The investor should be conscious that every investment contains certain risk factors. Therefore there is no guarantee that losses cannot arise from the acquisition of shares and it cannot be guarantied that the investment objectives of the VC-Company are always reached. The VC Company was set up for investors who want to increase their capital through worldwide investments and participate in above-average returns of small and medium-sized enterprises. This does not represent a complete investment program for the single investor; the VC group is absolutely entitled to obtaining listed securities of all countries, and reserves the right, with certain restrictions, to dealing on the free market and direct or indirect participations in enterprises outside the United Statesand Canada. Every investor should therefore carefully weigh the additional risks that come with investing outside the United States, Canada and the Federal Republic of Germany. Some of these risks are listed below.


Foreign investments are profitable only under certain circumstances. This can clearly be seen through business reports and comparative figures published by financial societies in the United States, Canada and the European Union. Such investments are generally not subject to the standard principles of proper bookkeeping, audit and accounting of the United States, Canada and the European Union. Generally, foreign stock markets return substantially lower profits than trading done through the New York stock exchange and the Frankfurt stock exchange; the securities and the participation in some foreign companies are not as easily liquidated and are subject to greater price fluctuations than the shares of comparable societies in the United States, Canada and in the Federal Republic of Germany. Furthermore the VC group is entitled to invest 15% of its total assets in foreign markets and not more than 51% of total assets in securities and enterprise participation with restricted profit margins if, in the opinion of the directorate, this does not lead to considerable liquidity problems. In certain circumstances there is less strict supervision and regimentation for foreign stock exchanges, brokerages and certified enterprises than in the United States, Canadaand the European Union. The directorate always gravitates to the most favourable currencies for buying and selling. A certain impact on exchange rates can arise (as processing charges or broker profit) particularly if shifting between countries or if the sales proceeds in U.S. Dollars are used for trade in foreign countries. Although the directorate strives to conduct trading and investments only on countries with stable and benevolent governments, there is always the possibility of expropriation or predatory taxation, political or social disturbances or other diplomatic developments in the countries in question that can negatively influence investments and trading climate.


Changes of stock exchange supervision regulations, price fluctuations between the currencies of individual nations and economic and political development can work to the advantage or disadvantage of the VC group. Through a flexible investment policy, the directorate endeavours to avoid adverse consequences and make use of advantageous developments in individual countries where the VC group has standing investments. Through the application of this flexible investment policy, decisions are made on the acquisition of securities with considerable risk, as well as decisions such as investment shifts within the individual countries and / or types of investment made. Some of these decisions will prove profitable. With others this will not be the case. There is no guarantee that the profits will exceed the losses.


At least once a year the directorate reviews the possibility of foreign governments introducing currency restrictions that could impair the liquidity of investments of the VC group. Likewise is carried out a review of possible dangers the politics of foreign governments could pose. The risks for local and foreign security deposits are also taken into consideration. The directorate takes measures to ensure the liquidity and profit of its investments, including eventual expropriation insurance, on the scale advisable according to its estimation of the respectively ruling circumstances. At present the VC company has no expropriation insurance. There is no guarantee that the risk assessment by the directorate is always correct or that foreign currency restrictions or political measures from foreign governments are not possible.


Even further risks are connected to the trade in financial futures. These risks arise from the scope of possible action of the VC company at the reduction of its futures positions, which depends on the liquidity of the markets for such financial futures. The VC company has the intention to buy or to sell futures contracts only with stock exchanges at which there is an active market but there is no guarantee of a solvent market for a particular contract or for a particular timeframe. The use of futures contracts for hedging transactions can entail risks not corresponding to the price swings in the financial futures market on the one hand and the price swings of the securities included in the hedging transaction or the underlying share on the other hand. The success of financial futures also depends on the ability of the management predicting the movement direction of the market correctly. The VC group gives the investor no guarantee as to successful investment decisions by the directorate.