Risk Factors
An investment in the Company should be viewed as a medium to long term investment and is only suitable for investors who are capable of evaluating the risks and merits of such investment and who have sufficient resources to bear any loss which might result from such investment. Investing in the Company carries with it the risks associated with investing in equities, the value of which can fall as well as rise. In addition, the value of the Shares and the income from them can fluctuate and Shareholders may not get back the amount they have invested. Also, there is no guarantee that the market price of the Shares will fully reflect the underlying net asset value or that any dividends will be paid. The past performance of Rensburg Sheppards as a fund manager is not necessarily a guide to its future performance. Investors must hold their Ordinary Shares for at least three years in order to retain the initial income tax relief.
The following additional factors relating generally to an investment in the Company should be considered:
- although the Ordinary Shares are listed on the Official List and traded on the London Stock Exchange, the market is illiquid and it may prove difficult to realise an investment;
- the Directors believe that investment in AIM companies and unquoted companies can offer good returns but, by their nature, such returns are uncertain and may involve a higher degree of risk than investment in companies with a listing on the Official List;
- the Directors believe that the market in AIM companies' shares can be illiquid, leading to possible difficulties in realising some of the Company's investments and the price achieved may be significantly below that quoted in the Daily Official List of the London Stock Exchange;
- the Directors believe that selling investments in unquoted companies can be difficult and may take considerable time;
- there may be constraints imposed on the realisation of investments in order to maintain the VCT status of the Company;
- although the Company has stated its intention to buy back its Ordinary Shares at a maximum discount of 10% to net asset value (up to a maximum of 10% of the issued share capital per annum), to pay a minimum distribution of 3 pence per Share for a period of at least three years from 2006 and to make a tender offer in 2009 these are all subject to legal and regulatory requirements and having sufficient cash resources;
- whilst the Directors will make every effort to ensure that the Company will continue to qualify as a VCT there can be no guarantee that it will do so. A failure to meet the qualifying requirements could result in the Company and investors losing the tax reliefs previously obtained;
- the tax rules, or their interpretation in relation to an investment in and/or by the Company, and/or the rates of tax may change during the life of the Company and such changes may be retrospective; and
- there can be no certainty that there will be sufficient new issues of shares in AIM companies which the Board regard as suitable investment opportunities.