Cipla Eadr Final

8/12/2019 Cipla Eadr Final.

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BRACTs

Vishwakarma Institute of Management(An ISO 9001-2008 Certified Institute)

(Approved by AICTE-New Delhi, Recognized by Government of Maharashtra and Permanently Affiliated to University of Pune)

MBAProgrammeRated as MH-A by CRISIL

Recipient of the 19thDewang Mehta B School Award for the Best B School with Academic Inputs in Marketing

Rewarded as Second Best Professional Institute in Urban Area Category by the University of Pune

1 Executive Summary2 Project Objective3 Introduction4 Markets5 Financial Information6 Corporate Governance7 CSR Activities

8 Conclusion9 References

Project Report

On

Cipla

For the subject,

Enterprise AnalysisDesk Research (Course Code: 115)

Submitted by,

xxxxxx

MBAI, Div.A

Roll Noxxxxxx


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INDEX

Sr. No. Topic Page No.

1 Executive Summary 2

2 Project Objective 4

3 Introduction 5

4 Markets 10

5 Financial Information 12

6 Corporate Governance 22

7 CSR Activities 26

8 Conclusion 27

9 References 28


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1. Executive Summary1.1 Introduction

Cipla was established in 1935 with the vision of making India self-reliant and self-

sufficient in healthcare. Today, Cipla is one of the worlds largest generic pharmaceutical

companies with a presence in over 170 countries. Cipla is renowned for making affordable,

world-class medicines that meet the needs of patients across therapies. Cipla offer services like

consulting, commissioning, plant engineering, technical know-how transfer and support.

1.2 History

Ciplas journey began in 1935 when our founder, Dr. K. A. Hamied, set up an enterprise

with the vision to make India self-sufficient in healthcare. Over the past 77 years, Cipla has

emerged as one of the worlds most respected pharmaceutical names, not just in India but

worldwide.

Cipla has 34 state-of-the-art manufacturing facilities that make Active Pharmaceutical

Ingredients (APIs) and formulations, which have been approved by major international

Regulatory Agencies. Cipla has over 2000 products in 65 therapeutic categories; with over 40

dosage forms, covering a wide spectrum of diseases ranging from communicable, non-

communicable, common and emerging diseases to even rare diseases.

Ciplas Research and Development (R&D) centre is focused on developing innovative

products and drug delivery systems, giving the country and the world many Firsts'.

Today, Cipla is one of the worlds largest generic pharmaceutical companies with a

strong presence in over 170 countries. The company maintains world-class quality across all its

products and services.

Whether its for millions or for just a few hundreds, Ciplas journey to care for all

humanity continues.


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1.3 Caring for life

Since inception in 1935, caring has been at the core of everything we do at Cipla.

For patients, caring is a promise that we will do whatever it takes to ensure they have

continued access to the highest quality medicines at affordable prices; whether a disease affects

millions or just a few hundreds.

To the medical fraternity, caring means the assurance of world-class medicines and

support across multiple therapeutic areas.

For business partners, caring brings the confidence of always getting world-class quality

and competitive prices.

For employees, caring manifests itself in a safe, equal-opportunities' workplace that

fosters innovation for a healthier world.

1.4 Vision

Cipla stands for healthcare solutions by bringing access to medication; affordable

medicines and true innovation to patients.

Establish the right mix of high volume and high value complex generics

Capitalize on Ciplas wealth of respiratory experience into meaningful healthcaresolutions.

Establish affordable access to HIV products as a cornerstone of Ciplas global portfolio.


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2. Project Objectivei) The primary objective to study Ciplais to understand in detail about the Company.ii) To understand various segments / markets / customers catered by company from

perspective of companys stakeholders / shareholders / or future employee of

company.

iii) Understand the companys market scenario and financial stand.iv) To understand about companys variousgovernance and CSR activities.


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3. Introduction3.1 Cipla

Cipla Limited is a pharmaceutical company based in Mumbai, India. Founded by Khwaja

Abdul Hamied as The Chemical, Industrial & Pharmaceutical Laboratories in 1935, Cipla makes

drugs to treat cardiovascular disease, arthritis, diabetes, weight control, depression and many

other health conditions.

Cipla cooperates with other enterprises in areas such as consulting, commissioning,

engineering, project appraisal, quality control, know-how transfer, support, and plant supply.

Type: Public

Traded as: BSE: 500087

NSE: CIPLA

BSE SENSEX Constituent

Industry: Pharmaceuticals

Founded: 1935

Headquarters: Mumbai, Maharashtra, India

Key people: Y. K. Hamied (CMD), Chairman

Products: Pharmaceuticals and diagnosticsRevenue: INR69775.0 million (US$1.1 billion) (2012)

Net income: INR11.23 billion (US$170 million) (2012)

Approvals: US FDA, WHO-Geneva, MHRA-UK, TGA-Australia, SUKL-

Slovak Republic, APVMA-Australia, MCC-South Africa, PIC-

Germany, Danish Medical Agency, ANVISA-Brazil, INVIMA-

Colombia, NDA-Uganda, Department of Health-Canada and

MOH-Saudi Arabia, among others

Highlights: One of the worlds largest generic companies.

