PepsiCo India is striding ahead rapidly towards enabling the global vision to be

the world's premier consumer products company focused on convenience foods and

beverages. PepsiCo India seeks to produce healthy financial rewards for investors as it

provide opportunities for growth and enrichment to its employees, business partners

and the communities in which it operates.

PepsiCo Mission

"To be the world's premier consumer products company focused on

convenience foods and beverages. We seek to produce healthy financial rewards to

investors as we provide opportunities for growth and enrichment to our employees, our

business partners and the communities in which we operate. And in everything we do,

we strive for honesty, fairness and integrity."

Corporate Profile

PepsiCo In India 

PepsiCo entered India in 1989 and has grown to become one of the country’s

leading food and beverage companies. One of the largest multinational investors in the

country, PepsiCo has established a business which aims to serve the long term dynamic

needs of consumers in India.

PepsiCo India and its partners have invested more than U.S.$1 billion since the

company was established in the country. PepsiCo provides direct and indirect

employment to 1,50,000 people including suppliers and distributors.

PepsiCo nourishes consumers with a range of products from treats to healthy

eats, that deliver joy as well as nutrition and always, good taste. PepsiCo India’s

expansive portfolio includes iconic refreshment beverages Pepsi, 7 UP, Mirinda and

Mountain Dew, in addition to low calorie options such as Diet Pepsi, hydrating and

nutritional beverages such as Aquafina drinking water, isotonic sports drinks -

Gatorade, Tropicana100% fruit juices, and juice based drinks – Tropicana Nectars,

Tropicana Twister and Slice. Local brands – Lehar Evervess Soda, Dukes Lemonade and

Mangola add to the diverse range of brands.

PepsiCo’s foods company, Frito-Lay, is the leader in the branded salty snack

market and all Frito Lay products are free of trans-fat and MSG. It manufactures Lay’s

Potato Chips, Cheetos extruded snacks, Uncle Chipps and traditional snacks under the

Kurkure and Lehar brands. The company’s high fibre breakfast cereal, Quaker Oats, and

low fat and roasted snack options enhance the healthful choices available to consumers.

Frito Lay’s core products, Lay’s, Kurkure, Uncle Chipps and Cheetos are cooked in Rice

Bran Oil to significantly reduce saturated fats and all of its products contain voluntary

nutritional labeling on their packets.

The group has built an expansive beverage and foods business. To support its

operations, PepsiCo has 43 bottling plants in India, of which 15 are company owned

and 28 are franchisee owned. In addition to this, PepsiCo’s Frito Lay foods division has

3 state-of-the-art plants. PepsiCo’s business is based on its sustainability vision of

making tomorrow better than today. PepsiCo’s commitment to living by this vision every

day is visible in its contribution to the country, consumers and farmers.

Performance With Purpose

Performance with Purpose articulates PepsiCo India's belief that its businesses

are intrinsically connected to the communities and world that surrounds it. Performance

with Purpose means delivering superior financial performance at the same time as we

improve the world.

To deliver on this commitment, PepsiCo India will build on the incredibly strong

foundation of achievement and scale up its initiatives while focusing on the following 4

critical areas that have a business link and where we believe that we can have the most

impact.

Organizational Values

Our Commitment

Sustained Growth is fundamental to motivating and measuring our success. Our

quest for sustained growth stimulates innovation, places a value on results, and helps us

understand whether today's actions will contribute to our future. It is about growth of

people and company performance. It prioritizes making a difference and getting things

done.

Empowered People means we have the freedom to act and think in ways that we

feel will get the job done, while being consistent with the processes that ensure proper

governance and being mindful of the rest of the company's needs.

Responsibility and Trust form the foundation for healthy growth. It's about

earning the confidence that other people place in us as individuals and as a company.

Our responsibility means we take personal and corporate ownership for all we do, to be

good stewards of the resources entrusted to us. We build trust between ourselves and

others by walking the talk and being committed to succeeding together.

