About
Varun Beverages Ltd
Varun Beverages Ltd, part of the RJ Corp group, a diversified business conglomerate with interests in beverages, quick-service restaurants, dairy and healthcare, is the second largest franchisee in the world (outside US) of carbonated soft drinks ('CSDs') and non-carbonated beverages ('NCBs') sold under trademarks owned by PepsiCo. The company produces and distributes a wide range of CSDs, as well as a large selection of NCBs, including packaged drinking water.
The 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, It is is having 37 manufacturing facilities, of which 31 are in India and 6 in International Geographies with more than 2,500 owned vehicles, more than 2,000 primary distributors and more than 100 depots.
PepsiCo CSD brands produced and sold by the company include Pepsi, Diet Pepsi, Seven-Up, Mirinda Orange, Mirinda Lemon, Mountain Dew, Seven-Up Nimbooz Masala Soda, Evervess Soda, Sting and Gatorade. PepsiCo NCB brands produced and sold by the company include Tropicana (100%, Essentials & Delight), Tropicana Slice, Tropicana Frutz, Seven-Up Nimbooz and Quaker Oat Milk as well as packaged drinking water under the brand Aquafina. In addition, the company has also been granted the franchise for Ole brand of PepsiCo products in Sri Lanka.
The company has been associated with PepsiCo since the 1990s and over two and half decades consolidated its business association with PepsiCo, increasing the number of PepsiCo licensed territories and sub-territories covered by the company, producing and distributing a wider range of PepsiCo beverages, introducing various SKUs in the company's portfolio, and expanding the company's distribution network. As of March 2018, the company has been granted franchises for various PepsiCo products spread across 21 States and two Union Territories in India. The company's share of PepsiCo beverages volume sales ,based on sales to end customers, increased from 26.46% in Fiscal 2011 to ~51% in Fiscal 2018. Although, India is the company's largest market, the company has also been granted the franchise for various PepsiCo products for the territories of Nepal, Sri Lanka, Morocco, Zambia and Zimbabwe.
As of March 2018, the company has 20 manufacturing plants in India and five production facilities in the international geographies (one each in Nepal, Sri Lanka, Morocco, Zambia and Zimbabwe). In addition, the company has set up backward integration facilities for production of preforms, crowns, corrugated boxes, plastic crates and shrink-wrap films in certain of the company's production facilities to ensure operational efficiencies and quality standards.
The company's Promoter and Chairman Mr. Ravi Kant Jaipuria has an established reputation as an entrepreneur and business leader and is the only Indian to receive PepsiCo's International Bottler of the Year award, which was awarded in 1997.
The company was incorporated as Varun Beverages Limited on 16 June 1995 at New Delhi as a public limited company under the Companies Act, 1956. The company obtained a certificate of commencement of business on 4 July 1995. The company started its operations at Jaipur in 1996. In 1999, the company started operations at Alwar, Jodhpur and Kosi.
Devyani Beverages Limited was merged with Varun Beverages pursuant to the order of High Court of Delhi dated 6 October 2004. Varun Beverages (International) Limited was merged with Varun Beverages pursuant to the order of High Court of Delhi dated 12 March 2013. In 2013, Varun Beverages acquired the business of manufacturing and marketing of soft drink beverages and syrup mix in Delhi, India.
In 2015, through a business transfer agreement Varun Beverages acquired PepsiCo India's business of manufacturing, marketing, selling and distributing soft drink beverages and syrup mix in the Indian states of Uttar Pradesh (excluding certain territories), Uttarakhand, Himachal Pradesh, Haryana (excluding certain territories) and the Union Territory of Chandigarh. During the year, the company through a business transfer agreement acquired PepsiCo India's business of manufacturing, marketing, selling and distributing soft drink beverages and syrup mix in Bazpur, Jainpur, Satharia and Panipat. During the year, the company acquired the business of selling and distribution of soft drinks beverages and syrup mix in one district undertaking situated in Punjab.
In 2016, Varun Beverages acquired entire shareholding of Arctic International Private Limited in Varun Beverages Mozambique, Limitada. During the year, the company acquired entire shareholding of Arctic International Private Limited in Varun Beverages (Zambia) Limited. During the year, Varun Beverages acquired 85% shareholding of Varun Beverages (Zimbabwe) (Private) Limited (VBZPL).
