Cipla : Unaudited financial results (standalone and consolidated) for the quarter and nine months ended 31st December 2021

25th January, 2022
(1) BSE Limited	(2) National Stock Exchange of India Limited
Listing Department,	Listing Department
Phiroze Jeejeebhoy Towers,	Exchange Plaza, 5th floor,
Dalal Street,	Plot no. C/1, G Block,
Mumbai 400 001	Bandra Kurla Complex,
	Bandra (East), Mumbai - 400 051
Scrip Code: 500087	Scrip Code: CIPLA

1. SOCIETE DE LA BOURSE DE LUXEMBOURG Societe Anonyme
   35A Boulevard Joseph II, L-1840 Luxembourg

Sub: Unaudited financial results (standalone and consolidated) for the quarter and nine months ended 31st December, 2021

Dear Sir/ Madam,

Pursuant to Regulation 30 and 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, we hereby submit the following:

1. Unaudited financial results (standalone and consolidated) as per Indian Accounting Standards for the quarter and nine months ended 31st December, 2021 as approved by the Board at its meeting held on 25th January, 2022;
2. Limited review report (standalone and consolidated) by Walker Chandiok & Co LLP, Statutory Auditor of the Company, for the quarter and nine months ended 31st December, 2021.

The meeting of the Board of Directors of the Company commenced at 02.30 p.m. (IST) and is still in progress.

The above mentioned documents will also be available on the Company's website www.cipla.comin the Investor Section.

Thanking you,

Yours faithfully,

For Cipla Limited

RAJENDRA KUMAR CHOPRA

Digitally signed by

RAJENDRA KUMAR CHOPRA

Date: 2022.01.25 17:32:25 +05'30'

Rajendra Chopra

Company Secretary

Encl: as above

Prepared by: Chirag Hotchandani

Cipla Ltd.

Regd. Office - Cipla House, Peninsula Business Park, Ganpatrao Kadam Marg, Lower Parel, Mumbai-400 013, India

P [phone] F [phone] Wwww.cipla.com [e-mail] Identity Number L24239MH1935PLC002380

STATEMENT OF UNAUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED 31ST DECEMBER, 2021

							( ₹ in Crores)
			Quarter ended		Nine months ended	Year ended
Particulars	31-12-2021	30-09-2021	31-12-2020	31-12-2021	31-12-2020	31-03-2021
		Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Audited
1.	Revenue from operations
	a) Revenue from sale of products	5,442.86	5,485.84	5,154.17	16,399.42	14,403.64	18,988.52
	b) Other operating revenue	36.00	33.96	14.52	103.59	149.50	171.07
	Total revenue from operations	5,478.86	5,519.80	5,168.69	16,503.01	14,553.14	19,159.59
2.	Other income	91.29	60.67	86.94	216.89	205.86	265.99
3.	Total income (1+2)	5,570.15	5,580.47	5,255.63	16,719.90	14,759.00	19,425.58
4.	Expenses
	a) Cost of materials consumed	1,524.76	1,382.71	1,353.34	4,321.21	3,707.85	4,886.43
	b) Purchases of stock-in-trade	716.63	875.51	604.50	2,940.12	2,127.31	2,658.17
	c) Changes in inventories of finished goods,	(98.02)	(121.53)	35.64	(912.43)	(305.69)	(192.71)
	work-in-progress and stock-in-trade
	d) Employee benefits expense	872.43	877.78	844.36	2,637.50	2,437.11	3,251.83
	e) Finance costs	20.68	38.00	47.92	88.25	133.25	160.70
	f) Depreciation, impairment and amortisation expense	247.47	253.06	248.43	761.64	782.47	1,067.66
	g) Other expenses	1,232.09	1,279.13	1,099.97	3,713.55	3,130.37	4,303.44
	Total expenses	4,516.04	4,584.66	4,234.16	13,549.84	12,012.67	16,135.52
5. Profit (+)/loss (-) before exceptional items and tax (3-4)	1,054.11	995.81	1,021.47	3,170.06	2,746.33	3,290.06
6. Exceptional item	-	-	-	(124.62)	-	-
7. Profit (+)/loss (-) before tax (5-6)	1,054.11	995.81	1,021.47	3,045.44	2,746.33	3,290.06
8. Tax expense (net)
	a) Current tax	308.00	276.37	260.42	906.56	866.26	1,052.72
	b) Deferred tax	(12.84)	7.44	8.54	(43.87)	(105.72)	(163.96)
Total tax expense	295.16	283.81	268.96	862.69	760.54	888.76
9. Net profit (+)/loss (-) after tax before share of	758.95	712.00	752.51	2,182.75	1,985.79	2,401.30
	associates (7-8)
10. Share of profit (+)/ loss (-) of associates	(2.07)	(2.85)	(0.90)	(6.80)	(8.79)	(12.79)
11. Net profit (+)/ loss (-) for the period/year (9+10)	756.88	709.15	751.61	2,175.95	1,977.00	2,388.51
12. Profit for the period/year attributable to
	a) Shareholders of the company	728.60	711.36	748.15	2,154.68	1,991.49	2,404.87
	b) Non- controlling interest	28.28	(2.21)	3.46	21.27	(14.49)	(16.36)
13. Other comprehensive income/(loss) for the
	period/year
	a) (i) Items that will not be reclassified to profit or loss	4.70	(2.25)	5.28	7.83	20.26	(38.41)
	(ii) Income tax on items that will not be reclassified	(1.18)	0.57	(1.34)	(1.97)	(5.10)	0.95
	to profit or loss
	b) (i) Items that will be reclassified to profit or loss	(73.22)	(83.84)	189.34	19.92	239.05	203.18
	(ii) Income tax on items that will be reclassified to	(0.81)	(12.28)	7.86	(13.11)	(8.53)	(4.23)
	profit or loss
	Other comprehensive income/(loss) for the period/year	(70.51)	(97.80)	201.14	12.67	245.68	161.49
14. Total comprehensive income/(loss) for the	686.37	611.35	952.75	2,188.62	2,222.68	2,550.00
	period/year (11+13)
15. Total comprehensive income/(loss) attributable to
	a) Shareholders of the company	658.69	614.34	947.53	2,161.37	2,251.16	2,579.96
	b) Non - controlling interest	27.68	(2.99)	5.22	27.25	(28.48)	(29.96)
16. Paid-up equity share capital (face value ₹ 2/- each)	161.36	161.33	161.29	161.36	161.29	161.29
	(Refer note 3)
17. Other equity						18,165.24
18. Earnings per share (face value ₹ 2/- each)
	a) Basic (₹)	*9.03	*8.82	*9.28	*26.71	*24.70	29.82
	b) Diluted (₹)	*9.02	*8.80	*9.26	*26.68	*24.67	29.79
	*Not Annualised

