Bottlers Nepal Limited

Annual Report 2074-75

af]6n;{ g]kfn lnld6]8sf z]o/wgL dxfg'efjx?nfO{ rfln;f}+ jflif{s ;fwf/0f

;efsf] ;"rgf
ldlt 2075 efb| 5, d+unaf/ -tbg';f/ cu:^ 21, 2018_ a;]sf] n]vfkl/Ifssf] k|ltj]bg cg'df]bg ug]{ .
;+rfns ;ldltsf] a}&ssf] lg)f{o cg';f/ o; sDkgLsf] rfln;f}+ lgDgadf]lhdsf] k|:tfj pk/ %nkmn u/L plrt b]lvPdf
jflif{s ;fwf/)f ;ef lgDg lnlvt ldlt, :yfg tyf ;dodf ;+zf]wg ;lxt jf ljgf ;+zf]wg kfl/t ug]{M
tkl;nsf ljifox? pk/ %nkmn tyf lg)f{o ug{ a:g] ePsf]
x'“bf ;DalGwt ;a} z]o/wgL dxfg'efjx?nfO{ hfgsf/L tyf æPlss[t ljlQo ljj/)f, 2075 cfiff( 32 ut] ;Ddsf] jf;nft,
pkl:ytLsf] nflu of] ;"rgf k|sflzt ul/Psf] % . 2075 cfiff( 32 ut];Ddsf] cfo ljj/)f ;f]xL ldltdf ;dfKt
ePsf] gfkmf gf]S;fg lx;fa tyf gub k|jfx ljj/)f ;lxtsf]
n]vfkl/If)f ePsf] ljQLo ljj/)f / n]vfkl/Ifssf] k|ltj]bg
ldlt, ;do / :yfg M k|fKt u/L, To; pk/ %nkmn u/L kfl/t ul/of] .Æ
ldlt M 2075,clZjg 15 -tbg';f/ 1 cS^f]a/, 2018_, ;f]daf/ -v_ sDkgL P]g, 2063 sf] bkmf 111 adf]lhd cfly{s jif{
;do M 4 ah] 2075.76 sf] nflu n]vfkl/Ifssf] lgo'QmL / lghsf]
kfl/>lds pk/ %nkmn u/L :jLs[t ug]{ .
:yfg M xf]^n ÷ofl*;g, nflhDkf^ sf&df*f}+ .
lgDgadf]lhdsf] k|:tfj pk/ %nkmn u/L plrt b]lvPdf
;+zf]wg ;lxt jf ljgf ;+zf]wg kfl/t ug]{M
;ef &Ls tf]lsPsf] ;dodf ;+rfng x'g] ePsf]n] pkl:ylt æ>L la= s] cu|jfn P)* sDkgL rf^*{ PsfpG^]G;\ -kmd{
k'l:tsf 3M00 ah] b]lv v'nf /flvg] % . /lhi^]«zg g+= 2_ ->L ljho s'df/ cu|jfn, kf^{g/_ nfO{
sDkgLsf] n]vfkl/Ifssf] ?kdf cf=j 2075.76 sf] nflu
lgo'lQm ug]{ / lghsf] kfl/>lds ?= 500,000.–-cIf]/]kL kf“r
%nkmnsf ljifo ;"rL M nfv dfq_ -Plss[t ;lxt_ -nfUg] vr{ afx]s_ -;Dk")f{ s/
1= ;fdfGo k|:tfj M ;lxt t/ Eof^ jfx]s_ n]vfkl/If)f z'Nssf] ?kdf k|bfg ug]{
lg)f{o ul/of] .Æ
-s_ cfly{s jif{ 2074¿75 sf] ;+rfnssf] k|ltj]bg kfl/t ug]{ .
3= ljljw M
-v_ k|aGw ;+rfnssf] kfl/>lds tyf cGo ;'ljwf pk/ %nkmn
u/L kfl/t ug]{ . -s_ ljljw M cWoIfsf] cg'dlt cg';f/ .
-u_ cfly{s jif{ 2074¿75 sf nflu nfefz+ pk/ %nkmn u/L
kfl/t ug]{ .
;+rfns ;dltsf] cfb]zfg';f/
2= ljz]if k|:tfj M
-s_ Plss[t ljlQo ljj/)f, 2075 cfiff( 32 ut] ;Ddsf] ==================================
jf;nft, 2075 cfiff( 32 ut];Ddsf] cfo ljj/)f ;f]xL
ldltdf ;dfKt ePsf] gfkmf gf]S;fg lx;fa tyf gub k|jfx k|tLdf adf{
ljj/)f ;lxtsf] n]vfkl/If)f ePsf] ljQLo ljj/)f / sDkgL ;lrj

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 Bottlers Nepal Limited
Annual Report 2074-75

;fwf/0f ;ef ;DaGwL ;fdfGo hfgsf/L

1= ;efdf efu lng rfxg] dxfg'efjx?n] k|j]z kq jf z]o/ 6= gfafns tyf dfgl;s ;Gt'ng &Ls gePsf z]o/wgLsf]
k|df)fkq clgjfo{ ?kn] lnO{ cfpg' x'g cg'/f]w ul/G% . s'g} tkm{af^ sDkgLsf] z]o/ nut lstfadf ;+/Ifssf] ?kdf
z]o/wgL dxfg'efjx?n] s'g} sf/)fjz ;f] ;"rgf gkfpg' btf{ ePsf] JolQmn] ;efdf efu lng / dtbfg ug{ jf k|f]S;L
ePdf o;}nfO{ ;"rgf ;/x dfgL cfk\mgf] s'g} Ps kl/rokq lgo'Qm ug{ ;Sg]% .
/ z]o/sf] ;Ssn k|df)f kq ;fydf lnO{ ;efdf efu lng 7= ;+o'Qm ?kdf lnPsf] z]o/sf] xsdf z]o/ nut lstfadf
cfpg' x'g] cg'/f]w ul/Psf] % . z]o/ cef}lts/)f u/fO;Sg' klxn] gfd pNn]v ePsf] JolQm jf ;j{ ;Ddltaf^ k|ltlglw
ePsf z]o/wgL dxfg'efjnfO{ lghsf] l*Dof^ csfpG^ jf lgo'Qm ePsf] Ps JolQmn] dfq ;efdf efu lng jf dtbfg
kl/ro kq k]z ug{x'g cg'/f]w ul/G% . ug{ kfpg] % .
8= ;efdf ljljw cGo s'/f a'e\mg rfxg' x'g] z]o/wgL
2= rfnL;f}“ jflif{s ;fwf/)f ;efnfO{ Wofgdf /flv ldlt dxfg'efjx?n] cfk'mn] a'e\mg vf]h]sf] s'/f vf]nL sDkgLsf]
2075.06.01 ut] b]lv 2075.06.15 ;Dd sDkgLsf] z]o/ /lhi^*{ sfof{no afnfh', sf&df*f}+df ;ef x'g] 2 lbg cufj}
bflvn vf/]h btf{ aGb /xg] hfgsf/L ;d]t o;} ;"rgfåf/f kq k&fpg' x'g cg'/f]w ul/G% . o;af^ ;+rfnsx?nfO{
z]o/wgL dxfg'efjx?df ;"lrt ul/G% . ;efdf plrt hjfkm lbg ldNg]% .

3= sDkgLsf] jflif{s k|ltj]bg, k|ltlglw -k|f]S;L_ kmf/d tyf 9= ;'/Iffsf] b[li^sf])fn] z]o/wgL dxfg'efjx? ;ef :yndf
aflif{s ;fwf/)f ;ef;+u ;DalGwt cGo sfuhftx? cfp“bf emf]nf, Aofu / nf}/f] h:tf j:t'x? glnO{ cfpg'x'g
sDkgLsf] clen]vdf /x]sf] z]o/wgL dxfg'efjx?sf] cg'/f]w ul/G% . cfjZos b]lvPdf ;'/IffsdL{n] ;'/Iff hf“r
?WHIHFHZ
PHUCH@}_M?^NKHVWNI? ug{ ;Sg] ePsf] x'“bf ;f] sfo{df ;xof]u u/Llbg' x'g /
cfk\mgf] kl/rokq jf gful/stf lnO{ cfpg'x'g ;d]t cg'/f]w
ul/G% .
4= s'g} csf]{ z]o/wgLsf] k|ltlglw -k|f]S;L_ sf] ?kdf efu lng
/ dtbfg ug{ rfxg] z]o/wgLn] ;ef x'g' eGbf sDtLdf 48
#)^f cufj} sDkgLsf] /lhi^*{ sfof{no afnfh', sf&df*f}+df 10= cGo s'g} hfgsf/Lsf] nflu s[kof sDkgLsf] /lhi^*{
cfk'mn] kfPsf] k|f]S;L bflvn ul/;s]sf] x'g'kg]{% . sfof{no afnfh', sf&df*f}+df cyjf kmf]g g+= 4350602
jf 4351871 ext 202 jf 135 jf xfd|f] z]o/ /lhi^f/
sfof{no, glan O{Ge]i^d]G^ a}“ls· lnld^]*, gf/fo)f rf}/
5= ;efdf pkl:yt x'gsf] nflu s'g} Ps z]o/wgLsf] tkm{af^ Ps gS;fn, kmf]g g+= 4410737 df ;Dks{ ug'{ xf]nf .
eGbf a(L JolQmx?sf] gfddf k|f]S;L lgo'Qm ePdf ;a}eGbf
kl%Nnf] ldltdf lgo'Qm ul/Psf] k|f]S;Ln] ;efdf pkl:yt
x'g / dtbfg ug{ kfpg] % . s'g} z]o/wgLn] Ps} ldltdf
Ps eGbf a(L k|f]S;L lgo'Qm u/]df ;a} eGbf klxn] k|f]S;L
sDkgLsf] sfof{nodf btf{ ug]{ JolQmn] ;efdf pkl:yt x'g
/ dtbfg ug{ kfpg] % .

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 Bottlers Nepal Limited
Annual Report 2074-75

TABLE OF CONTENTS

Vision, Mission & Values 6 Environment & Sustainability 28-29

Bottlers Nepal Limited (Group) - At a Glance 7 Corporate Social Responsibility 29-30

Performance and Operational Highlights - BNL 8 Statement of Value Added 31

(Group)

Other Information 32
We Represent 9

Additional Disclosures 33
Chairperson’s Review 10-11

Financial Analysis 34
Profile of Board of Directors 12-13
Consolidated Financial Report of 35-72
Bottlers Nepal Limited (Group) 2074-75
Report of the Board of Directors 14-17

Financial Report of Bottlers Nepal Limited 73-109

Management Structure 18-19 Standalone) 2074-75

Corporate Governance 20-22 Directors’ Reports & Financial Statement of 111-153

Bottlers Nepal (Terai) Limited 2074-75

Being Consumer Centric - Marketing Campaigns 23-24

Directors’ Reports & Financial Statement of 155-175
Troika Traders Private Limited 2074-75
Human Capital 25-26

Infrastructural Development 27

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Annual Report 2074-75

VISION, MISSION AND VALUES

Vision Mission
Statement Statement

To make every Nepali’s first choice of To build a community driven, customer

refreshment available within easy reach. focused, profitable, sustainable and socially
responsible business in Nepal.

VALUES

Passion for Winning Leadership

Committed in heart and mind The courage to shape a better future

Integrity Accountability
Be real If it is to be, it’s up to me

Teamwork Citizenship
Working together to support and inspire each Commitment to local stakeholders by consistent
other to win engagement & environmental practices

Empowerment
Decisions are made at the lowest appropriate level

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Annual Report 2074-75

BOTTLERS NEPAL LIMITED

(GROUP) - AT A GLANCE
Bottlers Nepal Limited (hereinafter referred to as the GROUP STRUCTURE
“Company” or “BNL” is a Public Limited Company, with
operations spanning over 40 years. The shares of the Bottlers Nepal Limited (Parent Company)
Company are listed with the Nepal Stock Exchange Limited
Paid-up share capital of NPR 194,888,700, with the majority
(NEPSE), and the majority of its shares are held by M/s Coca-
shares (i.e. 76.16%) held by M/s Coca-Cola Southwest Asia
Cola Southwest Asia Holdings Limited, [Formerly known as
Coca-Cola SABCO (Asia) Limited]. Holdings Limited.

Bottlers Nepal Limited, and its subsidiaries, Bottlers Nepal

(Terai) Limited (BNTL) and Troika Traders Private Limited
(TTPL) (hereinafter referred to as the “Group”) is engaged in
the production, manufacture, sale, distribution and supply of
soft drinks being carbonated non-alcoholic beverages, fruit
juice and packaged drinking water under the brand names -
Coca-Cola®, Sprite®, Fanta®, Coke-Zero®, Minute Maid®, Maaza®
and Kinley®. The Company along with its subsidiaries, Bottlers
Nepal (Terai) Limited and Troika Traders Private Limited, are
the only authorized bottlers and suppliers of “The Coca-Cola
Company” (“TCCC”), in Nepal.
Bottlers Nepal (Terai) Limited (Subsidiary Com-
pany)
For over 40 years, Bottlers Nepal Limited and its subsidiaries
Paid-up share capital of NPR 121,000,000, with the majority
has built success on a profound understanding of demand
of the consumers. That success is based on a continuous, shares (i.e. 90.78%) held by its Parent Company, M/s Bottlers
compelling strategy that leads to sustainable value creation. It Nepal Limited.
is also based on ability to change and adapt. 2074/75 was no
exception. High standards of Corporate Governance, strong
technical credentials, prudent risk management approach,
a culture of dedication and a strong distribution network
has been the key driving forces of the Group. The Group is
considered as one of the most prestigious multinational
companies in Nepal.

It believes the success of the Group depends on our ability

to connect with consumers by providing them with a wide
variety of beverage options to meet their desires, needs and
lifestyles. Our success further depends on the ability of our
people to execute effectively, every day.

Our objective is to use our Company’s assets — our brands, Troika Traders Private Limited (Subsidiary
financial strength, unrivaled distribution system, global reach, Company)
and the talent and strong commitment of our management A majority-owned subsidiary of M/s Bottlers Nepal Limited,
and associates — to become more competitive and to with Paid-up share capital of NPR 750,000.
accelerate growth in a manner that creates value for our
shareowners.

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Annual Report 2074-75

PERFORMANCE AND OPERATIONAL

HIGHLIGHTS-BNL (GROUP)

NET REVENUE PROFIT BEFORE TAX PROFIT AFTER TAX EPS - BNL EPS - BNTL
2074-75 2074-75 2074-75 2074-75 2074-75

Rs. 9,083 Rs. 1,309 Rs. 1,040 Rs. 158 Rs. 613
MILLION MILLION MILLION PER SHARE PER SHARE

WE REPRESENT
Net Revenue PBT increased by 48% with PBT PAT increased by 48% with PAT EPS up by 26% EPS up by 54%
grew by 18% margins up by 3% from 11% to margins up by 2% from 9% to
14% 11%

2073-74 2073-74 2073-74 2073-74 2073-74

Rs. 7,697 Million Rs. 882 Million Rs. 703 Million Rs. 125 per share Rs. 399 per share

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Annual Report 2074-75

A LEADING BOTTLER
Your Company is the authorized bottlers of “The Coca-Cola Company” (“TCCC”), in Nepal and sells
more than 25 MM unit cases annually.
It is operating through its two bottling plants in - Kathmandu and Chitwan. Your Company manages its
business responsibly, sustainably, and with a passion to create value for their customers, shareholders,
consumers and the communities, they serve.

LEADING BRANDS AND A DIVERSE PORTFOLIO OF

WE REPRESENT

BEVERAGES
Your Company produces, sells and distributes the world’s most recognised beverage brands. Coca-
Cola® Sprite®, Fanta®, Coke-Zero®, and Kinley® are some of the world’s best-selling non-alcoholic
WE REPRESENT

ready-to-drink beverages. Your Company’s overall sparkling value share in the markets was 66.5% in
July 2018.
(Source: RSA Nielsen, YTD July, 2018)
The strength of its portfolio of sparkling drinks is complemented by the still drinks portfolio, which has
grown to 15% of the total volume.

Category 2074-75 (2017-18) 2073-74 (2016-17)

Sparkling 97.65% 98.50%
Juice 0.70% 1.17%
Water 1.65% 0.33%
Total 100% 100%

CAPABILITY TO EXECUTE IN THE MARKET

Building and maintaining a successful partnership with the our customers, is critical to the our success.
By working with customers to satisfy their needs and maximise demand for the products, your
Company helps grow their business and its own. Your Company does this by segmenting the market
and determining the most efficient and effective way to serve each of the outlets. Your Company is
looking to generate joint value in every aspect of its business with each of its customers, ranging from
logistics and delivery, to market place execution and sustainability programmes.

A SUSTAINABLE BUSINESS
Your Company recognizes that creating shared value for shareholders, employees, consumers,
customers and communities, is critical to its long-term success. Over the last decade, your Company
has integrated corporate responsibility and sustainability into all aspects of its business management,
with long-term investments that aims to build value over time. More Your Company established a
business resilience programme that enhances its approach to risk management and contingency
response programmes.

LEAN MANUFACTURING FOOTPRINT

Your Company has been able to cater the increased market demand through its two existing
manufacturing plants, by way of efficient manufacturing operations. Your Company believe there is
ample scope to achieve further efficiencies, particularly in Nepalese markets.

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Annual Report 2074-75

Dear
SHAREHOLDERS
“The foundation of
our success has been
built mainly in our
ability to execute a
consistent strategy
and focus our
business in the areas
of our strengths.”

- SHUKLA WASSAN
Chairperson

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Annual Report 2074-75

CHAIRPERSON’S REVIEW
At the outset, I would like to extend my warm welcome to all of you on behalf of the Board of Directors
of the Company. It is with great pleasure, I report that your Company has yet again maintained its track
record of consistent performance and has registered impressive results. The foundation of our success
has been built mainly in our ability to execute a consistent strategy and focus our business in the areas
of our strengths. It gives me great pleasure to announce that your Company along with its subsidiaries,
succeeded in recording growth of 15% in Volume and 48% in Net Profit as compared to last year.

This year, your Company has started commercial local production of flagship “Kinley®” brand packaged
drinking water in 500 ml and 1 Ltr. PET, at your Company’s Bharatpur plant. We are positive that in due
course of time, this will do well in the market, leading to an expansion in the existing beverage portfolio
and increase in our consumer base.

Additionally, it is with great pride, I share with you all that the Institute of Chartered Accountants of Nepal
(ICAN) honored your Company with the ‘Best-Presented Annual Report Award 2017’ in the General
sector for excellence, for its annual report 2017 presentation. Your Company was awarded the title of 2nd
Runner Up and 1st Runner Up, for the same, successively for last two years, in 2015 and 2016 respectively.

Your Company is continuously investing in modernization of its infrastructural development and

automation in its business operation, results of which will be clearly visible in the times to come. Further,
your Company is focusing on strengthening its talent management culture and investing significantly on
training and development of its employees. We are also consistently working on addressing the needs
of the communities we operate in.

This year, Nepal has also made a good progress on the political front. After its successful completion
of the three tier local, provincial and federal elections for implementation of the new Constitution, we
remain very hopeful for a stable government, which is expected to bring economic growth and foster
our business opportunities in the country. It has provided hope to the Board for a conducive business
environment that will allow for long-term growth in the country.

I am sure the years to come will be even more exciting and full of opportunities for your Company. As
the Chairman of the Board, I would like to extend my gratitude to the countless number of esteemed
customers, all of whom have contributed in successful partnerships to accomplish our achievements.

I would like to take this opportunity to express my sincere appreciation to our stakeholders, business
partners, labor unions, statutory and government bodies, bankers and financial institutions, diplomatic
officials, media, local community, TCCC representatives, shareholders and the entire team of the
Company for their continued support.

With regards,
Shukla Wassan

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Annual Report 2074-75

PROFILE OF BOARD
OF DIRECTORS

Mr. Gaurav Khosla Ms. Shukla Wassan Mr. Pradip Pandey Mr. Narmadeshwar
(Director) Chairperson (Incoming Managing Director) Narayan Singh
(Director)
Mr. Khosla is a Chartered Ms. Wassan is FCS (Fellow Mr. Pandey holds a Bachelor
Accountant from the Institute Company Secretary) from Degree of Science with a Mr Singh holds the degree
of Chartered Accountants of the Institute of Company total experience of over 25 of Master of Arts in Political
India with a total experience of Secretaries of India, LL.B., years. He has been appointed Science from India with a total
over 24years. He has been the B. Com (Hons) with a total as Managing Director of the experience of over 46 years.
Director of the Company since experience of over 35 years. Company w.e.f. 1st September, He was appointed as a Director
25th April, 2016 and is also a She has been a Director and 2018 subject to obtaining of the Company from 11th
Chairman of Audit Committee Chairperson of the Company necessary work permit/approval December, 2013.
of the Company since 2nd May, since 2nd December, 2014. required as per the prevailing
2016. laws of Nepal.

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 Bottlers Nepal Limited
Annual Report 2074-75

Mr. Puneet Varshney Mr. Sundeep Bajoria Dr.Trilochan Upreti Mr. Surendra Silwal
(Outgoing Managing Director) (Director) (Independent Director) (Director)

Mr. Varshney holds a Master Mr. Sundeep Bajoria holds Dr. Upreti holds multiple Mr. Silwal holds a Master Digree
Degree in Management B.Com Honors & Chartered academic degrees, M.A., in Business Administration with
Accountant with experience LL.M and Ph.D. with a total a total experience of over 22
Studies and BE Degree in
over 20years. He was appointed work experience of over 37 years in various Companies. He
Computer Science with a total
as a Director of the Company years in governance, human was appointed as a Director of
experience of over 24 years. He
since 3rd May,2018. rights, legislative drafting, the Company from 27th June,
is a Director of the Company 2017. Earlier, he was a Alternate
rendering legal advice, opinion,
since 11th April, 2016 and has Director to Mr. Soren Lauridsen
administrative and financial
been appointed as Managing matters. He is a Director of the since 14th September, 2012.
Director of the Company w.e.f. Company since 14th December
1st September, 2016. 2012.

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 Bottlers Nepal Limited
Annual Report 2074-75

REPORT OF THE BOARD OF

DIRECTORS
Dear Shareholders,
WƌŽĨŝƚĞĨŽƌĞdĂdž;EWZDDͿ
ϭ͕ϯϬϵ
We are delighted to present the Report on your Company’s
business operations, along with the audited financial ϴϴϮ
statements, for the year ended 32nd Ashad, 2075. This ϱϲϯ
ϯϱϱ
has been another remarkable year with success in terms
of business growth and value creation for its treasured ϭϵϬ
stakeholders.
ϮϬϳϬͲϳϭ ϮϬϳϭͲϳϮ ϮϬϳϮͲϳϯ ϮϬϳϯͲϳϰ ϮϬϳϰͲϳϱ

FINANCIAL HIGHLIGHTS STANDALONE PERFORMANCE

(ALONG WITH ITS SUBSIDIARIES)
Your Company has made conscious efforts for preparing
the financial statements based on the sound business
knowledge and generally accepted accounting principles. Bottlers Nepal Limited
It has also ensured that the financial statements of your In FY 2074/75, BNL has made profit before tax of NPR 399
Company is true and fair. Million, which is 27% more compared with previous Fiscal
Year 2073/74. Further, the sales revenue of your Company
during the year under review was NPR 4,414 Million, which
OVERVIEW is 15% more compared with previous Fiscal Year FY 2073/74.
This growth is primarily due to increase in sales volume
Your Company, as a Group has made significant progress in and efficiency. For further details, the financials of BNL are
the FY 2074/75. The Gross Sales Revenue of your Company enclosed along with this report.
has crossed NPR 12,673 Million. Further, the net Profit has
increased by NPR 427 Million, which is 48 % higher than the
previous years. Bottlers Nepal (Terai) Limited
The summarized financial results of your Company for the In FY 2074/75, BNTL has made profit before tax of NPR 911
year under review are as under: Million, which is 55% more compared with previous Fiscal
Year 2073/74. Further, the sales revenue of your Company
NPR Million during the year under review was NPR 7,865 Million, which is
Particulars 2073-74 2074-75 % Change 23% more compared with previous Fiscal Year FY 2073/74.
This growth is primarily due to increase in Sales volume and
Gross Sales efficiency. For further details, the financials of BNTL are
10,641 12,673 19%
Revenue
enclosed along with this report.
Gross Profit 2,401 3,161 32%
Net Profit Before
882 1,309 48% Troika Traders Private Ltd
Tax
During the year under review, your Company generated
Net Profit After Tax 703 1,040 48% revenue amounting to NPR 394 million which is 12% less
compared with previous Fiscal Year, F/Y 2073/74. Your
Company has made profit before tax of NPR 25 Million,
'ƌŽƐƐ^ĂůĞƐZĞǀĞŶƵĞ;EWZDDͿ
which is 391% more compared with previous Fiscal Year
ϭϮ͕ϲϳϯ
2073/74.
ϭϬ͕ϲϰϭ
ϴ͕ϲϭϳ
ϳ͕ϯϱϳ
ϲ͕ϭϵϳ
KEY BUSINESS CHALLENGES
Global:
The global economic scenario continued to remain
ϮϬϳϬͲϳϭ ϮϬϳϭͲϳϮ ϮϬϳϮͲϳϯ ϮϬϳϯͲϳϰ ϮϬϳϰͲϳϱ volatile across different geographies. The Group is
presently operating in an increasingly dynamic economic

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 Bottlers Nepal Limited
Annual Report 2074-75

environment. Crude Oil Price internationally is on increasing Report on Corporate Governance is detailed, in later part of
trend, which has impacted cost of Resin, Preforms, energy the Annual Report, separately.
and transportation. Corporate Sustainability
Nepal Your Company is committed to conduct its business in
The Government has recently implemented Finance Bill, a socially responsible, ethical and environment friendly
2075. This has consequently increased government taxes & manner, while continuously working towards creating
duties twice its current rate, mainly in Import Duty for sugar social value. The Corporate Sustainability activities of your
and has significantly increased excise duty of carbonated Company are implemented in accordance with the core
soft drinks. Furthermore, the country witnessed high priorities of your Company, whilst protecting stakeholder
depreciation of the currency against the US dollar, which interest, proactively engaging with the local community and
has impacted sourcing of raw materials and packaging striving towards inclusive development.
materials. Your Company has intensified activities to bring about long
Dividend term sustainable solutions in your Company’s CSR agenda,
This Year, your Directors recommended a final dividend of while pursing the growth of its business.
NPR 20/- Per share for your approval. The details of some of the initiatives undertaken by your
Statutory Auditors. Company during the year, is contained in the Corporate
Sustainability report, on the later part of the Annual Report.
M/s B. K Agrawal & Co. Chartered Accountants (Firm
Registration No. 02), hold office until the conclusion of Internal Control Framework
40th Annual General Meeting. Your Directors, with the Your Company has an efficient and robust system of internal
recommendation of Audit Committee Meeting have controls in place. These controls include internal checks
proposed to re-appoint M/s B.K Agrawal & Co. Chartered and audits, along with financial and other controls, which
Accountants, as Statutory Auditor for FY 2075-76 with a is required to carry on the business smoothly and lawfully,
remuneration of NPR 500,000/- (Five Hundred Thousand) whilst safeguarding your Company’s assets in a secure,
(excluding VAT and out-of-pocket expenses) (including practical, accurate and reliable manner.
consolidation), alike last year.
Human Resources
FUTURE OUTLOOK
The total number of Associates on 32nd Ashad 2075 is 303,
as against 300 on 31st Ashad 2074. Your Company believes After the successful completion of Local, Federal and
that today a major HR challenge for your Company is Provincial election in the country, your Company has geared
training & development, talent development and Employee itself to deliver strong business performance in the years to
Engagement. Your Company continued to work towards come.
these three components through its various initiatives. The key focus for your Company, during the coming
Some of its initiatives are briefly elaborated in this Annual years, will be on strengthening its Route to Market (RTM),
Report. expansion of new packs and categories, revenue growth
Infrastructure management, effective utilization of assets, productivity,
effective cost management and building strong capability
During the year under review, your Company continued to to deliver medium and long-term goals.
create best-in-class infrastructure facilities to support its
growth strategies. Your Company continuously focuses on Your Company will continue to invest in its people for their
upgrading its infrastructure. During the year under review, continuous development, as to optimize their performance
your Company has invested in upgrading the filler capacity, and build relevant professional skills to drive the business.
which has increased its production capacity by 16%. Your For its communities, your Company will endeavor to make
Company has also invested in palletized trucks, which has a real and lasting difference through right engagement
improved its productivity and efficiency. Further details are towards environmental and societal concerns. Your
elaborated in later part of the Annual Report. Company will consciously drive and maintain its high level
of governance and strive towards providing better returns
Corporate Governance on its investment.
Your Company is committed towards for the good corporate
governance. It strives to keep the trust of its stakeholders by
Acknowledgement
being ethical, honest and transparent, while doing business.
Your Company has a strict Code of Business Conduct (COBC) Your Directors gratefully acknowledge the continued
and Anti Bribery Policy, which guides its business and support being received from all investors, customers,
requires honesty and integrity aspects. All of its employees, vendors, banks and other service providers as well as
directors and vendors are required to read and understand regulatory and government authorities in the initiatives of
the Code and follow its precepts in the workplace and in your Company. Your Directors specially thank employees of
the larger community. Your Company regularly monitor its your Company for their focused contributions in realizing
business to ensure compliance with the Code and the law. A the growth strategies of your Company.

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 Bottlers Nepal Limited
Annual Report 2074-75

Your Directors also places a special thank to the Government (h) Amount recommended for payment by way of
of Nepal, particularly Department of Industry, Office of Dividend;
Company Registrar, Securities Board of Nepal, Nepal Stock The Board of Directors has proposed NPR 20/- per
Exchange, Office of Company Registrar and Income Tax share as dividend to the shareholders of your Company
Department. for the Fiscal Year 2074/75.

LEGAL REPORTING & DISCLOSURES

(i) In the event of forfeiture of shares, details
AS PER SEC 109 OF COMPANIES ACT, 2006 (2063) regarding the number of forfeited shares, face
(a) Review of the transactions of the Previous value of such shares, total amount received
Year: by your Company for such shares prior to the
forfeiture thereof, proceeds of sale of such
As covered above under the “Financial Highlights”
shares after the forfeiture thereof, and refund
sections.
of amount, if any, made for such forfeited
shares;
(b) Impact, if any, caused on the transactions of
the Company from National & International NIL
Situations;
(j) Progress of transactions of the Company and
As covered above under the “Key Business Challenges”
of its subsidiary company(ies) in the previous
section.
financial year and, review of the situation
existing at the end of that financial year;
(c) Achievements in the current year as at the date
of report & opinions of the Board of Directors As covered above under various Sections.
on matters to be done in the future;
(k) Major transactions completed by the Company
As covered above under “Financial Highlights” and
and its subsidiary company(ies) in the financial
“Future Outlook” section.
year and any material changes taken place in
the transaction of the Company during that
(d) Industrial or Professional Relations of the
period:
Company;
During the year, the relationship of your Company with Subsidiary Transactions NPR
Company
its employees was harmonious resulting in no strike.
Bottlers Nepal Recovery of Manpower 114,871,000/-
(Terai) Limited Cost
(e) Alterations in the Board of Directors and the
Bottlers Nepal Sale of Raw Materials 18,332,564/-
reasons therefore;
(Terai) Limited
During the year under review, the holding Company,
Bottlers Nepal Purchase of Raw Materials 45,468,268/-
Coca-Cola Southwest Asia Holdings Limited had (Terai) Limited
withdrawn their earlier nomination of Mr. Sumanta
Bottlers Nepal Reciept of Product 41,392,222/-
Datta and in their place nominated Mr. Debabrata (Terai) Limited transfer fee on account
Mukherjee w.e.f 14th August, 2017. Subsequently, Mr of sales made in their
Mukherjee’s nomination was also withdrawn by respective territories
M/s Coca-Cola Southwest Asia Holdings Limited and Bottlers Nepal Payment of Product 46,683,707/-
in his place Mr. Sundeep Bajoria was appointed w.e.f (Terai) Limited transfer fee on account
3rd May, 2018. Gorkha Brewery Private Limited have of sales made in their
nominated Mr. Amar Baidya as Alternate Director to Mr. respective territories
Surendra Silwal w.e.f 11th December, 2017. The holding Troika Traders Recovery of Manpower 650,000/-
Company, M/s Coca-Cola Southwest Asia Holdings Private Limited Cost
limited had withdrawn their earlier nomination of Mr.
(l) Disclosures made by the substantial
Puneet Varshney and in his place nominated Mr. Pradip
shareholders of the Company to the Company
Pandey w.e.f 21st August, 2018.
in the previous financial year;
(f) Major things affecting the transactions; None
As covered above under “Key Business Challenges”
(m) Details of shareholding taken by the directors
(g) If there are any remarks in the Audit Report, and officers of the Company in the previous
the comments of the Board of Directors on financial years and, in the event of their
such remarks; involvement in share transaction of the
Company, details of information received
None

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Annual Report 2074-75

by the Company from them in that respect; Notes: All the facilities provided to the Managers are as per
None the policy of your Company.

(n) Details of disclosures made about the personal (u) Amount of Dividends remaining unclaimed by
interest of any director and his / her close the shareholders;
relative in any agreement related with the Unclaimed dividend that has crossed the period of 5
Company during the previous financial year; years is transferred to Investor Protection Fund. During
None. the year under review, we had deposited amount of
NPR 60,323/- for FY 2068/69 at Investor Protection
(o) In the event that the Company has bought its Fund on 2075.01.16. The Total Unclaimed dividend
own shares (buy-back), the reasons for such as on Ashad 32, 2075 (16 July, 2018) for the last 5
buy-back, number & face value of such shares, years is NPR 149,262/-. All these unclaimed dividends
and amount paid by the Company for such are transferred to your Company’s Share Registrar,
buy-back; M/s Nabil Investment Banking for distribution to
None Shareholders.

(p) Whether there is an internal control system in (v) Details of sale and purchase of properties
place or not and, details of such system, if it is pursuant to Section-141:
in place; None
As covered under the “Internal Control Framework”
(w) Details of transactions carried on between
Section.
the Associated Companies pursuant to
(q) Details of total management expenses during Section-175;
the previous financial years; None
Particulars (FY 2074/75) NPR Million (x) Any other matters required to be laid out in
Salaries, wages and other employee costs 101 the report of Board of directors under this Act
Administrative expenses 132 and the prevailing laws;
Total 233 As per page no. 33

(r) Name list of the members of Audit Committee, (y) Other necessary matters;
remuneration, Allowances and facilities i. Information (if any) regarding existence of
received by them, details of the functions any relative of Companies director or official
performed by that committee, and details of currently working in Office of the Company’s
suggestions, if any, made by that committee; Registrar (“OCR”), Securities Board or
Please refer to Audit Committee details under any other regulatory body concerning the
Corporate Governance Section. Company in Officer or higher capacity.
We have not received any such information from any
(s) Amount, if any, outstanding & payable to the of the official or director of your Company.
Company by any director, managing director,
ii. Information (if any) regarding any fines paid
chief executive, substantial shareholders or,
by any directors, officers or shareholders of
his/her close relative or, by any firm, company,
the Company to OCR in violation of Sec. 82
corporate body in which he/she is involved;
of the Act including information about the
None amount paid.
(t) Amount of remuneration, allowances & facilities None
paid to the directors, managing director, chief
executive & officer; On behalf of the Board of Directors,
Remuneration, allowances and facilities given to
Directors, Managing Director and Key Managers during
the year: Shukla Wassan Narmadeshwor Narayan
Singh
NPR Million
Chairperson Director
 Particulars Remuneration Allowances Facilities Total
Director’s fee  0.14 0.14
Managing Director 17.63 24.85 2.89 45.37 Date:
Key Managers 40.73 41.72 19.24 101.69
Total 58.36 66.71 22.13 147.20

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 Bottlers Nepal Limited
Annual Report 2074-75

MANAGEMENT STRUCTURE
The overall Company management is led by the Managing Director and the Country Leadership Team. The names and
designations of the Management Team are as detailed below.

Hari Sharma
Neupane
Regional General Pradip Pandey
Manager -BNTL Incoming
Managing Director

Sachin Shrestha
Country
Manager- Key
Accounts

Rajnish Sharma
Country
Commercial Sumit Goyal
Manager Country Finance
Manager

Note: Mr. Pradip Pandey has been appointed as Managing Director with effective from 1st September, 2018
subject to obtaining necessary work permit/approval required as per the prevailing laws of Nepal.

