J J Exporters Ltd

Dear Shareholders

Your Directors have pleasure in presenting the Thirty-Eighth Annual Report, togetherwith the Audited Accounts of the Company for the year ended 31st March, 2011.

FINANCIAL RESULTS

BUSINESS AND PERFORMANCE

The sales revenue was up at Rs 6507.59 lacs during the year as compared to Rs 5955.32Lacs during the previous year, the profit before depreciation, tax and extra ordinary itemwas down at Rs 63.77 lacs as compared to Rs 342.47 lacs during the previous year. Steepincrease in the prices of raw material and higher cost were the main reasons for lowerprofit during the year. The net loss after depreciation and tax was up at Rs 518.64 lacsas compared to Rs 6.66 lacs in the previous year.

CURRENT YEAR'S OUTLOOK

The performance of the Company in the current year would depend on the behaviour of theprices of raw material in China. The Company is undertaking certain cost reductionmeasures. The Company is also exploring the possibility of manufacturing and exportingvarious types of blended fabric. These should have some positive impact on the working ofthe Company in the current year. Your Directors hope to achieve better performance in thecurrent year.

OVERSEAS SUBSIDIARIES AND JOINT VENTURE

The performances of Company's foreign subsidiaries were satisfactory during the year.

RETAIL SHOWROOM

The performance of Company's retail showroom 'ONSET' at Kolkata was satisfactory duringthe year. However, the performance of Delhi store was not upto the mark. Your Directorshave, therefore, decided to close the Delhi store.

DIVIDEND

Owing to loss, your Directors do not recommend any dividend for the year.

FOREIGN EXCHANGE

Claims amounting to Rs 14.03 crores made by certain banks during the previous years inrespect of derivative transactions entered into by the Company during the financial year2007-08 remain un-provided as the management has been advised that these transactions wereillegal. The matter is subjudice.

Although there was no material change in the status of the claim receivable fromCitibank and ICICI Bank amounting to Rs 357.72 lacs, provision for entire receivableamount was created in the books during the year as a matter of prudence and has been shownunder the 'Extra Ordinary Item'.

DIRECTORS

Mr. R K. Singhi and Mr. Laxmi Jhunjhunwala retire by rotation and being eligible offerthemselves for re-appointment at the ensuing Annual General Meeting. Mr. S. N.Jhunjhunwala and Mr. Rajiv Jhunjhunwala were re-appointed as Whole Time Directors,designated as Executive Chairman and Vice Chairman respectively of the Company during theyear.

DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956 your Directors herebyconfirm that:

i) in the preparation of the Annual Accounts, the applicable accounting standards havebeen followed along with proper explanation relating to material departures, if any;

ii) having selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the Financial Year as at 31st March,2011 and of the Profit and Loss for the year ended on that date;

iii) proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act, 1956, for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities, if any, hasbeen taken;

iv) Annual Accounts has been prepared on a going concern basis.

CORPORATE GOVERNANCE

Your Company has consistently been complying with the Corporate Governance Codeprescribed by SEBI and a detailed report on Corporate Governance together with aCertificate of Compliance from the statutory auditors, as required by Clause 49 of theListing Agreement, forms a part of this Annual Report.

AUDITORS

M/s. Salarpuria Jajodia & Co., Chartered Accountants, Kolkata, bearing RegistrationNo.302111E, retire at the conclusion of the ensuing Annual General Meeting and haveexpressed their willingness to be re-appointed. They have confirmed that theirreappointment, if made, would be covered within the ceiling specified under Section 224(1B) of the Companies Act, 1956.

COST AUDITORS

Pursuant to the Directives of the Centra! Government under the provisions of Section233B of the Companies Act, 1956, qualified Cost Auditors have been appointed to conductcost audit relating to the products of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING ANDOUTGO

A) Conservation of energy and technology absorption:

The particulars in respect of conservation of energy and technology absorption aregiven in Annexure 'A' forming part of this report pursuant to Section 217(1)(e) of theCompanies Act, 1956, read with the Companies (Disclosure of Particulars in the Report ofBoard of Directors) Rules, 1988.

B) Foreign Exchange earnings and outgo:

The information is contained in Item No. 19 of Schedule No.'P' in notes on accounts.INVESTMENTS

The details of investments are given in Schedule 'E' annexed to the annual accounts ofthe Company.

SUBSIDIARY COMPANIES

The Directors of Company's Subsidiary, Tanushree Silks Ltd. made an application withappropriate authorities u/s.560 of The Companies Act, 1956 to strike off the name of theCompany. The application has since been approved and the Company has been struck off fromthe records of the Registrar of Companies. The amount of Company's investment amounting toRs 18,00,008/-(Rupees Eighteen lacs eight only) in the said Subsidiary was adjusted withthe provision created in earlier year. The amount of outstanding loan due from the saidsubsidiary amounting to Rs 14,49,184/- was written off during the year as the same hadbecome irrecoverable.

