VPI Income Pool. Interim Management Report of Fund Performance For the six-month period ended June 30, Manager Value Partners Investments Inc.

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1 Interim Management Report of Fund Performance Manager Value Partners Investments Inc. Portfolio Managers Patient Capital Management Inc. Canso Investment Counsel Ltd. This interim management report of fund performance contains financial highlights but does not contain either interim or annual financial statements of the Pool. If you have not received a copy of the interim financial statements with this interim management report of fund performance, you may obtain a copy at your request, and at no cost, by calling toll-free at , by writing to us at Broadway, Winnipeg, Manitoba, R3C 3J7, by visiting our website at or by visiting the SEDAR website at You may also contact us using one of these methods to request a copy of the Pool s interim financial report, proxy voting policies and procedures, proxy voting disclosure record, or quarterly portfolio disclosure.

2 Management Discussion of Fund Performance August 27, 2015 This Interim Management Report of Fund Performance presents management s view of the significant factors and developments affecting the Pool s performance and outlook since, 2014, the Pool s most recent fiscal year-end. This report should be read in conjunction with the Annual Management Report of Fund Performance for the year ended, Results of Operations Net assets of the Pool increased by approximately $94.5 million for the six months ended June 30, Contributing to this increase was $91.0 million of net sales and $7.6 million from an increase in net assets from operations. These increases were offset by $4.1 million of distributions paid to unit holders. The increase in net assets was due to dividend and interest income of $7.5 million and $6.4 million of realized gains on the sale of investments offset by $2.8 million of unrealized depreciation in the value of investments and $3.5 million of operating expenses. Throughout the year, the Portfolio Managers have continued to position the portfolio such that fixed income securities represent nearly all that is permitted (75%) under the investment strategy. This is due to increases in equity valuations in recent years that have made it difficult for the Portfolio Manager to identify businesses for the portfolio that are trading at attractive valuations. The following table shows the changes to the allocation of the overall portfolio during the year: Sector Allocation Increase Sector Allocation Decrease Corporate Bonds 10.1% Mortgage-backed securities 6.3% Cash 0.9% Equities 4.2% The most significant shift was in the fixed income securities of the portfolio where the corporate bond allocation increased by 10.1% and the allocation to mortgage-backed securities and equities decreased by 6.3% and 4.2% respectively. In the first quarter of the period, the fixed income Portfolio Manager decided to replace some of the fixed rate NHA mortgage-backed securities with floating rate corporate bonds. Going forward, the fixed income Portfolio Manager expects the floating rate issues to be positive contributors to the portfolio. There were also a number of changes made to the Pool s equity holdings during the period. The following table summarizes the businesses that were added and/or removed from the portfolio: Additions Philip Morris International Ensign Energy Services Dispositions Kohl s Wells Fargo Cash flows into the Pool from new unitholders and proceeds from dispositions allowed the Portfolio Manager to make the above additions to the portfolio and add to existing positions. As a result of these changes, there were some notable shifts in the sector allocation of equites from the prior year as indicated in the following table: Sector Allocation Increase Sector Allocation Decrease Energy 2.1% Retailing 3.2% Food, beverage & tobacco 1.5% Consumer Durables & Apparel 2.2% Banks 2.0% The portfolio also changed from a geographic standpoint during the year as indicated by the most significant changes shown in the following table: Country Allocation Increase Country Allocation Decrease Canada 4.4% United States 3.3% France 1.1% Each series of the Pool experienced a gain during the period ranging from 2.6% to 3.2%. This result was better than the benchmark Blended Index (comprised of 50% S&P/TSX Composite Total Return Index Equity Index and 50% FTSE TMX Universe Bond Index Bond Index ) return of 1.7%. Generally, the fixed income markets provided a higher return than the equity markets during the first six months of The Pool s asset mix was approximately 75% fixed income and 25% equities during the period. This asset mix helped the Pool to post a higher return than the benchmark. In addition, the Pool s equity component also provided a higher return than the S&P/TSX Composite Total Return Index during the period.

