Varun Beverages Ltd Directors Report

Dear Members,

Your Directors have pleasure in presenting the 31^st (Thirty First) Annual Report on the business and operations of your Company along with the Audited Financial Statements for the Financial Year ended December 31, 2025.

Financial Performance

The financial performance of your Company for the Financial Year ended December 31, 2025 is summarized below:

( in Million)

Particulars	Standalone		Consolidated
	Financial Year ended December 31, 2025	Financial Year ended December 31, 2024	Financial Year ended December 31, 2025	Financial Year ended December 31, 2024
Total Revenue	150,707.56	147,025.35	225,779.32	206,025.96
Total Expenses	115,275.10	116,325.96	185,622.57	171,680.29
Profit before tax after exceptional items	35,432.46	30,699.39	40,096.48	34,330.89
Less: Tax Expenses	8,666.04	7,495.75	9,476.06	7,988.04
Profit after tax	26,766.42	23,203.64	30,364.89*	25,946.33*
Balance brought forward from last year	158,824.03	64,261.97	159,335.27	62,868.91
Balance carried over to Balance Sheet	82,656.99	60,721.86	94,072.70	68,582.05
General Reserve	444.26	444.26	444.26	444.26
Other Reserves	97,782.75	97,657.91	94,506.10	90,308.95
Reserves & Surplus carried to Balance Sheet	180,884.00	158,824.03	189,023.06	159,335.27

*After adjustment on account of non-controlling interest.

Consolidated Financial Statements

The Consolidated Financial Statements of your Company for the Financial Year 2025 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 Companys Affairs

Your Company has presence in 26 States and 6 Union Territories in India as well as in 9 other countries through franchise rights (viz. Nepal, Sri Lanka, Morocco, Zambia, Zimbabwe, Democratic Republic of Congo, South Africa, Lesotho & Eswatini). Additionally, the Company holds distribution rights in 4 countries (viz. Namibia, Botswana, Mozambique and Madagascar). As of December 31, 2025, the Company has 50 state-of-the-art manufacturing facilities (38 in India and 12 in International Geographies).

The Company continues to create long term value through different facets of its business and improve its presence, product mix and utilisation levels. With an increasing penetration on the back of a robust distribution network and diversifying product portfolio, the Company has created a sustainable operating efficiency at its manufacturing facilities.

Key Developments

During the year under review, the following are the key developments:

? Acquisition of 50% equity share capital of Everest Industrial Lanka (Private) Limited, Sri Lanka, engaged in the business of production, manufacturing, distribution and selling of commercial visi-coolers and related accessories.

? Incorporation of a joint venture company in India i.e. White Peak Refrigeration Private Limited engaged in the business of manufacturing of visi-coolers and other refrigeration equipments etc.

? Acquisition of 14% of paid-up equity share capital of Aspirative Creative Ventures Private Limited (a special purpose vehicle to supply solar power to consumers in the State of Uttar Pradesh) for obtaining solar power for captive consumption for our facility located in Gorakhpur, Uttar Pradesh.

? Acquisition of 26% of equity share capital of Jager Renewables Two Private Limited (a special purpose vehicle to generate & supply solar power to consumers in the State of Rajasthan) to obtain solar power for captive consumption.

? Incorporation of wholly-owned subsidiary company in Kenya i.e. VBL Industries (Kenya) Limited engaged in the business of manufacturing, distribution and selling of Beverages.

? Varun Beverages Morocco SA and Varun Beverages (Zimbabwe) (Private) Limited (subsidiaries of the Company) started commercial production of PepsiCos snacks products, Cheetos.

? Varun Beverages (Zimbabwe) (Private) Limited and Varun Beverages (Zambia) Limited (subsidiaries of the Company) started distribution & selling of PepsiCos snack products in the territory of Zimbabwe and Zambia w.e.f. February 1, 2025.

? Commissioned 4 new greenfield production facilities in India at Prayagraj (Uttar Pradesh), Damtal (Himachal Pradesh), Buxar (Bihar) and Mendipathar (Meghalaya). Further, the Company has set-up backward integration facilities at Prayagraj plant in India, as well as at DRC plant in the International territory.

