Statement of comprehensive net expenditure for the year ended 31 March 2022.

	Notes	Year ended 31 March 2022 £	Year ended 31 March 2021 £
Income
Income from activities	3.5.2	4,486,585	3,423,460
Expenditure
Staff costs	3.5.4	(2,946,372)	(2,489,919)
Depreciation	3.5.6	(24,364)	(29,162)
Other expenditure	3.5.5	(899,650)	(1,483,944)
		(3,870,386)	(4,003,025)
Operating surplus/(deficit)		616,199	(579,565)
Interest receivable		243	1,171
Net surplus/(deficit) for the year after interest		616,442	(578,394)
Corporation tax (payable)/receivable		(1,448)	1,194
Other comprehensive net income
Actuarial gain/(loss)	3.5.12	2,185,000	(3,513,000)
Total comprehensive net income/(expenditure) for the year		2,799,994	(4,090,200)

All income and expenditure relates to continuing activities.

Statement of financial position as at 31 March 2022

	Notes	Year ended 31 March 2022 £	Year ended 31 March 2021 £
Non-current assets
Property, plant, equipment	3.5.6	28,919	41,210
Total non-current assets		28,919	41,510
Current assets
Other receivables	3.5.7	72,107	144,067
Cash and cash equivalent		2,451,590	2,525,559
Total current assets		2,523,697	2,669,626
Current liabilities
Trade payables and other current liabilities	3.5.8	(420,881)	(1,663,363)
Total current liabilities		(420,881)	(1,663,363)
Non-current liabilities
Provisions	3.5.9	(73,968)	(69,700)
Total net assets, excluding pension liabilities		2,057,767	977,773
Pension scheme liability	3.5.12	(2,201,000)	(3,921,000)
Net liabilities		(143,233)	(2,943,227)
Equity
General reserve		(143,233)	(2,943,227)

Statement of cashflows for the year to 31 March 2022

	Notes	Year ended 31 March 2022 £	Year ended 31 March 2021 £
Cash flows from operating activities
Operating surplus/(deficit)		616,199	(579,565)
Adjustments for non-cash items
Difference in pension costs compared to contributions	3.5.12	380,000	(267,000)
Depreciation on tangible non-current assets	3.5.6	24,364	29,162
Finance costs		85,000	12,000
(Gain)/loss on disposal of fixed assets	3.5.6	(163)	2,179
Increase in provision	3.5.9	4,268	6,970
Movements in working capital
Decrease in other receivables	3.5.7	71,960	246,007
(Decrease)/increase in trade payables and other current liabilities	3.5.8	(1,242,462)	1,391,189
Net cash (outflow)/inflow from operating activities		(60,854)	840,942
Cash flows from investing activities
Purchase of property, plant, and equipment	3.5.6	(11,910)	(9,596)
Net cash outflow from investing activities		(11,910)	(9,596)
Cash flows from financing activities
Interest received		243	1,171
Corporation tax (payable)/receivable		(1,448)	1,194
Net (outflow)/inflow from financing activities		(1,205)	2,365
Net (decrease)/increase in cash and cash equivalents		(73,969)	833,711
Cash as at 1 April		2,525,559	1,691,848
Cash as at 31 March		2,451,590	2,525,559
Net (decrease)/increase in cash and cash equivalents		(73,969)	833,711

Statement of changes in equity for the year ended 31 March 2022

The general reserve is analysed in note 10	£
Balance at 1 April 2020	1,145,973
Total comprehensive net expenditure for the year 2020-21	(4,090,200)
Balance as at 31 March 2021	(2,943,227)
Total comprehensive net income for the year 2021-22	2,799,94
Balance as at 31 March 2022	(143,233)

The financial statements were approved by the Board on 9 December 2022.

The Accountable Officer authorised these financial statements for issue on 9 December 2022.

Notes to the financial statements

3.5.1 Accounting policies

The financial statements are prepared in a form determined by Scottish Ministers, in accordance with the Water Industry Act 1999, as amended by the Water Industry (Scotland) Act 2002 and the Water Services etc. (Scotland) Act 2005.

