Indian Accounting Standard (Ind AS) 7

Statement of Cash Flows

Contents
Paragraphs
OBJECTIE
SCO!E "#$
BE%EFITS OF CAS& F'O( I%FO)*ATIO% +#,
-EFI%ITIO%S .#/
Cash and cash e0ui1alents 7#/
!)ESE%TATIO% OF A STATE*E%T OF CAS& F'O(S "2#"7
O3erating acti1ities "$#",
In1esting acti1ities ".
Financing acti1ities "7
)E!O)TI%4 CAS& F'O(S F)O* O!E)ATI%4
ACTIITIES "5#62
)E!O)TI%4 CAS& F'O(S F)O* I%ESTI%4 A%-
FI%A%CI%4 ACTIITIES 6"
)E!O)TI%4 CAS& F'O(S O% A %ET BASIS 66#6+
FO)EI4% C7))E%C8 CAS& F'O(S 6,#65
I%TE)EST A%- -II-E%-S $"#$+
TA9ES O% I%CO*E $,#$.
I%EST*E%TS I% S7BSI-IA)IES: ASSOCIATES A%- JOI%T
E%T7)ES $7#$5
C&A%4ES I% O(%E)S&I! I%TE)ESTS I% S7BSI-IA)IES
A%- OT&E) B7SI%ESSES $/#+6B
%O%;CAS& T)A%SACTIO%S +$#++
CO*!O%E%TS OF CAS& A%- CAS& E<7IA'E%TS +,#+7
OT&E) -ISC'OS7)ES +5#,6
A!!E%-ICES
A Illustrati1e E=am3les Statement of cash flows for an entit> other than a
financial institution
B Illustrati1e E=am3les Statement of cash flows for a financial institution
" Com3arison with IAS 7: Statement of Cash Flows
2
Indian Accounting Standard (Ind AS) 7

Statement of Cash Flows
(This Indian Accounting Standard includes paragraphs set in bold type and plain type, which
have equal authority. Paragraphs in bold type indicate the main principles.)
O?@ecti1e
Information about the cash flows of an entity is useful in providing users of financial statements
with a basis to assess the ability of the entity to generate cash and cash equivalents and the needs
of the entity to utilise those cash flows. The economic decisions that are taken by users require
an evaluation of the ability of an entity to generate cash and cash equivalents and the timing and
certainty of their generation.
The objective of this Standard is to require the provision of information about the historical
changes in cash and cash equivalents of an entity by means of a statement of cash flows which
classifies cash flows during the period from operating, investing and financing activities.
Sco3e
" An entit> shall 3re3are a statement of cash flows in accordance with the
re0uirements of this Standard and shall 3resent it as an integral 3art of its financial
statements for each 3eriod for which financial statements are 3resentedA
2 !efer to "ppendi# $%
& 'sers of an entity(s financial statements are interested in how the entity generates and
uses cash and cash equivalents. This is the case regardless of the nature of the entity(s
activities and irrespective of whether cash can be viewed as the product of the entity, as
may be the case with a financial institution. )ntities need cash for essentially the same
reasons however different their principal revenue*producing activities might be. They
need cash to conduct their operations, to pay their obligations, and to provide returns to
their investors. "ccordingly, this Standard requires all entities to present a statement of
cash flows.
Benefits of cash flow information
+ " statement of cash flows, when used in conjunction with the rest of the financial
statements, provides information that enables users to evaluate the changes in net assets
of an entity, its financial structure ,including its liquidity and solvency- and its ability to
&
affect the amounts and timing of cash flows in order to adapt to changing circumstances
and opportunities. .ash flow information is useful in assessing the ability of the entity to
generate cash and cash equivalents and enables users to develop models to assess and
compare the present value of the future cash flows of different entities. It also enhances
the comparability of the reporting of operating performance by different entities because
it eliminates the effects of using different accounting treatments for the same transactions
and events.
/ 0istorical cash flow information is often used as an indicator of the amount, timing and
certainty of future cash flows. It is also useful in checking the accuracy of past
assessments of future cash flows and in e#amining the relationship between profitability
and net cash flow and the impact of changing prices.