? Entered into an exclusive Distribution Agreement with Carlsberg Breweries A/S for their brand - Carlsberg to test market beer in the territories of certain African subsidiaries of the Company.

? Our Company, through its subsidiary, The Beverages Company Proprietary Limited entered into a share purchase agreement with Twizza Proprietary Limited (Twizza) for the purchase of 100% share capital, subject to regulatory and other approvals (if any) including but not limited to the approval of Competition Commissions of South Africa, Botswana and Eswatini. The acquisition is expected to be completed on or before June 30, 2026.

? The Company has altered its Object Clause (Main Objects) of the Memorandum of Association of the Company pursuant to a special resolution passed by the Members of the Company through Postal Ballot on November 29, 2025:

? To align the Objects of the Company with certain activities; and

? In response to the growing popularity of Ready To Drink (RTD) and variety of Alcoholic Beverages, our Company sees an opportunity for expansion into the business of RTD & Alcoholic Beverages of any type or description, including beer, wine, liquor, spirit, brandy, whisky, gin, rum, vodka in India & abroad.

Deposits

Your Company has not accepted any deposits during the year under review falling within the ambit of Section 73 of the Act and the Companies (Acceptance of Deposits) Rules, 2014.

Transfer to General Reserve

Your Company has not transferred any amount to General Reserve for the Financial Year 2025.

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 Dividend Distribution Policy to comply with Regulation 43A of SEBI (LODR) Regulations and the same is uploaded on website of the Company at https://www.varunbeverages.com/ wp-content/uploads/2023/03/10-Dividend-Distribution- Policy.pdf

Dividend

During the year under review, the Members of the Company at their AGM held on April 3, 2025 declared a final dividend of 0.50 each per Equity Share (face value of 2/- per Equity Share) for the Financial Year 2024 and the Board of Directors in their meetings held on April 30, 2025 and July 29, 2025 declared two interim dividends of 0.50 each per Equity Share (face value of 2/- per Equity Share) for the Financial Year 2025 to the eligible equity shareholders of the Company. Total cash outflow for dividend payout was 5,072.82 million during the Financial Year 2025.

Further, the Board of Directors have also recommended a final dividend of 0.50 per Equity Share (face value of

2/- per Equity Share) for the Financial Year 2025 in accordance with the Dividend Distribution Policy of the Company, subject to the approval of Members in the ensuing AGM of the Company. Total cash outflow for dividend payout would be 1,690.99 million.

Your Company has transferred the unpaid/unclaimed dividend (interim and final) to the Unclaimed Dividend Accounts of the respective Financial Years and the details of the same are uploaded on website of the Company at https://varunbeverages.com/corporate-governance/

Investor Education and Protection Fund Pursuant to the provisions of Section 124 of the Act, Investor Education and Protection Fund Authority

(Accounting, Audit, Transfer and Refund) Rules,

2016 (IEPF Rules) read with relevant circulars and amendments thereto, amount of dividend which remains unpaid/unclaimed for a period of seven years from the date of transfer to the Companys unpaid dividend account and corresponding shares on which the dividend remains unclaimed for seven consecutive years or more are required to be transferred to the Investor Education and Protection Fund (IEPF) constituted by the Central Government. Accordingly, during the year under review, your Company had transferred 1,92,960/- to IEPF (being unpaid/unclaimed interim dividend amount for FY 2018) and also transferred 4,075 equity shares (on which interim dividend for FY 2018 remained unpaid/ unclaimed for seven consecutive years) to the designated demat account of IEPF Authority and the same can be

claimed from IEPF Authority only after complying with prescribed procedure under IEPF Rules.

