2005/06 Annual Report and Financial Statements
Grupo Los Grobo S.A
Annual Report and Balance Sheet
2005/2006
Grupo Los Grobo S.A.
2005/06 Annual Report and Financial Statements
Grupo Los Grobo S.A.
Annual Report and
Balance Sheet
2005/2006
External enablement for social responsibility process: Inés García Fronti - Paula D’Onofrio
Grupo Los Grobo S.A.
Grupo Los Grobo (GLG) is the first Argentine company in the food sector that uses the
Global Reporting Initiative (GRI) Guidelines and is one of the six Argentine companies
to do it and send its reports to GRI. You may have access to our report at: http://www.
corporateregister.com/data/report.pl?num=17300&r=0
The 2005/06 Annual Report of GLG has obtained the “Content Index” (CI) qualification
granted by the GRI. A “Content Index” report includes an index that quickly and easily
shows readers where they can find information on the disclosures covered by the 2002
GRI
Facilitación
Guidelines.
externa
The
proceso
GRI index
responsabilidad
of GLG is social:
on page
Inés13
García
of this
Fronti
report.
- Paula D’Onofrio
2005/06 Annual Report and Financial Statements
ANNUAL SUSTAINABILITY
REPORT ON ECONOMIC,
ENVIRONMENTAL AND
SOCIAL PERFORMANCE
2005/2006
1. VISION AND STRATEGY
1.1 Vision and Strategy Statement
Our activity is key for the development
of an agricultural country like Argentina.
For centuries, the economic model
of our country has been sustained
by food production, but as a
responsible company, we do not limit
our participation only to economic
development.
Grupo Los Grobo is socially responsible,
always aiming at a balance between
economic development, environmental
protection and respect for individual
rights.
Grupo Los Grobo aims at the realization
of a sustainable development in
its production and has a strong
intergenerational commitment,
promoting the satisfaction of current
needs without compromising
next generations. It has a strong
environmental commitment both in its
crops and products.
The goals we have in the strategic plan
are the following:
• Consolidation of the organization
• Continuous improvement of processes
• Implementation of business intelligence
• Development of talents and skills.
Increase of employability
• Management maturity. Consolidation
of the performance evaluation model
vertical Integration
• Consolidation of the milling area
• Development of flour distribution in
Brazil
• Wheat export to Brazil
• Expansion of core businesses
• Development and professionalization
of sales network
• Infrastructure in new areas
• Innovation in new and traditional
company businesses
• Client’s year
The company manages the acquisition
and analysis of information related to
the demands of different interest groups
through systematic activities:
• Client Surveys (Web, tactics)
• Annual Survey on client satisfaction
• Customer Service Commissione
• Work Environment Survey
• Vendors Satisfaction Survey
• Monitoring of vendors satisfaction
indicators (payment days)
• Internal evaluations
• Contact with clients
Grupo Los Grobo S.A.
Insertion in the Value Chain of Grupo Los Grobo
LG Production
115,000 has
GROCATEC
LG Services
12 trucks
Plants 212,400
Export
LG Stocking
900,000 tn
CS Brokers
110,000 tn
Agroind.
do Brasil
LG
Comex
Mills
45,600 tn
Producers
1500
260 direct employees
1,500 small and medium-sized companies in the network (6000 people)
Forecasted Income: 165 M dollars per year
Processors
AVEX
Consumers
Inputs
(23 M dollars)
Contractors 240
PyMEs (small and
medium-sized companies)
Transport
(600)
Distribution
Agricultural
Management (12)
Fertilizers
Bioceres
Agrochem.
Agroinput Suppliers
2005/06 Annual
Memoria
Report
y estados
and Financial
contables
Statements
2005/06
One of the strategic challenges of
Grupo Los Grobo is in the integration
of the food value chain. We have been
developing this strategy of a greater
consolidation and integration for many
years. Maybe, the best example is
our participation in the whole wheat
chain, from research to biotechnology
development (BIOCERES), going through
assays, seed plot, distribution, agro-inputs
sale, production and coordination of
tasks, logistics, stocking, brokerage, mill
industrialization, and distribution to the
final, domestic and foreign, consumer.
To participate in all links of the chain
also allows us to capture quasi-rents
and decrease transaction costs, have
information from management itself and
avoid its asymmetries. This information
is key at the time of identifying and
developing new businesses. As regards
our relationship with AVEX (poultry
company under construction), we have
initiated the same path in protein chain.
The General Manager and Directors
monthly analyze the information about
client requirements in the Meetings of
the Board of Directors, with especially
prepared Management reports.
Directors, thanks to their global vision
of the whole commercial chain,
take the necessary steps and design
strategies to satisfy the needs of the
final clients, communicating directions
to management to comply with clients
requirements.
Los Grobo, as organizer, establishes
working standards according to client
requirements, and supervises their
compliance in order to achieve client
satisfaction.
Grupo Los Grobo S.A.
1.2 Chairman’s Statement
Companies have to increasingly
undergo an integration path,
showing responsibility for the
environment where they carry
out their business and which is
influenced by them on several
aspects.
Society expects that these companies
lead the adaptation to changes in
these turbulent times and that they
have the capacity to generate wealth,
employment and social welfare.
We have undergone a period of
great drought in part of the areas
where we carry out our activity, in
fact, agricultural production in our
country fell more than 10%. However,
our activity grew as never before
thanks to our position towards
clients and vendors. This position
has been established with great
effort and knowledge, and above all,
with a spirit of service that spreads
throughout the organization.
Withholdings persistence and costs
increase have conditioned our
results and capacity to invest more
extensively in our interest areas. What
it did not affect was our commitment
to build a company based on clients
that attempts at being better every
day.
Today, we are 256 people working in
the company, we have a 120 million
dollar income, we sow 115 thousand
has, we sell 776 thousand tn in grains,
we founded FRONTEC, a company to
develop border technologies in the
network, and we began to export
flour from our mills to Brazil. All this
growth is sustained by the qualitative
growth of the organization. People
have had access to 152 training
courses, new processes have been
developed, ISO 9001 standards
have been recertified in already
developed processes. The conclusion
of all these actions is that we have
recommended ourselves for the
Quality National Award.
