Message from the President & CEO

Dear Friend,
It gives me great pleasure to present to you our annual Sustainability Review for the year 2009. The report captures our efforts on environmental stewardship and community engagement during the year. We at Coca-Cola India have always believed that a sustainable business thrives only amidst sustainable communities. This simple approach is at the core of our business operations worldwide and in India. We recognize that we need to be part of the solution on global issues that threaten the communities we serve and therefore need to be focused on sustainability. This report outlines some of our efforts towards the preservation and protection of the environment, conservation of natural resources and community development. Building a culture of sustainability and social responsibility begins at home, with the people who work for our Company and our bottling partners. We have embedded our commitment to sustainability into a framework we call LIVE POSITIVELY. It is a way for us to think globally about sustainability efforts throughout the Coca-Cola system. It is a modern expression of our Company's heritage of caring about our people and our planet. LIVE POSITIVELY includes goals, metrics and principles for our work in developing beverage benefits; supporting active healthy living programs; building sustainable communities; improving environmental programs for our operations; and creating a safe, inclusive work environment for our employees. Ultimately, LIVE POSITIVELY is about all of us making the right decisions each daythe smart decisionsto be the Company we know we can be. It is about continuing to challenge ourselves to improve and do more. We are aware that a lot still remains to be done in areas outlined above. By making this information available to you, we are hoping that you will join us in our journey to create and maintain a sustainable business by offering your comments, feedback and suggestions. Your suggestions and feedback will also help us publish a more comprehensive report for the year 2010. I invite you to write to us at indiahelpline@apac.ko.com and share your views. The steps that we take today both individually and collectively will pay off for future generations. Warm regards

Atul Singh, President & CEO, Coca-Cola India

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Business Profile
The Coca-Cola Company re-entered India through its wholly owned subsidiary, Coca-Cola India Private Limited and re-launched Coca-Cola in 1993 after the opening up of the Indian economy to foreign investments in 1991. Since then its operations have grown rapidly through a model that supports bottling operations, both company owned as well as locally owned and includes over 7,000 Indian distributors and more than 1.3 million retailers. Today, The Coca-Cola Company's brands are the leading brands in most beverage segments. The Coca-Cola Company's brands in India in 2009 included Coca-Cola, Fanta Orange, Fanta Apple, Limca, Sprite, Thums Up, Burn, Kinley, Maaza and Minute Maid Pulpy Orange juice drink, the Georgia Gold range of teas and coffees and Vitingo (a beverage fortified with micro-nutrients).

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Our Business Model

At the core of our business in India, as in the rest of the world is our production and distribution network, which we call the Coca-Cola system. Globally, the Coca-Cola system includes our Company and more than 300 bottling partners. The Coca-Cola Company manufactures and sells concentrate and beverage bases. Our authorised bottlers combine our concentrate or beverage bases as the case may be with sweetener (depending on the product), water or carbonated water to produce finished beverages. These finished beverages are packaged in authorized containers bearing our trademarks -- such as cans, refillable glass bottles, non-refillable PET bottles and tetra packs -- and are then sold to wholesalers or retailers. In India, additionally, the Company also sells certain powdered beverage mixes such as Vitingo. Our beverages reach our ultimate consumers through our customers: the grocers, small retailers, hypermarkets, restaurants, convenience stores and millions of other businesses that are the final points of distribution in the Coca-Cola system. What truly defines the CocaCola system, and indeed what makes it unique among businesses, is our ability to create value for our customers and consumers. In India, the Coca-Cola system comprises a wholly owned subsidiary of The Coca-Cola which Company

manufactures and sells concentrate and beverage bases and powdered beverage mixes, Coca-Cola India Private Limited; a Companyowned bottling entity, namely, Hindustan Coca-Cola Beverages Pvt Ltd; thirteen authorized bottling partners of The Coca-Cola Company, who are authorised to prepare, package, distribute and sell beverages under certain specified trademarks of The Coca-Cola Company; and an extensive distribution system comprising of our customers, distributors and retailers. Coca-Cola India Private Limited sells concentrate and beverage bases to licensed bottlers who are authorized to use these inputs to produce our portfolio of beverages. Our licensed bottlers independently develop local markets and distribute beverages to grocers, small retailers, supermarkets, restaurants and numerous other businesses. In turn, these customers make our beverages available to consumers across India.

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THE COCA-COLA LIFE CYCLE

INGREDIENTS

COMMUNITY

PACKAGING

RECYCLING

MANUFACTURING

CUSTOMERS & CONSUMERS

DISTRIBUTION

REFRIGERATION

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The Coca-Cola Company has invested nearly USD 1.1 billion in its operations in India since its re-entry into India in 1992. The Coca-Cola Company's people are the face of its brands. They are talented and passionate, and they take immense pride in being a part of this Company with a global scale. The Coca-Cola system in India directly employs over 25,000 people including those on contract. The system has created indirect employment for more than 1,50,000 people in related industries through its vast procurement, supply and distribution system. We strive to ensure that our work environment is safe and inclusive and that there are plentiful opportunities for our people in India and across the world.

The Coca-Cola University runs a free retailer training program Parivartan which includes classroom training modules as well as training programs in a mobile customized bus. The focus of this program is to inculcate knowledge of best practices and develop traditional retailers with the right skills, tools and techniques. The method of training is a unique audio-visual training program designed to enhance current capabilities in retailers without any significant changes in their existing resources. At the end of 2009, the University had trained 30,000 retailers in North India under this program.

The non-alcoholic beverage industry is a major driver of economic growth. A National Council of Applied Economic Research (NCAER) study on the carbonated soft-drink industry indicates that this industry has an output multiplier effect of 2.1. This means that if one unit of output of beverage is increased, the direct and indirect effect on the economy will be twice of that. In terms of employment, the NCAER study notes that an extra production of 1000 cases generates an extra employment of 410 man-days.

