Northern 3 VCT PLC Application Form - Clubfinance

Northern3VCT PLC 

Offer Document (including application form) 

Offer for subscription in 2011/12 tax year 

2011

Contents Page 

Riskfactors 

LetterfromtheChairman 

PARTI 

– TheCompany 

Introduction 3 

Income 3 

TaxationbenefitstoInvestors 3 

VCTstoassistinretirementplanning 4 

TheManager:NVMPrivateEquity 4 

Investmentpolicy 5 

Sharebuybackpolicy 6 

Directors 6 

Costs 6 

Otherinformation 6 

PARTII – TrackrecordoftheCompany 8 

PARTIII – Taxation 9 

PARTIV – Definitions 10 

PARTV – TermsandConditionsofApplication 11 

NotesonApplicationForm 

ApplicationForm 

 

 

KeyOfferInformation 

 

Maximumamounttoberaised 

Minimuminvestment 

Maximuminvestmentonwhichtaxreliefsareavailable 

Offeropens 

Offercloses(unlessfullysubscribedearlier) 

 

 

FinancialCalendar 

 

1 

2 

£2,000,000 

£5,000 

£200,000 

21February2012 

5.00pmon5April2012 

Financialyearend 

31March 

Annualresultsannouncementandannualreportpublished 

May 

Annualgeneralmeeting 

July 

Dividendspaid(firstdividendinrespectoftheOfferSharesexpectedJuly2012) 

JulyandJanuary 

Halfyearlyresultsannouncementandhalfyearlyreportpublished 

November 

 

IftheOfferisfullysubscribed,itistheDirectors'intentiontoopenanotherofferforsubscriptiononorafter23March2012, 

toraiseuptoafurther£1,600,000.AnyInvestorwhoseapplicationisunsuccessfulduetooversubscriptionofthecurrent 

Offerwillbegivenpriorityifanotherofferforsubscriptionislaunchedinthe2011/12taxyear.

Thisdocument,whichconstitutesafinancialpromotionforthepurposesofSection21oftheFinancialServices 

andMarketsAct2000,hasbeenapproved,forthepurposesofthatsectiononly,byDowningLLP(“Downing”), 

whichisauthorisedandregulatedbytheFinancialServicesAuthority.Downingdoesnotofferinvestmentor 

taxadviceormakerecommendationsregardinginvestments.DowningisactingfortheCompanyandnoone 

elseandwillnotberesponsibletoanyoneotherthantheCompanyforprovidingtheprotectionsaffordedto 

customersofDowning.Downinghasgiven,andnotwithdrawn,itsconsenttotheinclusionofitsnameinthe 

formandcontextinwhichitisincluded. 

 

 

 

 

NORTHERN3VCTPLC 

(IncorporatedinEnglandandWalesundertheCompaniesAct1985withregisterednumber4280530) 

 

 

TopUpOfferforSubscription 

toraiseupto£2,000,000 

 

 

 

TheOfferwillopenon21February2012andmaycloseatanytimethereafterbut,inanyevent,notlaterthan 

5.00pm on 5 April 2012. The terms and conditions of application are set out on pages 11 and 12 of this 

documentandarefollowedbyanApplicationFormforuseinconnectionwiththeOffer.Thereisnominimum 

subscriptionfortheOffertoproceedanditisnotunderwritten. 

 

 

ImportantNotice 

ThereisnoguaranteethattheinvestmentobjectivesoftheCompanywillbeattained.Ifyouareinanydoubt 

astowhatactiontotake,youshouldcontactanindependentfinancialadviserauthorisedundertheFinancial 

ServicesandMarketsAct2000,whospecialisesinadvisingontheacquisitionofsharesorothersecurities.The 

levelsandbasesofreliefsfromtaxationdescribedinthisdocumentarethosecurrentlyavailable.Thesemay 

changeandtheirvaluedependsonanInvestor’sindividualcircumstances. 

 

 

Your attention is drawn to the risk factors set out on page 1 of this document. An investment in the 

Company is only suitable for Investors who are capable of evaluating the risks and merits of such an 

investmentandwhohavesufficientresourcestobearanylosswhichmightarise.Ifyouareinanydoubtas 

to the action you should take, you should consult an appropriate financial adviser authorised under the 

FinancialServicesandMarketsAct2000. 

 

 

Furthercopiesofthisdocumentmaybeobtainedfrom: 

 

DowningLLP NVMPrivateEquityLimited 

10LowerGrosvenorPlace 

NorthumberlandHouse 

London 

PrincessSquare 

SW1W0EN 

NewcastleuponTyne 

 

NE18ER 

 

telephone: 02074167780 01912446000 

email: vct@downing.co.uk n3vct@nvm.co.uk

Risk factors 

 

YourcapitalisatriskifyouinvestintheCompanyandyoumaylosesomeorallofyourinvestment. 

 

The Company’s business, financial condition or results could be materially and adversely affected by any of the risks 

describedbelow.Insuchcases,themarketpriceoftheOfferSharesmaydeclineduetoanyoftheserisksandInvestors 

mayloseallorpartoftheirinvestment.AdditionalrisksanduncertaintiesnotpresentlyknowntotheDirectors,orthatthe 

Directors currently deem immaterial, may also have an adverse effect on the Company. The Directors consider the 

followingtobeallthematerialknownrisksforpotentialInvestorsintheCompany,buttheriskslisteddonotnecessarily 

compriseallthoseassociatedwithaninvestmentintheCompany: 

 

ThevalueofOfferSharesandtheincomederivedfromthemmaygodownaswellasupandShareholdersmaynot 

receivebackthefullamountinvested. 

Shareholders should be aware that the sale of Offer Shares within five years of their subscription will require the 

repayment of some or all of the 30% income tax relief obtained upon investment. Accordingly, investment in the 

Companyisnotsuitableasashortormediumterminvestment. 

There is no guarantee that the Company’s objectives will be met or that suitable investment opportunities will be 

identified. 

The majority of the Company’s investments will be in small companies whose securities are not publicly traded or 

freely marketable and may, therefore, be difficult to realise. Such businesses may well be in high risk sectors and 

wouldthereforebeexposedtogreaterrisksthanestablishedbusinesses.Inaddition,suchcompaniesgenerallyhavea 

higherriskprofilethanlargercompaniesandmayalsohavelimitedtradingrecords. 

AlthoughtheOfferShareswillbeListed,itisunlikelythataliquidmarketintheOfferShareswilldevelopastheinitial 

incometaxreliefisonlyavailabletothosesubscribingfornewsharesandtheremayonlybeonemarketmaker.It 

may,therefore,provedifficultforShareholderstoselltheirOfferShares.Inaddition,thereisnoguaranteethatthe 

marketpriceoftheOfferShareswillfullyreflecttheirunderlyingNAVortheabilitytobuyandsellatthatprice.It 

shouldbenotedthatsharesheldinaVCTusuallytradeatadiscounttotheVCT’sNAV. 

ThepastperformanceofinvestmentsmadebytheCompanyorotherfundsmanagedbyNVMshouldnotberegarded 

asanindicationofthefutureperformanceofinvestmentsmadebytheCompany. 

AlthoughitisintendedthattheCompanywillbemanagedsoastocontinuequalifyingasaVCT,thereisnoguarantee 

thatsuchstatuswillbemaintained.FailuretodosocouldresultinadversetaxconsequencesforInvestors,including 

beingrequiredtorepayuptothefull30%incometaxrelief. 

TheCompany’sabilitytoobtainmaximumvaluefromitsinvestments(forexample,throughtheirsale)maybelimited 

bytherequirementsoftherelevantVCTlegislationinordertomaintaintheVCTstatusoftheCompany(suchasthe 

obligationtohaveatleast70%byvalueofitsinvestmentsinQualifyingInvestments). 

Thelevelsandbasesofreliefsfromtaxationmaychangeandcouldapplyretrospectively.Thetaxreliefsreferredtoin 

thisdocumentarethosecurrentlyavailableandtheirvaluedependsontheindividualcircumstancesofInvestors.The 

Company’sobjectiveshavebeensetonthebasisthatallInvestorsobtain30%incometaxreliefontheirsubscriptions. 

Therefore,thisinvestmentmaynotbesuitableforInvestorswhodonotqualifyforthefull30%incometaxrelief. 

ChangesinlegislationinrespectofVCTsingeneral,andQualifyingInvestmentsandqualifyingtradesinparticular,may 

restrictoradverselyaffecttheabilityoftheCompanytomeetitsobjectivesand/orreducethelevelofreturnswhich 

wouldotherwisehavebeenachievable. 

TheCompany’sabilitytomakemarketpurchasesofitsownShareseachyearmaybelimitedbytheliquidityofthe 

Company,therulesoftheUKListingAuthority,theActandtheVCTRegulations. 

