v3.26.3
Financial risk management
 12 Months Ended
Jun. 30, 2026
Financial Risk Management  
Financial risk management

 

25. 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 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 year ended June 30, 2026 and 2025

 

 

25. 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 year ended June 30, 2026 and 2025

 

 

25. 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:

 

   Note  Category 

12-month or

lifetime

ECL

 

Gross

carrying

amount

  

 

Loss

allowance

  

Net

carrying

amount

 
            US$   US$   US$ 
June 30, 2026                        
Cash and cash equivalents  13  I  12-month ECL   409,464    -    409,464 
Trade receivables  12  Note 1  Lifetime ECL (simplified)   2,729,285    (669,000)   2,060,285 
Other receivables  12  I  12-month ECL   81,762    -    81,762 
Deposits  12  I  12-month ECL   5,455,956    -    5,455,956 
Amount due from related parties  14  I  12-month ECL   768,730         768,730 
                  (669,000)     

 

 

Basel Medical Group Ltd. and its Subsidiaries

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For year ended June 30, 2026 and 2025

 

 

25. Financial risk management (Continued)

 

  a) Credit risk (Continued)

 

   Note  Category 

12-month or

lifetime

ECL

 

Gross

carrying

amount

  

 

Loss

allowance

  

Net

carrying

amount

 
            S$   S$   S$ 
June 30, 2026                        
Cash and cash equivalents  13  I  12-month ECL   529,887    -    529,887 
Trade receivables  12  Note 1  Lifetime ECL (simplified)   3,531,968    (865,753)   2,666,215 
Other receivables  12  I  12-month ECL   105,811    -    105,811 
Deposits  12  I  12-month ECL   7,060,553    -    7,060,553 
Amount due from related parties  14  I  12-month ECL   994,812    -    994,812 
                  (865,753)     
                         
June 30, 2025                        
Cash and cash equivalents  13  I  12-month ECL   3,044,466    -    3,044,466 
Trade receivables  12  Note 1  Lifetime ECL (simplified)   2,740,055    (588,373)   2,151,682 
Other receivables  12  I  12-month ECL   134,188    -    134,188 
Deposits  12  I  12-month ECL   6,772,629    -    6,772,629 
                  (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 year ended June 30, 2026 and 2025

 

 

25. Financial risk management (Continued)

 

  a) Credit risk (Continued)

 

   US$   US$   US$   US$   US$   US$ 
   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$ 
                         
June 30, 2026                              
ECL rate   19%   39%   72%   88%   100%   - 
Estimated total gross carrying amount at   163,199    334,987    620,585    751,573    858,941    2,729,285 
ECL   (40,003)   (82,112)   (152,117)   (184,225)   (210,543)   (669,000)
                             2,060,285 

 

   S$   S$   S$   S$   S$   S$ 
   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$ 
                         
June 30, 2026                              
ECL rate   19%   39%   72%   88%   100%   - 
Estimated total gross carrying amount at   211,196    433,507    803,099    972,611    1,111,555    3,531,968 
ECL   (51,768)   (106,261)   (196,855)   (238,406)   (272,463)   (865,753)
                             2,666,215 
                               
June 30, 2025                              
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)
                             2,151,682 

 

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 year ended June 30, 2026 and 2025

 

25. 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: 2% and 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 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 year ended June 30, 2026 and 2025

 

 

25. 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$ 
June 30, 2026                    
Financial assets                    
Trade and other receivables   7,848,968    7,848,968    7,848,968    - 
Amount due from related parties   768,730    768,730    768,730    - 
Cash and cash equivalents   409,464    409,464    409,464    - 
Total undiscounted financial assets   9,027,162    9,027,162    9,027,162    - 

 

 

Basel Medical Group Ltd. and its Subsidiaries

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For year ended June 30, 2026 and 2025

 

 

25. 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$ 
June 30, 2026 (Continued)                    
Financial liabilities                    
Trade and other payables   2,582,962    2,582,962    2,582,962    - 
Lease liabilities   4,699,412    4,876,990    2,215,135    2,661,855 
Amount due to related parties   744,038    744,038    744,038    - 
Borrowings   1,989,904    1,989,904    1,989,904    - 
Total undiscounted financial liabilities   10,016,316    10,193,894    7,532,039    2,661,855 
                     
Total net undiscounted financial (liabilities)/ assets   (989,154)   (1,166,732)   1,495,123    (2,661,855)

 

   Carrying
amount		   Contractual
cash flows		   One year
or less		   Two years to
five years		 
   S$   S$   S$   S$ 
June 30, 2026                    
Financial assets                    
Trade and other receivables   10,157,353    10,157,353    10,157,353    - 
Amount due from related parties   994,812    994,812    994,812    - 
Cash and cash equivalents   529,887    529,887    529,887    - 
Total undiscounted financial assets   11,682,052    11,682,052    11,682,052    - 
                     
Financial liabilities                    
Trade and other payables   3,342,610    3,342,610    3,342,610    - 
Lease liabilities   6,081,509    6,311,312    2,866,606    3,444,706 
Amount due to related parties   962,860    962,860    962,860    - 
Borrowings   2,575,135    2,575,135    2,575,135    - 
Total undiscounted financial liabilities   12,962,114    13,191,917    9,747,211    3,444,706 
                     
Total net undiscounted financial (liabilities)/ assets   (1,280,062)   (1,509,865)   1,934,841    (3,444,706)

 

 

Basel Medical Group Ltd. and its Subsidiaries

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For year ended June 30, 2026 and 2025

 

 

25. 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                    
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 year ended June 30, 2026 and 2025