JB Chemicals 14June08:Layout 1 - JBCPL. B. Chemicals & Pharmaceuticals Ltd. 1 J. B. Chemicals & Pharmaceuticals Limited (JBCPL), one of India’s leading pharmaceutical companies,

FORWARD THINKING

Annua l Repo r t 2

007-08

Annual Report 2007-08

FORWARD-LOOKING STATEMENTIn this annual report we have disclosed forward looking information to enable investors to comprehend our prospects and take informed investment

decisions. This report and other statements, written and oral, that we periodically make contain forward looking statements that set out anticipated

results based on the management’s plan and assumptions. We have tried wherever possible to identify such statements by using words such as

ànticipate’, èstimate’, èxpects’, `project’, ìntends’, `plans’, `believes’ and words of similar substance in connection with any discussion of future

performance.

We cannot guarantee that these forward-looking statements will be realized, although we believe we have been prudent in assumptions. The

achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties

materialise or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected.

Readers should bear this in mind.

CONTENTSToday’s Efforts. Tomorrow’s Solutions. 02 | Financial Highlights 03 | Chairman’s Speech 04 | International Market 08 | Domestic Market 15 | Research & Development16 | Manufacturing Facilities 19 | Board of Directors 20 | Corporate Information 21 | List of Branches 22 | Ratio Analysis 23 | Management Discussion and Analysis24 | Directors’ Report 28 | Report on Corporate Governance 34 | Auditors’ Certificate on Corporate Governance 40 | Auditors’ Report 41 | Balance Sheet 44 | Profit& Loss Account 45 | Cash Flow Statement 46 | Schedules 47 | Auditors’ Report on Consolidated Accounts 65 | Consolidated Accounts 66 | Section 212 79 | TenYear Financial Summary 80

1J. B. Chemicals & Pharmaceuticals Ltd.

J. B. Chemicals & PharmaceuticalsLimited (JBCPL), one of India’s leadingpharmaceutical companies, manufactures &markets a diverse range of pharmaceuticalformulations, herbal remedies and API’s. JBCPL exportsto over 40 countries worldwide with a strong presence inRussia, Ukraine and the other CIS countries. The Companycontinues to invest in growing its shares in the regulated marketsin USA, Europe, South Africa, Latin America and Australia.JBCPL has a strong R & D set-up for development ofNDDS formulations, filing of DMF’s and ANDA’s. Itsstate-of-the-art manufacturing facilities areapproved by renowned internationalregulatory authorities.

Across over 40 countries from Russia to Latin America, from SouthAfrica to Australia, from Europe to South East Asia, when besides warmhugs and tender care, people and families need medicines to cure,JBCPL reassuringly offers the right medical solutions that lie at the heartof being healthy.

Different people.Diverse backgrounds.

Multitude of health problems.All reassuringly addressed by one pharmaceutical Company.

2 Annual Report 2007-08

Four words that lie at the core of everything we do. And everythingwe stand for.

Efforts that define and differentiate our strengths across everystage of the value chain. Across every function of the organisation.Across every market of importance.

Efforts that allow us to view R&D more than just a supportfunction, but rather as the Company’s lifeline entrusted with theresponsibility of developing new technology platforms, introducingnext generation products and enhancing offerings across nichesegments.

Efforts that will take the Company’s core strength in lozenges tothe next level through the commissioning of a best-in-classmanufacturing facility coupled with path breaking herbalformulation & medicated lozenges to enhance global marketcoverage.

Efforts that help strengthen competencies in niche segments suchas injectables and contrast media products.

Efforts that facilitate de-risking and diversifying through the

prudent identification and subsequent foray into high potentialmarkets and fast growing therapeutic segments.

Efforts that aid further strengthening of presence acrossCompany’s key markets & concurrently harnessing theopportunity matrix on the domestic front.

Efforts that augment manufacturing capabilities and streamlineefficiencies through robust systems & processes.

Efforts that increase approvals across accreditation bodies &customers & accelerate filing of ANDAs.

Efforts that help inculcate only one kind of culture across theorganisation – a culture of forward thinking,

Because we believe that these are the only kind of companies thatare poised to impact the lives of patients’ world over and deliverin the future.

Ensuring that today’s efforts lead to tomorrow’s solutions.

Here’s to a bright and healthy future.

TODAY’S EFFORTS. TOMORROW’S SOLUTIONS.

Composition of Sales (Formulations & API’s)

94% Formulations

6% API’s

FINANCIAL HIGHLIGHTS

100

200

300

400

500

600

2003-04 2004-05 2005-06 2006-07 2007-08

314.55 371.64

481.65549.04 564.99

Total Sales (Rs in Cr)

10

0

2030405060

2003-04 2004-05 2005-06 2006-07 2007-08

51.04 59.15

70.93 71.02

51.69

Profit After Tax (Rs in Cr)

100

0

200

300

2003-04 2004-05 2005-06 2006-07 2007-08

184.85 197.16 206.80

283.49331.47

Gross Block (Rs in Cr)

10

0

20

30

40

50

60

2003-04 2004-05 2005-06 2006-07 2007-08

31.0135.64

41.4549.94

54.93

Book Value (Rs)

7080

50

150

250

350


34% Material Cost

Distribution of Income (%)

35% Other Expenses

16% Staff Cost

9% Profit

3% Depreciation 3% Interest

0

58% Exports

42% Domestic

Composition of Sales (Export & Domestic)

As the curtains are drawn on the Financial Year 07-08 and theevents of the past 12 months become a part of history, it is withmixed feeling that I present this year’s results. The biggest heart-burn on the rupee’s appreciation against the dollar for Indian Inc.is mainly as India’s external trade is invoiced in dollar and anychange in the dollar’s rupee value has an adverse impact on aCompany’s export business. JBCPL is no exception to this rule.During FY 07-08, exports of your Company increased to USD81.80 mn (previous year USD 69.70 mn) by an impressive rate of17.40 per cent. However, the growth in rupee terms stood at 6.40per cent on a year-on-year basis, translating into lower exportsales realisation by Rs 33.45 crores. To mitigate the currency riskin future, we are now booking forward cover for all our receivableson a month-to-month basis.

INVESTING FOR THE FUTUREAs a future-focused organization, we have always believed inincreasing our preparedness to face future challenges andenhance our competitive position in the industry by investing inthe key elements of our business.

As a step in this direction, we have set up two green fieldmanufacturing facilities at Panoli meeting the stringent USFDA andEuropean authorities’ guidelines for Parenterals and multi-purposeAPI.

It was also a period when we have invested in strengthening ourmarketing capabilities in the domestic and overseas marketparticularly in the core market of Russia, Ukraine & CIS countries.This has resulted in higher financing & marketing costs whichalong with the foreign exchange fluctuation loss have impactedour net profits significantly. However, we foresee these expensesas strategic investments which will help JBCPL consolidate itsposition firmly across its main markets. These expenses will also

enable us to access newer fast growing markets and develop anarray of niche products and boost our already strong productpipeline. We are confident that these measures will lead to positiveresults in the years to come.

As immediate remedial measures and to improve the confidencelevel, we have taken several steps to strengthen our domesticmarket penetration, enhance our product mix and introducedseveral cost control measures. We have also taken steps toimprove our working capital management.

DOMESTIC MARKETAs the domestic segment at Rs 236 crores did not perform in linewith our expectations, it impacted our top line growth. Hence, toreduce costs and be more competitive and react rapidly to thegrowing demands in specific segments, we have moved to aleaner structure of three domestic divisions from four divisions.

On the positive side in the domestic market, JBCPL has the firstdual calcium channel blocker in India and Nicardia XL which hasa novel osmotic release technology. The market response forthese new entrants has been very encouraging. Moving forward,we plan to enter into the fast growing therapeutic segments andfocus on superior product mix and an effective supply chain toincrease market share. JBCPL plans to introduce new productsdeveloped internally and also acquire more through in-licensingarrangements. Our domestic marketing strategy aims to makestrong inroads into the rural sections of India which is home tonearly 700 mn people.

INTERNATIONAL MARKETS

Russia & CISAs you will well be aware, JBCPL is the third largest Indian


FROM THE CHAIRMAN’S DESKJ. B. ModyChairman & Managing Director



pharmaceutical Company in Russia and the Company’s brandedproducts continue to be well-accepted. To entrench ourselveseven more firmly in our flagship market, we undertook aggressiveadvertisement spends, continued introducing new niche productsand brand extensions and created focused hospital, ethical andOTC divisions. To leverage on the brand equity of our flagshipproduct, we are also considering out-licensing the “Doktor Mom”brand in the market.

Semi-regulated marketsOur strategy to invest in Biotech Laboratories (Pty) Ltd. to tapthe lucrative South African market has resulted in good businessthrough tender bidding in 2007-2008. We plan to acquire brandsand conduct site variation manufacturing at our MCC, SouthAfrica approved facility in India.

Our strategic intent is to achieve consistent growth in earningsby concentrating on developing new promising market regionssuch as Australia, Brazil and extending our lozenges productsegments in Australia where our expertise provides us acompetitive edge. We would like to position JBCPL in growthmarkets where the existing core product knowledge andmanufacturing capabilities can be utilized well. We plan toexpand into the Latin America region covering Mexico,

Venezuela and Columbia and in South East Asia to coverPhilippines and Indonesia. Other important markets, where weare focusing our energies include Vietnam, Algeria, Malaysia andThailand.

RESEARCH & DEVELOPMENTR&D has always been the driving force steering us into nicheproduct and technology segments way before others andthereafter strengthening our competitive position in these uniquesegments through the continuous introduction of an array ofproducts and solutions. The year 2008 was especially gratifying onthe R&D front with your Company announcing a number ofbreakthroughs such as completing the analytical standardizationof herbs for export oriented products, completing thestandardization of Novel Drug Delivery Disciplines (NDDS)formulation with an “Osmotic Drug Delivery System” till exhibitbatch, commencing commercial manufacture of Cilnidipine, acalcium channel blocker addressing the anti-hypertensivesegment, a first by any Company in the country and thesuccessful development of commercially viable process forContrast Media known to very few in the industry till date.

MANUFACTURING & APPROVALSAt JBCPL, as a forward thinking Company, we have invested in


building state-of-the-art manufacturing facilities, technology andcontinue to invest significantly in research and development ofnew products and manufacturing processes. We have receivedapprovals from TGA – Australia for our Lozenges facilities, MCCSouth Africa for the tablets and injectable facilities with inspectionbeing carried out by various authorities including the MHRA – UKfor our tablet manufacturing facilities.

SUPPLY CHAIN MANAGEMENTTo improve overall efficiency, we have initiated a Supply ChainManagement (SCM) project in November, 2007 and expect it togo live in June 2008. SCM will play a critical role in ensuringgreater product availability at point-of-sales through seamlessproduction planning and distribution, enabling better evaluationand leveling, inventory management, etc. The most importantresult of the actions triggered by SCM will be that of curtailingcosts and boosting operational efficiency. SCM will be of centralimportance when the phase of greater expansion in existing andnew markets begins in the years to come.

FUTURE OUTLOOKWe are confident that through our well-planned long term, forwardthinking strategies and the strength of our core competencies &various initiatives, your Company will achieve improved businessperformance over the next three years, barring another set ofunforeseen macro circumstances.

ON A CONCLUDING NOTEThe JBCPL of today is very different and stronger than the JBCPLof the yesteryears. And the JBCPL we are today will most certainlybe different from the Company we will become tomorrow. And thisdifference will be brought about by the extraordinary dedicationand creativity of the members of the Company – members whohave a shared ambition for the future, a shared ambition toimprove the lives of as many patients in the best possible way.

As we move into another financial year, we remain focused onmaintaining strong relationships with all our customers, suppliers,distributors, government bodies, esteemed members of themedical fraternity and all stakeholders. I would like to take thisopportunity; to extend my deep gratitude to them for theirco-operation, continued support and trust. On behalf of TheBoard of Directors, I would like to thank all employees for theircontinued commitment to the Company and the passion to takethe Company to the next level.

J. B. ModyChairman and Managing Director


INTERNATIONAL MARKET

RUSSIA & CIS

OPPORTUNITY MATRIXThe size of the Russia and CIS market is nearly USD 10 bn (on theretail side); the Russian economy is on a high growth trajectorywith a population of around 150 mn people. The huge disparity ofper capita spending on healthcare in Russia atUSD 30 - USD 40 as compared to USD 300 - USD 400 in thedeveloped countries reflects the huge growth potential in themarket. The high prices of medicines and higher presence ofbranded medicines in developed countries is reflected in high percapita spends in these countries. In Russia/CIS low pricedgenerics still have significant market share and this reflects inrather low per capita spending on medicines in Russia/CIS.However, the market is slowly but surely moving to the highprice/high per capita spend matrix.

OUR RESPONSE• JBCPL is the third largest Indian pharma Company in

Russia.• Sales in newer geographies of Tajikistan and

Turkmenistan are growing and were close toUSD 1 mn in 2007-08.

• “Doktor Mom” was awarded the “Most Trusted European Brand” in cough and cold remedies segment by Readers Digest Magazine 2007 Survey for the seventh consecutive year.

• The Company’s Tablet/Liquid orals/SVP/LVP and Ointment manufacturing facility (T10 at Panoli) has received GMP approval from MOH–Ukraine which helps consolidate and expand the Company’s presence in the Ukraine market.

We Russianslove BMW

andDoktor Mom- Komsomolskaya Pravda

(Leading Russian Newspaper)

9

REGISTRATIONWith significant changes in product registration regulations in theRussian market, which are quickly moving towards harmonizationwith the European Union, the Company initiated multiple lifetimeregistrations since April, 2007.

FUTURE FOCUSDuring 2008-09, the Company plans to introduce a novel woundcare product, an allopathic cough syrup and analgesic /anti-spasmodic. Launch of newer products will help de-risk theseasonal business of the Company as these products have yearround demand.

The Company’s own warehouse in Moscow will help in themarketing of new products as established distributors are reluctantto store new products till they achieve substantial sales volumes.The company also plans:

• To make further inroads into Eastern Europe, Poland, Hungary, and the Czech Republic (Doktor Mom range of products are already marketed in Romania and Bulgaria).

• To initiate marketing activities and further strengthen its presence in Tajikistan and Turkmenistan.

• To initiate marketing activities and further strengthen its presence in Tajikistan and Turkmenistan.

J. B. Chemicals & Pharmaceuticals Ltd.

10

REST OF THE WORLD

Comprises of 28 countries across the world and includes SouthAfrica, Latin & Central America, Australia, Asia, South-East Asiaand Gulf Middle East.

STRATEGIC FORWARD THINKING INITIATIVES

1. Niche productsGlobally, the scenario of blockbuster products going off patentand generic drugs entering the market place, has paved the wayfor cut-throat price competition. To stay clear of this price war, theCompany has consciously and strategically focused on extendingits presence to niche product segments such as contrast mediaand lozenges.

a) Contrast Media Products:The Company has demonstrated its competence in marketingContrast Media Products in India and is now acquiringregistrations in various semi-regulated markets. With new state-of-the-art manufacturing facility in place, the Company will register itsproducts in various regulated markets of USA, Canada, Brazil,South Africa & Australia to get a significant share of the untappedpotential of generic supply in these markets. Within this segment,there are barely 1-2 generic options available as globally the salesare through innovator companies - branded product sales.

b) Lozenges:The Company has a state-of-the-art manufacturing facility forlozenges which has been approved by TGA-Australia recently. The

Company has launched private label lozenges inUSA/Canada/Australia with the objective of establishing a strongpresence within the lozenges segment in these regulated markets.With the Company’s credentials as a quality supplier, theCompany aims to be associated with strong OTC partners toeventually launch the mother brand – Doktor Mom into theseregulated markets. While Doktor Mom is a very established brandin Russia, in the rest of the world the same product is sold asZecuf, a USD 2.25 mn brand growing steadily. Besides buildingown brands in the Lozenges segment, the Company plans toproduce equivalents of all the top global Lozenges.

2. Inorganic routeTo accelerate growth, the Company has identified the inorganicexpansion route with strong local players who possess a goodproduct pipeline and have well-established marketing anddistribution networks. The Company intends to collaborate withthem either through the acquisition of dossiers or through equityparticipation. The Company will support the overseas partnerswith their manufacturing and research capabilities with theobjective of delivering cost-effective manufacturing solutions.

3. Focused market building strategyThe Company’s long-term vision is to de-risk geographically bycreating large markets outside Russia and leverage its strongbrand equity across other promising geographies. The Company’sfocused markets for growth outside Russia/CIS countries are: A. South Africa, B. Australia, C. Latin America: Brazil / Venezuela.



A: FOCUSED MARKET –SOUTH AFRICA

OPPORTUNITY MATRIXSouth Africa is a USD 4 bn market with a tremendous potential togrow as barely 1/3rd of the population has access to medicine.

OUR RESPONSEWith this market being highly regulated and the registrationprocedure taking 3 to 5 years, the Company’s strategic thinking offorging alliances and partnerships has paid off. The investment inBiotech Laboratories (Pty) Ltd. to tap the lucrative South Africanmarket is beginning to show results with the Company acquiringregistration files of multinational companies in South Africa forsupply under site variation. Leveraging the alliance the Companycontinues to be focused on acquisition of brands with the sitevariation manufacturing of products transpiring at the MCC-South

Africa approved facility at Panoli, India. The Company is exploringopportunities to acquire dossiers from large multinationalcompanies. The Company also plans to secure voluntary ARVlicenses to sell through alliance partners and distributors andprovide quality products in a reliable and sustainable manner forthe South Africa & Sub Saharan African markets. In fact, Biotechhas recently acquired voluntary licenses of 5 HIV products to bemanufactured locally and then marketed in South Africa at costcompetitive rates as part of the local government’s policy topromote generic medicines developed to reach maximumpopulation. The licensing arrangement also allows Biotech tomarket the same products in the Sub Sahara region, if these HIVproducts are manufactured in South Africa.

JBCPL also plans to expand its product basket in South Africa byoffering injectables with a robust product pipeline of 30 products(first generation generics) under development.


B: FOCUSED MARKET –AUSTRALIA

OPPORTUNITY MATRIXThe size of the market is nearly USD 4.5 bn on the ethical sideand USD 1.25 bn on the OTC side.

OUR RESPONSE• Tied-up with an established OTC company for the

supply of lozenges products through them.• Registered Zecuf Lozenges in Australia through TGA

approval of Daman Lozenge facility resulting in prompt establishment of business.

• Initiated site variation manufacturing of products, filing

of dossiers by the Company’s marketing partners and aligning with other companies to expand the scope of its lozenges business by registration of products through them.

• With the Company’s main focus being the cold and cough segment, the product range under development iscompletely customized to the climatic conditions of the country and the choice is spread across 10 distinct products offering different uses such as specific cold andcough products for day and specific soothing products enabling a “cough-free” night sleep. This range promisesto be one of the largest offered by any Company in the regulated Australian market.


C: FOCUSED MARKET –LATIN AMERICA – BRAZIL / VENEZUELA

OPPORTUNITY MATRIXBrazil is the second largest pharma market in Latin America, 10thlargest market in the world and the largest one for generics withthe market size estimated at USD 12.4 bn growing at 44% perannum (generic business accounts for 10 per cent of the totalpharmaceutical markets in Brazil i.e. approximately USD 1.5 bn).

The market is well developed and rapidly expanding as the localgovernment is in favour of the generic market developmentresulting in several overseas companies setting up base hereeither through subsidiaries or through the inorganic route ofacquiring existing local companies.

OUR RESPONSE• Identified niche products: Contrast media

products, Nifedipine XL and IV products will offer the Company a strong opportunity to establish itself as a major player in these markets.

• Strategic partnerships: The Company has tied up with a large local Company specializing in hospital distribution marketing business to promote its own Contrast Media products. Through this tie-up, JBCPL will offer contrast media products for which facility approvals are in progress.

• Regulation/Approvals: Brazil is a highly regulated market and the Company expects inspections of its facilities and filing of dossiers to takeplace in 2008-09. The Company’s clinical study work has already commenced and it is confident of entering this market in 2009.

• Direct presence: The Company is also exploring options to set base directly in the market.

Other region highlights

• Zecuf is building into a strong OTC brand in the Rest of the world market region (major focus being onVietnam, Algeria, Iraq & Uganda) with revenue crossing USD 2.25 mn in FY 07-08.

• Private Label lozenges offered for US market after successful NBE Certification.

• For high growth regions like Vietnam, Kenya, Uganda, & Tanzania the Company has countrymanagers and will be appointing new country managers in Thailand, Philippines & Colombia.

• Nicardia is number 1 in Sri Lanka and Thailand amongst all calcium channel blockers in the country & Metrogyl also ranks as number 1 in Sri Lanka.



OPPORTUNITY MATRIXThe Indian pharmaceutical market is valued at Rs 32,096 crores(MAT basis) and is growing at the rate of 14.8 per cent per annum.The Company is present in both the chronic and acute segmentswhich are showing double digit growth in the domestic market.

With the economic boom, the spending capacities of the urbanand rural market have increased substantially and with propermarketing strategy, the Company is confident of encashing thisboom.

OUR RESPONSE• The Company has achieved turnover of Rs 236 crores;• Nicardia Retard, Metrogyl group and Rantac group

have shown improvement in prescriptions. • The margin of sales from the institutional sales

segment has also improved.• Carried out extensive rural marketing exercises in 8 states

to penetrate the market.

NEW PRODUCTSDuring the year, the Company launched three new products:

Cilacar (Cilnidipine) - the first dual calcium channel blocker in India;Nicardia XL which has a novel osmotic release technology againfor the first time in India. The Company is confident of convertingboth these products into mega brands in the next two years. TheCompany also introduced Kvion – Natural Vitamin K27 – atreatment for osteoporosis (in addition to the existing productCalbeir which prevents bone loss). This new product will help inthe building of new bones.

With a strong therapeutic representation in gastroenterology,anti-ulcerants, anti-infective, radiology and cardiology, CVS andpain management, JBCPL’s product offerings are tailored to covermost of the major therapeutic segments. Efforts are underway toconsolidate the existing therapeutic segments with improvedfocus on the cardio vascular and ophthalmic segments. TheCompany will also be increasing focus on the gastroenterology &orthopedic segments. This is a part of the Company’s strategy toincrease its focus on developing a superior product mix. Backedby investments in quality manufacturing facilities and strong brandequity, the Company is confident of improved performance in theyears to come.

DOMESTIC MARKET


One of the Company’s biggest strengths lies in its vibrant andproductive R&D function that has continuously placed JBCPLahead of its peers through the consistent development ofniche technology, processes and products.

FORMULATIONSHighlights of the R&D activities carried out in FY 07-08:

• Completed development work on one Abbreviated New Drug Application (ANDA) and five projects for theUS market.

• Developed solid dispersion technique to improve thedissolution of poorly water soluble drug addressing the gastroenterology segment.

• Completed development work for three injectables forthe South African market. This includes two anti-bioticand one anti-coagulant (prevents clots).

• Amongst the first few companies to complete analytical standardization of herbs for export orientedproducts such as lozenges & cough syrups paving theway for its entry into the European, U.S. and other regulated markets.

• As a part of the macro business strategy to strengthenits best selling product and attain worldwide

&DEVELOPMENTRESEARCH

leadership in the Lozenges segment, the Company’sformulation research initiatives have successfully achieved taste masking for bitter tasting medicines catering to the prescription market.

• The R&D efforts achieved mouth dissolving capabilities highly useful for the pediatrics and geriatrics segment.

• Capitalising on its world-class lozenges manufacturing facility, the Company is also developinga portfolio of Lozenge products for the Canada market.

• Lastly, the R&D team is also working on developing products with “Patent Non Infringing Technology”.

BULK DRUGS / API• Commenced commercial manufacture of Cilnidipine,

a calcium channel blocker addressing theanti-hypertensive segment, a first by any Company inthe country.

• Successfully developed a commercially viable process for Contrast Media known to very few in theindustry till date.




FUTURE FOCUS• The Company plans to enter into the manufacturing of

Lozenges products for the regulated market for whichit is achieving standardization at the Daman (Kadaiya)plant.

• The Company also plans to develop a portfolio of export-oriented injectable products for manufacturingat its new state-of-the-art injectable facility at Panoli.

• The Company enjoys the technical capabilities to develop products meeting the US / EU guidelines andhas invested in building adequate infrastructure totake up “Contract Research projects” meeting the above guidelines.