-efinitions
. The following terms are used in this Standard with the meanings s3ecifiedB
ash com3rises cash on hand and demand de3ositsA
ash equivalents are short;term: highl> li0uid in1estments that are readil>
con1erti?le to Cnown amounts of cash and which are su?@ect to an insignificant risC
of changes in 1alueA
ash !lows are inflows and outflows of cash and cash e0ui1alentsA
"perating activities are the 3rinci3al re1enue;3roducing acti1ities of the entit> and
other acti1ities that are not in1esting or financing acti1itiesA
Investing activities are the ac0uisition and dis3osal of long;term assets and other
in1estments not included in cash e0ui1alentsA
#inancing activities are acti1ities that result in changes in the siDe and com3osition of
the contri?uted e0uit> and ?orrowings of the entit>A
Cash and cash e0ui1alents
1 .ash equivalents are held for the purpose of meeting short*term cash commitments rather
than for investment or other purposes. 2or an investment to qualify as a cash equivalent it
must be readily convertible to a known amount of cash and be subject to an insignificant
risk of changes in value. Therefore, an investment normally qualifies as a cash equivalent
only when it has a short maturity of, say, three months or less from the date of
acquisition. )quity investments are e#cluded from cash equivalents unless they are, in
substance, cash equivalents, for e#ample in the case of preference shares acquired within
a short period of their maturity and with a specified redemption date.
3 4ank borrowings are generally considered to be financing activities. 0owever, where
bank overdrafts which are repayable on demand form an integral part of an entity5s cash
+
management, bank overdrafts are included as a component of cash and cash equivalents.
" characteristic of such banking arrangements is that the bank balance often fluctuates
from being positive to overdrawn.
6 .ash flows e#clude movements between items that constitute cash or cash equivalents
because these components are part of the cash management of an entity rather than part
of its operating, investing and financing activities. .ash management includes the
investment of e#cess cash in cash equivalents.
!resentation of a statement of cash flows
"2 The statement of cash flows shall re3ort cash flows during the 3eriod classified ?>
o3erating: in1esting and financing acti1itiesA
$$ "n entity presents its cash flows from operating, investing and financing activities in a
manner which is most appropriate to its business. .lassification by activity provides
information that allows users to assess the impact of those activities on the financial
position of the entity and the amount of its cash and cash equivalents. This information
may also be used to evaluate the relationships among those activities.
$2 " single transaction may include cash flows that are classified differently. 2or e#ample,
when the instalment paid in respect of a fi#ed asset acquired on deferred payment basis
includes both interest and loan, the interest element is classified under financing activities
and the loan element is classified under investing activities.
O3erating acti1ities
$& The amount of cash flows arising from operating activities is a key indicator of the e#tent
to which the operations of the entity have generated sufficient cash flows to repay loans,
maintain the operating capability of the entity, pay dividends and make new investments
without recourse to e#ternal sources of financing. Information about the specific
components of historical operating cash flows is useful, in conjunction with other
information, in forecasting future operating cash flows.
$+ .ash flows from operating activities are primarily derived from the principal revenue*
producing activities of the entity. Therefore, they generally result from the transactions
and other events that enter into the determination of profit or loss. )#amples of cash
flows from operating activities are7
,a- cash receipts from the sale of goods and the rendering of services8
,b- cash receipts from royalties, fees, commissions and other revenue8
,c- cash payments to suppliers for goods and services8
,d- cash payments to and on behalf of employees8
/
,e- cash receipts and cash payments of an insurance entity for premiums and claims,
annuities and other policy benefits8
,f- cash payments or refunds of income ta#es unless they can be specifically
identified with financing and investing activities8 and
,g- cash receipts and payments from contracts held for dealing or trading purposes.
Some transactions, such as the sale of an item of plant, may give rise to a gain or loss that
is included in recognised profit or loss. The cash flows relating to such transactions are
cash flows from investing activities. 0owever, cash payments to manufacture or acquire
assets held for rental to others and subsequently held for rental to others and subsequently
held for sale as described in paragraph 93" of Ind "S $9 Property, Plant and $quipment
are cash flows from operating activities. The cash receipts from rents and subsequent
sales of such assets are also cash flows from operating activities.
$/ "n entity may hold securities and loans for dealing or trading purposes, in which case
they are similar to inventory acquired specifically for resale. Therefore, cash flows
arising from the purchase and sale of dealing or trading securities are classified as
operating activities. Similarly, cash advances and loans made by financial institutions are
usually classified as operating activities since they relate to the main revenue*producing
activity of that entity.
