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Lotus Chocolate Company Ltd.

BSE: 523475 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE026D01011
BSE 00:00 | 27 May 153.20 0
(0.00%)
OPEN

156.30

HIGH

159.40

LOW

148.00

NSE 05:30 | 01 Jan Lotus Chocolate Company Ltd
OPEN 156.30
PREVIOUS CLOSE 153.20
VOLUME 5024
52-Week high 198.45
52-Week low 24.10
P/E 32.74
Mkt Cap.(Rs cr) 197
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 156.30
CLOSE 153.20
VOLUME 5024
52-Week high 198.45
52-Week low 24.10
P/E 32.74
Mkt Cap.(Rs cr) 197
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Lotus Chocolate Company Ltd. (LOTUSCHOCOLATE) - Director Report

Company director report

Dear Member(s)

Your Directors have pleasure in presenting the 32nd Annual Report of yourCompany and the Audited Financial statements for the Financial Year ended on 31stMarch 2021 together with Auditors' Report thereon.

FINANCIAL RESULTS:

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

Particulars Year ended on 31.03.2021 Year ended on 31.03.2020

(In Rupees)

(In Rupees)

Revenue from Operations 478707097 698880365
Other Income 585594 483993
Less:Expenses 462998195 691692243
Profit/(Loss) before Taxation 16294497 7672115
Less: Tax Expense
Current Tax
(920754) (1129177)
Deferred Tax
Profit/Loss after Tax 17215251 8801292
Other comprehensive Income - 478918
Gain/loss on Foreign Exchange 493141 478918
Balance Profit/(Loss) C/F to the Next Year 17708392 9280210

During the year under review your company has achieved the total turnover ofRs.478707097/- as compared to Turnover of Rs. 698880365/- during the last financialyear i.e. around 31% decrease in turnover as against last Financial Year registering atotal profit of Rs.17708392/- as compared to the profit amounting to Rs. 9280210/- inprevious year.

TRANSFER TO RESERVES:

The profit registered in the Financial Year 2020-21 amounting to Rs.17708392/- hasbeen transferred to General Reserve.

FIXED DEPOSITS:

The Company has not accepted or invited any Deposits and consequently no deposit hasmatured / become due for re-payment as on 31st March 2021.

DIRECTORS:

Retirement by Rotation

In accordance with the provisions of the Companies Act 2013 Smt Usha Abbagani (DIN:09056155) retires by rotation and being eligible offers herself for re-appointment.

Appointment/Re-appointment/Resignation

Pursuant to the provisions of Section 149 152 161 of the Companies Act 2013 alongwiththe rules made thereunder read with Regulation 25 of SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 Smt Usha Abbagani (DIN: 09056155) and ShriGangasani Sudhakar Reddy (DIN: 07261620) have been appointed as Non Executive Director NonIndependent Director with effect from 12th February 2021 and 22ndFebruary 2021 respectively.

During the year under review Shri Prakash Pai Peraje (DIN: 00202327) Shri Anantha PaiPeraje (DIN: 00048339) and Smt Jhabakh Ashwini Pai (DIN: 02395485) Non Executive PromoterDirectors ceased to be Directors of the Company due to their other pre-occupation witheffect from 12.02.2021. Shri Admala Surya Prakash Reddy

(DIN: 07567290) Independent Director of the Company also ceased to be the Director ofthe Company due to his other pre-occupation with effect from 22nd February2021.

KEY MANAGERIAL PERSONNELS (KMPs)

During the year under review Shri Dilip Mangesh Kalelkar (DIN: 02545803) ExecutiveDirector ceased to be Directors of the Company due to other preoccupation with effect from12.02.2021.

Pursuant to the provisions of Section 203 of the Companies Act 2013 the KMP's of theCompany as on date are:

1. Mr. Ram Subramanya Ganpath Whole time Director

2. Mr. Vivekanand Narayan Prabhu Chief Financial Officer

3. Mr. Subodhakanta Sahoo Company Secretary

BOARD EVALUATION

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

DIVIDEND:

The Board of Directors of your company have not recommended any dividend for thefinancial year 2020-21.

COVID-19 IMPACT ASSESSMENT:

The COVID-19 pandemic induced lockdown has created a vital adverse impact on differentsectors in India and several other countries. COVID-19 has made people more aware of theneed to adopt a healthy diet. During the lockdown period there was no cessation ofoperations and revenue did not see a down-trend during the lockdown period up to therecord date and subsequently too.

The business and operations functions have drawn up a plan to ensure continuity ofbusiness without dilution of controls and remained 100% up in connectivity to theunderlying systems to operate.

The management has at the time of approving the financial statements assessed thepotential impact of the Covid-19 on the Company. Barring any future Covid-19 relatedescalations based on the current assessment the management is of the view that impact ofCovid-19 on the operations of the Company and the carrying value of its assets andliabilities is not likely to be material.

SECRETARIAL STANDARDS:

The Directors and senior management state that applicable Secretarial Standards i.e.SS-1 and SS-2 relating to ‘Meetings of the Board of Directors' and ‘GeneralMeetings' respectively have been duly complied by the Company.