Varun Beverages came out with an initial public offer (IPO) during the period from 26 October 2016 to 28 October 2016. The IPO was a combination of fresh issue of 1.5 crore shares and offer for sale of 1 crore shares from the promoters. The IPO was priced at Rs 445 per share. The company's shares were listed on the bourses on 8 November 2016.
On 23 February 2017, Varun Beverages announced that it has increased its stake in its Zambia subsidiary, Varun Beverages (Zambia) Limited, to 90% from 60%. VBL has been successfully running the Zambia operations since its acquisition in 2016. The increase in stake reflects the company's confidence in the future growth prospects of the subsidiary and will be an effective catalyst to drive further business growth in a fast-growing emerging market.
On 9 March 2017, Varun Beverages Limited (VBL) announced that it has divested 41% stake in its Mozambique subsidiary, Varun Beverages Mozambique Limitada. The divestment of the stake is in view of limited opportunity to scale-up operations which would have enabled the company to turnaround the loss making subsidiary. VBL continues to hold a residual stake of 10% in the unit.
On 4 May 2017, Varun Beverages announced that the company has set up a new unit for manufacturing of Pepsi range of products at District Hardoi, Uttar Pradesh and the commercial production/operation has started with effect from 3 May2017.
On 28 September 2017, Varun Beverages announced that the company has concluded the 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 and Bhopal (Mandideep).
On 4 January 2018, Varun Beverages announced that it has further deepened its relationship with PepsiCo by entering into a strategic partnership for the larger Tropicana portfolio along with Gatorade and Quaker Value-Added Dairy in territories across North and East India. This is part of VBL's strategy to expand its product portfolio through its valued relationship with PepsiCo.
On 11 January 2018, Varun Beverages announced that it has concluded the acquisition of PepsiCo India's previously franchised rights for the state of Chhattisgarh. The Board of Directors of Varun Beverages at its meeting held on 17 January 2018 considered and approved to acquire franchisee rights for PepsiCo India's previously franchised sub-territory in the State of Bihar. Varun Beverages' subsidiary Varun Beverages (Zimbabwe) (Private) started Commercial Production at a Greenfield facility for Pepsico's products with effect from 16 February 2018.
On 23 March 2018, Varun Beverages announced that it has concluded the acquisition of PepsiCo India's previously franchised sub territory in the State of Jharkhand along with one manufacturing unit at Jamshedpur. The company is now a franchisee for PepsiCo products across 21 States and 2 Union Territories of India.
On 5 April 2018, Varun Beverages announced its plans to set-up a greenfield production facility (subject to receipt of necessary approvals) to create in-house production capacity at Pathankot district of Punjab for Tropicana fruit juices, Quaker Oats Milk based Beverages and Gatorade. Spread over ~41 acres, it will be the first fully backward integrated facility in India to manufacture the complete range of above products including carbonated soft drinks (CSD) at a single location. The expansion is to take advantage of the growing demand of Juice Based beverages for health conscious consumers.
On 3 May 2018, Varun Beverages informed the stock exchanges that a new unit at Nawalparasi District in Napal, under Varun Beverages (Nepal) Private Limited, a wholly owned subsidiary of the company, started commercial production with effect from 2 May 2018.
The Board of Directors in their meeting held on February 18, 2019 approved, its intent to enter into a binding agreement with PepsiCo India Holdings Private Limited to acquire franchise rights in South and West regions o f India from PepsiCo for a national bottling, sales and distribution footprint in 7 States and 5 Union Territories.
In May 2019, the Company acquired franchise rights in South and West regions from PepsiCo for a national bottling, sales and distribution footprint in 7 States and 5 Union Territories of India. It acquired franchise rights in the states of Gujarat, Telangana, Kerala, Tamil Nadu and parts of Maharashtra, Karnataka, Andhra Pradesh and in Union Territories of Daman & Diu, Dadra & Nagar Haveli, Andaman & Nicobar Islands, and Lakshadweep and Puducherry, except Yanam. In February 2019, it acquired territorial rights from SMV Group for parts of Maharashtra (14 districts), Karnataka (13 districts) and Madhya Pradesh (3 districts). The Company acquired an additional 20% stake in Lunarmech Technologies Private Limited during the year, which makes and sells PET bottle caps and crown caps, increasing their shareholding to 55% of the effective equity share capital. Post-acquisition, Company holds 55% of the effective equity share capital of Lunarmech. Subsequently, Company acquired control of Angelica Technologies Private Limited by appointment of majority of Directors on the Board of Angelica. Post acquisition of control, both Angelica and Lunarmech (in which Angelica holds 74% equity share capital) became subsidiaries of the Company. Additionally, it acquired two production facilities, one at Dharwad, Karnataka for a total consideration of Rs. 747.25 million; and the second at Tirunelveli, Tamil Nadu for a total consideration of Rs. 200 million. Apart from these, it launched 3 new variants of ambient temperature value-added dairy beverages, Belgian Choco Shake, Cold Coffee and Mango Shake in 200ml PET bottle, with a 180-day shelf life during year 2019-20.