In order to offer you organized
information on our economic,
environmental and social
development, we have followed the
Guide for the Preparation of Annual
Sustainability Reports of the Global
Reporting Initiative (GRI, 2002 Guide).
Adolfo Grobocopatel
Chairman of Grupo Los Grobo
2005/06 Annual Report and Financial Statements
Figure: Evolution of historical and forecasted hectares 2006-2007 with trust
180000
170000
160000
150000
140000
130000
120000
110000
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
Has 99/00
Has 00/01
Has 01/02
Has 02/03
Has 03/04
Has 04/05
Has 05/06
Has 06/07
0
50
0
1586
3449
5803
14869
0
5490
9393
0
661
1465
1191
5962
4984
12285
0
6964
13196
0
0
0
1234
3610
17738
4542
227
6496
9645
0
0
0
1259
8779
24374
4268
0
7727
18231
0
0
0
482
9628
17637
7277
0
8353
19923
695
0
0
1333
11504
22417
5915
0
7244
21127
352
0
0
540
9718
24157
9792
0
9292
26457
682
0
0
750
13300
32400
14000
0
7467
28250
2000
Has 07/08
Has 08/09
Has 09/10
144000
160000
180000
1000
18000
38000
16000
10000
32000
consolidate ourselves as the main
primary product originator through
the offer of services integrated to the
network.
The sale level of the company reached a
12% increase compared to the previous
year. This year the total sales were u$s
120.334.332,88 with a net profit of u$s
3.995.799,68 and with an EBITDA of u$s
7.348.569,31.
700.000
600.000
500.000
400.000
300.000
200.000
100.000
830.757
815.000
795.000
790.000
775.000
343.000
271.616
504.992
800.000
760.000
713.401
900.000
750.072
Figure: Stored Tons 2000 – 2006
202.953
213.517
Harvest 99/00
Harvest 03/04
Harvest 00/01
Harvest 04/05
Harvest01/02
Harvest 05/06
Harvest 02/03
December
November
October
September
August
July
June
May
April
0
March
In Agriculture we continue to develop
production alternatives, and for that,
we have launched the Los Grobo II
Trust, for a total of USD 12 million, with
Public Bid and Risk Rating. This Trust
for 45,000 has. is inside a global Trust
program, which allows us to expand
ourselves as producers with a tool
open to capital markets. The Los Grobo
II Trust exceeded its offering quotas,
due to the subscription of Institutional
Investors. (Retirement and Pension
Funds Administrators (AFJPs), Insurance
Companies, etc.)
Like in the previous year, we keep
increasing our proportion in the sowing,
storage and Agronomy market, our
result being slightly lower than during
2004-2005 year, specially affected by
the drought in the Southwest area,
remaining, however, within the levels
expected in our forecasts.
February
2.1 Organization’s Profile
Within the development framework
of our activity, and with the idea
of increasing our participation in
agricultural business, our company has
established the idea to consolidate
ourselves as Grain Brokers, thus, strongly
investing in new plants in Monte and
Saladillo, for a total investment of 4
million dollars.
These investments are aligned with
the policy of our Board of Directors to
134.000
190.604
2. PROFILE
January
Forecasted
Barley
Rape
Sorghum 2
Sorghum 1
Soybean 2
Soybean 1
Sunflower
Pizing. Corn
Corn
Wheat
Has 98/99
Grupo Los Grobo S.A.
One of the key factors for the
company’s success lays in our capacity
to forecast and interpret client’s
expectations and quickly answer
them. Our commercial network is
characterized by a deep territorial
knowledge, consequence of our
settlement in multiple locations.
Each of our branches constitutes an
integral service center that imitates
the head office, using common units
that provide service and support.
They buy grains, through Stocking
and Brokerage; sell Inputs; coordinate
Logistics and Management; finance
and promote clients through SGR
(Reciprocal Guarantee Company); are
responsible for collections; participate
in projects of the Foundation and
Corporate Volunteering; organize
events and training courses; among
other activities.
Market opportunities detection is
an activity that requires constant
attention to fundamental and
technical variables of the local and
foreign market.
These actions are achieved by means
of the team work of Brokerage,
Business Units Managers, key
informants that we have in ROFEX
and Bahía Blanca, our operators in
the MAT in Buenos Aires, from the
relations of managers and brokers
with other business operators; and the
information available through online
systems (Reuters, Open-Net; MAT
On-Line), independent consultants
and information from international
operators.
The advantages of multiple locations,
multiplicity of products and services,
and the flexibility in business
development for the identification of
Clients make each branch to achieve
permanent relationship with them.
This phenomenon is what we call
Territorial Knowledge.
Total Input Sales (Clients and LGA)
usd
Evolution of Input Sales
25.000.000
20.000.000
15.000.000
10.000.000
5.000.000
0
02/03
03/04
04/05
LG
05/06
Clientes
2.2 Scope of the Annual Report
• The contact person for topics
related to the Annual Report is
Paula Marra, Executive Director
of Grupo Los Grobo SA (paula.
[email protected], http://www.
losgrobo.com.ar)
• The year covered by this annual
report is between 05/01/2005 and
04/30/2006; subsequent relevant
information has also been included.
• The activity developed by Grupo
Los Grobo SA and captured in this
annual report includes territories in
Argentina.
Statement of Changes in Shareholders’
Equity 02-03 to 05-06
SH GLG Evolution
$
80.000.000
70.000.000
60.000.000
50.000.000
40.000.000
30.000.000
20.000.000
10.000.000
0
02/03
03/04
04/05
05/06
2005/06 Annual
Memoria
Report
y estados
and Financial
contables
Statements
2005/06
1) Carlos Casares
1.1) Quiroga
1.2) Roberts
1.3) Carlos Tejedor
1.4) Pehuajó
1.5) Francisco Madero
10
Firmat
San Pedro
2) Salliqueló
2.1) 30 de Agosto
2.2) América
2.3) Gral. Pico
2.4) Trenque Lauquen
8
Chacabuco
1.3
2.2
2.3
Madero
2.4
Ruta Nº 5
2.1
2
3
1.1
9
5
Monte
Casares
7
6
1
Pehuajó
3) Guaminí
3.1) Bonifacio
3.2) Carhué
Chivilcoy
M
1.4
3.1
3.2
6.1
Magdala
Saladillo
4.1) Pigüé
4.2) Saavedra
4.3) Darregueira
4.4) Gral. Lamadrid
4.5) Cnel. Pringles.