3 Revenues and Expenses Revenues of the Pool amounted to $7.5 million, which can be attributed to a combination of dividend income from its equity holdings and interest income from its fixed income holdings. The net assets of the Pool also increased significantly from the inflow of client assets. The Pool also incurred $3.5 million in management fees and operating expenses, realized a $6.4 million gain on the sale of investments, and experienced $2.8 million of unrealized depreciation in the value of its investments. The realized gain on sale of investments is attributable to the following dispositions in the portfolio during the six month period. Dividends received from each of these holdings while in the Pool are in addition to these gains. Approximate Proceeds Cost Realized Gain Holding Holding Period (millions) (millions) (millions) Kohl s Corporation 1.2 years $ 11.1 $ 7.4 $ 3.7 Wells Fargo Company 1.2 years Partial dispositions n/a Fixed income securities n/a Canada T-Bills n/a $114.0 $107.6 $ 6.4 Recent Developments Economic Conditions North American equity markets posted modest returns during the first six months of As of June 30, 2015 the year to date performance for the S&P/TSX Total Return Index and S&P 500 Total Return Index (USD) was 0.9% and 1.2% respectively and the FTSE TMX Universe Bond Index rose 2.4%. However, markets have experienced volatility in recent months as investors weigh varying economic data and central bank decisions. The S&P/TSX Total Return Index has been particularly volatile as oil and other commodity prices fluctuate near multi-year lows. U.S. economic statistics are starting to show signs of growth. Employment, manufacturing and housing have all improved during 2014 and are expected to show growth in However, the growth in the U.S. is being offset by the slowdown in China and other developing markets. In addition, substantial declines in the Chinese equity markets have impacted markets as investors worry about these losses spreading to global equity markets. In addition, concerns over the Greek debt situation and the implications for the future of the Eurozone have caused volatility to rise. Canadian economic growth is expected to be impacted by the decline in the price of oil and other commodities, however, consumer spending and manufacturing should benefit from lower energy costs. In addition, the fall in the Canadian dollar should help to improve Canadian exports. The Portfolio Manager views both the U.S. and Canadian equity markets as extremely overvalued and posing a substantial amount of risk. The Portfolio Manager believes that valuation parameters are at extreme levels and that the risk of a substantial correction is quite high. The energy sector is starting to show some value and the Portfolio Manager has increased the participation of the Pool in this sector. The Portfolio Manager views long-term bonds as very risky in today s environment. With global interest rates at all-time lows there is significant probability that borrowing costs will increase from these levels and widespread loses will occur in fixed income markets. Should rates rise, heavily indebted consumers and highly leveraged investors will suffer serious consequences. However, the Pool is well positioned in this environment as a significant allocation is invested in variable rate securities and the duration of the fixed income securities is substantially below the respective benchmark. The maintains a very conservative asset mix; holding only 25% equities; the minimum equity allocation allowed under the Pool s mandate. In addition, the fixed income allocation of the Pool has been positioned against the probability of rising interest rates. The Portfolio Managers believe that the Pool is well positioned to take advantage of any opportunities that may arise. Over the long term the Portfolio Managers focus on purchasing quality securities at very attractive valuations will hold the Pool in good stead; the Portfolio Managers have positioned the Pool to preserve capital while offering attractive potential returns. The Portfolio Managers continue to diligently search for excellent long term opportunities that meet their criteria for value and quality.

4 Recent Developments (continued) Harmonized Sales Tax (HST) The rules for calculating and charging HST to the Pool are based on a blended tax rate derived from the residency of the unit holders and the value of their units. This blended rate is required to be calculated and updated periodically and the table below indicates the rate charged to the Pool for the relevant reporting period(s). Year Ended, 2014 Year Ended, 2015 Series A 6.60% 6.14% Series B 7.68% 7.94% Series F 5.09% 8.21%

