PartVII–OfferDetails&Charges AdviserCharges,pricingoftheOffersandcommission CommissionisgenerallynotpermittedtobepaidtoIntermediarieswhoprovideapersonalrecommendationtoUKretailclientson investments in <strong>VCT</strong>s after 30 December 2012. Instead of commission being paid by the Company, a fee will usually be agreed betweentheIntermediaryandInvestorfortheadviceandrelatedservices(“AdviserCharge”).Thisfeecaneitherbepaiddirectly bytheInvestortotheIntermediaryor,ifitisaninitialoneofffee,thepaymentofsuchfeemaybefacilitatedby<strong>Downing</strong><strong>Planned</strong> <strong>Exit</strong><strong>VCT</strong>2.OngoingfeestoIntermediarieswillnotbefacilitatedbytheCompany.IfthepaymentoftheAdviserChargeistobe facilitatedbytheCompany,thentheInvestorisrequiredtospecifytheamountofthechargeontheApplicationForm(seeBox3). <strong>The</strong>InvestorwillbeissuedfewerG<strong>Shares</strong>(totheequivalentvalueoftheAdviserCharge)throughthePricingFormulasetout below.<strong>The</strong>AdviserChargeisinclusiveofVAT,ifapplicable. Commission is permitted to be paid to Intermediaries in certain limited situations, such as in respect of executiononly clients (where no advice orpersonal recommendation has been provided). <strong>The</strong> level of the Promoter’s Fee appliedtoeachInvestor’s applicationreflectswhetherornotcommissionispayable. Promoter’sFee(noIntermediarycommissionpayable) <strong>Downing</strong>willchargetheCompanyaPromoter’sFeeof3.5%ofthemoniessubscribed,whereitisnotrequiredtopaycommission toanIntermediary. Promoter’sFee(Intermediarycommissionpayable) <strong>Downing</strong>willchargetheCompanyaPromoter’sFeeof5.5%ofthemoniessubscribed,whereitisrequiredtopaycommissiontoan Intermediary.OutofitsPromoter’sFees,<strong>Downing</strong>(notInvestors)willberesponsibleforpayingallthecostsoftheOffers,including initialandtrailcommission(asdescribedundertheparagraphheaded"Commission"below)toIntermediaries(whereapplicable). PricingoftheOffers <strong>The</strong>numberofG<strong>Shares</strong>tobeissuedtoeachApplicantwillbecalculatedbasedonthefollowingPricingFormula(roundeddownto thenearestwholeGShare): NumberofG<strong>Shares</strong> = Amountsubscribed,less: (i)initialPromoter’sFee 1 ;and(ii)AdviserCharge(ifany) ÷ 1 lessanyreductionfortheearlyapplicationsand/orcommissionwaivedbyIntermediaries(whereapplicable) 2 adjustedforanydividendsdeclaredandexdividendbutnotyetpaid,asappropriate Illustrativeexamples(basedonasubscriptionundertheOffersof£10,000andaNAVperGShareof£1) (i) (ii) (iii) (iv) Promoter’sFee(commissionpayable)5.5%=£550 NumberofG<strong>Shares</strong>=(10,000–550–0)÷1=9,450 Promoter’sFee(nocommission)3.5%=£350 ExampleAdviserCharge=£225 NumberofG<strong>Shares</strong>=(10,000–350–225)÷1=9,425 Promoter’sFee(nocommission)3.5%=£350 ExampleAdviserCharge=£400 NumberofG<strong>Shares</strong>=(10,000–350–400)÷1=9,250 Promoter’sFee(nocommission)applicationreceivedby28February2013*2.5%=£250 ExampleAdviserCharge=nil(feebeingpaiddirectlybyclienttoIntermediaryordirectapplication) NumberofG<strong>Shares</strong>=(10,000–250–0)÷1=9,750 19 LatestpublishedNAV perGShare 2 applicationsreceivedandacceptedby28February2013benefitfroma1%reductioninthePromoter’sFee. ItshouldbenotedthattheexampleAdviserChargessetoutabovehavebeenprovidedtoillustratethepricingoftheOffersand shouldnotbeconsideredasarecommendationastotheappropriatelevelsofAdviserCharges. Incometaxreliefisavailableonthetotalamountsubscribed,subjectto<strong>VCT</strong>Rulesandpersonalcircumstances,whichineachof theaboveexampleswouldbe£3,000(£10,000at30%). <strong>The</strong>numberofG<strong>Shares</strong>issuedundertheOfferswillbeaffectedbya“blended”issuecost,becauseApplicantswillhaveadifferent issue cost attributable to their application forG <strong>Shares</strong> undertheOffers depending upon whethertheir Applicationisreceived directly,throughanexecutiononlybrokerorthroughanIntermediaryprovidingadvice. Commission CommissionmaybepayablewherethereisanExecutiononlyTransactionandnoadvicehasbeenprovidedbytheIntermediaryto the Investor or where the Investor is a professional client of the Intermediary. Commission is payable by <strong>Downing</strong> out of its Promoter’sFee.ThoseIntermediarieswhoarepermittedtoreceivecommissionwillusuallyreceiveaninitialcommissionof2%of the amount invested by their clients under the Offers. Additionally, provided that the Intermediary continues to act for the Investor and the Investor continues to be the beneficial owner of the G <strong>Shares</strong>, and subject to applicable regulations, the Intermediarywillusuallybepaidanannualtrailcommissionof0.25%oftheNetAssetValueoftheirclients'holdingsforthelifeof thisinvestment(subjecttoacaponthecumulativetrailcommissionof4.5%onthegrossproceedsoftheOffers).Trailcommission willbepaidannuallyinJune(commencingJune2014basedontheauditedNetAssetValueatthepreceding31January).Boththe initialandannualtrailcommissionwillbepayableby<strong>Downing</strong>outofitsfees.
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