Acquisition Guidelines

Your Company applies stringent strategic and financial criteria to any potential acquisition or partnership and to enhance transparency, the Board of Directors of the Company have approved and adopted Acquisition Guidelines for Companys M&A activities for viable acquisitions and the same is uploaded on website of the Company at https://www.varunbeverages.com/wp-content/uploads/2023/03/9-VBL-Guidelines-for- Acquisition-in-India.pdf

Utilization of funds raised through Qualified Institutions Placement (QIP)

In compliance with the provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, SEBI (LODR) Regulations and Sections 42 & 62 of the Act and Rules made thereunder, your Company issued and allotted 132,743,362 Equity Shares of face value of 2/- each to the eligible Qualified Institutional Buyers at an issue price of

565/- per Equity Share i.e. at a premium of 563/- per Equity Share aggregating to 7,500 crore on November 19, 2024. Brief summary of utilization of funds are as follows:

S. No.	Particulars	Amount as per Placement Document ( in crore)	Actual Utilization as on 31.03.2025* ( in crore)
1.	Repayment/Prepayment, in part or in full of certain outstanding borrowings availed by the company and/or one of its subsidiaries	5,600.00	5,602.54**
2.	For general corporate purposes and inorganic acquisitions	1,839.00	1,835.92
3.	QIP Issue Expense	61.00	61.54**
	Total	7,500.00	7,500.00

*The balance funds were fully utilized during the quarter ended 31.03.2025 as per the objects disclosed in the Offer documents.

**Incremental amount utilized through general corporate purposes allocated funds.

Share Capital

The Authorized Share Capital of the Company is

10,000,000,000/- (Rupees Ten Billion only) divided into 5,000,000,000 (Five Billion) Equity Shares of face value of 2/- (Rupees Two only) each. During the year under review, 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/changed from 6,763,020,034/- (Rupees Six Billion Seven Hundred Sixty Three Million Twenty Thousand and Thirty Four only) divided into 3,381,510,017 (Three Billion Three Hundred Eighty One Million Five Hundred Ten

Thousand and Seventeen) Equity Shares of face value of

2/- (Rupees Two only) each to 6,763,977,538/- (Rupees Six Billion Seven Hundred Sixty Three Million Nine Hundred Seventy Seven Thousand and Five Hundred Thirty Eight only) divided into 3,381,988,769 (Three Billion Three Hundred Eighty One Million Nine Hundred Eighty Eight Thousand and Seven Hundred Sixty Nine) Equity Shares of face value of 2/- (Rupees Two only) each due to allotment of 478,752 (Four Hundred Seventy Eight Thousand and Seven Hundred Fifty Two) Equity Shares of face value of

2/- (Rupees Two only) each of the Company in aggregate upon exercise of stock options vested under Employees Stock Option Scheme 2016.

Employees Stock Option Scheme

Your Company has Employees Stock Option Scheme 2016 (ESOP Scheme 2016) i.e. in compliance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended from time to time (SEBI ESOP Regulations) and there has been no material change to the ESOP Scheme 2016 during the year under review.

Certificate from Secretarial Auditors of the Company that ESOP Scheme 2016 has been implemented in accordance with the SEBI ESOP Regulations and the resolution(s) passed by the Members of the Company will be uploaded on website viz. https://varunbeverages.com/agm/ for inspection by Members of the Company.

The statutory disclosures as mandated under the Act and SEBI ESOP Regulations are available on website of the Company at https://varunbeverages.com/agm/

Credit Rating

During the year under review, your Companys credit ratings by CRISIL are as below:

Long Term Rating	CRISIL AAA/Stable (Upgraded from CRISIL AA+/Stable)
Short Term Rating	CRISIL A1+ (Re-affirmed)

Related Party Transactions

To comply with the provisions of Sections 177 and 188 of the Act and Rules made thereunder read with Regulation

23 of SEBI (LODR) Regulations, your Company took necessary prior (including omnibus) approval of the Audit, Risk Management and Ethics Committee before entering into related party transactions. All contracts/ arrangements/transactions entered into by the Company during the Financial Year 2025 with related parties, as defined under the Act and SEBI (LODR) Regulations, were in the ordinary course of business and on arms length basis.

During the year under review, your Company and/ or its subsidiaries have not entered into any contract/ arrangement/transaction with related parties which could be considered as material in accordance with the Policy on Related Party Transactions of the Company.

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 Companys operations. Attention of Members is drawn to the disclosure of transactions with the related parties set out in Note No. 43 of the Standalone Financial Statements forming part of the Annual Report.