5 Summary of Investment Portfolio As at June 30, 2015 Portfolio Allocation Corporate bonds 68.4% Mortgage-backed securities 5.1% Equities 23.1% Other net assets -1.8% Cash 5.2% Geographic Allocation Canada 55.6% Ireland 2.5% United States 22.2% Italy 1.1% Great Britain 10.5% Jersey 1.1% France 3.5% Luxembourg 0.4% Germany 3.1% Sector Allocation Corporate bonds 68.4% Diversified financials 2.4% Energy 10.8% Banks 2.2% Food, beverage & tobacco 6.1% Consumer durables & apparel 1.6% Cash 5.2% Other net assets -1.8% Mortgage-backed securities 5.1% Top 25 Holdings Issuer Maturity Date Coupon Rate Percentage of Net Assets Cash 5.2% Blackberry Ltd. 13-Nov % 5.0% Bombardier Inc. 15-Mar % 4.9% Royal Bank of Canada 23-Mar % Yellow Pages Digital & Media Solutions Ltd. 30-Nov % 4.2% Kellogg Company 3.6% SLM Corporation 25-Jan % 3.5% Cenovus Energy Inc. 2.9% Total S.A. 2.9% Merrill Lynch Canada Inc., NHA 1-Aug % 2.8% Royal Dutch Shell 2.6% Philip Morris International Inc. 2.5% Depfa Bank PLC 15-Dec % Ensign Energy Services Inc. 2.4% Kraft Canada 7-Jun % J.P. Morgan Chase & Company 2.4% Metropolitan Life Global Funding Inc. 10-Apr % 2.3% Postmedia Network 16-Aug % 2.2% Royal Bank of Scotland 04-Oct % 2.1% Navient Corporation 25-Mar % 1.9% Commerzbank AG 19-Sep % 1.7% Royal Bank of Scotland 16-Mar % 1.6% Lloyds TSB Bank 16-Dec % 1.6% Dorel Industries Inc., Class B 1.6% Bombardier Inc. 15-Jan % 1.5% Total 71.1% The above summary of investment portfolio may change due to ongoing portfolio transactions of the Pool. An update will be made available within 60 days of each subsequent quarter-end.

6 Dec-07 (2) Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 (3) Dec-14 Jun-15 Dec-05 (1) Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 (3) Dec-14 Jun-15 Dec-07 (2) Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 (3) Dec-14 Jun-15 Interim Management Report of Fund Performance Past Performance The historical performance information shown below assumes that all distributions were reinvested in the Pool and does not account for any sales, redemptions, distributions or optional charges or income taxes payable by an investor that would have reduced returns. Mutual fund returns are not guaranteed, their values change frequently and past performance may not be repeated. Year-by-Year Returns The bar charts below show the performance of each series of the Pool (net of fees) for the six-month period ended June 30, 2015, and the previous years ended or since inception to. It shows in percentage terms, how an investment made on January 1 or on inception would have increased or decreased by the end of the respective periods. Series A Series B 30.0% 20.0% 10.0% 5.0% 4.7% 22.4% 6.7% 11.5% 9.4% 3.4% 2.7% 30.0% 20.0% 10.0% 22.0% 6.5% 11.3% 9.2% 3.1% 2.6% 0.0% -10.0% -2.0% -3.3% 0.0% -10.0% -0.7% -3.6% -20.0% -15.6% -20.0% -16.3% Series F 30.0% 23.6% 20.0% 10.0% 0.0% -10.0% -20.0% 0.0% -14.9% 7.8% -2.4% 4.4% 12.6% 10.5% 3.2% (1) 2005 return is s ince inceptio n o n Octo ber 20, (2) 2007 return is s ince inceptio n o n J uly 3, (3) P atient Capital Management Inc. and Cans o Inves tment Co uns el Ltd. were appo inted as po rtfo lio managers o f the P o o l o n December 1,.