The financial statements are prepared as required by the Accounts Direction issued by Scottish Ministers and prepared in accordance with the FReM issued by HM Treasury. 

The accounting policies contained in the FReM apply International Financial Reporting Standards (IFRS) as adapted or interpreted for the public-sector context. Where the FReM permits a choice of accounting policy, the accounting policy which is judged to be most appropriate to the circumstances of WICS for the purpose of giving a true and fair view has been selected.  The policies adopted are described below.  They have been applied consistently in dealing with items that are considered material in relation to the financial statements.

The preparation of the financial statements in conformity with the FReM requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed below in “Critical accounting estimates and key judgements”.

The Board and Accountable Officer have considered the budget for 2022-23, including the statutory contribution from Scottish Water and Licensed Provider levies, and consider that WICS has adequate resources to continue in operational existence for the foreseeable future. The financial statements are therefore prepared on a going concern basis. 

Accounting Convention

These financial statements have been prepared under the historical cost convention modified to take account of the revaluation of property, plant and equipment and intangible assets.

Critical accounting estimates and key judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. WICS makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

The present value of the pension obligations depends on several factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost/ (income) for pensions include the discount rate. Any changes in these assumptions will impact the carrying amount of pension obligations.

WICS is ultimately responsible for the financial and demographic accounting assumptions adopted, based on actuarial advice. WICS determines the appropriate discount rate at the end of each year, considering information provided by actuaries. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. In determining the appropriate discount rate, WICS considers the interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension liability.

Other key assumptions for pension obligations are based in part on current market conditions.  Additional information is disclosed in note 3.5.12.

Newly Adopted IFRS

In these financial statements, there are no adopted IFRSs which are effective for the first time which have had a material effect on the financial statements therefore there has been no restatement of comparatives.

Adopted IFRS not yet applied

IFRS 16 “Leases”, has been issued but has not been applied in these financial statements.  IFRS 16 supersedes IAS 17 Leases and is being applied by HM Treasury in the Government Financial Reporting Manual (FReM) from 1 April 2022. IFRS 16 introduces a single lessee accounting model that results in a more faithful representation of a lessee’s assets and liabilities and provides enhanced disclosures to improve transparency of reporting on capital employed.

Under IFRS 16, lessees are required to recognise assets and liabilities for leases with a term of more than 12 months, unless the underlying asset is of low value. While no standard definition of ‘low value’ has been mandated, WICS has elected to utilise the capitalisation threshold of £5,000 to determine the assets to be disclosed.  

WICS expects that its existing finance leases will continue to be classified as leases. All existing operating leases will fall within the scope of IFRS 16 under the ‘grandfathering’ rules mandated in the FReM for the initial transition to IFRS 16. In future years new contracts and contract renegotiations will be reviewed for consideration under IFRS 16 as implicitly identified right-of-use assets.  Assets recognised under IFRS 16 will be held on the Statement of Financial Position as (i) right of-use assets which represent the Board’s right to use the underlying leased assets; and (ii) lease liabilities which represent the obligation to make lease payments.

The bringing of leased assets onto the Statement of Financial Position will require depreciation and interest to be charged on the right-of-use asset and lease liability, respectively. Cash repayments will also be recognised in the Statement of Cash Flows, as required by IAS 7.

The impact of the initial application of the standard as adopted by the FReM in relation to the office lease as at 31 March 2022 is:

Initial cost of asset, represented as full lease cost over 15 years	888,460
Accumulated depreciation to 31 March 2022 (on a straight line basis)	(651,536)
Closing value of asset at 31 March 2022	236,924
Liability represented as lease payment obligations from 01/04/2022	236,924

Therefore, there would be no impact to the financial statements other than the disclosures above.

Furniture and fittings and information technology

Furniture and fittings and information technology are recorded in the financial statements at depreciated replacement cost because their fair market value is not readily available.

Depreciation is charged on cost less estimated residual value on a straight-line basis over the expected useful lives of up to a maximum of:

furniture and fittings: 10 years, which is not more than the lease term of the building in which the furniture and fittings are located; and

information technology: 4 years.

