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Max India Limited ANNUAL REPORT 2008-09 2


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

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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)

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THE MARKET SHARE OF MNYL AMONGST

PRIVATE SECTOR INSURANCE COMPANIES

INCREASED BY 100 BASIS POINTS TO 6%


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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)

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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)

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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 �

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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.

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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

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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

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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:

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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:

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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

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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

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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

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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

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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


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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

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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

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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

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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:

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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):

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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.

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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

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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

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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

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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

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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.

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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

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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

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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.


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

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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

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�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.

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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


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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):

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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:�

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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:

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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

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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

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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

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(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


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


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

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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:

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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.

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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

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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

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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’

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MAX INDIA LIMITED


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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

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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

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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

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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




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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)

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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




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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

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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


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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


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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 -


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(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


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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



- 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

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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


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(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)

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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


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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.

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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.


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(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.


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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.


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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.


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(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


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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.


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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.


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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.


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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



Particulars As at As at As at As at

31.03.2009 31.03.2008 31.03.2009 31.03.2008

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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)


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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


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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)


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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


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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

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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.


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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


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(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)


(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

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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

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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.


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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


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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

√

√

√

√

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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

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JULY 3

0, 2009

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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




JUNE 26, 2009 Chartered Accountants

Auditors’ Report

2 Consolidated.p65 8/6/2009, 6:37 PM127

MAX INDIA LIMITED



(RS. LACS)



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



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


70227.77 62560.64



Profit and Loss Account 19488.37 -

738750.45 582328.31


Consolidated Balance Sheet as at March 31, 2009







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








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.








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)


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)


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 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


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





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



- 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



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.


(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


(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


(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


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


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.


(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


(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


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


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.




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)


EPS (Rupees) (10.15) (2.29)



Issued on June 15, 2007 - 41666660

ESOPs granted under the 2003 Plan 66320 -

ESOP forfeited 280170 -




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.



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


Service cost 316.78 196.55 183.48 148.28

Interest cost 73.28 48.20 41.38 31.20


Actuarial (gain)/loss 227.91 90.29 (16.54) (15.26)

Net cost 572.67 300.45 208.32 164.22



MAX INDIA LIMITED




Present value of the obligation 1372.87 916.27 647.67 517.20


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



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)



(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




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


(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)


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



(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



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MAX INDIA LIMITED




MAX NEW YORK LIFE INSURANCE COMPANY LIMITED

REGISTRATION NO: 104; DATE OF REGISTRATION WITH IRDA : NOVEMBER 15, 2000


Your directors have pleasure in presenting the Ninth Annual Report

of your Company with the audited accounts for the financial year

ended March 31, 2009.


Highlights for the year ended March 31, 2009 are as under:

(RS. IN CRORE)


(March 31, 2009) (March 31, 2008)

Income

Premium Income (net) 3819.0 2692.6

Income from Investments

- Policyholder (218.3) 224.1

- Shareholder 29.6 21.2


Total Income 3631.3 2938.3

Less: Expense


Operating expenses 1615.2 843.5

(excl. depreciation)


Benefits Paid 220.8 136.0

Provision for Reserves 1758.0 1660.3

Total Expenses 4050.8 3058.7

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

your Company. The total premium income for the year at Rs. 3857

crores grew at 42% over the previous year. Your Company sold

12,07,062 policies in 2008-09, which is 38% more than last year.

The cumulative sum assured crossed Rs. 93,500 crores growing at

40% over the corresponding period last year. The assets under

management rose to Rs. 5561 Crores, a growth of 50% over last

year. Renewal income grew by 80 % to Rs. 2014 crores.

GROWING DISTRIBUTION REACH

In a vast and diverse market like India, multi-channel distribution

is the key to any life insurance Company’s ability to reach its

customers across the length and breadth of the country. Your

Company has systematically pursued this strategy of growing reach.

Agency distribution is our core distribution channel which is,

complemented by partnership distribution, bancassurance, direct

selling teams and a dedicated channel for emerging markets. A

decision to increase the width and depth of distribution was taken,

based on mapping of top 500 cities in the country basis their

business potential and our existing reach.

During the financial year 2008-09, your Company significantly

expanded the distribution reach by opening 279 agency offices, 95

offices for emerging markets and 10 DST offices. In addition, your

Company tied up with Indian Oil Corporation and opened 124 sales

offices at its Kisan Sewa Kendras in Punjab, Haryana and Uttar

Pradesh. The number of agent advisors reached 84,651, up by 129%

over last year. The emerging markets channel also grew stronger

with 95 offices and recorded a new business growth of 81%. Your

Company signed up 10 new partnership distribution relationships,

and 10 new bancassurance relationships with urban and rural

cooperative banks.

Your Company now has a network of 705 offices as on March 31,

2009.

COMPREHENSIVE PRODUCT PORTFOLIO

Your Company further strengthened its product portfolio by

launching two new products and making its portfolio competitive

and comprehensive. The Company now offers a complete range of

protection and savings plans including in the high potential areas

of health and retirement. The new products launched in the previous

financial year also grew rapidly and contributed to 37% of your

Company’s annualised first year premium.

With customers getting more aware and looking for best value

propositions with features and options to maximize benefits and

offer best in class investment fund choices, your Company launched

SMART Assure. It is a regular contribution unit linked plan with

innovative features like Dynamic Fund Allocation for life stage based

asset allocation and the Dynamic Opportunities Fund, which

rebalances the assets depending on market conditions thereby

stabilizing and maximizing the investment returns. The product

has been well accepted by the market.

With the need of more customized product solutions for partnership

distribution, your Company launched Unit Builder, a regular

premium Unit Linked product for the mid market segment.

Need for capital protection and guaranteed return is another

industry trend which is visible in savings oriented products. We

believe return and capital guarantees should be backed by

appropriate asset class. Keeping the need for capital preservation

and growth in mind your Company plans to launch Smart Express,

a flexible unit-linked plan that has been specially designed to

address these needs of consumers. The product allows the

policyholders to move to high growth equity oriented funds when

there is better market visibility and participate in India’s growth

story. Your Company also plans to launch a new product platform

Directors’ Report

3 MNYL 1.p65 8/19/2009, 12:31 PM173




with guaranteed accumulation benefit along with the transparency

and flexibility of a Unit Linked solution.

MAX VIJAY – A BUSINESS MODEL FOR UNDERSERVED MARKETS

Your Company seeks to revolutionize the way life insurance is

procured, sold and serviced through its new and innovative business

model called – ‘MAX VIJAY’. It not only fulfills the customers’ primary

need of protection, but also facilitates long-term savings. It has

been designed specifically for the underserved segment of the

society to meet the unique challenges of unpredictability in life

and their income flow. Max Vijay, available in three premium paying

options of ‘Rajat’, ‘Swarna’ and ‘Heera’ enables the customer to

enter the plan at a minimal initial premium amount of Rs. 1000,

Rs. 1500 and Rs. 2500 respectively. Max Vijay provides customers

the flexibility in financial planning by offering a choice to invest

any amount, anytime, anywhere. A unique technology driven

distribution and service model ensures reach of Max Vijay to the

customers even in the remotest of places. 25 distribution

relationships were entered into for Max Vijay Products.

STRENGTHENING THE BRAND

In a market with over 20 players, a strong brand is a definite asset.

To provide a more dynamic and youthful image to the brand, your

Company launched its new brand positioning with the new tagline

‘Karo Zyaada Ka Iraada’. It represents 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.

A series of new campaigns were rolled out in multiple mediums

and languages. Brand awareness rose from 63% to 74% in the

period of one year. The advertising campaigns received a lot of

acclaim and were adjudged among the Top 10 advertisements in

the year.

The focus of marketing campaign execution was on innovation.

Taking a proactive stance, your Company was the Associate Sponsor

for inaugural Indian Premier League cricket tournament, which

received high television ratings and was one of most efficient media

buys. A tie-up with Indian Railways ensured that your Company’s

message traveled across the length of the country from Delhi to

Chennai, Trivandrum and Bangalore The updated website of the

Company was also rated the best for design and the second-best

for usability.

All these efforts culminated in your Company being recognized as

a “Superbrand” for the year 2009-10.

BUILDING SUPERIOR CUSTOMER EXPERIENCES

Providing superior customer experience is one of cornerstones of

your Company’s vision of becoming the most admired life insurance

Company in India. In addition, the growth in renewal premium

clearly indicated that your Company has been successful in building

a long term relationship with its customers.

Leveraging technology to provide customers with convenient and

seamless access to information at all times was a theme pursued

aggressively in 2008-2009. A slew of new customer technologies

were launched to strengthen customer experiences.

In addition, several initiatives were commenced to bolster renewal

collections - regionalization of customer communication, SMS alerts

for payment reminders, auto-debit facility, internet payment

options, dedicated Business Recovery Unit, tie up with India Post

for payment options etc.

Your Company further improved its reputation of best-in-class

claims processing, through claims process reengineering, set-up of

regional claims support unit, jet processing for accident claims,

availability of claims’ forms on channel partners’ intranet,

regionalization of claims communication, changes to the

investigation grid etc.

BONUS PAYMENT

The Company declared bonuses (dividends) based on the underlying

performance of the participating fund for the year 2008-09. The

bonus is payable in respect of eligible policies on third and greater

policy anniversaries falling due in the 12 months period commencing

1st July, 2009.

BUILDING STRONG HUMAN RESOURCES

Your Company further strengthened its human capital. It has built

a large, strong and engaged talent pool. Gallup employee

engagement survey 2008 shows that MNYL has the highest

employee satisfaction, advocacy and loyalty scores amongst the

Insurance and Financial banking services sectors in India and is

amongst top 25 percent highly Engaged Companies worldwide.

The total employee strength of your Company rose to 15,402 spread

over 705 offices across 414 cities and grew at 101%. Your Company

has won great industry recognitions by being ranked the 7th best

place to work in India by Business Today-Mercer Survey 2008 and

by winning Gallup Great Workplace Award 2009, a global award

recognizing MNYL as an organization with highly engaged

employees. It has invested in attracting and developing its human

Directors’ Report

3 MNYL 1.p65 8/19/2009, 12:31 PM174




capital by focusing on domain knowledge and leadership skills,

values and performance culture.

CORPORATE SOCIAL REPONSIBILITY (CSR)

Your Company initiated its CSR program to make a difference to the

society it operates in and to secure the future of the country. Since

inception, MNYL has been working with the SOS Children’s Villages

of India to help protect the future of underprivileged children. In the

Financial year 2008-09 your Company worked closely with Max India

Foundation, the newly set up CSR arm of Max India group contributing

Rs 2,50,00,000/- for multiple immunization and other health camps.

SHARE CAPITAL

During the year, the paid up share capital of the Company has

increased to Rs. 1782 Crore. Your Company continues to be one of

the well capitalized private life insurance companies in India.

SOLVENCY

Your Company has met the solvency margin requirements as per

IRDA norms.

DIRECTORS

During the year, Messrs B. Anantharaman, Ravi Akhoury, N. C.

Singhal, Sunil Sharma and S. S. Baijal resigned from the Board w.e.f

May 17, 2008, September 29, 2008, November 11, 2008, December

31, 2008 and March 12, 2009, respectively.

Mr. Gary Bennett ceased to hold office of Chief Executive Officer

and Managing Director w.e.f. October 31, 2008.

Your Directors place on record their appreciation for the valuable

contribution made by Messrs B. Anantharaman, Ravi Akhoury, Gary

Bennett, N. C. Singhal, Sunil Sharma and S. S. Baijal during their

association with the Company as directors.

The Board appointed Mr. Richard Mucci as additional director with

effect from September 29, 2008. Mr. Richard Mucci is the chairman

and CEO of New York Life International, LLC. Pursuant to Section

260 of the Companies Act, 1956, Mr. Mucci holds office only up to

the date of the ensuing Annual General Meeting. The Company has

received a notice from a member proposing the candidature of Mr.

Mucci for appointment as Director.

The Board appointed Dr. Omkar Goswami as additional director

with effect from December 3, 2008. Dr. Goswami is founder and

Chairman of CERG Advisory Private Limited, which is a corporate

advisory and consulting firm. Pursuant to Section 260 of the

Companies Act, 1956, Dr. Goswami holds office only up to the date

of the ensuing Annual General Meeting. The Company has received

a notice from a member proposing the candidature of Dr. Goswami

for appointment as Director.

The Board appointed Mr. Rajesh Sud as additional director and Chief

Executive Officer & Managing Director with effect from November

1, 2008. Mr. Rajesh Sud is a founder team member of the Company

and has been instrumental in establishing the distribution footprint

across India. Pursuant to Section 260 of the Companies Act, 1956,

Mr. Sud holds office as additional director only up to the date of

the ensuing Annual General Meeting. The Company has received a

notice from a member proposing the candidature of Mr. Sud for

appointment as Director.

The Board appointed Mr. Rajit Mehta as additional director and

Executive Director & Chief Operating Officer with effect from

November 1, 2008. Mr. Rajit Mehta is a founder member of the

Company and has helped the Company put in place sound HR

practices and has also contributed to business through strategic

initiatives like Growth Leadership and Project - Vijay. Pursuant to

Section 260 of the Companies Act, 1956, Mr. Mehta holds office as

additional director only up to the date of the ensuing Annual General

Meeting. The Company has received a notice from a member

proposing the candidature of Mr. Mehta for appointment as Director.

The Board appointed Ms. Marielle Theron as additional director

with effect from May 5, 2009. Ms. Theron is an actuary and a

Principal of Erlen Street Corporation, which specializes in strategic

investment and management consulting solutions. She has over

25 years’ experience in the financial services industry across Europe,

Asia, Australia, and New Zealand. Pursuant to Section 260 of the

Companies Act, 1956, Ms. Theron holds office only up to the date

of the ensuing Annual General Meeting. The Company has received

a notice from a member proposing the candidature of Ms. Theron

for appointment as Director.


the Articles of Association of the Company, Mr. Rajesh Khanna and

Mr. Anuroop Singh retire by rotation, and being eligible have offered

themselves for reappointment.

BOARD COMMITTEES

The Board has constituted the following Committees :

1. Audit Committee, comprising of :

- Mr. John Harrison – Non executive director

- Mr. Rajesh Khanna – Non executive director

- Mr. Rajesh Sud – Chief Executive Officer and Managing

Director

- Ms. Marielle Theron – Non executive director

Directors’ Report

3 MNYL 1.p65 8/19/2009, 12:31 PM175




Mr. John Harrison is the Chairman of the Committee. The Committee

met four times in the last financial year. The Committee exercises

review and oversight of statutory and external audits and

inspections, internal audit function, compliance with legal &

regulatory procedures, internal control systems and financial

controls.

2. Investment Committee, comprising of :

- Mr. Rajesh Sud - Chief Executive Officer and Managing

Director

- Dr. Omkar Goswami – Non executive Director

- Mr. John Harrison - Non executive Director

- Ms. Marielle Theron – Non executive Director

- Mr. John Poole – Appointed Actuary

- Mr. Sunil Kakar – Chief Financial Officer

- Mr. Prashant Sharma – Chief Investment Officer

- Mr. Mohit Talwar – Director Corporate Development, Max

India Limited

- Mr. Stanley Tai – Chief Investment Officer, New York Life

International

Ms. Marielle Theron is the chairperson of the Investment Committee.

The Investment Committee met four times last financial year. The

Committee reviews the investment policy of the Company and

recommends the same to the board and carries out a quarterly

review of the investment function and fund performance of the

Company.

3. Product Approval and Actuarial Committee, comprising of :

- Mr. Richard Mucci – Non executive Director

- Ms. Marielle Theron – Non executive director

- Mr. Rajesh Sud – Chief Executive Officer and Managing

Director

- Mr. Craig Merdian – Chief Financial Officer, New York

Life International

- Mr. John Poole – Appointed Actuary

Mr. Richard Mucci is the Chairman of the Committee. The

Committee is responsible for reviewing various actuarial reports to

be submitted to IRDA, recommending levels of dividend to be paid

to participating policyholders and is in charge of product

introduction, variation and withdrawal.

4. HR Compensation and Organisation Committee, comprising

of:

- Mr. Analjit Singh – Non executive director

- Mr. Richard Mucci – Non executive director

- Mr. P. Dwarkanath – Director Group, Human Capital –

Max India Ltd.

Mr. Analjit Singh is the Chairman of the Committee. The Committee

is responsible for review of the compensation philosophy, bonus

criteria and equity based compensation plans and recommend the

same for the approval of the board.

AUDITORS

The Joint Auditors M/s. Thakur Vaidyanath Aiyar & Co., Chartered

Accountants retire at the conclusion of the ensuing Annual General

Meeting and have expressed their willingness to be re-appointed

at the forthcoming Annual General Meeting. The Company has

received certificate from M/s Thakur Vaidyanathan Aiyar & Co. that

their appointment as auditors, if made, will be in accordance with

the limits specified under Section 224 (1B) of the Companies Act,

1956.

The Joint Auditors M/s. Ray & Ray, Chartered Accountants retire at

the conclusion of the ensuing Annual General Meeting and have

expressed their unwillingness to be re-appointed at the Annual

General Meeting.

M/s Price Waterhouse & Co., Chennai, Chartered Accountants are

proposed to be appointed as joint auditors of the Company at the

ensuing Annual General Meeting. The Company has received

certificates from M/s Price Waterhouse & Co., Chennai that their

appointment as auditors, if made, will be in accordance with the

limits specified under Section 224 (1B) of the Companies Act, 1956.

PARTICULARS OF DEPOSITS

The Company has not accepted any deposits under Section 58A of

the Companies Act, 1956.


The information required under section 217(2A) of the Companies

Act, 1956, read with Companies (Particular of Employees) Rules,

1975, forms part of this report as Annexure A. However, as permitted

by Companies Act, 1956, this Annual Report is being sent to all

shareholders excluding the said Annexure. Any shareholder

interested in obtaining the particulars may obtain it by writing to

the Company Secretary at the registered office of the Company.


Pursuant to Section 217(2AA) of the Companies Act, 1956, your

Directors hereby confirm that:

1. In the preparation of the Annual Accounts for the year ended

March 31, 2009, the applicable accounting standards have

been followed along with proper explanation, relating to any

material departures.

Directors’ Report

3 MNYL 1.p65 8/19/2009, 12:31 PM176




2. Your Directors had selected such accounting policies and




financial year and of the Profit or Loss of the Company for

that period.

3. Your Directors had taken proper and sufficient care for the


with provisions of the Companies Act, 1956 for safeguarding

the assets of the Company and for preventing and detecting

fraud and other irregularities.

4. Your Directors have prepared the Annual Accounts on a going

concern basis.



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

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

as follows:

A. Conservation of Energy : NA

B. Technology Absorption : NA

C. Foreign Exchange Earnings and Outgo :

(RS. IN CRORES)

Year ended 31.03.2009

Earnings (including equity infusion) 201

Outgo 116

Activities relating to Exports, initiatives taken to NA

increase exports, develop New Export markets,

Export Plan etc.

ACKNOWLEDGMENTS

The directors wish to place on record their deep appreciation for

the hard work, dedicated efforts, teamwork and professionalism

shown by the employees and the Agents Advisors, which has enabled

the Company to successfully establish itself amongst the leading

private life insurance companies in India. Your directors also express

gratitude to the Insurance Regulatory and Development Authority

of India, the Reserve Bank of India, Central and State Governments

and the joint venture partners, Max India Limited and New York

Life International, LLC for their continued cooperation, support and

assistance.


MAY 27, 2009 ANALJIT SINGH Chairman

Directors’ Report

3 MNYL 1.p65 8/19/2009, 12:31 PM177




TO THE MEMBERS OF MAX NEW YORK LIFE INSURANCE COMPANY

LIMITED

1. We have audited the attached Balance Sheet of Max New

York Life Insurance Company Limited (‘Company’) as at March

31, 2009, the related Revenue Account, the Profit and Loss

Account and the Receipts and Payments Account of the

Company for the year ended on that date (hereinafter referred

to as “financial statements”), annexed thereto which we have

signed under reference to this report. These financial

statements are the responsibility of the management of the

Company. Our responsibility is to express an opinion on these

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 as

to whether the financial statements 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


statements presentation. We believe that our audit provides a


3. We report that:

(a) We have obtained all the information and explanations,

which, to the best of our knowledge and belief were

necessary for the purposes of our audit and have found

them to be satisfactory;

(b) As the Company’s accounting system is centralized, no

returns for the purposes of our audit are prepared at the

branches of the Company;

(c) The Balance Sheet, Revenue Account, Profit and Loss

Account and the Receipts and Payments Account referred

to in this report are in agreement with the books of

account;

(d) The actuarial valuation of liabilities for life policies in

force is the responsibility of the Company’s Appointed

Actuary. The actuarial valuation of these liabilities as at

March 31, 2009 has been certified by the Appointed

Actuary, and in his opinion, the assumptions for such

valuation are in accordance with the guidelines and norms

issued by the Insurance Regulatory and Development

Authority (IRDA) and the Actuarial Society of India in

concurrence with the Authority. We have relied upon the

appointed actuary’s certificate in this regard for forming

our opinion on the financial statements of the Company.

(e) On the basis of written representations received from the

Directors and taken on record by the Board of Directors

of the Company, no Director is disqualified, as at March

31, 2009, from being appointed as a Director in terms of

clause (g) of sub-section (1) of Section 274 of the

Companies Act, 1956;

(f) In our opinion, and to the best of our information and

according to the explanations given to us, proper books

of account as required by law have been maintained by

the Company so far as appears from our examination of

those books;

(g) In our opinion, and to the best of our information and

according to the explanations given to us, the investments

have been valued in accordance with the provisions of

the Insurance Act, 1938 and the Insurance Regulatory

and Development Authority (Preparation of Financial

Statements and Auditors’ Report of Insurance Companies)

Regulations, 2002 (‘the Regulations’) and orders /

directions issued by Insurance Regulatory and

Development Authority in this behalf;

(h) In our opinion, and to the best of our information and

according to the explanations given to us, the accounting

policies selected by the Company are appropriate and are

in compliance with applicable accounting standards

referred to under sub-section (3C) of Section 211 of the

Companies Act, 1956 to the extent applicable and with

accounting principles as prescribed in the Insurance

Regulatory and Development Authority (Preparation of

Financial Statements and Auditors’ Report of Insurance

Companies) Regulations, 2002 and orders/directions

issued by Insurance Regulatory and Development

Authority in this behalf.

(i) In our opinion and to the best of our information and

according to the explanations given to us, the Balance

Sheet, Revenue Account, Profit and Loss Account and the

Receipts and Payments Account together with the notes

thereon and attached thereto are prepared in accordance

with the provisions of the Insurance Regulatory and

Development Authority (Preparation of Financial

Statements and Auditor’s Report of Insurance Companies)

Regulations 2002, Insurance Act, 1938, the Insurance

Auditors’ Report

3 MNYL 1.p65 8/19/2009, 12:31 PM178




Regulatory and Development Act, 1999 and the

Companies Act, 1956, to the extent applicable and in the

manner so required and give a true and fair view in

conformity with accounting principles generally accepted

in India:

(i) of the state of affairs of the Company in so far as it

relates to the Balance Sheet as at March 31, 2009;

(ii) of the results of activities in so far as it relates to the

Revenue Account for the year ended March 31, 2009;

(iii) of the loss in so far as it relates to the Profit and Loss

Account for the year ended March 31, 2009; and

(iv) of the receipts and payments in so far as it relates to

the Receipts and Payments Account for the year

ended March 31, 2009.

4. Further, we certify to the best of our knowledge and belief

that:

(i) On the basis of our examination of books and records of

the Company and according to the information and

explanations given to us, we have reviewed the

management report and have found no apparent mistake

or material inconsistencies with the financial statements;

(ii) On the basis of our examination of books and records of

the Company and according to the information and

explanations given to us, and based upon management

representations and compliance certificates noted by the

audit committee, nothing has come to our attention which

causes us to believe that the Company has not complied

with the terms and conditions of registration stipulated

by the Insurance Regulatory and Development Authority.

R.N. ROY K.N. GUPTA

Partner Partner

Membership No. 8608 Membership No.9169

For and on behalf of For and on behalf of

Ray & Ray Thakur, Vaidyanath Aiyar & Co

Chartered Accountants Chartered Accountants

New Delhi

MAY 27, 2009

Auditors’ Report

3 MNYL 1.p65 8/19/2009, 12:31 PM179




In accordance with the information and explanations given to us and to the best of our knowledge and belief and based on our examination

of the books of account and other records maintained by Max New York Life Insurance Company Limited (‘Company’) for the year ended

March 31, 2009, we certify that:

1. We have verified the Company’s Cash balances and investments on the basis of certificates/confirmations received from the Company/

Custodians appointed by the Company and there are no securities relating to the Company’s loans. As at March 31, 2009, the

Company had no reversions and life interests;

2. The Company does not act as a trustee of any trust; and

3. No part of the assets of the policyholders’ funds has been directly or indirectly applied in contravention to the provisions of the

Insurance Act, 1938, relating to the application and investments of the policyholders funds.

This certificate is issued to comply with Schedule C of Insurance Regulatory and Development Authority (Preparation of Financial

Statements and Auditor’s Report of Insurance Companies) Regulations 2002, (‘the Regulations’), read with Regulation 3 of such Regulations

and may not be suitable for any other purpose.

