Click it and Unblock the Notifications
Directors Report of Varun Beverages Ltd.
Dec 31, 2024
Your Directors have pleasure in presenting the 30th (Thirtieth) Annual Report on the business and operations of your
Company along with the Audited Financial Statements for the Financial Year ended December 31, 2024.
Financial Performance
The financial performance of your Company for the Financial Year ended December 31, 2024 is summarized below:
|
Particulars |
Standalone |
Consolidated |
||
|
Financial |
Financial |
Financial |
Financial |
|
|
Total Revenue |
147,025.35 |
127,789.68 |
206,025.96 |
164,004.22 |
|
Total Expenses |
116,325.96 |
104,108.05 |
171,680.29 |
136,605.83 |
|
Profit before tax after |
30,699.39 |
23,681.63 |
34,330.89 |
27,393.60 |
|
Less: Tax Expenses |
7,495.75 |
5,930.37 |
7,988.04 |
6,375.47 |
|
Profit after tax |
23,203.64 |
17,751.26 |
25,946.33* |
20,559.22* |
|
Balance brought forward |
64,261.97 |
25,101.68 |
62,868.91 |
27,398.84 |
|
Balance carried over to |
60,721.86 |
40,558.71 |
68,582.05 |
45,663.50 |
|
General Reserve |
444.26 |
444.26 |
444.26 |
444.26 |
|
Other Reserves |
97,657.91 |
23,259.02 |
90,308.95 |
16,761.15 |
|
Reserves & Surplus carried |
158,824.03 |
64,261.97 |
159,335.27 |
62,868.91 |
*After adjustment on account of non-controlling interest.
Consolidated Financial Statements
The Consolidated Financial Statements of your Company
for the Financial Year 2024 are prepared in compliance
with the applicable provisions of the Companies Act,
2013 (''the Act''), Indian Accounting Standards (''Ind AS'')
and the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations,
2015 [''SEBI (LODR) Regulations''] which shall also be
provided to the Members in their forthcoming Annual
General Meeting (''AGM'').
State of the Companyâs Affairs
Your Company has presence in 26 States and 6 Union
Territories in India as well as in 9 other countries
through franchise rights (viz. Nepal, Sri Lanka, Morocco,
Zambia, Zimbabwe, Democratic Republic of Congo,
South Africa, Lesotho & Eswatini). Additionally, the
Company holds distribution rights in 4 countries (viz.
Namibia, Botswana, Mozambique and Madagascar).
As of December 31, 2024, the Company has 48 state-
of-the-art manufacturing facilities (36 in India and 12 in
International Geographies) with more than 2,600 owned
vehicles, more than 2,800 primary distributors and more
than 130 depots. The Company continues to create long¬
term value through different facets of its business and
improve its presence, product mix and utilisation levels.
With an increasing penetration on the back of a robust
distribution network and diversifying product portfolio,
the Company has created a sustainable operating
efficiency at its manufacturing facilities.
Key Developments
On March 26, 2024, your Company consummated the
acquisition of The Beverage Company Proprietary Limited,
South Africa along-with its wholly-owned subsidiaries
(''BevCo''). Accordingly, Bevco became the subsidiary of
the Company. This acquisition allowed the Company to
consolidate its presence in franchised territories in South
Africa, Lesotho, and Eswatini, as well as territories with
distribution rights in Namibia, Botswana, Mozambique,
and Madagascar.
On November 13, 2024, your Company entered into share
purchase agreements with Tanzania Bottling Company
SA and Ghana Bottling Company Limited to acquire 100%
share capital of SBC Tanzania Limited and SBC Beverages
Ghana Limited respectively, subject to regulatory and
other approvals, including but not limited to PepsiCo Inc.
Varun Beverages Morocco SA (a wholly owned subsidiary
of the Company) entered into an Exclusive Snacks
Appointment Agreement to manufacture and package
Cheetos in the territory of Morocco. This appointment
is in addition to the existing distribution agreement for
PepsiCo''s snacks portfolio consisting of Lays, Cheetos,
Doritos in the territory of Morocco.
Varun Foods (Zimbabwe) (Private) Limited and Varun
Beverages (Zambia) Limited (subsidiaries of the
Company) entered into an Exclusive Snacks Franchising
Appointment with Premier Nutrition Trading LLC, Dubai
(subsidiary of PepsiCo Inc.) to manufacture, distribute,
and sell ''Simba Munchiez'' in the territory of Zimbabwe
& Zambia.
Deposits
Your Company has not accepted any deposits during the
year under review falling within the ambit of Section 73
of the Act and the Companies (Acceptance of Deposits)
Rules, 2014.
Transfer to General Reserve
Your Company has not transferred any amount to General
Reserve for the Financial Year 2024.
Change in the Nature of Business, if any
During the year under review, there was no change in the
nature of business of the Company.
Dividend Distribution Policy
The Board of Directors of the Company in their meeting
held on August 9, 2017 approved and adopted a Policy on
Distribution of Dividend to comply with Regulation 43A
of SEBI (LODR) Regulations and the same is uploaded on
website of the Company at https://www.varunbeverages.
com/wp-content/uploads/2023/03/10-Dividend-
Distribution-Policy.pdf
Dividend
During the year under review, the Board of Directors in
their meeting held on July 30, 2024 declared an interim
dividend of '' 1.25 per Equity Share (face value of '' 5/-
per Equity Share) to the eligible equity shareholders of
the Company. Further, the Board of Directors have also
recommended a final dividend of '' 0.50 per Equity Share
(face value of '' 2/- per Equity Share) for the Financial
Year 2024. Total cash outflow for dividend payout would
be 3,315.06 million for the Financial Year 2024.
Your Company has transferred the unpaid/unclaimed
dividend (interim and final) to the Unclaimed Dividend
Accounts of the respective financial years and the details
of the same are uploaded on website of the Company at
https://varunbeverages.com/corporate-governance/
Investor Education and Protection Fund
Pursuant to the provisions of Section 124 of the Act,
Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016
(''IEPF Rules'') read with relevant circulars and amendments
thereto, amount of dividend which remains unpaid/
unclaimed for a period of seven years from the date of
transfer to the Company''s unpaid dividend account and
corresponding shares on which the dividend remains
unclaimed for seven consecutive years or more are required
to be transferred to the Investor Education and Protection
Fund (''IEPF'') constituted by the Central Government.
Accordingly, your Company had transferred '' 45,375/- to
IEPF (being unpaid/unclaimed interim dividend amount
for FY 2017) and also transferred 299 equity shares
(on which interim dividend for FY 2017 remained unpaid/
unclaimed for seven consecutive years) to the designated
demat account of IEPF Authority and the same can be
claimed from IEPF Authority only after complying with
prescribed procedure under IEPF Rules.
Acquisition Guidelines
Your Company applies stringent strategic and financial
criteria to any potential acquisition or partnership and
to enhance transparency, the Board of Directors of
the Company have approved and adopted Acquisition
Guidelines for Company''s M&A activities for viable
acquisitions and the same is uploaded on website of the
Company at https://varunbeverages.com/wp-content/
uploads/2023/03/9-VBL-Guidelines-for-Acquisition-in-
India.pdf
Sub-Division/Split of Equity Shares
During the year under review, pursuant to the approval
of Members through Postal Ballot on August 30, 2024,
the Issued, Subscribed and Paid-up Equity Share Capital
existing on the Record Date (i.e. September 12, 2024) was
sub-divided/split such that each Equity Share having face
value of '' 5/- each fully paid-up, was sub-divided/split
into such number of Equity Shares having face value of
'' 2/- each fully paid-up.
Qualified Institutions Placement (QIP)
During the year under review, in compliance with the
provisions of SEBI (Issue of Capital and Disclosure
Requirements) Regulations, 2018, SEBI (LODR)
Regulations and Sections 42 & 62 of the Act and Rules
made thereunder, your Company has issued and allotted
132,743,362 Equity Shares of face value of '' 2/- each to
the eligible Qualified Institutional Buyers at an issue price
of '' 565/- per Equity Share i.e. at a premium of '' 563/- per
Equity Share aggregating to '' 7,500 crore. Brief summary
of utilization of funds are as follows:
|
S. No. |
Particulars |
Amount as |
Amount Utilized |
|
1. |
Repayment/ Prepayment, in part or in full of certain outstanding |
5,600.00 |
5,047.55 |
|
2. |
For general corporate purposes and inorganic acquisitions |
1,839.00 |
385.85 |
|
3. |
QIP Issue Expense |
61.00 |
61.11* |
|
Total |
7,500.00 |
5,494.50 |
*incremental amount utilized through general corporate purposes allocated funds.
Share Capital
Pursuant to the approval of Members through Postal
Ballot on August 30, 2024, the Authorized Share
Capital of the Company stood sub-divided/ split from
'' 10,000,000,000/- (Rupees Ten Billion only) divided into
2,000,000,000 (Two Billion) Equity Shares of face value
of '' 5/- (Rupees Five only) each to '' 10,000,000,000/-
(Rupees Ten Billion only) divided into 5,000,000,000
(Five Billion) Equity Shares of face value of '' 2/- (Rupees
Two only) each.
During the year under review, the Issued, Subscribed
and Paid-up Equity Share Capital of your Company was
increased/changed from '' 6,496,074,880/- (Rupees Six
Billion Four Hundred Ninety Six Million Seventy Four
Thousand and Eight Hundred Eighty only) divided into
1,299,214,976 (One Billion Two Hundred Ninety Nine
Million Two Hundred Fourteen Thousand and Nine
Hundred Seventy Six) Equity Shares of face value of
'' 5/- (Rupees Five only) each to '' 6,763,020,034/-
(Rupees Six Billion Seven Hundred Sixty Three Million
Twenty Thousand and Thirty Four only) divided into
3,381,510,017 (Three Billion Three Hundred Eighty One
Million Five Hundred Ten Thousand and Seventeen)
Equity Shares of face value of '' 2/- (Rupees Two only)
each due to (i) sub-division/split of Equity Shares of
the Company such that each Equity Share having face
value of '' 5/- each fully paid-up, was sub-divided/split
into such number of Equity Shares having face value of
'' 2/- each fully paid-up; (ii) allotment of 729,215 (Seven
Hundred Twenty Nine Thousand and Two Hundred
Fifteen) Equity Shares of the Company in aggregate
upon exercise of stock options vested under Employees
Stock Option Scheme 2016; (iii) allotment of 132,743,362
(One Hundred Thirty Two Million Seven Hundred Forty
Three Thousand and Three Hundred Sixty Two) Equity
Shares of face value of '' 2/- each pursuant to Qualified
Institutions Placement.
Employees Stock Option Scheme
Your Company has Employees Stock Option Scheme 2016
(''ESOP Scheme 2016'') i.e. in compliance with SEBI (Share
Based Employee Benefits and Sweat Equity) Regulations,
2021, as amended from time to time (''SEBI ESOP
Regulations'') and there has been no material change to
the ESOP Scheme 2016 during the year under review.
Consequent to sub-division/split of Equity Shares, all the
options granted under the ESOP Scheme 2016 have been
adjusted for sub-divided/split shares.
Certificate from Secretarial Auditors of the Company that
ESOP Scheme 2016 has been implemented in accordance
with the SEBI ESOP Regulations and the resolution(s)
passed by the Members of the Company will be uploaded
on website viz. https://varunbeverages.com/agm/ for
inspection by Members of the Company.
The statutory disclosures as mandated under the Act and
SEBI ESOP Regulations are available on website of the
Company at https://varunbeverages.com/agm/
Credit Rating
During the year under review, your Company''s credit
ratings by CRISIL is as below:
|
Long Term Rating |
CRISIL AA /Stable (Re-affirmed) |
|
Short Term Rating |
CRISIL A1 (Re-affirmed) |
Related Party Transactions
To comply with the provisions of Sections 177 and 188 of
the Act and Rules made thereunder read with Regulation
23 of SEBI (LODR) Regulations, your Company took
necessary prior (including omnibus) approval of the
Audit, Risk Management and Ethics Committee before
entering into related party transactions. All contracts/
arrangements/transactions entered into by the
Company during the Financial Year 2024 with related
parties, as defined under the Act and SEBI (LODR)
Regulations, were in the ordinary course of business and
on arm''s length basis.
During the year under review, your Company and/
or its subsidiaries have not entered into any contract/
arrangement/transaction with related parties which could
be considered material in accordance with the Policy of
the Company on Related Party Transactions.
None of the transactions with any of the related parties
were in conflict with the interest of the Company rather,
these were synchronized and synergized with the
Company''s operations. Attention of Members is drawn to
the disclosure of transactions with the related parties set
out in Note No. 43 of the Standalone Financial Statements
forming part of the Annual Report.
Your Company has framed a Policy on Related Party
Transactions in accordance with the Act and SEBI
(LODR) Regulations. The Policy intends to ensure that
proper reporting, approval and disclosure processes are
in place for all transactions between the Company and its
related parties. The policy is uploaded on website of the
Company at https://www.varunbeverages.com/policies/
policy-on-related-party-transactions.pdf
Since all transactions which were entered into during the
Financial Year 2024 were on arm''s length basis and in the
ordinary course of business and there was no material
related party transaction entered by the Company
during the Financial Year 2024 as per Policy on Related
Party Transactions, hence no detail is required to be
provided in Form AOC-2 prescribed under Clause (h) of
Sub-section (3) of Section 134 of the Act and Rule 8(2) of
the Companies (Accounts) Rules, 2014.
Particulars of Loans, Guarantees or Investments
Details of Loans, Guarantees or Investments covered
under the provisions of Section 186 of the Act are given in
the Notes to the Standalone Financial Statements.
Subsidiaries, Associates and Joint Ventures
Your Company has following Subsidiaries, Associates and
Joint Venture:
Subsidiaries
⢠Varun Beverages (Nepal) Private Limited;
⢠Varun Beverages Lanka (Private) Limited;
- Ole Springs Bottlers (Private) Limited
(step-down subsidiary);
⢠Varun Beverages Morocco SA;
⢠Varun Beverages (Zambia) Limited;
⢠Varun Beverages (Zimbabwe) (Private) Limited;
⢠Varun Beverages RDC SAS;
⢠Varun Beverages International DMCC;
⢠Varun Beverages South Africa (Pty) Ltd;
⢠VBL Mozambique, SA;
⢠The Beverage Company Proprietary Limited,
South Africa (w.e.f. 26.03.2024);
- The Beverage Company Bidco Proprietary Limited
(w.e.f. 26.03.2024) (step-down subsidiary);
- Little Green Beverages Proprietary Limited
(w.e.f. 26.03.2024) (step-down subsidiary);
- Softbev Proprietary Limited (w.e.f. 26.03.2024)
(step-down subsidiary);
⢠Varun Foods (Zimbabwe) (Private) Limited
(w.e.f. 22.05.2024); and
⢠Lunarmech Technologies Private Limited
(wholly owned subsidiary w.e.f. 16.12.2024).
Associates
⢠Clean Max Tav Private Limited; and
⢠Huoban Energy 7 Private Limited
Joint Venture
⢠IDVB Recycling Operations Private Limited
To comply with the provisions of Section 129 of the Act, a
separate statement containing salient features of Financial
Statements of Subsidiaries, Associates and Joint Venture
of your Company (including their performance and
financial position) in prescribed Form AOC-1 forms part
of Consolidated Financial Statements and therefore not
repeated here to avoid duplication. Further, contribution
of Subsidiaries, Associates and Joint Venture to the
overall performance of your Company is outlined in Note
No. 58 of the Consolidated Financial Statements.
Financial Statements of the aforesaid Subsidiaries,
Associates and Joint Venture companies are kept open
for inspection by the Members at the Registered Office
of your Company on all days except Saturday, Sunday
and Public Holiday up to the date of AGM i.e. April 3,
2025 between 11:00 a.m. to 5:00 p.m. as required under
Section 136 of the Act. Any Member desirous of obtaining
a copy of the said Financial Statements may write to the
Company at its Registered Office or Corporate Office.
The Financial Statements including the Consolidated
Financial Statements and all other documents required
to be attached with this Report have been uploaded on
website of the Company at https://varunbeverages.com/
annual-reports/
To comply with the provisions of Regulation 16(c)
of SEBI (LODR) Regulations, the Board of Directors
of the Company have approved and adopted a
Policy for determination of Material Subsidiary and
Governance of Subsidiaries and as on December 31,
2024, none of the subsidiary was a material subsidiary
of the Company in terms of the said Policy. Policy for
determination of Material Subsidiary and Governance of
Subsidiaries is uploaded on website of the Company at
https://www.varunbeverages.com/policies/policy-on-
material-subsidiary-VBL.pdf
Directors and Key Managerial Personnel
Directors
To comply with the provisions of Section 152 of the Act
and in terms of the Articles of Association of the Company,
Mr. Varun Jaipuria (DIN: 02465412) and Mr. Rajinder Jeet
Singh Bagga (DIN: 08440479), Whole-time Directors are
liable to retire by rotation at the ensuing AGM and being
eligible, seeks re-appointment. The Board of Directors, on
the recommendation of Nomination and Remuneration
Committee (''NRC''), recommended their re-appointment
for consideration by the Members at the ensuing AGM.
Further, the re-appointment of Mr. Varun Jaipuria and
Mr. Raj Gandhi (DIN: 00003649) w.e.f. November 1, 2024
and Mr. Rajinder Jeet Singh Bagga w.e.f. May 2, 2024 as
Whole-time Directors for a further period of upto 5 (Five)
years, liable to retire by rotation and the appointment of
Dr. Naresh Trehan (DIN: 00012148) w.e.f. April 21, 2024 as a
Non-Executive Non-Independent Director of the Company,
liable to retire by rotation were approved by Members of
your Company at 29th AGM held on April 3, 2024.
