MANAGEMENT DISCUSSION AND ANALYSIS INDUSTRY OVERVIEW India’s Logistics sector is poised for growth, led by GDP revival, urbanisation, infrastructure ramp-up (railways/roads/airports), e-tailing penetration, impending GST implementation and other initiatives like “Make in India” and the trilogy of Jan Dhan – Aadhar – Mobile (JAM). The exbrss industry has a large number of players, including a sizeable number of small and medium players. The industry caters to multiple segments as well as to individual customers by providing time bound services. Exbrss delivery services are used for various products, including documents like applications, cheque books, credit cards, trade papers and non-documents like electronic products, machine spare parts, trade samples, pharmaceuticals, medical equipments and life-saving drugs. The e-tailing segment is also expected to be a growth driver for the industry. Air Exbrss The overall Air Exbrss market for Financial Year 2015 was Rs. 3,978 crore1. The overall market grew by 6.7%1 (CAGR) in the last 6 years, however, growth has slowed down last year to 3.5%1. Ground Exbrss The overall Ground Exbrss market for Financial Year 2015 was Rs. 5,530 crore1. The overall market grew by 13%1 (CAGR) in the last 6 years, however, growth has slowed down last year to 8.9%1. E-tail Logistics The e-tail logistics market, riding a strong e-tailing wave, was worth Rs. 3,650 crore1 in Financial Year 2015. The market is segmented across 4 parts: [a] First Mile, [b] Fulfillment Centre, [c] Line Haul and Last Mile1, [d] Reverse Logistics1. The First Mile is largely managed by either captive arms or outsourced to small unorganised local players. Fulfillment Centres are managed by captive arms; or specialist/3PL players. Line Haul and Last Mile are the main arenas for e-tail play. Reverse Logistics and special deliveries are also emerging areas. REVIEW OF PERFORMANCE Blue Dart posted Rs. 18,988 Lacs profit after tax for the year ended March 31, 2016. Income from operations for the year ended March 31, 2016 was Rs. 255,386 Lacs. During the financial year ended March 31, 2016, Blue Dart carried over 1,594.79 Lacs domestic shipments and over 8.94 Lacs international shipments weighing more than 595,623 tonnes. The key differentiators such as own dedicated aviation infrastructure, extensive reach, late pick-up/early morning delivery, reliability, security, tracking visibility across the complete delivery chain with APIs, SMS br-alerts, cash-on-delivery, focus on service quality, delivered by passionate people with a customer centric attitude have been instrumental in strengthening Blue Dart as a reliable and responsive Super Brand. The company has focused on revenue enhancement measures such as enhanced features, high yield products, close monitoring of GPI implementation, improvement in Fuel Surcharge realization, Currency Adjustment Factor (CAF), Reinforcement of Diesel Mechanism and more extensive automation deployment such as Weight Dimension Labelling (WDL) machines for volume weight capture and a relentless focus on sweating of assets and crunching costs. The company enjoys strong credit ratings; ‘A+’ assigned by ICRA (a Moody’s Investors Service Associate), IND ‘A1+’ assigned by India Ratings and Research Private Limited, ‘AA’ (long-term rating) and ‘A1+’ (short-term ratings) by ICRA and ‘AA’ (long-term rating) by ICRA & India Ratings and Research Private Limited. PRODUCTS Blue Dart offers the widest range of services in air, ground and multi modes in day definite and time definite delivery schedules. The key market-defining domestic exbrss offerings include Time Definite Solutions (Domestic Priority 1030, Domestic Priority 1200 and Dart Apex 1200) and Day Definite Solutions (Domestic Priority, Dart Apex and Dart Surfaceline). Packaging Solutions include Exbrss Pallet (Air and Ground) and Smart Box (Air and Ground). The company offers solutions for the e-tailing sector with first mile, line haul, last mile, seed centres and reverse logistics to cater to the growing needs of this emerging segment. The Company also offers Cargo Solutions like Airport to Airport, Interline and Charters along with Festive and Student Solutions like Rakhi Exbrss and Student Exbrss etc. The company is investing aggressively in infrastructure and development of all capabilities across the logistics supply chain and multiple delivery options to position the company as the brferred provider for the e-tailing industry. Initiatives such as auto-sorters, parcel lockers, ‘On the Move’ (OTMs) handheld devices, Mobile Point of Sales (MPOS) solution, Retail Point of Sales (POS) and setting out innovative delivery options such as Blue Way – a employee crowd-sourcing option, mobile service centre and parcel shops have paved the way for business. Blue Dart’s unrivalled domestic delivery system and network capabilities in India provide the perfect base for the development of nation-wide e-tailing solutions. The company is working closely with leading