Directors Report of Lotus Chocolate Company Ltd.

Mar 31, 2025

The Board of Directors present the Company’s Thirty-Sixth Annual Report and the Company’s audited financial statement for the
financial year ended on March 31,2025.

FINANCIAL RESULTS

The Company’s financial performance for the year ended March 31, 2025 is summarized below:

C in crore)

Particulars	2024-25	2023-24
Revenue from Operations (net)*	573.75	200.03
Other Income	0.81	1.12
Profit/(Loss) before Depreciation, Amortization, Interest and Taxes	31.98	4.07
Less: Interest	7.11	0.81
Less: Depreciation and Amortization Expense	1.81	1.02
Profit/(Loss) Before Tax	23.06	2.24
Less: Tax Expense (includes current tax, deferred tax, short /excess provision of tax relating to earlier year/s)	5.83	(2.82)
Profit/(Loss) for the Year	17.23	5.06
Add: Other comprehensive Income	(0.15)	(0.17)
Total Comprehensive Income for the Year	17.08	4.89

(* excludes Goods and Service Tax)

RESULTS OF OPERATIONS AND THE STATE OF COMPANY’S AFFAIRS

During the year under review, the revenue from operations (excluding the goods and service tax) increased to ? 573.75 crore
(previous year ? 200.03 crore). The profit before depreciation, amortization, interest and tax was ? 31.98 crore (previous year ? 4.07
crore). The Company’s profit after tax was ? 17.23 crore as compared to a profit of ? 5.06 crore in the previous year.

Your company has strengthened its position as one of the leading manufacturers of cocoa products in the country. Your company has
two state-of-art manufacturing facilities near Hyderabad. Both facilities are equipped with the latest technologies in manufacturing
with continued investment being undertaken for capacity enhancement.

Your company sources high quality cocoa beans both from Indian and global markets and manufactures cocoa derivatives including
Cocoa Mass, Cocoa Butter and Cocoa Powder and also offers a range of choco chips and choco slabs which are supplied to leading
Food Manufacturers, Ice-cream manufacturers and Bakeries across the country. In FY 2024-25, the company has also expanded its
range of consumer products with the introduction of products in confectionery and chocolate categories and also building up an omni
channel distribution pathway in general retail, standalone chains and modern trade outlets.

DIVIDEND

The Board of Directors has not recommended any dividend for the year under review.

TRANSFER TO RESERVES

During the year under review, no amount has been transferred to the Reserves of the Company. Please refer to Statement of changes
in Equity in the Financial Statement for details pertaining to changes during the year in Other Equity.

MATERIAL EVENTS DURING THE YEAR UNDER REVIEW AND UPDATES THEREON

During the year under review, the Hon’ble National Company Law Tribunal, Hyderabad Bench, vide its order dated August 8, 2024
(effective date) sanctioned the Scheme of Amalgamation of Soubhagya Confectionery Private Limited (“SCPL”), wholly-owned
subsidiary of the Company, with the Company under Sections 230 to 232 of the Companies Act, 2013 with Appointed Date being
May 25, 2023. Accordingly, SCPL stood amalgamated with the Company with effect from that date.

DETAILS OF MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE
END OF THE FINANCIAL YEAR AND DATE OF REPORT

No material changes and commitments occurred affecting the financial position of the Company between the end of the financial year
to which the financial statement relates and the date of this report.

SHARE CAPITAL

During the year under review, there has been no change in authorized and paid up share capital of the Company. The total paid-up
share capital of the Company as on March 31, 2025 is '' 63,63,42,490/- comprising of:

• '' 12,84,10,490/- equity share capital divided into 1,28,41,049 Equity Shares of ?10/- each; and

• ? 50,79,32,000/- preference share capital divided into 5,07,93,200, 0.01% Non-cumulative, Non-convertible, Non-participating
and Redeemable Preference Shares of ?10/- each.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under the Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’), is presented in a separate
section, and forms part of this Report.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANY

During the year under review, the Hon’ble National Company Law Tribunal, Hyderabad Bench, vide its order dated August 8, 2024
(effective date) sanctioned the Scheme of Amalgamation of SCPL, wholly-owned subsidiary of the Company, with the Company
under Sections 230 to 232 of the Companies Act, 2013 with Appointed Date being May 25, 2023. Accordingly, SCPL stood
amalgamated with the Company with effect from that date. The Company did not have any other subsidiary.

The Company did not have any joint venture or associate company during the year under review.

SECRETARIAL STANDARDS

The Company has followed the applicable Secretarial Standards, with respect to Meetings of the Board of Directors (SS-1) and
General Meetings (SS-2) issued by the Institute of Company Secretaries of India.

DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31, 2025, the applicable accounting standards read with
requirements set out under Schedule III to the Companies Act, 2013 ("the Act”) have been followed and there are no material
departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2025 and of the
profit of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls
are adequate and are operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems
are adequate and operating effectively.

CORPORATE GOVERNANCE

The Company is committed to maintaining the highest standards of Corporate Governance and adhere to Corporate Governance
requirements set out by the Securities and Exchange Board of India (“SEBI”). The Company has also implemented several best

governance practices. The Corporate Governance Report as stipulated under the Listing Regulations forms part of this Annual
Report. Certificate from KSR & Co., Company Secretaries LLP, confirming compliance with the conditions of Corporate Governance
is attached to the Corporate Governance Report.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in its ordinary
course of business and on an arm’s length basis.

There were no contracts / arrangements / transactions with related parties which are required to be reported in Form No. AOC-2 in
terms of Section 134(3)(h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.

The Policy on Materiality of Related Party Transactions and on Dealing with Related Party Transactions is put up on the Company’s
website and can be accessed at https://www.lotuschocolate.com/documents/files/Policv-on-Materialitv-of-RPT.pdf.

There were no materially significant related party transactions which could have potential conflict with the interests of the Company
at large.

The Board of Directors of the Company draw attention of the Members to Note No. 32 to the Financial Statement which sets out
related party disclosures pursuant to Indian Accounting Standards.

CORPORATE SOCIAL RESPONSIBILITY

In terms of the provisions of section 135 of the Act, read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the
Board of Directors has constituted a Corporate Social Responsibility (“CSR”) Committee comprising Prof. Dipak C. Jain (Chairman),
Mr. K. Sudarshan and Mr. Ketan Mody as members. The Company has a CSR policy in place which is available on the Company’s
website at https://www.lotuschocolate.com/documents/files/CSR-Policy.pdf

During the year under review, the Company was not required to spend on CSR as the Company did not meet any of the criteria
prescribed under Section 135 of the Act. Further, the Annual Report on CSR activities as required under the Companies (Corporate
Social Responsibility Policy) Rules, 2014 is annexed herewith and marked as Annexure - I.

RISK MANAGEMENT

The Board of the Company has formed a Risk Management Committee, on voluntary basis, to frame, implement and monitor the risk
management policy / plan for the Company and ensuring its effectiveness.

The Company has an elaborate Risk Management Framework, which is designed to enable risks to be identified, assessed and mitigated
appropriately. Risk Management Committee has, inter-alia, been entrusted with the responsibility for overseeing implementation /
monitoring of risk management plan and policy; and continually obtaining reasonable assurance from management that all known
and emerging risks have been identified and mitigated or managed.

The details on the risk management are also covered in the Management Discussion and Analysis Report, which forms part of this
Annual Report.

INTERNAL FINANCIAL CONTROLS

The Company has adequate systems of internal financial controls to safeguard and protect the Company from loss, unauthorised use
or disposition of its assets. All the transactions are properly authorised, recorded and reported to the management.

The Company is following the applicable Accounting Standards for properly maintaining the books of accounts and reporting
Financial Statements.

The Internal financial controls have been embedded in the business processes. Assurance on the effectiveness of internal financial
controls is obtained through management reviews and continuous monitoring as well as testing of the internal financial control
systems by the internal auditors during the course of their audits.

The Audit Committee reviews adequacy and effectiveness of Company’s internal controls and monitors the implementation of audit
recommendations.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Ketan Mody and Mr. Asim
Parekh, Non-executive Directors of the Company, are liable to retire by rotation at the ensuing Annual General Meeting. The Board
of Directors, based on the recommendation of Nomination and Remuneration Committee (“NRC”), has recommended their re¬
appointment.

Upon completion of the second-term as an Independent Director, Mr. Bharathan Rajagopalan Thatai ceased to be director of the
Company on November 25, 2024.

Mr. Dinesh Taluja resigned from the Board effective from November 25, 2024.

The Board places on record its sincere appreciation for the contribution made by them during their tenure on the Board of the
Company.

