Bsc Lindley 2008

8/12/2019 Bsc Lindley 2008

1/36

11Univ. Empresa, Bogot (Colombia) 7 (15): 11-46, julio-diciembre de 2008

Corporation Jos R. Lindley:Balanced ScorecardImplementation

Kety Lourdes Juregui Machuca*Jorge Martin Santana Ormeo**

Recibido: mayo de 2008. Aprobado: julio de 2008

RESUMENLa Corporacin Jos R. Lindley es una de las organizaciones ms importantes que operan enel pas, con una prestigiosa trayectoria en el mercado de gaseosas a travs de su marca lderInca Kola. Esta empresa se ha caracterizado por mantenerse a la vanguardia del sector, el cualen los ltimos aos se ha mostrado altamente competitivo.

Con la nalidad de mantener su liderazgo, hacer frente con xito al difcil entorno del mercadolocal e incursionar en nuevos mercados internacionales, la Corporacin Jos R. Lindley se ha preocupado constantemente por incorporar losofas y herramientas de gestin que le permi-tan asegurar su sostenibilidad en el tiempo, con una visin de futuro. En este sentido, decidiimplementar un Balanced Scorecard (BSC), como una herramienta para medir y mejorar su productividad y e ciencia, en el marco de su estrategia corporativa. En otras palabras, el BSC

le facilit monitorear el grado de acierto en la puesta en marcha de su estrategia.En este contexto, el caso ilustra cmo se realiz el proceso de implementacin de un BSC enla Corporacin Jos R. Lindley, mostrando la complejidad del proceso que involucr recursos nancieros y una dedicacin importante de la organizacin, en especial provenientes de la AltaDireccin y del rea de Sistemas de Informacin para el Soporte Tecnolgico.

Asimismo, el caso muestra cmo es posible traducir una estrategia en un grupo de objetivos ymedidas concretas, a travs del BSC. En funcin a la relacin causa-efecto, vincula los objetivos,con sus respectivos indicadores, iniciativas estratgicas y planes de accin correspondientes.

* Profesora asociada en el rea de Administracin. PhD in Management, IESE, Universidad de Navarra,Espaa. Mster en Sistemas de Informacin, ITEMS, Campus Monterrey, Mxico. PADE en Adminis-tracin, ESAN, Per. Post Graduate Diploma in Personal Computer, CICC de Tokio, Japn. IngenieraIndustrial, Universidad Nacional de Ingeniera de Lima, Per. Actualmente es Director Asociado del programa doctoral de ESADE - ESAN. Correo electrnico: [email protected]

** Profesor principal del rea de Operaciones y Tecnologas de Informacin de la Universidad ESAN.Ph.D. en Administracin, Florida International University, EE.UU.; M.Sc. en Sistemas de Informacin,HEC Montreal, Canad; Postgrado en Ingeniera de Sistemas, ENSIMAG Grenoble, Francia. Correoelectrnico: [email protected]

01RevUniver Empresa15KJauregui.indd 1101RevUniver&Empresa15KJauregui.indd 11 2/11/09 12:53:50 PM2/11/09 12:53:50 PM

8/12/2019 Bsc Lindley 2008

2/36

12

Corporation Jos R. Lindley: Balanced Scorecard Implementation

Univ. Empresa, Bogot (Colombia) 7 (15): 11-46, julio-diciembre de 2008

Palabras clave : cuadro de mando integral, sector de bebidas gaseosas, implementacin de laestrategia, indicadores de desempeo.

ABSTRACT

Jos R. Lindley Corporation is one of the most important organizations that operates in thecountry with a prestigious tradition in the market of sodas trough its leader brand Inca Kola.This enterprise has as its main character keeping in the vanguard of the sector, demonstratinga high competitive level in the recent years.

With the aim of keeping its leadership, facing successfully the dif cult environment of thelocal market and entering international markets, Jos R. Lindley Corporation has constantlyworried about incorporating management philosophies and tools that allow guaranteeing itssustainability in the time with a vision about the future. In this sense, it decided to implementa Balanced Scorecard (BSC), as a tool to measure and improve its productivity and ef ciency,in the framework of its corporative strategy. In other words, the BSC facilitated monitoringthe degree of accuracy in the implementation of its strategy.

In this context, the case illustrates how the process of the implementation of a BSC in Jos R.Lindley Corporation was performed, showing the complexity of the process that involved nan-cial resources and an important dedication of the organization, specially those ones who comesfrom the High Direction and the Information Systems Area to provide technological support.

In addition, the case shows how it is possible to translate a strategy into a group of objectivesand speci c measures trough the BSC. Based on the cause-effect relation, it links the objectiveswith its respective indicators, strategic initiatives and corresponding plans of action.

Key words: Balanced Scorecard Sodas sector, implementation of the strategy, performanceindicators.

The dream that Jos Lindley had in1910 to open a small soda plant in R-mac, Lima, Peru, is still a live in thegreat Corporacin Jos R. Lindley.Its star product, the prestigious IncaKola soda brand, has attracted the preference of most Peruvians since1935, when it was launched into themarket. It has positioned itself inthe very heart of consumers as it is

widely related with national identi-ty, and longed for by the increasingnumber of Peruvians living outsidethe country.

The rms growth and developmentwas based upon the Lindley familyseffort and their philosophy to keepahead in the soda sector. In the pastyears, this sector has become one


8/12/2019 Bsc Lindley 2008

3/36

13

Kety Juregui, Martin Santana


of the most competitive within the

Peruvian market, as a result of aggressive commercial strategies displayed by the different brands. This compe-tition has grown more intensive since1999, when the biggest traditional brands (of which Inca Kola was aleading one) became immersed inintensive and dynamic publicity and promotional campaigns. It also be-came involved in a price war, whichwas generated in the attempt to copewith the new competitive strategiesused by small brands, mainly fromthe inside of the country, whose value proposal aimed at offering remark-able low prices.

Under this scenario, Manuel Sala-zar Corvetto, the General Managerat Corporacin Jos R. Lindley, inan attempt to maintain leadership inthe sector and to enable the rm to bemore competitive, hires the servicesof London Consulting Group at the beginning of 2001. They were re-quested to conduct a comprehensivereview of all the business processesand recommend the overall restruc-turing of the rm.

London Consulting Group worked

closely with the staff from all the rms areas to implement the proces-ses needed to improve the marketingsystem, recover lost sales, and prepa-re technical organizational manualsfor each area, so that they could helpoptimize the staffs performance.At the same time, another team was

formed to identify the improvements

that will serve to attain fast savingswithout investment. This was allsupplemented by the developmentof a managerial skills workshop forall top and middle managers fromCorporacin Jos R. Lindley S.A.(Corporacin Jos R. Lindley S.A.,2001a).

As a result of this work, a Manage-rial Indicators System was createdfor all management areas to followon a weekly and monthly basis. Theimplementation of a Balanced Sco-recard system was also initiated inorder to measure and improve pro-ductivity and ef ciency throughoutthe organization, so that the firmcould maintain its leadership in thesector in 2001 (Corporacin Jos R.Lindley S.A., 2001b).

Four years have gone by since the beginning of this implementationand Manuel Salazar re ects upon therelevance of this decision, as well asits implications for the future.

A LITTLE OF HISTORY

In 1910, a British couple who had

just arrived in Peru, Jos RobinsonLindley and Martha Stoppanie deLindley, as well as their eight chil-dren: Martha, Victoria, Ana, Jos, Nicols, Alfredo, Antonio and Isaac,established a rm that elaborated and processed soda in a modest buildingof 200 m2 in the district of Rmac,


8/12/2019 Bsc Lindley 2008

4/36

14



one of the oldest of the city of Lima,

the capital of Peru. This was a sodafactory called Santa Rosa de Jos R.Lindley e Hijos S.A., named after themain saint of the city of Lima.

