contents · increase its capacity to around 1,800 beds by 2011. new hospitals on the anvil in the...

CONTENTS

In the Business of Life

Letter to Shareholders

Management Discussion and Analysis

Corporate Governance

Financials

03

04

16

58

Shareholders' Information

Max India Limited

Max India Consolidated Statement of Accounts

68

75

125

Max India Limited ANNUAL REPORT 2008-09 1


IN THE BUSINESS OF

LIFE

We are in The Business of Life…

Building each of our businesses involves Trust

Customers choose insurance companies and products on Trust

The ailing choose healthcare and hospitals based on Trust

Pharmaceutical and medical companies choose clinical research

partners on Trust

Manufacturers of food products and edibles select packaging material

based on the Trust of health and safety

Trust is paramount to our business…

As is our unwavering passion for best-in-class Service

Everywhere; for every customer; all the time

Because we believe in a simple truth…

When you combine Trust with Service

You get Growth

Max India Limited…Growing for India

TRUST + SERVICE = GROWTH

LETTER TO

SHAREHOLDERS

IN 2008-09,

AS A GROUP CROSSED THE

REVENUE MARK

MAX INDIA

US$ 1 BILLION

Dear Shareholders,

2008-09 has been the most volatile year witnessed by

the world economy since the 1930s. If you will

recollect, despite the US overhang of sub-prime loans,

the year started with a continuing global price spiral.

The prices of all major commodities continued to rise

to alarming levels — and peaked in July 2008 when

crude oil crossed US$ 145 per barrel.

Then came September 2008 and with it the severe jolts

from the US: the failure of Fannie Mae and Freddie

Mac forcing a full-fledged government takeover;

bankruptcy of Lehman Brothers; Merrill Lynch being

forced to sell to Bank of America; the collapse and

takeover of AIG; and the failure of Washington

Mutual. As if on cue, the British financial system



started to kneel over: first HBOS, then Bradford and

Bingley, and finally a bailout of RBS.

Soon the world faced a massive meltdown — starting with a

complete freezing of liquidity and soon spreading to the

real economy. While the financial system has come back to

some sort of normalcy, thanks to global interventions that

are estimated to have cost well over US$ 3 trillion, the real

economycontinues to limp. As Iwrite this letter to you:

GDP growth for US in 2009 is estimated at -2.7%,

with unemployment now at 9.5% and rising

Growth in the Euro Zone is expected to be worse still

— estimated at -4.4% for 2009

Japan is heading for another period of severe de-

growth,withGDPgrowth for2009estimatedat -6.1%

With an estimated 11% to 12% fall in the real value

of world trade, China's growth is expected to reduce

to around 7%

India's growth is down from the 9% plus range of the

last three years to 6.7% in 2008-09, with the chances

of it being the same in 2009-10

In such a milieu, is your Company, then, still in a “sweet

spot” that I wrote of in the last two annual reports? While

there may be some differences in the extent of growth,

I would still argue that Max India is in a good place. Let

me explain.

For the most part, Max India is in the business of life.

through its life insurance subsidiary Max

New York Life, a joint venture between Max India and

India is not essentially decoupled from the global

economy. While international trade is still a small

part of its GDP, there is significant coupling in

terms of investment flows into the country. And

this has certainly been affected. Even today, the

Government of India has a large role in managing

the domestic economy. The direction and nature of

this role is becoming critical in this economic

environment. For India, one would have to agree

with Amartya Sen, Nobel prize-winning economist,

that the “ invisible hand of the market place has to

be balanced by an emphasis on the visible hand of

good governance.

Protecting Life

�

�

�

�

�

�

MAX INDIA GROUP'S TOTAL

CONSUMER BASE INCREASED

FROM 2.5 MILLION IN 2007-08

TO3.5MILLION IN2008-09


DURING 2008-09, WE LAID

CONSIDERABLE EMPHASIS ON

FURTHER ENHANCING THE

GOVERNANCE SYSTEMS OF

MAX INDIA AND OUR GROUP

COMPANIES TO HELP BUILD

A TRANSPARENT, TRUSTED

COMPANY

New York Life, a Fortune 100 company.

through its healthcare company, Max Healthcare, a

subsidiary of your Company. through its

health insurance company, Max Bupa Health Insurance,

to be developed as a joint venture between Max India

and Bupa Finance Plc., UK which is set to launch soon.

And, through its clinical research

business Max Neeman, also a fully owned subsidiary of

Max India.

One thing becomes clear if you look at all the economic

data pouring out from different parts of the world. It is

this: despite the severe downturn in growth across all

countries, very few have seen any long term

deterioration in spends that have to deal with the

business of life. To be sure, life insurance has found it

difficult to sustain the high growth rates of the past.

But even here, things are not as dismal as they are in the

financial sector in general or in manufacturing and

exports. And as far as healthcare goes, it remains one of

the very few beacons of light in a pall of gloom. In fact,

in 2008-09, Max India as a group crossed the US$1

billion mark in terms of revenues and its total consumer

base increased from 2.5 million in 2007-08 to 3.5

million in 2008-09. Your Company, therefore, remains

well positioned even in these difficult times.

During 2008-09, we also laid considerable emphasis on

further enhancing the governance systems of Max India

and our group companies to help build a transparent,

trusted Company. Several renowned personalities with

specific domain expertise that fit the Companies' profile

were inducted as Directors on the Boards of our different

group companies.

Mr. Anuroop (Tony) Singh was appointed as Vice

Chairman (Non- Executive) of Max India Limited. Earlier,

he has held leadership positions at Max New York Life

(MNYL), ANZ Grindlays Bank, Bank of America and

American Express. Noted economist, Dr. Omkar Goswami,

was appointed as an Independent Director on the Board

of Max New York Life. Max Healthcare appointed Dr. Ajit

Singh as an Independent Director on its Board. He has a

rich 20 years of experience at Siemens in various roles,

most recently as the CEO of the Image & Knowledge

Management Business Group of Siemens Healthcare.

Caring for Life

Enhancing Life

Improving Life


Additionally, Ms. Marielle Theron was

appointed as Non- Executive Director at

Max New York Life. She previously headed

Business Development & Strategy, Asia, for

Swiss Re Life & Health, a large global re-

insurer. Mr. Tony Coleman, from Sydney,

Australia, was appointed as Business Advisor

to the Group and a permanent invitee to the

Max India Board. He is currently Chairman of

Enterprise & Financial Risk Committee of the

International Actuarial Association.

Let me now highlight the performance of

each of Max India's businesses. The details

are to be found in our comprehensive

chapter titled Management Discussion and

Analysis.

In a difficult year, when most of the

competitors in private sector life insurance

were forced to de-grow, your Company

continued increasing its business.

Number of policies sold since inception

crossed 36 lakh, with sum assured of

around Rs. 94,000 crore

Policies sold increased by 38% to 12.1

lakh in 2008-09 – crossing the 10 lakh

policies a year mark for the first time

since inception

MAX NEW YORK LIFE (MNYL)

�

�

THE MARKET SHARE OF MNYL AMONGST

PRIVATE SECTOR INSURANCE COMPANIES

INCREASED BY 100 BASIS POINTS TO 6%


�

�

�

�

Gross premium increased by 42% to Rs. 3,857 crore

First year premium (individual plus group) grew by

15% to Rs. 1,843 crore. Individual adjusted first year

premium (adjusted for single premium at 10%)

increased by 22% from Rs. 1,308 crore in 2007-08 to

Rs. 1,595 crore in 2008-09

Renewal premium income grew by 80% to Rs. 2,014

crore in 2008-09

Assets Under Management Rs. 5,561

crore in2008-09

With this growth, the market share of MNYL amongst

private sector insurance companies increased by 100

basis points to 6% in 2008-09. And, the

of the life insurance business increased by 74% to

Rs. 2,284 crore in 2008-09. is the

present value of the future earnings of the Company and

is a universally used method of measuring value creation

of a life insurance company.

The growth shows up in many different ways. During

2008-09, MNYL significantly expanded the distribution

reach by opening 279 agency offices, 95 offices for

Emerging Markets and 10 Direct Sales offices. In addition,

MNYL tied up with Indian Oil Corporation and opened 124

sales offices at its Kisan Sewa Kendras in Punjab, Haryana

and Uttar Pradesh, total network of offices reached to 705

as on March 31, 2009. The number of agent advisors

crossed 84,600, up by 129% over last year. MNYL

significantly grew the partnership distribution channel by

setting up ten new relationships — two with corporate

agents and eight with brokers ten new bancassurance

relationships withurbanand rural cooperativebanks.

It entered the rural markets of Maharashtra and Gujarat

by opening 62 offices; and tied up with a multi-state

scheduled co-operative bank and four district central

cooperative banks to increase its potential reach to 38

lakh customers through over 550 bank branches. During

the year, it also launched Max Vijay — a product designed

to meet the insurance needs of the rural and semi-urban

markets.

grew by 50% to

—

Embedded Value

Embedded Value

THE EMBEDDED VALUE OF THE LIFE

INSURANCE BUSINESS INCREASED

BY 74% TO RS. 2,284 CRORE IN

2008-09. EMBEDDED VALUE IS THE

PRESENT VALUE OF THE FUTURE

EARNINGS OF THE COMPANY AND IS

A UNIVERSALLY USED METHOD OF

MEASURING VALUE CREATION OF A

LIFE INSURANCE COMPANY

Embeddded Value (Life Insurance)

(Rs. crore)

1,316

2,284

2007-08

2008-09

MAX HEALTHCARE TURNED CASH POSITIVE DURING THE YEAR. IT IS PLANNING TO

INCREASE ITS CAPACITY TO AROUND 1,800 BEDS BY 2011. NEW HOSPITALS ON THE

ANVIL IN THE NATIONAL CAPITAL REGION INCLUDE SAKET, EAST DELHI, NORTH WEST

DELHI, GREATER NOIDA AND IN DEHRADUN, MOHALI AND BHATINDA IN NORTH INDIA

In addition, MNYL launched its new brand positioning

with the tagline 'Karo Zyaada Ka Iraada'. Those of you

who watched the IPL Twenty-20 matches in South Africa

as well as the T-20 World Cup in England would have seen

the new MYNL advertisements on television.

Success in a long term business like Life Insurance

depends on how well a company deploys the

policy-holders' funds. In this, MNYL continued to

outperform benchmarks during 2008-09. In the

sphere of investment management, Outlook Money

ranked MNYL as the top performer in three of its ULIP

funds categories.

All of this was due to happy and motivated employees.

The Gallup Employee Engagement score ranked MNYL as

the best employer in the financial services sector in India

and in the top 25 percentile globally.


MAX HEALTHCARE (MHC)

�

�

�

�

�

�

Today, Max Healthcare has six super-speciality and

multi-speciality hospitals and two speciality medical

centres located in the National Capital Region (NCR).

It is in the process of expanding and upgrading its

existing facilities as well as extending its footprint to

other cities in North India. Given its commitment to

the highest standards of medical and service

excellence, patient care, scientific knowledge,

research and medical education, Max Healthcare has

emerged as one of the country's leading healthcare

service providers.

Consider some of the facts:

The network of Max Healthcare hospitals

performed over 450 open heart surgeries, 2,000

angioplasties and 4,130 angiographies. In

addition, there were over 2,150 ortho-surgeries,

870 neuro-surgeries and 15,390 other surgeries

and procedures.

The average number of operational beds increased

from 662 in 2007-08 to 712 in 2008-09. The

average occupancy rate was 65% and average

length of stay maintained at 3.3 days

Number of patient episodes increased by almost

19% to over 1.9 million in 2008-09. In the last

quarter of 2008-09, Max Healthcare averaged

around 165,000 patient episodes per month.

Commitment to high class healthcare service has paid

off in terms of profitability as well.

Revenue from all hospitals in our network grew

nearly 13% to Rs. 423 crore in 2008-09 from

Rs. 372 crore in 2007-08

EBITDA for 2008-09 at Rs. 29 crore, grew 46%

year-on-year. The EBITDA Margin improved to 7%

in 2008-09 from 5% in 2007-08

Business turned cash positive during the year

Max Devki Devi Heart and Vascular Institute combines

cutting-edge technology with internationally

acclaimed professional expertise to deliver a range of

advanced cardiac care services. This covers all areas of

non-invasive and interventional cardiology,

cardio-thoracic care and includes consultations and

diagnostics, testing, surgeries and post-surgical care.

Max Super Speciality Hospital provides tertiary care

facilities with Centres of Excellence in

aesthetic and reconstructive surgery,

internal medicine, joint replacement and other

support services.

Max Healthcare is planning to increase its capacity to

around 1,800 beds by 2011. It plans to not only expand

further in the NCR region but also widen its operations

to other parts of India. The 100 bed Max Hospital at

Dehradun will become operational by first quarter of

by

orthopaedics,

neurosciences, paediatrics, obstetrics and

gynaecology,



MAX BUPA IS COMMITTED TO

BECOME THE MOST ADMIRED

HEALTH INSURANCE COMPANY IN

INDIA THAT WILL CONSISTENTLY

DELIVER HIGH QUALITY AND BEST-

IN-CLASS CUSTOMER EXPERIENCE.

IT HAS ALREADY PUT IN PLACE ITS

TOPMANAGEMENT TEAM

2011. Max Healthcare has also been allotted land by

Government of Punjab under a public-private partnership

arrangement to set up 200 bed super-specialty hospitals

at Bhatinda and Mohali.

I would urge you to read the details on Max Healthcare in

the chapter on

In July 2008, your Company and the Bupa Group, a

leading UK based international health and care company,

formed a new partnership to enter the health insurance

market in India. The joint venture, Max Bupa Health

Insurance Company Limited, will offer a suite of products

to both consumers and business customers. The initial

share capital of the JV will be Rs. 100 crore, where Max

India will have a 74% stake while Bupa Group proposes to

hold the remaining stake. As in everything else that your

Company does, Max Bupa is committed to become the

most admired health insurance company in India that will

consistently deliver high quality and best-in-class

customer experience. It has already put in place its CEO

and the Top Management team with domain expertise

and global exposure.

Max India's clinical research business via its subsidiary

Max Neeman Medical International Limited, provides a

broad range of clinical research services to global

pharmaceutical, device and biotechnology companies,

and also collaborates with other contract research

organisations in various fields.

Although at an early stage of development, Max Neeman

has enrolled over 5,800 patient subjects across 200 sites

since its inception. In 2008-09, it enrolled more than 2,100

subjects. It has been steadily increasing its client base,

which is now up to 48. In 2008-09 alone, Max Neeman

successfully provided services to 21 clients for 55 new

clinical research studies. Patients, too, are comfortablewith

Management Discussion and Analysis.

MAX BUPA

MAX NEEMAN


the company, whose patient retention rate — a critical

business driver in clinical trials — is 98% against an industry

average of 65% to 70%. Max Neeman caters to several

prestigious customers that include large pharmaceutical

companies such as Merck, GlaxoSmithKline, Bristol Myers

Squibb, Sanofi-Aventis, Johnson & Johnson, Novartis,

Pfizer, AstraZenecaandWyeth.

In addition to the business of life, your Company —

through Max Speciality Products — manufactures niche

and high barrier BOPP films, thermal lamination films and

leather finishing foils. MSP leverages its strengths in

product technology and a keen knowledge of markets and

customer needs to produce and sell high value added

products for the top end of the market.

In 2008-09, Max Speciality Products' net revenue

increased by 21% to Rs. 370 crore, sales volume grew

by 19% y-o-y.

EBITDA was Rs. 51 crore with the operating margin

(EBITDA to net sales) at 14%.

Revenues from BOPP, the major business segment,

increased by 24% to Rs. 362 crore in 2008-09. EBITDA

in the BOPP business increased by 13% to

Rs. 51 crore. PBT in the BOPP business grew by 21% to

Rs. 25 crore

Max Speciality Products is in the process of expanding its

production capacity of BOPP films. Its capacity is slated

to increase by 69% to 49,000 TPA by end of the next

financial year.

MAX SPECIALITY PRODUCTS (MSP)

�

�

�

MAX SPECIALITY PRODUCTS IS

SLATED TO INCREASE ITS

CAPACITY BY 69% TO 49,000

TPA BY END OF THE NEXT

FINANCIAL YEAR


MAX INDIA FOUNDATION HAS

TOUCHED AROUND 27,000

LIVES ACROSS 100 LOCATIONS

THROUGH 2,300 VOLUNTEERS

AND 90 NGO PARTNERS

MAX INDIA FOUNDATION (MIF)

Business is not only about growth and increasing profits.

Long term sustainability requires a commitment to being

good corporate citizens. For your Company, corporate

social responsibility (CSR) is a way of life. The Max India

Foundation is the CSR arm of Max India group. It

spearheads the CSR initiatives of the various group

companies and partners with several reputable NGOs

such as CanSupport, SOS Children's Village, Manav Seva

Sannidhi and Chinmaya Mission. Max New York Life, Max

Healthcare and Max Speciality Products are actively

involved in various CSR activities under its aegis. Max

India Foundation has touched around 27,000 lives across

100 locations through 2,300 volunteers and 90 NGO

partners. You can read more about our CSR interventions

in the chapter on Management Discussion and Analysis.

India has weathered the growth downturn better than all

developed and most Emerging Market economies. Thanks

to the stimulus given in the first budget of the

new government under Prime Minister Manmohan Singh,

I believe that we will return to a higher growth path. Not

the 9% that we saw earlier, but in the region of 7% in

2009-10, if not a bit higher. Max India and its various

enterprises are well geared to take full advantage of this

growth. I am therefore confident that your Company will

do significantly better in 2009-10 and deliver superior

value.

Let me thank all the Board Members, Management, all the

employees of Max India group companies for the support

and for their unwavering commitment to service quality

and delivery. With their dedication and your consistent

support, we will together conquer many a peak in the

years to come.

My special thanks to our partners New York Life and Bupa

for their continuing faith and support.

With my best wishes,

ChairmanAnaljit Singh


BOARD OF DIRECTORS

MAX NEW YORK LIFE INSURANCE

COMPANY LIMITED

Mr. Analjit Singh – Chairman

Mr. Anuroop (Tony) Singh - Vice Chairman

Mr. Rajesh Sud - Chief Executive Officer

& Managing Director

Mr. Rajit Mehta - Executive Director &

Chief Operating Officer

Mr. John Harrison - Non-executive Director

Ms. Marielle Theron - Non-executive Director

Dr. Omkar Goswami - Non-executive Director

Mr. Rajesh Khanna - Non-executive Director

Mr. Richard Mucci - Non-executive Director

MAX INDIA LIMITED

MAX HEALTHCARE INSTITUTE LIMITED

Mr. Analjit Singh - Chairman &

Managing Director


Mr. Aman Mehta - Non-executive Director

Mr. Ashwani Windlass - Non-executive Director

Mr. Leo Puri - Non-executive Director

Mr. N.C. Singhal - Non-executive Director

Mr. N. Rangachary - Non-executive Director

Mr. Piyush Mankad - Non-executive Director


Mr. S.K. Bijlani - Non-executive Director

Dr. S.S. Baijal - Non-executive Director

Mr. Analjit Singh – Chairman


Dr. Pervez Ahmed - Managing Director

Dr. Ajit Singh - Non-executive Director

Mr. K.K. Mathur - Non-executive Director



Dr. R.P. Soonawala - Non-executive Director

MAX BUPA HEALTH INSURANCE

COMPANY LIMITED

Mr. Analjit Singh - Chairman

Mr. Anthony Frank Cabrelli*- Non-executive Director

Mr. Anuroop (Tony) Singh - Non-executive Director

Mr. Dean Allan Holden* - Non-executive Director


Mr. William Stephen Ward* - Non-executive Director

*Bupa nominees to be formally inducted

MANAGEMENT DISCUSSION

& ANALYSIS

INTRODUCTION �

�

�

Max India Limited ('Max India or 'the Company') is a

multi-business corporate entity. It is driven by the

spirit of enterprise with a focus on people and service

oriented businesses. Through its different enterprises

— most of which, focus on bettering and protecting life

— Max India remains committed to its vision to be one

of India's most admired companies that is recognised

for service excellence.

through its life insurance subsidiary

a joint venture between Max

India and New York Life International, the global arm

ofNewYork Life, a Fortune100company

through its healthcare company,

a subsidiary of

Max India Limited

through its health insurance

company, Max Bupa Health Insurance, a joint

Protecting Life

Max New York Life,

Caring for Life

Max Healthcare Institute Limited,

Enhancing Life


MAX INDIA REMAINS COMMITTED

TO ITS VISION TO BE ONE OF

T H A T I S

RECOGNISED FOR ITS SERVICE

EXCELLENCE

INDIA'S MOST ADMIRED

C O M P A N I E S


venture between Max India and Bupa Finance Plc., UK

which is set to launch after statutory approvals

through its clinical research business,

Max Neeman, a fully owned subsidiary of Max India.

Each of these different ventures has a well defined

strategy in place. Each operates in markets that have

significant potential for long term value generation.

Today, these companies are in the investment and

development phase of their growth cycles. Their business

objectives are centred on developing the base

infrastructure, building long term customer relationships

and developing brand equity based on recognition for

excellence.

In addition to these “life-centred” businesses, Max India

manufactures speciality products for the packaging

industry through its division -

It has a leadership position in India and is poised for

further growth. Here, too, there is a strong service

excellence orientation that strives on building long

lasting partnerships with marquee customers.

Some of the major developments at Max India and its

businesses in 2008-09 are given in Box 1.

Improving Life

Max Speciality Products.

�

BOX1: HIGHLIGHTS OF DEVELOPMENTS IN 2008-09

International Finance Corporation invested

Rs. 150 crore in Max India

Life Insurance

Healthcare

Speciality Products

Max India resets its Health Insurance JV with Max

Bupa

10,326,311 shares allotted at Rs. 145.26 per share

for 4.4% stake in Max India

IFC already holds 3.8% stake in Max Healthcare

Embedded Value as on 31 March 2008-09 was

Rs. 2,284 crore – growth of 74% over 2007-08

Value of new business grew by 17% to Rs. 312 crore

in 2008-09

Max Healthcare was awarded land by the

Government of Punjab to build hospitals in

Bathinda and Mohali, with 200 beds each under

public private partnership by 2011

Max Healthcare continued implementing its plans

to add around 1,000 beds by 2011-12

Initiated plans to add another 20,000 TPA capacity,

taking total capacity to 49,000 TPA by end of 2010

Max India proposes to hold 74% stake in Max Bupa

�

�

�

�

�

�

�

�

While driven by the same value systems and underlying

mission, each of the businesses have its own

operational and market dynamics. In terms of their

organisational structure, too, they operate as separate

entities. In the next sections, we review each of the

independent businesses, which is followed by a financial

review of Max India as a consolidated entity.


MAX NEW YORK LIFE INSURANCE COMPANY LTD.

relationships with customers. While growth is a

prerogative for MNYL, it remains committed to realising

its vision to be the most admired life insurance

company in India.

MNYL offers both individual and group life insurance

solutions. In 2008-09, it continued to improve the span

and quality of its distribution network across India and

develop flexible product and solutions with a goal to

create a long term value-based partnership with its

customers. The salient features of MYNL's performance in

2008-09 are given in Box 2.

OVERVIEW

Max India Limited's foray into the insurance sector is

through its subsidiary Max New York Life Insurance

Company Ltd (MNYL). This is a joint venture (JV) with New

York Life International, the global arm of New York Life, a

Fortune 100 company.

Since its incorporation in 2000 and commencement

of commercial operations in 2001, it has evolved into one

of India's leading private sector insurance companies.

MNYL focuses on a positioning based on the quality

platform. This includes quality of products, quality of

service, quality of the asset base and quality of

www.maxnewyorklife.com


THE INDIAN LIFE INSURANCE SECTOR –

FACINGASPEEDBREAKER NOTAROADBLOCK

MNYL's development in 2008-09 in terms of its long term

positioning in the Indian life insurance space is better

understood by analysing its performance in light of the

developments in the life insurance sector in India.

Looking back, there were two major factors that

had contributed significantly to the rapid expansion

of the life insurance industry in India during the last

seven to eight years. First, with several new players

entering Life Insurance industry in the private sector,

there was a massive expansion in distribution

networks that helped penetrate the inherent untapped

demand for insurance products in India. Second,

there was the introduction of Unit Linked Insurance Plans

or ULIPs. These plans were hybrids of pure insurance

and savings, providing the policyholders an opportunity

to participate in market growth. In the milieu of a

buoyant stock market, these schemes provided

good returns and gained popularity among investors in

the last few years.

The 'sub-prime' led global financial crisis followed by the

severe global liquidity crunch in August-November 2008

and the sharp fall in GDP growth across the world had its

repercussions on the Indian insurance sector as well.

With global financial institutions being forced to

deleverage and re-capitalise their balance sheets, there

was massive capital flight from financial markets in

emerging economies like India. Naturally, the Indian

stock market witnessed a meltdown. This, coupled with

the general macro-economic uncertainty had an adverse

effect on investor sentiments. Indians were much more

cautious with their financial planning — resulting in a

general trend to postpone financial commitments and

hold on to cash.

In 2008-09, therefore, faced with a liquidity crunch and a

focus on cost management, most insurance companies

re-evaluated their plans of rapidly growing their sales

networks — especially at the pace seen earlier. As a result,

there was considerable slowdown in the expansion of

agency distribution. And, with the stock market crashing,

returns from equity oriented ULIP funds became relatively

unattractive. Consequently, life insurance prospects took

�

�

�

�

�

Number of policies sold since inception crossed 36

lakh, with sum assured of around Rs. 94,000 crore

Policies sold increased by 38% to 12.1 lakh in

2008-09 – surpassing the 10 lakh policies - a year

mark for the first time since its inception

Gross premium increased by 42% to Rs. 3,857 crore

in 2008-09

First year premium (individual + group) grew by

15% to Rs. 1,843 crore in 2008-09

Renewal premium income grew by 80% to

Rs. 2,014 crore in 2008-09.

BOX 2: MNYL'S PERFORMANCE HIGHLIGHTS, 2008-09



longer to decide on buying ULIPs which further

slowed down life insurance growth.

As a result, after eight years of strong growth since

the opening up of the sector to private participation

in 2000, the life insurance industry in India

witnessed negative growth for the first time in

2008-09. As Chart A shows, the total first year life

insurance premiums (including individual and

group) fell by 6.3% in 2008-09 and the number of

policies remained virtually flat — growing by only

0.1% in 2008-09.

In this difficult scenario, it is worth noting that

MNYL managed to overcome the market slowdown

and actually recorded a growth of 22% in Individual

Chart A: Total 1st Yr

Life Insurers (India)

87,108

92,989 2007-08

2008-09

50,923

50,874

2008-09

2007-08

Premium (Rs.crore)

Policies ('000)

Source: Insurance Regulatory and Development Authority of India (IRDA)

MNYL HAS ALWAYS FOCUSED ON

QUALITY. ON THE DISTRIBUTION SIDE,

WHILE STEADILY GROWING THE

NETWORK, IT HAS CONTINUOUSLY

EMPHASISED ON THE PRODUCTIVITY OF

ITS AGENTS


adjusted first year premium (FYP). This bears testimony to

its strategy of creating a superior positioning in the

Indian life insurance market.

As stated earlier, MNYL has always focused on quality. On

the distribution side, while steadily growing the network,

it has continuously emphasised on the productivity of its

agents. So, while competitors have had to focus on costs

of distribution and curtail their aggressive growth plans

in 2008-09, such considerations were already a part of

MNYL's calibrated strategy for penetrating markets. As

will be discussed in detail in subsequent sections, it

continued to effectively execute this strategy in 2008-09.

Despite significant slowdown in 2008-09, the Indian life

insurance market remains attractive in both the medium

and long term. There are several reasons for this.

The middle class in India is continuing to grow and so

are incomes and savings.

The demographic structure is still tilted towards the

younger generation, with the share of 15-30 year olds

in the total population continuing to grow. This

generation has greater need to invest in securing

against life-related risks.

Today, the Life Insurance sector is still just 4% of GDP.

Given the experience of other developed and relatively

matured emerging market countries, there continues to

be largegrowthpotential for insurance in India.

With no formal social security structure in place in

India, the need for financial protection through

insurance products will continue to be even stronger

with increasing need for savings to meet various life

stage requirements.

In some ways, 2008-09 has been a year of correction. The

froth in the system created mainly by the aggressive

penetration of ULIPs has partly cleared out, and the

industry is expected to grow according to its natural long

term growth trajectory.

Equally, the industry is getting increasingly competitive.

Four new players entered the life insurance space during

2008-2009. With their entry, India now has 21 private life

insurance companies besides the government-owned Life

Insurance Corporation of India. In this market, MNYL

remains focused on its efforts to retain and further

develop its competitive advantage.

First year premium (including individual and group

premium without adjusting for single premium)

increased by 15% from Rs. 1,598 crore in 2007-08 to

Rs. 1,843 crore in 2008-09. Individual adjusted first year

premium (adjusted for single premium at 10%) increased

by 22% from Rs. 1,308 crore in 2007-08 to Rs. 1,595 crore

in 2008-09. The group business recorded a first year

premium income of Rs. 31 crore in 2008-09.

Chart B shows that in 2008-09, the North Zone continued

to be the largest contributor to adjusted first year premium

of the company with a share of 37%. The West Zone was

the second largest contributor with 32% share, followed by

theSouthwith20%and theEastwith11%share.

By adding 118 new offices and

26,576 new agent advisors in 2008-09, MNYL now

The North Zone:

�

�

�

�

�

MNYL – MAINTAINING INCREASED MARKET

PENETRATION AND GROWTH

PERFORMANCE ACROSS INDIA



knowledgeable people of Gujarat and Maharashtra, it

remains a huge market for any life insurance company

in India. MNYL expanded its distribution in these

states with a clear focus on developing its hub and

spoke model for rural markets. In 2008-09,

MNYL opened 148 new offices, 62 of which were

in Emerging Markets, and added 22,894 new

agent advisors. With this expansion, it now has

29,442 agent advisors in 204 offices in the West Zone.

MNYL added 82 new offices, taking

the total to 120 at the end of 2008-09. 13,619 agent

advisors were inducted to strengthen the existing team,

taking the overall agent advisor strength to 15,095 in

the south zone. MNYL also entered into four new

referral tie-ups with district central cooperative banks

for EmergingMarkets inAndhraPradesh.

Here, the focus in 2008-2009 was to

develop the base distribution infrastructure. MNYL

expanded its presence here. By the end of 2008-09, it

had 50 offices and 7,561 agent advisors.

The South Zone:

The East Zone:

�

�

has a team of 32,553 agent advisors in 202 agency

offices. Within this zone, it strengthened its network

with a special focus on developing the Emerging

Markets in Haryana by opening 33 new offices.

The West Zone: With the affluent and financially�

East

11%

South

20%

North

37%

West

32%

Chart B: Zone-Wise Performance

MNYL MANAGED TO OVERCOME

THE MARKET SLOWDOWN AND

ACTUALLY RECORDED A GROWTH

OF 22% IN INDIVIDUAL ADJUSTED

FIRST YEAR PREMIUM (FYP) THIS

BEARS TESTIMONY TO ITS

STRATEGY OF CREATING A

SUPERIOR POSITIONING IN THE

INDIAN LIFE INSURANCE MARKET

CHANNEL-WISE PERFORMANCE

MNYL has always believed that a multi-channel

distribution strategy is the right solution for succeeding

in a country as vast and diverse as India. Though the

agency channel continues to be the core distribution

channel, there are others as well. During 2008-2009,

Agency Distribution contributed 65% to the total sales,

followed at 22% by Partnership Distribution, 3% by

Bancassurance, 5% by DST and 5% by Emerging Markets

(see Chart C).

MNYL significantly expanded the distribution reach by

opening 279 agency offices, 95 offices for Emerging

Markets and 10 DST offices in 2008-09. In addition,

MNYL tied up with Indian Oil Corporation and opened

124 sales offices at its Kisan Sewa Kendras in Punjab,

Haryana and Uttar Pradesh, total network of offices

reached 705 as on March 31, 2009. The number of agent

advisors crossed 84,600, up by 129% over last year.

Agency

65%PartnershipDistribution

22%

Bancassurance

3%

DST 5%Emerging

Markets 5%

Chart C: Channel-Wise Performance


MNYL’S EMERGING MARKETS

DISTRIBUTION CHANNEL ALSO

TIED UP WITH A MULTI-STATE

SCHEDULED CO-OPERATIVE

BANK AND FOUR DISTRICT

CENTRAL COOPERATIVE BANKS.

CONSEQUENTLY, IT CAN NOW

REACH 38 LAKH CUSTOMERS

THROUGH A NETWORK OF MORE

THAN550 BANK BRANCHES


While agency expansion is important to drive the growth

momentum by reaching out to a larger section of the

population, MNYL remains focused on continuously

increasing the productivity of its agent advisors. This has

been the case throughout the company's operation,

except in 2008-09. Due to depressed consumer

sentiment, expansion into less lucrative smaller towns

and a minor shift in product mix towards protection

oriented policies, there was a marginal decline in case

rate and case size of the agents in 2008-09. However

MNYL agent advisors continued to be most productive in

Indian Life Insurance industry.

Training remains a critical element of MNYL's approach

to effectively develop its distribution networks. It has 865

in-house trainers across the country. Apart from

providing pre/post - license and induction training, the

trainers also help the distribution teams stay abreast with

market developments and new product launches.

2008-09 also witnessed a significant growth for MNYL's

Partnership Distribution channel. It established ten new

relationships — two of which were with corporate agents

and eight with brokers. In addition, there were tie-ups done

with nine banks as referral partners. MNYL also entered into

an agreement with Barclays Investments and Loans India

Ltd. as a corporate agent providing it access to a network of

around 1,200 branches. The DST channel was also

strengthenedbyopening10newbranches.

MNYL registered a strong growth in its distribution reach

for Emerging Markets. For the first time, it entered the

rural markets of Maharashtra and Gujarat by opening

31 offices respectively in the two states. The Emerging

Markets distribution channel also tied up with a multi-

state scheduled co-operative bank and four district

central cooperative banks. Consequently, it can now

reach 38 lakh customers through a network of more than

550 bank branches.

To further penetrate the Emerging Markets, MNYL tied-

up with Indian Oil Corporation to distribute its products

through its Kisan Seva Kendras, and activated 124 such

outlets during 2008-09. These outlets are designed to

service various needs of rural consumers, right from

agriculture inputs and mobile telephony to consumer

durables and life insurance.

Subdued consumer sentiments and the Indian stock

market downturn in 2008-09 resulted in a risk aversion

and consequently greater demand for traditional

products. The contribution of ULIPs to new business sales

reduced from 87% in 2007-08 to 75% in 2008-09 for

MNYL. MNYL, however, continued to focus on a balanced

portfolio of ULIPs and traditional products for protection

and long term wealth creation.

The new products that had been launched in 2007-08

started generating results in 2008-09. In fact, these

products — such as Life Maker Premium, Life Invest,

Smart Steps and LifeLine series of health insurance

products — were the major growth drivers for MNYL and

contributed 37% of the annualised first year premium

(AFYP) in 2008-2009.

Life Maker Premium, the savings cum insurance ULIP

plan, became the most popular product in the

company's portfolio.

Smart Steps, the unit linked child plan, became one of

the leading products in MNYL portfolio in the first

PRODUCT-WISE PERFORMANCE

�

�


THE NEW PRODUCTS THAT HAD

BEEN LAUNCHED IN 2007-08

S T A R T E D G E N E R A T I N G

RESULTS IN 2008-09. IN FACT,

THESE PRODUCTS SUCH AS LIFE

MAKER PREMIUM, LIFE INVEST,

SMART STEPS AND LIFELINE

SERIES OF HEALTH INSURANCE

PRODUCTS WERE THE MAJOR

GROWTHDRIVERS FOR MNYL


year of its launch. This is in line with conclusions from

consumer research that indicated that around 85% of

the households in India who have children in the age

group 0-12 years rate children's education as one of

the primary needs for savings.

The LifeLine series of health insurance products also

received good response from the market with sales of

almost 1,08,119 policies in 2008-09.

Retirement planning is also gaining momentum in

India. MNYL's product, Smart Invest, the unit linked

retirement plan, received an encouraging response

from the market.

During 2008-09, MNYL launched two new products —

Smart Assure and Unit Builder, both ULIP products aimed

�

�

at protection and long-term wealth creation.

Smart Assure is a regular contribution-based ULIP. It

has innovative features like dynamic fund allocation

that adopts a life-stage based asset allocation

strategy with an in-built mechanism to beat inflation

through premium and coverage indexation. Another

innovation is the dynamic opportunities fund that

rebalances assets depending on market conditions,

helping stabilise and maximise return on investments

for customers. The product has been well accepted by

the market.

Unit Builder was launched for partnership

distribution channel as a strategy to introduce more

customised channel specific product solutions. It is a

�

�



regular premium unit linked product for the mid-

market segment — a customer segment where

partnership distribution has strong reach.

To cater to changing customer preferences and risk

perceptions, MNYL is in the process of enhancing its

product portfolio by introducing debt-based funds with

assured minimum return along with unit linked solutions

and family floater health insurance. It will also launch an

innovative new platform, which will have assured

minimum accumulation benefit along with the

transparency and flexibility of a unit linked solution.

It is the strength of the long term relationships that MNYL

builds with its customers that has helped sustain growth

especially in times of a market slowdown like 2008-09.

There are four broad areas of MNYL's focus on customers.

These are:

Customer relationship management

Brand positioning and development

Special product customisation

Asset management

In 2008-09, MNYL emphasised the use of technology to

improve customer relationship and service. It launched an

Interactive Voice Recording (IVR), which is most

comprehensive both in terms of services covered as well

MNYL – FOCUSING ON CUSTOMERS

�

�

�

�

CUSTOMER RELATIONSHIP MANAGEMENT

as the number of languages used in which customers can

interact. After careful analysis of the customer base, the

IVR service has been launched in 10 selected languages.

The IVR is available round the clock and is supplemented

by customer service executives who are available from

7.30 am to 11 pm.

MNYL has also enhanced its customer offerings by

enhancing convenience and options for payments. Today,

apart from the regular option of paying by cheque or cash

at the company's offices, policyholders have the

convenience of paying through the internet or through

texting using mobile phones or through bank ATMs and

multiple other means. To inform the policyholders about

these payment options, MNYL ran multiple

communication campaigns throughout 2008-09.

On the operations front, MNYL launched I-Care, which

provides single-window view of the customer's details

even at its branch offices. With this facility, customer

service executives can immediately resolve queries at the

point of customer contact without having to refer them

to the centralised customer service centre. To create one

view of the customer and to manage and track all

customer touch points, a state-of-the-art Customer

Service Management System was launched. This system

is now available at more than 320 offices across India and

to the entire customer service team at the main office.

A customer portal was also launched in 2008-09. This

provides policyholders with an option for managing their

relationships online. The website provides online access


for service transactions, information on premium

receipts, payments and the NAV status of ULIPs.

MNYL focuses on integrating feedback from all key

stakeholders to optimise its value proposition through

continuous improvements in processes and practices.

Emphasis is laid on utilising effective listening posts and

customer surveys and operations are regularly upgraded

based on these inputs.

Given the challenges facing MNYL in terms of managing

scale effectively and handling channel and geographical

diversity in the most optimum manner, it has started a

strategic multi-functional project aimed at developing

superior customer experiences. The benefits of this

initiative should be seen in the next financial year.

In a highly competitive business like life insurance in

India, it is important to build long lasting relationships

through a brand that the target audience spontaneously

relates to. MNYL has always concentrated on this front

BRAND POSITIONING AND DEVELOPMENT

with the belief that brand building is not done through

marketing communication alone, but also by reinforcing

its image and values at every customer touch point.

It is important to periodically develop and refresh the

brand image while maintaining the core brand value and

ethos. In line with this belief, MNYL launched its new

brand positioning with the new tagline 'Karo Zyaada Ka

Iraada' to provide a more dynamic and youthful image to

the brand. This positioning is in tune with an ambitious

and assertive India that is ready to compete for more,

demand more, dream more and live more to create a

better today and brighter tomorrow.

During 2008-09, MNYL was engaged in several

innovative and pioneering marketing initiatives. It was

the exclusive associate sponsor of the Indian Premier

League (IPL) 2008, the inaugural edition of India's

professional cricket league. It also tied up with the Indian

Railways for advertising on three Rajdhani Express trains,

which provided a unique moving outdoor advertising

opportunity by covering the train with MNYL's messages.

MNYL LAUNCHED ITS NEW BRAND

POSITIONING WITH THE NEW

TAGLINE 'KARO ZYAADA KA

IRAADA' TO PROVIDE A MORE

DYNAMIC AND YOUTHFUL IMAGE

TO THE BRAND RESULTING IN

BRAND AWARENESS GROWING

TO 74%



MNYL also launched five new advertising campaigns

during 2008-09. Three of these got a place in the top 10

advertisements of the year lists by NDTV Profit, Mint and

Synovate. The website of Max New York Life was rated

No. 1 in design and No. 2 in usability by Juxt Consult, an

Indian online research company. It received high share of

voice in print and television editorial space.

All these marketing efforts resulted in brand awareness

scores going up from 63% in 2007-08 to 74% in 2008-09

as per AC Nielsen brand track.

MNYL was declared a “Superbrand” by Superbrands India,

an independent brand authority, formed with the

objective of identifying and paying tribute to exceptional

brands.

India is a vast country with heterogeneous markets.

Therefore, for specific markets one needs to create

specifically designed products and distribution systems.

MNYL believes there is considerable scope of penetrating

rural and semi-urban markets. Thus, in 2008-09, it

launched Max Vijay — an initiative designed specifically

to match the lifestyle, income patterns and needs of this

segment.

Max Vijay has the potential to change the way insurance

is procured, sold and serviced in the country. The product

not only fulfils the customers' primary need of financial

protection, but also facilitates long-term savings.

Specifically, its design helps to meet the unique

challenges of unpredictability in life and income flow of

the underserved segments of the Indian population. To

reach out to remotely located customers, MNYL has

placed 'Max Vijay' on a customised technology driven

distribution and service model.

SPECIAL PRODUCT CUSTOMISATION: MAX VIJAY

MNYL BELIEVES THERE IS CONSIDERABLE

SCOPE OF PENETRATING RURAL AND

SEMI-URBAN MARKETS. THUS, IN 2008-

09, IT LAUNCHED MAX VIJAY — AN

INITIATIVE DESIGNED SPECIFICALLY TO

MATCH THE LIFESTYLE, INCOME

PATTERNS AND NEEDS OF THIS SEGMENT


INVESTMENT MANAGEMENT

MNYL continued to consistently outperform the

benchmarks during 2008-09. This was recognised by the

business publication 'Outlook Money', which ranked

MNYL as the top performer in the Slow (up to 20% in

equity), Medium (up to 40% in equity) and Quick fund (up

to 60% in equity) categories. This reflects the investment

management capabilities of the company to act in rapidly

changing market conditions and maximise returns to the

policyholders over a long term. Table 1 compared the

performance of various MNYL products since inception as

compared to a benchmark.

Secure 7.33% 6.63% 0.70%

Conservative 9.13% 7.14% 1.99%

Balanced 11.44% 8.38% 3.06%

Growth 15.80% 10.47% 5.33%

Growth Super -8.78% -17.49% 8.71%

Total Portfolio 10.30% 4.60% 5.70%

Since inception

Fund Name Fund Performance Benchmark Performance Funds vs Benchmark Return

Table 1: Performance of MNYL ULIPs

MNYL – FOCUSING ON ITS PEOPLE

MNYL is a diverse organisation bound together by a

common thread of values. This value system is based

around 6 cornerstones - caring, honesty, excellence,

knowledge, integrity and teamwork. It is an open, honest

and ethical organisation that puts emphasis on

connecting with its employees, agent advisors and

customers through all touch points and continuously

communicating the strength of the organisation and its

continued growth plans.

MNYL is a people centric company. Over the years, it has

created a team of capable and engaged employees. MNYL

continues to focus on its 'Employee Value Proposition'

which promotes a work culture where employees see

value in their engagement with the organisation — enjoy

their work, deliver results, develop great relationships

with supervisors and colleagues, get fairly rewarded for

their efforts and feel respected.