Over 2,000 products, 65 therapeutic categories, over 40 dosage

forms.

34 state-of-the-art manufacturing facilities approved by major

international regulatory agencies.

Continuous innovation in R&D; over 20 world firsts.


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Employees : over 16,000

Cipla logo:

Website: www.cipla.com

3.2 Key therapies

o CARDIOVASCULAR: Forty years ago, Cipla started its fight against heart disease withinnovative and high-class drugs. Cipla introduced Propranolol, the first beta blocker in

India way back in 1972. This ushered in a new age of affordable beta blockers. Over the

years, Cipla have developed several products that help treat various diseases like MI,

angina, heart failure, hypertension, arrhythmia, lipid abnormalities and diabetes, and

obesity. Apart from innovation in cardiology, Cipla also provide valuable services to the

medical fraternity, in the form of the latest medical updates, CMEs and workshops. Not

to mention many international symposia and Ciplabcasts with the worlds leading minds

in cardiology, and conferences conducted in collaboration with international scientific

bodies.

o DERMATOLOGY AND COSMETOLOGY:Dermatology and Cosmetology are amongthe most dynamic sciences in the world and Cipla are doing their best to be at the

forefront. Cipla Dermatology is based on three pillars: Science, Technology and

Aesthetics. This unique 3-in-1 approach has led the company to develop many innovative

products and services for both patients and doctors. Cipla have a spectrum of products

based on a range of formulations for acne, skin infection (bacterial, fungal & herpes),

seborrhoeic dermatitis, psoriasis, steroid responsive dermatitis, hair loss and aging skin.

Products are available as oral and various topical formulations like cream, ointment,

solution, suspension, foam, serum and so on.

o DIABETES:Cipla has played a significant role in diabetes treatment and control and hasdeveloped a range of anti-diabetic drugs for the management and control of diabetes and
http://www.cipla.com/http://www.cipla.com/http://www.cipla.com/


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the treatment of complications that arise due to it. Cipla have several products as single

and combination pills to treat diabetes: Metformin, a single drug, Metformin plus

Glimepiride, a dual combination and Metformin plus Glimepiride plus Pioglitazone, a

triple drug combination. Cipla also have drugs to manage diabetic complications like

Atorvastatin and Fenofibrate for high cholesterol, Pregabalin for painful diabetic

neuropathy and Cilostazol for intermittent claudication.

o HIV/AIDS:Cipla has been committed to the cause of HIV/AIDS for over two decades. Inour crusade against the disease, Cipla has developed over 15 single and combination

medicines that revolutionized HIV therapy, not just in India but across the world. In

2001, Cipla introduced the worlds first ever recommended 3-in-1 fixed dose

combination (Stavudine + Lamivudine + Nevirapine) to fight AIDS. It was made

available at less than $1 per day compared to over $12,000 per patient per year prevailing

in most countries throughout the world. It lifted the death sentence from millions across

the developing world. Cipla has also done pioneering work in pediatric HIV and

addressed the needs of every kind of HIV patient, from pregnant mothers to babies and

from children to adults.

o NEUROSCIENCES:Cipla has brought its expertise gained from other therapies into theworld of neurosciences, one of the most challenging areas in medicine. So whether itsmigraine or epilepsy, multiple sclerosis or Parkinsons disease, bipolar disorder or

Alzheimers dementia, Cipla has a repertoire of world-class medicines for all these

conditions. Companys strength lies in the anti-migraine segment with Rizatriptan and

Zolmitriptan. Ciplas Zolmitriptan Nasal Spray offers quick relief, in less than 10 minutes

due to its unique dosage form. Glatiramer Acetate Injection is Indias first pre-filled

syringe for patients suffering from multiple sclerosis. Cipla has a wide range of

medications for various types of epilepsies, from the conventional Valproate to the

second generation Lamotrigine and Levetiracetam, and third generation drugs including

Lacosamide. Cipla make drugs for Parkinsons disease such as Amantadine and

Pramipexole, and Donepezil and Memantine for Alzheimers.

o ONCOLOGY: Cipla hopes to bring relief to the lives of cancer patients with its range ofquality products at humane prices. Cipla has also helped pioneer the concept of Palliative


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Care in India by founding the Cipla Palliative Care and Training Centre. Cipla is the first

company in India to introduce the drugs Vincristin and Vinblastine in the year 1984.

Over the years, Cipla has extended its anti-cancer portfolio and now Cipla has more than

32 drugs (57 SKU) to treat various types of cancer. Cipla manufacture most of the APIs

in-house - this is testimony to our strong research, manufacturing and quality capabilities.

