NOTES TO THE FINANCIAL STATEMENTS
CAPITAL – FINANCING
RAMSAY HEALTH CARE LIMITED
8 Net debt (Continued)
The fair values of the Group’s interest bearing loans and borrowings are determined by using the discounted cash flow method with discount
rates that reflect market interest rates, specific country risk factors, individual creditworthiness of the counterparties and the other risk
characteristics associated with the underlying debts.
Unless disclosed below, the carrying amount of the Group’s current and non-current borrowings approximate their fair value. The fair values
have been calculated by discounting the expected future cash flows at prevailing market interest rates depending on the type of borrowings.
At reporting date, the market interest rates vary from 0.060% to 0.0803% (2020: 0.093% to 0.102%) for Australia, 0.0555% to 0.0779% (2020:
0.090% to 0.141%) for UK and -0.569% to -0.542% (2020: -0.510% to -0.422%) for France respectively.
The fair value of the interest bearing loans and borrowings was estimated using the level 2 method valuation technique in which the lowest
level of input that is significant to the fair value measurement is directly or indirectly observable. Set out in the table below is a comparison by
carrying amounts and fair value of the Group’s Interest bearing loans and borrowings.
Bank loans 5,280.7 5,381.3 4,227.8 4,657.9
Interest rate, foreign exchange & liquidity risk
Details regarding interest rate, foreign exchange and liquidity risk is disclosed in Note 17.
Assets pledged as security
The carrying amounts of assets pledged as security for loans and borrowings are set out in the following table:
Fixed and floating charge
Fixed assets 3.1 -
Investment holdings in subsidiaries 3,917.8 3,667.2
Total non-current assets pledged as security 3,920.9 3,667.2
Defaults & breaches
During the current and prior years, there were no defaults or breaches on any of the loans.
In April 2020, lenders to the Ramsay Funding Group provided consent to amend or waive key banking covenants tests, in connection with the
funding agreements (FA) and the Common Term Deed Poll (CTDP), for the next two semi-annual covenant testing points up to and including the
31 December 2020 testing date.
This waiver was given on the condition that the Company did not declare a dividend in relation to its ordinary shares (it being agreed that
CARES are not ordinary shares and that this condition did not therefore apply in respect of or seek to restrict the declaration or payment of
dividends in respect of CARES) during the period up to 31 December 2020.
LOANS AND BORROWINGS
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Losses
are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.
Annual Report 2021 85