Your Company has framed a Policy on Related Party Transactions in accordance with the Act and SEBI (LODR) Regulations and the Board of Directors at their meeting held on February 3, 2026 modified the above-mentioned Policy on Related Party Transactions to align with the amendments in SEBI LODR Regulations. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company/Subsidiaries and its related parties. The policy is uploaded on website of the Company at https://www. varunbeverages.com/policies/policy-on-related-party- transactions.pdf

Since all transactions which were entered into during the Financial Year 2025 were on arms 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 2025 as per Policy on Related Party Transactions, hence no detail is required to be provided in Form AOC-2 prescribed under Clause (h) of Sub- section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.

Particulars of Loans, Guarantees or Investments Details of Loans, Guarantees or Investments covered under the provisions of Section 186 of the Act are given in

the Notes to the Standalone Financial Statements.

Subsidiaries, Associates and Joint Ventures Your Company has following subsidiaries, associates and joint ventures during the year under review:

Subsidiaries

? Varun Beverages (Nepal) Private Limited;

? Varun Beverages Lanka (Private) Limited;

- Ole Springs Bottlers (Private) Limited (step-down subsidiary);

? Varun Beverages Morocco SA;

? Varun Beverages (Zambia) Limited;

? Varun Beverages (Zimbabwe) (Private) Limited;

? Varun Beverages RDC SAS;

? Varun Beverages International DMCC;

? Varun Beverages South Africa (Pty) Ltd;

? VBL Mozambique, SA;

? The Beverage Company Proprietary Limited, South Africa;

? The Beverage Company Bidco Proprietary Limited (step-down subsidiary);

? Little Green Beverages Proprietary Limited (step- down subsidiary);

? Softbev Proprietary Limited (de-registered w.e.f. 05.09.2025)(step-down subsidiary);

? Varun Foods (Zimbabwe) (Private) Limited (strike off w.e.f. 25.11.2025);

? Lunarmech Technologies Private Limited; and

? VBL Industries (Kenya) Limited (w.e.f. 19.11.2025)

Associates

? Clean Max Tav Private Limited; and

? Huoban Energy 7 Private Limited

Joint Ventures

? IDVB Recycling Operations Private Limited;

? Everest Industrial Lanka (Private) Limited (w.e.f. 27.05.2025); and

? White Peak Refrigeration Private Limited (w.e.f. 04.09.2025)

To comply with the provisions of Section 129 of the Act, a separate statement containing salient features of Financial Statements of Subsidiaries, Associates and Joint Ventures of your Company as on December 31, 2025 (which also includes their performance and financial position) in prescribed Form AOC-1 forms part of Consolidated Financial Statements and therefore not repeated here to avoid duplication. Further, contribution of Subsidiaries, Associates and Joint Ventures to the overall performance of your Company is outlined in Note No. 58 of the Consolidated Financial Statements.

Financial Statements of the aforesaid Subsidiaries, Associates and Joint Ventures companies are kept open for inspection by the Members at the Registered Office of your Company on all days except Saturday, Sunday and Public Holiday up to the date of AGM i.e. April 1, 2026 between 11:00 a.m. to 5:00 p.m. as required under Section 136 of the Act. Any Member desirous of obtaining a copy of the said Financial Statements may write to the Company at its Registered Office or Corporate Office. The Financial Statements including the Consolidated Financial Statements and all other documents required to be attached with this Report have been uploaded on website of the Company at https://varunbeverages.com/ annual-reports/

To comply with the provisions of Regulation 16(c) of SEBI (LODR) Regulations, the Board of Directors of the Company have approved and adopted a Policy for determination of Material Subsidiary and Governance of Subsidiaries and during the year under review,

none of the subsidiary was a material subsidiary of the Company in terms of the said Policy. Policy for determination of Material Subsidiary and Governance of Subsidiaries is uploaded on website of the Company at https://www.varunbeverages.com/policies/policy-on- material-subsidiary-VBL.pdf

Directors and Key Managerial Personnel

Directors

To comply with the provisions of Section 152 of the Act and in terms of the Articles of Association of the Company, Mr. Ravi Jaipuria (DIN: 00003668), Non-Executive Chairman and Mr. Raj Gandhi (DIN: 00003649), Whole- time Director are liable to retire by rotation at the ensuing AGM and being eligible, seeks re-appointment. The Board of Directors, on the recommendation of Nomination and Remuneration Committee (NRC), recommended their re-appointment for consideration by the Members at the ensuing AGM.

