Ladies & Gentlemen,

I am pleased to welcome you to the 69th Annual General Meeting of Blue Star Limited. It is a privilege to address you for the first time as Chairman of your Company.

Corporate Performance

Blue Star’s unaudited financial results for the first quarter of 2017-18 were announced this morning. Your Company has reported a Total Income of Rs 1473.92 crores for the quarter ended June 30, 2017 on a consolidated basis as compared to Rs 1227.96 crores during the same period in the previous year, representing a growth of 20%. Profit before Tax at Rs 76.60 crores increased by 18% from Rs 64.90 crores, while Net Profit grew 14% to Rs 58.46 crores from Rs 51.39 crores in Q1FY17.

Striding towards our Platinum Jubilee

Blue Star will complete 75 years in business in September 2018, a significant milestone in its illustrious history. In a month’s time from now, we will commence our celebrations in the countdown to our Platinum Jubilee. We look forward to this joyous occasion as Blue Star reinvents itself across its businesses for the journey beyond 75 years. With a strong leadership duo of Vir and Thiagarajan at the helm, we are in the process of building a future-ready Blue Star that we all can continue to be proud of.

The Blue Star@75 strategic charter has been formulated with an action plan called GEAR. The four pillars that support the GEAR framework are GROWTH, EXCELLENCE, ACCELERATION AND RELATIONSHIPS. Growth being a high priority for the Company, Blue Star has well-conceived and detailed action plans for Growth in Revenue, Profitability, Return on Capital Employed, Shareholder Value, Capacity Utilisation and Productivity.

Growing faster than the market is important for the Company’s shareholder value enhancement. Blue Star’s key focus areas lie FIRSTLY in retaining our leadership in the core domestic businesses of HVAC&R Products, MEP Projects and AC&R Service; SECONDLY in reducing over dependence on the domestic construction cycle through investments in international business; THIRDLY in pursuing opportunities in product adjacencies such as air coolers, air purifiers and water purifiers; and FOURTHLY in incubating new lines of business to keep the PE&IS business relevant and profitable.

Maintaining leadership in the highly competitive AC&R products and solutions businesses through these strategies requires significant investments in product development and engineering, digital technologies, brand building activities as well as functional and technical capability building.

The Excellence programmes of GEAR across the Company are being driven with our Corporate Vision ‘TO BE THE BEST IN EVERYTHING WE DO’. We are fortunate to have highly talented and productive teams who strive to drive excellence in all their activities.

The Acceleration facet of the GEAR programme directs us towards speed in the areas of decision making, execution, ease of doing business and service responsiveness.

The Relationship aspect of GEAR, which is based on mutual trust across various stakeholders, is vital for the continuing “trustworthy” image of the Company.

In the larger, complex setting of GST implementation, the tighter regulatory norms and the increasingly volatile global scenario, the resilience of Blue Star lies in its optimism, managerial and technical competence, discipline and commitment. We will continue to leverage advancements in technology and innovation to enhance our competitive advantages. With the promise of delivering a world-class customer experience across its businesses, Blue Star continually strives to be the best-in-class across its projects, products and services.

As Mohan T Advani, the founder of Blue Star said, “We grew because we didn’t sit back and wait for plums to fall into our laps. When we saw our opportunities, we reached out boldly and seized them.” The organisation continues to reflect the values that he held dear – courage, hard work, integrity and pride in a job well done. The Company has faced numerous challenging times through these seven-and-a-half decades, and always emerged stronger, doubling its turnover every 4 years on the average. Blue Star’s uncompromising values and beliefs and its indomitable spirit have held it in good stead over the years, and the Company continues to take pride in its legacy and professionalism. Empowerment, innovation, entrepreneurship and meritocracy are principles embedded in the organisational DNA. Our ambitious goals demand passion and wholehearted integrity from each of its stakeholders – employees, business associates, dealers and channel partners, vendors and others. Unorthodox thinking and a mindset ready to take calculated risks to keep pushing the boundaries are imperative for success. I believe we have these qualities in requisite measure.

CSR focus

Blue Star has always believed in sustainable and responsible growth led by its values. The Company’s CSR efforts endeavour to support the less privileged, rural and urban communities in the country at large, with a focus on sections of the vulnerable and marginalised local communities that live in close proximity to its manufacturing facilities in semi-rural locations. Blue Star is committed to contribute actively towards enhancing their living standards through its CSR interventions in water and sanitation, health, education and skill development. A trio of talents- technical skills, domain knowledge and soft skills - need to coalesce for gainful employment. In FY17, close to 250 apprentices have benefitted from on-the-job training across Blue Star’s manufacturing and R&D facilities as well as retail outlets, whilst industry-specific, vocational training initiatives by the Company in the AC&R and MEP fields have covered over 300 school dropouts. The organisation has thus contributed to assisting India’s youth in the skilling and entrepreneurial domain, translating the Government’s ‘Skill India’ mission into a reality. In the long-term, Blue Star is dedicated to improve the quality of air and water as well as food preservation solutions for the disadvantaged sections of the society.

In Conclusion

I offer my heartfelt gratitude to all our employees and business associates for their dedicated contribution to the Company's performance and growth over the years. We truly value the continued patronage of our esteemed customers. I convey my sincere thanks to my colleagues on the Board for their counsel and support. And finally, I thank you, our deeply valued shareholders, personally and on behalf of the Board, for your continuing confidence in Blue Star.

SUNEEL M ADVANI

August 11, 2017

Mumbai