Company has received declarations from all the
Independent Directors of the Company confirming that
they meet the criteria of independence as prescribed both
under Section 149(6) of the Act and Regulation 16(1)(b) of
the SEBI (LODR) Regulations and are in compliance with
Rule 6 of the Companies (Appointment and Qualification
of Directors) Rules, 2014. Further, the Independent
Directors have also confirmed that they are not aware
of any circumstance or situation, which exists or may be
reasonably anticipated, that could impair or impact their
ability to discharge their duties as Independent Directors
of the Company.
The Board is of the opinion that the Independent
Directors of the Company possess requisite qualifications,
experience and expertise and they hold highest standards
of integrity (including the proficiency) and fulfils the
conditions specified in the Act read with Rules made
thereunder and SEBI (LODR) Regulations and are eligible
& independent of the management.
None of the Directors of the Company are disqualified as
per the provisions of Section 164 of the Act. The Directors
of the Company have made necessary disclosures under
Section 184 and other relevant provisions of the Act.
Brief resume and other details of the Directors being
appointed/re-appointed at the ensuing AGM as stipulated
under Secretarial Standard-2 issued by the Institute of
Company Secretaries of India and Regulation 36 of the
SEBI (LODR) Regulations, are separately disclosed in the
Notice of ensuing AGM.
Key Managerial Personnel
Mr. Rajesh Chawla was appointed as a Chief Financial
Officer and Key Managerial Personnel of the Company w.e.f.
May 14, 2024 in accordance with the provisions of Section
203 of the Act read with the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014,
in place of Mr. Lalit Malik, who resigned as Chief Financial
Officer and Key Managerial Personnel of your Company
w.e.f. May 13, 2024.
Further, Mr. Raj Gandhi, Whole-time Director and Mr. Ravi
Batra, Chief Risk Officer & Group Company Secretary,
continued to be the Key Managerial Personnel of your
Company in accordance with the provisions of Section
203 of the Act read with the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014.
Board Evaluation
To comply with the provisions of Section 134(3)(p) of
the Act and Rules made thereunder and Regulation
17(10) of SEBI (LODR) Regulations, the Board has carried
out the annual performance evaluation of the Directors
individually including the Independent Directors
(wherein the concerned Director being evaluated did not
participate), Board as a whole and following Committees
of the Board of Directors:
i) Audit, Risk Management and Ethics Committee;
ii) Nomination and Remuneration Committee;
iii) Stakeholders'' Relationship Committee; and
iv) Corporate Social Responsibility Committee.
The manner in which the annual performance evaluation
has been carried out is explained in the Corporate
Governance Report which forms part of this report.
Board is responsible to monitor and review the
evaluation framework.
Further, to comply with Regulation 25(4) of SEBI (LODR)
Regulations, Independent Directors also evaluated the
performance of Non-Independent Directors, Chairman
and Board as a whole at a separate meeting of
Independent Directors.
Board and Committees of the Board
The number of meetings of the Board and various
Committees of the Board including composition are set
out in the Corporate Governance Report which forms part
of this report. The intervening gap between the meetings
was within the period prescribed under the provisions of
Section 173 of the Act and SEBI (LODR) Regulations.
Remuneration Policy
To comply with the provisions of Section 178 of the Act
and Rules made thereunder and Regulation 19 of SEBI
(LODR) Regulations, the Company''s Remuneration Policy
for Directors, Key Managerial Personnel (KMP), Senior
Management and other Employees of the Company is
uploaded on website of the Company at https://www.
varunbeverages.com/wp-content/uploads/2023/03/12-
Remuneration-Policy.pdf. The Policy includes, inter-alia,
the criteria for determining qualifications, positive
attributes, independence of a Director, appointment and
remuneration of Directors, KMPs, Senior Management
Personnel and other employees of the Company.
Remuneration of Directors, Key Managerial
Personnel and Particulars of Employees
The statement of remuneration under Section 197 of the
Act read with Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014,
is attached to this report as Annexure - A.
Further, as per second proviso to Section 136(1) of the Act
read with Rule 5 of the aforesaid Rules, the Board''s Report
and Financial Statements are being sent to the Members
of the Company excluding the statement of particulars of
employees as required under Rule 5(2) of the aforesaid
Rules. Any member interested in obtaining a copy of the
said statement may write to the Compliance Officer at
complianceofficer@rjcorp.in up to the date of AGM. The
said statement is also available for inspection by the
Members at the Registered Office of your Company on
all days except Saturday, Sunday and Public Holiday up
to the date of AGM i.e. April 3, 2025 between 11:00 a.m.
to 5:00 p.m.
Statutory Auditors
The Shareholders of the Company in their 27th & 28th AGM
held on April 7, 2022 and March 27, 2023 respectively
appointed M/s. O P Bagla & Co. LLP, Chartered Accountants
(Firm Registration Number 000018N/N500091) and
M/s. J C Bhalla & Co., Chartered Accountants (Firm
Registration Number 001111N) as Joint Statutory Auditors
of the Company for a period of upto 5(Five) consecutive
years to hold office till the conclusion of AGM to be held
in the year 2027 and 2028 respectively. They have also
confirmed that they are not disqualified from continuing
as Joint Statutory Auditors of the Company.
The Statutory Auditors'' Report for the Financial Year
2024 does not contain any qualification, reservation or
adverse remark and forms part of the Annual Report. The
Statutory Auditors have not reported any fraud under
Section 143(12) of the Act.
Cost Audit
In terms of Section 148 of the Act and the Companies
(Cost Records and Audit) Rules, 2014, Cost Audit is not
applicable on the Company for the Financial Year 2024.
Disclosure under Sexual Harassment of Women
at Workplace (Prevention, Prohibition and
Redressal) Act, 2013
To comply with the provisions of Section 134 of the Act
and Rules made thereunder, your Company has complied
with the provisions relating to constitution of Internal
Complaints Committee under the Sexual Harassment
of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013.
During the year under review, no complaint was received
under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.
Vigil Mechanism / Whistle Blower Policy
Pursuant to the provisions of Section 177 of the Act and
Regulation 22 of SEBI (LODR) Regulations, the Company
has adopted a Vigil Mechanism/Whistle Blower Policy to
provide a platform to the Directors and Employees of the
Company to raise concerns regarding any irregularity,
misconduct or unethical matters/dealings within the
Company. The same is detailed in the Corporate
Governance Report which forms part of this report.
During the year under review, no complaint was received
under the Vigil Mechanism/ Whistle Blower Policy of
the Company.
Secretarial Auditors
Pursuant to the amended provisions of Regulation 24A
of the SEBI (LODR) Regulations and Section 204 of the
Act read with Rule 9 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, the
Audit, Risk Management and Ethics Committee and the
Board of Directors have approved and recommended the
appointment of M/s. Sanjay Grover & Associates, Peer
Reviewed Firm of Company Secretaries in Practice (Firm
Registration Number: P2001DE052900) as Secretarial
Auditors of the Company for a term of upto 5(Five)
consecutive years to hold office from the conclusion
of ensuing AGM till the conclusion of 35th (Thirty Fifth)
AGM of the Company to be held in the Year 2030,
for approval of the Members at ensuing AGM of the
Company. Brief resume and other details of M/s. Sanjay
Grover & Associates, Company Secretaries in Practice, are
separately disclosed in the Notice of ensuing AGM.
M/s. Sanjay Grover & Associates have given their consent
to act as Secretarial Auditors of the Company and
confirmed that their aforesaid appointment (if made)
would be within the prescribed limits under the Act &
Rules made thereunder and SEBI (LODR) Regulations.
They have also confirmed that they are not disqualified
to be appointed as Secretarial Auditors in terms of
provisions of the Act & Rules made thereunder and SEBI
(LODR) Regulations.
The Secretarial Audit Report for the Financial Year 2024
does not contain any qualification, reservation or adverse
remark and is attached to this report as Annexure - B.
Further, the Secretarial Auditors have not reported any
fraud under Section 143(12) of the Act.
Risk Management
The Audit, Risk Management and Ethics Committee of the
Board of Directors inter-alia monitor and review the risk
management plan and such other functions as assigned
from time to time.
Your Company has a robust Risk Management Policy which
identifies and evaluates business risks and opportunities.
The Company recognizes that these risks needs to be
managed and mitigated to protect the interest of the
stakeholders and to achieve business objectives. The risk
management framework is aimed at effectively mitigating
the Company''s various business and operational risks
through strategic actions. In line with the SEBI (LODR)
Regulations, cyber security risks are also covered under
Risk Management Policy of the Company.
Internal Financial Controls
Your Company has in place adequate Internal Financial
Controls. The report on Internal Financial Controls issued
by M/s. J C Bhalla & Co., Chartered Accountants and
M/s. O P Bagla & Co. LLP, Chartered Accountants, Joint
Statutory Auditors of the Company is annexed to the Audit
Report on the Financial Statements of the Company and
does not contain any reportable weakness in the Company.
Corporate Social Responsibility (CSR)
Your Company has a Corporate Social Responsibility Policy
which is uploaded on website of the Company at https://
varunbeverages.com/wp-content/uploads/2023/05/24-
CSR-Policy-Clear-Version.pdf. This Policy includes inter-
alia the guiding principles for selection, implementation
and monitoring of CSR activities of the Company.
Annual Report on CSR activities for the Financial Year
2024 as required under Sections 134 and 135 of the Act
read with Rule 8 of the Companies (Corporate Social
Responsibility Policy) Rules, 2014 and Rule 9 of the
Companies (Accounts) Rules, 2014 is attached to this
report as Annexure - C.
Directorsâ Responsibility Statement
Pursuant to Section 134(3)(c) read with Section 134(5) of
the Act, the Directors state that:
(a) in the preparation of the annual accounts for the
Financial Year ended December 31, 2024, the
applicable accounting standards have been followed
along with proper explanation relating to material
departures;
(b) they 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 your
Company as at December 31, 2024 and of the profits
of the Company for the period ended on that date;
(c) proper and sufficient care have been taken for the
maintenance of adequate accounting records in
accordance with the provisions of Act for safeguarding
the assets of your Company and for preventing and
detecting fraud and other irregularities;
(d) the annual accounts have been prepared on a going
concern basis;
(e) proper internal financial controls laid down by the
Directors were followed by the Company and that
such internal financial controls were adequate and
operating effectively; and
(f) proper systems to ensure compliance with the
provisions of all applicable laws were in place and
that such systems were adequate and operating
effectively.
Other Information
Management Discussion & Analysis Report
Management Discussion & Analysis Report for the Financial
Year 2024 as stipulated under Regulation 34(2)(e) of SEBI
(LODR) Regulations forms part of the Annual Report.
Business Responsibility and Sustainability Report
Business Responsibility and Sustainability Report (''BRSR'')
for the Financial Year 2024 describing the initiatives
taken by the Company from an Environment, Social and
Governance perspective as stipulated under Regulation
34(2)(f) of SEBI (LODR) Regulations forms part of the
Annual Report.
Further, as per the new reporting requirements, your
Company had taken reasonable assurance of the BRSR
Core from third-party Independent Assurance provider
and the same forms part of the Annual Report.
Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings and Outgo
The information on conservation of energy, technology
absorption and foreign exchange earnings and outgo
as stipulated under Section 134(3)(m) of the Act read
with Rule 8 of the Companies (Accounts) Rules, 2014 is
attached to this report as Annexure - D.
Corporate Governance Report
Your Company is committed to maintain the highest
standards of Corporate Governance and adhere to the
Corporate Governance requirements set out by Securities
and Exchange Board of India. The report on Corporate
Governance as stipulated under the SEBI (LODR)
Regulations is attached to this report as Annexure - E.
The certificate from M/s. Sanjay Grover & Associates,
Practicing Company Secretaries confirming compliance
with the conditions of corporate governance is also
attached to the Corporate Governance Report.
Listing
The Equity Shares of the Company are listed on the
National Stock Exchange of India Limited and BSE
Limited. Both these stock exchanges have nation-wide
trading terminals. Annual listing fee for the Financial Year
2024-25 has been paid to the National Stock Exchange of
India Limited and BSE Limited.
Equity Shares of your Company have been admitted
in Future & Options (F&O) segment with National
Stock Exchange of India Limited with effect from
November 29, 2024 and BSE Limited with effect from
December 13, 2024.
Annual Return
Pursuant to Sections 92(3) and 134(3)(a) of the Act,
the Annual Return of the Company is uploaded on
website of the Company at https://varunbeverages.com/
annual-reports/
Research & Development
During the year under review, no Research & Development
was carried out.
Cautionary Statement
Statements in the Board''s Report and the Management
Discussion & Analysis Report describing the Company''s
objectives, expectations or forecasts may be forward
looking within the meaning of applicable laws and
regulations. Actual results may differ from those
expressed in the statement.
General
Your Directors confirm that no disclosure or reporting is
required in respect of the following items as there was no
transaction on these items during the year under review:
1. I ssue of equity shares with differential voting rights
as to dividend, voting or otherwise.
2. The Whole-time Directors of the Company does not
receive any remuneration or commission from any of
its subsidiaries.
3. 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.
4. Issue of Sweat Equity Shares.
5. No application made or any proceeding pending
under Insolvency and Bankruptcy Code, 2016 as at
the end of the Financial Year 2024.
6. No instance of one-time settlement with any bank or
financial institution.
The Company is in regular compliance of the applicable
provisions of Secretarial Standards issued by the Institute
of Company Secretaries of India.
No material changes and commitments have occurred
after the closure of the Financial Year 2024 till the date of
this Report, which would affect the financial position of
your Company.
Acknowledgement
Your Company''s organizational culture upholds
professionalism, integrity and continuous improvement
across all functions as well as efficient utilization of the
Company''s resources for sustainable and profitable
growth.
Your Directors wish to place on record their appreciation
for the sincere services rendered by employees of the
Company at all levels. Your Directors also wish to place on
record their appreciation for the valuable co-operation and
support received from various Government Authorities,
Banks/Financial Institutions and other stakeholders such
as members, customers and suppliers, among others. Your
Directors also commend the continuing commitment and
dedication of employees at all levels which has been vital
for the Company''s success. Your Directors look forward
to their continued support in future.
For and on behalf of the Board of Directors
For Varun Beverages Limited
Ravi Jaipuria
Date: February 10, 2025 Chairman
Place: Gurugram DIN: 00003668
Dec 31, 2022
Your Directors have pleasure in presenting the 28th (Twenty Eighth) Annual Report on the business and operations of your Company along with the Audited Financial Statements for the Financial Year ended December 31, 2022.
Financial Performance
The financial performance of your Company for the Financial Year ended December 31, 2022 is summarized below:
|
('' in Million) |
||||
|
Particulars |
Standalone |
Consolidated |
||
|
Financial |
Financial |
Financial |
Financial |
|
|
Year ended |
Year ended |
Year ended |
Year ended |
|
|
December 31, 2022 |
December 31, 2021 |
December 31, 2022 |
December 31, 2021 |
|
|
Total Revenue |
107,395.82 |
66,530.44 |
134,294.07 |
90,262.16 |
|
Total Expenses |
90,550.80 |
59,715.22 |
114,057.64 |
80,196.08 |
|
Profit before tax after exceptional items |
16,845.02 |
6,815.22 |
20,236.37 |
10,066.08 |
|
Less: Tax Expenses |
4,143.03 |
1,920.35 |
4,735.23 |
2,605.56 |
|
Profit after tax |
12,701.99 |
4,894.87 |
14,974.33* |
6,940.52* |
|
Balance brought forward from last year |
13,942.96 |
10,074.42 |
13,967.42 |
8,042.43 |
|
Balance carried over to Balance Sheet |
25,101.68 |
13,942.96 |
27,398.84 |
13,967.42 |
|
General Reserve |
444.26 |
444.26 |
444.26 |
444.26 |
|
Other Reserves |
23,132.57 |
25,268.66 |
16,685.20 |
22,057.07 |
|
Reserves & Surplus carried to Balance Sheet |
48,678.51 |
39,655.88 |
44,528.30 |
36,468.75 |
|
*After adjustment on account of non-controlling interest. |
||||
Consolidated Financial Statements
The Consolidated Financial Statements of your Company for the Financial Year 2022 are prepared in compliance with the applicable provisions of the Companies Act, 2013 (''the Act''), Indian Accounting Standards (''Ind AS'') and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [''SEBI (LODR) Regulations''] which shall also be provided to the Members in their forthcoming Annual General Meeting (''AGM'').
State of the Companyâs Affairs
Your Company has presence in 27 States and 7 Union Territories in India and 5 other countries across the world (viz. Nepal, Sri Lanka, Morocco, Zambia & Zimbabwe). Further, Company is having 37 manufacturing facilities (31 in India and 6 in International Geographies) with more than 2,500 owned vehicles, more than 2,400 primary distributors and more than 110 depots. The Company continues to create long-term value through different
facets of its business and improve its presence, product mix and utilisation levels. With an increasing penetration on the back of a robust distribution network and diversifying product portfolio, the Company has created a sustainable operating efficiency at its manufacturing facilities.
Your Company has not accepted any deposits during the year under review falling within the ambit of Section 73 of the Act and the Companies (Acceptance of Deposits) Rules, 2014.
During the year under review, your Company has not transferred any amount to General Reserve.
Change in the Nature of Business, if any
During the year under review, there was no change in the nature of business of the Company.
The Board of Directors of the Company in their meeting held on August 9, 2017 approved and adopted a Policy on Distribution of Dividend to comply with Regulation 43A of SEBI (LODR) Regulations and the same is uploaded on website of the Company at https://varunpepsi.com/wp-content/uploads/2019/03/Dividend-Distribution-Policy.pdf
During the year under review, the Board of Directors in their meeting held on August 1, 2022 declared an interim dividend of '' 2.50 per Equity Share (face value of '' 10/-per Equity Share) to the eligible equity shareholders of the Company. Further, the Board of Directors have also recommended a final dividend of '' 1.00 per Equity Share (face value of '' 10/- per Equity Share) for the Financial Year 2022 for approval of equity shareholders at the ensuing AGM of the Company. Total cash outflow for dividend payout would be approx '' 2,273 million for Financial Year 2022.
