Blue Star takes pride in the fact that the invaluable technical and business knowledge it has acquired in 65 years as an organization in the field of air conditioning and refrigeration is perhaps the richest in the country. During the review period, with the substantial increase in business volume, the Company increased its total head count to 2565 (including the absorbing of 124 employees from Nasser Electricals) as on March 31, 2008, an increase of 18% over the previous year, while Net Sales grew by 39%. Organizational productivity continued to grow in terms of sales per person and value added per person. The focus on people development continued at the same pace with special attention to developing the technical skills of dealers and business associates. Training in soft skills for Blue Star employees was enhanced with the introduction of some new training programmes. In order to sustain the positive culture of the Company, a new corporate programme was introduced called ‘The Blue Star Way’. This programme is intended to create an awareness of, and strengthen the Blue Star Way of working.
A 360-degree feedback system continued to be used to measure behavior of Senior Managers pertaining to the Corporate Values and Beliefs. Environment, Health & Safety (EHS) has gained relevance as a new management discipline in recent times. In order to improve its performance in the EHS domain, the Company decided to provide a corporate focus by creating a new department called ‘Environment, Health & Safety’. The EHS Department will be responsible for creating standards and conducting workshops to sensitize all employees and business partners on the EHS norms to be followed in the course of business. The Welfare initiatives include providing life insurance cover to all employees through HDFC Standard Life Insurance, annual medical check-ups for employees above the age of 40 years, and the Company subsidizing the medical insurance premium for dependent parents.
CORPORATE SOCIAL RESPONSIBILITY
Eco friendly initiative
Blue Star has made significant progress towards minimizing and even eliminating the environmental hazards resulting from CFCs in certain refrigerants used for cooling. As a matter of fact, Blue Star is one of the few companies selected in India for funding by “The Multilateral Fund for the implementation of the MONTREAL PROTOCOL”. Blue Star has already introduced ‘ozone friendly’ centrifugal chillers using HCFC-123, the safe refrigerant replacing CFC-11. Blue Star also markets absorption chillers which use water as refrigerant. All Blue Star reciprocating chillers already use HCFC-22 refrigerant which is friendlier to the environment than the older R-12. The Company actively promotes wider use of large refrigeration systems using ammonia as the refrigerant. In fact, Blue Star is a member of the International Institute of Ammonia Refrigeration, USA.
Blue Star firmly believes that organizations must look beyond making profits and should contribute to the development and welfare of the society. This attitude is most evident in the outreach initiatives organized by Blue Star’s factories. Blue Star factories take active participation in providing temporary shelters and essentials for the victims of an earthquake, sponsoring health check-ups and health education programs in local schools. The families of operators are an integral part of social development. Blue Star gives them appropriate advice on personal matters, financial and investment matters. The family members are also imparted training on diverse subjects. They are taught English as well.
Blue Star’s factories have been exquisitely landscaped with lawns and flowering plants dotting the campus. Trees have also been planted on a proactive basis even outside the Blue Star factories. As a responsible organization, special ETP plants are installed to dispose off the wastes generated.
RISKS AND CONCERNS
The Company has in place an effective Risk Management framework under which all internal and external risks across the various businesses and functions are periodically identified, assessed and acted upon by the risk owners to minimize and mitigate their impact. These processes are also periodically reviewed to ensure their effectiveness.
The Company continues to satisfactorily address the various financial risks relating to interest rates, exchange rates and credit risks as well as operating risks arising out of high input costs, changes in technology, customer preferences, increasing size and complexity of contracts and competitive pressures.
While the strong fundamentals of the Company and it’s sound financial base have placed it in a strong position to face the vagaries of the market, the overall uncertain economic scenario coupled with local and global inflation and the high price of oil are causes for concern and consequently a slow down in the economy could impact the growth of the Company to some extent in the coming year. The Company will continue to remain vigilant and will proactively take steps to mitigate the adverse impact, if any, arising out of these concerns.
The benefit of a mature business organization with 65 years of operational excellence is that there are several good systems in place. From a prospective employee point of v