1

CHAPTER – I PROFILE OF INDUSTRIES

1.1 HISTORICAL BACKGROUND OF PHARMACEUTICAL INDUSTRY

On 1st May 1960 Gujarat State got separated from greater Bombay State. Prior to

that, about hundred years, Gujarat based Companies like Alembic Chemical Works

Ltd. and Sarabhai Chemicals were producing Galenicals, Syrups, Elixirs, Powders,

and Extracts etc.

At the time of independence, India was not self-sufficient for medicines. Many of the

formulations and bulk drugs were imported. Exports of medicine were almost

negligible. Total production of Pharmaceutical products in 1947, the year of

independence - was in the tune of Rs.100 million only. 1

According to data published by the Department of Pharmaceuticals, Ministry of

Chemicals and Fertilizers, the total turnover of India's pharmaceuticals industry

between September 2008 and September 2009 was US$ 21.04 billion. Of this the

domestic market was worth US$ 12.26 billion.

The Indian pharmaceuticals market is expected to reach US$ 55 billion in 2020 from

US$ 12.6 billion in 2009, according to a report ‘India Pharma 2020: Propelling access

and acceptance, realizing true potential’ by McKinsey & Company. The report states

that the market has the further potential to reach US$ 70 billion by 2020 in an

aggressive growth scenario.

Moreover, according to an Ernst & Young and industry body study, the increasing

population of the higher-income group in the country, will open a potential US$ 8

billion market for multinational companies selling costly drugs by 2015. Besides, the

report said the domestic pharma market is estimated to touch US$ 20 billion by 2015,

making India a lucrative destination for clinical trials for global giants.

Further, IMS Health India, which tracks drug sales in the country through a network

of nationwide drug distributors, estimates the healthcare market in India to reach US$

31.59 billion by 2020.The Indian pharmaceutical market reached US$ 10.04 billion in

size, with a value-wise growth rate of 20.4 per cent over the previous year’s

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corresponding period on a Moving Annual Total (MAT) basis for the 12 months

ended July 2010, according to data from IMS Health India.

Cipla maintained its leadership position in the domestic market with 5.27 per cent

share, followed by Ranbaxy. The highest growth in the domestic market was for

Mankind Pharma, which grew 37.2 per cent. Leading companies in the domestic

market such as Sun Pharma (25.7 per cent), Abbott (25 per cent), Zydus Cadila

(24.1 per cent), Alkem Laboratories (23.3 per cent), Pfizer (23.6 per cent), GSK India

(19 per cent), Piramal Healthcare (18.6 per cent) and Lupin (18.8 per cent) had

impressive growth during July 2010, shows the data.

According to the All India Organisation of Chemists and Druggists (AIOCD), the

pharmaceuticals industry in India will grow by over 100 per cent over the next two

years.

According to Shinde, President, AIOCD, the pharmaceutical industry is currently

growing at the rate of 12 per cent, but this will accelerate soon. The sale of all types of

medicines in the country stands at US$ 9.61 billion, which is expected to reach around

US$ 19.22 billion by 2012.

India's domestic pharmaceutical market is valued approximately at US$ 12 billion in

2010, and has shown a strong growth of 21.3 per cent for the 12 months ending

September 2010, as per consulting firm Pricewaterhouse Coopers (PwC). It estimates

that over the next 10 years, the domestic market will grow to US$ 49 billion, at a

compounded annual growth rate (CAGR) of 15 per cent.

According to Mr Srikant Kumar Jena, Union Minister of State for Chemicals and

Fertilisers, India tops the world in exporting generic medicines worth US$ 11 billion

and currently, the Indian pharmaceutical industry is one of the world's largest and

most developed.2

The industry was once tarnished for making cheap clones of Western medicines and

selling them in developing countries. However, this is no longer the case, seasoned in

the basics of medicine making; it is now playing a significant role in the global drug

industry. The strengthening of patent law and the increasing cost pressures on name-

brand drug makers in the West are fueling the growth tempo of Indian drugs industry.

According to the consultancy KPMG, the industry is expected to grow at a compound

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annual growth rate of about 18% till 2013-14. The Indian pharmaceutical market has

become the third largest in the world in terms of volume and is ranked 14th in terms of

value at over Rs.1 trillion. During 2009-10, Indian pharmaceutical was among the few

sectors that managed revenue growth despite the global economic recession. Another

positive development has been the development of biotechnology sector in India.

Driven by increasing affordability, the industry is undergoing a major transformation

and is slated to move into the world’s top-ten pharmaceutical market by 2015.

During the 1990s, there were hardly any exports to regulated markets from India.

However, today over 40% of $8 billion exports to North America and Western Europe

alone. The industry has a presence in 150 markets, which is more than any industry in

India. According to the US Food and Drug Administration data, it also accounts for

1,735 Drug Master Files as against 1,054 from US domestic companies and more than

the combined total of European and Japanese companies in 2008. This is a remarkable

achievement in a decade. In 1998, India filed only three Abbreviated New Drug

Applications (ANDAs). In 2009, it filed 181 ANDAs.3

Table 1.1: Indian Pharmaceutical Evolution

1970 1980 1990 2000 2010

Phase I

Early Years

Phase II

Government

Phase

Phase III

Development

Phase

Phase IV

Growth

Phase

Phase V

Innovation and

Research

• Market share

domination

foreign

companies

• Relative

absence of

organized

Indian

companies

• Indian Patent

Act 1970

• Drug prices

capped

• Local

companies

begin to make

an impact

• Process

development

• Production

infrastructure

creation

• Export

initiatives

• Rapid

expansion of

domestic

market

• International

market

development

• Research

orientation

• New IP Law

• Discovery

research

• Convergence

Source: Pharmascience Inc.

The Indian Pharmaceutical sector is highly fragmented with more than 20,000

registered units. It has expanded drastically in the last two decades. The leading 250

4

pharmaceutical companies control 70% of the market with market leader holding

nearly 7% of the market share. It is an extremely fragmented market with severe price

competition and government price control.

The pharmaceutical industry in India meets around 70% of the country's demand for

bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets,

capsules, orals and injectibles. There are about 250 large units and about 8000 Small

Scale Units, which form the core of the pharmaceutical industry in India (including 5

Central Public Sector Units). These units produce the complete range of

pharmaceutical formulations, i.e., medicines ready for consumption by patients and

about 350 bulk drugs, i.e., chemicals having therapeutic value and used for production

of pharmaceutical formulations.

Following the de-licensing of the pharmaceutical industry, industrial licensing for

most of the drugs and pharmaceutical products has been done away with.

