Profit Warning
The company issued a profit warning for the current financial period, due to the post election violence. The company, whose main plant is located in Nakuru, was directly affected by the violence that hit the town on 27^th January this year, but vowed to continue their operations never the less. Although, the plant did not suffer any direct damages some of their distributors and workers were affected.

1^st Dividend Payout
The company’s board went forth and recommended a dividend of Ksh.0.45 per share for all shareholders in the register as of close of business on March 10, 2008. This will be their first time to payout dividend to its shareholders since listing on the NSE. the dividend payout will be financed by a withdrawal of Sh94.5 million from the company’s retained earnings. The share price of Eveready has rise marginally on the bourse to stand at the current Ksh.7.65 per share, as investor set themselves to gain from the dividends.

Future Prospects
Eveready is faced with a very stiff competition from cheap imported batteries from china and technologically improved rechargeable batteries. The company is in the process of diversifying to other products such as shaving razors, blades, and accessories under ‘Schick’ brand name to improve on its future revenue prospects.

Recently during a CEO’s meeting to deliberate on how to solve the political crisis facing Kenya, Eveready’s managing director, Steven Smith, was very pessimistic on the future of the company in Kenya. The company is asking its self some very hard questions like what are the advantages to stay in Kenya after their productivity in January went down by as much as 50 percent.

Financial Statements

Management Commentary on Results
Eveready has seen value growth in manufactured products (8%) and purchased products (17%) over prior year. However, the year witnessed unprecedented increase in zinc price, which led to an additional Ksh 200m in manufacturing costs. Shareholder services cists resulted in an increase in operating expenses of Ksh 30m. These challenges resulted in the profit before tax for FY2007 dropping by 23% compared to FY2006. Despite these challenges, we were able to see growth in sales volume, especially for the high value purchased products. We also saw significant growth in the export market although its returns were reduced by the strong Kenya shilling.

We will continue to focus on cost reduction efforts, equipment refurbishment (Ksh 42m was spent in FY2007) and product diversification to mitigate the threat posed by high labor cost, poor infrastructure and low priced competition. We are also focused on further export market growth and introduction of new products into the Kenyan market. We have hedged several raw materials to take advantage of long term savings which has negatively impacted on our cash position in the short-term. This is expected to reverse later in FY2008 when the benefits will have been realized.

Post election violence witnessed in the country has significantly affected some of our major business segments (Rift Valley, Western Kenya and Nyanza) and we expect business normality to resume over a period of time. In the meantime, the slowdown in business will impact FY2008 adversely.

The Board will be recommending at the Annual General Meeting to pay a final dividend of Ksh 0.45 per share for all shareholders on the register as of close of business on March 10, 2008. The dividend will be paid on May 30, 2008. The AGM is scheduled for Friday, March 14, 2008 at 11:00am in Nakuru.

Company Secretary