This is reflected in the Gallup Employee Engagement

scores, where MNYL is the best in the financial services

sector in India and in the top 25 percentile globally in the

Gallup universe. It has also won various other awards

such as the BT Mercer award, which ranked it No.7 in the

“Best Companies to Work For”, and the Gallup Great Work

Place Award 2009.



OVER THE YEARS, MNYL HAS CREATED A TEAM OF CAPABLE AND ENGAGED EMPLOYEES.

MNYL RANKED BEST IN THE FINANCIAL SERVICES SECTOR IN INDIA AND IN THE TOP 25

PERCENTILE GLOBALLY IN THE GALLUP UNIVERSE. IT CONTINUES TO FOCUS ON ITS

‘EMPLOYEE VALUE PROPOSITION’ WHICH PROMOTES A WORK CULTURE WHERE

EMPLOYEES SEE VALUE IN THEIR ENGAGEMENT WITH THE ORGANIZATION

During 2008-09, over 10,000 people were recruited

taking the current employee base to 15,402.

During 2008-09, MNYL initiated the CII-Exim Bank

MNYL – FOCUSING ON QUALITY AND

BUSINESS EXCELLENCE

Business Excellence journey — the only life insurance

company to do so. To institutionalise process excellence,

more than 300 business processes were mapped and

measured across MNYL to promote process orientation

and data based decision making across the organisation.

Findings from these will be converted into actionable

goals to further enhance the quality platform.


operating systems, internal policies, and regulatory

requirements are continuously monitored to maintain

adequacy and effectiveness.

The ERM framework is being further strengthened to

provide sharper focus on key business risks,

encompassing the internal and external landscape.

MNYL remains strongly committed towards ensuring an

effective internal control environment. It continuously

strives to provide assurance on the efficiency and efficacy

of internal controls and security of company assets.

The company also initiated more than 100 Six Sigma

Programs, which enabled it to leverage cutting edge

quality tools and techniques to enhance both

effectiveness and efficiency of its key processes.

MNYL's Internal Audit and risk management function

follows the COSO framework and conducts periodic risk-

based reviews. The internal control environment across

the various functions and the status of compliance with

RISKS, CONCERNS AND INTERNAL CONTROL

SYSTEMS

DURING 2008-09, MNYL

INITIATED THE CII-EXIM BANK

BUS INESS EXCELLENCE

JOURNEY — THE ONLY LIFE

INSURANCE COMPANY TO

DO SO



MAX HEALTHCARE INSTITUTE LTD.

of its existing facilities and also extending its footprint to

other cities in North India.

As a business, MHC is progressing as per plan.

Shareholders may recall that in 2007-08. MHC generated

operating profits (positive EBIDTA) for the first time in its

history. This trend continued in 2008-09 and MHC in its

network of hospitals turned Cash positive. MHC financial

highlights are given in Box 3.

Some mistakenly believe that there is a dichotomy

between profits and social goals in the field of healthcare.

OVERVIEW

Through its subsidiary Max Healthcare Institute Limited

(MHC), Max India Limited provides comprehensive

international-class healthcare services in India.

With six super-speciality and multi-speciality hospitals

and two speciality medical centres located in the

National Capital Region (NCR) and commitment to the

highest standards of medical and service excellence,

patient care, scientific knowledge, research and medical

education, MHC has emerged as one of the country's

leading top-of-the-line healthcare service providers. It is

in the process of expanding and further upgrading some

www.maxhealthcare.in


�

�

�

byRevenue from all hospitals in our network grew

nearly 13% to Rs. 423 crore in 2008-09 from

Rs. 372 crore in 2007-08

EBITDA for 2008-09 at Rs. 29 crore, grew 46%

year-on-year. The EBITDA Margin improved to 7%

in 2008-09 from 5% in 2007-08

Business turned cash positive during the year

BOX 3: FINANCIAL HIGHLIGHTS – MHC (2008-09)

perspective, in MHC they will have a reliable institution,

which they can rely on whenever there is a need for any

service related to healthcare.

The basic social and demographic characteristics in India

continue to drive demand for healthcare services in India.

The primary drivers are:

Growing elderly population

Rise in income levels leading to greater ability to

afford better healthcare services

Rise in incidence of lifestyle related health problems

Greater access to medical insurance.

The macro opportunity for healthcare in India is large.

On any of the key metrics, be it number of hospital beds

(India has 1 for every 1,500 people as against the World

Health Organisation's requirement of 1 for every 300),

number of doctors or potential size of the industry- the

opportunity is promising.

Given these trends, the healthcare industry in India is

expected to reach over US$75 billion by 2012 and

US$150 billion by 2017 (Technopak Advisors Report,

THE MACRO ENVIRONMENT

�

�

�

�

This is not true. Sustainable profits occur only when

patient needs are met — when more and more patients

come to healthcare facilities driven by the reputation for

quality and affordability, and when these patients leave

satisfied by their treatment and after care. Satisfied

patients are any healthcare entity's best referrals. And

satisfied patients require commitment to medical quality

and care. So, it is only when the social goal is served —

providing people with high quality yet affordable

healthcare — can profits flow in. For Max Healthcare, the

two objectives are well aligned and accountability is

ensured. There is a large segment of the Indian population

that is looking towards institutions that can regularly

cater to their healthcare needs with the best of services at

prices that are affordable to the people. MHC is focused

on establishing itself as a 'one of its kind' healthcare

service provider — a trend setter that epitomises the

highest standards of healthcare services in the country.

It is this commitment to 'Excellence in Patient Care' that

is at the core of a mutual relationship of trust between

MHC and its patient base. From MHC's perspective, its

business growth will depend on the sustainability of long

term relations that can be developed with patients. These

relations also help create reputational value for further

growth of the patient base. From the patients'



India Healthcare Trends 2008). Given that much of the

services are necessities, this sector will remain more or

less insulated from external economic developments, as

was evident in 2008-09.

However, there were hurdles in making new investments.

Especially, with a virtual freeze on access to capital,

funding new facilities was difficult. In fact, the economic

slump in 2008-09 had offered opportunities for

healthcare services players to focus on developing

facilities at relatively lower costs. But, not many players

could take this opportunity. MHC, on the other hand,

continued to implement its investments plans in existing

and new facilities.

As a result, while investments were on, the focus in this

segment has been on developing operational efficiencies,

make ventures more profitable and to stress on providing

better customer experience to grow the patient base.

The highlights of MHC's operations are given in Box 4.

MHC OPERATIONS - FOCUS ON QUALITY AND

FACILITIES

MHC IS COMMITTED TO THE HIGHEST

STANDARDS OF MEDICAL AND

SERVICE EXCELLENCE, PATIENT CARE,

SCIENTIFIC KNOWLEDGE, RESEARCH

AND MEDICAL EDUCATION

BOX 4: OPERATIONAL HIGHLIGHTS, MHC IN

2008-09

�

�

�

The network of hospitals performed over 450 open

heart surgeries, 2,000 angioplasties and 4,130

angiographies. In addition, MHC performed over

2,150 ortho-surgeries, 870 neuro-surgeries and

15,390 other surgeries and procedures

The average number of operational beds at

MHC increased from 662 in 2007-08 to 712 in

2008-09. Average occupancy rate at MHC hospitals

was 65% and average length of stay maintained at

3.3 days

Number of patient episodes (measured by number of

invoices issued to patients during any period)

increased from 1.6 million in 2007-08 to over 1.9

million in 2008-09. In the last quarter of 2008-09,

MHC averaged around 165,000 patient episodes per

month

MHC has stressed on retaining and growing patient

traffic by providing a comprehensive and seamless 'start


MHC HAS EMERGED AS ONE OF

THE COUNTRY’S LEADING TOP-

OF-THE-LINE HEALTHCARE

SERVICE PROVIDER. MHC IS IN

THE PROCESS OF EXPANDING ITS

CAPACITY TO AROUND 1,800

BEDS BY 2011

excellence across different activities. Some of the

important aspects that are covered include clinical

governance, certifying credentials and clinical privileging

of physicians and nurses, use of standardised and

evidenced based protocols, patient and staff safety,

infection control, audit culture and continuous

professional development.

MHC also lays strong emphasis on service quality. This is

maintained through a system that continuously assesses

operational efficiencies and effectiveness and is oriented

towards process based performance. The organisation

has processes laid down to meet customer expectations

as per ISO standards. Various CTQs (Critical to Quality)

steps from each process have been identified and these

are regularly monitored.

For quality improvement, MHC has adopted Six Sigma.

The focus is to not only satisfy customer needs completely

but to also do so in the most cost efficient manner. For

this purpose, it has adopted DMAIC and Lean

methodology. A systematic data driven approach is used

to reduce variation in process outcomes, eliminate non

to finish healthcare services that include consultations

and diagnostics, testing, treatment and post-surgical

care. There is considerable emphasis on investing in

state-of-the-art healthcare infrastructure and

equipment. Some of the cutting edge equipment used at

MHC includes BrainSUITE (Asia's first and India's most

advanced neurosurgical operating theatre), Novalis Tx

with RapidArc technology, LINAC, DSA Lab and 64-Slice

CT Angio.

There are three focus areas of MHC's operations. These

include:

Excellence in patient care

Excellence in training, education and research

Development of world class facilities

At the core of all MHC's operations is the concept of

'Patient Centred Care'. This has been executed primarily

by a rigorous implementation of the 'Medical & Service

Excellence Model'. The model promotes operational

�

�

�

EXCELLENCE IN PATIENT CARE



FOR QUALITY IMPROVEMENT,

MHC HAS ADOPTED SIX

SIGMA. THE FOCUS IS TO NOT

ONLY SATISFY CUSTOMER

NEEDS COMPLETELY BUT TO

ALSO DO SO IN THE MOST

COST EFFICIENT MANNER

faster response time for these customer feedbacks.

On the quality front alone, MHC has received several

certifications and awards. These include:

on

'Economics of Quality' from the Quality Council of

India, conferred during the National Quality Conclave

held in New Delhi in February 2009. MHC is the first

organisation in the country from the healthcare

sector to receive this award.

– Max

Healthcare won the Express Healthcare Excellence

awards for 'Best Managed Healthcare Program' and

'Innovative Marketing Practices'

Five of MHC's hospitals and the home office were

re-certified for ISO 9001, i.e. QMS (Quality

Management System), and one hospital is certified

for ISO 14001 i.e. EMS (Environment Management

System). Two hospitals are in process of getting IMS

(Integrated Management System) encompassing

QMS+EMS+OHSAS.

The prestigious DL Shah National Award

Express Healthcare Excellence Awards

ISO:

�

�

�

value-added activities, and to optimise process

deliverables.

There is a comprehensive performance measurement

system for key processes that include medical and

services related activities. The system named 'SPARSH'

has 90 key performance indicators that are tracked

uniformly across all hospitals. These are regularly

reviewed against preset targets to see the performance

trend and identify opportunities for improvement. Apart

from this, a Medical Quality Dashboard has been

introduced to monitor adverse events and clinical

outcomes. Recently, an innovative, first of its kind

“Scorecard” has been developed for key clinical

departments that tracks business, service and clinical

outcomes on an integrated platform.

MHC continuously generates feedback through a

customer satisfaction questionnaire, which is then

analysed for problem areas. The current patient

satisfaction levels with the medical care and service

deliverables range above 90%. A new electronic feedback

system has been introduced with the expectation of


�

NABH is an

autonomous body established in 2005

under the Quality Council of India for

setting benchmarks in Indian healthcare

industry.

In 2006-07, the tertiary care

hospitals of Max Healthcare-Max

Devki Devi Heart and Vascular

Institute (MDDHVI) and the Max

Super-Speciality Hospital (MSSH)

became the first two hospitals of

North India to receive the NABH

accreditation.

National Accreditation Board for

Laboratories (NABL): In 2006-07,

M H C a c q u i r e d t h e N A B L

accreditation for its laboratory at

MSSH.

NABH standards for Blood Bank

Accreditation: The Blood Bank in

Saket (Delhi) is among the first few

in the country to receive this

accreditation in February 2009,

which is aimed specifically at

accrediting for excellence and safety

in management of Blood Banks. The

Blood Bank at Max Balaji Hospital

PPG has recently undergone a

successful NABH accreditation

a s s e s s m e n t a n d t h e f i n a l

announcement is awaited.

National Accreditation Board for

Hospitals and Health Care

Organisations (NABH):

•

•

•

MHC HAS STRESSED ON RETAINING AND

GROWING PATIENT TRAFFIC BY PROVIDING

COMPREHENSIVE AND SEAMLESS ‘START

TO FINISH’ HEALTHCARE SERVICES THAT

I N C L U D E C O N S U L T A T I O N S A N D

DIAGNOSTICS, TESTING, TREATMENT AND

POST-SURGICAL CARE



M A X H E A L T H C A R E H A S

ESTABLISHED SEVERAL POST

GRADUATE/UNDER GRADUATE

E D U C A T I O N P R O G R A M M E S

WITH AROUND 100 DOCTORS/

PARAMEDICS/NURSES UNDERGOING

FORMAL EDUCATION PROGRAMS IN

2008-09

Support Training, Basic Cardiac Life Support Training,

Pediatric Life Support, First aid and Airway

Management.

Under an MOU with Hamdard University, New Delhi,

BSc in Emergency Trauma Care and Technology.

Residency Exchange Program with Mount Sinai

Medical School, USA

Several short courses /Fellowships to expose

physicians in periphery to super-speciality areas like

neuroradiology, spine surgery, cardiology,

neonatology and laparoscopic surgery

Simulation Based Trainings have been introduced this

year

Post Graduate Diploma in Neuro Nursing.

On training, there were around 100 doctors/paramedics/

nurses undergoing formal educationprograms in2008-09.

On research, Several Clinical Trials are underway. The

organization has recently established a Stem Cell

Research Committee, and is exploring this new exciting

area of research.

�

�

�

�

�

EXCELLENCE IN TRAINING, EDUCATION AND

RESEARCH

MHC has achieved distinction in training, education and

clinical research.

On education, Max Healthcare has established several

Post Graduate/Under Graduate education programmes.

Some of these are:

Post Graduate Programs (Diplomate National Board)

in Cardiology, Cardiac Surgery, Cardiac Anaesthesia,

Interventional Cardiology, Internal Medicine,

Radiology and Pathology

Post Graduate Diploma in Clinical Cardiology (IGNOU)

Fellowship in Emergency Medicine in Collaboration

with George Washington University, USA

Post Graduate Diploma in Critical Care Medicine

under aegis of Indian Society of Critical Care

Medicine, Fellowship in Critical Care

Max Healthcare is an American Heart Association

(AHA) recognized centre for Advanced Cardiac Life

�

�

�

�

�


WORLD CLASS FACILITIES

The details of the existing facilities are as follows:

Max Devki Devi Heart and Vascular Institute

combines cutting edge technology with internationally

acclaimed professional expertise to deliver a range of

advanced cardiac care services. This covers all areas of

non-invasive and interventional cardiology, cardio-

thoracic care and include consultations and diagnostics,

testing, surgeries and post - surgical care.

Max Super Speciality Hospital provides tertiary care

facilities with Centres of Excellence in Orthopaedics

and joint replacement, Neurosciences, Paediatrics,

Obstetrics and Gynaecology, Aesthetic and

Reconstructive surgery, Internal medicine and other

support services. The Centres of Excellence at Max Super

Speciality Hospital include:

Max Institute of Orthopaedics and Joint Replacement

offers comprehensive and latest treatment for joint

replacement using computer navigation and ortho

disciplines like sports medicine, management of

arthritis and trauma, ortho-trauma, spinal surgery

and paediatric orthopaedics

Max Institute of Neurosciences boasts of high-end

�

�

technology including BrainSUITE (Asia's first and

India's most advanced neurosurgical operating

theatre), Flat Panel DSA lab. It also has India's first

DynaCT for treatment of stroke, aneurysm and spine

— where an interventional neuro-radiologist can see

live images of the brain while performing the

procedure. BrainSUITE is the first integrated high

field intra-operative MRI, which neurosurgeons can

use to operate upon complicated brain tumours with

utmost precision.

Max Institute of Paediatrics has a team of highly

experienced paediatricians and paediatric super-

specialists. It has fully equipped neo-natal ICUs

with round-the-clock neonatologists providing

multi-speciality care to premature babies. Our

state-of-the-art paediatric ICUs (PICU) can treat

critically ill children suffering from life threatening

conditions.

Max Institute of Obstetrics and Gynaecology offers

advanced maternity and reproductive healthcare

service even to patients in high risk groups. Other

services range from reproductive care and mother and

child healthcare to infertility.

Max Institute of Aesthetic and Reconstructive

Surgery is a Centre of Excellence for advanced

TM

TM

�

�

�



microsurgery and craniofacial surgery. It is also a

pioneer in aesthetic surgery of the face and body. The

Institute has introduced the latest techniques in

plastic surgery like vacuum assisted wound

healing, absorbable facial fracture plating, facial

assembly, disassembly for brain base tumours, and

feather lift in aesthetic surgery. It is in the process of

entering into the futuristic domain of stem cell

research.

Max Institute of Internal Medicine offers core

medical services, which include indoor patient care,

outdoor patient care and preventive health checks.

Max Home Care programme under the aegis of this

institute extends healthcare services to patients

beyond the confines of the hospital and enables

patients and caregivers to maintain continuity of

care.

Max Institute of Allied Medical Sciences offers

comprehensive services in medical, surgical and

minimal access surgery programmes with a state-of-

the-art surgical ICU, medical ICU, dedicated

�

�

endoscopy suite, sleep lab and five modular operation

theatres.

Max Balaji Hospital is a world class tertiary

healthcare facility. It is equipped with high-end

infrastructure, systems and processes. The facility and

equipment at present offers medical and surgical

services in all major disciplines.

Max Hospital, Pitampura provides excellent

healthcare over a range of services. Well-equipped

OTs, dialysis services and facilities for advanced

laparoscopic surgery are some of the services

available.

Max Hospital, Noida offers speciality treatment for a

wide range of ailments including chronic care

programmes in diabetes, asthma, arthritis and

hypertension.

Max Hospital, Gurgaon is a multi-speciality hospital

with intensive care services, an endoscopy unit,

modular OTs and advanced radiology and pathology

diagnostics.

�

�

�

�


engine of economic growth. Opportunities will bring

competition from other Indian and foreign players

including new entrants in the healthcare sector. MHC

recognises that high quality standards and strong brand

recall will be the major determinants of competitive

advantage in an increasingly competitive market.

With MHC almost doubling its bed capacities,

managing the increased scale of operations and

improving utilisation rates will be challenges. The

modern healthcare services industry is very capital

intensive and the expansion plans will require significant

capital expenditure. Thus, the growth strategies depend

on the ability to fund these expenditures and build,

acquire and manage additional hospitals as well as

expand, improve and augment the existing hospitals.

Healthcare business is highly dependent on the ability to

attract and retain leading doctors and other healthcare

professionals, particularly nurses and paramedics

professionals. Given MHC's excellent facilities and best-

in-class compensation packages, it expects to continue

hiring doctors and nurses according to needs.

On balance, MHC is confident of achieving the

expansions on time, meeting its growth targets, offering

greater patient care and facilities, and generating

superior shareholder returns in the future. We believe

that Max Healthcare occupies a sweet spot in a rapidly

growing industry.

MHC is working on increasing its capacity to around

1,800 beds by 2011.With the first phase of roll-out

already completed, the second phase of expansion is

progressing as per plan. During this phase, MHC plans to

not only expand further in the NCR region but also widen

its operations beyond the NCR of Delhi to other parts of

India. Some facts about the progress of the entire

expansion are:

The new wing of the Max Balaji Hospital with 260

beds (at Patparganj, across the river Yamuna) is

expected to start operations by October 2009

Comprehensive oncology care to start at Saket by

September 2009.

Additional 90 beds at Saket will become operational

by April 2010.

The 100 bed Max Hospital at Dehradun will become

operational by first quarter 2011

MHC has acquired land in north-west Delhi and

Greater Noida for setting up 300-bed hospitals

MHC has been allotted land by Government of Punjab

under a public-private partnership arrangement to

set up 200 bed super specialty hospitals at Bathinda

and Mohali.

The healthcare delivery industry is set to become an

�

�

�

�

�

�

OUTLOOK, RISKS AND CONCERNS



MAX BUPA HEALTH INSURANCE COMPANY LTD.

business strategyandcreating themanagement team.

With a 2% penetration, health insurance usage is low in

India and around 70% of the population uses self-

funding for medical treatment. While health insurance is

a nascent industry, it has immense growth potential. This

has been evident from the recent past, which suggests

that the health insurance industry has grown at a CAGR

of 36% over the last eight years. The total market size was

estimated at Rs. 6,604 crore in 2008-09.

MARKETS AND OPPORTUNITIES

OVERVIEW

Max India Limited and Bupa Finance Plc, a leading UK

based international health and care company, formed a

joint venture to enter the health insurance market in

India in September 2008.

The venture called Max Bupa Health Insurance Company

Limited, will offer a suite of products catering to the health

and wellness needs of its customers subject to regulatory

approvals. The initial share capital of the JV will be Rs. 100

crore, where Max proposes to hold a 74% stake while Bupa

Finance Plc proposes to hold the remaining stake. During

2008-09, this business concentrated on developing its

www.maxbupa.com


India. The strategic focus is on evolving a consumer-centric

model that delivers a high quality and consistent customer

experience. The mission is to help families live healthier and

more successful lives by becoming their healthcare partner

byprovidingexpertise for life.

The aim is to drive the above by differentiating on product

and service delivery, leveraging global expertise in health

management solutions that go beyond health funding.

In order to take advantage of the timing of the start up of

Max Bupa and the heritage of the investors, the company

is focusing their attention through 2009 on the following

areas to help achieve the strategy:

Build better products

Embrace technology

Customer service differentiation

Risk management focus

Provider - relations management

�

�

�

�

�

Today, the category is undifferentiated and

commoditised with both the quality and price of products

being fairly low. Max Bupa views the existing low

consumer awareness, experience and lack of product and

service innovation as potential areas to provide

differentiation and gain market share as a new entrant.

In fact, given these market realities, there is tremendous

opportunity for Max Bupa to help shape the industry in a

positive way in India. There is need in the market for high

quality health insurance products that can add value to

the lives of the people insured. The key opportunities lie in

improving product and process transparency, improving

customer service and creating trust. It will also be

important to differentiate on health care support as well

as insurance funding.

In line with the group's vision, Max Bupa is also committed

to become the most admired health insurance Company in

THE STRATEGY

WITH A 2% PENETRATION, HEALTH INSURANCE USAGE IS LOW IN INDIA AND

AROUND 70% OF THE POPULATION USES SELF-FUNDING FOR MEDICAL

TREATMENT. WHILE HEALTH INSURANCE IS A NASCENT INDUSTRY, IT HAS IMMENSE

POTENTIAL FOR GROWTH, EVIDENCED BY THE FACT THAT IT HAS GROWN AT A CAGR

OF 36% OVER THE LAST EIGHT YEARS. THUS, MAX BUPA IS COMMITTED TO BECOME

THE MOST ADMIRED HEALTH INSURANCE COMPANY IN INDIA

www.maxbupa.com


MAX NEEMAN MEDICAL INTERNATIONAL LTD.

USA is the global pharmaceuticals hub, its global

headquarters is at Cary, North Carolina, USA. With closer

proximity to customers, the US operation is mainly

responsible for business development and marketing

initiatives. The actual clinical research operations are

based out of India.

Given the cost-cutting imperatives that large

pharmaceutical companies face, clinical research is an

attractive opportunity. With its talented clinicians,

INDUSTRY STRUCTURE AND DEVELOPMENT

OVERVIEW

Extending the scope of operations in the healthcare

related space, Max India Limited entered the business of

clinical research through its subsidiary Max Neeman

Medical International Limited (MNMI).

It is a value adding clinical research organisation (CRO)

that provides a broad range of clinical research services to

global pharmaceutical, device and biotechnology

companies. It also collaborates with other CROs in

providing a variety of services.

MNMI operates through a dual-shoring model. As the

www.neeman-medical.com

diverse patient pool and lower cost advantage, India is

well poised to take advantage of the outsourcing

opportunity arising from the implementation of the

Trade-Related Aspects of Intellectual Property Rights

(TRIPS) accord and World Trade Organization (WTO)

norms. Estimates suggest that the Indian clinical trials

industry will reach US$1.3bn by 2012, implying a CAGR of

more than 40% over the next five years.

However, newer entrants in this industry may have to go

through longer gestation periods to develop relationships

with innovators — as was the case with contract

manufacturing companies. There continues to be some

hurdles. For example, Phase-I trials of foreign drugs can

be conducted in India but only as a 'repeat' of an earlier

Phase-I trial done outside India. Applying for this requires

submission to the regulators of the earlier Phase-I data

generated outside India. Although the regulation is in

place to avoid potential abuse, it takes away a part of the

potential revenues from Indian companies.

As a business, MNMI is still at a very early stage of

development. Revenues increased from Rs. 11.1 crore in

2007-08 to Rs. 15.0 crore during 2008-09, while profits

grew to Rs 1.2 crore in 2008-09 against a profit of

Rs. 0.7 crore in 2007-08.

MNMI is increasing its client base. It added five

new clients during 2008-09 taking the total client

base to 48.

The site monitoring and clinical data management unit,

which was set up in 2006-07, is starting to bear fruit. In

its second full year of operations in 2008-09, revenues

from the site monitoring unit increased to Rs. 7.7 crore

PERFORMANCE HIGHLIGHTS


from Rs. 4.1 crore in 2007-08. During 2008-09, site

monitoring grew 88%, and clinical data management by

164% — albeit over a low base.

With operations stabilising, MNMI now offers services

across five segments: (i) Site Management (ii) Site

Monitoring (iii) Clinical Data Management (iv) Project

Management and (v) Supply Chain Management of

clinical trial material.

On the clinical research front, where it provides services

in Phases II, III, and IV of clinical trial studies, it now has

access to over 1,000 ICH GCP trained investigators. A

team of over 120 clinical research coordinators and

associates with a pan-India presence across 22 cities

gives MNMI access to patients and investigator sites for

various therapeutic areas.

With a wider portfolio of offerings, MNMI started getting

greater business from several of its established partners

in the US and Europe.

Since the commencement of MNMI's India operations,

over 5,800 subjects have been enrolled at over 200 sites.

In 2008-09 alone, MNMI enrolled more than 2,100

subjects. An automated workflow process ensures

efficient and accurate data management. With its

high quality operating standards, MNMI successfully

provided services to 21 clients over 55 new studies

during 2008-09.

MNMI's patient retention rate — a critical business driver

in clinical trials — is 98% against an industry average of

65% to 70%. It caters to several prestigious customers

that include large pharmaceutical companies such as

OPERATIONS

www.neeman-medical.com


SINCE THE COMMENCEMENT

OF MNMI'S INDIA OPERATIONS,

OVER 5,800 SUBJECTS HAVE

BEEN ENROLLED AT OVER 200

SITES. IN 2008-09 ALONE,

MNMI ENROLLED MORE THAN

2,100SUBJECTS

Merck, GlaxoSmithKline, Bristol Myers Squibb, Sanofi-

Aventis, Johnson & Johnson, Novartis, Pfizer,

AstraZeneca and Wyeth as well as other medium size

companies such as Achillion, Globelimmune, AP Pharma,

ORA, KV Pharmaceuticals and Onconova.

Most employees of MNMI have professional degrees in

medicine or pharmacology. All employees have been

trained for a minimum of 50 hours in 2008-09 to improve

skill sets. High retention rate has been maintained by

providing a harmonious and favourable work

environment. The employee count increased from 150 at

the end of 2007-08 to over 200 at the end 2008-09.

MNMI follows a robust system of quality control and all

its operational activities are governed by strict adherence

to ICH-GCP guidelines. It is the first CRO in India whose

four sites have been audited successfully by USFDA.

MNMI has been certified for ISO 9001:2000 for site

management, monitoring, and data management. All its

activities and operations are governed by robust standard

operating procedures (SOPs).

The CRO industry is highly dependent on R&D


expenditures of pharmaceutical and biotech companies.

These expenditures vary in any given year. Operating

results are also subject to volatility due to external

constraints such as the commencement, completion,

cancellation or delay of contracts. Progress of ongoing

projects, cost overruns and competitive industry

conditions are also sources of risks. The ability to develop

and market new services on a timely basis with changes in

the service mix for various clients always remains a

challenge. Equally, this provides an opportunity to

increase client retention with the delivery of superior

service skills and offerings.

In this business, there are potential product and

conduct liability risks. There is also competition from

in-house research departments of pharmaceutical

companies, universities and teaching hospitals, as well

as other CROs.

Despite these risks, MNMI is confident of future growth.

It has the requisite skill sets and infrastructure. It is

developing deep relationships with many marquee

clients. It has best-in-class processes and controls.

Therefore, it expects growing revenues and profits in the

years ahead.


MAX SPECIALITY PRODUCTS LTD.

and abroad. Its ability to build lasting relationships with

such customers has resulted in sustained growth over the

last few years. In 2008-09, MSP continued with its

pursuit of quality, making it one of the most recognised

and respected players in the BOPP industry. In the leather

finishing foil business, MSP has added capacity, which

will further enhance its product range.

The financial highlights are given in Box 5.

PERFORMANCE HIGHLIGHTS

OVERVIEW

Max Speciality Products (MSP) – a division of Max India

Limited - manufactures niche and high barrier

BOPP films, thermal lamination films and leather

finishing foils.

MSP's core strength is its product technology and its

ability to produce and sell value added products with

focus on successfully catering to the demands of top end

quality conscious customers.

Today, MSP has a distinguished customer base in India

www.maxspecialityproducts.com


INDUSTRY STRUCTURE AND DEVELOPMENT

�

�

�

The BOPP industry continues to witness a growth of 18%

to 20% per annum in India and 7% per annum globally. To

take advantage of this growth, the installed capacity of

BOPP in India increased by 20% in 2008-09. This addition

in capacity got absorbed without any negative impact on

Industry. In fact, in 2009-10, one expects this capacity to

go up further.

India still has a low per capita consumption compared to

China and other more developed regions of the world. So,

even with a 6%-6.5% growth in GDP per annum, there is

expected to be a healthy growth in packaging demand in

India. There are also other growth drivers, which are

accelerating BOPP films demand in India. These are:

The retail boom

The strong 15% growth per annum in the Indian

converting industry

India emerging as the hub for supplies to

multinational companies in the converted products

space

Indian BOPP players have significant advantages over

their European, American and Japanese counterparts

because of the low cost base and large growing Indian

market. Also the consumption of flexible packaging in

India is relatively low. These factors will enable flexible

packaging industry in India to grow at a healthy rate.

MSP's plant is located at Railmajra, near Chandigarh. It is

accredited with ISO 9001:2008 and ISO14001: 2004 and

also certification for OHSAS 18001:2007 for

environment, occupational health and safety.

During 2008-09, the plant successfully catered to

increasing volumes. It witnessed volume growth of 18%

in sales of BOPP film and 28% in thermal film sales. Much

of this was achieved by maintaining high production

efficiencies. In fact, in 2008-09 all its BOPP production

and metallisation lines achieved 100% capacity

utilization.

Human resources are the most valuable asset at MSP and

it continues to focus on attracting and retaining the best

available talent. MSP provides an excellent and

OPERATIONS

HUMAN RESOURCES

�

�

�

�In 2008-09, MSP's net revenue increased by 21% to

Rs. 370 crore, sales volume grew by 19% y-o-y.

EBIDTA increased by 4% to Rs. 51 crore in 2008-09.

Operating margin (EBIDTA to net sales) at 14% in

2008-09.

Revenues from BOPP, the major business segment,

increased by 24% to Rs. 362 crore in 2008-09.

EBIDTA in the BOPP business increased by 13% to

Rs. 51 crore. PBT in the BOPP business increased by

21% to Rs. 25 crore.

BOX 5: MSP'S FINANCIAL HIGHLIGHTS, 2008-09


comfort about their adequacy and adherence. Further

internal audit and management reviews are conducted

regularly and the reports are regularly submitted for

review to the Audit Committee.

Large capacity additions are on the anvil in India in 2009-

10, which may put pressure on margin. However,

it is expected to be a temporary phenomenon. After the

first half of 2010-11, with a higher demand-supply

equilibrium, this margin pressure should ease up.

There can be likely pressure on margins due to large

capacity addition in China and Middle-East creating an

initial phase of over-supply and price competition. Also,

sharp fluctuation in PP prices (PP is derivative of petroleum

prices) as was seen in 2008-09 may result in inventory

gains or losses. In 2008-09, MSP successfully passed on all

rawmaterial andother cost increases to themarket.

MSP will strive to mitigate all these risks by a sharp focus

on development of new products, enhancing sales of

speciality products, focusing on Blue Chip customers and

further improving operational efficiencies.


professional work environment and also ensures

customised training and development programmes at all

levels of employees. Performance is recognised and

rewarded on merit and special stress is laid on innovation.

MSP has also initiated skill-upgradation and education

programmes for its workmen.

The total number of employees as on 31 March 2009

was 429.

Relationship with workmen is cordial and MSP staff

continues to get awards from Government organizations

for safety. In its endeavour to adopt world class

manufacturing as the primary initiative, MSP has

developed a mission that pursues ecologically

sustainable economic growth and has signed the code for

ecologically sustainable business growth evolved by the

Confederation of Indian Industry (CII). It is the first

company in the BOPP sector to sign this code.

MSP has adequate internal control system in place. It has

well established management systems and procedures.

Periodic audit of these by accrediting agencies, gives

INTERNALCONTROLSYSTEMANDADEQUACY

TODAY, MSP HAS A DISTINGUISHED CUSTOMER BASE IN INDIA AND ABROAD.

ITS ABILITY TO BUILD LASTING RELATIONSHIPS WITH CUSTOMERS HAS RESULTED IN

SUSTAINED GROWTH OVER THE LAST FEW YEARS

www.maxspecialityproducts.com


MAX HEALTHSTAFF INTERNATIONAL LTD.

proceedings, are subject to limits as imposed by the US

government. In the recent past and even today, the

demand for EB-3 visas far exceeds the quota limit set by

the US government. This has also led to visa retrogression.

Due to the enforcement of visa retrogression, MHS has

considerably scaled down its operations till the time

further clarity on immigration laws emerge.

Accordingly, based on prudent accounting practices, the

management of Max India Ltd. has decided to provide for

diminution in the value of investments and loans given to

MHS in the financial statements.

OVERVIEW

In the healthcare business, Max India had also entered

the business of sourcing, training and placing healthcare

personnel in India and abroad with a specific focus on the

United States.

This was carried out through Max HealthStaff International

Limited (MHS), a100%subsidiaryofMax India.

The professionals sourced by MHS have to obtain an EB-3

category visa which allows healthcare professionals to

remain and work in the US. The numbers of such visas,

which are provided in the usual course of US immigration


CORPORATE SOCIAL RESPONSIBILITY: MAX INDIA FOUNDATION

The Foundation's main focus areas are:

Providing improved access to quality healthcare for

underprivileged sections of society, particularly

children.

Creating awareness on issues of concern such as

women's health, cancer, cardiovascular diseases and

immunisation of children.

Improving awareness of environmental issues with a

view to supporting a sustainable and eco-friendly

environment.

�

�

�

Max India Foundation (MIF) is the social service arm of

Max India Group. MIF spearheads the CSR initiatives of

the various Max India Group companies and also partners

with several reputable NGOs such as CanSupport, SOS

Children's Village, Manav Seva Sannidhi and Chinmaya

Mission.

Max New York Life, Max Healthcare and Max Speciality

Products are actively involved in various CSR activities

under its aegis. Max India Foundation has touched

around 27,000 lives across 100 locations through

2,300 volunteers and 90 NGO partners.

www.maxindiafoundation.org


�

�

�

�

MIF has

sponsored a Field Centre at East Delhi for its partner

NGO, CanSupport, a Delhi based NGO caring for

people with cancer, to provide palliative care to

patients and their families struggling with cancer. It

was inaugurated on 21 May 2008, and will have two

home-based palliative care teams. MIF is sponsoring

the entire cost of running this centre including

doctors' and nurses' salaries, transportation, and

medicines. 178 patients have received treatment

under this centre up to March 2009.

MIF

has contributed to the Global Cancer Control Mission

through sponsorship, support and participation in our

partner NGO CanSupport's “Walk for Life: Stride

against Breast Cancer” held on 15 February 2009 at

New Delhi. The walk was organised to raise awareness

on the increasing incidence of breast cancer.

MIF Health Centre at Rail Majra

village, near Rupnagar, Punjab provides free medical

consultation and medicines to the villagers. Since its

launch on 1 February 2008, over 10,000 patients have

been treated.

· MIF is also

providing extra coaching for Class 10 students of

Government High School at Rail Majra for

mathematics, science and english. It has also

undertaken initiatives such as free medical camps,

donated ceiling fans, sweaters, books and utensils for

the mid-day meal for children.

MIF,

in collaboration with its partner NGO, the Chinmaya

Mission, has set up a Health Care Unit in Sunlight

Colony. The community is charged a nominal amount

CanSupport's East Delhi Field Centre:

Walk for Life - Breast Cancer Awareness Event:

Health Centres:

Adoption of the Government School:

Health Care Unit, Sunlight Colony, New Delhi:

Given below are some of the initiatives undertaken by the

MIF in association with its partner NGOs in 2008-2009:

MIF is

conducting an immunisation programme for

underprivileged children in locations where Max New

York Life (MNYL) has offices, supported by their

volunteers. Around 100 children are immunised in

each location. The programme was started in July

2008, and every month new locations are being

added. Twenty locations were covered from July till

31 March 2009. In the months of April-May 2009, 24

new locations were added. The total numbers of

children immunised was more than 5,000.

MIF is

working to strengthen the existing association of Max

New York Life with SOS Children's Villages of India

(SOS). Since inception, MNYL has contributed over

Rs. 5 million to SOS. More recently, MIF supported a

fund raising programme organised by SOS through a

contribution of Rs. 500,000 to pay for a year's

expenses on stay, food and other amenities for 100

children of the SOS village. MIF is conducting

immunisation camps with SOS in their outreach

program venues.

Artificial Limbs and Polio Calipers Camp: MIF, in

collaboration with partner NGO, Manav Seva

Sannidhi, organised an Artificial Limbs and Polio

Calipers camp at Mohali during 3-9 December 2008.

The camp provided artificial limbs to 380 patients. A

distinctive feature of the camp was that the patients

came from Himachal, Punjab, and Haryana with their

attendants and stayed there till they were

comfortable with their new limbs — bonding together

as a family and giving each other encouragement.

Pan-India Immunisation Programme:

SOS Children's Villages of India (SOS):

�

�

�


for consultation, including medicines. Doctors with

experience in treating general patients,

gynaecological, ophthalmology and dental cases are

available for consultation. Costs incurred for running

the clinic are shared between the Chinmaya mission

and MIF. Camps are also conducted.

MIF facilitates

treatment and procedures including surgery for the

poor. In the last one year, MIF has sponsored about 60

such surgeries for the underprivileged including

paediatric surgeries.

Health workshops and camps are organised regularly to

reach out to the underprivileged and spread Health

Awareness:

A multi-specialty health camp was organised at

Colony No. 5, Slum Cluster, Sector 50, Chandigarh on

18-19 October 2008. Some 950 patients were

checked and given free medicines.

A free health check-up camp was organised on 8

March 09, by Max India Foundation and Max

Healthcare at Goshala Temple, Kishangarh in

association with the NGO Agragati. The camp had

facilities for cardio investigation such as ECG, blood

pressure, blood sugar and also eye examination. Some

200 patients were served.

For International Women's Day, Max India

Foundation through Max Healthcare conducted a

Workshop on Women's Health Issues for the Waste

Collectors Community in association with NGO

Vatavaran at Shahpur Jat. Dr. Poonam Kirtani of Max

Healthcare discussed various health issues. 30-35

patients were served.

A Breast Cancer Awareness Workshop was organised

Surgical treatment for the poor:�

�

�

�

�

at Max House on 25 March, 2009. Dr. Natasha Das

conducted the workshop discussing the method for

“Breast Self Examination' stressing on its importance

for early detection and treatment.

Dr. Sujeet Jha, Head, Endocrinology Department, Max

Healthcare, conducted an awareness talk on diabetes

and its management, 15 April 2009 at Max House.

MIF, through Max Speciality Products and Max

Healthcare, conducted an eye and dental check-up on

17-18 April 2009 at the Government Secondary

School, Rail Majra. Some 570 cases were checked: 12

cases were identified for cataract surgery which was

done free of cost for the patients; 30 cases were

identified for dental treatment; 43 pairs of spectacles

were given to the people who were identified for short

vision during the camp.

Max India Foundation with Max Healthcare

organised a general health camp on 29 April 2009 for

the underprivileged community and Waste collectors

of Shahpur Jat. Dr. Pratima Kiro conducted the camp.

A cleft lip and palate camp was organised on 3 May

2009 at the Chinmaya Ashram's Health Centre to

provide free surgeries to patients at Max Healthcare.

Dr. Sunil Chaudhary, Senior Consultant and Head,

Aesthetic and Reconstructive Plastic Surgery, Max

Heal thcare conducted the camp. Three

underprivileged children were identified for surgery

and operated on 14 May 2009 at Max Super-

Specialty Hospital.

MIF has partnered

with an NGO, 'Jamghat – a Group of Street Children', and

sponsored a health and day care centre in the Jama

Masjid Area. It was inaugurated on 23 May 2008. A

paediatrician from Max Healthcare is visiting the area

Jamghat Health and Day Care Centre:

�

�

�

�

www.maxindiafoundation.org


twice a month for health check-ups and providing

required medicines. This centre is a hub for rehabilitation

of these street children, and is used to impart vocational

training, life skills and provide them toilet and bathing

facilities.

MIF is committed to spread

awareness of environment friendly initiatives and

encourages sustainable practices of conservation of

energy, waste management, reduction in the use of

paper, electricity and water across all the Max India

Group entities.

The outlook for Max India has to do with those of its

different businesses. As mentioned earlier, most of the

businesses are in a development phase. The economic

environment is expected to gradually improve from the

lows seen in the second half of 2008-09. However,

growth will be lower than what has been witnessed in the

last five years. Even so, there will be opportunities to tap

markets.

In line with this view, the insurance business is expected

to grow but at a lower rate than what was seen between

2001 and 2007. The healthcare space is not affected by

Environmental Awareness:

OUTLOOK

business environment and growth here will be as per

Max India's efforts. The healthcare services businesses

will have some pressure on profitability due to costs

related to the starting of some new hospitals. The most

profitable business, Max Speciality Limited, will face

some pricing pressure with new capacities coming on

board in the industry. However, its product quality and

marquee customer base will help in growth.

Our outlook, therefore, for 2009-10 is cautiously

optimistic.

Statements in this management discussion and analysis

describing the company's objectives, projections, estimates

and expectations may be 'forward looking statements'

within the meaning of applicable laws and regulations.

Actual results may differ substantially or materially from

those expressed or implied. Important developments that

could affect the company's operations include a downward

trend in the Indian economy or the healthcare and

packaging industry, rise in input costs, exchange rate

fluctuations, and significant changes in political and

economic environment in India, environment standards,

tax laws, litigationand labour relations.

CAUTIONARY STATEMENT

MIF IS CONDUCTING AN

IMMUNISATION PROGRAMME

FOR UNDERPR IV I LEGED

CHILDREN IN WHICH IT

IMMUNISED MORE THAN

5,000 CHILDREN IN 2008-09


Table 2: Abridged Consolidated Financials, Max India Limited

MAX INDIA LIMITED: CONSOLIDATED FINANCIAL REVIEW

Max India Limited's abridged consolidated profit and loss statement is given in Table 2.

