FINANCIAL STATEMENT ANALYSIS OF

Submitted by, Bopanna.M.M 1220011 MBA A Christ university

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, skin care, 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. Its portfolio 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 leading suppliers 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 global challenges 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.

PROFITABILITY RATIOS
Operating margin:
Operating Margin = Operating Income/Revenue OPERATING MARGIN operating profit Revenue operating margin Mar ' 07 25,363.00 143,418.40 17.6846 Mar ' 09 32,206.30 208,290.50 15.4622 Mar ' 10 30,094.10 180,411.00 16.6809 Mar ' 11 31,581.00 202,152.20 15.6224 Dec ' 12 36,885.20 225,135.50 16.3836

Interpretation: Operating profit margin measures what proportion of a company's revenue

is 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 operating margin is increasing, the company is earning more per dollar of sales. The operating margin Operating margin shows the profitability of sales resulting from regular 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 the financial year 2009 and it has been fluctuating around this place itself which means that the companys growth is stable but there are less growth opportunities if this continues.

NET PROFIT MARGIN net profit Revenue Net Profit margin

Mar ' 07 19,254.70 143,418.40 13.43

Mar ' 09 24,964.60 208,290.50 11.99

Mar ' 10 22,020.30 180,411.00 12.21

Mar ' 11 23,059.90 202,152.20 11.41

Dec ' 12 26,914.00 225,135.50 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 in sales 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.

Cash flow margin:

Cash Flow Margin = Cash Flows from Operating Activities/Net Sales CASH FLOW MARGIN Cash Flows from Operating Activities Net Sales Cash Flow Margin Mar ' 07 14,840.70 Mar ' 09 19,806.30 Mar ' 10 33,977.20 Mar ' 11 16,562.00 Dec ' 12 26,242.40

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

Mar ' 07

Mar ' 09

Mar ' 10

Mar ' 11

Dec ' 12

Net Profit Equity Share Capital Total Debt capital employed Return on Capital Employed

19,254.70 21,615.00

24,964.60 21,861.00

22,020.30 25,835.20

23,059.90 26,595.20 2,192.00

26,914.00 35,129.30

21,615.00 89.08

21,861.00 114.2

25,835.20 85.23

28,787.20 80.1

35,129.30 76.61

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 funded debt, 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 and currently 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 ON ASSETS Net Profit
total asset

Mar ' 07 19,254.70 162,673.10 11.84

Mar ' 09 24,964.60 190,820.50 13.08

Mar ' 10 22,020.30 202,431.30 10.88

Mar ' 11 23,059.90 225,212.10 10.24

Dec ' 12 26,914.00 252,049.50 10.68

Return on Assets

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 Net Sales long term funds Return on Long Term Funds Mar '07 143,418.40 3,296.90 43.5 Mar '09 208,290.50 2,192.00 95.02 Mar '10 180,411.00 Mar '11 202,152.20 Dec '12 225,135.50

Interpretation: Return on long term shows how many dollars of earnings result from each
dollar 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 Current assets Current liabilities current ratio Mar ' 07 40,666.10 40,665.10 1 Mar ' 09 44,947.50 44,946.60 1 Mar ' 10 47,603.60 52,916.60 0.9 Mar ' 11 54,178.10 55,636.40 1 Dec ' 12 50,609.30 51,697.30 1

Interpretation: The ratio is mainly used to give an idea of the company's ability to pay
back 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 obligations if 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 Current assets Inventories quick asset Current liabilities quick ratio Mar ' 07 67,127.15 2,639.65 21,965.90 40,665.10 0.24 Mar ' 09 79,356.34 2,846.84 23,822.40 44,946.60 0.2 Mar ' 10 47,603.60 2,209.41 31,562.90 52,916.60 0.17 Mar ' 11 54,178.10 2,558.87 28,891.40 55,636.40 0.17 Dec ' 12 50,609.30 1,992.63 42,682.50 51,697.30 0.16

Interpretation: The quick ratio is more conservative than the current ratio, a more wellknown liquidity measure, because it excludes inventory from current assets. Inventory because some companies have difficulty turning their inventory into cash.

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 total equity total debt Debt Equity Ratio Mar ' 07 15,075.00 0 0 Mar ' 09 21,367.90 0 0 Mar ' 10 25,835.20 0 0 Mar ' 11 26,595.20 2192 0.08 Dec ' 12 35,129.30 3,296.90 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 RATIO PBDIT Depreciation PBIT interest paid Interest Coverage ratio Mar ' 07 25,363.00 1,383.60 23,979.40 255 0.1 Mar ' 09 32,206.30 1,953.00 30,253.30 253.2 0.12 Mar ' 10 30,094.10 1,840.30 28,253.80 69.8 0.21 Mar ' 11 31,581.00 2,208.30 29,372.70 2.4 .3 Dec ' 12 36,885.20 2,182.50 34,702.70 12.4 .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.

