zyden gentec ltd Management discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

INDUSTRY STRUCTURE & DEVELOPMENTS

The pharmaceutical industry in India would continue to remain under great international focus on international scenario despite price wars and huge import from Chinese firms. India being perceived as a stable, trustable and large consumption democracy has been getting encouraged responses from many MNCs and overseas strategic investors in Indian businesses, especially in Pharmaceutical Sector in last couple of years. Moreover the Pharmaceutical Sector will continue to grow further as the cost of health care in India is substantially lower, in comparison with many western & developed countries. Indian pharmaceutical sector is currently one of the largest and most developed in the world and has the quality of being recognized as high-quality, low-cost skilled producer of pharmaceuticals.

Your company, Zyden Gentec Limited has added a few new products to its large product range during the year.

Further the company is hopeful of sustaining its market presence and capturing and retaining its clientele.

OUTLOOK ON OPPORTUNITIES

Outlook on the Indian Pharmaceutical market continues to be positive despite of the economic & slowdown pressures, as commonly felt by all the businesses, continue to exert its affect. As stated earlier, with the introduction of the product patent regime beginning January 1, 2005 the Indian market continue to remain an attractive option for introduction of research based products. Industry consolidation is expected to bring in economies of scale and provide access to regional players. The biggest growth driver continues to be the pipeline of patent expiries. Consequently, companies are recognizing the importance of pipelines and are making significant investments in research and drug development.

Your company would continue to consolidate on the present manufacturing facility. The company has widened its range of products with more emphasis on quality. And with opening of subsidary in Hong Kong, the management is expecting to cater foreign markets more effectively, further increasing the clientele abroad.

OUTLOOK ON THREATS, RISKS AND CONCERNS

The product patent regime poses the serious challenge to domestic industry unless it invests in R&D. The global pharmaceutical business has inherent risks of patent litigation, regulatory issues and product liability, particularly in the developed markets. Globally, over-investment and excess capacities weight on the generic industry has been resulting in increasing competition and pricing pressures. The industry faces risk of all Research & Development initiatives not leading to commercially viable and successful products. Rise in cost of raw materials, exchange rate fluctuations, environmental liabilities, tax laws, litigation, labour relations and significant changes in the global, political and economic environment exert tremendous influence on the performance of the Company. Since larger players are becoming more dominant, market impact may change the financial performance of the Company. Apart from this, the procedural hurdles & delays at DCA continue to act as growth deterrent in India.

INTERNAL CONTROL SYSTEM

The Company remains committed to ensure an effective internal control that provides assurance on the efficiency of operations and security of assets. Your companys well established and robust internal audit processes, both at business and corporate levels, continuously monitor the effectiveness of the internal control environment across the Company and the status of compliance with operating systems, internal policies and regulatory requirements. The Company has also undertaken steps to implement new control measures in line with best global practices such as standard operating procedures as per CGMP requirement.

FINANCIAL REVIEW & ANALYSIS

Share Capital

Presently, the Authorized Share Capital of the Company is Rs. 15,00,00,000/- (Rupees fifteen crores) comprising of 1,50,00,000 (One crore and fifty lacs) equity shares of Rs. 10/-each. During the period there have been no increase / decrease in the Authorized Share Capital of the Company.

Fixed Assets

The Company had Fixed Assets amounting to Rs. 10,01,83,339/- on 31st March, 2012 and there has been no change in the fixed assets during the year, so the fixed assets as on 31st March, 2013 were at Rs. 10,04,97,494/-.

Investment

During the period the Company has invested in Unquoted 10,000 Shares as investment in Zyden Gentec Hong

Kong Ltd, the wholly owned subsidiary incorporated in Hong Kong on 4th February, 2013.

Sales

The sales (net of excise duty) & other income in the last year amounted to Rs. 9,61,88,426/- and for the current year it is Rs. 15,02,03,117/-

Segment wise Performance

Particulars	Financial Year 2012-13	Financial Year 2011-12
Income from Manufacturing & Allied Activities	Rs. 140,843,144/-	Rs. 9,51,19,864/-
Income from Financial, Investment & Allied Activities	Rs. 93,59,973/-	Rs. 10,68,562/-

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates and expectations may be "forward looking statements" within the meaning of the applicable provisions of applicable laws and regulations. Actual results may substantially or materially differ from those expressed or implied. Some important developments such as significant changes in the global, political and economic environment, environment in India and key markets abroad, tax laws, litigation, labour relations, exchange rate fluctuations, interest and other costs etc. could affect the companys performance.

	For and on behalf of Board of Directors
	Sd/-
	Vinod S Gupta
Kota, August 30, 2013	Chairman