Cellecor Gadgets Ltd Management Discussions

1. ECONOMIC OVERVIEW

India remained one of the fastest-growing major economies through FY 2025-26, supported by resilient domestic consumption, sustained government capital expenditure, moderating inflation, and continued momentum under the Production Linked Incentive (PLI) framework for electronics manufacturing. Rising per-capita income, deepening internet and smartphone penetration, and the steady formalisation of retail and payment infrastructure have together expanded the addressable base for organised consumer electronics and appliance brands. Indias per-capita income has crossed US$ 2,730, lifting affordability for both entry-level and premium electronics, while Internet penetration has crossed 900 million users, widening the funnel for digital and quick-commerce retail formats that Cellecor has actively embraced during the year.

Electronic Goods exports increased by 38.96 % from US$ 3.46 Billion in November 2024 to US$ 4.81 Billion in November 2025.reflecting the growing competitiveness of the domestic manufacturing ecosystem that companies such as Cellecor are increasingly plugged into through contract manufacturing and OEM/ODM partnerships. The Governments continued push toward its stated target of US$ 300 billion in electronics manufacturing and US$ 120 billion in electronics exports by FY 2025-26 has catalysed fresh capacity additions among component and assembly partners nationally, easing supply constraints and improving cost competitiveness for brands that, like Cellecor, do not own captive manufacturing but instead orchestrate a network of specialised partners.

With rural electrification deepening and Tier-ll, Tier-Ill and semi-urban markets (Bharat 2.0) increasingly participating in discretionary consumption, the addressable market for affordably-priced, feature-rich electronics and appliances continues to widen. Festive-season demand, supported by recent rationalisation in indirect fax rates on several consumer durable categories, has further aided volume growth across the industry, and management expects this tailwind to continue supporting category growth into FY 2026-27.

2. INDUSTRY OVERVIEW - CONSUMER ELECTRONICS & APPLIANCES

India is projected to become the fourfh-largest consumer durables market globally by FY 2026-27, with the sector expanding at a compound annual growth rate (CAGR) of approximately 11% and industry size estimated to reach close to Rs.3 lakh crore (US$ 33.6 billion) by FY 2028-29. The broader consumer electronics market in India, valued in the region of US$ 82-89 billion in the current year, is expected to grow at a CAGR of approximately 6.5%-8.7% through the next decade, driven by premiumisation, replacement demand, and the increasing share of smart and connected products,

which today account for close to 59% of category value, with conventional, entry-level products still retaining a meaningful 41% share on the back of Tier-Ill and rural demand.

Category-level demand remains healthy: the room air- conditioner segment is estimated to grow 10-12% In FY 2025- 26 after a sharp 20-25% expansion in the preceding year, while the refrigerator, washing machine and air-conditioner categories collectively represent a market in excess of R2,15,000 crore In annual revenue. Between April 2000 and December 2025, electronic goods attracted cumulative FDI inflows of over Rs.56,600 crore, underscoring sustained investor confidence in the sector. Online and quick-commerce channels continue to gain share of category spends — the online consumer electronics and appliances market has historically grown at a CAGR in excess of 24% — and the PLI scheme has unlocked committed investment of over US$ 17 billion into domestic electronics manufacturing capacity, a trend that directly benefits asset-light, partnership-driven manufacturers such as Cellecor.

Regionally, North India continues to be the single largest demand centre (c. 30% share), followed by South India (c. 27%), West India (c. 25%) and East India (c. 18%), broadly mirroring Cellecors own distribution footprint, which spans all major regions with particular depth in South India and West India. Competitive intensify in the value and midpremium segments of the Indian market remains high, with multinational majors such as Samsung and LG, established domestic conglomerates, and a growing base of digitally- native brands all competing for shelf space and consumer wallet share. This has reinforced the importance of distribution reach, after-sales service infrastructure, and category breadth as key differentiators - areas in which Cellecor has continued to invest meaningfully through the year under review.