• The Company plans to scale up its GMP facility for standardization of conventional tablets & NDDS dosage forms created at R&D – Wagle (Thane) unit.

MANUFACTURING FACILITIES

Belapur Bulk Drugs

Panoli Bulk Drugs, Tablets, SVP,LVP, Liquid Orals, Topicals

Ankleshwar Tablets, Liquid Orals

Daman Tablets, Powder, Lozenges

USFDA approved state-of-the-artmanufacturing plant at Panoli


Jyotindra B. ModyChairman & Managing Director

Dinesh B. ModyWhole-time Director(Administration)

Shirish B. ModyWhole-time Director(Marketing)

Bansidhar S. Mehta Durga Dass Chopra Bharat P. MehtaWhole-time Director(Planning & Development)

Pranabh D. ModyPresident & Whole-time Director(Operations)

Dr. Rajen D. ShahWhole-time Director(Research & Development)

Rajiv C. Mody Dr. Niranjan N. Maniar Dr. Satyanarain Agarwala(Alternate Director to Vishnu D. Patel)

Rohan P. Shah Vishnu D. Patel Kamlesh L. UdaniExecutive Director(Technical & Production)

Mahesh K. Shroff

BOARD OF DIRECTORS

J. B. Chemicals & Pharmaceuticals Ltd. 21

CORPORATE INFORMATION

R & D CENTRES

Plot no. A-154/155Wagle Industrial EstateThane (West) 400 604

Plot No.128/1GIDC Industrial AreaAnkleshwar 393 002

Plot No.5, Phase IVGIDC Industiral AreaPanoli

FACTORIES

Plot Nos. P-10, Shiv Mahape, P.O. GansoliThane-Belapur Road, Navi Mumbai 400 701Maharashtra

Plot No.128/1, 128/1/1, 128/2, 129/1 & 129/B1GIDC Industrial Area, Ankleshwar 393 002

Plot Nos. 215 to 219, 304 to 310 and Plot No.4 & 5,Phase IVGIDC Industrial AreaPanoli 394 116

10, Golden Industrial Estate, Opp. Somnath TempleSomnath Road, Dabhel, Daman 396 215

Survey No.101/2 & 102/1Daman Industrial Estate, Airport Road, KadaiyaDaman 396 210

VICE PRESIDENT & COMPANY SECRETARY

Beejal Desai

BANKERS

Bank of IndiaState Bank of IndiaBNP ParibasStandard Chartered Bank

AUDITORS

J. K. Shah & Co.Chartered AccountantsMumbai

COST AUDITORS

N. I. Mehta & Co.Mumbai

REGISTERED OFFICE

'Neelam Centre', 'B' Wing4th Floor, Hind Cycle RoadWorli, Mumbai 400 030Tel No.2493 0918 (4 lines)Fax No.2493 0534, 2493 9633

REGISTRARS & TRANSFER AGENT

For Physical & DematDatamatics Financial Services Ltd.Plot Nos. A/16 & 17, M.I.D.C., Part-B,Cross Lane, Andheri (East)Mumbai 400 093Tel No. (022) 66712151-56Fax No.(022) 2832 0382


INDIA

1 60, Krishnappa Agraharam Street,Ground Floor, Kondithope, Chennai - 600 079

2 23-B, Ekbalpore Lane, Kolkata,West Bengal - 700 023.

3 24 / 8, Industrial Area, Phase II,Ram Darbar, Chandigarh - 160 002.

4 81/2, Swastik Society, Navrangpura,Ahmedabad - 380009.

5 Shanti Niketan,1st Floor, Frazer Road,Behind Times of India Bldg., Patna - 800 001.

6 1/135, A Kevi Warehouse,Varakkal Temple Road, West Hill,Calicut - 673 005.

7 Old Commissioner Compound,Radheshyam Lane, Ranchi - 834 001.

8 230, Patpar Ganj, Chilla Road,Mayur Vihar, Phase I, Delhi - 110 091.

9 Jaswanta road, Panbazar,Guwahati 781 001.

10 B.U.Complex, Daldal Seoni Road,Mova, Raipur - 492 005.

11 E-62, Hari Maszid, Transport Nagar,Kanpur Road, Lucknow - 226 012.

12 A-5, Sethi Colony, Agra Road,Jaipur - 302 004.

13 Near Hotel Surbhi Palace, Chakrata Road,Dehradun - 248 001

14 No.37/4, Kandala Towers, 2nd floor,South Cross Road, Near Yediur lake,Basavanagudi, Bangalore - 560 004.

LIST OF BRANCHES: INDIA & ABROAD

15 Room no. 2, 2nd Floor, 5, Kustia Road,Kolkata - 700039

16 c/o. Modi Associates, Old College Lane,Nimchori, Cuttack - 753 002.

17 51,Patel Road, RamnagarCoimbatore - 641 009.

18 K.N.Mathew Building, Market Road,Ernakulam, Cochin - 682 011

19 S.S.Reddy Complex, Chitra Reddy Colony,Sikh Village, Tarbund, Secunderabad 500 009.

20 Off 122-123 Tawakkal Layout,Samajbhushan Grihanirman society,Opp. Castrol Depot, Wadi,Nagpure - 440 023.

21 Godown no.8, Ram India Warehousing corpn.,125, Datta Nagar, Off Pune-saswadRoad,Wadki, Pune - 412 308

22 26-A-5 Narayan Plaza, Chandivali Road,Andheri(E), Mumbai - 400 072.

23 1, R.K.Puram, Near Naveen Mandi,Delhi Road, Meerut - 250 001.

24 B-4/E, Big Industrial Estate, Chandpur,Varanasi - 221 106

25 4/5, Sector 'F', Bakhtawar Ram Nagar,Near Ajit & Ajay Club, Indore - 452 001.

26 Khidmat Trust Building, The Bund,Regal Lane, Srinagar - 190 001.

ABROAD

1 SADOVAYA 2 ‘KEMPA CENTRE 3 Dr. Alisher DjabbarovKudrinskaya Str. 3, 1, Vasilkovskaya Ulitsa, Pushkin Str. House No.7Moscow 123242. Kyiv, Ukraine. Left Wing,Russia. 70000 Tashkent,

Uzbekistan.


RATIO ANALYSIS

Percentage

RATIOS FOR THE FINANCIAL YEAR 2007-08 2006-07

Export Turnover / Total Turnover 58.23 57.05

Domestic Turnover / Total Turnover 41.77 42.95

Employee Cost / Total Income 15.54 13.79

Interest / Total Income 3.11 2.01

Interest Cover [ PBIT / Interest ] 4.04 8.09

PBIDT / Total Income 14.22 18.29

PBDT / Total Income 11.42 16.28

PAT / Total Income 8.93 12.69

RONW [ PAT / Net Worth ] 11.16 16.86

ROCE [ PBIT / Capital Employed ] 9.69 14.83

Growth RatiosGrowth RatiosGrowth RatiosGrowth RatiosGrowth Ratios

Growth In Exports Turnover 5.03 16.18

Growth In Total Turnover 2.91 13.99

Domestic Turnover, Total Turnover and Total Income includes Excise.


INDUSTRY SCENARIO

The pharmaceutical industry saw a decline in its overall growth in FY08, which has been attributed to fewer drugs going off patent in2007, uncertainties over regulatory policies in various markets,such as Germany, and increasing competition and pricing pressurein the US market. The rupee appreciation during this period alsoadversely affected the market scenario.

However, after a period of lull, growth in the pharmaceuticals sectorseems set to accelerate once again from the financial year ending2009. Opening up of the global generics market and newer growthopportunities, such as Contract Research and ManufacturingServices (CRAMS) which are expected to augur well for the industry.

GLOBAL MARKET SCENARIO

Globally too, the industry witnessed a downtrend. Patent expirationon branded products, associated increase in the use of generics,and increased pressure from consumers/regulators to control costshampered growth in this sector during the last fiscal. These factorscombined to limit the sales growth, not only in the US and theEuropean markets but also in the Japanese pharma market. Acrossthe world, heightened safety scrutiny and healthcare legislation isalso slowing down the introduction of new medicines.

Despite the slowdown in the overall global pharma market, therehas been an impressive expansion of the generic market in Europeand the US, largely on account of the increased patent expiry andthe ongoing concerns of the high healthcare costs.

EMERGING MARKETS HOLD THE KEY

The global slowdown in the Pharma sector has triggered a uniquescenario, where, for the first time ever, the seven largest marketswill contribute to just half of the overall growth of the pharmaceuticalmarket. In contrast, the seven emerging markets will contributenearly 25%, thereby ushering in a major shift in growth in favour ofthe emerging markets, including India, China, Russia and Mexico.The seven emerging markets of China, Brazil, Mexico, South Korea,India, Turkey and Russia are expected to grow by 12-13% nextyear to USD 85-90 bn.

While the expansion into the US & European generic marketscontinues, Indian pharma companies have already started diversifyingtheir revenue portfolio into newer markets like China, Japan, Braziland Mexico. These companies are also capitalizing well on the hugeCRAMS opportunity that has opened up in recent times.

INDIAN PHARMACEUTICAL INDUSTRY

Currently valued at USD 6 bn and growing at over 13% annually,Indian pharmaceutical companies now supply almost all the country’sdemand for formulations and nearly 70% of demand for bulk drugs.

According to a McKinsey study, the Indian pharmaceutical industryis projected to grow to USD 25 bn by 2010, whereas the domesticmarket is likely to more than triple to USD 20 bn by 2015, from thecurrent USD 6 bn, to emerge as one of the leading pharmaceuticalmarkets in the next decade. Diversification into various markets,

along with contract research and clinical trials are helping Indiancompanies to explore new avenues in the industry. With its diverserange of pharmaceutical formulations, herbal remedies and APIs,JBCPL is well poised to encash the growth in this critical sector.

EXPORTS

Faced with increasing domestic competition, Indian companies hadshifted their focus to exports. The strategy has paid off and overall,exports have increased exponentially in the last couple of years. Anindustry study projects exports to rise by 18% Y-o-Y within thenext two years, especially in the area of generic drugs, since asmuch as USD 60 bn worth of drugs will go off patent over thisperiod in the US and Europe.

JBCPL’s marketing strategic direction has been in sync with industrytrends and developments. While continuously consolidating andexpanding its presence in Russia, Ukraine and other CIS countries,the Company’s efforts to further strengthen its export base in theregulated markets in the US, Europe, South Africa, Latin Americaand Australia have remained undiminished.

JBCPL’s response to the demands of globalization is manifest inthe construction of an ultra-modern Export Oriented Unit with aunique design that guarantees safety, purity and quality of the highestinternational standard.

The Company’s total exports for the financial year ended 2008stood at Rs.32897.32 lakhs as against Rs. 31321.41 lakhs in theprevious year, registering a healthy growth of about 5%.

MANUFACTURING

JBCPL has a number of manufacturing plants at four locations tomanufacture a diverse range of bulk drugs, intermediates,pharmaceutical specialties, radio-diagnostics and herbal remedies.

The Company’s manufacturing operations, spread acrossMaharashtra and Gujarat, are approved by renowned internationalregulatory authorities, giving it the cutting edge needed to grow inthe globally competitive environment of the day. Its state-of-the-artmanufacturing facilities are built and operated according to the cGMP.Three of its facilities are approved by the USFDA (two of them arethe bulk drug units at Belapur and Panoli and one is a formulationunit - tablets at Panoli). These are also approved by reputedinternational inspection agencies for all major products.

QUALITY

In the pharmaceutical industry, quality is critical and is deeplyembedded in each and every fragment of the business.

During the year inspections were conducted by seven regulators,including: USFDA, TGA Australia, ZAB Germany, MCC South Africa.The endorsement of quality processes is evident as the inspectionshave not been restricted to one facility and include the tablet & lozengesfacilities, multipurpose injectable plant and API units.

In the year under review, over 25 customer audits were also carriedout across facilities and continuous self-monitoring of themanufacturing facilities (own and contract) is a regular feature.

MANAGEMENT DISCUSSION AND ANALYSIS


FacilityFacilityFacilityFacilityFacility ActivitiesActivitiesActivitiesActivitiesActivities Accreditations / ApprovalsAccreditations / ApprovalsAccreditations / ApprovalsAccreditations / ApprovalsAccreditations / Approvals

TI10-Panoli Tablets (1) MoH–Ukraine(2) TGA-Australia(3) EU (Germany)(4) TFDA–Tanzania

IV14-Panoli Injectables/ MoH–Ukraine Topicals

L6-Panoli Liquid Oral MoH–Ukraine

LT15-Daman Lozenges/ MoH–UkraineTablets/Sachets

Laboratory Information Management SystemLaboratory Information Management SystemLaboratory Information Management SystemLaboratory Information Management SystemLaboratory Information Management System

For better control over the laboratories at diverse locations, theLaboratory Information Management System (LIMS) was installedand implemented at all the laboratories during the year. This SAP-approved system facilitates easy overall integration.

The three-tier continuous monitoring systems ensures that qualityis sustained through all the Company processes and product lines.

R&D

With its strategic focus on R&D, the Company is totally committedto responding promptly to market needs by developing qualityproducts at affordable prices for the masses.

The Company’s focus during 2007-08 was on its product pipelineand also on exploring CRAMS opportunities for other regulatedmarkets of US/EU. The thrust was on the development of result-riented research that aids market development and allows theexpansion of the existing product range.

Product RegistrationsProduct RegistrationsProduct RegistrationsProduct RegistrationsProduct Registrations

JBCPL’s commitment to expand its geographic footprints and tapthe most lucrative overseas market is evident from the speed andquantum of product registrations it has to its credit.

FormulationsFormulationsFormulationsFormulationsFormulations

Total number of countries 69

Number of products registered in 2007-2008 124

Total Number of products registered till date 1075

Total Number of products under Registration / Re-regn 751

ANDAsANDAsANDAsANDAsANDAs

Presently the Company has ANDA approvals for Ciprofloxacin,Fluconazole, Atenolol and Sodium Dicloefenac. It also filed for onemore Abbreviated New Drug Application (ANDA) – an applicationfor a US generic drug approval for an existing licensed drug. This isin line with the Company’s geographic de-risking strategy and plansfor foraying into regulated markets.

The Company has received ANDA approvals for Diclofenac DelayedRelease Tablets 75 mg (eCTD), achieved in the shortest possibletime of 18 months as against the slated time of 30 months and thecommercial production of the same has commenced.

PatentsPatentsPatentsPatentsPatents

The Company continued to add to its list of patented products.During the financial year, it received the “New heterocycliccompounds for Therapeutic use” patent.

APIs

As of date, JBCPL produces a total of 8 APIs. The Company is one ofthe largest manufacturers of Diclofenac Sodium and Metronidazole. The

Company is working on about 6 products, apart from regularimprovements on the yield and costing of our existing products.

FORMULATIONS

In order to establish a strong presence in regulated markets, theCompany is currently engaged in getting into the private lozengesmarket through its TGA-Australia approved state-of-the-artlozenges manufacturing facility.

CONTRACT RESEARCH AND MANUFACTURINGSERVICES (CRAMS)

Having already ventured into the field of providing customizedmanufacturing, JBCPL currently has contract manufacturingcontracts with companies in the US, Europe, Australia and SouthAfrica. Armed with the necessary technical capabilities to developproducts meeting the US / EU guidelines, the Company hasestablished adequate infrastructure to take up “Contract ResearchProjects” meeting the above guidelines.

NOVEL DRUG DELIVERY SYSTEMS (NDDS)

A niche product for the anti-hypertension segment, the NDDSformulation is one of the key offerings of JBCPL. The Company’sNDDS research focuses on controlled release competencies leadingto NDDS patents being granted in the US for controlled releaseformulations for various treatments.

During the year, the Company completed the standardization ofNovel Drug Delivery Systems (NDDS) formulation with an “OsmoticDrug Delivery System” till exhibit batch, paving the way for itscommercial release in about two years time. The Osmotic DrugDelivery System will also provide a technology platform that can beused for strengthening the offerings in the cardiovascular andhypertension therapeutic segment where extremely precise releaserate is required. The Company is exploring partnerships with majorgeneric players to cross-sell this technology.

HERBAL DRUG RESEARCHThe Company has achieved analytical standardization of herbs inexport-oriented products like Lozenges & Cough Syrups makingthe Company amongst the very few in the country to achieve this.This feat will enable the Company to explore the European, US andother regulated markets for its flagship lozenges products.

MANAGEMENT DISCUSSION AND ANALYSIS (CONTD.)


HUMAN RESOURCES

JBCPL has always considered its employees to be one of itsstrongest assets and among the most important of its stakeholders.To ensure maximum utilization of its HR capacity, the Company haslaunched an extensive training programme for its staff at everylevel. Continuous expansion of its staff strength is another keycomponent of the Company’s HR module, which has been animportant factor in the Company’s growth over the years.

Man power DetailsMan power DetailsMan power DetailsMan power DetailsMan power Details

JBCPL presently has a staff strength of about 2837. The Companyplaces great emphasis on training of its employees. The Companyappreciates the need to have a team of employees who are in tunewith latest trends and developments in the industry, in the countryand overseas.

The Company aims to encourage and assist in the training, re-training and career development of employees and conducts trainingprograms for junior level employees and development programsfor junior managers.

FINANCIAL OVERVIEW

In the bygone fiscal, the sales of JBCPL increased by about 3% toRs. 56499.47 Lakhs from Rs. 54904.07 Lakhs in the previousfiscal. The Company’s net profit after extraordinary items stood atRs. 5169.13 Lakhs as compared to Rs. 7102.28 Lakhs in theprevious year. The net profit would have been higher but for thefactors/reasons as discussed at length in the Chairman’s speech.

INTERNAL CONTROLS

In order to ensure total protection of assets and their unauthorizeduse or disposition, JBCPL has consistently followed a system ofstringent internal controls, across all levels of its value chain. Theinternal controls system - based on existing laws, regulations andthe Company policies - comprises regular internal audits,management reviews and use of standard policies and guidelinesaimed at ensuring reliability of financial and other records.

A major achievement in this area during 2007-08 was initiation ofSAP across modules, which aimed at maximizing the use of ERPsystem for planning. The project, initiated in November 2007, wasbased on the big bang approach, covering various modules, namely:Sales & Distribution (domestic and exports), Finance & Controlling,Materials Management, Production Planning, Plant Maintenanceand Project Systems.

OPPORTUNITY OUTLOOK

In 2008-09, around 11 leading drugs (including four blockbusterdrugs) worth USD 29 bn will go off patent in the US. It is projectedthat another USD 44 bn worth of drugs will go off patent in 2010.By 2011, drugs worth about USD 80 bn will go off patent.

(Source :(Source :(Source :(Source :(Source : First Global, India Research, Pharmaceuticals Sector). First Global, India Research, Pharmaceuticals Sector). First Global, India Research, Pharmaceuticals Sector). First Global, India Research, Pharmaceuticals Sector). First Global, India Research, Pharmaceuticals Sector).

For emerging markets like India and China, this offers a lucrativeopportunity in the pharma business.

According to a report, global innovator companies are undertremendous pressure because of their weak pipelines, increasedgenericisation, fewer drug approvals and the resultant pressure ontheir margins. In the circumstances, Indian companies are poised tobenefit from the outsourcing of non-core functions like manufacturing(API, intermediates or formulations) and a part of research, with theCRAMS opportunity slated to touch USD 55 bn by 2010. Withintegration of most of the acquired entities for the Indian companiesdone, it is believed that some pharma players in this space are poisedto deliver more than 20%+ growth over the next two years.

DOMESTIC MARKET

The strong focus on the international market notwithstanding, Indiancompanies still derive about 35-50% of their revenues from thedomestic market. The growing demand in the domestic markethas been attributed to rising population figures, increase in thesurvival rate and rising income levels.

The Company’s domestic presence is well established under the brandname of Unique, with a particularly strong presence in semi-urban andrural markets. The Company is now planning to go in for furthercoverage of rural markets through taxi tours in eight identified states.

It also plans to improve focus on the cardio vascular basket and theophthalmic range and concurrently also increase focus on thegastroenterology & orthopedic segments through the Auster division.

INTERNATIONAL MARKET

The Company has identified South Africa, Australia, Latin America(Mexico, Brazil & Venezuela) as its focus markets of growth, apartfrom Russia & CIS, where it already has a considerable presence interms of infrastructure and marketing/distribution. Indonesia (SouthEast Asia) is another country that the Company is looking at closelyto spread its geographic footprints. The focused products forachieving growth are Contrast Media Products & Lozenges.

RUSSIA & CIS

In line with its policy to diversify and expand geographically, JBCPLhas already undertaken large-scale improvement of its marketinginfrastructure in Russia & CIS. The Company’s representative officesin Moscow, Kyiv and Tashkent are fully geared up to exploit thehuge business potential existing in these markets.

The Company’s focus on product development for the Russianmarket will be on expansion of therapeutic segments (anestheticand analgesic segments), formulation research to developintravenous injectables and expansion of the range of products inthe anti cold segment. The Company’s wholly owned warehousesubsidiary in Moscow is also focusing on ensuring continuity ofsupplies due to sudden demand peaks, while facilitating introductionof new products. The Company is also seriously consideringimproving its local presence through effective distribution ofproducts from its local subsidiary.



REST OF THE WORLD

S. AfricaS. AfricaS. AfricaS. AfricaS. Africa

Acquisition of registration files of multinational companies in SouthAfrica for supply under site resulted in good business on Tender in2007-2008.

The Company now plans to focus on development of productsspecially suited for the South African market. Several formulationsare in the pipeline for the coming year.

Australia & UKAustralia & UKAustralia & UKAustralia & UKAustralia & UK

In the Australian market, the Company plans to focus on the cold andcough segment. This range is completely customized to the climaticconditions of the country and the choice is vast — spread across 10distinct products offering different uses such as specific products forday and specific soothing products enabling a “cough-free” nightsleep. These 10 products would make it one of the largest productrange offered by any Company in the regulated Australian market.JBCPL also has similar development plans for the UK market.

RESEARCH & DEVELOPMENT

Contract research for ANDA/TGA dossier and for filing one NDA inthe US market rank high in the Company’s plans for 2008-09. TheCompany also plans to enter manufacturing of Lozenges productsfor regulated market and to develop products for Russia exports.Development of portfolio of export oriented injectable products formanufacturing at the new state of art injectable facility IV-17 createdat Panoli are also on the anvil.

In the Herbal Drug Research, using the success in standardization,the Company is also developing several new formulations that arelikely to be ready for launch in the near future.

Other plans comprise developing dental gel and vaginal gel productsof new antibacterial drug molecules.

Another proposed key initiative of the Company for the coming yearis development of Solid Dosage Forms across a variety of segments.Simultaneously, the Company also has plans to undertakePharmaceutical research on Injectables (LVP , SVP & ContrastMedia), Herbal Formulation such as Syrups, Medicated Lozengesetc. & Topical Semisolid Dosage Forms.

CHALLENGES & THREATS

The Indian pharma industry is currently in the midst of large-scalere-orientation, with more focus on drugs developed in-house andcontract research or contract production for Western drug makers.But the sectors development is slowed by major infrastructuralproblems. There are, above all, qualitative and quantitativeshortcomings in the energy and transport sectors.

Up until 2015, pharmaceutical sales are expected to rise by 8%p.a. to just under EUR 20 bn, compared with an increase of 6% inthe world as a whole and 5% in Germany. Even then, India’s sharein the world pharmaceutical market would only come to slightlyover 2% (Germany : 7%). In Asia, India looks set to lose marketshare, as other Asian countries are registering even stronger growth.

A major risk factor for the industry is the appreciating Rupee v/s Dollarand government pricing policy combined with patent implementation,which has drastically reduced the launch of new molecules.

The Company has also identified serious concerns in the form ofthe militant attitude of trade associations and the 8-hour workschedule of medical representatives in many states, affectingbusiness potential.

Furthermore, CRM investment of other companies has increasedsignificantly, as a result of which top doctors in urban markets aregetting inclined to particular Company products.

TACKLING CHALLENGES

JBCPL, however, is effectively positioned to tackle the variouschallenges. The Company has taken a slew of measures, such asramping up of domestic sales, better product mix and improvedoverall efficiency, to counter the threats from other players & theobstacles in the growth trajectory of the pharma industry as a whole.

To mitigate the currency risk in future, JBCPL is booking forwardcover for all its receivables on a month-to-month basis.

On the strength of its core competencies and various initiatives, theCompany is confident of achieving improved business performancein the FY 08-09 & onwards, barring unforeseen circumstances.

