Our finances (continued)
Cancer information and influencing
We spent £16 million (2010: £14 million) on cancer information and influencing, which reflects our continued emphasis on providing better cancer information and influencing relevant government bodies.
Funds Total funds were £186 million, an increase of £4 million.
General funds were £182 million, a reduction of £15 million, mainly due to transfers to restricted funds.
Cash and investments were £211 million, a reduction of £14 million due to operating and capital expenditure in the year.
Reserves We base our monitoring of reserves cover on liquid net cash and investments and adjusted net assets. At 31 March 2011, liquid net cash and investments were £198 million (2010: £227 million). These will help us to finance the £441 million of research grant commitments to be paid in future periods.
Close monitoring of our reserves position is essential in enabling us to meet the demands of our forward five-year research programme. Planned investments in key projects, such as the UKCMRI, and in maintaining critical research projects in the light of a predicted relatively flat fundraising contribution for the next few years mean that our liquid net cash and investments are expected to reduce from five months of total cash requirements to three months by 31 March 2015.
We are managing our finances carefully over a five-year cycle so that we are able to maintain a stable research programme to achieve the maximum impact in our vision to beat cancer.
Total funds up2% to £186 million
(2010: £182 million)
Cash and investments down to £211 million (2010: £225 million)
6%
Reserves policy We plan research over the long term. But as a fundraising charity, we are subject to the effects of short-term volatility in income. We hold reserves (‘funds’) to ensure that we can meet our research commitments (typically three to five years) in the face of such fluctuations. We use a rolling five-year plan to model how the Charity will manage resources in the best way to deliver the strategy, while holding reserves at no more than is necessary.
Our reserves policy mandates a minimum level of liquid funds that are readily convertible into cash. This ensures that the Charity will be able to discharge its financial commitments over the course of the five-year plan. To reflect this, we monitor a reserves measure of ‘liquid net cash and investments’, as shown below. Liquid funds are those funds which, taken as a whole, can readily be realised within two months for at least 95% of current market value, allowing forecast gross cash outflows to be paid on their due date.
In addition, to enhance risk management, and ensure that we can fund known liabilities in the near term, we monitor a balance sheet measure of reserves, which is calculated below. ‘Adjusted net assets’ matches our realisable assets against our current liabilities, and ensures that this measure does not fall below an acceptable liquidity level, which we define as 10% of our future fundraising contribution.
12 / Annual Report and Accounts / Our finances
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