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 Bottlers Nepal Limited
Annual Report 2074-75

Shambhu Koirala
Country Human
Resource Manager

Puneet Varshney
Outgoing Managing
Director

Abhishek Singh
Country Sales
Manager

K. Durai Murugan
Country Supply
Chain Manager Irina Karki
Gurung
Manager - Public
Affairs &
Communication

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 Bottlers Nepal Limited
Annual Report 2074-75

CORPORATE GOVERNANCE
Your Company believes that sound corporate governance Board Members Designation Meeting
practices are essential to create sustainable value and to Attended
safeguard the interest of stakeholders. The commitment to
Ms. Shukla Wassan Chairperson 6 (out of 6)
best practices in Corporate Governance plays a key role in
managing the risks and opportunities and maintaining the Mr. Puneet Varshney Managing 6 (out of 6)
Director
trust of the stakeholders. Over the years, your Company
has strengthened the governance structure, practices and Mr. Gaurav Khosla Director 5 (out of 6)
processes to meet the evolving governance need propelled Mr. Debabrata Mukherjee* Director 3 (out of 4)
by the rapid changes in the business environment.
Mr. Sundeep Bajoria Director 2 (out of 2)

In compliance with Good Governance Directives, 2074, your Mr. Narmadeshwar Director 6 (out of 6)
Narayan Singh
Company has appointed Ms. Pratima Burma, who is also the
Company Secretary as Compliance Officer of the Company. Mr. Trilochan Upreti Independent 3 (out of 6)
Director
BOARD OF THE COMPANY Mr. Surendra Silwal Director 5 (out of 6)
The Board of the Company has ultimate responsibility *Debabrata Mukherjee’s nomination was withdrawn on 14th
for direction, performance and long term success of your May, 2018 and in his place Mr. Sundeep Bajoria was nominated
business as a whole. The Board of Directors comprises as Director on 14th May, 2018.
such number of directors as the Board deems appropriate
to function efficiently as a body, subject to the Company’s AUDIT COMMITTEE
Article of Association. The Board comprises of Independent
Directors, non-Executive Directors (including representation The Board has formed an Audit Committee with defined
from public shareholders) and Executive Director and the terms of reference. The duties and responsibilities of the Audit
Board considers this to be the appropriate structure. Committee are in congruence with the framework defined
During the year, the Board continued with its strength of by the Companies Act 2063 (2006) and Good Governance
Directives for Listed Companies,2074. The Audit Committee
7 (seven) Members comprising of 6 (six) Non-executive
is constituted with Non-Executive Directors and Independent
Directors, who essentially have a supervisory role and, 1 (one)
Directors hence, all the Members of the Committee, including
Managing Director. A list of your current Directors and their the Chairman, are Non-Executive, which ensures complete
date of appointments is set out on page 12-13. independence of the Committee. The Audit Committee
comprises five members. The composition of the Audit
BOARD’S INDEPENDENCE Committee as at the end of the Fiscal Year 2074-75 was as
below:
Non-Executive Directors (NEDs) 5
Independent (Non-executive) 1 Mr. Gaurav Khosla –Chairman
Mr. Sundeep Bajoria- Member
Managing Director (Executive Director) 1
Mr. Surendra Silwal –Member
Total 7 Mr. Trilochan Upreti- Member (Independent Director)
Mr. Narmadeshwar Narayan Singh- (Director Representing
BOARD MEETINGS Public Shareholder)
During the year under review, a total of six (6) meetings In compliance with Good Governance Directives for Listed
of the Members of the Board were convened. The notice, Companies, 2074, your Company has appointed a Director
agenda and other relevant documents were circulated to representing Public Shareholder and an Independent Director
the Members well ahead of the meetings to ensure adequate as Audit Committee Member on 5th July, 2018
and active discussion on the agenda(s) before arriving at
the decisions. The attendance of the Directors in the Board
Below are the term of reference of Audit Committee Meeting
meeting convened during the FY 74/75 are as follows:
x To review the accounts and financial statements of the
company and ascertain the truth of the facts mentioned
in such statements;

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 Bottlers Nepal Limited
Annual Report 2074-75

x To review the internal financial control system and the risk During the Fiscal year 2074-75, the Members of the Audit
management system of the company; Committee met three times i.e., on 22nd August, 2017, 6th
x To supervise and review the internal auditing activity or November, 2017 and on 20th February, 2018for reviewing
the company; the financial statement of the Company including Internal
Financial Control and Risk Management and other financial
x To recommend the names of potential auditors for the
issues. The following table indicates the attendance of Audit
appointment of the auditor of the company, fix the
Committee meeting held during the FY 2074-75.
remuneration and terms and conditions of appointment of
the auditor and present the same in the general meeting
for the ratification thereof; Names Designation Meetings
x To review and supervise as to whether the auditor of Attended
the company has observed such conduct, standards and Mr. Gaurav Khosla Chairperson 3 (out of 3)
directives determined by the competent body pursuant Mr Debabrata Member 2 (out of 3)
to the prevailing law as required to be observed in the Mukherjee
course of doing auditing work;
x Based on the conduct, standard and directives determined Mr. Surendra Silwal Member 2 (out of 3)
by the competent body pursuant to the prevailing law,
*Mr. Debabrata Mukherjee’s nomination was withdrawn and
to formulate the polices required to be observed by the in his place, Mr Sundeep Bajoria was appointed as Member of
company in respect of the appointment and selection of Audit Committee w.e.f 5th July, 2018.
the auditor;
x To prepare the accounts related policy of the company None of the Members received any remuneration/sitting fees
and enforce, or cause to be enforced, the same; for serving on the Audit Committee Meeting in FY 2074/75.
x Where any regulator body has provided for the long
term audit report to be set out in the audit report of the
company, to comply with the terms required to prepare
INTERNAL CONTROLS
such report; The Audit Committee of your Company has been instrumental
x To perform such other terms as prescribed by the in ensuring that the Company has all adequate systems of
Board of Directors in respect of the accounts, financial financial control in place. The Audit Committee periodically
management and audit of the company. conducts review of the effectiveness of Risk Management
x To ensure that the accounts book, audit report, balance and Internal Control Systems and oversees the design of the
sheet or financial statement of accounts are maintained Internal Control Systems along with the effectiveness of the
according to prevailing laws and as per the directive Internal Audit Function throughout the year.
issued by the governing authority or as per the rules and
The Audit Committee of your Company reviews the Internal
regulation of the institution or not,
Audit reports containing details of the audit coverage,
x To review the financial details of the Company and
compliance to the laws, regulations, established policies and
thereafter , to ensure that the evidences mentioned in the procedures.
details are true and fact,
x To ensure that the work of internal auditing is effective The Group has adopted a “Chart of Authority (COA)”
and is executed and accomplished in an independent way. defining financial and other authorisation limits and setting-up
x To monitor and ensure that the accounts, budget, internal procedures for approving capital and investment expenditures.
control systems are properly and regularly maintained. The Group has a strong internal control framework which
x To ensure that the accounts book, documents of internal is supported by risk & control matrix, Standard Operating
audit record system or electrical record auditing are kept Procedures, Policies, Guidelines, Governance Capsules and
Self-Assessment exercised. These internal control frameworks
in proper way,
are routinely tested by Statutory Auditors, Internal Auditors,
x To provide opinion on the subject instructed by Board of Lawyers as well as Internal Assurance Team. Significant audit
Directors observations and follow up actions thereon are reported to
x To ensure that the Company has followed the direction the Management and Board of Directors.
given by the governing authority or not.
x To inspect, monitor and ensure the purchasing system of
the Company are appropriate and economical.
x To perform such other additional duties and responsibilities
that may be ancillary to the aforementioned duties.
x

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 Bottlers Nepal Limited
Annual Report 2074-75

CODE OF BUSINESS CONDUCT AWARDS & RECOGNITION

Your Company had been awarded as Winner in “Best-
Your Company conducts its business with integrity and high
Presented Annual Report Award 2017”in the General
standards of ethical behaviour, and in compliance with the
sector for excellence in the presentation of its Annual Report
laws and regulations that governs its business. Your Company
2017, organized by the Institute of Chartered Accountants
has well established Code of Business Conduct that expects all
of Nepal (ICAN) held on July 17, 2018 (Tuesday), Shrawan,
employees to act transparently and with integrity. Mandatory
01,2075 at Hotel Annapurna, Kathmandu.
training, availability of Ethics Line to report issues and robust
mechanism to investigate and take appropriate action ensures
that values of Code of Business Conduct are put into practice.
Your Company has Anti-bribery Training Program designed
and trainings are imparted to the employees in compliance
with the principles laid down under Prevention of Corruption
Act, 2002, The Foreign Corrupt Practices Act(FCPA), 1977 and
UK Bribery Act, 2010.

Shareholders participating in 39th Annual General Meeting of the Company.

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 Bottlers Nepal Limited
Annual Report 2074-75

BEING CONSUMER CENTRIC

MARKETING CAMPAIGNS
The Coca-Cola Company (TCCC) is committed to the and as per the commitment; your Company sent 40 consumers
Responsible Marketing of its brands. along with our key stakeholders to watch Live football game
TCCC’s Responsible Marketing Policy sets forth our guidelines in two groups. The first group got to see the FIFA World Cup
in this regard. The Policy states that your Company respects Match between Argentina & Iceland at Spartak Stadium,
the role of parents and caregivers by not designing our Moscow (Russia) on 16 June 2018 and the second group got
marketing communications directly appealing to children nor to see the FIFA World Cup Match between Argentina & Nigeria
do we advertise in any media which directly targets children live at Saint Petersburg Stadium, St. Petersburg (Russia) on 27
under the age of 12. Also, as a global business, we respect and June 2018.
recognize the unique learning environment of schools and
therefore believe in commercial- free classrooms and do not Coca-Cola MomoUtsav 2018
advertise there as well.
(22nd January,2018- 25th February, 2018)
Carbonated beverages of your Company continue to be
the most preferred beverages in Nepal resulting in a strong
market presence during the FY 2074/75 as well. Some of the
important marketing initiatives during the year under review,
are as detailed below:

“COKE KHAM, RUSSIA JAAM” - The COCA-COLA

FIFA WORLD CUP 2018 Campaign

(15th February, 2018 to 15 April, 2018)

The campaign has become an annual festival of celebrating

the consumption of the two most loved food items – MO:MO’s
& COKE. This time, your Company made it bigger and better
through outlet engagement to execution to celebrity visit
to volume generation. The campaign was spread in 6 major
town of Nepal i.e. Kathmandu, Pokhara, Bharatpur, Hetauda,
Nepalgunj, Biratnagar where 4000 outlets enrolled, Popular
celebrities like Priyanka Karki, Swastima Khadka and Barsa
Shiwakoti endorsed the campaign.

Your Company conducted the biggest promotional campaign

of the last 4 years - “Coke Kham, Russia Jaam” where 40 lucky
winners were announced to watch the FIFA World Cup 2018,
Live in Russia. There was huge participation in the Campaign

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 Bottlers Nepal Limited
Annual Report 2074-75

MINUTE MAID INTRODUCTION: Sprite Refresh & Recharge Campaign:

(31st May, 2018) (21st July ,2018 to 31st August , 2018)

Your Company with the objective of providing choice to

consumers offering different types of beverages humbly
introduced Minute Maid Pulpy Orange, Minute Maid Mixed
Fruit and Minute Maid Apple in a unique 250ml Pet bottle.

Kinley Water Launch:

(28th November, 2017)

With a view of refreshing every Nepali, Sprite, the country’s

largest Lime and Lemon brand launched ‘Refresh n’ Recharge
Offer’ with a tagline of ‘Refresh Banayo, Recharge Garayo’,
meaning Sprite not only refreshes you, but will recharge you
as well. As a consumer offer, consumer could win talk time
worth more than 4 crore nepali rupees. Based on the code
behind the label, the consumer could win a talktime recharge
startings from Rs. 10 upto Rs. 5000. The offer was valid from
21st July, 2018 to 31st August, 2018. The technology provider for
It is a great honour for the company to introduce a new Locally the campaign was e-Sewa.
Manufactured brand in Nepal. Your Company launched its
Processed Drinking Water brand, Kinley. What is unique about
the Kinley is that the Manufacturing process is untouched by Maha Shivratri Mela
hand and the water is processed through 8 steps of purification Coca-Cola partnered with the local body for the ‘Mela’ that
before its packed. Its based on ‘state-of-the-art technology’. happens in the Pashupatinath Temple premises, with your
Along with the Country Leadership, the brand was launched brand Maaza by working on permanent branding of the
by the renowned Actor - Mr. Rajesh Hamal, who is also the peripheral outlets, and large activation throughout the
brand ambassador for Kinley. complex. In the Mela areas multiple kiosks were set up to sell
products manufactured by your company.

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 Bottlers Nepal Limited

HUMAN CAPITAL Annual Report 2074-75

Your Company is committed to attract, develop and retain Your Company’s goal is to provide a workplace where all
atalented team members and to create a workplace that allows employees can thrive and grow- A workplace where all
each team member to contribute to the collective success employees feel included, safe and are given the opportunities
of the Company. Therefore, your Company endeavours in to make valuable contribution to your Company.
developing and creating talented and skilled work force with
modern knowledge and competencies along with a proper FREEDOM OF ASSOCIATION
mind set to cope up with the emerging business challenges
Your Company does not curtail the freedom of association
and to gain a competitive advantage. Your Company believes
of employees. Management is committed for discussions and
that team work is the key factor for all of the Company’s
negotiations with the employees who are unionized. Further,
achievements and the credit goes to all those employees,
an open door policy is encouraged. There are three unions in
who see their own future in the future of the Company and
function in the Group which represents the interests of 610
are dedicated to make a positive change. Your Company has
employees.
been maintaining employee turnover of less than 2%, which
proves the level of employee satisfaction in the Company.
Furthermore, your Company continuously assess areas to
CHILD LABOUR
enhance overall performance of its employees and provide As a part of the ongoing commitment, your Company
necessary training. advocates and upholds decent work practices and human
rights. Your Company does not engage child labour and
Your Company encourages a learning environment by
does not employ any person under the age of 18 years at the
stimulating integrated thinking, personal mastery and team
workplaces. This is inbuilt into policies and procedures of the
learning. Simultaneously, the employees are encouraged and
Group. There is no direct risk of child labour deployment in any
motivated to point out the areas where they require training
operation within the Company.
to enhance their overall performance.

Your Company strives for development of its employees at WORKPLACE RIGHTS POLICY
all levels. The learning and development goals are aimed at
Your Company’s Workplace Rights Policy is designed to provide
providing world class individual and organizational capability
all stakeholders with clear guidelines and internally accepted
development growth and opportunities to staff, regardless
standards for the way in which we treat our employees. The
of their employment level and gender. Your Company has
adherence to our workplace policies is audited on a regular
extended various trainings and exposure trips to its employees
basis. The Workplace Rights Policy is guided by the Labor Act
from various departments at all levels.
of the Country and also by the International Human Rights
Standards. An inclusive workplace in which all members of
EQUAL EMPLOYMENT OPPORTUNITY
the community has equal opportunities for employment and
It is the Company’s policy to recruit candidates as per development regardless of race, gender, religion or disability
the manpower requirements derived through a focused is ensured at your Company
and organized Human Resource Plan. All candidates are
impartially assessed on objective criterion notwithstanding PREVENTION OF SEXUAL
race, gender, ethnicity, religion, language, or civil status as HARASSMENT AT WORKPLACE
an Equal Employment Opportunity provider with a vision to POLICY
attract, develop and retain a group of talented team Members
and to create a workplace that allows each Team Member to Your Company is committed to provide a work environment
contribute to the collective success of your Company. The that ensures every employee is treated with dignity and
programs and initiatives related to employment practices, respect and afforded equitable treatment. Your Company
compensation and benefits, talent management, diversity and is also committed to promote a work environment that is
inclusion and Team Member relations are important to fulfil conducive to the professional growth of its employees and
the commitment, especially in today’s challenging economic encourages equality of opportunity. Your Company will not
climate. tolerate any form of sexual harassment and is committed to
take all necessary steps to ensure that its employees are not
The multi-cultural environment of your Company is warm subjected to any form of harassment. Sexual Harassment at
and equitable, ensuring that each member of the team is Work place Policy has been framed w.e.f 1st December, 2017
valued for their capabilities and respected for who they in accordance with the provisions of The Sexual Harassment at
are. Your Company strives to create a happy and focused Workplace Prevention Act, 2015 (2071).
work atmosphere that celebrates the team and encourages
innovation.

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 oor

Bottlers Nepal Limited

Annual Report 2074-75

N T AC T I V I TIES
Y E E E N G AGEME
EMPLO

rridor Butwal
at Industrial Co
ee Tour, 2074
Annual Employ

rporate Indoor
Coca-Cola Co 17
Cricket Cup, 20

tes.
har with associa
ing Director celebrating Ti
rshney, Manag
Mr. Puneet Va

.
ival of Women
tes celebrating Teej; a fest
Female associa

itipur.
Day at Chobhar, Kr
ployee Annual
Celebrating Em

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 Bottlers Nepal Limited
Annual Report 2074-75

INFRASTRUCTURAL DEVELOPMENT
Achieving the business growth objectives depends in part on the ability to evolve and improve through innovation. Sustainable
economic development is not possible without a properly functioning and accessible infrastructure. Inappropriate systems
or failure of key systems could have a significant impact on the business of the Company. Therefore, realizing the risk and
to mitigate such jeopardy, your Company is continuously focusing on its infrastructural development.

Installation of Returnable Glass Bottle(RGB) Filler foreign matters in the empty bottle before filling of the
beverage in the Filler.Therefore, with the focus to enhance
the Quality, the Capability of Empty Bottle Inspector (EBI)
has been upgraded with installation of Outer Sidewall
(OSW) Inspection System that utilizes high resolution digital
camera for inspection of any foreign matters.

Construction of Distribution Centre:

In order to cater the increased volume demand in the

market, your company has enhanced the capacity of
Returnable Glass Bottle filler from 450 BPM (Bottle per
minute) to 520 BPM (Bottle per minute) at its Balaju plant.
Installation of new filler improved productivity, quality and
has user-friendly interface & enhanced safety feature.

Installation of All Surface Empty Bottle Inspector

(ASEBI)

In order to increase its storage capacity and widespread

distribution across the country, your Company constructed
a new Distribution Centre at Pithuwa, Chitwan District, Nepal
with a capacity to store 350,000 cases of finished goods.

CCTV Surveillance
Your Company has always considered the security of the
employees and its property as the key responsibility. The
highly advanced technology of modern security cameras
allow businesses to lower cost and risk by protecting their
Your Company believes in providing quality product and assets with continuous and seamless monitoring of their
focuses on every step and procedure it follows. Inspection facilities. Therefore, your Company has installed CCTV
of Empty Bottle has always been an integral step of system has with 360 degree visibility so that the associates
production process. All Surface Empty Bottle Inspector and the properties of your Company are secured 24/7.
is a technology adopted by your Company to detect any

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Annual Report 2074-75

ENVIRONMENT AND SUSTAINABILITY

Water Stewardship: Public-Private Partnerships to partnerships with WWF in Koshi River Basin, Indrawati River
promote innovative solutions for water security in Basin, Beeshazari lake; ongoing project with WaterAid, and
and outside of Kathmandu valley partnership with SmartPaani at the Institute of Engineering
(IOE), SAJHA Yatayat, Budhanilkantha school and Teaching
The Coca-Cola system in Nepal is committed to continuing
its role as an industry leader in water stewardship. In Hospital.
doing so, your Company has been conducting various
water replenishment projects, as a responsibility towards
conservation of water, a shared resource. The concept of
Rainwater Harvesting (RWH) and Ground water recharge
(GWR) have been initiated in line with the global commitment
of the company to return the amount of water used in its
finished beverage by the end of 2020 AD. In doing so, your
Company has had continued partnerships with the experts
in the waterfront and have successfully completed the water
recharge management and system installation at Tribhuvan
University Teaching Hospital (T.U.T.H) and Budhanilkantha
School with SmartPaani as a partner.

PET Recycling: Nagarmitra| Friends of the City

PET, as a package, has played a vital role in ensuring

safe, hygienic, standardized products to consumers
in a convenient way. Consumers across the world are
Furthermore, The Coca-Cola Foundation (TCCF) has benefitting from the industries that use PET packaging as
supported projects in Ranibari Community forest and it provides the flexibility of weight and shape. Since, PET
integrated water resource management projects in is non-biodegradable everybody needs to understand how
Beeshazari and around the Indrawati River basin. This year, important it is to ensure proper PET disposal and recycling.
commemorating World Water Day and World Environment
Day, all four projects were handed over to the Users in the In its endeavor towards protection of the environment,
presence of respective Institution heads, beneficiaries, local, your company has been extending support to the project
government and non-profit stakeholders. partners of the Social Enterprise, HCI (Himalayan Climate
Initiative) and GIZ, stakeholders to contribute towards
In addition, the system showcased integrated efforts creating a greener Kathmandu. This TCCF funded, Nepal’s
on water stewardship at the international conference of first legal, responsible and environment friendly PET bottle-
SOPHEN (Society of Public Health Engineers in Nepal), recollection initiative has taken the form of self-sustained
that focuses on “Water, Environment, and Climate Change: Social Enterprise.  So far, this initiative has been able to
Knowledge Sharing and Partnership from April 10-12,
recycle over 750 metric tons of PET waste until date.
2018.” The poster presentation highlighted Coca-Cola’s

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Effluent Treatment Plant (ETP) Installation of Decaustisizer unit

Water is a main ingredient in substantially all of our

products. While historically your Company has not
experienced significant water supply difficulties, water is a
Your Company has a high standard Effluent Treatment Plant limited natural resource in many parts of the world. Your
(ETP) which is designed for treating industrial waste water Company recognizes water availability, quality sustainability
for its reuse or safe disposal to the environment. Considering for both the business operations of your Company and the
its increased volume demand of the market and the need for communities where your Company operates, as one of
safe disposal of waste water, your Company had upgraded the key challenges facing your business. Therefore, In line
its Effluent Treatment Plant capacity of 500m3/day to with your Company’s water conservation and sustainability
800m3/day. initiatives to reduce water consumption and decrease Water
Usage Ratio, your company has installed Decaustisizer unit
that processes and treats the water recovered from pre-final
compartment of bottle washer, which will be reused for final
rinsing except the last jet. With this unit, there is recovery
potential up to 75 % of water used in Bottle washer.

CORPORATE SOCIAL RESPONSIBILITY

Women Empowerment: Teach a woman; to teach
a nation:
In an attempt towards empowering the female talent in the
country, your company has been imparting business skills
training and assets in various parts of the country, through
its 5by20 initiative. 5by20 is The Coca-Cola Company’s
global commitment to economically empower 5million
women retailers across our global value chain by the end of
2020, with specific targets in different countries.
This initiative aims to provide Nepalese women retailers
with the skills, techniques and tools required to succeed in
Supporting Community Schools
the dynamic retail setup of Nepal and offers women with
connections with peers - along with the confidence that As your company believes in inclusive growth, this year,
comes in building a successful business. with an aim to create a learning environment in schools, it
has extended its collaboration with a NGO partner; Splash
In Nepal, your company has empowed approximately 4,200
(Prabhav) Nepal, to provide WASH facilities to government
women through this initiative, whilst increasing footprints
schools within the vicinity of our plant and install recharge
through the far-flung markets of the mid and far-western
systems for water management in the school area.
regions.

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This initiation focuses on uplifting schools with the believe and interact with the PM himself at his residence and jointly
that Safe water, Sanitation and hygiene (WASH) in schools extend best wishes to the young players departing to Russia
improve health, boost educational achievements and assist in May 2018.
young children become agents of change in our society.
Footballers Mission Together
This initiative aids to benefit approximately 500 students,
individuals and households from the nearby community. The Footballers’ Mission Together (recognized by the ANFA;
All Nepal Football Association) has organized an event to
honor veteran players and to recognize current players,
along with all the members of the football fraternity and
their families. Coca-Cola has had a long-standing partnership
with ANFA promoting the development of grassroots
football in Nepal. As this event honors all those who have
contributed to the development of football in Nepal; this
was an opportunity to continue to build association of Coke
Keeping the environment clean & Football; particularly this year (FIFA World Cup 2018).
The Vice-President of Nepal, along with several dignitaries
were present to honor the veteran footballers, who also
encouraged the current womens’ and mens’ football teams
and wished them the best to perform at the upcoming SAF
games.

Youth Ambassadorship and Youth Connect Series

Associates of your Company celebrated World Environment
Day 2018 by planting Juniper Trees outside the entrance
of the plant and placed sturdy bins within Balaju Industrial
Management Premises.

Nepal at Street Child World Cup, 2018

The overall goal of the Youth Ambassadorship Program

within Coca-Cola is to “humanize and demystify the brand.”
Many people know of the company and brand from a
distance, but do not have frequent touch points with the
With an aim to have a 360 degree approach to FIFA system, to form grounded opinions on the brand, category
World Cup 2018 and as a part of the sustainability leg of and company. The Youth Ambassadorship Program is
the Company’s overall FIFA campaign 2018, support was one potential platform to create opportunities for direct
extended to Team Nepal (the first team from the country to conversations between Coca-Cola executives and young
participate in Street Child’s World Cup, prior to the World leaders to get consistent messaging out. As a part of the
Cup finals), by sponsoring 9 players to attend the game effort the system interacts and engages with oragnizations
live in Moscow ( teams play 7 a side plus 2 subs). In a rare like AIESEC, Youth Thinkers Society, Teach for Nepal, Global
event, the Prime Minister of Nepal himself, Honorable PM Shapers Community Kathmandu and Glocal Nepal. In an
Mr. KP Sharma Oli hosted a farewell event for the players at integrated effort to get to know the youth of Nepal better,
his residence, where he expressed his appreciation towards Coca-Cola leadership have interacted in colleges and in
the organizers and the sponsors. It was an honor for the conferences organized by youth groups.
Managing Director and the PAC team to be able to meet

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 Bottlers Nepal Limited
Annual Report 2074-75

Value Created: Your Company creates value for its stakeholders and business by carefully
managing the use of and return on all capitals, or inputs.
STATEMENT OF VALUE ADDED

Net Profit

NPR 1,040 MM (P/Y 703 MM)

Contribution To National Treasury

NPR 3,866,552,677/-

Direct Employment

Company No. of Employees

BNL 303
BNTL 307
Total 610

Value Shared with: By running a sustainable and responsible business, we create value which is
subsequently retained by our business, making it stronger, and shared with all of our stakeholders)

Shareholders Through the process of managing all inputs to our business well, we create
profits which benefit shareholders through dividend payments and share
value.
Suppliers As we create value, we support businesses throughout our value chains, and
support job creation beyond our business.
Customers Our efforts to produce products efficiently and responsibly builds value for our
customers’ businesses.
Communities When our business is sustainable and responsible, the communities where we
operate, benefit through job creation, tax payments to governments, useful
products and services and minimisation of environmental impact.
Consumers We offer a range of beverages to satisfy evolving consumer preferences and
active, healthy lifestyles.
Employees Developing, recognizing and rewarding our people secures a skilled and
motivated workforce.

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OTHER INFORMATION
Stakeholder Relationship
The Board values the Company’s stakeholders and strives to Business on the agenda. Shareholders may also ask questions
take their concerns and interests into account when making to the Company’s external auditors at the meeting. The Com-
business decisions. This not only enables it to anticipate and pany encourages its shareholders to attend its AGM and is
manage risk effectively, but also helps it identify new business committed to dealing with shareholder queries in a respectful
opportunities and improve Company’s relationship with its and timely manner whenever they are received by the Com-
stakeholders. pany.
The shareholders are given the opportunity at the AGM to get In order to strengthen our relation with shareholders and
updates from the Chairperson and to ask questions, and to ex- provide efficient services to the shareholders, Nabil Invest-
press a view and vote on the various matters of Company’s ment Banking Limited has been re-appointed as “Registrar to
Shares”.

Share prices

Bottlers Nepal Limited

Year Maximum Minimum Closing Number of Trades Trading days

(In NPR) (In NPR) (In NPR)
2015-16 None None None None None
2016-17 None None 1,660 100 1
2017-18 None None 1693 100 1

(Note- 98.16% of the shares are held by two institutional Shareholders. The rest 1.84% shares held by the public is rarely traded
thus market price is not readily available.)

Bottlers Nepal (Terai) Limited

Year Maximum Minimum Closing Number of Trades Trading days

(In NPR) (In NPR) (In NPR)
2015-16 5,936 2,160 5,936 85 30
2016-17 9,999 3,382 6,085 21,856 44
2017-18 8,287 5,336 5,872 27,431 166

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ADDITIONAL DISCLOSURES
(As per Rule 26(2) of Securities Registration and Issue Regulation, 2073)
z Information to be disclosed in the Annual Report
1. Report of the Board of Directors:
Refer page no. 14-17 of this report.

2. Auditor’s Report
Refer page no. 36 - 37 and 74 - 75 of this report.

3. Audited Financial Reports

Refer page no. 35 - 72 and 73 - 109 of this report.

4. Legal Proceedings:
Date filed: 25th May, 2018 (2075-02-11)
Dispute: The Government has increased the Import Duty for sugar from 15% to 30% on 17 April 2018 (2075-01-04).
Prior to the decision made by the Government, the Company had few consignments of sugar lying at
Dryport and few others on transit for which import duty was already paid. The Custom Office had asked
the Company to pay the additional 15% custom duty prior to transferring its consignment from Dry port.
The Company had filed a case against respondent.
Respondent: Government of Nepal, Office of Prime Minister and Council of Minister, Ministry of Finance, Department of
Custom, Tripureshwor and Dry Port Custom Office, Sirsiya, Parsa
Remedies a. To issue writ of certiorari dismissing any decision or acts that impose additional import duty on sugar
Sought: imported prior to April 17,2018 and writ of mandamus to allow the sugar to be transferred from dry port
without paying additional duty.
b. To issue interim order not to implement the decision of Government till the final disposal of the case.

5. Analysis of Stock Performance of the Body Corporate

i) Management’s view on the performance of the stocks of the body corporate in the Stock Exchange.
Price and transactions of the Company’s shares are being determined by the open share market operations through a
duly established Stock Exchange. Managements view on this is neutral.
ii) High, Low and Closing price of the stocks of the Company during each quarter of the preceding year along with total
volume of trading of shares and number of days traded.
Quarter Max. Price Min. Price Closing Price No. of trades Days of trading
Q1 None None 1,660 None None
Q2 None None 1,660 None None
Q3 1,693 1,693 1,693 100 1
Q4 None None 1,693 None None

6. Problems and Challenges

INTERNAL
1. Rise in cost of operations with Inflation.
2. Rural distribution at effective cost.
EXTERNAL
1. Unstable tax regime under federal state
2. Fluctuation in international fuel prices impacting packaging material cost and transportation cost;
STRATEGY
1. Proactively monitor the internal and external environmental changes.
2. Develop cost effective distribution models for upcountry areas.

7. Corporate Governance
Incorporated in detail under “Corporate Governance” section (page no. 20-22) in this Annual Report.

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FINANCIAL ANALYSIS
Vertical Analysis

Particulars For the year 2074-75 For the year 2073-74 For the year 2072-73
Revenue 9,083,454,385 7,696,782,805 6,398,229,089
Gross Profit 3,160,682,807 2,400,690,761 1,930,517,332
Operating Profit 1,304,683,191 945,314,406 683,317,825
Profit Before Tax 1,308,575,851 882,207,159 563,121,774
Profit After Tax 1,040,344,037 702,860,934 433,835,636

Horizontal Analysis

Particulars Year Ended 2075 Year Ended 2074 Year Ended 2073
Total Assets 6,960,091,971 6,835,354,908 5,793,945,016
Plant Property and Equipment 4,219,041,255 3,945,801,850 3,723,755,128
Current Assets 2,593,016,334 2,714,347,693 2,029,835,649
Current Liabilities 2,815,234,713 3,774,661,152 3,094,428,976
Debt 496,608,770 810,574,979 1,377,167,875
Shareholder equity 3,437,009,187 2,393,091,498 1,782,409,899

Ratio Analysis

Particulars Year Ended 2075 Year Ended 2074 Year Ended 2073
Gross Profit Ratio 35% 31% 30%
Profit Before Tax Ratio 14% 11% 9%
Current Ratio 0.9 0.7 0.7
Debt Equity Ratio 0.1 0.3 0.8
Assets Turnover Ratio 0.8 0.9 0.9
Return on Equity 30% 29% 24%
Return on Total Assets 15% 10% 7%
Earning Per Share 499 338 223
Market Value Per Share 1,693 1,660 1,660
Price Earning Ratio 3.4 4.9 7.5
Net Worth Per Share 1,764 1,228 915

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CONSOLIDATED FINANCIAL REPORT OF

BOTTLERS NEPAL LIMITED (GROUP)
2074-75 (2017-18)

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BOTTLERS NEPAL LIMITED (GROUP)

INDEPENDENT AUDITORS’ REPORT

TO THE SHAREHOLDERS’ OF
BOTTLERS NEPAL LIMITED (GROUP)

Report on the Financial Statements

We have audited the accompanying Consolidated Statement of Financial Position of M/s Bottlers Nepal Limited and its
subsidiaries (collectively referred to as the “Group”) as of Ashad 32, 2075 (July 16, 2018) and Consolidated Statement of Profit
or Loss, Consolidated Statement of Other Comprehensive Income, Consolidated Statement of Cash Flows and Consolidated
Statement of Changes in Equity attached thereto, for the year ended on that date and a summary of Significant Accounting
Policies and other Explanatory Notes.

Management’s Responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Nepal
Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant
to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud
or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the
circumstances.

Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with Nepal standards on Auditing. Those standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by the management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a reasonable basis for our audit
opinion.

Report on requirement of Companies Act, 2063 and other regulatory matters

a. We have obtained information and explanations, which, to the best of our knowledge and belief, were necessary for the
purposes of our audit;
b. In our opinion, proper books of account as required by law have been kept by the Group so far as appears from our
examination of such books;
c. In our opinion, the consolidated Statement of Financial Position, consolidated Statement of Profit or Loss, consolidated
Statement of Other Comprehensive Income, Consolidated Statement of Cash Flows and Consolidated Statement of
Changes in Equity with Explanatory Notes dealt with by this report are in compliance with the provisions of the Company
Act, 2063 and are in agreement with the books of account maintained by the Group;
d. In our opinion, so far as appeared from our examination of the books, the business of the Group has been conducted
satisfactorily; and

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e. To the best of our information and according to the explanations given to us and from our examination of the books
of accounts of the Group necessary for the purposes of the audit, we have not come across cases where the Board of

BOTTLERS NEPAL LIMITED (GROUP)

Directors or any employees of the Group have acted contrary to legal provisions relating to accounts, or committed any
misappropriation or caused loss or damage to the Group.

Auditors’ Opinion
In our opinion, the Financial Statements, read together with Significant Accounting Policies and Explanatory Notes forming
part of the accounts, give a true and fair view of the financial position of the Group as at Ashad 32, 2075 (July 16, 2018) and the
financial performance, changes in equity and cash flows for the year then ended in accordance with Nepal Financial Reporting
Standards and comply with provisions of the Companies Act, 2063.

B.K. Agrawal, FCA

Managing Partner
Kathmandu For: B.K. Agrawal & Co.
Date: 10th Bhadra 2075 (26st August, 2018) Chartered Accountants

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BOTTLERS NEPAL LIMITED (GROUP)

BOTTLERS NEPAL LIMITED (GROUP)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 32nd Ashad 2075 (July 16th, 2018)

Figures in NPR
As at 32nd Ashad As at 31st Ashad
Particulars Note
2075 2074
ASSETS
Non-current assets
Intangible Assets 3 118,270,950 144,653,270
Property, Plant and Equipment 4 4,219,041,255 3,945,801,849
Financial Assets
Prepayment 7.1 29,763,431 30,552,094
Current Assets
Inventories 6 1,636,745,333 1,516,851,758
Non Financial Current Assets
Prepayments 7.1 29,573,451 30,731,576
Financial Assets
Advances 7.2 5,714,493 12,436,045
Other Current Assets 7.3 373,384,378 165,847,511
Trade receivables 8 318,395,799 125,043,053
Cash and Cash Equivalents 9 229,202,881 863,437,751
Total Assets 6,960,091,971 6,835,354,907
EQUITY AND LIABILITIES
Equity
Equity Share capital 10 194,888,700 194,888,700
Reserve and Surplus 11 3,058,399,674 2,080,609,983
Non Controlling Interest 12 183,720,814 117,592,932
Non-Current Liabilities
Retirement Benefit Obligation 13.2 691,067,895 660,434,291
Deferred Tax Liablity 5.3 16,780,175 7,167,968
Current Liabilities
Financial Liabilities
Borrowings 14.1 496,608,770 810,574,979
Trade payables 14.2 1,443,139,142 2,249,426,036
Other Financial liabilities 15 875,486,801 714,660,018
Total Equity and Liabilities 6,960,091,971 6,835,354,907
Notes 1 to 28 form integral part of this Financial Statements.
For & on behalf of Board

Shukla Wassan Surendra Silwal Narmadeshwar Narayan Singh Gaurav Khosla

Chairperson Director Director Director

Sundeep Bajoria Dr. Trilochan Upreti Puneet Varshney Ashok Mandal

Director Independent Director Director Finance Controller

As per our attached report of even date

B.K. Agrawal, FCA

Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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BOTTLERS NEPAL LIMITED (GROUP)

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

BOTTLERS NEPAL LIMITED (GROUP)

For the year ended 32nd Ashad 2075 (July 16th, 2018)

Figures in NPR
For the Year For the Year
Particulars Note
2074-75 2073-74
Revenue from operations 16 9,083,454,385 7,696,782,805
Cost of sales 17 (5,922,771,578) (5,296,092,044)
Gross Profit 3,160,682,807 2,400,690,760
Other operating income 18 21,228,399 52,526,164
Selling and distribution expenses 19 (1,483,017,604) (1,133,908,817)
Administrative and operating expenses 20 (394,210,412) (373,993,703)
Profit from Operations 1,304,683,191 945,314,405
Finance Costs 21 (54,534,323) (66,392,102)
Finance Income 22 58,426,983 3,284,855
Profit Before Tax 1,308,575,851 882,207,158
Income Tax Expenses
Current Tax 5.1 (260,294,200) (156,969,048)
Deferred Tax 5.2 (7,937,614) (22,377,177)
Net Profit for the year 1,040,344,037 702,860,933
Basic/Diluted Earning Per Share 23 499 338
Owners of the Company 972,014,328 658,376,681
Non Controlling Interest 68,329,709 44,484,252

Notes 1 to 28 form integral part of this Financial Statements.

