Care that inspires innovation
210
Annexure II to the Independent Auditor’s Report of even date to the members of Cipla Limited on the standalone
financial statements for the year ended 31 st March, 2022
Annexure II
Independent Auditor’s Report on the Internal
Financial Controls under Clause (i) of sub-section 3
of Section 143 of the Companies Act, 2013 (‘the Act’)
1. In conjunction with our audit of the standalone financial
statements of Cipla Limited (‘the Company’) as at and
for the year ended 31 st March, 2022, we have audited
the internal financial controls with reference to financial
statements of the Company as at that date.
Responsibilities of Management and Those Charged
with Governance for Internal Financial Controls
2. The Company’s Board of Directors is responsible for
establishing and maintaining internal financial controls
based on internal control financial reporting criteria
established by the Company considering the essential
components of internal control stated in the guidance
note on audit of Internal Financial Control over Financial
Reporting (“the Guidance Note”) issued by the Institute
of Chartered Accountants of India (“ICAI”). These
responsibilities include the design, implementation and
maintenance of adequate internal financial controls that
were operating effectively for ensuring the orderly and
efficient conduct of the Company’s business, including
adherence to the Company’s policies, the safeguarding
of its assets, the prevention and detection of frauds and
errors, the accuracy and completeness of the accounting
records, and the timely preparation of reliable financial
information, as required under the Act.
Auditor’s Responsibility for the Audit of the
Internal Financial Controls with Reference to
Financial Statements
3. Our responsibility is to express an opinion on the Company's
internal financial controls with reference to financial
statements based on our audit. We conducted our audit in
accordance with the Standards on Auditing issued by the
ICAI prescribed under Section 143(10) of the Act, to the
extent applicable to an audit of internal financial controls
with reference to financial statements, and the Guidance
Note issued by the ICAI. Those Standards and the Guidance
Note require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance
about whether adequate internal financial controls with
reference to financial statements were established and
maintained and if such controls operated effectively in all
material respects.
Cipla Limited | Annual Report 2021-22
4. Our audit involves performing procedures to obtain audit
evidence about the adequacy of the internal financial
controls with reference to financial statements and their
operating effectiveness. Our audit of internal financial
controls with reference to financial statements includes
obtaining an understanding of such internal financial
controls, assessing the risk that a material weakness exists,
and testing and evaluating the design and operating
effectiveness of internal control based on the assessed
risk. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material
misstatement of the financial statements, whether due to
fraud or error.
5. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit
opinion on the Company’s internal financial controls with
reference to financial statements.
Meaning of Internal Financial Controls with
Reference to Financial Statements
6. A company's internal financial controls with reference
to financial statements is a process designed to provide
reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for
external purposes in accordance with generally accepted
accounting principles. A company's internal financial
controls with reference to financial statements include those
policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance
that transactions are recorded as necessary to permit
preparation of financial statements in accordance with
generally accepted accounting principles, and that
receipts and expenditures of the company are being made
only in accordance with authorisations of management
and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection
of unauthorised acquisition, use, or disposition of the
company's assets that could have a material effect on the
financial statements.
Inherent Limitations of Internal Financial Controls
with Reference to Financial Statements
7. Because of the inherent limitations of internal financial
controls with reference to financial statements, including the
 Corporate Overview & Integrated Report Statutory Reports Financial Statements

211

Annexure II to the Independent Auditor’s Report of even date to the members of Cipla Limited on the standalone
financial statements for the year ended 31 st March, 2022

Annexure II
possibility of collusion or improper management override
of controls, material misstatements due to error or fraud
may occur and not be detected. Also, projections of any
evaluation of the internal financial controls with reference
to financial statements to future periods are subject to the
risk that the internal financial controls with reference to
financial statements may become inadequate because of
changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
considering the essential components of internal control
stated in the Guidance Note on audit of Internal Financial
Control over Financial Reporting issued by the ICAI.
For Walker Chandiok & Co LLP
Chartered Accountants
Firm’s Registration No.: 001076N/N500013

Ashish Gupta
Opinion Partner
Membership No.: 504662
8. In our opinion, the Company has, in all material respects,
adequate internal financial controls with reference to UDIN: 22504662AISJDR8526
financial statements and such controls were operating
effectively as at 31st March, 2022, based on internal control Place: Mumbai
over financial reporting criteria established by the Company Date: 10 th May, 2022
Care that inspires innovation Cipla Limited | Annual Report 2021-22
212

