A PROJECT REPORT ON COMPANY

ANALYSIS

BLUE STAR

Submitted by
M.samatha
082E1E0041

In partial fulfillment of
MBA II SEMESTER
2008-2009

Submitted to
Department of Business Management

VAAGESWARI INSTITUTE OF MANAGEMENT

SCIENCES
Beside LMD Police Station, Thimmapoor, Karimnagar- 505 481.
 VAAGESWARI INSTITUTE
OF
MANAGEMENT SCIENCES
Beside LMD Police Station, Thimmapoor, Karimnagar- 505 481

CERTIFICATE

This is to certify that

Mr./Ms.-------------------------------------------,

Roll No: ------------------------------------------------------ of

MBA II SEMESTER, During the academic year:

----------------------------, is completed his/her company

analysis report on

------------------------------------------------as per the

university norms .
Guide HOD

Principal

DECLARATION

I M.Samatha student of M.B.A. II SEM, Vaageswari institute of

management science, Karimnagar. Hereby declare that the project report on

company analysis of “BLUE STAR” is authentic work done by me as a part

of MBA II SEMESTER.

Place:
Date: NAME OF THE STUDENT
 ACKNOWLEDGEMENT

I am sincerely thankful to my Faculty supervisor Mr. RAJENDERA,

VAAGESWARI INSTITUTE OF MANAGEMENT SCIENCES, Karimnagar who
spared his valuable time and effort to guide me in the completion of project report.

Last but not least I would like to thank all my friends who stood by my Side through
times and helped me tide over many obstacles during the Completion of this project.
 CONTENTS

CHAPTER 1
Introduction
 Sector introduction
 Objectives of the study
 Limitations of the study
 Data Collection Methods

CHAPTER 2
Company profile
 History of the company
 Board of Directors
 Company structure
 Achievements of the company

CHAPTER 3
Ratio analysis
 Introduction on Ratio Analysis
 Importance & Limitations of Ratio Analysis

CHAPTER 4
Analysis & Interpretation
 Annual Reports (5 years)
 o Profit & Loss Account
o Balance Sheet
 Ratio Analysis
o Meaning & Importance of Ratio
o Ratio Table
o Graphical Presentation
o Interpretation

CHAPTER 5
Conclusions & Suggestions
Bibliography

INTRODUCTION:

Blue Star was founded in 1943, by Mohan T Advani, an entrepreneur of exemplary vision
and drive. The Company began as a modest 3-member team engaged in reconditioning of
airconditioners and refrigerators.

Within three years, the Company secured the agency for US-based Melchoir Armstrong
Dessau's airconditioning equipment. Shortly after, the Company was selected by
Washington, the US leader in airconditioning, as its India based partner - these were the
first of numerous foreign associations to follow.

An expanding Blue Star then ventured into the manufacture of ice candy machines and
bottle coolers and also began the design and execution of central airconditioning projects.
Then came the manufacture of water coolers. In 1949, the proprietorship company set its
sights on bigger expansion, took on shareholders and became Blue Star Engineering
Company Private Limited.

Ever since, there has been a constant and profitable growth. Blue Star diversified and
took up agencies for Material Testing Machines and Business Machines. The export
arena beckoned and the Company began exporting water coolers to Dubai, where in fact,
'Blue Star' soon became the generic name for water coolers.

The sixties and the early seventies witnessed Blue Star continuing to expand and thrive.
A team of dedicated professionals aided Mohan T Advani in ever furthering his vision of
a profitable company dedicated to its ideals of professionalism and success. Employee
strength crossed the 1000 mark and the company went public in 1969 to become Blue
Star Limited, as it continues to be called today.

In 1970, the Company took up the all-India distributorship of Hewlett-Packard products,

a business relationship which continues today and has grown ever stronger through the
years. As the Company's reputation for delivering the goods in the most challenging of
airconditioning projects grew steadily, the early seventies saw a series of prestigious
projects being entrusted to Blue Star - skyscrapers such as Air India Building, Express
Towers, the Oberoi Hotel in Mumbai, apart from several others. Revenues touched the
Rs. 10-crore mark and staff strength doubled to exceed 2000.

As its Indian presence reached greater heights, the Company began building determinedly
upon its existing overseas presence, Blue Star set up a joint venture with Al Shirawi in
Dubai and went on to execute some outstanding projects in Syria, Iraq and Saudi Arabia.
To complement its airconditioning projects and undertake turnkey industrial projects, an
Industrial Division was set up in 1978.

Always moving with the times and ever on the lookout for business possibilities, Blue
Star next set up a software export unit at Seeps, Mumbai in 1983. Then came associations
with more global leaders - a collaboration with York International of USA for central
airconditioning equipment and joint ventures with Motorola and Yokogawa.

In 1984, Ashok M Advani & Suneel M Advani, the sons of Mohan T Advani, took over
the reins of the Company, after spending nearly 15 years within the Company steadily
climbing up the ladder. A renewed thrust was placed on the company's core business
areas - airconditioning and refrigeration and the distribution of professional electronics
equipment - and the company emerged a market leader in these focus areas.

