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SHARONBIO-MEDICINE

LIMITED

CONTENTS

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EXECUTIVE SUMMARY

INTRODUCTION

SERVICES OF SHARON BIO-MEDICINE

OBJECTIVE OF THE STUDY

ABOUT THE INDUSTRY

ABOUT THE COMPANY

OPERATIONS OF THE COMPANY LOCATIONS

FINANCIAL HIGHLIGHTS

FINDINGS AND LEARNINGS

MANAGEMENT OF THE COMPANY

SOCIAL CAUSE UNDERTAKEN BY THE COMPANY

MAJOR DEVLOPMENTS

VALUES OF THE COMPANY

SCOPE FOR FURTHER IMPROVEMENT

LIMITATIONS TO THE STUDY

BIBLIOGRAPHY

EXECUTIVE SUMMARY

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Sharon Bio-Medicine Limited, is a fastgrowing Indian Pharmaceutical Companylisted at Bombay Stock Exchange. It isinvolved in manufacturing of Intermediates,Active Pharmaceutical Ingredients andFinished Dosage. Sharon also has recentlystarted an Animal Toxicology Lab Operatingas per GLP requirements.

Growing at around 50% year on year Sharonnow has an annual turnover of over $100million, a work force of over 500 personnel,operations spanning across seven locations inIndia & one overseas location and a marketpresence in over 40 countries.

Sharon is predominantly known for itsstrengths in development & manufacturing ofPharmaceutical products in category ofIntermediates & Actives. In 2007 itcommissioned its first Finished productsmanufacturing facility at Dehradoon,Uttarakhand, India.

Sharons long term focus is to be anintegrated service provider for its customers& adding competitive advantage to itscustomers products throughout its lifecycle.

INTRODUCTION

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Incorporated in 1989 Sharon Bio-MedicineLimited was taken over by the current

management in 1995. Sharon is a fastgrowing Indian Pharmaceutical, Companylisted at Bombay Stock Exchange. It is mainlyinvolved in manufacturing of Intermediates,Active Pharmaceutical Ingredients andFinished Dosage Forms..

Sharon is predominantly been known for itsstrengths in development & manufacturing ofPharmaceutical products right fromintermediates to Actives and through tofinished Pharmaceuticals.. Sharon is nowfocusing strongly on developing theRegulated Markets Such as Europe and USA.Sharons Oral Solid dosage in June 2009

received GMP accreditation by the UK MHRA.

SERVICES OF SHARON

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Preclinical Toxicology (Offered by SA-FORD-A Division of Sharon Bio Medicine)

Chemical Process Development & Scale up Formulation Development Analytical Method Development DMF & Dossier preparation. (Sharon alsoundertakes joint development projects forANDA & CTD Dossiers)

Commercial Manufacturing ofIntermediates, Actives, Finished Dosages.

Stability monitoring for the entire shelf lifeof the product.

OBJECTIVE OF THE STUDY

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1. TO UNDERSTAND THE COMPANY IN DETAIL.

2. TO MAKE FUNDAMENTAL ANALYSIS OF THECOMPANY.

3. ANALYSING THE COMPANY AS WHOLE.

4. TO FIND OUT THE CURRENT STATUS OF THECOMPANY.

ABOUT THE INDUSTRY

India is the world's fourth largest producer ofpharmaceuticals by volume, accounting foraround 8% of global production. In valueterms, production accounts for around 1.5%of the world total. The Indian pharmaceuticalindustry directly employs around 500,000

people and is highly fragmented. While thereare around 270 large R&D based

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pharmaceutical companies in India, includingmultinationals, government-owned andprivate companies, there are also around5,600 smaller licensed genericsmanufacturers, although in reality onlyaround 3,000 companies are involved inpharmaceutical production. Most small firmsdo not have their own production facilities,but operate using the spare capacity of otherdrug manufacturers.

