DIRECTORS' REPORT

3. Performance at a glance

• During the year under review, the Revenue from
operations amounted to H 94,315.30 Lakhs as
against H 86,503.09 lakhs in the previous year.

• EBITDA for the year stood at H 8,028.46 Lakhs as
against H 6,578.15 Lakhs during the previous year.

• Depreciation for the year stood at H 2,394.98
Lakhs as against H 2,309.43 Lakhs during the
previous year.

• Interest expense for the year stood at H 179.33
lakhs as against H 518.68 lakhs during the
previous year of Profit before Tax stood at
H 6,125.89 lakhs as against H 4,394.68 Lakhs
during the previous year.

• No material changes or commitments have
occurred between the end of the Financial
Year and the date of this Report, which affects
the Financial Statements of the Company with
respect to the reporting year.

4. Dividend

With a view of conserving resources to support
future growth and expansion, the Board has
decided not to recommend any dividend for the
F.Y. 2025-26.

In terms of the provisions of the SEBI (Listing
Obligations and Disclosure Requirements)
Regulations, 2015, as amended (“the Listing
Regulations”), the Company has formulated
a Dividend Distribution Policy. The said policy is
enclosed as Annexure-1 to this Report. It is also
available on the Company's website and can be
accessed athttps://butterflyindia.com/wp-
content/uploads/2021/04/Dividend-Distribution-
Policy-20.10.2020.pdf

5. Transfer to reserves

Your Directors do not propose to transfer any
amount to the General Reserve.

6. Report on Management
Discussion and Analysis (“MDA”)

As required under Regulation 34, read with Schedule
V (B) of the Listing Regulations, report on MDA is
presented in a separate section, forming part of
this Annual Report and are restricted to the areas,
which are relevant to the current scenario and
outlook of the Company.

7. Share capital

During the year under review, there was no change
in the share capital of the Company. The total paid-
up share capital of the Company as on March 31,
2026 stood at H 17,87,95,510 divided into 1,78,79,551
equity shares of H 10 each.

Your Company has neither issued any shares
with differential rights as to dividends, voting or
otherwise nor issued any sweat equity shares.

8. Financial liquidity

Cash and cash equivalent as on March 31, 2026
stood at H 1,300.67 Lakhs vis-a-vis H 966.70 Lakhs
in the previous year. The Company's working
capital management is robust and involves a well
organised process, which facilitates continuous
monitoring and control over receivables,
inventories and other parameters.

9. Credit rating

CRISIL, a credit rating agency has provided the
Company's credit rating for its bank facilities.
During the financial year under review there was
no change in the credit rating. The details of the
ratings are as follows:

10. Public deposits

No public deposits have been accepted or renewed
by your Company during the Financial Year under
review, pursuant to the provisions of Section 73 and
74 of The Companies Act, 2013 ("the Act") read
with the Companies (Acceptance of Deposits)
Rules, 2014. Hence, the requirement for furnishing of
details relating to deposits covered under Chapter
V of the Act or the details of deposits which are
not in compliance with the Chapter V of the Act is
not applicable.

11. Particulars of loans, guarantees
or investments

During the year under review, the Company has not
granted any Loans and/ or given any Guarantees
and/ or provided any security and/or made any
investments under the provisions of Section 186 of
the Act, read with Companies (Meetings of Board
and its Powers) Rules, 2014.

12. Internal control systems

12.1 Internal controls and its adequacy

Your Company prioritises reinforcing financial and
operational controls to enhance transparency,
accountability and efficiency in its processes.
Your Company adheres to an internal control
framework that includes key process coverage
that impacts the reliability of financial reporting,
periodic control testing to assure design and
operational effectiveness, implementation of
remedial measures and regular monitoring by
Senior Management and the Audit Committee
of the Board. Internal audits are conducted on
quarterly basis and any design deficiencies or
operational inefficiencies, if any, are reported
and improvement measures are recommended.
The adequacy of controls is reviewed by the Audit
Committee of the Board and specific processes
are assessed for improvement in systems
and outcomes.

12.2 Internal controls over financial reporting

The Company's internal financial controls
commensurate with the scale and complexity of
its operations. These systems are designed keeping
in view the nature of activities carried out at each
location and the various business operations.
The Company has documented a robust and
comprehensive internal control system for all the
major processes to ensure reliability of financial
reporting, timely feedback on achievement of
operational and strategic goals, compliance
with policies, procedures, laws and regulations,
safeguarding of assets and economical and
efficient use of resources.

A certificate from the Manager & Chief
Business Officer and Chief Financial Officer
("CFO”) forms part of this Annual Report on the
adequacy of internal financial control systems
and procedures.

13. Vigil Mechanism/ Whistle-Blower
Policy (“WB Policy”)

The Company has established a reputation for
doing business with integrity and maintained
zero tolerance towards any form of unethical
behaviour. Your Company has formulated a Vigil
Mechanism and WB Policy intending to provide
a mechanism for employees to report violations.
It also assures them of the process that will be
observed to address the reported violation(s).
The Vigil Mechanism and WB Policy also lays
down the procedures to be followed for tracking
compliant(s), giving feedback(s), conducting
investigation(s), and taking disciplinary action(s), if
required. It also provides assurance and guidelines
on confidentiality of the reporting process and
protection from reprisal to complainant(s). No
personnel have been denied access to the Audit
Committee of the Board. The Audit Committee
oversees the functioning of the Vigil Mechanism
and WB Policy. Protected disclosures can be made
by a Whistle Blower through several channels to
report actual or suspected fraud(s) and violation(s)
under the Company's COC. The Vigil Mechanism
and WB Policy also provides a mechanism to
encourage and protect genuine Whistle Blowing
amongst the Vendors.

