FINANCIAL REPORTING & ANALYSIS

FINAL PROJECT REPORT

ANALYSIS OF FMCG INDUSTRY

Under the guidance of

Prof. Mrityunjay K Tiwari

Submitted by Group 14, Section E

George C Mundackal (PGP 36212)

Mandapala Yaswanth Yadav (PGP 36221)
Shaurya Malhotra (PGP 36234)
Sumedh Humane (PGP 36238)
 An Introduction to FMCG

FMCG or Fast-Moving Consumer Goods, as the name implies are goods that move
off the store shelf quickly, are relatively inexpensive, this includes a wide array of consumer
products such as cosmetics to candies to beverages. The FMGC Sector, the term CPG or
Consumer Packaged Goods is often used in the Americas to denote FMGC goods. The
FMCG Industry primarily deals with the manufacturing, marketing and distribution of such
goods.
FMGC Goods have certain characteristics, such as:
• For the consumer
1. Frequent Purchases
2. Relatively Low Pricing
3. Short Shelf Life as a consequence of quick consumption
• For the manufacturers
1. High Volumes of Production
2. A robust and extensive network of distribution
3. High inventory turnover

The FMCG Sector in India

• Overview:
The FMCG sector in India has witnessed tremendous growth in due to the fast developing
and increasingly integrated nature of its economy that has caused changing lifestyle trends
and an increase in disposable income of the average consumer. Rural consumption is set to be
the driving force behind this growth, overall, it contributes 36% to the total FMCG spending,
in the quarter ending in September 2019, rural segment grew at 5% while urban segment
grew at 8%.
Globally India’s contribution to global FMCG consumption is set to be 5.8% by 2020.

• Sector Growth and Trends:

The FMCG sector witnessed a growth to $ 83.3 Billion in the Year 2019,
which is up from $ 68.38 as of 2018 It is expected to grow to upwards of $ 100 Billion in the
year 2020. The sector is expected to grow with a CAGR (Compound annual growth rate) of
23.15 % for FY2021 A detailed analysis can be found in the latter part of the report.

Players in the Indian FMCG Sector

1. Hindustan Unilever Limited (HUL)

2. ITC Limited
3. Colgate-Palmolive
4. Nestle
5. Parle Agro
6. Britannia Industries Limited
7. Marico Limited
8. Procter & Gamble
9. The Godrej Group
10. Amul
 Major Players

HUL:
HUL or Hindustan Unilever Limited is the Indian arm of Unilever an Anglo–Dutch
multinational which has global revenues of over $ 61 Billion in 2019. HUL has a presence in
the Indian Market since 1931, making it one of the oldest FMCG companies in the country,
as of 2019 its portfolio extends to over 35 brands across 20 categories, it employs over
18,000 people and is headquartered in Mumbai.
HULs products extend across categories such as:
Personal Care
• Axe, Brylcreem
• Clear, Clinic Plus,Close, Dove ,Denim , Glow and Lovely
• Hamam, Indulekha
• Lakmé
• Lifebuoy, Liril, Lux, Pears
• Pepsodent, Pond’s, Rexona, Sunsilk
• Sure, Vaseline, TRESemmé
Food
• Bru coffee, Brooke Bond
• Kissan, Lipton, Knorr, Kwality Wall's
• Magnum, Horlicks
Home Care
• Active, Sirf Excel
• Vim, Rin, Domex

ITC:
ITC is an Indian Multi National Conglomerate established in 1910, it was originally known
as the Imperial Tobacco Company, and later the Indian Tobacco Company, presently it is
known only as ITC Ltd. with the acronym standing for no specific long form. ITC has a
significant present in Cigarettes, FMCG, Hotels, and Agribusiness. It is headquartered in
Kolkata and Employs over 36,000 people. It clocked in revenue of $ 7.3 billion in 2019 and a
net income of $ 1.8 billion in the same year. The company’s initial decades were heavily
focused on the cigarette and leaf-tobacco businesses, after which they diversified to various
other sectors. It is estimated that ITC sells over 80% of the cigarettes and bidis sold on India
some of its major brands are
• Gold Flake, Classic, Silk Cut, 555, Lucky Strike, India Kings
• Bingo, Sunfeast, Dark Fantasy
• Classmate
• Natural, Vivel, Engage
• Aashirwaad
Procter & Gamble Company (P&G):

P&G is an American Multi National Giant headquartered in Ohio it specialized in a wide

range of personal health and personal care products, globally its revenues stood at $ 70.95
Billion in 2020 with a net income of $13.03 Billion in the same year, it also employs over
99,000 Employees globally and operates in dozens of countries worldwide. Some of its
famous brands are
• Tide, Ariel
• Whispers
• Pampers
• Gillette
• Panteene, Olay, head & Shoulders
• AmbiPur
• Vicks

Recent Developments
• Acquisitions:
1. In May 2020, TCPL (Tata Consumer Products Limited) acquired PepsiCo’s stake in
NourishCo Beverages Limited, manufacturer of Products such as Himalayan
Packaged Drinking Water.
2. In March 2020, HUL (Hindustan Unilever Limited) and Glenmark Pharmaceuticals
reached an agreement for HUL to acquire VWash, an intimate hygiene brand.
3. In November 2019, ITC acquired a 33.42% stake in a vending machine start-up
Delectable Technologies
• Investments in Infrastructure:
1. Nestle, the makers of brands such as Maggi, Nescafe and KitKat are set to invest Rs
700 crore to setup a new Maggi plant in Sanand, Gujarat. This will be its 9th factory in
the Country.
2. ITC is set to invest Rs 700 crore in a modern food processing park in Madhya Pradesh
which will focus of Dried Vegetables, in collaboration with local farms.
3. Patanjali will spend US$743.72 million in various food parks in Maharashtra, Madhya
Pradesh, Assam, Andhra Pradesh and Uttar Pradesh.