The Offer Shares are being issued at a price, calculated by a formula, based on the latest published NAV of the 

Company.ThemostrecentpublishedunauditedNAVoftheCompanywasat31December2011;Investorsshouldbe 

awarethatifarevisedNAVispublishedduringthecourseoftheOffer,Investorsmayreceiveadifferentallocationof 

OfferSharesfromthatanticipated. 

 

PotentialInvestorsshouldconsulttheirprofessionaladvisersbeforemakinganyinvestmentdecision. 

Northern 3 VCT PLC 1

Letter from the Chairman 

 

Northern3VCTPLC 

 

RegisteredinEnglandandWalesno:4280530 

 

 

NorthumberlandHouse,PrincessSquare 

 

NewcastleuponTyneNE18ER 

 

Telephone:01912446000 

 

Email:n3vct@nvm.co.uk 

 

 

21February2012 

 

DearInvestor 

 

Northern3VCT,whichwaslaunchedin2001,hasarecordofpayingconsistentdividendswhilstseekingtomaintainits 

netassetvalue.SomeofthekeypointsoftheOfferaresetoutbelow. 

 

Income–7.2%targettaxfreeyield:TheBoardhasastatedobjectiveofpayingannualdividendsofatleast5.0pper 

Share,subjecttotheavailabilityofsufficientdistributableprofits.Anannualdividendof5.0pperSharerepresentsa 

taxfreeyieldof7.2%perannum(grossequivalentof9.6%toa40%taxpayer)ontheInitialOfferPricenetof30%tax 

relief.Itshouldbenotedthatthislevelofdividendisnotguaranteed.ThefirstdividendpayableontheOfferShares 

willbethefinaldividendinrespectoftheyearending31March2012,whichisexpectedtobepaidinJuly2012. 

 

Investmentprospects:TheCompanyholds45investmentsinarangeofindustrysectors,manyofwhicharetrading 

successfully and generating capital growth and income for the Company. Many of the companies have low bank 

borrowings and strong cash flow; we see future prospects for growth despite the difficult conditions in the UK 

economyandfinancialmarkets.SubscribersundertheOfferwillacquireanimmediateexposuretotheseholdings, 

whichshoulddiversifyriskandprovidethepotentialforearliergrowthinthevalueoftheirinvestmentcomparedto 

somenewlylaunchedVCTs. 

 

Taxrelief:30%incometaxreliefwillbeavailableonOfferSharesprovidedtheyareheldforatleastfiveyears,and 

dividends and gains from VCTs are taxfree. It should be noted that the tax reliefs are subject to change and 

withdrawal (in the event of a breach of the VCT rules) and the value to Investors will depend on their personal 

circumstances. 

 

Experiencedmanager:TheNVMPrivateEquityinvestmentteamhasbeeninvestinginunlistedUKcompanies(private 

equity) for over 27 years and has over £200 million of funds under management. The team has wide industry 

experienceandagoodrecordoffindingbusinessesthathavegrowthpotential,seekingeitherdevelopmentcapitalor 

managementbuyoutfunding. 

 

Furtheroffer:IfthisOfferisfullysubscribed,itistheDirectors'intentiontoopenanotherofferforsubscriptiononor 

after 23March2012, to raise up to a further £1,600,000. Any Investor whose application is unsuccessful due to 

oversubscriptionofthecurrentOfferwillbegivenpriorityifanotherofferforsubscriptionislaunchedinthe2011/12 

taxyear. 

 

Nextsteps:Inordertoinvest,pleasereadthisOfferDocumentandthencompletetheApplicationForm,whichisset 

outattheendofthisdocument.IfInvestorshaveanyquestionsregardingthisinvestmenttheyshouldcontacttheir 

ownindependentfinancialadviser.Investors’attentionisdrawntotheriskfactorssetoutonpage1ofthisdocument. 

Forquestionsrelatingtoanapplication,pleasetelephoneNVMon01912446000.Investorsshouldnotethattheir 

capitalisatriskiftheyinvestintheCompanyandtheymaylosesomeoralloftheirinvestment.Noinvestmentadvice 

canbegivenbyNVM. 

 

Yourssincerely 

 

JamesFerguson 

Chairman,Northern3VCTPLC 


Part I – The Company 

Introduction 

 

Investors who subscribe for Offer Shares benefit from having immediate exposure to the Company's existing mature 

venture capital portfolio, which as at 31 December 2011 consisted of 45 different investments, with an unaudited 

aggregatecarryingvalueof£28.5million. 

 

 

Income 

 

The Board has a stated objective of paying annual dividends of at least 5.0p per Share, subject to the availability of 

sufficientdistributableprofits.SetoutbelowisatableillustratingthereturnstoShareholdersonOfferSharesassumingan 

annualdividendof5.0pperOfferShareispaid.Investorsshouldnotethatthetargetminimumannualdividendof5.0pper 

OfferShareisanobjectiveandisnotguaranteed. 

 

IllustrativeyieldperOfferShare(after30%incometaxrelief) 

 

Netoftaxoffer Targetannual Taxfree 

Grossequivalentyield 

price 1 

dividends 

yield 

40%taxpayer 2 50%taxpayer 2 

 

69.3p 5.0p 7.2%p.a. 9.6%p.a. 11.3%p.a. 

 

 

1 

ThereturnslistedarebasedontheInitialOfferPriceof99.0pmultipliedby70%,toreflectinitialincometaxreliefof30%.Investorsshouldnotethat 

theywillberequiredtopaythefullOfferPriceandclaimtheincometaxreliefseparately. 

2 

ThegrossequivalentyieldistheyieldonanonVCTUKdividendthatwouldresultinanetyieldof7.2%(beinga5.0pdividenddividedby99.0p,the 

InitialOfferPrice,less30%toreflectinitialincometaxrelief),assuminga40%taxpayerand50%taxpayerrespectively. 

 

Subscribers under the Offer will be eligible forthe final dividend in respect ofthe year ended31 March 2012, which is 

expectedtobepaidinJuly2012.TheCompanypaysdividendsbiannually,usuallyinJanuaryandJulyeachyear. 

 

 

Taxation benefits to Investors (see Part III for further details) 

 

TheprincipalUKtaxreliefs,whichareavailableonamaximuminvestmentof£200,000perindividualinthe2011/12tax 

year,areasfollows: 

Incometaxreliefat30%oftheamountsubscribedprovidedthattheVCTsharesareheldforatleastfiveyears.Relief 

isrestrictedtotheamountwhichreducestheInvestor’sincometaxliabilitytonil. 

Taxfreedividends,whichmayincludecapitaldistributions,fromaVCT. 

CapitalgainstaxexemptiononanygainsarisingonthedisposalofVCTshares. 

 

Thetablebelowshowstheeffectoftheinitial30%incometaxrelief(basedontheInitialOfferPriceof99.0p): 

 

Effectoftheinitialincometaxrelief 

perShare 

Costofinvestment 

Grossinvestment 99.0p 

 

30%incometaxrelief (29.7p) 

 

Netoftaxcostofinvestment 69.3p 

 

Initialvalueofinvestment 

 

GrosssubscriptionbyInvestor 99.0p 

 

EffectofissuecostsandtheroundingupoftheInitialOfferPrice (5.5p) 

 

InitialNetAssetValue 93.5p 

 

Initial“uplift”(pence) +24.2p 

 

Initial“uplift”(%) +34.9% 

 

Theabovetableshowsthat,basedontheInitialOfferPriceof99.0p per Offer Share and incometaxreliefat30%,theInvestor’snetoftaxcostof 

investmentis69.3pperOfferShareandtheinitialNAVis93.5p(at31December2011,adjustingfortheinterimdividend)perOfferShare,an“uplift”of 

24.2pperOfferShareor34.9%.InvestorsarerequiredtoholdOfferSharesforatleastfiveyearsinordertoretaintheincometaxreliefand,assuch, 

thisinitialupliftcannotbeimmediatelyrealised.ItshouldbenotedthatthepriceachievableonthesaleoftheOfferSharesislikelytobelowerthan 

theapplicableNAVbecausetheCompany’sSharestradeatadiscounttoitsNAV. 

(Source:Downing) 

 


OnlyaverybriefsummaryoftheUKtaxpositionofinvestorsinVCTs,basedontheCompany'sunderstandingofcurrent 

law and practice, is provided on the page opposite. Further details are set out in Part III of this document. Potential 

Investorsarerecommendedtoconsulttheirownappropriateprofessionaladvisersastothetaxationconsequencesof 

theirinvestinginaVCT.Inaddition,theavailabilityoftaxreliefsdependsontheinvesteecompaniesmaintainingtheir 

VCTqualifyingstatus. 