Rs. in crore

2008-09 2007-08

INCOME

TOTAL INCOME 4891.44 3610.55

EXPENDITURE

PBDIT (209.43) 70.59

(LOSS) BEFORE TAX

(LOSS) AFTER TAX

NET (LOSS)

Net Sales 401.61 321.85

Service Income 4106.07 2922.20

Income from Investment Activities 330.24 324.93

Other Income 53.52 41.57

Increase / (Decrease) in Inventory (0.19) 5.03

Manufacturing, Trading and Direct Expenses 3414.94 2690.77

Personnel Expenses 843.76 454.84

General and Administration Expenses 841.98 399.39

Financial Expenses 50.57 47.31

Depreciation 97.01 66.34

(357.01) (43.06)

Tax Expense (23.84) 16.72

(333.17) (59.78)

Funds for Future Appropriations - Participating Policies 26.41 (37.09)

Minority Interest 88.38 47.98

(218.39) (48.90)


Revenues were generated from the following sources:

Net sales increased by 24.8% from

Rs. 321.85 crore in 2007-08 to Rs. 401.61 crore in

2008-09

Service income grew by 40.5%

— from Rs. 2,922.20 crore in 2007-08 to

Rs. 4,106.07 crore in 2008-09

Income from investment activities remained

stable at Rs. 330.24 crore in 2008-09

Sales revenue was generated from the speciality

plastic products business and trading of consumables,

drugs and pharmaceuticals as a part of the healthcare

business.

Service income was primarily from premiums

recognised in the life insurance business, healthcare

services revenues, income from clinical trials and

placement revenues.

Income from investments activities was on account of

treasury surplus available with the group companies

and from the investment corpus of the life insurance

business.

Other income includes income from miscellaneous

�

�

�

�

sources including the sale of scrap in the speciality

plastic products business.

Max India Limited is in a growth phase, where value is

created through revenue expansion and enhanced

operating efficiencies. It has successfully grown revenues

through all income sources. Our Consolidated revenues

increased by 35.5% from Rs. 3,610.55 to

Rs. 4,891.44 crore in 2008-09.

There were costs incurred on the expansion plans of the

company, particularly in the insurance businesses, which

have resulted in negative operating profits (PBDIT).

Moreover, it is worth noting that for a group, which is

in an expansionary phase, Max India has a very low level

of financial leverage. Total debt as a ratio to net worth

has, in fact, further decreased from 0.36 in 2007-08 to

0.23 in 2008-09. In an environment of scarcity of capital,

this provides Max India opportunity to further leverage

and grow.

Other incomes increased

by 28.7% from Rs. 41.57 crore in 2007-08 to

Rs. 53.52 crore in 2008-09

in 2007-08

CORPORATE

GOVERNANCE REPORT

PHILOSOPHYOFCORPORATEGOVERNANCE

BOARD COMPOSITION

Compliance is one driver of Corporate Governance.

The Max India Group sees corporate governance as an

actual operating mechanism in driving its various

businesses as increasingly we move towards a Board

managed structure across the Group. Hence, the

addition of functional experts in our various Boards

and an enhanced interface between Management,

Sub-committees and the Boards. This almost

automatically achieves value driven leadership and

highest standards of accountability, transparency and

ethics across the Group.

Your Board of Directors currently comprises of eleven

members with an Executive Director and ten Non-

Executive Directors of which eight are independent.

Mr. Analjit Singh, Chairman & Managing Director of

the Company is a Promoter Director. Mr. Anuroop

(Tony) Singh has been appointed as the Vice Chairman

(Non-executive) of the Company to strengthen the

Governance and Strategic Planning process. No

Director is a member in more than ten committees, or

the Chairman of more than five committees, across all

public companies in which he is a Director.

The composition of directors and the attendance at

the Board meeting during the year 2008-09 and at the

last annual general meeting, including the details of

their directorships and committee memberships are

given herewith:



Director Board

meetings

attended of Board

Committees**

Attendance Directorships* Memberships/

at last AGM Chairmanships

Mr. Analjit Singh

Dr. S.S. Baijal

Mr. N.C. Singhal

Mr. Ashwani Windlass

Mr. Rajesh Khanna

Mr. N. Rangachary

Mr. Piyush Mankad

Mr. Anuroop (Tony) Singh

Mr. Leo Puri

Mr. S.K. Bijlani

Mr. Aman Mehta

Mr. Bharat Sahgal

Mr. B. Anantharaman

[Promoter Director]

[Non-Executive Independent Director] as Chairman)



[Non-Executive Director]

[Non-Executive Independent Director]


[Non-Executive Independent Director]

[Non-Executive Director](Appointed w.e.f. May 17, 2008)

06 — 02 01[Non-Executive Independent Director](Appointed w.e.f. October 22, 2008)

01 — 07

01 — 01 Nil[Non-Executive Independent Director](Resigned w.e.f. March 31, 2009)

01 — 01 01Jt. Managing Director(Resigned w.e.f. June 30, 2008)

08 14 Nil

06 — 06 6 (including 3

08 10 5 (including 4

09 — 01 2 (including 1

03 — 07 03

07 — 03 02

09 13 09 (including 1

05 — 05 Nil

05 — 03 02

7 (including 3[Non-Executive Independent Director] as Chairman)(Appointed w.e.f. December 12, 2008)

✔

✔

✔

* Excludes Directorships in Indian private limited companies, unlimited liability companies, companies incorporated under Section 25 of theCompanies Act, 1956, foreign companies, memberships of managing committees of various chambers/bodies and alternate Directorships.

** Represents Memberships/Chairmanships of Audit Committee & Shareholders/Investors Grievance Committee


Details of Board meetings held during the year ended

March 31, 2009:

May 17, 2008 11 07

July 11, 2008 10 05

July 18. 2008 10 08

August 28, 2008 10 09

October 22, 2008 11 08

November 7, 2008 11 09

November 28, 2008 11 04

December 12, 2008 12 04

January 28, 2009 12 10

February 3, 2009 12 06

The Company holds at least one Board meeting in a quarter

to review financial results and business performance. The

gap between two board meetings does not exceed four

calendar months. Apart from aforesaid four meetings,

additional board meetings are also convened, from time to

time. Some urgent matters are approved by the Board by

resolutionspassedbycirculation.

All the Agenda items are accompanied by comprehensive

notes on the related subject and in certain areas such as

business plans/business reviews and financial results,

detailed presentations are made to the Board members.

Additionally, the Board is free to recommend inclusion of

any matter for discussion in consultation with the

Chairman.

To enable the Board to discharge its responsibilities

Date Board No. of

Strength Directors

present

BOARD PROCEDURES

effectively, members of the Board are briefed at every

Board meeting, on the overall performance of the

Company and it’s subsidiaries/joint ventures. Senior

Management is often invited to attend the Board

meetings to provide detailed insight into the items being

discussed.

Max India has a Code of Conduct for the Directors and

Employees of the Company to guide them on:

Adherence to the highest standards of honesty,

integrity and avoidance of conflicts of interest.

Carrying out their duties in an honest, fair, diligent

and ethical manner, within the ambit of authority

conferred upon them and in accordance with

applicable laws.

Their responsibility to take decisions and implement

policies in the best interests of the Company and all

its stakeholders.

The Code of Conduct is prominently displayed on the

Company website.

This Committee currently comprises of Mr. N.C. Singhal

(Chairman), Dr. S.S. Baijal, Mr. N. Rangachary, Mr. Leo

Puri and Mr. Ashwani Windlass. All members of the

Committee, except Mr. Leo Puri, are Independent

Directors. The Company Secretary of the Company acts as

the Secretary of this Committee. This Committee inter

alia, recommends appointment of statutory auditors;

reviews Company’s financial reporting processes and

systems; reviews financial and risk management policies;

CODE OF CONDUCT FOR DIRECTORS & SENIOR

MANAGEMENT

COMMITTEES OF THE BOARD

�

�

�

AUDIT COMMITTEE


Company’s financial statements, including annual and

quarterly financial results; and financial accounting

practices & policies. The scope of the audit committee has

been defined by the Board of Directors in accordance with

Clause 49 of the Listing Agreement and Section 292A of the

Companies Act, 1956. The Internal Auditors and

representatives of Statutory Auditors are invited to the

meetings of the Committee, as required. Mr. N.C. Singhal,

the Chairman of the Audit Committee, was present at the

last Annual General Meeting. Mr. Leo Puri was inducted

into theCommitteeduring thecourseof theyear.

Mr. N. C. Singhal 06 06

Dr. S.S. Baijal 06 05

Mr. Ashwani Windlass 06 04

Mr. N. Rangachary 06 06

Mr. Leo Puri 04 04

Mr. Rajesh Khanna 02 -

This Committee currently comprises of Dr. S.S. Baijal

(Chairman), Mr. Analjit Singh, Mr. Ashwani Windlass,

Mr. Leo Puri and Mr. N.C. Singhal, out of which, Dr. S.S.

Baijal, Mr. Ashwani Windlass and Mr. N.C. Singhal are

Meetings & attendance during the year:

Director Number of Number of

meetings held meetings

attended

REMUNERATION COMMITTEE

Independent Directors. This Committee evaluates

compensations and benefits for Executive Directors

and administers the ESOP Scheme of the Company. The

remuneration policy of the Company is aimed at

attracting and retaining the best talent to leverage

performance in a significant manner. The strategy takes

into account, the remuneration trends, talent market

and competitive requirements.


Mr. Analjit Singh 03 01


Mr. Leo Puri 02 02

Mr. N.C. Singhal 03 03

Mr. Rajesh Khanna 01 01

The Company has not paid any remuneration to its

Non-Executive Directors, except for the Sitting Fees

for attending meetings of the Board/Committees @

Rs. 15,000/- per meeting. Details of the remuneration

paid to the Executive Directors of the Company for the

year ended March 31, 2009 are as under:




attended

REMUNERATION PAID TO DIRECTORS DURING

2008-2009


(Amount in Rs.)

Salary 2,86,42,000 56,25,510

House Rent Allowance/ Housing — 7,50,000

Benefits (Perquisites) 16,66,331 1,70,659**

Bonuses/Performance Incentives 1,50,00,000 1,29,37,397

Retirals 29,16,000 4,86,000

Service contract — —

Notice period 3 months 3 months

Stock options, if any (in numbers) — 2,80,175*

* 2,80,175 Stock Options were vested and 2,80,175 equity shares of Rs. 2/- each were allotted on May 5, 2008.

** This does not include loss on sale of assets amounting to Rs. 28.79 lakhs arising out of final settlement.

Description Mr. Analjit Singh Mr. B. Anantharaman

(from April 1, 2008 to (from April 1, 2008 to

March 31, 2009) June 30, 2008)

Details of equity shares of Rs. 2/- each held by Directors

of the Company as on March 31, 2009 are: (a) Mr. Analjit

Singh 41,68,192 shares, (b) Dr. S.S. Baijal – 25,000 shares,

(c) Mr. N.C. Singhal – 20,000 Shares, and (d) Mr. Ashwani

Windlass – 1,23,800 shares.

This Committee was reconstituted during the year under

review. Currently, this Committee comprises of Mr.

Ashwani Windlass (Chairman), Mr. Piyush Mankad and

Dr. S.S. Baijal. It approves the transfer and transmission

of securities; issuance of duplicate certificates, redressal

of investors’ grievances. It also suggests and monitors

measures to improve investor relations.

SHAREHOLDERS/INVESTORS GRIEVANCE COMMITTEE



Mr. Piyush Mankad 07 07


Mr. B. Anantharaman 02 01

Besides, the Company Secretary has been authorized to

effect transfer of shares upto 500 per folio. Mr. V.

Krishnan, Company Secretary is the Compliance Officer

for the Company. The Company has normally attended to

the Shareholders/Investors complaints within a period of



attended


The following special resolutions were passed by the shareholders in the previous three AGMs:

September 15, 2006 Payment of managerial remuneration to Mr. Analjit Singh, Executive Chairman for a three-

year period from April 1, 2006.

Payment of managerial remuneration to Mr. B. Anantharaman, Jt. Managing Director for a

three-year period from April 1, 2006.

Amendment of Articles of Association of the Company.

September 14, 2007 Approval for making further investment of Rs. 1000 crore in Max New York Life Insurance

Company Limited, a Subsidiary of the Company.

September 16, 2008 Approval for making investment upto an amount of Rs. 100 crore in the equity share

capital of a joint venture company for Health Insurance business in collaboration with

Bupa Finance Plc., UK.

Date of AGM Subject matter of the resolution

�

�

�

�

�

(B) COMPLIANCE BY THE COMPANY

The Company has complied with the requirements of

the stock exchanges, SEBI and other statutory

authorities on all matters relating to capital markets

during the last three years. No penalties or strictures

have been imposed on the Company by the stock

exchanges, SEBI, or any other statutory authorities

on any matter relating to capital markets during the

last three years.

The Annual General Meetings (AGMs) of the Company is

held at the Registered Office of the Company. The last

three AGMs were held as under:

September 15, 2006 10.30 AM



GENERAL BODY MEETINGS

Date Time

7 working days except in cases which were under legal

proceedings/disputes. The Company received 60

complaints from the shareholders during the financial

year ended March 31, 2009 and the Company has

attended to all the complaints received.

This Committee approves opening and operation of bank

accounts and reviews its mandate, from time to time. This

Committee was reconstituted during the year under

review. Currently, the Committee comprises of Mr.

Analjit Singh, Mr. Piyush Mankad and Dr. S.S. Baijal. This

Committee met once during the year under review.

The Company has not entered into any transaction of

a material nature with the promoters, Directors or

the management, their subsidiaries or relatives, etc.,

that may have any potential conflict with the

interest of the Company.

BANKING OPERATIONS COMMITTEE

(A) RELATED PARTY TRANSACTIONS

DISCLOSURES


POSTAL BALLOT

MEANS OF COMMUNICATION

GENERAL SHAREHOLDER INFORMATION

MANAGEMENT DISCUSSION & ANALYSIS

During the year under review, no resolution was passed

through postal ballot. The Company proposes to pass

special resolutions through postal ballot for (i) providing

guarantees up to an amount of Rs. 500 crore on behalf of

Max Healthcare Institute Limited and (ii) give loan

to/make investment upto an amount of Rs. 150 crore in

Max Healthcare Institute Limited, a subsidiary of the

Company. The result of the said postal ballot resolutions

will be declared at the ensuing Annual General Meeting.

The Postal Ballot is carried out, whenever required,

following the procedure set out in section 192A of the

Companies Act, 1956 read with the Companies (The

Passing of the Resolutions by Postal Ballot) Rules, 2001.

Timely disclosure of reliable information and corporate

financial performance is at the core of good Corporate

Governance. Towards this direction, the quarterly/annual

results of the Company were announced within the

prescribed period and published in The Economic

Times/Business Standard/Desh Sewak among others. The

results can also be accessed on the Company’s website

www.maxindia.com. The official news releases and the

presentations made to the investors/analysts are also

displayed on the Company’s website. The results are not

sent individually to the shareholders. The Company made

presentations to financial analysts and institutional

investors after the quarterly/annual financial results

were approved by the Board.

A section on the ‘Shareholders' Information’ is annexed,

and forms part of this Annual Report.

A section on the ‘Management Discussion & Analysis’ is

annexed, and forms part of this Annual Report.

COMPLIANCECERTIFICATEOF THEAUDITORS

NON-MANDATORY REQUIREMENTS

DECLARATION BY THE CMD ON CODE OF

CONDUCTASREQUIREDBYCLAUSE49 I (D) (II)

The statutory auditors of the Company have certified that

the Company has complied with the conditions of

Corporate Governance as stipulated in Clause 49 of the

Listing Agreement with Stock Exchanges and the same is

annexed to the Report.

Details of non-mandatory requirements of clause 49 to

the extent to which the Company has adopted are given

below:

The Company has set up a Remuneration Committee,

with an independent director as is Chairman, to

determine on their behalf and on behalf of the

shareholders with agreed terms of reference, the

Company’s policy on specific remuneration packages for

Executive Directors including pension rights and any

compensation payment. There is no audit qualification

in respect of financial statements of the Company. All

Board members are experts in their respective fields.

They are well aware of the business model of the

Company as well as the risk profile of the Company.

Remaining non-mandatory requirements of clause 49 are

expected to be addressed in due course.

This is to declare that the Company has received

affirmations of compliance with the provisions of

Company’s Code of Conduct for the financial year ended

March 31, 2009 from all Directors and Senior

Management personnel of the Company.

For

New Delhi Analjit SinghJuly 30, 2009 Chairman & Managing Director

Max India Limited


We, Analjit Singh, Chairman & Managing Director and

Sujatha Ratnam, Chief Financial Controller of Max India

Limited certify to the Board in terms of the requirement

of Clause 49(V) of the listing agreement, that we have

reviewed the financial statement and the cash flow

statement of the Company for the financial year ended

March 31, 2009.

1. To the best of our knowledge, we certify that:

(a) these statements do not contain any materially

untrue statement or omit any material fact or

contain statements that are misleading;

(b) these statements together present a true and

fair view of the Company’s affairs and are in

compliance with existing accounting

standards, applicable laws and regulations; and

(c) there are no transactions entered into by the

Company during the year which are fraudulent,

illegal or violative of the Company’s Code of

Conduct.

2. For the purposes of financial reporting, we accept

the responsibility for establishing and maintaining

internal controls and that we have evaluated the

effectiveness of the internal control systems of the

Company pertaining to financial reporting and we

have disclosed to the Auditors and the Audit

Committee, deficiencies in the design or operation

of internal controls (if any), and further state that

the internal control systems are adequate and

commensurate with the size of business.

3. We do further certify that there has been:

(a) no significant changes in internal controls

during the year

(b) no significant changes in accounting policies

during the year and

(c) no instances of fraud, of which we are aware

during the period.

Chairman & Chief Financial Controller

Managing Director

Analjit Singh Sujatha Ratnam

CERTIFICATION BY CHAIRMAN & MANAGING DIRECTOR AND CHIEF FINANCIAL CONTROLLER

July 30, 2009

The Board of Directors

Max India Limited

Bhai Mohan Singh Nagar,

Railmajra,

Tehsil Balachaur,

Dist. Nawanshahr

Punjab – 144 533


AUDITORS' CERTIFICATE REGARDING COMPLIANCE OF CONDITIONS OF CORPORATE

GOVERNANCE

To the Members of Max India Limited

We have examined the compliance of conditions of

Corporate Governance by Max India Limited, for the year

ended March 31, 2009, as stipulated in Clause 49 of the

Listing Agreements of the said Company with stock

exchanges in India.

The compliance of conditions of Corporate Governance is

the responsibility of the Company's management. Our

examination was carried out in accordance with the

Guidance Note on Certification of Corporate Governance

(as stipulated in Clause 49 of the Listing Agreement),

issued by the Institute of Chartered Accountants of India

and was limited to procedures and implementation

thereof, adopted by the Company for ensuring the

compliance of the conditions of Corporate Governance. It

is neither an audit nor an expression of opinion on the

financial statements of the Company.

In our opinion and to the best of our information and

according to the explanations given to us, We certify that

the Company has complied with the conditions of

Corporate Governance as stipulated in the above

mentioned Listing Agreements.

We state that such compliance is neither an assurance as

to the future viability of the Company nor the efficiency

or effectiveness with which the management has

conducted the affairs of the Company.

V. NIJHAWAN

Partner

Membership No: F 87228

For and on behalf of

Gurgaon Price Waterhouse

July 30, 2009 Chartered Accountants


SHAREHOLDERS’ INFORMATION

REGISTERED OFFICE AND PLANT LOCATION

INVESTOR HELPLINE

SHARE TRANSFER AGENT

ANNUAL GENERAL MEETING

Bhai Mohan Singh Nagar, Railmajra, Tehsil Balachaur,

District Nawanshahr, Punjab- 144533.

Max House, 1, Dr. Jha Marg, Okhla, Phase III,

New Delhi–110 020

Tel: 011-42598000, Fax: 011-26324126

E-mail: [email protected]

Mas Services Limited

T-34, 2nd Floor, Okhla Industrial Area,

Phase II, New Delhi–110 020

Tel: 011-26387281 / 82 / 83

Fax: 011-26387384

e-mail: [email protected]

Date and Time : Wednesday, September 23, 2009

at 10.30 a.m.

Venue : Registered Office of the Company

BOOK CLOSURE

FINANCIAL CALENDAR - 2009-10

LISTING ON STOCK EXCHANGES

CONNECTIVITY WITH DEPOSITORIES

Wednesday, September 16, 2009 to

Wednesday, September 23, 2009

(both days inclusive)

1. First quarter results - July 2009

2. Second quarter & half yearly results - October 2009

3. Third quarter results - January 2010

4. Annual results - June 2010

The Equity Shares of the Company are listed on the

Bombay Stock Exchange Limited ('BSE') and the National

Stock Exchange of India Limited ('NSE'). The Company has

received in-principle approval for delisting its shares

from The Calcutta Stock Exchange. The Company

confirms that it has paid annual listing fees due to BSE

and NSE for the year 2009-10.

The Company's shares are in dematerialized mode

through National Securities Depository Limited (NSDL)

and Central Depository Services (India) Limited (CDSL).


STOCK CODE

Monthly high and low quotation on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India

Limited (NSE)

Bombay Stock Exchange Limited - 500271

National Stock Exchange of India Limited - MAX

Demat ISIN No. for NSDL and CDSL - INE180A01020

Bombay Stock Exchange MAXI.BO MAX:IN

National Stock Exchange MAXI.NS NMAX:IN

April, 08 180.90 138.20 181.90 140.50

May, 08 179.00 148.80 178.90 148.15

June,08 188.00 147.50 187.50 147.60

July, 08 204.40 140.00 206.50 143.00

August, 08 232.00 186.20 232.90 192.55

September, 08 219.00 155.05 218.60 154.00

October, 08 185.00 81.00 184.70 80.00

November, 08 140.60 91.15 141.00 90.50

December, 08 128.40 90.10 128.80 90.30

January, 09 127.90 100.50 124.75 100.05

February, 09 128.00 101.00 127.90 101.25

March, 09 109.00 96.00 108.00 97.00

Reuters Bloomberg

Month BSE NSE

High (Rs.) Low(Rs.) High (Rs.) Low(Rs.)


250.00

200.00

150.00

100.00

50.00

0.00

Sept

embe

r,08

Novem

ber,

08Dec

embe

r,08

Febr

uary

, 09

April,

08M

ay, 0

8Ju

ne, 0

8Ju

ly,08

Augus

t,08

Octob

er, 0

8

Janu

ary,

09

Mar

ch, 0

9

20000.00

18000.00

16000.00

14000.00

12000.00

10000.00

8000.00

6000.00

4000.00

2000.00

0.00

Price

Sensex

Shareholding Pattern as on March 31, 2009

Promoters 77354820 34.84

Mutual Funds and UTI 5387658 2.43

Banks, Financial Institutions 19015 0.009

Insurance Companies 45750 0.021

Foreign Institutional Investors 82547353 37.18

Foreign Direct Investment 29823320 13.43

Bodies Corporate 2470670 1.11

Non-resident Indians/ Overseas Corporate Bodies 7080025 3.19

Clearing Members 223771 0.10

Resident Individuals 17077928 7.69

Total 222030310 100.00

Category No. of shares held % of shareholding

Share Price Vs. Sensex**


Distribution of shareholding as on March 31, 2009

27038 97.05 01 – 500 9455513 4.26

422 1.52 501 – 1000 1554108 0.70

167 0.60 1001 – 2000 1206560 0.54

40 0.14 2001 – 3000 484571 0.22

25 0.09 3001 – 4000 439942 0.20

25 0.09 4001 – 5000 577659 0.26

34 0.12 5001 – 10000 1213299 0.55

110 0.39 10001 - above 207098658 93.27

27861 100.00 Total 222030310 100.00

No. of Percentage Shareholdings No. of shares Percentage

Shareholders to total to total

DEMATERIALISATION STATUS AS ON

MARCH 31, 2009

SECRETARIAL AUDIT REPORT

(i) Shareholding in dematerialized mode 98.38%

(ii) Shareholding in physical mode 1.62%

As stipulated by the Securities and Exchange Board of

India, a qualified practicing Company Secretary carries

out the Secretarial Audit, on a quarterly basis, to

reconcile the total admitted capital with National

Securities Depository Limited (NSDL) and Central

Depository Services (India) Limited (CDSL) with the total

listed and paid-up capital. The audit, inter alia, confirms

that the total listed and paid up capital of the Company is

in agreement with the aggregate of the total number of

shares in dematerialized form and total number of shares

in physical form.

FOR SHAREHOLDERS HOLDING SHARES IN

DEMATERIALISED MODE

SHARE TRANSFER SYSTEM

Shareholders holding shares in dematerialised mode are

requested to intimate all changes with respect to bank

details, mandate, nomination, power of attorney, change

of address, change of name etc. to their depository

participant (DP). These changes will be reflected in the

Company’s records on the down loading of information

from Depositories, which will help the Company provide

better service to its shareholders.

In respect of shares upto 500 per folio, transfers are

effected on a weekly basis. For others, the transfers are

effected within limits prescribed by law. The average

turnaround time for processing registration of transfers

is 9 days from the date of receipt of requests.


The processing activities with respect to requests

received for dematerialization are completed within 8 -

10 days.

Under Section 205C of the Companies Act, 1956 the

amount of dividend remaining unclaimed for a period of

seven years from the date of payment have been

transferred to the Investor EducationandProtectionFund.

The unaudited quarterly financial results and the audited

annual accounts are normally published in Economic

UNCLAIMED/UNPAID DIVIDEND

COMMUNICATION OF FINANCIAL RESULTS

Times/Business Standard/Desh Sewak. The financial

results are also available on the Company’s website-

www.maxindia.com

Please visit us at www.maxindia.com for financial and

other information about your Company.

For Max India Limited

New Delhi Analjit Singh

July 30, 2009 Chairman & Managing Director


COMPANY INFORMATION

BOARD OF DIRECTORS

COMPANY SECRETARY

MAJOR INTERNATIONAL AFFILIATES

AUDITORS

Mr. Analjit Singh - Chairman &

Managing Director


Mr. Aman Mehta

Mr. Ashwani Windlass

Mr. Leo Puri

Mr. N.C. Singhal

Mr. N. Rangachary

Mr. Piyush Mankad

Mr. Rajesh Khanna

Mr. S.K. Bijlani

Dr. S.S. Baijal

Mr. V. Krishnan

New York Life International Inc., USA

Bupa Finance Plc., UK

Price Waterhouse, Chartered Accountants

BANKERS

CORPORATE OFFICE

SHARE TRANSFER AGENT

WEBSITE

Citibank N.A.

Yes Bank Ltd

Kotak Mahindra Bank Ltd

Punjab National Bank

Oriental Bank of Commerce

Max House, Okhla, New Delhi - 110 020.

Mas Services Limited

T-34, 2nd Floor,

Okhla Industrial Area Phase II

New Delhi – 110 020

Tel: 011-26387281 - 83, Fax: 011-26387384

E-mail: [email protected]

www.maxindia.com

MAX INDIA LIMITED

MAX INDIA LIMITEDMAX INDIA LIMITED

MAX INDIA LIMITED

Max India Limited � ANNUAL REPORT 2008-09 77

Your Directors have pleasure in presenting the twenty-first Annual

Report of your Company, with the audited Statement of Accounts,

for the financial year ended March 31, 2009.

FINANCIAL RESULTS

The highlights of the consolidated financial results of your Company

and its subsidiaries are as under:

(Rs. crore)

Year ended Year ended

March March

31,2009 31,2008

Income

Net Sales 401.6 321.9

Service Income 4106.1 2922.2

Income from investment activities 330.2 324.9

Other Income 53.5 41.6

4891.4 3610.6

Expenses

Manufacturing, Trading and Direct 3415.1 2685.8

Expenses

Personnel Expenses 843.8 454.8

General and Administration Expenses 841.9 399.4

Financial Expenses 50.6 47.3

Depreciation 97.0 66.4

5248.4 3653.7

(Loss) Before Tax (357.0) (43.1)


(Loss) After Tax (333.2) (59.8)

Funds for Future Appropriations 26.4 (37.1)

- Participating Policies

Minority Interest 88.4 48.0

Net (Loss) (218.4) (48.9)

CONSOLIDATED BUSINESS RESULTS:

The year 2008-09 proved to be another year of high growth for

your Company and its subsidiaries. During financial year 2008-09,

the consolidated Group revenue was Rs. 4,891.4 crore representing

a growth of 35% over the previous year. Net loss for 2008-09 stood

at Rs. 333.2 crore against Rs. 59.8 crore in the previous year. The

increase in losses was on account of significant expansion

undertaken in the Life Insurance business. Subsidiaries of your

Company continued to post strong business performance for the

year under review. A brief update on the business achievements of

your Company’s key operating subsidiaries is as below:

(i) Max New York Life Insurance Company Limited:

Financial Year 2008-09 was a year of continued growth for

Max New York Life Insurance Company Limited (MNYL). During

the year under review, gross premium income stood at Rs.3,857

crore, recording a growth of 42% over the previous financial

year. First year premium income grew by 15% to Rs. 1,843

crore. With 80% increase over the previous year, renewal

premium stood at Rs.2,014 crore. MNYL sold over 12.1 lacs

policies in 2008-09 compared to 8.7 lacs policies in the

previous year. This achieved a cumulative sum assured of

Rs. 94,000 crore.

MNYL expanded its distribution capabilities by enhancing its

Agency strength, adding Corporate Agents & Broking House

tie-ups and consolidating its existing Bancassurance channel.

During the financial year, the number of agent advisors

increased by 129% over last year’s 84,600. Agency sales

recorded a growth of 34%, touching Rs. 1,355 crore during

the year as compared to Rs. 1,012 crore in the last financial

year. Contribution of agency distribution to total sales was

65%, indicating success of MNYL’s multi-channel distribution

strategy. During the calendar year 2008, 213 agent advisors

joined the Million Dollar Round Table club (MDRT). Further, by

adding 511 new offices during the financial year, MNYL now

has a network of 705 offices as on March 31, 2009.

During 2008-09, MNYL launched two new products — Smart

Assure and Unit Builder, both ULIP products aimed at protection

and long-term wealth creation. MNYL also launched Max Vijay

— a product designed to meet the insurance needs of the rural

and semi-urban markets.

(ii) Max Healthcare:

Max Healthcare (MHC) provides comprehensive, integrated and

world-class healthcare services with state-of-the-art

infrastructure designed in accordance with international

norms. MHC operates six super-speciality and multi-speciality

hospitals and two speciality medical centres located in New

Delhi and the surrounding NCR region.

Fiscal 2008-09 was a landmark year for MHC in terms of

financial performance. For the first time in its short history,

MHC turned cash positive. Revenue from all hospitals in the

MHC network grew by nearly 13% to Rs 423 crore in 2008-

09. During the year ended March 31, 2009, MHC’s network of

hospitals performed over 450 open heart surgeries, 2,000

angioplasties and 4,130 angiographies. In addition, MHC’s

hospital network performed over 2,150 ortho-surgeries, 870

Directors’ Report

1 Standalone.p65 8/8/2009, 3:03 PM77

MAX INDIA LIMITED


neuro-surgeries and 15,400 other surgeries and procedures.

Average number of operational beds at MHC increased from

approximately 660 in 2007-08 to 720 in 2008-09. MHC

managed 20 operation theatres and 230 critical care beds

across a completely integrated network. Average occupancy

rate at MHC hospitals was approximately 65%. Number of

patient episodes (measured by number of invoices issued to

patients during any period) increased from 1.6 million in 2007-

08 to around 1.9 million in 2008-09. In the last quarter of

2008-09, MHC averaged around 165,000 patient episodes per

month.

As on March 31, 2009, MHC had manpower strength of around

1,200 physicians, including several doctors of international

repute; 1,600 nurses; 350 paramedic staff; and 1,120 other

support staff.

(iii) Max Neeman Medical International Limited:

Max Neeman Medical International Limited (MNMI) is a value

added contract research organization (CRO) providing a broad

range of clinical research services to global pharmaceutical,

device and biotechnology companies.

MNMI also collaborates with other CROs in providing a variety

of clinical services. MNMI provides clinical research services

in the space of phase II, III, & IV studies and has access to over

850 ICH GCP trained investigators. The team of over 120 clinical

research coordinators/clinical research associates in 22 cities

across India gives it access to patients and investigator sites

in various therapeutic areas. Since commencement of its Indian

operations, over 5,800 subjects have been enrolled at over

200 sites. An Impressive Operating Standard enabled MNMI

to provide services to 21 clients over 55 contracts during fiscal

2008-09. MNMI’s automated workflow process using the SAS

CDMS (PheedIT) software system ensures efficient and accurate

data management.

In fiscal 2008-09, MNMI registered revenues of Rs 15.0 crore

representing a growth of 36% over the previous year. MNMI

generated a profit of Rs. 1.2 crore in 2008-09, a growth of

67% over the previous year, putting the operations in positive

and profitable territory. Its order book increased from Rs. 34

crore in 2007-08 to Rs. 40 crore in 2008-09. It added 5 new

clients during the year, taking its total client base to 48.

(iv) Max HealthStaff International Limited:

Max HealthStaff International (MHS) is a healthcare staffing

and training Company. Its focus is on providing trained Indian

professionals for healthcare institutions in India and abroad

with a specific focus on the United States.

The professionals sourced by MHS have to obtain an EB-3

category visa which allows healthcare professionals to remain

and work in the US. The number of such visas, which are

provided in the usual course of US immigration proceedings,

is subject to limits as imposed by the US government. In the

recent past and even today, the demand for EB-3 visas far

exceeds the quota limit set by the US government. This has

also led to visa retrogression. Due to the enforcement of visa

retrogression, MHS has considerably scaled down its operations

till the time further clarity on immigration laws emerges.

The highlights of the stand-alone financial results of your

Company are as under:

(Rs. crore)


March March

31,2009 31,2008

Income

Gross Sales 393.5 323.0

Less: Sales returns (3.7) (4.0)

Excise duty (36.0) (34.7)

Net Sales 353.8 284.3

Service and other income 66.2 91.1

420.0 375.4

Expenditure

Manufacturing and other expenses 358.6 284.1

Financial expenses 16.3 14.6

Depreciation and amortization 12.1 11.4

387.0 310.1

Profit from operations 33.0 65.3

Diminution in value of investment

and doubtful advances to subsidiary 22.6 -

Profit Before Tax 10.4 65.3


Profit After Tax 21.8 61.9

RESULTS OF STAND-ALONE OPERATIONS:

Fiscal 2008-09 was a year of consolidation for Max Speciality

Products (MSP), the Speciality Packaging Manufacturing division

of Max India Limited. All BOPP production lines at MSP operated at

100% capacity utilization. During the year, sales volume of BOPP

Films improved to 28 KTA compared to 24 KTA in 2008-09. In the

same period, sales volume of thermal films grew by 28% over the

Directors’ Report

1 Standalone.p65 8/6/2009, 6:37 PM78

MAX INDIA LIMITED


previous year, in line with MSP’s focus on high contribution and

high value-addition products. On an overall basis, net sales recorded

a strong 24% year-on-year growth at Rs. 354 crore in 2008-09

against Rs. 284 crore for 2007-08.

Raw material prices which had an uptrend in the first half year

started coming down in the second half of the year due to high

volatility in global crude prices. Further, the competitive landscape

became stiffer with enhanced production capacity in the domestic

market, raising domestic supply to 235 KTA as of March 2009

relative to 198 KTA in the previous year.

Your Company made a profit after tax of Rs.21.8 crore in the current

year as compared to Rs. 61.9 crore in the previous year. The reduction

in profit was mainly on account of lower investment income

resulting from deployment of treasury funds to support our

businesses and diminution in the value of investment in loans to in

Max HealthStaff International Limited, a subsidiary of your

Company, which is provided for in the accounts.

DIVIDEND

Your directors do not recommend any dividend in view of their

decision to deploy internal accruals towards the growth of the

Company’s Life Insurance, Healthcare and Health Insurance

businesses.

MAX BUPA JOINT VENTURE

During the year under review, your Company entered into a joint

venture with Bupa Finance Plc, UK for its foray into the health

insurance business. The joint venture Company, viz., Max Bupa

Health Insurance Company Limited (Max Bupa) will be a 74:26

joint venture between the Company and Bupa Finance Plc, UK. Max

Bupa is in the process of obtaining requisite approvals from the

Insurance Regulatory and Development Authority (IRDA).

FUND RAISING PROGRAMMES OF THE COMPANY

Allotment of Equity Shares to International Finance Corporation,

USA, on Preferential basis

The Company allotted 10,326,311 equity shares of Rs. 2/- each

representing 4.44% of the present paid up equity share capital of

the Company on June 19, 2009, at a premium of Rs.143.26 per

equity share aggregating to Rs.150 crore to International Finance

Corporation, Washington, USA, on preferential basis.

Proposed issuance of equity shares to Qualified Institutional Investors

Your Company proposes to issue securities up to an amount of

Rs. 450 crores to Qualified Institutional Buyers (QIBs) under the

Qualified Institutional Placement (QIP) mechanism stipulated by

the Securities and Exchange Board of India (SEBI) vide Chapter

XIII-A of the SEBI (Disclosure and Investor Protection) Guidelines,

2000.

RESCINDMENT OF RIGHTS ISSUE

The Board rescinded its earlier decision taken on February 3, 2009

for issuance of equity shares up to an amount of Rs. 650 crores, on

Rights basis with detachable warrants. This decision has since been

changed in favour of the decision for private placement of shares

with QIBs.

ADDITIONAL BUSINESS INVESTMENTS

The Company made a further investment of Rs.555 crore in Max

New York Life Insurance Company Ltd. during the year under review,

taking the total equity contribution in MNYL to Rs.1,313.50 crore

as of March 31, 2009.

FIXED DEPOSITS

There are no overdue deposits as at the end of the financial year

under review. Your Company has not accepted/renewed any deposit

up to the date of this Report.

EMPLOYEE STOCK OPTION PLANS

(i) Your Company had instituted an ‘Employee Stock Plan 2003’

(‘2003 Plan’), which was approved by the Board of Directors

in August 2003 and by the shareholders in September 2003.

The 2003 Plan provides for grant of stock options

aggregating not more than 5% of number of issued equity

shares of the Company to eligible employees and directors

of the Company. The 2003 Plan is administered by the

Remuneration Committee appointed by the Board of

Directors. During the year under review, 2,87,765 Options

were vested and upon exercise, 2,87,765 equity shares of

Rs. 2/- each for cash at par were allotted. Your Company

also granted 66,320 Options to certain employees during

the year under review.

(ii) The particulars of options granted, as on the date of this report,

under the aforesaid stock option plan as required under SEBI

(Employee Stock Option Scheme and Employee Stock Purchase

Scheme) Guidelines, 1999 are given below:

Directors’ Report

1 Standalone.p65 8/8/2009, 3:03 PM79

MAX INDIA LIMITED


Sl. No. Description 2003 Plan

(a) Total number of options granted till 14,61,250

March 31, 2009

(b) The pricing formula Rs. 2/-

per share

(c) Number of options vested till 10,94,925

March 31, 2009

(d) Number of options exercised till 10,94,925

March 31, 2009

(e) Total number of shares arising from 10,94,925

exercise of options

(f) Number of options lapsed/forfeited till 3,00,005

March 31, 2009

(g) Variation in terms of options —

(k) Money realized by exercise of options (Rs. crore) 0.22

(l) Total number of options in force as on date 66,320

(m) Number of options granted to senior

management including directors in FY 2008-09 66,320

(n) Employees holding 5% or more of the total

number of options granted during the year None

(o) Employees granted options equal to or

exceeding 1% or more of the issued capital

during the year None

The diluted earning per share was Rs. 0.98 for the financial year

ended March 31, 2009. The diluted earnings per share for the

previous year was Rs. 2.90.

(iii) In respect of stock options granted till March 31, 2009 under

the 2003 Plan, the Company has calculated employee

compensation cost using intrinsic value of the stock options.

Accordingly, an amount of Rs. 14.6 crore has been recognized

as total compensation charge for grants made in October 2003,

March 2005, December 2005, June 2006, November 2008 and

January 2009 out of which, in the current financial year,

Rs. 0.59 crore has been taken to the Profit and Loss account

as expense. The additional details required to be disclosed in

accordance with SEBI (Employee Stock Option Scheme and

Employee Stock Purchase Scheme) Guidelines, 1999 relating

to the 2003 Plan are given below:

a) The employee compensation cost based on fair value of

stock options granted in October 2003, March 2005,

December 2005, June 2006, November 2008 and January

2009 under the 2003 Plan is Rs. 14.6 crore, out of which,

in the current financial year, Rs. 0.59 crore would have

been recognized as compensation cost if the Company

had used fair value basis instead of adopting intrinsic

value basis of accounting for these stock options.

b) On fair value basis of recognizing the employee

compensation cost, profit after tax for the current

financial year would have been Rs. 21.84 crore instead of

Rs. 21.83 crore reported in the Profit and Loss account.

c) Basic and diluted earnings per share would have remained

unchanged at Rs. 0.98, had the Company adopted fair

value basis of recognizing the employee compensation

cost due to insignificant amount of difference in the

recognized expense and fair value of the ESOP expense.

d) The exercise price of the stock options on the grant date

is Rs. 2/- per existing equity share of Rs. 2/- each and the

fair value of each option works out to Rs. 106.58 for

December 2005 and Rs. 158.98 for June 2006 grant.

e) The computation of fair value of stock options granted

under the 2003 Plan has been done using Black Scholes

Option Pricing Model. The following assumptions have

been used in applying this options pricing model:

i) Risk free interest rate of 6.48% for November 2008

grant, and 3.90% for January 2009 grant,

ii) Expected life of 3 years of these stock options for

November 2008 grant, and 1 year for January 2009

grant,

iii) Expected volatility of 51.60% for 3 year options and

64.86% for 1 year options based on historical

volatility of the Company’s share,

iv) No dividend expectation based on current year’s dividend

recommendation, and

v) Price of Rs. 113.20 for November 2008 grant and Rs. 107.30

for January 2009 grant being the latest available closing price

of the Company’s share on the National Stock Exchange prior

to the date of grant.

ADDITIONAL INFORMATION

Information in accordance with the provisions of Section 217(1)(e)

of the Companies Act, 1956, read with the Companies (Disclosures

of Particulars in the Report of Board of Directors) Rules, 1988 are

given in the prescribed format annexed to this Report as

Annexure –A.

Directors’ Report

1 Standalone.p65 8/8/2009, 3:03 PM80

MAX INDIA LIMITED


PARTICULARS OF EMPLOYEES

A statement giving particulars of employees under Section 217(2A)

of the Companies Act, 1956 read with the Companies (Particulars

of Employees) Rules, 1975 for the financial year ended March 31,

2009 is annexed to this Report as Annexure-B.

SUBSIDIARY COMPANIES

Statement pursuant to Section 212 of the Companies Act, 1956,

relating to the subsidiaries of your Company, is annexed to this

Report.

Your Company has been exempted by the Central Government vide

their letter No. 47/364/2009-CL-III dated May 14, 2009 under

Section 212 (8) of the Companies Act, 1956 from attaching a copy

of the Balance Sheet, Profit & Loss Account, Report of the Board of

Directors and the Report of the Auditors of the subsidiary companies.

However, pursuant to Accounting Standard 21 issued by the

Institute of Chartered Accountants of India, Consolidated Financial

Statements presented by the Company include the financial

information of the subsidiaries.

Your Company will make available these documents/details upon

request by any member of the Company and its subsidiaries

interested in obtaining the same. The annual accounts of the

subsidiary companies will also be kept open for inspection by a

member at the respective registered offices of the Company and

its subsidiary companies.

AUDITORS

Price Waterhouse, Statutory Auditors of your Company, retire and

offer themselves for re-appointment. Your Company has received

from them a certificate required under Section 224(1-B) of the

Companies Act, 1956 to the effect that their re-appointment, if

made, would be in conformity with the limits specified in that

Section.

FINDINGS OF AGREED UPON PROCEDURES

Your Company engaged M/s. S.R. Batliboi & Co. to carry out certain

“Agreed Upon Procedures” [AUP] on various financial parameters

for the financial year ended March 31, 2009 related to Consolidated

Financial Statements of the Company. We are pleased to inform

you that there are no material adjustments to be made in the

Consolidated Financial Statements of the Company arising out of

findings of the AUP.