As of December 31, 2021, the Company had 31 state-of-the-art manufacturing facilities in India, and 6 globally.
During the year 2021, the Company incorporated a new company namely Varun Beverages RDC SAS' in DRC to initially import finished products like carbonated and non-carbonated beverages from Morocco and Zambia and distribute them in DRC to test and establish the market before setting up a manufacturing facility locally in due course of time. A new plant for manufacturing of carbonated soft
drinks, juice based drinks and packaged drinking water in Bihar was set up to improve its market presence and gain a foothold in the territory. Apart from this, a new plant was set up for manufacturing of plastic preforms and plastic closures in Jammu & Kashmir to further strengthen its backward integration.
Varun Beverages Ltd
Company History
Varun Beverages Ltd, part of the RJ Corp group, a diversified business conglomerate with interests in beverages, quick-service restaurants, dairy and healthcare, is the second largest franchisee in the world (outside US) of carbonated soft drinks ('CSDs') and non-carbonated beverages ('NCBs') sold under trademarks owned by PepsiCo. The company produces and distributes a wide range of CSDs, as well as a large selection of NCBs, including packaged drinking water.
The 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, It is is having 37 manufacturing facilities, of which 31 are in India and 6 in International Geographies with more than 2,500 owned vehicles, more than 2,000 primary distributors and more than 100 depots.
PepsiCo CSD brands produced and sold by the company include Pepsi, Diet Pepsi, Seven-Up, Mirinda Orange, Mirinda Lemon, Mountain Dew, Seven-Up Nimbooz Masala Soda, Evervess Soda, Sting and Gatorade. PepsiCo NCB brands produced and sold by the company include Tropicana (100%, Essentials & Delight), Tropicana Slice, Tropicana Frutz, Seven-Up Nimbooz and Quaker Oat Milk as well as packaged drinking water under the brand Aquafina. In addition, the company has also been granted the franchise for Ole brand of PepsiCo products in Sri Lanka.
The company has been associated with PepsiCo since the 1990s and over two and half decades consolidated its business association with PepsiCo, increasing the number of PepsiCo licensed territories and sub-territories covered by the company, producing and distributing a wider range of PepsiCo beverages, introducing various SKUs in the company's portfolio, and expanding the company's distribution network. As of March 2018, the company has been granted franchises for various PepsiCo products spread across 21 States and two Union Territories in India. The company's share of PepsiCo beverages volume sales ,based on sales to end customers, increased from 26.46% in Fiscal 2011 to ~51% in Fiscal 2018. Although, India is the company's largest market, the company has also been granted the franchise for various PepsiCo products for the territories of Nepal, Sri Lanka, Morocco, Zambia and Zimbabwe.
As of March 2018, the company has 20 manufacturing plants in India and five production facilities in the international geographies (one each in Nepal, Sri Lanka, Morocco, Zambia and Zimbabwe). In addition, the company has set up backward integration facilities for production of preforms, crowns, corrugated boxes, plastic crates and shrink-wrap films in certain of the company's production facilities to ensure operational efficiencies and quality standards.
The company's Promoter and Chairman Mr. Ravi Kant Jaipuria has an established reputation as an entrepreneur and business leader and is the only Indian to receive PepsiCo's International Bottler of the Year award, which was awarded in 1997.
The company was incorporated as Varun Beverages Limited on 16 June 1995 at New Delhi as a public limited company under the Companies Act, 1956. The company obtained a certificate of commencement of business on 4 July 1995. The company started its operations at Jaipur in 1996. In 1999, the company started operations at Alwar, Jodhpur and Kosi.
Devyani Beverages Limited was merged with Varun Beverages pursuant to the order of High Court of Delhi dated 6 October 2004. Varun Beverages (International) Limited was merged with Varun Beverages pursuant to the order of High Court of Delhi dated 12 March 2013. In 2013, Varun Beverages acquired the business of manufacturing and marketing of soft drink beverages and syrup mix in Delhi, India.
