Statement Of Directors’ Responsibilities

The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the financial year and of its operating results for that year. It also requires the directors to ensure that the Company keeps proper accounting records, which disclose with reasonable accuracy at any time the financial position of Cipla Quality Chemical IndustriesCIPLA Limited QUALITY (“the Company”). CHEMICAL They INDUSTRIES are also responsible LIMITED for safeguarding the assets of the Company. ANNUAL REPORT The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibility for internal control to management. Standards and systems of internal control are designed and implemented by management to provide reasonable assurance as to the integrity and reliability of the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. These systems and controls include the proper delegation of responsibilities within a clearly defined Accessframework, effective accounting to procedures affordable and adequate segregation of duties. The directors accept responsibility for the financial statements for the year ended 31 March 2020, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates in conformity with International Financial Reporting Standards and in the manner qualityrequired by the Companies Act,healthcare 2012. The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Company and of its operating results. The directors further accept responsibility for the maintenance of accounting records which may be relied manufacturedupon in the preparation of financial statements, as well as adequatein systemsAfrica of internal financial control. Nothing has come to the attention of the directors to indicate that the Company will not remain a going concern for at least the next twelve months from the date of this statement.

The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approved by the Board of Directors on ______and signed on its behalf by:

______Director Director

______2020 ______2020

Place:______Place:______

AnnualAnnual ReportReport 2019/20202019/2020 611 E. Directors’ Interest In Shares

TableAs at 31 March of2020, theC followingon directorstents held a direct interest in the Company’s share capital as reflected in the table below:

Director Number of shares %

Mr. Emmanuel Katongole 101,933,042 2.7912 Introduction Chairman’s CEO’s Report Mr. George William Baguma Statements 101,933,042 2.7912 Mr. Nevin J Bradford 157,000 0.0043

Mr. Stevens Mwanje 19,400 0.0005

204,042,484 5.5872 Our Guiding Product Regulatory Principles Portfolio Approvals F. Auditors

The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to continue in office in accordance with section 167 (2) of the Companies Act, 2012.

G.Operational Subsequent Events Production Financial Highlights Achievements Highlights The directors are not aware of any matter or circumstance which is material to the financial affairs of the company, which has occurred between 31 March 2020 and the date of approval of the financial statements, that has not been otherwise dealt with in the financial statements.

By Order of the Board Our People Sustainability Corporate Governance Report Statement

______

COMPANYBoard of SECRETARY Leadership Financial Directors Team Statements

______2020

AGM Notice Proxy Form

2 2 AnnualAnnual ReportReport 2019/2020 2019/2020

Cipla Quality Chemical Industries Limited, Plot 1-7, 1st Ring Road, Luzira Industrial Park, P.O Box 34871, Kampala-Uganda, Telephone: +256 312 341 100, Email: [email protected]. [529153634] E.to fulfil Directors’ its responsibility Interest Infree Shares of interference but It comes up with and reviews the viability of any ensuring accountability through reports to the business proposals for CiplaQCIL. board,As atat 31least March on a 2020, quarterly the followingbasis. directors held a direct interest in the Company’s share capital as reflected in the table below: Board Committees (iv) Finance Committee Director Number of shares % Board committees facilitate in-depth, efficient The objective of this Committee is to assist the consideration of issues applying director Board in the discharge of its financial oversight expertise to specific areas. The committees role to ensure the company remains financially considMr. erEmmanuel in detail mattersKatongole mandated to them by sound.101,933,042 2.7912 documented Terms of Reference, considering reporMr.ts Georgefrom ma Williamnagemen Bagumat or from experts at 101,933,042 2.7912 quarterly committee meetings. Each committee (v) Communications Committee is gMr.over Nevinned by J Bradforda Committee Charter which is 157,000 0.0043 reviewed annually to ensure it remains relevant The objective of this Committee is to provide in lineMr. wiStevensth the Mwanjelegal, regulatory framework, guidance19,400 on development of the Company 0.0005 governance best practices and trends in the Communications Strategy and oversee its business environment. The committees report 204,042,484implementation. 5.5872 to the Board with recommendations for Board consideration and approval where required. Board Meetings F.TheAuditors Board is comprised of five standing committees as follows; Audit and Risk, Finance, The conduct of board meetings is done in The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to Nominations and Remuneration, Business strict adherence to the principles of good continue in office in accordance with section 167 (2) of the Companies Act, 2012. Development and Communications. corporate governance and in accordance with the Company’s Articles of Association and G. Subsequent Events Governance Charter. Substantive items requiring (i) Audit and Risk Committee deliberation are included on the Agenda which The directors are not aware of any matter or circumstance which is material to the financial The Audit and Risk Committee provides an together with supporting documentation is affairs of the company, which has occurred between 31 March 2020 and the date of approval oversight role, reviews, evaluates and makes circulated in advance to allow for members to of the financial statements, that has not been otherwise dealt with in the financial statements. recommendations to the Board on risk and internalize and provide sufficient input at the compliance management. The Committee also meeting. The agenda is informed by priority Byrevi ewOrders the ofeff ecthetiven Boardess of internal controls in decisions and discussions necessary to drive the place. business forward.

A detailed report of the Committee is contained in The Board considers reports from the Board pages ------of this report. committees. Directors are provided with Board briefing papers containing management reports prior to each meeting scheduled to facilitate ______director preparedness. Minutes are approved and signed at the meeting following the one for which COMPANY(ii) Nominations SECRETARY and Remuneration Committee they were captured as a record. A minute book is maintained and stored in a safe. The Nominations and Remuneration Committee provides an oversight role, reviews, evaluates and Ample time is allowed for debate and constructive makes recommendations to the Board in relation ______2020 discussion. Decisions are reached by consensus to the Board recruitments, induction, training, following discussion and debate. Constructive development and performance management, the challenge is encouraged. Company’s strategic planning and performance and the Company’s human capital framework. Management is kept accountable for agreed actions arising from the minutes through an action A detailed report of the Committee is contained in log updated with progress which is discussed at pages ------of this report. the Board meetings.

The Board also approves an annual calendar and adheres to it. Attendance of meetings remained We(iii) Business are Developmentproud to Committee present our second annual very good in the past financial year with well- reportThe Business showcasing Development Committee our revi ewsustaineds and reasoned value absence creation of directors for health or travel advises the Board on strategy implementation reasons. journeyand any investment during opportunities FY 2019/2020.for the business.

604044 AnnualAnnual ReportReport 2019/20202019/2020 Table of Contents Statement Of Directors’ Responsibilities The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the financial year and of its operating results for that year. It also requires the directors to ensure that the Company keeps proper accounting records, which disclose with reasonable accuracy at any time the financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible for safeguarding the assets of the Company. 01Heading goes here 01Heading goes here The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibility for internal control to management. Standards and systems of internal control are designed and implemented by management to provide reasonable assurance as to the integrity and reliability of the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. These systems and controls include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties.

The directors accept responsibility for the financial statements for the year ended 31 March 2020, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates in conformity with International Financial Reporting Standards and in the manner required by the Companies Act, 2012. The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Company and of its operating results. The directors further accept responsibility for the maintenance of accounting records which may be relied 02Heading goes here 02Heading goes here upon in the preparation of financial statements, as well as adequate systems of internal financial control. We are not sellers of drugs. Nothing has come to the attention of the directors to indicate that the Company will not remain a going concern for at least the next twelve months Notfrom merethe date manufacturers of this statement. of medication. What we make are memories. The financial statements on pages 11 to 49,Memories which have thatbeen mayprepared not haveon the beengoing thereconcern basis, were approved by the Board of Directors on ______andto be remembered, signed on had its behalf a life by:not been lived.

And we make time too. Time we gladly give to those who have learnt what so many of us have forgotten.

The value of every single day. The preciousness of every breath, of every heartbeat. 03Heading goes here 03Heading goes here And we make tears. Tears of thanks for the release from pain. And then there’s hope. The hope parents have for the happiness of their children.

You see, we don’t have a strategy, we have a cause. ______We don’t have ______a vision statement, we have vision. Director We see a futureDirector where good health is expected. Not for the few but for the many. ______2020 And we don’t have______consumers 2020 or a target market. We have Nakato, Edwine, Okello and Sarah. Place:______Place:______And that, that is why we are not a healthcare company. We want people to live a long and healthy life.

Some call it human care. We call it Caring For Life.

2 Annual Report 2019/2020 AnnualAnnual ReportReport 2019/20202019/2020 613

Cipla Quality Chemical Industries Limited, Plot 1-7, 1st Ring Road, Luzira Industrial Park, P.O Box 34871, Kampala-Uganda, Telephone: +256 312 341 100, Email: [email protected]. [529153634] to fulfil its responsibility free of interference but It comes up with and reviews the viability of any Statement Of Directors’ Responsibilities ensuring accountability through reports to the business proposals for CiplaQCIL. Introduction board, at least on a quarterly basis. The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, whichThis give report a true and showcases fair view of the state our of the strategy,financial affairs governance of the Company as at the end of the Board Committees financial year and of its operating results for that year. It also requires the directors to ensure that the (iv) Finance Committee Companyframework keeps proper and accounting sustainability records, which disclose performance with reasonable accuracy while at any time the Board committees facilitate in-depth, efficient The objective of this Committee is to assist the financialproviding position ofan Cipla overview Quality Chemical of Industries our progressLimited (“the Company”). during They are also responsible consideration of issues applying director Board in the discharge of its financial oversight for safeguarding the assets of the Company. expertise to specific areas. The committees role to ensure the company remains financially the last year. consider in detail matters mandated to them by sound. The directors are ultimately responsible for the internal control of the Company. The directors delegate documented Terms of Reference, considering responsibilityReporting forPeriod internal control to management. StandardsAssurance and systems of internal control are designed reports from management or from experts at and implemented by management to provide reasonable assurance as to the integrity and reliability of quarterly committee meetings. Each committee the financial statements and to safeguard, verify andOur maintain statutory accountability auditor Grant of Thornton, the Company’s has assets. (v) Communications Committee 1 April 2019 - 31 March 2020 is governed by a Committee Charter which is TheseFor the systems purpose and of controlscomparability, include information the proper delegationprovided of responsibilities an opinion withinon financial a clearly statements. defined reviewed annually to ensure it remains relevant The objective of this Committee is to provide framework,pertaining toeffective past year accounting has been proceduresprovided for and adequatePlease segregation refer to page of duties. 2- for their opinion. in line with the legal, regulatory framework, guidance on development of the Company select parameters. governance best practices and trends in the Communications Strategy and oversee its The directors accept responsibility for the financial statements for the year ended 31 March 2020, which business environment. The committees report implementation. have been prepared using appropriate accounting policiesInterests supported of byDirectors reasonable and prudent judgments and estimates in conformity with International Financial Reporting Standards and in the manner to the Board with recommendations for Board Determining Materiality consideration and approval where required. required by the Companies Act, 2012. The directors are of the opinion that the financial statements give The interests of the Directors in the share capital Board Meetings a true and fair view of the state of the financial affairs of the Company and of its operating results. The of the Company are set out on page of the The Board is comprised of five standing directorsIn order to further assess accept our key responsibility material topics, for the we maintenance of accounting records which may be relied have applied the principles of Investor Relations Annual Report. committees as follows; Audit and Risk, Finance, The conduct of board meetings is done in upon in the preparation of financial statements, as well as adequate systems of internal financial control. such as materiality and stakeholder relationships Nominations and Remuneration, Business strict adherence to the principles of good which covers feedback from internal as well as Details of Major Shareholders Development and Communications. corporate governance and in accordance Nothing has come to the attention of the directors to indicate that the Company will not remain a going external stakeholders. Our disclosures on these with the Company’s Articles of Association and concern for at least the next twelve months from the date of this statement. topics demonstrate our commitment towards Governance Charter. Substantive items requiring Major shareholders of the Company are set out creating sustained value. (i) Audit and Risk Committee deliberation are included on the Agenda which The financial statements on pages 11 to 49, which haveon pagebeen prepared of the onAnnual the going Report. concern basis, were The Audit and Risk Committee provides an together with supporting documentation is approved by the Board of Directors on ______and signed on its behalf by: oversight role, reviews, evaluates and makes circulated in advance to allow for members to Responsibility Statement The Annual Report for the Year ended 31 March, recommendations to the Board on risk and internalize and provide sufficient input at the 2020 is available on the Company website at compliance management. The Committee also meeting. The agenda is informed by priority Our Board acknowledges the contents of this www.ciplaqcil.co.ug and will also be dispatched by reviews the effectiveness of internal controls in decisions and discussions necessary to drive the report which are prepared under the guidance of email to members who have provided valid email place. business forward. senior management and based on the inputs addresses. received from various key functions. We believe A detailed report of the Committee is contained in The Board considers reports from the Board that this report is a fair representation of Feedback pages ------of this report. committees. Directors are provided with Board CiplaQCIL’s overall financial, operational and briefing papers containing management reports sustainability performance for the reporting year We encourage you to share your insights and prior to each meeting scheduled to facilitate FY 2019/2020. feedback on this report to strengthen our future director preparedness. Minutes are approved and reporting efforts. Your suggestions may be signed at the meeting following the one for which The Directors whose names are given on page 49 communicated to Ms Doreen Pachuto Awanga, (ii) Nominations and Remuneration Committee they were captured as a record. A minute book is of the Annual Report, collectively and individually CiplaQCIL Company Secretary at: maintained and stored in a safe. accept full responsibility for the accuracy of the [email protected]. The Nominations and Remuneration Committee information given in the Annual Report provides an oversight role, reviews, evaluates and Ample time is allowed for debate and constructive and certify to the best of their knowledge and makes recommendations to the Board in relation discussion. Decisions are reached by consensus belief that there are no facts that have been to the Board recruitments, induction, training, following discussion and debate. Constructive ______omitted which would make any statement in ______Registered Address: development and performance management, the challenge is encouraged. Directorthe Annual Report false or misleading, and that Director Company’s strategic planning and performance all reasonable enquiries to ascertain such facts Cipla Quality Chemic al Industries Ltd and the Company’s human capital framework. Management is kept accountable for agreed ______have been made 2020 and that the notice contains all ______Plot 1-7, 1st Ring 2020Road, Luzira Industrial Park actions arising from the minutes through an action information required by Law and the Listing Rules. P. O. Box 34871, Kampala, Uganda A detailed report of the Committee is contained in log updated with progress which is discussed at Tel:+256312341100 | www.ciplaqcil.co.ug pages ------of this report. Place:______Place:______the Board meetings. Details of Directors Share Registrars: The Board also approves an annual calendar and adheres to it. Attendance of meetings remained We(iii) Business are Developmentproud to Committee present our second annual Directors details as required by the Listing Rules USE Nominees Ltd t/a SCD Registrars report showcasing our sustainedvery goodvalue in the creationpast financial year with well- of the Uganda Securities Exchange Limited (the UAP Nakawa Business Park The Business Development Committee reviews and reasoned absence of directors for health or travel Listing Rules) are set out on page 49 of the Plot 3-5 New PortBell Road Nakawa journeyadvises the Board during on strategy FY implementation 2019/2020. reasons. Annual Report. 4th Floor Block A and any investment opportunities for the business. P.O Box 23552 Kampala Uganda

404 Annual Report 2019/2020 AnnualAnnual ReportReport 2019/2020 2019/2020 55 E. Directors’ Interest In Shares

Chairman’sAs at 31 March 2020, the following Statement directors held a direct interest in the Company’s share capital as reflected in the table below:

Director Number of shares % I present to you the

Mr. Emmanuel Katongole Annual101,933,042 Report and 2.7912

Mr. George William Baguma Financial101,933,042 Statements 2.7912 of Cipla Quality Chemical Mr. Nevin J Bradford 157,000 0.0043 Industries Limited Mr. Stevens Mwanje (CiplaQCIL)19,400 for the year 0.0005 204,042,484ended 31st March, 2020. 5.5872 Emmanuel Katongole Chairman of CiplaQCIL F. Auditors

BusinessThe auditors, Overview Grant Thornton Certified Public Accountants,impact of the have crisis. expressed I am confident their willingnessthat we will to continue in office in accordance with section 167remain (2) ofresilient the duringCompanies and Act,after 2012. the crisis. The previous financial year was a tough one G. Subsequent Events for the Company. A loss of Ushs. 36bn was Strategic Developments recorded compared to a profit of Ushs. 7bn in the The directors are not aware of any matter or circumstance which is material to the financial previous financial year. This was mainly due to an We continued to work towards fulfilling our affairs of the company, which has occurred between 31 March 2020 and the date of approval additional impairment allowance made because objective to increase the product portfolio with of the financial statements, that has not been otherwise dealt with in the financial statements. of delayed payments by the Government of new medicines for the treatment of marginalized Zambia, a drop in gross margin and an increase or dreaded diseases. We are also trying to Byin interest Order on of our the overdraft. Board influence the regulatory environment in Africa to create a conducive business environment that Gross profit margin reduced mainly due to a promotes the production of a variety of quality, change in the product mix, suspension of sales affordable medicines. to the Government of Zambia and increased competition in some of the product ranges, which In this regard, we are in negotiations that will see in turn, put pressure on pricing in order to remain the Company begin the production of medicines ______competitive. for the treatment of cancer, sickle cell disease and tuberculosis. We are also in discussions about COMPANYIt is without a SECRETARYdoubt that the Company is facing extending our presence in the private market. tough economic conditions, but these challenges Shareholders shall be updated once these plans reinforce our resolve to continue working towards have come to fruition. the Company’s vision. The Board and management ______team are working2020 towards reversing this situation During the year, we completed a new Ushs. 8bn and we are confident that the measures put in Quality Control laboratory which will provide place will, upon coming to fruition, turn around the sufficient quality testing capacity to enable the Company’s performance. We are currently holding Company meet its ambitious growth targets. The discussions with various stakeholders including space previously occupied by the laboratory Governments and financial institutions in a bid to will be utilised to enhance our manufacturing reverse the Company’s performance. capacity.

In the recent times, the economy has been Continuous Improvement subjected to extraordinary stress brought about by the COVID-19 pandemic. We are happy to report Good governance is an important part of the that this has, to date, not adversely affected our Company’s success and we continue to embrace operations and projected performance. The Board best-practice principles of corporate governance and management team are continually monitoring and strive to ensure compliance with all laws the situation to reduce the possible negative and regulations. The Board is committed to

6066 AnnualAnnual ReportReport 2019/2020 2019/2020 Statementensuring that Ofthe Directors’long-term interests Responsibilities of our various stakeholders are protected. In this Theregard, Companies it performed Act, 2012its ov requiresersight role the directorsto ensure to prepareWe financial also will statementscreate avenues for each for regular,financial year, whichtransparency give a trueand andaccountability. fair view of the state of the financialconstructive affairs of dialogue the Company with our as shareholder at the end sof to the financial year and of its operating results for that year. alignIt also their requires interests the withdirectors the Company to ensure objectivesthat the CompanyIn the past keeps financial proper year, accounting the Board records, underwent which a discloseand with to create reasonable shared accuracy value. at any time the financialchange withposition the appointmentof Cipla Quality of Mrs Chemical Geena Industries Limited (“the Company”). They are also responsible forMalhotra safeguarding as a Non-Executive the assets of Director. the Company. She brings Future Focus to the Board a wealth of experience in Research Theand directorsDevelopment are ultimately having spearheaded responsible forthe the use internal controlWe hop ofe to the e xpandCompany. our pTherod uctdirectors portfoli delegateo and ofresponsibility cutting-edge for technologyinternal control platforms, to management. equipment, Standardsreach and to insystemscrease ofour internal market controlshare, aarend designed anddrug-device implemented combinations, by management and targeted to provide drug reasonableultima assurancetely, imp asrove to our the fi nanintegritycial re andsults. reliabilityWe shall of thedelivery financial dosage statements forms in and order to safeguard,to fulfil unmet verify and maintaincontinue accountability to build partne ofrship thes Company’sin these new assets. markets Thesepatient systems needs. andShe controlswill be v eryinclude instrumental the proper in the delegation with of the responsibilities aim of increa withinsing ma a rkeclearlyt defined for framework,Company’s effectivestrategy accountingto increase proceduresthe product andrange adequate segregationprod ucts. of duties. and introduce new medicines in our portfolio. The directors accept responsibility for the financial statementsWe are for very the op yeartimistic ended that the31 March Compa 2020,ny’s r eswhichults haveThe effectivenessbeen prepared of theusing Board appropriate plays a crucialaccounting policiescan supportedbe turned arouby reasonablend. Our foc usand is toprudent ensure that judgmentspart in the andsuccess estimates or failure in conformity of an organisation. with International the Financial busines sReporting weathers Standardsthis storm and and als ino theme etsmanner the requiredIn this regard, by the we Companies undertook Act, a Board2012. The Evaluation directors are ofneed thes opinionof its stakeholde that ther s,financial particul arlystatements our give aexercise true and aimed fair viewat identifying of the state gaps of or the weaknesses financial affairs ofand the sh Companyareholders. andThis willof itsno operatingt be a smooth results. journey The directorsin our leadership. further accept The findings responsibility will be forused the to maintenance gi vofen accountingthe existing erecordsconomic which challeng mayes; be however relied we uponidentify in areasthe preparation in need of of impr financialovement statements, which will as well asare adequateconfident tsystemshat with ofcommitm internalent financial to our stratcontrol.egy, improve the effectiveness of the Board. mission and vision, our results in future years will be Nothing has come to the attention of the directo rs to indicatemuch b thatetter. the Company will not remain a going concernThe Board for also at least underwent the next further twelve training months on from the date of this statement. various governance aspects, to continually ensure We will continue to collaborate with our regulators Theproper financial governance statements of the on Company.pages 11 to 49, which have beenand the prepared governm onent the to egoingnsure concernthat we pla basis,y our were role approved by the Board of Directors on ______and signedin bea tingon theits behalfpandemic by: and rebuilding the Ugandan Do Good By Doing Good economy.

As a business we measure our success not only Creating Long-Term Value by our profitability but also by the impact we have on our environment and in the local community. On behalf of the Board of Directors, I extend We therefore remain committed to ensuring strict my sincere gratitude to the shareholders for their compliance with approved standards: our plant continued trust and support. As a Board, we are adheres to local and international regulatory confident that the business will turn around and standards, current Good Manufacturing Practices prosper. I wish to thank the Government of Uganda, (cGMP) and Good Laboratory Practices (GLP). This our regulators, customers, partners and all other ensures that we never compromise on the quality stakeholders. of our products and their efficacy. We believe that doing business the right way is pivotal to ensuring I also extend my sincere gratitude to the business sustainability. management and staff for their hard work and dedication. Together we shall become a centre of We also consider the social, economic and excellence in the manufacturing of quality, affordable environmental impact of our actions. Our role in and newer medicines. We look forward to turning this ______the improvement of the socio-economic situation ______Company around to ensure long-term shareholder in our country and the communities in which we Director Directorvalue and sustainability of our business. operate is at the very core of our own long-term commercial success. ______2020 ______Finally, I would like 2020 to express my gratitude to my colleagues on the Board for their diligence, Stakeholder Engagement Place:______Place:leadership______and guidance. We are committed to all our stakeholders and we shall work diligently to We are making a concerted effort to engage build a business that will stand the test of time. more frequently with our stakeholders with the objective of addressing concerns, exploring new market opportunities and obtaining support for our initiatives. We shall continue to engage with all our various stakeholders as we believe their support and confidence is

AnnualAnnual ReportReport 2019/2020 2019/2020 617 E. Directors’ Interest In Shares

CEO’sAs at 31 March 2020,Report the following directors held a direct interest in the Company’s share capital as reflected in the table below:

Director Number of shares %

Mr. Emmanuel Katongole 101,933,042 2.7912

Mr. George William Baguma Our101,933,042 strategic aim is to 2.7912

Mr. Nevin J Bradford become157,000 one of, if not the0.0043

Mr. Stevens Mwanje leading19,400 pharmaceutical 0.0005 manufacturer in the 204,042,484 5.5872 Sub-Saharan African region and deliver on our “Made F. Auditors in Africa for African The auditors, Grant Thornton Certified Public Accpatientsountants, have” expressedintent. their willingness to continue in office in accordance with section 167 (2) of the Companies Act, 2012.

G. Subsequent Events Nevin Bradford ChiefThe Executivedirectors Officer are not aware of any matter or circumstance which is material to the financial affairs of the company, which has occurred between 31 March 2020 and the date of approval of the financial statements, that has not been otherwise dealt with in the financial statements.

By Order of the Board Dear Shareholder Significant headwinds were faced in the last financial year due to the loss of sales to the On behalf of your Board, I present to you Government of Zambia (GOZ) and the long our 2019/2020 annual report outlining delays in payments from the GOZ which led to the performance and the key highlights of our an Expected Credit Loss (ECL) charge in the profit and loss statement of approximately ______company’s development in fulfilling its intent to provide access to quality and affordable Ushs 32 billion ($8.6 million) against the payments medicines for the treatment of HIV/AIDS, due from the GOZ. The Company has been and COMPANYmalaria and Hepatitis SECRETARY B. continues to be actively engaged with the GOZ with a view to recovering most of, if not all, the The 2019/2020 financial year was a challenge outstanding payments during financial year 2020- ______but one in which2020 we strengthened our position in 2021. However, in 2019/2020 it was incumbent the region and with key customers. Building on upon the Company to take a significant ECL the bedrock of the Company’s long-term supply against the GOZ dues which will be written back agreement with the National Medical Stores into the Profit and Loss account as and when the (NMS) in Uganda, the Company was able to overdues are recovered. Sales to Zambia were significantly grow and develop its donor-funded halted pending resolution of the overdues. While business, both with the Global Fund (GF) and the loss of approximately Ushs. 57 billion ($15 with the United States funded President’s Malaria million) GOZ sales in 2018/2019 was compensated Initiative (PMI). Donor-funded business increased for by the significant increase in donor-funded by over 600% in the previous year, with GF business, this essentially just enabled the Company business particularly strong and recovering to maintain its prior year sales performance. Once from the poor 2018/2019 performance. This very the overdues are cleared the Company remains significant donor-funded growth was able to committed to operationalizing its long-term mitigate, to a large extent, the loss of sales to the supply contract with the GOZ for essential life- Republic of Zambia. saving medicines albeit with satisfactory payment guarantees.

6088 AnnualAnnual ReportReport 2019/2020 2019/2020 StatementOur strategic Ofaim Directors’ is to become Responsibilities one of, if not the General and administrative expenses were leading pharmaceutical manufacturer in the Sub- reduced by Ushs 4 billion ($1.08 million) or 11% TheSaharan Companies African Act, region 2012 and requires deliver the on directors our “Made to prepare mainly financial due tstatementso the elimination for each of financialthe once-off year, whichin Africa give for a Africantrue and patients” fair view intent. of the To stateenable of the financialshare affairs listing of expenses the Company in FY as2018/2019, at the enda reduction of the financialthis CiplaQCIL year and received of its regulatory operating resultsapproval for by that year. inIt alsolegal requiresexpense thes and directors a reduction to ensure in warehouse that the Companyauthorities keeps acros sproper the continent accounting including records, those which discloserental with costs reasonable after the accuracy Company’ ats anyown timewarehouse the financialin Uganda, position Kenya, of Rwanda, Cipla Quality Tanzania, Chemical Namibia, Industries Limitedwas commissioned.(“the Company”). They are also responsible forIvory safeguarding Coast, Niger, the Zambia, assets ofZimbabwe, the Company. Malawi, Mozambique, Ghana, Ethiopia, Angola and Finance costs increased due to the additional TheSouth directors Sudan. areIn 2019/2020ultimately theresponsible Company’s for World the internal controlutilisation of theof a Company. short-term The borrowing directors facility delegate to responsibilityHealth Organization for internal (WHO) control Good to Manufacturingmanagement. Standards cover and the systems workingof capital internal ga controlp created are bydesigned the andPractices implemented (GMP) certification by management was renewed to provide for reasonabledelay assurance in payment as tos thefrom integrity the GOZ. and reliability of thethe financialthird time statements while the South and to African safeguard, regulatory verify and maintain accountability of the Company’s assets. Thesebody, systemsSouth African and controls Health includeProducts the Regulatory proper delegation of responsibilities within a clearly defined framework,Authority (SAHP effectiveRA), accountingapproved bothprocedures the facility and for adequate The segregation Company’s ofoverall duties. performance for the year GMP and two of the leading antiretrovirals (ARVs) was a loss of Ushs 36 billion ($9.725 million) in FY Theused directors in South accept Africa: responsibilitythe triple combinations for the financial of statements2019/2020 for thecompared year ended to a 31profit March of Ushs2020, 7 whichbillion havetenofo beenvir/emtricitabine/efavirenz prepared using appropriate (TEE) and accounting the new policies($1.89 supported million) in by FY reasonable 2018/2019. and prudent judgmentsfirst-line thera andpy estimates tenofovir/lamivudine/dolutegravir in conformity with International Financial Reporting Standards and in the manner required(TLD). After by thethese Companies regulatory Act, approvals, 2012. The the directors first are ofCash the flowopinion from that operations the financial increased statements to Ush gives 23 ashipment true and of fair TEE view was ofexported the state to of South the financialAfrica affairs ofbillion the Company($6.216 million) and fromof its a operating deficit of results.Ushs 49 The directorsin Quarter further 4. Long-term accept responsibilitysupply of these for ARV the maintenances to billion of accounting ($13.243 million) records in FY which 2018/2019, may be partly relied due uponSouth in Africa the preparation will continue of throughout financial statements, 2020/2021. as well asto impr adequateoved collectionssystems of frominternal customers financial excluding control. Zambia. Payments to suppliers increased due to NothingDespite thehas issues come theto theCompa attentionny faced of the in directo rs to indicateincreased that stock the Companypurchases will in thenot previousremain a y eargoing concern2019/2020, for we at continueleast the tonext focu twelves on strengtheningmonths from the dateto manageof this statement. the risks associated with dependence key enablers to ensure the sales and profitability on imports from China. This stock has enabled Theopportunities financial statementsenvisaged onin 2020/2021pages 11 toand 49, the which have beenthe Company prepared to on maintain the going – t oconcern date – basis,normal were approvedfuture are byrealised the Board. We recently of Directors opened on ______andour new signedproduction on its schedules behalf by: during the COVID-19 state-of-the-art laboratory, which provides sufficient pandemic. The Ushs 15 billion ($4.052 million) quality testing capacity for the foreseeable future. capital expenditure was mainly to complete We further enhanced our manufacturing capacity CiplaQCIL’s new state-of-art Quality laboratory. by moving to a three-shift operating model, The overall increase in cash and cash equivalents coupled with rigorous managing of costs. These in FY 2019/2020 was Ushs 8 billion ($2.161 million). changes ensure that we can operate at maximum efficiency and enable the Company to maintain I would like to place on record the strong support and improve its margins in a very competitive received from our Board. We also have an environment. exceptionally strong and committed team who I am very confident will be able to deliver on the Company’s objectives. Coupled with the growth Financial Results strategy we have in place, I am very optimistic that we will drive the Company’s performance The continued delay of the GOZ in settling the to new levels in FY 2020/2021 and overcome the outstanding amount of Ushs 48.0 billion obstacles faced in the last year. We are mindful resulted in an additional impairment charge of our shareholders’ expectations and we are (ECL) of Ushs 32 billion ($8.6 million) to the income committed to meeting them. ______statement. The halting of sales to the GOZ reduced ______Directorexport sales by 53%. The increased export orders DirectorI would like to thank all our stakeholders, by donor organisations could not close this gap the Board, colleagues, customers, regulators, communities and shareholders for their ______created by loss 2020of GOZ business.The negative ______2020 impact was however almost eliminated by an continued support. We look forward to working increase in Ugandan sales, both to NMS and together to deliver on our vision of affordable, Place:donor-funded______business, by 18% closing sales at Place:quality ______healthcare, made in Africa for Africa. Ushs 193 billion (FY 2019-20: Ushs 195 billion).

Gross margins reduced from 27% in FY 2018-19 to 19% in FY 2019-20, mainly due to a change in the product mix of the new orders received after the suspension of sales to the GOZ.

AnnualAnnual ReportReport 2019/2020 2019/2020 619 E. Directors’ Interest In Shares

AfricaAs at 31 March 2020,for the Africafollowing directors held a direct interest in the Company’s share capital as reflected in the table below:

Director Number of shares %

Mr. Emmanuel Katongole 101,933,042 2.7912

Mr. George William Baguma 101,933,042 2.7912

Mr. Nevin J Bradford 157,000 0.0043

Mr. Stevens Mwanje 19,400 0.0005

204,042,484 5.5872

Providing Quality, Affordable Medicine To Patients F. Auditors

AtThe Cipla auditors, Qualit Grant Thorntony Chemical Certified Public Industries Accountants, have Limited expressed (CiplaQCIL),their willingness to wecontinue are innot office merein accordance manufacturers with section 167 (2) of of the medicine.Companies Act, 2012.What we G.make Subsequent are Events memories. Memories that may not have been thereThe directors to be are notremembered, aware of any matter had or circumstance a life whichnot is beenmaterial tolived. the financial We affairs of the company, which has occurred between 31 March 2020 and the date of approval makeof the financialpeople statements, better that hasand not webeen otherwisesave lives.dealt with in the financial statements.

ByThat’ Orders why we of don the’t haveBoard a strategy, we have a Made in Africa for Africa cause. We don’t have a vision statement, we have vision. Established in Uganda in 2005, CiplaQCIL emerged As the largest pharmaceutical manufacturer in as the result of a dire national need: at the time, East Africa and also one of the largest in Sub- the country was battling to treat HIV/Aids patients. Saharan Africa (SSA), CiplaCQIL is one of the few While more than 60% of HIV/AIDS and 80% of pharmaceutical manufacturers in SSA to operate malaria cases occured in Sub-Saharan Africa, ______a World Health Organization (WHO) cGMP the region manufactured only 1% of the medicine compliant facility that manufactures a range of required to treat patients. When approached by WHO pre-qualified medicines for treating HIV/ COMPANY SECRETARY the Government of Uganda to assist with this AIDS and malaria. problem, Cipla partnered with a local firm, Quality Chemical Industries Ltd (QCIL), to manufacture CiplaQCIL has been focused on aggressive these much-needed drugs in Uganda. ______market expansion2020 in the past few years, and as a result, the company has been approved by The Company has since expanded its portfolio of national regulatory bodies across numerous African medicines considerably. CiplaQCIL manufactures countries. It is also listed for approvals in many the two first-line WHO-recommended therapies for other markets, including South Africa – the single Hepatitis B (Tenofovir 300mg and Entecavir 0.5mg biggest market for antiretrovirals in the world. and 1.0mg tablets) and the new first-line triple combination ARV therapy (Dolutegravir Sodium, Following the approval from the South African Health Lamivudine Tenofovir Disoproxil Fumarate). Products Regulatory Authority (SAHPRA), CiplaQCIL recently dispatched its first consignment of ARVs (a The Company’s manufacturing facility operates combination of tenofovir, emtricitabine and efavirenz) under stringent standards relating to minimal to South Africa. The consignment marks the beginning environmental impact, strict adherence to cGMP, of supply that is expected to spread over the next good laboratory standards (GLP) and numerous twelve months and will give South Africa access to other international regulatory standards. The quality medicines manufactured in Africa. facility is approved for supply in 15 SSA countries

601010 AnnualAnnual ReportReport 2019/2020 2019/2020 Statementand currently Ofexports Directors’ to 12 countries Responsibilities in Africa and Caring For Life two in South East Asia. The Companies Act, 2012 requires the directors to prepareCiplaQCIL financial employsstatements more for thaneach 350 financial permanent year, whichGrowth give Opportunities a true and fair view of the state of the financialstaff affairsof which of the29% Company are female. as atWe the are end an ofequal the financial year and of its operating results for that year. opportunityIt also requires employer the directors and do to not ensure discriminate that the on CompanyCiplaQCIL keepsaims toproper be regis accountingtered in 22 records, SSA which disclosegender, with age,reasonable disability, accuracy ethnicity, at religious any time grounds, the financialcountries position in 2020, ofan Ciplad cont Qualityinually st Chemicalrives to Industries Limitedor nationality. (“the Company”). We take Theyimmense are pridealso responsible in forprodu safeguardingce quality, affordathe assetsble m ofedici thenes Company. that will meet developing and training staff to empower them the demands of the increasing African population. and enhance their ability to deliver the best results TheAs adirectors result, Cipl areaQCIL’s ultimately manufac responsibleturing f acforility the has internal controlfor the ofbusiness. the Company. The directors delegate responsibilitybeen expanded for tointernal incre asecontrol prod touct management.ion capacity Standards and systems of internal control are designed andfrom implemented 80 million to by130 management million tablets tomo providenthly. reasonableIn assurancepartnershi pas wit toh thepubli integrityc universi andties reliabilityin Africa, ofwe the financial statements and to safeguard, verify and maintainhave an accountability internship prog oframme the Company’s which focu assets.ses on TheseIn addition systems to pr andod uccontrolsing me diincludecine to the treat proper malar delegationia, sc ieofnce responsibilities-related indust withinrial tr aia ninclearlyg. The defined progra mme framework,HIV and Hep effectiveatitis B, accountingCiplaQCIL isprocedures exploring th ande adequateaim ssegregation to give undergraduate of duties. s valuable practical production of medicine to manage the surge of work experience and challenges them to solve Thenon -communidirectorsca acceptble dise responsibilityases (NCDs) for and the c financialancer. statementsproblems for an thed yearprov endedide sugg 31est Marchions for 2020, imp rovwhicheme nt. have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates in conformity with International Financial Reporting Standards and in the manner CiplaQCIL commissioned a UGX8 billion quality Committed To Making A Difference requiredcontrol laboratoryby the Companies – with state-of-the-art Act, 2012. The directors are of the opinion that the financial statements give aequipment true and suchfair view as extractors of the state for of drawing the financial affairs of the Company and of its operating results. The CiplaQCIL is committed to making the highest directorsdangerous further solvents accept off workresponsibility benches, for detectors the maintenance of accounting records which may be relied quality, affordable, life-saving medicines because uponthat checkin the airpreparation pressure andof financial alert in statements,case of as well as adequate systems of internal financial control. we want people to live a long and healthy life. leakages, conference rooms and training facilities We see a future where good health is expected Nothing– which haswas comecompleted to the in attention December of the2019. directo This rs to indicate that the Company will not remain a going - not for the few but for the many. That’s why concernfacility is fortwice at leastthe size the ofnext the twelve previous months laboratory from the date of this statement. we believe no-one should be denied access to and accommodates more staff and ensures that essential medicine. We’re not just about making Thethe companyfinancial statements is compliant on with pages all safety 11 to 49, and which have been prepared on the going concern basis, were medicine, we’re about making a difference. approvedgood laboratory by the Boardpractice of requirements.Directors on ______andThe new signed on its behalf by: facility has also helped to increase productivity and improve production timelines.

The Company warehouse has been operational since January 2019 and has the capacity for 5000 pallets. This has led to substitution of rented space with owned space, leading to discontinued use of third party warehouses

______Director Director

______2020 ______2020

Place:______Place:______

AnnualAnnual ReportReport 2019/2020 2019/2020 6111 E.to fulfil Directors’ its responsibility Interest Infree Shares of interference but It comes up with and reviews the viability of any ensuring accountability through reports to the business proposals for CiplaQCIL. board,OurAs atat 31least MarchGuiding on a 2020, quarterly the followingbasis. Principles directors held a direct interest in the Company’s share capital as reflected in the table below: Board Committees (iv) Finance Committee Director Number of shares % BCiplaQCIL’soard committees facili goaltate in-dep isth to, efficie producent The pharmaceutical objective of this Committee isproducts to assist the cofonsid theeratio nhighest of issues applying quality director that haveBoard zero in the dischargeenvironmental of its financial oversight impact, expertise to specific areas. The committees role to ensure the company remains financially cadhereonsidMr. erEmmanuel in deta toil mattersKatongole current manda tedGood to them Manufacturingby sound.101,933,042 Practices (cGMP)2.7912 documented Terms of Reference, considering reandporMr.ts GeorgefrGoodom ma Williamnagemen Laboratory Bagumat or from experts Practices at 101,933,042 (GLP), all consistent with2.7912 quarterly committee meetings. Each committee global and regional regulatory(v) Communicationsstandards. Committee is gMr.over Nevinned by J Bradforda Committee Charter which is 157,000 0.0043 reviewed annually to ensure it remains relevant The objective of this Committee is to provide in lineMr. wiStevensth the Mwanjelegal, regulatory framework, guidance19,400 on development of the Company 0.0005 governance best practices and trends in the Communications Strategy and oversee its business environment. The committees report 204,042,484implementation. 5.5872 to the Board with recommendations for Board consideration and approval where required. Board Meetings F.TheAuditors Board is comprised of five standing committees as follows; Audit and Risk, Finance, The conduct of board meetings is done in The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to Nominations and Remuneration, Business strict adherence to the principles of good continue in office in accordance with section 167 (2) of the Companies Act, 2012. Development and Communications. corporate governance and in accordance with the Company’s Articles of Association and G. Subsequent Events Standards Governance Charter.Vision Substantive items requiring (i) Audit and Risk Committee deliberation are included on the Agenda which The directorsThe areplant not has aware been of designedany matter to or circumstance whichTo become is material a centreto the financial The Audit and Risk Committee provides an together with supporting documentation is affairs ofmeet the company, the world’s which most has stringent occurred between 31 Marchof 2020excellence and the in date the of approval oversight role, reviews, evaluates and makes circulated in advance to allow for members to of the financialregulatory statements, standards that has not been otherwise dealtmanufacturing with in the offinancial quality statements. recommendations to the Board on risk and internalize and provide sufficient input at the compliance management. The Committee also meeting. The affordableagenda is informed and newer by priority Byrevi ewOrders the ofeff ecthetiven Boardess of internal controls in decisions and discussionsmedicines. necessary to drive the place. business forward.

A detailed report of the Committee is contained in The Board considers reports from the Board pages ------of this report. committees. Directors are provided with Board briefing papers containing management reports prior to each meeting scheduled to facilitate ______director preparedness. Minutes are approved and signed at the meeting following the one for which COMPANY(ii) Nominations SECRETARY and Remuneration Committee they were captured as a record. A minute book is maintained and stored in a safe. The Nominations and Remuneration Committee provides an oversightValues role, reviews, evaluates and Ample time is allowed for debate and constructive makes recommendations to the Board in relation Mission ______2020 discussion. Decisions are reached by consensus to the Board recruitments,Quality, Excellence, induction, training, followingTo provide discussion affordable and debate. and Constructive developmentAccountability, and performance Teamwork, management, the challenge is encouraged. Company’s strategicIntegrity, planning Customer and Focus, performance efficacious medicines in a and the Company’sand human Innovation. capital framework. sustainable way, in order to Managementimprove theis kept quality accountable of life. for agreed actions arising from the minutes through an action A detailed report of the Committee is contained in log updated with progress which is discussed at pages ------of this report. the Board meetings.

The Board also approves an annual calendar and adheres to it. Attendance of meetings remained (iii) Business Development Committee very good in the past financial year with well- The Business Development Committee reviews and reasoned absence of directors for health or travel advises the Board on strategy implementation reasons. and any investment opportunities for the business.

60124012 AnnualAnnual ReportReport 2019/20202019/2020 to fulfil its responsibility free of interference but It comes up with and reviews the viability of any Statement Of Directors’ Responsibilities Ourensuring accountability Guiding through report sPrinciples to the business proposals for CiplaQCIL. board, at least on a quarterly basis. The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the Board Committees financial year and of its operating results for that year. It also requires the directors to ensure that the (iv) Finance Committee Company keeps proper accounting records, which disclose with reasonable accuracy at any time the BCiplaQCIL’soard committees facili goaltate in-dep isth to, efficie producent The pharmaceutical objective of this Committee isproducts to assist the financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible cofonsid theeratio nhighest of issues applying quality director that haveBoard zero in the dischargeenvironmental of its financial oversight impact, for safeguarding the assets of the Company. expertise to specific areas. The committees role to ensure the company remains financially cadhereonsider in deta toil matters current manda tedGood to them Manufacturingby sound. Practices (cGMP) The directors are ultimately responsible for the internal control of the Company. The directors delegate documented Terms of Reference, considering responsibility for internal control to management. Standards and systems of internal control are designed reandports frGoodom managemen Laboratoryt or from experts Practices at (GLP), all consistent with and implemented by management to provide reasonable assurance as to the integrity and reliability of quarterly committee meetings. Each committee the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. global and regional regulatory(v) Communicationsstandards. Committee is governed by a Committee Charter which is These systems and controls include the proper delegation of responsibilities within a clearly defined reviewed annually to ensure it remains relevant The objective of this Committee is to provide framework, effective accounting procedures and adequate segregation of duties. in line with the legal, regulatory framework, guidance on development of the Company governance best practices and trends in the Communications Strategy and oversee its The directors accept responsibility for the financial statements for the year ended 31 March 2020, which business environment. The committees report implementation. have been prepared using appropriate accounting policies supported by reasonable and prudent to the Board with recommendations for Board judgments and estimates in conformity with International Financial Reporting Standards and in the manner consideration and approval where required. required by the Companies Act, 2012. The directors are of the opinion that the financial statements give Board Meetings a true and fair view of the state of the financial affairs of the Company and of its operating results. The The Board is comprised of five standing directors further accept responsibility for the maintenance of accounting records which may be relied committees as follows; Audit and Risk, Finance, The conduct of board meetings is done in upon in the preparation of financial statements, as well as adequate systems of internal financial control. Nominations and Remuneration, Business strict adherence to the principles of good Development and Communications. corporate governance and in accordance Nothing has come to the attention of the directors to indicate that the Company will not remain a going with the Company’s Articles of Association and concern for at least the next twelve months from the date of this statement. Standards Governance Charter.Vision Substantive items requiring (i) Audit and Risk Committee deliberation are included on the Agenda which The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were The plant has been designed to To become a centre approved by the Board of Directors on ______and signed on its behalf by: The Audit and meetRisk C theommi world’sttee pro mostvides anstringent together with ofsupporting excellence documentation in the is circulated in advance to allow for members to oversight role, reviewregulatorys, evaluates standardsand makes manufacturing of quality recommendations to the Board on risk and internalize and provide sufficient input at the compliance management. The Committee also meeting. The affordableagenda is informed and newer by priority reviews the effectiveness of internal controls in decisions and discussionsmedicines. necessary to drive the place. business forward.

A detailed report of the Committee is contained in The Board considers reports from the Board pages ------of this report. committees. Directors are provided with Board briefing papers containing management reports prior to each meeting scheduled to facilitate director preparedness. Minutes are approved and signed at the meeting following the one for which (ii) Nominations and Remuneration Committee they were captured as a record. A minute book is maintained and stored in a safe. The Nominations and Remuneration Committee provides an oversightValues role, reviews, evaluates and Ample time is allowed for debate and constructive makes recommendations to the Board in relation Mission discussion. Decisions are reached by consensus to the Board recruitments,Quality, Excellence, induction, training, followingTo provide discussion affordable and debate. and Constructive ______developmentAccountability, and performance Teamwork, management, the challenge is encouraged. Director Director Company’s strategicIntegrity, planning Customer and Focus, performance efficacious medicines in a and the Company’sand human Innovation. capital framework. sustainable way, in order to Managementimprove theis kept quality accountable of life. for agreed ______2020 ______2020 actions arising from the minutes through an action A detailed report of the Committee is contained in log updated with progress which is discussed at pages ------of this report. Place:______Place:______the Board meetings.

The Board also approves an annual calendar and adheres to it. Attendance of meetings remained (iii) Business Development Committee very good in the past financial year with well- The Business Development Committee reviews and reasoned absence of directors for health or travel advises the Board on strategy implementation reasons. and any investment opportunities for the business.

4012 Annual Report 2019/2020 AnnualAnnual ReportReport 2019/20202019/2020 6113 E.to fulfil Directors’ its responsibility Interest Infree Shares of interference but It comes up with and reviews the viability of any ensuring accountability through reports to the business proposals for CiplaQCIL. board,As atat 31least March on a 2020, quarterly the followingbasis. directors held a direct interest in the Company’s share capital as reflected in the table below: Board Committees (iv) Finance Committee Director Number of shares % Board committees facilitate in-depth, efficient The objective of this Committee is to assist the consideration of issues applying director Board in the discharge of its financial oversight expertise to specific areas. The committees role to ensure the company remains financially considMr. erEmmanuel in detail mattersKatongole mandated to them by sound.101,933,042 2.7912 documented Terms of Reference, considering reporMr.ts Georgefrom ma Williamnagemen Bagumat or from experts at 101,933,042 2.7912 quarterly committee meetings. Each committee (v) Communications Committee is gMr.over Nevinned by J Bradforda Committee Charter which is 157,000 0.0043 reviewed annually to ensure it remains relevant The objective of this Committee is to provide in lineMr. wiStevensth the Mwanjelegal, regulatory framework, guidance19,400 on development of the Company 0.0005 governance best practices and trends in the Communications Strategy and oversee its business environment. The committees report 204,042,484implementation. 5.5872 to the Board with recommendations for Board consideration and approval where required. Board Meetings F.TheAuditors Board is comprised of five standing committees as follows; Audit and Risk, Finance, The conduct of board meetings is done in The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to Nominations and Remuneration, Business strict adherence to the principles of good continue in office in accordance with section 167 (2) of the Companies Act, 2012. Development and Communications. corporate governance and in accordance with the Company’s Articles of Association and G. Subsequent Events Governance Charter. Substantive items requiring (i) Audit and Risk Committee deliberation are included on the Agenda which The directors are not aware of any matter or circumstance which is material to the financial The Audit and Risk Committee provides an together with supporting documentation is affairs of the company, which has occurred between 31 March 2020 and the date of approval oversight role, reviews, evaluates and makes circulated in advance to allow for members to of the financial statements, that has not been otherwise dealt with in the financial statements. recommendations to the Board on risk and internalize and provide sufficient input at the compliance management. The Committee also meeting. The agenda is informed by priority Byrevi ewOrders the ofeff ecthetiven Boardess of internal controls in decisions and discussions necessary to drive the place. business forward.

A detailed report of the Committee is contained in The Board considers reports from the Board pages ------of this report. committees. Directors are provided with Board briefing papers containing management reports prior to each meeting scheduled to facilitate ______director preparedness. Minutes are approved and signed at the meeting following the one for which COMPANY(ii) Nominations SECRETARY and Remuneration Committee they were captured as a record. A minute book is maintained and stored in a safe. The Nominations and Remuneration Committee provides an oversight role, reviews, evaluates and Ample time is allowed for debate and constructive makes recommendations to the Board in relation ______2020 discussion. Decisions are reached by consensus to the Board recruitments, induction, training, following discussion and debate. Constructive development and performance management, the challenge is encouraged. Company’s strategic planning and performance and the Company’s human capital framework. Management is kept accountable for agreed actions arising from the minutes through an action A detailed report of the Committee is contained in log updated with progress which is discussed at pages ------of this report. the Board meetings.

The Board also approves an annual calendar and adheres to it. Attendance of meetings remained (iii) Business Development Committee very good in the past financial year with well- The Business Development Committee reviews and reasoned absence of directors for health or travel advises the Board on strategy implementation reasons. and any investment opportunities for the business.

