bopanna F S A_HUL

7/29/2019 bopanna F S A_HUL

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FINANCIAL STATEMENT ANALYSIS OF

Submitted by,

Bopanna.M.M

1220011

MBAA

Christ university


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COMPANY PROFILE:

HUL works to create a better future every day and helps people feel good, look good and

get more out of life with brands and services that are good for them and good for others.

With over 35 brands spanning 20 distinct categories such as soaps, detergents, shampoos, skincare, toothpastes, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water

purifiers, the Company is a part of the everyday life of millions of consumers across India. Itsportfolio includes leading household brands such as Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair

& Lovely, Ponds, Vaseline, Lakm, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe,

Brooke Bond, Bru, Knorr, Kissan, Kwality Walls and Pureit.

The Company has over 16,000 employees and has an annual turnover of around Rs. 21,736

crores (financial year 2011 - 2012). HUL is a subsidiary of Unilever, one of the worlds leadingsuppliers of fast moving consumer goods with strong local roots in more than 100 countries

across the globe with annual sales of about 46.5 billion in 2011. Unilever has about 52%

shareholding in HUL.

A clear direction

The four pillars of our vision set out the long term direction for the company where we want to

go and how we are going to get there:

We work to create a better future every day

We help people feel good, look good and get more out of life with brands and services that are

good for them and good for others.

We will inspire people to take small everyday actions that can add up to a big difference for the

world. We will develop new ways of doing business with the aim of doubling the size of our company

while reducing our environmental impact.

We've always believed in the power of our brands to improve the quality of peoples lives and in

doing the right thing. As our business grows, so do our responsibilities. We recognise that globalchallenges such as climate change concern us all. Considering the wider impact of our actions is

embedded in our values and is a fundamental part of who we are.


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PROFITABILITY RATIOS

Operating margin:

Operating Margin = Operating Income/Revenue

OPERATING

MARGINMar ' 07 Mar ' 09 Mar ' 10 Mar ' 11 Dec ' 12

operating profit 25,363.00 32,206.30 30,094.10 31,581.00 36,885.20

Revenue 143,418.40 208,290.50 180,411.00 202,152.20 225,135.50

operating margin 17.6846 15.4622 16.6809 15.6224 16.3836

Interpretation:Operating profit margin measures what proportion of a company's revenueis left over, after deducting direct costs and overhead and before taxes and other indirect costs

such as interest. A high or increasing operating margin is preferred because if the operatingmargin is increasing, the company is earning more per dollar of sales.

The operating margin Operating margin shows the profitability of sales resulting fromregular business. Operating income results from ordinary business operations and excludes other

revenue or losses. Here we can see that the operating margin of the company has been

fluctuations. It has started decreasing from 2007 from 17.6846 mill to 15.4622 mill in thefinancial year 2009 and it has been fluctuating around this place itself which means that thecompanys growth is stable but there are less growth opportunities if this continues.

NET PROFIT

MARGINMar ' 07 Mar ' 09 Mar ' 10 Mar ' 11 Dec ' 12

net profit 19,254.70 24,964.60 22,020.30 23,059.90 26,914.00

Revenue 143,418.40 208,290.50 180,411.00 202,152.20 225,135.50

Net Profit margin 13.43 11.99 12.21 11.41 11.95

Interpretation:Net profit margin measures how much of each dollar earned by the company is

translated into profits. A low profit margin indicates a low margin of safety: higher risk that a decline insales will erase profits and result in a net loss. Net profit margin is an indicator of how efficient a

company is and how well it controls its costs. The higher the margin is, the more effective the company is

in converting revenue into actual profit.

Apart from the operational expanses the companies expenses such as B depreciation, taxes paid to the

government have also been increasing according to the sales revenue. Therefore we see a net profit

margin which follows the footpath of the gross margin.


