Annual Report 2011 - 2012 - United Breweries Limited

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Report of the Directors (contd.)CONTRACT FARMINGYour Company’s belief that social initiatives are more acts of partnership than philanthropy is best reiterated with itscontract farming initiative with barley-cultivating farmers. Your Company initiated the Barley Information Centre - BarleyHubs to ensure that there is ample knowledge dispersal with regards to barley cultivation.Your Company is making efforts to improve the conditions of farmers by helping them grow high quality and highyielding barley varieties in Punjab, Haryana, Rajasthan and Uttar Pradesh. This has provided us significant goodwill withthe State governments. This initiative has helped the farmers to improve the quality of their barley crops.To evaluate the present production technology and to transfer advanced technology to farmers, your Company hastied up with ITC’s Agricultural Division and have conducted 600 demonstrations to prove higher yields of its patentedimproved varieties of barley in different states like Punjab, Haryana, Rajasthan and Uttar Pradesh.WATER MANAGEMENTWater is probably the most essential and basic of our needs, and also a key input material for our industry. It is in ourown interest to conserve water, given the water dependence of our industry; hence our investments into technologicalknowhow in dealing with water and its purification gives us an advantage when it comes to providing local communitieswith a source of potable water.Our water conservation and regeneration schemes are devised to provide a sustainable benefit to the local communitiesaround our breweries. Recent initiatives such as Project Jeevan Dhara - distribution of potable water to villagersduring the harsh summers under the aegis of UBL Odisha - have been highly acclaimed by the authorities and localpopulation alike.We have been optimising our beer brewing and bottling process to reuse and reduce the water consumption. In thepast years, we have made a significant reduction in the usage of water, and we aim at achieve a world class efficiency inwater consumption in the coming years. Our ongoing initiatives such as installation of state-of-the-art equipment, suchas waste water recycling systems and use of Reverse Osmosis plants, have led to production of and re-use of water inseveral areas of our plants. Also the change of systems and processes has led to reduction of consumption and disposalof water.Furthermore, UBL has been demonstrating the use of ETP treated water for crop cultivation to local farmers. The initialwork in this aspect has been done with respect to barley and vegetable cultivation in UBL Golconda and UMBL Srikakulam.The latter is also entering into a Memorandum of Understanding with the Acharya NG Ranga Agricultural University fora collaborative research project on the use of brewery effluents for farming.OTHER INFORMATIONINTERNAL CONTROL SYSTEMYour Company has established a robust system of internal controls to ensure that assets are safeguarded and transactionsare appropriately authorized, recorded and reported. Internal Audit evaluates the functioning and quality of internalcontrols and provides assurance of its adequacy and effectiveness through periodic reporting. Your Company’s internalcontrol systems are robust and are routinely tested and certified by statutory and internal auditors. The process adoptedprovides reasonable assurance regarding the effectiveness and efficiency of operations, reliability of financial reportingand compliance with applicable laws and regulations.In order to continuously upgrade the internal control system, to be in line with international best practices and toensure proper corporate governance, your Company has implemented risk assessment, control self assessment and legalcompliance management. These have been updated during the year under review.The internal control system evaluates adequacy of segregation of duties and reliability of management informationsystems, including controls in the area of authorization procedures and steps for safeguarding assets. Periodic reviewsare carried out for identification of control deficiencies and opportunities for bridging gaps with best practices along withformalization of action plans to minimize risks.Your Company believes that the overall internal control system is dynamic, and reflects the current requirements at alltimes, hence ensuring that appropriate procedures and controls, in operating and monitoring practices are in place.Internal Audit reports to the Audit Committee and recommends control measures from time to time.8HUMAN RESOURCESDuring the year under review, significant steps have been taken towards redefining HR processes, systems and initiatives.Your Company has implemented an online performance appraisal system for executives and staff. This system was
