You are given the cash flow statements for the last two years for Deek Lining plc, which are as follows:

An extract from the chairman’s statement reads as follows:
Year 4 was another successful year, producing a positive cash flow which enabled us to pay off a substantial amount of borrowings, to invest in new fixed assets, and to increase the dividend for ordinary shareholders.

Critically appraise this statement.

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Cash flow statement of Deek Lining plc for the year ended 31 December Year 3 Year 4 000 000 Cash flows from operating activities Profit before tax 3,200 (1,350) Depreciation 2,600 2,800 5,800 1,450 Interest expense 200 150 (Increase) Decrease in trade receivables (600) 300 (Increase) Decrease in inventories (400) 200 (Decrease) Increase in trade payables (100) 100 Cash inflow from operations 4,900 2,200 Interest paid (200) (150) Income taxes paid Dividend paid (1,300) (100) (600) (700) Net cash flow from operating activities 2,800 1,250 Cash flows from investing activities Proceeds from disposal of equipment Purchase of property and equipment Net cash from investing activities Cash flows from financing activities 100 1,100 (3,700) (150) (3,600) 950 Proceeds of issue of shares Increase (Decrease) in borrowings 200 (1,000) Net raised cash from (used in) financing activities 200 (1,000) Net (decrease)/increase in cash (600) 1,200 Opening cash 700 (100) Closing cash 100 1,100