Guiding Principles

This is how we carry out our commitiment. We must always strive to:

Care for customers, consumers and the world we live in. We are driven by an

intense, competitive spirit in the marketplace, but we direct this spirit toward solutions

that achieve a win for each of our constituents as well as a win for the corporation. Our

success depends on a thorough understanding of our customers, consumers and

communities. Caring means going the extra mile. Essentially, this is a spirit of growing

rather than taking.

Sell only products we can be proud of. The test of our standards is that we must

be able to personally endorse our products without reservation and consume them

ourselves. This principle extends to every part of the business, from the purchasing of

ingredients to the point where our products reach the consumer's hands.

Speak with truth and candor. We speak up, telling the whole picture, not just

what is convenient to achieving individual goals. In addition to being clear, honest and

accurate, we take responsibility to ensure our communications are understood.

Balance short term and long term. We make decisions that hold both short-term

and long-term risks and benefits in balance over time. Without this balance, we cannot

achieve the goal of sustainable growth.

Win with diversity and inclusion. We leverage a work environment that

embraces people with diverse backgrounds, traits and different ways of thinking. This

leads to innovation, the ability to identify new market opportunities, all of which helps

develop new products and drives our ability to sustain our commitments to growth

through empowered people.

Respect others and succeed together. This company is built on individual

excellence and personal accountability, but no one can achieve our goals by acting

alone. We need great people who also have the capability of working together, whether

in structured teams or informal collaboration. Mutual success is absolutely dependent

on treating everyone who touches the business with respect, inside and outside the

company. A spirit of fun, our respect for others and the value we put on teamwork

make us a company people enjoy being part of, and this enables us to deliver world-

class performance.

PepsiCo’s global commitment to Performance with Purpose

PepsiCo believes that its performance is fundamentally connected to its purpose agenda which represents the commitment to give back as the company grows. It is a continuing journey that spans three major areas of focus – human, environmental and talent sustainability.

Human Sustainability reflects PepsiCo’s goal of nourishing consumers with

products that range from treats to healthy eats. PepsiCo’s products have always offered

consumers nutrition as well as great taste. The progress that PepsiCo has made under

the Human Sustainability pillar includes reformulating some of its products to improve

their nutritional profile while launching products that reflect consumer demand for

healthier nutritious snacks and beverages. PepsiCo partners with Governments, health

officials and Non Governmental Organisations to help address obesity concerns and it

continues to provide consumers with new product choices and innovations.

Environmental Sustainability is based on PepsiCo’s commitment to strive to

replenish the resources used where possible, and minimize the impact on the

environment. PepsiCo continues to work to further reduce its water and electricity

consumption and improve its packaging sustainability. Across the world, PepsiCo has re-

used water from its processing plants and has worked with local communities to provide

access to clean water, while supporting farmers to deliver “more crop per drop.”

Talent Sustainability is founded on PepsiCo’s belief that cherishing its

extraordinary group of people is crucial to building an empowered workforce. PepsiCo

pursues diversity and creates an inclusive environment which encourages associates to

bring their whole selves to work. PepsiCo has increased female and minority

representation in the management ranks and has encouraged employees to participate

in community service activities while continuing to create rewarding job opportunities

for people with different abilities.

PepsiCo India’s Performance With Purpose

To deliver on the commitment of Performance With Purpose, PepsiCo India

continues to build on its strong foundation of achievements and scale up its initiatives

while focusing on the following 4 critical areas that are linked to its business and where

it can have the most impact.

Replenishing water

PepsiCo India continues to replenish water and aims to achieve positive water

balance by 2009, which means it is committed to saving and recharging more water than

it uses in its beverage plants.

Conserving the world's most precious asset: Water

PepsiCo is committed to minimising the impact of its business on the

environment and recognises that corporations can play a key role in using scarce

resources such as water with care and responsibility.

While agriculture utilises the bulk of fresh water in India (83%), industry uses 6%

of which the beverage industry uses but a mere 0.04%. But every drop counts, and

PepsiCo India's primary focus in its beverage and snacks plants has been on conserving

water at each stage of the manufacturing process.