In1esting acti1ities
$9 The separate disclosure of cash flows arising from investing activities is important
because the cash flows represent the e#tent to which e#penditures have been made for
resources intended to generate future income and cash flows. :nly e#penditures that
result in a recogni;ed asset in the balance sheet are eligible for classification as investing
activities. )#amples of cash flows arising from investing activities are7
,a- cash payments to acquire property, plant and equipment, intangibles and other
long*term assets. These payments include those relating to capitalised
development costs and self*constructed property, plant and equipment8
,b- cash receipts from sales of property, plant and equipment, intangibles and other
long*term assets8
,c- cash payments to acquire equity or debt instruments of other entities and interests
in joint ventures ,other than payments for those instruments considered to be cash
equivalents or those held for dealing or trading purposes-8
,d- cash receipts from sales of equity or debt instruments of other entities and
interests in joint ventures ,other than receipts for those instruments considered to
be cash equivalents and those held for dealing or trading purposes-8
,e- cash advances and loans made to other parties ,other than advances and loans
made by a financial institution-8
9
,f- cash receipts from the repayment of advances and loans made to other parties
,other than advances and loans of a financial institution-8
,g- cash payments for futures contracts, forward contracts, option contracts and swap
contracts e#cept when the contracts are held for dealing or trading purposes, or
the payments are classified as financing activities8 and
,h- cash receipts from futures contracts, forward contracts, option contracts and swap
contracts e#cept when the contracts are held for dealing or trading purposes, or
the receipts are classified as financing activities.
<hen a contract is accounted for as a hedge of an identifiable position the cash flows of
the contract are classified in the same manner as the cash flows of the position being
hedged.
Financing acti1ities
$1 The separate disclosure of cash flows arising from financing activities is important
because it is useful in predicting claims on future cash flows by providers of capital to the
entity. )#amples of cash flows arising from financing activities are7
,a- cash proceeds from issuing shares or other equity instruments8
,b- cash payments to owners to acquire or redeem the entity(s shares8
,c- cash proceeds from issuing debentures, loans, notes, bonds, mortgages and other
short*term or long*term borrowings8
,d- cash repayments of amounts borrowed8 and
,e- cash payments by a lessee for the reduction of the outstanding liability relating to
a finance lease.
)e3orting cash flows from o3erating acti1ities
"5 An entit> shall re3ort cash flows from o3erating acti1ities using eitherB
(a) the direct method: where?> ma@or classes of gross cash recei3ts and gross
cash 3a>ments are disclosedE or
(?) the indirect method: where?> 3rofit or loss is ad@usted for the effects of
transactions of a non;cash nature: an> deferrals or accruals of 3ast or future
o3erating cash recei3ts or 3a>ments: and items of income or e=3ense
associated with in1esting or financing cash flowsA
1
$6 )ntities are encouraged to report cash flows from operating activities using the direct
method. The direct method provides information which may be useful in estimating
future cash flows and which is not available under the indirect method. 'nder the direct
method, information about major classes of gross cash receipts and gross cash payments
may be obtained either7
,a- from the accounting records of the entity8 or
,b- by adjusting sales, cost of sales ,interest and similar income and interest e#pense
and similar charges for a financial institution- and other items in the statement of
profit and loss for7
,i- changes during the period in inventories and operating receivables and
payables8
,ii- other non*cash items8 and
,iii- other items for which the cash effects are investing or financing cash
flows.
2= 'nder the indirect method, the net cash flow from operating activities is determined by
adjusting profit or loss for the effects of7
,a- changes during the period in inventories and operating receivables and payables8
,b- non*cash items such as depreciation, provisions, deferred ta#es, unrealised foreign
currency gains and losses, and undistributed profits of associates8 and
,c- all other items for which the cash effects are investing or financing cash flows.
"lternatively, the net cash flow from operating activities may be presented under the
indirect method by showing the revenues and e#penses disclosed in the statement of
profit and loss and the changes during the period in inventories and operating receivables
and payables.
)e3orting cash flows from in1esting and financing acti1ities
6" An entit> shall re3ort se3aratel> ma@or classes of gross cash recei3ts and gross cash
3a>ments arising from in1esting and financing acti1ities: e=ce3t to the e=tent that
cash flows descri?ed in 3aragra3hs 66 and 6+ are re3orted on a net ?asisA
)e3orting cash flows on a net ?asis
66 Cash flows arising from the following o3erating: in1esting or financing acti1ities
ma> ?e re3orted on a net ?asisB
3
(a) cash recei3ts and 3a>ments on ?ehalf of customers when the cash flows
reflect the acti1ities of the customer rather than those of the entit>E and
(?) cash recei3ts and 3a>ments for items in which the turno1er is 0uicC: the
amounts are large: and the maturities are shortA
2& )#amples of cash receipts and payments referred to in paragraph 22,a- are7
,a- the acceptance and repayment of demand deposits of a bank8
,b- funds held for customers by an investment entity8 and
,c- rents collected on behalf of, and paid over to, the owners of properties.