brands, market place sellers and retailers to help them establish a sustainable e-tailing footprint including Cash on Delivery (COD) and Reverse Logistics thus strengthening our role as a trade facilitator and enabler. The company offers industry specific solutions like Temperature Controlled Logistics (TCL), Dart SurfacelinePlus (DSP), Point to Point (P2P) and a host of value added services like Demand Draft on Delivery (DOD), Freight on Delivery (FOD), Freight on Value (FOV) and Cash on Delivery (COD) etc. Critical Exbrss caters to the huge domestic need for safe movement of items like passports, tenders and other securitised items. The Company’s global brsence, in over 220 countries and territories worldwide, is enabled through DHL Document Exbrss (DOX), DHL Worldwide Package Exbrss (WPX) and a wide range of packaging solutions. DHL Import Exbrss is a unique single window importing service that takes care of all importing needs by offering door-to-door convenience. X-Border International Services is another unique and strong service offering. Duties & Taxes Paid (DTP), Exbrss Pallet, Shipper Interest Insurance (SII) and Exbrss Easy-Student are some of the other offerings. A CUSTOMER CENTRIC BRAND The company has continuously focused on customers and key accounts, built a strong First Choice methodology and Net Promoter Approach and relentlessly worked on achieving “bestin- breed” Customer Satisfaction standards. The Net Promoter Score has moved from 58.73% in 2014 to 64.53% in 2015. Blue Dart’s equity, a measure of customer loyalty towards a brand, is the highest amongst its peers. The brand is associated with international standards, reliability, trustworthiness, hi-technology, strong corporate social responsibility and customer centricity. Blue Dart’s ‘Blue Points – Amazing Returns’ has been a successful loyalty program run across all product segments enabling nurturing, growing and building strong customer relationships. Blue Dart continues to be the lone-ranger in the Indian skies with a fleet of six Boeing 757-200 freighters with capacities up to 504 tonnes per night. The Brand Focus campaign – ‘I Love My Blue Dart’ which was launched to re-focus on an “insanely customer centric culture” was further magnified with the “I Love My Blue Dart: Exbrss Yourself” campaign. It gave every single Blue Darter an opportunity to “Exbrss their Love” for the brand. The energised Brand Custodian Program was driven with a stronger process, structure and involvement of all stakeholders to ensure that the brand is maintained with the highest levels of commitment and standards. Digital Transformation This impact of social media on our society today is simply staggering. It’s stunning to witness the sweeping changes that social media platforms have created for human connections at all levels, including educational systems, political activities, charitable organizations and businesses. Blue Dart’s social media vision is to build an essential connect between us and our brand advocates, influencers, current and prospective customers to spark conversations, inspire sharing and nurture an engaging experience to drive business results. Our brsence on social media has fetched us significant advantages like - Improved Market Intelligence, Quick Complaint Resolution, Increased Brand Awareness & Reach, Instant Feedback and Suggestions on our Products and Services, Increased Customer Engagement leading to higher Involvement & Retention thereby increasing our proximity with our customers and improving Blue Dart’s affinity. All this validates our insanely Customer-Centric culture. In 2015, strengthening our vision of enabling Blue Dart’s Digital Transformation, we introduced Blue Dart’s Facebook page, Twitter handle and improved our brsence on Google+ and YouTube. Launched on 18th February 2015, our Corporate Facebook Page has reached over 40,000 people globally. It has now become a critical brand touchpoint. We have successfully maintained 94% response rate with 2 Hours of response time and a high advocacy rate of 0.7/1 on Facebook. We also introduced the ‘Track Dart’ App and ‘Your Feedback’ App this year exclusively for Facebook to provide quick access to our users from the page itself. With our official brsence launched on Twitter on 6th October 2015, we have also established ourselves successfully on Google+ and YouTube with our engaging posts and videos. Currently, a new-age Blue Dart website transformation project is underway that will, on completion, deliver customers a more contemporary, user-friendly, feature-rich, dynamic and engaging web touch-point. Net Promoters Approach (NPA) is a tool adopted by Blue Dart. It is a Customer Loyalty measuring tool for “Customer Experience and Advocacy”. Touch points are also assessed through NPA. CREATING PROMOTER IN BLUE DART COUNTRY The brand has been successfully delighting its customers with endto- end exbrss services from a document to a charter load within India and through varied service offerings through