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Cash flow margin:Cash Flow Margin = Cash Flows from Operating Activities/Net Sales

CASH FLOW MARGIN Mar ' 07 Mar ' 09 Mar ' 10 Mar ' 11 Dec ' 12

Cash Flows from Operating

Activities14,840.70 19,806.30 33,977.20 16,562.00 26,242.40

Net Sales 143,418.40 208,290.50 180,411.00 202,152.20 225,135.50

Cash Flow Margin 10.35 9.51 18.83 8.19 11.66

Interpretation:Cash flow analysis uses ratios that focus on cash flow and how solvent,

liquid, and viable the company is. The company needs cash to pay dividends, suppliers, service

debt, and invest in new capital assets, so cash is just as important as profit to a business firm. The

Cash Flow Margin ratio measures the ability of a firm to translate sales into cash.

The companys ability to translate sales into cash is very low which is around 9-11% for

the last 5 years which means the company will soon face the problem of liquidity and its debt

will start increasing.

Return On Capital Employed:

Return on Capital Employed= (Adjusted net profits*/Capital employed) 100

RETURN ON CAPITAL

EMPLOYEDMar ' 07 Mar ' 09 Mar ' 10 Mar ' 11 Dec ' 12

Net Profit 19,254.70 24,964.60 22,020.30 23,059.90 26,914.00

Equity Share Capital 21,615.00 21,861.00 25,835.20 26,595.20 35,129.30

Total Debt 2,192.00

capital employed 21,615.00 21,861.00 25,835.20 28,787.20 35,129.30

Return on Capital Employed 89.08 114.2 85.23 80.1 76.61


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Interpretations:The return on capital employed (ROCE) ratio, expressed as a percentage,complements the return on equity (ROE) ratio by adding a company's debt liabilities, or fundeddebt, to equity to reflect a company's total "capital employed". This measure narrows the focus to

gain a better understanding of a company's ability to generate returns. From its available capital

base. By comparing net income to the sum of a company's debt and equity capital, investors can

get a clear picture of how the use of leverage impacts a company's profitability.

the companys return on capital employed ratio was doing good during 2007 where it was

89% but due to the companies incompetency and other reasons it has been decreasing andcurrently it has been standing at 78% which would make the stakeholders loose the reputation of

the companies.

Return on Assets:Return on Assets=net profit /total assets

RETURN ONASSETS

Mar ' 07 Mar ' 09 Mar ' 10 Mar ' 11 Dec ' 12

Net Profit 19,254.70 24,964.60 22,020.30 23,059.90 26,914.00

total asset 162,673.10 190,820.50 202,431.30 225,212.10 252,049.50

Return on Assets 11.84 13.08 10.88 10.24 10.68

Interpretation: Return on Assets shows how many dollars of earnings result from each dollar

of assets the company controls. Return on Assets ratio gives an idea of how efficient

management is at using its assets to generate profit.

The only common rule that the return on the assets of the company has to be good but in

this companies case the return when compared to its assets are very less. When and more over it

has decreasing. The company hasnt used its assets efficiently to the best.

Return on Long Term

Return on Long Term= net sales/long term funds

RETURN ON LONG

TERM FUNDS

Mar '07 Mar '09 Mar '10 Mar '11 Dec '12

Net Sales 143,418.40 208,290.50 180,411.00 202,152.20 225,135.50

long term funds 3,296.90 2,192.00

Return on Long Term

Funds43.5 95.02


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Interpretation:Return on long term shows how many dollars of earnings result from eachdollar of borrowings from the outside the company controls. Return on borrowings ratio gives an

idea of how efficient management is at using its loans to generate profit.The company has a long term loan before 2010 but now its long term debts are nil which

shows that the company is dependent of the internal funds and they are to free to make their own

decisions.

LIQUIDITY AND SOLVENCY RATIOS

Current Ratio:

Current Ratio=Current assets/current liabilities

CURRENT RATIO Mar ' 07 Mar ' 09 Mar ' 10 Mar ' 11 Dec ' 12

Current assets 40,666.10 44,947.50 47,603.60 54,178.10 50,609.30

Current liabilities 40,665.10 44,946.60 52,916.60 55,636.40 51,697.30

current ratio 1 1 0.9 1 1

Interpretation:The ratio is mainly used to give an idea of the company's ability to payback its short-term liabilities (debt and payables) with its short-term assets (cash, inventory,

receivables). The higher the current ratio, the more capable the company is of paying its

obligations. A ratio under 1 suggests that the company would be unable to pay off its obligationsif they came due at that point.