Cipla is the first in India to get US FDA approval for its manufacturing facilities for

oncology products. Cipla have successfully developed and manufactured a number of

nanotech based products for cancer, such as paclitaxel injection. The aim is to prevent

unwanted toxicity, improve patient compliance and thus provide favorable clinical

outcomes. The Cipla Palliative Care and Training Centre Pune were set up in 1997 to

provide free care for terminally ill cancer patients. The approach is holistic, and focuses

not on dying but on living each day to the fullest. Over the years, the Centre has reached

out to more than 7,700 patients and their families.

o OPHTHALMOLOGY:Cipla has a dedicated ophthalmology division with medicines thatsupport wellness, prevention, treatment and cures in a broad range of therapeutic areas

which include glaucoma, dry eye, anti-infectives , anti-inflammatory and anti-oxidants.

Working on the belief that eyes are the most complex and delicate organs in the body,

Cipla ensure that every eye drop contains a universe of care and commitment, science

and technology, passion and precision

Some of Ciplasinnovative products:

Worlds first cyclosporine eye drops with micro-emulsion technology. Worlds first antibiotic-steroid fixed dose combination. Indias first carbonic anhydrase inhibitors for glaucoma.

o OSTEOPOROSIS: Since 1997, Cipla has been committed to strengthen the bones ofmillions of patients suffering from osteoporosis. Cipla has the widest range of

osteoporosis drugs that meet the individual needs of people to adhere to the medicine. At

a time when anti-osteoporosis medicines were not available in the country, Cipla

launched Alendronate, the first osteoporosis drug to be introduced in India. Cipla

introduced Risedronate, an anti-osteoporosis drug in India at 1/10th the price of the

innovator brand, making it affordable to all. Patient compliance is generally a big


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challenge in the treatment of osteoporosis. Risedronate 150 met this challenge with its

once-a-month dosing and this has improved patient adherence. With the launch of

Risedronate 35 mg + Calcium Citrate Maleate + Cholecalciferol, patients are ensured

that, along with the bisphosphonate, they get Calcium and Vitamin D, which is an

integral part of osteoporosis treatment. When Cipla introduced Zoledronic acid, an

injection for osteoporosis to be taken just once a year, Cipla increased patient compliance

by leaps and bounds.

o RESPIRATORY: Cipla is proud of its commitment to respiratory diseases with theintroduction of Salbutamol tablets in 1976 and Salbutamol inhaler in 1978 in India. Since

then Cipla have consistently introduced new products for asthma, Chronic Obstructive

Pulmonary Disease (COPD) and Allergic Rhinitis (AR) and more recently in other

diseases such as Pulmonary Arterial Hypertension (PAH), lung cancer and Idiopathic

Pulmonary Fibrosis (IPF).

o UROLOGY: Cipla has a significant presence in urology, with products in prostateailments BPH (Benign Prostatic Hyperplasia), prostate cancer, bladder disorders,

urinary stones, hypogonadism and sexual dysfunction ailments. Besides developing many

of Indias firsts in this therapy, we have to our credit the worlds first combination

products containing Tamsulosin + Finasteride and Tamsulosin + Dutasteride...milestones

in the history of urology. Some of Ciplasother important products in urology include a

selective alpha-blocker that reduces the chances of surgery for BPH patients,

Bicalutamide for prostate cancer. Potassium citrate and Magnesium citrate solution

for the treatment and management of urinary stones.

o WOMEN'S HEALTH:Ciplas commitment to womens health began in 1979, with thelaunch of Clominphene citrate for infertility in women. Over the years, Cipla have

developed an entire range of products dedicated to help women across age groups lead

more fulfilling lives. From managing polycystic ovarian syndrome to maintenance of

early pregnancy, from preventing post-partum haemorrhage to hormonal treatment, to

helping menopausal problemsCipla have medication for every stage of a womans life.


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4. MarketsDomestic Markets

Cipla delivers robust growth in the domestic market across therapies and maintains its

leadership position in respiratory, urology and HIV. The strong field force and distribution

network are important factors for Ciplas success in India. The focus is on channelizing the

Companys resources in increasing sales force effectiveness and hence productivity. For future

prospects, in-licensing opportunities are being considered, which would provide an unparalleled

platform to launch new, innovative and complex products. Furthermore, Cipla continues to work

closely with specialized corporate hospitals and nursing homes and take advantage of our broad

portfolio. Ciplas leading position in various therapeutic categories, including respiratory and

urology, reinforces the potential to strengthen its presence in India across other therapies. Cipla

continues to increase its focus on CNS, Oncology, Dermatology and Gastroenterology.

International Markets

The contribution from exports to the total revenues is more than 50% and is further

expected to grow over the years. Cipla is evaluating several business models such as capturing

value through direct presence in key priority markets including South Africa, US, Europe and

Australia. Additionally, Cipla will continue working with existing alliances to capture untappedgrowth opportunities.