the DPDHL group companies – DHL Exbrss (India) Pvt. Ltd., DHL Supply Chain (India) Pvt. Ltd. and DHL Logistics Pvt. Ltd. Blue Dart’s own dedicated aviation and ground infrastructure is unique and one of its kind in India. Advanced technology deployment across products services, customers and internal processes have further enhanced customer delight. Blue Dart has created distinct market differentiation in the service to e-tailing companies through advanced automation like field pickup process on handheld devices, credit card payments on field, proactive SMS notification on “Out for Delivery”, smarter reverse pickup registration, in-motion WDLs, customer APIs, improved Net Service Levels and Operations Service Quality Monitors. The Company stands for value, quality, speed, efficiency, responsiveness and service experience. Blue Dart’s service culture is further bolstered through the quality program – First Choice and initiatives such as Net Promoter Score and Key Account Management programs which serve as means of listening closely to the voice of the customer and acting on it to deliver delight in a process driven manner. Blue Dart has been servicing the e-tailing industry ever since its emergence in India. Today, Blue Dart works with all leading e-tailing players through its best-in-class, highly differentiated, last-mile delivery offering and value-added services. In 2014, Blue Dart successfully became a part of Deutsche Post DHL (DPDHL) Group’s Post - eCommerce - Parcel (PeP) division which has further enabled the company to tap on the strong growth momentum seen in the dynamic e-tailing market in India. Blue Dart is investing in the right infrastructure - including IT, multiple delivery and payment options as part of its aim to become the brferred global provider of e-tailing related services which will enable endto- end systems to deliver for e-tailing businesses. Blue Dart has the largest retail footprint in the country. The Blue Dart – DHL ‘One Retail’ stores give access to every segment of the potential market, an opportunity to experience Blue Dart’s exbrss delivery services within the country and internationally through DHL Exbrss (India) Pvt. Ltd. A RESPONSIBLE CORPORATE CITIZEN Living Responsibility or in common parlance, ‘Corporate Responsibility’ is a core element of Blue Dart’s corporate strategy. Blue Dart, as a responsible corporate citizen believes that giving back to society is not just ‘corporate social responsibility’, but a duty towards its communities and the environment from where it draws its resources. More than ‘responsibility’ it is ‘sustainability’ that is its cornerstone. In line with Deutsche Post DHL group’s ‘Living Responsibility’, Blue Dart takes its responsibility to society, communities, employees and the environment seriously. Under this credo, Blue Dart (along with DPDHL group) focuses its corporate responsibility on environmental protection (GoGreen), disaster management (GoHelp) and championing education (GoTeach). OPPORTUNITIES AND FUTURE OUTLOOK Domestic economy’s revival to augur well for sector Post the change of government at the Center, the investment cycle appears to be restarting, with slightly improved sentiments at the consumer and investor level. Investments in Manufacturing and Infrastructure, coupled with growth in the sectors mentioned above will have a direct bearing on logistics sector growth. However, on the flipside, delays in implementation of key reforms, overall global brssures and increased hyper competition will need to be closely monitored and acted upon. Air Exbrss – Growth Enablers On the domestic document front, Banking, Financial Services and Insurance Industry (BFSI) is expected to grow in the next 5 years; primarily driven by increasing penetration. Credit cards and Loans (Personal, Home), which had a slowdown recently are showing signs of picking up. Regulatory easing and the recent granting of inprinciple bank licenses to 21 entities for small and payment banks has raised expectation for quicker financial inclusion. Educational services, a key consumer for exbrss logistics market, will sustain its growth rate driven by increase in universities, colleges and exams. On the domestic commercial packages segment, Drugs / Pharmaceuticals industry has been seeing a slowdown in growth rates over the last 2 years, however will continue to grow. Medical equipment / Instruments has emerged as a key consumer industry with growth in healthcare industry and emergence of specialised equipment manufacturers hub is expected to grow. Ground Exbrss – Growth Enablers Industries are shifting ‘air’ shipments to ‘road’, due to cost brssures, and better availability of alternatives. Better infrastructure and the introduction of GST is expected to increase the brference for road exbrss. Drugs / Pharma industry has seen a moderate shift towards road exbrss and is expected to grow. Automative industry too is trending to utilise Ground Services. Electrical industry has also seen a