As the ideal ratio is 1 which is found in the company the company has an efficient

working capital management system. With this they will be able to meet their working capital

needs easily.

Quick Ratio:

Quick Ratio=Current assets-inventories/current liabilities

QUICK RATIO Mar ' 07 Mar ' 09 Mar ' 10 Mar ' 11 Dec ' 12

Current assets 67,127.15 79,356.34 47,603.60 54,178.10 50,609.30

Inventories 2,639.65 2,846.84 2,209.41 2,558.87 1,992.63

quick asset 21,965.90 23,822.40 31,562.90 28,891.40 42,682.50Current liabilities 40,665.10 44,946.60 52,916.60 55,636.40 51,697.30

quick ratio 0.24 0.2 0.17 0.17 0.16

Interpretation: The quick ratio is more conservative than the current ratio, a more well-

known liquidity measure, because it excludes inventory from current

assets. Inventory because some companies have difficulty turning their inventory into cash.


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As the ideal ratio of the company is .5 which in here is lesser than the ideal ratio. The

company should try to have a better current assets management system which is ideal for the

company for its long term existence.

Debt Equity Ratio:

Debt Equity Ratio=total debts/total equity

DEBT EQUITY RATIO Mar ' 07 Mar ' 09 Mar ' 10 Mar ' 11 Dec ' 12

total equity 15,075.00 21,367.90 25,835.20 26,595.20 35,129.30

total debt 0 0 0 2192 3,296.90

Debt Equity Ratio 0 0 0 0.08 0.09

Interpretation: A high debt/equity ratio generally means that a company has been aggressive

in financing its growth with debt. This can result in volatile earnings as a result of the additional

interest expense.

As the company had a low debt in the beginning of the time and then it was completely

eliminated to nil in the recent years the company has been playing it low when it comes to its

capital returns.

DEBT COVERAGE RATIOS

Interest Coverage ratio:

Interest Coverage ratio=EBIT/interest expenses

INTEREST

COVERAGE RATIOMar ' 07 Mar ' 09 Mar ' 10 Mar ' 11 Dec ' 12

PBDIT 25,363.00 32,206.30 30,094.10 31,581.00 36,885.20

Depreciation 1,383.60 1,953.00 1,840.30 2,208.30 2,182.50

PBIT 23,979.40 30,253.30 28,253.80 29,372.70 34,702.70

interest paid 255 253.2 69.8 2.4 12.4

Interest Coverage ratio 0.1 0.12 0.21 .3 .45

Interpretation: The lower the ratio, the more the company is burdened by debt expense.

When a company's interest coverage ratio is 1.5 or lower, its ability to meet interest expenses

may be questionable. An interest coverage ratio below 1 indicates the company is not generating

sufficient revenues to satisfy interest expenses.


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As the companies long-term borrowing has been the lowest in the past the part of profit

that is eaten by the interest has been the least. Which has supported the final profit of the

company at the best

Liability to equity ratio:

Liability to equity ratio=All liabilities/shareholders equity

DEBT EQUITY RATIO Mar ' 07 Mar ' 09 Mar ' 10 Mar ' 11 Dec ' 12

total equity 15,075.00 21,367.90 25,835.20 26,595.20 35,129.30

total debt 0 0 0 2192 3296.9

Debt Equity Ratio 0 0 0 0.08 0.09

Interpretation: A high debt/equity ratio generally means that a company has been aggressive

in financing its growth with debt. This can result in volatile earnings as a result of the additional

interest expense.

As the company had a low debt in the beginning of the time and then it was completely

eliminated to nil in the recent years the company has been playing it low when it comes to its

capital returns.

