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)

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 investors@lotuschocolate.com.

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