146 MEGACHEM LIMITED Notes to The Financial Statements 31 December 2024 28. Financial assets/(liabilities) at fair value through profit or loss Group Company 2024 2023 2024 2023 $ $ $ $ Forward foreign exchange contracts Balance at beginning of year (50,864) (74,912) – 164 Realisation of forward contracts 50,864 74,912 – (164) Currency translation differences (28) (406) – – Unrealised fair value loss (Note 5) (8,690) (50,458) (567) – Unrealised fair value gains (Note 4) 44,957 – – – Balance at end of year 36,239 (50,864) (567) – Presented in statement of financial position as: Financial assets at FVTPL (Note 19) 44,923 – – – Financial liabilities at FVTPL (8,684) (50,864) (567) – Net 36,239 (50,864) (567) – Forward foreign exchange contracts are entered into to manage exposure to fluctuations in foreign currency exchange rates on expected sales and purchases denominated in United States Dollar (“USD”) and Euro (“Euro”). The table below sets out the notional principal amounts of the outstanding forward foreign exchange contracts of the Group and the Company, and their corresponding favourable and unfavourable fair values (Level 2) at the reporting date. The amount of notional amount outstanding is not necessarily a measure or indication of market risk. Notional principal Favourable fair value Unfavourable fair value 2024 2023 2024 2023 2024 2023 $ $ $ $ $ $ Group Purchase Euro 902,398 851,782 – – (7,979) (81) Purchase USD 2,018,933 1,601,342 44,923 – (705) 50,945 2,921,331 2,453,124 44,923 – (8,684) 50,864 2024 2023 2024 2023 2024 2023 $ $ $ $ $ $ Company Purchase USD 272,140 – – – (567) – 272,140 – – – (567) – The fair value (Level 2) of forward foreign exchange contracts is based on the current value of the difference between the contractual exchange rate and the market rate at the end of the reporting year. The valuation technique uses market observable inputs. At 31 December 2024, the settlement date on forward foreign exchange contracts for the Group and the Company ranges from 1 to 3 months (2023: 1 to 5 months) and 3 months (2023: Nil) respectively.
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