​PEPSICO INDIA HOLDINGS PRIVATE LIMITED

Channo , Distt Sangrur , Punjab

(SNACKS DIVISION)

Internship Report
( FINANCE )

In Partial Fulfillment of the Requirements for the degree of

BACHELORS OF BUSINESS ADMINISTRATION

SUBMITTED BY :

CHAHAT GUPTA
 PERSONAL INFORMATION SHEET

Name ​: Chahat Gupta

Father’s name​ : Mr. Sanjay Gupta

Mother’s name​ : Mrs Kiran Gupta

Address​ : H.No 100 , Street No 5 C ,Officer Colony

Sangrur, Punjab
148001

Email​ : ​chahatg205@gmail.com

Contact​ : 7889269317

Period of Training​ : 4th June 2020 to 20th July 2020

Name of the organisation​ : PepsiCo India Holdings Pvt.Ltd ( Frito-lay division)

Under the guidance of :

Mr Puneet Dhamija
 ACKNOWLEDGEMENT

I take privilege in conveying my heartiest gratitude to Mr Puneet Dhameja for his enthusiasm ,
generosity ,untiring efforts , stimulating discussions , ingeniousness and admirable guidance that
enabled me to complete my internship at PepsiCo India Holdings Private Limited (Fritolay
Division).I am thankful to him for channelizing the training in a systematic manner.I am also
grateful for having a chance to meet so many wonderful people and professionals who led me
through this internship period.

I perceive this opportunity as a big milestone in my career development.I will strive to use the
gained knowledge and skills in the best possible way. I will continue to improve in order to attain
the desired career goals.

Yours Sincerely
Chahat Gupta
 DECLARATION

I hereby solemnly declare that the Finance Internship report is prepared and completed by me
under the supervision and guidance of Mr Puneet Dhamija and is an authentic record of my work
carried out at Pepsico India Holdings Pvt. Limited (Fritolay Division).

I hereby warrant that the work I have presented does not breach any existing copyright.

CHAHAT GUPTA
COMPANY PROFILE

PepsiCo, Inc. is an American multinational food, snack and beverage corporation headquartered
in Harrison, New York, in the hamlet of Purchase. PepsiCo has interests in the manufacturing,
marketing, and distribution of grain-based snack foods, beverages, and other products. PepsiCo
was formed in 1965 with the merger of the Pepsi-Cola Company and Frito-Lay, Inc. PepsiCo has
since expanded from its namesake product Pepsi to a broader range of food and beverage brands,
the largest of which included an acquisition of Tropicana Products in 1998 and the Quaker Oats
Company in 2001, which added the Gatorade brand to its portfolio.
Based on net revenue, PepsiCo is the second largest food and beverage business in the world,
behind Nestlé. Within North America, PepsiCo is the largest food and beverage business by net
revenue. Ramon Laguarta has been the chief executive of PepsiCo since 2018. The company's
beverage distribution and bottling is conducted by PepsiCo as well as by licensed bottlers in
certain regions.

PepsiCo competes with global, regional, and private companies across the food and nonalcoholic
beverage space. In the food industry, the company’s rivals include ConAgra Foods, Inc. (CAG),
Kellogg Company (K), Kraft Foods Group Inc. (KRFT), Mondelez International, Inc. (MDLZ),
Snyder’s-Lance, Inc. (LNCE), and Nestlé S.A. (NSRGY).In the nonalcoholic beverage industry,
The Coca-Cola Company (KO) is PepsiCo’s closest rival. Other peers in the beverage industry
include Dr Pepper Snapple Group, Inc. (DPS), Cott Corporation (COT), Red Bull GmbH, and
Monster Beverage Corporation (MNST).
HISTORY OF PEPSICO

PepsiCo, Inc.​, American food and beverage company that is one of the largest in the
world, with products available in more than 200 countries. It took its name in 1965
when the Pepsi-Cola Company merged with Frito-Lay, Inc. The company’s headquarters
are in Purchase, ​New York​.The first Pepsi-Cola was created by ​Caleb D. Bradham
(1866–1934), a pharmacist in ​New Bern​, ​North Carolina​. Hoping to duplicate the recent
success of ​Coca-Cola​, Bradham named his sweet cola-flavoured carbonated beverage
Pepsi-Cola in 1898. The drink proved so popular that in 1902 Bradham incorporated the
Pepsi-Cola Company. After many years of moderate prosperity, the company fell on
hard times after ​World War I​ and was reorganized and reincorporated on several
occasions in the 1920s.