Any incident that is reported is investigated and
suitable action, if any, is undertaken in line with the
Vigil Mechanism and WB Policy.

The Vigil Mechanism and WB Policy of your Company
is available on the website of the Company and can

be accessed at the weblinkhttps://butterflyindia.
com/wp-content/uploads/2022/09/Whistle-
Blower-Policy 28092022.pdf

Your Company received 11 (Eleven) Whistle-Blower
complaints during the F.Y. 2025-26 and suitable
action was taken in accordance with the WB Policy.

14. Holding Company

Pursuant to Section 2(87)(ii) of the Act,
Crompton Greaves Consumer Electrical
Limited (“Crompton”), the holding Company,
incorporated on February 25, 2015 inter alia,
engaged in the business of manufacturing, trading,
selling and distribution of fans, lighting, Pumps,
solar rooftops and appliances. The equity shares
of the Crompton are listed on BSE Limited (“BSE”)
and National Stock Exchange Limited (“NSE”).

Total revenue of Crompton on a consolidated basis
for the F.Y. ended March 31, 2026, was H 8,161.15
Crore (including H 65.63 Crore as other income). The
loss was H (230.76) Crore as compared to H 564.08
Crore Profit in the previous year.

Pursuant to Section 2(87)(ii) of the Act, Crompton
holds 75% of the paid up equity share capital of
the Company.

15. Subsidiaries, associates and joint
venture companies

The Company does not have any Subsidiary(ies),
Associate(s) or Joint Venture during the financial
year or at any time after the closure of the financial
year and till the date of this report.

16. Board of Directors & Key
Managerial Personnel

Your Company's Board consists of distinguished
professionals with a track record of integrity and
excellence. Their collective experience, strategic
acumen, and leadership strength contribute
significantly to the Company's governance and
growth. The Board of your Company comprises of
6 (Six) members as on the date of this Report.

16.1 Directorate

a) Appointment(s), Re-appointment(s), and
Retirement by Rotation of Directors

The appointment and remuneration
of Directors are governed by the
Policy devised by the Nomination and
Remuneration Committee ("N&RC”) of
your Company. The detailed Nomination

and Remuneration Policy are available on
the website of the Company and can be
accessed athttps://butterflyindia.com/
wp-content/uploads/2025/05/BGMAL-
Policy-for-Appointment-Evaluation-OF-
BOD-Senior-Management.pdf.

b) Retirement by rotation and subsequent
re-appointment

In accordance with the provisions of Section
152 of the Act and the Articles of Association
of the Company. Mr. Nithiyanandam
Anandkumar (DIN: 10381096) is liable to
retire by rotation at the forthcoming Annual
General Meeting (“AGM”) and, being eligible,
has offered himself for re-appointment.
The Boord recommends re-appointment
of Mr. Nithiyanandam Anandkumar for
the consideration of the Members of the
Company at the forthcoming AGM. The
relevant details, including brief profile of
Mr. Nithiyanandam Anandkumar is included
separately in the Notice of AGM and Report
on Corporate Governance of this Company
forming part of the Annual Report.

c) Retirement & Cessation

During the year under review Ms. Maheshwari
Mohan (DIN: 07156606), Non-Executive
Independent Director, retired w.e.f. August
20, 2025. The Board placed on record its
appreciation for the contribution made
by her during her tenure as Non-Executive
Independent Director of the Company.

Mr. Shantanu Khosla, Non-Executive, Non¬
Independent Director of the Company
(DIN: 00059877), who was appointed as
the authorised representative of Crompton
Greaves Consumer Electricals Limited
(Crompton), the holding company of the
Company and whose tenure on the Board
of Crompton ended on December 31, 2025.

Accordingly, he has tendered his resignation
from the Board of the Company as well,
with effect from the close of business hours
on December 31, 2025.

16.2 Key Managerial Personnel (“KMP”)

During the year under review, Mr. Viral Sarvaiya,
Company Secretary & Compliance Officer of the
Company, resigned w.e.f. April 7, 2025.

The Board in its meeting held on May 13, 2025, on the
recommendation of Nomination and Remuneration
Committee and pursuant to Section 203 of the Act

and the Regulation 6 of the Listing Regulations and
Regulation 9 of the SEBI (Prohibition of Insider Trading)
Regulations 2015, appointed Mr. Jayant Borde
(A-61954) as the Company Secretary & Compliance
Officer of the Company w.e.f. May 13, 2025.

In accordance with the provisions of Section
2(51) and Section 203 of the Act read with the
Companies (Appointment & Remuneration of
Managerial Personnel) Rules. 2014 including any
statutory modification(s) or re-enactment(s)
thereof for the time being in force the following
are the KMPs of the Company:

1. Ms. Swetha Sagar G, Manager & Chief
Business Officer ("Manager & CBO");

2. Mr. V. A. Joseph. Chief Financial Officer;

3. Mr. Jayant Barde, Company Secretary &
Compliance Officer.

16.3 Independent Directors

The Independent Directors of the Company have
submitted requisite declarations confirming that
they continue to meet the criteria of independence
as prescribed under Section 149(6) of the Act and
Regulation 16(1)(b) of the Listing Regulations.
The Independent Directors have also confirmed
that they have complied with Schedule IV of the
Act and the Company's Code of Conduct. The
terms and conditions of appointment of the
Independent Directors are placed on the website
of the Company and can be accessed athttps://
butterflyindia.com/investor-relations.

The Board is of the opinion that the Independent
Directors of the Company possess requisite
qualifications, experience and expertise in the
varied fields and holds high standards of integrity.

