Short answers, pulled from the story.
The Lytton Report found that Japanese military operations following the Mukden Incident could not be regarded as legitimate self-defence. It also concluded that the puppet state of Manchukuo could not have been formed without the presence of Japanese troops, had no genuine local support, and was not the result of a real independence movement.
The Lytton Commission announced its conclusions in October 1932, with the official announcement made on the 2nd of October 1932. The commission had been appointed by the League of Nations in 1931 following the Mukden Incident.
The five-member commission was chaired by the Earl of Lytton of Britain. The other members were Major-General Frank Ross McCoy from the United States, Dr. Heinrich Schnee from Germany, Count Luigi Aldrovandi Marescotti from Italy, and General Henri Claudel from France.
Japan gave formal notice of withdrawal from the League of Nations on the 27th of March 1933, after the League's General Assembly adopted the Lytton Report, which recognized Chinese sovereignty over Manchuria and refused to recognize Japan's puppet state of Manchukuo. The Japanese delegation, led by ambassador Yosuke Matsuoka, walked out when the findings were presented.
The great powers of the League of Nations never invoked Article 16 of the League Covenant, which would have designated Japan as an aggressor and allowed economic sanctions. Amid the Great Depression, those powers were unwilling to further damage their economies by sanctioning another major power, and the policy applied was largely appeasement.
The recommendations of the Lytton Report went into effect after Japan surrendered in World War II in 1945, more than a decade after the report was issued.