R.N. ROY K.N. GUPTA

Partner Partner

Membership No. 8608 Membership No.9169

For and on behalf of For and on behalf of

Ray & Ray Thakur, Vaidyanath Aiyar & Co

Chartered Accountants Chartered Accountants

New Delhi

MAY 27, 2009

Auditors’ Certificate

3 MNYL 1.p65 8/19/2009, 12:31 PM180




(All Amounts in Thousands of Indian Rupees)

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

SOURCES OF FUNDSSHAREHOLDERS’ FUNDS:Share Capital 5 17,824,326 10,324,326

17,824,326 10,324,326

EMPLOYEE STOCK OPTION PLAN OUTSTANDING 79,941 74,750[Refer to Note II (j) on Schedule 16]

RESERVES AND SURPLUS 6 - -Credit/(Debit) fair value change account 7,850 92,545

Sub-Total 17,912,117 10,491,621

BORROWINGS 7 - -

POLICYHOLDERS’ FUNDS:

Credit/ (Debit) fair value change account - -

POLICY LIABILITIES(Refer to Note II (r) & (s) on Schedule 16)

- Participating Individual Life Policies 17,673,319 12,480,763- Participating Pension Policies 320,457 258,833- Non-Participating Individual Life Policies 917,116 524,440- Non-Participating Health Insurance Policies 18,128 -- Non-Participating Group Policies 203,052 229,361- Non-Participating Individual Linked Policies 370,006 187,317- Non-Participating Linked Pension Policies 2,926 5,298- Non-Participating Group Linked Policies - -

INSURANCE RESERVES - -

PROVISION FOR LINKED LIABILITIES- Non - Participating Individual Linked Policies

- Linked Liabilities 29,534,268 17,155,679- Fair Value Change (818,429) 28,715,839 510,457 17,666,136

- Non -Participating Linked Pension Policies- Linked Liabilities 1,567,617 863,381- Fair Value Change (130,306) 1,437,311 (23,090) 840,291

- Non - Participating Linked Group Policies- Linked Liabilities 200,205 81,367- Fair Value Change (4,508) 195,697 470 81,837

Sub-Total 49,853,851 32,274,276

FUNDS FOR FUTURE APPROPRIATIONS 169,460 433,523

TOTAL 67,935,428 43,199,420

APPLICATION OF FUNDS

INVESTMENTS

Shareholders’ Investments 8 5,229,050 4,167,294Policyholders’ Investments 8A 20,036,454 14,434,318ASSETS HELD TO COVER LINKED LIABILITIES 8B 30,348,847 18,588,264

Balance Sheet as at March 31, 2009 FORM A-BS

3 MNYL 1.p65 8/19/2009, 12:31 PM181




Balance Sheet as at March 31, 2009 FORM A-BS

LOANS 9 - -

FIXED ASSETS 10 3,248,733 1,576,069

CURRENT ASSETS

Cash and Bank Balances 11 246,596 193,707Advances and Other Assets 12 4,449,965 2,791,227

Sub-Total (A) 4,696,561 2,984,934

CURRENT LIABILITIES 13 5,650,221 4,676,754

PROVISIONS 14 26,958 9,542

Sub-Total (B) 5,677,179 4,686,296

NET CURRENT ASSETS (C) = (A) – (B) (980,618) (1,701,362)

MISCELLANEOUS EXPENDITURE(to the extent not written off or adjusted) 15 25,417 37,448

DEBIT BALANCE IN PROFIT AND LOSS ACCOUNT(SHAREHOLDERS’ ACCOUNT) 10,027,545 6,097,389

Total 67,935,428 43,199,420

SIGNIFICANT ACCOUNTING POLICIES 16AND NOTES TO THE ACCOUNTS


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

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

As per our report of even date attached

R.N. ROY K.N GUPTA ANALJIT SINGH ChairmanPartner Partner JOHN HARRISON DirectorMembership no. 8608 Membership no. 9169 RICHARD MUCCI Director

For and on behalf of For and on behalf of RAJESH SUD Managing Director & Chief Executive OfficerRay and Ray Thakur, Vaidyanath Aiyar & Co. RAJIT MEHTA Chief Operating and Principal OfficerChartered Accountants Chartered Accountants JOHN POOLE Chief Actuary (Appointed Actuary)

SUNIL KAKAR Chief Financial OfficerAJAY SETH Sr. Director -Legal & Compliance &

Company Secretary

New Delhi New Delhi GurgaonMAY 27, 2009 MAY 27, 2009 MAY 27, 2009

3 MNYL 1.p65 8/19/2009, 12:31 PM182




Profit and Loss Account for the year ended March 31, 2009 FORM A-PL

SHAREHOLDERS’ ACCOUNT (Non-technical Account)(All Amounts in Thousands of Indian Rupees)

Particulars Schedule Year Ended Year Ended

March 31, 2009 March 31, 2008

TRANSFER FROM THE POLICYHOLDERS’ ACCOUNT

- Participating Individual Life Policies (Technical Account) 108,726 77,754

- Participating Pension Policies (Technical Account) 1,393 1,369

- Non-participating Individual Life Policies (Technical Account) - -

- Non-participating Health Insurance Policies (Technical Account) - -

- Non-participating Group Policies - -

- Non-participating Individual Linked Policies - -

- Non-participating Linked Pension Policies - -

INCOME FROM INVESTMENTS

(a) Interest, Dividends & Rent - Gross 262,367 158,222

[Gross of tax deducted at source Rs. Nil (2008: Rs Nil)]

(b) Profit on sale/redemption of investments 65,354 63,502

(c) (Loss) on sale/ redemption of investments (55,014) (7,829)

(d) Amortisation of discount/(premium) 65,541 2,743

OTHER INCOME

- Miscellaneous income 301 119

Total ( A ) 448,668 295,880

EXPENSES OTHER THAN THOSE DIRECTLY RELATED

TO THE INSURANCE BUSINESS

Employees remuneration and welfare benefits

[Refer to Notes II (i), (j), (p) and (y) on Schedule 16] 47,179 35,387

Filing fees, rates and taxes 19,605 21,531

Donations 24,151 888

Others

- Interest and bank charges 20,345 9,284

- Advertisement and publicity (Refer to Note II (o) on Schedule 16) 508,469 -

- Other miscellaneous expenses 861 1,471

- Depreciation 163 192

Bad debts written off - -

Contribution to the Policyholders Account (Technical Account)

(Refer to Note II (q) on Schedule 16)

- Participating Individual Life Policies - -

- Participating Pension Policies - -

- Non-participating Individual Life Policies 643,362 6,609

- Non-participating Health insurance Policies 310,115 37,472

- Non-participating Group Policies 5,709 7,234

- Non-participating Individual Linked Policies 2,470,055 1,640,284

- Non-participating Linked Pension Policies 195,992 96,274

- Non-participating Linked Group Policies 90,569 3,433

3 MNYL 1.p65 8/19/2009, 12:31 PM183




PROVISIONS (OTHER THAN TAXATION)

(a) For diminution in the value of investments( Net) 42,249 5,138

(Refer to Note I (e) on Schedule 16)

(b) Provision for doubtful debts - -

(c) Others - -

Total (B) 4,378,824 1,865,197

Profit/(Loss) before tax (C)=(A)-(B) (3,930,156) (1,569,317)

Provision for Taxation - -

Profit/ (loss) after tax (3,930,156) (1,569,317)

Appropriations

(a) Balance at the beginning of the year (6,097,389) (4,528,072)

(b) Interim dividends paid during the year - -

(c) Proposed final dividend - -

(d) Dividend distribution on tax - -

(e) Transfer to reserves/ other accounts - -

Profit/(Loss) carried forward to the Balance Sheet (10,027,545) (6,097,389)

Earning per Share (Basic and Diluted) (2.76) (1.95)

[(Refer to Note II (x) on Schedule 16)]


SHAREHOLDER’S ACCOUNT (Non-technical Account)(All Amounts in Thousands of Indian Rupees)

Particulars Schedule Year Ended Year EndedMarch 31, 2009 March 31, 2008

Profit and Loss Account for the year ended March 31, 2009 FORM A-PL

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





Company Secretary


3 MNYL 1.p65 8/19/2009, 12:31 PM184




Revenue Account for the year ended March 31, 2009 FORM A-RA

(Refer Annexure to the Revenue Account)

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





Company Secretary


POLICY HOLDERS’ ACCOUNT (Technical Account)


YEAR ENDED MARCH 31, 2009

Particulars Schedule Participating Policies Non-Participating Linked Policies Total(Non-Linked) Policies (Non-Linked)

Individual Pension Individual Health Group Linked Linked LinkedLife Life Insurance Individual Pension Group

Premiums earned-net 1 10,886,717 85,463 376,217 254,652 204,627 25,319,058 1,271,215 174,642 38,572,591Less : Reinsurance Ceded 118,248 - 49,097 36,243 59,730 118,936 - - 382,254Add : Reinsurance Accepted - - - - - - - - -

10,768,469 85,463 327,120 218,409 144,897 25,200,122 1,271,215 174,642 38,190,337Income from Investments(a) Interest, Dividends & Rent - Gross 1,190,219 34,471 54,804 138 27,863 768,160 34,826 7,358 2,117,839(b) Profit on sale/ redemption of investments 12,887 - - - - 1,146,370 32,229 8,556 1,200,042(c) (Loss) on sale/ redemption of investments (2,925) - - - - (3,949,957) (149,712) (15,077) (4,117,671)(d) Transfer/ Gain on revaluation/change in fair value * - - - - - (1,328,886) (107,215) (4,978) (1,441,079)(e) Amortisation of discount/(premium) 58,454 (191) (430) - (193) 13 14 - 57,667Other IncomeContribution from the Shareholders’ Account - - 643,362 310,115 5,709 2,470,055 195,992 90,569 3,715,802Miscellaneous Income 2,960 5 284 270 47 5,389 463 44 9,462

Total (A) 12,030,064 119,748 1,025,140 528,932 178,323 24,311,266 1,277,812 261,114 39,732,399Commission 2 1,054,781 922 51,459 50,958 4,175 2,705,514 47,589 367 3,915,765Operating Expenses related to Insurance Business 3 4,502,777 7,929 521,086 449,137 155,815 9,727,788 625,075 99,964 16,089,571Provision for doubtful debts 4,013 8 468 400 106 7,635 487 99 13,216Bad debts written off 177 - 21 18 5 336 21 4 582Provision for Tax - Fringe Benefit Tax 24,120 46 2,813 2,401 635 45,895 2,924 596 79,430Provision (other than taxation)(a) For diminution in the value of investments (Net) - - - - - - - - -(b) Others - - - - - - - - -

Total (B) 5,585,868 8,905 575,847 502,914 160,736 12,487,168 676,096 101,030 20,098,564Benefits Paid (Net) 4 1,432,747 22,056 56,617 7,890 43,896 591,706 7,068 46,224 2,208,204Interim Bonuses Paid - - - - - - - - -Change in valuation of liability against life policies in force:(a) Gross ** 5,200,704 61,624 407,469 38,028 (21,116) 11,232,392 594,648 113,860 17,627,609(b) (Amount ceded in Reinsurance) (8,148) - (14,793) (19,900) (5,193) - - - (48,034)(c) Amount accepted in Reinsurance - - - - - - - - -

Total (C) 6,625,303 83,680 449,293 26,018 17,587 11,824,098 601,716 160,084 19,787,779

SURPLUS/ (DEFICIT) (D)= (A) - ( B ) - (C) (181,107) 27,163 - - - - - - (153,944)

Opening balance of Funds available for Future Appropriation 345,102 88,409 - - - - - - 433,511

SURPLUS / (DEFICIT) AVAILABLE FOR APPROPRIATION 163,995 115,572 - - - - - - 279,567

APPROPRIATIONSTransfer to Shareholders’ Account 108,726 1,393 - - - - - - 110,119Transfer to Other Reserves - - - - - - - - -Funds available for Future Appropriations 55,269 114,179 - - - - - - 169,448

Insurance reserve carried to the Balance Sheet - - - - - - - - -

Details of Surplus(a) Interim Bonus Paid - - - - - - - - -(b) Allocation of Bonus to Policyholders [Refer to Note II (r) on Schedule 16] 1,174,106 14,007 - - - - - - 1,188,113(c) Surplus Shown in the Revenue Account 163,995 115,572 - - - - - - 279,567(d) Total Surplus : [(a)+(b)+(c)] 1,338,101 129,579 - - - - - - 1,467,680

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS 16* Represents the deemed realised gain/(loss) as per norms specified by the Authority** Represents Mathematical Reserve considering allocation of BonusAs required by Section 40 B(4) of the Insurance Act, 1938 we certify that all expenses of management in respect of life insurance business in India by the Insurer have been fully debited to Policyholders’ Revenue Accountas expenses.

3 MNYL 1.p65 8/19/2009, 12:31 PM185




Revenue Account for the year ended March 31, 2008 FORM A-RA

POLICY HOLDERS’ ACCOUNT (Technical Account)



Particulars Schedule Participating Policies Non-Participating Linked Policies Total(Non-Linked) Policies (Non-Linked)

Individual Pension Individual Health Group Linked Linked LinkedLife Life Insurance Individual Pension Group

Premiums earned - netPremiums 1 9,023,253 87,192 230,579 40,936 437,544 16,519,333 748,278 58,931 27,146,046Less : Reinsurance Ceded 82,721 - 23,824 - 53,248 60,724 - - 220,517Add : Reinsurance Accepted - - - - - - - - -

8,940,532 87,192 206,755 40,936 384,296 16,458,609 748,278 58,931 26,925,529Income from Investments(a) Interest, Dividends & Rent - Gross 818,767 18,231 40,428 - 16,168 292,063 12,591 2,536 1,200,784(b) Profit on sale/ redemption of investments 3,724 - - - 16 1,097,247 40,693 3,492 1,145,172(c) (Loss) on sale/ redemption of investments - - - - - (266,159) (14,561) (833) (281,553)(d) Transfer/ Gain on revaluation/change in fair value * - - - - - 200,340 (27,207) 510 173,643(e) Amortisation of discount/(premium) 3,581 (118) (668) - 160 61 14 - 3,030Other IncomeContribution from the Shareholders’ Account - - 6,609 37,472 7,234 1,640,284 96,274 3,433 1,791,306Miscellaneous Income 1,010 4 53 22 47 2,317 109 2 3,564

Total (A) 9,767,614 105,309 253,177 78,430 407,921 19,424,762 856,191 68,071 30,961,475Commission 2 1,049,238 1,015 32,080 11,808 2,360 2,712,410 35,686 10 3,844,607Operating Expenses related to Insurance Business 3 3,045,008 6,213 38,163 66,115 193,172 5,084,069 212,568 8,001 8,653,309Provision for doubtful debts 3,727 9 1 89 287 5,583 293 13 10,002Bad debts written off 39 - - 1 3 58 3 - 104Provision for Tax - Fringe Benefit Tax 17,471 43 7 417 1,348 26,175 1,372 58 46,891Provision (other than taxation)(a) For diminution in the value of investments( Net) - - - - - - - - -(b) Others - - - - - - - - -

Total (B) 4,115,483 7,280 70,251 78,430 197,170 7,828,295 249,922 8,082 12,554,913Benefits Paid (Net) 4 1,056,961 20,009 43,297 - 37,498 198,933 269 3,112 1,360,079Interim Bonuses Paid - - - - - - - - -Change in valuation of liability against life policies in force:(a) Gross ** 4,200,423 57,756 149,930 - 187,158 11,397,534 606,000 56,877 16,655,678(b) (Amount ceded in Reinsurance ) (28,117) - (10,301) - (13,905) - - - (52,323)(c) Amount accepted in Reinsurance - - - - - - - - -

Total ( C ) 5,229,267 77,765 182,926 - 210,751 11,596,467 606,269 59,989 17,963,434SURPLUS/ (DEFICIT) ( D )= ( A) - ( B ) - ( C ) 422,864 20,264 - - - - - - 443,128Deficit at the beginning of the year - - - - - - - - -

SURPLUS / (DEFICIT) AVAILABLE FOR APPROPRIATION 422,864 20,264 - - - - - - 443,128

APPROPRIATIONSTransfer to Shareholders’ Account 77,754 1,369 - - - - - - 79,123Transfer to Other Reserves - - - - - - - - -Funds available for Future Appropriations 345,110 18,895 - - - - - - 364,005

Insurance reserve carried to the Balance Sheet - - - - - - - - -

Details of Surplus(a) Interim Bonus Paid - - - - - - - - -(b) Allocation of Bonus to Policyholders [Refer to Note II (r) on Schedule 16] 923,740 13,201 - - - - - - 936,941(c) Surplus Shown in the Revenue Account 422,864 20,264 - - - - - - 443,128(d) Total Surplus : [(a)+(b)+(c)] 1,346,604 33,465 - - - - - - 1,380,069

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS 16* Represents the deemed realised gain/(loss) as per norms specified by the Authority** Represents Mathematical Reserve considering allocation of BonusAs required by Section 40 B(4) of the Insurance Act, 1938 we certify that all expenses of management in respect of life insurance business in India by the Insurer have been fully debited to Policyholders’ Revenue Accountas expenses.

(Refer Annexure to the Revenue Account)

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





Company Secretary


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Particulars Year Ended Year EndedMarch 31, 2009 March 31, 2008

CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers 38,447,726 27,214,919Amount received in Advance from customers (250,744) 718,658Commission paid to agents (3,564,321) (3,974,264)Claims Paid to policyholders (2,298,846) (1,487,568)Claims Recovered from Reinsurers 86,191 18,384Reinsurance Premium Paid (259,792) (89,670)Payments/advances to suppliers/employees (16,774,552) (8,110,575)Deposit recovered / given from / to RBI - -

Cash deployed in operations 15,385,662 14,289,884

Wealth tax paid (484) (496)Fringe Benefit Tax Paid (81,389) (46,558)Gratuity Paid (29,759) (11,473)

Net cash deployed in operating activities 15,274,030 14,231,358

Cash flows from investing activitiesPurchase of fixed assets (2,206,903) (1,016,465)Proceed from sale of fixed assets 12,200 8,323Purchase of Investments (including policy loans) (139,402,094) (70,594,741)Proceeds from sale/maturity of investments 116,644,238 53,020,828Interest received 2,231,418 1,147,549Tax deducted at Source - -

Net cash from investing activities (22,721,141) (17,434,504)Cash flows from financing activitiesProceeds from issuance of share capital 7,500,000 3,000,000Interest paid - -

Net cash generated from financing activities 7,500,000 3,000,000

Net increase/ (decrease) in cash and cash equivalents 52,889 (203,146)Cash and cash equivalents at beginning of year 193,707 396,853Cash and cash equivalents at end of year 246,596 193,707

Notes :1. The above Receipts and Payments Account has been prepared under the “Direct Method” as set out in the Accounting Standard-3 on Cash Flow Statement issued by The

Institute of Chartered Accountants of India , as prescribed by Insurance Regulatory & Development Authority (Preparation of Financial Statements and Auditors Report ofInsurance Companies ) Regulations, 2002.

2. Figures in parenthesis represent cash outflows.3. Previous year’s amounts have been reclassified wherever necessary to conform to current year’s classification.4. Cash and cash equivalents at the end of the year consist of cash, cheques in hand, stamps in hand and balance with banks.


Cash in hand 65,865 -Stamps in hand 1,986 -Cheques in hand - -Balance with banks- Current Account (including Remittances in Transit) 178,745 193,707

Total 246,596 193,707

Receipts and Payments Account for the year ended March 31, 2009

As per our report of even date attached For and on behalf of the Board of Directors




Company Secretary


3 MNYL 1.p65 8/19/2009, 12:31 PM187




Schedules annexed to and forming part of the financial statements


SCHEDULE - 1

PREMIUM

(Refer to Note I (a) on Schedule 16)


Particulars Participating Policies Non-Participating Linked Policies Total

(Non-Linked) Policies (Non-Linked) (Refer Annexure to the Revenue Account)

Individual Pension Individual Health Group Linked Linked Linked

Life Life Individual Pension Group

First year premiums 2,498,401 510 198,394 217,623 60,620 12,027,688 762,492 171,447 15,937,175

Renewal premiums 7,491,897 72,313 172,527 37,029 66,890 11,876,331 423,324 3,195 20,143,506

Single premiums 896,419 12,640 5,296 - 77,117 1,415,039 85,399 - 2,491,910

Total premium 10,886,717 85,463 376,217 254,652 204,627 25,319,058 1,271,215 174,642 38,572,591

Business % 28.22% 0.22% 0.98% 0.66% 0.53% 65.64% 3.30% 0.45% 100%

Total premium in India 10,886,717 85,463 376,217 254,652 204,627 25,319,058 1,271,215 174,642 38,572,591

Total Premium outside India - - - - - - - - -

PREMIUM

(Refer to Note I (a) on Schedule 16)






First year premiums 2,485,743 730 107,764 40,936 357,802 9,791,449 417,409 58,855 13,260,688

Renewal premiums 5,868,288 73,439 116,604 - 79,742 4,876,857 152,789 76 11,167,795

Single premiums 669,222 13,023 6,211 - - 1,851,027 178,080 - 2,717,563

Total premium 9,023,253 87,192 230,579 40,936 437,544 16,519,333 748,278 58,931 27,146,046

Business % 33.24% 0.32% 0.85% 0.15% 1.61% 60.85% 2.76% 0.22% 100%

Total premium in India 9,023,253 87,192 230,579 40,936 437,544 16,519,333 748,278 58,931 27,146,046

Total Premium outside India - - - - - - - - -

SCHEDULE - 2

COMMISSION

(Refer to Note I (c) on Schedule 16)






Commission paid

Direct first year premiums 760,960 16 44,190 48,907 2,481 2,306,453 40,905 355 3,204,267

Direct renewal premiums 293,056 904 7,190 2,051 1,694 386,044 6,042 12 696,993

Direct single premiums 765 2 79 - - 13,017 642 - 14,505

Total (A) 1,054,781 922 51,459 50,958 4,175 2,705,514 47,589 367 3,915,765

Add : Commission on Re-insurance Accepted - - - - - - - - -

Less : Commission on Re-insurance Ceded - - - - - - - - -

Net Commission 1,054,781 922 51,459 50,958 4,175 2,705,514 47,589 367 3,915,765

3 MNYL 1.p65 8/19/2009, 12:31 PM188





SCHEDULE - 2 (Contd.)