60144014 AnnualAnnual ReportReport 2019/20202019/2020 to fulfil its responsibility free of interference but It comes up with and reviews the viability of any Statement Of Directors’ Responsibilities ensuring accountability through reports to the business proposals for CiplaQCIL. Product Portfolio board, at least on a quarterly basis. The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the Board Committees financial year and of its operating results for that year. It also requires the directors to ensure that the (iv) Finance Committee Company keeps proper accounting records, which disclose with reasonable accuracy at any time the Board committees facilitate in-depth, efficient The objective of this Committee is to assist the financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible consideration of issues applying director Board in the discharge of its financial oversight forHIV safeguarding / AIDS the assets of the Company. expertise to specific areas. The committees role to ensure the company remains financially At CiplaQCIL, we stand by our motto that everyone the world. We have also done pioneering work in consider in detail matters mandated to them by sound. Theshould directors have accessare ultimately to lifesaving responsible medication. for the In internalthe paediatriccontrol of HIVthe Company.and addressed The directors the needs delegate of every documented Terms of Reference, considering responsibilitycrusade against for internalHIV, CiplaQCIL control tohas management. manufactured Standards kind ofand HIV systems patient, of from internal pregnant control mothers are designed to reports from management or from experts at andmedication implemented that has by revolutionizedmanagement HIVto provide treatment, reasonable babies assurance and from as tochildren the integrity to adults. and It’s reliability not surprising of quarterly committee meetings. Each committee thechanging financial it from statements something and which to safeguard, was previously verify and thatmaintain today accountability millions of patients of the worldwideCompany’s are assets. on our (v) Communications Committee is governed by a Committee Charter which is Theseconsidered systems a deathand controls sentence, include to something the proper which delegation antiretrovirals, of responsibilities and with within regular a clearly therapy defined they can live reviewed annually to ensure it remains relevant The objective of this Committee is to provide framework,can be managed effective like accountingany other chronicprocedures condition. and adequate for years segregation and lead ofa duties.near normal life. in line with the legal, regulatory framework, guidance on development of the Company governance best practices and trends in the Communications Strategy and oversee its TheIn 2001, directors Cipla acceptintroduced responsibility the world’s for first the financialever statementsWe are forproud the to year provide ended quality 31 Marchand affordable2020, which business environment. The committees report implementation. haverecommended been prepared 3-in-1 fixedusing appropriatedose combination accounting policiesmedicines supported to over by 1 reasonablemillion Ugandans and prudent living with to the Board with recommendations for Board judgments(Stavudine and+ Lamivudine estimates +in Nevirapine) conformity to with fight International AIDS. HIV. Financial It’s our Reportingcommitment Standards to the Ugandan and in the people manner to consideration and approval where required. requiredIt was made by the available Companies at less Act, than 2012. $1 Theper directorsday are continueof the opinion trailblazing that thethis financialcrusade and statements to ensure give that Board Meetings acompared true and tofair over view $12,000 of the perstate patient of the per financial year affairsHIV of treatmentthe Company is affordable and of its and operating accessible results. to all. The The Board is comprised of five standing directorsprevailing further in Uganda accept and responsibility most countries for thearound maintenance of accounting records which may be relied committees as follows; Audit and Risk, Finance, The conduct of board meetings is done in upon in the preparation of financial statements, as well as adequate systems of internal financial control. Nominations and Remuneration, Business strict adherence to the principles of good Development and Communications. corporate governance and in accordance Nothing has come to the attention of the directors to indicate that the Company will not remain a going with the Company’s Articles of Association and concern for at least the next twelve months from the date of this statement. Governance Charter. Substantive items requiring (i) Audit and Risk Committee deliberation are included on the Agenda which TheMolecule financial statements on pages 11 to 49, which haveBrand been prepared on the going concern basis, were The Audit and Risk Committee provides an together with supporting documentation is approved by the Board of Directors on ______and signed on its behalf by: oversight role, reviews, evaluates and makes circulated in advance to allow for members to Lamivudine, 150mg recommendations to the Board on risk and internalize and provide sufficient input at the Duovir-N compliance management. The Committee also meeting. The agenda is informed by priority Zidovudine, 300mg reviews the effectiveness of internal controls in decisions and discussions necessary to drive the Nevirapine, 200mg place. business forward.

A detailed report of the Committee is contained in The Board considers reports from the Board Lamivudine, 150mg pages ------of this report. committees. Directors are provided with Board Zidovudine, 300mg Duovir briefing papers containing management reports prior to each meeting scheduled to facilitate director preparedness. Minutes are approved and signed at the meeting following the one for which Efavirenz, 600mg (ii) Nominations and Remuneration Committee they were captured as a record. A minute book is maintained and stored in a safe. The Nominations and Remuneration Committee provides an oversight role, reviews, evaluates and Ample time is allowed for debate and constructive Lamivudine, 300mg makes recommendations to the Board in relation discussion. Decisions are reached by consensus Tenofovir Disoproxil Fumarate, 300mg Duomune to the Board recruitments, induction, training, following discussion and debate. Constructive ______development and performance management, the challenge is encouraged. Director Director Company’s strategic planning and performance and the Company’s human capital framework. Management is kept accountable for agreed ______Nevirapine, 200mg 2020 Nevimune______200 2020 actions arising from the minutes through an action A detailed report of the Committee is contained in log updated with progress which is discussed at pages ------of this report. Place:______Place:______the Board meetings. Efavirenz, 600mg Lamivudine, 300mg Trioday The Board also approves an annual calendar and Tenofovir Disoproxil Fumarate, 300mg adheres to it. Attendance of meetings remained (iii) Business Development Committee very good in the past financial year with well- Dolutegravir (as Sodium), 50mg The Business Development Committee reviews and reasoned absence of directors for health or travel Lamivudine, 300mg advises the Board on strategy implementation reasons. and any investment opportunities for the business. Tenofovir Disoproxil Fumarate, 300mg

4014 Annual Report 2019/2020 AnnualAnnual ReportReport 2019/20202019/2020 6115 E.to fulfil Directors’ its responsibility Interest Infree Shares of interference but It comes up with and reviews the viability of any ensuring accountability through reports to the business proposals for CiplaQCIL. board,ProductAs atat 31least March on a 2020, quarterly Portfolio the followingbasis. directors held a direct interest in the Company’s share capital as reflected in the table below: Board Committees (iv) Finance Committee Director Number of shares % Board committees facilitate in-depth, efficient The objective of this Committee is to assist the consideration of issues applying director Board in the discharge of its financial oversight expertise to specific areas. The committees role to ensure the company remains financially cAnti-MalarialsonsidMr. erEmmanuel in detail mattersKatongole mandated to them by sound.101,933,042 2.7912 doc“Caringumen forted life” Term is san of integral Refere ncparte, considof our eethosring at malaria cases and 6100 deaths, some of whom were reCiplaQCIL.porMr.ts Georgefrom We ma areWilliamnagemen firmly Baguma tgrounded or from inexpe therts belief at that women101,933,042 and children. In 2009, CiplaQCIL introduced2.7912 quarterly committee meetings. Each committee no life should be lost, especially not to a treatable a(v) fixed Communications dose artemisinin-based Committee combination, isdisease. gMr.over Nevin nedIn 2018, by J Bradford athe C ommitWorldtee Health Char Organizationter which is composed157,000 of two active ingredients: artermether0.0043 The objective of this Committee is to provide re(WHO)viewed estimated annuall ythat to etherensure were it remain a staggerings relevan 228t (20mg) and lumenfantrine (120mg). This treatment, Mr. Stevens Mwanje guidance19,400 on development of the Company 0.0005 inmillion line wimalariath the caseslegal, andreg u405,000latory framework, fatalities in the recommended for uncomplicated malaria, was Communications Strategy and oversee its goveworld.rnanc Africae baccountedest practices for andup to trend 93% sof in the the cases made readily available and affordablefor pregnant 204,042,484implementation. 5.5872 busiandne 94%ss enviof malariaronmen fatalities.t. The commit Accordingtees r epoto thert women, children and adults, and has saved many toWHO, the inBo 2015ard wiUgandath recommendatio recorded morens forthan Boa 7 rdmillion lives. consideration and approval where required. Board Meetings F.TheAuditors Board is comprised of five standing committees as follows; Audit and Risk, Finance, The conduct of board meetings is done in The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to Nominations and Remuneration, Business strict adherence to the principles of good continue in office in accordance with section 167 (2) of the Companies Act, 2012. Development and Communications. corporate governance and in accordance with the Company’s Articles of Association and G. Subsequent Events Governance Charter. Substantive items requiring (i)Molecule Audit and Risk Committee Brands deliberation are included on the Agenda which The directors are not aware of any matter or circumstance which is material to the financial The Audit and Risk Committee provides an together with supporting documentation is affairs of the company, which has occurred between 31 March 2020 and the date of approval oversight role, reviews, evaluates and makes circulated in advance to allow for members to of the financial statements, that has not been otherwise dealt with in the financial statements. recommendations to the Board on risk and internalize and provide sufficient input at the compliance management. The Committee also meeting.Lumartem The agenda is informed by priority By Order of the Board decisions and discussions necessary to drive the reviArtemether,ews the effec 20mgtiveness of internal controls in Lumet place. business forward. Lumefantrine, 120mg Lumular A detailed report of the Committee is contained in The Board considers reports from the Board pages ------of this report. committees. Directors are provided with Board briefing papers containing management reports prior to each meeting scheduled to facilitate ______director preparedness. Minutes are approved and signed at the meeting following the one for which COMPANY(ii) Nominations SECRETARY and Remuneration Committee they were captured as a record. A minute book is maintained and stored in a safe. The Nominations and Remuneration Committee provides an oversight role, reviews, evaluates and Ample time is allowed for debate and constructive makes recommendations to the Board in relation ______2020 discussion. Decisions are reached by consensus to the Board recruitments, induction, training, following discussion and debate. Constructive development and performance management, the challenge is encouraged. Company’s strategic planning and performance and the Company’s human capital framework. Management is kept accountable for agreed actions arising from the minutes through an action A detailed report of the Committee is contained in log updated with progress which is discussed at pages ------of this report. the Board meetings.

The Board also approves an annual calendar and adheres to it. Attendance of meetings remained (iii) Business Development Committee very good in the past financial year with well- The Business Development Committee reviews and reasoned absence of directors for health or travel advises the Board on strategy implementation reasons. and any investment opportunities for the business.

60164016 AnnualAnnual ReportReport 2019/20202019/2020 to fulfil its responsibility free of interference but It comes up with and reviews the viability of any Statement Of Directors’ Responsibilities Productensuring accountability throughPortfolio reports to the business proposals for CiplaQCIL. board, at least on a quarterly basis. The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the Board Committees financial year and of its operating results for that year. It also requires the directors to ensure that the (iv) Finance Committee Company keeps proper accounting records, which disclose with reasonable accuracy at any time the Board committees facilitate in-depth, efficient The objective of this Committee is to assist the financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible consideration of issues applying director Board in the discharge of its financial oversight for safeguarding the assets of the Company. expertise to specific areas. The committees role to ensure the company remains financially cAnti-Malarialsonsider in detail matters mandated to them by sound. TheHepatitis directors are ultimatelyB responsible for the internal control of the Company. The directors delegate doc“Caringumen forted life” Term is ans of integralRefere ncparte, consid of our eethosring at malaria cases and 6100 deaths, some of whom were responsibilityWe believe in for continued internal controlaccess toto themanagement. highest Standardsaffordable and systems medication. of internal Our role control in health are designedcare goes reCiplaQCIL.ports from We ma arenagemen firmlyt groundedor from einxpe therts atbelief that women and children. In 2009, CiplaQCIL introduced andquality implemented medicines atby affordablemanagement prices to provide – whether reasonable a beyond assurance providing as tothe the best integrity drugs andfor diseasesreliability to of quarterly committee meetings. Each committee the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. no life should be lost, especially not to a treatable a(v) fixed Communications dose artemisinin-based Committee combination, disease affects millions or a few hundreds. We have equipping doctors and their patients with the latest isdisease. gover nedIn 2018, by athe C ommitWorldtee HealthChar Organizationter which is composed of two active ingredients: artermether Theseembraced systems this andbelief controls and have include made the it aproper part of delegation information of responsibilities available, withinaimed aat clearly creating defined greater The objective of this Committee is to provide re(WHO)viewed estimated annuall ythat to e therensure were it remain a staggerings relevan 228t (20mg) and lumenfantrine (120mg). This treatment, framework,our “none shalleffective be denied” accounting ideology. procedures and adequateawareness segregation to fight ofagainst duties. the disease. Our various guidance on development of the Company inmillion line wimalariath the caseslegal, andreg u405,000latory framework, fatalities in the recommended for uncomplicated malaria, was medicines have changed the way Hepatitis B is Communications Strategy and oversee its goveworld.rnanc Africae baccountedest practices for andup to trend 93% sof in the the cases made readily available and affordablefor pregnant TheWe directorshave played accept a significant responsibility role forin the the financial statementsviewed, formaking the lifeyear with ended the disease 31 March not 2020,just a which implementation. busiandne 94%ss enviof malariaronmen fatalities.t. The commit Accordingtees r epoto thert women, children and adults, and has saved many havemanagement been prepared of Hepatitis using B appropriate with our quality, accounting policiespossibility supported but a byreality. reasonable and prudent toWHO, the inBo 2015ard wiUgandath recommendatio recorded morens forthan Boa 7 rdmillion lives. judgments and estimates in conformity with International Financial Reporting Standards and in the manner consideration and approval where required. required by the Companies Act, 2012. The directors are of the opinion that the financial statements give Board Meetings a true and fair view of the state of the financial affairs of the Company and of its operating results. The The Board is comprised of five standing directors further accept responsibility for the maintenance of accounting records which may be relied committees as follows; Audit and Risk, Finance, The conduct of board meetings is done in upon in the preparation of financial statements, as well as adequate systems of internal financial control. Nominations and Remuneration, Business strict adherence to the principles of good Development and Communications. corporate governance and in accordance Nothing has come to the attention of the directors to indicate that the Company will not remain a going with the Company’s Articles of Association and concern for at least the next twelve months from the date of this statement. Governance Charter. Substantive items requiring (i)Molecule Audit and Risk Committee Brands deliberation are included on the Agenda which TheMolecule financial statements on pages 11Brands to 49, which have been prepared on the going concern basis, were The Audit and Risk Committee provides an together with supporting documentation is approved by the Board of Directors on ______and signed on its behalf by: oversight role, reviews, evaluates and makes circulated in advance to allow for members to recommendations to the Board on risk and internalize and provide sufficient input at the Entecavir, 0.5mg / 1mg compliance management. The Committee also meeting.Lumartem The agenda is informed by priority Zentair decisions and discussions necessary to drive the reviArtemether,ews the effec 20mgtiveness of internal controls in Lumet place. business forward. Lumefantrine, 120mg Lumular A detailed report of the Committee is contained in The Board considers reports from the Board Tenofovir Disoproxil Fumarate, Texavir pages ------of this report. committees. Directors are provided with Board 300mg briefing papers containing management reports prior to each meeting scheduled to facilitate director preparedness. Minutes are approved and signed at the meeting following the one for which (ii) Nominations and Remuneration Committee they were captured as a record. A minute book is maintained and stored in a safe. The Nominations and Remuneration Committee provides an oversight role, reviews, evaluates and Ample time is allowed for debate and constructive makes recommendations to the Board in relation discussion. Decisions are reached by consensus to the Board recruitments, induction, training, following discussion and debate. Constructive ______development and performance management, the challenge is encouraged. Director Director Company’s strategic planning and performance and the Company’s human capital framework. Management is kept accountable for agreed ______2020 ______2020 actions arising from the minutes through an action A detailed report of the Committee is contained in log updated with progress which is discussed at pages ------of this report. Place:______Place:______the Board meetings.

The Board also approves an annual calendar and adheres to it. Attendance of meetings remained (iii) Business Development Committee very good in the past financial year with well- The Business Development Committee reviews and reasoned absence of directors for health or travel advises the Board on strategy implementation reasons. and any investment opportunities for the business.

4016 Annual Report 2019/2020 AnnualAnnual ReportReport 2019/20202019/2020 6117 RegulatoryE. Directors’ Interest In Shares Approvals Across the Region As at 31 March 2020, the following directors held a direct interest in the Company’s share capital as reflected in the table below:

Director Number of shares %

Mr. Emmanuel Katongole 101,933,042 2.7912

Mr. George William Baguma 101,933,042 2.7912

Mr. Nevin J Bradford 157,000 0.0043

Mr. Stevens Mwanje 19,400 0.0005

204,042,484 5.5872 Key products submitted;

1. Artemether 20mg+Lumef antrine F. Auditors120mg Tabs) 2. Dolutegravir 50mg+Lamivudine The300mg+Teno auditors,fovir Grant DF 300mg Thornton Tabs Certified Public Accountants, have expressed their willingness to 3.continue Efavirenz in600mg+Lamivudine office in accordance with section 167 (2) of the Companies Act, 2012. 300mg+Tenofovir DF 300mg Tabs G. Subsequent Events Registration status of Key products and FY21 pipeline The directors are not aware of any matter or circumstance which is material to the financial Current Approvals. affairs Expected of Country the company, Approvals. which has occurred between 31 March 2020 and the date of approval of Newcountrythe financial submissions statements, FY21. that has not been otherwise dealt with in the financial statements.

By Order of the Board Pharmacovigilance In transitioning into a more patient-centric organisation, ______CiplaQCIL is in the final stages COMPANYof establishing SECRETARY a robust pharmacovigilance system. ______2020 Pharmacovigilance is a critical quality imperative Standard Operating Procedure (SOP) for diligent where we adopt adequate measures to detect, follow-ups for each complaint. We inquire assess, monitor and prevent any adverse effects about the patient’s safety and obtain adequate faced by patients taking our medicines. information to assess the safety profile of the drug in question. We also organise regular awareness Our pharmacovigilance team ensures that our sessions for our field team to sensitise them on the products have a favourable risk-benefit profile importance of patient health and safety. and that they meet all regulatory compliances. During FY 2019/2020 the reporting compliance We have a robust redressal mechanism, which of adverse events to the respective regulatory includes a dedicated phone line and mailbox bodies was 100%. The cases, after being reported for receiving all safety-related complaints from to the respective authorities, are captured in the consumers, patients and healthcare professionals. database at the Drug Safety Department based We have also put in place an established at our parent company, Cipla Limited in India.

601818 AnnualAnnual ReportReport 2019/20202019/2020 Regulatory Approvals Across the Region StatementRegulatory Of Directors’ Responsibilities Approvals The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the financial year and of its operating results for that year. It also requires the directors to ensure that the Company keeps proper accounting records, which disclose with reasonable accuracy at any time the financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible for safeguarding the assets of the Company.

The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibility for internal control to management. Standards and systems of internal control are designed and implemented by management to provide reasonable assurance as to the integrity and reliability of the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. These systems and controls include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties.

The directors accept responsibility for the financial statements for the year ended 31 March 2020, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgmentsDNDI and estimates in conformityDNME with Angola International FinancialDPM Ivory Reporting Coast Standards and WHOin the manner Key products submitted; required by the Companies Act, 2012. The directors are of the opinion that the financial statements give 1. Artemether 20mg+Lumef antrine a true and fair view of the state of the financial affairs of the Company and of its operating results. The 120mg Tabs) directors further accept responsibility for the maintenance of accounting records which may be relied 2. Dolutegravir 50mg+Lamivudine upon in the preparation of financial statements, as well as adequate systems of internal financial control. 300mg+Tenofovir DF 300mg Tabs 3. Efavirenz 600mg+Lamivudine Nothing has come to the attention of the directors to indicate that the Company will not remain a going 300mg+Tenofovir DF 300mg Tabs concern for at least the next twelve months from the date of this statement. Registration status of Key products and FY21 pipeline The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were Current Approvals. approvedFDA by Ghana the Board of DirectorsFMHCA on ______andEthiopia signed onICRC its behalf by: ZAMRA Zambia Expected Country Approvals. Newcountry submissions FY21.

Pharmacovigilance In transitioning into a more patient-centric organisation, KPPB Kenya Mozambique NDA Uganda TFDA Tanzania CiplaQCIL is in the final stages of establishing a robust pharmacovigilance system.

Pharmacovigilance is a critical quality imperative Standard Operating Procedure (SOP) for diligent ______where we adopt adequate measures to detect, follow-ups for each complaint. We inquire Director Director assess, monitor and prevent any adverse effects about the patient’s safety and obtain adequate NMRC Namibia PMPB Malawi RBC Rwanda SSGMC South Sudan faced by patients taking our medicines. information to assess the safety profile of the drug ______2020 ______2020 in question. We also organise regular awareness Our pharmacovigilance team ensures that our sessions for our field team to sensitise them on the Place:______Place:______products have a favourable risk-benefit profile importance of patient health and safety. and that they meet all regulatory compliances. During FY 2019/2020 the reporting compliance We have a robust redressal mechanism, which of adverse events to the respective regulatory includes a dedicated phone line and mailbox bodies was 100%. The cases, after being reported for receiving all safety-related complaints from to the respective authorities, are captured in the consumers, patients and healthcare professionals. database at the Drug Safety Department based We have also put in place an established at our parent company, Cipla Limited in India. MOH Botswana MCAZ Zimbabwe SAHPRA - South Africa

18 Annual Report 2019/2020 AnnualAnnual ReportReport 2019/20202019/2020 6119 E. Directors’ Interest In Shares

OperationalAs at 31 March 2020, the following Highlights directors held a direct interest in the Company’s share capital as reflected in the table below:

Director Number of shares %

Mr.892 Emmanuel Katongole 32101,933,042 2.7912 million tablets million malaria Mr. George William Baguma 101,933,042 2.7912 packed treatments produced Mr. Nevin J Bradford 157,000 0.0043 Mr.966 Stevens Mwanje 4.419,400 0.0005 batches 204,042,484million ARV 5.5872 manufactured treatments rolled out

F. Auditors

The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to continue1 in office in accordance with section 57167 (2) of the Companies Act, 2012. G. Subsequentproduct Events product registration

Thelaunch directors are not aware of any matter or circumstancesubmissions which is material to the financial affairs of the company, which has occurred between 31 March 2020 and the date of approval of the financial statements, that has not been otherwise dealt with in the financial statements.

By Order of the Board 70 % 14 % waste water recycled renewable energy during the dry season lighting for new warehouse ______100 + trainings COMPANY SECRETARY 200 + suppliers 200 + ______scientists2020

384 69 staff contract staff 315 29 % permanent staff females

602020 AnnualAnnual ReportReport 2019/20202019/2020 StatementCiplaQCIL Of Directors’ ResponsibilitiesProduction The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the financialAchievements year and of its operating results forIn that year.FY It also2019/2020 requires the directors to ensure that the Company keeps proper accounting records, which disclose with reasonable accuracy at any time the financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible for safeguarding the assets of the Company.

The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibility for internal control to management. Standards and systems of internal control are designed and implemented by management to provide reasonable assurance as to the integrity and reliability of the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. These systems and controls include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties.

The directors accept responsibility for the financial statements for the year ended 31 March 2020, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates in conformity with International Financial Reporting Standards and in the manner required by the Companies Act, 2012. The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Company and of its operating results. The directors further accept responsibility for the maintenance of accounting records which may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control.

Nothing has come to the attention of the directo rs to indicate that the Company will not remain a going concern for at least the next twelve months from the date of this statement.

The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approved by the Board of Directors on ______and signed on its behalf by:

1. 59% increase in Production Output unit being moved out of the packing line to contain a unique serial number. This is a great step The Company manufactured 892 million tablets in ensuring traceability of the product within the compared to 526 million in FY 2019/2020. This market and further fight falsification of medicines was due to the increased demand along with which poses a significant threat in Africa. improvements in efficiencies. This subsequently resulted in the plant being able to operate more efficiently. 4. Completion of Construction of the Quality Control Laboratory 2. New Product Launch for the South African Market Construction of the new Quality Control laboratory was completed in December 2019. The ______Odimune (TEE), which is an antiretroviral new______laboratory has twice the capacity of the combining tenofovir, efavirenz and emtricitabine, Director previousDirector laboratory and will enhance the was introduced for supply to the South African product testing capacity of the facility. The market. Production commenced in March laboratory was designed according to the latest ______2020 and by the 2020 financial year end, 11 batches technological,______safety, 2020 quality and Good equivalent to 300,000 doses had been delivered. Laboratory Practices requirements. This Place:This product______has given CiplaQCIL entry into encompassesPlace:______automated detection systems for the South African antiretroviral market. gas leakages, segregated instrumentation space, dedicated chemistry areas, state-of-the-art facility and video conferencing facilities to 3. Acquisition of Track-and-Trace strengthen knowledge and skills transfer from System Technology other Cipla units.

The Packaging Line introduced the track-and-trace technology – a system that enables each individual

AnnualAnnual ReportReport 2019/2020 2019/2020 6121 E. Directors’ Interest In Shares

FinancialAs at 31 March 2020, theHighlights following directors held a direct interest in the Company’s share capital as reflected in the table below:

Director Number of shares %

Mr. Emmanuel Katongole 101,933,042 2.7912

Mr. George William Baguma 101,933,042 2.7912

Mr. Nevin J Bradford 157,000 0.0043

Mr. Stevens Mwanje 19,400 0.0005

204,042,484 5.5872

F. Auditors

The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to continue in office in accordance with section 167 (2) of the Companies Act, 2012.

G. Subsequent Events

The directors are not aware of any matter or circumstance which is material to the financial affairs of the company, which has occurred between 31 March 2020 and the date of approval of the financial statements, that has not been otherwise dealt with in the financial statements.

By Order of the Board 2020 2019 Financial Statistics Ushs Ushs Million Million For the year ______Revenue 192 682 195 136 Gross profit 36 945 53 490 COMPANYExpected credit SECRETARY losses on financial instruments 32 170 3 042 Operating (loss)/profit 31 803 (9 712) (Loss)/ profit before tax (35 732) 7 128 ______(Loss)/ profit for2020 the year (23 073) 6 786 Capital investments 14 893 12 437 At year end Total assets 248 467 287 899 Shareholders’ equity 145 237 168 310 Outstanding interest bearing debt 47 075 51 919 Cash flow extracts Net cash flows from operating activities 23 231 (49 423) Net cash flows used in investing activities (14 893) (1 221) Net cash flows used in financing activities (133) (11 118) Earnings per share Ushs Ushs Basic (6,32) 1,86

602222 AnnualAnnual ReportReport 2019/2020 2019/2020 Financial Highlights Statement Of Directors’ Responsibilities The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the financial year and of its operating results for that year. It also requires the directors to ensure that the Company keeps proper accounting records, which disclose with reasonable accuracy at any time the financialKey position Performance of Cipla Quality Chemical Statistics Industries Limited (“thefor Company”). They are also responsible for safeguarding the assets of the Company. the Year 2019/2020 The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibility for internal control to management. Standards and systems of internal control are designed and implemented by management to provide reasonable assurance as to the integrity and reliability of the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. These systems and controls include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties. Profit after tax (UGX Millions) and net TheTotal directors income accept in responsibility UGX Millions for the financial statementsprofit formargin the year ended 31 March 2020, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates in conformity with International Financial Reporting Standards and in the manner 227 315 required by the Companies Act, 2012. The directors are of the39 opinion 120 that 43 451 the financial 6 786 statements give a true and fair view of the state of the financial affairs of the Company and of its operating results. The directors211 further733 accept responsibility for the maintenance of accounting records which may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control.

195 136 192 682 Nothing has come to the attention of the directors to indicate 18that % the Company19 % will not remain a going

concern for at least the next twelve months from the date of this statement. 3 % 23 073

The financial statements on pages 11 to 49, which have been prepared on the going concern- 12 basis,% were approved by the Board of Directors on ______and signed on its behalf by: FY 17 FY 18 FY 19 FY 20

FY 17 FY 18 FY 19 FY 20 2020 2019 Financial Statistics Ushs Ushs Million Million For the year Revenue 192 682 195 136 Gross profit 36 945 53 490 Expected credit losses on financial instruments 32 170 3 042 Capital investment in Ugx. Millions Operating (loss)/profit 31 803 (9 712) (Loss)/ profit before tax (35 732) 7 128 (Loss)/ profit for the year (23 073) 6 786 ______Capital investments 14 893 1 221 Director 27 356 Director At year end Total assets 248 467 287 899 14 846 ______2020 ______12 437 2020 Shareholders’ equity 145 237 168 310 Outstanding interest bearing debt 47 075 51 919 Place:______7330 Place:______Cash flow extracts Net cash flows from operating activities 23 231 (49 423) FY 17 FY 18 FY 19 FY 20 Net cash flows from investing activities (14 893) (1 221) Net cash flows from financing activities (133) (11 118) Earnings per share Ushs Ushs Basic (6,32) 1,86

22 Annual Report 2019/2020 AnnualAnnual ReportReport 2019/2020 2019/2020 23 E. Directors’ Interest In Shares

FinancialAs at 31 March 2020, theHighlights following directors held a direct interest in the Company’s share capital as reflected in the table below:

Director Number of shares %

Mr. Emmanuel Katongole 101,933,042 2.7912

Mr. George William Baguma 101,933,042 2.7912

Mr. Nevin J Bradford 157,000 0.0043

Mr. Stevens Mwanje 19,400 0.0005

204,042,484 5.5872

F. Auditors

The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to continue in office in accordance with section 167 (2) of the Companies Act, 2012.

G. Subsequent Events UGX ‘000 UGX ‘000 UGX ‘000

The directors are not aware of anyUganda matter Sales or circumstance Export whichs is materialTotals to the financial affairs of the company, which has occurred between 31 March 2020 and the date of approval 2019of the financialACT statements, that has 20 not 692 been 828 otherwise 23 692 dealt 828 with in44 the 385 financial 656 statements.

By Order of the ARVsBoard 122 386 236 28 185 687 150 571 923 Hepatitis 56 086 1 099 57 185

2020 ACT 57 188 083 19 082 794 76 270 877

ARVs 110 936 489 6 045 000 116 981 489

______Hepatitis 899 202 - 899 202

COMPANY SECRETARY Uganda Sales Exports Totals

2019 ACT 11% 12% 23% ______2020 ARVs 63% 14% 77%

Hepatitis 0% 0% 0% 195 014 764

74% 26%

2020 ACT 30% 10% 40%

ARVs 57% 3% 60%

Hepatitis 0% 0% 0% 194 151 568

87% 13%

602424 AnnualAnnual ReportReport 2019/2020 2019/2020 Statement Of Directors’ Responsibilities

The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the financial year and of its operating results for that year. It also requires the directors to ensure that the Company keeps proper accounting records, which disclose with reasonable accuracy at any time the financialKey position Performance of Cipla Quality Chemical IndustriesStatistics Limited (“the for Company”). They are also responsible for safeguarding the assets of the Company. the Year 2019/2020 The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibility for internal control to management. Standards and systems of internal control are designed and implemented by management to provide reasonable assurance as to the integrity and reliability of the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. TheseAnalysis systems and controls of includeSales the proper delegation of responsibilities within a clearly defined framework,Growth effective inaccounting exports procedures sales and adequate segregation of duties. The directors accept responsibility for the financial statements for the year ended 31 March 2020, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates in conformity27 % Exports with International Financial Reporting Standards and13 % inExports the manner required by the Companies Act,73 2012. % Local The directorssales are of the opinion that the financial statements87 % Local givesales a true and fair view of the state of the financial affairs of the Company and of its operating results. The directors further accept responsibility for the maintenance of accounting records which may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control.

Nothing has come to the attention of the directo rs to indicate that the Company will not remain a going concern for at least the next twelve months from the date of this statement.

The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approved by the Board of Directors on ______and signed on its behalf by:

FY 20 Growth in ACT sales FY 19

40 % ACTS 23 % ACTS 60 % ARVs 77 % ARVs

______Director Director

______2020 ______2020

Place:______FY 20 Place:______FY 19

AnnualAnnual ReportReport 2019/2020 2019/2020 2525 E. Directors’ Interest In Shares

OurAs at 31 MarchPeople 2020, the following directors held a direct interest in the Company’s share capital as reflected in the table below: Our people are our biggest assets, not just for their knowledgeDirector and experienceNumber but of forshares their zeal to make a% difference to the world of healthcare. Mr. Emmanuel Katongole 101,933,042 2.7912

Mr. George William Baguma 101,933,042 2.7912

Mr. Nevin J Bradford 157,000 0.0043

Mr. Stevens Mwanje 19,400 0.0005

204,042,484 5.5872

F. Auditors

The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to continue in office in accordance with section 167 (2) of the Companies Act, 2012.

G. Subsequent Events

The directors are not aware of any matter or circumstance which is material to the financial affairs of the company, which has occurred between 31 March 2020 and the date of approval of the financial statements, that has not been otherwise dealt with in the financial statements.

ByCEO, Order Mr Nevin of Bradford, the Board with the CiplaQCIL team pose for a photograph with the World Health Organisation Country Representative in Uganda, Dr Yonas Tegegn Woldemariam. This picture was taken at CiplaQCIL’s exhibition booth during the Africa Hepatitis Summit after the Company was awarded an accolade as recognition of its contribution towards the fight against Hepatitis B in Uganda.

______

COMPANY SECRETARY

______2020

CEO, Mr Nevin Bradford, recieves an accolade from the Vice President of the Republic of Uganda, His Excellency Honourable Edward Sekandi, during the Africa Hepatitis Summit. This was in recognition of CiplaQCIL’s contribution towards the fight against Hepatitis B in Uganda.

602626 AnnualAnnual ReportReport 2019/20202019/2020 Our People Statement Of Directors’ Responsibilities The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the Our people are our biggest assets, not just for their financial year and of its operating results for that year. It also requires the directors to ensure that the Company keeps proper accounting records, which disclose with reasonable accuracy at any time the knowledge and experience but for their zeal to make a financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible difference to the world of healthcare. for safeguarding the assets of the Company. The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibility for internal control to management. Standards and systems of internal control are designed and implemented by management to provide reasonable assurance as to the integrity and reliability of the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. These systems and controls include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties.

The directors accept responsibility for the financial statements for the year ended 31 March 2020, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgmentsCiplaQCIL shareholders and estimates on a tour in ofconformity the manufacturing with International plant in Luzira FinancialIndustrial Park. Reporting Standards and in the manner required by the Companies Act, 2012. The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Company and of its operating results. The directors further accept responsibility for the maintenance of accounting records which may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control.

Nothing has come to the attention of the directors to indicate that the Company will not remain a going concern for at least the next twelve months from the date of this statement.

The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approved by the Board of Directors on ______and signed on its behalf by:

CEO, Mr Nevin Bradford, with the CiplaQCIL team pose for a photograph with the World Health Organisation Country Representative in Uganda, Dr Yonas Tegegn Woldemariam. This picture was taken at CiplaQCIL’s exhibition booth during the Africa Hepatitis Summit after the Company was awarded an accolade as recognition of its contribution towards the fight against Hepatitis B in Uganda.

CiplaQCIL staff from the packaging department during a team-building exercise.

______Director Director

______2020 ______2020

Place:______Place:______

CEO, Mr Nevin Bradford, recieves an accolade from the Vice President of the Republic of Uganda, His Excellency Honourable CEO’s of listed companies after signing a statement pertaining to female empowerment in celebration of Women’s Day. Edward Sekandi, during the Africa Hepatitis Summit. This was in recognition of CiplaQCIL’s contribution towards the fight against CEO, Nevin Bradford, attended the event and signed the statement to adopt the UN Women’s principles. Hepatitis B in Uganda.

26 Annual Report 2019/2020 AnnualAnnual ReportReport 2019/20202019/2020 6127 E.to fulfil Directors’ its responsibility Interest Infree Shares of interference but It comes up with and reviews the viability of any ensuring accountability through reports to the business proposals for CiplaQCIL. board,SustainabilityAs atat 31least March on a 2020, quarterly the followingbasis. Report directors held a direct interest in the Company’s share capital as reflected in the table below: Board Committees (iv) Finance Committee Director Number of shares % Board committees facilitate in-depth, efficient The objective of this Committee is to assist the consideration of issues applying director Board in the discharge of its financial oversight expertise to specific areas. The committees role to ensure the company remains financially considMr. erEmmanuel in detail mattersKatongole mandated to them by sound.101,933,042 2.7912 documented Terms of Reference, considering reporMr.ts Georgefrom ma Williamnagemen Bagumat or from experts at 101,933,042 2.7912 quarterly committee meetings. Each committee (v) Communications Committee is gMr.over Nevinned by J Bradforda Committee Charter which is 157,000 0.0043 reviewed annually to ensure it remains relevant The objective of this Committee is to provide in lineMr. wiStevensth the Mwanjelegal, regulatory framework, guidance19,400 on development of the Company 0.0005 governance best practices and trends in the Communications Strategy and oversee its business environment. The committees report 204,042,484implementation. 5.5872 to the Board with recommendations for Board consideration and approval where required. Board Meetings F.TheAuditors Board is comprised of five standing committees as follows; Audit and Risk, Finance, The conduct of board meetings is done in The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to Nominations and Remuneration, Business strict adherence to the principles of good continue in office in accordance with section 167 (2) of the Companies Act, 2012. Development and Communications. corporate governance and in accordance with the Company’s Articles of Association and G. Subsequent Events Governance Charter. Substantive items requiring (i) Audit and Risk Committee deliberation are included on the Agenda which The directors are not aware of any matter or circumstance which is material to the financial The Audit and Risk Committee provides an together with supporting documentation is affairs of the company, which has occurred between 31 March 2020 and the date of approval oversight role, reviews, evaluates and makes circulated in advance to allow for members to of the financial statements, that has not been otherwise dealt with in the financial statements. recommendations to the Board on risk and internalize and provide sufficient input at the compliance management. The Committee also meeting. The agenda is informed by priority Byrevi ewOrders the ofeff ecthetiven Boardess of internal controls in decisions and discussions necessary to drive the place. business forward.

A detailed report of the Committee is contained in The Board considers reports from the Board pages ------of this report. committees. Directors are provided with Board briefing papers containing management reports prior to each meeting scheduled to facilitate ______director preparedness. Minutes are approved and signed at the meeting following the one for which COMPANY(ii) Nominations SECRETARY and Remuneration Committee they were captured as a record. A minute book is maintained and stored in a safe. The Nominations and Remuneration Committee provides an oversight role, reviews, evaluates and Ample time is allowed for debate and constructive makes recommendations to the Board in relation ______2020 discussion. Decisions are reached by consensus to the Board recruitments, induction, training, following discussion and debate. Constructive development and performance management, the challenge is encouraged. Company’s strategic planning and performance and the Company’s human capital framework. Management is kept accountable for agreed actions arising from the minutes through an action A detailed report of the Committee is contained in log updated with progress which is discussed at pages ------of this report. the Board meetings.

The Board also approves an annual calendar and adheres to it. Attendance of meetings remained (iii) Business Development Committee very good in the past financial year with well- The Business Development Committee reviews and reasoned absence of directors for health or travel advises the Board on strategy implementation reasons. and any investment opportunities for the business.

60284028 AnnualAnnual ReportReport 2019/20202019/2020 to fulfil its responsibility free of interference but It comes up with and reviews the viability of any Statement Of Directors’ Responsibilities Sustainabilityensuring accountability through report s Reportto the business proposals for CiplaQCIL. board, at least on a quarterly basis. The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the Board Committees financial year and of its operating results for that year. It also requires the directors to ensure that the (iv) Finance Committee Company keeps proper accounting records, which disclose with reasonable accuracy at any time the Board committees facilitate in-depth, efficient The objective of this Committee is to assist the financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible consideration of issues applying director Board in the discharge of its financial oversight for safeguarding the assets of the Company. expertise to specific areas. The committees role to ensure the company remains financially consider in detail matters mandated to them by sound. The directors are ultimately responsible for the internal control of the Company. The directors delegate documented Terms of Reference, considering responsibility for internal control to management. Standards and systems of internal control are designed reports from management or from experts at and implemented by management to provide reasonable assurance as to the integrity and reliability of quarterly committee meetings. Each committee the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. (v) Communications Committee is governed by a Committee Charter which is These systems and controls include the proper delegation of responsibilities within a clearly defined reviewed annually to ensure it remains relevant The objective of this Committee is to provide framework, effective accounting procedures and adequate segregation of duties. in line with the legal, regulatory framework, guidance on development of the Company governance best practices and trends in the Communications Strategy and oversee its The directors accept responsibility for the financial statements for the year ended 31 March 2020, which business environment. The committees report implementation. have been prepared using appropriate accounting policies supported by reasonable and prudent to the Board with recommendations for Board judgments and estimates in conformity with International Financial Reporting Standards and in the manner consideration and approval where required. required by the Companies Act, 2012. The directors are of the opinion that the financial statements give Board Meetings a true and fair view of the state of the financial affairs of the Company and of its operating results. The The Board is comprised of five standing directors further accept responsibility for the maintenance of accounting records which may be relied committees as follows; Audit and Risk, Finance, The conduct of board meetings is done in upon in the preparation of financial statements, as well as adequate systems of internal financial control. Nominations and Remuneration, Business strict adherence to the principles of good Development and Communications. corporate governance and in accordance Nothing has come to the attention of the directors to indicate that the Company will not remain a going with the Company’s Articles of Association and concernAt CiplaQCIL, for at least the next we twelve believe months from inthe datedoing of this statement. Governance Charter. Substantive items requiring (i) Audit and Risk Committee deliberation are included on the Agenda which Thebusiness financial statements the right on pages way. 11 to 49, We which alsohave been prepared on the going concern basis, were The Audit and Risk Committee provides an together with supporting documentation is approvedbelieve by thethat Board it’sof Directors important on ______and to signedearn on its behalf by: oversight role, reviews, evaluates and makes circulated in advance to allow for members to recommendations to the Board on risk and internalize and provide sufficient input at the the trust of our customers and compliance management. The Committee also meeting. The agenda is informed by priority reviews the effectiveness of internal controls in decisions and discussions necessary to drive the gain a competitive advantage place. business forward. by conducting business in a A detailed report of the Committee is contained in The Board considers reports from the Board responsible manner. Therefore, we pages ------of this report. committees. Directors are provided with Board briefing papers containing management reports consider the social, economic, and prior to each meeting scheduled to facilitate environmental (SEE) impact of our director preparedness. Minutes are approved and signed at the meeting following the one for which activities throughout the business (ii) Nominations and Remuneration Committee they were captured as a record. A minute book is maintained and stored in a safe. to ensure the sustainability of the The Nominations and Remuneration Committee provides an oversight role, reviews, evaluates and Company and the resources we Ample time is allowed for debate and constructive makes recommendations to the Board in relation discussion. Decisions are reached by consensus to the Board recruitments, induction, training, rely on. We remain cognisant of following discussion and debate. Constructive ______development and performance management, the challenge is encouraged. Directorthe need to enhance shareholderDirector Company’s strategic planning and performance and the Company’s human capital framework. value through embracing ethical Management is kept accountable for agreed ______2020 ______2020 actions arising from the minutes through an action A detailed report of the Committee is contained in business practices which are log updated with progress which is discussed at pages ------of this report. Place:______Place:______the Board meetings. embedded in our policies, operating procedures, The Board also approves an annual calendar and adheres to it. Attendance of meetings remained (iii) Business Development Committee and Company values. very good in the past financial year with well- The Business Development Committee reviews and reasoned absence of directors for health or travel advises the Board on strategy implementation reasons. and any investment opportunities for the business.

4028 Annual Report 2019/2020 AnnualAnnual ReportReport 2019/2020 2019/2020 6129 E. Directors’ Interest In Shares

SustainabilityAs at 31 March 2020, the following Report directors held a direct interest in the Company’s share capital as reflected in the table below:

Director Number of shares % The Social, Economic and Environment (SEE) value driverMr. Emmanuel relates Katongole to our ethos of101,933,042 “caring for life” which 2.7912is

notMr. George only William about Baguma manufacturing101,933,042 life-saving medicines 2.7912

butMr. Nevin also J Bradford refers to generating value157,000 for the society in0.0043 which we operate. Value creation requires the long- Mr. Stevens Mwanje 19,400 0.0005 term impact assessment of any decision or action to ensure a balance of interest204,042,484 so that success is 5.5872 simultaneously achieved in social, economic and F. environmentAuditors aspects.

The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to continue in office in accordance with section 167 (2) of the Companies Act, 2012.

G. Subsequent Events who can provide support in the unlikely event CiplaQCIL’s commitment of a fire. The company has established an EHS The directors are not aware of any matter or circumstancecentral committee, which ischaired material by tothe the CEO financial with toaffairs sustainability of the company, which is hasas occurred betweenrepresentatives 31 March from 2020 all anddepartments, the date whichof approval demonstratedof the financial statements, in that this has not been otherwisemeets monthly dealt to withdiscuss in theEHS financial issues across statements. the Company. All factory staff are given the necessary ByReport. Order of the Board safety gear to ensure that they are well protected to prevent any potential injuries or infections. We Regulatory Environment strictly comply with all the required health and safety standards because any breach protocols not only compromises the quality of our products CiplaQCIL complies stringently with the stipulated but also the well-being of our employees. regulatory standards and supports measures that are aimed at improving the quality of All premises have clearly demarcated walkways ______our products and creating efficiencies in the and crossings. Staff are closely monitored to pharmaceutical industry. We will continue to seek ensure they comply with all policies implemented. COMPANYopportunities to SECRETARY contribute to the debate and work with the regulators to address pertinent OHS compliance monitoring activities like audits industry issues. (internal and external), walkthrough inspections, ______2020 sampling and analysis, trends and patterns, Safety is Paramount assessments, permits and certifications among others are conducted. These are done not only to We strictly adhere to occupational health ensure the efficiency of the equipment maintained and safety (OHS) standards at CiplaQCIL. but to ensure that operations are conducted This is managed and monitored through our safely. environmental health and safety (EHS) policies and procedures. These policies also guide the OHS training that includes induction for all new Company in creating a safe and healthy working staff, on-the-job training, in house and external environment for CiplaQCIL employees as well as training, and online education is provided to the any visitors to the facility. entire workforce.