Standalone Balance Sheet

as at 31 st March, 2022
H in crores
As at As at
Particulars Notes
31 st March, 2022 31 st March, 2021
Assets
1. Non-current assets
(a) Property, plant and equipment 2.1 3,049.56 3,569.27
(b) Right-of-use assets 2.2 62.17 103.88
(c) Capital work-in-progress 2.4 169.22 275.04
(d) Investment properties 3 63.35 123.79
(e) Intangible assets 4 215.96 269.51
(f) Intangible assets under development 4 44.62 80.07
(g) Financial assets
(i) Investments 5 8,934.88 7,720.99
(ii) Other financial assets 6 368.88 83.57
(h) Income tax assets (net) 7 377.12 401.31
(i) Other non-current assets 8 138.66 144.13
Total non-current assets 13,424.42 12,771.56
2. Current assets
(a) Inventories 9 3,199.05 3,085.81
(b) Financial assets
(i) Investments 10 2,038.80 2,004.84
(ii) Trade receivables 11 1,939.62 3,035.37
(iii) Cash and cash equivalents 12 177.29 294.72
(iv) Bank balances other than cash and cash equivalents 13 1,250.74 580.08
(v) Loans 14 0.89 0.96
(vi) Other financial assets 15 856.63 475.04
(c) Other current assets 16 674.13 713.93
Total current assets 10,137.15 10,190.75
3. Assets classified as held for sale/transfer 2.3 & 36 1,887.48 1.43
Total assets 25,449.05 22,963.74
Equity and liabilities
1. Equity
(a) Equity share capital 17 161.36 161.29
(b) Other equity 18 22,352.19 19,766.27
Total equity 22,513.55 19,927.56
2. Liabilities
Non-current liabilities
(a) Financial liabilities
(i) Lease liabilities 2.2 11.59 29.46
(ii) Other financial liabilities 19 53.13 56.01
(b) Provisions 20 78.92 95.97
(c) Deferred tax liabilities (net) 7 55.96 104.91
(d) Other non-current liabilities 21 7.34 57.89
Total non-current liabilities 206.94 344.24
Current liabilities
(a) Financial liabilities
(i) Lease liabilities 2.2 7.33 22.66
(ii) Trade payables 22
- Total outstanding dues of micro enterprises and small enterprises 146.52 49.17
- Total outstanding dues of creditors other than micro enterprises and
small enterprises 1,232.41 1,446.32
(iii) Other financial liabilities 23 186.16 236.15
(b) Other current liabilities 24 201.28 312.51
(c) Provisions 20 630.79 620.56
(d) Income tax liabilities (net) 7 - 4.57
Total current liabilities 2,404.49 2,691.94
3. Liabilities directly associated with assets classified as held for sale/transfer 36 324.07 -
Total liabilities 2,935.50 3,036.18
Total equity and liabilities 25,449.05 22,963.74
The accompanying notes form an integral part of these standalone financial 1-52
statements.

As per our report of even date attached For and on behalf of the Board of Directors

For Walker Chandiok & Co LLP

Chartered Accountants Umang Vohra Samina Hamied
Firm Reg. No.: 001076N/N500013 Managing Director and Executive
Global Chief Executive Officer Vice-Chairperson
DIN: 02296740 DIN: 00027923

Ashish Gupta Dinesh Jain Rajendra Chopra

Partner Interim Global Chief Financial Officer Company Secretary
Membership No.: 504662
Mumbai, 10 th May, 2022 Mumbai, 10 th May, 2022
 Corporate Overview & Integrated Report Statutory Reports Financial Statements