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As a Company, our products are an integral part of the micro economy particularly in small towns and villages, contributing to creation of jobs and growth in GDP. Also, Coca-Cola in India is amongst the largest domestic buyers of certain agricultural products. As an industry which has strong backward and forward linkages, our operations catalyse growth of products like glass, PET, refrigeration, transportation, and Industrial and agricultural products. Our operations also lead to incremental growth for enterprises engaged in post-production activities like merchandising, marketing and sales. In addition, we share global best practices and technological advancements with our suppliers, vendors and allied industries which often lead to improvement in the overall standards of quality across industries. The Coca-Cola Company has always placed high value on good citizenship. Our basic proposition entails that our Company's business should refresh the market; enrich the workplace; protect and preserve the environment; and support the community. We leverage our unique strengths to actively support and respond to local needs -- be it the need for education, health, water or nutrition. We have used our distribution network for disaster relief, our marketing prowess to raise awareness on issues such as PET recycling, and our presence in communities to improve access to education and potable water. The Coca-Cola India Foundation is now taking forward in the community at large, projects and programs of social relevance to carry forward the message of inclusive growth and development. For more details on activities of the Coca-Cola India Foundation, please visit the website of the Coca-Cola India Foundation, www.anandana.org.

1 A report on analytical examination of carbonated soft drink industry in India dated April 01, 2001 of The National Council for Applied Economic Research (NCAER), states that based on the labour coefficients and output multipliers; for producing soft drinks worth Rs. 100,000 (approximately USD 2128 on a conversion rate of USD 1 = Rs 47) the direct and indirect requirement of labour will be 1.67 units.

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BOTTLING PLANTS IN INDIA

Franchise owned bottling operations Company owned bottling operations Contract Packaging units

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Sustainability is Key to Our Business

Consumers make purchasing decisions about non-alcoholic beverage brands based on the great taste and quality of the beverages, and increasingly on the character of the company that makes them. People want to interact with brands and companies that share their values and are doing their part to protect and enhance people's lives, communities and the world. The sustainability of our business is inextricably linked to the sustainability of the communities in which we operate. Our presence in communities, touching millions of lives each day through our brands and programs, means we have a responsibility and an opportunity to make a positive difference.

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LIVE POSITIVELY is our systemwide commitment to making a positive difference in the world by redesigning the way we work and live so that sustainability is an integral part of how we operate. LIVE POSITIVELY recognizes that the world is more interconnected than ever before, requiring more collaboration and partnership; that joy, optimism and possibility are powerful forces - vital to facing the tasks ahead of all of us; and that we must act with an eye toward future generations, driving business growth as we help create a sustainable world. Through LIVE POSITIVELY, we see our role as reducing our own environmental footprint while helping sustain communities through economic development and community support and continuing to deliver great-tasting, refreshing beverages that are enjoyed around the world. We are working continuously towards improving our water and energy efficiency across our system. Increasingly, we are developing innovative packaging that uses fewer resources and costs less to manufacture and transport. These actions will enable us to operate more efficiently and have the resources to continue investing in our growth. We are supporting the desire of individuals to lead healthier and more active lifestyle by introducing an ever-widening variety of beverages to meet evolving refreshment, nutrition and hydration needs. We also support community sports programs to give people the opportunity to be active throughout their lives. The continued success of our business and brands has always been connected to how we conduct ourselves in the communities around the world. This is a responsibility we take seriously and an opportunity we strive to meet every day. Learn more about LIVE POSITIVELY and our sustainability programs at www.sustainability.thecocacolacompany.com. LIVE POSITIVELY is focused in the areas of Marketplace, Workplace, Community and Environment and has seven core elements that are key to our business sustainability: Active Lifestyles, Beverage Benefits, Climate protection, Community, Sustainable Packaging, Water Stewardship and Workplace.

LIVE POSITIVELY focuses on seven core areas key to our business sustainability:
Beverage Benefits We aim to quench every thirst and need, while providing quality consumers can trust. We strive to offer and tailor beverages for every lifestyle, life stage and occasion based on individual needs Active Healthy Living We aspire to help people lead active, healthy lives by producing a wide variety of beverages; providing nutrition information and consumer health education; and supporting physical activity programs. Energy Management and Climate Protection We aim to be the beverage industry leader in energy conservation and climate protection. We are committed to growing our business but not the carbon emission from our manufacturing operations.

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Community We are a global company with local roots in every community where we do business. We are committed to fostering sustainable communities through wide ranging programs geared to develop economies, improve lives and create opportunity.

Sustainable Packaging We envision a world in which our packaging is seen as a valuable resource for future use. We are making this vision a reality by creating values at every stage of our packaging lifecycle, through efforts to reduce, recover and reuse.

Water Stewardship We are committed to responsible water stewardship. Our goal is to safely return to nature and communities an amount of water equivalent to what we use in all of our beverages and their production.

Workplace We foster open work environments as diverse as the markets we serve. We provide a healthy and safe place to work and abide by internationally respected human rights principles. We strive to cultivate an environment where people are inspired to create superior results.

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Beverage Benefits

Beverage Innovation
Coca-Cola India is one of the leading non-alcoholic beverage companies in India offering great tasting, quality beverages to consumers. Our brands in India include Coca-Cola, Fanta, Limca, Sprite, Thums Up, Kinley, Maaza and Minute Maid Pulpy Orange juice drink, the Georgia Gold range of teas and coffees and Vitingo (a beverage fortified with micro-nutrients). Our aim is to offer a beverage for every lifestyle and occasion, where it also makes sense for our long-term business growth. We focus our resources on what consumers want today and anticipating what they will want tomorrow. From the added benefits of vitamins and minerals to new ingredients, sweeteners, tastes and innovations in package sizes, we are constantly challenging ourselves to identify high-quality additions to our portfolio.

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Vitingo
Iron deficiency is widely prevalent in India with an estimated 69% children below 5 years being deficient in Iron2. 72% pregnant women and nearly 70% young women are also reported to be Iron deficient3. Food fortification and supplements are a solution to this problem. Coca-Cola India has developed a nutritional beverage option Vitingo - that can address the issues of Iron Deficiency and Iron Deficiency Anemia. Vitingo is a low cost beverage powder which contains five essential micronutrients Iron, Folic Acid, Vitamin A, Vitamin C and Zinc. In 2009 Coca-Cola India in partnership with the NGO, Bharat Integrated Social Welfare Agency (BISWA), launched a program to build awareness on micro-nutrient malnutrition (or Hidden Hunger) in the bottom of the socio-economic pyramid population in India. The two partners are working together to establish a successful income-generation model for the local communities and distribute Vitingo to the bottom-of-the-pyramid population in the state of Orissa.

