CASH FLOW STATEMENT OF ASHOK LEYLAND

PARTICULARS 2010

Profit before Tax 6045.06
ADJUSTMENTS FOR:
Depreciation 1505.74
Other Amortizations 164.76
Unrealized foreign exchange gains / losses (65.30)
Interest expense 196.46
Interest income (160.94)
Income from Investments (98.85)
Provision for diminution in value of Investments / Advances (168.13)
(Profit)/Loss on disposal of Fixed Assets / Long Term
Investments (323.15)
Transfer from General Reserve - Employee benefits (781.54)
Profit on sale of undertaking 0.00
OPERATING PROFIT BEFORE WORKING CAPITAL
CHANGES
6314.11
ADJUSTMENTS FOR CHANGES IN:
Inventories (1677.60)
Debtors (1005.76)
Advances (1047.41)
Current Liabilities and Provisions 4102.54
CASH GENERATED FROM OPERATIONS 6685.88
Income Tax (Paid) / Refund (1356.00)
NET CASH FLOW FROM OPERATING ACTIVITIES
BEFORE EXTRAORDINARY ITEM

5329.88
Payments under Voluntary Retirement Scheme (330.37)
NET CASH FLOW FROM OPERATING ACTIVITIES
AFTER EXTRAORDINARY ITEM (A)

4999.51

CASH FLOWS FROM INVESTING ACTIVITIES
Payments for assets acquisition (6812.87)
Proceeds on sale of Fixed Assets 108.49
Proceeds on sale of undertaking 0.00
Purchase of Long Term Investments (50.64)
Sale/Redemption of Long Term Investments 557.64
Income from Investments - Interest 44.78
- Dividend 129.39
Changes in Advances (1473.70)
NET CASH FLOW FROM INVESTING ACTIVITIES (B) (7496.91)

CASH FLOWS FROM FINANCING ACTIVITIES
Long term Borrowings - Raised 2162.35
- Repaid (829.95)
Changes in Short term borrowings 0.00
Debenture issue and Loan raising expenses paid (2.47)
Premium paid on Prepayment of Loan 0.00
Interest paid - net (167.02)
Dividend Paid and tax thereon (1792.34)
Interim dividend and tax thereon (2264.32)
NET CASH FLOW FROM FINANCING ACTIVITIES (C) (2893.75)

NET CASH INFLOW / (OUTFLOW) (A+B+C) (5391.15)
OPENING CASH AND CASH EQUIVALENTS (D) 8503.22
CLOSING CASH AND CASH EQUIVALENTS (E) 3112.07
NET INCREASE IN CASH AND CASH EQUIVALENTS (E-D) (5391.15)
Interpretation:

Operating activities:

The Ashok Leyland Ltds net cash flow from operations of 4999.51 (Rs in Millions) is less than
the sum of accrual based profit & depreciation that equals Rs. 5918.60, showing that the profit
has not been fully realized in cash. From the cash flow statements, the main positive item is the
depreciation charge of Rs. 1505.74 Thus the companys earning cannot be said to be of high
quality. Increase in Inventories was Rs. 1677.60 and increase in debtors is Rs. 1005.76 resulted
in strain on the cash generated from generation.

Investing Activities:

Form the Investing Activities section; Ashok Leyland Ltd has payments for assets acquisition of
Rs. 1824.56. The expenditure financed partly by:
a) Realizing Rs. 48.56 from the Sales of Plant.
b) Realizing Rs. 61.56 from the Sale Of Investments, Net OF Purchase.
c) Interest Revenue Rs. 42.70. This has left a gap of Rs. 1554.47 to be financed from
other sources.

Financing Activities:

It is seen from the Financing Activities section that the Ashok Leyland Ltd raised long-term
borrowing Rs. 6812.87& repaid long term borrowing Rs. 829.95. In effect, the net realization
from long-term sources was Rs. 507. Further, the company paid dividend Rs. 1792.34and interest
of Rs. 167.02 has been left, with net cash of Rs. 2893.75 from financing activities.

Net Cash Flow:

It is clear that the expansion in the plant & machinery during the period was major drain on cash.
The net cash out flow from investing activities of Rs. 5391.15 was met from three sources:
I. Cash Flow from Operations, Rs. 4999.51
II. Proceeds from Issuance of Share Capital, Rs. 7496.91 (after repaying loans &
disturbing interest and dividend).
III. Withdrawal from Cash Balance, Rs. 5391.15
That is Cash in Flow, which is good sign for company.