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Segment information						(₹ in Crores)
		Quarter ended		Nine months ended	Year ended
Particulars	31-12-2021	30-09-2021	31-12-2020	31-12-2021	31-12-2020	31-03-2021
Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Audited
Segment wise revenue and results
Segment revenue:
a) Pharmaceuticals	5,377.28	5,413.82	5,102.05	16,175.32	14,334.57	18,878.24
b) New ventures	127.09	139.13	91.17	420.92	307.59	401.27
Total segment revenue	5,504.37	5,552.95	5,193.22	16,596.24	14,642.16	19,279.51
Less : Inter segment revenue	25.51	33.15	24.53	93.23	89.02	119.92
Total revenue from operations	5,478.86	5,519.80	5,168.69	16,503.01	14,553.14	19,159.59
Segment result:
Profit/(loss) before tax and interest from each segment
a) Pharmaceuticals	1,098.12	1,064.55	1,111.43	3,356.56	3,001.06	3,633.71
b) New ventures	(23.33)	(30.74)	(42.04)	(98.25)	(121.48)	(182.95)
Total segment result	1,074.79	1,033.81	1,069.39	3,258.31	2,879.58	3,450.76
Less: Finance costs	20.68	38.00	47.92	88.25	133.25	160.70
Total Profit (+)/loss (-) before exceptional items and tax	1,054.11	995.81	1,021.47	3,170.06	2,746.33	3,290.06
Less : Exceptional items - New ventures	-	-	-	124.62	-	-
Total Profit (+)/loss (-) before tax	1,054.11	995.81	1,021.47	3,045.44	2,746.33	3,290.06

Segment assets and liabilities

As certain assets and liabilities are deployed interchangeably across segments, it is not practically possible to allocate those assets and liabilities to each segment. Hence, the details of assets and liabilities have not been disclosed in the above table.

Notes:

1. The financial results have been prepared in accordance with Indian Accounting Standards ('Ind AS') prescribed under section 133 of the Companies Act, 2013 read with relevant rules thereunder and in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) and SEBI circular dated 5th July, 2016.
2. The Company had received various notices of demand from the National Pharmaceutical Pricing Authority (NPPA), Government of India, on account of alleged overcharging in respect of certain drugs under the Drugs (Prices Control) Orders. The total demand against the Company as stated in NPPA public disclosure amounts to ₹ 3,703.40 Crore.

Out of the above, demand notices pertaining to a set of products being Norfloxacin, Ciprofloxacin, Salbutamol and Theophylline were challenged by the Company (i) in the Honourable Bombay High Court on the ground that bulk drugs contained in the said formulations are not amenable to price control, as they cannot be included in the ambit of price control based on the parameters contained in the Drug Policy, 1994 on which the DPCO, 1995 is based and (ii) in the Honourable Allahabad High Court on process followed for fixation of pricing norms. These Petitions were decided in favour of the Company and the matters were carried in appeal by the Union of India to the Honourable Supreme Court of India. The Honourable Supreme Court in its judgment of 1st August, 2003 remanded the said writ petitions to the Honourable Bombay High Court with directions that the Court will have to consider the petitions afresh, having due regard to the observations made by the Honourable Supreme Court in its judgment. On the Union of India filing transfer petitions, the Honourable Supreme Court ordered transfer of the said petitions to the Honourable Bombay High Court to it for being heard with the appeal filed against the Honourable Allahabad High Court order. Subsequently, in its order of 20th July, 2016 the Honourable Supreme Court recalled its transfer order and remanded the petitions to Honourable Bombay High Court for hearing. While remanding the matter to Honourable Bombay High Court, the Honourable Supreme Court directed Cipla to deposit 50% of the overcharged amount with the NPPA as stated in its order of 1st August, 2003 which at that point of time was ₹ 350.15 Crore. Complying with the directions passed by the Honourable Supreme Court, Cipla has deposited an amount of ₹ 175.08 Crore which has been received and acknowledged by NPPA. Furthermore, the Company has not received any further notices in these cases post such transfer of cases to Honourable Bombay High Court. Meanwhile, the Honourable Supreme Court vide its Order and Judgment dated 21st October, 2016, allowed the Appeals filed by the Government against the Judgment and Order of the Honourable Allahabad High Court regarding basis of fixation of retail prices. The said order was specific to fixation of retail prices without adhering to the formula/process laid down in DPCO, 1995. However, the grounds relating to inclusion of certain drugs within the span of price control continues to be sub-judice with the Honourable Bombay High Court.