The nineties witnessed India entering an era of economic liberalisation and an upsurge in
competition as the dynamic business scenario attracted the world's most forward-looking
corporations. It was time to re-look at existing business competencies, re-engineer those
that were obsolete and forge ahead in acquiring new business competencies. Blue Star
was more than equal to the challenge and expansion continued unabated.
In keeping with this focus, an advanced manufacturing facility was set up at Dadra in
1997, in technical collaboration with Rheem , USA, to enhance manufacturing
competency. Today it bears the distinction of being regarded as the best such plant India-
wide. The dealer network was strengthened and expanded to bring products within easy
reach of every customer.

With the advent of the much awaited new millennium in 2000, the action continued. The
software unit was spun off into a separate company, Blue Star Infotech Ltd., the export of
airconditioning products from the Dadra factory began and contract manufacturing for
local and foreign brands commenced. A new Corporate Vision was developed - "To
deliver a world-class customer experience". Every employee is determined to follow this
vision and keep their organization a competitive and forward-looking one.

Blue Star crossed the Rs. 500crore milestone in 2000 and the Rs. 600 crore milestones in
2002-03. With the boom in construction activity and increased infrastructure investments,
the Company leveraged its leadership position to grow aggressively. In the following
three years, the Company nearly doubled its turnover, clocking Rs 1178crores in 2005-
06.

Even more than size, Blue Star enjoys an enviable reputation as an ethical corporation,
ever mindful of its obligations towards customers, shareholders, dealers, business
partners, employees and the environment in which it operates.

COMPANY PROFILE:

Blue Star is India's largest central airconditioning company with an annual turnover of Rs
2574 crores, a network of 29 offices, 5 modern manufacturing facilities, 700 dealers and
around 2600 employees.

It fulfills the airconditioning needs of a large number of corporate and commercial

customers and has also established leadership in the field of commercial refrigeration
equipment ranging from water coolers to cold storages. The Company has also started
offering Electrical Contracting and Plumbing & Fire Fighting Services. Blue Star's other
businesses include marketing and maintenance of hi-tech professional electronic and
industrial products.
Blue Star has business alliances with world renowned technology leaders such as Rheem
Mfg Co, USA; Hitachi, Japan; Eaton - Williams, UK; Thales e-Security Ltd., UK; Jeol,
Japan; ISA, Italy and many others, to offer superior products and solutions to customers.

The Company has manufacturing facilities at Thane, Dadra, Bharuch, Himachal and
Wada which use state-of-the-art manufacturing equipment to ensure that the products
have consistent quality and reliability.

Blue Star primarily focuses on the corporate and commercial markets. These include
institutional, industrial and government organizations as well as commercial
establishments such as showrooms, restaurants, banks, hospitals, theatres, shopping malls
and boutiques. In accordance with the nature of products and markets, business drivers,
and competitive positioning, the lines of business of Blue Star can be segmented as
follows:

1943 Mohan T Advani establishes Blue Star Engineering Company as a proprietary firm
1946 Blue Star secures Melchior Armstrong Dessau agency
1947 Worthington selects Blue Star as Indian Partner. Manufacturing of ice candy machines and
bottle coolers begins. Central airconditioning system design and execution begins
1948 Manufacture of water coolers commences
1949 Proprietorship converted to Private Limited Companies
1954 Blue Star selected as distributor for Honeywell
1955 GDR Testing machines distributorship begins
1957 Perkin-Elmer tie-up marks the start of the electronics business. GDR business machines
agency commences
1960 Total Income crosses the Rs 1 crore mark
1962 GDR Machine Tools distributorship begins
1964 Total employment crosses 1,000
1965 Techniglas Pvt Ltd set up to manufacture insulation material
1969 Factory moves from Colaba in Mumbai to Thane
1970 Hewlett- Packard distributorship commences
1972 First skyscrapers of Mumbai – Air India Building, Express Towers and Oberoi Hotel set-up
– all airconditioned by Blue Star
1972 Total Income crosses Rs 10 crores. Employment crosses 2,000
1974 Water Cooler manufacturing license granted to Yusuf Alghanim, Kuwait
1977 Middle East thrust begins. Joint Venture (JV) with Al Shirawi in Dubai
1977 Hitachi Medical Equipment distributorship begins
1978 Industrial Division commences activity
1980 Bharuch Factory set up
1980- Major AC and R projects executed in the Middle East
86
1983 International Software Division inaugurated in Seepz
1984 York technology collaboration begins
1985 Manufacture of centrifugal packaged chillers commences at Thane Plant
1986 Total Income crosses Rs 100 crores
1987 Yokogawa Blue Star JV formed
1987 Gandhinagar factory set up for EPABX systems
1988 Blue Star becomes India’s largest central airconditioning company
1988 Manufacturing collaboration with Mitsubishi
1988 Assembly of personal computers under the brand name ‘Quantum’ begins
1989 JV with Hewlett-Packard and Motorola
1990 Gandhinagar factory closes
1992 Total Income crosses Rs 200 crores
1992 Blue Star exits from Motorola JV
1993 Formation of Arab Malaysian Blue Star JV in Malaysia
1995 Blue Star exits from HP India JV
1997 Dadra Plant inaugurated
1998 Major thrust on dealerisation and brand building begins
1999 Blue Star exits from Industrial Projects business
2000 International Software business spun off to form Blue Star Infotech, listed on stock
exchanges
2001 Total Income crosses 500 crores. Export of airconditioning products begins
2003 Blue Star exits Yokogawa JV
2005 Blue Star sets up new factory at Kala Amb in Himachal Pradesh
2006 Total Income crosses the Rs 1000 crores mark
2006 Blue Star opts for a 5 for 1 stock split
2007 Blue Star sets up its fifth factory at Wada, Thane District
2008 Blue Star powers into Building Electrification. Acquires Naseer Electricals, a leading
Electrical Contractor
2008 Total income crosses Rs. 2000 Crores.