The Board of Directors, based on the recommendation of the NRC, approved the appointment of Ms. Riddhi Bhimani as an Additional
Director, designated as an Independent Director of the Company w.e.f. November 26, 2024 and the shareholders approved her
appointment as an Independent Director of the Company, through resolution passed by postal ballot on February 21, 2025.

In the opinion of the Board, Ms. Riddhi Bhimani possesses requisite expertise, proficiency, integrity and experience.

The Board of Directors, based on the recommendation of the NRC, also approved the appointment of Mr. Abhijeet Pai and Mr.
Aditya Pai as Additional Directors, designated as Non-Executive Directors of the Company and the shareholders approved their
appointment as Non-Executive Directors of the Company, liable to retire by rotation, through resolution passed by postal ballot on
February 21, 2025.

Ms. Renuka Shastry resigned from the Board effective from July 10, 2025.

The Board of Directors, based on the recommendation of the NRC, also approved the appointment of Mr. Natarajan Venkataraman
(DIN: 05324934) as an Additional Director and Whole-time Director of the Company with effect from July 16, 2025. The Company
has received requisite notice in writing from a member proposing his candidature for appointment as a Director, liable to retire by
rotation. The Board of Directors has recommended the appointment of Mr. Natarajan Venkataraman as Director and Whole-time
Director of the Company for a period of 5 years for approval of members at the ensuing Annual General Meeting.

The Company has received declarations from all the Independent Directors of the Company confirming that:

a) they meet the criteria of independence prescribed under the Act and the Listing Regulations;

b) they have registered their names in the Independent Directors’ Databank; and

c) they have affirmed compliance to the code of conduct for Independent Directors as prescribed in Schedule IV to the Act.

The Company has devised, inter alia, the following policies viz.:

a) Policy for selection of Directors and determining Directors’ independence; and

b) Remuneration Policy for Directors, Key Managerial Personnel and other employees.

The Policy for selection of Directors and determining Directors’ independence sets out the guiding principles for the NRC for
identifying persons who are qualified to become Directors and to determine the independence of Directors, while considering their
appointment/ re-appointment as Independent Directors of the Company. The Policy also provides for the factors in evaluating the
suitability of individual board members with diverse background and experience that are relevant for the Company’s operations. The
Policy is available on the Company’s website and can be accessed at https://www.lotuschocolate.com/documents/files/Policy-for-
Selection-of-Directors.pdf.

The Company’s remuneration policy is directed towards rewarding performance based on review of achievements. The remuneration
policy is in consonance with existing industry practice. The Policy is available on the Company’s website and can be accessed at
https://www.lotuschocolate.com/documents/files/Remuneration-Policv-for-Directors.pdf.

PERFORMANCE EVALUATION

The Company has a policy for performance evaluation of the Board, Committees and other individual Directors (including
Independent Directors) which includes criteria for performance evaluation of Directors.

In accordance with the manner of evaluation specified by the NRC, the Board carried out annual performance evaluation of the Board,
its Committees and Individual Directors. The Independent Directors carried out annual performance evaluation of the Chairman, the
non-independent directors and the Board as a whole. The Chairman of the respective Committees shared the report on evaluation
with the respective Committee members. The performance of each Committee was evaluated by the Board based on the report of
evaluation received from the respective Committees.

A consolidated report was shared with the Chairman of the Board for his review and giving feedback to each Director.

AUDITORS AND AUDITORS’ REPORT
Statutory Auditors

Deloitte Haskins & Sells LLP, Chartered Accountants (Firm Registration No: 117366W/W-100018) (“DHS”), were appointed as the
Statutory Auditors of the Company for a term of 5 consecutive years, at the 34^th Annual General Meeting held on August 10, 2023.
DHS have confirmed that they are not disqualified from continuing as the Statutory Auditors of the Company.

The Auditors’ Report does not contain any qualification, reservation, adverse remark or disclaimer. The Notes to the financial
statements referred in the Auditors’ Report are self-explanatory and do not call for any further comments.

Secretarial Auditor

The Board had appointed KSR & Co., Company Secretaries LLP, to conduct Secretarial Audit of the Company for the FY 2024-25.
The Secretarial Audit Report for the financial year ended March 31,2025 is annexed and marked as Annexure- II to this Report. The
Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

In accordance with the provisions of Section 204 of the Act read with Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 and Regulation 24A of the Listing Regulations, the Board has recommended to the Members of the Company,
the appointment of KSR & Co., Company Secretaries LLP (Firm Registration No. P2008TN006400) as the Secretarial Auditor of
the Company for a term of 5 consecutive financial years commencing from the financial year 2025-26 to the financial year 2029-30
to conduct Secretarial Audit of the Company. They have confirmed their eligibility and qualification required under the Act and the
Listing Regulations for holding office, as the Secretarial Auditor of the Company.

DISCLOSURES
Meetings of the Board

Five Meetings of the Board of Directors were held during the financial year under review. The particulars of the meetings held and
attendance of each Director are detailed in the Corporate Governance Report forming part of this Annual Report.

Further, maximum interval between two meetings of the Board of the Directors has not exceeded 120 days.

Committees of Board

The Company has in place the Committee(s) as mandated under the provisions of the Act and the Listing Regulations. There are
currently five committees of the Board, namely:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders’ Relationship Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee (constituted voluntarily by the Company).

Details of the Committees along with their terms of reference, composition and meetings held during the year, are provided in the
Corporate Governance Report, which forms part of this report.

VIGIL MECHANISM AND WHISTLE BLOWER POLICY

The Company has established a robust Vigil Mechanism and has a Whistle Blower Policy (“Policy”), to provide a formal mechanism
to its employees and other stakeholders to report instances of fraud, actual or suspected violations of applicable laws and regulations
and the Code of Conduct. The Policy provides for a mechanism to report such concerns to the Compliance Officer of the Company
or Chairman of the Audit Committee in exceptional cases.

During the year under review, no Protected Disclosure concerning any Reportable Matter in accordance with the Policy of the
Company was received by the Company.

The Policy is available on the Company’s website and can be accessed at https://www.lotuschocolate.com/documents/files/Vigil-
Mechanism-and-Whistle-Blower-Policy.pdf.

PREVENTION OF SEXUAL HARRASSMENT AT WORKPLACE

In accordance with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act,
2013 (‘POSH Act’) and Rules made thereunder, the Company has in place a policy which mandates no tolerance against any conduct
amounting to sexual harassment of women at workplace. The Company has constituted an Internal Committee to redress and resolve
any complaint arising under the POSH Act. Training/awareness programs are conducted throughout the year to create sensitivity
towards ensuring respectable workplace.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITIES PROVIDED

The Company has not given any loan or provided guarantee or made any investments or offered any security in connection with loans
to any other body corporate or individual during the year under review. (Please refer Note 34 to the financial statement).

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

The particulars relating to conservation of energy, technology absorption and foreign exchange earnings & outgo, as required to be
disclosed under the Act, are provided in Annexure - III to this Report.

ANNUAL RETURN

The Annual Return of the Company as on March 31,2025 is available on the Company’s website and can be accessed at https://www.
lotuschocolate.com/documents/downloads/Annual Return 24-25.pdf.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names of top ten employees in terms of remuneration
drawn forms part of this Report. Further, since there is no employee drawing remuneration in excess of the limits prescribed under
Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the requirement of disclosure
in terms of Section 197(12) of the Act read with said rule does not arise.

Disclosures relating to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report.

Having regard to the provisions of the second proviso to Section 136(1) of the Act and as advised, the Annual Report excluding
the aforesaid information is being sent to the Members of the Company. Any member interested in obtaining such information may
address their email to [e-mail].