In 2015, through a business transfer agreement Varun Beverages acquired PepsiCo India's business of manufacturing, marketing, selling and distributing soft drink beverages and syrup mix in the Indian states of Uttar Pradesh (excluding certain territories), Uttarakhand, Himachal Pradesh, Haryana (excluding certain territories) and the Union Territory of Chandigarh. During the year, the company through a business transfer agreement acquired PepsiCo India's business of manufacturing, marketing, selling and distributing soft drink beverages and syrup mix in Bazpur, Jainpur, Satharia and Panipat. During the year, the company acquired the business of selling and distribution of soft drinks beverages and syrup mix in one district undertaking situated in Punjab.
In 2016, Varun Beverages acquired entire shareholding of Arctic International Private Limited in Varun Beverages Mozambique, Limitada. During the year, the company acquired entire shareholding of Arctic International Private Limited in Varun Beverages (Zambia) Limited. During the year, Varun Beverages acquired 85% shareholding of Varun Beverages (Zimbabwe) (Private) Limited (VBZPL).
Varun Beverages came out with an initial public offer (IPO) during the period from 26 October 2016 to 28 October 2016. The IPO was a combination of fresh issue of 1.5 crore shares and offer for sale of 1 crore shares from the promoters. The IPO was priced at Rs 445 per share. The company's shares were listed on the bourses on 8 November 2016.
On 23 February 2017, Varun Beverages announced that it has increased its stake in its Zambia subsidiary, Varun Beverages (Zambia) Limited, to 90% from 60%. VBL has been successfully running the Zambia operations since its acquisition in 2016. The increase in stake reflects the company's confidence in the future growth prospects of the subsidiary and will be an effective catalyst to drive further business growth in a fast-growing emerging market.
On 9 March 2017, Varun Beverages Limited (VBL) announced that it has divested 41% stake in its Mozambique subsidiary, Varun Beverages Mozambique Limitada. The divestment of the stake is in view of limited opportunity to scale-up operations which would have enabled the company to turnaround the loss making subsidiary. VBL continues to hold a residual stake of 10% in the unit.
On 4 May 2017, Varun Beverages announced that the company has set up a new unit for manufacturing of Pepsi range of products at District Hardoi, Uttar Pradesh and the commercial production/operation has started with effect from 3 May2017.
On 28 September 2017, Varun Beverages announced that the company has concluded the 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 and Bhopal (Mandideep).
On 4 January 2018, Varun Beverages announced that it has further deepened its relationship with PepsiCo by entering into a strategic partnership for the larger Tropicana portfolio along with Gatorade and Quaker Value-Added Dairy in territories across North and East India. This is part of VBL's strategy to expand its product portfolio through its valued relationship with PepsiCo.
On 11 January 2018, Varun Beverages announced that it has concluded the acquisition of PepsiCo India's previously franchised rights for the state of Chhattisgarh. The Board of Directors of Varun Beverages at its meeting held on 17 January 2018 considered and approved to acquire franchisee rights for PepsiCo India's previously franchised sub-territory in the State of Bihar. Varun Beverages' subsidiary Varun Beverages (Zimbabwe) (Private) started Commercial Production at a Greenfield facility for Pepsico's products with effect from 16 February 2018.
On 23 March 2018, Varun Beverages announced that it has concluded the acquisition of PepsiCo India's previously franchised sub territory in the State of Jharkhand along with one manufacturing unit at Jamshedpur. The company is now a franchisee for PepsiCo products across 21 States and 2 Union Territories of India.
On 5 April 2018, Varun Beverages announced its plans to set-up a greenfield production facility (subject to receipt of necessary approvals) to create in-house production capacity at Pathankot district of Punjab for Tropicana fruit juices, Quaker Oats Milk based Beverages and Gatorade. Spread over ~41 acres, it will be the first fully backward integrated facility in India to manufacture the complete range of above products including carbonated soft drinks (CSD) at a single location. The expansion is to take advantage of the growing demand of Juice Based beverages for health conscious consumers.
On 3 May 2018, Varun Beverages informed the stock exchanges that a new unit at Nawalparasi District in Napal, under Varun Beverages (Nepal) Private Limited, a wholly owned subsidiary of the company, started commercial production with effect from 2 May 2018.