As part of its organic growth model, the Company’s strategy is toconsolidate its existing range and to extend into new therapy areas.

With these measures in place, the Company is confident of offsettingthe higher depreciation charges, interest cost and marketing & employeecosts it has incurred through significant investments in the creation ofnew manufacturing facilities, marketing and human resource.



DIRECTORS' REPORT

To the Members,

The Directors present with pleasure the Thirty-Second AnnualReport and Audited Statement of Accounts of the Company forthe year ended 31st March 2008.

FINANCIAL RESULTS

(Rs. In Lakhs)

For the year ended

31st 31st

March March2008 2007

Sales (includes Excise) 56499.47 54904.07

Profit before Interest and Depreciation 8227.64 10235.56

Less: Interest 1615.22 1124.88

Profit before Depreciation 6612.42 9110.68

Less: Depreciation 1701.66 1133.39

Profit before Tax 4910.76 7977.29

Less: Provision for Taxation

Current Tax 584.00 420.00

Deferred Tax (164.36) 335.01

Fringe Benefit Tax 106.40 120.00

MAT Credit (787.00) 0.00

5171.72 7102.28

Less: Short Provision for Taxation 2.59 0.00

for earlier years

Profit After Tax 5169.13 7102.28

Add: Surplus Brought Forward 2000.00 1749.89

Available For Appropriations 7169.13 8852.17

Appropriations:

Interim Dividend 0.00 927.29

Dividend Distribution Tax on 0.00 130.05Interim Dividend

Proposed Final Dividend 421.63 1264.90

Dividend Distribution Tax on Proposed 71.66 214.97Final Dividend

Transfer to General Reserve 4675.84 4314.96

Balance carried to Balance Sheet 2000.00 2000.00

7169.13 8852.17

DIVIDEND

Your Directors are pleased to recommend a Dividend of Rs.0.50(25%) per Equity Share on a share capital of Rs.1686.53 Lakhs,divided into 8,43,26,350 equity shares of Rs. 2/- each, for thefinancial year ended 31st March, 2008.

The total Dividend Pay-out including Dividend Distribution Tax ofRs. 71.66 lakhs would absorb Rs. 493.29 lakhs.

OPERATIONS

The Company's Sales - Export and Domestic have increased to Rs.56499.47 lakhs as against Rs.54904.07 lakhs for the previous year,registering an increase of about 3%. Export contributed 58%whereas Domestic business contributed 42% to the company’s sales.The Net Profit is Rs. 5169.13 lakhs, compared to Rs.7102.28 lakhsin the previous year. The Company's aggressive pursuit to harnessopportunities in global as well as domestic market helped it posthigher sales, both in the international as well as the domestic market.Similarly, Net Profit of the Company would have been higher but forthe significant investments made in the Marketing (Domestic, Russia& CIS countries) including promotional/manufacturing personnel,foreign exchange fluctuation loss and higher financing cost.

The US Dollar Denominated exports of the Company have grownto US $ 81.80 Mn (Previous Year US $ 69.70 Mn) by an impressiverate of 17.40%. However, due to appreciating rupee v/s dollar thegrowth in rupee terms was only 6.40% on YOY basis whichtranslated into lower export sales realization by Rs.33.45 crores.Thus, due to the unprecedented appreciation of over 10% in RupeeV/s Dollar the entire exports in rupee terms came down considerably.To mitigate the currency risk, the Company is booking forwardcover for all its receivables on a month to month basis.

BUY BACK OF EQUITY SHARES

In view of the present position of the company in the pharmaceuticalindustry and it's future business prospects, it was felt that the deepfall in the market capitalization of the company was significantlymore than warranted by the general fall in the market indices. Thisled to great erosion in the wealth of the Company's shareholders.These facts were reviewed by the Board of Directors and the Boardconsidered it imperative that corrective measures must be initiatedin order to protect and enhance the shareholders wealth.

Therefore, the Board of Directors of the Company at their meetingheld on 8th April, 2008, approved, subject to such other approvals/consents, as may be necessary, the buyback of equity shares at aprice not exceeding Rs. 70/- per share and up to an aggregateamount of Rs. 29.52 crores, being 7.05% of the total paid-upcapital and free reserves as per the audited Balance Sheet as at31st March, 2007. The Company's decision was prompted by thereason that the current market price of the Company is quoted at aprice significantly lower than its intrinsic value.

The Company proposes to buy back shares listed on the BombayStock Exchange Limited ("BSE") and National Stock Exchange of


India Limited ("NSE") through open market purchases from time to time.

Meanwhile, the Company is in the process of making an Application under Regulation 4 of the Securities and Exchange Board of India(Substantial Acquisition of Shares and Takeovers) Regulations, 1997, (hereinafter called “takeover regulations”) seeking exemption fromapplicability of Regulations 11 & 12 & such other applicable regulations of the takeover regulations in relation to any increase (if any) in thepercentage shareholding of the promoters beyond the present shareholding of 55.50% of the paid-up Equity Share capital of thecompany comsequent to the proposed Buy Back of Equity Shares of the Company.

DISCLOSURE REGARDING EMPLOYEE STOCK OPTION SCHEME

Pursuant to the applicable requirements of the Securities and Exchange Board of India (Employee Stock Option Scheme and EmployeeStock Purchase Scheme) Guidelines 1999 ("the SEBI guidelines"), following disclosures are made concerning stock options vestedunder the ESOS 2004, ESOS 2005 and ESOS 2006. Such stock options have been granted and vested under the ESOS scheme interms of the approval of the shareholders accorded at the Extra Ordinary General Meeting of the Company held on 18th March, 2004.

10. The Pricing Formula:

An amount equal to ninety five percent of the average daily closing price of the shares of the Company quoted on National StockExchange of India Ltd. during the period of twelve weeks preceding the date of grant.

11. Employee wise details of options granted to:

i. Senior managerial personnel -

All stock options that have been granted by the Company as aforesaid, have been granted to management personnel as perthe scheme.

DIRECTORS' REPORT (CONTD.)

Sr. Requirements ESOS-2004 ESOS-2005 ESOS-2006No.

1 Options granted 4,75,000 5,63,240 5,47,000

2 Options vested 3,12,500 2,44,810 1,25,875

3 Options exercised 1,24,425 6,925 Nil

4 The total number of shares arising as a

result of exercise of option 1,24,425 6,925 Nil

5 Options lapsed 88,750 1,09,365 89,500

6 Variation of terms of Option There has been no There has been no There has been no

variation in the variation in the variation in the

terms of options. terms of options. terms of options.

7 Money realized by exercise of options Rs. 78,38,775/- Rs. 5,81,700/- Nil

8 Total number of options in force 2,61,825 4,46,950 4,57,500

9 Weighted-average exercise price of options whose

(a) Exercise price equals market price Rs. 63/- - -

(b) Exercise price is greater than market price - - Rs. 95/-

(c) Exercise price is less than market price - Rs. 84/- -

Weighted-average fair value of options whose

(a) Exercise price equals market price Rs. 20/- - -

(b) Exercise price is greater than market price - - Rs. 26/-

(c) Exercise price is less than market price - Rs. 35/- -


ii. Any other employee who receives a grant in any one yearof option amounting to 5% or more of option grantedduring that year -

None

iii. Identified employees who were granted option, duringany one year, equal to or exceeding 1% of the issuedcapital (excluding outstanding warrants and conversions)of the Company at the time of grant -

None

12. Diluted Earnings Per Share (EPS) pursuant to issue of shareson exercise of option calculated in accordance with[Accounting Standard (AS) 20 'Earnings Per Share'] -Rs. 6.12.

13. Impact of difference in calculating employee compensationcost using intrinsic value of the stock options and fair valueof the options on profits and on EPS -

The Company has calculated employee compensation costusing the intrinsic value of the stock options. In case, theemployee compensation cost would had been calculatedusing the fair value of options, the profit after tax for thefinancial year ended 2007-08 would had been lower byRs. 67.02 lakhs and earnings per share by Rs. 0.08.

14. A description of the method and significant assumptionsused during the year to estimate the fair values of options,including the following weighted-average information:

The fair value has been calculated using the Black ScholesOption Pricing model.

(i) risk- free interest rate : 6.85%

(ii) expected life (years) : 5

(iii) expected volatility : 36.96%

(iv) expected dividends : 3.19%

(v) the price of the underlying : Grant 2004-Rs.63.00

share in market at the time Grant 2005-Rs.95.20

of option grant Grant 2006-Rs.88.85

MANAGERIAL REMUNERATION

As regards Auditors’ Report relating to Note No. 21 of Schedule20-Notes on Accounts annexed to the Accounts, the same is selfexplanatory and doesn’t required explanation from the Boardof Directors.

RESEARCH & DEVELOPMENT

We have sharpened our focus on R & D, which is the need of thehour and will continue to commit significant funds to strengthen our

R & D capabilities to successfully counter the challenges posed bythe Product Patent Regime - post 2005 and also tap the largegeneric opportunity globally. The entire expenditure incurredtowards ANDA filings and product registrations is fully charged inaccounts. Please refer Annexure to Directors’ Report for details.

FIXED DEPOSIT

Fixed deposits from the public and shareholders outstanding withthe Company, which have matured but not claimed at the end of thefinancial year stood at Rs. 5.43 lakhs from 35 depositors. Sincethen the deposits amounting to Rs. 0.80 lakhs relating to 8depositors have been repaid / renewed. Depositors were intimatedregarding the maturity of deposits with a request to either renew orclaim their deposits.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of theCompanies Act, 1956, with respect to Directors' ResponsibilityStatement, it is hereby confirmed;

i. that in the preparation of the annual accounts for the financialyear ended 31st March, 2008, the applicable accountingstandards had been followed along with proper explanationrelating to material departures;

ii. that the Directors had selected such accounting policies andapplied consistently and made judgments and estimates thatwere reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of thefinancial year and of the profit or loss of the Company forthat period;

iii. that the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordancewith the provisions of the Companies Act, 1956, forsafeguarding the assets of the Company and for preventingand detecting fraud and other irregularities;

iv. that the Directors had prepared the annual accounts for thefinancial year ended 31st March, 2008, on a 'going concern'basis.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956,and Company's Articles of Association, Mr. Mahesh K. Shroff, Dr.N. N. Maniar, Dr. Rajen D. Shah and Mr. Rohan P. Shah, Directors ofthe Company, retire by rotation at the ensuing Annual GeneralMeeting and being eligible, offer themselves for re-appointment.

The information on the particulars of Directors seeking re-appointment as required under clause 49 of the Listing Agreementexecuted with the Bombay Stock Exchange Limited and NationalStock Exchange of India Ltd. has been given in the Report onCorporate Governance.



Further, Dr. Rajen D. Shah has resigned as Whole-time Director(Research & Development) of the Company w.e.f. 1st April, 2008.However, he continues to serve on the Board as a Non-ExecutiveDirector.

CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE EARNINGS/OUTGO

The information required under Section 217 (1)(e) of the CompaniesAct, 1956, read with the Companies (Disclosure of Particulars inthe Report of the Board of Directors) Rules, 1988, with respect tothis matter is appended hereto and forms part of this report.

PERSONNEL

As required by the provisions of Section 217(2A) of the CompaniesAct, 1956, read with Companies (Particulars of Employees) Rules,1975, as amended, the names and other particulars of employeesare set out in the Annexure to the Directors' Report. However, asper the provisions of Section 219(1)(b)(iv) of the Companies Act,1956, the Report and Accounts are being sent to all theshareholders of the Company excluding the aforesaid information.Any shareholder interested in obtaining such particulars may writeto the Vice President & Company Secretary at the Registered Officeof the Company.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is furnished as a partof the Directors' Report and the certificate from the Company'sAuditors regarding compliance with the said code is annexed tothe said report.

SUBSIDIARY COMPANIES

The Company has three direct subsidiaries viz. J. B. Life ScienceOverseas Ltd. (India), OOO Unique Pharmaceuticals Laboratories(Moscow, Russia) and J. B. Healthcare Pvt Limited (Jersey, ChannelIslands). As per Section 212 of the Companies Act, 1956, theCompany is required to attach the Directors’ Report, Balance Sheetand Profit and Loss Account of these subsidiaries. The Companyhad applied to the Central Government for an exemption from suchattachments as it presents the audited consolidated accounts ofthe Company and its subsidiaries in the Annual Report. TheCompany believes that the consolidated accounts presents a fulland fair picture of the state of affairs and the financial conditions asis done globally. The Central Government has granted exemption

from complying with Section 212 with respect to all these threecompanies. Accordingly, the Annual Report of your Company doesnot contain the financial statement of these subsidiaries, but containsthe audited consolidated financial statements of the Company andits subsidiaries.

The annual accounts of these subsidiary companies along withrelated information, is available for inspection during business hoursat the company's registered office. Copies of the audited accountsof the Company's subsidiaries can be sought by any member bymaking a written request to the Company in this regard.

AUDITORS

M/s J. K. Shah & Co., Chartered Accountants, the Auditors of theCompany hold office till the conclusion of the ensuing Annual GeneralMeeting and are eligible for re-appointment. The Company hasreceived a letter from M/s J. K. Shah & Co. to the effect that theirappointment as Auditors, if made, would be within the limits underSection 224(1-B) of the Companies Act, 1956.

COST AUDITORS

The Directors appointed N. I. Mehta & Co., Cost Accountants, asCost Auditors to audit the accounts relating to Bulk Drugs andFormulations for the year ending 31st March, 2009 and for whichCompany has received necessary approvals from the CentralGovernment.

APPRECIATION

Your Directors would like to place on record their sincere gratitudeto the Shareholders, Financial Institutions, Bankers, BusinessAssociates, Medical Professionals, the Retailers, Customers bothDomestic and Overseas, Government, other Regulatory Agenciesand Fixed Deposit holders for their continued support and faith inthe Company. Your Directors are also happy to place on recordtheir appreciation for the whole-hearted co-operation, commitmentand contribution made by all the employees of UNIQUE FAMILYand look forward to their continued support.

For and on behalf of the Board of Directors

Place : Mumbai J.B. ModyDate : 8th May, 2008 Chairman & Managing Director



ANNEXURE TO THE DIRECTORS' REPORT

Information under Section 217(1)(e) of the Companies Act, 1956read with the Companies (Disclosure of Particulars in the Report ofthe Board of Directors) Rules, 1988 and forming part of theDirectors' Report for the year ended 31st March, 2008.

I. CONSERVATION OF ENERGY

The Company continues to lay great emphasis on the conservationof energy and has been taking several measures like periodicalreviews of energy generation and consumption, regular monitoringof consumption, reduction of transmission losses and up-to-datemaintenance of systems. In several cases, the process itself wasupgraded to reduce energy consumption, especially by increasingthe yield. In factories, gradually the old equipments are replaced bynew more efficient modern process equipments. Shifting to theGas-Fired Boiler in place of Coal-fired Boiler has helped the Companyin reducing the pollution and also better utilization of energy. Theadoption of these measures has helped the Company to controlthe consumption of energy.

(B) Consumption per unit of production

Bulk Drugs and Formulations

Products wise consumption per unit for each product cannot bemeaningfully determined, since there is no specific standard.

From the record and other books maintained by the Company inaccordance with the provisions of the Companies Act, 1956, it isconsidered impracticable to give the information required as perthe format for the current year as well as the previous year.

II. TECHNOLOGY ABSORPTION

A. Research & Development (R&D)

1. Specific areas in which R&D is carried out by thecompany.

The company has R&D centers approved by the Departmentof Science and Technology, Government of India. TheCompany's R&D focuses on:

� Development of new API and its intermediates.

� Development of new drug formulations for existing andnewer active drug substance for domestic and internationalmarket including regulated & semi regulated countries.

� Development of New Drug Delivery System (NDDS) withOsmotic Drug Delivery and Bilayered tablets with gelmatrix. The main therapeutic agents covered by NDDSinclude antihypertensive, antimicrobial, prokinetic agentand hypolipidaemic agents.

� To undertake contract research with multinationalcompany/patenting of new processes/newer drug deliveryfor both local and international market.

� Improvement in the quality and productivity.

� Development of new innovative technology for themanufacturing of API and its intermediates.

� Herbal drug research and formulations.

� Newer technology innovations for medicated lozenges.

� New development in intravenous infusions based on form-fill-seal technology.

� Development of taste masking technologies fordispersible tablets, lozenges and syrups.

� Development of newer formulations for topical and vaginaluse.

2. Benefits derived as result of R&D.

� Successful commercial scale up of new API andformulations.

(A) Power and Fuel Consumption

31st 31st

March March2008 2007

Electricity(a) Purchase

Unit (KVA) 16904088 16693446Total Amount (Rs. in lakhs) 732.85 721.08Average Rate (Rs.) 4.34 4.32

(b) Own GenerationUnit (Kwh) 540704 493152Units per Ltr. of Oil (Kwh/Ltr.) 3.20 3.20Average Rate (Rs.) 11.00 11.19

2. Fuel OilQty (K Ltrs) 475.16 444.68Amount (Rs. in lakhs) 141.15 131.34Average Rate (Rs.) 29705 29537

3. GasQty (SM3) 5593.54 3761.54Total Amount (Rs. in Lakhs) 622.40 352.49Average Rate per 1000 SM3 (Rs.) 11127 9371


� Development of New Drug Delivery Systems.

� Improved processes and enhanced productivity in bothAPI and formulations.

� Product quality improvement.

� Optimum utilization of capabilities for the global market.

� Improvement in effluent quality and reduction in pollution.

3. Future plan of action.

� To continue developing innovative and commercially viableprocess for new API and dosage forms (conventionaland NDDS).

� Greater thrust in the area of Novel Drug Delivery Systemand new drug discovery research.

� Research in the field of herbal medicines will enable thecompany to introduce herbal Ayurvedic drugs.

� To aim for accreditation of R&D by USFDA/other regulatoryauthorities.

4. Expenditure on R&D.

Rs. in Lakhsa. Capital 389.73b. Recurring 687.75

Total 1077.48

B. Technology Absorption, Adaptation & Innovation

1. Efforts in brief, made towards technologyabsorption, adaptation and innovation:

I. Development and patenting of new drug formulation.

II. Development of New Drug Delivery System.

2. Benefits derived as a result of the above efforts

I. Cost reduction in an inflationary environment.

II. Improvement in operational efficiency through reductionin batch hours, increase in batch size, better solventrecovery and simplification of processes.

III. The development of several new products and lineextension of existing product.

IV. Substitution of imported raw materials and finishedproducts.

V. Product quality improvement and improve shelf lifestability.

VI. Meeting norms of external regulatory agencies to facilitatemore exports.

3. Imported technology.

Not applicable.

III FOREIGN EXCHANGE EARNINGS & OUTGO

The Company has already established an export market forits Bulk Drugs and Formulations and has been taking keeninterest in developing new export markets for its productsand to increase exports, in the existing markets.

During the year under review foreign exchange outgo wasRs.2242.53 lakhs (which includes import of raw materialsand components Rs.2097.48 lakhs). The foreign exchangeearned on export was Rs.31816.53 lakhs (FOB). Theparticulars of foreign exchange earned/utilised during the yearare given in Schedule 20 to the accounts.

ANNEXURE TO THE DIRECTORS' REPORT (CONTD.)


REPORT ON CORPORATE GOVERNANCE(Pursuant to Clause 49 of the Listing Agreement)

1. COMPANY'S PHILOSOPHY ON CORPORATEGOVERNANCE

The Company has always been committed to the principlesof good corporate governance and believes in seeking andexploring higher ideals for greater and improved stakeholdersatisfaction. The Company's philosophy on corporategovernance envisages an attainment of the highest level oftransparency, accountability and equity in all facets of itsoperations and in all interaction with its shareholders,employees, government and lenders.

The Company believes that all its operations and actionsmust serve the underline goal of enhancing overall shareholdervalue over a sustained period of time and at the same timeprotecting the interest of stakeholders.

2. BOARD OF DIRECTORS

� Composition and size of the board:

The current strength of the Board of Directors of theCompany is fourteen. The Board has an optimum mix ofexecutive and non-executive directors. Seven directors,including the Chairman & Managing Director are executivedirectors while there are seven non-executive directors. Allthe non-executive directors are independent.

� Board meetings and attendance

Four Board Meetings were held during the year and the gapbetween two Board meetings did not exceed 4 months.

The dates on which the meetings were held are as follows:

All the information as required under ANNEXURE IA of theClause 49 of the Listing Agreement, as is required from timeto time, is tabled before the Board for its consideration.

Attendance of each director at the board meetingand each annual general meeting (AGM) and thenumber of companies and committees where heis a director/ member (as on the date of directors’report)

* No. of Directorships excluding directorship in foreign Company, alternate directorships,Companies registered under section 25 of the Companies Act and private companies.

** Committee includes Shareholders / Investors Grievance Committee and Audit Committee.

Sr. Date of Meeting Board No. of

No. Strength Directors

Present

1. May 16, 2007 14 12

2. July 28, 2007 14 12

3. October 30, 2007 14 12

4. January 29, 2008 14 12

Name of Category Number Attendance Number of Number ofdirector of the of board at the last directorship committee

directorship meetings AGM held in other positionsattended on 27th July companies* held in

2007 othercompanies**

Mr. Jyotindra Chairman & 4 Yes 4 NilB. Mody Managing

Director-Executive(Promoter)

Mr. Dinesh B. Wholetime 4 Yes 3 NilMody Director

(Administration)- Executive(Promoter)

Mr. Shirish B. Wholetime 4 Yes 3 NilMody Director

(Marketing)-Executive(Promoter)

Mr. Bharat P. Wholetime 4 Yes 2 NilMehta Director

(Planning &Development)-Executive(Promoter)

Mr. Pranabh President & 4 Yes 3 1D. Mody Wholetime (Member)

Director(Operations)-Executive(Promoter)

Dr. Rajen D. Wholetime 3 Yes 3 NilShah Director

(Research &Development)-ExecutiveDirector

Mr. Kamlesh Director 4 Yes 6 NilL. Udani (Technical &

Production)-ExecutiveDirector

Mr. Bansi Non - 4 Yes 14 9S. Mehta Executive, (Member of 5

Independent and ChairmanDirector of 4)

Mr. Durga Non - Executive, 4 Yes 1 1Dass Chopra Independent (Member)

DirectorDr. Satyanarain Non - 3 Yes 1 NilAgarwala Executive,(Alternate to IndependentMr V. D. Patel) DirectorDr. Niranjan Non - Executive, 4 Yes Nil NilN. Maniar Independent

DirectorMr. Mahesh Non - Executive, 4 Yes Nil NilK. Shroff Independent

DirectorMr. Rajiv Non - Executive, 2 Yes 2 1C. Mody Independent (Member)

DirectorMr. Rohan Non -Executive, 0 No 1 NilP. Shah Independent

Director


� Directors with materially significant related partytransaction, pecuniary or business relationshipwith the company

There have been no materially significant transactions,pecuniary transactions or relationships between the Companyand its directors that may have a potential conflict with theinterest of the Company at large.

� Details of director being re-appointed

The following directors are eligible for re-appointment at theensuing Annual General Meeting. A brief resume of each ofthem alongwith the additional information requiredunder Clause 49 (VI) (A) of the Listing Agreement is asunder:

1. Mr. Mahesh K. Shroff

Mr. Mahesh K. Shroff, 69 years, has done his MBA fromUSA. He was with Bank of India for over 24 years and isassociated with the Company since 1986. He has contributedsignificantly in the areas of Management of Finance andExports. He is holding Directorships in Mahesh ShroffInvestment Finance Pvt. Ltd., On time Management ServicesPvt. Ltd., On time Professional Services Pvt. Ltd.,Yashwantilika Hospital Pvt. Ltd. and Netfinity Systems (India)Pvt. Ltd. and is not holding Membership of Committees inany other Company in which he is a Director.

2. Dr. N. N. Maniar

Dr. N. N. Maniar, 71 years, has done his MBBS. He is notholding Directorship or Membership of Committees in anyother Company.

3. Dr. Rajen D. Shah

Dr. Rajen D. Shah, 43 years, has done his Ph.D in IndustrialPharmacy and Pharmacokinetics from University of Maryland,Baltimore (USA) and B.Pharm, Diploma in BusinessManagement from Mumbai University. He has extensiveexperience in the filed of R&D with large MNCs in USA. He isholding Directorships in Nova Machinaries Ltd., NovaChemdrugs Ltd. and Raptim Research Ltd. and is not holdingMembership of Committees in any Company in which he isa Director.