4.6) Tornquist
4.7) Bahía Blanca
7.1
Guaminí
4.4
4.1
4.3
1.5
1.2
Saavedra
4.2
4.5
4.6
Lartigau
5) Chivilcoy
6) Saladillo
25 de Mayo, Roque Pérez
6.1) Saladillo
Cnel. Dorrego
Ruta Nº 33
4.7
Cnel. Pringles
Bajo Hondo
7) San Miguel del Monte
7.1) Las Flores
8) San Pedro
9) Capital Federal
Commercial Net
10) Armstrong y Cañada de Gómez
Grupo Los Grobo S.A.
2.3 Profile of the Annual Report
In this Annual Report, Grupo Los Grobo
SA applies some of the principles to
prepare annual reports and/or content
included in the Guide for the Preparation
of Annual Sustainability Reports - Global
Reporting Initiative (GRI, 2002 Guide) so
that in our next annual reports we can
gradually make progress in their use.
Within policies and measures to
guarantee the accuracy, thoroughness
and truthfulness of the information
presented in the annual report, we
have processes that make up a value
chain and that are in line with legal
rules, custom and practices in force.
Said processes are certified under ISO
9001 Standards and are detailed in the
following figure.
Figure: ISO 9.001 Standard Procedures
Invoice to client
Distribution
Order for the
Purchase of goods
Goods reception
Seeds
Legalization
Invoice
Reception
Client
Agroinputs
Order for the
Sale of goods
Crop planning
Harvest of
Special products
Performance
Stocking
Production
Seeds stocking
Evaluation and
Selection of suppliers
Measurement
And monitoring
Clients claims
And consults
Nonconformities /
improvement action
Control of external
Documents
Recruiting /
integration of staff
Internal audits
Quality manual
Direction review
Quality records
Control
Planning for continuous
Improvement
Training
Awareness
P-ac-001 proposal for
Purchase operation
P-ac-013. Operation
Application by f&o
P-ac-002. Shipping of
Trucks to producers
P-ac-012. Client
Registration of the mat
P-ac015.
Truck dispatch
P-ac-007. Proposal
For sale operation.
P-ac-014.
Truck dispatch
P-ac-011.
Non-conforming products
P-ac-016. Payment
Of freight charges
P-ac-003. Reception of
Goods sent by producer
P-ac-004.
Deposit certific.
P-ac-005. Payment
Of purchases
P-ac-008. Shipping
Of sold goods
P-ac-009.
Sales contracts
P-ac-014.
Entry to goods plant
P-ac-006. Pickup of
Goods from producers
P-ac-010.
Invoicing of sales
Client
Support processes
Fields approval
Stocking
10
2005/06 Annual
Memoria
Report
y estados
and Financial
contables
Statements
2005/06
As methodology to ensure
quality and improve the general
performance, we must emphasize
the performance review, the
coexistence code, the safety and
occupational health rules, the
environmental principles, the food
safety standards, the 3rd-party
audits, the meetings between areas
and the manager meetings.
In order to test and enhance
processes executed by the
organization, different activities are
carried out:
With Clients
• Coinnovation workshop
• Participation in CREA and
AAPRESID Meetings
With Competitors
• Visits to silo plants, mills and
companies
With Vendors
• Purchasing Management
Workshop
Interest Groups:
• Meetings with Technical Officers
according to AccountAbility
1000 (AA1000) guidelines
that is a liability method that
aims at assuring the quality
of accountability, evaluations
and disclosure of social and
ethical aspects of corporate
management. AA1000 is a
procedure standard.
• Meeting with grower contractors
to establish considerations and
compensations.
• We receive the regular visit
of several producers and
businessmen from all over the
world, where we can interact and
search for “outside” information.
You may find more information about
these economic, environmental
and social aspects of our company’s
activities at: www.losgrobo.com.
11
12
Grupo Los Grobo S.A.
3. Administration structure and management systems
3.1 Structure and Administration
The structure of Grupo Los Grobo
was established with the assistance
of external consultants, defining
participation levels of the different
interest groups that interact in the
company’s administration.
Grupo Los Grobo is a group of
companies where shareholders,
as a whole and in pre-established
proportions, have original capital
invested, and form a management unit,
beyond their legal status, location or
activity performed by each of these
companies.
3.2 Commitment with
Stakeholders
In Los Grobo we believe that trust,
cornerstone of any association, optimizes
the achievement of results, therefore:
• We are part of CREA groups, in which
we share management experiences
among group members.
• We form consortiums to add directed
demands to the purchase of inputs,
thus enhancing negotiating power.
• We become partners with clients in
the creation of a company which
industrializes products, such as the
case of the Flour Mill in Bahía Blanca.
• We develop a strategic alliance with a
Brazilian wheat importer, HARINANET,
and founded a foreign organization
called Agro negocios do Brasil for its
distribution.
• We participate in the creation of a
biotechnology company named
BIOCERES that researches and
develops seed genetics. The members
of the Board of Directors are partners
together with other 250 producers.
• We have launched two sowing
trusts where we are operators and
organizers, introducing agro-investors
and investors belonging to other
areas to the agricultural sector.
• We form a reciprocal guarantee
company, “SGR”, where we are
protecting members and invite
our clients and service providers to
subscribe as participating members in
order to obtain the benefits that this
kind of companies provide. With the
support of Los Grobo, participating
members can obtain better financing
plans for capital assets and input
purchase through the SGR.
Figure: Grupo Los Grobo – Flow Chart
BOARD OF DIRECTORS
SHAREHOLDERS
External Director
CHAIRMAN
Executive Director
Executive Director
SAC
Secretary
External Director
Executive Director
P.C.G.