The Board of Directors in their meeting held on February 18, 2019 approved, its intent to enter into a binding agreement with PepsiCo India Holdings Private Limited to acquire franchise rights in South and West regions o f India from PepsiCo for a national bottling, sales and distribution footprint in 7 States and 5 Union Territories.
In May 2019, the Company acquired franchise rights in South and West regions from PepsiCo for a national bottling, sales and distribution footprint in 7 States and 5 Union Territories of India. It acquired franchise rights in the states of Gujarat, Telangana, Kerala, Tamil Nadu and parts of Maharashtra, Karnataka, Andhra Pradesh and in Union Territories of Daman & Diu, Dadra & Nagar Haveli, Andaman & Nicobar Islands, and Lakshadweep and Puducherry, except Yanam. In February 2019, it acquired territorial rights from SMV Group for parts of Maharashtra (14 districts), Karnataka (13 districts) and Madhya Pradesh (3 districts). The Company acquired an additional 20% stake in Lunarmech Technologies Private Limited during the year, which makes and sells PET bottle caps and crown caps, increasing their shareholding to 55% of the effective equity share capital. Post-acquisition, Company holds 55% of the effective equity share capital of Lunarmech. Subsequently, Company acquired control of Angelica Technologies Private Limited by appointment of majority of Directors on the Board of Angelica. Post acquisition of control, both Angelica and Lunarmech (in which Angelica holds 74% equity share capital) became subsidiaries of the Company. Additionally, it acquired two production facilities, one at Dharwad, Karnataka for a total consideration of Rs. 747.25 million; and the second at Tirunelveli, Tamil Nadu for a total consideration of Rs. 200 million. Apart from these, it launched 3 new variants of ambient temperature value-added dairy beverages, Belgian Choco Shake, Cold Coffee and Mango Shake in 200ml PET bottle, with a 180-day shelf life during year 2019-20.
As of December 31, 2021, the Company had 31 state-of-the-art manufacturing facilities in India, and 6 globally.
During the year 2021, the Company incorporated a new company namely Varun Beverages RDC SAS' in DRC to initially import finished products like carbonated and non-carbonated beverages from Morocco and Zambia and distribute them in DRC to test and establish the market before setting up a manufacturing facility locally in due course of time. A new plant for manufacturing of carbonated soft
drinks, juice based drinks and packaged drinking water in Bihar was set up to improve its market presence and gain a foothold in the territory. Apart from this, a new plant was set up for manufacturing of plastic preforms and plastic closures in Jammu & Kashmir to further strengthen its backward integration.
Varun Beverages Ltd
Directors Reports
Dear Members,
Your Directors have pleasure in presenting the 27th (Twenty Seventh) Annual
Report on the business and operations of your Company along with the Audited Financial
Statements for the Financial Year ended December 31, 2021.
Financial Performance
The financial performance of your Company for the Financial Year ended December 31,
2021 is summarized below:
|
|
|
|
(Rs. in Million) |
| Particulars |
Standalone |
Consolidated |
|
Financial Year ended December 31, 2021 |
Financial Year ended December 31, 2020 |
Financial Year ended December 31, 2021 |
Financial Year ended December 31, 2020 |
| Total Revenue |
66,530.44 |
49,484.43 |
90,262.16 |
65,927.63 |
| Total Expenses |
59,715.22 |
46,792.34 |
80,196.08 |
61,637.29 |
| Profit before tax after exceptional items |
6,815.22 |
2,026.80 |
10,066.08 |
3,625.05 |
| Less: Tax Expenses /(Credit) |
1,920.35 |
(237.49) |
2,605.56 |
52.34 |
| Profit after tax |
4,894.87 |
2,264.29 |
6,940.52* |
3,289.95* |
| Balance brought forward from last year |
10,074.42 |
8,619.78 |
8,042.43 |
5,560.11 |
| Balance carried over to Balance Sheet |
13,942.96 |
10,074.42 |
13,967.42 |
8,042.43 |
| General Reserve |
444.26 |
444.26 |
444.26 |
444.26 |
| Other Reserves |
25,268.66 |
26,712.10 |
22,057.07 |
23,866.43 |
| Reserves & Surplus carried to Balance Sheet |
39,655.88 |
37,230.78 |
36,468.75 |
32,353.12 |
*After adjustment on account of non-controlling interest.