• Government Policies

1. The Updated FDI (Foreign Direct Investment) policy by the Government of India
allows for 100% FDI in the cash and carry space and 51% FDI in the multi-brand
retail space.
2. Updated GST policies now place various FMCG products such as toothpaste and
soaps under the 18% GST bracket as opposed to the previous 23-24% tax brackets.
For food and hygiene products as well, the taxes have come down to the 0-5% bracket
and 12-18% brackets respectively. Such moves are beneficial for both the consumer
and the manufacturers.
3. The government has also reformed consumer protections to try and ensure speedy,
accessible and extensive justice to consumers.
 HUL Accounting Policies:

There are seven major policies in accounting

1. Property, Plant & Equipment
2. Inventories
3. Intangible assets
4. Financial assets
5. Provisions & Contingent Liabilities
6. Revenues
7. Earnings per share (EPS)

HUL Policy for Property, Plant & Equipment:

• Property, plant and equipment is stated at acquisition cost net of accumulated
depreciation and accumulated impairment losses, if any.
• Subsequent costs are included in the assets carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that future economic benefits associated
with the item will flow to the Company and the cost of the item can be measured
reliably.
• All other repairs and maintenance cost are charged to the Statement of Profit and Loss
during the period in which they are incurred.
• Gains or losses arising on retirement or disposal of property, plant and equipment are
recognised in the Statement of Profit and Loss.
• Property, plant and equipment which are not ready for intended use as on the date of
Balance Sheet are disclosed as a Capital work-in-progress.
• Advances paid towards the acquisition of property, plant and equipment outstanding at
each balance sheet date is classified as capital advances under Other Non-Current
Assets.
• Depreciation is provided on a pro-rata basis on the straight-line method based on
estimated useful life prescribed under Schedule II to the Companies Act, 2013 with the
exception of the following:
o plant and equipment is depreciated over 3 to 21 years based on the technical
evaluation of useful life done by the management.
o Assets costing Rs. 5,000 or less are fully depreciated in the year of purchase.
Freehold land is not depreciated. The residual values, useful lives and method
of depreciation of property, plant and equipment is reviewed at each financial
year end and adjusted prospectively, if appropriate.

HUL Policy for Inventories:

• Inventories are valued at the lower of cost and net realisable value.
• Cost is computed on a weighted average basis. Cost of finished goods and work-in-
progress include all costs of purchases, conversion costs and other costs incurred in
bringing the inventories to their present location and condition.
• The net realisable value is the estimated selling price in the ordinary course of business
less the estimated costs of completion and estimated costs necessary to make the sale.

HUL Policy for Intangible assets:

• Intangible assets purchased are initially measured at cost.
• Intangible assets acquired in a business combination are recognised at fair value at the
acquisition date.
 • Subsequently, intangible assets are carried at cost less any accumulated amortisation
and accumulated impairment losses, if any.
• The useful lives of intangible assets are assessed as either finite or indefinite. Finite-
life intangible assets are amortised on a straight-line basis over the period of their
estimated useful lives.
• Estimated useful lives by major class of finite-life intangible assets are as follows:
o Design - 10 years
o Know-how - 10 years
o Computer software - 5 years
o Trademarks - 5 years
• The amortisation period and the amortisation method for finite-life intangible assets is
reviewed at each financial year end and adjusted prospectively, if appropriate.
• For indefinite life intangible assets, the assessment of indefinite life is reviewed
annually to determine whether it continues, if not, it is impaired or changes
prospectively basis revised estimates.
• Goodwill is initially recognised based on the accounting policy for business
combinations and is tested for impairment annually.

HUL Policy for Financial assets:

• Financial assets are recognised when the Company becomes a party to the contractual
provisions of the instrument.
• On initial recognition, a financial asset is recognised at fair value.
• In case of Financial assets which are recognised at fair value through profit and loss
(FVTPL), its transaction cost is recognised in the statement of profit and loss.
• In other cases, the transaction cost is attributed to the acquisition value of the financial
asset. Financial assets are subsequently classified and measured at
o Amortised cost
o Fair value through profit and loss (FVTPL)
o Fair value through other comprehensive income (FVOCI).
• Financial assets are not reclassified subsequent to their recognition, except during the
period the Company changes its business model for managing financial assets.

HUL Policy for Provisions & Contingent Liabilities:

• Provisions are recognised when the Company has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
• Provisions are measured at the best estimate of the expenditure required to settle the
present obligation at the Balance Sheet date.
• If the effect of the time value of money is material, provisions are discounted to reflect
its present value using a current pre-tax rate that reflects the current market assessments
of the time value of money and the risks specific to the obligation.
• When discounting is used, the increase in the provision due to the passage of time is
recognised as a finance cost.
• Contingent liabilities are disclosed when there is a possible obligation arising from past
events, the existence of which will be confirmed only by the occurrence or non-
occurrence of one or more uncertain future events not wholly within the control of the
Company or a present obligation that arises from past events where it is either not
 probable that an outflow of resources will be required to settle the obligation or a
reliable estimate of the amount cannot be made.

HUL Policy for Revenues:

• Revenue from sale of goods is recognised when control of the products being sold is
transferred to our customer and when there are no longer any unfulfilled obligations.
• The Performance Obligations in our contracts are fulfilled at the time of dispatch,
delivery or upon formal customer acceptance depending on customer terms.
• Revenue is measured at fair value of the consideration received or receivable, after
deduction of any trade discounts, volume rebates and any taxes or duties collected on
behalf of the government such as goods and services tax, etc.
• Accumulated experience is used to estimate the provision for such discounts and
rebates. Revenue is only recognised to the extent that it is highly probable a significant
reversal will not occur.
• Customers have the contractual right to return goods only when authorised by the
Company.
• An estimate is made of goods that will be returned and a liability is recognised for this
amount using a best estimate based on accumulated experience.
• Income from services rendered is recognised based on agreements/arrangements with
the customers as the service is performed and there are no unfulfilled obligations.
• Interest income is recognized using the effective interest rate (EIR) method.
• Dividend income on investments is recognised when the right to receive dividend is
established.