3. COMPANY OVERVIEW

Cellecor Gadgets Limited (Cellecor or the Company), listed on the NSE Emerge SME platform under the symbol CELLECOR, is one of Indias fastest-growing consumer electronics and home appliance brands. Tracing its origins to 2012 as Unity Communications, subsequently acquired by Unitel and listed on NSE Emerge on September 28, 2023, the Company has, over more than a decade, built a portfolio spanning Plome Appliances (QLED televisions, air conditioners, refrigerators, washing machines, kitchen appliances, geysers and air coolers), Smart Gadgets & Wearables (TWS earbuds, smarfwafches, speakers, soundbars, neckbands and headphones), and Mobiles, IT & Accessories (feature phones, laptops and mobile accessories), and has more recently expanded into a new-age home and kitchen appliances category comprising kettles, boilers, irons, air fryers, blenders, inductions, vacuum cleaners, water and air purifiers and OTG ovens.

The Company has sold over 100 million products nationwide to date and operates on an asset-light, partnership-led manufacturing model, working with a broad network of domestic contract manufacturers — including PG Electroplast, Dixon Technologies, Empire Appliances, Noble Moulders, Onkar Engine and Generator (Omega), Epack Durable, Winsharp Electronics and Ekkaa,with Veeline Industries, Mekr Technologies, Suman Enterprises, Light Flame Appliances, Suvidha Appliances and RG Industries onboarded during the year — consistent with the Government of Indias Make in Indiavision. As at the end of the year under review, Cellecors distribution network spanned over 1,00,000 retail touchpoints, 1,800+ distributors and 2,000+ service centres across 28 states and 8 union territories, complemented by 8 exclusive brand stores and a growing presence across leading e-commerce, quick-commerce and tintech/EMI platforms. The Companys leadership team, led by Mr. Ravi Agarwal (Founder & Managing Director) and Mr. Nikhil Aggarwal (Co-Founder), continues to steer the Company under a stated vision ofMake in India for the World.

4. PRODUCT PORTFOLIO

Cellecors product portfolio, spanning over 600 SKUs, is designed to combine functionality, affordability and style across the modern Indian household. The Home Appliances category includes QLED smart televisions with Dolby Audio and 4K Ultra HD support ranging from 24-inch to 65-inch screen sizes; inverter air conditioners across 1 Ton, 1.4 Ton and 1.5 Ton capacities with auto-clean and 4-in-l smart functionality; single-and double-door refrigerators with smart cooling technology; semi-automatic and fully-automatic washing machines; instant and storage-type geysers and heaters; high-delivery air coolers; and a range of mixer grinders and juicer mixer grinders.

The Smart Gadgets & Accessories category comprises TWS earbuds available in 15+ variants with active and environmental noise cancellation, auto-connect and long playtime; smartwatches across multiple strap materials, colours and health-monitoring configurations; party speakers and soundbars with Dolby Atmos support; neckbands and headphones, including gaming variants with ambient ighting; feature phones with long-lasting batteries; and mobile accessories including power banks and wired earphones. During the year, the Company further expanded into a new-age home and kitchen appliances category — kettles, boilers, irons, air fryers, blenders and inductions — and its forward product roadmap includes vacuum cleaners, commercial coolers, coffee makers, deep freezers, wardrobe steamers, air and water purifiers, OTG ovens and hand fans, positioning Cellecor as an increasingly complete consumer electronics and appliances brand for the Indian household.

5. DISTRIBUTION, RETAILNETWORK&DIGITALCOMMERCE

Cellecors offline distribution network — spanning over

1,00,000 retail touchpoints, 1,800+ distributors and 2,000+ service centres across 28 states and 8 union territories — remains the backbone of its nationwide reach and continued to expand during the year through new partnerships with regional and national multi-brand retailers, including Sathya Mobiles, OSIA Hyper Retail, Poojara Telecom, PhoneWale, Umiya Mobile, Ramdev Mobile, Sangeetha Mobiles, Cellbay, Hello Mobiles, B New Mobiles and Celekt, further strengthened during the year by the addition of LOT Mobiles, Sonu Vision, BIG C Mobiles, PAI International Electronics, B New Mobiles and Poorvika Mobiles. The Company also deepened its engagement with large-format and organised retail chains including Vijay Sales, Reliance Digital, Croma, UniverCell and Supreme Mobiles, extending its shelf presence beyond traditional multi-brand outlets.

