27. LEASE LIABILITIES (CONTINUED) Movements of lease liabilities for the reporting year are as follows: Group Company 2025 2024 2025 2024 $ $ $ $ Balance at beginning of year 3,107,796 2,898,193 1,617,644 1,485,347 Currency translation differences (6,092) (1,437) – – Additions 304,164 578,930 – 247,217 Accretion of interest (Note 6) 162,268 166,964 82,848 82,694 Lease payments (555,553) (522,187) (226,641) (197,614) Lease termination/modification – (12,667) – – Balance at end of year 3,012,583 3,107,796 1,473,851 1,617,644 The lease liabilities above include finance leases under hire purchase agreements. The lease liabilities above do not include the short-term leases of less than 12 months and leases of low-value underlying assets. Variable lease payments which do not depend on an index or a rate or based on a percentage of revenue are not included from the initial measurement of the lease liability and the right-of-use assets. The property, plant and equipment acquired under finance lease agreements and right-of-use assets are disclosed in Note 11 and Note 12 respectively. Only variable lease payments that depend on an index or a rate; payments that vary to reflect changes in market rental rates are included in the measurement of the lease liability. Such variable amounts that are unpaid at the commencement date are included in the measurement of lease liability. Variable lease payments would also include extension options and termination options; residual value guarantees; and leases not yet commenced to which the lessee is committed. The variable lease payments based on revenue are recognised in profit or loss in the year in which the condition that triggers those payments occurs. A summary of the maturity analysis of lease liabilities is disclosed in Note 29E. Total cash outflows for leases for the year ended 31 December 2025 and 31 December 2024 are shown in the statement of cash flows. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is re-measured to reflect any reassessment or modification, or if there are changes to in-substance fixed payments. When the lease liability is re-measured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero. There were no future cash outflows to which the lessee is potentially exposed that are not reflected in the measurement of lease liabilities above. At the end of the reporting year, there were no commitments on leases which had not yet commenced. Apart from the disclosures made in other notes to the financial statements, amounts relating to leases include the following: Group Company 2025 2024 2025 2024 $ $ $ $ Expense relating to short-term leases included in other operating expenses 265,624 262,646 337,600 334,980 MEGACHEM LIMITED ANNUAL REPORT 2025 161 31 DECEMBER 2025 NOTES TO THE FINANCIAL STATEMENTS
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