CASH FLOW STATEMENT OF S.L.FLOWCONTROLS PVT LTD.

, Step Change in Cash: Dec 31, 2011 Balance minus Dec 31,2010 balance ($54,000-$37,000)=$17,000 1: Step 2: Net Cash flow from Operating Activities Direct Method: Cash collected from Revenues Cash payments for Expenses Interest Expense Income before Income Taxes Income Taxes Net cash flow from Operating Activities Comments: The $848,000 was derived by subtracting the change in Accts Receivable from Revenues for the period. The cash payments for expenses was derived by adding the actual cash expended on inventory ($465,000 + 54,000) plus operating expenses adjusted for the change in accounts payable (+7,000), prepaid expenses (-2,000), and reduced by the included depreciation expense ($33,000). Indirect Method: Net Income Adjustments to reconcile net income to net cash Accts Receivable decrease ($42,000) Prepaid Expense decrease $2,000 Inventory increase ($54,000) Accts Payable decrease ($7,000) Loss on Equipment Sale $2,000 Depreciation $33,000 Net cash flow from Operating Activities

$848,000 $712,000 $12,000 $136,000 $65,000 $59,000

$125,000

($66,000) $59,000

Step 3: Investing Activities Land Sale Equipment Sale Equipment Purchase Financing Activities Issuance of Common Stock Redemption of Bonds Payable Dividend payment to shareholders

$25,000 $34,000 ($166,000) $160,000 ($40,000) ($55,000)

Statement of Cash Flows Cash Flow from Operating Activities Net Income Adjustments to reconcile net income to net cash Accts Receivable decrease ($42,000) Prepaid Expense decrease $2,000 Inventory increase ($54,000) Accts Payable decrease ($7,000) Loss on Equipment Sale $2,000 Depreciation $33,000 Net cash provided from Operating Activities Investing Activities Land Sale Equipment Sale Equipment Purchase Financing Activities Issuance of Common Stock Redemption of Bonds Payable Dividend payment to shareholders Net Decrease in Cash Cash Jan 1, 2011 Cash Dec 31, 2011

$125,000

($66,000) $59,000 $25,000 $34,000 ($166,000) ($107,000) $160,000 ($40,000) ($55,000)

$65,000 $17,000 $37,000 $54,000