Break-up of commission expenses (gross) incurred to procure business is as per details below:






Agents 750,981 897 42,537 46,327 3,826 1,373,193 41,703 364 2,259,828

Brokers 3,805 5 344 25 - 11,836 301 - 16,316

Corporate Agency 247,283 13 6,258 2,451 - 1,166,229 4,247 - 1,426,481

Referral Fees 6,546 - 426 108 - 13,260 319 - 20,659

Others - - - - - - - - -

Bancassurance 46,118 7 1,814 1,787 - 140,953 1,018 - 191,697

Direct Selling 48 - 80 260 349 43 1 3 784

Total (B) 1,054,781 922 51,459 50,958 4,175 2,705,514 47,589 367 3,915,765

COMMISSION

(Refer to Note I (c) on Schedule 16)






Commission paid

Direct first year premiums 829,055 50 27,469 11,808 1,958 2,429,633 31,720 10 3,331,703

Direct renewal premiums 219,165 951 4,510 - 402 261,259 2,261 - 488,548

Direct single premiums 1,018 14 101 - - 21,518 1,705 - 24,356

Total (A) 1,049,238 1,015 32,080 11,808 2,360 2,712,410 35,686 10 3,844,607

Add : Commission on Re-insurance Accepted - - - - - - - - -

Less : Commission on Re-insurance Ceded - - - - - - - - -

Net Commission 1,049,238 1,015 32,080 11,808 2,360 2,712,410 35,686 10 3,844,607

Break-up of commission expenses (gross) incurred to procure business is as per details below:






Agents 576,843 893 25,020 10,260 2,119 1,450,492 28,585 8 2,094,220

Brokers 3,407 5 320 20 1 26,018 169 - 29,940

Corporate Agency 374,723 83 3,908 810 134 942,515 4,552 1 1,326,726

Referral Fees 2,490 - 147 13 1 7,333 111 - 10,095

Others

Bancassurance 91,478 33 2,679 705 105 286,047 2,269 1 383,317

Direct Selling 297 1 6 - - 5 - - 309

Total (B) 1,049,238 1,015 32,080 11,808 2,360 2,712,410 35,686 10 3,844,607


3 MNYL 1.p65 8/19/2009, 12:31 PM189





SCHEDULE - 3OPERATING EXPENSES RELATED TO INSURANCE BUSINESS(Refer to Note I (k) on Schedule 16)


Particulars Participating Policies Non-Participating Linked Policies Total(Non-Linked) Policies (Non-Linked) (Refer Annexure to the Revenue Account)

Individual Pension Individual Health Group Linked Linked LinkedLife Life Individual Pension Group

Employee remuneration and welfare benefits 1,963,075 3,578 221,383 192,818 64,147 3,878,867 232,283 46,309 6,602,460[Refer to Notes II (i), (j), (p) and (y) on Schedule 16]Travel, conveyance and vehicle running expenses 144,687 277 16,873 14,404 6,954 275,324 17,536 3,574 479,629Training expenses (including Agent advisors) 227,935 438 26,579 22,697 6,974 433,729 27,628 5,629 751,609Rent, rates & taxes 282,359 544 32,928 28,114 7,544 537,287 34,225 6,974 929,975Repairs & Maintenance 101,200 195 11,804 10,074 2,697 192,562 12,265 2,499 333,296Printing and stationery 85,676 164 9,991 8,531 2,339 163,027 10,385 2,115 282,228Communication expenses 198,845 533 21,357 17,949 5,530 372,165 22,837 4,438 643,654Legal, professional and consultancy charges[Refer to Notes II (p) on Schedule 16] 206,404 394 23,997 20,507 7,782 394,156 24,935 5,068 683,243Medical fees 18,708 36 2,182 1,863 784 35,599 2,268 462 61,902Auditors’ fees, expenses etc :(a) as auditor 728 1 85 73 19 1,388 88 18 2,400(b) as advisor or in any other capacity, in respect of :

(i) Taxation matters 20 - 2 2 1 39 2 1 67(ii) Insurance matters - - - - - - - - -(iii) Management services; and - - - - - - - - -

(c) in any other capacity- Certification 33 - 4 3 1 61 4 1 107- Out of pocket expenses 364 1 42 36 23 692 44 9 1,211

Advertisement and publicity[Refer to Notes II (p) on Schedule 16] 320,770 545 35,140 30,571 7,703 719,433 124,316 6,985 1,245,463Interest and bank charges 21,382 41 2,494 2,129 623 40,686 2,592 529 70,476Service Tax Expenditure 127,888 123 37,523 28,433 - 868,096 33,545 136 1,095,744Information technology maintenance expenses 76,647 146 8,940 7,630 2,044 145,847 9,291 1,894 252,439Recruitment (including Agent advisors) 105,076 116 9,603 8,863 2,038 251,012 9,682 1,497 387,887Electricity ,water and utilities 84,911 163 9,903 8,454 2,294 161,574 10,292 2,097 279,688Insurance 7,670 14 894 765 6,181 14,595 930 1,751 32,800Policy issuance and servicing costs 317,975 215 24,824 24,270 23,318 841,248 24,419 2,780 1,259,049(Profit)/Loss on fluctuation in foreign exchange 4,079 8 476 406 107 7,762 494 101 13,433Other miscellaneous expenses 8,915 17 1,039 888 250 16,962 1,081 221 29,373Depreciation 197,430 380 23,023 19,657 6,462 375,677 23,933 4,876 651,438

Total 4,502,777 7,929 521,086 449,137 155,815 9,727,788 625,075 99,964 16,089,571

SCHEDULE - 3OPERATING EXPENSES RELATED TO INSURANCE BUSINESS




Employees remuneration and welfare benefits[Refer to Notes II (i), (j), (p) and (y) on Schedule 16] 1,239,395 2,733 4,439 28,745 86,640 2,029,436 92,476 3,423 3,487,287Travel, conveyance and vehicle running expenses 148,328 361 60 3,543 11,446 222,222 11,647 495 398,102Training expenses (including Agent advisors) 148,459 362 59 3,543 11,459 222,421 11,658 497 398,458Rent, rates & taxes 175,379 427 70 4,187 13,535 262,753 13,772 586 470,709Repairs & Maintenance 55,781 135 20 1,332 4,305 83,571 4,380 187 149,711Printing and stationery 56,606 139 21 1,351 4,369 84,807 4,446 188 151,927Communication expenses 112,582 274 44 2,688 8,689 168,670 8,840 374 302,161Legal, professional and consultancy charges[Refer to Notes II (p) on Schedule 16] 56,944 138 22 1,359 4,394 85,314 4,471 190 152,832Medical fees 21,389 52 9 511 1,651 32,046 1,680 71 57,409Auditors’ fees, expenses etc :(a) as auditor 894 2 - 21 69 1,341 70 3 2,400(b) as advisor or in any other capacity, in respect of :

(i) Taxation matters 21 - - - 2 31 2 - 56(ii) Insurance matters - - - - - - - - -(iii) Management services; and - - - - - - - - -

(c) in any other capacity- Certification 7 - - - 1 11 1 - 20- Out of pocket expenses 193 - - 5 15 289 15 1 518

Advertisement and publicity [Refer to Notes II (p) on Schedule 16] 230,783 493 1,051 5,230 15,615 387,850 16,939 673 658,634Interest and bank charges 12,667 31 5 303 978 18,979 995 43 34,001Service Tax Expenditure 109,122 124 22,381 - - 45,705 - - 177,332Information technology maintenance expenses 74,024 182 28 1,768 5,712 110,902 5,814 246 198,676Recruitment (including Agent advisors) 43,389 55 691 838 1,807 94,510 2,578 75 143,943Electricity ,water and utilities 55,177 133 22 1,318 4,259 82,666 4,333 184 148,092Insurance 7,000 17 2 168 539 10,488 548 22 18,784Policy issuance and servicing costs 364,557 233 9,187 6,043 7,471 941,818 17,506 300 1,347,115(Profit)/Loss on fluctuation in foreign exchange (2,070) (5) (1) (49) (160) (3,101) (162) (7) (5,555)Other miscellaneous expenses 6,326 15 3 150 494 9,487 504 22 17,001Depreciation 128,055 312 50 3,061 9,882 191,853 10,055 428 343,696

Total 3,045,008 6,213 38,163 66,115 193,172 5,084,069 212,568 8,001 8,653,309


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(All Amounts in Thousands of Indian Rupees)SCHEDULE - 4BENEFITS PAID [NET] IN INDIA(Refer to Note I (d) on Schedule 16)




Insurance Claims *(a) By death 319,865 946 58,428 10,090 76,472 374,897 1,850 43 842,591(b) By Maturity 836 - - - 638 - - 20,494 21,968(c) Annuities/ Pension payment, - - - - - - - - -(d) Other benefits

— Surrenders 187,024 8,570 2,345 - - 244,928 5,218 25,687 473,772— Bonus to Policyholders[Refer to Note II (r) on Schedule 16] 978,531 12,540 - - - - - - 991,071— Others 12,080 - 1,516 - 100 3,545 - - 17,241

Total paid 1,498,336 22,056 62,289 10,090 77,210 623,370 7,068 46,224 2,346,643(Amount ceded in re-insurance) :(a) By death (65,589) - (5,672) (2,200) (33,314) (31,664) - - (138,439)(b) By Maturity - - - - - - - - -(c) Annuities/ Pension payment, - - - - - - - - -(d) Other benefits - - - - - - - - -

Total ceded (65,589) - (5,672) (2,200) (33,314) (31,664) - - (138,439)Amount accepted in re-insurance :(a) By death - - - - - - - - -(b) By Maturity - - - - - - - - -(c) Annuities/ Pension payment, - - - - - - - - -(d) Other benefits - - - - - - - - -

Total accepted - - - - - - - - -

Net Paid 1,432,747 22,056 56,617 7,890 43,896 591,706 7,068 46,224 2,208,204

* Including claim investigation expenses amounting to Rs. 1,510




Insurance Claims *(a) By death 191,081 - 46,046 - 49,582 149,742 145 3,106 439,702(b) By Maturity (60) - - - 9,452 - - - 9,392(c) Annuities/ Pension payment, - - - - - - - - -(d) Other benefits

— Surrenders 176,582 7,687 6,237 - - 63,347 124 6 253,983— Bonus to Policyholders[Refer to Note II (r) on Schedule 16] 699,785 12,322 - - - - - - 712,107— Others 9,960 - 500 - - 500 - - 10,960

Total paid 1,077,348 20,009 52,783 - 59,034 213,589 269 3,112 1,426,144(Amount ceded in re-insurance) :(a) By death (20,387) - (9,486) - (21,536) (14,656) - - (66,065)(b) By Maturity - - - - - - - - -(c) Annuities/ Pension payment, - - - - - - - - -(d) Other benefits - - - - - - - - -

Total ceded (20,387) - (9,486) - (21,536) (14,656) - - (66,065)Amount accepted in re-insurance :(a) By death - - - - - - - - -(b) By Maturity - - - - - - - - -(c) Annuities/ Pension payment, - - - - - - - - -(d) Other benefits - - - - - - - - -

Total accepted - - - - - - - - -

Net Paid 1,056,961 20,009 43,297 - 37,498 198,933 269 3,112 1,360,079

* Including claim investigation expenses amounting to Rs. 2,638


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SCHEDULE - 5SHARE CAPITAL

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

Authorised Capital3,000,000,000 Equity Shares of Rs 10 each(Previous Year: 3,000,000,000 Equity Shares) 30,000,000 30,000,000Issued and Subscribed Capital1,782,432,600 Equity Shares of Rs 10 each(Previous Year: 1,032,432,600 Equity Shares) 17,824,326 10,324,326

Called up Capital1,782,432,600 Equity Shares of Rs 10 each(Previous Year: 1,032,432,600 Equity Shares) 17,824,326 10,324,326Less: Calls unpaid - -Add : Shares forfeited (Amount originally paid up) - -Less: Par value of equity shares bought back - -Less: Preliminary Expenses (to the extent not written off or adjusted) - -

Total 17,824,326 10,324,326

Of the above 1,313,500,014 equity shares of Rs 10 each fully paid up(2008:758,500,014 equity shares of Rs 10 each fully paid up) are heldby Max India Limited (the holding company) and its nominees.

SCHEDULE - 5APATTERN OF SHAREHOLDING (as certified by Management)

Particulars As at March 31, 2009 As at March 31, 2008

Shareholder Shares of Rs 10 % of Holding Shares of Rs 10 % of Holdingeach fully paid up each fully paid up

Promoters- Indian 1,313,500,014 73.69% 758,500,014 73.47%- Foreign 463,432,586 26.00% 268,432,586 26.00%Others 5,500,000 0.31% 5,500,000 0.53%

Total 1,782,432,600 100% 1,032,432,600 100%

SCHEDULE - 6RESERVES AND SURPLUS


Capital Reserve - -Capital Redemption Reserve - -Share Premium - -Revaluation Reserve - -General Reserve - -Less: Debit balance in Profit and Loss Account, if any - -Less: Amount utilised for Buy-back - -Catastrophe Reserve - -Other Reserves - -Balance of profit/ (loss) in Profit and Loss Account - -

Total - -


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SCHEDULE - 7BORROWINGS


Debentures/ Bonds - -Banks - -Financial Institutions - -Others - -

Total - -

SCHEDULE - 8INVESTMENTS SHAREHOLDERS (IN INDIA)(Refer to Note I (e), II (g) and (h) on Schedule 16)


LONG TERM INVESTMENTSGovernment securities and Government guaranteed bonds including Treasury Bills[Market Value Rs 2,306,364 (2008: Rs. 1,370,656)] 2,314,361 1,441,598Other Approved Securities - -Other investments(a) Shares

(aa) Equity [Historical Cost Rs 170,426 ( 2008: Rs. 158,274)] 144,068 213,027(ab) Preference - -

(b) Mutual Funds - -(c) Derivative Instruments - -(d) Debentures/ Bonds [Market Value Rs 145,741 (2008: Rs. 118,024)] 150,000 123,719(e) Other Securities

(ea) Commercial Paper / Certificate of Deposits - -(eb) Deposits with Bank 61,354 55,379

(f) Subsidiaries - -Investment Properties-Real Estate - -Investments in Infrastructure and Social Sector [Market Value Rs 789,696 ( 2008: Rs. 595,821)] 808,893 650,938Application MoniesOther than Approved Investments - -(i) Debentures/ Bonds [Market Value Rs 117,553 ( 2008: Rs. 113,342)] 119,791 119,774(ii) Equity Shares [Historical Cost Rs 50,599 ( 2008: Rs. 71,974)] 37,415 97,688(iii) Pass Through Certificates [Market Value Rs. Nil (2008: Rs 12,959)] - 13,205SHORT TERM INVESTMENTSGovernment securities and Government guaranteed bonds including Treasury Bills[Market Value Rs 100,719 ( 2008: Rs. Nil)] 98,322 -Other Approved Securities - -Other Investments(a) Shares - -

(aa) Equity - -(ab) Preference Shares [Market Value Rs 401 ( 2008: Rs. Nil)] 506 -

(b) Mutual Funds - -(c) Derivative Instruments - -(d) Debentures/ Bonds [Market value Rs 8,998 ( 2008: Rs. NIL)] 9,002 -(e) Other Securities

(ea) Commercial Paper / Certificate of Deposits [Market Value Rs 492,534 (2008: Rs. 198,527)] 492,725 198,584(eb) Deposits with Bank 928,421 140,954

(f) Subsidiaries - -Investment Properties-Real Estate - -Investments in Infrastructure and Social Sector [Market value Rs 49,616 (2008: Rs. Nil)] 49,972 -Other than Approved Investments(i) Pass Through Certificates [Market Value Rs 14,188 (2008: Rs. NIL)] 14,220 -(ii) Mutual Funds [Historical Cost Rs Nil (2008: Rs. 1,105,895)] - 1,112,428

Total 5,229,050 4,167,294

Aggregate Amount of Investments other than listed equity securities and derivative instruments 5,047,567 3,856,579

Aggregate Market Value of Investments other than listed equity securities and derivative instruments 5,015,584 3,718,090


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SCHEDULE - 8AINVESTMENTS POLICYHOLDERS (IN INDIA)(Refer to Note I (e), II (g) and (h) on Schedule 16)

As at March 31, 2009

Particulars Participating Policies Non-Participating Policies Total

Individual Pension Individual Health Group Individual PensionLife Life Linked Linked

LONG TERM INVESTMENTSGovernment securities and Governmentguaranteed bonds including Treasury Bills *(Market Value Rs 13,389,665) 12,127,086 373,388 563,041 21,096 237,415 180,039 - 13,502,065Other Approved Securities(a) Shares

(aa) Equity (Historical Cost 464) - - 468 - - - - 468(ab) Preference - - - - - - - -

(b) Mutual Funds - - - - - - - -(c) Derivative Instruments - - - - - - - -(d) Debentures/ Bonds

(Market Value Rs 1,254,740) 1,023,589 11,095 87,240 - 41,020 70,000 11,871 1,244,815(e) Other Securities

(ea) Commercial Paper / Certificate of Deposits - - - - - - - -(eb) Deposits with Bank - - - - - - - -

(f) Subsidiaries - - - - - - - -(g) Investment Properties-Real Estate - - - - - - - -(h) Policy Loans (Market Value Rs 48,267) 48,267 - - - - - - 48,267Application Monies - - - - - - - -Investments in Infrastructure and Social Sector(Market Value Rs 4,118,294) 3,623,024 73,603 220,137 - 42,081 118,385 - 4,077,230Other than Approved Investments(i) Debentures/ Bonds

(Market Value Rs 169,173) 149,669 - 18,037 - - 1,963 - 169,669(ii) Equity Shares (Historical Cost Rs 38) - - 38 - - - - 38SHORT TERM INVESTMENTSGovernment securities and Governmentguaranteed bonds including Treasury Bills(Market Value Rs 193,087) 190,540 - - - - - - 190,540Other Approved Securities(a) Shares

(aa) Equity - - - - - - - -(ab) Preference - - - - - - - -


(Market Value Rs 141,124) 137,352 782 1,484 - 1,579 - - 141,197(e) Others Securities

(ea) Commercial Paper / Certificate of Deposits[Market Value Rs 475,528] 471,522 - 4,737 - - - - 476,259

(eb) Deposits with Bank [Market Value Rs ] - - - - - - - -(f) Subsidiaries - - - - - - - -(g) Investment Properties-Real Estate - - - - - - - -Investments in Infrastructure and Social Sector(Market Value Rs 185,288) 155,919 - 29,987 - - - - 185,906Other than Approved Investments - - - - - - - -

Total 17,926,968 458,868 925,169 21,096 322,095 370,387 11,871 20,036,454Aggregate Market Value ofInvestments - Policyholders 17,834,445 461,184 937,114 21,833 333,265 375,863 11,968 19,975,672

* Includes Rs 106,605 of securities under section 7 of Insurance Act, 1938 (Refer to Note II (g) on Schedule 16)

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SCHEDULE - 8AINVESTMENTS POLICYHOLDERS (IN INDIA)(Refer to Note I (e), II (g) and (h) on Schedule 16)

As at March 31, 2008

Particulars Participating Policies Non-Participating Policies Total

Individual Pension Individual Health Group Individual PensionLife Life Linked Linked

LONG TERM INVESTMENTSGovernment securities and Governmentguaranteed bonds including Treasury Bills*(Market Value Rs 8,814,223) 8,390,976 324,260 261,988 504 237,690 42,800 - 9,258,218Other Approved Securities(a) Shares



(Market Value Rs 1,113,911) 896,426 12,456 89,847 - 42,634 70,000 11,856 1,123,219(e) Other Securities


(f) Subsidiaries - - - - - - - -(g) Investment Properties-Real Estate - - - - - - - -(h) Policy Loans (Market Value Rs 28,772) 28,767 - 5 - - - - 28,772Investments in Infrastructure and Social Sector(Market Value Rs 3,651,391) 3,314,637 33,698 210,128 - 42,072 118,395 - 3,718,930Other than Approved InvestmentsDebentures/ Bonds (Market Value Rs 164,294) 149,559 - 18,037 - - 1,963 - 169,559SHORT TERM INVESTMENTSGovernment securities and Governmentguaranteed bonds including Treasury Bills - - - - - - - -Other Approved Securities(a) Shares



(Market Value Rs 50,004) 44,208 1,932 3,665 - 196 - - 50,001(e) Others Securities


(f) Subsidiaries - - - - - - - -(g) Investment Properties-Real Estate - - - - - - - -Investments in Infrastructure and Social Sector - - - - - - - -Other than Approved InvestmentsMutual Funds (Historical Cost Rs 85,211) 85,619 - - - - - - 85,619

Total 12,910,192 372,346 583,670 504 322,592 233,158 11,856 14,434,318

Aggregate Market Value of Investments -Policyholders 12,426,620 356,077 562,903 502 318,397 232,167 11,549 13,908,215

* Includes Rs 106,761 of securities under section 7 of Insurance Act, 1938 (Refer to Note II (g) on Schedule 16)


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(All Amounts in Thousands of Indian Rupees)SCHEDULE 8BASSETS HELD TO COVER LINKED LIABILITIES(Refer to Note I (e), II (g) and (h) on Schedule 16)


Particulars Individual Pension Group Total Individual Pension Group TotalLinked Linked Linked Linked Linked Linked

LONG TERM INVESTMENTSGovernment securities and Governmentguaranteed bonds including Treasury Bills 4,498,537 127,780 35,718 4,662,035 689,768 45,145 16,307 751,220[Historical Cost of Rs.4,733,881(2008: Rs. 756,252)]Other Approved Securities - - - - - - - -Other investments(a) Shares

(aa) Equity [Historical Cost Rs.11,647,086(2008: Rs. 6,932,140)] 10,590,059 540,844 15,482 11,146,385 7,040,855 349,877 17,691 7,408,423

(ab) Preference - - - - - - - -(b) Mutual Funds - - - - - - - -(c) Derivative Instruments - - - - - - - -(d) Debentures/ Bonds

[Historical Cost of Rs.3,483,254(2008: Rs.881,177)] 3,459,657 129,952 36,049 3,625,658 847,278 40,354 1,000 888,632

(e) Other Securities -Fixed Deposits[Historical Cost of Rs 50,000(2008: Rs. 250,000)] 50,000 - - 50,000 247,500 2,500 - 250,000

(f) Subsidiaries - - - - - - - -(g) Investment Properties-Real Estate - - - - - - - -Investments in Infrastructure andSocial Sector [Historical Cost Rs.2,338,694(2008: Rs. 1,364,372)] 2,246,258 168,332 12,056 2,426,646 1,319,904 51,007 2,271 1,373,182Other than Approved Investments(a) Debentures/ Bonds

[Historical Cost Rs. NIL (2008: Rs. 1,213,443)] - - - - 1,189,334 17,070 9,038 1,215,442(b) Equity [Historical Cost Rs. 3,612,502

(2008: Rs. 2,256,821)] 2,781,653 127,837 3,210 2,912,700 2,086,352 103,837 4,732 2,194,921

SHORT TERM INVESTMENTSGovernment securities and Governmentguaranteed bonds including Treasury Bills 204,342 52,842 16,014 273,198 91,783 14,286 9,839 115,908[Historical Cost of Rs. 269,535(2008: Rs. 119,756)]Other Approved Securities - - - - - - - -Other Investments(a) Shares


(b) Mutual Funds Units - - - - - - - -(c) Derivative Instruments - - - - - - - -(d) Debentures/ Bonds [Historical Cost

Rs. 410,578 (2008: Rs. 284,557)] 393,968 15,974 - 409,942 248,535 29,038 8,498 286,071(e) Others

(i) Commercial Paper, and Certificate of Deposit[Historical Cost Rs.1,756,867(2008: Rs. 1,878,800)] 1,612,163 179,414 17,564 1,809,141 1,845,626 68,188 4,384 1,918,198

(ii) Fixed Deposits [HistoricalCost Rs.500,000 (2008: Rs. 100,369)] 487,500 12,500 - 500,000 100,369 - - 100,369

(f) Subsidiaries - - - - - - - -(g) Investment Properties-Real Estate - - - - - - - -Investments in Infrastructure andSocial Sector [Historical Cost Rs.594,455(2008: Rs. 431,888)] 592,989 24,615 - 617,604 376,654 57,662 5,998 440,314Other than Approved Investments(a) Debentures/ Bonds [Historical Cost

Rs.40,111 (2008: Rs. 241,919)] 50,239 81 89 50,409 256,075 - - 256,075(b) Mutual Funds [Historical Cost Rs.360,000

(2008: Rs. 69,216)] 350,000 10,000 - 360,000 60,059 9,731 - 69,790NET CURRENT ASSETS 1,398,474 47,140 59,515 1,505,129 1,266,045 51,595 2,079 1,319,719

Total 28,715,839 1,437,311 195,697 30,348,847 17,666,137 840,290 81,837 18,588,264


3 MNYL 1.p65 8/19/2009, 12:31 PM196





SCHEDULE - 9

LOANS

Particulars As at As at

March 31, 2009 March 31, 2008

SECURITY -WISE CLASSIFICATION

Secured

(a) On mortgage of property

(aa) In India - -

(bb) Outside India - -

(b) On Shares, Bonds, Govt. Securities, etc. - -

(c) Loans against policies - -

(d) Others - -

Unsecured - -

Total - -

BORROWER-WISE CLASSIFICATION

(a) Central and State Governments - -

(b) Banks and Financial Institutions - -

(c) Subsidiaries - -

(d) Companies - -

(e) Loans against policies - -

(f) Others - -

Total - -

PERFORMANCE-WISE CLASSIFICATION

(a) Loans classified as standard

(aa) In India - -


(b) Non-standard loans less provisions

(aa) In India - -


Total - -

MATURITY- WISE CLASSIFICATION

(a) Short Term - -

(b) Long Term - -

Total - -


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(All Amounts in Thousands of Indian Rupees)SCHEDULE - 10FIXED ASSETS(Refer to Note I (f) on Schedule 16)

Particulars Gross Block Depreciation Net Block

April 1, 2008 Additions Sale/ March 31, April 1, For The On Sales/ March 31, March 31, March 31,

Disposal 2009 2008 Year Disposal 2009 2009 2008

Goodwill - - - - - - - - - -

Intangibles - Software 365,712 258,769 - 624,481 205,118 127,274 - 332,392 292,089 160,594

Land-Freehold - - - - - - - - - -

Leasehold improvements 707,466 1,152,143 4,879 1,854,730 237,371 187,607 3,784 421,194 1,433,536 470,095

Buildings - - - - - - - - - -

Furniture and fixtures 247,041 229,565 7,691 468,915 73,695 41,596 5,339 109,952 358,963 173,346

Information Technology equipment

(Including communication

networks and servers ) 645,029 535,964 2,308 1,178,685 362,047 200,004 2,036 560,015 618,670 282,982

Vehicles 67,470 11,506 23,731 55,245 35,446 10,161 19,297 26,310 28,935 32,024

Office equipment 308,509 267,214 9,681 566,042 132,144 84,953 7,935 209,162 356,880 176,365

Others - - - - - - - - - -

Total 2,341,227 2,455,161 48,290 4,748,098 1,045,821 651,595 38,391 1,659,025 3,089,073 1,295,406

Capital Work in Progress

(including Capital advances) 159,660 280,663

Grand Total 2,341,227 2,455,161 48,290 4,748,098 1,045,821 651,595 38,391 1,659,025 3,248,733 1,576,069

Previous year 1,572,103 814,966 45,842 2,341,227 741,133 343,888 39,200 1,045,821 1,576,069

SCHEDULE - 11CASH AND BANK BALANCES


Cash [Including Insurance Stamp Rs 1,986 (Previous Year : Rs Nil] 67,851 -Balances with banks in India*(a) Deposit Accounts

(aa) Short-term fixed deposit (i.e maturing in 12 months) - -(ab) Others - -

(b) Current accounts 178,745 193,707(c) Others - -Money at Call and Short Notice(a) With Banks - -(b) With other Institutions - -Others - -

Total 246,596 193,707

*Balances with non-scheduled bank included in (b) above


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(All Amounts in Thousands of Indian Rupees)SCHEDULE - 12ADVANCES AND OTHER ASSETS


ADVANCESReserve deposit with ceding companies - -Application money for investments - 827Prepayments 1,111,043 335,668Advances to Directors / Officers - -Advance tax paid and taxes deducted at source(Net of provision for taxation) 5,351 1,559Others-Advances to suppliers 391,799 191,749Less : Provision for doubtful expenses 5,551 386,248 2,487 189,262