4 Mr. Rohan P. Shah

Mr. Rohan P. Shah, 45 years, has done his B. Com, LL.B.,Solicitor England and Wales, is an expert legal advisor fromMumbai. At present he is a Managing Partner with Economic

Laws Practice from Mumbai, a law firm practicing mainly inIndirect Tax, Corporate and Media matter, International Trade,WTO and Intellectual Property Rights. He is BombayUniversity topper and winner of Three Gold Medals, SixScholarships and several other awards. Mr. Rohan P. Shahhas several professional achievements to his credit. Thisincludes Vice Chairmanship of Trade Laws Committeerepresenting law firms from 121 countries, Chairman of WTOcommittee of the Indian Merchant Chamber and being part ofthe Commerce Ministers Core Delegation Team and WTOMinisterial Conference and Seattle, USA. He is holdingDirectorship in Grauer & Weil Ltd. and not holding membershipin committees of any company.

3. AUDIT COMMITTEE

� Brief description of terms of reference

The terms of references of this committee are wide enoughto cover the matter specified for audit committees in Clause49 of the Listing Agreement as well as in the section 292A ofthe Companies Act, 1956.

� Details of the composition of the Audit Committeeand attendance of the members are as follows

The Audit Committee is chaired by Mr. Bansi S. Mehta,Chartered Accountant by profession and having a wideexperience on financial and taxation issues. All the othermembers of the Committee are financially literate within themeaning of Clause II (A) Explanation 1 of Clause 49 of theListing Agreement.

Mr. Beejal Desai, Vice President & Company Secretary, actsas the Secretary to the Committee.

Four Audit Committee Meetings were held during the yearand the gap between two meetings did not exceed fourmonths.

The dates on which the meetings were held are asfollows:

REPORT ON CORPORATE GOVERNANCE (CONTD.)

Sr. Date of Meeting Strength No. of

No. of the Directors

Committee Present

1. May 16, 2007 4 4

2. July 28, 2007 5 5

3. October 30, 2007 5 5

4. January 29, 2008 5 5


The Chairman of the Committee, Mr. Bansi S. Mehta, waspresent at the Annual General Meeting of the Company heldon July 27, 2007, to answer the queries of the shareholders.

4. REMUNERATION TO DIRECTORSThe Company has a Remuneration Committee whichcomprises of three Non - Executive, Independent Directorsnamely Mr. Mahesh. K. Shroff as the Chairman of theCommittee and Mr. D. D. Chopra and Dr. Niranjan. N. Maniaras members.

The terms of reference to this Committee includerecommending or reviewing the terms of remuneration paid /payable to executive directors.

The Remuneration Committee met once last year, on 16th

May, 2007, to review the terms of payment to the executivedirectors. The meeting was attended by all the members ofthe Committee.

Details of remuneration paid/payable to Executive Directorsare given below:

NOTES:

� Service Contracts, Severance Fees and NoticePeriod

The appointment of executive directors is governed by theArticles of Association of the Company and the Resolutionspassed by the Board of Directors and the members of theCompany. The term of each appointment is 5 years and isgoverned by the terms and conditions contained in theContract of Appointment. Such contract is terminable byeither party giving a three (3) months notice to the otherparty.

There is no separate provision for payment of severancefee under the Articles of the Company or the resolutionsgoverning appointment or the Contract for appointment.

� Employee Stock Option Scheme

As per the Company's Employee Stock Option Scheme, anemployee of the Company who is a director shall not beeligible to participate in the Scheme.

� Performance linked incentive criteria

The Company has internal norms for assessing theperformance of its senior executives including the ExecutiveDirectors. Internal norms for determining the performancecriteria for executive directors includes the Company'sstrategic business plans, current market trends as also thecontribution and initiative of the Directors for achievingCompany's objectives.

Details of remuneration paid to Non - Executive Directorsare given below:

Apart from Mr. Durga Dass Chopra, all other non-executivedirectors are paid only sitting fees for attending the meetingsof the Board and/or Committees.

NOTES

� The remuneration to Non-Executive directors is decided bythe Board of Directors of the Company within the limitsstipulated by the Companies Act, 1956 and subject to theapproval of the shareholders of the Company.

The meeting considered all the points in terms of its referenceat periodic intervals.

The composition of the Audit Committee is as follows:

Name Sitting Commission Totalfees (Rs.) (Rs.)(Rs.)

Mr. Bansi S. Mehta 1,20,000 - 1,20,000

Mr. Durga Dass Chopra 1,08,000 56,00,000 57,08,000

Dr. Satyanarain Agarwala 45,000 - 45,000

Dr. Niranjan N. Maniar 1,21,000 - 1,21,000

Mr. Mahesh K. Shroff 1,24,000 - 1,24,000

Mr. Rajiv C. Mody 30,000 - 30,000

Mr. Rohan P. Shah 0 - 0

Name All Elements Of Remuneration i.e. Salary,Benefits, Bonuses, Pension etc.(In Rs.)

Mr. Jyotindra B. Mody 24631499Mr. Dinesh B. Mody 24631188Mr. Shirish B. Mody 24582201Mr. Bharat P. Mehta 8795110Mr. Pranabh D. Mody 8830748Dr. Rajen D. Shah 3343880Mr. Kamlesh L. Udani 5516100

Sr. Name Designation Category AttendanceNo. on the of out of the

Committee Directorship fourmeetings

held

1 Mr. Bansi Chairman Non-Executive, 4S. Mehta Independent

Director2 Mr. Dinesh Member Executive, 4

B. Mody Non-Independent(Promoter)Director

3 Mr. Mahesh Member Non-Executive, 4K. Shroff Independent

Director4 Dr. Niranjan Member Non-Executive, 4

N. Maniar IndependentDirector

5 Mr. Durga Dass Member Non-Executive, 3Chopra Independent(Appointed w.e.f. Director17/05/2007)



� Besides dividend on Equity shares held, if any, by the Non -Executive Directors no other payments have been made ortransactions of a pecuniary nature entered into by theCompany with the said directors.

The shares held by the Non-Executive Directors in theCompany as on 31st March, 2008, are as follows:

5. INVESTORS / SHAREHOLDERS GRIEVANCECOMMITTEE

During the year, the Company held 3 meetings of theInvestors / Shareholders Grievance Committee on 16th May,2007, 30th October, 2007 and 29th January, 2008respectively.

The Composition of the Investors / Shareholders GrievanceCommittee is as follows:

Status of Complaints / Grievances during the year:

Name and Designation of the Compliance OfficerMr. Beejal DesaiVice President & Company Secretary

None of the complaints during the year remained pendingfor more than 30 days and no request for dematerializationand share transfers remained pending for more than twoweeks. There were no pending complaints as on 31st March,2008.

6. GENERAL BODY MEETINGS

Details of the location of the last three Annual GeneralMeetings and the details of the resolutions passed by PostalBallot.

Sr. Name Designation Category AttendanceNo. on the of out of the

Committee Directorship threemeetings

held

1 Mr. M. K. Shroff Chairman Non - 3Executive,IndependentDirector

2 Mr. J. B. Mody Member Executive, Non 3Independent(Promoter)Director

3 Mr. D. B. Mody Member Executive, Non 3-Independent(Promoter)Director

4 Mr. D. D. Chopra Member Non-Executive, 2(Appointed w.e.f. Independent17/05/2007) Director

Year Location Date Time No. of SpecialResolutions

Passed

2004-05 Patkar Hall, 14th July, 3.30 p.m. NilNew Marine 2005Lines,Mumbai 400 020

2005-06 Patkar Hall, 12th July, 3.30 p.m. 4New Marine 2006Lines,Mumbai 400 020

2006-07 Rama Watumull 27th July, 3.30 p.m. 1Auditorium, 2007KishinchandChellaram College,Dinshaw WachaRoad, Churchgate,Mumbai - 400020

There were no special resolutions passed by postal ballotduring the last year. Further, no resolution is proposed to bepassed through postal ballot for the ensuing Annual GeneralMeeting.

7. DISCLOSURES

� There are no materially significant related party transactionsi.e. transactions of the Company of material nature, with itsPromoters, the Directors or the Management, theirsubsidiaries or relatives etc. that may have potential conflictwith the interest of the Company at large.

Transactions with the related parties are disclosed in NoteNo. 16 of Schedule 20 to the Accounts in the Annual Report.

Correspondence in the nature of Q1 Q2 Q3 Q4 Total

1) Non - receipt of dividend warrants 5 7 25 9 46

2) Non - receipt of share certificates 3 3 4 4 14sent for transfer, deletion of name,transmission, transposition,consolidation of folios & sharecertificates, correction of name,etc.

3) Non-receipt of Exchange Certificate 2 2 0 2 6

TOTAL 10 12 29 15 66


NAME SHARES HELD

Mr. Bansi S. Mehta 11,700

Mr. Durga Dass Chopra 2,96,930

Dr. Satyanarain Agarwala 500

Dr. Niranjan N. Maniar 15,000

Mr. Mahesh K. Shroff 48,705

Mr. Rajiv C. Mody 0

Mr. Rohan P. Shah 0


� Relationship between Directors inter-se

Mr. Jyotindra Mody, Mr. Dinesh Mody and Mr. Shirish Modyare related to each other as brothers. Mr. Bharat Mehta isrelated to Mr. Jyotindra Mody as Son-in-law. Mr. PranabhMody is the son of Mr. Dinesh Mody. Dr. Rajen Shah is relatedto Mr. Shirish Mody as Son-in-law.

� During the last three years there were no penalties andstrictures imposed on the Company by Stock Exchange orSEBI or any statutory authority for non - compliance of anymatter related to capital markets.

� The Company does not have whistle blower policy. However,no personnel of the Company have been denied accessto the Grievance Redressal mechanism of theCompany.

� The Company is in compliance with all the mandatoryprovisions of Clause 49 of the Listing Agreement. Of thenon-mandatory requirements of Clause 49, the Companyhas a Remuneration Committee in place. Further, theCompany constantly strives for higher limits of transparencyand accountability with no qualification in financialstatements.

8. MEANS OF COMMUNICATION

EDIFAR

As per the requirements of Clause 51 of the Listing Agreement, allthe data relating to quarterly financial results, shareholding pattern,etc. are being electronically filed on the EDIFAR website,www.sebiedifar.nic.in within the timeframe prescribed inthis regard.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion & Analysis Report forms a part ofthe Directors' Report.

9. GENERAL SHAREHOLDER INFORMATION

Quarterly Result

Newspapers wherein results The Company has published itsnormally published Quarterly Results in Mumbai

edition of Business Standardand Sakal.

Any website, where displayed Company's website:www.jbcpl.comwww.uniquepharma.com

Whether it also displays Yes. Press Release after publishingofficial news releases of Unaudited/Auditedand the presentation Quarterly/Annual Results andmade to Institutional the same is also uploadedInvestors or to the analysts on the Company's website.

Financial calendar April to March(Tentative) 1. First Quarter Results - July, 2008

2. Half Yearly Results - October, 20083. Third Quarter Results - January, 20094. Audited Results for the year ending31st March, 2009 - May, 20095. Annual General Meeting (next year)- July, 2009

Date of Book Closure 5th July, 2008 to 18th July, 2008(both days inclusive)

Dividend Payment Date On or after 18th July, 2008

Listing on Stock Exchanges Bombay Stock Exchange LimitedNational Stock Exchange ofIndia Limited

The Company has paid the AnnualListing fees for the period 1st April, 2008to 31st March, 2009 to both the StockExchanges

Stock Code BSE NSEPhysical 6943 JBCHEPHARMDemat 506943

ISIN Number for equity INE572A01028shares having nominalvalue of Rs.2/-

Market Price Data: High, Low Please see Annexure 'A'during each month in lastfinancial year

Performance in comparison to Please see Annexure 'B'BSE sensex

Registrar and Transfer Agents Datamatics Financial Services Ltd.Plot No. A/16 & 17 MIDC,Part B, Cross Lane,Marol, Andheri (E),Mumbai - 400 093Tel. No.: 6671 2151 - 56Fax No.: 2832 0382

Share Transfer System All the transfers received are processedand approved by the Share TransferCommittee, which normally meets twicein a month.

Distribution of Shareholding Please see Annexure 'C'and shareholding pattern ason 31/03/2008

Dematerialization of shares Over 97% of the shares issued by theand liquidity Company have been dematerialized

upto 31st March, 2008.

Outstanding GDR/ADR/ No such instruments are issued.Warrants or any Convertibleinstruments,Conversion dateand impact on Equity.

Plant Locations The Company's plants are located atBelapur, Ankleshwar, Panoli andDaman.

AGM: Date, Time and Venue 18th July, 2008, at 3.30 p.m. atPatkar Hall, New Marine Lines,Mumbai - 400 020.



Address for correspondence J. B. Chemicals & Pharmaceuticals Ltd."Neelam Centre", 'B' Wing,4th Floor, Hind Cycle Road,Worli, Mumbai - 400 030Tel. No.2493 0918 (4 lines)Fax No.2493 0534 / 2493 9633E-mail: [email protected]@jbcpl.com

Note: Shareholders holding shares in electronic mode shouldaddress all correspondence to their respective DepositoryParticipants.

ANNEXURE "A"

High / Low of market price of the Company's sharestraded on Bombay Stock Exchange Limited (BSE) andNational Stock Exchange of India Limited (NSE) duringthe year 2007-08 is furnished below:

ANNEXURE "B"

ANNEXURE "C"

Distribution of Shareholding as on 31/03/2008

Shareholding Pattern as on 31/03/2008

Declaration By Mr. J. B. Mody, Chairman & ManagingDirector, Affirming Compliance With The Code OfConduct

I, J. B. Mody, Chairman & Managing Director of the Company,hereby declare, based on the affirmation received from all theBoard Members and Senior Management Personnel, that theyhave complied with the "Code of Conduct for Board of Directors& Senior Management" from the date of its adoption in the BoardMeeting.

For J. B. Chemicals & Pharmaceuticals Limited

J. B. ModyMumbai, 8th May, 2008 Chairman & Managing Director

Category No. of PercentageShares to

Held Total

a Promoters, Directors & Relatives 46774740 55.47

b Mutual Funds 50250 0.06

c Banks, Financial Institutions, 2687957 3.19Insurance Companies

d Foreign Institutional Investors (FII's) 1739333 2.06

e Domestic Companies 4309526 5.11

f Indian Public 26864277 31.85

g Non Resident Indians/Overseas 1900267 2.26Corporate Bodies/ForeignCorporate Bodies(NRIs / OCBs/ FCBs)

GRAND TOTAL 84326350 100.00

BSE NSE

Period High Low High Low(Rs.) (Rs.) (Rs.) (Rs.)

April, 2007 85.00 77.25 84.75 77.00

May, 2007 84.00 71.50 84.70 71.60

June, 2007 78.00 71.00 78.85 71.00

July, 2007 74.50 63.00 74.00 64.80

August, 2007 72.00 58.90 70.60 57.65

September, 2007 74.00 65.30 73.70 62.65

October, 2007 69.70 62.00 75.00 61.20

November, 2007 72.90 62.95 73.00 62.50

December, 2007 88.00 64.15 84.90 65.05

January, 2008 101.70 48.00 102.90 48.40

February, 2008 61.80 51.75 62.90 51.50

March, 2008 61.25 31.80 61.40 31.75


No. of Equity No. of Percentage No. of PercentageShares Held Folios To Total Shares to Total

Upto 500 24991 74.75 4549603 5.40

501 - 1000 3437 10.28 2905569 3.45

1001 - 2000 2613 7.81 4148274 4.92

2001 - 3000 1145 3.42 2960223 3.51

3001 - 4000 367 1.10 1318249 1.56

4001 - 5000 266 0.80 1255167 1.49

5001 - 10000 351 1.05 2506165 2.97

10001 and above 264 0.79 64683100 76.70

Total 33434 100.00 84326350 100.00

No. of Shareholders 1979 5.92 2447516 2.90& Shares inPhysical Mode

No. of beneficial 31455 94.08 81878834 97.10owners and Sharesin Electronic Mode

Total 33434 100.00 84326350 100.00


AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCE

To,

The Members ofJ.B. Chemicals & Pharmaceuticals Ltd.

We have examined the compliance of conditions of corporate governance by J.B. Chemicals & Pharmaceuticals Ltd., for the year endedon 31st March, 2008, as stipulated in clause 49 of the Listing Agreement of the said Company with Stock Exchange.

The compliance of conditions of corporate governance is the responsibility of the management. Our examination was limited toprocedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the CorporateGovernance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company hascomplied with the conditions of Corporate Governance as stipulated in the above-mentioned listing agreement.

We state that in respect of investor grievances received during the year ended 31st March, 2008, no investor grievances are pendingfor a period exceeding one month against the Company as per the records maintained by the Company which are presented to theShareholders/Investors Grievance Committee.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectivenesswith which the management has conducted the affairs of the Company.

For J. K. Shah & Co.Chartered Accountants

J. K. ShahPlace : Mumbai PartnerDate : 8th May, 2008. Membership No. 3662


AUDITORS' REPORT

To,

The Members ofJ. B. Chemicals & Pharmaceuticals Ltd.

1. We have audited the attached Balance Sheet of J. B.Chemicals & Pharmaceuticals Ltd. as at 31st March,2008,the Profit and Loss account and also Cash Flow Statementfor the year ended on that date annexed thereto. Thesefinancial statements are the responsibility of the company'smanagement. Our responsibility is to express an opinion onthese financial statements based on our audit.

2. We conducted our audit in accordance with the accountingstandards generally accepted in India. Those standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financial statementsare free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used andsignificant estimates made by the management, as well asevaluating the overall financial statement presentation. Webelieve that our audit provides a reasonable basis for ouropinion.

3. As required by the Companies (Auditor's Report) Order,2003 as amended by Companies (Auditor's Report)(Amendment) Order, 2004 (together 'the Order') issued bythe Central Government of India in terms of sub-section(4A) of section 227 of the Companies Act, 1956, and on thebasis of the information and explanation given to us and thebooks and records examined by us in the normal course ofaudit and to the best of our knowledge and belief, we give inthe Annexure a statement on the matters specified inparagraphs 4 and 5 of the said Order.

4. Further to our comment in the Annexure referred to above,we report that:

a. We have obtained all the information and explanation,which to the best of our knowledge and belief werenecessary for the purpose of our audit;

b. In our opinion, proper books of account as required bylaw have been kept by the company so far as appearsfrom our examination of those books;

c. The balance sheet, profit and loss account and cash flowstatement dealt with by this report are in agreement withthe books of account;

d. In our opinion, the balance sheet, profit and loss accountand cash flow statement dealt with by this report complywith the Accounting Standards referred to in sub-section(3C) of section 211 of the Companies Act, 1956 to theextent applicable;

e. On the basis of written representation received from thedirectors, as on 31st March, 2008 and taken on recordby the Board of Directors, we report that none of thedirectors is disqualified as on 31st March, 2008 from beingappointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

f. In our opinion and to the best of our information andaccording to the explanation given to us, the saidaccounts, read together with notes thereon, give theinformation required by the Companies Act, 1956 in themanner so required and subject to:

Note No. 21 of Schedule 20 relating to excessNote No. 21 of Schedule 20 relating to excessNote No. 21 of Schedule 20 relating to excessNote No. 21 of Schedule 20 relating to excessNote No. 21 of Schedule 20 relating to excessmanagerial remuneration provided during the yearmanagerial remuneration provided during the yearmanagerial remuneration provided during the yearmanagerial remuneration provided during the yearmanagerial remuneration provided during the yearamounting to Rs. 204.72 Lakhs for which theamounting to Rs. 204.72 Lakhs for which theamounting to Rs. 204.72 Lakhs for which theamounting to Rs. 204.72 Lakhs for which theamounting to Rs. 204.72 Lakhs for which thecompany is in process of applying to the Centralcompany is in process of applying to the Centralcompany is in process of applying to the Centralcompany is in process of applying to the Centralcompany is in process of applying to the CentralGovernmentGovernmentGovernmentGovernmentGovernment

give a true and fair view in conformity with the accountingprinciples generally accepted in India:

i. In the case of the balance sheet, of the state of affairsof the company as at 31st March, 2008;

ii. in the case of the profit and loss account, of the profitfor the year ended on that date; and

iii. in the case of cash flow statement, of the cash flow forthe year ended on that date.


J. K. ShahPlace : Mumbai PartnerDate : 8th May, 2008 Membership No. 3662


ANNEXURE TO THE AUDITORS' REPORT(as referred to in paragraph 3 of our report of even date)

1) a) The company has maintained proper records showing fullparticulars including quantitative details and situation of fixedassets.

b) These fixed assets have been physically verified by themanagement at regular interval considering the size of thecompany and nature of assets. No material discrepancieshave been noticed on such verification.

c) No disposal of a substantial part of fixed assets of thecompany has taken place during the year.

2) a) As explained to us, the inventories were physically verifiedby the management at reasonable intervals during the year.

b) In our opinion and according to the information andexplanation given to us, the procedures of physical verificationof inventories followed by the management are reasonableand adequate in relation to the size of the company and thenature of its business.

c) In our opinion and according to the information andexplanation given to us, the company has maintained properrecords of its inventories and the discrepancies noticed onphysical verification between physical stock and the bookrecords were not material and have been adequately dealtwith in the books of account.

3) a) According to information and explanation given to us, thecompany has, during the year, not granted any loan securedor unsecured to the companies, firms or other partiescovered in the register maintained under section 301 of theCompanies Act, 1956. Accordingly, paragraphs 4 (iii) (a),(b), (c) and (d) of the Order, are not applicable.

b) According to information and explanation given to us, thecompany has, during the year, taken unsecured loans fromten companies covered in the register maintained undersection 301 of the Companies Act, 1956. The year endbalance was Rs. 2556.50 Lakhs and the maximum amountinvolved at any time during the year was Rs. 2651.50Lakhs. The rate of interest and other terms and conditionsare prima-facie not prejudicial to the interest of thecompany. The payment of principal amount and interestare also regular.

4) The company has adequate internal control procedurecommensurate with the size of the company and nature ofits business with regard to purchase of inventories andfixed assets and for sale of goods and services. We havenot come across any major weakness in internal control.

5) a) To the best of our knowledge and belief, and according toinformation and explanation given to us, the particulars ofcontracts or arrangements referred to in section 301 of theCompanies Act, 1956 have been entered in the registermaintained under that section.

b) The transaction of purchase of goods and material and saleof goods, material and services, made in pursuance ofcontracts or arrangements entered in the Registermaintained under section 301 of the Companies Act, 1956and exceeding the value of rupees five lacs in respect of anyparty during the year, have been made at prices which arereasonable having regard to the prevailing market prices atthe relevant time.

6) In our opinion and according to the information andexplanation given to us, the company has complied with thedirectives issued by the Reserve Bank of India and theprovisions of section 58A and 58AA or any other relevantprovisions of the Companies Act, 1956 and rules framedthere under, with regard to the deposits accepted from thepublic.

7) The company has appointed a firm of Chartered Accountantsto carry out its internal audit function. In our opinion, theinternal audit system commensurate with the size of thecompany and nature of its business.

8) We have broadly reviewed the books of account maintainedby the company, pursuant to the rules made by the CentralGovernment for the maintenance of cost records, underclause (d) of sub-section (1) of section 209 of the CompaniesAct, 1956 and are of the opinion that prima facie theprescribed accounts and records have generally beenmaintained. We have not, however, made a detailedexamination of the records with a view to determiningwhether they are accurate or complete.

9) a) According to the records of the company, the company isregular in depositing undisputed statutory dues includingProvident Fund, Investor Education and Protection Fund,Employees' State Insurance, Income Tax, Sales Tax, WealthTax, Service Tax, Custom Duty, Excise Duty, Cess and otherstatutory dues with the appropriate authorities. Accordingto the information and explanation given to us, there are noundisputed amounts payable in respect of such statutorydues which have remained outstanding as at 31st March,2008 for a period of more than six moths from the day theybecome payable.


10) The company has no accumulated losses and has notincurred cash losses in the current financial year and in theimmediately preceding financial year.

11) The company has not defaulted in repayment of dues to anyBanks.

12) The company has not granted loans and advances on thebasis of security by way of pledge of shares, debentures orother securities.

13) The provisions of any Special Statute applicable to ChitFunds, Nidhis or Mutual Benefit Funds / Societies are notapplicable to the company.

