Zyden Gentec Ltd Directors Report

Dear Shareowners,

Your Directors present here the 19th Annual Report along with the audited Accounts and Auditors Report for the financial year ended on 31st March, 2013.

FINANCIAL RESULTS

The Standalone and consolidated performance of the company for the financial year ended on 31st March,

2013 is summarized below:

	(Rs. in Lacs)	(Rs. in Lacs)
PARTICULARS	CONSOLIDATED	STANDALONE
	2012-1 3	2012-1 3	2011-12
1. Income from Operations	1484.11	830.56	1028.93
Less:-Excise duty	75.68	75.68	77.73
Total Income from Operations (net)	1408.43	754.88	951.20
2. Total Expenses	1525.03	882.40	1286.93
3. Profit/(Loss) from operations before other Income, finance costs and exceptional items (1-2)	(116.60)	(127.52)	(335.73)
4. Other Income	93.59	93.59	10.69
5. Profit/(Loss) from ordinary activities before finance costs, exceptional items and Tax (3+4)	(23.01)	(33.93)	(325.04)
6. Finance cost	39.15	39.15	120.74
7. Profit/(Loss) from ordinary activities after finance costs but before exceptional items and Tax (5-6)	(62.16)	(73.08)	(445.78)
8.Taxation (including FBT & Deferred Taxation)	--	--	(35.81)
9. Net Profit / (Loss) after Tax & exceptional items (7-8)	(62.16)	(73.08)	(409.97)

FINANCIAL PERFORMANCE

During the Financial Year 2012-13, the gross receipts from Operations of the Company were Rs. 754.88 lacsas compared to Rs. 951.20 lacs in the financial year 2011-12 whereas the profit or (Loss) after tax & exceptional items were Rs. (73.08) lacs as against Rs. (409.97) lacs in the financial year 2011-12 and the consolidated gross receipts from Operations of the Company for the year ended 31st March, 2013 was Rs. 1408.43 lacs and the profit or (Loss) after tax & exceptional items were Rs. (62.16) lacs.

The company is going through a recovering phrase and which has the further decreased the performance of the Company and tough Market situations, liquidity crunch and lesser profit margins are crux factors for such decreased performance. The door to foreign exports has increased considerably in last quarter with opening of subsidary, so we expect speedy recovery in the time to come.

WHOLLY OWNED SUBSIDIARIES

To mark our business presence worldwide, and with perspective of serving our worldwide customer base, Company have incorporated a foreign Wholly Owned Subsidiary titled "Zyden Gentec Hong Kong Limited" in Hong Kong on 4th February, 2013 having registered office Unit 801, 8th Floor, 20 Queens Road Central, Hong Kong as per Hong Kong Ordinance.

DIVIDEND

Due to non availability of distributable profits, your Directors do not recommend any dividend for the financial year 2012-13.

FIXED DEPOSITS

The Company has not invited or accepted any fixed deposit from public during the financial year 2012-13.

BOARD OF DIRECTORS

a) Retire by Rotation

In accordance with the provisions of Section 256 of the Companies Act, 1956 and as per Article 89 of the Articles of Association of the Company, Mr. Vinod S Gupta, Chairman retires by rotation at the following Annual General Meeting and being eligible offer himself for re-appointment as per Article 90 of the Articles of Association of the Company.

b) Resignation of Director

1. During the financial year 2012-13, Mr. Rajesh Sharma, Director has resigned from the Board w.e.f. 25th March, 2013. The Board accepted the same and put on record the appreciation of his contribution towards the Company during his tenure.

2. Mr. Venkata Kameshwara Rao, Whole Time Director has given his resignation from the board w.e.f 30.08.2013 and the same has been duly accepted by the board. Further the board put on record the appreciation of his contribution towards the company since the beginning of Kota unit.

c) Appointment of Additional Director

Mr. Manish Omprakash Jatia was appointed as Additional Director at the Board Meeting held on 30th May, 2013. The Board received notice from a member proposing the candidature of Mr. Manish Omprakash Jatia as a Director u/s 257 of the Companies Act, 1956. The Board recommends his appointment as a regular Independent Director of the Company, liable to retire by rotation.

The Details are furnished in Explanatory Sttement annexed to the Notice calling AGM.

d) Appointment of Whole Time Director

Ms. Anita Kumari was appointed as Additional Director at the Board Meeting held on 30th August, 2013. Further, subject to the approval of members, she will be appointed as a Whole-time Director of the Company w.e.f. the same date for a period of 5 years. In terms of section 260 of the Companies Act, 1956, she shall hold office only upto the date of the ensuing Annual General Meeting. The Board received a notice u/s 257 of the Companies Act, 1956 from a member proposing the candidature of Ms. Anita Kumari, as a Director. In view of this the Board recommends her appointment as a Whole-time and Independent Director of the Company, liable to retire by rotation. The Details are furnished in Explanatory Statement annexed to the Notice calling AGM.

AUDITORS

M/s Anand Jain & Co, Chartered Accountants, have tendered resignation from being Auditors of the Company after the conclusion of the ensuing Annual General Meeting due to their preoccupancy and the same have been duly accepted by the board. The Board put sincere regards and appreciation for Mr. Anand Jain, proprietor, M/s Anand Jain & Co for such a wonderful tenure and professional relationship with the Company.

The Board on recommendation from Audit Committee further decided to request M/s Rajvanshi & Associates, Chartered Accountant, Jaipur for their tenure with the Company as Statutory Auditors, and they have also shown their willingness and the offer has been duly accepted by them. and company had also received letter from them, to the effect that their appointment, if made would be within the prescribed limits under section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such appointment within the meaning of section 226 of the Act.

