Chen plc’s income statements for the years ended 31 December 2006 and 2007 and the balance sheets as at 31 December 2006 and 2007 are as follows:

Income statement 2006 2007

£m £m Revenue 207 153 Cost of sales (101) (76)

Gross profit 106 77 Distribution expenses (22) (20)

Administrative expenses (20) (28)

Operating profit 64 29 Interest payable (4) (4)

Profit before taxation 60 25 Taxation (16) (6)

Profit for the year 44 19 Balance sheets as at 31 December 2006 and 2007 2006 2007

£m £m Non-current assets Property, plant and equipment Land and buildings 110 130 Plant and machinery 62 56 172 186 Current assets Inventories 24 25 Trade receivables 26 25 Cash at bank and in hand 19 –

69 50 Total assets 241 236 Equity Called-up ordinary share capital 100 100 Retained earnings 56 57 156 157 Non-current liabilities Borrowings – Loan notes (10%) 40 40 Current liabilities Borrowings (all bank overdraft) – 2 Trade payables 37 34 Taxation 8 3 45 39 Total equity and liabilities 241 236 Included in ‘cost of sales’, ‘distribution costs’ and ‘administrative expenses’, depreciation was as follows:

2006 2007

£m £m Land and buildings 6 10 Plant and machinery 10 12 There were no non-current asset disposals in either year. The amount of cash paid for interest equalled the expense in both years. Dividends were paid totalling £18m in each year.

Required:

Prepare a cash flow statement for the business for 2007.