MANAGEMENT EFFICIENCY RATIOS

Inventory Turnover Ratio

Inventory Turnover Ratio = Net Sales / Inventory

INVENTORY

TURNOVER RATIOMar ' 07 Mar ' 09 Mar ' 10 Mar ' 11 Dec ' 12

Net Sales 143,418.40 208,290.50 180,411.00 202,152.20 225,135.50

Inventories 19,926.30 25,588.70 21,799.30 28,107.70 25,166.50

Inventory Turnover

Ratio7.2 8.14 8.28 7.19 8.95

Interpretation: A ratio showing how many times a company's inventory is sold and replaced

over a period. The days in the period can then be divided by the inventory turnover formula to

calculate the days it takes to sell the inventory on hand or "inventory turnover days." This ratioshould be compared against industry averages. A low turnover implies poor sales and, therefore,

excess inventory. A high ratio implies either strong sales or ineffective buying.

As seen the companys ability to convert its stock to sales is desirable when compared to

the industry average which is 5.0, and more over this has increasing from 7.2 in 2007 to currently

9 points which shows the efficiency of the company.


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Debtors Turnover Ratio:

Debtors Turnover Ratio=sales/debtors

DEBTORS TURNOVER

RATIOMar ' 07 Mar ' 09 Mar ' 10 Mar ' 11 Dec ' 12

Net Sales 21,615.00 21,861.00 25,835.20 26,595.20 35,129.30

Sundry Debtors 4619.6 5605.6 6716 9432.1 6789.9

Debtors Turnover Ratio 4.68 3.9 3.85 2.82 5.17

average collection period 78 94 95 129 71

Interpretation: By maintaining accounts receivable, firms are indirectly extending interest-

free loans to their clients. A high ratio implies either that a company operates on a cash basis or

that its extension of credit and collection of accounts receivable is efficient. A low ratio implies

the company should re-assess its credit policies in order to ensure the timely collection of

imparted credit that is not earning interest for the firm.

When compared to the competitors the collection period of the company is in very low.

Which could bring the entire profits of the company to bankruptcy so the company should take

preventive measures. Its collection period was as high as 129 days which means it could retain

back its returns only hardly 3 times a year.

Fixed Assets Turnover RatioFixed Assets Turnover Ratio = Cost of Sales / Net Fixed Assets

FIXED ASSETS


Net Sales 138,778.50 206,235.00 177,816.60 197,355.10 221,163.70

fixed assets 24,620.00 24,480.00 24,360.70 24,578.60 23,629.20

Fixed Assets Turnover

Ratio5.64 8.42 7.3 8.03 9.36

Interpretation: A financial ratio of net sales to fixed assets. The fixed-asset turnover ratio

measures a company's ability to generate net sales from fixed-asset investments - specifically

property, plant and equipment (PP&E) - net of depreciation. A higher fixed-asset turnover ratio

shows that the company has been more effective in using the investment in fixed assets to

generate revenues.

The ratio of fixed assets in the 9% of the total fixed assets shows that the company hasnt


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been utilizing its assets to the fullest. It has to make use of its full assets to make the best for the

profits.

Total Assets Turnover Ratio

Total Assets Turnover Ratio= Cost of Sales / Net total Assets

TOTAL ASSETS


Net Sales 138,778.50 206,235.00 177,816.60 197,355.10 221,163.70

Total Assets 81,892.20 91,535.90 90,679.10 99,530.00 107,440.30

Total Assets Turnover

Ratio1.69 2.25 1.96 1.98 2.06

Interpretation:Asset turnover measures a firm's efficiency at using its assets in generating

sales or revenue - the higher the number the better. It also indicates pricing strategy: companies

with low profit margins tend to have high asset turnover, while those with high profit marginshave low asset turnover.

The ratio of total assets in the 2% of the total assets shows that the company hasnt been

utilizing its assets to the fullest. It has to make use of its full assets to make the best for the

profits. Or else these assets in the company will be non-performing assets which could bring

additional cost for the company.