It is crucial that a clean, risk-free environment Quality Management is maintained. We have properly trained first aiders in each department, with fully stocked CiplaQCIL ensures strict compliance with Good first aid kits. eW also have trained fire marshals

603030 AnnualAnnual ReportReport 2019/2020 2019/2020 StatementManufacturing Of Practices Directors’ (cGMP) Responsibilities and as such, all National Air Quality Standard. We conduct regular Sustainability Report processes are guided by the key components ground water quality sampling and analysis Theof the Companies Quality Management Act, 2012 requires System the (QMS). directors to prepareto monitorfinancial the statements impact of for our each activitie financials on the year, whichOur processe give a trues are and documented fair view ofto theensure state of the financialsurrounding affairs water of the quality Company in compliance as at thewith endthe of the financiala uniform yearway ofand implementing of its operating initiative resultss or for that year.conditions It also ofrequires approval the ofdirectors Wastewater to ensure Discharge. that the Companyactivities regardlesskeeps proper of wh accountingo does it. Thisrecords, ensures which disclose with reasonable accuracy at any time the financialthe consistent position quality of andCipla standard Quality of Chemical our Industries RegularLimited (“thepreventive Company”). maintenance They areis conducted also responsible forproducts. safeguarding This also the ensures assets busines of the Company.s continuity on boilers and their component parts such as The Social, Economic and Environment (SEE) value as the processes in place are easy to read and scrubbers to ensure that all emissions are disposed driver relates to our ethos of “caring for life” which is Thesubsequently directors areimplement. ultimately Staff responsible receive training for the internal controlin an environmentally of the Company. friendly The directors manner. delegate responsibilityon all operating for internalprocedure controls and to we management. continually Standards and systems of internal control are designed not only about manufacturing life-saving medicines andmonitor implemented to ensure bycompliance management with tothese provide reasonableAll assurance fuel dispensing as to theand integritystorage andfacilities reliability are of theprocedures. financial statements and to safeguard, verify andsurrounded maintain accountability with a properly of themaintained Company’s bund assets.wall but also refers to generating value for the society in These systems and controls include the proper delegationwith of oilresponsibilities interceptor to within control a clearly any water defined pollution framework,Caring f oreffective the Environment accounting procedures and adequatefrom accidentalsegregation spills of ofduties. heavy fuel oils. The facility which we operate. Value creation requires the long- also has a well-maintained storm water drainage term impact assessment of any decision or action TheA green directors environment accept responsibilityis maintained. for This the ensures financial statementschannel for to handlethe year storm ended water 31 inMarch compliance 2020, which havea clean been and prepared healthy environmentusing appropriate at the accounting premises policieswith supported the conditions by reasonable of approval and of prudentthe petroleum to ensure a balance of interest so that success is judgmentsand its surroundings. and estimates The ingreen conformity environment with International storage Financial permit. Reporting Standards and in the manner simultaneously achieved in social, economic and requiredeliminate sby dust, the improveCompaniess the Act, air 2012.quality The and directors are of the opinion that the financial statements give areduces true and run fairoff that view could of the lead state to of the the siltation financial of affairsWaste of the is managed Company in anda manner of its operatingthat is protective results. The environment aspects. directorsthe lower further catchment accept of responsibilitythe surroundings. for the maintenanceof ofthe accounting environment. records We support which maythe reductionbe relied and upon in the preparation of financial statements, as well prasevention adequate of waste systems generation of internal by financialpromoting control. Annual environmental audits are undertaken in and facilitating the reuse and safe recycling of Nothingline with hasthe comeNational to theEnvironmental attention of Management the directors to indicatewaste, thattraining the staff,Company and encouraging will not remain waste a going concernAct (NEMA) for atregulations least the nextas well twelve as regular months from the datesegregation of this statement. at the source generation. By CiplaQCIL’s commitment who can provide support in the unlikely event EHS inspections that monitor adherence to the contracting locally certified /approved solid waste of a fire. The company has established an EHS Theenvironmental financial statementspolicies, rules, on and pages regulations. 11 to 49, which havehandling been preparedcompanie son as the our going partners, concern we fulfilbasis, our were to sustainability is as central committee, chaired by the CEO with approved by the Board of Directors on ______and signedresponsibility on its behalfto ensure by: that all waste is destroyed representatives from all departments, which All equipment and supplies procured and / disposed in an environmentally sound and demonstrated in this meets monthly to discuss EHS issues across the installed at the Company premises comply friendly manner. Records of waste generation, Company. All factory staff are given the necessary with the National Environment (Management disposal and destruction are inventoried and report. safety gear to ensure that they are well protected of Ozone Depleting Substances and Products) analysed periodically. to prevent any potential injuries or infections. We Regulations, 2001. All standby generators and Regulatory Environment strictly comply with all the required health and equipment/plant installed are equipped with noise- Through trainings and induction of all new safety standards because any breach protocols reduction capabilities and the noise generated personnel on the EHS policies, regulations, and not only compromises the quality of our products environmentally sound practices, we ensure that CiplaQCIL complies stringently with the stipulated is regularly monitored to ensure compliance with but also the well-being of our employees. all personnel participate and are fully compliant regulatory standards and supports measures the National Environment (Noise Standard and with the environmental conservation / protection that are aimed at improving the quality of Control) Regulations, 2003. This ensures limited All premises have clearly demarcated walkways practices. our products and creating efficiencies in the or no distraction for colleagues at our Company and crossings. Staff are closely monitored to pharmaceutical industry. We will continue to seek premises and the surrounding environment. ensure they comply with all policies implemented. opportunities to contribute to the debate and Caring for our People work with the regulators to address pertinent The Company’s approved and certified Effluent OHS compliance monitoring activities like audits industry issues. Treatment Plant (ETP) handles both industrial CiplaQCIL generates direct and indirect (internal and external), walkthrough inspections, and domestic wastewater generated through employment and business opportunities for sampling and analysis, trends and patterns, Safety Is Paramount our operations. To save energy and water Ugandans in various industries including transport, assessments, permits and certifications among ______resource, the treated wastewater is often reused ______logistics and domestic procurement amongst others are conducted. These are done not only to Directorfor watering the grass and plants around the Directorothers. These employment opportunities further We strictly adhere to occupational health ensure the efficiency of the equipment maintained premises and this is beneficial to the environment benefits thousands of people in the communities and safety (OHS) standards at CiplaQCIL. but to ensure that operations are conducted especially during the dry spells. There exists a fully where we operate. This is managed and monitored through our ______2020 ______2020 safely. equipped ETP laboratory to monitor discharge environmental health and safety (EHS) policies quality and to ensure that discharge is within CiplaQCIL is an equal opportunity employer and procedures. These policies also guide the OHS training that includes induction for all new Place:permissible______limits. Place:and does______not discriminate on gender, age, Company in creating a safe and healthy working staff, on-the-job training, in house and external disability, ethnicity or religious grounds. CiplaQCIL environment for CiplaQCIL employees as well as training, and online education is provided to the In compliance with the conditions of approval employs a multi-skilled workforce with competitive any visitors to the facility. entire workforce. of wastewater discharge, for which a permit is technical and professional skills. Our professional issued, wastewater is sampled monthly and sent development initiatives ensure that talent, skills It is crucial that a clean, risk-free environment Quality Management to national reference laboratories for comparison and competences are nurtured. Recruitment is is maintained. We have properly trained first of analytical results. All gaseous emissions are merit-based to ensure that the organisation’s set aiders in each department, with fully stocked CiplaQCIL ensures strict compliance with Good regularly monitored to ensure compliance with strategic objectives are achieved. first aid kits. We also have trained fire marshals

30 Annual Report 2019/2020 AnnualAnnual ReportReport 2019/2020 2019/2020 6131 E.Breakdown Directors’ of Interest CiplaQCIL In Shares staff: satisfaction survey was undertaken to identify areas that need to be addressed. We believe As at 31 March 2020, the following directors held thata direct indentifying interest and in theaddressing Company’s these share issues will capitalGender as reflected in Number the table below: % ensure that stakeholders’ concerns are taken into account. Female 110 29% Director Number of shares % Male 274 71% Corporate Social Responsibility

Total: 384 Mengo Blood Bank initiative Mr. Emmanuel Katongole According101,933,042 to World Health Organization 2.7912 The Company recognises the role employees standards (WHO), Uganda needs at least 350,000 Mr. George William Baguma 101,933,042 2.7912 play in ensuring the Company remains cost- units of safe blood annually. However, the Country effective and sustainable. We therefore aim to only collects 250,000 units of blood which leaves Mr. Nevin J Bradford 157,000 0.0043 attract, develop and retain talented staff that can a deficit of approximately 100,000 units of blood. deliver the desired results for the Company and Mr. Stevens Mwanje It is upon19,400 this background that Rotary Uganda0.0005 country. CiplaQCIL focuses on developing internal conceived an idea of constructing a blood capabilities alongside attracting, developing and 204,042,484bank at Mengo Hospital. The total cost 5.5872 retaining critical skills from the market. Employees of this project was UGX 4.2 billion (US$1,103,000) receive the relevant training to empower and and CiplaQCIL was one of the major contributors enhance their ability to deliver excellent results towards this cause. Currently, the blood bank meets for the organisation. We also care about the F. Auditors 12% of the total national blood requirements. health and well-being of our employees and the Company has put various measures in place to The auditors, Grant Thornton Certified Public AccTheountants, Compa haveny continue expresseds to supporttheir willingness this worthy to enhance the social wellbeing of its employees. continue in office in accordance with section 167 cause(2) of by the sponsoring Companies their Act, annual 2012. fundraising events, to expand the blood bank and reduce the Wellness activities such as Corporate League G. Subsequent Events shortage of blood in Uganda and save lives. games with other entities, and participation in charity runs are arranged for staff to encourage The directors are not aware of any matter or circumstanceFighting Dreaded which is Diseases material to the financial a balanced, healthy lifestyle and teamwork. The affairs of the company, which has occurred between 31 March 2020 and the date of approval Company provides medical care for all employees The Company supported the Africa Hepatitis of the financial statements, that has not been otherwise dealt with in the financial statements. and their dependents. B summit with a contribution of UGX 95 million (US$ 25,000.) The theme for the summit was “Eliminating ByCompliance Order of theMeasures Board Viral Hepatitis in Africa; Implementing the Viral Hepatitis Strategy”. The event aimed at providing an opportunity for countries to develop and work A key sustainability pillar is ensuring that we towards implementing action plans, sharing best- comply with and meet all existing legal and practice guidelines and lessons learnt in the fight regulatory obligations. This has been as a result against viral hepatitis. of the development of a robust compliance ______regulatory framework. We have complied with Improving Access to Medicine all regulations during the year, including meeting statutory obligations and timelines. There were no CiplaQCIL supports local non-governmental COMPANYpenalties and SECRETARYfines issued against the Company organizations with free medical camps in during the year and thus no disruptions to the communities where access to treatment and business. healthcare is a challenge. This promotes access ______2020 to quality medicines in communities that would Stakeholder Engagement not ordinarily be able to afford some of these treatments. CiplaQCIL operates in a highly regulated In the past financial year, the Company donated 300 environment that requires engaging various doses of Lumartem to the Corporate League aimed key stakeholders to communicate, align and at supporting a free medical camp at Alebtong. understand the different regulatory requirements. The Company disseminates these requirements Improving Sanitation through different platforms such as Town Hall meetings and various forms of electronic The Company donated sanitation tools to the communication. This has created a good working Luzira Community in a bid to promote health and relationship with our various stakeholders. sanitation. The Company also supported the Luzira In the past year, the Board constituted a community in the construction of a community Communications Committee aimed at addressing well aimed at improving access to clean water. various stakeholder concerns. A stakeholder

6032 AnnualAnnual ReportReport 2019/2020 2019/2020 Breakdown of CiplaQCIL staff: satisfaction survey was undertaken to identify Statement Of Directors’ Responsibilities areas that need to be addressed. We believe that indentifying and addressing these issues will Gender Number % The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, ensure that stakeholders’ concerns are taken into which give a true and fair view of the state of the financial affairs of the Company as at the end of the account. Female 110 29% financial year and of its operating results for that year. It also requires the directors to ensure that the Company keeps proper accounting records, which disclose with reasonable accuracy at any time the Male 274 71% Corporate Social Responsibility financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible for safeguarding the assets of the Company. Total: 384 Mengo Blood Bank initiative The directors are ultimately responsible for the internal control of the Company. The directors delegate According to World Health Organization responsibility for internal control to management. Standards and systems of internal control are designed The Company recognises the role employees standards (WHO), Uganda needs at least 350,000 and implemented by management to provide reasonable assurance as to the integrity and reliability of play in ensuring the Company remains cost- units of safe blood annually. However, the Country the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. effective and sustainable. We therefore aim to only collects 250,000 units of blood annually which These systems and controls include the proper delegation of responsibilities within a clearly defined attract, develop and retain talented staff that can leaves a deficit of approximately 100,000 units of framework, effective accounting procedures and adequate segregation of duties. deliver the desired results for the Company and blood annually. It is upon this background that country. CiplaQCIL focuses on developing internal Rotary Uganda conceived an idea of constructing The directors accept responsibility for the financial statements for the year ended 31 March 2020, which capabilities alongside attracting, developing and a blood bank at Mengo Hospital. The total cost have been prepared using appropriate accounting policies supported by reasonable and prudent retaining critical skills from the market. Employees of this project was US$1,103,000 and CiplaQCIL judgments and estimates in conformity with International Financial Reporting Standards and in the manner receive the relevant training to empower and was one of the major contributors towards this required by the Companies Act, 2012. The directors are of the opinion that the financial statements give enhance their ability to deliver excellent results cause. Currently, the blood bank meets 12% of the a true and fair view of the state of the financial affairs of the Company and of its operating results. The for the organisation. We also care about the total national blood requirements. health and well-being of our employees and the directors further accept responsibility for the maintenance of accounting records which may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control. Company has put various measures in place to The Company continues to support this worthy enhance the social wellbeing of its employees. cause by sponsoring their annual fundraising Nothing has come to the attention of the directors to indicate that the Company will not remain a going events, to expand the blood bank and reduce the concern for at least the next twelve months from the date of this statement. Wellness activities such as Corporate League shortage of blood in Uganda and save lives. games with other entities, and participation in The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were charity runs are arranged for staff to encourage Fighting dreaded diseases a balanced, healthy lifestyle and teamwork. The approved by the Board of Directors on ______and signed on its behalf by: Company provides medical care for all employees The Company supported the Africa Hepatitis and their dependents. B summit with a contribution of US$ 25,000. The theme for the summit was “Eliminating Compliance Measures Viral Hepatitis in Africa; Implementing the Viral Hepatitis Strategy”. The event aimed at providing an opportunity for countries to develop and work A key sustainability pillar is ensuring that we towards implementing action plans, sharing best- comply with and meet all existing legal and practice guidelines and lessons learnt in the fight regulatory obligations. This has been as a result against viral hepatitis. of the development of a robust compliance regulatory framework. We have complied with Improving access to medicine all regulations during the year, including meeting statutory obligations and timelines. There were no CiplaQCIL supports local non-governmental penalties and fines issued against the Company organizations with free medical camps in during the year and thus no disruptions to the communities where access to treatment and business. healthcare is a challenge. This promotes access to quality medicines in communities that would Stakeholder Engagement not ordinarily be able to afford some of these ______treatments. Director Director CiplaQCIL operates in a highly regulated In the past financial year, the Company donated 300 environment that requires engaging various doses of Lumartem to the Corporate League aimed ______2020 ______2020 key stakeholders to communicate, align and at supporting a free medical camp at Alebtong. understand the different regulatory requirements. The Company disseminates these requirements Place:______Place:______Improving sanitation through different platforms such as Town Hall meetings and various forms of electronic The Company donated sanitation tools to the communication. This has created a good working Luzira Community in a bid to promote health and relationship with our various stakeholders. sanitation. The Company also supported the Luzira In the past year, the Board constituted a community in the construction of a community Communications Committee aimed at addressing well aimed at improving access to clean water. various stakeholder concerns. A stakeholder

32 Annual Report 2019/2020 AnnualAnnual ReportReport 2019/20202019/2020 6133 E. Directors’ Interest In Shares

CorporateAs at 31 March 2020, the followingSocial directors held a direct interest in the Company’s share Responsibilitycapital as reflected in the table below:Highlights Director Number of shares % The Sustainable Development Goals aim to end poverty,

promoteMr. Emmanuel human Katongole well-being, protect101,933,042 the plant and 2.7912

ensureMr. George prosperity William Baguma for all by 2030.101,933,042 Our focus ties in 2.7912 strongly with these goals. Mr. Nevin J Bradford 157,000 0.0043

Mr. Stevens Mwanje 19,400 0.0005

204,042,484 5.5872

F. Auditors

The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to continue in office in accordance with section 167 (2) of the Companies Act, 2012.

G. Subsequent Events

The directors are not aware of any matter or circumstance which is material to the financial affairs of the company, which has occurred between 31 March 2020 and the date of approval of the financial statements, that has not been otherwise dealt with in the financial statements.

By Order of the Board

______

COMPANY SECRETARY

______2020

603434 AnnualAnnual ReportReport 2019/20202019/2020 Corporate Social StatementGiving OfBack Directors’ To TheResponsibilities Community The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, whichIn line give with a ourtrue etho ands fairof c viewaring of for the lif statee, we of support the financial various affairs corporate of the social Company responsibility as at the end of the Responsibility Highlights financialinitiatives year to help and impr of itsove operatingpeople’s resultslives infor the thatcommunit year. Ity. also requires the directors to ensure that the Company keeps proper accounting records, which disclose with reasonable accuracy at any time the financialCiplaQCIL position runs an of internship Cipla Quality programme, Chemical and Industries also trains Limited students (“the fromCompany”). secondary They areschools also responsible The Sustainable Development Goals aim to end poverty, forwithin safeguarding the community. the assets of the Company. promote human well-being, protect the plant and TheWe directorsalso donate are ultimatelymedicine responsibleto non-governmental for the internal organizations control of theto supportCompany. medical The directors camps delegatein responsibilitycommunities forwhere internal access control to treatmentto management. and quality Standards healthcare and systems is challenging. of internal control are designed ensure prosperity for all by 2030. Our focus ties in and implemented by management to provide reasonable assurance as to the integrity and reliability of strongly with these goals. the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. These systems and controls include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties.

The directors accept responsibility for the financial statements for the year ended 31 March 2020, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates in conformity with International Financial Reporting Standards and in the manner required by the Companies Act, 2012. The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Company and of its operating results. The directors further accept responsibility for the maintenance of accounting records which may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control.

Nothing has come to the attention of the directors to indicate that the Company will not remain a going concern for at least the next twelve months from the date of this statement.

The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approved by the Board of Directors on ______and signed on its behalf by:

CEO, Nevin Bradford, hands over a donation of food items and water to the Minister of Health, Honourable Dr Jane Ruth Aceng, to support the COVID-19 taskforce.

______Director Director

______2020 ______2020

Place:______Place:______

Mr Mark Ngole, CiplaQCIL’s PR Executive, with Mr CiplaQCIL Company Pharmacist and Director, Mr John Kamili, Regulatory Affairs Senior Manager, Sam Opio, hands over sanitation tools to leaders pose for a photogragh with the team from the of the Luzira community. CiplaQCIL donated these Malaria Control Program taskforce at the Ministry items to help promote health and sanitation in the of Health after donating branded T-shirts. community.

34 Annual Report 2019/2020 AnnualAnnual ReportReport 2019/2020 2019/2020 6135 E. Directors’ Interest In Shares

StakeholderAs at 31 March 2020, the following Engagement directors held a direct interest in the Company’s share capital as reflected in the table below: Our stakeholders are persons, groups or entities who areDirector directly impacted byNumber our ofactivities shares and decisions, % and those who can influence our operations. In line withMr. Emmanuel our philosophy Katongole of conducting101,933,042 business in a 2.7912

transparentMr. George William Bagumaand ethical manner,101,933,042 we have established2.7912

anMr. effectiveNevin J Bradford stakeholder communication157,000 model. We0.0043 regularly engage with our stakeholders to identify and Mr. Stevens Mwanje 19,400 0.0005 assess their needs, which form a critical part of our overall business strategy. 204,042,484 5.5872

F. Auditors Stakeholders Why they are important Engagement channels The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to The pillar of our business • Town hall sessions continue in office in accordance with section 167 (2) of the Companies Act, 2012. Activities – they contribute • Meetings towards efficiency, effectiveness • Intranet / employee G.CiplaQCIL Subsequent staff Events and help to ensure that we communication platforms meet our business objectives. • Team-building activities The directors are not aware of any matter or circumstance which is material to the financial affairs of the company, which has occurred between 31 March 2020 and the date of approval of the financial statements, thatEnforce has notpolicies been which otherwise impact dealt •with Meetings in the financial statements. our operations and long-term • Written communication Government and regulators By Order of the Board business objectives • Facility tours

Media is a channel that helps • Media interviews disseminate information about • Facility tours Media CiplaQCIL to all our various • Media trainings stakeholders. • Press releases

______• Conference calls • Meetings (one-on-one and COMPANY SECRETARY group) • Investor /shareholder Shareholders /investors Key providers of financial capital communication platforms (Emails, SMS) ______2020 • Annual General Meeting

• Regular interaction through CSR initiatives Help us develop our business • Communication through the ecosystem and thereby we media focus on creating shared value. • Communication via social Communities They are also the reason why media channels (Facebook, we’re focused on delivering on Twitter, Instagram and our ethos of “caring for life”. LinkedIn) • Educational public service announcement campaigns

603636 AnnualAnnual ReportReport 2019/20202019/2020 Stakeholder Engagement Statement Of Directors’ Responsibilities The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the Our stakeholders are persons, groups or entities who financial year and of its operating results for that year. It also requires the directors to ensure that the Company keeps proper accounting records, which disclose with reasonable accuracy at any time the are directly impacted by our activities and decisions, financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible and those who can influence our operations. In line for safeguarding the assets of the Company. with our philosophy of conducting business in a The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibility for internal control to management. Standards and systems of internal control are designed transparent and ethical manner, we have established and implemented by management to provide reasonable assurance as to the integrity and reliability of the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. an effective stakeholder communication model. We These systems and controls include the proper delegation of responsibilities within a clearly defined regularly engage with our stakeholders to identify and framework, effective accounting procedures and adequate segregation of duties. assess their needs, which form a critical part of our The directors accept responsibility for the financial statements for the year ended 31 March 2020, which have been prepared using appropriate accounting policies supported by reasonable and prudent overall business strategy. judgments and estimates in conformity with International Financial Reporting Standards and in the manner required by the Companies Act, 2012. The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Company and of its operating results. The directors further accept responsibility for the maintenance of accounting records which may be relied Stakeholders Why they are important Engagement channels upon in the preparation of financial statements, as well as adequate systems of internal financial control. The pillar of our business • Town hall sessions Activities – they contribute • Meetings Nothing has come to the attention of the directors to indicate that the Company will not remain a going towards efficiency, effectiveness • Intranet / employee concern for at least the next twelve months from the date of this statement. CiplaQCIL staff and help to ensure that we communication platforms meet our business objectives. • Team-building activities The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approved by the Board of Directors on ______and signed on its behalf by: Enforce policies which impact • Meetings our operations and long-term • Written communication Government and regulators business objectives • Facility tours

Media is a channel that helps • Media interviews disseminate information about • Facility tours Media CiplaQCIL to all our various • Media trainings stakeholders. • Press releases

• Conference calls • Meetings (one-on-one and group) • Investor /shareholder Shareholders /investors Key providers of financial capital communication platforms (Emails, SMS) • Annual General Meeting ______Director Director • Regular interaction through CSR initiatives Help us develop our business • Communication through the ______2020 ______2020 ecosystem and thereby we media focus on creating shared value. • Communication via social Place:______Place:______Communities They are also the reason why media channels (Facebook, we’re focused on delivering on Twitter, Instagram and our ethos of “caring for life”. LinkedIn) • Educational public service announcement campaigns

36 Annual Report 2019/2020 AnnualAnnual ReportReport 2019/20202019/2020 6137 E. Directors’ Interest In Shares

CorporateAs at 31 March 2020, the followingGov directoernancers held a direct interest in the Company’s share Statementcapital as reflected in the table below: Director Number of shares % Board Roles and Responsibilities Effective leadership and oversight of all the Company’s affairs is managed through TheMr. Board Emmanuel is the ultimateKatongole decision-making body, delegation101,933,042 of the responsibility of the day- 2.7912 except with respect to those matters reserved to-day management of the Company to a to theMr. shareholdersGeorge William by Bagumalaw, regulation or by competent101,933,042 executive management team. Other2.7912 the Company’s Articles of Association. The responsibilities of the Board include ensuring that Mr. Nevin J Bradford 157,000 0.0043 Board is accountable for the performance and there is compliance with legislative and statutory proper running of the affairs of the Company in requirements, ensuring stakeholder engagement Mr. Stevens Mwanje 19,400 0.0005 accordance with the Companies Act, the Uganda and participation, and identifying and monitoring key risks among many others. Securities Listing Rules and the Capital Markets 204,042,484 5.5872 Code of Corporate Governance Guidelines Board Composition

F.The Auditorsprimary responsibilities of the Board are to; The Board is composed of eleven (11) members. Four (4) are Executive Directors (ED) while • provide strategic direction The auditors, Grant Thornton Certified Public Accsevenountants, (7) are have Non-Executive expressed theirDirectors willingness (NED). to • approve policy and planning continue in office in accordance with section 167 The(2) ofstructure the Companies of the Board Act, ensure2012. s that there is • provide governance oversight and monitoring independent judgement and a diversity of views • and to ensure accountability and integrity. G. Subsequent Events and opinions thus protecting and preserving the best interests of the Company’s stakeholders. The directors are not aware of any matter or circumstance which is material to the financial Category affairsDirector of the company, which has occurredCommittees between 31 Served March 2020 and the Nationalitydate of approval of the financial statements,(ED/NED) that has not been otherwise dealt with in the financial statements. Emmanuel Board Chairman • Finance 1 Ugandan By OrderKatongole of the Board& ED • Communications • Finance 2 Nevin Bradford CEO/ED British • Communications George • Communications 3 ED Ugandan Baguma • Business Development Joseph • Audit and Risk (Chairperson) 4 INED Ugandan ______Baliddawa • Nominations and Remuneration • Audit and Risk COMPANY5 Mark Daly SECRETARYNED • Finance (Chairperson) South African • Communications • Nomination and Remuneration ______6 Paul Miller2020 NED • Communications (Chairperson) South African • Business Development Geena • Nominations and Remuneration 7 NED Indian Malhotra • Business Development Dr Peter •Nominations and Remuner ation 8 INED Mugyen yi (Chairperson) Ugandan •Business Development Dr Ranjana • Business Development (Chairperson) 9 NED American Pathak • Finance 10 Samuel Opio ED • Business Development Ugandan Stevens • Finance 11 NED Ugandan Mwanje • Audit and Risk

Key: • ED – Executive Director • NED – Non-Executive Director • INED – Independent Non-Executive Director

603838 AnnualAnnual ReportReport 2019/2020 2019/2020 StatementTo enhance the Of decision-making Directors’ Responsibilities process, a discharge of their responsibilities and their diverse range of skills and experience exists within contribution to decision making. They are required Thethe Board.Companies The Executive Act, 2012 requiresDirectors, the being directors the to prepareto actfinancial in the statements best interests for eachof the financial Company year, as a whichimplementors give a trueof strategy and fair are view equipped of the state with ofthe the financialwhole affairs and ofto thepromote Company the success as at the of endthe Companyof the by financialexpertise year required and ofto itsprovide operating sound results governance for that year. exercisingIt also requires diligence the directorsand care. to ensure that the Companyoversight andkeeps make proper business accounting decisions. records, Being which in disclose with reasonable accuracy at any time the a uniquely placed business environment, Board As part of every meeting, directors have an financial position of Cipla Quality Chemical Industries Limitedopportunity (“the Company”). to declare Theyany interest are also in responsibleany item on forskills safeguarding requirements the are assets largely of influenced the Company. by strong thematic experience. Our Board is comprised the agenda that could result into conflict of interest which serves as regular reminder of the need Theof members directors with are ultimatelyskills and experienceresponsible infor the the internal control of the Company. The directors delegate following areas: to exclude themselves from participation in any responsibility for internal control to management. Standardsdiscussion and systems or decision of internal of which control they are are designed conflicted. and· implementedStrategy by management to provide reasonable assurance as to the integrity and reliability of the· financialProduct statements development and to safeguard, verify and maintainBoard accountability Induction ofand the DevelopmentCompany’s assets. These· systemsQuality andcontrol controls include the proper delegation of responsibilities within a clearly defined framework,· Compliance effective accounting procedures and adequateThe segregationBoard ensures of that duties. directors possess the skills, · Health administration and research knowledge and experience necessary to fulfil their The· directorsCorporate accept finance responsibility and accounting for the financial statementsduties. forDirectors the year are keptended abreast 31 March of applicable 2020, which have· beenRisk prepared management using appropriate accounting policieslegislation supported and regulations,by reasonable changes and to prudent rules, standards judgments· Sales and and estimates Marketing in conformity with Internationaland Financial codes, Reportingas well as relevantStandards sector and developments, in the manner required by the Companies Act, 2012. The directors are ofwhich the couldopinion potentially that the impact financial the statementsCompany. give a true and fair view of the state of the financial affairs of the Company and of its operating results. The directorsBoard Appointments further accept responsibility and Tenure for the maintenanceOn of appointment, accounting recordseach new which Director may beundergoes relied upon in the preparation of financial statements, as well asinduction adequate and systems receives of an internal induction financial pack control. The appointment of Directors is governed by the containing relevant governance information such NothingCompany’s has Articles come toof theAssociation attention and of theis subject directors to indicateas the thatGovernance the Company Charte willr and not Committees remain a going concernto regulatory for at approval least the in next line twelvewith applicable months from the dateTerms of thisof Reference.statement. The new director also legislation and regulation. gets an opportunity to tour the Company so The financial statements on pages 11 to 49, which have beenas to preparedunderstand on the the business going concern operations basis, and were approvedThe Nominations by the andBoard Remuneration of Directors Committee on ______and signedto interact on itswith behalf Management. by: The Company reviews potential candidates for appointment as Secretary is responsible for the induction and directors and recommends the preferred candidate ongoing education of Directors. to the Board for approval. Newly appointed Directors hold office until the first Annual General The Board was trained during the year on Meeting (AGM) after their appointment where Corporate Governance which focused on the they retire from office and are presented to the Board’s role and responsibilities to ensuring shareholders for appointment. Newly appointed sustainability of the Company. Directors receive a letter of appointment setting out the terms of their appointment. Board Effectiveness and Evaluation

At the previous AGM, Mr Stevens Mwanje was The Board conducted its annual effectiveness appointed as a director. Being the first AGM since review in order to evaluate the performance listing on the Uganda Securities Exchange, all other of the Board, individual directors and the CEO. Non-Executive Directors also retired and were Findings of this review shall inform the director’s presented for appointment to shareholders. training plan for the current financial year. In the past financial year, the Board appointed Ms Geena Malhotra to fill a casual vacancy. She shall Delegation Of Authority ______hold office until the upcoming AGM where she shall ______Directorretire and be presented to the shareholders for Director The Board delegates its authority to Committees appointment. to facilitate effectiveness, timely discharge of ______2020 ______obligations as well 2020 as ensure detailed analysis At each AGM of the Company, one-third of the of issues by the experts at both committee Board, excluding Executive Directors are also Place:______Place:and management______level. Each committee has a required to retire from office and are eligible for re-election. Directors eligible for rotation will be Charter approved by the board which outlines the presented for re-appointment at the upcoming AGM. obligations of the committee. The Board also delegates day to day management to the Chief Executive who controls, Directors’ Duties oversees and accounts for operations of the Company. The Board however retains control Directors are cognisant of their fiduciary duty and independent, objective oversight through a to the company which underpins them in the well-governed framework allowing management

AnnualAnnual ReportReport 2019/2020 2019/2020 3939 E.to fulfil Directors’ its responsibility Interest Infree Shares of interference but It comes up with and reviews the viability of any ensuring accountability through reports to the business proposals for CiplaQCIL. board,As atat 31least March on a 2020, quarterly the followingbasis. directors held a direct interest in the Company’s share capital as reflected in the table below: Board Committees (iv) Finance Committee Director Number of shares % Board committees facilitate in-depth, efficient The objective of this Committee is to assist the consideration of issues applying director Board in the discharge of its financial oversight expertise to specific areas. The committees role to ensure the company remains financially conMr.sider Emmanuel in detail mKatongoleatters mandated to them by sound.101,933,042 2.7912 documented Terms of Reference, considering repoMr.rts Georgefrom manage Williamme Bagumant or from experts at 101,933,042 2.7912 quarterly committee meetings. Each committee (v) Communications Committee is goverMr. Nevinned by J Bradforda Committee Charter which is 157,000 0.0043 reviewed annually to ensure it remains relevant The objective of this Committee is to provide in lineMr. with Steven thes Mwanjelegal, regulatory framework, guidance19,400 on development of the Company 0.0005 governance best practices and trends in the Communications Strategy and oversee its business environment. The committees report 204,042,484implementation. 5.5872 to the Board with recommendations for Board consideration and approval where required. Board Meetings F.The Auditors Board is comprised of five committees as follows; Audit and Risk, Finance, The conduct of board meetings is done in The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to Nominations and Remuneration, Business strict adherence to the principles of good continue in office in accordance with section 167 (2) of the Companies Act, 2012. Development and Communications. corporate governance and in accordance with the Company’s Articles of Association and G. Subsequent Events Governance Charter. Substantive items requiring (i) Audit and Risk Committee deliberation are included on the Agenda which The directors are not aware of any matter or circumstance which is material to the financial The Audit and Risk Committee provides an together with supporting documentation is affairs of the company, which has occurred between 31 March 2020 and the date of approval oversight role, reviews, evaluates and makes circulated in advance to allow for members to of the financial statements, that has not been otherwise dealt with in the financial statements. recommendations to the Board on risk and internalize and provide sufficient input at the compliance management. The Committee also meeting. The agenda is informed by priority Byreview Orders the ofeffectivenes the Boards of internal controls in decisions and discussions necessary to drive the place. business forward.

A detailed report of the Committee is contained in The Board considers reports from the Board pages 44-45 of this report. committees. Directors are provided with Board briefing papers containing management reports prior to each meeting scheduled to facilitate ______director preparedness. Minutes are approved and signed at the meeting following the one for which COMPANY(ii) Nominations SECRETARY and Remuneration Committee they were captured as a record. A minute book is maintained and stored in a safe. The Nominations and Remuneration Committee provides an oversight role, reviews, evaluates and Ample time is allowed for debate and constructive makes recommendations to the Board in relation ______2020 discussion. Decisions are reached by consensus to the Board recruitments, induction, training, following discussion and debate. Constructive development and performance management challenge is encouraged. and the Company’s human capital framework. A detailed report of the Committee is contained in Management is kept accountable for agreed pages 46-47 of this report. actions arising from the minutes through an action log updated with progress which is discussed at the Board meetings.

(iii) Business Development Committee The Board also approves an annual calendar and The Business Development Committee reviews and adheres to it. Attendance of meetings remained advises the Board on strategy implementation very good in the past financial year with well- and any investment opportunities for the business. reasoned absence of directors for health or travel reasons.

604040 AnnualAnnual ReportReport 2019/2020 2019/2020 to fulfil its responsibility free of interference but It comes up with and reviews the viability of any Statement Of Directors’ Responsibilities BOARD ensuring accountability through reports to the business proposals for CiplaQCIL. 28 May board, at least on a quarterly basis. The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, CC 17 May which give a true and fair view of the state of the financial affairsA of the Company as at the end of the Board Committees financial year and of its operating results for that year. It also requires the directors to ensure that the (iv) Finance Committee NRC N/A 27 May N/A Company keeps proper accounting records, N/Awhich N/A disclose with reasonable accuracy at any time the

Board committees facilitate in-depth, efficient The objective of this Committee is to assist the financial position ofQ4 Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible Board in the discharge of its financial oversight FC consideration of issues applying director for safeguarding the assets27 May of the Company. expertise to specific areas. The committees role to ensure the company remains financially consider in detail matters mandated to them by sound. The directors are ultimately responsible for the internal control of the Company. The directors delegate BDC 27 May N/A N/A N/A N/A N/A N/A N/A N/A documented Terms of Reference, considering responsibility for internal control to management. Standards and systems of internal control are designed reports from management or from experts at and implemented by management to provide reasonable assurance as to the integrity and reliability of N/A ARC N/A 26 May N/AN/A N/A N/A N/A N/A N/A N/A N/A quarterly committee meetings. Each committee the financial statements and to safeguard, verify and maintain accountabilityN/A of the N/A N/ACompany’s N/A assets. (v) Communications Committee is governed by a Committee Charter which is These systems and controls include the proper delegation of responsibilities within a clearly defined reviewed annually to ensure it remains relevant The objective of this Committee is to provide framework, effective accounting procedures and adequate segregation of duties. and Remuneration – Nominations BOARD 26 Feb A in line with the legal, regulatory framework, guidance on development of the Company A governance best practices and trends in the Communications Strategy and oversee its The directors accept responsibility for the financial statements for the year ended 31 March 2020, which CC AA 24 Feb A N/A business environment. The committees report implementation. have been prepared using appropriate accounting policies supportedA by reasonable and prudent to the Board with recommendations for Board judgments and estimates in conformity with International Financial Reporting Standards and in the manner N/A NRC 25 Feb N/A N/A consideration and approval where required. required by the Companies Act, 2012. The directors are of theA opinion that the financial statements give Board Meetings a true and fair view Q3 of the state of the financial affairs of the Company and of its operating results. The A FC 25 Feb N/A N/A N/A The Board is comprised of five standing directors further accept responsibility for the maintenance of accounting records which may be NRC and Risk Audit – relied committees as follows; Audit and Risk, Finance, The conduct of board meetings is done in upon in the preparation of financial statements, as well as adequate systems of internal financial control. Nominations and Remuneration, Business BDC 25 Feb AA N/A N/A N/A A A N/A N/A strict adherence to the principles of good N/A N/A N/A Development and Communications. corporate governance and in accordance Nothing has come to the attention of the directors to indicate that the Company will not remain a going with the Company’s Articles of Association and concern for at least the next twelve months from the date of this statement. ARC N/A 25 Feb N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Governance Charter. Substantive items requiring (i) Audit and Risk Committee deliberation are included on the Agenda which The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approved by the Board of Directors on ______and signed on its behalf by: The Audit and Risk Committee provides an together with supporting documentation is BOARD 27 Nov oversight role, reviews, evaluates and makes circulated in advance to allow for members to internalize and provide sufficient input at the recommendations to the Board on risk and CC Director Emmanuel Katongole Nevin Nevin Bradford Dr Ranjana Ranjana Dr Pathak Paul Miller Paul Dr Peter Peter Dr Mugyenyi Stevens Stevens Mwanje Geena Malhotra George George Baguma Mark Daly Mark Sam Opio Sam Joseph Joseph Baliddawa compliance management. The Committee also meeting. The agenda is informed by priority reviews the effectiveness of internal controls in decisions and discussions necessary to drive the NRC 26 Nov N/A N/A N/A N/A place. business forward. N/A Q2

A detailed report of the Committee is contained in The Board considers reports from the Board FC pages ------of this report. committees. Directors are provided with Board BDC 26 Nov N/A N/A N/A briefing papers containing management reports N/A prior to each meeting scheduled to facilitate director preparedness. Minutes are approved and N/A 26 Nov ARC N/A N/A N/A N/A N/A N/A signed at the meeting following the one for which N/A (ii) Nominations and Remuneration Committee they were captured as a record. A minute book is 26 Nov maintained and stored in a safe. BOARD The Nominations and Remuneration Committee provides an oversight role, reviews, evaluates and

Ample time is allowed for debate and constructive ARC - Present Apology A – Committee the of a member – Not 13 Aug makes recommendations to the Board in relation CC discussion. Decisions are reached by consensus to the Board recruitments, induction, training, following discussion and debate. Constructive ______– Business Development Committee Development BDC – Business Committee – Finance N/A 13 Aug NRC N/A N/A development and performance management, the N/A challenge is encouraged. Director Director Company’s strategic planning and performance Q1 and the Company’s human capital framework. Management is kept accountable for agreed ______2020 FC ______2020 actions arising from the minutes through an action A detailed report of the Committee is contained in BDC 13 AUG N/A N/A log updated with progress which is discussed at N/A pages ------of this report. Place:______Place:______the Board meetings. ARC N/A 13 AUG N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A The Board also approves an annual calendar and adheres to it. Attendance of meetings remained (iii) Business Development Committee very good in the past financial year with well- The Business Development Committee reviews and reasoned absence of directors for health or travel - Committee not yet constituted N/Aconstituted yet not Committee - advises the Board on strategy implementation reasons. FC Committee Communications – Director Emmanuel Katongole Nevin Nevin Bradford Paul Miller Paul Ranjana Dr Pathak Dr Peter Peter Dr Mugyenyi Stevens Stevens Mwanje Geena Malhotra George George Baguma Mark Daly Mark Opio Sam Joseph Joseph Baliddawa Attendance of meetings in the past fi nancial year was as shown in the table below table the in shown as was year nancial fi the past in meetings of Attendance Key: and any investment opportunities for the business. CC

Annual Report 2019/2020 41 40 Annual Report 2019/2020 Annual Report 2019/2020 6141 E.Inter Directors’nal Aud Interestit In Shares leading up to an announcement of the Company’s financial results. The Company has also put in place TheAs role at of31 InternalMarch 2020,Audit isthe to followingprovide assurance directors held aa governancedirect interest charter in thewhic Company’sh prohibits the share dealing in to thecapital Board as and reflected the Executive in the tableManagement below: securities by directors, employees, their close family on governance, risk management, and internal members and anyone with access to price-sensitive control processes by analysing, measuring and information. Director Number of shares % evaluating the effectiveness of systems and controls in place. The Company during the past financial To ensure compliance with this rule, the Company year appointed an internal auditor charged with communicates closed periods for trading in its shares to all employees and the Directors of the the Mr.responsibility Emmanuel of Katongole reviewing the effectiveness of 101,933,042 2.7912 internal controls and reporting on the same to the Board. AuditMr. and George Risk Committee.William Baguma 101,933,042 2.7912 The Company’s closed periods are in effect from st The Minternalr. Nevin a udJ Bradforditor reports quarterly to the Audit 1 October157,000 to the publication of the interim 0.results0043 and Risk Committee and has exclusive access to the and from 1st April to the publication of the end of ChaMr.irper Stevensson of theMwanje Committee. year 19,400results. 0.0005

Risk Management 204,042,484During other periods, where employees are in5.5872 possession of price-sensitive information, closed The Audit and Risk Committee is charged with the periods are imposed on these employees. responsibility of reviewing the effectiveness of the risk F.mana Auditorsgement framework in the organisation. Compliance with the policies is monitored on an ongoing basis. The TheBoar auditors,d has put Grantin place Thornton a Risk Management Certified Public Accountants, have expressed their willingness to Policycontinue which s etsin officeout a inmechan accordanceism through with wh sectionich 167 Finan(2) of cialthe CompaniesReporting Act, an d2012. Disclosures risk shall be managed in the organisation. G. Subsequent Events Financial performance is monitored through In addition, the Board through the Audit and Risk quarterly reports from management. The CommTheitte directorse is in the are process not awareof rolling of outany a matterRisk or circumstanceperformance which is formally is material reported to tothe sh arefinancialholders Manaaffairsgement of frameworkthe company, and awhich Disaster has Recovery occurred betweenthrough 31 Marchthe annual 2020 audited and the financia datel statements.of approval The Plan,of all the aim financialed at mana statements,ging risk that that may has affect not thebeen otherwiseaudited accountsdealt with are in presented the financial to and statements. considered sustainability of the business. by shareholders at the Annual General Meeting. By Order of the Board Relationship with Stakeholders CiplaQCIL financial statements are produced in accordance with International Financial Reporting The Board and Management are cognisant of the Standards (IFRS) and the requirements of all the need to uphold the interests of all stakeholders and relevant statutes, rules and regulations. aims at putting these interests into consideration in decision making. Codes and Regulations ______The need to balance the diverse interest of the The Company is cognisant of the implications COMPANYstakeholders is SECRETARYkey. Effort is ma de to balance any non-compliance would have on the these often-divergent interests. The need to meet patients and the environmen t. Complying with our stakeholder interests was the reason behind all applicable legislation, regulations, standards, formation of the Communications Committee ______2020 codes and policies is therefore integral to the during the past financial year. It is expected that Company business. Various Standard Operating the Committee with support from management Procedures (SOPs) are in place to enhance will create a proposed investment strategy that staff ability to implement the various compliance builds shared value for the organisation and its requirements. various stakeholders. More so, we look forward to the formation of strong partnerships and a The Board has delegated the responsibility for good relationship with our stakeholders to ensure compliance to management and monitors this sustainability of our business. through the compliance function. There exists a Compliance Policy which sets out the principles Statement on Insider Dealing and standards for compliance management in the Company and articulates responsibilities of all The Uganda Securities Exchange Listing Rules personnel in relation to managing compliance risk. requires Directors, their close family members and certain employees who have access to insider The Audit and Risk Committee is responsible for information not to deal in securities in periods reviewing reports from the compliance function,

604242 AnnualAnnual ReportReport 2019/20202019/2020 Internal Audit leading up to an announcement of the Company’s Statementreviewing the Ofeffectiveness Directors’ of Responsibilitiescompliance The Company Secretary financial results. The Company has also put in place controls in place, and ensuring compliance risk is The role of Internal Audit is to provide assurance a governance charter which prohibits the dealing in Theeffectively Companies mitigated. Act, 2012 requires the directors to prepareThe financial Company statements Secretary for is theeach custodian financial of year, to the Board and the Executive Management securities by directors, employees, their close family which give a true and fair view of the state of the financialgovernance affairs for of thethe Board, Company and as assuch at assiststhe end of the on governance, risk management, and internal members and anyone with access to price-sensitive financialThe Compliance year andfunction of its is alsooperating responsible results for that year.all the It alsomembers requires of the the Boarddirectors by providingto ensure that the control processes by analysing, measuring and information. Companyfor assessing keeps the proper impact accountingof new and records, proposed which discloseindependent with reasonable advice andaccuracy guidance. at any time the evaluating the effectiveness of systems or controls financiallegislation positionand regulations of Cipla and Quality reporting Chemical on the Industries Limited (“the Company”). They are also responsible in place. The Company during the past financial To ensure compliance with this rule, the Company forsame safeguarding to Management the assets and the of theAudit Company. and Risk The Company Secretary is a member of the year appointed an internal auditor charged with communicates closed periods for trading in its Committee. Institute of Certified Secretaries (ICSA). She the responsibility of reviewing the effectiveness of shares to all employees and the Directors of the The directors are ultimately responsible for the internal controlserves ofas the Company.Secretary toThe the directors Board and delegate all the internal controls and reporting on the same to the Board. responsibilityThe Board also for appreciatesinternal control the torequirement management. StandardsCommittees and systems of the of Board. internal control are designed Audit and Risk Committee. andfor theimplemented Company byto adheremanagement to good to corporateprovide reasonable assurance as to the integrity and reliability of The Company’s closed periods are in effect from thegovernance financial standardsstatements and and practices to safeguard, and verify andThe maintain Company accountability Secretary guides of the the Company’s Directors assets.on st The internal auditor reports quarterly to the Audit 1 October to the publication of the interim results Thesethis informs systems the and Board controls in fulfilling include its the oversight proper delegationtheir of fiduciaryresponsibilities dutieswithin and responsibilitiesa clearly defined through st and Risk Committee and has exclusive access to the and from 1 April to the publication of the end of framework,and strategic effective role. The accounting Company’s procedures corporate and adequateinduction segregation and continuous of duties. training programmes and Chairperson of the Committee. year results. governance framework is enshrined in Articles of ensures that the highest standards of corporate TheAssociation, directors the accept Companies responsibility Act particularly for the financial the statementsgovernance for theare yearmet duringended the31 establishmentMarch 2020, whichand Risk Management During other periods, where employees are in haveCode been of Corporate prepared Governance using appropriate (Table accountingF) and policiesimplementation supported byof reasonableprocesses. and prudent possession of price-sensitive information, closed judgmentsinternational and best estimates practice. in conformity with International Financial Reporting Standards and in the manner The Audit and Risk Committee is charged with the periods are imposed on these employees. required by the Companies Act, 2012. The directors are ofTo theenable opinion the thatBoard the to financial function effectively,statements all give responsibility of reviewing the effectiveness of the risk aThe true Company and fair has view implemented of the state aof Whistleblowing the financial affairsdirectors of the have Company full and and timely of itsaccess operating to information results. The management framework in the organisation. Compliance with the policies is monitored on an directorsPolicy, along further with accept a Whistleblower responsibility hotline, for the which maintenance that of may accounting be relevant records to the which proper may discharge be relied ongoing basis. uponprovides in the a platformpreparation for employeesof financial and statements, any as well ofas their adequate duties. Thissystems includes of internal information financial such ascontrol. The Board has put in place a Risk Management stakeholder to raise concerns in respect of corporate announcements, investor communications Policy which sets out a mechanism through which Financial Reporting and Disclosures Nothingany suspected has come unethical to the conduct. attention Reporting of the directors of to indicateand other that developments the Company which will not may remain affect a thegoing risk shall be managed in the organisation. concernunethical for conduct at least is thestrongly next encouraged. twelve months from the dateCompany of this statement.and its operations. All directors have Financial performance is monitored through access to the services of the Secretary. In addition, the Board through the Audit and Risk quarterly reports from management. The TheAccess financial to Information statements on and pages Resources 11 to 49, which have been prepared on the going concern basis, were Committee is in the process of rolling out a Risk performance is formally reported to shareholders approved by the Board of Directors on ______and signedIn 2019, on a corporateits behalf by:governance audit was Management framework and a Disaster Recovery through the annual audited financial statements. The Executive management and the Board interact conducted as required by the Capital Markets Plan, all aimed at managing risk that may affect the audited accounts are presented to and considered regularly . The Executive Committee Members Authority (CMA) Corporate Governance Guidelines sustainability of the business. by shareholders at the Annual General Meeting. are invited to attend Board meetings where to check the level of compliance with sound necessary. Directors have unrestricted access to governance principles. The scope of the audit Relationship with Stakeholders CiplaQCIL financial statements are produced in management and Company information, as well covered conduct of meetings, Board performance accordance with International Financial Reporting as the resources required to carry out their roles and evaluation, delegation of duties, stakeholder The Board and Management are cognisant of the Standards) (IFRS and the requirements of all the and responsibilities. This includes external legal engagement and financial reporting. The findings need to uphold the interests of all stakeholders and relevant statutes, rules and regulations. and other professional advice at the Company’s were discussed by the Board and corrective aims at putting these interests into consideration in expense where necessary. actions have been implemented. decision making. Codes and Regulations The Directors also have unlimited access to the Going Concern The need to balance the diverse interest of the The Company is cognisant of the implications advice and services of the Company Secretary, stakeholders is key. Effort is made to balance any non-compliance would have on the who assists in providing any information or The Directors have sufficient reason to believe that these often-divergent interests. The need to meet patients and the environment. Complying with documentation that may be required to facilitate the Company has adequate resources to continue our stakeholder interests was the reason behind all applicable legislation, regulations, standards, the discharge of their duties and responsibilities. operating as a going concern. formation of the Communications Committee codes and policies is therefore integral to the during the past financial year. It is expected that Company business. Various Standard Operating ______the Committee with support from management Procedures (SOPs) are in place to enhance will create a proposed investment strategy that staff ability to implement the various compliance Director Director builds shared value for the organisation and its requirements. various stakeholders. More so, we look forward ______2020 ______2020 to the formation of strong partnerships and a The Board has delegated the responsibility for good relationship with our stakeholders to ensure compliance to management and monitors this Place:______Place:______sustainability of our business. through the compliance function. There exists a Compliance Policy which sets out the principles Statement on Insider Dealing and standards for compliance management in the Company and articulates responsibilities of all The Uganda Securities Exchange Listing Rules personnel in relation to managing compliance risk. requires Directors, their close family members and certain employees who havesacce s to insider The Audit and Risk Committee is responsible for information not to deal in securities in periods reviewing reports from the compliance function,

42 Annual Report 2019/2020 AnnualAnnual ReportReport 2019/2020 2019/2020 6143 E. Directors’ Interest In Shares

BoardAs at 31 March 2020,Committees the following directors held a direct interest in the Company’s share capital as reflected in the table below: Report of the Audit and Risk Committee Director Number of shares %

i. Constitution Mr. Emmanuel Katongole 101,933,042Names Aug Oct Nov Nov Feb 2.7912May 19 19 19 19 290 20 The Audit and Risk Committee consists of six membersMr. George comprising William one Baguma Independent Non- 101,933,042 2.7912 Joseph ü ü ü ü ü 20ü Executive Director who also acts as the Chairman, Baliddawa May Mr. Nevin J Bradford 157,000 0.0043 two Non-Executive Directors and three members from outside the Board. Mark Mr. Stevens Mwanje Daly19,400 ü ü ü ü ü 0.0005ü

The Committee is governed by the Audit and Risk 204,042,484Stevens 5.5872 Committee Charter which spells out responsibilities Mwanje ••• ü ü ü of the Committee. Christine Nabiryo ü ü ü ü ü ü F.During Auditors the year, membership of the Committee was as follows: Timothy The auditors, Grant Thornton Certified Public Accountants,Basiimampora have üexpressed ü theirü willingness ü ü toü continue in office in accordance with section 167 (2) of the Companies Act, 2012. Oscar Joseph Baliddawa Chairman Manuga ü ü ü v ü ü G. Subsequent Events

The directors are not aware of any matter or circumstance which is material to the financial Key Markaffairs Daly of the company, whichMember has occurred between 31 March 2020 and the date of approval of the financial statements, that has not been otherwiseü Present dealt v Absent with in the• Not financial yet a member statements.

By Order of the Board The Chairman of the Committee, after each Stevens Mwanje Member Committee meeting presents a report to the Board with recommendations for approval.

The following activities were undertaken by the Christine Nabiryo Member Committee:

______a. In respect of financial statements: i. The Committee received and reviewed COMPANYTimothy Basiimampora SECRETARY Member the interim and annual financial statements presented by management prior to submission and approval by the Board. The Committee obtained assurance from the external auditors ______Oscar Manuga2020 Member that the financial statements had been prepared in accordance with the Companies Act, 2012, the Ugandan Securities Exchanges Listing Rules, International Financial Reporting Standards (IFRS) and other legal and regulatory requirements. The Internal Auditor, Chief Executive Officer and After their review, the Committee presented and Chief Finance Officer attend the Committee recommended the financial statements to the meetings by invitation t o provide clarifications Board for approval. wherever necessary. The external auditor issued an unqualified audit II. Meetings / responsibilities opinion on the company’s financial statements for and auditors the year ended 31 March 2020.

The Committee met six times in the financial year. Attendance of members in each of these meetings was as follows:

604452 AnnualAnnual ReportReport 2019/2020 2019/2020 Statementii. Ensured that Of the Directors’ annual financial Responsibilities statements vii. Assessed the adequacy of the performance of fairly present the financial position of the the internal audit function and adequacy of the TheCompany, Companies as at Act,the 2012end ofrequires the financial the directors year and to prepareavailable financial internal statements audit forresources each financial and found year, them whichthe result give ofa trueoperations and fair and view cash of theflows state for ofthe the financialto beaffairs satisfactory. of the Company as at the end of the financialfinancial yearyear andand ofconsidered its operating the basisresults on for which that year. It also requires the directors to ensure that the Companythe Company keeps had proper been accountingdetermined records, to be a which discloseviii. with Considered reasonable reports accuracy of the atinternal any time and the financialgoing concern. position of Cipla Quality Chemical Industries Limitedexternal (“the auditors Company”). on the They internal are alsocontrol, responsible including for safeguarding the assets of the Company. internal financial controls and maintenance of i . Considered accounting treatments, significant effective internal control systems. Theunusual directors transactions are ultimately and accounting responsible judgements. for the internal control of the Company. The directors delegate responsibility for internal control to management. Standardsd. In and respect systems of ofcompliance internal control requirements are designed andv. Considered implemented the byappropriateness management toof providethe reasonable assurance as to the integrity and reliability of theaccounting financial policies statements in place and andto safeguard, recommended verify and maintaini. Monitored accountability compliance of the with Company’s applicable assets. legislation Thesechanges systems thereto. and controls include the proper delegation andof responsibilities governance codes within anda clearly reviewed defined reports from framework, effective accounting procedures and adequateinternal segregation audit, ofexternal duties. auditors and compliance v. Reviewed and discussed the Management detailing the extent of this. The directors and report accept of theresponsibility external auditor. for the financial statements for the year ended 31 March 2020, which have been prepared using appropriate accounting policiesii. Noted supported that noby complaintsreasonable wereand prudentreceived judgmentsvi. Noted that and thereestimates were in no conformity material reports with International Financialthrough Reportingthe Whistleblower Standards Hotline. and in the manner requiredor complaints by the received Companies concerning Act, 2012. accounting The directors are of the opinion that the financial statements give apractices, true and internal fair view audit, of theinternal state financialof the financial controls, affairs ofiii. the Reviewed Company and and approved of its operating the annual results. compliance The directorscontent of further the annual accept financial responsibility statements, for the internal maintenance ofplan. accounting records which may be relied uponcontrols in theand preparation related matters. of financial statements, as well as adequate systems of internal financial control. e. In respect of the annual report: Nothingvii. Reviewed has come any significantto the attention legal andof thetax directors matters to indicate that the Company will not remain a going concernthat could for have at least a material the next impact twelve on months the financial from the datei. Ensuredof this statement.that all material disclosures are included. statements. The financial statements on pages 11 to 49, which have beenii. Reviewed prepared forward-looking on the going statements,concern basis, financial were approvedb. In respect by theto Boardreview of of Directors the Company’s on ______and signedand sustainability on its behalf information by: in respect of internal financial position. control, internal audit and financial crime control.

The Committee reviewed the ompany’s financial f. The Committee oversaw the ongoing process position and made recommendations to the of implementation of a disaster recovery plan Board on financial matters, risks and controls. This (DRP) and risk management process. included assessing the integrity and effectiveness of accounting, financial, compliance and control Management shall be required to report to the systems in place. Audit and Risk Committee on the implementation of the risk management policy including c. In respect of external and internal audit: effectiveness of the controls put in place to manage the risks identified. ppoint an internal auditor for the ompany. g. Reviewed and recommended to the Board for approval the Whistle Blower Policy and Approved the external and internal auditors’ Compliance Policy which have both been terms of engagement, the audit plan and budgeted operationalised. audit fees payable. ______h. The Committee reviewed the status of its iii. Reviewed the audit process and evaluated the compliance with the Charter and noted that it Directoreffectiveness of the audits. Director covered most of the responsibilities assigned to it. ______iv. Obtained assurance 2020 from the external auditors ______2020 that their independence was not impaired and that no non-audit services were provided by the In conclusion, the Audit and Risk Committee is Place:external______auditors. Place:confident______that it has fulfilled its legal mandate.

v. Confirmed that no reportable irregularities were identified and reported by the external auditors.

vi. Discussed with the external auditor the external audit plan, the audit findings, financial reporting process and the overall quality of the financial reporting and compliance.