-Advances to employees for travel, etc. 71,046 49,119Less : Provision for doubtful expenses 19,667 51,379 11,400 37,719

Total (A) 1,554,021 565,035

OTHER ASSETSIncome accrued on investments 560,991 432,170Outstanding Premiums 533,917 409,899Agents’ Balances 7,751 3,649Less : Provision for doubtful expenses 3,032 4,719 1,820 1,829

Foreign Agencies Balances - -Due from other entities carrying on insurance business(including reinsurers) 135,276 83,028Due from subsidiaries / holding company - -Deposits with Reserve Bank of India(Pursuant to Section 7 of Insurance Act, 1938) * - -Others:- Service Tax Unutilised Credit 1,062,786 944,927- Security and other deposits 598,255 354,339

Total (B) 2,895,944 2,226,192

Total (C) = (A) + (B) 4,449,965 2,791,227

* (Refer to Note II (g) on Schedule 16)

SCHEDULE - 13CURRENT LIABILITIES

Particulars As at As at March 31, 2009 March 31, 2008

Agents’ balances 477,128 117,933Balance due to other insurance companies 337,652 215,190Deposits held on reinsurance companies - -Premium received in advance 60,495 69,028Unallocated premium 526,099 944,971Sundry creditors 3,233,233 2,511,588Due to holding company 1,063 375Claims Outstanding ( includes pending investigation ) * 132,037 84,240Annuities Due - -Due to Officers/ Directors - -Others:-Proposal / Policyholder deposits 587,205 410,544-Withholding Tax Deducted at Source 258,914 291,354-Service Tax Liability 619 13,541-Other Statutory liabilities 35,776 17,990

Total 5,650,221 4,676,754

*Includes Claims incured but not reported Rs. 81,873 (2008 : Rs 52,929)


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SCHEDULE - 14

PROVISIONS

(Refer to Note II (aa) on Schedule 16)


March 31, 2009 March 31, 2008

For taxation (less payments and taxes deducted at source) - -

For proposed dividends - -

For dividend distribution tax - -

Others :

- Provision for gratuity 25,376 7,385

- Provision for fringe benefit tax 57 1,285

- Provision for non compensated leaves 1,114 500

- Provision for wealth tax 411 372

Total 26,958 9,542

SCHEDULE - 15

MISCELLANEOUS EXPENDITURE

(To the extent not written off or adjusted)

(Refer to Note II (j) on Schedule 16)


March 31, 2009 March 31, 2008

Discount Allowed in issue of shares/ debentures - -

Others

- Deferred Employee Compensation 25,417 37,448

Total 25,417 37,448


3 MNYL 1.p65 8/19/2009, 12:31 PM200




Revenue Account for the year ended March 31, 2009

Annexure to Revenue Account-break Up Of Unit Linked Business (UL)

(All Amounts in Thousands of Indian Rupees)Policyholders’ Account (Technical Account)

Linked Life Linked Pension Linked Group Total

Particulars Schedule Non-Unit Unit Total Non-Unit Unit Total Non-Unit Unit Total Unit Linked

(1) (2) (3)=(1) + (2) (4) (5) (6)=(4) + (5) (7) (8) (9)= (7) + (8) (10)=(3)+ (6)+(9)

Premiums earned – net(a) Premium 4,911,922 20,407,136 25,319,058 267,918 1,003,297 1,271,215 414 174,228 174,642 26,764,915(b) Reinsurance ceded (118,936) - (118,936) - - - - - - (118,936)Income from Investments(a) Interest, Dividend & Rent - Gross 24,456 743,704 768,160 1,033 33,793 34,826 - 7,358 7,358 810,344(b) Profit on sale/redemption of investments - 1,146,370 1,146,370 - 32,229 32,229 - 8,556 8,556 1,187,155(c) Loss on sale/redemption of investments - (3,949,957) (3,949,957) - (149,712) (149,712) - (15,077) (15,077) (4,114,746)(d) Unrealised gain/(loss) - (1,328,886) (1,328,886) - (107,215) (107,215) - (4,978) (4,978) (1,441,079)(e) Amortisation of discount/(premium) 13 - 13 14 - 14 - - - 27Other income:(a) Linked Income UL1 5,279,440 (5,279,440) - 202,080 (202,080) - 9,866 (9,866) - -(b) Contribution from the Shareholders’ Account 2,470,055 - 2,470,055 195,992 - 195,992 90,569 - 90,569 2,756,616(c) Others 4,882 507 5,389 443 20 463 44 - 44 5,896

TOTAL (A) 12,571,832 11,739,434 24,311,266 667,480 610,332 1,277,812 100,893 160,221 261,114 25,850,192

Commission Paid 2,705,514 - 2,705,514 47,589 - 47,589 367 - 367 2,753,470Operating Expenses related to Insurance Business 9,303,462 424,326 9,727,788 618,294 6,781 625,075 99,827 137 99,964 10,452,827Provision for Tax - Fringe Benefit Tax 45,895 - 45,895 2,924 - 2,924 596 - 596 49,415Provision for doubtful debts 7,635 - 7,635 487 - 487 99 - 99 8,221Bad debts written off 336 - 336 21 - 21 4 - 4 361

TOTAL (B) 12,062,842 424,326 12,487,168 669,315 6,781 676,096 100,893 137 101,030 13,264,294

Benefits Paid (Net) UL2 326,301 265,405 591,706 537 6,531 7,068 - 46,224 46,224 644,998Interim Bonus Paid - - - - - - - - - -Change in Valuation Liability 182,689 11,049,703 11,232,392 (2,372) 597,020 594,648 - 113,860 113,860 11,940,900

TOTAL (C) 508,990 11,315,108 11,824,098 (1,835) 603,551 601,716 - 160,084 160,084 12,585,898

SURPLUS/ (DEFICIT) (D) =(A)-(B)-(C) - - - - - - - - - -APPROPRIATIONSTransfer to Shareholders’ Account - - - - - - - - - -Funds available for future appropriations - - - - - - - - - -

Total (D) - - - - - - - - - -

Revenue Account for the year ended March 31, 2008

Policyholders’ Account (Technical Account)

Linked Life Linked Pension Linked Group Total

Particulars Schedule Non-Unit Unit Total Non-Unit Unit Total Non-Unit Unit Total Unit Linked

(1) (2) (3)=(1) + (2) (4) (5) (6)=(4) + (5) (7) (8) (9)= (7) + (8)(10)=(3)+ (6)+(9)

Premiums earned – net(a) Premium 3,463,828 13,055,505 16,519,333 133,912 614,366 748,278 - 58,931 58,931 17,326,542(b) Reinsurance ceded (60,724) - (60,724) - - - - - - (60,724)Income from Investments(a) Interest, Dividend & Rent - Gross 20,360 271,703 292,063 1,037 11,554 12,591 - 2,536 2,536 307,190(b) Profit on sale/redemption of investments - 1,097,247 1,097,247 - 40,693 40,693 - 3,492 3,492 1,141,432(c) Loss on sale/redemption of investments - (266,159) (266,159) - (14,561) (14,561) - (833) (833) (281,553)(d) Unrealised gain/(loss) - 200,340 200,340 - (27,207) (27,207) - 510 510 173,643(e) Amortisation of discount/(premium) 61 - 61 14 - 14 - - - 75Other income:(a) Linked Income UL1 2,896,813 (2,896,813) - 23,872 (23,872) - 4,647 (4,647) - -(b) Contribution from the Shareholders’ Account 1,640,284 - 1,640,284 96,274 - 96,274 3,433 - 3,433 1,739,991(c ) Others 2,317 - 2,317 109 - 109 2 - 2 2,428

TOTAL (A) 7,962,939 11,461,823 19,424,762 255,218 600,973 856,191 8,082 59,989 68,071 20,349,024

Commission Paid 2,712,410 - 2,712,410 35,686 - 35,686 10 - 10 2,748,106Operating Expenses related to Insurance Business 5,084,069 - 5,084,069 212,568 - 212,568 8,001 - 8,001 5,304,638Provision for Tax - Fringe Benefit Tax 26,175 - 26,175 1,372 - 1,372 58 - 58 27,605Provision for doubtful debts 5,583 - 5,583 293 - 293 13 - 13 5,889Bad debts written off 58 - 58 3 - 3 - - - 61

TOTAL (B) 7,828,295 - 7,828,295 249,922 - 249,922 8,082 - 8,082 8,086,299

Benefits Paid (Net) UL2 121,833 77,100 198,933 - 269 269 - 3,112 3,112 202,314Interim Bonus Paid - - - - - - - - - -Change in Valuation Liability 12,811 11,384,723 11,397,534 5,296 600,704 606,000 - 56,877 56,877 12,060,411

TOTAL (C) 134,644 11,461,823 11,596,467 5,296 600,973 606,269 - 59,989 59,989 12,262,725

SURPLUS/ (DEFICIT) (D) =(A)-(B)-(C) - - - - - - - - - -APPROPRIATIONSTransfer to Shareholders’ Account - - - - - - - - - -Funds available for future appropriations - - - - - - - - - -

Total (D) - - - - - - - - - -

3 MNYL 1.p65 8/19/2009, 12:31 PM201




(All Amounts in Thousands of Indian Rupees)Schedule-UL1

Linked Income (recovered from linked funds)* YEAR ENDED MARCH 31, 2009

Particulars Life Linked Unit Pension Linked Unit Linked Group Unit Total(1) (2) (3) (4)= (1)+(2)+(3)

Fund Administration charges - - - -Fund Management charge 268,460 13,095 1,260 282,815Policy Administration charge 2,672,061 38,558 8,606 2,719,225Surrender charge 1,340,778 150,419 - 1,491,197Switching charge 41 8 - 49Mortality charge 998,100 - - 998,100Rider Premium charge - - - -Partial withdrawal charge - - - -Miscellaneous charge - - - -

TOTAL (UL-1) 5,279,440 202,080 9,866 5,491,386

* (net of service tax, if any)

Schedules Annexed to Revenue Account (UL) forming part of Financial Statements

Schedule-UL1

Linked Income (recovered from linked funds)* YEAR ENDED MARCH 31, 2008

Particulars Life Linked Unit Pension Linked Unit Linked Group Unit Total(1) (2) (3) (4)= (1)+(2)+(3)

Fund Administration charges - - - -Fund Management charge 145,672 5,968 500 152,140Policy Administration charge 2,050,398 16,409 4,147 2,070,954Surrender charge 106,893 1,495 - 108,388Switching charge 23 - - 23Mortality charge 593,827 - - 593,827Rider Premium charge - - - -Partial withdrawal charge - - - -Miscellaneous charge - - - -

TOTAL (UL-1) 2,896,813 23,872 4,647 2,925,332

* (net of service tax, if any)

3 MNYL 1.p65 8/19/2009, 12:31 PM202




(All Amounts in Thousands of Indian Rupees)SCHEDULE–UL2BENEFITS PAID [NET]


Linked Life Linked Pension Linked Group

Non-Unit Unit Total Non- Unit Total Non- Unit Total TotalUnit Unit Unit Linked

Sl No. Particulars (1) (2) (3)=(1) + (2) (4) (5) (6)=(4) + (5) (7) (8)(9)= (7) + (8) (10)=(3)+ (6)+(9)

1 Insurance Claims(a) Claims by Death 354,420 20,477 374,897 537 1,313 1,850 - 43 43 376,790(b) Claims by Maturity - - - - - - - 20,494 20,494 20,494(c) Annuities / Pension payment - - - - - - - - - -(d) Other benefits

- Surrender - 244,928 244,928 - 5,218 5,218 - 25,687 25,687 275,833- Survival - - - - - - - - - -- Others 3,545 - 3,545 - - - - - - 3,545

Sub Total (A) 357,965 265,405 623,370 537 6,531 7,068 - 46,224 46,224 676,662

2 Amount Ceded in reinsurance(a) Claims by Death 31,664 - 31,664 - - - - - - 31,664(b) Claims by Maturity - - - - - - - - - -(c) Annuities / Pension payment - - - - - - - - - -(d) Other benefits

- Surrender - - - - - - - - - -- Survival - - - - - - - - - -

Sub Total (B) 31,664 - 31,664 - - - - - - 31,664

TOTAL (A) - (B) 326,301 265,405 591,706 537 6,531 7,068 - 46,224 46,224 644,998Benefits paid to claimants:In India 357,965 265,405 623,370 537 6,531 7,068 - 46,224 46,224 676,662Outside India - - - - - - - - - -

TOTAL (UL2) 357,965 265,405 623,370 537 6,531 7,068 - 46,224 46,224 676,662


SCHEDULE–UL2BENEFITS PAID [NET]


Linked Life Linked Pension Linked Group

Non-Unit Unit Total Non- Unit Total Non- Unit Total TotalUnit Unit Unit Linked

Sl No. Particulars (1) (2) (3)=(1) + (2) (4) (5) (6)=(4) + (5) (7) (8)(9)= (7) + (8) (10)=(3)+ (6)+(9)

1 Insurance Claims(a) Claims by Death 136,489 13,253 149,742 - 145 145 - 3,106 3,106 152,993(b) Claims by Maturity - - - - - - - - - -(c) Annuities / Pension payment - - - - - - - - - -(d) Other benefits

- Surrender - 63,347 63,347 - 124 124 - 6 6 63,477- Survival - - - - - - - - - -- Others - 500 500 - - - - - - 500

Sub Total (A) 136,489 77,100 213,589 - 269 269 - 3,112 3,112 216,9702 Amount Ceded in reinsurance

(a) Claims by Death 14,656 - 14,656 - - - - - - 14,656(b) Claims by Maturity - - - - - - - - - -(c) Annuities / Pension payment - - - - - - - - - -(d) Other benefits

- Surrender - - - - - - - - - -- Survival - - - - - - - - - -

Sub Total (B) 14,656 - 14,656 - - - - - - 14,656

TOTAL (A) - (B) 121,833 77,100 198,933 - 269 269 - 3,112 3,112 202,314

Benefits paid to claimants:In India 136,489 77,100 213,589 - 269 269 - 3,112 3,112 216,970Outside India - - - - - - - - - -

TOTAL (UL2) 136,489 77,100 213,589 - 269 269 - 3,112 3,112 216,970

3 MNYL 1.p65 8/19/2009, 12:31 PM203






Form A-BS(UL)Fund Balance Sheet as at March 31, 2009

Particulars Schedule Funds

Balanced Conservative Debt Growth Growth High Dynamic Guaranteed Guaranteed Pension Pension Pension

Super Growth Opportuinities Fund Fund Balanced Conservative Debt

Fund Dynamic Income

Sources of Funds

Policyholders’ Funds:

Policyholder contribution F-1 1,548,058 230,212 356,540 21,377,786 6,741,318 91,314 301,264 12,085 1,771 117,777 28,985 52,789

Revenue Account 88,814 33,277 42,143 (935,452) (1,139,864) (24,255) (9,631) 398 61 647 1,598 1,543

Total 1,636,872 263,489 398,683 20,442,334 5,601,454 67,059 291,633 12,483 1,832 118,424 30,583 54,332

Application of Funds

Investments F-2 1,517,359 248,803 361,729 19,408,859 5,431,405 63,052 273,100 11,430 1,628 111,055 29,056 51,029

Current Assets F-3 128,102 56,697 47,151 1,153,921 216,024 12,697 18,533 1,345 227 9,145 1,527 3,303

Less: Current Liabilities and Provisions F-4 8,589 42,011 10,197 120,446 45,975 8,690 - 292 23 1,776 - -

Net current assets 119,513 14,686 36,954 1,033,475 170,049 4,007 18,533 1,053 204 7,369 1,527 3,303

Total 1,636,872 263,489 398,683 20,442,334 5,601,454 67,059 291,633 12,483 1,832 118,424 30,583 54,332

Net Asset Value (NAV) per Unit: 16.33 14.85 13.78 19.43 8.45 6.71 8.94 11.48 11.11 12.18 12.41 12.21

(a) Net Asset as per Balance Sheet

(Total Assets less Current Liabilities and

Provisions) (Rs. In ‘000) 1,636,872 263,489 398,683 20,442,334 5,601,454 67,059 291,633 12,483 1,832 118,424 30,583 54,332

(b) Number of Units outstanding 100,231,892 17,738,229 28,939,096 1,052,157,795 662,927,618 9,994,386 32,606,290 1,087,528 164,877 9,721,255 2,465,301 4,449,602

(c) NAV per Unit (a)/(b) (Rs.) 16.33 14.85 13.78 19.43 8.45 6.71 8.94 11.48 11.11 12.18 12.41 12.21

Significant accounting policies and notes to the accounts 16

The Schedules referred to above form an integral part of the Fund Balance Sheet.

Form A-BS(UL)(All Amounts in Thousands of Indian Rupees)

Fund Balance Sheet as at March 31, 2009


Pension Pension Growth Growth Group Group Group Group Total

Growth Growth Balanced Conservative Growth Superannuation Superannuation Superannuation

Super Balanced Conservative Growth

Sources of Funds


Policyholder contribution F-1 757,822 671,393 36,209 107,375 47,299 419 4,382 175 32,484,973Revenue Account (51,725) (143,518) 935 5,129 (6,234) 8 - - (2,136,126)

Total 706,097 527,875 37,144 112,504 41,065 427 4,382 175 30,348,847

Application of FundsInvestments F-2 678,610 520,421 35,987 59,686 40,433 76 - - 28,843,718Current Assets F-3 33,634 28,741 2,720 52,818 1,340 351 4,382 175 1,772,833Less: Current Liabilities and Provisions F-4 6,147 21,287 1,563 - 708 - - - 267,704

Net current assets 27,487 7,454 1,157 52,818 632 351 4,382 175 1,505,129

Total 706,097 527,875 37,144 112,504 41,065 427 4,382 175 30,348,847

Net Asset Value (NAV) per Unit: 11.58 5.54 11.96 12.36 10.59 11.78 10.00 10.00

(a) Net Asset as per Balance Sheet(Total Assets less Current Liabilities andProvisions) (Rs. In ‘000) 706,097 527,875 37,144 112,504 41,065 427 4,382 175 30,348,847

(b) Number of Units outstanding 60,989,919 95,292,215 3,105,698 9,101,679 3,877,133 36,227 438,151 17,465

(c) NAV per Unit (a)/(b) (Rs.) 11.58 5.54 11.96 12.36 10.59 11.79 10.00 10.02



3 MNYL 1.p65 8/19/2009, 12:31 PM204





Form A-BS(UL)Fund Balance Sheet as at March 31, 2008




Fund Dynamic Income

Sources of Funds


Policyholder contribution F-1 814,819 137,078 133,944 12,122,851 2,669,765 38,221 - 7,304 905 37,670 6,517 11,845

Revenue Account 144,884 25,220 11,944 1,687,323 (128,645) 42 - 435 45 2,035 (8) 210

Total 959,703 162,298 145,888 13,810,174 2,541,120 38,263 - 7,739 950 39,705 6,509 12,055

Application of Funds

Investments F-2 910,120 149,443 140,291 12,827,916 2,343,829 20,663 - 7,031 796 38,074 7,184 10,267

Current Assets F-3 68,244 18,629 13,859 1,392,473 258,924 30,084 - 820 155 3,669 350 2,814

Less: Current Liabilities and Provisions F-4 18,661 5,774 8,262 410,215 61,633 12,484 - 112 1 2,038 1,025 1,026

Net current assets 49,583 12,855 5,597 982,258 197,291 17,600 - 708 154 1,631 (675) 1,788

Total 959,703 162,298 145,888 13,810,174 2,541,120 38,263 - 7,739 950 39,705 6,509 12,055

Net Asset Value (NAV) per Unit: 17.37 14.35 12.12 23.02 11.70 10.02 - 11.51 10.97 12.74 11.90 11.34

(a) Net Asset as per Balance Sheet

(Total Assets less Current Liabilities and

Provisions) (Rs. In ‘000) 959,703 162,298 145,888 13,810,174 2,541,120 38,263 - 7,739 950 39,705 6,509 12,055

(b) Number of Units outstanding 55,254,618 11,312,248 12,035,444 599,799,322 217,159,822 3,817,659 - 672,376 86,569 3,116,469 547,217 1,062,762

(c) NAV per Unit (a)/(b) (Rs.) 17.37 14.35 12.12 23.02 11.70 10.02 - 11.51 10.98 12.74 11.90 11.34




Form A-BS(UL)(All Amounts in Thousands of Indian Rupees)

Fund Balance Sheet as at March 31, 2008





Sources of Funds

Policyholders’ Funds:Policyholder contribution F-1 488,414 281,901 42,466 2,860 31,089 49 - - 16,827,698Revenue Account 51,378 (39,671) 3,034 128 2,212 - - - 1,760,566

Total 539,792 242,230 45,500 2,988 33,301 49 - - 18,588,264

Application of FundsInvestments F-2 519,311 213,862 44,135 2,905 32,669 49 - - 17,268,545Current Assets F-3 25,241 33,579 6,427 85 659 - - - 1,856,012Less: Current Liabilities and Provisions F-4 4,760 5,211 5,062 2 27 - - - 536,293

Net current assets 20,481 28,368 1,365 83 632 - - - 1,319,719

Total 539,792 242,230 45,500 2,988 33,301 49 - - 18,588,264

Net Asset Value (NAV) per Unit: 13.89 7.94 12.14 11.02 12.29 - - -

(a) Net Asset as per Balance Sheet(Total Assets less Current Liabilities andProvisions) (Rs. In ‘000) 539,792 242,230 45,500 2,988 33,301 49 - - 18,588,264

(b) Number of Units outstanding 38,862,555 30,491,605 3,749,253 271,102 2,710,311 - - - -(c) NAV per Unit (a)/(b) (Rs.) 13.89 7.94 12.14 11.02 12.29 - - - -

Significant accounting policies and notes to the accounts 16The Schedules referred to above form an integral part of the Fund Balance Sheet.

3 MNYL 1.p65 8/19/2009, 12:31 PM205




(All Amounts in Thousands of Indian Rupees)Form A-RA(UL)Fund Revenue Account Year Ended March 31, 2009




Fund Dynamic Income

Income from investments

Interest income 59,223 13,231 15,013 487,479 38,108 656 2,600 453 70 3,290 577 1,598

Dividend income 3,151 209 - 91,244 31,206 360 689 11 1 128 8 -

Profit on sale of investment 35,576 7,550 24,075 846,848 187,562 611 3,677 241 1 1,845 771 1,206

Loss on sale of investment (75,643) (11,011) (7,043) (2,549,699) (1,252,562) (14,437) (13,739) (407) (29) (5,372) (505) (48)

Profit on inter fund transfer/

Sale of investment 1,164 1,784 6,019 22,325 7,561 247 1,085 43 1 124 403 334

Loss on inter fund transfer/

Sale of investment (263) (3,032) (8,687) (3,607) (9,685) (66) - (38) (9) (12) (109) (427)

Miscellaneous Income 7 - - 354 144 - 2 - - - - -

Unrealised Gain/loss* (65,422) 1,268 3,033 (1,295,409) 40,191 (10,864) (1,505) (179) 1 (590) 626 (1,055)

Total (A) (42,207) 9,999 32,410 (2,400,465) (957,475) (23,493) (7,191) 124 36 (587) 1,771 1,608

Fund management expenses 12,513 1,752 1,991 200,702 48,432 726 2,180 146 18 721 148 247

Service tax on FMC 1,350 190 220 21,608 5,312 79 261 16 2 80 17 28

Fund administration expenses - - - - - - - - - - - -

Other charges F-5 - - - - - - - - - - - -

Total (B) 13,863 1,942 2,211 222,310 53,744 805 2,441 162 20 801 165 275

Net Income for the year (A-B) (56,070) 8,057 30,199 (2,622,775) (1,011,219) (24,297) (9,631) (37) 16 (1,388) 1,606 1,333

Add: Fund revenue account at the

beginning of the period 144,884 25,220 11,944 1,687,323 (128,645) 42 - 435 45 2,035 (8) 210

Fund revenue account at the end

of the year Mar 31, 2009 88,814 33,277 42,143 (935,452) (1,139,864) (24,255) (9,631) 398 61 647 1,598 1,543

* Net change in mark to market value of investments


The Schedules referred to above form an integral part of the Fund Revenue Account.







