Varun Beverages Limited — Annual Report 2020

Feb 16, 2021

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Corporate O ff: Plot No.31, Institutional Area, Sec.-44, Gurgaon, Haryana-122002 (India) Ph.: +91-124-4643100-500 • Fax: +91-124-4643303/04 E-m ail: info@rjcorp.in • Visit us a t : www.varunpepsi.com CIN No. : L74899DL1995PLC069839

February 16, 2021

To,

National Stock Exchange of India Ltd. BSE Limited Exchange Plaza, Block G, C /l, Bandra Kurla Phiroze Jeejeebhoy Towers Complex, Bandra (E), Mumbai - 400 051 Dalai Street, Mumbai - 400 001 Email: cmlist@nse.co.in Email: corp.relations@bseindia.com Symbol: VBL___ Security Code: 540180_

Subject: Regulation 30: Outcome of the Board Meeting

Dear Sir/Madam,

The Board of Directors at their meeting held today (started at 11:00 A.M. and concluded at 11:45 A.M.) inter-alia considered and approved the following:

1. The Audited Financial Results of the Company (Standalone and Consolidated) for the Financial Year ended December 31, 2020 (Copy of the same along-with Audit Report issued by M/s. Walker Chandiok & Co., LLP, Chartered Accountants and M/s. APAS & Co., Chartered Accountants, Joint Statutory Auditors of the Company, with unmodified opinion are attached and the same are being uploaded on website of the Company).

2. To convene 26th Annual General Meeting ("AGM") of the Company on Wednesday, April 7, 2021, through Video Conferencing / Other Audio Video Means ("VC/ OAVM") facility, without the physical presence of the Members at a common venue.

3. Register of Members and Share Transfer Books of the Company shall be closed from Wednesday, March 31, 2021 to Wednesday, April 7, 2021 (both days inclusive) for the purpose of 26th AGM of the Company.

4. Appointment of M/s Alankit Assignments Limited in place of M/s KFin Technologies Private Limited (formerly Karvy Fintech Private Limited) as Registrar and Share Transfer Agent O'RTA") of the Company w.e.f. February 16, 2021 for better services. Till such time the process of change of RTA is completed, M/s KFin Technologies Private Limited will continue as RTA of the Company.

Further, please note that the Company is following 1st January to 31st December as its financial year in terms of Section 2 (41) of the Companies Act, 2013 as approved by the Company Law Board.

You are requested to take the above on record.

Yours faithfully,

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Chief Risk Officer & Group Company Secretary

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Enel.: As above

Regd. Office : F-2/7, Okhla Industrial Area Phase-1, New Delhi - 110 020 Tel. : 011-41706720-25 Fax. 26813665

VAHUN UEVSKAOtl*

VARUN BEVERAGES LIMITED

Corporate identification number: L74899DL1995PLC069839

Registered office: F-2/7, Okhla industrial Area, Phase-I, New Delhi-110020

Corporate office: RJ Corp House, Piot No-31, Institutional Area, Sector-44, Gurugram-122002 (Haryana) Tel: +91-124-4643100, Fax: +91-124-4643303, E-mail: complianceoff3cer@rjcorp.in, Website: www.varunpepsi.com

Statement of consolidated financial results for the quarter and year ended on 31 December 2020