For & on behalf of Board

Shukla Wassan Surendra Silwal Narmadeshwar Narayan Singh Gaurav Khosla

Chairperson Director Director Director

Sundeep Bajoria Dr. Trilochan Upreti Puneet Varshney Ashok Mandal

Director Independent Director Director Finance Controller

As per our attached report of even date

B.K. Agrawal, FCA

Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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BOTTLERS NEPAL LIMITED (GROUP)

BOTTLERS NEPAL LIMITED (GROUP)

CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

For the year ended 32nd Ashad 2075 (July 16th, 2018)

Figures in NPR
For the Year For the Year
Particulars
2074-75 2073-74
Net Profit for the year as per Statement of Profit or Loss 1,040,344,037 702,860,933
Items that will not be reclassified to Statement of Profit or
Loss
Actuarial Gain/(Loss) on defined benefit plan schemes 5,505,000 (107,699,000)
Deferred Tax on Actuarial Gain/(Loss) 856,736 18,308,830
Items that may be reclassified to Statement of Profit or
- -
Loss
Other comprehensive gain/(loss) for the year, net of tax 6,361,736 (89,390,170)

Total Comprehensive gain/(loss) for the year, net of tax 1,046,705,773 613,470,764

Owners of the Company 977,789,691 573,208,006

Non Controlling Interest 68,916,082 40,262,758

For & on behalf of Board

Shukla Wassan Surendra Silwal Narmadeshwar Narayan Singh Gaurav Khosla

Chairperson Director Director Director

Sundeep Bajoria Dr. Trilochan Upreti Puneet Varshney Ashok Mandal

Director Independent Director Director Finance Controller

As per our attached report of even date

B.K. Agrawal, FCA

Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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BOTTLERS NEPAL LIMITED (GROUP)

CONSOLIDATED STATEMENT OF CASH FLOWS

BOTTLERS NEPAL LIMITED (GROUP)

For the year ended 32nd Ashad 2075 (July 16th, 2018)
Figures in NPR
For the Year For the Year
Particulars
2074-75 2073-74
A. CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the year 1,308,575,851 882,207,158
Adjustments for non cash and non operating:
Depreciation on property, plant and equipment 473,043,236 430,311,904
Amortization of Intangible Assets 34,702,722 15,295,423
Loss/ (gain) on sale/write off of Property, plant and equipment 20,538,984 11,557
Finance income (58,426,983) (3,284,855)
Finance costs 54,534,323 66,392,102
Gain on sales proceeds from Property, plant and Equipment - (5,227,598)
Working capital adjustments:
Increase / (Decrease) in trade payable and other liabilities (615,111,600) 869,208,371
Increase / (Decrease) in provisions 36,138,602 14,728,772
Decrease / (Increase) in trade and other receivables (401,544,816) 14,565,800
Decrease / (Increase) in loans and advances 8,668,340 133,245,142
Decrease / (Increase) in inventories (119,893,575) (19,973,699)
Cash generated from operations 741,225,082 2,397,480,077
Direct taxes paid (net of refunds) (291,059,912) (148,945,379)
NET CASH FLOWS FROM OPERATING ACTIVITIES (A) 450,165,170 2,248,534,698
B. CASH FLOWS FROM / (USED IN) INVESTING ACTIVITIES
Acquisition of Property, plant and Equipment (766,821,631) (651,658,410)
Purchase of Intangibles (8,320,402) (155,974,030)
Proceeds from sale of Property, Plant and Equipment - 5,227,598
Interest Received 59,165,978 1,686,225
Dividends Received - -
NET CASH FLOWS FROM INVESTING ACTIVITIES (B) (715,976,054) (800,718,617)
C. CASH FLOWS FROMFINANCING ACTIVITIES
Repayment of Borrowings (313,966,208) (566,592,897)
Interest paid (54,457,779) (68,211,342)
Dividend paid - (4,587,727)
NET CASH FLOWS FROM FINANCING ACTIVITIES (C) (368,423,987) (639,391,966)
INCREASE/(DECREASE)IN CASH AND CASH EQUIVALENTS (A+B+C) (634,234,871) 808,424,115
CASH AND CASH EQUIVALENTS,
Beginning of Year 863,437,751 55,013,636
CASH AND CASH EQUIVALENTS, End of Period 229,202,881 863,437,751

For & on behalf of Board

Shukla Wassan Surendra Silwal Narmadeshwar Narayan Singh Gaurav Khosla

Chairperson Director Director Director

Sundeep Bajoria Dr. Trilochan Upreti Puneet Varshney Ashok Mandal

Director Independent Director Director Finance Controller

As per our attached report of even date

B.K. Agrawal, FCA

Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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Annual Report 2074-75

BOTTLERS NEPAL LIMITED (GROUP)

BOTTLERS NEPAL LIMITED (GROUP)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 32nd Ashad 2075 (July 16th, 2018)
Figures in NPR
Securities Retained
Particulars Share Capital Total
Premium Reserve Earnings
Balance as at 1st Shrawan 2074 194,888,700 165,087,020 1,915,522,963 2,275,498,683
Restated Balance 194,888,700 165,087,020 1,915,522,963 2,275,498,683
Profit for the year - - 972,014,328 972,014,328
Other comprehensive income - - 5,775,363 5,775,363
Dividends - - - -

Balance as at 32nd Ashad 2075 194,888,700 165,087,020 2,893,312,654 3,253,288,374

For & on behalf of Board

Shukla Wassan Surendra Silwal Narmadeshwar Narayan Singh Gaurav Khosla

Chairperson Director Director Director

Sundeep Bajoria Dr. Trilochan Upreti Puneet Varshney Ashok Mandal

Director Independent Director Director Finance Controller

As per our attached report of even date

B.K. Agrawal, FCA

Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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1. CORPORATE INFORMATION

BOTTLERS NEPAL LIMITED (GROUP)

The consolidated financial statements of Bottlers Nepal Limited (Group), includes Statement of Financial Position as at 32nd
Ashad 2075 (16h July 2018) and Statement of Profit or Loss, Statement of Other Comprehensive Income, Statement of Changes
in Equity and Statement of Cash Flows for the year ended 32nd Ashad 2075 (16th July 2018) and related Significant Accounting
Policies and Notes were authorized for issue in accordance with a resolution of the board of directors dated 05th Bhadra 2075
(21st Aug 2018).

Bottlers Nepal Limited (Group), hereinafter referred to as “group”, comprises of Bottlers Nepal Limited (the parent company)
and two subsidiary companies namely Bottlers Nepal (Terai) Limited and Troika Traders Private Limited.

Bottlers Nepal Limited (“Company”) is a public limited company listed on the Nepal Stock Exchange Ltd incorporated under the
Companies Act of Nepal. The registered office of the Company and the principal place of business is located at Balaju Industrial
District, Balaju, Kathmandu, Nepal. Bottlers Nepal Ltd is a licensed bottler, marketer and distributor of non-alcoholic beverages
products of The Coca-Cola Company, Atlanta.

Bottlers Nepal (Terai) Limited (“Company”) is a public limited company listed on the Nepal Stock Exchange Ltd incorporated
under the Companies Act of Nepal. The registered office of the company is located at Balaju Industrial District, Balaju, Kathmandu,
Nepal and regional office is located at Bharatpur, Chitwan, Nepal. Bottlers Nepal (Terai) Limited is a licensed bottler, marketer
and distributor of non-alcoholic beverages products of The Coca-Cola Company, Atlanta.

Troika Traders Pvt. Ltd. (“Company”) is a private limited company incorporated under the Companies Act of Nepal. The
registered office of the Company and the principal place of business is located at Balaju Industrial District, Balaju, Kathmandu,
Nepal. Troika Traders Pvt. Ltd is a licensed distributor of non-alcoholic beverages products of The Coca-Cola Company, Atlanta.

2. BASIS OF PREPARATION

The financial statements have been prepared in accordance with the Nepal Financial Reporting Standards (NFRS) issued by the
Accounting Standards Board Nepal. These confirm, in material respect, to International Financial Reporting Standards (IFRS) as
issued by the International Accounting Standard Board (IASB). The financial statements have been prepared on a going concern
basis. The term NFRS, which includes all the standards and the related interpretations is consistently used.

This section describes the critical accounting judgement that the group has identified as having potentially material impact
on the group’s financial statements and sets out our significant accounting policies that relate to the financial statements as a
whole. Accounting policies along with explanatory notes, wherever such explanation is required, is described in specific relevant
sections. The group’s accounting policies require the management to exercise judgement in making accounting estimates.

2.1 Accounting Pronouncements

The group for its preparation of financial statement has adopted accounting policies to comply with the pronouncements made
by The Institute of Chartered Accountants of Nepal.

2.2 Accounting Convention

The financial statements are prepared on a historical cost basis except for certain financial and equity instruments that are
measured at fair value.

2.3 Presentations
The financial statements are prepared in Nepalese Rupees and rounded off to the nearest rupee.

The figures for previous years are rearranged and reclassified wherever necessary for the purpose of facilitating comparison.
Appropriate disclosures are made wherever necessary.

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The Group presents assets and liabilities in statement of financial position based on current/non-current classification. The
BOTTLERS NEPAL LIMITED (GROUP)

Group classifies an asset as current when it is:

x Expected to be realized or intended to sold or consumed in normal operating cycle,
x Held primarily for the purpose of trading.
x Expected to be realized within twelve months after the reporting period or
x Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after
the reporting period

All other assets are classified as non-current.

The Group classifies a liability as current when it is:

x Expected to be settled in normal operating cycle
x Held primarily for the purpose of trading
x Due to be settled within twelve months after the reporting period or
x There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets/liabilities. Net defined benefit obligation is also classified
as not current liabilities.

The group’s operating cycle has been defined as twelve-month period.

The statement of profit or loss has been prepared using classification ‘by function’’ method.

The statement of cash flows has been prepared using indirect method. Cash flows from operating activities, in addition to the
adjustments from profit for non-cash and non-operating activities, movements in working capital, interest and taxes, separately
include cash flows relating to employee bonus and retirement benefits.

2.4 Accounting Policies

NFRS requires adoption of accounting policies that are most appropriate to the group’s circumstances determining and applying
accounting policies. Directors and management are required to make judgement in respect of items where the choice of specific
policy, accounting estimate or assumption to be followed could materially affect the Group’s reported financial position, results
or cash flows.

Specific accounting policies have been included in the specific section of the notes for each items of financial statements which
requires disclosures of accounting policies or changes in accounting policies. Effect and nature of the changes have been
disclosed wherever required.

The Parent company’s and subsidiaries’ accounting policies are uniform and aligned.

2.5 Accounting Estimates

The preparation of financial statements in line with NFRS which requires management to make judgments, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent assets
and liabilities at the date of financial statements.

The estimates and the underlying assumptions are reviewed on an ongoing basis. Although these estimates are based on
management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result
in the outcomes requiring a material adjustment to the carrying amount of assets or liabilities in future periods. The estimates
are reviewed periodically by the management.

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Annual Report 2074-75

Specific accounting estimates have been included in the relevant section of the notes wherever the estimates have been applied
along with the nature and effect of changes of accounting estimates, if any.

BOTTLERS NEPAL LIMITED (GROUP)

2.6 Financial periods
The group prepares consolidated financial statements in accordance with the Nepalese financial year using Nepalese calendar.
The corresponding dates for Gregorian Calendar are as follows:

Particulars Nepalese Calendar Date / Period Gregorian Calendar Date / Period

SFP* Date 32nd Ashad 2075 16th July 2018
Current Reporting Period 1st Shrawan 2074 – 32nd Ashad 2075 16th July 2017 – 16th July 2018
Comparative SFP* Date 31st Ashad 2074 15th July 2017
Comparative reporting period 1st Shrawan 2073 – 31st Ashad 2074 16th July 2016 – 15th July 2017
*Statement of Financial Position

2.7 Presentation currency

The group’s financial statement is presented in Nepalese Rupees which is also the Group’s functional currency.

2.8 Lease
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks
and rewards incidental to ownership to the Company is classified as a finance lease.

When all the risks and rewards incidental to ownership are not transferred to the Company (an “operating lease"), the total
rentals payable under the lease are charged to the profit or loss statement over the lease term. The Company has leased 3 plots
of land ranging from 20-40 years from Balaju Industrial District (BID). These lease agreements are renewal with mutual consent
after the expiry of the initial lease term. There is no purchase option and no fixed escalation clause, however BID has right to
review the lease payment in each 5 years. Future minimum rentals payable under non-cancellable operating leases as at balance
sheet date are as follows:

i) Bottlers Nepal Limited

Figures in NPR
Period As at 32nd Ashad 2075 As at 31st Ashad 2074
Less than One Year 462,556 66,732
One Year to Five Years 2,834,943 296,956
More then Five Years 4,077,702 4,046,357
Total 7,375,201 4,410,045

ii) Bottlers Nepal (Terai) Limited

Figures in NPR
Period As at 32nd Ashad 2075 As at 31st Ashad 2074
Less then One Year 12,528,000 -
One Year to Five Years 65,656,868 -
More then Five Years 76,180,898 -
Total 154,365,766 -

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Principle of Consolidation
BOTTLERS NEPAL LIMITED (GROUP)

Financial statements of the parent company Bottlers Nepal Limited (BNL) and subsidiaries Bottlers Nepal (Terai) Limited (BNTL)
and Troika Traders Pvt. Ltd. (TTPL) has been consolidated in accordance with NFRS 3 and NFRS 10. The consolidated financial
statements have been prepared on the following basis:

a) The financial statements of the parent and its subsidiary have been combined on a line-by-line basis by adding together
the carrying values of assets, liabilities, revenues and expenses after eliminating intra-Group balances / transactions and
resulting profits in full. Unrealized profit / losses resulting from intra-Group transactions has also been eliminated except to
the extent that recoverable value of related assets is lower than their cost to the Group.
b) The consolidated financial statements have been prepared using uniform accounting policies for like transactions and other
events in similar circumstances and are presented to the extent possible, in the same manner as the Companies’ separate
financial statements. Differences in accounting policies, if any, has been disclosed separately.
c) Non-Controlling Interest’s share in net profit of consolidated subsidiary’s result for the year is identified and adjusted against
the income of the Group in order to arrive at the net income attributable to the group and non-controlling interest.
d) Non-Controlling Interest’s share in net assets of ‘the Group’ is identified and presented in the consolidated statement of
financial position separate from liabilities and the equity of the Company’s shareholders as Non-Controlling Interest (NCI).
e) The extent of the group’s control on the subsidiaries is reflected by the shareholding in the subsidiaries. The details of which
is as under.

Percentage Of Holding as on
Name Country of Incorporation As at 32nd Ashad 2075 As at 31st Ashad 2074

Bottlers Nepal (Terai) Ltd. Nepal 90.78% 90.78%

Troika Traders Pvt. Ltd. Nepal 100% 100%

f) The financial statements of the subsidiary used for consolidation are drawn for the same reporting period as that of the
parent Company i.e. year ended 32nd Ashad, 2075.
 
g) The parent has acquired the shares in the subsidiaries in fair values at the date of acquisition therefore no goodwill is
recognized.

Non-Controlling Interest
Non-controlling interest in the BNL (Group) pertains to the other shareholding in BNTL. Non-controlling interest is presented in
accordance with the provision of NFRS 3 and NFRS 10 by allocating the net assets in the respective company in proportion to
the shares held by other shareholders other than BNL (the parent).

Details of Non-Controlling interest are:

Figures in NPR
Particulars BNTL Percentage

BNL 1,098,472 90.78%

Others 111,528 9.22%

Total 1,210,000 100%

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3. INTANGIBLE ASSETS

BOTTLERS NEPAL LIMITED (GROUP)

Figures in NPR
Particulars Computer Software Intangible assets Total
under development
Cost
Opening balance at 31st Ashad 2074 166,583,125 - 166,583,125
Additions 8,320,402 8,320,402 16,640,804
Disposals/Adjustments - (8,320,402) (8,320,402)
Closing balance at 32nd Ashad 2075 174,903,527 - 174,903,527
Accumulated Amortisation
Opening balance at 31st Ashad 2074 21,929,855 - 21,929,855
Charge for the year 34,702,722 - 34,702,722
Disposals/Adjustments - - -
Closing balance at 32nd Ashad 2075 56,632,577 - 56,632,577
Balance at 32nd Ashad 2075 118,270,950 - 118,270,950
Balance at 31st Ashad 2074 144,653,270 - 144,653,270

Intangible assets are recognized on the basis of costs incurred to acquire and bring to use the specific intangible assets such as,
software, where it is probable that such asset will generate future economic benefits in excess of its cost.

Computer software cost are amortized on the basis of expected useful life, which is estimated as 5 years (the estimate is being
reviewed periodically). Costs associated with maintaining software are recognized expenses as and when incurred. At each
statement of financial position date, these assets are assessed for indication of impairment. In the event that an asset's carrying
amount being greater than its recoverable amount, the assets is considered to be impaired and is written down immediately.

The expenditure incurred in acquisition and installation of new software till the date of commissioning is recognized as intangible
under development. Software is capitalized upon successful test run and after meeting recognition criteria. On our assessment
certain assets’ carrying value had to be written down. Consequently, the carrying gross value and the relevant accumulated
depreciation has been adjusted in specific assets classification wherever required. After completion of appropriate approval
procedures these amount will be written off.

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4. PROPERTY PLANT AND EQUIPMENT

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Figures in NPR

Office Capital work-in-

Particulars Buildings Plant & Machinery Coolers Containers Other Assets Total
Equipment progress

Cost

Balance at 31st Ashad

Annual Report 2074-75

841,458,978 3,022,071,485 57,028,226 838,216,027 1,172,774,911 25,049,019 155,382,734 6,111,981,380

2074
Adjustment
Bottlers Nepal Limited

- - - - - - - -
(ReClassification)

Additions 42,755,612 206,797,587 37,093,494 149,266,239 329,767,466 3,066,537 766,821,631 1,535,568,566

Disposals/Adjustments (465,740) (11,524,011) (13,469,025) (75,768,602) (58,723,114) (38,000) (768,746,935) (928,735,427)

Balance at 32nd Ashad
883,748,850 3,217,345,062 80,652,694 911,713,664 1,443,819,263 28,077,556 153,457,430 6,718,814,519
2075
Depreciation and
Impairment Losses
Balance at 31st Ashad
109,595,827 1,089,251,611 38,378,050 337,337,915 570,914,591 20,701,538 - 2,166,179,532
2074
Adjustment
- - - - - - - -
(ReClassification)

Charge for the year 23,098,169 164,509,909 8,156,326 100,165,160 175,889,701 1,223,972 - 473,043,236

Disposals/Adjustments (465,740) (4,264,772) (12,204,227) (65,882,534) (56,594,235) (38,000) - (139,449,508)

Balance at 32nd Ashad

132,228,256 1,249,496,747 34,330,150 371,620,541 690,210,056 21,887,510 - 2,499,773,260
2075
Net Block

Balance at 32nd Ashad

751,520,594 1,967,848,314 46,322,544 540,093,123 753,609,206 6,190,043 153,457,430 4,219,041,255
2075
Balance at 31st Ashad 2074 731,863,151 1,932,819,874 18,650,175 500,878,112 601,860,321 4,347,481 155,382,734 3,945,801,849
 Bottlers Nepal Limited
Annual Report 2074-75

Property, plant and equipment are initially measured at cost in the statement of financial position. These are inclusive of all
cost less any subsequent accumulated depreciation and subsequent accumulated impairment losses, if applicable for each class

BOTTLERS NEPAL LIMITED (GROUP)

of assets. Property, plant and equipment are recognized as an asset, if and only if it is probable that future economic benefits
associated with the item will flow to the Group and the cost of the item can be measured reliably.

Cost includes the purchase price and other directly attributable costs of property, plant and equipment. Cost also includes the
cost of replacing part of the plant and equipment and borrowing costs for long-term construction projects if the recognition
criteria are met. When significant parts of plant and equipment are required to be replaced at intervals, the Group depreciates
them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized in
the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and
maintenance costs are recognized in profit or loss as incurred. If an item of property, plant and equipment consists of several
components with different estimated useful lives, those components that are significant are depreciated over their individual
useful lives. Subsequent costs that do not qualify the recognition criteria under NFRS are expensed as and when incurred.

The present value of the expected cost for the decommissioning of an asset after its use is considered for determination of cost
of the respective asset if the recognition criteria under NAS 16 and IFRIC 1. Management determines that such costs are not
material thus are not considered.

Assets in the course of construction are carried at cost, less any recognized impairment loss, if any. Depreciation on these assets
will commence when these assets are ready for their intended use and classified under specific asset category.

The group has made a provision for missing/obsolesce assets in the financial statement and the carrying gross value and the
relevant accumulated depreciation has been adjusted in specific block of assets wherever required. Post appropriate approval,
the individual item of assets is written off from Fixed Assets Register.

4.1 Depreciation
Depreciation on items of property plant and equipment is calculated on the straight-line method based on the useful life of the
assets estimated by the management. Depreciation on additions to property plant and equipment is provided on pro-rata basis
in the year of purchase, when the asset is ready to use. The residual values, useful lives and the depreciation methods of assets
are reviewed at least at each financial year end and, if expectations differ from previous estimates are accounted for as a change
in accounting estimates in accordance with NAS 8. If an item of property plant and equipment consist of several components
with different useful lives, those components that are significant are depreciated over their individual useful life.

Particulars Clubbed under following class of assets Useful Life (Years)

Building Building 40
Plant and Machinery Plant and Machinery 20
Cooler Cooler 9
Office Equipment Office Equipment 5
Computer Accessories Office Equipment 4
Bottles Containers 5
Crates Containers 8
Plastic Pallets Other Assets 5
Furniture and Fixtures Other Assets 10
Motor Vehicles Other Assets 5
Other Assets* Other Assets 10

*Other assets majorly includes transformers, electrical installations and soft drink analyzer.

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4.1.1 Change in Accounting Estimate

BOTTLERS NEPAL LIMITED (GROUP)

Change in accounting estimate is an adjustment of the carrying amount of an asset or a liability, or the amount of the periodic
consumption of an asset, that results from the assessment of the present status of, and expected future benefits and obligations
associated with, assets and liabilities. Changes in accounting estimates result from new information or new developments and
accordingly, are not corrections of errors.

4.2 De-recognition
An item of property plant and equipment is de-recognized on disposal or when no future economic benefits are expected from
the use of that asset. The gain or loss arising from the disposal of an item of property, plant and equipment is the difference
between net disposal proceeds, if any, and the carrying amount of that item and is recognized in the statement of profit and loss.

4.3 Capital Work in Progress

The expenditure incurred in acquisition and installation of new systems and equipment till the date of commissioning or civil
works under construction till the date of completion is recognized as Capital works-in-progress. Equipment are capitalized upon
commissioning and civil works are capitalized upon handing over after being capable of being used.
Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Buildings - 12,401,860
Cooler - 25,734,248
ETP Upgradation - 15,193,213
DG Accessories - 7,010,952
Machineries - 9,422,143
CIP - 9,435,507
Laptops - 380,000
Coolers 83,436,443 27,367,228
Containers - 45,882,125
Shed - 271,158
Others 2,128,734 2,284,300
Bottles 8,769,913 -
Furniture & Fixtures 265,090 -
IT Equipments 1,591,608 -
Machinery 57,265,642 -
Total 153,457,430 155,382,734

5. INCOME TAXES
5.1 Current Income Tax
Each consolidated company is a separate assessable unit for income taxes. The company’s tax liabilities, advance taxes and tax
expenses for the period is calculated as individual units.
Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Current tax on profits for the year 259,189,200 152,739,029
Adjustment for prior periods 1,105,000 4,230,019
Total 260,294,200 156,969,048

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5.2 Deferred Income Taxes

BOTTLERS NEPAL LIMITED (GROUP)

Figures in NPR

Particulars For the Year 2074-75 For the Year 2073-74

Origination and reversal of temporary differences 7,937,614 22,377,177

Total 7,937,614 22,377,177

5.3 Deferred Tax Liability

Deferred tax is calculated on temporary differences using the effective tax rate for Bottlers Nepal Ltd. of 17% and for Bottlers
Nepal (Terai) Ltd. of 16%. Deferred tax assets have been recognized in respect of all tax losses and other temporary differences
giving rise to deferred tax assets where the management believe it is probable that these assets will be recovered.

FY : 74/75 Figures in NPR

Particulars Carrying Amount Tax Base Temporary Diff
1 Property, Plant & Equipment 3,997,675,272 3,134,805,929 (862,869,344)
2 Provisions for Expenses (743,788,943) - 743,788,943
3 Intangible Assets 120,657,409 124,567,764 3,910,355
Total Amount (115,170,045)
Tax Rate (16,780,176)
Opening Deferred tax Assets/(Liability) 75,602,128
Deferred tax provision recognised (2,822,896)
Closing Deferred tax Assets/(Liability) (16,780,175)
Charge/(Credit) to OCI (856,736)
Charge/(Credit) to PL 7,937,614

FY : 73/74 Figures in NPR

Particulars Carrying Amount Tax Base Temporary Diff
1 Property, Plant & Equipment 3,769,285,769 3,016,484,911 (752,800,858)
2 Provisions for Expenses (713,146,080) - 713,146,080
3 Intangible Assets 144,653,269 142,143,530 (2,509,739)
Total Amount (42,164,517)
Tax Rate 17% (7,167,968)
Opening Deferred tax Assets/(Liability) (3,099,621)
Deferred tax provision recognised (4,068,346)
Closing Deferred tax Assets/(Liability) (7,167,968)
Charge/(Credit) to OCI (18,308,830)
Charge/(Credit) to PL 22,377,176

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5.4 Reconciliation
BOTTLERS NEPAL LIMITED (GROUP)

Reconciliation of taxable profit and the accounting profit: -

Figures in NPR
Particulars For the year 2074-75 For the year 2073-74

Accounting profit before income tax 1,308,575,851 882,207,158

Adjustment as per Income Tax Act 2058 204,113,354 13,822,015

Total profit as per Income Tax 1,512,689,205 896,029,173

6. INVENTORIES
Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Raw materials 936,197,993 927,422,740
Work-in-process 13,790,102 5,476,234
Finished goods 190,096,386 227,215,064
Consumables 496,660,852 356,737,720
Total 1,636,745,333 1,516,851,758
Inventories are carried at the lower of cost or net realizable value.

Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and
the necessary estimated expenses. The cost of obsolescence and other anticipated losses are also considered for determining
the net realizable values.

In determining the cost of raw materials and packing materials, First In First Out (FIFO) method is used. Cost of inventory
comprises of all costs of purchase, duties, taxes (other than those subsequently recoverable from tax authorities), cost of
conversion and other costs incurred in bringing the inventories to their present location and condition.

In determining the cost of consumables, stores and spares weighted average cost method is used.

Cost of finished goods includes the cost of raw materials, packing materials, direct labor and appropriate proportion of fixed and
variable production overheads incurred in bringing the inventory to their present location and condition.

Inventories are presented net of allowance for obsolescence and other possible depletion in value or other losses. Those
allowances are estimated to approximate the net realizable value of such items. Allowance adjustments are made for those
inventories identified by management as obsolete on the basis of 10 Year Aging or technical evaluation whichever is earlier.

Inventories have been pledged as lien for the purpose of availing bank overdraft facilities.

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7. OTHER ASSETS

BOTTLERS NEPAL LIMITED (GROUP)

7.1 Prepayments
These are expenses paid for the period beyond the financial period covered under the financial statement. These will be
charged off as expenses in the respective period for which such expenses pertain to.
Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074

Prepaid Expenses 59,336,881 61,283,670

Total 59,336,881 61,283,670
Current 29,573,451 30,731,576
Non Current 29,763,431 30,552,094

Financial Instruments: Financial Assets

Financial asset is any asset that is:
(a) cash
(b) an equity instrument of another entity;
(c) a contractual right:
i) to receive cash or another financial asset from another entity; or
ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable to
the entity; or
(d) a contract that will or may be settled in the entity's own equity instruments and is:
(i) a non-derivative for which the entity is or may be obliged to receive a variable number of the entity's own equity
instruments; or
(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset
for a fixed number of the entity's own equity instruments.

Financial assets are classified under four categories as required by NAS 39, namely,
x Fair Value through Profit or Loss,
x Held to Maturity,
x Loans & Receivables and
x Available for Sale.

The Group only holds financial assets meeting the recognition criteria of Loans & Receivables classification. These instruments
are to be recognized at amortized cost using effective interest rate.

Financial assets of the Group comprise of advances, other current assets, Trade Receivables and cash & cash equivalents. These
instruments are mostly non-interest bearing and where interest component is present the implicit interest rate approximates
effective interest rate. These instruments are expected to be settled or recovered within a year. Therefore, it is assumed that the
carrying amount represents the amortized cost of the assets.

Risks associated with Financial Instrument- Financial Assets

The Group has a risk management framework to monitor, access, mitigate and manage risks. The risk management framework
is given in Note 28.

Financial Assets include the following

x Advances
x Other Current Assets
x Trade Receivables
x Cash and Cash Equivalents
These have been described in each section as under

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7.2 Advances
BOTTLERS NEPAL LIMITED (GROUP)

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074

Capital Advances 1,004,789 10,950,092

Advances to Employees 4,709,704 1,485,953
Total 5,714,493 12,436,045

These advances are non-interest bearing and are expected to be settled in the normal course of operations.

7.3 Other Current Assets

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074

Security Deposits 1,121,054 1,068,459

Advance to suppliers 200,983,782 48,404,196
Advances to Employees 13,760,370 11,482,031
Balances with statutory/government authorities 129,357,000 88,714,595
VAT Receivable (Net) 12,162,776 16,178,231
Advance Income Tax (Net) 15,999,396 -
Total 373,384,378 165,847,511

8. TRADE RECEIVABLE

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074

Trade receivables
Secured, considered good 127,537,529 104,309,840
Unsecured considered good 56,810,648 18,909,415
Receivables from other related parties 133,104,196 -
Interest Income Receivables 943,426 1,598,630
Other receivables - 225,169
Total 318,395,799 125,043,053

Bank overdrafts are secured against all receivables.

8.1 Trade Receivables

Trade receivables comprises of amount receivable from our customers and are non-interest bearing and are generally on terms
of 30 to 90 days.
Secured trade receivable are against Bank Guarantee provided by the customers.

8.2 Other Receivables

Other receivables are receivable from insurance companies against unsettled claims.

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8.3 Related Parties Transaction

It includes transactions with group companies and key management personnel which are disclosed in Note 27.

BOTTLERS NEPAL LIMITED (GROUP)

8.4 Impairment
For allowances, assets with a potential need for a write-down are grouped together on the basis of similar credit risk
characteristics, tested collectively for impairment, and written-down, if necessary. Estimated irrecoverable amounts are based
on the ageing of the receivable balances, taking previous cases of default into consideration and historical experiences.

9. CASH AND CASH EQUIVALENTS

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074

Balances with Banks

– On current accounts 78,771,720 78,938,319
– Deposits accounts 150,300,000 784,217,291
Cash on hand 131,161 282,140
Total 229,202,881 863,437,751
Balances with banks comprises of amount held by the banks as - 4,175,448
margin money deposits against Letter of Credits
Balances with banks comprises of amount held as Fixed Deposit 150,000,000 780,000,000

Cash at banks earns interest at floating rates based on daily balances.

Short-term deposits are made for varying periods of between one day and three months, depending on the cash requirements
of the group, and earn interest at the respective short-term deposit rates.
Deposit with banks as margin against Letter of Credits have tenure of three months on an average and are included in Balances
with Bank and considered as cash and cash equivalents.
The above balances are also considered as the cash & cash equivalents for Statement of Cash Flow purposes.

10. SHARE CAPITAL

As at 32nd Ashad 2075 As at 31st Ashad 2074

Particulars
No. of Shares NPR No. of Shares NPR
Authorized
Ordinary shares of Rs. 100 each 4,300,000 430,000,000 4,300,000 430,000,000
Issued and Paid Up
Ordinary shares of Rs. 100 each 1,948,887 194,888,700 1,948,887 194,888,700
At the beginning of the year 1,948,887 194,888,700 1,948,887 194,888,700
At the end of the year 1,948,887 194,888,700 1,948,887 194,888,700

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The shareholding pattern on the company is as follows

BOTTLERS NEPAL LIMITED (GROUP)

As at 32nd Ashad 2075 As at 31st Ashad 2074

Shareholder Category
No. of Shares % of holding No. of Shares % of holding
Coca-Cola Southwest 1,484,301 76.16% 1,484,301 76.16%
Gorkha Brewery 428,755 22.00% 428,755 22.00%
Other Shareholders 35,831 1.84% 35,831 1.84%
Total 1,948,887 100.00% 1,948,887 100.00%

Share issue expenses have not been netted off against the capital collected as these pertain to periods of initial establishment
of the Group and such expenses have been charged off during those periods. The management considers that the cost of
obtaining information is more than the benefits derived and the effect of such the amounts to be immaterial.

11. RESERVE AND SURPLUS

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Share Premium 165,087,020 165,087,020
Retained earnings 2,893,312,654 1,915,522,963
(As per Statement of Changes in Equity)
Total 3,058,399,674 2,080,609,983

Share premium is used to record the premium on issue of equity shares. These can only be utilized in accordance with the
provision of the Companies Act.
i) Premium of Rs.100 each on 264,995 ordinary shares;
ii) Premium of Rs.160 each on 866,172 ordinary shares issued as rights shares at the rate of 4 shares for 5 shares held.

12. NON-CONTROLLING INTEREST

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Share Capital 11,152,800 11,152,800
Opening Reserves 106,440,132 68,966,422
Profit for the year 68,329,709 44,484,252
Other Comprehensive Income for the year 586,373 (4,221,494)
Dividend Income (2,788,200) (2,789,049)
Total 183,720,814 117,592,932

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13. EMPLOYEE BENEFITS

BOTTLERS NEPAL LIMITED (GROUP)

13.1 Current Employment Benefits
Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Salaries, wages and other employee cost
Cost of sales 452,683,064 383,861,460
Selling and distribution expenses 261,295,497 224,081,261
Administrative and operating expenses 148,215,304 146,405,674
Defined Contribution Plan Expenses
Cost of sales 7,788,061 7,584,479
Selling and distribution expenses 3,924,035 3,579,503
Administrative and operating expenses 256,836 649,225
Defined Benefit Plan Cost
Cost of sales 50,614,079 49,722,396
Selling and distribution expenses 9,931,351 17,617,348
Administrative and operating expenses 7,742,571 12,746,011
Total Employee Cost for the Period 942,450,798 846,247,357

13.2 Post-Employment Benefits

The group operates number of defined benefit and defined contribution plans for its employees of the group. The defined
benefit plan of the group includes leave encashment expenses, expenses pertaining to gratuity and other retirement benefits.
2074-75 Figures in NPR
Particulars Gratuity Leave Encashment Others Total
Opening Liability 385,272,721 19,564,855 255,596,715 660,434,291
Current Service cost 1,851,183 3,406,000 15,798,733 21,055,916
Interest Charge 28,195,000 1,410,000 17,946,000 47,551,000
Paid (18,677,721) (1,538,855) (12,251,736) (32,468,312)
Actuarial (gain)/loss during the year
(8,123,000) (2,491,000) 5,109,000 (5,505,000)
(recognised in OCI)
Closing Liability 388,518,183 20,351,000 282,198,712 691,067,895
Charge for the period to SoPL 30,046,183 4,816,000 33,744,733 68,606,916
Charge to SoCI (8,123,000) (2,491,000) 5,109,000 (5,505,000)

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BOTTLERS NEPAL LIMITED (GROUP)

2073-74 Figures in NPR

Particulars Gratuity Leave Encashment Others Total
Opening Liability 340,142,146 15,056,062 182,808,312 538,006,520
Current Service cost 21,768,000 2,150,000 16,369,755 40,287,755
Interest Charge 25,624,000 1,166,000 13,008,000 39,798,000
Paid (39,669,424) (961,207) (24,726,352) (65,356,983)
Acturial (gain)/loss during the year
37,408,000 2,154,000 68,137,000 107,699,000
(recognised in OCI)
Closing Liability 385,272,721 19,564,855 255,596,715 660,434,291
Charge for the period to SoPL 47,392,000 3,316,000 29,377,755 80,085,755
Charge to SoCI 37,408,000 2,154,000 68,137,000 107,699,000

13.3 Defined Benefit Plans

The defined benefit plans of the group includes Gratuity, Leave encashment Entitlements and Other Retirement benefits.

13.3.1 Gratuity
Gratuity for existing and retired employees have been provided as per the actuarial assessment. The assessed amounts have
been recognized as liabilities. The gratuity shceme is computed on below basis: -

A. Gratuity Benefit till 3rd September 2017:

Plan Service Definition Number of years of service rounded to the nearest integer.
Salary Definition Last drawn Basic Salary
Vesting Schedule 3 years
Normal Retirement Age 58 years
Benefit on normal retirement/ Nil for each year of service up to 3 years
early retirement/death/ disabil- 1/2 months’ salary of each year of service up to 7 years.
ity in service
2/3 months’ salary for each year of service for service between 7 and 15 years.
1 month salary for each year of service for service between 15 and 17 years.
1 month 5 days’ salary for each year of service for the service over 17 years.
Benefit on withdrawal Nil for each year of service up to 3 years
1/2 months’ salary of each year of service up to 7 years.
2/3 months’ salary for each year of service for service between 7 and 15 years.
1 month salary for each year of service for service between 15 and 17 years.
1 month 5 days’ salary for each year of service for the service over 17 years.
Maximum Limit No Limit
Tax on Gratuity* 15%, borne by the Group
*The tax under gratuity scheme is applicable to the accrued service post 31st March 2002 and is payable at a flat rate of 15% of
the benefit using gross up approach. Hence, any service prior to 31st March 2002 does not attract any tax.

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B. Gratuity Benefit on or after 4th September 2017:

BOTTLERS NEPAL LIMITED (GROUP)

Plan Service Definition Number of years of service rounded to the nearest integer.
Salary Definition Last drawn Basic Salary
Vesting Schedule No vesting available
Normal Retirement Age 58 years
Benefit on normal retirement/ early retire- 8.33 % of Basic Salary per month for each year of service
ment/death/ disability in service
Benefit on withdrawal 8.33 % of Basic Salary per month for each year of service
Maximum Limit Accumulated Corpus
No actuarial valuation has been carried out for benefit accruing after 3rd September 2017, as it will be Defined Contribution
Scheme.

13.3.2 Leave Encashment

Leave encashment has been computed using actuarial assumptions. The assumptions made are the growth rate derived from
the past experience and discounting the long term obligations at the end of each reporting period. Sick leave of 1.5 times the
last drawn monthly basic salary is paid to employee. The maximum accumulation allowed is 30 days.

13.3.3 Other Retirement Benefits

Other retirement benefits include three days’ basic salary computed based on completion of 17 years compulsory retirement
or 20 years of completion of service for withdrawal and gold coin at compulsory retirement. Other retirement benefits have
been computed using actuarial assumptions. The assumptions made are the growth rate derived from the past experience and
discounting the long term obligations at the end of each reporting period.

13.3.4 Sensitivity Analysis

Figures in NPR
Retirement
Particulars Gratuity Sick Leave
Benefit
Effect on DBO due to 0.5% increase in discount rate (11,856,000) (12,677,000) (970,000)
Effect on DBO due to 0.5% decrease in discount rate 12,537,000 13,733,000 1,052,000
- - -
Effect on DBO due to 0.5% increase in salary escalation rate 11,318,000 12,700,000 975,000
Effect on DBO due to 0.5% decrease in salary escalation rate (10,824,000) (11,863,000) (908,000)

The above sensitivity analysis is based on a change in an assumption while holding all other assumption constant. In practice,
this unlikely to occur and changes in some of the assumption is correlated. When calculating sensitivity of the defined benefit
obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated
with projected unit credit method at the end of reporting period) has been applied as when calculating the defined benefit
liability recognized in the date of Statement of Financial Position.

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13.3.5 Actuarial Assumptions

BOTTLERS NEPAL LIMITED (GROUP)

Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074

Financial Assumptions
Discount rate (%) 7.50% 7.50%
Salary escalation rate 10.00% 10.00%
Expected return on Plan Assets Nil Nil
Future service Expected average remaining working life Expected average remaining working life
of the employees based on withdrawal of the employees based on withdrawal
rate and retirement age taken as 8 years rate and retirement age taken as 8 years
Demographic Assumptions
Mortality In accordance with the standard table, In accordance with the standard table,
Indian Assured Lives Mortality (2006-08) Indian Assured Lives Mortality (2006-08)
(modified) Ultimate Rates (modified) Ultimate Rates
Withdrawal rate 3.50% 3.50%

13.3.6 Defined Benefit Plan Assets

Defined benefit obligations are not funded and there are no Defined Benefit Plan Assets. The group is in the process of creating
a separate fund for meeting the defined benefit obligation.

13.4 Defined Contribution Plan

The defined contribution expenses include employer's contribution to provident fund. These amounts have been deposited in
Employee Provident Fund, a 100% Government of Nepal undertaking.

14. FINANCIAL INSTRUMENTS – FINANCIAL LIABILITIES

A financial liability is any liability that is:

a) contractual obligation:
(i) to deliver cash or another financial asset to another entity; or
(ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable
to the entity; or
(b) a contract that will or may be settled in the entity’s own equity instruments and is:
(i)   a non-derivative for which the entity is or may be obliged to deliver a variable number of the entity’s own equity
instruments; or
(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset
for a fixed number of the entity’s own equity instruments.

The Group classifies financial liabilities as Fair Value through Profit or Loss and those Held at Amortized Cost. All financial
liabilities held by the Group are classified as financial liabilities held at amortized cost using effective interest rate.