Manufacturers are free to produce any drug duly approved by the Drug Control

Authority. Technologically strong and totally self-reliant, the pharmaceutical industry

in India has low costs of production, low R&D costs, innovative scientific manpower,

strength of national laboratories and an increasing balance of trade. The

Pharmaceutical Industry, with its rich scientific talents and research capabilities,

supported by Intellectual Property Protection regime is well set to take on the

international market.4

Aggregate net sales of 132 pharmaceutical companies consisting of 125 domestic and

seven MNC subsidiaries and associates posted an 11% increase to Rs.13690 crore in

the quarter ended June 2009. Revenue growth from the EU and the US regions was hit

despite improvement in volumes. This is mainly due to the sharp appreciation of the

Indian rupee against the pound euro and US dollar. As a result of rise in sales and

expansion of margin, operating profit rose 22% to Rs.3051 crore. Capacity expansion

and rising interest rates together led to a 72% spike in interest costs to Rs.235 crore

and 11% increase in depreciation to Rs.404 crore, respectively. Thus, growth in profit

before tax was restricted to 11% to Rs.2410 crore. Aggregate net profit of 125

domestic pharmaceutical companies posted an impressive rise of 24% in net profit to

Rs.1755 crore on healthy growth in net sales by 11% to Rs.12397 crore.5

5

The Indian pharmaceutical industry reported double-digit growth in net profit in the

quarter ended September 2010. Rupee appreciation, rise in employee costs and

increase in raw material prices dampened the show. Aggregate net sales of 138

companies constituting 131 domestic pharmaceutical companies and seven MNC’s

pharmaceutical subsidiaries and associates grew 14% to Rs.19044 crore in the quarter

ended September 2010 over the September 2009 quarter. Aggregate net sales of 16

BSE Healthcare Index companies (excluding Piramal Healthcare as it has earned a

one-time exceptional income of Rs.16224 crore) grew 18% to Rs.14764.21 crore

despite the rupee appreciation affected growth to some extent in the quarter ended

September 2010. Net profit increased 30% to Rs.2636.62 crore on forex gains.

MNC companies reported better performance than domestic pharmaceutical

companies by growth in turnover and profit. Aggregate net sales of seven MNC

pharmaceutical companies jumped 15% to Rs.1463 crore.

The Indian pharmaceutical industry is witnessing sluggish prescription trends, pricing

pressure from the European Union, intensified generic competition, and pricing

reforms by Germany. The growth is especially coming from the US, Russia and CIS

regions.6

Table 1.2: Pharma Sector Aggregates (Rs in Crores)

Total Domestic MNCS

1009(03) VAR (%)

1009(03) VAR (%)

1009(03) VAR (%)

Sales 19044 14 17581 14 1463 15

OPM (%) 21.3 20.7 28.5

OP 4057 2 3640 1 417 16

Other Income 403 150 359 185 44 26

PBIDT 4460 8 3999 7 461 17

Interest 272 -34 298 -30 -26 53

PBDT 4188 13 3701 12 487 18

Depreciation 681 17 666 17 15 7

PBT 3507 12 3035 11 472 19

Tax 623 3 471 -1 152 21

Net Profit 2884 14 2564 13 320 18

Source: Capital line Databases.

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India is a low-cost hub for Contract Research and Manufacturing Services (CRAMS),

and with many big pharmaceutical companies finding it difficult to grow, focus is

shifting towards India. Till 2008, developed pharmaceutical markets (US, Canada,

UK, Western Europe and Japan) contributed more than 50% of global pharmaceutical

growth and held a disproportional tilt in the market. A group of seven emerging

markets – now rechristened as ‘pharmerging countries’, i.e., Brazil, India, Turkey,

Mexico, Russia, South Korea and China- are eclipsing those developed countries now.

By 2013, these markets are expected to contribute 70% of the global pharmaceutical

market growth.7

In October 2010, the pharmaceutical industry posted a substantially lower growth of

6.5%, as against 20% in September 2010, mainly due to lower sales of anti-infective

and cough and cold medicines. In October 2009, the domestic retail market had

clocked a huge growth of nearly 30%, while during the previous year in October

2008, it posted a negative growth.8

According to a report by PricewaterhouseCoopers, India will join the league of the top

10 global pharmaceutical markets in terms of sales by 2020 with the total reaching

$50 billion.9

1.2 PHARMACEUTICAL INDUSTRY IN GUJARAT

Gujarat's pharmaceutical industry, which led the way with indigenous production of

medicines and the march towards self-sufficiency in drugs and pharmaceuticals in a

newly-independent India, completes its centenary this year.

While Bengal Chemicals, now closed, was the first modern pharmaceutical company

in India, Vadodara based Alembic Ltd, the second, celebrated its centenary in 2007.

The State was the first to manufacture APIs and finished dosage form in India,

manufacture pharmaceutical machinery, lead the way with clinical research

organizations and become the first to undertake pre-clinical safety and toxicology

studies in the country.

Alembic’s potent combination of pioneering vision, entrepreneurial spirit, sound

infrastructure and the ability to adapt to the changing times have helped shape Gujarat

as a pharma hub. From its beginning in 1907 when Alembic was set up in the then

princely state of Baroda, the state today serves as the corporate headquarters and a

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manufacturing base for several leading Indian pharmaceutical companies and

multinationals.

Gujarat has four pharma manufacturing clusters at Ahmedabad, Vadodara,

Ankleshwar and Bharuch-Vapi-Valsad belt.10 Being home to around 3,500 drug

manufacturing units, Gujarat is one of the country’s most enterprising states in the

pharmaceutical sector. It boasts of 42 percent share of India’s pharmaceutical turnover

and 22 percent share of exports.11

The industry had received strong support from the academic field. In 1940, the Drugs

Laboratory in Vadodara was established, followed by LM College of Pharmacy.

Further in 1989, the B.V.Patel Education Trust, Ahmedabad and Gujarat Branch of

Indian Pharmaceutical Association (IPA) established the B.V. Patel Pharmaceutical

Education and Research Development (PERD) Centre in Ahmedabad.12

45% of the pharmaceuticals used by the nation also happen to be from Gujarat.13

The present research covers the study of the below mentioned five pharmaceutical

companies in the state of Gujarat.

Alembic Limited

Torrent Pharmaceutical Limited

Cadila Healthcare

Sun pharmaceutical

Lupin Laboratories Ltd.

A brief profile of the above mentioned companies is as follows.

1.3 PROFILE OF ALEMBIC LIMITED

One of the oldest pharmaceutical companies in India, Alembic formerly known as

Alembic Chemical Works Company has already completed 100 years of operations.

Among other things, the company makes Glycodin, the most trusted cough syrup for

over 50 years. It manufactures pharmaceuticals and chemicals, bulk drugs (penicillin

and other antibiotics) and formulations. In 1995, the veterinary division of the

company was tied up with the animal health division of Hindustan Ciba-Giegy to

export eight veterinary products to Ciba (Bangladesh). In 1998-99, the installation

work of Cephalosporin-C recovery plant has been completed and that of 7-ACA was

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commissioned in Oct.,2000.The Bulk Drug unit of Darshak Limited was amalgamated

with the company with the approval of High court of Gujarat and the legal formalities

was also completed w.e.f. 16.09.2002. As per the scheme, the shareholders of

Darshak Ltd were allotted shares in the ratio of 6 shares of Alembic for every 100

shares of Darshak Ltd. In Feb. 2001, the company has launched Glycodin Activ cold

and flu tablets that are available over-the-counter (OTC) at Rs 12 (local taxes extra)

for a blister pack of 10. The company got ISO-9002 and ISO-14001 certification.

Alembic has finalized a major business restructuring plan under which it will create a

new division for cardiovascular and diabetic drugs while hiving of some odd brands

into a franchisee company for their marketing. The company has introduced novel

anti diabetic product Nateglinide in the brand name of NATELIDE. The company

plans to set up R&D Centre at Vadodara covering 7500 square metres. The facility

would consist of Chemistry, Analytical and Biological Laboratories. In order to make

more significant in Generic market and also to make it US FDA qualified the

company made a investment at its Panelav plant. This facility is expected to be

inspected in the first quarter of 2004.14

Alembic started in 1907 & now it is Asia's most respected integrated pharmaceutical

company with manufacturing facilities in Baroda and Baddi, India with R&D

facilities spearheading landmark research in the areas of Chemistry, Microbiology,

and Pharmaceutical Technology. and Bio-Equivalence. They have launched "BIO

ARC RESEARCH CENTRE" at Baroda to further capitalize their strength in

research.

