Ordinary Shares of 10p each (2022 - 43,557,464)
4,301
4,356
Treasury shares:
2,537,511 Ordinary Shares of 10p each (2022 - 1,992,511)
254
199
4,555
4,555
The ordinary share capital on the Statement of Financial Position relates to the number of
Ordinary Shares in issue and in Treasury. Only when shares are cancelled, either from Treasury
or directly, is a transfer made to the Capital Redemption Reserve.
During the year, the Company repurchased 545,000 Ordinary Shares at a cost of £1,307,000,
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
16. Retained earnings
Year ended
31 March 2023
Year ended
31 March 2022
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Opening balance at 31 March 2022
113,899
113,899
95,082
95,082
(Loss)/profit for the year
(23,896)
(23,896)
24,262
24,262
Dividends paid (see Note 8)
(5,507)
(5,507)
(5,445)
(5,445)
Buyback of Ordinary Shares for Treasury (see Note 14)
(1,307)
(1,307)
–
–
Closing balance at 31 March 2023
83,189
83,189
113,899
113,899
The table below shows the movement in retained earnings analysed between revenue and capital
items.
Year ended 31 March 2023
Year ended 31 March 2022
Revenue
£’000
Capital
£’000
Total
£’000
Revenue
£’000
Capital
£’000
Total
£’000
Group
Opening balance at 31 March 2022
(3,476)
117,375
113,899
96
94,986
95,082
Profit/(loss) for the year
4,197
(28,093)
(23,896)
1,873
22,389
24,262
Dividends paid (see Note 8)
(5,507)
–
(5,507)
(5,445)
–
(5,445)
Buyback of Ordinary Shares
for Treasury (see Note 14)
–
(1,307)
(1,307)
–
–
–
Closing balance at 31 March 2023
(4,786)
87,975
83,189
(3,476)
117,375
113,899
Company
Opening balance at 31 March
(4,563)
118,462
113,899
(991)
96,073
95,082
Profit/(loss) for the year
4,197
(28,093)
(23,896)
1,873
22,389
24,262
Dividends paid (see Note 8)
(5,507)
–
(5,507)
(5,445)
–
(5,445)
Buyback of Ordinary Shares
for Treasury (see Note 14)
–
(1,307)
(1,307)
–
–
–
Closing balance at 31 March 2023
(5,873)
89,062
83,189
(4,563)
118,462
113,899
Of the Company’s Retained Earnings of £83,189,000, £76,433,000 is considered to be distributable.
15. Share premium
Year ended
31 March 2023
Year ended
31 March 2022
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Opening balance
18,446
18,446
18,446
18,446
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
The net asset values per Ordinary Share are based on the Group’s net assets attributable of
£106,190,000 (2022 - £136,900,000) and on the Company’s net assets attributable of 105,780,000
(2022 - £136,900,000) and on 43,012,464 (2022 - 43,557,464) Ordinary Shares in issue at the year
end, excluding shares held in Treasury.
The net asset value per Ordinary Share, based on the net assets of the Group and the Company
adjusted for borrowings at fair value (see Note 21) of £108,194,000 (2022 - £132,836,000) is 251.54p
(2022 - 304.97p).
Year ended
31 March 2023
Year ended
31 March 2022
Group
Company
Group
Company
Net assets at 31 March 2023
106,190
106,190
136,900
136,900
Fair value adjustments
252
252
(4,064)
(4,064)
Net assets with borrowings at fair value
106,442
106,442
132,836
132,836
Number of shares in issue
43,012,464
43,012,464
43,557,464
43,557,464
Net asset value per share
246.88p
246.88p
314.30p
314.30p
Net asset value per share with borrowings at fair value
247.47p
247.47p
304.97p
304.97p
net cash inflow from operating activities
Year ended
31 March 2023
Year ended
31 March 2022
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Income from operations before tax
(14,409)
(14,409)
26,566
26,566
Losses/(gains) on investments
23,249
23,249
(19,237)
(19,237)
Investment management fee
(990)
(990)
(1,090)
(1,090)
Other operating expenses
(895)
(895)
(870)
(870)
Decrease in receivables
521
521
303
303
Increase in other payables
18
18
218
218
Net cash from operating activities
7,494
7,494
5,890
5,890
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
19. Reconciliation of current and non-current liabilities
arising from financing activities
Year ended
31 March 2023
Year ended
31 March 2022
Group
£’000
Company
£’000
Group
£’000
Company
£’000
Cash movements
Payment of rental (for leasing)
87
87
88
88
Repayment of debenture
20,000
20,000
–
–
Drawdown of loans (for financing)
(13,000)
(13,000)
–
–
Loan costs
80
80
32
32
Non-cash movements
Finance costs (for leasing)
(78)
(78)
(78)
(78)
Changes in fair value
578
578
(33)
(33)
Issue premium on debenture
111
111
–
–
Effective interest
(24)
(24)
–
–
Amortisation of loan premium and expenses
and fair value adjustment
(22)
(22)
(61)
(61)
Change in debt in the year
7,732
7,732
(52)
(52)
Opening debt at 31 March
(59,585)
(59,585)
(59,533)
(59,533)
Closing debt at 31 March
(51,853)
(51,853)
(59,585)
Value and Indexed Property Income Services Limited is a wholly owned subsidiary of Value and
Indexed Property Income Trust PLC and all costs and expenses are borne by Value and Indexed
Property Income Trust PLC. Value and Indexed Property Income Services Limited has not traded
during the year.
Matthew Oakeshott is a director of OLIM Property Limited which has an agreement with the
Group to provide investment management services, the terms of which are outlined on page 49
and in Note 3 on page 93.
Risk management
The Group’s and the Company’s financial instruments and investment property comprise 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 Managers have dedicated investment management processes which ensures that the
Investment Policy set out on page 34 is achieved. The portfolio is reviewed on a periodic basis by a
senior investment manager and by OLIM Property’s Investment Committee.
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Additionally, the Manager’s Compliance Officer continually monitors the Group’s investment and
borrowing powers and reports to the Manager.