All the Independent Directors of the Company
have registered themselves with Indian Institute of
Corporate Affairs. Manesar ("IICA”) for the inclusion
of their names in the data bank maintained by
IICA. In terms of Section 150 of the Act read with
the Companies (Appointment & Qualification of
Directors) Rules, 2014 as amended, since all the
Independent Directors of the Company have
served as Directors for a period of not less than 3
(Three) years on the Board of listed Company(ies)
as on the date of inclusion of their names in the
database, they are not required to undertake
online proficiency self-assessment test conducted
by the Institute.

As on the date of this report, Mr. P. M. Murty,
Ms. Smita Anand, and Mr. Kunnawalkam Elayavalli

Ranganathan are the Independent Directors of
the Company. The details of the membership of
committees and the qualifications and expertise
of all the Directors are covered in the Report on
Corporate Governance which forms part of this
Annual Report.

16.4 Non-Independent Directors

As on the date of this report, Mr. Promeet
Ghosh, Mr. Kaleeswaran Arunachalam, and
Mr. Nithiyanandam Anandkumar are the Non¬
Executive, Non-Independent Directors of
the Company.

Mr. Promeet Ghosh, Non-Executive, Non¬
Independent Director liable to retire by rotation
was re-appointed at the Annual General Meeting
of the Company held on August 5, 2025.

16.5 Board effectiveness Familiarisation
Programme for Independent Directors

Your Company has in place a structured induction
programme for induction of new Directors as well as
other initiatives to update the existing Directors on
a continuous basis. The Familiarisation Programme
aims to provide insights into the Company to
enable the Independent Directors to understand
its business in depth, to acclimatise them with
the processes, business and functionaries of the
Company and to assist them in performing their
role as Independent Directors of the Company. The
programme of the Company provides information
relating to the Company, operational activities,
business model of the Company, geographies in
which Company operates, etc. The programme also
intends to improve awareness of the Independent
Directors on their roles, rights, responsibilities
towards the Company. Further, the Familiarisation
Programme also provides information relating
to the financial performance of the Company,
budget and control process of the Company.

Regular presentations and updates on relevant
statutory changes encompassing economic
outlook; market trends; peer trends; changes in
laws where Company is operating are made to
the Directors at regular Board/ Committee(s)
Meetings of the Company.

The Manager & CBO along with senior leadership
team makes presentation(s) on the performance
& strategic initiatives of the Company. The
Familiarisation Programme, topics covered and
details of programmes conducted during the year
under review have been disclosed on the website

of the Company athttps://butterflyindia.com/
investor-relations.

Evaluation of the Board's performance

During the year, the Board undertook its annual
evaluation in line with the Company's governance
framework and regulatory requirements. The
process, conducted through a structured
questionnaire, enabled Directors to provide candid
and independent feedback on the effectiveness of
the Board, its committees and individual members.

The results reaffirmed that the Board continues to
operate with high levels of trust, independence and
ethical conduct. Directors highlighted the Board's
straightforward and constructive culture, its strong
strategic orientation, and the appropriateness
of its composition in terms of skills, experience
and diversity.

The Committees were also assessed as functioning
effectively and discharging their responsibilities in
accordance with their charters.

At the same time, Directors identified a few focused
areas for further strengthening — particularly
keeping more time for deeper strategic
deliberations, improved timeliness and crispness
of pre-reads, and greater oversight of technology,
a need for increased exposure to senior executives
etc. was also noted.

The Board also noted that the actions identified
in previous questionnaire-based evaluations had
been implemented. The Board remains committed
to continuously enhancing its effectiveness and
governance standards in support of the Company's
long-term performance.

Remuneration policy and criteria for selection of
candidates for appointment as Directors, KMP's
and Senior Management

Pursuant to the provisions of Section 178 of the Act
and Regulation 19 of the Listing Regulations, the
Company has in place a policy for remuneration
of Directors, KMP's and Members of Senior
Management as well as a well-defined criteria
for the selection of candidates for appointment
to the said positions, which has been approved
by the Board based on the recommendation of
N&RC. The Policy broadly lays down the guiding
principles, philosophy and the basis for payment of
remuneration to the Executive and Non-Executive
Directors (by way of sitting fees and commission),
KMP's and members of Senior Management.

The criteria for the selection of candidates for
the above positions cover various factors and
attributes, which are considered by the N&RC and
the Board of Directors while selecting candidates.
The policy on remuneration of Directors, KMP's
and Senior Management is given as an Annexure
to Report on Corporate Governance and is also
available at the website of the Company and
can be accessed athttps://butterflyindia.com/
wp-content/uploads/2025/05/BGMAL-Policy-
for-Appointment-Evaluation-OF-BOD-Senior-
Management.pdf.

17. Number of Meetings of the Board
& its Committee(s)

17.1 Board Meetings

Regular Meetings of the Board and its Committee(s)
are held to discuss and decide on various business
policies, strategies, financial matters, digitalisation,
governance and other businesses. The schedule
of the Board/ Committee Meetings to be held
in the forthcoming financial year is circulated to
the Directors in advance to enable them to plan
their schedule for effective participation in the
meetings. Due to business exigencies, the Board
also approves several proposals by circulation as
and when required.

Your Board of Directors met 6 (Six) times during
the F.Y. 2025-26. The details of the meetings and
the attendance of the Directors are mentioned in
the Report on Corporate Governance which forms
part of this Annual Report.

17.2 Board Committee(s)

The Board has established Committee(s) as a
matter of good corporate governance practice
and as per the requirements of the Act and the
Listing Regulations.

The Company has the following 5 (Five) Board
level Committee(s), which have been established
in compliance with the requirements of the
business and relevant provisions of applicable laws
and statutes:

1. Audit Committee

2. Nomination and Remuneration Committee
(“N&RC”)

3. Corporate Social Responsibility Committee
(“CSR Committee”)

4. Risk Management Committee (“RMC”)

5. Stakeholder Relationship Committee (“SRC”)

The composition, terms of reference, number of
meetings held and business transacted by the
Committee(s) are given in the Report on Corporate
Governance which forms part of this Annual Report.

