SHARON

BIO-MEDICINE
LIMITED

CONTENTS
1
• 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

2
Sharon Bio-Medicine Limited, is a fast
growing Indian Pharmaceutical Company
listed at Bombay Stock Exchange. It is
involved in manufacturing of Intermediates,
Active Pharmaceutical Ingredients and
Finished Dosage. Sharon also has recently
started an Animal Toxicology Lab Operating
as per GLP requirements.

Growing at around 50% year on year Sharon

now has an annual turnover of over $100
million, a work force of over 500 personnel,
operations spanning across seven locations in
India & one overseas location and a market
presence in over 40 countries.

Sharon is predominantly known for its

strengths in development & manufacturing of
Pharmaceutical products in category of
Intermediates & Actives. In 2007 it
commissioned its first Finished products
manufacturing facility at Dehradoon,
Uttarakhand, India.

Sharon’s long term focus is to be an

integrated service provider for its customers
& adding competitive advantage to its
customer’s products throughout its life
cycle.

INTRODUCTION

3
Incorporated in 1989 Sharon Bio-Medicine
Limited was taken over by the current
management in 1995. Sharon is a fast
growing Indian Pharmaceutical, Company
listed at Bombay Stock Exchange. It is mainly
involved in manufacturing of Intermediates,
Active Pharmaceutical Ingredients and
Finished Dosage Forms..

Sharon is predominantly been known for its

strengths in development & manufacturing of
Pharmaceutical products right from
intermediates to Actives and through to
finished Pharmaceuticals.. Sharon is now
focusing strongly on developing the
Regulated Markets Such as Europe and USA.
Sharon’s Oral Solid dosage in June 2009
received GMP accreditation by the UK MHRA.

SERVICES OF SHARON

4
• 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 also
undertakes joint development projects for
ANDA & CTD Dossiers)

• Commercial Manufacturing of
Intermediates, Actives, Finished Dosages.

• Stability monitoring for the entire shelf life

of the product.

OBJECTIVE OF THE STUDY

5
1. TO UNDERSTAND THE COMPANY IN DETAIL.

2. TO MAKE FUNDAMENTAL ANALYSIS OF THE

COMPANY.

3. ANALYSING THE COMPANY AS WHOLE.

4. TO FIND OUT THE CURRENT STATUS OF THE

COMPANY.

ABOUT THE INDUSTRY

India is the world's fourth largest producer of

pharmaceuticals by volume, accounting for
around 8% of global production. In value
terms, production accounts for around 1.5%
of the world total. The Indian pharmaceutical
industry directly employs around 500,000
people and is highly fragmented. While there
are around 270 large R&D based

6
pharmaceutical companies in India, including
multinationals, government-owned and
private companies, there are also around
5,600 smaller licensed generics
manufacturers, although in reality only
around 3,000 companies are involved in
pharmaceutical production. Most small firms
do not have their own production facilities,
but operate using the spare capacity of other
drug manufacturers.

The advent of pharmaceutical product patent

recognition in January 2005 changed the
ground rules for Indian companies. In the run
up to the new post-patent era and since, the
Indian industry has been evolving. R&D
departments are moving away from reverse-
engineering in favour of developing novel
drug delivery systems and discovery
research.

ABOUT THE COMPANY

SHARON BIO-MEDICINE LIMITED (SBML) was

incorporated in the year 1989 as Sharon
Synthochem Pvt. Ltd.(SSPL) to manufacture
Pharma
Intermediates. SSPL was originally promoted
by Mrs.

7
Anita Sunthankar and Mr. Anant Vithal
Sunthankar. due to liquidity crunch, it was
taken over by Mr.Hemant M Shah and
Mr.Kaushik M Shah. With continuing liquidity
crunch and lack of technical expertise, it was
taken over by the present management Mrs.
Savita Gowda and Mr. Mohan P Kala in the
year 1995. The management changed the
name of the company to Sharon Bio-Medicine
Limited on 28th August 2001.

During the year 2000, SBM established its

R&D division
with focus on process research and
development. The company created the
facilities without altering the production line.
After getting into bulk drug and drug
intermediates the company went public with
issue size of Rs.2.5crore in March 2000.The
issue was
oversubscribed by 3.85 times. The funds
raised from
issue were utilized to set up R& D block to
carry out
process synthesis for API's and
intermediates. During
FY07 SBM issued 1.5lac equity shares of
Rs.10each
to Mauritius based company M/s Pharmtak
Limited at
the rate of Rs.300 per share.

HISTORY OF THE COMPANY

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 1997- Started manufacturing API’s-
launched its first drug TRIMETAZIDINE
DI HYDROCHLORIDE (cardiovascular
drug).

 2000- Came with public offering of 25%

shares issue was oversubscribed by
3.85times.Set up a R&D block to carry
out process synthesis for API’S
intermediates.

 2005- Hon. Finance Minister of India

SHRI.P.CHIDAMBARAM had put the
company on INDO NEXT at BOMBAY
STOCK EXCHANGE; company was
awarded with ISO 9001-2000
accredation by BVQI-UKAS & BVQI-
ANAR.