REMUNERATION POLICY

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

MEETINGS

During the financial year 7 (Seven) Board Meetings and 4 (Four) Audit CommitteeMeetings were convened and held. The details of which are given in the CorporateGovernance Report. The intervening gap between the meetings was within the period of 120days as prescribed under the Companies Act 2013 and SEBI (LODR) Regulations 2015.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

SHARE CAPITAL

The paid-up Equity Share Capital of the Company stood at Rs.128410490 Croreconsisting of 12841049 Equity Shares of Rs.10/- each as at March 31 2021.

On 19th July 2019 Hon'ble National Company Law Tribunal (NCLT) Hyderabad Benchapproved the Petition filed by the company and passed the order to issue and allot fresh7396600-10% Redeemable Cumulative Preference Shares of Rs. 10/- each for a redemptionperiod of 10 Years in lieu of old 10% Redeemable Cumulative Preference Shares due forredemption on 10.08.2018 on the same term as per earlier issue.

RELATED PARTY TRANSACTIONS

During the year under review your Company has entered into transactions with relatedparties the details of said transactions are provided in Notes to the Audited Accountsfor the year 2020-21 as appended to this report. All transactions entered with RelatedParties for the year under review were on arm's length basis and in the ordinary course ofbusiness. There are no such transactions made by the Company with Promoters DirectorsKey Managerial Personnel or other designated persons which may have a potential conflictwith the interest of the Company at large. All Related Party Transactions are placedbefore the Audit Committee and also the Board for approval where ever required. Prioromnibus approval of the Audit Committee is obtained for the transactions which are of aforeseeable and repetitive nature. A statement giving details of all related partytransactions entered into pursuant to the omnibus approval so granted are placed beforethe Audit Committee and the Board of Directors on a quarterly basis. The Company hasdeveloped a Policy on Related Party Transactions for the purpose of identification andmonitoring of such transactions. The policy on Related Party Transactions as approved bythe Board is uploaded on the Company's website.

The particulars of contracts and arrangements with related parties for the year2020-21 in Form AOC-2 is annexed 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 thatwould impact the going concern status of the Company and its future operations.

STATUTORY AUDITORS

M/s. VDNR & Associates Statutory Auditors of the Company was appointed in 28thAnnual General meeting of the Company for a period of Five years i.e. from the conclusionof 28th Annual General Meeting till the conclusion of 32nd Annual GeneralMeeting to be held in the financial year ended 2021-2022. In accordance with section 40 ofthe Companies Amendment Act 2017 which omits the requirement of rati_cation ofAppointment of Statutory Auditors in every subsequent Annual General Meeting asstipulated under section 139 of the Companies Act 2013. Therefore M/s. VDNR &Associates Chartered Accountants (Firm Regn No: 011251S) will continue to be theStatutory Auditors of the Company.

SECRETARIAL AUDITOR

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 hasappointed Mrs. Rakhi Agarwal Company Secretary in Whole Time Practice to undertake theSecretarial Audit of the Company for the Financial Year 2020-21. The Secretarial AuditReport in form MR-3 is annexed to this report as "Annexure-II".

The Secretarial Audit Report does not contain any qualifications reservation oradverse remarks.

INTERNAL AUDITORS

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

ISO 9001:22000 CERTIFICATION

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

FSSC CERTIFICATION

Your company's manufacturing factory located at Nastipur Village Hathnoora MandalSangareddy District has been certified to the version of FSSC 22000:2010 (Food SafetyStandard Certification by TUV NORD). This Certification indicates our commitment in asustainable manner in meeting global quality environment health and safety standards.This is a milestone in our quest for quality.

HALAL CERTIFICATION: HIW22490213

During the year under review your company is certified as Halal Certified Companyafter meeting with all the audits and/or Standards as required under the HalalCertification process and Shariah (Islamic) Board Guidelines it indicates that theManufacturing process of the products of our company contains permitted ingredientstherefore is lawful for Muslim consumption as well.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

CORPORATE GOVERNANCE:

The Company has implemented the procedures and adopted practices in conformity with theCode of Corporate Governance enunciated in Regulation 27(2) of the SEBI ListingRegulations 2015 with the Stock Exchanges.

A separate report on Corporate Governance practices followed by the Company togetherwith a Certificate from the Auditors confirming compliances forms an integral part of thisReport.

EXTRACT OF ANNUAL RETURN

The Extract of Annual Return as per the provisions of Section 92 of the Companies Act2013 and Rule 12 of Companies (Management and Administration) Rules 2014 in Form MGT-9 isenclosed as Annexure - V to this Report.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. To maintain its objectivity and independence the InternalAudit function reports to the Chairman of the Audit Committee of the Board. The InternalAudit Department monitors and evaluates the efficacy and adequacy of internal controlsystem in the Company its compliance with operating systems accounting procedures andpolicies at all locations of the Company and its subsidiaries. Based on the report ofinternal audit function process owners undertake corrective action in their respectiveareas and thereby strengthen the controls. Significant audit observations and correctiveactions thereon are presented to the Audit Committee of the Board.