Asset Turnover Ratio

Assets Turnover Ratio= Cost of Sales / total Assets

ASSETS TURNOVER

RATIOMar ' 07 Mar ' 09 Mar ' 10 Mar ' 11 Dec ' 12

Net Sales 138,778.50 206,235.00 177,816.60 197,355.10 221,163.70

Total Assets 81,892.20 91,535.90 90,679.10 99,530.00 107,440.30

Fixed Assets Turnover

Ratio1.69 2.25 1.96 1.98 2.06

Interpretation: Asset turnover measures a firm's efficiency at using its assets in generating

sales or revenue - the higher the number the better. It also indicates pricing strategy: companies

with low profit margins tend to have high asset turnover, while those with high profit margins

have low asset turnover.

The ratio of total assets in the 2% of the total assets shows that the company hasnt been utilizing

its assets to the fullest. It has to make use of its full assets to make the best for the profits. Or else

these assets in the company will be non-performing assets which could bring additional cost for

the company.


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Dividend payout ratioDividend payout ratio (net profit) =dividend/net profit

dividend payout ratio (net profit) Mar ' 07 Mar ' 09 Mar ' 10 Mar ' 11 Dec

dividends paid 1976.12 1634.51 1417.94 1410.6 162

Net profit (PAT) 19,254.70 24,964.60 22,020.30 23,059.90 26,914

dividend payout ratio 10.2631 6.54731 6.43924 6.11711 6.02

Interpretation:The payout ratio provides an idea of how well earnings support the dividend

payments. More mature companies tend to have a higher payout ratio. In the U.K. there is a

similar ratio, which is known as dividend cover. It is calculated as earnings per share divided by

dividends per share.

The dividend payout ratio of the company has been reducing year by year. It would be

recommendable for the company to take up policies to pay more amounts of dividends by

earning profits or their reserves and surplus will be empty and they will have nothing to livewith.

Retention Ratio

Retention Ratio=net income-dividend/net income

Retention Ratio Mar ' 07 Mar ' 09 Mar ' 10 Mar ' 11 Dec ' 12

dividends paid 1976.12 1634.51 1417.94 1410.6 1620.94

Net profit (PAT)

19,254.7

0

24,964.6

0

22,020.3

0

23,059.9

0

26,914.0

0

Net profit (PAT) - dividends paid

17,278.5

8

23,330.0

9

20,602.3

6

21,649.3

0

25,293.0

6

Retention Ratio 89.7369 93.4527 93.5608 93.8829 93.9773

Interpretation:The percent of earnings credited to retained earnings. In other words, the

proportion of net income that is not paid out as dividends. The retention ratio is the opposite of

the dividend payout ratio. In fact, it can also be calculated as one minus the dividend payout

ratio.

The retention ratio which is over 90% is good news for the company which will show

high profits in the companys balance sheet but if this continues without paying the stakeholders

they will develop a high bad will among them.


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CASH FLOW STATEMENT ANALYSIS:

CASH FROM OPERATING ACTIVITIES:

- MAR 07 MAR 09 MAR10 MAR 11

Net cash flow from operating activities 14,840.70 19,806.30 33,977.20 16,562.00 26,242.

Net profit before tax & extra-ordinary income 21,463.30 30,251.20 27,070.70 27,302.00 33,501.

Add: Adjustments for non-cash and non-operating expenses 1,724.00 2,298.90 1,982.00 2,355.00 2,650.

Depreciation 1,383.60 1,953.00 1,840.30 2,208.30 2,182.

Amortisation and w offs 15

Unrealised foreign exchange loss

Provision for contingencies

Other provisions like RDD etc 181

Interest Paid 255 253.2 69.8 2.4 12

Loss on sale of investments

Loss on sale of assets 70.4 92.7 71.9 59.3 157

Other non-cash and non-operating expenses 85 117Less: Adjustments for non-cash and non-oper income 2,378.60 2,086.40 1,481.00 2,519.50 2,778.

Unrealised foreign exchange gain

Provision or liabilities written back 30.9

Interest income 642.3 809.4 939.1 1,156.80 1,177.

Dividend income 1,029.80 707.1 346.5 760.6 442

Profit on sale of investments 706.5 539 195.4 602.1 1,159.

