NTUC Income AR 2019

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 14. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED) 2018 Contract or Underlying Principal $’000 Positive Revaluation $’000 Negative Revaluation $’000 Net $’000 Life Insurance Par Fund Forward foreign exchange 11,372,586 88,462 15,192 73,270 Options – – – – Interest rate swaps 524,513 11,853 2,027 9,826 Futures 491,988 3,649 3,231 418 Cross currency swaps 893,972 9,193 42,268 (33,075) 13,283,059 113,157 62,718 50,439 Life Insurance Non-Par Fund Forward foreign exchange 345,850 3,047 386 2,661 Cross currency swaps 234,862 3,523 1,328 2,195 580,712 6,570 1,714 4,856 Investment-Linked Fund Forward foreign exchange 199,657 1,168 369 799 Futures 105,216 491 1,186 (695) Cross currency swaps 1,335 – 12 (12) 306,208 1,659 1,567 92 General Insurance Fund Forward foreign exchange 245,880 2,115 29 2,086 Shareholders’ Fund Forward foreign exchange 703,399 5,522 713 4,809 Futures 79,907 560 785 (225) Cross currency swaps 18,159 666 25 641 801,465 6,748 1,523 5,225 Total 15,217,324 130,249 67,551 62,698 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. ANNUAL REPORT 2019 119