The following items have been charged/(credited) to the income statement in arriving at the group's operating profit:
|Other operating costs|
|Hired and contracted services||107.5||93.4|
|Charge for bad and doubtful receivables (see note 14)||39.2||52.9|
|Third party wholesale charges||15.1||10.8|
|Impairment of property, plant and equipment (see note 9)||11.4||–|
|Cost of properties disposed||10.5||0.6|
|Legal and professional expenses||5.8||4.8|
|Loss on disposal of property, plant and equipment||5.4||5.1|
|Operating leases payable:|
|Plant and equipment||0.8||0.7|
|Impairment of assets classified as held for sale (see note 15)||2.7||–|
|Loss on disposal of intangible assets||–||0.5|
|Amortisation of deferred grants and contributions (see note 21)||(6.9)||(7.7)|
|Compensation from insurers||(20.1)||–|
|Depreciation and amortisation expense|
|Depreciation of property, plant and equipment (see note 9)||332.5||323.6|
|Amortisation of intangible assets (see note 10)||31.2||29.0|
* The comparatives have been re-presented to allocate £7.0 million accommodation, £3.4 million movements in other provisions, and £2.1 million research and development, to categories which better reflect the underlying nature of these costs. In addition, a separate category for third party wholesale charges has been presented, which were previously within other expenses.
During the year, there were £19.5 million (2015: £nil) of expenses incurred as a result of two significant flooding incidents caused by storms Desmond and Eva comprising an £11.4 million impairment of property, plant and equipment, £7.0 million of operating costs and £1.1 million of infrastructure renewals expenditure. Insurance compensation of £20.1 million relating to the flooding incidents has been recognised to the extent that the group considers the recovery to be 'virtually certain' at 31 March 2016. The group expects there to be further substantial recovery of the flooding incident costs under its insurance cover in the year ending 31 March 2017, though at this stage it is not practicable to estimate the value of this.
In addition, there were £24.8 million (2015: £nil) of costs, largely comprising customer compensation payments included within other expenses, incurred in relation to a large water quality incident and £11.1 million (2015: £1.1 million) in relation to market reform restructuring costs incurred preparing the business for open competition in the business retail market.
Research and development expenditure for the year ended 31 March 2016 was £2.3 million (2015: £2.1 million).
During the year, the group obtained the following services from its auditor:
|Statutory audit – group and company||70||43|
|Statutory audit – subsidiaries||239||291|
|Other non-audit services||238||250|