We have extracted below the Chairman’s Statement from the 2019 annual report of Cipla Quality Chemicals Industries (CIPLA.ug), listed on the Uganda Securities Exchange:
It is with great pleasure that I present to you the Annual Report and Financial Statements of Cipla Quality Chemicals Industries Limited (CiplaQCIL) for the year ended 31st March, 2019.
At CiplaQCIL, our desire is to provide self sufficiency to the people of Uganda and the region for the treatment for Africa’s most dreaded diseases (Malaria, HIV/IADS and Hepatitis B) through the provision of more affordable, quality and efficacious medicines. We are proud to be one of the few WHO, current Good Manufacturing Practices (cGMP) compliant pharmaceutical plants in Sub Saharan Africa manufacturing WHO-prequalified first line treatments for both HIV/AIDS and Malaria. Our facility is approved in 13 countries and we hope to be registered in 20 African countries by December, 2020. In addition, our product portfolio has increased to 10 generics for the treatment of malaria, HIV/AIDS and Hepatitis B. This translates into increased market opportunities for our products and a bigger market share. CiplaQCIL operates in a highly regulated business environment. We are cognisant of the impact any lapse in compliance with approved standards could have on the environment and our consumers. Our commitment to meeting the regulatory standards is therefore unfettered. This provides assurance on the quality of our products and their efficiency.
In the past financial year, there was a decline in gross profit margin with a reduction in the net profit from Ushs 44.6 billion to Ushs 6.8 billion. This was majorly attributed to a reduction in Global Fund sales allocation, which in the previous year was $25Mn to $2Mn. Our continued support from the Government of Uganda and the regional off-take in Zambia has partially compensated for this decline by $15Mn. We do not expect the trend in the Global Fund sales allocation to change, however we are confident that with the measures in place, our Company shall recover and register sound financial performance in the future years. Demand for our products is not expected to decline and we hope that the increased approvals in Sub Saharan African countries will translate into increased market opportunities for our products.
The Board shall not be recommending a dividend to the AGM for approval. This is owing to the need to ensure capital adequacy to meet the Company’s obligations and to seize any emerging business opportunities.
Our business goal is to increase the product portfolio by coming up with new medicines for the treatment of marginalized or dreaded diseases, and to influence the regulatory environment in Africa to create a conducive business environment that promotes the pharmaceutical business. This will be our objective in the coming years. In September 2018, the Company was listed on the Uganda Securities Exchange. This was a development for the organization. We believe that listing on the stock exchange provides CiplaQCIL with an opportunity to obtain insightful direction and build partnerships that will ultimately enhance shareholder value and lead to the achievement of our objective of increasing access to affordable quality medicines manufactured in Africa.
Good governance is an important part of the Company’s success and we continue to embrace best practice principles of corporate governance and strive to ensure compliance with all laws and regulations. The Board is committed to ensuring that the long-term interests of stakeholders are protected. In this regard, it performed its oversight role to ensure transparency and accountability.In the past financial year, the Board underwent a few changes with the retirement of three Non-Executive Directors (Ms. Beth Mandel, Mr. Zain Latif and Mr. Chandru Chawla). The Board also appointed Mr. Joseph Baliddawa and Dr. Peter Mugyenyi as Independent Non-Executive Directors of the Board until the next Annual General Meeting where they shall be presented for confirmation by shareholders. I would like to take this opportunity to thank the outgoing directors for their invaluable contribution to the Company and wish them the best for the future. I also welcome the new directors to the CiplaQCIL family. We look forward to tapping into the wealth of knowledge and experience they bring to the team.
We remain committed to stakeholder engagement and we in the past financial year continuously engaged our stakeholders with a view to addressing stakeholder concerns, exploring new market opportunities and obtaining their support for our initiatives. We shall continue to engage all our stakeholders as we believe their support and confidence is key to the success of our Company.
As a company newly listed on the Uganda Securities Exchange, we hope to create avenues for regular and constructive dialogue with our shareholders to align their interests with the Company objectives.
We intend to be registered in 20 countries in Africa by 2020. This provides business opportunities for our company as it provides a platform to build partnerships in new markets. We also hope to increase our product portfolio. Discussions on this are underway and shareholders shall be notified once a position on the matter has been reached. We are very optimistic that CiplaQCIL will continue to grow. We do not expect the journey to be smooth but with the competent Board in place, we are confident that the strategy in place and the commitment to our vision and mission is sufficient to steer us to greater heights and to create sustainable shareholder value. We are confident that our financial performance in the next financial year will be much better and we look forward to your continued support to the Company.
On behalf of the Board of Directors, I extend my sincere gratitude to our shareholders for believing in our vision and mission and for investing in the Company. We look forward to moving forward with you in the next financial year. I wish to thank the Government of Uganda, our regulators, customers, partners and any other stakeholders for walking with us through this journey. We look forward to your continued support.
I also extend my sincere gratitude to themanagement and staff for their hardwork and dedication. Together we shall become a centre of excellence in manufacturing of quality, affordable and newer medicines.