Recently, the Company completed the acquisition of 100% of share capital of Cipla

Medpro in South Africa, at ZAR 10 per share amounting to a total investment of Rs 2,707 crore.

This investment is aimed at further strengthening the Companys commitment to the African

continent, and is aligned with the strategy to ascend the value-chain by managing a frontend

sales force in a market outside India. The deal enables Cipla to strengthen Medpros position in

the South African pharmaceutical market, support the optimization of Medpros manufacturing

capability and support Medpros expansioninto collaboratively identified African markets.

Cipla will leverage the broad spectrum of products in its domestic market to optimally

capitalize across other emerging countries. Simultaneously, the Company aims to build a robust

portfolio of differentiated products to drive growth in developed markets. Recent achievements


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of regulatory approval for Fluticasone HFA in several European countries and commercialization

of Azelastine combinations with Meda AB are few examples in this direction.

Product Name Sales (Rs.Millions) % of STO

Tablets & Capsules 4499.91 54.25

Bulk Drugs 756.92 9.13

Aerosols/Inhalation Devices 736.28 8. 8

Injections/Sterile Solutions 653.46 7.88

Tablets & Capsules - Traded 433.96 5.23

Liquids 286.36 3.45

Liquids - Traded 176.15 2.12Injections/Sterile Solutions - Traded 135 1.63

Bulk Drugs - Traded 121.8 1.47

Creams 108.73 1.31

Others - Traded 54.81 0.66

Aerosols/Inhalation Devices - Traded 49.66 0.6

Others 49.03 0.59

Creams - Traded 45.46 0.55


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5. Financial InformationConsolidated Balance Sheet of

Cipla

------------------- in Rs. Cr. -------------------

Mar '13 Mar '12 Mar '11 Mar '10 Mar '0912 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 160.58 160.58 160.58 160.58 155.46

Equity Share Capital 160.58 160.58 160.58 160.58 155.46

Share Application Money 0 0 0 0 0

Preference Share Capital 0 0 0 0 0

Init. Contribution Settler 0 0 0 0 0Preference Share ApplicationMoney 0 0 0 0 0

Employee Stock Opiton 0 0 0 0 0Reserves 8,858.10 7,478.35 6,496.58 5,741.02 4,183.37

Revaluation Reserves 0 0 8.97 8.97 8.97

Networth 9,018.68 7,638.93 6,666.13 5,910.57 4,347.80

Secured Loans 9.49 10 47.95 0.41 2.79

Unsecured Loans 957.44 3.46 523.94 4.66 937.45

Total Debt 966.93 13.46 571.89 5.07 940.24

Minority Interest 0 0 0 0 0

Policy Holders Funds 0 0 0 0 0

Group Share in Joint Venture 0 0 0 0 0

Total Liabilities 9,985.61 7,652.39 7,238.02 5,915.64 5,288.04

Application Of Funds

Gross Block 5,317.52 4,626.90 4,241.10 2,897.26 2,693.29

Less: Accum. Depreciation 1,707.55 1,411.11 1,146.54 886.09 700.8

Net Block 3,609.97 3,215.79 3,094.56 2,011.17 1,992.49

Capital Work in Progress 377.79 371.17 285.34 684.24 366.32

Investments 2,532.44 1,268.81 590.4 246.41 80.05

Inventories 2,387.07 1,850.08 1,906.16 1,512.58 1,398.32

Sundry Debtors 1,668.84 1,553.58 1,490.82 1,566.63 1,852.86

Cash and Bank Balance 143.01 90.46 95.56 61.54 53.23

Total Current Assets 4,198.92 3,494.12 3,492.54 3,140.75 3,304.41

Loans and Advances 938.65 1,000.36 1,161.93 1,226.04 1,113.34

Fixed Deposits 0 0 5.46 0.52 0.16

Total CA, Loans & Advances 5,137.57 4,494.48 4,659.93 4,367.31 4,417.91

Deffered Credit 0 0 0 0 0

Current Liabilities 1,389.79 1,454.63 1,171.20 1,177.12 1,177.02


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Mar '13 Mar '12 Mar '11 Mar '10 Mar '09

12 mths 12 mths 12 mths 12 mths 12 mths

Provisions 282.37 243.23 221.01 216.37 391.71

Total CL & Provisions 1,672.16 1,697.86 1,392.21 1,393.49 1,568.73Net Current Assets 3,465.41 2,796.62 3,267.72 2,973.82 2,849.18


Group Share in Joint Venture 0 0 0 0 0

Miscellaneous Expenses 0 0 0 0 0

Total Assets 9,985.61 7,652.39 7,238.02 5,915.64 5,288.04

Contingent Liabilities 4,080.64 510.96 542.35 423.87 364.54

Book Value (Rs) 112.32 95.14 82.91 73.5 55.82


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Consolidated Profit & Loss account of Cipla

