Northern 3 VCT PLC Application Form - Clubfinance

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