GROUP FOR INTERSE TRANSFER OF SHARES

As required under Clause 3(e) of Securities and Exchange Board of

India (Substantial Acquisition of Shares and Takeovers) Regulations,

1997, persons constituting Group within the meaning as defined

in the Monopolies and Restrictive Trade Practices Act, 1969 for the

purpose of Regulation 10 to 12 of aforesaid SEBI Regulations are

as follows:

(a) Mr. Analjit Singh, (b) Mrs. Neelu Analjit Singh, (c) Ms. Piya Singh

(d) Mr. Veer Singh, (e) Ms. Tara Singh, (f) Neelu Family Trust, (g)

Medicare Investment Limited, (h) Cheminvest Limited, (i) Liquid

Investment and Trading Co., (j) Maxopp Investments Limited, (k)

Mohair Investment & Trading Co. (P) Ltd., (l) Boom Investments

Private Limited, (m) PVT Investment Limited, (n) Pen Investments

Limited, (o) Pivet Finances Limited, (p) Dynavest India Private

Limited. (q) Maxpak Investment Limited, (r) Trophy Holdings Private

Limited and (s) Moav Investment Limited.

DIRECTORS

Mr. Anuroop (Tony) Singh was appointed Vice Chairman of the

Company effective April 23, 2009.

Mr. S.K. Bijlani and Mr. Aman Mehta have been co-opted as

additional directors on the Board of Directors of the Company

effective October 22 and December 12, 2008, respectively. The

Company has received notices under Section 257 of the Companies

Act, 1956 proposing their candidature for being appointed as

Directors of the Company at the ensuing Annual General Meeting.

In accordance with the provisions of the Companies Act, 1956 and

the Articles of Association of the Company, Mr. N. Rangachary, Mr.

Piyush Mankad, Mr. Anuroop (Tony) Singh and Mr. N.C. Singhal

retire by rotation at the ensuing Annual General Meeting and are

eligible for re-appointment.

Mr. Bharat Sahgal resigned from the Board of Directors of the

Company effective March 31, 2009. Your Directors place on record,

their appreciation for the valuable contribution made by him during

his association with the Company.

CAUTIONARY STATEMENT

Statements in this Report, particularly those which relate to

Management Discussion and Analysis describing the Company’s

objectives, projections, estimates and expectations, may constitute

“forward looking statements” within the meaning of applicable laws

Directors’ Report

1 Standalone.p65 8/10/2009, 4:31 PM81

MAX INDIA LIMITED


and regulations. Actual results might differ materially from those

either expressed or implied in the statements depending on the

circumstances.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Board of Directors of the Company confirms that:

(i) In the preparation of annual accounts, the applicable

accounting standards have been followed, along with proper

explanation relating to material departures.

(ii) The Directors have selected such accounting policies and

applied them consistently and made judgments and estimates

that are reasonable and prudent, so as to give a true and fair

view of the state of affairs of the Company at the end of the

financial year and of the profit or loss of the Company for that

period.

(iii) The Directors have taken proper and sufficient care for the

maintenance of adequate accounting records in accordance

with the provisions of the Companies Act, 1956, for

safeguarding the assets of the Company and for preventing

and detecting fraud and other irregularities.

(iv) The Directors have prepared the annual accounts on a going

concern basis.

CONTRIBUTION FOR EDUCATIONAL CAUSE

Being in the service sector, where talent is a key asset, the Max

India Group along with three other business groups have joined

hands with Indian School of Business, Hyderabad and Government

of Punjab to set a second Campus of ISB at Knowledge City, Mohali,

Punjab. The ISB Campus, Mohali will have four specialist Institutes,

termed as Centres of Excellence, for promoting research and offering

specializations in post graduate programmes. One such institution

will be named as ‘Max India Institute of Healthcare Management’.

Max India Institute of Healthcare Management will impart industry

relevant skill-sets to students in this programme to meet India’s

growing need for quality healthcare professionals. In this regard, it

has been proposed to contribute a sum of Rs. 50 crores from Max

India Group, which will be contributed 1/3rd from the Company, 1/

3rd from its subsidiary, Max Healthcare Institute Limited and the

balance 1/3rd from the Promoters of the Company, over the next

two to three years.

ACKNOWLEDGEMENTS

Your Directors would like to place on record their appreciation of

the contribution made by the Management and the employees who

through their competence and commitment have enabled the

Company to achieve impressive growth. Your Directors acknowledge

with thanks the co-operation and assistance received from various

agencies of the Central and State Governments, Financial

Institutions and Banks, Shareholders, Joint Venture partners and

all other business associates.

For and on behalf of the Board of Directors

New Delhi ANALJIT SINGH

JULY 30, 2009 Chairman & Managing Director

Directors’ Report

1 Standalone.p65 8/8/2009, 3:04 PM82

MAX INDIA LIMITED


PARTICULARS PURSUANT TO COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988

A. CONSERVATION OF ENERGY

a) Energy Conservation measures taken

The Company has taken several steps to conserve energy. Energy conservation continues to be on high priority for existing as

well as new projects. Various steps taken to bring about savings are -

• External audit of BOPP lines from technical cell of leading European based BOPP plant manufacturer.

• To conserve energy, reduce waste & aggressively promote, reuse & recycle of materials adopted the mission pursuing

ecologically sustainable economic growth & signed code for ecologically sustainable business growth evolved by CII.

• Installation of AC drives for Die exhaust fan & cooling tower fans .

• Installation of high efficient electrical motors in plant.

• Conservation of energy by using day light in new BOPP line.

• Reduction in energy consumption by use of cooling tower water instead of chilled water in winter for new BOPP film line.

• Reduction in specific energy consumption of Metalliser by optimizing Metallization Parameters.

• Reduction in Furnace oil consumption of new BOPP line by adopting the best operational practices.

(b) Additional investments and proposals, if any, being implemented for reduction in consumption of energy

New Energy cell being created to identify and implement new Energy saving projects/measures. Highly energy efficient equipments

are being added for upcoming projects.

(c) Impact of measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production

of goods

Above measures will result in reduction in energy consumption and consequent savings in Specific energy consumption per

unit between 5% to 7%.

(d) Total energy consumption and energy consumption per unit of production as per Form A of the Annexure of “Particulars

pursuant to Companies (Disclosure of particulars in the Report of the Board of Directors) Rule 1988

NOT APPLICABLE

B. RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION, ADAPTION AND INNOVATION

I. RESEARCH AND DEVELOPMENT

(a) Research & Development

• The R&D efforts of the company are continuously directed towards development new products, new applications,

quality improvement and product innovation.

• Continuous research, in-house as well as on customer machines, is being carried out . Our constant efforts to develop

new products every year is paying dividends and usage of BOPP film is continuously increasing year after year.

(b) Process Improvement and Development

• Optimization of process parameters of BOPP film lines to enhance efficiencies/ yields.

• Improvement in efficiency of newly developed high value added products

• Process optimization of metallisers to increase production.

• Quality of reprocessed granules being continuously improved.

(c ) Benefits Derived

• Cost competitiveness, effectiveness and high quality products.

• Steady increase in efficiency of machines, productivity and reduction in waste.

• Scientific working has substantially improved the machine utilization, devices, processes, materials, systems and

services.

Annexure - ‘A’

1 Standalone.p65 8/6/2009, 6:37 PM83

MAX INDIA LIMITED


• Products suitable to ever changing customer needs

(d) Future Plan of Action

• High value added niche products to be continuously added to existing range, every year.

• Efficiency improvement to surpass even international standards.

• To further improve product mix resulting in better value addition.

• To improve further quality and delivery index for top customers.

(e) Expenditure on R & D

• Capital : ‘Nil’

• Recurring : Rs. 16.51 lacs

• Total : Rs. 16.51 lacs

• R&D expenditure : 0.05%

as % of net sales

II. TECHNOLOGY ABSORPTION, ADAPTION AND INNOVATION

(A) EFFORTS MADE TOWARDS TECHNOLOGY ABSORPTION, ADAPTION AND INNOVATION

Company has in- house development and R & D cell which perpetually develops new products. These products are commercialized

after successful trials at customer end.

(B) BENEFITS DERIVED AS A RESULT OF ABOVE EFFORTS

New developments as per customer’s requirements further result in product mix optimization & higher margins.

(C ) INFORMATION ABOUT IMPORTED TECHNOLOGY IN LAST 5 YEARS

BOPP and Foil Business did not import any technology in the last 5 years.

C. FOREIGN EXCHANGE EARNING AND OUTGO

(a) Activities Relating to Exports

• Enhanced Focus to increase exports of high-value-added films.

• Increased presence in European market and exploring market in USA for thermal films.

• Increasing presence in Asian countries, specially Middle-East region.

• During 2008-09, exports of BOPP Including thermal films have increased by 10%

(b) TOTAL FOREIGN EXCHANGE EARNED AND USED

(Rs. lacs)


March 2009 March 2008

Earnings 6,557.51 6,273.69

Outgo 6,721.88 5,353.88

For and on behalf of Board of Directors

New Delhi ANALJIT SINGH

JULY 30, 2009 Chairman & Managing Director

Annexure - ‘A’

1 Standalone.p65 8/6/2009, 6:37 PM84

MAX INDIA LIMITED


PA

RTIC

ULA

RS O

F E

MPLO

YEES

INFO

RM

ATI

ON

AS

PER

SEC

TIO

N 2

17 (

2A)

REA

D W

ITH

TH

E C

OM

PAN

IES

(PA

RTI

CU

LAR

S O

F EM

PLO

YEES

) R

ULE

S, 1

975

AN

D F

OR

MIN

G P

AR

T O

F TH

E D

IREC

TOR

S’ R

EPO

RT

FOR

TH

E YE

AR

EN

DED

MA

RC

H 3

1, 2

009

Sr.

Nam

eA

geD

esig

nati

onN

atur

e of

dut

ies

Rem

uner

atio

nQ

ualif

icat

ion

Dat

e of

Expe

rien

ceLa

st E

mpl

oym

ent

Hel

d

No.

(Yrs

.)(In

Rs.

)Co

mm

ence

men

t(Y

rs.)

Org

anis

atio

nD

esig

nati

on

of e

mpl

oym

ent

A.

Empl

oyed

thr

ough

out

the

year

and

wer

e in

rec

eipt

of

rem

uner

atio

n of

not

les

s th

an R

s. 2

4,00

,000

/- p

er a

nnum

1D

war

akan

ath,

P.

61D

irec

tor

- G

roup

Hum

an C

apit

alG

roup

Hum

an R

esou

rces

9,01

5,60

0B.

Sc.

, L.L

.B.,

02.0

4.20

0740

Gla

xo S

mit

hKlin

eD

irec

tor-

Hum

an

PGD

M (P

M &

IR)

Cons

umer

Hea

lthc

are

Res

ourc

es &

Adm

inis

trat

ion

(Indi

a/

Sout

h A

sia)

2Ka

ushi

k, P

. K.

58Ch

ief

Ope

rati

ng O

ffic

er -

Lea

ther

Fin

ishi

ng F

oil

Ope

rati

ons

4,29

2,65

3B.

Sc.

, LPR

I09

.10.

1989

37SR

F Lt

d.Se

nior

Che

mis

t

3Kr

ishn

an V

.45

Com

pany

Sec

reta

ryCo

mpa

ny L

aw M

atte

rs2,

679,

311

B. C

om, A

CS18

.06.

2003

20Se

lf E

mpl

oyed

4M

anoh

ar K

.43

Sr. G

ener

al M

anag

er -

Ope

rati

ons

Ope

rati

ons

2,56

3,11

9BE

(Che

mic

als)

26.0

9.19

9023

Este

r In

dust

ries

Ltd

.Pr

oduc

tion

Eng

inee

r

5M

athu

r, S.

K.

56Ch

ief

Exec

utiv

e -

BOPP

Ope

rati

ons

6,74

3,57

9B.

Tech

, PG

DBM

06.1

0.20

0533

Este

r In

dust

ries

Ltd

.Vi

ce P

resi

dent

-

Mar

keti

ng

6Ra

tnam

, Suj

atha

45Ch

ief

Fina

ncia

l Con

trol

ler

Corp

orat

e Fi

nanc

e/5,

722,

184

B. C

om (H

ons)

,12

.07.

2004

20Ju

bila

nt O

rgno

sys

Ltd.

Gen

eral

Man

ager

-

Acc

ount

s &

Tre

asur

yA

CAFi

nanc

e

7Si

ngh,

Ana

ljit

55Ch

airm

an &

Man

agin

g D

irec

tor

Gen

eral

Man

agem

ent

48,1

78,0

90BA

, BS,

MBA

30.1

0.20

0131

Max

UK

Ltd.

Chai

rman

(Bos

ton)

8Si

ngh,

Dal

bir

50Vi

ce P

resi

dent

- F

inan

ce &

Com

mer

cial

Fina

nce

& C

omm

erci

al3,

720,

283

B.Co

m, A

CA,

26.0

9.19

8926

Swar

aj M

ajda

Ltd

.Se

nior

Off

icer

Fin

ance

ACS

& A

ccou

nts

9Ta

lwar

, Moh

it49

Dir

ecto

r -

Corp

orat

e D

evel

opm

ent

Busi

ness

Dev

elop

men

t13

,141

,795

Post

Gra

duat

e01

.11.

2007

30St

anda

rd C

hart

ered

Ban

kD

irec

tor

& H

ead

(Art

s), P

ost

Who

lesa

le B

ank,

Gra

duat

eEa

st In

dia

(Hos

pita

lity

Man

agem

ent)

B.Em

ploy

ed f

or p

art

of t

he y

ear

and

wer

e in

rec

eipt

of

rem

uner

atio

n of

not

les

s th

an R

s. 2

,00,

000/

- pe

r m

onth

10A

nant

hara

man

, B.

54Jt

. Man

agin

g D

irec

tor

Gen

eral

Man

agem

ent

27,2

74,6

72B.

Com

, FCA

,07

.02.

2001

30In

do R

ama

Synt

heti

csPr

esid

ent

& C

hief

FICW

A, F

CSIn

dia

Ltd.

Fina

ncia

l Off

icer

11Ba

sur,

Nee

raj

40Sr

. Vic

e Pr

esid

ent

- Co

rpor

ate

Fina

nce

Corp

orat

e Fi

nanc

e &

Acc

ount

s7,

110,

869

M.C

om, A

CA,

01.0

5.20

0217

HCL

Tec

hnol

ogie

s Lt

d.Sr

. Man

ager

- C

orpo

rate

ACS

Fina

nce

12N

agar

, Pra

bhat

53Vi

ce P

resi

dent

- L

egal

Lega

l Mat

ters

2,29

4,36

1B.

Com

, L.L

.B.

17.0

8.20

0430

EIH

Ltd

.A

ssis

tant

Vic

e Pr

esid

ent

-

Lega

l Aff

airs

13Ra

ghu

C. V

.46

Dir

ecto

r -

Lega

l & R

egul

ator

y A

ffai

rsLe

gal M

atte

rs7,

962,

681

Bach

elor

of

30.0

7.20

0819

Am

eric

an E

xpre

ssVP

& G

roup

Cou

nsel

Scie

nce

& L

aw,

Bank

ing

Corp

, Gen

eral

Indi

a &

Are

a Co

untr

ies

PGD

IR &

PM

Coun

sel’s

Off

ice

14Sh

arm

a, R

ajan

44Vi

ce P

resi

dent

- H

RCo

rpor

ate

HR

& A

dmin

istr

atio

n3,

443,

849

Mas

ters

in07

.07.

2004

20H

ero

Corp

orat

eVi

ce P

resi

dent

- H

R

Pers

onne

lSe

rvic

e Lt

d.

Man

agem

ent

& In

dust

rial

Rela

tion

s

15Si

bal,

Rajn

i Sek

hri

49D

irec

tor

- H

ealt

h In

sura

nce

Hea

lth

Insu

ranc

e4,

019,

724

MA

in E

cono

mic

s22

.03.

2007

23LB

S N

atio

nal A

cade

my

ofSr

. Dep

uty

Dir

ecto

r

& P

sych

olog

yA

dmin

istr

atio

n

(Gov

t of

Indi

a)

16Su

d Ki

rti M

adho

k54

Dir

ecto

r -

Corp

orat

e Su

ppor

t, Ch

airm

an’s

Off

ice

Corp

orat

e Su

ppor

t, Ch

airm

an’s

3,74

4,45

2B.

A. (

Hon

s), M

BA01

.04.

2008

28A

mw

ay In

dia

Ente

rpri

ses

Inde

pend

ent

Busi

ness

Off

ice

Ow

ner

Not

es :

1Re

mun

erat

ion

incl

udes

sal

ary,

allo

wan

ces,

val

ue o

f re

nt f

ree

acco

mm

odat

ion,

bon

us, m

edic

al r

eim

burs

emen

t, le

ave

trav

el a

ssis

tanc

e, p

erso

nal a

ccid

ent

and

heal

th in

sura

nce,

Com

pany

’s c

ontr

ibut

ion

to P

rovi

dent

, Pen

sion

, Gra

tuit

y an

d

Supe

rann

uati

on f

und,

leav

e en

cash

men

t an

d m

onet

ary

valu

e of

per

quis

ites

.

2N

one

of t

he a

bove

em

ploy

ees

is a

rel

ativ

e of

any

dir

ecto

r of

the

Com

pany

.

3Th

e se

rvic

es o

f M

r. A

nalji

t Si

ngh

and

Mr.

B. A

nant

hara

man

are

con

trac

tual

in n

atur

e.

4M

r. A

nalji

t Si

ngh

hold

s by

him

self

and

alo

ng-w

ith

his

spou

se a

nd d

epen

dent

chi

ldre

n 2.

19%

of

the

Equi

ty S

hare

s of

the

Com

pany

as

of t

he d

ate

of t

his

repo

rt.

On

beha

lf o

f th

e Bo

ard

of D

irec

tors

New

Del

hiA

NA

LJIT

SIN

GH

JULY

30,

200

9Ch

airm

an &

Man

agin

g D

irec

tor

Annexure - ‘B’

1 Standalone.p65 8/6/2009, 6:37 PM85

MAX INDIA LIMITED


TO THE MEMBERS OF MAX INDIA LIMITED

1. We have audited the attached Balance Sheet of Max IndiaLimited, as at March 31, 2009, and the related Profit and LossAccount and Cash Flow Statement for the year ended on thatdate annexed thereto, which we have signed under referenceto this report. These financial statements are the responsibilityof the Company’s management. Our responsibility is to expressan opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditingstandards generally accepted in India. Those Standards requirethat we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes assessing theaccounting principles used and significant estimates made bymanagement, as well as evaluating the overall financialstatement presentation. We believe that our audit provides areasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003,as amended by the Companies (Auditor’s Report) (Amendment)Order, 2004, issued by the Central Government of India in termsof sub-section (4A) of Section 227 of ‘The Companies Act,1956’ of India (the ‘Act’) and on the basis of such checks ofthe books and records of the Company as we consideredappropriate and according to the information and explanationsgiven to us, we further report that:

(i) (a) The Company is maintaining proper records showingfull particulars including quantitative details andsituation of fixed assets.

(b) The fixed assets are physically verified by themanagement according to a phased programmedesigned to cover all the items over a period of threeyears, which in our opinion, is reasonable havingregard to the size of the Company and the nature ofits assets. Pursuant to the programme, a portion ofthe fixed assets has been physically verified by themanagement during the year and no materialdiscrepancies between the book records and thephysical inventory have been noticed.

(c) In our opinion and according to the information andexplanations given to us, a substantial part of fixedassets has not been disposed of by the Companyduring the year.

(ii) (a) The inventory (excluding stocks with third parties) hasbeen physically verified by the management duringthe year. In respect of inventory lying with third parties,these have substantially been confirmed by them. Inour opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verificationof inventory followed by the management arereasonable and adequate in relation to the size ofthe Company and the nature of its business.

(c) On the basis of our examination of the inventoryrecords, in our opinion, the Company is maintainingproper records of inventory. The discrepanciesnoticed on physical verification of inventory ascompared to book records were not material.

(iii) (a) The Company has not granted any loans, secured orunsecured, to companies, firms or other partiescovered in the register maintained under Section 301of the Act.

(b) The Company has not taken any loans, secured orunsecured, from companies, firms or other partiescovered in the register maintained under Section 301of the Act.

(iv) In our opinion and according to the information andexplanations given to us, having regard to theexplanation that certain items purchased are of specialnature for which suitable alternative sources do notexist for obtaining comparative quotations, there isan adequate internal control system commensuratewith the size of the Company and the nature of itsbusiness for the purchase of inventory, fixed assetsand for the sale of goods and services. Further, on thebasis of our examination of the books and records ofthe Company, and according to the information andexplanations given to us, we have neither come acrossnor have been informed of any continuing failure tocorrect major weaknesses in the aforesaid internalcontrol system.

(v) According to the information and explanations given tous, there have been no contracts or arrangements referredto in Section 301 of the Act during the year to be enteredin the register required to be maintained under that Section.Accordingly, commenting on transactions made inpursuance of such contracts or arrangements does not arise.

(vi) The Company has not accepted any deposits from thepublic within the meaning of Sections 58A and 58AAof the Act and the rules framed there under.

(vii) In our opinion, the Company has an internal audit systemcommensurate with its size and nature of its business.

(viii) The Central Government of India has not prescribedthe maintenance of cost records under clause (d) ofsub-section (1) of Section 209 of the Act for any ofthe products of the Company.

(ix) (a) According to the information and explanationsgiven to us and the records of the Companyexamined by us, in our opinion, the Company isregular in depositing the undisputed statutorydues including provident fund, investoreducation and protection fund, employees’ stateinsurance, income-tax, sales-tax, wealth tax,service tax, customs duty, excise duty, cess andother material statutory dues as applicable withthe appropriate authorities.

Auditors’ Report

1 Standalone.p65 8/6/2009, 6:37 PM86

MAX INDIA LIMITED


(b) According to the information and explanationsgiven to us and the records of the Companyexamined by us, the particulars of dues ofincome-tax, sales-tax, wealth tax, service tax,customs duty, excise duty and cess as at March31, 2009 which have not been deposited onaccount of a dispute, are disclosed in Notes 1(d)and 4 on Schedule 22B.

(x) The Company has no accumulated losses as at March31, 2009 and it has not incurred any cash losses inthe financial year ended on that date or in theimmediately preceding financial year.

(xi) According to the records of the Company examinedby us and the information and explanation given tous, the Company has not defaulted in repayment ofdues to any financial institution or bank or debentureholders as at the balance sheet date.

(xii) The Company has not granted any loans and advanceson the basis of security by way of pledge of shares,debentures and other securities.

(xiii) The provisions of any special statute applicable to chitfund / nidhi / mutual benefit fund/societies are notapplicable to the Company.

(xiv) In our opinion, the Company has maintained properrecords of transactions and contracts relating todealing or trading in shares, securities, debentures andother investments during the year and timely entrieshave been made therein. Further, such securities havebeen held by the Company in its own name.

(xv) In our opinion and according to the information andexplanations given to us, the terms and conditions ofthe guarantees given by the Company, for loans takenby others from banks or financial institutions duringthe year, are not prejudicial to the interest of theCompany.

(xvi) In our opinion, and according to the information andexplanations given to us, on an overall basis, the termloans have been applied for the purposes for whichthey were obtained.

(xvii) On the basis of an overall examination of the balancesheet of the Company, in our opinion and accordingto the information and explanations given to us, thereare no funds raised on a short-term basis which havebeen used for long-term investment.

(xviii) The Company has not made any preferential allotmentof shares to parties and companies covered in theregister maintained under Section 301 of the Actduring the year.

(xix) There are no debentures outstanding as at the year end.

(xx) The Company has not raised any money by public issuesduring the year.

(xxi) During the course of our examination of the booksand records of the Company, carried out in accordancewith the generally accepted auditing practices in India,and according to the information and explanationsgiven to us, we have neither come across any instanceof fraud on or by the Company, noticed or reportedduring the year, nor have we been informed of suchcase by the management.

4. Further to our comments in paragraph 3 above, we report that:

(a) We have obtained all the information andexplanations, which to the best of our knowledge andbelief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required bylaw have been kept by the Company so far as appearsfrom our examination of those books;

(c) The Balance Sheet, Profit and Loss Account and CashFlow Statement dealt with by this report are inagreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and LossAccount and Cash Flow Statement dealt with by thisreport comply with the accounting standards referredto in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received fromthe directors, as on March 31, 2009 and taken onrecord by the Board of Directors, none of the directorsis disqualified as on March 31, 2009 from beingappointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information andaccording to the explanations given to us, the saidfinancial statements together with the notes thereonand attached thereto give in the prescribed mannerthe information required by the Act and give a trueand fair view in conformity with the accountingprinciples generally accepted in India:

(i) in the case of the Balance Sheet, of the state ofaffairs of the Company as at March 31, 2009;

(ii) in the case of the Profit and Loss Account, ofthe profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of thecash flows for the year ended on that date.

V. NIHAWANPartner

Membership Number F 87228

For and on behalf ofGurgaon Price WaterhouseJUNE 26, 2009 Chartered Accountants

Auditors’ Report

1 Standalone.p65 8/6/2009, 6:37 PM87

MAX INDIA LIMITED


(RS. LACS)

Schedule As at As atMarch 31, 2009 March 31, 2008

SOURCES OF FUNDSSHAREHOLDERS’ FUNDSShare Capital 1 4440.61 4434.85Reserves and Surplus 2 201794.77 199943.43

206235.38 204378.28LOAN FUNDSSecured Loans 3 10058.75 12133.93Unsecured Loans 4 - Loans 82.61 85.98 - Advance from Others - 17420.55

10141.36 29640.46Deferred Tax Liability (Net) 5 - 1200.14

216376.74 235218.88

APPLICATION OF FUNDSFIXED ASSETS 6Gross Block 24921.16 23754.60Less: Depreciation 7493.83 6346.71

Net Block 17427.33 17407.89Capital Work in Progress 2560.05 521.54

19987.38 17929.43

INVESTMENTS 7 169030.46 206453.55

CURRENT ASSETS, LOANS AND ADVANCESInventories 8 2804.31 2760.86Sundry Debtors 9 5289.74 6152.47Cash and Bank Balances 10 16633.20 757.19Other Current Assets 11 49.93 -Loans and Advances 12 6668.06 5750.58

31445.24 15421.10Less: CURRENT LIABILITIES AND PROVISIONSCurrent Liabilities 13 3308.49 3961.93Provisions 14 837.88 893.96

4146.37 4855.89

NET CURRENT ASSETS 27298.87 10565.21

MISCELLANEOUS EXPENDITURE 15 60.03 270.69(To the extent not written off or adjusted)

216376.74 235218.88

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS 22

Balance Sheet as at March 31, 2009

The Schedules referred to above form an integral part of the Balance Sheet For and on behalf of the Board of Directors

This is the Balance Sheet referred to in our report of even date

V. NIJHAWAN ANALJIT SINGH Chairman & Managing DirectorPartner N. RANGACHARY DirectorMembership No. F 87228 ASHWANI WINDLASS Director

For and on behalf of SUJATHA RATNAM Chief Financial ControllerPrice Waterhouse V. KRISHNAN Company SecretaryChartered Accountants

Gurgaon New DelhiJUNE 26, 2009 JUNE 26, 2009

1 Standalone.p65 8/6/2009, 6:37 PM88

MAX INDIA LIMITED


Profit and Loss Account for the year ended March 31, 2009

(RS. LACS)

Schedule For the Year Ended For the Year EndedMarch 31, 2009 March 31, 2008

INCOMESales 39349.42 32299.22Less: Sales Return (367.72) (398.81)

Excise Duty (3606.19) (3470.99)

35375.51 28429.42Income from Investment Activities 16 4719.98 6917.96Other Income 17 1896.98 2188.90

41992.47 37536.28INCREASE/(DECREASE) IN INVENTORY 18 (18.87) 503.49

41973.60 38039.77

EXPENDITUREManufacturing and Other Expenses 19 35839.22 28909.85Financial Expenses 20 1624.83 1459.52Depreciation 6 1205.99 1138.92

38670.04 31508.29

PROFIT FROM OPERATIONS 3303.56 6531.48

Diminution in value of Investments and Doubtful Advances to Subsidiary 2262.17 -(Refer Note B32 on Schedule 22)

PROFIT BEFORE TAX 1041.39 6531.48Tax Expense 21 (1142.08) 341.02

PROFIT AFTER TAX 2183.47 6190.46

PROFIT BROUGHT FORWARD 66533.48 60343.02

BALANCE CARRIED FORWARD TO THE BALANCE SHEET 68716.95 66533.48

Earnings Per Share (Rs. per equity share of Rs. 2/- each)(Refer Note B12 on Schedule 22)

- Basic 0.98 2.90- Diluted 0.98 2.90Number of Shares used in computing earnings per share- Basic 22,19,98,514 21,31,18,796- Diluted 22,21,22,712 21,37,72,230


The Schedules referred to above form an integral part of the For and on behalf of the Board of DirectorsProfit and Loss Account

This is the Profit and Loss Account referred to in our report of even date




1 Standalone.p65 8/6/2009, 6:37 PM89

MAX INDIA LIMITED


Cash Flow Statement for the year ended March 31, 2009

(RS. LACS)


A. CASH FLOW FROM OPERATING ACTIVITIES:NET PROFIT BEFORE TAX 1041.39 6531.48

Adjustment forDepreciation 1205.99 1138.92Miscellaneous Expenditure Written Off - 0.31ESOP Lapsed Written Back (180.82) -ESOP Compensation Expense 59.35 362.36Net Loss on Sale of Fixed Assets 44.54 22.98Net Profit on Sale of Investments (13.32) (30.37)Fixed Assets and Spares Written Off 2.87 0.40Debit Balances Written Off 2.81 0.11Provision for Doubtful Debts and Advances 99.69 20.50Diminution in value of Investments and Doubtful Advances to Subsidiary 2262.17 -Stocks Written Off - 0.16Provision for Leave Encashment 66.12 42.41Provision for Gratuity 62.06 66.24Interest Expense 1537.61 1393.51Interest Income (800.57) (174.20)Dividend Income From Non Trade Investments-Current (3906.09) (6713.39)Liability/Provision no Longer Required Written Back (245.54) (15.30)Unrealised Foreign Exchange (Gain)/Loss 8.81 25.85TDS on Service/Other Operating Income (2.59) (7.13)

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 1244.48 2664.84

Adjustment forTrade and Other Receivables (1949.26) (4334.36)Inventories (43.46) (1427.25)Trade Payables (651.09) 1435.57

CASH GENERATED FROM/(USED IN) OPERATIONS (1399.33) (1661.20)

Income Tax Refunded/(Paid) - 21.16Fringe Benefit Tax (Paid) (59.88) (188.04)Wealth Tax (Paid) (1.48) (1.24)

CASH FROM/(USED IN) OPERATING ACTIVITIES (1460.69) (1829.32)

B. CASH FLOW FROM INVESTING ACTIVITIESInvestments made (Others) (228905.32) (393624.96)Sale of Investments 265893.86 293029.58Purchase of Fixed Assets (3066.07) (3135.60)Sale of Fixed Assets 21.83 30.99Interest Received (Net) 572.26 137.76Dividend Income From Non Trade Investments-Current 3906.09 6713.39

CASH FROM/(USED IN) INVESTMENT ACTIVITIES 38422.65 (96848.84)

1 Standalone.p65 8/6/2009, 6:37 PM90

MAX INDIA LIMITED


(RS. LACS)


C. CASH FLOW FROM FINANCING ACTIVITIESIssue of Shares to QIBs - 99999.98Shares Issue Expenses - (2069.59)ESOPs Excercised 5.76 3.48Capital Subsidy received - 50.00Interest Paid (1592.61) (1437.34)Proceeds from Long Term Loans 15.96 1725.33Repayment of Long Term Loans (2205.05) (1226.88)Proceeds/(Repayment) of Short Term Borrowings (Net) 110.54 1575.41Refund of Other Advances Received (17420.55) -

CASH FROM/(USED IN) FINANCING ACTIVITIES (21085.95) 98620.39

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 15876.01 (57.77)

CASH AND CASH EQUIVALENTS - OPENING BALANCE 757.19 814.96CASH AND CASH EQUIVALENTS - CLOSING BALANCE 16633.20 757.19

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 15876.01 (57.77)

Notes

1. The above Cash Flow statement has been prepared under the “Indirect Method” as set out in the Accounting Standard-3 on CashFlow Statements issued by the Institute of Chartered Accountants of India.

2. Cash and Cash Equivalents at the end of the year consist of Cash and Stamps in Hand, Fixed Deposits and Balances with Banks:

As at As atMarch 31, 2009 March 31, 2008

Cash in Hand 4.61 4.25Stamps in Hand 0.18 0.20Cheques in Hand - 10.20Fixed Deposits 4000.00 -Balances with Banks * 5499.53 742.54Remitance in Transit 7128.88 -

16633.20 757.19

* Includes Rs. 12.82 Lacs (Previous year Rs. 23.89 Lacs) not available for use by the Company.

3. Previous year’s figures have been regrouped / reclassified wherever necessary to conform to current year’s classification.


The Schedules referred to above form an integral part of the For and on behalf of the Board of DirectorsCash Flow Statement

This is the Cash Flow Statement referred to in our report of even date




1 Standalone.p65 8/6/2009, 6:37 PM91

MAX INDIA LIMITED


Schedules annexed to and forming part of the accounts

(RS. LACS)


SCHEDULE-1SHARE CAPITALAUTHORISED46,00,00,000 Equity Shares of Rs. 2/- each(Previous year 46,00,00,000 Equity Shares of Rs. 2/- each) 9200.00 9200.008,00,000 Preference Shares of Rs. 100/- each(Previous year 8,00,000 Preference Shares of Rs. 100/- each) 800.00 800.00

10000.00 10000.00

ISSUED, SUBSCRIBED AND PAID UP(Refer Notes A9, B6 and B9 on Schedule 22)

22,20,30,310 Equity Shares of Rs. 2/- each fully paid up(Previous year 22,17,42,545 Equity Shares of Rs. 2/- each fully paid up) 4440.61 4434.85

4440.61 4434.85Paid up Share Capital includes:

- 5,76,60,400 Equity Shares of Rs. 2/- each (Previous year 5,76,60,400 Equity Shares of Rs. 2/- each)

allotted as fully paid up by way of bonus shares out of Securities Premium Account; and

- 14,49,925 Equity Shares of Rs. 2/- each (Previous year 11,62,160 Equity Shares of Rs. 2/- each)

allotted under employees stock option plan

SCHEDULE-2RESERVES AND SURPLUS(Refer Notes A8, A9, B6, B9, B15, B24, B25 and B30 on Schedule 22)

Capital ReserveOpening Balance 50.00 -Additions during the year - 50.00

Closing Balance 50.00 50.00

Securities Premium AccountOpening Balance 123588.13 26241.52Additions during the year 414.46 99416.20Deletions/utilisations during the year - 2069.59


Employee Stock Option OutstandingOpening Balance 819.98 1069.53Additions during the year 73.39 -Deletions/utilisations during the year 819.98 249.55


General ReserveOpening Balance 8951.84 9072.95Deletions/utilisations during the year - 121.11


Profit and Loss AccountOpening Balance 66533.48 60343.02Additions during the year 2183.47 6190.46


201794.77 199943.43

1 Standalone.p65 8/6/2009, 6:37 PM92

MAX INDIA LIMITED


(RS. LACS)


SCHEDULE-3SECURED LOANS(Refer Note B5 on Schedule 22)

Loans and Advances From Banks- Term Loan * 7228.57 9414.29- Fund Based Working Capital Facilities 2830.18 2719.64

10058.75 12133.93

* Amount repayable within one year Rs. 1885.71 Lacs (Previous year Rs. 3185.71 Lacs)

SCHEDULE-4UNSECURED LOANS

Other LoansFrom Banks ** 82.61 85.98

Advances from Others - 17420.55(Refer Note B8 on Schedule 22)

82.61 17506.53

** Amount repayable to banks within one year Rs. 32.54 Lacs (Previous year Rs. 30.78 Lacs)

SCHEDULE-5DEFERRED TAX LIABILITY (NET)(Refer Notes A10, B10 and B15 on Schedule 22)

Deferred Tax LiabilityOpening Balance 1754.89 1617.69Movement during the year 201.20 137.20


Deferred Tax (Asset)Opening Balance (554.75) (512.80)Impact of transitional liabililty on employee benefits - (54.16)Movement during the year (1401.34) 12.21

Closing Balance (1956.09) (554.75)

Net Deferred Tax Liability - 1200.14


1 Standalone.p65 8/6/2009, 6:37 PM93

MAX INDIA LIMITED


SCHEDULE-6

FIXED ASSETS(Refer Notes A3, A4, A5 and B2 on Schedule 22) (RS. LACS)

Gross Block Depreciation Net Block

Particulars As at Additions Deletions/ As at As at Additions Deletions/ As at As at As atApril 1, Adjustments March 31, April 1, Adjustments March 31, March 31, March 31,

2008 2009 2008 2009 2009 2008

Tangible AssetsLand (Freehold) 82.62 127.26 - 209.88 - - - - 209.88 82.62Building 2836.74 271.59 - 3108.33 480.29 94.23 - 574.52 2533.81 2356.45Leasehold Improvements 355.51 - - 355.51 320.33 35.18 - 355.51 - 35.18Plant and Machinery 19210.77 712.72 - 19923.49 4877.49 975.07 - 5852.56 14070.93 14333.28Furniture, Fittings andEquipments 761.75 73.52 45.06 790.21 486.97 49.43 31.77 504.63 285.58 274.78Vehicles 321.68 96.65 83.05 335.28 72.26 29.38 27.10 74.54 260.74 249.42Intangible AssetsSoftware 185.53 12.93 - 198.46 109.37 22.70 - 132.07 66.39 76.16

Total 23754.60 1294.67 128.11 24921.16 6346.71 1205.99 58.87 7493.83 17427.33 17407.89

Previous year 22017.07 1852.89 115.36 23754.60 5268.78 1138.92 60.99 6346.71

Capital Work in Progress 2560.05 521.54

19987.38 17929.43

Notes :1. Additions include:

- Interest capitalised Nil (Previous year Rs. 32.73 Lacs).- Pre-Operative expenses capitalised Rs. 26.64 Lacs (Previous year Rs. 185.94 Lacs).- Foreign Exchange Fluctuations Nil (Previous year Rs. 41.27 Lacs).

2. Leasehold Improvements represents civil and other improvements at Company’s leased premises.3. Plant and Machinery includes an amount of Rs. 135.08 Lacs (Previous year Rs. 135.08 Lacs) paid to PSEB for drawing a power line representing assets not owned by the

Company. The same has been depreciated over a period of five years.4. The above includes vehicles hypothecated amounting to Rs. 176.48 Lacs (Previous year Rs. 125.78 Lacs).5. Capital Work in Progress includes:

- Pre-Operative expenses pending allocation and capitalisation Rs. 114.06 Lacs (Previous year Rs. 0.98 Lacs).- Capital Advance Rs. 118.31 Lacs (Previous year Rs. 91.01 Lacs).