GENERAL

During the year under review:

a) the Company has not accepted deposits covered under Chapter V of the Act;

b) the Company has not issued equity shares with differential rights as to dividend, voting or otherwise;

c) the Company has not issued shares (including sweat equity shares) to employees of the Company under any scheme;

d) the Company has not issued any debentures, bonds, warrants or any other convertible securities;

e) the Company did not have any scheme for provision of money for the purchase of its own shares by employees or by trustees
for the benefit of employees;

f) no significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status
and Company’s operations in future;

g) no fraud has been reported by the Auditors to the Audit Committee or the Board of Directors of the Company;

h) as the Company did not have any joint venture or associate company during the year, the reporting requirements under Rule
8(1) and Rule 8(5)(iv) of the Companies (Accounts) Rules, 2014 are also not applicable to the Company;

i) there has been no change in capital structure of the Company;

j) there has been no instance of transferring the funds to the Investor Education and Protection Fund;

k) there has been no change in the nature of business of the Company;

l) the Company is not required to maintain cost records as prescribed by the Central Government under Section 148(1) of the Act;

m) the Company has not bought back its shares, pursuant to the provisions of Section 68 of the Act and Rules made thereunder;

n) the Company did not have any Managing Director (“MD”) or Whole-time Director (“WTD”), hence the disclosure requirement
in respect of receipt of remuneration does not arise;

o) the financial statements of the Company were not revised.

p) statement of deviation or variation in connection with preferential issue was not applicable to the Company;

q) the Company has not failed to implement any corporate action;

r) there was no amendment in the policies referred to in this report;

s) the Company is fully compliant with the provisions of the Maternity Benefit Act, 1961. Maternity leave and benefits are
applicable to all eligible women as per the applicable statutory guidelines.

t) there is no proceeding pending under the Insolvency and Bankruptcy Code, 2016; and

u) there was no instance of one-time settlement with any Bank or Financial Institution.

ACKNOWLEDGEMENT

The Board places on record its deep sense of appreciation for the committed services by all the employees of the Company. The
Board of Directors would also like to express their sincere appreciation for the assistance and co-operation received from the banks,
government and regulatory authorities, stock exchange, customers, vendors and members during the year under review.

For and on behalf of the Board of Directors

Prof. Dipak C Jain
Chairman

Place: Mumbai
Date: July 16, 2025

---

Mar 31, 2024

The Board of Directors (“Board”) present the Company’s Thirty-Fifth Annual Report and the Company’s audited financial statement for the financial year ended on March 31, 2024.

FINANCIAL RESULTS

The Company’s financial performance for the year ended March 31, 2024 is summarized below:

C in crore)

Particulars	2023-24	2022-23
Revenue from operations	200.03	62.72
Profit/(Loss) Before Depreciation, Amortisation, Interest and Taxes	4.07	(6.53)
Less: Interest	0.81	0.23
Less: depreciation and amortisation Expense	1.02	0.17
Profit/(Loss) Before Tax	2.24	(6.93)
Less: tax expense (includes current tax, deferred tax, short /excess provision of tax relating to earlier years)	(2.82)	0.02
Profit/(Loss) for the Year	5.06	(6.95)
add: other comprehensive income	(0.17)	-
total Comprehensive income for the year	4.89	(6.95)

The figures for the current financial year 2023-24 are after giving effect of the amalgamation of Soubhagya Confectionery Private Limited with the Company, w.e.f. Appointed Date i.e. May 25, 2023. Accordingly, the figures for the current financial year 2023-24 are not comparable with the corresponding figures of the previous financial year.

RESULTS OF OPERATIONS AND THE STATE OF COMPANY’S AFFAIRS

Highlights of the Company’s financial performance for the year ended March 31, 2024 are as under:

During the year under review, the revenue from operations increased to '' 200.03 Crore (mainly due to giving effect of amalgamation of Soubhagya Confectionery Private Limited with the Company) as compared to '' 62.72 Crore in the previous year.

The Company has posted a profit of '' 5.06 crore for the current year as compared to a loss of '' 6.95 crore in the previous year. BUSINESS OPERATIONS

Your company has strengthened its position as one of the leading manufacturers of cocoa products in the country. Your company has two state-of-art manufacturing facilities near Hyderabad. Both facilities are equipped with the latest technologies in manufacturing with continued investment being undertaken for capacity enhancement.

Your company sources high quality cocoa beans both from Indian and global markets and manufactures cocoa derivatives including Cocoa Mass, Cocoa Butter and Cocoa powder and also offers a range of choco chips and choco slabs which are supplied to leading Food Manufacturers, Ice-cream manufacturers and Bakeries across the country. In FY 2023-24, the company has also expanded its range of consumer products with the introduction of products in confectionery and chocolate categories and also building up an omni channel distribution pathway in general retail, standalone chains and modern trade outlets.

DIVIDEND

The Board of directors has not recommended any dividend for the year under review.

MATERIAL EVENTS DURING THE YEAR UNDER REVIEW AND UPDATES THEREON Change in control over the Company

Reliance Consumer products Limited (“RCpL”) had, pursuant to a share purchase Agreement entered into with Mt Ananth p. pai and Mr. Prakash P. Pai (‘erstwhile promoters’) acquired 65,48,935 Equity Shares of the Company from the erstwhile promoters on

May 24, 2023. During the year under review, consequent upon open offer made to the public shareholders of the Company in terms of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, RCPL acquired 130 equity shares from the Public shareholders of the Company. RCPL holds 65,49,065 equity shares of the Company constituting 51% of the equity share capital of the Company. Accordingly, RCPL has become the promoter and holding company and holds sole control of the Company with effect from May 24, 2023.

Soubhagya Confectionery Private Limited

During the year under review, the Company had acquired the entire equity share capital of soubhagya Confectionery private Limited (“SCPL”). Accordingly, SCPL had became a wholly-owned subsidiary of the Company with effect from May 25, 2023.

during the year under review, the Board of directors, on the recommendation of audit Committee, approved a scheme of amalgamation of SCPL with the Company under Sections 230 to 232 of the Companies Act, 2013 (“Scheme”). The Hon’ble National Company Law Tribunal, Hyderabad Bench (“Tribunal”) vide its order dated April 3, 2024, allowed dispensation from holding of meetings of shareholders and creditors of SCPL and the Company. Further to the petition filed by the Company, Tribunal vide its order dated August 8, 2024 (effective date) sanctioned the Scheme, with Appointed Date being May 25, 2023. Accordingly, SCPL stands amalgamated with the Company.

DETAILS OF MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF REPORT

Except as stated above, no material changes and commitments occurred affecting the financial position of the Company between the end of the financial year and the date of this report.

SHARE CAPITAL

during the year under review, the Company has:

• redeemed 73,96,600, 10% Cumulative, Redeemable, Non-Convertible Preference Shares of '' 10/- each, at par.

• issued and allotted in aggregate, 5,07,93,200, 0.01% Non-cumulative, Non-convertible, Non-participating and Redeemable preference shares of '' 10/- each fully paid-up, at par, on preferential basis to Mr. Abhijeet Pai, Ms. Ashwini Pai, P.M.F. Estates private Limited and Reliance Consumer products Limited.

The paid-up share capital of the Company as on March 31, 2024 stands at '' 12,84,10,490/- divided into 1,28,41,049 Equity Shares of '' 10/- each and '' 50,79,32,000/- divided into 5,07,93,200, 0.01% Non-cumulative, Non-convertible, Non-participating and Redeemable preference shares of '' 10/- each.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management discussion and analysis Report for the year under review, as stipulated under the securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’), is presented in a separate section, forming part of the annual Report.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANY

Soubhagya Confectionery Private Limited (“SCPL”) became a wholly-owned subsidiary of the Company w.e.f. May 25, 2023. Thereafter, SCPL was amalgamated with the Company with Appointed Date being May 25, 2023, pursuant to the Scheme of Amalgamation approved by Hon’ble Tribunal vide its order dated August 08, 2024.

The Company does not have any subsidiary, joint venture or associate company as on the date of this report.

SECRETARIAL STANDARDS

the Company has followed the applicable secretarial standards, with respect to meetings of the Board of directors (ss-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India.

DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards read with requirements set out under Schedule III to the Companies Act, 2013 (“the Act”) have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2024 and of the profit of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

e) the Directors have laid down internal financial controls to be followed by the Company and that such financial controls are adequate and are operating effectively; and

f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

CORPORATE GOVERNANCE

The Company is committed to maintain the standards of governance and has also implemented several good governance practices. The report on Corporate Governance as per Listing Regulations forms part of the Annual Report. Certificate from Practicing Company Secretary confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review:

a) The Company has allotted in aggregate 5,07,93,200 0.01% Non-cumulative, Non-convertible, Non-participating and Redeemable preference shares of '' 10/- each fully paid-up to Mr. Abhijeet Pai, Ms. Ashwini Pai, P.M.F. Estates Private Limited and Reliance Consumer products Limited.

b) The Company has acquired 100% of the equity share capital of Soubhagya Confectionery Private Limited from Mr. Prakash pai, Mr. ananth pai, Mr. abhijeet pai, Ms. ashwini pai, Mr. aditya pai and Mr. aman pai.

Except the above, the Company has not entered into any contract / arrangement / transaction with related parties which were material in accordance with the policy of the Company on Materiality of and dealing with related party transactions.

all contracts / arrangements / transactions entered by the Company with related parties were in its ordinary course of business and on an arm’s length basis.

the Company had not entered into any contract / arrangement / transaction with related parties which is required to be reported in Form No. AOC-2 in terms of Section 134(3)(h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.

