v3.26.1
Financial risk management
 6 Months Ended
Dec. 31, 2025
Financial Risk Management  
Financial risk management

 

22. Financial risk management

 

The Group’s activities expose it to a variety of financial risks from its operations. The key financial risks include credit risk, market risk (including foreign currency risk, interest rate risk) and liquidity risk.

 

The Directors review and agree policies and procedures for the management of these risks, which are executed by the management team. It is, and has been throughout the current and previous financial period/year, the Group’s policy that no trading in derivatives for speculative purposes shall be undertaken.

 

The following sections provide details regarding the Group’s exposure to the abovementioned financial risks and the objectives, policies and processes for the management of these risks.

 

There has been no change to the Group’s exposure to these financial risks or the manner in which it manages and measures the risks.

 

  a) Credit risk

 

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in a loss to the Group. The Group’s exposure to credit risk arises primarily from trade and other receivables.

 

 

Basel Medical Group Ltd and its Subsidiaries

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the financial period ended December 31, 2025

 

22. Financial risk management (Continued)

 

  a) Credit risk (Continued)

 

The Group has adopted a policy of only dealing with creditworthy counterparties. The Group performs ongoing credit evaluation of its counterparties’ financial condition and generally do not require a collateral.

 

The Group considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period.

 

The Group has determined the default event on a financial asset to be when internal and/or external information indicates that the financial asset is unlikely to be received, which could include default of contractual payments due for more than 60 days, default of interest due for more than 30 days or there is significant difficulty of the counterparty.

 

To minimise credit risk, the Group has developed and maintained the Group’s credit risk gradings to categorise exposures according to their degree of risk of default. The credit rating information is supplied by publicly available financial information and the Group’s own trading records to rate its major customers and other debtors. The Group considers available reasonable and supportive forward-looking information which includes the following indicators:

 

  - Actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the debtor’s ability to meet its obligations
  - Actual or expected significant changes in the operating results of the debtor
  - Significant increases in credit risk on other financial instruments of the same debtor
  - Significant changes in the expected performance and behaviour of the debtor, including changes in the payment status of debtors in the Group and changes in the operating results of the debtor.

 

Regardless of the analysis above, a significant increase in credit risk is presumed if a debtor is more than 30 days past due in making contractual payment.

 

The Group determined that its financial assets are credit-impaired when:

 

  - There is significant difficulty of the debtor
  - A breach of contract, such as a default or past due event
  - It is becoming probable that the debtor will enter bankruptcy or other financial reorganisation
  - There is a disappearance of an active market for that financial asset because of financial difficulty

 

 

Basel Medical Group Ltd and its Subsidiaries

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the financial period ended December 31, 2025

 

22. Financial risk management (Continued)

 

  a) Credit risk (Continued)

 

The Group categorises a receivable for potential write-off when a debtor fails to make contractual payments more than 120 days past due. Financial assets are written off when there is evidence indicating that the debtor is in severe financial difficulty and the debtor has no realistic prospect of recovery.

 

The Group’s current credit risk grading framework comprises the following categories:

 

Category   Definition of category  

Basis for recognising

expected credit loss

(ECL)

I   Counterparty has a low risk of default and does not have any past-due amounts.   12-month ECL
II   Amount is >30 days past due or there has been a significant increase in credit risk since initial recognition.   Lifetime ECL - not credit-impaired
III   Amount is >60 days past due or there is evidence indicating the asset is credit-impaired (in default).   Lifetime ECL - credit impaired
IV   There is evidence indicating that the debtor is in severe financial difficulty and the debtor has no realistic prospect of recovery.   Amount is written off

 

The table below details the credit quality of the Group’s financial assets, as well as maximum exposure to credit risk by credit risk rating categories:

 

          12-month            
        or  Gross      Net 
          lifetime  carrying   Loss   carrying 
   Note   Category  ECL  amount   allowance   amount 
          US$   US$   US$ 
December 31, 2025                          
Trade receivables   12   Note 1  Lifetime ECL -simplified   2,971,932    (457,557)   2,514,375 
Deposits   12   I  12-month ECL   5,489,917    -    5,489,917 
Other receivables   12   I  12-month ECL   154,162    -    154,162 
                    (457,557)     

 

 

Basel Medical Group Ltd and its Subsidiaries

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the financial period ended December 31, 2025

 

22. Financial risk management (Continued)

 

  a) Credit risk (Continued)

 