213

Standalone Statement of Profit and Loss

for the year ended 31 st March, 2022
H in crores

For the year ended For the year ended

Particulars Notes
31 st March, 2022 31 st March, 2021

A. Continuing Operations :
1. Revenue from operations
a) Revenue from sale of products 25 12,827.29 11,060.17
b) Other operating revenue 26 264.50 242.54
Total revenue from operations 13,091.79 11,302.71
2. Other income 27 666.70 230.28
3. Total income (1+2) 13,758.49 11,532.99
4. Expenses
(a) Cost of materials consumed 28 2,767.79 2,249.35
(b) Purchases of stock-in-trade 29 2,850.85 1,847.85
(c) Changes in inventories of finished goods, work-in-progress and stock-in-trade 30 (528.40) 6.41
(d) Employee benefits expense 31 1,729.16 1,703.58
(e) Finance costs 32 26.93 45.07
(f) Depreciation, impairment and amortisation expense 33 460.01 468.62
(g) Other expenses 34 2,905.92 2,428.11
Total expenses 10,212.26 8,748.99
5. Profit before tax from continuing operations (3-4) 3,546.23 2,784.00
6. Tax expense (net) 7
(a) Current tax 887.24 756.27
(b) Deferred tax (30.40) (16.92)
Total tax expense 856.84 739.35
7. Profit for the year from continuing operations (5-6) 2,689.39 2,044.65
B. Discontinuing/Restructuring Operations: 36
8. Profit before tax 358.85 566.66
9. Tax expense 7 90.31 143.03
10. Profit for the year from discontinuing/restructuring operations (8-9) 268.54 423.63
11. Profit for the year (7+10) 2,957.93 2,468.28
12. Other comprehensive income/(loss) for the year
I. In respect of continuing operations:
a) (i) Items that will not be reclassified to profit or loss 16.78 17.56
(ii) Income tax relating to these items (4.22) (4.42)
b) (i) Items that will be reclassified to profit or loss (9.38) 37.08
(ii) Income tax relating to these items 2.37 (9.33)
Sub-total (I) 5.55 40.89
II. In respect of Discontinuing/Restructuring operations: 36
(i) Items that will not be reclassified to profit or loss 0.73 0.76
(ii) Income tax relating to these items (0.18) (0.19)
Sub-total (II) 0.55 0.57
Other comprehensive income for the year (I+II) 6.10 41.46
13. Total comprehensive income for the year (11+12) 2,964.03 2,509.74
14. Earnings per equity share from continuing operations of face value of J 2 each 47
Basic (in H) 33.34 25.36
Diluted (in H) 33.30 25.32
15. Earnings per equity share from Discontinuing/Restructuring operations of face
value of J 2 each
Basic (in H) 3.33 5.25
Diluted (in H) 3.33 5.25
16. Earnings per equity share from total operations of face value of J 2 each
Basic (in H) 36.67 30.61
Diluted (in H) 36.63 30.57
The accompanying notes form an integral part of these standalone financial 1-52
statements.

As per our report of even date attached For and on behalf of the Board of Directors

For Walker Chandiok & Co LLP

Chartered Accountants Umang Vohra Samina Hamied
Firm Reg. No.: 001076N/N500013 Managing Director and Executive
Global Chief Executive Officer Vice-Chairperson
DIN: 02296740 DIN: 00027923

Ashish Gupta Dinesh Jain Rajendra Chopra

Partner Interim Global Chief Financial Officer Company Secretary
Membership No.: 504662
Mumbai, 10 th May, 2022 Mumbai, 10 th May, 2022
Care that inspires innovation Cipla Limited | Annual Report 2021-22
214

Standalone Statement of Changes in Equity

for the year ended 31 st March, 2022

(a) Equity share capital (refer note 17)

H in crores
As at As at
Particulars
31 st March, 2022 31 st March, 2021
Balance at the beginning of the year 161.29 161.25
Changes in equity share capital during the year on exercise of employee stock
options (ESOSs) 0.07 0.04
Balance at the end of the year 161.36 161.29

(b) Other equity (refer note 18)

H in crores
Attributable to the owners of the Company
Items of other
Reserves and surplus
comprehensive income
Other
Particulars
Investments Cash equity
Securities
Capital General Employee stock Retained through other flow
premium
reserve reserve options/ESAR earnings comprehensive hedge
reserve
income reserve

Balance as at 1 st April, 2020 0.08 1,602.03 3,142.62 34.17 12,479.72 - (16.91) 17,241.71
Profit for the year for continuing and
discontinuing operations - - - - 2,468.28 - - 2,468.28
Other comprehensive income/(loss) (net
of tax) for continuing and discontinuing
operations - - - - 13.71 - 27.75 41.46
Exercise of employee stock options - 11.28 2.02 (13.30) - - - -
Share based payments expense
(refer note 40) - - - 14.82 - - - 14.82
Balance as at 31 st March, 2021 0.08 1,613.31 3,144.64 35.69 14,961.71 - 10.84 19,766.27
Profit for the year for continuing and
discontinuing operations - - - - 2,957.93 - - 2,957.93
Other comprehensive income/(loss) (net
of tax) for continuing and discontinuing
operations - - - - 12.93 0.18 (7.01) 6.10
Payment of dividend (refer note 46) - - - - (403.35) - - (403.35)
Refund of excess Dividend Distribution Tax
(DDT) paid in earlier years - - - - 5.55 - - 5.55
Exercise of employee stock options - 18.38 - (18.38) - - - -
Transfer to general reserve - - 0.16 (0.16) - - - -
Share based payments expense
(refer note 40) - - - 19.69 - - - 19.69
Balance as at 31 st March, 2022 0.08 1,631.69 3,144.80 36.84 17,534.77 0.18 3.83 22,352.19

The accompanying notes form an integral part of these standalone financial statements (note 1-52).