HUL Policy for Earnings per Share (EPS):

• Basic earnings per share is computed by dividing the net profit for the period
attributable to the equity shareholders of the Company by the weighted average number
of equity shares outstanding during the period.
• The weighted average number of equity shares outstanding during the period and for
all periods presented is adjusted for events, such as bonus shares, other than the
conversion of potential equity shares that have changed the number of equity shares
outstanding, without a corresponding change in resources.
• For the purpose of calculating diluted earnings per share, the net profit for the period
attributable to equity shareholders and the weighted average number of shares
outstanding during the period is adjusted for the effects of all dilutive potential equity
shares.
 Cross Sectional Financial Statement Analysis

HUL Balance Sheet

BALANCE SHEET OF HINDUSTAN UNILEVER (in Rs. Cr.) Mar-20 Mar-19 Mar-18 Mar-17 Mar-16
12 mths 12 mths 12 mths 12 mths 12 mths
EQUITIES AND LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 216 216 216 216 216
TOTAL SHARE CAPITAL 216 216 216 216 216
Reserves and Surplus 7,815.00 7,443.00 6,859.00 6,274.00 6,063.00
TOTAL RESERVES AND SURPLUS 7,815.00 7,443.00 6,859.00 6,274.00 6,063.00
TOTAL SHAREHOLDERS FUNDS 8,031.00 7,659.00 7,075.00 6,490.00 6,279.00
NON-CURRENT LIABILITIES
Long Term Borrowings 0 0 0 0 0
Deferred Tax Liabilities [Net] 0 0 0 0 0
Other Long Term Liabilities 1,269.00 804 666 574 395
Long Term Provisions 1,198.00 1,049.00 772 485 594
TOTAL NON-CURRENT LIABILITIES 2,467.00 1,853.00 1,438.00 1,059.00 989
CURRENT LIABILITIES
Short Term Borrowings 0 0 0 0 0
Trade Payables 7,399.00 7,070.00 7,013.00 6,006.00 5,498.00
Other Current Liabilities 1,287.00 782 972 809 864
Short Term Provisions 418 501 651 387 290
TOTAL CURRENT LIABILITIES 9,104.00 8,353.00 8,636.00 7,202.00 6,652.00
TOTAL CAPITAL AND LIABILITIES 19,602.00 17,865.00 17,149.00 14,751.00 13,920.00
ASSETS
NON-CURRENT ASSETS
Tangible Assets 4,625.00 3,907.00 3,776.00 3,654.00 2,902.00
Intangible Assets 431 436 366 370 12
Capital Work-In-Progress 513 373 430 203 386
Other Assets 0 0 0 0 0
FIXED ASSETS 5,569.00 4,716.00 4,572.00 4,227.00 3,300.00
Non-Current Investments 252 256 256 260 319
Deferred Tax Assets [Net] 261 339 255 160 168
Long Term Loans And Advances 453 396 404 352 162
Other Non-Current Assets 1,159.00 784 523 387 419
TOTAL NON-CURRENT ASSETS 7,694.00 6,491.00 6,010.00 5,386.00 4,368.00
CURRENT ASSETS
Current Investments 1,248.00 2,693.00 2,855.00 3,519.00 2,461.00
Inventories 2,636.00 2,422.00 2,359.00 2,362.00 2,528.00
Trade Receivables 1,046.00 1,673.00 1,147.00 928 1,064.00
Cash And Cash Equivalents 5,017.00 3,688.00 3,373.00 1,671.00 2,759.00
Short Term Loans And Advances 0 0 0 0 0
OtherCurrentAssets 1,961.00 898 1,405.00 885 740
TOTAL CURRENT ASSETS 11,908.00 11,374.00 11,139.00 9,365.00 9,530.00
TOTAL ASSETS 19,602.00 17,865.00 17,149.00 14,751.00 13,920.00
OTHER ADDITIONAL INFORMATION
CONTINGENT LIABILITIES, COMMITMENTS
Contingent Liabilities 2,809.00 2,009.00 1,699.00 1,241.00 1,158.00
CIF VALUE OF IMPORTS
Raw Materials 0 0 0 0 0
Stores, Spares And Loose Tools 0 0 0 0 0
Trade/Other Goods 0 0 0 0 0
Capital Goods 0 0 0 0 0
EXPENDITURE IN FOREIGN EXCHANGE
Expenditure In Foreign Currency 1,565.00 1,382.00 1,285.00 1,214.00 1,084.00
REMITTANCES IN FOREIGN CURRENCIES FOR DIVIDENDS
Dividend Remittance In Foreign Currency -- -- -- -- --
EARNINGS IN FOREIGN EXCHANGE
FOB Value Of Goods -- -- -- -- --
Other Earnings 283 324 387 541 559
BONUS DETAILS
Bonus Equity Share Capital 131.69 131.69 131.69 131.69 131.69
NON-CURRENT INVESTMENTS
Non-Current Investments Quoted Market Value -- -- -- -- --
Non-Current Investments Unquoted Book Value 2 2 2 6 319
CURRENT INVESTMENTS
Current Investments Quoted Market Value 1,248.00 2,693.00 2,855.00 3,519.00 1,265.00
Current Investments Unquoted Book Value 2 2 2 6 1,202.00
HUL Profit & Loss Statement