Electro Mechanical Projects and Packaged Airconditioning

Systems:
This comprises central and packaged airconditioning as well as electrical projects and
plumbing & fire fighting projects. The central and packaged airconditioning business
involves design, engineering, manufacturing, installation, commissioning and support of
large central airconditioning plants, packaged airconditioners and ducted split
airconditioners. In addition to this, Blue Star promotes after-sales service as a business,
by offering several value added services in the areas of upgrades and enhancements, air
management, water management, energy management and LEED certification
consultancy for Green Buildings.

The Company also executes building electrification contracting projects and offers
expertise in the areas of electrical design and engineering, supply and installation of
entire power systems as well as liasioning, approvals, commissioning and asset
management.

Blue Star has extended its mechanical contracting offering to include plumbing and fire
fighting projects. With this, Blue Star has developed capabilities for executing integrated
MEP (Mechanical, Electrical and Plumbing) projects.

Cooling Products:
Blue Star offers a wide range of contemporary window and split airconditioners. The
Company also manufactures and markets a comprehensive range of commercial
refrigeration products and services that cater to the industrial, commercial and hospitality
sectors. These include water coolers, bottled water dispensers, deep freezers, cold
storages, bottle coolers, ice cube machines and supermarket refrigeration products.
Professional Electronics and Industrial Systems:
For over five decades, the Electronics Division has been the exclusive distributor in India
for many internationally renowned manufacturers of hi-tech professional electronic
equipment and services, as well as industrial products and systems. The Company has
carved out profitable niches for itself in most of the specialized markets it operates in,
such as analytical instruments, medical electronics, data communication products,
material testing, and test and measuring instruments

CORPORATE DAILY POLICY:

Blue Star's Management firmly believes that safety of its employees and all the stake
holders associated with our project sites and manufacturing facilities is of utmost
importance. Safety is an essential and integral part of all our work activities which
includes planning, design, procurement, fabrication, construction, installation and
commissioning of facilities, products, manufacturing processes and services. We believe
that incidents or accidents and risk to health are preventable through the active
involvement of all the stake holders, thereby creating a safe and accident free work place.

With regard to safety objectives, Blue Star will:-

• Comply with the requirements of all relevant statutory, regulatory and other
provisions.

• Create and promote safety awareness to protect all stake holders from foreseeable
work hazards and risks through campaigns and training programmes among
employees, business associates and clients.

• Provide appropriate level of training and supports to management and employees

to ensure that they are able to fulfill safety responsibilities.

• Work with major suppliers, business associates and customers to facilitate their
safety performance improvement and also make it obligatory for them to follow
the project site safety rules, procedures, systems and safe practices.

• Ensure that appropriate resources are available to fully implement the Safety
Policy and continuously review the policy's relevance with respect to legal and
business development.

The management sincerely believes that safety related incidents are preventable by
coordinated team effort of all stakeholders and through shared individual responsibility at
all levels for safety issues thereby aiming to achieve continuous improvement and overall
success of our safety program.

Ashok M Advani.
Chairman & Managing Director

CORPORATE SOCIAL RESPONSIBILITY:

Blue Star’s Corporate Social Responsibility (CSR) philosophy is built on three pillars
namely

• Environment protection
• Energy conservation
• Community development around its facilities.

The Company is highly committed to the cause of protecting the environment. Energy
efficiency of its products remains a corner-stone of its research and development efforts
Air, water and energy management services as well as LEED (Leadership in Energy and
Environmental Design) consultancy for Green Buildings have been part of its business
and practices. The Company has also been contributing in the technical domain in the use
of eco-friendly refrigerants in its products.

Energy Conservation goes beyond using efficient products. A huge amount of energy is
wasted nationally due to sheer ignorance and lack of awareness. Blue Star helps
deserving institutions such as hospitals and colleges to save power by conducting free
walk-through energy audits. The Company has conducted several such audits with energy
recommendations for Jai Hind College, St Xavier’s College, Nirmala Niketan College of
Social Work, National Association for the Blind (NAB), Bombay Natural History Society
(BNHS), JJ School of Architecture and Dilkhush Special School, amongst others.

In its efforts towards community development around the Company’s facilities, the
Company has initiated and sponsored a study in the villages around its Wada Plant to
understand the immediate needs. Vocational training and health emerged as pressing
needs in this underdeveloped region. Blue Star has sponsored the vocational training
courses offered by an NGO, KSWA in Wada. This centre was set up to support a
vocational training initiative for school and college dropouts to make them employable
contributing members of their families and communities. Regular visits by the
Company’s employees have aided in technical support to KSWA for conducting the
courses.

In addition to the above CSR efforts, the Company sponsors various philanthropic
activities through its Trust, Blue Star Foundation, which has been supporting several
activities in the areas of children education and healthcare apart from relief measures in
national calamities.

BOARD OF DIRECTORS:
Ashok M Advani - Executive Chairman

Ashok M Advani is an MBA from the Harvard Graduate School of Business Administration, an
Electrical Engineer from MIT, USA and a B.Sc (Honours) from Mumbai University.