As per our report of even date attached For and on behalf of the Board of Directors

For Walker Chandiok & Co LLP

Chartered Accountants Umang Vohra Samina Hamied
Firm Reg. No.: 001076N/N500013 Managing Director and Executive
Global Chief Executive Officer Vice-Chairperson
DIN: 02296740 DIN: 00027923

Ashish Gupta Dinesh Jain Rajendra Chopra

Partner Interim Global Chief Financial Officer Company Secretary
Membership No.: 504662
Mumbai, 10 th May, 2022 Mumbai, 10 th May, 2022
 Corporate Overview & Integrated Report Statutory Reports Financial Statements

215

Standalone Statement of Cash Flows

for the year ended 31 st March, 2022
H in crores
For the year ended For the year ended
Particulars
31st March, 2022 31st March, 2021
Cash flow from operating activities
Profit before tax from:
Continuing operations 3,546.23 2,784.00
Discontinuing/Restructuring operations (refer note 36) 358.85 566.66
Adjustments for:
Depreciation, impairment and amortisation expense 546.62 556.11
Interest expense 26.93 45.07
Unrealised foreign exchange (gain)/loss (net) (1.45) (20.58)
Share based payment expense 19.68 14.78
Allowances for credit loss (net) 14.19 19.65
Provision for diminution in value of investments - 10.88
Interest income (57.25) (36.42)
Interest income on income tax refund (15.64) -
Dividend income (403.32) -
Sundry balance written off/back (net) 24.05 8.10
Net gain on sale of current investments carried at fair value through profit or
loss (64.00) (47.67)
Fair value loss/(gain) on financial instruments at fair value through profit or
loss (3.23) (10.12)
Net (gain)/loss on sale/disposal of property, plant and equipment (0.72) (3.48)
Rent income (12.60) (15.91)
Operating profit before working capital changes 3,978.34 3,871.07
Adjustments for working capital:
Increase in inventories (433.56) (64.45)
Decrease in trade and other receivables 225.70 519.50
(Decrease)/Increase in trade payables and other liabilities (63.02) 86.14
Cash generated from operations 3,707.46 4,412.26
Income taxes paid (net of refunds) (934.03) (951.95)
Net cash flow generated from operating activities (a) 2,773.43 3,460.31
Cash flow from investing activities
Purchase of property, plant and equipment {refer note (ii) below} (305.04) (370.46)
Purchase of intangible assets (including intangible asset under development) (26.64) (146.51)
Proceeds from sale of property, plant and equipment {refer note (ii) below} 11.18 12.33
Investments in associates (15.43) (9.00)
Purchase of non-current investments - (40.00)
Investment in subsidiaries (1,173.43) (1,360.21)
(Purchase)/Sale of current investments (net) 33.27 (1,112.61)
Change in other bank balance and cash not available for immediate use (1,444.21) (388.48)
Interest received 40.65 38.58
Dividend received from subsidiaries 403.32 -
Rent received 12.60 15.91
Net cash flow used in investing activities (b) (2,463.73) (3,360.45)
Care that inspires innovation Cipla Limited | Annual Report 2021-22
216

Standalone Statement of Cash Flows

for the year ended 31 st March, 2022
H in crores
For the year ended For the year ended
Particulars
31st March, 2022 31st March, 2021
Cash flow from financing activities
Proceeds from issue of equity shares (ESOSs) 0.07 0.05
Repayment from current borrowings (net) - (6.06)
Interest paid (3.84) (34.01)
Payment of lease liabilities (19.60) (25.78)
Dividend paid (403.35) -
Net cash flow used in financing activities (c) (426.72) (65.80)
Net (decrease)/increase in cash and cash equivalents (a+b+c) (117.02) 34.06
Cash and cash equivalents at the beginning of the year 294.72 261.54
Exchange difference on translation of foreign currency cash and cash
equivalents (0.41) (0.88)
Cash and cash equivalents at the end of the year (refer note 12) 177.29 294.72

The accompanying notes form an integral part of these standalone financial statements (note 1-52).
Note:
i. The above statement of cash flow has been prepared under the 'Indirect method' as set out in Indian Accounting Standard (Ind AS) 7 - Statement of Cash
Flows.

ii. Purchase and sale of property, plant and equipment represents additions and deletions to property, plant and equipment and investment properties
adjusted for movement of capital work in progress, capital advances, capital creditors during the year.

Net debt movement

H in crores
For the year ended For the year ended
Particulars
31st March, 2022 31st March, 2021
Opening balance - 6.06
Add: Proceeds - 625.92
Less: Repayment - (631.98)
Foreign exchange movement - -
Closing balance - -

As per our report of even date attached For and on behalf of the Board of Directors

For Walker Chandiok & Co LLP

Chartered Accountants Umang Vohra Samina Hamied
Firm Reg. No.: 001076N/N500013 Managing Director and Executive
Global Chief Executive Officer Vice-Chairperson
DIN: 02296740 DIN: 00027923

Ashish Gupta Dinesh Jain Rajendra Chopra

Partner Interim Global Chief Financial Officer Company Secretary
Membership No.: 504662
Mumbai, 10 th May, 2022 Mumbai, 10 th May, 2022