Caplin Point Laboratories Ltd

I am very happy to share that your Company has delivered yet another year of stellar performance during FY 2023-24. Riding on our hard work and sustained efforts, your Company was able to achieve its highest ever operating turnover of '1694 Crores during the year.

Further, it is my privilege to write to you and present the Annual Report for FY 2023-24. I hope this communication finds you in good health and spirits.

MACRO BUSINESS ENVIRONMENT

The world is facing a period of uncertainty, where we have moved on from the pandemic to the ongoing geopolitical tensions. On the economic front, despite initial recession fears, the global economy has displayed resilience, avoiding major recessions or significant spikes in unemployment. Nevertheless, the outlook for global GDP growth remains subdued reflecting the ongoing challenges and uncertainties. Amidst this global backdrop, India is emerging as a bright spot, defining its role in the new world order. The Indian economy has shown resilience and adaptability, even in the face of global headwinds.

The next leg of growth in pharma necessitates skill advancement, the use of innovation and technology, and the establishment of a strong supply chain. The Government has taken several measures to create and nurture an ecosystem that promotes innovation. This is reflected in the setting up of centres for excellence to promote collaborative research in the pharmaceutical sector, and in artificial intelligence, including, for the health sector. The recently introduced Promotion of Research and

Innovation in Pharma MedTech Sector is expected to herald a transformation in the pharmaceutical sector towards innovation.

FINANCIAL PERFORMANCE

I am very happy to share that your Company has delivered yet another year of stellar performance during FY 2023-24. Riding on our hard work and sustained efforts, your Company was able to achieve its highest ever operating turnover of '1694 Crores during the year. Further;

• Profit after Tax (PAT) at '461 Crores, was up 22% Y-o-Y

• Cash Reserves at '916 Crores, saw an increase of '144 Crores Y-o-Y

• Cash flow from Operations at '318 Crores, witnessed an increase of '47 Crores Y-o-Y

We have allocated an overall Capex budget of approximately '600-650 Crores for the investment projects, most of which are nearing completion. The intended Capex aims to enhance existing production capacities, widen the product range, and achieve backward integration for a majority of the products. The Capex will be financed solely through internal accruals, and the Company will remain net cash positive throughout the process.

When you are in a state of uniqueness, you are allowing your soul to express itself. You allow others to see a little bit of what makes up your soul. And when people see this, they want more and want to be a part of it. They feel like they can learn from you because you have something unique that they don't have. This uniqueness can be a source of attraction that is magnetic to others who are also unique themselves. You may attract people who have the same purpose as you in life, so they can work together towards something greater than they could do by themselves. Your Company has always been uniquely placed in terms of the geographies it operates or the business model is has carved for itself.

Your Company has shown benchmark growth numbers across all parameters in the last decade, and we aim to continue the same in the next decade.

As we embark on a journey into the larger markets of Latam, US, and other regulated markets, we aim to stick to our proven strategy of catering to the Bottom of the Pyramid, with an end-to- end business model. This next trajectory of growth will be supported by focused investment into technology in products, facilities and markets. We remain committed to driving sustainable growth with strong cash flows.

"The greatest danger is not that we aim too high and miss it, but that we aim too low and reach it."

- Michael Angelo

At Caplin, we charted a different and unique path which no other Pharmaceutical Company was even looking for. When the chips were down and we were looking at an uncertain future, we dared to enter one of the most difficult markets of Africa and Latin America and due to our hard work and perseverance, today Caplin is among leaders and driving the business backbone from there.

We focused on staying closer to the customers by acquiring, controlling and integrating distribution network, which made us different from our competitors and provided a definite path to sustainable and profitable growth.

"As a company we focus on Good Distribution Practices and fondly call it GDP

- A mainstay of our success"

Building on to our strong foundation, this is the right time to directly approach the US market under our own brand name.

As a company we have always been very focused towards having control over the marketing end of things, which is what our entire Latin America business has been built around. Our newly set up, subsidiary in USA, namely Caplin Steriles U.S.A Inc. is making very good progress at this point. We have already received 25 state licenses out of the all 50 states we applied for as on 31st March, 2024. We feel confident that shortly we will be able to secure licenses for all the 50 states. We are hopeful that by Q3 of FY 2024-25, we will start selling our products directly in the U. S. market.

"Henceforth, our game will be that of marathon and not sprint."

As a corporate citizen, Caplin always follows environmental, social and sustainability best practices for the best of the stakeholders' interest. We are putting our best foot forward in terms of ensuring environmentally friendly operations in all our units. We are also focusing on empowering women in the surrounding areas of our facilities by giving them more and more of fair and profitable employment opportunities. We are investing in setting up a healthcare facility in a rural village in Thiruvallur district in the vicinity of the factory as part of our CSR initiatives. This will be the first facility which will concentrate on breast cancer diagnosis and treatment (through Mammogram), cardiac arrest, stroke etc. This healthcare facility is expected to cater to the demand for quality healthcare with little or no cost to the people at the bottom of the pyramid.

We are consistently striving to leave least possible carbon footprint in form of industrial waste and natural resource usage.

"We are and will always be a contributor and not a polluter."

We have now embarked on the next stage of growth trajectory and the Caplin team is fully committed to continue to build on the momentum over the coming year. Our success is made possible by the hard work and dedication of our teams, the trust of our investors, and the guidance of our stakeholders. We remain committed to quality, safety, compliance and operational excellence.

I would like to express my sincere gratitude to the Board for its continued guidance and support. I also convey my heartfelt appreciation for all our business partners, vendors and other business associates who have firmly stood by your Company. We deeply value the faith, guidance and support of all our shareholders and will continue to strive for greater heights and excellence in the years to come.

Warm regards,