what to do when securities premium reserve (a) increases (b) decreases while calculating cash flows?

(a) When Securities Premium Reserve increases it should be added to Proceeds from Issue of Shares (under Cash Flow from Financing Activities) in Cash Flow Statement because it is a cash inflow (of Financing nature) for the company.

(b) Decline in the balance of Securities Premium Reserve may be due to any of the five reasons as given in Section-77(a) like writing of preliminary expenses, buy back of own shares etc. Such decline is not shown in Cash Flow Statement as the cash position of the company remains intact (unaffected) because writing off, of  these expenses against Securities Premium Reserve involves no cash outflow.