 2006- Construction of a state of the Art

Formulation Unit for oral dosage started
at Dehradun estimated cost of the
project: $8million.

 2007- Commissioning of the formulation

plant started supplying formulations to
reputed Pharmaceutical companies in
India on contract manufacturing basis.

 2009- Set up & operationalised a new

business division by name SA-FORD
dedicated to Toxicological studies. Set
up & operationalised of the ART API
plant (unit-2) at Taloja.

9
OPERATIONS OF THE
COMPANY

SBML is involved in the manufacturing and

marketing
of Active Pharmaceutical Ingredients (API)
and API
intermediates for the cardiovascular, anti-
fungal, antidiabetic and anti-hypertension
drugs. SBML started manufacturing APIs by
launching its first drug
Trimetazidine di hydrochloride
(Cardiovascular Drug)
in the year 1997.

The company now manufactures 20 APIs and

35
chemical intermediates along with
formulations at their manufacturing facilities.
The manufacturing facilities are located at
Taloja, Maharastra (dedicated for producing
API supplied to unregulated markets) and
Uttaranchal, Dehradoon (for formulations and
injectibles). As a part of forward integration
and expansion, SBML started formulation unit
at Dehradoon, Uttaranchal at an estimated
cost of USD 8 mn. The commercial production
of formulation unit started in the month of
April 2007 with oral solid dosage facility.

10
SBML's facilities are ISO 9001-2000 certified
and accredited by BVQI - UKAS & BVQI - ANAB

LOCATIONS OF SBML
Site Place Details Number of
Employees
Corporate Offi Vashi All manufacturing 85
ce locations are controlled
from this location. This
is where the Marketing,
Supply Chain, Accounts,
Corporate HR,
Corporate Quality
Assurance and
Regulatory Affairs
teams are based.

Finance Office Andheri The finance department 15

of the company is based
in Andheri West.

Research & Taloja This is where the 30

Development Analytical, Synthetic
Chemistry and Oral
solid formulation
development is carried
out.

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Toxicology Taloja Operating under the 25
Centre division SAFORD, this is
where the company
carries out specialized
testing using animals.

API Unit 1 Taloja The company’s first 100

Manufacturing Unit has
been operational since
1995. Mainly focuses on
manufacturing
Intermediates & API’s.
The site has ISO
certification and is also
Local GMP certified.

API Unit 2 Taloja Commissioned recently 125

in end 2009 this
Manufacturing Unit is
focused more on
catering to regulated
markets such as South
Korea, South Africa,
Europe, USA etc

Formulation Dehradoo Commissioned in Mid 125

Unit 1 n 2007 this was the
company’s foray into
Manufacturing of
finished products. The
Unit has a capacity of
manufacturing 2500
million tablets and 500
million capsules. The
unit is certified by
authorities such as

12
 WHO, Invima Colombia,
UK MHRA etc.

FINANCIAL HIGHLIGHTS OF THE

COMPANY

(in lacs)
05-06 06-07 07-08 08-09
TURNOVER 8911. 17100. 33461 41979.
27 45 .6 12
OTHER 15.34 51.22 250.5 183.23
INCOMES 1
PBDIT 1403. 2637.1 4158. 4073.3
42 5 03 3
DEPRECIATI 55.70 117.92 359.9 417.90
ON 6
INTEREST 63.48 249.88 658.7 1436.3
0 2
PBT 1284. 2269.3 3139. 2219.1
24 5 37 1
TAX 202.7 478.00 407.0 310.00
5 0
PAT 1072. 1777.2 2718. 1860.2
90 8 79 4

13
 Interpretations:

 The above table gives us the

clear understanding that the
company is growing rapidly over
years.
 Turnover was 8911.27 in 06
whereas in 09 its 41979.12.
 Profit was 1072.90 in 06 where
as 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 0.68
Excise 0.00 0.00 0.00 0.00 0.00
Admin And Selling
0.00 0.00 0.00 0.00 0.00
Expenses
Research And
0.00 0.00 0.00 0.00 0.00
Devlopment Expenses
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 0.37
Taxation 1.68 4.21 5.95 2.11 0.33
1.75
Net Profit / Loss 10.35 27.19 16.80 10.73
Extra Ordinary Item -10.94 0.00 0.00 0.00 0.00
Prior Year
0.00 0.00 0.00 0.00 0.00
Adjustments
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.
41.44 41.44 37.69 36.19 26.52
Shares (in Lacs)
Agg.Of Non
39.26 39.26 37.02 36.08 26.44
PromotoHolding(%)
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 4.97
EPS (in Rs.) 9.80 25.75 16.50 10.69 1.74

COMPARISON OF CURRENT YEAR AND

LAST 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

15
 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 at

alarming scale.

