2016 RASV Annual Report
The Royal Agricultural Society of Victoria (RASV) promotes and celebrates agriculture through events which connect industry with consumers and ultimately aims to improve the quality and increase demand for Victorian agricultural produce.
The Royal Agricultural Society of Victoria (RASV) promotes and celebrates agriculture through events which connect industry with consumers and ultimately aims to improve the quality and increase demand for Victorian agricultural produce.
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NOTES TO THE<br />
FINANCIAL STATEMENTS<br />
FOR THE YEAR ENDED 31 MARCH <strong>2016</strong><br />
15. FINANCIAL INSTRUMENTS<br />
(a) Financial risk management objectives and policies<br />
The company’s principal financial instruments comprise receivables, payables, and cash and cash equivalents. These activities expose<br />
the company to a variety of financial risks: market risk, interest rate risk, credit risk and liquidity risk.<br />
Financial risk management is the responsibility of the Board, which takes advice from the Audit and Risk Management Committee under<br />
an authorised Investment Policy. This policy outlines the key objective of achieving the maximum possible investment return within<br />
approved investment criteria and risk parameters.<br />
The following authorised investment instruments have been approved by the Board of Directors:<br />
• Cash Deposits<br />
• Short Term Money Market Trust Accounts<br />
• Fixed Interest Term Deposits<br />
• Australian Government Securities and Bonds<br />
• Bank Bills<br />
Authorised investment instruments may only be transacted with the following institutions:<br />
• Commonwealth Government<br />
• Victorian Government<br />
• Australian Banks or institutions with a Standard & Poors rating of A+ or higher<br />
The following financial instruments are specifically prohibited:<br />
• Foreign Exchange Transactions of a non–commercial nature<br />
• Derivatives<br />
• Australian or Foreign share transactions<br />
• Any transaction undertaken solely for the purpose of speculating<br />
In accordance with Board policy, certain levels of investments require Board approval:<br />
• For working capital, any intended investment in any particular instrument with a total holding in any one institution of<br />
higher than $10 Million at any time or $6 Million for a period greater than 90 days is to be ratified by the Board.<br />
• For investments, any intended investment in any particular instrument resulting in a transaction over $2 Million and a total<br />
holding in any one institution of higher than $5 Million is to be ratified by the Board.<br />
Any recommendation for the utilisation of investment instruments or institutions not separately authorised within the Investment<br />
Policy must be presented to the Board for approval. A mechanism for reporting all current investment instruments to the Audit and Risk<br />
Management Committee is undertaken.<br />
Although the company does not have documented policies and procedures other than an authorised investment policy, the Board<br />
manages the different types of risks to which the company is exposed by considering risk and monitoring levels of exposure to interest<br />
rates and by being aware of market forecasts for interest rates. Ageing analyses and monitoring of specific credit allowances are<br />
undertaken to manage credit risk, liquidity risk is monitored through general business budgets and forecasts.<br />
64 The Royal Agricultural Society of Victoria Limited
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