Following is a snippet from cash flow statement of Hindustan Unilever Ltd.

1. (a) In the above statement, why is interest income being deducted from profit?
2. (b) Why is profit earned during the year not equal to operating cash earned during year (in

general)?

3. (c) Which category of activities (operating, financing or investing) will include dividend income

and interest expense? Why?

Year ended 31st March, 2014 4,799.71 CASH FLOW FROM OPERATING ACTIVITIES: Profit before exceptional items and tax Adjustments for Depreciation and amortisation expenses Net gain on sale of investments Deficit on fixed assets sold, scrapped, etc. Inet) Interest income Dividend income Provision for expenses on employee stock options/ performance share schemes Provision for diminution in the value of non-current investments Provision/lwrite back) for doubtful debts and advances Inet) Bad debts/advances written off Provision for Mark to Market loss on derivative instruments Interest expense 260.55 1259.081 12.25 1258.021 (103.931 7.00 13.46 (18.351 22.11 17.33 36.03 1270.651 4.529.06 Operating profit before working capital changes