Needless to say, Alembic has a turnover and growth rate that takes it into the top

bracket of Indian pharmaceutical companies with a series of brands among the top

five in their respective categories.

Alembic is a certified ISO-9002 and ISO-14001 company with manufacturing

practices and facilities that conform to WHO-GMP guidelines ensuing that every

Alembic product meets the most stringent quality standards. No wonder, then,

Alembic can be found improving the quality of life in over 75 countries around the

world.15

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1.4 PROFILE OF TORRENT PHARMACEUTICALS LIMITED

It all began with the toil of one enterprising individual, Shri. U N Mehta, when he

ventured on his own to create history in the Indian pharmaceutical industry by

implementing successfully the concept of niche marketing. His journey, characterized

by ups and downs, reached a milestone in 1970, with the launch of Trinicalm Plus, an

effective tranquilizer in the niche segment, central nervous system (CNS).

The foundations for Torrent were laid when 'Trinity Laboratories' began operations

under the able guidance of Shri Mehta whose efforts are worthy of emulation.

'Trinity' was renamed 'Torrent' and with this not only did the company get a new

name, it also focused on establishing its own manufacturing facilities in the early 80s.

Torrent augmented its efforts with the expansion of its manufacturing capacity,

emphasis on marketing and creating business opportunities through focus on exports.

Torrent Pharmaceuticals Limited recorded a quantum leap in the year 1994. It has also

been rated India's ninth best company among capital intensive companies in terms of

ROCE in a study by ETIG-BCG in 2001.

In recognition of the consistent performance Torrent Pharmaceuticals Limited has

been receiving accolades from various quarters, such as the President's award for

highest pharmaceuticals exports of Rs.1570 million in 1991-92. The Company that

had a humble beginning has now grown to become one of the leading players in

pharmaceuticals.16

The flagship company of Torrent group, Torrent Pharmaceuticals Limited, is a

dominant player in the therapeutic areas of cardiovascular (CV) and central nervous

system (CNS) and has achieved significant presence in gastro-intestinal, diabetology,

anti-infective and pain management segments.

To cater to new niche segments and sharpen its focus among customers, Torrent

Pharma has six marketing divisions, each catering to defined therapeutic segment. A

2300 strong field force caters to around 2,00,000 doctors across the country, which

makes it rank fifth in terms of market reach.

Torrent Pharma’s competitive advantage as a manufacturer stems from its world-class

manufacturing facilities. Its manufacturing facilities at Indrad, Gujarat, comply with

WHO, cGMP, MHRA and TGA norms and have received ISO 9001, ISO 14001 and

10

OHSAS 18001 (Occupational Health and Safety Management System) and ISO/IEC-

17025 certifications.

With a view to cater to its growth requirements, Torrent Pharma commissioned a new

formulations manufacturing facility at Baddi, Himachal Pradesh, in November 2005.

The facility has a capacity to manufacture 3600 million tablets, 400 million capsules

and 18 million Oral Liquid bottles, per annum and would cater to the domestic

formulations requirement.

Torrent has a modern and well-equipped state-of-the-art R&D Centre, built with an

investment of US $ 40 million. It is manned by more than 525 highly qualified

scientists, with a combined experience of over 2500 scientific man-years in Drug

Discovery and Development. Torrent Pharma has earmarked 9% of sales year-after-

year for R&D advancement.

In the International operations arena, Torrent Pharma exports to more than 50

countries around the world with over 1000 product registrations. The international

business has been broadly divided into five zones- USA, Latin America, Russia and

CIS, Western Europe and CEE and Rest of the World (ROW). For its export

excellence in International Business, Torrent Pharma has won several prestigious

export awards.

Torrent Pharma is now gearing up to enter the advanced highly regulated international

markets. Torrent Pharma has incorporated Zao Torrent Pharma in Russia, Torrent Do

Brasil Ltd. in Brazil, Torrent Pharma GmbH in Germany, Torrent Pharma Inc. in

USA and Torrent Pharma Philippines Inc. in Philippines. These wholly owned

subsidiaries will become a springboard for entry into several regulated and less

regulated international markets.17

1.5 PROFILE OF SUN PHARMACEUTICALS LIMITED

Sun Pharma began in 1983 with just 5 products to treat psychiatry ailments. Sales

were initially limited to 2 states - West Bengal and Bihar. Sales were rolled out

nationally in 1985. Products that are used in cardiology were introduced in 1987, and

Monotrate, one of the first products launched at that time has since become one of our

largest selling products. Important products in Cardiology were then added; several of

these were introduced for the first time in India.

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Sun Pharma was listed on the main stock exchanges in India in 1994; and the Rs. 55

crore issue of a Rs. 10 face value equity share at a premium of Rs. 140/- was

oversubscribed 55 times. The minimum 25% that was required under the regulations

then for listing was offered to the public, the owner family continues to hold a

majority stake in Sun Pharma. They used this money to build a greenfield site for API

manufacture, as well as for acquisitions. For the acquisitions, typically companies or

assets that could be turned around and brought on track were identified.

Their first API manufacturing plant was built in Panoli in 1995, for access to high

quality actives ahead of competition, and to tap the vast international opportunity for

speciality APIs.

Another API plant, the Ahmednagar plant, was acquired from the multinational Knoll

Pharmaceuticals in 1996, and upgraded for approvals from regulated markets, with

substantial capacity addition over the years. This was the first of several sensibly

priced acquisitions, each of which would bring important parts to the long-term

strategy

By 1997, their headquarters were shifted to Mumbai, the commercial capital of the

country. We began on the first of our international acquisitions with an initial $7.5

million investment in Caraco Pharm Labs, Detroit. By 2000, we had completed 8

acquisitions, each such move adding new therapy areas or offering an entry to

important international markets. A new research center was set up in Mumbai for

generic product development for the US market. In India, as new therapy areas were

entered into post acquisition; customer attention, product selection and focused

marketing helped us gain a foothold in areas like orthopedics, gynecology, oncology,

etc. From a ranking at 38th in 1994, by the year 2000 Sun Pharmaceutical was ranked

5th with a leadership in 8 of the 11 therapy areas that they were present in. The year

2000 was the year of turnaround at the US subsidiary, Caraco, as it began to receive

approvals after successful inspection by the USFDA. In December 2004, a research

center spread over 16 acres was inaugurated by the President of India, with special lab

space for drug discovery and innovation.

The tally at the end of 2005

• 15 manufacturing plants in 3 continents.

• 5000 employees

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• 2 World class research centers

• Brand selling in markets worldwide

• A growing presence in the US generic market

• Increasing research investments

• 40% of sales from international markets18

GROUP COMPANIES

Caraco Pharmaceutical Laboratories

Based in Detroit, Michigan, Caraco develops, manufactures, market and distributes

generic and private label pharmaceuticals* and markets them throughout the United

States. The corporation's present portfolio consists of a number of products in various

strengths and package sizes, across a variety of therapeutic segments, including

epilepsy and hypertension.

Caraco's manufacturing facility and executive offices were constructed in 1991, after

a $9.1 million loan from the Economic Development Corporation of the city of

Detroit. Since August 1997, capital infusions and loans have primarily come from Sun

Pharma.

Sun Pharma's investment in and support of Caraco has resulted in, since the second

quarter of 2002, Caraco achieving the sales to support its operations. As of March

2007, Sun Pharma owns approx 75% on a diluted basis of the outstanding common

shares of Caraco. Sun Pharma has two R&D centers in Baroda and Mumbai, where

development work for generics is done.