The advent of pharmaceutical product patentrecognition in January 2005 changed theground rules for Indian companies. In the runup to the new post-patent era and since, theIndian industry has been evolving. R&Ddepartments are moving away from reverse-engineering in favour of developing novel

drug delivery systems and discoveryresearch.

ABOUT THE COMPANY

SHARON BIO-MEDICINE LIMITED (SBML) wasincorporated in the year 1989 as SharonSynthochem Pvt. Ltd.(SSPL) to manufacturePharmaIntermediates. SSPL was originally promotedby Mrs.

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Anita Sunthankar and Mr. Anant VithalSunthankar. due to liquidity crunch, it wastaken over by Mr.Hemant M Shah andMr.Kaushik M Shah. With continuing liquiditycrunch and lack of technical expertise, it wastaken over by the present management Mrs.Savita Gowda and Mr. Mohan P Kala in theyear 1995. The management changed thename of the company to Sharon Bio-MedicineLimited on 28th August 2001.

During the year 2000, SBM established itsR&D divisionwith focus on process research anddevelopment. The company created thefacilities without altering the production line.After getting into bulk drug and drugintermediates the company went public withissue size of Rs.2.5crore in March 2000.Theissue wasoversubscribed by 3.85 times. The fundsraised fromissue were utilized to set up R& D block tocarry outprocess synthesis for API's andintermediates. DuringFY07 SBM issued 1.5lac equity shares ofRs.10eachto Mauritius based company M/s PharmtakLimited atthe rate of Rs.300 per share.

HISTORY OF THE COMPANY

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1997- Started manufacturing APIs-

launched its first drug TRIMETAZIDINEDI HYDROCHLORIDE (cardiovasculardrug).

2000- Came with public offering of 25%shares issue was oversubscribed by3.85times.Set up a R&D block to carryout process synthesis for APIS

intermediates.

2005- Hon. Finance Minister of IndiaSHRI.P.CHIDAMBARAM had put thecompany on INDO NEXT at BOMBAYSTOCK EXCHANGE; company wasawarded with ISO 9001-2000accredation by BVQI-UKAS & BVQI-

ANAR.

2006- Construction of a state of the ArtFormulation Unit for oral dosage startedat Dehradun estimated cost of theproject: $8million.

2007- Commissioning of the formulation

plant started supplying formulations toreputed Pharmaceutical companies inIndia on contract manufacturing basis.

2009- Set up & operationalised a newbusiness division by name SA-FORDdedicated to Toxicological studies. Setup & operationalised of the ART APIplant (unit-2) at Taloja.

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OPERATIONS OF THE

COMPANY

SBML is involved in the manufacturing andmarketingof Active Pharmaceutical Ingredients (API)and APIintermediates for the cardiovascular, anti-fungal, antidiabetic and anti-hypertensiondrugs. SBML started manufacturing APIs bylaunching its first drugTrimetazidine di hydrochloride(Cardiovascular Drug)in the year 1997.

The company now manufactures 20 APIs and35chemical intermediates along withformulations at their manufacturing facilities.The manufacturing facilities are located atTaloja, Maharastra (dedicated for producingAPI supplied to unregulated markets) andUttaranchal, Dehradoon (for formulations andinjectibles). As a part of forward integrationand expansion, SBML started formulation unitat Dehradoon, Uttaranchal at an estimatedcost of USD 8 mn. The commercial productionof formulation unit started in the month ofApril 2007 with oral solid dosage facility.

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SBML's facilities are ISO 9001-2000 certifiedand accredited by BVQI - UKAS & BVQI - ANAB

LOCATIONS OF SBML

Site Place Details Number of Employees

Corporate Office

Vashi All manufacturinglocations are controlledfrom this location. Thisis where the Marketing,Supply Chain, Accounts,Corporate HR,Corporate QualityAssurance andRegulatory Affairsteams are based.

85

Finance Office Andheri The finance departmentof the company is basedin Andheri West.