In 1931 the company’s trademark and assets were picked up by Charles G. Guth
(1876–1948), founder of the modern Pepsi-Cola. He established a new Pepsi-Cola
Company, had a chemist formulate a better drink, set up new bottling operations, and
began merchandising a hugely successful 12-ounce bottle for five cents. Guth was also
president of Loft, Incorporated, a candy manufacturer and soda-fountain chain
(founded 1919), and in legal battles in 1936–39 he lost a controlling interest in the
Pepsi-Cola Company to the new management of Loft. When in 1941 the Pepsi-Cola
Company was merged into Loft, the name Loft, Inc., was changed to Pepsi-Cola
Company.
In 1950 ​Alfred N. Steele​ (1901–59), a former vice president of Coca-Cola Company,
became chief executive officer. His emphasis on giant advertising campaigns and sales
promotions increased Pepsi-Cola’s net earnings 11-fold during the 1950s and made it the
chief competitor of Coca-Cola. (After Steele’s death, his wife, actress ​Joan Crawford​,
became an active director of the company.) In 1965 Pepsi-Cola merged with ​Frito-Lay,
Inc.​, the maker of snack foods such as Fritos, Doritos, Lay’s potato chips, and Rold Gold
pretzels. The newly enlarged company diversified further with the purchase of three
restaurant chains—Pizza Hut, Inc. (1977), Taco Bell Inc. (1978), and ​Kentucky Fried
Chicken Corp.​ (1986; now called KFC)—and Seven-Up International (1986), but in 1997
the restaurant chains were spun off into a new, separate company called ​Tricon Global
Restaurants, Inc.​ Looking to add more products that were considered healthier, PepsiCo
acquired the Tropicana and Dole juice brands from the ​Seagram Company​ in 1998, and
in 2001 it merged with the ​Quaker Oats company​ to form a new division, ​Quaker Foods
and Beverages​. With the merger, PepsiCo’s popular brands included Pepsi cola,
Frito-Lay snack products, Lipton Tea, Tropicana juices, Gatorade sports drinks, Quaker
Oats cereals, and Rold Gold pretzels.
In the early 21st century, PepsiCo focused on expanding its operations in other
countries, notably Russia, which was its second largest market. In 2008 it bought a
controlling interest in JSC Lebedyansky, Russia’s largest juice manufacturer, and three
years later it completed its acquisition of Wimm-Bill-Dann Foods. Those investments
helped make PepsiCo the largest food and beverage company in Russia.

PRODUCTS OFFERED
PEPSICO INDIA

PepsiCo entered India in 1989 and in a short period, has grown into one of the largest MNC food
and beverage businesses in the country. PepsiCo’s growth in India has been guided by
“Performance with Purpose”, its fundamental belief that the success of the company is
inextricably linked to the sustainability of the world around. The Company believes that
continuously improving the products it sells, operating responsibly to protect the planet and
empowering people around the world is what enables PepsiCo to run a successful global
company that creates long-term value for society and our shareholders.

MISSION

CREATE MORE SMILES WITH EVERY SIP AND EVERY BITE

● FOR CONSUMERS:
By creating joyful moments through our delicious and nourishing products and unique
brand experiences.
● FOR CUSTOMERS:
By being the best possible partner, driving game-changing innovation, and delivering a
level of growth unmatched in our industry.
● FOR ASSOCIATES AND OUR COMMUNITIES:
By creating meaningful opportunities to work, gain new skills and build successful
careers, and a diverse and inclusive workplace.
● FOR PLANET:
By conserving nature’s precious resources and fostering a more sustainable planet for our
children and grandchildren.
● FOR SHAREHOLDERS:
By delivering sustainable top-tier TSR and embracing best-in-class corporate governance.

VISION
BE THE GLOBAL LEADER IN CONVENIENT FOODS AND BEVERAGES BY WINNING
WITH PURPOSE
This reflects on their ambition to win sustainably in the marketplace and accelerate their top
line growth, whilst keeping their commitment to do good for the planet and our communities. It
builds on decades of progress since PepsiCo was founded in 1965, while setting a firm
foundation for a new era of growth and prosperity.

LARGE INVESTOR IN INDIA

PepsiCo has been consistently investing in India, in the areas of product innovation, increasing
manufacturing capacity, ramping up market infrastructure, strengthening supply chain and
expanding the company's agriculture programme. The company has built an expansive beverage
and snack food business supported by 62 plants across the country. In two decades, the company
has been able to organically grow eight brands, each of which generate Rs. 1000 crores or more
in estimated annual retail sales and are household names, trusted across the country.