The particulars, as required under Section 212 of the Companies Act, 1956, in respectof Company's subsidiaries viz Tanushree Silks Ltd., Spin International INC., OOO JJ Homeand J. J. Creations S.A. are annexed herewith.

The Government of India vide Circular No. 2/2011 dt. 08.02.2011 has granted generalexemption to companies from annexing the accounts of its subsidiary companies subject tofulfillment of certain conditions. Necessary financial details in respect of eachsubsidiary as stipulated in the said exemption letter are given in a separate statementattached elsewhere in the report.

Your Directors undertake that annual accounts of the subsidiary Companies and therelated detailed information will be made available to the holding and subsidiary Companyinvestors seeking such information at any point of time. The annual account of thesubsidiary Companies will also be kept for inspection by any investor at its head officeand that of the subsidiary company concerned.

FIXED DEPOSITS

The Company has not accepted any Fixed Deposits during the year.

A) Industry Structure & Developments: The Company manufactures andexports silk fabrics, garments and made-ups. Silk Fabrics comprise the bulk of Company'sproduct basket which are used for home-furnishings and apparel in developed countries likeUSA and countries in Europe like France, Germany, UK, Italy, Finland, Russia and also inJapan, Australia, etc. which is used mainly by high-end customers. The Company iscurrently exploring the possibility of exporting various kinds of blended fabrics.

B) Opportunities & Threats: The Company's product is largely dependenton consumer spending. The Company has a loyal customer base and is able to pass throughthe recession on the basis of continued support from these customers duly supported byin-time supply of high quality products. The Company is taking all round measures tominimise cost through infusion of latest technology and cost reduction exercise.

C) Segmentwise Performance: The Company has only single product namelyTextiles.

D) Outlook: The global economy Is showing the signs of revival but at a veryslow pace.

E) Risk & Concern: Silk fabrics being a luxury item carry significantrisk linked to consumer confidence and spending pattern.

Any further increase in the price of raw material and the uncertainties in the worldeconomy may have some negative impact. However, the Company is making all-round efforts tocontain the negative impact through infusion of state of the art technology and costreduction measures.

The Company's foreign exchange exposure is mainly in US$ in which it imports rawmaterials and exports most of the finished goods. The Company continuously reviews itsexposure and takes steps to hedge it. The Company is taking adequate insurance coverage ofits assets at various locations.

F) Internal Control System & Adequacy: The Company has adequate internalcontrol systems to ensure safeguarding of assets against unauthorised use and to providethat all transactions are authorised, recorded and reported correctly. The Company has asystem of periodical Internal Audit,

G) Discussion on financial performance with respect to operational performance: Thedetails of the financial performance of the Company are available in the Balance Sheet,Profit & Loss Account and other financial statements appearing separately.

H) Human Resources: The industrial relations were cordial throughout theyear. The Directors place on record the excellent contribution made and the co-operationextended by the employees at all levels of the organisation.

There was no employee employed during the financial year or a part of the financialyear who was in receipt of remuneration for that year or any part of that year at a rateas prescribed under Section 217(2A) of the Companies Act, 1956, read with the Companies(Particulars of Employees) Rules, 1975, as amended.

I) Cautionary Statement: Certain Statements in the Management Discussion andAnalysis describing the Company's view about the industry, expectations/ predictions,objectives etc. may be forward looking within the meaning of applicable laws andregulations. Actual results may differ from those implied therein. Important factors thatcould make a difference include raw material availability and prices demand and pricing inthe Company's principal markets, changes in Government regulations, tax regimes,industrial relations and economic developments within India and countries within which theCompany conducts its business and other incidental factors.

ACKNOWLEDGEMENTS

Your Directors place on record their deep appreciation of the continued assistance andco-operation extended to the Company by its customers, investors, bankers, Governmentagencies and its dedicated band of employees.

To The Directors' Report

Additional information as required under section 217(1)(e) of the Companies Act, 1956read with Companies (Disclosure of Particulars in the Report of Directors) Rules,1988

CONSERVATION OF ENERGY

BENEFITS DERIVED AS A RESULT OF RESEARCH & DEVELOPMENT

relating to subsidiary companies

i) US$ have been converted to INR at the exchange rate prvaiiing on 31st March, 2011 (1US$ = Rs 44.42)

ii) RBLS have been converted to INR at the exchange rate prvaiiing on 31 st March, 2011(1 RBLS = Rs 1.57)

iii) EURO have been converted to INR at the exchange rate prvailing on 31st March, 2011(1 EURO = Rs 62.67).

*Strike off u/s.560 of the Companies Act, 1956, during this year.