AVBOB Financial Statements 2018

99 AVBOB MUTUAL ASSURANCE SOCIETY AND ITS SUBSIDIARIES NOTES TO THE SUMMARISED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018 (continued) 5. Management of insurance and financial risk (continued) 5.2 Capital management (continued) Core aspects of the mandate given to the asset managers: • • No more than 70% of the total assets may be invested in equity risk assets. • A target allocation of 30% of the total assets to be invested in local liquid assets. • Investments may only be made in listed securities and shares. • • • • No scrip lending is allowed. Board guideline 2018 2017 % % R 000 % R 000 70 72 12 295 179 69 10 227 340 Property for own use and investment property 2 393 109 2 327 097 Equity risk assets Investments and financial assets Listed shares 39 6 626 652 36 5 309 065 Unlisted shares 4 725 873 5 727 107 Foreign investments 22 3 627 837 20 2 964 722 Other assets 5 921 708 6 899 349 Liquid assets 30 28 4 684 584 31 4 637 678 Cash and cash equivalents 9 1 482 553 17 2 487 607 Securities and bonds 18 3 102 031 14 2 138 886 Unlisted securities 1 100 000 - 11 185 Total assets 100 100 16 979 763 100 14 865 018 0 In the other portfolios, investments in equities and securities must be listed on a recognised exchange and listed securities must meet minimum credit rating criteria. Derivative instruments are only allowed for efficient portfolio management and hedging purposes. The effective exposure for all derivative positions are limited to 10% of the fair value of the investment portfolio. Effective exposure to any over-the-counter counterparty is limited to 7.5% of the investment portfolio. The following table compares the assets of the Society with the asset distribution guidelines: The total asset distribution of the Society must be managed in accordance with the guidelines set by the Prudential Authority. Investments in the black economic empowerment (BEE) portfolio are restricted to those that should be recognised in terms of the Financial Sector Charter. All unlisted investments require written approval. 99