2&" )#amples of cash receipts and payments referred to in paragraph 22,b- are advances
made for, and the repayment of7
,a- principal amounts relating to credit card customers8
,b- the purchase and sale of investments8 and
,c- other short*term borrowings, for e#ample, those which have a maturity period of
three months or less.
6+ Cash flows arising from each of the following acti1ities of a financial institution ma>
?e re3orted on a net ?asisB
(a) cash recei3ts and 3a>ments for the acce3tance and re3a>ment of de3osits
with a fi=ed maturit> dateE
(?) the 3lacement of de3osits with and withdrawal of de3osits from other
financial institutionsE and
(c) cash ad1ances and loans made to customers and the re3a>ment of those
ad1ances and loansA
Foreign currenc> cash flows
6, Cash flows arising from transactions in a foreign currenc> shall ?e recorded in an
entit>Fs functional currenc> ?> a33l>ing to the foreign currenc> amount the
e=change rate ?etween the functional currenc> and the foreign currenc> at the date
of the cash flowA
6. The cash flows of a foreign su?sidiar> shall ?e translated at the e=change rates
?etween the functional currenc> and the foreign currenc> at the dates of the cash
flowsA
6
21 .ash flows denominated in a foreign currency are reported in a manner consistent with
Ind "S 2$ The $!!ects o! hanges in #oreign $%change &ates. This permits the use of an
e#change rate that appro#imates the actual rate. 2or e#ample, a weighted average
e#change rate for a period may be used for recording foreign currency transactions or the
translation of the cash flows of a foreign subsidiary. 0owever, Ind "S 2$ does not
permit use of the e#change rate at the end of the reporting period when translating the
cash flows of a foreign subsidiary.
23 'nrealised gains and losses arising from changes in foreign currency e#change rates are
not cash flows. 0owever, the effect of e#change rate changes on cash and cash
equivalents held or due in a foreign currency is reported in the statement of cash flows in
order to reconcile cash and cash equivalents at the beginning and the end of the period.
This amount is presented separately from cash flows from operating, investing and
financing activities and includes the differences, if any, had those cash flows been
reported at end of period e#change rates.
26 !efer to "ppendi# $%
&= !efer to "ppendi# $%
Interest and di1idends
$" Cash flows from interest and di1idends recei1ed and 3aid shall each ?e disclosed
se3aratel>A Cash flows arising from interest 3aid and interest and di1idends
recei1ed in the case of a financial institution should ?e classified as cash flows
arising from o3erating acti1itiesA In the case of other entities: cash flows arising
from interest 3aid should ?e classified as cash flows from financing acti1ities while
interest and di1idends recei1ed should ?e classified as cash flows from in1esting
acti1itiesA -i1idends 3aid should ?e classified as cash flows from financing acti1itiesA
&2 The total amount of interest paid during a period is disclosed in the statement of cash
flows whether it has been recognised as an e#pense in profit or loss or capitalised in
accordance with Ind "S 2& 'orrowing osts.
&& Interest paid and interest and dividends received are usually classified as operating cash
flows for a financial institution. 0owever, there is no consensus on the classification of
these cash flows for other entities. Some argue that interest paid and interest and
dividends received may be classified as operating cash flows because they enter into the
determination of profit or loss. 0owever, it is more appropriate that interest paid and
interest and dividends received are classified as financing cash flows and investing cash
flows respectively, because they are costs of obtaining financial resources or returns on
investments.
&+ Some argue that dividends paid may be classified as a component of cash flows from
operating activities in order to assist users to determine the ability of an entity to pay
dividends out of operating cash flows. 0owever, it is considered more appropriate that
dividends paid should be classified as cash flows from financing activities because they
are cost of obtaining financial resources.
$=
Ta=es on income
$, Cash flows arising from ta=es on income shall ?e se3aratel> disclosed and shall ?e
classified as cash flows from o3erating acti1ities unless the> can ?e s3ecificall>
identified with financing and in1esting acti1itiesA
&9 Ta#es on income arise on transactions that give rise to cash flows that are classified as
operating, investing or financing activities in a statement of cash flows. <hile ta#
e#pense may be readily identifiable with investing or financing activities, the related ta#
cash flows are often impracticable to identify and may arise in a different period from the
cash flows of the underlying transaction. Therefore, ta#es paid are usually classified as
cash flows from operating activities. 0owever, when it is practicable to identify the ta#
cash flow with an individual transaction that gives rise to cash flows that are classified as
investing or financing activities the ta# cash flow is classified as an investing or financing
activity as appropriate. <hen ta# cash flows are allocated over more than one class of
activity, the total amount of ta#es paid is disclosed.