He joined Blue Star in 1969 and held a variety of senior positions in manufacturing and finance in
the Company before he took over the Company's affairs as Chairman and Chief Executive in 1984.
He was redesignated as Chairman & Managing Director in 2005 and Executive Chairman with
effect from July 1, 2009. As Executive Chairman, he oversees Corporate Strategy, Corporate
Governance, Investor Relations and Corporate Social Responsibility.

Ashok is also the Vice Chairman of Blue Star Infotech Limited and on the board of Alfa Laval
(India) Limited. He has been a member of the Local Advisory Board of The Chase Manhattan Bank
and a past President of the Bombay Chamber of Commerce and Industry.
Suneel M Advani - Vice Chairman & Managing Director

Suneel M Advani is a double graduate in Electrical Engineering and Economics from MIT, USA.
He also holds a degree in Law from Mumbai University.

He joined Blue Star in 1969 as a Management Trainee and moved up steadily by holding
responsible positions before he was elevated to the position of President and Vice Chairman in
1984. He was redesignated as Vice Chairman & Managing Director in 2005. As Vice Chairman &
Managing Director, he oversees the Electro Mechanical Projects Group, Corporate
Communications & Marketing and Public Relations.

Suneel is also the Chairman & Managing Director of Blue Star Infotech Limited, Chairman of Blue
Star Design and Engineering Limited, Blue Star Infotech (UK) Limited and Blue Star Infotech
America, Inc. Suneel is a Member of the CII National Council, the apex governing body of CII.
Besides, he is also associated with other trade associations and was the President of the
Refrigeration and Airconditioning Manufacturers' Association (RAMA).
SATISH JAMDAR - Managing Director

Satish Jamdar is a Mechanical Engineering graduate from IIT Bombay and also qualified in
Systems Management from NIIT and Management Studies from UK and USA. He joined Blue Star
in 1996 as Vice President - Manufacturing and has over 35 years of experience in manufacturing,
materials management and IT projects having worked for companies such as Siemens, BPL-Sanyo
and Alstom.

Satish spearheaded the establishment of Blue Star's modern state-of-the-art manufacturing facility
at Dadra in 1997, at Himachal Plant in 2005 and at Wada in 2008. He was promoted as Executive
Director in 2003 and Deputy Managing Director in 2007 prior to his current appointment as
Managing Director. As Managing Director, Satish is responsible for all the Company's operations
and support activities except those reporting to the Executive Chairman and Vice Chairman &
Managing Director.
T Gouri Sankara Babu - Deputy Managing Director

T Gouri Sankar Babu is an Engineering Graduate from IIT Madras and has done his MBA from
IIM Ahmedabad. He has been working with Blue Star from 1977 in various positions, except for a
four-year period when he worked with MRF Ltd as GM Sales.

Babu was promoted to Executive Director in 2000 and Deputy Managing Director in 2007. He
oversaw the channel business activities of the Company including packaged airconditioning, room
airconditioners, commercial refrigeration products and systems as well as human resources. With
effect from July 1, 2009, he has relinquished his operating role and is responsible for special
corporate developmental assignments.

T Gouri Sankara Babu has been the President of RAMA and is actively involved in other trade
associations.
SHAILESH HARIBHAKTI - Director

Shailesh Haribhakti is a Fellow member of the Institute of Chartered Accountants of India. He is

also a Graduate Cost Accountant, Certified Internal Auditor, Certified Fraud Examiner and
Certified Financial Planner. He joined M/s. Haribhakti & Co, Chartered Accountants, Mumbai as
Deputy Managing Partner in 1978 and is currently its Managing Partner.

Shailesh joined the Board of Blue Star in 2005. In addition to Blue Star, he is also on the Boards of
several leading companies such as Ambuja Cement, Akruti, ACC and Pantaloon amongst others.
He has been associated with several institutions and trade associations such as Indian Merchants'
Chamber, Institute of Internal Auditors, Bombay Management Association, ASSOCHAM, Western
India Regional Council of ICA and NMIMS. In addition, he is empanelled as an Arbitrator by the
Indian Council of Arbitration.
PRADEEP MALLICK - Director

Pradeep Mallick is a B.Tech from IIT Madras and Diploma holder in Business Management from
UK. He is also a Chartered Engineer and Fellow of the Institution of Engineering & Technology,
London. Pradeep was the Managing Director of Wartsila India Limited from 1988 to 2003, prior to
which he worked with several leading Companies in the field of electrical power transmission and
distribution. He joined the Board of Blue Star in 2003.

Pradeep is also on the Boards of several other leading Companies including Elantas Beck India,
ESAB India, Mount Everest Mineral Water and Tube Investments of India. In addition, he is
associated with Industry Associations such as Confederation of Indian Industry, Bombay Chamber
of Commerce & Industry and social organizations like Population First.
GURDEEP SINGH - Director
Gurdeep Singh is a Chemical Engineering Graduate from IIT Delhi. After his graduation, he joined
Hindustan Lever Limited as a Management Trainee. He held various responsible positions in the
Company before he was expatriated to Brazil as Technical Director of Unilever Detergents
business. In 1998, Gurdeep returned to Hindustan Lever as the Director - Human Resources and
Corporate Affairs. He retired as Senior Vice President - Corporate Affairs in April 2006. He joined
the Board of Blue Star in 2003. He is also on the boards of Halonix, Perfect Circle and Technova
India.
SURESH N TALWAR - Director

Suresh N Talwar is a Commerce and Law graduate and a solicitor and Partner of M/s Talwar,
Thakore & Associates, Mumbai. Before setting up this firm in April 2007, he was the Senior
Partner of Crawford Bayley & Company. He joined the Board of Blue Star in 1986. In addition to
Blue Star, he is also on the Boards of several leading companies such as Merck, Cadbury India,
Larsen & Toubro, Greaves Cotton, Sandvik Asia, ESAB India, Johnson & Johnson, Uhde India and
Wyeth amongst others.