PARTICULARS 2009

Profit before Tax 4523.00
ADJUSTMENTS FOR:
Depreciation 1260.06
Other Amortizations 132.84
Unrealized foreign exchange gains / losses 102.05
Interest expense 288.33
Interest income (193.87)
Income from Investments (87.47)
Provision for diminution in value of Investments /Advances 0.00
(Profit)/Loss on disposal of Fixed Assets / Long Term Investments (66.61)
Transfer from General Reserve - Employee benefits 0.00
Profit on sale of undertaking (301.66)
OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 5656.67
ADJUSTMENTS FOR CHANGES IN:
Inventories (3477.99)
Debtors (179.55)
Advances 314.73
Current Liabilities and Provisions 2051.52
CASH GENERATED FROM OPERATIONS 4365.38
Income Tax (Paid) / Refund (1135.68)
NET CASH FLOW FROM OPERATING ACTIVITIES BEFORE
EXTRAORDINARY ITEM

3229.70
Payments under Voluntary Retirement Scheme (9.53)
NET CASH FLOW FROM OPERATING ACTIVITIES AFTER
EXTRAORDINARY ITEM (A)

3220.17

CASH FLOWS FROM INVESTING ACTIVITIES
Payments for assets acquisition (2646.86)
Proceeds on sale of Fixed Assets 54.34
Proceeds on sale of undertaking 620.00
Purchase of Long Term Investments (138.66)
Sale/Redemption of Long Term Investments 479.68
Income from Investments - Interest 48.95
- Dividend 56.93
Changes in Advances 189.77
NET CASH FLOW FROM INVESTING ACTIVITIES (B) (1335.85)

CASH FLOWS FROM FINANCING ACTIVITIES
Long term Borrowings - Raised 186.69
- Repaid (1162.88)
Changes in Short term borrowings (76.79)
Debenture issue and Loan raising expenses paid 0.00
Premium paid on Prepayment of Loan 0.00
Interest paid - net (166.96)
Dividend Paid and tax thereon (1356.10)
Interim dividend and tax thereon 0.00
NET CASH FLOW FROM FINANCING ACTIVITIES (C) (2576.04)
NET CASH INFLOW / (OUTFLOW) (A+B+C) (691.72)
OPENING CASH AND CASH EQUIVALENTS (D) 9194.94
CLOSING CASH AND CASH EQUIVALENTS (E) 8503.22
NET INCREASE IN CASH AND CASH EQUIVALENTS (E-D) (691.72)


Interpretation:

Operating activities:

The Ashok Leyland Ltds net cash flow from operations of 3220.17 (Rs in Millions) is less than
the sum of accrual based profit & depreciation that equals Rs. 4533.26, showing that the profit
has not been fully realized in cash. From the cash flow statements, the main positive item is the
depreciation charge of Rs. 1260.06. Thus the companys earning cannot be said to be of high
quality. Increase in Inventories was Rs. 3477.99 and increase in debtors is Rs.179.55 resulted in
strain on the cash generated from generation.

Investing Activities:

Form the Investing Activities section; Ashok Leyland Ltd has payments for assets acquisition of
Rs. 2646.86. The expenditure financed partly by:
a) Realizing Rs. 54.34 from the Sales of Plant.
b) Realizing Rs. [479.68 + (138.66)] 341.02 from the Sale Of Investments, Net OF
Purchase.
c) Interest Revenue Rs. 48.95 & dividend 56.93. This has left a gap of Rs. 1335.85
to be financed from other sources.

Financing Activities:

It is seen from the Financing Activities section that the Ashok Leyland Ltd raised long-term
borrowing Rs. 186.69 & repaid long term borrowing Rs. 1162.88. Interest paid and dividend paid
166.96 & 1356.10 that carried out finance activities Rs. 2576.04.

Net Cash Flow:

It is clear that the expansion in the plant & machinery during the period was major drain on cash.
The net cash out flow from investing activities of Rs. 691.72 was met from three sources:
1. Cash Flow from Operations, Rs. 3220.17
2. Proceeds from Issuance of Share Capital, Rs. 1335.85 (after repaying loans &
disturbing interest and dividend).
3. Withdrawal from Cash Balance, Rs. 691.72.
That is Cash in Flow, which is good sign for company.