 

 

VCTs to assist in retirement planning 

 

TheBoardbelievesthataninvestmentintheCompanycouldbeusedinconjunctionwithpensionsforretirementplanning 

forcertainInvestorsforthefollowingreasons: 

 

i) IncomereceivedfromtheCompanywillbetaxfree. 

ii) FromApril2011,theannualpensioncontributionallowancewasreducedto£50,000forallindividuals.Fulltaxreliefat 

anindividual'smarginalrateisallowableonthecontributionpaiduptothisannualallowance. 

 

ThetablebelowprovidesacomparisonofthetaxreliefsofVCTsandpensionsforillustrativepurposesonly. 

 

ComparisonofVCTsandPensions 

 

VCT Pension 

 

 

Effectivetaxrelief 30% 20%50% 

 

 

Income Taxfree 25%offundcanbetakenasataxfreecashsum 

when benefits are taken (no requirement to 

retire).Balanceoffundusedtoprovidepension 

income, which is subject to tax as earned 

income 

 

 

Capitalgains Taxfree Taxfreewithinpensionfund 

 

 

Minimumholdingperiod 

 

Shares can be sold at any time, 

however,a5yearholdingperiodis 

required to retain tax reliefs 

obtainedonsubscription 

 

Individual cannot receive benefits (e.g. taxfree 

cash or taxed income) until at least age 55, as 

setoutonthebasisabove 

Accesstocapital Yes Not untilbenefitsaretaken 

 

 

Maximumannualinvestment £200,000 Up to £50,000 per tax year with the ability to 

carry forward any unused relief from the 

previousthreeyears. 

 

 

Maximumtotalinvestment Nolimit £1,800,000 (reduces to £1,500,000 in April 

2012) 

 

 

TheabovefiguresassumethattheShareholderandtheVCTqualifyforallapplicabletaxreliefs. 

 

ItshouldbenotedthatVCTsarehigherriskinvestmentsandshouldnotbeconsideredasareplacementforpensions. 

Investorsshouldtakeindependentfinancialadvicebeforemakinganyinvestmentdecision. 

 

 

The Manager: NVM Private Equity 

 

Introduction 

The Company’s venture capital investment portfolio is managed by NVM, which specialises in investing in smaller UK 

companiesofthetypequalifyingundertheVCTlegislation.NVMwasestablishedin1988bytheexecutiveteampreviously 

employeddirectlybyNorthernInvestorsCompanyandcurrentlymanagesfundsinexcessof£200millionthroughitsoffices 

inNewcastleuponTyne,ReadingandManchester. 

 

NVM’s11investmentexecutiveshavetogetheratotalofover185years’experienceintheventurecapitalindustry.NVMis 

authorisedandregulatedbytheFinancialServicesAuthorityundernumber141943andisamemberoftheBVCA.NVM’s 

teamofinvestmentprofessionalsaimstoensurethattheCompanygainsaccesstosomeofthebestopportunitiesavailable 

totheindustryand,bycarryingoutextensiveduediligenceprocedures,seekstoidentifythosecompanieswhichpotentially 

offerthebestpossiblerisk/returnscenarios.NVMgeneratesover200investmentopportunitiesayearbutlessthan2%of 

theseopportunitiesareinvestedinbytheCompanyandtheotherfundsmanagedbyNVM(source:NVM). 

 

 


Track Record of the Manager 

NVMmanagesthreegeneralistVCTsandNorthernInvestorsCompany,ageneralistprivateequityinvestmenttrust.The 

respectiveunauditedreturnsofthesecompaniestoinvestorswhosubscribedatlaunchareasfollows: 

 

TrackRecordofNVM’sGeneralistVCTFunds 

 

 

Taxyearof 

launch 

Net 

cost 1 

Latest 

NAVdate 

Totalreturn 

todate 2 

 

Increase 

overnetcost(%) 

 

NorthernVentureTrustPLC 1995/96 80p 31December2011 185.3p +131.6% 

 

Northern2VCTPLC 1998/99 80p 31December2011 136.3p +70.4% 

 

Northern3VCTPLC 2001/02 80p 31December2011 126.9p +58.6% 

 

1 Netcostistheinitialofferpriceof100ppersharelesstheincometaxreliefavailabletoinvestorsineachoftheVCTs. 

2 Totalreturniscumulativedividendspaid(includingthetaxcreditswherereclaimable)plusthemostrecentlyannouncedunaudited 

netassetvalueforeachVCTinpencepershare. 

(Source:announcementsmadebytherelevantVCTthroughanRIS) 

TrackRecordofNVM’sGeneralistInvestmentTrust 

Yearofflotation Netassetvalue 

atflotation 1 

Cumulative 

returntodate 2 

 

Increaseover 

netassetvalueat 

flotation(%) 

 

NorthernInvestorsCompanyPLC 1990 61.6p 395.2p +541.6% 

 

1 Adjustedtoreflect4for1divisionofordinarysharesin2005. 

2 Cumulativedividendspaidsinceflotation,adjustedfor4for1divisionofordinarysharesin2005,plusunauditednetassetvalueasat 

31December2011. 

(Source:announcementsmadebyNorthernInvestorsCompanythroughanRIS) 

 

PleasenotethatthepastperformanceoftheManagerandofthefundsitmanagesmaynotberepeatedandisnota 

guidetothefutureperformanceoftheCompanyandnoprojectionisimpliedorshouldbeinferred. 

 

Deal Flow 

TheBoardconsidersstrongdealflowtobeofvitalimportancetothefutureperformanceoftheCompany.TheManager’s 

credentialsareasfollows: 

Since 1 January 2005, funds managed by NVM have invested approximately £140 million in VCTqualifying 

companies. 

 

NVMhasaregionalnetworkof11executivesbasedinmajorbusinesscentresacrosstheUK. 

 

 

Investment policy 

 

The net proceeds of the Offer will be invested by the Company in accordance with its stated investment policy. The 

Company'sobjectiveistoprovidehighlongtermtaxfreereturnstoitsShareholdersthroughacombinationofdividend 

yieldandcapitalgrowth. 

 

The Company is a Venture Capital Trust approved by HM Revenue & Customs and the Directors intend to conduct the 

affairsoftheCompanysothattheconditionsforapprovalasaVCTwillcontinuetobesatisfied.TheDirectorsintendthat 

the longterm disposition of the Company's assets will be approximately 80% in a portfolio of mainly VCTqualifying 

unquoted and AIM investments and 20% in other investments (including but not restricted to listed fixedinterest 

securities),toprovideareserveofliquiditywhichwillmaximisetheCompany'sflexibilityastothetimingofinvestment 

acquisitionsanddisposals,dividendpaymentsandsharebuybacks. 

 

ThetargetsizerangeforindividualVCTqualifyinginvestmentsisfromapproximately£250,000to£1millionwithinanytax 

year,withanoverallmaximumof£3million. 

 

TheDirectorsconsiderthattheabilitytoinvestjointlywithotherfundsmanagedbytheManagerisdesirablebecauseitwill 

enabletheCompanytoparticipateinlargerinvestmentsthanthosewhichitcouldundertakeusingonlyitsownresources. 

IthasbeenagreedthatwhereajointinvestmentopportunityarisesbetweentheCompanyandotherfundsmanagedby 

NVM, an investment allocation will be offered to each party pro rata to their respective net assets at the time of 

investment.Anycostsassociatedwithanysuchinvestmentwillbebornebytherelevantpartyproratatoitsrespective 

investment. 


ThefullinvestmentpolicyfortheCompanycanbefoundinitsannualreportfortheyearended31March2011,whichis 

availableontheNVMwebsite(www.nvm.co.uk)oronrequestfromNVMbytelephoning01912446000. 

 

 

Share buyback policy 

 

TheCompanywishestoensurethatthereisliquidityinitsSharesand,accordingly,theCompanypursuesanactivediscount 

management policy. The Company will endeavour to buy back those Shares which its Shareholders wish to sell, at a 

discountof15%tothelatestpublishedNAV,subjecttoapplicablelegislationgoverningtheCompany,marketconditionsat 

thetimeandtheCompanyhavingbothfundsanddistributablereservesavailableforthepurpose.Shareswhicharebought 

backmaybecancelledorheldintreasuryandlatersoldinthemarket.ThebuybackpolicyoftheCompanyaimstosupport 

thesharepricebylimitingthediscounttoNAVatwhichitsSharestrade.Themakingandtimingofanysharebuybackswill 

remainattheabsolutediscretionoftheBoard. 

 

 

Directors 

 

ProfilesoftheDirectorscanbefoundintheCompany'sannualreportfortheyearended31March2011,whichisavailable 

ontheNVMwebsite(www.nvm.co.uk)oronrequestfromNVMbytelephoning01912446000. 

 

 

Costs 

 

Offer Costs 

TheCompanyhasagreedtopayDowninganinitialfeeof5.5%ofthemoniesraised,togetherwithanannualcommissionof 

0.25%ofthemoniesraisedforaperiodoffiveyears.Outofthesefees,Downingwillberesponsibleforpayingallthecosts 

oftheOffer. 

