The American Club 2022/2023 Annual Report

PAGE 70

NOTES TO FINANCIAL STATEMENTS 30 JUNE 2023

4. FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL MANAGEMENT (cont’d)

(b) Financial risk management policies and objectives

The Club’s principal financial instruments, other than derivative financial instruments and investment securities, comprise cash and short term deposits. The Club has various other financial assets and liabilities such as amounts due from members and trade payables, which arise directly from its operations. Risk management is carried out by the Club’s investment advisor under policies approved by the General Committee. Compliance with policies and exposure limits are reviewed by the Investment Sub-committee and reported to the General Committee on a regular basis. The Club is exposed to financial risks arising from its operations and the use of financial instruments. The main risks arising from the Club’s financial instruments are foreign currency risk, interest rate risk, credit risk, market price risk and liquidity risk. The General Committee reviews and agrees to policies for managing these risks as indicated below: Foreign exchange risk sensitivity analysis The following table details the sensitivity to a 3% increase or decrease in the foreign currency against the functional currency of the Club. 3% is the sensitivity rate used when reporting foreign currency risks internally to key management personnel and represents managements’ assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 3% change in foreign currency rates. (i) Foreign exchange risk management

Liabilities

Assets

$

$

2023 United states dollar

5,880,503

11,789,152

Hongkong dollar

-

815,661

British pound

-

356,442

Japanese yen

-

283,096

Euro

-

203,459

Australian dollar

-

185,847

Swiss franc

-

130,814

Chinese yuan

-

3,069

If the relevant foreign currency strengthens by 3% against the functional currency of the Club, loss for the year will increase (decrease) by:

Profit and loss

$

$

2023 United states dollar

177,259

(177,259)

Hongkong dollar

24,470

(24,470)

British pound

10,693

(10,693)

Japanese yen

8,493

(8,493)

Euro

6,104

(6,104)

Australian dollar

5,575

(5,575)

Swiss franc

3,924

(3,924)

Chinese yuan

92

(92)

THE AMERICAN CLUB SINGAPORE ANNUAL REPORT 2022 / 2023