ST.

XAVIER’S AUTONOMOUS COLLEGE, MUMBAI – 01

BUSSINESS ACCOUNTS AND FINANCE II CIA – 2

COMPANY – CIPLA.Ltd (pharmaceutical)

Name :- Gavrila Gonsalves

Course code :- ACOM0402
Roll no. :- 021
UID :- 221149
In corporate finance, capital structure refers to the mix of various forms of external funds,
known as capital, used to finance a business. It consists of shareholders' equity, debt
(borrowed funds), and preferred stock, and is detailed in the company's balance sheet. The
larger the debt component is in relation to the other sources of capital, the greater financial
leverage the firm is said to have. Too much debt can increase the risk of the company and
reduce its financial flexibility, which at some point creates concern among investors and
results in a greater cost of capital. Company management is responsible for establishing a
capital structure for the corporation that makes optimal use of financial leverage and holds
the cost of capital as low as possible. The meaning of Capital structure can also be described
as the arrangement of capital by using different sources of long term funds which consists of
two broad types, equity and debt. The different types of funds that are raised by a firm
include preference shares, equity shares, retained earnings, long-term loans etc. These funds
are raised for running the business.
Determine the capital structure of the current year i.e. F.Y. 2022-2023

The balance sheet includes assets, equity and liability. Assets include various non – current
assets and current assets. Equity includes equity share capital and other equity and liability
includes non current – liabilities and current liabilities. Various non current assets contribute
some specific amount. As on 31st march 2023 property and plant acquires 3,449.67 crores and
as on 31st march 2022 it acquires 3,554.91 crores. Similarly, investment properties acquire
61.72 crores as on 31st march 2023 and 63.35 crores as on 31st march 2022. In total non –
current assets acquire 14,225.34 crores as on 31st march 2023 and 14,015.14 crores as on 31st
march 2022. Current assets like inventory and other current assets contribute 3,277.36 crores
as on 31st march 2023 and 3,485.81 crores as on 31st march 2023, 629.51 crores and 715.09
crores respectively. In total, assets contribute 13,371.13 crores as on 31st march 2023 and
11,335.04 crores as on 31st march 2022. Equity in total acquires 24,638.09 crores as on 31st
march 2023 and 22,513.55 crores as on 31st march 2022. Similarly, liabilities contribute
2,958.38 crores and 2,935.50 crores as on 31st march 2023 and 2022 respectively. All together
equity and liabilities contribute and 27,596.47 crores and 25,449.05 crores as on 31st march
2023 and 2022 respectively.
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. 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. There is no borrowing in current year and
previous year, hence net debt movement as required by Indian Accounting Standard (Ind AS)
7 – Statement of Cash Flow is not acceptable.
Analysation of capital structure for the F.Y. 2020 – 2021, 2021 – 2022, 2022 – 2023.

BALANCE SHEET OF CIPLA (in Rs. Cr.) MAR 23 MAR 22 MAR 21 MAR 20 MAR 19

12 mths 12 mths 12 mths 12 mths 12 mths

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 161.43 161.36 161.29 161.25 161.14