PepsiCo India has pioneered and established a model of partnership with farmers and now works
with over 24,000 happy farmers across nine states. More than 45 percent of these are small and
marginal farmers with a land holding of one acre or less. PepsiCo provides 360-degree support to
the farmer through assured buy back of their produce at pre-agreed prices, quality seeds,
extension services, disease control packages, bank loans, weather insurance, and the latest
technological practices. The association with PepsiCo India has not only raised the incomes of
small and marginal farmers, but also their social standing.

PARTNERSHIP WITH OVER 24000 FARMERS

PepsiCo India has pioneered and established a model of partnership with farmers and now works
with over 24,000 happy farmers across nine states. More than 45 percent of these are small and
marginal farmers with a land holding of one acre or less. PepsiCo provides 360-degree support to
the farmer through assured buy back of their produce at pre-agreed prices, quality seeds,
extension services, disease control packages, bank loans, weather insurance, and the latest
technological practices. The association with PepsiCo India has not only raised the incomes of
small and marginal farmers, but also their social standing.

GLOBAL LEADER IN WATER CONSERVATION

In 2009, PepsiCo India achieved a significant milestone, by becoming the first business to
achieve ‘Positive Water Balance’ in the beverage world, and has been Water Positive since then.
In 2015, PepsiCo India saved 12.75 billion litres more that it consumed in its manufacturing
operations. The company made this possible through innovative irrigation practices like direct
seeding, community water recharging initiatives, and by reducing the consumption of water in its
manufacturing facilities. PepsiCo is lauded for its efforts for water conservation and has received
numerous awards such as CII National award for water management and Water Digest award for
water practices amongst others.

CARE FOR ENVIRONMENT

PepsiCo India is focused on reducing its carbon footprint. In 2015, PepsiCo’s India’s Food and
Beverage manufacturing operations’ dependence on non-renewable energy has reduced by 74%
and 62% respectively from a baseline of 2006. This reduction has been on two counts –
improved operating efficiency and technology intervention of plants and migration to renewable
sources of energy such as biomass fuels (rice husk boilers) and wind turbines.​Initiatives such as
reduction in use of chemicals, eco-friendly packaging initiatives and efficient waste management
help reduce load on the environment. PepsiCo in partnership with the NGO Exnora and local
municipalities has also been working on a unique waste collection and treatment model
programme called ‘Waste-to-Wealth’. The award winning programme has positively impacted
more than 500,000 people. Following the successful implementation of the Waste to Wealth
model programme, PepsiCo India has handed over four municipalities in Tamil Nadu (Chennai,
Nagapattinam, Tenkasi, Cuddalore) and one municipal corporation in Haryana (Panipat), to the
respective authority for sustained delivery.
Initiatives such as reduction in use of chemicals, eco-friendly packaging initiatives and efficient
waste management help reduce load on the environment. PepsiCo in partnership with the NGO
Exnora and local municipalities has also been working on a unique waste collection and
treatment model programme called ‘Waste-to-Wealth’. The award winning programme has
positively impacted more than 500,000 people. Following the successful implementation of the
Waste to Wealth model programme, PepsiCo India has handed over four municipalities in Tamil
Nadu (Chennai, Nagapattinam, Tenkasi, Cuddalore) and one municipal corporation in Haryana
(Panipat), to the respective authority for sustained delivery.

EXEMPLARY EMPLOYMENT PRACTICES

PepsiCo India provides direct and indirect employment to almost 1,70,000 people. The
company believes in providing employment and growth opportunities to local talent. Its
‘College of Leadership’, ensures early identification of talent, and employees’ focused
development through critical experiences. PepsiCo firmly believes that encouraging
diversity means encouraging policies and systems that respect people’s special needs.
Not only does PepsiCo have a vibrant and diverse workforce, it takes the utmost care to
make dynamic business leaders of its employees and foster their career and personal
growth through differentiated experiences and a robust leadership development model.
PROJECT 1 : ERRORS IN DEPRECIATION LIFE IN ACCORDANCE WITH
EXHIBIT III

Depreciation is “the systematic and rational allocation of the acquisition cost of an asset, less its
estimated salvage value or residual value, over the assets estimated useful life.” It is a way of
allocating a portion of the cost of an asset over the period it can be used.​Asset depreciation
allows for businesses to use a tax-write off to pay for fixed assets over time. This process can be
used in both taxes and accounting, and can be applied to the cost of buildings, vehicles,
equipment, furniture, machines, and even software.This process doesn't create a source of
revenue. Rather, it is a process that allows a company to see the use of an asset's value over time
and use that information to report actual asset expenses compared to just the cost of purchasing
the asset.