Product Quality and Safety

The safety and quality of our ingredients and beverages is of the utmost importance to our Company. The Coca-Cola system has rigorous standards and practices in place at each stage of our beverage manufacturing processingredient purchasing, concentrate and beverage production, packaging and transportationto ensure the safety, quality and consistency of ourbeverages. We govern the safety and quality of beverages produced in the Coca-Cola system by The Coca-Cola Management System (TCCMS). TCCMS sets high standards for the management of beverage safety and quality, environmental performance, and occupational health and safety throughout the Coca-Cola system. All Company operations and bottling facilities within the Coca-Cola system must establish, implement, document and maintain a safety, environment and quality management system in accordance with TCCMS requirements. Through TCCMS, we integrate and align safety, quality and business objectives with consistent metrics to monitor performance; implement preventive action; and define problem-solving methodologies and tools to drive continuous beverage safety and quality improvements.

In January 2010, we launched the Coca-Cola Operating Requirements System (KORE),a new management system that enables the Coca-Cola system to collectively address the changing business landscape while supporting our Company's strategic growth plans. KORE outlines clear requirements for the policies, specifications and programs that guide our operations for product quality, occupational safety and health, and environmental standards across the entire Coca-Cola system. KORE also establishes a governance process and monitors compliance to ensure the integrity of our products. Lastly, KORE helps manage risk in our Company, bottling operations and across our supply chain. KORE replaced The Coca-Cola Management System (referred to as TCCMS in our environment reports of earlier years).

Gopaldas, 2002, Sheshadri, 1996; Gopaldas, 2002, Sheshadri, 1996

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Active, Healthy Living

Encouraging Active, Healthy Living

The Coca-Cola system cares about the health and well-being of its consumers. We create affordable products with safe, quality ingredients and fact-based ingredient and nutrition information to suit a range of lifestyles and occasions. Our products provide people with refreshment, enjoyment, nutrition and hydration. Our range of full, low calorie products, and portion sizes, enables consumers to choose products that meet individual energy and nutritional needs. We aspire to help people around the world lead active healthy lives through the variety and availability of the beverages we produce; our assortment of package sizes; the ingredient, nutrition and health information we provide; our responsible marketing practices; and our support for physical activity programs.

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Coca-Cola Mir Iqbal Hussain Trophy Football Program

Regular physical activity is essential to achieve an active healthy lifestyle. Among the physical activity programs that Coca-Cola supports in India is the Coca-Cola Mir Iqbal Hussain Trophy - a grass roots level football initiative to discover budding football talent in the country. This program is in partnership with the All India Football Federation (AIFF) which is affiliated with FIFA. 2009 was our first year of partnership with AIFF for this Under-16 football tournament in which 1,000 schools participated. 16 young footballers who played in this tournament were identified by the Technical team at AIFF and were sent to attend The Coca-Cola International Football Camp in South Africa.

Marketplace
Consumer Education and Marketing
We believe that we have a responsibility to inform our consumers with factbased ingredient and nutrition information for our products so they can make beverage choices that are in line with a sensible, balanced diet and active lifestyle. We also have a responsibility to respect and support our consumers and communities with advertising and marketing that is tasteful, truthful and responsible. We now provide basic nutrition information on all our product packages and labels. In fact, all the returnable glass bottles (RGBs) that we have purchased after March 19, 2009 have nutritional labeling on the bottles itself while for bottles that have been purchased prior to this date, we provide this information on the bottle closures (crowns).

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In addition, we also have made a global commitment to provide front-of-packaging (FOP) energy information (per serving) on nearly all of our packaging by the end of 2011. This is based on consumer insight that tells us that they want more nutrition information in an easy-to-read, at-a-glance format.

Responsible Marketing
The Coca-Cola Company has policies and practices in place regarding marketing our beverages in a responsible manner. We are committed to creating accurate, age-appropriate advertising. We led the global beverage industry in adopting a global Advertising and Marketing to Children Policy, communicating our marketing guidelines and our respect for the role of parents in choosing beverage options for their children. We do not directly target children under the age of twelve in our marketing messages in our advertising.

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Environment
A healthy environment is vital to our business and the communities where we operate. We view the protection of the environment as a journey and not a destination. We believe that each employee has a responsibility for stewardship of our natural resources and must strive to conduct business in ways that protect and preserve the environment. Our employees, business partners, suppliers and consumers must all work together to continuously find innovative ways to foster the efficient use of natural resources, the prevention of waste and the sound management of water. Doing so not only benefits the environment, it also makes good business sense.

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Water Stewardship

Water Stewardship
Water is vital to our business. It is the primary ingredient in our products and is also used in our manufacturing process. Our goal is to safely return to communities and nature an amount of water equivalent to what we use in all of our products and their production. Throughout our operations, we adhere to rigorous quality standards that cover both source water and finished products. We practice our water stewardship in three areas: reduce our water usage ratio (efficiency); recycle the water used in our operations (wastewater treatment); and replenish the water we use in our manufacturing process through community water access and watershed restoration and protection. Throughout the Coca-Cola system, we are intensely focused on water stewardship, and we have established partnerships with NGOs and communities to help us progress in each area. Our water stewardship strategy is built on the needs of our business and the communities where we operate and is informed by a comprehensive water risk analysis of the Coca-Cola system. The Coca-Cola system in India has improved its water use efficiency (water usage ratio) by over 25 percent since 2005. Water Usage Ratio is defined as the amount in litres of water used for the production of one litre of finished beverage. Our system follows an approach of Reduce and Recycle to continuously improve its water usage within the plants. Over the years, we have introduced several innovations and improvised on the plant processes to recycle and reduce the water used in operations thereby bringing down the water usage ratio.

Water Usage Ratio (L\L)

3.8 3.6 3.4 3.34 3.2 3 2005 2006 2007 2008 2.8 3.74 3.66 3.66
7 6 5 4 3

Total Water Use (Billion Litres)

6.86 6.18 4.43 4.65 4.96

2 1 0

2005

2006

2007

2009

2008

2009

The total annual water used by the Coca-Cola system in India has been increasing given the increase in the volume. However, due to continuous improvement in the water usage ratio, the increase in the quantity of water has been proportionately lesser than the increase in volumes. For example, while the unit case volume in 2009 increased by 31.5% over 2008, the total water usage increased only by 11%.

