Vodafone 2015 Annual Report Download - page 155

The Group invested in UK index linked government bonds on the basis that they generated a oating rate return in excess of £ LIBOR and are
amongst the most creditworthy of investments available.
The Group has two managed investment funds. These funds hold xed income sterling securities and the average credit quality is high double A.
Money market investments are in accordance with established internal treasury policies which dictate that an investment’s long-term credit rating
is no lower than mid BBB. Additionally, the Group invests in AAA unsecured money market mutual funds where the investment is limited to 7.5%
of each fund.
The Group has investments in repurchase agreements which are fully collateralised investments. The collateral is sovereign and supranational debt
of major EU countries with at least one AAA rating denominated in euros, sterling and US dollars and can be readily converted to cash. In the event
of any default, ownership of the collateral would revert to the Group. Detailed below is the value of the collateral held by the Group at 31 March 2015.
2015 2014
£m £m
Sovereign 1,977 4,464
Supranational 23 335
2,000 4,799
In respect of nancial instruments used by the Group’s treasury function, the aggregate credit risk the Group may have with one counterparty
is limited by (i)reference to the long-term credit ratings assigned for that counterparty by Moody’s, Fitch Ratings and Standard & Poor’s; (ii)that
counterparty’s ve year credit default swap (‘CDS’) spread; and (iii)the sovereign credit rating of that counterparty’s principal operating jurisdiction.
Furthermore, collateral support agreements were introduced from the fourth quarter of 2008. Under collateral support agreements the
Group’s exposure to a counterparty with whom a collateral support agreement is in place is reduced to the extent that the counterparty must post
cash collateral when there is value due to the Group under outstanding derivative contracts that exceeds a contractually agreed threshold amount.
When value is due to the counterparty the Group is required to post collateral on identical terms. Such cash collateral is adjusted daily as necessary.
In the event of any default, ownership of the cash collateral would revert to the respective holder at that point. Detailed below is the value of the cash
collateral, which is reported within short-term borrowings, held by the Group at 31 March 2015:
2015 2014
£m £m
Cash collateral 2,542 1,185
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. At 31 March 2015 £2,869 million (2014: £2,360 million) of trade receivables were not yet due for payment. Overduetrade
receivables consisted of £1,141 million (2014: £1,219 million) relating to the Europe region, and £222 million (2014: £280 million) relating to the
AMAP region. Accounts are monitored by management and provisions for bad and doubtful debts raised where it is deemed appropriate.
The following table presents ageing of receivables that are past due and provisions for doubtful receivables that have been established.
2015 2014
Gross
receivables
Less
provisions
Net
receivables Gross
receivables
Less
provisions
Net
receivables
£m £m £m £m £m £m
30 days or less 417 (61) 356 1,327 (356) 971
Between 31 and 60 days 231 (35) 196 218 (27) 191
Between 61 and 180 days 288 (67) 221 187 (53) 134
Greater than 180 days 1,205 (615) 590 516 (313) 203
2,141 (778) 1,363 2,248 (749) 1,499
Concentrations of credit risk with respect to trade receivables are limited given that the Group’s customer base is large and unrelated. Due to this
management believes there is no further credit risk provision required in excess of the normal provision for bad and doubtful receivables.
Amounts charged to administrative expenses duringthe year ended 31 March 2015 were £541 million (2014: £347 million; 2013: £360 million)
(seenote 15 “Trade and other receivables”).
As discussed in note 30 “Contingent liabilities”, the Group has covenanted to provide security in favour of the Trustee of the Vodafone Group
UK Pension Scheme in respect of the funding decit in the scheme. The security takes the form of an English law pledge over UK index linked
government bonds.
Liquidity risk
At 31 March 2015 the Group had €3.9 billion and US$3.9 billion syndicated committed undrawn bank facilities which support the US$15 billion
and £5 billion commercial paper programmes available to the Group. The Group uses commercial paper and bank facilities to manage short-term
liquidity and manages long-term liquidity by raising funds in the capital markets.
The €3.9 billion syndicated committed facility has a maturity date of 28 March 2020 with the option to extend the Facility for a further year
prior to the second anniversary of the Facility if requested by the Company. The US$3.9 billion syndicated committed facility has a maturity
of 27 February 2020 with the option to extend the facility for a further year prior to the rst anniversary and, if should such extension be exercised,
an option to extend for a further year prior to the second anniversary of the facility. Both facilities have remained undrawn throughout the nancial
year and since year end and provide liquidity support.
Overview Strategy review Performance Governance Financials Additional information Vodafone Group Plc
Annual Report 2015
153