				? in million,	except per share data
Particulars	Three months	Three months ended	Three months	Year ended on	Year ended on
	ended on	on	ended on
	31 December 2020	30 September 2020	31 December 2019	31 December 2020	31 December 2019
	(See Note 2)	(Unaudited)	(See Note 2)	(Audited)	(Audited)
1. Income
(a) Revenue from operations	13,513.39	18,395.14	12,395.35	65,557.91	72,484.58
(b) Other income	55.69	34.77	359.84	369.72	425.28
Total income	13,569.08	18,429.91	12,755.19	65,927.63	72,909.86
2. Expenses
(a) Cost of materials consumed	5,490.24	7,618.93	5,708.24	26,885.09	29.395.56
(b) Excise duty	204.48	368.80	192.90	1,056.49	1,188.80
(c) Purchases of stock-in-trade	163.39	163.51	420.22	925.87	4,237.33
(d) Changes in inventories of finished goods, stock-in-	(349.74)	227.49	(689.07)	(171.59)	(1,438.61)
trade and work-in-progress
(e) Employee benefits expense	2.317.33	2,295.67	2,236.39	8,897.36	8,108.15
(f) Finance costs	619.85	579.63	790.60	2,811.04	3,096.42
(a) Depreciation and amortisation expense	1,346.74	1,345.94	1,368.46	5,287.02	4,886.28
(h) Other expenses	3,965.44	3,912.84	3,369.29	15,946.01	16,516.82
Total expenses	13,757.73	16,512.81	13,397.03	61,637.29	65,990.75
3. (Loss)/profit before share of profit in associates,	(188.65)	1,917.10	(641.84)	4,290.34	6,919.11
exceptional items and tax (1-2)
4. Share of profit in associate	-	-	0.22	-	43.61
5. (Loss)/profit before exceptional items and tax (3+4)	(188.65)	1,917.10	(641.62)	4,290.34	6,962.72
6. Exceptional items	-	-	-	665.29	-
7. (Loss)/profit before tax (5-6)	(188.65)	1,917.10	(641.62)	3,625.05	6,962.72
8. Tax expense:
(a) Current tax	41.89	150.97	(95.36)	423.85	1,048.28
(b) Adjustment of tax relatinq to earlier periods	23.84	6.79	27.67	153.69	29.90
(c) Deferred tax	(181.96)	144.61	(34.42)	(525.20)	1,162.49
Total tax expense	(116.23)	302.37	(102.11)	52.34	2,240.67
9. Net (loss)/profit for the period (7-8)	(72.42)	1,614.73	(539.51)	3,572.71	4,722.05
10. Other comprehensive income
A Items that will not be reclassified to profit or loss	(59.78)	32.89	(5.27)	(115.38)	243.02
B Income tax relating to items that will not be reclassified	14.84	(8.36)	1.95	29.53	33.19
to profit or loss
C Items that will be reclassified to profit or loss	204.28	59.84	883.23	(531.02)	416.26
D Income tax relating to items that will be reclassified to	(178.94)	(13.94)	(205.75)	(7.64)	(96.97)
profit or loss
Total other comprehensive income	(19.60)	70.43	674.16	(624.51)	595.50
11. Total comprehensive income for the period (including	(92.02)	1,685.16	134.65	2,948.20	5,317.55
non-controlling interest) (9+10)
12. Net profit attributable to:
A Owners	(197.33)	1,530.31	(593.12)	3,289.95	4,689.75
B Non-controlling interest	124.91	84.42	53.61	282.76	32.30
13. Other comprehensive income attributable to:
A Owners	(19.59)	70.39	674.18	(624.57)	595.52
B Non-controlling interest	(0.01)	0.04	(0.02)	0.06	c\T o o
14. Total comprehensive income attributable to:
A Owners	(216.92)	1,600.70	81.06	2,665.38	5,285.27
B Non-controlling interest	124.90	84.46	53.59	282.82	32.28
15. Paid-up equity share capital (face value of ? 10 each)	2,886.89	2,886.89	2,886.89	2,886.89	2,886.89
16. Other equity				32,353.12	30,397.33
17. Earnings per share (of ? 10/- each) (not annualised for
quarters):
(a) Basic	(0.68)	5.30	(2.05)	11.40	16.83
(b) Diluted	(0.68)	5.30	(2.05)	11.40	16.83
See accompanying notes

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2.

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VARUN BEVERAGES LIMITED

Corporate identification number: L74899DL1995PLC069839

Registered office: F-2/7, Okhla Industrial Area, Phase-I, New Delhi-110020 Corporate office: RJ Corp House, Plot No-31, Institutional Area, Sector-44, Gurugram-122002 (Haryana) Tel: +91-124-4643100, Fax: +91-124-4643303, E-mail: complianceofficer@rjcorp.in, Website: www.varunpepsi.com

Statement of consolidated assets and liabilities

________________	________________	________________	________________	^ in million
		As at	As at
		31 December 2020	31 December	2019
_________ (Audited)__ (Audited)___
Assets
Non-current assets
(a) Property, plant and equipment		58,271.88		58,925.02
(b) Capital work-in-progress		668.15		638.24
(c) Goodwill		242.30		242.30
(d) Other intangible assets		5,572.01		5,623.11
(e) Financial assets
(i) Investments		0.01		0.01
(ii) Loans		417.89		445.48
(iii) Others		1.21		8.90
(f) Deferred tax assets (Net)		110.18		128.48
(g) Other non-current assets		1,303.44		1,153.96
	Total non-current assets (A)	66,587.07		67,165.50
Current assets
(a) Inventories		9,288.04		8,815.13
(b) Financial assets
(i) Trade receivables		2,417.97		1,725.55
(ii) Cash and cash equivalents		1,045.58		1,379.68
(iii) Bank balances other than (ii) above		854.92		331.09
(iv) Loans		100.16		69.37
(v) Others		1,670.04		2,189.83
(c) Current tax assets (Net)		102.19		10.23
(d) Other current assets		2,517.86		2,197.96
	Total current assets (B)	17,996.76		16,718.84
	Total assets (A+B)	84,583.83		83,884.34
Equity and liabilities
Equity
(a) Equity share capital		2,886.89		2,886.89
(b) Other equity		32,353.12		30,397.33
Equity attributable to owners of	the Company	35,240.01		33,284.22
(c) Non-controlling interest		647.88		306.79
	Total equity (C)	35,887.89		33,591.01
Liabilities
Non-current liabilities
(a) Financial liabilities
(i) Borrowings		19,796.22		23,553.76
(ii) Other financial liabilities		244.39		-
(b) Provisions		2,039.06		1,703.35
(c) Deferred tax liabilities (Net)		2,259.43		2,825.07
(d) Other non-current liabilities		7.34		8.23
	Total non-current liabilities (D)	24,346.44		28,090.41
Current liabilities
(a) Financial liabilities
(i) Borrowings		7,138.58		4,671.54
(ii) Trade payables
(a) Total outstanding dues of	micro enterprises and small	93.70		26.14
enterprises
(b) Total outstanding dues of	creditors other than micro	5,020.15		4,750.47
enterprises and small enterprises
(iii) Other financial liabilities		8,543.51		10,258.13
(b) Other current liabilities		3,182.92		2,044.85
(c) Provisions		331.72		299.79
(d) Current tax liabilities (Net)		38.92		152.00
	Total current liabilities (E)	24,349.50		22,202.92
	Total liabilities (F=D+E)	48,695.94		50,293.33
	Total equity and liabiiities(C+F)	84,583.83		83,884.34