Financial liabilities held by the Group are both interest bearing and non-interest bearing.
The non-interest bearing instruments’ carrying value represents the amortized cost.

For interest bearing financial liabilities which comprises of the bank loans, interest charged by the bank approximates effective
interest rate and the rate is considered for calculation of amortized cost of liability and the finance cost. The effect of initial
charges and its impact on effective interest rate is considered not material and the carrying value is considered to approximate
the amortized cost.

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Risks associated with Financial Instrument- Financial Liabilities

The group has a risk management framework to monitor, access, mitigate and manage risk. The risk management framework

BOTTLERS NEPAL LIMITED (GROUP)

is given is Note 28.

Financial Liabilities in this financial statements include the following

• Bank Borrowing
• Trade Payables
• Other Financial Liabilities

These have been described in each section as under

14.1 Current Borrowings

Figures in NPR
Particulars Rate of Interest (%) Maturity As at 32nd Ashad 2075 As at 31st Ashad 2074
Bank overdrafts 8.30% On demand 496,608,770 434,574,979
Secured bank loan 8.30% - 376,000,000
Total 496,608,770 810,574,979

Short term bank overdraft carries interest at the rate 7.25% to 9.20% p.a. during the year and repayable on demand.

Bank overdrafts are secured against all movable properties/current assets including inventory stocks & trade receivables whereas
Term Loan has been secured against immovable properties, with Standard Chartered Bank Limited, Nepal.
**Secured Bank Loan carries interest at the rate 8.30% p.a. during the year & repayable on due date.

14.2 Trade Payables

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Trade Payable 1,192,912,768 1,305,455,254
Trade Payable to Related Parties 250,226,374 943,970,782
Total 1,443,139,142 2,249,426,036

15. OTHER FINANCIAL LIABILITIES

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074

Interest payables 2,020,016 1,620,424

Container deposit liability 651,839,549 573,852,545
Corporate Social Responsibility 24,894,773 10,685,713
Trade Deposits 3,873,987 4,393,019
Advance received from distributors 38,044,556 14,477,947
Employee related accruals 1,944,550 826,892
Statutory dues payable 145,837,887 87,681,940
Advance against unsettled Claims 7,031,483 6,355,221
Income tax payable (Net) - 14,766,316
Total 875,486,801 714,660,018

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Provisions are recognized when the group has a present obligation, legal or constructive, as a result of a past event, it is
BOTTLERS NEPAL LIMITED (GROUP)

probable that a transfer of economic benefits will be required to settle the obligation and when reliable estimate can be made
of the amount of obligation. If these conditions are not met, no provision is recognized.
The amount of provision recognized is the management’s best estimate of expenditure required to settle the present obligation
at the reporting date.

Corporate Social Responsibility

CSR Provision is accounted as per Industrial Enterprises Act 2016 (2073 BS) (the "Act") has been introduced with effect from
November 22, 2016 repealing the Industrial Enterprises Act 1992 (2049 BS) (the "Previous Act").
Section 48 Industrial Enterprises Act 2016 (2073 BS) makes it mandatory to allocate 1% of the annual profit to be utilized
towards corporate social responsibility (the “CSR Requirement”).
The fund created for CSR is to be utilized on the basis of annual plans and programs but in the sectors that are prescribed under
the Act however, such sectors are yet to be specified by the Act. The progress report of the utilization of the fund collected
for CSR is required to be submitted to the relevant government authorities registered within three months from expiry of the
financial year.

Changes in provision
Management reviews provisions at each reporting date and is adjusted to reflect the best estimate. If it is no longer probable
that a transfer of economic benefits will be required to settle the obligation, the provision is reversed.

16. REVENUE
Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Sale of goods 10,197,472,093 8,569,963,106
Less: Discount (1,114,017,708) (873,180,301)
Total 9,083,454,385 7,696,782,805

16.1 Sale of Goods

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the group and the revenue and
associated costs incurred or to be incurred can be reliably measured and when recognition criteria related to sale of goods
activities i.e when the significant risks and rewards of ownership of the goods have transferred to the buyer, with the group
retaining neither continuing managerial involvement to the degree usually associated with ownership, nor effective control over
the goods sold.
Revenue is measured at the fair value of the consideration received or receivable net of trade discounts. Revenue include all
revenue from ordinary activities of the Group that are recorded net off Value Added Taxes and Excise Duty collected from the
customer that are remitted or are to be remitted to the government authorities.
The group generates revenue from sale of goods in the ordinary course of business.

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17. COST OF SALES

BOTTLERS NEPAL LIMITED (GROUP)

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Material consumed
Raw materials
At 1st Shrawan 927,422,740 1,021,476,904
Purchase 4,127,150,287 3,697,571,846
Less: Transfer to Bottlers Nepal (Terai) Ltd. - -
At 32nd Ashad (936,197,993) (927,422,740)
Raw material consumed total 4,118,375,034 3,791,626,010
Work in process
At 1st Shrawan 5,476,234 5,800,886
At 32nd Ashad (13,790,102) (5,476,234)
Net change in work-in-process (8,313,868) 324,652

Production and manufacturing overheads 1,502,564,946 1,163,776,784

Finished goods stock

At 1st Shrawan 227,215,064 171,149,912
Purchase 273,026,788 396,429,751
At 32nd Ashad (190,096,386) (227,215,064)
Net change in finished goods stock 310,145,466 340,364,598
Cost of sales 5,922,771,578 5,296,092,043

17.1 Production and Manufacturing Overheads

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Salaries, wages and other employee cost 452,683,064 383,861,460
Sick Leave 3,012,000 2,037,000
Provident fund 7,788,061 7,584,479
Gratuity 19,765,000 32,872,000
Other retirement benefits 27,837,079 14,813,396
Travel and transport costs 12,099,023 7,385,806
Repair and maintainence 174,705,099 123,500,459
Communication expenses 93,653 84,281
Consumables 91,383,620 74,572,288
Loss on sale/write off of Property plant equipment (net) 8,423,389 (4,591,376)
Stock Adjustment 1,012,155 2,999,396
Office expenses 40,337,036 28,544,254
Power & Fuel 185,299,964 164,683,064
Legal and other professional fees 1,610,748 1,683,698
Depreciation on property, plant and equipment 388,125,372 346,095,257
Amortization of Intangible Assets 22,022,608 6,475,258
Testing & Sampling 9,523 1,870,919
Exchange Gain/Loss 66,357,552 (30,694,856)
Total 1,502,564,946 1,163,776,784

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18. OTHER OPERATING INCOME

BOTTLERS NEPAL LIMITED (GROUP)

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Sale of Scrap 16,626,319 14,803,161
Miscellaneous Income 4,602,080 37,723,002
Total 21,228,399 52,526,163

18.1 Sale of Scrap

Items includes under this income are towards sale amount realized from sale of scraps.

18.2 Miscellaneous Income

Income includes amount claim from Insurance on account of Loss of profit and charges recovered from customer on account of
handling loss of Glass Bottles.

19. SELLING AND DISTRIBUTION EXPENSES

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Salaries, wages and other employee cost 261,295,497 224,081,261
Sick Leave 895,000 676,000
Provident fund 3,924,035 3,579,503
Gratuity 5,456,000 7,598,000
Other retirement benefits 3,580,351 9,343,348
Travel and transport costs 22,098,453 19,843,221
Office expenses 21,966,503 7,625,976
Repair and maintainence 28,151,951 31,562,204
Communication expenses 2,716,148 1,710,803
Utilities 43,497,216 27,469,050
Freight Charges 534,513,066 435,865,069
Liquid leakages and damages 153,318,252 144,157,556
Sales promotion expenses 301,335,870 113,984,259
Other miscellaneous expenses 15,839,417 25,189,128
Depreciation on property, plant and equipment 80,548,993 74,743,930
Amortization of Intangible Assets 3,880,852 6,559,581
Loss on sale/write off of Property plant equipment (net) - (80,072)
Total 1,483,017,604 1,133,908,817

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20. ADMINISTRATIVE AND OPERATING EXPENSES

BOTTLERS NEPAL LIMITED (GROUP)

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Salaries, wages and other employee cost 148,215,304 146,405,674
Sick Leave 909,000 603,000
Provident fund 256,836 649,225
Gratuity 4,825,000 6,922,000
Other retirement benefits 2,008,571 5,221,011
Travel and transport costs 19,236,546 23,558,706
Office expenses 61,886,677 55,525,625
Repair and maintainence 10,353,977 4,757,847
Bank charges 9,114,544 5,491,584
Audit fees 840,000 840,000
Legal and other professional fees 22,797,590 13,597,703
Communication expenses 37,233,626 55,360,895
Utilities 11,650,787 9,905,740
Depreciation on property, plant and equipment 8,521,048 9,472,717
Amortization of Intangible Assets 4,647,085 2,260,584
Loss on sale/write off of Property plant equipment (net) 12,115,595 (556,150)
Corporate Social Responsibility 15,060,236 10,685,713
Public Affairs and Communication (PAC) expenses 7,219,202 5,289,599
Security Expenses 15,000,767 13,798,437
Board and AGM expenses 788,329 675,602
Other miscellaneous expenses 1,529,692 3,528,191
Total 394,210,412 373,993,703

20.1 Audit Fees Disclosure

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74

Statutory Audit Fee 840,000 840,000

Allowances 513,500 497,238
Total 1,353,500 1,337,238

21. FINANCE COST

Finance costs comprises of interest on Term Loan and interest on short term borrowings in the form of bank overdrafts. All these
costs are amortized cost using effective interest rate as required by NAS 39.
Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74

Interest on Overdraft 54,534,323 18,031,693

Interest on Term Loan - 48,360,408
Total 54,534,323 66,392,102

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22. FINANCE INCOME

BOTTLERS NEPAL LIMITED (GROUP)

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74

Interest income 58,426,983 3,284,855

Total 58,426,983 3,284,855

22.1 Interest Income

Interest income has been recognized using effective interest method as required by NAS 39.

23. EARNINGS PER SHARE

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74

Numerator
Profit for the year and earnings used in basic EPS and 972,014,328 658,376,681
diluted EPS
Denominator
Weighted average number of shares used in basic EPS 1,948,887 1,948,887
Basic and Diluted Earning Per Share 499 338

Basic EPS is calculated by dividing the profit attributable to ordinary equity holders of the group for the period by the weighted
average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares. Number
of shares have not changed over the reported periods. There are no potential ordinary shares that would dilute basic earnings
per share, hence diluted EPS is same as basic EPS

24. CONTINGENT LIABILITIES AND CAPITAL COMMITMENT

24.1 Contingent Liabilities

Contingent liabilities are potential future cash out flows, where the likelihood of payment is considered more than remote, but
is not considered probable or cannot be measured reliably.

24.1.1 Bank Guarantee

Bank Guarantee has been provided to the department of Customs for obtaining EXIM Code. As at the reporting date the
guarantee amount is NPR 900,000.

24.1.2 Corporate Tax Matters

i) LTO assessed the income tax, TDS and VAT liabilities of the following companies for the year 2066-67. For the unaccepted
amount, the company has filed the case for Administrative Review. Pending decision from the Director General, additional
liabilities have not been recognized in the financial statements and is disclosed as contingent liabilities as below: -

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a) Bottlers Nepal Limited

BOTTLERS NEPAL LIMITED (GROUP)

Figures in NPR
Particulars Additional Demand Accepted amount Appeal against demand
Income-Tax 6,106,075 - 6,106,075
TDS 3,672,212 173,901 3,498,311
Vat 26,737,720 8,540,112 18,197,608

b) Bottlers Nepal (Terai) Limited

Figures in NPR
Particulars Additional Demand Accepted Amount Appeal against demand
Income-Tax 5,393,862 14,164 5,379,698
TDS 4,510,857 255,194 4,255,663
VAT 20,397,706 12,172,084 8,225,622

ii) LTO assessed the income tax, TDS and VAT liabilities of the following companies for the year
2067-68. For the unaccepted amount, the company has filed the case for Administrative Review. Pending decision from the
Director General, additional liabilities have not been recognized in the financial statements and is disclosed as contingent
liabilities as below

a) Bottlers Nepal Limited

Figures in NPR
Particulars Additional Demand Accepted Amount Appeal against demand
Income-Tax 17,850,617 - 17,850,617
TDS 26,531,605 444,027 26,087,578
VAT 10,189,874 516,194 9,673,680

b) Bottlers Nepal (Terai) Limited

Figures in NPR
Particulars Additional Demand Accepted Amount Appeal against demand
Income-Tax 11,469,425 - 11,469,425
TDS 24,018,811 121,490 23,897,321
VAT 3,869,900 - 3,869,900

iii) LTO assessed the income tax, TDS and VAT liabilities of the following companies for the year 2068-69. For the unaccepted
amount, the company has filed the case for Administrative Review. Pending decision from the Director General, additional
liability have not been recognized in the financial statements and is disclosed as contingent liabilities as below.

a) Bottlers Nepal Limited

Figures in NPR
Particulars Additional Demand Accepted Amount Appeal against demand
Income-Tax 11,314,019 - 11,314,019
TDS 47,604,066 467,790 47,136,276
VAT 6,480,279 - 6,480,279

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b) Bottlers Nepal (Terai) Limited

BOTTLERS NEPAL LIMITED (GROUP)

Figures in NPR
Particulars Additional Demand Accepted Amount Appeal against demand
Income-Tax 30,782,794 238,286 30,544,508
TDS 39,993,762 100,687 39,893,075
VAT 830,566 830,566 -

iv) LTO assessed the income tax, TDS and VAT liabilities of the following companies for the year 2069-70. For the unaccepted
amount, the company has filed the case for Administrative Review. Pending decision from the Director General, additional
liability have not been recognized in the financial statements and is disclosed as contingent liabilities as below.

a) Bottlers Nepal Limited

Figures in NPR
Particulars Additional Demand Accepted Amount Appeal against demand
Income-Tax 1,391,157 273,157 1,118,000
TDS 15,223,651 680,651 14,543,000
VAT - - -

b) Bottlers Nepal (Terai) Limited

Figures in NPR
Particulars Additional Demand Accepted Amount Appeal against demand
Income-Tax 66,361,558 - 66,361,558
TDS 75,154,450 123,929 75,030,521
VAT 26,523 26,523 -

c ) Troika Traders Pvt. Limited

Figures in NPR
Particulars Additional Demand Accepted Amount Appeal against demand
Income-Tax 4,684,602 - 4,684,602
VAT 1,974,572 - 1,974,572

v) LTO assessed the income tax, TDS and VAT liabilities of the company for the year 2070-71. For the unaccepted amount, the
company has filed the case for Administrative Review Tribunal. Pending decision from the Director General, additional liability
has not been recognized in the financial statements and is disclosed as contingent liabilities as below.

a) Bottlers Nepal Limited

Figures in NPR
Particulars Additional Demand Accepted Amount Appeal against demand
Income-Tax 18,240,000 810,000 17,430,000
TDS -
VAT 1,156,000 265,000 891,000

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b) Bottlers Nepal (Terai) Limited

BOTTLERS NEPAL LIMITED (GROUP)

Figures in NPR
Particulars Additional Demand Accepted Amount Appeal against demand
Income-Tax 47,213,938 22,776,663 24,437,275
TDS 9,238,997 482,726 8,756,271
VAT 35,661,144 2,109,057 33,552,087

24.1.3 Commitment
A commitment is a contractual obligation to make a payment in the future, mainly in relation to leases and agreements to buy
assets. These amounts are not recorded in the statement of financial position since the Group has not yet received the goods or
services from the supplier. The amounts below are the minimum amounts that we are committed to pay.

At the end of financial year 2074-75, the Company had capital commitments of Rs. 193,416,061 (Previous FY 2073/74 Rs.
118,272,463) relating to various small projects.

25. INTERIM REPORTING

Interim reports have been publicly reported, for each public companies in the group, in accordance with the requirement of
SEBON and NEPSE. These requirements are materially aligned with the requirements of NAS 34.

26. SEGMENT REPORTING

The group has only one “business segment” i.e. dealing in “non-alcoholic ready to drink beverage (NARTD)”. The NARTD
beverage business mainly consists of products like carbonated soft drinks in different flavors, fruit pulp based beverages and
water. All these products have similar risks and returns because of similar nature of products, common consumer segments,
similar production processes and common distribution channel. Further, internal organizational and management structure and
its system of internal financial reporting of the group is not based on geographical differentiation.
CY 2074/75 Figures in NPR
Particulars BNL BNTL TTPL Total
Total Assets 2,772,349,669 4,249,163,646 143,933,467 7,165,446,783
Total Liabilities 1,253,479,092 2,262,130,223 100,200,630 3,615,809,946
Total Revenue 3,093,063,552 5,658,415,620 331,975,214 9,083,454,386
Profit after Tax 307,426,437 741,329,078 19,050,327 1,067,805,842

PY 2073/74 Figures in NPR

Particulars BNL BNTL TTPL Total
Total Assets 2,751,865,284 4,203,845,356 107,789,288 7,063,499,928
Total Liabilities 1,537,607,217 2,937,066,675 83,106,778 4,557,780,670
Total Revenue 2,742,896,751 4,574,001,380 379,884,674 7,696,782,805
Profit after Tax 244,203,730 482,622,709 3,495,445 730,321,884

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27. RELATED PARTY TRANSACTIONS

BOTTLERS NEPAL LIMITED (GROUP)

Relationship
The group identified related parties on the following lines

1. Part of the Group

a. Parent company, ultimate parent
b. Other Subsidiaries of the parent / ultimate parent
2. Directors and their relatives
3. Key management personnel and their relatives
4. Employee benefit plan
The obligations are carried in the financial statements which the group is considering to fund separately.

27.1 Transactions with Directors & Key Management Personnel

During the year neither any directors nor any key management personnel nor any associate or family member (relative) of the
directors and key management personnel was indebted to the Group.
There have no material transactions or proposed transactions with directors and key management personnel or their relatives
and associates except for the compensations and/or remuneration paid under the Group’s regulations.
Figures in NPR
Particulars Remuneration Allowances Facilities

Director's Fees & facilities - 270,000 -

Managing Director 17,629,410 24,845,750 2,890,000
Key Managers 51,450,571 43,247,049 19,471,852
Total 69,079,981 68,362,799 22,361,852

Additional Information

a) Key management personnel include 5 expatriate staffs including Managing Director.

b) Key management personnel are also provided with following benefits:
i) All Managers of the group are provided vehicle allowance as per each respective Companies Policy
ii) Furnished apartments are provided to all expatriate staffs.
iii) Performance bonus based on individual, overall Country and Division performance.

c) The amounts disclosed in the table are the amounts recognized as an expense during the reporting period related to key
management personnel. Also, the liabilities for defined benefit plans excluding expatriates staff  (i.e. gratuity and other
retirement benefits) and leave encashment are provided on an actuarial basis for the group as a whole, so the amounts
pertaining to the key management personnel are not included above.

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27.2 Other Related Party Transaction and Balances

BOTTLERS NEPAL LIMITED (GROUP)

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Purchases from related parties:
Purchase of concentrate from Atlantic Industries 1,856,482,681 1,477,253,220
Amounts owed to related parties:
Pacific Refreshments Pte. Ltd. 69,430,025
Amounts owed by related parties:
Atlantic Industries-other related party 26,887,241 830,888,655
Soft Drink International 31,425,973 31,425,973
Hindustan CCBPL 138,839,527 81,655,030

Terms and conditions of transactions with related parties

Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no
guarantees provided or received for any related party receivables or payables. This assessment is undertaken each financial year
through examining the financial position of the related party and the market in which the related party operates.

28. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The group’s principal financial liabilities comprise loans and borrowings and trade and other payables. The main purpose of
these financial liabilities is to finance the group’s operations. The group’s principal financial assets comprise trade and other
receivables, and cash and short-term deposits that arrive directly from its operations.
The Group is exposed to market risk, credit risk and liquidity risk.
The Group’s senior management oversees the management of these risks.
The Board of Directors reviews and agrees policies for managing each of these risks which are summarized below.

28.1 Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market
prices. Market prices comprise four types of risk: interest rate risk, currency risk, commodity price risk and other price risk, such
as equity price risk. Financial instruments affected by market risk include loans and borrowings and deposits.

28.1.1 Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s bank
overdraft and short term deposits.
The Group manages its interest rate risk by negotiating with highly reputed commercial banks.

28.1.2 Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s
operating activities (when revenue or expense is denominated in a different currency from the Group’s functional currency).
The Group manages its foreign currency risk by not holding the receivables and payables in foreign currencies for longer
duration.

28.1.3 Commodity price risk

The Group is affected by the volatility of certain commodities. Its operating activities require the ongoing purchase of raw
materials and therefore require a continuous supply of the same.
The Group manages this risk by purchasing materials and supplies from the supplier identified by the group and the Group has
long term relation with the supplier.

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28.2 Credit risk

BOTTLERS NEPAL LIMITED (GROUP)

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss. The Group is exposed to credit risk from its operating activities (primarily for trade receivables) and from its
financing activities, including deposits with banks and financial institutions.

28.2.1 Trade receivables

Customer credit risk is managed by the Group’s established policy, procedures and control relating to customer credit risk
management. Credit quality of the customer is assessed and individual credit limits are defined in accordance with this
assessment.
Outstanding customer receivables are regularly monitored and shipments to major customers are generally covered by bank
guarantees.

28.2.2 Cash deposits

Credit risk from balances with banks and financial institutions are managed by maintaining the balances with highly reputed
Commercial banks only.

28.3 Liquidity risk

The Group monitors its risk to a shortage of funds on a regular basis through cash forecast.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts
and bank loans. Access to sources of funding is sufficient.

For & on behalf of Board

Shukla Wassan Surendra Silwal Narmadeshwar Narayan Singh Gaurav Khosla

Chairperson Director Director Director

Sundeep Bajoria Dr. Trilochan Upreti Puneet Varshney Ashok Mandal

Director Independent Director Director Finance Controller

As per our attached report of even date

B.K. Agrawal, FCA

Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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FINANCIAL REPORT OF
BOTTLERS NEPAL LIMITED (STANDALONE)
2074-75 (2017-18)

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BOTTLERS NEPAL LIMITED (STANDALONE)

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BOTTLERS NEPAL LIMITED (STANDALONE)

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BOTTLERS NEPAL LIMITED (STANDALONE)

STATEMENT OF FINANCIAL POSITION
As at Ashadh 32nd, 2075 (July 16th, 2018)
Figures in NPR
As at 32nd Ashad As at 31st Ashad
Particulars Note
2075 2074
ASSETS
Non-current assets
Intangible Assets 3 60,365,796 72,378,032
Property, Plant and Equipment 4 1,331,143,786 1,169,569,642
Deferred Tax Assets 5.3 27,999,528 34,217,080
Financial Assets
Investments 6 112,627,648 112,627,648
BOTTLERS NEPAL LIMITED (STANDALONE)

Prepayments 8.1 29,763,430 30,552,094

Current Assets
Inventories 7 662,166,455 579,662,933
Non Financial Current Assets
Prepayments 8.1 5,185,440 9,515,699
Financial Assets
Advances 8.2 4,752,501 1,806,460
Other Current Assets 8.3 154,979,494 79,718,760
Trade Receivables 9 198,700,575 108,250,025
Cash and Cash Equivalents 10 184,665,018 553,566,913
Total Assets 2,772,349,671 2,751,865,286
EQUITY AND LIABILITIES
Equity
Equity Share Capital 11 194,888,700 194,888,700
Reserve and Surplus 12 1,323,981,879 1,019,369,369
Non-current liabilities
Retirement Benefit Obligation 13.2 363,357,470 353,449,094
Current liabilities
Financial Liabilities
Trade Payables 14.1 588,308,697 959,005,627
Other Financial Liabilities 15 301,812,925 225,152,496
Total Equity and Liabilities 2,772,349,671 2,751,865,286
Notes 1 to 29 form integral part of this Financial Statements.

For & on behalf of Board

Shukla Wassan Sundeep Bajoria Narmadeshwar Narayan Singh Gaurav Khosla

Chairperson Director Director Director

Surendra Silwal Puneet Varshney Dr. Trilochan Upreti Ashok Mandal

Director Director Independent Director Finance Controller

As per our attached report of even date

B.K. Agrawal, FCA

Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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BOTTLERS NEPAL LIMITED (STANDALONE)

STATEMENT OF PROFIT OR LOSS
For the year ended 32nd Ashad 2075 (July 16th, 2018)

Figures in NPR
For the Year For the Year
Particulars Note
2074-75 2073-74
Revenue from operations 16 3,093,063,552 2,742,896,751
Cost of sales 17 (2,048,521,957) (1,832,969,788)
Gross Profit 1,044,541,595 909,926,963

Other operating income 18 49,505,494 75,327,576

BOTTLERS NEPAL LIMITED (STANDALONE)

Selling and distribution expenses 19 (524,024,175) (476,901,805)
Administrative and operating expenses 20 (233,030,478) (218,112,806)
Profit from Operations 336,992,436 290,239,928

Finance Costs 21 (13,763,261) (4,317,855)

Finance Income 22 76,065,432 29,263,782
Profit Before Tax 399,294,607 315,185,856
Income Tax Expense

Current Tax 5.1 (86,059,545) (66,937,551)

Deferred Tax 5.2 (5,808,623) (4,044,575)
Net Profit for the year 307,426,439 244,203,730
Basic/Diluted Earnings per share 23 158 125

Notes 1 to 29 form integral part of this Financial Statements.

For & on behalf of Board

Shukla Wassan Sundeep Bajoria Narmadeshwar Narayan Singh Gaurav Khosla

Chairperson Director Director Director

Surendra Silwal Puneet Varshney Dr. Trilochan Upreti Ashok Mandal

Director Director Independent Director Finance Controller

As per our attached report of even date

B.K. Agrawal, FCA

Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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BOTTLERS NEPAL LIMITED (STANDALONE)

STATEMENT OF OTHER COMPREHENSIVE INCOME
For the year ended 32nd Ashad 2075 (July 16th, 2018)

Figures in NPR
For the Year For the Year
Particulars
2074-75 2073-74
Net Profit for the year as per Statement of Profit or Loss 307,426,439 244,203,730
Items that will not be reclassified to Statement of Profit or Loss
Actuarial Gain/(Loss) on defined benefit plan schemes (2,405,000) (52,518,000)
Deferred Tax on Actuarial Gain/(Loss) (408,929) 8,928,060
Other comprehensive gain/(loss) for the year, net of tax (2,813,929) (43,589,940)
BOTTLERS NEPAL LIMITED (STANDALONE)

Total Comprehensive gain/(loss) for the year, net of tax 304,612,510 200,613,790

For & on behalf of Board

Shukla Wassan Sundeep Bajoria Narmadeshwar Narayan Singh Gaurav Khosla

Chairperson Director Director Director

Surendra Silwal Puneet Varshney Dr. Trilochan Upreti Ashok Mandal

Director Director Independent Director Finance Controller

As per our attached report of even date

B.K. Agrawal, FCA

Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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BOTTLERS NEPAL LIMITED (STANDALONE)

STATEMENT OF CASH FLOWS
For the year ended 32nd Ashad 2075 (July 16th, 2018)
Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
(A) CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the year 399,294,607 315,185,856
Adjustments for non cash and non operating:
Depreciation on property, plant and equipment 188,125,450 160,673,230
Amortization of Intangible Assets 16,621,045 8,092,790
Loss/ (gain) on sale/write off of Property, plant and equipment 25,878,855 (1,524,899)
Finance income (76,065,432) (29,263,782)
Finance costs - 4,317,855

BOTTLERS NEPAL LIMITED (STANDALONE)

Working capital adjustments:
Increase / (Decrease) in trade payable and other liabilities (286,783,798) 388,886,558
Increase / (Decrease) in provisions 7,503,376 (709,506)
Decrease / (Increase) in trade and other receivables (90,450,550) (21,269,522)
Decrease / (Increase) in loans and advances (73,087,848) 42,154,235
Decrease / (Increase) in inventories (82,503,522) 28,951,232
Cash generated from operations 28,532,183 895,494,047
Direct taxes paid (net of refunds) (92,852,327) (74,121,988)
NET CASH FLOWS FROM OPERATING ACTIVITIES (A) (64,320,144) 821,372,059
(B) CASH FLOWS FROM / (USED IN) INVESTING ACTIVITIES
Acquisition of Property, plant and Equipment (361,815,193) (216,661,880)
Purchase of Intangibles (4,608,809) (74,821,362)
Proceeds from sale of Property, Plant and Equipment - 636,222
Interest Received 48,603,633 1,802,832
Dividends Received 27,461,800 27,460,950
NET CASH FLOWS FROM INVESTING ACTIVITIES (B) (290,358,570) (261,583,238)
(C) CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of Borrowings - (22,424,739)
Interest paid (14,223,181) (6,540,157)
Dividend paid - (516,872)
NET CASH FLOWS FROM FINANCING ACTIVITIES (C) (14,223,181) (29,481,768)
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C) (368,901,895) 530,307,053
CASH AND CASH EQUIVALENTS,
Beginning of Year 553,566,913 23,259,860
CASH AND CASH EQUIVALENTS, End of Period 184,665,018 553,566,913
For & on behalf of Board
Shukla Wassan Sundeep Bajoria Narmadeshwar Narayan Singh Gaurav Khosla
Chairperson Director Director Director

Surendra Silwal Puneet Varshney Dr. Trilochan Upreti Ashok Mandal

Director Director Independent Director Finance Controller

As per our attached report of even date

B.K. Agrawal, FCA

Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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BOTTLERS NEPAL LIMITED (STANDALONE)

STATEMENT OF CHANGES IN EQUITY
For the year ended 32nd Ashad 2075 (July 16th, 2018)

Figures in NPR
Securities
Particulars Share Capital Retained Earnings Total
Premium Reserve
Balance as at 1st Shrawan 2074 194,888,700 165,087,020 854,282,349 1,214,258,069
Restated Balance 194,888,700 165,087,020 854,282,349 1,214,258,069

Profit for the year - - 307,426,439 307,426,439

Other comprehensive income - - (2,813,929) (2,813,929)
Dividends - - - -
BOTTLERS NEPAL LIMITED (STANDALONE)

Balance as at 32nd Ashad 2075 194,888,700 165,087,020 1,158,894,859 1,518,870,579

For & on behalf of Board

Shukla Wassan Sundeep Bajoria Narmadeshwar Narayan Singh Gaurav Khosla

Chairperson Director Director Director

Surendra Silwal Puneet Varshney Dr. Trilochan Upreti Ashok Mandal

Director Director Independent Director Finance Controller

As per our attached report of even date

B.K. Agrawal, FCA

Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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1. CORPORATE INFORMATION
Bottlers Nepal Limited (“Company”) is a public limited Company listed on the Nepal Stock Exchange Ltd incorporated under the
Companies Act of Nepal. The registered office of the Company and the principal place of business is located at Balaju Industrial
District, Balaju, Kathmandu, Nepal.

Bottlers Nepal Ltd is a licensed bottler, marketer and distributor of non-alcoholic beverages products of The Coca-Cola Company,
Atlanta. The Board of Directors has approved the financial statements for issue on its meeting held on 21st August 2018 (05th
Bhadra 2075) and has recommended for approval of shareholders in the Annual General Meeting.

2. BASIS OF PREPARATION
The financial statements have been prepared in accordance with the Nepal Financial Reporting Standards (NFRS) issued by the
Accounting Standards Board Nepal. These confirm, in material respect, to International Financial Reporting Standards (IFRS)

BOTTLERS NEPAL LIMITED (STANDALONE)

issued by the International Accounting Standard Board (IASB). The financial statements have been prepared on a going concern
basis. The term NFRS, which includes all the standards and the related interpretations is consistently used.

This section describes the critical accounting judgement that the company has identified as having potentially material impact
on the company’s financial statements and sets out our significant accounting policies that relate to the financial statements as a
whole. Accounting policies along with explanatory notes, wherever such explanation is required, is described in specific relevant
sections. The company’s accounting policies require the management to exercise judgement in making accounting estimates.

2.1 Accounting Pronouncements

The company for its preparation of financial statement has adopted accounting policies to comply with the pronouncements
made by The Institute of Chartered Accountant of Nepal.

2.2 Accounting Convention

The financial statements are prepared on a historical cost basis except for certain financial and equity instruments that are
measured at fair value.

2.3 Presentations

The financial statements are prepared in Nepalese Rupees and rounded off to the nearest rupee. The figures for previous years
are rearranged and reclassified wherever necessary for the purpose of facilitating comparison. Appropriate disclosures are
made wherever necessary.

The Company presents assets and liabilities in statement of financial position based on current/non-current classification. The
Company classifies an asset as current when it is:
• Expected to be realized or intended to sold or consumed in normal operating cycle
• Held primarily for the purpose of trading,
• Expected to be realized within twelve months after the reporting period or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after
the reporting period.
All other assets are classified as non-current.
The Company classifies a liability as current when it is:
• Expected to be settled in normal operating cycle
• Held primarily for the purpose of trading
• Due to be settled within twelve months after the reporting period or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

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All other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets/liabilities. Net defined benefit obligation is also classified
as not current liabilities.
The company operating cycle has been defined as a twelve-month period.
The statement of profit or loss has been prepared using classification “by function’’ method.
The statement of cash flows has been prepared using indirect method. Cash flows from operating activities, in addition to the
adjustments from profit for non-cash and non-operating activities, movements in working capital, interest and taxes, separately
include cash flows relating to employee bonus and retirement benefits.

2.4 Accounting Policies

NFRS requires adoption of accounting policies that are most appropriate to the company’s circumstances determining and
applying accounting policies. Directors and management are required to make judgement in respect of items where the choice
of specific policy, accounting estimate or assumption to be followed could materially affect the company’s reported financial
BOTTLERS NEPAL LIMITED (STANDALONE)

position, results or cash flows.

Specific accounting policies have been included in the specific section of the notes for each items of financial statements which
requires disclosures of accounting policies or changes in accounting policies. Effect and nature of the changes have been
disclosed.

2.5 Accounting Estimates

The preparation of financial statements in line with NFRS which requires management to make judgments, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent assets
and liabilities at the date of financial statements.

The estimates and the underlying assumptions are reviewed on ongoing basis. Although these estimates are based on
management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result
in the outcomes requiring a material adjustment to the carrying amount of assets or liabilities in future periods. The estimates
are reviewed periodically by the management.

Specific accounting estimates have been included in the relevant section of the notes wherever the estimates have been applied
along with the nature and effect of changes of accounting estimates, if any.

2.6 Financial periods

The company prepares financial statements in accordance with the Nepalese financial year using Nepalese calendar. The
corresponding dates for Gregorian calendar are as follows:

Particulars Nepalese Calendar Date / Period Gregorian Calendar Date / Period

SFP* Date 32nd Ashad 2075 16th July 2018
Current Reporting Period 1st Shrawan 2074 – 32nd Ashad 2075 16th July 2017 – 16th July 2018
Comparative SFP* Date 31st Ashad 2074 15th July 2017
Comparative reporting period 1st Shrawan 2073 – 31st Ashad 2074 16th July 2016 – 15th July 2017

*Statement of Financial Position

2.7 Presentation currency

The company’s financial statement is presented in Nepalese Rupees which is also the company’s functional currency.

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2.8 Lease

A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks
and rewards incidental to ownership to the Company is classified as a finance lease.

When all the risks and rewards incidental to ownership are not transferred to the Company (an “operating lease”), the total
rentals payable under the lease are charged to the profit or loss statement over the lease term. The Company has leased 3 plots
of land ranging from 20-40 years from Balaju Industrial District (BID). These lease agreements are renewal with mutual consent
after the expiry of the initial lease term. There is no purchase option and no fixed escalation clause, however BID has right to
review the lease payment in each 5 years. Future minimum rentals payable under non-cancellable operating leases as at balance
sheet date are as follows:

Figures in NPR
Period As at 32nd Ashad 2075 As at 31st Ashad 2074

BOTTLERS NEPAL LIMITED (STANDALONE)

Less Than One Year 462,556 66,732
One Year to Five Years 2,834,943 296,956
More Than Five Years 4,077,702 4,046,357
Total 7,375,201 4,410,045

3. INTANGIBLE ASSETS
Figures in NPR
Particulars Computer Software Intangible assets Total
under development
Cost
Opening balance at 31st Ashad 2074 82,879,897 - 82,879,897
Additions 4,608,809 4,608,809 9,217,618
Disposals/Adjustments - (4,608,809) (4,608,809)
Closing balance at 32nd Ashad 2075 87,488,706 - 87,488,706
Accumulated Amortisation
Opening balance at 31st Ashad 2074 10,501,865 - 10,501,865
Charge for the year 16,621,045 - 16,621,045
Disposals/Adjustments - - -
Closing balance at 32nd Ashad 2075 27,122,910 - 27,122,910
Balance at 32nd Ashad 2075 60,365,796 - 60,365,796
Balance at 31st Ashad 2074 72,378,032 - 72,378,032

Intangible assets are recognized on the basis of costs incurred to acquire and bring to use the specific intangible assets such as,
software, where it is probable that such asset will generate future economic benefits in excess of its cost.
Computer software cost are amortized on the basis of expected useful life which is estimated as 5 years (the estimate is being
reviewed periodically). Costs associated with maintaining software are recognized as expenses as and when incurred. At each
statement of financial position date, these assets are assessed for indication of impairment. In the event that an asset’s carrying
amount being greater than its recoverable amount, the assets is considered to be impaired and is written down immediately.
The expenditure incurred in acquisition and installation of new software till the date of commissioning is recognized as intangible
under development. Software is capitalized upon successful test run and after meeting recognition criteria.

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4. PROPERTY PLANT AND EQUIPMENT

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Figures in NPR

Office Capital work-

Particulars Buildings Plant & Machinery Coolers Containers Other Assets Total
Equipment in-progress

Cost

Balance at 31st Ashad 2074 198,749,763 921,740,738 32,229,769 428,398,761 442,196,303 9,536,486 95,724,679 2,128,576,500
Annual Report 2074-75

Adjustment (ReClassification) - - - - - - - -
Bottlers Nepal Limited

Additions 22,000,000 133,887,609 7,435,813 68,436,728 175,737,046 - 361,815,194 769,312,389

Disposals/Adjustments - (11,000,584) (13,469,025) (4,239,178) (38,182,878) (407,497,196) (474,388,860)

Balance at 32nd Ashad 2075 220,749,763 1,044,627,763 26,196,557 492,596,311 579,750,471 9,536,486 50,042,677 2,423,500,029

Depreciation and
Impairment Losses

Balance at 31st Ashad 2074 44,558,431 457,859,020 21,016,922 182,570,548 243,723,290 9,278,652 - 959,006,863

Adjustment (ReClassification) - - - - - - - -

Charge for the year 6,077,741 54,887,155 4,474,753 54,732,372 67,850,126 103,303 - 188,125,450

Disposals/Adjustments - (3,741,345) (12,204,227) (647,620) (38,182,878) - (54,776,069)

Balance at 32nd Ashad 2075 50,636,172 509,004,830 13,287,448 236,655,300 273,390,538 9,381,955 - 1,092,356,243

Net Block

Balance at 32nd Ashad 2075 170,113,591 535,622,933 12,909,109 255,941,011 306,359,933 154,531 50,042,677 1,331,143,786

Balance at 31st Ashad 2074 154,191,333 463,881,723 11,212,847 245,828,213 198,473,014 257,834 95,724,679 1,169,569,642
 Bottlers Nepal Limited
Annual Report 2074-75

Property, plant and equipment are initially measured at cost in the statement of financial position. These are inclusive of all
cost less any subsequent accumulated depreciation and subsequent accumulated impairment losses, if applicable for each class
of assets. Property, plant and equipment are recognized as an asset, if and only if it is probable that future economic benefits
associated with the item will flow to the company and the cost of the item can be measured reliably.