Profit or loss on sale of assets

Other non-cash and non-operating income

Operating cash flow before working capital changes 20,808.70 30,463.70 27,571.70 27,137.50 33,373.

Add:Cash inflow due to 5,613.20 3,982.10 14,450.60 9,306.70 2,783.

Decrease in trade & other receivables 1,460.

Decrease in inventories 3,489.20 1,323.

Increase in trade & other payables 5,613.20 3,982.10 10,961.40 9,306.70

Increase in deposits

Decrease in advances

Increase in other current liabilities

Less: Cash outflow due to 4,391.00 7,271.30 64.7 10,914.10 747

Increase in trade & other receivables 398.4 1,518.80 64.7 4,600.80

Increase in inventories 3,992.60 5,752.50 6,313.30

Decrease in trade & other payables 747

Decrease in deposits (banks or fis)

Increase in advances (banks or fis)

Decrease in other current liabilitiesCash flow generated from operations 22,030.90 27,174.50 41,957.60 25,530.10 35,410.

Cash outflow due to direct taxes paid 4,926.00 6,336.50 6,617.40 6,524.10 6,567.

Cash inflow due to direct taxes refund

Cash outflow due to dividend tax paid 3,374.70 2,406.10 2,593.90 2,355.80 2,453.

Cash flow before extraordinary items 13,730.20 18,431.90 32,746.30 16,650.20 26,389.

Cash outflow due to extraordinary items 88.2 146

Cash inflow due to extraordinary items 1,110.50 1,374.40 1,230.90

Cash outflow due to misc expend


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INTERPRETATION:

The cash flow form the operating activity of the company has been increasing year by

year. The main reason for this is the cash inflow in the form of the net profit before tax and

extraordinary items. Which has increased from 21,463 from 2007 to 33,501mill. In a span of 5

years the company has managed to get cash inflow of around 12000 mill which is a high level ofefficiency we can find in the company.

The increase in the depreciation amount from 2007 of 1383 mill to 2182 mill tells us that

the company is expanding its operations which are evident by the increase of the buildings, plant

and machineries for its operations. This increase in the operation has led to the additional cash

flows for the company.

As the companies long term borrowing has been almost nil for the past few years we can

find that the companys interest expenses have been reduced drastically. Which has led to the

company is able to retain much of its profits proportion in itself and lending the most of its highprofits to its owners (equity holders) whose holdings are being increased.

The debtors of the company have been increasing as the sales have increasing. It has been

increasing in the same proportion to that of sales. The operating expenses of the company have

been increasing year by year from 125607 to 186000 as of 2012. With the increasing in the cash

expenses and the increase in the cash inflow it is evident that the company is able to optimize its

operations and are easily able to convert the cash out flow into inflow.

Along with the normal operations of the company the cash flow from working capital has

also being increased from 20,808 to 33,800 as of 2012. This says that the company is able

convert its debtors to cash more efficiently. Moreover the debtors have been decreased by 1400

million between 2011 and 2012. With the decrease in the debtors and the increase in the creditors

will let the company to have more cash in itself for the long term.


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CASH FROM INVESTING ACTIVITIES:

Net cash inflow from investing activities 8,837.20 6,856.10 -13,622.00 -2,940.20 -4,524

Less: Cash outflow due to investing activities 144,798.50 131,190.80 67,138.20 29,131.60 33,102

Purchase of fixed assets 3,292.80 6,361.30 5,700.80 3,217.60 2,522

Increase in capital work in progressAcquisition or merger of companies or units

Purchase of investments 141,505.70 124,829.50 61,340.90 25,731.00 30,335

Loans to subsi or group companies 96.5 183 2

Loans to other companies

Net cash inflow from investing activities 149,478.32 132,905.28 31,651.85 12,696.86 15,249



Increase in capital work in progress 205630.65 182102.175 37023.9791 13862.7672 17329.76

Acquisition or merger of companies or units 224348.093 198501.139 38814.6873 14251.4015 18023.3


Loans to subsi or group companies 42396.1037 15028.6701 19410.53

Loans to other companies

Net cash inflow from investing activities 261,782.98 231,299.07 44,186.81 15,417.30 20,104