Income from investmentsInterest income 17,669 4,695 3,403 2,007 1,487 4 - - 651,563Dividend income 3,099 2,729 228 - 229 - - - 133,292Profit on sale of investment 19,682 4,044 3,238 2,434 759 1 - - 1,140,121Loss on sale of investment (74,989) (67,986) (6,901) (452) (6,154) - - - (4,086,977)Profit on inter fund transfer/sale of investment 3,101 719 1,089 232 803 - - - 47,034Loss on inter fund transfer/sale of investment (5) (259) (1,331) (104) (135) - - - (27,769)Miscellaneous Income 7 13 - - - - - - 527Unrealised Gain/loss* (63,295) (42,901) (1,213) 1,176 (4,944) 3 - - (1,441,079)

Total (A) (94,731) (98,946) (1,487) 5,293 (7,955) 8 - - (3,583,288)

Fund management expenses 7,561 4,419 555 262 442 - - - 282,815Service tax on FMC 811 482 57 30 49 - - - 30,592Fund administration expenses - - - - - - - - -Other charges F-5 - - - - - - - - -

Total (B) 8,372 4,901 612 292 491 - - - 313,407

Net Income for the year (A-B) (103,103) (103,847) (2,099) 5,001 (8,446) 8 - - (3,896,695)

Add: Fund revenue account at thebeginning of the period 51,378 (39,671) 3,034 128 2,212 - - - 1,760,566

Fund revenue account at the endof the year Mar 31, 2009 (51,725) (143,518) 935 5,129 (6,234) 8 - - (2,136,129)

3 MNYL 1.p65 8/19/2009, 12:31 PM206









Fund Dynamic Income

Income from investments

Interest income 33,178 8,766 8,098 194,693 4,847 2 - 300 46 1,115 171 233

Dividend income 810 67 - 18,350 2,541 - - 4 - 24 1 -

Profit on sale of investment 54,529 9,662 679 831,826 146,941 - - 301 15 1,520 29 12

Loss on sale of investment (9,607) (2,142) (1,232) (185,911) (56,902) - - (60) (6) (500) (70) (28)

Profit on inter fund transfer/ sale of investment 2,699 566 1,005 36,811 12,203 6 - 6 1 81 1 16

Loss on inter fund transfer/ sale of investment (136) (236) (335) (9,249) (339) - - (4) - (103) (12) (39)

Miscellaneous Income - - - - 2 - - - - - - -

Unrealised Gain/loss* 18,904 (385) 1,139 403,618 (222,931) 39 - (41) (4) (195) (128) 3

Total (A) 100,377 16,298 9,354 1,290,138 (113,638) 47 - 506 52 1,942 (8) 197

Fund management expenses 8,191 1,197 988 120,193 15,007 5 - 82 9 248 22 29

Fund administration expenses -

Other charges F-5 - - - - - - - - - - - -

Total (B) 8,191 1,197 988 120,193 15,007 5 - 82 9 248 22 29

Net Income for the year (A-B) 92,186 15,101 8,366 1,169,945 (128,645) 42 - 424 43 1,694 (30) 168

Add: Fund revenue account at the

beginning of the period 52,698 10,119 3,578 517,378 - - - 11 2 341 22 42

Fund revenue account at the

end of the year Mar 31, 2008 144,884 25,220 11,944 1,687,323 (128,645) 42 - 435 45 2,035 (8) 210

* Net change in mark to market value of investments


The Schedules referred to above form an integral part of the Fund Revenue Account.






Income from investmentsInterest income 8,623 470 1,715 143 602 - - - 263,002Dividend income 858 58 37 - 40 - - - 22,790Profit on sale of investment 37,299 515 1,549 10 1,704 - - - 1,086,591Loss on sale of investment (10,281) (3,030) (376) (16) (379) - - - (270,540)Profit on inter fund transfer/ sale of investment 975 250 172 3 51 - - - 54,846loss on inter fund transfer/ sale of investment (331) (166) (48) (11) (3) - - - (11,012)Miscellaneous Income - - - - - - - - 2Unrealised Gain/loss* 10,262 (37,150) 137 (2) 375 - - - 173,641

Total (A) 47,405 (39,053) 3,186 127 2,390 - - - 1,319,320

Fund management expenses 5,054 618 279 13 205 - - - 152,140Fund administration expenses -Other charges F-5 - - - - - - - - -

Total (B) 5,054 618 279 13 205 - - - 152,140

Net Income for the year (A-B) 42,351 (39,671) 2,907 114 2,185 - - - 1,167,180

Add: Fund revenue account at thebeginning of the period 9,027 - 127 14 27 - - - 593,386

Fund revenue account at theend of the year Mar 31, 2008 51,378 (39,671) 3,034 128 2,212 - - - 1,760,566

3 MNYL 1.p65 8/19/2009, 12:31 PM207




Schedules to Fund Balance Sheet and Fund Revenue Account


SCHEDULE: F-1POLICYHOLDERS’ CONTRIBUTION FOR THE YEAR ENDED MARCH 31, 2009

Particulars Funds

Balanced Conservative Debt Growth Growth High Dynamic Guaranteed Guaranteed Pension Pension PensionSuper Growth Opportuinities Fund Fund Balanced Conservative Debt

Fund Dynamic Income

Opening balance 814,819 137,078 133,944 12,122,851 2,669,765 38,221 - 7,304 905 37,670 6,517 11,845Add: Additions during the year* 748,395 102,757 232,069 9,696,783 4,301,223 58,179 307,755 6,640 1,277 82,319 23,943 54,778Less: Deductions during the year* 15,156 9,623 9,473 441,848 229,670 5,086 6,491 1,859 411 2,212 1,475 13,834Closing balance 1,548,058 230,212 356,540 21,377,786 6,741,318 91,314 301,264 12,085 1,771 117,777 28,985 52,789

* Additions represents units creation and deductions represent units cancellation

POLICYHOLDERS’ CONTRIBUTION FOR THE YEAR ENDED MARCH 31, 2009

Particulars Funds




Opening balance 488,414 281,901 42,466 2,860 31,089 49 - - 16,827,698Add: Additions during the year* 359,618 408,894 60,999 106,649 36,459 832 4,382 175 16,594,126Less: Deductions during the year* 90,210 19,402 67,256 2,134 20,249 462 - - 936,851Closing balance 757,822 671,393 36,209 107,375 47,299 419 4,382 175 32,484,973



Particulars Funds


Fund Dynamic Income *

Opening balance 472,588 97,647 77,344 5,046,052 - - - 3,534 460 12,176 695 2,106Add: Additions during the year* 349,299 54,645 89,765 7,089,771 2,705,722 38,221 - 5,177 741 25,781 6,308 11,819Less: Deductions during the year* 7,068 15,214 33,165 12,972 35,957 - - 1,407 296 287 486 2,080Closing balance 814,819 137,078 133,944 12,122,851 2,669,765 38,221 - 7,304 905 37,670 6,517 11,845



Particulars Funds




Opening balance 215,177 - 18,989 574 5,231 - - - 5,952,573Add: Additions during the year* 281,401 281,921 27,082 2,310 27,585 50 - - 10,997,598Less: Deductions during the year* 8,164 20 3,605 24 1,727 1 - - 122,473Closing balance 488,414 281,901 42,466 2,860 31,089 49 - - 16,827,698


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(All Amounts in Thousands of Indian Rupees)SCHEDULE: F-2INVESTMENTS AS AT MARCH 31, 2009

Particulars Funds



Approved InvestmentsGovernment Bonds 537,090 137,303 205,649 3,501,314 296,190 2,273 14,571 7,133 1,357 22,732 17,192 28,331Corporate Bonds 380,406 45,727 70,300 2,926,388 386,050 - 44,755 - - 21,493 - 6,436Infrastructure Bonds 175,213 32,185 52,149 2,269,315 196,985 10,222 56,688 2,078 - 21,278 4,336 6,377Equity 162,344 12,728 - 7,009,233 3,285,684 40,252 122,849 1,251 131 11,257 1,674Money Market 176,405 12,170 32,631 1,129,798 247,406 2,223 10,775 660 94 31,789 5,638 9,839Mutual Funds - - - - - - - - - - - -Deposit with Bank 24,000 1,000 1,000 441,500 70,000 - - - - - - -

Total 1,455,458 241,113 361,729 17,277,548 4,482,315 54,970 249,638 11,122 1,582 108,549 28,840 50,983

Other InvestmentsCorporate Bonds - 5,118 - 44,976 - - - 121 23 35 - 46Infrastructure Bonds - - - - - - - - - - - -Equity 51,901 2,572 - 1,846,335 849,090 8,082 23,462 187 23 2,471 216Money Market - - - - - - - - - - - -Mutual Funds 10,000 - - 240,000 100,000 - - - - - - -

Total 61,901 7,690 - 2,131,311 949,090 8,082 23,462 308 46 2,506 216 46

GRAND TOTAL 1,517,359 248,803 361,729 19,408,859 5,431,405 63,052 273,100 11,430 1,628 111,055 29,056 51,029

% of Approved Investments to Total 96 97 100 89 83 87 91 97 97 98 99 100% of Other Investments to Total 4 3 - 11 17 13 9 3 3 2 1 0

SCHEDULE: F-2INVESTMENTS AS AT MARCH 31, 2009

Particulars Funds




Approved InvestmentsGovernment Bonds 99,802 12,566 10,765 31,079 9,814 76 - - 4,935,237Corporate Bonds 94,456 23,541 9,518 16,048 10,483 - - - 4,035,601Infrastructure Bonds 95,538 65,105 4,419 6,517 1,121 - - - 2,999,526Equity 217,493 310,731 4,940 - 10,541 - - - 11,191,108Money Market 102,753 29,396 5,545 5,953 6,065 - - - 1,809,140Mutual Funds - - - - - - - - -Deposit with Bank 12,500 - - - - - - - 550,000

Total 622,542 441,339 35,187 59,597 38,024 76 - - 25,520,612

Other InvestmentsCorporate Bonds - - - 89 - - - - 50,408Infrastructure Bonds - - - - - - - - -Equity 56,068 69,082 800 - 2,409 - - - 2,912,698Money Market - - - - - - - - -Mutual Funds - 10,000 - - - - - - 360,000

Total 56,068 79,082 800 89 2,409 - - - 3,323,106

GRAND TOTAL 678,610 520,421 35,987 59,686 40,433 76 - - 28,843,718

% of Approved Investments to Total 92 85 98 100 94 100 - - 88% of Other Investments to Total 8 15 2 0 6 - - - 12


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SCHEDULE: F-2

INVESTMENTS AS AT MARCH 31, 2008

Particulars Funds




Approved Investments

Government Bonds 208,590 85,925 78,537 389,131 9,906 3,962 - 4,783 717 12,338 4,604 5,751

Corporate Bonds 158,751 8,927 20,463 812,251 94,421 1,000 - - - 4,016 1,000 1,000

Infrastructure Bonds 110,849 13,938 20,071 1,390,563 155,308 5,829 - - - 8,981 1,016 2,982

Equity 206,115 12,557 - 5,322,055 1,492,344 6,827 - 910 44 6,179 466 -

Money Market 89,641 9,964 4,372 1,992,279 94,875 1,374 - 989 - 4,782 - 492

Mutual Funds - - - - - - - - - - - -

Total 773,946 131,311 123,443 9,906,279 1,846,854 18,992 - 6,682 761 36,296 7,086 10,225

Other Investments

Corporate Bonds 76,598 14,617 16,848 1,337,214 - - - 111 21 32 - 42

Infrastructure Bonds - - - - - - - - - - - -

Equity 59,576 3,515 - 1,584,423 436,916 1,671 - 238 14 1,746 98 -

Money Market - - - - - - - - - - - -

Mutual Funds - - - - 60,059 - - - - - - -

Total 136,174 18,132 16,848 2,921,637 496,975 1,671 - 349 35 1,778 98 42

GRAND TOTAL 910,120 149,443 140,291 12,827,916 2,343,829 20,663 - 7,031 796 38,074 7,184 10,267

% of Approved Investments to Total 85 88 88 77 79 92 - 95 96 95 99 100

% of Other Investments to Total 15 12 12 23 21 8 - 5 4 5 1 0

SCHEDULE: F-2

INVESTMENTS AS AT MARCH 31, 2008

Particulars Funds




Approved Investments

Government Bonds 34,942 1,798 15,772 1,827 8,498 49 - - 867,130

Corporate Bonds 50,466 12,911 4,985 500 4,013 - - - 1,174,704

Infrastructure Bonds 77,049 18,641 4,230 - 4,038 - - - 1,813,495

Equity 215,487 127,745 8,472 - 9,218 - - - 7,408,419

Money Market 52,491 12,922 393 495 3,496 - - - 2,268,565

Mutual Funds - - - - - - - - -

Total 430,435 174,017 33,852 2,822 29,263 49 - - 13,532,313

Other Investments

Corporate Bonds 12,976 4,021 7,983 83 973 - - - 1,471,519

Infrastructure Bonds - - - - - - - - -

Equity 66,169 35,824 2,300 - 2,433 - - - 2,194,923

Money Market - - - - - - - - -

Mutual Funds 9,731 - - - - - - - 69,790

Total 88,876 39,845 10,283 83 3,406 - - - 3,736,232

GRAND TOTAL 519,311 213,862 44,135 2,905 32,669 49 - - 17,268,545

% of Approved Investments to Total 83 81 77 97 90 100 - - 78

% of Other Investments to Total 17 19 23 3 10 - - - 22


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Schedule: F-3

CURRENT ASSETS

AS AT MARCH 31, 2009

Funds

Particulars Balanced Conservative Debt Growth Growth High Dynamic Guaranteed Guaranteed Pension Pension Pension


Fund Dynamic Income

Accrued Interest 33,750 5,474 7,292 283,899 26,926 491 3,949 254 36 2,165 734 1,053

Bank Balance 82,390 8,099 29,578 823,278 180,501 8,685 8,390 1,058 189 5,953 792 2,250

Dividend Recievable - - - - 9 - - - - - - -

Receivable for Sale of Investments 11,962 43,124 10,281 46,744 8,588 3,521 6,194 33 2 1,027 1 -

Unit Collection A/c# - - - - - - - - - - -

Other Current Assets (for Investments) - - - - - - - - - - - -

Total 128,102 56,697 47,151 1,153,921 216,024 12,697 18,533 1,345 227 9,145 1,527 3,303

# Represents inter fund receivables or payables, if any



Funds



Fund Dynamic Income

Accrued Interest 19,915 3,143 3,986 142,863 9,132 79 - 130 24 748 223 260

Cash &Bank Balance 48,321 15,486 9,873 1,221,127 245,723 30,005 - 690 131 2,921 127 2,554

Dividend Receivable 8 - - 214 127 - - - - - - -

Receivable for Sale of Investments - - - 28,269 3,942 - - - - - - -

Unit Collection A/c# - - - - - - - - - - - -

Other Current Assets (for Investments) - - - - - - - - - - - -

Total 68,244 18,629 13,859 1,392,473 258,924 30,084 - 820 155 3,669 350 2,814


Schedule: F-3

CURRENT ASSETS


Funds

Particulars Pension Pension Growth Growth Group Group Group Group Total



Accrued Interest 9,833 3,363 832 2,054 771 2 - - 382,878

Bank Balance 19,400 19,334 269 50,764 (705) 349 4,382 175 1,245,131

Dividend Recievable - - - - - - - - 9

Receivable for Sale of Investments 4,401 6,044 1,619 - 1,274 - - - 144,815

Unit Collection A/c# - - - - - - - - -

Other Current Assets (for Investments) - - - - - - - - -

Total 33,634 28,741 2,720 52,818 1,340 351 4,382 175 1,772,833


CURRENT ASSETS


Funds




Accrued Interest 6,579 984 1,240 83 417 - - - 189,806

Cash &Bank Balance 18,662 32,590 5,187 2 242 - - - 1,633,641

Dividend Receivable - 5 - - - - - - 354

Receivable for Sale of Investments - - - - - - - - 32,211

Unit Collection A/c# - - - - - - - - -

Other Current Assets (for Investments) - - - - - - - - -

- - - - - - - - -

Total 25,241 33,579 6,427 85 659 - - - 1,856,012


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SCHEDULE: F-4

CURRENT LIABILITIES


Funds



Fund Dynamic Income

Payable for Purchase of Investments 8,588 42,010 10,196 120,378 45,974 8,690 - 292 23 1,776 - -

Other Current Liabilities (for Investments) 1 1 1 68 1 - - - - - - -

Unit Payable A/c# - - - - - - - - - - - -

Total 8,589 42,011 10,197 120,446 45,975 8,690 - 292 23 1,776 - -



Funds



Fund Dynamic Income

Payable for Purchase of Investments 17,813 5,660 8,156 396,855 59,100 12,479 - 102 - 2,005 1,020 1,020

Other Current Liabilities (for Investments) 848 114 106 13,360 2,533 5 - 10 1 33 5 6

Unit Payable A/c# - - - - - - - - - - - -

Total 18,661 5,774 8,262 410,215 61,633 12,484 - 112 1 2,038 1,025 1,026



Funds




Payable for Purchase of Investments 6,146 21,287 1,563 - 708 - - - 267,631Other Current Liabilities (for Investments) 1 - - - - - - - 73Unit Payable A/c# - - - - - - - - -

Total 6,147 21,287 1,563 - 708 - - - 267,704



Funds




Payable for Purchase of Investments 4,218 4,986 5,029 - - - - - 518,443

Other Current Liabilities (for Investments) 542 225 33 2 27 - - - 17,850

Unit Payable A/c# - - - - - - - - -

Total 4,760 5,211 5,062 2 27 - - - 536,293



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SCHEDULE: F-5

OTHER EXPENSES*


Funds



Fund Dynamic Income

Policy Administration charge - - - - - - - - - - - -Surrender charge - - - - - - - - - - - -Switching charge - - - - - - - - - - - -Mortality charge - - - - - - - - - - - -Rider Premium charge - - - - - - - - - - - -Partial withdrawal charge - - - - - - - - - - - -Miscellaneous charge - - - - - - - - - - - -

Total - - - - - - - - - - - -

OTHER EXPENSES*


Funds



Fund Dynamic Income

Policy Administration charge - - - - - - - - - - - -

Surrender charge - - - - - - - - - - -

Switching charge - - - - - - - - - - - -

Mortality charge - - - - - - - - - - - -

Rider Premium charge - - - - - - - - - - - -

Partial withdrawal charge - - - - - - - - - - - -

Miscellaneous charge - - - - - - - - - - - -

Total - - - - - - - - - - - -

*Any expense which is 1% of the total expenses incurred should be disclosed as a separate line item.



Funds




Policy Administration charge - - - - - - - - -

Surrender charge - - - - - - - - -

Switching charge - - - - - - - - -

Mortality charge - - - - - - - - -

Rider Premium charge - - - - - - - - -

Partial withdrawal charge - - - - - - - - -

Miscellaneous charge - - - - - - - - -

Total - - - - - - - - -

SCHEDULE: F-5

OTHER EXPENSES*


Funds




Policy Administration charge - - - - - - - - -

Surrender charge - - - - - - - - -

Switching charge - - - - - - - - -

Mortality charge - - - - - - - - -

Rider Premium charge - - - - - - - - -

Partial withdrawal charge - - - - - - - - -

Miscellaneous charge - - - - - - - - -

Total - - - - - - - - -

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Schedules Annexed to and forming part of financial statements for the year ended March 31, 2009

(All Amounts in Thousands of Indian Rupees, unless otherwise stated)

SCHEDULE-16

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

BACKGROUND

Max New York Life Insurance Company Limited (‘the Insurer’) was incorporated on July 11, 2000 as a public limited company under the

Companies Act,1956 to undertake and carry on the business of life insurance and annuity. The Insurer has obtained a license from the

Insurance Regulatory and Development Authority (‘IRDA’) dated November 15, 2000 for carrying on life insurance business.

The insurer offers for individual and group, a range of participating, non participating and linked products covering life insurance,

pension and health benefits including riders.

These products are distributed by individual agents, corporate agents, banks, brokers and other intermediaries.

I SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation

The financial statements are prepared under the historical cost convention on the accrual basis of accounting, in accordance with

the accounting principles and framework prescribed by the Insurance Regulatory and Development Authority (Preparation of

Financial Statements and Auditor’s Report of Insurance Companies) Regulations, 2002, the accounting standards issued by The

Institute of Chartered Accountants of India (ICAI) and the requirements of the Insurance Act 1938, Insurance Regulatory and

Development Authority Act, 1999, and various circulars issued there under and the Companies Act, 1956, to the extent applicable

and the practices prevailing within the insurance industry in India.

Use of estimates

The preparation of the financial statements in conformity with the generally accepted accounting principles requires that the

management makes estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent

liabilities as at the date of the financial statements, and the reported amounts of revenue and expenses during the year. Actual

results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in the current and future

periods.

(a) Revenue Recognition

Premium Income

Premium is recognized as income when due. Premium on lapsed policies is recognised as income when such policies are

reinstated.

For linked business, premium income is recognised when the associated units are allotted. Top-up premiums (i.e. premium

paid in excess of annual target premium as per policy contract) are recognised as single premium.

Income from linked fund

Fees on linked policies including fund management charges, policy administration charges, mortality charges, etc., are recovered

from the linked fund and recognised in accordance with the terms and conditions of the policies.

Income earned on investments and loans

Interest on investments and policy loan is recognised on accrual basis and taken to the Revenue and Profit and Loss Account,

as appropriate. Dividend income is recognised when the right to receive is established.

Realised gains/loss on debt securities for other than linked business is the difference between the sale consideration and the

amortised cost, which is computed on weighted average basis, as on the date of sale. Sale consideration for the purpose of

realised gain/loss is net of brokerage and taxes, if any and excludes interest accrued till transaction settlement date. In case

of listed equity shares /mutual fund units, the profit/loss on actual sale of investment includes the accumulated changes in

the fair value, previously recognised under “Fair Value Change Account”, revenue/profit and loss account, as applicable.

Unrealised gains due to changes in fair value of listed equity shares and mutual fund units are credited to the ‘Fair Value

Change Account’. Unrealised losses due to changes in fair value of listed equity shares are debited to the revenue and profit

3 MNYL 1.p65 8/19/2009, 12:31 PM214





and loss account as applicable.

For linked business realised gain/loss on securities is the difference between the sale consideration and the book value, which

is computed on weighted average basis, as on the date of sale. Sale consideration for the purpose of realised gain/loss is net

of brokerage and taxes, if any and excludes interest accrued till transaction settlement date. Unrealised gains and losses are

recognised in the respective fund’s revenue account.

(b) Reinsurance premium

Cost of reinsurance ceded is accounted for at the time of recognition of premium income in accordance with the treaty or in-

principle arrangement with the reinsurer.

(c) Acquisition Costs

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.

(d) Benefits Paid

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.

(e) Investments

Investments are made in accordance with the Insurance Act, 1938 and the Insurance Regulatory & Development Authority

(Investment) Regulations, 2008. 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.

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.

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 revenue account and profit and

loss account, as the case may be, over the remaining period to maturity on the basis of their intrinsic yield.

Debt securities with a residual maturity upto 182 days are valued at amortised cost (till the beginning of the day), spread

uniformly over the remaining maturity period of the instrument.

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 Bombay Stock Exchange (BSE) Ltd. 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.

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


3 MNYL 1.p65 8/19/2009, 12:31 PM215




fund units are taken at the previous day’s net asset values.

Debt securities with a residual maturity upto 182 days are valued at amortised cost (till the beginning of the day), spread

uniformly over the remaining maturity period of the instrument.

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 as at previous day closing.

(f) Fixed Assets, Depreciation and Impairment

Fixed Assets are stated at cost less accumulated depreciation. Cost includes acquisition, installation and other incidental

expenses, including freight and taxes incurred to bring the asset to its present location and working condition for its intended

use. Any additions to the original fixed assets are depreciated over the remaining useful life of the original asset. Intangible

assets comprising software are stated at cost less amortisation.

All significant improvements to software are capitalised while the insignificant improvements are charged as software

maintenance expenses. Assets individually costing upto rupees five thousand and not as part of composite contract are fully

depreciated in the year of acquisition.

Fixed assets at third party locations and not under direct physical control of the Insurer are fully depreciated in the year of

purchase.

Depreciation on assets is charged on straight-line method at the following rates over their economic useful lives as estimated

by the Management.

Depreciation is provided for the full month in the month of acquisition of the related asset. No depreciation is provided in the

month of sale/disposal of asset.

Assets Estimated Useful life

Software (excluding Policy Administration System and Satellite systems) 4 years

Policy Administration & Satellite systems (hardware and software) 6 years

Leasehold Improvements Renewable period of respective leases

subject to a maximum of 10 years

Furniture and Fixtures 10 years

Information Technology equipment, communication networks and servers 4 years

Vehicles 5 years

Office Equipment 5 years

Hand Held Data Devices 1 year

Impairment

Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be

impaired. Impairment occurs where the carrying value exceeds the present value of future cash flows expected to arise from

the continuing use of the asset and its eventual disposal. The impairment loss to be expensed is determined as the excess of

the carrying amount over the higher of the asset’s net sales price or present value, as determined above.

(g) Liability for Life Policies

The estimated liability for life policies in force is determined by the Insurer’s appointed actuary, pursuant to his annual

investigation of life insurance business, using appropriate methods and assumptions that conform with regulations issued by

the IRDA and Guidance notes issued by the Institute of Actuaries of India. The liability is so calculated that together with

future premium payments and investment income, the Insurer meets all future claims (including bonus entitlements to

policyholders, if applicable,) and expenses.


(All Amounts in Thousands of Indian Rupees, unless otherwise stated)(All Amounts in Thousands of Indian Rupees, unless otherwise stated)

3 MNYL 1.p65 8/19/2009, 12:31 PM216




Liabilities, if any, as determined by appointed actuary, in respect of Linked policies which have lapsed are maintained by

appropriation from the Revenue account 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.

(h) Employees’ Benefits

Employees’ Benefits have been recognised in accordance with the relevant provisions of the Accounting Standard 15 (revised

2005).

All short term employee benefits are accounted on undiscounted basis during the accounting period and charged to the

revenue account and profit and loss account, as applicable based on services rendered by employees.

Deferred compensation, which is a long term employee benefit is provided for based on the independent actuarial valuation

carried out as at the balance sheet date and charged to the revenue account and profit and loss account, as applicable.

Charge for non-vesting compensating leaves is calculated considering past experience, attrition rate and discount rate for

determining the liability as at the balance sheet date.