Your Company has transferred the unpaid or unclaimed interim dividend to the Unclaimed Dividend Accounts of the respective financial years and the details of the same a re uploa ded on website of the Company at https:// varunpepsi.com/corporate-governance/
Your Company applies stringent strategic and financial criteria to any potential acquisition or partnership and to enhance transparency, the Board of Directors of the Company have approved and adopted Acquisition Guidelines for Company''s M&A activities for viable acquisitions and the same is uploaded on website of the Company at https://varunpepsi.com/wp-content/ uploads/2017/08/VBL-Guidelines-for-Acquisition-in-India.pdf
During the year under review, your Company has issued and allotted 216,516,540 Bonus Equity Shares in the proportion of 1:2 (i.e. one equity share for every two equity shares) to the eligible Members whose names appeared in the Register of Members / list of beneficial owners as on the record date fixed for this purpose.
As part of the aforesaid allotment, 38,418 Bonus Equity Shares representing fractional entitlement(s) of 76,836 eligible Members were consolidated and allotted to "Varun Beverages Limited - Bonus Issue Fractional Shares Trustâ (''Trust'') created for the purpose of selling and distributing the net sale proceeds among the eligible Members in proportion to their respective fractional entitlement. The aforesaid 38,418 Equity Shares were
sold by the Trust on June 23, 2022 & June 24, 2022 and the net sale proceeds of the same were distributed to the eligible Members.
Pursuant to the approval of Members at the 27th AGM of the Company held on April 7, 2022, the Authorized Share Capital of the Company of '' 10,000,000,000/-(Rupees Ten Billion only) divided into 500,000,000 (Five Hundred Million) Equity Shares of face value of '' 10/- (Rupees Ten only) each and 50,000,000 (Fifty Million) Preference Shares of face value of '' 100/-(Rupees One Hundred only) each was re-classified to '' 10,000,000,000/- (Rupees Ten Billion only) divided into 1,000,000,000 (One Billion) Equity Shares of face value of '' 10/- (Rupees Ten only) each.
During the year under review, the Issued, Subscribed and Paid-up Equity Share Capital of your Company was increased from '' 4,330,330,800/- (Rupees Four Billion Three Hundred Thirty Million Three Hundred Thirty Thousand and Eight Hundred only) divided into 433,033,080 (Four Hundred Thirty Three Million Thirty Three Thousand and Eighty) Equity Shares of face value of '' 10/- (Rupees Ten only) to '' 6,495,496,200/- (Rupees Six Billion Four Hundred Ninety Five Million Four Hundred Ninety Six Thousand and Two Hundred only) divided into 649,549,620 (Six Hundred Forty Nine Million Five Hundred Forty Nine Thousand and Six Hundred Twenty) Equity Shares of face value of '' 10/- (Rupees Ten only) each due to allotment of 216,516,540 (Two Hundred Sixteen Million Five Hundred Sixteen Thousand Five Hundred and Forty) Bonus Equity Shares of face value of '' 10/- (Rupees Ten only) each.
Your Company has Employees Stock Option Scheme 2016 (''ESOP Scheme 2016'') and to align the same with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended from time to time (''SEBI ESOP Regulations''), the Members of the Company at their 27th AGM held on April 7, 2022 approved to amend the ESOP Scheme 2016 i.e. in compliance with SEBI ESOP Regulations.
Certificate from Secretarial Auditors of the Company that ESOP Scheme 2016 has been implemented in accordance with the SEBI ESOP Regulations and the resolution(s) passed by the Members of the Company will be uploaded on website viz. https://varunpepsi.com/ for inspection by Members of the Company.
The statutory disclosures as mandated under the Act and SEBI ESOP Regulations are available on website of the Company at https://varunpepsi.com/annual-reports/
Related Party Transactions
To comply with the provisions of Sections 177 and 188 of the Act and Rules made thereunder read with Regulation 23 of SEBI (LODR) Regulations, your Company took necessary prior approval of the Audit, Risk Management and Ethics Committee before entering into related party transactions. All contracts / arrangements / transactions entered into by the Company during the Financial Year 2022 with related parties, as defined under the Act and SEBI (LODR) Regulations, were in the ordinary course of business and on arm''s length basis.
During the year under review, your Company and/ or its subsidiaries have not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the Policy of the Company on Related Party Transactions.
None of the transactions with any of the related parties were in conflict with the interest of the Company rather, these were synchronized and synergized with the Company''s operations. Attention of Members is drawn to the disclosure of transactions with the related parties set out in Note No. 44 of the Standalone Financial Statements forming part of the Annual Report.
Your Company has framed a Policy on Related Party Transactions in accordance with the Act and SEBI (LODR) Regulations. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and its related parties. The policy is uploaded on website of the Company at https://varunpepsi.com/policies/.
Since all transactions which were entered into during the Financial Year 2022 were on arm''s length basis and in the ordinary course of business and there was no material related party transaction entered by the Company during the Financial Year 2022 as per Policy on Related Party Transactions, hence no detail is required to be provided in Form AOC-2 prescribed under Clause (h) of Subsection (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.
Particulars of Loans, Guarantees or Investments
Details of Loans, Guarantees or Investments covered under the provisions of Section 186 of the Act are given in the Notes to the Standalone Financial Statements.
During the year under review, your Company''s credit ratings by CRISIL is as below:
|
Long Term Rating |
CRISIL AA /Stable (Upgraded from ''CRISIL AA/Positive'') |
|
Short Term Rating |
CRISIL A1 (Re-affirmed) |
Subsidiaries, Associates and Joint Ventures
Your Company has following subsidiaries, associate and joint venture:
⢠Varun Beverages (Nepal) Private Limited;
⢠Varun Beverages Lanka (Private) Limited;
- Ole Springs Bottlers (Private) Limited (step-down subsidiary);
⢠Varun Beverages Morocco SA;
⢠Varun Beverages (Zambia) Limited;
⢠Varun Beverages (Zimbabwe) (Private) Limited;
⢠Varun Beverages RDC SAS;
⢠Varun Beverages International DMCC; and
⢠Lunarmech Technologies Private Limited.
⢠Clean Max Tav Private Limited (w.e.f. 23.11.2022)
⢠IDVB Recycling Operations Private Limited (w.e.f. 01.07.2022)
To comply with the provisions of Section 129 of the Act, a separate statement containing salient features of Financial Statements of Subsidiaries, Associate and Joint Venture of your Company (including their performance and financial position) in prescribed Form AOC-1 forms part of Consolidated Financial Statements and therefore not repeated here to avoid duplication. Further, contribution of Subsidiaries, Associate and Joint Venture to the overall performance of your Company is outlined in Note No. 57 of the Consolidated Financial Statements.
Financial Statements of the aforesaid Subsidiaries, Associate and Joint Venture companies are kept open for inspection by the Members at the Registered Office of your Company on all days except Saturday, Sunday and Public Holidays up to the date of AGM i.e. March 27, 2023 between 11:00 a.m. to 5:00 p.m. as required under Section 136 of the Act. Any Member desirous of obtaining a copy of the said Financial Statements may write to the Company at its Registered Office or Corporate Office. The Financial Statements including the Consolidated Financial Statements and all other documents required to be attached with this Report have been uploaded on website of the Company at https://varunpepsi.com/ annual-reports/.
To comply with the provisions of Regulation 16(c) of SEBI (LODR) Regulations, the Board of Directors of the Company have approved and adopted a Policy for determination of Material Subsidiary and Governance of Subsidiaries. Further, Varun Beverages (Zimbabwe) (Private) Limited is a material subsidiary of the Company for the Financial Year 2022. Policy for determination of Material Subsidiary and Governance of Subsidiaries is uploaded on website of the Company at https:// varunpepsi.com/wp-content/uploads/2022/09/3.-Policy-on-Material-Subsidiary-VBL.pdf
Directors and Key Managerial Personnel
Directors
To comply with the provisions of Section 152 of the Act and in terms of the Articles of Association of the Company, Mr. Ravi Jaipuria (DIN: 00003668), Non-Executive Chairman & Director is liable to retire by rotation at the ensuing AGM and being eligible, seeks re-appointment. The Board of Directors, on the recommendation of Nomination and Remuneration Committee (''NRC''), recommended his re-appointment for consideration by the Members at the ensuing AGM.
During the year und er review, Mr. Varun Ja ipuria , Whole-time Director (DIN: 02465412) was elevated and re-designated as "Executive Vice - Chairmanâ of the Company w.e.f. March 3, 2022 and all other terms and conditions of his appointment remained unchanged (including tenure i.e. up to October 31, 2024) as approved by the Members at their AGM held on June 26, 2020.
As recommended by NRC, the Board of Directors in their meeting held on February 6, 2023 approved the re-appointment of Ms. Sita Khosla (DIN: 01001803) w.e.f. February 16, 2023, Dr. Ravi Gupta (DIN: 00023487) w.e.f. March 19, 2023 and Ms. Rashmi Dhariwal (DIN: 00337814) w.e.f. March 19, 2023, as Independent Directors for a second term of upto 5 (Five) consecutive years, not liable to retire by rotation, subject to the approval of Members at the ensuing AGM of the Company.
Further, the above-mentioned Directors have affirmed that they are not debarred from holding the office of Director by virtue of any SEBI order or any other such Authority.
Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Act including compliance of relevant provisions of the Companies (Appointment and Qualifications of Directors) Rules, 2014 and SEBI (LODR) Regulations. The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise
and they hold highest standards of integrity (including the proficiency) and fulfils the conditions specified in the Act and SEBI (LODR) Regulations and are independent of the management.
None of the Directors of the Company are disqualified as per the provisions of Section 164 of the Act. The Directors of the Company have made necessary disclosures under Section 184 and other relevant provisions of the Act.
Brief resume and other details of the Directors being appointed/re-appointed at the ensuing AGM as stipulated under Secretarial Standard-2 issued by the Institute of Company Secretaries of India and Regulation 36 of the SEBI (LODR) Regulations, is separately disclosed in the Notice of ensuing AGM.
Mr. Kapil Agarwal (DIN: 02079161) has resigned from the position of Whole-time Director of the Company w.e.f. November 1, 2022 due to personal reasons.
Key Managerial Personnel
Mr. Raj Gandhi (DIN: 00003649), Whole-time Director was elevated and designated as Key Managerial Personnel of the Company w.e.f. March 3, 2022 in place of Mr. Kapil Agarwal (CEO & Whole-time Director) in accordance with the provisions of Section 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and all other terms and conditions of appointment of Mr. Raj Gandhi remained unchanged (including tenure i.e. up to October 31, 2024) as approved by the Members at their AGM held on June 26, 2020.
Further, Mr. Rajesh Chawla, Chief Financial Officer and Mr. Ravi Batra, Chief Risk Officer & Group Company Secretary, continued to be the Key Managerial Personnel of your Company in accordance with the provisions of Section 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
Board Evaluation
To comply with the provisions of Section 134(3)(p) of the Act and Rules made thereunder and Regulation 17(10) of SEBI (LODR) Regulations, the Board has carried out the annual performance evaluation of the Directors individually including the Independent Directors (wherein the concerned Director being evaluated did not participate), Board as a whole and following Committees of the Board of Directors:
i) Audit, Risk Management and Ethics Committee;
ii) Nomination and Remuneration Committee;
iii) Stakeholders'' Relationship Committee; and
iv) Corporate Social Responsibility Committee.
The manner in which the annual performance evaluation has been carried out is explained in the Corporate Governance Report which forms part of this report. Board is responsible to monitor and review the evaluation framework.
Further, to comply with Regulation 25(4) of SEBI (LODR) Regulations, Independent Directors also evaluated the performance of Non-Independent Directors, Chairman and Board as a whole at a separate meeting of Independent Directors.
Board and Committees of the Board
The number of meetings of the Board and various Committees of the Board including composition are set out in the Corporate Governance Report which forms part of this report. The intervening gap between the meetings was within the period prescribed under the provisions of Section 173 of the Act and SEBI (LODR) Regulations.
To comply with the provisions of Section 178 of the Act and Rules made thereunder and Regulation 19 of SEBI (LODR) Regulations, the Company''s Remuneration Policy for Directors, Key Managerial Personnel (KMP), Senior Management and other Employees of the Company is uploaded on website of the Company at https://varunpepsi.com/wp-content/uploads/2020/03/ Remuneration-Policy.pdf The Policy includes, inter-alia, the criteria for appointment and remuneration of Directors, KMPs, Senior Management Personnel and other employees of the Company.
Remuneration of Directors, Key Managerial Personnel and Particulars of Employees
The statement of disclosure of remuneration under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (''Rules''), is attached to this report as Annexure - A.
Further, as per second proviso to Section 136(1) of the Act read with second proviso of Rule 5 of the Rules, the Board''s Report and Financial Statements are being sent to the Members of the Company excluding the statement of particulars of employees as required under Rule 5(2) of the Rules. Any member interested in obtaining a copy of the said statement may write to the Compliance Officer at complianceofficer@rjcorp.in. The said statement is also available for inspection by the Members at the Registered Office of your Company on all days except Saturday, Sunday and Public Holidays up to the date of AGM i.e. March 27, 2023 between 11:00 a.m. to 5:00 p.m.
Due to retirement of existing Joint Statutory Auditors viz. M/s. Walker Chandiok & Co. LLP (Firm Registration Number 001076N/N500013), Chartered Accountants, at the conclusion of ensuing AGM upon completion of their 2 (Two) consecutive terms of 5 (Five) years each and pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 and based on the recommendation of the Audit, Risk Management and Ethics Committee, the Board of Directors have recommended appointment of M/s. J C Bhalla & Co., Chartered Accountants (Firm Registration Number 001111N) as Joint Statutory Auditors of the Company for a term of upto 5 (Five) consecutive years to hold office from the conclusion of ensuing AGM till the conclusion of 33rd (Thirty Third) AGM of the Company to be held in the Year 2028, subject to approval of Members at the ensuing AGM. Brief resume and other details of M/s. J C Bhalla & Co., Chartered Accountants, are separately disclosed in the Notice of ensuing AGM.
M/s. J C Bhalla & Co., Chartered Accountants, have given their consent to act as Joint Statutory Auditors of the Company and confirmed that their aforesaid appointment (if made), would be within the limits specified under Section 141(3)(g) of the Act. They have also confirmed that they are not disqualified to be appointed as Statutory Auditors in terms of provisions of Sections 139(1) and 141(3) of the Act and the Companies (Audit and Auditors) Rules, 2014.
Further, M/s. O P Bagla & Co. LLP, Chartered Accountants (Firm Registration Number 000018N/N500091) were appointed by the Members in their 27th AGM held on April 7, 2022 as Joint Statutory Auditors of the Company to hold office for a period of up to 5 (Five) consecutive years i.e. till the conclusion of 32nd AGM of the Company to be held in the Year 2027. They have also confirmed that they are not disqualified from continuing as Joint Statutory Auditors of the Company.
The Statutory Auditors'' Report for the Financial Year 2022 does not contain any qualification, reservation or adverse remark and forms part of the Annual Report. The Statutory Auditors have not reported any fraud under Section 143(12) of the Act.
In terms of Section 148 of the Act and the Companies (Cost Records and Audit) Rules, 2014, Cost Audit is not applicable on the Company for the Financial Year 2022.
Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
To comply with the provisions of Section 134 of the Act and Rules made thereunder, your Company has complied with the provisions relating to constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
During the year under review, no complaint was received under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Vigil Mechanism / Whistle Blower Policy
Pursuant to the provisions of Section 177 of the Act and Regulation 22 of SEBI (LODR) Regulations, the Company has adopted a Vigil Mechanism / Whistle Blower Policy to provide a platform to the Directors and Employees of the Company to raise concerns regarding any irregularity, misconduct or unethical matters / dealings within the Company. The same is detailed in the Corporate Governance Report which forms part of this report.
Secretarial Auditors
The Board of Directors on recommendation of the Audit, Risk Management and Ethics Committee, have appointed M/s. Sanjay Grover & Associates, Company Secretaries to conduct Secretarial Audit of your Company.
The Secretarial Audit Report for the Financial Year 2022 does not contain any qualification, reservation or adverse remark and is attached to this report as Annexure - B.
Risk Management
Pursuant to the provisions of Regulation 21(5) of SEBI (LODR) Regulations, top 1,000 listed entities, determined on the basis of market capitalization, as at the end of the immediate previous financial year shall constitute a Risk Management Committee. The Audit, Risk Management and Ethics Committee of the Board of Directors inter-alia monitor and review the risk management plan and such other functions as assigned from time to time.
Your Company has a robust Risk Management Policy which identifies and evaluates business risks and opportunities. The Company recognize that these risks needs to be managed and mitigated to protect the interest of the stakeholders and to achieve business objectives. The risk management framework is aimed at effectively mitigating the Company''s various business and operational risks through strategic actions.
Your Company has in place adequate Internal Financial Controls. The report on Internal Financial Controls issued by M/s. Walker Chandiok & Co. LLP, Chartered Accountants and M/s. O P Bagla & Co. LLP, Chartered Accountants, Joint Statutory Auditors of the Company is annexed to the Audit Report on the Financial Statements of the Company and does not contain any reportable weakness in the Company.
Corporate Social Responsibility (CSR)
Your Company has a Corporate Social Responsibility Policy which is uploaded on website of the Company at https://varunpepsi.com/wp-content/uploads/2022/11/ CSR-Policy.pdf
Annual Report on CSR activities for the Financial Year 2022 as required under Sections 134 and 135 of the Act read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Rule 9 of the Companies (Accounts) Rules, 2014 is attached to this report as Annexure - C.