The main risks that the Group faces from its financial instruments are:
(i) market risk (comprising price risk and interest rate 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.
(i) 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
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.
All investment properties held by the Group are commercial properties located in the UK with
long, strong income streams.
Price risk sensitivity
If market prices at the date of the Statement of Financial Position had been 10% higher or lower,
while all other variables remained constant, the return attributable to ordinary shareholders for
the year ended 31 March 2023 would have increased/decreased by £15,043,000 (2022 - increase/
decrease of £18,271,000) and equity reserves would have increased/ decreased by the same amount.
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. Borrowings comprise three and ten year
bank loans, 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 50%. Details of borrowings at 31 March 2023 are shown in Notes 11 and 12 on
pages 101 to 103.
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Interest risk profile
The interest rate risk profile of the portfolio of financial assets and liabilities at the statement of
financial position date was as follows:
Weighted average
period for which
rate is fixed Years
Weighted
average
interest rate %
Fixed
rate
£’000
Floating
rate
£’000
At 31 March 2023
Assets
Sterling
–
3.18
–
2,273
Total assets
–
3.18
–
2,273
At 31 March 2023
Liabilities
Sterling
6.51
3.63
50,000
–
Total liabilities
6.51
3.63
50,000
–
At 31 March 2022
Assets
Sterling
–
–
–
5,153
Total assets
–
–
–
5,153
At 31 March 2022
Liabilities
Sterling
6.17
5.64
57,000
–
Total liabilities
6.17
5.64
57,000
–
The weighted average interest rate on borrowings 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 Notes 11 and
12 on pages 101 to 103.
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 are
non interest bearing and 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 statement of financial position 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 2023 would increase/decrease by £21,000 (2022 - increase /
decrease by £31,000). This is mainly attributable 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.
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
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 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.
(ii) Liquidity risk
This is the risk that the Group will encounter difficulty in meeting obligations associated with its
financial liabilities.
The Group’s assets of cash or near cash securities and investment properties which, by their
nature, are less readily realisable. The maturity of the Group’s mainly fixed rate borrowings is set
out in the interest risk profile section of this Note.
The table below details the Group’s remaining contractual maturity for its financial liabilities,
based on the undiscounted cash outflows, including both interest and principal cash flows, and
on the earliest date upon which the Group can be required to make payment.
Carrying
value
£’000
Expected
cashflows
£’000
Due within
3 months
£’000
Due between
3 months
and 1 year
£’000
Due after
1 year
£’000
At 31 March 2023
Borrowings
50,270
62,378
405
1,245
60,728
Leases
2,853
7,177
22
65
7,090
Other payables
1,500
1,500
1,500
–
–
Total
54,623
71,055
1,927
1,310
67,818
At 31 March 2022
Borrowings
57,850
75,519
1,261
1,955
72,303
Leases
2,895
7,265
22
65
7,178
Other payables
356
356
356
–
–
Total
61,101
83,140
1,639
2,020
79,481
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
(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. Cash is held only with reputable banks
with high quality external credit rating, which are monitored on a regular basis.
Credit risk exposure
In summary, compared to the amounts on the Group Statement of Financial Position, the
maximum exposure to credit risk during the year to 31 March was as follows:
Year ended
31 March 2023
Year ended
31 March 2022
Statement
of Financial
Position
£’000
Maximum
exposure
£’000
Statement
of Financial
Position
£’000
Maximum
exposure
£’000
Current assets
Cash and cash equivalents
2,273
27,725
5,153
58,689
Other receivables
599
8,239
4,709
5,186
2,872
35,964
9,862
63,875
(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 weighted
average unexpired lease length to the break option is 12.6 years (2022 - 12.8 years). Details of the
tenant and geographical spread of the portfolio are set out on pages 24 and 25. The long term
record of performance through the varying property cycles since 1987 is set out on pages 116 to 117.
OLIM Property is responsible for property investment management, with surveyors, solicitors and
managing agents acting on the portfolio under OLIM Property’s supervision.
The Group leases out its investment property to its tenants under operating leases. At 31 March
2023, the future minimum lease receipts under non-cancellable leases are as follows:
Year ended
31 March 2023
Year ended
31 March 2022
£’000
£’000
Due within 1 year
9,338
8,159
Due between 2 and 5 years
36,302
32,525
Due after more than 5 years
89,151
78,686
134,791
119,370
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
This amount comprises the total contracted rent receivable as at 31 March 2023.
None of the Group’s financial assets is past due or impaired.
All assets and liabilities of the Group other than receivables and payables and the borrowings are
included in the Statement of Financial Position at fair value.
(i) Fair value hierarchy disclosures
All assets and liabilities of the Group other than receivables and payables and the borrowings are
included in the Statement of Financial Position at fair value.
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
At 31 March 2023
Investment properties
–
–
150,636
150,636
–
–
150,636
150,636
At 31 March 2022
Equity investments
26,871
–
–
26,871
Investment properties
–
–
155,838
155,838
26,871
–
155,838
182,709
Company and Group numbers per the above fair value disclosures are the same except for the
investment of £200,000 made by the Company in its subsidiary, which was the subject of an
inter-group transfer in 2014.
Fair value categorisation within the hierarchy has been determined on the basis of the degree to
which the inputs to the fair value measurements are observable and the significance of the inputs
to the fair value measurement in its entirety as follows:
Level 1 - inputs are unadjusted quoted prices in an active market for identical assets
Level 2 - inputs, not being quoted prices, are observable, either directly (i.e. as prices) or indirectly
(i.e. derived from prices)
Level 3 - inputs are not observable
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
The fair value of borrowings has been calculated at £48,748,000 as at 31 March 2023 (2022 -
£61,064,000) compared to a Statement of Financial Position value in the Financial Statements of
£49,000,000 (2022 - £56,723,000) per Notes 11 and 12.
The fair values of the loans are determined by a discounted cash flow calculation based on the
appropriate inter-bank rate plus the margin per the loan agreement. These instruments are,
therefore, considered to be Level 2 as defined above. There were no transfers between Levels
during the year.