Insurer’s contributions towards Provident Fund, a defined contribution plan, which is administered through a trust, is at the

rate as specified under the trust deed and charged to the revenue account and profit and loss account, as applicable.

Gratuity, is administered through a trust. The trust has taken a group policy from the Insurer to cover the liability towards

gratuity.

Insurer’s liability towards gratuity, a defined benefit plan, is accounted on the basis of independent actuarial valuation

carried out as at the balance sheet date and charged to the revenue account and profit and loss account, as applicable.

(i) Employee Stock Options Plans

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


(j) Foreign Exchange Transactions

Transactions in foreign currency are recorded at the rates of exchange prevailing on the date of transaction. Monetary assets

and liabilities denominated in foreign currencies are translated at year end rates. The difference in translation of monetary

assets and liabilities and realised gains and losses on foreign exchange transactions, are recognised in the revenue account

and profit and loss account, as applicable.

(k) Segmental Reporting

The Insurer’s business is organised on a national basis and having following segments : Individual Life Participating business,

Participating Pension business, Individual Life Non-participating business , Group business, Health, Linked Individual, Linked

Pension, Linked Group and Shareholders’ Funds. Non-participating businesses include policies with committed cash flows,

with no rights to the surplus in the business. Participating business include policies other than those of non-participating

businesses. Investment of shareholder funds constitute investible funds relating to shareholders. Accordingly, the Insurer has

provided primary segment information for these segments as per the Accounting Standard 17 on ‘ Segment Reporting’, issued

by the ICAI, read with the relevant IRDA Regulations.

Allocation of assets, liabilities, revenues and expenses

Assets, liabilities, revenues and expenses directly identifiable to the business segments are allocated on an actual basis.

Assets, liabilities, revenues and expenses, which are not directly identifiable, are apportioned to the business segment by

adopting one or more of the following basis, which is considered as most appropriate :



3 MNYL 1.p65 8/19/2009, 12:31 PM217




- total number of policies in-force

- annualised first year premium ,

- subsequent year premium ,

- total premium ,

- weighted combination of sum assured, first year premium, renewal premium income and total number of policies in force,

- sum assured and

- first year commission.

(l) Contribution to Policyholders’ Account (Technical Account)

Contribution to Policyholders’ Account (Technical Account) is made as decided by the Board of Directors and approved by the

Shareholders.

(m) Taxation

Provision for current income tax, wealth tax and fringe benefit tax , if any, is made on accrual basis after considering relevant

credit allowances, exemptions and valuation rules as determined under the Income Tax Act, 1961. The difference that results

between the taxable profit and the profit as per financial statements are identified and thereafter deferred tax assets or

deferred tax liabilities are recorded as timing differences that originate in one accounting period and reverse in another,

based on the tax effect of aggregate amount. The tax effect is calculated on the accumulated timing differences at the end

of an accounting period based on prevailing enacted regulations.

In case of unabsorbed depreciation or carried forward loss deferred tax assets are recognised only if there is virtual certainty

of realisation of such assets.

Deferred tax assets are revalued at each balance sheet date and written up / down to reflect the amount that is reasonably/

virtually certain (as the case may be) to be realised.

Service tax liability on risk premium is set off against the service tax credits available from service tax paid on input services.

Unutilised credit are carried forward for future set off in subsequent periods. Relevant provision is created, if required, based

on estimated realisation of the unutilised credit.

(n) Operating Lease

Lease of assets under which all the risks and benefits of ownership are effectively retained by the lessor is classified as

operating leases. Operating lease rentals including escalations are recognised in the revenue account and profit and loss

account, as the case may be, on a straight line basis over the period of the lease.

(o) Loans

Loans are stated at historical cost, subject to provision for impairment, if any.

(p) Provisions and Contingencies

The insurer creates a provision for litigation, assessment, fines, penalties, claims (other than insurance claims), etc when there

is present obligation as a result of a past event that would probably result in an outflow of resources and a reliable estimate

can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation

or a present obligation that may, but probably will not, require an outflow of resources. However, contingent assets are not

recongnised on prudent basis.

(q) 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.



3 MNYL 1.p65 8/19/2009, 12:31 PM218




II NOTES TO ACCOUNTS

(a) Contingent Liability


March 31, 2009 March 31, 2008

Partly paid-up investment - -

Underwriting commitments outstanding (in respect of shares and securities) - -

Claims, other than against policies, not acknowledged as debts by the Insurer 14,254 15,681

Guarantees given by or on behalf of the Insurer - -

Statutory demands/ liabilities in dispute, not provided for 389,844 -

Reinsurance obligations to the extent not provided for in accounts - -

Others * 28,315 6,131

Total 432,413 21,812

* Represents potential liability in respect of repudiated Policyholders claims

(b) Actuarial assumptions

The Insurer’s Appointed Actuary has determined valuation assumptions that conform with Regulations issued by the IRDA

and professional guidance notes issued by the Institute of Actuaries of India. Details of assumptions are given below:

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% (2008: 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% (2008: 0.75%) for

participating business and 1.75% (2008: 1.75%) for non-participating business. Gross unit growth rate of 7.5% pa (2008:

7.5% pa) has been used which was further reduced by a margin of adverse deviation of 1.25% (2008: 1.25%) per annum.

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% (2008: 10%) for participating business and

25% (2008:25%) for non-participating, unit linked and health business.

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% (2008: 95% to 300%) of these tables have been used which were further increased by a margin

for adverse deviation of 25% (2008: 25%).

Expenses:

The maintenance expenses per policy are based on expenses projected for the calendar year 2009.

These were further increased by margins for adverse deviation of 10% (2008: 5%) for participating policies and 10% (2008:

10%) for non-participating and health policies.

Inflation:

An assumption of 6% pa (2008: 6% pa) for expense inflation has been used.



3 MNYL 1.p65 8/19/2009, 12:31 PM219




Commission :

It is based on the actual commission rates paid. There has been no change in these assumptions from those used last year.

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% (2008: 20%) for participating policies

50% (2008: 50%) for non-participating policies and 20% (2008: 20%) for health plans.

Future bonuses:

Provision is made for future bonuses based on estimated expected bonus payouts consistent with the valuation assumptions

and policyholders’ reasonable expectations

(c) Restructured Assets

The total of loan assets, standard assets, sub-standard assets and doubtful assets which are subject to restructuring is Rs Nil

(2008:Rs. Nil).

(d) Encumbrances

The assets of the Insurer are free from all encumbrances.

(e) Commitments

Estimated amount of contracts remaining to be executed on fixed assets (net of advances) is Rs 140,294 (2008 Rs 147,116)

Commitments made and outstanding for investments and loans is Rs Nil (2008 Rs Nil)

(f) Taxation

The Insurer carries the business of Life Insurance, therefore the provisions of section 44 and the first schedule of Income tax

Act 1961, are applicable for computation of profit and gains of business. In the opinion of the management, provision for

income tax is not required as Insurer does not have any taxable income during the current financial year.

As per Accounting Standard 22 on “Accounting for taxes on income” issued by ICAI, virtual certainty supported by conclusive

evidence is necessary to create deferred tax asset on unabsorbed losses. Life Insurance is a long gestation business and hence,

deferred tax asset on unabsorbed carried forward losses has not been created.

(g) Investments

The investments are effected from the respective funds of the policyholders and shareholders and income thereon has been

accounted accordingly.

All the investments are performing in nature.

The Insurer does not have any investment property.

There are no assets require to be deposited by the insurer under any local laws or otherwise encumbered in or outside India

other than investments under Section 7 of the Insurance Act 1938 as below:

Statutory Deposit Details As At As At

March 31, 2009 March 31, 2008

10.18% Government of India Security 2026 (Face value Rs. 100,000)

in lieu of deposit with Reserve Bank of India* 106,605 106,761

Total 106,605 106,761

* This is in the constituent subsidiary general ledger account maintained with HSBC Bank, Mumbai, India under intimation to IRDA.

(h) Value of unsettled contracts relating to investments

Value of contracts in relation to investments, for:

(a) Purchases where deliveries are pending- Rs 735,465 (2008 Rs Nil)

(b) Sales where payments are overdue- Rs Nil (2008 Rs Nil)



3 MNYL 1.p65 8/19/2009, 12:31 PM220




(i) Managerial Remuneration

Managerial remuneration details are as below:

Particulars 2008-09 2007-08

Salary & Allowances 81,886 40,391

Contribution to Provident Fund 965 459

Value of Perquisites 10,009 11,737

Total 92,860 52,587

Note :

(i) The above figures do not include provision for employee benefits, which are actuarially determined for the Insurer as a whole.(ii) The above remuneration is in accordance with the requirements of Section 34A of the Insurance Act, 1938 and as

approved by IRDA.(iii) All Perquisites have been computed in accordance with Income Tax Act, 1961.

(j) Employee Stock Option Plans (ESOP)

a) Employee Stock Option Plan 2004

The ESOP 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 17,028 (2008 : Rs 7,081) has been accrued as ESOP cost in the revenue and

profit and loss account as applicable.

b) Employee Stock Option Plan 2006

The ESOP 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 194 (2008 : Rs NIL) has been accrued as ESOP cost in the revenue and

profit and loss account as applicable.

A summary of status of Insurer’s Employee Stock Option Plans is as given below:

Particulars As At As At

March 31, 2009 March 31, 2008

(No.) in’000 (No.) in’000

Outstanding at the beginning of the year 7,475 8,000

Add: granted during the year - -

Less: Forfeited/lapsed during the year 425 525

Exercised during the year - -

Outstanding at the end of the year 7,050 7,475

Had the company used the fair value of the options to values its Employee Stock Option Plans the loss in profit and loss

account (Shareholders’ Account) would have been higher by Rs 9,098 (2008: Rs Nil) and basic and dilutive loss per share

would have been Rs 2.77 (2008: Rs Nil).



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(k) Percentage of Business sector-wise

Percentage of policies written business sector - wise is as below:

Particulars 2008-09

First year Premium

Policy Nos. Income* No of Lives covered

Total Business 1,207,062 18,437,115 442,785

Rural Sector 301,774 3,420,285

As % of Total Business 25.00% 18.55%

Social Sector 4,153 58,391


* excluding premium due & unpaid Rs. -8,031

Particulars 2007-08

First year Premium

Policy Nos. Income** No of Lives covered

Total Business 873,613 15,942,079 1,362,834

Rural Sector 189,088 2,015,941


Social Sector 15,228 82,037


** excluding premium due & unpaid Rs. 36,171

(l) Percentage of risk-retained and risk-reinsured

The extent of risk retained and reinsured is given below :

Particulars Premium Sum Assured

2008-09 2007-08 2008-09 2007-08

Individual Business :

Risk retained 99.25% 99.37% 80.28% 80.62%

Risk reinsured 0.75% 0.63% 19.72% 19.38%

Group Business :

Risk retained 84.25% 89.27% 55.96% 45.87%

Risk reinsured 15.75% 10.73% 44.04% 54.13%

(m) Operating lease commitments

The Insurer has leased office premises under various agreements with various expiration dates extending upto 10 years. Lease

payments made under operating lease agreements have been fully recognised in the books of accounts.

The lease rental charged under non cancelable operating leases during the current period and maximum obligation on such

leases payable at the balance sheet date are as follows :

2009 2008

Lease rentals for non-cancelable leases paid during the year 203,471 33,282

Lease obligations for non-cancelable lease

Within one year of the balance sheet date 234,432 36,552

Due in a period between one year and five years 299,913 38,690

Due after five years - -



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(n) Claims outstanding

Claims, which are settled and unpaid for more than 6 months as on Balance Sheet date amount to Rs Nil (2008-Rs Nil)

(o) The Insurer 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. 3,697,263 for grant of license and provision of technical services to MNYL over the tenure of the

agreement.

During the current year, the Insurer has recognised expense of Rs. 508,469 in Profit and Loss Account (Non-Technical Account),

considering amortization of the total consideration on straight line basis over the tenure of the agreement.

(p) During the year the Insurer has received an innovation grant of Rs 10,000 (2008: Rs Nil) from International Labour Organisation

(ILO) for the development of its ‘Max Vijay products’, which caters to low income class people. The grant amount has been

entirely utilised and reduced from the gross expenditures under the following heads in the Revenue Account (Technical

Account) and Profit and Loss Account (Non- Technical Account) as applicable :

a) Employees remuneration and welfare benefits

b) Legal, professional and consultancy charges

c) Advertisement and publicity

(q) Contributions from Shareholders’ Fund to Non Participating Policyholders’ Funds

The Insurer has transferred amount aggregating to Rs 3,715,802 (2008: Rs 1,791,306) from the Shareholder’s Account (Non-

technical) to the non participating business segments, in Policyholder’s Account (Technical), to fund the deficits in respective

segments.

(r) Policyholders’ Bonus

The Bonus to participating policyholders, for current year as recommended by Appointed Actuary has been included in

Change in valuation against policies in force.

(s) Policy LiabilitiesThe movement of policy liabilities (forming part of Policyholders funds) is as follows :

Particulars Participating Policies Non-Participating Policies Linked Policies Total

Individual Life Pension Individual Life Health Group Individual Linked Linked Pension Linked Group

At start of Year 12,480,763 258,833 524,440 - 229,361 17,853,453 845,589 81,837 32,274,276

Add : Change in valuation

of liability against life

policies in force, Net 4,018,450 47,617 392,676 18,128 (26,309) 11,232,392 594,648 113,860 16,391,462

Add : Policyholder

Bonus provided 1,174,106 14,007 - - - - - - 1,188,113

At end of Year 17,673,319 320,457 917,116 18,128 203,052 29,085,845 1,440,237 195,697 49,853,851

(t) (i) Segmental Reporting

1. Business SegmentsThe Insurer’s business is organised on a national basis and having following segments : Individual Life Participatingbusiness, Participating Pension business, Individual Life Non-participating business , Group business, Health, LinkedIndividual, Linked Pension, Linked Group and Shareholders’ Funds. Non-participating businesses include policies withcommitted cash flows, with no rights to the surplus in the business. Participating business include policies other thanthose of non-participating businesses. Investment of shareholder funds constitute investible funds relating to shareholders.Accordingly, the Insurer has provided primary segment information for these segments as per the Accounting Standard17 on ‘ Segment Reporting’, issued by the ICAI, read with the relevant IRDA Regulations.



3 MNYL 1.p65 8/19/2009, 12:31 PM223




2. Geographical SegmentsSince the business operation of the Insurer is in India only, the same is considered as single geographical segment.

The segmental report for the year ended March 31, 2009 is given below :

Particulars Participating Policies Non-Participating Policies Linked Policies

Individual Pension Individual Health Group Individual Linked Linked Shareholders Total

Life Life Linked Pension Group Funds

SEGMENTAL SHAREHOLDERS’ / POLICYHOLDERS’ ACCOUNT

Revenue

Premium earned - net 10,768,469 85,463 327,120 218,409 144,897 25,200,122 1,271,215 174,642 - 38,190,337

Income from Investments 1,258,635 34,280 54,374 138 27,670 (3,364,300) (189,858) (4,141) 338,248 (1,844,954)

Other Income 2,960 5 643,646 310,385 5,756 2,475,444 196,455 90,613 301 3,725,565

Unallocated Revenue - - - - - - - - - -

Total Revenue (net) 12,030,064 119,748 1,025,140 528,932 178,323 24,311,266 1,277,812 261,114 338,549 40,070,948

Expenses

Commission 1,054,781 922 51,459 50,958 4,175 2,705,514 47,589 367 - 3,915,765

Operating Expenses including provision for doubtful

debts and bad debts written off 4,506,967 7,937 521,575 449,555 155,926 9,735,759 625,583 100,067 47,179 16,150,548

Provision for Tax - Fringe Benefit Tax 24,120 46 2,813 2,401 635 45,895 2,924 596 - 79,430

Benefits Paid (Net) 1,432,747 22,056 56,617 7,890 43,896 591,706 7,068 46,224 - 2,208,204

Interim Bonus - - - - - - - - - -

Change in valuation of liability against life policies in

force (Net) 5,192,556 61,624 392,676 18,128 (26,309) 11,232,392 594,648 113,860 - 17,579,575

Net Contribution to policyholders fund - - - - - - - - 3,715,802 3,715,802

Provisions (other than taxation) for diminution in the

value of investments( Net) - - - - - - - - 42,249 42,249

Total Expenses 12,211,171 92,585 1,025,140 528,932 178,323 24,311,266 1,277,812 261,114 3,805,230 43,691,573

SEGMENT OPERATING RESULTS (181,107) 27,163 - - - - - - (3,466,681) (3,620,625)

Transfer (to Shareholder) / from Policyholders (108,726) (1,393) - - - - - - 110,119 -

Unallocated other income - - - - - - - - - -

Shareholder expenses - - - - - - - - (573,594) (573,594)

Net Operating Profit/(Loss) (4,194,219)

SEGMENTAL BALANCE SHEET

Segment assets

Investments 17,926,968 458,868 925,169 21,096 322,095 29,086,226 1,449,182 195,697 5,229,050 55,614,351

Loan - - - - - - - - - -

Net Fixed Assets 986,411 1,901 115,033 98,216 26,250 1,876,992 119,567 24,363 - 3,248,733

Advances and Other Assets 1,357,684 7,662 131,056 102,871 69,074 2,495,384 148,643 28,115 52,746 4,393,235

Total Segment Assets 20,271,063 468,431 1,171,258 222,183 417,419 33,458,602 1,717,392 248,175 5,281,796 63,256,319

Debit Balance In Profit and Loss Account

(Shareholders’ Account) - - - - - - - - 10,027,545 10,027,545

Deficit In The Revenue Account

(Policyholders’ Account) - - - - - - - - - -

Unallocated Assets

Cash and Bank Balances - - - - - - - - - 246,596

Advances and Other Assets - - - - - - - - - 56,730

Total Assets 73,587,190

Segment Liabilities

Policy Liabilities 17,673,319 320,457 917,116 18,128 203,052 29,085,845 1,440,237 195,697 - 49,853,851

Current Liabilities 1,600,918 4,559 154,991 132,032 37,238 3,244,548 182,976 34,045 - 5,391,307

Fair Value Change Account - - - - - - - - 7,850 7,850

Total Segment Liabilities 19,274,237 325,016 1,072,107 150,160 240,290 32,330,393 1,623,213 229,742 7,850 55,253,008

Segment Reserves - - - - - - - - - -

Reserves and Surplus - - - - - - - - - -

Equity Capital - - - - - - - - - 17,824,326

Employee Share Based Payment Plan Outstanding - - - - - - - - - 79,941

Funds For Future Appropriations 55,269 114,190 - - - - - - - 169,460

Unallocated Liabilities

Current Liabilities - - - - - - - - - 258,914

Provisions - - - - - - - - - 26,958

Deferred Expenditure - - - - - - - - - (25,417)

Total Liabilities 73,587,190



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Particulars Participating Policies Non-Participating Policies Linked PoliciesIndividual Pension Individual Health Group Individual Linked Linked Shareholders Total



Other Information

Capital Expenditure during the year 708,778 1,365 82,656 70,571 18,673 1,348,695 85,913 17,506 - 2,334,157

Depreciation for the year 197,430 380 23,023 19,657 6,462 375,677 23,933 4,876 163 651,601

Non-cash expenditure other than depreciation

Liabilities to Policyholders 5,192,556 61,624 392,676 18,128 (26,309) 11,232,392 594,648 113,860 - 17,579,575

Unallocated preliminary expenses - - - - - - - - - -

The segmental report for the year ended March 31, 2008 is given below :

Particulars Participating Policies Non-Participating Policies Linked PoliciesIndividual Pension Individual Health Group Individual Linked Linked Shareholders Total


SEGMENTAL SHAREHOLDERS’ / POLICYHOLDERS’ ACCOUNTRevenuePremium earned - net 8,940,532 87,192 206,755 40,936 384,296 16,458,609 748,278 58,931 - 26,925,529Income from Investments 826,072 18,113 39,760 - 16,344 1,323,552 11,530 5,705 216,638 2,457,714Other Income 1,010 4 6,662 37,494 7,281 1,788,272 102,351 3,934 152,258 2,099,266Unallocated Revenue - - - - - - - - - -Total Revenue (net) 9,767,614 105,309 253,177 78,430 407,921 19,570,433 862,159 68,570 368,896 31,482,509ExpensesCommission 1,049,238 1,015 32,080 11,808 2,360 2,712,410 35,686 10 - 3,844,607Operating Expenses including provisionfor doubtful debts and bad debts written off 3,048,774 6,222 38,164 66,205 193,462 5,235,381 218,832 8,513 35,387 8,850,940Provision for Tax - Fringe Benefit Tax 17,471 43 7 417 1,348 26,175 1,372 58 - 46,891Benefits Paid (Net) 1,056,961 20,009 43,297 - 37,498 198,933 269 3,112 - 1,360,079Interim Bonus - - - - - - - - - -Change in valuation of liability againstlife policies in force (Net) 4,172,306 57,756 139,629 - 173,253 11,397,534 606,000 56,877 - 16,603,355Net Contribution to policyholders fund - - - - - - - - 1,943,444 1,943,444Provisions (other than taxation) for diminutionin the value of investments( Net) - - - - - - - - 5,138 5,138Total Expenses 9,344,750 85,045 253,177 78,430 407,921 19,570,433 862,159 68,570 1,983,969 32,654,454SEGMENT OPERATING RESULTS 422,864 20,264 - - - - - - (1,615,073) (1,171,945)Transfer (to Shareholder) / from Policyholders (77,754) (1,369) - - - - - - 79,123 -Unallocated other income - - - - - - - - - -Shareholder expenses - - - - - - - - (33,367) (33,367)Net Operating Profit/(Loss) (1,205,312)

SEGMENTAL BALANCE SHEETSegment assetsInvestments 12,910,192 372,346 583,670 504 322,592 17,899,295 852,146 81,837 4,167,294 37,189,876Loan - - - - - - - - - -Net Fixed Assets 587,122 1,427 236 14,021 45,575 879,621 46,104 1,961 2 1,576,069Advances and Other Assets 998,793 7,305 22,193 16,907 86,640 1,496,292 74,754 4,119 49,254 2,756,257

Total Segment Assets 14,496,107 381,078 606,099 31,432 454,807 20,275,208 973,004 87,917 4,216,550 41,522,202Debit Balance In Profit And Loss Account(Shareholders’ Account) - - - - - - - - 6,097,389 6,097,389Deficit In The Revenue Account(Policyholders’ Account) - - - - - - - - - -Unallocated AssetsCash and Bank Balances - - - - - - - - - 193,707Advances and Other Assets - - - - - - - - - 50,678


Segment LiabilitiesPolicy Liabilities 12,480,763 258,833 524,440 - 229,361 17,853,453 845,589 81,837 - 32,274,276Current Liabilities 1,596,507 5,425 7,108 33,464 114,494 2,498,130 124,850 5,922 - 4,385,900Fair Value Change Account - - - - - - - - 92,545 92,545Total Segment Liabilities 14,077,270 264,258 531,548 33,464 343,855 20,351,583 970,439 87,759 92,545 36,752,721Segment Reserves - - - - - - - - - -Reserves and Surplus - - - - - - - - - 74,750Equity Capital - - - - - - - - - 10,324,326Unallocated LiabilitiesCurrent Liabilities - - - - - - - - - 291,354Provisions - - - - - - - - - 24,750Funds For Future Appropriations - - - - - - - - - 433,523Deferred Expenditure - - - - - - - - - (37,448)


Other InformationCapital Expenditure during the year 382,068 930 153 9,123 29,487 572,413 30,003 1,276 - 1,025,453Depreciation for the year 128,055 312 50 3,061 9,882 191,853 10,055 428 192 343,888Non-cash expenditure other than depreciationLiabilities to Policyholders 4,172,306 57,756 139,629 - 173,253 11,397,534 606,000 56,877 - 16,603,355

Unallocated preliminary expenses -

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(u) The ratios as prescribed by IRDA are given below :

Ratios Year ended Year ended

March 31, 2009 March 31, 2008

(a) New Business Premium Income Growth (segment wise)

(Current Year New Business Premium as a % of Previous Year New Business Premium)

Individual Life - Participating 107.60% 113.17%

Pension - Participating 95.62% 266.89%

Individual Life - Non Participating 178.71% 164.62%

Health Insurance 531.62% 0.00%

Group 38.50% 1053.44%

Individual Linked 115.46% 195.00%

Linked Pension 142.39% 259.84%

Linked Group 291.30% 233.88%

(b) Net Retention Ratio 99.01% 99.19%

(Net premium as a % of gross premium)

(c) Ratio of Expenses of Management 52.11% 46.81%

(Expenses of Management as a % of Gross Premium)

(d) Commission Ratio 10.15% 14.16%

(Gross Commission as a % of Gross Premium)

(e) Ratio of Policy holders’ liabilities to shareholders’ funds 248.18% 314.13%

(Policyholders’ Liability as a % of Shareholders’ Fund)

(f) Growth rate of Shareholders’ Fund 80.39% 52.27%

(Increase/ (Decrease) in Shareholders’ Fund over previous year as

a % of Shareholders’ Funds of Previous year)

(g) Ratio of Policyholders’ Surplus to Policy holders’ liability 1.43% 3.24%

(Policyholders’ Surplus as a % of Policyholders’ Liability)

(Refer to Note II on Schedule 16)

(h) Change in net worth (over previous year) 80.39% 52.27%

(Increase/ (Decrease) in Net Worth over previous year as a % of Net Worth of Previous year)

(i) Profit after tax / Total Income (875.96)% (350.28)%

(Refer to Note II on Schedule 16)

(j) (Total Real Estate+Loans)/ Cash & Invested assets NA NA

(k) Total Investments/(Capital + Total Surplus) 314.69% 388.32%

(l) Total Affiliated Investments/(Capital + Total Surplus) NA NA

Notes for calculation of above Ratios

1) Expenses of Management include operating expenses and commission.