Soda production was performedthrough an artisan process carriedout by the entire family. In 1918,the firm purchased the first semi-automatic machine, which alloweda remarkable productivity increase.By 1928, the rms site measured anarea of approximately 1.400 m2 andall processing equipment had beenrenewed. Its growth was a re ectionof the high acceptance that their pro-ducts had in the market.

Publicity campaigns started a fewyears later in 1935, using the massmedia resources available at that time.Then, the brand that would made the rm famous was launched with thesloganThere is only one Inca Kolaand there is nothing like it. Up to this point, soda names had been taken af-ter the fruits they were made of, suchas Orange Squash or Lemon Squash, but the firm decided to look for a brand and a formula that could not beassociated to avors directly identi ed

with fruit. Inca Kola was a productconsisting of different Andean citricfruits, and had a pleasant unidenti a- ble avor. It was bottled in plain glass bottles labeled with paper.

In 1945, Jos Lindleys youngestson, Isaac Lindley, took charge of

the rm and promoted the sales of

Inca Kola nation-widely. In 1948, he bought the rst fully-automatic ma-chine and increased production up toan average of 36 bottles per minute.In addition, he was very concernedabout the welfare of his workers andwanted them to feel as part of theInca Kola family. With this in mind,he developed production workshopsfor the workers wives and summerschools for their children.

In the following years, technologicalinnovations continued for product processing and bottling. Paper-labeled bottles became glass bottles printed with the Inca Kola logo andan Inca image (the pre-Hispanicemperor in Peru) in high relief. Like-wise, new more demanding control,hygiene and quality regulations wereintroduced following the advancesof the time.

Since 1972, Inca Kola has coveredthe entire Peruvian territory and itssuccess motivated the Lindley orga-nization to continue modernizing itsindustrial process; thus, new machi-nery was acquired, state-of-the-arttechnology was applied in its critical

processes and the installed capacitywas increased. Its advanced machi-nery allowed bottling between 400and 1.000 units per minute. And itsevolution continued. In 1983, PET plastic bottles of 1-liter, 1 -liter and2-liter capacity were launched, andin 1996, the acquisition of a German


8/12/2019 Bsc Lindley 2008

5/36

15



bottling line called Krones allowed

an increase of the average bottlingup to 1.000 bottles per minute for themedium-sized product.

In 1997, the different rms formingthe Lindley Grup, which carried outthe different parts of the production process, joined to establish Corpora-cin Jos R. Lindley.

In 1999, Corporacin Jos R. Lin-dley made a strategic alliance withCoca Cola Company, by which themultinational company acquired50% of the corporation, and agreedto enlarge Inca Kolas distributionand to initiate its distribution in theinternational market. This informa-tion is more detailed in the StrategicAlliance section.

By 2001, the Corporacin Jos R.Lindley had already transformed intoa rm with state-of-the-art technolo-gy. US$10.5 million were invested innew bottling equipment that year.

In 2004, Corporacin Jos R. Lindley acquired Embotelladora Lati-noamericana (ELSA), which was incharge of Coca Colas manufactur-

ing and management in Peru, andassumed its activities since then.Through this acquisition, the Lind-ley Corporation strengthened andconsolidated its leadership in Peru,and Coca Cola entrusted its strategic partner to be in charge of its operat-ing bottling activities.

During the past years, work has been

done to restructure the marketing anddistribution areas, which has allowedthe system to be improved, and now,90.000 outlets are being served inLima.

Appendix 1 depicts some of the ima-ges that illustrate the rms historicalevolution.

During the year 2005, it was ableto maintain the ISO 9001 and ISO14001 certi cations that it had ma-naged to obtain in 2001. And, it alsocompleted the internal and externalaudits for quality management andenvironmental management in itseleven industrial plants. In addition, itinitiated the construction of ef uentstreatment plants at the Rmac, Zrateand Callao factories, aiming at rea-ching environmental excellence inits operations and a culture of qualitythat could bene t all its consumers(Sociedad Nacional de Industrias,2006). At present, it develops its pro-duction operations within an area of20.000 m2. In relation to this, ManuelSalazar states that before the year2010, a new mega plant will be builtthat will demand a US$60 million

investment; this infrastructure willgather the ve existing plants andnew machinery.

Appendix 2 presents the corporationsindividual annual financial state-ments for the 1999-2005 period. Themain xed assets of the partnership


8/12/2019 Bsc Lindley 2008

6/36

16



are located in the industrial plants of

Lima, Callao, Jauja, Trujillo, Are-quipa, Cusco, Iquitos, Sullana andIca. In 2005, Corporacin Jos R.Lindleys social capital went up toover US$181.550 million.

A STRATEGIC ALLIANCE

When Corporacin Jos R. Lindley perceived that it would be very dif -cult to withstand for any longer theunequal battle with its main compe-titor in Peru, Coca Cola Company,it started searching a foreign partnerthat will capitalize the rm in order tomultiply the rather reduced presenceof Inca Kola abroad. It was preciselyCoca Cola Company the rm that be-came its strategic ally from 1999.

Coca Cola Company acquired 50%of the corporation as part of an agre-ement that would increase its force inthe Latin American market by expan-ding Inca Kolas distribution throughCoca Colas distributor (ELSA) to thefew areas in Peru where it had notreached yet and to the internationalmarket. In this way, Coca Cola Com- pany acquired full rights of the IncaKola brand outside Peru, 20% of Inca

Kolas bottling plant in Lima and 50%of Inca Kola in Peru.

In this respect, Mr. Salazar states:Coca Colas basic contribution toJos Lindley is its international ex- perience, technical issues and qualitycontrol; as for other aspects, (brand)

competition continues. Furthermore,

John Lindley, the President of Cor- poracin Lindley, comments: CocaCola was the best image partner capa- ble of expanding the national avorsoda further around the world.

In addition to this alliance, whichstarted in 1999, Corporacin Jos R.Lindley acquired Embotelladora La-tinoamericana (ELSA), Coca Colas producer in Peru, in 2004, expectingto transform the soda market in Peru.Appendix 3 details the location ofCorporacin Jos R. Lindleys dis-tributors in Peru.

As for exports, Inca Kola has a re-lative presence in the United Statesof America and in some Andeancountries. Manuel Salazar remarksthat this issue belongs exclusively toCoca Cola, that up to this date, it hasmarketed the product in its 30 divi-sions around the world. Nowadays,it is sold in Chile, Central Americaand the United States, where it hasthree plants in Los Angeles, Floridaand New Jersey; it is distributed fromthese sites to Asia and Europe. It isworth mentioning that before thealliance, the Inca Kola brand had al-

ready been sold abroad around 1970, but its presence was really boostedthrough the alliance.

PRODUCTS

The corporations social aim is to bededicated to the formulation, manu-


8/12/2019 Bsc Lindley 2008

7/36

17



facturing, bottling, selling, distri-

bution and marketing of fruit juice,carbonated soda, gasi ed drinks andnon-gasi ed drinks (with or withoutsyrup), fruit pulp and juice for the production of nectar and soda. It alsodistributes third-party products, sto-res and transports goods in general,manufactures all kinds of disposable packaging, and has entered the agri-culture and agro industry.