All other assets and liabilities of the Group are included in the Statement of Financial Position at
fair value.
Fair value
Statement of financial
position value
2023
£’000
2022
£’000
2023
£’000
2022
£’000
9.375% Debenture Stock 2026
–
23,592
–
20,111
Bank loans
48,748
37,472
49,000
36,612
48,748
61,064
49,000
56,723
In June 2022, the 9.375% Debenture Stock 2026 was repaid early at a premium of £6,380,000 and
(iii) Financial instruments by category
Financial assets
Fair value through
profit or loss
Amortised cost
2023
£’000
2022
£’000
2023
£’000
2022
£’000
Cash and cash equivalents
–
–
2,273
5,153
Other receivables
–
–
2,965
6,947
Equity investments
–
26,871
–
–
Total financial assets
–
26,871
5,238
12,100
Financial liabilities
Fair value through
profit or loss
Amortised cost
2023
£’000
2022
£’000
2023
£’000
2022
£’000
Other payables
–
–
(5,221)
(5,277)
Loans and other borrowings
(34,116)
–
(14,884)
(56,723)
Total financial liabilities
(34,116)
–
(20,105)
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
The Group’s capital management objectives are:
•
to ensure that the Group will be able to continue as a going concern; and
•
to maximise the return to its equity shareholders in the form of long term real growth in
dividends and capital value without undue risk.
The capital of the Group consists of equity, comprising issued capital, reserves, borrowings and
retained earnings.
The Board monitors and reviews the broad structure of the Group’s capital. This review includes:
•
the planned level of gearing which takes into account the Manager’s view of the market and
the extent to which revenue in excess of that which requires to be distributed should be
retained.
The Group’s objectives, policies and processes for managing capital are unchanged from the
preceding accounting period.
Details of the Group’s gearing and financial covenants are disclosed in Notes 11 and 12 on pages
The Board is recommending the payment of a final dividend of 3.6p per Ordinary Share (2022:
3.6p) which, subject to receiving Shareholder approval at the 2023 AGM, will be paid on 4 August
2023 to all Shareholders on the register as at 7 July 2023.
There are no significant subsequent events for the Group or the Company, though purchases
and sales of property in the normal course of business which completed after the year end are
*MSCI (ex IPD) UK Quarterly Property Index 12 months total returns to 31 March; except 1988 – 1990: IPD Annual Index
114
Canterbury
Additional
Information
115
116
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
PROPERTY RECORD OVER 36 YEARS
Total return
31 March
Rental income
£’000
Capital value
£’000
Running yield
%
VIP
%
MSCI UK
Quarterly
Property Index* %
2023
9,338
150,500
6.2
-7.8
-13.0
2022
8,334
155,478
5.4
20.2
19.6
2021
5,152
80,550
6.4
2
1
2020
4,482
70,200
6.4
6
-1
2019
4,372
68,800
6.4
8
4
2018
4,329
68,700
6.3
11
10
2017
4,480
66,775
6.7
13
5
2016
3,940
55,125
7.2
10
11
2015
4,019
54,500
7.4
13
17
2014
3,552
46,475
7.6
11
14
2013
3,543
46,225
7.7
4
3
2012
3,537
48,250
7.3
7
6
2011
3,552
49,075
7.2
9
11
2010
3,463
48,750
7.1
18
17
2009
3,278
44,850
7.3
-11
-25
2008
3,261
51,000
6.4
0
-9
2007
3,116
54,525
5.7
15
16
2006
3,219
52,250
6.2
21
21
2005
3,124
45,875
6.8
21
17
2004
3,052
40,375
7.5
15
12
2003
3,089
40,550
7.6
12
9
2002
3,013
38,800
7.8
13
7
2001
3,117
39,825
7.8
10
10
2000
3,054
39,800
7.7
15
15
1999
3,410
41,055
8.3
25
11
1998
3,141
34,800
9.0
15
17
117
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Total return
31 March
Rental income
£’000
Capital value
£’000
Running yield
%
VIP
%
MSCI UK
Quarterly
Property Index* %
1997
3,111
32,805
9.5
10
12
1996
2,840
29,440
9.6
9
5
1995
2,948
31,125
9.5
10
6
1994
2,806
29,835
9.4
23
26
1993
2,773
26,415
10.5
12
-1
1992
2,709
25,880
10.5
10
-3
1991
2,331
23,800
9.8
2
-10
1990
2,050
24,390
8.4
15
15*
1989
1,915
23,475
8.2
30
30*
1988
1,329
14,939
8.9
24
26*
1987
1,155
11,375
10.2
N/A
N/A
118
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
LIST OF PROPERTIES
Industrials
Address
Tenants
Aberdeen – Gateway Business Park, Moss Road
H.M. Government*
Aylesford – Broadmead House, Bellingham Way, New Hythe
Kier Group*
Chester – Winsford Way, Sealand Industrial Estate
MKM Building Supplies*
Dundee – Faraday Street, Dryburgh Industrial Estate
Screwfix***
Fareham – Mitchell Close, Segensworth East
Hampshire County Council
Gloucester – Falcon Close, Green Farm Business Park,
Quedgeley
H.M. Government*
Milton Keynes – Wimblington Drive
Winterbotham Darby*
Staines – Thameside Service Station, Laleham Road
Halfords**
Stoke-on-Trent – Stanley Matthews Way
MKM Building Supplies*
Thetford – Units 1 - 4, Baird Way, Fison Way Industrial Estate
Brake Brothers*
Thirsk – Dalton Airfield, Dalton
H.M. Government*
Thurrock – 680 London Road
Halfords**
Westbury – 50 Cory Way, West Wilts Trading Estate
Arla Foods*
Supermarkets
Address
Tenants
Aberfoyle – Main Street
Co-operative Group Food**
Blandford Forum – Langton Road
Marks and Spencer*
Cleethorpes – 52 St Peters Avenue
Co-operative Group Food*
Garstang – Park Hill Road
Sainsbury’s*
Invergordon – 110 High Street
Co-operative Group Food**
Kirriemuir – 33 The Roods
Co-operative Group Food*
Newport, Isle of Wight – Litten Park
Marks and Spencer***
Rayleigh – 12 - 24 Eastwood Road
Marks and Spencer*
York – 103 - 104 Hull Road
Co-operative Group Food***
119
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Pubs
Address
Tenants
Bedford – The Rose, 45 High Street
Stonegate*
Bournemouth – Slug and Lettuce, 2 Dean Park Crescent
Stonegate*
Canterbury – The Bishop's Finger, 13 St. Dunstan Street
Shepherd Neame*
Coventry – Castle Grounds, 7 Little Park Street
Stonegate*