Cost includes the purchase price and other directly attributable costs of property, plant and equipment. Cost also includes the
cost of replacing part of the plant and equipment and borrowing costs for long-term construction projects if the recognition
criteria are met. When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates
them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized in
the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and
maintenance costs are recognized in profit or loss as incurred. If an item of property, plant and equipment consists of several
components with different estimated useful lives, those components that are significant are depreciated over their individual
useful lives. Subsequent costs that do not qualify the recognition criteria under NFRS are expensed as and when incurred.

The present value of the expected cost for the decommissioning of an asset after its use is considered for determination of

BOTTLERS NEPAL LIMITED (STANDALONE)

cost of the respective asset if the recognition criteria under NAS 16 and IFRIC 1. Management determines that such cost is not
material thus are not considered.

Assets in the course of construction are carried at cost, less any recognized impairment loss, if any. Depreciation on these assets
will commence when these assets are ready for their intended use and classified under specific asset category.

The company has made a provision for missing/obsolesce assets of in the financial statement and the carrying gross value
and the relevant accumulated depreciation has been adjusted in specific block of assets wherever required. Post appropriate
approval, the individual item of assets is written off from FAR.

4.1 Depreciation

Depreciation on items of property plant and equipment is calculated on the straight-line method based on the useful life of the
assets estimated by the management. Depreciation on additions to property plant and equipment is provided on pro-rata basis
in the year of purchase when the asset is ready to use. The residual values, useful lives and the depreciation methods of assets
are reviewed at least at each financial year end and if expectations differ from previous estimates, are accounted for as a change
in accounting estimates in accordance with NAS 8. If an item of property plant and equipment consist of several components
with different useful lives, those components that are significant are depreciated over their individual useful life.

Particulars Clubbed under following class of assets Useful Life (Years)

Building Building 40
Plant and Machinery Plant and Machinery 20
Cooler Cooler 9
Office Equipment Office Equipment 5
Computer Accessories Office Equipment 4
Bottles Containers 5
Crates Containers 8
Plastic Pallets Other Assets 5
Furniture and Fixtures Other Assets 10
Motor Vehicles Other Assets 5
Other Assets* Other Assets 10

*Other assets majorly includes transformers, electrical installations and soft drink analyzer.

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4.1.1 Change in Accounting Estimate

Change in accounting estimate is an adjustment of the carrying amount of an asset or a liability, or the amount of the periodic
consumption of an asset, that results from the assessment of the present status of, and expected future benefits and obligations
associated with, assets and liabilities. Changes in accounting estimates result from new information or new developments and
accordingly, are not corrections of errors.

4.2 De-recognition

An item of property plant and equipment is de-recognized on disposal or when no future economic benefits are expected from
the use of that asset. The gain or loss arising from the disposal of an item of property, plant and equipment is the difference
between net disposal proceeds, if any, and the carrying amount of that item and is recognized in the statement of profit and loss.
BOTTLERS NEPAL LIMITED (STANDALONE)

4.3 Capital Work in Progress

The expenditure incurred in acquisition and installation of new systems and equipment till the date of commissioning or civil
works under construction till the date of completion is recognized as Capital works-in-progress. Equipment are capitalized upon
commissioning and civil works are capitalized upon handing over after being capable of being used.

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Buildings - 12,401,860
Machineries 4,513,079 9,422,146
Coolers 43,400,863 25,734,248
Containers - 45,882,125
Others 2,128,735 2,284,300
Total 50,042,677 95,724,679

5. INCOME TAXES
5.1 Current Income Tax

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Current tax on profits for the year 85,105,545 66,469,761
Adjustment for prior periods 954,000 467,790
Total 86,059,545 66,937,551

5.2 Deferred Income Taxes

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Origination and reversal of temporary differences 5,808,623 4,044,575
Effect of change in the tax rates - -
Total 5,808,623 4,044,575

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5.3 Deferred tax assets

Deferred tax is calculated on temporary differences using the effective tax rate of 17%. Deferred tax assets have been recognized
in respect of all tax losses and other temporary differences giving rise to deferred tax assets where the management believe it
is probable that these assets will be recovered.

FY : 74/75 Figures in NPR

Particulars Carrying Amount Tax Base Temporary Diff
1 Property, Plant & Equipment 1,281,101,109 1,071,297,166 (209,803,943)
2 Provisions for Expenses (365,456,027) - 365,456,027
3 Intangible Assets 60,365,796 69,416,815 9,051,019
Total Amount 164,703,103

BOTTLERS NEPAL LIMITED (STANDALONE)

Tax Rate 17% 27,999,528
Opening Deferred tax Assets/(Liability) 34,217,080
Deferred tax provision recognised (6,217,552)
Closing Deferred tax Assets/(Liability) 27,999,528
Charge/(Credit) to OCI 408,929
Charge/(Credit) to PL 5,808,623

FY : 73/74 Figures in NPR

Particulars Carrying Amount Tax Base Temporary Diff
1 Property, Plant & Equipment 1,073,844,962 902,876,437 (170,968,525)
2 Provisions for Expenses (371,698,521) - 371,698,521
3 Intangible Assets 72,378,032 72,924,978 546,946
Total Amount 201,276,942
Tax Rate 17% 34,217,080
Opening Deferred tax Assets/(Liability) 29,333,595
Deferred tax provision recognised 4,883,485
Closing Deferred tax Assets/(Liability) 34,217,080
Charge/(Credit) to OCI (8,928,060)
Charge/(Credit) to PL 4,044,575

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5.4 Reconciliation

Reconciliation of tax expense and the accounting profit multiplied by Company’s tax rate

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Accounting profit before income tax 399,294,607 315,185,856
Adjustment as per Income Tax Act 2058 101,326,252 75,812,738
Total profit as per Income Tax 500,620,859 390,998,595
Tax Rate 17% 17%
Tax Expenses 85,105,546 66,469,761
BOTTLERS NEPAL LIMITED (STANDALONE)

6. INVESTMENT IN SUBSIDIARIES

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Bottlers Nepal (Terai) Ltd., a subsidiary company 1,098,472 (previous 111,877,648 111,877,648
year 1,098,472) ordinary shares of Rs. 100 each fully paid up.
(including premium on 2,299 shares of Rs. 0.46 lakhs)
Troika Traders Pvt. Ltd., a wholly owned subsidiary company 7,500 750,000 750,000
(previous year 7,500) ordinary shares of Rs.100 each fully paid up.
112,627,648 112,627,648
The Company has made an equity investment in M/s Bottlers Nepal (Terai) Ltd. (BNTL) and Troika Traders Pvt. Ltd., a subsidiary
company and the Company has invested 90.78 percent of the equity in M/s Bottlers Nepal (Terai) Ltd. (BNTL) and majority
holding in Troika Traders Pvt. Ltd. respectively as promoter investor. Investment in subsidiaries are recognized at cost for the
purpose of separate financial statements prepared under NAS 27. The subsidiaries are consolidated as per NFRS 3 and NFRS 10,
as the company holds controlling interest in those companies.
The company holds controlling investment in the investees with regard to the representation on the board and the voting power
at the AGM of those companies and these companies are treated as subsidiaries.
This financial statement is prepared as a separate financial statement under NAS 27 and the investments in subsidiaries are
recognized at cost.
The financial statements have been consolidated under NFRS 3 and NFRS 10 under BNL(Group).

6.1 Investment in Subsidiaries

Investment in subsidiary are not tested for impairment as these are consolidated and assets of subsidiaries have been subject
to impairment testing at the entity level.

6.2 Risks
Investment in subsidiaries is a long term investment. The risks associated with beverage industry in Nepal and long term
investments returns are relevant for these investments.

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7. INVENTORIES

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Raw materials 455,576,319 367,387,040
Work-in-process 7,539,685 488,768
Finished goods 20,992,550 48,413,303
Consumables 178,057,901 163,373,822
Total 662,166,455 579,662,933

Inventories are carried at the lower of cost or net realizable value.

Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and

BOTTLERS NEPAL LIMITED (STANDALONE)

the necessary estimated expenses. The cost of obsolescence and other anticipated losses are also considered for determining
the net realizable values.
In determining the cost of raw materials & packing materials, First In First Out (FIFO) method is used. Cost of inventory comprises
of all costs of purchase, duties, taxes (other than those subsequently recoverable from tax authorities), cost of conversion and
other costs incurred in bringing the inventories to their present location and condition.
In determining the cost of consumables, stores and spares weighted average cost method is used.
Cost of finished goods includes the cost of raw materials, packing materials, direct labor and appropriate proportion of fixed and
variable production overheads incurred in bringing the inventory to their present location and condition.
Inventories are presented net of allowance for obsolescence and other possible depletion in value or other losses. Those
allowances are estimated to approximate the net realizable value of such items. Allowance adjustments are made for those
inventories identified by management as obsolete on the basis of 10 Year Aging or technical evaluation, whichever is earlier.
Inventories have been pledged as lien for the purpose of availing bank overdraft facilities.

8. OTHER ASSETS
8.1 Prepayments

These are expenses paid for the period beyond the financial period covered under the financial statement. These will be
charged off as expenses in the respective period for which such expenses pertain to.

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Prepayments 34,948,870 40,067,793
Total 34,948,870 40,067,793
Current 5,185,440 9,515,699
Non Current 29,763,430 30,552,094

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8.2 Advances

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Capital Advances 1,004,789 1,408,000
Advances to Employees 3,747,712 398,460
Total 4,752,501 1,806,460
These advances are non-interest bearing and are expected to be settled in the normal course of opeations.

8.3 Other Current Assets

Figures in NPR
BOTTLERS NEPAL LIMITED (STANDALONE)

Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074

Security Deposits 1,005,004 960,159
Advance to suppliers 85,560,310 25,470,989
Advances to Employees 6,534,180 7,066,017
Balances with statutory/government authorities 61,880,000 46,221,595
Total 154,979,494 79,718,760

Financial Instruments: Financial Assets

Financial asset is any asset that is:
(a) cash
(b) an equity instrument of another entity;
(c) a contractual right:
i) to receive cash or another financial asset from another entity; or
ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially favorable
to the entity; or
(d) a contract that will or may be settled in the entity’s own equity instruments and is:
(i) a non-derivative for which the entity is or may be obliged to receive a variable number of the entity’s own equity
instruments; or
(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset
for a fixed number of the entity’s own equity instruments.
Financial assets are classified under four categories as required by NAS 39, namely,
x Fair Value through Profit or Loss,
x Held to Maturity,
x Loans & Receivables and
x Available for Sale.
The company only holds financial assets meeting the recognition criteria of Loans & Receivables classification. These instruments
are to be recognized at amortized cost using effective interest rate.
Financial assets of the company comprise of advances, other current assets, Trade Receivables and cash & cash equivalents. These
instruments are mostly non-interest bearing and where interest component is present the implicit interest rate approximates
effective interest rate. These instruments are expected to be settled or recovered within a year. Therefore, it is assumed that the
carrying amount represents the amortized cost of the assets.

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Risks associated with Financial Instrument- Financial Assets

The company has a risk management framework to monitor, access, mitigate and manage risks. This risk management framework
is given in Note 29.

9. TRADE RECEIVABLES

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Trade receivables
Secured, considered good 35,357,432 44,983,600
Unsecured considered good - 5,751,447
Receivables from other related parties 162,399,717 56,670,458

BOTTLERS NEPAL LIMITED (STANDALONE)

Interest Income Receivables 943,426 844,520
Total 198,700,575 108,250,025

Bank overdrafts are secured against all receivables.

9.1 Trade Receivables

Trade receivables comprises of amount receivable from our customers and are non-interest bearing and are generally on terms
of 30 to 90 days.
Secured trade receivable are against Bank Guarantee provided by the customers.

9.2 Other Receivables

Other receivables are receivable from insurance companies against unsettled claims.

9.3 Related Parties Transaction

It includes transactions with group companies and key management personnel which are disclosed in Note 27.

9.4 Impairment

For allowances, assets with a potential need for a write-down are grouped together on the basis of similar credit risk
characteristics, tested collectively for impairment, and written-down, if necessary. Estimated irrecoverable amounts are based
on the ageing of the receivable balances, taking previous cases of default into consideration and historical experiences.

Risks associated with Financial Instrument- Financial Assets

The company has a risk management framework to monitor, access, mitigate and manage risks this risk management framework
is given is Note 29.

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10. CASH AND CASH EQUIVALENTS

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Balances with Banks
– On current accounts 34,604,793 39,581,417
– Deposits accounts 150,000,000 513,917,291
Cash on hand 60,226 68,205
Total 184,665,018 553,566,913
Balances with banks comprises of amount held by the banks
- 3,917,291
as margin money deposits against Letter of Credits
BOTTLERS NEPAL LIMITED (STANDALONE)

Balances with banks comprises of amount held by the banks

150,000,000 510,000,000
as Fixed Deposit

Cash at banks earns interest at floating rates based on daily balances.

Short-term deposits are made for varying periods of between one day and three months, depending on the cash requirements
of the Company and earn interest at the respective short-term deposit rates.
Deposit with banks as margin against Letter of Credits have tenure of three months on an average and are included in balances
with Bank and considered as cash and cash equivalents.
The above balances are also considered as the cash & cash equivalents for Statement of Cash Flow purposes.

11. SHARE CAPITAL

Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074

Number NPR Number NPR
Authorized
Ordinary shares of Rs. 100 each 4,300,000 430,000,000 4,300,000 430,000,000
Issued and Paid Up
Ordinary shares of Rs. 100 each 1,948,887 194,888,700 1,948,887 194,888,700
At the beginning of the year 1,948,887 194,888,700 1,948,887 194,888,700
At the end of the year 1,948,887 194,888,700 1,948,887 194,888,700

The shareholding pattern of the company is as follows

Shareholder Category As at 32nd Ashad 2075 As at 31st Ashad 2074

No. of Shares % of holding No. of Shares % of holding
Coca-Cola Southwest 1,484,301 76.16% 1,484,301 76.16%
Gorkha Brewery 428,755 22.00% 428,755 22.00%
Other Shareholders 35,831 1.84% 35,831 1.84%
Total 1,948,887 100.00% 1,948,887 100.00%

Share issue expenses have not been netted off against capital collected as these pertain to periods of initial establishment of the
company and such expenses have been charged off during those periods. The management considers that the cost of obtaining
information is more than the benefits derived and the effect of such amounts to be immaterial.

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12. RESERVE AND SURPLUS

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Share Premium 165,087,020 165,087,020
Retained earnings 1,158,894,859 854,282,349
(As per Statement of Changes in Equity)
Total 1,323,981,879 1,019,369,369

Share premium is used to record the premium on issue of equity shares. These can only be utilized in accordance with the
provision of the Companies Act.

BOTTLERS NEPAL LIMITED (STANDALONE)

i) Premium of Rs. 100 each on 264,995 ordinary shares;
ii) Premium of Rs.160 each on 866,172 ordinary shares issued as rights shares at the rate of 4 shares for 5 shares held.

13. EMPLOYEE BENEFITS

13.1 Current Employment Benefits

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Salaries, wages and other employee cost
Cost of sales 138,707,682 117,983,578
Selling and distribution expenses 112,443,363 96,458,214
Administrative and operating expenses 101,109,754 103,578,959
Defined Contribution Plan Expenses
Cost of sales 3,861,382 4,090,428
Selling and distribution expenses 1,884,697 2,057,731
Administrative and operating expenses 97,175 420,371
Defined Benefit Plan Cost
Cost of sales 23,053,000 30,853,500
Selling and distribution expenses 5,883,000 7,662,000
Administrative and operating expenses 4,494,000 5,324,000
Total Employee Cost for the Period 391,534,053 368,428,781

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13.2 Post-Employment Benefits

The company operates number of defined benefit and defined contribution plans for its employees of the company. The defined
benefit plan of the company includes leave encashment expenses, expenses pertaining to gratuity and other retirement benefits.
FY 2074-75 Figures in NPR
Particulars Gratuity Leave Others Total
Encashment
Opening Liability 205,038,000 9,178,538 139,232,556 353,449,094
Current Service cost (2,349,000) 1,903,000 9,125,473 8,679,473
Interest Charge 14,828,000 633,000 9,677,000 25,138,000
Paid (14,666,000) (1,477,538) (10,170,559) (26,314,097)
Acturial (gain)/loss during the year (recognised in (3,265,000) 369,000 5,301,000 2,405,000
BOTTLERS NEPAL LIMITED (STANDALONE)

OCI)
Closing Liability 199,586,000 10,606,000 153,165,470 363,357,470
Charge for the period to SoPL 12,479,000 2,536,000 18,802,473 33,817,473
Charge to SoCI (3,265,000) 369,000 5,301,000 2,405,000

FY 2073-74 Figures in NPR

Particulars Gratuity Leave Others Total
Encashment
Opening Liability 187,609,815 7,863,020 106,167,580 301,640,415
Current Service cost 11,942,000 1,265,000 8,635,500 21,842,500
Interest Charge 13,940,000 599,000 7,458,000 21,997,000
Paid (26,715,815) (742,482) (17,090,524) (44,548,821)
Acturial (gain)/loss during the year (recognised in 18,262,000 194,000 34,062,000 52,518,000
OCI)
Closing Liability 205,038,000 9,178,538 139,232,556 353,449,094
Charge for the period to SoPL 25,882,000 1,864,000 16,093,500 43,839,500
Charge to SoCI 18,262,000 194,000 34,062,000 52,518,000

13.3 Defined Benefit Plans

The defined benefit plan of the group includes Gratuity, Leave encashment Entitlements and Other Retirement benefits.

13.3.1 Gratuity

Gratuity for existing and retired employees have been provided as per the actuarial assessment. The assessed amounts have
been recognized as liabilities. The gratuity scheme is computed on below basis: -

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A. Gratuity Benefit till 3rd September 2017:

Plan Service Definition Number of years of service rounded to the nearest integer.
Salary Definition Last drawn Basic Salary
Vesting Schedule 3 years
Normal Retirement Age 58 years
Benefit on normal retirement/ early Nil for each year of service up to 3 years
retirement/death/ disability in
service 1/2 months’ salary of each year of service up to 7 years.
2/3 months’ salary for each year of service for service between 7 and 15 years.
1 month salary for each year of service for service between 15 and 17 years.
1 month 5 days’ salary for each year of service for the service over 17 years.
Benefit on withdrawal Nil for each year of service up to 3 years

BOTTLERS NEPAL LIMITED (STANDALONE)

1/2 months’ salary of each year of service up to 7 years.
2/3 months’ salary for each year of service for service between 7 and 15 years.
1 month salary for each year of service for service between 15 and 17 years.
1 month 5 days’ salary for each year of service for the service over 17 years.
Maximum Limit No Limit
Tax on Gratuity* 15%, borne by the company

*The tax under gratuity scheme is applicable to the accrued service post 31st March 2002 and is payable at a flat rate of 15% of
the benefit using gross up approach. Hence, any service prior to 31st March 2002 does not attract any tax.

B. Gratuity Benefit on or after 4th September 2017:

Plan Service Definition Number of years of service rounded to the nearest integer.
Salary Definition Last drawn Basic Salary
Vesting Schedule No vesting available
Normal Retirement Age 58 years
Benefit on normal retirement/ early 8.33 % of Basic Salary per month for each year of service
retirement/death/ disability in service

Benefit on withdrawal 8.33 % of Basic Salary per month for each year of service
Maximum Limit Accumulated Corpus

No actuarial valuation has been carried out for benefit accruing after 3rd September 2017, as it will be Defined Contribution
Scheme.

13.3.2 Leave Encashment

Leave encashment has been computed using actuarial assumptions. The assumptions made are the growth rate derived from
the past experience and discounting the long term obligations at the end of each reporting period. Sick leave of 1.5 times the
last drawn monthly basic salary is paid to employee. The maximum accumulation allowed is 30 days.

13.3.3 Other Retirement Benefits

Other retirement benefits include three days basic salary computed based on completion of 17 yrs. compulsory retirement
or 20 years of completion of service for withdrawal and gold coin at compulsory retirement. Other retirement benefits have
been computed using actuarial assumptions. The assumptions made are the growth rate derived from the past experience and
discounting the long term obligations at the end of each reporting period.

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13.3.4 Sensitivity Analysis

2074-75 Figures in NPR

Particulars Gratuity Retirement Sick Leave
Benefit
Effect on DBO due to 0.5% increase in discount rate (6,346,000) (7,072,000) (554,000)
Effect on DBO due to 0.5% decrease in discount rate 6,730,000 7,664,000 603,000

Effect on DBO due to 0.5% increase in salary escalation rate 6,094,000 7,095,000 561,000
Effect on DBO due to 0.5% decrease in salary escalation rate (5,811,000) (6,626,000) (521,000)
BOTTLERS NEPAL LIMITED (STANDALONE)

The above sensitivity analysis is based on a change in an assumption while holding all other assumption constant. In practice,
this unlikely to occur and changes in some of the assumption is correlated. When calculating sensitivity of the defined benefit
obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated
with projected unit credit method at the end of reporting period) has been applied as when calculating the defined benefit
liability recognized in the balance sheet.

13.3.5 Actuarial Assumptions

Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074

Financial Assumptions
Discount rate (%) 7.50% 7.50%
Salary escalation rate 10.00% 10.00%
Expected return on Plan Nil Nil
Assets
Future service Expected average remaining working life Expected average remaining working life
of the employees based on withdrawal rate of the employees based on withdrawal rate
and retirement age taken as 8 years and retirement age taken as 8 years
Demographic Assumptions
Mortality In accordance with the standard table, In accordance with the standard table,
Indian Assured Lives Mortality (2006-08) Indian Assured Lives Mortality (2006-08)
(modified) Ultimate Rates (modified) Ultimate Rates
Withdrawal rate 3.50% 3.50%

13.3.6 Defined Benefit Plan Assets

Defined benefit obligations are not funded and there are no Defined Benefit Plan Assets. The group is in the process of creating
a separate fund for meeting the defined benefit obligation.

13.4 Defined Contribution Plan

The defined contribution expenses include employer’s contribution to provident fund. These amounts have been deposited in
Employee Provident Fund, a 100% Government of Nepal undertaking.

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14. FINANCIAL INSTRUMENTS – FINANCIAL LIABILITIES

A financial liability is any liability that is:
a) contractual obligation:
(i) to deliver cash or another financial asset to another entity; or
(ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially
unfavorable to the entity; or
(b) a contract that will or may be settled in the entity’s own equity instruments and is:
(i) a non-derivative for which the entity is or may be obliged to deliver a variable number of the entity’s own equity
instruments; or
(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial
asset for a fixed number of the entity’s own equity instruments.
The company classifies financial liabilities as Fair Value through Profit or Loss and those held at amortized cost. All financial
liabilities held by the company are classified as financial liabilities held at amortized cost using effective interest rate.

BOTTLERS NEPAL LIMITED (STANDALONE)

Financial liabilities held by the company are both interest bearing and non-interest bearing.
The non-interest bearing instrument’s carrying value represents the amortized cost.
For interest bearing financial liabilities which comprises of the bank loans, interest charged by the bank approximates effective
interest rate and the rate is considered for calculation of amortized cost of liability and the finance cost. The effect of initial
charges and its impact on effective interest rate is considered not material and the carrying value is considered to approximate
the amortized cost.

14.1 Trade Payables

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Trade Payable 418,043,198 533,027,406
Trade Payable to related parties 170,265,499 425,978,222
Total 588,308,697 959,005,627

Risks associated with Financial Instrument- Financial Liabilities

The company has a risk management framework to monitor, access, mitigate and manage risk. The risk management framework
is given in Note 29.

15. OTHER FINANCIAL LIABILITIES

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Container deposit liability 189,863,523 169,311,624
Corporate Social Responsibility 8,155,303 3,723,620
Trade Deposits 2,214,557 2,633,589
Advance received from distributors 15,167,436 1,705,821
Statutory dues payable 61,647,694 27,013,315
Interest Payables 459,921 -
Income tax payable (Net) 1,497,157 8,289,940
VAT Payable (Net) 22,807,334 12,474,587
Total 301,812,925 225,152,496

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Provisions are recognized when the company has a present obligation, legal or constructive, as a result of a past event, it is
probable that a transfer of economic benefits will be required to settle the obligation and when reliable estimate can be made
of the amount of obligation. If these conditions are not met, no provision is recognized.
The amount of provision recognized is the management’s best estimate of expenditure required to settle the present obligation
at the reporting date.

Corporate Social Responsibility

CSR Provision is accounted as per Industrial Enterprises Act 2016 (2073 BS) (the “Act”) has been introduced with effect from
November 22, 2016 repealing the Industrial Enterprises Act 1992 (2049 BS) (the “Previous Act”).

Section 48 Industrial Enterprises Act 2016 (2073 BS) makes it mandatory to allocate 1% of the annual profit to be utilized
towards corporate social responsibility (the “CSR Requirement”).
BOTTLERS NEPAL LIMITED (STANDALONE)

The fund created for CSR is to be utilized on the basis of annual plans and programs but in the sectors that are prescribed under
the Act however, such sectors are yet to be specified by the Act. The progress report of the utilization of the fund collected
for CSR is required to be submitted to the relevant government authorities registered within three months from expiry of the
financial year.

Changes in provision

Management reviews provisions at each reporting date and is adjusted to reflect the best estimate. If it is no longer probable
that a transfer of economic benefits will be required to settle the obligation, the provision is reversed.

16. REVENUE
Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Sale of goods 3,528,048,205 3,067,941,309
Less: Discount (434,984,653) (325,044,558)
Total 3,093,063,552 2,742,896,751

16.1 Sale of Goods

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue
and associated costs incurred or to be incurred can be reliably measured and when recognition criteria related to sale of goods
activities i.e when the significant risks and rewards of ownership of the goods have transferred to the buyer, with the Company
retaining neither continuing managerial involvement to the degree usually associated with ownership, nor effective control over
the goods sold.

Revenue is measured at the fair value of the consideration received or receivable net of trade discounts. Revenue include all
revenue from ordinary activities of the company that are recorded net off Value Added Taxes and Excise Duty collected from
the customer that are remitted or are to be remitted to the government authorities.

The company generates revenue from sale of goods in the ordinary course of business.

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17. COST OF SALES

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Material consumed
Raw materials
At 1st Shrawan 367,387,040 416,673,165
Purchase 1,567,237,075 1,332,302,364
Less: Transfer to Bottlers Nepal (Terai) Ltd. (18,332,564) -
At 32nd Ashad (455,576,319) (367,387,040)
Raw material consumed total 1,460,715,233 1,381,588,490

BOTTLERS NEPAL LIMITED (STANDALONE)

Work in process
At 1st Shrawan 488,768 5,211,336
At 32nd Ashad (7,539,685) (488,768)
Net change in work-in-process (7,050,917) 4,722,568

Production and manufacturing overheads 567,436,888 451,793,538

Finished goods stock
At 1st Shrawan 48,413,303 43,278,495
At 32nd Ashad (20,992,550) (48,413,303)
Net change in finished goods stock 27,420,753 (5,134,808)
Cost of sales 2,048,521,957 1,832,969,788

17.1 Production and Manufacturing Overheads

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Salaries, wages and other employee cost 138,707,682 117,983,578
Sick Leave 1,529,000 1,124,000
Provident fund 3,861,382 4,090,428
Gratuity 7,774,000 17,720,000
Other retirement benefits 13,750,000 12,009,500
Travel and transport costs 4,360,377 1,685,926
Repair and maintainence 62,959,543 52,778,584
Consumables 42,707,834 39,731,105
Office expenses 24,173,351 19,978,355
Power & Fuel 77,471,784 67,182,431
Depreciation on property, plant and equipment 146,578,301 122,829,128
Amortization of Intangible Assets 8,940,759 4,353,257
Exchange Gain/Loss 34,622,875 (9,672,754)
Total 567,436,888 451,793,538

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18. OTHER OPERATING INCOME

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Product transfer fee 41,392,222 34,642,981
Sale of Scrap 5,309,126 4,019,114
Miscellaneous Income 2,804,146 36,665,481
Total 49,505,494 75,327,576

18.1 Product Transfer Fee

BOTTLERS NEPAL LIMITED (STANDALONE)

The Company and Bottlers Nepal (Terai) Ltd, its subsidiary Company, can sell their products in their respective market territories
only. In respect of sales made by the Company and its subsidiary, in market territory of the other Company, a product transfer
fee (gross) at the rate of 12% (Previous year 12%) of net liquid sales revenue is recovered/ paid. Product transfer service fee is
recognized/ charged to income statement as and when sale of goods is effected as per above clause.

18.2 Sale of Scrap

Items includes under this income are towards sale amount realized from sale of scraps.

18.3 Miscellaneous Income

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Insurance Claim - 34,032,230
Others 2,804,146 2,633,251
Total 2,804,146 36,665,481

Income includes amount claim from Insurance on account of Loss of profit and charges recovered from customer on account of
handling loss of Glass Bottles

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19. SELLING AND DISTRIBUTION EXPENSES

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Salaries, wages and other employee cost 112,443,363 96,458,214
Sick Leave 444,000 437,000
Provident fund 1,884,697 2,057,731
Gratuity 2,457,000 4,538,000
Other retirement benefits 2,982,000 2,687,000
Travel and transport costs 8,699,027 8,938,717
Office expenses 7,862,592 5,002,821
Repair and maintainence 17,529,913 20,156,471
Communication expenses 2,095,441 1,109,077

BOTTLERS NEPAL LIMITED (STANDALONE)

Utilities 10,302,634 1,614,824
Freight Charges 131,308,822 129,261,915
Liquid leakages and damages 49,753,260 34,818,678
Sales promotion expenses 86,303,572 78,550,678
Other miscellaneous expenses 355,746 1,909,759
Depreciation on property, plant and equipment 39,078,258 34,277,043
Amortization of Intangible Assets 3,840,143 1,869,766
Loss on sale/write off of Property plant equipment (net) - (80,072)
Product transfer fees 46,683,707 53,294,183
Total 524,024,175 476,901,805

20. ADMINISTRATIVE AND OPERATING EXPENSES

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Salaries, wages and other employee cost 101,109,754 103,578,959
Sick Leave 563,000 303,000
Provident fund 97,175 420,371
Gratuity 2,248,000 3,624,000
Other retirement benefits 1,683,000 1,397,000
Travel and transport costs 15,653,917 10,014,922
Office expenses 30,639,783 28,879,920
Repair and maintainence 4,136,937 1,681,783
Bank charges 2,840,535 1,782,286
Audit fees 500,000 500,000
Legal and other professional fees 9,567,345 8,427,773
Communication expenses 15,792,517 28,221,511
Utilities 11,209,107 7,461,299
Depreciation on property, plant and equipment 2,468,891 3,567,060
Amortization of Intangible Assets 3,840,143 1,869,766
Loss on sale/write off of Property plant equipment (net) 12,115,595 (556,150)
Corporate Social Responsibility 4,431,683 3,723,620
Public Affairs and Communication (PAC) expenses 6,564,833 2,889,188
Security Expenses 5,779,095 6,355,875
Board and AGM expenses 683,329 556,602
Other miscellaneous expenses 1,105,839 3,414,021
Total 233,030,478 218,112,806

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20.1 Salaries, wages and other employee cost

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Salary and other benefits 216,630,775 165,800,762
Less;- Salary cost charged to BNTL/Troika (115,521,021) (62,221,803)
Total 101,109,754 103,578,959

20.2 Audit Fees Disclosure

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
BOTTLERS NEPAL LIMITED (STANDALONE)

Statutory Audit Fee 500,000 500,000

Allowances 97,500 81,238
Total 597,500 581,238

21. FINANCE COST

Finance costs comprises of interest on Term Loan and interest on short term borrowings in the form of bank overdrafts. All these
cost are carried at amortized cost using effective interest rate as required by NAS 39.

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Interest on Overdraft 13,763,261 4,317,855
Total 13,763,261 4,317,855

22. FINANCE INCOME

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Interest income 48,603,632 1,802,832
Dividend income from subsidiaries 27,461,800 27,460,950
Total 76,065,432 29,263,782

22.1 Interest Income

Interest income has been recognized using effective interest method as required by NAS 39.

22.2 Dividend income

Dividend is recognized when the right to receive the payment is established. Dividend income comprises of dividend received
from investment made in the subsidiary companies inclusive of tax deducted at source.

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23. EARNINGS PER SHARE

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Numerator
Profit for the year and earnings used in basic EPS and 307,426,439 244,203,730
diluted EPS
Denominator
Weighted average number of shares used in basic EPS 1,948,887 1,948,887
Basic and Diluted Earning Per Share 158 125

Basic EPS is calculated by dividing the profit attributable to ordinary equity holders of the company for the period by the

BOTTLERS NEPAL LIMITED (STANDALONE)

weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares.
Numbers of shares have not changed over the reported periods. There are no potential ordinary shares that would dilute basic
earnings per share hence diluted EPS is same as basic EPS.

24. DIVIDEND PAID AND PROPOSED

Figures in NPR
Particulars As at 31st Ashad 2075 As at 31st Ashad 2074
Proposed for approval at the annual general meeting (not
recognised as a liability as at balance sheet date):
Dividends on ordinary shares:
2074-75: Rs 20 per Share 38,977,740 -

25. CONTINGENT LIABILITIES AND CAPITAL COMMITMENT

25.1 Contingent Liabilities

Contingent liabilities are potential future cash out flows, where the likelihood of payment is considered more than remote, but
is not considered probable or cannot be measured reliably.

25.1.1 Bank Guarantee

Bank Guarantee has been provided to the department of Customs for obtaining EXIM Code. As at the reporting date the
guarantee amount is NPR 300,000.

25.1.2 Corporate Tax Matters

i) LTO assessed the income tax, TDS and VAT liabilities of the company for the year 2066-67. For the unaccepted amount, the
company has filed the case for Administrative Review. Pending decision from the Director General, additional liabilities have not
been recognized in the financial statements and have been disclosed as contingent liabilities as below: -

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Figures in NPR
Particulars Additional Demand Accepted amount Appeal against demand
Income-Tax 6,106,075 - 6,106,075
TDS 3,672,212 173,901 3,498,311
VAT 26,737,720 8,540,112 18,197,608

ii) LTO assessed the income tax, TDS and VAT liabilities of the company for the year 2067-68. For the unaccepted amount, the
company has filed the case for Administrative Review. Pending decision from the Director General, additional liabilities have not
been recognized in the financial statements and have been disclosed as contingent liabilities as below

Figures in NPR
BOTTLERS NEPAL LIMITED (STANDALONE)

Particulars Additional Demand Accepted amount Appeal against demand

Income-Tax 17,850,617 - 17,850,617
TDS 26,531,605 444,027 26,087,578
VAT 10,189,874 516,194 9,673,680

iii) LTO assessed the income tax, TDS and VAT liabilities of the company for the year 2068-69. For the unaccepted amount, the
company has filed the case for Administrative Review. Pending decision from the Director General, additional liabilities have not
been recognized in the financial statements and is disclosed as contingent liabilities as below: -

Figures in NPR
Particulars Additional Demand Accepted amount Appeal against demand
Income-Tax 11,314,019 - 11,314,019
TDS 47,604,066 467,790 47,136,276
VAT 6,480,279 - 6,480,279

iv) LTO assessed the income tax, TDS and VAT liabilities of the company for the year 2069-70. For the unaccepted amount, the
company has filed the case for Administrative Review Tribunal. Pending decision from the Director General, additional liability
has not been recognized in the financial statements and is disclosed as contingent liabilities as below

Figures in NPR
Particulars Additional Demand Accepted amount Appeal against demand
Income-Tax 1,391,157 273,157 1,118,000
TDS 15,223,651 680,651 14,543,000
VAT - - -

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v. LTO assessed the income tax, TDS and VAT liabilities of the company for the year 2070-71. For the unaccepted amount, the
company has filed the case for Administrative Review Tribunal. Pending decision from the Director General, additional liability
has not been recognized in the financial statements and is disclosed as contingent liabilities as below

Figures in NPR
Particulars Additional Demand Accepted amount Appeal against demand
Income-Tax 18,240,000 810,000 17,430,000
TDS - - -
VAT 1,156,000 265,000 891,000

25.2 Commitment

BOTTLERS NEPAL LIMITED (STANDALONE)

A commitment is a contractual obligation to make a payment in the future, mainly in relation to leases and agreements to buy
assets. These amounts are not recorded in the statement of financial position since the company has not yet received the goods
or services from the supplier. The amounts below are the minimum amounts that we are committed to pay.

At end of financial year 2074/75, the Company had capital commitments of NPR 82,216,321.00 (Previous Year 2073/74 NPR
74,658,020.84) relating to various small projects.

26. INTERIM REPORTING

Interim reports have been publicly reported in accordance with the requirement of SEBON and NEPSE. These requirements are
materially aligned with the requirements of NAS 34.

27. SEGMENT REPORTING

The Company has only one “business segment” i.e. dealing in “non-alcoholic beverage”. The non-alcoholic beverage business
mainly consists of products like carbonated soft drinks in different flavors. All these products have similar risks and returns
because of similar nature of products, common consumer segments, similar production processes and common distribution
channel. Further, internal organizational and management structure and its system of internal financial reporting of the Company
is not based on product or geographical differentiation.

28. RELATED PARTY TRANSACTIONS

28.1 Relationship

The company identified related parties on the following lines

1. Part of the Group
a. Parent company, ultimate parent
b. Other Subsidiaries of the parent / ultimate parent
c. Subsidiaries of the company
2. Directors and their relatives
3. Key management personnel and their relatives
4. Employee benefit plan
The obligations are carried in the financial statements which the group is considering to fund separately.

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28.1.1 Transactions with Directors & Key Management Personnel

During the year neither any directors nor any key management personnel nor any associate or family member (relative) of the
directors and key management personnel was indebted to the company.
There have no material transactions or proposed transactions with directors and key management personnel or their relatives
and associates except for the compensations and/or remuneration paid under the company’s regulations.