The details of Composition of the Mandatory
Committee(s) of the Board are as follows:

17.2.1 Audit Committee

The Audit Committee comprises of 4 (Four) Members
out of which 3 (Three) are Independent Directors.
The Committee is chaired by Mr. K. E. Ranganathan
(Non-Executive, Independent Director). The other
Members of the Committee are Mr. P. M. Murty
(Non-Executive, Independent Director), Ms. Smita
Anand (Non-Executive, Independent Director),
and Mr. Promeet Ghosh (Non-Executive, Non¬
Independent Director).

Details of the roles and responsibilities of the Audit
Committee, the particulars of Meetings held and
attendance of the Members at such Meetings, are
given in the Report on Corporate Governance,
which forms part of this Annual Report.

During the year under review, all the
recommendations made by the Audit Committee
were accepted by the Board.

17.2.2 Nomination and Remuneration
Committee (“N&RC”)

The N&RC comprises of 3 (Three) Members out
of which 2 (Two) Members are Independent
Directors. The Committee is chaired by Ms. Smita
Anand (Non-Executive, Independent Director).

The other Members of the Committee are
Mr. P. M. Murty (Non-Executive, Independent
Director), and Mr. Promeet Ghosh (Non-Executive,
Non-Independent Director).

Ms. Maheshwari Mohan (Non-Executive,
Independent Director), ceased to be a
Committee Member w.e.f. August 20, 2025,
pursuant to her retirement as Director of the
Company upon completion of second term as
Independent Director.

Details of the roles and responsibilities of the N&RC,
the particulars of Meetings held and attendance
of the Members at such Meetings, are given in the
Report on Corporate Governance, which forms
part of this Annual Report.

N&RC is inter alia responsible for, recommendation
and approval of appointment and remuneration of
the Directors, KMP's and Senior Management.

N&RC is also entrusted with the responsibility of
framing the criteria for evaluation of the individual
Directors, Chairman of the Board, the Board
as a whole, its Committees and its Manager &
CBO. It also routinely evaluates the working and
effectiveness of the Board and manages the
succession planning for Board Members and KMP's.

During the year under review, all the
recommendations made by the N&RC were
accepted by the Board.

17.2.3 Corporate Social Responsibility
Committee (“CSR Committee”)

The CSR Committee comprises of 3 (Three) Members
out of which 2 (Two) are Independent Directors.

During the year under review, Mr. Kaleeswaran
Arunachalam (Non-Executive, Non-Independent
Director), was appointed as Member of the
Committee and designated as the Chairperson
of the Committee w.e.f. January 1, 2026. The other
Members of the Committee are Mr. P. M. Murty
(Non-Executive, Independent Director), and
Ms. Smita Anand (Non-Executive, Independent
Director)

Ms. Maheshwari Mohan (Non-Executive,
Independent Director), ceased to be a Committee
Member w.e.f. August 20, 2025, pursuant to her
retirement as Director of the Company upon
completion of second term as Independent Director.

Mr. Shantanu Khosla (Non-Executive, Non¬
Independent Director), ceased to be a Committee
Chairperson/ Member w.e.f. December 31,
2025, pursuant to his resignation as Director of
the Company.

Details of the roles and responsibilities of the CSR
Committee, the particulars of Members held and
attendance of the Members at such Meetings, are
given in the Report on Corporate Governance,
which forms part of this Annual Report.

In compliance with Section 135 of the Act read with
the Companies (Corporate Social Responsibility
Policy) Rules, 2014 as amended, the Company has
set up CSR Committee and statutory disclosures
with respect to the CSR Committee and an Annual
Report on CSR Activities forms part of this Report
as Annexure-2. The CSR Policy as recommended
by the CSR Committee and as approved by the
Board is available on the website of the Company
and can be accessed athttps://butterflyindia.
com/wp-content/uploads/2021/04/CSR-
POLICY-20.10.2020.pdf. During the year under
review, all the recommendations made by the CSR
Committee were accepted by the Board.

17.2.4 Stakeholders’ Relationship Committee
(“SRC”)

As on March 31, 2026, the SRC comprises of 4
(Four) Members out of which 1 (One) Member is
Independent Director.

During the year under review, Mr. Kaleeswaran
Arunachalam (Non-Executive, Non-Independent
Director), was appointed as Member of the
Committee and designated as the Chairperson
of the Committee w.e.f. August 21, 2025. The
other Members of the Committee are, Ms. Smita
Anand (Non-Executive Independent Director),
Mr. Nithiyanandam Anandkumar (Non-Executive
Non-Independent Director) and Mr. Promeet Ghosh
(Non-Executive Non-Independent Director).

Ms. Maheshwari Mohan (Non-Executive,
Independent Director), ceased to be a Committee
Chairperson/ Member w.e.f. August 20, 2025,
pursuant to her retirement as Director of the
Company upon completion of second term as
Independent Director.

Details of the roles and responsibilities of the SRC,
the particulars of Meetings held and attendance
of the Members at such Meetings are given in the
Report on Corporate Governance, which forms
part of this Annual Report.

During the year under review, all the
recommendations made by the SRC were
accepted by the Board.

The Board of Directors, at its meeting held on
August 4, 2025, dissolved the Share Transfer
Committee (“STC”) in view of various amendments
introduced by SEBI relating to digitalisation and
the prohibition on transfer of physical shares.

17.2.5 Risk Management Committee (“RMC”)

The RMC comprises of 4 (Four) Members.
The Committee is chaired by Mr. P. M. Murty
(N on-Executive Independent Director).
The other Members of the Committee are
Mr. K . E. Ranganathan (Non-Executive Independent
Director), Ms. Smita Anand (Non-Executive
Independent Director), and Mr. Kaleeswaran
Arunachalam (Non-Executive Non- Independent
Director).