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Source Water Usage and Protection

To understand and promote management of water resources for the Coca- Cola system's manufacturing operations, we have launched a system wide water resource sustainability corporate standard. This standard requires each of our more than 900 bottling plants across the globe to evaluate the sustainability of water resources used to produce their beverages, as well as the sustainability of water resources used by the community surrounding the plants. It also requires identification of associated water risks at the plant level and action plans to reduce such risks. In tune with the global commitment all Coca-Cola bottling plants in India are required to complete this process and be actively implementing their protection plans by 2012. These source water protection plans address critical water challenges at a watershed level, from hydrological vulnerabilities to local government management. As a company, we are providing guidance, planning templates, preparation checklists and training courses to facilitate system wide engagement with this water resource sustainability corporate standard. As of now five such projects have been completed and source water protection plans are being implemented. The other units would complete this exercise as per the schedules by 2012.

Recycling Water in Our System

While we work to reduce our water use and improve our water efficiency for each litre of product we produce, we also are focused on recycling the water we use in our operations. While our global goal was to return all the water that we use for manufacturing processes to the environment at a level that supports aquatic life by 2010; in India, all our bottling plants were already in compliance with this requirement in 2009 itself. Referred to as 'wastewater', water used in our system operations is recycled through a treatment and cleansing process. This ensures that the quality of the wastewater meets applicable local laws and regulations before being released back into the environment. Treated wastewater is then used within our plants for utility purposes in boilers, evaporators, chillers and for landscape irrigation and dust control, reducing our use of external water resources.

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In our manufacturing plants, waste water is a result of production processes, such as container-washing systems, line lubrication and equipment cleaning. The generated wastewater is fully treated at the on-site Effluent Treatment Plant (ETP) and this typically includes secondary treatment (including the collection of wastes, screening/settling of solids, biological treatment to remove nutrients and disinfection and disposal) to meet The Coca-Cola Company (TCCC) and the Indian State Pollution Control Board (PCB) norms. It is pertinent to mention here that TCCC norms are typically more stringent than the local regulatory norms applicable to our Industry. Additionally, all the discharged waste water is measured and also used in many plants for developing green belt inside the plants. Thus, the treated wastewater in large number of units complies with Zero Discharge norm of the PCB where in all the treated wastewater is utilized within the plant premises for on-land discharge. The treated wastewater is also used for secondary purposes of the plant, such as toilet cleaning, floor washing and other similar purposes. This is in keeping with our policy to reduce water and use recycled water for secondary purposes within our plants.

Water Replenishment Initiatives

Water is a resource under great pressure globally. Population growth, climate change and global development will increase pressure on freshwater resources. Ingredients that rely on or impact freshwater resources may be challenged if effective use and replenishment practices are not in place. As we prepare our business for the future, we are working to sustain the availability of water for our products and communities. We work to balance the water we use in our finished beverages by participating in locally relevant water replenishment projects that support communities and nature. In India, our efforts to replenish groundwater is focused on the creation of rainwater harvesting structures, construction of check dams, restoration of ponds and traditional water bodies and projects that help improve water use efficiency in agriculture like drip irrigation. For the projects that the Coca-Cola system undertakes in India, NGOs and local communities help identify priority areas and then the company collaborates with local communities to establish rainwater harvesting partnerships. Our NGO partners implement the projects and mobilize community members to ensure that local knowledge plays an important part in planning and assessment.

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At the end of 2009, our system in India had installed more than 500 rainwater harvesting structures spread across 20 states. These structures have been installed in partnership with Resident Welfare Associations, Market Welfare Associations, Educational Institutions, Industry Associations, NGOs and local communities. We had also undertaken the restoration of several ponds including the historical Sarang pond in Sarnath and Lehartara pond in Varanasi. We had also constructed check dams in several areas of the country like at Kalahasti in Chittoor, in Andhra Pradesh, at Ramnagaram near Bangalore and at Wada near Mumbai. These initiatives are helping us reach our goal of reaching a 'zero water balance' with respect to groundwater usage. By achieving a zero water balance with respect to groundwater usage, the Coca-Cola system in India will be able to return the water equivalent to the amount of groundwater used for its operations in India.

At the end of 2009, the Coca-Cola system in India had created a water balance equivalent to 93% of the groundwater used for its operations in India.

Drip Irrigation projects

In partnership with farmers and Krishi Vigyan Kendra (KVK a government agency), Chomu, Rajasthan, the company and its bottling partner have embarked on a three way partnership to promote drip-irrigation for initiating water efficient agriculture in Kaladera area, near Jaipur. Drip irrigation, also known as trickle irrigation or micro irrigation is an irrigation method which minimizes the use of water and fertilizer by allowing water to drip slowly to the roots of plants, either onto the soil surface or directly into the root zone, through a network of valves, pipes, tubing, and emitters. The Coca-Cola system provides part funding to farmers to install the equipment while Krishi Vigyan Kendra provides the knowhow, training and insights to the farmers to carry out drip irrigation based farming. At the end of 2009, we had supported the installation of 188 drip-irrigation projects spread over an area of 94 hectares.

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Sustainable Packaging

Sustainable Packaging Performance

Most consumer goods depend on some form of packaging for transportation, display and shopper convenience. In food and beverage products, packaging also provides important safety benefits, such as spoilage reduction and tamper resistance. From an environmental perspective, a well-designed package actually helps to prevent waste by reducing breakage, maintaining product quality and meeting functional needs of consumers. However, packaging can also have significant environmental impacts related to natural resource consumption and waste disposal. In our Indian operations we are striving to meet with our global goal of improvement in packaging efficiency of about 7% by 2015.

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Our vision is to advance a packaging framework in which our packaging is no longer seen as waste, but instead as a valuable resource for future use. To realize this zero waste vision, we are guided by a commitment to continuous improvement. In 2009, we continued to make strides by advancing packaging initiatives focused on three goals: Reduce To design consumer-preferred packages that use the least amount of resources, while maintaining product quality. Recover To build packaging management systems to collect post-consumer packaging. Reuse To use post-consumer packaging and packaging materials again to deliver sustainable value.

