The American Club 2016/2017 Annual Report

THE AMERICAN CLUB

NOTES TO FINANCIAL STATEMENTS 30 June 2017

9. PROPERTY, PLANT AND EQUIPMENT (cont’d)

The Club appointed a professional independent appraiser to assess the current market value of the land and building at 10 Claymore Hill, Singapore 229573. The valuation was based on cost method, comprising 2 components; value of land and value of improvement erected thereon. Value of land is then assessed based on a combination of market comparison method and residual method. The report, dated 24 July 2015, reflects the following valuation:

Land value : $89,000,000 Building value : $32,000,000

The assets will remain stated at cost less accumulated depreciation and any accumulated impairment losses. Freehold land has an unlimited useful life and therefore is not depreciated.

10. INVESTMENT SECURITIES

The Club appointed investment advisors to manage the investment portfolio. Under the direction of the General Committee, the Finance Committee and Investment Sub-Committee, the investment advisors invested the majority of the Club’s cash holdings into various mutual funds.

2017

2016

$

$

Unquoted mutual funds Alternative investments Total investment securities

-

2,611,694

13,634 13,385 13,634 2,625,079

Unquoted mutual funds refer to the Global Access Balanced Plus Asia Portfolio (“GAP”). It invests primarily in global markets and focuses on generating risk-adjusted total returns from a diversified portfolio of equity, fixed income, commodities and hedge funds. The GAP seeks to implement a long-term investment strategy the focus of which is the moderate growth as well as preservation of capital through investment exposure to assets with lower volatility and stable medium-term growth, while maintaining exposure to assets with a greater degree of risk and return. The investment manager seeks to generate risk-adjusted total returns over a medium term investment cycle while preserving capital and liquidity. The fair value of the unquoted mutual funds is determined directly by reference to the valuation report by the investment advisors of the investment funds. The GAP uses the Net Asset Value (“NAV”) to determine the fair value of all the underlying investments which (a) do not have a readily determinable fair value and (b) either have the attributes of an investment company or prepare their financial statements consistent with the measurement principles of an investment company. The values assigned to these investments are based on available information and do not necessarily represent amounts that might ultimately be realised, as such amounts depend on future circumstances and cannot reasonably be determined until the individual investments are actually liquidated.

54 2016/17 ANNUAL REPORT