Jun 2015 Q1 Imoni royalties and parts cost

Dear Sir,

I am confused by the treatment of the parts cost and royalties.

1. Why is the whole sales cost subtracted from the cash flow in appendix 1 and then the contribution added back in appendix 2? Shouldn’t appendix 1 only include the parts cost without the contribution?

2. Why are the royalties included in both appendix 1 and 2? I understand it is an inflow and so it is in appendix 2 but why is it deducted from the cash flow and used in Yilandwe tax computation in appendix 2?