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Directors Report of Eveready Industries India Ltd.

Mar 31, 2016

The Directors are pleased to present the Annual Report, together with the Audited Financial Statements of your Company for the financial year ended March 31, 2016.

FINANCIAL RESULTS

The Financial Results of the Company are summarised below:

Rs. Crores

2015-16 2014-15

Net Sales 1,322.52 1,277.76

Other Income from operations 0.78 1.16

Total Income from Operations 1,323.30 1,278.92

Total Expenditure adjusted for increase/ decrease of stocks 1,202.81 1,155.24

Profit from Operations before Other Income, Depreciation, Finance Costs and Taxation 120.49 123.68

Other Income 8.10 3.90

Profit from Operations before Depreciation, Finance Costs and Taxation 128.59 127.58

Depreciation 30.59 31.98

Interest and Exchange Fluctuation 30.50 33.60

Profit before Taxation 67.50 62.00

Provision for Taxation 16.85 12.97

Profit after Taxation 50.65 49.03

Balance brought forward from previous year (0.97) (32.18)

Depreciation on transition to Schedule II of the Companies Act, 2013 - (17.82)

Amount available for appropriation 49.68 -

Appropriations :

- Interim Dividend (already paid) 7.27 -

- Tax on Interim Dividend 1.48 -

- Proposed Final Dividend 7.27 -

- Tax on proposed Final Dividend 1.48 -

- General Reserve - -

Balance carried forward to Balance Sheet 32.18 (0.97)

Net sales for the year were higher by 3% over the previous financial year. Profit before Depreciation, Interest and Taxation (PBDIT) was higher by 0.8% at Rs. 128.59 Crores (previous year Rs. 127.58 Crores) There were no exceptional items (previous year Nil). With depreciation of Rs. 30.59 Crores (previous year Rs. 31.98 Crores), a decrease in interest / exchange fluctuation charge of Rs. 30.50 Crores (previous year Rs. 33.60 Crores) and a charge of Rs. 0.47 Crores (included in other expenses) consequent to the adoption of a change in accounting policy in respect of hedge accounting (refer Note 24.21 to the accounts for the year under review) (previous year Nil), Profit after Taxation stood at Rs. 50.65 Crores for the year as against a profit of Rs. 49.03 Crores in the previous year.

DIVIDEND

During the year under review, your Directors had declared and paid an interim dividend of Rs. 1.00 per equity share on 7,26,87,260 fully paid up equity shares of Rs. 5/- each, being 20% on the paid up value of the equity shares of the Company for the year ended March 31, 2016. Additionally, your Directors are pleased to recommend, for approval of the shareholders, a final dividend of Rs. 1.00 per equity share on 7,26,87,260 fully paid up equity shares of Rs. 5/- each, being 20% on the paid up value of the equity shares of the Company for the year ended March 31, 2016 (previous year - Nil), which if approved at the ensuing Annual General Meeting will be paid to all eligible members whose names appear in the register of members on July 25, 2016 or appear as beneficial owners as per particulars furnished by the Depositories on July 18, 2016.

TRANSFER TO RESERVES

There was no transfer to General Reserves during the year under review.

OPERATIONAL REVIEW & STATE OF THE COMPANY''S AFFAIRS

Batteries & Flashlights

The battery market grew at a healthy pace, estimated at 10%. However, the organised players could not capture this growth, due to the market being disturbed by poor quality products imported from China at dumped prices. As a result, the Company''s volume and value both registered a marginal de-growth during the year.

The market share position of the major players remained unaltered during the year under review, with your Company''s share being estimated at 50%.

The flashlights market was subdued during the year due to an erratic monsoon, the period during which flashlights sales peak and proliferation of cheap flashlights of poor quality by the unorganised and gray market players. Your Company''s volumes for flashlights de-grew by around 18% while value turnover de-grew by 14.5% as compared to that of the previous year.

Your Company''s share of the organised flashlight market was maintained at 75%. However, this has to be seen in the perspective of a large unorganised market, which is estimated at nearly the same size as the organised market.

The manufacturing operations of your Company in these product categories continued to focus on total quality management, safety, energy conservation and cost control. This helped your Company in achieving efficiency in the manufacturing function.

Operations at the manufacturing facilities at Taratala Road, Kolkata have been relocated to facilities at Transport Depot Road, Kolkata for purposes of consolidation and smoother operations.

Your Company has commenced planning of a project for manufacturing facilities at Assam for which the leasehold land has been allotted to the Company. This project will provide tax reliefs applicable to the area.

Lighting & Electrical Products

Your Company had diversified to the marketing of lighting and electrical products in the recent past. These products found excellent fit to the Company''s brands

- Eveready and PowerCell, which are synonymous with portable energy and lighting. There was also synergy in these products with the existing distribution network of your Company.

At the point of entry to this diversification initiative, the leading products were Compact Fluorescent Lamps (CFL) and General Lighting Service Lamps (GLS). However, towards the end of the previous year, your Company had launched Light Emitting Diode (LED) bulbs which added significant technology edge to the product basket being offered by the Company.

While the Company''s distribution in general trade and modern retail provided a good platform to enter this category, further expansion is underway to tap the exclusive electrical trade. Your Company successfully bagged an Energy Efficiency Services Ltd. (EESL) tender worth Rs. 48.31 Crores - for supply of LED bulbs as part of the scheme to light up consumer homes at affordable prices.

The Company continued to invest significantly towards brand building in the category during the year with a view to enhance brand salience.

Net sales from this category for the current year stood at Rs. 276.42 Crores - and it is expected that this category will provide significant turnover growth in the years to come.

Packet Tea

The packet tea business continued with its steady performance through leveraging of the distribution network of the Company. Current share of the market stands at 1 - 5% in the various markets of the country. The business continues to be steady and profitable. While relatively small in the overall turnover, it provides an important option to distribution in many areas. Sales turnover for the current year stood at Rs. 72.16 Crores.

New Products

Your Company is committed to bringing new Products to its selling basket with a view to improving turnover and profitability. Towards this, your Company diversified its product portfolio into a new product range, viz., small home appliances. The launch of appliances was initiated close to the end of the year. Barring unforeseen circumstances, your Company is hopeful that this product category will offer handsome revenue growth and profitability in the future.

Prospects

Battery market is enjoying healthy market growth. Currently some disturbance is being experienced on account of poor quality imports at dumped prices. However, steps have been initiated to stem this within a reasonable time frame. Irrespective of that, your Company is also confident that it will be able to capture growth in this market, riding on its obvious strengths of premium quality offering, brand and distribution. The outlook on battery thus remains positive.

Flashlight market is currently undergoing disturbance due to proliferation of cheap flashlights of poor quality by unorganised gray market players. During the year, it was also affected due to erratic monsoon. However it is expected that the market will revert to its usual growth and your Company will be able to take advantage of the same.

Prospects are promising in the lighting and electrical products business. This business has become a key focus area for the Company and an avenue for growth. Your Company has been one of the first to offer LED bulbs of high quality to the Indian consumers at affordable prices. This range of new generation bulbs has been very well accepted by the market and will enhance the Company''s efforts towards a fruitful diversification in this area. The outlook is thus upbeat - with potential for both growth and profitability.

FINANCE

Tight control was kept over the finances of your Company. Your Company could reduce its finance cost by 9% through judicious working capital management and operational efficiencies. Your Company remains focused to reduce its borrowings, which stood at Rs. 187.52 Crores at the end of the year.

Your Company met its financial commitments in servicing debt and repayment thereof in a timely manner. Capital expenditure programme was fully met.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments, affecting the financial position of the Company, between the end of the financial year of the Company i.e. March 31, 2016 to which the financial statements relate and the date of this Report.

SUBSIDIARIES & CONSOLIDATED FINANCIAL STATEMENTS

The Company''s subsidiary at Hong Kong, Everspark Hong Kong Private Limited registered a turnover of Rs. 39.43 Crores during the current year (Rs. 52.36 Crores during FY 2014-15). However, the Company did not earn any profits during the year.

Another subsidiary, Litez India Ltd. registered a turnover of Rs. 0.03 Crores during the current year (Rs. Nil during FY 2014-15). However, the Company did not earn any profits during the year.

A Statement in Form AOC -1 containing the salient features of the Subsidiary Companies is attached to the Financial Statements in a separate section and forms part of this Report. The separate audited accounts of the Subsidiary Companies are available on the website of the Company.

The Annual Report includes the audited Consolidated Financial Statements, prepared in compliance with the Companies Act, 2013 and the applicable Accounting Standards, of the applicable subsidiaries. The Consolidated Financial Statements shall be laid before the ensuing 81st Annual General Meeting of the Company along with the laying of the Standalone Financial Statements of the Company.

The liquidation of the Company''s subsidiary Novener SAS in France (shareholding interest -82%) set up for the purposes of acquiring a controlling interest in the Uniross Group has been ordered by a French Court judgment during the year under review. The relevant companies in the Uniross Group had also been ordered for liquidation in 2012-13 and are under external administration. Accordingly, Novener SAS has ceased to be the Company''s subsidiary and thus your Company does not require to consolidate the accounts of Novener SAS (including its subsidiaries and step down subsidiaries) pertaining to the Uniross Group.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of the Companies (Accounts) Rules, 2014, forms a part of this Report as Annexure 1.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR Policy formulated by your Company is available on the website of the Company (http://www.evereadyindia.com/investor-relations/pdf/csr-policy-14. pdf). This policy, encompasses the Company''s philosophy for delineating its responsibility as a corporate citizen and lays down the guidelines and mechanism for undertaking socially useful programmes for welfare & sustainable development of the community at large. The Annual Report on CSR activities to be included in the Report, containing the composition of the CSR Committee, disclosure of the contents of the CSR Policy and the initiatives taken, as well as the expenditure on CSR activities, forms a part of this Report as Annexure 2.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 of the Companies Act, 2013, the Directors state that:

1. in the preparation of the annual accounts for the financial year ended March 31, 2016, the applicable accounting standards had been followed with no material departures;

2. 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 and of the profit of the Company for that period;

3. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. the Directors had prepared the annual accounts on a going concern basis;

5. the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

6. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DIRECTORS

Mr. Suvamoy Saha will retire by rotation at the forthcoming Annual General Meeting, and being eligible, offers himself for re-appointment.