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Varurt Beverages Limited Consolidated Cash Flow Statement

(Indirect Method)________________ ( t in million)	(Indirect Method)________________ ( t in million)	(Indirect Method)________________ ( t in million)
Particulars	Year ended	Year ended
	31 December 2020	31 December 2019
	(Audited)	(Audited)
A. Operating activities
Profit before tax and share of profit in associate	3,625.05	6,919.11
Adjustments to reconcile profit before tax to net cash flows:
Depreciation on property, plant and equipment	5,231.91	4,826.45
Amortisation of intangible assets	55.11	59.83
Exceptional items	665.29	-
interest expense at amortised cost	2,729.82	3,007.53
Interest income at amortised cost	(88.86)	(59.56)
Dividend income from current investment	-	(0.20)
Gain on acquisition of control over existing associate	-	(158.11)
Profit on sale of current investments	-	(1.38)
Excess provisions written back	-	(151.83)
Loss/(gain) on disposal of property, plant and equipment (Net)	14.35	(16.05)
Bad debts and advances written off	11.94	4.23
Allowance for expected credit loss	53.09	188.09
Unrealised foreign exchange fluctuation	(294.20)	486.22
Operating profit before working capital changes	12,003.50	15,104.33
Working capital adjustments
Increase in inventories	(472.91)	(1,845.53)
Increase in trade receivables	(757.45)	(322.11)
Decrease/(increase) in current and non-current financial assets and other current	244.68	(1,024.96)
and non-current assets
(DecreaseJ/increase in current financial liabilities and other current and non-	(122.76)	2,341.41
current liabilities and provisions
Total cash from operations	10,895.06	14,253.14
Income tax paid	(775.19)	(1,201.15)
Net cash flows from operating activities (A)	10,119.87	13,051.99
B. Investing activities
Purchase of property, plant and equipment and intangible assets (including	(5,596.74)	(7,536.27)
adjustment on account of capital work-in-progress, capital advance paid and capital
creditors)
Proceeds from disposal of property, plant and equipment and intangible assets	240.59	205.50
Change in advance received for capital assets	1,074.43	-
Acquisition under business combination	-	(16,251.55)
Purchase of investment in associate (Net of cash acquired)	-	(83.37)
Government grant related to assets received	-	251.05
Interest received	86.90	46.22
Dividend income from current investment	-	0.20
Purchase of current investments	-	(730.00)
Proceeds from sale of current investments	-	731.38
(lncrease)/decrease in other bank balances	(516.14)	174.35
Net cash used in investing activities (B)	(4,710.96)	(23,192.49)
C. Financing activities
Proceeds from long term borrowings	7,734.82	18,695.79
Repayment of long term borrowings	(12,332.25)	(13,097.79)
Repayment of lease liabilities	(111.55)	~
Repayment of deferred payment liabilities	-	(433.87)
Proceeds from short term borrowings (Net)	2,467.04	888.62
Proceeds from issue of share capital (including share premium thereon)	-	9,001.80
Interest paid (inclusive of interest paid on lease liabilities ? 29.56	(2,773.51)	(3,010.98)
(31 December 2019: Nil))
Share issue expenses paid	-	(164.36)
Dividends paid	(721.72)	(690.12)
Dividend distribution tax paid	-	(91.73)
Net cash flows (used in)/from financing activities (C)	(5,737.17)	11,097.36
Net change in cash and cash equivalents (D=A+B+C)	(328.26)	956.86
Cash and cash equivalents at the beginning of year (E)	1,379.68	429.36
Unrealised exchange differences on translation of cash and cash equivalent in	(5.84)	(6.54)
subsidiary (F)
Cash and cash equivalents at the end of year (G= D+E+F)	1,045.58	1,379.68

Note:

(a) Non-cash changes in liabilities arising from financing activities pertains to impact of fair value changes and foreign exchange fluctyatiaos^which are considered to be insignificant.

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SIGNED FOR IDENTIFICATION '.ft PURPOSES ONLY m

H

VARUN BEVERAGES LIMITED

Corporate identification number: L74899DL1995PLC069839

Registered office: F-2/7, Okhla Industrial Area, Phase-I, New Delhi-t 10020

Corporate office: RJ Corp House, Piot No-31, Institutional Area, Sector-44, Gurugram-122002 (Haryana) Tel: +91-124-4643100, Fax: +91-124-4643303, E-mail: compiianceofficer@rjcorp.in, Website: www.varunpepsi.com

Statement of standalone financial results for the quarter and year ended on 31 December 2020