Positive Water Balance

In 2003, PepsiCo India embarked on its quest to achieve positive water balance

by 2009. That means PepsiCo India will conserve, recharge, and thus replenish more

water in its plants and in its communities, than the total water it uses to manufacture

beverage products.

Reducing water debit

PepsiCo India’s efforts to achieve Positive Water Balance commenced with

initiatives across beverage manufacturing plants to ‘revalue’ water as a resource

through a comprehensive movement to conserve and optimize water usage within the

manufacturing process (or the debit side of the water balance equation).

In  the last two years alone the company has saved over 2 billion liters of water.

In-plant water recharge and harvesting

The multi-pronged approach comprises awareness, commitment and metrics,

installation of water recovery equipment and improved water management practices.

Thanks to significant contributions from our beverage plants, along with the

tremendous amount of water recycled through the starch recovery process used in our

snack plants.

Zero Water Discharge

PepsiCo India has adopted processes to treat process water before returning it to

non-potable water uses. For cooling towers, watering gardens and flushes, water is

being reused and the plants are moving towards becoming a zero discharge facility.

Harvesting water

Rain or roof water harvesting methods have become standard practice for all

PepsiCo plants in order to maintain and strengthen water reserves in the surrounding

areas. Examples consist of the Jainpur, Bazpur, Bharuch, Palakkad, Panipat and

Neelamangala plants, along along with the Frito Lay foods plants in Channo and Pune,

which harvest and collect rain water in excavated lakes and ponds while the Mamundar,

Mahul and Panipat plants use roof water harvesting to rejuvenate the surrounding

aquifers.

Strengthening water credit

Having reduced the "debit" side of the water balance equation significantly,

attention was focused on earning the "credits" to achieve Positive Water Balance. Rain

and roof water harvesting structures were constructed wherever feasible. Community

water projects were initiated, and comprehensive watershed management programmes

in partnership with TERI (The Energy Resources Institute) in diverse and challenging

geographic locations were started. Next on the agenda was the untapped potential for

significant water reductions through interventions in agriculture.

Community Projects

Providing water to surrounding communities has been another key focus area for

PepsiCo India plants in Neelamangala in Karnataka, Palakkad in Kerala, and Sangareddy

and Mamandur in Tamil Nadu. Due to acute water scarcity in these villages, thousands

of villagers had to walk a distance of 1 to 2 kms each way to collect water. With

PepsiCo's support, villagers participated and actively contributed to the construction of

taps, water tanks, bore wells and submergible pumps in their villages.

The benefits of PepsiCo's community water initiatives in these villages was

tremendous. In Mamandur and Sangareddy, the lives of more than 7,500 community

members have become considerably easier. Through the efforts of the PepsiCo Palakkad

plant, clean water was provided to more than 2,000 village members while PepsiCo's

Neelamangala plant supported rural water projects in 2 villages which covered 2,500

people in these locations

Water conservation in agriculture

Agricultural interventions are another opportune area to achieve water balance.

Over the last three years, PepsiCo India, in partnership with the Punjab Government,

has been involved in trials of direct seeding versus conventional transplantation in rice

fields. The direct seeding methodology has shown the potential to reduce water

consumption significantly.

The common method of growing Paddy is by first raising a nursery and then

manually transplanting it to a field "puddled" with three to four inches of water. As

opposed to this water intensive method, the direct seeding method sows the seeds

directly in the fields. This method results in a higher yield due to the higher seeding

density.

Over the last three years, PepsiCo India has conducted trials of various paddy

varieties in farmer's fields to validate the technology. A seeding machine which can sow

paddy seeds at a specified gap and at a uniform depth has also been developed.

Repeated direct seeding methodology trials have demonstrated water savings of 30%

(2.25 million litres/hectare). A large-scale implementation of this initiative has the

potential to achieve huge water savings. PepsiCo is working to share the results of the

direct seeding trials with more farmers. This direct seeding method is being extended to

1000 acres in 2008.

TERI-PepsiCo project in Karnataka and Uttaranchal

In 2004, PepsiCo partnered with The Energy and Resources Institute (TERI), a

scientific research organization, to study and rejuvenate local water bodies. The aim of

this project was to enhance the quality and access of water to villagers in Neelamangala,

Karnataka and around Dehradun and Mukteswar in Uttaranchal and currently recharges

300 million litres of water every year.