On a Reference Application made by the Central Government to the Company Law Board (CLB) under Section 408 of the Companies Act, 1956, the CLB, by an order dated December 20, 2004 directed the Central Government to appoint three Directors on the Company''s Board for three years. As the CLB''s order suffers from various legal infirmities, the Company, based on legal advice, has challenged this order of the CLB before the Hon''ble High Court at Calcutta, which has, by an interim order, stayed the operation of the CLB''s order. The stay is continuing.

DECLARATIONS BY INDEPENDENT DIRECTORS

Necessary declarations from all the Independent Directors of the Company, confirming that they meet the criteria of independence as prescribed, have been received.

REMUNERATION POLICY

The Remuneration Policy for selection and appointment of Directors, Senior Management and their remuneration, including the criteria for determining qualifications, positive attributes, independence of a Director and other requisite matters as approved by your Company forms a part of this Report as Annexure 3.

BOARD EVALUATION

The Nomination & Remuneration Committee of the Board of Directors had laid down the criteria for evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination &, Remuneration and Stakeholders Relationship and Corporate Social Responsibility Committees. Annual Performance Evaluations as required, have been carried out. The statement indicating the manner in which formal annual evaluation of the Directors (including Independent Directors), the Board and Board level Committees is given in the Corporate Governance Report, which forms a part of this Report.

MEETINGS

The Board meets regularly to discuss and decide on various matters as required. Due to business exigencies, certain decisions are taken by the Board through circulation from time to time. During the year, five (5) Board Meetings were convened and held. Additionally, several committee meetings as well as Independent Directors'' meeting(s) were also held. The details of the Meetings are given in the Corporate Governance Report which forms a part of this report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

COMMITTEES OF THE BOARD

The details with respect to the compositions, powers, roles and terms of reference etc. of relevant Committees of the Board of Directors are also given in the Corporate Governance Report which forms a part of this Report. All recommendations made by the Audit Committee during the year were accepted by the Board.

EMPLOYEE RELATIONS

One of your Company''s key strengths is its people. Relations with employees remained cordial and satisfactory. Your Board would like to place on record its appreciation of employees for their contributions to the business.

Your Company believes in a system of Human Resource Management which rewards merit based performance and playing an active role in improving employee skills. Actions during the year under review were supportive of this policy. Long-term wage settlements were signed for factories at Noida.

The details of the ratio of the remuneration of each Director to the median employee''s remuneration and other particulars and details of employees in terms of Section 197(12) read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms a part of this Report as Annexure 4. The details of the employee''s remuneration as required under the said section and Rule 5(2) & 5(3) of the said Rules forms a part of this Report and are available at the Registered Office of the Company during working hours before the Annual General Meeting and shall be made available to any Member on request.

STATUTORY AUDITORS

Messrs. Deloitte Haskins & Sells, Chartered Accountants (Firm''s Registration No. 302009E), hold office as Auditors till the conclusion of the forthcoming Annual General Meeting and, being eligible, offer themselves for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment.

COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, your Directors, have appointed M/s. Mani & Co., Cost Accountants, Registration No. 00004, Ashoka, 111 Southern Avenue, Kolkata 700 029, (being eligible for the appointment), to audit the cost accounts of the Company for the financial year ending March 31, 2017. The remuneration payable to the Cost Auditors for the said year is being placed for ratification by the Members at the forthcoming Annual General Meeting.

SECRETARIAL AUDITOR

Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit of the Company for the financial year 2015-16 was conducted by M/s MKB & Associates, a firm of Company Secretaries in Practice. The Secretarial Audit Report forms a part of this Report as Annexure 5.

AUDITORS'' REPORT

There are no Audit Qualifications /Reservations / Adverse Remarks in the Statutory Auditors Report and in the Secretarial Audit Report as annexed elsewhere in this Annual Report.

INTERNAL FINANCIAL CONTROL SYSTEMS & THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The internal financial controls are adequate and are operating effectively so as to ensure orderly and efficient conduct of the business operations. The Statutory Auditors has also given an unmodified opinion on the internal financial controls on financial reporting in their Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements and forms a part of this Report.

PARTICULARS OF CONTRACTS/ARRANGEMENTS/TRANSACTIONS WITH RELATED PARTIES

Related Party Transactions entered into, during the year under review, were on arm''s length basis and in the ordinary course of business for the operational and administrative benefits of the Company. There were no contracts/ arrangements/transactions, with related parties which could be considered as material and which may have a potential conflict with the interest of the Company at large. Accordingly, no contracts/arrangements/transactions are being reported in Form AOC-2. Details on related party disclosures are further given in the Corporate Governance Report which forms a part of this Report.

RISK MANAGEMENT

Your Directors have approved various Risk Management Policies. All material risks faced by the Company are identified and assessed by the Risk Management Steering Committee. For each of the risks identified, corresponding controls are assessed and policies and procedures are put in place for monitoring, mitigating and reporting the risks on a periodic basis.

VIGIL MECHANISM

The Vigil Mechanism/Whistle Blower Policy as adopted by your Company has been posted on the website of the Company. None of the Company''s personnel have been denied access to the Audit Committee.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT 9 forms a part of this Report as Annexure 6.

OTHER DISCLOSURES

During the year under review:

a. There were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

b. Your Company has not accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

c. There were no significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

d. There were no changes in the share capital or the nature of business or the Key Managerial Personnel of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT AND REPORT

ON CORPORATE GOVERNANCE.

A Management Discussion and Analysis Report and a Report on Corporate Governance are presented in separate sections, forming part of the Annual Report.



For and on behalf of the Board

Kolkata May 06, 2016

B. M. Khaitan

Chairman


Mar 31, 2015

Dear Members,

The Directors are pleased to present the Annual Report, together with the Audited Financial Statements of your Company for the financial year ended March 31, 2015.

FINANCIAL RESULTS

The Financial Results of the Company are summarised below:

Rs. Crores

2014-15 2013-14

Net Sales 1,277.76 1,152.34

Other Income from operations 1.16 1.07

Total Income from Operations 1,278.92 1,153.41

Total Expenditure adjusted for increase/ 1,155.24 1,062.82 decrease of stocks

Profit from Operations before Other 123.68 90.59

Income, Depreciation, Finance Costs and Taxation Other Income 3.90 8.73

Profit from Operations before 127.58 99.32

Depreciation, Finance Costs and Taxation

Depreciation 31.98 41.83

Interest and Exchange Fluctuation 33.60 41.00

Profit before Taxation 62.00 16.49

Provision for Taxation 12.97 2.89

Profit after Taxation 49.03 13.60

Balance brought forward from (32.18) (41.56) previous year

Depreciation on transition to Schedule II (17.81) - of the Companies Act, 2013

Balance carried forward to Balance (0.96) (32.18)

Sheet

Net sales for the year were higher by 11% over the previous financial year. Profit before Depreciation, Interest and Taxation (PBDIT) was higher by 36.5% at Rs. 127.58 Crores as compared to Rs. 99.32 Crores in the previous year. With depreciation of Rs. 31.98 Crores (previous year Rs. 41.83 Crores), a decrease in interest / exchange fluctuation charge of Rs. 33.60 Crores (previous year Rs. 41.00 Crores) and there being no exceptional items (previous year Nil), Profit after Taxation stood at Rs. 49.03 Crores for the year as against a profit of Rs. 13.60 Crores in the previous year. Net accumulated losses stood at Rs. 0.96 Crores, after setting of the previous losses and depreciation on transition to Schedule II of the Companies Act, 2013, against the profits for the year.

TRANSFER TO RESERVES

There was no transfer to General Reserves during the year under review.

DIVIDEND

Consequent to the amendment to Section 123 of the Companies Act, 2013, by the Companies (Amendment) Act, 2015, becoming effective from May 29, 2015, the Company became unable to declare the dividend, for the year ended March 31, 2015 as recommended earlier, on May 11, 2015, as the Company has net accumulated losses as stated above.

In order to be compliant with the said Amendment, your Directors have, on July 2, 2015, revised the previously approved standalone financial statements solely insofar as it relates to the reversal of the previously proposed final dividend (as recommended earlier on May 11, 2015) and dividend distribution tax thereon.

Accordingly your Directors do not recommend any dividend for the year ended March 31, 2015.

OPERATIONAL REVIEW & STATE OF THE COMPANY''S AFFAIRS Batteries & Flashlights

The battery market grew at a healthy pace, estimated at 10%. However, the organised players could not capture this growth, due to the market being disturbed by poor quality products imported from China at dumped prices. As a result your Company''s volumes in batteries remained flat. There was however a value growth of 12% in turnover contributed by the price increases taken by the Company during the year.

The market share position of the major players remained unaltered during the year under review, with your Company''s share being estimated at 52%.

The flashlights market was subdued during the year due to an erratic monsoon, the period during which flashlights sales peak. Your Company''s volumes for flashlights de-grew by 1% - but value turnover remained at par with that of the previous year, on account of products being sold at higher prices.

Your Company''s share of the organised flashlight market was maintained at 75%. However, this has to be seen in the perspective of a large unorganised market, which is estimated at nearly the same size as the organised market.

The manufacturing operations of your Company in these product categories continued to focus on total quality management, safety, energy conservation and cost control. This helped your Company in achieving efficiency in the manufacturing function.

Electrical & Lighting Products

Your Company had diversified to the marketing of electrical & lighting products in the recent past. These products found excellent fit to the Company''s brands - Eveready and PowerCell, which are synonymous with portable energy and lighting. There was also synergy in these products with the existing distribution network of your Company.

At the point of entry to this diversification initiative, the leading products were Compact Fluorescent Lamps (CFL) and General Lighting Service Lamps (GLS). However, towards the end of the year under review, your Company launched the new generation Light Emitting Diode (LED) bulbs, which added significant technology edge to the product basket being offered by the Company.

While the Company''s distribution in general trade and modern retail provided a good platform to enter this category, further expansion is underway to tap the exclusive electrical trade.

The Company has also invested significantly towards brand building in the category during the year with a view to enhance brand salience.

Net sales from this category for the current year stood at Rs. 189.30 Crores - and it is expected that this category will provide significant turnover growth in the years to come.

Packet Tea

The packet tea business continued with its steady performance through leveraging of the distribution network of the Company. Current share of the market stands at 1 - 5 per cent in the various markets of the country. The business continues to be steady and profitable. While relatively small in the overall turnover, it provides an important option to distribution in many areas. Sales turnover for the current year stood at Rs. 76.22 Crores.