14) The company is not dealing in or trading in shares, securities,debentures or other investments and hence, requirement ofparagraph 4(xiv) are not applicable to the company.

15) According to the information and explanation given to us,the company has not given any guarantee for loans taken bythe others from the Banks and Financial Institutions.

16) In our opinion and according to the information andexplanations given to us, on an overall basis, the term loanshave been applied for the purpose for which they wereobtained.

17) According to the Cash Flow Statement and other recordsexamined by us and on the basis of information andexplanation given to us, on an overall basis, funds raised onShort Term basis have, prima facie, not been used duringthe year for Long Term investment.

18) During the year, the company has not issued and allottedany shares to parties and companies covered in the registermaintained u/s 301 of the Companies Act, 1956.

19) Since the company does not have any debentures, thequestion of creation of securities for debentures does notarise.

20) Since the company has not raised money by Public Issue,clause (xx) of the Order is not applicable.

21) To the best of our knowledge and belief and accordingto the information and explanations given to us, no fraud onor by the company was noticed or reported duringthe year.


J. K. ShahPlace : Mumbai PartnerDate : 8th May, 2008 Membership No. 3662

ANNEXURE TO THE AUDITORS' REPORT (CONTD.)(as referred to in paragraph 3 of our report of even date)

Name of Nature Amount Period to which Forum whereStatute of Dues (Rs. in lakhs) amount relates dispute pending

The UP Sales Sales 2000-2001 CommissionerTax Act Tax 5.23 (Appeals)

The UP Sales Sales 1992-1993 Supreme CourtTax Act Tax 0.25 of India

Central Excise Excise 2001-2002 CESTATAct, 1944 Duty 8.07

Penalty 8.07

b) According to information and explanation given to us, detailsof disputed Sales Tax demand aggregating that have notbeen deposited on account of disputes are given below:


BALANCE SHEET AS AT 31ST MARCH, 2008

As per our report of even date For and on behalf of the Board of Directors

For J. K. Shah & Co. J. B. Mody D. B. ModyChartered Accountants Chairman & Managing Director Whole-time Director (Administration)

J. K. Shah S. B. Mody Beejal DesaiPartner Whole-time Director (Marketing) Vice President & Company SecretaryMembership No.3662Mumbai: 8th May, 2008 Mumbai: 8th May, 2008

(Rs. in Lakhs)

PARTICULARS SCH. 2008 2007

SOURCES OF FUNDS

SHAREHOLDERS FUNDS

Share Capital 1 1686.53 1686.53Share Application Money - 1.02Reserves and Surplus 2 44632.06 40426.27

46318.59 42113.82

LOAN FUNDS

Secured Loans 3 15449.58 8419.69Unsecured Loans 4 4102.42 8971.74

19552.00 17391.43

DEFERRED TAX LIABILITIES 1466.10 1875.82

67336.69 61381.07

APPLICATION OF FUNDSFixed Assets 5Gross Block 33146.53 28348.60Less:Depreciation 10022.20 8342.28Net Block 23124.33 20006.32

Capital Work-in-progress 228.62 2226.85

INVESTMENTS 6 4290.55 3353.74

CURRENT ASSETS, LOANS & ADVANCESInventories 7 6511.34 7608.21Sundry Debtors 8 32804.08 31762.72Cash and Bank Balances 9 1450.68 1970.95Loans and Advances 10 5864.85 3647.35

46630.95 44989.23

Less: CURRENT LIABILITIES AND PROVISIONSLiabilities 11 5432.94 7545.76Provisions 12 1504.82 1649.31

6937.76 9195.07NET CURRENT ASSETS 39693.19 35794.16

67336.69 61381.07

NOTES ON ACCOUNTS 20


PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2008

(Rs. in Lakhs)

PARTICULARS SCH. 2008 2007

INCOME

Sales 13 54809.43 53145.92Other Income 14 1380.19 1069.78

Total Income 56189.62 54215.70

EXPENDITURE

Material Cost 15 14499.16 15218.88Purchase of Goods/Materials for Resale 16 3932.35 3349.89Staff Cost 17 8994.98 7717.95Other Expenses 18 21311.62 18871.67Depreciation 1701.66 1133.39(Increase)/Decrease in Stock 19 839.09 (53.37)

Total Expenditure 51278.86 46238.41

PROFIT BEFORE TAXATION 4910.76 7977.29Provision for TaxationCurrent Tax 575.00 413.00Earlier years’ Income Tax 2.59 -Fringe Benefit Tax 106.40 120.00Deferred Tax (164.36) 335.01Wealth Tax 9.00 7.00Mat credit (Including previous year Rs.243) (787.00) (258.37) - 875.01

PROFIT AFTER TAXATION 5169.13 7102.28Add:Surplus Brought Forward 2000.00 1749.89

Available for Appropriation 7169.13 8852.17

APPROPRIATIONSInterim Dividend - 927.29Tax on Interim Dividend - 130.05Proposed Final Dividend 421.63 1264.90Tax on Proposed Final Dividend 71.66 214.97General Reserve 4675.84 4314.96

5169.13 6852.17

BALANCE CARRIED TO BALANCE SHEET 2000.00 2000.00

7169.13 8852.17

Earning per share (Rs.)Basic EPS 6.13 8.44Diluted EPS 6.13 8.43






CASH FLOW STATEMENT FOR THE YEAR ENDED 31 ST MARCH, 2008

(Rs. in Lakhs)

PARTICULARS 2008 2007

A. Cash Flow from Operating ActivitiesNet Profit before Tax and Extraordinary items 4910.76 7977.29

Adjustment ForDepreciation 1701.66 1133.39Foreign Exchange (Net) (478.59) 155.37Interest Paid 1797.89 1124.88(Profit)/ Loss on Sale/Discard of Assets 12.74 (0.65)Bad debts 842.04 -Interest Received (34.50) (229.38)Dividend Received (0.52) (0.49)DEPB Certificate Receivable (78.13) (97.76)Deferred Employee Compensation cost 6.46 3769.05 38.80 2124.16Operating Profit Before Working Capital Changes 8679.81 10101.45

Adjustment ForTrade And Other Receivables (3089.71) (7626.91)Inventories 1096.87 (1157.52)Trade Payable (2109.56) (4102.40) 2705.16 (6079.27)

Cash Generated From Operations 4577.41 4022.18

Direct Taxes Paid (including Fringe Benefit Tax) (Net) (762.05) (475.45)

Net Cash from Operating Activities 3815.36 3546.73

B. Cash Flow from Investing ActivitiesPurchase of Fixed Assets (2841.22) (8694.24)Sale /Discard of Fixed Assets 7.03 58.66Purchase of Invesment (936.81) (3060.64)Interest Received 35.01 222.71Dividend Received 0.52 0.49Net Cash used in Investing Activities (3735.47) (11473.02)

C. Cash Flow from Financing ActivitiesProceeds from issue of shares including premium - 4451.42Refund of share application money (1.02) -Proceeds from Short Term Borrowings (Net) (1487.92) 7845.81Proceeds from Long Term Borrowings (Net) 4049.58 -Interest Paid (1681.07) (1063.02)Dividend Paid (Including Dividend Tax) (1479.73) (2495.69)Net Cash Used in Financing Activities (600.16) 8738.52

Net Increase in Cash and Cash Equivalents (520.27) 812.23Cash And Cash Equivalents as at 01.04.07 (Refer Schedule No.9) 1970.95 1158.72Cash And Cash Equivalents as at 31.03.08 (Refer Schedule No.9) 1450.68 (520.27) 1970.95 812.23





SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31st MARCH, 2008

(Rs. in Lakhs)


1 SHARE CAPITAL

Authorised10,00,00,000 (Previous year 10,00,00,000) Equity 2000.00 2000.00Shares of Rs.2/- each.Issued, Subscribed And Paid-up8,43,26,350 (Previous Year 8,43,26,350) Equity Shares 1686.53 1686.53of Rs. 2/- each fully paid

of the aboveA) 1,55,34,000 Equity Shares of Rs.2/- each have

been issued for consideration other than cash.

B) 4,64,02,500 Equity Shares of Rs.2/- each areallotted as fully paid up bonus shares by capitalizationof Securities Premium, General Reserveand Export Profit Reserve

C) 1,31,350 Equity Shares of Rs. 2/- each havebeen issued pursuant to stock options grantedto employees.

1686.53 1686.53

2 RESERVES AND SURPLUSCapital Reserve (Reserves transferred fromamalgamating company)Investment Allowance Reserve (utilised) 34.86 34.86Capital Reserve 63.53 63.53Cash Subsidy 1.98 100.37 1.98 100.37

Capital Reserve 4.21 4.21Cash Subsidy 85.66 85.66Contingency Reserve 520.00 520.00

Securities PremiumAs per last Balance sheet 4536.69 164.69Add: Credited during the year - 4405.71Less: Expenses related to Private placement w/off. - 4536.69 33.71 4536.69

General ReserveAs per last Balance Sheet 33141.32 28826.36Add: Transfer from Profit & Loss A/c 4675.84 4314.96Less : Charge on account of transitional provisions under AS 15 476.51 37340.65 - 33141.32( Refer Note No. 13 of Schedule 20 )

Profit and Loss Account 2000.00 2000.00Less: Loss of Lekar Healthcare Limited Transferredpursuant to scheme of Amalgamation. - 250.11

2000.00 1749.89

Less: Transfer to Profit & Loss A/c. 2000.00 1749.89Add: Transfer from Profit & Loss A/c 2000.00 2000.00 2000.00 2000.00

Employee Stock OptionEmployee Stock Options Outstanding 50.06 54.20Less : Deferred employee compensation 5.58 44.48 16.18 38.02

44632.06 40426.27


(Rs. in Lakhs)


3 SECURED LOANSFrom BanksWorking Capital Borrowings 11438.58 8419.69

Long Term Foreign Currency LoanExternal Commercial Borrowing 4011.00 -

15449.58 8419.69

Notes :1) Working capital borrowings from the banks are secured

by first charge on pari passu basis by way of hypothecationof company's current assets both present and future and byway of joint equitable mortgage of company's block of assetssituated at Thane and Belapur in the state of Maharashtra,Ankleshwar & Panoli in the state of Gujarat and Daman inthe Union Territory of Daman.................................................

2) The External Commercial Borrowing is secured by exclusive charge byway of hypothecation of company's movable fixed assets (includingmovable plant and machinery both present and future) at new plant atPlot No. 4, GIDC Phase IV, Panoli, Gujarat.

4 UNSECURED LOANS

Working Capital Loans from Banks - 4852.03Directors 85.50 1.50Fixed Deposit from Public & Shareholders 1096.93 1403.44(Due Within One Year Rs.461.86, Previous Year Rs.412.23)Deposit from Distributors / Customers 266.04 250.82Sales Tax Deferral 97.45 97.45(Due Within One Year Rs.16.24, Previous Year Rs. Nil )Inter Corporate Deposit 2556.50 2366.50

4102.42 8971.74

5 FIXED ASSETS

Note:

1) Value of buildings includes a sum of Rs.3250/- being the cost of shares in the societies.

2) No depreciation has been claimed on assets to the extent of CENVAT claimed.

Gross Block Addition Deduction Gross Block Depreciation Depreciation Deduction Depreciation Net Block Net BlockDescription as on during during the as on as on for the during the upto as on as onof Assets 01.04.2007 the year year 31.03.2008 01.04.2007 year year 31.03.2008 31.03.2008 31.03.2007

Tangible :

Land (Freehold) 59.34 - - 59.34 - - - - 59.34 59.34Land (Leasehold) 409.58 - - 409.58 49.54 3.84 - 53.38 356.20 360.04Factory Buildings 7700.84 1404.47 - 9105.31 1188.78 263.39 - 1452.17 7653.15 6512.06Buildings (Note 1) 584.68 37.15 - 621.83 118.58 10.15 - 128.73 493.10 466.10Plant & Machinery 16262.40 2526.41 0.23 18788.58 5900.39 1152.17 0.23 7052.33 11736.25 10362.01Office Equipments 254.02 24.29 2.00 276.31 79.09 13.00 0.65 91.44 184.87 174.93Furniture & Fixtures 826.88 139.18 - 966.06 352.38 54.03 - 406.41 559.65 474.50Airconditioners 1255.72 319.10 0.30 1574.52 336.23 95.97 0.10 432.10 1142.42 919.49Vehicles 995.14 351.70 38.99 1307.85 317.29 108.10 20.77 404.62 903.23 677.85

Intangible :Acquired Software - 37.15 - 37.15 - 1.03 - 1.03 36.12 -

28348.60 4839.44 41.51 33146.53 8342.28 1701.66 21.74 10022.20 23124.33 20006.32

(20679.77) (7747.38) (78.55) (28348.60) (7229.43) (1133.39) (20.54) (8342.28) (20006.32) (13450.34)

SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31st MARCH, 2008 (CONTD.)



(Rs. in Lakhs)PARTICULARS 2008 20076 INVESTMENTS

Long Term (At Cost)Government Securities :National Saving Certificates(Pledged with Government Authorities) 0.44 0.44

Trade InvestmentsQuoted Fully Paid Up

1,20,000 ( Previous year 1,20,000) Equity ofSpectrum Pharmaceuticals Inc.of US $ 0.001 each (Market Value Rs. 121.80,Previous year 326.92) 449.30 449.30

Unquoted - Fully Paid UpSubsidiary Companies1,20,000 (Previous Year 1,20,000) Equity Shares ofRs. 10/- each of J B Life Science Overseas Ltd 12.00 12.00Investment in OOO Unique Pharmaceutical Laboratories - Russia 1250.29 327.5651,00,000 (Previous year 2 ) Ordinary shares of US $ 1 each ofJ.B. Healthcare Pvt. Ltd. 2270.26 0.01

Others5,866 (Previous Year 5,866) Equity Shares of Rs.10/- each ofBharuch Enviro Infrastructure Ltd. 0.59 0.59

5,69,532 (Previous Year 5,69,532) Equity Shares of Rs.10/- eachof Bharuch Eco-aqua Infrastructure Ltd. 56.95 56.95

Non - Trade InvestmentQuoted Fully Paid Up

126 (Previous Year 126 ) Units of Rs.10/- each of Unit Trust of India 0.01 0.01

Unquoted Fully Paid Up20,000 (Previous Year 20,000) Equity Shares of EnviroTechnology Ltd. of Rs.10/- each 2.00 2.00

2,000 (Previous Year 2,000 )Bonds of RuralElectrification Corporation of Rs.10/- each 0.20 0.20

60,000 (Previous Year 60,000) Equity Sharesof Panoli Enviro Tenchology Ltd.of Rs.10/-each 6.00 6.00

20,00,000 (Previous Year 20,00,000) Equity Shares of Rs.10/- eachof Asian Heart Institute & Research Centre Pvt. Ltd. 200.00 200.00

2,40,000 (Previous Year 2,40,000) Equity Shares of Rs.10/- eachof Raptim Research Ltd 24.00 24.00

Share Application MoneyOrdinary Shares of J.B. Healthcare Pvt. Ltd. 15.32 2274.68Bharuch Eco-aqua Infrastructure Ltd. 3.19 -

4290.55 3353.74


(Rs. in Lakhs)


7 INVENTORIES(As taken valued and certified by the Managing Director)Raw Material 1445.90 1224.18Packing Material 1229.34 1339.47Work in process 414.83 613.45Finished Goods (Stock in Transit Rs.92.11, Previous year Rs. 154.91) 3395.70 4414.22Fuel 25.57 16.89

6511.34 7608.21

8 SUNDRY DEBTORS(Unsecured Considered Good)Outstanding for over six months 12767.17 12221.69Others 20036.91 19541.03

Note : The above include

1) Due from wholly owned subsidiaries Rs. 3338.62 (Previous yearRs.1954.53) out of which outstanding over six months isRs. 949.19 (Previous year Rs. 261.60)

2) Due from Joint Venture Rs. 405.71 (Previous year Rs. 50.87) out of whichoutstanding over six months is Nil (Previous year Nil).

32804.08 31762.72

9 CASH AND BANK BALANCESCash on Hand 91.25 12.80

Balance with Scheduled Banks :On Current Account(Including Unclaimed Dividend Rs 45.77 Previous year Rs. 45.63) 770.90 955.43Fixed Deposit Account 103.50 460.01

Balance with Non-Scheduled Banks :A. Vneshtorg Bank, Moscow

Current Account (Maximum balance outstandingduring the year Rs.129.88) 0.01 140.42

B. Ukraine International Bank,UkraineCurrent Account (Maximum balance outstandingduring the year Rs 43.39) 30.52 3.46

C. Uzbekistan International BankCurrent Account (Maximum balance outstandingduring the year Rs 1.36) 1.40 0.99

Remittances in Transit 368.48 397.22Cheques on Hand 84.00 -Post Office Saving Account 0.62 0.62

1450.68 1970.95

10 LOANS AND ADVANCES

Advances RecoverableIn Cash or in Kind of for Value to be received(Unsecured considered Good, unless otherwise stated)Sundry Deposits (Including with Directors and their relativesRs.45.05, Previous Year Rs.45.05) 1203.48 369.86Loan to Subsidiary Company 65.49 70.98Income Tax (Net of Provision) 633.66 564.60Others - Considered Good 3169.98 2621.11Balance with Excise Authorities 5.24 20.80Mat Credit Entitlements 787.00 0.00

5864.85 3647.35



(Rs. in Lakhs)


11 CURRENT LIABILITIES

Sundry CreditorsDue to S.S.I. Units 309.08 516.16Others 3677.68 3986.76 5395.73 5911.89Advance from customers 41.98 73.05Other Liabilities 1142.47 1418.57Interest Accrued but not due 210.43 93.61Unclaimed Dividend # 45.77 45.63Unpaid Matured Deposits # 5.43 2.91

5432.84 7545.66

Outstanding Purchase ConsiderationUndischarged Liabilities of Vendors 0.10 0.10

# There is no amount due & outstanding to becredited to Investor Education & Protection Fund

5432.94 7545.76

12 PROVISIONSFor Employee Benefits 1011.53 169.44For Proposed Final Dividend 421.63 1264.90For Tax on Proposed Final Dividend 71.66 214.97

1504.82 1649.31



(Rs. in Lakhs)


13 SALESSales 56971.56 54035.25Less : Excise Duty 1690.04 1758.15

55281.52 52277.10Add / (Less) : Exchange Difference (Net) (472.09) 868.82

54809.43 53145.92

14 OTHER INCOMEInterestBank Deposit (Tax Deducted at Source Rs.3.42,Previous Year Rs. 40.96) 10.90 184.33Others (Tax Deducted At Source Rs. 2.62Previous Year Rs. 0.58) 23.60 45.05

34.50 229.38

Exchange Difference Others (Net) 478.59 -Sale of Steam 16.06 16.44Insurance Claim 77.29 74.38Profit on Sale of Assets 0.22 17.11Export Incentives 403.25 400.13Manufacturing Charges (Tax Deducted at SourceRs. 0.55, Previous Year Rs.1.54) 24.13 46.68Dividend On Trade Investment 0.52 0.49Bill Discounting Income 17.92 -Sale of Scrap 240.37 212.36Miscellaneous Income 87.34 72.81

1380.19 1069.78

15 MATERIAL COSTRaw and Packing MaterialsOpening Stock 2455.29 1971.29Add : Acquired pursuant to scheme of amalgamation - 49.36Purchases 14719.11 15653.52

17174.40 17674.17Less : Closing Stock 2675.24 2455.29

14499.16 15218.88

16 PURCHASE OF GOODS/MATERIALS FOR RESALEOpening Stock 1247.79 609.11Add : Acquired pursuant to scheme of amalgamation - 16.21Less : Reclassified pursuant to scheme of amalgamation - 1247.79 41.39 583.93

Purchases 3445.94 4013.75

4693.73 4597.68Less: Closing Stock ( including material for resale Rs.Nil,Previous year Rs. 108.36) 761.38 1247.79

3932.35 3349.89

SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNTFor the Year Ended 31ST MARCH, 2008


(Rs. in Lakhs)


17 STAFF COSTSalaries and Other Benefits 7757.53 6605.41Contribution to Provident Fund and Other Funds 882.88 883.95Gratuity 184.83 98.85Staff Welfare 169.74 129.74

8994.98 7717.95

18 OTHER EXPENSESManufacturing Charges 448.84 411.23Stores & Spares 292.34 244.19Power & Fuel 1658.84 1352.40Excise Duty 247.10 759.35Compensation Rent 442.54 420.37Rates and Taxes 31.60 37.20Insurance 146.92 174.58Freight & Transport Charges 2942.01 2646.44Repairs to :-

Building 24.35 36.23Machinery 204.27 232.24Others 273.06 501.68 259.94 528.41

Loss on sale/discard of assets 12.96 16.46Sales promotion and publicity 6508.54 5910.56Selling Commission 758.57 449.59Travelling & Conveyance 1876.38 1751.66Directors' Fees 5.48 4.52Interest And Financing ChargesWorking Capital Borrowings 1146.00 753.85Others 651.89 1797.89 371.03 1124.88

Royalty 154.63 143.74Remuneration to AuditorsAudit Fees 24.00 18.20Taxation Matters 3.33 3.08Other Services 5.00 32.33 11.05 32.33Donations 0.49 21.86Exchange Difference Others (Net) - 114.05Bad debts 842.04 -Miscellaneous 2610.44 2727.85

21311.62 18871.67

19 (INCREASE) / DECREASE IN STOCKClosing StockWork-in-process 414.83 613.45Finished Goods 2634.32 3049.15 3274.79 3888.24

Less:Opening StockWork-in-process 613.45 870.08Finished Goods 3274.79 2857.38Add :- Acquired pursuant to scheme of amalgamationWork-in-process - 4.49Finished Goods - 61.53Add : Reclassified pursuant to scheme ofamlagamation from Traded Stock - 3888.24 41.39 3834.87

839.09 (53.37)

SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNTFor the Year Ended 31st March, 2008 (CONTD.)


SCHEDULES FORMING PART OF THE ACCOUNTSFor the Year Ended 31st March, 2008

20. NOTES ON ACCOUNTS

1. SIGNIFICANT ACCOUNTING POLICIES:

1.1. BASIS OF ACCOUNTING

The Financial statements are prepared on mercantilebasis under the historical cost convention inaccordance with the Generally Accepted AccountingPrinciples in India, relevant provisions of theCompanies Act, 1956 and comply with themandatory Accounting Standards issued by theInstitute of Chartered Accountants of India (ICAI).

1.2. REVENUE RECOGNITION

All revenue and expenses are accounted for onaccrual basis. Revenue is recognised when nosignificant uncertainties exist in relation to the amountof eventual receipt.

1.3. FIXED ASSETS

Fixed Assets are stated at cost of acquisition andincludes other direct / indirect and incidentalexpenses incurred to put them into use but excludesCENVAT availed on such assets.

Incentives / Subsidies granted by any GovernmentAuthorities to encourage establishment of industriesor expansion are considered as Capital Reservesand are not adjusted to the cost of Fixed Assets.

All indirect expenses incurred during projectimplementation and on trial run are treated asincidental expenditure during construction andcapitalized.

1.4. DEPRECIATION

Depreciation is provided on Straight Line Method atthe rates and on the basis specified in Schedule XIVto the Companies Act, 1956. Premium paid forleasehold land is amortized over the lease period.

1.5. INTANGIBLES

Intangible assets are stated at costs less accumulatedamortization.

Intangible assets are amortized over a period of 3years.

1.6. IMPAIRMENT OF ASSETS

Where there is an indication that an asset is impaired,the recoverable amount, if any, is estimated and theimpairment loss is recognized to the extent carryingamount exceeds recoverable amount.

1.7. PROVISIONS AND CONTINGENCIES

The Company creates a provision when there is apresent obligation as a result of past event thatprobably requires an outflow of resources and a

reliable estimate can be made of the amount of theobligation. A disclosure for a contingent liability ismade when there is a possible obligation or presentobligation that probably will not require an outflow ofresources or where reliable estimate of the amountof the obligation cannot be made.

1.8. INVENTORIES

Inventories are stated at the lower of cost or netrealizable value. Cost is determined on the basis ofFIFO method. The cost of work in progress (otherthan those lying at third party manufacturing site whichis valued at material cost) and finished goodscomprise direct material, direct labour, other directcost and related production overheads.

Fuel is valued at cost.

Stores are written off in the year of purchase.