Figures in NPR
Particulars Remuneration Allowances Facilities
Director's Fees & facilities - 135,000 -
Managing Director 17,629,410 24,845,750 2,890,000
Key Managers 40,729,053 41,721,346 19,241,852
Total 58,358,463 66,702,096 22,131,852
BOTTLERS NEPAL LIMITED (STANDALONE)

Additional Information
a) Key management personnel include 5 expatriate staffs including Managing Director.
b) Key management personnel are also provided with following benefits:
i) All Manager of the Company are provided vehicle allowance as per Company Policy.
ii) Furnished apartments are provided to all expatriate staffs.
iii) Performance bonus based on individual, overall Country and Division performance.
c) The amounts disclosed in the table are the amounts recognized as an expense during the reporting period related to key
management personnel. Also, the liabilities for defined benefit plans excluding expatriates staff (i.e. gratuity and other
retirement benefits) and leave encashment are provided on an actuarial basis for the company as a whole, so the amounts
pertaining to the key management personnel are not included above.

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28.2 Other Related Party Transaction and Balances

Figures in NPR
RELATED PARTY TRANSACTIONS For the Year 2074-75 For the Year 2073-74
Sale to related parties:
Sale of various materials to Bottlers Nepal (Teral) Limited 18,332,564 -
Purchases from related parties:
Purchase of various materials from Bottlers Nepal (Terai) Limited 45,468,268 4,483,360
Purchase of concentrate from Atlantic Industries 739,251,324 553,651,711
Product transfer fee:
Received from Bottlers Nepal (Terai) Ltd. 41,392,222 34,642,981
Paid to Bottlers Nepal (Terai) Ltd. 46,683,707 53,294,183

BOTTLERS NEPAL LIMITED (STANDALONE)

Management Fee received from Bottlers Nepal (Terai) 114,871,021 62,221,803
Limited
Management Fee received from Troika Traders Pvt Ltd. 1,200,000 -
Dividend received from Bottlers Nepal (Terai) Ltd. 27,461,800 27,460,950
Bad Debts Recongnised in respect of Receivables from Related Parties:
- Atlantic Industries-other related party - -
Amounts owed by related parties:
Bottlers Nepal (Terai) Limited-a subsidiary company - 45,206,994
Troika Traders Pvt. Ltd.-a subsidiary company 29,295,521 11,463,465
Pacific Refreshments Pte. Ltd. 107,295,955 -
Atlantic Industries-other related party 25,808,242 -
Amounts owed to related parties:
Bottlers Nepal (Terai) Limited-a subsidiary company 10,600,539 -
Atlantic Industries-other related party - 312,896,092
Soft Drink International-other related party 31,425,973 31,425,973
Hindustan CCBPL-other related party 138,839,527 81,655,030

Terms and conditions of transactions with related parties

Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no
guarantees provided or received for any related party receivables or payables. This assessment is undertaken each financial year
through examining the financial position of the related party and the market in which the related party operates.

29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s principal financial liabilities comprise loans and borrowings and trade and other payables. The main purpose of
these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets comprise trade and
other receivables, and cash and short-term deposits that arrive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk.
The Company’s senior management oversees the management of these risks.
The Board of Directors reviews and agrees policies for managing each of these risks which are summarized below.

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29.1 Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market
prices. Market prices comprise four types of risk: interest rate risk, currency risk, commodity price risk and other price risk, such
as equity price risk. Financial instruments affected by market risk include loans and borrowings and deposits.

29.1.1 Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s
bank overdraft and short term deposits.
The Company manages its interest rate risk by negotiating with highly reputed commercial banks.

29.1.2 Foreign currency risk

BOTTLERS NEPAL LIMITED (STANDALONE)

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the
Company’s operating activities (when revenue or expense is denominated in a different currency from the Company’s functional
currency).
The Company manages its foreign currency risk by not holding the receivables and payables in foreign currencies for longer
duration.

29.1.3 Commodity price risk

The Company is affected by the volatility of certain commodities. Its operating activities require the ongoing purchase of raw
materials and therefore require a continuous supply of the same.
The Company manages this risk by purchasing materials and supplies from the supplier identified by the group and the Company
has long term relation with the supplier.
29.2 Credit risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss. The Company is exposed to credit risk from its operating activities (primarily for trade receivables) and from
its financing activities, including deposits with banks and financial institutions.

29.2.1 Trade receivables

Customer credit risk is managed by the Company’s established policy, procedures and control relating to customer credit
risk management. Credit quality of the customer is assessed and individual credit limits are defined in accordance with this
assessment.
Outstanding customer receivables are regularly monitored and shipments to major customers are generally covered by bank
guarantees.

29.2.2 Cash deposits

Credit risk from balances with banks and financial institutions are managed by maintaining the balances with highly reputed
Commercial banks only.

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29.3 Liquidity risk

The Company monitors its risk to a shortage of funds on a regular basis through cash forecast.

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts
and bank loans. Access to sources of funding is sufficient.

For & on behalf of Board

Shukla Wassan Sundeep Bajoria Narmadeshwar Narayan Singh Gaurav Khosla

Chairperson Director Director Director

Surendra Silwal Puneet Varshney Dr. Trilochan Upreti Ashok Mandal

Director Director Independent Director Finance Controller

BOTTLERS NEPAL LIMITED (STANDALONE)

As per our attached report of even date

B.K. Agrawal, FCA

Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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BOTTLERS NEPAL LIMITED (STANDALONE)

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DIRECTOR’S REPORT AND

FINANCIAL REPORT OF
BOTTLERS NEPAL (TERAI) LIMITED
2074-75 (2017-18)

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DIRECTOR’S REPORT
Dear Shareholders,
WƌŽĨŝƚĞĨŽƌĞdĂdž;EWZDDͿ
ϵϭϭ
We are delighted to present the Report on your Company’s
business operations, along with the audited financial ϱϴϵ
statements, for the year ended 32nd Ashad 2075. This has been
another remarkable year with success in terms of business ϯϰϰ
Ϯϳϲ
growth and value creation for its treasured stakeholders. ϵϭ

ϮϬϳϬͲϳϭ ϮϬϳϭͲϳϮ ϮϬϳϮͲϳϯ ϮϬϳϯͲϳϰ ϮϬϳϰͲϳϱ

FINANCIAL HIGHLIGHTS
KEY BUSINESS CHALLENGES
Your Company has made conscious efforts for preparing the
Global:
financial statements based on the sound business knowledge
and generally accepted accounting principles. It has also The global economic scenario continued to remain volatile
ensured true that the financial statements of your Company across different geographies. The Group is presently operating
is true and fair. in an increasingly dynamic economic environment. Crude Oil
Price internationally is on increasing trend, which has impacted
cost of Resin, Preforms, energy and transportation.
OVERVIEW
Nepal
Your Company has made significant progress in the FY The Government has recently implemented Finance Bill, 2075.
2074/75. The Gross Sales Revenue of your Company has This has consequently increased government taxes & duties
crossed NPR 7,865 Million. Further, the net Profit has increased twice its current rate, mainly in Import Duty for sugar and has
by NPR 322 Million, which is 55% higher than the previous significantly increased excise duty of carbonated soft drinks.
years. Furthermore, the country witnessed high depreciation of the
currency against the US dollar, which has impacted sourcing
BOTTLERS NEPAL (TERAI) LIMITED

The summarized financial results of your Company for the of raw materials and packaging materials.
year under review are as under:
Dividend
NPR Million This Year, your Directors recommended a final dividend of
Particulars 2073-74 2074-75 % Change NPR 40/- Per share for your approval.
Gross Sales Revenue 6,370 7,865 23%
Gross Profit 1,462 2,042 40% Statutory Auditors.
Net Profit Before Tax 589 911 55% M/s B. K Agrawal & Co. Chartered Accountants (Firm
Net Profit After Tax 483 741 53% Registration No. 02), hold office until the conclusion of
32nd Annual General Meeting. Your Directors, with the
recommendation of Audit Committee Meeting have proposed
'ƌŽƐƐ^ĂůĞƐZĞǀĞŶƵĞ;EWZDDͿ to re-appoint M/s B.K Agrawal & Co. Chartered Accountants,
as Statutory Auditor for FY 2075-76 with a remuneration of
ϳ͕ϴϲϱ
NPR 300,000 (Three Hundred Thousands Only) (excluding
ϲ͕ϯϳϬ
ϰ͕ϳϱϵ
VAT and out-of-pocket expenses), alike last year.
ϰ͕ϭϯϰ
ϯ͕ϯϬϱ Human Resources
The total number of Associates on 32nd Ashad 2075 is 307,
as against 282 on 31st Ashad 2074. Your Company believes
ϮϬϳϬͲϳϭ ϮϬϳϭͲϳϮ ϮϬϳϮͲϳϯ ϮϬϳϯͲϳϰ ϮϬϳϰͲϳϱ
that today a major HR challenge for your Company is
training & development, talent development and Employee
Engagement. Your Company continued to work towards these
three components through its various initiatives. Some of its
initiatives are briefly elaborated in this Annual Report.

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Infrastructure Future Outlook

During the year under review, your Company continued to After the successful completion of Local, Federal and Provincial
create best-in-class infrastructure facilities to support its election in the country, your Company has geared itself to
growth strategies. Your Company continuously focuses on deliver strong business performance in the years to come.
upgrading its infrastructure. During the year under review,
your Company has invested in palletized trucks, which has The key focus for your Company, during the coming years,
improved its productivity and efficiency. Further details are will be on strengthening its Route to Market (RTM), expansion
elaborated in later part of the Annual Report. of new packs and categories, revenue growth management,
effective utilization of assets, productivity, effective cost
Corporate Governance
management and building strong capability to deliver medium
Your Company is committed towards the good corporate and long-term goals.
governance. Its strives to keep the trust of its stakeholders by
being ethical, honest and transparent, while doing business. Your Company will continue to invest in its people for their
Your Company has a strict Code of Business Conduct (COBC) continuous development as to optimize their performance
and Anti Bribery Policy, which guides its business and requirs and build relevant professional skills to drive the business.
honesty and integrity in all aspects. All of its employees, For its communities, your Company will endeavor to make a
directors and vendors are required to read and understand the real and lasting difference through right engagement towards
Code and follow its precepts in the workplace and in the larger environmental and societal concerns. Your Company will
community. Your Company regularly monitors its business consciously drive and maintain its high level of governance
to ensure compliance with the Code and the law. A Report on and strive towards providing better returns on its investment.
Corporate Governance is detailed, in later part of the Annual
Acknowledgement
Report, separately.
Your Directors gratefully acknowledge the continued support
Corporate Sustainability
being received from all investors, customers, vendors,
Your Company is committed to conduct its business in a banks and other service providers as well as regulatory and
socially responsible, ethical and environmental friendly government authorities in the initiatives of your Company.
manner, while continuously working towards creating social Your Directors specially thank employees of your Company for
value. The Corporate Sustainability activities of your Company their focused contributions in realizing the growth strategies

BOTTLERS NEPAL (TERAI) LIMITED

are implemented in accordance with the core priorities of your of your Company.
Company, whilst protecting stakeholder interest, proactively
engaging with the local community and striving towards Your Directors also places a special thank to the Government of
inclusive development. Nepal, particularly Department of Industry, Office of Company
Registrar, Securities Board of Nepal, Nepal Stock Exchange,
Your Company has intensified activities to bring about long Office of Company Registrar and Income Tax Department.
term sustainable solutions in your Company’s CSR agenda,
while pursing the growth of its business.
LEGAL REPORTING & DISCLOSURES
The details of some of the initiatives undertaken by your
AS PER SEC 109 OF COMPANIES ACT, 2006 (2063)
Company during the year, is contained in the Corporate
Sustainability report, on the later part of the Annual Report.
(a) Review of the transactions of the Previous Year:
Internal Control Framework As covered above under the “Financial Highlights”
Your Company has an efficient and robust system of internal sections.
controls, in place. These controls include internal checks
and audits, along with financial and other controls, which is (b) Impact, if any, caused on the transactions of
required to carry on the business smoothly and lawfully, whilst the Company from National & International
safeguarding your Company’s assets in a secure, practical, Situations;
accurate and reliable manner. As covered above under the “Key Business Challenges”
section.

(c) Achievements in the current year as at the date

of report & opinions of the Board of Directors on

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matters to be done in the future; (k) Major transactions completed by the Company
As covered above under “Financial Highlights” and and its holding company(ies) in the financial
“Future Outlook” section. year and any material changes taken place in the
transaction of the Company during that period:
(d) Industrial or Professional Relations of the Holding Transactions NPR
Company; Company
During the year, the relationship of the Company with its
Bottlers Nepal Sale of Raw Materials 45,468,268/-
employees was harmonious resulting in no strike. Limited
Bottlers Nepal Purchase of Raw 18,332,564/-
(e) Alterations in the Board of Directors and the
Limited Materials
reasons therefore;
During the year under review, the holding Company, Bottlers Nepal Receipt of Product 46,683,707/-
Bottlers Nepal Limited had withdrawn their earlier Limited transfer fee on
account of sales made
nomination of Mr. Sumanta Datta and in their place
in their respective
nominated Mr. Debabrata Mukherjee w.e.f 22nd August, territories
2017. Subsequently, Mr. Mukherjee’s nomination was
also withdrawn by M/s Bottlers Nepal Limited and in his Bottlers Nepal Payment of Product 41,392,222/-
Limited transfer fee on
place Mr. Sundeep Bajoria was appointed w.e.f 14th May,
account of sales made
2018. Bottlers Nepal Limited have nominated Mr. Amar in their respective
Baidya as Alternate Director to Mr. Surendra Silwal w.e.f territories
11th December, 2017.
(l) Disclosures made by the substantial shareholders
of the Company to the Company in the previous
(f) Major things affecting the transactions;
financial year;
As covered above under “Key Business Challenges”
None
(g) If there are any remarks in the Audit Report, the
(m) Details of shareholding taken by the directors and
comments of the Board of Directors on such
officers of the Company in the previous financial
BOTTLERS NEPAL (TERAI) LIMITED

remarks;
years and, in the event of their involvement in
None
share transaction of the Company, details of
information received by the Company from them
(h) Amount recommended for payment by way of
in that respect;
Dividend;
None
The Board of Directors has proposed NPR 40/- per share
as dividend to the shareholders of the Company for the
(n) Details of disclosures made about the personal
Fiscal Year 2074/75.
interest of any director and his / her close relative
in any agreement related with the Company
(i) In the event of forfeiture of shares, details
during the previous financial year;
regarding the number of forfeited shares, face
None.
value of such shares, total amount received
by the Company for such shares prior to the
(o) In the event that the Company has bought its
forfeiture thereof, proceeds of sale of such
own shares (buy-back), the reasons for such
shares after the forfeiture thereof, and refund of
buy-back, number & face value of such shares,
amount, if any, made for such forfeited shares;
and amount paid by the Company for such buy-
NIL
back;
None
(j) Progress of transactions of the Company and
of its subsidiary company(ies) in the previous
(p) Whether there is an internal control system in
financial year and, review of the situation existing
place or not and, details of such system, if it is in
at the end of that financial year;
place;
As covered above under various Sections.
As covered under the “Internal Control Framework”
Section.

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(q) Details of total management expenses during is NPR 2,980,185.5/-. All these unclaimed dividends are
the previous financial years; transferred to our Share Registrar, M/s Nabil Investment
Particulars(FY 2074/75) NPR Million Banking for distribution to Shareholders.
Salaries, wages and other employee
47 (v) Details of sale and purchase of properties
costs
pursuant to Section-141:
Administrative expenses 112 None
Total 159
(w) Details of transactions carried on between the
Associated Companies pursuant to Section-175;
(r) Name list of the members of Audit Committee, None
remuneration, Allowances and facilities received
by them, details of the functions performed by (x) Any other matters required to be laid out in the
that committee, and details of suggestions, if report of Board of directors under this Act and
any, made by that committee; the prevailing laws;
Please refer to Audit Committee details under Corporate As per page no. 31
Governance Section.
(y) Other necessary matters;
(s) Amount, if any, outstanding & payable to the i. Information (if any) regarding existence of any relative of
Company by any director, managing director, Companies director or official currently working in Office
chief executive, substantial shareholders or, of the Company’s Registrar (“OCR”), Securities Board or
his/her close relative or, by any firm, company, any other regulatory body concerning the Company in
corporate body in which he/she is involved; Officer or higher capacity.
None
We have not received any such information from any of
(t) Amount of remuneration, allowances & facilities the official or director of your Company.
paid to the directors, managing director, chief
executive & officer; ii. Information (if any) regarding any fines paid by any

BOTTLERS NEPAL (TERAI) LIMITED

Remuneration, allowances and facilities given to directors, officers or shareholders of the Company to OCR
Directors, Managing Director and Key Managers during in violation of Sec. 82 of the Act including information
the year: about the amount paid.
NPR Million
None
  Remuneration Allowances Facilities Total
Director's fee  - 0.14 - 0.14
Chief On behalf of the Board of Directors,
Executive
Officer - - - -
________________ ___________________
Key Managers 10.72 1.53 0.23 12.48 Shukla Wassan Pramod Kumar Karki
Total 10.72 1.67 0.23 12.62 Chairperson Director

Notes: All the facilities provided to the Managers are as Date:

per the policy of the Company.

(u) Amount of Dividends remaining unclaimed by

the shareholders;
Unclaimed dividend that has crossed the period of 5
years is transferred to Investor Protection Fund. During
the year under review, we had deposited amount of
NPR 5,13,943/- for FY 2068/69 at Investor Protection
Fund on 2075.01.16. The Total Unclaimed dividend as
on Ashad 32, 2075 (16 July, 2018) for the last 5 years

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PROFILE OF BOARD
OF DIRECTORS
BOTTLERS NEPAL (TERAI) LIMITED

Mr. Gaurav Khosla Mr. Prasad Gyawali Mr. Gunjan Dhawan

(Director) (Director) (Director)
Mr. Khosla is a Chartered Mr. Gyawali holds MBA and Mr. Gunjan Dhawan holds MFC
Accountant from the Institute Msc Degree and has more with a total experience of over
of Chartered Accountants of than 13 years of experience 20 years. He was appointed as
India with a total experience of handling various units in the the Director of the Company
over 24years. He has been the beverage (beer) and noodles/ from 23rd November, 2016.
Director of the Company since snacks operations in India and
25th April, 2016 and is also a Nepal. He is the Director of the
Chairman of Audit Committee Company since 12th January,
of the Company since 2nd May, 2015.
2016.

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BOTTLERS NEPAL (TERAI) LIMITED

Mr. Pramod Kumar Karki Ms. Shukla Wassan Mr. Sundeep Bajoria Mr. Surendra Silwal
(Independent Director) Chairperson (Director) (Director)

Mr. Karki holds multiple Ms. Wassan is FCS (Fellow Mr. Sundeep Bajoria holds Mr. Silwal holds a Master Degree
academic degrees including Company Secretary) from B.Com Honors & Chartered in Business Administration with
M.A and LLM. He has 35 the Institute of Company Accountant with experience a total experience of over 22
years of working experience Secretaries of India, LL.B., over 20 years. He was appointed years in various Companies. He
in various governmental jobs.. B. Com (Hons) with a total as a Director of the Company was appointed as a Director of
He is Director of the Company experience of over 35 years. since 3rd May,2018. the Company from 27th June,
2017. Earlier, he was a Alternate
since 13th December, 2012 She has been a Director and
Director to Mr. Soren Lauridsen
Chairperson of the Company
since 14th September, 2012.
since 2nd December, 2014.

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CORPORATE GOVERNANCE
We believe that sound corporate governance practices are during the FY 74/75 are as follows
essential to create sustainable value and to safeguard the Meeting
Board Members Designation
interest of the stakeholders. The commitment to best practices Attended
in Corporate Governance plays a key role in managing the Ms. Shukla Wassan Chairperson 6(out of 6)
risks and opportunities and maintaining the trust of the
Mr. Debabrata
stakeholders. Over the years, your company has strengthened Director 3 (out of 4)
Mukherjee*
the governance structure, practices and processes to meet
the evolving governance need propelled by the rapid changes Mr. Sundeep Bajoria Director 2(out of 2)
in the business environment. Mr. Gaurav Khosla Director 5(out of 6)
Mr. Surendra Silwal Director 5(out of 6)
In compliance with Good Governance Directives, 2074, your
Mr. Gunjan Dhawan Director 5(out of 6)
Company has appointed Ms. Pratima Burma, who is also the
Company Secretary as Compliance Officer of the Company. Mr. Prasad Gyawali Director 6(out of 6)
Mr. Pramod Kumar Independent
5 (out of 6)
Karki Director
*Debabrata Mukherjee’s nomination was withdrawn on 14th
BOARD OF THE COMPANY May, 2018 and in his place Mr. Sundeep Bajoria was nominated
The Board of the Company has ultimate responsibility as Director on 14th May, 2018.
for direction, performance and long-term success of your
business as a whole. The Board of Directors comprises AUDIT COMMITTEE
such number of directors as the Board deems appropriate
The Board has formed an Audit Committee with defined
to function efficiently as a body, subject to the Company’s
terms of reference. The duties and responsibilities of Audit
Article of Association. The Board is made up of a substantial Committee are in congruence with the framework defined
independent, non-executive directors and executive director by the Companies Act 2063 (2006) and Good Governance
BOTTLERS NEPAL (TERAI) LIMITED

and the Board considers this is to be the appropriate structure. Directives for Listed Companies, 2074. The Audit Committee
is constituted with Non-Executive Directors and hence, all
During the year, the Board continued with its strength of the Members of the Committee, including the Chairman, are
7 (seven) Members comprising of 6 (six) Non-executive Non-Executive which ensures complete independence. The
Directors, who essentially have a supervisory role and, 1 (one) composition of the Audit Committee as at the end of the fiscal
year 2074-75 was as below:
Independent Director. A list of your current Directors and their
date of appointments is set out on page 12-13.
Mr. Gaurav Khosla –Chairman
Mr. Sundeep Bajoria- Member
BOARD’S INDEPENDENCE Mr. Surendra Silwal –Member
Non-Executive Directors (NEDs) 6 Mr. Pramod Kumar Karki- Member (Independent Director)
Mr. Prasad Gyawali- (Director Representing Public
Independent (Non-executive) 1
Shareholder)
Managing Director (Executive Director) 0
Total 7 In compliance with Good Governance Directives for Listed
Companies, 2074, your Company has appointed a Director
BOARD MEETINGS representing Public Shareholder and an Independent Director
as Audit Committee Member on 5th July, 2018
During the year under review, a total of six (6) meetings of
the Members of the Board were convened. The notice, agenda Below are the term of reference of Audit Committee Meeting
and other relevant documents were circulated to the Members
well ahead of the meetings to ensure adequate and active x To review the accounts and financial statements of the
discussion on the agenda(s) before arriving at decisions. The company and ascertain the truth of the facts mentioned
attendance of the Directors in the Board meetings convened in such statements;

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x To review the internal financial control system and the risk x

management system of the company; During the Fiscal year 2074-75, the Members of the Audit
x To supervise and review the internal auditing activity or Committee met three times i.e., on 22nd August, 2017, 6th
the company; November, 2017 and on 20th February, 2018 for reviewing
x To recommend the names of potential auditors for the the financial statement of the Company including Internal
appointment of the auditor of the company, fix the Financial Control and Risk Management and other financial
remuneration and terms and conditions of appointment of issues. The following table indicates the attendance of Audit
the auditor and present the same in the general meeting Committee meeting held during the FY 2074-75:
for the ratification thereof; Names Designation Meetings
x To review and supervise as to whether the auditor of Attended
the company has observed such conduct, standards and Mr. Gaurav Khosla Chairperson 3 (out of 3)
directives determined by the competent body pursuant
Mr Debabrata Member 2 (out of 3)
to the prevailing law as required to be observed in the
course of doing auditing work; Mukherjee
x Based on the conduct, standard and directives determined Mr. Surendra Silwal Member 2 (out of 3)
by the competent body pursuant to the prevailing law,
to formulate the polices required to be observed by the *Mr. Debabrata Mukherjee’s nomination was withdrawn and
company in respect of the appointment and selection of in his place, Mr Sundeep Bajoria was appointed as Member of
Audit Committee w.e.f 5th July, 2018.
the auditor;
x To prepare the accounts related policy of the company None of the Members received any remuneration/sitting fees
and enforce, or cause to be enforced, the same; for serving on the Audit Committee Meeting in FY 2074/75.
x Where any regulator body has provided for the long
term audit report to be set out in the audit report of the
company, to comply with the terms required to prepare
such report; INTERNAL CONTROLS
x To perform such other terms as prescribed by the
Board of Directors in respect of the accounts, financial The Audit Committee of your company has been instrumental
in ensuring that the Company has all adequate systems of
management and audit of the company.

BOTTLERS NEPAL (TERAI) LIMITED

financial control in place. The Audit Committee periodically
x To ensure that the accounts book, audit report, balance
conducts review of the effectiveness of Risk Management
sheet or financial statement of accounts are maintained and Internal Control Systems and oversees the design of the
according to prevailing laws and as per the directive Internal Control Systems along with the effectiveness of the
issued by the governing authority or as per the rules and Internal Audit Function throughout the year.
regulation of the institution or not,
x To review the financial details of the Company and The Audit Committee of your Company reviews the Internal
thereafter , to ensure that the evidences mentioned in the Audit reports containing details of the audit coverage,
details are true and fact, compliance to the laws, regulations, established policies and
x To ensure that the work of internal auditing is effective procedures.
and is executed and accomplished in an independent way.
The Group has adopted a “Chart of Authority (COA)” defining
x To monitor and ensure that the accounts, budget, internal financial and other authorisation limits and setting-up
control systems are properly and regularly maintained. procedures for approving capital and investment expenditures.
x To ensure that the accounts book, documents of internal The Group has a strong internal control framework which
audit record system or electrical record auditing are kept is supported by risk & control matrix, Standard Operating
in proper way, Procedures, Policies, Guidelines, Governance Capsules and
x To provide opinion on the subject instructed by Board of Self-Assessment exercised. These internal control frameworks
Directors are routinely tested by Statutory Auditors, Internal Auditors,
x To ensure that the Company has followed the direction Lawyers as well as Internal Assurance Team. Significant audit
observations and follow up actions thereon are reported to
given by the governing authority or not.
the Management and Board of Directors.
x To inspect, monitor and ensure the purchasing system of
the Company are appropriate and economical.
x To perform such other additional duties and responsibilities
that may be ancillary to the aforementioned duties.

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CODE OF BUSINESS CONDUCT

Your company conducts its business with integrity and high mechanism to investigate and take appropriate action ensures
standards of ethical behaviour, and in compliance with the that values of Code of Business Conduct are put into practice.
laws and regulations that governs its business. Your Company Your Company has Anti-Bribery Training Program designed
has well established Code of Business Conduct that expects all and trainings are imparted to the associates in compliance
employees to act transparently and with integrity. Mandatory with the principles laid down under Prevention of Corruption
training, availability of Ethics Line to report issues and robust Act, 1988, The Foreign Corrupt Practices Act(FCPA), 1977 and
UK Bribery Act, 2010.
BOTTLERS NEPAL (TERAI) LIMITED

Shareholders Participating in 31st Annual General Meeting of the Company.

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BOTTLERS NEPAL (TERAI) LIMITED

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BOTTLERS NEPAL (TERAI) LIMITED

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BOTTLERS NEPAL (TERAI) LIMITED

STATEMENT OF FINANCIAL POSITION
As at Ashad 32nd, 2075 (July 16th, 2018)
Figures in NPR
As at 32nd Ashad As at 31st Ashad
Particulars Note
2075 2074
ASSETS
Non-current assets
Intangible Assets 3 57,905,155 72,275,237
Property, Plant and Equipment 4 2,887,897,469 2,776,232,218
Current Assets
Inventories 6 884,929,294 858,816,554
Non Financial Current Assets
Prepayments 7.1 21,505,927 19,327,718
Financial Assets
Loan and Advances 7.2 961,992 10,629,584
Other Current Assets 7.3 211,869,237 87,619,952
Trade Receivables 8 159,498,307 69,389,872
Cash and Cash Equivalents 9 24,596,265 309,554,222
Total Assets 4,249,163,646 4,203,845,357
EQUITY AND LIABILITIES
Equity
Equity Share Capital 10 121,000,000 121,000,000
Reserve and Surplus 11 1,866,033,423 1,145,778,679
Non-Current Liabilities
Retirement Benefit Obligation 12.1 327,710,533 306,985,197
Deferred Tax Liablity 5.3 44,779,704 41,385,048
Financial Liabilities
Borrowings 13.1 - -

BOTTLERS NEPAL (TERAI) LIMITED

Current Liabilities
Financial Liabilities
Borrowings 13.2 496,608,770 810,574,979
Trade Payables 13.3 796,998,943 1,275,819,518
Other Financial Liabilities 14 596,032,273 502,301,935
Total Equity and Liabilities 4,249,163,646 4,203,845,357

Notes 1 to 28 form integral part of this Financial Statements.

For & on behalf of Board

Shukla Wassan Sundeep Bajoria Prasad Gyawali Gunjan Dhawan

Chairperson Director Director Director

Gaurav Khosla Surendra Silwal Pramod Kumar Karki Puneet Varshney

Director Director Independent Director Chief Executive Officer
As per our attached report of even date

Ashok Mandal
Finance Controller B.K. Agrawal, FCA
Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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BOTTLERS NEPAL (TERAI) LIMITED

STATEMENT OF PROFIT OR LOSS
For the year ended Ashad 32nd, 2075 (July 16th, 2018)
Figures in NPR
For the Year For the Year
Particulars Note
2074-75 2073-74
Revenue from Operations 15 5,658,415,620 4,574,001,380
Cost of Sales 16 (3,616,404,497) (3,112,055,251)
Gross Profit 2,042,011,123 1,461,946,129
Other Operating Income 17 59,798,834 65,135,751
Selling and Distribution Expenses 18 (1,001,184,057) (722,892,893)
Administrative and Operating Expenses 19 (158,917,255) (154,290,384)
Profit from Operations 941,708,646 649,898,603
Finance Costs 20 (40,174,267) (62,074,247)
Finance Income 21 9,808,237 1,482,023
Profit Before Tax 911,342,615 589,306,379
Income Tax Expense
Current Tax 5.1 (167,884,545) (88,351,068)
Deferred Tax 5.2 (2,128,991) (18,332,602)
Net Profit for the year 741,329,079 482,622,709

Basic/Diluted Earnings per share 22 613 399

BOTTLERS NEPAL (TERAI) LIMITED

Notes 1 to 28 form integral part of this Financial Statements.

For & on behalf of Board

Shukla Wassan Sundeep Bajoria Prasad Gyawali Gunjan Dhawan

Chairperson Director Director Director

Gaurav Khosla Surendra Silwal Pramod Kumar Karki Puneet Varshney

Director Director Independent Director Chief Executive Officer
As per our attached report of even date

Ashok Mandal
Finance Controller B.K. Agrawal, FCA
Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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BOTTLERS NEPAL (TERAI) LIMITED

STATEMENT OF OTHER COMPREHENSIVE INCOME
For the year ended Ashad 32nd, 2075 (July 16th, 2018)
Figures in NPR
For the year For the year
Particulars
2074-75 2073-74
Net Profit for the year as per Statement of Profit or Loss 741,329,079 482,622,709
Items that will not be reclassified to Statement of Profit
or Loss
Actuarial Gain/(Loss) on defined benefit plan schemes 7,910,000 (55,181,000)

Deferred Tax on Actuarial Gain 1,265,665 9,380,770

Other comprehensive gain/(loss) for the year, net of tax 9,175,665 (45,800,230)

Total Comprehensive gain/(loss) for the year, net of tax 750,504,744 436,822,479

For & on behalf of Board

Shukla Wassan Sundeep Bajoria Prasad Gyawali Gunjan Dhawan

Chairperson Director Director Director

Gaurav Khosla Surendra Silwal Pramod Kumar Karki Puneet Varshney

Director Director Independent Director Chief Executive Officer

BOTTLERS NEPAL (TERAI) LIMITED

As per our attached report of even date

Ashok Mandal
Finance Controller B.K. Agrawal, FCA
Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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BOTTLERS NEPAL (TERAI) LIMITED

STATEMENT OF CASH FLOWS
For the year ended Ashad 32nd, 2075 (July 16th, 2018)
Figures in NPR
Particulars For the year 2074-75 For the year 2073-74
(A) CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the year 911,342,615 589,306,379
Depreciation on property, plant and equipment 284,917,786 269,024,887
Amortization of Intangible Assets 18,081,676 7,816,357
Loss/ (gain) on sale/write off of Property, plant and 8,423,389 802,246
Equipment
Finance income (9,808,237) (1,482,023)
Finance costs 40,174,267 62,074,247
Gain on sales proceeds from Property, plant and Equipment - (5,393,622)
Working capital adjustments:
Increase / (Decrease) in trade payable and other liabilities (370,360,008) 500,610,083
Increase / (Decrease) in provisions 28,635,221 15,438,163
Decrease / (Increase) in trade and other receivables (215,111,830) 77,370,111
Decrease / (Increase) in loans and advances 7,489,383 (2,638,407)
Decrease / (Increase) in inventories (26,112,740) (3,562,185)
Cash generated from operations 677,671,523 1,509,366,235
Direct taxes paid (net of refunds) (180,022,990) (71,117,934)
NET CASH FLOWS FROM OPERATING ACTIVITIES (A) 497,648,533 1,438,248,301
(B) CASH FLOWS FROM / (USED IN) INVESTING ACTIVITIES
Acquisition of Property, plant and Equipment (405,006,438) (434,996,530)
Purchase of Intangibles (3,711,593) (78,265,449)
BOTTLERS NEPAL (TERAI) LIMITED

Proceeds from sale of Property, Plant and Equipment - 5,393,622

Interest Received 10,562,347 727,913
NET CASH FLOWS FROM INVESTING ACTIVITIES (B) (398,155,686) (507,140,445)
(C) CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of Borrowings (313,966,208) (544,168,157)
Interest paid (40,234,596) (63,893,487)
Dividend paid (30,250,000) (34,320,855)
NET CASH FLOWS FROM FINANCING ACTIVITIES (C) (384,450,805) (642,382,500)
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (284,957,957) 288,725,355
(A+B+C)
CASH AND CASH EQUIVALENTS,
Beginning of Year 309,554,222 20,828,867
CASH AND CASH EQUIVALENTS, End of Period 24,596,265 309,554,222
For & on behalf of Board
Shukla Wassan Sundeep Bajoria Prasad Gyawali Gunjan Dhawan
Chairperson Director Director Director
Gaurav Khosla Surendra Silwal Pramod Kumar Karki Puneet Varshney
Director Director Independent Director Chief Executive Officer
As per our attached report of even date
Ashok Mandal
Finance Controller B.K. Agrawal, FCA
Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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BOTTLERS NEPAL (TERAI) LIMITED

STATEMENT OF CHANGES IN EQUITY
For the year ended Ashad 32nd, 2075 (July 16th, 2018)

Figures in NPR
Securities
Particulars Share Capital Retained Earnings Total
Premium Reserve
Balance as at 31st Ashad 2074 121,000,000 952,000 1,144,826,679 1,266,778,679
Restated Balance 121,000,000 952,000 1,144,826,679 1,266,778,679

Profit for the year 741,329,079 741,329,079

Other comprehensive income 9,175,665 9,175,665
Dividends - - (30,250,000) (30,250,000)

Balance as at 32nd Ashad 2075 121,000,000 952,000 1,865,081,423 1,987,033,423

For & on behalf of Board

Shukla Wassan Sundeep Bajoria Prasad Gyawali Gunjan Dhawan

Chairperson Director Director Director

Gaurav Khosla Surendra Silwal Pramod Kumar Karki Puneet Varshney

Director Director Independent Director Chief Executive Officer
As per our attached report of even date

BOTTLERS NEPAL (TERAI) LIMITED

Ashok Mandal
Finance Controller B.K. Agrawal, FCA
Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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1. CORPORATE INFORMATION
Bottlers Nepal (Terai) Limited (“Company”) is a public limited Company listed on the Nepal Stock Exchange Ltd incorporated
under the Companies Act of Nepal. The registered office of the Company is located at Balaju Industrial District, Balaju,
Kathmandu, Nepal and regional office is located at Bharatpur, Chitwan, Nepal.
Bottlers Nepal (Terai) Limited is a licensed bottler, marketer and distributor of non-alcoholic beverages products of The Coca-
Cola Company, Atlanta. The Board of Directors has approved the financial statements for issue on its meeting held on 21st
August 2018 (05th Bhadra 2075) and has recommended for approval of shareholders in the Annual General Meeting.

2. BASIS OF PREPARATION
The financial statements have been prepared in accordance with the Nepal Financial Reporting Standards (NFRS) issued by the
Accounting Standards Board Nepal. These confirm, in material respect, to International Financial Reporting Standards (IFRS)
issued by the International Accounting Standard Board (IASB). The financial statements have been prepared on a going concern
basis. The term NFRS, which includes all the standards and the related interpretations is consistently used.
This section describes the critical accounting judgement that the company has identified as having potentially material impact
on the company’s financial statements and sets out our significant accounting policies that relate to the financial statements as a
whole. Accounting policies along with explanatory notes, wherever such explanation is required, is described in specific relevant
sections. The company’s accounting policies require the management to exercise judgement in making accounting estimates.

2.1 Accounting Pronouncements

The company for its preparation of financial statement has adopted accounting policies to comply with the pronouncements
made by The Institute of Chartered Accountants of Nepal.

2.2 Accounting Convention

The financial statements are prepared on a historical cost basis except for certain financial and equity instruments that are
measured at fair value.

2.3 Presentations
The financial statements are prepared in Nepalese Rupees and rounded off to the nearest rupee. The figures for previous years
BOTTLERS NEPAL (TERAI) LIMITED

are rearranged and reclassified wherever necessary for the purpose of facilitating comparison. Appropriate disclosures are
made wherever necessary.
The Company presents assets and liabilities in statement of financial position based on current/non-current classification. The
Company classifies an asset as current when it is:
• Expected to be realized or intended to sold or consumed in normal operating cycle,
• Held primarily for the purpose of trading
• Expected to be realized within twelve months after the reporting period or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after
the reporting period
All other assets are classified as non-current.
The Company classifies a liability as current when it is:
• Expected to be settled in normal operating cycle
• Held primarily for the purpose of trading
• Due to be settled within twelve months after the reporting period or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
All other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets/liabilities. Net defined benefit obligation is also classified
as not current liabilities.
The company operating cycle has been defined as twelve-month period.
The statement of profit or loss has been prepared using classification ‘‘by function’’ method.
The statement of cash flows has been prepared using indirect method. Cash flows from operating activities, in addition to the
adjustments from profit for non-cash and non-operating activities, movements in working capital, interest and taxes, separately
include cash flows relating to employee bonus and retirement benefits.

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2.4 Accounting Policies

NFRS requires adoption of accounting policies that are most appropriate to the company’s circumstances determining and
applying accounting policies. Directors and management are required to make judgement in respect of items where the choice
of specific policy, accounting estimate or assumption to be followed could materially affect the company’s reported financial
position, results or cash flows.
Specific accounting policies have been included in the specific section of the notes for each items of financial statements which
requires disclosures of accounting policies or changes in accounting policies. Effect and nature of the changes have been
disclosed wherever required.