          12-month  Gross       Net 
          or lifetime  carrying   Loss   carrying 
   Note   Category  ECL  amount   allowance   amount 
             S$   S$   S$ 
December 31, 2025                          
Trade receivables   12   Note 1  Lifetime ECL -simplified   3,821,607    (588,373)   3,233,234 
Deposits   12   I  12-month ECL   7,105,501    -    7,105,501 
Other receivables   12   I  12-month ECL   198,237    -    198,237 
                    (588,373)     
                           
June 30, 2025 (Audited)                          
Trade receivables   12   Note 1  Lifetime ECL -simplified   2,740,055    (588,373)   2,151,682 
Deposits   12   I  12-month ECL   6,996,631    -    6,996,631 
Other receivables   12   I  12-month ECL   134,188    -    134,188 
                    (588,373)     

 

Trade receivables (Note 1)

 

The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. The Group determines the ECL by using a provision matrix, estimated based on historical credit loss experience based on the past due status of the debtors, adjusted as appropriate to reflect current conditions and estimates of future economic conditions.

 

 

Basel Medical Group Ltd and its Subsidiaries

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the financial period ended December 31, 2025

 

22. Financial risk management (Continued)

 

  a) Credit risk (Continued)

 

   due   1 – 60 days   61 – 120 days   > 120 days   > 365 days   Total 
   Trade receivables 
   Days past due 
   Not past                     
   due   1 – 60 days   61 – 120 days   > 120 days   > 365 days   Total 
   US$   US$   US$   US$   US$   US$ 
                         
December 31, 2025                              
ECL rate   7%   11%   22%   26%   26%     
Estimated total gross carrying amount at   693,923    1,130,636    312,436    396,665    438,271    2,971,931 
ECL   (49,180)   (124,348)   (69,443)   (101,929)   (112,656)   (457,556)
                             2,514,375 

 

   due   1 – 60 days   61 – 120 days   > 120 days   > 365 days   Total 
   Trade receivables 
   Days past due 
   Not past                     
   due   1 – 60 days   61 – 120 days   > 120 days   > 365 days   Total 
   S$   S$   S$   S$   S$   S$ 
                         
December 31, 2025                              
ECL rate   7%   11%   22%   26%   26%     
Estimated total gross carrying amount at   892,316    1,453,885    401,761    510,072    563,573    3,821,607 
ECL   (63,241)   (159,899)   (89,297)   (131,071)   (144,865)   (588,373)
                             3,233,234 
                               
June 30, 2025 (Audited)                              
ECL rate   15%   54%   54%   59%   59%     
Estimated total gross carrying amount at   804,724    979,987    244,561    386,405    324,378    2,740,055 
ECL   (116,455)   (174,010)   (68,020)   (135,819)   (94,069)   (588,373)
Other receivables   -    15,760    31,496    18,146    68,786    134,188 
                             2,285,870 

 

Information regarding movement of loss of allowance of trade receivables is disclosed in Note 12.

 

 

Basel Medical Group Ltd and its Subsidiaries

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the financial period ended December 31, 2025

 

22. Financial risk management (Continued)

 

  a) Credit risk (Continued)

 

Excessive risk concentration

 

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Group’s performance to developments affecting a particular industry.

 

Exposure to credit risk

 

The Group have no significant concentration of credit risk other than those balances with related company comprising 1% (June 30, 2025: 1%) of trade receivables. The Group has credit policies and procedures in place to minimise and mitigate its credit risk exposure.

 

Other receivables, amount due from a director and related parties

 

The Group assessed the latest performance and financial position of the counterparties, adjusted for the future outlook of the industry in which the counterparties operate in, and concluded that there has been no significant increase in the credit risk since the initial recognition of the financial assets. Accordingly, the Group measured the impairment loss allowance using 12-month ECL and determined that the ECL is insignificant.

 

  b) Market risk

 

Market risk is the risk that changes in market prices, such as interest rates and foreign exchange rates will affect the Group’s income. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return on risk.

 

Foreign currency risk

 

The Group’s foreign exchange risk results mainly from cash flows from transactions denominated in foreign currencies. At present, the Group does not have any formal policy for hedging against currency risk. The Group ensures that the net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates, where necessary, to address short term imbalances.

 

The Group has transactional currency exposures arising from sales or purchases that are denominated in a currency other than the functional currency of the Group.

 

The Group determined that sensitivity to the exchange rate changes does not impose significant impact on the results and operations of the Group.

 

 

Basel Medical Group Ltd and its Subsidiaries

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the financial period ended December 31, 2025

 

22. Financial risk management (Continued)

 

  b) Market risk (Continued)

 

Interest rate risk

 

Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market interest rates. The Group’s exposure to interest rate risk arises primarily from fixed deposits. These transactions and balances were not significant.