 

Management and Administration Costs 

NVM is the Manager of the Company's venture capital investments and receives an annual management fee, payable 

quarterly in advance, at the rate of 2.06% of net assets, calculated at halfyearly intervals. An additional performance 

relatedfeemaybecomepayableifpredeterminedperformancetargetsareachieved.NVMalsoprovidessecretarialand 

administration services to the Company for an annual fee currently of £48,000 per annum (rising annually with the 

movementintheUKIndexofRetailPrices). 

 

TheAnnualRunningCostsoftheCompanyarecappedat3.5%ofitsNetAssets,anyexcessbeingbornebytheManagerby 

wayofareductionofitsfees. 

 

TheCompanyhasestablishedamanagementperformanceincentiveschemeunderwhichNVM'sexecutivesarerequiredto 

investpersonally(andonthesametermsastheCompanyandotherfundsmanagedbyNVM)intheordinarysharecapital 

ofinvesteecompaniesinwhichtheCompanyinvests.TheDirectorsreviewtheoperationoftheschemeannually. 

 

 

Other information 

 

The Offer and Minimum and Maximum Subscription 

ApplicantsareencouragedtosubmittheirApplicationFormsearlyinordertobeconfidentthattheirapplicationswillbe 

successful,asOfferShareswillgenerallybeallottedona“firstcome–firstserved”basis,subjecttotheabsolutediscretion 

oftheBoardoftheCompany. 

 

Sharecertificates(whereapplicable)andcertificatestoenableaclaimforincometaxrelieftobemadeinrespectofOffer 

Shares will be posted to Shareholders within 30 days of each allotment. No notification will be made to successful 

applicants prior to despatch of definitive share certificates. Prior to despatch of definitive share certificates (where 

applicable),transfers(ifany)willbecertifiedagainsttheregister. 


Pricing of the Offer 

TheOfferShareswillbeissuedatapricecalculatedonthebasisofaformulabasedonthelatestpublishedNAVdividedby 

0.945toallowforissuecostsof5.5%oftheamountraisedundertheOffer,roundeduptothenearestwholepennyper 

OfferShare.Accordingly,thenetproceedsoftheOfferwillbeapproximately94.5%oftheamountsubscribed. 

 

OnthebasisofthelatestpublishedNAVoftheCompanyasat31December2011of95.5pperShare,andafterdeducting 

theinterimdividendof2.0ppersharedeclaredinrespectoftheyearending31March2012whichwaspaidon13January 

2012,theInitialOfferPricewillbe99.0pperShare.BasedontheInitialOfferPrice,upto2,020,202OfferShareswillbe 

issued. 

 

TheactualissuepricemaybehigherorlowerthanthisandwillbedeterminedbythelatestpublishedNAVonthebusiness 

daypriortoallotmentoftheOfferShares.SettingtheissuepriceinaccordancewiththePricingFormulahasbeendesigned 

toavoidanydilutionoftheNAVattributabletoeachExistingSharewhentheOfferSharesareissued. 

 

TheapplicationofthisPricingFormulaavoidsthenecessitytoannouncetheissuepriceoftheOfferShareswhentheyare 

beingallottedduringtheperiodoftheOffershouldanewNAVbeannouncedorotherwisepublished. 

 

Commission 

Downing will be responsible for commissions payable to authorised financial advisers on successful applications bearing 

their stamp. Authorised financial advisers will be paid by Downing out of its capital raising fees an initial commission 

usually of 2.25% of the amount invested by their clients. Additionally, provided that the authorised financial adviser 

continuestoactfortheclientandtheclientcontinuestobethebeneficialowneroftheShares,theauthorisedfinancial 

advisers will usually be paid an annual trail commission of 0.25% of their clients' gross subscription for five years. Trail 

commissionwillbepaidannuallyinJuly(commencingJuly2013).Authorisedfinancialadvisersmayagreetowaivepartor 

alloftheirinitialcommission.Insuchcircumstances,anInvestor'sapplicationwillattractanadditionalallotmentofOffer 

SharesatnogreatercosttotheCompanyortheInvestorandthecommissionwaivedwillbeusedtosatisfythepurchase 

priceofsuchOfferShares. 

 

 

 


PART II – Track record of the Company 

Northern3VCTPLCwasincorporatedin2001. 

 

ThefinancialperformanceoftheExistingSharesoverthelastfivefinancialperiodsissummarisedbelow. 

 

TheCompany–DividendsandTotalReturn 

 

Periodended 

 

31December 31March 

2011 1 2011 

31March 

2010 

31March 

2009 

 

31March 

2008 2 

Dividendspershare 

 

Dividendsdeclaredinrespectoftheperiod 3 2.0p 4.5p 4.0p 4.0p 6.0p 

Cumulativedividendsdeclaredsinceinception 33.4p 31.4p 26.9p 22.9p 18.9p 

 

TotalReturnpershare 

 

Netassetvaluepluscumulativedividendspaid 126.9p 121.1p 115.1p 104.9p 115.2p 

 

1. Unauditedfiguresforninemonthperiod. 2. Eighteenmonthperiod. 3. Dividendshavebeenlistedagainsttheperiodtowhichtheyrelate. 

 

 

Recent substantial investments by the Company 

 

In December 2011 NVM funds invested £3 million in Lineup Systems, of which 

Northern3VCTinvested£974,000.LineupSystemsdeliverscollaborativeadvertising 

booking, management, analytics and customer relationship management tools for 

multichannelmediacompanies.NVM'sinvestmentwillhelpfundthedevelopment 

ofnewmediaadvertisingproductsandsupportgrowthininternationalsaleswhilst 

maintaininghighstandardsofcustomerservice. 

 

 

 

 

 

 

KitwaveOne 

 

 

In June 2011 NVM funds committed £6 million to Tinglobal Holdings, of which 

Northern 3 VCT invested £988,000. Tinglobal specialises in the sale and 

refurbishment of midtohigh end second user IT equipment. NVM’s investment is 

fundingthemanagementbuyoutofthecompanyandprovidesthecapitaltoexpand 

theirproductandserviceofferingsglobally. 

 

InMarch2011NVMfundsinvested£7.5millioninKitwaveOne,ofwhichNorthern3 

VCTinvested£1.0million.Kitwaveisalocalwholesaleroffastmovingconsumable 

goods to the convenience store sector. NVM’s investment is funding a growth 

strategytoacquirebusinesseswithsimilarproductrangesandcustomerbases. 

 

In March 2011 NVM funds invested £6 million in Control Risks Group Holdings, of 

whichNorthern3VCTinvested£746,000.ControlRisksisanindependentspecialist 

risk consultancy offering a range of services to enable its clients to succeed in 

complex or hostile business environments. NVM’s investment will provide the 

supporttodrivethestronggrowthofthebusinessininternationalmarkets. 

 

In December 2010 NVM funds invested £4 million in Cawood Scientific, of which 

Northern 3 VCT invested £825,000. Cawood is a provider of analytical laboratory 

testing services to landbased industries. NVM’s investment is funding the 

management buyout and providing capital for the independent growth of the 

company’sservicesacrosstheUKandEurope. 

 

 

 

Asat31December2011,theCompany’sventurecapitalportfoliocomprised45investmentswithanunauditedaggregate 

valueof£28.5million. 

 

 

 


Part III – Taxation 

VCTs:Summaryoftheapplicablelegislationinrespectofinvestors 

1. TaxationofaVCT 

VCTsareexemptfromcorporationtaxonchargeablegains.ThereisnorestrictiononthedistributionofrealisedcapitalgainsbyaVCT,subjecttothe 

requirementsofcompanylaw.TheCompanywillbesubjecttocorporationtaxonitsincome(excludingdividendsreceivedfromUKcompanies)after 

deductionofattributableexpenses. 

2. Taxreliefsforindividualinvestors 

IndividualswhosubscribeforOfferSharesmustbeaged18orovertoqualifyforthetaxreliefsoutlinedbelow. 

Relieffromincometax 

Aninvestorsubscribingupto£200,000inthe2011/12taxyearforeligiblesharesinaVCTwillbeentitledtoclaimincometaxrelief,attherateof30%, 

althoughthisreliefwillbewithdrawnifeitherthesharesaresoldwithinfiveyearsortheinvestortakesoutaloanwhichwouldnothavebeenmade,or 

wouldnothavebeenmadeonthesameterms,savefortheacquisitionofsuchshares.Reliefisrestrictedtotheamountwhichreducestheinvestor's 

incometaxliabilitytonil.However,taxcreditsondividendsarenotionalandcannotberepaidand,therefore,investorsshouldtakethisintoaccount 

whencalculatingthevalueoftheincometaxrelief. 