In1estments in su?sidiaries: associates and @oint 1entures
&1 <hen accounting for an investment in an associate or a subsidiary accounted for by use
of the equity or cost method, an investor restricts its reporting in the statement of cash
flows to the cash flows between itself and the investee, for e#ample, to dividends and
advances.
&3 "n entity which reports its interest in a jointly controlled entity ,see Ind "S &$ Interests
in (oint )entures- using proportionate consolidation, includes in its consolidated
statement of cash flows its proportionate share of the jointly controlled entity(s cash
flows. "n entity which reports such an interest using the equity method includes in its
statement of cash flows the cash flows in respect of its investments in the jointly
controlled entity, and distributions and other payments or receipts between it and the
jointly controlled entity.
Changes in ownershi3 interests in su?sidiaries and other ?usinesses
$/ The aggregate cash flows arising from o?taining or losing control of su?sidiaries or
other ?usinesses shall ?e 3resented se3aratel> and classified as in1esting acti1itiesA
+2 An entit> shall disclose: in aggregate: in res3ect of ?oth o?taining and losing control
of su?sidiaries or other ?usinesses during the 3eriod each of the followingB
(a) the total consideration 3aid or recei1edE
(?) the 3ortion of the consideration consisting of cash and cash e0ui1alentsE
$$
(c) the amount of cash and cash e0ui1alents in the su?sidiaries or other
?usinesses o1er which control is o?tained or lostE and
(d) the amount of the assets and lia?ilities other than cash or cash e0ui1alents in
the su?sidiaries or other ?usinesses o1er which control is o?tained or lost:
summarised ?> each ma@or categor>A
+$ The separate presentation of the cash flow effects of obtaining or losing control of
subsidiaries or other businesses as single line items, together with the separate disclosure
of the amounts of assets and liabilities acquired or disposed of, helps to distinguish those
cash flows from the cash flows arising from the other operating, investing and financing
activities. The cash flow effects of losing control are not deducted from those of
obtaining control.
+2 The aggregate amount of the cash paid or received as consideration for obtaining or
losing control of subsidiaries or other businesses is reported in the statement of cash
flows net of cash and cash equivalents acquired or disposed of as part of such
transactions, events or changes in circumstances.
+2" .ash flows arising from changes in ownership interests in a subsidiary that do not result
in a loss of control shall be classified as cash flows from financing activities.
+24 .hanges in ownership interests in a subsidiary that do not result in a loss of control, such
as the subsequent purchase or sale by a parent of a subsidiary(s equity instruments, are
accounted for as equity transactions ,see Ind "S 21, onsolidated and Separate
#inancial Statements-. "ccordingly, the resulting cash flows are classified in the same
way as other transactions with owners described in paragraph $1.
%on;cash transactions
+$ In1esting and financing transactions that do not re0uire the use of cash or cash
e0ui1alents shall ?e e=cluded from a statement of cash flowsA Such transactions shall
?e disclosed elsewhere in the financial statements in a wa> that 3ro1ides all the
rele1ant information a?out these in1esting and financing acti1itiesA
++ >any investing and financing activities do not have a direct impact on current cash flows
although they do affect the capital and asset structure of an entity. The e#clusion of non*
cash transactions from the statement of cash flows is consistent with the objective of a
statement of cash flows as these items do not involve cash flows in the current period.
)#amples of non*cash transactions are7
,a- the acquisition of assets either by assuming directly related liabilities or by means
of a finance lease8
,b- the acquisition of an entity by means of an equity issue8 and
$2
,c- the conversion of debt to equity.
Com3onents of cash and cash e0ui1alents
+, An entit> shall disclose the com3onents of cash and cash e0ui1alents and shall
3resent a reconciliation of the amounts in its statement of cash flows with the
e0ui1alent items re3orted in the ?alance sheetA
+9 In view of the variety of cash management practices and banking arrangements around
the world and in order to comply with Ind "S $ Presentation o! #inancial Statements, an
entity discloses the policy which it adopts in determining the composition of cash and
cash equivalents.
+1 The effect of any change in the policy for determining components of cash and cash
equivalents, for e#ample, a change in the classification of financial instruments
previously considered to be part of an entity(s investment portfolio, is reported in
accordance with Ind "S 3, Accounting Policies, hanges in Accounting $stimates and
$rrors.