moderate shift and is expected to grow. E-tail Logistics – Growth Enablers The e-tail logistics market is expected to grow moderately till 2020 driven by underlying e-tail market growth. The e-tail logistics market is riding on the wave of the booming e-tailing industry. Logistics market, being ~8-10%1 of total GMV, is replicating the e-tailing growth. The share of logistics is expected to go down marginally with increase in scale and productivity improvements. The scale benefit is expected to be different for different assets like sorting centres etc. Last Mile productivity improvement due to increased density of shipments is also likely. RISKS AND CONCERNS Air Exbrss – Growth Inhibitors On the domestic documents front, digitization is changing the operating model of the industry – more documents being sent electronically. The Banking, Financial Services and Insurance (BFSI) industry has increased the usage of the e-medium for sending statements, PIN generation for Debit / Credit cards etc. The improved measures of securing documents electronically (using OTP) reduces the need for secured documents. On the domestic commercial packages segment, industries are shifting ‘air’ shipments to ‘ground’, due to cost brssures and better availability of alternatives. Pharmaceuticals, Automotive, IT and Consumer Electronics are such movers to ground due to better options on road and cost-cutting measures. The players from the Auto industry are opening regional warehouses and investing in better forecasting techniques to enable them to ship spares through ground exbrss. Ground Exbrss – Growth Inhibitors Cost brssures on key industries are pushing firms to consider Full Truck Load (FTL) options as an alternative to exbrss. E-tail Logistics – Growth Inhibitors All major e-tailers are reducing dependence on the air network due to cost brssures and majority of the demand is being met regionally through their centres or the drop-ship model (supplies directly from vendor to customer). Specialist niche players are following the same approach with increasing brssure on profitability. E-tailers have a clear brference towards captive arms and specialist players. Majority of Metro / Tier-I shipments are given to captive / specialist players, while 70-80% shipments are given to 3PL players for Tier II+ cities. The 3PL players get bulkier / heavier shipments and cover distant geographies. The Operating Value Chain has seen the emergence of multiple innovations to reduce cost and enhance customer satisfaction e.g, automated parcel lockers, 3rd party pickup points (parcel shops), mobile delivery units, crowd sourcing etc. Infrastructural bottlenecks across modes (air, rail, road and waterways) have stifled growth of the sector and have promoted inefficiency. Capacity constraints and inefficiencies can be noted from the high transit time in rail as key train routes operate at >110% utilization, thus leading to an average speed of ~25km/hr. Road sector is fraught with inadequate and low quality highway availability, thereby limiting the trucks’ size and impacting economics. Essentially ‘First-world Industry’, e-tailing is operating in a ‘Thirdworld/ under-developed’ infrastructure set-up environment. The industry will continue to remain a major employer in the country as every player expands in the wake of growth, thus creating direct and indirect employment but the industry faces infrastructure issues, high operating costs, bottlenecks in state border clearance, local VAT issues over e-tailing business, proposed Postal Bill, Draft Aviation Policy, Carriage by Road Act, Local Body Tax etc. Economic Factors The Indian economy has consolidated the gains achieved in restoring macroeconomic stability from the beginning of last fiscal year (FY2015). Central Statistical Organization (CSO) expects GDP to grow by 7.6%4 in FY2016. The gradual implementation of the structural reform agenda is expected to contribute to higher growth, even though progress is lacking so far on big-ticket reforms such as the Land Acquisition Amendment Bill and the Goods and Services Tax. The implementation of legislative reforms has so far been difficult given the government’s limited support in the Rajya Sabha, but executive reforms continue to be rolled out. The Budget for FY17 contained some further announcements of reforms, including measures related to the FDI regime, the financial sector and agriculture, illustrating that the government continues to gradually broaden its reform agenda. India is relatively less exposed to external factors, including the Chinese slowdown and global capital flows. India’s economic outlook will be primarily determined by domestic factors. India’s GDP is expected to grow by 7-8%4 in the next two years, i.e 2016-17 and 2017-18. The Exbrss industry is affected by economic factors like macroeconomic growth, inflation, crude oil prices, interest rates, foreign exchange rates, investments, tax rates etc. These affect the demand and cost structure. The