PROFIT & LOSS ACCOUNT OF HINDUSTAN UNILEVER (in Rs. Cr.) Mar-20 Mar-19 Mar-18 Mar-17 Mar-16
12 mths 12 mths 12 mths 12 mths 12 mths
INCOME
REVENUE FROM OPERATIONS [GROSS] 39,238.00 38,684.00 35,571.00 35,061.00 33,891.00
Less: Excise/Sevice Tax/Other Levies 0 0 693 2,597.00 2,430.00
REVENUE FROM OPERATIONS [NET] 39,238.00 38,684.00 34,878.00 32,464.00 31,461.00
TOTAL OPERATING REVENUES 39,783.00 39,310.00 35,545.00 33,162.00 32,186.00
Other Income 632 550 384 369 423
TOTAL REVENUE 40,415.00 39,860.00 35,929.00 33,531.00 32,609.00
EXPENSES
Cost Of Materials Consumed 11,976.00 13,707.00 12,927.00 11,946.00 11,812.00
Operating And Direct Expenses 0 0 0 0 0
Employee Benefit Expenses 1,820.00 1,875.00 1,860.00 1,743.00 1,680.00
Finance Costs 118 33 26 35 17
Depreciation And Amortisation Expenses 1,002.00 565 520 432 353
Other Expenses 9,843.00 10,081.00 9,456.00 8,766.00 8,619.00
TOTAL EXPENSES 31,042.00 31,028.00 28,592.00 27,289.00 26,536.00
PROFIT/LOSS BEFORE EXCEPTIONAL, EXTRAORDINARY ITEMS AND TAX 9,373.00 8,832.00 7,337.00 6,242.00 6,073.00
Exceptional Items -200 -228 -33 237 -31
PROFIT/LOSS BEFORE TAX 9,173.00 8,604.00 7,304.00 6,479.00 6,042.00
TAX EXPENSES-CONTINUED OPERATIONS
Current Tax 2,243.00 2,610.00 2,216.00 1,947.00 1,879.00
Less: MAT Credit Entitlement 0 0 0 0 0
Deferred Tax 166 -66 -137 30 -4
Other Direct Taxes 0 0 0 0 0
TOTAL TAX EXPENSES 2,409.00 2,544.00 2,079.00 1,977.00 1,875.00
PROFIT/LOSS AFTER TAX AND BEFORE EXTRAORDINARY ITEMS 6,764.00 6,060.00 5,225.00 4,502.00 4,167.00
PROFIT/LOSS FROM CONTINUING OPERATIONS 6,764.00 6,060.00 5,225.00 4,502.00 4,167.00
PROFIT/LOSS FOR THE PERIOD 6,756.00 6,060.00 5,227.00 4,490.00 4,160.00
Minority Interest -8 -6 -13 -14 -12
CONSOLIDATED PROFIT/LOSS AFTER MI AND ASSOCIATES 6,748.00 6,054.00 5,214.00 4,476.00 4,139.00
OTHER ADDITIONAL INFORMATION
EARNINGS PER SHARE
Basic EPS (Rs.) 31 28 24 21 19
Diluted EPS (Rs.) 31 28 24 21 19
DIVIDEND AND DIVIDEND PERCENTAGE
Equity Share Dividend 5,196.00 4,546.00 3,896.00 3,571.00 3,354.00
Tax On Dividend 1,061.00 928 781 718 673

HUL Cash Flow Statement

CASH FLOW OF HINDUSTAN UNILEVER (in Rs. Cr.) Mar-20 Mar-19 Mar-18 Mar-17 Mar-16
12 mths 12 mths 12 mths 12 mths 12 mths
NET PROFIT/LOSS BEFORE EXTRAORDINARY ITEMS AND TAX 9,092.00 8,522.00 7,347.00 6,155.00 5,977.00
Net CashFlow From Operating Activities 7,305.00 5,728.00 5,916.00 4,953.00 3,974.00
Net Cash Used In Investing Activities 1,926.00 -264 -1,264.00 -752 -51
Net Cash Used From Financing Activities -6,676.00 -5,462.00 -4,651.00 -4,264.00 -4,008.00
Foreign Exchange Gains / Losses 0 0 0 0 0
Adjustments On Amalgamation Merger Demerger Others 0 0 0 0 0
NET INC/DEC IN CASH AND CASH EQUIVALENTS 2,555.00 2 1 -63 -85
Cash And Cash Equivalents Begin of Year 575 573 572 635 720
Cash And Cash Equivalents End Of Year 3,130.00 575 573 572 635
ITC Balance Sheet

BALANCE SHEET OF ITC (in Rs. Cr.) Mar-20 Mar-19 Mar-18 Mar-17 Mar-16
12 mths 12 mths 12 mths 12 mths 12 mths
EQUITIES AND LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 1,229.22 1,225.86 1,220.43 1,214.74 804.72
TOTAL SHARE CAPITAL 1,229.22 1,225.86 1,220.43 1,214.74 804.72
Reserves and Surplus 60,777.76 54,725.99 50,179.64 44,126.22 32,071.87
TOTAL RESERVES AND SURPLUS 60,777.76 54,725.99 50,179.64 44,126.22 32,124.28
TOTAL SHAREHOLDERS FUNDS 64,029.16 57,949.79 51,400.07 45,340.96 32,929.00
NON-CURRENT LIABILITIES
Long Term Borrowings 5.63 7.89 11.13 17.99 25.83
Deferred Tax Liabilities [Net] 1,617.65 2,044.14 1,917.94 1,871.70 1,848.42
Other Long Term Liabilities 349.72 41.9 73.66 23.86 15.13
Long Term Provisions 143.79 132.64 121.91 131.37 112.19
TOTAL NON-CURRENT LIABILITIES 2,116.79 2,226.57 2,124.64 2,044.92 2,001.57
CURRENT LIABILITIES
Short Term Borrowings 0 0 0 0.01 3.6
Trade Payables 3,446.74 3,368.28 3,382.28 2,551.22 2,265.59
Other Current Liabilities 5,524.73 6,228.04 5,435.08 4,237.01 4,000.08
Short Term Provisions 117.94 25.24 39.24 41.83 8,318.59
TOTAL CURRENT LIABILITIES 9,089.41 9,621.56 8,856.60 6,830.07 14,587.86
TOTAL CAPITAL AND LIABILITIES 75,235.36 69,797.92 62,381.31 54,215.95 49,518.43
ASSETS
NON-CURRENT ASSETS
Tangible Assets 19,612.74 17,945.65 15,120.00 14,469.32 13,816.77
Intangible Assets 519.45 540.75 445.99 410.92 387.76
Capital Work-In-Progress 2,776.31 3,391.47 5,016.85 3,491.33 2,470.08
Other Assets 385.36 0 0 0 0
FIXED ASSETS 23,297.75 21,887.76 20,591.57 18,417.26 16,705.36
Non-Current Investments 13,455.59 14,071.45 13,493.77 8,485.51 6,392.90
Deferred Tax Assets [Net] 0 0 0 0 0
Long Term Loans And Advances 3.31 6.21 7.4 5.84 2,285.43
Other Non-Current Assets 1,971.80 4,263.54 3,785.57 2,769.95 0
TOTAL NON-CURRENT ASSETS 38,728.45 40,228.96 37,878.31 29,678.56 25,383.69
CURRENT ASSETS
Current Investments 17,175.02 12,506.55 9,903.45 10,099.78 6,461.34
Inventories 8,038.07 7,587.24 7,237.15 7,863.99 8,519.82
Trade Receivables 2,092.00 3,646.22 2,357.01 2,207.50 1,686.35
Cash And Cash Equivalents 6,843.27 3,768.73 2,594.88 2,747.27 6,563.95
Short Term Loans And Advances 4.87 5.02 4.15 3.37 501.84
OtherCurrentAssets 2,353.68 2,055.20 2,406.36 1,615.48 401.44
TOTAL CURRENT ASSETS 36,506.91 29,568.96 24,503.00 24,537.39 24,134.74
TOTAL ASSETS 75,235.36 69,797.92 62,381.31 54,215.95 49,518.43
OTHER ADDITIONAL INFORMATION
CONTINGENT LIABILITIES, COMMITMENTS
Contingent Liabilities 2,357.74 2,491.31 2,257.52 2,148.64 2,648.78
CIF VALUE OF IMPORTS
Raw Materials 1,503.00 1,947.00 1,506.00 0 1,247.18
Stores, Spares And Loose Tools 0 0 0 0 15.36
Trade/Other Goods 0 0 0 0 15.36
Capital Goods 382 426 532 0 211.25
EXPENDITURE IN FOREIGN EXCHANGE
Expenditure In Foreign Currency 0 0 0 0 136.35
REMITTANCES IN FOREIGN CURRENCIES FOR DIVIDENDS
Dividend Remittance In Foreign Currency -- -- -- -- 1,521.26
EARNINGS IN FOREIGN EXCHANGE
FOB Value Of Goods 3,506.00 3,828.00 3,480.00 -- 3,057.85
Other Earnings -- -- -- -- 585.89
BONUS DETAILS
Bonus Equity Share Capital 1,113.14 1,113.14 1,113.14 1,113.14 710.47
NON-CURRENT INVESTMENTS
Non-Current Investments Quoted Market Value 10,592.71 11,218.74 11,096.58 6,344.59 3,253.11
Non-Current Investments Unquoted Book Value 3,091.69 2,882.13 2,432.64 2,191.52 3,596.03
CURRENT INVESTMENTS
Current Investments Quoted Market Value 3,122.85 4,624.25 1,792.59 2,380.97 1,363.44
Current Investments Unquoted Book Value 14,061.11 7,885.76 8,111.65 7,723.02 5,098.40
ITC Profit and Loss Statement

