ias-cash flow statement

8/11/2019 IAS-Cash Flow Statement

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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'OS "2#"7O3erating acti1ities "$#",

In1esting acti1ities ".

Financing acti1ities "7

E!OTI%4 CAS& F'OS FO* O!EATI%4

ACTIITIES "5#62

E!OTI%4 CAS& F'OS FO* I%ESTI%4 A%-

FI%A%CI%4 ACTIITIES 6"

E!OTI%4 CAS& F'OS O% A %ET BASIS 66#6+

FOEI4% CE%C8 CAS& F'OS 6,#65

I%TEEST A%- -II-E%-S $"#$+

TA9ES O% I%CO*E $,#$.

I%EST*E%TS I% SBSI-IAIES: ASSOCIATES A%- JOI%T

E%TES $7#$5

C&A%4ES I% O%ES&I! I%TEESTS I% SBSI-IAIES

A%- OT&E BSI%ESSES $/#+6B

%O%;CAS& TA%SACTIO%S +$#++

CO*!O%E%TS OF CAS& A%- CAS& E 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


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Indian Accounting Standard (Ind AS) 7

Statement of Cash Flows

(This Indian Accounting Standard includes paragraphs set in bold type and plain type, whichhave 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 andcertainty of their generation.

The objective of this Standard is to require the provision of information about the historicalchanges 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 3resented

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(sactivities 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. Theyneed 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 financialstatements, 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

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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 andcompare 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 transactionsand events.

/ 0istorical cash flow information is often used as an indicator of the amount, timing andcertainty 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 s3ecified

ashcom3rises cash on hand and demand de3osits

ash equivalents are short;term: highl> li0uid in1estments that are readil>

con1erti?le to nown amounts of cash and which are su?@ect to an insignificant ris

of changes in 1alue

ash !lowsare inflows and outflows of cash and cash e0ui1alents

"perating activitiesare the 3rinci3al re1enue;3roducing acti1ities of the entit> and

other acti1ities that are not in1esting or financing acti1ities

Investing activitiesare the ac0uisition and dis3osal of long;term assets and other

in1estments not included in cash e0ui1alents

#inancing activitiesare acti1ities that result in changes in the siDe and com3osition of

the contri?uted e0uit> and ?orrowings of the entit>

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. or an investment to qualify as a cash equivalent itmust 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 ofacquisition. )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

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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 partof 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 acti1ities

$$ "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 financialposition 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. or e#ample,

when the instalment paid in respect of a fi#ed asset acquired on deferred payment basisincludes 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#tentto 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 otherinformation, 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 transactionsand 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

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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 thatis 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 $quipmentare 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 casethey are similar to inventory acquired specifically for resale. Therefore, cash flows

arising from the purchase and sale of dealing or trading securities are classified asoperating 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 importantbecause 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 investingactivities. )#amples of cash flows arising from investing activities are7

a- cash payments to acquire property, plant and equipment, intangibles and otherlong*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 otherlong*term assets8

c- cash payments to acquire equity or debt instruments of other entities and interestsin 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

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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, orthe payments are classified as financing activities8 and

h- cash receipts from futures contracts, forward contracts, option contracts and swapcontracts e#cept when the contracts are held for dealing or trading purposes, or

the receipts are classified as financing activities.


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$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 estimatingfuture 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 cashflows.

2= 'nder the indirect method, the net cash flow from operating activities is determined byadjusting 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 theindirect 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 cash3a>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 ?asis

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 ?asis

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(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> and

(?) cash recei3ts and 3a>ments for items in which the turno1er is 0uic: the

amounts are large: and the maturities are short

2& )#amples of cash receipts and payments referred to in paragraph 22a- 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 22b- 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 ofthree months or less.

6+ Cash flows arising from each of the following acti1ities of a financial institution ma>

?e re3orted on a net ?asis

(a) cash recei3ts and 3a>ments for the acce3tance and re3a>ment of de3osits

with a fi=ed maturit> date

(?) the 3lacement of de3osits with and withdrawal of de3osits from other

financial institutions and

(c) cash ad1ances and loans made to customers and the re3a>ment of those

ad1ances and loans

Foreign currenc> cash flows

6, Cash flows arising from transactions in a foreign currenc> shall ?e recorded in anentit>s 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 flow

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

flows

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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. or e#ample, a weighted averagee#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 thecash flows of a foreign subsidiary.

23 'nrealised gains and losses arising from changes in foreign currency e#change rates arenot 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 andfinancing 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> 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 acti1ities 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 in1estingacti1ities -i1idends 3aid should ?e classified as cash flows from financing acti1ities

&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 inaccordance 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 ofthese 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 andinterest 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 thatdividends paid should be classified as cash flows from financing activities because they

are cost of obtaining financial resources.

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Ta=es on income

$, Cash flows arising from ta=es on income shall ?e se3aratel> disclosed and shall ?eclassified as cash flows from o3erating acti1ities unless the> can ?e s3ecificall>

identified with financing and in1esting acti1ities

&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.


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(c) the amount of cash and cash e0ui1alents in the su?sidiaries or other

?usinesses o1er which control is o?tained or lost 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>

+$ 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 disclosureof 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 suchtransactions, 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 sameway 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 flows 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 acti1ities

++ >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

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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 shall3resent a reconciliation of the amounts in its statement of cash flows with the

e0ui1alent items re3orted in the ?alance sheet

+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 inaccordance 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"

+6 There are various circumstances in which cash and cash equivalent balances held by an

entity are not available for use by the group2. )#amples include cash and cash equivalentbalances held by a subsidiary that operates in a country where e#change controls or otherlegal 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 usingproportionate consolidation8

$The requirements shall be equally applicable to the entities in case of separate financial statements also.2 Ibid.

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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 userto 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.

$+


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A33endi= A

Illustrati1e E=am3les

Statement of cash flows for an entit> other than a financialinstitution

This appendi% accompanies, but is not part o!, Ind "S*.

$. The e#amples show only current period amounts. orresponding amounts for thepreceding 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 showhow 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 assetsacquired 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==.

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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.


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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= +,=&=

Shareholders 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


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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


Arofit before ta#ation &,&/=

"djustments for7

?epreciation +/=

oreign e#change loss +=

Investment income /==-

Interest e#pense +==

$3


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&,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/=


"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==


+et cash used in investing activities +3=-


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


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%otes to the statement of cash flows (direct method and indirect method)

A O?taining control of su?sidiar>

?uring the period the Droup obtained control of subsidiary C. The fair values of assets acquiredand 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 //=

B !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 madeto purchase property, plant and equipment.

C Cash and cash e0ui1alents

ash and cash equivalents consist of cash on hand and balances with banks, and investments inmoney 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=


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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 asubsidiary 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 futuree#pansion.

- Segment information

Segment

"

Segment

4

Total

ash flows from7

:perating activities $,16= $+=- $,9/=

Investing activities 9+=- $9= +3=-

inancing 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$


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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


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&+

unds 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


23/24

+et cash !rom operating activities &,&+=


?isposal of subsidiary G /=


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/=


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 3eriod3,3+

=

2&


24/24

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 (IndAS) * 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 providesuch 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 HStatementof 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 &=

ias-cash flow statement

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