Ms. Maheshwari Mohan (Non-Executive,
Independent Director), ceased to be a
Committee Member w.e.f. August 20, 2025,
pursuant to her retirement as Director of the
Company upon completion of second term as
Independent Director.

Mr. Shantanu Khosla (Non-Executive Non¬
Independent Director), ceased to be a Committee
Member w.e.f. December 31, 2025, pursuant to his
resignation as Director of the Company.

Details of the roles and responsibilities of the RMC,
the particulars of meetings held and attendance
of the Members at such Meetings, are given in the
Report on Corporate Governance, which forms
part of this Annual Report.

During the year under review, all the
recommendations made by the RMC were
accepted by the Board.

RMC assists the Board in monitoring and reviewing
the risk management plan and implementation of
the risk management and mitigation framework
of the Company. The main objective of the RMC
is to assist the Board in fulfilling its corporate
governance oversight responsibilities with regard
to the identification, evaluation and mitigation of
risks including risks related to cyber security.

18. Risk Management Framework

In the realm of today's dynamic economic
environment, navigating risk is critical aspect of our
sustainable growth objective. Our commitment
to effective risk management is not just the
cornerstone of our operations but a testament
to our dedication to stakeholders' trust and long¬
term success. Developing an agile and robust
risk management framework will enable us to
overcome obstacles, innovate and deliver value to
consumers in rapidly changing market landscapes.
In this section, we delve into our risk management
framework, highlighting the proactive measures
undertaken to identify, assess and mitigate
potential threats. By embracing this framework,
we strive to enhance value creation, safeguard
assets and capitalise on opportunities amidst an
ever evolving business landscape. The Board has
formulated the Risk Management Policy identifying
the elements of risk that the Company may
face, such as strategic, financial, credit, market,
liquidity, security, property, legal, regulatory and
other risks, pursuant to the provisions of Section
134(3)(n) of the Act, which has been exhibited
on the Company's website and can be accessed
athttps://butterflyindia.com/wp-content/
uploads/2022/04/Risk-Management-Policy.pdf.

19. Particulars of contracts or
arrangements with related parties

In accordance with the requirements of the Act
and the Listing Regulations, your Company has
a Policy on Related Party Transactions (“RPTs”)
uploaded on the Company's website and can
be accessed athttps://butterflyindia.com/wp-
content/uploads/2026/06/BGMAL-RPT-Policy.pdf.

All the RPTs are placed before the Audit Committee
for its review and prior approval and also before
the Board for its noting and approval, wherever
required. Prior omnibus approval of the Audit
Committee is obtained for all the transactions
which are of a foreseen and repetitive nature. A
statement giving details of all RPTs is placed before
the Audit Committee for their noting/ approval on
quarterly basis.

There were no material significant transactions
with related parties during the financial year as
per the last audited financial statements.

Pursuant to SEBI Master Circular dated November
11, 2024, and SEBI Circular No. SEBI/HO/CFD/
CFD-PoD-2/P/CIR/2025/93 dated June 26,
2025, required listed entities to follow “Minimum
information to be provided to the Audit Committee
and Shareholders for approval of Related Party
Transactions”, formulated by Industry Standards
Forum, the Company has placed all the relevant
details as required under "Industry Standards
on "Minimum information to be provided to the
Audit Committee and Shareholders for approval
of Related Party Transactions" (“RPT Industry
Standards”) before the Audit Committee/ Board
at the time of obtaining RPTs approval.

During the year under review, there were no
material related party transaction which were
entered by the Company. The details pertaining
to RPTs during the year is given in Form AOC-2, as
a good corporate governance practice, enclosed
as Annexure - 3.

None of the Directors and the KMP's has any
pecuniary relationships or transactions vis-a-vis
the Company. All RPTs are mentioned in the notes
to accounts. The Directors draw attention of the
Members to the Notes to the financial statements
which sets out the disclosure for RPT's.

20. Transfer to Investor Education
and Protection Fund (“IEPF”)

Pursuant to the applicable provisions of the Act,
read with the IEPF Authority (Accounting, Audit,

Transfer and Refund) Rules, 2016 (“the IEPF
Rules”), all unpaid or unclaimed dividends are
required to be transferred by the Company to the
IEPF established by the Government of India, after
completion of 7 (Seven) years. Further, according to
the IEPF Rules, the shares on which dividend has not
been paid or claimed by the Members for 7 (Seven)
consecutive years or more shall also be transferred
to the demat account of the IEPF Authority.

During the year under review, as seven years have
not yet elapsed from the date of declaration and
payment of any dividend, there was no transfer of
unpaid dividend or the corresponding shares on
which dividend remains unpaid or unclaimed.

Further, in F.Y. 2023-24, in compliance with the
applicable provisions of the Act and IEPF Rules, the
Company transferred an unclaimed dividend of
H 5,82,689 (Rupees Five Lakhs Eighty Two Thousand
Six hundred and Eighty Nine Only) for F.Y. 2015-16
to the IEPF Fund. Additionally, 2,97,583 (Two Lakhs
Ninety Seven Thousand Five hundred and Eighty
Three) equity shares of H 10 ( Rupees Ten Only)
each, for which dividends remained unclaimed for
7 (Seven) consecutive years, were also transferred
to the IEPF Authority's demat account.

Members may reclaim both the unclaimed dividend
and corresponding shares, along with any accrued
benefits, by following the procedure prescribed
under Rule 7 of the IEPF Rules.