2) Shareholders funds = Share Capital (net of Preliminary Expenses to the extent not written off /adjusted) + Reserve and

Surplus/ Deficit in Profit and Loss Account (Non-Technical).

3) Policyholders’ surplus is the amount available for Appropriation, in Revenue Account (Technical).

4) Total Surplus = Insurance Reserves + Debit balance in Profit and Loss Account (Non-Technical) as appearing in Balance Sheet

+Deficit in the Revenue Account (Technical) as appearing in Balance Sheet+Funds for Future Appropriation.

5) Net Worth = Shareholders Funds + Insurance Reserves+Deficit in the Revenue Account (Technical) as appearing in Balance

Sheet.

6) Profit After Tax and total income are as disclosed in the Profit and Loss Account (Non-Technical ).

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(v) Related parties DisclosuresThe details of significant related party transactions as per Accounting Standard 18 issued by ICAI is given below :

Summary of Related Parties Transactions for the year ended March 31, 2009

Holding Fellow Shareholders Key Enterprises over which TotalCompany Subsidiaries with Management key management

Significant Personnel personnel haveInfluence significant influence

(a) (b) (c) (d) (e)

Equity Share Capital 5,550,000 - 1,950,000 - - 7,500,000Purchase of Fixed Assets - - - - - -Purchase of Goods/Services - - - - - -Premium received - - - - - -Rendering Services - - - - - -Receiving of Services - 4,700 937,466 92,860 4,533 946,699Reimbursement of Expenses 1,180 16,532 19,962 - 93 37,767Voluntary Contribution - - - - 25,000 25,000Balance receivable/(payable)as at March 31, 2009 (1,063) (3,515) (38,996) - (485) -

Notes:1) All the above transactions have been conducted at arm’s length basis.2) In accordance with the requirements of Accounting Standards (AS) - 18, “Related Party Disclosures”, the names of the related party where

control exists/able to exercise significant influence along with the aggregate transactions and year end balances with them as identified andcertified by the management are given below:

Description of relationship Name of Party

(a) Holding Company Max India Ltd.(b) Fellow Subsidiaries Pharmax Corporation Ltd.

Max Healthcare Institute Ltd.Max Medical Services Ltd.Alps Hospital Ltd.Neeman Medical International BV, NetherlandsNeeman Medical International NV, NetherlandsMax Neeman Medical International Inc, USAMax Neeman Medical International Ltd.Max Ateev Ltd.Max UK Ltd, UKMax Healthstaff International Ltd .

(c) Shareholder with significant influence New York Life International LLCNew York Life Insurance Company

(d) Key Management Personnel Analjit Singh (Chairman) / Gary Bennett (CEO & Managing Director, till 31-10-2008)/ Sunil Sharma (Executive Director & COO, till 31-12-2008)/ Rajit Mehta ( ExecutiveDirector & COO, w.e.f 01-11-2008)/ Rajesh Sud ( CEO & Managing Director, w.e.f01-11-2008 )

(e) Enterprises related to Liquid Investments & Trading Company, New Delhi House Services Ltd., MedicareKey Management Personnel Investments Ltd., Maxopp Investments Ltd., Cheminvest Ltd., Pivet Finances Ltd.,

Lakeview Enterprises, Delhi Guest Houses 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., Scorpios Beverages Pvt. Ltd., TrophyResorts & Guest Houses Pvt. Ltd., Trophy Estates Pvt. Ltd., Gaylord Impex Ltd., PenInvestments Ltd., Mohair Investment & Trading Co. Pvt. Ltd., PVT Investments Ltd.,Malsi Estates Ltd., TVP Investments Pvt. Ltd., BAS Investments Pvt. Ltd., Vitasta EstatePvt. Ltd., Terra Planet Estates Pvt. Ltd., Doon Holiday Resorts Pvt. Ltd., Urban SpaceConsultants Pvt. Ltd., Capricorn Health Services Pvt. Ltd., Leo Retailing and HealthServices Pvt. Ltd., Nurture Health Services Pvt. Ltd., Capricorn Retailing and ServicesPvt. Ltd., Veer Health Services Pvt. Ltd., Wegmans Business Park Pvt. Ltd., SynergyInfracon Pvt Ltd., Max Speciality Products Ltd., Max India Foundation, Max BupaHealth Insurance Ltd.

3 MNYL 1.p65 8/19/2009, 12:31 PM227






Summary of Related Parties Transactions for the year ended March 31, 2008

Holding Fellow Shareholders Key Enterprises over which TotalCompany Subsidiaries with Management key management

Significant Personnel personnel haveInfluence significant influence

(a) (b) (c) (d) (e)

Equity Share Capital 2,220,000 - 780,000 - - 3,000,000Purchase of Fixed Assets - - - - - -Purchase of Goods/Services - - - - - -Premium received - - - - - -Rendering Services - - - - - -Receiving of Services - 1,581 - 52,587 2,931 57,099Reimbursement of Expenses 1,709 10,586 7,668 - 293 20,256Balance receivable/(payable)as at March 31, 2008 (375) (357) (36,335) - (40) -

Notes:1) All the above transactions have been conducted at arm’s length basis.2) In accordance with the requirements of Accounting Standards (AS) - 18, “Related Party Disclosures”, the names of the related party where

control exists/able to exercise significant influence along with the aggregate transactions and year end balances with them as identified andcertified by the management are given below:

Description of relationship Name of Party

(a) Holding Company Max India Ltd.(b) Fellow Subsidiaries Pharmax Corporation Ltd.

Max Healthcare Institute Ltd.Max Medical Services Ltd.Alps Hospital Ltd.Neeman Medical International BV, NetherlandsNeeman Medical International NV, NetherlandsMax Neeman Medical International Inc, USANeeman Medical International, Latin America(till October 26, 2007)Max Neeman Medical International Ltd.Max Ateev Ltd.Max Uk Ltd, UkMax Healthstaff International Ltd.

(c) Shareholder with significant influence New York Life International LLC(d) Key Management Personnel Analjit Singh (Chairman) / Gary Bennett (CEO & Managing Director) / Sunil Sharma (Executive

Director & COO)(e) Enterprises related to Key Management Personnel Liquid Investments & Trading Company, New Delhi House Services Ltd., Medicare Investments

Ltd., Maxopp Investments Ltd., Cheminvest Ltd., Pivet Finances Ltd., Lakeview Enterprises, DelhiGuest Houses Pvt. Ltd., Trophy Holdings Pvt. Ltd., M.V. Healthcare Services Pvt. Ltd., ND CallusInfo Services Pvt. Ltd., Boom Investments Pvt. Ltd., Malsi Holdings Ltd., Dynavest India Pvt.Ltd., Scorpios Beverages Pvt. Ltd., Trophy Resorts & Guest Houses Pvt. Ltd., Trophy Estates Pvt.Ltd., Gaylord Impex Ltd., Pen Investments Ltd., Mohair Investment & Trading Co. Pvt. Ltd., PVTInvestments Ltd., Malsi Estates Ltd., TVP Investments Pvt. Ltd., BAS Investments Pvt. Ltd., VitastaEstate Pvt. Ltd., Terra Planet Estates Pvt. Ltd., Doon Holiday Resorts Pvt. Ltd., Urban SpaceConsultants Pvt. Ltd., Max India Foundation

Other relevant information:i) Fixed assets are purchased from holding Company, fellow subsidiary and Shareholders with significant influence at book value and normal commercial terms

respectively.ii) Payment for services received from the holding Company are at actual cost incurred by them; those received from fellow subsidiary and shareholder with

significant influence are at agreed terms.iii) Payments for management contract, including for deputation of employees is at actual cost incurred by them.iv) Payments for services received from Key Management Personnel represent remuneration as computed under the Income Tax Act, 1961 and do not include

provision for gratuity payable to them as the same is actuarially determined for the Insurer as a whole.

3 MNYL 1.p65 8/19/2009, 12:31 PM228






(w) Summary of Financial Statements forming part of Notes to Accounts (Rs in lakhs) is given below:

Particulars 2008-2009 2007-2008 2006-2007 2005-2006 2004-2005

POLICYHOLDERS’ A/C

1 Gross Premium Income 385,726 271,460 150,028 78,813 41,343

2 Net Premium Income (Net of Re-insurance ceded) 381,903 269,255 148,542 77,972 40,872

3 Income from Investments (Net of losses) (21,832) 22,411 9,308 6,245 2,087

4 Other Income (Miscellaneous Income) 95 36 99 123 15

5 Contribution from the Shareholders’ a/c 37,158 17,913 7,419 6,516 10,267

6 Total Income (2+3+4+5) 397,324 309,615 165,368 90,856 53,241

7 Commission 39,158 38,446 22,852 13,447 6,509

8 Brokerage - - - - -

9 Operating Expenses related to Insurance Business 161,034 86,634 51,429 33,946 24,662

10 Provision for Tax - Fringe Benefit Tax 794 469 311 256 -

11 Total Expenses (7+8+9+10) 200,986 125,549 74,592 47,649 31,171

12 Payments to Policyholders (includes Bonus to Policyholders) 22,082 13,601 8,337 4,254 1,242

13 Increase in Actuarial Liability 175,796 166,034 82,285 38,393 20,827

14 Surplus/Deficit from Operations (1,540) 4,431 154 560 -

SHAREHOLDERS’ A/C

15 Total Income under Shareholders’ Account 3,385 2,168 1,819 776 472

16 Profit/(loss) before Tax (39,302) (15,693) (6,047) (6,006) (9,966)

17 Provision for Tax - - - - -

18 Profit/loss after tax (39,302) (15,693) (6,047) (6,006) (9,966)

19 Profit/loss carried to Balance Sheet (100,275) (60,973) (45,280) (39,233) (33,227)

MISCELLANEOUS

20 Policyholders’ account:

Total Funds 498,539 322,743 156,709 74,424 36,031

Total Investments (Including Linked) 503,853 330,226 157,396 75,180 36,923

Yield on Investments (%) (Controlled Funds) 8.31% 7.92% 7.86% 7.92% 8.40%

Yield on Investments (%) (Unit Linked Funds) (13.56)% 11.27% 9.20% 31.29% 5.23%

Shareholders’ account:

Total Funds 78,592 43,568 28,611 17,087 14,078

Total Investments 52,291 41,673 27,097 13,432 11,379

Yield on Investments (%) 7.47% 6.51% 7.22% 6.45% 5.29%

21 Yield on Total Investments (3.90)% 9.24% 9.03% 10.81% 7.52%

22 Paid up Equity capital 178,243 103,243 73,243 55,743 46,608

23 Weighted Average Number of Shares 1,423,255 802,924 611,693 504,642 385,529

24 Net Worth 78,592 43,568 28,611 16,717 13,556

25 Total Assets 578,825 370,646 186,016 91,696 49,583

26 Earning per share - Basic & Diluted (Face Value : Rs 10 each) in Rs. (2.76) (1.95) (0.99) (1.19) (2.59)

27 Book Value per Share: Rs 10 Paid up 4.41 4.22 3.97 3.07 3.02

3 MNYL 1.p65 8/19/2009, 12:31 PM229





(x) Earnings per equity share :

Particulars Year Ended Year Ended March 31, 2009 March 31, 2008

1 Net Profit/(Loss) as per Profit & Loss Account availablefor equity shareholders for both basic and diluted earningsper equity share of Rs 10 (3,930,156) (1,569,317)

2 Weighted average number of equity shares for earnings per equity sharea) For basic earnings per equity share 1,423,254,518 802,924,403b) For diluted earnings per equity share (as per 2a) 1,423,254,518 802,924,403

Weighted average number of equity shares fordiluted earnings equity share 1,423,254,518 802,924,403

3 Earning per equity sharea) Basic (in Rs.) (2.76) (1.95)b) Diluted (in Rs.) (2.76) (1.95)

(y) Employee Benefits - Disclosures as per revised AS 15(Refer to Note I (g) on Schedule 16)During the previous year the Insurer implemented Accounting Standard 15 (revised 2005) dealing with ‘Employee Benefits’, issuedby the Institute of Chartered Accountants of India Adoption of AS 15 (revised 2005) had resulted in changes in accounting policiesfollowed by Insurer in respect of short term , post employment and other long term benefits.i Defined Contribution Plans - Provident Fund

During the year the Company has recognised the following amounts in the Revenue/ Profit and Loss account :

Provident Fund 2008-2009 2007-2008

Employers Contribution to Provident Fund* 179,171 82,605

* Included in employees remuneration and welfare benefits in schedule 3 of Revenue account and salaries and allowances in Profit and Loss account

ii Defined Benefit Plans - GratuityActuarial valuation was carried out as at the balance sheet date in respect of the defined benefit plans based on the following assumptions.

Change in Defined Benefit Obligation AmountsPresent value obligation as at March 31, 2008 45,106Impact of Transition provision of AS-15 -Interest cost 3,608Past Service cost -Current service cost 23,387Benefits Paid (6,790)Actuarial (gain)/ loss on Obligations 18,271Present value obligation as at March 31, 2009 83,582

Changes in the Fair value of Plan AssetsFair value of Plan Assets as at March 31, 2008 37,721Expected return on Plan Assets 3,018Contributions 29,759Benefits Paid (6,790)Actuarial gain/ (loss) on Obligations (5,502)Fair value of Plan Assets as at March 31, 2009 58,206

Expenses Recognised in Profit & Loss AccountCurrent service cost 23,387Past Service cost -Interest cost 3,608Expected return on Plan Assets (3,018)Net Actuarial (gain)/ loss recognised during the year 23,773

Total Expense recognised in Profit & Loss Account 47,750


3 MNYL 1.p65 8/19/2009, 12:31 PM230






Reconciliation of Present value of Defined Benefit Obligation and Fair value of Assets

Present value obligation as at March 31, 2009 83,582

Fair value of Plan Assets as at March 31, 2009 58,206

Net asset/ (liability) as at March 31, 2009 recognised in Balance Sheet (25,376)

Assumptions

Discount Rate (per annum) 8%

Rate of increase in compensation levels 5%

Rate of return on plan assets 8%

Expected Average remaining working lives of employees (years) 24

iii Other long term benefits

During the year Insurer has recognised the following expenses in the Revenue and Profit and Loss account :

(a) non-vesting compensated leaves : Rs. 614 (2008 - Rs. 500)

(b) deferred compensation for employees : Rs. 728,860 (2008 - Rs. 561,595)

(z) Disclosures For ULIP Business

1 Performance of the Fund (Absolute Growth % )

Fund Name Year of Year Since

inception 2008-2009 2007-2008 2006-2007 Inception

Balanced 2004-05 -5.98% 17.29% 8.73% 63.31%

Conservative 2004-05 3.53% 12.96% 6.87% 48.54%

Growth 2004-05 -15.62% 24.18% 11.24% 94.29%

Secured 2004-05 13.66% 8.30% 5.28% 37.77%

Pension Balanced 2005-06 -4.38% 17.19% 5.99% 21.82%

Pension Conservative 2005-06 4.29% 10.24% 7.15% 24.05%

Pension Growth 2005-06 -16.65% 20.92% 9.88% 15.77%

Pension Secured 2005-06 7.65% 7.20% 5.37% 22.11%

Group Gratuity Balanced 2006-07 -1.44% 15.44% 5.12% 19.60%

Group Gratuity Conservative 2006-07 12.20% 7.60% 2.39% 23.61%

Group Gratuity Growth 2006-07 -13.79% 22.23% 0.52% 5.92%

Guaranteed Fund Dynamic 2006-07 -0.28% 12.28% 2.51% 14.79%

Guaranteed Fund Income 2006-07 1.29% 8.29% 1.26% 11.07%

High Growth 2007-08 -33.06% 0.23% - -32.90%

Growth Super 2007-08 -27.79% 17.02% - -15.50%

Pension Growth Super 2007-08 -30.27% -20.56% - -44.60%

Group Superannuation Balanced 2007-08 14.60% 2.76% - 17.77%

Group Superannuation Conservative 2007-08 0.00% - - -

Group Superannuation Growth 2007-08 0.00% - - -

Dynamic Opportunities 2008-09 -10.56% - - -

2 Investment Management

• Activities outsourced : None

• Fee paid for various activities charged to Policyholders’ Account : Nil

• Basis of payment of fees : Nil

3 MNYL 1.p65 8/19/2009, 12:31 PM231






3 Related party transactions – Fund wise details

• Brokerage, custodial fee or any other payments and receiptsmade to/from related parties (as defined in AS 18 issued by ICAI) : Nil

• Company-wise details of investments held in the Promoter Groupalong with its percentage to funds under management. This informationis required to be given fund-wise and also for total funds under ULIPs. : Nil

4 Provision for doubtful debts on assets of the respective Fund : Nil

5 Unclaimed redemptions of units : Rs Nil (2008: Rs Nil)

6 Net Asset Value (NAV) : Highest, Lowest and Closing at the end of the March 31, 2009

Fund Name Highest NAV Lowest NAV Closing NAV

Balanced 17.953 15.156 16.331Conservative 15.310 13.870 14.854Secured 14.132 12.091 13.777Growth 24.319 17.575 19.429Growth Super 12.742 7.219 8.450High Growth 11.251 5.825 6.710Guaranteed Fund Dynamic 11.738 10.756 11.479Guaranteed Fund Income 11.232 10.724 11.107Pension Balanced 13.060 11.373 12.182Pension Conservative 12.463 11.494 12.405Pension Secured 12.756 11.288 12.211Pension Growth 14.657 10.486 11.577Pension Growth Super 8.553 4.859 5.540Group Gratuity Balanced 12.439 11.062 11.960Group Gratuity Conservative 12.544 11.018 12.361Group Gratuity Growth 12.908 9.848 10.592Group Superannuation Balanced 12.334 10.278 11.777Group Superannuation Conservative 10.000 10.000 10.000Group Superannuation Growth 10.000 10.000 10.000Dynamic Opportunities 10.156 7.969 8.944

Net Asset Value (NAV) : Highest, Lowest and Closing at the end of the March 31, 2008

Fund Name Highest NAV Lowest NAV Closing NAV

Balanced 19.285 14.618 17.369Conservative 14.730 12.643 14.347Secured 12.139 11.189 12.121Growth 28.424 18.075 23.025Growth Super 15.887 9.883 11.702High Growth 10.031 9.994 10.023Guaranteed Fund Dynamic 12.321 10.185 11.510Guaranteed Fund Income 11.361 10.070 10.966Pension Balanced 13.925 10.718 12.740Pension Conservative 12.245 10.731 11.895Pension Secured 11.397 10.583 11.342Pension Growth 17.192 11.215 13.890Pension Growth Super 10.524 7.524 7.944Group Gratuity Balanced 13.250 10.379 12.135Group Gratuity Conservative 11.017 10.238 11.017Group Gratuity Growth 14.634 9.830 12.287Group Superannuation Balanced 10.280 9.995 10.276Group Superannuation Conservative 10.000 10.000 10.000Group Superannuation Growth 10.000 10.000 10.000

3 MNYL 1.p65 8/19/2009, 12:31 PM232






7 Expenses Charges to Fund %

Annualized expense ratio to average daily assets of the Fund

Fund Name Ratios as at Ratios as at

March 31, 2009 March 31, 2008

Balanced 1.22% 1.10%

Conservative 1.00% 0.90%

Secured 1.00% 0.90%

Growth 1.38% 1.25%

Growth Super 1.50% 1.35%

High Growth 1.50% 1.35%

Guaranteed Fund Dynamic 1.88% 1.70%

Guaranteed Fund Income 1.66% 1.50%

Pension Balanced 1.22% 1.10%

Pension Conservative 1.00% 0.90%

Pension Secured 1.00% 0.90%

Pension Growth 1.38% 1.25%

Pension Growth Super 1.50% 1.35%

Group Gratuity Balanced 0.94% 0.85%

Group Gratuity Conservative 0.83% 0.75%

Group Gratuity Growth 1.06% 0.95%

Group Superannuation Balanced 0.94% 0.85%

Group Superannuation Conservative - -

Group Superannuation Growth - -

Dynamic Opportunities 1.79% -

8 Ratio of gross income (including unrealized gains) to average daily net assets

Fund Name Ratios as at Ratios as at

March 31, 2009 March 31, 2008

Balanced -3.71% 13.52%

Conservative 5.13% 12.29%

Secured 14.65% 8.55%

Growth -14.95% 13.46%

Growth Super -26.69% -8.82%

High Growth -43.68% 0.75%

Guaranteed Fund Dynamic 1.46% 10.65%

Guaranteed Fund Income 3.00% 8.53%

Pension Balanced -0.90% 8.68%

Pension Conservative 10.79% -0.40%

Pension Secured 5.86% 6.36%

Pension Growth -15.66% 11.76%

Pension Growth Super -30.23% -31.72%

Group Gratuity Balanced -2.28% 9.70%

Group Gratuity Conservative 15.14% 7.55%

Group Gratuity Growth -17.10% 11.02%

Group Superannuation Balanced 11.85% -

Group Superannuation Conservative - -

Dynamic Opportunities -4.71% -

3 MNYL 1.p65 8/19/2009, 12:31 PM233




9 Fund-wise disclosure of appreciation and/or (depreciation) in value of investments segregated class-wise

Fund Name Bonds Equity Government Money Total

Securities Market

Balanced 15,640 (80,536) (4,877) 4,350 (65,422)

Conservative 2,799 (2,272) 680 61 1,268

Secured 3,626 - (868) 275 3,033

Growth 155,523 (1,396,640) (56,529) 2,237 (1,295,409)

Growth Super 25,497 14,047 (1,251) 1,898 40,191

High Growth 396 (11,414) 19 135 (10,864)

Guaranteed Fund Dynamic 83 (323) 69 (8) (179)

Guaranteed Fund Income 2 (28) 24 2 1

Pension Balanced 1,169 (2,564) 142 664 (590)

Pension Conservative 204 3 257 162 626

Pension Secured 468 - (1,709) 186 (1,055)

Pension Growth 5,590 (74,923) 2,313 3,725 (63,295)

Pension Growth Super 2,822 (47,005) 64 1,218 (42,901)

Group Gratuity Balanced 482 (1,506) (317) 128 (1,213)

Group Gratuity Conservative 1,257 - (267) 187 1,176

Group Gratuity Growth 208 (5,234) (5) 86 (4,945)

Group Superannuation Balanced - - 3 (0) 3

Group Superannuation Conservative - - - - -

Group Superannuation Growth - - - - -

Dynamic Opportunities 2,436 (4,461) (134) 654 (1,505)



3 MNYL 1.p65 8/19/2009, 12:31 PM234




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N R

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)

3 MNYL 2.p65 8/19/2009, 12:31 PM235




S.

Sec

tor

Sec

urity

Det

ails

Pen

sion L

ife

Bala

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und

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O 9

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--

0%

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92.4

910%

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ER F

INA

NC

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--

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% P

FC M

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012

--

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A D

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24N

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2011

--

--

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ER F

INA

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P LT

D 9

.8%

20SE

P2012

--

--

8.9

4%

PFC

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--

--

9.4

% P

FC 2

5-M

AR

-2013

--

--

3IN

DIA

TR

EASU

RY B

ILLS

364 D

AYS(

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EP-0

9)

1,1

53.2

012,4

93.0

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7-

IND

IA, G

OV

ERN

MEN

T O

F 11.5

% 1

5M

AY2009

44.3

1-

-125.8

7

IND

IA, G

OV

ERN

MEN

T O

F 6.6

5%

5A

PR2009

7,3

36.4

31,5

00.2

9100.0

25,2

84.5

3

IND

IA, G

OV

ERN

MEN

T O

F 7.2

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P2013

1,0

24.9

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28.6

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IND

IA, G

OV

ERN

MEN

T O

F 7.5

% 1

2M

AY2010

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-154.2

8

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IA, G

OV

ERN

MEN

T O

F 8.3

3%

7JU

N2036

848.3

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8,6

95.2

9

IND

IA, G

OV

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F 7.4

9%

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IND

IA, G

OV

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F 7.9

9%

9JU

L2017

1,0

49.5

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419.8

06,4

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5

5.4

8%

GO

I 2009 (

MD

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82,0

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0

7.4

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20.0

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7.9

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GO

I 28A

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14.0

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56.0

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14.0

0

7.9

5%

IN

DIA

GO

VER

NM

ENT

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0

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GO

I 22A

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-9,7

74.0

0-

-

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ent

IND

IA, G

OV

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F 11.5

% 1

1JU

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-22,7

32.0

520%

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015%

62.2

117,1

91.8

759%

15.0

228,3

30.9

356%

IND

IA, G

OV

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MEN

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F 11.8

3%

12 N

OV

2014

--

10,1

58.8

473.0

0

6.0

5%

GO

I 02-F

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29.6

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98.6

0

IND

IA, G

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MEN

T O

F 7.3

8%

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--

-1,0

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0

7.5

6%

GO

I 03N

OV

2014

--

-934.2

0

IND

IA, G

OV

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F 9.4

% 1

1SE

P2012

--

--

7.5

9%

GO

I 12A

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--

--

8.3

5%

GO

I 14M

AY2022

--

--

IND

IA T

REA

SUR

Y B

ILLS

364 D

AYS

20N

OV

09

--

--

IND

IA, G

OV

ERN

MEN

T O

F 7.4

% 3

MA

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--

--

IND

IA, G

OV

T O

F 8.2

% 1

5FE

B2022 S

PB-

--

-

6.8

3%

GO

I 19JA

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--

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IN

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GO

VER

NM

ENT

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027

--

--

IND

IA, G

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T O

F 7.3

7%

16A

PR2014

--

--

6.7

2%

GO

I 24-F

EB-1

4-

--

-

4H

DFC

LTD

9.1

% 1

9M

AY2009

997.6

32,9

92.9

0-

-

LIC

HO

USI

NG

FIN

AN

CE

LTD

9.1

5%

22O

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--

HD

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.55%

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1,0

02.5

51,0

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-

HO

USI

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DEV

FIN

CO

RP

9.7

% 1

9JU

L2017

1,0

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49.0

5-

-

HO

USI

NG

DEV

FIN

AN

CE

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% 1

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P2017

1,0

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5%

HD

FC N

CD

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6JU

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HO

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NC

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% 2

9A

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09

--

--

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5%

HD

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1,0

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5

11.9

5%

HD

FC L

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6-N

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--

--

3 MNYL 2.p65 8/19/2009, 12:31 PM236




S.

