Coperative Strategy

 
a. Industry Structure and Development
 
The global pharmaceutical market is estimated to be about US$ 1.3 trillion and was hitherto
comfortably growing at a CAGR of about 4%. However, it is to be seen how the Covid -19
pandemic, which has caused unprecedented economic disruption and has put tremendous
pressure on healthcare system globally, will impact this industry going forward.
 
Though, the pharmaceutical industry is developing at a rapid pace, this growth wont come
easily for the industry that is heavily influenced by healthcare reforms, cost pressure,
economic and political fluidity, public demand for lower cost treatment, economic
consolidation, increased competition and changing regulatory landscape with increased
scrutiny.
 
The market growth for pharmaceuticals globally was led by 1% plus annual global increase in
the population and ageing at the same time. The increasing urbanization and growing middle
income population making drugs available and affordable for more people has also lead to this
market growth. As population ages due to increasing life expectancy, people require
pharmaceuticals to treat their chronic illness, spurring demand for industry products in future.
 
Thanks to advances in science and technology, the research based pharmaceutical industry is
entering an exciting new era in medicine development. The research methods are evolving and
the innovative pharmaceutical industry aims to turn fundamental research into innovative
treatments that are widely available and accessible to patients.
 
b. Outlook, Risks and Concerns
 
The Indian pharmaceuticals industry is globally respected and is one of the most successful
industries in the country. It has contributed significantly to the global healthcare by ensuring
quality, accessible and affordable generic medicines around the globe. It has also immensely
contributed to Indias economic growth.
 
Although economic woes of certain geographies are impending the pharmaceutical market
growth, the long term outlook for the industry remains positive. The industry growth is driven
by ageing population and ever growing middle income group in emerging economies boosting
demand for the pharmaceuticals. Additionally, the emergence of new viruses, the latest being
SARS-CoV-2 and drug resistant infections, biological agents, immune therapies, etc. will spur
research and development activities providing the industry with more products in their drug
pipeline with revenue and growth streams.
 
The Indian pharmaceuticals market is the third largest in terms of volume. India is the biggest
provider of generic medications internationally and enjoys a significant position in the world
pharmaceuticals sector. The country also has a huge talent pool and scientists having the
capability to steer this industry forward to a much greater degree. The cost efficiency also
continues to create opportunities for Indian pharmaceutical companies in the emerging global
economies. The Indian pharmaceutical industry is expected to outperform the global
pharmaceutical industry and grow in the next couple of years and thereby emerge as one of
the top 10 pharmaceutical market globally by absolute size. India is also the largest provider
of vaccines and generic drugs in the global market.
 
I ndian pharmaceutical companies are focusing on global generic and API business, R&D
activities, contract research and manufacturing alliances. India is also fast emerging as a
preferred pharmaceuticals manufacturing location. Increasing use of pharmaceutical generics
in developed markets to reduce healthcare cost will also provide attractive growth
opportunities to Indian generic formulations manufacturers and thus Indian pharmaceutical
industry is poised for an accelerated growth in the coming years.
 
However, poor public healthcare funding and infrastructure, low per capita consumption of
medicines in developing and under developed countries including India, currency fluctuations,
regulatory issues, government mandated price controls, inflation and resultant all round
increase in input costs are few causes of concern.
 
During the year under report, there was no change in the nature of Companys business.
 
c. Financial Performance and Operations Review
 
During the financial year under report, the Company registered on a standalone basis a total
income of 4432.12 crores as against 3687.74 crores in the previous year, a growth of 20%. On
a consolidated basis, the total income of the Company has increased by 23% to 4715.71 crores
as against 3830.86 crores in the previous financial year.
 
During the financial year under report, the Earnings before interest, depreciation and taxation
on a standalone basis amounted to 979.45 crores as against 747.76 crores in the previous
financial year. The operations have resulted in a net profit of 652.46 crores during the
financial year under report as against 454.91 crores in the previous financial year, a growth of
43%.
 
On a consolidated basis, the Earnings before interest, depreciation and taxation amounted to
965.89 crores as against 747.75 crores in the previous financial year. The consolidated
operations have resulted in a net profit of 603.56 crores during the financial year under report
as against 442.22 crores in the previous financial year, a growth of 36%.
 
The Companys formulations manufacturing sites at Silvassa and SEZ Indore and APIs
manufacturing site at Ratlam continue to be under US FDA import alert. However, the US
FDA has recently given exemption from import alert to APIs Chloroquine Phosphate and
Hydroxycholoroquine Sulphate manufactured at the Companys Ratlam APIs manufacturing
site and formulations of Hydroxychloroquine Sulphate manufactured at Companys SEZ
Indore and Piparia (Silvassa) manufacturing sites.
 
The US FDA recently inspected the Companys formulations manufacturing unit situated at
Piparia (Silvassa). This inspection resulted into issue of 3 observations in Form 483 by US
FDA. Your Company has submitted comprehensive response to these observations to the US
FDA. The Company is awaiting re-inspection by US FDA of its other two manufacturing
facilities which are under import alert.
 
The Company has implemented comprehensive remedial measures at all its manufacturing
sites to ensure quality and regulatory compliances. These remedial measures included review
of all processes and procedures, revamping of training system, recruitment of senior quality
personnel as well as automation of quality control laboratories. The Company is committed to
its philosophy of highest quality in manufacturing, operations, systems, integrity and cGMP
culture.
 
Except US FDA import alert on three of its manufacturing sites, none of the Companys
manufacturing sites have any outstanding regulatory or compliance issues with any other
regulatory agency.

Policies of Ipca laboratories

o  Dividend Distribution Policy

o  Policy on Materiality
o  Policy for Preservation of Documents
o  Code of Practices and Procedures for Fair Disclosure of Unpublished Price
Sensitive Information
o  Criteria for selection of Candidates for Senior Management and Members on the
Board
o  Corporate Social Responsibility Policy
o  Evaluation of Directors
o  Model Code of Conduct to Regulate Monitor and Report Trading by Insiders
o  Policy on Board Diversity of the Company
o  Policy on Material Subsidiaries
o  Risk Management Policy
o  Remuneration Policy
o  Related Party Transactions