Directorsâ Responsibility Statement
Pursuant to Section 134(3)(c) read with Section 134(5) of the Act, the Directors state that:
(a) in the preparation of the annual accounts for the Financial Year ended December 31, 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) they 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 your Company as at December 31, 2022 and of the profits of the Company for the period ended on that date;
(c) proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts have been prepared on a going concern basis;
(e) proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls were adequate and operating effectively; and
(f) proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.
Management Discussion & Analysis Report
Management Discussion & Analysis Report for the year under review, as stipulated under Regulation 34(2)(e) of SEBI (LODR) Regulations, forms part of the Annual Report.
Business Responsibility and Sustainability Report
Business Responsibility and Sustainability Report for the Financial Year 2022 describing the initiatives taken by the Company from an Environment, Social and Governance perspective as stipulated under Regulation 34(2)(f) of SEBI (LODR) Regulations forms part of the Annual Report.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 is attached to this report as Annexure - D.
Corporate Governance Report
Your Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by Securities and Exchange Board of India. The report on Corporate Governance as stipulated under the SEBI (LODR) Regulations is attached to this report as Annexure - E. The certificate from M/s. Sanjay Grover & Associates, Practicing Company Secretaries confirming compliance with the conditions of corporate governance is also attached to the Corporate Governance Report.
Your Company has been awarded by Capital Finance International (in the category - FMCG Sector), Business Brand and CNBC TV 18 - Incredible Brands of India Awards for following best Corporate Governance practices for the year ended 2022.
The Equity Shares of the Company are listed on the National Stock Exchange of India Limited and BSE Limited. Both these stock exchanges have nation-wide trading terminals. Annual listing fee for the Financial Year 2022-23 has been paid to the National Stock Exchange of India Limited and BSE Limited.
Pursuant to Sections 92(3) and 134(3)(a) of the Act, the Annual Return of the Company is uploaded on website of the Company at https://varunpepsi.com/annual-reports/
During the year under review, no Research & Development was carried out.
Statements in the Board''s Report and the Management Discussion & Analysis Report describing the Company''s objectives, expectations or forecasts may be forward looking within the meaning of applicable laws and regulations. Actual results may differ from those expressed in the statements.
Your Directors confirm that no disclosure or reporting is required in respect of the following items as there was no transaction on these items during the year under review:
1. I ssue of equity shares with differential voting rights as to dividend, voting or otherwise.
2. The Whole-time Directors of the Company does not receive any remuneration or commission from any of its subsidiaries.
3. 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.
4. Issue of Sweat Equity Shares.
5. No application made or any proceeding pending under Insolvency and Bankruptcy Code, 2016 as at the end of the Financial Year 2022.
6. Details of difference between the amount of valuation at the time of one time settlement and valuation done while taking loan from banks or financial institutions are not applicable.
The Company is in regular compliance of the applicable provisions of Secretarial Standards issued by the Institute of Company Secretaries of India.
No material changes and commitments have occurred after the closure of the Financial Year 2022 till the date of this Report which would affect the financial position of your Company.
Your Company''s organizational culture upholds professionalism, integrity and continuous improvement
across all functions as well as efficient utilization of the Company''s resources for sustainable and profitable growth.
Our Directors wish to place on record their appreciation for the sincere services rendered by employees of the Company at all levels. Your Directors also wish to place on record their appreciation for the valuable cooperation and support received from various Government Authorities, Banks / Financial Institutions and other stakeholders such as members, customers and suppliers, among others. Your Directors also commend the
continuing commitment and dedication of employees at all levels which has been vital for the Company''s success. Your Directors look forward to their continued support in future.
For and on behalf of the Board of Directors For Varun Beverages Limited
Ravi Jaipuria
Date: February 6, 2023 Chairman
Place: Gurugram DIN: 00003668
Dec 31, 2018
Dear Members,
The Directors have pleasure in presenting the 24th (Twenty Fourth) Annual Report on the business and operations of your Company along with the Audited Financial Statements, for the Financial Year ended December 31, 2018.
Financial Results
The financial performance of your Company for the Financial Year ended December 31, 2018 is summarized below:
(Rs. in Million)
|
Standalone |
Consolidated |
|||
|
Particulars |
Financial Year ended December 31, 2018 |
Financial Year ended December 31, 2017 |
Financial Year ended December 31, 2018 |
Financial Year ended December 31, 2017 |
|
Total Revenue |
39,584.91 |
35,380.90 |
52,499.51 |
45,288.89 |
|
Total Expenses |
34,955.33 |
32,338.97 |
48,191.73 |
42,392.85 |
|
Profit before tax after prior period items |
4,629.58 |
3,041.93 |
4,337.98 |
2,909.54 |
|
Less: Tax Expenses |
1,305.99 |
685.95 |
1,339.35 |
768.95 |
|
Profit after tax |
3,323.59 |
2,355.98 |
2,928.41* |
2,101.54* |
|
Balance brought forward from last year |
2,268.84 |
614.82 |
(594.12) |
(2,007.59) |
|
Balance carried over to Balance Sheet |
4,972.54 |
2,268.84 |
1,720.41 |
(594.12) |
|
Debenture Redemption Reserve |
0.00 |
159.17 |
0.00 |
159.17 |
|
General Reserve |
444.26 |
191.25 |
444.26 |
191.25 |
|
Other Reserves |
18,646.17 |
18,521.80 |
15,993.95 |
16,111.03 |
|
Reserves & Surplus carried to Balance Sheet |
24,062.97 |
21,141.06 |
18,158.62 |
15,867.33 |
|
*After adjustment on account of non-controlling interest and share profit of associate Companies. |
||||
Consolidated Financial Statements
The Consolidated Financial Statements of your Company for the Financial Year 2018, are prepared in compliance with the applicable provisions of the Companies Act, 2013 (âthe Actâ), Indian Accounting Standards (âInd ASâ) and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [âSEBI (LODR) Regulationsâ] which shall be placed before the members in their forthcoming Annual General Meeting (AGM).
To comply with Section 129 (3) of the Act, a statement containing the salient features of the Financial Statement of subsidiary/ associate/ joint venture companies is provided as Annexure in Form AOC - 1 to the Consolidated Financial Statement of the Company and therefore not repeated hereby to avoid duplication.
Deposits
Your Company has not accepted any deposits during the year under review, falling within the ambit of Section 73 of the Act and the Companies (Acceptance of Deposits) Rules, 2014.
Transfer to General Reserve
During the year under review, the Company has transferred Rs. 253.01 Million to General Reserve.
Change in the Nature of Business, if any
During the year under review, there was no change in the nature of the business of the Company.
Dividend Distribution Policy
The Board of Directors of the Company in their meeting held on August 9, 2017 approved and adopted a Policy on Distribution of Dividend to comply with Regulation 43A of SEBI (LODR) Regulations and the same is uploaded on the website of the Company at https://varunpepsi.com/ wp-content/uploads/2019/03/Dividend-Distribution-Policy.pdf
Dividend
During the year under review, the Board of Directors of the Company declared an interim dividend of Rs. 2.50 per Equity Share (face value of Rs. 10/- per Equity Share) for the year 2018. The Board of Directors do not recommend any final dividend for the Financial Year 2018.
Your Company has transferred the unpaid or unclaimed Interim Dividend to the Unclaimed Dividend Account -Varun Beverages Limited and the details of unpaid and unclaimed dividend amounts lying in the said Accounts (maintained with HDFC Bank Limited and Yes Bank Limited) are uploaded on the website of the Company at https://varunpepsi.com/wp-content/uploads/2019/02/ Unclaimed-Dividend-Data-2018.pdf
Acquisition Guidelines
Your Company applies stringent strategic and financial criteria to any potential acquisition or partnership and to enhance transparency, the Board of Directors of the Company in their meeting held on August 9, 2017 approved and adopted Acquisition Guidelines for Companyâs M&A activities for viable acquisitions and the same is uploaded on the website of the Company at http://varunpepsi.com/wp-content/uploads/2017/08/ VBL-Guidelines-for-Acquisition-in-India.pdf
Acquisitions
After the close of the Financial Year, your Company concluded acquisition of franchise rights from SMV Group to sell and distribute PepsiCo beverages in 13 Districts in the State of Karnataka, 14 Districts in the State of Maharashtra and 3 Districts in the State of Madhya Pradesh.
Further, the Board of Directors in their meeting held on February 18, 2019 considered and approved, its intent to enter into a binding agreement with PepsiCo India Holdings Private Limited (âPepsiCoâ) to acquire franchise rights in South and West regions of India from PepsiCo for a national bottling, sales and distribution footprint in 7 States and 5 Union Territories (subject to receipt of necessary statutory approvals). On completion of the acquisition and related formalities, the Company will be a franchise of PepsiCoâs beverages business across 27 States and 7 Union Territories of India.
Credit Rating
During the year under review, CRISIL has re-affirmed your Companyâs credit ratings as below:
Long-Term Rating CRISIL AA-/Positive
(Outlook revised from âStableâ and rating reaffirmed)
Short-Term Rating CRISIL A1 (Reaffirmed)
Rs. 2500 Million Commercial CRISIL A1 (Reaffirmed) Paper
Share Capital
The Authorized Share Capital of the Company is Rs. 10,000,000,000/- (Rupees Ten Thousand Million only) divided into 500,000,000 (Five Hundred Million) equity shares of Rs. 10/- (Rupees Ten) each and 50,000,000 (Fifty Million) Preference Shares of Rs. 100/- (Rupees Hundred) each. During the year under review, there is no change in the Authorized Share Capital of the Company.
During the year under review, the paid up capital of the Company has been increased from Rs. 1,825,869,400/-(Rupees One Billion Eight Hundred and Twenty-Five Million Eight Hundred and Sixty-Nine Thousand Four Hundred) to Rs. 1,826,419,400/- (Rupees One Billion Eight Hundred and Twenty-Six Million Four Hundred and Nineteen Thousand Four Hundred) due to exercise of 55,000 Stock Options (equivalent to 55,000 equity shares having face value of Rs. 10 each) under Varun Beverages Limited Employee Stock Option Scheme 2013.
Employee Stock Option Schemes
Your Company has two Employee Stock Option Schemes viz. Varun Beverages Limited Employee Stock Option Scheme 2013 (âESOP Scheme 2013â) and Varun Beverages Limited Employee Stock Option Scheme 2016 (âESOP Scheme 2016â). ESOP Scheme 2016 is in line with the provisions of SEBI (Share Based Employee Benefits) Regulations, 2014.
Your Company has received a certificate from the Statutory Auditors of the Company that ESOP Scheme 2016 has been implemented in accordance with the SEBI (Share Based Employee Benefits) Regulations, 2014 and the resolution(s) passed by the Members of the Company. The certificate would be placed at the ensuing AGM for inspection by Members of the Company.
Relevant disclosures pursuant to Rule 12 (9) of the Companies (Share Capital and Debentures) Rules, 2014 and Regulation 14 of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 are attached to this report as Annexure - A.
Non-Convertible Debentures
During the year under review, pursuant to the exercise of put option by Debenture holders for redemption of 3,000 Secured, Rated, Listed, Redeemable, Non- Convertible Debentures (âDebenturesâ/ âNCDâsâ) of a face value of Rs. 10,00,000 (Rupees Ten Lacs) each aggregating to Rs. 3,000,000,000 (Rupees Three Billion), your Company has made the full payment of principal and accrued interest on June 29, 2018.
Accordingly, as on the date of this report, the Company has no outstanding NCDâs.
Related Party Transactions
To comply with the provisions of Section 188 of the Act, and Rules made thereunder read with Regulation 23 of SEBI (LODR) Regulations, your Company took necessary prior approval of the Audit and Risk Management Committee before entering into related party transactions. All contracts / arrangements / transactions entered into by the Company with related parties, as defined under the Act and SEBI (LODR) Regulations during the Financial Year 2018, were in the ordinary course of business and on armâs length basis.
During the year under review, your Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the Policy of the Company for Related Party Transactions.
None of the transactions with any of the related parties were in conflict with the interest of the Company rather, these were synchronised and synergised with the Companyâs operations. Attention of Members is drawn to the disclosure of transactions with the related parties set out in Note no. 45 of the Standalone Financial Statements, forming part of the Annual Report.
Your Company has framed a Policy on Related Party Transactions in accordance with SEBI (LODR) Regulations and as per the amended provisions of the Act. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and related parties. The policy is uploaded on the website of the Company at http:// varunpepsi.com/wp-content/uploads/2016/09/Policy-On-Related-Party-Transactions.pdf
Since all transactions which were entered into during the Financial Year 2018 were on armâs length basis and in the ordinary course of business and there was no material related party transaction entered by the Company during the Financial Year 2018 as per Related Party Transactions Policy, hence no detail is required to be provided in Form AOC-2 prescribed under Clause (h) of Sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.
Particulars of Loans, Guarantees or Investments
Details of Loans, Guarantees, Securities and Investments covered under the provisions of Section 186 of the Act are given in the Notes to the Standalone Financial Statements.
Subsidiaries, Associates and Joint Ventures
Your Company has following subsidiaries / associate companies:
Subsidiaries
Varun Beverages (Nepal) Private Limited;
Varun Beverages Morocco SA;
Varun Beverages Lanka (Private) Limited;
Ole Springs Bottlers (Private) Limited (step-down subsidiary);
Varun Beverages (Zambia) Limited; and Varun Beverages (Zimbabwe) (Private) Limited.
Associate Company
Angelica Technologies Private Limited
To comply with the provisions of Section 129 of the Act, a separate statement containing salient features of Financial Statements of Subsidiaries, Associates and Joint Ventures of your Company forms part of Consolidated Financial Statements.
Financial Statements of the aforesaid subsidiary companies are kept open for inspection by the Members at the Registered Office of your Company during business hours on all days except Saturday and Sunday up to the date of the AGM i.e. April 17, 2019 between 11:00 a.m. to 5:00 p.m. as required under Section 136 of the Act. Any Member desirous of obtaining a copy of the said Financial Statements may write to the Company at its Registered Office or Corporate Office. The Financial Statements including the Consolidated Financial Statements and all other documents required to be attached with this Report have been uploaded on the website of the Company at https://varunpepsi.com/wp-content/uploads/2019/02/ FinancialStatements31122018.pdf
To comply with the provisions of Regulation 16(c) of SEBI (LODR) Regulations, the Board of Directors of the Company have approved and adopted a Policy for determining Material Subsidiary and as on December 31, 2018 none of the subsidiary is a Material Subsidiary of the Company in terms of the said policy. The policy on Material Subsidiary has been uploaded on the website of the Company at http://varunpepsi.com/wp-content/ uploads/2016/09/Policy-For-Determination-Qf-Material-Subsidiary-And-Governance-Of-Subsidiaries.pdf
Directors and Key Managerial Personnel Appointments
Dr. Naresh Trehan (DIN 00012148), was appointed as an Independent Director of the Company for a period of three years with effect from December 1, 2015. Accordingly, his first term of office expired on November 30, 2018. Pursuant to the provisions of Section 161 of the Companies Act, 2013 and based on the performance evaluation of Independent Directors and on the recommendations of the Nomination and Remuneration Committee, the Board of Directors in their meeting held on October 25, 2018 reappointed Dr. Naresh Trehan as an Independent Director of the Company (subject to the approval of members by a special resolution) with effect from December 1, 2018 for a period of up to 5 (Five) years.
Your Company has also received a declaration from Dr. Naresh Trehan that he meets the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Act and under the SEBI (LODR) Regulations. He has further affirmed that he is not debarred from holding the office of an Independent Director by virtue of any SEBI order or any other such Authority.
Your Company has received necessary declarations from Dr. Naresh Trehan that he fulfils the conditions specified in the Act and rules made thereunder for his reappointment as an Independent Director of the Company and is independent of the management. The Board considered the same and is of the view that he fulfill / meets the criteria of independence and accordingly, recommends re-appointment of Dr. Naresh Trehan.
Dr. Naresh Trehan, being eligible and offering himself for re-appointment, is proposed to be re-appointed as an Independent Director for a second term of upto 5 (Five) years with effect from December 1, 2018.
Mr. Kapil Agarwal (DIN 02079161) was appointed as Whole Time Director of the Company for a period of three years with effect from January 1, 2016. Accordingly, his term of office expired on December 31, 2018. Pursuant to the provisions of Section 196 of the Companies Act, 2013 and based on the performance evaluation report and on the recommendations of Nomination and Remuneration Committee, the Board of Directors in their meeting held on October 25, 2018 re-appointed Mr. Kapil Agarwal as Whole Time Director and Chief Executive Officer of the Company (subject to the approval of members by an ordinary resolution) with effect from January 1, 2019 for a period of up to 5 (Five) years.
Your Company has also received a declaration from Mr. Kapil Agarwal as required under the Act and under the SEBI (LODR) Regulations. He has further affirmed that he is not debarred from holding the office of a Whole Time Director by virtue of any SEBI order or any other such Authority.
To comply with the provisions of Section 152 of the Act and in terms of the Articles of Association of the Company, Mr. Varun Jaipuria, Whole-time Director and Mr. Kamlesh Kumar Jain, Whole-time Director and Chief Financial Officer are liable to retire by rotation at the ensuing AGM and being eligible, seeks re-appointment. Your Board of Directors recommend their re-appointment.
Key Managerial Personnel
Mr. Kapil Agarwal, Whole-time Director and Chief Executive Officer, Mr. Kamlesh Kumar Jain, Whole-time Director and Chief Financial Officer and Mr. Ravi Batra - Chief Risk Officer and Group Company Secretary, continued to be the Key Managerial Personnel of your Company in accordance with the provisions of Section 2(51) and Section 203 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
Board Evaluation
To comply with the provisions of Section 134 (3)(p) of the Act and the rules made thereunder, and Regulation 17(10) of SEBI (LODR) Regulations, the Board has carried out the annual performance evaluation of the Directors individually including the Independent Directors (wherein the concerned director being evaluated did not participate), Board as a whole, and following Committees of the Board of Directors:
i) Audit and Risk Management Committee;
ii) Nomination and Remuneration Committee;
iii) Stakeholdersâ Relationship Committee; and
iv) Corporate Social Responsibility Committee.