There are three important factors when calculating depreciation:

1. Useful life​: The amount of time a company expects an asset to be productive.

Depreciation is calculated during this time period.
2. Salvage value​: When a business gets rid of an asset, it could sell it for a reduced amount.
This amount is called the salvage value. Overall depreciation is figured out by subtracting
the salvage value from the asset cost.
3. Depreciation method​: There are two main methods of calculating depreciation. The first
is the Straight Line Method, which takes the overall depreciation and divides it evenly
over the useful life of the asset. The second is the Accelerated Method, which creates
more depreciation early on in the life of a fixed asset. The Straight Line Method makes
for easy calculation, while the Accelerated Method defers a portion of income tax.

Depreciation has multiple benefits:

● The process helps companies accurately state incurred expense from using the asset and
compare that to the revenue that asset brings in. Lack of depreciation can lead to over or
under stating total asset expenses, which can lead to misleading financial information.
 ● It also helps businesses report the correct net book value of a given asset. Most
businesses report the original purchase cost of the asset. But since assets experience wear
and tear from daily use, the actual value declines over time. Companies can find an
asset's net book value by subtracting the asset's overall depreciation expense from the
cost when the asset was purchased.
● Depreciation allows for companies to recover the cost of an asset when it was purchased.
The process allows for companies to cover the total cost of an asset over its lifespan
instead of immediately recovering the purchase cost. This allows companies to replace
future assets using the appropriate amount of revenue.
● There are tax rules that make depreciation tax deductible. A greater depreciation expense
lowers taxable income and increases tax savings.

Depreciation is calculated at the end of the year so it can be included in your taxes.Not all items
are worth depreciating. Items that don't cost much or won't last more than a few months are not
subject to this process. Land and personal items used outside of business are also not subject to
depreciation. However, items like cars or computers that are used for both personal and business
purposes can be partially depreciated.

I was assigned the task of finding errors in depreciation life according to Exhibit III.For the same
I compared the depreciation life as given in the Company’s FAR sheet. A total of 2014 items
were given , which were divided in categories such as boilers , batteries , electrical and lighting
equipment , furniture (chairs and tables ), printers etc.This assignment was done on excel by
using mainly the sort and filter option keeping each category in mind.The depreciation life was
calculated using the depreciation rates.The items that were found to have errors were boilers,
trolleys and batteries.The other items which were free from any errors were Lab Equipment
,printer,electrical and lighting equipment , floor coating , structures and fixtures , chairs , right
sign boards , microwaves, blowers for guesthouses , speed bumps etc.
PROJECT 2 : WHETHER INPUT TAX CREDIT SHOULD BE COLLECTED OR NOT

Input credit​ means at the time of paying tax on output, you can reduce the tax you have already
paid on inputs and pay the balance amount.When a product/service is bought from a registered
dealer the company pays taxes on the purchase. On selling, they can collect the tax and adjust
the taxes paid at the time of purchase with the amount of output tax (tax on sales) and balance
liability of tax (tax on sales ​minus​ tax on purchase) has to be paid to the government. This
mechanism is called utilization of input tax credit.For example- a manufacturer pays Rs 450​ ​for
the final product.Tax paid on input (Purchases) is Rs 300​ ​.The company can claim input credit of
Rs 300 and only Rs 150 needs to be deposited in taxes.

ITC can be claimed by a person registered under GST only if he fulfills all the conditions​ ​as
prescribed.

a. The dealer should be in possession of tax invoice

b. The said goods/services have been received

c. Returns have been filed.

d. The tax charged has been paid to the government by the supplier.

e. When goods are received in installments ITC can be claimed only when the last lot is received.

f. No ITC will be allowed if depreciation has been claimed on tax component of a capital good

ITC can be ​claimed only for business purposes​. ​ITC will not be available for goods or services
exclusively used for: ​a. Personal use​ ​b. Exempt supplies​ ​c. Supplies for which ITC is specifically
not available.
ITC can be availed only on goods and services for business purposes. If they are used for
non-business (personal) purposes, or for making exempt supplies ITC cannot be claimed . Apart
from these, there are certain other situations where ITC will be reversed.