(RS. LACS)


SCHEDULE-7INVESTMENTS(Refer Notes A6, B8, B16, B24 and B32 on Schedule 22)

a) Long Term-Trade (Unquoted), at costSubsidiariesEquity Shares 157031.75 101531.75Less: Provision for Diminution (3686.73) 153345.02 (3238.86)Preference Shares 1505.00 1505.00

b) Long Term-Non Trade (Quoted), at costEquity Shares 0.65 0.65

c) Current Non Trade (Unquoted), at costUnits in Mutual Fund - Unutilised monies raised through placement to QIBs 2009.84 75730.39 - Others 12169.95 14179.79 30924.62

169030.46 206453.55

Aggregate value of unquoted investments 169029.81 206452.90

Aggregate value of quoted investments 0.65 0.65

Market value of quoted investments 0.83 1.92


1 Standalone.p65 8/6/2009, 6:37 PM94

MAX INDIA LIMITED


(RS. LACS)


SCHEDULE-8INVENTORIES(Refer Notes A7 and B22 on Schedule 22)

Manufacturing and Trading ActivitiesRaw Materials in Stores/Transit 1577.01 1582.05Stores and Spares 455.41 388.05Work in Process 579.29 625.19Finished Goods 192.60 165.57

2804.31 2760.86

SCHEDULE-9SUNDRY DEBTORS(Unsecured)

Debts exceeding six months:Considered Good 0.92 11.89Considered Doubtful 268.98 194.54Less: Provision for Doubtful Debts (268.98) (194.54)

0.92 11.89Other DebtsConsidered Good 5288.82 6140.58Considered Doubtful 22.89 -Less: Provision for Doubtful Debts (22.89) -

5289.74 6152.47

SCHEDULE-10CASH AND BANK BALANCES

Cash in Hand 4.61 4.25Cheques in Hand - 10.20Remitance in Transit * 7128.88 -Balances with Scheduled Banks:

In Current Accounts 5486.71 718.65In Dividend Accounts - 9.10In Debenture Interest Accounts 12.82 14.79In Fixed Deposit Account 4000.00 -

Stamps in Hand 0.18 0.20

16633.20 757.19* Represents amounts receivable against redemption of units in mutual funds

SCHEDULE-11OTHER CURRENT ASSETS

Interest Receivable Considered Good 49.93 - Considered Doubtful 23.53 23.53 Less: Provision for Doubtful Interest (23.53) (23.53)

49.93 -Amounts due from companies under the same management

- Pharmax Corporation Limited 49.54 -

Maximum amount outstanding during the year from companies under the same management

- Pharmax Corporation Limited 61.18 -


1 Standalone.p65 8/6/2009, 6:37 PM95

MAX INDIA LIMITED


(RS. LACS)

As at As at

March 31, 2009 March 31, 2008

SCHEDULE-12

LOANS AND ADVANCES

(Refer Note B32 on Schedule 22)

(Considered good, unless otherwise stated)

Secured

Housing Loans 4.18 4.89

Unsecured

Subsidiary Companies- Advances 1337.75 1058.89- Loans

Considered Good 896.97 2297.84Considered Doubtful 2479.43 665.14Less: Provision for Doubtful Loans (2479.43) 896.97 (665.14)

- Inter Corporate Deposits 1138.00 358.00- Security Deposit 120.80 58.02Share Application Money Pending Allotment- Subsidiary companies 723.25 723.25- Companies under the same management 800.00 -Others- Advances recoverable in cash or in kind

or for value to be receivedConsidered Good 1192.73 883.32Considered Doubtful 304.35 305.42Less: Provision for Doubtful Advances (304.35) 1192.73 (305.42)

- Loans to Employees 19.25 15.61- Inter Corporate Deposits

Considered Doubtful 441.60 441.60Less: Provision for Doubtful Deposits (441.60) - (441.60)

- Balance with Excise Authorities 270.58 200.06- Prepaid Expenses 34.23 34.19- Security Deposits 130.32 116.51

6668.06 5750.58

Amount due from directors (Refer Note B11 on Schedule 22) - 622.36

Maximum amount outstanding during the year from directors 807.87 622.36

Amounts due from subsidiaries

- Max Healthcare Institute Ltd. 1225.91 962.57

- Max New York Life Insurance Co. Ltd. 10.73 3.75

- Pharmax Corporation Ltd. 1267.33 416.02

- Max Ateev Ltd. 674.06 675.40

- Max Neeman Medical International Ltd. 888.06 660.84

- Max HealthStaff International Ltd. 1814.29 1626.74

- Neeman Medical International NV 92.57 92.57

- Neeman Medical International BV 723.25 723.25


1 Standalone.p65 8/6/2009, 6:37 PM96

MAX INDIA LIMITED



Maximum amount outstanding during the year from subsidiaries

- Max Healthcare Institute Ltd. 1234.05 1156.65

- Max New York Life Insurance Co. Ltd. 22.38 11.06

- Pharmax Corporation Ltd. 5703.59 416.02

- Max Ateev Ltd. 676.62 675.76

- Max Neeman Medical International Ltd. 888.05 660.84

- Max HealthStaff International Ltd. 1820.53 1626.74

- Neeman Medical International NV 92.57 92.57

- Neeman Medical International BV 723.25 723.25

Amounts due from companies under the same management

- Max BUPA Health Insurance Ltd. 985.16 -



(RS. LACS)

As at As at

March 31, 2009 March 31, 2008

SCHEDULE-13CURRENT LIABILITIES(Refer Note B17 on Schedule 22)

Acceptances - 26.88Sundry Creditors

Total outstanding dues of micro enterprises and small enterprises* 79.70 -Total outstanding dues of creditors other than micro enterprisesand small enterprises 3010.11 3718.90

Subsidiary Companies 17.06 -Investor Education and Protection Fund

Unpaid Dividend - 9.10Unpaid Debenture Interest 10.24 12.19

Other Liabilities 167.82 116.29Interest Accrued but not Due 23.56 78.57

3308.49 3961.93

* As certified by the management

SCHEDULE-14PROVISIONS(Refer Notes A10, A11 and B15 on Schedule 22)

Leave Encashment 260.85 194.73Gratuity 320.16 258.10Provision for Wealth Tax 1.63 1.48Provision for Fringe Benefit Tax * 322.84 266.41Less: Advance Fringe Benefit Tax * (324.89) (2.05) (265.01)

Provision for Income Tax 5511.07 5511.06Less: Advance Income Tax (5253.78) 257.29 (5072.81)

837.88 893.96

* Does not include Rs. 152.19 Lacs paid by the Company against FBT on ESOP and recovered from the employees

SCHEDULE-15MISCELLANEOUS EXPENDITURE(To the extent not written off or adjusted)

(Refer Notes A13 and B13 on Schedule 22)

Deferred Employee Compensation 60.03 270.69

60.03 270.69

1 Standalone.p65 8/6/2009, 6:37 PM97

MAX INDIA LIMITED


(RS. LACS)

For the Year Ended For the Year Ended

March 31, 2009 March 31, 2008

SCHEDULE-16

INCOME FROM INVESTMENT ACTIVITIES

(Refer Notes A2, A6 and B16 on Schedule 22)

Dividend Income From Non Trade Investments-Current 3906.09 6713.39

Interest (Gross) on: *

- Inter Corporate Deposits 287.15 26.85

- Fixed Deposits 502.35 136.40

- Others 11.07 800.57 10.95

Net Profit on Sale of Non Trade Investments-Current 13.32 30.37

4719.98 6917.96

* Tax deducted at source Rs. 178.38 Lacs (Previous year Rs. 36.44 Lacs)

SCHEDULE-17

OTHER INCOME

Job Work Charges* 20.11 133.29

Liabilities/Provisions No Longer Required Written Back 245.54 15.30

Gain on Foreign Exchange Fluctuation - 207.21

Less: Loss on Foreign Exchange Fluctuation - (82.85)

Miscellaneous Income 1631.33 1915.95

1896.98 2188.90


SCHEDULE-18

INCREASE/(DECREASE) IN INVENTORY

Opening Stock

Work in Process 625.19 231.27

Finished Goods 165.57 56.00

790.76 287.27

Less: Closing Stock

Work in Process 579.29 625.19

Finished Goods 192.60 165.57

771.89 790.76

Net Increase/(Decrease) (18.87) 503.49


1 Standalone.p65 8/6/2009, 6:37 PM98

MAX INDIA LIMITED



(RS. LACS)

For the Year Ended For the Year EndedMarch 31, 2009 March 31, 2008

SCHEDULE-19MANUFACTURING AND OTHER EXPENSES

ManufacturingRaw Materials Consumed 23338.53 19117.82Goods Purchased for Resale 1.50 -Excise Duty on Scrap and Others 164.49 265.01Power and Fuel 2317.13 2055.62Stores and Spares Consumed 469.89 386.55Packing Material 1051.67 888.58Freight Inward 45.08 40.63Repairs and Maintenance-Plant and Machinery 153.12 98.54Processing Charges 46.63 90.80

27588.04 22943.55

PersonnelSalaries, Wages and Bonus * 3333.30 2405.39Contribution to Provident and Other Funds 221.28 207.80Recruitment 62.36 73.58Staff Welfare 107.99 93.12

3724.93 2779.89

* Net of employee compensation expenses written back amounting to Rs. 180.82 Lacs

(Previous year Nil) pertaining to earlier years

Administration and othersRent 223.33 203.83Insurance 78.01 86.22Rates and Taxes 14.44 82.30Repairs and Maintenance:

Building 41.66 27.70Others 352.72 205.06

Electricity and Water 37.69 33.16Printing and Stationery 67.43 56.16Travelling and Conveyance 721.61 530.33Communication 79.10 70.42Legal and Professional 739.59 419.25Directors’ Fee 16.44 8.90Business Promotion 65.35 75.42Commission 81.14 93.93Trade Discount 476.53 324.33Selling and Distribution 1116.40 988.07Advertisement and Publicity 24.81 56.83Provision for Doubtful Debts and Advances 99.69 20.50Loss on Sale/Disposal of Fixed Assets 44.60 23.00Less: Profit on Sale/Disposal of Fixed Assets (0.06) 44.54 (0.02)Debit Balances Written Off 2.81 0.11Fixed Assets and Spares Written Off 2.87 0.40Charity and Donation 196.29 200.70Stock Written Off - 0.16Amortisation of Miscellaneous Expenditure - 0.31Loss on Foreign Exchange Fluctuation 355.18 -Less: Profit on Foreign Exchange Fluctuation (309.79) 45.39 -Miscellaneous 349.26 55.47Less: Overheads Recovery** (Refer Note B27 on Schedule 22) (350.85) (376.13)

4526.25 3186.41

35839.22 28909.85

** Tax Deducted at source Rs. 2.13 Lacs (Previous year Rs. 2.58 Lacs)

1 Standalone.p65 8/6/2009, 6:37 PM99

MAX INDIA LIMITED


(RS. LACS)

For the Year Ended For the Year EndedMarch 31, 2009 March 31, 2008

SCHEDULE-20

FINANCIAL EXPENSES

Interest on:

Term Loans 1031.66 1097.19

Acceptances 32.02 41.54

Working Capital Facilities 369.02 247.06

Others 104.91 7.72

Bank Charges 63.27 58.20

Finance Charges 23.95 7.81

1624.83 1459.52

SCHEDULE-21

TAX EXPENSE


Current Year Tax

Wealth Tax 1.63 1.48

Fringe Benefit Tax 56.43 190.13

Deferred Tax (1200.14) 149.41

(1142.08) 341.02


1 Standalone.p65 8/6/2009, 6:37 PM100

MAX INDIA LIMITED



SCHEDULE - 22

A. SIGNIFICANT ACCOUNTING POLICIES

1 Accounting Convention

The Financial Statements are prepared to comply in all material aspects with the applicable accounting principles in India, the

applicable accounting standards notified u/s 211(3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act,

1956.

2 Revenue Recognition

(a) Export sales are accounted on the basis of the date of bill of lading/airways bill. Other sales are accounted for at ex-factory

prices on transfer of risks and rewards.

(b) Income from investments is credited to revenue in the year in which it accrues. Income is stated in full with the tax thereon

being accounted for under advance tax.

(c) Dividend is recognised as income as and when the right to receive such payment is established.

3 Fixed Assets

(a) Fixed Assets are stated at their original cost including freight, duties (net of CENVAT), taxes and other incidental expenses

relating to acquisition and installation.

(b) Expenses of revenue nature, which are directly related to project set-up are transferred to "Preoperative expenses pending

capitalisation". These expenses are allocated to fixed assets in the year of commencement of the related project.

(c) Intangible assets are recognised if they are separately identifiable and the Company controls the future economic benefits

arising out of them. All other expenses on intangible items are charged to the profit and loss account. Intangible assets are

stated at cost less accumulated amortisation and impairment.

4 Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as

part of the cost of that asset in accordance with Accounting Standard 16 notified u/s 211(3C) of the Companies Act, 1956 on

"Borrowing Costs". Other borrowing costs are recognized as an expense in the year in which they are incurred. Capitalisation of

borrowing costs ceases when substantially all activities necessary to prepare the qualifying assets for its intended use are complete.

5 Depreciation

(a) Depreciation is charged on straight-line method on a pro-rata basis at rates prescribed under Schedule XIV to the Companies

Act, 1956.

(b) Leasehold improvements are depreciated over respective lease periods.

(c) Assets costing not more than Rs. 5,000 individually are depreciated at 100%.

(d) Software in the nature of intangible assets are depreciated over a period of six years.

6 Investments

(a) Investments are either classified as current investments or long-term investments. The cost of investments includes acquisition

charges such as brokerage, fees and duties. Current investments are carried at lower of cost and fair value.

(b) Long-term investments are carried at cost and provisions are recorded to recognise any decline, other than temporary, in the

carrying value of each investment.

7 Inventories

(a) Inventories are valued at lower of cost and net realisable value. Cost for this purpose is calculated on a weighted average

method. In respect of finished goods and work in process, appropriate overheads are loaded.

(b) Stock of securities is valued at lower of cost and market value, determined category wise. Cost for this purpose is calculated

under First In First Out Method.

1 Standalone.p65 8/6/2009, 6:37 PM101

MAX INDIA LIMITED


8 Capital Subsidy

Capital Subsidies, received under the state capital subsidy scheme are accounted for as capital reserve.

9 Employee Stock Option Scheme

(a) The value of options is equal to the aggregate of the intrinsic value of the options granted. Intrinsic value is the option

discount represented by the excess of market price on grant date over the exercise price of the option and is amortised on a

straight line method basis over the vesting period in line with the Securities and Exchange Board of India (SEBI) Guidelines.

(b) As and when the options are exercised, the same are accounted for as paid up capital to the extent of the face value and Share

Premium to the extent of excess of market price over face value on grant date.

(c) Options that lapse are reversed by a credit to employee compensation expense equal to the amortised portion of the value of

the lapsed options and a credit to deferred employee compensation expense equal to the unamortised option.

10 Taxation

Income taxes are computed using the tax effect accounting method, where taxes are accrued in the same period in which the

related revenue and expenses arise. Provision for tax consists of current tax, fringe benefit tax and deferred tax. A provision is made

for income tax annually based on the tax liability computed, after considering tax allowances and exemptions. Provisions are

recorded when it is estimated that a liability due to disallowances or other matters is probable.

The differences that result between the profit offered for income tax and the profit as per the financial statements are identified,

and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences namely the differences that originate

in one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. The tax effect

is calculated on the accumulated timing differences at the end of an accounting period based on prevailing enacted or substantially

enacted regulations. Deferred tax assets are recognised only if there is virtual certainty that they will be realised and are reviewed

for the appropriateness of their respective carrying values at each balance sheet date.

11 Employee Benefits

(a) Defined Contribution Plan

i) Certain employees of the Company are participants of a defined superannuation plan. The Company makes contributions

under the superannuation plan to "Max India Limited Superannuation Fund" based on a specified percentage of each

covered employee's salary.

ii) The Company makes monthly contributions to the "Max India Limited Employees' Provident Fund Trust" which is based

on a specified percentage of the covered employee's salary. This fund is administered through trustees and the Company's

contributions thereto are charged to revenue every year.

(b) Defined Benefit Plans

i) The liability in respect of Gratuity is provided for on the basis of an actuarial valuation carried out at the year-end using

Projected Unit Credit Method. Actuarial gains and losses are recognized in full in the Profit and Loss Account for the

year in which they occur. The Company has a recognised Trust for Gratuity benefits, "Max India Limited Employees'

Gratuity Fund" to administer the Gratuity funds. The Trust has taken Master policy with the Life Insurance Corporation

of India to cover its liability towards employees' Gratuity. The Gratuity obligation recognized in the Balance Sheet

represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost and as

reduced by the fair value of Gratuity Fund.

ii) The liability in respect of Leave Encashment is provided for on the basis of actuarial valuation carried out at the year-

end for long term compensating absences using Projected Unit Credit Method. Actuarial gains and losses are recognized

in full in the Profit and Loss Account for the year in which they occur. Short term compensated absences are provided

for based on estimates.

12 Foreign Exchange Transactions

(a) Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated

at year-end rates.

(b) The difference in translation of monetary assets and liabilities and realised gains and losses on foreign exchange transactions

are recognised in the profit and loss account.


1 Standalone.p65 8/6/2009, 6:37 PM102

MAX INDIA LIMITED


(c) Exchange difference in respect of liabilities incurred to acquire fixed assets are recognised in the profit and loss account.

13 Miscellaneous Expenditure

(a) Preliminary and Issue expenses are amortised over a period of 10 years, except cost incurred on raising of funds, which is

being amortised over the life of the respective financial instrument.

(b) Deferred employee compensation expense is amortised over the vesting period.

(c) Other deferred revenue expenditure is amortised from the year they have been incurred/related projects commence operations,

over 3 to 5 years based on the period over which future benefits are expected to be received.

14 Leases

Leases of assets under which the lessor effectively retains all the risks and benefits of ownership are classified as operating lease.

Payments made under operating lease are charged to Profit and Loss Account on a straight-line basis over the period of the lease.

15 Provision and Contingencies

A provision is recognized when there is a present obligation as a result of past event and it is probable that an outflow of a resource

will be required to settle the obligation, in respect of which a reliable estimate can be made. These are reviewed at each Balance

Sheet date and adjusted to reflect the current estimates.

Contingent liabilities are disclosed after an evaluation of the fact and legal aspects of the matter involved.

16 Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the

weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share,

the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding

during the period are adjusted for the effects of all dilutive potential equity shares.


1 Standalone.p65 8/6/2009, 6:37 PM103

MAX INDIA LIMITED


B. NOTES TO ACCOUNTS

1 Contingent Liabilities (RS. LACS)

Current Year Previous Year

a) Corporate guarantees * 24000.00 24000.00

b) Claims against the Company not acknowledged as debts:

- Excise Duty 709.26 662.22

- Custom Duty 364.09 413.39

- Service Tax 334.83 325.90

- Income Tax --- Refer Note B4 ---

- Others - 254.31

c) Letter of Credit outstanding 202.14 284.83

d) The Company had received show cause notices from the excise department under Central Excise Act, 1944 against which it

had filed its appeals to the relevant authorities. As at year end, the Company had filed appeal to CESTAT against the following:

(RS. LACS)

Financial year to which the amount relates Current Year Previous Year

2001-2002 145.27 145.27

2004-2005 0.73 1.06

2005-2006 - 0.32

e) Also refer to Note B7 below

* Loans of Rs. 22495.80 Lacs (Previous year Rs. 23561.10 Lacs) are outstanding against the aforesaid corporate guarantees

2 Capital Commitments

(RS. LACS)

Particulars Current Year Previous Year

Estimated amount of contracts remaining to be executed on

capital account and not provided for 233.88 579.22

Less: Capital Advances 118.31 91.01

Balance Value of Contracts 115.57 488.21

3 Concession in Custom Duty availed on Capital equipment imported during the year against export obligation undertaken under

'Export Promotion Capital Goods' Scheme is Rs. 86.55 Lacs (Previous year Rs. 170.28 Lacs).

Movement of EPCG export obligation is given below: (RS. LACS)


Obligation as at April 1, 2008 19852.00 21606.00

Additions during the year 707.00 1573.00

Exports made during the year 3767.00 3327.00

Obligation as at March 31, 2009 16792.00 19852.00

4 Income Tax Cases

(a) In the case of an erstwhile subsidiary of the Company, Max Telecom Ventures Ltd. ("MTVL") (since merged with the Company

with effect from December 1, 2005), a demand of Rs. 9503.93 Lacs (Previous year Rs. 9503.93 Lacs) was raised by the income

tax authorities for the assessment year 1998-99 in connection with capital gains realized by MTVL from the sale of shares of

Hutchison Max Telecom Limited by holding that the sale transaction pertains to previous period relevant to assessment year

1998-99 and by denying exemption under section 10(23G) of the Income-tax Act, 1961. On appeal by MTVL, the CIT (Appeals)

while holding that the sale transaction pertains to previous period relevant to assessment year 1998-99, quashed the order of

the Assessing Officer regarding denial of exemption under section 10(23G) and the demand was cancelled. The tax authorities

have filed an appeal against this order with the Income-Tax Appellate Tribunal ("ITAT"), which appeal is pending as on date.


1 Standalone.p65 8/6/2009, 6:37 PM104

MAX INDIA LIMITED


Subsequently, in the next assessment year, i.e. 1999-00, the above-mentioned transaction was once again sought to be taxed

both as capital gains and under a different head of income (i.e., business income) on a protective basis by the Assessing

Officer as MTVL had asked the tax authorities to treat the transaction as that arising in assessment year 1999-00 and not in

assessment year 1998-99. This, along with a few other additions, resulted in creation of a further demand of

Rs. 25630.03 Lacs (Previous year Rs. 25630.63 Lacs) which included the demand of Rs. 25002.53 Lacs (Rs. 25002.53 Lacs) on

protective basis. On appeal by MTVL, the CIT (Appeals) decided in favor of MTVL and the demand was cancelled. The tax

authorities have filed appeal against this order with ITAT, which appeal is pending as on date.

MTVL had also filed an appeal before ITAT for assessment year 1998-99 contending that the aforesaid sale transaction

pertains to Previous Period relevant to assessment year 1999-2000. This appeal had been disposed off by ITAT by applying a

circular of tax department applicable only to capital gains and holding, as a result, that the transaction of sale of shares

pertains to previous period relevant to assessment year 1998-99. However, the Tax authorities filed a petition before the ITAT

requesting a review of the said order of the ITAT on the ground that all the three appeals pertaining to the aforesaid sale

transaction should have been clubbed and heard together. The said petition of the Department was accepted by the ITAT

which recalled its earlier order in the Company's appeal for Assessment year 1998-99. Aggrieved, the Company filed a writ

petition to the Hon'ble High Court of Punjab and Haryana challenging the above action of ITAT on the ground that the same

was beyond jurisdiction. The Hon'ble High Court of Punjab and Haryana has admitted the writ petition and stayed the

operations of the order of ITAT accepting the petition filed by the Department. The ITAT has in the meanwhile adjourned

sinedie all the three appeals pending operation of the stay imposed by the Hon'ble High Court.

(b) The Company has received the following demands under section 156 of the Income Tax Act, 1961 relating to income tax

assessments:

(RS. LACS)

Assessment year Demand Demand

As at March 31, 2009 As at March 31, 2008

1999-2000 Nil 5.67

2000-2001 5.25 5.25

2001-2002 15.65 15.65

2002-2003 41.77 41.77

2003-2004 Nil Nil

2004-2005 0.76 0.76

2005-2006 Nil Nil

2006-2007 98.96 Nil

The above relate to certain disallowances and other matters and are in various stages of appeal with the CIT(Appeals)/ITAT.

Further, in the following cases, penalty under section 271(1)(c) of the Income Tax Act, 1961 has been levied for which the

Company is in appeal before ITAT.

(RS. LACS)



1992-1993 18.78 19.05

1993-1994 14.63 14.63

5 Loans

(a) Term loan - II from Yes Bank Ltd amounting to Rs. 428.57 Lacs (Previous year Rs. 714.29 Lacs) is secured by a first pari passu

charge on the fixed assets of the Company, both present and future.

(b) Term loan - II from Punjab National Bank amounting to Rs. 3400.00 Lacs (Previous year Rs. 4000.00 Lacs) is secured by a first pari

passu charge on the fixed assets and second pari passu charge on the current assets of the Company, both present and future.


1 Standalone.p65 8/6/2009, 6:37 PM105

MAX INDIA LIMITED


(c) Term loan from Oriental Bank of Commerce amounting to Rs. 3400.00 Lacs (Previous year Rs. 4000.00 Lacs) is secured by a

first pari passu charge on the fixed assets and second pari passu charge on the current assets of the Company, both present

and future.

(d) Fund based working capital facilities from banks are secured by a first pari passu hypothecation charge on all current assets

and a second charge on immovable and movable fixed assets of the Company, both present and future.

6 During year ended March 31, 2008, the Company had issued 4,16,66,660 Equity Shares of Rs. 2/- each at a premium of Rs. 238/- per

share aggregating to Rs. 99999.98 Lacs to Qualified Institutional Buyers ("QIBs") under Chapter XIII-A of the Securities & Exchange

Board of India (Disclosure and Investor Protection) Guidelines, 2000.

7 During year ended March 31, 2008, the Company had given a put option to International Finance Corporation ("IFC"), in respect of

its subscription to the Company's subsidiary Max Healthcare Institute Limited's Optional Cumulative Partially Convertible Redeemable

Preference Shares aggregating Rs. 25000.00 Lacs together with an assured IRR of 11.25%. The Company's obligation on the above

put option is exercisable by IFC any time after 20th July, 2010 or in the event of non performance of certain obligations by Max

Healthcare Institute Ltd. and/or by the Company.

8 In 2003-04, the Company had signed an amendment to the Joint Venture Agreement ("JVA") with New York Life International Inc.

("NYLI"). In terms of the amended JVA, both the parties agreed that the Company shall not transfer or otherwise dispose its

shareholding to an extent of 24% of the paid up issued share capital ("Restricted Shares") of Max New York Life Insurance Company

Ltd ("MNYL") to any person other than NYLI. The parties also agreed that NYLI shall pay to the Company the aggregate par value

equal to 24% of the paid up issued share capital of MNYL from time to time. The aforesaid payment may be applied by NYLI to

purchase the Restricted Shares of MNYL from the Company, when and to the extent permitted pursuant to applicable laws by

March 2010 or become repayable thereafter. Pursuant to this amendment, the Company had received Rs. 17420.55 Lacs (Previous

year Rs. 17420.55 Lacs) in aggregate from NYLI till March 31, 2008.

Thereafter, on July 15, 2008, the Company amended the above mentioned JVA with NYLI. Under the new amended JVA, NYLI has an

option for 8 years to increase its shareholding in MNYL by 24% upto a maximum of 50%, subject to regulations. The option can be

exercised at a fair market value based formula defined as per the new amended JVA, less discount of 10%, as against a preferential

formula earlier. Also, the option deposit of Rs. 17420.55 Lacs received from NYLI in line with the terms of the amendment in 2003-

04 has been refunded on July 15, 2008.

9 Employee Stock Option Plan - 2003 ("the 2003 Plan"):

The Company had instituted the 2003 Plan, which was approved by the Board of Directors in August 2003 and by the shareholders

in September 2003. The 2003 Plan provides for grant of stock options aggregating not more than 5% of number of issued equity

shares of the Company to eligible employees and directors of the Company. The 2003 Plan is administered by the remuneration

committee appointed by the board of directors.

Details of the 2003 Plan are given below:

(NOS)

Year Ended Year Ended

March 31, 2009 March 31, 2008

Options outstanding, beginning of the year 567,935 741,765

Granted during the year 66,320 -

Exercised during the year (287,765) (173,830)

Forfeited during the year (280,170) -

Options outstanding, end of the year 66,320 567,935


1 Standalone.p65 8/6/2009, 6:37 PM106

MAX INDIA LIMITED


10 Deferred Tax

The break up and movement of deferred tax assets and deferred tax liabilities into major components is given below:

2008-2009 (RS. LACS)

Particulars As at April 01, Movement during Closing as at

2008 the year March 31, 2009

Deferred Tax Liability

Depreciation Expense 1754.89 201.20 1956.09

1754.89 201.20 1956.09

Deferred Tax (Asset)

Deduction u/s 43B (165.87) (49.01) (214.88)

Other Provisions (388.88) (318.90) (707.78)

Unabsorbed Depreciation - (1033.43) (1033.43)

(554.75) (1401.34) (1956.09)

Net Deferred Tax Liability 1200.14 1200.14 -

2007-2008 (RS. LACS)

Particulars Opening Change in Adjustment* Movement Closing

As at April 01, Tax Rate during the year As at March 31,

2007 2008


Depreciation 1617.58 (132.64) - 269.95 1754.89

Deduction u/s 35D/35DD 0.11 (0.01) - (0.10) -

1617.69 (132.65) - 269.85 1754.89

Deferred Tax (Asset)

Deduction u/s 43B (79.41) 6.51 (54.16) (38.81) (165.87)

Other Provisions (433.39) 35.54 - 8.97 (388.88)

(512.80) 42.05 (54.16) (29.84) (554.75)

Net Deferred Tax Liability /(Asset) 1104.89 (90.60) (54.16) 240.01 1200.14

Note: Deferred tax assets on timing differences and unabsorbed depreciation are created to the extent of their realisability in future.

* Impact of transitional liability as per AS15 (Refer Note B15 below)

11 Directors' Remuneration (RS. LACS)


(a) Salary, wages and allowances 1203.01 429.60

(b) Contribution to provident fund and superannuation fund 74.52 24.30

(c) Value of perquisites 18.37 27.67

Total 1295.90 481.57

The above does not include leave encashment, gratuity, ESOP.

Notes:

Remuneration for Current year includes an amount of Rs. 613.96 Lacs (Previous year Nil) relating to earlier years for which the

Company has received Central Government approval during Current year. However, this does not include loss on sale of assets

amounting to Rs. 28.79 Lacs arising out of final settlement.

The excess amounts of Nil for the Current year (Previous year Rs. 613.96 Lacs) received by the concerned directors, are held by them

in trust for the Company.


1 Standalone.p65 8/6/2009, 6:37 PM107

MAX INDIA LIMITED


12 Earnings per Share

Calculation of EPS (Basic and Diluted)

Particulars For the Year Ended For the Year Ended

March 31, 2009 March 31, 2008

Basic

Profit after Tax (Rs. Lacs) 2,183.47 6,190.46

Weighted average number of Equity Shares 22,19,98,514 21,31,18,796

EPS (Rupees) 0.98 2.90

Equity Share Details (Nos)

Outstanding as at the beginning of the year 22,17,42,545 17,99,02,055

Issued on May 5, 2008 2,80,175 -

Issued on December 31, 2008 7,590 -

Issued on June 15, 2007 - 4,16,66,660

Issued on September 22, 2007 - 1,66,250

Issued on February 7, 2008 - 7,580

Outstanding as at the end of the year 22,20,30,310 22,17,42,545

Diluted

Profit after Tax (Rs. Lacs) 2183.47 6190.46

Weighted average number of Equity Shares 22,21,22,712 21,37,72,230

EPS (Rupees) 0.98 2.90


Outstanding as at the beginning of the year 22,23,10,480 18,06,43,820

Issued on June 15, 2007 - 4,16,66,660

ESOPs granted under the 2003 Plan 66,320 -

ESOP forfeited 2,80,170 -

Outstanding as at the end of the year 22,20,96,630 22,23,10,480

Reconciliation of denominators used for calculating basic and diluted earnings per share (NOS)


March 31, 2009 March 31, 2008

Denominator used for computing basic Earnings Per Share 22,19,98,514 21,31,18,796

Add :- Dilutive impact of -

(i) ESOPs granted/forfeited under the 2003 Plan 1,24,198 6,53,434

Denominator used for computing diluted Earnings Per Share 22,21,22,712 21,37,72,230

13 Miscellaneous Expenditure (RS. LACS)

Particulars As at April 1, Reversed Additions Amortised As at

2008 during the year during the year March 31, 2009

Preliminary and Share Issue Expenses - - - - -

(0.31) (-) (-) (0.31) (-)

Deferred Employee Compensation * 270.69 224.70 73.39 59.35 60.03

(633.05) (-) (-) (362.36) (270.69)

270.69 224.70 73.39 59.35 60.03

(633.36) (-) (-) (362.67) (270.69)

* Amortisation has been charged to salaries, wages and bonus.

Previous year figures in bracket.


1 Standalone.p65 8/6/2009, 6:37 PM108

MAX INDIA LIMITED


14 In accordance with Accounting Standard AS-11 on the 'Effects of Changes in Foreign Exchange Rates' issued by the Institute of

Chartered Accountants of India read with "Companies (Accounting Standards) Rules, 2006", the Company had adopted the accounting

policies as shown in Note A12 above. There is no material impact on Profit and Loss Account on account of these changes.


Defined Benefit Plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity

on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance

company in the form of a qualifying insurance policy.

Unavailed leaves can be encashed (on Basic Salary) at the time of separation from the company.

The Company had adopted Accounting Standard, AS-15 (revised 2005), on employee benefits with effect from April 1, 2007.

Accordingly, the transitional obligation of the Company amounting to Rs. 121.11 Lacs (Net of tax of Rs. 54.16 Lacs) towards

gratuity and leave encashment liability has been charged off to General Reserve in the previous year.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded

status and amounts recognised in the balance sheet for the respective plans.

(RS. LACS)

Gratuity Leave Encashment

Particulars As at As at As at As at

31.03.2009 31.03.2008 31.03.2009 31.03.2008

Net employee benefit expense (recognised in Employee Cost)

Service cost 41.92 37.13 45.96 29.19

Interest cost 28.30 22.78 15.58 12.19

Expected return on plan assets (8.76) (8.50) - -

Actuarial (gain)/loss 0.60 14.83 38.84 3.84

Net cost 62.06 66.24 100.38 45.22

Details of Provision for gratuity and Leave Encashment Benefits

Present value of the obligation 393.12 353.76 260.85 194.73

Fair value of plan assets 72.96 95.66 - -

Liability recognized at the year end 320.16 258.10 260.85 194.73

Change in present value of the defined benefits obligation are as follows:

Obligations (Opening balance) 353.76 284.76 194.73 152.32

Service Cost 41.92 37.13 45.96 29.20

Interest cost 28.30 22.78 15.58 12.19

Benefits paid (29.72) (5.49) (34.26) (2.81)

Actuarial (gain)/loss (1.14) 14.58 38.84 3.83

Obligation (Closing Balance) 393.12 353.76 260.85 194.73

Change in the fair value of plan assets are as follows:

Fair value of plan assets (Opening balance) 95.66 92.90 - -

Expected return on plan assets 8.76 8.50 - -

Actuarial gain/(loss) (1.74) (0.25) - -

Benefits paid (29.72) (5.49) - -

Fair value of plan assets (Closing balance) 72.96 95.66 - -

The Company expects to contribute NIL to gratuity in 2009-10.


1 Standalone.p65 8/6/2009, 6:37 PM109

MAX INDIA LIMITED


The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:

Life Insurance Corporation of India 100% 100%

Assumptions

Discount rate 7.80% 8.00% 7.80% 8.00%

Interest Rate 7.80% 8.00% 7.80% 8.00%

Estimated rate of return on plan assets 9.15% 9.15% N.A. N.A.

Salary Increase 10.00% 10.00% 10.00% 10.00%

Attrition rate 1% to 5% 1% to 5% 1% to 5% 1% to 5%

(Depending (Depending (Depending (Depending

on Age) on Age) on Age) on Age)

Leave availment in the service N.A. N.A. 5.00% 20.00%

Retirement age 58 years 58 years 58 years 58 years

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other

relevant factors, such as supply and demand in the employment market

Amounts for the current and previous year are as follows:

Defined benefit obligation 393.12 353.76 260.85 194.73

Plan assets 72.96 95.66 - -

Surplus / (deficit) (320.16) (258.10) (260.85) (194.73)

Experience adjustments on plan liabilities 8.79 (14.58) (97.56) (3.84)

Experience adjustments on plan assets (1.74) (0.25) - -

Defined Contribution Plans

During the year, the Company contributed Rs. 92.58 Lacs (Previous year Rs. 87.51 Lacs) for provident fund and Rs. 48.55 Lacs

(Previous year Rs. 44.70 Lacs) for superannuation fund which represents contribution to defined contribution plans.

16 Investments

The details of investments are given below:

Particulars Face As at March 31, 2009 As at March 31, 2008

Value Value Value

(Rs.) Numbers (Rs. Lacs) Numbers (Rs. Lacs)

LONG TERM TRADE (UNQUOTED), AT COST

Subsidiaries

Equity Shares

Max Ateev Ltd. 10 3,14,43,600 3144.36 3,14,43,600 3144.36

Provision for Diminution (3144.36) (3144.36)

Max New York Life Insurance Company Ltd. 10 131,35,00,014 131350.00 75,85,00,014 75850.00

Max Healthcare Institute Ltd. 10 16,61,00,000 16610.00 16,61,00,000 16610.00

Pharmax Corporation Ltd. 1 4,71,17,247 1420.65 4,71,17,247 1420.65

Max Neeman Medical International Ltd. 10 41,66,813 416.68 41,66,813 416.68

Max UK Ltd. GBP 1 2,99,742 213.00 2,99,742 213.00

Max Healthstaff International Ltd. 10 39,45,000 447.87 39,45,000 447.87

Provision for Diminution (447.87) -

Neeman Medical International BV Euro 500 38 3334.69 38 3334.69

Max Visions Inc. USD 30 10,000 94.50 10,000 94.50

Provision for Diminution (94.50) (94.50)

153345.02 98292.89


Gratuity Leave Encashment

Particulars As at As at As at As at

31.03.2009 31.03.2008 31.03.2009 31.03.2008

1 Standalone.p65 8/6/2009, 6:37 PM110

MAX INDIA LIMITED


Preference Shares

Pharmax Corporation Ltd.-9% CRPS 100 15,00,000 1500.00 15,00,000 1500.00

Max Neeman Medical International Ltd. 10 50,000 5.00 50,000 5.00

1505.00 1505.00

LONG TERM NON TRADE (QUOTED), AT COST

Equity Shares

ICICI Bank Ltd. 10 250 0.65 250 0.65

0.65 0.65

CURRENT NON TRADE (UNQUOTED), AT COST

Units in Mutual Fund

Birla Sun Life Liquid Plus-Instl.-Daily Dividend 10 - - 6,687,627 669.22

Birla Sun Life Interval Income Fund-Instl.

-Quarterly Series 2-Dividend 10 - - 5,03,96,318 5039.69

Birla Sun Life Interval Income Fund-Instl.

-Quarterly Series 3-Dividend 10 - - 5,03,39,408 5033.95

Birla Sun Life Short Term Fund - Growth 10 7,28,22,224 7598.35 - -

DSP Merrill Lynch Liquid Plus-Institutional Plan

-Daily Dividend 1000 - - 1,42,568 1426.22

HDFC Cash Management Fund-Savings Plus Plan

-Wholesale-Daily Dividend 10 - - 9,58,81,127 9618.32

HSBC Liquid Plus-Inst Plus - Daily Dividend 10 - - 5,26,52,320 5271.87

ICICI Prudential Flexible Income Plan-Daily Dividend 10 3,88,46,655 5046.10 8,59,01,681 9082.81

ICICI Prudential Interval Fund Quarterly

Interval Plan 1 Retail Dividend 10 - - 5,12,41,078 5124.11

ING Liquid Plus Fund-Institutional-Daily Dividend 10 - - 4,16,41,159 4165.49

Kotak Flexi Debt Scheme - Daily Dividend 10 - - 8,16,78,412 8193.24

Kotak Quarterly Interval Plan Series 6 - Dividend 10 - - 5,03,88,403 5038.85

Lotus India Liquid Plus Fund-Institutional-Daily Dividend 10 - - 5,11,87,145 5126.75

Principal Floating Rate Fund FMP - Instl. option

- Daily Dividend 10 - - 1,02,76,472 1028.91

Reliance Liquidity Plus Fund -Institutional

- Daily Dividend 1000 - - 14,91,315 14932.30

Grindlays Floating Rate Fund-LT-Inst Plan B-Daily Div. 10 - - 5,93,56,822 5937.22

SBI-SHF-Liquid Plus-Institutional Plan-Daily Dividend 10 - - 1,02,45,893 1025.10

TATA Floater Fund - Daily Dividend 10 - - 5,05,23,936 5070.38

TATA Fixed Horizon Fund Series 17 Scheme D - Inst.

Plan-Periodic Dividend 10 - - 10,07,47,776 10074.80

Templeton Floating Rate Income Fund Long Term-Super

Institutional-Daily Dividend 10 - - 4,79,11,926 4795.78

UTI Liquid Plus Fund Institutional Plan (Daily Dividend)

- Reinvest 1000 1,07,457 1535.34 - -

14179.79 106655.01

TOTAL 169030.46 206453.55

Particulars Face As at March 31, 2009 As at March 31, 2008

Value Value Value

(Rs.) Numbers (Rs. Lacs) Numbers (Rs. Lacs)


1 Standalone.p65 8/6/2009, 6:37 PM111

MAX INDIA LIMITED


Name of the Investment Face Purchases Salesvalue Shares/Units Value Shares/Units Value(Rs.) (Numbers) (Rs. Lacs) (Numbers) (Rs. Lacs)

Movement in Investments in Subsidiaries during the yearMax New York Life Insurance Company Ltd. 10 55,50,00,000 55500.00 - -

Movement in Current Non Trade Investments (Unquoted):

Birla Cash Plus-Instl. Prem.-Daily Dividend 10 7,98,96,638 8005.24 7,98,96,638 8005.24Birla Sun Life Liquid Plus-Instl.-Daily Dividend 10 10,55,92,051 10566.39 11,22,79,679 11235.60Birla Sun Life Interval Income Fund-Instl.-QuarterlySeries 2-Dividend 10 14,51,605 145.19 5,18,47,923 5184.88Birla Sun Life Interval Income Fund-Instl.-QuarterlySeries 3-Dividend 10 15,67,192 156.74 5,19,06,600 5190.69Birla Sun Life Short Term Fund Daily Dividend - IP 1000 8,09,38,920 8098.34 8,09,38,920 8098.34Birla Sun Life Short Term Fund - Growth 10 7,28,22,224 7598.34 - -DSP Merrill Lynch FMP 1M Series 1 10 5,03,49,651 5034.97 5,03,49,651 5034.97DSP Merrill Lynch FMP 1M Series 3 IPDR 10 3,52,69,558 3526.96 3,52,69,558 3526.96DSP Merrill Lynch Liquid Plus-InstitutionalPlan-Daily Dividend 1000 21,28,558 21430.91 22,71,126 22857.13HDFC Cash Management Fund-Savings PlusPlan-Wholesale-Daily Dividend 10 13,90,854 139.52 9,72,71,981 9757.84HSBC Liquid Plus-Inst Plus - Daily Dividend 10 13,95,054 139.68 5,40,47,374 5411.55ICICI Prudential Institutional Liquid Plan-SuperInstitutional-Daily Dividend 10 5,00,05,550 5000.80 5,00,05,550 5000.80ICICI Prudential Flexible Income Plan-Daily Dividend 10 23,21,15,927 25848.20 27,91,70,953 29884.91ICICI Prudentail Interval Fund Quarterly IntervalPlan 1 Retail Dividend 10 14,66,251 146.64 5,27,07,330 5270.75ING Liquid Plus Fund-Institutional-Daily Dividend 10 15,15,608 151.61 4,31,56,766 4317.10JP Morgan India Liquid Fund - Dividend Plan-Reinvest - 2/7/2008-3/7/2008 10 4,69,70,055 4700.72 4,69,70,055 4700.72JP Morgan India Liquid Plus Fund - DividendPlan -Reinvest-3/7/2008 10 4,80,78,000 4812.08 4,80,78,000 4812.08Kotak Liquid (Institutional Premium) - Daily Dividend 10 2,04,48,311 2500.44 2,04,48,311 2500.44Kotak Flexi Debt Scheme - Daily Dividend 10 15,51,093 155.59 8,32,29,506 8348.83Kotak Flexi Debt Scheme Institutional - Daily Dividend 10 9,52,09,155 10273.84 9,52,09,155 10273.84Kotak Quarterly Interval Plan Series 6 - Dividend 10 14,31,308 143.18 5,18,19,711 5182.03Lotus India Liquid Plus Fund-Institutional-Daily Dividend 10 7,30,863 73.20 5,19,18,008 5199.95Principal Floating Rate Fund FMP - Instl. option- Daily Dividend 10 1,94,491 19.47 1,04,70,963 1048.38Reliance Liquidity Fund - Daily Dividend 10 5,60,29,681 9578.55 5,60,29,681 9578.55Reliance Liquidity Plus Fund -Institutional - Daily Dividend 1000 52,191 522.50 15,43,506 15454.80IDFC Floating Rate Fund-LT-Inst Plan B-Daily Div. 10 11,17,603 111.82 6,04,74,425 6049.04SBI Debt Fund Series - 90 Days-18-(27-Nov-07)-Dividend 10 34,89,253 350.06 34,89,253 350.06SBI-SHF-Liquid Plus-Institutional Plan-Daily Dividend 10 38,80,896 388.28 1,41,26,789 1413.39TATA Liquid Super High Investment Fund - Daily Dividend 1000 3,58,971 4000.80 3,58,971 4000.80TATA Floater Fund - Daily Dividend 10 24,74,65,597 24834.66 29,79,89,533 29905.04TATA Fixed Horizon Fund Series 17 Scheme D - Inst.Plan-Periodic Dividend 10 12,19,836 122.01 10,19,67,612 10196.81TATA Income Plus Fund Dividend 10 9,69,36,637 10178.94 9,69,36,637 10178.94Templeton Floating Rate Income Fund Long Term-SuperInstitutional-Daily Dividend 10 7,85,877 78.67 4,86,97,803 4874.45UTI Liquid Cash Plan Institutional - Daily Income Option- Re-investment 1000 1,47,164 1500.26 1,47,164 1500.26UTI Liquid Plus Fund Institutional Plan

(Daily Dividend Option) - Re-investment 1000 2,60,958 3070.68 153,501 1535.34


1 Standalone.p65 8/7/2009, 11:06 AM112

MAX INDIA LIMITED


17 As per information received from the suppliers, a few suppliers are identified as micro and small enterprises as defined under theMicro, Small and Medium Enterprises Development Act, 2006. During the year, there is no instance of late payment or overdue andremaining unpaid to these suppliers. Accordingly, no interest is paid or accrued and remaining unpaid to these suppliers.

18 Segment Reporting

(a) Business Segments

The Company has considered business segment as the primary segment for disclosure. The products/ services included in eachof the reported business segments are as follows:

• Speciality Plastic Products - The manufacturing facility located at Railmajra, Nawanshahr (Punjab), produces packagingfilms supported with polymers of propylene, leather finishing transfer foils and related products.

• Business Investments - The Company has business investments in companies operating in the areas of Life Insurance,Healthcare, Clinical Research and Healthcare Staffing businesses. These investments along with its treasury investmentshave been combined to form Business Investment Segments.

The above business segments have been identified considering:

(i) The nature of products and services(ii) The differing risks and returns(iii) Organisational structure of the group, and(iv) The internal financial reporting systems.

Segment Revenue consists of revenue from external customers only since there are no significant inter segment transfers.Segment Result is the difference of segment revenue and segment operating expenses.Unallocated Assets include assets pertaining to the corporate office such as loans, advance and deposits.Unallocated Liabilities include tax provisions and interest bearing loans not directly related to any business segment.Unallocated Expenses - Expenses incurred at corporate office relate to various business segments. As there is noreasonable basis of allocating this expenditure to various segments, the same are shown as unallocated reconcilingexpenses. Interest expense is not treated as part of a segment expense and is reflected as a separate line item, exceptinterest on loans allocated to business segment.

(b) Geographical SegmentsThe Company has considered geographical segment as secondary reporting segment for disclosure. For this purpose, therevenues are bifurcated based on location of customers in India and outside India (primarily Europe and North America).