Executive Director
Systems
Audit Department
Talent
RI y P
AVEX
RSE
ADP
INDALAR
LGI
SGR
LGA
FFLG
CS
LGS
PROSEME
TR
LGSP
LOS GROBO
FOUNDATION
CANEPA
Flow chart References. ADP: Agronegocios del Plata. CS: Chain Services. FFLG: Fideicomiso Financiero Los Grobo. LGA: Los
Grobo Agropecuaria. LGI: Los Grobo Inversora. LGS: Los Grobo Servicios. LGSP: Los Grobo San Pedro. PCG: Planificación y
Control de Gestión. RI y P: Relaciones Institucionales y Prensa. RSE: Responsabilidad Social Empresaria. SAC: Servicios
Raw Material Division Administrativos Corporativos. SGR: Sociedad de Garantía Recíproca. TR: Tierra Roja
Industrial Division
Regional Division
2005/06 Annual
Memoria
Report
y estados
and Financial
contables
Statements
2005/06
Location Chapter
1. Vision and strategy
Vision and Strategy Statement
Chairman’s Statement
1.1
1.2
2. Profile
Organization’s Profile Scope of the Annual Report
Profile of the Annual Report
2.1
2.2
2.3
3. Administration structure and management systems
Structure and Administration
Commitment with Stakeholders
4. Table of contents
The following table of contents shows
the chapters of this Report that comprise
different requirements established by GRI.
We have only included those requirements
and indicators for which Grupo Los Grobo
has relevant information.
3.1
3.2
4. Indice
5. Performance indicators
Economic Performance Indicators
EC1 Clients
EC3 Vendors
EC5 Employees EC6 Capital Contributors EC7 Capital Contributors EC8 Public Sector Paid Taxes
5.1
5.1 a y b
5.1 c
5.1 d
5.1 e
5.1 f
5.1 g
Environmental Performance Indicators
Energy
Water
Biodiversity
Emissions, Spills and Waste
Products and services
5.2
5.2 a
5.2 b
5.2 c
5.2 d
5.2 e
Social Performance Indicators
5.3
Work Practices and Decent Work
LA1 Employment
LA 4 Company/workers Relations
LA 7 Health and Safety
LA 9 Training and Education
LA 10 Diversity and Opportunity
LA 11 Diversity and Opportunity
5.3 a y b
5.3 c
5.3 d y e
5.3 f, g y h
5.3 i
5.3 j
Human Rights
Adherence to the Global Compact 5.3 k
Society
SO 1 Community
SO 2 Corruption
SO 3 Political Contributions
Ethical Code
5.3 l
5.3 m
5.3 n
5.3 o
Product Liability
PR 2 Products and services
5.3 p
Other Data of Interest
Award to the Socially Responsible Entrepreneur
5.3 q
13
14
Grupo Los Grobo S.A.
5. Performance indicators
5.1 Economic Performance Indicators
a) Clients
30/04/2006 u$s
30/04/2005 u$s
120.334.332,88
106.152.690,35
24.661.077,04
20.957.364,08
Profits of the Year
3.995.799,68
5.437.230,12
Financial Results
1.171.208,69
324.976,94
847.541,18
540.002,12
Total Income from Sales
Shareholders’ Equity
Amortization of Fixed Assets
Provisions and Provision Recovery
146.864,69
13.861,39
Income Tax
1.187.155,09
1.520.836,06
Operating Profit EBITDA
7.348.569,31
7.836.906,63
29,80%
37,39%
6,11%
7,38%
Base Indexes EBITDA
Profit – Operating/Shareholders’ Equity
Profit – Operating/Total Sales
b) Income for Sales and Services
Entry
2006 u$s
Sale of Cereals and Oil Seeds in Consignment
57.444.971,24
Sale of Cereals and Oil Seeds
40.964.480,80
Sale of Agro-inputs
12.808.953,23
Sale of products and byproducts - Flours
5.707.740,35
Service Income
2.223.084,02
Sale of Cattle
978.806,94
Income for Commissions
171.757,26
Export Reimbursement
Total Income from Sales
Annual Forecasted Income: 165 M dollar per year
34.539,04
120.334.332,88
2005/06 Annual
Memoria
Report
y estados
and Financial
contables
Statements
2005/06
c) Vendors
Cost of Goods, Sold Products and Services
Year 2006 u$s
Year 2005 u$s
108.028.757,36
94.778.606,11
d) Employees
Total Salary Expenses
Item
Year 2006 u$s
Year 2005 u$s
Salaries and Wages
1.690.579,70
864.419,04
Social Security Contributions
426.226,53
187.781,41
e) Capital Contributors
Payables and Loans
Item
Year 2006 u$s
Year 2005 u$s
Trade Payables
11.159.790,19
9.363.214,13
Loans
26.936.579,66
11.883.819,77
916.621,35
1.497.520,70
4.004.403,80
843.417,59
Tax Payables
Other Payables
f) Increase/Decrease of Retained Earnings at Year End
Profit for the Year
Year 2006 u$s
Year 2005 u$s
3.995.799,69
5.437.223,76
g) Public Sector
Paid Taxes
Item
Year 2006 u$s
Year 2005 u$s
Taxes, fees and contributions
1.375.132,44
991.718,37
Income Tax
1.187.155,09
1.520.836,07
15
16
Grupo Los Grobo S.A.
5.2 Environmental Performance Indicators
We strongly believe that
environmentally-friendly practices
make our production sustainable,
thus, we annually assess, since 2004,
environmental impact through
the use of Agro-Eco-Index. This
environmental balance is performed
in a segmented way for each agroecological area and, in general,
through a company’s consolidated
report.
We measure the environmental
impact of our practices using the
Agro-Eco-Index system, developed by
Ernesto Viglizzo, Agricultural Engineer
of the Program of Agricultural and
Environmental Management of
the INTA (Argentine Agricultural
Technology Institute), since we
consider that the environment is the
place were we develop, and this tool
is essential to help us understand the
environment.
a) Energy
Indicator 1, Fossil energy
consumption shows our consumption
considering our silo plants. When
we did not include such plants in
the balance, the indicator was in the
green area. Our intention is that the
consumption of these plants changes,
improving consumption, changing
this energy source for a cleaner one.
b) Emissions, Spills and Waste
Indicators 2 to 7 and 10-11 are related
to Emissions, Spills and Waste Section.
In the case of Indicators 3 (Nitrogen
Balance) and 4 (Phosphorus Balance),
they show an imbalance both for
Nitrogen and Phosphorus; we try
not to harm the environment with
their excessive use but we have
not achieved a neutral balance. We
intend to adjust this parameter so
that the multiannual balance is more
balanced.