Prospects

Battery market is enjoying healthy market growth. Currently some disturbance is being experienced on account of poor quality imports at dumped prices. However, steps have been initiated to stem this within a reasonable time frame. Irrespective of that, your Company is also confident that it will be able to capture growth in this market, riding on its obvious strengths of premium quality offering, brand and distribution. The outlook on battery thus remains positive.

Flashlights went through a somewhat modest year due to erratic monsoon. However it is expected that the market will revert to its usual growth and your Company will be able to take advantage of the same.

Prospects are promising in the Electrical and Lighting products business. This business has become a key focus area for the Company and an avenue for growth. Your Company has been one of the first to offer LED bulbs of high quality to the Indian consumers at affordable prices. This range of new generation bulbs has been very well accepted by the market and will enhance the Company''s efforts towards a fruitful diversification in this area. The outlook is thus upbeat - with potential for both growth and profitability.

FINANCE

Tight control was kept over the finances of your Company. Your Company could reduce its finance cost by 18% through judicious working capital management and operational efficiencies. Your Company remains focused to reduce its borrowings, which stood at the end of the year at Rs. 207 Crores.

Your Company met its financial commitments in servicing debt and repayment thereof in a timely manner. Capital expenditure programme was fully met.

MATERIAL CHANGES & COMMITMENTS

There are no material changes and commitments, affecting the financial position of the Company, between the end of the financial year of the Company i.e. March 31, 2015 and the date of this Report.

SUBSIDIARIES & CONSOLIDATED FINANCIAL STATEMENTS

The Company''s subsidiary at Hong Kong, Everspark Hong Kong Private Limited registered a turnover of Rs. 52.40 Crores during the current year (Rs. 1.60 Crores during FY 2013-14). However, the Company did not earn any profits during the year.

The other subsidiary being Litez India Ltd. was non-operational during the year under review.

The Company''s subsidiary Novener SAS in France (shareholding interest -82%) set up for the purpose of acquiring a controlling interest in the Uniross Group was put under liquidation in the previous year subsequent to the liquidation of the key entities of the Uniross Group having been ordered by a French Court judgment and the relevant companies having been put under external administration, in FY 2012-13. Accordingly, your Company is not in a position to consolidate the accounts of Novener SAS (including its subsidiaries and step down subsidiaries), pertaining to the Uniross Group.

A Statement in Form AOC -1 containing the salient features of the Subsidiary Companies is attached to the Financial Statements in a separate section and forms a part of this Report.

The Annual Report includes the audited Consolidated Financial Statements, prepared in compliance with the Companies Act, 2013 and the applicable Accounting Standards, of the applicable subsidiaries. The Consolidated Financial Statements shall be laid before the ensuing 80th Annual General Meeting of the Company along with the laying of the Standalone Financial Statements of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, forms a part of this Report as Annexure 1.

CORPORATE SOCIAL RESPONSIBILITY

In compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules 2014, your Company has established a Corporate Social Responsibility (CSR) Committee.

A CSR Policy has been formulated and is available on the website of the Company(http://www.evereadyindustries.com/pdf/csr-policy-14.pdf). This policy, encompasses the Company''s philosophy for delineating its responsibility as a corporate citizen and lays down the guidelines and mechanism for undertaking socially useful programmes for welfare & sustainable development of the community at large.

The Annual Report on CSR activities containing inter alia, the brief outline of the CSR policy, the CSR initiatives taken, the expenditure on CSR activities, as well as the composition of the CSR Committee forms a part of this Report as Annexure 2.

RELATED PARTY TRANSACTIONS

Your Board has developed and approved of a Related Party Transactions Policy for purposes of identification and monitoring of related party transactions and the same is uploaded on the Company''s website.

Your Company has not entered into any contracts/arrangements with related parties as required under Section 188(1) of the Companies Act, 2013, during the year under review. However there are contracts/arrangements with related parties as defined by the said Act, executed prior to April 1, 2014 and the Statement in Form AOC -2 containing the details of the Related Party Transactions pertaining to such ongoing contracts forms a part of this Report as Annexure 3.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 of the Companies Act, 2013, the Directors state that:

1. In the preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards had been followed with no material departures;

2. 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 and of the profit of the Company for that period;

3. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Bank and for preventing and detecting fraud and other irregularities;

4. The Directors had prepared the annual accounts on a going concern basis;

5. The Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

6. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DIRECTORS

Mr. Amritanshu Khaitan has been appointed as Managing Director for a period of three years effective May 5, 2014 at the 79th Annual General Meeting of the Company.

Mr. S. Goenka, Mr. S. R. Dasgupta, Mr. P. H. Ravikumar, Mr. S. Sarkar and Mrs. R. Nirula, who have been Directors of the Company and also been Independent Directors of the Company pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, were appointed as Independent Directors for a period of five consecutive years at the 79th Annual General Meeting of the Company, held on July 25, 2014 in terms of Section 149 and any other applicable provisions of the Companies Act, 2013.

Mr. P H. Ravikumar, Independent Director, resigned from the Board of Directors effective February 28, 2015. The Board records its appreciation of the valuable contributions made by Mr. Ravikumar during his tenure as Director.

Mr. Deepak Khaitan, Vice Chairman and Non-Executive Director of the Company passed away for his heavenly abode on March 9, 2015. Mr. Deepak Khaitan had been the Director of the Company since November 23, 1994. He had also been the Executive Vice Chairman and Managing Director of the Company from June 1, 1999 to August 10, 2011 and continued as Vice Chairman, thereafter. The Board places on record its profound sorrow on the loss of Mr. Deepak Khaitan and also its deep appreciation of the valuable contributions made by him during his long association with the Company.

Mr. Aditya Khaitan has been elected as Vice Chairman, effective May 11,2015.

Mr. Aditya Khaitan will retire by rotation at the forthcoming Annual General Meeting, and being eligible, offers himself for re-appointment.

On a Reference Application made by the Central Government to the Company Law Board (CLB) under Section 408 of the Companies Act, 1956, the CLB, by an order dated December 20, 2004 directed the Central Government to appoint three Directors on the Company''s Board for three years. As the CLB''s order suffers from various legal infirmities, the Company, based on legal advice, has challenged this order of the CLB before the High Court at Calcutta, which has, by an interim order, stayed the operation of the CLB''s order. The stay is continuing.

DECLARATIONS BY INDEPENDENT DIRECTORS

Necessary declarations from all the Independent Directors of the Company, confirming that they meet the criteria of independence as prescribed, have been received.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination &, Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration, including the criteria for determining qualifications, positive attributes, independence of a Director and other matters as required. The Remuneration Policy forms a part of this Report as Annexure 4.

BOARD EVALUATION

The Nomination & Remuneration Committee of the Board of Directors had laid down the criteria for evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration, Stakeholders Relationship and Corporate Social Responsibility Committees. Annual Performance Evaluations as required, have been carried out. The criteria for and the process of formal annual evaluation of the Directors (including Independent Directors), the Board and Board level Committees is given in the Corporate Governance Report, which forms a part of this Report.

MEETINGS

The Board meets regularly to discuss and decide on various matters as required. Due to business exigencies, certain decisions are taken by the Board through circulation from time to time. During the year, four (4) Board Meetings were convened and held. Additionally, several committee meetings as well as Independent Directors'' meeting(s) were also held. The details of the Meetings are given in the Corporate Governance Report, which forms a part of this Report.

COMMITTEES OF THE BOARD

The details with respect to the compositions, powers, roles and terms of reference etc. of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee are given in the Corporate Governance Report which forms a part of this Report. All recommendations made by the Audit Committee during the year were accepted by the Board.

APPOINTMENTS/RESIGNATION OF THE KEY MANAGERIAL PERSONNEL (KMP)

Your Company is in compliance with Section 203 of the Companies Act, 2013 with the following KMP:

1. Mr. Amritanshu Khaitan as the Managing Director, as appointed effective May 5, 2014;

2. Mr. Suvamoy Saha who continues as the Wholetime Director, as also additionally designated as the Chief Financial Officer for the purpose of the said Section, effective May 5, 2014;

3. Mrs. Tehnaz Punwani who continues as the Company Secretary.

EMPLOYEE RELATIONS

One of your Company''s key strengths is its people. Relations with employees remained cordial and satisfactory. Your Board would like to place on record its appreciation of employees for their contributions to the business.

Your Company believes in a system of Human Resource Management which rewards merit based performance and playing an active role in improving employee skills. Actions during the year under review were supportive of this policy. Long -term wage settlements were signed for factories at Taratala and Haridwar.

The details of the ratio of the remuneration of each director to the median remuneration of the employees and other particulars in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms a part of this Report as Annexure 5. The details of the employee''s remuneration as required under the said Section and Rule 5(2) & 5(3) of the said Rules forms a part of this Report and are available at the Registered Office of the Company during working hours before the Annual General Meeting and shall be made available to any Member on request.

AUDITORS

Messrs. Deloitte Haskins & Sells, Chartered Accountants, (Firm''s Registration No. 302009E) hold office as Auditors till the conclusion of the forthcoming Annual General Meeting and, being eligible, offer themselves for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment.

COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, your Directors , have appointed M/s. Mani & Co., Cost Accountants, Registration No. 00004, Ashoka, 111 Southern Avenue, Kolkata 700 029, (being eligible for the appointment), to audit the cost accounts of the Company for the financial year ending 31st March, 2016. The remuneration payable to the Cost Auditors for the said year is being placed for ratification by the Members at the forthcoming Annual General Meeting.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit of the Company for the financial year 2014-15 was conducted by M/s MKB & Associates, a firm of Company Secretaries in Practice. The Secretarial Audit Report forms a part of this Report as Annexure 6.

AUDITORS'' REPORT

There are no Audit Qualifications in the Statutory Auditors Report and in the Secretarial Audit Report as annexed elsewhere in this Annual Report.

RISK MANAGEMENT

Your Directors have approved various Risk Management Policies. All material risks faced by the Company are identified and assessed by the Risk Management Steering Committee. For each of the risks identified corresponding controls are assessed and policies and procedures are put in place for monitoring, mitigating and reporting the risks on a periodic basis.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The internal financial controls are adequate and are operating effectively so as to ensure orderly and efficient conduct of business operations. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the Report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of Loans, Guarantees or Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements and forms a part of this Report.

VIGIL MECHANISM

Your Directors have adopted a Vigil Mechanism/Whistle Blower Policy. The Policy has been posted on the website of the Company. None of the Company''s personnel have been denied access to the Audit Committee.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form No. MGT 9 forms a part of this Report as Annexure 7.

