Lotus Chocolate Company Ltd Directors Report

Dear Members,

The Board of Directors present the Companys Thirty-Seventh Annual Report and the Companys audited financial statement for the financial year ended on March 31, 2026.

FINANCIAL RESULTS

The Companys financial performance for the year ended March 31, 2026 is summarized below:

Particulars	2025-26	2024-25
Revenue from Operations (net)*	579.55	573.75
Other Income	36.06	0.81
Profit/(Loss) before Depreciation, Amortization, Interest and Taxes	21.39	31.98
Less: Interest	16.30	7.11
Less: Depreciation and Amortization Expense	3.92	1.81
Profit/(Loss) Before Tax	1.17	23.06
Less: Tax Expense	1.07	5.83
(includes current tax, deferred tax, short /excess provision of tax relating to earlier year/s)
Profit/(Loss) for the Year	0.10	17.23
Add: Other comprehensive Income	0.04	(0.15)
Total Comprehensive Income for the Year	0.14	17.08

(* excludes Goods and Service Tax)

RESULTS OF OPERATIONS AND THE STATE OF COMPANYS AFFAIRS

During the year under review, the revenue from operations (excluding the goods and service tax) increased to Rs. 579.55 crore (previous year Rs. 573.75 crore). The profit before depreciation, amortization, interest and tax is Rs. 21.39 crore (previous year Rs. 31.98 crore). The Companys profit after tax is 0.10 crore as compared to a profit of 17.23 crore in the previous year.

The Companys architecture is built to drive growth by balancing volume and profit, ensuring that it scales tonnage through derivatives while disproportionately increasing our earnings through ingredients. This balanced approach is Companys roadmap to sustainable, high-value success.

To achieve this, the Company is focusing on certain key areas i.e. leveraging smart forecasting and strategic sourcing to secure the highest quality cocoa beans exactly when the crop is ready which allows extraction of maximum value from mass, butter, and powder mix; expansion of customer reach across both natural and alkalized product lines, while aggressively pursuing high-margin export opportunities; transition from a traditional supplier into an ingredient solution provider, developing custom applications for the biscuit, ice cream, chocolate and beverage industries. Further, the Company is doubling down on R&D to drive color and flavor innovation and recipe optimization, which will enable to deliver best quality at optimum cost.

In nutshell, the Company is transforming its business model to become a comprehensive, one-stop solution for its customers, taking them on a journey from bean to bar.

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 Statements for details pertaining to changes during the year in Other Equity.

MATERIAL EVENTS DURING THE YEAR UNDER REVIEW AND UPDATES THEREON

Pursuant to the composite scheme of arrangement among Reliance Retail Limited, Reliance Retail Ventures Limited (RRVL), Reliance Consumer Products Limited (Old RCPL) and Reliance Consumer Products Limited (formerly known as Tira Beauty Limited) (New RCPL) and their respective shareholders and creditors under section 230-232 of the Companies Act, 2013 (Scheme), sanctioned by Honble National Company Law Tribunal, Mumbai Bench, vide order dated November 06, 2025, the entire 65,49,065 equity shares, representing 51% of the total paid-up equity share capital of the Company, held by Old RCPL, stood transferred to / vested in New RCPL effective December 1, 2025 and consequently, New RCPL became the promoter and holding company of the Company. Further, in terms of the Scheme, Old RCPL stood dissolved and amalgamated with RRVL upon effectiveness of the Scheme i.e. December 01, 2025.

DETAILS OF MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE

END OF THE FINANCIAL YEAR AND DATE OF REPORT

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year to which the financial statements relates and 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, 2026 is Rs.63,63,42,490/- comprising of:

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

Rs. 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 Rs. 10/- each.

CHANGE IN REGISTERED OFFICE OF THE COMPANY

The Board has approved shifting of registered office of the Company from 8-2-596, 1st Floor, 1B, Sumedha Estates, Avenue-4,

Puzzolana Towers, Street No. 1, Road No. 10, Banjara Hills, Hyderabad 500034, Telangana to Pranava One, 6th Floor, 6-5-654, Punjagutta Road, Raj Bhavan Quarters Colony, Somajiguda, Hyderabad, Nampally, Telangana – 500082 with effect from April 21, 2026.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis 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, which forms part of this Annual Report.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANY

The Company did not have any subsidiary or 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, 2026, 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, 2026 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 the Secretarial Auditors confirming compliance with the conditions of Corporate Governance is attached to the Corporate Governance Report.

Disclosure pursuant to para (IV) of third proviso to Section II, Part II of Schedule V to the Act relating to remuneration of Mr. Natarajan M. Venkataraman is covered in the Corporate Governance Report. For details, please refer to the Corporate Governance Report forming part of this Annual 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 arms length basis and do not have potential conflict with interest of the Company at large.

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 and on dealing with Related Party Transactions, as approved by the Board, is available on the Companys website and can be accessed at https://www.lotuschocolate.com/documents/files/Policy-on-Materiality-of-RPT.pdf. There were no materially significant related party transactions which could have potential conflict with the interests of the Company at large.