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Research &Development

Taloja This is where theAnalytical, SyntheticChemistry and Oralsolid formulationdevelopment is carriedout.

30

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ToxicologyCentre

Taloja Operating under thedivision SAFORD, this iswhere the companycarries out specializedtesting using animals.

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API Unit 1 Taloja The companys firstManufacturing Unit hasbeen operational since1995. Mainly focuses onmanufacturingIntermediates & APIs.The site has ISOcertification and is alsoLocal GMP certified.

100

API Unit 2 Taloja Commissioned recentlyin end 2009 thisManufacturing Unit isfocused more oncatering to regulatedmarkets such as SouthKorea, South Africa,Europe, USA etc

125

FormulationUnit 1

Dehradoon

Commissioned in Mid2007 this was thecompanys foray intoManufacturing offinished products. TheUnit has a capacity ofmanufacturing 2500million tablets and 500million capsules. Theunit is certified byauthorities such as

125

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WHO, Invima Colombia,UK MHRA etc.

FINANCIAL HIGHLIGHTS OF THECOMPANY

(in lacs)05-06 06-07 07-08 08-09

TURNOVER 8911.

27

17100.

45

33461

.6

41979.

12OTHERINCOMES

15.34 51.22 250.51

183.23

PBDIT 1403.42

2637.15

4158.03

4073.33

DEPRECIATION

55.70 117.92 359.96

417.90

INTEREST 63.48 249.88 658.70

1436.32

PBT 1284.24

2269.35

3139.37

2219.11

TAX 202.75

478.00 407.00

310.00

PAT 1072.90

1777.28

2718.79

1860.24

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Interpretations:

The above table gives us theclear understanding that thecompany is growing rapidly overyears.

Turnover was 8911.27 in 06whereas in 09 its 41979.12.

Profit was 1072.90 in 06 whereas in 09 its 1860.24.

FINANCIAL STATEMETS

Jun ' 09 Jun ' 08 Jun ' 07 Jun ' 06 Jun ' 05

Sales 410.84 334.62 171.71 89.11 35.06

Other Income 1.88 2.51 0.50 0.15 0.08

Stock Adjustment -23.82 -31.48 -10.86 -6.94 -1.75

Raw Material 342.89 0.00 150.59 78.34 31.42

Power And Fuel 0.00 0.00 0.00 0.00 0.00

Employee Expenses 5.94 3.74 1.55 0.90 0.68Excise 0.00 0.00 0.00 0.00 0.00

Admin And Selling

Expenses0.00 0.00 0.00 0.00 0.00

Research And

Devlopment Expenses0.00 0.00 0.00 0.00 0.00

Expenses Capitalised 0.00 0.00 0.00 0.00 0.00

Other Expeses 45.08 323.28 4.59 2.93 1.98

Provisions Made 0.00 0.00 0.00 0.00 0.00

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Operating Profit 40.76 39.08 25.85 13.88 2.75

Interest 14.19 6.59 2.09 0.64 0.38

Gross Profit 28.45 34.99 24.26 13.40 2.44

Depreciation 5.47 3.60 1.52 0.56 0.37Taxation 1.68 4.21 5.95 2.11 0.33

Net Profit / Loss 10.35 27.19 16.80 10.731.75

Extra Ordinary Item -10.94 0.00 0.00 0.00 0.00

Prior Year

Adjustments0.00 0.00 0.00 0.00 0.00

Equity Capital 10.56 10.56 10.18 10.03 10.03

Equity Dividend Rate 0.00 0.00 0.00 0.00 0.00

Agg.Of Non-Prom.

Shares (in Lacs)41.44 41.44 37.69 36.19 26.52

Agg.Of Non

PromotoHolding(%)39.26 39.26 37.02 36.08 26.44

OPM(%) 9.92 11.67 15.05 15.57 7.83

GPM(%) 6.89 10.38 14.08 15.01 6.95

NPM(%) 2.50 8.06 9.75 12.01 4.97EPS (in Rs.) 9.80 25.75 16.50 10.69 1.74

COMPARISON OF CURRENT YEAR ANDLAST YEAR SALES AND NET PROFITS

Particulars Quarter Ended Year Ended

Jun. 2010 Jun. 2009 % Var. Jun. 2010 Jun. 2009 % Var.