TOTAL SHARE CAPITAL 161.43 161.36 161.29 161.25 161.14

Reserves and Surplus 23,184.53 20,636.35 18,123.15 15,548.70 14,794.10

TOTAL RESERVES AND SURPLUS 23,184.53 20,636.35 18,123.15 15,548.70 14,794.10

TOTAL SHAREHOLDERS FUNDS 23,407.78 20,841.69 18,326.53 15,763.00 15,012.28

Minority Interest 305.76 275.69 259.06 294.28 331.97

NON-CURRENT LIABILITIES

Long Term Borrowings 0.00 416.24 1,202.75 2,369.28 3,830.07

Deferred Tax Liabilities [Net] 163.28 243.96 296.61 365.21 425.32

Other Long Term Liabilities 374.63 310.11 359.22 344.38 470.76

Long Term Provisions 102.16 100.22 116.17 133.27 121.41

TOTAL NON-CURRENT LIABILITIES 640.07 1,070.53 1,974.75 3,212.14 4,847.56

CURRENT LIABILITIES

Short Term Borrowings 520.36 407.90 334.73 447.15 486.16

Trade Payables 2,457.05 2,508.10 2,066.82 2,281.81 1,947.99

Other Current Liabilities 845.59 776.21 1,111.68 715.99 600.60

Short Term Provisions 1,286.67 1,221.00 1,078.32 948.19 736.76

TOTAL CURRENT LIABILITIES 5,109.67 4,913.21 4,591.55 4,393.14 3,771.51

TOTAL CAPITAL AND LIABILITIES 29,463.28 27,101.12 25,151.89 23,662.56 23,963.32

ASSETS

NON-CURRENT ASSETS

Tangible Assets 5,050.61 5,225.82 5,078.02 5,252.35 5,176.20

Intangible Assets 1,126.01 1,319.58 1,430.21 1,496.54 1,563.02

Capital Work-In-Progress 689.17 382.90 570.84 421.00 331.05

FIXED ASSETS 7,269.92 7,311.58 7,477.12 7,573.42 7,415.40

Non-Current Investments 572.52 355.63 423.68 454.50 428.35

Deferred Tax Assets [Net] 456.54 448.83 314.69 239.77 201.41

Long Term Loans And Advances 0.00 0.04 52.99 52.39 49.42

Other Non-Current Assets 905.49 1,119.57 666.61 702.30 572.97

TOTAL NON-CURRENT ASSETS 12,188.33 12,373.58 11,942.38 11,956.38 11,536.69

CURRENT ASSETS

Current Investments 3,089.86 2,194.97 2,286.37 1,016.52 2,125.79

Inventories 5,156.43 5,350.24 4,669.18 4,377.60 3,964.83

Trade Receivables 4,057.00 3,424.44 3,445.68 3,891.31 4,150.72

Cash And Cash Equivalents 1,564.62 1,928.48 1,401.23 1,003.91 618.81

Short Term Loans And Advances 7.59 3.57 2.58 5.60 6.28

OtherCurrentAssets 3,399.45 1,825.84 1,404.47 1,411.24 1,560.20

TOTAL CURRENT ASSETS 17,274.95 14,727.54 13,209.51 11,706.18 12,426.63

TOTAL ASSETS 29,463.28 27,101.12 25,151.89 23,662.56 23,963.32

OTHER ADDITIONAL INFORMATION

CONTINGENT LIABILITIES, COMMITMENTS

Contingent Liabilities 1,095.87 1,291.24 1,178.42 1,382.19 1,137.34

BONUS DETAILS
 Bonus Equity Share Capital 151.66 151.66 151.66 151.66 151.66

NON-CURRENT INVESTMENTS

Non-Current Investments Quoted Market Value 0.00 0.00 0.00 0.00 0.00

Non-Current Investments Unquoted Book Value 481.62 309.82 195.30 219.53 193.86

CURRENT INVESTMENTS

Current Investments Quoted Market Value 0.00 0.00 0.00 0.00 0.00

Current Investments Unquoted Book Value 3,089.86 2,194.97 2,286.37 1,016.52 2,125.79

As on 31st march 2020, the total share capital was 161.25 crores and as on 31st march 2021 it
was 161.29 crores. As on 31st march 2021, the total non – current assets acquire 12,771.56
crores and 13,424.42 crores as on 31st march 2022. Total Current assets acquire 10,190.75
crores as on 31st March 2021 and 10,137.15 crores as on 31st March 2022. In total, assets
contribute 22,963.74 crores as on 31st march 2021 and 25,449.05 crores as on 31st march
2022. Equity in total acquires 19,927.56 crores as on 31st march 2021 and 25,449.05 crores
as on 31st march 2022. Similarly, liabilities contribute 3,036.18 crores and 2,935.50 crores as
on 31st march 2021 and 2022 respectively. All together equity and liabilities contribute and
22,963.74 crores and 25,449.05 crores as on 31st march 2021 and 2022 respectively.
The profit and loss sheet shows various earnings and expenses which is divided into
Continuous operations and discontinuous/ restructing operations. Continuous operations
include revenue from other operations, other income, total income, expenses profit before and
after tax etc. Total profit before tax from continuous operations is 3,546.23 crores and
2,784.00 crores as on 31st march 2022 and 31st march 2021 respectively.
The statement of changes in equity provides a summary of all the changes that happened to a
company's equity during a specific period. It includes details about net income, dividends,
share issuances or repurchases, and any other transactions that affect the company's equity.
The equity share capital was 161.36 crores and 161.29 as on 31st march 2022 and 31st march
2021 respectively. The other equity balance was 22,352.19 crores as on 31st march 2022.

As on 31st march 2023 property and plant acquires 3,449.67 crores and as on 31st march 2022
it acquires 3,554.91 crores. Similarly, investment properties acquire 61.72 crores as on 31st
march 2023 and 63.35 crores as on 31st march 2022. In total non – current assets acquire
14,225.34 crores as on 31st march 2023 and 14,015.14 crores as on 31st march 2022. Current
assets like inventory and other current assets contribute 3,277.36 crores as on 31st march 2023
and 3,485.81 crores as on 31st march 2023, 629.51 crores and 715.09 crores respectively. In
total, assets contribute 13,371.13 crores as on 31st march 2023 and 11,335.04 crores as on
31st march 2022. Equity in total acquires 24,638.09 crores as on 31st march 2023 and
22,513.55 crores as on 31st march 2022. Similarly, liabilities contribute 2,958.38 crores and
2,935.50 crores as on 31st march 2023 and 2022 respectively. All together equity and
liabilities contribute and 27,596.47 crores and 25,449.05 crores as on 31st march 2023 and
2022 respectively.
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. 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. There is no borrowing in current year and
previous year, hence net debt movement as required by Indian Accounting Standard (Ind AS)
7 – Statement of Cash Flow is not acceptable.
The profit and loss sheet shows various earnings and expenses which is divided into
Continuous operations and discontinuous/ restructing operations. Continuous operations
include revenue from other operations, other income, total income, expenses profit before and
after tax etc. Total profit before tax from continuous operations is 2,469.53 crores and
2,882.58 crores as on 31st march 2023 and 31st march 2022 respectively.
The statement of changes in equity provides a summary of all the changes that happened to a
company's equity during a specific period. It includes details about net income, dividends,
share issuances or repurchases, and any other transactions that affect the company's equity.
The equity share capital was 161.43 crores and 161.36 as on 31st march 2023 and 31st march
2022 respectively. The other equity balance was 24,476.66 crores as on 31st march 2023.

Interpretation of the journey of cipla since its inception in terms of business financing.

Cipla's business journey since its inception reflects a strategic approach to business financing.
In its early years, the company prioritized providing affordable medicines, possibly relying
on initial capital investments and revenue generation. As it expanded globally and diversified
its product portfolio, Cipla embraced a combination of debt and equity financing. The
company's decision to go public and subsequent equity offerings suggest a proactive
approach to raising capital from the stock markets. This influx of funds likely fueled research,
development, and expansion initiatives. Cipla's adaptability is evident in its engagement with
strategic partnerships and collaborations, indicating a multifaceted financing strategy to foster
innovation and competitiveness in the pharmaceutical sector. Overall, Cipla's journey reflects
a dynamic and well-managed approach to business financing, utilizing various instruments to
navigate the evolving landscape of the pharmaceutical industry.