The manner in which the annual performance evaluation has been carried out is explained in the Corporate Governance Report which forms part of this report. Board is responsible to monitor and review Directorsâ Evaluation framework.
Further, to comply with Regulation 25 (4) of SEBI (LODR) Regulations, Independent Directors also evaluated the performance of Non Independent Directors, Chairman and Board as a body at a separate meeting of Independent Directors.
Meetings of the Board and Committees
The number of meetings of the Board and various Committees of your Company are set out in the Corporate Governance Report which forms part of this report.
The intervening gap between the meetings was within the period prescribed under the provisions of Section 173 of the Act and SEBI (LODR) Regulations.
Remuneration Policy
To comply with the provisions of Section 178 of the Act read with Rules made thereunder and Regulation 19 of SEBI (LODR) Regulations, the Companyâs Remuneration Policy for Directors, Key Managerial Personnel and Senior Management is uploaded on the website of the Company at http://varunpepsi.com/wp-content/ uploads/2016/09/Remuneration-Policy.pdf
Remuneration of Directors, Key Managerial Personnel and Particulars of Employees
The information required to be disclosed in the Boardâs Report pursuant to Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached with this report as Annexure - B.
Statutory Auditors
Members in their 23rd Annual General meeting held on April 17, 2018 appointed M/s. Walker Chandiok & Co. LLP, (Firm Registration Number 001076N/N500013) as Joint Statutory Auditors of the Company to hold office for a period of up to 5 (Five) years i.e. till the conclusion of the 28th AGM of the Company to be held in the Financial Year 2023, subject to ratification by the Members at every AGM of the Company.
Further, Members of the Company in their 22nd Annual General Meeting held on April 17, 2017 appointed M/s. APAS & Co., Chartered Accountants (Firm Registration Number 000340C) as Joint Statutory Auditors of the Company to hold office for a period of up to 5 (five) years i.e. till the conclusion of the 27th AGM of the Company to be held in the Financial Year 2022, subject to ratification by the Members at every AGM of the Company.
Pursuant to the notification issued by the Ministry of Corporate Affairs on May 7, 2018 amending Section 139 of the Companies Act, 2013 and the Rules framed thereunder, the mandatory requirement for ratification of appointment of Auditors by the Members at every AGM has been omitted. Accordingly, the Notice of ensuing AGM does not include the proposal for seeking Members approval for ratification of appointment of Joint Statutory Auditors of the Company.
The Statutory Auditorsâ Report for the Financial Year 2018 does not contain any qualification, reservation or adverse remark.
The Statutory Auditors have not reported any frauds under Section 143(12) of the Act.
Cost Audit
In terms of Section 148 of the Act and the Companies (Cost Records and Audit) Rules, 2014 and any amendment thereto, Cost Audit is not applicable to the Company.
Disclosure Under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
To comply with provisions of Section 134 of the Act and rules made there under, your Company has duly constituted Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
During the year under review, no case was filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Secretarial Auditors
Your Board, on the recommendations of the Audit and Risk Management Committee, has appointed M/s. Sanjay Grover & Associates, Company Secretaries to conduct Secretarial Audit of your Company. The Secretarial Audit Report for the Financial Year 2018 is attached to this report as Annexure - C to this Report and does not contain any qualification, reservation or adverse remark.
Risk Management
Pursuant to the provisions of Regulation 21(5) of SEBI (LODR) Regulations, the top 500 listed entities, determined on the basis of market capitalization, as at the end of the immediate previous financial year shall constitute a Risk Management Committee. Accordingly, during the year under review, your Company has renamed its Audit Committee as Audit and Risk Management Committee and also updated the terms of reference of this Committee to cover provisions related to Risk Management review, as approved by the Board of Directors in their meeting held on August 9, 2018.
Your Company has a robust Risk Management Policy which identifies and evaluates business risks and opportunities. The Company recognize that these risks need to be managed and mitigated to protect the interest of the stakeholders and to achieve business objectives. The risk management framework is aimed at effectively mitigating the Companyâs various business and operational risks, through strategic actions.
Internal Financial Controls
Your Company has in place adequate Internal Financial Controls. The report on the Internal Financial Controls issued by M/s. Walker Chandiok & Co. LLP, Chartered Accountants and M/s. APAS & Co., Chartered Accountants, the Joint Statutory Auditors of the Company is annexed to the Audit Report on the Financial Statements of the Company and does not contain any reportable weakness of the Company.
Corporate Social Responsibility
Your Company has a Corporate Social Responsibility Policy which is uploaded on the website of the Company http://varunpepsi.com/wp-content/uploads/2016/09/ Corporate-Social-Responsibility-Policy.pdf
Annual Report on CSR activities for the Financial Year 2018 as required under Section 134 and 135 of the Act read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Rule 9 of the Companies (Accounts) Rules, 2014 is attached with this report as Annexure - D.
Directorsâ Responsibility Statement
Pursuant to Section 134(3)(c) read with Section 134(5) of the Act, the Directors state:
(a) that in the preparation of the annual accounts for the Financial Year ended December 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) that 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 your Company as at December 31, 2018 and of the profits of the Company for the period ended on that date;
(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;
(d) that the annual accounts have been prepared on a going concern basis;
(e) that proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) that proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.
Other Information
Management Discussion and Analysis Report
Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2)(e) of SEBI (LODR) Regulations, is attached with this report.
Business Responsibility Report
Business Responsibility Report for the year under review, as stipulated under Regulation 34(2)(f) of SEBI (LODR) Regulations, is attached with this report.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3) (m) read with Rule 8 of the Companies (Accounts) Rules, 2014 is attached with this report as Annexure - E.
Corporate Governance
Your Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by Securities and Exchange Board of India. The report on Corporate Governance as stipulated under the SEBI (LODR) Regulations forms an integral part of this Report and the same is attached with this report as Annexure - F. The requisite certificate from M/s. Sanjay Grover & Associates, Company Secretaries confirming compliance with the conditions of corporate governance is also attached with the Corporate Governance Report.
Listing
The Equity Shares of the Company are listed on the trading terminals of the National Stock Exchange of India Limited and BSE Limited.
Both these stock exchanges have nation-wide terminals. The Company has paid the listing fee to both the Stock Exchanges.
Extract of the Annual Return
The details forming part of the extract of the Annual Return in Form No. MGT - 9 in accordance with the provisions of Section 92 of the Act read with the Companies (Management and Administration) Rules, 2014, is attached with this report as Annexure - G.
Research and Development (R&D)
During the year under review, no Research & Development was carried out.
Cautionary Statement
Statements in the Boardâs Report and the Management Discussion & Analysis describing the Companyâs objectives, expectations or forecasts may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the statements.
General
Your Directors confirm that no disclosure or reporting is required in respect of the following items as there was no transaction on these items during the year under review:-
1. I ssue of equity shares with differential voting rights as to dividend, voting or otherwise.
2. The Whole-time Directors of the Company does not receive any remuneration or commission from any of its subsidiaries.
3. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operations in future.
4. Issue of Sweat Equity Shares.
5. The Company is in regular compliance of the applicable provisions of Secretarial Standards issued by the Institute of Company Secretaries of India.
Acknowledgements
Your Companyâs organizational culture upholds professionalism, integrity and continuous improvement across all functions, as well as efficient utilization of the Companyâs resources for sustainable and profitable growth.
Your Directors wish to place on record their appreciation for the sincere services rendered by employees of the Company at all levels. Your Directors also wish to place on record their appreciation for the valuable co-operation and support received from the various Government Authorities, the Banks / Financial Institutions and other stakeholders such as, members, customers and suppliers, among others. Your Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the Companyâs success. Your Directors look forward to their continued support in future.
For and on behalf of the Board of Directors
For Varun Beverages Limited
Place: Gurugram
Date : February 26, 2019 Ravi Kant Jaipuria
Chairman
DIN : 00003668
Dec 31, 2017
Boardâs Report
Dear Members,
The Directors have pleasure in presenting the 23rd (Twenty Third) Annual Report on the business and operations of your Company along with the Audited Financial Statements, for the Financial Year ended December 31, 2017.
FINANCIAL RESULTS
The financial performance of your Company for the Financial Year ended December 31, 2017 is summarized below:
(Rs, in Million)
|
Particulars |
Standalone |
Consolidated |
||
|
Financial Year ended December 31, 2017 |
Financial Year ended December 31, 2016* |
Financial Year ended December 31, 2017 |
Financial Year ended December 31, 2016* |
|
|
Total Revenue |
35,380.90 |
36,262.33 |
45,288.89 |
45,671.94 |
|
Total Expenses |
32,338.97 |
35,120.23 |
42,392.85 |
44,902.37 |
|
Profit before tax |
3,041.93 |
1,142.10 |
2,909.54 |
793.35 |
|
Less: Tax Expenses |
685.95 |
247.13 |
768.95 |
312.96 |
|
Profit after tax |
2,355.98 |
894.97 |
2,101.541 |
423.76** |
|
Balance brought forward from last year |
614.82 |
(74.94) |
(2,007.59) |
(2,225.71) |
|
Balance carried over to Balance Sheet |
2,268.84 |
614.82 |
(594.12) |
(2,007.59) |
|
Debenture Redemption Reserve |
159.17 |
- |
159.17 |
- |
|
General Reserve |
191.25 |
191.25 |
191.25 |
191.25 |
|
Other Reserves |
18,521.80 |
18,738.17 |
16,111.03 |
16,929.16 |
|
Reserves & Surplus carried to Balance Sheet |
21,141.06 |
19,544.24 |
15,867.33 |
15,112.82 |
* The Company has adopted Indian Accounting Standards (Ind AS) with effect from January 01, 2017, pursuant to the notification of Companies (Indian Accounting Standard) Rules, 2015 issued by the Ministry of Corporate Affairs. Previous years'' figures have been restated to comply with Ind AS, accordingly figures at the beginning have been restated.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of your Company for the Financial Year 2017, are prepared in compliance with the applicable provisions of the Companies Act, 2013 ("the Act"), Indian Accounting Standards ("Ind AS") and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ["SEBI (LODR) Regulations"] which shall be placed before the members in their forthcoming Annual General Meeting (AGM).
To comply with Section 129 (3) of the Act, a statement containing the salient features of the Financial Statement of subsidiary/ associate/ joint venture companies is provided as Annexure in Form AOC - 1 to the Consolidated Financial Statement of the Company and therefore not repeated hereby to avoid duplication.
DEPOSITS
Your Company has not accepted any deposits during the year under review, falling within the ambit of Section 73 of the Act and the Companies (Acceptance of Deposits) Rules, 2014.
TRANSFER TO GENERAL RESERVE
During the year under review, the Company has not transferred any amount to General Reserve.
CHANGE IN THE NATURE OF BUSINESS, IF ANY
During the year under review, there was no change in the nature of the business of the Company.
DIVIDEND DISTRIBUTION POLICY
During the year under review, the Board of Directors of the Company in their meeting held on August 9, 2017 approved and adopted a Policy on Distribution of Dividend to comply with Regulation 43A of SEBI (LODR) Regulations and the same is uploaded on the website of the Company at www.varunpepsi.com
DIVIDEND
During the year under review, the Board of Directors of the Company declared an interim dividend of '' 2.50 per Equity Share (face value of '' 10/- per Equity Share) for the year 2017. The Board of Directors do not recommend any final dividend for the Financial Year 2017.
Your Company has transferred the unpaid or unclaimed Interim Dividend to the Unclaimed Dividend Account - Varun Beverages Limited and the details of unpaid and unclaimed dividend amounts lying in the said Account (maintained with HDFC Bank) are uploaded on the website of the Company at www.varunpepsi.com
ACQUISITION GUIDELINES
Your Company applies stringent strategic and financial criteria to any potential acquisition or partnership and to enhance transparency, during the year under review, the Board of Directors of the Company in their meeting held on August 9, 2017 approved and adopted Acquisition Guidelines for the Company''s M&A activities for viable acquisitions in India and the same is uploaded on the website of the Company at www.varunpepsi.com
ACQUISITIONS
During the year under review, your Company has:
- concluded acquisition of PepsiCo India''s previously franchised territories in the State of Odisha and parts of Madhya Pradesh along with two manufacturing units at Bargarh (Odisha) w.e.f. September 26, 2017 and Bhopal (Mandideep, MP) w.e.f. September 27, 2017; and
- concluded acquisition of PepsiCo India''s previously franchised territories in the State of Jharkhand along with a manufacturing unit at Jamshedpur.
After the close of the Financial Year, your Company has:
- concluded the acquisition of PepsiCo India''s previously franchised territory in the State of Chhattisgarh w.e.f. January 11, 2018; and
- acquired franchisee rights of PepsiCo India''s previously franchised territory in the State of Bihar w.e.f. January 17, 2018.
CREDIT RATING
During the year under review, CRISIL has upgraded / re-affirmed your Company''s credit ratings as below:
|
Long-Term Rating |
CRISIL AA-/Stable (Upgraded from ''CRISIL A /Positive'') |
|
Short-Term Rating |
CRISIL A1 (Reaffirmed) |
|
'' 300 Crore NonConvertible Debentures |
CRISIL AA-/Stable (Upgraded from ''CRISIL A /Positive'') |
|
'' 250 Crore Commercial Paper Programme |
CRISIL A1 (Reaffirmed) |
SHARE CAPITAL
The Authorized Share Capital of the Company is Rs, 10,000,000,000/- (Rupees Ten Thousand Million only) divided into 500,000,000 (Five Hundred Million) equity shares of Rs, 10/-(Rupees Ten) each and 50,000,000 (Fifty Million) Preference Shares of Rs, 100/- (Rupees Hundred) each. During the year under review, there is no change in the Authorized Share Capital of the Company.
During the year under review, the paid up capital of the Company has been increased from Rs, 1,823,125,250/- (Rupees One Billion Eight Hundred and Twenty-Three Million One Hundred and Twenty-Five Thousand Two Hundred Fifty) to Rs, 1,825,869,400/-(Rupees One Billion Eight Hundred and Twenty-Five Million Eight Hundred and Sixty-Nine Thousand Four Hundred) due to exercise of 274,415 Stock Options (equivalent to 274,41 5 equity shares having face value of Rs, 10 each) under Varun Beverages Limited Employee Stock Option Scheme 2013.
EMPLOYEE STOCK OPTION SCHEMES
Your Company has two Employee Stock Option Schemes viz. Varun Beverages Limited Employee Stock Option Scheme 2013 and Varun Beverages Limited Employee Stock Option Scheme
2016 and the same are in line with the provisions of SEBI (Share Based Employee Benefits) Regulations, 2014.
Your Company has received a certificate from the Statutory Auditors of the Company that these Schemes have been implemented in accordance with the SEBI (Share Based Employee Benefits) Regulations, 2014 and the resolution(s) passed by the Members of the Company. The certificate would be placed at the ensuing AGM for inspection by Members of the Company.
Relevant disclosures pursuant to Rule 12 (9) of the Companies (Share Capital and Debentures) Rules, 2014 and Regulation 14 of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and the same is attached to this report as Annexure - A.
NON-CONVERTIBLE DEBENTURES
During the year under review, your Company has issued and allotted 3,000 Rated, Listed, Secured, Redeemable Non-convertible Debentures (NCDs) aggregating up to Rs, 3,000,000,000 (Rupees Three Billion) issued under ISIN INE200M07044 and listed on the National Stock Exchange of India Limited. Scrip code of the NCDs is VBL-22. Axis Trustee Services Limited has been appointed as the Debenture Trustee for the aforesaid Debentures and their contact details are as under:
Axis House, Ground Floor, Wadia International Centre, Pandurang Budhkar Marg, Worli, Mumbai- 400025 Contact: 022-62260054/50 E-mail: debenturetrustee@axistrustee.com
RELATED PARTY TRANSACTIONS
To comply with the provisions of Section 188 of the Act and Rules made thereunder read with Regulation 23 of SEBI (LODR) Regulations, your Company took necessary prior approval of the Audit Committee before entering into related party transactions. All contracts / arrangements / transactions entered into by the Company with related parties, as defined under the Act and SEBI (LODR) Regulations during the Financial Year 2017, were in the ordinary course of business and on arm''s length basis.
During the year under review, your Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the Policy of the Company for Related Party Transactions.
None of the transactions with any of the related parties were in conflict with the interest of the Company rather, these were synchronised and synergised with the Company''s operations. Attention of Members is drawn to the disclosure of transactions with the related parties set out in Note no. 44 of the Standalone Financial Statements, forming part of the Annual Report.
Your Company has framed a Policy on Related Party Transactions in accordance with SEBI (LODR) Regulations and as per the amended provisions of the Act. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and related parties. The policy is uploaded on the website of the Company at http://varunpepsi.com/wp-content/ uploads/2016/09/Policy-On-Related-Party-Transactions.pdf
Since all transactions which were entered into during the Financial Year 2017 were on arm''s length basis and in the ordinary course of business and there was no material related party transaction entered by the Company during the Financial Year 2017 as per Related Party Transactions Policy, hence no detail is required to be provided in Form AOC-2 prescribed under Clause (h) of Sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees, Securities and Investments covered under the provisions of Section 186 of the Act are given in the Notes to the Standalone Financial Statements.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
Your Company has following subsidiaries / associate companies:
Subsidiaries
- Varun Beverages (Nepal) Private Limited;
- Varun Beverages Morocco SA;
- Varun Beverages Lanka (Private) Limited;
- Ole Springs Bottlers (Private) Limited (step-down subsidiary);
- Varun Beverages (Zambia) Limited; and
- Varun Beverages (Zimbabwe) (Private) Limited.
Associate Company
- Angelica Technologies Private Limited
During the year under review, your Company has increased its shareholding in Varun Beverages (Zambia) Limited from 60% to 90%. Further, your Company has divested its 41% stake in Varun Beverages Mozambique Limitada, consequently, Varun Beverages Mozambique Limitada ceased to be the subsidiary of the Company.