Sales 129.97 117.52 11 496.58 419.79 18

OPM % 11.82 10.42 13 10.42 9.27 12

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PBDT 9.54 8.29 15 33.31 26.37 26

PBT 7.54 6.96 8 26.63 22.19 20

NP 5.30 0.34 1459 19.01 14.24 33

Sales as well as net profits are growing atalarming scale.

DIVIDENDS DECLARED

Announcement date

Effectivedate

Dividendtype

Dividend(%)

3.12.09 22.12.09 Final 122.12.08 19.12.08 Final 12

25.7.07 26.12.07 Final 1507.9.06 06.10.06 Final 10

SHARON BIO-MEDICINE AND

OTHERS

SHARO

NSUN

PHARM

A

CIPLA Dr.REDDYS LABS

SALES 410.84 3,861.55 5,624.91 4,553.21

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TURNOVER

NETPROFIT

10.35 1,265.29 1,081.49 846.08

FINDINGS AND LEARNINGS

The Company hasachieved turnover of Rs.41,979.12 lacs for the year-ended 30.06.2009 as against

the turnover of Rs. 33,461.60lacs for the year-ended30.06.2008.

Dividend of Rs.1.20 per

Equity share (12%) on equitycapital for the year ended June30,2009.The dividend is paid on10556900 equity shares of thecompany.

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Dividend payout wasRs.1,26,68,280/- and DividendDistribution Tax Rs.21,52,974/-

MANAGEMENT OF SHARONBIO-MEDICINE

BOARD OF DIRECTORS

Mrs. Savita Gowda Managing Director

Mr. Lalit Misra Whole Time Director Mr. Mohan.P.Kala Director

Mr. Vijay Kirpalani Whole Time Director

Dr. V.N Radoni Independent Director

Mr.Drunal Shah Independent Director

Mr. HarishPalecanda

Independent Director

Mr. Sanjay Shah Independent Director Dr. Nivedita Patil

Kartik

Independent Director

AUDITORS M/s K.K Gangwal & Associates.

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COMPANY SERETARY

Mr. R.M Gaud

BANKERS OF SHARON BIO-

MEDICINE LIMITED

Canara Bank Prime corporate branch,nariman point,Mumbai

State Bank Of India Overseas branch,cuff parade,Mumbai

Standard Chartered

Bank Fort branch, Mumbai

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SOCIAL CAUSE UNDERTAKENBY THE COMPANY

Various health, safety and environmentawareness programs were organized for ourpersons working in various plants. TheCompany always keep high standards ofoccupational health, safety and environmentpreservation practices at all itsmanufacturing units. The Company is concernwith the environment, health and safety of itsPeople, State, India and World at large. Forthe Safety of theEnvironment the company maintain well-designed efficient treatment plants at its allfactories and treats water from zerodischarge.

CONSERVATION OF ENERGY:

The Company is striving continuously

to conserve by adopting innovative measures toreduce wastage and optimize consumption.

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i. Maintained the power factor close to unity.

ii. Temperature based automation of the mainpower consuming equipments such as CoolingTower Fans, Chillers, Air Handling Units.

iii. Recovery of energy from Steam Condensate &

reuse for production of Hot Water.

iv. Installed Lighting Energy Saver Panel in variousfactories.

v. Conversion of Delta connected ventilationsystem motors to Star connection.

vi. Building Management System for control andtracking of air handling systems of efficientoperations.

vii. As far as possible the lighting fixtures areselected with high efficiency & power savingTransformers.

Impact of the above measures forreduction of energy consumption and consequentimpact on the cost of production of goods.