Consolidated Financial Statements
The Consolidated Financial Statements of your Company for the Financial Year 2021 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 Company's 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 2,000 primary distributors and
more than 100 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.
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, 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.
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://varunpepsi.com/ wp-conten t/uploads/2019/03/Dividend-Distribution- Policy.pdf
Dividend
During the year under review, the Board of Directors in their meeting held on August 2,
2021 declared an interim dividend of Rs.2.50 per Equity Share (face value of Rs.10/- per
Equity Share) to the eligible equity shareholders of the Company. The Board of Directors
do not recommend any final dividend for the Financial Year 2021.
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 amount lying in the said Accounts (maintained with HDFC Bank Limited for the
dividend declared in 2017, Yes Bank Limited for the dividend declared in 2018, IndusInd
Bank Limited for the dividend declared in 2019, Axis Bank Limited for the dividend
declared in 2020 and IndusInd Bank Limited for the dividend declared in 2021) are uploaded
on website of the Company at https://varunpepsi.com/corporate- governance/
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 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
Bonus Issue
During the year under review, your Company has issued and allotted 144,344,360 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, 16,857 Bonus Equity Shares representing fractional
entitlement(s) of 33,714 eligible Members were consolidated and allotted to "Varun
Beverages Limited - Bonus Issue Fractional Shares Trust" ('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 16,857 Equity Shares
were sold by the Trust on August 5, 2021 and the net sale proceeds of the same were
distributed to the eligible Members.
Share Capital
The Authorized Share Capital of the Company is Rs.10,000,000,000/- (Rupees Ten Billion
only) divided into 500,000,000 (Five Hundred Million) Equity Shares of face value of
Rs.10/- (Rupees Ten only) each and 50,000,000 (Fifty Million) Preference Shares of face
value of Rs.100/- (Rupees One Hundred only) each. During the year under review, there was
no change in the Authorized Share Capital of the Company.
During the year under review, the Issued, Subscribed and Paid-up Equity Share Capital
of your Company was increased from Rs.2,886,887,200/- (Rupees Two Billion Eight Hundred
Eighty Six Million Eight Hundred Eighty Seven Thousand and Two Hundred only) divided into
288,688,720 (Two Hundred Eighty Eight Million Six Hundred Eighty Eight Thousand Seven
Hundred and Twenty) Equity Shares of face value of Rs.10/- (Rupees Ten only) each to
Rs.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 Rs.10/- (Rupees
Ten only) each due to allotment of 144,344,360 (One Hundred Forty Four Million Three
Hundred Forty Four Thousand Three Hundred and Sixty) Bonus Equity Shares of face value of
Rs.10/- (Rupees Ten only) each.
Employees Stock Option Scheme
Your Company has Employees Stock Option Scheme 2016 ('ESOP Scheme 2016') and to align
the same with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021,
as amended from time to time, the Board of Directors (as recommended by the Nomination and
Remuneration Committee) in their meeting held on February 3, 2022 approved to amend the
ESOP Scheme 2016 subject to the approval of shareholders at the ensuing AGM of the
Company.
Certificate from Secretarial Auditors of the Company that ESOP Scheme 2016 has been
implemented in accordance with the SEBI (Share Based Employee Benefits) Regulations, 2014
and as substituted by the SEBI (Share Based Employee Benefits and Sweat Equity)
Regulations, 2021 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.
Relevant disclosures pursuant to Rule 12(9) of the Companies (Share Capital and
Debentures) Rules, 2014 and Regulation 14 of the SEBI (Share Based Employee Benefits and
Sweat Equity) Regulations, 2021 are attached to this report as Annexure - A.
Credit Rating
During the year under review, your Company's credit ratings by CRISIL is as below:
| Long Term Rating |
CRISIL AA/Positive (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 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 2021 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 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 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 2021 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 2021 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.
Subsidiaries, Associates and Joint Ventures
Your Company has following subsidiaries:
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**; and
• Lunarmech Technologies Private Limited.
*w.e.f. December 31, 2021.
**w.e.f. January 31, 2022.
As on date, there are no associate/joint venture of the Company as defined under the
provisions of the Act.