The results of the partnership were commendable. Currently, PepsiCo’s

community project in Karnataka provides water, health and sanitation services to 3,000

people residing in 4 villages.

Community participation played an important role in the success of the project.

Local Government bodies, community youth groups and women’s self help groups

played a critical role in the construction of 128 toilets, 5 vermin compost pits and 1

community vermin compost pit. To promote the collection of solid waste, approximately

500 dustbins have been distributed to community members.

Agricultural programmers initiated in these areas also serve to improve irrigation

systems. Drip irrigation has been implemented in farmer’s fields while a farm pond for

storing water and using it to replenish a vegetable garden is currently in the process of

being constructed. Other ongoing projects include the construction of a water recharge

structure and a rainwater harvesting structure for a school.

In addition to this, high yield cash crops and integrated pest management

systems are being promoted. Best practices on organic approaches are shared with

community members along with methods to improve moisture content of the soil. The

initiatives implemented in these communities also include public education about

sanitation and hygiene along with provision of health care facilities and health education

to improve awareness levels of community members.

To supplement these programmes in a more holistic manner, enterprise and

sustainable livelihood development is also promoted and villagers are trained in

mushroom processing while self help groups are trained in various income generation

activities to help create a viable local economy.

Besides being deeply involved in the implementation of the various community

projects, community members have also contributed financially to the ongoing work.

Progress made in Uttaranchal

In Uttarkhand, PepsiCo's partnership with TERI has been successful in

rejuvenating traditional water harvesting structures in villages. This initiative has

transformed 4 villages in Uttarkhand into model villages. The villagers have also

benefited immensely from the health and sanitation initiatives developed with the

support of PepsiCo and TERI along with a programme to promote renewable energy.

The results of this integrated watershed development programme have created a

holistic and sustainable change in the villages.

Environment Awards

PepsiCo takes pride in its achievements

PepsiCo-Exnora waste management programme in Chennai wins Environmental

Golden Peacock Award for Innovation in 2006.

PepsiCo’s Palakkad plant won Golden Peacock National Award for Environment

Management in 2005

Neelamangala plant selected for the Parisara Mithra Award for environment in

2005

PepsiCo Madurai plant won Golden Peacock National Award for Environment

Management in 2001 and 2002.

Waste to Wealth

PepsiCo India continues to convert Waste to Wealth, to make cities cleaner. This

award winning initiative has established Zero Solid Waste centres that benefit more

than 200,000 community members throughout the country.

PepsiCo-Exnora's solid waste management programme

PepsiCo India continues to strengthen its Solid Waste Management initiatives in

partnership with Exnora, an environmental NGO. This award winning, income

generating partnership currently impacts more than 1,00,000 people in Tamil Nadu,

Andhra Pradesh and Haryana will reach out to more than 2,00,000 people in 2008

Award winning Zero Waste Management Programme in Pammal, Tamil Nadu

Effective and environmentally friendly disposal of municipal waste is a major

challenge for local Government bodies. In partnership with the Government, NGOs and

community members, PepsiCo India continues to implement waste management

projects in various districts in the country.

Despite the creation of a detailed policy on Solid Waste Management and

Handling rules in 2000, very few municipalities in the country were able to completely

comply with these rules. PepsiCo India and EXNORA effectively implemented a model

project in Pammal district in Tamil Nadu that adhered to the Government policy on

waste management. The project created a visible difference in the local environment of

the region.

Implemented in a few wards of the Pammal district and impacting a population of

over 22,000, the programme imparted training on recycling waste rather than simply

relocating it. The programme involved the creation of infrastructure, usage of superior

grade EXORCO compost, recycling of plastic and steel waste, road cleaning, street

beautification, sanitation awareness programmes and a tree plantation programme that

include the concept of 'Each Child Adopt a Tree'.

