Investors

Whereas the company reported a loss in financial year 19/20 due to the Expected Credit Loss, there was a profit recorded in FY 18/19 so there is no year on year loss making situation. The management and administration costs declined by 11% as compared to the FY 18/19. The Company is implementing manufacturing administrative efficiency initiatives which will further drive down management and administrative costs.

The Company is implementing short, medium- and long-term strategies aimed at growing the business profitably. Some of the initiatives being undertaken in this regard include;
i. Geographical expansion both in terms of the number of countries where we have our facilities registered and also the number of countries where our individual product portfolios are registered. The Company has recently supplied first line therapy for HIV, TLE medicines to Botswana during the challenging Covid 19 epidemic and has also supplied throughout this period to Southern and West African countries.
Active negotiations with other Sovereign Nations are ongoing to help them in the short and longer term with health care challenges relating to securing and supplying of life saving medicines especially for HIV, malaria and tuberculosis.
A key contractual change has been adopted by the Company in requiring Sovereign Nations to guarantee payments for supply of medicines in order to avoid credit risk challenges as experienced with the Zambian government contract.
ii. Implementing new profitable revenue streams this year including new products and therapeutic categories. In FY 19/20, the Company introduced the first line therapy for ARV treatment in South Africa.
The company is currently undertaking a manufacturing technology transfer of a new variance of what was the first line ARV therapy in Uganda known as TLE 400.
The Company within three to four months will have the technology transfer to manufacture a product called QTIB which is a four in one combination for the prevention of tuberculosis in newly diagnosed HIV patients. Prior to the introduction of QTIB therapy by Cipla, newly diagnosed HIV patients have had to take 4 tablets a day but this is now going to be combined into one tablet.
iii. As highlighted in the last AGM, entrance into the private market will see the company begin to market and manufacture a range of products specifically tailored for the private retail sector including an over the counter category of products in the cardio vascular and heart and diabetes segments known as the metabolic therapeutic category.
iv. The private market entry will be boosted by a new inhouse sales team of medical representatives who will promote the range of Cipla products manufactured in India including the therapeutic class leading products in the respiratory, anti-infective, anti-fungal sectors and boasted by the products to be manufactured locally in the cardio vascular and diabetes categories.
v. Implementing capacity enhancement initiatives aimed at delivering reduced manufacturing costs while delivering on the Company’s commitment to deliver timely supplies to customers.

This will be considered by the Board of Directors.

The board did not recommend the issuing of a dividend due to the performance of the Company. As and when a dividend is issued, shareholder will be informed of how the dividend will be paid.

To increase your shares, please contact the stockbroker who opened your securities depository account to guide you on how you can purchase the additional shares.

The Company’s annual financial statements are available on the Company website: https://ciplaqcil.co.ug/investors#performance

This is dependent on the number of shares you hold and the prevailing share price.

The value of shares of any listed company can rise and fall according to supply and demand and the views of the market on a company’s performance at any one time.

The Annual financial statements and AGM Notice and Post AGM Notice have been sent through email and have also been uploaded on the Company’s website.
Shareholders can send an email to [email protected] for assistance with any information you might need.

The Company has manufactured hydroxychloroquine in response to the Covid-19 Pandemic and at the specific request of Ministry of Health in Uganda.
The Company will in the next two to three months also manufacture Azythromycin which is a part of the triple cocktail hydroxychloroquine, Azythoromycin and Zinc which is currently the first line therapy used in the treatment of mild to moderate cases of Covid-19 in Uganda. This however is not to say that this is a cure for Covid-19 but the manufacture of Hydroxychloroquine and Azythromycin are part and parcel of the Company’s response to the Covid-19 pandemic.
In collaboration with Cipla India, the Company will if required be in position to supply two specific anti-viral products namely Remdesivir injection manufactured by Cipla India and also Faveprovir. The Company will be in position if requested by the Ministry of Health to provide this medication to treat the more severe cases of Covid-19 in Uganda.

The Board of Directors is committed to ensuring that strategies to grow the company are implemented with the objective of bringing value to shareholders.

Due to Government’s guidelines restricting public gatherings, the Company made a decision to make the annual reports available on the website. Physical copies of the annual report were not printed this year. The report has been made available on the Company Website in a downloadable version. Any shareholder that may require a physical copy can make a request through [email protected] which the Company will assess based on viability.

The current board is comprised of eleven members and by any standard it is considered as a large board. The size and complexity of the business requires a wide range of skills and each member currently on the Board possesses a critical skill that is currently needed to deliver our vision of manufacturing home grown affordable quality medicines made in Africa for Africa.
The Nomination and Remunerations Committee annually reviews the composition of the Board and determines the optimal number in line with the required skills and strategic objectives. The competencies of the board members can be viewed in the Annual Report and the Company website.

The Board is aware of the current gender imbalance and all appointments take into consideration the need to close this gap.

The Company has a diverse range of shareholders and our objective of communication is to ensure information is available to all. A communications strategy has been developed which is focused on ensuring sufficient information is provided to shareholders. Some of the engagement strategies that have been adopted include use of social platforms like Instagram, twitter, shareholder Email and revamping the Company website. The Company will continually come up with mechanisms to enhance shareholder engagement.

A dividend payment will be dependent upon the Company’s performance in this financial year. Unfortunately, due to the Expected Credit Loss provisioning arising from the Government of Zambia debt, the Board was unable to recommend a dividend based upon the performance in the financial year 19/20. Once the Company’s financial position improves considerably and the company returns to a significant profit-making situation, a dividend will be an item that the Board will consider during the course of the financial year.

The Company’s overall profitability is impacted when there is a shift from higher therapeutic mix products to rather lower margin therapeutic products.
The Company is exporting to 16 countries and will add one new Country within the next few weeks from the AGM.

The Company took the overdraft to manage the cash flow gap that was created by the debt caused by delay in payment by Zambia.
Some of the funds from the overdraft facility were used to complete the projects that were running in the factory notably, to complete the quality control laboratory, equipping the laboratory adequately and replacing inefficient machinery in order to increase the capacity. Management is in the process of acquiring a loan to substitute the short-term funds with long-term. The objective of this is to match the long-term funds with the long-term capital investments. This will improve the interest costs and also achieve the maturity margin where long term funds are matched with long term expenditure. The released funds will go a long way to boast the capital and also increase the plant capacity in order to continuously improve the on-time delivery which is one of our strengths.

The Zambia government debt issue has been considered in two ways, one being that an amount was written down as an expected credit loss, the other is that business to Zambia was suspended pending full recovery of funds owed. The profit before tax indicated in the financial results is about Ugx.35Bn. and without the Zambia element the Company would still have a negative of about Ugx.2Bn. Depending on how much business the Company would have realized from Zambia, the situation would go either way.