Cellecors chain of exclusive brand stores grew to 8 outlets during the year, with one new store opened in the period, spanning Delhi, Bhopal (Madhya Pradesh), Mizoram, Leh Ladakh, the Andaman & Nicobar Islands, Sasaram (Bihar), Nanded (Maharashtra) and Barnala (Punjab) — serving as dedicated experience hubs that showcase the Companys full product range in an immersive retail environment. On the digital side, Cellecor deepened its presence across established marketplaces including Amazon, Flipkart, Myntra, Ajio, JioMart, Cred, eBay, Pop Club, Flipkart Minutes, Park+, ONDC, Solv and GlowRoad, and went live on quick-commerce platforms Zepto and Blinkit during the year, alongside new partnerships with Zomato and Dish TV, extending its reach into the fast-growing instant and convenient shopping formats. Fintech collaborations with Simpl, Snapmint, Bajaj Finserv, TVS Credit, Home Credit and Pine Labs enabled Pay Later and zero-down-payment, no-cost EMI options that improved purchasing power and conversion across consumer segments.

6. MANUFACTURING, SUPPLY CHAIN & AFTER-SALES INFRASTRUCTURE

Cellecor continued to strengthen its manufacturing ecosystem in line with the Governments Make in India vision during the year, forging alliances with leading production partners to drive innovation, efficiency and backward integration across categories. Existing manufacturing partners include PG Electroplast, Empire Appliances, Noble Moulders, Onkar Engine and Generator (Omega), EPack Durable, Dixon Technologies, Winsharp Electronics and Ekkaa, with Veeline Industries, Mekr Technologies, Suman Enterprises, Light Flame Appliances, Suvidha Appliances and RG Industries added during the year to support the Companys expanding category mix.

On logistics, the Companys existing partners — DTDC, TCI Express, Om Logistics, Express Roadways, One Point Supply Chain Solution, Safe Express and V-Trans — were supplemented during the year by a significantly expanded network including Jaydeep Logistics, XP India, Aeropict Logistics, TAC Logistics, ST Courier and several others, providing pan-India coverage and stronger last-mile delivery across metros, Tier-ll, Tier-Ill and rural markets. To support rising business volumes, Cellecor expanded its warehouse footprint from 8 to 12 locations during the year, strengthening regiona coverage and enabling faster order fulfilment, supported by real-time inventory visibility, predictive demand planning and automated shipment tracking that together helped reduce stockouts, excess inventory and transportation costs across the distribution network.

On the service side, Cellecors network of 2,000+ service centres now offers home service coverage across 25,000+ pin codes. The Companys in-house Technical Repair Centre (TRC) has reduced average repair turnaround time from 10-12 days previously to approximately 7 days currently, and the Company maintains 100% spare-part availability across its service network, minimising customer downtime and reinforcing Cellecors positioning on after-sales reliability — an increasingly important differentiator as the industrys competitive intensity rises.

7. BRAND BUILDING, MARKETING, CSR & HUMAN CAPITAL

Cellecors brand-building efforts during the year were anchored by its roster of brand ambassadors and amplified through television, digital, outdoor and in-store activations across priority markets, alongside regional Reels series, influencer collaborations and hashtag-led contests designed to build cultural resonance in South, East and emerging rural markets. The Companys achievements were recognised at the DeviceNext Awards 2025, where Cellecor was featured among the Top 50 Indian Brands in Consumer Tech, and Mr. Ravi Agarwal, Managing Director, was honoured with

the title of Inspiring Leader in Consumer Tech. Cellecor also secured consistent coverage in leading business and trade publications during the year in connection with its South India expansion, its collaboration with Zomato to eguip gig-economy workers with smart wearables, and its broader revenue growth trajectory.

