Ntegrator International Ltd. - Annual Report 2020

87 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2020 22. Accumulated losses Movement in accumulated losses for the Company is as follows: Company 2020 2019 S$’000 S$’000 Beginning of financial year (838) (1,280) Net profit 287 211 Share option lapsed - 231 End of financial year (551) (838) 23. Contingent liabilities Group Performance guarantees The Group has issued performance guarantees via banks and insurance companies amounting to S$1.0 million (2019: S$3.9 million) to its subsidiary corporations’ customers to secure the project contracts. Company Corporate guarantees The Company has issued corporate guarantees amounting to S$37.8 million (2019: S$38.3 million) to banks for borrowings of its subsidiary corporations. These bank borrowings of the subsidiary corporations amounted to S$14.9 million (2019: S$11.2 million) at the reporting date. The Company has evaluated that the fair values of the corporate guarantees are not material and is of the view that the consequential liabilities derived from its guarantees to the banks with regard to the subsidiary corporations are minimal. The subsidiary corporations for which the guarantees were provided are in favourable equity positions, with no default in the payment of borrowings and credit facilities. 24. Financial risk management Financial risk factors The Group’s activities expose it to market risk (including currency risk, price risk and interest rate risk), credit risk, liquidity risk and capital risk. The Group’s overall risk management strategy seeks to minimise any adverse effects from the unpredictability of financial markets on the Group’s financial performance. It is, and has been throughout the financial year, the Group’s policy that no trading in derivative financial instruments shall be undertaken. The Board of Directors is responsible for setting the objectives and underlying principles of financial risk management for the Group. This includes establishing detailed policies such as authority levels, oversight responsibilities, risk identification and measurement and exposure limits. Financial risk management is carried out by the finance department in accordance with the policies set. The finance personnel identifies and evaluates financial risks in close co-operation with the Group’s operating units. The finance personnel measures actual exposures against the limits set and prepares periodic reports for review by the Financial Controller. Regular reports are also submitted to the Board of Directors.