SENIOR MANAGEMENT:
Ashok M Advani Executive Chairman
Suneel M Advani Vice Chairman & Managing Director
Satish Jamdar Managing Director
T G S Babu Deputy Managing Director
Vir S Advani President - Corporate Affairs & Special Projects
Avinash Pandit President - Electro Mechanical Projects Group
B Thiagarajan President - Channel Business Group
J M Bhambure Executive Vice President - R&D and Manufacturing
Manek Kalyaniwala Executive Vice President - Finance
Arun Khorana Executive Vice President - Professional Electronics & Industrial Systems
Division
A S Dawood Corporate Advisor - Electrical Projects Division
R Aravindan Vice President - Packaged Airconditioning Division
Sumanta Vice President - Electrical Projects Division
Chaudhuri
R G Devnani Vice President - Dadra & Bharuch Plant
Harish Govind Vice President - Human Resources & Administration
A Rakesh Rao Vice President - Airconditioning & Projects Division (North)
P Venkat Rao Vice President - Room Airconditioners & Refrigeration Products Division
D P Singh Vice President - Infrastructure Projects Division
K P Sukumar Vice President - Airconditioning & Refrigeration Service Division
K P T Kutty Company Secretary
Ashok M Advani Executive Chairman
Suneel M Advani Vice Chairman & Managing Director
Satish Jamdar Managing Director
T G S Babu Deputy Managing Director
Vir S Advani President - Corporate Affairs & Special Projects
Avinash Pandit President - Electro Mechanical Projects Group
B Thiagarajan President - Channel Business Group
J M Bhambure Executive Vice President - R&D and Manufacturing
Manek Kalyaniwala Executive Vice President - Finance
Arun Khorana Executive Vice President - Professional Electronics & Industrial Systems
Division
A S Dawood Corporate Advisor - Electrical Projects Division
R Aravindan Vice President - Packaged Airconditioning Division
Sumanta Vice President - Electrical Projects Division
Chaudhuri
R G Devnani Vice President - Dadra & Bharuch Plant
Harish Govind Vice President - Human Resources & Administration
A Rakesh Rao Vice President - Airconditioning & Projects Division (North)
P Venkat Rao Vice President - Room Airconditioners & Refrigeration Products Division
D P Singh Vice President - Infrastructure Projects Division
K P Sukumar Vice President - Airconditioning & Refrigeration Service Division
K P T Kutty Company Secretary
Ashok M Advani Executive Chairman
Suneel M Advani Vice Chairman & Managing Director
Satish Jamdar Managing Director
T G S Babu Deputy Managing Director
Vir S Advani President - Corporate Affairs & Special Projects
Avinash Pandit President - Electro Mechanical Projects Group
B Thiagarajan President - Channel Business Group
J M Bhambure Executive Vice President - R&D and Manufacturing
Manek Kalyaniwala Executive Vice President - Finance
Arun Khorana Executive Vice President - Professional Electronics & Industrial Systems
Division
A S Dawood Corporate Advisor - Electrical Projects Division
R Aravindan Vice President - Packaged Airconditioning Division
Sumanta Vice President - Electrical Projects Division
Chaudhuri
R G Devnani Vice President - Dadra & Bharuch Plant
Harish Govind Vice President - Human Resources & Administration
A Rakesh Rao Vice President - Airconditioning & Projects Division (North)
P Venkat Rao Vice President - Room Airconditioners & Refrigeration Products Division
D P Singh Vice President - Infrastructure Projects Division
K P Sukumar Vice President - Airconditioning & Refrigeration Service Division
K P T Kutty Company Secretary

VISION:

Achievements
Blue Star Infotech has been delivering services to clients in USA, Europe and South Asia for over
two decades with several client engagements exceeding 5 years. It has a number of firsts to its
credit:

Named to the Microsoft Dynamics President’s Club for the year 2006 and 2008

Microsoft awarded Blue Star Infotech with the "Best Dynamics Partner of the Year" in India for
financial year 2006

Oracle India awarded "Oracle Partner of The Year" award to Blue Star Infotech for Customer
Centricity in applications for the year 2006 - 2007

Blue Star Infotech is amongst the first six companies globally to be certified for CMMi Level 3
Quality Standard

Blue Star Infotech is one of the first companies to employ an Extended Office model for
development and support of business applications world-wide for a Fortune 10 Global Computer
company

Blue Star Infotech is amongst the few IT service providers to be certified for both CMMi and
ISO quality standards
Blue Star Infotech is one of the first companies to pioneer and establish onsite/offshore-based
Agile Methodology for software development

The Humanitarian Logistics Software, product developed by Blue Star Infotech for a non-profit
organisation and implemented for a large European-based global relief organisation was
nominated for an International Awards programme honouring innovators applying technology to
benefit humanity
Blue Star Infotech was awarded 'The European Seal of Excellence' for E-Learning - awarded the
first time ever to a non-European organisation. This was presented by The European Multimedia
Convention (EMMAC), a platform consisting of Europe's national and regional multimedia
associations, 9001 certified, with operations in USA, Europe and Asia

Overview Clients :
Any country's progress depends on its educational system. Educational and research
institutions like IIMs and the IITs are today the most reputed and respected Indian
institutions of learning. These institutions have different requirements. Apart from world
class infrastructure, they are required to provide comfort and at the same time low-noise
ambience in lecture/seminar/conference halls. The laboratories require proper ventilation;
the computer centers require close control on temperature, humidity, and dust level and
air movement.