AnnualAnnual ReportReport 2019/2020 2019/2020 614553 ReportE. Directors’ ofInterest Nomination In Shares and Remuneration Committee As at 31 March 2020, the following directors held a direct interest in the Company’s share capital as reflected in the table below: 1. Constitution Of The Committee The Committee is governed by Terms of Reference set out under the Nomination and Remuneration TheDirector Nomination and Remuneration Committee NumberCommittee of shares Charter which was approved % is a four-member Committee comprising of two by the Board. Independent Non-Executive Directors and two Non-Executive Directors. The Committee is chaired The human resource s and other departments by anMr. IndependentEmmanuel Katongole Non-Executive Director. provide101,933,042 supporting information and 2.7912 documentation relating to matters considered by Mr. George William Baguma 101,933,042 2.7912 During the year, the members of the Nomination the Committee. and Remuneration Committee were as follows: Mr. Nevin J Bradford 157,000 0.0043 3. Statement On Remuneration Dr Mr.Peter Steven s MwanjeChairperson Independent Philosop 19,400 hy 0.0005 Mugyenyi Non - Executive 204,042,484CiplaQCIL endeavours to attract, retain and5.5872 Mr Joseph Member Independent Baliddawa Non - Executive nurture a calibre of human resource capable of delivering sustainable growth of the Mr Paul Member organisation. Ensuring effective remuneration Miller Non – Executive F. Auditors philosophies, structures and practices are in Mrs Geena Member place and are appropriately implemented Non – Executive MalhotraThe auditors, Grant Thornton Certified Public Accrountants,emains a havekey agend expresseda for thetheir Commi willingnessttee. to continue in office in accordance with section 167 (2) of the Companies Act, 2012. In line with this, the Committee engaged G.The SubsequentCompany Secretary Events acts as Secretary to the PricewaterhouseCoopers to undertake a Committee. The Chairman of the Board and Chief salary benchmark study and a staff satisfaction ExecutiveThe directors Officer are are invitednot aware to the of meeting any matters of or circumstancesurvey. This whichwas u isnde materialrtaken into a the bid financial to create the affairsCommittee of the in ordercompany, to provide which clarificationhas occurred betweenfavour 31able March and 2020 compe andtiti theve sdatetaff w oforkin approvalg andof assist the financialthe functioning statements, of the Committeethat has not on been otherwiseconditio ndealts and with term ins tthehat financialpromote statements.high relevant agenda items. All attendants are required performance aligned with the Company’s core Byto disclose Order potential of the Board conflicts of interest and to philosophy of providing quality affordable excuse themselves on agenda items where there medicines made in Africa for African patients. exists a conflict of interest. Findings of these studies were discussed by the 2. Responsibility of the Committee Committee and actions to address concerns raised are under implementation. The overall responsibility of the Committee ______is to determine the company’s remuneration In implementation of some of these actions, the philosophy, provide an oversight role, review and Committee reviewed and recommended to the make recommendations to the Board on Board COMPANY SECRETARY Board the approval of policies, namely; the Staff recruitments, induction, training, performance Grievance Policy and the Staff Variable Pay Policy. management and the company’s human These policies were approved by the Board and capital framework. are under implementation ______2020 The Committee is also charged with the 4. Structure of the Remuneration responsibility of reviewing the composition of the Board to ensure it is well constituted with Fixed pay a diverse range of skill and experience that This is intended to attract and retain employees enhances diversity of thoughts and efficient by ensuring competitive positioning in the local decision making. market. The Committee reviews the fixed pay to ensure it remains competitive and is aligned to the In line with the provisions of applicable laws, the remuneration philosophy of the organisation. Committee is also responsible for determining the broad policy for the remuneration of Executive Benefits Directors, Chief Executive Officer and other The company provides medical cover and death members of Executive Management, and to benefits for staff and dependents. Other benefits approve targets and any performance-related such as a contribution to the staff retirement pay schemes operated by the company including scheme are also provided. total annual payments made under such schemes.

604654 AnnualAnnual ReportReport 2019/2020 2019/2020 StatementAnnual Incentive Of Directors’ Responsibilities 6. Directors’ remuneration Annual incentives are provided to ensure Theappropriate Companies reward Act, for2012 performance. requires the directorsPerformance to prepare Remuneration financial statements of Executive for each Directors financial year, whichbonuses give are a basedtrue and on fairpersonal view ofperformance the state of and the financialThe affairsremuneration of the Companyfor Executive as atDirectors the end is of the financialthe overall year company and of performance.its operating results for that year. determinedIt also requires in the the same directors manner to ensureas that that of other the Company keeps proper accounting records, which discloseemployee with reasonables and using accuracy the same at qualifying any time criteria.the financial5. Meetings position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible for safeguarding the assets of the Company. Remuneration of Non-Executive Directors and The Committee met four times in the financial year Terms of Engagement The2019/2020. directors The are Chairperson ultimately responsibleof the Committee, for the internal controlAll Non-Executive of the Company. Director Thes aredirectors provided delegate with responsibilityafter each Committee for internal meeting control briefsto management. the Board Standardsa letter and ofsystems appointmentof internal setting control out theare termsdesigned andabout implemented their discussions by management on critical matters. to provide reasonableof assuranceengagement. as toDirector the integritys are appointed and reliability by of the financial statements and to safeguard, verify and maintainshareholder accountabilitys at the AGM. of the Between Company’s AGMs assets. interim These systems andAug, controlsNov includeJan the properMay delegationappointments of responsibilities may be within made a clearlyby the definedBoard. These Name framework, effective19 accounting19 procedures20 20 and adequateinterim segregation appointee ofs duties.are required to retire at the following AGM where they then offer themselves The directors accept responsibility for the financial statementsfor re-election for the year by shareholders.ended 31 March In addition, 2020, which one haveDr Peter been preparedü using üappropriate ü accountingü policies supported by reasonable and prudent Mugyenyi -third of Non-Executive Directors are required to judgments and estimates in conformity with Internationalretire Financial at each Reporting AGM andStandards may offer and themselves in the manner for required by the Companies Act, 2012. The directors are ofre-election. the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Company and of its operating results. The directors further accept responsibility for the maintenanceIn ofthe accounting past Financial records Year, which the Board may beappointed relied Mr Joseph ü ü ü ü uponBaliddawa in the preparation of financial statements, as well asMs adequateGeena Malhotra systems toof fill internal a casual financial vacancy control. and will at the upcoming AGM retire and offer Nothing has come to the attention of the directo rs to indicateherself thatfor re-election. the Company Currently, will not the remain company a going concern for at least the next twelve months from the dateonly of remunerates this statement. its independent non-executive Mr Paul ü ü ü ü directors. Non-Executive Directors who are TheMiller financial statements on pages 11 to 49, which have beenshareholder prepared representative on the goings do concern not receive basis, any were approved by the Board of Directors on ______and signedremuneration on its behalffrom the by: Company.

Mrs Geena In determining the remuneration of the • x Malhotra ü ü Independent Non-Executive Directors, the Board considers the extent and nature of their responsibilities, and benchmarks with other Key: organisations of a similar nature. ü Present X Absent • Not a Member

The table below shows the breakdown of Executive Directors’ and Independent Non-Executive emoluments for the year ended March 31, 2020 in UGX.

Committees Pension Quarterly Fees Sitting Fixed Pay Other Benefits Contribution Allowance

______Executive Directors - - ______3.87 billion 637,000,000 680,000,000 Director Director

______2020 ______2020 Independent Non-Executive Directors 195,000,000 115,300,000 - - - Place:______Place:______

On behalf of the Committee

Dr Peter Mugyenyi Chairman of Nomination and Remuneration Committee AnnualAnnual ReportReport 2019/2020 2019/2020 615547 E. Directors’ Interest In Shares

ShareholdingAs at 31 March 2020, the following Structuredirectors held a direct interest in the Company’s share capital as reflected in the table below: Summary of Returns as at Tuesday 31st March 2020

NationalityDirector Category No. ofNumber members of shares No. of shares Percentage holding %

Local investors Corporate 75 280,337,871 7.6%

Individual 2,387 354,068,153 9.6% Mr. Emmanuel Katongole 101,933,042 2.7912 2462 634,406,024 17.3%

ForeignMr. George William CorporateBaguma 7 101,933,0423,012,279,088 82.4% 2.7912

Mr. Nevin J BradfordIndividual 117 157,0005,224,088 0.13% 0.0043 124 3,017,503,179 82.6% Mr. Stevens Mwanje 19,400 0.0005 Grand Totals: 2,586 3,651,909,200 100.00% 204,042,484 5.5872 Graphic Representation

F. Auditors 7.6% The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to continue in office in9.6% accordance with section 167 (2) of the Companies Act, 2012.

G. Subsequent Events Foreign investors

The directors are not aware of any matter or circumstance whichLocal is individual material investors to the financial affairs of the company, which has occurred between 31 March 2020 and the date of approval of the financial statements, that has not been otherwise dealtLocal with Corporate in the financialinvestors statements. 82.6% By Order of the Board

Top 10 Shareholders as at 31St March 2020 ______SHAREHOLDER’S NAME AMOUNT % COMPANY SECRETARY 1 MEDITAB HOLDINGS LIMITED 1,864,299,646 51.05

2 AMISTAD LIMITED 420,402,713 11.51 ______2020 3 SCB MAURITIUS A/C CAPITALWORKS SSA 1 407,152,191 11.15

4 GOVERNMENT EMPLOYEES PENSION FUND 312,000,000 8.54

5 NATIONAL SOCIAL SECURITY FUNDS 269,361,386 7.38

6 KATONGOLE EMMANUEL 101,933,042 2.79

7 MUTEBI FREDERICK KITAKA 101,933,042 2.79

8 BAGUMA GEORGE WILLY 101,933,042 2.79

9 CIPLA (EU) LIMITED 4,871,038 0.13

10 YIGA JOSEPH 4,000,000 0.11

604856 AnnualAnnual ReportReport 2019/20202019/2020 Shareholding Structure StatementBoard Of Directors’ of Directors Responsibilities The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the Summary of Returns as at Tuesday 31st March 2020 financial year and of its operating results for that year. It also requires the directors to ensure that the Company keeps proper accounting records, which disclose with reasonable accuracy at any time the Nationality Category No. of members No. of shares Percentage holding financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible Local investors Corporate 75 280,337,871 7.6% for safeguarding the assets of the Company.

Individual 2,387 354,068,153 9.6% Mr Emmanuel Katongole The directors are ultimately responsible for the internal control of the Company. The directors delegate 2462 634,406,024 17.3% responsibility for internal control to management.Executive Standards and Chairman systems of internal control are designed Foreign Corporate 7 3,012,279,088 82.4% and implemented by management to provide reasonable assurance as to the integrity and reliability of the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. Individual 117 5,224,088 0.13% These systems and controls include the proper delegation of responsibilities within a clearly defined 124 3,017,503,179 82.6% framework, effective accounting procedures and adequate segregation of duties.

Grand Totals: 2,586 3,651,909,200 100.00% The directors accept responsibility for the financial statements for the year ended 31 March 2020, which have been prepared using appropriate accounting policies supported by reasonable and prudent Graphic Representation judgmentsMr Katongole and wasestimates a Founding in conformity Chief Executive with International In Financial addition Reporting to numerous Standards nominations, and in Mrthe manner requiredOfficer by of the Cipla Companies Quality ChemicalAct, 2012. Industries The directors are ofKatongole the opinion has that won the several financial business statements awards. give He aLimited true and and fair was view promoted of the state to the of positionthe financial of affairswas of thethe EastCompany African and Winner of its andoperating representative results. The directors further accept responsibility for the maintenance of accounting records which may be relied 7.6% Executive Chairman in November 2013. Previously, at the 2013 Ernst and Young World Entrepreneur uponhe served in the as preparation Managing ofDirector financial and statements, shareholder as well ofas the adequate Year Awards systems in Monteof internal Carlo, financial bagged control. the 9.6% of Quality Chemicals Limited (the local firm that 2012 Africa Business Leadership Award and the Nothingpartnered has with come Cipla to theto form attention CiplaQCIL). of the directorsHe has to indicate2012 Africa that theEntrepreneurship Company will Award.not remain a going concerna wealth for of atexperience least the nextin senior twelve management months from the date of this statement. Foreign investors and leadership positions. He is a Rotarian who has steadily and diligently The financial statements on pages 11 to 49, which have servedbeen preparedas District on Governor the going for concern Rotary basis,District were Local individual investors approvedMr Katongole by the is alsoBoard the of Founder Directors of on Vero ______and Food signed9211 which on its comprises behalf by: of Tanzania and Uganda Local Corporate investors Industries – a food and beverage company; an and currently serves as Endowment and Major independent Non-Executive Director of Barclays Gifts Advisor for Africa. He is a multiple Major 82.6% Bank (U) Ltd; Chairman of the Uganda National Donor to the Rotary Foundation. Oil Company and Chairman of the Advisory Board of London based TLG Capital Ltd. He is a Mr Katongole holds a Master of Arts Degree member of the Initiative for Global Development in Economic Policy and Planning and an (Frontier 100) – a prestigious group that joins the Honours Bachelor of Statistics degree, both from most successful business leaders operating in Makerere University. frontier markets. Top 10 Shareholders as at 31St March 2020

SHAREHOLDER’S NAME AMOUNT %

1 MEDITAB HOLDINGS LIMITED 1,864,299,646 51.05

2 AMISTAD LIMITED 420,402,713 11.51 3 SCB MAURITIUS A/C CAPITALWORKS SSA 1 407,152,191 11.15 ______Mr Nevin______J Bradford Director Director 4 GOVERNMENT EMPLOYEES PENSION FUND 312,000,000 8.54 CEO

5 NATIONAL SOCIAL SECURITY FUNDS 269,361,386 7.38 ______2020 ______2020

6 KATONGOLE EMMANUEL 101,933,042 2.79 Place:______Place:______

7 MUTEBI FREDERICK KITAKA 101,933,042 2.79 Mr Bradford was appointed Chief Executive over 30 years’ experience in the pharmaceutical 8 BAGUMA GEORGE WILLY 101,933,042 2.79 Officer and Executive Director of CiplaQCIL on 26 industry cutting across consumer health, personal November 2013. care, branded and generic products. His career 9 CIPLA (EU) LIMITED 4,871,038 0.13 profile spans across a range of senior sales, marketing and general management positions 10 YIGA JOSEPH 4,000,000 0.11 A graduate of Cambridge University, Nevin has

56 Annual Report 2019/2020 44 Annual Report 2019/2020 6149 E.in both Directors’ multinational Interest and In genericShares pharmaceutical roles in Africa (Regional Manager), Saudi Arabia companies in Russia, Indonesia, Saudi Arabia, (General Manager), Indonesia (Sales and Marketing Africa,As atChina 31 March and Europe. 2020, thePrior following to joining directors Cipla, Mr held Director) a direct and interest Russia in (Marketing the Company’s Director). share He has Bradfordcapital was as headreflected of Ranbaxy, in the tableUK and below: formerly also worked at Novartis Consumer Health (General Managing Director of Ranbaxy’s JV in China- Manager Russia), Pharmacia Consumer Health Ranbaxy Guangzhou China Ltd. Mr Bradford spent (Area Director Africa, Middle East and Eastern 17 yearsDirector with GSK in a range of senior commercialNumber Europe) of shares and E.C De Witt (Commercial Director). %

Mr. Emmanuel Katongole 101,933,042 2.7912

Mr. George William Baguma 101,933,042 2.7912

Mr. Nevin J Bradford 157,000 0.0043

Mr. Stevens Mwanje 19,400 0.0005 Mr George Baguma Executive204,042,484 Director 5.5872

F. Auditors

The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to continue in office in accordance with section 167 (2) of the Companies Act, 2012. Mr Baguma is a founding Director and was also Animal Industries and Fisheries in Uganda. Mr G.the Subsequentfounding Chief Events Commercial Officer at Baguma has a degree and postgraduate CiplaQCIL from 2000 to 2005. George is a diploma from Makerere University and a Master’s formerThe Deputydirectors Commissioner are not aware at the of Directorateany matter or circumstancefrom Imperial which College is material London. to the financial of Animalaffairs Resources of the company, in the Ministry which ofhas Agriculture, occurred between 31 March 2020 and the date of approval of the financial statements, that has not been otherwise dealt with in the financial statements.

By Order of the Board

______Mr Paul Miller COMPANY SECRETARY Non-Executive Director

______2020

Mr Miller was appointed CEO Cipla, South Africa gastrointestinal, respiratory and anaesthesia. in October 2013. Before that he worked for Mylan as Vice President and Managing Director in South Prior to this assignment, he spent four and half years Africa from 2008 to 2013. within global oncology marketing based in the UK, first as a Strategy and Portfolio Manager and then He was based in China from July 2005, where as Global Brand Manager. This global experience he held the position of Marketing Director allowed him to lead and deliver several innovative for AstraZeneca in China. He successfully and novel programmes to support the US, Asian built and launched brands that were market and European market launches. leaders in China in the areas of cardiovascular,

6050 Annual Report 2019/2020 Annual Report 2019/2020 45 Statement Of Directors’ Responsibilities

The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the financial year and of its operating results for that year. It also requires the directors to ensure that the Company keeps proper accounting records, whichDr Ranjanadisclose with reasonablePathak accuracy at any time the financial position of Cipla Quality Chemical IndustriesNon-Executive Limited (“the Company”). Director They are also responsible for safeguarding the assets of the Company.

The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibility for internal control to management. Standards and systems of internal control are designed and implemented by management to provide reasonable assurance as to the integrity and reliability of the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. TheseDr Ranjana system leadss and Cipla’s controls worldwide include thequality proper delegationResearch of responsibilities & Development within anda clearly Quality defined Assurance framework,enterprise throughouteffective accounting the product’s procedure lifecycles andfrom adequate department. segregation Products of duties. ranged from solids (mainly development to commercialization. Dr Ranjana has narcotics), patches, suppositories, and devices. Theover director 30 yearss accept of experience responsibility in the for pharmaceutical the financial statements She wa fors activelythe year involved ended 31in theMarch pre-clinical 2020, which and haveindustry been in theprepared USA and using has appropriate held senior accounting leadership policiesphase1 supported through by phase reasonable 3 trials. and prudent judgmentpositions swith and increasing estimates responsibilitiesin conformity within various International Financial Reporting Standards and in the manner requiredorganizations. by the She Companies has worked Act, for2012. branded The director and s are ofDr theRanjana opinion has that a Doctoratethe financial in statementHealth s give ageneric true and companies fair view suchof the as stateWatson/Actavis, of the financial Endo/ affair s ofAdministration the Company from and the of Universityits operating of Phoenix,results. The an directorsDupont Pharmaceuticals,further accept responsibility Zenith Goldline for theand maintenance MBA of accountingfrom Dowling records College, which and may a Bachelor’s be relied uponThames in the Pharmacol, preparation with ofextensive financial experience statements, in as well aofs Scienceadequate (Honours) systems inof Chemistryinternal financial from Mithibai control. dealing with regulatory bodies such as the Food College of Arts and Chauhan Institute of Science, Nothingand Drug ha Administrations come to the (FDA),attention the ofMedicines the director s to indicateMumbai. that She the ha Companys a Postgraduate will not remainDiploma a ingoing concernand Healthcare for at least products the next Regulatory twelve months Agency, from the the datePharmaceutical of this statement. and Chemical Analysis from Brazilian Health Regulatory Agency (ANVISA) and Sophia College and has undertaken a Leadership Thethe Medicinesfinancial statement Control sCouncil on pages (MCC). 11 to 49, which have beencourse prepared in Pharmaceutical on the going and concern Biologics basis, from were approved by the Board of Directors on ______and signedHarvard on University. its behalf by: Dr Ranjana served in the role of senior Vice President of Global Quality for Watson/ Actavis She has published learned articles and lectured Pharmaceuticals, and was responsible for their in many pharmaceutical courses and seminars quality control globally. Prior to Watson/Actavis, on various topics (such as validation, quality she worked as Vice President of Quality and approvals and compliance issues). Dr Ranjana Compliance at Endo Pharmaceuticals where was awarded the Rising Star award in 2006 by she had the privilege of creating commercial the Healthcare Business Association.

Mr Mark Daly ______Non-Executive______Director Director Director

______2020 ______2020

Place:______Place:______Mr DalyDaly hashas beenbeenwith with C iplCiplaa fo forr m moreore tha nthan 11 13 Cipla Limited (India). He was integral in the sale years,years, thethe majoritymajority ofof wwhichhich inin thethe Finan Financialcial of the business and de-listing process and was DirectorDirector // ChiefChief Financial Financial Officer Officer position. position. H eHe is is Financial Director at the manufacturing facility ccurrentlyurrently servingservingas as tthehe RegiRegionalonal CCFOOF (inc (includingluding in South Africa and Company Secretary when the SSouthouth Africa,Africa, EastEastAfric Africaa pr privateivate ma marketketr an dand the the company was listed. GloGlobalbal AccessAccess Business).Business). Wit Withinhin Cipla,Cipla, hehe hashas hheldeld tthehe positionspositions ofof CFOCFOan andd Exec Executiveutive Di Directorrector of of Mr Daly is a chartered accountant and holds a tthehe listedlisted entityentity befbeforeore CiplaCipla MedproMedpro was was sold sold to to B. Com Honours degree in accounting from the

46 Annual Report 2019/2020 Annual Report 2019/2020 6151 E.University Directors’ of Natal, Interest Pietermaritzburg. In Shares He previously firms in South Africa and has also worked abroad held managerial roles in the corporate finance and in UK and Mozambique. auditingAs at departments 31 March 2020, of one the of following the big accountingdirectors held a direct interest in the Company’s share capital as reflected in the table below:

Director Number of shares %

Mr. Emmanuel Katongole Mr Samuel101,933,042 Acuti Opio 2.7912

Mr. George William Baguma Executive101,933,042 Director 2.7912

Mr. Nevin J Bradford 157,000 0.0043

Mr. Stevens Mwanje 19,400 0.0005

204,042,484 5.5872 Mr Opio is the Company Pharmacist at CiplaQCIL. He is a member of the Medicine Transparency He joined the Company in 2007, starting as a Alliance (META) Council and is also a member of F.QualityAuditors Assurance Pharmacist. He previously the steering committee of the Mbarara University worked with Kwality Afro-Asia – a local drug of Science and Technology Pharmbiotrac World manufacturingThe auditors, facility Grant – and Thornton has 13 Certifiedyears of Public Accountants,Bank project. have He previouslyexpressed served their aswillingness the to experiencecontinue in inpharmaceutical office in accordance manufacturing. with section 167Chairperson (2) of the ofCompanies the Quality Act, Chemical 2012. Staff SACCO from 2014 to 2018. He has received numerous G.Mr Opio Subsequent holds a EventsBachelor of Pharmacy degree awards from the pharmaceutical industry and and Masters of Science in Pharmacology from beyond, including being among the New Vision MakerereThe directors University. are He not has aware also undergoneof any matter or circumstance2018 top 40 which Ugandans is material under theto theage financial of 40. executiveaffairs education of the company, from Strathmore which hasBusiness occurred between 31 March 2020 and the date of approval Schoolof the under financial the CEO statements, Summit Forum. that Hehas is nota been otherwiseHe is the patrondealt withof thein theInternational financial Pharmacy statements. member of the Council of the Pharmaceutical Students Federation Africa Chapter 2019. He has Society of Uganda and has also served as its also spoken at numerous national, regional and BySecretary Order since of the October Board 2011. international conferences both as a motivational speaker and as a pharmaceutical sector leader.

______

COMPANY SECRETARY Prof Peter Mugyenyi Independent Non-Executive Director ______2020

Prof Mugyenyi has a Bachelor of Medicine widespread use of affordable ARVs in Africa, as and Surgery (MBChB) and a Doctor of Science well as the development of an effective model for (ScD(h)), is a Fellow of the Royal College of scaling up ARVs in resource-limited countries. Physicians of Ireland (FRCPI), and a Fellow of the Royal College of Physicians (Edinburgh) Prof Mugyenyi has been a principal investigator (FRCP Edin). He is a Ugandan paediatrician, on dozens of landmark research projects, funded researcher and specialist on HIV/AIDS and related by organisations such as the National Institutes conditions. He was Executive Director of Joint of Health (NIH), European Union, World Health Clinical Research Centre until his retirement. He Organisation (WHO) and the Medical Research was among the pioneers who introduced the Council (MRC). His research and publications

6052 Annual Report 2019/2020 Annual Report 2019/2020 47 University of Natal, Pietermaritzburg. He previously firms in South Africa and has also worked abroad Statementcover a wide Ofspectrum Directors’ of HIV/AIDS-related Responsibilities HIV prevention, immunological studies including held managerial roles in the corporate finance and in UK and Mozambique. diseases and other medical conditions. Specific HIV vaccine trials, pharmacokinetic, molecular auditing departments of one of the big accounting Theareas Companies of his research Act, 2012 include requires paediatric the directors and to prepareand financial epidemiological statements studies for eachas well financial as social year, and whichadult HIVgive treatment,a true and drug fair trials,view ofHIV the resistance, state of the financialeconomic affairs impact of the of CompanyHIV. as at the end of the financial year and of its operating results for that year. It also requires the directors to ensure that the Company keeps proper accounting records, which disclose with reasonable accuracy at any time the financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible for safeguarding the assets of the Company.

Mr Samuel Acuti Opio The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibility for internal control to management. Standards and systems of internal control are designed Executive Director and implemented by management to provide reasonable assurance as to the integrity and reliability of the financial statements and to safeguard,Mr verify Joseph and maintain Baliddawa accountability of the Company’s assets. These systems and controls include the properIndependent delegation of responsibilities Non-Executive within a clearly Director defined framework, effective accounting procedures and adequate segregation of duties.

The directors accept responsibility for the financial statements for the year ended 31 March 2020, which have been prepared using appropriate accounting policies supported by reasonable and prudent Mr Opio is the Company Pharmacist at CiplaQCIL. He is a member of the Medicine Transparency judgments and estimates in conformity with International Financial Reporting Standards and in the manner He joined the Company in 2007, starting as a Alliance (META) Council and is also a member of required by the Companies Act, 2012. The directors are of the opinion that the financial statements give aMr true Baliddawa and fair isview a former of the partnerstate of ofthe financial affairsMr of Baliddawathe Company is a and Ugandan of its operating national results. and isThe Quality Assurance Pharmacist. He previously the steering committee of the Mbarara University PriceWaterhouseCoopers Africa (PWC), having currently President of the Institute of Corporate worked with Kwality Afro-Asia – a local drug of Science and Technology Pharmbiotrac World directors further accept responsibility for the maintenance of accounting records which may be relied uponspent in34 the years preparation with PWC of in financial a variety statements, of roles in as well Governanceas adequate of systems Uganda, of internalChair of financialthe Audit control. manufacturing facility – and has 13 years of Bank project. He previously served as the UK, Zambia and Uganda. He is a Fellow of the Committees of the Commercial Bank of Africa, experience in pharmaceutical manufacturing. Chairperson of the Quality Chemical Staff SACCO Association of Chartered Certified Accountants Alliance Africa General Insurance Limited and from 2014 to 2018. He has received numerous Nothing has come to the attention of the directors to indicate that the Company will not remain a going concern(FCCA), afor Member at least ofthe the next Institute twelve of months Certified from the dateNew of Visionthis statement. Group, and a Board member of all Mr Opio holds a Bachelor of Pharmacy degree awards from the pharmaceutical industry and Public Accountants of Uganda (CPA) and a three organizations. He is Chair of the Uganda- and Masters of Science in Pharmacology from beyond, including being among the New Vision TheFounder financial Council statements Member onof bothpages the 11 toInstitute 49, which of have Norwaybeen prepared Friendship on Association,the going concern a Member basis, of thewere Makerere University. He has also undergone 2018 top 40 Ugandans under the age of 40. approvedCertified byPublic the AccountantsBoard of Directors of Uganda on ______and and the signedCouncil on of itsUganda behalf Martyrsby: University and Chair executive education from Strathmore Business Zambia Institute of Chartered Accountants (ZICA). of its Audit Committee. He has received awards School under the CEO Summit Forum. He is a He is the patron of the International Pharmacy from the World Bank, national and international member of the Council of the Pharmaceutical Students Federation Africa Chapter 2019. He has He is a Member of the Association of Chartered accountancy organizations and Lions Club Society of Uganda and has also served as its also spoken at numerous national, regional and Certified Accountants. Mr Baliddawa has extensive International. Secretary since October 2011. international conferences both as a motivational experience in management and leadership roles, speaker and as a pharmaceutical sector leader. specifically in country management, formulating He undertook his professional education at and monitoring the implementation of PWC’s the London School of Accountancy obtaining strategic growth plan for Africa, risk, quality and membership of the Association of Chartered compliance standards management and firm wide Certified Accountants (ACCA). financial management and reporting.

Prof Peter Mugyenyi Independent Non-Executive Director

______Director Mrs GeenaDirector Malhotra Non-Executive Director ______2020 ______2020 Prof Mugyenyi has a Bachelor of Medicine widespread use of affordable ARVs in Africa, as and Surgery (MBChB) and a Doctor of Science well as the development of an effective model for Place:______Place:______(ScD(h)), is a Fellow of the Royal College of scaling up ARVs in resource-limited countries. Physicians of Ireland (FRCPI), and a Fellow of the Royal College of Physicians (Edinburgh) Prof Mugyenyi has been a principal investigator Mrs Malhotra is the President and Global Head She is a pillar of Research and Development (FRCP Edin). He is a Ugandan paediatrician, on dozens of landmark research projects, funded of Manufacturing Operations and Respiratory (R&D) at Cipla and has spearheaded use of researcher and specialist on HIV/AIDS and related by organisations such as the National Institutes Centre of Excellence of Cipla. Prior to this role, cutting-edge technology platforms, equipment, conditions. He was Executive Director of Joint of Health (NIH), European Union, World Health she was the Global Head of Integrated Product drug-device combinations, and targeted drug Clinical Research Centre until his retirement. He Organisation (WHO) and the Medical Research Development of Cipla Ltd (Cipla) from 2013 to 2018. delivery dosage forms to fulfil unmet patient was among the pioneers who introduced the Council (MRC). His research and publications

Annual Report 2019/2020 47 48 Annual Report 2019/2020 Annual Report 2019/2020 6153 E.needs. Directors’ She has Interest to her credit,In Shares several patents in the She is a recipient of the Eminent Researcher Award areas of formulation development and technology by the Indian Pharmaceutical Association in 2007 in solidAs at oral 31 dosageMarch 2020, forms, the topical following delivery directors systems held and a directFDD Express interest Pharma in the Company’sAward for Outstanding share andcapital inhalation as reflectedmedical devices. in the Shetable has below: provided Achievement in Formulation Development and Drug technical leadership to multi-disciplinary R&D teams Delivery in 2017. She has also been honoured with within a cross-functional environment to build and the Indian Glory Award in 2017 by Indian Friendship deliverDirector a high throughput R&D with technology NumberSociety of shares and the Bharat Ratna Dr. APJ Abdul Kalam% being the core focus. Excellence Award in 2018 for outstanding and distinguished services to the nation. SheMr. completed Emmanuel her Katongole Bachelor’s in Pharmacy in 1985 101,933,042 2.7912 in Mumbai and received her Executive MBA degree fromMr. Washington George William University, Baguma St. Louis in 2017. 101,933,042 2.7912

Mr. Nevin J Bradford 157,000 0.0043

Mr. Stevens Mwanje 19,400 0.0005

204,042,484 5.5872

F. Auditors Mr Stevens Mwanje Non-Executive Director The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to continue in office in accordance with section 167 (2) of the Companies Act, 2012.

G. Subsequent Events

The directors are not aware of any matter or circumstance which is material to the financial affairs of the company, which has occurred between 31 March 2020 and the date of approval Mr Mwanjeof the financial is the Chi efstatements, Financial Officer that hasof the not been otherwisePreviously , dealthe worked with in as the the financialHead of Salesstatements. and National Social Security Fund (NSSF) and a Operations at NSSF and the Head of Commercial ByFellow Order of the of Associati the Boardon of Chartered Certified Division at Bank of Africa-Uganda Ltd, where Accountants (FCCA). he had also previously worked as the Chief Accountant and the Head of Internal Controls. He holds a Master’s degree in Business He is a strategic leader responsible for providing Administration from the Edinburgh Business direction and managing performance. He is School - Herriot Watt University, a Postgraduate known for being a change-maker with a history Diploma in Business Administration from the of structuring processes and building strong and ______University of Leicester and, a Postgraduate motivated high-performance teams. Diploma in Business Management from the Uganda Management Institute. He has He is currently the Chairperson of the Board COMPANYundertaken Executive SECRETARY Management Training at the Audit Committee at the Entrepreneurs Financial Strathmore Business School, The Wharton School Centre (EFC) and has served on the Board of (University of Pennsylvania) and the Gordon Kampala Club Limited. He is also a member of ______Institute of Business2020 (University of Pretoria). He the Rotary Club of Kampala North. is a Balanced Score Card Professional (George Washington University of Professional Studies). He has also undertaken various short courses in leadership, risk management, financial management, performance management and corporate governance

6054 Annual Report 2019/2020 Annual Report 2019/2020 49 needs. She has to her credit, several patents in the She is a recipient of the Eminent Researcher Award Statement Of Directors’ Responsibilities areas of formulation development and technology by the Indian Pharmaceutical Association in 2007 Leadership and Management Team in solid oral dosage forms, topical delivery systems and FDD Express Pharma Award for Outstanding The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, and inhalation medical devices. She has provided Achievement in Formulation Development and Drug which give a true and fair view of the state of the financial affairs of the Company as at the end of the technical leadership to multi-disciplinary R&D teams Delivery in 2017. She has also been honoured with financial year andMr ofEmmanuel its operating Katongole results for(Exec that year.utive It Chai also rmarequiresn) the directors to ensure that the within a cross-functional environment to build and the Indian Glory Award in 2017 by Indian Friendship Company keeps proper accounting records, which disclose with reasonable accuracy at any time the deliver a high throughput R&D with technology Society and the Bharat Ratna Dr. APJ Abdul Kalam financial positionM ofr N Ciplaevin QualityBradford Chemical (CEO) Industries Limited (“the Company”). They are also responsible being the core focus. Excellence Award in 2018 for outstanding and for safeguarding Mrthe assetsSam Opio of the Company.(Company Pharmacist) distinguished services to the nation. She completed her Bachelor’s in Pharmacy in 1985 The directors are Mrultimately Geor geresponsible Baguma for ( theExec internalutive controlDirecto ofr) the Company. The directors delegate in Mumbai and received her Executive MBA degree responsibility for internal control to management. Standards and systems of internal control are designed from Washington University, St. Louis in 2017. and implemented by management to provide reasonable assurance as to the integrity and reliability of the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. These systems and controls include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties.

The directors accept responsibility for the financial statements for the year ended 31 March 2020, which have been prepared using appropriate accounting Mr Ajay policies Kumar supported Pal by reasonable and prudent judgments and estimates in conformity with International Financial Reporting Standards and in the manner required by the Companies Act, 2012. The Chiefdirectors Operations are of the opinion Officerthat the financial statements give a true and fair view of the state of the financial affairs of the Company and of its operating results. The Mr Stevens Mwanje directors further accept responsibility for the maintenance of accounting records which may be relied Non-Executive Director upon in the preparation of financial statements, as well as adequate systems of internal financial control.

Nothing has come to the attention of the directors to indicate that the Company will not remain a going concernMr Pal joi forned at C leastiplaQ theCIL nextas th twelvee Chie f monthsOperati fromng the datein cofore this op statement.erations, Mr Pal has specialized in Officer in March 2020. Prior to this, he served as building strong teams and running successful Thethe Sefinancialnior Dir estatementsctor – Head onof Mpagesanuf a11ct utorin 49,g of which haveph abeenrma cepreparedutical op eonra ttheions goingin the concernlast five ybasis,ears. Mwerer approvedCipla Sou tbyh A thefric aBoard and aofs HDirectorsead of M onan u______andfacturing signedPal ha son st ritson gbehalf leade by:rship and people management and Master Coach in Cipla India. Mr Pal has a skills, along with strong strategic skills. Mr Mwanje is the Chief Financial Officer of the Previously, he worked as the Head of Sales and MBA from Nelson Mandela University Business National Social Security Fund (NSSF) and a Operations at NSSF and the Head of Commercial School in South Africa. With 15 years of experience Fellow of the Association of Chartered Certified Division at Bank of Africa-Uganda Ltd, where Accountants (FCCA). he had also previously worked as the Chief Accountant and the Head of Internal Controls. He holds a Master’s degree in Business He is a strategic leader responsible for providing Administration from the Edinburgh Business direction and managing performance. He is School - Herriot Watt University, a Postgraduate known for being a change-maker with a history Diploma in Business Administration from the of structuring processes and building strong and University of Leicester and, a Postgraduate motivated high-performance teams. Mr Frederick Andrew Kakooza Diploma in Business Management from the Uganda Management Institute. He has He is currently the Chairperson of the Board Officer undertaken Executive Management Training at the Audit Committee at the Entrepreneurs Financial Strathmore Business School, The Wharton School Centre (EFC) and has served on the Board of (University of Pennsylvania) and the Gordon Kampala Club Limited. He is also a member of Institute of Business (University of Pretoria). He the Rotary Club of Kampala North. is a Balanced Score Card Professional (George ______Washington University of Professional Studies). Director Director He has also undertaken various short courses in Mr Kakooza joined CiplaQCIL in March 2020 built a strong background in strategic performance leadership, risk management, financial and oversees the finance, tax and ICT functions management and streamlining robust operations management, performance management and ______of the company. 2020 He was previously the Head o f across______the telecoms, 2020 utilities and manufacturing corporate governance Finance at Kampala Pharmaceuticals 1996 Limit ed sectors. He holds a Master of Business Place:(KPI). Prior______to working at KPI, Frederick was the AdministrationPlace:______degree from Heriot-Watt University Chief Finance Officer and Financial Management in the UK and a Bachelor of Science degree in Expert at Energy Utility Corporation Limit ed, Economics and Statistics from Makerere University. Rwanda’s national electricity distributor . He has He is a Fellow of the Association of Chartered also held senior roles at Umeme Limited, W arid Certified Accountants (FCCA), Fellow of Chartered Telecom Uganda Limited, and MultiChoice Uganda Institute of Management Accountants (FCMA) Limited. Frederick started his career at Deloitte & and a Member of the Institutes of Certified Public Touché (Deloitte). Mr Kakooza has over 20 yea rs Accountants of Uganda and Kenya. experience in Uganda and Rwanda, where he has

Annual Report 2019/2020 49 50 Annual Report 2019/2020 Annual Report 2019/2020 56 E. Directors’ Interest In Shares

As at 31 March 2020, the following directors held a direct interest in the Company’s share capital as reflected in the table below:

Director Ms NumberDoreen of sharesPachuto Awanga % Company Secretary

Mr. Emmanuel Katongole 101,933,042 2.7912

Mr. George William Baguma 101,933,042 2.7912

Ms Mr.Awanga Nevin joined J Bradford CiplaQCIL in June 2019. She of the157,000 Institute of Chartered Secretaries and 0.0043 holds of a Bachelor of Laws degree from Makerere Administrators (ICSA). Prior to her appointment she UniversityMr. Stevens and isMwanje a member of the Uganda and was employed19,400 as a Legal Manager in the energy0.0005 East African Law Societies. She is an advocate and media sectors. of the High Court of Uganda and an Associate 204,042,484 5.5872

F. Auditors

The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to continue in office in accordance with section 167 (2) of the Companies Act, 2012.

G. Subsequent Events Mr Atul Vadepalli Quality Assurance Manager The directors are not aware of any matter or circumstance which is material to the financial affairs of the company, which has occurred between 31 March 2020 and the date of approval of the financial statements, that has not been otherwise dealt with in the financial statements.

By Order of the Board Mr Vadepalli has been the Quality Assurance 18 years of experience in pharmaceutical quality Manager at CiplaQCIL since 2007. Prior to this, assurance and holds a bachelor’s degree in Mr Vadepalli worked for Cipla India in the quality Pharmacy from Pune University in India. assurance department as from 2002. He has over

______

COMPANY SECRETARY

______2020 Mr Harrison Kiggundu Human Resource Manager

Mr Kiggundu has been the Human Resources holds a Bachelor of Science in Food Science and Manager at CiplaQCIL since 2009. Prior to this, he Technology from Makerere University, a Diploma in worked for Uganda Breweries Limited, first as a Brewing from Herriot Watt University in the UK, a brewer and then rose through the ranks to the level Postgraduate Diploma in Human Resources and a of Packaging Manager, Capability Development Master’s Degree in Human Resource Management Manager and Human Resources Manager. Now both from the Uganda Management Institute (UMI). with over 20 years of experience, Mr Kiggundu

6056 Annual Report 2019/2020 Annual Report 2019/2020 51 Statement Of Directors’ Responsibilities

The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the financial year and of its operating results for that year. It also requires the directors to ensure that the Ms Doreen Pachuto Awanga Company keeps proper accounting records, which disclose with reasonable accuracy at any time the Company Secretary financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible for safeguarding the assets of the Company.

The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibility for internal control to management. Standards and systems of internal control are designed and implemented by management to provide reasonable assurance as to the integrity and reliability of the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. Ms Awanga joined CiplaQCIL in June 2019. She of the Institute of Chartered Secretaries and These systems and controls include the proper delegation of responsibilities within a clearly defined holds of a Bachelor of Laws degree from Makerere Administrators (ICSA). Prior to her appointment she framework, effective accounting procedures and adequate segregation of duties. University and is a member of the Uganda and was employed as a Legal Manager in the energy East African Law Societies. She is an advocate and media sectors. The directors accept responsibility for the financial statements for the year ended 31 March 2020, which of the High Court of Uganda and an Associate have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates in conformity with International Financial Reporting Standards and in the manner required by the Companies Act, 2012. The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Company and of its operating results. The directors further accept responsibility for the maintenance of accounting records which may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control.

Nothing has come to the attention of the directors to indicate that the Company will not remain a going Mr Atul Vadepalli concern for at least the next twelve months from the date of this statement. Quality Assurance Manager The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approved by the Board of Directors on ______and signed on its behalf by:

Mr Vadepalli has been the Quality Assurance 18 years of experience in pharmaceutical quality Manager at CiplaQCIL since 2007. Prior to this, assurance and holds a bachelor’s degree in Mr Vadepalli worked for Cipla India in the quality Pharmacy from Pune University in India. assurance department as from 2002. He has over

Mr Harrison Kiggundu ______Human Resource Manager Director Director

______2020 ______2020

Place:______Place:______

Mr Kiggundu has been the Human Resources holds a Bachelor of Science in Food Science and Manager at CiplaQCIL since 2009. Prior to this, he Technology from Makerere University, a Diploma in worked for Uganda Breweries Limited, first as a Brewing from Herriot Watt University in the UK, a brewer and then rose through the ranks to the level Postgraduate Diploma in Human Resources and a of Packaging Manager, Capability Development Master’s Degree in Human Resource Management Manager and Human Resources Manager. Now both from the Uganda Management Institute (UMI). with over 20 years of experience, Mr Kiggundu

Annual Report 2019/2020 51 AnnualAnnual ReportReport 2019/20202019/2020 6157 E. Directors’ Interest In Shares

FinancialAs at 31 March 2020, theStatements following directors held a direct interest in the Company’s share capital as reflected in the table below: Annual Report and Financial Statements Director Number of shares % for the Year Ended 31 March 2020

Mr. Emmanuel Katongole 101,933,042 2.7912 1. Company information Mr. George William Baguma 101,933,042 2.7912 Principal Place of Business Mr. Nevin J Bradford 157,000 0.0043 Cipla Quality Chemical Industries Limited PlotMr. 1 - Stevens7, 1st Ring Mwanje Road 19,400 0.0005 Luzira Industrial Park PO Box 34871 204,042,484 5.5872 Kampala, Uganda

F. Auditors

The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to Bankerscontinue in office in accordance with section 167 (2) of the Companies Act, 2012.

G.Absa Subsequent Bank of Uganda Events Limited Standard Chartered Bank (U) Limited Plot 2, Hannington Road Plot 5, Speke Road POThe Box directors7101 are not aware of any matter or circumstancePO Box 7111 which is material to the financial Kampala,affairs Uganda of the company, which has occurred betweenKampala, 31 UgandaMarch 2020 and the date of approval of the financial statements, that has not been otherwise dealt with in the financial statements.

By Order of the Board

Solicitors

K&K Advocates MMAKS Advocates SRK House 3rd Floor, DTB Centre ______Plot 67, Lugogo Bypass Plot 17/19, Kampala Road PO Box 6061 PO Box 7166 COMPANYKampala, Uganda SECRETARY Kampala, Uganda

______2020

Secretary Auditor

Ms Doreen Pachuto Awanga Grant Thornton Certified Public Accountants Cipla Quality Chemical Industries Ltd Wing B&C, 2nd Floor, Lugogo House Luzira Industrial Park 42, Lugogo Bypass, PO Box 34871 PO Box 7158 Kampala, Uganda Kampala, Uganda

605858 AnnualAnnual ReportReport 2019/2020 2019/2020 Financial Report Statement2. Directors’ Of Report Directors’ Responsibilities TheThe Companies Directors Act, submit 2012 requirestheir report the directors together to prepare with financialthe audited statements financial for each statements financial year, for whichthe year give aended true and 31 fair March view of2020, the state which of thedisclose financial the affairs state of of the affairs Company of Ciplaas at theQuality end of the financialChemical year Industries and of its Limited operating (“the results Company”). for that year. It also requires the directors to ensure that the Annual Report and Financial Statements Company keeps proper accounting records, which disclose with reasonable accuracy at any time the for the Year Ended before 31 March 2020 financialA. Incorporation position ofand Cipla Principal Quality Activity Chemical Industries Limited (“the Company”). They are also responsible for safeguarding the assets of the Company. Cipla Quality Chemical Industries Limited (“the Company”) was incorporated on 10 June 2005 as The adirectors joint venture are ultimately between responsible Quality Chemicals for the internalLimited control(‘QCL’), ofa theprivate Company. limited Thecompany directors incorporated delegate 1. Company information responsibilityin the Republic for internal of Uganda control andto management. Cipla Limited Standards (‘Cipla’), through and systems its wholly of internal owned control subsidiary, are designed and Meditabimplemented Holdings by management Limited, a limited to provide company reasonable incorporated assurance in Mauritius. as to the Cipla integrity subsequently and reliability of Principal Place of Business the financialacquired statementsa controlling andinterest to safeguard, in the Company verify throughand maintain its wholly accountability owned subsidiaries, of the Company’s Meditab assets. TheseHoldings systems Limited and controls and Cipla include (EU) the which proper held delegation 51.05% and of 11.25%responsibilities of the Company’s within a clearly shares defined Cipla Quality Chemical Industries Limited framework,respectively effective until Septemberaccounting 2018.procedures and adequate segregation of duties. Plot 1 - 7, 1st Ring Road Luzira Industrial Park The Thedirectors Company accept converted responsibility to a forpublic the companyfinancial onstatements 7 October for 2016, the andyear on ended 17 September 31 March 2018,2020, the which PO Box 34871 haveCompany been prepared officially using listed appropriate on the Ugandaaccounting Securities policies Exchange, supported offering by reasonable 18% of the and shareholding prudent Kampala, Uganda judgmentsto individual and estimates and institutional in conformity investors with in International an Initial Public Financial Offering Reporting (IPO). StandardsDuring the andIPO, inCipla the manner required(EU) byreduced the Companies its shareholding Act, 2012. from The 11.25% directors to 0.13% are andof the therefore, opinion Cipla’sthat the interest financial in the statements Company give a truereduced and fair to view51.18%. of the state of the financial affairs of the Company and of its operating results. The directors further accept responsibility for the maintenance of accounting records which may be relied uponB. Results in the forpreparation the Year of financial statements, as well as adequate systems of internal financial control.

Bankers NothingFull detailshas come of the to financial the attention position, of the results directors of operations to indicate andthat cash the Companyflows of the will notCompany remain are a goingset concernout forin the at leastaccompanying the next twelve financial months statements. from the date of this statement. Absa Bank of Uganda Limited Standard Chartered Bank (U) Limited Plot 2, Hannington Road Plot 5, Speke Road TheC. Dividendfinancial statements on pages 11 to 49, which have been prepared on the going concern basis, were PO Box 7101 PO Box 7111 approved by the Board of Directors on ______and signed on its behalf by: Kampala, Uganda Kampala, Uganda The directors do not recommend the payment of a dividend for the financial year ended 31 March 2020 (2019: Nil).

D. Directors and Officers

The directors who held office during the year and to the date of this report were: Solicitors

K&K Advocates MMAKS Advocates Name Nationality Designation SRK House 3rd Floor, DTB Centre Plot 67, Lugogo Bypass Plot 17/19, Kampala Road PO Box 6061 PO Box 7166 Emmanuel Katongole Ugandan Executive Director (Board Chairperson) Kampala, Uganda Kampala, Uganda Nevin Bradford British Executive Director (CEO)

George Baguma Ugandan Executive Director

Sam Opio Ugandan Executive Director

______Paul Miller South African Non-Executive______Director Secretary Auditor DirectorDr. Ranjana Pathak American Non-ExecutiveDirector Director

Ms Doreen Pachuto Awanga Grant Thornton Certified Public Accountants ______Mark Daly 2020 South African Non-Executive______Director 2020 Cipla Quality Chemical Industries Ltd Wing B&C, 2nd Floor, Lugogo House Geena Malhotra Indian Non-Executive Director (Appointed on 27th November, 2019) Luzira Industrial Park 42, Lugogo Bypass, PO Box 34871 PO Box 7158 Place:Stevens______Mwanje Ugandan Non-ExecutivePlace: Director______(Appointed on 14th August, 2019) Kampala, Uganda Kampala, Uganda Nishant Saxena Indian Non-Executive Director (Retired on 14th August, 2019)

Dr. Peter Mugyenyi Ugandan Independent Non-Executive Director

Joseph Baliddawa Ugandan Independent Non-Executive Director

Doreen Awanga Ugandan Company Secretary

58 Annual Report 2019/2020 AnnualAnnual ReportReport 2019/2020 2019/2020 6159 E.E. Directors’ Directors’ Interest Interest In In Shares Shares

AsAs at at 31 31 March March 2020, 2020, the the following following directors directors held held a adirect direct interest interest in in the the Company’s Company’s share share capitalcapital as as reflected reflected in in the the table table below: below:

DirectorDirector NumberNumber of of shares shares %%

Mr.Mr. Emmanuel Emmanuel Katongole Katongole 101,933,042101,933,042 2.79122.7912

Mr.Mr. George George William William Baguma Baguma 101,933,042101,933,042 2.79122.7912

Mr.Mr. Nevin Nevin J JBradford Bradford 157,000157,000 0.00430.0043

Mr.Mr. Stevens Stevens Mwanje Mwanje 19,40019,400 0.00050.0005

204,042,484204,042,484 5.58725.5872

F.F. AuditorsAuditors

TheThe auditors, auditors, Grant Grant Thornton Thornton Certified Certified Public Public Accountants,Accountants, have have expressed expressed their their willingness willingness to to continuecontinue in in office office in in accordance accordance with with section section 167 167 (2) (2) of ofthe the Companies Companies Act, Act, 2012. 2012.

G.G. Subsequent Subsequent Events Events

TheThe directors directors are are not not aware aware of of any any matter matter or or circumstance circumstance which which is is material material to to the the financial financial affairsaffairs of of the the company, company, which which has has occurred occurred between between 31 31March March 2020 2020 and and the the date date of approvalof approval ofof the the financial financial statements, statements, that that has has not not been been otherwise otherwise dealt dealt with with in inthe the financial financial statements. statements.

