CAFOD Trustees Report and Financial Statements 2011-2012

To meet this objective, we invest in sterling deposits with financialinstitutions that hold a high security rating, ordinarily spreading thetotal invested across fixed terms from overnight to 12 months, andlimiting the amount invested with any individual financial institution.In response to the increased risks highlighted by the credit crunch,we have limited deposits to UK domiciled banks and deposited forshorter periods to enable us to react more quickly to issues withparticular banks.As well as sterling deposits, CAFOD maintains balances in Sterling,US Dollars and Euros for transactional purposes to cover ongoingexpenditure. These “transactional” balances are held on instant accesseither in accounts with the Royal Bank of Scotland or in a sharedinvestment fund managed by the Royal Bank of Scotland, dependingon the daily interest rates available.We have a permanent endowment fund, on which the capital is held inperpetuity and from which the income is applied to CAFOD’s work. Tomaintain the capital value of this fund, meet its ethical standards andachieve the best possible return, this fund is invested in an ethical UKcommon investment fund.CAFOD’s investment policy is reviewed by the Finances Committee,acting as an investment sub-committee and assisted by CouttsBank acting as investment advisers, and approved by the trusteesannually. The Finances Committee, reporting to the trustees, monitorinvestment performance and compliance with investment policyquarterly and the trustees have confirmed the Finance Committee’sopinion that the objectives of CAFOD’s investment policy were metduring the year.21