Reduce
We aim to be amongst the most efficient users of consumer-preferred packaging in the global beverage industry and in India. This begins in our package development stage, where we work to use the least amount of natural resources necessary to protect product quality and meet consumer needs. One of the ways we conserve natural resources is by light weightingtaking weight and material out of our packaging. Our packaging innovation teams are continually testing packages and looking for new ways to decrease our raw material use while also reducing costs. In India, over the last decade, we have successfully reduced the weight of our glass bottles used for packaging sparkling beverages ranging from 10% to 33% for different pack sizes.

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Recover and Recycle

Another aspect of our package development process is to work with the industry associations and all others involved in the recycling value chain to recover and recycle packages after they are used. We work in partnership with local communities to help develop economically and environmentally effective solutions tailored to meet their specific needs. A majority of our packages is 100 percent recyclable and among the most recycled consumer packages in the world. This is a result of our selection of materials that have an established economic value, justifying their collection and reuse. In a bid to promote the recycling of PET packages, during the year 2009 the Company sourced merchandise like T-shirts made from recycled PET and distributed it amongst its employees and business partners such that they become ambassadors of the cause.

Packaging Mix in India

1.26% 0.65% 9.36% 11% 48.54% 42% 40.2% 45%

Packaging Mix 2008

RGB PET CAN Fountain Others

0.69%

1.06% 7.19%

Packaging Mix 2009

RGB

53.24%

37.82%

PET CAN Fountain Others

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Climate

Energy Management and Climate Protection

At Coca-Cola we believe that climate change is a profound challenge that will require concerted action by government, business and civil society. We also recognize that climate change may have long-term direct and indirect implications for our business and supply chain. We strive to use the best possible mix of energy sources while improving the energy efficiency of our manufacturing and distribution processes. Our climate protection efforts start within the company, with a combination of action and education in the three areas where we have the biggest climate protection opportunity: Cold-drink equipment Improving the efficiency of our coolers, vending machines and fountain equipment, and reducing greenhouse gas emissions produced by this equipment. Facilities and bottling plants Increasing our energy efficiency and productivity and reducing manufacturing emissions. Transportation Managing our distribution fleet to incorporate more fuel-efficient modes of product delivery.

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Cold-Drink Equipment
Cold Drink Equipment provides us with an opportunity to minimize greenhouse gas emissions with proper design and maintenance. With an aim to improve the energy efficiency of our cold drink equipment, The Coca-Cola Company has developed a proprietary device called energy management system (EMS).The EMS is a device that reduces energy consumption of a cooler up to 35% by allowing the temperature inside the cooler to rise (between 7C to 14C) during periods when the retail outlet is closed and maintains the correct cooler temperature (between 0C and 7C) during the active hours of the retail outlet. The EMS manages this by detecting the people movement in-front of the cooler through an infrared sensor eye and through the cooler door opening and closing counts. The unit is totally self -managing and does not require any special interference of the user. It can substantially reduce the number of service calls whilst saving on an average up to 35% energy (when compared with a 24hour running cooler without EMS). Additionally, the EMS facilitates longer life to the compressor, fans and lights in a cooler, by protecting against High voltage (> 250V) & Low voltage (< 180V) supplies and saves maintenance cost of the of the cold drink equipment. All cold drink equipment of more than 250 liters capacity that we bought in 2009 were 100% fitted with EMS which is also mentioned on the cooler body (labels). We have also made 100% transition to HFC free (Hydroflourocarbon free) insulation foam for our cold drink equipment. The India system is committed to meet the global goal to introduce 100% HFC-free coolers in the market. The initial field trials for this would be conducted in 2011 to fine tune the operational efficacy of such coolers in the market place.

Facilities and bottling plants

Achieving energy efficiency is a continuous process and we are consistently working on fixing the basics -- fixing leaks, insulating pipes, reducing pressure and optimizing temperatures, as well as investing in efficient lighting, compressor optimization and heat recovery. At some of our bottling plants, we have converted the conventional boilers into biomass-based briquette boilers such that there are fewer emissions.

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Transportation
As a product, beverages have an extensive presence in India and are widely distributed. Such a distribution system requires efficient management of the distribution fleet to keep our carbon emission levels low. As a beginning and with a view to be more environment-friendly, by the end of 2009, 191 product delivery vehicles owned by our bottling partners in Delhi were operating on Compressed Natural Gas (CNG). CNG is a fossil fuel substitute for gasoline (petrol), diesel or propane fuel. Although its combustion does produce greenhouse gases, it is a more environmentally clean alternative to those fuels and it is much safer than other fuels in the event of a spill (natural gas is lighter than air, and disperses quickly when released). CNG is made by compressing natural gas (which is mainly composed of methane [CH4]), to less than 1% of its volume at standard atmospheric pressure.

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Energy Management
We are working continuously to reduce our energy efficiency per liter of product produced and the same at our plants is monitored through the parameter Energy Usage ratio (EUR). EUR is defined as total energy used (in Mega Joules) to produce 1-litre of beverage. As a result of our various interventions, the EUR has reduced to 0.84 (MJ/Litres) in 2009 as compared to 0.91 in 2008. We are continuously working towards using alternative fuels in our manufacturing operations such as biomass briquettes in place of Furnace Oil (FO) in the boilers. Similarly, other initiatives such as heat recovery systems, natural day lighting in plant buildings are being introduced in the plants to economise overall energy usage. The Indian operations are aligned to the global vision of grow the business and not the carbon.
0.86
0.74 2005 2006 2007 2008 2009 0.87 0.97 1.10 1.71

Total Energy Used (Billion MJ)

2.07

Energy Usage Ratio (MJ/Litre)

0.91
0.84

0.76

2005

2006

2007

2008

2009

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Solid Waste Management Performance

We are committed to minimizing the discharge of waste and its impacts on the environment, and to ensuring that wastes are managed in an environmentally friendly and safe manner. Therefore the system tracks and reports all waste materials generated at the plant including production wastes (hazardous and non-hazardous) and wastewater treatment plant sludge. The solid waste generation figures measured and reported also include materials which are destined for recycling or recovery. The recovery or recycling ratio is computed separately. Various types of solid wastes are generated in our plants. As a part of our environmental initiative most of the materials used are recyclable. The various wastes generated by our operations are cardboard boxes, gunny bags, polybags, plastic scrap, wooden scrap, metal scrap etc. All the above scraps are segregated and stored in designated places in the scrap yard for easy handling and better recycling.
40 35 30 25 20 15 10 5 0 2005 2006 2007 2008 15.97 20.84 23.53 26.16 35.1