On corporate social responsibility, Cellecor has adopted a school to support childrens holistic development through nutritious meals, school bags, uniforms and fee support, alongside festival celebrations and skill-development workshops. The Company is among a limited set of Indian companies to formally recognise menstrual health through its Pink Leave policy, granting one paid leave per month to women employees, and runs structured training programmes in stitching, handicrafts and other livelihood skills aimed at womens financial independence. On human resources, the Company expanded its workforce to 400+ employees across sales, operations, technology, R&D, marketing and after-sales service during the year, with a focused hiring strategy bringing in senior industry professionals and domain experts to strengthen leadership capability and support the Companys next phase of growth, including its proposed nternafional expansion.

8. FINANCIAL PERFORMANCE REVIEW - FY 2025-26

The Company delivered a strong financial performance in FY 2025-26, with growth across revenue, profitability and cash generation on both a standalone and consolidated basis. Income from operations grew to Rs.1,29,181.12 lakh in FY 2025-26 from Rs.1,02,594.58 lakh in FY 2024-25, an increase of approximately 25.9%, driven by broad-based growth across the existing product portfolio as well as initial contribution from newly launched categories. Profit before tax rose to Rs.5,333.69 lakh from Rs.4,143.03 lakh, up 28.7%, while net profit for the year increased to Rs.3,961.08 lakh from Rs.3,090.03 lakh, a growth of 28.2%. Basic earnings per share improved to Rs.1.80 from Rs.1.45 in the previous year.

Particulars ( Rs. in Lakh)	FY 2025-26	FY 2024-25	Growth (%)
Income from Operations	1,29,181.12	1,02,594.58	25.9%
Total Expenses	1,23,886.29	98,456.09	25.8%
Profit before Tax	5,333.69	4,143.03	28.7%
Total Tax Expense	1,372.61	1,053.00	30.3%
Net Profit for the Year	3,961.08	3,090.03	28.2%
Basic EPS ( Rs.)	1.80	1.45	24.1%

The Companys consolidated results, which include Cellecor Gadgets Europe Limited, were broadly in line with standalone performance — consolidated net profit for FY 2025-26 stood at Rs.3;961.05 lakh (against Rs.3,090.03 lakh in FY 2024-25) on consolidated income from operations of Rs.1,29,181.12 lakh, with the marginal difference from standalone figures attributable to the Companys wholly-owned European subsidiary, which remains at an early stage of operations.

BALANCE SHEET SUMMARY (STANDALONE)

Particulars ( Rs. in Lakh)	As at 31.03.2026	As at 31.03.2025
Total Shareholders\u2019 Funds	20,466.80	15,601.22
Long-Term Borrowings	4,210.15	18.70
Short-Term Borrowings	9,965.75	12,070.64
Trade Payables	9,160.42	4,202.99
Total Equity and Liabilities	46,780.30	33,549.36
Inventories	24,304.10	20,990.69
Trade Receivables	10,717.89	4,091.01
Cash and Cash Equivalents	3,084.70	2,175.87
Total Assets	46,780.30	33,549.36

Total assets grew by 39.4% to Rs.46,780.30 lakh, largely reflecting continued inventory build-up ahead of the festive and new- category launch cycle and a sharp increase in trade receivables to Rs.10,717.89 lakh from Rs.4,091.01 lakh, consistent with the Companys expanding institutional, B2B and large-format retail relationships that typically carry longer credit cycles than traditional trade. Shareholders funds increased by 31.2% to Rs.20,466.80 lakh, aided by the full conversion of the Companys outstanding share warrants into equity shares during the year and steady internal accrual. Long-term borrowings increased materially to Rs.4,210.15 lakh from a near-nil base, reflecting term financing drawn to support capacity commitments with manufacturing partners and working-capital requirements of the new product categories launched during the year.