Sun Pharmaceutical Industries Inc. (SPI)

Sun Pharmaceutical Industries Inc is a Michigan Corporation and a wholly owned

subsidiary of Sun Pharmaceutical Industries Ltd, India

In the second half of 2004, Sun Pharma acquired the trademarks, manufacturing

know-how and other intellectual property of certain pharmaceutical products from

Women's First Healthcare, Inc, which was under bankruptcy proceedings. On

completion of the acquisition in December 2004, these products were assigned to Sun

Pharma Inc.

13

In December 2005, Sun Pharma Inc completed the purchase of dosage form

manufacturing operations of Able Labs in the US for USD 23.15 million from the US

Bankruptcy Court of the District of New Jersey, Trenton. A plant spread over 35,000

sq ft, in Bryan, Ohio, manufactures liquids, creams, and ointments. This plant was

purchased from Valeant Pharma.

The Ohio plant is now approved by the USFDA and the Cranbury plant expects to

receive approval shortly.

In January 2005, the company entered into a distribution and sale agreement with

Caraco. Under the agreement, Caraco distributes and sells SPI’s products using its

business organization, management personnel, and distribution set up.

Sun Pharmaceutical (Bangladesh)

Sun Pharmaceutical (Bangladesh) is a private limited company incorporated in March

2001 under the Companies Act 1994. This company was formed jointly with Sun

Pharma, City Overseas Ltd, a company incorporated in Bangladesh and Sun Pharma

Global Inc, a company incorporated under the laws of the British Virgin Islands. The

company began commercial operations in October 2004. The company owns and

operates a pharmaceutical factory and makes pharmaceutical products that are sold in

the local market. It currently markets 48 products and had reported a loss of 15 mill

Taka for the year ending March 07. (Previous year: 44 mill Taka loss).

Alkaloida Chemical Company Exclusive Group Ltd.

ICN Hungary, purchased from Valeant Pharmaceuticals in 2005, is one of the few

units worldwide, authorized to make controlled substances. ICN Hungary has now

been renamed Alkaloida Chemical Company. This 170 acre site has facilities spread

over 1,75,000 sq ft for the manufacture of bulk actives, with 500 KL capacity and

designated areas to make controlled substances. It has a 150,000 sq ft facility for

different dosage forms such as film coated and effervescent tablets, capsules, etc. A

large 65,000 sq ft research center has labs across synthetic chemistry, instrumentation

analytical and structural elucidation. The site is operational with 450 people and

additional recruitments are planned over time.19

14

1.6 PROFILE OF CADILA HEALTHCARE LIMITED

'Cadila Healthcare' is an Indian pharmaceutical company head quartered at

Ahmedabad in Gujarat state of western India. The company is the fifth largest

pharmaceutical company in India. It is a significant manufacturer of generic drugs.

Cadila Laboratories was founded in 1952 by Shri Ramanbhai Patel (1925-2001),

formerly a lecturer in the L.M. College of Pharmacy, and his business partner Shri

Indravadan Modi. The company evolved over the next four decades into one of India's

established pharmaceutical companies. In 1995 the Patel and Modi families split, with

the Modi family's share being moved into a new company called Cadila

Pharmaceuticals Ltd. and Cadila Healthcare became the Patel family's holding

company. Cadila Healthcare did its IPO on the Bombay Stock Exchange in 2000. Its

stock code on the Bombay exchange is 532321.

In 2001 the company acquired another Indian pharmaceutical company called German

Remedies. On June 25, 2007, the company signed an agreement to acquire 100 per

cent stake in Brazils Quimica e Farmaceutica Nikkho do Brasil Ltda (Nikkho) for

around 26 million dollars From nine pharmaceutical production operations in India as

well as a major R&D operation Zydus Cadila develops and manufactures a large

range of pharmaceuticals as well as diagnostics, herbal products, skin care products

and other OTC products. The company also makes EverYuth Naturals Walnut Scrub

& Ultra Mild Scrub -India 's leading scrub brand , EverYuth Naturals Golden Glow

Peel-Off-the no. 1 in the peel-off category and a face wash range .It is also the maker

of Sugar Free, India's most popular artificial sweetener, and Nutralite, India's most

popular cholesterol-free margarine.20

Cadila Healthcare Limited is a pharmaceutical company that discovers, develops,

manufactures and markets a range of healthcare products. Its operations range from

active pharmaceutical ingredient to formulations, animal health products and

cosmeceuticals. During the fiscal year ended March 31, 2009, it launched over 25 new

products and over 30 line extensions in the formulations market. Zydus

Pharmaceuticals (USA) Inc., its subsidiary in the United States. It has manufacturing

facilities for APIs and formulations, spread across five states, which include Gujarat,

Maharashtra, Goa, Himachal Pradesh and Sikkim. In February 2009, Zydus Family

Trust acquired 73.91% of interest in the Company. As a result, Zydus Family Trust

15

holds 74.56% interest in the Company. In December 2009, Zydus Healthcare SA

(Proprietary) Limited, a subsidiary of the Company, acquired 30% interest in Simayla

Pharmaceuticals (Proprietary) Limited. Subsequently it became the Company's wholly

owned subsidiary.21

1.7 PROFILE OF LUPIN LABORATORIES LIMITED

Headquartered in Mumbai, India, Lupin Limited today is an innovation led

transnational pharmaceutical company producing a wide range of quality, affordable

generic and branded formulations and APIs for the developed and developing markets

of the world. Dr. Desh Bandhu Gupta’s vision and dream to fight life threatening

infectious diseases and manufacture drugs of highest national priority led to the

formation of Lupin in the year 1968. His Vision, his inimitable commitment and

verve have steered Lupin to achieving the distinction of becoming one of the fastest

growing Generic players globally.

Lupin first gained recognition when it became one of the world’s largest

manufacturers of Tuberculosis drugs. Over the years, the Company has moved up the

value chain and has not only mastered the business of intermediates and APIs, but has

also leveraged its strengths to build a formidable formulations business globally.

The year 2008-09 was yet another year with impressive growth of 32% in revenue and

50% (excluding IP income) in profits. Over the last 5 years, the Company has

recorded a Compounded Annual Growth Rate (CAGR) of 31% and 53% in sales and

net profits respectively.

The Company today has significant market share in key markets in the Cardiovascular

(prils and statins), Diabetology, Asthma, Pediatrics, CNS, GI, Anti-Infectives and

NSAIDs therapy segments, not to mention global leadership positions in the Anti-TB

and Cephalosporins segments. The Company’s R&D endeavours have resulted in

significant progress in its NCE program. The Company’s foray into Advanced Drug

Delivery Systems has resulted in the development of platform technologies that are

being used to develop value-added generic pharmaceuticals.

Drugs and products of the company reach over 70 countries in the world. Today,

Lupin has the unique distinction of being the fastest growing top 10 Generics players

in the two largest pharmaceutical markets of the world – The U.S (ranked 9th by

16

prescriptions & growing at 92 %) and Japan (ranked 7th and growing at 23%). The

company is also the fastest growing, top 5 pharmaceutical players in India (ORG IMS

- March 2009) and the fastest growing Generic player in South Africa (ranked 6th and

growing at over 30 % annually - IMS March 2009).

Lupin’s world class manufacturing facilities, spread across India and Japan, have

played a critical role in enabling the Company realize its global aspirations.

