The following information has been taken from the financial statements for Payne plc (Payne) for the year ended 31 March 2013.
*Statement of Profit or Loss and Other Comprehensive Income (extracts) for year ended 31 March 2013:
.......................................................................... €000
Profit before interest and tax ........................................ 981
Finance costs ........................................................ (108)
Profit before tax ...................................................... 873
Income tax expense ................................................ (305)
Profit for the year .................................................... 568
Other comprehensive income
Revaluation surplus on property, plant and equipment ........ 418
Total comprehensive income ...................................... 986
Statements of Financial Position as at 31 March

Statement of Changes in Equity for the year ended 31 March 2013 (extract)

* In June 2011, the IASB issued amendments to IAS 1 Presentation of Financial Statements. One of these proposed the adoption of the title Statement of Profit or Loss and Other Comprehensive Income for the performance statement. The title Statement of Comprehensive Income could have been used above.
The following additional information is relevant:
(i) During the year Payne issued both ordinary shares and redeemable preference shares for cash. The latter were issued at par.
(ii) Investments classified as current assets are held for the short term and are readily convertible into the stated amounts of cash on demand.
(iii) During the year, Payne sold plant and equipment with a carrying amount of €840,500 for €900,000.
Total depreciation charges for the year amounted to €1,100,000. Plant costing €50,000 was purchased on credit. The amount is included within trade and other payables.
(iv) Trade and other payables include accrued interest of €5,000 as at 31 March 2013 (2012: €10,000).
(v) Intangibles relate to development costs capitalized in accordance with IAS 38 Intangible Assets. Costs amounting to €70,000 were capitalized during the year.
Required:
(a) Prepare a Statement of Cash Flows for Payne for the year to 31 March 2013 in accordance with IAS 7 Statement of Cash Flows.
(b) You have been provided with the following additional information in relation to Payne's trading performance for the years ended on the stated dates:
__________________ 31/3/2013 __________ 31/3/2012
.............................. €000 ...................... €000
Revenue .................. 3,400 ..................... 2,800
Cost of sales ............ (2,040) ................... (1,400)
Operating expenses ... (379) ..................... (357)
Write a report concisely analyzing the cash flow, profitability and working capital management of Payne Ltd during the year ended 31 March 2013. Your report should be supported by appropriate ratios.
(Institute of Certified Public Accountants (CPA) Professional Stage 1 Corporate Reporting Examination, April 2013)