OTHER DISCLOSURES

During the year under review:

a. There were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

b. Your Company has not accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

c. There were no significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT AND REPORT ON CORPORATE GOVERNANCE

As required in terms of the Listing Agreement with Stock Exchanges a Management Discussion and Analysis Report and a Report on Corporate Governance are presented in separate sections, forming part of the Annual Report.

For and on behalf of the Board

Kolkata B. M. Khaitan

July 02, 2015 Chairman


Mar 31, 2013

The Directors are pleased to present the Annual Report, together with the audited Accounts of your Company for the financial year ended March 31, 2013.

Review of Performance

Financial results are summarized below:

Rs. Crores

2012-13 2011-12

Net Sales 1,034.30 976.20

Other Income from Operations 1.03 4.10

Total Income from Operations 1,035.33 980.30

Total Expenditure adjusted for increase/decrease of tocks 969.95 929.77

Profit/(Loss) from Operations before Other Income, Depreciation,

Finance Costs, Exceptonal Items and Taxation 65.38 50.53

Other Income 9.42 7.54

Profit/doss) from Operations before Depreciation, Finance Costs, Exceptional Items and Taxation 74.80 58.07

Depreciation 35.07 24.18

Interest and Exchange Fluctuation 40.49 36.09

(Loss)/Profit before Exceptional Items and Taxation (0.76) (2.20)

Exceptional Items 76.84

(Loss)/Profit before Taxation (0.76) (79.04)

Provision for Taxation (5.84) 0.81

Profit/(Loss) after Taxation 5.08 (79.85)

Balance of Profit/(Loss) brought forward from previous year (46.64) 33.21

Amount available for Appropriation

Which the Directors recommend for appropriation as under:

¦Proposed Dividend

¦Taxon Proposed Dividend -

¦General Reserve -

Balance carried forward to Balance Sheet (4156) (46^T

Net sales for the year were higher by 6% over the previous financial year. Profit before Depreciation, Interest and Taxation (PBDIT) before exceptional items was higher by 29% at ? 74.80 crores as compared to ? 58.07 crores in the previous year. With depreciation of ? 35.07 crores (previous year ? 24.18 crores), a higher interest / exchange fluctuation charges of? 40.49 crores (previous year ? 36.09 crores) and there being no exceptional items (previous year ? 76.84 crores), Profit after Taxation stood at ? 5.08 crores for the year against a corresponding loss of ? 79.85 crores in the previous year.

The year was a challenging one for operations - in terms of market being sluggish and unprecedented depreciation of the rupee. The operating results are indicative of these adversities - albeit with a reasonable improvement over the previous year.

Dividend

Your Directors considered it prudent not to recommend any dividend for the year under review as a measure of conservation.

Operational Review

Batteries and Flashlights

The battery market went through some significant volatility over the last 5 years. Unprecedented cost push necessitated significant price increases. Battery being a functional product, demand bears a very strong elasticity to price. The stiff consumer resistance to the price resulted in significant slow-down in the market. The consumer resistance manifested itself in their lowering usage of appliances powered by ''D'' size batteries (the most expensive of all batteries). This virtually obliterated usage of ''D'' size incandescent flashlights, which were hitherto very popular. Consumers changed over to flashlights with ''LED'' bulbs using ''AA'' batteries. The sluggishness in the general economy did not help matters.

This trend of de-growth in ''D'' batteries continued in the current year at a rate of 4%. Despite this, battery volume remained flat in overall, thanks to the growth in other segments-led by''AAA''.

The market share positions of the major players remained unaltered during the year under review despite the various market changes taking place with your Company''s share being at 50%.

As mentioned above, the flashlights market also saw significant product mix changes. Usage of flashlights using incandescent bulb and ''D'' size batteries came down very significantly. In addressing this, your Company started introducing a range of value-for-money, smart and efficient flashlights with ''LED'' as the light source option - mostly using ''AA'' batteries. Initially introduced as a value offer, this segment eventually became the standard and thereafter evolved as life-style products - in multifarious styling & colour, at several price points-both premium and popular.

On a retrospect, the above changes did pose challenges - but the outcome is positive. The earlier flashlights using incandescent bulbs (mainly brass flashlights) were profitable and were good for consumption of ''D size batteries but remained for long period in-use with consumers. The new LED torches are equally profitable and displays much lower in-use period and is also good for battery consumption (mainly''AA'').

These new generation flashlights took the consumers'' fancy as these were introduced about 5 years back. The first 2 years saw significant growth of 110 % - taking the user base to a very high level. Thereafter, the market settled down to traditional growth rates. During the year under review flashlights turnover grew by 12.6%.

Your Company''s share of the organized flashlights market remained at 76%.

However, if the unorganized grey market is considered (which is estimated to be about half the size of the organized market), then market share stands at a little over 50%.

It is also worthwhile to mention that both batteries & flashlights margins continued to be under pressure - due to the depreciating Rupee and also due to overall inflationary trends. Though the demand of these product categories bear strong elasticity to price, your Company persisted with passing on the adverse impacts to the market - which resulted in operating results being better during the year under review as compared to the previous year.

The manufacturing operations of your Company continued to focus on total quality management, safety, energy conservation and cost control. This helped your Company in achieving efficiency in the manufacturing function.

Lighting Products

The Company started marketing of compact fluorescent lamps (CFL) and General Lighting Service (GLS) lamps some time back. These products found excellent fit to the Company''s brands ''Eveready'' and ''Powercell'', which are synonymous with portable power and lighting. Your Company is focused on being a serious player in the lighting category. Towards this and to offer a fuller range, your Company launched a few other products during the year - tube lights, wall mounted rechargeable battens and luminaires among others.

The Company has been distributing these products through its existing distribution channel, primarily comprising of groceries and general merchants. This network needs to be enhanced to be made amenable to the electrical trade. Work on this was initiated during the year.

Net sales from this category for the current year stood at ? 101.93 crores and it is expected that this category will provide significant turnover growth in the years to come.

New Devices

In keeping with its brand promise of portable energy, the Company launched a few devices during the current year. These are in 3 product segments - rechargeable fan, radio and power bank for mobile phones. These products fall within the existing competencies of your Company.

However, operations are still at a nascent stage and in the process of exploring a viable steady-state business. The size is still too small to attract any risk at this stage. However, if successful, rewards can be lasting.

Packet Tea

The packet tea business continued with its steady performance through leveraging of the distribution network of the Company. Current share of the market stands at 1 - 5 percent in the various markets of the country. The

business continues to be steady and profitable. While relatively small in the overall turnover, it provides an important option to distribution in many areas. Sales turnover for the current year stood at ? 74.50 crores - at a modest growth over the previous year.

The packet tea operations currently utilize the Company''s tea blending and packaging unit at Chuapara, West Bengal. However, with outsourcing possibilities being available at very competitive prices, it is appearing that the unit may have outlived its utility to this business. In view of this, your Board, vide Resolution passed by Circulation on May 10,2013, has, subject to the approval of Members of the Company and other approvals as may be necessary, resolved to sell, transfer and dispose of the building and other assets at this unit to any person or entity as the Board may consider appropriate. In terms of Section 293(1)(a) and Section 192Aof the Companies Act, 1956, read with the Companies (Passing of the Resolution by Postal Ballot) Rules, 2011, the process for consent / approval of the Members to be obtained by way of Postal Ballot has been initiated to enable your Board to sell and transfer the said undertaking.

Subsidiaries & Consolidated Financial Statements

Your Company had set up a special purpose vehicle, Novener SAS in France (shareholding interest - 82%), for the purpose of acquiring a controlling interest in Uniross SA, a French Company which along with its subsidiaries (the Uniross Group) was engaged in the manufacturing and marketing of rechargeable batteries and allied products, having presence in various parts of the world and particularly strong in Europe. At the time of the acquisition, the financial condition of the Uniross Group was already weak, but there was a compelling investment rationale that the situation could be turned around quickly and that the acquisition would provide effective access to markets hitherto not available to your Company.

Unfortunately, the dim economic situation in Europe and onset of sluggish demand of the rechargeable category world-over subsequent to the acquisition, did not allow a turn around and the Uniross Group operations continued to incur losses. With the view that the Company may not be able to recover its investments pertaining to the Uniross operations, the management had, as a measure of prudent accounting and governance, created a provision of ? 75 crores covering this investment in the previous financial year. As at March 31,2013, the Company''s exposure towards investments, advances and other obligatory commitments of ? 76.19 crores stood fully provided for (inclusive of the provision made in the previous financial year as mentioned above).

During the year under review, the liquidation of the key entities of the Uniross Group was ordered by a French Court judgment and the relevant companies were put under external administration. Consequently, your Company is not in a position to consolidate the accounts of Novener SAS (including its subsidiaries and step down subsidiaries), pertaining to the Uniross Group and is also not in a position to attach the accounts of the said subsidiaries in terms of Section 212 of the Companies Act, 1956. Necessary application has been made and relevant information provided to the Ministry of Corporate Affairs, Government of India (MCA) by your Company in this regard.

In accordance with the General Circular issued by MCA, the accounts and other related detailed information of the other subsidiaries being Everspark Hong Kong Private Limited and Litez India Limited, as required under section 212 (1) of the Companies Act, 1956 are not attached. Hard copy of the Annual Accounts of the applicable subsidiary companies and the related other information shall be made available to the members seeking such information and shall also be kept open for inspection at the Registered Office of the Company and of the subsidiaries concerned during working hours, upto the date of the Annual General Meeting.

As required under the Listing Agreement with the Stock Exchanges, the Annual Report includes the audited Consolidated Financial Statements, prepared in compliance with the applicable Accounting Standards of the applicable subsidiaries.

A Statement containing the details of the applicable Subsidiary Companies is attached in the Annual Report.

Prospects

Both batteries and flashlights went through some major changes in the recent past as mentioned earlier.

Batteries have now settled down to a stable level which seem sustainable. The market is in a mood to accept adverse impacts of an inflationary economy. This hurdle being over, the outlook appears to be bright.

For the long term, battery business is linked to fundamental demand driven by device population. As India gets economically more developed, device penetration into households will increase in line with the rest of the world, boosting battery growth. It needs to be borne in mind that India remains one of the lowest per capita battery consuming nations - and hence with a potential for major improvement.