Benchmarked to International standards, these facilities are approved by international

regulatory agencies like US FDA, UK MHRA, Japan’s MHLW, TGA Australia,

WHO, and MCC South Africa.22

Milestones:23

2009 Lupin acquired majority stake in Multicare Pharmaceuticals Philippines Inc.

2008 Lupin expanded its product basket in Japan-Kyowa and received ten products approval from Ministry of Health & Labour Welfare, Japan. Lupin acquired Hormosan Pharma GmbH, a Generic Company in Germany. Lupin acquired stake in Generic Health Pty Ltd., in Australia. Lupin acquired Pharma Dynamics in South Africa.

2007 Lupin acquired Vadodara based Rubamin Laboratories Ltd (rechristened to Novodigm Ltd). Lupin acquired Kyowa Pharmaceutical Industry Company Limited, a leading Generic Company in Japan. Commercial production was started at the New finished dosage facility at Jammu. Lupin received “Best new manufacturer of the year” award from Amerisource Bergen.

2006 A new facility was set up at Jammu. Maiden Bonus share were issued in the ratio of 1:1. Maiden issue of Foreign Currency Convertible Bonds (FCCB) aggregating US $100 mn, which are listed on Singapore Stock Exchange.

2005 Maiden Employees Stock Option Plan was implemented. US FDA and MHRA (UK) approvals were received for Goa. New Lovastatin plant at Tarapur was approved by the US FDA.

17

2004 WHO approval was received for State of the art formulation Plants at Goa and Aurangabad.

2003 Lupin had successfully implemented SAP ERP across the Company to unify all business functions and processes. Introduced collaborative messaging and workflow solution on the intranet. Oral Cefaclor injectible Plant at Mandideep was approved by US FDA. Lupin Pharmaceuticals Inc. USA, was formed for trading, marketing and developmental activities in the US.

2002 Exports to the Advanced Markets crossed Rs.1000 mn. Rising trend of exports as a % of total revenue – up 33% year-over-year. Patent filings crossed 100. Five ANDAs were filed. New Anti-TB facility was commissioned at Aurangabad. Rablet was rated by ORG-Marg as the second best launch of FY 2002-03.

2001 Lupin became the only Asian Pharmaceutical company to receive US FDA approvals for its sterile cephalosporin facility. A state of the art US FDA approvable oral cephalosporin bulk active plant was commissioned. State of the art R&D Centre at Pune was commissioned. Lupin commenced supply of Cephalosporin bulk actives to its alliance partners in the US. Lupin Laboratories Ltd was amalgamated with Lupin Chemicals Ltd, whose name was changed to Lupin Limited.

2000 The Cefotaxime facility was approved by the US FDA. The Company’s restructuring operations yielded encouraging results. Work commenced on the R&D Centre at Pune.

1999 Lupin’s injectable cephalosporin bulk active plant at Mandideep was approved by UK MCA.

1997 Lupin’s injectable Cephalosporins dosages plant at Mandideep obtained UK MCA approval. Lupin’s formulations facility at Aurangabad was upgraded.

18

Three plants of Lupin, manufacturing Cefaclor at Mandideep, 7 ACCA at Ankleshwar and Rifampicin at Tarapur, got US FDA approvals. ICMA Technology award was given for injectable Cephalosporins.

1996 Government of India conferred the ‘Best Exporter’ Award on Lupin. Company received the ICMA Technology award for injectable Cephalosporins.

1992 Fermentation Plant of Lupin Chemicals Ltd was established at Tarapur, Maharashtra. Sterile Plant for injectable Cephalosporins (bulk) was commissioned at Mandideep. Lupin Laboratories Ltd and Lupin Chemicals Ltd raised money through IPOs in 1993-94. Won FICCI’s award for contribution towards rural development.

1991 Injectable cephalosporin (bulk and dosages) production was initiated at Mandideep. Lupin won the ICMA technology award for successfully manufacturing Vitamin B6.

1989 Joint venture in Thailand – Lupin Chemicals (Thailand) Ltd was established. Two Plants Ankleshwar and Mandideep received US FDA approvals for maintaining stringent quality standards.

1988 The Lupin Human Welfare and Research Foundation (LHWRF) was founded by Dr Desh Bandhu Gupta to provide an alternative, sustainable and replicable model of rural development.

1987 Cephalexin Plant at Mandideep and 7 ADCA plant at Ankleshwar went on stream.

1981 Ethambutol production was started

1980 Lupin commissioned a formulations plant and an R&D center at Aurangabad.

1972 Lupin Laboratories Pvt Ltd was incorporated.

1968 Lupin commenced business.

19

1.8 BRIEF HISTORY OF ENGINEERING INDUSTRY

Hardly any aspect of our life remains untouched by engineering today. Engineers put

power and materials to work for human race — steel and concrete to build bridges,

roads, buildings, dams and glass, metal and plastics to manufacture hundreds of

everyday products. Engineering industry is the pre-requisite of industrialization of a

society or a nation as it portrays the capability to add value to primary products in our

economical world of today where trade has replaced war and finance has replaced

arms.

During the first ten years of independence, engineering industry maintained a low

profile in the unorganized sector through the indigenous efforts of mechanics,

craftsmen and immigrants who had the employees of large industrial units in India.

However, things improved in late fifties when large units such as Karachi Shipyard

and Engineering Works (KSEW) were commissioned in 1956.

While engineering industry has made a substantial progress over the years to produce

such as tractors, motorcycles, electric transformers, switch gears, electric meters, air

conditioners, refrigerators, sewing machines, cars, trucks, diesel engines within the

country, the uncertain as well as non-availability of right type of basic raw material—

steel and its alloys— plus lack of precision needed for the manufacture of parts and

machinery are one of the major constraints for the development of the engineering

industry.24

The following five engineering units are selected for the purpose of study:

1. Elecon Engineering Company Ltd.

2. FAG Bearings India Ltd.

3. Bosch Rexroth India Ltd.

4. Ingersoll-Rand (India) Ltd.

5. GMM Pfaudler Ltd.

1.9 PROFILE OF ELECON ENGINEERING COMPANY LIMITED

Here is the Saga made of great vision and sheer determination. Soon after India’s

independence, Elecon started making its presence felt in industrial scenario in most

productive and enriching manner. This process has its root as far back as 1951.

20

A small beginning that was destined to have a glorious present and spectacular future

was made in 1951 in Bombay by a dynamic visionary late Shri Ishwarbhai B Patel. A

small firm indigenously manufacturing conveying equipments started spreading its

wings in the area so far unexplored, resulting in valuable savings in foreign exchange

outflow. With obvious increase in business operations, it was converted into a Private

Limited Company on 11th January 1960.

On formation of a separate Gujarat State in May 1960, with a view to contribute

towards the development of home-land Gujarat, Elecon shifted its base to Vallabh

Vidyanagar, and became a Public Limited Company soon after.25

The company derives its corporate identity, viz. "Elecon" from a modest start of

design and manufacture of Elevators and Conveyors. It has grown over the years to be

known as a pioneer of the concept of mechanized way of Bulk Material Handling

Equipment in India. During the span of more than 4 decades, Elecon has encompassed

all the major core sectors through its supplies of highly sophisticated equipment

bearing ample testimony of the symbolic mark of Elecon's unbeatable technology.

Elecon has thus, made its presence felt through consistent and satisfactory

performance of its equipment in such core sectors as fertilizer, cement, coal/power

generation, chemical, steel plant and port mechanization etc., across the country.