In 2005, market shares of the productsmanufactured and marketed by thecorporation were the following: gasi- ed drinks 59,1%; water, 26%; nec-tars, 44%; and isotonic drinks, 15%.

As for gasi ed drinks, 59,1% wasmainly obtained through the main brands, Inca Kola and Coca Cola,which had a share of 23% and 22%,respectively. Corporacin Jos R.Lindley produces and markets theInca Kola, Inca Kola Diet, Crush, Ca-nada Dry and Bimbo brands, as wellas the Coca Cola, Cola Light, Fanta,Sprite and Kola Inglesa brands, whichare bottled at ELSA, now part of thecorporation. It must be noted that IncaKola is manufactured and market inglass returnable bottles, non-returna-

ble glass, returnable plastic and cans;while Coca Cola is produced andmarketed in plastic non-returnable bottles and dispensers.

In relation to mineral water, the brands it produces and markets areSan Luis, San Antonio y Bonaqua;

the one with the highest sales is San

Luis. At the end of 2005, a new typeof avored mineral water, Dasani,was introduced in the market, withvarieties going from lemon non-ga-si ed drinks and active citrus slightlygasi ed drinks to mineral water wi-thout gas; all coming in several pac-kaging sizes.

As for nectars, the Frugos brand ismanufactured and marketed in non-returnable glass formats and tetra pack containers. Frugos is conside-red the leading brand in the Peruvianmarket.

The company only produces and mar-kets Powerade as an isotonic drink.

A LEADER IN SEARCH OF ALARGER MARKET

There are several characteristics thatcondition the performance of thesoda industry in Peru; perhaps, themost important is the relation established between the local bottlingfactories and the companies thathold the brands, which are normallytransnational. These latter ones offerthe rst ones their franchises for the

elaboration, marketing and distribu-tion of their products in given areasof the country.

Manuel Salazar remarks: Inca Kolais one of the few- not to say the onlyone- sodas in the world that has soldmore than Coca Cola in a national


8/12/2019 Bsc Lindley 2008

8/36

18



market. In 1994, Inca Kola took the

lead of the Peruvian market and sincethen it has maintained its rst place inspite of the competitors millionairecampaigns.

In 2002, Corporacin Jos R. Lind-ley concentrated 26% of the marketin Peru with Inca Kola, as shown inFigure 1.

That same years studies of last con-sumption statement placed Inca Kolaon the rst place with 37%, followed by Coca Cola with 25%. By then, a brand originated in the provinces,Kola Real1, occupied the third placewith 16%, although it had limited publicity and distribution.

According to recent information co-rresponding to the city of Metropoli-tan Lima for the period 2003 to 2005,Inca Kolas leadership continues asshown in Figure 2; it can be seen that

Coca Cola increasingly approaches

closer share levels to the leader inthe capitals market. This brand also belongs to the corporation.

The decline in internal demand bet-ween the years 1998 and 2002, aswell as the great-scale introductionof the so-called b-brands (cheap brands), such as Kola Real that in2005 reached 12,7% of the marketin Lima, exacerbated competitionwithin the soda sector; thus, encoura-ging a price war, seriously affecting profitability margins and pushingsome rms out of the market. Underthese circumstances, CorporacinJos R. Lindley was forced to rethinkand establish strategies that wouldallow it to keep its leadership.

Manuel Salazar, General Managerof Jos Lindley, comments on the proliferation of cheap soda produced by small bottling factories in provin-

Figure 1. Peruvian Market Share per Brands

Others34%

Pepsi

7%

Kola Real8%

Coca Cola25%

Inca Kola26%

Source : Conde, 2003.


8/12/2019 Bsc Lindley 2008

9/36

19



ces, which have taken an important percentage of the local market dueto the economic crisis. He states thefollowing: There are two markets:one of franchises and one of lower prices. If low-priced sodas disappear,consumers will not buy franchisedsodas due to their low income, so thecompetition is between them.

From these words, it may be inferredthat Mr. Salazar thinks that thesesmall competitors are only coveringa market segment that did not consu-me soda before.

STATE OF THE SODAMARKET IN PERU

Annual sales for soda in 2002 werecalculated in US$350 million. Asfor production volume, it has been es-timated that the sector has beengrowing at an average pace of 10%

annually. This growth is attributed both to the launching of new presen-tations that matched the preferencesof the diverse socioeconomic layers,and to signi cant price reduction thatthe industry underwent during the past years.

In the 1985-2002 period, the apparenttotal consumption of soda (national production plus imports, minus exports) registered an average annualgrowth rate of 9,6%. Consumptionwent up from 557 million liters in1995 to 1.272 million liters in 2004,as shown in Figure 3.

Consumption levels are mainly de-termined by the populations growth,acquisition capacity, price, taste and preference patterns, and weather.

Nevertheless, in spite of the increa-se of production volume, Peru still

Figure 2. Sales Shares in Metropolitan Lima per Brands

2003 2004 2005

42,2%

5,5%11,3%

19,5%

21,5% 21,5% 22,3%

21,8%

12,7%8,1%

35,1%

20,3%

11,3%7,8%

39,1%

OthersCoca Cola

Pepsi ColaInca Cola

Cola Real

Source : CCR S.A.


8/12/2019 Bsc Lindley 2008

10/36

20



shows a consumption level per capita below that of the region: 40 annualliters against 69,2 annual liters, whichis the regional average (Banco Wie-se Sudameris, 2002). According to arecent research done by INDECOPI(2005), between 1995 and 2004, con-sumption per capita rose from 21,9to 46,2 liters, with an average annualincrease rate of 7,9%. This is widely

surpassed by Venezuela (62,0 liters),Chile (89,6 liters), Argentina (71,0liters), Brazil (67,2 liters) and Mexico(121,80 liters) (INDECOPI, 2005).

The price of soda has gone down by 23% since 1999, as a result ofthe introduction in the market of theb-brands. According to the abovementioned study, the nominal price

Figure 3. Soda Consumption in Peru (in millions of liters)

1400

1200

1000

800

600

400

200

01995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Source : INDECOPI (2005). With data taken from the Ministry of Production of Peru and INEI

Figure 4. Soda Price Index (in %)

14013012011010090

7080

60

E n e - 9

5

J u l - 9 5

E n e - 9

6

J u l - 9 6

E n e - 9

7

J u l - 9 7

E n e - 9

8

J u l - 9 8

E n e - 9

9

J u l - 9 9

E n e - 0

0

J u l - 0 0

E n e - 0

1

J u l - 0 1

E n e - 0

2

J u l - 0 2

E n e - 0

3

J u l - 0 3

E n e - 0

4

J u l - 0 4

E n e - 0

5

J u l - 0 5

Nominal Real

Nominal: Jan; Real: Jul

Source : INDECOPI (2005). With data taken from INEI


8/12/2019 Bsc Lindley 2008

11/36

21



index for soda has shown an irregu-

lar trend in the past years. However,the real price index clearly shows adecreasing trend. Between January1995 and October 1995, for instance,the nominal index recorded an avera-ge monthly decreasing rate of 0,04%,whilst, the real index presented amonthly decreasing rate of 0,41%,as shown in Figure 4.

According to data taken from JPMorgan, Peru is one of the countriesin the region where soda is cheaper. Agreater demand and the introductionof new brands are enabling a greaterexpansion of the operations of some rms in foreign markets. This is thecase for Kola Real, which has al-ready entered the market in Ecuador,Venezuela, Mxico and Guatemala.

