2019 Integrated Report

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2019 184 | PPS INTEGRATED REPORT 2019 Investment mandate This portfolio will be managed using a single-manager investment process that seeks to achieve medium to long-term capital growth and can invest in a spectrum of local and international securities within the parameters of Regulation 28 of the Pension Fund Act, No 24 of 1956. Typical investments The portfolio can include domestic equities, domestic bonds, domestic cash and domestic property. The portfolio may also invest in any listed or unlisted financial instruments, and international cash, international bonds, international property and international equities. Risk exposure A medium to high risk fund exposed to equity price risk, credit risk, currency risk, liquidity risk and interest rate risk, both domestically and internationally. (p) PPS Global Equity Fund Investment objective The Fund’s primary investment objective is to outperform the MSCI All Country World Index (net of fees), with an investment horizon of greater than seven years. Investment mandate This is a USD denominated portfolio and will be managed using a single-manager investment process that seeks to achieve long-term capital growth by investing in the listed equities of companies in both developed and emerging market economies. Typical investments The Fund will invest in a diversified portfolio of global equity and equity-related securities. The Fund may also hold ancillary liquid assets, collective investment schemes and hold cash positions. Investments will have a global focus insofar as investments are not confined or concentrated in any particular geographic region or market. Risk exposure A medium to high fund exposure to Market risk, Currency risk, Derivative risk, Liquidity risk, Counterparty risk and Developing market risk. 37. EVENTS AFTER FINANCIAL YEAR-END COVID-19 virus pandemic After the PPS 31 December 2019 financial year-end, there has been a wide-spread international outbreak of the Covid-19 virus originating in China, which has significantly affected lives, and entities and economic activity around the world. In 2020, many countries around the world have, amongst other radical actions, implemented national “lockdowns” as part of attempts to contain the spread of the virus. The South African Government inter alia implemented a 21-day national “lockdown” starting at midnight on 26 March 2020. As a result of the spread of the virus and the reactions thereto, there have been material adverse financial effects, inter alia on stock markets around the world. Financial effects In terms of IFRS, these events are material “non-adjusting events” occurring after the reporting period, requiring disclosure of the nature of the event, and an estimate of its financial effect, or a statement that such an estimate cannot be made. It is not possible to provide accurate estimates of the financial effects of the pandemic on the Group which is inherently uncertain, but the following are potential future financial effects on the Group: 36.MANAGEMENT OF RISKS (continued) 36.3 Financial risk management (continued)