The chief executive of Constitutional Referendum Ultimatum (CRU) Limited, a manufacturing company has received the following draft annual financial statements for the current year and is unable to determine from a reading of the statements of financial position and accompanying income statement the reasons for the changes in cash during the year. He asks you for assistance and presents the following balance sheets of the CRU Ltd.

	March 31 2019	March 31 2020	Increase (Decrease)
	Ksh’000’	Ksh’000’	Ksh’000’
Assets
Land	75,000	70,000	(5,000)
Buildings	280,000	405,000	125,000
Machinery	100,000	165,000	65,000
Tools	35,000	20,000	(15,000)
Trade Investments	7,500	9,000	1,500
Goodwill	100,000	Nil	(100,000)
Inventories	109,000	105,000	(4,000)
Accounts receivable	44,850	87,750	42,900
Bills receivable	13,500	10,500	(3,000)
Unexpired insurance	1,950	1650	(300)
Cash on hand	4,500	1,000	(3,500)
	771,300	874,900	103,600
Equity and Liabilities
Share capital	200,000	350,000	150,000
Accumulated profit	391,900	268,550	(123,350)
Debentures	50,000	75,000	25,000
Accounts payable	26,000	29,000	3,000
Bank overdraft		4,000	4,000
Bills payable	5,000	4,500	(500)
Short term loan	3,400	750	(2,650)
Tax payable	1,500	2,500	1000
Interest payable	3,000	5,000	2,000
Accumulated depreciation	90,500	135,600	45,100
	771,300	874,900	103,600

Additional information:

(i)        There were no purchases or sales of tools during the year.

(ii)       The accounts receivable balances are net of an allowance for uncollectible debts of Ksh.1,150,000 and Ksh. 2,250,000        as at 31^st March 2019 and 31^st March 2020             respectively.

(iii)      An old piece of machinery that had cost Ksh.2, 250,000 on the date of acquisition was scrapped and written off the books of account. Accumulated depreciation on the machinery was Ksh.1, 650,000.

(iv)      CRU Limited issued shares during the year at a discount of 10%

(v)       The income statement for the current year ended 31^st March 2020 is as presented below:

Sh’000.

            Sales (net)                                                                                           625,000

           

            Operating charges:

            Materials and supplies                        125,000

            Direct labour                                       105,000

            Manufacturing overhead                       90,750

            Depreciation                                          61,750

            Selling expenses                                 122,500

            General expenses                                115,000

            Interest expenses                                     3,750

            Impairment of goodwill                      100,000

            Decrease in the value of land                5,000

            Loss on machinery                                    600

            Discount on issue of equity
shares                                                              15,000                                 (744,350)

            Net loss                                                                                            (119,350)

Required:

Prepare a statement of cash flows for CRU Limited for the year ended March 31 2020, in compliance with International Accounting Standard (IAS) number 7. Use the indirect method to determine the cash flows from operating activities.