				? in million,	except per share data
Particulars	Three months ended	Three months ended	Three months ended	Year ended on	Year ended on
	on	on	on
	31 December 2020	30 September 2020	31 December 2019	31 December 2020	31 December 2019
	(See Note 2)	(Unaudited)	(See Note 2)	(Audited)	(Audited)
1. Income
(a) Revenue from operations	8.376.40	13,145.55	8,356.05	48,764.51	56,156.64
(b) Other income	299.57	7.82	591.09	719.92	980.07
Total income	8,675.97	13,153.37	8,947.14	49,484.43	57,136.71
2. Expenses
(a) Cost of materials consumed	3,566.48	5,981.66	3,952.76	21,313.31	23,480.22
(b) Purchase of stock-in-trade	199.65	123.35	281.36	874.83	3.963.29
(c) Changes in inventories of finished goods, work-in-	(390.04)	43.45	(716.45)	(31.37)	(1,324.13)
progress and stock-in-trade
(d) Employee benefits expense	1,705.16	1.773.32	1,785.50	6,950.64	6,308.13
(e) Finance costs	557.62	515.30	674.34	2,490.15	2,802.48
(f) Depreciation and amortisation expense	1,030.22	1,044.78	1,093.22	4,128.17	3,872.02
(q) Other expenses	2,668.13	2,628.55	2.664.45	11,066.61	11,691.79
Total expenses	9,337.22	12,110.41	9,735.18	46,792.34	50,793.80
3. (Lossl/profit before exceptional items and tax (1-2)	(661.25)	1,042.96	(788.04)	2,692.09	6,342.91
4. Exceptional items	-	-	-	665.29	-
5. (Lossl/profit before tax (3-4)	(661.25)	1,042.96	(788.04)	2,026.80	6,342.91
6. Tax expense
(a) Current tax	4.10	118.71	(124.42)	269.80	948.70
(b) Adjustment of tax relatinq to earlier periods	14.50	-	9.86	14.50	9.86
(c) Deferred tax	(161.01)	129.35	(131.04)	(521.79)	898,88
Total tax expense	(142.41)	248.06	(245.60)	(237.49)	1,857.44
7. Net (lossl/profit after tax (5 - 6)	(518.84)	794.90	(542.44)	2,264.29	4,485.47
8. Other comprehensive income
A. Items that will not be reclassified to profit or loss	(60.00)	32.52	(5.19)	(117.51)	249.84
B. Income tax relating to items that will not be reclassified to	14.84	(8.33)	1.81	29.58	33.05
profit or loss
Total other comprehensive income	(45.16)	24.19	(3.38)	(87.93)	282.89
9. Total comprehensive income for the period (7+8)	(564.00)	819.09	(545.82)	2,176.36	4,768.36
10. Paid-up equity share capital (face value of? 10 each)	2,886.89	2,886.89	2,886.89	2,886.89	2,886.89
11. Other equity				37,230.78	35,784.28
12. Earnings pershare(oK 10/- each) (not annualised for
quarters):
(a) Basic	(1.80)	2.75	(1.88)	7.84	16.10
(b) Diluted	(1.80)	2.75	(1.88)	7.84	16.10
See accompanying notes

2 D E M T IF IC A T ! O N

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VAKUK t*CVtKA£)t.»

VARUN BEVERAGES LIMITED

Corporate identification number: L74899DL1995PLC069839

Registered office: F-2/7, Okhla Industrial Area, Phase-I, New Delhi-110020 Corporate office: RJ Corp House, Plot No-31, Institutional Area, Sector-44, Gurugram-122002 (Haryana) Tel: +91-124-4643100, Fax: +91-124-4643303, E-mail: complianceofficer@rjcorp.in, Website: www.varunpepsi.com

Statement of standalone assets and liabilities

				________f_ in million	________f_ in million
				As at As at
			31	December 2020 31 December	2019
				(Audited) (Audited)
Assets
Non-current assets
(a) Property, plant and equipment				47,061.67	48,399.67
(b) Capital work-in-progress				390.05	585.75
(c) Goodwill				19.40	19.40
(d) Other intangible assets				5,553.03	5,598.47
(e) Investment in subsidiaries and associates				13,521.64	9,077.83
(f) Financial assets
(i) Investments				0.01	0.01
(ii) Loans				2,700.50	6,042.77
(iii) Others				1.21	8.90
(g) Other non-current assets				1,053.48	916.91
	Total non-current assets (A)			70,300.99	70,649.71
Current assets
(a) Inventories				6,790.61	6,729.83
(b) Financial assets
(i) Trade receivables				1,705.29	1,305.31
(ii) Cash and cash equivalents				364.04	323.51
(iii) Bank balances other than (ii) above				0.72	0.65
(iv) Loans				99.94	351.71
(v) Others				2,130.20	2,820.09
(c) Current tax assets (Net)				88.80	-
(d) Other current assets				1,485.15	1,554.83
			Total current assets (B)	12,664.75	13,085.93
			Total assets (A+B)	82,965.74	83,735.64
Equity and liabilities
Equity
(a) Equity share capital				2,886.89	2,886.89
(b) Other equity				37,230.78	35,784.28
			Total equity (C)	40,117.67	38,671.17
Liabilities
Non-current liabilities
(a) Financial liabilities
(i) Borrowings				19,543.51	22,917.07
(ii) Other financial liabilities				79.50	-
(b) Provisions				1,931.60	1,606.73
(c) Deferred tax liabilities (Net)				2,209.92	2,761.29
(d) Other non-current liabilities				7.34	8.23
	Total non-current liabilities (D)			23,771.87	27,293.32
Current liabilities
(a) Financial liabilities
(i) Borrowings				6,355.40	4,110.44
(ii) Trade payables
(a) Total outstanding dues of micro enterprises and small				90.61	17.79
enterprises
(b) Total outstanding dues of creditors other than micro				2,630.07	3,160.99
enterprises and small enterprises
(iii) Other financial liabilities				7,415.98	8,485.19
(b) Other current liabilities				2,261.30	1,593.72
(c) Provisions				322.84	288.79
(d) Current tax liabilities (Net)				-	114.23
		Toatl current liabilities (E)		19,076.20	17,771.15
			Total liabilities (F=D+E)	42,848.07	45,064.47
	Total	equity and liabilities (C+F)		82,965.74	83,735.64
See accompanying notes
		S S o Y L L r 7 '
	identification-
	PURPOSES ONLY