London – The Bishop's Finger, West Smithfield
Shepherd Neame*
London – The Prince of Wales, 48 Cleaver Square
Shepherd Neame*
Newcastle-upon-Tyne – The Percy Arms, Percy Street
Stonegate*
Other
Address
Tenants
Dover – St. Margaret's Holiday Park, Reach Road
Park Resorts*
Risca – 77 Tredegar Street
Caerphilly Borough Council*** Tesco*
Roadside
Address
Tenants
Bebington – 152 Kings Road, Wirral
Sainsbury's*
Louth – Spar Fairfield Services, Bolingbroke Road,
Fairfield Industrial Estate
A.F. Blakemore and Son*
Melton Mowbray – Egerton Park Service Station, Leicester Road
BP Oil***
Hotels
Address
Tenants
Alnwick – Willowburn Trading Estate, South Road
Premier Inn**
Catterick – Princes Gate, Richmond Road
Premier Inn**
Leisure
Address
Tenants
Coventry – Crosspoint, Olivier Way
Ten Entertainment Group*
Starbucks*
Pizza Hut***
Doncaster – The Leisure Park, Bawtry Road
Ten Entertainment Group*
Stafford – TenPin, Greyfriars Place
Ten Entertainment Group*
* RPI-linked rent increases
** CPI-linked rent increases
*** Fixed rent increases
120
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Value and Indexed Property Income Trust PLC
(the Company) is an alternative investment
fund (AIF) for the purposes of the Alternative
Investment Fund Managers Directive (AIFMD).
The Company has appointed its wholly owned
subsidiary, Value and Indexed Property Income
Services Limited (VIS), to act as its alternative
investment fund manager (AIFM). VIS is
authorised and regulated by the FCA.
As the AIFM, VIS has responsibility for the
portfolio management and risk management
of the assets of the Company. VIS has delegated
its portfolio management responsibilities
for the property portfolio to OLIM Property
(the Investment Manager). The delegation by
VIS of its management responsibilities is in
accordance with the delegation requirements
of the AIFMD. The Investment Manager
remains subject to the supervision and
direction of VIS and the Board.
An additional requirement of the AIFMD is to
appoint a depositary on behalf of the Company
to oversee the custody and cash arrangements
of the Company. The Company has appointed
BNP Paribas Trust Corporation UK Limited to
act as the Company’s Depositary.
Disclosures
The Company and VIS are required to make
certain disclosures available to investors
in accordance with the AIFMD. Those
disclosures which require to be made prior
to investment are contained in an investor
disclosure document, which can be found
on the Company’s web pages hosted by the
Investment Manager at www.olimproperty.
co.uk/value-and-indexed-property-income-
trust.html.
The Investor Disclosure Document was
updated in July 2022 following the increases in
borrowings on one of the Company’s secured
term loans.
ALTERNATIVE INVESTMENT FUND MANAGERS DIRECTIVE
The Company and VIS also make the following
periodic disclosures to investors in accordance
with the requirements in the AIFMD:
•
Investment Management
: Details of the
investment objective, strategy and policy of
the Company are included in the Strategic
Report. A list of the investment properties
is included on pages 118 and 119.
•
Valuation of illiquid assets
: None of the
Company’s assets is subject to special
arrangements arising from their illiquid
nature.
•
Liquidity management
: There are no new
arrangements for managing the liquidity
of the Company or any material changes
to the liquidity management systems and
procedures employed by the Company.
•
Risk Management
: There is an ongoing
process for identifying, evaluating and
managing the principal and emerging risks
faced by the Company. Further details of the
risk profile and risk management systems
of the Company are set out in the Strategic
Report and in Note 21 to the Financial
Statements. There have been no changes to
the risk management systems in place in
the period under review and no breaches
of any of the risk limits set, with no breach
expected.
•
AIFM Remuneration
: All authorised
AIFMs are required to comply with the
AIFMD Remuneration Code. The expenses
which VIS incurs in the provision of
AIFM services are met by the Company.
During the year ended 31 March 2023, all
of the directors of VIS were the same as
the Directors of the Company, with the
exception of Matthew Oakeshott who is not
a director of VIS, and no additional staff
were employed by VIS. The Directors of the
Company do not receive a separate fee in
respect of being directors of VIS and details
of the remuneration of the Directors is set
out in the Directors’ Remuneration Report
on pages 54 to 57. The Investment Manager
receives remuneration separately (as set
out on page 55). The Investment Manager
is bound by regulatory requirements on
remuneration that are equally as effective
as those applicable to VIS under the AIFMD
Remuneration Code.
121
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Leverage
Circumstances when the Company may use
leverage
Leverage may be used where it is believed
that the assets funded by borrowed monies
will generate a return in excess of the cost of
borrowing.
In a rising market, gearing will tend to enhance
returns because of the increased exposure to
the markets but it will tend to increase losses
in the event of a falling market. Leverage is,
therefore, constantly monitored.
Types and sources of leverage permitted
The Company has a long-standing policy
of funding most of the increases in its
property portfolio through the judicious
use of borrowings. Gearing will normally
be within a range of 25 per cent. and 50 per
cent. of the total portfolio. The Company
will not raise new borrowings if total net
borrowings would then represent more
than 50 per cent. of the total assets.