The Company’s policy on Materiality of and dealing with Related party Transactions is available on the website of the Company and can be accessed at: https://www.lotuschocolate.com/documents/policies/policv-of-Materialitv-of-RpT.pdf.

There were no materially significant related party transactions which could have potential conflict with interests of the Company at large.

Members may refer to Note 33 of the Financial Statement which sets out related party disclosures pursuant to applicable Indian accounting Standard (“Ind As”).

CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility (‘CSR’) Committee is responsible to assist the Board in discharging its social responsibilities by way of formulating and monitoring implementation of the objectives set out in the ‘Corporate Social Responsibility policy’ (‘CSR policy’).

The CSR policy, formulated by the CSR Committee and approved by the Board, continues unchanged. The CSR policy is available on the Company’s website at https://www.lotuschocolate.com/documents/policies/LCCL-CSR-policy.pdf.

The Annual Report on CSR activities is annexed herewith and marked as Annexure-I to this Report.

RISK MANAGEMENT

The Board of the Company has formed a Risk Management Committee, on voluntary basis, to frame, implement and monitor the risk management policy/plan for the Company and ensuring its effectiveness.

The Risk Management Committee oversees the risk management processes including risk identification, impact assessment, effective implementation of the mitigation plans and risk reporting. The Audit Committee has an additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

The details on the risk management are also covered in the Management Discussion and Analysis Report, which forms part of this Annual Report.

INTERNAL FINANCIAL CONTROLS

The Company has an Internal Control System, commensurate with its size, scale and complexity of its operations.

The Internal Audit Team monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby further strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

The Board has laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively. Your Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures etc.

The Company continues to have periodic internal audits conducted of all its critical functions and activities to ensure that systems and processes are followed across all areas.

The Audit Committee of the Board of the Company reviews the adequacy of internal control systems through such audits. The Internal Auditor reports directly to the Audit Committee.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Krishnakumar Thirumalai and Mr. Ketan Mody, Directors of the Company, retire by rotation at the ensuing Annual General Meeting. The Board of Directors, based on the recommendation of Nomination and Remuneration Committee (“NRC”) has recommended their re-appointment.

Mr. Gottemukkala Venkatapathi Raju resigned from the Board with effect from close of business hours of May 24, 2023 pursuant to the terms of Share Purchase Agreement dated December 29, 2022 entered into between RCPL, Mr. Ananth P. Pai and Mr. Prakash P. Pai. Further, Mr. Gottemukkala Venkatapathi Raju also confirmed that there are no other material reasons other than those provided in his resignation letter dated May 24, 2023.

Further, Mr. Gangasani Sudhakar Reddy, Mr. Admala Surya Prakash Reddy and Ms. Usha Abbagani also resigned from the Board with effect from close of business hours of May 24, 2023. The Board places on record its sincere appreciation for the contribution made by them during their tenure on the Board of the Company.

The Board of Directors, based on the recommendation of the NRC, approved the appointment of Prof. Dipak C. Jain and Mr. K. Sudarshan as Additional Directors, designated as Independent Directors of the Company w.e.f. May 24, 2023 and at the Annual General Meeting held on August 10, 2023, the shareholders approved their appointment as Independent Directors of the Company for a period of 5 years upto May 23, 2028.

In the opinion of the Board, Prof. Dipak C. Jain and Mr. K. Sudarshan possess requisite expertise, proficiency, integrity and experience.

The Board of Directors, based on the recommendation of the NRC, also approved the appointment of Mr. Krishnakumar Thirumalai, Mr. Ketan Mody, Ms. Renuka Shastry and Mr. Dinesh Taluja as Additional Directors, designated as Non-Executive Directors of the Company. The shareholders of the Company, at the Annual General Meeting held on August 10, 2023, approved their appointment as Non-Executive Directors of the Company, liable to retire by rotation.

Mr. Subramanya Ram Ganpath ceased to be Whole-time Director of the Company upon completion of his term on November 02, 2023.

The Board of Directors, based on the recommendation of the NRC, approved the appointment of Mr. Asim Parekh as Additional Director, designated as Non-Executive Director of the Company with effect from January 03, 2024 and the shareholders approved

his appointment as Non-Executive Director of the Company, liable to retire by rotation, through resolution passed by postal ballot on March 29, 2024.

Mr. Vivekanand Prabhu resigned as Chief Financial Officer of the Company w.e.f. July 18, 2023. The Board of Directors, based on the recommendation of NRC and Audit Committee, also approved the appointment of Mr. S. Gautham as Chief Financial Officer of the Company w.e.f. July 18, 2023.

The Board of Directors, based on the recommendation of NRC, approved the appointment of Mr. Sikander Khullar as Chief Executive Officer of the Company w.e.f. July 18, 2023. Mr. Sikander Khullar resigned as Chief Executive Officer of the Company w.e.f. close of business hours of January 02, 2024.

The Board of directors subsequently based on the recommendation of NRC, approved the appointment of Mr. sandipan Ghosh as the Chief Executive Officer of the Company w.e.f. January 03, 2024.

Mr. Subodhakanta Sahoo resigned as Company Secretary and Compliance officer of the Company w.e.f. close of business hours of January 02, 2024. The Board of Directors based on the recommendation of NRC, approved the appointment of Mr. Utsav Saini as the Company Secretary and Compliance officer w.e.f. January 03, 2024.

The Company has received declarations from all the Independent Directors of the Company confirming that:

a) they meet the criteria of independence prescribed under the Act and the Listing Regulations;

b) they have registered their names in the Independent Directors’ Databank; and

c) they have affirmed compliance to the code of conduct for Independent Directors as prescribed in Schedule IV to the Act.

the nomination and Remuneration policy as approved by the Board is available on the Company’s website and can be accessed at https://www.lotuschocolate.com/documents/policies/Nominations-and-remuneration-Policv.pdf.

The Policy sets out the guiding principles for NRC for identifying persons who may be appointed in Senior Management and who are qualified to become Directors and to determine the independence of Directors, while considering their appointment as Independent Directors of the Company. The Policy also provides for the factors in evaluating the suitability of individual Board members with diverse background and experience that are relevant for the Company’s operations.

The Policy also sets out the guiding principles for NRC for recommending to the Board, the remuneration of the Directors, Key Managerial personnel and other senior Managerial personnel.

There has been no change in the aforesaid policy during the year.

PERFORMANCE EVALUATION

The Company has a policy for performance evaluation of the Board, Committees and other individual Directors (including Independent Directors) which includes criteria for performance evaluation of Directors.

In accordance with the manner of evaluation specified by the NRC, the Board carried out annual performance evaluation of the Board, its Committees and Individual Directors. The Independent Directors carried out annual performance evaluation of the Chairman, the non-independent directors and the Board as a whole. The Chairman of the respective Committees shared the report on evaluation with the respective Committee members. The performance of each Committee was evaluated by the Board based on the report of evaluation received from the respective Committees. A consolidated report was shared with the Chairman of the Board for his review and giving feedback to each Director.

AUDITORS AND AUDITORS’ REPORT STATUTORY AUDITORS

Deloitte Haskins & Sells LLP, Chartered Accountants, were appointed as the Statutory Auditors of the Company for a term of 5 consecutive years, at the 34^th Annual General Meeting held on August 10, 2023 in place of VDNR & Associates, Chartered Accountants, who had resigned as Statutory Auditors of the Company during the year under review. Deloitte Haskins & Sells LLP have confirmed that they are not disqualified from continuing as the Statutory Auditors of the Company.

The Auditors’ Report does not contain any qualification, reservation, adverse remark or disclaimer. The Notes to the financial statements referred in the Auditors’ Report are self-explanatory and do not call for any further comments.

SECRETARIAL AUDITOR

The Board had appointed Ms. Rakhi Agarwal, Practicing Company Secretary, to conduct Secretarial Audit of the Company for the FY 2023-24. The Secretarial Audit Report for the financial year ended March 31,2024 is annexed and marked as Annexure-II to this Report. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

DISCLOSURES Meetings of the Board

Six Meetings of the Board of Directors were held during the year. The particulars of the meetings held and attendance of each Director are detailed in the Corporate Governance Report forming part of this Annual Report.

Committees of Board

the Company has several committees of the Board, which have been established as part of good Corporate Governance practices and to comply with the requirements of the relevant provisions of applicable laws and statutes.

