RESERVES POLICY

The charity relies to a large extent on the generosity of patients, their relatives and friends, supplemented by investment income. Income flows by their nature are unpredictable. However the charity is committed to expenditure which is incurred over the life of long term research projects.

As a consequence the Trustees have agreed a reserves policy as follows:

To ensure the financial viability of the fund and its ability to meet its on-going commitments the charity will endeavour to maintain, on average, sufficient reserves to cover three years expenditure.

Management action will be required should the value of the fund exceed five times the annual expenditure, or fall below one years annual expenditure.

Unforeseeable increases in net incoming resources have moved the charity further from its desired ratio of expenditure to reserves of 1:3. In line with the policy, management action will be taken during 1999/2000 and beyond to ensure compliance. Projections based on implementation of current research proposals indicate that the charity will comply with its reserves policy by 2000/01, with the value of the fund being approximately 3 times the recurrent annual expenditure level by 2003/04. During this period the Trustees will continue to monitor actual income and expenditure against these projections.