Aviation Turbine Fuel (ATF) price with its high price volatility and multiple rates across states due to different tax rates directly impacts operating margin. The Rupee debrciation impacts the aviation industry significantly as over 70% of its costs are in US Dollars. However, it’s not just the cost of ATF that has been impacted but also those of aircraft lease and maintenance, petrol and diesel costs, computer and software license costs, annual maintenance contract (AMC) and other allied input costs. To hedge the impact of price rises and Rupee debrciation several measures undertaken were continued during the year. Of these, notable has been customer friendly mechanisms such as Currency Adjustment Factor (CAF), Fuel Surcharge Mechanism (FSM) and Diesel Surcharge Mechanism (DSM). Under these systems, the Company’s margins will be shielded from both, the currency and fuel price fluctuation to the extent of the variable component included in the contracts. The Company faces stiff brssure on margins largely due to increasing costs at private airports, increase in real estate and infrastructure cost and revision in minimum wages, besides challenge in recruitment and retention of employees, across the hierarchy. Government Policy - Goods and Services Tax: Given the passage of the Constitution (122nd) Amendment Bill, 2014 for Goods and Services Tax (GST) in the Lok Sabha on 6th May, 2015, the Government of India seems committed to replace all the indirect taxes levied on goods and services by the Centre and States and implement GST by 2016. With GST, it is anticipated that the tax base will be combrhensive, as virtually all goods and services will be taxable, with minimum exemptions. GST the game changer: GST will be a game changing reform for Indian economy by developing a common Indian market and reducing the cascading effect of tax on the cost of goods and services. It will impact the Tax Structure, Tax Incidence, Tax Computation, Tax Payment, Compliance, Credit Utilization and Reporting leading to a complete overhaul of the current indirect tax system. GST will have a far reaching impact on almost all aspects of business operations in the country, for instance, pricing of products and services, supply chain optimization, IT, accounting and tax compliance systems. - Carriage by Road Act, 2007 and Carriage by Road Rules 2011: As few of the provisions of Carriage by Road Act, 2007 and Carriage by Road Rules, 2011 could impact the exbrss industry, the Exbrss Industry Council of India (EICI), on behalf of its members has made rebrsentations before the ‘Ministry of Road Transport and Highways’ and has requested exclusion of ‘courier companies’ from the definition of ‘Common Carrier’. The Ministry has responded to EICI that the rebrsentations are being reviewed & examined by it. EICI has recently informed Member Group Companies that the Ministry and Committee recognized that there is a need for modifying the definition of ’Common Carrier‘ and have accordingly noted the same in their recommendation. An amendment to the definition of ‘Common Carrier’ in the Act can only be done by an Act of Parliament, which may be a long drawn procedure. In the meantime, the Company Management is assessing the implications of Carriage by Road Act and Rules formulated thereunder. The Company has filed the registration application with the office of Regional Transport Authority, Mumbai on February 1, 2016. - Draft Civil Aviation: The Ministry of Civil Aviation (MoCA) has put out a revised draft of the ‘National Civil Aviation Policy’, 2015 which aims to create a better eco system. The policy in its mission statement mentions safe, secure, affordable and sustainable air travel with access to various parts of India and the world. We expect the government to not only speed up the task of developing airports but also ensure that access to business, manufacturing etc. is also developed. Also for quick processing of export and import cargo by the exbrss players effective 24x7 functioning of customs is a brrequisite. - Postal Bill: The New Postal Bill which was proposed earlier, covering the Exbrss Industry, was withdrawn due to the opposition from stakeholders. However, the Postal Department had revived the Bill with the same provisions which were in existence in the brvious Bill. The Postal Bill, if implemented, is likely to have an adverse impact on the exbrss industry, resulting in market share loss due to restrictions and higher service charges. Regulatory Hurdles The industry faces a threat from the implementation of long standing restrictive regulations. The inter-state movement of goods in India is subject to multiple taxes and clearances, which are unique in each state, resulting in considerable paperwork and transactions in the inter-state movement of goods and increase in transit time. In particular, the application of VAT over e-tailing B2C business is a major issue that hinders growth. All of this also leads to considerable delays and affects overall