Solid Waste (Total) Ratio (g per L)

2009

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Solid Waste Generated (metric tonnes) and Solid waste Recycled or recovered (metric tonnes)
The solid waste, generated during the manufacturing process, could be hazardous or non-hazardous depending on its chemical composition and is categorized as per the State Pollution Control Board (PCB) norms. As per the company norms and the respective State Pollution Control Board requirements, solid wastes from the plants are safely disposed of to a permitted waste disposal facility or at other approved locations (example includes cogeneration in cement plants).
50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5000 0 2005 2006 2007 2008 2009
24442.06 23559.50 26661.99 38864.05 37016.44 32585.08 39073.81 44552.50 46466.79

21461.63

Solid waste generated (M Tonnes)

Solid waste cycled or recovered (M Tonnes)

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Community

Community
The Coca-Cola system in India like everywhere else in the world, employs local people, sources local ingredients, and produces and sells its products locallydirectly and indirectly creating millions of jobs. As a company, we believe that the sustainability of our business depends on sustainable economies. The Coca-Cola system in India and Coca-Cola India Foundation, work with local community based organizations and NGOs to support projects most relevant to community needs, connecting our business with communities to help them grow and prosper. Our programs, where we are making a unique and sustainable difference, include support of our global community priorities: water stewardship, active healthy living, and our local community initiatives, such as education. In addition, as and when required, we contribute in our small way in disaster relief and rehabilitation activities.

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Among the community projects that we do are projects to provide access to clean drinking water in schools and communities. This includes projects to provide clean and safe drinking water in primary schools in and around Chennai in partnership with Rotary International. In similar partnerships, we are working with UN-HABITAT to provide safe drinking water to primary schools in West Bengal and with Winrock International and Naandi Foundation to communities in Andhra Pradesh. The Winrock-Naandi partnership projects are also aimed at improving health and income of the communities in addition to improving food security.

Education
We believe that education is one of the keys to socioeconomic development. Hence we support and encourage educational programs for students of all ages. Our programs focus on supporting educational infrastructure, scholarships, business-education partnerships and other local needs. In several communities in and around our plants, we are contributing towards school infrastructure construction and repair of classrooms, internet stations, computers, stationery etc. In Andhra Pradesh we are partnering with the state government education departments to give away scholarships to meritorious students. The Company also conducts the 'Limca Book of Records Quiz' for students. In 2009 the Quiz was conducted in 3146 schools across 75 cities. We believe that such initiatives are necessary for the overall development and growth of children.

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Disaster Relief and Rehabilitation

Our system is in a unique position to provide assistance during and after natural disasters, given our distribution strength and reach within communities. We feel fortunate to be able to help those in dire need, from providing bottled drinking water to using our delivery vehicles for aid distribution and employee volunteerism. A recent example of our support to communities in the aftermath of natural disasters is our project to reconstruct primary schools in areas of Bihar which were severely affected by the floods of 2008. The rehabilitation projects were undertaken in partnership with the NGOs World Vision India, Plan India and Save the Children and for reconstruction of classrooms.

Community awareness programs

Raising awareness on water conservation, water usage, hygiene and sanitation and environment protection amongst all stakeholders has been one of the priority areas for the company. The company regularly participates and organizes workshops and seminars, panel discussions and interactive sessions in partnership with trade associations, NGOs and government organizations to create awareness on these important subjects. Quizzes, street plays, distribution of leaflets and brochures, screening of films, distribution of audio visual material are some of the other tools employed to engage stakeholders. A film titled Our Environment Let's Protect It jointly produced by Coca-Cola India and the NGO, BAIF is being used to create awareness on the environment and has been distributed in hundreds of schools. This effort has been recognized by the India Today Reader's Digest group by giving the Company the Pegasus Gold Award. As an awareness building program, the Company and its bottling partners annually celebrate World Water Day, World Environment Day, World Earth Hour and the International Coastal Clean Up Day with relevant stakeholders.

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Workplace

Workplace
The Coca-Cola Company (TCCC) believes that its people are its most important asset. As such, we strive to be a great place to work for all of our employees by fostering a safe, open, inclusive and healthy work environment. We also believe that every employee has the right to work in a place that is fair and respectful. TCCC's Workplace Rights Policy and Human Rights Statement establish a consistent approach to managing our business in India in accordance with high standards of integrity. They confirm the Company's commitment to abide by applicable laws and regulations with regard to labour practices. They also state the Company's principles concerning freedom of association; forced labour; child labour; discrimination; work hours and wages; occupational health and safety; and workplace security. Employees receive education and training with regard to our workplace standards and have the right to report any violation without fear of retaliation.

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One of our top people priorities is to achieve true diversity throughout our business. In keeping with the intrinsic diversity of the Coca-Cola system, diversity also is one of the Company's seven core values. Coca-Cola India has a Diversity Council which provides leadership and support for all diversity initiatives and company policies. Among the initiatives to promote gender diversity include the roll out of the 'diversity in action training program' as well as supportive policies like Maternity Leave beyond government norms, Concierge Service, Crche Policy and Flexible Work Arrangements Policy. The Company also periodically organizes interactive sessions with women leaders from within and outside the Company. We also strive to create an inclusive work environment free of discrimination and physical or verbal harassment, where every employee is treated fairly, with dignity and respect. Employee health and promoting active healthy living is another area of focus for Coca-Cola in India. We believe that employees who are healthy and active create superior business results. In order to achieve the same we have in place some robust healthcare polices like 'Well Being Assessment' to provide a customized health assessment report to each employee; Annual Health Check Up Policy for all employees and their families. We have several initiatives to create awareness about healthy living such as Celebrating World Health Day; Active participation in cyclothons and marathons, celebrating Sports Day and other similar events. Apart from this, the infrastructural support in the form of a well-equipped gymnasium and recreational center is also available to all employees all through the day. Coca-Cola India strongly believes in transparency and free flow of ideas. To support the same we have many open forums between leadership team and the employees like the breakfast meetings with the President &CEO, KOnversations every quarter and our bi-annual all employee town hall meetings which are aimed at not only sharing the company's business performance but also providing a platform to all employees to have an open interaction with the leadership team and voice their concerns and recommendations. These meetings have proven to be very useful in improving our existing processes. Employee training and skill development remains a focus area for the Coca-Cola system in India. There are several capability building programs like Pegasus, Eagles and the Coca-Cola University training programs for Company and bottler employees. 'Pegasus' is Coca-Cola India's flagship program to develop functional experts each year, enhancing their skills, to take on future roles within the Coca-Cola system. Spread over seven months, under the Pegasus program, the participants are exposed to several development opportunities; a 360 degree feedback and personalized coaching for individual personal development; academic learning sessions to develop general management skills; collaborative business projects for experiential 'live' learning and importing and exporting learning's by replicating best practices. Even the employees of the company's bottlers have been a part of this program over the years. Under the aegis of the Coca-Cola University, a special program Eagles, helps source fresh young talent ahead of demand, for our franchise bottlers. Spread across six months, the Eagles program includes classroom learning, elearning, mentoring, coaching & feedback and fieldwork. There are several other soft skills and leadership training programs conducted by the Coca-Cola University and the company throughout the year for skill development and capability building.