Audit Committee

During the year under review, Mr. Gottemukkala Venkatapathi Raju and Ms. Usha Abbagani ceased to be the Directors of the Company and consequently ceased to be the members of the audit Committee. the audit Committee presently comprises of M. Bharathan Rajagopalan Thatai (Chairman), Prof. Dipak C. Jain, Mr. K. Sudarshan and Mr. Dinesh Taluja. All the recommendations made by the audit Committee were accepted by the Board.

Nomination and Remuneration Committee

During the year under review, Mr. Gottemukkala Venkatapathi Raju and Ms. Usha Abbagani ceased to be the Directors of the Company and consequently ceased to be the Chairman and member of the NRC, respectively. The NRC presently comprises of Mr. K. Sudarshan (Chairman), Prof. Dipak C. Jain, Mr. Bharathan Rajagopalan Thatai and Mr. Ketan Mody.

Corporate Social Responsibility Committee

During the year under review, Ms. Usha Abbagani and Mr. Gangasani Sudhakar Reddy ceased to be the Directors of the Company and consequently ceased to be the members of the Corporate social Responsibility Committee. the Corporate social Responsibility Committee presently comprises of Mr. Bharathan Rajagopalan Thatai (Chairman), Mr. K. Sudarshan, Mr. Ketan Mody and Mr. Dinesh taluja.

Stakeholders’ Relationship Committee

During the year under review, Ms. Usha Abbagani, Mr. Gottemukkala Venkatapathi Raju and Mr. Subramanya Ram Ganpath ceased to be the Directors of the Company and consequently ceased to be the Chairperson and members of the Stakeholders’ Relationship Committee, respectively. The Stakeholders’ Relationship Committee presently comprises of Mr. Dinesh Taluja (Chairman), Mr. Ketan Mody and Prof. Dipak C. Jain.

Risk Management Committee

During the year under review, Mr. Gangasani Sudhakar Reddy, Ms. Usha Abbagani and Mr. Subramanya Ram Ganpath, ceased to be the Directors of the Company and consequently ceased to be the Chairman and members of the Risk Management Committee, respectively. The Risk Management Committee presently comprises of Mr. Dinesh Taluja (Chairman), Mr. K. Sudarshan and Mr. Ketan Mody.

WHISTLE BLOWER POLICY

Your Company has in place a Whistle Blower Policy (‘Policy’), to provide a formal mechanism to its employees and stakeholders to report instances of fraud, actual or suspected violations of applicable laws and regulations and the Code of Conduct. the policy provides for a mechanism to report such concerns to the Chairman of the Audit Committee. The framework of the Policy strives to foster responsible and secure whistle blowing.

In terms of the policy of the Company, no employee of the Company has been denied access to the Chairman of the audit Committee. during the year under review, no protected disclosure concerning any reportable matter in accordance with the policy of the Company was received by the Company.

the policy is available on the Company’s website and can be accessed at https://www.lotuschocolate.com/documents/policies/ Whistle-blower-policv.pdf.

PREVENTION OF SEXUAL HARRASSMENT AT WORKPLACE

In accordance with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (‘POSH Act’) and Rules made thereunder, the Company has a policy in place which mandates no tolerance against any conduct amounting to sexual harassment of women at workplace. The Company has constituted an Internal Complaints Committee to redress and resolve any complaints arising under the POSH Act. Training/awareness programs are conducted during the year to create sensitivity towards ensuring respectable workplace.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN OR SECURITIES PROVIDED

The Company has not provided any loan or guarantee, made any investments, or offered any security in connection with loans to any other body corporate or individual, except acquisition of 14,80,000 equity shares of '' 10/- each of Soubhagya Confectionery Private Limited, which stands amalgamated with the Company pursuant to scheme of amalgamation as on date of this report. (please refer Note 36 to the financial statement).

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

The particulars relating to conservation of energy, technology absorption and foreign exchange earnings & outgo, as required to be disclosed under the Act, are provided in Annexure III to this Report.

ANNUAL RETURN

The Annual Return of the Company as on March 31, 2024 is available on the Company’s website and can be accessed at https://www.lotuschocolate.com/documents/annual return/2023-24.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Since there is no employee drawing remuneration in excess of the limits prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the requirement of disclosure in terms of Section 197(12) of the Act read with said rule does not arise.

Disclosures relating to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report.

Pursuant to the provisions of the second proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. Any member interested in obtaining such information may address their email to [e-mail].

GENERAL

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

a. Details relating to deposits covered under Chapter V of the Act.

b. Issue of equity shares with differential rights as to dividend, voting or otherwise.

c. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

d. Issue of any debentures, bonds, warrants or any other convertible securities.

e. Any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

f. The Whole time Director has not received any remuneration or commission from the holding or subsidiary company.

g. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

h. No fraud has been reported by the Auditors to the Audit Committee or the Board.

i. There was no amount transferred to the Reserves of the Company. Please refer to Statement of changes in Equity in the Financial Statement of the Company for details pertaining to changes during the year in Other Equity.

j. There has been no change in the nature of business of the Company.

k. There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016.

l. There was no instance of one-time settlement with any Bank or Financial Institution.

m. Maintenance of cost records as prescribed by the Central Government under Section 148(1) of the Act.

ACKNOWLEDGEMENT

The Board places on record its deep sense of appreciation for the committed services by all the employees of the Company. The Board of Directors would also like to express their sincere appreciation for the assistance and co-operation received from the banks, government and regulatory authorities, stock exchange, customers, vendors and members during the year under review.

For and on behalf of the Board of Directors

Bharathan Rajagopalan Thatai Chairman

Hyderabad, August 19, 2024

---

Mar 31, 2016

To The Members of

Lotus Chocolate Company Limited

The Directors have pleasure in presenting the 27th Annual Report of your Company and the Audited Financial Statements for the Financial Year ended 31st March 2016 together with Auditors'' Report thereon.

FINANCIAL RESULTS:

The performance of the Company during the year has been as under:

(Amount in Rs.. Lakhs)

	Current Year Ended 31.03.2016	Previous Year Ended 31.03.2015
Turnover	6539.56	6077.95
Other Income	21.84	65.76
Profit/(Loss) before exceptional, items	128.30	77.67
Profit/(Loss) before Taxation	125.71	71.07
Net Profit after Taxation	125.71	71.07

PERFORMANCE :

During the year under review the turnover of the Company is Rs..65.40 Crores in comparison to the previous year''s figure at Rs.. 60.78 Crores.

The company has achieved net profit after tax which is reported at Rs.. 125.71 lakhs in comparison to Rs.. 71.07 lakhs in the previous year. The company has been trying hard to reduce the finance and other costs to improve more profits. In future after adopting all cost cutting measures and by improving its overall sales the company is hopeful of performing much better and improves its profitability accordingly.

FIXED DEPOSITS:

The Company has not accepted or invited any Deposits and consequently no deposit has matured / become due for re-payment as on 31st March 2016.

DIRECTORS :

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (LODR) Regulations,2015. Further, there has been no change in the circumstances which may affect their status as independent Director during the year.

The brief particulars of the Directors seeking appointment/reappointment at this Annual General Meeting are being annexed to the Corporate Governance Report.

Sri Rabindranath Jarugumilli resigned during the year 2016-17. The Directors place on record his appreciation for the services rendered by him during his tenure.

Pursuant to the provisions of Section 149(4) of the Act, the appointment of Shri. A. Surya Prakash Reddy was formalized as the Independent Director of the Company.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 the Board has carried out performance evaluation taking into consideration of various aspects of the Board''s functioning, composition of Board, and its Committees, execution, and performance of specific duties, obligations and governance. The Performance of evaluation of Independent Directors was completed. The Performance evaluation of Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with evaluation process.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy which lays down a framework in relation to selection, appointment and remuneration to Directors, Key Managerial Personnel and Senior Management of the Company. The Remuneration Policy is stated in the Corporate Governance Report.

MEETINGS

During the year 5 Board Meetings and 5 Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period of 120 days as prescribed under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

RELATED PARTY TRANSACTIONS

All transactions entered with Related Parties for the year under review were on the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for approval, where ever required. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseeable and repetitive in nature. A statement giving details of all related party transactions entered into pursuant to the omnibus approval so granted are placed before the Audit Committee and the Board of Directors on a Quarterly basis. The Company has developed a Policy on Related Party Transactions for the purpose of identification and monitoring of such transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website.

The particulars of contracts and arrangements with related parties referred to in sub-section (1) of section 188 is prepared in Form AOC-2 pursuant to clause (h) of the Companies (Accounts) Rules, 2014 and the same is annexed herewith as "Annexure-I” to this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT:

There are no significant and material orders passed by the Regulators/ Courts that would impact the going concern status of the Company and its future operations.

