Cash Inflows from Financing Activities does not include-

Dividends and interest received

The correct answer is option 3- Dividends and interest received.

Dividends and interest received are an investing activity.

• Dividend received is generally classified under Investing Activities because it represents cash inflows from investments (e.g., dividends received from investments in shares or securities). Even though dividends are part of a company's income, the receipt of dividends is tied to the company's investment activities, which is why it's categorized as an investing activity.

• Interest received is classified as a cash inflow from investing activities. Investing activities involve the acquisition and disposal of long-term assets, and interest received is considered a return on investments.

Financing activities relate to long-term funds or capital of an enterprise, e.g., cash proceeds from issue of equity shares, debentures, raising long-term bank loans, repayment of bank loan, etc. As per AS-3, financing activities are activities that result in changes in the size and composition of the owners’ capital (including preference share capital in case of a company) and borrowings of the enterprise. Separate disclosure of cash flows arising from financing activities is important because it is useful in predicting claims on future cash flows by providers of funds (both capital and borrowings) to the enterprise.