CASH FLOW SUMMARY (STANDALONE)

Particulars ( Rs. in Lakh)	FY 2025-26	FY 2024-25
Net Cash from/(used in) Operating Activities	110.92	(3,273.39)
Net Cash used in Investing Activities	(471.20)	(1,839.54)
Net Cash from Financing Activities	1,269.11	6,844.11
Net Increase in Cash & Cash Equivalents	908.83	1,731.18
Cash & Cash Equivalents at Year End	3,084.70	2,175.87

Net cash flow from operating activities turned positive at Rs.110.92 lakh in FY 2025-26, a marked improvement from the cash outflow of Rs.3,273.39 lakh recorded in FY 2024-25, reflecting better working-capital discipline even as the business continued to scale rapidly. Financing inflows of Rl,269.11 lakh during the year comprised proceeds from the issuance of share capital, net proceeds from borrowings, offset by the redemption of share warrant subscription money on full conversion, and interest paid of Rl,721.96 lakh.

KEY FINANCIAL RATIOS

Ratio	Current Period	Previous Period	Variance in %	Reason for variance by more than 25%
Current Ratio	2.01	1.76	14.03 %	NA
Debt-Equity Ratio	0.69	0.77	-10.62 %	NA
Debt service coverage ratio	1.77	3.59	-50.71 %	Due to increase in debt servicing obligations during the year
Return in equity ratio	0.22	0.20	10.90 %	NA
Inventory turnover ratio	4.95	6.77	- 26.97 %	Due to an increase in average inventory during the year.

KEY FINANCIAL RATIOS

Ratio	Current Period	Previous Period	Variance in %	Reason for variance by more than 25%
Trade Receivables turnover ratio	17.45	42.70	- 59.14 %	Due to increase in average trade receivables during the year.
Trade payables turnover ratio	17.26	29.99	- 42.45 %	Due to an increase in average trade payables during the year
Net capital turnover ratio	5.23	6.57	-20.30%	NA
Net profit ratio	3.07%	3.01%	1.81%	NA
Return on capital Employed	0.36	0.35	0.53%	NA
Return on investment	0.00%	0.00%	0.00%	NA

Subsequent to the year end, on May 14, 2026, the Company allotted 16,49,138 fully paid-up equity shares upon partial conversion of its 2% Unsecured Foreign Currency Convertible Bonds (FCCBs) at a conversion price of Rs.29 per share, following which the Companys paid-up equity share capital stands increased to ^22,23,26,938 divided into 22,23,26,938 fully paid-up equity shares of Rs.1 each, and the outstanding principal value of FCCBs listed on the Affrinex Exchange stands reduced to US$ 32.5 million. This is a subsequent event and has accordingly not been factored into the FY 2025-26 financial results discussed above.

On the B2B and D2C front, the Company is scaling corporate and bulk sales through platforms such as IndiaMART, TradeIndic and Amazon Business, alongside direct partnerships witl corporate procurement teams and institutional distributors while simultaneously accelerating growth through direct to-consumer channels via the Companys official website and exclusive brand stores. On e-commerce, Cellecor wi broaden its assortment on Zepto and Blinkit while exploring new integrations with Swiggy Instamart, BigBasket, Dunzo anc JioMart Express, and will continue to strengthen its presence on Amazon, Flipkart, Myntra, Ajio, JioMart, Cred, eBay and ONDC, alongside potential partnerships with Tata Neu, Paytm Mall and Snapdeal. On corporate and institutional sales, the Company will deepen penetration into corporate gifting enterprise solutions and government procurement segment across FMCG, manufacturing, automobile, pharma, IT, BFS and public-sector buyers, diversifying revenue streams and reducing dependence on seasonal retail cycles.