Flashlights market is susceptible to grey operations of unorganized players bringing copy-cat models to the market - usually without payment of taxes and duties. The only way to sidestep this problem is to keep bringing new models which are creative and innovative. This is a competency that EIIL possesses. Barring this negative - which can be and will be overcome - the outlook for this segment is upbeat.

Prospects are promising in the Lighting Products business. This business has become a key focus area for the Company and an avenue for growth. Fine tuning of distribution systems and a full range of products in the lighting portfolio will fulfill growth aspirations.

Packet tea will continue to be a stable business - both in turnover and profits.

Finance

Tight control was kept over the finances of your Company, with emphasis on reduction of debt. However, due to requirement of additional working capital consequent to introduction of new products as well as hardening of interest rates, the Company incurred higher interest charges.

Your Company met its financial commitments in servicing debt and repayments thereof in a timely manner. Capital expenditure programme was fully met.

In view of inadequacy of profits during the year under review, there was no transfer to General Reserves.

Employee Relations

One of your Company''s key strengths is its people. Relations with employees remained cordial and satisfactory. Your Board would like to place on record its appreciation of employees for their contributions to the business.

Your Company believes in a system of Human Resource Management which rewards merit based performance and playing an active role in improving employee skills. Actions during the year under review were supportive of this policy. Long-term wage settlements were signed for factories at Kolkata, ChennaiandNoida.

A statement of particulars of employees as required under section 217(2A) of the Companies Act, 1956 forms a part of this report as a separate Annexure. In terms of section 219 (1)(b)(iv) of the Act, this Report is being sent to all Members without the said annexure. Any member interested in taking inspection or obtaining a copy of the statement may contact the Secretary of the Company at its Registered Office during working hours, till the date of the Annual General Meeting.

Cost Auditors

As per the Order of the Central Government and in pursuance of Section 233B of the Companies Act, 1956, your Company carries out an audit of the cost accounts of the Company relating to dry cell batteries. The due date for filing of the Cost Audit Report with the Ministry of Corporate Affairs for the financial year ended March 31, 2012 was February 28, 2013 and the same was filed on January 30, 2013. The Board, has upon the recommendation of the Audit Committee re-appointed M/s.Mani &Co„ Cost Accountants, Registration No. 00004, Ashoka, 111 Southern Avenue, Kolkata 700 029, (being eligible for the re-appointment), to audit the cost accounts of the Company relating to dry cell batteries, as well as other products as recently included for the purpose of cost audit for the financial year ending March 31,2013, subject to the approval of the Central Government.

Public Deposits

Your Company does not have any public deposit scheme and has repaid all Fixed Deposits that have matured and were claimed by depositors under the earlier scheme. ? 0.005 crores as claimed and paid, however, remain un-encashed by the depositors as on March 31,2013.

Exports and Foreign Exchange Earnings and Outgo

During the year under review, your Company exported batteries totaling to a value of ? 30.68 crores (2011-12 : ? 23.61 crores) and flashlights totaling to a value of ? 8.32 crores (2011-12 : ? 7.74 crores).

31.03.2013 31.03.2012

Foreign Exchange Earnings 24.56 14.83

Foreign Exchange Outgo 157.08 161.65

Conservation of Energy and Technology Absorption

Astatement giving details of conservation of energy and technology absorption in accordance with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is annexed.

Directors''Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors state as follows:

1. That in the preparation of the annual accounts for the financial year ended March 31,2013, the applicable accounting standards had been followed with no material departures;

2. 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 and of the profit or loss of the Company for that period;

3. 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 safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. That the Directors had prepared the annual accounts on a going concern basis.

Directors

In accordance with the Articles of Association, Mr. S. Saha, Mr. S. Goenka and Mr. Amritanshu Khaitan will retire by rotation at the forthcoming Annual General Meeting, and being eligible, offer themselves for re-appointment.

Mr. B.Mitter, Mr. D.A Nanda and Mr. V. Bhandari resigned from the Board of Directors of the Company, effective August 1,2012, December 4,2012 and December 19, 2012 respectively. The Board records its appreciation of the valuable services rendered by Mr. B. Mitter, Mr. D. A. Nanda and Mr. V. Bhandari during their respective tenures as Directors.

On a Reference Application made by the Central Government to the Company Law Board (CLB) under Section 408 of the Companies Act, 1956, the CLB, by an order dated December 20,2004 directed the Central Government to appoint three Directors on the Company''s Board for three years. As the CLB''s order suffers from various legal infirmities, the Company, based on legal advice, has challenged this order of the CLB before the High Court at Calcutta, which has, by an interim order, stayed the operation of the CLB''s order. The stay is continuing.

Auditors

Messrs. Deloitte Haskins & Sells retire as Auditors at the conclusion of the forthcoming Annual General Meeting and, being eligible, offer themselves for re-appointment.

Auditors Report

The Auditors have made an observation in their Report relating to the financial information and consolidation of Novenerand its subsidiaries. This matter has already been explained earlier in the Section titled "Subsidiaries & Consolidated Financial Statements".

Management Discussion and Analysis Report and Report on Corporate Governance

As required in terms of the Listing Agreement with Stock Exchanges a Management Discussion and Analysis Report and a Report on Corporate Governance are annexed.

For and on behalf of the Board Kolkata

B. M. Khaitan

May 29,2013 Chairman


Mar 31, 2011

Report of the Directors

For the financial year ended March 31,2011

The Directors are pleased to present the Annual Report, together with the audited Accounts of your Company for the financial year ended March 31, 2011.

Review of Performance

Financial results are summarized below:

(Rs. in Crores)

2010-11 2009-10

Net Sales 950.42 968.73

Other Operating Income 8.58 1.42

Profit/(Loss) from sale of real estate - 7.03

Total Income 959.00 977.18

Total Expenditure adjusted for increase/ decrease of stocks 858.72 853.41

Provision no longer required (1.91) (1.25)

Total Expenditure 856.81 852.16

Profit/(Loss) before Depreciation, Interest, Exceptional Items and Taxation 102.19 125.02

Depreciation 24.53 24.13

Interest and Finance Cost 31.28 34.38

Profit/(Loss) before Exceptional Items and Taxation 46.38 66.51

Exceptional Items 0.29 (97.37)

Profit/(Loss) before Taxation 46.09 163.88

Provision for Taxation 6.72 21.67

Profit/(Loss) after Taxation 39.37 142.21

Balance of Profit/ (Loss)brought forward from previous year 38.06 0.08

Amount available for Appropriation 77.43 142.29

Which the Directors recommend for appropriation as under:

-Proposed Dividend 3.63 3.63

-Taxon Proposed Dividend 0.59 0.60

-General Reserve 40.00 100.00

Balance carried forward to Balance Sheet 33.21 38.06

Net sales for the year were lower by 2 % over the previous financial year. Profit before Depreciation, Interest and Taxation (PBDIT) before exceptional items was accordingly lower by 18 % at Rs. 102.19 crores as compared to Rs. 125.02 crores in the previous year. With depreciation of Rs. 24.53 crores (previous year Rs. 24.13 crores) and a lower interest charges of Rs. 31.28 crores (previous year Rs. 34.38 crores), Profit before Exceptional Items and Taxation came to Rs. 46.38 crores (previous year Rs. 66.51 crores). There being a minor charge of Rs. 0.29 crores in exceptional items this year - against a net gain of Rs. 97.37 crores in such items in the previous year, Profit after Taxation stood at Rs. 39.37 crores for the year against the corresponding figure of Rs. 142.21 crores in the previous year.

The year was a challenging one for operations - in terms of market being sluggish and incidence of adverse costs from both input materials and overheads. The operating results are indicative of these adversities.

Dividend

Despite the operating results being lower than the previous years, your Directors recommend a dividend of Rs. 0.50 per equity share on 7,26,87,260 fully paid up equity shares ofRs. 5/-each being 10% on the paid up value of the equity shares of the Company for the year ended 31st March, 2011 (same as in previous year), which if approved at the ensuing Annual General Meeting will be paid to all eligible members whose names appear in the register of members on September 23,2011 or appear as beneficial owners as per particulars furnished by the Depositories on September 12,2011.

Operational Review

Batteries and Flashlights

Batteries went through a chequered history over the last 5 years, triggered by significant price increases to offset material cost push. There was stiff consumer resistance to these increases and demand became erratic with a tendency of slow down. The sluggishness in the general economy did not help matters.

The segment which suffered the maximum brunt from this impact was the 'D' size segment, which was then the major product segment in batteries and was relatively more expensive than other cylindrical batteries. In fact, the consumer resistance manifested itself in, them refraining from use of appliances powered by 'D' size batteries. This virtually obliterated 'D' size incandescent flashlights, which were hitherto very popular. Consumers changed over to flashlights with LED bulbs using 'AA' batteries (more fully covered subsequently).

This trend of de-growth in 'D' batteries continued in the current year at a rate of 16%. Despite this, batteries grew in the overall - albeit at a modest rate of 2.3%. This was due to growth in other battery segments - led by 'AA' and'AAA'.

The market share positions of the major players remained unaltered during the year under review despite the various market changes taking place with your Company being at 50% (Company estimate).

The last 5 years had also seen rapid changes in the flashlights market. This segment also experienced major price impacts being passed on due to cost push. Combined with higher battery prices (as explained earlier), this led to strong consumer reaction. In addressing that, your Company started introducing a range of value-for-money, smart and efficient flashlights using 'LED' as the light source option (as opposed to the then prevalent incandescent bulbs). These flashlights mostly used 'AA' batteries (as opposed to 'D' batteries earlier).

Initially introduced as a value offer, this segment eventually became the standard and thereafter evolved as life-style products - in multifarious styling & colour, across the aesthetic range and at several price points - both premium and popular.

From the Company's perspective, this measure is positive. The earlier flashlights using incandescent bulbs (mainly brass flashlights) were profitable and were good for consumption of 'D' size batteries but remained for long period of in-use with consumers. The new LED torches are equally profitable and displays much lower in-use period and is good for battery consumption (mainly'AA').

These new generation flashlights took the consumers' fancy as these were introduced about 3 years back. The first 2 years saw significant growth in flashlights sales jumping from a level of 12.82 million units in 2007-08 to 27.03 million units in 2009-10, a growth of more than 110 % in 2 years.

However this trend could not be sustained during the current year and sales volumes suffered a decline of 6.6% - albeit on a much broader base. This somewhat unexpected reversal took place mainly on account of sudden influx of look-alike gray market products in the market. Counter measures have been put in place to reverse this trend.