Traditional entrance barriers in thismarket were the use of brands, thecapital required for operations, anddistribution channels. Now, these

barriers seem not to be working;

for instance, investments costs arelower.Table 1 presents brand offerand its corresponding producers and/or bottling plants for the year 2005.

Table 1. Main Soda Brands Marketed inthe Local Market

Producer Brands

ELSA1/ Coca Cola, Coca Cola Light,Fanta, Sprite, KolaInglesa.

J.R. Lindley2/Inca Kola, Inca Kola Diet,Crush, Canada Dry, Bimbo.

Ajeper Kola Real, Big Cola, Saborde Oro.

Ambev Triple Cola, Concordia, Pep-si, 7Up, Mirinda.Don Jorge Don Isaac, Per Cola

1/ 2/ At present merged in Corporacin Jos R. Lindley (November, 2005).

Source : INDECOPI (2005). With data taken from several rms and the Ministry of Pro-duction in Peru

In addition, the market share in thePeruvian market per bottling enterpri-se for 2002, is shown in Figure 5.

Figure 5. Peruvian Market Share per Bottling Firm

ELSA31%

JR Lindley29%

Embotelladora Rivera19%

Industrias Ananos13%

Others8%

Source : Conde (2003).


8/12/2019 Bsc Lindley 2008

12/36

22



Moreover, tax load for this sector is

very high because soda is imposeda 17% tax on selective consump-tion (ISC), one of the highest in theregion (Edilcex, 2005). This cons-titutes a serious problem becausethe demand for soda is elastic, andtherefore, tax cannot be transferredto the consumer.

Soda makes up near 1,9% of the ba-sic family basket. At present, the Pe-ruvian market presents an interestinggrowth potential due to the reducedconsumption per capita of this pro-duct, versus the other countries in theregion, as noted before (Banco WieseSudameris, 2002).

During the past years, the installedcapacity of the sector has reached inaverage 64,8%, which means an ave-rage idle installed capacity of 35,2%.However, used capacity has been

decreasing at an annual average rate

of 2,48% between 1995 and 2004,and during the last year it reached57,4%, as shown in Figure 6. There-fore, rms could cope with a higherdemand (INDECOPI, 2005).

BALANCED SCORECARD IMPLEMENTATION

The Balanced Scorecard (BSC)translates a rms mission and strat-egy into a set of understandable per-formance measures (indicators), sothat the strategy could be understood,communicated and measured; thus,serving as a basis for all the activi-ties. Moreover, the indicators allowmonitoring the accuracy level ofstrategy implementation (Kaplan & Norton, 1996). In order to respondto the rms vision and strategy, theBSC uses four business perspec-tives:

Figure 6. Capacity used in the soda sector 1995-2004 1/ (in %)

8070605040

30

1020

01995

71.9

1996

66.5

1997

73.5

1998

65.7

1999

62.8

2000

66

2001

62.5

2002

61.9

2003

60.1

2004

57.4

1/ The data available does not allow the distinction of the production of soda with sugar andwithout sugar, or that of water, so the data refers to all of them.

Source : INDECOPI (2005). With data taken from the Ministry of Production of Peru


8/12/2019 Bsc Lindley 2008

13/36

23



A nancial perspective that es-

tablishes the

nancial objectivesthat must be attain in order to sa-tisfy the shareholders interests.

A customer perspective that es-tablishes the objectives that will permit to meet the customersneeds in order to reach the established nancial aims.

An internal processes perspecti-ve that establishes the processesin which excellence needs to beachieved in order to satisfy cus-tomers.

A learning and growth perspec-tive that establishes the way inwhich the firm must learn andinnovate to attain all the goals proposed in the other perspec-tives.

BALANCED SCORECARDEVOLUTION INCORPORACIN JOS R.LINDLEY

Manuel Salazar remarks:

In order to implement the Balanced

Scorecard, Corporacin Jos R. Lind-ley underwent a process of maturity,where an Integrated Dashboard was rst developed and named Manage-rial Control Panel () [which] con-sisted of 253 managerial indicators.They were classi ed in three levels:Corporate, oriented towards the mea-

surement of the overall Corporations

goals; Managerial, oriented towardsthe measurement of the business andsupport units goals, that is to say, atfunctional level; and Operational,oriented towards the measurementof the speci c objectives of strategicoperations.

Mr. Aldo Neyra, Systems Manager,who was in charge of implementingthe Balanced Scorecard, adds:

when we started, strategic plan-ning was not yet linked to the de- nition process and to the follow-up of the managerial indicators inthe Managerial Control Panel. Du-ring a second stage, there was anattempt to align the indicators withthe businesss strategic goals, whichresulted into a feedback process.Finally, the BSC methodology wasadopted, executing the entrepreneu-rial Strategic planning rst; and then,implementing it with the help of theBSC-E (Balanced Scorecard Exten-ded) technological application.

It is worth mentioning that beforethe Balanced Scorecard was imple-mented, the corporation was working

on strategic projects, such as Activit based Costing, which besides per-mitting to link the rms needs and priorities, it offered a sustained framefor resource management, as well asexposing the differences in quality practices through the segments anddepartments. Aldo Neyra maintains


8/12/2019 Bsc Lindley 2008

14/36

8/12/2019 Bsc Lindley 2008

15/36

25



the businesss definition, so as to

clarify the reasons for the existenceof the rm, as well as its future projection. The organizations mission,vision and values were reviewed andthis was in charge of the Manage-ment Committee, which was formed by the General Manager and all the rms Managers.

The rms vision was established as:

a leading and pro table organiza-tion that manages the non-alcoholicdrinks business all over Peru, with projection into the Andean region.The rms mission was de ned in thefollowing way: To meet the needs ofthirst satisfaction, self-reward, mealenjoyment and food supplementing by ef ciently producing and distri- buting non-alcoholic beverages andnectars of the highest quality brands,strengthening our staffs competencyand promoting team work (Corpora-cin Jos R. Lindley, 2005a).

For this purpose, the following va-lues were established for the organi-zation: commitment (assuming as-signed tasks with responsibility andmotivation), identi cation (valuing

the organization and its culture, tra-dition and products), quality (achie-ving excellence throughout the valuechain and promoting continuousimprovement), integrity (acting withethics, solidarity, environmental andsocial responsibility), productivity(working with operative and admi-

nistrative efficiency at all times),

and innovation (applying creativityacross all the operations).

After reviewing the business de ni-tion, a strategic analysis was conduc-ted in the rm in order to identify thestrategic position and potential thatwould orient future actions, evalua-ting the corporations external andinternal environment, and finally,establishing the Strengths, Weaknes-ses, Opportunities and Threats Ma-trix (SWOT). This analysis sought toidentify the strong and weak pointsin uencing the rms actions; both,the ones it could handle directly asthey represented variables under theresponsibility of the internal mana-gement, and those it could not han-dle as they belonged to the externalenvironment. The analysis of theSWOT matrix allowed the de nitionof strategic initiatives, followed bythe immediate application of the Del- phi2 method to select and prioritizethose initiatives in order to de netheir relative relevance, and establish priorities based upon it.

The strategic objectives stemmedfrom these prioritized initiatives,

defining the corporations strate-gic map, which was elaborated byusing the concepts included in theBalanced Scorecard. This is how thestrategic objectives were organizedaccording to the four map perspec-tives: nance, customers, internal processes, and learning and growth;


8/12/2019 Bsc Lindley 2008

16/36

26



and the relation cause-effect among

them was also de

ned. Later on, thestrategic map for 2005 will be shownas an example.