1.9. INVESTMENTS

Investments, which are Long Term in nature arestated at cost of acquisition with provision wherenecessary for diminution, other than temporary, inthe value of investments.

1.10. EMPLOYEE BENEFIT

1.10.1. Short Term Employee Benefits

Short term employee benefits arerecognised in the period during which theservices have been rendered.

1.10.2. Long Term Employee Benefits:

a) Provident Fund, Family pension fund &Employees' State Insurance Scheme

As per Provident Fund Act, 1952 allemployees of the company are entitled toreceive benefits under the provident fund &family pension fund which is a definedcontribution plan. These contributions aremade to the fund administrated andmanaged by Government of India. Inaddition, some employees of the companyare covered under Employees' StateInsurance Scheme Act, 1948, which arealso defined contribution schemesrecognised and administrated byGovernment of India.

The Company's contributions to theseschemes are recognised as expense inprofit and loss account during the period inwhich the employee renders the relatedservice. The company has no furtherobligation under these plans beyond itsmonthly contributions.


b) Superannuation Plan:

Some employees of the company areentitled to superannuation, a definedcontribution plan which is administratedthrough Life Insurance Corporation of India("LIC"). Superannuation benefits arerecognised in the Profit and Lossaccount.

c) Leave Encashment:

The company has provided for the liabilityat year end on account of unavailed earnedleave as per the actuarial valuation.

d) Gratuity:

The Company provides for gratuityobligations through a Defined benefitsRetirement plan ('The Gratuity Plan')covering all employees. The present valueof the obligation under such Definedbenefits plan is determined based onactuarial valuation using the Project UnitCredit method, which recognises eachperiod of service as giving rise to additionalunit of employee benefit entitlement andmeasure each unit separately to build upfinal obligation. The obligation is measuredat the present value of the estimated cashflows. The discount rate used fordetermining the present value of thedefined obligation under defined benefitplan, is based on the market yields onGovernment securities as at the balancesheet date. Actuarial gains and losses arerecognised in Profit and Loss Account asand when determined.

The Company makes annual contributionto LIC for the gratuity plan in respect of allthe employees.

1.11. FOREIGN CURRENCY TRANSACTION

Transactions in foreign currency are recorded at theexchange rate prevailing on the date of thetransaction. Foreign currency monetary currentassets and liabilities at the Balance Sheet date aretranslated at the exchange rate prevailing on the dateof Balance Sheet. Exchange rate differences resultingfrom foreign exchange transactions settled duringthe period including year-end translation of assetsand liabilities are recognised in the Profit and Lossaccount.

In case of forward exchange contracts or any otherfinancial instruments that is in substance a forwardexchange contract to hedge the foreign currency riskwhich is on account of firm commitment and/or is ahighly probable forecast transaction, the premiumor discount arising at the inception of the contract isamortized as expense or income over the life ofcontract.

Gain/Loss on settlement of transaction arising oncancellation or renewal of such a Forward exchangecontract is recognised as income or as expense forthe period.

In all other cases the gain or loss on contract iscomputed by multiplying the foreign currency amountof the forward exchange contract by the differencebetween the forward rate available at the reportingdate for the remaining maturity of the contract andthe contracted forward rate (or the forward rate lastto measure a gain or loss on that contract for anearlier period), is recognised in the Profit and Lossaccount for the period.

1.12. LEASES

Leases wherein a significant portion of the risks andreward of ownership are retained by the lessor areclassified as Operating Leases. Lease rentals inrespect of such leases are charged to the Profit andLoss Account.

1.13. RESEARCH AND DEVELOPMENT

Revenue expenditure on Research and Developmentis charged against the Profits of the year in which it isincurred.

Capital expenditure on Research and Developmentis treated as Fixed Assets.

1.14. BORROWING COST

Borrowing Costs directly attributed to the acquisitionof fixed assets are capitalised as a part of the cost ofasset upto the date the asset is put to use. OtherBorrowing Costs are charged to the Profit and Lossaccount in the year in which they are incurred.

1.15. INCOME TAX

a. Tax expenses comprise of current, deferred andfringe benefit tax.

b. Provision for current income tax and fringebenefit tax is made on the basis of relevantprovisions of the Income Tax Act, 1961 asapplicable to the financial year.

c. Deferred Tax is recognised subject to the

SCHEDULES FORMING PART OF THE ACCOUNTS (CONTD.)For the Year Ended 31st March, 2008


consideration of prudence on timing differences,being the difference between Taxable Incomeand Accounting Income that originate in oneperiod and are capable of reversal in one or moresubsequent periods.

d. Minimum Alternative Tax (MAT) credit isrecognised as an asset only when and to theextent there is convincing evidence that theCompany will pay normal income tax during thespecified period.

1.16. EMPLOYEE STOCK OPTION PLAN

The accounting value of stock options representingthe excess of the market price over the exerciseprice of the shares granted under "Employees StockOption Scheme" of the company, is amortized onstraight line basis over the vesting period as"Deferred Employees Compensation" in accordancewith SEBI (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines,1999.

2. Additional information as required by paragraphs 3 and 4 ofpart II of Schedule VI to the Companies Act, 1956 is attachedherewith.

3. In the opinion of the Board, current assets, loans and advancesare approximately of the value stated, if realized in the ordinarycourse of business and provisions for all the known liabilitiesand depreciation are adequate and not in excess of theamount reasonably necessary.

4. The contingent liabilities not provided for:

4.1. Letter of Credit opened by Banks Rs.362.75 Lakhs(Previous Year Rs. 473.74 Lakhs)

4.2. Guarantee issued by the Bank on behalf of theCompany Rs.942.37 Lakhs(Previous Year Rs. 744.99 Lakhs)

4.3. Central Excise Demand (including show cause noticesof Rs. 33.42 Lakhs) of Rs.49.56 Lakhs (PreviousYear Rs 35.25 Lakhs) .

4.4. Income Tax Demand of Rs.990.21 Lakhs (againstwhich the Company has made pre-deposits ofRs.990.21 Lakhs) being disputed in Appeal.

4.5. Sales Tax Demand of Rs 6.99Lakhs (Previous YearRs.6.99 Lakhs) being disputed in appeal (againstwhich the Company has made pre-deposit ofRs.1.51 Lakhs and has also furnished BankGuarantees worth Rs.5.23 Lakhs).

5. Estimated amount of Contracts remaining to be executed onCapital Account and not provided for (net of advances)

Rs.141.26 Lakhs (Previous Year Rs. 351.38 Lakhs)

6. The Company has been legally advised to computeoutstanding due to S.S.I Units after allowing thirty days fromthe day when the payment gets due as per the terms ofpayment agreed upon in writing by the Company.

7. The names of Small Scale Industrial Undertakings to whomthe Company owes sum, which is outstanding for more than30 days at the balance sheet date are: Boxcare PackagingsPvt. Ltd., Pharmaceuticals Coatings Pvt. Ltd., Super LabelMfg. Co., Zen Bio-Tech Pvt. Ltd.

The above information and that given in Schedule 11 "CurrentLiabilities" regarding Small Scale Industrial Undertaking hasbeen determined to the extent such parties have beenidentified on the basis of information available with theCompany and relied upon by the Auditor.

There are no reported Micro, Small and Medium Enterprisesas defined in the Micro, Small and Medium EnterprisesDevelopment Act, 2006 to whom the Company owes dues.

8. There is no liability for interest which would be payable under'The Interest on Delayed Payments to Small Scale andAncillary Industrial Undertakings Ordinance 1992'. Moreover,the Company has also not received any claims in respect ofinterest.

9. Traveling expenses of field personnel include expenses onstationery and printing, conveyance, postage, miscellaneousexpenses, etc.

10. Adjustment relating to previous year amounted to Rs. 4.16Lakhs (Net Credit) (Previous Year Rs. 20.35 Lakhs Net Debit).The same has been debited/credited under respective headsof accounts.

11. The Pharmaceutical Division of Unique PharmaceuticalLaboratories Ltd (UPLL) which was acquired by the companyon a going concern basis, has received demand notices fromDept. of Chemicals & Fertilizers, Govt. of India, New Delhidemanding a sum of Rs 461.47 Lakhs in respect of the BulkDrug Metronidazole and a further sum of Rs 591.05 Lakhs inrespect of the Bulk Drug Oxyphenbutazone. These amountswere claimed on hypothetical basis in 1996, under para 7(2)of DPCO 79 read with para 14 of DPCO 87 and para 12 ofDPCO 95, long after repeal of DPCO 79 and DPCO 87 andgains allegedly notionally made by it by procuring the BulkDrugs at alleged lower cost. UPLL has filed review petitionagainst each of these claims disputing the jurisdiction, powerand legal or rational basis for making such demands,particularly in view of the repeal of DPCO 79 and DPCO 87.The Review petitions are still not decided. As per the legaladvice received by the Company, there is no liability andaccordingly no provision is being made in the Accounts forthese claims and demands.



12. The company has a long term strategic investment inSpectrum Pharmaceuticals INC of Rs. 449.30 Lakhs. In viewof the long term prospect, in the opinion of the management,no provision for diminution is required.

13. The Company, during the year, has adopted AccountingStandard 15 (Revised) "Employee Benefits" issued by theICAI In accordance with the stipulations of the Standard, theCompany has adjusted Rs. 476.51 Lakhs (net of deferredtax aggregating to Rs. 245.36 Lakhs) towards the additionalliability towards defined benefit obligation in respect of gratuityliability up to 31st March, 2007 against the opening balanceof General Reserves as at 31st March, 2007.

During the year, Company has recognised the followingamounts in the financial statements:

a) Defined Contribution PlanContribution to Defined Contribution Plan, recognisedas expense for the year are as under:

b) Defined Benefit Plan

Reconciliation of opening and closing balances of DefinedBenefit obligation (Rs. in Lakhs)

Particulars Rs. In Lakhs

Employer's Contribution to Provident Fund 768.77& Family Pension Fund

Employer's Contribution to Superannuation Fund 94.61

Employer's Contribution to Employees' State 19.50Insurance Scheme

Particulars Gratuity(Funded)

Defined Benefit obligation at the beginning of the year 1183.19Current Service Cost 67.77Interest Cost 97.05Actuarial (gain)/loss 59.66Benefits Paid (75.57)Defined Benefit obligation at year end 1332.11

Reconciliation of opening and closing balances of fairvalue of plan Assets (Rs. in Lakhs)

Particulars Gratuity(Funded)

Fair value of plan assets at the beginning of the year 461.32Expected return on plan assets 41.13Actuarial gain/(loss) 5.76Employer contribution 90.60Benefits Paid (75.57)Fair value of plan assets at the end of the year 523.24

Actual Return on Plan Assets

Particulars Rs. in Lakhs

Expected return on plan assets 41.13Actuarial gain/(loss) on plan assets 5.76Actual return on plan assets 46.89

Reconciliation of fair value of plan assets and benefitobligations (Rs. in Lakhs)

Expense recognised during the year (Under the head "Personnel Cost "-Refer Schedule 17) (Rs. in Lakhs)

Investment details

The Company made annual contributions to the LIC ofan amount advised by the LIC. The Company was notinformed by LIC of the Investments made or the break-down of plan assets by investment type.

Actuarial Assumptions

Particulars Gratuity Leave(Funded) Encashment

(Non Funded)

Current Service Cost 67.77 55.07

Interest Cost 97.05 16.03

Expected return on Plan Assets (41.13) -

Actuarial (gain)/loss 53.90 10.43

Expense Recognised in Profit and 177.60 81.53Loss Account

14. The amount of Excise Duty disclosed as deduction fromturnover is the Excise Duty for the year, except the exciseduty related to the difference between the closing stock andopening stock and Excise Duty paid but not recovered, whichhas been disclosed in the (increase)/decrease in stock andother expenses respectively. (Increase)/decrease in stocksinclude Excise Duty on finished goods (net) Rs.19.83 Lakhs(previous year Rs. 7.78 Lakhs)

15. SEGMENT REPORTING

The Company has one segment of activity namely'Pharmaceuticals'.

16. RELATED PARTY DISCLOSURE

Related party disclosure as required by AS - 18, 'RelatedParty Disclosures' issued by the Institute of CharteredAccountants of India are given below:


(Non Funded)

Fair value of assets as at 31st 523.24 NilMarch, 2008

Present value of obligation as at 31st 1332.11 202.66March, 2008

Amount recognised in Balance Sheet 808.87 202.66


(Non Funded)

Discount Rate (per annum) 8.00% 8.00%

Expected Rate of Return on PlanAssets (per annum) 8.00% -

Salary Escalation (per annum) 5.00% 5.00%



16.1Names and Relationships of the Related Parties:

i) Subsidiary Companies:

a. J. B. Life Science Overseas Limitedb. OOO Unique Pharmaceuticals Laboratoriesc. J.B. Healthcare Pvt Ltd, Jersey, Channel Island

ii) Associate Concerns / Trusts / Companies/JointVenture

a. Mody Trading Companyb. Mody Brothersc. Jyotindra Family Trustd. Dinesh Family Truste. Shirish Family Trustf. Biotech Laboratories (Pty) Ltd.g. J B SEZ Private Limited

iii) Key Management Personnel:

a. Mr. Jyotindra B. Modyb. Mr. Dinesh B. Modyc. Mr. Shirish B. Mody

iv) Relative of Key Management Personnel:a. Mr. Pranabh D. Modyb. Mrs. Ansuya J. Modyc. Mrs. Kumud D. Modyd. Mrs. Bharati S. Modye. Mrs. Pallavi B. Mehtaf. Mrs. Purvi U.Asherg. Mrs. Priti R. Shahh. Mrs. Deepali A. Jasanii. Mr. Nirav S. Modyj. Mrs. K. V. Gosaliak. Mrs. N. R. Mehtal. D. B. Mody - HUFm. S. B. Mody - HUF

16.2 Transactions with the related parties during the year:(Rs. In Lakhs)

Transaction Subsidiary Associated Key Relative of Keywith Compaines Concern/ Management ManagementRelated Trust/Joint Personnel PersonnelParties Venture

IncomeSale of Material/ 4242.72 951.55 Nil NilGoods/ Others (2163.75) (17.04) (Nil) (Nil)

Miscellaneous Nil 8.24 Nil N i lIncome (Nil) (Nil) (Nil) (Nil)

ExpenditurePatent Fees Nil 0.15 Nil Nil

(Nil) (Nil) (Nil) (Nil)

Analytical Charges Nil 1.19 Nil Nil

(Nil) (Nil) (Nil) (Nil)

(Rs. In Lakhs)

Transaction Subsidiary Associated Key Relative of Keywith Compaines Concern/ Management ManagementRelated Trust/Joint Personnel PersonnelParties Venture

Selling Commission Nil 19.32 Nil Nil(Nil) (18.63) (Nil) (Nil)

Rent Nil 181.43 17.64 47.44

(Nil) (138.47) (21.24) (47.44)

Remuneration Nil Nil 498.45 126.21

(Nil) (Nil) (648.31) (97.59)

Interest on Nil Nil Nil 67.79Deposits (Nil) (Nil) (5.37) (82.15)

O/S payables Nil 1.15 210.24 1014.78as on 31st (Nil) (Nil) (241.62) (852.72)March, 2008

O/S receivables as 3404.10 502.28 19.77 25.28on 31st (2027.64) (100.15) (19.77) (25.28)March, 2008

17. Details of Research & Development Expenditureincurred during the year at the following R&DCentres:

(Rs. In Lakhs)

ThaneThaneThaneThaneThane ThaneThaneThaneThaneThane AnkleshwarAnkleshwarAnkleshwarAnkleshwarAnkleshwar PanoliPanoliPanoliPanoliPanoli

APIAPIAPIAPIAPI FormulationsFormulationsFormulationsFormulationsFormulations

Revenue Expenditure:

Staff Cost 74.49 58.38 Nil Nil

Power & Fuel 0.04 5.23 Nil Nil

Travelling & Conveyance 1.45 14.67 Nil Nil

Legal & Professional Charges 0.63 0.06 Nil Nil

Product Registration &

Other Fees 188.66 1.46 Nil Nil

Clinical Trial & Bioequivalent

Studies 192.93 4.26 2.41 Nil

Expenses for Patent

& Trademark 60.92 Nil Nil Nil

Laboratory Expenses 3.95 22.91 10.23 0.31

Others 8.95 35.46 0.35 Nil

Total Revenue Expenditure 532.02 142.43 12.99 0.31

Capital:

R & D Equipments Nil 24.85 61.63 Nil

EDP Equipments 1.84 1.66 Nil Nil

Office Equipments Nil 1.57 Nil Nil

Electrical Equipments Nil 55.77 Nil Nil

Furniture & Fixtures 0.40 20.29 Nil Nil

Air Conditioners Nil 22.53 Nil Nil

Handling Equipments Nil 2.22 Nil Nil

Laboratory Equipments 1.73 Nil Nil Nil

Factory Building Nil 121.71 Nil Nil

Plant & Machinery Nil 73.53 Nil Nil

Total Capital Expenditure 3.97 324.13 61.63 Nil

TOTAL 535.99 466.56 74.62 0.31



18. The break-up of deferred tax assets and liabilitiesinto major components at the year end is as follows:

19. EARNINGS PER SHARE:

Earnings Per Share (EPS) is Calculated in accordance withAccounting Standard - 20 (AS-20) as under:

20. FINANCIAL AND DERIVATIVE INSTRUMENTS:

a)a)a)a)a) Derivative Instruments:Derivative Instruments:Derivative Instruments:Derivative Instruments:Derivative Instruments:

The Company has entered into forward contract tooffset foreign currency risks arising from the amountsdenominated in currencies other than the Indian rupee.The counter party to such forward contract is a bank.These contract s are entered into the hedge the foreigncurrency risks. Details of forward contracts outstandingat the year end.

21. A. Break-up of Managerial Remuneration:-

Net Profit attributable to EquityShareholders (Rs. in Lakhs) 5169.13

Weighted Average No. of Equity shares (Nos)

� Basic 8,43,26,350

� Effect of Dilutive equity shares equivalentStock Options outstanding 3,964

Diluted 8,43,30,314

Nominal value of equity shares (Rs.) 2.00

Earnings per share (Rs.)

Basic 6.13

Diluted 6.13


CurrencyCurrencyCurrencyCurrencyCurrency ExposureExposureExposureExposureExposure As at March 31, 2008As at March 31, 2008As at March 31, 2008As at March 31, 2008As at March 31, 2008to buy/sellto buy/sellto buy/sellto buy/sellto buy/sell RupeesRupeesRupeesRupeesRupees Foreign Currency Foreign Currency Foreign Currency Foreign Currency Foreign Currency

(In Lakhs)(In Lakhs)(In Lakhs)(In Lakhs)(In Lakhs)US Dollars Sell 29,417.23 7,19,00,000

As at March 31, 2008As at March 31, 2008As at March 31, 2008As at March 31, 2008As at March 31, 2008 As at March 31, 2007As at March 31, 2007As at March 31, 2007As at March 31, 2007As at March 31, 2007ForeignForeignForeignForeignForeign RupeesRupeesRupeesRupeesRupees ForeignForeignForeignForeignForeign RupeesRupeesRupeesRupeesRupees

CurrencyCurrencyCurrencyCurrencyCurrency (In Lakhs)(In Lakhs)(In Lakhs)(In Lakhs)(In Lakhs) CurrencyCurrencyCurrencyCurrencyCurrency (In Lakhs)(In Lakhs)(In Lakhs)(In Lakhs)(In Lakhs)

ReceivableReceivableReceivableReceivableReceivableagainst against against against against exportexportexportexportexportof goods:of goods:of goods:of goods:of goods: US Dollars Euro SGD STGPayablePayablePayablePayablePayableagainstagainstagainstagainstagainstSecuredSecuredSecuredSecuredSecuredLoans:Loans:Loans:Loans:Loans:US DollarsPayablePayablePayablePayablePayableagainst Importagainst Importagainst Importagainst Importagainst Importof goods &of goods &of goods &of goods &of goods &Services :Services :Services :Services :Services :EUROCHFSGDSTGUSD

Nil Nil 3,56,34,894 15,483.36Nil Nil 2,44,010 141.28Nil Nil 21,685 6.07Nil Nil 80,832 68.91

2,61,06,481 10,450.85 25,00,000 1087.00

6,652 4.16 2,240 1.301,989 0.70 Nil Nil1,200 0.35 Nil Nil

533 0.43 Nil Nil11,44,877 464.05 Nil Nil

b)b)b)b)b) Foreign currency exposure at the year end notForeign currency exposure at the year end notForeign currency exposure at the year end notForeign currency exposure at the year end notForeign currency exposure at the year end not

hedged by derivative instruments.hedged by derivative instruments.hedged by derivative instruments.hedged by derivative instruments.hedged by derivative instruments.

(Rs. in Lakhs)

B. Computation of Net Profit u/s 198of the Companies Act, 1956 &Commission payable to ManagingDirector & Whole Time Directors

Profit Before Tax 4910.76

Add: Loss on sale/discard of Assets 12.96 Directors Remuneration 763.31 Directors Fees 5.48 781.75

Less: Profit on sale of Assets 0.22 Provision for FBT 106.40 106.62

5585.89

Commission payable to ManagingDirector and two Whole-timeDirectors Nil

The above remuneration includes Rs. 204.72 Lakhs for whichthe company is in process of applying to the CentralGovernment.

(Rs. in Lakhs)

PARTICULARS 31.03.08 31.03.07

Deferred Tax Assets

Others 15.87 0.91

Retirement Benefits 343.82 57.04

359.69 57.95

Deferred Tax Liability

Depreciation 1443.63 1641.62

Timing Difference of Tax HolidayUnits (Sec.10B) 382.16 292.15

1825.79 1933.77

Net Deferred Tax Liabilities 1466.10 1875.82

(Rs. in Lakhs)

31.03.08 31.03.07

Paid to Managing Director andWhole time Directors

Salaries 611.17 503.83

Contribution to Funds 86.05 70.56

Value of Perquisites 66.09 48.11

Commission - 240.00

763.31 862.50


23. Figures of previous year have been regrouped, rearranged and recast wherever considered necessary.

24. Figures in brackets indicate corresponding figures of previous year.




22.22.22.22.22. Loans and advances in the nature of Loans given to Subsidiaries and Associates etc.Loans and advances in the nature of Loans given to Subsidiaries and Associates etc.Loans and advances in the nature of Loans given to Subsidiaries and Associates etc.Loans and advances in the nature of Loans given to Subsidiaries and Associates etc.Loans and advances in the nature of Loans given to Subsidiaries and Associates etc.

(Rs. in Lakhs)

Name of the Company Nature of Relation Nature of Transaction As at March 31, 2008 Maximum Balance duringthe year

J. B. Healthcare Pvt. Ltd. Subsidiary Loan 65.49 70.98



Additional information pursuant to the provisions of paragraphs 3,4(c) & 4(d) of Part II of Schedule VIof the Companies Act,1956 (as certified by Director)

1) Installed Capacity & Production for the year ended 31st March, 2008:

NOTES FORMING PART OF THE ACCOUNTSFor the Year Ended 31st March, 2008

(Figures.in 000's)

Class of Goods Unit Installed * * * Production Captive Use Net Production

Bulk Drugs Kgs 3259.00 * 1272.69 767.78 504.91(3259.00) (1056.90) (629.58) (427.32)

Ointments Kgs 492.00 * 356.81 - 356.81(492.00) (354.71) - (354.71)

Liquids Ltrs 3210.00 * 1519.41 - 1519.41(3210.00) (1316.55) - (1316.55)

Cartridges Nos 10000.00 148.80 - 148.80(10000.00) (266.52) - (266.52)

Capsules Nos 370000.00 * 67221.63 - 67221.63(370000.00) (88238.38) - (88238.38)

Tablets Nos 3940000.00 * 3117700.63 - 3117700.63(3940000.00) (3331897.23) - (3331897.23)

Powder Kgs 150.59 * 574.96 - 574.96(150.59) (214.54) - (214.54)

Injections/Vials Nos 182563.00 * 85294.93 - 85294.93(182563.00) (77234.24) - (77234.24)

* Includes goods manufactured on loan licence basis, by third party on our behalf and excludes goods manufactured on behalf ofthird parties.

* * Installed capacity is as per the certificate issued by the Executive Director (Technical & Production ), not verified by the Auditorbeing a technical matter.