Your Company's share of the organized flashlights market remained at 76% (Company estimate).

It is also worthwhile to mention that input costs rose during the current year as compared to the previous year. The adverse impact came not only from zinc, but also other major materials used for manufacture. The adverse impact was to some extent neutralized by an overall stronger Rupee. Part of the net adverse impact was recovered from the market, yet it left a dent in the margin of about 1.5% of net sales value.

The manufacturing operations of your Company continued to focus on total quality management, safety, energy conservation and cost control. This helped your Company in achieving efficiency in the manufacturing function.

Operations at the manufacturing facilities at Cossipore - Kolkata and Hyderabad continued to remain suspended. This had no impact on the operations of the Company, as supplies to the market were met by other units. Separations with workmen were fully completed at both these facilities subsequent to completion of the year under review. Hence, both these facilities are now closed.

Lighting Products

The Company started marketing of compact fluorescent lamps (CFL) and General Lighting Service (GLS) lamps in the recent past. These products have found excellent fit to the brand 'Eveready' and Powercell'. The Company is distributing these products through its existing distribution channel, primarily comprising of groceries and general merchants. This is tangibly different from the usual electrical trade. This has given the advantage of a quick entry to this market - but has the obvious disadvantage of not being amenable to the scale of the electrical trade.

Net sales for the current year stood at Rs. 91.38 crores - at the same level as the previous year atRs. 91.54 crores.

This can be ascribed to the fact that the Company consciously restricted sales of CFL bulbs to a few geographies (UP and Bihar) where the phenomenon of returned products was found to be on the rise - and beyond accepted levels. This market traditionally works on warranties and if returns are higher than the accepted norm, it is essentially due to the poor quality of power, on which the Company has little control.

This step was necessary to avoid impairment to profitability. However, sales have now stabilized on this revised orientation and the position is expected to improve hereafter.

Packet Tea

The packet tea business continued with its steady performance through leveraging of the distribution network of the Company. Current share of the market stands at 1 - 5 per cent in the various markets of the country. Focus is currently being given to make the business profitable. As a compromise, some marginal turnover was sacrificed. Sales turnover for the current year stood at Rs. 73.34 crores - at a marginal decline against that of the previous year atRs. 75.94 crores.

Subsidiaries & Consolidated Financial Statements

Your Company has 80% of the controlling stake in Novener SAS, France which in turn controls Uniross SA, a French Company, which along with its subsidiaries, is engaged in the manufacturing and marketing of rechargeable batteries and allied products, having presence in various parts of the world and particularly strong in Europe. The above subsidiary was acquired 2 years back with a view to gain access to other geographies, where the Company has no presence - in particular, Europe, South East Asia and parts of Africa. Uniross was facing serious financial difficulties at that time and it was thought that it could be quickly nursed back to sustainable profitability.

During the year under review, Uniross SA continued to fare poorly. Unfortunately, the continuing dim economic situation prevailing in Europe and overall sluggish demand of the rechargeable category world over, has not allowed the quick turn around that was expected. It currently continues to be loss making. However, through a major restructuring exercise, significant elements of costs have now been pared. It is now expected that with the revised cost structure, Uniross should be able to return to modest profitability during the next 1 - 2 years. Original aspiration of growth can be pursued only after that is achieved.

Uniross' operations to your Company meant an addition ofRs. 129.45 crores in net sales (previous year Rs. 135.43 crores) and adding a net loss of Rs. 52.36 crores (previous year Rs. 14.98 crores), including exceptional costs of Rs. 18.05 crores (previous year - nil). The effect of this is available in the Consolidated Accounts attached to this Report.

The consolidated financial statements have been prepared in accordance with Accounting Standard 21 (AS-21) issued by the Institute of Chartered Accountants of India and include the financial numbers of your Company's subsidiaries, for the year under review. As required by Clause 32 of the Listing Agreement with the Stock Exchanges, the Audited Financial Statements together with the Auditor's Report thereon are annexed and form part of this Annual Report.

The consolidated accounts presented under this Annual Report include the financial numbers of your Company's subsidiaries, for the year under review.

AStatement containing the details of the Subsidiary Companies are attached in the Annual Report.

In accordance with the General Circular issued by the Ministry of Corporate Affairs, Government of India, the accounts of the applicable subsidiary companies and the related detailed information, as required under section 212 (1) of the Companies Act, 1956 are not attached. Hard copy of the Annual Accounts of the applicable subsidiary companies and the related other information shall be made available to the members seeking such information and shall also be kept open for inspection at the Registered Office of the Company and of the subsidiaries concerned during working hours, upto the date of the Annual General Meeting.

Prospects

As mentioned at the outset, the year was a challenging one for operations.

Both batteries and flashlights went through some major changes in the recent past. In case of batteries, it was an unprecedented de-growth of an important segment ('D') and a major shift in product mix. For flashlights, on the other hand, it was a case of very significant growth fuelled by new generation products and then a quiet period during the current year.

Batteries have now settled down to a stable level which seem sustainable and supported by historical statistics. In fact the major segments in batteries - viz. 'AA and 'AAA' - together comprising more than 70 % of the market in terms of volume, are growing at a rate higher than historical trends. This is being brought down by the continuing de-growth of the 'D' segment. However, this latter segment is now gone down to such low level that it should now stop having much impact on the overall market. The outlook - even in the near-term thus appears to be brighter than what was seen in the current year.

For the long term, battery business is linked to fundamental demand driven by device population. As India gets economically more developed, device penetration into households will increase in line with the rest of the world, boosting battery growth. It needs to be borne in mind that India remains one of the lowest per capita battery consuming nations - and hence with a potential for major improvement.

Flashlights recorded very significant growth in the previous 2 years - but cooled down during the current year with a moderate slow-down, albeit on a significantly larger base. The market is susceptible to gray operations of unorganized players bringing copy-cat models to the market - usually without payment of taxes and duties. The current year saw significant impact from this phenomenon. The only way to sidestep this problem is to keep bringing new models which are creative and innovative. This is a continuous process and hopefully efforts in this regard will mitigate this undesirable market phenomenon.

Prospects are promising in the Lighting Products business - both in the CFL and GLS segments. Challenges remain with regard to handling of warranties and competitive pricing - but these are being met. This business remains a key focus area for the Company and an avenue for growth.

Packet tea will add to the turnover. Focus is currently on to improve profitability of this business.

As explained earlier, the Company's cost structure is sensitive to zinc and exchange rate of the Indian Rupee and overall inflationary trends. At the present moment, zinc remains stable at current levels - barring some very recent softness. Predictions on Rupee seem to indicate that it will appreciate against the dollar. So it appears that the impact of these 2 factors may off- set each other on the cost of the Company. There is no sign yet of the inflationary trend decelerating. Also, other commodities used as input materials are also showing increasing trends. These may continue to impact margins negatively. Efforts are being made to recover a part of the adverse impact from the market - to the extent practicable.

Finance

Tight control was kept over the finances of your Company, with emphasis on reduction of debt. This along with strict management of working capital helped your Company save interest charges.

Your Company met its financial commitments in servicing debt and repayments thereof in a timely manner. Capital expenditure programme was fully met.

A transfer of Rs. 40 crores was made to the General Reserves out of the amount available for appropriation. After providing for the proposed dividend and Dividend Distribution Tax, profits left to be carried forward was at Rs. 33.21 crores.

Employee Relations

One of your Company's key strengths is its people. Relations with employees remained cordial and satisfactory. Your Board would like to place on record its appreciation of employees for their contributions to the business.

Your Company believes in a system of Human Resource Management which rewards merit based performance and playing an active role in improving employee skills. Actions during the year under review were supportive of this policy.

A statement of particulars of employees as required under section 217 (2A) of the Companies Act, 1956 forms a part of this report as a separate Annexure. In terms of section 219 (1)(b)(iv) of the Act, this Report is being sent to all Members without the said annexure. Any member interested in taking inspection or obtaining a copy of the statement may contact the Secretary of the Company at its Registered Office during working hours, till the date of the Annual General Meeting.

Update

Consequent to the trial proceedings before the Chief Judicial Magistrate, Bhopal, on the modified criminal charges framed under the directions of the Supreme Court that commenced in September 1997, having been concluded, a curative petition filed by the Union of India, against the said directions of the Supreme Court had been filed and been dismissed. The State of Madhya Pradesh and the Union of India have filed necessary revisions of the criminal charges framed and have also filed appeals against the order of the Chief Judicial Magistrate, Bhopal, in the Sessions Court, Bhopal. The Company has also filed its appeal. As per the views and advice of the legal counsel, it is believed that the findings against the Company are likely to fail ultimately.

The Union of India has also filed a curative petition against the Company amongst others including the erstwhile foreign holding company, with regard to enhancement of compensation, claimed earlier by the Union of India from the foreign holding company as well as certain rehabilitation costs. As per the views and advice of the legal counsel it is believed that the said petition is devoid of any merit.

Cost Auditors

As per the Order of the Central Government and in pursuance of Section 233B of the Companies Act, 1956, your Company carries out an audit of the cost accounts of the Company relating to dry cell batteries. The due date for filing of the Cost Audit Report with the Ministry of Corporate Affairs for the financial year ended 31st March, 2010 was September 27, 2010 and the same was filed on the said due date. The Board, has upon the recommendation of the Audit Committee reappointed M/s.Mani & Co., Cost Accountants, Registration No. 00004, Ashoka, 111 Southern Avenue, Kolkata - 700 029, (being eligible for the reappointment), to audit the cost accounts of the Company relating to dry cell batteries, for the financial year ending 31st March, 2012, subject to the approval of the Central Government.

Public Deposits

Your Company does not have any public deposit scheme and has repaid all Fixed Deposits that have matured and were claimed by depositors under the earlier scheme. Rs. 0.72 Lakhs as claimed and paid, however, remain un-encashed by the depositors as on March 31,2011.

Exports and Foreign Exchange Earnings and Outgo

During the year under review, your Company exported batteries totaling to a value of Rs. 2,494.07 Lakhs (2009-10 : Rs. 2553.54 Lakhs) and flashlights totaling to a value of Rs. 643.10 Lakhs (2009-10 : Rs. 471.81 Lakhs).

Rs. Lakhs

31.03.2011 31.03.2010

Foreign Exchange Earnings 1,728.18 1792.56

Foreign Exchange Outgo 13,918.81 13,836.18

Conservation of Energy and Technology Absorption

Astatement giving details of conservation of energy and technology absorption in accordance with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is annexed.

