J J Exporters Ltd Management Discussions.

In view of diversification of business, constant monitoring regarding quality control of all products of the company is maintained every moment. In competition with other global players, our company proceeded with reasonable price and genuine items. As a result the turnover of the company increased substantially as compared to earlier years. The export demand was also steady throughout the year. In tea, domestic consumption is increasing year by year. The new extension work became a continuous activity at our Iringmara Tea Estate. The production at our tea estate is increasing gradually from our own greenleaf together with the purchased leaf from other gardens. In future years our tea estate will be one of the giant producer garden in that area of Assam. We have started packet tea brand "CHEERS" and are getting fair response in the market. We have also started Government Organisation supplies namely Central Police Canteen of our packet tea as dry ration item.

Segment wise Report:

Financial year 2015-16, our segment wise sales stood as under:

Category Food Soap Cosmetics Deo/Sprays Others
Revenue 38% 26% 20% 8% 8%

For international segment, we have exported our products in more than 39 countries as on date. The company is striving hard to expand its geographical base by exporting to many more countries in future.

Outlook:

There are some trends which are emerging in the markets. Especially in the developed markets, due to the continuing recessionary trends, the consumer spending is cautious with higher value demands which are giving rise to high competitive intensity in those markets. There is also a continual shift of consumers towards health, wellness and convenience segments. There is also a growing trend for more premiumised products in some markets. We expect these challenges and trends to remain for some time to come also. We expect the retail environment to be very competitive with aggressive promotions to sustain growth. We also expect the significance of modern trade to increase over traditional trade in the developing markets exacerbating the competitive environment. The Company continues to constantly strive to meet these challenges with a continuous support to brands, category expansion, innovation and cost rationalization.

Internal Control System and Adequacy:

The company has proper and adequate system of Internal Controls which is commensurate with the size and the nature of business, to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposal and commercial transactions are authorised, recorded and reported correctly. The internal control is supplemented by an extensive program of internal and external audits. The company accords greatest importance to the security of its information assets and has the requisite security controls and checks. Adequate storage and back-up system is maintained to ensure security and availability of data at all times.

Strengths:

Lykis is an existing brand, experienced in operations and management of FMCG products. Operations are handled by a strong experienced management and professional team and also there is a strong technical and development team for support. Moreover, the company launched packet tea brand "CHEERS" and is getting fair response in the normal domestic market, malls and departmental stores.

Risk and Concern:

Fast expansion in various geographical locations may require more exposure in management and control.

Threats:

Since it is a growing industry, there is a threat of competition from the other players who might try to create an unhealthy practice of competition by compromising on the quality and pricing. We have an established team of professionals to handle the operations and are in the process of hiring more such kinds of professionals.

Opportunities:

FMCG industry is a growing industry in India. FMCG is indigenous to India and because of its pre- eminence as a foreign exchange earner. Indian FMCG industry represents nearly 2.5% of the countrys GDP.

Material Development in Human Resource:

Employees are the valuable assets and the strength of an organisation in its growth, prosperity and development. Your Company has a team of qualified and dedicated personnel who have contributed to the growth and progress of the Company. Necessary training is being imparted to the employees and various seminars and workshops are being conducted to continuously hone their skills.

Your Company is continuously striving to create appropriate environment, opportunities and systems to facilitate identification, development, and utilization of their full potential and inculcating a sense of belongingness.

Corporate Governance:

The new Companies Act, 2013 and SEBI (Listing Agreement and Disclosure Requirement) Regulation, 2015 have strengthened the governance regime in the country. Your Company is in compliance with the governance requirements provided under the new law. The Company has constituted the new Board Committees and has in place all the statutory Committees as required by the law. Details of Committees are given in the Corporate Governance Report.

During the year, your Company has adopted new policies such as Document Retention Policy, Policy of Materiality for Disclosure of Events or Information etc. These policies are available on the website of the Company at http://www.lykisgroup.com/invester-relation.html.

The SEBI (Listing Agreement and Disclosure Requirement) Regulations, 2015 also provided for formulating the Code of Conduct for members of the Board and Senior Management, Codes of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information and Code of Conduct to regulate, monitor and report trading by its employees and other connected persons. Your Company has formulated the above codes and abided with the regulations.

Statutory Compliance:

A declaration is made at each Board Meeting regarding Compliance with provisions of various statutes after obtaining confirmation from all the units of the Company. The Company Secretary ensures compliance with the SEBI regulations and provisions of the Listing Agreement.

Cautionary Statement:

Certain statements made in this report relating to the Companys objectives, projections, outlook, expectations, estimates, among others may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ from such expectations, projections etc., whether express or implied. Several factors could make a significant difference to the Companys operations. These include climatic conditions, economic conditions affecting demand and supply, government regulations and taxation, natural calamity, currency rate changes, among others over which the Company does not have any direct control.