In terms of Regulation 17(1A) of SEBI (LODR) Regulations, the Board of Directors, on the recommendation of NRC and subject to the approval of Members of the Company, accorded its approval to continue and hold office of Non- Executive Independent Director of the Company held by Mr. Abhiram Seth (DIN: 00176144) (who will attain 75 years of age on December 8, 2026) till his current tenure of appointment i.e. upto May 1, 2028. Further, Mr. Abhiram Seth has affirmed that he is not debarred from holding the office of Independent Director by virtue of any SEBI order or any other such Authority.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI (LODR) Regulations and are in compliance with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and are not disqualified from continuing as Independent Directors. Further, the Independent Directors have also confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties as Independent Directors of the Company.

The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise and they hold highest standards of integrity (including the proficiency) and fulfils the conditions specified in the Act read with Rules made thereunder and SEBI (LODR) Regulations and are eligible & independent of the management.

None of the Directors of the Company are disqualified as per the provisions of Section 164 of the Act. The Directors of the Company have made necessary disclosures under Section 184 and other relevant provisions of the Act.

Brief resume and other details of the Directors being appointed/re-appointed at the ensuing AGM as stipulated under Secretarial Standard-2 issued by the Institute of Company Secretaries of India and Regulation 36 of the SEBI (LODR) Regulations, are separately disclosed in the Notice of ensuing AGM.

Key Managerial Personnel

Mr. Pankaj Madan was appointed as a Chief Financial Officer (CFO) and Key Managerial Personnel of the Company w.e.f. July 30, 2025 in accordance with the provisions of Section 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in place of Mr. Rajesh Chawla, who continues to discharge his responsibilities as CFO (India) of your Company.

Further, Mr. Raj Gandhi, Whole-time Director and Mr. Ravi Batra, Chief Risk Officer & Group Company Secretary, continued to be the Key Managerial Personnel of your Company in accordance with the provisions of Section 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Board Evaluation

To comply with the provisions of Section 134(3)(p) of the Act and Rules made thereunder and Regulation 17(10) of SEBI (LODR) Regulations, the Board has carried out the annual performance evaluation of the Directors individually including the Independent Directors (wherein the concerned Director being evaluated did not participate), Board as a whole and following Committees of the Board of Directors:

? Audit, Risk Management and Ethics Committee;

? Nomination and Remuneration Committee;

? Stakeholders Relationship Committee; and

? 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. During the year under review, all recommendations of Audit, Risk Management and Ethics Committee were accepted by the Board.

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 Companys Remuneration Policy for Directors, Key Managerial Personnel (KMP), Senior Management and other Employees of the Company is uploaded on website of the Company at https://www. varunbeverages.com/wp-content/uploads/2023/03/12- Remuneration-Policy.pdf. The Policy includes, inter- alia, the criteria for determining qualifications, positive attributes, independence of a Director, appointment and remuneration of Directors, KMPs, Senior Management Personnel and other employees of the Company.

Remuneration of Directors, Key Managerial Personnel and Particulars of Employees

The statement of remuneration under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached to this report as Annexure - A.

Further, as per second proviso to Section 136(1) of the Act read with Rule 5 of the aforesaid Rules, the Boards Report and Financial Statements are being sent to the Members of the Company excluding the statement of particulars of employees as required under Rule 5(2) and Rule 5(3) of the aforesaid Rules. Any member interested in obtaining a copy of the said statement may write to the Compliance Officer at complianceofficer@rjcorp.in upto the date of AGM. The said statement is also available for inspection by the Members at the Registered Office of your Company on all days except Saturday, Sunday and Public Holiday upto the date of AGM i.e. April 1, 2026 between 11:00 a.m. to 5:00 p.m.