On 26 February 2015, a five year secured term
loan facility of £5 million was arranged at a five
year fixed interest rate of 4% including all costs.
This facility was used to fund further property
acquisitions. This loan was refinanced on 12
May 2016 and a new ten year secured term loan
facility of £15 million was arranged at a ten year
interest rate of 4.4% including all costs and
replaced the original £5 million loan arranged
in February 2015.
On 28 November 2019, the Company agreed
a seven year secured term loan of £22 million
at a fixed interest rate of 3.1% per annum
(3.3% per annum after all expenses) on £20.9
million and at a floating rate of Libor plus
2.35% on the balance of £1.1 million. The net
proceeds were held on accessible deposit
until 31 March 2021 when they were used to
refinance the Company’s £15 million 11% First
Mortgage Debenture Stock 2021, which expired
on that date and to support the acquisition of
further UK properties in accordance with the
Company’s investment policy. On 3 March
2021, the term of this agreement was extended
to 31 March 2031 at a new fixed interest rate of
3.28% on the £20.9 million. On 27 April 2022, an
additional £8 million and on 22 June 2022, an
additional £5 million, were borrowed, bringing
the loan amount to £35 million, with the term
of the loan extended to 31 March 2033. This
borrowing is now at a rate of 3.46% on £33.25
million with the balance of £1.75 million on a
floating rate (SONIA) plus a margin of 2.2%.
The maximum level of leverage which the
AIFM is entitled to employ on behalf of the
Company
Under the AIFMD, the Company is required to
calculate leverage under the two methodologies
specified by the AIFMD, the ‘Gross Method’ and
the ‘Commitment Method’, the difference being
that the Commitment Method allows some
netting and hedging arrangements to reduce
exposures.
VIS has set a maximum leverage limit of 200%
under both the Gross Method and Commitment
Method. As noted above, these leverage limits
are subject to a long-standing policy not to
raise new borrowings if total net borrowings
would represent more than half of total assets.
The table below sets out the current maximum
permitted range and the actual level of leverage
for the Company, as a percentage of adjusted
Shareholders’ funds:
Gross
method (%)
Commitment
method (%)
Limit
200
200
Actual level at
31 March 2023
144
147
There have been no changes to the maximum
level of leverage that the Group has employed
and no changes to the right of reuse of
collateral or any guarantee granted under the
leveraging arrangements.
The Company’s leveraging arrangements are
collateralised through the granting of charges
over the properties in the property portfolio
to the respective providers of the two secured
term loans.
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• Annual Report and Financial Statements 2023
Direct
Investors can buy and sell shares in Value
and Indexed Property Income Trust
PLC directly through a stockbroker or
indirectly through a lawyer, accountant
or other professional adviser.
Keeping you informed
The latest Ordinary Share price is displayed on
the London Stock Exchange website, subject to
a delay of 15 minutes. “VIP” is the Code for the
Ordinary Shares which may be found at www.
londonstockexchange.com. Additional data on
the Company and other investment trusts may
be found at www.trustnet.co.uk.
Customer services
For enquiries in relation to Ordinary Shares
held in certificated form, please contact the
Company’s registrars:
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol, BS99 6ZZ
Telephone: 0370 703 0168
www.investorcentre.co.uk/contactus
HOW TO INVEST IN VALUE AND INDEXED PROPERTY INCOME TRUST PLC
Note
Please remember that past performance is
not a guide to the future. Stock market and
currency movements may cause the value of
shares and the income from them to fall as
well as rise and investors may not get back the
amount they originally invested.
As with all equity investments, the value of
investment trusts purchased will immediately
be reduced by the difference between the
buying and selling prices of the shares, the
market maker’s spread.
Investors should further bear in mind that
the value of any tax relief will depend on the
individual circumstances of the investor and
that tax rates and reliefs, may be changed by
future legislation.
123
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
UNSOLICITED OFFERS FOR SHARES (BOILER ROOM SCAMS)
Shareholders in a number of UK registered companies have received
unsolicited calls from organisations, usually based overseas or using false UK
addresses or phone lines routed abroad, offering to buy shares at prices much
higher than their current market values or to sell non-tradeable, overpriced,
high-risk or even non-existent securities. Whilst the callers may sound
credible and professional, Shareholders should be aware that their intentions
are often fraudulent and high-pressure sales techniques may be applied, often
involving a request for an indemnity or a payment to be provided in advance.
If you receive such a call, you should exercise caution and, based on advice
from the FCA, the following precautions are suggested:
•
obtain the name of the individual or organisation calling;
•
check the FCA register to confirm if the caller is authorised;
•
call back using the details on the FCA register to verify the caller’s
identity;
•
discontinue the call if you are in any doubt about the intentions of the
caller, or if calls persist; and
•
report any individual or organisation that makes unsolicited calls with an
offer to buy or sell shares to the FCA and the City of London Police.
Useful contact details:
Action Fraud
Telephone: 0300 123 2040
Website: www.actionfraud.police.uk
FCA
Telephone: 0800 111 6768 (freephone)
E-mail: [email protected]
Website: www.fca.org.uk/scamsmart
124
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Alternative
performance measures
Alternative performance measures (APMs) are
numerical measures of the Group’s current,
historical or future performance, financial
position or cash flows, other than the financial
measures defined or specified in the applicable
financial framework. The Group’s applicable
financial framework includes IFRS and the
AIC SORP. The Directors assess the Group’s
performance against a range of criteria which
are viewed as particularly relevant for closed-
end investment companies.
Total return
Total return is considered to be an APM. The
NAV Total Return is calculated by reinvesting
the dividends in the assets of the Group from
the relevant ex-dividend date. Dividends are
deemed to be reinvested on the ex-dividend
date as this is the protocol used by the Group’s
benchmark and other indices. The Share Price
Total Return is calculated by reinvesting the
dividends in the shares of the Group from the
relevant ex-dividend date.
