Page 27 - AYO Governance Manual Draft

Fixed Asset Acquisitions and Disposals

Acquisitions
When a new or replacement asset is required by the Society,
 investigate the most cost effective method (leasing or purchasing)
 obtain quotes
 choose best value for money and seek financial support via a grant application

Disposals
 Where an asset has become obsolete, worn out, surplus to requirements or minimal in value,
disposal should be considered.
 All assets identified for disposal shall be valued.
 Assets shall not be sold at a discounted rate to staff if a greater value could be realised by disposing
it by another method.
 Staff disposing of the asset shall not benefit from the disposal.
 There shall not be an actual or perceived undue benefit to the successful purchaser.
 A report shall be prepared for the Executive Committee with reasons for the disposal, the process,
net disposal proceeds and any issues that may arise from the disposal.

Investments
Investment strategy, decisions and management are the responsibility of the EC, however the EC may
delegate this responsibility to a Finance Sub-Committee. Investments will be reviewed at least twice per year
and minutes of all meetings and actions of the Finance Sub-Committee will be immediately submitted to the
EC.
Objectives
 To produce the highest financial return within an acceptable level of risk.
 Long term reserves should be invested to maintain capital value; the resulting income may be used
in the ongoing activities of the AYO.
 Short term reserves should be invested to preserve the capital value with a minimum level of risk
whilst generating an income to support the on‐going activities of the AYO. Assets should be readily
available to meet unanticipated cash flow requirements.
Risk
The key risks to the long term reserves are inflation and unexpected loss of capital value. The assets should
be invested to mitigate these risks over the long term. The short term reserves are held to provide financial
security, and may be required at short notice. As such, capital volatility cannot be tolerated and investment
of these assets should be focused on minimising this.
Assets
Assets should be invested widely and diversified by asset class, by manager and by security. Asset classes
could include cash, bonds, equities and any other asset that is deemed suitable for AYO.
Currency
The base currency of the investment portfolio is $NZ. Within the long term reserves, investments may be
made in non‐$NZ assets provided they may be traded on the NZ Stock Exchange. Short term reserves should
be held in $NZ.
Credit Ratings
Cash balances should be deposited with banks with a minimum rating of BBB. Multiple banks should be used
if total deposits exceed $150,000.
Ethical Investment
No investment, direct or indirect, may be made in companies that generate more than 10% of revenues from
alcohol or tobacco.