Opto Circuits India

Dear Shareholders,
 
 We are in the ninth year of a very special relationship that has
 created Indias only indigenous medical device Company addressing
 patient safety and interventions in more than 10,000 healthcare
 facilities in 56 countries. I am proud to be your partner and custodian
 of a corporate legacy that, in the span of a decade, holds 35
 international patents and offers nearly 100 products across 12 medical
 applications covering significant areas of hospital care and recovery.
 Your Company, by virtue of its segmented product portfolio, is also the
 only one of its kind to develop and market a large base of non invasive
 monitoring equipment along with strong and growing brands in minimally
 invasive cardiovascular and peripheral devices.  The Opto Group, today,
 reflects a synergistic mix of developmental capabilities, manufacturing
 excellence, distribution reach and brand equity.
 
 Some small and some giant steps, weve moved from merely making sensors
 for Fortune 500 companies in the year 2000 to assertively developing
 and selling our own brand of technology-intensive and industry
 comparable medical devices in the year 2009. Weve also progressed from
 monitoring patients on vital signs to now treating serious diseases in
 specialized therapeutic facilities. Our touch points in hospitals go
 beyond general practitioners and their nursing staff to include such
 specialists like interventional cardiologists, radiologists,
 anesthetists and urologists. Weve modeled ourselves to include the
 latest innovations and discoveries in, both, opto- electronics and
 biotechnology. Over the years, weve cast ourselves to benefit from our
 local roots whilst growing wings to attain global success.
 
 We acquired 29 year-old Wisconsin, US-based Criticare Systems Inc.
 (CSI) in April 2008 and thus started the last fiscal welcoming a new
 member into our family; this was our eighth acquisition. Post the
 acquisition, we charted three main goals for the year: a) increase
 operating margins, b) expand geographical reach of the products and c)
 develop and launch new products.
 
 As planned, we are in the process of moving various CSI products to
 India in a phased manner to achieve substantial cost savings. We
 adopted a leaner Management approach, further cutting down costs and
 increasing efficiencies, resulting in significant improvements in the
 operating results of the Company.
 
 We bundled our products and used Mediaids distribution reach to bring
 back the CSI brand into its erstwhile markets while also introducing
 the range into high acuity and emerging anesthesia monitoring markets.
 With a renewed focus and fresh enthusiasm, CSI participated in various
 tradeshows around the world including Arab Health in Dubai, UAE and
 Medica in Dusseldorf, Germany.
 
 Over the months, we worked with CSIs team of engineers to develop
 modular - scalable monitors with contemporary features to go with
 modern-day health facilities. CSI launched two new USFDA approved and
 CE certified vital signs patient monitors - eQuality and nCompass, both
 developed in-house. CSI also converted a bulky bedside gas bench into a
 portable module that can be used in CSIs range of multi parameter
 monitors and by systems integrator companies in their own branded
 equipment. Additionally, OCI developed sensors to adapt to CSIs new
 range of patient monitors.  CSI also receives substantial engineering
 development support from the OCI team in Bengaluru.
 
 The CSI brand, well known in the patient monitoring industry,
 especially in North America and Western Europe, made for a progressive
 fit for OCIs non invasive range of products. CSIs patented and niche
 technologies for anesthetic and respiratory gas monitoring, with a 10
 per cent market share in a multi-million dollar industry, propelled us
 further within the critical care business. Owing to the requirements on
 high scientific knowledge and process controlled manufacturing, CSIs
 proprietary competition in this field is limited to very few players,
 considerably enhancing the significance of the products and of the
 company to the industry.
 
 Mediaid Inc., another wholly-owned US-based subsidiary of OCI in the
 non invasive segment, received approval from the USFDA for Model 900, a
 bedside monitor, and Model 960, a vital signs monitor.  Both monitors
 have been designed and developed by OCIs R&D centre at Bengaluru.
 
 Last year, we embarked on a unique forward integration by entering into
 the fast developing Specialty Ambulance business in India. Our
 subsidiary, Advanced Micronic Devices Limited (AMDL) is now bidding for
 developing turnkey solutions in Basic Life Support and Advanced Life
 Support Ambulances; some of our own monitoring equipment will be fitted
 into these ambulances, creating a fresh revenue stream for our in-house
 product range of 40 monitors. This industry is expected to be worth USD
 150 million in the next five years, due also to Government of Indias
 initiatives in launching schemes for mobile healthcare delivery systems
 in rural and semi- urban areas.
 
