8. INCOME TAX EXPENSE (CONTINUED) 8C. Deferred tax balance in the statement of financial position (Continued) Deferred income tax assets are recognised for tax losses carried forward to the extent that realisation of the related tax benefits through future taxable profits is probable. The Group has unrecognised tax losses and capital allowances of $4,014,000 and $89,000 (2024: $5,798,000 and $90,000) respectively which can be carried forward and used to offset against future taxable income subject to meeting certain statutory requirements by those companies with unrecognised tax losses and capital allowances in their respective countries of incorporation. These tax losses have no expiry date except for $1,807,000 (2024: $1,881,000) which will expire between 2026 to 2033 (2024: expire between 2025 to 2032). Unutilised capital allowances do not have expiry dates. For the Singapore companies, the realisation of the future income tax benefits from tax losses carry forwards and temporary differences from capital allowances is available for an unlimited future year, subject to conditions imposed by law including the retention of majority shareholders as defined. A deferred tax liability or asset is recognised for all taxable temporary differences associated with investments in subsidiaries and associates except where the Group is able to control the timing of the reversal of the taxable temporary difference and it is probable that the taxable temporary difference will not reverse in the foreseeable future or for deductible temporary differences, they will not reverse in the foreseeable future and they cannot be utilised against taxable profits. 9. DIVIDENDS Group and Company 2025 2024 $ $ Final tax exempt dividend paid of 0.5 cents (2024: tax exempt NIL cents) per share in respect of the previous reporting year 666,500 – Interim tax exempt dividend paid of 0.5 cents (2024: tax exempt Nil cents) per share in respect of current reporting year 666,500 666,500 Total dividends paid in the year 1,333,000 666,500 In respect of the current reporting year, the directors have proposed that a final tax exempt dividend of 0.5 cents per share, subject to the approval by shareholders at the next Annual General Meeting to be convened. This dividend has not been included as liability in these financial statements. 10. EARNINGS PER SHARE Basic earnings per share is calculated by dividing the net profit attributable to equity holders of the Company by the weighted average number of ordinary shares of no par value in issue during the reporting year. Group 2025 2024 The calculation of earnings per share is based on the following: Net profit for the year attributable to equity holders of the Company ($) 3,834,646 7,905,459 Weighted average number of ordinary shares on issue for basic earnings per share 133,300,000 133,300,000 The Group and Company do not have any discontinued operations. There is no dilution of earnings per share as there are no dilutive potential ordinary shares outstanding as at the year end. The denominators used are the same as those detailed above for both basic and diluted earnings per share. MEGACHEM LIMITED ANNUAL REPORT 2025 138 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2025
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