7 Management Fees The Pool pays an annual management fee on each of its series to the Manager. The management fee is calculated daily as a percentage of the net asset value of each series as of the close of business on each business day. In consideration for the management fees, the Manager may pay a percentage sales commission and/or trailing commission to registered dealers or brokers for units bought and held in the Pool depending on which series of units were purchased. The Manager also pays a portion of the management fee to the Portfolio Manager for its services in managing the investment portfolio., approximately 47% of the management fee revenues received by the Manager from the Pool were paid to registered dealers and brokers as sales and/or trailing commissions. Since each series may have a different commission structure, this percentage may vary by series. The remainder of the management fee revenue, after payment of fees to the Portfolio Manager for its services, was retained by the Manager for corporate purposes. Related Party Transactions Value Partners Investments Inc. is the manager ( Manager ) of the Pool and is responsible for the overall business and operations of the Pool. the Pool paid $2.9 million in management fees (excluding taxes) to the Manager. In addition, the Manager also held 63,577 Series F units of the Pool as of June 30, Financial Highlights The following tables show selected key financial information about each series of the Pool and are intended to help you understand the Pool s financial performance for the six-month period ended June 30, 2015 and for the periods ended December 31. This information is derived from the Pool s audited annual and unaudited interim financial statements and is not intended to be a reconciliation of the net asset value per unit. The Pool s Net Assets Per Unit ($) June 30 Series A Net assets, beginning of period Increase (decrease) from operations: Total revenue Total expenses (0.12) (0.24) (0.23) (0.22) (0.24) (0.23) Realized gains (losses) for the period (0.11) 0.20 Unrealized gains (losses) for the period (0.09) (0.10) (0.52) 0.34 Total increase (decrease) from operations (1) (0.43) 0.72 Distributions: From income (excluding dividends) (0.11) (0.24) From dividends (0.02) (0.02) (0.24) (0.20) (0.16) (0.17) From capital gains - (0.12) (0.49) Return of capital Total annual distributions (2) (0.13) (0.38) (0.73) (0.20) (0.16) (0.17) Net assets, end of period (3)

8 Financial Highlights (continued) June 30 Series B Net assets, beginning of period Increase (decrease) from operations: Total revenue Total expenses (0.13) (0.25) (0.24) (0.23) (0.25) (0.24) Realized losses for the period (0.11) 0.23 Unrealized gains (losses) for the period (0.08) (0.08) (0.50) 0.37 Total increase (decrease) from operations (1) (0.45) 0.75 Distributions: From income (excluding dividends) (0.11) (0.23) From dividends (0.02) (0.02) (0.23) (0.19) (0.14) (0.17) From capital gains - (0.11) (0.46) Return of capital Total annual distributions (2) (0.13) (0.36) (0.69) (0.19) (0.14) (0.17) Net assets, end of period (3) June 30 Series F Net assets, beginning of period Increase (decrease) from operations: Total revenue Total expenses (0.07) (0.13) (0.13) (0.12) (0.13) (0.13) Realized gains (losses) for the period (0.07) 0.21 Unrealized gains (losses) for the period (0.16) (0.08) (0.62) 0.37 Total increase (decrease) from operations (1) (0.40) 0.87 Distributions: From income (excluding dividends) (0.17) (0.34) From dividends (0.03) (0.03) (0.26) (0.26) (0.23) (0.24) From capital gains - (0.12) (0.48) Return of capital Total annual distributions (2) (0.20) (0.49) (0.74) (0.26) (0.23) (0.24) Net assets, end of period (3) (1) This information is derived from the Pool s audited annual financial statements for the prior periods ended and from the unaudited financial report for the current period ended June 30, The net assets per unit presented in the financial statements may differ from the net asset value calculated for pricing purposes for years ending, to which were reported using Canadian GAAP. An explanation of these differences may be found in the notes to the audited financial statements for the respective years. (2) Net assets and distributions are based on the actual number of units outstanding at the relevant time. The increase/decrease from operations is based on the weighted average number of units outstanding over the financial period. (3) Distributions were paid in cash/reinvested in additional units of the Pool, or both.