Statutory Auditors

The Shareholders of the Company in their 27^th & 28^th AGM held on April 7, 2022 and March 27, 2023 respectively appointed M/s. O P Bagla & Co. LLP, Chartered Accountants (Firm Registration Number 000018N/N500091) and M/s. J C Bhalla & Co., Chartered Accountants (Firm Registration Number 001111N) as Joint Statutory Auditors of the Company for a period of upto 5(Five) consecutive years to hold office till the conclusion of AGM to be held

in the year 2027 and 2028 respectively. They have also confirmed that they are not disqualified from continuing as Joint Statutory Auditors of the Company.

The Statutory Auditors Report for the Financial Year 2025 does not contain any qualification, reservation or adverse remark and forms part of the Annual Report.

The Statutory Auditors and Internal Auditors have not reported any fraud under Section 143(12) of the Act.

Cost Audit

In terms of Section 148 of the Act and the Companies (Cost Records and Audit) Rules, 2014, Cost Audit is not applicable on the Company for the Financial Year 2025.

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 formulated a Policy for Prevention, Prohibition and Redressal of Sexual Harrassment at Workplace alongwith constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the same are available on website of the Company at https://www. varunbeverages.com/wp-content/uploads/2025/02/ POSH-Policy.pdf.

During the year under review, no complaint was received, disposed off and pending for more than 90(ninety) days under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Vigil Mechanism / Whistle Blower Policy Pursuant to the provisions of Section 177 of the Act and Regulation 22 of SEBI (LODR) Regulations, the Company

has adopted a Vigil Mechanism/Whistle Blower Policy

to provide a platform to the Directors and Employees of the Company to raise concerns regarding any irregularity, misconduct or unethical matters/dealings within the Company. The same is detailed in the Corporate Governance Report which forms part of this report.

During the year under review, no complaint was received and/or pending under the Vigil Mechanism/ Whistle Blower Policy of the Company.

Secretarial Auditors

The Shareholders of the Company in their 30^th AGM held on April 3, 2025 appointed M/s. Sanjay Grover & Associates, Peer Reviewed Firm of Company Secretaries in Practice (Firm Registration Number: P2001DE052900) as Secretarial Auditors of the Company for a term of upto

5(Five) consecutive years to hold office till the conclusion of AGM to be held in the Year 2030. They have also confirmed that they are not disqualified from continuing as Secretarial Auditors of the Company in terms of provisions of the Act & Rules made thereunder and SEBI (LODR) Regulations.

The Secretarial Audit Report for the Financial Year 2025 does not contain any qualification, reservation or adverse remark and is attached to this report as Annexure - B. Further, the Secretarial Auditors have not reported any fraud under Section 143(12) of the Act.

Further to the Order dated January 9, 2026 of Securities Appellate Tribunal (SAT), Company submitted the updated/revised disclosures (including intimation of termination of binding agreements for Tanzania & Ghana territories, warning letter dated August 4, 2025 of SEBI & aforesaid Order of SAT) with Stock Exchanges and SEBI on January 23, 2026.

Risk Management

The Audit, Risk Management and Ethics Committee of the Board of Directors inter-alia monitor and review the risk management plan and such other functions as assigned from time to time.

Your Company has a robust Risk Management Policy which identifies and evaluates business risks and opportunities and to comply with the provisions of Regulation 21 read with Part D of Schedule II of SEBI LODR Regulations, the same was reviewed by the Audit, Risk Management and Ethics Committee in their meeting held on February 3, 2026 without any further modification. The Company recognizes that these risks needs to be managed and mitigated to protect the interest of the stakeholders and to achieve business objectives. Also, in the opinion of the Board, there were no elements of risk identified which may threaten the existence of the Company. The risk management framework is aimed at effectively mitigating the Companys various business and operational risks through strategic actions. In line with the SEBI (LODR) Regulations, cyber security risks are also covered under Risk Management Policy of the Company which is uploaded on website of the Company at https://www. varunbeverages.com/wp-content/uploads/2023/03/22- RISK_MANAGEMENT_POLICY.pdf

Internal Financial Controls

Your Company has in place adequate Internal Financial Controls with reference to the Financial Statements. The report on Internal Financial Controls issued by M/s. J C Bhalla & Co., Chartered Accountants and M/s. O P Bagla & Co. LLP, Chartered Accountants, Joint Statutory Auditors of the Company is annexed to the Auditors 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://www. varunbeverages.com/wp-content/uploads/2023/05/24- CSR-Policy-Clear-Version.pdf. This Policy includes inter-alia the guiding principles for selection, implementation and monitoring of CSR activities of the Company.