PROFIT & LOSS ACCOUNT OF ITC (in Rs. Cr.) Mar-20 Mar-19 Mar-18 Mar-17 Mar-16
12 mths 12 mths 12 mths 12 mths 12 mths
INCOME
REVENUE FROM OPERATIONS [GROSS] 46,323.72 45,221.41 43,956.90 55,001.69 51,582.45
Less: Excise/Sevice Tax/Other Levies 1,187.64 788.74 3,702.23 15,359.78 15,107.18
REVENUE FROM OPERATIONS [NET] 45,136.08 44,432.67 40,254.67 39,641.91 36,475.27
TOTAL OPERATING REVENUES 45,619.70 44,995.65 40,627.54 40,088.68 36,837.39
Other Income 3,013.66 2,484.54 2,129.84 1,985.91 1,803.74
TOTAL REVENUE 48,633.36 47,480.19 42,757.38 42,074.59 38,641.13
EXPENSES
Cost Of Materials Consumed 13,121.76 13,184.97 11,756.21 11,765.56 11,054.75
Operating And Direct Expenses 0 0 0 0 0
Changes In Inventories Of FG,WIP And Stock-In Trade -176.34 -180.14 1,041.85 644.17 58.17
Employee Benefit Expenses 2,658.21 2,728.44 2,487.46 2,444.31 1,883.51
Finance Costs 55.72 34.19 86.65 22.95 49.13
Depreciation And Amortisation Expenses 1,563.27 1,311.70 1,145.37 1,038.04 1,034.45
Other Expenses 7,822.11 7,656.55 6,809.06 7,090.03 7,012.65
TOTAL EXPENSES 29,334.44 29,036.03 26,318.58 26,571.63 23,682.74
PROFIT/LOSS BEFORE EXCEPTIONAL, EXTRAORDINARY ITEMS AND TAX 19,298.92 18,444.16 16,438.80 15,502.96 14,958.39
Exceptional Items -132.11 0 412.9 0 0
PROFIT/LOSS BEFORE TAX 19,166.81 18,444.16 16,851.70 15,502.96 14,958.39
TAX EXPENSES-CONTINUED OPERATIONS
Current Tax 4,441.97 5,849.24 5,599.83 5,285.65 4,948.76
Less: MAT Credit Entitlement 0 0 0 0 0
Deferred Tax -411.21 130.6 28.62 16.41 166.47
Tax For Earlier Years 0 0 0 0 -1.55
TOTAL TAX EXPENSES 4,030.76 5,979.84 5,628.45 5,302.06 5,113.68
PROFIT/LOSS AFTER TAX AND BEFORE EXTRAORDINARY ITEMS 15,136.05 12,464.32 11,223.25 10,200.90 9,844.71
PROFIT/LOSS FROM CONTINUING OPERATIONS 15,136.05 12,464.32 11,223.25 10,200.90 9,844.71
PROFIT/LOSS FOR THE PERIOD 15,136.05 12,464.32 11,223.25 10,200.90 9,844.71
OTHER ADDITIONAL INFORMATION
EARNINGS PER SHARE
Basic EPS (Rs.) 12.33 10.19 9.22 8.43 12.26
Diluted EPS (Rs.) 12.31 10.13 9.16 8.38 12.2
VALUE OF IMPORTED AND INDIGENIOUS RAW MATERIALS STORES, SPARES AND LOOSE TOOLS
Imported Raw Materials 0 0 0 0 1,345.56
Indigenous Raw Materials 0 0 0 0 9,709.19
STORES, SPARES AND LOOSE TOOLS
Imported Stores And Spares 0 0 0 0 69.93
Indigenous Stores And Spares 0 0 0 0 178.52
DIVIDEND AND DIVIDEND PERCENTAGE
Equity Share Dividend 7,048.71 6,285.21 5,770.01 6,840.12 6,840.12
Tax On Dividend 1,373.52 1,201.69 1,110.24 1,333.52 1,392.48
Equity Dividend Rate (%) 1,015.00 575 515 475 850