Varun Beverages Limited Standalone Cash Flow Statement

(Indirect Method)___________	(Indirect Method)___________	(Indirect Method)___________	in million)
Particulars	Year ended		Year ended
	31 December 2020	31	December 2019
	(Audited)		(Audited)
A. Operating activities
Profit before tax	2,026.80		6,342.91
Adjustments to reconcile profit before tax to net cash flows:
Depreciation on property, plant and equipment	4,080.77		3,820.72
Amortisation of intangible assets	47.40		51.30
Exceptional items	665.29		-
Interest expense at amortised cost	2,421.90		2,715.81
Interest income at amortised cost	(251.77)		(276.93)
Dividend income from non-current investment in subsidiary	(202.31)		(248.80)
Gain on disposal of property, plant and equipment (Net)	(5.35)		(45.06)
Dividend income from current investments	-		(0.20)
Bad debts and advances written off	6.59		1.97
Excess provisions written back	-		(150.18)
Profit on sale of current investments	-		(1.38)
Guarantee commission received	(36.13)		(41.80)
Unrealised foreign exchange fluctuation	(68.04)		(48.60)
Allowance for expected credit loss	7.56		-
Operating profit before working capital changes	8,692.71		12,119.76
Working capital adjustments:
Increase in inventories	(60.78)		(1,469.90)
(lncrease)/decrease in trade receivables	(414.13)		77.61
Decrease/(increase) in current and non-current financial assets and other	625.05		(930.45)
current and non-current assets
(Decrease)/increase in current financial liabilities and other current and non-	(1,169.90)		1,951.31
current liabilities and provisions
Total cash from operations	7,672.95		11,748.33
Income tax paid	(476.21)		(1,101.39)
Net cash flows from operating activities (A)	7,196.74		10,646.94
B. Investing activities
Purchase of property, plant and equipment and intangible assets (including	(3,466.76)		(6,516.70)
adjustment on account of capital work-in-progress, capital advance paid and
capital creditors)
Proceeds from disposal of property, plant and equipment and intangible	223.15		216.43
assets
Loan given to a subsidiary	(435.39)		(211.23)
Redemption of preference shares (classified as loan given to subsidiary)	-		89.15
Change in advance received for capital assets	1,074.43		.
Acquisition under business combination	-		(16,251.55)
Purchase of investments in subsidiaries	-		(150.38)
Government grant related to assets received	-		251.05
Proceeds from sale of current investments	-		731.38
Purchase of current investments	-		(730.00)
Decrease in other bank balances	7.58		-
Guarantee commission received	70.54		19.83
Interest received	54.52		35.14
Dividend income from current investment	-		0.20
Dividend income from non-current investment in subsidiary	192.19		223.27
Net cash used in investing activities (B)	(2,279.74)		(22,293.41)
C. Financing activities
Proceeds from long term borrowings	7,800.45		18,373.71
Repayment of long term borrowings	(11,719.09)		(12,264.34)
Repayment of lease liabilities	(74.80)		-
Repayment of deferred payment liabilities	-		(433.87)
Proceeds from short term borrowings (Net)	2,244.96		921.69
Proceeds from issue of share capital (including share premium thereon)	-		9,001.80
Interest paid (inclusive of interest paid on lease liabilities ? 13.57	(2,406.27)		(2,705.71)
(31 December 2019: Nil))
Share issue expenses paid	-		(164.36)
Dividends paid	(721.72)		(684.96)
Dividend distribution tax paid	-		(91.73)
Net cash flows (used in)/from financing activities (C)	(4,876.47)		11,952.23
Net change in cash and cash equivalents (D=A+B+C)	40.53		305.76
Cash and cash equivalents at the beginning of year (E)	323.51		17.75
Cash and cash equivalents at the end of year (D+E)	364.04		323.51

Notes:

(a) Excludes non-cash transaction of conversion of loans into equity investments.

(b) Non-cash changes in liabilities arising from financing activities pertains to impact of fair value changes and foreign ange fluctuations which are considered to be insignificant.

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SIGNED FOR IDENTIFICATION Q PURPOSES ONLY J O

7

VAHUNBCVfcKA&tS-

VARUN BEVERAGES LIMITED

Corporate identification number: L74899DL1995PLC069839

Registered office: F-2/7, Okhla Industrial Area, Phase-I, New Delhi-110020

Corporate office: RJ Corp House, Plot No-31, Institutional Area, Sector-44, Gurugram-122002 (Haryana) Tel: +91-124-4643100, Fax: +91-124-4643303, E-mail: complianceofficer@rjcorp.in, Website: www.varunpepsi.com

(? in million, except per share data)

Notes:

1. These standalone and consolidated financial results for the quarter and year ended on 31 December 2020 have been reviewed and recommended for approval by the Audit, Risk Management and Ethics Committee and accordingly approved by the Board of Directors of Varun Beverages Limited (“VBL” or “the Company”) at their respective meetings held on 16 February 2021. The Statutory Auditors have audited the annual financial results.