Annual Report on CSR activities for the Financial Year 2025 as required under Sections 134 and 135 of the Act read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Rule 9 of the Companies (Accounts) Rules, 2014 is attached to this report as Annexure - C.

Directors Responsibility Statement

Pursuant to Section 134(3)(c) read with Section 134(5) of the Act, the Directors state that:

? in the preparation of the annual accounts for the Financial Year ended December 31, 2025, the applicable accounting standards have been followed along with proper explanation relating to material departures;

? 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, 2025 and of the profits of the Company for the period ended on that date;

? 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;

? the annual accounts have been prepared on a going concern basis;

? 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

? proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

Other Information

Management Discussion & Analysis Report

Management Discussion & Analysis Report for the Financial Year 2025, as stipulated under Regulation 34(2)

(e) of SEBI (LODR) Regulations, forms part of the Annual Report.

Business Responsibility and Sustainability Report

Business Responsibility and Sustainability Report (BRSR) for the Financial Year 2025 describing the initiatives taken by the Company from an Environment, Social and Governance perspective as stipulated under Regulation 34(2)(f) of SEBI (LODR) Regulations forms part of the Annual Report.

Further, your Company had taken reasonable assurance of the BRSR Core from third-party Independent Assurance provider and the same forms part of the Annual Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 is attached to this report as Annexure - D.

Corporate Governance Report

Your Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by Securities and Exchange Board of India. The report on Corporate Governance as stipulated under the SEBI (LODR) Regulations is attached to this report as Annexure - E. The certificate from M/s. Sanjay Grover & Associates, Practicing Company Secretaries confirming compliance with the conditions of corporate governance is also attached to the Corporate Governance Report.

Listing

The Equity Shares of the Company are listed on the National Stock Exchange of India Limited and BSE Limited. Both these stock exchanges have nation-wide trading terminals. Annual listing fee for the Financial Year 2025-26 has been paid to the National Stock Exchange of India Limited and BSE Limited.

Equity Shares of your Company were admitted in Future & Options (F&O) segment with National Stock Exchange of India Limited with effect from November 29, 2024 and BSE Limited with effect from December 13, 2024.

Annual Return

Pursuant to the provisions of 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://www. varunbeverages.com/annual-reports/

Research and Development

During the year under review, no Research & Development was carried out.

Cautionary Statement

Statements in the Boards Report and the Management Discussion & Analysis Report describing the Companys objectives, expectations or forecasts may be forward looking within the meaning of applicable laws and regulations. Actual results may differ from those expressed in the statement.

General

Your Directors confirm that no disclosure or reporting is required in respect of the following items as there was no transaction on these items during the year under review:

? Issue of equity shares with differential voting rights as to dividend, voting or otherwise.

? The Whole-time Directors of the Company does not receive any remuneration or commission from any of its subsidiaries.

? No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

? Issue of Sweat Equity Shares.

? No application made or any proceeding pending under Insolvency and Bankruptcy Code, 2016 as at the end of the Financial Year 2025.

? No instance of one-time settlement with any bank or financial institution.

The Company is in regular compliance of the applicable provisions of Secretarial Standards issued by the Institute of Company Secretaries of India and the Maternity Benefit Act, 1961.

No material changes and commitments have occurred after the closure of the Financial Year 2025 till the date of this Report, which would affect the financial position of your Company.

Acknowledgement

Your Companys organizational culture upholds professionalism, integrity and continuous improvement across all functions as well as efficient utilization of the Companys resources for sustainable and profitable growth.

Your Directors wish to place on record their appreciation for the sincere services rendered by employees of the Company at all levels. Your Directors also wish to place on record their appreciation for the valuable co-operation and support received from various Government Authorities, Banks/Financial Institutions and other stakeholders such as members, customers and suppliers, among others. Your Directors also commend the continuing commitment and dedication of employees at all levels which has been vital for the Companys 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, 2026 Chairman Place: Gurugram DIN: 00003668