Next, the budget corresponding toeach of the strategic macro objectivesof the business was allocated, takinginto account the initiatives involved.Thus, the strategic framework de -ned for the corporation was linked tothe speci c requirements of concreteresources needed for the attainmentof each strategic objective; thus, lin-king strategic planning with its laterexecution.

The corresponding managerial in-dicators and the goals they werewilling to achieve were de ned inorder to closely follow up the attain-ment of the strategic objectives. Themanagerial indicators are ratios es-tablished to measure results in quan-titative form, by which the level ofachievement for each objective can be known. When these are comparedto their corresponding desired goals,the deviation degree that may have been generated from what was inten-ded can be clearly identi ed and thiswill allow immediate actions for co-

rrecting such deviation. Conductiveindicators were established to eva-luate the objective achievement forthe learning and growth and internal processes perspectives, as well asresult indicators related to the objec-tives of the client-based and nancial perspectives.

Finally, detailed plans were de ned

for each of the strategic initiatives inorder to establish, with greater clarityand accuracy, the courses of actionneeded to execute each strategic ini-tiative. This involved the elaborationof speci c programs, and the appo-intment of people in charge, termsand resources.

Many people from the corporation participated in all these processes, allof which were organized in severalgroups, such as the Managerial Com-mittee, a Facilitators Committee, andvarious Work Teams per Operativeand Functional Management.

STRATEGIC MAP

The Balanced Scorecard at Corpo-racin Jos R. Lindley focused onthe four perspectives that sustainthis methodology, and the correspon-ding Strategic Map was established.Different key areas were developedwithin each of the perspectives andthe specific objectives were spe-ci ed. These were related under acause-effect approach, in such a waythat logical coherence could be es-tablished upon the implication that

each speci c objective had for theattainment of the expected results ofgreater level.

Indicators were established for eachof the proposed strategic objectivesin order to measure performance,follow up its evolution and take co-


8/12/2019 Bsc Lindley 2008

17/36

27



rrective measures for deviation. They

became a powerful tool for strategymanagement.

Likewise, each strategic objectivewas associated to the strategic ini-tiatives, which in turn were detailedwith speci c plans and actions.

It is in this way that the BalancedScorecard established the followinghierarchy: perspectives, areas, stra-tegic objectives, indicators with theircorresponding corrective measuresaccordingly to the observed devia-tions, and strategic initiatives withtheir corresponding action plans.This can be clearly viewed in Figure

8 that represents the hierarchy and

the BSC-E application modules implemented at Corporacin Jos R.Lindley, which translated the issuesestablished into a strategy.

The Strategic Map is annually re-viewed and updated according tothe results of an analysis that guidesthe priorities to be taken every year.This is why the strategic map becamea dynamic tool that facilitated theunderstanding, measurement, eva-luation and correction of deviationsfrom the strategy.

In order to achieve this, most ma-nagerial indicators and their corres-

Figure 8. Hierarchy and BSC-E Technology Application Modules

Perspective

Key Areas

Objetives

Indicator Strategies

Plan

Act

Act

Corr. Act2Corr. Act1

Corrective measure

Balaced Scorecard

Strategy management

Plan

Action plans

Plan

Source : Corporacin Jos R. Lindley S.A. (2003a)


8/12/2019 Bsc Lindley 2008

18/36

28



ponding goals are reviewed mon-

thly; although, some indicators arereviewed on a daily or weekly basis,especially the operative ones; simi-larly, all initiatives are reviewed oncea month.

Some examples related to one part ofthe developed systems are presentedin order to achieve a better unders-tanding of the Balanced Scorecardimplemented by Corporacin JosR. Lindley.

One example of the 2005 strategicmap is shown in Figure 9, in whichyou could visualize the four pers-

pectives. Every Corporate Manage-

ment (pointed out at the bottom ofthe graph) has objectives and plansaligned with the strategic objectivessignalized on the map.

The objectives in each perspectiveare described below:

Finance: the aim of this perspec-tive is to generate more pro ta- bility in the rm, so speci c objectives were established, such asensuring the fund operative owand complying with the establis-hed Operative Budget.

Figure 9. Strategic Map of Corporacin Jos R. Lindley

1. Generate more pro table

2. Asure fundoperative ow

3. Comply withOperative Budge

5. Consolidate sales anddistribution system

7. Improve qualityservice for costumers

and costumers

8. Maintain enviromentaland quality standarts

10. Reduce cost andincrease productive 9. Maximize the use ofinformation and technological

resourses

12. Implant and integralmanagerial model for RR

Learning and Grown

Internal processes

Clients

Finance

Human Res. Systems Image & Instituc. Tchnical Marketing Finances

13. Consolidateorganizational culture

11. Strengthenre lationswith interest groups

4. Increase marketvolumenes and share

6. Develope morestrategies

Source : Corporacin Jos R. Lindley S.A. (2003b)


8/12/2019 Bsc Lindley 2008

19/36

29



Clients: Among the objectives of

this perspective, we have: increa-sing market share and volumes,consolidating the sales and distribution system, developing strate-gies for new business opportuni-ties and improving service qualityfor clients and consumers.

Internal Processes: They focusedon three key objectives: maintai-ning environmental and qualitystandards, maximizing informa-tion use and technological resour-ces, and nally, reducing costsand increasing productivity.

Learning and Growth: They ai-med at strengthening relations

with interest groups, implemen-

ting the Human Resources Inte-gral Managerial Model, and con-solidating organizational culture.

The managerial indicators, strategicinitiatives and action plans were de-veloped in detail based on the stra-tegic maps, all of which together co-rrespond to the Balanced Scorecardsconcepts. Figure 10, extracted fromthe BSC-E system, shows a detailedexample of managerial indicators based on the corporations strategyfor the year 2003.

As it may be observed, the four perspectives are de ned at the rst level:1. Finance; 2 Clients; 3. Internal Pro-

Figure 10. Managerial Indicators



8/12/2019 Bsc Lindley 2008

20/36

30



cesses; and 4. Learning and Growth.

These perspectives correspond to thetraditional structure of an IntegratedDashboard.

At the second level and within each perspective, the key areas are de -ned. In the example in Figure 10, thekey areas for the Client perspectivecan be seen disaggregated. These keyareas are:

Segmented marketing Opera-tions Management

Lima Volume/Share Lima Mar-keting Management

Provinces Volume/Share Pro-vinces Marketing Management

At the third level, and within eachkey area, the strategic objectivesare de ned, which are precisely theones illustrated in the correspondingStrategic Map. In the example in Fi-gure 10, the disaggregated strategicobjectives of the Lima Volume/Sha-re Lima Marketing Managementkey area can be appreciated, corresponding to the Clients perspective.These strategic objectives are:

Increase market share in Lima

Increase sales volumes in Lima

At the fourth level, and within eachstrategic objective, the managerialindicators are defined, which are

the ones that enable the measure-

ment of the objectives achievementlevel in quantitative form. In theexample in Figure 10, the disaggre-gated managerial indicators for thestrategic objective can be apprecia-ted: incrementing sales volumes inLima corresponding to the key areaLima Volume/Share Lima Marke-ting Management belonging to theClients perspective. These manage-rial indicators are:

Ful llment of the visits plan perdistributor - daily

Fulfillment of the Soda SalesBudget - monthly

Pre-sales effectiveness Daily

Percentage of the total mix pene-tration (distributors) Monthly

Increase of sales volumes in Lima(only Lima distributors)

On-line Pre-sales

Lost sales from distributors Daily

As explained before, the managerialindicators are ratios that measureeach indicators achievement quan-titatively. Each of these ratios res- pond to a formula, which is usuallyexpressed in percentage values, asillustrated in the graph. Although,it could also be expressed in unitary


8/12/2019 Bsc Lindley 2008

21/36

31



time values or other measurements,

according to what is more convenientto measure.