Households were encouraged to segregate their bio-degradable waste from their

recyclable waste. The bio-degradable waste was converted into high quality organic

manure through the process of vermi-culture. The sale of recyclable waste provided a

stream of income to sustain the project which improved the ambience of Pammal

district.

Every aspect of the programme was built around maximum community and

Government participation which helped the programme evolve into a self sustaining

model. This unique initiative was awarded the environmental Golden Peacock Award for

Innovation in 2006 and was recognized as a model project by UNICEF in 2007.

PepsiCo-EXNORA's Zero Waste Management initiative in Pammal recognized as a

model project by UNICEF

PepsiCo-EXNORA's pioneering Zero Waste Management project in Pammal, Tamil

Nadu was selected by UNICEF as a model project and a centre for international learning

in the area of Urban Solid Waste Management.

With an aim to understand the planning, process, implementation and impact of

the program, a team of 21 UNICEF delegates from 9 countries, which consisted of

Denmark, Egypt, Zambia, Phillipines, Indonesia, Nepal, East Jerusalem, Djibouti and

Ethiopia, visited the Pammal project and recognized it as being a unique initiative which

demonstrates a strong partnership between community members, the Government,

NGOs and the corporate sector.

In 2007, UNICEF included urban solid waste management as part of its sanitation

pillar and it selected Pammal's Zero Waste Management centre as a best case study for

it team of international delegates. This prestigious recognition by UNICEF follows the

Golden Peacock Award For Innovation received by PepsiCo India and Exnora for their

partnership in this unique waste recycling program.

Recycling initiatives in Nagapattinam, Cuddalore, Tenkasi in Tamil Nadu, Sangareddy

in Andhra Pradesh and Panipat in Haryana

The inauguration of the PepsiCo India-EXNORA Zero Waste Management Project

in Nagapattinam marked the expansion of PepsiCo India and Exnora's efforts to manage

domestic solid waste in an environmentally-friendly manner.

Continuous door-to-door campaigns, rallies and street plays are carried out to

motivate people to segregate organic and inorganic garbage at source. The organic

waste is converted into compost using vermi-culture and the inorganic waste is sorted

into categories for recycling.

The innovative project not only promotes sanitary surroundings, but provides

several opportunities for micro-enterprises such as PET bottle, waste paper and tetra

pack recycling.

Along with this project in Nagapattinam, the PepsiCo Foundation also initiated

similar projects in Cuddalore and Tenkasi in Tamil Nadu, Sangareddy in Andhra Pradesh

and Panipat in Haryana.

Frito Lay’s achievements in converting waste to wealth

PepsiCo India’s foods division, Frito Lay, also generates biofuels from waste in its

plants thus reducing methane emission and 875 MT of CO2 emission annually, in

addition to achieving 14% reduction in energy use. New capacity expansion in plants

has been designed to impact further reductions in water, power and fuel.

Partnership with Farmers

PepsiCo India’s agri-partnerships with farmers help 22,000 farmers across the

country earn more.

PepsiCo India's agri-partnerships with farmers help farmers across the country grow

and earn more

PepsiCo's involvement in Indian agriculture stems from its vision of creating a

cost-effective, localised agri-base in India by leveraging farmers’ access to world class

agricultural practices. PepsiCo India worked with farmers and State Governments to

improve agri sustainability, crop diversification and raise farmer incomes. PepsiCo

helped transform the lives of thousands of farmers by helping them refine their farming

techniques and raise farm productivity, and customized solutions to suit specific

geographies and locations.

The most ambitious project is a joint programme, launched in 1989, between

PepsiCo India, the Punjab Agriculture University (PAU) in Ludhiana and Punjab Agro

Industries Corporation (PAIC) in Chandigarh. The programme focuses on evolving

agricultural practices to help Punjab farmers produce internationally competitive

products. Over the last five years, PepsiCo has also collaborated with the Thapar

Institute of Technology to develop a high quality potato seed programme.

PepsiCo was a pioneer in the concept of contract farming under which the

company transfers agricultural best practices and technology and procures the produce

at a guaranteed price. To support the initiative, PepsiCo set up a 27-acre research and

demonstration farm in Punjab to conduct farm trials of new varieties of tomato, potato

and other crops.