2. These financial results have been prepared in accordance with the recognition and measurement principles of applicable Indian Accounting Standards ('Ind AS') notified under the Companies (Indian Accounting Standards) Rules, 2015 as specified in section 133 of the Companies Act, 2013 (read with SEBI Circular CIR/CFD/FAC/62/2016 dated 05 July 2016 and other recognised accounting practices and policies). The figures for the quarter ended 31 December 2020 and 31 December 2019 are the balancing figures between the audited figures in respect of full financial year and the published year to date figures upto the third quarter of the relevant financial year, which were subject to limited review.

3. VBL follows calendar year as its financial year as approved by the Company Law Board, New Delhi.

4. The business activities of the Company and its subsidiaries (together referred to as the "Group") predominantly fall within a single primary business segment viz. manufacturing and sale of beverages. There is no separate reportable business segment. The Group operates in two principal geographical areas, i.e., in India, its home country, and in other countries. The aforesaid is in line with review of operating results by the chief operating decision maker. The sale of products of the Group is seasonal.

5. The outbreak of Coronavirus disease (COVID-19) pandemic globally and in India has caused significant disturbances and slowdown of economic activity. The nationwide lockdowns ordered by the Governments in the first half of the year has resulted in operating constraints leading to significant reduction in economic activities and also the business operation of the Company in terms of sales. However, phased wise nationwide unlocking ordered by the Governments has resulted in signs of improvement in economic activities consequent to which our business operations have also shown uptick during the second half of the year. The management has considered the possible effects that may result from the pandemic on the carrying amount of receivables including contract assets, goodwill, intangibles, inventories and investments. Based on the current indicators of future economic conditions, the management expects to recover the carrying amount of these assets. However, the management will continue to closely monitor any material changes to future economic conditions depending upon how the situation evolve henceforth.

6. On 20 September 2019, vide the Taxation Laws (Amendment) Ordinance 2019, the Government of India inserted Section 115BAA in the Income Tax Act,1961 which provides domestic companies a non-reversible option to pay corporate tax at reduced rates effective 01 April 2019 subject to certain conditions.

During the quarter ended 31 March 2020, the Company made an assessment of the impact of Ordinance and decided to continue with the existing tax structure until utilisation of accumulated minimum alternative tax (MAT) credit and expiry of other tax benefits/holidays available. In accordance with the Ind AS 12 "Income Taxes", the Company is also required to remeasure its deferred tax balances, for amounts that are expected to reverse in future when the Company would migrate to the new tax regime. The Company has remeasured its outstanding deferred tax balances and written back an amount of ? 731.85 to the Statement of Profit and Loss.

1. The National Company Law Tribunal, through its order dated 22 May 2020 has approved the scheme of amalgamation of the subsidiaries of the Company, namely, Angelica Technologies Private Limited ("Angelica") with Lunarmech Technologies Private Limited ("Lunarmech") (subsidiary of Angelica Technologies Private Limited). The approved scheme of amalgamation has been filed with the Registrar of Companies on 07 July 2020. This has no impact on the consolidated financial results of the Group.

2. The Group has adopted Ind AS 116 "Leases" w.e.f. 01 January 2020, as notified by the Ministry of Corporate Affairs (MCA) in the Companies (Indian Accounting Standard) Amendment Rules, 2019, using modified retrospective method with right-of-use asset recognized at an amount equal to the lease liability in the balance sheet on the initial date of application. The adoption of this standard did not have any material impact on the profit of the current year.

3. The exceptional items for the year ended 31 December 2020, represents write off of certain plant and equipment, glass bottles and plastic shells which are not in use. In quarter ending 31 March 2020, the Company has provided for the impairment of these assets which are subsequently written

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Place : Gurugram Dated : 16 February 2021

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For and on behalf of Board of Directors of Varun Beverages Limited „ -3Y Raj Gandhi Whole Time Director

IDENTIFICATION PURPOSES ONLY

G LJ

Independent Auditor’s Report on Consolidated Annual Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended)

To the Board of Directors of Varun Beverages Limited

Opinion

1. We have audited the accompanying consolidated annual financial results (‘the Statement’) of Varun Beverages Limited (‘the Holding Company’) and its subsidiaries (the Holding Company and its subsidiaries together referred to as ‘the Group’), (refer Annexure 1 for the list of subsidiaries included in the statement) for the year ended 31 December 2020, attached herewith, being submitted by the Holding Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) (‘Listing Regulations’), including relevant circulars issued by the SEBI from time to time.

2. In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the reports of one of the joint auditors, APAS & Co. and other auditors on separate audited financial results of the subsidiaries, as referred to in paragraph 12 below, the Statement:

3. (i) includes the annual financial results of the entities listed in Annexure 1;

4. (ii) presents financial results in accordance with the requirements of Regulation 33 of the Listing Regulations; and

5. (iii) gives a true and fair view in conformity with the applicable Indian Accounting Standards (‘Ind AS’) prescribed under Section 133 of the Companies Act, 2013 (‘the Act’), read with relevant rules issued thereunder, and other accounting principles generally accepted in India, of the consolidated net profit after tax and other comprehensive income and other financial information of the Group, for the year ended 31 December 2020.