The Honourable Bombay High Court had, in expectation of NPPA filing its counter-statement on status of each petitioner's compliance with the 2003 and 2016 Honourable Supreme Court orders (on deposit 50% of amount demanded), re-scheduled the hearing for 5th June, 2019, but the same was not listed on that date.

The Company had filed amendment applications before the Honourable Bombay High Court to incorporate the effect of a ruling by the Honourable Supreme Court to adjust trade margins of 16% from outstanding demands as not accrued to the manufacturers and to re-calculate interest from date of non-payment of demand within the time period stated in each demand. The said amendment also places certain additional grounds on record. The Honourable Bombay High Court issued notice to Union of India and NPPA on the amendment applications and set 25th January, 2021 for further hearing but the case was not listed due to the COVID-19 lockdown and the next date is awaited.

The Company has been legally advised that it has a substantially strong case on the merits of the matter, especially under the guidelines/principles of interpretation of the Drug Policy enunciated by the Honourable Supreme Court. Although, the decision of Honourable Supreme Court dated 21st October, 2016 referred above was in favour of Union of India with respect to the appeals preferred by the Government challenging the Honourable Allahabad High Court order, basis the facts and legal advice on the matter sub-judice with the Honourable Bombay High Court, no provision is considered necessary in respect of the notices of demand received till date aggregating to ₹ 1,736.00 Crore. It may be noted that NPPA in its public disclosure has stated the total demand amount against the Company in relation to the above said molecules to be ₹ 3,281.31 Crore (after adjusting deposit of ₹ 175.08 Crore), however, the Company has not received any further notices beyond an aggregate amount of ₹ 1,736.00 Crore.

In addition, Company had made provision of ₹ 116.31 Crore as of 31st December , 2021 for products not part of the referenced writ proceedings. Further, no new recovery notices were received by the Company in the quarter, thus not requiring any fresh cases to be filed by the Company in that regard. Due to COVID-19, courts are hearing only urgent cases, hence the writs that are pending will be heard in due course.

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1. The paid-up equity share capital stands increased to ₹ 161.36 Crore (80,67,90,214 equity shares of ₹ 2 each) upon allotment of 1,36,590 equity shares of
   ₹ 2 each pursuant to "ESOS 2013-A" during the quarter ended 31st December, 2021.
2. The Group continues to closely monitor the impact of the COVID-19 pandemic on all aspects of its business, including how it has impacted and will impact its customers, employees, vendors and business partners. The management has exercised due care, in concluding on significant accounting judgements and estimates, inter-alia, recoverability of receivables, assessment for impairment of goodwill, investments, intangible assets, inventory, based on the information available to date, both internal and external, while preparing the Group's financial results for the quarter and nine months ended 31st December, 2021.
3. The Board at its meeting held on 25th January, 2022 has considered and approved the transfer of the India based US business undertaking to Cipla BioTec Limited, a wholly owned subsidiary of the Company for a consideration of ₹ 1,400 Crore and the Consumer business Undertaking to Cipla Health Limited, wholly owned subsidiary of the Company for a consideration of ₹ 80 Crore as a going concern on a slump sale basis through a Business Transfer
   Agreement ("BTA"). The final consideration is subject to the adjustments as on the date of transfer as per the terms of BTA.
4. The unaudited standalone financial results for the quarter and nine months ended 31st December, 2021 are available on the Company's website i.e. www.cipla.com under Investor Information section and on the stock exchange websites i.e. www.bseindia.com and www.nseindia.com.
5. The figures of the previous year/period have been regrouped/recast to render them comparable with the figures of the current period.
6. The above results have been reviewed and recommended to the Board of Directors by the Audit Committee and subsequently approved by the Board of Directors at its meeting held on 25th January, 2022. These results have been subjected to limited review by statutory auditors who have expressed an

unmodified review report.

By order of the Board For CIPLA LIMITED

		Digitally signed
	UMAN by UMANG
	G	VOHRA
	Date:
		2022.01.25
	VOHRA 17:30:11 +05'30'
Mumbai		Umang Vohra
25th January, 2022	Managing Director and Global Chief Executive Officer

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