Elecon is the first company in India to have manufactured sophisticated equipment for

Bulk Material Handling and thereby adhering to the motto of “ALWAYS A STEP

AHEAD IN TECHNOLOGY”.

Its product range includes design, engineering, manufacture, supply, erection and

commission of:

1. Wagon tipplers

2. Bucket wheel stacker/reclaimers

3. Barrel-type blender reclaimers

4. Fertilizer reclaiming scrapers

5. Limestone pre-homegenizing and blending plants

6. Single and twin bucket wheel bridge-type reclaimers

7. Crawler-mounted trippers

8. Stationary and shiftable conveying systems for open cast lignite mines

21

9. Integrated coal handling plants for power stations

10. Underground mining conveyors

11. Open-cast conveying systems

12. Ferrous and non-ferrous foundry products

Elecon has developed and perfected its skills in design, manufacture, erection and

commissioning of coal handling plants. Over the years, Elecon has expanded its skills

and expertise to include the designing and execution of turnkey contracts for:

1. Crushing

2. Screening

3. Stacking

4. Blinding, and

5. Reclaiming plants

The company has gone a long way from a moderate beginning at Goregaon in

Bombay, in the early fifties to a sprawling workshop area spanning over 1,17,051 sq.

meter. The present manufacturing facilities are equipped with latest computerized

machine tools, and quality control equipments.

A separate Gear division manufactures

1. Helical and Bevel Helical Gear boxes

2. Worm Gear boxes

3. Elevator Traction Machines (Lift Gear boxes)

4. Couplings

5. Wind Mill Gear boxes

6. High Speed Gear boxes

7. Planetary Gear boxes

8. Marine Gear boxes

9. Geared Motors

10. Custom built Gear boxes

11. Vertical Roller Mill Drive (VRM)

Elecon has expertise in providing customized gear boxes for Steel Mills, High Speed

Turbines, Sugar Mills, Marine vessels, Coast Guard Ships, Plastic Extrusions,

Antenna Drives and for Satellites in the Indian Space Programme. 26

22

This Division has recently specialized in developing speed increasing application for

Windmills as well.

Elecon has also set up an Alternate Energy Division in the year 1995 for

manufacturing and supply of Wind Turbine Generators – a non – conventional source

of producing energy. Under the technical know-how obtained from a Belgium

Company

It has recently signed collaboration with Renk AG, Germany w.e.f. April 07 for

Vertical Roller Mill Gearboxes for KPAV type up to size 200 & output

torque 1040 KNM.

Subsidiaries:27

The financial growth over the years is tabulated below:

1965 Issued 12 000 Right Equity shares at par in the prop. 1:5 425 No. of

Equity shares forfeited. 6 824 shares issued for consideration other than

cash during 1960.

1974 24 000, 9.8% Pref. shares issued to the public. Pref. shares redeemable

during 30.6.1982/84 at 3 months' notice.

1976 36 000 Right Equity shares issued at par in proportion of 1:2.

1977 54 000 Bonus Equity shares issued in prop. 1:2.

1979 Chitraj Engineering Co. (P) Ltd. became a wholly owned subsidiary of

the Company from 9th November.

1981 Equity shares sub divided on 15.6.1981. 8 10 000 Bonus Equity shares

of Rs 10 issued in prop. 1:2 on 29.6.1981.

1982 The name of this subsidiary was changed to Elecon (Chennai) Ltd. with

effect from 2nd February. The subsidiary's working was affected by

paucity of orders and natural calamities during 1984. In January the

Company issued to the public 5 50 000-13.5% convertible secured

debentures of Rs 100 each.

1983 During March consequent upon conversion of 55% of the face value of

convertible debentures the Company issued equity shares of Rs 10 each

credited as fully paid up at a premium of Rs 17.50 per share in the

23

proportion of, 2 No. of equity shares for every debenture. Shares were

allotted on 12th March. Pref. shares redeemed on 31.12.1983. 10 99

632 No. of equity shares allotted on conversion of debentures on

12.3.1983.

1984 Authorized capital reclassified.

1987 21 17 778 Bonus shares issued in prop. 3:5.

1988 A letter of registration was received for the manufacture of new articles

viz. shearer and continuous miner with an annual capacity of 10 units.

1989 The High Courts of Chennai and Gujarat by their orders dated 14th

February and 22nd March 1990 respectively approved the scheme of

amalgamation of the wholly owned subsidiary Elecon (Chennai) Ltd.

with the Company effective from 1st January 1987. Accordingly Elecon

(Chennai) Ltd. was dissolved without winding up effective from 1st

January 1987. The Company's sales declined to Rs.99.75 crores mainly

due to irregular inflow of orders because of severe competition which

led to uneven load in the workshops.

1990 The Company has issued 5 00 000 14% secured redeemable non

convertible debentures of Rs 100 each by private placement of SBI

Capital Markets Ltd. and Canara Bank in equal proportion to meet the

longterm working capital needs of the Company. These debentures are

redeemable at a premium of 5% in three equal annual instalments

between 19th September 1996 to 19th September 1998. The Company's

profits were low due to non receipt of export benefits worth Rs.113

lakhs from the export order of EGAT which was already completed and

higher tax liability.

1991 The working results were adversely affected due to increased interest

rates large overdue receivables from Electricity Boards execution of

contracts with lower margins etc. The Company proposed to diversify

into the business relating to vegetable and fruit processing food

processing and processing of edible oil seeds extraction and refining of

edible oil grain silos cattle and poultry feeds.

24

1993 The Company proposed to dispose of the Chennai division in view of

poor performance of the unit.

1994 The Company had successfully implemented the Alternate Energy

System. It installed 7 wind mills out of these 5 were sold to outside

parties and 2 were retained by the company for its own consumption.

The Company has entered into a technical collaboration agreement with

HMZ Belgium N. V. Belgium for manufacture of windomaster wind

Energy Generators which is one of the best available in the world with

larger energy generation.

1995 The liquidity and profitability of the company was adversely affected

on account of large over due receivables. 11 Wind Mills were

commissioned which already started generating power. The Company

had decided to abandon diversification into shrimp feed production in

view of the recessionary conditions in shrimp farms all over India.

1996 Efforts to realise large over due receivables from State Electricity

Board and Central Government Corporation were partly successful. The

Company secured an order from Neyveli Lignite Corporation Ltd. for

manufacture erection and commissioning of 2400 MM Drive Heads and

conveyors for its Mine III. The diversification programme in the field

Alternate non conventional energy source continued. The company

installed eight additional wind mills during the year raising the total to

twenty two.

1997 Eleven wind mills erected in Gujarat for captive consumption were lost

due to severe cyclone. The installed seven additional Wind Mills during

the year. The Company's sales and other services declined to Rs.159.80

crores due to the recessionary conditions. Authorised capital increased.

1998 The Company launched Super NU Universal Mounting Worm Gears

which provide improved power ratings and are well accepted by

industries. The Company launched POSIRED 2 Helical Bevel Gears for

which the company has entered into a technical collaboration with

P.I.V. Antrieb Werner Reimers GmbH & Co. KG Germany.

2004 Elecon Engineering produces gear boxes for Stealth Frigate battle ships

25

2005 Elecon Engg gets Rs 26 cr order from APGenco

2007 Elecon Engineering Company Ltd has signed a Memorandum of

Understanding (MoU) with the Government of Gujarat (GoG) at the

Vibrant Global Investors' Summit 2007 held on January 13 2007.