operations. Similarly Local Body Tax (LBT) levied by local bodies in lieu of Octroi on entry of goods in the municipal limits in the state of Maharashtra is a deterrent for business, especially for e-tailing companies as they are not generally registered locally. The Entry Tax is a tax designed to be levied on the value of consignments that enters a state. The collection of Entry Tax is anti-consumer and reduces the benefits of e-tailing to the ndconsumer. After getting a stay from the Uttarakhand High Court over the issue of entry tax and a favourable judgement from the Kolkata High Court, it is expected that these judgements would act as a deterrent for other states that are in the process of imposing Entry Tax. Customs clearance also remains an area of concern since few shipments require additional NOCs from the regulatory authorities. The cumbersome checking process and verification of documents makes the process inefficient and results into increased operational costs and delays. COMPETITION The organised and unorganised segments have their own share of competition and unique positioning and challenges. The smaller and regional players have limited network and operate in specific regions. These players also act as agents for larger players and price plays a major differentiator. The larger players have wider national and global network and systems. Brand Equity plays a major role to garner market share and charge brmium. The rise of the e-tailing industry has also resulted into the sprouting of three distinct types of exbrss logistics solutions in India. The first type are the traditional exbrss service providers who apart from working and offering solutions to the other industries also started working with e-tailers. Exbrss companies like Blue Dart offer the widest solutions to e-tailing players. The second type consists of dedicated exbrss service providers delivering e-tailing shipments only, those that offer niche, dedicated exbrss services delivering shipments of e-tailing players only with limited geographical reach. The third type comprises captive / outsourced manpower where e-tailing players have set up their own logistics primarily within metro locations. These are initiatives undertaken towards cost control. With good funding these captive arms of leading e-tailers have now started expanding their market / offering and competing with the traditional and niche exbrss players. They have offered their solutions to other e-tailing portals and are now approaching other ‘brick & mortar’ industries. INFRASTRUCTURE ISSUES Air Infrastructure The operating cost at most airports across India has also multiplied manifold without any significant improvement or differentiation in services offered, post the privatisation of major airports. The air infrastructure in the country continues to be inadequate in terms of cities covered and cargo handling capacities leading to significantly higher dwell time as compared to international standards. Insufficient aircraft bays, truck docking stations, limited space for exbrss terminals and clearance processes lead to delays and impact operational cost. There is also a tendency amongst private airport operators to increase costs such as lease rental etc. in a adhoc manner without correlation to market realities or any justification. Road Infrastructure While a lot of efforts are underway to improve the Indian road infrastructure, the average speed of travel still remains dismally low with an average speed of 25-30kms/hour as compared to averages of 80kms/hour in advanced economies. In addition, road transport has to pass through numerous checkpoints which impact the transit time and efficiency. The need to use smaller vehicles during day hours in cities leads to an increase in operating cost per move. With increased budgeted outlays, if infrastructure reforms are implemented, it could have a significant impact on the overall logistics segment. Despite these challenges, Blue Dart performed reasonably well on all fronts and capitalized on its strong brand equity and focused growth plans, customer loyalty and service quality. INTERNAL CONTROLS AND ITS ADEQUACY Across industries, internal process control and systems play a critical role in the health of a Company. An effective system of internal controls form a keystone necessary for building, maintaining and improving shareholders’ value and helps to enhance the overall quality of the business and enterprise. Blue Dart remains committed to ensuring an effective internal control environment that provides assurance on the efficiency of operations and the security of assets. Blue Dart has a sound internal control system to ensure that all assets are protected against loss from unauthorised use. All transactions are recorded and reported correctly. The Company’s internal control system is further supplemented by internal audits carried out by the internal audit team along with co-sourced audit firm, KPMG. Well-established and robust internal