ITC Cash Flow Statement

CASH FLOW OF ITC (in Rs. Cr.) Mar-20 Mar-19 Mar-18 Mar-17 Mar-16
12 mths 12 mths 12 mths 12 mths 12 mths
NET PROFIT/LOSS BEFORE EXTRAORDINARY ITEMS AND TAX 19,166.81 18,444.16 16,851.70 15,502.96 14,958.39
Net CashFlow From Operating Activities 13,806.18 11,749.05 12,650.85 10,002.02 9,251.35
Net Cash Used In Investing Activities -5,516.71 -5,081.75 -6,691.24 -2,780.33 -3,750.33
Net Cash Used From Financing Activities -7,890.87 -6,600.57 -6,019.85 -7,137.62 -5,461.52
Foreign Exchange Gains / Losses 0 0 0 0 0
Adjustments On Amalgamation Merger Demerger Others 0 0 0 0 0
NET INC/DEC IN CASH AND CASH EQUIVALENTS 398.6 66.73 -60.24 84.07 39.5
Cash And Cash Equivalents Begin of Year 162.75 96.02 156.26 72.19 36.29
Cash And Cash Equivalents End Of Year 561.35 162.75 96.02 156.26 75.79
P&G Balance Sheet

BALANCE SHEET OF PROCTER AND GAMBLE (in Rs. Cr.) Jun-20 Jun-19 Jun-18 Jun-17 Jun-16
12 mths 12 mths 12 mths 12 mths 12 mths
EQUITIES AND LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 32.46 32.46 32.46 32.46 32.46
TOTAL SHARE CAPITAL 32.46 32.46 32.46 32.46 32.46
Reserves and Surplus 1,125.40 876.6 773.04 493.66 1,478.75
TOTAL RESERVES AND SURPLUS 1,125.40 876.6 773.04 493.66 1,478.75
TOTAL SHAREHOLDERS FUNDS 1,157.86 909.06 805.5 526.12 1,511.21
NON-CURRENT LIABILITIES
Long Term Borrowings 0 0 0 0 0
Deferred Tax Liabilities [Net] 0 0 0 0 0
Other Long Term Liabilities 1.47 0 0 0 0
Long Term Provisions 74.02 65.5 48.73 51.69 3.57
TOTAL NON-CURRENT LIABILITIES 75.49 65.5 48.73 51.69 3.57
CURRENT LIABILITIES
Short Term Borrowings 0 0 0 0 0
Trade Payables 531.33 547.67 406.22 363.19 324.13
Other Current Liabilities 58.72 104.32 160.63 214.97 99.74
Short Term Provisions 5 5.36 4.27 4.15 225.95
TOTAL CURRENT LIABILITIES 595.05 657.35 571.12 582.31 649.82
TOTAL CAPITAL AND LIABILITIES 1,828.40 1,631.91 1,425.35 1,160.12 2,164.60
ASSETS
NON-CURRENT ASSETS
Tangible Assets 228.65 234.22 250.11 285.71 316.86
Intangible Assets 0 0 0 0 0
Capital Work-In-Progress 0 14.55 21.48 40.84 34.72
Other Assets 0 0 0 0 0
FIXED ASSETS 228.65 248.77 271.59 326.55 351.58
Non-Current Investments 0 0 0 0 0
Deferred Tax Assets [Net] 29.58 36.76 22.98 26.27 7.88
Long Term Loans And Advances 41.47 39.13 42.01 50.96 171.47
Other Non-Current Assets 200.31 216.65 207.27 153.21 0.12
TOTAL NON-CURRENT ASSETS 500.01 541.31 543.85 556.99 531.05
CURRENT ASSETS
Current Investments 0 0 0 0 0
Inventories 205.05 203.42 123.61 177.35 127.48
Trade Receivables 166.34 180.66 148.47 132.8 149.62
Cash And Cash Equivalents 902.5 540.45 399.59 116.83 1,074.87
Short Term Loans And Advances 6.32 101.27 99.4 97.6 217.79
OtherCurrentAssets 48.18 64.8 110.43 78.55 63.79
TOTAL CURRENT ASSETS 1,328.39 1,090.60 881.5 603.13 1,633.55
TOTAL ASSETS 1,828.40 1,631.91 1,425.35 1,160.12 2,164.60
OTHER ADDITIONAL INFORMATION
CONTINGENT LIABILITIES, COMMITMENTS
Contingent Liabilities 0 218.33 166.12 137.62 226.71
CIF VALUE OF IMPORTS
Raw Materials 0 0 0 0 209.68
Stores, Spares And Loose Tools 0 0 0 0 0
Trade/Other Goods 0 0 0 0 0
Capital Goods 0 0 0 0 25.91
EXPENDITURE IN FOREIGN EXCHANGE
Expenditure In Foreign Currency 0 753.21 559.99 467.77 184.16
REMITTANCES IN FOREIGN CURRENCIES FOR DIVIDENDS
Dividend Remittance In Foreign Currency -- -- -- -- 67.49
EARNINGS IN FOREIGN EXCHANGE
FOB Value Of Goods -- -- -- -- 8.83
Other Earnings -- 24.22 26.35 55.38 0.1
BONUS DETAILS
Bonus Equity Share Capital -- 23.54 23.54 23.54 23.54
P&G Profit & Loss Statement