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Managing Supplier Relationships

Having a sound, stable and ethical supply base is important for our growth and the footprint we leave in local communities around the world. Our suppliers provide our system with materials, including ingredients, packaging and machinery, as well as goods and services. As a company, we have a responsibility to hold our direct suppliers and bottling partners to standards commensurate with our own operations. Our suppliers are expected, at a minimum, to conduct business in an ethical manner and comply with all applicable laws and regulations applicable to their operations. Our Supplier Guiding Principles (SGPs) communicate our values and expectations for our bottling partners and business partners. They are the foundation of our commitment to promote the respect of labor rights among our business partners. The SGPs are a requirement for all direct suppliers of goods and services to the Coca-Cola India System and all suppliers of materials that are specifically authorized by The Coca-Cola Company for use by our suppliers. The SGPs are included or where necessary, incorporated by reference in all supplier contracts, and many suppliers receive training to facilitate implementation. The Global policy of The Coca-Cola Company requires that suppliers be assessed for compliance at least once every three years by an authorized external auditing agency. If noncompliance is found, we provide a timeframe and offer expertise for corrective action by the facility. We also require follow-up assessments of non-compliant facilities as frequently as every six months. Suppliers have offered positive feedback on the SGP program, including the observation that it supports the transition of their Human Resources teams from an administrative function to a professional department. Following the implementation of the new Contract Labour Law, we've also received feedback on the value of offering support and education regarding the relevant laws and compliance. We do recognize that some suppliers may view the audit process as time- and resource-intensive. To alleviate inefficiencies for suppliers who sell to ours and other companies, we are willing to review and accept results of third-party audits completed for other companies with comparable supplier codes, and we encourage our suppliers to share our audit results with their other customers. More details on Supplier Guiding Principles are available on http://www.thecoca-colacompany.com/citizenship/ supplier_guiding_principles.html

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Corporate Governance and Ethics

Coca-Cola India operations are fully integrated into the governance structure of The Coca-Cola Company, including two important codes: (a) The Code of Business Conduct outlines expectations for employees to comply with the law and act ethically in all matters. The Code remains applicable to all employees of The Coca-Cola Company and its majority-owned subsidiaries. More details on the code can be accessed at our corporate website http://www.thecocacolacompany.com/ourcompany/business_conduct.html. Anti-Bribery Policy: The Coca-Cola Company and its subsidiaries are committed to doing business with integrity. This means avoiding corruption of all kinds, including bribery of government officials. We will abide by all applicable anti-bribery laws, including the U.S. Foreign Corrupt Practices Act, and local laws in every country in which it does business. The Company is a signatory to the United Nations Global Compact, by which it is committed to work against corruption and bribery around the world. The Company also has incorporated a prohibition against bribery into its Code of Business Conduct. This anti-bribery policy provides compliance requirements to prevent improper payments and to ensure accurate reporting of permissible payments under all applicable anti-bribery laws. (b) The Code of Business Conduct for Suppliers seeks to extend and clarify similar ethical expectations to our suppliers. The Supplier Code became effective in February 2008. Both the Code of Business Conduct and the Supplier Code highlight the Ethics Line reporting service, through which individuals can confidentially ask questions or report concerns to an independent administering party. More details on the Code of Business Conduct for Suppliers can be accessed at http://www.thecoca-colacompany.com/citizenship/pdf/ COBC_Suppliers.pdf More information is available online at www.thecoca-colacompany.com.

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Advisory Boards
Ours is a Company committed to achieving the highest standards of governance, and we continuously engage with our stakeholders, seeking their inputs to further refine our strategy and operations. As part of our commitment, Coca-Cola India has constituted the following Advisory Boards: India Advisory Board The India Advisory Board guides our company on various issues including future strategies, corporate citizenship and corporate governance. Mr. Naresh Chandra, former Ambassador of India to the United States, who also headed the Government of India committee on Corporate Governance, is the Chairman of the Board. The Advisory Board meets three to four times a year and reviews the performance of the Company. It also guides our Company's management on various operational and environment-related matters to help us formulate short- and long-term strategies. Advisory Council on Environment and Sustainability - The Advisory council on Environment and Sustainability (ACES) guides our company to preserve, protect and enhance the environment and natural resources. The ACES also helps to ensure that our company uses its resources and capabilities to provide active leadership on environment and sustainability related matters relevant to our business. The Council is chaired by General V.P. Malik (Retd.), Former Chief of Indian Army, who has also been a member of the National Security Advisory Board and Honorary Advisor to the Centre for Policy Research, New Delhi. Health and Wellness Advisory Council - We believe that our industry has a role to play in helping Indian consumers' lead healthier lives. Coca-Cola is committed to developing and launching a portfolio of products that enable the Indian consumer to lead healthier lives. The Health and Wellness Advisory Council (H&WAC) shares this belief and guides and assists our Company to (a) Identify and highlight the evolving nutritional needs of Indian Consumers (b) Suggest viable health & wellness solutions for beverage applications and (c) Support consumer education programs that promote a healthy and active lifestyle. Coca-Cola India Foundation Advisory Board - Coca-Cola India Foundation has constituted an advisory board to advise it on its overall working, its mission objectives, functioning priorities and long term strategies best designed to achieve maximum public benefit. The Board constituted under the Chairmanship of Justice JS Verma, former Chief Justice of India, comprises eminent personalities who have provided distinguished service to public, social, charitable organizations / institution, and who have expertise in the field covered by the objects of the Foundation. This Board meets three to four times a year. More details on the boards and their members are available on our website http://www.coca-colaindia.com and on www.anandana.org.