AUDITORS

Statutory Auditors

Pursuant to the provisions of Section 139 of the Act and the rules framed there under, M/s S. R. Mohan & Company, Chartered Accountants, were appointed as statutory auditors of the Company from the conclusion of the 25th Annual General Meeting of the Company held on 30th September, 2014 till the conclusion of the 28th Annual General Meeting to be held in the year 2017, subject to ratification of their re-appointment at every AGM.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mrs. Rakhi Agarwal, Company Secretary in Practice to undertake the Secretarial Audit of the Company for the Financial Year 2015-16. The Report of the Secretarial Audit Report is annexed herewith as "Annexure-II”.

Internal Auditors

M/s Vasanth Pai & Co. Chartered Accountants performs the duties of internal auditors of the Company and their report is reviewed by the Audit Committee from time to time.

ISO 9001:22000 CERTIFICATION

Your Company continues to hold ISO 9001-2008 Certification by meeting all the requirements of Certification from time to time.

FSSC CERTIFICATION

Your company''s manufacturing factory located at Nastipur, Medak District has been certified to the latest version of FSSC 22000:2010 (Food Safety Standard Certification by TUV NORD).

This Certification indicates our commitment in a sustainable manner, in meeting global quality, environment, health and safety standards. This is a milestone in our quest for quality.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulated under SEBI (LODR) Regulations, 2015 with the stock exchanges, is presented in a separate section forms part of the Annual Report.

CORPORATE GOVERNANCE:

The Company has implemented the procedures and adopted practices in conformity with the Code of Corporate Governance enunciated in the SEBI (LODR) Regulations, 2015 with the Stock Exchanges.

A separate report on corporate governance practices followed by the Company together with a Certificate from the Company''s Auditors confirming compliances forms an integral part of this Report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure-III".

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

The Board of your company has laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and operating effectively. Your company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the company''s policies, the safeguarding its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

RISK MANAGEMENT

The Board of the Company has formed a Risk Management Committee to frame, implement and monitor the risk management policy/plan for the Company and ensuring its effectiveness. The Risk Management Committee oversees the Risk Management process including risk identification, impact assessment, effective implementation of the mitigation plans and risk reporting. The Audit Committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the management discussion and analysis, which forms part of this report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour the company has adopted a vigil mechanism policy.

HUMAN RESOURCES

Many initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement programmes which has helped the Organization achieve higher productivity levels. A significant effort has also been undertaken to develop leadership as well as technical/ functional capabilities in order to meet future talent requirement.

DIRECTORS'' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a) That in the preparation of the accounts for the financial year ended 31st March, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the State of Affairs of the Company at the end of the Financial Year and of the Profit or Loss, Cash flow of the Company for the year under review;

c) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) That the Directors have prepared the accounts for the financial year ended 31st March 2016 on a ''going concern'' basis;

e) That proper internal financial controls were in place and that the financial controls were adequate and operating effectively; and

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

PARTICULARS IN RESPECT OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo required to be disclosed under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 are provided in the Annexure forming part of this Report.

DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under.

During the financial year 2015-16, the Company received no complaints on sexual harassment.

PARTICULARS OF EMPLOYEES

The Company has not employed any individual whose remuneration falls within the purview of the limits prescribed under the provisions of Section 197 of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

PARTICULARS OF REMUNERATION

Disclosures with respect to the remuneration of Directors and employees as required under Section 197(12) of Companies Act, 2013 and Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided as follows:

(i) The ratio of the remuneration of each Director to the median remuneration of the employees of the company for the financial year;

Name of the Director	Ratio to Median Remuneration
Shri Subramanya Ram Ganpath, WTD	3.739
Shri Dilip Mangesh Kalelkar, WTD	3.008

(ii) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;

Name of Person	% increase in remuneration
Shri Subramanya Ram Ganpath, WTD	--
Shri Dilip Mangesh Kalelkar, WTD	--
Shri U. V.Kini, Company Secretary	--
Shri Kommula Ganeswara Rao, CFO	--

(iii) The percentage increase in the median remuneration of employees in the financial year is 5%.

(iv) The number of permanent employees on the rolls of company is 135.

(v) The explanation on the relationship between average increase in remuneration and company performance;

On an average, employees received an increase of 5%. The increase in remuneration is in line with the market trends.

(vi) Comparison of the remuneration of the Key Managerial Personnel against the performance of the company;

Particulars	Rs.
Remuneration of Key Managerial Personnel (KMP) during financial year 2015-16 (aggregated)	1,345,800
Total Revenue	656,140,289
Remuneration (as % of Total Revenue)	0.205

(vii) variations in the market capitalization of the company, price earnings ratio as at the closing date of the current financial year and previous financial year;

Particulars	Unit	As at 31.03.2016	As at 31.03.2015
Closing rate of share at BSE	Rs..	51	47
EPS (Consolidated)	Rs..	0.98	0.55
Market Capitalization	Rs..	654,893,499	603,529,303
Price Earnings ratio	Ratio	52	85

(viii) Average percentile increase 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 increase in salaries of employees other than managerial personnel in 2015-16 was 5.00%.

Percentage increase in the managerial remuneration for the year was - Nil

(ix) Comparison of the each remuneration of the Key Managerial Personnel against the performance of the company;

Name of Person	Remuneration (Rs.)	Total Revenue (Rs.)	Remuneration as % of Total Revenue
Shri Subramanya Ram Ganpath, WTD	745,800	656,140,289	0.114
Shri Dilip Mangesh Kalelkar, WTD	600,000	656,140,289	0.091

(x) The key parameters for any variable component of remuneration availed by the Directors - No.

(xi) The ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year - Nil

(xii) Affirmation that the remuneration is as per the remuneration policy of the company - Yes.

Your Directors wish to place on record their appreciation to employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the industry, despite increased competition from several existing and new players.

CAUTIONARY STATEMENT

Statements in the Board''s Report and the Management Discussion & Analysis describing the Company''s objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company''s operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

ACKNOWLEDGEMENTS:

The Board desires to place on record its sincere appreciation for the support and co-operation that the Company received from the suppliers, customers, strategic partners, Bankers, Auditors, Registrar and Transfer Agents and all others associated with the Company. The Company has always looked upon them as partners in its progress and has happily shared with them rewards of growth. It will be the Company''s endeavor to build and nurture strong links with trade based on mutuality, respect and co-operation with each other.

By Order of the Board

For LOTUS CHOCOLATE COMPANY LIMITED

Sd/- Sd/-

P. Ananth Pai G.S. Ram

DIRECTOR WHOLE TIME DIRECTOR

DIN: 00048339 DIN: 02395478

Place : Hyderabad

Date : 12.08.2016

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Mar 31, 2014

To the Members,

The Directors are pleased to present the 25th Annual Report together with the audited accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS Rs. in lakhs Year Year ended ended 2014 2013

Income 5680.47 4700.05

Gross Profit before

Interest & Depreciation (162.15) (49.61)

Interest (40.65) (52.54)

Depreciation (66.50) (51.28)

Profit/(loss) for the year (269.30) (153.43)

Loss brought forward from previous year (2887.88) (2734.45)

Loss carried forward To Balance Sheet (3157.18) (2887.88)

PERFORMANCE

Lotus has achieved a sales turnover at Rs.5630 Lakhs for the financial year ended 31.03.2014 representing a growth rate of 21.21% over the preceding year. However, the company could not turn the corner as the hike in the input cost has affected the bottom line. Further, stiff competition has resulted in erosion of prices and margins of the products. The management is addressing this area of concern as major initiatives are planned during the current fiscal year. Your company''s performance has been led through modest investments in your brands, products, innovation initiatives, expansion into new product categories and managing operating costs through cost efficiency measures.

BUSINESS PLAN

During the year the company has exported Cocoa butter and work has been initiated for opening up avenues for considerable volumes in the domestic market, focusing on large national players.

During the year under review, the Company withstood heavy competition, reflecting strong consumer demand for all its products and services.

The most significant impact will be the cost escalation on the prime inputs, high escalation in the cost of power/steam generation and heavy power cuts had a cascading impact on product competitiveness.

A passionate commitment to serve a larger segment of customers is the core of your company''s business strategy.

Going forward the Company''s relentless endeavor to create new benchmarks in sustainable business practices will lend it a unique source of competitive advantage in an increasingly challenging socio- economic environment.

FSSC CERTIFICATION

Your company''s manufacturing factory located at Narsapur, Medak District has been certified to the latest version of FSSC 22000:2010 ( Food Safety Standard Certification by TUV NORD).

