Hindustan Unilever Limited (HUL), incorporated in 1933, is a part of the Unilever Group. The company is present in various segments including home and personal care, food and beverages, and water. The Company used to prepare and present its financial statements on a calendar year (January–December) basis. After presenting its accounts for the calendar year 2007, the company decided to change its accounting period to financial year (April–March). The change in accounting year was done ‘to avoid duplication in preparation and audit of accounts under the companies and Income Tax Acts. This change simplifies the process, thereby saving cost and time.’ As a result, the first annual accounts of the company after the change of accounting period were presented for a period of 15 months, from 1st January 2008 to 31st March 2009. The summarized profit and loss account for the two accounting period is given below: 

Questions for Discussion 

1. How do you justify the change in accounting period by HUL? 

2. The company has an exceptional year with total income increasing by 48% and PAT (before exceptional items) increasing by 43% over the previous year. Do you agree? 

3. How would you make the results of current accounting year comparable with the previous accounting year?

Transcribed Image Text:

Particulars Net sales Other operational income Total Operating costs and expenses Depreciation Interest income (Net) Profit before tax Taxation Profit after tax (before exceptional items) Exceptional items (Net of tax) Net profit Basic EPS (£) (in Lakh) (Except EPS) 15 Months Period Ended 31st March 2009 20239,33 362,23 20601,56 (17561,37) (195,30) 180,23 3025,12 (524,41) 2500,71 (426) 2496,45 11.46 12 Months Period Ended 31st December 2007 13675,43 193,66 13869,09 (11796,77) (138,36) 212,37 2146,33 (403,21) 1743,12 182,35 1925,47 8.73