After close of the year under review, Varun Beverages (Zimbabwe) (Private) Limited, a subsidiary of the Company established a green field production facility in Zimbabwe for selling and distributing PepsiCo''s products. Commercial production and operations of the unit commenced on February 19, 2018.
To comply with provisions of Section 129 of the Act a separate statement containing salient features of Financial Statements of Subsidiaries, Associates and Joint Ventures of your Company forms part of Consolidated Financial Statements.
Financial Statements of the aforesaid subsidiary companies are kept open for inspection by the Members at the Registered Office of your Company during business hours on all days except Saturday & Sunday up to the date of the AGM as required under Section 136 of the Act. Any Member desirous of obtaining a copy of the said Financial Statements may write to the Company at its Registered Office or Corporate Office. The Financial Statements including the Consolidated Financial Statements and all other documents required to be attached to this Report have been uploaded on the website of the Company at www.varunpepsi.com
To comply with the provisions of Regulation 16(c) of SEBI (LODR) Regulations, the Board of Directors of the Company have approved and adopted a Policy for determining Material Subsidiary and as on December 31, 2017 none of the subsidiary is a Material Subsidiary of the Company in terms of the said policy. The policy on Material Subsidiary has been uploaded on the website of the Company at http://varunpepsi.com/wp content/uploads/2016/09/Policy-For-Determination-Of-Material-Subsidiary-And-Governance-Of-Subsidiaries.pdf
DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointments
Mr. Pradeep Sardana (DIN 00682961), was appointed as an Independent Director of the Company for a period of two years with effect from March 28, 2016. Accordingly, his first term of office is expiring on March 27, 2018. Pursuant to the provisions of Section 161 of the Act and based on the performance evaluation of Independent Directors and on the recommendations of the Nomination and Remuneration Committee, the Board of Directors in their meeting held on February 16, 2018 re-appointed Mr. Pradeep Sardana as an Independent Director of the Company (subject to the approval of members by a special resolution) with effect from March 28, 2018 for a period of upto 5 (Five) years. A notice has been received from a member of the Company proposing his candidature for being appointed as an Independent Director of the Company.
Mr. Pradeep Sardana, being eligible and offering himself for reappointment, is proposed to be appointed as an Independent Director for a second term of upto 5 (Five) years with effect from March 28, 2018.
Further, based on the recommendations of the Nomination and Remuneration Committee, the Board of Directors have approved the appointment [subject to the approval of members by ordinary resolution(s)] of Ms. Sita Khosla (DIN : 01001803) w.e.f February 16, 2018, Dr. Ravi Gupta (DIN: 00023487) and Ms. Rashmi Dhariwal (DIN: 00337814) w.e.f March 19, 2018 as Additional Independent Directors of the Company to hold office for a period of upto 5 (Five) years.
Accordingly, Ms. Sita Khosla Dr. Ravi Gupta and Ms. Rashmi Dhariwal, would hold office up to the date of the ensuing AGM. In terms of Section 149 and other relevant provisions of the Act, Ms. Sita Khosla, Dr. Ravi Gupta and Ms. Rashmi Dhariwal, being eligible and offering themselves for appointment, are proposed to be appointed as Independent Directors for a period up to 5 (Five) years. Notice(s) proposing their candidatures under Section 160 of the Act, have been received from a Member of the Company.
Your Company has received necessary declarations from each of the Independent Directors that he / she meets the criteria of independence as laid down under Section 149 of the Act read with Schedule IV and Rules made there under, as well as SEBI (LODR) Regulations. The Board considered the independence of each of the Independent Directors in terms of above mentioned provisions and is of the view that they fulfill / meet the criteria of independence and accordingly, recommends the appointments of all the above-mentioned Directors.
To comply with the provisions of Section 152 of the Act and in terms of the Articles of Association of the Company, Mr. Ravi Kant Jaipuria, Non-Executive Director & Chairman and Mr. Raj Pal Gandhi, Whole-time Director are liable to retire by rotation at the ensuing AGM and being eligible, seeks re-appointment. Your Board of Directors recommend their re-appointment.
Resignations
To comply with the provisions of Section 149(11) of the Act and Regulation 25(2) of SEBI (LODR) Regulations, Dr. Girish Ahuja and Mr. Ravindra Dhariwal ceased to be the Directors w.e.f. March 19, 2018, due to completion of their second tenure as Independent Directors of the Company.
Further, Ms. Geeta Kapoor and Mr. Sanjoy Mukerji resigned from directorship w.e.f. March 19, 2018 as their second tenure is expiring on April 26, 2018 as Independent Directors of the Company.
Key Managerial Personnel
Mr. Kapil Agarwal, Whole-time Director & Chief Executive Officer and Mr. Kamlesh Kumar Jain, Whole-time Director & Chief Financial Officer of the Company continued to be the Key Managerial Personnel of your Company in accordance with the provisions of Section 203 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
During the year under review, Mr. Mahavir Prasad Garg, Company Secretary & Compliance Officer resigned and Mr. Ravi Batra was appointed as Company Secretary & Compliance Officer (designated as Chief Risk Officer & Group Company Secretary) of the Company with effect from May 12, 2017 and also designated as one of the Key Managerial Personnel of the Company in terms Section 203 of the Act. read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
BOARD EVALUATION
To comply with the provisions of Section 134(3)(p) of the Act and the rules made there under, and Regulation 17(10) of SEBI (LODR) Regulations, the Board has carried out the annual performance evaluation of the Directors individually including the Independent Directors (wherein the concerned director being evaluated did not participate), Board as a whole, and following Committees of the Board of Directors:
i) Audit Committee;
ii) Nomination and Remuneration Committee;
iii) Stakeholders'' Relationship Committee; and
iv) Corporate Social Responsibility Committee.
The manner in which the annual performance evaluation has been carried out is explained in the Corporate Governance Report which forms part of this report. Board is responsible to monitor and review Directors'' Evaluation framework.
Further, to comply with Regulation 25(4) of SEBI (LODR) Regulations, Independent Directors also evaluated the performance of Non Independent Directors, Chairman and Board as a body at a separate meeting of Independent Directors.
MEETINGS OF THE BOARD AND COMMITTEES
The number of meetings of the Board and various Committees of your Company are set out in the Corporate Governance Report which forms part of this report. The intervening gap between the meetings was within the period prescribed under the provisions of Section 173 of the Act and SEBI (LODR) Regulations.
REMUNERATION POLICY
To comply with the provisions of Section 178 of the Act read with Rules made thereunder and Regulation 19 of SEBI (LODR) Regulations, the Company''s Remuneration Policy for Directors, Key Managerial Personnel and Senior Management is uploaded on the website of the Company at www.varunpepsi.com
REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES
The information required to be disclosed in the Board''s Report pursuant to Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached to this report as Annexure - B.
STATUTORY AUDITORS
In terms of Section 139 of the Act and the rules made there under, M/s Walker Chandiok & Associates, Chartered Accountants was appointed as Joint Statutory Auditors of the Company for a term of 2 (Two) years by the members at their meeting held on May 30, 2016 to hold office until the conclusion of 23rd AGM of the Company scheduled on April 17, 2018.
Your Board, based on the recommendations received from the Audit Committee, recommended the appointment of M/s. Walker Chandiok & Co. LLP, (Firm Registration Number 001076N/N500013) as Joint Statutory Auditors of the Company to hold office for a term of up to 5 (Five) years from the conclusion of 23rd AGM until the conclusion of the 28th AGM of the Company to be held in the Financial Year 2023, subject to ratification by the members at every AGM of the Company.
Members of the Company in their 22nd AGM held on April 17,
2017 appointed M/s. APAS & Co., Chartered Accountants (Firm Registration Number 000340C) as Joint Statutory Auditors of the Company to hold office for a period of 5 (Five) years i.e. till the conclusion of the 27th AGM of the Company to be held in the Financial Year 2022, subject to ratification by the Members at every AGM.
Your Company has received letters from M/s. Walker Chandiok & Co. LLP, Chartered Accountants and M/s APAS & Co., Chartered Accountants to the effect that their appointment, if made/ ratified, would be in accordance with the provisions of the Act and the Companies (Audit and Auditors) Rules, 2014. The Board of Directors in their meeting held on February 16, 2018 recommended appointment / ratification of their appointment.
The Statutory Auditors'' Report for the Financial Year 2017 does not contain any qualification, reservation or adverse remarks.
COST AUDIT
In terms of Section 148 of the Act and the Companies (Cost Records and Audit) Rules, 2014 and any amendment thereto, Cost Audit is not applicable to the Company.
SECRETARIAL AUDITORS
Your Board, on the recommendation of the Audit Committee, has appointed M/s. Sanjay Grover & Associates, Company Secretaries to conduct the Secretarial Audit of your Company. The Secretarial Audit Report for the Financial Year 2017 is attached to this report as ''Annexure - C''. The observation contained in the audit report is self-explanatory and does not call for any further comments.
RISK MANAGEMENT
Your Company has a robust Risk Management Policy which identifies and evaluates business risks and opportunities. The Company recognize that these risks need to be managed and mitigated to protect the interest of the stakeholders and to achieve business objectives. The risk management framework is aimed at effectively mitigating the Company''s various business and operational risks, through strategic actions.
INTERNAL FINANCIAL CONTROLS
Your Company has in place adequate Internal Financial Controls. The report on the Internal Financial Controls issued by M/s. Walker Chandiok & Associates, Chartered Accountants and M/s. APAS & Co., Chartered Accountants, the Joint Statutory Auditors of the Company is attached to the Audit Report on the Financial Statements of the Company and does not contain any reportable weakness of the Company.
TRAINING PROGRAM ON FOREIGN CORRUPT PRACTICES ACT (FCPA)
Your Company strive to meet the highest standards of ethical and legal practice and part of that promise is to provide ourselves with ongoing education to face fast-moving challenges in law and regulation and commercial practice. Accordingly, during the year under review, your Company organized training session on FCPA to help Employees and Board of Directors of the Company to enable them to understand, identify, address and resolve some of the toughest compliance issues.
REPORT OF THE MONITORING AGENCY ON UTILIZATION OF INITIAL PUBLIC OFFERING (IPO) PROCEEDS
To comply with Regulation 32 of SEBI (LODR) Regulations, during the year under review, report on utilization of IPO proceeds was issued by Yes Bank Limited (Monitoring Agency) confirming that funds raised through IPO have been fully utilized in consistent with the objects to the offer as defined under the IPO documents filed with the Securities and Exchange Board of India (SEBI).
CORPORATE SOCIAL RESPONSIBILITY
The composition, role, functions and powers of the Corporate Social Responsibility (CSR) Committee of the Company are in accordance with the requirements of the Companies Act, 2013. As on December 31, 2017 the CSR Committee comprises of Mr. Ravi Kant Jaipuria as Chairman, Mr. Raj Pal Gandhi (Whole-time Director) and Mr. Ravindra Dhariwal (Independent Director) as members of the Committee.
After close of the year under review and consequent to the resignation of Mr. Ravindra Dhariwal, the Committee was reconstituted as follows with the following members w.e.f March 19, 2018:
|
Sl. No. |
Name |
Category |
Designation |
|
1. |
Mr. Ravi Kant Jaipuria |
Non-Executive Director |
Chairman |
|
2. |
Mr. Raj Pal Gandhi |
Executive Director |
Member |
|
3. |
Ms. Rashmi Dhariwal |
Independent Director |
Member |
Your Company has a Corporate Social Responsibility Policy which is uploaded on the website of the Company at www.varunpepsi.com
Annual Report on CSR activities for the Financial Year 2017 as required under Section 134 and 135 of the Act read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Rule 9 of the Companies (Accounts) Rules, 2014 is attached to this Report as Annexure - D.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) read with Section 134(5) of the Act, the Directors state:
(a) that in the preparation of the annual accounts for the Financial Year ended December 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) that 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 your Company as at December 31, 2017 and of the profits of the Company for the period ended on that date;
(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;
(d) that the annual accounts have been prepared on a going concern basis;
(e) that proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) that proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.
OTHER INFORMATION
Management Discussion and Analysis Report
Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2)(e) of SEBI (LODR) Regulations, is attached with this report.
Business Responsibility Report
Business Responsibility Report for the year under review, as stipulated under Regulation 34(2)(f) of SEBI (LODR) Regulations, is attached with this report.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) read with Rule 8 of the Companies (Accounts) Rules, 2014 is attached to this report as Annexure - E.
Corporate Governance
Your Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The report on Corporate Governance as stipulated under the SEBI (LODR) Regulations forms an integral part of this Report and the same is attached to this report as Annexure - F. The requisite certificate from M/s. Sanjay Grover & Associates, Company Secretaries confirming compliance with the conditions of corporate governance is also attached with the Corporate Governance Report.
Listing
The Equity Shares of the Company are listed on the trading terminals of the National Stock Exchange of India Limited and BSE Limited.
Both these stock exchanges have nation-wide terminals. The Company has paid the listing fee to both the Stock Exchanges.
Extract of the Annual Return
The details forming part of the extract of the Annual Return in Form No. MGT - 9 in accordance with the provisions of Section 92 of the Act read with the Companies (Management and Administration) Rules, 2014, is attached to this report as Annexure - G.
Research and Development (R&D)
During the year under review, no Research & Development was carried out.
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 laws and regulations. Actual results may differ materially from those expressed in the statements.
GENERAL
Your Directors confirm that no disclosure or reporting is required in respect of the following items as there was no transaction on these items during the year under review:-
1. Issue of equity shares with differential voting rights as to dividend, voting or otherwise.
2. The Whole-time Directors of the Company does not receive any remuneration or commission from any of its subsidiaries.
3. 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.
4. Issue of Sweat Equity Shares.
5. No case was filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
6. The Company is in regular compliance of the applicable provisions of Secretarial Standards issued by the Institute of Company Secretaries of India.
ACKNOWLEDGEMENTS
Your Company''s organizational culture upholds professionalism, integrity and continuous improvement across all functions, as well as efficient utilization of the Company''s resources for sustainable and profitable growth.
Your Directors wish to place on record their appreciation for the sincere services rendered by employees of the Company at all levels. Your Directors also wish to place on record their appreciation for the valuable co-operation and support received from the various Government Authorities, the Banks / Financial Institutions and other stakeholders such as, members, customers and suppliers, among others. Your Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the Company''s success. Your Directors look forward to their continued support in future.
For and on behalf of the Board of Directors
For Varun Beverages Limited
Place : Gurugram
Date : March 19, 2018 Ravi Kant Jaipuria
Chairman
DIN : 00003668
Dec 31, 2016
Dear Members,
The Directors have pleasure in presenting the 22nd Annual Report on the business and operations of your Company along with the Audited Financial Statements, for the Financial Year ended December 31, 2016.
FINANCIAL RESULTS
The financial performance of your Company for the Financial Year ended December 31, 2016 is summarized below:
(Rs.in Million)
|
Particulars |
Standalone |
consolidated |
||
|
Financial |
Financial |
Financial |
Financial |
|
|
Year ended |
Year ended |
Year ended |
Year ended |
|
|
31.12.2016 |
31.12.2015 |
31.12.2016 |
31.12.2015 |
|
|
Total Revenue |
30,193.81 |
29,104.25 |
38,867.85 |
34,084.30 |
|
Total Expenses |
27,564.19 |
26,904.91 |
36,439.49 |
32,432.73 |
|
Profit before tax after prior period items |
2,629.62 |
2,189.55 |
2,428.36 |
1,906.09 |
|
Less: Tax Expenses |
762.28 |
673.08 |
828.50 |
788.57 |
|
Profit after tax |
1,867.34 |
1,516.47 |
1,512.56* |
1,130.42* |
|
Balance brought forward from last year |
2,094.47 |
597.96 |
364.56 |
(745.90) |
|
Balance carried over to Balance Sheet |
3,790.52 |
2,094.47 |
1,705.83 |
364.56 |
|
Debenture Redemption Reserve |
- |
19.96 |
- |
19.96 |
|
General Reserve |
191.25 |
- |
191.25 |
- |
|
Other Reserves |
15,613.82 |
652.12 |
15,218.46 |
520.59 |
|
Reserves & Surplus carried to Balance Sheet |
19,595.59 |
2,766.55 |
17,115.54 |
905.11 |
* Including adjustment on account of minority interest and share profit of associate.
CHANGE IN THE NATURE OF BUSINESS, IF ANY
During the year under review, there was no change in the nature of the business of the Company.
dividend
The Board of Directors of your Company have decided to retain the profits for further expansions / acquisitions and hence do not recommend any Dividend for the year under review.
credit rating
During the year under view, CRISIL has upgraded your Company''s credit ratings from CRISIL A/Positive to CRISIL A / Positive for long term debt, CRISIL A1 to CRISIL A1 for short term debt and for commercial paper.
consolidated financial STATEMENTS
The Consolidated Financial Statements of your Company for the Financial Year 2016, are prepared in compliance with the applicable provisions of the Companies Act, 2013, Accounting Standards and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 {SEBI (LODR)} which shall be placed before the members in their forthcoming Annual General Meeting.
In accordance with Section 129 (3) of the Companies Act, 2013, a statement containing the salient features of the financial statement of subsidiary/ associate/ joint venture companies is provided as Annexure in Form AOC - 1 to the consolidated financial statement and therefore not repeated to avoid duplication.
share capital
The Authorized Share Capital of the Company is Rs.10,000,000,000/- (Rupees Ten Thousand Million only) divided into 500,000,000 (Five Hundred Million) equity shares of Rs.10/-(Rupees Ten) each and 50,000,000 (Fifty Million) Preference Shares of Rs.100/- (Rupees Hundred) each. During the year under review, the paid up capital of the Company has increased from Rs.5837,661,650 to Rs.1823,125,250 due to the following:
- Exercise of 2,264,700 Employee Stock Options under ES0S-2013;
- Allotment of 21,054,387 equity shares towards conversion of 4,149,980 Compulsorily Convertible Debentures;
- Allotment of 10,227,273 equity shares towards conversion of 45,000,000 Compulsorily Convertible Preference Shares; and
- Allotment of 15,000,000 equity shares under Initial Public Offering.
