Financial Statements For the year ended
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| 5 Capital ACCA considers its capital to be its accumulated fund and its other reserves. Council’s financial objective is to generate a targeted operating position, to build and maintain reserves at a sustainable level, taking into account the various competitive risks. ACCA also aims to achieve additional long-term growth in reserves through the active management of the investment portfolio. A five-year financial plan has been developed which, over the period of the plan, targets an agreed level of accumulated fund. At 31 March 2022, the accumulated fund represented 62 days of operating expenditure (31 March 2021: 49 days restated) which is above the long-term target of 60 days. This reflects the better than forecast deficit resulting mainly from reduced operating expenditure and the net actuarial gain. Council has reviewed its liquidity measure and has agreed that it will maintain a level of liquid reserves to cover ACCA’s exposure to corporate risks that would result in a consequential loss to ACCA which could reduce overall financial strength and create a risk that ACCA was unable to settle liabilities as they fall due. Liquid reserves are defined as the total of cash, liquid short-term and long-term investments, less any short- term borrowing. Any investments in illiquid funds or securities, e.g. property funds, will be excluded from this classification. ACCA’s Council Board reviews the financial position of ACCA at each board meeting. Association of Chartered Certified Accountants Notes to the Financial Statements for the year ended 31 March 2022 5 Capital (continued) ACCA is not normally subject to any material externally imposed capital requirements, however as ACCA entered into a facility agreement with Barclays Bank plc fora Floating Rate Revolving Loan supported by the UK Government’s CLBIL Scheme, it is required to comply with various financial covenants as follows • Minimum liquidity ACCA shall ensure that the aggregate of Cash and Other Current Financial Assets and the undrawn and uncancelled amount of the Facility Amount: (i) for each Relevant Date ending 30 September, shall be greater than £15,000,000; ii) for each other Relevant Date, shall be greater than £25,000,000; and iii) for each other Quarter Look Forward Period, shall be greater than £10,000,000. • Gearing ACCA shall ensure that at all times the ratio of Gross Borrowings to Total Assets shall not exceed These covenants have been tested as required during the year without any issue. ACCA is also required to provide regular financial information such as management and annual accounts, budgets, investment portfolio valuations and compliance certificates. It should be noted that there has been no need to use the facility during the year. Download 0.68 Mb. Share with your friends:
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