------------------- in Rs. Cr. -------------------

Mar '13 Mar '12 Mar '11 Mar '10 Mar '09

12 mths 12 mths 12 mths 12 mths 12 mths

Income

Sales Turnover 8,279.33 7,128.82 6,371.32 5,677.07 5,295.33

Excise Duty 0 108.11 49.52 52.16 61.04

Net Sales 8,279.33 7,020.71 6,321.80 5,624.91 5,234.29

Other Income 261.91 139.52 99.99 109.8 -143.86

Stock Adjustments 290.6 -5.65 125.89 184.09 113.55

Total Income 8,831.84 7,154.58 6,547.68 5,918.80 5,203.98

Expenditure

Raw Materials 3,335.01 2,831.12 2,979.09 2,687.54 2,513.11

Power & Fuel Cost 233.12 235.35 179.33 92.15 91.71

Employee Cost 1,036.26 772.52 489.45 319.1 271.38

Other Manufacturing Expenses 0 268.95 260.27 259.67 262.65

Selling and Admin Expenses 0 0 1,016.49 868.03 887.33

Miscellaneous Expenses 1,767.69 1,248.27 183.31 182.72 76.94

Preoperative Exp Capitalised 0 0 0 0 0

Total Expenses 6,372.08 5,356.21 5,107.94 4,409.21 4,103.12

Operating Profit 2,197.85 1,658.85 1,339.75 1,399.79 1,244.72

PBDIT 2,459.76 1,798.37 1,439.74 1,509.59 1,100.86

Interest 33.91 38.34 23.1 28.3 52.23

PBDT 2,425.85 1,760.03 1,416.64 1,481.29 1,048.63

Depreciation 330.48 312.22 254.15 167.07 151.79

Other Written Off 0 0 0 0 0

Profit Before Tax 2,095.37 1,447.81 1,162.49 1,314.22 896.84

Extra-ordinary items 0 0 -0.14 11.87 -1.32

PBT (Post Extra-ord Items) 2,095.37 1,447.81 1,162.35 1,326.09 895.52

Tax 544.31 306.51 195.22 243.5 124.5

Reported Net Profit 1,551.06 1,141.30 967.13 1,082.59 771.02


Share Of P/L Of Associates 6.21 -2.94 -22.44 0 0

Net P/L After Minority Interest & Share Of Associates 1,505.08 1,144.24 989.71 975.72 772.34

Total Value Addition 3,037.07 2,525.09 2,128.85 1,721.67 1,590.01

Preference Dividend 0 0 0 0 0

Equity Dividend 160.58 160.58 224.81 160.58 155.46

Corporate Dividend Tax 27.29 26.05 36.72 26.67 26.42Per share data (annualised)

Shares in issue (lakhs) 8,029.21 8,029.21 8,029.21 8,029.21 7,772.91

Earning Per Share (Rs) 19.32 14.21 12.05 13.48 9.92

Equity Dividend (%) 0 0 0 0 0

Book Value (Rs) 112.32 95.14 82.91 73.5 55.82


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SALES

YEAR END

SALES(Rs in

crores)

31st mar '09 5,295.3331st mar '10 5,677.07

31st mar '11 6,371.32

31st mar '12 7,128.82

31st mar '13 8,279.33

Sales trend

Year 2008-09:

The Companys turnover recorded a 22 per cent growth and crossed the Rs.5000 crore

milestones. While exports grew by 30 per cent, the domestic sales grew by 15 per cent.

The Company introduced many new drugs and formulations during the year. Some of the

significant introductions were:

Abamune L (abacavir and lamivudine tablets)new NRTI combination for HIV/AIDS. Aprepit (aprepitant capsules)new antiemetic for prevention of nausea and vomiting in

cancer chemotherapy

0.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

8,000.00

9,000.00

31st mar

'09

31st mar

'10

31st mar

'11

31st mar

'12

31st mar

'13

5,295.335,677.07

6,371.327,128.82

8,279.33

SALES(Rs in crores)


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Bondria (ibandronate tablets and injection) for osteoporosis and metastatic bonediseases

Cold Spray (azelastine and budesonide spray)combination spray for allergic rhinitis Gefticip (gefitinib tablets)for advanced and metastatic lung cancer

Year 2009-10:

The Company achieved an overall growth of about 8 per cent in turnover during the year.

Domestic growth was steady at 10 per cent. According to ORG-IMS, Cipla remained the leader

in the domestic market, as on 31st March 2010 with a market share of 5.38 per cent. However,

growth in formulation exports was affected due to various factors including non-

availability of important raw materials, lower tender business in anti-retroviral and

unfavorable movements in foreign exchange rate.Significant introductions of new drugs and formulations during the year:

Advent Forte (amoxycillin and clavulanic acid syrup) combination antibiotic fordifficult infections

Antiflu (oseltamivir capsules and syrup)first oral drug for bird flu Bosentas (bosentan tablets) first specific therapy for pulmonary arterial

hypertension

Cinmove (cinitapride tablets) new anti-motility drug for gastrointestinaldisorders

Clearnoz NS (sodium chloride nasal spray)saline spray for dry nose

Year 2010-11:

During the year under review, the Companys total income from operations increased by

12 per cent. Domestic turnover rose by 12 per cent while export income went up by 16 per cent.