Other disclosures
+5 An entit> shall disclose: together with a commentar> ?> management: the amount of
significant cash and cash e0ui1alent ?alances held ?> the entit> that are not
a1aila?le for use ?> the grou3
"
A
+6 There are various circumstances in which cash and cash equivalent balances held by an
entity are not available for use by the group
2
. )#amples include cash and cash equivalent
balances held by a subsidiary that operates in a country where e#change controls or other
legal restrictions apply when the balances are not available for general use by the parent
or other subsidiaries.
/= "dditional information may be relevant to users in understanding the financial position
and liquidity of an entity. ?isclosure of this information, together with a commentary by
management, is encouraged and may include7
,a- the amount of undrawn borrowing facilities that may be available for future
operating activities and to settle capital commitments, indicating any restrictions
on the use of these facilities8
,b- the aggregate amounts of the cash flows from each of operating, investing and
financing activities related to interests in joint ventures reported using
proportionate consolidation8
$
The requirements shall be equally applicable to the entities in case of separate financial statements also.
2
Ibid.
$&
,c- the aggregate amount of cash flows that represent increases in operating capacity
separately from those cash flows that are required to maintain operating capacity8
and
,d- the amount of the cash flows arising from the operating, investing and financing
activities of each reportable segment ,see Ind "S $=3 "perating Segments).
/$ The separate disclosure of cash flows that represent increases in operating capacity and
cash flows that are required to maintain operating capacity is useful in enabling the user
to determine whether the entity is investing adequately in the maintenance of its
operating capacity. "n entity that does not invest adequately in the maintenance of its
operating capacity may be prejudicing future profitability for the sake of current liquidity
and distributions to owners.
/2 The disclosure of segmental cash flows enables users to obtain a better understanding of
the relationship between the cash flows of the business as a whole and those of its
component parts and the availability and variability of segmental cash flows.
$+
A33endi= A
Illustrati1e E=am3les
Statement of cash flows for an entit> other than a financial
institution
This appendi% accompanies, but is not part o!, Ind "S *.
$. The e#amples show only current period amounts. .orresponding amounts for the
preceding period are required to be presented in accordance with Ind "S $ Presentation
o! #inancial Statements.
2. Information from the statement of profit and loss and balance sheet is provided to show
how the statements of cash flows under the direct method and indirect method have been
derived. @either the statement of profit and loss nor the balance sheet is presented in
conformity with the disclosure and presentation requirements of other Standards.
&. The following additional information is also relevant for the preparation of the statements
of cash flows7
all of the shares of a subsidiary were acquired for /6=. The fair values of assets
acquired and liabilities assumed were as follows7
Inventories $==
"ccounts receivable $==
.ash +=
Aroperty, plant and equipment 9/=
Trade payables $==
Bong*term debt 2==
2/= was raised from the issue of share capital and a further $/= was raised from
long*term borrowings and $== was raised from short*term borrowing.
interest e#pense was +==, of which $1= was paid during the period. "lso, $==
relating to interest e#pense of the prior period was paid during the period.
dividends paid were $,2==.
$/
the liability for ta# at the beginning and end of the period was $,=== and +==
respectively. ?uring the period, a further 2== ta# was provided for. <ithholding
ta# on dividends received amounted to $==.
during the period, the group acquired property, plant and equipment with an
aggregate cost of $,2/= of which 6== was acquired by means of finance leases.
.ash payments of &/= were made to purchase property, plant and equipment.
plant with original cost of 3= and accumulated depreciation of 9= was sold for 2=.
accounts receivable as at the end of 2=C2 include $== of interest receivable.