ByBy Order Order of of the the Board Board

______

COMPANYCOMPANY SECRETARY SECRETARY

______20202020

60 Annual Report 2019/2020 60 Annual Report 2019/2020 Statement Of Directors’ Responsibilities Statement Of Directors’ Responsibilities The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, whichThe Companies give a true Act, and 2012 fair requires view of the the directorsstate of the to preparefinancial financial affairs statements of the Company for each financialas at the year,end of the financialwhich give year a true and and of itsfair viewoperating of the results state of for the that financial year. It affairs also requires of the the Companydirectors asto ensureat the thatend the of the Companyfinancial yearkeeps properand of its accounting operating records, results which for thatdisclose year. with It also reasonable requires theaccuracy directors at any to ensure time the that the financialCompany positionkeeps proper of Cipla accounting Quality records, Chemical which Industries disclose Limited with (“the reasonable Company”). accuracy They at are any also time responsible the forfinancial safeguarding position the of assets Cipla of Quality the Company. Chemical Industries Limited (“the Company”). They are also responsible for safeguarding the assets of the Company. The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibilityThe directors for are internal ultimately control responsible to management. for the internal Standards control and of systems the Company. of internal The controldirectors are delegate designed andresponsibility implemented for internal by management control to tomanagement. provide reasonable Standards assurance and systems as to of the internal integrity control and reliabilityare designed of theand financial implemented statements by management and to safeguard, to provide verify reasonable and maintain assurance accountability as to the integrity of the and Company’s reliability assets. of Thesethe financial systems statements and controls and include to safeguard, the proper verify delegation and maintain of responsibilities accountability within ofa theclearly Company’s defined assets. framework,These systems effective and controls accounting include procedures the proper and delegation adequate of segregationresponsibilities of within duties. a clearly defined framework, effective accounting procedures and adequate segregation of duties. The directors accept responsibility for the financial statements for the year ended 31 March 2020, which haveThe directorsbeen prepared accept usingresponsibility appropriate for the accounting financial policiesstatements supported for the by year reasonable ended 31 and March prudent 2020, which judgmentshave been andprepared estimates using in appropriateconformity with accounting International policies Financial supported Reporting by reasonable Standards and and prudent in the manner requiredjudgments by and the estimatesCompanies in Act,conformity 2012. The with directors International are of Financial the opinion Reporting that the Standards financial andstatements in the manner give arequired true and by fair the viewCompanies of the state Act, 2012.of the The financial directors affairs are of of the the opinion Company that the and financial of its operating statements results. give The directorsa true and further fair view accept of theresponsibility state of the for financial the maintenance affairs of of accountingthe Company records and of which its may operating be relied results. The upondirectors in the further preparation accept responsibilityof financial statements, for the maintenance as well as of accountingadequate systems records of whichinternal may financial be relied control. upon in the preparation of financial statements, as well as adequate systems of internal financial control. Nothing has come to the attention of the directors to indicate that the Company will not remain a going concernNothing forhas at come least to the the next attention twelve ofmonths the directors from the to dateindicate of this that statement. the Company will not remain a going concern for at least the next twelve months from the date of this statement. The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approvedThe financial by thestatements Board of Directorson pages on11 ______andto 49, which have signed been on prepared its behalf onby: the going concern basis, were approved by the Board of Directors on ______and signed on its behalf by:

______Director______Director______Director Director ______2020 ______2020 ______2020 ______2020 Place:______Place:______Place:______Place:______

Annual Report 2019/2020 6161

Annual Report 2019/2020 6161 E. Directors’ Interest In Shares E. Directors’ Interest In Shares As at 31 March 2020, the following directors held a direct interest in the Company’s share Ascapital at 31 as March reflected 2020, inthe the following table below: directors held a direct interest in the Company’s share capital as reflected in the table below: Director Number of shares % Director Number of shares %

Mr. Emmanuel Katongole 101,933,042 2.7912 Mr. Emmanuel Katongole 101,933,042 2.7912 Mr. George William Baguma 101,933,042 2.7912 Mr. George William Baguma 101,933,042 2.7912 Mr. Nevin J Bradford 157,000 0.0043 Mr. Nevin J Bradford 157,000 0.0043 Mr. Stevens Mwanje 19,400 0.0005 Mr. Stevens Mwanje 19,400 0.0005 204,042,484 5.5872 204,042,484 5.5872

F. Auditors F. Auditors The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to Thecontinue auditors, in office Grant in Thornton accordance Certified with sectionPublic Accountants,167 (2) of the have Companies expressed Act, their 2012. willingness to continue in office in accordance with section 167 (2) of the Companies Act, 2012. G. Subsequent Events G. Subsequent Events The directors are not aware of any matter or circumstance which is material to the financial Theaffairs directors of the are company, not aware which of any has matter occurred or circumstancebetween 31 Marchwhich 2020is material and the to date the financialof approval affairsof the financial of the company,statements, which that hashas occurrednot been between otherwise 31 dealtMarch with2020 in andthe the financial date ofstatements. approval of the financial statements, that has not been otherwise dealt with in the financial statements. By Order of the Board By Order of the Board

______COMPANY SECRETARY COMPANY SECRETARY

______2020 ______2020

6062 Annual Report 2019/2020

6062 Annual Report 2019/2020

Statement Of Directors’ Responsibilities Statement Of Directors’ Responsibilities The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the financial which giveyear a andtrue of and its operatingfair view of results the state for thatof the year. financial It also affairs requires of the the Companydirectors to as ensure at the thatend theof the Company financial keepsyear and proper of its accounting operating records,results for which that disclose year. It with also reasonablerequires the accuracy directors at to anyensure time that the the financialRCompanyEPORT position OF keeps THE of proper CiplaINDE accountingPEQualityNDENT Chemical records,AUD ITORIndustries which (continued) disclose Limited with(“the reasonableCompany”). accuracy They are atalso any responsible time the for financial safeguarding position the of assets Cipla Quality of the Company. Chemical Industries Limited (“the Company”). They are also responsible for safeguarding the assets of the Company. Key audit matters How our audit addressed the key audit matters TheValuation directors of are inventories ultimately responsible for the internalOur controlaudit procedures of the Company. involved, The amodirectorsng others: delegate The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibilityInventories, forstated internal at USh control 71 billion to management. as at StandardsWe performed and systems the followingof internal audit control procedures, are designed among responsibility for internal control to management. Standards and systems of internal control are designed and31 implemented March 2020, by represent management the second to provide reasonable others: assurance as to the integrity and reliability of thelargeand financial implementedst category statements ofby assets management and onto safeguard, the statement to provide verify ofreasonable and- maintain We agreedassurance accountability the as cost to the of of rawtheintegrity Company’s materials and reliability to assets. suppliers’ of Thesethefinancial financial systems position statements and of controls the Company. and include to safeguard, the proper verify delegation and invoicesmaintain of responsibilities onaccountability a sample basis. within of theFora clearly Company’swork-in-progress, defined assets. and framework, These systems effective and accountingcontrols include procedures the proper and delegationadequatefinished segregationof responsibilities goods, of we duties. within assessed a clearly whether defined the Thereframework, is a effective significant accounting degree procedures of judgement and adequateabsorption segregation of fixed of production duties. overheads was based Theinvolved directors to ascertain accept responsibility that the cost for of inventories the financial statementson a normal for the capacity year ended of the 31 production March 2020, facilities which and haveaccuratelyThe beendirectors prepared reflects accept using theresponsibility appropriate manufacturing for theaccounting costsfinancial policiesstatementsvariable supported for production the byyear reasonable overheadsended 31 and March were prudent absorbed2020, which into judgmentsincurredhave been and in prepared bringingestimates using them in conformity appropriate to their with physicalaccounting International policieseach Financial u supportednit of Reportingproduction by reasonable Standards on the basis and and of prudentin the the actual manner use requiredlocationjudgments by and the and condition. Companies estimates This in Act, particularly conformity 2012. The relates with directors International to are ofof the theFinancial production opinion Reporting that facilities. the Standardsfinancial statements and in the give manner a therequiredtrue assessment and by fair the view Companiesof ofdirect the labourstate Act, of2012.costs the Thefinancialincurred, directors affairs are of of the the Company opinion that and theof itsfinancial operating statements results. The give directorsmanufacturinga true and further fair acceptoverheads view of responsibility the tostate be absorbedof for the thefinancial maintenance and affairs- We of of also the accounting Company assessed recordsand whether of whichits operating all may costs be includedresults.relied The as uponotherdirectors in rel theeva further preparationnt production accept of responsibility costs. financial statements, for the maintenance as well invasentori adequateof accountinges comprise systems records costsof internalwhich of purchase, financialmay be control.relied costs of upon in the preparation of financial statements, as wellconversion, as adequate and systemsother costsof internal incurred financial in bringing control. the In addition, as per the Company’s accounting inventories to their present location and condition. In Nothing has come to the attention of the directo rs to indicate that the Company will not remain a going policy, inventories are valued at lower of cost or particular, we considered the nature of the overheads concernNothing for has at comeleast theto thenext attention twelve monthsof the directo from thers todate indicate of this that statement. the Company will not remain a going netconcern realisable for at least value. the next Thus, twelve management’s months from the absorbeddate of this tostatement. ascertain whether only directly assessment of percentage of write down for attributable costs were included. We also considered Theinventories financial statements is based on on pages experience 11 to 49, and which have productionbeen prepared levels on to the ensure going inefficienciesconcern basis, were were not approvedThe financial by the statements Board ofon Directors pages 11 on to ______and 49, which have signed been onprepared its behalf on by:the going concern basis, were judgement.approved by the Board of Directors on ______andabsorbed. signed on its behalf by: - Discussed with management to understand the methodology used for the write-down of the Company’s inventories. We evaluated the methods of measurement and assumptions used with reference to historical performance and current market price.

- We also assessed the potential risk for management bias. We tested the mathematical integrity of the value of inventories written down based on the agreed methodology.

- We also assessed whether the inventories are valued at lower of cost or net realisable value. We found the methodology has no indication of management bias and is consistently applied with that adopted in prior years. ______Director Director Director Director ______2020 ______2020 ______2020 ______2020 Place:______Place:______Place:______Place:______

6

Annual Report 2019/2020 6163 Annual Report 2019/2020 6163 E. Directors’ Interest In Shares E. Directors’ Interest In Shares As at 31 March 2020, the following directors held a direct interest in the Company’s share As capitalat 31 March as reflected 2020, the in followingthe table directobelow: rs held a direct interest in the Company’s share capital as reflected in the table below: Director Number of shares % (continued) DirectorREPORT OF THE INDEPENDENT AUDITORNumber of shares % Revenue recognition TheMr. CompanyEmmanuel’s Katongole revenue for the year ended 31 - 101,933,042We reviewed the Company’s accounting 2.7912 Mr.March Emmanuel 2020 was Katongole USh 192,681,692 thousand with 101,933,042policies, including the criteria for revenue2.7912 salesMr. George to Government William Baguma of Uganda (represented by 101,933,042recognition. 2.7912 Mr.National George Medical William Stores) Baguma and the Global Fund to 101,933,042 2.7912 FightMr. AIDS,Nevin TuberculosisJ Bradford and Malaria (“The Global - We 157,000 obtained and reviewed sales contracts0. 0043 MFund”)r. Nevin contributing J Bradford 60% and 29% respectively. held157,000 by the entity to understand 0. the0043 Mr. Stevens Mwanje covenants,19,400 and to identify the performance0. 0005 Mr.Given Stevens the Mwanje significance of revenue as a key obligations19,400 therein, the transaction price and0.0005 performance measure, there is an increased risk 204,042,484at which point the revenue should be5.5872 of misstatement to meet performance targets. In 204,042,484recognised when a performance obligation5.5872 this regard, revenue has been considered a key has been satisfied. audit matter. F. Auditors - On sample basis, assessed the design and F. Auditors operating effectiveness of controls over the The auditors, Grant Thornton Certified Public Accountants,sales process. have expressed their willingness to

Thecontinue auditors, in Grantoffice Thorntonin accordance Certified with Public section Acc 167ountants, (2) of the have Companies expressed Act, their 2012. willingness to - Performed s ubstantive audit procedures – by continue in office in accordance with section 167 (2) of the Companies Act, 2012. G. Subsequent Events supplementing analytical reviews with test of detail procedures. G. Subsequent Events The directors are not aware of any matter or circumstance which is material to the financial affairs of the company, which has occurred between 31 March 2020 and the date of approval TheAd optdirectorsion of IFRSare not 16 Leasesaware of any matter or circumstance which is material to the financial affairsOofn 1 the Aprilof financialthe 2019, company, astatements, new which accounting hasthat occurredhas standard not beenbetween for -otherwise As 31 IFRS March dealt 16 2020 was with adoptedand in thethe atfinancialdate the of start approvalstatements. of the ofIFRS the 16financial Leases statements,became effective, that haswhich not require been otherwiseyear, wedealt performed with in theaudit financial procedures statements. on the Byoperating Order leases of the to Board be on the statement of financial opening balance to gain assurance on the By Orderstatements of the except Board in limited circumstances. The transition from IAS 17. This included new accounting for leases is considered to be evaluating the compliance with transition a matter of most significance as it requires the rules as per IFRS 16 and testing adjustments application of significant judgment and use of on transition; assumptions by management. Significant judgement is required in determining if contract - Reviewed the work performed by the ______contains lease, discount rate and renewal of the management for development of IFRS 16 ______lease term, etc. model; COMPANYThe Company SECRETARY has elected to adopt the simplified - Reviewed and verified the data used by COMPANY approach SECRETARY of transition and has not restated management for development of the model. comparative information. ______2020 - For rent contracts, we verified the lease terms On 1 April 2019, the Company recognised a including payment terms, ren ewal options, ______lease liability,2020 being the remaining lease payme etc. nt, including extension options where renewal is reasonably certain, discounted using the Company’s incremental borrowing rate at the date of initial application in the economic environment of the lease. The corresponding right-of-use asset recognised is the amount of the lease liability adjusted by prepaid or accrued lease payments related to those leases.

7

6064 Annual Report 2019/2020 6064 Annual Report 2019/2020

Statement Of Directors’ Responsibilities Statement Of Directors’ Responsibilities The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the financial which giveyear a and true of and its operatingfair view of results the state for thatof the year. financial It also affair requiress of the the Companydirectors toas ensureat the thatend theof the Company financial keepsyear and proper of it accountings operating records,results for which that discloseyear. It withalso reasonablerequires the accuracy directors atto anyensure time that the the financialRCompanyEPORT position OF keeps THE of proper CiplaINDE accountingPEQualityNDENT Chemical records,AUD ITORIndustries which (continued) disclose Limited with(“the reasonableCompany”). accuracy They are atalso any responsible time the for financial safeguarding position the of assetsCipla Quality of the Company.Chemical Industries Limited (“the Company”). They are also responsible Impairmentfor safeguarding allowance the assets of againstthe Company. trade Thereceivables directors are ultimately responsible for the internalOur controlaudit procedures of the Company. involved, The amodirectorsng others: delegate responsibilityThe directorCompany fors are internalrecognise ultimately controls a responsible loss to management. allowance for the for internal StandardsOur audit control andprocedures ofsystems the Company. includedof internal understandingThe control director ares delegate designedand testing andexpectedresponsibility implemented credit for loss byinternal management(ECL) control on its financialto to management. provide assets reasonable Standardsof the assurance de siandgn andsystems as operating to theof internal integrity effectiveness control and reliability are of designed the of key themeasuredand financial implemented statements at amortised by management and to cost, safeguard, mainly to provide verify trade reasonable andcontrols maintain overassurance accountability the following: as to the of theintegrity Company’s and reliability assets. of Thesereceivablesthe financial systems stated statement and controlsat UShs and 97,820,117include to safeguard, the thousandproper verify delegation and maintain of responsibilities accountability within of thea clearly Company’ defineds assets. framework,(gross)These system as effective ats 31and March accountingcontrols 2020. include procedures The the cumulative proper and delegationadequate- Controls segregationof responsibilities over approving, of duties. within recording a clearly and definedmonitoring of impairmentframework, effective allowance accounting as at that procedure date is s USh and adequatesales andsegregation customer of credit; duties. The37,482,709 directors thousand. accept responsibility Because Expected for the financial Credit statements for the year ended 31 March 2020, which Losses (ECL) model requires significant - Controls around identifying impaired trade haveThe beendirector prepareds accept using responsibility appropriate for theaccounting financial policiesstatements supported for the byyear reasonable ended 31 andMarch prudent 2020, which management judgement and assumptions in receivables; and judgmentshave been and prepared estimates using in conformity appropriate with accounting International policies Financial supported Reporting by reasonable Standards and and prudentin the manner deriving the impairment allowance and hence we requiredjudgment bys theand Companies estimates in Act, conformity 2012. The with directors International are of theFinancial opinion Reporting that the Standardsfinancial statements and in the give manner have considered this audit area to be a key audit - The governance process of classification of trade a requiredtrue and by fair the view Companies of the state Act, of 2012. the Thefinancial director affairss are of of the the Company opinion that and theof itsfinancial operating statement results.s Thegive matter.a true and fair view of the state of the financial affairreceivables,s of the Company including and the of continuous its operating re-assessment results. The directors further accept responsibility for the maintenanceof theof accountingappropriateness records of which assumptions may be usedrelied in for upondirectors in the further preparation accept of responsibility financial statements, for the maintenance as well as adequateof accounting systems recordsof internal which financialmay be control.relied IFRSupon in 9’s the impairment preparation requirements of financial statements, use more as welldetermining as adequate the impairmentsystems of internalallowance. financial control. forward-looking information to recognise Nothingexpected has credit come losses to the – theattention expected of thecredit directo loss rsOur to indicate testing thatof the the design Company and operating will not remain effectiveness a going of concernNothing for ha ats comeleast theto thenext attention twelve monthsof the director from thes todate indicate of this that statement. the Company will not remain a going (ECL)concern model. for at The least Comp thean nexty considers twelve months a broader from thethe controlsdate of providedthis statement. a basis for us to continue with the range of information when assessing credit risk planned nature, timing and extent of our detailed audit Theand financial measuring statements expected on credit pages losses, 11 to 49,including which haveprocedures. been prepared on the going concern basis, were The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approvedpast events, by thecurrent Board conditions, of Directors reasonable on ______and and signed on its behalf by: approved by the Board of Directors on ______and signed on its behalf by: supportable forecasts that affect the expected Our procedures to assess management's specific collectability of the future cash flows of the impairment allowances, in response to the risks specific to instrument. specific customers included obtaining an understanding of the Company's credit policy and evaluated the processes The Company makes use of a simplified for identifying impairment indicators and consequently, approach in accounting for financial assets and the classi fication of the trade receivables. records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. The Company uses its historical experience, external indicators and forward-looking information to calculate the expected cre dit losses using a provision matrix.

______Director Director Director Director ______2020 ______2020 ______2020 ______2020 Place:______Place:______Place:______Place:______

8

Annual Report 2019/2020 6165 Annual Report 2019/2020 6165 E. Directors’ Interest In Shares

As at 31 March 2020, the following directors held a direct interest in the Company’s share capital as reflected in the table below: E. Directors’ Interest In Shares

Director Number of shares % REPORTAs at 31 March OF THE 2020, INDEPENDENT the following AUDITOR’Sdirectors held (continued a direct )interest in the Company’s share capital as reflected in the table below: Other information DirectorMr. Emmanuel Katongole Number of101,933,042 shares 2.7912% The directors are responsible for the other information on pages 58 to 61. Other information does not include theMr. financial George statements William Baguma and our auditor's report thereon. 101,933,042 2.7912

OurMr.Mr. opinionEmmanuel Nevin on J Bradfordthe Katongole financial statements does not cover the101,933,042 other157,000 information and we do not express an audit2.79120.0043 opinion or any form of assurance conclusion thereon. Mr.Mr. George Stevens William Mwanje Baguma 101,933,04219,400 2.79120.0005 In connection with our audit of the financial statements, our responsibility is to read the other information and, inMr. doing Nevin so, Jconsider Bradford whether the other information is materially204,042,484157,000 inconsistent with the financial statements0.00435.5872 or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work weMr. have Stevens performed, Mwanje we conclude that there is a material misstatement19,400 of this other information, we0.0005 are required to report that fact. We have nothing to report in this regard. F. Auditors 204,042,484 5.5872 Responsibilities of the directors for the financial statements The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to The directors are responsible for the preparation and fair presentation of the financial statements in continue in office in accordance with section 167 (2) of the Companies Act, 2012. F. accordanceAuditors with International Financial Reporting Standards and the requirements of the Companies Act, 2012, and for such internal control as the directors determine is necessary to enable the preparation of G.financial Subsequent statements Events that are free from material misstatement, whether due to fraud or error. The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to continue in office in accordance with section 167 (2) of the Companies Act, 2012. In Thepreparing directors the financial are not statements, aware of anythe directorsmatter orare circumstance responsible for which assessing is material the Company to the ’sfinancial ability to continueaffairs as ofa going the concern,company, disclosing, which has as applicable, occurred mattersbetween related 31 March to going 2020 concern and theand usingdate theof goingapproval G.concern Subsequentof the basisfinancial Eventsof accounting statements, unless that the has directors not been either otherwise intend todealt liquidate with thein theCompany financial or to statements. cease operations, or have no realistic alternative but to do so. By The Order directors of the are Board not aware of any matter or circumstance which is material to the financial Auaffairsditor’s ofresponsibilities the company, for which the audithas occurredof the financial between statements 31 March 2020 and the date of approval of the financial statements, that has not been otherwise dealt with in the financial statements. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are Byfree Order from ofmaterial the Boardmisstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be ______expected to influence the economic decisions of users taken on the basis of these financial statements.

COMPANYAs part of an audit SECRETARY in accordance with ISAs, we exercise professional judgement and maintain professional ______scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud COMPANY______or error, SECRETARYdesign2020 and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve ______collusion, forgery,2020 intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

9

6066 Annual Report 2019/2020

6066 Annual Report 2019/2020 StatementStatement Of Of Directors’ Directors’ Responsibilities Responsibilities

TheThe Companies Companies Act, Act, 2012 2012 requires requires the the directors directors to to prepare prepare financial financial statements statements for for each each financial financial year, year, whichwhich give give a atrue true and and fair fair view view of of the the state state of of the the financial financial affairs affairs ofof thethe Company as as at atthe the end end of theof the financialfinancial year year andand ofof its its operatingoperating resultsresults for for that that year. year. It Italso also requires requires the the directorsdirectors to toensure ensure that that the the CompanyCompany keeps keeps proper proper accounting accounting records, records, which which disclose disclose with with reasonable reasonable accuracy accuracy at at any any time time the the financialfinancial position position of of CiplaCipla QualityQuality ChemicalChemical IndustriesIndustries LimitedLimited (“the Company”).Company”). TheyThey are are alsoalso responsible responsible forfor safeguarding safeguarding the the assets assets of of the the Company. Company.

TheThe directors directors are are ultimately ultimately responsible responsible for for the the internal internal control control of of the the Company. Company. The The directors directors delegate delegate responsibilityresponsibility for for internal internal control control to to management. management. Standards Standards and and systems systems of of internal internal control control are are designed designed andand implemented implemented by by management management to to provide provide reasonable reasonable assurance assurance as as to to the the integrity integrity and and reliability reliability of of thethe financial financial statements statements andand toto safeguard,safeguard, verifyverify andand maintain accountabilityaccountability of ofthe the Company’s Company’s assets. assets. TheseThese systems systems and and controls controls include include the the proper proper delegation delegation of of responsibilities responsibilities within within a aclearly clearly defined defined framework,framework, effective effective accounting accounting procedures procedures andand adequateadequate segregationsegregation of duties.duties.

TheThe directors directors accept accept responsibility responsibility for for the the financial financial statements statements for for thethe yearyear endedended 3131 MarchMarch 2020,2020, whichwhich havehave been been prepared prepared using using appropriate appropriate accounting accounting policies policies supported supported by by reasonable reasonable and and prudent prudent judgmentsjudgments and and estimates estimates in inconformity conformity with with International International Financial Financial Reporting Reporting Standards Standards and and in inthe the manner manner requiredrequired by by the the Companies Companies Act, Act, 2012. 2012. The The directors directors are are of of the the opinion opinion that that the the financial financial statements statements givegive a atrue true and and fair fair view view of of the the state state of of the the financial financial affairs affairs ofof thethe Company andand ofof its its operating operating results.results. TheThe directorsdirectors further further accept accept responsibility responsibility for for the the maintenance maintenance of of accounting accounting records records which which may may be be relied relied uponupon in inthe the preparation preparation of of financial financial statements, statements, as as wellwell as as adequateadequate systemssystems ofof internal internal financialfinancial control.control.

NothingNothing has has come come to to the the attention attention of of the the directors directors to to indicate indicate that that the the Company Company will will not not remain remain a agoing going concernconcern for for at at least least the the next next twelve twelve months months from from the the date date of of this this statement. statement.

TheThe financial financial statements statements onon pagespages 11 toto 49, which havehave beenbeen preparedprepared onon thethe going concernconcern basis,basis, werewere approvedapproved by by the the Board Board of of Directors Directors on on ______and ______and signed signed on on its its behalf behalf by: by:

______DirectorDirector DirectorDirector

______2020 2020 ______2020 2020

Place:Place:______Place:Place:______

Annual Report 2019/2020 6167 Annual Report 2019/2020 6167 E.CIPLA Directors’ QUALITY Interest CHEMICAL In Shares INDUSTRIES LIMITED E.ANNUAL Directors’ REPORT Interest ANDIn Shares FINANCIAL STATEMENTS FORAs atTHE 31 MarchYEAR 2020,ENDED the 31 following MARCH directors 2020 held a direct interest in the Company’s share As at 31 March 2020, the following directors held a direct interest in the Company’s share capital as reflected in the table below: STATEMENTcapital as reflected OF PROFIT in the OR table LOSS below: AND OTHER COMPREHENSIVE INCOME

Director Number of shares % Director Number ofNotes shares 2020 2019% UShs’000 UShs’000

Mr. Emmanuel Katongole 101,933,042 2.7912 RevenueMr. Emmanuel Katongole 101,933,0423 192,681,692 195,136,3382.7912 Cost of sales 4 (155,736,503) (141,646,451) Mr. George William Baguma 101,933,042 2.7912 GrossMr. George profit William Baguma 101,933,042 36,945,189 53,489,8872.7912 Mr. Nevin J Bradford 157,000 0.0043 Mr. Nevin J Bradford 157,000 0.0043 Other income 5 38,507 187,538 Mr. Stevens Mwanje 19,400 0.0005 GeneralMr. Stevens and Mwanjeadministrative expenses 6 19,400 (36,617,171) (40,923,582)0.0005 Impairment allowance on financial assets 204,042,48417 (32,169,969) (3,041,727)5.5872 204,042,484 5.5872 Operating (loss)/profit (31,803,444) 9,712,116

Finance costs and finance income - net 9 (3,928,097) (2,584,096) F. Auditors F. (Loss)/profitAuditors before tax 10 (35,731,541) 7,128,020 The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to continue in office in accordance with section 167 (2) of the Companies Act, 2012. Incomecontinue tax in credit/(expense) office in accordance with section 167 11(2)(a) of the 12,658,678Companies Act, 2012. (342,287) (Loss)/profit for the year (23,072,863) 6,785,733 G. Subsequent Events G. Subsequent Events OtherThe directors comprehensive are not income aware of any matter or circumstance which is material - to the financial - The directors are not aware of any matter or circumstance which is material to the financial affairs of the company, which has occurred between 31 March 2020 and the date of approval Totalaffairs comprehensive of the company, (loss)/income which has for occurred the year between 31 March (23,072,86 2020 and3) the date of 6,785,733 approval of the financial statements, that has not been otherwise dealt with in the financial statements. of the financial statements, that has not been otherwise dealt with in the financial statements. 1.86 ByBasic Order and of diluted the Board (loss)/earnings per share (6.32) By Order of the Board

The notes on pages 72 to 106 form an integral part of the financial statements.

______COMPANY SECRETARY COMPANY SECRETARY

______2020 ______2020

11 6068 Annual Report 2019/2020 6068 Annual Report 2019/2020 StatementStatement Of Of Directors’ Directors’ Responsibilities Responsibilities

TheThe Companies Companies Act, Act, 2012 2012 requires requires the the directors directors to to prepare prepare financial financial statements statements for for each each financial financial year, year, whichwhich give give a atrue true and and fair fair view view of of the the state state of of the the financial financial affairs affairs of ofthe the CompanyCompany as as at at the the end end of the of the financialfinancial year year and and of ofits its operating operating results results for for that that year. year. It It also also requires requires the the directors directors to to ensure ensure that that the the CompanyCompany keeps keeps proper proper accounting accounting records, records, which which disclose disclose with with reasonable reasonable accuracy accuracy at at any any time time the the financialfinancial position position of of Cipla Cipla Quality Quality Chemical Chemical Industries Industries LimitedLimited (“the (“the Company”).Company”). They They are are also also responsible responsible forfor safeguarding safeguarding the the assets assets of of the the Company. Company.

TheThe directors directors are are ultimately ultimately responsible responsible for for the the internal internal control control of of the the Company. Company. The The directors directors delegate delegate responsibilityresponsibility for for internal internal control control to to management. management. Standards Standards and and systems systems of of internal internal control control are are designed designed andand implemented implemented by by management management to to provide provide reasonable reasonable assurance assurance as as to to the the integrity integrity and and reliability reliability of of thethe financial financial statements statements and and to to safeguard, safeguard, verify verify and and maintain maintain accountability accountability of of the the Company’s Company’s assets. assets. TheseThese systems systems and and controls controls include include the the proper proper delegation delegation of of responsibilities responsibilities within within a aclearly clearly defined defined framework,framework, effective effective accounting accounting procedures procedures and and adequate adequate segregation segregation of of duties. duties.

TheThe directors directors accept accept responsibility responsibility for for the the financial financial statements statements for for the the year year ended ended 31 31 March March 2020, 2020, which which havehave been been prepared prepared using using appropriate appropriate accounting accounting policies policies supported supported by by reasonable reasonable and and prudent prudent judgmentsjudgments and and estimates estimates in inconformity conformity with with International International Financial Financial Reporting Reporting Standards Standards and and in inthe the manner manner requiredrequired by by the the Companies Companies Act, Act, 2012. 2012. The The directors directors are are of of the the opinion opinion that that the the financial financial statements statements give give a atrue true and and fair fair view view of of the the state state of of the the financial financial affairs affairs of ofthe the CompanyCompany and and of of its its operating operating results. results. The The directorsdirectors further further accept accept responsibility responsibility for for the the maintenance maintenance of of accounting accounting records records which which may may be be relied relied uponupon in inthe the preparation preparation of of financial financial statements, statements, as as well well as as adequate adequate systems systems of ofinternal internal financial financial control. control.

NothingNothing has has come come to to the the attention attention of of the the directors directors to to indicate indicate that that the the Company Company will will not not remain remain a agoing going concernconcern for for at at least least the the next next twelve twelve months months from from the the date date of of this this statement. statement.

TheThe financial financial statements statements on on pages pages 11 11 to to 49, 49, which which have have been been prepared prepared on on the the going going concern concern basis, basis, were were approvedapproved by by the the Board Board of of Directors Directors on on ______and ______and signed signed on on its its behalf behalf by: by:

______DirectorDirector DirectorDirector

______2020 2020 ______2020 2020

Place:Place:______Place:Place:______

The notes on pages 72 to 106 form an integral part of the financial statements.

Annual Report 2019/2020 6169 Annual Report 2019/2020 6169 E. Directors’ Interest In Shares

E. Directors’ Interest In Shares ) - - - - 3 9 9 As at 31 March 2020, the following directors held a direct interest in the Company’s3 share 396

As at 31 Marchcapital 2020, as reflected the following in the directors table below: held a direct interest in the Company’s share , capital as reflected in theTotal table below: 620,026 237 , UShs’000 6,785,73

Director (2,066,753) Number of shares % (11,117,996) (23,072,86 Director 174,089,249 Number172,642,522 of shares 168,310,25 168,310,25 145 %

)

- - - - 3 Mr. Emmanuel Katongole 3 101,933,042 4 4 2.7912 531 Mr. Emmanuel Katongole 101,933,042 , 2.7912 Mr. George William Baguma 101,933,042 2.7912 620,026 313 , UShs’000 earnings Mr. George William Baguma Retained 101,933,042 2.7912 6,785,73 (2,066,753) 97

Mr. Nevin J Bradford 157,000(11,117,996) (23,072,86 0.0043 126,165,384 124,718,657 120,386,39 120,386,39 Mr. Nevin J Bradford 157,000 0.0043 Mr. Stevens Mwanje 19,400 0.0005 Mr. Stevens Mwanje 19,400 0.0005

204,042,484 5.5872

- - - - 204,042,484------5.5872-

F. Auditors UShs’000 Proposed Proposed dividends

F. Auditors 11,117,996 (11,117,996) The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to The auditors,continue Grant in Thornton office inCertified accordance Public with Accountants, section 167 have(2) of expressed the Companies their willingness Act, 2012. to

continue in office in accordance with section 167 (2) of the Companies Act, 2012. ------G. Subsequent Events G. Subsequent Events grant

The directorsare Capital not aware of any matter or circumstance which is material to the financial UShs’000

The directorsaffairs are ofnot theaware company, of any2,275,000 matterwhich has or2,275,000 circumstance occurred between which 31 is materialMarch2,275,000 20202,275,000 to theand financialthe date2,275,000 of approval affairs ofof the the company, financial whichstatements, has occurred that has between not been 31 otherwiseMarch 2020 dealt and thewith datein the of financialapproval statements. 13 of the financial statements, that has not been otherwise dealt with in the financial statements.

By Order of the Board ------By Order of the Board capital Issued Issued UShs’000 45,648,865 45,648,865 45,648,865 45,648,865 45,648,865

______

year COMPANY SECRETARY COMPANY SECRETARY

______2020

______2020

FINANCIAL STATEMENTS previously reported previously as

-

restated

-

YEAR ENDED 31 MARCH 2020 MARCH 31 ENDED YEAR QUALITY CHEMICAL INDUSTRIES LIMITED At 31 March 2018 2018 March 31 At 9 IFRS of adoption of Impact 9 IFRS of adoption on tax Deferred 2018 April 1 At year the for income comprehensive Total the year for Profit income Other comprehensive of Company with owners Transactions dividend Proposed Dividend paid 2019 March 31 At 2019 April 1 At the for income comprehensive Total year the for Loss income Other comprehensive 2020 March 31 At CIPLA STATEMENT OF CHANGES IN EQUITY ANNUAL AND REPORT FOR THE

6070 Annual Report 2019/2020 6070 Annual Report 2019/2020 CIPLA QUALITY CHEMICAL INDUSTRIES LIMITED Statement Of Directors’ Responsibilities ANNUALStatement REPORT Of Directors’ AND FINANCIAL Responsibilities STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020 The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the STATEMENTwhich give a OFtrue CASH and fair FLOWS view of the state of the financial affairs of the Company as at the end of the financial year and of its operating results for that year. It also requires the directors to ensure that the financial year and of its operating results for that year. It also requires the directors to ensure that the Company keeps proper accounting records, which disclose with reasonable accuracy 2020 at any time the 2019 Company keeps proper accounting records, which disclose with reasonable accuracy at any time the financial position of Cipla Quality Chemical Industries NotesLimited (“the Company”). UShs’000 They are also UShs’000responsible financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible forOperating safeguarding activities the assets of the Company. for safeguarding the assets of the Company. (Loss)/profit before tax (35,731,541) 7,128,020 The directors are ultimately responsible for the internal control of the Company. The directors delegate AdjustmentThe directors for: are ultimately responsible for the internal control of the Company. The directors delegate responsibility for internal control to management. Standards and systems of internal control are designed responsibility for internal control to management. Standards and systems of internal control are designed andImpairment implemented allowance by management to provide reasonable assurance17 as32,169,969 to the integrity and reliability3,041,727 of and implemented by management to provide reasonable assurance as to the integrity and reliability of theDepreciation financial statements and to safeguard, verify and maintain12 accountability6,393,020 of the Company’s4,878,464 assets. the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. TheseAmortisation systems and controls include the proper delegation of15 responsibilities429,368 within a clearly defined231,612 These systems and controls include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties. Provisionframework, for obsoleteeffective inventories accounting procedures and adequate segregation1,307,036 of duties. 533,731 Gain on disposal of property and equipment (2,730) (128,768) The directors accept responsibility for the financial statements for the year ended 31 March 2020, which The directors accept responsibility for the financial statements for the year ended 31 March 2020, which haveInterest been expense prepared using appropriate accounting policies supported by3,960,507 reasonable and prudent1,253,973 have been prepared using appropriate accounting policies supported by reasonable and prudent judgmentsInterest income and estimates in conformity with International Financial Reporting Standards- and in the manner(9,601) judgments and estimates in conformity with International Financial Reporting Standards and in the manner required by the Companies Act, 2012. The directors are of the opinion that the financial statements give Crequiredash generated by the fromCompanies operati Act,ons 2012. The directors are of the opinion that8,525,629 the financial statements16,929,158 give a true and fair view of the state of the financial affairs of the Company and of its operating results. The Less:a true Interest and fair paid view of the state of the financial affairs of the Company(3,960,507) and of its operating(1,253,973) results. The directors further accept responsibility for the maintenance of accounting records which may be relied directors further accept responsibility for the maintenance of accounting records which may be relied upon inTax the paid preparation of financial statements, as well as adequate systems(758,584) of internal financial control. - upon in the preparation of financial statements, as well as adequate systems of internal financial control. Changes in working capital Nothing has come to the attention of the directors to indicate that the Company will not remain a going - Nothingin inventories has come to the attention of the directors to indicate that the 9,188,843Company will not remain(44,536,725) a going concern for at least the next twelve months from the date of this statement. - concernin trade andfor atother least receivables the next twelve months from the date of this statement.20,290,407 (50,480,440) The- in tradefinancial and otherstatements payables on pages 11 to 49, which have been prepared(10,054,876) on the going concern29,919,024 basis, were The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approvedNet cash generatedby the Board from of operatingDirectors onactivities ______and signed on its behalf23,230,912 by: (49,422,956) approved by the Board of Directors on ______and signed on its behalf by:

Investing activities Proceeds from sale of property, plant and equipment 2,730 128,768 Purchase of property, plant and equipment (3,535,093) - Additions to capital work-in-progress 13 (11,311,254) (12,250,490) Purchase of intangible assets 15 (49,311) (187,693) Interest received - 38,983 Maturity of placements with financial institutions - 11,049,000 Net cash used in investing activities (14,892,928) (1,221,432)

Financing activities Dividends paid - (11,117,996) Payment of lease liabilities (132,782) - ______Net cash used in financing activities ______(132,782) (11,117,996) ______Director Director NetDirector change in cash and cash equivalents Director 8,205,202 (61,762,384) ______Cash and cash equivalents2020 at start of year ______(51,204,549) 2020 10,557,835 ______2020 ______2020 Cash and cash equivalents at end of year 18 (42,999,347) (51,204,549) Place:______Place:______Place:______Place:______

The notes on pages 72 to 106 form an integral part of the financial statements.

Annual Report 2019/2020 6171 14 Annual Report 2019/2020 6171 E.E. Directors’ Directors’ Interest Interest In In Shares Shares

AsAs at at 31 31 March March 2020, 2020, the the following following directors directors held held a adirect direct interest interest in in the the Company’s Company’s share share capitalcapital as as reflected reflected in in the the table table below: below:

DirectorDirector NumberNumber of of shares shares %%

Mr.Mr. Emmanuel Emmanuel Katongole Katongole 101,933,042101,933,042 2.79122.7912

Mr.Mr. George George William William Baguma Baguma 101,933,042101,933,042 2.79122.7912

Mr.Mr. Nevin Nevin J JBradford Bradford 157,000157,000 0.00430.0043

Mr.Mr. Stevens Stevens Mwanje Mwanje 19,40019,400 0.00050.0005

204,042,484204,042,484 5.58725.5872

F.F. AuditorsAuditors

TheThe auditors, auditors, Grant Grant Thornton Thornton Certified Certified Public Public Accountants,Accountants, have have expressed expressed their their willingness willingness to to continuecontinue in in office office in in accordance accordance with with section section 167 167 (2) (2) of ofthe the Companies Companies Act, Act, 2012. 2012.

G.G. Subsequent Subsequent Events Events

TheThe directors directors are are not not aware aware of of any any matter matter or or circumstance circumstance which which is is material material to to the the financial financial affairsaffairs of of the the company, company, which which has has occurred occurred between between 31 31March March 2020 2020 and and the the date date of approvalof approval ofof the the financial financial statements, statements, that that has has not not been been otherwise otherwise dealt dealt with with in inthe the financial financial statements. statements.

ByBy Order Order of of the the Board Board

______

COMPANYCOMPANY SECRETARY SECRETARY

______20202020

6072 Annual Report 2019/2020 6072 Annual Report 2019/2020 CIStatementPLA QUALITY Of Directors’CHEMICAL ResponsibilitiesINDUSTRIES LIMITED ANNUALStatement REPORT Of Directors’ AND FINANCIAL Responsibilities STATEMENTS FORThe Companies THE YEAR Act, ENDED 2012 requires 31 MARCH the directors 2020 to prepare financial statements for each financial year, whichThe Companies give a true Act, and 2012 fair requires view of the statedirectors of theto preparefinancial financial affairs statements of the Company for each asfinancial at the year,end of the NOTfinancialwhichES give TO year aTHE true and FINANCIAL and of its fair viewoperating STATEMENTS of the results state forof the that financial year. It affairs also requires of the the Company directors as atto theensure end that of thethe financial year and of its operating results for that year. It also requires the directors to ensure that the Company keeps proper accounting records, which disclose with reasonable accuracy at any time the Company keeps proper accounting records, which disclose with reasonable accuracy at any time the 2.financial SIGNIFICANT position of ACCOUNTING Cipla Quality ChemicalPOLICIES Industries (continued) Limited (“the Company”). They are also responsible forfinancial safeguarding position the of assetsCipla ofQuality the Company. Chemical Industries Limited (“the Company”). They are also responsible for safeguarding the assets of the Company. (c) Significant accounting judgements and estimates The directors are ultimately responsible for the internal control of the Company. The directors delegate The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibilityThe preparation for internal of thecontrol financial to management. statements requires Standards management and systems to make of internal judgments, control estimations are designed and andresponsibility implementedassumptions for internal bythat management affect control the reportedtoto management. provide amounts reasonable Standardsof revenues, assurance and expenses, systems as to ofassets the internal integrity and control liabilit and ies. reliabilityare Thedesigned key of theand financial assumptionsimplemented statements madeby management concerning and to safeguard, the to futureprovide andverify reasonable other and key maintain sources assurance ofaccountability estimation as to the uncertaintyintegrity of the and atCompany’s the reliability reporting assets. of Thesethe financialdate systems that couldstatements and controls have aand significant include to safeguard, the risk proper of causing verify delegation anda material maintain of adjustmentresponsibilities accountability to the within carryingof thea clearly Company’samounts defined of assetsassets. framework,Theseand systems liabilities effective and within controls accounting the next include financialprocedures the properyear areand delegation below: adequate of segregationresponsibilities of within duties. a clearly defined framework, effective accounting procedures and adequate segregation of duties. The directorsFair value accept estimation responsibility for the financial statements for the year ended 31 March 2020, which haveThe directorsSeveralbeen prepared assetsaccept and usingresponsibility liabilities appropriate of for the the accountingCompany financial are policies statements either supportedmeasured for the byatyear fairreasonable endedvalue or31 disclosure andMarch prudent 2020, is made which judgmentshaveof been their and preparedfair estimates values. using Observable in conformityappropriate market with accounting dataInternational is used policies as Financial inputs supported to Reporting the extentby reasonable Standardsthat it is available. and and prudent in theQualified manner requiredjudgmentsexternal by and the valuers Companiesestimates are consultedin Act, conformity 2012. for The the with directorsdetermination International are of of Financial theappropriate opinion Reporting thatvaluation the Standards financial techniques andstatements and in inputs.the manner give arequired true and by fair the view Companies of the state Act, of2012. the The financial directors affairs are of ofthe the opinion Company that the and financial of its operating statements results. give The directorsa trueManagement and further fair view accept uses of responsibilitythevaluation state oftechniques the for financial the maintenance to determine affairs of the the accounting fair Company value recordsof financialand of which its instruments operatingmay be reliedresults. (where The upondirectors activein the further marketpreparation accept quotes ofresponsibility are financial not availab statements, for le)the and maintenance nonas- wellfinancial as of adequateassets.accounting This systems records involves of whichinternal developing may financial be estimates relied control. uponand in theassumptions preparation consistent of financial with statements,how market asparticipants well as adequate would price systems the instrument.of internal financialManagement control. Nothingbases has its come assumptions to the attention on observable of the directorsdata as far to asindicate possible, that but the this Company is not always will not available. remain aIn going that concernNothingcase forhas management at come least to the the usesnext attention the twelve best ofmonths information the directors from available.the to date indicate Estimatedof this that statement. the fair Company values may will vary not from remain the actuala going concernprices for that at leastwould the be nextachieved twelve in anmonths arm’s from length the transaction date of this at thestatement. reporting date. The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approvedThe financialAllowance by the statements forBoard slow of moving, onDirectors pages damaged 11 on to ______and 49, and which obsolete have signed beeninventory onprepared its behalf on by:the going concern basis, were approvedThe Co bympany the Board reviews of itsDirectors inventory on to______and assess loss on signed account on ofits obsolescencebehalf by: on a regular basis. In determining whether provision for obsolescence should be recorded in profit or loss, the Company makes judgements as to whether there is any observable data indicating that there is any future saleability of the product and the net realizable value for such product. Accordingly, provision for obsolescence is made where the net realizable value is less than cost based on best estimates by the management, ageing of inventories and historical movement of the inventory.

Useful lives of property, plant, equipment and right-of-use assets Management assesses the appropriateness of the useful lives and residual values of property, plant and equipment at the end of each reporting period. When the estimated useful life or residual value of an asset differs from the previous estimates, the change is applied prospectively in determination of the depreciation charge.

Deferred income tax assets Deferred income tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgment is required to determine the amount of deferred income tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with tax planning strategies. The Company ______considers (i) timing differences that are expected to ______reverse during the tax holiday period, and are not Director______recognised because they are offset against the governmentDirector______grant; and (ii) timing differences which Directorreverse after the tax holiday period, and should be recognizedDirector in the financial statements.

______Current income 2020 taxes ______2020 ______Uncertainties 2020 exist with respect to the interpretation of complex______tax regulations, 2020 changes in tax laws, and Place:the______amount and timing of future taxable income. ThePlace: Company______establishes provisions, based on Place:reasonable______estimates, for possible consequences of auditsPlace: by______the tax authorities. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the Company and the tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing. As the Company assesses the probability for litigation and subsequent cash outflow with respect to taxes as remote, no contingent liability has been recognised.

Annual Report 2019/2020 6173 Annual Report 2019/2020 6173 16 CIE.PLA Directors’ QUALITY Interest CHEMICAL In Shares INDUSTRIES LIMITED E.ANNUAL Directors’ REPORT Interest AND In Shares FINANCIAL STATEMENTS FORAs THE at 31YEAR March ENDED 2020, the31 MARCHfollowing 2020 directors held a direct interest in the Company’s share capital as reflected in the table below: As at 31 March 2020, the following directors held a direct interest in the Company’s share NOcapitalTES TO as THE reflected FINANCIAL in the STATEMENTStable below: Director Number of shares % 2. SIGNIFICANT ACCOUNTING POLICIES (continued) Director Number of shares % (c) Significant accounting judgements and estimates (continued) Mr. Emmanuel Katongole 101,933,042 2.7912 Leases Mr.Mr. EmmanuelGeorge William Katongole Baguma 101,933,042101,933,042 2.79122.7912 The significant judgements in the implementation were determining if a contract contained a lease, Mr.Mr.and GeorgeNevin the J determination WilliamBradford Baguma of whether the Company is101,933,042 reasonably157,000 certain that it will exercise extension0.00432.7912 options present in lease contracts. The significant estimates were the determination of incremental Mr.Mr.borrowing NevinStevens J Bradford Mwanjerates in the respective economic environments.157,00019,400 0.00430.0005 Mr. Stevens Mwanje 19,400 0.0005 Impairment allowance for expected credit losses204,042,484 on trade receivables 5.5872

The Company uses a provision matrix to calculate204,042,484 expected credit losses (ECL) for trade receivables.5.5872 The provision rates are based on days past due for grouping of various customer segments that have F. Auditorssimilar loss patterns. The matrix is initially based on historical observed default rates. The matrix is adjusted with forward looking information. The assessment of the correlation between historical default F. AuditorsTherates auditors, and forecast Grant economic Thornton conditions Certified and Public ECLs Accountants,is a significant haveestimate. expressed their willingness to continue in office in accordance with section 167 (2) of the Companies Act, 2012. TheThe auditors, measurement Grant Thorntonof impairme Certifiednt losses Public under Accountants, IFRS 9 across have relevant expressed financial their assetswillingness requires to G.continue Subsequentjudgments, in office Eventsin particular in accordance for the estimation with ofsection the amount 167 (2) and of timing the ofCompanies future cash Act, flows 2012. when determining impairment losses and the assessment of a significant increase in credit risk. These estimates are driven G. SubsequentTheby directors the outcome Events are of not modelled aware expectedof any matter credit losses or circumstance (ECL) scenarios which and is thematerial relevant to inputs the financial used. The affairsCompany of hasthe madecompany, a number which ofhas assumptions occurred betweenin calculating 31 Marchexpected 2020 credit and lossesthe date for itsof various approval Theoffinancial thedirectors financial assets; are statements,notthe awareCompany of that hasany has electmatter noted toorbeen applycircumstance otherwise a 12-month dealtwhich credit withis lossmaterial in tothe derive tofinancial the expected financial statements. credit affairslosses of on the its financialcompany, assets. which Assumptions has occurred are tobetween be reviewed 31 March on an 2020annual and basis. the date of approval of the financial statements, that has not been otherwise dealt with in the financial statements. By OrderProvisions of the Board By Order of the Board Provisions are inherently based on assumptions and estimates using the best information available. Management makes estimates for the provisions, based on the historical data available and reassesses them at the end of every reporting period.

Impairment of non-financial assets ______The Company reviews its non-financial assets to assess the likelihood of impairment on an annual basis. ______COMPANYIn determining SECRETARY whether such assets are impaired, management makes judgements as to whether there are any conditions that indicate potential impairment of such assets. COMPANY SECRETARY ______2020 ______2020

6074 Annual Report 2019/2020

60 Annual Report 2019/2020 74 17 CIPLA QUALITY CHEMICAL INDUSTRIES LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS StatementStatement OfOf Directors’Directors’ ResponsibilitiesResponsibilities FOR THE YEAR ENDED 31 MARCH 2020

TheThe CompaniesCompanies Act,Act, 20122012 requiresrequires thethe directorsdirectors toto prepareprepare financialfinancial statementsstatements forfor eacheach financialfinancial year,year, NOTwhichwhichES givegive TO a aTHE truetrue FINANCIAL andand fairfair viewview STATEMENTS ofof thethe statestate ofof the the financialfinancial affairsaffairs of thethe CompanyCompany as atas theat theend ofend the of the financialfinancial yearyear andand of its operating operating results results for for that that year. year. It Italso also requires requires the the directors directors to ensureto ensure that that the the 2.CompanyCompany SIGNIFICANT keepskeeps properproper ACCOUNTING accountingaccounting records,records, POLICIES whichwhich (continued) disclosedisclose withwith reasonablereasonable accuracyaccuracy atat anyany timetime thethe (d)financialfinancial New positionstandards,position ofof CiplaCipla interpretations QualityQuality Chemical Chemical and Industries amendIndustriesments LimitedLimited to (“the (“thestandards Company”). Company”). adopted They They duringare are also also theresponsible responsible year forfor safeguardingsafeguarding thethe assetsassets ofof thethe Company.Company. IFRS 16 Leases TheThe directorsdirectors areare ultimatelyultimately responsibleresponsible forfor thethe internalinternal controlcontrol ofof thethe Company.Company. The The directorsdirectors delegatedelegate responsibilityresponsibilityIFRS 16 for forLeases internalinternal is controlacontrol new standard toto management.management. which replaces StandardsStandards IAS and and17 systemsLeasessystems and ofof internal internalintroduces controlcontrol a single areare designed designedlessee andand implementedaccountingimplemented model. byby managementmanagement toto provideprovide reasonablereasonable assuranceassurance asas toto thethe integrityintegrity andand reliabilityreliability ofof thethe financialfinancial statementsstatements andand toto safeguard,safeguard, verifyverify and and maintain maintain accountability accountability of theof the Company’s Company’s assets. assets. The effective date of the standard is for years beginning on or after 1 January 2019. The Company TheseThese systemssystems andand controlscontrols includeinclude thethe properproper delegationdelegation ofof responsibilitiesresponsibilities withinwithin aa clearlyclearly defineddefined has adopted the standard for the first time in the financial statements for the year ended 31 March framework,framework, effectiveeffective accountingaccounting proceduresprocedures andand adequateadequate segregationsegregation ofof duties. duties. 2020.

