Vodafone 2024 Annual Report

Notes to the consolidated financial statements (continued) 190 Vodafone Group Plc Annual Report 2024 2020 21. Borrowings 190 Vodafone Group Plc Annual Report 2024 Strategic report Governance


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The Group’s sources of borrowing for funding and liquidity purposes come from a range of committed bank facilities and through short-term and long-term issuances in the capital markets including bond and commercial paper issues and bank loans. Liabilities arising from the Group’s lease arrangements are also reported in borrowings; see note 20 ‘Leases’. We manage the basis on which we incur interest on debt between fixed interest rates and floating interest rates depending on market conditions using interest rate derivatives. The Group enters into foreign exchange contracts to mitigate the impact of exchange rate movements on certain monetary items. Accounting policies Interest-bearing loans and overdrafts are initially measured at fair value (which is equal to cost at inception), and are subsequently measured at amortised cost, using the effective interest rate method. Where they are identified as a hedged item in a designated fair value hedge relationship, fair value adjustments are recognised in accordance with our policy (see note 22 ‘Capital and financial risk management’). Any difference between the proceeds net of transaction costs and the amount due on settlement or redemption of borrowings is recognised over the term of the borrowing. Borrowings 2024 2023 €m €m Non-current borrowings Bonds 39,451 39,512 Bank loans 402 487 Lease liabilities (note 20) 7,416 10,318 Other borrowings 1 1,059 1,352 48,328 51,669 Current borrowings Bonds 1,292 4,604 Bank loans 365 308 Lease liabilities (note 20) 2,256 3,046 Collateral liabilities 2,628 4,886 Bank borrowings secured against Indian assets 1,720 1,485 Other borrowings 1 398 392 8,659 14,721 Borrowings 56,987 66,390 Note: 1 Includes €862 million (2023: €1,140 million) and €158 million (2023: €196 million) of licence and spectrum fees payable in non-current and current borrowings respectively. The fair value of the Group’s financial liabilities held at amortised cost approximate to fair value with the exception of long-term bonds with a carrying value of €39,451 million (2023: €39,512 million) which have a fair value of €35,885 million (2023: €35,044 million). Fair value is based on level 1 of the fair value hierarchy using quoted market prices. The Group’s current borrowings also include €1,720 million (2023: €1,485 million) of bank borrowings that are secured against the Group’s shareholdings in Indus Towers and Vodafone Idea (see note 12 ‘Investments in Associates and Joint Ventures’ for further details of these assets) and will be repaid through the realisation of proceeds from those assets. This arrangement contains an embedded derivative option which has been separately fair valued and is presented within derivative assets in current assets (see note 14 ‘Trade and other receivables’). The Group’s borrowings, which include certain bonds that have been designated in hedge relationships, are carried at €1,229 million higher (2023: €1,282 million higher) than their euro equivalent redemption value. In addition, where bonds are issued in currencies other than euros, the Group has entered into foreign currency swaps to fix the euro cash outflows on redemption. The impact of these swaps is not reflected in borrowings and would decrease the euro equivalent redemption value of the bonds by €1,559 million (2023: €1,440 million).

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