 

The Group does not expect any significant effect on the Group’s profit or loss arising from the effects of reasonably possible changes to interest rates on interest bearing financial instruments at the end of the financial year due to those interest-bearing assets and liabilities are insignificant.

 

  c) Liquidity risk

 

Liquidity risk refers to the risk that the Group will encounter difficulties in meeting its short-term obligations due to shortage of funds. The Group’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. It is managed by matching the payment and receipt cycles. The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of standby credit facilities. The Group finances its working capital requirements through funds generated from operations of the Group. Management is satisfied that funds are available to finance the operation of the Group.

 

Analysis of financial instruments by remaining contractual maturities

 

The table below summarises the maturity profile of the Group’s financial assets and liabilities at the reporting date based on contractual undiscounted repayment obligations.

 

  

   Carrying amount   Contractual cash flows   One year or less   Two years to five years 
   US$   US$   US$   US$ 
December 31, 2025                    
Financial assets                    
Trade and other receivables   8,158,454    8,158,454    8,158,454    - 
Amount due from shareholder   1,062,684    1,062,684    1,062,684    - 
Amount due from third party   272,183    272,183    272,183    - 
Cash and cash equivalents   1,044,640    1,044,640    1,044,640    - 
Total undiscounted financial assets   10,537,961    10,537,961    10,537,961    - 

 

 

Basel Medical Group Ltd and its Subsidiaries

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the financial period ended December 31, 2025

 

22. Financial risk management (Continued)

 

  c) Liquidity risk (Continued)

 

Analysis of financial instruments by remaining contractual maturities (Continued)

 

   Carrying amount   Contractual cash flows   One year or less   Two years to five years 
   US$   US$   US$   US$ 
December 31, 2025 -Continued                    
Financial liabilities                    
Trade and other payables   2,690,104    2,690,104    2,690,104    - 
Lease liabilities   4,702,129    4,869,009    1,687,392    3,181,617 
Amount due to related parties   690,384    690,384    690,384    - 
Borrowings   2,276,603    2,609,264    894,803    1,714,461 
Total undiscounted financial liabilities   10,359,220    10,858,761    5,962,683    4,896,078 
                     
Total net undiscounted financial assets   178,741    (320,800)   4,575,278    (4,896,078)

 

   Carrying amount   Contractual cash flows   One year or less   Two years to five years 
   S$   S$   S$   S$ 
December 31, 2025                    
Financial assets                    
Trade and other receivables   10,536,972    10,536,972    10,536,972    - 
Amount due from shareholder   1,366,505    1,366,505    1,366,505    - 
Amount due from third party   350,000    350,000    350,000    - 
Cash and cash equivalents   1,343,303    1,343,303    1,343,303    - 
Total undiscounted financial assets   13,596,780    13,596,780    13,596,780    - 
                     
Financial liabilities                    
Trade and other payables   3,674,814    3,674,814    3,674,814    - 
Lease liabilities   6,046,468    6,261,059    2,169,818    4,091,241 
Amount due to related parties   887,764    887,764    887,764    - 
Borrowings   2,927,484    3,355,253    1,150,627    2,204,626 
Total undiscounted financial liabilities   13,536,530    14,178,890    7,883,023    6,295,867 
                     
Total net undiscounted financial assets   (1,559,747)   (1,559,747)   5,713,757    (6,295,867)

 

 

Basel Medical Group Ltd and its Subsidiaries

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the financial period ended December 31, 2025

 

22. Financial risk management (Continued)

 

  c) Liquidity risk (Continued)

 

Analysis of financial instruments by remaining contractual maturities (Continued)

 

   Carrying amount   Contractual cash flows   One year or less   Two years to five years 
   S$   S$   S$   S$ 
June 30, 2025 (Audited)                    
Financial assets                    
Trade and other receivables   8,924,312    8,924,312    8,924,312    - 
Cash and cash equivalents   3,044,466    3,044,466    3,044,466    - 
Total undiscounted financial assets   11,968,778    11,968,778    11,968,778    - 
                     
Financial liabilities                    
Trade and other payables   6,295,147    6,295,147    6,295,147    - 
Lease liabilities   5,016,475    5,244,654    2,210,787    3,033,867 
Amount due to related parties   1,450,305    1,450,305    1,450,305    - 
Borrowings   61,371    61,371    61,371    - 
Total undiscounted financial liabilities   12,823,298    13,051,477    10,017,610    3,033,867 
                     
Total net undiscounted financial assets/ -liabilities   (854,520)   (1,082,699)   1,951,168    (3,033,867)

 

 

Basel Medical Group Ltd and its Subsidiaries

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the financial period ended December 31, 2025