Basis for Opinion

1. We conducted our audit in accordance with the Standards on Auditing (‘SAs’) specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Statement section of our report. We are independent of the Group, in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (‘the ICAI’) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act, and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us and that obtained by one of the joint auditors, APAS & Co. and the other auditors in terms of their reports referred to in paragraph 12 of the Other Matter section below, is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of Management and Those Charged with Governance for the Statement

1. The Statement, which is the responsibility of the Holding Company’s management and has been approved by the Holding Company's Board of Directors, has been prepared on the basis of the consolidated annual audited financial statements. The Holding Company’s Board of Directors is responsible for the preparation and presentation of the Statement that gives a true and fair view of the consolidated net profit after tax and other comprehensive income, and other financial information of the Group in accordance with the accounting principles generally accepted in India, including the Ind AS prescribed under section 133 of the Act, read with relevant rules issued thereunder and other accounting principles generally accepted in India and in compliance with Regulation 33 of the Listing Regulations. The Holding Company’s Board of Directors is also responsible for ensuring accuracy of records including financial information considered necessary for the preparation of the Statement. Further, in terms of the provisions of the Act, the respective Board of Directors of the companies included in the Group covered under the Act, are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding of the assets of the Group, and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively, for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial results, that give a true and fair view and are free from material misstatement, whether due to fraud or error. These financial results have been used for the purpose of preparation of the Statement by the Directors of the Holding Company, as aforesaid.

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Independent Auditor’s Report on Consolidated Annual Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) (Cont’d)

1. In preparing the Statement, the respective Board of Directors of the companies included in the Group, are responsible for assessing the ability of the Group, to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless the respective Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

2. The respective Board of Directors of the companies included in the Group, are responsible for overseeing the financial reporting process of the companies included in the Group.

Auditor’s Responsibilities for the Audit of the Statement

1. Our objectives are to obtain reasonable assurance about whether the Statement as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with Standards on Auditing, specified under section 143(10) of the Act, will always detect a material misstatement, when it exists. Misstatements can arise from fraud or error, and are considered material if, individually, or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this Statement.

2. As part of an audit in accordance with the Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

3. Identify and assess the risks of material misstatement of the Statement, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

4. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Holding Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls;

5. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management;

6. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Group, to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Statement or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern;

7. Evaluate the overall presentation, structure and content of the Statement, including the disclosures, and whether the Statement represents the underlying transactions and events in a manner that achieves fair presentation; and

8. Obtain sufficient appropriate audit evidence regarding the financial results/ financial statements of the entities within the Group, to express an opinion on the Statement. We are responsible for the direction, supervision and performance of the audit of financial information of such entities included in the Statement, of which we are the independent auditors. For the other entities included in the Statement, which have been audited by one of the joint auditors, APAS & Co. and the other auditors, joint auditor and such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.

9. We communicate with those charged with governance of the Holding Company and such other entities included in the Statement, of which we are the independent auditors, regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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Independent Auditor’s Report on Consolidated Annual Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) (Cont’d)

1. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

2. We also performed procedures in accordance with SEBI Circular CIR/CFD/CMD1/44/2019 dated 29 March 2019, issued by the SEBI under Regulation 33 (8) of the Listing Regulations, to the extent applicable.

Other Matters

1. We did not audit the annual financial results of nine subsidiaries included in the Statement, whose financial information reflects total assets of? 18,652.12 million as at 31 December 2020, total revenues of? 19,044.80 million, total net profit after tax of ? 1,555.68 million total comprehensive income of ? 1,557.77 million, and cash flows (net) of ? (374.64) million for the year ended on that date, as considered in the Statement. Out of the above, annual financial results of two subsidiaries included in the Statement whose financial information reflects total assets of ? 994.48 million as at 31 December 2020, total revenues of ? 976.35 million, total net profit after tax of ? 157.95 million total comprehensive income of ? 158.08 million, and cash flows (net) of ? (14.32) million for the year ended on that date, as considered in the Statement have been audited by one of the joint auditors, APAS & Co. These annual financial results have been audited by APAS & Co. and other auditors whose audit reports have been furnished to us by the management, and our opinion in so far as it relates to the amounts and disclosures included in respect of these subsidiaries is based solely on the audit reports of APAS & Co. and other auditors, and the procedures performed by us as stated in paragraph 11 above.

2. Our opinion is not modified in respect of this matter with respect to our reliance on the work done by and the reports of the other auditors.

3. The Statement includes the consolidated financial results for the quarter ended 31 December 2020, being the balancing figures between the audited consolidated figures in respect of the full financial year and the published unaudited year-to-date consolidated figures up to the third quarter of the current financial year, which were subject to limited review by us.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm Registration No.: 001076N/N500013

iviemoersnip i\io .. ou ioo i ^ \ J D M : X ^ 0 i S 3 l A A A A A 0 Q D q i

Place: Gurugram Date: 16 February 2021

For APAS & Co.

Chartered Accountants Firm Registration No: 000340C

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----- Start of picture text -----

~
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O

Sumit Kathuria

Partner Membership No.: 520078 ~ U D lN :2 l5 2 _ 0 0 ” T§ 6

Place: Gurugram Date: 16 February 2021

L-41 Connaught Place New Delhi 110 001

606, 6th Floor, PP City Centre, Road No. 44, Pitampura, New Delhi 110 034

Independent Auditor’s Report on Consolidated Annual Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) (Cont’d)

Annexure 1

List of entities included in the Statement

Holding Company

1. Varun Beverages Limited

Subsidiaries

1. Varun Beverages (Nepal) Private Limited

2. Varun Beverages (Lanka) Private Limited

3. Varun Beverages Morocco SA

4. Ole Spring Bottlers (Private) Limited

5. Varun Beverages (Zambia) Limited

6. Varun Beverages (Zimbabwe) (Private) Limited

7. Varun Beverages (Botswana) (Proprietary) Limited (till 12 May 2020)

8. Angelica Technologies Private Limited (amalgamated with Lunarmech Technologies Private Limited by NCLT order dated 22 May 2020)

9. Lunarmech Technologies Private Limited

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I t

Independent Auditor’s Report on Standalone Annual Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended)

To the Board of Directors of Varun Beverages Limited

Opinion

1. We have audited the accompanying standalone annual financial results (‘the Statement’) of Varun Beverages Limited (‘the Company’) for the year ended 31 December 2020, attached herewith, being submitted by the Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) (‘Listing Regulations’), including relevant circulars issued by the SEBI from time to time.