9. DETAILS OF CHANGE IN RETURN ON NET WORTH

Return on Net Worth (calculated as net profit for the year divided by closing shareholders funds) stood at 19.35% for FY 2025-26 as against 1981% for FY 2024-25. While net profit for the year grew by a healthy 28.2%, the Companys net worth grew at a faster pace of 31.2%, primarily on account of the full conversion of the 30,00,000 share warrants issued in the prior year into equity shares and continued retention of profits. Consequently, Return on Net Worth moderated marginally in percentage terms even as absolute profitability, EPS and net worth all recorded strong double-digit growth. The Company remains focused on a multi-pronged strategy centred on revenue growth, cost optimisation and operational excellence, and expects the equity base deployed during the year — including towards new product categories, warehouse expansion and the proposed African operations — to translate into improved capital efficiency over the medium term as these investments mature.

10. DOMESTIC GROWTH STRATEGY - OUTLOOK FOR FY 2026-27

In the coming quarters, Cellecor aims to further strengthen its leadership in the Indian consumer electronics market through a comprehensive, multi-channel expansion plan spanning offline, online, B2B and institutional distribution. On the offline front, the Company intends to expand its distributor base beyond 2,000 and increase retail touchpoints beyond

1,00,000, deepening accessibility across metros, Tier-II, Tier-III and rural markets, while strengthening alliances with large- format retail (LFR) chains and organised retail partners to enhance in-store visibility through impactful displays and promotions.

On manufacturing, Cellecor will continue to advance its ecosystem under the Make in India for the World vision, expanding capacity through new alliances with Ambar Enterprises, Elin Electronics, Smart Industries, Bhurji Supertech Industries, Comrade Appliances and Indus Appliances, alongside existing partners, while driving automation, digital quality control and enhanced in-house R&D for energy-efficient smart TVs, large appliances and connected devices, and increasing domestic sourcing and eco-friendly manufacturing practices for responsible, sustainable expansion.

11. INTERNATIONAL EXPANSION - PROPOSED ENTRY INTO AFRICA

Having established a scaled, profitable and asset-light operating model in India, the Board and management believe the Company is well positioned to selectively extend this playbook to select international markets, and have identified Africa as the Companys first market for international expansion. This assessment is based on several factors. The consumer electronics market across the African continent is projected to grow at approximately 5.8% CAGR between 2024 and 2029, reaching a market volume of close to US$ 94 billion by 2029, while the Middle East and Africa home appliances market alone is estimated at approximately US$ 25.5 billion in the current year, growing at a CAGR of over 6% through 2031. Within this, South Africa — a likely priority market given its relatively organised retail infrastructure — represents a consumer electronics market of over US$ 11 billion, expected to grow steadily through the next decade.

While this market remains considerably less penetrated by organised, value-focused Indian brands than comparable markets in South Asia or the Middle East, and while global majors such as Samsung, Apple, Huawei and Sony continue to dominate the premium smartphone and flagship television segments across the region, managements assessment is that the mass-market and affordability-led segment of home appliances and smart gadgets — Cellecors core competency in India — remains comparatively fragmented and underserved across several African geographies, particularly in parts of East and West Africa, offering a meaningfully lower- competition entry point than the increasingly saturated Indian market.

Governments across the region have also been actively incentivising local assembly and semi-manufacturing of electronics as part of broader import-substitution and industrialisation policies — a trend reflected in the regions electronics manufacturing-equipment market, valued at approximately US$ 1.5-1.6 billion and expected to grow at a CAGR in excess of 4% through the coming decade on rising demand for locally-assembled electronics. Management intends to leverage this policy tailwind by evaluating a local assembly and manufacturing presence in Africa, rather than a pure import/distribution model, working with the same partnership-led, asset-light approach that has underpinned the Companys manufacturing strategy in India. This would allow Cellecor to price competitively within domestic tariff structures, build a first-mover distribution and service network ahead of larger multinational competitors, and align with local-content and Assemble locally requirements that several African markets have begun to introduce for consumer electronics imports.