9 Financial Highlights (continued) Ratios and Supplemental Data Series A June Net asset value (000 s) (1) $316,150 $241,949 $108,863 $116,509 $114,262 $91,975 Number of units outstanding (000 s) 27,432 21,322 10,146 11,327 11,260 8,636 Management expense ratio (2) 2.01% 2.05% 2.11% 2.11% 2.17% 2.18% Management expense ratio before waivers or absorptions 2.01% 2.05% 2.11% 2.11% 2.17% 2.18% Trading expense ratio (3) 0.02% 0.02% 0.08% 0.03% 0.08% 0.06% Portfolio turnover rate (4) 37.55% 66.79% 80.73% 20.58% 41.08% 16.97% Net asset value per unit (1) $11.52 $11.35 $10.73 $10.29 $10.15 $10.65 Series B June Net asset value (1) $26,689 $23,199 $14,183 $15,354 $14,496 $11,824 Number of units outstanding 2,494 2,198 1,417 1,596 1,523 1,182 Management expense ratio (2) 2.27% 2.29% 2.35% 2.37% 2.44% 2.45% Management expense ratio before waivers or absorptions 2.27% 2.29% 2.35% 2.37% 2.44% 2.45% Trading expense ratio (3) 0.02% 0.02% 0.08% 0.03% 0.08% 0.06% Portfolio turnover rate (4) 37.55% 66.79% 80.73% 20.58% 41.08% 16.97% Net asset value per unit (1) $10.70 $10.55 $10.01 $9.62 $9.52 $10.01 Series F June Net asset value (000 s) (1) $30,749 $13,892 $1,587 $2,198 $3,002 $3,375 Number of units outstanding (000 s) 2,717 1, Management expense ratio (2) 1.08% 1.08% 1.14% 1.15% 1.19% 1.21% Management expense ratio before waivers or absorptions 1.08% 1.08% 1.14% 1.15% 1.19% 1.21% Trading expense ratio (3) 0.02% 0.02% 0.08% 0.03% 0.08% 0.06% Portfolio turnover rate (4) 37.55% 66.79% 80.73% 20.58% 41.08% 16.97% Net asset value per unit (1) $11.32 $11.15 $10.55 $10.05 $9.88 $10.35 (1)This information is provided as at the date shown. (2)Management expense ratio is based on total expenses for the stated period (excluding distributions, commissions and other portfolio transaction costs) and is expressed as an annualized percentage of daily average net assets during the period. In the period a series is established, the management expense ratio is annualized from the date of inception to. (3) The trading expense ratio represents total commissions and other portfolio transaction costs expressed as an annualized percentage of daily average net assets during the period. (4) The Pool s portfolio turnover rate indicates how actively the Pool s portfolio manager manages its portfolio investments. A portfolio turnover rate of 100% is equivalent to the Pool buying and selling all of the securities in its portfolio once in the course of the year. The higher the Pool s portfolio turnover rate in a year, the greater the trading costs payable by the Pool in the year, and the greater the chance of an investor receiving taxable capital gains in the year. There is not necessarily a relationship between a high turnover rate and the performance of the Pool.

10 Other Information As at June 30, 2015, Value Partners Group Inc. (VPGI) owns 100 percent of the Manager. VPGI is 40.1 percent beneficially owned by The Longton Trust II, a discretionary family trust established for the benefit of specified members of the Lawton family, including one director/officer of the Manager. Certain of the directors, officers and shareholders of VPGI are also shareholders and sales representatives of Lawton Partners Financial Planning Services Limited, a mutual fund dealer. As of June 30, 2015, sales representatives of Lawton Partners Financial Planning Services Limited hold, in aggregate, Class A1 shares of VPGI representing 13.7 percent of the common equity and Class C1 shares representing 6.6 percent of the common equity. The remaining common equity of VPGI was held by sales representatives of other dealer firms and employees of the Manager. No sales representative held more than 5 percent of the common equity of the Manager. Additional information regarding equity interests may be obtained from the Pool s annual information form or from the Manager's website at Forward-Looking Statements This report may contain forward-looking statements about the Pool, including its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as expects, anticipates, intends, plans, believes, estimates, or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future Pool action, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Pool and economic factors. Forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made by the Pool. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decisions and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware of the fact that the Pool has no specific intention of updating any forward-looking statements whether as a result of new information, future events or otherwise.