This Certification indicates our commitment in a sustainable manner, in meeting global quality, environment, health and safety standards. This is a milestone in our quest for quality.

RESEARCH AND DEVELOPMENT

1. The introduction of medicinal and organic ingredients in the manufacturing of chocolates had lead to a new trend and development in the country, which will be adapted by major manufacturers to remain active in the market. Keeping this in view, emphasis has been given by R & D team of flavor manufacturers specific. Development of Choco- pie enrobing mass and biscuit cream for reputed indigenous and MNC firms are under process.

2. Work on innovative consumer range of products is under progress. Adequate exposure and training are being imparted to the team in relevant areas for better understanding of the process, process controls and product needs.

PARTICULARS OF EMPLOYEES

During the year under review, none of the employees of the Company have drawn remuneration as specified under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

PARTICULARS REGARDING ENERGY CONSERVATION ETC.

The particulars required under Section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are annexed to this Report.

DEPOSITS

The Company has not accepted any deposit during the year under review.

BOARD OF DIRECTORS

In accordance with the provisions of Section 152 of the Companies Act 2013 directors Shri.Abhijeet Pai and Shri.G V P Raju retire by rotation at the Annual General Meeting and being eligible offer themselves for reappointment. Shri Ganpath Subramanya Ram and Shri Dilip Mangesh Kalelkar was reappointed as Whole Time Directors of the Company.

AUDITORS REPORT

The observations made in the Auditor''s Report, read together with the relevant notes thereon are self explanatory and hence, do not call for any comments.

AUDITORS

M/s S R Mohan & Company, Chartered Accountants Hyderabad, Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting. The Company has received a letter from them to the effect that their appointment,if made, would be within the prescribed limits under Section 141(3)(g) of Companies Act, 2013. Accordingly the said Auditors are reappointed as Statutory Auditors of the Company at the ensuing Annual General Meeting till the conclusion of 28th Annual General Meeting to be held in the year 2017 (subject to ratification of their appointment by the members at every AGM held after this AGM).

Listing Arrangements

The Company''s shares are listed on BSE LIMITED.

The Company has paid up to date annual listing fee of the Stock Exchange.

Public Deposits

During the year under review the Company has not accepted any public deposits.

Insurance

Adequate Insurance cover has been taken for properties of the Company including Buildings, Computers, Office Equipments, Vehicles, etc.

Management''s Discussion and Analysis Report Management''s Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, now section 134 of Companies Act 2013, with respect to Directors'' Responsibility Statement, it is hereby confirmed that-

The Board submits as under :

- that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

- that the directors had selected such accounting policies and applied them 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 at the end of the financial year and of the profit or loss of the company for that period;

- that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

- that the directors had prepared the annual accounts on a going concern basis Corporate Governance The Company is committed to maintain the highest standards of Corporate Governance. Your Directors affirmed to the requirements set out in the Listing Agreement with the Stock Exchanges and have implemented all the stipulations prescribed. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges forms part of the Annual Report. The requisite certificate from the Practising Company Secretary, Rakhi Agarwal from Rakhi Agarwal & Associates, confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is annexed to this Report. A Cash Flow Statement for the Financial Year 2013-14 of the Company is attached to the Balance Sheet.

ACKNOWLEDGEMENT

Yours Directors place on record the appreciation for the sincere efforts and hard work put in by the employees of the Company in its operations. The Directors acknowledge the support and co - operation received from Banks and other Governmental Agencies.

The Directors express their gratitude to the shareholders of the Company for the confidence and faith reposed in the management.

For and on behalf of the Board

P.Ananth Pai GS.Ram Director Whole Time Director Place : Hyderabad Date : August 20, 2014

---

Mar 31, 2013

To the Members,

The Directors are pleased to present the 24th Annual Report together with the audited accounts for the year ended 31st March, 2013.

FINANCIAL RESULTS

Rs.in lakhs

Year Year ended ended 2013 2012

Income 4700.05 5569.16

Gross Profit before

Interest & Depreciation (49.61) 21.27

Interest (52.54) (179.90)

Depreciation (51.28) (49.51)

Profit/(loss) for the year (153.43) (208.14)

Loss brought forward from previous year (2734.45) (2526.31)

Loss carried forward to Balance Sheet (2887.88) (2734.45)

PERFORMANCE

Lotus has achieved a sales turnover at Rs..4645 Lakhs for the period ended 31.03.2013. The Company continued to follow its policy offering value to the customers with sales prices just below inflation. The management is addressing this area of concern as major initiatives are planned during the current fiscal year. Your company''s performance has been led through modest investments in our brands, products, innovation initiatives, expansion into new product categories and an uphill task in managing operating costs through cost efficiency measures.

BUSINESS PLAN

The Company has entered into an agreement with Bharti Wal-Mart for co-brand of chocolate products and the Company is planning to launch pure milk chocolate under the brand Milk Chocolate Chuckles.

During the year under review the Company withstood heavy competition, reflecting strong consumer demand for all its products and services.

The most significant impact will be the cost escalation on the prime inputs, higher escalation on the cost of power/steam generation and heavy power cut (almost three days in a week) had a cumulative devastating impact on product competitiveness.

Indeed a passionate commitment to serve a larger segment of customers is the core of your company''s business strategy.

Going forward the Company''s relentless endeavour to create new benchmarks in sustainable business practices will lend it a unique source of competitive advantage in an increasingly challenging social-economic environment.

FSSC CERTIFICATION

Your company''s manufacturing factory located at Narsapur, Medak District has been certified to the latest version of FSSC 22000:2010 (Food Safety Standard Certification by TUV NORD). This Certification indicates our commitment in a sustainable manner, in meeting global quality, environment, health and safety standards. This is a milestone in our quest for quality.

RESEARCH AND DEVELOPMENT

During current financial year, empahasis has been given by R & D, to cater the needs of MNC Buyers.

1. By working closely with R&D team of flavor manufacturers specific, nature identical flavours are developed to boost the organoleptic characters of the consumer product and thus developed Milk Chocolate, Cashew Delight, Milkee Delight and Choco Pearls to reputed MNC and have gone into commercial production. Development of Choco-Pie enrobing mass and biscuit cream for reputed indigenous and MNC firms is under progress.

2. Our R&D progress has opened a new business avenue with one of the business giants like Bharathi Wal- Mart and could reach company''s esteemed customers'' specific needs and retained their trust in our business outlook and openness.

3. Work on innovative consumer range of products is under progress. Adequate exposure and training are being imparted to the team in relevant areas for better understanding the process, process controls and product needs.

PARTICULARS OF EMPLOYEES

During the year under review, none of the employees of the Company have drawn remuneration as specified under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

PARTICULARS REGARDING ENERGY CONSERVATION ETC.

The particulars required under Section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are annexed to this Report.

DEPOSITS

The Company has not accepted any deposit during the year under review.

BOARD OF DIRECTORS

Shri P Prakash Pai and Shri P Anantha Pai , Directors retire by rotation at the 24th Annual General Meeting and being eligible, offer themselves for reappointment.

AUDITORS

M/s S R Mohan & Company, Chartered Accountants, Hyderabad, Statutory Auditors of your Company hold office until the conclusion of the 24th Annual General Meeting and are being proposed for re-appointment. The Company has received a certificate from them to the effect that their appointment, if made would be within the limits prescribed under Section 224(1) of the Companies Act, 1956.

DIRECTORS RESPONSIBILITY STATEMENT

The Board submits as under : that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; that the directors had selected such accounting policies and applied them 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 at the end of the financial year and of the profit or loss of the company for that period;

- that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

that the directors had prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENT

Yours Directors place on record the appreciation for the sincere efforts and hard work put in by the employees of the Company in its operations. The Directors acknowledge the support and co - operation received from Banks and other Governmental Agencies.

The Directors express their gratitude to the shareholders of the Company for the confidence and faith reposed in the management.

For and on behalf of the Board

Sd/- Sd/-

P.Anantha Pai GS.Ram

Director Whole Time Director

Place : Hyderabad

Date : 19th August, 2013

---

Mar 31, 2012

The Directors are pleased to present the 23rd Annual Report together with the audited accounts for the year ended 31st March, 2012.

