The following information has been extracted from the draft financial statements of ZamCop Ltd, a limited liability Company. ZamCop Ltd Balance Sheets as at 31 May 2006 2005 K Millions K Millions K Millions K Millions Non-current assets 4,600 2,700 Current assets Inventory 580 500 Trade receivables 360 230 Bank 0 940 170 900 Total assets 5,540 3,600 Equity and liabilities Capital and reserves Ordinary share capital 3,500 2,370 Share premium 300 150 Retained earnings 1,052 470 4,852 2,990 Non-current liabilities 10% Loan note (Redeemable 31 May 2006) 100 Current liabilities Trade payables 450 365 Taxation 180 145 Bank overdraft 58 688 0 510 Total equity and liabilities 5,540 3,600 Additional Information: (i) The income statement for the year ended 31 May 2006 shows the following: K Millions Operating profit 1,042 Interest payable (10) Profit before taxation 1,032 Taxation (180) Profit for financial year 852 (ii) During the year dividends paid were K270, 000,000. (iii) Profit before taxation had been arrived at after charging K700, 000,000 for depreciation on non-current assets. (iv) During the year non-current assets with a net book value of K200, 000,000 were sold for K180, 000,000. Required: (a) Prepare a cash flow statement for ZamCop Ltd for the year ended 31 May 2006 in accordance with IAS 7 Cash Flow Statements, using the indirect method. (b) Comment on the financial position of ZamCop Ltd as shown by the cash flow statement you have prepared. (c) Briefly state some of the ways in which companies could manipulate their year-end cash position.