As in most of the cases, for the Ba-lanced Scorecard of CorporacinJos R. Lindley, a traf c light systemhas been established, which con-sists in marking with colors (green,yellow and red) the level of achie-vement reached by each indicator,in permanent comparison with theinitially proposed goal. Thus, if theindicators value is at similar or hig-her levels of the goal, the traf c lightwill be in green light indicating thatthe objective has been achieved.If the indicators value is lower thanthat of the goal but at acceptable

levels, the traffic light will be in

yellow, indicating that although thegoal has not been reached, it is in progress and some improvement ac-tions may be needed. Finally, if theindicators value is below the goalat levels below those acceptable, thetraf c light will be in red indicatingan emergency situation in need ofimmediate corrective measures.

The following is the description ofa detailed example of strategic ini-tiatives and action plans based uponthat established in the corporationsstrategy for the year 2003, and whichcan be seen in Figures 11 and 12 ex-tracted from the BSC-E system.

Figure 11. Strategic Initiatives

Source : Corporacin Jos R. Lindley (2003a)


8/12/2019 Bsc Lindley 2008

22/36

32



The strategic initiatives needed to

reach the strategic objectives arede ned within each strategic objec-tive. In the example, for the strate-gic objective related to having theideal and necessary staff, belongingto the Staff Development HumanResources Management key areaand corresponding to the Learning and Growth perspective, the followingstrategic initiatives have been established:

Optimization project for the Hu-man Resources Management

Implementation of E-learningtechnology

Each of the strategic initiatives has

its corresponding action plan, whichis a program or activity needed toattain the strategic initiative. The fo-llowing graph shows the action planassociated to the strategic initiativeof:e-learning technology implemen-tation, allocation of the people incharge of each of them, timetables, progress level or condition.

The Managerial Committee, a Faci-litators Committee and several workteams for each operative and functio-nal management participated in thisde nition process. The frequency ofreview and updating of indicatorsand goals was variable: daily, weekly

Figure 12. Action Plans



8/12/2019 Bsc Lindley 2008

23/36

33



or monthly. Initiatives were reviewed

every month.BSC-E TECHNOLOGICAL

APPLICATION

Aldo Neyra, Systems Manager, com-ments: The technological applica-tion supporting the strategic mapwas implemented based upon theestablished objectives: the systemcalled BSC-E (Balanced ScorecardExtended) is a software that enablesto translate all the strategic plan-ning process into a follow-up andcontrol system. The system wasimplemented in June 2002 and itstechnological architecture is shownin Appendix 4.

Corporacin Jos R. Lindley has

integrated all its business processesalong the supply chain with the ERPSAP R/3 system. In addition, it hasintegrated its client-distributors allaround the country through its in-formation systems, setting up thelargest Intranet of the soda industryin Peru.

Hence, all business processes aresystematized, from the acquisitionof raw material to the placing of products at the outlets, through pur-chasing management, warehousing, production, plant maintenance, dis-tribution and sales. Likewise, all support processes, such as accounting,finance and human resources, arealso integrated. Figure 13 shows thecorporations systems architecture.

Figure 13. Systems Architecture

Balanced ScorecardImplemental since September 2001

ABC CostingImplemental since November 1998

SAP R/3Implemental since May 1999BASIS IIImplemental since November 1999

Source : Corporacin Jos R. Lindley (2003c)


8/12/2019 Bsc Lindley 2008

24/36

34



The Balanced Scorecard obtains data

input in two ways: through an auto-matic interface from the transactio-nal systems (ABAP/4 and RPG ILE programs), and manually, updated byusers in charge.

The system has automatic tasksoriented towards the validation ofthe plans effect operation established upon the obtained indicators.In case of divergence, e-mail alertsare sent on plan and goal ful llment.(Corporacin Jos R. Lindley, 2002,2003a, 2003b, 2003c).

BALANCED SCORECARDIMPLEMENTATION ANDUPDATING

As described so far, the implemen-tation of the Balanced Scorecardrepresented the Strategic Map struc-turing and the corresponding Integra-ted Dashboard, which is formed bythe strategic managerial indicatorssystem based on the established Stra-tegic Planning. They were all suppor-ted by the BSC-E application.

As part of the implementation, it wasnecessary to align the organization

with the strategy by translating the planning into individual operati-ve plans performed by each AreaHead or Manager. Their ful llmentis measured within the annual pro-cess of Performance Measurement, by which efforts within established

levels are rewarded through the be-

ne

ts and compensation system.This process involves 130 of cerswho have defined and committedAction Plans in the Annual Perfor-mance Commitment (CAP), which isagreed at the beginning of the period.During the year, the Action Plans progress is systematically monito-red through the support of anothertechnological application ( ProjectServer) , which operates under a Webenvironment and enables direct up-dating of progress by the of cers incharge, and real-time control by the person above them.

The corporations top managementhas a monthly specific meeting(Monthly Results Meeting) to reviewthe ful llment progress of the main plans and programs, according to theestablished indicators and goals byusing a standard format.

The implementation of these proces-ses can be improved; thus, improve-ments are constantly introduced. Oneaspect sought is the generation of thehighest possible level of automationof data loading, so that it facilitates

review and analysis work, withoutdistracting the managers and of cerstime in operative tasks that do notadd any value.

On the other hand, alternatives fornew service platforms are checked


8/12/2019 Bsc Lindley 2008

25/36

35



periodically, so that they can provide

more added value.Currently, corporate of cers are re-viewing the support platform in orderto automate even more the data loadcoming from the different transac-tional systems with the support ofnew technological tools ( ReportingServices).

The established indicators are beingimproved, so that they can better re- ect the ful llment of the strategicobjectives established.

For the 2005 period, it was decidedto implement individual BalancedScorecards for each Management based upon the strategic alignmentde ned at central level, which implied the involvement of a greaternumber of of cers in the use of support methodology and application;this implied additional training andinstruction processes.

Alongside the above mentioned, itwas necessary to develop speci cindicators for the Balanced Score-card of each Management and todisaggregate the data loaded in the

corporate Balanced Scorecard. A process of greater complexity wasgenerated, which provided the be-ne t of involving the organizationsmain groups in the implementationof the strategy.

The Balanced Scorecard implemen-

tation at Corporacin Jos R. Lindleyconsidered the following factors:

Involvement of the top mana-gement as the projects sponsor,demanding total commitment.

Systems Area performing as anagent of change.

Formation of the projects organi-zation team, including a facilita-tor per functional management.

Consistent transactional infor-mation registered in the rmssystems.

Permanent use of the BalancedScorecard as a control tool of the rm at all levels, either strategicor operative.