 AMDLs Strategic Electronics Division, offering products based on
 Global Positioning Systems (GPS) for navigation, control, guidance,
 timing and ionospheric research, worked with the Indian Space Research
 Organization (ISRO) for precision products that were used in the
 prestigious Chandrayan project- Indias fist manned lunar mission. We
 are very proud to have evolved into a Company that can work with
 technologies transcending from sensors to satellites.
 
 Your Companys invasive line of products, especially for Eurocor GmbH,
 our wholly-owned German subsidiary, continues to make inroads in many
 important cardiovascular markets; the focus on creating brands in this
 segment is inherent to all our marketing initiatives. The team is also
 working on a product pipeline that goes beyond cardiovascular
 applications and the preferred drug-in-use, in turn expanding our
 addressable market size.
 
 In the last fiscal, we launched DIOR, a drug eluting balloon catheter,
 in many Asian countries including India, Singapore and Vietnam; the
 response to this unique concept for treatment in in-stent restenosis,
 bifurcation stenting and small lesion stenting is tremendous and is
 equal to the interest and demand generated out of the European markets.
 We expect the product, research on which is well published and
 discussed at various international interventional cardiology
 conferences, to be approved for and widely used in many more clinical
 applications, like valvoplasties, in the future. DIOR also helped
 Eurocor find a footprint in the concentrated UK market through a large
 distributor; we launched the product at The Advanced Cardiovascular
 Intervention meeting in London, last fiscal. More than 6000 patients in
 4 countries are presently being followed up for clinical data for
 various applications on DIOR.
 
 Eurocor will be introducing another unique product in the coming year
 for which it has already received a CE approval. The Magical Stent
 system, a combination of a drug eluting balloon with a bare metal
 stent, is expected to be yet another path breaking offering from the
 OCI Group. We are awaiting sufficient clinical data to launch the
 product in different markets.
 
 We also forged a strategic relationship with North Carolina, US- based
 coating company Micell Technologies for jointly developing new stent
 and balloon systems for world markets. Micell, which has a strong
 intellectual property portfolio, will coat products developed on
 Eurocortechnologies.
 
 Fiscal 2009s highly challenging economic conditions presented us with
 opportunities and ideas to fortify our business models and to ensure
 that our products assimilate the principles that drive the dynamics of
 the global healthcare industry. The strategy to tie up equipment sales
 with sustained consumables supplies and the continued and deliberate
 focus on vital signs-only monitoring and critical cardiac care assured
 yet another steady growth year.  Additionally, the non-discretionary
 nature of these products ensured that uncertain hospital capital
 expenditure budgets do not affect the products global need and demand,
 infact, the influx of sovereign funds into many capital systems and the
 subsequent contribution to building more stable healthcare
 infrastructure are only creating a larger market for some of our
 affordable and high quality offerings.  Your Companys ability to offer
 need-based and customer-driven variants also played an important role
 in successfully adapting to the changing business environment.
 
 OCIs consolidated 3-year sales CAGR of around 48 per cent, far
 supersedes the global industry rate of 8-10 per cent. We currently have
 five products in the pipeline and expect more geographical and
 distribution benefits to accrue out of these. Our business model and
 product portfolio affords us the scope for even better opportunities
 and growth for the future. In the next few years, some of our key
 endeavours would be to a) double our market share in the anesthetic
 monitoring market by also developing an OEM-model for the gas modules,
 b) develop a strong IP driven sensor supplies model for CSIs existing
 installed base of around 200,000 monitors and for all new launches
 thereafter, c) leverage on our niche technologies like DIOR and Magical
 which are also expected to be disruptive to the present angioplasty
 industry, d) focus on creating brands out of our star product names and
 e) find a cohesive balance between the invasive and non invasive
 segments and between the developing and developed markets of relevance.
 
 Lastly, it gives me great pleasure in sharing with you that your
 Company has been commended and recognized for its track-record in
 shareholder wealth creation and a sustained excellence at business and
 operations by two leading media brands. In March 2009, we were declared
 the winner of the Business Standard Star SME award and in September
 2008, Forbes Asia ranked us amongst the top 200 Best under a billion
 companies in the Asia Pacific region.
 
 All said, none of the above achievements, accolades and prospects are
 possible without your commitment and faith in the Company and its
 Management. On behalf of my colleagues from across the Group and the
 globe, I am signing off with the conviction that your support and trust
 will continue to guide us in the coming year and will help us scale
 newer heights.
 
 Sincerely,
 
 Vinod Ramnani
 Chairman and Managing Director