The programme, which includes seed production, has successfully evaluated the

following crops:

several varieties of basmati rice more than 200 varieties and hybrids of chilli

25 varieties and hybrids of corn

more than 60 varieties of peanut

more than 100 varieties and hybrids of tomato.

Additionally, the development of new tomato varieties has helped increase total

annual production of tomato varieties from 28,000 tons to over 200,000 tons in Punjab.

Yields have more than tripled from 16 tons to 54 tons per hectare.

Under the programme, 6 high-quality, high-yield potato varieties have also been

introduced to Indian farmers. These new potato seeds have helped to increase farm

income and enabled PepsiCo to procure world class chip-grade potatoes for its Frito Lay

snacks division. The company has partnered with more than 10,000 farmers working in

over 10,000 acres across Punjab, U.P., Karnataka, Jharkand West Bengal, Kashmir and

Maharashtra for the supply of potatoes. PepsiCo India has also partnered with 1,200

farmers in Rajasthan to cultivate barley in a tie up with the United Breweries Group.

PepsiCo India’s technical team also implemented a high quality seed programme to

deliver early generation and disease free seeds to farmers.

A juicy opportunity-PepsiCo Citrus Project Extending the initiative……

The PepsiCo/Tropicana and PAGREXCO (Punjab Agri Export Corporation) Citrus

Development Programme has emerged as one of the most successful models of public-

private partnerships in Indian agri-business. The Project marked a step forward in

PepsiCo’s commitment to diversification of agriculture and improving the quality of life

for farmers.

PepsiCo supported the Punjab Government on the citrus project which served

to improve the quality of life for thousands of farmers and also created a localised

supply base for citrus juice under Tropicana, the world's largest juice brand. PepsiCo

was also interested in exploring the export potential of the local produce. The project,

signed in 2002, served to deepen PepsiCo's involvement in Punjab agriculture which

started in 1989. It also marked a step forward in fulfilling its commitment to improving

the quality of life for thousands of farmers and played an integral role in introducing a

less water intensive alternative than other crops such as paddy which farmers had

previously grown.

Today, farmers can choose from 16 varieties of rootstock and 32 varieties of

citrus. This is one of the largest collections at a commercial nursery, creating a world-

class source of planting material for Punjab's farmers. This is a mutually beneficial

situation for PepsiCo and the farmers of Punjab.

PepsiCo also provided technical support and expertise to the Punjab Government

to set up two fruit processing plants in Hoshiarpur and Abohar which are prime citrus

growing areas in Punjab. Each plant is capable of processing multiple fruits, offering an

advantaged supply chain for fruit juice concentrates. Each Plant contains cold stores

with a capacity of 2400 tons for finished products. Trials have been carried out with

Kinnow, Musambi, Tomatoes, Mangoes, Melons and Strawberries.

Healthy Kids

PepsiCo India stays committed to the health and well-being of children. It will

continue to provide children with a , diverse, healthful and fun portfolio while

simultaneously tackling the 'calories out' side of the equation by expanding its Get

Active programme for kids.

PepsiCo India believes that in order to build its business in a sustainable manner,

it has a responsibility to ensure that its consumers are nourished in multiple dimensions.

PepsiCo India has been proactive in taking a variety of steps to sustain and strengthen

this platform of human sustainability.

PepsiCo's Diverse Portfolio

PepsiCo’s portfolio reflects its commitment to nourish consumers with a diverse

range of fun and healthy products, making the healthful choice an easier choice. As

PepsiCo grows, the portfolio transformation will continue with a systematic plan to

reduce added sugar, sodium and saturated fats in its products. Today, the portfolio

includes several healthier treats and some hydrating and nourishing products.

Making the healthful choice an easier choice

Tropicana 100 % juice range provides essential nutrition and vitamins. Tropicana

nectars and juice based drinks –Tropicana Twister, Slice and Slice Mangola.