BALANCED SCORECARDIMPACT

Aldo Neyra comments that mana-gers consider that the implemented

Balanced Scorecard is their strate-gic tool, which allows them to carryout the planning and follow-up of

the whole rm because it registersand shows on-line the behavior ofthe managerial indicators relatedto the planned strategic goals andobjectives. It made possible a bet-ter alignment between the strategic


8/12/2019 Bsc Lindley 2008

26/36

36



objectives and the operative plans,

a greater participation and com-mitment of the of cers in charge ofthe operation along the managerial process, and the possibility to ack-nowledge in a direct and individualmanner contributions done by of -cers to the attainment of the organi-zational objectives. As Mr. ManuelSalazar, the corporations GeneralManager, puts it:

the Balanced Scorecard is a toolthat has enabled us to conduct a clo-ser follow-up of the problems thatgenerally arise in the various areasof the rm, thanks to the indicatorsthat we have developed. This allowsus to improve all these aspects andavoid the repetition of previous com- plications; thus, controlling a high percentage of the situation within thecorporation

The corporations top managementidentify the following bene ts gai-ned through the implantation of the

Balanced Scorecard:

Establishment of bidirectionalcommunications of the strategic priorities and of the corporations

organizational performance. Establishment of an integral mea-

surement system that controlsand tracks all the rms processesthrough managerial indicators inorder to monitor the ful llment ofthe objectives established; thus,

the Balanced Scorecard has be-

come the

rms command andmonitoring center.

Process-oriented organizationand results-based culture.

Formulation, implementation andcontrol of the corporations Stra-tegic Plan through the BalancedScorecard.

Strategy linked with operations(at detailed level, for instance,commercial managerial indica-tors).

Immediate response to deviationsof the operative performance ver-sus the established goals (throughmanagerial indicators).

Performance management model based upon objectives, whichuses the Balanced Scorecard asa support tool for staffs results- based reward.

Conversion of the corporationsgreat amount of data into use-ful information for decision-ma-king.

In concrete terms, since the imple-mentation of the Balanced Scorecardin Corporacin Jos R. Lindley up todate, the most important indicatorshave shown a favorable evolutionat the four basic perspectives le-vel. Just to mention some examples,


8/12/2019 Bsc Lindley 2008

27/36

37



market share has increased, the ma-

nagerial effectiveness index for dis-tribution shows a superior ef ciencylevel, the level of production losseshas become reduced, the responsetime for attending requests of theSystems area has reduced; all ofwhich impacts favorably in the rmseconomic and nancial results.

References

Edilcex (2005). Arancel de adua-nas de importacin-exportacin2005 . Lima: Edilcex.

Astigarraga, E. (2004). El mtodoDelphi. Universidad de Deusto.Facultad de Ciencias Econmicasy Empresariales, Donostia SanSebastin. Consultado en: http://www.codesyntax.com/prospec-tiva/Metodo_delphi.pdf, el 8 de junio de 2006.

lamo, O. (2002). La mgica fr-mula de la Inca Kola. InstitutoInternacional de Gobernabilidad(IIG). Desarrollo Humano e Ins-titucional en Amrica Latina DHIAL. Consultado en: http://www.iigov.org/dhial/?p=36_07,

el 20 de septiembre de 2005.Banco Wiese Sudameris (2002).

Reporte sectorial de gaseosas .Lima: Departamento de EstudiosEconmicos del BWS.

Conde, R. (2003). Anlisis Industrias

Aaos (Kola Real) . Consultadoen: http://www.gestiopolis.com/recursos/documentos/fulldocs/ger/kolareal.htm., el 21 de sep-tiembre de 2005.

Corporacin Jos R. Lindley S.A.(2001a). Memoria 2001 . Lima:Corporacin Jos R. Lindley.

---.(2001b).Tecnologa de informa-cin en la estrategia de negociode la Corporacin Jos R. Lin-dley S.A. Lima.

---.(2002). Sistema: Balanced Sco-recard Extendido (BSC-E). Ma-nual de Usuario. Lima, presen-tacin.

---. (2003a). Gestin estratgica yel Balanced Scorecard. Lima, presentacin.

---.(2003b). Implantacin del Ba-lanced Scorecard en CJRLSA,

El Inkakolero , N 17 B.

--. (2003c). BSC en CJRLSA. Li-ma, presentacin.

---. (2005a). Misin; Valores.Consultado en: http://www.in-cakola.com.pe/quienes-mision.htm, el 21 de septiembre de2005.

---. (2005b). Balanced Scorecard.Implantacin del Balanced Sco-


8/12/2019 Bsc Lindley 2008

28/36

38



recard en Jrlsa. Consultado en:

http://www.incakola.com.pe/tecnologia-balance.htm, el 20 deseptiembre de 2005.

Indecopi (2005). Resumen docu-mento de discusin (versin pre-liminar): Una aproximacin delimpacto de las operaciones deadquisicin y fusin registradosen el mercado peruano de bebidasgaseosas. Consultado en: http://www.indecopi.gob.pe/boletin/gee/index/Gaseosas.pdf, el 21 deseptiembre de 2005.

Kaplan, R. & Norton, D. (2006). Alignment: Using the BalancedScorecard to Create CorporateSynergies . Boston: Harvard Bu-siness School Press.

---. (2004).Strategy Maps: Conver-ting Intangible Assets into Tangi-ble Outcomes . Boston: HarvardBusiness School Publishing.

---. (2000).The Strategy-FocusedOrganization: How BalancedScorecard Companies Thrive inthe New Business Environment .Boston, Mass.: Harvard Business

School Press.---. (1996).The Balanced Scorecard:

Translating Strategy into Action .Boston: Harvard Business SchoolPress.

Navarro, C. (2004). Hemos reen-

contrado el camino para manejarInca Kola como marca. Entre-vista a Manuel Salazar, gerentegeneral de la Corporacin JosR. Lindley, El Comercio , 16 deagosto.

Sociedad Nacional de Industrias(2006). Corporacin J.R.Lindleyinaugur moderna planta de tra-tamiento biolgico de e uentes. Pginaweb de la Sociedad Na-cional de Industrias. Noticias: 12diciembre del 2005. Consultadoen: http://www.sni.org.pe/modu-les.php?name=News& le=article&sid=149, el 20 de septiembrede 2005.

Surez, D. (2004). xito peruano:Grupo Kola Real se expande conxito en cuatro pases. Revista

Business , informe especial, fe- brero.


8/12/2019 Bsc Lindley 2008

29/36

8/12/2019 Bsc Lindley 2008

30/36

40



APPENDIX 2A. ANNUAL FINANTIAL SYSTEM (IN THOUSAND

OF NUEVOS SOLES1/

)General Balance (to December 31st, 2005, 2004, 2003, 2002, 2001, 2000 and 1999)

Account 2005 2004 2003 2002 2001 2000 1999

Assets

Current Assets

Cash and Banks 21.320 55.366 3.838 2.880 6.747 13.143 2.510 Negotiable Values (Accumula-ted net provision) 0 0 0 0 0 0 0

Receivable Trade Accounts(Accumulated net provision) 42.939 31.962 24.646 19.396 28.597 23.998 14.082Receivable Accounts fromRelated 15.032 26.492 16.981 9.208 0 0 920

Other Receivable Accounts (ac-cumulated Net Provision) 41.913 4.084 15.582 3.911 0 0 16.763

Inventory (Accumulated NetProvision) 74.244 37.241 29.896 25.194 24.556 31.376 37.448

Assets for Derivative FinantialInstruments 0 0 0

Prepaid Expenses 2.339 23.872 716 1.192 1.181 1.208 3.378Total Current Assests 197.787 179.017 91.659 61.781 61.081 69.725 75.101

Non- Current Assests

Long-term Receivable tradeaccounts 2.815 0 361 402 1.145 1.512 0

Long-term Receivable accountsfrom related 0 49.583 0 0 0 0 0

Other Long-term receivableaccounts 0 503 0 0 0 0 0

Inventory 0 0 0Permanent Invstment (Accumu-lated Net Provision) 4.470 480.526 10.472 14.322 2.459 0 92

Assets for Derivative FinancialInstruments 0 0 0

Real Estate Investments 0 0 0Real Estate, Machinery andEquipment (net depreciationand Accumulated devaloriza-tion)