Claimingincometaxrelief 

InvestorswillreceiveacertificatefromtheCompanywithin30daysoftheirSharesbeingissued,whichwillenablethemtoclaimthetaxrelief.Income 

taxreliefcanbeclaimedbyanInvestorwritingtotheirHMRevenue&Customsoffice,requestingthattheirtaxcodebeamended,sothatthetaxrelief 

isreceivedeachmonththroughthePAYEsystem.Investorswhopaytheirtaxininstalmentsmaybeabletoapplyforareductionintheirpaymentson 

account.Alternatively,anInvestorcanclaimthereliefthroughtheirtaxreturninrespectofthetaxyearinwhichtheShareshavebeensubscribed. 

Dividendrelief 

AninvestorwhosubscribesfororacquireseligiblesharesinaVCT(uptoamaximumof£200,000inthe2011/12taxyear)willnotbeliableforUK 

incometaxondividendspaidbytheVCT.TheincomereceivedbytheVCTwillusuallyconstituteeitherinterest(onwhichtheVCTmaybesubjecttotax) 

or dividends from UK companies (on which the VCT would not be subject to tax). The VCT's income, reduced by the payment of tax (if applicable) 

togetherwithitsrealisedcapitalgains,canthenbedistributedtaxfreetoinvestorswhobenefitfromthisdividendrelief.Thereisnowithholdingtaxon 

dividendspaidbyaUKcompanyandconsequentlytheCompanydoesnotassumeresponsibilityforthewithholdingoftaxatsource.Dividendscarrya 

taxcreditattherateofoneninthofthenetdividendwhichisnotrepayableandwhichcannotbeutilisedinanyotherway. 

Capitalgainstaxrelief 

AdisposalbyanindividualinvestorofhissharesinaVCTwillgiverisetoneitherachargeablegainnoranallowablelossforthepurposesofUKcapital 

gainstax.Thisreliefisalsolimitedtodisposalsofsharesacquiredwithinthe£200,000limitdescribedabove. 

Lossoftaxreliefs 

(i) IfacompanywhichhasbeengrantedapprovalorprovisionalapprovalasaVCTsubsequentlyfailstocomplywiththeconditionsforapproval,VCT 

statusmaybewithdrawnortreatedasneverhavingbeengiven.Theexemptionsfromcorporationtaxoncapitalgainswillnotapplytoanygain 

realisedafterVCTstatusislost(nortoanygainrealisedbytheVCTifapprovalisdeemednevertohavebeengiven). 

(ii) Forinvestors,thewithdrawalofVCTstatusmay(dependinguponthetimingofsuchwithdrawal)resultin: 

repaymentofthe30%incometaxreliefonsubscriptionfornewVCTshares; 

incometaxbecomingpayableonsubsequentpaymentsofdividendsbythecompany;and 

aliabilitytotaxoncapitalgainsbeingsufferedinthenormalwayonthedisposalofsharesinthecompany,exceptthat anypartofthegain 

attributabletotheperiodforwhichtheVCTwasapprovedwouldbeexempt. 

(iii) TheconsequencesforinvestorsinacompanywhichneverobtainsfullunconditionalapprovalasaVCTareasfollows: 

repaymentofthe30%incometaxreliefonsubscriptionsfornewVCTsharesandinterestonoverduetaxmayarise; 

incometaxbecomingpayableonallpaymentsofdividendsbythecompany;and 

anygainarisingonadisposaloftheshareswouldbeliabletocapitalgainstaxandlossesontheshareswouldbeallowablelossesforcapitalgains 

taxpurposes. 

TheOfferSharesareeligibleVCTsharesforthepurposesofthissection. 

3. ConsequencesofaninvestordyingoratransferofSharesbetweenspouses 

(i) Initialincometax 

IfaninvestordiesatanytimeaftermakinganinvestmentinaVCT,thetransferofsharesondeathisnottreatedasadisposaland,therefore,the 

initialincometaxreliefisnotwithdrawn.However,theshareswillbecomepartofthedeceased'sestateforinheritancetaxpurposes. 

(ii) Taximplicationsforthebeneficiary 

Providedanumberofconditionsaremet,thebeneficiaryofanyVCTshareswillbeentitledtotaxfreedividendsandwillnotpaycapitalgainstax 

onanydisposal,butwillnotbeentitledtoanyinitialincometaxrelief. 

(iii) Transferofsharesbetweenspouses 

TransfersofsharesinaVCTbetweenspousesisnotdeemedtobeadisposalandthereforealltaxreliefswillberetained. 

4. General 

(i) InvestorswhoarenotresidentintheUK 

Nonresidentinvestors,orinvestorswhomaybecomenonresident,shouldseektheirownprofessionaladviceastotheconsequencesofmaking 

aninvestmentintheCompany,becausetheymaybesubjecttotaxinotherjurisdictions. 

(ii) Stampdutyandstampdutyreservetax 

Nostampdutyor(unlesssharesinaVCTareissuedtoanomineeforaclearingsystemoraproviderofdepositoryreceipts)stampdutyreservetax 

willbepayableontheissueofsuchshares.Thetransferonthesaleofshareswouldnormallybesubjecttoadvaloremstampdutyor(ifan 

unconditional agreement to transfer such shares is not completed by a duly stamped transfer within two months) stamp duty reserve tax 

generally,ineachcaseattherateof50pforevery£100orpartof£100oftheconsiderationpaidwherethetotalconsiderationexceeds£1,000or 

ifitformspartofaseriesoftransactionswherethetotalconsiderationexceeds£1,000.Suchdutieswouldbepayablebyapersonwhopurchases 

suchsharesfromtheoriginalsubscriber. 

(iii) Purchasesinthemarketafterlisting 

Any subsequent purchaser of existing VCT shares, as opposed to a subscriber for new VCT shares, will not qualify for income tax relief on 

investmentbutmaybenefitfromdividendreliefandfromcapitalgainstaxreliefonthedisposalofhisVCTshares. 

(iv) TheVCTRegulations2004 

TheVCTRegulationscameintoforceon17October2004.UndertheVCTRegulations,moniesraisedbyanyfurtherissueofsharesbyanexisting 

VCTmustbeappliedbythatVCTforqualifyingpurposes.Ifanyofthemoneyraised(exceptforamountswhichHMRevenue&Customsagreesare 

insignificantinthecontextofthewholeissuedordinarysharecapitaloftheVCT)isusedbytheVCTtopurchaseitsownsharesthenthefundsmay 

bedeemedtonothavebeenusedforaqualifyingpurpose. 

 

TheaboveisonlyasummaryofthetaxpositionofindividualinvestorsinVCTsandisbasedontheCompany’sunderstandingofcurrentlawand 

practice.InvestorsarerecommendedtoconsultaprofessionaladviserastothetaxationconsequencesoftheirinvestinginaVCT.Alltaxreliefs 

referredtointhisdocumentareUKtaxreliefsandaredependentoninvesteecompaniesmaintainingtheirVCTqualifyingstatus. 


Part IV – Definitions 

Where used in this document the following words and expressions will, unless the context otherwise requires, have the 

followingmeanings: 

 

"Act" 

CompaniesAct2006 

"Admission" 

"AIM" 

"AnnualRunningCosts" 

"Applicant" 

"ApplicationForm" 

"Articles" 

"Company"or"Northern3" 

"CREST" 

"Directors"or"Board" 

"Downing" 

"ExistingShares" 

"FSA" 

"InitialOfferPrice" 

"Investor" 

"ITA" 

"LondonStockExchange" 

"MLRegulations" 

"NAV"or“NetAssetValue” 

"NVM"or"Manager"or 

"NVMPrivateEquity" 

"Offer" 

"OfferDocument" 

"OfferShares" 

"OfficialList" 

"PricingFormula" 

"QualifyingInvestment" 

"Registrar" 

"RIS" 

"Shareholders" 

"Shares" 

"TotalReturn" 

"UKListingAuthority" 

"VCT" 

"VCTRegulations" 

 

admissionoftheOfferSharestotheOfficialListoftheUKListingAuthorityand 

to trading on the premium segment of the London Stock Exchange’s main 

marketforlistedsecurities 

AIM,amarketoperatedbytheLondonStockExchange 

annualcostsandexpensesincurredbytheCompanyintheordinarycourseofits 

business(includingirrecoverableVAT) 

InvestorwhosubscribesforOfferSharespursuanttotheOfferDocument 

formofapplicationforOfferSharesundertheOfferattachedtothisdocument 

articlesofassociationoftheCompany,asamendedfromtimetotime 

Northern3VCTPLC 

relevantsystem(asdefinedintheUncertificatedSecuritiesRegulations2001(SI 

2001 No. 3755)) for the paperless settlement of transfers and the holding of 

sharesinuncertificatedformwhichisadministeredbyEuroclearUK&Ireland 

Limited 

directorsoftheCompanyfromtimetotime 

Downing LLP, which is authorised and regulated by the Financial Services 

Authority 

ordinarysharesof5peachinthecapitalofNorthern3issuedatthedateofthis 

document(ISIN:GB0031152027) 

