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 2005. These products now account for 60 per cent of its turnover.

Income statement for the years ended 31 March 2006 2007 Notes £m £m Revenue 7,003 11,205 Cost of sales (3,748) (5,809)

Gross profit 3,255 5,396 Operating expenses (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 for the year 624 1,463 Balance sheets as at 31 March 2006 2007 Notes £m £m Non-current assets Property, plant and equipment 2 4,300 7,535 Intangible assets 3 – 700 4,300 8,235 Current assets Inventories 1,209 2,410 Trade receivables 641 1,173 Cash at bank 123 –

1,973 3,583 Total assets 6,273 11,818 Equity Share capital 1,800 1,800 Share premium 600 600 Capital reserves 352 352 Retained profits 685 1,748 3,437 4,500 Non-current liabilities Borrowings – Bank loan (repayable 2011) 1,800 3,800 Current liabilities Trade payables 931 1,507 Taxation 105 195 Borrowings (all bank overdraft) – 1,816 1,036 3,518 Total equity and liabilities 6,273 11,818 Notes:

1 The expense and the cash outflow for interest payable are equal.

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

Land Plant Fixtures and and and buildings machinery fittings Total

£m £m £m £m Cost At 1 April 2006 4,500 3,850 2,120 10,470 Additions – 2,970 1,608 4,578 Disposals – (365) (216) (581)

At 31 March 2007 4,500 6,455 3,512 14,467 Depreciation At 1 April 2006 1,275 3,080 1,815 6,170 Charge for year 225 745 281 1,251 Disposals – (305) (184) (489)

At 31 March 2007 1,500 3,520 1,912 6,932 Carrying amount At 31 March 2007 3,000 2,935 1,600 7,535