13. INVESTMENT PROPERTY (CONTINUED) The investment property was leased out for the reporting years ended 31 December 2025 and 31 December 2024. The direct operating expenses (including repairs and maintenance) arising from the investment property that generated rental income during the year are not material. 14. INVESTMENTS IN SUBSIDIARIES Company 2025 2024 $ $ Movements during the year: Balance at beginning of year 7,936,563 5,723,472 Acquisition of equity shares from non-controlling interests# – 1,160,289 Subscriptions of additional equity shares of subsidiaries^ – 1,652,802 Allowance for impairment (111,000) (600,000) Balance at end of year 7,825,563 7,936,563 Total cost comprising: Unquoted equity shares at cost 9,901,063 9,901,063 Allowance for impairment (2,075,500) (1,964,500) Total at cost 7,825,563 7,936,563 Movements in allowance for impairment: At beginning of year 1,964,500 1,364,500 Impairment loss charged to profit or loss included in other losses* 111,000 600,000 At end of the year 2,075,500 1,964,500 # Acquisition of non-controlling interest without change in control In the previous reporting year ended 31 December 2024, the Company acquired 9% and 12% of the equity interests held by non-controlling shareholders in the subsidiaries, Megachem Raya Pte Ltd (“Megachem Raya”) and Megachem (UK) Ltd (“Megachem UK”), for cash considerations of $766,874 and $393,415 respectively. Upon completion of these acquisitions, the Company’s equity interests held in Megachem Raya and Megachem UK had increased to 83% and 97% respectively. The carrying amount of the non-controlling interests of Megachem Raya and Megachem UK at date of acquisitions were approximately $719,461 and $332,332. The difference between the changes in the balance of non-controlling interests and the considerations the Company paid, amounting to $108,496 in total, was recognised in retained earnings. ^ In the previous reporting year ended 31 December 2024, the Company’s receivables from Megachem Specialty Chemicals (I) Private Limited (“Megachem India”) and Megachem Australia Pty Ltd (“Megachem Australia”) of $750,433 and $902,369 respectively were converted to the costs of investments in these two subsidiaries. * The additional impairment loss was recognised on the Company’s investment in Megachem India during the reporting year. The decreasing performance of Megachem India Limited was considered sufficient evidence for recognition of impairment loss as at 31 December 2025. MEGACHEM LIMITED ANNUAL REPORT 2025 145 31 DECEMBER 2025 NOTES TO THE FINANCIAL STATEMENTS
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