Significant introductions of new drugs and formulations during the year:

Entavir (entecavir tablets) - antiviral for hepatitis B Flosoft (fluorometholone acetate ophthalmic suspension) - topical steroid for eye

inflammation

Panstal (pancreatin capsules) - digestive enzyme for pancreatic insufficiency Phosome (liposomal amphotericin injection) - high potency antifungal in a new targeted

drug delivery system


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Prandial M (voglibose and metformin tablets) - combination antidiabetic

Year 2011-12:

The Companys revenue from operations during the financial year 2011-12 amounted to

Rs 7,128.82 crore against Rs 6,371.32 Crore in the previous year recording a growth of more

than 10 percent.


Adgainvital nutritional supplement for hair loss Capnea (caffeine citrate injection and oral solution)for apnoea of prematurity in infants Flavocip (flavoxate hydrochloride tablets)for relief of spasm of the urinary tract Ivabeat (ivabradine tablets) novel drug for coronary artery disease and chronic heart

failure Lumet (artemether and lumefantrine tablets)combination drug for acute malaria

Year 2012-13:

The Companys revenue from operations during the financial year 2012-13 amounted to

8,279.33 crore against Rs 7,128.82 crore in the previous year recording a growth of more than 17

percent. The domestic turnover increased by more than 14 percent, from Rs 3,213 crore in the

previous financial year to Rs 3,681 crore in the financial year under review. Total exports

increased by about 20 percent during the year to Rs 4,426 crore.


Amlopres VL (amlodipine and valsartan tablets) combination therapy for effectivehypertension management

Cinmove OD (cinitapride sustained-release tablets) for gastrointestinal motilityproblems and acid reflux

Mupinase (mupirocin ointment)for bacterial skin infections Painil SP (paracetamol, aceclofenac and serratiopeptidase tablets) a triple drug

combination for pain and inflammation

Tugain (minoxidil foam)innovative foam formulation for hair loss in males.


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EXPENSES

YEAR END

EXPENSES (Rs in

crores)

31st mar '09 4,103.12

31st mar '10 4,409.21

31st mar '11 5,107.94

31st mar '12 5,356.21

31st mar '13 6,372.08

Expenses trend:

Year 2008-09:

The Company has invested about Rs.1900 crore in fixed assets. The construction work at

the Companys Rs.750 crore Special Economic Zone (SEZ) project for pharmaceutical

formulations, at Indore, Madhya Pradesh, began in full swing.

Year 2009-10:

The Company invested about Rs.250 crore in a new R&D and administration facility at

Vikhroli, Mumbai. Cipla also focused on setting up API facilities at Bengaluru for anti-cancer

0.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

31st mar

'09

31st mar

'10

31st mar

'11

31st mar

'12

31st mar

'13

4,103.124,409.21

5,107.94 5,356.21

6,372.08

EXPENSES (Rs in crores)


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products. The Company upgraded its API facilities at Patalganga to scale-up production. The

total investment for these two projects was estimated to be about Rs.200 crore. In May 2010,

Cipla acquired an undertaking for Rs.30.64 crore, by way of a slump sale arrangement. The

undertaking had a manufacturing facility, approved by US FDA and WHO, for APIs and

intermediates. It is located at Kurkumbh (Pune district).

Year 2010-11:

In April 2010, the Company commenced commercial production of pharmaceutical

formulations at the Special Economic Zone (SEZ) project, at Indore, Madhya Pradesh. This

project includes facilities for the manufacture of aerosols, respules, liquid orals, pre-filled

syringes (PFS), nasal sprays, large volume parenterals (LVP), eye drops, tablets and capsules.

The total investment for this project is about Rs 900 crore.

The Company focused setting up API facilities at Bengaluru and Kurkumbh. It also

upgraded the API facilities at Patalganga. The total investment for these projects was about 400

crore.

Year 2011-12:

The Company is setting up additional R&D facilities at Vikhroli The Company is also

setting up API facilities at Patalganga, Bengaluru and Kurkumbh which are expected to be

completed in 2012-13. The total investment for these projects is estimated to be around Rs 500

crore.

Year 2012-13:

In order to expand and consolidate its Head Office operations, the Company has acquired

office space in Peninsula Business Park in Lower Parel, Mumbai for Rs 294 crore. The Company

completed the acquisition of 100% of share capital of Cipla Medpro in South Africa, at ZAR 10

per share amounting to a total investment of Rs 2,707 crore.