Indicator 7, Contamination risk by
the use of plaguicides is in red. This
is because of the use of organophosphorus pesticides to control
2005/06 Annual Report and Financial Statements
the soybean stem borer. While it is a
commonly used and approved pesticide,
our intention is to change it in the next
period for another pesticide with a lower
environmental impact.
Indicator 11, Balance of greenhouse
gases. This indicator is bad due to
the feet lot effect, since the animal
concentration makes urine and feces,
measured as methane, increase this
indicator. This only occurs in a field
located in the central region.
c) Water
Indicator 8, The risk of Hydric and
Hydraulic erosion has green light.
d) Biodiversity
We have long-term agreements, which
allow us to apply crop rotation, direct
sowing and nutrient multiannual
balances. We perform an integrated
plague control where beneficial fauna
is respected, the impact of different
herbicides is assessed and crop diseases
are monitored. We promote and
encourage the use of conservationist
practices such as direct sowing
(AAPRESID – Argentine Association for
Direct Sowing Producers).
e) Products and Services
In July 2004, we signed a master
agreement with the Program for
the Collection and Final Disposal of
Agrochemical Containers named
“Agrolimpio”. Grupo Los Grobo was the
first company to join such program.
The Agrolimpio Program is implemented
by the Chamber of Agricultural Health
and Fertilizers (CASEFE) and sponsored
by INTA – ArgenINTA, SAGPyA, Provincial
Governments, Municipalities, Producers
Associations, NGOs, UATRE – OSPRERA
Cooperatives and Professional
Associations.
The goal of the Agrolimpio Program is
to collect all empty containers that have
been rinsed three times and render
them useless for reuse; they are stored in
three stocking centers intended for such
purpose: Guaminí (Ruta 33 and acceso
Guaminí), Francisco Madero Plant (Ruta
5 km 383) and Plant 2 (Carlos Casares,
Prolongación Av. 9 de Julio). After storing,
the program grinds those containers.
Periodically, grinded containers are
collected to be delivered to recycling
centers.
During the last year the Agrolimpio
Program has collected 121 tons of
containers: 9% (1350 TN) of the total
plastic volume that the agrochemical
industry consumes annually in our
country. We have contributed with
the collection of 4 tons of containers
between July 2004 and April 2006.
In the 2004/2006 period we have
collected 75 TN of empty silo bags.
They are used to store cereals in the
fields. Once cereal is extracted, the
silo bag is waste. To avoid future land
contamination, they are collected and
delivered to a vendor. These bags are cut
in 1 x 2 meter strips, washed, dried and
grinded to be reused in waste-type coils.
Figure: Agro-Eco-Index Indicator Results as of 2006
Facility Los Grobo Agrop.
Owner LG
Year of assessment 2004
Phone 02395-459022
Predominant Prod. Agricultural
Assessed Period 2005/2006
Indicator 0
71.986
Indicator 1
12.752.744
Indicator 2
0.243
Indicator 3
Indicator 4
District CONSOLIDADO
Province Buenos Aires
Ecoregion Pampa Ondulada - Bs. As.
%
Percentage of annual crops
Mj/ha/year
Consumption of fossil energy
Mj EF/Mj Prod.
Use efficiency of fossil energy
-1.184
kg/ha/year
Nitrogen BalanceIndicator 4
-2.084
kg/ha/year
Phosphorus Balance
Indicator 5
0.000
mg/l
Contamination risk by Nitrogen
Indicator 6
0.000
mg/l
Contamination risk by Phosphorus
Indicator 7
1.772.625
Relative Index
Contamination risk by plaguicides
Indicator 8
5.197
ton/ha/year
Eolic and hydric erosion risk
Indicator 9
0.016
Relative Index
Environment intervention risk
Indicator 10
0.007
ton/ha/year
Carbon stock change
Indicator 11
105.739
ton/ha/year
Greenhouse gases balance
Agrolimpio Program
Collection in Argentina
GLG Collection
% GLG
121 tons
4 tons
3%
17
18
Grupo Los Grobo S.A.
5.3 Social Performance Indicators
Work Practices and Decent Work
a) Average Number, Distribution, Sex
and Age
Cantidad de Personas: 256
Trabajadores Permanentes: 198
Trabajadores Temporarios: 43
Pasantes: 15
Distribución de las Personas:
LG Agropecuaria: 163
LG Servicios: 25
Chain Service: 10
LG Inversora: 57
c) Company/workers Relations
The organization encourages productive
conversations and multiple ways for
feedback. It adopts the VERO system,
which proposes that conversations
should be about veridical (V), specific (E),
relevant (R) and opportune (O) facts. It
individually assumes that everything is
made by choice (not by imposition) and
is totally committed to it.
Lost Days
Art (Occupational Risk Insurer)
Diseases
Without justification
Examination leave
Maternity leave
Marriage leave
Working accident
d) Fatal Victims
There have not been fatal victims
Composición por Género:
Mujeres: 25%
Varones: 75%
e) Safety and Health
Causes: 652
Art (Occupational Risk Insurer): 113
Diseases: 241
Without justification: 58
Examination leave: 18
Maternity leave: 180
Marriage leave: 30
Working accident: 12
Edad Promedio:
34 años
b) Seniority
Seniority Average:
2 years
Accidents
Type of accident
Year
Total
With Leave
Average
Leave Days
% Leave Without leave
Accid
In Itinere
Prof. illness
In
commission
Reaggravating
cases.
2005
3
3
14
100%
3
0
0
0
0
2006
9
7
45
77,78%
9
0
0
0
0
Total
12
10
36
83,33%
12
0
0
0
0
2005/06 Annual
Memoria
Report
y estados
and Financial
contables
Statements
2005/06
Nature of injury
60%
(02) Cutting injuries
8,33%
50%
(03) Internal trauma
16,67%
40%
(04) Twist and sprain
8,33%
(05) Foreign body in eye
8,33%
(06) Fractures
8,33%
(07) Excoriations
0,00%
(08) Stab wounds
0,00%
(09) Burn injuries
0,00%
(10) Other injuries
50,00%
20%
0%
(02) (03) (04) (05) (06) (07) (08) (09) (10)
Type of Injury
Incidence
8,33%
A00 Building elements of
the work environment
66,67%
C00 Materials and/or
Elements used at work
25,00%
D00 Chemical or bilogical
agents
0,00%
E00 Termhydrometric factors
0,00%
F00 Physical factors
0,00%
Treatment
70%
60%
B00 Comp. Inst. of work
environment
Spine and thorax
Spine
Neck
Thorax
8,33%
8,33%
0%
0%
Abdomen and pelvis
Abdomen and pelvis
8,33%
8,33%
Legs
Thigh
Leg
Foot
Knee
Ankle
41,67%
16,67%
8,33%
8,33%
8,33%
0%
Head
Eyes
Skull and scalp
Face
8,33%
8,33%
0%
0%
Arms
Shoulder
Arm and elbow
Forearm and wrist
Hand
Fingers
16,67%
8,33%
8,33%
0%
0%
0%
Other
Other
Without classification 16,67%
16,67%
0%
30%
10%
50%
Incidence
Causing agent
Incidence
Incidence
Nature of injury
40%
30%
20%
10%
0%
A00
B00
C00
D00
E00
F00
Type of Agent
Classification
Incidence with leave (*)
Ambulatory
Hosp.