Elecon Engineering Company Ltd has informed that the Company has

been awarded a contract worth Rs 229.09 Crores for supply and

installation of Coal Handling Plant Package for National Capital

Thermal Power Project (NCTPP) Dadri Stage II (2 x 490MW) from

NTPC Ltd. Elecon Engineering receives order of Rs 57.70 crores from

BHEL.

2008 Elecon Engineering Company Ltd has informed that the Board of

Directors of the Company at its meeting held on July 29 2008 Shri.

Prashant C Amin appointed as Additional Director of the Company.

Elecon Engineering Company Ltd has bagged three orders worth Rs

51.74 crore from Techpro Systems Chennai and SAIL Durgapur Steel

Plant Durgapur. Elecon Engineering Company Ltd has informed that

the Company has been awarded some prestigious order of Rs 17.75

Crores from following client for design engineering manufacturing

testing supplying fractioning and commissioning of Material Handling

Equipments and other Equipments.

1.10 PROFILE OF FAG BEARINGS INDIA LIMITED

FAG Bearings India Limited, a member company of FAG group of Germany - is a

leading player in the Indian Bearing industry.

The company manufactures a very wide range of bearings conforming to the stringent

international quality standards.

FAG India's manufacturing plants, located at Vadodara, Gujarat, feature the most

advanced manufacturing technology. The company is certified to ISO/TS 16949, ISO

9001, and ISO 14001 standards.

FAG India is a leading OEM supplier to the automotive industry, mechanical and

electrical engineering industry, besides the Railways.

26

In 1997, FAG Bearing India Limited set up the country's first 100% EOU for

bearings. Bearings produced at the EOU plant have gained ready acceptance and

recognition of customers located in Europe, USA, Asia and Africa.

FAG's joint venture company - FAG Roller Bearings Private Limited - produces taper

roller bearings at Chakan near Pune.28

The milestones achieved of FAG as follows:29

1962 Incorporated as Precision Bearings India Limited.

1986 The company name changed to FAG Precision Bearings Limited.

1993 Became first Indian Bearing company to achieve ISO 9001 certification.

1997 EOU Project for Cylindrical roller bearings inaugurated.

1998 Became first Indian Bearing company to achieve QS 9000 certification.

1999 Change in name to FAG Bearings India Limited. The company achieved

ISO 14001 certification.

2000 Set up India's first production facilities to produce hub bearings.

2001 Launched Joint Venture Company FAG Roller Bearings Private Limited

to manufacture taper roller bearings.

1.11 PROFILE OF BOSCH REXROTH INDIA LIMITED

Dedicated to the vision of providing Drive and Control solutions for industrial

applications, Bosch Rexroth AG, Lohr am Main, Germany, the parent company of

Bosch Rexroth (India) Ltd., serves a wide range of customers in 80 countries across

the globe. Over 500,000 customers worldwide count on Bosch Rexroth’s years of

experience, world-class R & D activities, extensive customer support and continuous

product and process improvements accomplished by 35,300 employees in 39

countries.30

Milestones:31

1975 Incorporated as Rexroth Maneklal Industries Ltd.

1976 Started manufacturing in Ahmedabad.

1981 Started power unit production in Mumbai.

1988 Started power unit production in Bangalore.

1993 Started sales of electric drives & controls.

27

1994 Started sales of linear motion products.

1995 Name changed to Mannesmann Rexroth (India) Ltd.

1996 Majority shareholding acquired by Mannesmann Rexroth AG.

1999 Completed manufacturing restructuring, process reengineering, and

corporate reorganization.

Received ISO 9001 1994 certification Sales reach Rs. 500 million.

2000 Inaugurated new Service Center at Ahmedabad.

2001 Robert Bosch GmbH acquired Mannesmann Rexroth AG.

Company acquired Hydraulics Division from MICO/Bosch Group.

Name changed to Bosch Rexroth (India) Ltd.Commenced TPM (Total

Plant Maintenance) process.

2002 Shareholding increased by Bosch Rexroth AG to 96%

2003 Inaugurated new Training Center at Ahmedabad.

Recertified under ISO 9001 2000.

Bosch Rexroth India Ltd. is a provider of comprehensive drive and control solutions

in industrial and mobile applications through Hydraulics, Electric Drives and

Controls, Linear Motion and Assembly Technologies, Pneumatics.

The company has units to manufacture of hydraulic valves, pumps, blocks, cylinders

and power in Ahmedabad and Bangalore. It has sales offices in Ahmedabad,

Bangalore, Kolkata, Mumbai, New Delhi and service centers in Ahmedabad,

Bangalore, Jamshedpur. It has Training centers in Ahmedabad and Bangalore and 57

authorized sales and service partners.

Bosch Rexroth India Ltd. is ISO 9001-2000, ISO 14001:2004, OHSAS 18001:1999

certified.

1.12 PROFILE OF INGERSOLL-RAND (INDIA) LIMITED

Ingersoll-Rand is a leading innovation and solutions provider for over 25 years that

have helped develop the industrial base and infrastructure of countries all over the

world. The company focuses on the major global markets of Climate Control,

Industrial Technology, Infrastructure Development and Security and Safety.

Ingersoll-Rand (India) Limited is a part of the Ingersoll Rand Company, a global

innovation and solutions provider with powerful brands and leading positions within

28

its markets. Ingersoll-Rand (India) Limited has its presence in India since 1921. The

company established its first manufacturing plant in India in 1965 and became a

public limited company in 1977.Today Ingersoll-Rand has manufacturing facilities in

Ahmedabad that is ISO 9001:2008 certified and in Sahibabad that is ISO 9001:2000,

ISO 14001:2004 & OHSAS 18001:2007 Certified. Ingersoll Rand products are widely

appreciated in the market for their superior quality and reliability. With a strong sales

presence in over 15 locations across the country and a strong national distributor

network, Ingersoll-Rand (India) Limited is a dominant player in its business of

providing solutions for the Infrastructure development, Industrial Solutions and

Climate Control markets. It is amongst the country's largest exporters of engineered

goods.

Ingersoll Rand is no longer an Engineering Company offering world-class products,

but a Company that provides the customer with solutions based on these products,

solutions which go well beyond them.

Ingersoll-Rand (India) Limited is among the Country's largest exporters of engineered

goods. Annual exports for financial year 2006-2007 stood at Rs. 1,004.80 Million.

The journey of Ingersoll-Rand (India) Ltd. right from its inception is given below:32

1871 Simon Ingersoll’s steampowered rock drill is patented. Ingersoll Rock Drill Company is formed

1872 Rand & Waring Drill & Compressor Company is formed

1879 Rand & Waring changed to Rand Drill Company

1888 Ingersoll Rock Drill Company merges with Sergeant Drill Company to form Ingersoll Sergeant Drill Company

1894 WR Grace named president of Ingersoll Sergeant

1896 J. George Leyner invents the hammer drill

1902 Type X portable compressor line is introduced by Rand

1904 Panama Canal is started using Ingersoll Sergeant drills

1905 Merger of Ingersoll Sergeant Drill Company and Rand Drill Company to form Ingersoll Rand Company.

1906 William Saunders becomes first president of Ingersoll Rand.

29

1907 Imperial Pneumatic Tool is acquired

1909 A.S. Cameron Steam Pump Works is acquired

1912 Jackhammer drill is invented (Tradename: Jackhammer)

1912 J.G. Leyner Engineering Works Company is acquired

1913 William Saunders becomes Ingersoll Rand’s first Chairman

1925 Develops first commercially successful diesel electric locomotive engine; first diesel electric locomotive sold to Central Railroad of New Jersey