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 total equity total debt Debt Equity Ratio Mar ' 07 15,075.00 0 0 Mar ' 09 21,367.90 0 0 Mar ' 10 25,835.20 0 0 Mar ' 11 26,595.20 2192 0.08 Dec ' 12 35,129.30 3296.9 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 RATIO Net Sales Mar ' 07 143,418.40 Mar ' 09 208,290.50 Mar ' 10 180,411.00 Mar ' 11 202,152.20 Dec ' 12 225,135.50

19,926.30 25,588.70 21,799.30 28,107.70 25,166.50 Inventories Inventory Turnover 7.2 8.14 8.28 7.19 8.95 Ratio 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 ratio should 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.

Debtors Turnover Ratio:

Debtors Turnover Ratio=sales/debtors DEBTORS TURNOVER RATIO Net Sales Sundry Debtors Debtors Turnover Ratio average collection period Mar ' 07 21,615.00 4619.6 4.68 78 Mar ' 09 21,861.00 5605.6 3.9 94 Mar ' 10 25,835.20 6716 3.85 95 Mar ' 11 26,595.20 9432.1 2.82 129 Dec ' 12 35,129.30 6789.9 5.17 71

Interpretation: By maintaining accounts receivable, firms are indirectly extending interestfree 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 Ratio

Fixed Assets Turnover Ratio = Cost of Sales / Net Fixed Assets FIXED ASSETS Mar ' 07 Mar ' 09 Mar ' 10 Mar ' 11 Dec ' 12 TURNOVER RATIO 138,778.50 206,235.00 177,816.60 197,355.10 221,163.70 Net Sales 24,620.00 24,480.00 24,360.70 24,578.60 23,629.20 fixed assets Fixed Assets Turnover 5.64 8.42 7.3 8.03 9.36 Ratio 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

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 TURNOVER RATIO Net Sales Mar ' 07 138,778.50 81,892.20 Mar ' 09 206,235.00 91,535.90 Mar ' 10 177,816.60 90,679.10 Mar ' 11 197,355.10 99,530.00 Dec ' 12 221,163.70 107,440.30

Total Assets Total Assets Turnover 1.69 2.25 1.96 1.98 2.06 Ratio 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.

Asset Turnover Ratio

Assets Turnover Ratio= Cost of Sales / total Assets ASSETS TURNOVER Mar ' 07 Mar ' 09 Mar ' 10 Mar ' 11 Dec ' 12 RATIO 138,778.50 206,235.00 177,816.60 197,355.10 221,163.70 Net Sales 81,892.20 91,535.90 90,679.10 99,530.00 107,440.30 Total Assets Fixed Assets Turnover 1.69 2.25 1.96 1.98 2.06 Ratio 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.

Dividend payout ratio

Dividend payout ratio (net profit) =dividend/net profit dividend payout ratio (net profit) Mar ' 07 Mar ' 09 Mar ' 10 Mar ' 11 Dec ' 12

1976.12 1634.51 1417.94 1410.6 1620.94 dividends paid 19,254.70 24,964.60 22,020.30 23,059.90 26,914.00 Net profit (PAT) dividend payout ratio 10.2631 6.54731 6.43924 6.11711 6.02266 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 live with.

Retention Ratio
Retention Ratio=net income-dividend/net income

Retention Ratio
dividends paid Net profit (PAT) Net profit (PAT) - dividends paid

Mar ' 07 1976.12 19,254.7 0 17,278.5 8 89.7369

Mar ' 09 1634.51 24,964.6 0 23,330.0 9 93.4527

Mar ' 10 1417.94 22,020.3 0 20,602.3 6 93.5608

Mar ' 11 1410.6 23,059.9 0 21,649.3 0 93.8829

Dec ' 12 1620.94 26,914.0 0 25,293.0 6 93.9773

Retention Ratio

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.

CASH FLOW STATEMENT ANALYSIS:

CASH FROM OPERATING ACTIVITIES:
Net cash flow from operating activities Net profit before tax & extra-ordinary income Add: Adjustments for non-cash and non-operating expenses Depreciation Amortisation and w offs Unrealised foreign exchange loss Provision for contingencies Other provisions like RDD etc Interest Paid Loss on sale of investments Loss on sale of assets Other non-cash and non-operating expenses Less: Adjustments for non-cash and non-oper income Unrealised foreign exchange gain Provision or liabilities written back Interest income Dividend income Profit on sale of investments Profit or loss on sale of assets Other non-cash and non-operating income Operating cash flow before working capital changes Add:Cash inflow due to Decrease in trade & other receivables Decrease in inventories Increase in trade & other payables Increase in deposits Decrease in advances Increase in other current liabilities Less: Cash outflow due to Increase in trade & other receivables Increase in inventories Decrease in trade & other payables Decrease in deposits (banks or fis) Increase in advances (banks or fis) Decrease in other current liabilities Cash flow generated from operations Cash outflow due to direct taxes paid Cash inflow due to direct taxes refund Cash outflow due to dividend tax paid Cash flow before extraordinary items Cash outflow due to extraordinary items Cash inflow due to extraordinary items Cash outflow due to misc expend 1,110.50 1,374.40 1,230.90 3,374.70 13,730.20 2,406.10 18,431.90 2,593.90 32,746.30 2,355.80 16,650.20 88.2 2,453.20 26,389.20 146.8 22,030.90 4,926.00 27,174.50 6,336.50 41,957.60 6,617.40 25,530.10 6,524.10 35,410.00 6,567.60 4,391.00 398.4 3,992.60 7,271.30 1,518.80 5,752.50 64.7 64.7 10,914.10 4,600.80 6,313.30 747.6 747.6 5,613.20 3,982.10 3,489.20 10,961.40 9,306.70 20,808.70 5,613.20 30,463.70 3,982.10 27,571.70 14,450.60 27,137.50 9,306.70 33,373.70 2,783.90 1,460.40 1,323.50 642.3 1,029.80 706.5 30.9 809.4 707.1 539 939.1 346.5 195.4 1,156.80 760.6 602.1 1,177.00 442.2 1,159.60 70.4 2,378.60 92.7 2,086.40 71.9 1,481.00 59.3 85 2,519.50 157.3 117.4 2,778.80 255 253.2 69.8 2.4 181.3 12.4 MAR 07 14,840.70 21,463.30 1,724.00 1,383.60 15 MAR 09 19,806.30 30,251.20 2,298.90 1,953.00 MAR10 33,977.20 27,070.70 1,982.00 1,840.30 MAR 11 16,562.00 27,302.00 2,355.00 2,208.30 26,242.40 33,501.60 2,650.90 2,182.50

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 of efficiency 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 high profits 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.

CASH FROM INVESTING ACTIVITIES:

Net cash inflow from investing activities Less: Cash outflow due to investing activities Purchase of fixed assets Increase in capital work in progress Acquisition or merger of companies or units Purchase of investments Loans to subsi or group companies Loans to other companies Net cash inflow from investing activities Less: Cash outflow due to investing activities Purchase of fixed assets Increase in capital work in progress Acquisition or merger of companies or units Purchase of investments Loans to subsi or group companies Loans to other companies Net cash inflow from investing activities Less: Cash outflow due to investing activities Purchase of fixed assets Increase in capital work in progress Acquisition or merger of companies or units Purchase of investments Loans to subsi or group companies 261,782.98 280,500.42 299,217.86 317935.307 336652.75 355,370.19 231,299.07 247,698.03 264,097.00 280495.961 296894.925 313,293.89 44,186.81 45,977.52 47,768.23 49558.9366 51349.6448 53,140.35 54931.0612 15,417.30 15,805.94 16,194.57 16583.2075 16971.8418 17,360.48 17749.1104 20,104.12 20,797.71 21,491.29 22184.8799 22878.4672 23,572.05 24265.6418 149,478.32 168,195.76 186,913.21 205630.65 224348.093 243,065.54 132,905.28 149,304.25 165,703.21 182102.175 198501.139 214,900.10 31,651.85 33,442.56 35,233.27 37023.9791 38814.6873 40,605.40 42396.1037 12,696.86 13,085.50 13,474.13 13862.7672 14251.4015 14,640.04 15028.6701 15,249.01 15,942.59 16,636.18 17329.7687 18023.356 18,716.94 19410.5306 141,505.70 124,829.50 61,340.90 96.5 25,731.00 183 30,335.00 245 8,837.20 144,798.50 3,292.80 6,856.10 131,190.80 6,361.30 -13,622.00 67,138.20 5,700.80 -2,940.20 29,131.60 3,217.60 -4,524.50 33,102.10 2,522.10

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.

CASH FROM INVESTING ACTIVITIES:

Net cash inflow or (outflow) from financing activities Less: Cash outflow due to financing activities Issue expenses Interest paid Dividend paid Repayment of borrowings Repayment of long term liabilities Repayment of short term liabilities Cash (outflow) due to redemption or buyback of capital Cash inflow or (outflow) due to other cash receipts or payables from financing activities Add: Cash inflow from financing activities Proceeds from share issue Cash Subsidy Proceeds from borrowings Proceeds from long term borrowings Proceeds from short term borrowings Other cash receipts or payables from financing activities Net increase or (decrease) in cash & cash equivalents Cash & bank - opening balance Cash & bank - closing balance Net increase or (decrease) in cash & cash equivalents(cl-op) -2,160.80 4,169.40 2,008.60 -2,160.80 15,764.90 2,008.60 17,773.50 15,764.90 1,145.90 17,773.50 18,919.40 1,145.90 -6,783.20 9,064.70 2,281.50 -6,783.20 6,947.90 2,281.50 9,229.40 6,947.90 153.2 6,666.10 12,808.60 6,315.40 379.9 493.7 6,284.10 255.4 19,544.70 6,512.90 253.2 14,359.60 9,474.50 69.8 15,232.70 4,219.50 2.4 14,183.60 12.4 15,093.10 25,838.70 32,628.40 10,897.50 24,087.30 -19,209.30 19,522.00 -20,405.00 20,470.10 -14,770.00 15,105.50

6,789.70 123.6

13,189.80 381.2

312.7 312.7

65.1 65.1

335.5 335.5

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.

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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