Minor
Serious
Moder.
3
0
3
0
0
8
1
5
1
2
11
1
8
1
2
Average (**)
Market Average (**)
Exposed capitas
2,83%
(*) Incidence =
Capita
Months
202
21
Average exposed
capitas.
111317
11,84%
(**) AAnnualized.
Does not include
reaggravating cases
8666
Accidents
19
20
Grupo Los Grobo S.A.
f) Training Program
152
6437
184
45.181,99
Number of Courses
Hours per person dedicated to Training (*)
Persons
u$s Invested (**)
(*) Formed by Integration Workshop Hours, Internal Workshops such as Oracle Discover for final
users, Presentation of the Corporate Volunteering,
Videoconference, Negotiation Workshop, Management Styles, among others.
(**) It also includes other expenses, such as trainers’ travel expenses.
2005/06 Annual Report and Financial Statements
g) Training
Average Training Time
per Person
32 Hs.
In a general sense, the annual training
plan meets the needs presented in
the strategic plan. The administration
of training courses is performed in
the Grobo Management area: talent
development, certified under ISO
9001/2000 Standard.
Training courses can be classified
according to the specificity degree:
• Personal Training: Encourage the
learning of new tools, methodologies
and personal skills to add value to
a position a person occupies, or
to develop a new function (high
specificity degree). And training
courses that aim at developing skills
and abilities. In the last category, the
organization includes all persons
regardless of their position. Among
them, the development of skills such
as team management, leadership, time
management, etc.
• By business units or areas: Specific
trainings in subjects related to the
competence area for the whole work
team. For example, courses with the
Stocking Center about updates of
legal, financial documents, reception
etc. Or training courses in skills that
we need to improve in a specific
area, as detected in the performance
review. For example, a business
course for the stocking area, resulting
from the 2005 review.
• To the entire company, network and
open to the community: Trainings
are organized to meet market needs,
or to deal with topics of general
interest, for instance, the agribusiness
postgraduate course of FAUBA. This is
the second consecutive year that this
course is delivered in our offices of
Carlos Casares, videoconferences with
Harvard or with the Cardiovascular
Institute, together with Fundación
Emprendimientos Rurales Los Grobo.
We measure the impact of trainings
by following a predetermined process
in which the first step is when the
manager informs course achievement
expectations to Talent Management
and to those people that will be trained.
In a second instance, after the training,
people send us a report where they
evaluate the course and the manager
informs us the impact of the training on
employees’ performance. This allows us
to evaluate the quality of the training,
the effectiveness of achievement
expectations and the pertinence of
repeating the course for other persons.
Training courses are delivered by
well-known consultant companies,
educational centers, and different
business units, for example, the stocking
sector opens a course on futures and
options to company members interested
in such topic.
h) Training by Level
25%
15%
60%
Mandos Medios
Gerentes y directivos
Resto del equipo
i) Talent Management
Our commitment is to watch for the
development of people and their
environment, by offering them the best
place, clear rules, transparency, personal
development opportunities, etc. This
is part of our RSE (Corporate Social
Responsibility) strategy aimed at the
welfare of people forming the company.
The Ministry of Labor, Employment and
Social Security of the Argentine Republic
has selected Grupo Los Grobo SA as a
model company for the generation of
decent employment.
Staff Selection
In Grupo Los Grobo, the selection
process meet the growth needs
established in the Strategic Plan for each
of the business units and/or current
needs, for example, breakdown of tasks
for excessive labor or the growth of a
sector.
Talent Management, according to
the certification of ISO 9001/2000
Standard, sets forth the recruitment
and integration of staff following four
participative procedures that involve
different members. They will decide by
consensus and using different tools the
incorporation and rotation of people
in the presence of an actual need.
Procedures are Recruiting, Selection,
Interview and Hiring.
During the recruiting process, the
Manager of the business unit or area,
together with Talent Management,
define the position to be occupied and
the profile and the Competence Map is
weighted (18 common competences
that meet the need of our business).
After the profile has been designed, the
Talent Management area is responsible
to carry out the selection of applicants.
Each person incorporated to the
Organization attends the integration
workshops, whose goal is to develop
basic skills about the business
environment, training talents through
the analysis and discussion of the
mission, values, history, culture and
diversity of Grupo Los Grobo.
Training courses are established through
the “Annual Training Plan”, where we add
specific training courses requested by
managers for their teams, or by the staff
own initiative, according to the technical
skills or competence that people should
learn.
This way, Talent Management, aligned
to the knowledge paradigm of society,
defends constant and planned training
according to market needs and the
introduction of best practices, in order to
look for the continuous improvement of
people and the organization.
As regards the education level of
people, we have 42% of people with
a university or college degree, and
a high percentage of this group has
postgraduate diplomas.
People Satisfaction
We have measured consecutively
for two years the satisfaction degree
of employees through the Work
Environment Poll, and during 2005
we performed it with Great place to
work, an institution specialized in the
measurement and analysis of work
environment in companies. The global
result showed a 73% of employee
satisfaction.
Consequently, to investigate critical
indicators, the company generates
21
22
Grupo Los Grobo S.A.
DIRECTORIO
PRESIDENTE
Alejandro Stengel
Juan Goyeneche
Andrea Grobo
SAC
C. Echeverrygaray
Gustavo Grobo
P.C.G.
Paula Marra
Sistemas
Talentos
Rel. Instit.