WICS considers that all the assets in these categories have short useful lives, and the depreciation rates provide a realistic reflection of consumption and reduction in carrying value.  The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

Financial assets

Classification

WICS classifies its financial assets as ‘loans and receivables’.  WICS does not hold any financial assets that would be classified as ‘available for sale’ or ‘held-to-maturity’. The classification depends on the purpose for which the financial assets were acquired and is determined at initial recognition.

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date which are classified as non-current assets. Loans and receivables comprise other receivables and cash and cash equivalents.

Recognition and measurement 

Financial assets are recognised when WICS becomes party to the contractual provisions of the financial instrument.  Financial assets are no longer recognised when the rights to receive cash flows from the asset have expired or WICS has transferred substantially all risks and rewards of ownership. 

Loans and receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.  A provision for impairment of loans and receivables is established when there is objective evidence that WICS will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that the loan and receivable is impaired. The carrying amount of the asset is reduced using a provision account and the amount of the loss is recognised in the comprehensive statement of income and expenditure. When a loan or receivable is uncollectible it is written off against the provision account.  Subsequent recoveries of amounts previously written off are credited in the comprehensive statement of income and expenditure.

Financial liabilities

Classification

WICS classifies its financial liabilities on initial recognition as other financial liabilities.  Other financial liabilities are included in current liabilities, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current liabilities. WICS’ other financial liabilities comprise trade and other payables in the balance sheet.

Recognition and measurement 

Financial liabilities are recognised when WICS becomes party to the contractual provisions of the financial instrument.  A financial liability is removed from the balance sheet when it is extinguished, that is when the obligation is discharged, cancelled, or expired.  Other financial liabilities are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

Cash and cash equivalents

Cash and cash equivalents include cash in hand and deposits held at call with banks.

Provisions

Provisions are recognised when WICS has a present legal or constructive obligation because of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. 

Where there are several similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax interest rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as an interest expense.

Income and expenditure

Funding is by way of a statutory contribution paid by Scottish Water, as directed by Scottish Ministers. Licensing activity is funded by a levy charged to Licensed Providers. Income is also received from the beneficiaries of support provided by WICS in relation to Hydro Nation activities.

From 1 July 2021, WICS sub-leased its premises in Stirling. Rental income from the property are recorded as other income.

Purchases of goods and services are recorded as expenditure when the goods or services are received rather than when payments are made.

All income and expenditure is recognised in the statement of comprehensive net expenditure in the period to which it relates. 

Value added tax

Most of the activities of WICS are outside the scope of Value Added Tax (VAT) and, in general, WICS is not required to declare output tax to HMRC on the income that it receives.  Correspondingly, WICS is not entitled to recover VAT that it incurs on costs (input tax) in relation to these activities that fall outside the scope of VAT.  Such irrecoverable VAT is charged to the relevant expenditure category or included in the capitalised purchase cost of fixed assets.  

Operating Leases

In line with IAS17, leases where most of the risks and rewards of ownership of the asset remain with the lessor are classified as operating leases. Operating lease payments are recognised in the comprehensive statement of income and expenditure on a straight-line basis over the lease term. The benefit of any lease incentive is recognised as a reduction in rental expense on a straight-line basis over the life of the lease.

Employee benefits

Employees of WICS are members of the Local Government Pension Scheme (the Scheme) administered by Falkirk Council.  The Scheme is a tax approved, defined benefit occupational pension scheme and the scheme regulations are made under the Public Service Pension Schemes Act 2013 and, in the case of the Scheme (Transitional Provisions and Savings) (Scotland) Regulations 2014, under the Superannuation Act 1972. The Scheme is contracted out of the State Second Pension scheme and meets the government’s standards under the automatic enrolment provisions of the Pensions Act 2008. 

The Scheme is accounted for on a defined benefit basis under IAS 19.  Assets and liabilities of the Scheme are held separately from those of WICS.  The Scheme’s assets are measured using market values and the Scheme’s liabilities are measured using a projected unit method and discounted at the current rate of return on a high-quality corporate bond of equivalent term and currency to the liability.  Contributions to the Scheme are calculated to spread the cost of pensions over employees’ working lives.  The contributions are determined by an actuary based on triennial valuations using the Age Attained Method.  The actuaries also review the progress of the Scheme in each of the intervening years.  Variations from regular cost are spread over the expected average remaining working lifetime of members of the Scheme after making allowances for future withdrawals.

