The Members
 
 We are delighted presenting the 16th Annual Report with Audited
 Statements of Accounts for the yea ended 31st March 2011.
 
 FINANCIAL RESULTS 
 
                                                  (Rupees in Lakhs)
 
 Particulars                                 2010-11        2009-10
                                             (for 12        (for 12
                                             months)        months)
 
 Gross Sales                                 7725.10        6445.22
 
 Earnings before Interest, 
 Depreciation, and Tax                        868.45         731.92
 
 (EBIDT)
 
 Finance Expenses                             373.11         243.11
 
 Depreciation                                 244.64         166.82
 
 Profit Before Tax (PBT)                      250.70         321.99
 
 Provision for taxation including 
 deferred tax and fringe                       36.33          77.77
 benefit tax
 
 Profit After Tax (PAT)                       214.37         244.23
 
 PERFORMANCE REVIEW:
 
 During the year under review your Company achieved sales of Rs.77.25
 Crores as against Rs.64.45 Crores in the previous year. The Company
 made a net profit after tax of Rs.214.37 Lakhs as against Rs.244.23
 Lakhs in the previous year.  DIVIDEND:
 
 Keeping the Company''s expansion and growth plans in mind, your
 Directors have decided not to recommend dividend for the year.
 
 ISO 9001: 2008:
 
 Your Company continues to maintain its Certification as per
 International Standards ISO 9001:20( Quality Management System and your
 Company is fully committed to continually improve upon th implemented
 QMS.
 
 DIRECTORS:
 
 Ms.P.Hymavathy, Mr.K.B.Prasanth Reddy and Mr. M.V.Rama Sastry have
 resigned from the Board of Directors of the Company your Board of
 Directors wishes to place on record its sincere appreciation for their
 valuable services rendered during their tenure as Directors of the
 company.
 
 Mr.Omkareswar Ganganboina is appointed as Additional Director during
 the year under review, further Mr.A.V.Ramaraju -Independent Director
 office is liable to retirement by rotation at this Annual General
 Meeting.
 
 EXTENSION OF TO HOLD AGM:
 
 The Board of Directors of your company inform you that your company has
 been granted permission from the office of the Registrar of Companies,
 Andhra Pradesh for extension of time of 1 month to hold Annual General
 Meeting for the financial year2010-2011.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT:
 
 In pursuance of Section 217(2AA) of the Companies Amendment Act, 2000
 your directors confirm
 
 i) That the directors in the preparation of the annual accounts the
 applicable accounting standards have been followed along with proper
 explanations relating to material departures.
 
 ii) That the directors had selected such accounting policies and
 applied them consistently and made judgments and estimates that are
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the company at the end of the financial year.
 
 iii) That the directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of this Act for safe guarding the assets of the company and
 for preventing and deleting fraud and other irregularities.
 
 iv) That the directors had prepared the annual accounts on the going
 concern basis.
 
 AUDITORS:
 
 Members are informed that M/s. K. Prahlada Rao & Co., Chartered
 Accountants firm was appointed as Statutory Auditors of the company and
 are eligible for reappointment as statutory auditor for the financial
 year 2011-2012.  They have furnished a certificate to the effect that
 their proposed re-reappointment, if made, would be within the limit
 prescribed under section 224(1B) of the Companies Act, 1956, and that
 they are not disqualified for such re-appointment within the meaning of
 Section 226 of the Companies Act, 1956. Your Board recommends their
 appointment.
 
 EMPLOYEE STOCK OPTION SCHEME:
 
 Farmax has introduced Employees Stock Option Scheme-2009 (Farmax ESOS -
 2009) to enable the employees of the Company to participate in the
 future growth and financial successes of the Company. As per the ESOS
 scheme 80% of the options have been granted and vested during 2009-2010
 and the balance 20% of options vesting &exercise period is due during
 2011-2012.
 