1927 Provides jackhammer drills and air compressors for work on Mount Rushmore

1934 First air powered Impactool introduced

1936 George Doubleday elected chairman

1942 The Company is recognized for its wartime contributions with the coveted Army Navy “E” Award

1948 The Quarrymaster is introduced; known as the first modern self contained, mobile, air powered rock drill for large diameter blast holes

1954 World’s first atomic powered submarine is equipped with Ingersoll Rand boiler

1955 Downhole drill is introduced

1955 Daniel C. Keefe elected chairman of the board

1959 Robert Johnson elected chairman

1967 William L. Wearly elected chairman

1968 The Torrington Company manufacturer of bearings and motion control products, is acquired

1968 Centac air compressor is introduced

1972 Company executive offices move from NYC to Woodcliff Lake, New Jersey

1974 Acquires Schlage Lock Company

1977 Builds the world’s fastest rescue drill for the South African Chamber of Mines

1980 Thomas A. Holmes elected chairman

1982 High speed centrifugal pump introduced

30

1986 Ingersoll Rand and Dresser Industries from Dresser Rand

1987 The Company re-enters China through joint venture with Xuanhua Pneumatic Machinery Limited

1988 Theodore H. Black becomes Chairman

1990 The ARO Corporation is acquired

1993 James E. Perrella elected Chairman

1995 Acquires Clark Equipment Company, including Bobcat, Club Car and Blaw Knox

1996 Steelcraft, manufacturer of steel doors and frames, is acquired

1996 Zimmerman International Corporation, manufacturer of ergonomic material handling systems, is acquired

1997 Acquires Newman Tonks, European producer of architectural hardware

1997 Thermo King, manufacturer of transport refrigeration equipment, is acquired

1999 Harrow Industries is acquired, including Locknetics (electronic security products). Recognition Systems (biometric security). Ives and Broadway (architectural hardware and bath fixtures.)

2000 Herbert L. Henkel elected chairman.Acquires 100% ownership of Dresser Rand. Hussmann, manufacturer of stationary refrigeration equipment, is acquired. Acquires Interflex, provider of time and attendance, scheduling and security systems. Superstav, based manufacturer of compact equipment, is acquired

2001 Kryptonite Corporation manufacturing of portable security products, is acquired

2003 Completes sale of Torrington

2004 Completes sale of Drilling Solutions and Dresser Rand

2005 Acquires CISA, ITO and SuperRay. Acquires majority interest in Shenzhen Bocom System Engineering Co. Ltd., a China based provider of Integrated Security Technologies and Services. Acquires Dolphin Electromagnetic Technologies, an India based Provider of Integrated Security Technologies and Services. Acquires Astrum GmbH, a Leading Developer of Personnel Scheduling and Management Software and Services. Acquires United

31

States Distribution Rights for Tramac Branded Hydraulic Breakers. Establishes a Joint Venture for the Manufacture and Distribution of Door Locks with Taiwan Fu Hsing Industrial Co.

2006 Celebrates 100 Years of Trading on the New York Stock Exchange. Acquires Geith International, an Ireland based Equipment Attachments Manufacturer. Acquires the Global Low Pressure Air Business of BOC Edwards. Acquires ZEKS Compressed Air Solutions, a Leading North American Provider of Compressed Air Treatment Technologies

2007 Acquires Remaining Interest of Instrum Rand Sells its Road Development Business Unit for $1.3 Billion to AB Volvo. Signs an agreement to purchase privately owned Officine Meccaniche Industriali srl (OMI), a leading European provider of compressed air treatment equipment. Sells its Bobcat, Utility Equipment and Attachments Business Units for $4.9 Billion to Doosan Infracore. Announces definitive agreement to acquire Trane Inc. (formerly American Standard Companies) in a transaction valued at approximately $10.1 billion

2008 Completes acquisition of Trane Inc., a global leader in indoor climate control systems, services and solutions in a transaction valued at approximately $10.1 billion.

1.13 PROFILE OF GMM PFAUDLER LIMITED

GMM Pfaudler was incorporated in 1962 as Gujarat Machinery Manufacturers

(GMM) and listed on the Bombay Stock exchange. In 1987 Pfaudler Inc., USA

subscribed to 40% to form a joint venture. Pfaudler Inc. further increased their stake

to 51% in 1999 and the name of the company was changed to GMM Pfaudler

Limited.

Robbins & Myers Inc., USA which is listed on the New York Stock Exchange owns

Pfaudler Inc. GMM Pfaudler acquired Mavag AG, Switzerland in 2008. The annual

group revenue of GMM Pfaudler stands at US$ 43 million in 2008 - 09.

GMM Pfaudler has a state of the art plant spread over 20 acres at Karamsad, Gujarat,

450 Kms north of Mumbai. It is easily accessible by two major airports Vadodara (45

Kms) and Ahmedabad (70 Kms) both having multiple daily flights from and to

Mumbai and other Indian metros.

32

The plant has a covered area of over 21,000 sq. Meters. It is equipped with the latest

equipment required for quality fabrication. In addition we have 5 furnaces - 3 electric

and 2 natural gas.A company is its people. GMM Pfaudler's 120 trained and

motivated workers are supported by 60 engineers and 110 staff and officers to ensure

that the plant delivers quality equipment on time.

GMM Pfaudler has a sales and service presence across India with regional offices in

Ahmedabad, Bengaluru, Chennai, New Delhi, Hyderabad, Mumbai and Vadodara.

GMM Pfaudler Limited is a leading supplier of engineered equipment and systems for

critical applications in the global chemical and pharmaceutical markets.

Their success is based on close and continuing interaction with our customers,

application engineering expertise, innovation, customer support and a competitive

cost structure.

As a customer-focused organization, we strive to fully understand our customer′s

needs to better anticipate their future requirements. We also offer process solutions

with in house application engineering and technical support services to create a

competitive advantage.A truly world class organization, GMM Pfaudler is an ISO

9001:2008 company. We have been accredited by ASME for the manufacture and

repair of pressure vessels under ‘U’ Stamp and ‘R’ Stamp respectively, by TUV Nord

for the manufacture of pressure vessels under CE 0045 (PED 97/23/EC, Module

H/H1) and AD 2000-Merkblatt HP0. We have also been approved by Special

Equipment Licensing Office (SELO) for the supply of pressure vessels to the People’s

Republic of China. Our welding workshop has been verified and recognized based on

the requirements of the standard DIN EN ISO 3834-2 (EN 729-2) by TUV Nord.

GMM Pfaudler Limited is headquartered in Mumbai, India with our manufacturing

facility located in Gujarat, India.

Mavag AG a wholly owned subsidiary of GMM Pfaudler Limited is located in

Neunkirch, Switzerland, with a turnover of CHF 15 million. Mavag is a leading

supplier of highly engineered equipment for the pharmaceutical, bio engineering and

fine chemical industries.33

33

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25. http://www.sunpharma.com/sunpharma-aboutus/history.php.

26. http://www.torrentpharma.com/corporate%20profile.php.

27. http://www.torrentpharma.com/torrent%20history.php.

28. Pharmaceutical Industry in Gujarat-FDCA.

29. The Analyst, Aug. 2010, p.50.

34

30. The Analyst, Dec. 2010, p.74.

31. The Analyst, Dec. 2010, p.76.

32. The Hindu Business Line Business Daily from THE HINDU group of

publications, Friday, Dec 28, 2007.

33. The Times of India, Ahmedabad, Monday, Dec. 13, 2010, pp. 18.