365.891 153.009 144.994 152.269 157.021 189.026 219.978


8/12/2019 Bsc Lindley 2008

31/36

41



Account 2005 2004 2003 2002 2001 2000 1999

Intangible Assets (net write-offand Accumulated devaloriza-tion)

39.197 20.783 22.955 27.600 36.636 0 0

Income Tax and Deferred AsstsParticipation 23.182 17.210 21.310 17.320 15.825 2.519 0

Goodwill 305.554 0 0Other Assets 19.257 11.782 10.684 17.826 10.268 50.243 4.816Total Non Current Assets 760.366 733.396 210.776 229.739 223.354 243.300 224.886

TOTAL ASSETS 958.153 912.413 302.435 291.520 284.435 313.025 299.987

Liability and Equity

Current LiabilityBank Overdraft 1.632 0 0Bank Loans2/ 23.567 120.541 5.563 25.794 39.541 96.035 61.820Trade Payable Accounts 124.630 38.618 42.393 29.819 25.225 17.608 36.707Payable Accounts from Related 45.098 85.887 0 0 0 0 0Other Payable Accounts 57.295 29.146 10.042 10.892 9.951 39.991 13.552Current portion of long-termDebts 5.889 71.235 41.976 10.760 8.231 2.443 22.006

Liabilities for derivative Finan-tial Instruments 11.562 4.532 0

Total Current Liability 269.673 349.959 99.974 77.265 82.948 156.077 134.085

Non-current Liability

Long-term debts 281.686 266.617 86.990 94.283 78.686 16.987 24.774Payable Accounts from Related 0 0 0 0 0 0 0Liabilities for Derivative Finan-cial Instruments 0 17.711 0

Deferred Income (net) 0 17.029 0 0 0 0 0Income Tax and Deferred Liabi-lity Participation 39.018 21.649 21.310 17.320 15.825 11.468 12.183

Total No-current Liability 320.704 323.006 108.300 188.868 177.459 184.532 171.042

Total Liability 590.377 672.965 208.274 266.133 260.407 340.609 305.127

Contingency (Should only beshown when existent) 0 0 0 0 0 0 0

minority Stake 0 0 0 0 0 0 0Net Equty

Capital 580.981 118.340 210.039 205.921 202.478 321.887 258.349


8/12/2019 Bsc Lindley 2008

32/36

42



Account 2005 2004 2003 2002 2001 2000 1999

additional Capital 0 223.083 0 0 0 0 0Investment Shares 71.966 11.954 21.207 20.791 20.444 38.772 37.170Unfull lled Results 0 0 0Revaluation Surplus 0 0 0 0 0 0 0Legal Reserves 4.335 118 112 110 108 2.230 2.129Other Reserves 0 0 0 0 0 0 0Accumulated Results -289.506 -114.047 -137.197 -124.170 -116.054 -234.396 -168.703Accumulated Effect from fo-reign currency re-exchange 0 0 0

Total Net Equity 367.776 239.448 94.161 102.652 106.976 128.493 128.945

TOTAL LIABILITY ANDNET EQUITY

958.153 912.413 302.435 291.520 284.435 313.025 299.987

1/ In 2005, The average exchange rate was of US$1.00 = 3.30 nuevos soles.2/ In 2002 and previous years, this item included bank overdrafts

Source : Conasev


8/12/2019 Bsc Lindley 2008

33/36

43



APPENDIX 2B. ANNUAL FINNANCIAL STATEMENTS (IN

THOUSAND OF NUEVOS SOLES1/

)Pro t and Loss Statements

Account 2005 2004 2003 2002 2001 2000 1999

Operacionale Income Net Sales (Operational In-come)

753.722 357.158 265.391 257.400 225.245 222.430 224.167

Other Operational IncomeTotal Gross Income 753.722 357.158 265.391 257.400 225.245 222.430 224.167Sales Costs (Operational) -550.262 -286.803 -189.574 -180.041 -166.427 -157.390 -143.240Other Operational CostsGross Earning 203.460 70.355 75.817 77.359 58.818 65.040 80.927Operational Expenditure Sales Expenditure -136.014 -47.068 -39.278 -37.963 -48.471 -62.971 -67.665

Administrative expenditure -78.224 -33.229 -29.481 -26.030 -31.933 -30.705 -33.241Provision for assests Devalori-zation LossOperational Earnings -10.778 -9.942 7.058 13.366 -21.586 -28.636 -19.979Other Income (Expenditure)

Financial Income 4.546 2.220 240 1.408 1.622Financial Expenditure -59.593 -27.738 -13.551 -14.345 -15.656 -15.827 -18.540Shareholding on the results ofsubsidisry and af liated underthe equity sharing method

1.247 -47.951 -4.136

Pro t or loss for derivative -nancial instruments 4.273 -22.243

Other Income 63.001 3.874 3.535 1.054Other Expenditure -104.460 -17.093 -7.606 -10.732 -27.943 -16.875 -32.732Accumulate Effect for changesin accounting policiesResults for in ation Exposure 44.776 3.577 625 214 801 -5.239Results Before ExtraordinaryExpenditure, Participation andIncome Tax

-101.764 -77.971 -10.544 -6.143 -62.295 -60.537 -76.490

Participation of current anddeferred workers

7.622 -1.109 228 3.057 338 -170


8/12/2019 Bsc Lindley 2008

34/36

44



Account 2005 2004 2003 2002 2001 2000 1999

Current and deferred IncomeTax 19.731 -3.330 617 8.335 916 -460

Results before ExtraordinaryExpenditure -74.411 -82.410 -9.699 -6.143 -50.903 -59.283 -77.120

Extraordinary Expenditure(net participation and Inco-me Tax)

Results before Minority Stake -74.411 -82.410 -9.699 -6.143 -50.903 -59.283 -77.120Minority Stake 1.081

Net Earning (Lost) From the period -73.330 -82.410 -9.699 -6.143 -50.903 -59.283 -77.120

Preferred Stock Dividends

Net Earning (lost) Attributableto non-preferred shareholders -73.330 -82.410 -9.699 -6.143 -50.903 -59.283 -77.120

Basic earning (loss) for com-mon shares -0.1123 0.681 -0.043 -0.03 -0.23 -0.1964 -0.36

Basic earning (loss) for inves-tment shares -0.1123 0.681 -0.043 -0.03 -0.23 -0.1964

Diluted earning (loss) for com-mon shares -0.1123 0.681 -0.043 -0.03 -0.2182 -0.1964

Diluted earning (Loss) for in-vestment shares -0.1123 0.681 -0.043 -0.03 -0.2182 -0.1964

1/ In 2005, the average exchange rate was of US$1.00 = 3.30 nuevos soles.

Source : Conasev


8/12/2019 Bsc Lindley 2008

35/36

45



APPENDIX 3. GEOGRAPHICAL LOCATION OF DISTRIBUTORS

Source:XXXX


8/12/2019 Bsc Lindley 2008

36/36


APPENDIX 4. TECHNOLOGICAL ARCHITECTURE OF THE

BSC-E APPLICATION

Usersinterface

Internetexplorer

Web browser

Corporateintranet

Report

Basis

Databasesystem

Interfaces

Commercialsystem

Interfaces

Inspection or query interfaces with transactional systems Automatic data loading interfaces

TransactionalSistems

S P

QueriesExcel

Track

Source : Corporacin Jos R. Lindley S.A.( 2003a)

Bsc Lindley 2008

Documents

Transcript of Bsc Lindley 2008