Report of the Directors (contd.)implemented to increase visibility, speed, and transparency, with the intent to integrate the performance appraisal systemwith other employee life-cycle events (such as succession planning, training and development and compensation). Wehave also revamped our collaboration portal Sampark – as part of your Company’s organizational theme on ‘redefine,re-invent, re-charge’. This portal has been designed taking into consideration a multi-dimensional need of collaborationand engagement across a distributed workforce. Both of these initiatives were implemented with a long term focus onorganisational performance and collaboration.Your Company has a diverse employee base across many locations and providing a platform for learning which isrelevant, distributed, advanced and offers a consistent experience is a significant asset to your Company. During the year,we have launched the UBL University which provides an advanced distributed learning platform to its widely dispersedemployee population and brings about a culture of learning through different forms and means. Further, our focus onorganic capability building at our breweries has shown significant traction, with more than 35% of the trainings at ourbreweries being conducted by internal subject matter experts and an increased focus on around-the-machine training.In a complex industrial relations environment, the long-term-settlement processes that have been completed or initiated inthe year under review had a specific focus on alignment and engagement with our associates. The year under review hasbeen exemplary with regards to industrial harmony. We continued to significantly improve our performance in the areasof productivity, hygiene and safety through focused initiatives.As on March 31, 2012, the total employee strength at United Breweries Limited stands at 2,489. Your Company has notoffered any stock options to the employees during the year under review.Your Directors place on record their sincere appreciation to all employees for their contribution towards the continuoussuccess of the organization.SUBSIDIARY COMPANIESMaltex Malsters Limited is the only subsidiary in which your Company holds 51% of equity capital. A copy of its Accountswill be provided on request to any member, on receipt of such request by the Company Secretary at the Registered Officeof your Company.The statement pursuant to Section 212 (1) (e) also forms part of this Annual Report.CONSOLIDATIONAs per the Listing Agreement, the Consolidated Accounts conforming to the applicable Accounting Standards areattached to this Annual Report.CASH FLOW STATEMENTA Cash Flow Statement for the year ended March 31, 2012 is appended.LISTING REQUIREMENTSYour Company’s Equity Shares are listed on the Bombay Stock Exchange Limited, National Stock Exchange of IndiaLimited and the Bangalore Stock Exchange Limited. The listing fees have been paid to all the Stock Exchanges for theyear 2012– 2013.Your Company has obtained in principle listing approvals of stock exchanges where listed, in respect of 709,578 EquityShares issued and allotted to the shareholders of erstwhile UB Ajanta Breweries Private Limited upon amalgamation asmentioned above during the year under review.DEPOSITORY SYSTEMThe trading in the equity shares of your Company is under compulsory dematerialization mode. Your Company hasentered into Agreement with National Securities Depository Limited and Central Depository Services (India) Limited inaccordance with the provisions of the Depositories Act, 1996 and as per the directions issued by Securities and ExchangeBoard of India. As the depository system offers numerous advantages, members are requested to take advantage of thesame and avail of the facility of dematerialisation of the Company’s shares.FIXED DEPOSITSThere were no outstanding fixed deposits at the end of the previous financial year. Your Company has not invited anyFixed Deposits during the year.ADDITIONAL STATUTORY INFORMATIONThe statement containing particulars of employees as required under Section 217 (2A) of the Companies Act, 1956forms a part of this Directors’ Report and is annexed. Particulars required under Section 217(1)(e) are also annexed.9
Page 2: CONTENTSReport of the Directors 1Re
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Page 8 and 9: March 31, 2012 stood at Rs.1,005.1
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c) Accounting for Amalgamation:The
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Notes to Financial Statements (cont
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(4) Transaction with Heineken Brouw
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STATEMENT PURSUANT TO SECTION 212(1
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Consolidated Balance Sheet as at Ma
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Consolidated Cash Flow Statement fo
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Notes to Consolidated Financial Sta
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Preference sharesNotes to the Conso
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6. LONG-TERM BORROWINGSNotes to the
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- All asset and liabilities of the
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45. DERIVATIVE INSTRUMENTSParticula
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102Notes:
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Annual Report 2011 - 2012 - United Breweries Limited

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