The expected cost of providing staff pensions to employees contributing to the Scheme is recognised in the statement of comprehensive expenditure on a systematic basis over the expected average remaining lives of members of the funds in accordance with IAS 19 and recognises retirement benefits as the benefits are earned and not when they are due to be paid.  The statement of comprehensive expenditure also includes the net impact of returns on the Scheme’s assets and interest on the Scheme’s liabilities, which is disclosed (net) as other finance income or interest payable.  A pension scheme asset is recognised on the balance sheet only to the extent the surplus may be recovered by reduced further contributions or to the extent that the trustees have agreed a refund from the scheme at the balance sheet date.  A pension scheme liability is recognised to the extent that WICS has a legal or constructive obligation to settle the liability.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in the statement of comprehensive net expenditure in the period in which they arise.

Past-service costs are recognised immediately in income and expenditure, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period (the vesting period). In this case, the past-service costs are amortised on a straight-line basis over the vesting period.

Termination benefits

Termination benefits are payable when employment is terminated before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. WICS recognises termination benefits when it is demonstrably committed to either: terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary redundancy.

Segmental reporting

Operating segments are identified based on internal reports about components of WICS that are regularly reviewed by the chief operating decision makers in order to allocate resources to the segments and assess their performance.

 

3.5.2 Income

	Year ended 31 March 2022 £	Year ended 31 March 2021 £
Scottish Water statutory contribution	2,256,440	1,234,100
Levy on licensed providers	1,672,724	1,314,642
Hydro Nation income	479,455	874,718
Other income	77,966	-
Total income	4,486,585	3,423,460

3.5.3 Analysis of net expenditure by segment

The purpose of activity reporting is to analyse costs by income stream, allowing for a better understanding of how (and against which activities) resources are being deployed. A summary of the full year report is detailed below. 

Contribution to overheads by activity	Year ended 31 March 2022 £	Year ended 31 March 2021 £
Network regulation	1,156,478	(275,640)
Retail	1,440,003	1,017,789
Hydro Nation	173,308	391,679
Total contribution to overheads	2,769,459	1,133,828
Overheads	(2,154,465)	(1,711,028)
Net surplus/(deficit) for the year after interest	614,994	(577,200)

3.5.4 Staff related costs

	Year ended 31 March 2022 £	Year ended 31 March 2021 £
Wages and salaries	1,898,595	1,807,968
Social security costs	218,446	211,925
Pension costs	829,381	470,026
Staff costs per statement of comprehensive net expenditure	2,946,372	2,489,919

The cash contributions made to the pension scheme are disclosed in note 3.5.12.

3.5.5 Other expenditure

	Year ended 31 March 2022 £	Year ended 31 March 2021 £
Travel and subsistence	16,572	283
Office accommodation	101,404	192,929
General operating costs	248,413	353,621
Regulation and licensing costs	285,927	687,268
Recruitment	8,172	28,491
Information technology	154,503	198,087
Finance charges	84,659	23,265
	899,650	1,483,944

The operating costs for the year are stated after charging the external audit fee of £13,940 (2020-21: £13,670) and, within office accommodation, an operating lease rental of £70,243 (2020-21: £139,650).

The office accommodation lease arrived at the ten-year break point on 14 March 2021. The break option was not invoked and WICS is now obligated to fulfil the full term of the lease – a further 5 years to 14 March 2026. WICS has sub-let the office accommodation to Zero Waste Scotland for the period 1 July 2021 to 30 September 2023 on a cost recovery basis.

Finance charges principally relate to the net interest cost of the pension scheme for the year (see note 3.5.12.

Services categorised under regulation and licensing costs are provided by external consultants.

