124
Religare Health Trust
32. Fair value of financial instruments (cont’d)
(g)
Fair value of financial instruments by classes that are not carried at fair value but for which fair value is disclosed
The fair value of financial assets and liabilities by classes that are not carried at fair value and whose carrying amounts
are not reasonable approximation of fair value are as follows:
2016
2015
Carrying
amount
$’000
Fair
value
$’000
Carrying
amount
$’000
Fair
value
$’000
Financial assets:
Group
Financial assets (non-current) (Note 19)
36,047
27,142
35,151
30,482
Financial liabilities:
Loans and borrowing (non-current)
– Loan from a related party
3,286
3,068
–
–
Trust
Loan to a subsidiary
478,922
*
457,459
*
*
The loan is unsecured and non-interest bearing. It has no fixed repayment terms and is repayable only when the subsidiary’s cash flow permits. Accordingly,
fair value is not determinable as the timing of the future cash flows arising from the loan cannot be estimated reliably.
33. Financial risk management objectives and policies
The Group and the Trust is exposed to financial risks arising from its operations and the use of financial instruments. The key
financial risks include credit risk, liquidity risk, interest rate risk and foreign currency risk. The Board of Directors reviews and
agrees policies and procedures for the management of these risks. It is, and has been throughout the current and previous
financial year, the Group’s policy that no derivatives shall be undertaken except for the use as hedging instruments where
appropriate and cost-efficient.
The following sections provide details regarding the Group’s and Trust’s exposure to the above-mentioned financial risks and
the objectives, policies and processes for the management of these risks.
(a)
Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its
obligations. The Group’s exposure to credit risk arises primarily from trade receivables.
Trade receivable
Credit risk on service fee receivable is concentrated with FHL group of companies which is also the substantial unitholder
of the Trust. As at the reporting date, 96% (2015: 96%) of the total trade receivables was due from FHL located in India.
FHL are debtors with good payment record with the Group and has provided banker’s guarantee for 2 months of service
fee receivable.
For hospital income receivable from corporate clients, these clients are debtors with good payment record with the
Group.
Notes to the
Financial Statements
For the financial year ended 31 March 2016