Auditoría
RSE
LGI
dialogue spaces in all its levels. All
members of the company participate
in them (presentation of the strategic
plan, review of the company’s vision
and mission, etc.), focus group
techniques, where people talk about
common problems and propose
plans to improve. In the case of
distant branches or stocking plants,
such as auditing, systems and Talent
Management, among others, they
gather information and transfer
Management tools to people for
their implementation and for policy
alignment.
All the information gathered and
the possible action plans, proposed
in the work environment poll, and
in the analysis of critical variables, is
used to generate specific plans that
aim at a continuous improvement
and enhancement of satisfaction
and motivation standards of all
people involved in the organization.
For example, as regards internal
SGR
CS
Proseme
LGA
LGS
IND
communication, spaces have been
institutionalized to ensure managers
can communicate or transmit the
company’s short and long term
guidelines. At the same time, thematic
committees have been created (events,
quality, corporate, etc.) that are formed
by people of different business units or
sectors.
j) Diversity and Opportunity
Executive directors
Male
2
Female
2
Corporate managers
Male
3
Female
2
Operative managers
Male
9
2
Female
Fideic.
Directores ejecutivos
2,5
2
1,5
1
0,5
0
Gerentes corporativos
3,5
3
2,5
2
1,5
1
0,5
0
Gerentes operativos
10
8
6
4
2
0
Masculinos
Femeninos
Total women in executive or management positions
30%
70%
Masculinos
Femeninos
2005/06 Annual
Memoria
Report
y estados
and Financial
contables
Statements
2005/06
Human Rights
The group has recently joined the
Global Compact.
http://www.unglobalcompact.org/
ParticipantsAndStakeholders/search_
participant.html
k) Adherence to the Global Compact
The value chain subscribes to
the ten Principles of the Global
Compact, which are explained
below:
Human Rights
Companies should:
1. Support and respect the
protection of human rights
2. Do not support abuses to rights
Working Conditions
Companies are requested to:
3. Support freedom principles for
trade unions and the right to
collective bargaining
4. Eliminate compulsory and forced
labor
5. Abolish any type of child labor
6. Eliminate discrimination in
employment and labor
Environment
Companies are requested to:
7. Support the preventive approach
related to environmental
challenges
8. Promote a greater environmental
liability
9. Encourage the development and
promotion of environmentallyfriendly technologies
Corruption
10.Companies should act against
corruption in all their forms,
including extortion and bribery.
23
24
Grupo Los Grobo S.A.
Society
l) Community
Activities are carried out from
Fundación Emprendimientos Rurales
Los Grobo developing programs
aiming at generating a social capital
in towns of the interior of the country,
aiming at articulating a network that
comprises long-term commitments
and the creation of dialogue spaces
and collective construction, with public
agencies, companies, NGOs and public
organization.
Today, four programs are under
implementation: POTENCIAR,
Corporate Volunteering “Solidarity and
Responsibility”, Enterprise Incubator
and we support the School for Young
Entrepreneurs, today CEA No. 17 of
Carlos Casares.
1. POTENCIAR Program: Tries to
comprehensively deal with the
problems of educational institutions
of the province of Buenos Aires,
established in towns with no more
than 20,000 inhabitants. Admission
is through a contest for institutional
projects aimed at crystallizing
and encouraging PEI (Institutional
Educative Projects), therefore the
program name. The Foundation
contributes with financing,
counseling and follow-up, technology
support (PCs, Internet, audio and
video), trainings. The awards include
the painting donated by BASF
Argentina to embellish the building,
bibliography and training courses
given by Editorial Troquel.
This program intends that selected
institutions receive during one
year the highest and best quality
of contributions to improve in a
centered and sustainable way the
objective situation before having
access to the program.
2. Enterprise Incubator: CDI
schools, promoted through the
CDI Foundation, work for the social
inclusion of people with low income
by means of their digital inclusion.
People learn computing systems
and citizenship by developing and
implementing social, institutional or
production projects, using the PC
as a tool. Therefore they learn to use
available technologies and at the
same time they generate a collective
construction and dialogue space.
Through the CDI Foundation and
Microsoft, the Foundation for Rural
Entrepreneurship (Fundación
Emprendimientos Rurales) will set up
3 schools: one in Carlos Casares, one
in Saladillo and another one in the
mill the company has in Chivilcoy.
They are located within our Enterprise
Incubator program, since after two
years of support, the CDI centers
should be self sustainable and self
managed, becoming a mini PyME
(small and medium-sized companies)
of instructors and coordinators, who
are also trained to professionally carry
out their function.
3.School for Young Entrepreneurs:
This school came up as a Foundation’s
initiative; today, it is a public
school. Its purpose is to foster the
entrepreneur spirit of young people.
Students attend voluntarily in a shift
different from their formal studies
and the duration of the course is 3
years. During this time, students learn
to start productive, service, social or
environmental entrepreneurships,
and they put them into practice.
This school is formed by Corporate
Volunteering, since company
specialists, for instance marketing,
are the ones that give classes about
product design, logo and trademark
among others.
We wish to generate a space
where young people may use their
imagination and their desires to carry
out their ideas, working in teams and
with social commitment.
The Foundation has a procedure
manual that includes the procedures
performed during one year to manage
their programs, communication
and promotion policies, the strategy
for alliances and participation, and
improvement plans.
We measure our actions using a
scale that allows us the selection of
projects presented to the contest, and
then we compare the results of their
implementation. Criteria used: Social
impact, innovation degree of projects
to solve social problems, replicability
potential, sustainability and self
management, budget, consideration
and alliances or articulation.
4.“Corporate Volunteer Program:
Solidarity and Responsibility”:
It aims at decentralizing the actions
of the foundation, thus extending
the action area and promoting
that the members of the Network
(employees, vendors, clients, family
members, etc.) decide and involve
directly in private social investment.
Volunteers detect community needs,
design and manage projects, put
them into practice and they are the
link between the Foundation and
beneficiary institutions.
• Alliance strategy, collective
construction of social capital and
participation in dialogue spaces
and knowledge exchange:
We foster participation in discussion
forums, corporate organizations,
universities, programs and projects of
other civil society organizations and
in the design and implementation of
public policies.