Increase in capital work in progress 317935.307 280495.961 49558.9366 16583.2075 22184.87

Acquisition or merger of companies or units 336652.75 296894.925 51349.6448 16971.8418 22878.46


Loans to subsi or group companies 54931.0612 17749.1104 24265.64

INTERPRETATION:

The net cash flow from investing activities has been decreasing. The main reason for this

could be the increase in the operations by the company which was discussed above. The reasons

can be sited as the increase in the purchase of fixed assets such as plants and machinery and the

decrease in the purchase of the investments form 141,550 mill to 33,000 mill. Which is a high

boom for the company? This means that the company is investment most of its activities in the

operations rather than the non-operational activities which says the company targets its main

operations as the primary task for earning profits.

The company has been able to raise more capital to fund for its operations from the

public. It has increased from 15,075 mill to 35,129 mill as of 2012 end. This increase in the

funds for the company has been used for the used for the purpose of the operations which has

brought back capital for the company.


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CASH FROM INVESTING ACTIVITIES:

Net cash inflow or (outflow) from financing activities -25,838.70

-10,897.50

-19,209.30 -20,405.00 -14,770.00

Less: Cash outflow due to financing activities 32,628.40 24,087.30 19,522.00 20,470.10 15,105.50

Issue expenses

Interest paid 255.4 253.2 69.8 2.4 12.4Dividend paid 19,544.70 14,359.60 15,232.70 14,183.60 15,093.10

Repayment of borrowings 6,512.90 9,474.50 4,219.50

Repayment of long term liabilities

Repayment of short term liabilities 379.9 493.7

Cash (outflow) due to redemption or buyback of capital 6,315.40 6,284.10

Cash inflow or (outflow) due to other cash receipts or payablesfrom financing activities

Add: Cash inflow from financing activities 6,789.70 13,189.80 312.7 65.1 335.5

Proceeds from share issue 123.6 381.2 312.7 65.1 335.5

Cash Subsidy

Proceeds from borrowings 6,666.10 12,808.60

Proceeds from long term borrowings

Proceeds from short term borrowings 153.2

Other cash receipts or payables from financing activities

Net increase or (decrease) in cash & cash equivalents -2,160.80 15,764.90 1,145.90 -6,783.20 6,947.90

Cash & bank - opening balance 4,169.40 2,008.60 17,773.50 9,064.70 2,281.50

Cash & bank - closing balance 2,008.60 17,773.50 18,919.40 2,281.50 9,229.40

Net increase or (decrease) in cash & cash equivalents(cl-op) -2,160.80 15,764.90 1,145.90 -6,783.20 6,947.90

INTERPRETATION:

The cash flow form the financing activity has been running in negatives throughout the

time. But the company has managed to increase the cash flow from -25,800 mill as of 2007 to -14770 mill as on 2012.

This changes has been achieved by the company due to the cash outflow of the company

has reduced from32000 mill to 15000 mill as of 2012. This was possible by the company due to

the reduction of interest expenses which was a result of the low long term borrowing policy

adopted by the company which has reduced the long term funds by a significant amount. As the

company has no debentures as such the repayment for the borrowings for the company has also

decreased to nil.

The other reason for the company to increase the in the cash flow can be seen as profits

gained by the company by raising more capital which has resulted in the cash proceeds of 335

mill as of 2012 when compared to 123 mill as of 2007.


16/16

CONCLUSION:

When looking the cash performance of the company. HUL has managed to raise the

significant amount of cash from the primary activities, which are evident from the interpretation

of the operating cash flows. Thought it doesnt mean that the companies financing and investing

cash flow are in a bad condition.

Though they are concentrating on the operating activities the company has managed to

increase the income from the other activities, if not they have at least managed to get a good hold

on controlling the losses that have been evident from the financing and investment activities.

Being a huge company as such HUL can afford to make such experiments and find out

which one would be the most efficient system for them to follow so that they can earn more

returns and stay in this competitive market for a longer duration.

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