FinancialServicesAuthority 

99.0pperShare,beingthepriceatthedateoftheOfferDocument 

subscriberofShares 

IncomeTaxAct2007 

LondonStockExchangeplc 

MoneyLaunderingRegulations2007 

netassetvalueinpenceperShare 

NVMPrivateEquityLimitedwhichisauthorisedandregulatedbytheFinancial 

ServicesAuthority 

offerforsubscriptiontoraiseupto£2,000,000(beforeissuecosts) 

thisdocument 

new ordinary shares of 5p each in the capital of Northern 3 (ISIN: 

GB0031152027) to be issued pursuant to this or subsequent offers in the 

2011/12taxyear 

officiallistoftheUKListingAuthority 

mechanismbywhichthepricingoftheOffermaybeadjustedaccordingtothe 

latestpublishedNAV,asdescribedonpage7ofthisdocument 

investment in an unquoted trading company, which comprises a qualifying 

holdingforaVCTasdefinedinChapter4Part6ITA 

EquinitiLimited,AspectHouse,SpencerRoad,LancingBN996DA 

regulatoryinformationservice 

holdersofShares 

ExistingSharesorOfferShares,asthecontextmayrequire 

sumofNAVandthecumulativedividendspaidtoShareholdersperShare 

FSAactinginitscapacityasthecompetentauthorityforthepurposesofPartVI 

oftheFinancialServicesandMarketsAct2000 

venturecapitaltrustasdefinedinSection259ITA 

TheVentureCapitalTrust(WindingUpandMergers)(Tax)Regulations2004 


Part V – Terms and Conditions of Application 

1. In these Terms and Conditions of Application, the expression 

“OfferDocument”meansthisdocument,dated21February2012. 

Theexpression“ApplicationForm”meanstheapplicationformfor 

useinaccordancewiththeseTermsandConditionsofApplication. 

Savewherethecontentrequiresotherwise,thetermsusedinthe 

Application Form bear the same meaning as in the Offer 

Document. 

 

2. The right is reserved to reject any application or to accept any 

applicationinpartonly.Multipleapplicationsarepermitted.Ifany 

application is not accepted, or if any contract created by 

acceptancedoesnotbecomeunconditional,orifanyapplicationis 

scaled back or if in any other circumstances there is an excess 

payment in relation to an application, the application monies or 

thebalanceoftheamountpaidortheexcesspaidonapplication 

will be returned without interest by post at the risk of the 

Applicant.Inthemeantimeapplicationmonieswillberetainedin 

theCompany'saccountwithBarclaysBankPLC. 

 

3. You may pay for your application for Offer Shares by cheque or 

banker’sdraftsubmittedwiththeApplicationForm. 

 

4. Thecontractcreatedbytheacceptanceofapplicationsunderthe 

Offerwillbeunconditional. 

 

5. BycompletinganddeliveringanApplicationForm,you: 

(a) offertosubscribetheamountspecifiedonyourApplicationForm 

plus any commission waived for extra shares or any smaller 

amount for which such application is accepted at a price as 

determinedbythePricingFormulasubjecttotheOfferDocument, 

theseTermsandConditionsofApplication,andtheArticlesofthe 

Company; 

(b) authoriseyourfinancialadviser,orwhoeverheorshemaydirect, 

theRegistrarortheCompanytosendadocumentoftitlefor,or 

credit your CREST account in respect of, the number of Offer 

Shares for which your application is accepted, and/or a crossed 

cheque for any monies returnable, by post at your risk to your 

addressassetoutonyourApplicationForm; 

(c) inconsiderationoftheCompanyagreeingthatitwillnot,priorto 

the Offer closing, offer any Offer Shares for subscription to any 

personsotherthanassetoutintheOfferDocument,agreethat 

your application may not be revoked and that this paragraph 

constitutes a collateral contract between you and the Company 

which will become binding upon despatch by post or delivery of 

yourdulycompletedApplicationFormtotheCompanyortoyour 

financialadviser; 

(d) warrant that your remittance will be honoured on first 

presentation and agree that, if such remittance is not so 

honoured,youwillnotbeentitledtoreceiveasharecertificateor 

to enjoy or receive any rights or distributions in respect of such 

OfferSharesunlessanduntilyoumakepaymentinclearedfunds 

for such Offer Shares and such payment is accepted by the 

Company(whichacceptanceshallbeinitsabsolutediscretionand 

may be on the basis that you indemnify it against all costs, 

damages, losses, expenses and liabilities arising out of or in 

connectionwiththefailureofyourremittancetobehonouredon 

first presentation) and that at any time prior to unconditional 

acceptance by the Company of such late payment in respect of 

such Offer Shares, the Company may (without prejudice to its 

otherrights)treattheagreementtoallotsuchOfferSharesasvoid 

and may allot such Offer Shares tosome other person, in which 

caseyouwillnotbeentitledtoanyrefundorpaymentinrespect 

of such Offer Shares (other than return of such late payment at 

yourriskandwithoutinterest); 

(e) agreethatallchequesandbanker’sdraftsmaybepresentedfor 

paymentontheduedatesandanydefinitivedocumentoftitleand 

anymoniesreturnabletoyoumayberetainedpendingclearance 

of your remittance and the completion of any verification of 

identityrequiredbytheMLRegulationsandthatsuchmonieswill 

notbearinterest; 

(f) undertaketoprovidesatisfactoryevidenceofidentitywithinsuch 

reasonable time (in each case to be determined in the absolute 

discretion of the Company) to ensure compliance with the ML 

Regulations; 

(g) agree that, in respect of those Offer Shares for which your 

application has been received and processed and not rejected, 

acceptance of your application shall be constituted by the 

Company instructing the Registrar or the company secretary to 

enteryournameontheshareregister; 

(h) agree that all documents in connection with the Offer and any 

returnedmonieswillbesentatyourriskandmaybesenttoyouat 

youraddressassetoutintheApplicationForm; 

(i) 

(j) 

(k) 

(l) 

(m) 

(n) 

(o) 

(p) 

(q) 

(r) 

(s) 

(t) 

(u) 

(v) 

agree that, having had the opportunity to read the Offer 

Document, you shall be deemed to have had notice of all 

information and representations including the risk factors and 

investmentconsiderationscontainedtherein; 

confirmthat(saveforadvicereceivedfromyourfinancialadviser) 

inmakingsuchapplicationyouarenotrelyingonanyinformation 

and representation other than those contained in the Offer 

Document and you accordingly agree that (save in the event of 

fraud by that person) no person responsible solely or jointly for 

the Offer Document or any part thereof or involved in the 

preparation thereof will have any liability for any such other 

informationorrepresentation; 

agree that all applications, acceptances of applications and 

contractsresultingtherefromundertheOffershallbegovernedby 

andconstruedinaccordancewithEnglishlawandthatyousubmit 

to the jurisdiction of the English courts and agree that nothing 

shall limit the right of the Company to bring any action, suit or 

proceedings arising out of or in connection with any such 

applications, acceptances of applications and contracts in any 

other manner permitted by law or in any court of competent 

jurisdiction; 

irrevocablyauthorisetheCompany,theRegistrarorNVMorany 

otherpersonauthorisedbyanyofthem,asyouragent,todoall 

thingsnecessarytoeffectregistrationofanySharessubscribedby 

orissuedtoyouintoyournameandauthoriseanyrepresentatives 

oftheCompany,theRegistrarorNVMtoexecuteanydocuments 

required thereof and to enter your name on the register of 

membersoftheCompany; 

agreetoprovidetheCompanywithanyinformationwhichitmay 

requestinconnectionwithyourapplicationortocomplywiththe 

VCTregulationsorotherrelevantlegislation(asthesamemaybe 

amended from time to time) including without limitation 

satisfactoryevidenceofidentitytoensurecompliancewiththeML 

Regulations; 

warrant that, in connection with your application, you have 

observed the laws of all requisite territories, obtained any 

requisite governmental or other consents, complied with all 

requisite formalities and paid any issue, transfer or other taxes 

dueinconnectionwithyourapplicationinanyterritoryandthat 

you have not taken any action which will or may result in the 

Company,NVMorDowningactinginbreachoftheregulatoryor 

legalrequirementsofanyterritoryinconnectionwiththeOfferor 

yourapplication; 

confirmthatyouhavereadandcompliedwithparagraph6below; 

confirm that you have reviewed the restrictions contained in 

paragraph7below; 

warrantthatyouarenotundertheageof18years; 

if the laws of any territory or jurisdiction outside the United 

Kingdomareapplicabletoyourapplication,warrantthatyouhave 

complied with all such laws and none of the Company, NVM or 

Downingoranyoftheirrespectiveagentswillinfringeanylawsof 

anysuchterritoryorjurisdictiondirectlyorindirectlyasaresultor 

inconsequenceofanyacceptanceofyourapplication; 