Blue Star is the only organization in India to offer a holistic solution for such
requirements. Blue Star has an exhaustive product range to meet the exacting
requirements. The machines are also uniquely designed to deliver full capacity even
during peak Indian Summers.

Blue Star Limited - Company Profile Snapshot :

Company Profile: Blue Star Limited
Ticker: 500067
Exchanges: BOM
2009 Sales: n/a
Major Industry: Electrical
Sub Industry: Industrial & Comm Elect. Equipment
Country: INDIA
Employees: 2565
Business Description
Blue Star Limited. The Company's principal activities are to manufacture air conditioning machines and refrigeration
equipments. The Company operates in three segments, namely, Central air conditioning systems, Cooling products,
Professional electronics and individual systems. The Central air conditioning and Systems segment includes central air
conditioning projects and packaged air conditioning businesses including manufacturing and after sales service. The Cooling
products segment consists of cooling appliances, cold storage products, including manufacturing and after sales service.
The Professional electronics and industrial systems segment includes trading and services for testing machines, medical,
analytical, test and measuring, data communications, industrial products and systems. The Company's plants are located in
Maharashtra, Dadra&Nagar Haveli and Himachal Pradesh. During the year, the Company discontinued the manufacture of
energy inefficient reciprocating chillers

Overview Clients Case Studies :

Malls are mushrooming everywhere. Everyone wants to go to Malls for different reasons
such as for shopping, cosmetics, grocery, jewellery or just to eat out. Malls are seen as a
one-stop-shop. Children enjoy playing, in the play area, while parents, can do shopping.
All this calls for a wonderful, entertaining and engaging ambience; an ambience in
which, people feel comfortable and fresh. This certainly requires an intelligent
airconditioning system that will deliver cooling to customers 24/7

Blue Star with its enormous experience and wealth of expertise can deliver a system,
which will make visitors / guests comfortable and at the same time save money for the
mall owners. Blue Star airconditioning systems offer "value for money". Be it the
packaged AC systems or the Central AC systems, all are exacted to deliver what the
customers expect, "Comfort for the deserving"

Blue Star in the last few decades has done the airconditioning of some of the best and
biggest malls in the country.

These malls stand testimony to the capability of Blue Star to deliver cooling solutions to
meet budget provisions.

The Packaged ACs and Chillers are capable of delivering high Energy Efficiency
Ratios.
That means you get more cooling for the same money spent. We have the largest capacity
floor mounted packaged ACs in India. These save enormous floor space while consuming
less energy to deliver more cooling.

The Screw Chillers fitted with 'Hanbell' compressors, are proven for remarkable
flexibility, admirable reliability and tremendous power saving potential.

INTERNATIONAL:
Blue Star's International Projects division provides solutions for specialized as well as
comfort applications.

Specialized applications would include pharmaceuticals, clean rooms, hospital operation

theatres, power plants, commercial cold storages, and medium / temperature refrigeration
for chemical and pharmaceutical plants.

The customer segments for comfort cooling encompass hospitals, hotels, restaurants,
airport terminals, residential complexes, banks, and shopping centres, commercial and
institutional buildings. We have a successful track record of projects in Mauritius, Saudi
Arabia, Kuwait, Abu Dhabi, Dubai and Malaysia among many other countries.

Blue Star offers a complete range of solutions for heating, ventilation, airconditioning
and refrigeration for industrial and comfort applications.

These include:

• Detailed system design

• Engineering system design
• Equipment manufacture
• Procurement
• Construction at site
• Plant commissioning
• Plant operation and maintenance
• Retrofit, revamp and modification of existing plants

International Operations

• Office in Dubai for HVAC contracts

• Joint Venture with Arab Malaysia Berhard based in Kuala Lumpur for
airconditioning projects.
 Successful track record of projects in Iraq, Syria, Indonesia,
Malaysia, Libya, Sri Lanka, Saudi Arabia, UAE, Nepal, Russia,
Bangladesh and Mauritius.

Overview Clients :

Hospitality industry has to ensure, the guests who come to stay, have a cool and
comfortable stay.
Hotel airconditioning involves maintaining proper temperature, humidity, air flow, indoor
air quality, odor and noise levels. To present an acceptable level of ambience all the time,
the HVAC system has to work 24x7. At the same time there will be a lot swing in the
occupancy in the hotels depending on the season. Also on any given day, all the areas of
the hotel may not be occupied.

All this calls for a diligent understanding of the need of every client and come-up with a
solution, which meets the need. Blue Star Engineers design the system taking into
consideration all this and much more.

When systems are not fully loaded and they need to run 24x7, if we build with excess
redundancy, the initial cost will be prohibitive and operating cost of the property will
become exorbitantly high. While the systems are running for longer periods of time, there
is AC capacity fluctuation. There is a tremendous opportunity for energy saving. Blue
Star with its wealth of knowledge and expertise delivers value-for-money energy saving
options, more equipment to choose from, many varieties in system design and a proper
attitude to deliver the solution.

