NTUC Income AR 2018

Notes to the Financial Statements For the Financial Year Ended 31 December 2018 14. Derivative financial instruments (continued) 2017 Contract or Underlying Principal $’000 Positive Revaluation $’000 Negative Revaluation $’000 Net $’000 Life Insurance Par Fund Forward foreign exchange 10,785,383 97,781 35,850 61,931 Options 11,122 – 28 (28) Interest rate swaps 542,196 12,493 3,775 8,718 Futures 474,355 2,397 1,079 1,318 Cross currency swaps 967,888 13,456 35,235 (21,779) Bond forwards 13,649 84 139 (55) 12,794,593 126,211 76,106 50,105 Life Insurance Non-Par Fund Forward foreign exchange 458,031 6,858 141 6,717 Cross currency swaps 120,463 4,989 – 4,989 578,494 11,847 141 11,706 Investment-Linked Fund Forward foreign exchange 160,790 1,072 412 660 Futures 16,276 509 81 428 Cross currency swaps 1,335 19 – 19 178,401 1,600 493 1,107 General Insurance Fund Forward foreign exchange 303,849 3,708 80 3,628 Shareholders’ Fund Forward foreign exchange 696,220 6,717 2,254 4,463 Futures 57,616 287 199 88 Cross currency swaps 24,137 754 29 725 777,973 7,758 2,482 5,276 Total 14,633,310 151,124 79,302 71,822 At the reporting date, all derivative financial instruments balances are current, as they are classified as ‘held for trading’ in accordance with FRS 39 Financial Instruments: Recognition and Measurement . The Co-operative enters into master netting arrangements with counterparties. The credit risk associated with favourable contracts is reduced by the master netting arrangement to the extent that if an event of default occurs, all amounts with the counterparty are settled on a net basis. Master netting arrangements do not meet the criteria for offsetting of financial assets and liabilities on the statement of financial position, as the legal right to set off the transactions is conditional upon default. 111 2018 ANNUAL REPORT