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AWARDS AND RECOGNITIONS

The following awards and recognitions received by the Coca-Cola system in India during the year 2009 is testimony to the Company's efforts to achieve the highest standards of excellence in its practices and business operations.

Golden Peacock Global CSR Award for 2009 for two consecutive years in recognition of the companys water
conservation/management practices and community development initiatives.

Pegasus Gold CSR Award instituted by Readers Digest and India Today for spreading awareness amongst school
students, across India, using an innovative medium like the specially commissioned animation film Our Environment Lets protect it.

Golden Peacock Environment Management Award by the World Environment Foundation jointly with the World
Council for Corporate Governance in recognition of Coca-Colas efforts in water management and conservation. The award was conferred to Hindustan Coca-Cola Beverages Private Limiteds Unit located near Bhopal in Madhya Pradesh and the Unit located at Atmakuru in Andhra Pradesh.

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Certificate for Verification Statement

SGS India Pvt Ltd, has verified Environment Performance Report, 2009 being published by Coca-Cola India, Enkay Towers, Udyog Vihar V, Gurgaon 122016, Haryana on the basis of third party validated data provided for the following parameters: 1. Water use & Water use ratio; 2. Energy use & Energy use ratio; 3. Solid waste and Solid waste ratio; and 4. Packaging index. The verification has been made as per Verification statement and verification report. Authorized by

Shivananda Shetty Director Environmental Services Date: September, 29, 2010 SGS Accredited Affiliate SGS India Pvt Ltd, 250, Udyog Vihar, Phase IV, Gurgaon-122015 Contact details: www.sgs.com

Verification Statement
Coca-Cola India, Enkay Towers, Udyog Vihar V, Gurgaon 122016, Haryana (hereinafter referred to as CCI), has commissioned SGS India Pvt Ltd, Gurgaon (hereinafter referred to as SGS) to provide an independent verification of annual environmental performance report for the year 2009 of all the bottling plants operative in India for specified parameters on the basis of third party validated data provided by CCI. 1. Objective and Scope of Verification Process The key objectives of the verification process included reviewing;
l l l

Completeness of data provided; Annual variation in environment performance; and Effectiveness of data collection and data management system.

The scope of work for verification process included the reviewing of the completeness and validity of environment parameter such as water use & water use ratio, energy use & energy use ratio, solid waste & solid waste ratio and packaging index for the year 2009 and comparison of same with the previous annual data up to 2005. Observations regarding the data management system were also made.

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2. Criteria of Auditing SGS has developed a set of protocols for the verification study based on internationally accepted current best practice guidance and standards for environment quality and management system. SGS has not been involved in the development of CCI's environment reports, environment programs, data collection and management system. In case of discrepancy observed in the data provided by CCI, we engaged with CCI to explain and same was incorporated in the verification report for conclusion. The verification statement provided herein by SGS is not intended to be used as advice or as the basis for any decisions, including, without limitation, financial or investment decisions. The data, on the basis of which verification report is prepared, are the responsibility of the management of CCI. SGS has not been involved in the process of data collection and compilation of any of the data included in the verification report. Our responsibility is to express an opinion on the data within the scope of verification set out below.

3. Statement of Independence and Competence The SGS Group of companies is the world leader in inspection, testing and verification, operating in more than 140 countries and providing services including management systems and service certification; quality, environmental, social and ethical auditing and training; environmental, social sustainability report assurance. SGS affirms our independence from CCI, being free from bias and conflict of interest with organization, its subsidiaries and stockholders. The verification team was assembled based on knowledge, experience and qualification for this assignment.

4. Verification Method As a first step, CCI has provided the following to accomplish the task:
l

Explanation and demonstration of adopted data management system such as Picasso and Compass and validation of environment data by third party;

Steward Data warehouse Release 1 (SDW R1)2009 document adopted for calculation and reporting system; and Environment data for all operative plant for specified parameter from 2005 to 2009 except for packaging index for which data were provided from 2007 to 2009.

The verification process included the following:

l

Data Collection Process Understanding the data collection, validation and management system adopted; Checking the data, information and documents, which have been made available as per procedures defined in Steward Data warehouse Release 1 (SDW R1)2009; and

Assessing the status of adequacy of data with respect to procedures defined in documents.

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Completeness of Environment Data Reviewing the plant wise environment data for given parameters from the year 2005 to 2009 for all bottling plants operative in India.

Analyzing the data for all bottling plants which included calculating, recalculating and comparing the data with previous years;

Verifying the data by cross-verification, data interpretation, adherence to the principle of completeness and follow up telephone calls & meetings for clarifying discrepancies.

Preparation of Verification Report Preparation of verification report for the specified parameters and comparing with the performance during previous years.

5. Conclusion On the basis of the methodology described and the verification work performed; SGS did not identify any issue related that can threaten the accuracy and completeness of environment performance report 2009 except for the following: 1. For the year 2009, annual aggregated data for all the bottling plants as a whole is considered for estimation of ratios and consumption levels. However, at plant level, some individual parameter are not captured on monthly basis ; 2. For 2009, ratios are calculated only in case data for both the parameter on monthly basis are provided; 3. Monitoring and audit of data punching by individual bottling plant should be made more frequent and effective; 4. Variation as evident in energy use ratio and solid waste generation ratio needs attention; and 5. Supportive document for the basis for data calculation in case of packaging index was not provided.

Note: This Statement is issued, on behalf of CCI, by SGS India Pvt. Ltd. Gurgaon (SGS) under its General Conditions for Environment Consultancy Services available at http://www.sgs.com/terms_and_conditions.htm on the basis of findings recorded hereon are based upon an verification audit performed by SGS. A full copy of this statement, the findings and the supporting documents may be consulted at Coca-Cola India, Enkay Towers, Udyog Vihar V, Gurgaon, Haryana. This Statement does not relieve CCI from compliance with any bylaws, federal, national or regional acts and regulations or with any guidelines issued pursuant to such regulations. Stipulations to the contrary are not binding on SGS and SGS shall have no responsibility vis--vis parties other than its Client.

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