2.5 Accounting Estimates

The preparation of financial statements in line with NFRS which requires management to make judgments, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent assets
and liabilities at the date of financial statements.
The estimates and the underlying assumptions are reviewed on ongoing basis. Although these estimates are based on
management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result
in the outcomes requiring a material adjustment to the carrying amount of assets or liabilities in future periods. The estimates
are reviewed periodically by the management.
Specific accounting estimates have been included in the relevant section of the notes wherever the estimates have been applied
along with the nature and effect of changes of accounting estimates, if any.

2.6 Financial periods

The company prepares financial statements in accordance with the Nepalese financial year using Nepalese calendar. The
corresponding dates for Gregorian calendar are as follows:

Particulars Nepalese Calendar Date/Period Gregorian Calendar Date/Period

SFP* Date 32nd Ashad 2075 16th July 2018
Current Reporting Period 1st Shrawan 2074 – 32nd Ashad 2075 16th July 2017 – 16th July 2018
Comparative SFP* Date 31st Ashad 2074 15th July 2017

BOTTLERS NEPAL (TERAI) LIMITED

Comparative reporting period 1st Shrawan 2073 – 31st Ashad 2074 16th July 2016 – 15th July 2017
*Statement of Financial Position

2.7 Presentation currency

The company’s financial statement is presented in Nepalese Rupees which is also the company’s functional currency.

2.8 Lease
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks
and rewards incidental to ownership to the Company is classified as a finance lease.
When all the risks and rewards incidental to ownership are not transferred to the Company (an “operating lease”), the total
rentals payable under the lease are charged to the profit or loss statement over the lease term. The Company has leased 1 plot
of Godown for 10 years from Green Hand Nepal Pvt. Ltd., Kathmandu. These lease agreements are renewal with mutual consent
after the expiry of the initial lease term. There is no purchase option and no fixed escalation clause, however both party has right
to review the lease term after the end lease period.
Future minimum lease payable under non-cancellable operating leases as at balance sheet date are as follows:
Figures in NPR
Period As at 32nd Ashad 2075 As at 31st Ashad 2074
Less Than One Year 12,528,000 -
One Year to Five Years 65,656,868 -
More Than Five Years 76,180,898 -
Total 154,365,766 -

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3. INTANGIBLE ASSETS
Figures in NPR
Intangible assets under
Particulars Computer Software Total
development
Cost
Opening balance at 31st Ashad 2074 83,703,228 - 83,703,228
Additions 3,711,593 3,711,594 7,423,187
Disposals/Adjustments - (3,711,594) (3,711,594)
Closing balance at 32nd Ashad 2075 87,414,821 - 87,414,821
Accumulated Amortisation
Opening balance at 31st Ashad 2074 11,427,990 - 11,427,990
Charge for the year 18,081,676 - 18,081,676
Closing balance at 32nd Ashad 2075 29,509,666 - 29,509,666
Balance at 32nd Ashad 2075 57,905,155 - 57,905,155
Balance at 31st Ashad 2074 72,275,237 - 72,275,237

Intangible assets are recognized on the basis of costs incurred to acquire and bring to use the specific intangible assets such as,
software, where it is probable that such asset will generate future economic benefits in excess of its cost.
Computer software costs are amortized on the basis of expected useful life which is estimated as 5 years (the estimate is being
reviewed periodically). Costs associated with maintaining software are recognized as expenses as and when incurred. At each
statement of financial position date, these assets are assessed for indication of impairment. In the event that an asset’s carrying
amount being greater than its recoverable amount, the assets is considered to be impaired and is written down immediately.
The expenditure incurred in acquisition and installation of new software till the date of commissioning is recognized as intangible
under development. Software is capitalized upon successful test run and after meeting recognition criteria.
BOTTLERS NEPAL (TERAI) LIMITED

The company has made a provision for missing/obsolesce assets during previous financial years and its carrying gross value
together with the relevant accumulated depreciation has been adjusted in the opening specific block of assets wherever
required. Post appropriate approval, the individual item of assets is/will be written off from Fixed Assets Register (FAR).

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Figures in NPR

Plant & Office Capital work-

Particulars Buildings Coolers Containers Other Assets Total
Machinery Equipment in-progress
Cost

Balance at 31st Ashad 2074 642,709,215 2,100,330,746 24,798,457 409,817,266 730,578,608 15,512,533 59,658,055 3,983,404,881

Adjustment (ReClassification) - - - - - - - -

Additions 20,755,612 72,909,978 29,657,680 80,829,510 154,030,420 3,066,536 405,006,438 766,256,174

Disposals/Adjustments (465,740) (523,427) - (71,529,424) (20,540,237) (38,000) (361,249,739) (454,346,567)

Balance at 32nd Ashad 2075 662,999,087 2,172,717,297 54,456,137 419,117,352 864,068,791 18,541,069 103,414,754 4,295,314,489

Depreciation and
impairment losses
Balance at 31st Ashad 2074 65,037,396 631,392,595 17,361,128 154,767,367 327,191,301 11,422,886 - 1,207,172,673

Adjustment (ReClassification) - - - - - - - -

Charge for the year 17,020,428 109,622,754 3,681,573 45,432,788 108,039,575 1,120,668 - 284,917,786

Disposals/Adjustments (465,740) (523,427) - (65,234,914) (18,411,358) (38,000) - (84,673,439)

Balance at 32nd Ashad 2075 81,592,084 740,491,922 21,042,701 134,965,241 416,819,518 12,505,554 - 1,407,417,020

Net Block

Balance at 32nd Ashad 2075 581,407,003 1,432,225,375 33,413,436 284,152,111 447,249,273 6,035,515 103,414,754 2,887,897,469

Balance at 31st Ashad 2074 577,671,818 1,468,938,151 7,437,329 255,049,899 403,387,307 4,089,647 59,658,055 2,776,232,218
Annual Report 2074-75
Bottlers Nepal Limited

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Property, plant and equipment are initially measured at cost in the statement of financial position. These are inclusive of all
cost less any subsequent accumulated depreciation and subsequent accumulated impairment losses, if applicable for each class
of assets. Property, plant and equipment are recognized as an asset, if and only if it is probable that future economic benefits
associated with the item will flow to the company and the cost of the item can be measured reliably.
Cost includes the purchase price and other directly attributable costs of property, plant and equipment. Cost also includes the
cost of replacing part of the plant and equipment and borrowing costs for long-term construction projects if the recognition
criteria are met. When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates
them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized in
the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and
maintenance costs are recognized in profit or loss as incurred. If an item of property, plant and equipment consists of several
components with different estimated useful lives, those components that are significant are depreciated over their individual
useful lives. Subsequent costs that do not qualify the recognition criteria under NFRS are expensed as and when incurred.
The present value of the expected cost for the decommissioning of an asset after its use is considered for determination of
cost of the respective asset if the recognition criteria under NAS 16 and IFRIC 1. Management determines that such cost is not
material thus are not considered.
Assets in the course of construction are carried at cost, less any recognized impairment loss, if any. Depreciation on these assets
will commence when these assets are ready for their intended use and classified under specific asset category.
The company has made a provision for missing/obsolesce assets during previous financial years and its carrying gross value
together with the relevant accumulated depreciation has been adjusted in the opening specific block of assets wherever
required. Post appropriate approval, the individual item of assets is/will be written off from FAR.

4.1 Depreciation
Depreciation on items of property plant and equipment is calculated on the straight-line method based on the useful life of the
assets estimated by the management. Depreciation on additions to property plant and equipment is provided on pro-rata basis
in the year of purchase when the asset is ready to use. The residual values, useful lives and the depreciation methods of assets
are reviewed at least at each financial year end and, if expectations differ from previous estimates are accounted for as a change
in accounting estimates in accordance with NAS 8. If an item of property plant and equipment consist of several components
with different useful lives, those components that are significant are depreciated over their individual useful life

Particulars Clubbed under following class of Assets Useful Life (Years)

BOTTLERS NEPAL (TERAI) LIMITED

Building Building 40
Plant and Machinery Plant and Machinery 20
Cooler Cooler 9
Office Equipment Office Equipment 5
Computer Accessories Office Equipment 4
Bottles Containers 5
Crates Containers 8
Plastic Pallets Other Assets 5
Furniture and Fixtures Other Assets 10
Motor Vehicles Other Assets 5
Other Assets* Other Assets 10

*Other assets majorly includes transformers, electrical installations and soft drink analyzer.

4.1.1 Change in Accounting Estimate

Change in accounting estimate is an adjustment of the carrying amount of an asset or a liability, or the amount of the periodic
consumption of an asset, that results from the assessment of the present status of, and expected future benefits and obligations
associated with, assets and liabilities. Changes in accounting estimates result from new information or new developments and
accordingly, are not corrections of errors.

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4.2 De-recognition
An item of property plant and equipment is de-recognized on disposal or when no future economic benefits are expected from
the use of that asset. The gain or loss arising from the disposal of an item of property, plant and equipment is the difference
between net disposal proceeds, if any, and the carrying amount of that item and is recognized in the statement of profit and loss.

4.3 Capital Work in Progress

The expenditure incurred in acquisition and installation of new systems and equipment till the date of commissioning or civil
works under construction till the date of completion is recognized as Capital works-in-progress. Equipment are capitalized upon
commissioning and civil works are capitalized upon handing over after being capable of being used.
Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
ETP Upgradation - 15,193,213
DG Accessories - 7,010,952
CIP - 9,435,504
Laptops - 380,000
Coolers 40,035,579 27,367,228
Shed - 271,158
Bottles 8,769,913 -
Furniture & Fixtures 265,090 -
IT Equipments 1,591,608 -
Machinery 52,752,564 -
Total 103,414,754 59,658,055

BOTTLERS NEPAL (TERAI) LIMITED

5. INCOME TAXES
5.1 Current Income Tax
Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Current tax on profits for the year 167,733,545 84,975,300
Adjustment for under provision in prior periods 151,000 3,375,768
Total 167,884,545 88,351,068

5.2 Deferred Income Taxes

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Origination and reversal of temporary differences 2,128,991 18,332,602
Effect of Change in Tax Rate - -
Total 2,128,991 18,332,602

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5.3 Deferred tax Liability

Deferred tax is calculated on temporary differences using the effective tax rate of 16% (PY 17%). Deferred tax assets have been
recognized in respect of all tax losses and other temporary differences giving rise to deferred tax assets where the management
believe it is probable that these assets will be recovered.
FY : 74/75 Figures in NPR
Particulars Carrying Amount Tax Base Temporary Diff
1 Property, Plant & Equipment 2,716,574,164 2,063,508,762 (653,065,401)
2 Provisions for Expenses (378,332,916) - 378,332,916
3 Intangible Assets 60,291,613 55,150,949 (5,140,663)
Total Amount (279,873,148)
Tax Rate 16% (44,779,704)
Opening Deferred tax Assets/(Liability) (41,385,048)
Deferred tax provision recognised in profit or loss (3,394,656)
Closing Deferred tax Assets/(Liability) (44,779,704)
Charge/(Credit) to OCI (1,265,665)
Charge/(Credit) to PL (2,128,991)

FY : 73/74 Figures in NPR

Particulars Carrying Amount Tax Base Temporary Diff
1 Property, Plant & Equipment 2,695,440,805 2,113,608,474 (581,832,331)
2 Provisions for Expenses (341,447,559) - 341,447,559
3 Intangible Assets 72,275,237 69,218,552 (3,056,685)
Total Amount (243,441,457)
BOTTLERS NEPAL (TERAI) LIMITED

Tax Rate 17% (41,385,048)

Opening Deferred tax Assets/(Liability) (32,433,216)
Deferred tax provision recognised in profit or loss (8,951,832)
Closing Deferred tax Assets/(Liability) (41,385,048)
Charge/(Credit) to OCI (9,380,770)
Charge/(Credit) to PL 18,332,602

5.4 Reconciliation
Reconciliation of tax profit and the accounting profit: -
Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Accounting profit before income tax 911,342,615 589,306,378
Adjustment as per Income Tax Act 2058 75,325,298 (89,451,674)
Total Profit as per Income Tax 986,667,913 499,854,704
Tax Rate 17% 17%
Total Tax as per Income Tax 167,733,545 84,975,300

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6. INVENTORIES
Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Raw materials 480,621,674 560,035,700
Work-in-process 6,250,417 4,987,466
Finished goods 79,454,252 100,429,490
Consumables 318,602,951 193,363,898
Total 884,929,294 858,816,554

Inventories are carried at the lower of cost or net realizable value.

Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and
the necessary estimated expenses. The cost of obsolescence and other anticipated losses are also considered for determining
the net realizable values.
In determining the cost of raw materials and packing materials, First In First Out (FIFO) method is used. Cost of inventory
comprises of all costs of purchase, duties, taxes (other than those subsequently recoverable from tax authorities), cost of
conversion and other costs incurred in bringing the inventories to their present location and condition.
In determining the cost of consumables, stores and spares weighted average cost method is used.
Cost of finished goods includes the cost of raw materials, packing materials, direct labor and appropriate proportion of fixed and
variable production overheads incurred in bringing the inventory to their present location and condition.
Inventories are presented net of allowance for obsolescence and other possible depletion in value or other losses. Allowance
adjustments are made for those inventories identified by management as obsolete on the basis of 10 Year Aging or technical
evaluation whichever is earlier.
Inventories have been pledged as lien for the purpose of availing bank overdraft facilities.

7. OTHER ASSETS

BOTTLERS NEPAL (TERAI) LIMITED

7.1 Prepayments
These are expenses paid for the period beyond the financial period covered under the financial statement. These will be
charged off as expenses in the respective period for which such expenses pertain to.
Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Prepaid Expenses 21,505,927 19,327,718
Total 21,505,927 19,327,718

7.2 Advances
Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Capital Advances - 9,542,092
Advances to Employees 961,992 1,087,492
Total 961,992 10,629,584
These advances are non-interest bearing and are expected to be settled in the normal course of operations.

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7.3 Other Current Assets

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Security Deposits 116,050 108,300
Advance to suppliers 99,423,509 12,368,939
Advances to Employees 7,226,190 4,416,014
Balances with statutory/government authorities 65,948,000 40,964,000
VAT Receivable (Net) 27,017,044 29,762,699
Advance Income Tax (Net) 12,138,444 -
Total 211,869,237 87,619,952

Financial Instruments: Financial Assets

Financial asset is any asset that is:
(a) cash
(b) an equity instrument of another entity;
(c) a contractual right:
i) to receive cash or another financial asset from another entity; or
ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially favorable to
the entity; or
(d) a contract that will or may be settled in the entity’s own equity instruments and is:
(i) a non-derivative for which the entity is or may be obliged to receive a variable number of the entity’s own equity
instruments; or
(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset
for a fixed number of the entity’s own equity instruments.
Financial assets are classified under four categories as required by NAS 39, namely,
BOTTLERS NEPAL (TERAI) LIMITED

• Fair Value through Profit or Loss,

• Held to Maturity,
• Loans & Receivables and
• Available for Sale.
The company only holds financial assets meeting the recognition criteria of Loans & Receivables classification. These instruments
are to be recognized at amortized cost using effective interest rate.
Financial assets of the company comprise of advances, other current assets, Trade Receivables and cash & cash equivalents. These
instruments are mostly non-interest bearing and where interest component is present the implicit interest rate approximates
effective interest rate. These instruments are expected to be settled or recovered within a year. Therefore, it is assumed that the
carrying amount represents the amortized cost of the assets.

Risks associated with Financial Instrument - Financial Assets

The company has a risk management framework to monitor, access, mitigate and manage risks this risk management framework
is given is Note 28.

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8. TRADE RECEIVABLE
Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Trade receivables
Secured, considered good 92,087,120 55,252,626
Unsecured considered good 56,810,648 13,157,968
Receivables from other related parties 10,600,539 -
Interest Income Receivables - 754,110
Other receivables - 225,169
Total 159,498,307 69,389,872
Bank overdrafts are secured against all receivables.

8.1 Trade Receivables

Trade receivables comprises of amount receivable from our customers and are non-interest bearing and are generally on terms
of 15 to 90 days.
Secured trade receivable are against Bank Guarantee provided by the customers.

8.2 Other Receivables

Other receivables are receivable from insurance companies against unsettled claims.

8.3 Related Parties Transaction

It includes transactions with group companies and key management personnel which are disclosed in Note 27.

BOTTLERS NEPAL (TERAI) LIMITED

8.4 Impairment
For allowances, assets with a potential need for a write-down are grouped together on the basis of similar credit risk
characteristics, tested collectively for impairment, and written-down, if necessary. Estimated irrecoverable amounts are based
on the ageing of the receivable balances, taking previous cases of default into consideration and historical experiences.

9. CASH AND CASH EQUIVALENTS

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Balances with Banks
– On current accounts 24,525,330 39,340,287
– Deposits accounts - 270,000,000
Cash on hand 70,935 213,935
Total 24,596,265 309,554,222
Balances with banks comprises of amount held by the - 258,156
banks as margin money deposits against Letter of Credits
Balances with banks comprises of amount held as Fixed - 270,000,000
Deposit
Cash at banks earns interest at floating rates based on daily balances.
Short-term deposits are made for varying from one day to Six months, depending on the cash requirements of the Company,
and earn interest at the respective short-term deposit rates.
The above balances are also considered as the cash & cash equivalents for Statement of Cash Flow purposes.

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10. SHARE CAPITAL

Figures in NPR
As at 32nd Ashad 2075 As at 31st Ashad 2074
Particulars
Number NPR Number NPR
Authorized
Ordinary shares of Rs. 100 each 31,210,000 3,121,000,000 31,210,000 3,121,000,000
Issued and Fully paid
Ordinary shares of Rs. 100 each 1,210,000 121,000,000 1,210,000 121,000,000
At the beginning of the year 1,210,000 121,000,000 1,210,000 121,000,000
At the end of the year 1,210,000 121,000,000 1,210,000 121,000,000

The shareholding pattern on the company is as follows

As at 32nd Ashad 2075 As at 31st Ashad 2074

Shareholder Category
No. of Shares % of holding No. of Shares % of holding
Bottler's Nepal Limited 1,098,472 90.78% 1,098,472 90.78%
Other Shareholders 111,528 9.22% 111,528 9.22%
Total 1,210,000 100.00% 1,210,000 100.00%

Share issue expenses have not been netted off against the capital collected as these pertain to periods of initial establishment
of the company and such expenses have been charged off during those periods. The management considers that the cost of
obtaining information is more than the benefits derived and the effect of such the amounts to be immaterial.
BOTTLERS NEPAL (TERAI) LIMITED

11. RESERVE AND SURPLUS

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Share Premium 952,000 952,000
Retained earnings 1,865,081,423 1,144,826,679
(As per Statement of Changes in Equity)
Total 1,866,033,423 1,145,778,679

Share premium is used to record the premium on issue of equity shares. These can only be utilized in accordance with the
provision of the Companies Act.
i) Premium of Rs. 20 each on 47,600 ordinary shares.

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12. EMPLOYEE BENEFITS

Current Employment Benefits

Figures in NPR
Particulars For the year 2074-75 For the year 2073-74
Salaries, wages and other employee cost
Cost of sales 313,975,382 265,877,882
Selling and distribution expenses 148,852,134 127,623,048
Administrative and operating expenses 47,105,549 42,826,714
Defined Contribution Plan Expenses
Cost of sales 3,926,679 3,494,051
Selling and distribution expenses 2,039,338 1,521,772
Administrative and operating expenses 159,661 228,854
Defined Benefit Plan Cost
Cost of sales 27,561,079 18,868,896
Selling and distribution expenses 4,048,351 9,955,348
Administrative and operating expenses 3,248,571 7,422,011
Total Employee Cost for the Period 550,916,744 477,818,576

12.1 Post-Employment Benefits

The company operates number of defined benefit and defined contribution plans for its employees of the company. The defined
benefit plan of the company includes leave encashment expenses, expenses pertaining to gratuity and other retirement benefits.

BOTTLERS NEPAL (TERAI) LIMITED

2074-75 Figures in NPR
Particulars Gratuity Leave Encashment Others Total
Opening Liability 180,234,721 10,386,317 116,364,090 306,985,128
Current Service cost 4,200,000 1,503,000 6,673,260 12,376,260
Interest Charge 13,367,000 777,000 8,269,000 22,413,000
Paid (4,011,538) (61,317) (2,081,000) (6,153,855)
Acturial (gain)/loss during the year (4,858,000) (2,860,000) (192,000) (7,910,000)
(recognised in OCI)
Closing Liability 188,932,183 9,745,000 129,033,350 327,710,533
Charge for the period to SoPL 17,567,000 2,280,000 14,942,260 34,789,260
Charge to SoCI (4,858,000) (2,860,000) (192,000) (7,910,000)

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2073-74 Figures in NPR

Particulars Gratuity Leave Encashment Others Total
Opening Liability 152,532,145 7,193,042 76,640,732 236,365,919
Current Service cost 9,826,000 885,000 7,734,255 18,445,255
Interest Charge 11,684,000 567,000 5,550,000 17,801,000
Paid (12,953,424) (218,725) (7,635,828) (20,807,977)
Acturial (gain)/loss during the year 19,146,000 1,960,000 34,075,000 55,181,000
(recognised in OCI)
Closing Liability 180,234,721 10,386,317 116,364,159 306,985,197
Charge for the period to SoPL 21,510,000 1,452,000 13,284,255 36,246,255
Charge to SoCI 19,146,000 1,960,000 34,075,000 55,181,000

Defined Plan Benefit

The defined benefit plans of the group include Gratuity, Leave Encashment Entitlements and Other Retirement benefits.

12.1.1 Gratuity
Gratuity for existing and retired employees have been provided as per the actuarial assessment. The assessed amounts have
been recognized as liabilities. The gratuity shceme is computed on below basis: -

A. Gratuity Benefit till 3rd September 2017:

Plan Service Definition Number of years of service rounded to the nearest integer.
Salary Definition Last drawn Basic Salary
Vesting Schedule 3 years
BOTTLERS NEPAL (TERAI) LIMITED

Normal Retirement Age 58 years

Benefit on normal retirement/ early Nil for each year of service up to 3 years
retirement/death/ disability in service
1/2 months’ salary of each year of service up to 7 years.
2/3 months’ salary for each year of service for service between 7 and 15 years.
1 month salary for each year of service for service between 15 and 17 years.
1 month 5 days’ salary for each year of service for the service over 17 years.
Benefit on withdrawal Nil for each year of service up to 3 years

1/2 months’ salary of each year of service up to 7 years.

2/3 months’ salary for each year of service for service between 7 and 15 years.
1 month salary for each year of service for service between 15 and 17 years.
1 month 5 days’ salary for each year of service for the service over 17 years.
Maximum Limit No Limit
Tax on Gratuity* 15%, borne by the company

*The tax under gratuity scheme is applicable to the accrued service post 31st March 2002 and is payable at a flat rate of 15% of
the benefit using gross up approach. Hence, any service prior to 31st March 2002 does not attract any tax.

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B. Gratuity Benefit on or after 4th September 2017:

Plan Service Definition Number of years of service rounded to the nearest integer.
Salary Definition Last drawn Basic Salary
Vesting Schedule No vesting available
Normal Retirement Age 58 years
Benefit on normal retirement/ early retirement/death/ 8.33 % of Basic Salary per month for each year of service
disability in service
Benefit on withdrawal 8.33 % of Basic Salary per month for each year of service
Maximum Limit Accumulated Corpus

No actuarial valuation has been carried out for benefit accruing after 3rd September 2017, as it will be Defined Contribution
Scheme.

12.1.2 Leave Encashment

Leave encashment has been computed using actuarial assumptions. The assumptions made are the growth rate derived from
the past experience and discounting the long term obligations at the end of each reporting period. Sick leave of 1.5 times the
last drawn monthly basic salary is paid to employee. The maximum accumulation allowed is 30 days.

12.1.3 Other Retirement Benefits

Other retirement benefits include three days’ basic salary computed based on completion of 17 yrs. compulsory retirement
or 20 years of completion of service for withdrawal and gold coin at compulsory retirement. Other retirement benefits have
been computed using actuarial assumptions. The assumptions made are the growth rate derived from the past experience and
discounting the long term obligations at the end of each reporting period.

12.1.4 Sensitivity Analysis

BOTTLERS NEPAL (TERAI) LIMITED

Figures in NPR
Retirement
Particulars Gratuity Sick Leave
Benefits
Effect on DBO due to 0.5% increase in discount rate (5,510,000) (5,605,000) (416,000)
Effect on DBO due to 0.5% decrease in discount rate 5,807,000 6,069,000 449,000

Effect on DBO due to 0.5% increase in salary escalation rate 5,224,000 5,605,000 414,000
Effect on DBO due to 0.5% decrease in salary escalation rate (5,013,000) (5,237,000) (387,000)

The above sensitivity analysis is based on a change in an assumption while holding all other assumption constant. In practice,
this unlikely to occur and changes in some of the assumption is correlated. When calculating sensitivity of the defined benefit
obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated
with projected unit credit method at the end of reporting period) has been applied as when calculating the defined benefit
liability recognized in the balance sheet.

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12.1.5 Actuarial Assumptions

Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Financial Assumptions
Discount rate (%) 7.50% 7.50%
Salary escalation rate 10.00% 10.00%
Expected return on Plan Assets Nil Nil
Future service Expected average remaining working life Expected average remaining working life
of the employees based on withdrawal of the employees based on withdrawal
rate and retirement age taken as 8 years rate and retirement age taken as 8 years
Demographic Assumptions
Mortality In accordance with the standard table, In accordance with the standard table,
Indian Assured Lives Mortality (2006- Indian Assured Lives Mortality (2006-
2008) (modified) Ultimate Rates 2008) (modified) Ultimate Rates
Withdrawal rate 3.50% 3.50%

12.1.6 Defined Benefit Plan Assets

Defined benefit obligations are not funded and there are no Defined Benefit Plan Assets. The company is in the process of
creating a separate fund for meeting the defined benefit obligations.

12.2 Defined Contribution Plan

The defined contribution expenses include employer’s contribution to provident fund. These amounts have been deposited in
Employee Provident Fund, a 100% Government of Nepal undertaking.

13. FINANCIAL INSTRUMENTS – FINANCIAL LIABILITIES

BOTTLERS NEPAL (TERAI) LIMITED

A financial liability is any liability that is:

a) contractual obligation:
(i) to deliver cash or another financial asset to another entity; or
(ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable
to the entity; or
(b) a contract that will or may be settled in the entity’s own equity instruments and is:
(i) a non-derivative for which the entity is or may be obliged to deliver a variable number of the entity’s own equity
instruments; or
(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset
for a fixed number of the entity’s own equity instruments.
The company classifies financial liabilities as Fair Value through Profit or Loss and those Held at Amortized Cost. All financial
liabilities held by the company are classified as financial liabilities held at amortized cost using effective interest rate.
Financial liabilities held by the company are both interest bearing and non-interest bearing.
The non-interest bearing instruments’ carrying value represents the amortized cost.
For interest bearing financial liabilities which comprises of the bank loans, interest charged by the bank approximates effective
interest rate and the rate is considered for calculation of amortized cost of liability and the finance cost. The effect of initial
charges and its impact on effective interest rate is considered not material and the carrying value is considered to approximate
the amortized cost.

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13.1 Non-Current Borrowings

Figures in NPR
As at 32nd Ashad As at 31st Ashad
Particulars Rate of Interest (%) Maturity
2075 2074
Term Loan
From Bank
Secured bank loan - -
Total - -

13.2 Current Borrowings

Figures in NPR
As at 32nd Ashad As at 31st Ashad
Particulars Rate of Interest (%) Maturity
2075 2074
Bank overdrafts 8.30% On demand 496,608,770 434,574,979
Secured bank loan 8.30% - 376,000,000
Total 496,608,770 810,574,979

Short term bank overdraft carries interest at the rate 7.25 % to 9.20% p.a. during the year and repayable on demand.

Bank overdrafts are secured against all movable properties/current assets including inventory stocks & trade receivables whereas
Term Loan has been secured against immovable properties, with Standard Chartered Bank Limited, Nepal.

13.3 Trade Payables

Figures in NPR

BOTTLERS NEPAL (TERAI) LIMITED

Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Trade Payable 705,910,443 702,780,635
Trade Payable to related parties (Note 27.2) 91,088,500 573,038,883
Total 796,998,943 1,275,819,518

Risks associated with Financial Instrument- Financial Liabilities

The company has a risk management framework to monitor, access, mitigate and manage risks. The risk management framework
is given in Note 28.

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14. OTHER FINANCIAL LIABILITIES

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Interest payables 1,560,095 1,620,424
Container deposit liability 461,976,026 404,540,922
Corporate Social Responsibility 16,739,469 6,962,093
Trade Deposits 1,659,430 1,759,430
Advance received from distributors 21,156,996 12,772,126
Employee related accruals 1,944,550 826,892
Statutory dues payable 83,964,224 59,782,419
Advance against unsettled Claims 7,031,483 6,355,221
Income tax payable (Net) - 7,682,408
Total 596,032,273 502,301,935

Provisions are recognized when the company has a present obligation, legal or constructive, as a result of a past event, it is
probable that a transfer of economic benefits will be required to settle the obligation and when reliable estimate can be made
of the amount of obligation. If these conditions are not met, no provision is recognized.
The amount of provision recognized is the management’s best estimate of expenditure required to settle the present obligation
at the reporting date.

Corporate Social Responsibility

CSR Provision is accounted as per Industrial Enterprises Act 2016 (2073 BS) (the “Act”) has been introduced with effect from
November 22, 2016 repealing the Industrial Enterprises Act 1992 (2049 BS) (the “Previous Act”).
Section 48 Industrial Enterprises Act 2016 (2073 BS) makes it mandatory to allocate 1% of the annual profit to be utilized
BOTTLERS NEPAL (TERAI) LIMITED

towards corporate social responsibility (the “CSR Requirement”).

The fund created for CSR is to be utilized on the basis of annual plans and programs but in the sectors that are prescribed under
the Act however, such sectors are yet to be specified by the Act. The progress report of the utilization of the fund collected
for CSR is required to be submitted to the relevant government authorities registered within three months from expiry of the
financial year.

Changes in provision
Management reviews provisions at each reporting date and is adjusted to reflect the best estimate. If it is no longer probable
that a transfer of economic benefits will be required to settle the obligation, the provision is reversed.

15. REVENUE
Figures in NPR
Particulars For the year 2074-75 For the year 2073-74
Sale of goods 6,320,143,060 5,106,141,738
Less: Discount (661,727,440) (532,140,358)
Total 5,658,415,620 4,574,001,380

15.1 Sale of Goods

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue
and associated costs incurred or to be incurred can be reliably measured and when recognition criteria related to sale of goods
activities i.e. when the significant risks and rewards of ownership of the goods have transferred to the buyer, with the Company
retaining neither continuing managerial involvement to the degree usually associated with ownership, nor effective control over
the goods sold.

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Revenue is measured at the fair value of the consideration received or receivable net of trade discounts. Revenue include all
revenue from ordinary activities of the company that are recorded net off Value Added Taxes and Excise Duty collected from
the customer that are remitted or are to be remitted to the government authorities.
The company generates revenue from sale of goods in the ordinary course of business.

16. COST OF SALES

Figures in NPR
Particulars For the year 2074-75 For the year 2073-74
Material consumed
Raw materials
At 1st Shrawan 560,035,700 604,803,739
Purchase 2,627,618,395 2,369,752,842
Less: Transfer to Bottlers Nepal Ltd. (45,468,268) (4,483,360)
At 32nd Ashad (480,621,674) (560,035,700)
Raw material consumed total 2,661,564,153 2,410,037,521
Work in process
At 1st Shrawan 4,987,466 589,550
At 32nd Ashad (6,250,417) (4,987,466)
Net change in work-in-process (1,262,951) (4,397,917)
Production and manufacturing overheads 935,128,058 711,983,246

Finished goods stock

At 1st Shrawan 100,429,490 94,861,891
At 32nd Ashad (79,454,252) (100,429,490)
Net change in finished goods stock 20,975,238 (5,567,599)
Cost of sales 3,616,404,497 3,112,055,251

16.1 Production and Manufacturing Overheads

BOTTLERS NEPAL (TERAI) LIMITED

Figures in NPR
Particulars For the year 2074-75 For the year 2073-74
Salaries, wages and other employee cost 313,975,382 265,877,882
Sick Leave 1,483,000 913,000
Provident fund 3,926,679 3,494,051
Gratuity 11,991,000 15,152,000
Other retirement benefits 14,087,079 2,803,896
Travel and transport costs 7,738,646 5,699,880
Repair and maintainence 111,745,556 70,721,874
Communication expenses 93,653 84,281
Consumables 48,675,785 34,841,183
Loss on sale/write off of Property plant equipment (net) 8,423,389 (4,591,376)
Stock Adjustment 1,012,155 2,999,396
Office expenses 16,163,686 8,565,899
Power & Fuel 107,828,180 97,500,633
Legal and other professional fees 1,610,748 1,683,698
Depreciation on property, plant and equipment 237,394,895 222,652,406
Amortization of Intangible Assets 17,234,026 2,735,725
Testing & Sampling 9,523 1,870,919
Exchange Gain/Loss 31,734,676 (21,022,101)
Total 935,128,058 711,983,246

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17. OTHER OPERATING INCOME

Figures in NPR
Particulars For the year 2074-75 For the year 2073-74
Product transfer fee 46,683,707 53,294,183
Sale of Scrap 11,317,193 10,784,047
Miscellaneous Income 1,797,934 1,057,521
Total 59,798,834 65,135,751

17.1 Product Transfer Fee

The Company and Bottlers Nepal Ltd, its Parent Company, can sell their products in their respective market territories only. In
respect of sales made by the Company and its holding, in market territory of the other Company, a product transfer fee (gross)
at the rate of 12 % (Previous year 12 %) of net liquid sales revenue is recovered/ paid. Product transfer service fee is recognized/
charged to income statement as and when sale of goods is effected as per above clause.

17.2 Sale of Scrap

Items included under this income are towards sale amount realized from sale of scraps.

17.3 Miscellaneous Income

Income includes charges recovered from customer on account of handling loss of Glass Bottles.
The company generates revenue from sale of goods in the ordinary course of business.

18. SELLING AND DISTRIBUTION EXPENSES

Figures in NPR
Particulars For the year 2074-75 For the year 2073-74
BOTTLERS NEPAL (TERAI) LIMITED

Salaries, wages and other employee cost 148,852,134 127,623,048

Sick Leave 451,000 239,000
Provident fund 2,039,338 1,521,772
Gratuity 2,999,000 3,060,000
Other retirement benefits 598,351 6,656,348
Travel and transport costs 13,399,426 10,904,504
Office expenses 14,103,911 2,623,155
Repair and maintainence 10,622,038 11,405,732
Communication expenses 620,707 601,726
Utilities 29,345,556 24,144,185
Freight Charges 393,553,746 294,530,231
Liquid leakages and damages 71,179,216 101,070,560
Sales promotion expenses 215,032,297 35,433,581
Other miscellaneous expenses 15,483,671 23,279,369
Depreciation on property, plant and equipment 41,470,735 40,466,887
Amortization of Intangible Assets 40,709 4,689,814
Product transfer fees 41,392,222 34,642,981
Total 1,001,184,057 722,892,893

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19. ADMINISTRATIVE AND OPERATING EXPENSES

Figures in NPR
Particulars For the year 2074-75 For the year 2073-74
Salaries, wages and other employee cost 47,105,549 42,826,714
Sick Leave 346,000 300,000
Provident fund 159,661 228,854
Gratuity 2,577,000 3,298,000
Other retirement benefits 325,571 3,824,011
Travel and transport costs 3,582,630 13,541,984
Office expenses 30,518,183 25,825,542
Repair and maintainence 6,217,039 3,076,064
Bank charges 6,037,731 3,299,750
Audit fees 300,000 300,000
Legal and other professional fees 11,942,557 4,850,930
Communication expenses 21,441,109 27,139,384
Utilities 441,679 2,444,441
Depreciation on property, plant and equipment 6,052,157 5,905,657
Amortization of Intangible Assets 806,942 390,818
Corprate Social Responsilbity 9,777,376 6,962,093
Public Affairs and Communication (PAC) expenses 1,505,546 2,400,410
Security Expenses 9,221,672 7,442,562
Board and AGM expenses 135,000 119,000
Other miscellaneous expenses 423,853 114,170
Total 158,917,255 154,290,384

19.1 Audit Fees Disclosure

Figures in NPR

BOTTLERS NEPAL (TERAI) LIMITED

Particualrs For the year 2074-75 For the year 2073-74
Statuory Audit Fee 300,000 300,000
Other Allowances 416,000 416,000
Total 716,000 716,000

20. FINANCE COST

Finance costs comprises of interest on Term Loan and interest on short term borrowings in the form of bank overdrafts. All these
costs are carried at amortized cost using effective interest rate as required by NAS 39.
Figures in NPR
Particulars For the year 2074-75 For the year 2073-74
Interest on Overdraft 40,174,267 18,031,693
Interest on Term Loan - 44,042,554
Total 40,174,267 62,074,247

21. FINANCE INCOME

Figures in NPR
Particulars For the year 2074-75 For the year 2073-74
Interest income 9,808,237 1,482,023
Total 9,808,237 1,482,023

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21.1 Interest Income

Interest income has been recognized using effective interest method as required by NAS 39.

22. EARNINGS PER SHARE

Figures in NPR
Particulars For the year 2074-75 For the year 2073-74
Numerator
Profit for the year and earnings used in basic EPS and diluted EPS 741,329,079 482,622,709
Denominator
Weighted average number of shares used in basic EPS 1,210,000 1,210,000
Basic and diluted earnings per share (NPR) 613 399

Basic EPS is calculated by dividing the profit attributable to ordinary equity holders of the company for the period by the
weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares.
Number of shares have not changed over the reported periods. There are no potential ordinary shares that would dilute basic
earnings per share, hence diluted EPS is same as basic EPS

23. DIVIDEND PAID AND PROPOSED

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Declared and paid during the year:
Dividends on ordinary shares: Final dividend for 2073-74: 30,250,000 30,250,000
Rs. 25 per share for 72-73: Rs 25 Per Share
BOTTLERS NEPAL (TERAI) LIMITED

Proposed for approval at the annual general meeting

(not recognised as a liability as at balance sheet
date):
Dividends on ordinary shares:
2073-74: Rs 25 per Share 30,250,000
2074-75: Rs 40 per Share 48,400,000

24. CONTINGENT LIABILITIES AND CAPITAL COMMITMENT

24.1 Contingent Liabilities

Contingent liabilities are potential future cash out flows, where the likelihood of payment is considered more than remote, but
is not considered probable or cannot be measured reliably.