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NET PROFITS

YEAR END

PROFITS (Rs in

crores)

31st mar '09 771.0231st mar '10 1,082.59

31st mar '11 967.13

31st mar '12 1,141.30

31st mar '13 1,551.06

Profits trend

Year 2008-09:

Technical fees fetched Rs.218 crore, marking a significant 42 per cent growth over the

previous year. However, forward contracts entered into to hedge the Companys foreign

exchange business had an impact on net profit growth.

Year 2009-10:

During the year, positive signs had begun to emerge in many countries, signifying

recovery from the general recession and economic crisis. The recovery of the Indian economy

seemed to be on track with GDP predicted to grow to higher levels. Industrial recovery also

gathered momentum in recent months. The Indian pharmaceutical industry maintained its

momentum and registered a growth of about 18 per cent, according to ORG-IMS statistics.

0.00

200.00

400.00

600.00

800.00

1,000.001,200.00

1,400.00

1,600.00

31st mar

'09

31st mar

'10

31st mar

'11

31st mar

'12

31st mar

'13

771.02

1,082.59

967.13

1,141.30

1,551.06

PROFITS (Rs in crores)


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Year 2010-11:

Reported net profit for the year was Rs 967.13crore compared to Rs 1,082.59crore last

year. This year, there was a dip in operating margins of about 3 per cent, as a percentage of total

revenue. This was mainly due to lower technical fees (Rs 60 crore compared to Rs 150 crore last

year), as the development stage of several projects reached completion and the products were

either been commercially launched or were launched by the Companys partners. Another major

reason for the decline was that the Indore SEZ factory was in its first year of operations and it

still had to reach its optimum capacity levels. Besides, the Rupee has appreciated compared to

the US dollar which has in turn reduced earnings by about 4 per cent.

Year 2011-12:

Total exports increased by 10 percent during the year. Profit after tax of the Company

increased by 17 percent to Rs 1,141.30crore from Rs 967.13crore in the previous financial year.

During the year under review, operating margin (as a percentage of total revenue) increased by

about 2 percent. This was primarily due to reduction in material cost from 47 percent to 42

percent on account of improved realizations, reduction in input costs of certain product

categories and changes in the product mix.

Year 2012-13:

During the year under review, operating margin increased by 34 percent. This was

primarily due to reduction in material cost on account of improved realizations, changes in the

product mix and higher contribution of Escitalopram (a drug used for treating depression &

anxiety disorder) in the US. As a result, profit increased by more than 34 percent to Rs 1,551.06

crore from Rs 1,141.30 crore in the previous financial year.


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6. Corporate Governance6.1 BOARD OF DIRECTORS: Executive Directors

Dr Y. K. Hamied*

Mr. M. K. Hamied

Mr. S. Radhakrishnan

Non-Executive/Non Independent Director

Dr. Y. K. Hamied*

Additional DirectorMr. Subhanu Saxena

(Mr. Subhanu Saxena was appointed as an Additional Director with effect from 16th July

2013 and holds office up to the date of the ensuing Annual General Meeting.)

Non-Executive/Independent DirectorsDr. H. R. Manchanda

Mr. Ramesh Shroff

Mr. V. C. Kotwal

Mr. M. R. Raghavan

Mr. Pankaj Patel

Dr. Ranjan Pai

*Retired as Managing Director effective 31st March 2013 and continues to be the Chairman in a

non-executive role effective 1st April 2013.


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Seven Board Meetings were held during the financial year 2012-13. The dates on whichthe meetings were held are: 10th May 2012; 7th June 2012; 31st July 2012; 17th August

2012; 5th November 2012; 6th February 2013 and 27th February 2013.

None of the Directors is related to each other except for Dr. Y.K. Hamied and Mr. M.K.Hamied.

Shareholding of present Non-Executive Directors:o As on 31st March 2013, Dr. H.R. Manchanda, Mr. Ramesh Shroff and Dr. Ranjan

Pai - Non-Executive Directors held 200000, 250 and 1010 equity shares

respectively in the share capital of the Company. None of the other Non-

Executive Directors hold any equity shares of the Company.

6.2 AUDIT COMMITTEEThe Audit Committee was constituted on 4th September 2000 in compliance with

the requirements of Clause 49 of the Listing Agreement. The Audit Committee

currently comprises: Mr. Ramesh Shroff - Chairman, Mr. M.R. Raghavan - Member

and Mr. S. Radhakrishnan - Member.

The Chief Financial Officer and other functional managers along with Internal

Auditors, Statutory Auditors and Cost Auditor are invited to attend the meetings of

the Audit Committee, as and when necessary. The Company Secretary acts as

Secretary to the Committee. The Audit Committee discharges such duties and

functions generally indicated in Clause 49 of the Listing Agreement with the Stock

Exchanges and also such other functions as may be specifically delegated to it by the

Board from time to time.

o Meetings and attendance during the financial year 2012-13:The meetings of the Audit Committee were held on 10th May 2012; 7th June

2012; 31st July 2012; 5th November 2012 and 6th February 2013 during the financial

year 2012-13. Mr. M.R. Raghavan attended four meetings during the year. Mr.Ramesh Shroff and Mr. S. Radhakrishnan attended all five meetings.