21. Significant and material orders
passed by the Regulators or
Courts or Tribunals, Statutory
and Quasi-Judicial Body

No significant or material orders were passed by
the Regulators, Courts, Tribunals, Statutory and
Quasi- Judicial Body that would impact the going
concern status and Company's operations in
the future.

22. Risk arising out of litigation,
claims and uncertain tax
positions

The Company is exposed to a variety of different
laws, regulations, positions and interpretations
thereof which encompasses direct taxation and
legal matters. In the normal course of business,
provisions and contingencies may arise due to
uncertain tax positions and legal matters.

Based on the nature of matters, the management
applies significant judgement when considering

evaluation of risk, including how much to provide
for the potential exposure of each of the matters.

These estimates could change substantially
over time as new facts emerge as each matter
progresses, hence these are reviewed regularly.

For matters where expert opinion is required, the
Company involves the best legal advise.

23. Auditors

a) Statutory Auditors

M/s. ASA & Associates LLP, Chartered Accountants
(Firm Registration Number: 009571N/N500006),
were appointed as Statutory Auditors of the
Company by the shareholders of the Company at
the 35^th Annual General Meeting (“AGM”) held on
July 14, 2022 to hold office as Statutory Auditors
for a second term of 5 (Five) consecutive years,
commencing from the conclusion of the 35^th AGM
till the conclusion of the 40^th AGM.

The Board at their Meeting held on May 11, 2026,
and basis the recommendation of the Audit
Committee approved a remuneration of M/s. ASA
& Associates at H 35 Lakhs for the F.Y. 2026-27.

The Auditors' Report for the F.Y. 2025-26 does
not contain any reservation, qualification or
adverse remark, on the financial statements of
the Company. Auditors' Report is self-explanatory
and therefore, does not require further comments
and explanation. The report given by the auditors
on the financial statements of the Company form
part of this Annual Report.

Further, in terms of Section 143 of the Act read
with the Companies (Audit and Auditors) Rules,
2014, as amended notifications/ circulars issued
by the Ministry of Corporate Affairs from time to
time, no fraud has been reported by the Auditors
of the Company where they have reason to believe
that an offence involving fraud is being or has
been committed against the Company by officers
or employees of the Company and therefore no
details are required to be disclosed under Section
134(3)(ca) of the Act.

The Audit Committee reviews the independence
and objectivity of the Auditors and the
effectiveness of the Audit Process.

b) Cost Auditors

Pursuant to Section 148 of the Act read with the
Companies (Cost Records and Audit) Amendment
Rules, 2014, your Company is required to
maintain cost records as specified by the Central

Government. Accordingly, the Company has made
and maintained such cost accounts and records
in the prescribed manner. The records maintained
by the Company under Section 148 of the Act are
required to be audited by a Cost Accountant.

The Board at its Meeting held on May 11, 2026, based
on the recommendation of the Audit Committee,
approved the appointment of M/s. S. Mahadevan
& Co, Cost Accountants (Firm Registration Number:
000007), as the Cost Auditors of the Company to
conduct audit of the cost records of the Company
for the F.Y. 2026-27.

A remuneration of H 2.25 Lakhs plus applicable taxes
and out-of-pocket expenses, has been fixed for the
Cost Auditors subject to the ratification of such
fees by the Members at the ensuing AGM.

Accordingly, the matter relating to the ratification
of the remuneration payable to the Cost Auditors
for the F.Y. 2026-27 will be placed at the ensuing
AGM. Your Company has received consent and
eligibility certificate from M/s. S. Mahadevan & Co.

M/s. S. Mahadevan & Co., have confirmed that the
cost records of the Company for the F.Y. 2025-26,
are free from any disqualifications as specified
under Section 141(3) and proviso to Section 148(3)
read with Section 141(4) of the Act.

c) Secretarial Auditors & Secretarial Audit
Report

Pursuant to the provisions of Section 204 of the
Companies Act, 2013, read with the Companies
(Appointment and Remuneration of Managerial
Personnel) Rules, 2014 and Third amendment
to the Listing Regulations, as per Regulation
24(1)(b), the Board, at its meeting held on May
13, 2025, and based on the recommendation of
the Audit Committee, appointed M/s Alagar &
Associates LLP, (Formerly known as M/s M. Alagar
& Associates), Practicing Company Secretaries
(ICSI Unique Code: L2025TN019200), as Secretarial
Auditors of the Company to conduct the audit of
the Secretarial records of the Company for a period
of consecutive 5 (Five) Financial Years i.e. from F.Y.
2025-26 to F.Y. 2029-30, which was subsequently
approved by the Members of the Company in the
AGM held on August 5, 2025.

Pursuant to the provisions of Regulation 24A of the
Listing Regulations read with the SEBI Circulars
issued in this regard, M/s Alagar & Associates
LLP, has undertaken an audit for the F.Y. 2025-26
for all applicable compliances as per the Act,

SEBI Regulations and circulars/ guidelines issued
thereunder and other applicable laws.

The Board at their Meeting held on May 11,
2026, and basis the recommendation of the
Audit Committee approved a remuneration of
M/s. Alagar & Associates LLP at H 1.4 Lakhs for the
F.Y. 2026-27.

The Secretarial Audit Report for the FY 2025-26 is
annexed herewith as Annexure-4 to this Report.
There has been no qualification, reservation, or
adverse remark given by the Secretarial Auditors
in their Report.

d) Internal Auditors

Pursuant to the provisions of Section 138 of the
Act, the Board, at its meeting held on May 11,
2026, based on the recommendation of the
Audit Committee, approved the appointment of
M/s. Ernst & Young to conduct the internal audit of
your Company for the F.Y. 2026-27.

24. Material changes and
commitments affecting
financial position between the
end of the financial year and
date of the report

No material changes or commitments have
occurred between the end of the Financial Year
and the date of this Report, which affects the
Financial Statements of the Company with respect
to the reporting year.