DIVIDENDS DECLARED

Announceme Effective Dividend Dividend(

nt date date type %)
3.12.09 22.12.09 Final 12
2.12.08 19.12.08 Final 12
25.7.07 26.12.07 Final 15
07.9.06 06.10.06 Final 10

SHARON BIO-MEDICINE AND

OTHERS

SHARO SUN CIPLA Dr.REDD

N PHARM YS LABS
A
SALES 410.84 3,861.55 5,624.91 4,553.21

16
TURNOV
ER
NET 10.35 1,265.29 1,081.49 846.08
PROFIT

FINDINGS AND LEARNINGS

• The Company has

achieved turnover of Rs.
41,979.12 lacs for the year-
ended 30.06.2009 as against
the turnover of Rs. 33,461.60
lacs for the year-ended
30.06.2008.

• Dividend of Rs.1.20 per

Equity share (12%) on equity
capital for the year ended June
30,2009.The dividend is paid on
10556900 equity shares of the
company.

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 • Dividend payout was
Rs.1,26,68,280/- and Dividend
Distribution Tax Rs.21,52,974/-

MANAGEMENT OF SHARON
BIO-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. Harish Independent Director
Palecanda
• Mr. Sanjay Shah Independent Director
• Dr. Nivedita Patil Independent Director
Kartik

• 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 UNDERTAKEN
BY THE COMPANY

Various health, safety and environment

awareness programs were organized for our
persons working in various plants. The
Company always keep high standards of
occupational health, safety and environment
preservation practices at all its
manufacturing units. The Company is concern
with the environment, health and safety of its
People, State, India and World at large. For
the Safety of the
Environment the company maintain well-
designed efficient treatment plants at its all
factories and treats water from zero
discharge.

CONSERVATION OF ENERGY:

The Company is striving continuously

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

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i. Maintained the power factor close to unity.

ii. Temperature based automation of the main

power consuming equipments such as Cooling
Tower 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 various

factories.

v. Conversion of Delta connected ventilation

system motors to Star connection.

vi. Building Management System for control and

tracking of air handling systems of efficient
operations.

vii. As far as possible the lighting fixtures are

selected with high efficiency & power saving
Transformers.

Impact of the above measures for

reduction of energy consumption and consequent
impact on the cost of production of goods.

The adoption of the above energy

conservation measures have helped to curtail the
proportionate increase in total energy usage

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consequent to overall increase in production. This
has made it possible to maintain cost of production
at optimum levels.

MAJOR DEVELOPMENTS

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

has been merged with Sharon Bio-Medicine
Ltd.

2. A State of Art Factory for Active Pharma

Ingredient is constructed and completed at
Plot no. L-6, MIDC, Taloja Near Navi Mumbai.
This Factory is mainly for European, USA and
other developed market by the end of the
next year, company will apply for the US FDA
approval.

3. A State of Art Facility for Toxicology Lab

has been Constructed and completed at Plot
no. V-10 MIDC, Taloja Near Navi Mumbai. The
name of this division is given as SA-FORD,
the company is trying to get the GLP
approval from any of the European Country.

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 4. There are many products in Active
Pharma Ingredients (API), Intermediates &
Formulations have been developed by the
company in the last one year. In API &
Intermediates, new products added are
Glimpride, 4-Methoxy Benzyl Amine, Di
Methyl Eac, and in Formulation space, new
products, Denmadol, Metroprolol, Ranitidine
Hydrochloride,
Shanafil are added.

5. Sharon International FZE, which was

incorporated as wholly owned subsidiary
company in Ras-Al-Khaimah - Free Trade
Zone, in United Arab Emirates (UAE) for
carrying business of Pharmaceutical and
other has started doing business in the
current year and we expect good business in
the year 2010.

6. The Company has applied for the small

Hydro Power Projects in Uttrakhand. The
Application along with details of power
project along with situation of Power House,
River and Latitude, Longitude has already
been provided.

7. The Company has registered its products

in many countries in Africa, South America

23
and East Asia during the year and will reap
the benefit of sales from these countries in
few 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 Days
from the date of allotment. The FCCB of USD
16.50mn has fully been utilized for the
Capital Investment of the Company.

VALUES THAT CONTRIBUTE TO

THE SUCCESS OF SHARON BIO-
MEDICINE

The success of SHARON BIO-

MEDICINE LIMITED lies in the ability expedite
pace of product development by streamlining
the process and incalculating a culture of
operational excellence. Sharon Bio-Medicine,
since its inception has carved its niche by
offering a distinct value proportion to its
customers.

VALUES OF SBML:

• QUALITY

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 • INTEGRITY

• TEMWORK

• CUSTOMER SERVICE

• LEADERSHIP

• CREATIVITY

SCOPE FOR FURTHER

IMPROVEMENT

In the last 4 years the company

has invested almost Rs.150 Crs in the Fixed
Assets of the Company. This expansion
programme on Fixed Assets will certainly
help to meet the increasing demands of
Domestic and International business and
sustain growth and margins with better cash
flow and at the same time will have higher
depreciation which will help to take the
advantage of Taxation and other benefits and
reduce tax liability.

The new plants which the

company has set up are of United State FDA
approvable Standard and will cater for
maximum of developed market in
future. With focus on developed market the
profit margins of the Company will rise.

25
 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(balance

sheet and profit and loss statement)

26
 BIBLIOGRAPHY

• www.sharonbio.com

• www.indiainfoline.com

• www.bseindia.com

• www.valuenotes.com

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