Annual Report 2016 - Page 78

Annual Report 2016 Notes to the Financial Statements The table above excludes future interest payments and future indexation on financial liabilities. Index-linked borrowings of £192,706,000 (2015: £190,638,000) included in the table above are stated at the principal amount indexed by the appropriate RPI value to the balance sheet date. The estimated redemption value of index-linked borrowings at redemption in 2045 is £399,467,000 (2015: £399,467,000) and at redemption in 2051 is £139,996,000 (2015: £139,996,000). Group debtors recoverable in more than one year of £97,526,000 (2015: £99,563,000) principally represent loans receivable from the Company's parent undertakings of £93,740,000 (2015: £95,657,000) with £15,000,000 (2015: £15,000,000) due to be repaid between two and five years and £78,740,000 (2015: £80,657,000) having no fixed repayment date. Trade Debtors Before accepting orders from certain customers and offering credit terms, the Group undertakes appropriate credit assessments and uses this information to determine if the order is accepted and the credit terms that will be offered. Provision is made within the trade debtor values detailed below, based on judgement by senior management, for amounts considered to be unrecoverable due either to their nature or age. Due to the varying nature of the Group’s businesses there is no single method that is applied to all trade debtors. This would not be considered appropriate with the methods applied being considered appropriate to each business. The total amount charged to the profit and loss account in the year ended 31 March 2016 in respect of such provisions was £2,868,000 (2015: £4,417,000). Total Group trade debtors (net of provisions) as at 31 March 2016 were £41,092,000 (2015: £40,170,000). The total amount of the provision included in the above, as at 31 March 2016 was £31,642,000 (2015: £29,151,000). The Group does not hold collateral over its trade debtors. The Directors consider that debtors that are neither past due nor impaired are of a high quality and were considered, at the balance sheet date, to be fully recoverable at their gross book value. The Directors consider that the concentration of credit risk across the Group is limited due to the Group’s customer base being significant. The largest balance outstanding from any single third party at 31 March 2016 was £1,187,000 (2015: £2,054,000), representing 3% (2015: 5%) of the above Group net trade debtor total. Individually significant debtors are principally due from customers with investment grade credit ratings including utilities, government agencies and local authorities. An ageing analysis of invoiced trade debtors that are past due but not impaired is provided below: South Staffs Water 2016 2015 <1 year £’000 1-2 years £’000 2-3 years £’000 3-4 years £’000 4-5 years £’000 >5 years £’000 Total £’000 7,980 2,149 1,033 692 392 — 12,246 8,803 2,030 1,171 679 393 — 13,076 Non-regulated service businesses <1 month 1-2 months >2 months Total £’000 £’000 £’000 £’000 2016 5,679 1,407 3,245 10,331 2015 4,859 1,090 1,720 7,669 Non-regulated service business’ debtors that are considered to be impaired of £1,852,000 (2015: £1,480,000) were all more than 2 months past due. An ageing analysis of debtors of South Staffs Water that are considered to be impaired is provided below: 2016 2015 <1 year £’000 1-2 years £’000 2-3 years £’000 3-4 years £’000 4-5 years £’000 >5 years £’000 Total £’000 3,964 3,475 3,299 3,181 2,949 12,922 29,790 3,985 3,406 3,259 3,064 2,895 11,062 27,671 The Directors consider that the carrying value of trade and other debtors including loans receivable, net of provisions, detailed in note 18 approximates to their fair value. 29 Pension Retirement Benefits The Group operates a number of funded pension schemes for the benefit of its employees. The Group participates in the Water Companies Pension Scheme, by way of two separate sections, which provide benefits based on pensionable pay at certain points in time (indexed as appropriate). At 31 March 2016, both of these sections had ceased future accrual of benefits with the South Staffordshire section ceasing future accrual from 1 April 2015 and the Cambridge section from 31 December 2010. The Group also operates a number of defined contribution pension schemes. The assets of all of these schemes are held separately from those of the Group, being invested by professional fund managers. Details of the accounting policy for pension schemes are provided in note 1. As both of the sections of the defined benefit scheme are closed to future benefit accrual, from 1 April 2015 only funding deficit contributions are now being paid into the Scheme (with these being £2,194,000 in the year ended 31 March 2016 and £2,144,000 in the year ended 31 March 2015) with these contributions paid increasing the assets of the sections. No current service contributions are now paid and with effect from 1 April 2015 there is no current service cost charge to the profit and loss account. The impact of the cessation of the future accrual of the South Staffordshire section of the scheme on 1 April 2015 included a non-recurring reduction in the liabilities of the section of £3,581,000 and this has been included as an exceptional operating credit item in the profit and loss account (note 7). The amount charged to the profit and loss account for the defined contribution schemes in the year was £2,306,000 (2015: £1,508,000). There were no overdue contributions at either year-end. 76