The following information relates to the draft financial statements of Kate. Summarised statements of financial position as at: 31 March 2020 Rs 31 March 2019 Rs RS Rs Assets Non-current assets Property, plant and equipment (note (0) 26,400 51,000 Current assets Inventory Trade receivables Bank Total assets 25,000 9,000 34,000 9,200 4,000 3,000 16,200 67,200 60,400 Equity and liabilities Equity Equity shares of Rs 1 each Share premium Retained earnings 20,000 16,000 6,400 9,000 8,000 12,600 15,400 35,400 20,600 36,600 Non-current liabilities 10% loan note (note (i)) 1,400 15,600 6,600 Current liabilities 10% loan note (note (i)) Tax Bank overdraft Trade payables Total equity and liabilities 10,000 1,400 2,800 9,400 23,600 60,400 8,400 15,000 67,200 Summarised income statements for the years ended: Revenue Cost of sales Gross profit Operating expenses Finance costs Profit (loss) before tax Income tax relief (expense) Profit (loss) for the year 31 March 2020 Rs 110,000 (87,600) 22.400 (24,000) (2000) (3,600) 1,400 (2,200) 31 March 2019 Rs 80,000 (50,000) 30,000 (12,000) (1,200) 16,800 (5,600) 11,200 The following additional information is available: (0) Property, plant and equipment is made up of 31 March 2020 Rs Leasehold property Owned plant 31 March 2019 Rs 17,600 33,400 51,000 26.400 26,400 During the year Kate sold its leasehold property for Rs 17,000 and entered into an arrangement to rent it back from the purchaser. There were no additions to or disposals of owned plant during the year. The depreciation charges (to cost of sales) for the year ended 31 March 2020 were: Leasehold property Owned plant Rs 400 7,000 7,400 The 10% loan note is due for repayment on 30 June 2020. Kate is in negotiations with the loan provider to refinance the same amount for another five years. REQUIRED (a) Prepare a statement of cash flows for Kate for the year ended 31 March 2020 in accordance with IAS 7 Statement of cash flows, using the indirect method. [24 Marks] (b) Explain three benefits of preparing a cash flow statement. [6 Marks)