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||101.5||107.5|
|Charge for bad and doubtful receivables (see note 15)||29.9||39.2|
|Cost of properties disposed||8.6||10.5|
|Legal and professional expenses||6.5||5.8|
|Operating leases payable:|
|Plant and equipment||0.6||0.8|
|Loss on disposal of property, plant and equipment||3.3||5.4|
|Third party wholesale charges||3.0||15.1|
|Impairment of property, plant and equipment (see note 10)||0.2||11.4|
|Impairment of assets classified as held for sale||–||2.7|
|Amortisation of deferred grants and contributions (see note 21)||(6.7)||(6.9)|
|Compensation from insurers||(12.3)||(20.1)|
|Depreciation and amortisation expense|
|Depreciation of property, plant and equipment (see note 10)||336.2||332.5|
|Amortisation of intangible assets (see note 11)||28.7||31.2|
As a result of two significant flooding incidents caused by storms Desmond and Eva in December 2015, there were £13.8 million (2016: £19.5 million) of expenses incurred, comprising £11.1 million (2016: £7.0 million) of operating costs, £2.5 million (2016: £1.1 million) of infrastructure renewals expenditure, and a £0.2 million (2016: £11.4 million) impairment of property, plant and equipment. Insurance compensation of £12.3 million (2016: £20.1 million) relating to the flooding incidents has been recognised and the group expects there to be further recovery of flooding incident costs under its insurance cover in the year ending 31 March 2018, as further remedial work is undertaken.
In addition, there were £5.8 million (2016: £11.1 million) of market reform restructuring costs incurred in preparing the business for competition in the non-household retail market and £nil (2016: £24.8 million) of costs relating to a large water quality incident in the prior year, largely comprising customer compensation payments included within other expenses.
Total other operating costs are stated net of £14.5 million (2016: £nil) of costs recharged to Water Plus at nil margin under transitional service agreements.
Research and development expenditure for the year ended 31 March 2017 was £2.3 million (2016: £2.3 million).
During the year, the group obtained the following services from its auditor:
|Statutory audit – group and company||72||70|
|Statutory audit – subsidiaries||278||239|
|Regulatory audit services provided by the statutory auditor||53||45|
|Other non-audit services||201||288|
* Prior year comparatives in the above table have been re-presented to reflect the classification of services provided by the auditor that will be adopted prospectively in accordance with the group audit committee's policy in relation to this area, further details of which can be found within the corporate governance report.