Blue Star with over 60 years experience in HVAC has put up hotel airconditioning
systems to exacting specifications so as to meet the cost expectations of the clients. Right
from heat load estimation to design and selection of equipments, laying them out, testing
and commissioning, it is done in the right way meeting the highest standards in the
industry

Ratio Analysis
Introduction to ratio analysis: -
 A ratio is a simple mathematical expression. It is a number expressed in terms of
another number, expressing the quantitative relationship between the two. Ratio analysis
is the technique of interpretation of financial statements with the help of various
meaningful ratios. Ratio does not add any information that is already available, but they
show the relationship between two items in a meaningful way. They help us to draw
certain conclusions. Comparison with related facts is the basis of ratio analysis.

Importance of ratio analysis: -

 Comparison of a firm with its own performance in the past.
 Comparison of one firm with another firm in the industry.
 Comparison o one firm with the industry as a whole.
 Comparison of an achieved performance with predetermined standards.
 Comparison of one department of a concern with other departments.

Advantages: -
 Ratio analysis simplifies the understanding of financial statements.
 Ratios contribute significantly towards effective planning and forecasting.
 Ratios bring out the inter relationship among various financial figures and bring to
light their financial significance.
 Ratio analysis is a device to analyze and interpret the financial health of the
enterprise.
 A study of a trend in the past works as a helpful guide for a future.

Limitations: -
  Ratios may not prove to be the ideal tool for Inter-firm comparisons. The two
firms may adopt different accounting policies. So the results may not be
comparable.
 Ratios are depends upon the original data base. If the original data base is not
correct then the ratios will be misleading.
 Ratios are based on the past data. They can’t reliable guide to future performance,
as future is dependent on various aspects of business.
 Ratios are violate and can be influenced by a single transaction with extreme
value.
 Ratios are only indicators. They need a proper analysis by a capable management.