EMPLOYEE STOCK OPTION SCHEME
Your Company has two Employee Stock Option Schemes. Relevant disclosures pursuant to Rule 12 (9) of Companies (Share Capital and Debentures) Rules, 2014 and the Regulations 14 of Securities and Exchange Board of India (Share Based Employee Benefits) Regulation, 2014 and the Companies Act, 2013 are given as Annexure - A to this report.
NON-CONVERTIBLE DEBENTURES
During the year under review, your Company has redeemed its Rated, Listed, Secured, Redeemable Non-convertible Debentures aggregating to Rs.2,000,000,000 (Rupees Two Billion) issued under ISIN INE200M07036 as well as it Rated, Unsecured, Listed Redeemable, Rupee Denominated Nonconvertible Debentures aggregating to Rs.3,000,000,000 (Rupees Three Billion) issued under ISIN INE200M08042.
DEPOSITS
The Company has not accepted any deposits during the year under report, falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
related party transactions
All transactions entered into with related parties as defined under the Companies Act, 2013 and SEBI (LODR) during the financial year were in the ordinary course of business and at arm''s length basis. As per the provisions of Section 188 of the Companies Act, 2013, and Rules made there under read with Regulation 23 of SEBI (LODR), your Company had obtained the necessary approval of the Audit Committee under omnibus approval route before entering into such transactions.
None of the transactions with any of the related parties were in conflict with the interest of the Company rather, they synchronize and synergies with the Company''s operations. Attention of members is drawn to the disclosure of transactions with the related parties set out in Note no. 44 of the Standalone Financial Statements, forming part of the Annual Report.
The Company''s major related party transactions are generally with its subsidiaries. These transactions are entered into based on consideration of various business exigencies, such as synergy in operations, sectoral specialization, liquidity and capital resource of subsidiaries and all such transactions are at arm''s length basis.
Your Company has framed a Policy on Related Party Transactions in accordance with SEBI (LODR) and as per the amended provisions of the Companies Act, 2013. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and related parties. The policy is uploaded at the below web link: http://varunpepsi.com/policies/
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees, Securities and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to Financial Statements.
subsidiaries, associates and joint ventures
Your Company follows its global ambition to become the most successful and profitable Beverage Company in the world having market leadership in the territories we operate. It has created multiple subsidiaries and associate for facilitating these operations in various countries. A separate statement containing salient features of Financial Statements of Subsidiaries, Associate and Joint Ventures of your Company forms part of Consolidated Financial Statements in terms of Section 129 of the Companies Act, 2013. The Company has following:
Subsidiaries
- Varun Beverages (Nepal) Private Limited;
- Varun Beverages Morocco SA;
- Varun Beverages Lanka (Private) Limited;
- Ole Springs Bottlers (Private) Limited (step-down subsidiary)
- Varun Beverages Mozambique Limitada;
- Varun Beverages (Zambia) Limited; and
- Varun Beverages (Zimbabwe) (Private) Limited
Associate company
- Angelica Technologies Private Limited
The Financial Statements of the above companies are kept open for inspection by the shareholders at the Registered Office of your Company during business hours on all days except Saturdays, Sundays and public holidays up to the date of the Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013. Any member desirous of obtaining a copy of the said financial statements may write to the Company at its Registered Office or Corporate Office. The financial statements including the consolidated financial statements and all other documents required to be attached to this report have been uploaded on the website of your Company viz. www.varunpepsi.com
Your Company has framed a policy for determining "Material Subsidiary" in terms of Regulation 16(c) of SEBI (LODR). As on December 31, 2016, none of the subsidiary is a Material Subsidiary of the Company in terms of the said policy. The policy on Material Subsidiary has been uploaded on the Company''s website http://varunpepsi.com/wp-content/uploads/2016/09/ Policy-For-Determination-Of-Material-Subsidiary-And-Governance-Of-Subsidiaries.pdf
DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTMENTS
During the year under review, the Board of Directors in its meetings held on March 28, 2016 appointed Mr. Pradeep Sardana and on April 27, 2016 appointed Mr. Sanjoy Mukerji and Mrs. Geeta Kapoor as Additional Non-executive Independent Directors. Subsequently, the Shareholders of the Company in their Extra-ordinary General Meeting held on April 27, 2016 approved their appointments as Non-executive Independent Directors of the Company.
Key Managerial Personnel
Mr. Kapil Agarwal, Whole-time Director, Mr. Kamlesh Kumar Jain, Whole-time Director & Chief Financial Officer and Mr. Mahavir Prasad Garg, Company Secretary & Compliance Officer of the Company continue to be the Key Managerial Personnel of your Company in accordance with the provisions of Section 2 (51) and Section 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
Resignations
Mr. Christopher White resigned from the position of Whole-time Director with effect from March 28, 2016, Mrs. Devyani Jaipuria and Mr. Parth Dasharathlal Gandhi resigned from the position of Non-Executive Director and Non-executive Nominee Director of the Company respectively, with effect from April 27, 2016.
Your Directors would like to record their deep sense of appreciation for the enormous contributions made by them during their respective tenures.
Retirement by Rotation
In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms of the Articles of Association of the Company, Mr. Kapil Agarwal, Whole-time Director is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, seeks re-appointment. Your Board of Directors recommends his re-appointment.
BOARD EVALUATION
Pursuant to the provisions of Section 134 (3) (p) of the Companies Act, 2013 and the rules made there under, the Board was required to carry out the Annual Performance Evaluation of the Board, its Committees and individual Directors. Additionally, as per provision of Regulation 17 (10) of SEBI (LODR) the performance evaluation of the independent directors was also to be done by the Board of Directors. Accordingly, the Board has carried out the annual evaluation of the Directors individually including the Independent Directors (wherein the concerned director being evaluated did not participate), Board as a whole, and following Committees of the Board of Directors.
i) Audit Committee;
ii) Nomination and Remuneration Committee;
iii) Stakeholders'' Relationship Committee;
iv) Corporate Social Responsibility Committee; and
v) Share Allotment Committee
The manner in which the evaluation has been carried out is explained in the Corporate Governance Report. The Board approved the evaluation results recommended by the Nomination and Remuneration Committee.
MEETINGS OF THE BOARD AND COMMITTEES
The number of Meetings of the Board and various Committees of your Company are set out in the Corporate Governance Report which forms part of this report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and SEBI (LODR), as applicable.
DECLARATION BY INDEPENDENT DIRECTORS
Your Company has received necessary declarations from each Independent Director that he / she meets the criteria of independence as laid down under the Companies Act, 2013 read with Schedule IV and Rules made there under, as well as SEBI (LODR). The Board considered the independence of each of the Independent Directors in terms of above provisions and is of the view that they fulfill / meet the criteria of independence.
remuneration policy
In accordance with the provisions of Section 178 of the Companies Act, 2013 read with Rules made there under and SEBI (LODR), the Company''s policy on Nomination and Remuneration of Directors, KMPs and Senior Management is uploaded on the website of the Company http://varunpepsi.com/policies/
Remuneration of Directors, Key Managerial Personnel and Particulars of Employees
The information required to be disclosed in the Board''s Report pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is set out in the Annexure - B to this report.
STATUTORY AUDITORS
In terms of Section 139 of the Companies Act, 2013 and the rules made there under, M/s Walker Chandiok & Associates, Chartered Accountants were appointed as the joint Statutory Auditors of the Company for a period of two years i.e. upto 31st December, 2017, subject to ratification by the members of the Company at every Annual General Meeting.
M/s. O.P. Bagla & Co., Chartered Accountants has completed the tenure as permissible under the Companies Act, 2013. Therefore, your Board, based on the recommendation received from the Audit Committee, recommends the appointment of M/s. APAS & Co., Chartered Accountants as the joint Statutory Auditors of the Company to hold office for a period of five years from the conclusion of this Annual General Meeting until the conclusion of the 27th Annual General Meeting i.e. till the financial year ended 31st December, 2021 subject to ratification by the Shareholders at every Annual General Meeting.
The Company has received a letter from M/s. APAS & Co., Chartered Accountants and M/s Walker Chandiok & Associates, Chartered Accountants to the effect that their appointment, if made / ratified, would be in accordance with the provisions of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014. Your Directors recommend appointment / ratification of their re-appointment.
The Auditors'' Report for the financial year 2016 does not contain any qualification, reservation or adverse remarks.
COST AUDIT
In terms of Section 148 of the Companies Act, 2013 and Companies (Cost Records and Audit) Rules, 2014 and any amendment thereto, the Cost Audit is not applicable to the Company.
secretarial auditors
Your Board, on the recommendation of the Audit Committee, has appointed M/s. Sanjay Grover & Associates, Company Secretaries to conduct the Secretarial Audit of your Company. The Secretarial Audit Report is annexed herewith as Annexure - c to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
RISK management
The Company has in place a robust risk management policy which identifies and evaluates business risks and opportunities. The Company recognizes that these risks need to be managed and mitigated to protect the interest of the stakeholders, to achieve business objectives and enable sustainable growth. The risk management framework is aimed at effectively mitigating the Company''s various business and operational risks, through strategic actions. The risks are reviewed for the change in the nature and extent of the major risks identified since the last assessment. It also provides control measures for risk and future action plans.
An extensive program of internal audits and regular reviews by the Audit Committee is carried out to ensure compliance with the best practices.
INTERNAL FINANCIAL OONTROLS
The Company has in place adequate Internal Financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The report on the Internal Financial Control issued by M/s. O.P. Bagla & Co., Chartered Accountants and M/s. Walker Chandiok & Associates, Chartered Accountants, the Joint Statutory Auditors of the Company in view of the provisions under the Companies Act, 2013 is given elsewhere in this report.
corporate social RESPONSIBILITY
The Corporate Social Responsibility (CSR) Committee of the Company has been re-constituted on April 27, 2016, whose composition, role, functions and powers are in accordance with the requirements of the Companies Act, 2013. Presently, the CSR Committee comprises of Mr. Ravi Kant Jaipuria as Chairman, Mr. Raj Pal Gandhi (Whole-time Director) and Mr. Ravindra Dhariwal (Independent Director) as members of the Committee.
The CSR Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy which is available at http://varunpepsi.com/policies/
The Company has identified promoting health, education of underprivileged children and conservation of water (by undertaking the recharge to groundwater in such a way so as to exceed the limits stipulated by the Central Ground Water Authority), as area of engagement. The Company would also initiate need based initiatives in compliance with Schedule VII to the Act. During the year, the Company has spent Rs.10.69 Million on CSR Activities.
The Annual Report on the Corporate Social Responsibility (CSR) activities for the Financial Year 2016 as required under Section 134 and 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Rule 9 of the Companies (Accounts) Rules, 2014 is attached to this Report as Annexure - D.
directors'' RESPONSIBILITY STATEMENT
Pursuant to Section 134 (3) (c) read with Section 134 (5) of the Companies Act, 2013, the Directors state:
(a) that in the preparation of the annual accounts for the year ended December 31, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) that 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 your Company as at December 31, 2016 and of the profits of the Company for the year ended on that date;
(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;
(d) that the annual accounts have been prepared on a going concern basis;
(e) that proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) that proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.
other information
Management Discussion and Analysis Report
Management Discussion and Analysis Report for the year under review, as stipulated under the Companies Act, 2013 and SEBI (LODR) is given elsewhere in the report.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 (3) (m) read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as Annexure - E to this Report.
Corporate Governance
Your Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by Securities and Exchange Board of India. The Company has also implemented several best corporate governance practices as prevalent globally. The report on Corporate Governance as stipulated under the SEBI (LODR) forms an integral part of this Report and the same is annexed herewith as Annexure - F to this Report. The requisite certificate from M/s. O.P. Bagla & Co., joint Statutory Auditors of the Company confirming compliance with the conditions of corporate governance is also annexed to the Corporate Governance Report.
Listing
The Board of Directors of your Company have pleasure in informing that during the year under review, your Company successfully floated its Initial Public Offer (IPO) for 25,000,000 equity shares consisting of fresh issue of 1 5,000,000 equity shares and an offer for sale of 1 0,000,000 equity shares from the promoter shareholders of the Company. The IPO was a success and consequent to that, the equity shares of the Company were admitted to listing on the trading terminals of the National Stock Exchange of India Limited and the BSE Limited with effect from November 8, 2016.
Both these stock exchanges have nation-wide terminals and therefore, shareholders/Investors are not facing any difficulty in trading in the shares of the Company from any part of the country. The Company has paid the listing fees to both the Stock Exchanges.
Extract of the Annual Return
The details forming part of the extract of the Annual Return in Form No. MGT - 9 in accordance with the provisions of Section 92 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, are set out herewith as Annexure - G to this Report.
Research and Development (R&D)
During the year under review, no Research & Development was carried out.
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.
GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transaction on these items during the year under review:-
1. Issue of equity shares with differential voting rights as to dividend, voting or otherwise.
2. The Whole-time Director of the Company does not receive any remuneration or commission from any of its subsidiaries.
3. 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.
4. Sweat Equity Shares.
5. No cases were filed pursuant to Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Acknowledgements
Your Company''s organizational culture upholds professionalism, integrity and continuous improvement across all functions, as well as efficient utilization of the Company''s resources for sustainable and profitable growth.
The Directors wish to place on record their appreciation for the sincere services rendered by employees of the Company at all levels. Your Directors also wish to place on record their appreciation for the valuable co-operation and support received from the Government of India, various State Governments, the Banks / Financial Institutions and other stakeholders such as, shareholders, customers and suppliers, among others. The Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the Company''s success. The Directors look forward to their continued support in future.
For and on behalf of the Board of Directors
For varun Beverages Limited
Ravi Kant Jaipuria
Place : Gurugram Chairman
Date : February 20, 2017 DIN : 00003668
Dec 31, 2015
DIRECTORSâ REPORT
The Members,
Varun Beverages Limited
The Directors have pleasure in presenting the 21st Annual Report on the business and operations of the Company together with the Audited Financials of the Company for the year ended 31st December, 2015.
FINANCIAL PERFORMANCE
The Company had been granted approval by the Company Law Board, New Delhi Bench to maintain the calendar year i.e. 1st January to 31st December as its Financial Year for 2015 and for all subsequent years under Section 2 (41) of the Companies Act, 2013 vide its order dated 15th December, 2015. Accordingly, the Company closed its Financial Year on 31st December, 2015.
The Companyâs financial performance for the year ended 31st December, 2015 is summarized below:
Standalone Financial Summary (Rs, in Millions)
|
Particulars |
Year ended 31 December 2015 |
Year ended 31 December 2014 |
|
Total Revenue |
29,104.25 |
20,631.20 |
|
Total Expenses |
26,904.91 |
20,118.63 |
|
Profit before tax after prior period items |
2,189.55 |
512.57 |
|
Less: Tax Expenses |
673.08 |
79.04 |
|
Profit after tax |
1,516.47 |
433.53 |
|
Balance brought forward from last year |
597.96 |
164.43 |
|
Balance carried over to Balance Sheet |
2,094.47 |
597.96 |
Consolidated Financial Summary (Rs, in Millions)
|
Particulars |
Year ended 31 December 2015 |
Year ended 31 December 2014 |
|
Total Revenue |
34,084.30 |
25,177.54 |
|
Total Expenses |
32,432.73 |
25,284.98 |
|
Profit / (Loss) before tax |
1,651.57 |
(107.44) |
|
Prior period Items |
254.52 |
(5.20) |
|
Less: Tax Expenses |
788.57 |
175.83 |
|
Profit / (Loss) after tax |
1,117.52 |
(288.47) |
|
Share of Profits in Associate |
12.90 |
19.48 |
|
Profit / (Loss) for the year |
1,130.42 |
(268.99) |
BRIEF DESCRIPTION OF THE COMPANYâS WORKING AND THE STATE OF COMPANYâS AFFAIRS
The Company continued to grow inorganically during the year 2015 despite growing competition and bad weather. During the year, revenue of the Company increased by 41.07% at Rs, 29,104.25 Million as against Rs, 20,631.20 Million during the previous year. The profit after tax, during the year increased by 2.5 times at Rs, 1,516.47 Million, as against '' 433.53 Million during the previous year due to the increased scale of business post acquisition of new territories in 2015.
During the year under review, the Company continued its focus on cost consciousness, employee development and consumers. The Company leveraged its strengths to achieve the operational excellence for brands of PepsiCo in India as well as in other South Asian Region - Sri Lanka and Nepal and in North African Region - Morocco through its wholly owned subsidiaries. The Company is also planning to expand within India and also in Southern Africa Region - Zambia, Mozambique and Zimbabwe.
Your Company is in the process of acquisition of 2 (two) co-packer undertakings operating in the territories of Uttar Pradesh and Punjab. This will further add to the growth of the Company during the current year.
Your Directors are confident that with the growing population, rise in income levels and growing e-commerce shall improve the growth of the Company.
HUMAN RESOURCE DEVELOPMENT
Your Company aims at constantly upgrading the strength of its employees by organizing skill building programs, ongoing Learning and Professional / Management Development programmes at all levels and across functions. Employees at all levels are assured a great place to work.
The Company also encourages a culture which combines work with fun. In January, 2016 a corporate employee engagement event âSPARDHA 2016â was organized, which was a sporting event, spreading over 3 days wherein employees from all plants / verticals / locations across India participated through nineteen different teams. More than 550 participants, in addition to delegates and visitors attended the event, which was a great success.
DIVIDEND
Your Directors do not recommend any dividend for the year ended 31st December, 2015 and plough back the profits for future growth of the Company.