2) Details of opening stock & closing stock in respect of goods manufactured & purchased

Opening Stock Closing StockClass Of Goods Units Quantity Value Quantity Value

(In 000's) (Rs.in Lakhs) (In 000's) (Rs.in Lakhs)

1) Bulk Drugs Kgs 41.30 313.84 36.64 302.46(47.67) (395.38) (41.30) (313.84)

2) Ointments Kgs 44.11 138.12 35.89 96.97(34.16) (156.71) (44.11) (138.12)

3) Liquids Ltrs 173.54 330.52 238.74 321.57(181.60) (264.35) (173.54) (330.52)

4) Capsules Nos 17069.82 176.83 6517.02 63.13(18741.75) (160.34) (17069.82) (176.83)

5) Tablets Nos 521375.75 2493.03 382636.01 1497.12(234739.71) (1423.10) (521375.75) (2493.03)

6) Powder Kgs 50.45 140.35 27.05 101.62(13.47) (73.93) (50.45) (140.35)

7) Injections/Vials Nos 8611.75 790.68 13458.29 1001.80(7205.79) (996.27) (8611.75) (790.68)

8) Excise Duty (Bond Stock) 30.85 11.02(38.63) (30.85)

4414.21 3395.70(3508.70) (4414.21)


3) Sales in respect of each class of finished goods produced & traded for the year ended 31st March, 2008:

Class Of Goods Units Quantity (in 000's) Value (Rs in Lakhs) 1) Bulk Drugs Kgs 509.57 3464.47

(433.69) (2937.62) 2) Ointments Kgs 453.22 7258.70

(437.10) (7084.57) 3) Liquids Ltrs 1776.37 5689.03

(1508.47) (4605.39)4) Cartridges Nos 147.60 3.90

(263.55) (9.58)5) Capsules Nos 81256.15 1025.24

(100385.65) (1258.84)6) Tablets Nos 3362540.64 27016.17

(3315491.35) (26028.74)7) Powder Kgs 579.20 2945.13

(268.16) (2903.65)8) Injections/Vials Nos 81000.76 8822.57

(79774.29) (8320.05)9) Other Raw & Pack Materials - - 746.36

(886.82)56971.56

(54035.25)

4) Details in respect of purchase of products for resale:

Class Of Goods Units Quantity (in 000's) Value (Rs in Lakhs)1) Ointments Kgs 88.85 515.80

(96.93) (560.68)2) Liquids Ltrs 346.33 560.33

(207.13) (330.95)3) Capsules Nos 5477.60 109.57

(12288.90) (255.98)4) Tablets Nos 133479.51 1392.66

(302825.69) (1746.79)5) Ampoules / Vials Nos 2523.33 209.76

(4638.95) (620.56)6) Powder Kgs 6.77 49.66

(17.06) (155.85)7) Other Raw & Pack Materials Kgs - 608.16

(342.93)3445.94

(4013.75)


5) Information in respect of Raw Material consumed.Item Value (Rs.in Lakhs)Pharmaceutical Chemicals 8147.87

(8778.80)6) Value of consumption of directly Imported & Indigenously

obtained Raw Materials & the percentage of each to the total.Rs. in Lakhs Percentage (%)

1. Directly Imported 1138.52 13.97(1206.21) (13.74)

2. Indigenously obtained 7009.35 86.03(7572.59) (86.26)8147.87 100.00

(8778.80) (100.00)


7) Value of Direct Imports (C.I.F value)(Rs. in Lakhs)

i. Raw Materials & Packing Materials 2014.09(1435.44)

ii. Component Stores & Spare Parts 83.39(63.91)

iii. Capital 145.05

(2924.01)2242.53

(4423.36)8) Earnings in foreign exchange

(Rs. in Lakhs)

Export of Goods (At F.O.B) 31816.53

(28766.89)Other Receipts 132.58

(5.08)

9) Expenditure in foreign currency(Rs. in Lakhs)

Travelling 316.24(288.70)

Legal & Professional Fees 35.94

(25.63)Other expenditure 10365.14

(8603.03)Dividend 7.42

(12.86)

Number of Non-Resident Shareholders 4(4)

Final Dividend 2006-2007 7.42Number of Shares 494,573

Dividend to remaining 249 Non-ResidentShareholders is paid in IndiaPrevious year

Final Dividend 2005-2006 (7.42)Number of Shares (494,573)

Interim Dividend 2006-2007 (5.44)Number of Shares (494,573)




J. K. Shah S. B. Mody Beejal DesaiPartner Whole-time Director (Marketing) Vice President & Company SecretaryMembership No.3662Mumbai: 8th May,2008 Mumbai: 8th May,2008


BALANCE SHEET ABSTRACT(Additional Information Pursuant to Part IV of the Schedule VI to the Companies Act, 1956)

(Rs. in Lakhs)

Balance Sheet Abstract and Company's General Business Profile

I Registration Details

Registration No. 19380 State Code 11

Balance Sheet Date 31.03.2008

II Capital raised during the year

Public issue Nil Right Issue NilBonus issue Nil Private Placement Nil

III Position of Mobilisation and Deployment of Funds

Total Liabilities 74274.45 Total Assets 74274.45

Sources of Funds

Paid-up capital 1686.53 Reserves & Surplus 44632.06Share Application Money - Unsecured Loans 4102.42Secured Loans 15449.58 Deferred Tax Liabilities 1466.10

Application of Funds

Net Fixed Assets 23352.95 Investments 4290.55Net Current Assets 39693.19 Misc.expenditure NilAccumulated Losses Nil

IV Performance of company

Turnover 54809.43 Total Expenditure 51278.86Profit Before Tax 4910.76 Profit After Tax 5169.13Earning Per Share (Rs.) 6.13 Dividend (Rs./share) 0.50

V Generic Names of Three Principal Products of Company (as per monetary terms)

Item Code (ITC code) 300490.22 Product Description Metronidazole PreparationItem Code (ITC code) 300390.01 Product Description Ayurvedic PreparationItem Code (ITC code) 300490.42 Product Description Ranitidine Preparation


Beejal Desai J.B. ModyVice President & Company Secretary Chairman & Managing Director

D. B. ModyWhole-time Director (Administration)

S.B. ModyMumbai : 8th May, 2008 Whole-time Director (Marketing)


AUDITORS' REPORT ON CONSOLIDATED ACCOUNT

AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTTO THE BOARD OF DIRECTORS OF J.B. CHEMICALS & PHARMACEUTICALS LTD

1. We have audited the attached Consolidated Balance Sheet of J.B. Chemicals & Pharmaceuticals Ltd. (“the Company”), its subsidiariesand a joint venture (“the Group”) as at 31st March, 2008 and the related Consolidated Profit and Loss Account and the ConsolidatedCash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of thecompany’s management and have been prepared by the Management on the basis of separate financial statements and otherfinancial information regarding components. Our responsibility is to express an opinion on these financial statements based on ouraudit.

2. We conducted the audit in accordance with generally accepted auditing standards in India. Those standards require that we planand perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements.An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significant estimates made by the management, as well as evaluatingthe overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. We did not audit the financial statements of certain Subsidiaries and a Joint venture whose financial statements reflect Group’sshare of total assets of Rs.9131.62 lakhs as at 31st March 2008 and the Group’s share of total Revenue of Rs.5976.88 lakhs andthe net cash outflows amounting to Rs 22.15 lakhs for the year ended on that date as considered in consolidated financialstatement. We have relied upon unaudited financial statement as provided by the management of the above said Subsidiaries andJoint venture entity for the purpose of our examination of consolidated financial statements.

4. The Company has provided excess managerial remuneration during the year amounting to Rs. 204.72 Lakhs forThe Company has provided excess managerial remuneration during the year amounting to Rs. 204.72 Lakhs forThe Company has provided excess managerial remuneration during the year amounting to Rs. 204.72 Lakhs forThe Company has provided excess managerial remuneration during the year amounting to Rs. 204.72 Lakhs forThe Company has provided excess managerial remuneration during the year amounting to Rs. 204.72 Lakhs forwhich the company is in process of applying to the Central Government.which the company is in process of applying to the Central Government.which the company is in process of applying to the Central Government.which the company is in process of applying to the Central Government.which the company is in process of applying to the Central Government.

5. We report that the consolidated financial statements have been prepared by the Group in accordance with the requirements ofAccounting Standards issued by the Institute of Chartered Accountants of India viz. Accounting Standard 21 ‘ConsolidatedFinancial Statements’ and Accounting Standard 27 ‘Financial Reporting of Interests in Joint Ventures’ in Consolidated FinancialStatements’, the Accounting Standard Interpretations and amendments thereto, to the extent applicable for the year ended 31st

March, 2008 and on the basis of the individual financial statements of J.B. Chemicals & Pharmaceuticals Ltd., its subsidiaries andjoint venture included in the aforesaid consolidation.

6. Subject to para 3 and 4 above and on the consideration of other financial information of the components, and to the best of ourinformation and according to explanation given to us, we are of the opinion that the attached consolidated financial statementsread together with notes thereon, give a true and fair view in conformity with the accounting principles generally accepted in India:

a. In case of the Consolidated Balance Sheet, of the State of Affairs of the Group as at 31st March, 2008;

b. In the case of the Consolidated Profit and Loss Account, of the Profit of the Group for the year ended on that date; and

c. In the case of the Consolidated Cash Flow Statement, of the Cash Flow of the Group for the year ended on that date.

For J. K. SHAH & CO.J. K. SHAH & CO.J. K. SHAH & CO.J. K. SHAH & CO.J. K. SHAH & CO.Chartered Accountants

J. K. SHAHJ. K. SHAHJ. K. SHAHJ. K. SHAHJ. K. SHAHPlace: Mumbai PartnerDate : 8th May, 2008 Membership No: 3662


CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2008


For J. K. Shah & Co J. B. Mody D. B. ModyChartered Accountants Chairman & Managing Director Whole-time Director (Administration)


(Rs. In Lakhs)

SCH. 2008 2007

SOURCES OF FUNDS

SHAREHOLDERS FUNDS

Share Capital 1 1686.53 1686.53Share Application Money - 1.02Reserves and Surplus 2 43615.93 40158.65

45302.46 41846.20

LOAN FUNDSSecured Loans 3 15449.58 8419.69Unsecured Loans 4 4185.80 9017.04

19635.38 17436.73

DEFERRED TAX LIABILITIESNet Deferred Tax Liabilities 1466.10 1875.82Share of Joint Venture 81.56 (26.87)

1547.66 1848.95

66485.50 61131.88

APPLICATION OF FUNDSFixed Assets 5Gross Block 35991.68 31189.07Less:Depreciation 10062.50 8394.21Net Block 25929.18 22794.86

Capital Work-in-progress 228.62 2226.85

INVESTMENTS 6 751.81 748.62CURRENT ASSETS, LOANS & ADVANCESInventories 7 7469.15 8357.24Sundry Debtors 8 32242.21 31331.15Cash and Bank Balances 9 1496.09 2038.57Loans and Advances 10 6013.16 3708.70

47220.61 45435.66Less: CURRENT LIABILITIES AND PROVISIONSLiabilities 11 6140.39 8425.42Provisions 12 1504.82 1649.31

7645.21 10074.73NET CURRENT ASSETS 39575.40 35360.93

MISCELLANEOUS EXPENDITURE( to the extent not written off or adjusted)Preliminary expenses 0.49 0.62

66485.50 61131.88



CONSOLIDATED PROFIT & L0SS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2008

(Rs. In Lakhs)

SCH. 2008 2007

INCOME

Sales 13 56240.44 52557.11Other Income 14 1501.38 1088.68

Total Income 57741.82 53645.79

EXPENDITUREMaterial Cost 15 14499.16 15218.88Purchase of Goods/Materials for Resale 16 5124.38 3414.95Staff Cost 17 9346.77 7732.63Other Expenses 18 21873.50 19103.64Preliminary expenses 0.12 0.12Depreciation 1690.02 1133.64(Increase)/Decrease in Stock 19 839.09 (73.45)

Total Expenditure 53373.04 46530.41

PROFIT BEFORE TAXATION 4368.78 7115.38Less: Provision for TaxationCurrent Tax 670.11 435.65Earlier year’s Income Tax 2.59 -Fringe Benefit Tax 106.40 120.00Deferred Tax (164.36) 335.01Wealth Tax 9.00 7.00Mat credit (Including previous year Rs. 243 Lakhs) (787.00) (163.26) - 897.66

PROFIT AFTER TAXATION 4532.044532.044532.044532.044532.04 6217.72 6217.72 6217.72 6217.72 6217.72Add:Surplus Brought Forward 2000.00 2000.00

Available for Appropriation 6532.04 8217.72

APPROPRIATIONSInterim Dividend - 927.29Tax on Interim Dividend - 130.05Proposed Final Dividend 421.63 1264.90Tax on Proposed Final Dividend 71.66 214.97General Reserve 4675.84 3680.51

5169.13 6217.72BALANCE CARRIED TO BALANCE SHEET 1362.91 2000.00

6532.04 8217.72

Earning per share (Rs.)Basic EPS 5.37 7.39Diluted EPS 5.37 7.38






CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2008

(Rs. In Lakhs)

2008 2007

A. Cash Flow from Operating ActivitiesNet Profit before Tax and Extraordinary items 4368.78 7115.38

Adjustment For

Depreciation 1690.02 1133.64Foreign Exchange (Net) (718.90) 77.15Interest Paid 1803.21 1124.88(Profit)/ Loss on Sale/Discard of Assets 12.74 (0.65)Bad Debt 842.04 -Interest Received (34.81) (229.38)Dividend Received (0.52) (0.49)DEPB Certificate Received (78.13) (97.76)Deferred Employee Compensation cost 6.46 38.80Preliminary Expenses written off 0.12 0.12

3522.23 2046.31

Operating Profit Before Working Capital Changes 7891.01 9161.69Adjustment ForTrade And Other Receivables (3008.51) (7279.38)Inventories 888.09 (1926.63)Trade Payable (2152.90) 3584.79

(4273.32) (5621.22)

Cash Generated From Operations 3617.69 3540.47

Direct Taxes Paid (Including Fringe Benefit Tax) (Net) (786.59) (502.32)Net Cash from Operating Activities 2831.10 3038.15

B. Cash Flow from Investing ActivitiesPurchase of Fixed Assets (2845.86) (11483.03)Sale /Discard of Fixed Assets 7.02 58.66Purchase of Investment (3.19) (458.39)Interest Received 35.32 222.71Dividend Received 0.52 0.49

Net Cash used in Investing Activities (2806.18) (11659.56)

C. Cash Flow from Financing ActivitiesProceeds form issue of shares including premium - 5167.55Proceeds from Short term Borrowings(net) (1449.84) 7891.11Proceeds from Long term Borrowings(net) 4049.58 -Refund of Share application money (1.02) -Interest Paid (1686.39) (1063.02)Dividend Paid (Including Dividend Tax) (1479.73) (2495.69)Net Cash Used in Financing Activities (567.40) 9499.95

Net Increase in Cash and Cash Equivalents (542.48) 878.54Cash And Cash Equivalents as at 01.04.07 2038.57 1160.03Cash And Cash Equivalents as at 31.03.08 1496.09 (542.48) 2038.57 878.54





SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2008

(Rs. In Lakhs)

2008 2007

1 SHARE CAPITAL

Authorised10,00,00,000 (Previous year 10,00,00,000) Equity 2000.00 2000.00Shares of Rs.2/- each.Issued, Subscribed And Paid-upIssued, Subscribed And Paid-upIssued, Subscribed And Paid-upIssued, Subscribed And Paid-upIssued, Subscribed And Paid-up 1686.53 1686.538,43,26,350 (Previous Year 8,43,26,350) Equity Shares ofRs. 2/- each fully paid

of the above

A) 1,55,34,000 Equity Shares of Rs.2/- each have beenissued for consideration other than cash.

B) 4,64,02,500 Equity Shares of Rs.2 each are allotted asfully paid up bonus shares by capitalization of SecuritiesPremium, General Reserve and Export Profit Reserve

C) 1,31,350 Equity Shares of Rs. 2/- each have beenissued pursuant to stock options granted to employees.

1,686.53 1686.53

2 RESERVES AND SURPLUSCapital Reserve (Reserves transferred from amalgamatingcompany)Investment Allowance Reserve (utilised) 34.86 34.86Capital Reserve 63.53 63.53Cash Subsidy 1.98 1.98

100.37 100.37Capital Reserve 4.21 4.21Cash Subsidy 85.66 85.66Contingency Reserve 520.00 520.00

Securities PremiumAs per last Balance sheet 5252.82 164.69Add: Credited during the year - 4405.71Add : Share of Joint Venture - 716.13Less: Expenses related to Private placement w/off. - 5252.82 33.71 5252.82

Revaluation Reserve (Net of Deferred Tax) 119.20 -

General ReserveAs per last Balance Sheet 32235.90 28555.39Add: Transfer from Profit & Loss A/c 4675.84 3680.51Less : Charge on account of transitional provisionson Employee Benefits under AS 15 476.51 36435.23 - 32235.90

Profit and Loss Account 1362.91 2000.00

Foreign Currency Translation Reserve (308.95) (78.33)

Employee Stock OptionEmployee Stock Options Outstanding 50.06 54.20Less : Deferred employee compensation 5.58 44.48 16.18 38.02

43615.93 40158.65

Notes :1) Securites premium includes share of joint venture amounting to Rs.716.13 (Previous Year Rs 716.13).2) Profit and Loss Account balance includes share of joint venture (accumulated loss) amounting to Rs.95.98 (Previous Year Nil ).3) Revaluation reserve includes share of joint venture amounting to Rs. 119.20 (Previous Year Nil ).


(Rs. In Lakhs)

2008 2007

3 SECURED LOANSFrom BanksWorking Capital Borrowings 11438.58 8419.69

Long Term Foreign Currency LoanExternal Commercial Borrowing 4011.00 -

Notes :1) Working capital borrowings from the banks are secured

by first charge on pari passu basis by way of hypothecationof company's current assets both present and future and byway of joint equitable mortgage of company's block of assetssituated at Thane and Belapur in the state of Maharashtra,Ankleshwar & Panoli in the state of Gujarat and Daman in theUnion Territory of Daman.

2) The External Commercial Borrowing is secured by exclusivecharge by way of hypothecation of company's movable fixedassets (including movable plant and machinery both present andfuture) at new plant at Plot No. 4, GIDC Phase IV, Panoli, Gujarat

15449.58 8419.69

4 UNSECURED LOANSWorking Capital Loans from Banks - 4852.03Directors 85.50 1.50Fixed Deposit from Public & Shareholders 1096.93 1403.44(Due Within One Year Rs.461.86, Previous Year Rs.412.23)Deposit from Distributors / Customers 266.04 250.82Sales Tax Deferral 97.45 97.45(Due Within One Year Rs.16.24, Previous Year Rs. Nil )Inter Corporate Deposit 2556.50 2366.50Share of Joint Venture 83.38 45.30

4185.80 9017.04

5 FIXED ASSETS

Note:

1) Value of buildings includes a sum of Rs.3250/- being the cost of shares in the societies2) No depreciation has been claimed on assets to the extent of CENVAT claimed.3) *Includes the effect of translation of assets held by foreign subsidiaries which are considered as non-integral in terms of AS 11 (revised 2003).4) In case of Share of Joint Venture, addition during the year includes revaluation of Intangible assets.5) In case of Share of Joint Venture, Depreciation for the year is net of write back due to change in accounting policy of Joint venture entity.

Gross Block *Addition/ *Deduction/ Gross Block Depreciation Depreciation Deduction Depreciation Net Block Net BlockDescription as on adjustment adjustment as on as on for the during the upto as on as onof Assets 01.04.2007 during the during the 31.03.2008 01.04.2007 year year 31.03.2008 31.03.2008 31.03.2007

year yearTangible :

Land (Freehold) 59.34 - - 59.34 - - - - 59.34 59.34Land (Leasehold) 409.58 - - 409.58 49.54 3.84 - 53.38 356.20 360.04Factory Buildings 7700.84 1404.47 - 9105.31 1188.78 263.39 - 1452.17 7653.15 6512.06Buildings (Note 1) 584.68 37.15 - 621.83 118.58 10.15 - 128.73 493.10 466.10Plant & Machinery 16262.40 2526.41 0.23 18788.58 5900.39 1152.17 0.23 7052.33 11736.25 10362.01Office Equipments 255.23 24.83 2.00 278.07 79.32 13.44 0.65 92.12 185.95 175.91Furniture & Fixtures 827.49 141.94 - 969.43 352.41 54.10 - 406.51 562.92 475.08Airconditioners 1255.72 319.10 0.30 1574.52 336.23 95.97 0.10 432.10 1142.42 919.49Vehicles 995.14 351.70 38.99 1307.85 317.29 108.10 20.76 404.62 903.23 677.85

Intangible :Acquired Software - 37.15 - 37.15 - 1.03 - 1.03 36.12 -Goodwill 1,690.23 - - 1690.23 - - - - 1690.23 1690.23

Share of Joint Venture 1148.43 233.46 232.09 1149.79 51.68 (12.16) - 39.52 1110.27 1096.75

31189.07 5076.21 273.60 35991.68 8394.21 1690.02 21.73 10062.50 25929.18 22794.86

(20,679.77) (10,587.85) (78.55) (31,189.07) (7,229.43) (1,133.64) (20.54) (8,394.21) (22,794.86) (13,450.34)



(Rs. In Lakhs)

2008 2007

6 INVESTMENTSLong Term (At Cost)Government Securities :National Saving Certificates 0.44 0.44(Pledged with Government Authorities)

Trade InvestmentsQuoted Fully Paid Up

1,20,000 (Previous year 1,20,000) Equity of SpectrumPharmaceuticals Inc. of US $ 0.001 each(Market Value Rs. 121.80, Previous year 326.92) 449.30 449.30

Unquoted - Fully Paid Up5,866 (Previous Year 5,866) Equity Shares of Rs.10/- each ofBharuch Enviro Infrastructure Ltd. 0.59 0.59

5,69,532 (Previous Year 5,69,532) Equity Shares ofRs.10/- each of Bharuch Eco-aqua Infrastructure Ltd. 56.95 56.95

Non - Trade InvestmentQuoted Fully Paid Up

126 (Previous Year 126) Units of Rs.10/- each ofUnit Trust of India 0.01 0.01

Unquoted Fully Paid Up

20,000 (Previous Year 20,000) Equity Shares ofEnviro Technology Ltd. of Rs.10/- each 2.00 2.00

2,000 (Previous Year 2,000 ) Bonds of RuralElectrification Corporation of Rs.10/- each 0.20 0.20

60,000 (Previous Year 60,000) Equity Shares ofPanoli Enviro Tenchology Ltd. of Rs.10/-each 6.00 6.00

20,00,000 (Previous Year 20,00,000) Equity Shares ofRs.10/- each of Asian Heart Institute & Research Centre Pvt. Ltd. 200.00 200.00

2,40,000 (Previous Year 2,40,000) Equity Shares ofRs.10/- each of Raptim Research Ltd 24.00 24.00

Share Application MoneyBharuch Eco-aqua Infrastructure Ltd. 3.19 -

Membership Interest in Neo JB LLC 9.13 9.13

751.81 748.62



(Rs. In Lakhs)

2008 2007

7 INVENTORIES(As taken valued and certified by the Managing Director)Raw Material 1445.90 1224.18

Packing Material 1229.34 1339.47

Work in process 414.83 613.45

Finished Goods (Stock in Transit Rs.92.11, Previous year Rs. 154.91) 4064.00 4827.32

Fuel 25.57 16.89

Share of Joint Venture 289.50 335.93

7469.15 8357.24

8 SUNDRY DEBTORS(Unsecured Considered Good)Outstanding for over six months 13113.29 12221.69Others 18897.00 18863.71Share of Joint Venture 231.92 245.75

32242.21 31331.15

9 CASH AND BANK BALANCESCash on Hand 92.14 12.82Remittances in Transit 368.48 397.22Cheques on Hand 84.00 -

Balance with Scheduled Banks :On Current Account 772.06 956.66(Including Unclaimed Dividend Rs. 45.77, Previous year Rs. 45.63 )Fixed Deposit Account 103.50 460.01

Balance with Non-Scheduled Banks :A. Vneshtorg Bank, Moscow

Current Account (Maximum balanceoutstanding during the year Rs.129.88 ) 0.01 140.42