Classification: -
Ratios are classified in a number of ways, depending upon the basis of
classification. Those are as follows
1. Traditional Classification
2. Functional Classification
There are various types of ratios. The ratios are classified into various types.
Those are
1. Liquidity ratios
2. Leverage ratios
3. Turnover ratios
4. Profitability ratios
5. Activity ratios
Financial reports of BLUE STAR
------------------- in Rs. Cr.
Profit & Loss account of Blue Star -------------------
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
12 mths 12 mths 12 mths 12 mths 12 mths
Income
Sales Turnover 916.88 1,171.50 1,594.58 2,221.59 2,552.29
Excise Duty 0.00 0.00 0.00 0.00 0.00
Net Sales 916.88 1,171.50 1,594.58 2,221.59 2,552.29
Other Income 9.17 3.12 9.72 45.80 4.75
Stock Adjustments 26.96 28.60 26.85 56.39 -34.58
Total Income 953.01 1,203.22 1,631.15 2,323.78 2,522.46
Expenditure
Raw Materials 743.99 936.47 1,269.55 1,747.32 1,915.15
Power & Fuel Cost 3.81 4.51 5.83 7.04 7.43
Employee Cost 72.55 88.28 123.16 154.81 182.73
Other Manufacturing Expenses 1.30 1.59 2.37 2.19 2.31
Selling and Admin Expenses 49.84 62.28 81.67 105.05 107.69
Miscellaneous Expenses 13.56 19.33 25.95 37.78 38.42
Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00
Total Expenses 885.05 1,112.46 1,508.53 2,054.19 2,253.73
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
12 mths 12 mths 12 mths 12 mths 12 mths
Operating Profit 58.79 87.64 112.90 223.79 263.98
PBDIT 67.96 90.76 122.62 269.59 268.73
Interest 3.21 5.72 9.55 7.56 13.55
PBDT 64.75 85.04 113.07 262.03 255.18
Depreciation 12.42 15.99 20.90 21.97 25.88
Other Written Off 0.00 0.00 0.00 0.00 0.00
Profit Before Tax 52.33 69.05 92.17 240.06 229.30
Extra-ordinary items 0.26 0.03 0.42 0.14 8.95
PBT (Post Extra-ord Items) 52.59 69.08 92.59 240.20 238.25
Tax 13.28 20.19 21.42 66.11 57.93
Reported Net Profit 39.16 48.90 71.18 174.09 180.29
Total Value Addition 141.05 175.99 238.98 306.87 338.59
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 17.99 21.58 26.98 62.96 62.96
 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Balance
Other income sheet: 4.95 37.05 6.13 4.06 10.15
From
Stock adjustmentTo Year Class Of Authorized
66.19 Issued Capital
-85.41 Paid
-38.24 Up Paid
-47.18 Up Paid
-25.92 Up
Year Share Capital Shares (Nos) Face Value Capital
Raw material 1,821.86 1,776.34 1,280.93 955.05 742.95
2007 2008 Equity Share 29.74 17.99 23391015 2 4.68
Power and fuel - - - - -
2007 Dividend
Corporate 2008Tax Equity Share 29.74 2.56 17.99
3.03 89936105 10.70 2
3.94 10.70 17.99
Per 2006
share data 2007 Equity
(annualised)
Employee expenses Share 29.74
182.26 17.99
154.40 89922000 88.27
122.86 2 17.98
72.37
2006
Shares in issue 2007
(lakhs) Equity Share 29.74
179.87 17.99
179.84 89936105 899.362
899.36 899.3617.99
2005
Earning 2006 Equity Share 29.74 17.99 17987221 19.36 10 17.99
Excise Per Share (Rs) - 21.77 - 27.19 - 7.91 - 20.05
-
2004 2005
Equity Dividend (%) Equity Share 29.74
100.00 17.99
120.00 17987221
150.00 350.0010 350.0017.99
Admin
Book and selling
2003
Value expenses
(Rs)2004 Equity Share- 82.71 -
29.74 17.99
96.23 - 23.72 - 10
17987221 29.34 - 17.99
40.86
Research
2002 and
2003 development
Equity Share- 29.74 - 17.98 - 17984400 - 10 - 17.98
expenses
2001 2002 Equity Share 29.74 20.32 19299765 10 19.30
Expenses
2000 capitalised
2001 Equity Share- 29.74 - 20.32 - 20319640 - 10 - 20.32
Other expenses
2000 2001 226.08
Equity Share 29.74 153.22
20.32 118.82
3187 91.74
10 73.52
-
Provisions
1995 made 1999 Equity Share- 29.74 - 27.10 - 27097102 - 10 - 27.10
Depreciation
1994 1995 Equity Share25.88
14.74 21.97
10.05 20.90
10048551 15.93
10 12.35
10.05
Taxation
1993 1994 57.93
Equity Share 14.74 67.92
9.95 21.41
9948551 20.19
10 13.28
9.95
Net 1992
profit / loss 1993 Equity Share180.29
14.74 174.09
7.11 71.18
7106108 48.90
10 39.16
7.11
Extra ordinary item
1991 1992 -
Equity Share 7.24 - 7.11 - 7106108 - 10 - 7.11
Prior1990
year adjustments
1991 Equity Share- 7.24 - 3.55 - 3553054 - 10 - 3.55
Equity
1986capital 1990 Equity Share17.99
4.74 17.99
3.55 17.99
3553054 17.99
10 17.99
3.55
Equity dividend 1986
rate Equity Share- 4.74 - - - - 2.22
1982 2.22 2220659 10
Agg.of non-prom. shares (Lakhs)
Share538.33 538.25 538.25 107.81 107.88
1979 1982 Equity 2.24 1.39 1387912 10 1.39
Agg.of non promote Holding (%) 59.86 59.85 59.85 59.94 59.98
1974 1979 Equity Share 1.24 0.93 925275 10 0.93
OPM (%) 10.61' 09 10.50 7.30 7.38 6.28
1970 1974 Equity ShareMar0.84 Sep0.71
' 08 Mar707500
' 08 Sep10' 07 Mar0.71
' 07
GPM
Other (%)
income 1970 10.26 11.63 7.06 7.21 6.96
1969 Equity Share2.320.84 2.630.57 36.16
566000 0.8910 9.250.57
NPM
Stock(%)
adjustment 7.00 7.67 4.43 4.15 4.21
Mar ' 09 78.41Dec ' 08 -12.22
Sep ' 08 -63.96
Jun ' 08 -21.45
Mar ' 08 -16.75
Raw material 868.56 953.30 980.86 795.48 724.86
724.76 566.72 646.58 630.89 708.14
Power and fuel - - - - -
Operating profit 94.35 52.17 69.00 57.04 72.44
Employee expenses 92.18 90.08 84.16 70.24 67.55
Interest 1.94 5.25 4.36 2.00 2.18
Excise - - - - -
Gross profit 94.63 47.02 65.76 56.69 106.31
Admin and selling expenses - - - - -
EPS (Rs) 7.42 3.58 5.00 4.05 7.82
Research and development - - - - -
expenses
Expenses capitalised - - - - -
Other expenses 105.80 120.27 93.79 59.43 69.13
Provisions made - - - - -
Depreciation 14.09 11.79 11.75 10.22 12.03
Taxation 28.63 29.30 43.03 24.89 10.45
Net profit / loss 98.94 81.36 De bt 105.80
Equity Ratio 68.29 45.49
1.8
Extra ordinary item - - - - -
1.6
Prior year adjustments - - - - -
1.4
Equity
1.2capital 17.99 17.99 17.99 17.99 17.99
Equity 1dividend rate - - - - -
Agg.of
0.8non-prom. shares (Lacs) Mar ' 09
538.33 Sep ' 08
539.05 Mar ' 08
538.25 Sep ' 07
538.25 Mar ' 07
538.25
1.54
Agg.of
Sales0.6non promotoholding (%) 59.86
1,291.481.13 59.93
1,277.61 59.85
1,223.02 59.85
1,010.02 59.85
908.63
OPM 0.4
(%) profit
Operating 0.69 11.35
146.53 9.88
126.18 10.48
128.17 10.53
106.32 7.03
63.84
0.65 0.6
GPM 0.2
(%)
Interest 10.95
7.19 9.56
6.36 12.75
3.75 10.23
3.81 7.41
5.12
0 (Rs
Half yearly results in brief:
Gross profit
NPM (%) 2005
Half
141.66
7.65
yearly results in details 11.00 2008
EPS (Rs) 2006 2007
122.45
6.36
2009
9.05
160.58
8.40
11.76
103.40
6.76
7.59
67.97
4.96
crore)
5.06
 (Rs crore)
Capital structure
Quarterly results in brief:
(Rs crore)