TheThe directorsdirectorsThe significant acceptaccept judgements responsibilityresponsibility in the forfor implementation thethe financialfinancial statements statementswere determining forfor thethe if yearayear contract endedended contained 31 MarchMarch a lease,2020,2020, andwhichwhich havehave t beenhebeen determination preparedprepared using usingof whether appropriateappropriate the Company accountingaccounting is reasonably policiespolicies supported supportedcertain that byby it reasonablewillreasonable exercise and andextension prudentprudent options judgmentsjudgmentspresent andand in estimatesleaseestimates contracts. inin conformityconformity The significant withwith InternationalInternational estimates were FinancialFinancial the determination ReportingReporting StandardsStandards of incremental andand inin borrowing thethe mannermanner requiredrequiredrates byby in the the CompaniesrespectiveCompanies economic Act,Act, 2012.2012. environments. The The directorsdirectors areTheare ofaverageof thethe opinionopinion discount thatthat rate thethe applied financialfinancial to lease statementsstatements liabilities givegiveon aa truetruethe andand transition fairfair viewview date ofof 1 the theApril statestate 2019 ofof was thethe 5 financialfinancial.5% for US affairsaffairs dollar leaseof thethe liabilities CompanyCompany except and and for of of itsfinance its operating operating lease liabilitiesresults. results. The The directorsdirectorsin which furtherfurther case acceptaccept the implicit responsibilityresponsibility interest rate forfor thewasthe maintenance maintenanceapplied. ofof accountingaccounting recordsrecords whichwhich maymay bebe reliedrelied uponupon inin thethe preparationpreparation ofof financialfinancial statements,statements, asas wellwell asas adequateadequate systemssystems of internalinternal financialfinancial control.control. As of 1 April 2019, the right-of-use assets in respect of property leases and lease liability were UShs NothingNothing3,605,435 hashas comecome thousand toto thethe and attentionattention UShs of829,202of thethe directorsdirectors thousand toto respectively indicateindicate thatthat (refer thethe CompanynoteCompany 21). The willwill difference notnot remainremain between aa goinggoing right-of-use assets and lease liabilities recognised on 1 April 2019 is due to existing prepayments and concernconcern forfor atat leastleast thethe nextnext twelvetwelve monthsmonths fromfrom thethe datedate ofof thisthis statement.statement. accruals recognized under IAS 17 as of 31 March 2019 being included in the measurement of the lease liabilities. TheThe financialfinancial statementsstatements onon pagespages 1111 to to 49, 49, which which have have been been preparedprepared on on the the going going concern concern basis, basis, were were approvedapprovedUncertainty byby thethe over BoardBoard income ofof DirectorsDirectors tax treatments onon ______and______and signedsigned onon itsits behalfbehalf by:by:

The interpretation clarifies how to apply the recognition and measurement requirements in IAS 12 when there is uncertainty over income tax treatments. Specifically, if it is probable that the tax authorities will accept the uncertain tax treatment, then all tax related items are measured according to the planned tax treatment. If it is not probable that the tax authorities will accept the uncertain tax treatment, then the tax related items are measured on the basis of probabilities to reflect the uncertainty. Changes in facts and circumstances are required to be treated as changes in estimates and applied prospectively.

The effective date of the standard is for years beginning on or after 1 January 2019. The Company has adopted the standard for the first time in the financial statements for the year ended 31 March 2020. The impact of the interpretation is not material.

(e) New standards, interpretations and amendments to standards not effective

The company has chosen not to early adopt the following standards and interpretations, which have been published and are mandatory for the company’s accounting periods beginning on or after 1 January 2020 or later periods:

______Effective______date - Year DirectorDirectorStandard/ Interpretation beginningDirectorDirector on or after Expected impact IFRS3 • Definition of a business - 1 January 2020 Unlikely there will be a material Amendments to IFRS 3 impact ______IAS 1 20202020• Presentation of Financial 1 January______2020 20202020Unlikely there will be a material Statements: Disclosure impact Place:Place:______initiative Place:Place:______IAS 8 • Accounting Policies, 1 January 2020 Unlikely there will be a material Changes in Accounting impact Estimates and Errors: Disclosure initiative IFRS 9, IAS • Interest rate benchmark 1 January 2020 Unlikely there will be a material 39, IFRS 7 reform impact • IFRS 17 • IFRS 17 Insurance 1 January 2021 Unlikely there will be a material Contracts impact

6175 18 AnnualAnnual Report Report 2019/2020 2019/2020 6175 CIPLA QUALITY CHEMICAL INDUSTRIES LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS E. Directors’ Interest In Shares FOR THE YEAR ENDED 31 MARCH 2020 As at 31 March 2020, the following directors held a direct interest in the Company’s share NOcapitalTES TO as THEreflected FINANCIAL in the table STATEMENTS below:

2. SIGNIFICANT ACCOUNTING POLICIES (continued) Director Number of shares % (f) Financial instruments

Initial measurement of financial instruments Mr. Emmanuel Katongole 101,933,042 2.7912 The classification of financial instruments at initial recognition depends on their contractual terms and Mr. Georgethe business William model Baguma for managing the instruments.101,933,042 Financial instruments are initially measured 2.7912at their fair value except in the case of financial assets and financial liabilities recorded at FVTPL, transaction Mr. Nevincosts Jare Bradford added to, or subtracted from, this amount. Trade157,000 receivables are measured at the transaction0.0043 price when the fair value of financial instruments at initial recognition differs from the transaction price. Mr. Stevens Mwanje 19,400 0.0005 When the transaction price of the instrument differs from the fair value at origination and the fair value is based on a valuation technique using only inputs204,042,484 observable in market transactions, the Company5.5872 recognises the difference between the transaction price and fair value in net trading income. In those cases where fair value is based on models for which some of the inputs are not observable, the difference between the transaction price and the fair value is deferred and is only recognised in profit F. Auditorsor loss when the inputs become observable, or when the instrument is derecognised.

The Measurementauditors, Grant categories Thornton ofCertified financial Publicassets Accountants, and liabilities have expressed their willingness willingness to to continue in office in accordance with section 167 (2) ofof the the Companies Companies Act, Act, 2012. 2012. The Company classifies all its financial assets based on the business model for managing the assets G. Subsequentand the asset’sEvents contractual terms, measured at either: - Amortised cost The directors- Fair value are through not aware other comprehensive of any matter incomeor circumstance (FVOCI) which is material to the financial affairs- Fair of value the the throughcompany, company, profit which which or loss has has (FVTPL) occurred occurred between between 31 31 March March 2020 2020 and and the the date date of ofapproval approval of the financial statements, that has not been otherwise dealt with with in in the the financial financial statements. statements. The Company classifies and measures its trading portfolio at FVTPL and also may designate financial By Order instruments of the Boardat FVTPL, if so doing eliminates or significantly reduces measurement or recognition inconsistencies.

Financial liabilities, other than loan commitments and financial guarantees, are measured at amortised cost or at FVTPL when they are held for trading and derivative instruments or the fair value designation is applied.

Determination of fair value ______In order to show how fair values have been derived, financial instruments are classified based on a COMPANYhierarchy SECRETARY of valuation techniques, as summarised below:

Level 1 financial instruments - Those where the inputs used in the valuation are unadjusted quoted prices from active markets for identical assets or liabilities that the Company has access to at the ______measurement2020 date. The Company considers markets as active only if there are enough trading activities with regards to the volume and liquidity of the identical assets or liabilities and when there are binding and exercisable price quotes available on the reporting date.

Level 2 financial instruments - Those where the inputs that are used for valuation and are significant, are derived from directly or indirectly observable market data available over the entire period of the instrument’s life. Such inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in inactive markets and observable inputs other than quoted prices such as interest rates and yield curves, implied volatilities, and credit spreads. In addition, adjustments may be required for the condition or location of the asset or the extent to which it relates to items that are comparable to the valued instrument. However, if such adjustments are based on unobservable inputs which are significant to the entire measurement, the Company will classify the instruments as Level 3.

60 Annual Report 2019/2020 76 19 CIPLA QUALITY CHEMICAL INDUSTRIES LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS StatementStatementFOR THE YEAR Of Of Directors’Directors’ ENDED 31 Responsibilities ResponsibilitiesMARCH 2020

TheTheNO CompaniesCompaniesTES TO THE Act, Act, FINANCIAL 20122012 requiresrequires STATEMENTSthe the directorsdirectors to to prepare prepare financialfinancial statementsstatements for for eacheach financialfinancial year,year, whichwhich givegive aa truetrue andand fairfair view view of of the the statestate ofof the the financialfinancial affairsaffairs of of the the Company Company as atas the at endthe ofend the of the 2. financialfinancialSIGNIFICANT yearyear and andACCOUNTING of of its its operating operating POLICIES results results for for(continued)that thatyear. year. It also It also requires requires the thedirectors directors to ensure to ensure that thethat the CompanyCompany keepskeeps properproper accounting accounting records,records, whichwhich disclosedisclose withwith reasonablereasonable accuracyaccuracy at at any any time time thethe financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible financial(f) Financial position instrumentsof Cipla Quality (continued) Chemical Industries Limited (“the Company”). They are also responsible for safeguarding the assets of the Company. for safeguarding the assets of the Company. Determination of fair value (continued) TheThe directorsdirectors are are ultimatelyultimately responsibleresponsible forfor the the internalinternal controlcontrol ofof the the Company.Company. TheThe directorsdirectors delegate delegate responsibilityresponsibilityLevel for for3 financial internalinternal controlinstrumentscontrol toto management.management. - Those that includeStandardsStandards one and andor more systemssystems unobservable of of internalinternal inputs controlcontrol that areare are designeddesigned significant andand implementedimplementedto the measurement byby managementmanagement as whole. to to provideprovide reasonablereasonable assuranceassurance asas to to the the integrityintegrity and and reliabilityreliability of of thethe financialfinancial statementsstatements and and to to safeguard, safeguard, verify verify and and maintain maintain accountability accountability of the of theCompany’s Company’s assets. assets. TheseThese systemssystemsThe Company and and controlscontrols periodically includeinclude reviews thethe properproper its valuation delegation delegation techniques ofof responsibilitiesresponsibilities including withinthe within adopted aa clearlyclearly methodologies defined defined and framework,framework,model effectiveeffective calibrations. accountingaccounting However, proceduresprocedures the base and modelsand adequate adequate may not segregation segregationfully capture of all ofduties. factors duties. relevant to the valuation of the Company’s financial instruments such as credit risk, own credit and/or funding costs. Therefore, TheThe directorsdirectorsthe Company accept accept responsibilityresponsibility applies various for for the thetechniques financialfinancial tostatementsstatements estimate for forthe the thecredit year year risk ended ended associated 31 31 March March with 2020, 2020, its whichfinancial which havehave beenbeenins trumentspreparedprepared measured usingusing appropriateappropriate at fair value, accountingaccounting which policiespoliciesinclude supportedsupporteda portfolio byby-based reasonablereasonable approach andand that prudentprudent estimates the judgmentsjudgmentsexpected and and estimatesestimates net exposure in in conformityconformity per counterparty with with InternationalInternational over the full FinancialFinancial lifetime ReportingReporting of the individual StandardsStandards assets, and and in in inorder thethe mannertomanner reflect requiredrequired the byby creditthe the CompaniesCompanies risk of the individualAct, Act, 2012.2012. counterpartiesTheThe directorsdirectors are arefor noofof n-the thecollateralized opinionopinion thatthat financial the the financialfinancial instruments. statementsstatements The Company give give aa truetrue andandestimates fairfair view view the of of value the the state stateof its ofof own the the credit financialfinancial from affairsaffairsmarket ofobservable of the the Company Company data, andsuch and of ofasits secondary itsoperating operating pricesresults. results. forThe itsThe directorsdirectors tradedfurther further debt accept accept and responsibility responsibilitythe credit spread for for the the on maintenance maintenancecredit default ofof swaps accounting accounting and traded recordsrecords debts which which on mayitself.may be beThe reliedrelied Company uponupon inin theevaluathe preparationpreparationtes the levelling ofof financial financial at each statements,statements, reporting period asas well well on asas an adequate instrumentadequate systems systems-by-instrument of of internal internal basis financial financial and reclassifies control. control. instruments when necessary, based on the facts at the end of the reporting period. NothingNothing hashas come come toto the the attentionattention ofof the the directorsdirectors to to indicateindicate thatthat the the CompanyCompany will will notnot remainremain aa goinggoing concernconcern Receivablesforfor at at leastleast the theand nextnext financial twelve twelve investments monthsmonths from from thethe datedate ofof this this statement.statement. The Company measures receivables and other financial investments at amortised cost only if both of TheThe financialfinancial statementsstatements on on pages pages 11 11to to49, 49, which which have have been been prepared prepared on onthe the going going concern concern basis, basis, were were the following conditions are met: approvedapproved byby the the BoardBoard ofof DirectorsDirectors on on ______and______and signedsigned onon itsits behalfbehalf by:by:

- The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows - The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

The details of these conditions are outlined below:

Business model assessment

The Company determines its business model at the level that best reflects how it manages groups of financial assets to achieve its business objective: Considerations are made based on the following criteria:

- The risks that affect the performance of the business model (and the financial assets held within that business model) and the way those risks are managed - How managers of the business are compensated (for example, whether the compensation is based on the fair value of the assets managed or on the contractual cash flows collected) ______- The expected frequency, value and timing of______sales are also important aspects of the Company’s DirectorDirector assessment. The business model assessmentDirectorDirector is based on reasonably expected scenarios without taking 'worst case' or 'stress case’ scenarios into account. If cash flows after initial recognition are realised in a way that is different from the Company's original expectations, the Company does not ______change 20202020 the classification of the remaining ______financial assets 20202020held in that business model, but incorporates such information when assessing newly originated or newly purchased financial Place:Place:______assets going forward. Place:Place:______

20 AnnualAnnual ReportReport 2019/20202019/2020 61776177 CIPLA QUALITY CHEMICAL INDUSTRIES LIMITED ANNUALE. Directors’ REPORT Interest AND In SharesFINANCIAL STATEMENTS FORE. Directors’ THE YEAR Interest ENDED In Shares31 MARCH 2020 As at 31 March 2020, the following directors held a direct interest in the Company’s share As at 31 March 2020, the following directors held a direct interest in the Company’s share NOTcapitalES TO asTHE reflected FINANCIAL in the STATEMENTS table below: capital as reflected in the table below: 2. SIGNIFICANT ACCOUNTING POLICIES (continued) Director Number of shares % (f) DirectorFinancial instruments (continued) Number of shares %

Receivables and financial investments (continued) Mr. Emmanuel Katongole 101,933,042 2.7912 Mr.The Emmanuel SPPI test Katongole 101,933,042 2.7912 Mr. George William Baguma 101,933,042 2.7912 Mr.As George a second William step Baguma of its classification process, the 101,933,042Company assesses the contractual terms of2.7912 the Mr.financial Nevin J assetBradford to identify whether they meet the SPPI157,000 test. ‘Principal’ for the purpose of this test0.0043 is Mr.defined Nevin asJ Bradford the fair value of the financial asset at initial recognition157,000 and may change over the life of0.0043 the Mr.financial Stevens Mwanjeasset (for example, if there are repayments19,400 of principal or amortisation of0.0005 the Mr.premium/discount). Stevens Mwanje 19,400 0.0005 204,042,484 5.5872 The most significant elements of interest within a204,042,484 lending arrangement are typically the consideration5.5872 for the time value of money and credit risk. To make the SPPI assessment, the Company applies judgement and considers relevant factors such as the currency in which the financial asset is F. Auditorsdenominated, and the period for which the interest rate is set. In contrast, contractual terms that F. Auditorsintroduce a more than de minimis exposure to risks or volatility in the contractual cash flows that are Theunrelated auditors, to Granta basic Thornton lending arrangementCertified Public do not Accountants, give rise to havecontractual expressed cash theirflows thatwillingness are solely to payments of principal and interest on the amount outstanding. In such cases, the financial asset is continueThe auditors, in office Grant in Thornton accordance Certified with sectionPublic Accountants,167 (2) of the have Companies expressed Act, their2012. willingness to continuerequired in to office be measured in accordance at FVTPL. with section 167 (2) of the Companies Act, 2012. G. Subsequent Events G. SubsequentReclassification Events of financial assets and liabilities The directors are not aware of any matter or circumstance which is material to the financial TheThe directors Company are does not not aware reclassify of any its matterfinancial or assets circumstance subsequent which to their is material initial recognition, to the financial apart from affairsthe exceptional of the company, circumstances which inhas which occurred the Company between acquires, 31 March disposes 2020 of,and or the terminates date of aapproval business affairs of the company, which has occurred between 31 March 2020 and the date of approval of line.the Financialfinancial liabilities statements, are never that reclassified.has not been otherwise dealt with in the financial statements. of the financial statements, that has not been otherwise dealt with in the financial statements.

By OrderDerecognition of the Board of financial assets and liabilities By Order of the Board Financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when the rights to receive cash flows from the financial asset have expired. The Company also derecognises the financial asset if it has both transferred the financial asset and the transfer qualifies for derecognition. ______The Company has transferred the financial asset if, and only if, either: COMPANY- The SECRETARYCompany has transferred its contractual rights to receive cash flows from the financial asset; COMPANYor SECRETARY - It retains the rights to the cash flows, but has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass–through’ arrangement ______2020 ______Pass-throug2020h arrangements are transactions whereby the Company retains the contractual rights to receive the cash flows of a financial asset (the 'original asset'), but assumes a contractual obligation to pay those cash flows to one or more entities (the 'eventual recipients'), when all of the following three conditions are met: - The Company has no obligation to pay amounts to the eventual recipients unless it has collected equivalent amounts from the original asset, excluding short-term advances with the right to full recovery of the amount lent plus accrued interest at market rates; - The Company cannot sell or pledge the original asset other than as security to the eventual recipients; and - The Company must remit any cash flows it collects on behalf of the eventual recipients without material delay.

In addition, the Company is not entitled to reinvest such cash flows, except for investments in cash or cash equivalents, including interest earned, during the period between the collection date and the date of required remittance to the eventual recipients.

6078 Annual Report 2019/2020 6078 Annual Report 2019/2020 21 CIPLAStatement QUALITY Of CHEMICALDirectors’ INDUSTRIESResponsibilities LIMITED ANNUALStatement REPORT Of Directors’ AND FINANCIAL Responsibilities STATEMENTS FORThe THECompanies YEAR Act,ENDED 2012 requires31 MARCH the directors2020 to prepare financial statements for each financial year, whichThe Companies give a true Act, and 2012 fair requires view of the directorsstate of theto preparefinancial financial affairs statements of the Company for each asfinancial at the year,end of the NOTfinancialwhichES giveTO year THEa true andFINANCIAL and of itsfair viewoperating STATEMENTS of the results state of for the that financial year. It affairs also requires of the theCompany directors as atto the ensure end thatof the Companyfinancial keepsyear and proper of its accounting operating records,results for which that discloseyear. It withalso reasonablerequires the accuracydirectors to at anyensure time that the the 2.financial CompanySIGNIFICANT positionkeeps properof ACCOUNTING Cipla accounting Quality records, ChemicalPOLICIES which Industries (continued) disclose Limited with (“the reasonable Company”). accuracy They at are any also time responsible the

forfinancial safeguarding position the of assetsCipla ofQuality the Company.Chemical Industries Limited (“the Company”). They are also responsible (f)for safeguardingFinancial instruments the assets of(continued) the Company. The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibilityThe directorsDerecognition forare internal ultimately of financial control responsible to assets management. forand the liabilities internal Standards (continued)control and of systems the Company. of internal The control directors are delegate designed andresponsibility implemented for internalby management control to tomanagement. provide reasonable Standards assurance and systems as to of the internal integrity control and reliabilityare designed of theand financial implementedA transfer statements only by qualifies management and for to derecognition safeguard, to provide verify ifreasonable either: and maintain assurance accountability as to the integrity of the and Company’s reliability assets. of Thesethe financial- systems The Companystatements and controls has and transferredinclude to safeguard, the substantiallyproper verify delegation and all themaintain risksof responsibilities andaccountability rewards withinof theof the aasset; clearlyCompany’s or defined assets. framework,These- systemsThe effective Company and controls accounting has includeneither procedures transferredthe proper and nordelegation adequateretained of substantially segregationresponsibilities allof thewithin duties. risks a clearlyand rewards defined of the framework,asset effective but has accounting transferred procedurescontrol of the and asset. adequate segregation of duties.

The directors accept responsibility for the financial statements for the year ended 31 March 2020, which The Company considers control to be transferred if and only if, the transferee has the practical ability haveThe directorsbeen prepared accept usingresponsibility appropriate for the accounting financial policiesstatements supported for the byyear reasonable ended 31 andMarch prudent 2020, which to sell the asset in its entirety to an unrelated third party and can exercise that ability unilaterally and have been prepared using appropriate accounting policies supported by reasonable and prudent judgmentswithout and imposing estimates additional in conformity restrictions with onInternational the transfer. Financial Reporting Standards and in the manner judgments and estimates in conformity with International Financial Reporting Standards and in the manner required by the Companies Act, 2012. The directors are of the opinion that the financial statements give required by the Companies Act, 2012. The directors are of the opinion that the financial statements give a trueWhen and fairthe Company view of the has state neither of the transferred financial nor affairs retained of substantiallythe Company all the and risks of andits operating rewards andresults. has The directorsa trueretained and further fair control view accept of thetheresponsibility asset,state ofthe the forasset financial the continues maintenance affairs to be ofof recognised the accounting Company only records toand the of extent whichits operating mayof the be Company’s results.relied The upondirectors continuingin the further preparation involvement,accept ofresponsibility financial in which statements,for case, the maintenancethe asCompany well as of also adequateaccounting recognises systems records an of associatedwhichinternal may financial liability.be relied Thecontrol. upon transferredin the preparation asset and of thefinancial associated statements, liability as are well measured as adequate on a systems basis that of internal reflects financialthe rights control.and Nothingobligations has come that to the the Company attention hasof theretained. directors Continuing to indicate involvement that the Companythat takes willthe formnot remain of a guarantee a going concernNothingover forhas the atcome transferred least to the the next asset attention twelve is measured ofmonths the directors at from the lowerthe to date indicate of the of original this that statement. the carrying Company amount will ofnot the remain asset anda going the concernmaximum for at amountleast the of next consideration twelve months the Company from the coulddate beof requiredthis statement. to pay. The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approvedThe financialIf continuing by thestatements Boardinvolvement of onDirectors pages takes 11the on to ______and form49, ofwhich a written have signed orbeen purchased onprepared its behalf option on by:the (or goingboth) concernon the transferred basis, were approvedasset, by the the continuing Board of involvementDirectors on is ______and measured at thesigned value on the its Companybehalf by: would be required to pay upon repurchase. In the case of a written put option on an asset that is measured at fair value, the extent of the entity’s continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price.

Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability. The difference between the carrying value of the original financial liability and the consideration paid is recognised in profit or loss.

Impairment of financial assets

______IFRS 9’s impairment requirements use more forward______-looking information to recognise expected credit ______losses – the expected credit loss (ECL) model. Instruments______within the scope of the requirements Directorincluded loans and other debt-type financial assetsDirector measured at amortised cost and FVOCI. The DirectorCompany considers a broader range of information whenDirector assessing credit risk and measuring expected ______credit losses, 2020 including past events, current conditions,______reasonable and 2020 supportable forecasts that affect ______the expected 2020 collectability of the future cash flows of ______the instrument. 2020

Place:The______Company makes use of a simplified approach Place:in accounting______for trade and other receivables and Place:records______the loss allowance as lifetime expected creditPlace: losses.______These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. In calculating, the Company uses its historical experience, external indicators and forward- looking information to calculate the expected credit losses using a provision matrix. For financial assets for which the Company has no reasonable expectations of recovering either the entire outstanding amount, or a proportion thereof, the gross carrying amount of the financial asset is reduced. This is considered a (partial) derecognition of the financial asset.

Annual Report 2019/2020 6179 Annual Report 2019/2020 6179 22 CIPLAE. Directors’ QUALITY Interest CHEMICAL In Shares INDUSTRIES LIMITED ANNUALE. Directors’ REPORT Interest AND In SharesFINANCIAL STATEMENTS FORAs THE at 31YEAR March ENDED 2020, 31the MARCH following 2020 directors held a direct interest in the Company’s share Ascapital at 31 asMarch reflected 2020, inthe the following table below:directors held a direct interest in the Company’s share capital as reflected in the table below: NOTES TO THE FINANCIAL STATEMENTS Director Number of shares % 2. DirectorSIGNIFICANT ACCOUNTING POLICIESNumber (continued) of shares %

(f) Financial instruments (continued) Mr. Emmanuel Katongole 101,933,042 2.7912 Mr.Classification Emmanuel Katongole and measurement of financial liabilities101,933,042 2.7912 Mr. George William Baguma 101,933,042 2.7912 Mr.The George Company’s William financial Baguma liabilities include borrowings101,933,042 and trade and other payables. Financial liabilities2.7912 Mr.are Nevin initially J Bradford measured at fair value, and, where applicable,157,000 adjusted for transaction costs unless0.0043 the Mr.Company Nevin J Bradford designated a financial liability at fair value through157,000 profit or loss. 0.0043 Mr. Stevens Mwanje 19,400 0.0005 Mr.Subsequently, Stevens Mwanje financial liabilities are measured at amortised19,400 cost using the effective interest method0.0005 except for derivatives and financial liabilities designated204,042,484 at FVTPL, which are carried subsequently5.5872 at fair value with gains and losses recognised in profit204,042,484 or loss (other than derivative financial instruments5.5872 that are designated and effective as hedging instruments).

F. AuditorsAll interest related charges and, if applicable, changes in an instrument’s fair value that are reported in F. Auditorsprofit or loss are included within finance costs or finance income. The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to (g) ThecontinueProperty, auditors, in plant,office Grant equipment Thorntonin accordance and Certified right with-of -usePublicsection assets Accountants,167 (2) of the have Companies expressed Act, their 2012. willingness to continue in office in accordance with section 167 (2) of the Companies Act, 2012. Property, plant and equipment are stated at cost, less accumulated depreciation and any impairment G. Subsequent Events G. Subsequentlosses. Events

The directors are not aware of any matter or circumstance which is material to the financial TheDepreciation directors areis calculated not aware on aof straight any matter-line basis or circumstance(prorated over thewhich useful is materiallive) at annual to the rates financial estimated affairsto write ofoff thethe carrying company, values which of assets has occurredover their expectedbetween 31useful March lives. 2020 and the date of approval affairsof the financialof the company, statements, which that has has occurred not been between otherwise 31 Marchdealt 2020 with inand the the financial date of approvalstatements. of the financial statements, that has not been otherwise dealt with in the financial statements. The annual depreciation rates/life in use are: By Order of the Board By OrderBuildings of the Board Lower of 4% and the lease period for buildings on leased land Motor vehicles 25.0% Tools and equipment 25.0% Computers 33.3% Furniture and fittings 12.5% Plant and machinery 10.0% ______Right-of-use assets 3 – 5 years ______Assets in the course of construction (capital work-in-progress) are not depreciated. Upon completion, the COMPANYaccumulated SECRETARY cost is transferred to an appropriate asset category, where it is depreciated according to the COMPANYpolicy set outSECRETARY above.

______An item of Property,2020 plant, equipment and right-of-use assets is derecognised upon disposal or when no ______future economic2020 benefits are expected from its use or disposal. Any gain or loss arising on derecognition is determined by reference to the asset carrying amount and disposal proceeds and is included in profit or loss in the year the item is derecognised.

Refer items 2(s) below for accounting policy details for right-of-use assets.

(h) Intangible assets

Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses. Intangible assets comprise: • Computer software, which is amortised over its economic useful life of three years; and • Licences and patents, which are amortised over a period of 10 years.

6080 Annual Report 2019/2020 6080 Annual Report 2019/2020 23 StatementCIPLA QUALITY Of Directors’ CHEMICAL Responsibilities INDUSTRIES LIMITED ANNUALStatement REPORT Of Directors’ AND FINANCIAL Responsibilities STATEMENTS TheFOR Companies THE YEAR Act, ENDED 2012 requires 31 MARCH the directors 2020 to prepare financial statements for each financial year, which The Companies give a true Act, and 2012 fair requires view of thethe statedirectors of the to financialprepare financial affairs ofstatements the Company for each asfinancial at the year,end of the financialNOTwhichES give yearTO a THEtrue and andFINANCIAL of its fair viewoperating ofSTATEMENTS the results state forof the that financial year. It alsoaffairs requires of the the Company directors as atto theensure end that of the the Company financial keepsyear andproper of its accounting operating records,results for which that discloseyear. It withalso reasonablerequires the accuracy directors atto anyensure time that the the financial2.Company SIGNIFICANT position keeps properof ACCOUNTINGCipla accounting Quality records,Chemical POLICIES whichIndustries (continued) disclose Limited with (“the reasonable Company”). accuracy They at are any also time responsible the forfinancial safeguarding position the of assets Cipla ofQuality the Company. Chemical Industries Limited (“the Company”). They are also responsible for safeguarding the assets of the Company. (i) Impairment of non-financial assets The directors are ultimately responsible for the internal control of the Company. The directors delegate The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibilityThe carrying for internal amounts control of theto management. Company’s non Standards-financial and assets, systems other of thaninternal deferred control tax are assets designed and responsibility for internal control to management. Standards and systems of internal control are designed and implementedinventory areby managementreviewed at each to provide reporting reasonable date to assurancedetermine aswhether to the thereintegrity is any and indicationreliability ofof theand financial implementedimpairment. statements byIf any management such and indicationto safeguard, to provide exists, verify reasonablethen theand asset’s maintain assurance recoverable accountability as to amountthe integrity of is the estimated. and Company’s reliability assets. of Thesethe financial systems statements and controls and include to safeguard, the proper verify delegation and maintain of responsibilities accountability within of thea clearly Company’s defined assets. framework,These Thesystems recoverableeffective and controls accounting amount include of proceduresan theasset proper or cash-generatingand delegation adequate of segregationunitresponsibilities is the greater of within duties. of its a valueclearly in defineduse and its framework,fair value effective less costs accounting to sell. In procedures assessing valueand adequate in use, the segregation estimated future of duties. cash flows are discounted The directorsto their accept present responsibility value using fora pre the-tax financial discount statements rate that reflects for the current year endedmarket 31 assessments March 2020, of whichthe haveThe directorsbeentime preparedvalue accept of money using responsibility andappropriate the risksfor the accountingspecific financial to the policies statements asset. supportedFor forthe thepurpose by year reasonable ofended impairment 31 and March testing,prudent 2020, assets which judgmentshave beenthat and cannotprepared estimates be usingtested in conformityappropriate individually with accounting are International grouped policies together Financial supported into Reporting the by smallest reasonable Standards group and and of prudentinassets the manner that requiredjudgmentsgenerates by and the Companiesestimates cash inflows in Act, conformity from 2012. continuing The with directors International use that are are of largelyFinancial the opinion independent Reporting that the of Standardsfinancial the cash statementsandinflows in theof other manner give arequired true andassets by fair the or view groupsCompanies of theof assets state Act, of2012.(the the “cashThe financial directors-generating affairs are unit, of ofthe or the CGU”).opinion Company that the and financial of its operating statements results. give The directorsa true and further fair acceptview of responsibilitythe state of the for thefinancial maintenance affairs ofof accountingthe Company records and of which its operatingmay be reliedresults. The upondirectors inThe the further Company’spreparation accept corporate ofresponsibility financial assets statements, for do the not maintenancegenerate as well separate as of adequateaccounting cash inflows. systems records If ofthere internalwhich is an may indicationfinancial be relied thatcontrol. upon ina corporatethe preparation asset may of financial be impaired, statements, then the recoverableas well as adequate amount is systems determined of internal for the CGUfinancial to which control. Nothingthe has corporate come to asset the attention belongs. of the directors to indicate that the Company will not remain a going concernNothing forhas at come least to the the next attention twelve ofmonths the directors from the to date indicate of this that statement. the Company will not remain a going concernAn for impairm at leastent theloss next is recognized twelve months if the carryingfrom the amount date of of thisan assetstatement. or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were recognized in respect of CGUs are allocated first to reduce the carrying amount of any goodwill approvedThe financial by the statements Board of onDirectors pages 11 on to ______and 49, which have signed been onprepared its behalf on by:the going concern basis, were approvedallocated by the to Boardthe units, of Directorsand then toon reduce ______and the carrying signed amounts on its of behalf the other by: assets in the unit (group of units) on a pro rata basis.

Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognized.

(j) Inventories

Inventories comprise mainly raw materials, work-in-progress, finished goods, spares and supplies. They are stated at the lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and condition are accounted for as follows:

• Raw materials: purchase cost on a weighted average basis including transport costs, handling costs, ______duties and other costs incurred in bringing the inventories______to their present location and condition. Director______Director______Director• Finished goods and work-in-progress: cost of directDirector materials and labour and a proportion of ______manufacturing 2020 overheads based on normal operating______capacity but 2020excluding borrowing costs. ______2020 ______2020 Net realisable value is the estimated selling price in the ordinary course of business, less estimated Place:costs______of completion and the estimated costs necessaryPlace: to______make the sale. Any write down to net Place:realisable______value are recognised in profit or loss in thePlace: period ______it is determined.

Annual Report 2019/2020 6181 Annual Report 2019/2020 6181 24 E.CIPLA Directors’ QUALITY Interest CH EMICALIn Shares INDUSTRIES LIMITED E.ANN Directors’UAL REPORT Interest ANDIn Shares FINANCIAL STATEMENTS FORAs THE at 31 YEAR March ENDED 2020, the 31 followingMARCH 2020directo rs held a direct interest in the Company’s share Ascapital at 31 Marchas reflected 2020, inthe the following table below: directors held a direct interest in the Company’s share capital as reflected in the table below: NOTES TO THE FINANCIAL STATEMENTS Director Number of shares % 2.Director SIGNIFICANT ACCOUNTING POLICIESNumber (conti ofnu sharesed) %

(k) Employee benefits Mr. Emmanuel Katongole 101,933,042 2.7912 Mr. EmmanuelAll of the Company`s Katongole employees are eligible for annual101,933,042 leave. The Company also contributes 2.7912 Mr. forGeorge its employees William Bagumato the National Social Security Fund101,933,042 (NSSF). Provisions for annual leave and long2.7912 Mr. Georgeservice rewardsWilliam Baguma and contributions to NSSF are charged101,933,042 to the income statement as incurred. 2.7912Any Mr. differencesNevin J Bradford between the charge to income and NSSF157,000 contributions payable is recorded in 0. the0043 Mr. Nevinbalance J Bradford sheet under other payables, while separate157,000 provisions are made for leave pay and 0.long0043 Mr. service Steven sawards. Mwanje 19,400 0.0005 Mr. Stevens Mwanje 19,400 0.0005 The estimated monetary liability for employees’ 204,042,484accrued annual leave entitlement at the reporti5.5872ng date is categorized as an expense accrual. 204,042,484 5.5872

(l) Tax F. Auditors F. AuditorsCurrent income tax TheTaxati auditors,on is proviGrantded Thornton in the stat Certifiedement of Public comp rAehenccountants,sive income have on texpressedhe basis of theirthe results willingness included to Thecontinue tauditors,herein inad office justGranted in Thornton accordanceaccordance Certified with with the sectionPublic provisi Aon 167ccs ountants, of(2) the of Inc theome have Companies Tax expressed Act (C Act,ap. their340 2012.). willingnessCurrent income to continuetax ass inets office and liinab ailicctiesordance for the currwithen sectiont and prior 167 pe (2)riod ofs are the meaCompaniessured at t Act,he am 2012.ount expected to be G. Subsequentrecovered Eventsfrom or paid to the taxation authorities. The tax rates and tax laws used to compute the G. Subsequentamount are Events those that are enacted or substantively enacted, by the reporting date. Current income tax Therelati directorsng to item ares recnotogn awareised ouoftsi anyde profi mattert or loss or circumstanceis recognised in which other cisomp materialrehensive to inc theome financial. Theaffairs directors of the are company, not aware which of anyhas occurredmatter or between circumstance 31 March which 2020 is material and the to date the offinancial approval affairsof theDeferred offinancial the tax company, statements, which that has has occurred not been between otherwise 31 March dealt 2020 with andin the the financial date of statements. approval of the financial statements, that has not been otherwise dealt with in the financial statements. Deferred income tax is provided using the liability method on temporary differences at the reporting date By Orderbetween of the the Board tax bases of assets and liabilities and their carrying amounts for financial reporting By Orderpurpo ofses. the Defe Boardrred income tax liabilities are recognized for all taxable temporary differences. Deferred income tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductiblem te porary differences, and the carry forward of unused tax credits and unused tax losses can be utilized except:

______l Where the deferred income tax liability arises from the initial recognition of goodwill or of an asset ______or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and COMPANY SECRETARY COMPANYl In res SECRETARYpect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. ______2020 ______The carryi2020ng amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred income tax relating to items recognised outside profit or loss is recognised in other comprehensive income. Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

6082 Annual Report 2019/2020 6082 Annual Report 2019/2020 25 StatementCIPLA QUALITY Of Directors’ CHEMICAL Responsibilities INDUSTRIES LIMITED ANNUALStatement REPORT Of Directors’ AND FINANCIAL Responsibilities STATEMENTS TheFOR Companies THE YEAR Act, ENDED 2012 requires 31 MARCH the directors 2020 to prepare financial statements for each financial year, which The Companiesgive a true Act,and 2012fair viewrequires of thethe statedirectors of the to financialprepare financialaffairs ofstatements the Company for each asfinancial at the year,end of the financialNOTwhichES give TOyear aTHE true and FINANCIALand of its fair viewoperating STATEMENTSof the results state forof the that financial year. It alsoaffairs requires of the the Company directors as toat ensurethe end that of the the Company financial keepsyear andproper of its accounting operating records, results for which that disclose year. It with also reasonable requires the accuracy directors at to anyensure time that the the financial2.Company SIGNIFICANT position keeps properof ACCOUNTINGCipla accounting Quality records,Chemical POLICIES whichIndustries (continued) disclose Limited with (“the reasonable Company”). accuracy They at are any also time responsible the for financial safeguarding position the of assets Cipla ofQuality the Company. Chemical Industries Limited (“the Company”). They are also responsible (l)for safeguardingTax (continued) the assets of the Company. The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibilityThe directorsValue Added for are internal ultimately Tax (VAT)control responsible to management. for the internalStandards control and ofsystems the Company. of internal The control directors are delegatedesigned andresponsibility implemented for byinternal management control to to management. provide reasonable Standards assurance and systems as to of the internal integrity control and reliability are designed of theand financial implementedRevenues, statements expenses by management andand toassets safeguard, to are provide recognised verify reasonable netand of maintain the assurance amount accountability ofas VAT to the except: integrity of the andCompany’s reliability assets. of Thesethe financial systems andstatements controls and include to safeguard, the proper verify delegation and maintain of responsibilities accountability within of thea clearly Company’s defined assets. framework,These• systems Whereeffective and the controls accountingVAT incurred include procedures on the a purchaseproper and delegation of adequate goods andof segregation responsibilities services is ofnot within duties.recoverable a clearly from defined Uganda framework,Revenue effective Authority, accounting in which procedures case the andVAT adequate is recognised segregation as part ofof the duties. cost of acquisition of the The directorsasset accept or as responsibility part of the expense for the for financial the item statementsas applicable; for and the year ended 31 March 2020, which haveThe beendirectors• Receivablesprepared accept using responsibility and appropriatepayables for are the accountingstated financial with thepolicies statements amount supported of forVAT the included. by year reasonable ended 31 and March prudent 2020, which judgmentshave been and prepared estimates using in conformityappropriate with accounting International policies Financial supported Reporting by reasonable Standards and and prudentin the manner requiredjudgmentsThe by net theand amount Companiesestimates of VAT in Act, conformity recoverable 2012. The with directorsfrom, International or payable are of theFinancialto, theopinion taxation Reporting that authority the Standardsfinancial is included statementsand asin thepart manner giveof a requiredtrue receivablesand by fair the view Companiesor payables of the state Act,in the of2012. statement the Thefinancial directors of financial affairs are position.of of the the opinion Company that the and financialof its operating statements results. give The directors a true and further fair acceptview of responsibilitythe state of the for thefinancial maintenance affairs ofof accountingthe Company records and of which its operatingmay be reliedresults. The upon(m)directors in Provisions the further preparation accept of responsibility financial statements, for the maintenance as well as of adequate accounting systems records of internalwhich may financial be relied control. upon in the preparation of financial statements, as well as adequate systems of internal financial control. Provisions are recognised when the Company has a present legal or constructive obligation as a result Nothing has come to the attention of the directors to indicate that the Company will not remain a going of past events, it is probable that an outflow of resources will be required to settle the obligation, and a concernNothing for has at come least theto the next attention twelve monthsof the directors from the to date indicate of this that statement. the Company will not remain a going concernreliable for estimateat least theof the next amount twelve can months be made. from Where the datethe Company of this statement. expects a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only The financialwhen the statements reimbursement on ispages virtually 11 tocertain. 49, which have been prepared on the going concern basis, were approvedThe financial by the statements Board of onDirectors pages on11 to ______and 49, which have signed been on prepared its behalf on by: the going concern basis, were approved by the Board of Directors on ______and signed on its behalf by: (n) Presentation currency and foreign currency transactions

The financial statements are presented in Ugandan Shillings, which is also the Company’s functional currency. Transactions during the year are converted into Uganda Shillings at rates ruling at the transactions dates. Monetary assets and liabilities at the reporting date, which are expressed in foreign currencies, are translated into Uganda Shillings at rates ruling at that date. The resulting differences from conversion and translation are dealt with in profit or loss in the year in which they arise.

(o) Government grants

Government grants are recognised where there is reasonable assurance that the grant will be received, and all attaching conditions will be complied with. When the grant relates to an expense item, it is recognised as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate. Where the Company receives non-monetary grants, the asset and that grant are recognised at fair value and released to profit or loss over the expected useful life of the relevant asset by equal annual instalments.

______Director______Director______Director Director ______2020 ______2020 ______2020 ______2020 Place:______Place:______Place:______Place:______

Annual Report 2019/2020 6183 26 Annual Report 2019/2020 6183 E.CIPLA Directors’ QUALITY Interest CHEMICAL In Shares INDUSTRIES LIMITED E.ANNUAL Directors’ REPORT Interest ANDIn Shares FINANCIAL STATEMENTS FORAs THE at 31 YEAR March ENDED 2020, the 31 followingMARCH 2020directors held a direct interest in the Company’s share As at 31 March 2020, the following directors held a direct interest in the Company’s share capital as reflected in the table below: capital as reflected in the table below: NOTES TO THE FINANCIAL STATEMENTS Director Number of shares % 2. DirectorSIGNIFICANT ACCOUNTING POLICIESNumber (continued) of shares %

(p) Revenue from contracts with customers Mr. Emmanuel Katongole 101,933,042 2.7912 Mr. EmmanuelRevenue arises Katongole mainly from the sale of agricultural101,933,042 commodities. To determine whether to recognise2.7912 Mr. revenue,George Williamthe Company Baguma follows a 5-step process: 101,933,042 2.7912 Mr. George- Identifying William aBaguma contract with the customer; 101,933,042 2.7912 Mr. -Nevin Identifying J Bradford performance obligations; 157,000 0.0043 Mr. Nevin- Determining J Bradford the transaction price; 157,000 0.0043 Mr. -Stevens Allocating Mwanje the transaction price to the performance 19,400obligations; and 0.0005 Mr. Stevens- Recognising Mwanje revenue when/ as performance obligation(s)19,400 are satisfied. 0.0005 204,042,484 5.5872 The Company often enters into transactions involving204,042,484 a range of the Company’s products5.5872 and services. In all cases, total transaction price is allocated amongst the various performance obligations based on their relative stand-alone selling prices. The transaction price excludes any F. Auditorsamounts collected on behalf of third parties. F. Auditors TheThe auditors, Company Grant recognises Thornton contract Certified liabilities Public for Accountants, consideration have received expressed in respect their of willingnessunsatisfied to Thecontinue performanceauditors, in office Grant obligations Thorntonin accordance and Certified reports with these Publicsection amounts Accountants, 167 (2)as otherof the haveliabilities Companiesexpressed in the statement Act, their 2012. willingness of financial to continueposition. in officeSimilarly, in ifaccordance the Company with satisfiessection 167a performance(2) of the Companies obligation beforeAct, 2012. it receives the G. Subsequentconsideration, Events the Company recognises either a contract asset or a receivable in its statement of G. Subsequentfinancial position,Events depending on whether something other than the passage of time is required before the consideration is due. The directors are not aware of any matter or circumstance which is material to the financial

Theaffairs directors of theare company,not aware whichof any has matter occurred or circumstance between 31 whichMarch is2020 material and the to thedate financial of approval Sale of goods affairsof the financialof the company, statements, which that has hasoccurred not been between otherwise 31 March dealt 2020 with andin thethe financialdate of approvalstatements. of the financial statements, that has not been otherwise dealt with in the financial statements. Revenue from the sale of goods is recognised when or as the Company transfers control of the By Orderassets of to the the Board customer. Invoices for goods or services transferred are due upon receipt by the By Ordercustomer. of the Board

When such items are either customized or sold together with significant element of service, the goods and services represent a single combined performance obligation over which control is considered to transfer over time. This is because the combined product is unique to each customer (has no alternative use) and the Company has an enforceable right to payment for the work completed to ______date. Revenue for these performance obligations is recognised over time as the service is rendered ______based on estimation of work done. Revenue from the sale of goods is recognised upon passage of title to the customer, which generally coincides with their delivery and acceptance. Revenue is not COMPANY SECRETARY COMPANYrecognised SECRETARY to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

______(q) Dividend 2020 ______2020 The Company recognises a liability to make cash distributions to shareholders when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in Uganda, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity. The approved dividend is recognised as liability until paid. Interim dividend is charged to equity when paid.

6084 Annual Report 2019/2020 6084 Annual Report 2019/2020 27 StatementCIPLA QUALITY Of Directors’ CHEMICAL Responsibilities INDUSTRIES LIMITED ANNUALStatement REPORT Of Directors’ AND FINANCIAL Responsibilities STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020 The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which The Companiesgive a true Act,and 2012fair viewrequires of thethe statedirectors of the to financialprepare financialaffairs ofstatements the Company for each as financial at the year,end of the financialNOTwhichES give TOyear a THE true and FINANCIALand of its fair operatingview STATEMENTSof the results state forof the that financial year. It alsoaffairs requires of the the Company directors as toat ensurethe end that of the the Company financial keeps year properand of its accounting operating records, results forwhich that disclose year. It with also reasonable requires the accuracy directors at to any ensure time that the the financial2.Company SIGNIFICANT position keeps properof CiplaACCOUNTING accounting Quality Chemicalrecords, POLICIES whichIndustries (continued) disclose Limited with (“the reasonable Company”). accuracy They atare any also time responsible the for financial safeguarding position the ofassets Cipla ofQuality the Company. Chemical Industries Limited (“the Company”). They are also responsible (r)for safeguarding Fair value measurement the assets of the Company. The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibilityThe directorsThe Company for are internal ultimately measures control responsible financial to management. instruments for the internalStandards such ascontrol trade and ofsystemsreceivables, the Company. of internal and nonThe control- financialdirectors are assets delegatedesigned andresponsibility implementedsuch as forinvestment byinternal management properties,control to to atmanagement. provide fair value reasonable at eachStandards reporting assurance and date. systems as Fair to value theof internal integrity is the pricecontrol and that reliability are would designed of theand financial implementedbe received statements toby sell management an and asset to safeguard,or topaid provide to transferverify reasonable aand liability maintain assurance in an accountabilityorderly as totransaction the integrity of thebetween andCompany’s reliabilitymarket assets. of Thesethe financial systemsparticipants andstatements at controls the measurement and include to safeguard, the date. proper The verify fair delegation value and measurementmaintain of responsibilities accountability is based within on of the thea presumptionclearly Company’s defined that assets. framework,Thesethe systems transaction effective and controlstoaccounting sell the include asset procedures orthe transfer proper andthe delegation liabilityadequate takes of segregation responsibilitiesplace either: of withinduties. a clearly defined framework,• In theeffective principal accounting market for theprocedures asset or liabilityand adequate; or segregation of duties. • The directors In the accept absence responsibility of a principal for market, the financial in the moststatements advantageous for the marketyear ended for the 31 asset March or liability,2020, which haveThe beendirectorsthe prepared principal accept using orresponsibility the appropriate most advantageous for theaccounting financial market policies statements must supportedbe accessible for the by year byreasonable the ended Company 31and March. prudent 2020, which judgmentshave been and prepared estimates using in conformity appropriate with accounting International policies Financial supported Reporting by reasonable Standards and and prudentin the manner The fair value of an asset or a liability is measured using the assumptions that market participants requiredjudgments by theand Companies estimates in Act, conformity 2012. The with directors International are of theFinancial opinion Reporting that the Standardsfinancial statementsand in the mannergive would use when pricing the asset or liability, assuming that market participants act in their economic a requiredtrue and by fair the view Companies of the state Act, of 2012. the Thefinancial directors affairs are of of the the opinion Company that theand financialof its operating statements results. give The a truebest and interest. fair view A offair the value state measurement of the financial of a affairsnon-financial of the assetCompany takes and into of accountits operating a market results. The directorsparticipant's further accept ability responsibility to generate economic for the maintenance benefits by using of accounting the asset inrecords its highest which and may best be use relied or upondirectors in the further preparation accept of responsibility financial statements, for the maintenance as well as of adequate accounting systems records of internalwhich may financial be relied control. upon byin sellingthe preparation it to another of marketfinancial pa rticipantstatements, that wouldas well use as theadequate asset in systems its highest of internaland best financialuse. The control. Company uses valuation techniques that are appropriate in the circumstances and for which Nothingsufficient has come data to are the availableattention to of measure the directors fair value, to indicatemaximizing that the the use Company of relevant will observable not remain inputs a going concernNothing for has at comeleast theto the next attention twelve monthsof the directors from the todate indicate of this that statement. the Company will not remain a going concernand for minimizing at least thethe nextuse oftwelve unobservable months from inputs. the Alldate assets of this and statement. liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, The financialdescribed statements as follows, onbased pages on the11 lowestto 49, level which input have that been is significant prepared to theon thefair valuegoing measurement concern basis, were The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approvedas aby whole: the Board of Directors on ______and signed on its behalf by: approved by the Board of Directors on ______and signed on its behalf by: • Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities • Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable • Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.

Fair-value related disclosures for financial instruments and non-financial assets that are measured at fair value or where fair values are disclosed, are summarized in the following notes: - ______Director• Disclosures for valuation methods, significant estimatesDirector and assumptions Director• Quantitative disclosures of fair value measurementDirector hierarchy • Property, plant, equipment and right-of-use assets under Cost model ______2020 ______2020 ______• Financial 2020 instruments (including those carried at amo______rtized cost) 2020 • Contingent consideration Place: ______Place:______Place:______Place:______

Annual Report 2019/2020 6185 28 Annual Report 2019/2020 6185 E.CIPLA Directors’ QUALITY Interest CHEMICALIn Shares INDUSTRIES LIMITED E. Directors’ANNUAL Interest REPORT In SharesAND FINANCIAL STATEMENTS AsFOR at THE 31 March YEAR 2020, ENDED the following31 MARCH directors 2020 held a direct interest in the Company’s share As capital at 31 Marchas reflected 2020, the in thefollowing table directorsbelow: held a direct interest in the Company’s share capitalNOTES as TO reflected THE FINANCIAL in the table STATEMENTS below:

Director Number of shares % Director2. SIGNIFICANT ACCOUNTING POLICIESNumber (continued) of shares %

(s) Leases

Mr. Emmanuel Katongole 101,933,042 2.7912 Mr. EmmanuelThe Company Katongole has applied IFRS 16 using the101,933,042 modified retrospective approach and therefore2.7912 comparative information has not been restated. This means comparative information is still Mr. George William Baguma 101,933,042 2.7912 Mr. Georgereported William under Baguma IAS 17 and IFRIC 4. 101,933,042 2.7912

Mr. Nevin J Bradford 157,000 0.0043 Mr. NevinAccounting J Bradford policy applicable from 1 April 2019 157,000 0.0043

Mr. Stevens Mwanje 19,400 0.0005 Mr. StevensThe MwanjeCompany as a lessee 19,400 0.0005 For any new contracts entered into on or after 1 April 2019, the Company considers whether a 204,042,484 5.5872 contract is, or contains a lease. A lease is204,042,484 defined as ‘a contract, or part of a contract,5.5872 that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’. To apply this definition the Company assesses whether the contract meets three key evaluations which are whether: F. Auditors- the contract contains an identified asset, which is either explicitly identified in the contract or F. Auditors implicitly specified by being identified at the time the asset is made available to the Company The auditors,- the CompanyGrant Thornton has the Certified right to obtain Public substantially Accountants, all ofhave the economicexpressed benefits their fromwillingness use of to The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to continue inthe office identified in assetaccordance throughout with thesection period 167 of (2) use, of considering the Companies its rights Act, within 2012. the defined continue in scopeoffice of inthe accordancecontract with section 167 (2) of the Companies Act, 2012. G. Subsequent- the Events Company has the right to direct the use of the identified asset throughout the period of G. Subsequentuse. Events The Company assess whether it has the right to direct ‘how and for what purpose’ the The directorsasset are is usednot aware throughout of any the matter period of or use. circumstance which is material to the financial Theaffairs directors of theare company,not aware whichof any has matter occurred or circumstance between 31 whichMarch is2020 material and the to thedate financial of approval affairsof the Measurementfinancialof the company, statements, and whichrecognition that has hasoccurred of not leases been between as otherwisea lessee 31 March dealt 2020 with andin thethe financialdate of approvalstatements. of the financial statements, that has not been otherwise dealt with in the financial statements. At lease commencement date, the Company recognises a right-of-use asset and a lease liability By Order of the Board By Order ofon thethe balance Board sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Company, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received).