Consolidated statement of 3rofit and loss for the 3eriod ended 6296
,a-
Sales &=,9/=
.ost of sales ,29,===-
Dross profit +,9/=
?epreciation ,+/=-
"dministrative and selling e#penses ,6$=-
Interest e#pense ,+==-
Investment income /==
2oreign e#change loss ,+=-
Arofit before ta#ation &,&/=
Ta#es on income ,&==-
Arofit &,=/=
,a- The entity did not recognise any components of other comprehensive income in the period ended 2=C2
Consolidated ?alance sheet as at end of 6296
6296 629"
Assets
.ash and cash equivalents 2&= $9=
"ccounts receivable $,6== $,2==
Inventory $,=== $,6/=
Aortfolio investments 2,/== 2,/==
Aroperty, plant and equipment at cost &,1&= $,6$=
"ccumulated depreciation ,$,+/=- ,$,=9=-
$9
Aroperty, plant and equipment net 2,23= 3/=
Total assets 1,6$= 9,99=
'ia?ilities
Trade payables 2/= $,36=
Interest payable 2&= $==
Income ta#es payable +== $,===
Bong*term debt 22== $,=+=
Short*term borrowing $== E
Total liabilities &,$3= +,=&=
ShareholdersF e0uit>
Share capital $,/== $,2/=
!etained earnings &,2&= $,&3=
Total shareholders( equity +,1&= 2,9&=
Total liabilities and shareholders( equity 1,6$= 9,99=
-irect method statement of cash flows (3aragra3h "5(a))
6296
Cash flows from o3erating acti1ities
.ash receipts from customers &=,$/=
.ash paid to suppliers and employees ,21,9==-
.ash generated from operations 2,//=
Income ta#es paid ,6==-
+et cash !rom operating activities $,9/=
Cash flows from in1esting acti1ities
"cquisition of subsidiary C, net of cash acquired ,@ote "- ,//=-
Aurchase of property, plant and equipment ,@ote 4- ,&/=-
Aroceeds from sale of equipment 2=
$1
Interest received 2==
?ividends received 2==
+et cash used in investing activities ,+3=-
Cash flows from financing acti1ities
Aroceeds from issue of share capital 2/=
Aroceeds from long*term borrowings $/=
Aroceeds from short term borrowings $==
Aayment of finance lease liabilities ,6=-
Interest paid ,21=-
?ividends paid ,$,2==-
+et cash used in !inancing activities ,$,=9=-

%et increase in cash and cash e0ui1alents $$=
Cash and cash e0ui1alents at ?eginning of 3eriod (%ote C) $2=
Cash and cash e0ui1alents at end of 3eriod (%ote C) 2&=
Indirect method statement of cash flows (3aragra3h "5(?))
6296
Cash flows from o3erating acti1ities
Arofit before ta#ation &,&/=
"djustments for7
?epreciation +/=
2oreign e#change loss +=
Investment income ,/==-
Interest e#pense +==
$3
&,1+=
Increase in trade and other receivables ,/==-
?ecrease in inventories $,=/=
?ecrease in trade payables ,$,1+=-
.ash generated from operations 2,//=
Income ta#es paid ,6==-
+et cash !rom operating activities $,9/=
Cash flows from in1esting acti1ities
"cquisition of subsidiary C net of cash acquired ,@ote "- ,//=-
Aurchase of property, plant and equipment ,@ote 4- ,&/=-
Aroceeds from sale of equipment 2=
Interest received 2==
?ividends received 2==
+et cash used in investing activities ,+3=-
Cash flows from financing acti1ities
Aroceeds from issue of share capital 2/=
Aroceeds from long*term borrowings $/=
Aroceeds from short*term borrowings $==
Aayment of finance lease liabilities ,6=-
Interest paid ,21=-
?ividends paid

,$,2==-
+et cash used in !inancing activities ,$,=9=-
%et increase in cash and cash e0ui1alents $$=
Cash and cash e0ui1alents at ?eginning of 3eriod (%ote
C) $2=
Cash and cash e0ui1alents at end of 3eriod (%ote C) 2&=
$6
%otes to the statement of cash flows (direct method and indirect method)
AA O?taining control of su?sidiar>
?uring the period the Droup obtained control of subsidiary C. The fair values of assets acquired
and liabilities assumed were as follows7
.ash +=
Inventories $==
"ccounts receivable $==
Aroperty, plant and equipment 9/=
Trade payables ,$==-
Bong*term debt ,2==-
Total purchase price paid in cash /6=
Bess7 .ash of subsidiary C acquired ,+=-
.ash paid to obtain control net of cash acquired //=
BA !ro3ert>: 3lant and e0ui3ment
?uring the period, the Droup acquired property, plant and equipment with an aggregate cost of
$,2/= of which 6== was acquired by means of finance leases. .ash payments of &/= were made
to purchase property, plant and equipment.
CA Cash and cash e0ui1alents
.ash and cash equivalents consist of cash on hand and balances with banks, and investments in
money market instruments. .ash and cash equivalents included in the statement of cash flows
comprise the following amounts in the balance sheet7
6296 629"
.ash on hand and balances with banks += 2/
Short*term investments $6= $&/
.ash and cash equivalents as previously reported 2&= $9=
)ffect of e#change rate changes F ,+=-
2=
.ash and cash equivalents as restated 2&= $2=
.ash and cash equivalents at the end of the period include deposits with banks of $== held by a
subsidiary which are not freely remissible to the holding company because of currency e#change
restrictions.