Directors' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors state as follows:

1. That in the preparation of the annual accounts for the financial year ended March, 31,2011, the applicable accounting standards had been followed with no material departures;

2. 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 and of the profit or loss of the Company for that period;

3. 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 safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. That the Directors had prepared the annual accounts on a going concern basis.

Directors

Mr. D. Khaitan, stepped down as Executive Vice Chairman and Managing Director of the Company effective from the close of working hours of August 10,2011. Mr. Khaitan, however, will continue as the Vice Chairman of the Board.

Mr. D. Khaitan had been re-appointed as Executive Vice Chairman & Managing Director for a further period of three years effective June 1, 2011. Consequent to his stepping down and acceptance of the same by the Board, Mr. D. Khaitan's re-appointment for the period June 1,2011 to August 10, 2011, only, is subject to the approval of the shareholders at the forthcoming Annual General Meeting.

Mr. Amritanshu Khaitan was appointed as Additional Director by the Board effective August 10, 2011. In terms of Article 116(1) of the Articles of Association of the Company, Mr. Amritanshu Khaitan holds office until the forthcoming Annual General Meeting. Notice in writing under Section 257(1) of the Companies Act, 1956 has been received from a Member signifying his intention to propose Mr. Amritanshu Khaitan for election to the office of Director. The above re-appointment of Mr. Amritanshu Khaitan is subject to the approval of the shareholders at the forthcoming Annual General Meeting.

Mr. S. Saha has been re-appointed as Wholetime Director for a further period of three years effective March 22,2011.

Mr. Amritanshu Khaitan has been appointed as Wholetime Director for a period of three years effective August 10,2011.

The above appointment and re-appointments of the executive directors are subject to the approval of the shareholders at the forthcoming Annual General Meeting.

In accordance with the Articles of Association, Mr.B. M. Khaitan, Mr. B. Mitter, Mr. D. Khaitan and Mr. V Bhandari will retire by rotation at the forthcoming Annual General Meeting, and being eligible, offer themselves for re-appointment.

On a Reference Application made by the Central Government to the Company Law Board (CLB) under Section 408 of the Companies Act, 1956, the CLB, by an order dated December 20,2004 directed the Central Government to appoint three Directors on the Company's Board for three years. As the CLB's order suffers from various legal infirmities, the Company, based on legal advice, has challenged this order of the CLB before the High Court at Calcutta, which has, by an interim order, stayed the operation of the CLB's order. The stay is continuing.

Auditors

Messrs. Deloitte Haskins & Sells retire as Auditors at the conclusion of theforthcomingAnnual General Meeting and, being eligible, offer themselves for re-appointment.

Management Discussion and Analysis Report and Report on Corporate Governance

As required in terms of the Listing Agreement with Stock Exchanges a Management Discussion and Analysis Report and a Report on Corporate Governance are annexed.

For and on behalf of the Board

Kolkata B. M. Khaitan

August 10,2011 Chairman


Mar 31, 2010

The Directors are pleased to present the Annual Report, together with the audited Accounts of your Company for the financial year ended March 31,2010.

Review of Performance

Financial results are summarized below:

(Rs.inCrores)

2009-10 2008-09

Net Sales 968.73 857.33

Other Operating Income 1.42 3.16

Profit / (Loss) from sale of real estate 7.03 -

Total Income 977.18 860.49

Total Expenditure adjusted for increase/decrease of stocks 853.30 778.83

Provision no longer required (125) <1.25>

Total Expenditure 852.05 776.88

Profits before Depreciation, Interest, Exceptional Items and Taxation 125.13 83.61

Depreciation 2413 24.93

Interest and Finance Cost 3438 40.70

Profit/(Loss) before Exceptional Items and Taxation 66.62 17.98

Exceptional Items (97.37) -

Profit before Taxation 163.99 -

Provision for Taxation 2178 (1.42)

Profit/(Loss) after Taxation 142.21 19.40

Balance of Profit / (Loss)brought forward from previous year 0.08 (19.32)

Amount available for Appropriation 142.29 0.08

Which the Directors recommend for appropriation as under:

-Proposed Dividend 3.63 -

-Taxon Proposed Dividend 0.60 -

-General Reserve 100.00 -

Balance carried forward to Balance Sheet 38.06 0.08



Net sales for the year were higher by 13% over the previous financial year. Profit before Depreciation, Interest and Taxation (PBDIT) before exceptional items was higher by 50% at Rs. 125.13 crores as compared to Rs.83.61 crores in the previous year. This progress coupled with your Companys improved financial position - entailing lower charges on account of interest - resulted in Profit before Taxation without considering exceptional items at Rs.66.62 crores against Rs.17.98 crores in the previous year - a growth of 271 %. With the exceptional items contributing a net sum of further Rs. 97.37 crores, Profit after Taxation stood at Rs.142.21 crores for the year against the corresponding figure of Rs. 19.40 crores in the previous year.

This improved performance was contributed by overall improvement in operations, growth in volumes, lower incidence of excise duty and lower financing costs despite somewhat hardening of input costs, gradually over the year.

Dividend

Your Directors are pleased to recommend for approval of the shareholders, a dividend of Re. 0.50 per equity share on 7,26,87,260 fully paid up equity shares of Rs.5/- each being 10% on the paid up value of the equity shares of the Company for the year ended March 31,2010 (previous year - nil).

Operational Review

Batteries and Flashlights

Batteries went through significant price increases to offset material cost push in the recent past. Cumulative price increases for the various battery types ranged between 20 per cent and 50 per cent. This met with stiff consumer resistance and demand started slowing down. Unfortunately, the price increases had to be persisted with, due to input costs continuing to prevail at high levels.

The consumer resistance mainly manifested itself in torch-using consumers (a key segment), looking for more energy efficient torches. Traditionally, they were using torches with incandescent bulbs using D size batteries. The changed dynamics made them shift to torches with LED bulbs using AA batteries (more fully covered subsequently). Thus, degrowth was most pronounced in D size batteries.

This trend of de-growth continued till the first quarter of the current year. In a very encouraging development this product segment turned to positive growth from the second quarter. Turnover grew in the last 3 quarters by 7% as compared to the corresponding period of the previous financial year.

So far the market share position remains unaltered despite the various market changes taking place with your Company being at 51 % (Company estimate).

The phenomenon of consumer resistance to pricing actions was also very significant in the flashlights business. Similar to the trend in batteries, flashlights business also experienced degrowth of volumes. The impact was most significant in the brass segment of flashlights - predominantly used in the rural areas.

As a mitigation measure and with a view to giving consumers a value-for- money option, the Company introduced a new class of flashlights. This new segment has popularly come to be known as the LED segment due to usage of LED bulbs being used as the light source. The Company was at the forefront of introduction of this new segment and encouraged consumers to take to it due to the value proposition of lower battery consumption.

Initially introduced as a value offer, this segment has now started offering life-style products. These come in multifarious styling & colour, and offer choices to consumers across the aesthetic range and several price points. These have become the standard for flashlights in the country.

From the Companys perspective, this measure is positive. The earlier flashlights using incandescent bulbs (mainly brass flashlights) were profitable and were good for consumption of D size batteries but remained for long

period of in-use with consumers. The new LED torches are equally profitable and displays much lower in-use period and is good for battery consumption (mainly AA).

These new generation flashlights took the consumers fancy as these were introduced. The previous year recorded significant volume growth - thus increasing overall torch user-ship significantly. The current year also saw growth in this product category - though at a more sedate rate of 8% - however on a much broader base.

Also, these flashlights being energy efficient have longer replacement cycle of batteries. However once the cycle sets in, it is positive to overall battery consumption, as perhaps being vindicated by the battery growth currently visible.

Presently the Company is engaged in enriching its portfolio of LED flashlights by introducing products which are more technologically advanced or which cater to specific focused use. These efforts are seeing reintroduction of metal flashlights and/or those using D size batteries.

Your Companys share of the organized flashlights market remained at 76% (Company estimate). In a diversification of this product range, the Company launched a new range of lighting solutions for homes - addressing lack of electricity or the prevalent power-cut situation. This range of products has a simple message - light up your homes. It is creating new usage and conversion from kerosene lamps. This product range was soft-launched towards the very end of the previous year and the current year under review was the first full year of operation during year under review. Turnover achieved in this period was Rs.50 crores (previous year - Rs.3.82 crores).

It is also worthwhile to mention that battery input costs, after being soft during the previous year - started to increase gradually over the year. This was most significant in zinc - a key input material. Excise duty rate was also enhanced by 2% in the Union Budget 2010. These adverse impacts were to some extent neutralized by an overall stronger Rupee. The net adverse impact was passed on to the market - without any perceivable ill effect.

The manufacturing operations of your Company continued to focus on total quality management, safety, energy conservation and cost control. This helped your Company in achieving efficiency in the manufacturing function.

Operations at the manufacturing facility at Cossipore, Kolkata, were suspended in the previous year due to unjustified demands by a section of workers and their very aggressive stand, which continued to remain so. This had no impact on the operations of the Company, as supplies to the market were met by other units.

Operations were also suspended in the previous year at the manufacturing facility at Hyderabad, the facility being surplus to the Companys needs. The facility was formally closed from April 24,2010 in keeping with legal formalities. All workmen - barring a handful 24 - opted for a VRS scheme offered by the Company.

During the year your Company received an award from the Engineering Export Promotion Council for highest exports in thrust markets for thrust products (viz., batteries and flashlights).

Your Companys Noida unit was declared winner of Green Tech Foundations Silver Award in manufacturing sector for outstanding achievement in Environment Management.

Lighting Products

The Company started distributing compact fluorescent lamps (CFL) through the Companys distribution from June 2007. The Companys distribution which is at a tangible differentiation from usual electrical trade, and brand Eveready create a long term value - enhancing proposition in this business.

The Company also launched in April 2009, the full range of General Lighting Service (GLS) lamps - the normal mass market incandescent lamp. This market is stagnant on account of shift taking to CFL lamps - but still has considerable size, and the Company needed to enter this as it plans to be a full range player in the lighting products business. The Companys brand and distribution edge should be able to get it an attractive share of this market.

Net sales for the current year stood at Rs.91.54 crores with a growth of 151% over the previous year at Rs.36.41corres.

