18. TRADE AND OTHER RECEIVABLES Group Company 2025 2024 2025 2024 $ $ $ $ Current: Trade receivables: Non-related parties 23,879,502 23,287,120 6,310,326 6,776,872 Subsidiaries – – 6,957,313 8,004,848 Associates 21,608 12,480 21,608 12,480 Less: allowance for impairment – non-related parties (327,784) (432,295) (49,033) (49,094) Less: allowance for impairment – subsidiaries – – (2,330,000) (2,105,000) Net trade receivables – subtotal 23,573,326 22,867,305 10,910,214 12,640,106 Other receivables: Short term loans to subsidiaries – – 1,718,384 1,496,704 Long term loans to subsidiaries – – – 229,167 Subsidiaries – – 2,305,315 2,400,285 Advance payments to subsidiary – – 138,190 147,370 Non-related parties 568,107 411,739 1,328 1,358 Less: allowance for impairment – subsidiaries – – (1,099,000) (1,435,000) Net other receivables – subtotal 568,107 411,739 3,064,217 2,839,884 Total net trade and other receivables – current 24,141,433 23,279,044 13,974,431 15,479,990 The non-trade amounts due from subsidiaries are unsecured, interest-free and are repayable on demand. The short term loans to subsidiaries are unsecured, bear interest at 1.8% to 7.9% (2024: 1.8% to 8.2%) per annum and are repayable on demand. In the previous reporting year, the short term and long term loans receivables from the subsidiaries, Megachem India, amounted to $750,433 and Megachem Australia, amounted to $902,369 were converted to additional costs of investment in these two subsidiaries (see Note 14). The carrying values of trade and other receivables approximate their fair values due to the short-term maturity. Certain trade and other receivables are pledged as security for banking facilities as at 31 December 2025 and 31 December 2024 (see Note 25). For the Group and the Company, the expected credit losses (“ECL”) on the trade receivables from non-related parties are based on the simplified approach to measuring the ECL which uses a lifetime ECL allowance approach for all trade receivables recognised from initial recognition of these assets. These assets are grouped based on shared credit risk characteristics and the days past due for measuring the ECL. The allowance matrix is based on the historical observed default rates (over a year of 36 months) over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date the historical observed default rates are updated and changes in the forward-looking estimates are analysed. MEGACHEM LIMITED ANNUAL REPORT 2025 151 31 DECEMBER 2025 NOTES TO THE FINANCIAL STATEMENTS
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