How does the sale of current investments for cash at par result while preparing the cash flow statement?

No effect

There is no effect of this transaction because it is merely a conversion of cash equivalents into cash. According to AS-3, 'Cash' encompasses physical currency and funds held in demand accounts with banks. Meanwhile, 'Cash equivalents' refer to short-term, easily convertible investments that can be readily transformed into specific cash amounts, with an inconsequential likelihood of value fluctuations. Generally, an investment is deemed a cash equivalent when it possesses a brief maturity, typically within three months or less from its acquisition date. Notably, investments in stocks are typically not regarded as cash equivalents unless they hold considerable characteristics of liquidity akin to cash equivalents.