CONTENTS

 Hindustan Unilever Limited Profile

 Introduction
 Vision
 Sense of purpose
 Sustainability targets
 Capital Structure of HUL
 Equity share
 Balance sheet of HUL Last 5 years
 Comarative Balance sheet of HUL Last 5 years
 Common Size Balance sheet
 Ratio Analysis of HUL
 Current Ratio
 Quick Ratio
 Debt Equity Ratio
 Working Capital
 Company with peer company
 Balance sheet of HUL and P&G
 Recommendation
 IN THE FULLFILLMENT OF CONTINUOUS ASSESSMENT 2

COURSE: FIN 302

SECTION: RQ 1708

UNDER THE GUIDANCE OF

DR. Rupesh Roshan Singh

SUBMITTED BY REG.NO ROLL.NO.

JUHI KUMARI 11716436 62

RINKESH RAJ 11716442 59

PRAKHAR SHARMA 11706697 58

SAMMER SINGH 11715666 60

MANISHA SEN 11711579 61

 Hindustan Unilever Limited

Type of Company : Public

Industry : Consumer Goods

Predecessor : Hindustan Vanaspati

Manufacturing Company (1931-

1956)

Lever Brothers India limited (1933-1956)

United Traders limited (1935-1956)

Hindustan Lever Limited (1956-2007)

Founded 1933

Headquarters : Mumbai, Maharashtra

CEO : Sanjiv Soshil Mehta

Products : Foods, Cleaning Agents and Personal Care and

Water Purifiers.

Revenue : Rs. 34,487 Crore

Operating Income : Rs. 6,047 Crore

Net Income : Rs. 4,490 Crore

Parent : Unilever

Website : www.hul.co.in
 INTRODUCTION

Hindustan Unilever Limited (HUL) is a British-Dutch company headquartered in Mumbai,

Maharashtra Its products include foods, beverages, cleaning agents, personal care products, water
purifiers and consumer goods. HUL was established in 1933 as Lever Brothers. Following the
merger among Lever Brothers in 1956, it was renamed as Hindustan Lever Limited. The company
was renamed in June 2007 as "Hindustan Unilever Limited" As of 2019 HUL portfolio had 35
product brands in 20 categories and employs 18,000 employees with sales of Rs. 34,619 crores in
2017-18.

Hindustan Unilever Limited is an India-based fast-moving consumer goods company. The

Company operates in seven business segments. Soaps and detergents include soaps, detergent bars,
detergent powders and scourers. Personal products include products in the categories of oral care,
skin care (excluding soaps), hair care, talcum powder and color cosmetics. Beverages include tea
and coffee. Packaged foods include staples (atta, salt and bread) and culinary products (tomato-
based products, fruit-based products and soups), Icecreams and frozen desserts. Others include
Exports, Chemicals, Water business. As of March 31, 2012, the Company had over 35 brands
spanning 20 distinct categories. Its portfolio includes household brands, such as Lux, Lifebuoy,
Surf Excel, Rin, Wheel, Fair & Lovely, Pond's, Vaseline, Lakme, Dove, Clinic Plus, Sunsilk,
Pepsodent, Closeup, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall's and Pureit.

Vision
Our vision is to grow our business, while decoupling our environmental footprint from our growth
and increasing our positive social impact.
Sense of purpose

Our business has always been driven by a sense of purpose, a thread that connects us to our
founding companies and their social missions to improve health, hygiene and livelihoods in their
communities. We continue to believe that business must make a positive contribution to addressing
the challenges the world faces and that this is the only way a business will succeed. In 2009, we
launched The Compass – our strategy for sustainable growth, setting out our determination to build
a sustainable business for the long term

Sustainability targets

The Unilever Sustainable Living Plan, launched in 2010, laid the blueprint for achieving this
strategy. We continue to work towards the ambitious targets we have set ourselves for halving our
environmental impact, improving the health and wellbeing of 1 billion people, and enhancing the
livelihoods of millions.We will grow our business by building on our strengths – combining our
scale and expertise with our understanding of consumers in diverse markets to continue providing
brands and services that people want and need. Our sustainable business model is making a
difference to millions of people’s lives and to our environmental impact, and we will keep working
to make these contributions greater. We’re also already seeing evidence that it is strengthening our
business by helping to drive growth and trust, and reduce risk and cost.
Capital Structure Of HUL
Hindustan Unilever Limited raised their funds from only Equity Shares. Capital Structure of HUL
from 2014 to 2018 is given below.

Capital Structure
216.5

216.45
216.45 216.43

216.4 216.39

216.35
216.35

216.3
216.27

216.25

216.2

216.15
1 2 3 4 5

Year Authorized Capital (Cr) Issued Capital (Cr)

2018(1) 225 216.45
2017(2) 225 216.43
2016(3) 225 216.39
2015(4) 225 216.35
2014(5) 225 216.27

From 2014 to 2015 HUL Issued Share Rs.8,00,000 more

And 2015 to 2016 HUL Issued Share Rs.4,00,000 more
Further in 2016 to 2017 HUL Issued Share Rs. 4,00,000 more
Again 2017 to 2018 HUL Issued Share Rs.2,00,000 more.
Its clearly showing that HUL is Issuing their equity share every year. And Issuing rate is not
constant.