Members may refer to Note No. 33 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 CSR policy formulated by the CSR Committee and approved by the Board is available on the Companys website and can be accessed at https://www.lotuschocolate.com/documents/files/CSR-Policy.pdf

During the year under review, the Company has spent Rs. 0.128 Crore (i.e., 2% of the average net profits of the immediately preceding three financial years) towards identified and approved CSR initiatives covered under Schedule VII to the Act, through the implementing agency.

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 Company has an elaborate Risk Management Framework, which is designed to enable risks to be identified, assessed and mitigated appropriately. The 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 Statement.

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 Companys 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. Abhijeet Pai (DIN: 02100465) and Mr. Aditya Pai (DIN: 07538946), Directors of the Company, are liable to retire by rotation at the ensuing Annual General Meeting. The Board of Directors of the Company, based on the recommendation of Nomination and Remuneration Committee ("NRC"), have recommended their re-appointment.

Ms. Renuka Shastry (DIN: 02578917) and Mr. Krishnakumar Thirumalai (DIN: 00079047) resigned from the Board on July 10, 2025 and February 27, 2026, respectively.

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 Mr. Natarajan M. Venkataraman

(DIN: 05324934) as an Additional Director and Whole-time Director for a term of 5 (five) years w.e.f. July 16, 2025. Further, the shareholders had approved the said appointment through Special Resolution passed at the Annual General Meeting of the Company held on September 30, 2025.

The Board of Directors, based on the recommendation of the NRC, approved the appointment of Mr. Mohammed Rafathullah (DIN: 06744446) as Additional Director, designated as Non-Executive Director of the Company w.e.f. February 27, 2026, subject to approval of members.

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 Companys operations. The Policy is available on the Companys website and can be accessed at https://www.lotuschocolate.com/documents/files/Policy-for-Selection-of-Directors.pdf.

The Remuneration Policy for Directors, Key Managerial Personnel and other employees sets out the guiding principles for the NRC for recommending to the Board, the remuneration of the Directors, Key Managerial Personnel and other employees of the Company. The remuneration policy is in consonance with existing industry practice. The Policy is available on the Companys website and can be accessed at https://www.lotuschocolate.com/documents/files/Remuneration-Policy-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 Non-executive Directors and Executive 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 (five) consecutive years, at the 34th 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 statement referred in the Auditors Report are self-explanatory and do not call for any further comments.

Secretarial Auditors

KSR & Co., Company Secretaries LLP (Firm Registration No. P2008TN006400), were appointed as the Secretarial Auditors of the Company for a term of 5 consecutive years, at the 36th Annual General Meeting held on September 30, 2025. They have confirmed their eligibility and qualification required under the Act and the Listing Regulations for holding office, as the Secretarial Auditors of the Company.

The Secretarial Audit Report for the financial year ended March 31, 2026 is annexed and marked asAnnexure- II to this Report. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

DISCLOSURES Meetings of the Board

Four Meetings of the Board of Directors were held during the 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 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 Annual Report.

VIGIL MECHANISM AND WHISTLE BLOWER POLICY

The Company has established a robust Vigil Mechanism and Whistle Blower Policy ("Policy"), in accordance with provisions of the Act and the Listing Regulations 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 Companys website and can be accessed at https://www.lotuschocolate.com/documents/files/Vigil-Mechanism-and-Whistle-Blower-Policy.pdf.

PREVENTION OF SEXUAL HARASSMENT 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 complaints arising under the POSH Act. Training / awareness programs are conducted throughout the year to create sensitivity towards ensuring respectable workplace.

Details of complaints received, if any, during the year under the POSH Act, are provided in the Corporate Governance Report, which forms part of this Annual Report.

THE CODE ON SOCIAL SECURITY, 2020- MATERNITY BENEFIT

The Company is in compliance with the applicable provisions relating to maternity benefits as prescribed under the Maternity Benefit Act, 1961 / the Code on Social Security, 2020.

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.

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, 2026 is available on the Companys website and can be accessed at https://lotuschocolate.com/uploads/investor/1788165172_MGT_-_7_With_all_annexures.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 and the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules forms part of this Report.

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 investors@lotuschocolate.com.

POLICIES

The Company has reviewed / amended following policies during the year under review:

1. Corporate Social Responsibility Policy

2. Vigil Mechanism and Whistle Blower Policy

3. Policy for determining Material Subsidiaries

4. Policy on Materiality of and on dealing with Related Party Transactions

5. Code to Regulate, Monitor and Report Trading in Securities of the Company

6. Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information

7. Code of Conduct

8. Policy on determination and disclosure of materiality of events and information and web archival policy

9. Remuneration Policy for Directors, Key Managerial Personnel and Other Employees 10. Policy for selection of Directors and determining directors independence.

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 and ESOS) 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 Companys 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 subsidiary or 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. Further, details in terms of Section 197(14) of the Act is 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) statement of deviation or variation in connection with preferential issue was not applicable to the Company; o) the Company has not failed to implement any corporate action; p) there is no proceeding pending under the Insolvency and Bankruptcy Code, 2016; and q) 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 would also like to express its 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: Chicago, USA

Date: April 15, 2026