FINANCIAL RESULTS

Rs in lakhs

Year ended Year ended 2012 2011

Income 5569.16 3902.54

Gross Profit before Interest & Depreciation 21.27 (337.13)

Interest (179.90) (81.79)

Depreciation (49.51) (50.67)

Profit/(loss) for the year (208.14) (469.59)

Loss brought forward from previous year (2526.31) (2039.57) Loss carried forward

To Balance Sheet (2734.45) (2526.31)

PERFORMANCE

Lotus has achieved a sales turnover at Rs.5569.16 Lakhs for the period ended 31.03.2012. The Company continued to follow its policy of offering value to the customers with sales prices just below inflation. The Management is addressing this area of concern as major initiatives are planned during the current fiscal year. Your company's performance has been led through modest investments in our brands, products, innovation initiatives, expansion into new product categories and an uphill task in managing operating costs through cost efficiency measures.

BUSINESS PLAN

During the year under review the Company withstood heavy competition, reflecting strong consumer demand for all its products and services.

The most significant impact will be the cost escalation on the prime inputs, higher escalation on the cost of power/ steam generation, had a cumulative devastating impact on the product competitiveness.

Indeed a passionate commitment to serve a larger segment of customers is the core of your company's business strategy.

Going forward the Companys' relentless endeavour to create new benchmarks in sustainable business practices will lend it an unique source of competitive advantage in an increasingly challenging socio- economic environment.

ISO CERTIFICATION

Your company's manufacturing factory located at Narsapur, Medak District has been certified to the latest version of IS 22000 (FSMS- Standard for Food Safety Management System) by Llyods, a leading International Certification Company.

This certification indicates our commitment in a sustainable manner, in meeting global quality, environment, health and safety standards. This is a milestone in our quest for quality.

The Company is planning for FSSAI Certification which covers even PAS 220 and the same will be completed before 2012.

RESEARCH AND DEVELOPMENT Efforts made on the process front:

1. It is our constant investment and innovation in our basic approach, by adding quality and originality to the products/creations.

2. The Company is able to manage the stiff competition and retained the esteemed customers within its fold and also increase processing capacity.

3. Further new products will be introduced later part of this year. To achieve this, the Company is making innovative energies to harness skills, raising performance and leadership qualities.

4. We work closely with our clients own food technologies, ensuring quality performance and stability under the most rigorous industrial processing conditions.

5. The Company is earnestly focusing on installing a full fledged chocolate and confectionary laboratory scale machinery to fabricate tailor made products to our prestigious customers.

PARTICULARS OF EMPLOYEES

During the year under review, none of the employees of the Company have drawn remuneration as specified under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

PARTICULARS REGARDING ENERGY CONSERVATION ETC.

The particulars required under Section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are annexed to this Report.

DEPOSITS

The Company has not accepted any deposit during the year under review.

BOARD OF DIRECTORS

Smt.Ashwini Pai has withdrawn as Whole Time Director, further continues as a Director who retires by rotation at the 23rd Annual General Meeting and being eligible offers herself for reappointment.

AUDITORS

M/s S R Mohan & Company, Chartered Accountants, Hyderabad, Statutory Auditors of your Company hold office until the conclusion of the 23rd Annual General Meeting and are being proposed for re-appointment. The Company has received a certificate from them to the effect that their appointment if made would be within the limits prescribed under Section 224(1) of the Companies Act, 1956.

DIRECTORS RESPONSIBILITY STATEMENT The Board submits as under :

- that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

- that the directors had selected such accounting policies and applied them 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 at the end of the financial year and of the profit or loss of the company for that period;

- that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

- that the directors had prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENT

Yours Directors place on record the appreciation for the sincere efforts and hard work put in by the employees of the Company in its operations. The Directors acknowledge the support and co - operation received from Banks and other Governmental Agencies.

The Directors express their gratitude to the shareholders of the Company for the confidence and faith reposed in the management.

For and on behalf of the Board

Sd- Sd-

P.Anantha Pai G.S.Ram

Director Whole Time Director

Place : Hyderabad

Date : 20.08.2012

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Mar 31, 2010

The Directors present the 21st Annual Report together with the audited accounts for the year ended 31st March, 2010.

FINANCIAL RESULTS

Rs in lakhs

Year Year ended ended 2010 2009

Income 3076.44 2723.04

Gross Profit before Interest & Depreciation 213.32 266.74

Interest (56.91) (7.43)

Depreciation (46.79) (92.68)

Profit/(loss) for the year 109.61 166.63

Loss brought forward from previous year (2149.19) (2315.81)

Loss carried forward to

Balance Sheet (2039.57) (2149.18)

Loss carried forward to Balance Sheet is Rs 2039.57 lakhs.

PERFORMANCE

Lotus sales turnover at Rs.3076.44 Lakhs was up 12.98 % over last year. The Company continued to follow its policy of offering value to the customers with sales prices just below inflation. The Companys volumes however remain stagnates as the capacity available was just sufficient to meet the existing market presence. The Management is addressing this area of concern as major initiatives are planned during the current fiscal year. Your companys performance has been led through modest investments in our brands , products, innovation initiatives, expansion into new product categories and an upheard task in managing operating costs through cost efficiency measures.

In the current year the actual production was 5885.66 MT as against 6988.06 MT during the previous year giving a moderate dip of 18.73%.

Concerted efforts have contributed to increase in revenue by 12.98% over previous year to Rs.3076.44 lakhs and record a net profit of Rs. 109.61 lakhs.

Your company has achieved these results despite significant increase in input costs, particularly cocoa beans, sugar, oils and fats coupled with aggressive pricing in the trade and industry.

Despite stiff competition your company stabilized and held its market share, even though 2009 was a challenging year, your company continues to operate with minimum trade pipelines selling as per the market demands and maintaining a very efficient supply chain.

BUSINESS PLAN

The promoters who acquired the business in the year 2008 has acknowledged for their understanding of common needs and robust business model. During the year the company sustained focus on generating consumer insights, innovation and renovation while continuing it on going efforts to strengthen capabilities, augment equipment capacities that continue to delight the consumers and help it to leverage its trusted brands.

Further new chocolate products will be introduced later this year.

We envisage a pan India performance by the end of this fiscal, towards this, have opened up all the markets of North India. Further we have concluded an agreement with the reputed Oil Company i.e Bharat Petroleum Corporation Limited(BPCL) for distribution of our consumer brand chocolates through their strong network.

ISO CERTIFICATION

Your companys manufacturing factory located at Narsapur, Medak District has been certified to the latest version of IS 22000 (FSMS- Standard for Food Safety Management System) by Llyods, a leading International Certification Company.

This certification indicates our commitment in meeting in a sustainable manner, global quality, environment, health and safety standards. This is a milestone in our quest for quality.

Our Company has been rated by CRISIL as SME III.

RESEARCH AND DEVELOPMENT

The research and development (R & D) function has led a significant role to play in supporting the

performance of the Company this year. Their major area of contribution lay in fuelling innovation through a number of new product development, culminating in the launch of various new products during the year.

The management intends to create the function of Innovation by engaging best leveraging external expertise to value add to our R&D programme with a view to building the medium and long term pipelines.

BIFR

A reference in terms of Section 15(1) of the Sick Industrial Companies(Special Provisions) Act, 1985 has been done and registered with the Board of Industrial and Financial Reconstrution (BIFR) for determination of the measures which shall be adopted with respect to the Company, further the company is awaiting for the hearing of the same.

PARTICULARS OF EMPLOYEES

During the year under review, none of the employees of the Company have drawn remuneration as specified under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

PARTICULARS REGARDING ENERGY CONSERVATION ETC.

The particulars required under Section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are annexed to this Report.

DEPOSITS

The Company has not accepted any deposit during the year under review.

BOARD OF DIRECTORS

Shri Prakash Pai and Shri Anantha Pai, Directors retires by rotation at the 21st Annual General Meeting and being eligible offers themselves for reappointment.

AUDITORS

M/s S R Mohan & Company, Chartered Accountants, Hyderabad, Statutory Auditors of your Company hold office until the conclusion of the

21st Annual General Meeting and are being proposed for re-appointment. The Company has received a certificate from them to the effect that their appointment if made would be within the limits prescribed under Section 224(1) of the Companies Act, 1956.

DIRECTORS RESPONSIBILITY STATEMENT

The Board submits as under:

- that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

- that the directors had selected such accounting policies and applied them 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 at the end of the financial year and of the profit or loss of the company for that period;

- that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

- that the directors had prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENT

Yours Directors place on record the appreciation for the sincere efforts and hard work put in by the employees of the Company in its operations. The Directors acknowledge the support and co - operation received from Banks and other Governmental Agencies.

The Directors express their gratitude to the shareholders of the Company for the confidence and faith reposed in the management.

For and on behalf the Board

Sd/- Sd/- P.Anantha Pai G.S.Ram Director Whole time Director Place : Hyderabad Date : 13.08.2010