Net asset value valuing
debt at carrying value
Net asset value valuing debt at carrying value
is the net value of the Group’s assets, cash
and other current assets less all creditors,
provisions and all debt, all valued at carrying
value. Net income from the financial year
is included. The calculation of this APM
is explained in Note 17 to the Financial
Statements.
GLOSSARY
Discount
The discount is the amount by which the
market price of a share of an investment trust
is lower than the NAV per share expressed as a
percentage of the NAV per share.
31 March
2023
31 March
2022
Share price
204.5p
239.0p
NAV (debt
at carrying value)
246.9p
314.3p
Discount
17.2%
24.0%
125
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General
Meeting of Value and Indexed Property
Income Trust PLC (the “Company”) will be
held at the Kingham
Room, Broadway House
Conference Centre, Tothill Street, London
SW1H 9NQ on Wednesday, 2 August 2023
at 12.30pm, for the following purposes:
To consider and if thought fit, pass the
following Resolutions, of which Resolutions
1 to 12 inclusive will be proposed as Ordinary
Resolutions and Resolutions 13 to 15 inclusive
will be proposed as Special Resolutions:
1.
To receive the Directors’ Report and audited
Financial Statements, together with the
Auditor’s Report thereon for the year ended
31 March 2023.
2.
To approve the Directors’ Remuneration
Report for the year ended 31 March 2023.
3.
To approve the Directors’ Remuneration
Policy for the three-year period ending 31
March 2026.
4.
To approve a final dividend of 3.6p per
Ordinary Share in respect of the year ended
31 March 2023.
5.
To re-elect John Kay as a Director of the
Company.
6.
To re-elect Matthew Oakeshott as a Director
of the Company.
7.
To re-elect David Smith as a Director of the
Company.
8.
To re-elect Josephine Valentine as a
Director of the Company.
9.
To elect Lucy Winterburn as a Director of
the Company.
10. To re-appoint BDO LLP as Independent
Auditor of the Company to hold office until
the conclusion of the next Annual General
Meeting at which accounts are laid before
the Company.
11.
To authorise the Directors to fix the
remuneration of the Independent Auditor
for the year to 31 March 2024.
12. Authority to Allot Shares
That, in substitution for any existing
authority, but without prejudice to the
exercise of any such authority prior
to the date hereof, the Directors of the
Company be and are hereby generally and
unconditionally authorised pursuant to
and in accordance with Section 551 of the
Companies Act 2006 (the “Act”) to exercise
all the powers of the Company to allot
shares in the Company and to grant rights
to subscribe for or to convert any security
into shares in the Company (“Securities”)
provided that such authority shall be
limited to the allotment of shares and the
grant of rights in respect of shares with an
aggregate nominal value of up to £430,124
(being approximately 10% of the nominal
value of the issued share capital (excluding
Treasury shares) of the Company, as at
the date of this Notice) provided that such
authorisation expires (unless previously
extended or renewed, varied or revoked
by the Company in general meeting) at
the conclusion of the next Annual General
Meeting of the Company in 2024 or on the
expiry of 15 months from the passing of
this Resolution, (whichever is earlier) save
that the Company may, at any time prior to
the expiry of this authority, make offers or
agreements which would or might require
such Securities to be allotted or granted
after such expiry and the Directors may
make such offers or agreements as if such
expiry had not occurred.
13.
Disapplication of Pre-emption Rights
That, subject to the passing of Resolution
12 set out above, and in substitution for any
existing power but without prejudice to the
exercise of any such power prior to the date
hereof, the Directors of the Company be and
are hereby generally empowered, pursuant
to Sections 570 and 573 of the Companies
Act 2006 (“the Act”), to allot equity
securities (as defined in Section 560 of
the Act) for cash pursuant to the authority
conferred on them by Resolution 12 or by
way of a sale of Treasury shares (within the
meaning of section 560(3) of the Act) as if
Section 561(1) of the Act did not apply to any
such allotment provided that this power
shall be limited to the allotment of equity
securities:
(i) (otherwise than pursuant to sub-
paragraph (ii) below) up to an aggregate
nominal value of £430,124 (being 10% of the
nominal value of the issued share capital as
at the date of this Notice); and
126
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
(ii) in connection with an offer of such
equity securities by way of rights issue,
open offer or other pre-emptive offer in
favour of all holders of Ordinary Shares
where the equity securities respectively
attributable to the interests of all such
holders are either proportionate (as nearly
as may be) to the respective number of
Ordinary Shares held by them on a record
date fixed by the Directors (subject to such
exclusions, limitations, restrictions or other
arrangements as the Directors consider
necessary or appropriate to deal with
Treasury shares, fractional entitlements,
record dates, legal, regulatory or practical
problems in or under the laws of, or
requirements of, any regulatory body or any
stock exchange in any territory or otherwise
howsoever); and shall expire (unless
previously renewed, varied or revoked by
the Company in general meeting) at the
conclusion of the Annual General Meeting
of the Company in 2024, or on the expiry
of 15 months from the passing of this
Resolution (whichever is earlier), save that
the Company may, at any time prior to the
expiry of such authority, make offers or
agreements before such expiry which would
or might require equity securities to be
allotted after such expiry and the Directors
may make such offers or agreements as if
such expiry had not occurred.
14. Authority to Make Market
Purchases of Shares.
