Hero Honda Motors Limited is the leading motorcycle manufacturing company in India. Given hereunder is the following financial information provided by the company in its annual report 2001-02:
- Balance Sheet as at 31st March, 2002.
- Profit and loss account for the year ended 31st March, 2002.
- Schedule 2 on Reserves and Surplus.
- Schedule 4 on Fixed Assets—Abridged.
- Schedule 11 on Manufacturing and Other Expenses.
- Face value per share Rs. 2
Required
- Construct the cash flow statement of the company. Follow the following procedure:
- Analysis of balance sheet to determine cash inflow/outflow.
- Construction of basic CFS and classification of activities.
- Further analysis of inflows and outflows.
- Drafting of final CFS.
- Has the company been able to generate positive cash flows? How?
HERO HONDA MOTORS LIMITED
11) MANUFACTURING AND OTHER EXPENSES
Rupees in crores
|
|
Year ended 31st March, 2002 |
Year ended 31st March, 2001 |
|
MATERIAL CONSUMED |
|
|
|
Purchase of spares etc. for resale |
138.14 |
105.21 |
|
Consumption of raw materials and components |
3,127.81 |
2,380.89 |
|
Less: Sale of components to ancillaries on cost to cost basis |
166.31 |
192.68 |
|
|
2,961.50 |
2,188.21 |
|
Less: Cash discount |
0.58 |
1.21 |
|
|
2,960.92 |
2,187.00 |
|
Add: Opening stock |
|
|
|
Motorcycles |
23.25 |
6.81 |
|
Spare parts |
13.22 |
14.61 |
|
Work-in-progress |
12.47 |
9.35 |
|
|
48.94 |
30.77 |
|
Less: Closing stock |
|
|
|
Motorcycles |
15.49 |
23.25 |
|
Spare parts |
18.53 |
13.22 |
|
Work-in-progress |
9.11 |
12.47 |
|
|
43.13 |
48.94 |
|
Net consumption |
3,104.87 |
2,274.04 |
|
Less: Scrap sales |
6.44 |
6.29 |
|
|
3,098.43 |
2,267.75 |
|
OTHER EXPENSES |
|
|
|
Payments to and provisions for employees: |
|
|
|
Salaries, wages, bonus, gratuity and |
|
|
|
Leave encashment benefit (refer Note 6) |
152.47 |
104.45 |
|
Contribution to provident and other funds |
6.96 |
6.40 |
|
Staff welfare expenses |
9.51 |
7.11 |
|
Expenses for manufacturing, administration and selling |
|
|
|
Stores and tools consumed |
32.08 |
52.18 |
|
Power and fuel |
25.61 |
23.40 |
|
Rent |
2.22 |
2.18 |
|
Repair and maintenance: |
|
|
|
Plant and machinery |
14.92 |
11.45 |
|
Buildings |
2.54 |
2.19 |
|
Others |
0.25 |
0.66 |
|
Insurance |
6.32 |
5.81 |
|
Rates and taxes |
5.39 |
5.98 |
|
Packaging, forwarding, freight, etc. |
85.39 |
58.10 |
|
Royalty |
51.61 |
24.74 |
|
Advertisement and publicity |
90.16 |
61.12 |
|
Commission |
3.57 |
3.05 |
|
Donations |
7.78 |
2.40 |
|
Lease rent on plant and machinery |
31.41 |
32.57 |
|
Other expenses |
156.86 |
70.64 |
|
Loss on fixed assets sold/discarded |
1.27 |
0.21 |
|
|
3,784.75 |
2,742.39 |