3.5.6 Property, plant and equipment

	Information technology £	Furniture and fittings £	Total £
Cost
At 31 March 2021	117,061	274,011	391,072
Additions	11,910	-	11,910
Disposals	(12,568)	(102,927)	(115,495)
At 31 March 2022	116,403	171,084	287,487
Depreciation
At 31 March 2021	84,348	265,514	349,862
Charge for the year	22,753	1,611	24,364
Eliminated on disposals	(12,568)	(103,090)	(115,658)
At 31 March 2022	94,533	164,035	258,568
Net book value at 31 March 2022	21,870	7,049	28,919
Net book value at 31 March 2021	32,713	8,497	41,210

	Information technology £	Furniture and fittings £	Total £
Cost
At 31 March 2020	179,665	274,011	453,676
Additions	9,595	-	9,595
Disposals	(72,199)	-	(72,199)
At 31 March 2021	117,061	274,011	391,072
Depreciation
At 31 March 2020	128,510	262,211	390,721
Charge for the year	25,859	3,303	29,162
Eliminated on disposals	(70,021)	-	(70,021)
At March 2021	84,348	265,514	249,862
Net book value at March 2021	84,348	265,514	349,862
Net book value at 31 March 2021	32,713	8,497	41,210
Net book value at 31 March 2020	51,155	11,800	62,955

3.5.7 Other receivables

	Year ended 31 March 2022	Year ended 31 March 2021
Current receivables
Prepayments	51,520	12,682
Other receivables	10,587	131,385
Total other receivables	72,107	144,067

	Year ended 31 March 2022	Year ended 31 March 2021
Intra-government receivables
Central Government	7,498	1,143
Local Authorities	13,601	-
Bodies external to government	51,008	124,924
Total other receivables	72,107	144,067

3.5.8 Current liabilities

	Year ended 31 March 2022	Year ended 31 March 2021
Current payables
Trade payables	85,399	27,747
Taxation and Social Security	57,848	59,768
Accruals	227,450	1,530,781
Pension	50,184	45,067
Total current liabilities	420,881	1,663,363

	Year ended 31 March 2022	Year ended 31 March 2021
Intra-government payables
Local Authorities	67,964	60,658
Central Government	51,024	59,837
Bodies external to government	301,893	1,542,868
Total current liabilities	420,881	1,663,363

3.5.9 Provisions for liabilities and charges

	Year ended 31 March 2022	Year ended 31 March 2021
Balance at 1 April 2021	69,700	62,730
Provided in the year	4,268	6,970
Balance at 31 March 2022	73,968	69,700

The provision for dilapidation costs relates to WICS’ contractual duty to repair leasehold property on termination of the lease. Provision is made for the estimated costs of fully repairing leasehold properties at the balance sheet date.

3.5.10 Note to statement of change in equity

	Note	Operations	Pension	General Reserve
Balance at 1 April 2020		1,809,973	(663,000)	1,146,973
Changes in reserves 2020-21
Actuarial gains		-	1,616,000	1,616,000
Change in assumptions underlaying the present value of scheme liabilities		-	(5,129,000)	(5,129,000)
Net surplus/(deficit) for the year		(832,200)	255,000	(577,200)
Balance as at 31 March 2021		977,773	(3,921,000)	(2,943,227)
Changes in reserves 2021-22
Actuarial gains	3.5.12	-	974,000	974,000
Change in assumptions underlaying the present value of scheme liabilities	3.5.12	-	1,211,000	1,211,000
Net surplus/(deficit) for the year		1,079,994	(465,000)	614,994
Balance as at 31 March 2022		2,057,767	(2,201,000)	(143,233)

3.5.11 Commitments and contingent liabilities

Capital commitments

There were no capital commitments at 31 March 2022 (2020-21: £nil).  

Commitments under operating leases

Total future minimum lease payments under operating leases are given in the table below for each of the stated periods. The amounts relate entirely to WICS’ office accommodation.

	Year ended 31 March 2022 £	Year ended 31 March 2021 £
Not later than one year	81,605	20,441
Later than one year and not later than 5 years	276,411	340,110
Total	358,016	360,551

The lease ends on 13 March 2026.

Contingent liabilities

There are no contingent liabilities to disclose in the year.