CHANGE IN THE NATURE OF BUSINESS, IF ANY
During the year under review, there was no change in the nature of the business of the Company.
RESERVES
The Board do not proposes to transfer any amount to reserves during the year under review.
SHARE CAPITAL
During the year under review, the Authorized Share Capital of the Company comprising of Rs, 10,000 Million divided into 700 Million Equity Shares of Rs, 10/- each and 30 Million Preference Shares of Rs, 100/- each got reclassified as Rs, 10,000 Million comprising of 500 Million Equity Shares of Rs, 10/- each and 50 Million Preference Shares of Rs, 100/each. The Company also allotted 25 Million Compulsorily Convertible Preference Shares (CCPS) of Rs, 100/- each for an aggregate amount of Rs, 2500 Million.
REDEEMABLE NON-CONVERTIBLE DEBENTURES
During the year under review, the Company issued 300 rated, listed, redeemable, unsecured Non-Convertible Debentures of Rs, 10 million each of the Company aggregating to Rs, 3,000 Million and 2000 Rated, Listed, Secured, Redeemable, Non-convertible Debentures of a face value of Rs, 1 Million each, aggregating to Rs, 2,000 Million. Both these Debentures are listed on National Stock Exchange of India Ltd.
SUBSIDIARIES AND ASSOCIATE COMPANIES
As on 31st December, 2015, Varun Beverages (Nepal) Private Limited, Varun Beverages Morocco SA and Varun Beverages Lanka (Private) Ltd. were the wholly owned foreign subsidiaries of the Company and Ole Springs Bottlers (Private) Ltd. was the step down subsidiary of the Company. Angelica Technologies Pvt. Ltd. was the only associate Company of the Company, during the year.
The Company has acquired 51% quota capital of Varun Beverages Mozambique LDA and it has become a subsidiary of the Company effective from 1st January, 2016. The Company has also acquired 60% shares of Varun Beverages (Zambia) Ltd. and 85% shares of Varun Beverages (Zimbabwe) (Private) Limited. The transfer of shares of the two companies is in process and after such transfer, they shall become the subsidiaries of your Company.
CONSOLIDATED FINANCIAL STATEMENT
In accordance with the Companies Act, 2013 (âthe Actâ) and Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accounting for Investments in Associates and AS - 27 on Financial Reporting of Interests in Joint Ventures, the audited consolidated financial statement shall be placed before the members in their forthcoming Annual General Meeting.
In accordance with Section 129 (3) of the Companies Act, 2013, a statement containing the salient features of the financial statement of the Companyâs subsidiaries, associate and joint venture companies in Form AOC-1 is being annexed with the Financial Statements.
Pursuant to Rule 8 of the Companies (Accounts) Rules 2014, a separate Section wherein a report on the performance and financial position of each of the subsidiaries, associates and joint venture companies included in the consolidated financial statements is presented and marked as Annexure - I to this Report.
KEY MANAGERIAL PERSONNEL
Pursuant to provisions of Section 203 of the Companies Act, 2013, Mr. Kapil Agarwal (Whole-time Director), Mr. Kamlesh Kumar Jain (Chief Financial Officer) and Mr. Mahavir Prasad Garg (Company Secretary) continued to be the key managerial personnel of the Company.
DIRECTORS
During the year under review, the Board of Directors appointed Mr. Parth Dasharathlal Gandhi (DIN: 01658253) as a Nominee Director of the Company effective 30th September, 2015 (who was nominated by Axis Trustee Services Limited, the debenture trustee acting on behalf of AION Investments II Singapore Pte. Ltd.). He is a non-retiring Director on the Board of the Company.
The Board of Directors also appointed Dr. Naresh Kumar Trehan (DIN: 00012148) as Non-executive Independent Director on the Board of the Company with effect from 1st December, 2015. The tenure of Mr. Ravindra Dhariwal and Dr. Girish Ahuja, Independent Directors of the Company expired on 19th March, 2016. The Board of Directors re-appointed them for another term of two years w.e.f. 20th March, 2016.
The tenure of Mr. Kapil Agarwal, Whole-time Director of the Company expired on 31st December, 2015. The Board of Directors re-appointed him for another term of 3 years with effect from 1st January, 2016. The Board also re-appointed Mr. Varun Jaipuria, Mr. Raj P. Gandhi and Mr. Kamlesh Kumar Jain as Whole-time Directors of the Company, whose terms are going to expire on 31st October, 2016; for another term of 3 years with effect from 1st November, 2016.
The appointment / re-appointment of all the Independent Directors, Whole-time Directors are subject to the approval of the members in the General Meeting of the Company.
Pursuant to Section 161 (1) of the Companies Act, 2013 and the Rules framed thereunder, Dr. Naresh Kumar Trehan, Dr. Girish Ahuja, Mr. Ravindra Dhariwal and Mr. Kapil Agarwal shall hold office up to the date of the ensuing Annual
General Meeting of the Company. The Company has received requisite notices in writing from a member signifying its intention to propose the candidature of Dr. Naresh Kumar Trehan, Dr. Girish Ahuja, Mr. Ravindra Dhariwal and Mr. Kapil Agarwal for the offices of Director of the Company and the Board recommends their appointment / reappointment.
The Independent Directors shall not be liable to retire by rotation. The Independent Directors have given the declaration of independence as per Section 149 (6) of the Act.
Mr. Varun Jaipuria (DIN: 02465412) and Mr. Kamlesh Kumar Jain (DIN: 01822576), Directors of the Company are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offered themselves for reappointment. Your Directors recommend their re-appointment.
None of the Directors of the Company is disqualified as per provisions of Section 164 of the Companies Act, 2013. The Directors of the Company have made necessary disclosures under Section 184 and other relevant provisions of the Companies Act, 2013.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134 (3) (c) and (5) of the Companies Act, 2013, the Directors hereby confirm that:
i. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
ii. the Directors had 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 at the end of the financial year and of the profit and loss of the Company for that period;
iii. the Directors had 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;
iv. the Directors had prepared the annual accounts on a going concern basis;
v. the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
vi. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility (CSR) Committee of the Company has been re-constituted on 30th September, 2015, whose composition, role, functions and powers are in accordance with the requirements of the Companies Act, 2013. Presently the CSR Committee comprises of Mr. Raj P. Gandhi (Executive Director), Mr. Udai Dhawan (Non-executive Nominee Director), Mr. Ravindra Dhariwal (Independent Director) and Mr. Parth Dasharathlal Gandhi (Non-executive Nominee Director) as members.
The CSR Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy indicating the activities to be undertaken by the Company, which has been approved by the Board.
The CSR Policy is annexed herewith marked as Annexure - II to this Report.
The Company has identified promoting education, including special education especially among poor children and the differently abled students, as area of engagement. The Company would also initiate need based initiatives in compliance with Schedule VII to the Act. During the year, the Company has spent '' 0.92 Million on CSR Activities. The Annual Report on CSR Activities is annexed herewith marked as Annexure - III to this Report.
AUDIT COMMITTEE
The Audit Committee of the Company comprises of Dr. Girish Ahuja (Independent Director), Mr. Ravindra Dhariwal (Independent Director) and Mr. Udai Dhawan (Non-executive Nominee Director), as members. Its composition, role, functions and powers are in accordance with the requirements of the Companies Act, 2013.
NOMINATION AND REMUNERATION COMMITTEE
The Company has a Nomination and Remuneration Committee, whose composition, role, functions and powers are in accordance with the requirements of the Companies Act, 2013. The Nomination and Remuneration Committee of the Company has been re-constituted on 30th September, 2015 and at present it comprises of Mr. Ravindra Dhariwal (Independent Director), Dr. Girish Ahuja (Independent Director), Mr. Udai Dhawan (Non-executive Nominee Director) and Mr. Parth Dasharathlal Gandhi (Non-executive Nominee Director) as members.
The Nomination and Remuneration Policy of the Company is annexed herewith marked as Annexure - IV to this Report.
RISK MANAGEMENT POLICY
During the year a Risk Management Policy was formulated and approved by the Board which identifies all the risks that the organization faces such as strategic, operational, liquidity, credit, logistic, market, Human Resource, IT, Legal, Regulatory, financial and other risks and enables the Board in a) overseeing and approving the Companyâs enterprise wide risk management framework; b) overseeing that all the risks have been identified and assessed and that there is adequate risk management infrastructure in place capable of addressing those risks.
INTERNAL FINANCIAL CONTROL
The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.
ANNUAL PERFORMANCE EVALUATION BY THE BOARD
Pursuant to the provisions of Section 134 (3) (p) of the Companies Act, 2013 and the rules made there under, the Board was required to carry out an Annual Performance Evaluation of its own performance and that of its Committees and individual Directors.
Accordingly, the Board carried out a formal process of performance evaluation of the Board, Committees and individual Directors. The performance was evaluated based on the parameters such as Composition and Quality of Board Members, Effectiveness of Board / Committee process and functioning, Contribution of the Members, Board Culture and Dynamics, Fulfillment of key responsibilities, Ethics and Compliance etc. The results reflected high satisfactory performance.
DISCLOSURE UNDER EMPLOYEE STOCK OPTIONS SCHEME
In terms of Rule 12 (9) of Companies (Share Capital and Debentures) Rules, 2014, the prescribed details of Employees Stock Options Scheme are as under :-
|
Particulars |
Number of Options |
|
Options granted during FY 2015 |
Nil |
|
Options vested during FY 2015 |
75% of total options i.e. 2,675,400 |
|
Options exercised during FY 2015 |
Nil |
|
Total number of shares arising out of exercise of options during FY 2015 |
Nil |
|
Options forfeited / lapsed / cancelled during FY 2015 |
Nil |
|
The exercise price |
Rs, 149.51 |
|
Variations of terms of options during FY 2015 |
Vesting period has been amended such that the 1st, 2nd and 3rd vest shall occur on 01.12.2015 and restriction to exercise the option after IPO is removed. |
|
Money realized by exercise of options during FY 2015 |
Nil |
|
Total number of options in force |
2,675,400 |
Employee wise details of options granted during FY 2015:
|
Particulars |
Number of Options |
|
(a) Key Managerial Personnel |
Nil |
|
(b) Any other employee who received a grant of options amounting to 5% or more of the options granted during FY 2015. |
Nil |
|
(c) Identified employees who were granted options, during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant |
Nil |
VIGIL MECHANISM
During the year, the Company has adopted a Vigil Mechanism Policy. Under the Vigil Mechanism Policy, the protected disclosures can be made by a victim through an e-mail or a letter to the Vigilance Officer or to the Chairperson of the Audit Committee. The Policy provides for adequate safeguards against victimisation of employees and Directors who avail of the vigil mechanism and also provides for direct access to the Vigilance Officer or the Chairperson of the Audit Committee, in exceptional cases.
MEETINGS OF THE BOARD OR ANY COMMITTEE THEREOF
During the year under review, seven meetings of the Board of Directors were held on 18th February, 2015, 20th March, 2015, 22nd May, 2015, 17th September, 2015, 30th September, 2015, 4th November, 2015 and 1st December, 2015 out of which Mr. Ravi Kant Jaipuria and Mr. Varun Jaipuria attended two meetings, Mr. Raj P. Gandhi and Mr. Kamlesh Kumar Jain attended all the seven meetings, Mr. Christopher White and Mr. Kapil Agarwal attended six meetings, Mr. Udai Dhawan and Dr. Girish Ahuja attended five meetings, Mr. Ravindra Dhariwal attended three meetings, Mrs. Devyani Jaipuria attended two meetings and Mr. Parth Dasharathlal Gandhi attended one meeting.
During the year under review, one meeting of the Audit Committee was held on 22nd May, 2015 which was attended by Dr. Girish Ahuja, Mr. Ravindra Dhariwal and Mr. Udai Dhawan, members of the Committee.
During the year under review, two meetings of the Nomination and Remuneration Committee were held on 22nd May, 2015 and 1st December, 2015 out of which Dr. Girish Ahuja, Mr. Ravindra Dhariwal and Mr. Udai Dhawan attended both the meetings and Mr. Parth Dasharathlal Gandhi attended one meeting as members of the Committee.
During the year under review, one meeting of the Corporate Social Responsibility Committee was held on 17th September, 2015 which was attended by Mr. Ravindra Dhariwal and Mr. Raj P. Gandhi, members of the Committee.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED
Particulars of investments made, loans given, guarantees given and securities provided are detailed in the financial statement (Please refer to Note No. 15, 16 and 34 to the Financial Statements).
PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
Your Directors draw attention of the members to Note No. 44 to the Financial Statements which sets out related party disclosures which are in the ordinary course of business of the Company and are also transacted at armsâ length basis. The particulars of contracts or arrangements with related parties referred to in Section 188 (1) of the Companies Act, 2013 are annexed herewith in form AOC - 2 as Annexure - V to the Report.
PUBLIC DEPOSITS
During the year under review, your Company has not invited or accepted any deposits from the Public within the meaning of Chapter V of the Companies Act, 2013 / Section 58A of the Companies Act, 1956 and the respective Rules made there under.
AUDITORS AND AUDITORSâ REPORT
M/s. Walker Chandiok & Associates, Chartered Accountants and M/s. O. P. Bagla & Co., Chartered Accountants, New Delhi, the Joint Statutory Auditors retire at the conclusion of the ensuing Annual General Meeting of the Company.
In terms of Section 139 of the Companies Act, 2013 and the rules made there under, M/s. O.P. Bagla & Co., Chartered Accountants, are proposed to be re-appointed as the Statutory Auditors of the Company to hold office for one year from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting i.e. up to 31st December, 2016 and M/s. Walker Chandiok & Associates, Chartered Accountants, are proposed to be re-appointed for a period of two years as the Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of the second Annual General Meeting held after this Annual General Meeting i.e. upto 31st December, 2017, subject to ratification by the members of the Company at every Annual General Meeting.
The Company has received a letter from them to the effect that their appointment, if made, would be in accordance with the provisions of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014. Your Directors recommend their re-appointment.
The Auditorsâ Report for the financial year 2015 does not contain any qualification, reservation or adverse remarks. SECRETARIAL AUDITORS
The Board has appointed Mr. Sanjay Grover, Practicing Company Secretary, to conduct Secretarial Audit for the financial year 2015. The Secretarial Audit Report for the financial year ended 31st December, 2015 is annexed herewith and marked as Annexure - VI to this Report.
The observation of the Secretarial Auditors in their report is explained as follows:-
As regards compliance with Section 149 (4) of the Companies Act, 2013, the Board with to explain that it is in the process of identifying suitable persons of integrity having relevant experience to ensure compliance under the said provisions. The Board expect that it will be complied soon.
Other than the above, the Secretarial Auditorsâ Report is self-explanatory and therefore do not require any further clarification/ explanation from the Board of Directors.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information as regards conservation of energy and technology absorption are annexed herewith and marked as Annexure - VII. During the year under review, the Company had foreign exchange earnings of '' 263.96 Million and Foreign exchange expenditure incurred is '' 2,271.29 Million.
EXTRACTS OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as Annexure - VIII to this Report.
RESEARCH AND DEVELOPMENT (R&D)
During the year under review, no Research & Development was carried out.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
A statement containing particulars of employees who are in receipt of remuneration in excess of the limit prescribed under Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith and marked as Annexure - Ix.
GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transaction on these items during the year under review:-
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential voting rights as to dividend, voting or otherwise.
3. The Whole-time Director of the Company does not receive any remuneration or commission from any of its subsidiaries.
4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operations in future.
5. No cases were filed pursuant to Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
ACKNOWLEDGEMENT
Your Directors places on record their appreciation for the valuable support and cooperation of the Companyâs Bankers, Government Agencies, Customers, Suppliers, Shareholders, Management Team and the entire work force and looks forward for their continued support in future.
For and on behalf of the Board of Directors
For Varun Beverages Limited
Raj P. Gandhi Varun Jaipuria
Place : Gurgaon Whole-time Director Whole-time Director
Date : 28.03.2016 DIN : 00003649 DIN : 02465412
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on Varun Beverages Ltd.
-
Varun Beverages Ltd. Tools
- Bulk Deals
- Block Deals
-
Varun Beverages Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- Bonus
- BSE Price History
- NSE Price History
-
Varun Beverages Ltd. Key Financial Ratios
- Ratios
-
Varun Beverages Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
Varun Beverages Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
Varun Beverages Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
Varun Beverages Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
-
Stocks To Buy Today, Dec 19: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Friday -
Stocks To Buy Today, Dec 18: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday -
Stocks To Buy Today, Dec 17: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
Stocks To Buy Today, Dec 16: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
India Stock Market Weekly Review: Nifty and Sensex Fall as Caution Spreads -
Stocks To Buy Today, Dec 15: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday
-
Stocks To Buy Today, Dec 12: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Friday -
Market Outlook 2026: Kotak Securities Sees Nifty 50 at 30,000; THESE 4 Sectors Lead Rally, Gold To Stay Strong -
Stocks To Buy Today, Dec 10: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
D-Street Bleeds For 2nd Day! Sensex Slumps 678 Pts; Nifty Cracks 25,800; Why Stock Market Is Falling Today? -
Stocks To Buy Today, Dec 9: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
Stocks To Buy Today, Dec 8: Top 4 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday -
Stock Market Alert! Major Pre-Open Session Change From Dec 8: Full Timings, Rules & All You Need To Know -
Bank Nifty Surges: RBI’s 25 bps Rate Cut Triggers Strong Upside in Major Banking Stocks -
Closing Bell: Sensex Ends 158 pts Higher, Nifty Climbs Above 26,000; Hero MotoCorp, HAL Up 2% Each -
Stocks To Buy Today, Dec 4: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday
-
Block for 8 hours
-
Block for 12 hours
-
Block for 24 hours
-
Don't block
Sign in with Google- Male
- Female
- Others
- Under 18
- 18 to 25
- 26 to 35
- 36 to 45
- 45 to 55
- 55+