The following financial statements for Blackstone plc are a slightly simplified set of published accounts. Blackstone plc is an engineering business that developed a new range of products in 2004; these now account for 60 per cent of its turnover.

Income statement for the years ended 31 March 2005 2006 Notes £m £m Revenue 7,003 11,205 Cost of sales (3,748) (5,809)

Gross profit 3,255 5,396 Operating costs (2,205) (3,087)

Operating profit 1,050 2,309 Interest payable 1 (216) (456)

Profit before taxation 834 1,853 Taxation (210) (390)

Profit after taxation 624 1,463 Dividend paid (300) (400)

Retained profit for the year 324 1,063 Retained profit brought forward 361 685 Retained profit carried forward 685 1,748 Balance sheets as at 31 March 2005 2006 Notes £m £m £m £m Non-current assets Intangible assets 2 – 700 Property, plant and equipment 3 4,300 7,535 4,300 8,235 Current assets Inventories 1,209 2,410 Trade receivables 641 1,173 Cash at bank 123 –

1,973 3,583 Current liabilities Trade payables (931) (1,507)

Taxation (105) (195)

Bank overdraft – (1,816)

(1,036) (3,518)

Net current assets 937 65 Non-current liabilities Bank loan (repayable 2010) (1,800) (3,800)

3,437 4,500 Equity Share capital 1,800 1,800 Share premium 600 600 Capital reserves 352 352 Retained profits 685 1,748 3,437 4,500 Notes 1 The expense and the cash outflow for interest payable are equal.

2 Intangible assets represent the amounts paid for the goodwill of another engineering business acquired during the year.

3 The movements in property, plant and equipment during the year are set out below.

Land and Plant and Fixtures and buildings machinery fittings Total

£m £m £m £m Cost At 1 April 2005 4,500 3,850 2,120 10,470 Additions – 2,970 1,608 4,578 Disposals – (365) (216) (581)

At 31 March 2006 4,500 6,455 3,512 14,467 Depreciation At 1 April 2005 1,275 3,080 1,815 6,170 Charge for year 225 745 281 1,251 Disposals – (305) (184) (489)

At 31 March 2006 1,500 3,520 1,912 6,932 Net book value At 31 March 2006 3,000 2,935 1,600 7,535 Proceeds from the sale of non-current assets in the year ended 31 March 2006 amounted to £54 million.
Required:
Prepare a cash flow statement for Blackstone plc for the year ended 31 March 2006.
(Hint: A loss (deficit) on disposal of non-current assets is simply an additional amount of depreciation and should be dealt with as such in preparing the cash flow statement.)