Primary Segments (RS. LACS)

Particulars Specialty Plastic Business TotalProducts Investments

a) Segment Revenue from:Sales to External Customers 37003.51 - 37003.51

(30343.88) (-) (30343.88)Income from Investment Activities - 4708.91 4708.91

(-) (6907.01) (6907.01)Other Income 21.79 - 21.79

(251.83) (-) (251.83)Total Segment Revenue 37025.30 4708.91 41734.21

(30595.71) (6907.01) (37502.72)Interest Income 11.07

(10.95)Unallocated Income 247.19

(22.61)

Total Revenue 41992.47

(37536.28)


1 Standalone.p65 8/6/2009, 6:37 PM113

MAX INDIA LIMITED


b) Segment Results 4003.67 4708.91 8712.58

(3912.75) (6906.85) (10819.60)

Interest Income 11.07

(10.95)

Less:-

Unallocated Expenses 3795.26

(2839.55)

Interest Expense 1624.83

(1459.52)

Profit from Operations 3303.56

(6531.48)

Diminution in Value of Investments and 2262.17

Doubtful Advances (-)

Profit before Tax 1041.39

(6531.48)

Provision for Taxation (Includes Provision (1142.08)

for Deferred Tax Liabilities) (341.02)

Profit after Tax 2183.47

(6190.46)

c) Carrying Amount of Segment Assets 28929.50 174034.34 202963.84

(26959.19) (210916.59) (237875.78)

Unallocated Assets 17559.27

(2198.99)

Total Assets 220523.11

(240074.77)

d) Segment Liabilities 2890.94 17.06 2908.00

(3175.14) (-) (3175.14)

Unallocated Liabilities 11379.73

(32521.35)

Total Liabilities 14287.73

(35696.49)

e) Cost to Acquire Tangible and Intangible Fixed Assets 1199.96 - 1199.96

(1745.54) (-) (1745.54)

Unallocated 94.71

(107.35)

Total Addition 1294.67

(1852.89)

f) Depreciation and Amortisation Expense 1134.15 - 1134.15

(1056.15) (-) (1056.15)

Unallocated Depreciation and Amortization 71.84

(83.08)

Total Depreciation and Amortization 1205.99

(1139.23)

Primary Segments (Rs. Lacs)

Particulars Specialty Plastic Business Total

Products Investments


1 Standalone.p65 8/6/2009, 6:37 PM114

MAX INDIA LIMITED


g) Non-cash Expenses Other than Depreciation 152.64 2219.07 2371.71

and Amortization (32.74) (0.16) (32.90)

Unallocated Non cash Expenses 40.37

(11.26)

Total 2412.08

(44.16)

Secondary Segments (RS. LACS)

Particulars India Outside India Total

a) Revenue from External Customers 34817.66 6916.55 41734.21

(30971.59) (6531.13) (37502.72)

b) Carrying Amount of Segment

Assets by Location of Assets 197446.61 5517.23 202963.84

(231286.50) (6589.28) (237875.78)

c) Cost to Acquire Tangible and Intangible

Fixed Assets by Location of Assets 1199.96 - 1199.96

(1745.54) (-) (1745.54)

Note: Figures in brackets are for previous year.

19 Related Parties (as identified by the management) are classified as:

Subsidiaries Max New York Life Insurance Company Ltd., Max Ateev Ltd., Neeman Medical International BV, Neeman

Medical International NV, Max Neeman Medical International Inc., USA, Max Medical Services Ltd., Max

Healthcare Institute Ltd., Alps Hospital Ltd., Max UK Ltd., Pharmax Corporation Ltd., Max Neeman Medical

International Ltd., Max HealthStaff International Ltd.

Key Management Mr. Analjit Singh, Mr. B Anantharaman (till June 30, 2008)

Personnel (Directors)

Relatives of Key

Management Personnel Mr. Veer Singh

Liquid Investments & Trading Company, New Delhi House Services Ltd., Medicare Investments Ltd.,

Maxopp Investments Ltd., Cheminvest Ltd., Pivet Finances Ltd., Lakeview Enterprises, Delhi Guest House

Pvt Ltd., Trophy Holdings Pvt. Ltd., M.V. Healthcare Services Pvt. Ltd., ND Callus Info Services Pvt. Ltd.,

Boom Investments Pvt. Ltd., Malsi Holdings Ltd., Dynavest India Pvt. Ltd., Scorpio Beverages Pvt. Ltd.,

Trophy Guest Houses & Resorts Pvt. Ltd., Trophy Estates Pvt. Ltd., Gaylord Impex Ltd., Pen Investments

Ltd., Mohair Investment, PVT Investment Ltd., Malsi Estates Ltd, TVP Investments Pvt. Ltd., BAS Investments

Pvt. Ltd., Vitasta Estate Pvt. Ltd., Terra Planet Estate Pvt. Ltd., Doon Holiday Resorts Pvt. Ltd., Urban Space

Consultants Pvt. Ltd., Max India Foundation, Capricorn Health Services Private Ltd., Leo Retailing and

Health Services Private Ltd., Nurture Health Services Pvt. Ltd., Capricorn Retailing and Services Pvt. Ltd.,

Veer Health Services Pvt. Ltd., Wegmans Business Park Pvt. Ltd., Synergy Infracon Pvt. Ltd., Max Speciality

Products Ltd., Max Bupa Health Insurance Ltd. (Effective September 5, 2008), Malsi Hotels Ltd. (Effective

March 20, 2009), Bhai Mohan Singh Foundation

Employee benefit funds Max India Ltd. Employees' Provident Fund Trust, Max India Ltd. Superannuation Fund

Primary Segments (RS. LACS)

Particulars Specialty Plastic Business Total

Products Investments


Enterprises over which

Key Management

Personnel have

Significant Influence

1 Standalone.p65 8/6/2009, 6:37 PM115

MAX INDIA LIMITED


Summary of significant related party transactions (as identified by the management) carried out in ordinary course of business

are as follows:

Particulars Subsidiaries Key Relatives of Enterprises EmployeeManagement Key Over which Benefit

Personnel Management Key FundsPersonnel Management

Personnelhave

SignificantInfluence

1 Fixed Assets Transferred - - - - -(-) (-) (-) (16.75) (-)

2 Fixed Assets Purchased 45.54 - - 6.32 -(-) (-) (-) (-) (-)

3 Deposits and Advances given 62.77 - - - -(-) (387.87) (-) (-) (-)

4 Loans Given 5928.50 - - - -(704.53) (-) (-) (-) (-)

5 Income and Reimbursement- Interest Income 287.15 - - - -

(26.85) (-) (-) (-) (-)- Reimbursement of Expenses 381.51 - - 236.79 -

(392.72) (-) (-) (14.74) (-)6 Expense

- Services / Other Expenses Received 444.74 - 9.08 235.46 -(311.68) (-) (9.08) (271.87) (-)

- Directors' Remuneration - 1295.90* - - -(-) (481.57) (-) (-) (-)

- Company's Contribution to Trust - - - - 115.85(-) (-) (-) (-) (97.55)

7 Investments- Made 55500.00 - - - -

(22200.00) (-) (-) (-) (-)- Advance against Equity - - - 800.00 -

(-) (-) (-) (-) (-)8 Amount outstanding

- Corporate Guarantee 24000.00 - - - -(24000.00) (-) (-) (-) (-)

- Against Loan Given 4514.40 - - - -(3320.98) (-) (-) (-) (-)

- Interest Receivable 49.54 - - - -(-) (-) (-) (-) (-)

- Other Receivable 1458.55 - - 204.73 -(1116.91) (622.36) (-) (1.21) (-)

- Other Payable 17.06 - - 9.33 -

(-) (-) (-) (12.05) (-)

Other relevant information -

i) The above excludes sitting fees Rs. 16.44 Lacs (Previous year Rs. 8.90 Lacs) paid to non-executive directors.

ii) Figures in brackets are for previous year.

* Refer note B11 above.


1 Standalone.p65 8/6/2009, 6:37 PM116

MAX INDIA LIMITED


20 Leases

Accounting for leases has been done in accordance with Accounting Standard-19 issued by the ICAI. Following are the details of

lease transactions for the year:

(a) Finance Lease

The Company does not have any finance lease arrangement.

(b) Operating Lease

(i) Lease rentals recognised in the profit and loss account for the year is Rs. 223.33 Lacs (Previous year Rs. 203.83 Lacs).

(ii) The Company has entered into operating leases for its office and for employees' residence that are renewable on a

periodic basis and cancellable at Company's option. The Company has not entered into sublease agreements in respect

of these leases. Further, the Company has not entered into any non-cancellable leases.

Additional information pursuant to the provisions of paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act,1956:

21 Details of Stock of Securities:

Equity Shares


Numbers Value (Rs. Lacs) Numbers Value (Rs. Lacs)

Opening Balance 8,27,166 - 8,27,466 0.16

Write Off - - 300 0.16

Closing Stock 8,27,166 - 8,27,166 -

22 A. (i) Installed Capacity and Actual Production

Product Unit Installed Capacity * Actual Production

(Annual)

BOPP Film Tonnes 29,150 28,504.10

(29,150) (24,051.81)

Soft Leather Finishing Foil Lacs (SFT) 555 84.97

(320) (164.49)

Figures in brackets are for Previous year

Notes:Licensed capacity is not applicable.

*Annual installed capacities are certified by the management.

(ii) Stock of Finished Goods

Opening Stock Closing Stock

Product Unit Quantity Value Quantity Value

(Rs. Lacs) (Rs. Lacs)

Manufactured

BOPP Film Tonnes 148.89 153.43 150.20 181.42

(25.59) (46.47) (148.89) (153.43)

Soft Leather Finishing Foil Lacs (SFT) 1.51 5.88 1.25 5.14

(0.89) (3.10) (1.51) (5.88)

Traded

Soft Leather Finishing Foil Lacs (SFT) 0.58 6.26 0.56 6.04

(0.61) (6.43) (0.58) (6.26)

Total 165.57 192.60

(56.00) (165.57)

Figures in brackets are for previous year


1 Standalone.p65 8/6/2009, 6:37 PM117

MAX INDIA LIMITED



(iii) Turnover

Product Unit Quantity Value

(Rs. Lacs)

a) Manufactured Goods

BOPP Film Tonnes 28,501.99 38432.22

(23,928.51) (30724.57)

Soft Leather Finishing Foil Lacs (SFT) 85.23 914.56

(163.87) (1574.38)

b) Traded Goods

Soft Leather Finishing Foil Lacs (SFT) 0.15 2.64

(0.03) (0.27)

Total 39349.42

(32299.22)

Figures in brackets are for previous year

(iv) Purchase of Finished Goods


Product Quantity Value Quantity Value


Soft Leather Finishing Foil Lacs (SFT) 0.13 1.50 - -

Total 0.13 1.50 - -

(v) Raw Materials Consumed


Product Quantity Value Quantity Value#


Polypropylene Tonnes 28,917.20 20074.88 25,840.77 16140.73

Polypropylene Compounds Tonnes 1,848.34 2131.77 1,739.37 1709.93

Others * - 1131.88 1267.16

Total 23338.53 19117.82

Note:

* It is not practicable to furnish quantitative information in view of large number of items, each being less than ten percent in value of total.

# Excludes Rs. 51.90 Lacs relating to consumption during trial run.

(vi) Consumption of Raw Materials, Stores and Spares


Materials Value % of Value % of

(Rs. Lacs) Consumption (Rs. Lacs) Consumption

Raw Materials

- Imported 4635.46 19.86 4427.41 23.16

- Indigenous 18703.07 80.14 14690.41 76.84

Total 23338.53 100.00 19117.82 100.00

Store and Spares

- Imported 157.74 33.57 116.63 30.17

- Indigenous 312.15 66.43 269.92 69.83

Total 469.89 100.00 386.55 100.00

1 Standalone.p65 8/6/2009, 6:37 PM118

MAX INDIA LIMITED



B. Value of Imports calculated on CIF Basis

(RS. LACS)


Raw Materials 5140.03 4094.02

Components and Spare Parts 264.29 240.60

Capital Goods 1075.09 811.72

Trading Goods 1.15 -

Total 6480.56 5146.34

C. Expenditure in Foreign Currency

(RS. LACS)


Legal and Professional 35.38 35.97

Commission 51.86 74.67

Technical - 4.96

Others 154.08 91.94

Total 241.32 207.54

D. Earnings in Foreign Currency

(RS. LACS)


Exports on FOB basis 6557.51 6273.69

Total 6557.51 6273.69

23 Auditors' Remuneration

(RS. LACS)


Audit fees (including service tax) 16.55 16.85

Out of pocket expenses 0.68 0.62

Total 17.23 17.47

24 Preferential / QIP Issue Proceeds

Details of additions:

(RS. LACS)


Opening Balance 75730.39 -

Addition:

On allotment of shares to QIBs - 99999.98

Total 75730.39 99999.98

Utilizations:

Investment in subsidiary company 55500.00 22200.00

Advance against Investment in subsidiary company 800.00 -

Refund of Option Deposit to New York Life International 17420.55 -

Share issue expenses - 2069.59

Total 73720.55 24269.59

Balance invested in units of mutual fund 2009.84 75730.39

1 Standalone.p65 8/6/2009, 6:37 PM119

MAX INDIA LIMITED


25 Securities Premium Account

(i) Details of additions:

(RS. LACS)


1. On allotment of shares to QIBs (Refer note 6 above) - 99166.65

2. Exercise of Stock Option 414.46 249.55

Total 414.46 99416.20

(ii) Details of utilization:

(RS. LACS)


1. Expenses on issuance of shares to QIBs - 2069.59

26 During the year, Rs. 16.51 Lacs (Previous year Rs. 14.13 Lacs) has been charged to the profit and loss account relating to Research

and Development expenditure under the heads Raw Material - Consumed and Power & Fuel.

27 During the year, the Company shared the services of some of its employees and facilities with group companies. Consequently, the

share of costs attributable to these companies has been charged out to the relevant group company.

28 On September 03, 2008, the Company signed a tripartite JVA with BUPA Finance Plc., UK and Mr. Analjit Singh for its proposed

health insurance business. Subsequently, Max Bupa Health Insurance Limited ("MBHIL") has been incorporated on September 5,

2008 to operate the said business. In line with the guidelines issued by Insurance Regulatory and Development Authority, the initial

share capital of MBHIL will be Rs.100 Crore. This will be contributed 50% by the Company, 24% by Mr. Analjit Singh and his

associates and 26% by BUPA Finance Plc., UK through its Indian subsidiary and other entities.

On January 13, 2009, the Company has contributed share application money amounting to Rs. 800.00 Lacs to MBHIL. Also, during

the year, the Company incurred expenses amounting to Rs. 185.16 Lacs on behalf of MBHIL which are recoverable in terms of the

aforesaid JVA.

Consequently, the Board of Directors in their meeting held on June 26, 2009 have decided to invest upto 74% of equity shareholding

of MBHIL, subject to shareholder's approval.

29 During the year, a Memorandum of Understanding (MOU) dated November 12, 2008 has been entered into amongst Government of

Punjab ("GOP"), Max India Group and Others ("the Founder Supporters"), together with Indian School of Business, Hyderabad

("ISB"). As per the MOU, a second campus of ISB is purposed to be established in the Knowledge city at Mohali, with an equal

contribution from each of the Founder Supporters. The Board of Directors has recommended a contribution for an amount not

exceeding Rs. 1666.67 Lacs from the Company to this initiative over a period of 3-4 years, subject to the shareholders approval, out

of the total commitment of Rs. 5000.00 Lacs from Max India Group. Of the above, a sum of Rs. 130.00 Lacs has been contributed

by the Company during the year and included under the head Charity and Donation.

30 During the previous year, the Company received Rs. 50 Lacs as capital subsidy from the Director of Industries, Government of

Punjab under "Punjab Industrial Incentives Code under the Industrial Policy, 1996" for substantial expansion during financial year

1996-97. The same has been accounted for as capital reserve.

31 Subsequent to the year end, the Board of Directors in their meeting held on May 15, 2009, approved the issuance of 10,326,311

equity shares of Rs 2/- each at a premium of Rs 143.26 per equity share, aggregating to Rs. 15000.00 Lacs to International Finance

Corporation, Washington USA on a preferential basis. The same has been approved by the shareholders in an Extra-ordinary General

Meeting held on Friday, June 12, 2009.

Consequently, the Company in the meeting of Allotment Committee of Directors held on June 19, 2009 allotted the said shares.


1 Standalone.p65 8/6/2009, 6:37 PM120

MAX INDIA LIMITED


32 The Company invested Rs. 447.87 Lacs in the form of 39,45,000 equity shares of Rs. 10/- each and extended loans of Rs. 1814.29

Lacs to its wholly owned subsidiary Max HealthStaff International Limited (MHS) till March 31, 2009. MHS is in the business of

sourcing, training and placing healthcare personnel in India and abroad more particularly in the United States. The placement of

healthcare personnel in United States is subject to availability of immigrant visas, which is currently unavailable given the visa

retrogression in force. Consequently, MHS has considerably scaled down its operations till the time further clarity on immigration

laws emerges. Accordingly, based on prudent accounting practices, the management has decided to provide for diminution in the

value of investments and loans given to MHS.

33 Previous year’s figures have been regrouped / reclassified wherever necessary to conform to current year's classification.

For and on behalf of the Board of Director

ANALJIT SINGH Chairman & Managing DirectorN. RANGACHARY DirectorASHWANI WINDLASS Director

New Delhi SUJATHA RATNAM Chief Financial ControllerJUNE 26, 2009 V. KRISHNAN Company Secretary


1 Standalone.p65 8/6/2009, 6:37 PM121

MAX INDIA LIMITED


Balance Sheet Abstract and company’s general business profile

I REGISTRATION DETAILS :

Registration No. 0 8 0 3 1 State Code 1 6

Balance Sheet Date 3 1 0 3 2 0 0 9

Date Month Year

II CAPITAL RAISED DURING THE YEAR (Amount in Rs. Thousand)

Public Issue Rights Issue

N I L N I L

Bonus Issue Others

N I L 5 7 6

III POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs. Thousand)Total Liabilities Total Assets

2 1 6 3 7 6 7 4 2 1 6 3 7 6 7 4

SOURCES OF FUNDPaid-up Capital Reserve and Surplus

4 4 4 0 6 1 2 0 1 7 9 4 7 7

Secured Loans Unsecured Loans

1 0 0 5 8 7 5 8 2 6 1

Deferred Tax Liability (Net)

N I L

APPLICATION OF FUNDSNet Fixed Assets Investments

1 9 9 8 7 3 8 1 6 9 0 3 0 4 6

Net Current assets Misc. Expenditure

2 7 2 9 8 8 7 6 0 0 3

Accumulated Losses

N I L

IV PERFORMANCE OF COMPANY (Amount in Rs. Thousand)Turnover (Total Income) Total Expenditure

4 1 9 7 3 6 0 4 0 9 3 2 2 1

+ - Profit before Tax + - Profit after Tax

1 0 4 1 3 9 2 1 8 3 4 7

+ - Basic Earning per Share in Rs. Dividend Rate (%)

0 . 9 8 N I L

+ - Diluted Earning per Share in Rs.

0 . 9 8

V NAME OF THREE PRINCIPAL PRODUCTS/SERVICE OF COMPANY

Item Code No. (ITC code) 3 9 2 0 . 2 0

Product Description F I L M S S U P P O R T E D

W I T H P O L Y M E R S

O F P R O P Y L E N E

√

√

√

√

1 Standalone.p65 8/7/2009, 9:50 AM122

MAX INDIA LIMITED


AS REQUIRED UNDER CLAUSE 32 OF THE LISTING AGREEMENT

FOR THE FINANCIAL YEAR ENDED MARCH 31, 2009

(RS. LACS)

S.N. Name Amount Outstanding

As of Maximum amount

March 31, 2009 during the year

I. Loans and advances in the nature of loans

A. To Subsidiaries

A.1 Max Ateev Ltd. 674.06 676.62

A.2 Pharmax Corporation Ltd. 1138.00 5558.00

A.3 Max HealthStaff International Ltd. 1814.29 1820.53

A.4 Max Neeman Medical International Ltd. 888.06 888.06

B. To Associates Nil Nil

C. Where there is no repayment schedule or repayment beyond seven years Nil Nil

D Where there is no interest or interest below Section 372A of Companies Act Nil Nil

E To firms/Companies in which directors are interested Nil Nil

II. Investments by the loanee in the shares of parent company and subsidiary

company when the company has made loan or advance in the nature of loan Nil Nil

Disclosure of Loans/Advances and Investments

1 Standalone.p65 8/7/2009, 9:50 AM123

MAX INDIA LIMITED


STA

TEM

EN

T REG

ARDIN

G S

UBSID

IARY C

OM

PA

NIE

S P

URSU

AN

T TO

SECTI

ON

212(3

) A

ND 2

12(5

) O

F T

HE C

OM

PA

NIE

S A

CT,

1956

Nam

e of

the

Subs

idia

ry C

ompa

ny

Finan

cial

Yea

rH

oldi

ng

Com

pany’

s in

tere

st a

s at

clo

se o

fN

et a

ggre

gate

am

ount

ofN

et a

ggre

gate

am

ount

of

Holdi

ngto

whic

hFi

nan

cial

Yea

r of

Subs

idia

ry C

ompa

ny

Subs

idia

ry C

ompa

ny’

s pr

ofit

sSu

bsid

iary

Com

pany’

s pr

ofit

sCo

mpa

ny’s

Acc

ounts

afte

r de

duct

ing

its

loss

es o

r vi

ce-

afte

r de

duct

ing

its

loss

es o

rin

tere

st a

s at

rela

teve

rsa,

so

far

as it

conce

rns

vice

-ver

sa, s

o fa

r as

it

31.0

3.2

009

Mem

bers

of

Hol

ding

Com

pany

conce

rns

Mem

bers

of

Hol

ding

inco

rpor

atin

g

whic

h a

re n

ot d

ealt

wit

hin

the

Com

pany

whic

h a

re d

ealt

chan

ges

since

Com

pany’

s A

ccou

nt

wit

hin

the

Com

pany’

s A

ccou

nt

clos

e of

i) S

har

ehol

ding

ii) E

xten

t of

For

the

For

the

For

the

For

the

Finan

cial

Hol

ding

Curr

ent

Prev

ious

Curr

ent

Prev

ious

Yea

r/Pe

riod

of

Finan

cial

Yea

rFi

nan

cial

Yea

rFi

nan

cial

Yea

rFi

nan

cial

Yea

rSu

bsid

iary

(Rs.

Lac

s)(R

s. L

acs)

(Rs.

Lac

s)(R

s. L

acs)

Com

pany

Dom

est

ic:

Max

New

Yor

k Li

fe I

nsu

rance

Com

pany

Ltd.

31.0

3.2

009

131,3

5,0

0,0

14 E

quit

y Sh

ares

of

Rs.

10 e

ach

73.6

9%

(28961.3

2)

(44931.6

6)

NIL

NIL

Not

App

licab

le

Max

Hea

lthca

re I

nst

itute

Ltd

.31.0

3.2

009

16,6

1,0

0,0

00 E

quit

y Sh

ares

of

Rs.

10 e

ach

70.0

4%

3334.7

0(1

0857.3

9)

NIL

NIL

Not

App

licab

le

Max

Med

ical

Ser

vice

s Lt

d. (

Not

e 1)

31.0

3.2

009

1,4

1,4

2,5

35 E

quit

y Sh

ares

of

Rs.

10 e

ach

70.0

4%

175.0

8(6

30.8

1)

NIL

NIL

Not

App

licab

le

Alp

s H

ospi

tal Lt

d. (

Not

e 2)

31.0

3.2

009

50,0

00 E

quit

y Sh

ares

of

Rs.

10 e

ach

70.0

4%

(398.4

8)

(449.9

5)

NIL

NIL

Not

App

licab

le

Max

Nee

man

Med

ical

Inte

rnat

ional

Ltd

.31.0

3.2

009

41,6

6,8

13 E

quit

y Sh

ares

of

Rs.

10 e

ach

100.0

0%

121.9

8(7

30.2

0)

NIL

NIL

Not

App

licab

le

Phar

max

Cor

pora

tion

Ltd

.31.0

3.2

009

4,7

1,1

7,2

47 E

quit

y Sh

ares

of

Re.

1 e

ach

85.2

0%

156.0

9(7

71.1

5)

NIL

NIL

Not

App

licab

le

Max

Ate

ev L

td.

31.0

3.2

009

3,1

4,4

3,6

00 E

quit

y Sh

ares

of

Rs.

10 e

ach

100.0

0%

(3.3

2)

(3801.4

8)

NIL

NIL

Not

App

licab

le

Max

Hea

lthst

aff

Inte

rnat

ional

Ltd

.31.0

3.2

009

3,9

45,0

00 E

quit

y Sh

ares

of

Rs.

10 e

ach

100.0

0%

(270.4

9)

(1892.2

6)

NIL

NIL

Not

App

licab

le

Overs

eas:

Nee

man

Med

ical

Inte

rnat

ional

B.V

.31.0

3.2

009

38 O

rdin

ary

Shar

es o

f Eu

ro 5

00 e

ach

100.0

0%

(11.3

6)

(5393.9

7)

NIL

NIL

Not

App

licab

le

Nee

man

Med

ical

Inte

rnat

ional

N.V

. (N

ote

3)

31.0

3.2

009

125 O

rdin

ary

Shar

es o

f Eu

ro 5

00 e

ach

100.0

0%

5.1

8(8

626.8

0)

NIL

NIL

Not

App

licab

le

Max

Nee

man

Med

ical

Inte

rnat

ional

Inc.

, USA

(N

ote

4)

31.0

3.2

009

325 S

har

es (

Not

e 5)

100.0

0%

(4.0

4)

(3670.4

5)

NIL

NIL

Not

App

licab

le

Max

UK L

td.,

UK

31.0

3.2

009

2,9

9,7

42 O

rdin

ary

Shar

es o

f G

BP

1 e

ach

100.0

0%

3.3

6(1

45.5

2)

NIL

NIL

Not

App

licab

le

Not

es:

1.

Hel

d th

rough

Max

Hea

lthca

re I

nst

itute

Ltd

.

2.

Hel

d th

rough

Max

Med

ical

Ser

vice

s Lt

d.

3.

Hel

d th

rough

Nee

man

Med

ical

Inte

rnat

ional

B.V

., N

ether

lands

4.

Hel

d th

rough

Nee

man

Med

ical

Inte

rnat

ional

N.V

., N

ether

lands

5.

Paid

val

ue

of 3

25 s

har

es is

US$

750,0

00 e

quiv

alen

t R

s. 3

66.0

8 L

acs.

6.

Figu

res

in b

rack

ets

indi

cate

los

s.

For

and

on b

ehal

f of

the

Boa

rd o

f D

irec

tors

New

Del

hi

AN

ALJI

T S

ING

H

JULY 3

0, 2009

Chai

rman

& M

anag

ing

Dir

ecto

r

1 Standalone.p65 8/7/2009, 9:51 AM124

MAX INDIA LIMITEDMAX INDIA LIMITEDCONSOLIDATEDCONSOLIDATED

STATEMENT OF ACCOUNTSSTATEMENT OF ACCOUNTS

MAX INDIA LIMITED

CONSOLIDATED STATEMENT OF ACCOUNTS


TO THE BOARD OF DIRECTORS OF MAX INDIA LIMITED

1. We have audited the attached Consolidated Balance Sheet of

Max India Limited and its subsidiaries as at March 31, 2009,

the Consolidated Profit and Loss Account for the year ended

on that date annexed thereto, and the Consolidated Cash Flow

Statement for the year ended on that date, which we have

signed under reference to this report. These consolidated

financial statements are the responsibility of the Company’s

management. Our responsibility is to express an opinion on

these consolidated financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards

generally accepted in India. Those Standards require that we

plan and perform the audit to obtain reasonable assurance

about whether the financial statements are prepared, in all

material respects, in accordance with an identified financial

reporting framework and are free of material misstatement.

An audit includes examining, on a test basis, evidence

supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the accounting

principles used and significant estimates made by

management, as well as evaluating the overall financial

statement presentation. We believe that our audit provides a

reasonable basis for our opinion.

3. We did not audit the financial statements of certain

subsidiaries, whose financial statements reflect total assets

of Rs. 41.0 crores as at March 31, 2009 and total revenues of

Rs. 9.4 crores for the year ended on that date. These financial

statements have been audited by other auditors whose reports

have been furnished to us, and our opinion, insofar as it relates

to the amounts included in respect of these subsidiaries, is

based solely on the report of the other auditors.

4. We report that the consolidated financial statements have

been prepared by the company in accordance with the

requirements of Accounting Standard 21, Consolidated

Financial Statements, issued by the Institute of Chartered

Accountants of India and on the basis of the separate audited

financial statements of Max India Limited and its subsidiaries

included in the consolidated financial statements.

5. On the basis of the information and explanations given to us

and on consideration of the separate audit reports on individual

audited financial statements of Max India Limited and its

aforesaid subsidiaries, in our opinion, the consolidated financial

statements give a true and fair view in conformity with the

accounting principles generally accepted in India:

(a) in the case of the Consolidated Balance Sheet, of the

consolidated state of affairs of Max India Limited and its

subsidiaries as at March 31, 2009;

(b) in the case of the Consolidated Profit and Loss Account,

of the consolidated results of operations of Max India

Limited and its subsidiaries for the year ended on that

date; and

(c) in the case of the Consolidated Cash Flow Statement, of

the consolidated cash flows of Max India Limited and its

subsidiaries for the year ended on that date.

V. NIHAWAN

Partner

Membership Number F 87228

For and on behalf of

Gurgaon Price Waterhouse

JUNE 26, 2009 Chartered Accountants

Auditors’ Report

2 Consolidated.p65 8/6/2009, 6:37 PM127

MAX INDIA LIMITED



(RS. LACS)

Schedule As at As atMarch 31, 2009 March 31, 2008

SOURCES OF FUNDSSHAREHOLDERS’ FUNDSShare Capital 1 4440.61 4434.85Reserves and Surplus 2 146677.08 149940.49

151117.69 154375.34Preference Shares 3 25000.00 25000.00LOAN FUNDSSecured Loans 4 34415.38 37480.31Unsecured Loans 5- Loans 326.56 289.24- Advances from Others - 17420.55

34741.94 55190.10

Deferred Tax Liability (Net) 6 20.07 3421.71Policyholders’ Liabilities 498538.50 322742.74Funds for Future Appropriations - Participating Policies 1694.32 4335.11Minority Interest (Refer Note B3 on Schedule 26) 27637.93 17263.31

738750.45 582328.31

APPLICATION OF FUNDSFIXED ASSETS 7Gross Block 121743.06 91717.81Less: Depreciation 33623.31 24457.76

Net Block 88119.75 67260.05Capital Work in Progress 4910.38 4562.56

93030.13 71822.61

INVESTMENTS 8 563788.84 484027.82

CURRENT ASSETS, LOANS AND ADVANCESInventories 9 4063.23 3866.45Sundry Debtors 10 27347.75 24119.94Cash and Bank Balances 11 22836.87 3197.56Other Current Assets 12 6816.14 4750.44Loans and Advances 13 71221.65 52458.30

132285.64 88392.69Less: CURRENT LIABILITIES AND PROVISIONSCurrent Liabilities 14 67954.27 61669.79Provisions 15 2273.50 890.85

70227.77 62560.64

NET CURRENT ASSETS 62057.87 25832.05

MISCELLANEOUS EXPENDITURE 16 385.24 645.83(To the extent not written off or adjusted)

Profit and Loss Account 19488.37 -

738750.45 582328.31


Consolidated Balance Sheet as at March 31, 2009

The Schedules referred to above form an integral part of the Balance Sheet For and on behalf of the Board of Directors

This is the Balance Sheet referred to in our report of even date





MAX INDIA LIMITED



Consolidated Profit and Loss Account for the year ended March 31, 2009

(RS. LACS)


INCOMESales 44134.41 36054.34Less: Sales Returns (367.72) (398.81)

Excise Duty (3606.19) (3470.99)

40160.50 32184.54Service Income 17 410606.87 292220.03Income from Investment Activities 18 33024.49 32492.84Other Income 19 5352.28 4157.38

489144.14 361054.79INCREASE / (DECREASE) IN INVENTORY 20 (18.87) 503.49

489125.27 361558.28

EXPENDITUREManufacturing, Trading and Direct Expenses 21 341493.83 269077.14Personnel Expenses 22 84375.93 45483.79General and Administration Expenses 23 84198.22 39938.56Financial Expenses 24 5057.40 4731.04Depreciation 7 9700.92 6634.09

524826.30 365864.62

(LOSS) BEFORE TAX (35701.03) (4306.34)Tax Expense 25 (2383.56) 1672.13

(LOSS) AFTER TAX (33317.47) (5978.47)Funds for Future Appropriations - Participating Policies 2640.79 (3709.44)Minority Interest 8838.07 4798.19

NET (LOSS) (21838.61) (4889.72)PROFIT BROUGHT FORWARD 3038.36 7928.08

PROFIT/(LOSS) AVAILABLE FOR APPROPRIATION (18800.25) 3038.36APPROPRIATIONS(Refer Notes B3 & B11 on Schedule 26)

Dividend on Preference Shares (839.73) -Corporate Dividend Tax (142.71) -

(982.44)Share of Minority Interest 294.32 (688.12) -

PROFIT/(LOSS) CARRIED FORWARD TO THE BALANCE SHEET (19488.37) 3038.36

Earnings Per Share (Rs. per equity share of Rs. 2/- each)(Refer Note B16 on Schedule 26)

Basic (10.15) (2.29)Diluted (10.15) (2.29)Number of Shares used in computing earnings per shareBasic 221,998,514 213,118,796Diluted 222,122,712 213,772,230


The Schedules referred to above form an integral part of the For and on behalf of the Board of DirectorsProfit and Loss Account

This is the Profit and Loss Account referred to in our report of even date





MAX INDIA LIMITED



Consolidated Cash Flow Statement for the year ended March 31, 2009

(RS. LACS)


A. CASH FLOW FROM OPERATING ACTIVITIES:NET PROFIT/(LOSS) BEFORE TAX (35701.03) (4306.34)

Adjustments for:Depreciation 9700.92 6634.09Interest Expense 3975.93 4158.93Interest Income (24481.06) (14211.93)Amortisation of Discount/(Premium) on Non Trade Investments (1232.09) (57.72)Dividend Income from Non Trade Investments (5284.92) (6974.16)Net (Profit) / Loss on Sale of Fixed Assets 85.52 188.14Net (Profit) / Loss on Sale of Investments 27435.00 (9407.67)Unrealised (Gain)/Loss on Investments 14410.79 (1736.42)Amortisation of Miscellaneous Expenditure 0.59 19.50Fixed Assets and Spares Written off 14.77 53.46Debts and Debit Balances Written Off 8.63 4.45Provision for Doubtful Debts and Advances 591.22 274.43Goodwill Written off 403.63 -Liability/ Provisions No Longer Required Written Back (453.81) (178.25)Provision for Diminution in Value of Investment - Long Term 422.49 51.38ESOP Lapsed Written Back (180.82) -TDS on Service and Other Income (275.41) (333.31)Other Provisions 67.35 10.29ESOP Compensation Expense 238.39 433.17Change in Policyholder Reserves 175795.76 166033.55

Operating Profit Before Working Capital Changes 165541.85 140655.59

Adjustments for:Trade and Other Receivables (21740.46) (18254.03)Inventories (196.78) (1675.62)Trade and Other Payables 8918.63 20096.16Provisions for Retirement Benefits 400.20 151.62

Cash Generated From Operations 152923.44 140973.72

Direct Taxes Refunded / (Paid) (Net) (512.55) (953.64)

Cash From / (Used in) Operating Activities 152410.89 140020.08

B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed Assets (30113.73) (18806.62)Sale of Fixed Assets 209.53 124.30Investments Made (Others) (1586529.64) (1141812.30)Sale of Investments 1463870.64 868659.14Interest Received 23899.88 12440.15Dividend Received on Non Trade Investments 3922.95 6733.41Proceeds from Sale of Business - 105.10Other Loans (3131.60) (898.12)Cash and Cash Equivalents Released on De-Subsidiarisation - (0.26)

Cash From / (Used In) Investing Activities (127871.97) (273455.20)


MAX INDIA LIMITED



(RS. LACS)


C. CASH FLOW FROM FINANCING ACTIVITIESIssue of Shares to QIBs - 99999.98Increase in Share Capital (Minority Share in Subsidiaries) 19505.00 12800.00Issue of Preference Shares - 25000.00(by Max Healthcare Institute Limited, a Subsidiary Company)ESOPs Exercised 5.76 3.48Capital Subsidy Received - 50.00Shares Issue Expenses - (2164.20)Proceeds from Long Term Loans 70.96 1771.01Repayment of Long Term Loans (3453.69) (1878.02)Proceeds/(Repayment) of Short Term Borrowings (Net) 355.10 (570.67)Refund of Other Advances (17420.55) -Interest Paid (3999.71) (4194.97)

Cash From / (Used In) Financing Activities (4937.13) 130816.61

Net Increase / (Decrease) in Cash and Cash Equivalents 19601.79 (2618.51)

Impact of Foreign Exchange Fluctuations 37.52 (7.80)Cash and Cash Equivalents - Opening Balance 3197.56 5823.87

Cash and Cash Equivalents - Closing Balance 22836.87 3197.56

Notes1 The above Cash Flow Statement has been prepared under the “Indirect Method” as set out in the Accounting Standard-3 on Cash

Flow Statements issued by the Institute of Chartered Accountants of India.2 Cash and Cash Equivalents at the end of the year consist of Cash, Cheques in Hand and Balances with Banks:

(RS. LACS)


Cash in Hand 708.54 34.70Stamps in Hand 19.18 0.20Cheques in Hand 106.07 44.32Fixed Deposits* 6553.28 36.60Remittance in Transit 7128.88 -Balances with Banks ** 8320.92 3081.74

Total 22836.87 3197.56

* held under lien by various authorities Rs. 38.28 Lacs (Previous year Rs. 35.60 Lacs)** Includes Rs. 12.82 Lacs (Previous year Rs. 23.89 Lacs) not available for use by the Company.

3 Previous year’s figures have been regrouped wherever necessary to conform to current years’ classification.


The Schedules referred to above form an integral part of the For and on behalf of the Board of DirectorsCash Flow Statement

This is the Cash Flow Statement referred to in our report of even date





MAX INDIA LIMITED



Schedules annexed to and forming part of the consolidated accounts

(RS. LACS)


SCHEDULE-1SHARE CAPITALAUTHORISED46,00,00,000 Equity Shares of Rs. 2/- each 9200.00 9200.00(Previous year 46,00,00,000 Equity Shares of Rs. 2/- each)8,00,000 Preference Shares of Rs. 100/- each 800.00 800.00(Previous year 8,00,000 Preference Shares of Rs. 100/- each)

10000.00 10000.00ISSUED, SUBSCRIBED AND PAID UP(Refer Notes A10, B9 and B13 on Schedule 26)

22,20,30,310 Equity Shares of Rs. 2/- each fully paid up(Previous year 22,17,42,545 Equity Shares of Rs. 2/- each fully paid up) 4440.61 4434.85

4440.61 4434.85Paid up Share Capital includes:

- 5,76,60,400 Equity Shares of Rs. 2/- each (Previous year 5,76,60,400 Equity Shares of Rs. 2/- each)

allotted as fully paid up by way of bonus shares out of Securities Premium Account; and

- 14,49,925 Equity Shares of Rs. 2/- each (Previous year 11,62,160 Equity Shares of Rs. 2/- each)

allotted under employees stock option plan

SCHEDULE-2RESERVES AND SURPLUS(Refer Notes A9, A10, B2, B9, B11, B13, B18, B27, B29 and B33 on Schedule 26)

Capital Reserve

Opening Balance 50.39 0.39Additions during the year - 50.00


Securities Premium AccountOpening Balance 137570.55 37693.49Additions during the year 414.46 102012.93Deletions/utilisations during the year 2.01 2135.87


Employee Stock Option OutstandingOpening Balance 1567.48 1869.53Additions during the year 245.59 -Deletions/utilisations during the year 862.48 302.05


Revaluation ReserveOpening Balance - 117.21Deletions/utilisations during the year - 117.21

Closing Balance - -

Foreign Currency Translation ReserveOpening Balance (177.98) (18.06)Additions during the year - 582.29Deletions/utilisations during the year 20.61 742.21


General ReserveOpening Balance 7891.69 9072.97Deletions/utilisations during the year - 1181.28


Profit and Loss AccountOpening Balance 3038.36 7928.08Deletions/utilisations during the year 3038.36 4889.72

Closing Balance - 3038.36

146677.08 149940.49


MAX INDIA LIMITED



(RS. LACS)


SCHEDULE-3PREFERENCE SHARES(Refer Notes B4 and B11 on Schedule 26)

250,000,000 (Previous year 250,000,000), 2% CumulativePartially Convertible Preference Shares of Rs.10/- each 25000.00 25000.00(issued by Max Healthcare Institute Limited, a Subsidiary Company)

25000.00 25000.00

SCHEDULE-4SECURED LOANS(Refer Note B8 on Schedule 26)

Loans and Advances from BanksTerm Loan 8076.60 10445.65Fund Based Working Capital Facilities 3842.98 3473.56

Term Loans from Financial Institutions 22495.80 23561.10

34415.38 37480.31

Amount repayable within one year Rs. 4793.40 Lacs (Previous year Rs. 4434.18 Lacs)

SCHEDULE-5UNSECURED LOANS

Short Term LoansFrom Others - 100.00

Other LoansFrom Banks 171.56 189.24From Others 155.00 -

326.56 289.24

Advances from Others - 17420.55(Refer Note B10 on Schedule 26)

326.56 17709.79

Amount repayable within one year Rs. 72.02 Lacs (Previous year Rs. 169.35 Lacs)

SCHEDULE-6DEFERRED TAX LIABILITY(Refer Notes A11 and B14 on Schedule 26)

Deferred Tax LiabilityOpening Balance 4388.26 3383.28Movement during the year (255.25) 1004.98


Deferred Tax AssetOpening Balance (966.55) (738.52)Impact of transitional liabililty on employee benefits - (53.99)Movement during the year (3146.39) (174.04)


Net Deferred Tax Liability 20.07 3421.71



MAX INDIA LIMITED




SCHEDULE-7

FIXED ASSETS(Refer Notes A4, A5, A6, A13, A15, B2, B5 and B36 on Schedule 26) (RS. LACS)

Gross Block Depreciation Net Block

Particulars As at Additions Deletions/ Translation As at As at For the Deletions/ Translation As at As at As at

April 1, Adjustments Reserve March 31, April 1, Year Adjustments Reserve March 31, March 31, March 31,

2008 2009 2008 2009 2009 2008

Tangible Assets

Land (Freehold) 83.46 127.26 - - 210.72 - - - - - 210.72 83.46

Land (Leasehold) 1741.92 4515.70 - - 6257.62 - - - - - 6257.62 1741.92

Building 12878.16 365.50 - - 13243.66 846.16 259.11 - - 1105.27 12138.39 12032.00

Leasehold Improvements 9956.54 11552.70 103.95 - 21405.29 4044.60 2132.80 60.02 - 6117.38 15287.91 5911.94

Plant and Machinery 36459.36 1217.88 13.54 - 37663.70 8212.87 2113.15 5.22 - 10320.80 27342.90 28246.49

Vehicles 1288.71 198.36 351.40 1.03 1136.70 482.61 155.46 240.50 0.53 398.10 738.60 806.10

Furniture, Fittings and

Equipments 16465.10 10630.28 324.17 8.91 26780.12 7634.51 3606.99 237.26 7.10 11011.34 15768.78 8830.59

Intangible Assets

Software 4599.23 2604.32 - - 7203.55 2440.17 1404.38 - - 3844.55 3359.00 2159.06

Goodwill* 7389.82 - 403.63 - 6986.19 - - - - - 6986.19 7389.82

Technical Know-how 855.51 - - - 855.51 796.84 29.03 - - 825.87 29.64 58.67

Total 91717.81 31212.00 1196.69 9.94 121743.06 24457.76 9700.92 543.00 7.63 33623.31 88119.75 67260.05

Previous year 78476.19 15220.79 1895.74 (83.43) 91717.81 18870.52 6634.09 1013.45 (33.40) 24457.76

Capital Work in Progress 4910.38 4562.56

93030.13 71822.61

* arising on consolidation

Notes:-

a) Additions include:

- Interest capitalised Nil (Previous year Rs. 32.73 Lacs).

- Pre-Operative expenses capitalised Rs. 26.64 Lacs (Previous year Rs. 185.94).

- Foreign Exchange Fluctuations Nil (Previous year Rs. 41.27 Lacs).

b) Plant and Machinery includes an amount of Rs. 135.08 Lacs (Previous year Rs. 135.08 Lacs) paid to PSEB for drawing a power line representing assets not owned by the

Company. The same has been depreciated over a period of five years.

c) Vehicles includes vehicles hypothecated amounting to Rs. 306.15 Lacs (Previous year Rs. 302.38 Lacs).

d) Capital work in progress includes:

- Capital Advances Rs. 1373.48 Lacs (Previous year Rs. 3712.21 Lacs)

- Pre-Operative expenses pending allocation and capitalisation Rs. 125.45 Lacs (Previous year Rs. 0.98 Lacs).

e) Leasehold Improvements represents civil and other improvements at Group’s leased premises.