•
•
•
•
Alliances with other civil society
organizations, companies and the
public sector:
HSBC (Support to the School
of Young Entrepreneurs), BASF
Argentina, CDI Foundation, Banco
Galicia Foundation, Editorial Troquel,
Hermanos Roca Foundation (Joint
development of the Potenciar
Program).
Ministry of Education, Culture and
Labor.
Social Universal Forum – Members
of Foundation Groups – Argentine
Contacts –
Series of videoconferences with the
University of Harvard, and about
health and prevention with the
Cardiovascular Institute.
Gustavo Grobocopatel is Director of the
following institutions: AAPRESID –
ASAGIR – FAUBA – AEA -UTDT – Bioceres
– AACREA – IDEA – INDEAR.
At a local level, shareholders have a
recognized participation in institutions
such as the Rotary Club and the Israelite
Society of Carlos Casares.
2005/06 Annual
Memoria
Report
y estados
and Financial
contables
Statements
2005/06
25
26
Grupo Los Grobo S.A.
m) Corruption
The hiring policy is established in the ISO
processes that we have certified, since
we categorize them according to their
critical and alternative nature and they
have a quality Standard and a follow-up
process.
It makes a special emphasis on
training courses to different vendors in
order to help them to formalize their
organizations. As of this year, they are
informed about and sign the Global
Compact form. Furthermore, they
are audited not to digress from the
principles..
n) Political Contributions
It actively contributes with the Center
for the Implementation of Public Policies
for Equity and Growth (CIPPEC). Such
institution establishes measures to
improve the state of the educational,
health, fiscal, political, judicial and public
administration systems, detecting
needs, opportunities and obstacles to
implement better public policies. It also
provides counseling to the government
and promotes the best practices,
directly participates in the design and
implementation of new public policies
that contribute to a better performance
by the Government.
o)Ethical Code (Intended for to
employees, collaborators and
network members)
We are economically sustainable; we
generate profitability based on the
lowest costs, using state-of-the-art
technology and the best business
proposals, and through the development
of long-term relationships.
We are environmentally responsible;
we take care of the planet by using
and promoting production systems
that provide the best performance and
increase land value and its productive
capacity.
We have Corporate Ethics of social
responsibility. An open company to an
open society.
We are clear and honor our obligations.
We respect labor and workers, both
material and intellectual work, because
it dignifies people and it constitutes a
means to satisfy their needs.
We always have in mind that workers
are the most valuable resource of
the company, inclined towards the
improvement of their intellectual level,
enhancement of their living standards
and family group.
We are discrete based on a conduct
standard, about all our operations related
to their professional exercise, unless
we have authorization from the parties
involved to disclose information.
We hold those positions for which we
are properly trained and we try that
results translate into benefits for those
of us who provide services and that
such benefit has an effect on the society
where we live.
We generate a reasonable work
environment, watching for the health
and safety of our staff.
We respect rules in forces (fiscal, labor
and commercial rules)
We actively participate in the
development of local communities
where we act.
We train people in our network,
increasing their “employability”.
We promote innovative forms of
association with clients, vendors and
institutions. This allows us to develop
individual capabilities for the benefit of
the group. Los Grobo and their network
members have grown together through
innovation and cooperation.
We have high quality standards.
We generate fluent communication and
consistent information, and we develop
environments of knowledge generation
for our interest groups.
We are aware that we are going through
a common path that we all share,
providing to the network all our capacity
and knowledge, trying to obtain the best
results. (Network Manual of Grupo Los
Grobo)
Self-evaluation and continuous
improvement of the commitment
arise from management processes.
Especially from internal audits of Talent
Management processes and from the
possibility to participate in different
awards that expose our company to
external opinions and comparisons.
Product Liability
p) Products and Services
The activity that we perform and that
entails the labeling of products is the
production of seeds, and we comply
with the dispositions of INASE (Argentine
Seed Institute).
Certification process: The National
Certification of INASE is a system
that consists in an official control
process either direct, or, through
agreements with other provinces or
public institutions and also through
the accreditation of technical trained
inspectors granted to agricultural
professional experts with a university
degree, that exercise their profession
within a private scope. Said process starts
by checking the origin of the seed to
be sown, continues with the inspection
of production lots; of the harvest and
ends with the conditioning; packaging
and labeling of the final product,
i.e. the supervised seed. This type of
seed is visually distinguished from the
identified seed, due to the presence of
the packaging, an official label or stamp
adhered to the particular label that
states that the content of said package
belongs to the indicated type of seed.
The final recipient of such type of seed,
generally, is the Argentine agricultural
producer. Furthermore, supervised farms
and seedbeds perform deliveries to
other national supervised seedbeds, that
carry on with the multiplication scheme
of different categories and that, at the
end of the process, arrive to producers
as main input for their production. On
the other hand, pursuant to market
demand, export seed operations are
also performed; such seeds are certified
under this system.
2005/06 Annual
Memoria
Report
y estados
and Financial
contables
Statements
2005/06
Other Data of Interest
q) Award to the Socially
Responsible Entrepreneur (1)
On October 18, 2006 Grupo Los
Grobo received an award, with
other 10 companies and based
on 83 works presented, in the fifth
Award to the Socially Responsible
Entrepreneur organized by the
Social Universal Forum.
The Forum is a civil non-profitable
association, presided by an
internationally known personality,
the French theologian and political
scientist, Jean-Yves Calvez. In
addition, it is formed by recognized
NGOs leaders, company managers
and members of different
religious orders, focused on a
common subject: Corporate Social
Responsibility.
The work presented to the contest
was called “Path to the Fourth
Sector” and outlines the integrated
strategy of the RSE of the company,
on topics such as relation with the
community and local development
improvement, environmental
sustainability, knowledge
management, programs to foster
the value chain and personal skills,
among others.
The Program wants to align RSE
actions with the purpose of Grupo
Los Grobo to become a social
and competitive company that
is proactive in the development
of the Argentine fourth sector,
incorporating in a conscious and
planned way the best practices of
the RSE in all their processes, sectors
and business units.
(1) For more information: http://
www.foroecumenico.com.ar/
premio06.html
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Grupo Los Grobo S.A.
Rute 5 Km. 309. Carlos Casares
Province of Buenos Aires, Argentina
Phone: 02395-459000 rollover lines
[email protected]
www.losgrobo.com