agree that NVM and Downing are acting for the Company in 

connectionwiththeOfferandfornooneelseandthattheywill 

nottreatyouastheircustomerbyvirtueofsuchapplicationbeing 

acceptedoroweyouanydutiesorresponsibilitiesconcerningthe 

priceofOfferSharesorconcerningthesuitabilityofOfferShares 

for you or be responsible to you for the protections afforded to 

theircustomers; 

warrant that if you sign the Application Form on behalf of 

somebody else or yourself and another or others jointly or a 

corporation you have the requisite power to make such 

investmentsaswellastheauthoritytodosoandsuchpersonwill 

alsobeboundaccordinglyandwillbedeemedalsotohavegiven 

theconfirmations,warrantiesandundertakingscontainedinthese 

terms and conditions of application and undertake (save in the 

case of signature by an authorised financial adviser on behalf of 

theInvestor)toencloseapowerofattorneyoracopythereofduly 

certifiedbyasolicitorwiththeApplicationForm; 

warrantthatyouarenotsubscribingfortheOfferSharesusinga 

loanwhichwouldnothavebeengiventoyouoranyassociate,or 

not given to you on such favourable terms, if you had not been 

proposingtosubscribefortheOfferShares; 

warrantthattheOfferSharesarebeingacquiredbyyouforbona 

fide investment purposes and not as part of a scheme or 

arrangement the main purpose of which, or one of the main 

purposes of which, is the avoidance of tax. Obtaining tax reliefs 

given under the applicable VCT legislation is not of itself tax 

avoidance; 


(w) warrantthatyouarenota“USperson”asdefinedintheUnited 

States Securities Act of 1933 (as amended) nor a resident of 

CanadaandthatyouarenotapplyingforanySharesonbehalfof 

orwithaviewtotheiroffer,saleordelivery,directlyorindirectly, 

to or for the benefit of any US person or resident of Canada, 

Australia,theRepublicofSouthAfrica,theRepublicofIrelandor 

Japan; 

(x) warrantthattheinformationcontainedintheApplicationFormis 

accurate;and 

(y) agreethatifyourequestthatOfferSharesareissuedtoyouona 

dateotherthan5April2012andsuchOfferSharesarenotissued 

onsuchdatethatnoneoftheCompany,theirrespectiveagentsor 

Directors will have any liability to you arising from the issue of 

suchOfferSharesonadifferentdate. 

 

6. No person receiving a copy of the Offer Document or an 

ApplicationForminanyterritoryotherthantheUnitedKingdom 

maytreatthesameasconstitutinganinvitationoroffertohimor 

her,norshouldheorsheinanyeventusesuchApplicationForm 

unless,intherelevantterritory,suchaninvitationoroffercould 

lawfully be made to him or her or such Application Form could 

lawfullybeusedwithoutcontraventionofanyregistrationorother 

legalrequirements.Itistheresponsibilityofanypersonoutside 

theUnitedKingdomwishingtomakeanapplicationhereunderto 

satisfyhimselforherselfastothefullobservanceofthelawsof 

anyrelevantterritoryinconnectiontherewith,includingobtaining 

any requisite governmental or other consents, observing any of 

the formalities requiring to be observed in such territory and 

paying any issue, transfer or other taxes required to be paid in 

suchterritory. 

 

7. TheOfferShareshavenotbeenandwillnotberegisteredunder 

theUnitedStatesSecuritiesAct1933,asamended,orunderthe 

securities laws of any state or other political subdivision of the 

UnitedStates,andmaynotbeofferedorsoldintheUnitedStates 

ofAmerica,itsterritoriesorpossessionsorotherareassubjectto 

itsjurisdiction(the“USA”).Inaddition,theCompanyhasnotbeen 

and will not be registered under the United States Investment 

Company Act of 1940, as amended. The Manager will not be 

registeredundertheUnitedStatesInvestmentAdviserActof1940 

(as amended). No application will be accepted if it bears an 

addressintheUSA. 

 

8. The application is addressed to the Company. The rights and 

remedies of the Company under these Terms and Conditions of 

Applicationareinadditiontoanyrightsandremedieswhichwould 

otherwisebeavailabletoit,andtheexerciseorpartialexerciseof 

onewillnotpreventtheexerciseofothers. 

 

9. ThedatesandtimesreferredtointheseTermsandConditionsof 

ApplicationmaybealteredbytheCompany. 

 

10. Authorisedfinancialadviserswho,actingonbehalfoftheirclients, 

return valid Application Forms bearing their stamp and Financial 

ServicesAuthoritynumberwillbeentitledtocommissiononthe 

amountpayableinrespectoftheOfferSharesallocatedforeach 

such Application Form at the rates specified in the paragraph 

headed "Commission" in Part I of this document. Authorised 

financial advisers may agree to waive part or all of their initial 

commissioninrespectofanapplication.Ifthisisthecase,then 

suchapplicationwillbetreatedasanapplicationtosubscribefor 

thesumstatedinboxnumber2oftheApplicationFormtogether 

withanumberofadditionalOfferSharesequivalenttotheamount 

of commission waived. NVM and the Registrar are accordingly 

authorisedtoamendsuchboxnumber2.Financialadvisersshould 

keeparecordofApplicationFormssubmittedbearingtheirstamp 

tosubstantiateanyclaimfortheircommission. 

 

11. ThesectionheadedNotesonApplicationFormformspartofthese 

TermsandConditionsofApplication. 

 

12. It is a condition of the Offer to ensure compliance with the ML 

Regulations. NVM is therefore entitled to require, at its absolute 

discretion,verificationofidentityfromanyApplicantincluding,without 

limitation,anypersonwhoeither(i)tenderspaymentbywayofacheque 

or banker’s draft drawn on an account in the name of a person or 

personsotherthantheApplicantor(ii)appearstoNVMtobeactingon 

behalf of some other person. Pending the provision of evidence 

satisfactorytoNVMastotheidentityoftheApplicantand/oranyperson 

on whose behalf the Applicant appears to be acting, NVM may, in its 

absolute discretion, retain an Application Form lodged by an Applicant 

and/or the cheque or other remittance relating thereto and/or the 

Registrar may not enter the Applicant on the register of members or 

issueanysharecertificatesinrespectofsuchapplication.Ifverification 

of identity is required, this may result in delay in dealing with an 

applicationandinrejectionoftheapplication.TheCompanyreservesthe 

right,initsabsolutediscretion,foritorNVMtorejectanyapplicationin 

respect of which NVM considers that, having requested verification of 

identity,ithasnotreceivedevidenceofsuchidentitysatisfactorytoitby 

suchtimeaswasspecifiedintherequestforverificationofidentityorin 

any event within a reasonable period. In the event of an application 

beingrejectedinanysuchcircumstances,theCompanyreservestheright 

initsabsolutediscretion,butshallhavenoobligation,toterminateany 

contractofallotmentrelatingtoorconstitutedbysuchApplicationForm 

(inwhicheventthemoneypayableorpaidinrespectoftheapplication 

will be returned (without interest) to the account of the drawee bank 

fromwhichsuchsumswereoriginallydebited)and/ortoendeavourto 

procure other subscribers for the Shares in question (but in each case 

without prejudice to any rights the Company may have to take 

proceedingstorecoverinrespectoflossordamagesufferedorincurred 

by it as a result of the failure to produce satisfactory evidence as 

aforesaid). The submission of an Application Form will constitute an 

undertaking by the Applicant to provide promptly to NVM such 

informationasmaybespecifiedbyitasbeingrequiredforthepurposeof 

theMLRegulations. 

 

13. Therightisalsoreservedtotreatasvalidandbindinganyapplicationnot 

complyingfullywiththeseTermsandConditionsofApplicationornotin 

allrespectscomplyingwiththeNotesonApplicationForm.Inparticular, 

but without limitation, the Company may accept applications made 

otherwise than by completion of an Application Form where the 

ApplicanthasagreedinsomeothermanneracceptabletotheCompany 

toapplyinaccordancewiththeseTermsandConditionsofApplication. 

 

 

 


Notes on Application Form 

 

BeforemakinganapplicationtoacquireOfferSharesyouarestronglyrecommendedtoconsultanappropriatefinancialadviserauthorisedunderthe 

FinancialServicesandMarketsAct2000.ItisessentialthatyoucompleteallpartsoftheApplicationForminaccordancewiththeinstructionsinthesenotes. 

Please send the completed Application Form, together with your cheque or banker's draft by post, or deliver it by hand, to Northern3VCTPLC, 

NorthumberlandHouse,PrincessSquare,NewcastleuponTyneNE18ER.IfyouhaveanyquestionsonhowtocompletetheApplicationFormpleasecontact 

NVMon01912446000oryourfinancialadviser. 