Packet Tea

The packet tea business continued with its steady performance through leveraging of the distribution network of the Company. Current share of the market stands at 1 - 6 per cent in the various markets of the country. Focus is currently being given to make the business profitable. As a compromise, some marginal turnover is being sacrificed. Sales turnover for the current year stood at Rs.75.94 crores - at a marginal decline against that of the previous year at Rs.81.67 crores.

Insect Repellents

The launch of Mosquito Coils and Liquid Vaporizers over the target markets across the country was completed in the previous year. The trade and consumer response to these products was encouraging. The business is still in a nascent stage. Current market share varies between 1 per cent and 3 per cent in the target markets. Turnover for the year under review was at Rs.11 crores.

Subsidiaries & Consolidated Financial Statements

The Company signed a Term Sheet on May 14, 2009 with C G Holding, France, for investment by the Company, both by way of equity and debt upto a maximum amount of 10 million Euro in an overseas Company, Novener SAS in order to acquire a controlling stake in Uniross SA, a French Company.

Uniross is engaged in the manufacturing and marketing of rechargeable batteries and allied products. Uniross has presence in various parts of the world and is particularly strong in Europe. It faced major financial difficulties prior to this acquisition on account of a high-cost acquisition not going as per plan and also on account of a commodity-led cost push. It currently continues to be loss making.

It has however a compelling case in terms of potential and the Company believes that it can be nursed back to sustainable profitability in the foreseeable future.

A sum of Rs.41.10 crores (equivalent to 6 million Euro) was remitted by the Company on June 27,2009 towards the equity stake of 80% and a sum of Rs. 6.27 crores (equivalent to 1 million Euro) was remitted on March 17, 2010 byway of debt. The Company effectively became the Holding Company of Uniross and its subsidiaries from July 1,2009.

Novener thus acquired a controlling stake of 97.3% in Uniross SA, which in turn has 100% stake in Uniross Batteries SAS, France which again, in turn, has 100% stake in Industrial - Uniross Batteries (PTY) Ltd., South Africa, Uniross Batteries GmbH Germany, Uniross Batteries Limited, UK, Zhongshan Uniross Industry Co. Limited, China, Everfast Rechargeables Limited, Hong Kong, Rechargeables Online SAS, France, Celltex Limited, Hong Kong, Uniross Batteries Corp., USAand Lognes Batteries Corp, USA. Uniross Batteries Corp. USA has 100% stake in North American Battery Corp, USAand Multiplier Industries Corp, USA. Novener also has 70% stake in Idea Power Limited, Hong Kong.

The addition of the above operation to your Company meant an addition of Rs.135. 43 crores in net sales and adding a net loss of Rs 14.98 crores. The effect of this is available in the Consolidated Accounts attached to this Report.

An overseas company, Everspark Hong Kong Private Ltd with a minimum paid up share capital of 100 shares of HK$ 1 each totaling to HK$ 100 was incorporated by the Company in Hong Kong on December 17, 2009, to be a wholly owned subsidiary of the Company. This was done with a view to obtain commercial benefits on the Companys sourcing of input materials and goods from China. However, this is at a feasibility exploration level and the subsidiary has not started trading yet.

The consolidated financial statements have been prepared in accordance with Accounting Standard 21 (AS-21) issued by the Institute of Chartered Accountants of India and include the financial numbers of your Companys subsidiaries, for the year under review. As required by Clause 32 of the Listing Agreement with the Stock Exchanges, the Audited Financial Statements together with the Auditors Report thereon are annexed and form part of this Annual Report.

In terms of the exemption granted by the Central Government, under section 212 (8) of the CompaniesAct, 1956, the accounts of the applicable subsidiary companies for the year 2009-10 and the related detailed information are not attached. Hard copy of the Annual Accounts of the applicable subsidiary companies and related other information shall be made available to the members seeking such information and shall also be kept open for inspection at the Registered Office of the Company during working hours.

The statement under section 212 of the Companies Act, 1956 is attached.

Transfer of lease

The Company had entered into an MOU on August 29,2007 with Housing Development & Infrastructure Limited (HDIL) for the transfer of its leasehold premises at Navi Mumbai for a consideration of Rs.115 crores. The Company had received the full consideration by the previous year, the proceeds of which were utilized for repayment of debt.

The assignment/ transfer was completed during the year under review and the net income effect of the transfer was thus recorded in the accounts for the year as an exceptional item.

Prospects

The financial results for the year were very encouraging and vindicated your Companys efforts.

Despite the difficulties faced by the batteries and flashlights businesses in the recent past, it is firmly believed that there has not been any change in the basic fundamentals of the market. The demand drivers and the potential offered by the presently low-consuming Indian market will continue to offer major potential for growth. Also, after the consumers initial difficulty in adjusting to the new high cost regime, the market seems to have come back to the consumption levels determined by fundamental demand.

The tremendous growth seen in the flashlights business in the recent past has imploded usership and will benefit battery consumption in the long term. Growth of flashlights also looks sustainable - though at a moderate pace. The recently introduced lanterns will add to turnover growth and profitability.

Other products like packet tea, insect repellents and lighting products are poised for a success in the future. These new products leverage your Companys existing brand and distribution and will play a key role in improving scale and profitability of your Companys business.

The pillars behind your Companys sustained good performance over time continue to be its fundamental strengths on distinct quality edge, penetrative distribution and effective marketing. These strength areas will continue to take the Company to a path of sustainable growth.

The cost structure of the Company is sensitive to 2 specific items of the broader economy-

1. Price of zinc, as this constitutes about 17% of raw material costs, and

2. US dollar exchange rate against Indian Rupee, as 40% of the cost of materials and goods is dollar denominated.

As a coincidence or otherwise, these 2 factors had been moving in opposite directions over the recent past and also during the year under review. Thus, the hardening zinc price was to some extent neutralized by the appreciating Rupee. However, any remaining adverse impact will have to be recovered from the market - as was done towards the end of this year, without any ill effect.

Also as the economy continues its gradual improvement, overall benefit

should also percolate to your Companys sales volumes. The economic measures taken by the Government focusing on rural and poorer sections of the society will benefit the Company as it is in the marketing of essential products consumed even by the poor and is deeply entrenched in rural distribution. All these factors are expected to combine for a further improved performance.

Convertible Warrants

An amount of Rs. 2.61 Crores representing the initial amount paid on allotment of 45,00,000 covertible warrants on preferential basis on October 17, 2007, has been forfeited on April 16, 2009, on the expiry of the time frame to opt for conversion.

Finance

Tight control was kept over the finances of your Company, with emphasis on reduction of debt. This, along with strict management of working capital helped your Company save interest charges.

Your Company met its financial commitments in servicing debt and repayments thereof in a timely manner. Capital expenditure programme was fully met.

A transfer of Rs. 100 crores was made to the General Reserves out of the amount available for appropriation. After providing for proposed dividend and Dividend Distribution Tax, profits left to be carried forward was at Rs. 38.06 crores.

Employee Relations

One of your Companys key strengths is its people. Relations with employees remained cordial and satisfactory. Your Board would like to place on record its appreciation of employees for their contributions to the business.

Your Company believes in a system of Human Resource Management which rewards merit based performance and playing an active role in improving employee skills. Actions during the year under review were supportive of this policy. Long-term wage settlements were concluded at the Taratalla unit.

A statement of particulars of employees as required under section 217 (2A) of the Companies Act, 1956 forms a part of this report as a separate Annexure. In terms of section 219 (1)(b)(iv) of the Act, this Report is being sent to all Members without the said annexure. Any member interested in taking inspection or obtaining a copy of the statement may contact the Secretary of the Company at its Registered Office during working hours.

Public Deposits

Your Company does not have any public deposit scheme and has repaid all Fixed Deposits that have matured and were claimed by depositors under the earlier scheme. Rs. 1.47 lakhs remain unencashed by the depositors as on March 31,2010.

Exports and Foreign Exchange Earnings and Outgo

During the year under review, your Company exported batteries totaling to a value of Rs. 2553.54 Lakhs (2008-09: Rs. 2545.92 Lakhs and flashlights totaling to a value of Rs. 471.81 Lakhs (2008-09 : Rs. 285.06 Lakhs).

Rs.Lakhs

31.03.2010 31.03.2009

Foreign Exchange Earnings 1792.56 1766.07

Foreign Exchange Outgo 13836.18 10963.73



Conservation of Energy and Technology Absorption

Astatement giving details of conservation of energyand technology absorption in accordance with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is annexed.

DirectorsResponsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors state as follows:

1. That in the preparation of the annual accounts for the financial year ended March 31,2010, the applicable accounting standards had been followed with no material departures;

2. 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 and of the profit or loss of the Company for that period;

3. 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 safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. That the Directors had prepared the annual accounts on a going concern basis.

Directors

In accordance with the Articles of Association of the Company, Mr. D. A. Nanda, Mr. S. Saha and Mr. S. Goenka will retire by rotation at the forthcoming Annual General Meeting, and being eligible, offer themselves for re-appointment.

Mr. S. Sarkar was appointed as Additional Director by the Board effective February 24, 2010. In terms of Article 116(1) of the Articles of Association of the Company Mr. S. Sarkar holds office until the forthcoming Annual General Meeting. Notice in writing under Section 257(1) of the Companies Act, 1956 has been received from a Member signifying his intention to propose Mr. Sarkar for election to the office of Director.

The above re-appointment of Mr. Sarkar is subject to the approval of the shareholders at the forthcoming Annual General Meeting.

Mr. V. Sridar resigned from the Board of Directors of the Company effective February 24, 2010. The Board records its appreciation of the valuable services rendered by Mr. Sridar during his tenure as Director.

On a Reference Application made by the Central Government to the Company Law Board (CLB) under Section 408 of the Companies Act, 1956, the CLB, by an order dated December 20,2004 directed the Central Government to appoint three Directors on the Companys Board for three years. As the CLBs order suffers from various legal infirmities, the Company, based on legal advice, has challenged this order of the CLB before the High Court at Calcutta, which has, by an interim order, stayed the operation of the CLBs order. The stay is continuing.

Auditors

Messrs. Deloitte Haskins & Sells retire as Auditors at the conclusion of the forthcoming Annual General Meeting and, being eligible, offer themselves for re-appointment.

Management Discussion and Analysis Report and Report on Corporate Governance

As required in terms of the Listing Agreement with Stock Exchanges a Management Discussion and Analysis Report and a Report on Corporate Governance are annexed.

For and on behalf of the Board Kolkata B. M. Khaitan

July 30,2010 Chairman

 
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