ITC will be reversed in the following cases-

1) Non-payment of invoices in 180 days– ITC will be reversed for invoices which were not paid
within 180 days of issue.

2) Credit note issued to ISD by seller– This is for ISD. If a credit note was issued by the seller to
the HO then the ITC subsequently reduced will be reversed.

3) Inputs partly for business purpose and partly for exempted supplies or for personal use – This
is for businesses which use inputs for both business and non-business (personal) purpose. ITC
used in the portion of input goods/services used for the personal purpose must be ​reversed
proportionately​.

4) Capital goods partly for business and partly for exempted supplies or for personal use – This
is similar to above except that it concerns capital goods.

5) ITC reversed is less than required- This is calculated after the annual return is furnished. If
total ITC on inputs of exempted/non-business purpose is more than the ITC actually reversed
during the year then the difference amount will be added to output liability. Interest will be
applicable.

I was given the task of checking whether ITC should be collected or not for the items given in
PO List. At first I studied what ITC is and on what items it can be collected except for the
foreign imports and exports.I had to make a judgement on the basis of tax codes given and the
items.Input tax credit can only be collected​ on the inputs used for business purposes.

1. When goods/services are used partly for furtherance of taxable supplies and partly for
exempt supplies.ITC can be availed only on the inputs used for making taxable, and zero
 rated supplies. A taxpayer switching from composition scheme to the normal scheme, can
avail ITC on the following:
○ Purchases held as stocks (this could include semi-finished/finished goods)
○ Capital goods held till their last day as a composition dealer.
2. When an exempt supply of goods and/or services become taxable, the supplier can claim
ITC for the goods held as stock (this could include semi-finished/finished goods)
relatable to exempt supplies. The supplier will also be liable to claim credit on capital
goods used exclusively for the exempt supply.
3. When vehicles that have a seating capacity of more than thirteen (including the driver),
used to transport people.
4. When vehicles are used to transport money for a financial institution.
PROJECT 3: INPUT TAX CREDIT FOR CANTEEN AND TRANSPORTATION

Input credit​ means at the time of paying tax on output, you can reduce the tax you have already
paid on inputs and pay the balance amount.When a product/service is bought from a registered
dealer the company pays taxes on the purchase.Tax codes were assigned to each item.The tax
codes mainly used by PepsiCo are I3 , Z1 , Z0 , R7.

● I3 refers to Input CGST and SGST 18%

● I7 refers to Input IGST 18%
● R7 refers to RCM IGST 18%
● Z0 refers to Zero Tax Code 1
● Z3 refers to CGST and SGST 18% (NO ITC )
● Z7 refers to IGST 18% (NO ITC)

Input Tax Credit is not calculated for the items related to canteen and are shown with a tax code
( Z ) whereas ITC is calculated for items related to transport and is shown with a tax code (I)
excluding the vehicles which are less than 13 seater.I was given the names of various vendors for
both canteen and transportation and check if the tax codes mentioned in the PO list were
correct.The main vendors given for canteen were Mr Rajinder Kumar , Mr Relu Ram Satish
Kumar and Mr Inderpal Singh.The main vendors given for Transport were Mr Jaspal Singh and
Sons , Mr Rajinder Pal , Mr Gurbax Singh and Mr Shamsher. I mainly used the filter and sort
options in excel where I filtered the names of the vendors and compared the tax rates for each
item.

A brief analysis of my assignment is given below :

CONCLUSION AND LEARNING OUTCOME

I gained practical insight into the finance related work done in organizations .​Classroom
knowledge helps us learn concepts but does not teach us how to apply them in the real world.
This internship ​has not only helped me apply what I have learned in class, but also gave me a
firmer understanding of the concepts as they relate to real people, situations, and organizations.
Goods and Services Tax was something that I had only heard of but never knew how it
practically works.Through this internship I learnt a lot of new concepts as well. I researched and
became familiar with Input tax credit and how it works in an organisation.I faced various
challenges while doing the work assigned to me but I was able to overcome them in the course of
my internship.I did assignments related to depreciation and taxation mainly.

I also became familiar with the work culture in PepsiCo and gained a practical view of how the
future looks like which helped me analyze and understand the global picture of how practical
work has been done.

It is my radiant sentiment to place on record my best regards , deepest sense of gratitude to Mr

Puneet Dhamija ​for being a constant support and guiding me throughout the course of
this internship.