Hindustan Unilever Limited is using only Equity share for its Capital and They are not using
any debt. So HUL is an unlevered firm.
Equity Share

Equity shares were earlier known as ordinary shares. The holders of these shares are the real
owners of the company. They have a voting right in the meetings of holders of the company. They
have a control over the working of the company. Equity shareholders are paid dividend after paying
it to the preference shareholders. The rate of dividend on these shares depends upon the profits of
the company. They may be paid a higher rate of dividend or they may not get anything. These
shareholders take more risk as compared to preference shareholders. Equity capital is paid after
meeting all other claims including that of preference shareholders. They take risk both regarding
dividend and return of capital. Equity share capital cannot be redeemed during the life time of the
company.
Balance Sheet of HUL Last 5 Years

Particulars 2018 cr 2017 cr 2016 cr 2015 cr 2014 cr

Share Capital 216 216 216 216.35 216.27
Reserves Total 6859 6274 6063 3508.43 3060.78
Equity Share 0 0 0 0 0
Warrants
Equity 0 0 0 0 0
Application
Money
Total 7075 6490 6279 3724.78 3277.05
Shareholders
Funds
Secured Loans 0 0 0 0 0
Unsecured 0 0 0 0 0
Loans
Total Debt 0 0 0 0 0
Total Liabilities 7075 6490 6279 3724.78 3277.05
APPLICATION
OF FUNDS :
Gross Block 5267 4712 3218 4721.36 4442.85
Less : 1125 688 304 2263.83 2020.79
Accumulated
Depreciation
Less:Impairment 0 0 0 0 0
of Assets
Net Block 4142 4024 2914 2457.53 2422.06
Lease 0 0 0 0 0
Adjustment
Capital Work in 430 203 386 479.01 319.78
Progress
Producing 0 0 0 0 0
Properties
Investments 3111 3779 2780 3277.93 3094.12
Current Assets,
Loans &
Advances
Inventories 2359 2362 2528 2602.68 2747.53
Sundry Debtors 1147 928 1064 782.94 816.43
Cash and Bank 3373 1671 2759 2537.56 2220.97
Loans and 1405 885 740 716.55 609.59
Advances
Total Current 8284 5846 7091 6639.73 6394.52
Assets
Less : Current
Liabilities and
Provisions
Current 7985 6815 6362 6196.95 6535.17
Liabilities
Provisions 651 387 290 2585.87 1983.37
Total Current 8636 7202 6652 8782.82 8518.54
Liabilities
Net Current 352 -1356 439 -2143.09 -2124.02
Assets
Miscellaneous 0 0 0 0 0
Expenses not
written off
Deferred Tax 653 572 510 466.62 396.14
Assets
Deferred Tax 398 412 342 270.66 234.41
Liability
Net Deferred 255 160 168 195.96 161.73
Tax
Comparative Balance Sheet of HUL Last 5 Years

Particulars 2018 2017 2016 2015 2014

Share 0% 0% 0% -35% 8%
Capital
Reserves 5.85 2.11 25.55 4.48 30.61
Total
Total 5.85 2.11 25.54 4.48 32.77
Shareholders
Funds
Total 5.85 2.11 25.54 4.48 32.77
Liabilities

Inventories -0.03 -1.66 -0.75 -1.45 27.48

Sundry 2.19 -1.36 2.81 -0.33 8.16
Debtors
Cash and 17.02 -10.88 2.21 3.17 22.21
Bank
Loans and 5.20 1.45 0.23 1.07 6.10
Advances
Net Block 1.18 11.10 4.56 0.35 24.22
Capital 2.27 -1.83 -0.93 1.59 3.20
Work in
Progress
Net Deferred 0.95 -0.08 -0.28 0.34 1.62
Tax
Investments -6.68 9.99 -4.98 1.84 30.94
Total Assets 7.76 1.23 24.20 3.94 38.74
Particulars 2018 2017 2016 2015 2014
Share 0% 0% 0% -35% 8%
Capital
Reserves 5.85 2.11 25.55 4.48 30.61
Total
Common Size Balance Statement

Particulars 2018 2017 2016 2015 2014

Share 3.05% 3.33% 3.44% 5.81% 6.60%
Capital
Reserves 96.95% 96.67% 96.56% 94.19% 93.40%
Total
Total 100.00% 100.00% 100.00% 100.00% 100.00%

Inventories 31.10% 34.68% 37.80% 60.99% 70.93%

Sundry 15.12% 13.63% 15.91% 18.35% 21.08%
Debtors
Cash and 44.46% 24.54% 41.26% 59.46% 57.34%
Bank
Loans and 18.52% 13.00% 11.07% 16.79% 15.74%
Advances
Total -113.8% -105.8% -99.5% -205.8% -219.9%
Liabilities
Net Block 54.60% 59.09% 43.58% 57.59% 62.53%
Capital 5.67% 2.98% 5.77% 11.23% 8.26%
Work in
Progress
Net 3.4% 2.3% 2.5% 4.6% 4.2%
Deferred
Tax
Investments 41.01% 55.49% 41.57% 76.81% 79.88%
Total 100.00% 100.00% 100.00% 100.00% 100.00%
 Ratio Analysis of HUL