PROFIT & LOSS ACCOUNT OF PROCTER AND GAMBLE HYGIENE AND

HEALTH CARE (in Rs. Cr.) Jun-20 Jun-19 Jun-18 Jun-17 Jun-16
12 mths 12 mths 12 mths 12 mths 12 mths
INCOME
REVENUE FROM OPERATIONS [GROSS] 3,001.99 2,942.48 2,455.22 2,418.56 2,552.72
Less: Excise/Sevice Tax/Other Levies 0 0 0 98.76 71.04
REVENUE FROM OPERATIONS [NET] 3,001.99 2,942.48 2,455.22 2,319.80 2,481.68
TOTAL OPERATING REVENUES 3,001.99 2,946.50 2,455.29 2,320.40 2,484.33
Other Income 44.11 53.34 24.07 77.3 87.61
TOTAL REVENUE 3,046.10 2,999.84 2,479.36 2,397.70 2,571.94
EXPENSES
Cost Of Materials Consumed 1,066.21 950.64 544.83 612.52 591.63
Operating And Direct Expenses 0 0 0 0 0
Changes In Inventories Of FG,WIP And Stock-In Trade -7.82 -37.73 61.64 -51.11 -10.71
Employee Benefit Expenses 173.29 132.38 115.23 114.1 118.56
Finance Costs 6.07 5.48 5.32 10.42 4.02
Depreciation And Amortisation Expenses 47.88 49.78 64.96 59.74 51.69
Other Expenses 1,100.32 970.01 763.39 626.7 846.71
TOTAL EXPENSES 2,452.23 2,392.51 1,897.59 1,725.93 1,935.40

PROFIT/LOSS BEFORE EXCEPTIONAL, EXTRAORDINARY ITEMS AND TAX 593.87 607.33 581.77 671.77 636.54
Exceptional Items 0 0 0 0 0
PROFIT/LOSS BEFORE TAX 593.87 607.33 581.77 671.77 636.54
TAX EXPENSES-CONTINUED OPERATIONS
Current Tax 160.79 221.85 206.46 252.26 216.36
Less: MAT Credit Entitlement 0 0 0 0 0
Deferred Tax 0 -10.19 6.85 -13.22 -3
Tax For Earlier Years 0 -23.46 -6.13 0 0
TOTAL TAX EXPENSES 160.79 188.2 207.18 239.04 213.36
PROFIT/LOSS AFTER TAX AND BEFORE EXTRAORDINARY ITEMS 433.08 419.13 374.59 432.73 423.18
PROFIT/LOSS FROM CONTINUING OPERATIONS 433.08 419.13 374.59 432.73 423.18
PROFIT/LOSS FOR THE PERIOD 433.08 419.13 374.59 432.73 423.18
OTHER ADDITIONAL INFORMATION
EARNINGS PER SHARE
Basic EPS (Rs.) 133.42 129.12 115.4 133.31 130.37
Diluted EPS (Rs.) 133.42 129.12 115.4 133.31 130.37
VALUE OF IMPORTED AND INDIGENIOUS RAW MATERIALS STORES,
SPARES AND LOOSE TOOLS
Imported Raw Materials 0 0 0 0 212.36
Indigenous Raw Materials 0 0 0 0 379.27
STORES, SPARES AND LOOSE TOOLS
Imported Stores And Spares 0 0 0 0 3.5
Indigenous Stores And Spares 0 0 0 0 4.36
DIVIDEND AND DIVIDEND PERCENTAGE
Equity Share Dividend 0 259.68 87.64 1,291.94 116.86
Tax On Dividend 0 53.4 17.84 263.04 23.79
Equity Dividend Rate (%) 1,050.00 880 400 3,890.00 360

P&G Cash Flow Statement

CASH FLOW OF PROCTER AND GAMBLE

HYGIENE AND HEALTH CARE (in Rs. Cr.) Jun-19 Jun-18 Jun-17 Jun-16
12 mths 12 mths 12 mths 12 mths
NET PROFIT/LOSS BEFORE EXTRAORDINARY
ITEMS AND TAX 607.33 581.77 671.77 636.54
Net CashFlow From Operating Activities 411.83 415.47 445.26 353.32
Net Cash Used In Investing Activities 35.46 -19.46 149.29 224.46
Net Cash Used From Financing Activities -313.74 -106.1 -1,558.70 -121.7
Foreign Exchange Gains / Losses 0 0 0 0
Adjustments On Amalgamation Merger Demerger
Others 0 0 0 0
NET INC/DEC IN CASH AND CASH EQUIVALENTS 133.55 289.91 -964.15 456.08
Cash And Cash Equivalents Begin of Year 392.35 102.44 1,066.59 615.05
Cash And Cash Equivalents End Of Year 525.9 392.35 102.44 1,071.13
 Ratio Analysis

1. Gross Profit Margin = (Gross Profit) / (Net Sales)

Gross Profit Margin is a key metric to assess the efficiency of production and sales of the
organization. It indicates the ability of an organization to widen the gap between sales and the
costs involved in it.

Gross Profit Margin March 2020 March 2019 March 2018 March 2017 March 2016

HUL 26.64 24.33 22.72 20.61 20.32

ITC 45.85 43.98 43.49 41.31 43.54

P&G 21.57 22.48 26.55 31.97 27.86

P&G has been observing constant decrease in the value, whereas HUL has been continuously
increasing year on year. ITC has been enjoying a constant rate much higher compared to the
other two organizations, this could be due to the variety of products that ITC is dealing with.
2. Net Profit Margin = (Net Profit) / (Net Sales)

Net Profit margin is the percentage of revenue left after all expenses have been deducted
from sales. The expenses can be the interest on investments, dividends and operating
expenses like administrative expenses, selling and distributing expenses. The measurement
reveals the amount of profit that a business can extract from its total sales.

Net Profit Margin March 2020 March 2019 March 2018 March 2017 March 2016

HUL 17.37 15.79 15.16 14.07 13.31

ITC 33.17 27.7 27.62 25.44 26.72

P&G 14.42 14.22 15.25 18.64 17.03

This index also shows a similar trend to the gross profit margin. It indicates that the expenses
involved are more less the same for all the three organizations. The latest year shows
promising increase in Net Profit Margin for ITC, this could mean that they were able to cut
down their expenses.
3. Asset Turnover Ratio = (Net Sales) / (Average Current Assets)

Asset turnover ratio gives us the measure of how well the assets of the organization are
utilized. Higher ratio indicates that the assets procured by the company are meeting its
intended objectives.