That, the Directors be and are hereby
generally and unconditionally authorised,
for the purposes of Section 701 of the
Companies Act 2006 (the “Act”), to make
one or more market purchases (within
the meaning of Section 693(4) of the Act)
of fully paid Ordinary Shares of 10p each
in the capital of the Company (“Ordinary
Shares”) on such terms as the Directors of
the Company think fit, either for retention
as Treasury shares for future reissue,
resale, transfer or cancellation, provided
that:
(i) the maximum aggregate number of
Ordinary Shares hereby authorised to be
purchased shall be 6,447,568 Ordinary
Shares, representing 14.99% of the issued
ordinary share capital of the Company as at
the date of the passing of this Resolution;
(ii) the minimum price which may be
paid for an Ordinary Share shall be 10p
(exclusive of expenses);
NOTICE OF ANNUAL GENERAL MEETING
CONTINUED
(iii) the maximum price (exclusive of
expenses) which may be paid for an
Ordinary Share shall be the higher of:
(a) 105% of the average of the middle
market quotations of the Ordinary Shares
(as derived from the Daily Official List of
the London Stock Exchange) for the five
business days immediately preceding the
date of purchase; and
(b) the higher of the price of the last
independent trade in Ordinary Shares
and the highest current independent bid
for Ordinary Shares on the London Stock
Exchange; and
(iv) unless previously varied, revoked or
renewed, the authority hereby conferred
shall expire at the conclusion of the Annual
General Meeting of the Company to be held
in 2024 or on the expiry of 15 months from
the passing of this Resolution (whichever
is the earlier) save that the Company may
at any time prior to such expiry, enter into
a contract or arrangement to purchase
Ordinary Shares under this authority which
will or might be completed or executed
wholly or partly after the expiration of
this authority and may make a purchase
of shares pursuant to any such contract or
arrangement; and
(v) any Ordinary Shares so purchased
shall be cancelled or, if the Directors so
determine and subject to the provisions of
the Act and any applicable regulations of
the Financial Conduct Authority, be held
or otherwise dealt with as permitted by the
Companies Act 2006 as Treasury Shares.
15. Notice of General Meeting
That, a general meeting other than an
Annual General Meeting may be called on
not less than 14 clear days’ notice.
By order of the Board
Maven Capital Partners UK LLP
Company Secretary
First Floor Kintyre House
205 West George Street
Glasgow G2 2LW
26 June 2023
127
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Notes:
(i) A member entitled to vote at the meeting
may appoint a proxy or proxies to exercise
all or any of his/her rights to attend, speak
and vote on his/her behalf at the meeting. A
proxy need not be a member of the Company.
A member may appoint more than one
proxy provided each proxy is appointed to
exercise rights attached to different shares.
A member may not appoint more than one
proxy to exercise the rights attached to any
one share. If you wish your proxy to speak
on your behalf at the meeting you will need
to appoint your own choice of proxy (not
the Chairman of the meeting) and give your
instructions directly to them. A proxy form
which may be used to make such appointment
and give proxy instructions accompanies
this notice. If you do not have a proxy form
and believe that you should have one, or if
you require additional forms or would like to
appoint more than one proxy, please contact
the Company’s Registrars, Computershare
Investor Services PLC on 0370 703 0168. In
the case of joint holders, where more than
one of the joint holders purports to appoint
a proxy, only the appointment submitted
by the most senior holder will be accepted.
Seniority is determined by the order in which
the names of the joint holders appear in the
Company’s Register of Members in respect of
the joint holding (the first-named being the
most senior). A member present in person
or by proxy shall have one vote on a show of
hands and on a poll every member present in
person or by proxy shall have one vote for every
Ordinary Share of which he/she is the holder.
(ii) A personalised form of proxy, and reply-
paid envelope, is enclosed for Ordinary
Shareholders. To be valid, any proxy form
or other instrument of proxy and any power
of attorney or other authority, if any, under
which they are signed or a notarially certified
copy of that power of attorney or authority
should be sent to the Company’s Registrars,
Computershare Investor Services PLC, The
Pavilions, Bridgwater Road, Bristol, BS99 6ZY
so as to arrive not less than forty eight hours
(excluding non-working days) before the time
fixed for the meeting.
(iii) The return of a completed proxy form or
other such instrument of proxy will not prevent
a member attending the Annual General
Meeting and voting in person if he/ she wishes
to do so.
(iv) CREST members who wish to appoint
a proxy or proxies through the CREST
electronic proxy appointment service may do
so for the meeting and any adjournment(s)
thereof by using the procedures described in
the CREST Manual and by logging on to the
website www.euroclear.com/CREST. CREST
personal members or other CREST sponsored
members, and those CREST members who
have appointed a voting service provider(s),
should refer to their CREST sponsor or voting
service provider(s), who will be able to take the
appropriate action on their behalf.
(v) In order for a proxy appointment or
instruction made using the CREST service to
be valid, the appropriate CREST message (a
“CREST Proxy Instruction”) must be properly
authenticated in accordance with Euroclear
UK & Ireland Limited’s specifications,
and must contain the information required for
such instruction, as described in the CREST
Manual. The message, regardless of whether
it constitutes the appointment of a proxy or
is an amendment to the instruction given to a
previously appointed proxy must, in order to be
valid, be transmitted so as to be received by the
Company’s Registrar (ID 3RA50) no later than
48 hours (excluding non-working days) before
the time of the meeting or any adjournment.
For this purpose, the time of receipt will be
taken to be the time (as determined by the
timestamp applied to the message by the
CREST Application Host) from which the
Company’s Registrar is able to retrieve the
message by enquiry to CREST in the manner
prescribed by CREST. After this time any
change of instructions to proxies appointed
through CREST should be communicated to the
appointee through other means.
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Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
(vi) CREST members and, where applicable,
their CREST sponsors, or voting service
providers should note that Euroclear UK
& Ireland Limited does not make available
special procedures in CREST for any particular
message. Normal system timings and
limitations will, therefore, apply in relation to
the input of CREST Proxy Instructions. It is the
responsibility of the CREST member concerned
to take (or, if the CREST member is a CREST
personal member, or sponsored member, or
has appointed a voting service provider(s),
to procure that his CREST sponsor or voting
service provider(s) take(s)) such action as
shall be necessary to ensure that a message is
transmitted by means of the CREST system
by any particular time. In this connection,
CREST members and, where applicable, their
CREST sponsors or voting system providers
are referred, in particular, to those sections
of the CREST Manual concerning practical
limitations of the CREST system and timings.
(vii) The Company may treat as invalid a CREST
Proxy Instruction in the circumstances set out
in Regulation 35(5) (a) of the Uncertificated
Securities Regulations 2001.
