MEDI CAPS LIMITED ANNUAL REPORT 2007-2008 CHAIRMAN'S SPEECH Dear Members, I take immense pleasure in welcoming you all to our 25th Annual General Meeting of Medi-Caps Limited. At the outset I appreciate your abiding interest and faith in the Company and am very pleased to have here you amongst us. Business Operations:- I take pleasure in informing you that the Company has generated a quantum profit of Rs.1405.28 lacs as compared to last year Rs.821.80 lacs, despite of facing tough market scenario of price reduction and machine shutdown, only due to sound fundamental and well planning of management from investment generating a profit of Rs.1290.22 lacs in comparison of last year Rs.582.23 lacs. The Company had to face a steep price reduction due to which turnover declined from Rs.2076.27 lacs to Rs.2030.41 lacs. The Company has taken substantial measures for up-gradation of machine due to which machine was shut down for up-gradation resulting a loss of production from 35354.00 lacs to 35099.00 lacs. Despite of above Company has achieved a substantial profit and in order to reward the Share holders , Board of Directors has recommended a dividend of 15% for the year 2007-08 (Previous year 15%) and proposed to utilize remaining surplus for future business activities. Your company is making a tremendous effort to overcome last year's deficiency and resulting to which Company has already achieved a turnover of Rs.997.05 lacs in the initial 5 months operation up to August 2008, thus showing an upward trend. EQUITY CAPITAL REVIEW: Looking into the earning per share i.e. Rs.45.08( previous year Rs.26.36) during the year under review, the book value of the equity shares of Rs.10/- has been Rs.164.49 per share (previous year Rs.121.33) as at 31' March 2008, therefore presently the equity shares of the Company are still under valued as per norms and it has good potential future for investments in the Company on long term basis. The Company's equity shares are regularly traded at the Bombay Stock Exchange. FINANCE AND CAPITAL: I am pleased to inform that your Company is not having any loan liabilities and is having adequate resources to meet out its working capital and long term financial requirements. Moreover, surplus funds being invested in the mutual funds and capital market to maximize the net worth of the Company. We have also made a joint venture agreement with Mission Viva Care Ltd for setting up a softgel encapsulation facility at Special Economic Zone, Pharma Zone, Pithampur. The total estimated project cost is 25.00 crores. The facility is already under construction and is estimated to be completed by Feb. 2009. EXPORT: Due to stiff international competition and government policies for patent, the export is slightly lower than previous year. Further that due to strong position of rupees as compared to US $, the realization on export as well as profitability on export turnover was also affected. The Company is continuously making efforts to tap another fresh market in the export front. CORPORATE GOVERNANCE: As reported in the 25th Directors Report, your Company has complied with the requirements of Clause 49 of the Listing Agreements, relating to the Corporate Governance. The Company is having independent professional agency for the share transfer for the Electronic as well in physical mode. As at 31st March, 2008, 1643945 shares were in D -Mat form which is 52.73% of the total paid up share capital of the Company. I would also like to express my deepest sense of gratitude to all the shareholders, Govt. Agencies and the employees of the Company for their cooperation and support extended to the management of the Company. The audited Balance Sheet as at 31st March, 2008 along with Director's Report and Auditors Report thereon, are with you for quite time now, and with your permission, I take them as read. Now with your kind permission, I proceed to the agenda items of the notice for seeking your necessary approvals. For MEDI CAPS LIMITED R.C. MITTAL CHAIRMAN CUM MANAGING DIRECTOR