 

3.5.12 Pension

Background

Some employees and former employees of WICS are members of the Local Government Superannuation Scheme administered by Falkirk Council.  This scheme is a defined benefit scheme. In the period WICS paid contributions totalling £466k (2020-21: £717k) into the Fund. Under the Superannuation Regulations, contributions are set to meet 100% of the overall liabilities of the Fund.  We have been advised that specific (minimum) rates for employer contributions in 2022-23 will be 29.4% (2020-21: 29.4%).

In accordance with IAS 19 WICS commissioned the Fund’s actuaries to undertake a valuation as at 31 March 2021.  This calculation was based on rolling forward valuation data at 31 March 2020 (the last formal valuation) to 31 March 2022 based on several financial assumptions.  

The main financial assumptions used included:

Financial assumptions	Year ended 31 March 2022 %	Year ended 31 March 2021 %
Pension increase rate (CPI)	3.15	2.80
Salary increase rate	3.75	3.40
Discount rate	2.75	2.05

The average future life expectancies at age 65 are summarised below.

Financial assumptions	Males	Females
Current pension (years)	20.4	23.0
Future pension (years)	21.6	25.0

Change in the fair value of plan assets, defined benefit obligation and net liability for the year ended 31 March 2022

	Assets £(000)	Obligations £(000)	Net (liability)/asset £(000)
Fair value of employer assets	9,660	-	9,660
Present value of funded liabilities	-	13,539	(13,539)
Present value of unfunded liabilities	-	42	(42)
Opening position as at 31 March 2021	9,660	13,581	(3,921)
Current service cost	-	846	(846)
Total service cost	-	846	(846)
Net interest
Interest income on plan assets	202	-	202
Interest cost defined benefit obligation	-	287	(287)
Total net interest	202	1,333	(931)
Cashflows
Participants' contributions	132	132	-
Employer contributions	463	-	463
Estimated benefits paid	(160)	(160)	-
Estimated unfunded benefits paid	(3)	-	3
Expected closing position	10,297	14,683	(4,386)
Re-measurements
Change in financial assumptions	-	(1,179)	1,179
Change in demographic assumptions	-	(70)	(70)
Other experience	-	38	(38)
Return on assets excluding amounts included in net interest	974	-	974
Total re-measurement recognised in Other Comprehensive Income (OCI)	974	(1,211)	2,185
Fair value of employer assets	11,271	-	11,271
Present value of funded liabilities	-	13,432	(13,432)
Present value of unfunded liabilities	-	40	(40)
Closing position as at 31 March 2022	11,271	13,472	(2,201)

Change in the fair value of plan assets, defined benefit obligation and net liability for the year ended 31 March 2021

	Assets £(000)	Obligations £(000)	Net (liability)/asset £(000)
Fair value of employer assets	7,187	-	7,187
Present value of funded liabilities	-	7,180	(7,180)
Present value of unfunded liabilities	-	40	(40)
Opening position as at 31 March 2020	7,187	7,850	(663)
Current service cost	-	450	(450)
Total service cost		450	(450
Net interest
Interest income on plan assets	173	-	173
Interest cost defined benefit obligation	-	185	(185)
Total net interest	173	185	(12)
Total defined cost recognised in deficit	173	635	(462)
Cashflows
Participants' contributions	117	117	-
Employer contributions	714	-	714
Estimated benefits paid	(147)	(147)	-
Estimated unfunded benefits paid	(3)	(3)	-
Estimated contributions in respect of unfunded benefits paid	3	-	3
Expected closing position	8,044	8,452	(408)
Re-measurements
Change in financial assumptions	-	3,426	(3,426)
Change in demographic assumptions	-	87	(87)
Other experience	110	1,616	(1,506)
Return on assets excluding amounts included in net interest	1,506	-	1,506
Total re-measurement recognised in Other Comprehensive Income (OCI)	1,616	5,129	(3,513)
Fair value of employer assets	9,660	-	9,660
Present value of funded liabilities	-	13,539	(13,539)
Present value of unfunded liabilities	-	42	(42)
Closing position as at 31 March 2022	9,660	13,581	(3,921)