To comply with the provisions of Section 129 of the Act, a separate statement
containing salient features of Financial Statements of Subsidiaries 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 subsidiary(ies) to the overall performance of your Company is
outlined in Note No. 59 of the 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 on all days except Saturday,
Sunday and Public Holidays up to the date of AGM i.e. April 7, 2022 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 determining Material
Subsidiary. Further, Varun Beverages (Zimbabwe) Private Limited is a material subsidiary
of the Company. Policy on Material Subsidiary is uploaded on website of the Company at
https://varunpepsi.com/wp-content/ uploads/2021/02/1doc.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, recommended their re-appointment.
Further, at the 26th AGM of the Company held on April 7, 2021, the Members
approved continuation of directorship of Dr. Naresh Trehan (DIN: 00012148) as
Non-executive Independent Director in terms of Regulation 17(1A) of the SEBI (LODR)
Regulations.
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.
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 Director(s) 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.
Key Managerial Personnel
Due to role enhancement, Mr. Vikas Bhatia was upgraded as Executive Director - Finance
(Non-Board Member) of the Company. Accordingly, he resigned from the position of Chief
Financial Officer (Key Managerial Personnel) of the Company w.e.f. August 2, 2021.
Consequent to the resignation of Mr. Vikas Bhatia, Mr. Rajesh Chawla was appointed as
Chief Financial Officer (Key Managerial Personnel) of the Company w.e.f. August 2, 2021 in
accordance with the provisions of Section 203 of the Act read with the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014.
Further, Mr. Kapil Agarwal, Whole-time Director and Chief Executive 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.
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://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 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
Members of the Company in their 22nd AGM held on April 17, 2017 appointed
M/s. APAS & Co., Chartered Accountants (Firm Registration Number 000340C) [converted
to "APAS & Co. LLP" (Firm Registration Number 000340C/ C400308)] 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 27th AGM of the Company to be held in the Financial Year
2022.
In terms of provisions of Section 139 of the Act and the Companies (Audit and Auditors)
Rules, 2014, due to retirement of existing Joint Statutory Auditors viz. M/s. APAS &
Co. LLP, Chartered Accountants at the ensuing AGM of the Company upon completion of their
1st term of 5 (five) years, the Board of Directors, on the recommendation of
Audit, Risk Management and Ethics Committee, at their meeting held on February 3, 2022
have recommended the appointment of M/s. O P Bagla
6 Co. LLP, Chartered Accountants (Firm Registration Number 000018N/N500091) 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 32nd AGM of
the Company to be held in the year 2027, subject to approval of Members of the Company.
Brief resume and other details of M/s. O P Bagla & Co. LLP is separately disclosed in
the Notice of ensuing AGM.
M/s. O P Bagla & Co LLP, Chartered Accountants, have consented 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, Members in their 23rd AGM held on April 17, 2018 appointed M/s.
Walker Chandiok & Co. LLP, Chartered Accountants (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 28th AGM of the Company to be held in
the Financial Year 2023. 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 2021 does not contain any
qualification, reservation or adverse remark and forms part of the Annual Report. 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, Cost Audit is not applicable on the Company for the Financial Year 2021.
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, one complaint was filed under the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the same was
closed amicably.
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 the recommendation of the Audit, Risk Management and Ethics
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 2021 is attached to this report as Annexure - C.
Risk Management
Pursuant to the provisions of Regulation 21(5) of SEBI (LODR) Regulations, the 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 monitors
and reviews 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 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 Internal
Financial Controls issued by M/s. Walker Chandiok & Co. LLP, Chartered Accountants and
M/s. APAS & 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/2021/06/ CSR-Policy-1.pdf
Annual Report on CSR activities for the Financial Year 2021 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 - D.
Directors' 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,
2021, 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, 2021 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 year under review, as stipulated
under Regulation 34(2)(e) of SEBI (LODR) Regulations, forms part of the Annual Report.
Business Responsibility Report
Business Responsibility Report for the year under review, 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 - E.
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 - F. The certificate from M/s.
Sanjay Grover & Associates, Company Secretaries confirming compliance with the
conditions of corporate governance is also attached to the Corporate Governance Report.
Award
Your Company has been awarded with best Corporate Governance award by Capital Finance
International in the category - FMCG Sector for the year ended 2021.
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 2021-22 has been paid to the National Stock
Exchange of India Limited and BSE Limited.
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://varunpepsi.com/annual-reports/
Research and 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 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 application made or any proceeding pending under Insolvency and Bankruptcy Code,
2016 as at the end of the Financial Year 2021.
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 2021 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 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 3, 2022 |
Chairman |
| Place: Gurugram |
DIN: 00003668 |
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