12. RISKS AND CONCERNS

The Companys principal risks continue to relate to intense category-level competition, the working-capital intensity inherent in an inventory-led consumer durables business, and dependence on third-party contract manufacturers for the bulk of its product portfolio. The sharp increase in trade receivables and inventories during the year, while consistent with the Companys growth trajectory and expanding institutional relationships, also increases the Companys exposure to counterparty credit risk and requires continued discipline in collections and inventory planning. The Companys increasing reliance on borrowings, including the material increase in long-term debt during the year, also warrants continued monitoring of interest-rate exposure and debt-servicing capacity as the balance sheet scales.

The proposed expansion into Africa introduces additional risk factors specific to operating in a new geography, including regulatory and import-policy uncertainty, currency translation and convertibility risk, the availability of suitable local manufacturing and distribution partners, logistics and infrastructure constraints in certain markets, and the time and investment required to build brand recognition and a service network in markets where the Company does not currently have an established presence. Competitive response from incumbent global majors, who possess significantly greater scale and financial resources, is also a relevant consideration. The Board and management intend to adopt a calibrated, phased approach to the African initiative, with defined milestones, capital allocation limits and periodic review, in order to manage these risks appropriately and to avoid disproportionate capital commitment ahead of demonstrated market traction.

13. OPPORTUNITIES AND THREATS

Cellecor Gadgets Limited continues to focus on cost optimisation, product innovation and strengthening its distribution network to deliver value to consumers and support sustainable growth.

Opportunities

• Continued formalisation and premiumisation of Indias consumer durables market, projected to grow at an 11% CAGR to reach approximately Rs.3 lakh crore by FY 2028-29.

• Expanding rural and Tier- II/III consumption (Bharat 2.0), supported by rising electrification and digital payment penetration.

• Growth of quick-commerce and fintech-enabled EMI/BNPL channels, which are improving product accessibility and conversion across consumer segments.

• Scaling of the B2B, institutional and government procurement channel as a new, structurally more stable revenue stream, reducing dependence on seasonal retail cycles.

• A largely untapped, less competitively saturated African market for value-oriented home appliances and gadgets, offering a long-runway growth opportunity supported by local government incentives for domestic assembly.

• Continued PLI-driven strengthening of Indias domestic electronics manufacturing ecosystem, benefiting through improved cost competitiveness and capacity availability.

• Expanding warehouse and logistics infrastructure (12 locations, up from 8) supporting faster fulfilment and deeper penetration into under-served pin codes.

Threats

• Intensifying competition from both multinational majors and digitally-native domestic brands across every product category the Company operates in.

• Commodity, freight and currency volatility affecting input costs given the Companys reliance on outsourced/contract manufacturing.

• Execution, regulatory and currency risk associated with the proposed entry into new international markets, including Africa.

• Elongating receivable cycles as the business mix shifts towards large-format retail and institutional channels, as reflected in the sharp increase in trade receivables during the year.

• Rising working-capital intensity as inventory and receivables scale ahead of revenue, requiring continued access to cost-effective debt and equity capital.

14. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place internal control systems commensurate with the size, scale and nature of its operations, covering financial reporting, procurement, inventory management, receivables monitoring and statutory compliance. These systems are periodically reviewed by the Audit Committee and the statutory auditors as part of the annual audit process, and are supplemented by defined approval matrices for capital expenditure, vendor onboarding and credit extension to institutional customers. As the Companys balance sheet and geographic footprint scale — including the expansion of warehouse locations from 8 to 12 during the year and the proposed entry into Africa — management is in the process of extending these control frameworks, with appropriate modifications for local regulatory and currency considerations, to cover the Companys international operations as the African initiative progresses from evaluation to execution.

15. HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Cellecor continued to invest in human capital as a cornerstone of growth during the year, expanding its workforce to 400+ employees across sales, operations, technology, R&D, marketing and after-sales service, and bringing in senior industry professionals and domain experts to strengthen leadership capability, accelerate digital transformation and deepen market penetration. The Companys people-first initiatives during the year included the continuation of its Pink Leave policy recognising menstrual health for women employees, and structured skill-development and livelihood programmes for women in stitching, handicrafts and other micro-enterprise skills. As the Company evaluates its Africa entry, management expects to build a dedicated, lean international team to lead market assessment and, subsequently, local operations, while continuing to draw on the Companys India-based leadership for strategic oversight. Industrial relations with employees remained cordial throughout the year.