25. Enhancing stakeholders’ value

Your Company is dedicated towards generating
sustainable value and ensuring meaningful returns
for its stakeholders. Accordingly, the Company is
dedicated to achieving high levels of operating
performance, cost competitiveness, and striving
for excellence in all areas of operations.

The Company firmly believes that its success in the
marketplace and good reputation is among the
primary determinants of stakeholders value.

Its close relationship with customers and a
deep understanding of their challenges and
expectations drive the development of new
products and services. Anticipating customer
requirements early and being able to address them
effectively requires a strong commercial backbone.

Your Company continues to develop this strength
by institutionalising sound commercial processes

and building world-class commercial capabilities
across its marketing and sales teams.

The Company uses an innovative approach in the
development of its products and services, as well
as execution of growth opportunities.

The Company is also committed to creating
value for all its stakeholders by ensuring that its
corporate actions positively impact the economic,
societal and environmental dimensions of the triple
bottom line.

27. Business Responsibility and
Sustainability Report (“BRSR”)

Pursuant to Regulation 34(2)(f) of the Listing
Regulations, the initiatives taken by the Company
from an environmental, social, and governance
perspective are provided in the BRSR which is
included as a separate section in the Annual Report.

The Company is publishing BRSR as good
governance practice, although the same is not
applicable to the Company.

28. Corporate Governance

The Board reaffirm their continued commitment to
good corporate governance practices. During the
year under review, the Company has complied with
the provisions relating to corporate governance
as provided under the Listing Regulations. The
compliance report together with a certificate from
practicing Company Secretaries Firm confirming
the compliance of the Corporate Governance
norms as stipulated in Regulation 34(3) of the
Listing Regulations is provided in the Report on
Corporate Governance, which forms part of this
Annual Report and provided as Annexure-5.

29. Particulars of employees

There was 1 (One) employee who was in receipt of
remuneration of not less than 1,02,00,000 (Rupees
One Crore and Two Lakhs Only), and 2 (Two)
employees who were in receipt of remuneration of
not less than 8,50,000 (Rupees Eight Lakhs and Fifty
Thousand Only) per month.

Disclosures concerning the remuneration of
Directors, KMPs and employees as per Section
197(12) of the Act read with Rule 5(1) of the
Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 is annexed
as Annexure-6 to this Board's Report. Your

Directors affirm that the remuneration is as per the
remuneration policy of the Company.

Details of employee remuneration as required
under provisions of Section 197(12) of the Act, read
with Rule 5(2) & 5(3) of Companies (Appointment
and Remuneration of Managerial Personnel) Rules,
2014, is available for inspection at the Registered
Office of your Company during working hours.

The Annual Report and accounts are being sent
to the shareholder's excluding the aforesaid
exhibit. Any Member interested in obtaining such
information may write to the Company Secretary &
Compliance Officer at butterfly.investorrelations@
butterflyindia.com

30. Reporting of fraud by auditors

During the year under review, neither the Statutory
Auditors nor the Secretarial Auditors nor the Cost
Auditors nor the Internal Auditors have reported
to the Audit Committee of the Board, under
Section 143(12) of the Act, any instances of fraud
committed against the Company by its officers or
employees, the details of which would need to be
mentioned in this Report.

31. Annual return

As required under Section 92 (3) read along with
Section 134(3)(a) of the Act, the Annual Return of
the Company is placed on the Company's website
and can be accessed athttps://butterflyindia.
com/investor-relations/

32. Compliance with Secretarial
Standards (“SS-1 and SS-2”)

Your Directors state that applicable Secretarial
Standards issued by the Institute of Company
Secretaries of India (“ICSI”) i.e. SS-1 and SS-2
relating to 'Meetings of the Board of Directors'
and 'General Meetings' respectively, have been
duly followed by the Company.

33. Conservation of energy,
technology, absorption and
foreign exchange outgo

Information relating to energy conservation,
technology absorption, foreign exchange earned
and spent, and research and development
activities undertaken by the Company in
accordance with Section 134(3)(m) of the Act read
with Rule 8(3) of Companies (Accounts) Rules, 2014,
are given in Annexure-7 of this Board's Report.

34. Disclosures pertaining to the
Sexual harassment of Women
at the workplace (Prevention,
Prohibition and Redressal) Act,
2013 (“POSH”)

Your Company is committed in creating a healthy
working environment that enables employees to
work without fear of prejudice and gender bias.

Your Company is committed to ensure that every
employee is treated with dignity and respect and
works in a conducive work environment, which
promotes professional growth of employee and
encourages equality of opportunity. The Company
has zero tolerance towards any act on the part of
any executive, which may fall under the ambit of
“sexual harassment” at workplace, and is fully
committed to uphold and maintain the dignity of
every woman executive working in the Company.

Further, to provide an empowering and enabling
atmosphere to women employees, the Company
has continuously endeavoured to build the work
culture, which promotes the respect and dignity
of all women employees across the organisation.

The Company has formulated a comprehensive
policy on prevention, prohibition and redressal
against sexual harassment of women at workplace,
which is also in accordance with the provisions of
POSH. The said policy has been made available on
the website of the Company. The Company has
constituted of Internal Complaints Committee
(“ICC”) under the POSH Act and has complied with
the provision relating to the same. All employees
(permanent, contractual, tempora ry, trainees) are
covered under this Policy. The constitution of ICC
is as per the POSH Act and includes an external
member who is an independent POSH consultant
with relevant experience. The POSH Policy is gender
inclusive, and the framework ensures complete
anonymity and confidentiality.

The employees are sensitised from time to time
in respect of matters connected with prevention
of sexual harassment. Training programmes on
POSH were conducted at unit levels to sensitise
the employees to uphold the dignity of their female
colleagues at workplace.