1. Current Ratio

Chart Title
1.200
1.066
0.959
1.000
0.812
0.756 0.751
0.800

0.600

0.400

0.200

0.000
1 2 3 4 5

Last Five Years Ratio

2018(1) 2017(2) 2016(3) 2015(4) 2014(5)

0.959 0.812 1.066 0.756 0.751

Not Good Not Good Not Good Good Not Good Not Good

An Ideal Current Ratio is between 1 – 1.2. As stated above, if the current ratio stays
below 1 for a prolonged period of time, it may be a cause of concern. At the same time,
a current ratio higher than 1.5 indicates that the company is not productively utilizing
its cash resources.

As per the graph in 2016 HUL was having Ideal Current Ratio.

If we notice the graph from 2017 to 2018 Ratio increases. So the current trend is showing
in 2020 current ratio will increase.
 2. Quick Ratio

Quick Ratios
0.800
0.686 0.686
0.700

0.600
0.484
0.500 0.460
0.428
0.400

0.300

0.200

0.100

0.000
1 2 3 4 5

2018(1) 2017(2) 2016(3) 2015(4) 2014(5)

0.686 0.484 0.686 0.460 0.428

Not Good Not Good Not Good Not Good Not Good

The higher the quick ratio, the better the position of the company. The commonly
acceptable current ratio is 1,but may vary from industry to industry. A company with a
quick ratio of less than 1 cannot currently pay back its current liabilities; it's the bad sign
for investors and partners.
3. Debt Equity Ratio

2018 2017 2016 2015 2014

0 0 0 0 0

Hindustan Unilever Limited is Using only Equity Capital. So Debt Equity Ratio is 0.

4. Working Capital

Working Capital
1000

439
500

0
1 2 3 4 5
-500 -352

-1000

-1500 -1356

-2000

-2143.09 -2124.02
-2500

2018(1)Cr 2017(2)Cr 2016(3)Cr 2015(4)Cr 2014(5)Cr

-352 -1356 439 -2143.09 -2124.02

In 2016 HUL was having best working capital. Trend is showing that in 2019 their
working capital may be increase.
Balance Sheet of HUL and P&G

Particulars 2018 HUL 2018 P&G

216 32.46
Reserves Total 6859 773.04
Equity Share Warrants 0 0
Equity Application 0 0
Money
Total Shareholders Funds 7075 805.5
Secured Loans 0 0
Unsecured Loans 0 0
Total Debt 0 0
Total Liabilities 7075 805.5
APPLICATION OF
FUNDS :
Gross Block 5267 399.96
Less : Accumulated 1125 149.85
Depreciation
Less:Impairment of 0 0
Assets
Net Block 4142 250.11
Lease Adjustment 0 0
Capital Work in Progress 430 21.48
Producing Properties 0 0
Investments 3111 0
Current Assets, Loans &
Advances
Inventories 2359 123.61
Sundry Debtors 1147 148.47
Cash and Bank 3373 399.59
Loans and Advances 1405 1153.76
Total Current Assets 8284 671.67
Less : Current Liabilities
and Provisions
Current Liabilities 7985 566.85
Provisions 651 53
Total Current Liabilities 8636 619.85
Net Current Assets 352 533.91
 Miscellaneous Expenses 0 0
not written off
Deferred Tax Assets 653 0
Deferred Tax Liability 398 0
Net Deferred Tax 255 0
Total Assets 7586 805.5
Contingent Liabilities 1539 166.12

Ratios Analysis
80 74.02
70
60
50 46.5

40
30
20
10
0 0 1.86 0.94
0
1 2 3

P&G HUL

Company
2018 Debt Equity Ratio Current Ratio Return on Assets

P&G 0 1.86 46.5

HUL 0 0.94 74.02

In 2018 Their debt Equity ratio was 0.

P&G Is having more current ratio then
HUL. But HUL is having more Return on
Assets.
Both Company Use Equity Capital for rising capital.
Recommendations

 Hindustan Unilever is not having Optimal capital structure. An optimal capital

structure is the objectively best mix of debt, preferred stock, and common stock that
maximizes a company’s market value while minimizing its cost of capital.

 An optimal capital structure is the objectively best mix of debt, preferred stock, and
common stock that maximizes a company’s market value while minimizing its cost of
capital.

 According to economists Modigliani and Miller, in the absence of taxes, bankruptcy

costs, agency costs, and asymmetric information; and in an efficient market, the value
of a firm is unaffected by its capital structure.

Chart Title

22.5
75

127.5

Debt Equtiy Preferance Share

Debt 33% 75 Cr
Equity Capital 57% 127.5 Cr
Preference Share Capital 10% 22.5 Cr
Total 100% 225 Cr
According to Us This will be best Capital Structure for Hindustan Unilever Limited.