cash flow

Financing activities -Receiving /Paying loans related with Financial structure of the enterprise.

It should be treated just like an investment made in subsidiaries or by subsidiaries and classified under investing/financing activities. You can see many like cash flow statements here:

https://www.google.co.in/?q=%22loan+to+subsidiaries%22+investing+activities

To me, classifying it under investing activities seems more appropriate because as per AS 3 para 15 point (e) is classifying advances and loans paid to third parties under investing activities. I can hardly differentiate between an advance paid to a third party and to a subsidiary. Both are done with a business intent.

@ shilpi. It doesn't seem to be appropriate to classify the same under financing activities because the composition of the capital or borrowings are unchanged.

What do you think?

I just checked Infosys Ltd Financial statements year ended 31.3.2016.They classified these items under Financing activities.

What is the logic in that?

By the definition of financing activities it doesn't seem to be appropriate isn't it?

Yes.It doesn't seem appropriate.

By the way ,i have sent this query to ICAI bos.Will comment here as soon as i get reply.