Notes to the accounts

16 Trade and other receivables

	2008 £m	2007 £m
Non-current
Trade receivables	8.8	8.9
Prepayments and accrued income	1.6	0.8
Other debtors	4.2	5.0
	14.6	14.7
Current
Amounts due from customers for contract work		5.3
Trade receivables	509.1	427.2
Other debtors	19.8	16.6
Prepayments and accrued income	36.5	40.7
	565.4	489.8

Trade receivables do not carry interest. Management considers that the carrying value of trade and other receivables approximates the fair value.

Trade and other receivables, including prepayments, accrued income and other debtors qualifying as financial instruments are classified as “loans and receivables”. The maximum credit exposure arising from these financial assets is £536.7m (2007: £450.1m).

Credit risk is managed separately for each customer and, where appropriate, a credit limit is set for the customer based on previous experience of the customer and third party credit ratings.

Provision for bad and doubtful debts

Trade receivables are disclosed net of a provision for bad and doubtful debts. Movement on the provision is as follows:

	Year ended 31 July 2008 £m	Period ended 31 July 2007 £m
Balance at the beginning of the period	10.5	16.3
Exchange differences	0.8	(0.3)
Charged	4.4	3.0
Utilised	(1.4)	(2.8)
Released	(3.1)	(2.9)
Disposal of businesses		(2.8)
Balance at the end of the period	11.2	10.5

The provision for bad and doubtful debts is based on specific risk assessment and reference to past default experience.

The Group has no significant concentration of credit risk, with exposure spread over a large number of customers. The largest single customer is the US Federal Government representing less than 7% (2007: 4%) of group turnover.

Ageing of trade receivables

	2008 £m	2007 £m
Trade receivables which are not impaired and not yet due	412.4	313.1
Ageing analysis of trade receivables which are overdue but not impaired:
– less than three months	79.2	93.4
– more than three months	22.6	24.1
Gross value of partially and fully provided debtors	14.9	16.0
	529.1	446.6
Provision for bad and doubtful debts	(11.2)	(10.5)
Trade receivables	517.9	436.1

Smiths Group divisions:
Smiths Detection, Smiths Medical, John Crane, Smiths Interconnect, Flex-Tek