Products with reduced sugar or calories such as Diet Pepsi

Gatorade, the worlds leading sports drink, has valuable re-hydration benefits and

is scientifically formulated to quench thirst, replace fluids and electrolytes and

provide carbohydrate energy.

Aquafina packaged water and bulk water.

Breakfast cereal, Quaker Oats, is rich in soluble fibre, beta-glucan, Vitamin B

complex and helps in lowering cholesterol.

Frito Lay’s core products, Lay’s, Kurkure, Uncle Chipps and Cheetos are cooked in

Rice Bran Oil to significantly reduce the saturated fat in these brands by 40%.

Frito Lay’s products are MSG and trans-fat free and contain voluntary on pack

nutritional labeling.

Cheetos Whoosh, PepsiCo's kid's range product, is made from whole grains and

vegetables, and is a good source of fibre, protein, vitamin A and has no artificial

colours, flavours or added preservatives.

Offering Portion Choices: Most of PepsiCo’s products are available in a range of

packages so consumers can select a size suited to particular occasions and dietary

needs.

Calories Out - Getting Active!

One of the ways to battle the growing issue of obesity is to tackle the 'calories

out' side of the equation by encouraging active lifestyles especially for school going

children.

Launched in 2006, Get Active is a partnership between PepsiCo India and

Swashrit Society, an NGO. The programme currently covers 1,00,000 children enrolled in

120 schools in Mumbai and Delhi.

Through the Get Active programme, PepsiCo's snack and beverage businesses

collaborate with the National Advisory Board - comprising medical practitioners,

nutritionists and public health policy experts - to work towards our vision of improving

the health and well-being of our children. The Get Active programme promotes active

lifestyles and healthy nutritional habits among children in schools.

In 2007, a Get Active seminar was organised by Swashrit to facilitate a discussion

between leading NGOs, principals and representatives from CBSE on how to incorporate

an essential balance of physical activities into school curriculums. This first of its kind

seminar reflected PepsiCo's commitment to spreading awareness and creating a holistic

network of professionals working in areas relevant to this issue.

In 2008, Get Active will cover more than 2,00,000 children in 4 metros.

Addressing Malnutrition and tackling micronutrient deficiencies in mothers and

children

In countries such as India where malnutrition is a serious issue, PepsiCo will

launch and distribute products directly aimed at addressing nutritional deficiencies.

PepsiCo will launch a pilot program that directly delivers against the United Nations’

Millennium Development Goal to eradicate extreme poverty and hunger by 2015.

Millions of people suffer physical and neurological disorders due to major

deficiencies of key micronutrients, like iron, zinc and many vitamins, which lead to

serious health problems. PepsiCo’s vision is that the fortified product created by the

company will be accessed through the company's distribution network and will be sold

in India, South Africa and over time in Nigeria.

PepsiCo partners with Swashrit Society to promote active and healthy lifestyles among

kids through the Get Active programme.

“Swashrit” is an NGO that works in the area of uplifting underprivileged children

by providing them with basic education and empowering them with better

futures. Swashrit has also been actively involved in conducting training workshops for

primary, middle and senior school children as well as teachers. These workshops have

addressed important health related issues such as stress management, holistic child

development and substance abuse prevention. The organization has also undertaken

prestigious annual projects with schools in Delhi and the NCR, such as “Save the Young

Heart”, “Obesity management” and “Get Active.”

Safety Assured

PepsiCo follows one quality standard across the globe.

PepsiCo’s soft drinks meet the local Indian standards (Health Ministry Standards

for carbonated beverages notified July 15, 2004) which compare to the best-in-class

and most stringent international standards being followed anywhere in the world.

Our products comply with the Prevention of Food Adulteration Act

(PFA) directive on the use of water in the preparation of soft drinks. We also comply

with Bureau of Indian Standards (BIS) for packaged drinking water. We use a six-stage

water purification process to deliver this standard consistently.

PepsiCo has a long-standing commitment to protecting the consumers whose

trust and confidence in its products is the bedrock of its success. In order to ensure that

consumers stay informed about the global quality of all PepsiCo products sold in India,

PepsiCo products carry a quality assurance seal on them. The ‘One Quality Worldwide’

assurance seal appears on the entire range of PepsiCo’s beverages.