The Company depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the ______end of the lease term. The Company also assesses the right-of-use asset for impairment when ______such indicators exist. COMPANY SECRETARY COMPANYAt SECRETARYthe commencement date, the Company measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Company’s incremental borrowing rate. ______Lease2020 payments included in the measurement of the lease liability are made up of fixed ______payments2020 (including in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised.

Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of- use asset is already reduced to zero. The Company has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising a right-of- use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term. On the statement of financial position, right-of-use assets have been included in property, plant and equipment and lease liabilities have been disclosed separately.

6086 Annual Report 2019/2020 6086 Annual Report 2019/2020 29 CIPLA QUALITY CHEMICAL INDUSTRIES LIMITED Statement Of Directors’ Responsibilities ANNUALStatement REPORT Of Directors’ AND FINANCIAL Responsibilities STATEMENTS FOR THE YEAR ENDED 31 MARCH 2020 The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the which give a true and fair view of the state of the financial affairs of the Company as at the end of the financialNOTES year TO THE and FINANCIALof its operating STATEMENTS results for that year. It also requires the directors to ensure that the financial year and of its operating results for that year. It also requires the directors to ensure that the Company2. SIGNIFICANTkeeps proper accounting ACCOUNTING records, POLICIES which disclose (continued) with reasonable accuracy at any time the Company keeps proper accounting records, which disclose with reasonable accuracy at any time the financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible for(s) safeguarding Leases the(continued) assets of the Company. for safeguarding the assets of the Company. The directorsAccounting are ultimately policy applicable responsible before for the 1April internal 2019 control of the Company. The directors delegate The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibility for internal control to management. Standards and systems of internal control are designed responsibility for internal control to management. Standards and systems of internal control are designed and implementedThe Company by management as a lessee to provide reasonable assurance as to the integrity and reliability of and implemented by management to provide reasonable assurance as to the integrity and reliability of the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. the financialFinance statements leases and to safeguard, verify and maintain accountability of the Company’s assets. These systems and controls include the proper delegation of responsibilities within a clearly defined These systems and controls include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties. framework,Management effective applies accounting judgment procedures in considering and adequate the substance segregation of a lease of agreementduties. and whether it transfers substantially all the risks and rewards incidental to ownership of the leased asset. The directors accept responsibility for the financial statements for the year ended 31 March 2020, which The directorsKey factors accept considered responsibility include for the the length financial of the statements lease term for in therelation year to ended the economic 31 March life 2020, of the which have been prepared using appropriate accounting policies supported by reasonable and prudent have beenasset, prepared the present using value appropriate of the minimum accounting lease policiespayments supported in relation by to reasonablethe asset’s fairand value, prudent and judgments and estimates in conformity with International Financial Reporting Standards and in the manner judgmentswhether and theestimates Company in conformity obtains ownership with International of the asset Financial at the end Reporting of the lease Standards term. and in the manner required by the Companies Act, 2012. The directors are of the opinion that the financial statements give required by the Companies Act, 2012. The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Company and of its operating results. The a true Forand leasesfair view of ofland the and state buildings, of the financial the minimum affairs lease of the payments Company are and first of itsallocated operating to eachresults. The directorscomponent further accept based responsibility on the relative for thefair maintenancevalues of the ofrespective accounting lease records interests. which Each may component be relied directors further accept responsibility for the maintenance of accounting records which may be relied upon in theis then preparation evaluated of separately financial forstatements, possible treatmentas well as as adequatea finance lease,systems taking of internal into consideration financial control. upon in the preparation of financial statements, as well as adequate systems of internal financial control. the fact that land normally has an indefinite economic life. Nothing has come to the attention of the directors to indicate that the Company will not remain a going Nothing has come to the attention of the directors to indicate that the Company will not remain a going concern forOperating at least leases the next twelve months from the date of this statement. concern for at least the next twelve months from the date of this statement. The financialAll other statements leases are on treated pages as 11 operating to 49, which leases. have Where been the prepared Company on isthe a lessee, going paymentsconcern basis, on were The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approvedoperating by the Board lease agreof Directorsements are on recognised______and as an signed expense on onits abehalf straight by:-line basis over the lease approvedterm. by Associated the Board costs,of Directors such as on maintenance ______and and signedinsurance, on itsare behalf expensed by: as incurred.

______Director Director Director Director ______2020 ______2020 ______2020 ______2020 Place:______Place:______Place:______Place:______

Annual Report 2019/2020 6187 30 Annual Report 2019/2020 6187 CIPLA QUALITY CHEMICAL INDUSTRIES LIMITED E. Directors’ Interest In Shares ANNUALE. Directors’ REPORT Interest AND In SharesFINANCIAL STATEMENTS FORAs at THE 31 March YEAR 2020, ENDED the 31 following MARCH directors 2020 held a direct interest in the Company’s share As at 31 March 2020, the following directors held a direct interest in the Company’s share capital as reflected in the table below: NOTEScapital TO asTHE reflected FINANCIAL in the STATEMENTS table below:

Director Number of shares % 3. DirectorREVENUE Number of shares % 2020 2019 UShs’000 UShs’000 Mr. Emmanuel Katongole 101,933,042 2.7912 Mr. Emmanuel Katongole 101,933,042 2.7912 Local sales 167,553,898 141,847,186 Mr. George William Baguma 101,933,042 2.7912 ExportsMr. George William Baguma 101,933,04225,127,794 53,289,152 2.7912 192,681,692 195,136,338 Mr. Nevin J Bradford 157,000 0.0043 Mr. Nevin J Bradford 157,000 0.0043 Mr.Revenues Stevens Mwanje relate to sale of ARVs, ACTs and Hepatitis B19,400 therapies as shown in the table below: 0.0005 Mr. Stevens Mwanje 19,400 0.0005 ACTs ARVs 204,042,484Hepatitis B Credit notes Total5.5872 UShs’000 UShs’000 UShs’000204,042,484 UShs’000 UShs’000 5.5872 Local sales 57,188,083 110,936,489 899,202 (1,469,876) 167,553,898 Export sales 19,082,794 6,045,000 - - 25,127,794 F. Auditors 76,270,877 116,981,489 899,202 (1,469,876) 192,681,692 F. Auditors TheLocal auditors, sales are Grant mainly Thornton made to Certified Government Public of Uganda Accountants, (represented have by expressed the National their Medical willingness Stores) to The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to continueand other in privateoffice customers, in accordance while exports with section are mainly 167 (2)made of to the international Companies donor Act, agencies. 2012. continue in office in accordance with section 167 (2) of the Companies Act, 2012. G.4. SubsequentCOST OF EventsSALES G. Subsequent Events 2020 2019 The directors are not aware of any matter or circumstance which UShs’000 is material to the UShs’000 financial The directors are not aware of any matter or circumstance which is material to the financial affairs of the company, which has occurred between 31 March 2020 and the date of approval Materialaffairs costs of the company, which has occurred between 31 119,466,333March 2020 and the 103,629,349 date of approval of the financial statements, that has not been otherwise dealt with in the financial statements. Staffof coststhe financial (note 7) statements, that has not been otherwise 12,131,907dealt with in the financial 12,335,389 statements. Depreciation (note 8) 5,286,470 3,766,263 By Order of the Board ByRoyalties Order of the Board 4,506,790 8,402,113 Stock write-off 1,711,136 597,529 Other production overheads 12,633,867 12,915,808

155,736,503 141,646,451

5. OTHER INCOME ______Sale of scrap 35,777 58,770 COMPANY SECRETARY COMPANYGain on disposal SECRETARY of equipment 2,730 128,768 38,507 187,538

______2020 6. ______GENERAL AND2020 ADMINISTRATIVE EXPENSES

Advertising 5,148,639 5,242,636 Office expenses 2,103,731 1,779,749 Depreciation (note 8) 1,106,550 1,112,201 Amortisation (note 15) 429,368 231,612 Bank charges 356,332 543,527 Staff costs (note 7) 15,496,195 15,347,036 Share listing expenses 491,295 2,509,221 Other administration expenses 11,356,009 14,083,480 Audit fees 129,052 74,120 36,617,171 40,923,582

6088 Annual Report 2019/2020 6088 Annual Report 2019/2020 31 StatementCIPLA QUALITY Of Directors’ CHEMICAL Responsibilities INDUSTRIES LIMITED StatementANNUAL REPORT Of Directors’ AND FINANCIAL Responsibilities STATEMENTS TheFOR Companies THE YEAR Act, 2012ENDED requires 31 MARCH the directors 2020 to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, financialwhich giveyear a trueand ofand its fair operating view of theresults state for of thatthe financial year. It also affairs requires of the the Companydirectors as to at ensure the end that of the the NOTES TO THE FINANCIAL STATEMENTS Companyfinancial keeps year properand of accountingits operating records, results whichfor that disclose year. Itwith also reasonable requires the accuracy directors at to any ensure time thethat the financialCompany position keeps of proper Cipla accounting Quality Chemical records, Industrieswhich disclose Limited with (“the reasonable Company”). accuracy They areat anyalso time responsible the for financial7.safeguardingSTAFF position EXPENSES the assetsof Cipla of Quality the Company. Chemical Industries Limited (“the Company”). They are also responsible for safeguarding the assets of the Company. The directors are ultimately responsible for the internal control of the Company.2020 The directors delegate2019 responsibilityThe directors for areinternal ultimately control responsible to management. for the Standardsinternal control and systemsofUShs’000 the Company. of internal The control directorsUShs’000 are designeddelegate andresponsibility implemented for by internal management control to providemanagement. reasonable Standards assurance and systems as to the of integrityinternal control and reliability are designed of theand financial implementedCatering statements expenses by management and to safeguard, to provide verify reasonable and maintain assurance accountability2,021,73 as to1 the integrityof the 1,696,700Company’sand reliability assets. of Thesethe systemsfinancialMedical and statementsexpenses controls includeand to safeguard,the proper verify delegation and maintainof responsibilities accountability1,146,099 within of a the clearly Company’s1,126,80 defined2 assets. framework,These NSSFsystems effective contribution and accountingcontrols include procedures the proper and delegation adequate ofsegregation responsibilities2,072,70 of9 duties. within a clearly2,004,899 defined framework,Salaries effective and wages accounting procedures and adequate segregation21,135,071 of duties. 19,831,319 The directorsProvident accept fund responsibility for the financial statements for the127,110 year ended 31 March127,075 2020, which haveThe been directorsStaff prepared recruitment accept using responsibility c ostsappropriate for accounting the financial policies statements supported for 174,499the by yearreasonable ended and31 March prudent257,56 2020,1 which judgmentshave beenProvision and prepared estimates for bonuses using in conformity appropriate with accounting International policies Financial supported Reporting(957,446) by reasonableStandards andand1,344,67 inprudent the8 manner requiredjudgments Staffby the andw elfareCompanies estimates Act,in conformity 2012. The withdirectors International are of the Financial opinion1,907,449 Reporting that the financial Standards statements1,287,369 and in the givemanner a truerequired andTraining fairby the view c ostsCompanies of the state Act, of 2012. the financialThe directors affairs are of thethe opinion Company that880 andthe of financial its operating statements6,022 results. give The directorsa true furtherand fair accept view ofresponsibility the state of for the the financial maintenance affairs of of accounting the Company records and which of its mayoperating be relied results. The 27,628,102 27,682,425 upondirectors in the furtherpreparation accept of responsibility financial statements, for the maintenance as well as ofadequate accounting systems records of internal which mayfinancial be relied control. Staff costs are allocated as follows: upon in the preparation of financial statements, as well as adequate systems of internal financial control. Nothing hasCost come of sales to the(note attention 4) of the directors to indicate that 12,131,907 the Company will not12,335,389 remain a going concernNothing forGeneral has at leastcome and the administrativeto nextthe attention twelve expensesmonths of the fromdirectors (note the 6) dateto indicate of this that15,496,195statement. the Company will 15,347,036not remain a going concern for at least the next twelve months from the date of this27,628,102 statement. 27,682,425 The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approvedThe financial by the statementsBoard of Directors on pages on 11 ______andto 49, which have signed been on preparedits behalf onby: the going concern basis, were approved8. AMORTISATION by the Board ofAND Directors DEPRECIATION on ______and signed on its behalf by:

Depreciation* 6,393,020 4,878,464 Amortisation 429,368 231,612 6,822,388 5,110,076

* Depreciation allocated as follows: Cost of sales (note 4) 5,286,470 3,766,263 General and administrative expenses (note 6) 1,106,550 1,112,201 6,393,020 4,878,464

9. FINANCE COSTS AND FINANCE INCOME - NET

Interest income on bank deposits - 9,601 Interest expense on bank overdraft (3,898,391) (1,253,973) ______Interest on finance lease liabilities (note 21(c)) ______(62,116) - Realised foreign exchange gains 2,588,391 1,144,481 Director______Unrealised foreign exchange losses Director ______(2,555,981) (2,484,205) Director Director(3,928,097) (2,584,096) ______2020 ______2020 ______2020 ______2020 Place:______Place:______Place:______Place:______

Annual Report 2019/2020 6189 32 Annual Report 2019/2020 6189 E.CIPLA Directors’ QUALITY Interest CHEMICAL In Shares INDUSTRIES LIMITED E.ANNUAL Directors’ REPORT Interest InAND Shares FINANCIAL STATEMENTS FORAs THE at 31 YEAR March ENDED 2020, the 31 followingMARCH 2020directors held a direct interest in the Company’s share Ascapital at 31 Marchas reflected 2020, the in thefollowing table directorsbelow: held a direct interest in the Company’s share capital as reflected in the table below: NOTES TO THE FINANCIAL STATEMENTS Director Number of shares % Director Number of shares 2020 2019% UShs’000 UShs’000 10. (LOSS)/PROFIT BEFORE TAX Mr.(Loss)/profit Emmanuel beforeKatongole tax is after the following charges/(credits):101,933,042 2.7912 Mr. Emmanuel Katongole 101,933,042 2.7912 Depreciation 6,393,020 4,878,464 Mr. George William Baguma 101,933,042 2.7912 Mr. GeorgeAmortisation William Baguma 101,933,042 429,368 231,6122.7912 Mr. Auditor’sNevin J Bradford remuneration 157,000 129,052 74,1200.0043 Mr. NevinGain onJ Bradford disposal of property, plant and equipment 157,000 2,730 128,7670.0043 Mr. NetStevens foreign Mwanje exchange (gains)/losses 19,400 (32,410) 1,339,7240.0005 Mr. Stevens Mwanje 19,400 0.0005 11. TAX 204,042,484 5.5872 204,042,484 5.5872 a) Income tax (credit)/expense

F. AuditorsTax is provided for in the financial statements on the basis of the results included therein, adjusted in F. Auditorsaccordance with the provisions of the Income Tax Act, (Cap 340) less any tax credits and withholding Thetax auditors, recoverable. Grant Thornton Certified Public Accountants, have expressed their willingness to Thecontinue auditors, in officeGrant Thorntonin accordance Certified with Publicsection Accountants, 167 (2) of thehave Companiesexpressed2020 Act, their 2012. willingness2019 to continue in office in accordance with section 167 (2) of the CompaniesUShs’000 Act, 2012. UShs’000 G. Subsequent Events G. SubsequentCurrent incomeEvents tax charge - 1,889,724 TheDeferred directors income are not tax awarecredit (note of any 11 (b))matter or circumstance which(12,658,678 is material) to the financial(277,739) Theaffairs directors of theare company,not aware whichof any has matter occurred or circumstance between 31 whichMarch( 12,658,678is2020 material and )the to thedate financial 1,611,985of approval affairsof theIncome financialof the tax company,charge: statements, which that has hasoccurred not been between otherwise 31 March dealt 2020 with andin thethe financialdate of approvalstatements. of theLess: financial statements, that has not been otherwise dealt with in the financial statements. By OrderDay 1 of impact the Boardon adoption of IFRS 9 – charged to equity: - 620,025 By OrderCharge of the to profitBoard or loss: (12,658,678) 2,232,010 Grant received (note 11(c)) - (1,889,723)

Income tax (credit)/expense recognised (12,658,678) 342,287

Reconciliation of tax expense to tax as per accounting profit ______The tax on the Company ’s profit before income tax differs from the theoretical amount that would arise COMPANYusing the SECRETARY statutory income tax rate as follows: COMPANY SECRETARY 2020 2019 UShs’000 UShs’000 ______2020 ______2020 (Loss)/profit before income tax (35,731,541) 7,128,020

Tax calculated at the statutory income tax rate of 30% (10,719,462) 2,138,406 Tax effect of: Expenses not deductible for tax purposes 349,798 371,344 Deferred income tax (charge)/credit not recognised (2,289,014) (897,765) Income tax charge before grant received (12,658,678) 1,611,985

As at 31 March 2020, the Company had tax receivable amount of UShs 758,584 thousand resulting from provisional income tax payments made during the year. The amount will be offset against future income tax obligations of the Company.

6090 Annual Report 2019/2020 6090 Annual Report 2019/2020 33 Statement Of Directors’ Responsibilities CIPLA QUALITY CHEMICAL INDUSTRIES LIMITED ANNUALStatement REPORT Of Directors’ AND FINANCIAL Responsibilities STATEMENTS TheFOR Companies THE YEAR Act, ENDED 2012 requires 31 MARCH the directors 2020 to prepare financial statements for each financial year, whichThe Companiesgive a true Act,and 2012fair viewrequires of thethe state directors of the to financialprepare financialaffairs ofstatements the Company for each as financial at the year,end of the financialwhich give year a true and and of its fair operatingview of the results state forof thethat financial year. It alsoaffairs requires of the the Company directors as toat ensurethe end that of the the CompanyNOTESfinancial TOkeeps year THE properand FINANCIAL of its accounting operating STATEMENTS records, results forwhich that disclose year. It with also reasonable requires the accuracy directors at to any ensure time that the the financial Company position keeps properof Cipla accounting Quality Chemicalrecords, whichIndustries disclose Limited with (“the reasonable Company”). accuracy They atare any also time responsible the (continued) for11.financial safeguarding TAX position the ofassets Cipla ofQuality the Company. Chemical Industries Limited (“the Company”). They are also responsible for safeguarding the assets of the Company. Theb) directorsDeferred are tax ultimately (asset)/ liabilityresponsible for the internal control of the Company. The directors delegate responsibility for internal control to management. Standards and systems of internal control are designed The directorsDeferred areincome ultimately tax is calculatedresponsible on for all thetemporary internal differences control of usingthe Company. the liability The method directors at the delegate applicable and implemented by management to provide reasonable assurance as to the integrity and reliability of responsibilityrate of 30%. for internalThe movement control onto themanagement. deferred tax Standards account is andas follows: systems of internal control are designed theand financial implemented statements by management and to safeguard, to provide verify reasonable and maintain assurance accountability as to the integrity of the andCompany’s reliability assets. of Thesethe financial systems andstatements controls and include to safeguard, the proper verify delegation and maintain of responsibilities accountability within20 of20 thea clearly Company’s defined assets.201 9 framework,These systems effective and controlsaccounting include procedures the proper and delegation adequate of segregation responsibilities of withinduties. a clearly defined UShs’000 UShs’000 framework, effective accounting procedures and adequate segregation of duties. The directorsAt the start accept of the responsibility year for the financial statements for the year2,156,69 ended4 31 March (1,894,52020, which70 ) haveThe beenMovementdirectors prepared accept for the using responsibility year appropriate for theaccounting financial policies statements supported for the by (12,658,678year reasonable ended) 31and March prudent (2,848,252)2020, which judgments and estimates in conformity with International Financial Reporting Standards and in the manner have been prepared using appropriate accounting policies supported (by10,501,984 reasonable) and prudent(4,742,82 2) requiredjudgmentsAdjusted by theand Companiesfor: estimates in Act, conformity 2012. The with directors International are of theFinancial opinion Reporting that the Standardsfinancial statementsand in the mannergive a requiredtrue Deferredand by fair the tax view Companies credit/(charge) of the state Act, of that2012. the is The financialexpected directors toaffairs reverse are of of the the opinion Company that theand financialof- its operating statements6,899,51 results. give6 The directors further accept responsibility for the maintenance of accounting records which may be relied a trueDeferred and fair tax view (asset)/liability of the state of the financial affairs of the Company(10,501,984 and of its) operating2,156,694 results. The upondirectors in the further preparation accept of responsibility financial statements, for the maintenance as well as of adequate accounting systems records of internalwhich may financial be relied control. upon in the preparation of financial statements, as well as adequate systems of internal financial control. Nothing has come to the attention of the directors to indicate that the Company will not remain a going concernNothing for has at comeleast theto thenext attention twelve monthsof the directors from the todate indicate of this that statement. the Company will not remain a going concern for at least the next twelve months from the date of this statement. The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approvedThe financial by the statements Board of Directorson pages on11 to______and 49, which have signed been on prepared its behalf on by: the going concern basis, were approved by the Board of Directors on ______and signed on its behalf by:

______Director______Director______Director Director ______2020 ______2020 ______2020 ______2020 Place:______Place:______Place:______Place:______

Annual Report 2019/2020 6191 Annual Report 2019/2020 6191 34

) )

) tax 777 E. Directors’E. Directors’ Interest Interest In Shares In Shares , 2019 As at As at As at 222 ,

As at 31 March 2020, the following directors held4,720,793 a direct interest in the Company’s share UShs’000 UShs’000 3,748,154 2,156,694

As at 31 March 2020, the following directors held a direct interest in the Company’s shareUShs’000 2,156,694 UShs’000 15 10,501,984 (1,591,460) ( ( 10,501,984 expected toexpected

capital as reflected in the table( below: capital as reflected in the table below: March 2019 31 March 31 2020 March 31 2020 31 reverse by June Deferred income

DirectorDirector NumberNumber of shares of shares thatliability is not % %

) )

) ) 9 year SOCI) SOCI) 97,582 Mr. EmmanuelMr. Emmanuel Katongole Katongole the for 101,933,042101,933,042 2.79122.7912 631,317 972,639 277,73 ( (credit to June 2019 UShs’000 3, UShs’000 UShs’000 UShs’000

income tax (6,997,098) (6,899,516) Movement 1 12,658,678 12,658,678 ( (

Mr. George William Baguma ( 101,933,042 2.7912 Mr. George William Baguma 101,933,042 to reverse by 2.7912 Less: DeferredLess: Liability/(asset) that is expected Mr. NevinMr. Nevin J Bradford J Bradford 157,000157,000 0.00430.0043

for year the

Mr. StevensMr. Stevens Mwanje Mwanje 19,40019,400 0.00050.0005 As at As at 201 9 As at 204,042,484204,042,484 5.58725.5872 3,748,154 2,156,694 UShs’000 (1,591,460) 31 March 31 UShs’000 (8,588,558) (4,742,822) 1 April 1 April 2019 Movement for the year (credit to Movement

F. Auditors 8

F. Auditors As at As at As at The auditors,The auditors, Grant Grant Thornton Thornton Certified Certified Public Public Accountants, Accountants, have haveexpressed expressed theiryear theirwillingness willingness to to 6,882 3,845,736

continuecontinue in office in office in accordance in accordance with withsection section 167 (2)167 of (2) the of Companies the Companies Act, the for 2012. Act, 2012. 2,156,694 2,434,433 UShs’000 UShs’000 UShs’000 (2,855,134) (2,848,252) 1 April 1 April 2019 1 April 201 Movement G. SubsequentG. Subsequent Events Events

The directorsThe directors are not are awarenot aware of any of matter any matter or circumstance or circumstance which which is material is material to the to financial the financial affairs of the company, which has occurred between 31 March 2020 and the date of approval

affairs of the company, which has occurred between 31 March 2020 and the date of approval

of theof financial the financial statements, statements, that thathas nothas beennot beenotherwise otherwise dealt dealtwith in with the in financial the financial statements. statements. 35 By OrderBy Order of the of Board the Board As at 3,838,854 UShs’000 (5,733,424) (1,894,570)

1 April 1 April 2018

______

COMPANYCOMPANY SECRETARY SECRETARY

/(asset) ______20202020 expected to reverse by 2019

INDUSTRIES LIMITED LIMITED INDUSTRIES

(asset) FINANCIAL STATEMENTS /

YEAR ENDED 31 MARCH 2020 MARCH 31 ENDED YEAR deferred income tax liability Deferred incometax (continued) TAX (CONTINUED) At 31 March 2020 Deferred tax liability Accelerated tax depreciation Short term timing differences Net At 31 March 2019 Deferred tax liability that is not Accelerated tax depreciation Short term timing differences Net deferred income tax liability TES TO THE FINANCIAL STATEMENTS FINANCIAL THE TO TES CIPLA QUALITY CIPLA QUALITY CHEMICAL NO 11. b) ANNUAL AND REPORT FOR THE

6092 6092 AnnualAnnual Report Report 2019/2020 2019/2020 Statement Of Directors’ Responsibilities

TheStatement Companies Of Act, Directors’ 2012 requires Responsibilities the directors to prepare financial statements for each financial year, whichCIPLA give QUALITY a true and CHEMICAL fair view ofINDUSTRIES the state of theLIMITED financial affairs of the Company as at the end of the financialANNUALThe Companies year REPORT and Act, of AND 2012its requires FINANCIALoperating the results directors STATEMENTS for tothat prepare year. Itfinancial also requires statements the directors for each tofinancial ensure thatyear, the CompanyFORwhich THE give keeps YEAR a true proper ENDED and fair accounting 31view MARCH of records,the state2020 which of the disclose financial with affairs reasonable of the accuracy Company at as any at the time endthe of the financial financial positionyear and of of Cipla its operating Quality resultsChemical for Industriesthat year. Limited It also (“the requires Company”). the directors They to are ensure also thatresponsible the forNOTESCompany safeguarding TO keeps THE the properFINANCIAL assets accounting of the STATEMENTS Company. records, which disclose with reasonable accuracy at any time the financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible The11.for directorssafeguardingTAX (continued are ultimatelythe assets) responsible of the Company. for the internal control of the Company. The directors delegate responsibility for internal control to management. Standards and systems of internal control are designed andThe implemented directorsDeferred are income by ultimately management tax is responsiblerecognised to provide foronly the toreasonable internalthe extent control assurance that itof is the probableas Company. to the that integrity Thethe Companydirectors and reliability delegatewill pay of theresponsibility financialcurrent statementsincomefor internal tax when controland tothe tosafeguard, taxable management. temporary verify Standards anddifferences maintain and reverse systemsaccountability or ofwhen internal it ofis the probablecontrol Company’s are that designed there assets. Theseand implementedsystemswill be taxable and bycontrols profits management againstinclude which theto provideproper deductible delegationreasonable temporary ofassurance responsibilities differences as to can the within be integrity utilized. a clearly and defined reliability of framework,the financial effective statements accounting and to proceduressafeguard, verify and andadequate maintain segregation accountability of duties. of the Company’s assets. c)TheseGovernment systems and controlsgrant on include current the income proper delegationtax of responsibilities within a clearly defined Theframework, directors effective accept responsibility accounting forprocedures the financial and adequatestatements segregation for the year of endedduties. 31 March 2020, which have beenEffective prepared 1 July using 2009, appropriate Government accounting of Uganda policies agreed supported to pay the by Company reasonable’s current and prudent income tax judgmentsThe directorsobligations and acceptestimates on behalf responsibility in conformityof the Companyfor withthe financialInternational for a period statements Financial of 10 foryears. Reporting the yearGovernment Standardsended 31paid andMarch the in 2020,taxesthe manner aswhich requiredhave assessedbeen by theprepared Companiesby the usingCompany Act,appropriate 2012. in the The tax accountingdirectors returns filed are policies inof accordance the supported opinion with that by the thereasonable Income financial Tax and statements Act prudent (Cap 340) give a judgmentstrue butand was fairand not view estimates liable of theto inanystate conformity liabilities of the financialandwith penaltiesInternational affairs arising ofFinancial fromthe errorsCompany Reporting or omissions and Standards of its in operating theand tax in returns. theresults. manner The directorsrequiredThisfurther by gave the accepttheCompanies Company responsibility Act, the 2012.legal for Theright the directors tomaintenance offset areany oftax of the obligations accounting opinion fromthat records the grantfinancial which and may statementsthe be Company relied give upona true inha andthed the preparationfair intention view of to ofthe offset financial state the of two. thestatements, The financial tax holidayas affairs well incentiveas of adequatethe expired Company systems on 30and J of unof internalitse 2019 operating andfinancial for results. the control.3- The directorsmonths further period accept ended responsibility then, the Company for the maintenance had a tax loss of that accounting was carried records forward. which may be relied Nothingupon in has the comepreparation to the attentionof financial of thestatements, directors as to wellindicate as adequate that the Companysystems of willinternal not remain financial a going control. concern for at least the next twelve months from the date of this statement. Nothing has come to the attention of the directors to indicate that the Company will not remain a going Theconcern financial for atstatements least the nexton pagestwelve 11months to 49, from which the have date been of this prepared statement. on the going concern basis, were approved by the Board of Directors on ______and signed on its behalf by: The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approved by the Board of Directors on ______and signed on its behalf by:

______Director Director ______Director 2020 ______Director 2020

Place:______2020 Place:______2020

Place:______Place:______

Annual Report 2019/2020 6193

Annual Report 2019/2020 6193

36

)

E.E. Directors’ Directors’ Interest Interest In In Shares Shares 7 2 . 09 Total Total

AsAs at at 31 31 March March 2020, 2020, the the following following directors directors held held a adirect(16,093) direct interest interest in in the the Company’s Company’s(16, share share and 21 1,439,749 2,776,233 4,364,295 4,878,464 6,393,019 UShs’000

capital as reflected in the table (1,318,542) below: (1,318,542) capital as reflected in the table74,609,171 below:74,730,378 74,730,378 25,582,439 43,310,635 46,870,557 46,870,55 53,247,484 54,189,768 27,859,821 107,437,252 14 s),

2( DirectorDirector - NumberNumber- of of- shares shares - - %% 24,251 517,870 165,526 356,954 362,027 Tools & 1,754,483 1,778,734 1,778,734 1,597,068 3,893,672 1,251,181 1,416,707 1,416,707 1,773,661 2,120,011 UShs’000 Mr.Mr. Emmanuel Emmanuel Katongole Katongole equipment 101,933,042101,933,042 2.79122.7912

Mr. George William Baguma 101,933,042 2.7912 Mr. George William Baguma - - 101,933,042- - - 2.7912 . Refer to note to . 2(d),Refer Mr.Mr. Nevin Nevin J JBradford Bradford 157,000157,000 0.00430.0043 112,989 193,440 328,438 505,519 358,323 612,803 449,248 2,010,863 2,123,852 2,123,852 2,645,730 1,169,085 1,674,604 1,674,604 2,032,927 UShs’000

Mr.Mr. Stevens Stevens Mwanje Mwanje Computers 19,40019,400 0.00050.0005 1 April 2019

204,042,484 5.5872 - - - 204,042,484- - 5.5872 Motor (6,181) (6,181) 12,096 ehicles 455,984 342,708 534,033 876,741 v 2,470,217 2,482,313 2,482,313 2,476,132 1,149,588 1,605,572 1,605,572 1,942,099 UShs’000 F.F. AuditorsAuditors

) The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to - - - 1

The auditors, Grant Thornton Certified Public Accountants, have expressed their4 willingness2 to continuecontinue in in office office in in accordance accordance with with section section 167 167 (2) (2) of ofthe the Companies Companies Act, Act, 2012. 2012. 9,433 (9,912) (9,91 85,408 fittings G. Subsequent Events 183,812 776,486 150,698 927,184 927,184 113,551 334,83 179,164 1,096,915 1,106,348 1,106,348 1,365,656 1,030,82 G. Subsequent Events UShs’000 Furniture &

TheThe directors directors are are not not aware aware of of any any matter matter or or circumstance circumstance which which is is material material to to the the financial financial

affairsaffairs of of the the company, company, which which has has occurred occurred- between between- 31 31March March 2020 2020 and and the the - date date of approvalof approval ofof the the financial financial statements, statements, that that has has not not been been otherwise otherwise dealt dealt with with in inthe the financial financial statements. statements. 37 53,618 Plant & achinery 1,280,980 2,904,062 4,126,994 UShs’000 (1,318,542) (1,318,542) ByBy Order Order of of the the Board Boardm 49,829,824 49,792,262 49,792,262 14,659,140 64,505,020 32,360,743 33,946,263 33,946,263 38,073,257 26,431,763 15,845,999 USE ASSETS USE

------7 6 1 OF -

696,675 910,219 2,586,353 8,912,385 6,603,552 7,300,227 7,300,22 8,210,44 UShs’000 17,446,869 17,446,869 17,446,869 28,945,607 20,735,16 10,146,642

______

______

t Buildings t ------COMPANY SECRETARY COMPANY SECRETARY-use asse of 829,202 184,270 184,270 t- 2,776,233 3,605,435 3,421,165 UShs’000 use assets relate to property leases under IFRS 16, which the Company adopted on adopted Company the which 16, IFRS under leases property to relate assets use - ______20202020Righ INDUSTRIES LIMITED LIMITED INDUSTRIES

FINANCIAL STATEMENTS to right- of

YEAR ENDED 31 MARCH 2020 MARCH 31 ENDED YEAR

nd reclassifications

ROPERTY, PLANT, EQUIPMENTAND RIGHT

TES TO THE FINANCIAL STATEMENTS FINANCIAL THE TO TES COST At 1 April 2018 Transfer from CWIP Disposals 2019 31 March At At 1 April 2019 reclassification On Additions Transfer from CWIP Disposals 2020 31 March At DEPRECIATION At 1 April 2018 year the for Charge Disposals 2019 31 March At At 1 April 2019 year the for Charge Disposals 2020 31 March At NBV 2020 31 March At 2019 31 March At FOR THE CIPLA QUALITY CIPLA QUALITY CHEMICAL ANNUAL AND REPORT NO 12 .P * Addition a

60 Annual Report 2019/2020 609494 Annual Report 2019/2020 Statement Of Directors’ Responsibilities Statement Of Directors’ Responsibilities The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the The Companies Act, 2012 requires the directors to prepare financial statements for each financial year,

financial year and of its operating results for that year. It also requires the directors to ensure that the which give a true and fair view of the state of the financial affairs of the Company as at the end of the Company keeps proper accounting records, which disclose with reasonable accuracy at any time the financial year and of its operating results for that year. It also requires the directors to ensure that the ients ients financial position of Cipla QualityTotal Chemical Industries Limited (“the Company”). They are also responsible Company keeps proper accounting records, which disclose with reasonable accuracy at any time the for safeguarding the assets of the Company. financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible UShs’000 (1,439,749) (1,412,835) 24,153,027 12,250,490 33,550,933 33,550,933 11,311,254 19,279,748

for safeguarding the assets of the Company. (25,582,439) The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibility for internal control to management. Standards and systems of internal control are designed The directors are ultimately responsible for the internal control of the Company. The directors delegate

and implemented by management to provide reasonable assurance as to the integrity and reliability of responsibility for internal control to management.- Standards and systems- of internal control are designed the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. and implemented by management to provide reasonable assurance as to the integrity and reliability of These systems and controls include the proper delegation of responsibilities within a clearly defined

the financial statements and to safeguard, verify and maintain accountability31,249 of the Company’s assets.

framework, effective accounting oftware procedures and adequate segregation of duties.

These systems and controls s include the proper delegation of responsibilities within a clearly defined 1,250,664 1,721,183 1,559,012 1,559,012 1,590,261 UShs’000 Computer framework, effective accounting procedures and (1,412,835) adequate segregation of duties. The directors accept responsibility for the financial statements for the year ended 31 March 2020, which have been prepared using appropriate accounting policies supported by reasonable and prudent The directors accept responsibility for the financial statements for the year ended 31 March 2020, which judgments and estimates in conformity with International Financial Reporting Standards and in the manner

have been prepared using appropriate accounting policies supported by reasonable and prudent required by the Companies Act, 2012. The directors- are- - of the opinion that- - the financial statements give judgments and estimates in conformity with International Financial Reporting Standards and in the manner a true and fair view of the state of the financial affairs of the Company and of its operating results. The required by the Companies Act, 2012. The directors are of the opinion that the financial statements give directors further accept responsibility for the maintenance of accounting records which may be relied

a true and fair view of the state of the financial affairs of the Company and of its operating results. The upon in the preparation of financial statements, as well as adequate systems of internal financial control. 1,644,274 1,644,274 1,644,274 1,644,274 directors further accept responsibilityUShs’000 for the maintenance of accounting records which may be relied

upon in the preparation of financialConsultancy statements, as well as adequate systems of internal financial control. Nothing has come to the attention of the directors to indicate that the Company will not remain a going

concern for at least the next twelve months from the date of this statement.

Nothing has come to the attention of the directors- to indicate that the Company will not remain a going

concern for at least the next twelve months from the date of this statement. premisesadditional ’s for the Active Pharmaceutical Ingred The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were Plant & approved by the Board of Directors on ______and signed on its behalf by: The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were achinery 5,749,216 9,344,540 UShs’000 (1,439,749) m 14,774,078 19,083,545 19,083,545 11,758,031 approved by the Board of Directors on ______and signed on its behalf by: 38 (16,670,054)

- - 6,484,011 4,780,091 1,935,465 4,287,182 UShs’000 Buildings (8,912,385) 11,264,102 11,264,102

date of the boundary for wall the Company - to - represents the costof the machinery under consultancy installation, services relating to design fees for phase

______INDUSTRIES LIMITED LIMITED INDUSTRIES Director Director

______PROGRESS ______-

FINANCIAL STATEMENTS rogress (CWIP)

Director IN Director - -p

______2020 ______2020 in - ______2020 ______2020 ork ntangibles w i property,plant and equipment property,plant and equipment

Place:______Place:______Place:______Place:______apital apital YEAR ENDED 31 MARCH 2020 MARCH 31 ENDED YEAR c The 2 of the factoryconstruction costs and CAPITAL WORK (API) plant. At 31At March 2018 Additions Transfer to Transfer to At March 31 2019 1 AprilAt 2019 Additions Transfer to At March 31 2020 TES TO THE FINANCIAL STATEMENTS FINANCIAL THE TO TES CIPLA QUALITY CIPLA QUALITY CHEMICAL NO 13. ANNUAL AND REPORT FOR THE

Annual Report 2019/2020 6195

Annual Report 2019/2020 6195 E. Directors’ Interest In Shares E. Directors’ Interest In Shares CIPLAAs at 31 QUALITY March 2020, CHEMICAL the following INDUSTRIES directors LIMITED held a direct interest in the Company’s share ANNUALcapital as REPORT reflected AND in the FINANCIAL table below: STATEMENTS FORAs at THE 31 March YEAR 2020, ENDED the 31following MARCH directors 2020 held a direct interest in the Company’s share capital as reflected in the table below: NODirectorTES TO THE FINANCIAL STATEMENTSNumber of shares % Director Number of shares % 14. LEASEHOLD PROPERTY Mr. Emmanuel Katongole 101,933,042 2.7912 On 21 December 2005, the company leased land at Luzira Industrial Park from Uganda Investment Authority for an initial period of five years. The lease was subsequently extended to 99 years after Mr. GeorgeEmmanuel William Katongole Baguma 101,933,042 2.7912 notification by the company to the lessor of its intention to renew the lease. The leasehold land was obtained at an initial sum of UShs 2.275 billion (as determined by the valuation done by the Company) Mr. NevinGeorge J BradfordWilliam Baguma 101,933,042157,000 0.00432.7912 including premium and ground rent but excluding additional costs of survey and landscaping of UShs 0.501 billion. Mr. StevensNevin J BradfordMwanje 157,00019,400 0.00050.0043

The cost of the lease was waived by Government of Uganda and the valuation of the land was Mr. Stevens Mwanje 204,042,48419,400 5.58720.0005 therefore recognised as a capital grant in line with the company’s accounting policy disclosed in note 2(s) above. The directors re-assessed the classification204,042,484 of the lease and classified it as a finance5.5872 lease. The land has not been amortised because the underlying value of the asset appreciates over time rather than depreciates. F. Auditors F. AuditorsFollowing the adoption of IFRS 16 Leases on 1 April 2019, the leasehold property has been The auditors,reclassified Grant to property, Thornton plant, Certified equipment Public and right-Accountants,of-use assets. have expressed their willingness to continue in office in accordance with section 167 (2) of the Companies Act, 2012. The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to 15.continueINTANGIBLE in office ASSETSin accordance with section 167 (2) of the Companies Act, 2012. G. Subsequent Events 2020 2019 G. Subsequent Events UShs’000 UShs’000 The directors are not aware of any matter or circumstance which is material to the financial COST affairs of the company, which has occurred between 31 March 2020 and the date of approval The directorsAt start of are year not aware of any matter or circumstance which is material3,024,17 5to the financial1,423,646 of the financial statements, that has not been otherwise dealt with in the financial statements. affairsAdditions of the company, which has occurred between 31 March 2020 and49,311 the date of approval187,694 of theTransfer financial from statements, CWIP that has not been otherwise dealt with in the financial- statements.1,412,835 By Order of the Board At end of year 3,073,486 3,024,175 By Order of the Board AMORTISATION At start of year 1,286,043 1,054,431 Charge for the year 429,368 231,612 At end of year 1,715,411 1,286,043 ______NET CARRYING AMOUNT 1,358,075 1,738,132 COMPANY SECRETARY COMPANYIntangible SECRETARY asset relates to SAP software currently used by the Company for its financial accounting. ______16. INVENTORIES2020 2020 2019 ______2020 UShs’000 UShs’000

Raw materials 47,111,830 40,721,392 Finished goods 4,354,828 14,563,742 Work-in-progress 7,798,793 10,231,971 Packing materials 9,333,785 6,744,773 Stocks in transit 2,183,495 8,031,244 Other stocks 1,847,117 1,525,569 72,629,848 81,818,691 Less: provision for obsolete inventories (1,904,565) (597,529) 70,725,283 81,221,162

6096 Annual Report 2019/2020 39 6096 Annual Report 2019/2020 Statement Of Directors’ Responsibilities CIPLAStatement QUALITY Of Directors’CHEMICAL ResponsibilitiesINDUSTRIES LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, FORThe CompaniesTHE YEAR Act, ENDED 2012 requires 31 MARC theH directors 2020 to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the NOTESwhich give TO a THE true FINANCand fair viewIAL STATEMENTS of the state of the financial affairs of the Company as at the end of the financial year and of its operating results for that year. It also requires the directors to ensure that the financial year and of its operating results for that year. It also requires the directors to ensure that the Company keeps proper accounting records, which disclose with reasonable202 accuracy0 at any time 201the 9 Company keeps proper accounting records, which disclose with reasonable accuracy at any time the financial position of Cipla Quality Chemical Industries Limited (“the Company”).UShs’000 They are also UShs’000responsible financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible for17 .safeguarding TRADE AND the assetsOTHER of RECEIVABLES the Company. for safeguarding the assets of the Company. The directorsTrade arereceivables ultimately responsible for the internal control of the 97,820,117Company. The directors113,391,254 delegate The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibilityLess: forimpairment internal controlallowance to management.on trade receivables Standards and systems(37,482,709)of internal control are(5,312,740) designed responsibility for internal control to management. Standards and systems of internal control are designed and implemented by management to provide reasonable assurance as60,337,408 to the integrity and108,078,514 reliability of and implemented by management to provide reasonable assurance as to the integrity and reliability of the financial statements and to safeguard, verify and maintain accountability17,720,544 of the Company’s24,939,780 assets. the financialAdvances statements to suppliers and to safeguard, verify and maintain accountability of the Company’s assets. These systems and controls include the proper delegation of responsibilities within a clearly defined These Withholdingsystems and tax controls recoverable include the proper delegation of responsibilities355,821 within a clearly defined355,822 framework, effective accounting procedures and adequate segregation of duties. framework,VAT recoverableeffective accounting procedures and adequate segregation 8,591,420 of duties. 6,245,374 Staff advances 121,511 166,164 The directors accept responsibility for the financial statements for the year ended 31 March 2020, which The directorsOther receivables accept responsibility for the financial statements for the year 172,982 ended 31 March 2020, 153,650 which have been prepared using appropriate accounting policies supported by reasonable and prudent have beenPrepayments prepared using appropriate accounting policies supported by277,914 reasonable and prudent98,672 judgments and estimates in conformity with International Financial Reporting Standards and in the manner judgments and estimates in conformity with International Financial Reporting87,577,600 Standards and in the manner required by the Companies Act, 2012. The directors are of the opinion that the financial statements140,037,976 give required by the Companies Act, 2012. The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Company and of its operating results. The a true and fair view of the state of the financial affairs of the Company and of its operating results. The directorsImpairment further accept allowance: responsibility for the maintenance of accounting records which may be relied directors further accept responsibility for the maintenance of accounting records which may be relied upon in Openingthe preparation balance of financial statements, as well as adequate systems of internal financial control. upon in the preparation of financial statements, as well as adequate5,312,7 systems40 of internal financial204,2 control.60 Adoption of IFRS 9 adjustment - 2,066,753 Nothing has come to the attention of the directo rs to indicate that the Company will not remain a going NothingImpairment has come charge to the to attention profit or ofloss the directo rs to indicate that the Company will not remain a going concern for at least the next twelve months from the date of this statement.32,169,969 3,041,727 concernClosing for at balance least the next twelve months from the date of this statement.37,482,709 5,312,740 The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approvedThe by anal theys Boardis below of Directorsshows the on credit ______and quality and signedthe maximum on its behalf exposure by: to credit risk based on approvedthe Company’sby the Board credit of Directorsrating sys ontem. ______and The amounts signedhave not on been its behalf included by: into stages, since the Company has used the simplified approach to assess impairment. The gross trade receivables are graded as follows: 2020 2019 UShs’000 UShs’000 Grading of receivables High grade (0–90 days) 41,262,968 78,278,042 Standard grade (91–365 days) 26,609,638 29,977,768 Individually impaired (Over 365 days) 29,947,511 5,135,444 Grand Total 97,820,117 113,391,254

The movement in gross trade receivables (including amounts due from related parties) is showed as follows:

2020 2019 UShs’000 UShs’000 Movement in gross trade receivables ______DirectorOpening Balance Director 113,391,254 68,728,451 DirectorSales during the year: Director 192,681,692 195,136,338 Repayments (208,252,829) (150,473,535) ______2020 ______2020 ______Closing Balance 2020 ______97,820,117 2020 113,391,254 Place: ______Place:______Place:______Place:______

Annual Report 2019/2020 6197 40 Annual Report 2019/2020 6197 E.CIPLA Directors’ QUALITY Interest CHEMICAL In Shares INDUSTRIES LIMITED E. Directors’ Interest In Shares ANNUAL REPORT AND FINANCIAL STATEMENTS As at 31 March 2020, the following directors held a direct interest in the Company’s share FOR THE YEAR ENDED 31 MARCH 2020 Ascapital at 31 Marchas reflected 2020, the in thefollowing table directorsbelow: held a direct interest in the Company’s share NOTEScapital asTO reflected THE FINANCIAL in the table STATEMENTS below: 17.Director TRADE AND OTHER RECEIVABLESNumber (continued) of shares % Director Number of shares % As at 31 March 2020, the aging analysis of trade receivables that are past due was as follows:

Mr. Emmanuel Katongole 101,933,042 2.7912 Mr. Emmanuel KatongoleFrom 61 To From 91 To 101,933,042From 181 To Over 365 Total2.7912 Mr. George William Baguma90 days 180 days 101,933,042365 days days 2.7912 Mr. George William Baguma UShs’000 UShs’000 101,933,042UShs’000 UShs’000 UShs’0002.7912 Mr. PastNevin due J Bradford 157,000 0.0043 Mr. Nevinbut not J Bradford 157,000 0.0043 Mr. impairedStevens Mwanje 111,737 3,477,227 23,132,41019,400 27,153,857 53,875,2310.0005 Mr. StevensPast due Mwanje and 19,400 0.0005 impaired - -204,042,484 (10,328,852) (27,153,857) (37,482,7095.5872) 111,737 3,477,227204,042,484 12,803,558 - 16,392,5225.5872

F. Auditors 2020 2019 F. Auditors UShs’000 UShs’000 18.The CASH auditors, AND Grant CASH Thornton EQUIVALENTS Certified Public Accountants, have expressed their willingness to Thecontinue auditors, in officeGrant Thorntonin accordance Certified with Publicsection Accountants, 167 (2) of thehave Companiesexpressed Act,their 2012. willingness to

continue in office in accordance with section 167 (2) of the Companies Act, 2012. Cash on hand 80,287 24,313 G. SubsequentCash at bank Events 3,995,313 690,016 G. Subsequent Events Cash on hand and at bank 4,075,600 714,329 The directors are not aware of any matter or circumstance which is material to the financial

Theaffairs directors of theare company,not aware whichof any has matter occurred or circumstance between 31 whichMarch is2020 material and theto thedate financial of approval Bank overdraft (47,074,947) (51,918,878) affairsof the financialof the company, statements, which that has hasoccurred not been between otherwise 31 March dealt 2020 with andin thethe financialdate of approval statements. of the financial statements, that has not been otherwise dealt(42, 999with,347 in )the financial(51,204,549) statements. By Order of the Board By OrderFor of the the purpose Board of the statement of cash flows, cash and cash equivalents comprise the above balances. The Company has not recognised an impairment allowance on bank balances as at 31 March 2020 (2019: Nil).

The overdraft facility was obtained from Absa Bank Uganda Limited for bridging working capital. The facility has a limit of USD 19.65 million, at an interest rate of 4 per cent above 3 months LIBOR. ______2020 2019 19. SHARE CAPITAL COMPANY SECRETARY COMPANYa) Ordinary SECRETARY shares - authorised, issued and fully paid

______Number of2020 shares 3,651,909,200 3,651,909,200 ______Nominal2020 value per share (UShs) 12.50 12.50

Authorised and issued capital (UShs’000) 45,648,865 45,648,865

On 5 October 2016, the shareholders pursuant to Section 71 of the Companies Act, 2012, Article 45(b) of Table A of the Companies Act, 2012 and Article 20(b) of the Company's Articles of Association, resolved that the par value of each share in the Company be adjusted by way of a share split from the current par value of UShs 5,000 to UShs 12.5 per share and the number of shares be increased accordingly from 9,129,773 to 3,651,909,200 ordinary shares.

60 Annual Report 2019/2020 98 41 6098 Annual Report 2019/2020 StatementCIPLA QUALITY Of Directors’ CHEMICAL Responsibilities INDUSTRIES LIMITED ANNUALStatement REPORT Of Directors’ AND FINANCIAL Responsibilities STATEMENTS TheFOR Companies THE YEAR Act, ENDED2012 requires 31 MARCH the directors 2020 to prepare financial statements for each financial year, whichNOTESThe giveCompanies TOa true THE Act,and FINANCIAL 2012fair viewrequires of STATEMENTS the the state directors of the to financial prepare financialaffairs ofstatements the Company for each as financial at the endyear, of the financialwhich give year a trueand andof its fair operatingview of theresults state for of thethat financial year. It alsoaffairs requires of the the Companydirectors as to at ensurethe end that of the the

Companyfinancial keeps year properand of its accounting operating records, results forwhich that disclose year. Itwith also reasonable requires the accuracy directors at to any ensure time thatthe the 19. SHARE CAPITAL (continued) financialCompany position keeps ofproper Cipla accounting Quality Chemicalrecords, Industrieswhich disclose Limited with (“the reasonable Company”). accuracy They atare any also time responsible the forfinancial safeguarding position the ofassets Cipla ofQuality the Company. Chemical Industries Limited (“the Company”). They are also responsible b) Shareholding for safeguarding the assets of the Company.