audit processes, both at business and corporate levels, continuously monitor the adequacy and effectiveness of the internal control environment across the Company and the status of compliance with operating systems, internal policies and regulatory requirements. The Audit Committee of the Board addresses significant issues raised by both the Internal Auditors and Statutory Auditors. The Company also conducts Risk Assessment Workshops annually to define and identify what the Company’s most significant risks are and how those risks can be mitigated. The members of the Senior Management actively participate and deliberate in the risk workshops. The company has laid the foundation of internal risk framework. HUMAN RESOURCE DEVELOPMENT Blue Dart is an Employer of Choice. A people-focused company, the Human Resources (HR) function aligns business objectives and people to forge an effective partnership. The following are some of the key areas of emphasis and results. Employee Morale & Motivation 9,313 employees participated in the Employee Satisfaction Survey (ESS) with a survey turnout of a high 99.3%. The mean satisfaction for the year recorded a high score of 4.71. Other high-scoring areas were ‘Pride in Working for Blue Dart’ (4.85); ‘My future in Blue Dart’ (4.75); Employee Engagement (4.70). ‘Job secured with good performance’, ‘Blue Dart does a good job for customers’ and ‘Working in Blue Dart is good for me’ all ranked high. Performance Management The role and grade structure were reviewed keeping in view the business growth, increased complexities and operational challenges. Competency Development Blue Dart has conceptualized a customized supervisory Leadership Development Program with an objective to develop the leadership capability of the frontline supervisors in Operations called The New Age Leadership Development Program (NALDP). The three stages are Prarambh – Key supervisory skills; Neev – Team building and management skills and Udaan – Leadership skills. Managerial Effectiveness Program (MEP - for Managerial Skills Development for Managers with teams under them) was launched to enhance leadership skills of managers. Bench strength of Leadership Pipeline In an effort to fortify the bench strength and leadership pipeline, fresh talents are infused and groomed to take on future leadership roles. Some of the initiatives are: Graduate Executive Trainee (GET) program, called Umang, a career development initiative for nurturing young talent and grooming them to become future leaders. The Blue Dart Management Trainee Development Program strengthens the future leadership pipeline. Employee Wellness and Well Being WORK LIFE BALANCE INITIATIVES In order to enhance the work life balance of employees the following new policies/initiatives were announced during the year. • Half day leave on birthdays for employees to spend quality time with family. • Extension in maternity leave from 90 to 180 days with full pay and followed by flexi-timing option for at least 5 hours for additional 2 more months post joining. Extension in Paternity leave from 4 to 6 days. • Special leave of 7 days for employees whose children are appearing in class 10th and 12th board examination. This is one of the unique initiatives adopted at Blue Dart as a best practice. Other Programs Upstairs 2015: As part of the Deutsche Post DHL Group’s corporate responsibility strategy, we continued with UPstairs, a GoTeach initiative that promotes equal education opportunity for the children of Blue Dart employees. Apbrciation Week: The 1st ever Apbrciation Week was formally launched on 9th November 2015 and went on till 21st November 2015. Idea Management: The initiative acts as a platform wherein employees can share, exchange, discuss and implement new ideas in areas ranging from cost reduction, saving, revenue generation, new product, process improvement, improving customer service, etc. EMPLOYEE REWARD & RECOGNITION In order to keep the motivation level high of the employees and recognize outstanding work done by them, 12 employees were honored with the ‘Employee of the Year’ award in Singapore for their excellent contribution. 1,311 employees were awarded with the onthe- spot Bravo award by individual managers for excellent work. 81 employees were awarded the brstigious Super Darter award for achievements beyond the call of duty. The Company is proud that 806 Blue Darters joined the True Blue Club, on completion of 5 years of service. CAUTIONARY STATEMENT The statement forming part of this Report may contain certain forward looking remarks with the meaning of applicable Securities Law and Regulations. Many factors could cause the actual results, performances, or achievements of the company to be materially different from any future results, performances, or achievements. Significant factors that could make a difference to the Company’s operations include domestic and international economic conditions, changes in government regulations, tax regime and other statutes |