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6.3 INVESTORS` GRIEVANCE COMMITTEEo The Company has an Investors` Grievance Committee to attend to and address the

grievances of the Shareholders`/Investors` as and when received. The Committee

currently comprises: Dr. H.R. Manchanda - Chairman, Mr. M.K. Hamied -

Member and Mr. Pankaj Patel - Member.

o During the financial year 2012-13, the Committee met on 10th May 2012; 31stJuly 2012; 5th November 2012 and 6th February 2013.

o Mr. Mital Sanghvi, Company Secretary acts as the Company`s ComplianceOfficer. The Company attends to the shareholders`/investors`

grievances/correspondence expeditiously. During the year under review, 66

investor grievances were received and all of them have been resolved

6.4 GENERAL BODY MEETINGSo The Annual General Meetings of the Company for the financial year 2009-10 and

2010-11 were held at Amar Gian Grover Auditorium, Lala Lajpat Rai Marg, Haji

Ali, Mumbai-400 034 at 3.00 p.m.

o The Annual General Meeting of the Company for the financial year 2011-12 washeld at Rama Watumull Auditorium, K.C. College, Dinshaw Wacha Road,

Churchgate, Mumbai-400 020 at 3.00 p.m.

o Special Resolution granting consent to the holding of office or place of profit byMr. Kamil Hamied, relative of Mr. M.K. Hamied, Managing Director of the

Company as member of management team was passed at the Annual General

Meeting of the Company held on 25th August 2010.

o Special Resolution granting consent to the holding of office or place of profit byMrs. Samina Vaziralli, relative of Mr. M.K. Hamied, Managing Director of the

Company as member of management team was passed at the Annual General

Meeting of the Company held on 25th August 2011.o No resolution was approved by the members through postal ballot during the

financial year ended 31st March 2013. In April 2013, Company obtained approval

of the members through postal ballot for issuance of 10, 00,000 stock options to

Mr. Subhanu Saxena, Chief Executive Officer. Mr. B. Narasimhan, Practising

Company Secretary was appointed as Scrutinizer for conducting the postal ballot


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process. The said special resolution for issuance of stock options to Mr. Subhanu

Saxena was passed with requisite majority.

6.5 MEANS OF COMMUNICATIONo The half-yearly/quarterly results are published in the newspapers (Mumbai

edition) and are not being sent to each household of shareholders.

o The results are usually published in the following newspapers: The EconomicTimes; Navbharat Times; The Financial Express; Business Standard; The Hindu

Business Line; Sakaal.

o The annual/half-yearly/quarterly results and other official news releases aredisplayed on the website of the Company -www.cipla.com

o The Management Discussion and Analysis Report forms part of the Directors`Report.
http://www.cipla.com/http://www.cipla.com/http://www.cipla.com/http://www.cipla.com/


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8. ConclusionThus we conclude by the statements that there has been a modest improvement in the

global financial condition ensuring reduced short term risks; however, the overall financial

climate has not picked up the momentum of recovery. From a regional outlook, the USexperienced a moderate growth, while the Eurozone continued to be in a vulnerable position

with high risks of banking system meltdown and unresolved debt crisis issues. The emerging

economies such as the BRIC countries did not pace up to last fiscal years growth; however,

other emerging nations including developing Asia showed promising growth. The data from

the Central Statistics Office affirmed the Indian GDP Growth rate at a decade lowest of 5%

for the fiscal year 2012-13 on account of weakness in investment, significant deceleration in

household consumption and sluggish exports. The declining growth warranted the

government to take immediate steps to curtail inflation and restore fiscal health. The Indian

economy is expected to gradually recover, with a projected 6.4% growth for 2013-14.

However, the financial climate will continue to face various challenges in the coming year.

Despite the fragile economic environment, the Indian pharmaceutical market grew at a

healthy 10%. This robustness in performance is a testimony to the measures taken in

improving healthcare standards. Factors that also bolstered the Indian pharmaceuticals

performance include strong exports to the US and the depreciation of the Rupee against the

Dollar. The positive growth is expected to be a long-term phenomenon in the industry,

promising a CAGR of 14-16% in the next 5 years.


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9. Referenceswww.crisilresearch.com

www.wikipedia.com

www.aceanalyser.com

www.cipla.com
http://www.crisilresearch.com/http://www.crisilresearch.com/http://www.wikipedia.com/http://www.cipla.com/http://www.cipla.com/http://www.cipla.com/http://www.wikipedia.com/http://www.crisilresearch.com/

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