The board further recommends the appointment of M/s Rajvanshi & Associates, Chartered Accountants, Jaipur, as Statutory Auditors of the Company.

The notes on the financial statements referred to in the Auditors Report are self-explanatory and have been explained / clarified and do not calls for any further comment.

CORPORATE GOVERNANCE REPORT

The Company has complied with all the mandatory requirements of Corporate Governance specified by Securities & Exchange Board of India (SEBI) through Clause 49 of the Listing Agreement. As required by the said clause, a separate section on Corporate Governance, forms part of the Annual Report of the Company. A certificate from M/s V. M. & Associates, Company Secretaries in Practice, confirming compliance of conditions of Corporate Governance, is annexed with this report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed discussion on the industrial structure, development, opportunities, threats, review of operational performance and risks, as required under the Listing Agreement with stock exchanges, forms part of this report and is annexed herewith.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND RESEARCH & DEVELOPMENT A. Conservation of energy :

I. Energy conservation measures taken:

Energy conservation has a direct impact on the cost of the product, so high priority is given on it in all our locations. Manufacturing process parameters are continuously monitored by experienced & qualified technicians & engineers for better & efficient output leading directly & indirectly to energy efficient environment.

II. Additional investments and proposal, if any, being implemented for reduction of consumption of energy:

i. HT line & connections installed in place of LT. ii. New temperature indicators installed for better monitoring. iii. Replaced all of old pipe lines & fittings and new Insulations done. iv. 180 KVA DG Set.

III. Impact of above measures on the cost of production of goods:

i. The above measures helped to improve the energy management and consequently to reduce the cost.

B. Technology absorption: The manufacturing technology is indigenous. The company has in-house

Research & Development facilities.

A. Research & development:

I. Specific areas in which R&D carried out by the Company:

Developments of new compounds, products like Oxybutymin Hydro Chloride USP, Tolnaflate EP USP, Isopropomide Iodide USP, Rosuvastatin Calcium during the year and a couple of products are ready to start commercial production.

II. Benefits derived as a result of above R&D: Developments of new products and improved quality of existing products and compounds, resulting in better profits and helped in creating good clientele. III. Future Plan of Action: To keep a continuous focus on development of new compounds & products. IV. Expenditure on R&D: The summary of expenditures incurred regarding research and development during the financial year 2012-13 are as follows:

Particulars	Amount (in Rs.)
1. Capital	2,20,000
2. As percentage of Sales	2.65%

FOREIGN EXCHANGE EARNING AND OUTGO

1. The Foreign Exchange earnings of the company were Rs. 2,91,67,208/- and there was outgo of Rs. 42,40,283/- during the financial year 2012-13.

2. Activities relating to exports / initiatives taken to increase exports / development of new export markets and export plans:

PARTICULARS OF EMPLOYEES

None of the Employees of the company were in receipt of the remuneration exceeding the limits prescribed under section 217(2A) of the Companies Act, 1956, as amended, during the financial year 2012-13.

ISSUE OF FOREIGN CURRENCY CONVERTIBLE BONDS

The company has not issued any Foreign Currency Convertible Bonds during the financial year 2012-13.

LISTING AT STOCK EXCHANGE

The Equity Shares of your company continue to be listed on Bombay Stock Exchange Limited and the annual listing fees for the financial year 2013-14 have been paid.

DEPOSITORY SYSTEM

The trading in equity shares of your company is under compulsorily in dematerialization form. As on the date 30th August, 2013 (date of last benpose), equity shares representing 98.58% of equity shares are in dematerialization form.

EMPLOYEE STOCK OPTION SCHEME

The Company has not issued any stock options for its employees during financial year 2012-13.

LOANS ON COMPANY

Heavy losses in last couple of years, and liquidity crunches, are playing a heavy role in current loss making business cycle. To compensate the losses, company had taken loans both fund and non fund based from Punjab National Bank in May 2010, but due to continuous losses have to restructure the limits in March 2012. The interest burden with stringent margins, are playing heavy on companys growth structure.

Also, Bankers have now recalled the loans, and classified the account as NPA (Non Performing Asset), though some clarifications are need to be answered on Bankers part, as criteria of NPA classification is not acceptable and true to the extent of policies and agreements.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, your Directors Confirmed that:

In the preparation of the Annual Accounts for the year ended 31st March, 2013, the applicable Accounting Standards read with requirements set out under Schedule VI of the Companies Act, 1956 have been followed and there are no material departures from the same;

We have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the State of Affairs and of profit / Loss of the Company for that financial year ended 31st March 2013;

We have taken proper and sufficient care for the maintenance of adequate Accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

We have prepared the Annual Accounts of the Company on a going concern basis.

HUMAN RESOURCE

Your company is of the firm opinion that efficiency of its employees plays a key role in achieving set goals and building competitive work environment which further leads to sound coordination and employees work like a team. Our various management programmes at different levels, ensures vibrant and motivated work force, which leads to achievement of our goals. The management and board shows gratitude towards its employees for having faith and never say die attitude towards accomplishment of defined goals.

ACKNOWLEDGEMENT

Your Directors would like to express their appreciation for assistance and co-operation received from the Bankers, Government Authorities, Customers, Vendors, Advisors, Members and all concerned. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company.

	By Order of the Board of Directors
	Sd/-
	Mukesh Jiwnani
Kota, August 30, 2013	Company Secretary