During the Financial Year under review, trainings were
conducted to keep the employees informed of the
Company's Code of Conduct (“COC”), Prevention

of Sexual Harassment ("POSH") and Whistle-Blower
rights. This ensures compliance and a controlled
environment, while achieving our objectives.

During the year under review, no complaints
were received.

35. Registrar & Share Transfer Agent
(“RTA”)

M/s. GNSA Infotech Private Limited is the RTA of the
Company. Their contact details are mentioned in
the Corporate Governance Report and same is a lso
available on the website of the Companyhttps://
www.butterflyindia.com/investor-relations/

36. Listing with Stock Exchanges

The equity shares of your Company are listed on
The National Stock Exchange of India Limited
(“NSE”) and BSE Limited (“BSE”). Details of the
Company in the Stock Exchanges are as follows:

NSE Symbol BUTTERFLY
BSE Scrip Code 517421
ISIN INE295F01017

Your Company has paid the Annual Listing Fees for
the F.Y. 2025-26 and F.Y. 2026-27 of both NSE and BSE,
where the equity shares of the Company are listed.

37. Directors’ responsibility statement

Your Directors would like to assure the Members
that the Financial Statements for the year under
revi ew confirm in their entirety the requirements of
the Act and guidelines issued by the SEBI. Pursuant
to the provisions of Section 134(3)(c) of the Act,
to the best of their knowledge and based on the
information and explanations received from the
Company, your Directors confirm that:

(a) in the preparation of the annual accounts
for the Financial Year ended March 31, 2026,
the applicable accounting standards have
been followed along with proper explanation
relating to material departures if any;

(b) the accounting policies selected and
applied consistently and made judgements
and estimates that are reasonable and
prudent so as to give a true and fair view of
the state of affairs of the Company as at
the end of Financial Year and of the profit
and loss of the Company for that period;

(c) sufficient care has been taken and that
adequate accounting records have been
maintained for safeguarding the assets

of the Company and for prevention and
detection of fraud and other irregularities;

(d) the annual accounts have been prepared
on a going concern basis;

(e) proper internal financial controls laid
down by the Directors were followed by
the Company and such internal financial
controls are adequate and were operating
effectively; and

(f) the systems devised to ensure compliance
with the provisions of all applicable laws
were adequate and operating effectively.

38. Insider trading

In compliance with the SEBI (Prohibition of Insider
Trading) Regulations, 2015 (“PIT Regulations”),
as amended from time to time, your Company
has instituted a comprehensive Code titled as
“Policy on Determination of Legitimate Purpose
for Sharing UPSI” which lays down guidelines
and advises the Directors and Employees of the
Company on procedures to be followed and
disclosures to be made while dealing in securities
of the Company.

39. General

Your Directors state that no disclosure or reporting
is required in respect of the following matters as
there were no transactions on these items during
the financial year under review:

(i) The Company has not resorted to any
buy-back of the equity shares during the
financial year under review;

(ii) The Company has not issued equity shares
with differential rights as to dividend, voting
or otherwise;

(iii) The Company does not have any scheme
of provision of money for the purchase of
its own shares by employees or by trustees
for the benefit of employees;

(iv) The Company has not issued Sweat Equity
Shares to the employees of the Company;

(v) There has been no change in the nature of
business of the Company as on the date of
this report;

(vi) There was no revision in the
Financial Statements;

(vii) There were no proceedings, either filed
by the Company or filed against the

Company, pending under the Insolvency
and Bankruptcy Code, 2016 as amended,
before National Company Law Tribunal or
other courts during the year under review;

(viii) No instances of non-exercising of voting
rights in respect of shares purchased
directly by employees under a scheme
pursuant to Section 67(3) of the Act;

(ix) Disclosure of reason for difference between
valuation done at the time of taking
loan from bank and at the time of one¬
time settlement.

(x) There was no instance of onetime
settlement with any Bank or Financial
Institution; and

(xi) No fraud has been reported by the Auditors
to the Audit Committee or the Board.

(xii) During the year under review, the Company
complied with the provisions of the
Maternity Benefit Act 1961 along with all
the applicable amendments & undertook
necessary measures to ensure compliance
for all eligible employees.

40. Rights of Shareholders

• Right to participate in, and to be sufficiently
informed of, decisions concerning fundamental
corporate changes;

• Opportunity to participate effectively and
vote in General Meetings and during the postal
ballot conducted by the Company;

• Being informed of the rules, including
voting procedures that govern general
shareholder meetings;

• Opportunity to ask questions to the Board at
General Meetings;

• Effective Members participation in key
corporate governance decisions such as
election of Members of Board;

• Exercise of ownership rights by all Members,
including institutional investors; adequate
mechanism to address the grievances of
the Members;

• Protection of minority Members from abusive
actions by, or in the interest of, controlling
Members acting either directly or indirectly,
and effective means of redress;

42. Cautionary statement

Statements in the Board's Report and the
Management Discussion and Analysis Report,
describing the Company's objectives, projections,
estimates, expectations or predictions may be
'forward-looking statements' within the meaning
of applicable securities laws and regulations.
Actual results could differ materially from those
expressed or implied. Important factors that
could make a difference to the Company's
operations include global and Indian demand
supply conditions, finished goods prices, feed
stock availability and prices, cyclical demand
and pricing in the Company's principal markets,
changes in government regulations, tax regimes,
economic developments within India and the
countries within which the Company conducts
business and other factors such as litigation and
labour negotiations. The Company is not obliged
to publicly amend, modify or revise any forward
looking statement, on the basis of any subsequent
development, information or events or otherwise.

For Butterfly Gandhimathi Appliances Limited

P. M. Murty

Place: Mumbai Chairman

Date: May 11, 2026 DIN: 00011179