The directorsThe top are ten ultimately shareholders responsible in the Company for the internalare shown control in the of table the belowCompany.. The directors delegate responsibility The directors for are internal ultimately control responsible to management. for the internalStandards control and systemsof the Company. of internal The control directors are delegatedesigned andresponsibility implemented for byinternal management control to to management.provide reasonable20 Standards20 Percentageassurance and systems as to theof internalintegrity201 control9 and Percentage reliability are designed of theand financial implementedMeditab statements Holdings by management Limitedand to safeguard, to provide1,864,299,646 verify reasonable and maintain assurance51.05% accountability as 1,864,299,646to the integrity of the andCompany’s reliability51.05% assets. of Thesethe financialsystemsAMISTAD andstatements controls andinclude to safeguard, the proper420,402,713 verify delegation and maintain of responsibilities11.51% accountability 420,402,713 within of athe clearly Company’s defined11.51% assets. framework,These Capitalsystems effective Works and controls accountingSSA1 include procedures the proper407,152,191 and delegation adequate ofsegregation11.15% responsibilities of407,152,191 duties.within a clearly defined11.15% framework,Government effective Employees accounting procedures and adequate segregation of duties. The directorsPension accept Fund responsibility for the 312,000,000financial statements for8.54% the year312,000,000 ended 31 March 2020,8.54% which haveThe beendirectorsNSSF prepared accept using responsibility appropriate for accountingthe269,361,386 financial policies statements supported7.38% for the by year reasonable269,361,386 ended 31and March prudent 2020,7.38% which judgmentshave beenEmmanuel and prepared estimates Katongole using in conformity appropriate with 101,933,042accounting International policies Financial supported2.79% Reporting by 101,933,042reasonable Standards and inprudent the2.79% manner requiredjudgments Frederickby theand Companies estimatesMutebi Kitaka in Act, conformity 2012. The with101,933,042directors International are of theFinancial opinion2.79% Reporting that the101,933,042 financialStandards statements and in 2.79%the givemanner a requiredtrue andBaguma byfair the view George Companies of the William state Act, of 2012. the Thefinancial101,933,042 directors affairs are of of thethe 2.79%opinion Company that101,933,042 theand offinancial its operating statements 2.79%results. give The directorsa true Ciplaand further fairEU accept Limitedview of responsibility the state of forthe thefinancial 4,871,038maintenance affairs of of accountingthe0.13% Company records and4,871,038 whichof its may operating be relied 0.13%results. The upondirectors in Yigathe further preparation Joseph accept of responsibility financial statements, for the4,000,000 maintenance as well as ofadequate accounting0.11% systems records4,000,000 of internal which mayfinancial be0.11% relied control. upon inOthers the preparation of financial statements,64,023,100 as well as adequate1.75% systems64,023,100 of internal financial1.75% control. Nothing has come to the attention of the3,651,909,200 directors to indicate that100% the Company3,651,909,200 will not remain 100a going% concernNothing for has at comeleast theto thenext attention twelve monthsof the directors from the todate indicate of this that statement. the Company will not remain a going concernOn for13 atFebruary least the 2017, next thetwelve shareholders months from of Qualitythe date Chemicals of this statement. Limited resolved to transfer the The financialshareholding statements of 22.05% on pagesin the Company11 to 49, to which individual have shareholders been prepared of the on company.the going concern basis, were approvedThe financial by the statements Board of Directorson pages on11 to______and 49, which have signed been on prepared its behalf on by: the going concern basis, were approvedOn 19 by March the Board 2018, ofPathfinder Directors Private on ______and Pension transferred signed its on 73,038,184 its behalf sharesby: in the Company to AMISTAD. On 17 September 2018, the Company listed 18% of its shares on the Uganda Securities Exchange attracting both institutional and individual shareholders. The top ten shareholders in the Company are shown in the table above.

c) Earnings per share 2020 2019 (Loss)/profit attributable to ordinary equity holders of the Company (UShs’000) (23,072,863) 6,785,733

Weighted average number of ordinary shares in issue during the year 3,651,909,200 3,651,909,200 Basic/diluted (loss)/earnings per share (6.32) 1.86

Diluted earnings per share amounts are calculated by dividing the (loss)/profit attributable to shareholders of the Company by the weighted average number of shares outstanding during the year plus the weighted average number of shares that would be issued on the conversion of all the dilutive ______potential shares into ordinary shares. ______Director______Director______DirectorThere have been no other transactions involving ordinaryDirector shares or potential ordinary shares between ______the reporting 2020 date and the date of completion of these______financial statements 2020. ______2020 ______2020

Place:______Place:______Place:______Place:______

42 Annual Report 2019/2020 6199 Annual Report 2019/2020 6199 CIPLAE. Directors’ QUALITY Interest CHEMICAL In Shares INDUSTRIES LIMITED E. Directors’ Interest In Shares ANNUAL REPORT AND FINANCIAL STATEMENTS As at 31 March 2020, the following directors held a direct interest in the Company’s share FOR THE YEAR ENDED 31 MARCH 2020 Ascapital at 31 asMarch reflected 2020, inthe the following table below: directors held a direct interest in the Company’s share NOTEScapital TO THEas reflected FINANCIAL in the STATEMENTS table below:

20. DirectorCAPITAL GRANT Number of shares % Director Number of shares 2020 2019% UShs’000 UShs’000

Mr.At 31Emmanuel March Katongole 101,933,042 2,275,000 2,275,0002.7912 Mr. Emmanuel Katongole 101,933,042 2.7912

Mr. George William Baguma 101,933,042 2.7912 As stated in note 12 and 14, the capital grant relates to the value of the land that was granted to the Mr. George William Baguma 101,933,042 2.7912 Company by Uganda Investment Authority. The directors elected to have it appropriated into a separate Mr. Nevin J Bradford 157,000 0.0043 reserve under equity. Mr. Nevin J Bradford 157,000 0.0043 Mr. Stevens Mwanje 19,400 0.0005 21. Mr. RIGHT Stevens-OF Mwanje-USE ASSETS AND LEASE LIABILITIES19,400 0.0005 204,042,484Leased 5.5872 Leasehold 204,042,484motor Leased 5.5872 land vehicles warehouse Total UShs’000 UShs’000 UShs’000 UShs’000 F. Auditorsa) Right-of-use assets F. Auditors On reclassification 2,776,233 - - 2,776,233 The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to ThecontinueAdditions auditors, in office Grant inThornton accordance Certified with -sectionPublic Accountants,167 (2)500,731 of the have Companies expressed328,471 Act, their 2012. willingness829,202 to continue in office in accordance with section 167 (2) of the Companies Act, 2012. Depreciation - (74,780) (109,490) (184,270) G. Subsequent Events G. SubsequentAt 31 March Events 2020 2,776,233 425,951 218,981 3,421,165 The directors are not aware of any matteror circumstance which is material to the financial Theaffairsb) Leasedirectors of liabilities the are company, not aware which of any has matter occurred or circumstancebetween 31 Marchwhich 2020is material and the to datethe financialof approval affairsof the financial of the company, statements, which that has has occurred not been between otherwise 31 Marchdealt 2020 with inand the the financial date of approvalstatements. Current - 177,216 112,509 289,725 of the financial statements, that has not been otherwise dealt with in the financial statements. Non-current - 279,161 127,534 406,695 By OrderAt 31 March of the 2020 Board - 456,377 240,043 696,420 By Order of the Board

c) Contractual undiscounted cash flows

Current - 188,674 114,060 302,734 Non-current - 516,158 142,575 658,733 ______At 31 March 2020 - 704,832 256,635 961,467 d) Amount recognized in profit or loss COMPANY SECRETARY COMPANY Interest on SECRETARY lease liabilities - 45,950 16,166 62,116

Also refer note 2(d). ______2020 22.______TRADE AND2020 OTHER PAYABLES

2020 2019 UShs’000 UShs’000

Trade payables 26,111,359 28,397,753 Accruals 7,445,573 13,997,187 Withholding tax payable 620,505 336,964 Due to related parties (Note 23(a)) 21,280,442 22,780,851 55,457,879 65,512,755

60 Annual Report 2019/2020 100 43 10060 Annual Report 2019/2020 StatementCIPLA QUALITY Of Directors’ CHEMICAL Responsibilities INDUSTRIES LIMITED AStatementNNUAL REPORT Of Directors’ AND FINANCIAL Responsibilities STATEMENTS TheFOR Companies THE YEAR Act, ENDED 2012 requires 31 MA theRC Hdirectors 2020 to prepare financial statements for each financial year, whichNOTESThe Companiesgive T Oa THEtrue Act, andFINANC 2012fair viewrequiresIAL ofSTATEMENTS the the statedirectors of the to financialprepare affairsfinancial of statements the Company for aseach at thefinancial end ofyear, the financial which giveyear a andtrue of and its operatingfair view of results the state for thatof the year. financial It also affairs requires of the the Companydirectors to as ensure at the thatend theof the Company23financial. RELATED keepsyear and properPAR ofTIES its accounting operating records,results for which that disclose year. It with also reasonablerequires the accuracy directors at to anyensure time that the the financial Company position keeps of proper Cipla accountingQuality Chemical records, Industries which disclose Limited with(“the reasonableCompany”). accuracy They are atalso any responsible time the forfinancial safeguardingi) position The fo llthe owiof assetsng Cipla are Qualityt ofhe thekey Company. Chemicalrelated pa rties:Industries Limited (“the Company”). They are also responsible

for safeguardingName the assets of the Company. Nature of relationship The directorsQuality are Chemicals ultimately Limited, responsible Uganda for the internalShareholder/Common control of the Company. directorship The directors delegate responsibilityThe directorsMeditab for areHoldings internal ultimately controlLimited, responsible to Mauritius management. for the internalStandardsParent control company and ofsystems the Company.of internal The control directors are delegatedesigned andresponsibility implementedMeditab for Specialties byinternal management control Private toLimited, to management. provide India reasonable StandardsHolding assurance Company and systems as of toMeditab theof internal integrity Holdings control and Limited reliability are designed of theand financial implementedSitec Labsstatements Private by management and Limite to d,safeguard, India to provide verify reasonable andSub maintainsidiary assurance ofaccountability Meditab as Specialties to the of theintegrity Company’sPrivate and Limited, reliability assets. India of Thesethe financial systemsCipla Medpro statements and controls South and Africainclude to safeguard,(Pty) the Limited proper verify delegation andSub maintainsidiary of responsibilities of accountabilityCipla Limited within of thea clearly Company’s defined assets. framework,These Ciplasystems effective Limited, and accountingcontrolsIndia include procedures the proper and delegationadequateUltimate segregationHoldingof responsibilities Company of duties. within a clearly defined framework, effective accounting procedures and adequate segregation of duties. ii)The value, and nature of transactions with related parties during the year was as follows: The directors accept responsibility for the financial statements for the year ended 31 March 2020, which haveThe beendirectorsRelated prepared acceptparty using responsibility appropriate for theaccounting financial policiesstatementsUShs’000 supported for the byyear Naturereasonable ended of 31transactions andMarch prudent 2020, which judgmentshave beenCipla and Limitedprepared estimates using in conformity appropriate with accounting International policies 12,854,696Financial supported Reporting • byPurchase reasonable Standards of inventory and and prudentin the raw manner requiredjudgments by the and Companies estimates in Act, conformity 2012. The with directors International are of theFinancial opinion Reporting thatmaterials the Standardsfinancial statements and in the give manner a requiredtrue andCipla by fair Limited the view Companies of the state Act, of2012. the Thefinancial directors affairs are of of3,877,59 the the Company opinion4 • that andTechnical theof itsfinancial operatingservices statements fees results. The give directorsa trueCipla and further Limitedfair accept view of responsibility the state of forthe thefinancial maintenance affairs of 6,553,2of the accounting Company70 • recordsSale and ofof goodswhichits operating may be results. relied The upondirectors inSitec the further preparationLabs accept of responsibility financial statements, for the maintenance as well as adequate190,165of accounting systems• Analyticalrecordsof internal which work financialonmay raw be materials control.relied upon in the preparation of financial statements, as well as adequate systems of internal financial control. Quality Chemicals Limited 5,684,708 • Sale of ARVs and ACTs Nothing has come to the attention of the directo rs to indicate that the Company will not remain a going concernNothing for has at comeleast theto thenext attention twelve monthsof the directo from thers todate indicate of this that statement. the Company will not remain a going concernTotal for transactions at least the with next related twelve parties months from the date29,160,43 of this3 statement. The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were ii)The following were the balances as at 31 March: approvedThe financial by the statements Board of on Directors pages 11 on to ______and 49, which have signed been onprepared its behalf on by:the going concern basis, were approveda) Am byou thents Board due to of / fromDirectors related on party______and signed on its behalf by:

Due to related party (Note 22) 2020 2019 Related party UShs’000 UShs’000 Cipla Limited1 21,255,603 22,780,850 Sitec Labs2 24,838 - 21,280,441 22,780,850

1 Relates to purchase of raw materials and technical service fees payable to Cipla Limited. As at 31 March 2020, the liability relating to Cipla Limited amounted to Ushs 21,255 million (2019: Ushs 22,781 million). 2 Relates to pre-shipment laboratory tests for raw materials. 2020 2019 UShs’000 UShs’000 Due from related party Related party ______Quality Chemicals Limited ______3,512,231 1,819,270 ______Cipla Medpro South Africa (Pty) Limited ______5,936,996 - DirectorSitec Lab Director - 7 DirectorCipla Limited Director 1,007,163 523,143 ______2020 ______10,456,3 202090 2,342,420 ______2020 ______2020 Place:A______mounts due from related parties relate to sale of finisPlace:hed good______s Place:______Place:______b) Key management compensation Short-term employee benefits 4,364,114 6,216,060

The above represents compensation to the resident directors in the form of salaries.

44 Annual Report 2019/2020 61101 Annual Report 2019/2020 61101 CIPLAE. Directors’ QUALITY Interest CHEMICAL In Shares INDUSTRIES LIMITED E. Directors’ Interest In Shares ANNUAL REPORT AND FINANCIAL STATEMENTS As at 31 March 2020, the following directors held a direct interest in the Company’s share FOR THE YEAR ENDED 31 MARCH 2020 Ascapital at 31 asMarch reflected 2020, thein the following table below:directors held a direct interest in the Company’s share NOTEScapital TO as THE reflected FINANCIAL in the STATEMENTStable below: Director Number of shares % 24. DirectorCONTINGENT LIABILITIES Number of shares % The Company is a defendant in various legal actions. In the opinion of the directors, after taking appropriate legal advice, the outcome of such actions will not give rise to a significant loss. Mr. Emmanuel Katongole 101,933,042 2.7912 25.FMr. EmmanuelINANCIAL Katongole RISK MANAGEMENT 101,933,042 2.7912 Mr. George William Baguma 101,933,042 2.7912 Mr.The George Board William of Directors Baguma has overall responsibility for 101,933,042the establishment and oversight of the Company’s2.7912 Mr.risk Nevin management J Bradford framework. Senior management is responsible157,000 for developing and monitoring0.0043 the Mr.Company’s Nevin J Bradford risk management policies and report regularly157,000 to the Board of Directors on their activities.0.0043 Mr. Stevens Mwanje 19,400 0.0005 Mr.The Stevens Company’s Mwanje current financial risk management framework19,400 is a combination of formally documented0.0005 risk management policies in certain areas and informal204,042,484 risk management practices in others. The5.5872 risk management policies (both formal and informal) are204,042,484 established to identify and analyse the risks 5.5872faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market F. Auditorsconditions and the Company’s activities. F. Auditors TheThe auditors, Board AuditGrant Committee Thornton Certified oversees Publichow managementAccountants, monitorshave expressed compliance their with willingness the risk to Thecontinuemanagement auditors, in office Grant policies Thorntonin andaccordance procedures Certified with and Publicsection reviews Accountants, 167 the (2) adequacy of thehave ofCompanies theexpressed risk management Act, their 2012. willingness framework to continuein relation in officeto the risks in facedaccordance by the Company.with section The 167 Board (2) of Audit the CommitteeCompanies is Act,assisted 2012. in its oversight G. Subsequentrole by Internal Events Audit. Internal Audit undertakes both regular and adhoc reviews of risk management G. Subsequentcontrols and Events procedures, the results of which are reported to the Board Audit Committee. The directors are not aware of any matter or circumstance which is material to the financial TheaffairsThe directors Company of the are’s company,notprincipal aware financial which of any hasinstruments matter occurred or comprisecircumstance between cash 31 andwhichMarch cash is2020 materialequivalents, and the to thetradedate financial andof approvalother affairsofreceivables the financialof the and company, tradestatements, and whichother that payableshas hasoccurred not and beenfinance between otherwise lease 31 liabilities. March dealt 2020 with andin the the financialdate of approvalstatements. of the financial statements, that has not been otherwise dealt with in the financial statements. The main risks arising from the Company’s financial instruments are liquidity risk, foreign currency risk By Orderand credit of therisk.The Board Company has policies for managing financial risks as summarized below: By Order of the Board Foreign currency risk

The Company has transactional currency exposures. Such exposure arises from purchases by the Company in currencies other than its functional currency (Uganda Shillings). When the need arises for foreign currency, the Company purchases its requirements in the open market, and any exchange gains ______or losses are immediately posted to profit or loss. Some of the Company’s sales are in US Dollars. The ______proceeds from US Dollar sales are used to pay for liabilities denominated in US Dollars as much as is COMPANYpracticable. SECRETARY Otherwise, the Company does not engage in currency derivatives or other measures of COMPANYmanaging SECRETARY foreign currency risk.

______2020 ______2020

60 Annual Report 2019/2020 102 45 10260 Annual Report 2019/2020 StatementCIPLA QUALITY Of Directors’ CHEMICAL Responsibilities INDUSTRIES LIMITED ANNUALStatement REPORT Of Directors’ AND FINANCIAL Responsibilities STATEMENTS TheFOR Companies THE YEAR Act, ENDED 2012 requires 31 MARCH the directors 2020 to prepare financial statements for each financial year, whichNOTESThe Companiesgive TO a THEtrue Act,and FINANCIAL 2012fair viewrequires ofSTATEMENTS thethe statedirectors of the to financialprepare financialaffairs ofstatements the Company for each as financial at the year,end of the financialwhich give year a true and and of its fair operatingview of the results state forof thethat financial year. It alsoaffairs requires of the the Company directors as toat ensurethe end that of the the Company25.financial FINANCIAL keeps year properand RISK of its accounting MANAGEMENToperating records, results for which(continued) that disclose year. It with also reasonable requires the accuracy directors at to any ensure time that the the financialCompany position keeps properof Cipla accounting Quality records,Chemical whichIndustries disclose Limited with (“the reasonable Company”). accuracy They atare any also time responsible the forfinancial safeguardingForeign position currency the of assets Cipla risk of(continued)Quality the Company. Chemical Industries Limited (“the Company”). They are also responsible for safeguarding the assets of the Company. The directorsAs at 31 are March, ultimately the Company responsible had thefor following the internal significant control foreign of the currency Company. positions The directors and the equivalent delegate responsibilityThe directorsstated in for Ugandaare internal ultimately Shillings: control responsible to management. for the internalStandards control and ofsystems the Company. of internal The control directors are delegatedesigned andresponsibility implemented for byinternal management control to to management. provide reasonable Standards assurance and systems as to of the internal integrity control and reliability are designed of theand financial Atimplemented 31 March statements 20by20 management and to safeguard, to provide verify reasonable and maintain assurance accountability as to the integrity of the andCompany’s reliability assets. of the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. These systems and controls include the proper delegation of responsibilities withinUS$ a clearlyUShs’000 defined framework,These systems effective and controlsaccounting include procedures the proper and delegation adequate of segregation responsibilities of withinduties. a clearly defined framework,Financial effective assets accounting procedures and adequate segregation of duties. Bank balances 2,122 8,068 The directors accept responsibility for the financial statements for the year ended 31 March 2020, which Trade and other receivables 15,389,806 58,512,042 haveThe beendirectors prepared accept using responsibility appropriate for theaccounting financial policies statements supported for the by year reasonable ended 31 and March prudent 2020, which Due from related parties 2,839,993 10,797,655 judgmentshave been and prepared estimates using in conformity appropriate with accounting International policies Financial supported Reporting by reasonable Standards and and prudentin the manner 18,231,921 69,317,765 requiredjudgments by theand Companies estimates in Act, conformity 2012. The with directors International are of theFinancial opinion Reporting that the Standardsfinancial statementsand in the mannergive Financial liabilities a requiredtrue and by fair the view Companies of the state Act, of2012. the Thefinancial directors affairs are of of the the opinion Company that theand financialof its operating statements results. give The Trade and other payables 1,940,587 7,378,110 a true and fair view of the state of the financial affairs of the Company and of its operating results. The directorsBank further overdraft accept responsibility for the maintenance of accounting12,382,233 records which may47,074,947 be relied upondirectors inDue the tofurther preparation related accept parties of responsibility financial statements, for the maintenance as well as of adequate accounting 5,819,507systems records of internalwhich may 22,125,76financial be relied 6control. upon in the preparation of financial statements, as well as adequate systems of internal financial control. 20,142,327 76,578,823 Nothing has come to the attention of the directors to indicate that the Company will not remain a going concernNothingNet for hasposition at comeleast – theto(Payable) the next attention twelve monthsof the directors from the todate indicate of this that statement. the(1,910,406) Company will not (7remain,261,058 a going) concern for at least the next twelve months from the date of this statement. The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were At 31 March 2019 approvedThe financial by the statements Board of Directorson pages on11 to ______and 49, which have signed been on prepared its behalf on by: the going concern basis, were approvedFinancial by the assets Board of Directors on ______and signed on its behalf by: Bank balances 82,199 304,628 Trade and other receivables 29,965,949 111,048,833 Due from related parties 632,060 2,342,421 30,680,208 113,695,882 Financial liabilities Trade and other payables 10,458,971 38,760,945 Bank overdraft 14,009,411 51,918,878 Due to related parties 6,123,312 22,692,996 30,591,694 113,372,819

Net position - Receivables 88,514 323,063

The analysis below shows the post-tax impact of 5%+/- movement in the foreign exchange on the profitability of the Company: 2020 2019 UShs’000 UShs’000 ______+5% ______(260,427) 11,307 ______Director-5% Director 246,487 (11,307) Director Director ______2020 ______2020 ______2020 ______2020 Place:______Place:______Place:______Place:______

46 Annual Report 2019/2020 10361 Annual Report 2019/2020 10361 E.CIPLA Directors’ QUALITY Interest CHEMICAL In Shares INDUSTRIES LIMITED E. Directors’ Interest In Shares ANNUAL REPORT AND FINANCIAL STATEMENTS As at 31 March 2020, the following directors held a direct interest in the Company’s share FOR THE YEAR ENDED 31 MARCH 2020 Ascapital at 31 Marchas reflected 2020, the in thefollowing table directorsbelow: held a direct interest in the Company’s share NOTEScapital TO as THEreflected FINANCIAL in the table STATEMENTS below:

25.Director FINANCIAL RISK MANAGEMENT (continued)Number of shares % Director Number of shares % Credit risk

Mr.Credit Emmanuel risk is Katongole the risk of financial loss to the Company101,933,042 if a customer or counterparty to a financial2.7912 Mr. Emmanuelinstrument Katongolefails to meet its contractual obligations,101,933,042 and arises principally from the Company2.7912’s Mr.receivables George William from customers,Baguma other receivables and balances101,933,042 with banks. 2.7912 Mr. George William Baguma 101,933,042 2.7912 Mr.The Nevin Company J Bradford manages its credit risk by only trading with157,000 creditworthy third parties. It is the Company0.0043’s Mr. Nevinpolicy thatJ Bradford all customers who wish to trade on credit terms157,000 are subject to credit verification procedures.0.0043 Mr.In Stevens addition, Mwanje receivable balances are monitored on an 19,400ongoing basis to minimize the Company0.0005’s Mr. Stevensexposure Mwanje to bad debts. The maximum exposure to credit19,400 risk is equivalent to the bank balances0.0005 and trade and other receivables balance as at the end 204,042,484of the year as indicated below: 5.5872 204,042,484 2020 5.58722019 UShs’000 UShs’000 Trade and other receivables 60,909,816 108,232,164 F. AuditorsCash at bank 3,995,313 690,016 F. Auditors 64,905,129 108,922,180 The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to Thecontinue Theauditors, Company in officeGrant’s major Thorntonin customersaccordance Certified are with curren Publicsectiontly GovernmentAccountants, 167 (2) of of Ugandathehave Companiesexpressed (GOU), Government Act, their 2012. willingness of Zambia to continueand other in office private andin accordanceGovernmental with customers. section The167 concentration(2) of the Companies of credit risk Act,of the 2012. Company’s major G. Subsequentcustomers Eventsin the past three (3) years is as follows: G. Subsequent Events 2020 2019 2018 The directors are not aware of any matter or circumstanceUShs’000 which is materialUShs’000 to the financialUShs’000 Theaffairs directors of theare company,not aware whichof any has matter occurred or circumstance between 31 whichMarch is2020 material and the to thedate financial of approval

affairsof the financialof the company, statements, which that has hasoccurred not been between otherwise 31 March dealt 2020 with andin thethe financialdate of approvalstatements. of theGovernment financial of statements, Uganda (GOU) that – NMShas not been otherwise114,944,930 dealt with in the54,153,992 financial 24,488,056statements. By OrderGlobal of Fund the toBoard Fight AIDS, Tuberculosis and Malaria 56,749,170 89,965 8,776,001 By OrderMinistry of the of Health Board – Republic of Zambia 1,483,018 50,422,188 23,876,504 173,177,118 104,666,145 57,140,561 Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have ______sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without ______incurring unacceptable losses or risking damage to the Company’s reputation. COMPANY SECRETARY COMPANYThe Company SECRETARY currently has sufficient cash on demand to meet expected operational expenses, including the servicing of financial obligations.

______2020 Up to 3 3 to 12 Above 12 ______2020 months months months Total 31 March 2020 UShs’000 UShs’000 UShs’000 UShs’000

Bank overdraft - 47,074,947 - 47,074,947 Finance lease liabilities 72,980 216,745 406,695 696,420 Trade and other payables 55,457,879 - - 55,457,879 55,530,859 47,291,692 406,695 103,229,246

31 March 2019 Bank overdraft - 51,918,878 - 51,918,878 Trade and other payables 65,512,755 - - 65,512,755 65,512,755 51,918,878 - 117,431,633

60 Annual Report 2019/2020 104 47 10460 Annual Report 2019/2020 StatementCIPLA QUALITY Of Directors’ CHEMICAL Responsibilities INDUSTRIES LIMITED ANNUALStatement REPORT Of Directors’ AND FINANCIAL Responsibilities STATEMENTS TheFOR Companies THE YEAR Act, ENDED 2012 requires 31 MARCH the directors 2020 to prepare financial statements for each financial year, whichNOTESThe Companiesgive TO a THEtrue Act, andFINANCIAL 2012fair viewrequires ofSTATEMENTS thethe statedirectors of the to financialprepare financialaffairs ofstatements the Company for each asfinancial at the year,end of the financial which give year a true and and of its fair viewoperating of the results state forof thethat financial year. It alsoaffairs requires of the the Company directors as toat ensurethe end that of the the Company25.financial FINANCIAL keepsyear andproper RISK of its accounting MANAGEMENT operating records, results for (continued)which that disclose year. It with also reasonable requires the accuracy directors at toany ensure time that the the financialCompany position keeps properof Cipla accounting Quality records,Chemical whichIndustries disclose Limited with (“the reasonable Company”). accuracy They at are any also time responsible the forfinancial safeguarding position the of assets Cipla ofQuality the Company. Chemical Industries Limited (“the Company”). They are also responsible Capital management for safeguarding the assets of the Company.

The directorsCapital includes are ultimately equity responsibleattributable tofor the the equity internal holders control of theof theCompany. Company. The Theprimary directors objective delegate of the responsibilityThe directorsCompany for are’s internalcapital ultimately managementcontrol responsible to management. is to for ensure the internal thatStandards it maintains control and of systemshealthy the Company. capital of internal ratios The control indirectors order are to delegatesupportdesigned andresponsibility implementedits business for andbyinternal management maximize control shareholder to to management. provide value. reasonable TheStandards Company assurance and manages systems as to itsof the capitalinternal integrity structure control and reliability andare makesdesigned of theand financial adjustmentsimplemented statements to by it inmanagement light and of tochanges safeguard, to provide in economic verify reasonable conditions.and maintain assurance To maintainaccountability as to or the adjust integrity of the the capital andCompany’s reliability structure, assets. of Thesethe financial thesystems Company andstatements controlsmay adjust and include itsto returnsafeguard, the properon capital verify delegation to andshareholders maintain of responsibilities oraccountability issue new within shares. of thea clearly NoCompany’s changes defined wereassets. framework,Thesemade systems effectivein the and objectives, controlsaccounting policiesinclude procedures orthe processes proper and delegation duringadequate the of yearssegregation responsibilities ended 31of March withinduties. 201a clearly9 and defined31 March framework,2020. effective accounting procedures and adequate segregation of duties. The directors accept responsibility for the financial statements for the year ended 31 March 2020, which haveThe beendirectorsFair valueprepared accept measurement using responsibility appropriate for theaccounting financial policies statements supported for the by year reasonable ended 31 and March prudent 2020, which judgmentshave been and prepared estimates using in conformityappropriate with accounting International policies Financial supported Reporting by reasonable Standards and and prudentin the manner requiredjudgmentsThe by fair theand values Companies estimates of financial in Act, conformity assets2012. The and with directors financial International areliabilities of theFinancial that opinion are Reporting traded that the in activeStandardsfinancial markets statementsand arein thebased manner give a requiredtrueon and quoted by fair the view market Companies of theprices state Act, or dealer of2012. the Thepricefinancial directors quotations. affairs are Forof of theall the otheropinion Company financial that the instruments,and financialof its operating thestatements Company results. give The directorsa truedetermines and further fair accept viewfair values of responsibilitythe usingstate otherof forthe valuation thefinancial maintenance techniques. affairs ofof accountingthe Company records and of which its operatingmay be reliedresults. The upondirectors in the further preparation accept of responsibility financial statements, for the maintenance as well as of adequate accounting systems records of internalwhich may financial be relied control. uponFor in thefinancial preparation instruments of financial that trade statements, infrequently as andwell haveas adequate little price systems transparency, of internal fair valuefinancial is less control. Nothingobjective, has come and to requires the attention varying of thedegrees directors of tojudgement indicate thatdepending the Company on liquidity, will not concentration,remain a going concernNothinguncertainty for has at come least of market theto the next factors,attention twelve pricing monthsof the assumptions directors from the to date andindicate ofother this that risks statement. the affecting Company the specificwill not instruments.remain a going concern for at least the next twelve months from the date of this statement. The financialValuation statements models on pages 11 to 49, which have been prepared on the going concern basis, were approvedThe financial by the statements Board of Directorson pages on11 to ______and 49, which have signed been on prepared its behalf on by: the going concern basis, were The Company measures fair values using the following fair value hierarchy, which reflects the approved by the Board of Directors on ______and signed on its behalf by: significance of the inputs used in making the measurements. • Level 1: inputs that are quoted market prices (unadjusted) in active markets for identical instruments. • Level 2: inputs other than quoted prices included within Level 1 that are observable either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques in which all significant inputs are directly or indirectly observable from market data. • Level 3: inputs that are unobservable. This category includes all instruments for which the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation. This category includes instruments that are valued based on quoted prices for similar instruments for which significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

The Company’s current valuation techniques include comparison with similar instruments for which market observable prices exist and other valuation models. Assumptions and inputs used in valuation techniques include risk-free and benchmark interest rates, credit spreads and other premia used in ______estimating discount rates, bond and equity prices, foreign______currency exchange rates, equity and equity Director______index prices and expected price volatilities and correlations.Director______The objective of valuation techniques is Directorto arrive at a fair value measurement that reflects theDirector price that would be received to sell the asset ______or paid to 2020transfer the liability in an orderly transaction______between 2020 market participants at the ______measurement 2020 date. Model inputs and values are calibrated______against historical2020 data and published forecasts and, where possible, against current or recent observed transactions in different Place:instruments______and against broker quotes. Place:______Place: ______Place:______As at 31 March 2020, the Company did not hold any financial assets, or financial liabilities, at fair value. The carrying amounts of the financial assets and liabilities, held at amortised cost on the statement of financial position, approximate their fair values as at that date.

48 Annual Report 2019/2020 10561 Annual Report 2019/2020 10561 E.CIPLA Directors’ QUALITY Interest CHEMICAL In Shares INDUSTRIES LIMITED E. Directors’ Interest In Shares ANNUAL REPORT AND FINANCIAL STATEMENTS As at 31 March 2020, the following directors held a direct interest in the Company’s share FOR THE YEAR ENDED 31 MARCH 2020 Ascapital at 31 Marchas reflected 2020, thein thefollowing table directorsbelow: held a direct interest in the Company’s share NOTEScapital TO as THEreflected FINANCIAL in the table STATEMENTS below: 26.Director SUBSEQUENT EVENTS Number of shares % Director Number of shares % The directors are not aware of any matter or circumstance which is material to the financial affairs of the company, which has occurred between 31 March 2020 and the date of approval of the financial Mr. statements,Emmanuel thatKatongole has not been otherwise dealt with in101,933,042 the financial statements. 2.7912

Mr. Emmanuel Katongole 101,933,042 2.7912 27. GOING CONCERN Mr. George William Baguma 101,933,042 2.7912 Mr. GeorgeThe directors William consider Baguma that the Company has adequate101,933,042 resources to continue operating for2.7912 the Mr. foreseeableNevin J Bradford future. It is therefore appropriate to adopt the157,000 going concern basis in preparing the financial0.0043 Mr. Nevinstatements. J Bradford The directors are satisfied that the Company157,000 is in a sound financial position and has access0.0043 Mr. toStevens adequate Mwanje borrowing facilities to meet its foreseeable cash19,400 requirements. 0.0005 Mr. Stevens Mwanje 19,400 0.0005 Due to the current COVID-19 pandemic, there204,042,484 have been several restrictions imposed by 5.5872the Governments across the globe on travel, goods movement204,042,484 and transportation considering public health5.5872 and safety measures. The Company is closely monitoring the impact of the pandemic on all aspects of its business, including how it will impact its customers, employees, vendors and business partners. F. AuditorsManagement has exercised due care, in concluding on significant accounting judgements and F. Auditorsestimates, inter-alia, recoverability of receivables, intangible assets, inventory and based on the Theinformation auditors, availableGrant Thornton to date, bothCertified internal Public and external, Accountants, management have isexpressed of the view their that the willingness pandemic to Thecontinue didauditors, not inadversely officeGrant affectThorntonin accordance the Company’s Certified with financial Publicsection resultsAccountants, 167 (2) as ofof and thehave for Companiestheexpressed year ended Act, their 312012. Marchwillingness 2020. to continue in office in accordance with section 167 (2) of the Companies Act, 2012. G.28. SubsequentCOMPARATIVES Events G. Subsequent Events During the current financial year, management considered the presentation basis for which expenses Thewere directors presented are innot the aware statement of any of profitmatter or loss or circumstance and other comprehensive which is material income. to Whilst the financialhistorically Theaffairs thedirectors statement of theare ofcompany,not profit aware or loss whichof andany has othermatter occurred comprehensive or circumstance between income 31 whichMarch was ist2020o materialbe presentedand the to the dateon financiala byof natureapproval affairsof thebasis, financialof thisthe basis company, statements, was not which consistently that has hasoccurred applied not been whichbetween otherwise resulted 31 March indealt certain 2020 with expenditure andin thethe financial datebeing oferroneously approvalstatements. of thegrouped financial as part statements, of "Other thatoperating has notexpenses”, been otherwise “Administration dealt expenses”with in the andfinancial “Staff expenses".statements. By OrderManagement of the Boardhas disaggregated certain amounts from within these categorizations and reclassified By Orderthem of in tothe “General Board and administrative expenses” and “Cost of Sales”. The effects of the material reclassifications and the resulting increases/(decreases) to items of the statement of profit or loss are as follows: 2019 UShs’000 ______Cost of sales ______Factory staff costs 12,335,389 COMPANYDepreciation SECRETARY of factory building and machinery 3,766,263 COMPANY SECRETARY Staff expenses ______Factory staff2020 costs (12,335,389) ______Administrative2020 staff costs (15,347,036)

Amortisation and depreciation Depreciation of factory building and machinery (3,766,263) Depreciation - administration (1,343,813)

General and administrative expenses Depreciation - administration 1,343,813 Administrative staff costs 15,347,036 -

60 Annual Report 2019/2020 106 49 10660 Annual Report 2019/2020 Statement Of Directors’ Responsibilities

The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, which give a true and fair view of the state of the financial affairs of the Company as at the end of the financial year and of its operating results for that year. It also requires the directors to ensure that the Company keeps proper accounting records, which disclose with reasonable accuracy at any time the financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible for safeguarding the assets of the Company.

The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibility for internal control to management. Standards and systems of internal control are designed and implemented by management to provide reasonable assurance as to the integrity and reliability of the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. These systems and controls include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties.

The directors accept responsibility for the financial statements for the year ended 31 March 2020, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates in conformity with International Financial Reporting Standards and in the manner required by the Companies Act, 2012. The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Company and of its operating results. The directors further accept responsibility for the maintenance of accounting records which may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control.

Nothing has come to the attention of the directors to indicate that the Company will not remain a going concern for at least the next twelve months from the date of this statement.

The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approved by the Board of Directors on ______and signed on its behalf by:

______Director Director

______2020 ______2020

Place:______Place:______

Annual Report 2019/2020 10761 E. Directors’ Interest In Shares

NoticeAs at 31 March 2020,of the thefollowing directors2nd held Annual a direct interest in the Company’s share Generalcapital as reflected inMeeting the table below: Director Number of shares % NOTICE is hereby given that the 2nd Annual General Meeting of Cipla Quality Chemical Industries Limited will be held via electronic means on Thursday, 20th August,Mr. Emmanuel 2020 starting Katongole at 11:00 to transact the 101,933,042following business: 2.7912 Mr. George William Baguma 101,933,042 2.7912 Ordinary Business Mr. Nevin J Bradford 157,000 0.0043 1. To receive, consider and if approved, adopt the Company annual audited financial statements for Mr.the Stevens financial Mwanje year ended 31st March 2020 together with the19,400 reports of the Board of Directors and0.0005 External Auditor. 204,042,484 5.5872 2. To rotate and re-elect directors: - In accordance with the provisions of Article 115 of the Company’s Amended Articles of Association, the following directors retire by rotation and being eligible offer themselves for re-election: F. Auditors • Mr Mark Daly •The Dr Peterauditors, Mugyenyi Grant Thornton Certified Public Accountants, have expressed their willingness to •continue Mr Paul Millerin office in accordance with section 167 (2) of the Companies Act, 2012.

G.3. Subsequent To elect Directors: Events - In accordance with the Provisions of Article 121 of the Company’s Amended Articles of Association, TheMrs directorsGeena Malhotra are not havingaware beenof any appointed matter orto circumstancefill a casual vacancy which isretires material from tothe the Board financial and affairsbeing eligible of the offers company, herself which for re-election. has occurred between 31 March 2020 and the date of approval of the financial statements, that has not been otherwise dealt with in the financial statements. 4. To consider, and if deemed fit, approve the re-appointment of Grant Thornton as the External By OrderAuditor ofof the CompanyBoard for Financial Year 2020/21 and authorise the Board of Directors to set their remuneration.

5. To consider, and if deemed fit, approve the fees payable to Non- Executive Directors for the year 2020. Members Resolution To consider, and if deemed fit, pass the following resolution as a member’s resolution in accordance with ______Section 147 of the Companies Act 2012. 6. To appoint a Non- Executive Director: - COMPANY SECRETARY To consider, and if deemed fit, approve the appointment of Mr. Zain Latif to the Board of Directors.

7. To conduct any other business for which due notice will have been duly received. ______2020 By Order of the Board 30th July, 2020

Doreen Awanga COMPANY SECRETARY

10860106 AnnualAnnual ReportReport 2019/20202019/2020 Notice of the 2nd Annual StatementNotes: Of Directors’ Responsibilities Thei. Companies In view of Act, the 2012 ongoing requires Coronavirus the directors 2019 to(COVID-19) prepare financialpandemic statements and related for Public each Healthfinancial Regulations year, which giveand adirectives true and passed fair view by ofthe the Government state of the of financialUganda restrictingaffairs of publicthe Companymeetings, as it atis impracticablethe end of the General Meeting financialfor yearCiplaQCIL and of to its hold operating a physical results Annual for that General year. Meeting It also requires(AGM). the directors to ensure that the Company keeps proper accounting records, which disclose with reasonable accuracy at any time the financialii. According position toof ArticleCipla 77Quality of the Chemical Company’s Industries Articles Limited of Association, (“the Company”). any member They whoare participatesalso responsible at NOTICE is hereby given that the 2nd Annual General Meeting of Cipla Quality for safeguardingthe commencement the assets ofof andthe forCompany. the duration of a meeting by way of a teleconference call, video conference or audio visual shall be deemed present at the meeting and counted towards the Chemical Industries Limited will be held via electronic means on Thursday, 20th The directorsquorum. are ultimately responsible for the internal control of the Company. The directors delegate August, 2020 starting at 11:00 to transact the following business: responsibility for internal control to management. Standards and systems of internal control are designed andiii. implemented Cipla Quality by Chemicalmanagement Industries to provide Ltd (CiplaQCIL) reasonable is assuranceconducting as this to virtual the integrity AGM following and reliability receipt of of Ordinary Business the financiala No Objectionstatements from and the to safeguard,Uganda Securities verify andExchange maintain (USE) accountability and in accordance of the Company’s with the Company’s assets. These systemsArticles andof Association controls include which theallow proper for the delegation holding of of meetings responsibilities via video within conference a clearly or defined audio-visual 1. To receive, consider and if approved, adopt the Company annual audited financial statements for framework,means. effective accounting procedures and adequate segregation of duties. the financial year ended 31st March 2020 together with the reports of the Board of Directors and External Auditor. Theiv. directorsThe AGM accept will beresponsibility streamed livefor thevia afinancial link which statements shall be providedfor the year to all ended shareholders 31 March who 2020, will havewhich have beenregistered prepared to participate using appropriate at the AGM. accounting Duly registered policies shareholderssupported by and reasonable proxies willand receive prudent an SMS/ 2. To rotate and re-elect directors: - judgmentsUSSD and prompt estimates on theirin conformity registered withmobile International numbers, 24Financial hours priorReporting to the Standards AGM acting and as in a thereminder. manner In accordance with the provisions of Article 115 of the Company’s Amended Articles of Association, requiredA bysecond the Companies SMS/USSD Act, code 2012. shall The be directors sent at leastare of1 hourthe opinionto the meeting that the providing financial a statements link to the livegive the following directors retire by rotation and being eligible offer themselves for re-election: a true andstream. fair view of the state of the financial affairs of the Company and of its operating results. The directors further accept responsibility for the maintenance of accounting records which may be relied • Mr Mark Daly uponv. inA the member preparation entitled of to financial participate statements, and vote asmay well appoint as adequate a proxy systems to participate of internal and financialvote on his/control. • Dr Peter Mugyenyi her behalf in the manner prescribed in the proxy form. A proxy need not be a shareholder of the • Mr Paul Miller NothingCompany. has come A tocompleted the attention form ofof theproxy directors should to be indicate emailed that to [email protected] Company will not remain or adelivered going concernto for CiplaQCIL at least theoffices next twelvenot later months than fromMonday the 17th date August, of this 2020 statement. at 11.00 am. 3. To elect Directors: - In accordance with the Provisions of Article 121 of the Company’s Amended Articles of Association, Thevi. financial Shareholders statements wishing on topages participate 11 to 49, in thewhich meeting have beenshould prepared register foron the AGMgoing by: concern basis, were Mrs Geena Malhotra having been appointed to fill a casual vacancy retires from the Board and approved by the Board of Directors on ______and signed on its behalf by: being eligible offers herself for re-election. a. Dialling *284*47# for all networks and following the various prompts of the registration process, or 4. To consider, and if deemed fit, approve the re-appointment of Grant Thornton as the External b. Sending an email request to [email protected]. Auditor of the Company for Financial Year 2020/21 and authorise the Board of Directors to set their remuneration. In order to complete the registration process, shareholders will need to provide their National ID/ Passport Numbers/SCD Account Number. For assistance, shareholders should dial the following 5. To consider, and if deemed fit, approve the fees payable to Non- Executive Directors for the year helpline number: +254 709 170 000 from 9:00 am to 4:00 pm from Monday to Friday or send an 2020. email to [email protected] or [email protected]. Members Resolution vii. Registration for the AGM opens on Thursday, 30th July 2020 and will close on Tuesday, 18th August To consider, and if deemed fit, pass the following resolution as a member’s resolution in accordance with 2020 at 11.00 a.m. Shareholders will not be able to register after this time. Section 147 of the Companies Act 2012. 6. To appoint a Non- Executive Director: - viii. Duly registered shareholders and proxies may follow proceedings of the AGM using the livestream To consider, and if deemed fit, approve the appointment of Mr. Zain Latif to the Board of Directors. platform. A link shall be sent to shareholders or proxies upon successful registration.

7. To conduct any other business for which due notice will have been duly received. ix. Voting shall be done electronically via USSD or through the web link shared upon successful registration. A poll shall be conducted for all the resolutions. ______By Order of the Board Directorx. Shareholders are advised to submit questions by TuesdayDirector 18th August 2020 via phone, web link or 30th July, 2020 email. Responses to some of the questions received shall be provided at the meeting. A list of all ______questions 2020received and the answers thereto will be______published on the 2020 Company’s website within 24 hours after conclusion of the AGM.

Place:xi. R______esolutions of the meeting will be announced beforePlace: close______of the meeting and thereafter published in a newspaper of national circulation and the Company Website within 24 hours after conclusion of the AGM. Shareholders who have provided their email addresses will also be notified via the same. Doreen Awanga COMPANY SECRETARY

106 Annual Report 2019/2020 AnnualAnnual ReportReport 2019/20202019/2020 1091061 8 E.Proxy Directors’ form Interest In Shares

A shareholderAs at 31 March entitled 2020, to the attend following and votedirectors at the held AGM a directis entitled interest to appoint in the Company’sone or more share proxies to attend,capital speak as reflectedand vote inon thehis/her table stead. below: A proxy need not be a member of the Company.

I/We, Director Number of shares % of ______(address),

beingMr. aEmmanuel shareholder(s) Katongole and holder of ______ordinary101,933,042 shares and entitled to vote hereby appoint,2.7912 1. or failing him/her Mr. George William Baguma 101,933,042 2.7912 2. or failing him/her Mr. Nevin J Bradford 157,000 0.0043

TheMr. Chairman Stevens Mwanjeof the Annual General Meeting 19,400 0.0005 as my/our proxy to vote for me/us and on my/our behalf at the 2nd Annual General Meeting of the Company to be held via electronic communication on204,042,484 the 5th day of August, 2020 starting at 11:005.5872 am and at any adjournment thereof as follows: VOTES

F. Auditors For* Against* Withheld* AGENDA The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to continueTo receive, in office consider in accordanceand if approv withed, adoptsection the 167 Company (2) of the Companies Act, 2012. annual audited financial statements for the financial year 1 G. Subsequentended 31st Events March 2020 together with the reports of the Board of Directors and External Auditor The directors are not aware of any matter or circumstance which is material to the financial affairsIn accordance of the company, with the which provisions has occurredof Article 11between5 of the 31 March 2020 and the date of approval of theCompany’s financial Amended statements, Articles that of hasAssociation, not been the otherwise following dealt with in the financial statements. directors retire by rotation and being eligible offer By2 Orderthemselves of the forBoard re-election: • Mr Mark Daly • Dr Peter Mugyenyi • Mr Paul Miller

In accordance with the Provisions of Article 121 of the Company’s Amended Articles of Association, Ms Geena ______3. Malhotra having been appointed to fill a casual vacancy retires from the Board and being eligible offers herself for re-election COMPANY SECRETARY To consider, and if deemed fit, approve the re- appointment of Grant Thornton as the External Auditor of 4. ______the Company2020 for Financial Year 2020/21 and authorise the Board of Directors to set their remuneration

To consider, and if deemed fit, approve the fees payable 5. to Non- Executive Directors for the year 2020

In accordance with Section 147 of the Companies Act 2012, 6. to consider and if deemed fit, approve the appointment of Mr. Zain Latif to the Board of Directors.

*Insert a cross or tick. If no options are marked, the proxy can vote as he/she deems fit. Dated this ______day of ______, 20 ______

______

______

______60110109 AnnualAnnual ReportReport 2019/20202019/2020 Proxy form Statement Of Directors’ Responsibilities

A shareholder entitled to attend and vote at the AGM is entitled to appoint one or more proxies to The Companies Act, 2012 requires the directors to prepare financial statements for each financial year, attend, speak and vote on his/her stead. A proxy need not be a member of the Company. which give a true and fair view of the state of the financial affairs of the Company as at the end of the financial year and of its operating results for that year. It also requires the directors to ensure that the I/We, Company keeps proper accounting records, which disclose with reasonable accuracy at any time the financial position of Cipla Quality Chemical Industries Limited (“the Company”). They are also responsible of ______(address), for safeguarding the assets of the Company. being a shareholder(s) and holder of ______ordinary shares and entitled to vote hereby appoint, The directors are ultimately responsible for the internal control of the Company. The directors delegate responsibility for internal control to management. Standards and systems of internal control are designed 1. or failing him/her and implemented by management to provide reasonable assurance as to the integrity and reliability of the financial statements and to safeguard, verify and maintain accountability of the Company’s assets. 2. or failing him/her These systems and controls include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties. The Chairman of the Annual General Meeting nd as my/our proxy to vote for me/us and on my/our behalf at the 2 Annual General Meeting of the The directors accept responsibility for the financial statements for the year ended 31 March 2020, which th Company to be held via electronic communication on the 5 day of August, 2020 starting at 11:00 am have been prepared using appropriate accounting policies supported by reasonable and prudent and at any adjournment thereof as follows: judgments and estimates in conformity with International Financial Reporting Standards and in the manner VOTES required by the Companies Act, 2012. The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Company and of its operating results. The For* Against* Withheld* directors further accept responsibility for the maintenance of accounting records which may be relied AGENDA upon in the preparation of financial statements, as well as adequate systems of internal financial control.

To receive, consider and if approved, adopt the Company Nothing has come to the attention of the directors to indicate that the Company will not remain a going annual audited financial statements for the financial year 1 concern for at least the next twelve months from the date of this statement. ended 31st March 2020 together with the reports of the Board of Directors and External Auditor The financial statements on pages 11 to 49, which have been prepared on the going concern basis, were approved by the Board of Directors on ______and signed on its behalf by: In accordance with the provisions of Article 115 of the Company’s Amended Articles of Association, the following directors retire by rotation and being eligible offer 2 themselves for re-election: • Mr Mark Daly • Dr Peter Mugyenyi • Mr Paul Miller

In accordance with the Provisions of Article 121 of the Company’s Amended Articles of Association, Ms Geena 3. Malhotra having been appointed to fill a casual vacancy retires from the Board and being eligible offers herself for re-election

To consider, and if deemed fit, approve the re- appointment of Grant Thornton as the External Auditor of 4. the Company for Financial Year 2020/21 and authorise the Board of Directors to set their remuneration ______Director Director To consider, and if deemed fit, approve the fees payable 5. to Non- Executive Directors for the year 2020 ______2020 ______2020 In accordance with Section 147 of the Companies Act 2012, 6. to consider and if deemed fit, approve the appointment of Place:______Place:______Mr. Zain Latif to the Board of Directors.

*Insert a cross or tick. If no options are marked, the proxy can vote as he/she deems fit. Dated this ______day of ______, 20 ______

______

______

______109 Annual Report 2019/2020 Annual Report 2019/2020 61111 E. Directors’ Interest In Shares

As at 31 March 2020, the following directors held a direct interest in the Company’s share capital as reflected in the table below:

Director Number of shares %

Cipla Quality Chemical Industries Limited Mr. Emmanuel Katongole Plot101,933,042 1-7, 1st Ring Road, Luzira Industrial 2.7912Park P.O Box 34871, Kampala-Uganda Mr. George William Baguma 101,933,042 2.7912 Telephone: +256 312 341 100- Mr. Nevin J Bradford 157,000 Email: [email protected]

Mr. Stevens Mwanje 19,400 0.0005

204,042,484 5.5872

F. Auditors

The auditors, Grant Thornton Certified Public Accountants, have expressed their willingness to continue in office in accordance with section 167 (2) of the Companies Act, 2012.

G. Subsequent Events

The directors are not aware of any matter or circumstance which is material to the financial affairs of the company, which has occurred between 31 March 2020 and the date of approval of the financial statements, that has not been otherwise dealt with in the financial statements.

By Order of the Board

______

COMPANY SECRETARY

______2020

60112 Annual Report 2019/2020 Annual Report 2019/2020 111