The Board of your company has laid down internal financial controls to be followed bythe company and that such internal financial controls are adequate and operatingeffectively. Your company has adopted policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.

RISK MANAGEMENT

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

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy establishing vigil mechanism toprovide a formal mechanism to the Directors and employees to report concerns aboutunethical behaviour actual or suspected fraud or violation of Code of Conduct and Ethics.It also provides for adequate safeguards against the victimization of employees who availof the mechanism and provides direct access to the Chairperson of the Audit Committee inexceptional cases. It is afirmed that no personnel of the Company has been denied accessto the Audit Committee. The policy of vigil mechanism is available on the Company'swebsite. The Whistle Blower Policy aims for conducting the affairs in a fair andtransparent manner by adopting highest standards of professionalism honesty integrityand ethical behaviour.

HUMAN RESOURCES

Many initiatives have been taken to support business through organizational efficiencyprocess change support and various employee engagement programmes which has helped theOrganization achieve higher productivity levels. A significant effort has also beenundertaken to develop leadership as well as technical/ functional capabilities in order tomeet future talent requirement.

PARTICULARS IN RESPECT OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO

The information on Conservation of Energy Technology Absorption Foreign ExchangeEarnings and outgo required to be disclosed under Section 134(3)(m) of the Companies Act2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are provided in theAnnexure- III forming part of this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013: a) That in the preparation of the accountsfor the financial year ended 31st March 2021 the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures if any; b) That the Directors have selected such accounting policies andapplied them consistently and made judgments and estimates that were reasonable andprudent so as to give a true and fair view of the State of Affairs of the Companyat the end of the Financial Year and of the Profit of the Company for the year underreview; c) That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; d) That the Directors have prepared the accounts for the financialyear ended 31st March 2021 on a ‘going concern' basis; e) That properinternal financial controls were in place and that the financial controls were adequateand were operating effectively; and f) That devised proper systems to ensure compliancewith the provisions of all applicable laws in place and were adequate and operatingeffectively.

DISCLOSURES AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and the rules framed there under.

During the Financial Year 2020-21 the Company received no complaints on sexualharassment.

CERTIFICATE BY PRACTICING COMPANY SECRETARY

The Company has received certificate from Mrs. Rakhi Agarwal Practising CompanySecretaries confirming that none of the Directors of the Company have been debarred ordisqualified from being appointed or continuing as director of companies by theSEBI/Ministry of Corporate of Affairs or any such authority. The said Certificate isannexed to this report.

DECLARATION AS REQUIRED UNDER REGULATION 34(3) AND SCHEDULE V OF THE LISTINGREGULATIONS

All Directors and senior management personnel of the Company have afirmed compliancewith Company's Code of Business Conduct for the financial year ended 31st March 2021.

COMPLIANCE WITH MANDATORY REQUIREMENTS

Your Company has complied with all the mandatory corporate governance requirementsunder the Listing Regulations 2015 and the applicable amendments thereof. Your Companyconfirms compliance with corporate governance requirements specified in Regulation 17 to27 and clauses (b) to (i) of Sub-Regulation (2) of Regulation 46 of the ListingRegulations 2015.

PARTICULARS OF EMPLOYEES

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

PARTICULARS OF REMUNERATION

Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197(12) of Companies Act 2013 and Rule 5 (1) Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided as follows: (i) The ratio ofthe remuneration of each director to the median remuneration of the employees of thecompany for the financial year; celling

Name of the Director Ratio to Median Remuneration
Shri Subramanya Ram Ganapath (WTD) 2.19:1

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

Name of Person % increase in remuneration
Shri Subramanya Ram Ganpath (WTD) NIL
Shri Subodhakanta Sahoo(CS) NIL
Shri Vivekanand Narayan Prabhu(CFO) NIL

(iii) The percentage increase in the median remuneration of employees in the financialyear is NIL.

(iv) The number of permanent employees on the rolls of company is 59.

(v) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration;

There were no average increase in salaries of employees.

Percentage increase in the managerial remuneration for the year is - Nil (vi)Afirmation that the remuneration is as per the remuneration policy of the company - Yes.

CAUTIONARY STATEMENT

Statements in the Board's Report and the Management Discussion & Analysisdescribing the Company's objectives expectations or forecasts may be forward-lookingwithin the meaning of applicable securities laws and regulations. Actual results maydiffer materially from those expressed in the statement. Important factors that couldinfluence the Company's operations include global and domestic demand and supplyconditions affecting selling prices of finished goods input availability and priceschanges in government regulations tax laws economic developments within the country andother factors such as litigation and industrial relations.

ACKNOWLEDGEMENTS:

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

By Order of the Board

For LOTUS CHOCOLATE COMPANY LIMITED

Sd/- Sd/-
Gangasani Sudhakar Reddy Ram Subramanya Ganpath
Additional Director Whole Time Director
DIN: 07261620 DIN: 02395478
Place: Hyderabad
Date: 25.08.2021

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