MAX INDIA LIMITED



(RS. LACS)


SCHEDULE-8INVESTMENTS(Refer Notes A7, B1, B25 and B26 on Schedule 26)

Life Insurance Business:

a) Long Term-Non Trade, at cost(Quoted)Government Securities1 208170.77 114510.36Equity Shares2 142779.59 98284.55Bonds3 137888.58 93833.94Others - 132.05(Unquoted)Term Deposit 1113.54 3053.79

b) Current-Non Trade, at cost(Quoted)Government Securities 2731.98 1159.09Bonds 4099.42 10324.59(Unquoted)Units in Mutual Fund4 3600.00 12608.96Commercial Paper/Certificate of Deposit 25862.98 21167.82Term Deposit 14284.21 2413.23

540531.07 357488.38

Other Business:

a) Long Term-Trade, at cost(Unquoted)Equity Shares 455.75 400.75

b) Long Term-Non Trade, at cost(Quoted)Equity Shares 0.65 0.65

c) Current-Non Trade, at cost(Unquoted)Units in Mutual Fund- Unutilised monies raised through placement to QIBs 2009.84 75730.39- Unutilised monies raised through preferential issue 8355.81 19156.04- Others 12435.72 31251.61

23257.77 126539.44

563788.84 484027.82

Aggregate value of unquoted investments 68117.85 165782.59

Aggregate value of quoted investments 495670.99 318245.23

Market value of quoted investments 520684.99 333624.45

1 Includes Rs. 186278.37 Lacs (Previous year Rs. 101253.46 Lacs) earmarked for Life Insurance Policyholders

2 Net of credit in fair value change account amounting to Rs. (-) 78.49 Lacs (Previous year Rs. 856.04 Lacs)

3 Includes Rs. 129490.76 Lacs (Previous year Rs. 95214.43 Lacs) earmarked for Life Insurance Policyholders

4 Net of credit in fair value change account amounting to Nil (Previous year Rs. 69.41 Lacs)



MAX INDIA LIMITED




(RS. LACS)


SCHEDULE-9INVENTORIES(Refer Note A8 on Schedule 26)

Manufacturing ActivitiesRaw Materials in Stores/Transit 1577.01 1582.05Stores and Spares 455.41 388.03Work in Process 579.29 625.20Finished Goods 192.60 165.57Trading ActivitiesStock-in-trade 1258.62 1105.60Construction ActivitiesWork in Process 0.30 -

4063.23 3866.45

SCHEDULE-10SUNDRY DEBTORS

(Unsecured)Debts exceeding six months

Considered Good 11168.79 8214.31Considered Doubtful 806.19 484.66Less: Provision for Doubtful Debts (806.19) 11168.79 (484.66)

Other DebtsConsidered Good 16178.96 15905.63Considered Doubtful 22.89 -Less: Provision for Doubtful Debts (22.89) 16178.96 -

27347.75 24119.94

Amount due from directors during the year Nil (Previous year Rs. 0.11 Lacs)

Maximum amount outstanding from directors during the year Rs. 0.11 lacs (Previous year Rs. 0.11 Lacs)

SCHEDULE-11CASH AND BANK BALANCES(Refer Notes B19 and B26 on Schedule 26)

Cash in Hand 708.54 34.70Cheques in Hand 106.07 44.32Remittance in Transit * 7128.88 -Balances with Scheduled Banks

In Current Accounts 8199.20 2957.85In Dividend Accounts - 9.10In Debenture Interest Accounts 12.82 14.79In Fixed Deposit Accounts** 6553.28 36.60

Stamps in Hand 19.18 0.20Balances with Non-Scheduled Banks

In Current Accounts 108.90 100.00

22836.87 3197.56

* Represents amounts receivable against redemption of units in mutual funds

** held under lien by various authorities Rs. 38.28 Lacs (Previous year Rs. 35.60 Lacs)


MAX INDIA LIMITED



(RS. LACS)

As at As at

March 31, 2009 March 31, 2008

SCHEDULE-12OTHER CURRENT ASSETS

Interest Receivable***Considered Good 6816.14 4750.44Considered Doubtful 23.53 23.53Less: Provision for Doubtful Interest (23.53) 6816.14 (23.53)

6816.14 4750.44

*** Includes interest accrued on investments Rs. 5609.91 Lacs (Previous year Rs. 4316.52 Lacs)

SCHEDULE-13LOANS AND ADVANCES(Considered good, unless otherwise stated)

(Refer Notes A11, B24 and B31 on Schedule 26)

SecuredHousing Loans 4.18 4.89Loans to Policyholders 482.67 287.72

UnsecuredAdvances recoverable in cash or inkind or for value to be received

Considered Good 12932.06 8889.70Considered Doubtful 687.67 501.84Less: Provision for Doubtful Advances (687.67) 12932.06 (501.84)

Loans to Employees 19.25 16.54Other Loans 7986.56 4877.89Inter Corporate Deposits

Considered Good 800.00 -Considered Doubtful 441.60 441.60Less: Provision for Doubtful Advances (441.60) 800.00 (441.60)

Balance with Excise Authorities 10928.35 9728.27Prepaid Expenses 11407.44 3599.91Security Deposits

Considered Good 8027.00 5082.24Considered Doubtful 36.00 36.00Less: Provision for Doubtful Deposits (36.00) 8027.00 (36.00)

Share Application Money Pending Allotment- Companies under the same management 800.00 -Advance Tax

Income Tax 5505.80 7483.31Wealth Tax 1.48 1.23Fringe Benefit Tax 2405.00 880.00

7912.28Less: Provision for Tax

Income Tax (3937.78) (5718.76)Wealth Tax (8.36) (7.41)Fringe Benefit Tax (2412.04) (905.21)

(6358.18) 1554.10Other Current Assets - Unit Linked 16280.04 18237.98

71221.65 52458.30



MAX INDIA LIMITED



Amount due from directors 0.54 622.36

Maximum amount outstanding during the year from directors 807.87 622.36

Amounts due from companies under the same management




SCHEDULE-14CURRENT LIABILITIES

Acceptances - 26.88Sundry Creditors

Total outstanding dues of micro enterprises and small enterprises 79.70 -Total outstanding dues of creditors other than micro enterprisesand small enterprises 48574.96 36707.93

Advances From Policyholders 11133.04 13555.15Claims Outstanding (Includes Claims Pending Investigation) 1320.37 842.40Advance from Customers 1357.97 1268.49Investor Education and Protection Fund

Unpaid Dividend - 9.10Unpaid Debenture Interest 10.24 12.19

Interest Accrued But Not Due 113.10 129.20Other Liabilities 4136.14 4077.66Other Current Liabilities - Unit Linked 1228.75 5040.79

67954.27 61669.79

SCHEDULE-15PROVISIONS(Refer Notes A12, A20, B11 and B18 on Schedule 26)

Leave Encashment 647.67 517.20Gratuity 643.39 373.65Dividend on Preference Shares 839.73 -Corporate Dividend Tax 142.71 -

2273.50 890.85

SCHEDULE-16MISCELLANEOUS EXPENDITURE(To the extent not written off or adjusted)


- Preliminary, Share and Debenture Issue Expenses 0.07 0.66- Deferred Employee Compensation 385.17 645.17

385.24 645.83

(RS. LACS)

As at As at

March 31, 2009 March 31, 2008



MAX INDIA LIMITED



(RS. LACS)


March 31, 2009 March 31, 2008

SCHEDULE-17SERVICE INCOME(Refer Note A3 on Schedule 26)

Life Insurance Premium 385725.90 271460.45Less: Premium on Reinsurance Ceded (3822.54) (2205.17)

381903.36 269255.28Healthcare Business 1 26455.88 21549.76Construction Activities 715.94 -Clinical Research Business 2 1397.02 1029.92Placement Revenue 114.56 240.56Other Services 3 20.11 144.51

410606.87 292220.03

1 Tax deducted at source Rs. 251.48 Lacs (Previous year Rs. 201.78 Lacs) and excludes discounts given.

2 Tax deducted at source Rs. 50.32 Lacs (Previous year Rs. 24.72 Lacs)

3 Tax deducted at source Rs. 0.46 Lacs (Previous year Rs. 4.55 Lacs)

SCHEDULE-18INCOME FROM INVESTMENT ACTIVITIES(Refer Note A3 on Schedule 26)

Dividend Income fromNon Trade Investments-Long term 1361.97 240.75Non Trade Investments-Current 3922.95 5284.92 6733.41

Interest on Loans and Non Trade Investments (Gross) 4

Government Securities 16268.82 9149.82Bonds 5708.07 3883.12Loans 1018.19 494.10Fixed Deposits 1335.24 611.36Others 150.74 24481.06 73.53

Amortisation of Discount/(Premium) on Non Trade Investments 1232.09 57.72Profit on Sale of Investments-Long term - 8942.95Profit on Sale of Investments-Current 2026.42 569.66Unrealised Gain on Investments - 1736.42

33024.49 32492.84

4 Tax Deducted at Source Rs. 197.42 Lacs (Previous year Rs. 85.81 Lacs)

SCHEDULE-19OTHER INCOME

Liabilities/Provisions No Longer Required Written Back 453.81 178.25Net Gain on Foreign Exchange Fluctuation - 180.02Miscellaneous Income * 4898.47 3799.11

5352.28 4157.38

*Tax deducted at source Rs. 42.07 Lacs (Previous year Rs. 99.07 Lacs)



MAX INDIA LIMITED



(RS. LACS)


March 31, 2009 March 31, 2008

SCHEDULE-20INCREASE/(DECREASE) IN INVENTORY

Opening StockWork in Process 625.19 231.27Finished Goods 165.57 56.00

790.76 287.27Less: Closing Stock

Work in Process 579.29 625.19Finished Goods 192.60 165.57

771.89 790.76

Net Increase / (Decrease) (18.87) 503.49

SCHEDULE-21MANUFACTURING, TRADING AND DIRECT EXPENSESManufacturing and Trading Expenses(Refer Note B28 on Schedule 26)

Raw Materials Consumed 23338.53 19117.82Goods Purchased for Resale 1.50 -Excise Duty on Scrap 164.49 265.01Power and Fuel 2317.13 2055.62Stores and Spares Consumed 469.89 386.55Packing Material 1051.67 888.59Freight Inward 45.08 41.05Repairs and Maintenance-Plant and Machinery 153.12 98.54Processing Charges 46.63 90.80

27588.04 22943.98Direct ExpensesLife Insurance BusinessAgents’ Commission 39157.67 38558.87Increase in Policy Reserves 175795.76 166033.55Unrealised loss on Investments 14410.79 -Loss on Sale of Investments-Long term (net) 29461.42 -Claims/other benefits 22082.06 13600.80Policy Issuance Costs 13209.47 14045.22Agency Training and Recruitment Expenses 3056.65 1647.04

297173.82 233885.48Healthcare BusinessConsumption of Medical Consumables 4909.41 3838.10Cost of Goods Sold 4567.08 3605.54Professional and Consultancy Fee 5038.17 3709.49Outside Lab Investigation 262.08 160.17Repairs and Maintenance-Medical Equipments 492.86 341.68Patient Catering Expenses 316.66 244.64

15586.26 11899.62Healthcare Staffing BusinessCandidate Related Expenses 28.56 81.17

Sub-Contracting Expenses 715.94 -

Clinical Research BusinessClinical Trial Expenses (Refer Note B30 on Schedule 26) 401.21 266.89

341493.83 269077.14



MAX INDIA LIMITED




(RS. LACS)


March 31, 2009 March 31, 2008

SCHEDULE-22PERSONNEL EXPENSES(Refer Notes B17 and B30 on Schedule 26)

Salaries, Wages and Bonus * 70740.97 38995.74Contribution to Provident and Other Funds 2766.66 1328.97Recruitment and Training Expenses 8561.31 3809.10Staff Welfare 2306.99 1349.98

84375.93 45483.79

* Net of Employee Compensation Expenses written back amounting to Rs. 180.82 Lacs

(Previous year Nil) pertaining to earlier years

SCHEDULE-23GENERAL AND ADMINISTRATION EXPENSES(Refer Notes B22, B32, B35, B36 and B37 on Schedule 26)

Rent 8766.07 4921.96Insurance 638.34 463.52Rates and Taxes 11271.91 2157.82Repairs and Maintenance:

Building 354.31 205.48Others 9686.58 6271.69

Electricity and Water 3667.99 2338.99Printing and Stationery 3159.07 1851.03Travelling and Conveyance 6481.47 5079.20Communication 6739.01 3323.88Legal and Professional 8058.42 2304.18Directors’ Fee 19.14 8.90Business Promotion 146.04 134.50Commission 107.29 111.78Trade Discount 476.52 324.33Selling and Distribution 2836.10 2366.51Branding, Advertisement and Publicity 16053.17 5400.74Provision for Doubtful Debts and Advances 591.22 274.43Net Loss on Sale/Disposal of Fixed Assets 85.52 188.14Loss on Sale of Investments-Long term (net) - 104.94Provision for Diminution in Investments 422.49 51.38Goodwill written off 403.63 -Debts Written Off 5.82 3.70Debit Balances Written Off 2.81 0.75Fixed Assets and Spares Written Off 14.77 53.46Charity and Donation 646.50 213.64Amortisation of Miscellaneous Expenditure 0.59 19.50Net Loss on Foreign Exchange Fluctuation 64.81 -Miscellaneous 3575.36 1797.73Less: Overheads Recovered * (76.73) (33.62)

84198.22 39938.56



MAX INDIA LIMITED




(RS. LACS)


March 31, 2009 March 31, 2008

SCHEDULE-24FINANCIAL EXPENSES

Interest on:Short Term Loan 19.48 1.57Acceptances 32.02 41.54Term Loans 3371.07 3762.13Working Capital Facilities 439.15 313.46Others 114.21 40.23

Bank Charges 1057.47 561.40Finance Charges 24.00 10.71

5057.40 4731.04

SCHEDULE-25TAX EXPENSE(Refer Notes A11 and B14 on Schedule 26)

Current Year TaxIncome Tax 79.86 106.39Wealth Tax 7.61 7.59Fringe Benefits Tax 930.61 727.21Add:-Deferred Tax (3401.64) 830.94

(2383.56) 1672.13


MAX INDIA LIMITED




SCHEDULE – 26

A. SIGNIFICANT ACCOUNTING POLICIES

1 Accounting Convention

The consolidated financial statements are prepared to comply in material aspects, except as disclosed in the accounting policies

given below with all the applicable accounting principles in India, the applicable accounting standards notified u/s 211(3C) of the

Companies Act, 1956 and the relevant provisions of the Companies Act, 1956 in so far as applicable to the consolidated financial

statements.

The financial statements of Max New York Life Insurance Company Limited, a subsidiary company, which are included in these

Consolidated Financial Statements, are prepared in accordance with the accounting principles prescribed by the Insurance Regulatory

and Development Authority (Preparation of Financial Statement and Auditor’s Report of Insurance Companies) Regulations, 2002,

the accounting standards issued by the Institute of Chartered Accountants of India and the requirements of the Insurance Act

1938, Insurance Regulatory and Development Authority Act, 1999, and the regulations framed thereunder and the Companies Act,

1956, to the extent applicable and the practices prevailing within the insurance industry in India.

2 Basis of Consolidation

The consolidated financial statements are prepared in accordance with the principles and procedures laid down by the accounting

standard on Consolidated Financial Statements issued by the ICAI.

The subsidiaries of Max India Ltd. (“Company”) have been defined as those entities in which the Company owns directly or indirectly

more than one half of the voting power or otherwise has power to exercise control over the composition of the Board of Directors

of such entities. Max India Ltd. and its subsidiaries are herein after referred to as Group Companies or Group.

The financial statements of subsidiaries are consolidated from the date on which the control is transferred to a Group Company and

are excluded from consolidation from the date such control ceases. The financial statements of all Group Companies have been

combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses after

eliminating all intra-group balances and transactions and resulting unrealised gains/losses. The consolidated financial statements

are prepared applying uniform accounting policies in use by the Company.

3 Revenue Recognition

(a) Life Insurance Business: Premium is recognised as income when due. Uncollected premium on lapsed policies is not recognised

as income until reinstated. For linked business, premium income is recognized when the associated units are allotted. In case

of linked business, top-up premiums (i.e. premium paid in excess of annual target premium as per policy contract) are

recognised as single premium. Fees on linked policies including fund charges, etc are recovered from the linked fund in

accordance with the terms and conditions of the policies.

Reinsurance premium ceded is accounted at the time of recognition of premium income in accordance with the treaty or in-

principle arrangement with the re-insurers.

(b) Clinical Research Business: Revenue from services is recognised by reference to the stage of completion of clinical study

projects subscribed with pharmaceutical companies.

Revenue from services is recognised with reference to the stage of completion of clinical data management service projects

subscribed with pharmaceutical companies.

(c) Healthcare Business: Revenue from healthcare services is recognised on the performance of related service and includes

pharmacy services on patients undergoing treatment and pending billing.

Revenue from pharmacy sale is recognised on delivery of goods.

Income from Healthcare Service Providers is recognised on the performance of related services as per terms of contracts.

Income from Educational Programmes is recognised on accrual basis.


MAX INDIA LIMITED



(d) Healthcare Staffing Business:

(i) Revenue from overseas placement of healthcare staff is recognized on the basis of time sheets received from customers

on accrual basis.

(ii) Revenue from training is recognized at the time of enrolment on accrual basis.

(iii) Interest Income is recognized on a time proportion basis taking into account the amounts invested and the rate of

interest. Income is stated in full with the tax thereon being accounted for under advance tax.

(e) Lease Rentals

In respect of lease rentals on operating leases, revenue is recognised proportionately over the period of the related agreements.

(f) Export sales are accounted for on the basis of the date of bill of lading/airway bill. Other sales are accounted for at ex-

factory prices on transfer of risks and rewards.

(g) Income from investments is credited to revenue in the year in which it accrues. Income is stated in full with the tax thereon

being accounted for under advance tax.

(h) Dividend is recognised as and when the right to receive such payment is established.

4 Fixed Assets

(a) Fixed Assets are stated at their original cost including freight, duties (net of CENVAT), taxes and other incidental expenses

relating to acquisition and installation.

(b) Expenses of revenue nature, which can be regarded as incidental and related to project set-up are transferred to “Pre-

operative Expenses Pending Capitalisation”. These expenses are allocated to fixed assets/deferred revenue in the year of

commencement of the related project.

(c) Assets, which are revalued, are stated at the revalued amounts. The resultant increase in carrying amounts is credited to the

revaluation reserve. Depreciation relating to the revalued amounts is adjusted against the revaluation reserve.

5 Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as

part of the cost of that asset in accordance with Accounting Standard 16 notified u/s 211(3C) of the Companies Act, 1956 on

“Borrowing Costs”. Other borrowing costs are recognized as an expense in the period in which they are incurred. Capitalisation of

borrowing costs ceases when substantially all activities necessary to prepare the qualifying assets for its intended use or sale are

complete.

6 Depreciation

(a) Depreciation is charged on straight-line method on a pro-rata basis at rates estimated by the management based on the

economic useful life of the assets, which are not lower than the rates prescribed under Schedule XIV to the Companies Act,

1956. In life insurance business, depreciation is provided for the full month in the month of acquisition of the related asset

and no depreciation is provided in the month of sale/disposal of the asset.

(b) Leasehold improvements are depreciated over respective lease periods.

(c) Assets costing not more than Rs. 5,000 each individually are depreciated at 100%.

(d) Intangible assets are amortised over a period of 3-6 years based on management’s estimate of economic useful life of the assets.

7 Investments

(a) Investments are classified into current investments and long-term investments. The cost of investments includes acquisition

charges such as brokerage, fees and duties. Current investments are carried at lower of cost and fair value.

(b) Long-term investments are valued at cost. Provision for diminution is made to recognise a decline, other than temporary, in

the carrying value of each investment.

(c) Life insurance business:

Investments are made in accordance with the Insurance Act, 1938 and the Insurance Regulatory and Development Authority

(Investment) Regulations, 2000.

Investments are recorded at cost on date of purchase, which includes brokerage and statutory levies, if any and excludes

interest paid, if any, on purchase. Diminution in the value of investment, other than temporary decline, is charged to revenue

and profit and loss account as applicable.



MAX INDIA LIMITED



i) Classification

Investments intended to be held for a period less than twelve months or maturing within twelve months from the

balance sheet date are classified as short term investments. All other investments are classified as long-term investments.

ii) Valuation - shareholders’ investments and non-linked policyholders’ investments

Debt securities, which include government securities, are considered as ‘held to maturity’ and measured at historical

cost. The premium/discount, if any, on purchase of debt securities is recognised and amortised in the profit and loss

account, as the case may be, over the remaining period to maturity on the basis of their intrinsic yield.

Policy loans are valued at historical cost net of repayments, capitalised interest and are subject to impairment, if any.

Listed equity shares, as at balance sheet date, are valued at fair value, being the last quoted closing price on the

National Stock Exchange (NSE) and in case the same is not available, then on the Stock Exchange, Mumbai (BSE).

Unlisted Equity shares are valued at historical cost subject to provision for diminution. Investments in mutual fund units

are valued at net asset value of the respective funds as at balance sheet date.

iii) Valuation – Linked Investments

Government securities are valued at the prices obtained from CRISIL (Credit Rating Information Services of India Limited).

Debt securities other than Government Securities are valued on the basis of Bond Valuer (CRISIL). Listed equity shares

are valued at fair value, being the last quoted closing price on NSE and in case the same is not available, then on the

BSE. Mutual fund units are taken at the previous day’s net asset values.

iv) Transfer of Investments

Investments in debt securities are transferred from shareholders to policyholders at net amortised cost. Investments

other than debt securities are transferred from shareholders to policyholders at lower of book value or market value.

Transfer of investments between unit linked funds are effected at market price on date of transfer.

8 Inventories

(a) Inventories are valued at lower of cost and net realisable value. Cost for this purpose is calculated on a weighted average

method except in the case of medical supplies where cost is calculated on First In First Out basis. In respect of finished goods

and work in process, appropriate overheads are loaded.

(b) Stock of securities is valued at lower of cost and market value, determined category wise. Cost for this purpose is calculated

under First In First Out Method.

9 Capital Subsidy

Capital Subsidies, received under the state capital subsidy scheme, are accounted for as capital reserve.

10 Employee Stock Option Scheme

Max India Limited

(a) The value of options is equal to the aggregate of the intrinsic value of the options granted. Intrinsic value is the option

discount represented by the excess of market price on grant date over the exercise price of the option and is amortised on a

straight line method basis over the vesting period in line with the Securities and Exchange Board of India (SEBI) Guidelines.

(b) As and when the options are exercised, the same will be accounted for as paid up capital to the extent of the face value and

Share Premium to the extent of excess of market price over face value on grant date.

(c) Options that lapse are reversed by a credit to employee compensation expense equal to the amortised portion of the value of

the lapsed options and a credit to deferred employee compensation expense equal to the unamortised option.

Max New York Life Insurance Company Limited

The value of options is equal to the aggregate of the intrinsic value of the options granted. Intrinsic value is the option discount

represented by excess of market price, which is determined by the independent valuer, over the exercise price. The intrinsic value of

the options is amortised on a straight line basis over the vesting period. As and when the options are exercised, the same are

accounted for as paid up capital to the extent of the face value. Options that lapse are reversed by a credit to employee compensation

expense equal to the amortised portion of the value of the lapsed options and a credit to deferred employee compensation expense

equal to the unamortised option.



MAX INDIA LIMITED



Max Healthcare Institute Limited

The value of options is equal to the aggregate of the fair value of the options granted. Fair value is the face value of the paid up

equity shares at which the share capital was introduced last by the Company or the net asset value, which ever is higher. As and

when the options are exercised, the same are accounted for as paid up capital to the extent of the face value. Options that last are

reversed by a credit to employee compensation expense equal to the amortised portion of the value of the lapsed options and a

credit to deferred employee compensation expense equal to the unamortised options.

11 Taxation

Income taxes are computed using the tax effect accounting method, where taxes are accrued in the same period in which the

related revenue and expenses arise. Provision for tax consists of current tax, fringe benefits tax and deferred tax. A provision is

made for income taxes annually based on the tax liability computed at rates as per local laws of the country in which each Group

Company is incorporated after considering applicable tax allowances and exemptions. Provisions are recorded when it is estimated

that a liability due to disallowances or other matters is probable.

The differences that result between the profit offered for income taxes and the profit as per financial statements are identified and,

thereafter, a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in

one accounting period and reverse in another, based on the tax effect of the aggregate amount being considered. Deferred tax

assets are recognised only if there is virtual certainty that they will be realized and are reviewed for the appropriateness of their

respective carrying values at each balance sheet date.


(a) Defined Contribution Plan

i) Certain employees of the Company are participants of a defined superannuation plan. The Company makes contributions

under the superannuation plan to “Max India Limited Superannuation Fund” based on a specified percentage of each

covered employee’s salary.

ii) The Company makes monthly contributions to the “Max India Limited Employees’ Providend Fund Trust” which is based

on a specified percentage of the covered employee’s salary. This fund is administered through trustees and the Company’s

contributions thereto are charged to revenue every year.

(b) Defined Benefit Plans

i) The liability in respect of Gratuity is provided for on the basis of an actuarial valuation carried out at the year-end using

Projected Unit Credit Method. Actuarial gains and losses are recognized in full in the Profit and Loss Account for the

year in which they occur. The Company has a recognised Trust for Gratuity benefits, “Max India Limited Employees’

Gratuity Fund” to administer the Gratuity funds. The Trust has taken Master policy with the Life Insurance Corporation

of India to cover its liability towards employees’ Gratuity. The Gratuity obligation recognized in the Balance Sheet

represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost and as

reduced by the fair value of Gratuity Fund.

ii) The liability in respect of Leave Encashment is provided for on the basis of actuarial valuation carried out at the year-

end for long term compensating absences using Projected Unit Credit Method. Actuarial gains and losses are recognized

in full in the Profit and Loss Account for the year in which they occur. Short term compensated absences are provided

for based on estimates.

Other Group Companies within India have various schemes of retirement benefits namely provident fund, superannuation

and gratuity. Contributions made to these benefit plans are charged to revenue every year. Accruals for gratuity and leave

encashment are made on the basis of actuarial valuation done at the year end.

Group Companies situated outside India have employee benefit schemes as per their respective local laws.

13 Foreign Exchange Transactions

(a) Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated

at year end rates.



MAX INDIA LIMITED



(b) The difference in translation of monetary assets and liabilities and realised gains and losses on foreign exchange transactions

are recognised in the profit and loss account.

(c) Exchange difference in respect of liabilities incurred to acquire fixed assets are recognised in the profit and loss account.

(d) For consolidation of accounts, in respect of Group Companies situated outside India, the assets and liabilities are translated

at closing rate whereas the revenue and expenses are translated using the average rate during the year. The resultant gain or

loss arising out of such translation is recognised in a separate reserve “Foreign Currency Translation Reserve” as required

under Accounting Standard-11 revised.


(a) Preliminary and share issue expenses are amortised over a period of 5 to 10 years, except cost incurred on raising of funds,

which is being amortised over the life of the respective financial instrument.

(b) Deferred employee compensation expense is amortised over the vesting period.

(c) Other deferred revenue expenditure is amortised from the year they have been incurred/related projects commence operations,

over 3 to 5 years based on the period over which future benefits are expected to be received.

15 Leases

Assets given under operating lease are shown in the balance sheet under fixed assets and are depreciated on a basis consistent with

the depreciation policy of the company. Lease income is recognised in the profit and loss account on accrual basis.

Assets acquired on finance lease are recognised in the financial statements at an amount equal to the fair value of the leased asset

at the inception of the lease. The depreciation policy for such assets is consistent with that for depreciable assets that are owned

by the Group.

Operating lease expense is recognised in the profit and loss account on a straight-line basis over the lease term.

16 Benefits for Life Insurance Policy Holders

Benefits paid consist of the policy benefit amount and claim settlement costs, if any. Maturity claims are accounted when due for

payment. Surrender, death and other claims are recognised for, when intimated. An additional provision is made, on the basis of

actuarial estimate, for the benefits which are incurred but not reported. Repudiated claims disputed before judicial authorities are

provided for based on management prudence considering the facts and evidences available in respect of such claims. Reinsurance

recoverable, where applicable, are accounted in the same period. Withdrawals under linked policies are accounted in respective

schemes along with cancellation of associated units.

17 Policy Holders’ Acquisition Cost

Acquisition costs are expenses incurred to solicit and underwrite insurance contracts such as commission, medical fee etc. and are

expensed in the year in which they are incurred.

18 Liability for Life Insurance Policies in Force

The estimated liability for life policies in force is determined by the appointed actuary of Max New York Life Insurance Company

Ltd. (“MNYL”), pursuant to his annual investigation of the life insurance business, using appropriate methods and assumptions that

conform with regulations issued by Insurance Regulatory and Development Authority (Actuarial Report and Abstract) Regulations,

2000 and Professional Guidance notes issued by the Actuarial Society of India (ASI). The liability is so calculated that together with

future premium payments and investment income, all future claims (including bonus entitlements to policyholders) and expenses

are met. Liabilities, if any, as determined by appointed actuary, in respect of Linked policies which have lapsed are maintained till

the expiry of the revival period and shown under funds for future appropriation. Liabilities under linked policies comprise of fund

value and non unit liability for meeting mortality and morbidity risk, which is based on actuarial valuation done by appointed

actuary.

19 Contributions to Policyholders’ Account (Technical Account)

Contribution to Policyholders’ Account (Technical Account) is made as decided by the board of directors of MNYL and approved by

the Shareholders.



MAX INDIA LIMITED



20 Provision and Contingencies

A provision is recognized when there is a present obligation as a result of past event and it is probable that an outflow of a resource

will be required to settle the obligation, in respect of which a reliable estimate can be made. These are reviewed at each Balance

Sheet date and adjusted to reflect the current estimates.

Contingent liabilities are disclosed after an evaluation of the fact and legal aspects of the matter involved.

21 Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the

weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share,

the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding

during the period are adjusted for the effects of all dilutive potential equity shares.



MAX INDIA LIMITED



B. NOTES TO THE ACCOUNTS

1 The consolidated financial statements have been prepared in accordance with Accounting Standard 21, Consolidated Financial

Statements, issued by the ICAI. The consolidated financial statements comprises the financial statements of Max India Ltd. and its

subsidiaries, listed below:

Name of the Subsidiary Country of Proportion of Proportion of

Incorporation ownership as at ownership as at

March 31, 2009 March 31, 2008

Indian Subsidiaries

1 Max New York Life Insurance Company Ltd. India 73.69% 73.47%

2 Max Healthcare Institute Ltd. India 70.04% 70.06%

3 Max Medical Services Ltd. 1 India 100% 100%

4 Alps Hospital Ltd. 2 India 100% 100%

5 Max Neeman Medical International Ltd. 5 India 100% 100%

6 Pharmax Corporation Ltd. India 85.20% 85.20%

7 Max Ateev Ltd. India 100% 100%

8 Max HealthStaff International Ltd. India 100% 100%

Foreign Subsidiaries

1 Neeman Medical International BV Netherlands 100% 100%

2 Neeman Medical International NV 3 Netherlands 100% 100%

3 Max Neeman Medical International Inc. 4 United States of America 100% 100%

4 Max UK Ltd. United Kingdom 100% 100%

Notes:

1 Held through Max Healthcare Institute Ltd.2 Formerly Alps Hospital Pvt. Ltd.

Held through Max Medical Services Ltd.3 Held through Neeman Medical International BV, Netherlands4 Formerly Neeman Medical International Inc.

Held through Neeman Medical International NV, Netherlands5 Formerly Neeman Medical International (Asia) Ltd.

2 Reserves shown in the consolidated balance sheet represent the Group’s share in the respective reserves of the Group Companies.

Goodwill arising on consolidation is shown under fixed assets (Refer Schedule 7).

3 The movement in share of minority interests is as follows:

(RS. LACS)

Name of the Subsidiary Balance as on Increase in Profit/(Loss) Adjustment* Balance as on

April 1, 2008 Capital for the year March 31, 2009

Max New York Life Insurance Co. Ltd. 11215.25 19500.00 (10339.67) 136.67 20512.25

Max Healthcare Institute Ltd. 6048.06 5.00 1367.46 (294.84) 7125.68

Total 17263.31 19505.00 (8972.21) (158.17) 27637.93

* The adjustments in minority interest consist of:(i) Changes in the shareholding pattern during the year.(ii) Impact of dividend on preference shares and corporate dividend tax. (refer note B11 below)



MAX INDIA LIMITED



4 Contingent Liabilities

(RS. LACS)


a) Corporate guarantees * 11500.00 11500.00

b) Claims not acknowledged as debts:

- Excise Duty 855.26 808.87

- Customs 364.09 413.39

- Income Tax —— Refer Note B7 ——-

- Service Tax 4166.81 325.90

- VAT - 109.01

- Other 1160.91 1192.37

- Potential liability in respect of repudiated policyholders claims 283.14 61.31

c) Bank Guarantees 41.00 37.00

d) Letter of Credit outstanding 205.38 284.83

e) Arrears of Dividend on Preference Shares 41.82 379.98

f) Corporate Dividend Tax on arrears of Dividend on Preference Shares 7.11 64.58

g) Liability on assumed IRR (Also refer Note B11 below) 4053.42 1594.31

* Loans of Rs. 2195.00 Lacs (Previous year Rs. 595.00 Lacs) are outstanding against the aforesaid corporate guarantees

5 Capital Commitments

(RS. LACS)


Estimated amount of contracts remaining to be executed on capital 5761.48 8912.43

account and not provided for

Less: Capital Advances 1373.48 3712.21

Balance value of contracts 4388.00 5200.22

6 Concession in Custom Duty availed on Capital equipment imported during the year against export obligation undertaken under

‘Export Promotion Capital Goods’ Scheme is Rs. 86.55 Lacs (Previous year Rs. 170.28 Lacs).

Movement of EPCG export obligation is given below: (RS. LACS)


Obligation as at April 1, 2008 19852.00 21606.00

Additions during the year 707.00 1573.00

Exports made during the year 3767.00 3327.00

Obligation as at March 31, 2009 16792.00 19852.00

7 Income Tax Cases

Max India Ltd.

(a) In the case of an erstwhile subsidiary of the Company, Max Telecom Ventures Ltd. (“MTVL”) (since merged with the Company

with effect from December 1, 2005), a demand of Rs. 9503.93 Lacs (Previous year Rs. 9503.93 Lacs) was raised by the income

tax authorities for the assessment year 1998-99 in connection with capital gains realized by MTVL from the sale of shares of

Hutchison Max Telecom Limited by holding that the sale transaction pertains to previous period relevant to assessment year

1998-99 and by denying exemption under section 10(23G) of the Income-tax Act, 1961. On appeal by MTVL, the CIT (Appeals)

while holding that the sale transaction pertains to previous period relevant to assessment year 1998-99, quashed the order of

the Assessing Officer regarding denial of exemption under section 10(23G) and the demand was cancelled. The tax authorities

have filed an appeal against this order with the Income-Tax Appellate Tribunal (“ITAT”), which appeal is pending as on date.

Subsequently, in the next assessment year, i.e. 1999-00, the above-mentioned transaction was once again sought to be taxed



MAX INDIA LIMITED



both as capital gains and under a different head of income (i.e., business income) on a protective basis by the Assessing

Officer as MTVL had asked the tax authorities to treat the transaction as that arising in assessment year 1999-00 and not in

assessment year 1998-99. This, along with a few other additions, resulted in creation of a further demand of Rs. 25630.03

Lacs (Previous year Rs. 25630.63 Lacs) which included the demand of Rs. 25002.53 Lacs (Rs. 25002.53 Lacs) on protective

basis. On appeal by MTVL, the CIT (Appeals) decided in favor of MTVL and the demand was cancelled. The tax authorities have

filed appeal against this order with ITAT, which appeal is pending as on date.

MTVL had also filed an appeal before ITAT for assessment year 1998-99 contending that the aforesaid sale transaction

pertains to Previous Period relevant to assessment year 1999-2000. This appeal had been disposed off by ITAT by applying a

circular of tax department applicable only to capital gains and holding, as a result, that the transaction of sale of shares

pertains to previous period relevant to assessment year 1998-99. However, the Tax authorities filed a petition before the ITAT

requesting a review of the said order of the ITAT on the ground that all the three appeals pertaining to the aforesaid sale

transaction should have been clubbed and heard together. The said petition of the Department was accepted by the ITAT

which recalled its earlier order in the Company’s appeal for Assessment year 1998-99. Aggrieved, the Company filed a writ

petition to the Hon’ble High Court of Punjab and Haryana challenging the above action of ITAT on the ground that the same

was beyond jurisdiction. The Hon’ble High Court of Punjab and Haryana has admitted the writ petition and stayed the

operations of the order of ITAT accepting the petition filed by the Department. The ITAT has in the meanwhile adjourned sine-

die all the three appeals pending operation of the stay imposed by the Hon’ble High Court.

(b) The Company has received the following demands under section 156 of the Income Tax Act, 1961 relating to income tax assessments:




1999-2000 Nil 5.67

2000-2001 5.25 5.25

2001-2002 15.65 15.65

2002-2003 41.77 41.77

2003-2004 Nil Nil

2004-2005 0.76 0.76

2005-2006 Nil Nil

2006-2007 98.96 Nil

The above relate to certain disallowances and other matters and are in various stages of appeal with the CIT(Appeals)/ITAT.

Further, in the following cases, penalty under section 271(1)(c) of the Income Tax Act, 1961 has been levied for which the

Company is in appeal before ITAT.




1992-1993 18.78 19.05

1993-1994 14.63 14.63

Max Ateev Ltd. (“Max Ateev”)

There are certain income-tax proceedings pending against the Company at various stages of appeal, as per the detailed given below:

Assessment year Appeal Pending Before

2003-2004 CIT(Appeals)



The company is hopeful that the above appeals will be disposed off in its favour.



MAX INDIA LIMITED



Max Healthcare Institute Ltd.

Certain income-tax proceedings are pending against the Company as detailed below:-

(RS. LACS)

Assessment Year 2003-04 2004-05 2005-06 2006-07

Disallowances made by the Assessing Officer 1157.72 641.01 649.14 462.42

(1157.72) - (649.14) -

Appeal against the disallowance pending Before CIT (Appeals) CIT (Appeals) CIT (Appeals) CIT (Appeals)

Demand (if any) - - - -

Previous year’s figures are given in brackets.

The Company is hopeful that the above appeals would be disposed off in its favour.

Max New York Life Insurance Company Ltd. (“MNYL”)

For the assessment year 2002-2003, the Assessing Officer has reduced the returned loss of Rs. 6684.09 Lacs (Previous year

Rs. 6684.09 Lacs) to Rs. 6482.08 Lacs (Previous year Rs. 6482.08 Lacs) by making disallowance of Rs. 202.01 Lacs (Previous year

Rs. 202.01 Lacs) u/s 92CA(3) of the Income-tax Act, 1961 relating to Transfer Pricing. Similarly, for the Assessment years 2003-04

& 2004-05, the returned losses have been reduced from Rs. 7408.37 Lacs (Previous year Rs. 7408.37 Lacs) to Rs. 7331.92 Lacs

(Previous year Rs. 7331.92 Lacs) and from Rs. 7563.42 Lacs (Previous year Rs. 7563.42 Lacs) to Rs. 7285.17 Lacs (Previous year Rs.

7285.17 Lacs) respectively by the assessing officer by making similar disallowances Appeals against the above orders have been

filed to the CIT (Appeals), which is pending disposal. Further, for the assessment year 2005-06, the returned loss has been reduced

from Rs. 9427.20 Lacs to Rs. 8999.80 Lacs by making disallowance of Rs. 121.70 Lacs u/s 92CA(3) of the Income Tax Act, 1961

relating to Transfer Pricing and Rs. 105.70 Lacs due to disallowance of Income on sale of Investment. Appeal against the order has

been filed to CIT(Appeals). Further , in this order there was a mistake apparent from record in respect of returned loss of Rs. 200.00

Lacs against which rectification application u/s 154 of the Act has been filed.

Appeals against the above orders have been filed to the CIT (Appeals), which are pending disposal.

8 Loans

Max India Ltd.

a) Term loan - II from Yes Bank Ltd amounting to Rs. 428.57 Lacs (Previous year Rs. 714.29 Lacs) is secured by a first pari passu

charge on the fixed assets of the Company, both present and future.

b) Term loan - II from Punjab National Bank amounting to Rs. 3400.00 Lacs (Previous year Rs. 4000.00 Lacs) is secured by a first

pari passu charge on the fixed assets and second pari passu charge on the current assets of the Company, both present and

future.

c) Term loan from Oriental Bank of Commerce amounting to Rs. 3400.00 Lacs (Previous year Rs. 4000.00 Lacs) is secured by a

first pari passu charge on the fixed assets and second pari passu charge on the current assets of the Company, both present

and future.

d) Fund based working capital facilities from banks are secured by a first pari passu hypothecation charge on all current assets

and a second charge on immovable and movable fixed assets of the Company, both present and future.

Max Healthcare Institute Ltd. (“MHIL”)

(a) MHIL has availed term loans to finance its hospital projects and details of loans outstanding as on date are as follows:

(i) Rs. 9183.30 Lacs (Previous year Rs. 10061.10 Lacs) from Housing Developing Finance Corporation Ltd.

(ii) Rs. 6000.00 Lacs (Previous year Rs. 6000.00 Lacs) from Infrastructure Development Finance Co. Ltd.

(iii) Rs. 7312.50 Lacs (Previous year Rs. 7500.00 Lacs) from Export Import Bank of India

The above loans from financial institution are secured by way of:

- Equitable mortgage of the immovable properties of the company and a party having business arrangements with that company

- Hypothecation of movable fixed assets of the company and its subsidiary

- Corporate guarantees by the Company



MAX INDIA LIMITED



(b) Fund based working capital facility from Yes Bank for Rs. 1012.80 Lacs (Previous year Rs. 753.92 Lacs) is secured by way of

hypothecation of all current assets of the company and a party having business arrangements with that company.

Pharmax Corporation Limited (“Pharmax”)

Term loan from Canara Bank amounting to Rs. 848.03 Lacs (Previous year Rs. 1031.36 Lacs) availed by Pharmax is secured against

charge of monthly lease rentals receivable from various lessee and equitable mortgage of undivided share of freehold property at

Okhla, New Delhi.

9 During year ended March 31, 2008, the Company had issued 4,16,66,660 Equity Shares of Rs. 2/- each at a premium of Rs. 238/- per

share aggregating to Rs. 99999.98 Lacs to Qualified Institutional Buyers (“QIBs”) under Chapter XIII-A of the Securities & Exchange

Board of India (Disclosure and Investor Protection) Guidelines, 2000.

10 In 2003-04, the Company had signed an amendment to the Joint Venture Agreement (“JVA”) with New York Life International Inc.

(“NYLI”). In terms of the amended JVA, both the parties agreed that the Company shall not transfer or otherwise dispose its

shareholding to an extent of 24% of the paid up issued share capital (“Restricted Shares”) of Max New York Life Insurance Company

Ltd (“MNYL”) to any person other than NYLI. The parties also agreed that NYLI shall pay to the Company the aggregate par value

equal to 24% of the paid up issued share capital of MNYL from time to time. The aforesaid payment may be applied by NYLI to

purchase the Restricted Shares of MNYL from the Company, when and to the extent permitted pursuant to applicable laws by

March 2010 or become repayable thereafter. Pursuant to this amendment, the Company had received Rs. 17420.55 Lacs (Previous

year Rs. 17420.55 Lacs) in aggregate from NYLI till March 31, 2008.

Thereafter, on July 15, 2008, the Company amended the above mentioned JVA with NYLI. Under the new amended JVA, NYLI has an

option for 8 years to increase its shareholding in MNYL by 24% upto a maximum of 50%, subject to regulations. The option can be

exercised at a fair market value based formula defined as per the new amended JVA, less discount of 10%, as against a preferential

formula earlier. Also, the option deposit of Rs. 17420.55 Lacs received from NYLI in line with the terms of the amendment in 2003-

04 has been refunded on July 15, 2008.

11 During the previous year, Max Healthcare Institute Limited (MHIL) together with the Company had entered into a tripartite subscription

agreement dated June 29, 2007, for issue of equity and preference share capital, with International Finance Corporation, USA (IFC).