(viii) The “vote withheld” option on the proxy
form is provided to enable a member to abstain
on any particular resolution. It should be
noted that an abstention is not a vote in law
and will not be counted in the calculation of
the proportion of votes “for” or “against” a
particular resolution.
(ix) The right to vote at a meeting is determined
by reference to the Company’s register
of members as at close of business on 31
July 2023 or if this meeting is adjourned,
by close of business on the day two days
(excluding non-working days) prior to the
adjourned meeting. Changes to entries
on that register after that time shall be
disregarded in determining the rights of any
member to attend and vote at the meeting.
NOTICE OF ANNUAL GENERAL MEETING
CONTINUED
(x) As at 26 June 2023 (being the latest
practicable date prior to the publication of this
document) the Company’s issued share capital
comprised 43,012,464 Ordinary Shares of 10p
each in issue and 2,537,511 Ordinary Shares
held in Treasury. Each Ordinary Share in
issue carries the right to one vote at a general
meeting of the Company and, therefore, the
total number of voting rights in the Company
as at 26 June 2023 was 43,012,464. Following
Resolution 14 becoming effective, the
maximum aggregate number of shares hereby
authorised to be purchased shall be 6,447,568
Ordinary Shares in issue immediately prior to
the passing of Resolution 14.
(xi) Any person holding 3% or more of the total
voting rights of the Company who appoints a
person other than the Chairman of the meeting
as his proxy will need to ensure that both he
and his proxy complies with their respective
disclosure obligations under the UK Disclosure,
Guidance and Transparency Rules.
(xii) A person to whom this Notice is sent
who is a person nominated under Section
146 of the Companies Act 2006 to enjoy
information rights (a “Nominated Person”)
may, under an agreement between him/her
and the shareholder by whom he/she was
nominated, have a right to be appointed (or
to have someone else appointed) as a proxy
for the meeting. If a Nominated Person has
no such proxy appointment right or does not
wish to exercise it, he/she may, under any such
agreement, have a right to give instructions
to the shareholder as to the exercise of
voting rights. The statements of the rights of
members in relation to the appointment of
proxies in notes (i) to (iii) above do not apply to
a Nominated Person. The rights described in
those notes can only be exercised by registered
members of the Company.
(xiii) Biographical details of the Directors
standing for election/re-election are set out on
page 44 of this Annual Report.
(xiv) Members who have general queries about
the Annual General Meeting should contact the
Company Secretary in writing. Members are
advised that any telephone number, website
or email address which may be set out in this
Notice of Annual General Meeting or in any
related documents (including the proxy form)
is not to be used for the purposes of serving
information or documents on, or otherwise
communicating with, the Company for any
purposes other than those expressly stated.
129
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
(xv) Members should note that, it is possible
that, pursuant to requests made by members
of the Company under Section 527 of the
Companies Act 2006, the Company may be
required to publish on a website a statement
setting out any matter relating to the audit
of the Company’s accounts (including the
auditors’ report and the conduct of the audit)
that are to be laid before the meeting or any
circumstances connected with an auditor of
the Company ceasing to hold office since the
previous meeting at which annual accounts
and reports were laid in accordance with
section 437 of the Companies Act 2006. The
Company may not require the members
requesting any such website publication to pay
its expenses in complying with sections 527
or 528 of the Companies Act 2006. Where the
Company is required to place a statement on
a website under section 527 of the Companies
Act 2006, it must forward the statement to
the Company’s auditors no later than the
time when it makes the statement available
on the website. The business which may
be dealt with at the meeting includes any
statement that the Company has been required
under section 527 of the Companies Act
2006 to publish on a website.
(xvi) No Director has a service contract with
the Company. Copies of the Directors’ letters
of appointment are available for inspection on
any day (except Saturdays, Sundays and bank
holidays) from the date of this Notice until
the date of the meeting during usual business
hours at the Company’s registered office and
for 15 minutes prior to, and at, the meeting.
(xvii) Information regarding the Annual
General Meeting is available from the
Company’s web pages, hosted by the
Investment Manager, at https://www.
olimproperty.co.uk/value-and-indexed-
property-income-trust.html
(xviii) Pursuant to Section 319A of the
Companies Act 2006, as a member,
you have the right to put questions
at the meeting relating to business
being dealt with at the meeting.
130
Value and Indexed Property Income Trust PLC
• Annual Report and Financial Statements 2023
Directors
John Kay (Chairman)
Matthew Oakeshott
David Smith
Josephine Valentine
Lucy Winterburn
Secretary
Maven Capital Partners UK LLP
First Floor Kintyre House
205 West George Street
Glasgow G2 2LW
Telephone: 0141 306 7400
Website: www.mavencp.com
(Authorised and regulated by the Financial
Conduct Authority)
Registered Office
First Floor Kintyre House
205 West George Street
Registered Number
Registered in Scotland
Company No: SC050366
Legal Entity Identifier:
213800CU1PIC7GAER820
ISIN: GB0008484718
TIDM: VIP
Registrars
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Telephone: 0370 703 0168
Website: www.investorcentre. co.uk/contactus
CONTACT INFORMATION
Independent Auditor
BDO LLP
55 Baker Street
London W1U 7EU
Investment Manager
OLIM Property Limited
15 Queen Anne’s Gate
London SW1H 9BU
Telephone: 020 7846 3252
Website: www.olimproperty.co.uk
(Authorised and regulated by the Financial
Conduct Authority)
Matthew.Oakeshott@olimproperty. co.uk
Alternative Investment
Fund Manager
Value and Indexed Property
Income Services Limited
c/o Maven Capital Partners UK LLP
First Floor Kintyre House
205 West George Street
Glasgow G2 2LW
Registered in Scotland
Registration number: SC467598
Legal Entity Identifier:
213800D7AEDHGXDAM208
(Authorised and regulated by the Financial
Conduct Authority)
Depositary and Custodian
BNP Paribas Trust Corporation UK Limited
10 Harewood Avenue
London NW1 6AA
Corporate Broker
Panmure Gordon
One New Change
London EC4M 9AF
Telephone: 020 7886 2500
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