Cash Flow

CONSOLIDATED STATEMENTS OF CASH FLOWS (All amounts in Rupees Million, unless otherwise stated)     Year ended December 31,     2006 2005   Cash flows from operating activities   Net income 4,060.59 779.03   Adjustments to reconcile net income to net cash and cash   equivalents provided by operating activities       Depreciation and amortization 2,894.31 1,718.00   Deferred income tax expense / (benefit) 764.42 (1,288.12)   Allowance for doubtful assets 192.07 153.35   (Gain)/loss on disposal of property, plant and equipment (100.53) 30.06   Loss on disposal of investments 5.57 –   Income from discontinued operations – (546.60)   Equity in gain of affiliate (50.30) (4.71)   Amortization of deferred stock based compensation 358.68 32.68   Minority interest 57.31 26.38   Unrealised (gain) / loss on forward foreign exchange contracts (1,092.42) 1,497.89   Reversal for diminution in value of investments – (11.07)   Changes in operating assets and liabilities       Accounts receivable (2,623.75) (616.84)   Inventories (1,750.46) 553.84   Other current assets (485.87) 3,144.46   Other non-current assets (376.93) (226.94)   Accounts payable 1,160.95 836.49   Accrued expenses and other current liabilities (702.06) (5,062.17)   Other non-current liabilities 989.14 344.67   Net cash provided by operating activities 3,300.72 1,360.40   Cash flows from investing activities       Purchase of property, plant and equipment (2,778.24) (7,858.25)   Cash paid for acquisition of minority interest in subsidiary (181.23) (99.90)   Acquisition of additional stake in equity affiliate – (673.92)   Proceeds from sale of property, plant and equipment 119.65 110.74   Acquisition of subsidiaries* (14,438.73) –   Purchase of intangible assets (690.76) (192.44)   Purchase of investment securities (202.00) –   Proceed from sale of investments 33.30 –   Proceed from sale of discontinued operations – 1,260.10   Amount invested in restricted cash balances (17.25) –   Maturity of restricted cash balances – 14.95   Net cash used in investing activities (18,155.26) (7,438.73)   Cash flows from financing activities   Proceeds from borrowings from banks and financial institutions, net 856.26 10,282.12   Proceeds from issue of foreign currency convertible bonds 19,553.60 –   Principal payments on long term debt (1,396.61) (1,471.09)   Principal payments on capital lease obligations (165.63) (0.60)   Proceeds from issuance of term loans – 1,782.95   Payment of dividend, including tax on dividend of Rs 444.14 million and Rs 447.55 million, respectively (3,611.40) (3,611.81)   Receipt from employees on exercise of stock options 63.31 135.54   Payment of dividend to minority stockholders in subsidiaries (7.62) (6.66)   Net cash provided by financing activities 15,291.91 7,110.46   Net increase in cash and cash equivalents during the year 437.37 1,032.14   Effect of exchange rate changes on cash and cash equivalents 39.11 8.15   Cash and cash equivalents at the beginning of the year 2,286.33 1,246.05   Cash and cash equivalents at the end of the year 2,762.81 2,286.33   Supplemental disclosures   Cash paid during the year for interest 1,008.91 578.43   Cash paid during the year for income taxes 845.82 841.09   Assets under capital leases capitalized during the year 86.26 654.27   *Acquisition of subsidiaries       Assets and liabilities of the subsidiaries upon acquisition       Working capital 893.09 –   Long-lived assets other than goodwill 7,893.97 –   Goodwill arising on acquisition 5,651.67 –   Cost of investment in shares 14,311.42 –   Direct cost 127.31 –   Cash paid 14,438.73 – The accompanying notes are an integral part of these consolidated financial statements.