Notes to the financial statements

for the year ended 31 March 2012

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19 Trade and other receivables

Consolidated Parent company
2012
£’000
2011
£’000
2012
£’000
2011
£’000
Trade receivables 41,696 36,986
Other receivables 1,249 1,641
Amounts due from customers for the network build contract 5,091
Prepayments 16,396 16,103 1 10
Accrued income 12,526 10,972
Total 71,867 70,793 1 10

For the network build contract, the net balance sheet position is as follows:

Consolidated Parent company
2012
£’000
2011
£’000
2012
£’000
2011
£’000
The aggregate costs incurred and recognised profits (less recognised losses) to date 20,178
Less: Progress billings (15,087)
Net balance sheet position for the network build contract 5,091

The network build contract in the previous year was a one-off contract relating to the building of broadband infrastructure, which was completed in this current financial year. We do not anticipate undertaking similar projects in the future.

All of the Group’s receivables are due within one year in both 2012 and 2011. An allowance has been made for estimated irrecoverable amounts from the sale of goods and services of £3,013,000 (2011: £4,670,000). The Directors consider that the carrying amount of trade and other receivables approximate to their fair value.

Movements on the Group provision for impairment of trade receivables are as follows:

2012
£’000
At 1 April 2011 (4,670)
Written off in the year 1,019
Unused amounts reversed 784
Amounts provided for in the year (146)
At 31 March 2012 (3,013)

The majority of the Group’s trade and other receivables are denominated in Sterling.

Credit risk

The Group’s principal financial assets are cash balances and trade and other receivables. The Group’s credit risk is attributable primarily to its trade receivables for which an allowance has been made for the estimated irrecoverable amounts. The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies. The Group has no significant concentration of credit risk, with exposure spread over a large number of customers.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold any collateral as security.

As of 31 March 2012, trade receivables of £3,744,000 were impaired (2011: £6,139,000). The amount of the provision was £3,013,000 as of 31 March 2012 (2011: £4,670,000). The individually impaired receivables mainly relate to customers who are in unexpectedly difficult economic situations. It was assessed that a portion of the impaired balance is expected to be recovered.

The ageing of these receivables is as follows:

2012
£’000
2011
£’000
0 – 3 months 732 788
3 – 6 months 3,012 5,351
6 months +
3,744 6,139

As of 31 March 2012, trade receivables of £5,723,000 (2011: £7,842,000) were past due but not impaired. These relate to a number of independent customers of whom there is no recent history of default. The ageing analysis of these trade receivables is as follows:

2012
£’000
2011
£’000
0 – 3 months 4,211 5,573
3 – 6 months 1,512 2,269
6 months +
5,723 7,842

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