Alba, Main Street, Golspie, Sutherland, KW10 6TG
                                   Tel: 01408 633001 - Fax: 05601 146813
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                                  RESERVES POLICY

The directors have set a reserves policy which requires:

    Reserves are maintained at a level which ensures that 3 months organisation’s
     core activity could continue during a period of unforeseen difficulty. In addition, a
     lump sum equating to the current requirement for redundancy payments to all
     VGES staff, if made redundant, should be included. In monetary terms, at the
     time of adoption, this is represented by £21,000 for 3months’ running costs plus
     £19,000 for redundancy payments = £40,000.
    A proportion (40%) of reserves is maintained in a readily realisable form. In
     monetary terms, this is represented by £16,000.

The calculation of the required level of reserves is an integral part of the organisation’s
planning, budget and forecast cycle. It takes into account:

    Risks associated with each stream of income and expenditure being different
     from that budgeted.
    Planned activity level.
    Organisation’s commitments.

This policy should be used together with the VG-ES Redundancy Policy.

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                A Company Limited by Guarantee Registered in Scotland No. SC154183
                                  Scottish Charity Number SC001528
                  Registered Office: Alba, Main Street, Golspie, Sutherland, KW10 6TG

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