2. In our opinion and to the best of our information and according to the explanations given to us, the Statement:

3. (i) is presented in accordance with the requirements of Regulation 33 of the Listing Regulations, read with SEBI Circular CIR/CFD/FAC/62/2016 dated 5 July 2016 (hereinafter referred to as ‘the SEBI Circular’); and

4. (ii) gives a true and fair view in conformity with the applicable Indian Accounting Standards (‘Ind AS’) prescribed under Section 133 of the Companies Act, 2013 (‘the Act’), read with relevant rules issued thereunder, and other accounting principles generally accepted in India, of the standalone net profit after tax and other comprehensive income and other financial information of the Company for the year ended 31 December 2020.

Basis for Opinion

1. We conducted our audit in accordance with the Standards on Auditing (‘SAs’) specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Statement section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (‘the ICAI’) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us, is sufficient and appropriate to provide a basis for our opinion.

Management’s and Those Charged with Governance Responsibilities for the Statement

1. This Statement has been prepared on the basis of the standalone annual financial statements. The Company’s Board of Directors is responsible for the preparation and presentation of the Statement that gives a true and fair view of the net profit and other comprehensive income and other financial information of the Company in accordance with the accounting principles generally accepted in India, including Ind AS prescribed under Section 133 of the Act, read with relevant rules issued thereunder and other accounting principles generally accepted in India, and in compliance with Regulation 33 of the Listing Regulations including SEBI Circular. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Statement that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

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Independent Auditor’s Report on Standalone Annual Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) (Cont’d)

1. In preparing the Statement, the Board of Directors is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern, and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

2. The Board of Directors is also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Statement

1. Our objectives are to obtain reasonable assurance about whether the Statement as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with Standards on Auditing, specified under section 143(10) of the Act, will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this Statement.

2. As part of an audit in accordance with the Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

3. Identify and assess the risks of material misstatement of the Statement, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

4. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls;

5. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management;

6. Conclude on the appropriateness of the management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Statement or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern; and

7. Evaluate the overall presentation, structure and content of the Statement, including the disclosures, and whether the Statement represents the underlying transactions and events in a manner that achieves fair presentation.

8. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

9. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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Independent Auditor’s Report on Standalone Annual Financial Results of the Company Pursuant to the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended) (Cont’d)

Other Matter

1. The Statement includes the financial results for the quarter ended 31 December 2020, being the balancing figures between the audited figures in respect of the full financial year and the published unaudited year-to-date figures up to the third quarter of the current financial year, which were subject to limited review by us.

For Walker Chandiok & Co LLP

Chartered Accountants Firm Registration No: 001076N/N500013

For APAS & Co.

Chartered Accountants Firm Registration No: 00

Kumar

mbership No.: 501531 :2 i£ o | S 3 i A A A A

Place: Gurugram Date: 16 February 2021

L-41 First Floor, Connaught Place New Delhi 110001

Sumit Kathuria

Partner Membership No.: 52007' UDIN: S T ot>1 % (\p \

Place: Gurugram Date: 16 February 2021

606, 6th Floor, PP City Centre, Road No. 44, Pitampura, New Delhi 110034

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VRRUn B E V E R A G E S LffTlICED

Corporate Off : Plot No.31, Institutional Area, Sec.-44, Gurgaon, Haryana-122002 (India) Ph.: +91-124-4643100-500 • Fax: +91-124-4643303/04 E-mail: info@rjcorp.in • Visit us a t: www.varunpepsi.com CIN No. : L74899DL1995PLC069839

February 16, 2021

To,

National Stock Exchange of India Ltd. BSE Limited Exchange Plaza, Block G, C/l, Bandra Kurla Phiroze Jeejeebhoy Towers, Complex, Bandra (E), Mumbai - 400 051 Dalai Street, Mumbai - 400 001 Email: cmlist@nse.co.in Email: corp.relations@bseindia.com Symbol: VBL Security Code: 540180

Subject: Declaration under Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements! Regulations, 2015

Dear Sir/Madam,

Pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SEBI Circular No. CIR/CFD/CMD/56/2016 dated May 27, 2016, we hereby confirm that the Audit Report on the Audited Financial Results, both on Standalone and Consolidated basis, for the Financial Year ended December 31, 2020 issued by M/s. Walker Chandiok & Co. LLP, Chartered Accountants and M/s. APAS & Co., Chartered Accountants, Joint Statutory Auditors of the Company is WITH UNMODIFIED OPINION.

You are requested to take the above on record.

Yours faithfully, For Varun Beverages Limited '( / Ravi Batra Chief Risk Officer & Group Company Secretary

Regd. Office : F-2/7, Okhla Industrial Area Phase-1, New Delhi - 110 020 Tel. : 011-41706720-25 Fax. 26813665