The adoption of the above energyconservation measures have helped to curtail the

proportionate increase in total energy usage

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consequent to overall increase in production. Thishas made it possible to maintain cost of productionat optimum levels.

MAJOR DEVELOPMENTS

1. M/s. Stonewood Cem-Fab (India) Pvt. Ltd.

has been merged with Sharon Bio-MedicineLtd.

2. A State of Art Factory for Active PharmaIngredient is constructed and completed atPlot no. L-6, MIDC, Taloja Near Navi Mumbai.This Factory is mainly for European, USA andother developed market by the end of thenext year, company will apply for the US FDAapproval.

3. A State of Art Facility for Toxicology Lab

has been Constructed and completed at Plotno. V-10 MIDC, Taloja Near Navi Mumbai. Thename of this division is given as SA-FORD,the company is trying to get the GLPapproval from any of the European Country.

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4. There are many products in ActivePharma Ingredients (API), Intermediates &Formulations have been developed by thecompany in the last one year. In API &Intermediates, new products added areGlimpride, 4-Methoxy Benzyl Amine, DiMethyl Eac, and in Formulation space, newproducts, Denmadol, Metroprolol, RanitidineHydrochloride,Shanafil are added.

5. Sharon International FZE, which was

incorporated as wholly owned subsidiarycompany in Ras-Al-Khaimah - Free TradeZone, in United Arab Emirates (UAE) forcarrying business of Pharmaceutical andother has started doing business in thecurrent year and we expect good business inthe year 2010.

6. The Company has applied for the smallHydro Power Projects in Uttrakhand. TheApplication along with details of powerproject along with situation of Power House,River and Latitude, Longitude has alreadybeen provided.

7. The Company has registered its productsin many countries in Africa, South America

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and East Asia during the year and will reapthe benefit of sales from these countries infew months.

8. The Company came out with zero percent

coupon Foreign Currency Convertible Bonds( FCCBs) of USD 16.50mn in November 2007.Bonds will be convertible is 5 years & 7 Daysfrom the date of allotment. The FCCB of USD16.50mn has fully been utilized for theCapital Investment of the Company.

VALUES THAT CONTRIBUTE TOTHE SUCCESS OF SHARON BIO-

MEDICINE

The success of SHARON BIO-MEDICINE LIMITED lies in the ability expeditepace of product development by streamliningthe process and incalculating a culture ofoperational excellence. Sharon Bio-Medicine,since its inception has carved its niche byoffering a distinct value proportion to itscustomers.

VALUES OF SBML:

QUALITY

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INTEGRITY

TEMWORK

CUSTOMER SERVICE

LEADERSHIP

CREATIVITY

SCOPE FOR FURTHERIMPROVEMENT

In the last 4 years the companyhas invested almost Rs.150 Crs in the Fixed

Assets of the Company. This expansionprogramme on Fixed Assets will certainlyhelp to meet the increasing demands ofDomestic and International business andsustain growth and margins with better cashflow and at the same time will have higher

depreciation which will help to take theadvantage of Taxation and other benefits andreduce tax liability.

The new plants which thecompany has set up are of United State FDAapprovable Standard and will cater formaximum of developed market in

future. With focus on developed market theprofit margins of the Company will rise.

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The Investments of Rs150 Crs

approximately is done in Dehradun,Uttarakhand, Taloja, Navi Mumbai, and Vizag,Andhra Pradesh.

LIMITATIONS OF THE STUDY

Lack of support from the company.

Lack of current years data(balancesheet and profit and loss statement)

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BIBLIOGRAPHY

www.sharonbio.com

www.indiainfoline.com

www.bseindia.com

www.valuenotes.com

27

http://www.sharonbio.com/http://www.indiainfoline.com/http://www.bseindia.com/http://www.valuenotes.com/http://www.sharonbio.com/http://www.indiainfoline.com/http://www.bseindia.com/http://www.valuenotes.com/

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