As per the agreement, IFC has subscribed to the share capital of MHIL amounting to Rs. 30,000.00 Lacs on July 28, 2007, as detailed below:

a. 90,90,909 Equity Shares of face value of Rs. 10/- each at a premium of Rs. 45/- each aggregating to Rs. 5000.00 Lacs.

b. 250,000,000, 8 years 2% Cumulative Partially Convertible Preference Shares of Rs. 10/- each aggregating to Rs. 25000.00 Lacs.

The Preference Shares carry a dividend rate of 2% which is cumulative in nature, payable until date of redemption or date of

purchase or conversion into equity shares, whichever is earlier. The earliest date of redemption or conversion or purchase is 3 years

from the date of issue of the said shares.

Also, the Preference Shares have been issued with a guaranteed internal rate of return (GIRR) of 11.25%. The said GIRR is inclusive

of 2% dividend rate, premium on redemption and discount to any initial public offering (IPO) price. The Preference Shareholders

also have an option to convert a portion of Preference Shares into Equity Shares at a discount to a future IPO price of MHIL, subject

to a maximum of 7.5% equity stake in MHIL upon such conversion.

The Preference Shares which have not been converted into equity shares shall be redeemable at the expiry of eight years from the

date of issue. The said redemption of Preference Shares will be at a GIRR of 11.25% p.a. inclusive of payment of 2% annual dividend

and premium on redemption of Preference Shares.

MHIL also has a right to redemption of the aforesaid preference shares at any time provided IFC is paid the redemption amount at

the GIRR.

Subsequent to the above mentioned agreement, MHIL has entered into another tripartite “put option” agreement together with the

Company and IFC. As per the said agreement IFC has a right to exercise the put option in respect of the said preference shares as

under:-

i) At any time after 3 years from date of subscription; or



MAX INDIA LIMITED



ii) At any time after giving due notice, in the event of non-performance of certain obligation by MHIL and/or the Company.

Also, the price to be determined as per the ‘put option’ would be equivalent to the amount paid to redeem the Preference Shares so

as to generate GIRR of 11.25% as adjusted with the following:-

i) Payment of 2% preference dividend;

ii) Discount on IPO Price on such portion of Preference Shares which have been converted to Equity Shares; and

iii) Premium paid on Preference Shares already redeemed or to be redeemed.

The premium payable and the applicable discount on any future IPO price on redemption of the preference shares are dependent on

future events and accordingly cannot be individually ascertained. However, the company has provided for dividend payable on

these preference shares amounting to Rs. 500.00 Lacs for the current year and Rs. 339.73 Lacs for the previous year along with

corporate dividend tax thereon.

12 Actuarial Assumptions – Life Insurance Business

MNYL’s Appointed Actuary has determined valuation assumptions that conform with Regulations issued by the IRDA and professional

guidance notes issued by the Actuarial Society of India (ASI). Details of assumptions are given below:

(a) Interest: It is based upon the current and projected yields on the fund and the current and projected yields on G-sec. A

valuation rate of interest of 7.5% (Previous year - 7.5%) for participating business, non-participating, health business and

riders has been used. The valuation rate of interest rate was reduced by margins for adverse deviations of 0.75% (Previous

year - 0.75%) for participating business and 1.75% (Previous year - 1.75%) for non-participating business. Gross unit growth

rate of 7.5% pa (Previous year - 7.5% pa) has been used which was further reduced by a margin of adverse deviation of 1.25%

(Previous year - 1.25%) per annum.

(b) Mortality: It is based on experience (where credible) and on assumptions used in the previous annual valuation (to avoid

arbitrary discontinuities). The assumptions are based on the base table IALM (94-96). For participating Life products 75% of

the base table is used in year 1 and beyond year 1 70% is used. In general, the assumptions in the initial years have been

increased to reflect anti-selection and those in the later years have been lightened in line with experience. The assumptions

have been increased by a margin for adverse deviation of 10% (Previous year - 10%) for participating business and 25%

(Previous year - 25%) for non-participating, unit linked and health business.

(c) Morbidity: The IAI has recommended the CIBT93 study of UK for morbidity incident rates due to lack of any published Indian

experience. Proportions of 95% to 300% (Previous year - 95% to 300%) of these tables have been used which were further

increased by a margin for adverse deviation of 25% (Previous year – 25%).

(d) Expenses: The per policy maintenance expenses used are based on projected expenses for the year. These are further increased

by margins for adverse deviation of 10% (Previous year - 5%) for participating policies and 10% (Previous year - 10%) for

non-participating policies and health.

(e) Inflation: An assumption of 6% pa (Previous year - 6% pa) for expense inflation has been used.

(f) Commission: It is based on the actual commission rates paid. There has been no change in these assumptions from those used

last year.

(g) Lapses: The lapse rates are based on experience (where credible). In general the lapses have been lightened compared to the

assumptions used last year. The rates were further reduced by margins for adverse deviation of 20% (Previous year: 20%) for

participating policies 50% (Previous year: 50%) for non-participating policies and 20% (Previous year: 20%) for health plans.

(h) Future bonuses: Provision is made for future bonuses based on estimated expected bonus payouts consistent with valuation

assumptions and policyholders’ reasonable expectations.

Overall, the valuation assumptions provide a conservative set of bases.

13 Employee Stock Option plans

Max India Limited

Employee Stock Option Plan – 2003 (“the 2003 Plan”):

The Company had instituted the 2003 Plan, which was approved by the Board of Directors in August 2003 and by the shareholders

in September 2003. The 2003 Plan provides for grant of stock options aggregating not more than 5% of number of issued equity



MAX INDIA LIMITED



shares of the Company to eligible employees and directors of the Company. The 2003 Plan is administered by the remuneration

committee appointed by the board of directors.

Details of the 2003 Plan are given below: (NOS.)

Particulars Year Ended Year Ended

March 31, 2009 March 31, 2008

Options outstanding, beginning of the year 567,935 741,765

Granted during the year 66,320 -

Exercised during the year (287,765) (173,830)

Forfeited during the year (280,170) -

Options outstanding, end of the year 66,320 567,935

Max New York Life Insurance Company Limited

The company currently has following employee stock option plans:

Employee Share Based Payment Plans

(a) Employee Stock Option Plan 2004 (“the 2004 plan”):

The 2004 plan was approved by the board in its meeting held on 28th September, 2004 and is proposed to be implemented by

the management adopting the Trust route. Under the plan 5,900,000 options were granted at an exercise price of Re. 1/- per

1,000 equity shares of the Insurer. The options were granted with effect from July 1, 2004 and are to vest on July 1, 2009. The

employees covered under the plan can exercise the options only if they are in service with the Insurer as on the vesting date.

Under the plan, 4,975,000 shares were outstanding at the beginning of the year out of which 175,000 got lapsed due to

attrition during the year. Cost of options under the plan is accounted using the Intrinsic Value method. During the year Rs

170.28 Lacs (Previous year - Rs 70.81 Lacs) has been accrued as ESOP cost in the revenue and profit and loss account as

applicable.

(b) Employee Stock Option Plan 2006 (“the 2006 plan”):

The 2006 plan was approved by the board on 9th March 2007. Under this plan, 2,500,000 options in aggregate were granted

to certain employees at an exercise price of Rs. 10/- per share. The options were granted with effect from July 1, 2006 and

75% of the options are to vest on July 1, 2009 and balance 25% on July 1, 2010 if the employee is in service with the Insurer

as on the vesting date. Under the plan, 2,500,000 shares were outstanding at the beginning of the year out of which 250,000

got lapsed due to attrition during the year. Cost of options under the plan is accounted using Intrinsic Value method. During

the year Rs 1.94 Lacs (Previous year - Nil) has been accrued as ESOP cost in the revenue and profit and loss account as

applicable.

A summary of status of Employee Stock Based Plans is given below: (NOS.)


March 31, 2009 March 31, 2008

Outstanding at the beginning of the year 7,475,000 8,000,000

Add: granted during the year - -

Exercised during the year - -

Forfeited/lapsed during the year (425,000) (525,000)

Outstanding at the end of the year 7,050,000 7,475,000

Max Healthcare Institute Limited

Employee Stock Option Plan – 2006 (“the 2006 Plan”):

The Company has instituted the 2006 Plan, which was approved by the Board of Directors on July 31, 2006 and subsequently by the

shareholders on August 10, 2006. The 2006 Plan provides for grant of stock options aggregating not more than 5% of number of

issued equity shares of the Company to eligible employees of the Company. The 2006 Plan is administered by the remuneration



MAX INDIA LIMITED



committee appointed by the board of directors. The options can be exercised during two to four years from the vesting date.

Details of the 2006 Plan are given below: (NOS.)


March 31, 2009 March 31, 2008

Options outstanding, beginning of the year 1,620,000 1,670,000

Options granted during the year 535,000 100,000

Options forfeited/lapsed during the year (1,200,000) (150,000)

Exercised during the year (50,000) -

Options outstanding, end of the year 905,000 1,620,000

14 Deferred Tax

The movement of deferred tax is given below:

2008-09 (RS. LACS)

Particulars As at April 01, Provision As at March 31,

2008 during the year 2009


Depreciation Expense 4309.80 (206.35) 4103.45

Deferred Revenue Expenses and preoperative expenditure 93.19 (48.73) 44.46

Deduction u/s 35D/35DD 0.17 (0.17) -

Liability for increase in surcharge (14.90) - (14.90)

Total 4388.26 (255.25) 4133.01

Deferred Tax (Assets)

Deduction u/s 43B (287.07) (91.78) (378.85)

Other Provisions (679.48) (405.94) (1085.42)

Unabsorbed Depreciation - (2648.67) (2648.67)

Total (966.55) (3146.39) (4112.94)

Net Deferred Tax Liability/(Asset) 3421.71 (3401.64) 20.07

2007-08 (RS. LACS)

Particulars As at Change in Provision Adjustment * As at

April Tax Rate during March

01, 2007 the year 31, 2008


Depreciation 3238.15 (227.58) 1299.23 - 4309.80

Deferred Revenue Expenses and preoperative expenditure 156.64 (0.01) (63.44) - 93.19

Deduction u/s 35D/35DD 3.39 (0.01) (3.21) - 0.17

Liability for increase in surcharge (14.90) - - - (14.90)

Total 3383.28 (227.60) 1232.58 - 4388.26

Deferred Tax (Assets)

Deduction u/s 43B (151.61) 12.15 (93.62) (53.99) (287.07)

Other Provisions (586.91) 46.63 (139.20) - (679.48)

Total (738.52) 58.78 (232.82) (53.99) (966.55)

Net Deferred Tax Liability/(Asset) 2644.76 (168.82) 999.76 (53.99) 3421.71

Note: Deferred tax assets on timing differences and unabsorbed depreciation are created to the extent of their realisability in future.

* Impact of transitional liability as per AS15 (Refer Note B18 below)



MAX INDIA LIMITED



15 Directors’ Remuneration (RS. LACS)


(a) Salary, wages and allowances 1203.01 429.60

(b) Contribution to provident fund and superannuation fund 74.52 24.30

(c) Value of perquisites 18.37 27.67

Total 1295.90 481.57

The above does not include leave encashment, gratuity, ESOP.

Notes:

Remuneration for Current year includes an amount of Rs. 613.96 Lacs (Previous year Nil) relating to earlier years for which the

Company has received Central Government approval during Current year. However this does not include loss on sale of assets

amounting to Rs. 28.79 Lacs arising out of final settlement.

The excess amounts of Nil for the Current year (Previous year Rs. 613.96 Lacs) received by the concerned directors, are held by them

in trust for the Company.

16 Earnings per Share

Calculation of EPS (Basic and Diluted)


March 31, 2009 March 31, 2008

Basic

Net (Loss) after tax (Rs. Lacs) (21838.61) (4889.72)

Less: Dividend on Preference Shares 688.12 -

Net (Loss) for EPS (22526.73) (4889.72)

Weighted average number of Equity Shares 221998514 213118796

EPS (Rupees) (10.15) (2.29)


Outstanding as at the beginning of the year 221742545 179902055

Issued on May 5, 2008 280175 -

Issued on December 31, 2008 7590 -

Issued on June 15, 2007 - 41666660

Issued on September 22, 2007 - 166250

Issued on February 7, 2008 - 7,580

Outstanding as at the end of the year 222030310 221742545

Diluted

Net (Loss) after tax (Rs. Lacs) (21838.61) (4889.72)

Less: Dividend on Preference Shares 688.12 -

Net (Loss) for EPS (22526.73) (4889.72)

Weighted average number of Equity Shares 222122712 213772230

EPS (Rupees) (10.15) (2.29)


Outstanding as at the beginning of the year 222310480 180643820

Issued on June 15, 2007 - 41666660

ESOPs granted under the 2003 Plan 66320 -

ESOP forfeited 280170 -

Outstanding as at the end of the year 222096630 222310480



MAX INDIA LIMITED



Reconciliation of denominators used for calculating basic and diluted earnings per share


March 31, 2009 March 31, 2008

Denominator used for computing basic Earnings Per Share 22,19,98,514 21,31,18,796

Add :- Dilutive impact of -

- ESOPs granted/forfeited under the 2003 Plan 1,24,198 6,53,434

Denominator used for computing diluted Earnings Per Share 22,21,22,712 21,37,72,230


(RS. LACS)

Particulars As at Additions Adjustment Amortised As at

April 1, during March 31,

2008 the year 2009

Preliminary and Issue Expenses 0.66 - - 0.59 0.07

(14.16) (-) (-) (13.50) (0.66)

Deferred Revenue Expenditure - - - - -

(6.00) (-) (-) (6.00) (-)

Deferred Employee Compensation * 645.17 245.59 (267.20) 238.39 385.17

(1130.85) (-) ((52.50)) (433.18) (645.17)

645.83 245.59 (267.20) 238.98 385.24

(1151.01) (-) ((52.50)) (452.68) (645.83)

* Amortisation has been charged to Salaries, Wages and Bonus.


Defined Benefit Plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity

on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance

company in the form of a qualifying insurance policy.

Unavailed leaves can be encashed (on Basic Salary) at the time of separation from the company.

The Company had adopted Accounting Standard, AS-15 (revised 2005), on employee benefits with effect from April 1, 2007.

Accordingly, the transitional obligation of the Company amounting to Rs. 187.13 Lacs (Net of tax of Rs. 53.99 Lacs) towards

gratuity and leave encashment liability has been charged off to General Reserve in the previous year.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded

status and amounts recognised in the balance sheet for the respective plans.

(RS. LACS)

Particulars Gratuity Leave Encashment

As at As at As at As at

31.03.2009 31.03.2008 31.03.2009 31.03.2008

Net employee benefit expense (recognised in Employee Cost)

Service cost 316.78 196.55 183.48 148.28

Interest cost 73.28 48.20 41.38 31.20

Expected return on plan assets (45.30) (34.59) - -

Actuarial (gain)/loss 227.91 90.29 (16.54) (15.26)

Net cost 572.67 300.45 208.32 164.22



MAX INDIA LIMITED



Details of Provision for gratuity and Leave Encashment Benefits

Present value of the obligation 1372.87 916.27 647.67 517.20

Fair value of plan assets 729.48 542.62 - -

Liability recognized at the year end 643.39 373.65 647.67 517.20

Change in present value of the defined benefits obligation are as follow:

Obligations (Opening balance) 916.26 610.36 517.20 390.01

Service Cost 316.78 196.55 183.48 148.28

Interest cost 73.28 48.20 41.38 31.20

Benefits paid (104.63) (42.19) (77.85) (37.58)

Actuarial (gain)/loss 171.18 103.34 (16.54) (14.71)

Obligation (Closing Balance) 1372.87 916.26 647.67 517.20

Change in the fair value of plan assets are as follow:

Fair value of plans assets (Opening balance) 542.62 419.62 - -

Expected return on plan assets 45.43 34.59 - -

Actuarial gain/(loss) (56.86) 13.05 - -

Contribution 302.54 117.56 - -

Benefits paid (104.25) (42.19) - -

Fair value of plan assets (Closing balance) 729.48 542.62 - -

The Company expects to contribute NIL to gratuity in 2009-10.

The major categories of plan assets as a percentage of the fair value of total plan assets are as follows

Life Insurance Corporation of India (For all subsidiaries except

Max New York Life Insurance Company Ltd (MNYL) who has

taken a policy from MNYL only) 100% 100% - -

Assumptions

Discount rate 7.80-8.00% 8.00% 7.80-8.00% 8.00%

Interest Rate 5.00-8.00% 8.00% 5.00-8.00% 8.00%

Estimated rate of return on plan assets 8.00-9.15% 9.15% N.A. N.A.

Salary Increase 5.00-15.00% 10.00% 5.00-15.00% 10.00%

Attrition rate 1% to 40% 1% to 5% 1% to 40% 1% to 5%

(Depending (Depending (Depending (Depending

on Age) on Age) on Age) on Age)

Leave availment in the service N.A. N.A. 5.00-10.00% 20.00%

Retirement age 58 years 58 years 58 years 58 years

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other

relevant factors, such as supply and demand in the employment market

Amounts for the current and previous year are as follows:

Defined benefit obligation 1372.86 916.26 647.67 517.20

Plan assets 729.48 542.63 - -

Surplus / (deficit) (643.38) (373.63) (647.67) (517.20)

Experience adjustments on plan liabilities 50.22 2.42 (205.24) (24.84)

Experience adjustments on plan assets (56.73) (31.35) - -


(RS. LACS)

Particulars Gratuity Leave Encashment

As at As at As at As at

31.03.2009 31.03.2008 31.03.2009 31.03.2008


MAX INDIA LIMITED



Defined Contribution Plans

During the year, the Company contributed Rs. 2099.54 Lacs (Previous year Rs. 1099.84 Lacs) for provident fund and Rs. 70.62 Lacs

(Previous year Rs. 69.76 Lacs) for superannuation fund which represents contribution to defined contribution plans.

Other Long Term Benefits

During the year, consequent to the adoption of AS-15 (revised 2005), the company recognized in the Profit and Loss account

Rs. 6.14 Lacs (previous year Rs 5.00 Lacs) for non-vesting compensated leaves and Rs. 7288.60 Lacs (Previous year Rs 4621.84 Lacs)

for deferred compensation for employees. Transitional liability towards deferred compensation amounting to Rs 994.11 Lacs has

been charged off in General Reserve in previous year.

19 Detail of Balances with Non-scheduled Banks

(RS. LACS)

Name of the Bank Balance as on Maximum Balance Maximum

March 31, 2009 Balance as on March Balance

Outstanding 31, 2008 Outstanding

during April 01, during April 01,

2008 to March 2007 to March

31, 2009 31, 2008

In Current Accounts

Wachovia Bank 9.88 47.06 7.39 31.95

Barclay Bank Plc 11.81 38.98 5.19 44.48

Rabo Bank 87.21 113.86 87.42 124.98

Total 108.90 100.00

20 Segment Reporting

(a) Business Segments

The Company has considered business segment as the primary segment for disclosure. The products/ services included in each

of the reported business segments are as follows:

• Speciality Plastic Products - The holding company’s manufacturing facility located at Railmajra, Nawanshar (Punjab),

produces packaging films supported with polymers of propylene, leather finishing transfer foils and related products.

• Life Insurance – This segment relates to the nation wide life insurance business carried out by one of the Company’s

subsidiaries.

• Healthcare Business – One of the Company’s subsidiaries is engaged in the delivery of healthcare services in the

national capital territory of Delhi through its primary and tertiary health care delivery centers. This also includes revenue

from leasing of medical and other equipments.

• Clinical Research – Consists of business activities relating to conduct of ethical medical research involved in drug

development process as a Clinical Research Service provider. The group of subsidiaries involved in this business segment

offer study management services, project management services, data base management services, monitoring services

and clinical trial pharmacy supply chain management services to the pharmaceutical, medical device, biotechnology

and Contact Research Organizations worldwide.

• Business Investments – This segment is represented by treasury investments.

• Healthcare Staffing – Includes business activities relating to sourcing, training and placing healthcare personnel in

India and abroad.

• Others – The leasing activities undertaken by one of the Company’s subsidiary are classified under this segment.

The above business segments have been identified considering:

(i) The nature of products and services

(ii) The differing risks and returns

(iii) Organisational structure of the group, and

(iv) The internal financial reporting systems.



MAX INDIA LIMITED



Segment Revenue consists of revenue from external customers and revenue from other segments.

Segment Result is the difference of segment revenue and segment operating expenses.

Unallocated Assets include assets pertaining to the holding company’s corporate office such as, loans, advance and deposits.

Unallocated Liabilities include tax provisions and interest bearing loans not directly related to any business segment.

Unallocated Expenses - Expenses incurred at corporate office of the holding company relate to various business segments. As

there is no reasonable basis of allocating this expenditure to various segments, the same are shown as unallocated reconciling

expenses. Interest expense is not treated as part of a segment expense and is reflected as a separate line item, except interest

on loans allocated to business segment.

The segment information has been prepared in conformity with the accounting policies adopted for preparing and presenting

these financial statements.

(b) Geographical Segments

The Company has considered geographical segment as secondary reporting segment for disclosure. For this purpose, the

revenues are bifurcated based on location of customers in India and outside India.

SEGMENT INFORMATION

PRIMARY SEGMENT (RS. LACS)

Particulars Speciality Healthcare Business Life Healthcare Clinical Others Total

Plastic Business Investment Insurance Staffing Research

Products Services Services

a. Segment Revenue from

Sales to External Customers 37003.51 4784.99 - - - - - 41788.50

(30343.88) (3755.12) (-) (-) (-) (-) (-) (34099.00)

Service Income 20.11 27171.81 - 381903.36 114.56 1397.03 - 410606.87

(133.30) (21549.76) (-) (269255.28) (251.77) (1029.92) (-) (292220.03)

Service/Interest Income from Inter Segments - 3040.83 287.15 - - 266.94 340.41 3935.33

(-) (2436.74) (26.85) (-) (-) (273.50) (328.72) (3065.81)

Income from Investment Activities - 2761.06 4421.76 25409.41 0.75 2.21 290.54 32885.73

(-) (984.40) (6880.16) (24561.25) (0.71) (2.93) (22.72) (32452.17)

Other Income 1.69 260.49 - 3001.64 35.86 25.20 152.21 3477.09

(118.53) (140.20) (-) (1596.97) ((3.23)) (101.93) (265.90) (2220.30)

Total Segment Revenue 37025.31 38019.18 4708.91 410314.41 151.17 1691.38 783.16 492693.52

(30595.71) (28866.22) (6907.01) (295413.50) (249.25) (1428.08) (597.54) (364057.31)

Less: Inter Segment Revenue 3935.33

(3065.81)

Segment Revenue from External Customers 488758.19

(360991.50)

Add: Unallocated Revenue 247.19

(22.63)

Add: Interest Income 138.76

(40.66)

Total Revenue 489144.14

(361054.79)



MAX INDIA LIMITED



b. Segments Results 4003.66 4754.38 4421.76 (40247.85) (267.54) 95.89 369.05 (26870.65)

(3912.75) (2676.02) (6880.00) ((10167.92)) ((441.88)) (62.87) (275.81) (3197.65)

Interest Income 138.76

(40.66)

Sub-total (26731.89)

(3238.31)

Less:

Unallocated Expenses 3911.74

(2813.61)

Interest Expenses 5057.40

(4731.04)

(Loss) before tax (35701.03)

((4306.34))

Provision for Taxation (Includes

Provision for Deferred Tax) (2383.56)

(1672.13)

(Loss) after Tax (33317.47)

((5978.47))

c. Carrying Amount of Segment Assets 28929.84 77547.68 14980.44 636948.14 98.87 1319.30 3628.75 763453.02

(26926.24) (74081.69) (106655.66) (421983.00) (243.86) (873.30) (2803.25) (633567.00)

Add: Unallocated Assets 19050.64

(3932.13)

Cost of Control 6986.19

(7389.82)

Total Assets 789489.85

(644888.95)

d. Segment Liabilities 2890.94 7461.17 - 558183.70 51.02 687.75 202.27 569476.85

(3175.14) (5429.32) (-) (378957.68) (112.04) (474.72) (265.11) (388414.01)

Add: Unallocated Liabilities 35745.75

(59836.29)

Total Liabilities 605222.60

(448250.30)

e. Cost to Acquire Tangible and

intangible Fixed Assets 1199.97 5382.71 - 24551.60 0.45 30.42 - 31165.15

(1745.54) (5129.86) (-) (8149.64) (33.05) (42.06) (13.30) (15113.45)

Unallocated 46.85

(107.34)

Total Addition 31212.00

(15220.79)

f. Depreciation and Amortisation Expenses 1134.14 1815.09 - 6515.98 39.84 57.96 66.65 9629.66

(1056.15) (1871.58) (-) (3438.88) (68.63) (66.29) (68.99) (6570.52)

Unallocated Depreciation and Amortization 71.85

(83.07)

Total Depreciation and Amortization 9701.51

(6653.59)





(RS. LACS)


MAX INDIA LIMITED



g. Non-cash Expenses other Than

Depreciation and Amortisation 109.54 302.00 - 537.43 55.25 72.78 5.26 1082.26

(32.74) (372.93) (0.16) (135.64) (0.40) (105.19) (18.47) (665.53)

Unallocated Non Cash Expenses 40.37

(11.26)

Total 1122.63

(676.79)

SECONDARY SEGMENT (RS. LACS)

Particulars India North Europe South Asia Total

America Canada America

Australia

a. Revenue from External Customers 480807.99 909.34 4142.57 808.81 2089.48 488758.19

(353420.97) (1049.11) (3167.99) (578.22) (2775.21) (360991.50)

b. Carrying Amount of Segment Assets by Location of Assets 757256.74 534.73 5426.33 - 235.22 763453.02

(626580.06) (321.80) (5245.98) (207.22) (1211.94) (633567.00)

c. Cost to Acquirer Tangible and Intangible Fixed Assets by Location of Assets 31164.51 0.64 - - - 31165.15

(15113.45) (-) (-) (-) (-) (15113.45)

21 Related Parties (as identified by the management) are classified as:

Key Management Personnel (Directors) Mr. Analjit Singh, Mr. B Anantharaman (till June 30, 2008)

Relatives of Key Management Personnel Mr. Veer Singh

Enterprises over Which Key Management Liquid Investments & Trading Company, New Delhi House Services Ltd., Medicare

Personnel have Significant Influence Investments Ltd., Maxopp Investments Ltd., Cheminvest Ltd., Pivet Finances Ltd.,

Lakeview Enterprises, Delhi Guest House Pvt Ltd., Trophy Holdings Pvt. Ltd., M.V.

Healthcare Services Pvt. Ltd., ND Callus Info Services Pvt. Ltd., Boom Investments Pvt.

Ltd., Malsi Holdings Ltd., Dynavest India Pvt. Ltd., Scorpio Beverages Pvt. Ltd., Trophy

Guest Houses & Resorts Pvt. Ltd., Trophy Estates Pvt. Ltd., Gaylord Impex Ltd., Pen

Investments Ltd., Mohair Investment, PVT Investment Ltd., Malsi Estates Ltd, TVP

Investments Pvt. Ltd., BAS Investments Pvt. Ltd., Vitasta Estate Pvt. Ltd., Terra Planet

Estate Pvt. Ltd., Doon Holiday Resorts Pvt. Ltd., Urban Space Consultants Pvt. Ltd.,

Max India Foundation, Capricorn Health Services Private Ltd., Leo Retailing and Health

Services Private Ltd., Nurture Health Services Pvt. Ltd., Capricorn Retailing and Services

Pvt. Ltd., Veer Health Services Pvt. Ltd., Wegmans Business Park Pvt. Ltd., Synergy

Infracon Pvt. Ltd., Max Speciality Products Ltd., Max Bupa Health Insurance Ltd.

(Effective September 5, 2008), Malsi Hotels Ltd. (Effective March 20, 2009), Bhai

Mohan Singh Foundation

Employee Benefit Funds Max India Ltd. Employees’ Provident Fund Trust, Max India Ltd. Superannuation Fund





(RS. LACS)


MAX INDIA LIMITED



Summary of significant related party transactions (as identified by the management) carried out in ordinary course of business are

as follows:

(RS. LACS)

Particulars Key Relatives of key Enterprises Employee

Management Management over Which Key Benefit Funds

Personnel Personnel Management

Personnel have

Significant

Influence

1 Fixed Assets Purchased - - 88.99 -

(-) (-) (-) (-)

2 Fixed Assets Sold - - 0.06 -

(-) (-) (16.75) (-)

3 Deposits and Advances Accepted / Given - - - -

(387.87) (-) (-) (-)

4 Loans Taken - - 55.00 -

(-) (-) (100.00) (-)

5 Loan Given - - 5550.00 -

(-) (-) (-) (-)

6 Incomes and Reimbursement

- Interest Income - - 270.30 -

(-) (-) (-) (-)

- Reimbursement of Expenses 21.73 1.49 309.95 -

(9.84) (0.62) (24.23) (-)

7 Expense

- Services / Other Expenses Received 1295.90 13.70 734.52 -

(481.57) (11.49) (448.64) (-)

- Interest Paid - - 19.48 -

(-) (-) (1.57) (-)

- Company’s Contribution to Trust - - - 115.85

(-) (-) (-) (97.59)

8 Amount Outstanding

- Against Loan Taken - - 155.00 -

(-) (-) (100.00) (-)

- Interest Payable - 7.68 -

(-) (-) (-) (-)

- Against Loan Given - - 800.00 -

(-) (-) (-) (-)

- Interest Receivable - - 53.55 -

(-) (-) (-) (-)

- Other Receivable 0.54 1.50 226.38 -

(622.47) (0.55) (4.08) (-)

- Other Payable - 0.33 23.20 -

(-) (-) (23.78) (-)

Other relevant information -

i) The above excludes sitting fees Rs. 16.44 Lacs (Previous year Rs. 8.90 Lacs) paid to non-executive diectors.

ii) Previous year’s figures are given in brackets.



MAX INDIA LIMITED



22 Leases

Accounting for leases has been done in accordance with Accounting Standard-19 issued by the ICAI. Following are the details of

lease transactions for the year:

(a) Finance Lease

The Company does not have any finance lease agreement.

(b) Operating Lease

(i) Lease rentals recognised in the profit and loss account for the year is Rs. 8766.07 Lacs (Previous year Rs. 4921.96 Lacs).

(ii) The Company has entered into operating leases for its office and for employees’ residence, vehicles for transportation,

furniture that are renewable on a periodic basis. The total of future minimum lease payments under non-cancellable

leases are as follows:

(RS. LACS)

March 31, 2009 March 31, 2008

Not later than one year 2738.99 748.18

Later than one year and not later than five year 3587.17 876.79

Later than five year - 228.81

Total 6326.16 1853.78

23 Movement in Policyholders’ Liability

(RS. LACS)


Opening Balance 322742.74 156709.19

Add: Transfer to reserve 163914.63 156664.14

Add: Bonus payable to policyholders 11881.13 9369.41


24 Max Medical Services Limited

(a) As at December 10, 2001 the company had entered into an agreement with a healthcare service provider to construct a

hospital building. The construction, as aforesaid had been completed and the building handed over as on March 31, 2005 to

the healthcare service provider for a consideration of Rs. 2431.00 Lacs. The said consideration is repayable in equal installments

over 26.5 years from the handover date. In addition, since the receipt of the consideration is spread over a long period, an

income amounting to Rs. 234.70 Lacs (Previous year Rs. 245.60 Lacs) which is based on a fixed percentage of the turnover of

the healthcare service provider has been accrued in these accounts and disclosed under Loans and Advances.

(b) The company had entered into an agreement with a healthcare service provider on December 10, 2001 for supply of medical,

other equipments and fixtures for an initial term of 30 years. Under the terms of the lease, the company is responsible for:

(i) Acquisition of equipment including its repair and servicing;

(ii) Ensuring adequate insurance coverage for the assets; and

(iii) Replacement of any existing equipment or suitable equipment in lieu thereof.

As per terms, lease rentals based on a fixed percentage of the turnover of the healthcare service provider are due to the

company on a monthly basis. Accordingly, as at March 31, 2009 an amount of Rs. 971.52 Lacs (Previous year Rs. 1228.02 Lacs)

has been accrued as lease rentals. The lease rent being contingent on turnover, hence cannot be quantified for any future

periods and disclosed under Sundry Debtors.



MAX INDIA LIMITED




25 QIP Issue Proceeds

Details of additions:

(RS. LACS)



Addition:

On allotment of shares to QIBs - 99999.98

Total 75730.39 99999.98

Utilizations:

Investment in subsidiary company 55500.00 22200.00

Advance against Investment in subsidiary company 800.00 -

Refund of Option Deposit to New York Life International 17420.55 -

Share issue expenses - 2069.59

Total 73720.55 24269.59


26 Preferential Issue Proceeds

Details of additions: (RS. LACS)



Addition:

On preferential allotment of share - 30000.00

Total 19156.04 30000.00

Utilizations:

Repayment of Loans 614.09 8393.40

Advance for purchase of Land 4992.42 1080.00

Loan to Subsidiaries 945.82 682.02

Loan to other healthcare service provider 3042.10 688.54

Total 9594.43 10843.96


Deposit with Scheduled Bank 1205.80 -

27 Securities Premium Account

(i) Details of additions:

(RS. LACS)


1. On preferential allotment of shares* - 2596.73

2. On allotment of shares to QIBs - 99166.65

3. Exercise of Stock Option 414.46 249.55

Total 414.46 102012.93

* Net of amount transfer to minority Nil (Previous year Rs. 1494.19 lacs)


MAX INDIA LIMITED




(ii) Details of utilization:

(RS. LACS)


1. Expenses on issuance of shares to QIBs - 2069.59

2. Fees for increase in authorized capital and other expenses 2.01 66.28

in connection with share issue*

Total 2.01 2135.87

* Adjusted for transfer to minority Rs. 2.01 Lacs (Previous year Rs. 28.33 Lacs)

28 During the year, Rs. 16.51 Lacs (Previous year Rs. 14.13 Lacs) has been charged to the profit and loss account relating to Research

and Development expenditure under the heads Raw Material – Consumed and Power & Fuel.

29 Additions/deletions in the schedule of Reserves and Surplus (Schedule 2) include adjustments in respect of consolidation level

accounting in accordance with Accounting Standard 21.

30 Clinical Trial Expenses related to Clinical Research Business (Refer Schedule 21) includes:

(RS. LACS)


1. Salaries, Wages and Bonus 384.36 257.12

2. Contribution to Provident and Other Fund 16.85 9.53

Total Personnel Expenses 401.21 266.89

31 On September 03, 2008, the Company signed a tripartite JVA with BUPA Finance Plc., UK and Mr. Analjit Singh for its proposed

health insurance business. Subsequently, Max Bupa Health Insurance Limited (“MBHIL”) has been incorporated on September 5,

2008 to operate the said business. In line with the guidelines issued by Insurance Regulatory and Development Authority, the initial

share capital of MBHIL will be Rs. 100 Crore. This will be contributed 50% by the Company, 24% by Mr. Analjit Singh and his

associates and 26% by BUPA Finance Plc., UK through its Indian subsidiary and other entities.

On January 13, 2009, the Company has contributed share application money amounting to Rs. 800.00 Lacs to MBHIL Also, during

the year, the Company incurred expenses amounting to Rs. 185.16 Lacs on behalf of MBHIL which are recoverable in terms of the

aforesaid JVA.

Consequently, the Board of Directors in their meeting held on June 26, 2009 have decided to invest upto 74% of equity shareholding

of MBHIL, subject to shareholders’ approval.

32 During the year, a Memorandum of Understanding (MOU) dated November 12, 2008 has been entered into amongst Government of

Punjab (“GOP”), Max India Group and Others (“the Founder Supporters”), together with Indian School of Business, Hyderabad

(“ISB”). As per the MOU, a second campus of ISB is purposed to be established in the Knowledge city at Mohali, with an equal

contribution from each of the Founder Supporters. The Board of Directors of Max India Limited and Max Healthcare Institute

Limited has recommended a contribution for an amount not exceeding Rs. 1666.67 Lacs each to this initiative over a period of 3-

4 years, subject to the shareholders approval, out of the total commitment of Rs. 5000.00 Lacs from Max India Group. Of the above,

a sum of Rs. 275.00 Lacs has been contributed during the year and included under the head Charity and Donation.

33 During the previous year, the Company received Rs. 50.00 lacs as capital subsidy from the Director of Industries, Government of

Punjab under “Punjab Industrial Incentives Code under the Industrial Policy, 1996” for substantial expansion during financial year

1996-97. The same has been accounted for as capital reserve.

34 Subsequent to the year end, the Board of Directors in their meeting held on May 15, 2009, approved the issuance of 10,326,311

equity shares of Rs 2/- each at a premium of Rs. 143.26 per equity share, aggregating to Rs. 15000.00 Lacs to International Finance

Corporation, Washington USA on a preferential basis. The same has been approved by the shareholders in an Extra-ordinary General

Meeting held on Friday, June 12, 2009.


MAX INDIA LIMITED



Consequently, the Company in the meeting of Allotment Committee of Directors held on June 19, 2009 allotted the said shares.

35 During previous year, Neeman Medical International N.V. (“Neeman NV”) sold 494,699 Common and Nominative Shares, representing

its entire 74.25% stake in Neeman Medical International Latin America, S.A. (“Neeman LA”), to Dr. Guillermo Rodriguez Gomez for

Rs. 105.10 Lacs. The loss on sale amounting to Rs. 104.94 Lacs being the difference between the proceeds from the disposal of

investment in Neeman LA and the carrying amount of the investment, net of provision against the said investment and accumulated

losses, had been charged to Profit and Loss account.

36 Max HealthStaff International Limited (MHS), a 100% subsidiary of the Company, is in the business of sourcing, training and

placing healthcare personnel in India and abroad more particularly in the United States. The placement of healthcare personnel in

United States is subject to availability of immigrant visas, which is currently unavailable given the visa retrogression in force.

Consequently, MHS has considerably scaled down its operations till the time further clarity on immigration laws emerges.

Accordingly, based on prudent accounting practices, the management has to write off the goodwill of Rs. 403.63 Lacs.

37 The Company’s subsidiary MNYL has entered into an agreement called “The Brand License and Technical Services Agreement (Brand

Agreement)” with New York Life Insurance Company and New York Life International, LLC for a duration of five years. The agreement

states total consideration of Rs. 36972.63 Lacs for grant of license and provision of technical services to MNYL over the tenure of

the agreement. During the current year, MNYL has recognised an expense of Rs. 5084.72 Lacs in Profit and Loss Account under the

head of “Branding, Advertisement & Publicity”, considering amortization of total consideration on straight line basis over the

tenure of the agreement.

38 Previous year’s figures have been regrouped/reclassified wherever necessary to conform to current year’s classification.

For and on behalf of the Board of Director

ANALJIT SINGH Chairman & Managing DirectorN. RANGACHARY DirectorASHWANI WINDLASS Director

New Delhi SUJATHA RATNAM Chief Financial ControllerJUNE 26, 2009 V. KRISHNAN Company Secretary



MAX INDIA LIMITED



Sta

tem

ent

purs

uan

t to

exe

mpti

on r

ecei

ved u

nder

Sec

tion 2

12 (

8)

of

the

Com

pan

ies

Act

, 1956 r

elat

ing t

o s

ubsi

dia

ry C

om

pan

ies

for

the

year

ended

Mar

ch 3

1, 2009

India

n S

ubsi

dia

ries

(Rs.

Lac

s)Fo

reig

n S

ubsi

dia

ries

(Rs.

Lac

s)

Par

ticu

lars

Max

New

York

Max

Max

Alp

sM

ax N

eem

anPhar

max

Max

Max

Nee

man

Nee

man

Max

Max

UK

Life

Insu

rance

Hea

lthca

reM

edic

alH

osp

ital

Med

ical

Corp

ora

tion

Ate

evH

ealt

hst

aff

Med

ical

Med

ical

Med

ical

Ltd.,

UK

Com

pan

y Lt

d.

Inst

itute

Ltd

.Ser

vice

s Lt

d.

Ltd.

Inte

rnat

ional

Ltd.

Ltd.

Inte

rnat

ional

Inte

rnat

ional

Inte

rnat

ional

Inte

rnat

ional

Ltd.

Ltd.

B.V

.N

.V.

Inc.

, U

SA

1Shar

e C

apit

al178,2

43.2

6 4

8,7

14.4

5 1

,414.2

5 5

.00

421.6

8 2

,055.7

7 3

,144.3

6 3

94.5

0 8

.26

26.8

1 3

66.0

8 2

13.0

0

2R

eser

ves

and S

urp

lus

400,8

35.5

7 2

,972.5

7 (

620.6

8)

(1,2

11.3

5)

(608.2

1)

(721.9

0)

(3,8

04.8

0)

(2,1

62.7

5)

5,7

23.3

5 3

,224.6

8 (

4,2

07.5

6)

(125.6

1)

3M

isce

llan

eous

Expen

dit

ure

to t

he

exte

nt

254.1

7 7

1.0

2 8

6.8

8 -

- -

- -

- -

- -

not

wri

tten

off

4To

tal

Ass

ets

635,5

96.4

5 8

1,8

52.3

5 1

9,1

44.8

7 4

,811.4

9 1

,318.1

1 3

,894.8

4 2

0.7

7 1

07.5

1 5

,742.5

3 3

,428.3

9 1

03.2

0 9

7.6

4

5To

tal

Liab

ilit

ies

56,7

71.7

930,2

36.3

5 1

8,4

38.1

8 6

,017.8

4 1

,504.6

4 2

,560.9

7 6

81.2

1 1

,875.7

6 1

0.9

2 1

76.9

0 3

,944.6

8 1

0.2

5

6D

etai

ls o

f In

vest

men

ts556,1

43.5

18,3

55.8

1 -

- -

721.5

2 -

- -

- -

-

(Oth

er t

han

inve

stm

ent

in s

ubsi

dia

ries

)

7Tu

rnove

r an

d O

ther

Inco

me

401,8

10.6

731,7

48.5

13,3

02.7

83,0

82.0

71,4

98.7

3717.6

14.9

9156.7

41.1

740.4

1268.0

660.6

1

8Pro

fit

Bef

ore

Tax

atio

n(3

9,3

01.5

6)

3,1

86.0

2(2

73.2

6)

(563.0

2)

99.6

3253.6

0(3

.32)

(267.8

4)

(11.3

6)

5.1

8(4

.04)

4.0

7

9Pro

visi

on f

or

Taxa

tion

-(1

,575.1

2)

(523.2

2)

5.9

1(2

2.3

5)

70.4

0-

2.6

5-

--

0.7

1

10

Pro

fit

Aft

er T

axat

ion

(39,3

01.5

6)

4,7

61.1

4249.9

6(5

68.9

3)

121.9

8183.2

0(3

.32)

(270.4

9)

(11.3

6)

5.1

8(4

.04)

3.3

6

11

Pro

pose

d D

ivid

end

--

--

--

--

--

--

Note

- I

n r

espec

t of

fore

ign s

ubsi

dia

ries

:

a)It

em N

os.

1 t

o 6

and 1

1 a

re t

ransl

ated

at

exch

ange

rate

s as

on 3

1st

Mar

ch, 2009 a

s fo

llow

s: P

ound S

terl

ing =

Rs.

74.1

579 a

nd U

S D

ollar

s =

Rs.

52.1

743

b)

Item

Nos.

7 t

o 1

0 a

re t

ransl

ated

at

annual

ave

rage

exch

ange

rate

s as

follow

s: P

ound S

terl

ing =

Rs.

79.5

601 a

nd U

S D

ollar

s =

Rs.

46.5

739

The

above

det

ails

hav

e bee

n a

nnex

ed i

n t

erm

s of

Lett

er N

o.4

7/3

64/2

009-C

L-II

I dat

ed M

ay 1

4, 2009 i

ssued

by

Gove

rnm

ent

of

India

, Min

istr

y of

Com

pan

y A

ffai

rs u

nder

Sec

tion 2

12(8

) of

the

Com

pan

ies

Act

, 1956.


MAX INDIA LIMITED




MAX INDIA LIMITED



Notes


contents · increase its capacity to around 1,800 beds by 2011. new hospitals on the anvil in the...

Documents