B. Ukraine International Bank,UkraineCurrent Account (Maximum balanceoutstanding during the year Rs 43.39) 30.52 3.46

C. Uzbekistan International BankCurrent Account (Maximum balanceoutstanding during the year Rs 1.36) 1.40 0.99

D. Post Office Saving Account 0.62 0.62E. Balance with Barclays Pvt. Client International Ltd. 0.18 4.23F. Balance with ICICI Bank Eurasia LLC 43.09 26.40

Share of Joint Venture (0.09) 35.74

1496.09 2038.57



(Rs. In Lakhs)

2008 2007

10 LOANS AND ADVANCESAdvances RecoverableIn Cash or in Kind of for Value to be received(Unsecured considered Good, unless otherwise stated)Sundry Deposits (Including with Directors and theirrelatives Rs.45.05, Previous Year Rs.45.05) 1203.53 369.91Income Tax (Net of Provision) 648.87 541.94Others 3319.95 2715.05Balance with Excise Authorities 5.24 20.80Mat Credit Entitlements 787.00 -Loan given to Joint Venture 40.33 49.11Share of Joint Venture 8.23 11.89

6013.16 3708.70

11 CURRENT LIABILITIESSundry CreditorsDue to S.S.I. Units 309.08 516.16Others 4063.70 4372.78 5755.11 6271.27Advance from customers 41.98 77.21Other Liabilities 1145.93 1418.57Interest Accrued but not due 210.43 93.61Unclaimed Dividend # 45.77 45.63Unpaid Matured Deposits # 5.43 2.91Share of Joint Venture 317.96 516.12

6140.29 8425.32Outstanding Purchase ConsiderationUndischarged Liabilities of Vendors 0.10 0.10

# There is no amount due & outstanding to be creditedto Investor Education & Protection Fund

6140.39 8425.42

12 PROVISIONS

For Employee Benefits 1011.53 169.44For Proposed Final Dividend 421.63 1264.90For Tax on Proposed Final Dividend 71.66 214.97

1504.82 1649.31



(Rs. In Lakhs)

2008 2007

13 SALESSales 57094.84 53446.44Less : Excise Duty 1690.04 1758.15

55404.80 51688.29Add / (Less) : Exchange Difference (Net) (472.09) 868.82Share of Joint Venture 1307.73 -

56240.44 52557.11

14 OTHER INCOMEInterestBank Deposit 11.21 184.33(Tax Deducted at Source Rs. 3.42, Previous Year Rs. 40.96)Others 23.60 45.05(Tax Deducted At Source Rs. 2.62, Previous Year Rs. 0.58)

34.81 229.38

Exchange Difference Others (Net) 613.40 18.90Sale of Steam 16.06 16.44Insurance Claim 77.87 74.38Profit on Sale of Assets 0.22 17.11Export Incentives 403.25 400.13Manufacturing Charges 24.13 46.68(Tax Deducted at Source Rs. 0.55, Previous Year Rs.1.54)Dividend On Trade Investment 0.52 0.49Bill Discounting Income 17.92 -Sale of Scrap 240.37 212.36Miscellaneous Income 87.34 72.81Share of Joint Venture (14.51) -

1501.38 1088.68

15 MATERIAL COSTRaw and Packing MaterialsOpening Stock 2455.29 2020.65Purchases 14719.11 15653.52

17174.40 17674.17Less : Closing Stock 2675.24 2455.29

14499.16 15218.88

16 PURCHASE OF GOODS/MATERIALS FOR RESALEOpening Stock 1660.89 583.93Purchases 4034.03 4491.91

5694.92 5075.84Less:Closing Stock (including material for resaleRs.Nil, Previous year Rs. 108.36) 1429.68 1660.89

4265.24 3414.95Share of Joint Venture 859.14 -

5124.38 3414.95

SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT & LOSS ACCOUNTFor the Year Ended 31ST March, 2008


(Rs. In Lakhs)

2008 2007

17 STAFF COST

Salaries and Other Benefits 7802.92 6616.52Contribution to Provident Fund and Other Funds 892.46 886.52Gratuity 184.83 98.85Staff Welfare 170.62 130.74Share of Joint Venture 295.95 -

9346.77 7732.63

18 OTHER EXPENSESManufacturing Charges 448.84 411.23Stores & Spares 292.34 244.19Power & Fuel 1658.84 1352.40Excise Duty 247.10 759.35Compensation Rent 619.95 451.36Rates and Taxes 31.60 37.66Insurance 157.03 176.97Freight & Transport Charges 2962.13 2650.57Repairs to :- Building 24.35 36.23 Machinery 204.27 232.24 Others 273.16 501.78 259.94 528.41Loss on sale/discard of assets 12.96 16.46Sales promotion and publicity 6508.54 5910.56Selling Commission 758.57 449.59Travelling & Conveyance 1876.38 1751.66Directors' Fees 6.96 4.58Interest And Financing ChargesWorking Capital Borrowings 1146.00 753.85Others 657.21 1803.21 371.03 1124.88

Royalty 154.63 143.74Remuneration to AuditorsAudit Fees 31.21 19.29Taxation Matters 3.34 3.09Other Services 5.00 39.55 26.28 48.66Donations 0.49 21.86Exchange Difference Others (Net) 5.93 115.73Formation expenses - 72.61Bad debts 842.04 -Miscellaneous 2686.07 2831.17Share of Joint Venture 258.56 -

21873.50 19103.64

19 (INCREASE) / DECREASE IN STOCKClosing StockWork-in-process 414.83 613.45Finished Goods 2634.32 3049.15 3274.79 3888.24

Less:Opening StockWork-in-process 613.45 874.57Finished Goods 3274.79 3888.24 2940.22 3814.79

839.09 (73.45)

SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT & LOSS ACCOUNTFor the Year Ended 31ST March, 2008


SCHEDULES TO THE CONSOLIDATED ACCOUNTS AS AT 31ST MARCH, 2008 (CONTD.)

20.20.20.20.20. NOTES ON ACCOUNTNOTES ON ACCOUNTNOTES ON ACCOUNTNOTES ON ACCOUNTNOTES ON ACCOUNT

1.1.1.1.1. Principles of consolidation :Principles of consolidation :Principles of consolidation :Principles of consolidation :Principles of consolidation :

a .a .a .a .a . The consolidated financial statements have beenprepared in accordance with Accounting Standard 21“Consolidated Financial Statements” issued by Instituteof Chartered Accountants of India. These relate to J. B.Chemicals and Pharmaceuticals Ltd. (“the Company”),its subsidiaries and its interest in joint ventures (“theGroup”). The consolidated financial statements havebeen prepared on the following basis:

i. The financial statements of the Company and itssubsidiary companies are combined on a line-by-line basis by adding together the book value of likeitems of assets, liabilities, income and expenses,after fully eliminating intra-group balances and intra-group transactions resulting in unrealized profits orlosses in year-end inventories.

ii. The difference between the Company’s cost ofinvestments in the Subsidiaries, over its portion ofequity at the time of acquisition of shares isrecognised in the consolidated financial statementsas Goodwill or Capital Reserve as the case may be.

iii. In case of foreign subsidiaries, being non-integralforeign operations, revenue items are converted atthe average rates prevailing during the year. Allassets and liabilities are converted at rates prevailingat the end of the year. Any exchange difference arisingon consolidation is recognised in the “ForeignCurrency Translation Reserve”.

iv. Interest in jointly controlled entities is accounted forusing proportionate consolidation in accordancewith Accounting Standard 27 on “Financial reportingof interests in Joint Ventures”. The Company’s sharein each of the assets, liabilities, income and expensesof jointly controlled entities are reported as a separateitem. The difference between costs of the Company’sinterest in jointly controlled entities over its share ofnet assets in the jointly controlled entities, at thedate on which interest is acquired, is recognised inthe consolidated financial statements as Goodwillor Capital Reserve as the case may be.

v. The consolidated financial statements are preparedby adopting uniform accounting policies for liketransactions and other events in similarcircumstances and are presented, to the extentpossible, in the same manner as the Company’sseparate financial statements except otherwisestated elsewhere in this schedule.

b.b.b.b.b. Accounting Policies and Notes on Accounts of theFinancial Statements of the Company and all thesubsidiaries are set out in their respective FinancialStatements.

c .c .c .c .c . No adjustments have been made to the financialstatements of the Subsidiaries on account of diverseaccounting policies as the same, being incorporated inRussia and Jersey, Channel Island, have been preparedunder the laws and regulations applicable to their countryof incorporation and hence not practicable to do so.

d.d.d.d.d. Notes of these Consolidated Financial Statements areintended to serve as a means of informative disclosureand a guide to better understanding of the consolidatedposition of the companies. Recognising this purpose,the company has disclosed only such Notes from theindividual financial statements, which fairly present theneeded disclosures. Practical considerations made itdesirable to exclude Notes to Financial Statements, whichin the opinion of the management, could be better viewed,when referred from the individual financial statements ofthe Company.

2. The subsidiary companies considered in the consolidatedfinancial statements are :

Name of theName of theName of theName of theName of the Country ofCountry ofCountry ofCountry ofCountry of Proportion ofProportion ofProportion ofProportion ofProportion of AccountingAccountingAccountingAccountingAccountingSubsidiariesSubsidiariesSubsidiariesSubsidiariesSubsidiaries Incorporation Incorporation Incorporation Incorporation Incorporation ownershipownershipownershipownershipownership year year year year year

interestinterestinterestinterestinterest ending on ending on ending on ending on ending on

J. B. Life ScienceOverseas Ltd. India 100 % 31.03.2008

J. B. Healthcare Jersey,Pvt. Ltd. Channel Island 100 % 31.03.2008

OOO UniquePharmaceuticalsLaboratories Russia 100% 31.12.2007*

* Un-audited accounts of 31st March, 2008 is taken intoconsideration for consolidated financial statements.

3. The significant Joint Venture company considered in theconsolidated financial statements is :

Name of theName of theName of theName of theName of the Country ofCountry ofCountry ofCountry ofCountry of Proportion ofProportion ofProportion ofProportion ofProportion of AccountingAccountingAccountingAccountingAccountingJoint VJoint VJoint VJoint VJoint Venturenturenturenturentureeeee Incorporation Incorporation Incorporation Incorporation Incorporation ownershipownershipownershipownershipownership year year year year year

interestinterestinterestinterestinterest ending on ending on ending on ending on ending on

Biotech Laboratories(Pty) Ltd. * South Africa 49 % 31.08.2007**

* Through J. B. Healthcare Pvt.Ltd, Jersey, Channel Island.

** Un-audited accounts of 31st March, 2008 is taken intoconsideration for consolidated financial statements.

4. The Company has received an approval vide letterno. 47/122/2008/CL/III dated 10th March, 2008 from Govt.of India, Ministry of Company Affairs u/s 212(8) of theCompanies Act, 1956 for not attaching the accounts of theSubsidiary Companies as required u/s 212(1) of the Act.However, information as directed by the Govt. of India,


Ministry of Company Affairs in terms of its approval isattached.

5. The contingent liabilities not provided for:

5.1. Letter of Credit opened by Banks Rs.362.75 Lakhs(Previous Year Rs. 473.74 Lakhs)

5.2. Guarantee issued by the Bank on behalf of the CompanyRs.942.37 Lakhs (Previous Year Rs. 744.99 Lakhs)

5.3. Central Excise Demand (Including show cause noticesof Rs. 33.42 Lakhs) of Rs.49.56 Lakhs (Previous YearRs 35.25 Lakhs).

5.4. Income Tax Demand of Rs.990.21 Lakhs (against whichthe Company has made pre-deposits of Rs.990.21Lakhs) being disputed in Appeal.

5.5. Sales Tax Demand of Rs 6.99Lakhs (Previous Year Rs.6.99Lakhs) being disputed in appeal (against which the Companyhas made pre-deposit of Rs.1.51 Lakhs and has alsofurnished Bank Guarantees worth Rs.5.23 Lakhs).

6. Estimated amount of Contracts remaining to be executed onCapital Account and not provided for (net of advances)Rs.141.26 Lakhs (Previous Year Rs. 351.38 Lakhs)

7. The company has a long term strategic investment inSpectrum Pharmaceuticals INC of Rs. 449.30 Lakhs. In viewof the long term prospect, in the opinion of the management,no provision for diminution is required.

8. SEGMENT REPORTING:

The Group has one segment of activity namely‘Pharmaceuticals’.

9. The break-up of Deferred Tax Assets and Liabilities into majorcomponents at the year end is as follows:

( Rs. in Lakhs )

ParticularsParticularsParticularsParticularsParticulars 31.03.0831.03.0831.03.0831.03.0831.03.08 31.03.0731.03.0731.03.0731.03.0731.03.07

DeferrDeferrDeferrDeferrDeferred Ted Ted Ted Ted Tax Assetsax Assetsax Assetsax Assetsax Assets

Others 15.87 0.91

Retirement Benefits 343.82 57.04

Share of Joint Venture - 26.87

359.69359.69359.69359.69359.69 84.82 84.82 84.82 84.82 84.82

DeferrDeferrDeferrDeferrDeferred Ted Ted Ted Ted Tax Liabilityax Liabilityax Liabilityax Liabilityax Liability

Depreciation 1443.63 1641.62

Timing Difference of Tax Holiday Units(Sec.10B) 382.16 292.15

Share of Joint Venture 81.56 -

1907.351907.351907.351907.351907.35 1933.771933.771933.771933.771933.77

Net DeferrNet DeferrNet DeferrNet DeferrNet Deferred Ted Ted Ted Ted Tax Liabilitiesax Liabilitiesax Liabilitiesax Liabilitiesax Liabilities 1547.661547.661547.661547.661547.66 1848.951848.951848.951848.951848.95

10. EARNINGS PER SHARE:

Earnings Per Share (EPS) is Calculated in accordancewith Accounting Standard – 20 (AS-20) as under:

( Rs. in Lakhs )

ParticularsParticularsParticularsParticularsParticulars 31.03.2008 31.03.2008 31.03.2008 31.03.2008 31.03.2008 31.03.200731.03.200731.03.200731.03.200731.03.2007

Net Profit attributable to EquityShareholders (Rs.in Lakhs) 4,532.04 4,532.04 4,532.04 4,532.04 4,532.04 6,217.726,217.726,217.726,217.726,217.72

Weighted Average No.Weighted Average No.Weighted Average No.Weighted Average No.Weighted Average No.of Equity shares (Nos)of Equity shares (Nos)of Equity shares (Nos)of Equity shares (Nos)of Equity shares (Nos)

· Basic 8,43,26,350 8,41,74,997

· Effect of Dilutive equityshares equivalentStock Options outstanding 3,964 35,564

Diluted 8,43,30,314 8,42,10,561

Nominal value of equityNominal value of equityNominal value of equityNominal value of equityNominal value of equityshares (Rs.)shares (Rs.)shares (Rs.)shares (Rs.)shares (Rs.) 2.002.002.002.002.00 2.002.002.002.002.00

Earnings per share (Rs.)

Basic 5.37 7.39

Diluted 5.37 7.38

11. RELATED PARTY DISCLOSURE

Related party disclosure as required by AS – 18, ‘RelatedParty Disclosures’ issued by the Institute of CharteredAccountants of India are given below:

Names and Relationships of the Related Parties:

i) Associate Concerns / Trusts / Companies/Joint Venturea.

a. Mody Trading Company

b. Mody Brothers

c. Jyotindra Family Trust

d. Dinesh Family Trust

e. Shirish Family Trust

f. Biotech Laboratories (Pty) Ltd.

g. J.B.SEZ Private Limited



ii) Key Management Personnel:

a. Shri Jyotindra B. Mody

b. Shri Dinesh B. Mody

c. Shri Shirish B. Mody

iii) Relative of Key Management Personnel:

a. Mr. Pranabh D. Mody

b. Mrs. Ansuya J. Mody

c. Mrs. Kumud D. Mody

d. Mrs. Bharati S. Mody

e. Mrs. Pallavi B. Mehta

f. Mrs. Purvi U.Asher

g. Mrs. Priti R. Shah

h. Mrs. Deepali A. Jasani

i. Mr. Nirav S. Mody

j. Mrs. K. V. Gosalia

k. Mrs. N. R. Mehta

l. D. B. Mody - HUF

m. S. B. Mody – HUF

Transactions with the related parties during the year:

(Rs. in Lakhs )

TTTTTransaction withransaction withransaction withransaction withransaction with AssociatedAssociatedAssociatedAssociatedAssociated KeyKeyKeyKeyKey RelativeRelativeRelativeRelativeRelativeRelated PartiesRelated PartiesRelated PartiesRelated PartiesRelated Parties Concerns/Concerns/Concerns/Concerns/Concerns/ ManagementManagementManagementManagementManagement of Keyof Keyof Keyof Keyof Key

TTTTTrust/Jointrust/Jointrust/Jointrust/Jointrust/Joint PersonnelPersonnelPersonnelPersonnelPersonnel ManagementManagementManagementManagementManagementVVVVVenturenturenturenturentureeeee PersonnelPersonnelPersonnelPersonnelPersonnel

Income

Sale of Material / 660.69 Nil NilGoods/ Others (8.69) (Nil) (Nil)

Miscellaneous 8.24 Nil NilIncome (Nil) (Nil) (Nil)

Expenditure

Patent Fees 0.08 Nil Nil(Nil) (Nil) (Nil)

Analytical Charges 0.61 Nil Nil(Nil) (Nil) (Nil)

Selling Commission 19.32 Nil Nil(18.63) (Nil) (Nil)

Rent 181.43 17.64 47.44(138.47) (21.24) (47.44)

Remuneration Nil 498.45 126.21(Nil) (648.31) (97.59)

Interest on Deposits Nil Nil 67.79(Nil) (5.37) (82.15)

O/S payables as on 1.15 210.24 1014.7831st March, 2008 (Nil) (241.62) (852.72)

O/S receivables as 303.43 19.77 25.28on 31st March, 2008 (75.42) (19.77) (25.28)

12. Previous year’s figures are regrouped, rearranged, recastwherever considered necessary.






STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956RELATING TO HOLDING COMPANY'S INTEREST IN THE SUBSIDIARY COMPANIES

(Rs. In Lakhs)

OOO UniqueJ. B. Life Science Pharmaceutical J. B. Healthcare

Overseas Ltd. Laboratories (*) Pvt. Ltd.

1 The Financial Year of the Subsidiary 31st March, 2008 31st December, 2007 31st March, 2008Companies ended on

2 Date from which it became a subsidiary 22nd April, 2002 19th April, 2006 6th March, 2007

3 (A) Number of shares held by J. B. Chemicals & 1,20,000 Equity 51,00,000 OrdinaryPharmaceuticals Ltd. (Holding Company) in Shares of Rs. 10/- ------- Shares of USD 1 eachthe Subsidiary Companies at the end of the each fully paid-upFinancial Year of the Subsidiary Companies

3 (B) Extent of interest of Holding Company at theend of the Financial Year of the SubsidiaryCompanies 100.00% 100.00% 100.00%

4 The net aggregate amount of the SubsidiaryCompanies Profit / (Loss) so far as it concernsMembers of the Holding company and

a) Is not dealt with in the Company's Accounts

i. For the Financial Year ended 31st March, 2008 (0.21 ) 364.94 (24.08)

ii. For the previous Financial Year since it (1.02) 66.54 (71.01)became subsidiary

b) No part of the Profit / (Loss) has been dealt ------- ------- -------with in Company's accounts for the financialyear or for the previous financial year sinceit became subsidiary.

Issued & Subscribed Share Capital 12.00 1322.38 2046.12

Reserves (1.24) 325.02 (93.82)

Total Assets 10.35 5372.79 2046.30

Total Liabilities 10.35 5372.79 2046.30

Investments 9.13 0.00 2046.12

Turnover 0.00 4378.00 0.29

Profit/(Loss) before Taxation (0.21) 446.13 (24.08)

Provision for Taxation 0.00 81.19 0.00

Profit/(Loss) after Taxation (0.21) 364.94 (24.08)

Proposed Dividend 0.00 0.00 0.00

Exchange Rate N.A. 1.62 (Avg Ruble) 40.66 (Avg. USD)

(*) The financial year of the company ends on 31st December. However, the results given are as of March 31, 2008.


Beejal Desai J.B. ModyVice President & Company Secretary Chairman & Managing Director

D. B. ModyWhole-time Director (Administration)

S.B. ModyMumbai : 8th May, 2008 Whole-time Director (Marketing)


TEN YEAR FINANCIAL SUMMARY

(Rs. in Lakhs)

Sr. No Particulars 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08

1 Sales [ Incl. Excise ] 15283.05 17463.17 23753.20 27601.76 29177.37 31455.39 37163.83 48164.96 54904.07 56499.47

2 Other Income 629.90 644.12 854.08 1142.76 974.27 1201.08 1302.66 1155.18 1069.78 1380.19

3 Manufacturing and 14021.03 15464.59 20156.19 22803.27 23180.84 25192.27 30714.17 39915.26 46863.17 51267.24

Other Expenses

4 Depreciation 437.84 439.28 501.83 590.67 733.21 944.92 1048.92 1073.07 1133.39 1701.66

5 Profit before tax 1454.08 2203.42 3949.26 5350.58 6237.59 6519.28 6703.40 8331.81 7977.29 4910.76

6 Tax 1.50 18.00 827.00 1145.39 1386.62 1415.24 788.60 1239.03 875.01 (258.37)

7 Profit after tax 1453.16 2202.19 3123.03 4205.19 4853.54 5104.04 5914.80 7092.78 7102.28 5169.13

8 Dividend 423.37 726.30 802.95 1204.43 1284.72 1766.50 1927.08 2147.61 2192.19 421.63

9 Retained Earnings 735.03 1146.00 2238.18 2959.81 3404.22 3111.21 3222.45 4143.97 4314.96 4675.85

10 Gross Fixed Assets 8222.97 8353.00 9149.50 11887.08 13757.15 18484.82 19716.46 20679.77 28348.60 33146.53

11 Net Fixed Assets 5674.45 5378.72 5897.44 8229.29 9567.20 12812.41 13440.08 13450.34 20006.32 23124.33

12 Current Assets 10455.71 11503.85 14311.19 16462.27 19581.11 22650.11 27474.45 35663.24 44989.23 46630.95

13 Share Capital ++1452.60 1452.60 # 1605.90 1605.90 1605.90 1605.90 1605.90 ##1607.36###1686.53 1686.53

14 Reserves and Surplus 10145.38 11567.68 14385.07 16774.80 20179.02 23290.23 27012.68 31701.29 40426.27 44632.06

15 Borrowings 2985.49 1997.95 1205.47 1757.76 1634.88 4285.57 6504.39 9562.57 17391.43 19552.00

16 Earning

Per Share (Rs.) 10.00 15.00 19.45 26.19 30.22 31.78 36.83 ^^ 8.83 ^^ 8.44 ^^ 6.13

17 Book Value 79.84 89.63 100.00 114.46 135.66 155.03 178.21 ^^ 41.00 ^^ 49.94 ^^ 54.93Per Share (Rs.)

18 Debt Equity Ratio 0.26:1 0.15:1 0.08:1 0.09:1 0.07:1 0.17:1 0.23:1 0.29:1 0.41:1 0.42:1

19 Current Ratio 4.37:1 3.53:1 3.70:1 3.18:1 3.78:1 4.17:1 5.82 :1 5.66 :1 4.88 :1 6.70:1

20 Dividend %

Interim 25 *50 - 25 - 45 50 55 55 -

Final 25 - 50 **50 80 ***65 70 75 75 25

++ After 1:1 Bonus Issue

# After Issue of 15,33,000 Equity Shares of Rs.10/- each, fully Paid up consequent to approval of Scheme of Arrangement byHon'ble High Court, Bombay.

## After allotment of 73,175 equity shares of Rs.2/-each,fully paid up on exercise of employee stock options.

### After allotment of 39,00,000 & 58,175 equity shares of Rs.2/-each,fully paid up on private placement basis & on exercise ofemployee stock options respectively.

* Two interim Dividend of 25%each

** Includes 15% jubilee Dividend

*** Includes 10% special Dividend

^^ On face Value of Rs.2/-

Note : Figures of Previous year have been re-grouped, re-arranged and re-cast, wherever considered necessary.

New LVP / SVP facility as per US FDA and EU guidelines at Panoli.

Documents

JB Chemicals 14June08:Layout 1 - JBCPL. B. Chemicals & Pharmaceuticals Ltd. 1 J. B. Chemicals & Pharmaceuticals Limited (JBCPL), one of India’s leading pharmaceutical companies,