195 Vodafone Group Plc Annual Report 2024 195
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Vodafone Group Plc Annual Report 2024
In the event of any default, ownership of the collateral would revert to the respective holder at that point. Detailed below is the value of the cash collateral, which is reported within current borrowings, held by the Group at 31 March: 2024 2023 €m €m Collateral liabilities 2,628 4,886 In addition, as discussed in note 29 ‘Contingent liabilities and legal proceedings’, the Group has covenanted to provide security in favour of the trustee of the Vodafone Group UK Pension Scheme in respect of the funding deficit in the scheme and pledged security in relation to the Indus Towers merger. The Group has also pledged cash as collateral against derivative financial instruments as disclosed in note 13 ‘Other investments’. Operating activities Customer credit risk is managed by the Group’s business units which each have policies, procedures and controls relating to customer credit risk management. Outstanding trade receivables and contract assets are regularly reviewed to monitor any changes in credit risk with concentrations of credit risk considered to be limited given that the Group’s customer base is large and unrelated. The Group applies the simplified approach and records lifetime expected credit losses for trade receivables and contract assets. Expected credit losses are measured using historical cash collection data for periods of at least 24 months wherever possible and grouped into various customer segments based on product or customer type. The historical loss rates are adjusted where macroeconomic factors, for example changes in interest rates or unemployment rates, or other commercial factors are expected to have a significant impact when determining future expected credit loss rates. For trade receivables the expected credit loss provision is calculated using a provision matrix, in which the provision increases as balances age, and for receivables paid in instalments and contract assets a weighted loss rate is calculated to reflect the period over which the amounts become due for payment by the customer. Trade receivables and contract assets are written off when each business unit determines there to be no reasonable expectation of recovery and enforcement activity has ceased. Movements in the allowance for expected credit losses during the year were as follows: Trade receivables held Trade receivables held at fair value through Contract assets at amortised cost other comprehensive income Re-presented 1 Re-presented 1 Re-presented 1 2024 2023 2024 2023 2024 2023 €m €m €m €m €m €m 1 April 78 83 1,149 1,342 71 108 Exchange movements (1) (3) (41) (72) 1 1 Amounts charged to credit losses on financial assets 96 128 419 360 82 17 Transfer of assets held for sale (31) 6 (324) 256 (16) 2 Other 2 (122) (136) (438) (737) (60) (57) 31 March 20 78 765 1,149 78 71 Notes: 1 The results for the year ended 31 March 2023 have been re-presented to reflect that the results of Vodafone Spain and Vodafone Italy are now reported as discontinued operations. See note 7 ‘Discontinued operations and assets held for sale’ for more information. 2 Primarily utilisation of the provision by way of write-off. Expected credit losses are presented as net credit losses on financial assets within operating profit and subsequent recoveries of amounts previously written off are credited against the same line item. The majority of the Group’s trade receivables are due for maturity within 90 days and largely comprise amounts receivable from consumers and business customers. The table below presents information on trade receivables past due¹ and their associated expected credit losses:
Trade receivables at amortised cost past due
30 days or less
31–60 days
61–180 days 308 (111) 197 €m 61–180 days 329 (173) 156 €m
180 days+
Due €m
Total
31 March 2024 Gross carrying amount Expected credit loss allowance Net carrying amount 31 March 2023 Gross carrying amount Expected credit loss allowance Net carrying amount
€m
€m
€m
€m
2,199 2,147
347 291
122
638 (520) 118
3,614 2,849
(52)
(56)
(26) 96
(765)
Trade receivables at amortised cost past due
30 days or less
31–60 days
180 days+
Due €m
Total
€m
€m
€m
€m
2,465 2,398
599 535
163 113
957 (831) 126
4,513 (1,185) 3,328
(67)
(64)
(50)
Note: 1 Contract assets relate to amounts not yet due from customers. These amounts will be reclassified as trade receivables before they become due. Trade receivables at fair value through other comprehensive income are not materially past due.
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