Composition of a Sugar-containing Soft Drink

Water: 86-90%

Sugar: 10-13%

CO2: 0.3-0.7%

Concentrate: 0.2-0.4%

Water Quality: Incoming Water

Water accounts for the bulk of all beverages including colas. In other words, the

water used in our soft drinks must be as safe as possible for human consumption.

Every water source used for PepsiCo beverages must first be analytically

qualified, which includes using accredited laboratories to test for at least 100

parameters

At every plant, we require the incoming water to be purified even further, using a

variety of processes. At a minimum, every plant in India employs a dual back-to-back

carbon filter.

Standards for flavours and other ingredients

Our flavor concentrates, which make up less than 1% of our finished beverages,

also are diligently controlled

Each supplier must submit written verification that each lot of ingredient shipped

to our facilities meets our strict specifications

In addition to water, sugar, and flavor testing, other ingredients, including non

agricultural have been analyzed by outside laboratories

All ingredients including flavours, emulsifiers, preservatives, colors, acidulants,

anti-oxidants and low-calorie sweeteners are food grade and have been

approved by global food standards like the JECFA/CODEX, USFDA and EU

Scientific Committee for Foods. All ingredients used also conform to standards

laid out by the Prevention of Food Adulteration Act under the health ministry

Sugar

Sugar accounts for 10 to 13% of a soft drink

Sugar must meet high standards of quality, which are uniform for all of our

beverage plants across the globe. All of our sugar manufacturers must undergo

the same supplier qualification process

To add to our already high quality standards, all of our plants in India further

purify sugar with hot activated carbon and fine filtration.

Quality of sugar

At PepsiCo, sugar is bought only from approved sugar mills after a rigorous

supplier qualification process described below:

Self Assessment Perform self-assessment tool to evaluate current sugar situation and knowledge base

Paper Audit

Provide supplier with Pepsi sugar specification Get requests into from supplier:

o Type of sugaro Manufacturing flow charto Supplier's Quality process & checkpoints

Supplier submits information Quality and Procurement review supplier data & if

complete, proceed to next stage

Sample Submission

Supplier to send test sample to independent outside lab

Lab informs supplier of results Supplier shares data with Pepsi Review data & decide whether to proceed to the

next stage

On-site Audit

Audit supplier's plant Review their quality procedures Determine ability to supply COC/COA Ensure that the supplier is capable & willing to

consistently comply with the Pepsi sugar specifications

Conditional Approval

"Conditional" approval Supplier can being supplying from approved

refinery Pepsi or outside lab tests first 10 deliveries against

COA Supplier submits sample from beginning, middle

and end of session to outside lab Pepsi/supplier share results of analyses

Full Approval

" Final approval status granted after supplier has met COA requirements on 10 separate lots of sugar and has submitted sample from beginning, middle and end of production session to an outside lab and all have been approved

Maintain Approved Status

Supplier sends sample from beginning, middle and end of production season to outside lab for complete analysis

Lab informs supplier of results If sample fails, Pepsi & Supplier meet to develop

corrective action plan If problem is not solved, revocation of "Approval"

& shipments are halted

After sugar is received in the beverage plant, it is subjected to further treatment to

reduce impurities, colour, odour, and microbes to achieve PepsiCo's Global

Specifications. Note, however, that white milled sugar has no standard for pesticide

residue as it is a processed agri-product.

Carbon Dioxide

The CO2 in each bottle of Pepsi surpasses that recognised for medical

applications.

We achieve this by subjecting each supplier to a rigorous supplier

qualification process, which includes a complete audit of refineries and

testing from approved international laboratories

Further, each batch carries certificates of analysis and compliance

Once the CO2 reaches a bottling plant, it undergoes further purification

Finally…

Pepsi products are safe

We analyze our water, our sugar and our flavorings in accordance with the

best international guidelines

Our products comply with most stringent Indian and international

regulations, including the new regulations for carbonated soft drinks notified

by the Health Ministry on July 15, 2004