 

ThefollowingnotesshouldbereadinconjunctionwiththeApplicationFormandtheTermsandConditionsofApplication. 

 

InsertinBox1inBLOCKCAPITALSyourfullname,permanentaddress,daytimetelephonenumber,dateofbirth,NationalInsurancenumberand, 

 

 

 

 

 

 

 

1 

2 

3 

4 

5 

6 

ifyouhaveone,youremailaddress.Jointapplicationsarenotpermitted. 

 

 

 

Insert(infigures)inBox2thetotalamountyouwishtoinvestundertheOffer.Sharesubscriptionswillbeadjustedtoreflectanycommission 

waived(byagents)asextraOfferShares. 

 

Please note that the minimum investment is £5,000.Themaximuminvestment,onwhichtaxreliefsoninvestmentsinVCTsareavailable,is 

£200,000inthe2011/12taxyear. 

 

Attachyourchequeorbanker'sdrafttotheApplicationFormfortheexactamountshowninBox2.Yourchequeorbanker'sdraftmustbemade 

payableto"Northern3VCTPLC"andcrossed"A/CPayeeonly".Yourpaymentmustrelatesolelytothisapplication. 

 

Nomoneylaunderingverificationisrequiredtobeenclosediftheapplicationisforlessthan£12,000orifpaymentisbymeansofacheque 

drawnonanaccountinthenameoftheApplicant(providedthat(a)thechequeincludesdetailsoftheApplicant'sbankaccountorbuilding 

society account (as applicable) and (b) the cheque is drawn on a UK or European Union authorised bank or credit institution). Please note, 

however,thatNVMmay,initsabsolutediscretion,requireMoneyLaunderingverificationandthatMoneyLaunderingverificationwillberequired 

byintroducingfinancialadvisers. 

 

MoneyLaundering 

Iftheapplicationisformorethan£12,000andpaymentisnotbymeansofa chequedrawnonanaccountinthenameoftheApplicant, 

pleasesupply: 

 

(a) anIdentityVerificationCertificatefromyourauthorisedfinancialadviser. 

 

or 

 

(b) (i) acopyofyourpassportordrivinglicencecertificatedbyabankorsolicitorstatingthatitisa"truecopyoftheoriginalandatrue 

likenessoftheclient"followedbyyourname;and 

 

(ii) arecent(nomorethanthreemonthsold)originalbankorbuildingsocietystatement,orutilitybill,orrecenttaxbill,inyourname. 

 

 

Read the declaration and sign and date the Application Form in Box 3. If someone other than the Applicant named in Box 1 signs on such 

Applicant'sbehalf,suchsignatorymustensurethatthedeclarationgivenonbehalfofsuchApplicantiscorrect.Authorisedintermediarieswhoare 

entitledtoreceivecommissionshouldstampandcompletetheagent'sbox,givingtheirfullnameandaddress,telephonenumberanddetailsof 

theirauthorisationundertheFinancialServicesandMarketsAct2000.TherightisreservedtowithholdpaymentofcommissioniftheCompanyis 

not,atitssolediscretion,satisfiedthattheagentissoauthorised. 

 

 

Ifyouwishtohavedividendspaidintoyournominatedbankorbuildingsocietyaccount,pleasecompletethemandateinstructionform. 

 

 

 

Leaveblankifyouwishtoreceiveasharecertificateinrespectofyourinvestment.IfyourequireyourSharestobeissuedelectronicallytoaCREST 

account,pleasecompletetheboxes. 

To be completed by authorised intermediaries only. If you would like commission to be paid by BACS, please complete the relevant boxes.

Northern 3 VCT PLC 

ApplicationForm 

 

Makeyourchequeorbanker'sdraftpayableto"Northern3VCTPLC"andcrossed"A/CPayeeonly"andreturnthisformas 

soonaspossibletoNorthern3VCTPLC,NorthumberlandHouse,PrincessSquare,NewcastleuponTyneNE18ER.Theclosingdateforthe 

Offerwillbe5.00pmonThursday5April2012(unlessfullysubscribedearlier). 

 

1 

Titleandnameinfull 

Permanentaddress 

 

 

 

Postcode 

 

Daytimetel 

 

Emailaddress 

 

 

Dateofbirth 

NationalInsuranceNo 

 

IamapplyingforOfferSharesasfollows: 2011/12taxyear £ 

 

orsuchlessersumforwhichthisapplicationmaybeacceptedontheTermsandConditionsofApplicationsetoutinPartVofthisdocument. 

PleasesendmeacertificateconfirmingmyentitlementtoVCTtaxreliefs. 

 

BYSIGNINGTHISFORMIHEREBYDECLARETHAT:(i)Ihavereadtheenclosedtermsandconditionsofapplicationandagreetobeboundbythem; 

(ii) I will be the beneficial owner of the Offer Shares in Northern 3 VCT PLC issued to me pursuant to this application; (iii) to the best of my 

knowledgeandbelief,theparticularsIhavegiventoNorthern3VCTPLCarecorrect;and(iv)mysubscriptioncomprisestheamountsetoutinbox 

2aboveplusanycommissionwaivedonmybehalfforextrashares. 

 

Ifthisformiscompletedandsignedbyanauthorisedfinancialadviseroranyotherpersonapartfromtheinvestor: 

Bysigningthisformonbehalfoftheindividualwhosedetailsareshownabove,Imakeadeclaration(onbehalfofsuchindividual)onthetermsof 

subparagraphs(i)to(iv)above. 

 

 

HMRevenue&Customsmayinspectthisapplicationform.Itisaseriousoffencetomakeafalsedeclaration. 

 

 

 

2 

3 

 

Signature 

 

 

 

Date / / 

 

 

Authorisedintermediariesshouldstampandcompletethisbox 

Contactname: 

 

Firmname: 

 

FSANo.: 

 

Emailaddress: 

 

 

 

 

Address: 

 

Postcode: 

 

Duecompletionoftheagent'sboxindicatesthattheagentisdulyauthorisedtotransactinvestmentsofthistypeundertheFinancialServicesandMarketsAct2000. 

ForOfficialUseOnly 

 

Antimoneylaundering 

CHAPS 

 

 

Tel.:

4 

DIVIDENDMANDATE 

Dividends may be paid directly into Shareholders' bank and building society accounts. In order to facilitate this, please complete the 

mandateinstructionformbelow.PleasenotethatifyouareanExistingShareholderthisinstructionappliestoallofyourshareholdingsin 

theCompanyandcompletingtheformbelowwilldirecttheCompanytosendalldividendpaymentsdueonallyourshareholdingstothis 

bankaccount. 

 

Dividends paid directly to your account will be paid in cleared funds on the dividend payment dates. Your bank or building society 

statementwillidentifydetailsofthedividendaswellasthedatesandamountspaid. 

 

BycompletingthedetailsbelowIaminstructingtheCompanytoforward,untilfurthernotice,alldividendsthatmayfromtimetotime 

becomedueonanySharesnowstanding,orwhichmayhereafterstand,inmynameintheregisterofmembersofNorthern3VCTPLCto 

thebankorbuildingsocietyaccountlistedbelow. 

 

NameofBankorBuildingSociety: 

Branch: 

 

 

5 

 

6 

 

BranchAddress: 

AccountName: 

 

SortCode: 

 

Signed: 

 

 

 

 

 

 

 

 

AccountNumber: 

(pleasequotealldigitsandzeros) 

 

TheCompanyandNVMdonotacceptresponsibilityifanydetailsprovidedbyyouareincorrect. 

CREST 

CompletethisboxonlyifyourequiresharestobeissuedelectronicallytoaCRESTaccount. 

 

CRESTParticipantID: 

 

CRESTMemberAccountID: 

ParticipantName: 

ParticipantAddress: 

ParticipantPostcode: 

ContactnameforCRESTqueries: 

ContactTelephone: 

Signed: 

TOBECOMPLETEDBYAUTHORISEDINTERMEDIARIESONLY 

 

Specialinstructions 

 

 

 

 

 

 

 

 

 

 

 

 

PleaseprovidedetailsofyourbankaccountsothatcommissioncanbepaidtoyouviaBACS. 

 

NameofBankorBuildingSociety: 

Branch: 

AccountName: 

 

SortCode: 

 

Emailaddressforcommission 

statements: 

 

 

 

 

 

 

 

 

AccountNumber: 

(pleasequotealldigitsandzeros) 

TheCompanyandNVMdonotacceptresponsibilityifanydetailsprovidedbyyouareincorrect.

Northern 3 VCT PLC 

Northumberland House 

Princess Square 

Newcastle upon Tyne NE1 8ER 

T 0191 244 6000 

F 0191 244 6001 

E n3vct@nvm.co.uk 

www.nvm.co.uk 

Designed and produced by The Roundhouse Newcastle upon Tyne

Northern 3 VCT PLC Application Form - Clubfinance

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