REPORT OF THE DIRECTORS

For the financial year ended March 31, 2016

Your 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.

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. t he 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

B. M. Khaitan

Chairman

Kolkata

May 06, 2016