The Droup has undrawn borrowing facilities of 2,=== of which 1== may be used only for future
e#pansion.
-A Segment information
Segment
"
Segment
4
Total
.ash flows from7
:perating activities $,16= ,$+=- $,9/=
Investing activities ,9+=- $9= ,+3=-
2inancing activities ,3+=- ,22=- ,$,=9=-
&$= ,2==- $$=
Alternati1e 3resentation (indirect method)
"s an alternative, in an indirect method statement of cash flows, operating profit before working
capital changes is sometimes presented as follows7
!evenues e#cluding investment income &=,9/=
:perating e#pense e#cluding depreciation ,29,6$=-
:perating profit before working capital changes &,1+=
2$
A33endi= B
Illustrati1e E=am3les
Statement of cash flows for a financial institution
This appendi% accompanies, but is not part o! Ind "S 1.
$. The e#ample shows only current period amounts. .omparative amounts for the preceding
period are required to be presented in accordance with Ind "S $ Presentation o!
#inancial Statements.
2. The e#ample is presented using the direct method.
6296
Cash flows from o3erating acti1ities
Interest and commission receipts 23,++1
Interest payments ,2&,+9&
-
!ecoveries on loans previously written off 2&1
.ash payments to employees and suppliers ,661-
+,22+
(Increase) decrease in operating assets,
Short*term funds ,9/=-
?eposits held for regulatory or monetary control purposes 2&+
2unds advanced to customers ,233-
@et increase in credit card receivables ,&9=-
:ther short*term negotiable securities ,$2=-
Increase (decrease) in operating liabilities,
?eposits from customers 9==
@egotiable certificates of deposit ,2==-
@et cash from operating activities before income ta# &,++=
Income ta#es paid ,$==-
22
+et cash !rom operating activities &,&+=
Cash flows from in1esting acti1ities
?isposal of subsidiary G /=
?ividends received 2==
Interest received &==
Aroceeds from sales of non*dealing securities $,2==
Aurchase of non*dealing securities ,9==-
Aurchase of property, plant and equipment ,/==-
+et cash !rom investing activities 9/=
Cash flows from financing acti1ities
Issue of loan capital $,===
Issue of preference shares by subsidiary undertaking 3==
!epayment of long*term borrowings ,2==-
@et decrease in other borrowings ,$,===-
?ividends paid ,+==-
+et cash !rom !inancing activities 2==
)ffects of e#change rate changes on cash and cash equivalents 9==
%et increase in cash and cash e0ui1alents +,16=
Cash and cash e0ui1alents at ?eginning of 3eriod +,=/=
Cash and cash e0ui1alents at end of 3eriod
3,3+
=
2&
A33endi= "
+ote, This Appendi% is not a part o! the Indian Accounting Standard. The purpose o! this
Appendi% is only to bring out the di!!erences, i! any, between Indian Accounting Standard (Ind
AS) * and the corresponding International Accounting Standard (IAS) *, Statement o! ash
#lows.
Com3arison with IAS 7: Statement of Cash Flows
Ind "S 1 differs from International "ccounting Standard ,I"S- 1, Statement o! ash #lows, in
the following major respects7
$. In case of other than financial entities, I"S 1 gives an option to classify the interest paid
and interest and dividends received as item of operating cash flows. Ind "S 1 does not provide
such an option and requires these item to be classified as item of financing activity and investing
activity, respectively ,refer to the paragraph &&-.
2. I"S 1 gives an option to classify the dividend paid as an item of operating activity.
0owever, Ind "S 1 requires it to be classified as a part of financing activity only.
&. ?ifferent terminology is used in this standard, e.g., the term Gbalance sheet( is used instead of
HStatement of financial position( and HStatement of profit and loss( is used instead of HStatement
of comprehensive income(.
+. Aaragraph 2 of I"S 1 which states that I"S 1 supersedes the earlier version I"S 1 is deleted
in Ind "S 1 as this is not relevant in Ind "S 1. 0owever, paragraph number 2 is retained in Ind
"S 1 to maintain consistency with paragraph numbers of I"S 1.
/. The following paragraph numbers appear as H?eleted Hin I"S 1. In order to maintain
consistency with paragraph numbers of I"S 1, the paragraph numbers are retained in Ind "S 17
,i- paragraph 26
,ii- paragraph &=
2+