COIF Charities Deposit Fund - CCLA

Report of the Boardfor the year ended 31 December 2011On behalf of the Board, I have pleasure inpresenting the annual report of the COIFCharities Deposit Fund (the Fund).Structure and management of theFundThe Fund originated from the Charities DepositFund that was formed in 1985 as a CommonDeposit Fund. The Fund was established undersection 25 of the Charities Act 1993. TheCharity Commission Scheme dated 2 April 2008replaced the previous Scheme dated 27 June1995.The Board acts as an independent body tocontrol and supervise the Fund, for the benefitof participating charities, meeting at least fourtimes per annum. Together, these individualshave wide experience of finance, investments,charities and the law. The management andadministration of the Fund have been delegatedto CCLA Investment Management Limited (theManager).Deposits taken by the Fund are exempted fromthe Financial Services and Markets Act 2000(FSMA) by virtue of the Financial Services andMarkets Act (Exemption) Order 2001. Depositsin the Fund are not covered by the FinancialServices Compensation Scheme. The Managerwill pay fair compensation on eligible claimsarising from its negligence or error in themanagement and administration of the Fund.Objective and benchmark of theFundThe Fund aims to provide the strongest level ofsecurity together with daily liquidity and a goodlevel of interest. The Fund is rated AAA/V1 byFitch Ratings.The total return performance benchmark of theFund is the London Inter-Bank Sterling 7-day BidRate (LIBID) as measured by the BritishBankers’ Association, before managementexpenses.Investment policyThe Fund may invest cash in deposits in Sterlingwith Banks, Building Societies and LocalAuthorities in the United Kingdom (UK). TheFund must maintain at least 5% of theinvestments of the Fund in deposits repayablewithin five business days. It places Sterling cashbalances with identified and permittedcounterparties. The weighted average maturitymust be maintained at no more than 60 days.The maximum maturity of a single deposit isone year. The Manager must have regard to theneed for diversification of deposits and to thesuitability of the institutions with which it placesdeposits. Funds are placed with counterpartieswhich are regularly reviewed and approvedannually by the Board.Review of investment activities andpolicies of the FundThe Board met quarterly during the year to carryout their responsibility for the approval ofstrategy, for setting interest rate policy, tomonitor investment diversification, suitabilityand risk, and to review the performance of theFund. In addition, the Board monitored theadministration and expenses of the Fund and isalso responsible for the appointment of theFund’s Manager and the Auditor.During the year, the Board also met quarterlywith the Manager to review the investments,transactions and policies of the Fund. TheManager’s report on the Fund, which appears3