 SUBSIDIARY COMPANY:
 
 Your company has a subsidiary company in the name of Farmax
 International FZE in UAE, floated for the purpose to expand its
 products in overseas market and the Consolidated Accounts of your
 subsidiary are presented along with your company''s financials.
 
 Vide General Circular.No: 2/2011, Dated: 8th February 2011, the
 Ministry of Corporate Affairs, GOI has granted a general exemption to
 companies from attaching the balancesheet, profit and loss account and
 other documents referred to in section 212(1) of the Act in respect of
 its subsidiary companies, subject to fulfillment of the conditions
 mentioned therein. Accordingly, the said documents are not being
 attached with the Balancesheet of the company. A gist of the financial
 performance of the subsidiary company is contained in the report.The
 Annual Accounts of the subsidiary company is open for inspection by any
 member/ investor and the company will make availaible these documents/
 details upon request by any member of the company or to any investor of
 its subsidiary company who may be interested in obtaining the same.
 Further , the Annual Accounts of the subsidiary company will be kept
 open for inspection by any investor at the Companys registered office.
 
 Consolidated Financial statements are attached as required under
 listing agreement of the stock exchanges.
 
 PARTICULARS OF EMPLOYEES:
 
 No employee was in receipt of remuneration exceeding the limits
 prescribed under section 217(2A) of the Companies Act, 1956 and the
 rules framed there under, as amended to date.
 
 PUBLIC DEPOSITS:
 
 Your company has not accepted any deposits falling under Section 58A of
 the Companies Act, 1956 read with the Companies (Acceptance of
 Deposits) Rules 1975 during the year.
 
 INFORMATION UNDER SECTION 217 (1) fe) OF THE COMPANIES (DISCLOSURE OF
 PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES. 1988:
 
 A. Conservation of Energy
 
 Efforts are being made to control energy cost wherever possible even
 though energy cost forms only negligible proportion of total cost of
 manufacture of the products.
 
 B. Technology absorption
 
 1.  Research & Development
 
 Research & Development (R&D) center set-up in Hyderabad has been
 concentrating in developing products and production process/ system to
 improve the quality of the product at minimal cost. R&D enhancements,
 innovative process and production technology bring additional value to
 all our customers. R&D continually concentrate to improve products,
 service and processes using the effective quality management system and
 testing methodology, by implementing changes required to maintain the
 quality standard.
 
 2.  Technology absorption, adaptation, and innovation
 
 Efforts in brief, made towards technology absorption, adaptation and
 innovation: Installation of sophisticated instrument for R&D, testing
 and process control measures. Technology has been fully absorbed and
 adapted for all types of products of the Company.
 
 Benefits derived as a result of the efforts, e.g.: product improvement,
 cost reduction, and product quality maintenance etc.
 
 (a) Improvement of designs.
 
 (b) Import Substitution.
 
 (c) Cost Reduction.
 
 (d) Product Quality Maintenance & Improvement.
  
 (e) New products development.
 
 CORPORATE GOVERNANCE:
 
 A separate section on Corporate Governance and a certificate from the
 statutory auditors of the Company regarding compliance of the
 conditions of corporate governance as stipulated in Clause 49 of the
 Listing Agreement entered into with the Stock Exchanges forms a part of
 this Annual Report.
 
 MANAGEMENT DISCUSSION AND ANALYSIS:
 
 A separate section on Management Discussion and Analysis as stipulated
 under Clause 49 of the Listing Agreement entered into with the Stock
 Exchanges forms a part of this Annual Report.
 
 ACKNOWLEDGMENTS:
 
 Your Directors wishes to acknowledge the invaluable support extended to
 the company by the Central Government, State Governments, Statutory
 Authorities and Company''s Bankers . Your Directors also wish to place
 on record their sincere thanks and appreciation for the continuing
 support of Investors, Dealers, Business Associates and Employees in
 successful performance of the company during the year.
 
                                                  BY ORDER OF THE BOARD
 
 Hyderabad
 
 27 September 2011.                                      Sd/-
                                                  M. SRINIVASA REDDY
                                           Chairman & Managing Director