24.2 Corporate Tax Matters

i. LTO assessed the income tax, TDS and VAT liabilities of the company for the year 2066-67. For the unaccepted amount, the
company has filed the case for Administrative Review. Pending decision from the Director General, additional liabilities have
not been recognized in the financial statements and have been disclosed as contingent liabilities as below: -

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Figures in NPR
Particulars Additional Demand Accepted Amount Appeal against demand
Income-Tax 5,393,862 14,164 5,379,697
TDS 4,510,857 255,194 4,255,663
VAT 20,397,706 12,172,084 8,225,621

ii. LTO assessed the income tax, TDS and VAT liabilities of the company for the year 2067-68. For the unaccepted amount, the
company has filed the case for Administrative Review. Pending decision from the Director General, additional liabilities have
not been recognized in the financial statements and have been disclosed as contingent liabilities as below: -

Figures in NPR
Particulars Additional Demand Accepted Amount Appeal against demand
Income-Tax 11,469,425 - 11,469,425
TDS 24,018,811 121,490 23,897,321
VAT 3,869,900 - 3,869,900

iii. LTO assessed the income tax, TDS and VAT liabilities of the company for the year 2068-69. For the unaccepted amount, the
company has filed the case for Administrative Review. Pending decision from the Director General, additional liabilities have
not been recognized in the financial statements and have been disclosed as contingent liabilities as below: -

Figures in NPR
Particulars Additional Demand Accepted Amount Appeal against demand
Income-Tax 30,782,794 238,286 30,544,508

BOTTLERS NEPAL (TERAI) LIMITED

TDS 39,993,762 100,687 39,893,075
VAT 830,566 830,566 -

iv. LTO assessed the income tax, TDS and VAT liabilities of the company for the year 2069-70. For the unaccepted amount, the
company has filed the case for Administrative Review. Pending decision from the Director General, additional liabilities have
not been recognized in the financial statements and have been disclosed as contingent liabilities as below-

Figures in NPR
Particulars Additional Demand Accepted Amount Appeal against demand
Income-Tax 66,361,558 - 66,361,558
TDS 75,154,450 123,929 75,030,521
VAT 26,523 26,523 -

v. LTO assessed the income tax, TDS and VAT liabilities of the company for the year 2070-71. For the unaccepted amount,
the company has been preparing to file the case for Administrative Review. Pending decision from the Director General,
additional liabilities have not been recognized in the financial statements and have been disclosed as contingent liabilities
as below-

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Figures in NPR
Particulars Additional Demand Accepted Amount Appeal against demand
Income-Tax 47,213,938 22,776,663 24,437,275
TDS 9,238,997 482,726 8,756,271
VAT 35,661,144 2,109,057 33,552,087

24.3 Commitment
A commitment is a contractual obligation to make a payment in the future, mainly in relation to leases and agreements to buy
assets. These amounts are not recorded in the statement of financial position since the company has not yet received the goods
or services from the supplier. The amounts below are the minimum amounts that we are committed to pay.
At the end of Current FY 2074/75, the Company had capital commitments of NPR 111,199,740 (Previous FY 2073/74 NPR
43,614,442) relating to various small projects.

25. INTERIM REPORTING

Interim reports have been publicly reported in accordance with the requirement of SEBON and NEPSE. These requirements are
materially aligned with the requirements of NAS 34.

26. SEGMENT REPORTING

The Company has only one “business segment” i.e. dealing in “non-alcoholic beverage”. The non-alcoholic beverage business
mainly consists of products like carbonated soft drinks in different flavors. All these products have similar risks and returns
because of similar nature of products, common consumer segments, similar production processes and common distribution
channel. Further, internal organizational and management structure and its system of internal financial reporting of the Company
is not based on product or geographical differentiation.

27. RELATED PARTY TRANSACTIONS

Relationship
BOTTLERS NEPAL (TERAI) LIMITED

The company identified related parties on the following lines

1. Part of the Group

a. Parent company, ultimate parent
b. Other Subsidiaries of the parent / ultimate parent
c. Subsidiaries of the company
2. Directors and their relatives
3. Key management personnel and their relatives
4. Employee benefit plan
The obligations are carried in the financial statements which the group is considering to fund separately.

27.1 Transactions with Directors & Key Management Personnel

During the year neither any directors nor any key management personnel nor any associate or family member (relative) of the
directors and key management personnel was indebted to the company.
There have no material transactions or proposed transactions with directors and key management personnel or their relatives
and associates except for the compensations and/or remuneration paid under the company’s regulations.
Figures in NPR
Particualrs Remuneration Allowances Facilities
Director's Fees & Facilities - 135,000 -
CEO - - -
Key Managers 10,721,518 1,525,703 230,000
Total 10,721,518 1,660,703 230,000

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Additional Information
a) Key management personnel are also provided with following benefits:
i) All Manager of the Company are provided vehicle allowance as per Company Policy
ii) Performance bonus based on individual, overall Country and Division performance.
b The amounts disclosed in the table are the amounts recognized as an expense during the reporting period related to
key management personnel. Also, the liabilities for defined benefit plans (i.e. gratuity and other retirement benefits) and
leave encashment are provided on an actuarial basis for the company as a whole, so the amounts pertaining to the key
management personnel are not included above.

27.2 Other Related Party Transaction and Balances

Figures in NPR
RELATED PARTY TRANSACTIONS For the year 2074-75 For the year 2073-74
Sale to related parties:
Sale of various materials to Bottlers Nepal Limited (at cost) 45,468,268 4,483,360
Purchases from related parties:
Purchase of various materials from Bottlers Nepal Limited (at Cost) 18,332,564 -
Purchase of concentrate from Atlantic Industries 1,117,231,357 923,601,509
Product transfer fee:
Received from Bottlers Nepal Limited 46,683,707 53,294,183
Paid to Bottlers Nepal Limited 41,392,222 34,642,979
Management Fee Paid to Bottlers Nepal Limited 114,871,021 62,221,803
Dividend paid to Bottlers Nepal Limited 27,461,800 27,461,800
Bad Debts Recongnised in respect of Receivables from Related Parties:
- Atlantic Industries-Other related party - -

BOTTLERS NEPAL (TERAI) LIMITED

Amounts owed by related Parties:
Bottlers Nepal Limited-Parent company 10,600,539 -
Troika Traders Pvt. Ltd.-Other related party - -
Amounts owed to related Parties:
Bottlers Nepal Limited-Parent company - 45,206,992
Troika Traders Pvt. Ltd.-Other related party 527,087 9,839,329
Atlantic Industries-Other related party 52,695,483 517,992,563
Pacific Refreshment-Other related party 37,865,929 -

Terms and conditions of transactions with related parties

Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no
guarantees provided or received for any related party receivables or payables. This assessment is undertaken each financial year
through examining the financial position of the related party and the market in which the related party operates.

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28. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s principal financial liabilities comprise loans and borrowings and trade and other payables. The main purpose of
these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets comprise trade and
other receivables, and cash and short-term deposits that arrive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk.
The Company’s senior management oversees the management of these risks.
The Board of Directors reviews and agrees policies for managing each of these risks which are summarized below.

28.1 Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market
prices. Market prices comprise four types of risk: interest rate risk, currency risk, commodity price risk and other price risk, such
as equity price risk. Financial instruments affected by market risk include loans and borrowings and deposits.

28.1.1 Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s
bank overdraft and short term deposits.
The Company manages its interest rate risk by negotiating with highly reputed commercial banks.

28.1.2 Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the
Company’s operating activities (when revenue or expense is denominated in a different currency from the Company’s functional
currency).
The Company manages its foreign currency risk by not holding the receivables and payables in foreign currencies for long
durations.

28.1.3 Commodity Price Risk

BOTTLERS NEPAL (TERAI) LIMITED

The Company is affected by the volatility of certain commodities. Its operating activities require the ongoing purchase of raw
materials and therefore require a continuous supply of the same.
The Company manages this risk by purchasing materials and supplies from the suppliers identified by the group and the
Company has long term relation with the suppliers.

28.2 Credit Risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss. The Company is exposed to credit risk from its operating activities (primarily for trade receivables) and from
its financing activities, including deposits with banks and financial institutions.

28.2.1 Trade Receivables

Customer credit risk is managed by the Company’s established policy, procedures and control relating to customer credit
risk management. Credit quality of the customer is assessed and individual credit limits are defined in accordance with this
assessment.
Outstanding customer receivables are regularly monitored and shipments to major customers are generally covered by bank
guarantees.

28.2.2 Cash Deposits

Credit risk from balances with banks and financial institutions are managed by maintaining the balances with highly reputed
Commercial banks only.

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28.3 Liquidity risk

The Company monitors its risk to a shortage of funds on a regular basis through cash forecast.
The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts
and bank loans. Access to sources of funding is sufficient.

For & on behalf of Board

Shukla Wassan Sundeep Bajoria Prasad Gyawali Gunjan Dhawan

Chairperson Director Director Director

Gaurav Khosla Surendra Silwal Pramod Kumar Karki Puneet Varshney

Director Director Independent Director Chief Executive Officer
As per our attached report of even date

Ashok Mandal
Finance Controller B.K. Agrawal, FCA
Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

BOTTLERS NEPAL (TERAI) LIMITED

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BOTTLERS NEPAL (TERAI) LIMITED

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DIRECTOR’S REPORT AND

FINANCIAL REPORT OF
TROIKA TRADERS PRIVATE LIMITED
2074-75 (2017-18)

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DIRECTOR’S REPORT
(For the Year 2074-2075) of NPR 25 Million, which is 400% more compared with
previous Fiscal Year 2073/74.
Dear Shareholders,
(d) Industrial or Professional Relations of the
We are delighted to present the Report on tyour Company’s Company;
business operations, along with the audited financial During the year, the relationship of the Company with its
statements, for the year ended 32nd Ashad, 2075. This has been employees was harmonious resulting in no strike.
another remarkable year with success in terms of business
growth and value creation for its treasured stakeholders. (e) Alterations in the Board of Directors and the
reasons therefore:
(a) Review of the transactions of the Previous Year: Mr. Sumit Goyal and Mr. Rajnish Sharma’s nomination was
NPR Million withdrawn by Bottlers Nepal Limited and in their place,
Ms. Pratima Burma and Mr. Ashok Mandal was appointed
Particulars 2074-75 2073-74 % Change
as a Director w.e.f 31st July, 2018.
Gross Sales 394 447
-12%
Revenue
(f) Major things affecting the transactions;
Gross Profit 74 29 155% As mentioned in Section (b).
Net Profit 25 5
400%
Before Tax (g) If there are any remarks in the Audit Report, the
Net Profit After 19 3 comments of the Board of Directors on such
533%
Tax remarks;
None
(b) Impact, if any, caused on the transactions of
the Company from National & International (h) Amount recommended for payment by way of
Situations; Dividend;
None
Global:
The global economic scenario continued to remain (i) In the event of forfeiture of shares, details
volatile across different geographies. The Group is regarding the number of forfeited shares, face
presently operating in an increasingly dynamic economic value of such shares, total amount received by the
environment. Crude Oil Price internationally is on Company for such shares prior to the forfeiture
increasing trend, which has impacted cost of energy and thereof, proceeds of sale of such shares after the
transportation. forfeiture thereof, and refund of amount, if any,
made for such forfeited shares;
Nepal NIL
The Government has recently implemented Finance Bill,
2075. This has consequently increased government
TROIKA TRADERS PRIVATE LIMITED

(j) Progress of transactions of the Company in the

taxes & duties, which has significantly increased excise previous financial year and review of the situation
duty in carbonated soft drinks and juices. Furthermore, existing at the end of that financial year;
the country witnessed high depreciation of the currency As mentioned above in Point No. a & b
against the US dollar, which has impacted imports.
(k) Major transactions completed by the Company)
(c) Achievements in the current fiscal year as at in the financial year and any material changes
the date of report & opinions of the Board of taken place in the transaction of the Company
Directors on matters to be done in the future; during that period;
During the year under review, your Company was able to None. Your Company does not have any subsidiary
achieve a gross sales revenue of NPR 394 MM as against Company.
the previous year’s figure of NPR. 447 MM recording a
growth -12%. The company has made profit before tax

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(l) Disclosures made by the substantial shareholders Your Company is not required to form an Audit Committee
of the Company to the Company in the previous pursuant to the Companies Act 2006 (2063).
financial year;
None (s) Amount, if any, outstanding & payable to the
Company by any director, managing director,
(m) Details of shareholding taken by the directors and chief executive, substantial shareholders or,
officers of the Company in the previous financial his/her close relative or, by any firm, company,
years and, in the event of their involvement in corporate body in which he/she is involved;
share transaction of the Company, details of None
information received by the Company from them
in that respect; (t) Amount of remuneration, allowances & facilities
None paid to the directors, managing director, Chief
Executive Officer
(n) Details of disclosures made about the personal None
interest of any director and his / her close relative
in any agreement related with the Company (u) Amount of Dividends remaining unclaimed by
during the previous financial year; the shareholders;
None. None.

(o) In the event that the Company has bought its (v) Details of sale and purchase of properties
own shares (buy-back), the reasons for such pursuant to Section-141:
buy-back, number & face value of such shares, None
and amount paid by the Company for such buy-
back;
(w) Details of transactions carried on between the
None
Associated Companies pursuant to Section-175;
None
(p) Whether there is an internal control system in
place or not and, details of such system, if it is in
(x) Any other matters required to be laid out in the
place;
report of Board of directors under this Act and
Your Company has an efficient and robust system of
the prevailing laws;
internal controls in place. These controls include internal
None
checks and audits, along with financial and other control,
which is required to carry on the business smoothly and
lawfully, whilst safeguarding your Company’s assets in a (y) Other necessary matters;
secure, practical, accurate and reliable manner. i. Information (if any) regarding any fines paid by any
directors, officers or shareholders of the Company to OCR
in violation of Sec. 82 of the Act including information
(q) Details of total management expenses during
about the amount paid.
the previous financial years; TROIKA TRADERS PRIVATE LIMITED
Particulars(FY 2074/75) NPR Million None
Salaries, wages and other employee
-
costs On behalf of the Board of Directors,
Administrative expenses 2.26
Total 2.26 ________________ ________________
Mr. Ashok Mandal Ms. Pratima Burma
(r) Name list of the members of Audit Committee, Director Director
remuneration, Allowances and facilities received
by them, details of the functions performed Date:
by that committee, and details of suggestions, if
any, made by that committee;

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TROIKA TRADERS PRIVATE LIMITED

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TROIKA TRADERS PRIVATE LIMITED

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TROIKA TRADERS PRIVATE LIMITED

STATEMENT OF FINANCIAL POSITION
As at Ashad 32nd, 2075 (July 16th, 2018)
Figures in NPR
As at 32nd Ashad As at 31st Ashad
Particulars Note
2075 2074
ASSETS
Current Assets
Inventories 3 89,649,584 78,372,271
Non Financial Current Assets
Prepayments 4.1 2,882,084 1,888,160
Financial Assets
Other Current Assets 4.2 30,840,138 13,299,299
Trade Receivables 5 620,064 13,912,942
Cash and Cash Equivalents 6 19,941,597 316,616
Total Assets 143,933,467 107,789,288
EQUITY AND LIABILITIES
Equity
Equity Share capital 7 750,000 750,000
Reserve and Surplus 8 42,982,837 23,932,510
Current Liabilities
Financial Liabilities
Trade Payables 9 98,254,538 81,110,690
Other Financial Liabilities 10 1,946,092 1,996,088
Total Equity and Liabilities 143,933,467 107,789,288

Notes 1 to 22 form integral part of this Financial Statements.

For & on behalf of Board

Ashok Mandal Pratima Burma

Director Director

As per our attached report of even date

TROIKA TRADERS PRIVATE LIMITED

B.K. Agrawal, FCA

Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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TROIKA TRADERS PRIVATE LIMITED

STATEMENT OF PROFIT OR LOSS
For the year ended 32nd Ashad, 2075 (July 16th, 2018)

Figures in NPR
For the year For the year
Particulars Note
2074-75 2073-74
Revenue from Operations 11 331,975,214 379,884,674
Cost of Sales 12 (257,845,121) (351,067,006)
Gross Profit 74,130,093 28,817,668
Selling and distribution expenses 13 (45,885,300) (22,051,282)
Administrative and operating expenses 14 (2,262,677) (1,590,511)
Profit from Operations 25,982,116 5,175,875
Finance Costs 15 (596,794) -
Finance Income 16 15,114 -
Profit Before Tax 25,400,436 5,175,875
Income Tax Expense
Current Tax 17 (6,350,109) (1,680,429)
Net Profit for the year 19,050,327 3,495,446
Basic/Diluted Earnings per share 18 2,540 466

Notes 1 to 22 form integral part of this Financial Statements.

For & on behalf of Board

Ashok Mandal Pratima Burma

Director Director

As per our attached report of even date

B.K. Agrawal, FCA

Managing Partner TROIKA TRADERS PRIVATE LIMITED
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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TROIKA TRADERS PRIVATE LIMITED

STATEMENT OF OTHER COMPREHENSIVE INCOME
For the year ended 32nd Ashad, 2075 (July 16th, 2018)
Figures in NPR
For the year For the year
Particulars
2074-75 2073-74
Net Profit for the year as per statement of Profit or Loss 19,050,327 3,495,446
Items that will not be reclassified to Statement of Profit or
Loss
Actuarial Gain/(Loss) on defined benefit plan schemes -
Deferred Tax on Actuarial Gain - -
Other comprehensive gain/(loss) for the year, net of tax - -
Total Comprehensive gain/(loss) for the year, net of tax 19,050,327 3,495,446

For & on behalf of Board

Ashok Mandal Pratima Burma

Director Director

As per our attached report of even date

B.K. Agrawal, FCA

Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018
TROIKA TRADERS PRIVATE LIMITED

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TROIKA TRADERS PRIVATE LIMITED

STATEMENT OF CASH FLOW
For the year ended 32nd Ashad, 2075 (July 16th, 2018)

Figures in NPR
For the year For the year
Particulars
2074-75 2073-74
(A) CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the year 25,400,436 5,175,875
Adjustments for non cash and non operating: - -
Working capital adjustments:
Increase / (Decrease) in trade payable and other liabilities 21,245,929 18,038,604
Decrease / (Increase) in trade and other receivables (4,247,961) 14,671,593
Decrease / (Increase) in loans and advances (993,924) (632,194)
Decrease / (Increase) in inventories (11,277,313) (45,362,745)
Cash generated from operations 30,127,167 (8,108,867)
Direct taxes paid (net of refunds) (10,502,187) (2,499,425)
NET CASH FLOWS FROM OPERATING ACTIVITIES (A) 19,624,981 (10,608,292)
(B) CASH FLOWS FROM / (USED IN) INVESTING
ACTIVITIES
NET CASH FLOWS FROM INVESTING ACTIVITIES (B) - -
(C) CASH FLOWS FROM FINANCING ACTIVITIES
NET CASH FLOWS FROM FINANCING ACTIVITIES (C ) - -
INCREASE/(DECREASE) IN CASH AND CASH
19,624,981 (10,608,292)
EQUIVALENTS (A+B+C)
CASH AND CASH EQUIVALENTS,
Beginning of Year 316,616 10,924,908
CASH AND CASH EQUIVALENTS, End of Period 19,941,597 316,616

For & on behalf of Board

Ashok Mandal Pratima Burma TROIKA TRADERS PRIVATE LIMITED

Director Director

As per our attached report of even date

B.K. Agrawal, FCA

Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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TROIKA TRADERS PRIVATE LIMITED

STATEMENT OF CHANGES IN EQUITY
For the year ended 32nd Ashad, 2075 (July 16th, 2018)
Figures in NPR
Securities
Particulars Share Capital Retained Earnings Total
Premium Reserve
Balance as at 1st Shrawan 2074 750,000 23,932,510 24,682,510
Restated Balance 750,000 - 23,932,510 24,682,510

Profit for the year 19,050,327 19,050,327

Balance as at 32nd Ashad 2075 750,000 - 42,982,837 43,732,837

For & on behalf of Board

Ashok Mandal Pratima Burma

Director Director

As per our attached report of even date

B.K. Agrawal, FCA

Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018
TROIKA TRADERS PRIVATE LIMITED

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1. CORPORATE INFORMATION
Troika Traders Pvt. Ltd. (“Company”) is a private limited Company incorporated under the Companies Act of Nepal. The
registered office of the Company and the principal place of business is located at Balaju Industrial District, Balaju, Kathmandu,
Nepal.
Troika Traders Pvt. Ltd is a licensed distributor of non-alcoholic beverages products of The Coca-Cola Company, Atlanta. The
Board of Directors has approved the financial statements for issue on its meeting held on 21st August 2018 (5th Bhadra 2075)
and has recommended for approval of shareholders in the Annual General Meeting.

2. BASIS OF PREPARATION
The financial statements have been prepared in accordance with the Nepal Accounting Standards (NAS) issued by the Accounting
Standards Board Nepal. These confirm, in material respect, to Nepalese Financial Reporting Standards (NFRS) issued by the
Accounting Standards Board Nepal (ASB). The financial statements have been prepared on a going concern basis. The term
NAS, which includes all the standards and the related interpretations is consistently used.
This section describes the critical accounting judgement that the company has identified as having potentially material impact
on the company’s financial statements and sets out our significant accounting policies that relate to the financial statements as a
whole. Accounting policies along with explanatory notes, wherever such explanation is required, is described in specific relevant
sections. The company’s accounting policies require the management to exercise judgement in making accounting estimates.

2.1 Accounting Pronouncements

The company for its preparation of financial statement has adopted accounting policies to comply with the pronouncements
made by The Institute of Chartered Accountants of Nepal.

2.2 Accounting Convention

The financial statements are prepared on a historical cost basis except for certain financial and equity instruments that are
measured at fair value.

2.3 Presentations
The financial statements are prepared in Nepalese Rupees and rounded off to the nearest rupee. The figures for previous years
are rearranged and reclassified wherever necessary for the purpose of facilitating comparison. Appropriate disclosures are
made wherever necessary.
The Company presents assets and liabilities in statement of financial position based on current/non-current classification. The
Company classifies an asset as current when it is:
• Expected to be realized or intended to sold or consumed in normal operating cycle,
• Held primarily for the purpose of trading
• Expected to be realized within twelve months after the reporting period or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after
the reporting period
All other assets are classified as non-current.
The Company classifies a liability as current when it is: TROIKA TRADERS PRIVATE LIMITED
• Expected to be settled in normal operating cycle
• Held primarily for the purpose of trading
• Due to be settled within twelve months after the reporting period or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets/liabilities. Net defined benefit obligation is also classified
as not current liabilities.
The company operating cycle has been defined as twelve-month period.
The statement of profit or loss has been prepared using classification ‘‘by function’’ method.
The statement of cash flows has been prepared using indirect method. Cash flows from operating activities, in addition to the
adjustments from profit for non-cash and non-operating activities, movements in working capital, interest and taxes, separately
include cash flows relating to employee bonus and retirement benefits.

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2.4 Accounting Policies

NAS requires adoption of accounting policies that are most appropriate to the company’s circumstances determining and
applying accounting policies. Directors and management are required to make judgement in respect of items where the choice
of specific policy, accounting estimate or assumption to be followed could materially affect the company’s reported financial
position, results or cash flows.
Specific accounting policies have been included in the specific section of the notes for each items of financial statements which
requires disclosures of accounting policies or changes in accounting policies. Effect and nature of the changes have been
disclosed.

2.5 Accounting Estimates

The preparation of financial statements in line with NAS which requires management to make judgments, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent assets
and liabilities at the date of financial statements.
The estimates and the underlying assumptions are reviewed on ongoing basis. Although these estimates are based on
management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result
in the outcomes requiring
a material adjustment to the carrying amount of assets or liabilities in future periods. The estimates are reviewed periodically
by the management.
Specific accounting estimates have been included in the relevant section of the notes wherever the estimates have been applied
along with the nature and effect of changes of accounting estimates, if any.

2.6 Financial periods

The company prepares financial statements in accordance with the Nepalese financial year using Nepalese calendar. The
corresponding dates for Gregorian calendar are as follows:

Particulars Nepalese Calendar Date / Period Gregorian Calendar Date / Period

SFP* Date 32nd Ashad 2075 16th July 2018
Current Reporting Period 1st Shrawan 2074 – 32nd Ashad 2075 16th July 2017 – 16th July 2018
Comparative SFP* Date 31st Ashad 2074 16th July 2017
Comparative reporting period 1st Shrawan 2073 – 31st Ashad 2074 16th July 2016 – 15th July 2017

*Statement of Financial Position

2.7 Presentation currency

The company’s financial statement is presented in Nepalese Rupees which is also the company’s functional currency.

3. INVENTORIES
Figures in NPR
TROIKA TRADERS PRIVATE LIMITED

Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074

Finished goods 89,649,584 78,372,271
Total 89,649,584 78,372,271

Inventories are carried at the lower of cost or net realizable value.

Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and
the necessary estimated expenses. The cost of obsolescence and other anticipated losses are also considered for determining
the net realizable values. Inventories are valued on (First in First Out) FIFO basis.

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4. OTHER ASSETS

4.1 Prepayments
These are expenses paid for the period beyond the financial period covered under the financial statement. These will be
charged off as expenses in the respective period for which such expenses pertain to.

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Prepaid Expenses 2,882,084 1,888,160
Total 2,882,084 1,888,160

4.2 Other Current Assets

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Advance to suppliers 15,999,964 10,564,268
VAT Receivable (Net) 7,953,065 -
Balances with statutory/government authorities 1,529,000 1,529,000
Advance Income Tax (Net) 5,358,109 1,206,031
Total 30,840,138 13,299,299

Financial Instruments: Financial Assets

Financial asset is any asset that is:
(a) cash
(b) an equity instrument of another entity;
(c) a contractual right:
i) to receive cash or another financial asset from another entity; or
ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially favorable to
the entity; or
(d) a contract that will or may be settled in the entity’s own equity instruments and is:
(i) a non-derivative for which the entity is or may be obliged to receive a variable number of the entity’s own equity
instruments; or
(ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset
for a fixed number of the entity’s own equity instruments.
TROIKA TRADERS PRIVATE LIMITED
Financial assets are classified under four categories as required by NAS 39, namely,
• Fair Value through Profit or Loss,
• Held to Maturity,
• Loans & Receivables and
• Available for Sale.
The company only holds financial assets meeting the recognition criteria of Loans & Receivables classification. These instruments
are to be recognized at amortized cost using effective interest rate.
Financial assets of the company comprise of advances, other current assets and cash & cash equivalents. These instruments are
mostly non-interest bearing and where interest component is present the implicit interest rate approximates effective interest
rate. These instruments are expected to be settled or recovered within a year. Therefore, it is assumed that the carrying amount
represents the amortized cost of the assets.

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Risks associated with Financial Instrument- Financial Assets

The company has a risk management framework to monitor, access, mitigate and manage risks. This risk management framework
is given in Note 22.

5. TRADE RECEIVABLE
Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Receivables from related parties 527,087 9,839,328
Other receivables 92,977 4,073,614
Total 620,064 13,912,942

5.1 Related Parties Transaction

It includes transactions with group companies which are disclosed in Note 21.

5.2 Impairment
For allowances, assets with a potential need for a write-down are grouped together on the basis of similar credit risk
characteristics, tested collectively for impairment, and written-down, if necessary. Estimated irrecoverable amounts are based
on the ageing of the receivable balances, taking previous cases of default into consideration and historical experiences.

6. CASH AND CASH EQUIVALENTS

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Balances with Banks
– On current accounts 19,641,597 16,616
– Deposits accounts 300,000 300,000
Total 19,941,597 316,616

The above balances are also considered as the cash & cash equivalents for Statement of Cash Flow purposes.

7. SHARE CAPITAL
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Number NPR Number NPR
TROIKA TRADERS PRIVATE LIMITED

Authorized
Ordinary shares of Rs. 100 each 50,000 5,000,000 50,000 5,000,000
Issued
Ordinary shares of Rs. 100 each 25,000 2,500,000 25,000 2,500,000
Paid Up
Ordinary shares of Rs. 100 each 7,500 750,000 7,500 750,000
At the beginning of the year 7,500 750,000 7,500 750,000
At the end of the year 7,500 750,000 7,500 750,000

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The shareholding pattern on the company is as follows

Shareholder Category As at 32nd Ashad 2075 As at 31st Ashad 2074

No. of Shares % of holding No. of Shares % of holding
Bottler's Nepal Limited 7,500 100% 7,500 100%
Total 7,500 100% 7,500 100%

Share issue expenses have not been netted off against capital collected as these pertain to periods of initial establishment of the
company and such expenses have been charged off during those periods. The management considers that the cost of obtaining
information is more than the benefits derived and the effect of such amounts to be immaterial.

8. RESERVE AND SURPLUS

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Retained earnings 42,982,837 23,932,510
(As per Statement of Changes in Equity)
Total 42,982,837 23,932,510

9. TRADE PAYABLES
Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Trade Payable 68,959,017 69,647,225
Trade Payable to related parties 29,295,521 11,463,465
Total 98,254,538 81,110,690

Financial Instruments – Financial Liabilities

A financial liability is any liability that is:
a) contractual obligation: TROIKA TRADERS PRIVATE LIMITED
(i) to deliver cash or another financial asset to another entity; or
(ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable
to the entity; or
(b) a contract that will or may be settled in the entity’s own equity instruments and is:
(i)   a non-derivative for which the entity is or may be obliged to deliver a variable number of the entity’s own equity
instruments; or
(ii)  a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset
for a fixed number of the entity’s own equity instruments.

The company classifies financial liabilities as Fair Value through Profit or Loss and those Held at Amortized Cost. All financial
liabilities held by the company are classified as financial liabilities held at amortized cost using effective interest rate.

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Financial liabilities held by the company are both interest bearing and non-interest bearing.
The non-interest bearing instruments’ carrying value represents the amortized cost.

Risks associated with Financial Instrument- Financial Liabilities

The company has a risk management framework to monitor, access, mitigate and manage risks. This risk management
framework is given in Note 22.

10. OTHER FINANCIAL LIABILITIES

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Statutory dues payable 225,968 886,207
Advance received from distributors 1,720,124 -
VAT Payable (Net) - 1,109,881
Total 1,946,092 1,996,088

Provisions are recognized when the company has a present obligation, legal or constructive, as a result of a past event, it is
probable that a transfer of economic benefits will be required to settle the obligation and when reliable estimate can be made
of the amount of obligation. If these conditions are not met, no provision is recognized.
The amount of provision recognized is the management’s best estimate of expenditure required to settle the present obligation
at the reporting date.

Changes in Provision
Management reviews provisions at each reporting date and is adjusted to reflect the best estimate. If it is no longer probable
that a transfer of economic benefits will be required to settle the obligation, the provision is reversed.

11. REVENUE
Figures in NPR
Particulars For the year 2074-75 For the year 2073-74
Sale of goods 349,280,828 395,880,059
Less: Discount (17,305,614) (15,995,385)
Total 331,975,214 379,884,674
TROIKA TRADERS PRIVATE LIMITED

11.1 Sale of Goods

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue
and associated costs incurred or to be incurred can be reliably measured and when recognition criteria related to sale of goods
activities i.e when the significant risks and rewards of ownership of the goods have transferred to the buyer, with the Company
retaining neither continuing managerial involvement to the degree usually associated with ownership, nor effective control over
the goods sold.
Revenue is measured at the fair value of the consideration received or receivable net of trade discounts. Revenue include all
revenue from ordinary activities of the company that are recorded net off Value Added Taxes collected from the customer that
are remitted or are to be remitted to the government authorities.
The company generates revenue from sale of goods in the ordinary course of business.

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12. COST OF SALES

Figures in NPR
Particulars For the year 2074-75 For the year 2073-74
Finished goods stock
At 1st Shrawan 78,372,271 33,009,526
Purchase 269,122,434 396,429,751
At 32nd Ashad (89,649,584) (78,372,271)
Net change in finished goods stock 257,845,121 351,067,006
Cost of sales 257,845,121 351,067,006

13. SELLING AND DISTRIBUTION EXPENSES

Figures in NPR
Particulars For the year 2074-75 For the year 2073-74
Freight Charges 9,650,498 12,072,924
Liquid leakages and damages 32,385,775 8,268,318
Rent 3,849,027 1,710,040
Total 45,885,300 22,051,282

14. ADMINISTRATIVE AND OPERATING EXPENSES

Figures in NPR
Particulars For the year 2074-75 For the year 2073-74
Travel and transport costs - 1,800
Office expenses 728,711 820,163
Legal and other professional fees 1,257,688 319,000
Bank charges 236,278 409,548
Audit fees 40,000 40,000
Total 2,262,677 1,590,511

TROIKA TRADERS PRIVATE LIMITED

14.1 Audit Fees Disclosure
Figures in NPR
Particulars For the year 2074-75 For the year 2073-74
Statutory Audit Fee 40,000 40,000
Total 40,000 40,000

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15. FINANCE COST

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Interest on Overdraft 596,794 -
Interest on Term Loan - -
Total 596,794 -

16. FINANCE INCOME

Figures in NPR
Particulars For the Year 2074-75 For the Year 2073-74
Interest income 15,114 -
Total 15,114 -

17. INCOME TAXES

17.1 Current Income Tax

Figures in NPR
Particulars For the year 2074-75 For the year 2073-74
Current tax on profits for the year 6,350,109 1,293,969
Adjustment for under provision in prior periods - 386,460
Total 6,350,109 1,680,429

17.2 Reconciliation
Reconciliation of tax profit and the accounting profit: -
Figures in NPR
Particulars For the year 2074-75 For the year 2073-74
Accounting profit before income tax 25,400,436 5,175,875
Adjustment as per Income Tax Act 2058 - -
Total profit as per Income Tax 25,400,436 5,175,875
Tax Rate 25% 25%
TROIKA TRADERS PRIVATE LIMITED

Tax Expenses 6,350,109 1,293,969

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18. EARNINGS PER SHARE

Figures in NPR
Particulars As at 32nd Ashad 2075 As at 31st Ashad 2074
Numerator
Profit for the year and earnings used in basic EPS 19,050,327 3,495,446
Denominator
Weighted average number of shares used in basic EPS 7,500 7,500
Basic/Diluted earnings per share 2,540 466

Basic EPS is calculated by dividing the profit attributable to ordinary equity holders of the company for the period by the
weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares.
Number of shares have not changed over the reported periods. There are no potential ordinary shares that would dilute basic
earnings per share, hence diluted EPS is same as basic EPS.

19. CONTINGENT LIABILITIES AND CAPITAL COMMITMENT

19.1 Contingent Liabilities
Contingent liabilities are potential future cash out flows, where the likelihood of payment is considered more than remote, but
is not considered probable or cannot be measured reliably.

19.1.1 Bank Guarantee

Bank Guarantee has been provided to the department of Customs for obtaining EXIM Code.

19.1.2 Corporate Tax Matters

LTO assessed the income tax, TDS and VAT liabilities of the company for the year 2069-70. For the unaccepted amount, the
company has filed the case for Administrative Review. Pending decision from the Director General, additional liabilities have not
been recognized in the financial statements and is disclosed as contingent liabilities as below: -
      Figures in NPR
Particulars Additional Demand Accepted amount Appeal against demand
Income-Tax 4,684,602 - 4,684,602
VAT 1,974,572 - 1,974,572

20. SEGMENT REPORTING

The Company has only one “business segment” i.e. dealing in “non-alcoholic beverage”. The non-alcoholic beverage business TROIKA TRADERS PRIVATE LIMITED
mainly consists of products like carbonated soft drinks in different flavors, fruit pulp  based beverages and water. All these
products have similar risks and returns because of similar nature of products, common consumer segments, similar production
processes and common distribution channel. Further, internal organizational and management structure and its system of
internal financial reporting of the Company is not based on product or geographical differentiation.

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21. RELATED PARTY TRANSACTIONS

21.1 Relationship
The company identified related parties on the following lines
1. Part of the Group
a. Parent company, ultimate parent
b. Other Subsidiaries of the parent / ultimate parent
c. Subsidiaries of the company
2. Directors and their relatives
The Company is controlled by Bottlers Nepal Limited which owns 100% of the company’s share.

21.1.1 Transactions with Directors & Key Management Personnel

During the year neither any directors nor any key management personnel nor any associate or family member (relative) of the
directors and key management personnel was indebted to the company.
There are no material transactions or proposed transactions with directors and key management personnel or their relatives
and associates.

21.2 Other Related Party Transaction and Balances

Figures in NPR
Related Party Transactions For the year 2074-75 For the year 2073-74
Amounts owed to related parties:
Bottlers Nepal Limited 29,295,521 11,463,465
Amounts owed by related parties:
Bottlers Nepal (Terai) Limited 527,087 9,839,329

Terms and conditions of transactions with related parties

Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no
guarantees provided or received for any related party receivables or payables. For the year ended 16th July 2018, the Company
has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken
each financial year through examining the financial position of the related party and the market in which the related party
operates.

22. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is
to finance the Company’s operations. The Company’s principal financial assets comprise trade and other receivables, and cash
and short-term deposits that arrive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk.
TROIKA TRADERS PRIVATE LIMITED

The Company’s senior management oversees the management of these risks.

The Board of Directors reviews and agrees policies for managing each of these risks which are summarized below.

22.1 Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market
prices. Market prices comprise four types of risk: interest rate risk, currency risk, commodity price risk and other price risk, such
as equity price risk. Financial instruments affected by market risk include loans and borrowings and deposits.

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22.1.1 Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s
short term deposits.
The Company manages its interest rate risk by negotiating with highly reputed commercial banks.

22.1.2 Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the
Company’s operating activities (when revenue or expense is denominated in a different currency from the Company’s functional
currency).
The Company manages its foreign currency risk by not holding the receivables and payables in foreign currencies for longer
duration.

22.1.3 Commodity price risk

The Company is affected by the volatility of certain commodities. Its operating activities require the ongoing purchase of raw
materials and therefore require a continuous supply of the same.
The Company manages this risk by purchasing materials and supplies from the supplier identified by the group and the Company
has long term relation with the supplier.

22.2 Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss. The Company is exposed to credit risk from its operating activities (primarily for trade receivables) and from
its financing activities, including deposits with banks and financial institutions.

22.2.1 Trade receivables

Customer credit risk is managed by the Company’s established policy, procedures and control relating to customer credit
risk management. Credit quality of the customer is assessed and individual credit limits are defined in accordance with this
assessment.
Outstanding customer receivables are regularly monitored and shipments to major customers are generally covered by bank
guarantees.

22.2.2 Cash deposits

Credit risk from balances with banks and financial institutions are managed by maintaining the balances with highly reputed
Commercial banks only.

22.3 Liquidity risk

The Company monitors its risk to a shortage of funds on a regular basis through cash forecast.
The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts
and bank loans. Access to sources of funding is sufficient.
TROIKA TRADERS PRIVATE LIMITED

For & on behalf of Board

Ashok Mandal Pratima Burma

Director Director

As per our attached report of even date

B.K. Agrawal, FCA

Managing Partner
B.K. Agrawal & Co.
Place: Kathmandu, Nepal Chartered Accountants
Date: 5th Bhadra, 2075 (21st August, 2018) 26th August, 2018

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NOTES

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NOTES

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NOTES

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BOTTLERS NEPAL LIMITED
P.O. Box No. 2253
Balaju Industrial District
Balaju, Kathmandu, Nepal
Tel: +977-1-4360602, 4351871
Fax: +977-1-4350227