Fair value of plan assets for the period ended 31 March 2022

The below asset values are at bid value as required under IAS19

Asset category	Quoted prices in active markets  £(000)	Quoted prices not in active markets  £(000)	Total £(000)	Percentage of total assets
Equity securities
Consumer	841.6	-	841.6	7%
Manufacturing	605.8	-	605.8	5%
Energy and utilities	399.1	-	399.1	4%
Financial consumption	936.4	-	936.4	8%
Health and care	309.7	-	309.7	3%
Information technology	1,033.7	-	1,033.7	9%
Other	59.5	-	59.5	1%
Debt securities
UK Government	158.4	-	158.4	1%
Private equity
All	-	164.3	164.3	1%
Real estate
UK property	-	623.9	623.9	6%
Overseas property	-	1.0	1.0	0%
Investment funds and unit trusts
Equities	2,777.9	-	2,777.9	25%
Bonds	706.9	-	706.9	6%
Infrastructure	-	1,100.2	1,100.2	10%
Other	1,038.0	253.3	1,291.3	11%
Cash and cash equivalents
All	261.3	-	261.3	2%
Totals	9,128	2,143	11,271	100%

The asset value, at bid value, for the period ended 31 March 2021 are outlined below.

Asset category	Quoted prices in active markets  £(000)	Quoted prices not in active markets  £(000)	Total £(000)	Percentage of total assets
Equity securities
Consumer	721.3	-	721.3	7%
Manufacturing	519.2	-	519.2	5%
Energy and utilities	342.1	-	342.1	4%
Financial consumption	802.5	-	802.5	8%
Health and care	265.4	-	265.4	3%
Information technology	886.0	-	886.0	9%
Other	51.0	-	51.0	1%
Debt securities
UK Government	135.8	-	135.8	1%
Private equity
All	-	140.8	140.8	1%
Real estate
UK property	-	534.7	534.7	6%
Overseas property	-	0.8	0.8	0%
Investment funds and unit trusts
Equities	2,380.9	-	2,380.9	25%
Bonds	605.8	-	605.8	6%
Infrastructure	-	943.0	943.0	10%
Other	889.7	217.1	1,106.8	11%
Cash and cash equivalents
All	223.9	-	223.9	2%
Totals	7,824	1,836	9,660	100%

Projected defined benefit cost for the period to 31 March 2023

	Assets	Obligations	Net (liability)/asset	% of pay
Projected current service cost	-	728	(728)	(46.2%)
Total service cost	-	728	(728)	(46.2%)
Interest income on plan assets	316	-	316	20.1%
Interest cost on defined benefit obligation	-	380	(380)	(24.1%)
Total net interest cost	316	380	(64)	(4.0%)
Total included in income statement	316	1,108	(792)	(50.2%)

Employer’s contributions for the period to 31 March 2023 will be approximately £463,000.

Sensitivity analysis

The sensitivities regarding the principal assumptions used to measure the scheme liabilities are set out below.

Change in assumptions at 31 March 2022	Approximate % increase to employer	Approximate monetary amount £(000)
0.1% decrease in real discount rate	2%	321
0.1% increase in the salary increase rate	0%	24
0.1% increase in the pension increase rate (CPI)	2%	295
1 year increase in member life expectancy	4%	539

3.5.13 Related party transactions

As WICS is a non-departmental public body sponsored by the Scottish Government, the Scottish Government is regarded as a related party. There have been no transactions between WICS and the Scottish Government. 

WICS has had transactions with other central and local government bodies: Scottish Water, Falkirk Council, Stirling Council and Audit Scotland. 

A levy is received from each licensed provider to fund any licensing activity carried out by WICS. Business Stream is a licensed provider and provided WICS with water and wastewater services up to 30 June 2021. Therefore Business Stream is considered a related party. 

Related party	Income £	Expenditure £	Year-end receivable £	Year-end payable £
Scottish Water Business Stream	923,802	344	-	-

All Board members and Directors complete and update a register of interests on an annual basis.  During the year 2020-21, no Board Member, Director or other related party has undertaken any material transactions with WICS.