2020-07-10 Special Meeting Agenda

Page 18 of 59

INVESTMENT OF SURPLUS FUNDS POLICY

REPORTING
The Financial Services Manager will prepare a monthly report and evaluation of the transactions,
concentrations, performance and compliance of the investment portfolio. The report will include:
e   summary of securities held at the end of the reporting period by counterparty;
e   liquidity of the portfolio as at reporting date;
e   percentage of the portfolio considered ethical investment;
e   percentage of the portfolio held by investment risk category; and
e   performance of the portfolio [relative to Bloomberg AusBond Bank Bill Index benchmark and/or
    BBSW].
On an annual basis, the policy will be reviewed and amended where required, with any amendments
to be approved by Council prior to implementation as part of annual budget adoption.

PERFORMANCE MEASUREMENT
The investment return for the portfolio shall be measured using the market value of the portfolio,
including withdrawals and deposits, and total performance of the portfolio compared to the
Bloomberg AusBond Bank Bill Index. This is to include changes in the capital value of assets held
(where applicable), income from managed investment portfolio assets, proceeds of sales of assets
sold and cost of assets acquired. The market value of the portfolio is to be calculated at least monthly
to coincide with monthly reporting. In defining market value, at least two pricing sources should be
included in the valuation of the securities.

DEFINITIONS
BBSW - Bank Bill Swap Rate — This is the daily calculation of the yields on bank bills of 1, 2, 3, 4,
5, and 6 month maturities used for the setting of financial arrangements.
Bloomberg AusBond Bank Bill Index — widely considered to be the industry benchmark for short
term cash fund performance and is used by market participants as a means of comparing the returns
generated by the various cash funds available in the market.
Credit Risk — is the risk of loss due to the failure of an investment issuer or guarantor
Ethical Investment Principles — Investment in companies or industries that promote positive
approaches to environmental, social and corporate governance issues; or the avoidance of
investment in industries deemed harmful to health or the environment. These principles have been
recognised by the United Nations Principles for Responsible Investment. '
Financial Institution is defined as an authorised deposit-taking institution within the meaning of the
Banking Act 1959 (Cwlth), Section 5.2
Investments are defined as arrangements that are undertaken or acquired for producing income
and apply only to the cash investments of Noosa Shire Council.
Market Value of the portfolio is the book value of fixed term fixed interest deposits plus a market
value assessment of commercial paper, bank bills, and bonds or floating rate notes.
QIC — Queensland Investment Corporation.
QTC — Queensland Treasury Corporation.

+ Further information on the United Nations Principles for Responsible Investment, including a schedule of Australian signatories, can be
obtained from the following website http://www.unpri.org/principles/
? For a list of authorised deposit taking institutions, refer to the website of the Australian Prudential Regulation Authority:
http://www.apra.gov.au/adi/.                                                              _     ;
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