Management has a fiduciary responsibility to safeguard the assets of the company. The primary requirement is preservation of capital and availability of cash to ensure safety and liquidity. The secondary goal is to provide the best return within a reasonable level of risk. It is company’s policy to be fiscally conservative. Our cash and investment position is important to the company’s future and our shareholders. Available cash is to be invested in a high quality portfolio which:
In order to assure absolute preservation of capital, strict investment guidelines will be adhered to at all times. The objective of these guidelines will be to provide maximum investment return with no potential loss of principal. All investments will be held in a custodial account in the name of company. This will assure absolute safety of those investments from any adverse external events and provide the necessary fiduciary controls of any cash or investments by individuals approved by the Board.
Ongoing liquidity needs will be monitored regularly to assure cash flow requirements are met on a day to day, cyclical and long term basis. A liquidity account will be established within the investment portfolio to assure same day availability of moneys necessary to fund daily operations on a planned or as needed basis. Further, the portfolio will be constructed to meet a forecasted minimum 6 months of cash availability at all times.
Cash may be kept in money market accounts of institutions rated A or higher by Standard & Poor’s or Moody’s. All securities (non-money market funds) are to be purchased through banking and brokerage firms of high quality and reputation, with a history of making markets for the securities in which they invest. All assets must have a readily ascertainable market value and must be readily marketable. Investments may be made from the following approved list of investment securities.
The investment guidelines have been instituted to meet the above objectives. The guidelines set forth herein have been created as a tool of management and should be interpreted as such. This tool is to be used to properly manage all investable cash balances to assure safekeeping of these assets. The Chief Financial Officer or individual appointed by the Board of Directors and his/her authorized employees are responsible for securing and managing investment and cash for operations.
Trends for a given company or industry must be reviewed periodically by the assigned Investment Manager to assure continuing credit quality of investments and implementation of any appropriate portfolio adjustments to maintain this credit quality or percentage positions.
The portfolio will be invested in short-term instruments that have maturities no longer than 24 months. However, the average maturity of the portfolio will be maintained at 12 months or less.