Asset Turnover March March March March March

Ratio 2020 2019 2018 2017 2016

HUL 197.86 213.96 201.32 216.18 223.13

ITC 60.63 64.46 65.12 73.94 74.39

P&G 164.18 180.55 172.25 200.01 114.77

The Asset Turnover Ratio establishes the relationship between Current Assets and Net Sales.
Higher ratio means more efficient usage of resources generated by the company. The asset
turnover ratio of HUL is highest, followed by P&G and then ITC. All three companies are
witnessing a decline in the ratio over time with no major deviations from the trend. This
means that there is a decrease in efficiency of resources over time, or that sales have dropped
slightly while resource generation has been constant.
4. Return on Assets = (Net Profit) / (Average Current Assets)

Return on Assets ratio measures how well the company has been able to generate profits
using the assets that it holds.

Return on Assets March 2020 March 2019 March 2018 March 2017 March 2016

HUL 34.37 33.78 30.53 30.43 29.71

ITC 20.11 17.85 17.99 18.81 19.88

P&G 23.68 25.68 26.28 37.3 19.55

The return on assets for ITC has been slightly decreasing from 2016 to 2019 but they were
able to catch up to previous results by 2020. HUL has been maintaining a higher value and is
constantly improving the efficiency in generating profits from the assets that it holds. P&G
has observed a lot of fluctuation in this metric, but the last few years shows gradual decrease.
It seems that the organization was able to convert a lot of profit in the year 2017.
5. Current Ratio = (Current Assets) / (Current Liabilities)

Current Ratio also referred to as working capital ratio assesses the short term liquidity of an
organization. A higher value of current ratio is an indication that the organization is capable
of paying its current liabilities out of current assets and its liquidity position is good. At the
same time if the value is excessively large it may also mean that the company is investing on
assets a lot more than required.

Current Ratio March 2020 March 2019 March 2018 March 2017 March 2016

HUL 1.31 1.36 1.29 1.3 1.43

ITC 4.02 3.07 2.77 3.59 1.65

P&G 2.23 1.66 1.54 1.04 2.51

All three organizations have been able to keep the metric above 1 throughout the past 5 years.
A 2:1 ratio is considered ideal for this metric, which P&G has been able to achieve by 2020.
HUL has been maintaining a constant ratio between 1 to 2 for the past 5 years. ITC is having
relatively higher value which may indicate that the company is making investments more
than what is actually required.
6. Quick Ratio = (Current Assets - (Inventory - Prepaid exp)) / (Current Liability)

Quick ratio is very much like the current ratio, but with this metric we evaluate the capability
of a company to pay the current liabilities through the liquid assets that it holds. Liquid assets
mean those assets which are immediately convertible into cash without much loss.

Quick Ratio March 2020 March 2019 March 2018 March 2017 March 2016

HUL 1.02 1.07 1.02 0.97 1.05

ITC 3.13 2.28 1.95 2.44 1.07

P&G 1.89 1.35 1.33 0.73 2.32

Quick Ratio or the Acid Test Ratio is used to assess short-term solvency of the enterprise. As
a rule of thumb, Ideal Quick Ratio is 1:1. A quick ratio more than 1 indicates that the
company has the ability to meet its short term liabilities. In the above comparison, we can see
that all three companies have quick ratios higher than one, with ITC being the highest. This
means that ITC has either/ or or a combination of very low obligations or inventory, or high
current assets.
7. Inventory Turnover Ratio = (Cost of Goods Sold) / (Average Inventory)

Inventory Turnover Ratio is extensively used to evaluate the efficiency of inventory

management of an organization. This ratio is also a measure of liquidity which depicts the
rate at which inventories are converted to sales and in turn cash. A lower value for this ratio
indicates that there is a lot of unutilized inventory lying in the warehouse or low sales of the
goods produced.

Inventory Turnover March March March March March

Ratio 2020 2019 2018 2017 2016

HUL 14.71 15.78 14.64 13.5 12.29

ITC 5.68 5.93 5.61 5.1 4.32

P&G 14.64 14.48 19.86 13.08 19.49

The ratio for HUL and ITC has been almost constant for HUL and ITC, but HUL is having
relatively higher value compared to ITC. This indicates that HUL has been able to utilize the
inventory to convert to final goods. P&G has also kept a higher value similar to HUL but has
been observing high fluctuations except for the latest year.
8. Earnings per share = (Net Income) / (No. of Outstanding Shares)

Earnings per share ratio gives a measure of the net income earned for each share outstanding.
This index is a measure of profitability for the shareholders of the firm.

Earnings per Share March 2020 March 2019 March 2018 March 2017 March 2016

HUL 31.13 27.89 24.2 20.75 19.12

ITC 12.33 10.19 9.22 8.43 12.26

P&G 133.42 129.12 115.4 133.31 130.37

P&G has significantly higher EPS compared to ITC and HUL, with ITC being the least. This
means that P&G shareholders have received the highest dividend payout from their
shareholding. Analyzing this ratio in combination with profitability, we understand that this
could be because HUL uses higher debt to generate its profits.
9. Return on Equity = (Net Income) / (Shareholder Equity)

Returns on Equity ratio helps us to draw a relation between the net profits available to the
shareholders of the company with the capital that they have invested in the organization. This
metric is extremely important for the prospective shareholders as it evaluates the market
equity of the firm and also indicates how well the funds are managed.

Return on Equity March 2020 March 2019 March 2018 March 2017 March 2016

HUL 83.89 78.8 74.02 69.18 65.88

ITC 23.63 21.5 21.83 22.49 29.94

P&G 37.4 46.1 46.5 82.24 28

The RoE for HUL is observing constant increase and is at a much higher value compared to
its competitors. This shows a very promising result for any prospective shareholder to invest
in the organization. Even though P&G has better values than ITC, it has been facing massive
decrease from 2017 onwards. ITC is showing gradual signs of improvement in the latest
years, otherwise the results have been mostly constant for the company.