CASH FLOW : QUESTION 1

The following are consolidated financial statements of Grande group.

Consolidated statements of financial position as at 31 December

	2020 (RM000)	2021 (RM000)
Goodwill	3,830	3,460
Investment in associate	460	600
Property, plant and equipment	19,910	24,540
Current assets: Inventory Trade receivables Bank	1,460 1,420 2,300	1,900 1,860 500
Total	29,380	32,860
Ordinary share capital	15,500	18,900
Group retained profits	6,540	7,800
Non-controlling interest	3,400	3,660
Trade payables	3,320	1,700
Tax payables	620	800
Total	29,380	32,860

Consolidated statement of profit and loss for the year ended 31 December 2021

	RM000
Revenue	12,000
-) Cost of sales	(8,060)
Gross profit	3,940
-) Operating expenses	(2,110)
+) Share of profits in associate	80
+) Gain from disposal of subsidiary	670
Profit before tax	2,580
Tax group	(600)
Profit after tax	1,980
Profit after tax attributable to : Shareholders of parent Non-controlling interest	1,480 500

Additional information:

1. Dividends have been paid.

2. Group depreciation on plant, property and equipment was RM1,010,000. Depreciation and goodwill impairment charge are included as part of operating expenses.

3. On 3^rd April 2021, Grande disposed of a wholly owned subsidiary, which has a fully impaired goodwill. Grande received a cash payment of RM8 million from the disposal. An extract of the statement of financial position is as follows:

	(RM000)
Non-current assets	5,700
Inventory	950
Trade receivables	980
Bank	800
Trade payables	(1,100)

4. On 30 November 2021, Grande acquired 25% ordinary shares of a new associate, Macchiato Sdn Bhd with consideration transferred of cash payment of RM300,000. This newly acquired associate has a bank balance of RM80,000 on the date of acquisition.

Required:

a) Prepare the consolidated statement of cash flows for Grande group for year ended 31 December 2021 using the indirect method. Note: Show ALL relevant workings. (15 marks)

b) Provide your opinion on the cash flow situation of the group of companies above. (4 marks)