16. CORPORATE GOVERNANCE AND COMPLIANCE

At Cellecor Gadgets Limited, strong corporate governance and ethical business practices form the backbone of operations. The Company is committed to the highest standards of transparency, accountability and compliance, ensuring that all stakeholders — investors, partners, customers and employees — can place their trust in it. The Companys governance framework is guided by a well-structured Board of Directors with diverse expertise, providing independent oversight, strategic direction and effective risk management, supported by regular Board and Committee meetings, strict adherence to financial disclosure, audit and reporting timelines, ethical conduct policies implemented across all levels of the organisation, and continuous evaluation to remain fully aligned with SEBI, Companies Act and NSE listing requirements. As a listed entity on the NSE SME platform, Cellecor views governance not merely as a regulatory obligation but as a strategic enabler of stakeholder confidence and longterm sustainable growth, a principle that will extend to the governance of any international operations the Company establishes.

17. CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations or predictions, including in relation to the proposed expansion into Africa, may be forward-looking statements within the meaning of applicable securities laws and regulations. These statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include, among others, fluctuations in raw material and input costs, changes in government policy in India and in the jurisdictions the Company may enter, competitive intensity, currency movements, the Companys ability to successfully identify and execute international partnerships, the availability of debt and equity capital on acceptable terms, and general economic conditions. The Company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by applicable law.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013

read with Rules made there under

A. Information as per Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

a. The ratio of remuneration of each director to the median remuneration of employees for the Financial Year and the Percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the Financial Year:

SI. No.	Name of Director/ KMPs	Designation	Nature of Payment	Ratio against Remuneration of each Director to median remuneration of employees	% Increase / (Decrease) in Remuneration for Financial Year 20252026
1.	Mr. Ravi Agarwal	Managing Director	Remuneration	22.02 : 1	-
2.	Mr. Nikhil Aggarwal	Whole-Time Director	Remuneration	14.68 : 1	-
3.	Ms. Gunjan Aggarwal	Non-Executive Director and Chairman	Commission	4.40 : 1	-
4.	Ms. Vineeta Gautam	Non-Executive Independent Director	Sitting Fees	0.49 : 1	-
5.	Ms. Swati Gupta	Non-Executive Independent Director	Sitting Fees	0.49 : 1	-
6.	Ms. Bindu Gupta	Chief Financial Officer (CFO)	Remuneration	2.94 : 1	-
7	Ms. Pooja Tyagi	Company Secretary & Compliance Officer	Remuneration	1.21 : 1	-

b. The percentage increase in the median remuneration of employees in the financial year:

The median remuneration of the employees in the current financial year as on March 31, 2026 increased by 4.50 % over the previous financial year. The median remuneration of employees increased by 4.50 % due to an increase in salary expenses / employees in the financial year 2025-26 as compared to previous year.

c. The number of permanent employees on the rolls of the Company:

As on March 31, 2026, there are 321 permanent employees on rolls of the Company.

d. Average percentile increases already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: The Average salary of employees was increased by 2708 % and Average salary of managerial remuneration remained same during the financial year Although number of employees. increased in the current financial year 2025-26, but due to increase in average pay scale per employee in the current financial year 2025-26 as compared to previous financial year 2024-25, the average salary of employees increased by 2708.%.

e. The Company affirms that the remuneration is as per remuneration policy of the Company.

For and on behalf of Board of Directors Cellecor Gadgets Limited

Sd/-	Sd/-
Ravi Agarwal	Bindu Gupta
Managing Director	Director
DIN: 08471502	DIN: 08476435
Date: 07-09-2026
Place: New Delhi