Sec

tor

Sec

urity

Det

ails

Pen

sion L

ife

Bala

nce

d F

und

Pen

sion L

ife

Gro

wth

Fund

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sion L

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rvati

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d F

und

No.

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age

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l%

age

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l%

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age

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in Indust

ryin

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Sched

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s A

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--

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29M

AY12

--

--

HO

USI

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DEV

FIN

AN

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13D

EC2009

--

--

HO

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FIN

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E IN

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STR

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(Refineries)

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(les

s th

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100%

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10

678,6

10

100%

29,0

56

29,0

56

100%

51,0

29

51,0

29

100%

3 MNYL 2.p65 8/19/2009, 12:31 PM237




S.

Sec

tor

Sec

urity

Det

ails

Gro

up G

ratu

ity

Bala

nce

d F

und

Gro

up G

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l%

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l%

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l%

age

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stm

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stm

ent

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stm

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in Indust

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ryin

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ryin

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1A

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BA

NK

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HO

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NC

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L B

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--

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BA

NK

OF

BA

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DA

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385.7

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81.0

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20.6

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NA

L B

AN

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9JU

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ST B

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ST B

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--

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DO

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28A

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1,1

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--

STA

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F TR

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24N

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--

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310%

--

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serv

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--

PUN

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NA

L B

AN

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D 5

NO

V2009

--

--

KA

RN

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KA

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29M

AY2009

--

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BA

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--

--

FED

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1D

EC2009

--

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KO

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RPO

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TIO

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P18

1,1

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2-

4,4

49.2

8-

IND

IAN

RA

ILW

AY F

IN C

OR

P 8.6

9%

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--

1,0

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2%

POW

ER F

INA

NC

E C

OR

P(28-D

EC-2

012)

1,0

23.5

8-

--

INFR

A D

EV F

INA

NC

E C

O L

TD 1

0%

22M

AY2012

-4,3

02.3

212%

-5,6

47.8

814%

4,1

84.4

010,6

86.7

318%

--

0%

IND

IAN

RA

ILW

AY F

IN C

OR

P 9.4

3%

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AY2018

--

--

Sched

ule

s A

nnex

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d fo

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inan

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year

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3 MNYL 2.p65 8/19/2009, 12:31 PM238




IND

IAN

RA

ILW

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INA

NC

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IND

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5M

AY2009

2,3

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IND

IA, G

OV

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MEN

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F 6.6

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55.4

49,2

64.3

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0

IND

IA, G

OV

ERN

MEN

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F 7.2

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P2013

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IA, G

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9JU

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46.5

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5

5.4

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GO

I 2009 (

MD

12/0

6/2

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00.5

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7.4

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GO

I 28A

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--

--

7.9

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GO

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GO

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IA, G

OV

ERN

MEN

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F 11.5

% 1

1JU

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13.9

410,7

64.6

230%

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13.5

924%

17.1

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77.7

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IND

IA, G

OV

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MEN

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F 11.8

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3

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GO

I 02-F

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IND

IA, G

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7.5

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GO

I 03N

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2014

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04,6

71.0

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30.7

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IND

IA, G

OV

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MEN

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F 9.4

% 1

1SE

P2012

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--

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GO

I 12A

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--

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GO

I 14M

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--

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IND

IA T

REA

SUR

Y B

ILLS

364 D

AYS

20N

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09

--

--

IND

IA, G

OV

ERN

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F 7.4

% 3

MA

Y2012

--

--

IND

IA, G

OV

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F 8.2

% 1

5FE

B2022 S

PB-

--

-

6.8

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GO

I 19JA

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--

--

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IN

DIA

GO

VER

NM

ENT

15/0

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--

--

IND

IA, G

OV

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MEN

T O

F 7.3

7%

16A

PR2014

--

--

6.7

2%

GO

I 24-F

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--

-

4H

DFC

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% 1

9M

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FIN

AN

CE

LTD

9.1

5%

22O

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010

--

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17.5

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HD

FC L

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.55%

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EC2009

--

--

HO

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NG

DEV

FIN

CO

RP

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% 1

9JU

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--

--

HO

USI

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DEV

FIN

AN

CE

CO

RP

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% 1

3SE

P2017

--

--

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HD

FC N

CD

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14,4

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HO

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DEV

FIN

AN

CE

CO

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6JU

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--

--

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DEV

ELO

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NC

E 8.5

% 2

9A

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09

--

--

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HD

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--

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HD

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--

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S.

Sec

tor

Sec

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Det

ails

Gro

up G

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ity

Bala

nce

d F

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Gro

up G

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ratu

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No.

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age

Inve

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Inve

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age

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age

Inve

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stm

ent

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in Indust

ryin

Indust

ryin

Indust

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ry

Sched

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s A

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)

3 MNYL 2.p65 8/19/2009, 12:31 PM239




S.

Sec

tor

Sec

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Det

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Gro

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--

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LIC

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5Petroleum

REL

IAN

CE

IND

UST

RIE

S LT

D777.6

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92.6

08%

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02,0

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products

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PETR

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76

100%

3 MNYL 2.p65 8/19/2009, 12:31 PM240




S.

Sec

tor

Sec

urity

Det

ails

Bala

nce

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und

Gro

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rvati

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in Indust

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Indust

ryin

Indust

ryin

Indust

ry

1A

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BA

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36.7

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BA

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249,3

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90.6

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1

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L B

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9JU

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ST B

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30,6

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9,9

28.8

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24N

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BA

NK

OF

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90.6

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321,6

24.3

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217%

87,9

12.7

53,8

67,1

39.3

220%

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55.6

27%

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serv

ices

STA

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P2021

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16.5

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17,0

69.8

23,8

14.4

91,9

07.2

43,8

14.4

8

KA

RN

ATA

KA

BA

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29M

AY2009

14,8

01.5

771,0

47.5

3-

9,8

67.7

1

OR

IEN

TAL

BA

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OF

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ERC

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9,6

44.6

538,5

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45.0

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1D

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STA

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--

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PO

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IND

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3 MNYL 2.p65 8/19/2009, 12:31 PM241




POW

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3 MNYL 2.p65 8/19/2009, 12:31 PM242




9.5

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3 MNYL 2.p65 8/19/2009, 12:31 PM243




S.

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INA

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P(28-D

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--

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0

IND

IAN

RA

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OR

P 9.4

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AY2018

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3 MNYL 2.p65 8/19/2009, 12:31 PM244




IND

IAN

RA

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AY F

INA

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--

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A D

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--

--

POW

ER F

INA

NC

E C

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P LT

D 9

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20SE

P2012

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--

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59.1

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F 11.5

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IND

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OV

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MEN

T O

F 6.6

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5A

PR2009

817.3

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IND

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-

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IA, G

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MD

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I 28A

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IA, G

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GO

I 24-F

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--

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DEV

FIN

CO

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% 1

9JU

L2017

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--

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3 MNYL 2.p65 8/19/2009, 12:31 PM245




POW

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3 MNYL 2.p65 8/19/2009, 12:31 PM246




S.

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s A

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3 MNYL 2.p65 8/19/2009, 12:31 PM247




IND

IAN

RA

ILW

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INA

NC

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3 MNYL 2.p65 8/19/2009, 12:31 PM248




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3 MNYL 2.p65 8/19/2009, 12:31 PM249






(aa) Additional information in respect of Provisions in Schedule 14 pursuant to Accounting Standard-29 issued by ICAI

Nature of Obligation As at Additions made Paid/written As at

March 31, 2008 during the year back/ used March 31, 2009

during the year

Provision for Gratuity 7,385 47,750 29,759 25,376

Provision for Fringe Benefit Tax 1,285 80,161 81,389 57

Provision for non compensated leaves 500 614 - 1,114

Provision for Wealth tax 372 523 484 411

Total 9,542 129,048 111,632 26,958

(ab) Additional information related to expenses incurred under following activities included under respective heads in Schedule-3:

Heads Year Ended Year Ended

March 31, 2009 March 31, 2008

Outsourcing Expenses 844,290 298,140

Business Development 3,450 3,467

Marketing Support 2,096 266

(ac) Additional information on Remuneration

Information under section 217(2A) of the Companies Act, 1956 read with Companies (employees) rules, 1975, as amended, are

annexed in the Director’s Report.

(ad) Comparatives

Previous year figures, under following heads, have been re-classified wherever necessary and significant, to conform to current

year’s presentation.

Previous year Schedule number/ Line Item Amount Reclassed Current year Schedule number/ Line Item

Schedule-6 Reserves and Surplus

- Employee Share Based Payment Plan Outstanding 74,750 Balance Sheet

- Employee Stock Option Plan Outstanding

Profit and Loss account - Miscellaneous Income 152,138 Schedule 3 -Interest and Bank Charges and

Schedule-UL1 -Linked Income (recovered from

linked funds) -Fund Management charge

Schedule 3- Investment related expenses 152,138 Schedule 3 -Interest and Bank Charges

Schedule 14- Provision for doubtful debts 15,708 Schedule 12 -Advances and Other Assets

Signatures to Schedules 1 to 16 For and on behalf of the Board of Directors

ANALJIT SINGH ChairmanJOHN HARRISON DirectorRICHARD MUCCI Director

RAJESH SUD Managing Director & Chief Executive OfficerRAJIT MEHTA Chief Operating and Principal OfficerJOHN POOLE Chief Actuary (Appointed Actuary)SUNIL KAKAR Chief Financial Officer

Gurgaon AJAY SETH Sr. Director -Legal & Compliance &MAY 27, 2009 Company Secretary

3 MNYL 2.p65 8/19/2009, 12:31 PM250




Management Report


With respect to the operations of the Company for the financial year April 1, 2008 to March 31, 2009 and results thereof, the Managementof the Company confirms, certifies and declares:

1. The Company is doing business on the basis of certificate of registration granted and duly renewed by IRDA.

2. The Company has duly paid all dues payable to the statutory authorities.

3. There has been no change in the Indian and Foreign shareholding pattern of the Company and the same are in conformity with thestatutory or regulatory requirements for the same.

4. The Company has not directly or indirectly invested outside India the funds of the holders of policies issued in India.

5. The Company is maintaining the required solvency margins as undertaken to the Insurance Regulatory and Development Authority.

6. The Company certifies that the values of all the assets have been reviewed on the date of the Balance Sheet and that the assets setforth in the Balance Sheet are shown in the aggregate at amounts not exceeding their realisable or market value under the severalheadings - “Loans”, “Investments (wherever applicable)”, “Agents’ balances”, “Outstanding Premiums”, “Interest, Dividends andRents outstanding”, “Interest, Dividends and Rents accruing but not due”, “Amounts due from other persons or Bodies carrying oninsurance business”, “Sundry Debtors”, “Bills Receivable”, “Cash” and the several items specified under “Other Accounts”.

7. No part of the life insurance fund has been directly or indirectly applied in contravention of the provisions of the Insurance Act,1938 (4 of 1938) relating to the application and investment of the life insurance funds.

8. The Company recognises the risks associated with the life insurance business and manages it by adopting prudent policiescommensurate with the needs of the life insurance business. The key risks affecting the operations of the Company are underwritingrisks and investment risks.

The underwriting risk is managed by the robust underwriting function and by further establishing reinsurance treaties with variousreinsurance companies. All risks, which are above the pre-determined retention limits are automatically reinsured.

The investment risk is managed by creating a portfolio of different asset classes and of varied maturities so as to spread the riskacross a wide category of investee companies. The Company has constituted an Investment Committee, which acts as the policymaking body for the investment operations. The Investment Committee lays down various internal policies and norms governingthe functioning of the Investment Department. The Investment Committee periodically discusses the investment strategy, portfoliostructures, performance of the portfolio and related issues. The investment policy is reviewed regularly in order to align the samewith the Company’s business plans.

9. The Company does not have operations in any other country other than India.

10. Average claim settlement time for last five years along with ageing of outstanding claims as at balance sheet date is disclosedbelow.

2008-09 2007-08 2006-07 2005-06 2004-05

Average Claim Settlement time (in days) 5 9 14 16 11

Details regarding Claims registered and not settled (Rs. in lakhs)

Linked Business Traditional Business Total

Period No. of claims Amounts No. of claims Amount No. of claims Amount

30 Days 51 103 52 110 103 213

30 Days to 6 months - - - - - -

6 months to 1 year - - - - - -

1 year to 5 years - - - - - -

5 years & above - - - - - -

Grand Total 51 103 52 110 103 213

11. The value of investments as shown in Balance Sheet have been arrived as follows :

(i) Valuation - shareholders’ investments and non-linked policyholders’ investments have been ascertained on the basis ofquotes received from market participants. Debt securities, which include government securities, are considered as held tomaturity’ and measured at historical cost subject to amortisation.

Listed equity shares, as at balance sheet date, are valued at fair value, being the last quoted closing price on the NationalStock Exchange (NSE) and in case the same is not available, then on the Stock Exchange, Mumbai (BSE). Equity shares,awaiting listing, are valued at historical cost subject to provision for diminution. Investments in Mutual fund units are valuedat fair value as at balance sheet date.

3 MNYL 2.p65 8/19/2009, 12:31 PM251





(ii) Valuation - linked investments

In case of Linked business - Government securities are valued at the rate obtained from CRISIL (Credit Rating InformationServices of India Ltd.). 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.

12. The Company has invested its controlled funds only in rated securities, primarily in Central Government, Treasury Bills and securitiesand highly rated bonds/mutual funds. All Investments in Debt securities are made with the clear intent of being held to maturity.Accordingly, the Management is confident of the quality of the investments.

13. The financial statements of Max New York Life Insurance Company Limited and all information in this annual report are theresponsibility of the Management and have been reviewed by the Audit Committee and approved by the Board of Directors.

(a) The financial statements have been prepared in accordance with generally accepted accounting standards and principles andpolicies have been followed with no material departures.

(b) The financial statements have been prepared in accordance with the accounting policies adopted by the Management andstated therein and the same have been followed consistently. These financial statements contain some items which reflectthe best estimates and judgment of the Management.

When alternative accounting methods exist, Management has chosen those it deems most appropriate in the circumstancesto ensure the financial statements are presented fairly, in all material respects. The choice of estimates and judgment havebeen made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the endof the financial year and the operating loss of the Company for the year.

(c) The Management of the Company has taken proper and sufficient care for the maintenance of adequate accounting recordsin accordance with the applicable provisions of the Insurance Act 1938 (4 of 1938) and Companies Act 1956 (1 of 1956), forsafeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) The financial statements have been prepared on a going concern basis.

(e) The Company has set up an internal audit system commensurate with the size and nature of the business and the same isoperating effectively.

14. Schedule of payments, which have been made to the individuals, firms, companies and organisations in which Directors areinterested.

S.No. Name of the Director Entity in which Interested as Amount of Amount of

Director is interested payment during payment during

the year 2008-09 the year 2007-08

(Rs. in lakh) (Rs. in lakh)

1 Analjit Singh Max Healthcare Institute Limited Chairman 0.22 5.18

Max India Foundation Relative of interested Party 249.88 -

New Delhi House Services Ltd Relative of interested Party 46.38 32.24

Max India Limited Chairman & Managing Director 11.80 17.09

Pharmax Corporation Limited Relative of interested Party 212.10 116.48

2 John Harrison New york Life International , LLC Director 199.62 76.68

3 Richard L. Mucci New york Life International , LLC Director 199.62 76.68


Management Report


ANALJIT SINGH ChairmanJOHN HARRISON DirectorRICHARD MUCCI Director

RAJESH SUD Managing Director & Chief Executive OfficerRAJIT MEHTA Chief Operating and Principal OfficerJOHN POOLE Chief Actuary (Appointed Actuary)

Gurgaon SUNIL KAKAR Chief Financial OfficerMAY 27, 2009 AJAY SETH Sr. Director -Legal & Compliance & Company Secretary

3 MNYL 2.p65 8/19/2009, 12:31 PM252




Balance Sheet Abstract and company’s business profile


Registration No. 1 0 6 7 2 3 State Code 5 5


Date Month Year



N I L N I L

Bonus Issue Others

N I L 7 5 0 0 0 0 0


6 7 9 3 5 4 2 8 6 7 9 3 5 4 2 8

Sources of Funds Application of FundsPaid-up Capital Net Fixed Assets

1 7 8 2 4 3 2 6 3 2 4 8 7 3 3

Reserves & Surplus Investments

7 9 9 4 1 5 5 6 1 4 3 5 1

Secured Loans Net Current Assets

N I L – 9 8 0 6 1 8

Unsecured Loans Misc. Expenditure

N I L 2 5 4 1 7

Policyholders Funds Accumulated Losses

4 9 8 5 3 8 5 1 1 0 0 2 7 5 4 5

Others*

1 7 7 3 1 0

IV PERFORMANCE OF COMPANY (Amount in Rs. Thousand) Total Income Total Expenditure

3 6 3 5 5 1 4 6 4 0 5 0 7 1 1 6

Profit/(Loss) before tax Profit/(Loss) after tax

- 4 1 9 4 2 1 9 - 4 1 9 4 2 1 9

V GENERIC NAME OF THE PRINCIPAL PRODUCT OF THE COMPANY

Product Description L I F E I N S U R A N C E P R O D U C T S

Notes

Since Schedule VI of the Companies Act, 1956 does not apply to a Life Insurance company and in view of the requirement under

Insurance Act, 1938 to split the accounts between policyholders and shareholders funds, it is not possible to give the information

required in Part 3 and 4 of the schedule

*Other Sources of Fund includes Funds for Future Appropriation and Fair Value Change Account.

3 MNYL 2.p65 8/19/2009, 12:31 PM253




3 MNYL 2.p65 8/19/2009, 12:31 PM254



Your Directors are pleased to present the Eighth Annual Report,

along with Audited Accounts for the year ended March 31, 2009.

PERFORMANCE 2008-09

The financial highlights for 2008-09 are furnished below:

• Income from healthcare services increased by 21% from

Rs.221 crore in 2007-08 to Rs.267 crore in 2008-09

• Operating profits or profit before depreciation, interest and

tax (PBDIT) increased by 56% from Rs.44 crore in 2007-08 to

Rs.69 crore in 2008-09

• Profit before tax (PBT) increased over nine times to Rs.32

crore in 2008-09, over 2007-08

• Profit after tax (PAT) was Rs.48 crore in 2008-09, against a

net loss of Rs.4 crore in 2007-08

The highlights of Max Healthcare (MHC) operations, along with its

network of hospitals, in 2008-09 are given below:

• MHC has 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 increased to 712

in 2008-09 from 662 in 2007-08. Average occupancy rate

at MHC hospitals was 65%

• Number of patient episodes (measured by number of invoices

issued to a patient during any period) increased to over 1.9

million in 2008-09 from 1.6 million in 2007-08. In the last

quarter of 2008-09, MHC averaged around 165,000 patient

episodes per month.

MHC, along with its network of hospitals, 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

expansions are:

• The new wing of the Max Balaji Hospital with 260 beds (at

Patparganj, East Delhi) is expected to start operations by

October 2009

• The comprehensive oncology care is to start at Saket by

September 2009.

Directors’ Report

• Additional 90 beds at Saket will become operational by April

2010.

• The 100 bed Max Hospital at Dehradun will become

operational by first quarter of 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 beds

each, super specialty hospitals at Bathinda and Mohali.

EXCELLENCE IN PATIENT CARE

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

Centered Care'. This has been executed primarily by a rigorous

implementation of the 'Medical & Service Excellence Model'.

The organization 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.

It has also adopted DMAIC and Lean methodology. A systematic

data driven approach is used to reduce variation in process

outcomes, eliminate non value added activities, and to optimize

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.

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 Anesthesia,

Interventional Cardiology, Internal Medicine, Radiology and

Pathology

• Post Graduate Diploma in Clinical Cardiology (IGNOU)

4 Healthcare.p65 8/19/2009, 12:31 PM257



• 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 Support Training,

Basic Cardiac Life Support Training, Pediatric Life Support,

First aid and Airway Management.

• BSc in Emergency Trauma Care and Technology, under a MoU

with Hamdard University, New Delhi.

• Residency Exchange Program with Mount Sinai Medical

School, USA

• Several short courses /Fellowships to provide exposure to

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 education programs in 2008-09.

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.

DIVIDEND

Healthcare is a long gestation business. In view of the Company's

carried forward losses, your Directors are unable to recommend

any dividend for the year under review

DIRECTORS


the Company’s Articles of Association, Mr. Anuroop Singh, Mr.

Analjit Singh and Dr. R.P. Soonawala are due to retire by rotation

and are eligible for re-appointment.

Dr. Ajit Singh and Dr. Pervez Ahmed were appointed as Additional

Directors effective January 28 and February 1, 2009, respectively

to hold office up to the ensuing Annual General Meeting. The

Company has received notices under Section 257 of the Companies

Act, 1956, from members proposing their candidature for being

appointed as Directors of the Company.

Dr. Pervez Ahmed was appointed as the Managing Director of the

Company effective February 1, 2009. Mr. Analjit Singh was re-

designated as the Chairman of the Company effective January 28,

2009.

Dr. Ashok Seth and Mr. Aman Mehta resigned from the Board of

Directors of the Company effective July 31, 2008 and December

12, 2008, respectively. The Board places on record, its appreciation

for the valuable contribution made by Dr. Ashok Seth and Mr. Aman

Mehta during their association with the Company.

AUDIT COMMITTEE

During the year under review, the Audit Committee of your Company

was reconstituted and the Committee currently comprises of Mr.

K.K. Mathur (Chairman), Mr. Leo Puri and Dr. Pervez Ahmed. The

role and terms of reference of the Audit Committee covers the

areas mentioned under Section 292A of the Companies Act, 1956

besides other terms, as may be referred to it by the Board of Directors

of the Company.

REMUNERATION COMMITTEE

During the year under review, the Remuneration Committee was

reconstituted and the Committee currently comprises of Mr. Analjit

Singh (Chairman), Mr.K.K. Mathur, Mr. Leo Puri and Dr. R.P.

Soonawala. This Committee has the mandate for finalizing the terms

of compensation for the Executive Directors and Senior Executives

of the Company and to administer the Employee Stock Option Plan–

2006 of the Company.

EMPLOYEE STOCK PLAN - 2006

In order to attract and retain talented key employees and induce

them to remain with the Company, and encourage them to

increase their efforts to make the Company’s business more

successful, your Company implemented Employee stock option

plan in 2006. During the year under review, the Company granted

5,35,000 Stock Options to an Employee of the Company. As of

March 31, 2009, 9,05,000 stock options are outstanding under

the Employees Stock Plan.

ALLOTMENT OF SHARES ON EXERCISE OF EMPLOYEE STOCK

OPTIONS

During the year under review, your Company allotted 50,000 Equity

shares arising from exercise of Stock Options by an eligible

employee. With this, the paid-up capital of the Company stood

increased to Rs. 487.14 Crores as of March 31, 2009.

Directors’ Report

4 Healthcare.p65 8/19/2009, 12:31 PM258



DIRECTOR’S RESPONSIBILITY STATEMENT

In terms of provisions of Section 217(2AA) of the Companies Act,

1956, your Directors confirms that:



explanation relating to material departures.

(ii) The Directors had 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 had taken proper and sufficient care for the


with the provisions of the Companies Act, 1956 for


and detecting fraud and other irregularities.

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

concern basis.


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



furnished hereunder:

a. CONSERVATION OF ENERGY:

The Company has taken measures to reduce the energy

consumption, by using energy efficient equipment,

incorporating latest technology and regular

maintenance.

b. RESEARCH AND DEVELOPMENT (R&D) : Nil

c. TECHNOLOGY ABSORPTION:

- Specific areas in which R & D was carried

out by the Company : Nil

- Benefit derived as a result of above : NA

- Future plan of action : NA

- Expenditure on R & D : NA

d. FOREIGN EXCHANGE EARNINGS AND OUTGO

Activities relating to exports, initiatives taken to

increase exports, develop new export markets,

export plan, etc. : NA

(Rs. in crore)

For the For the

year ended year ended

March 31, 2009 March 31, 2008

i) Foreign Exchange Earnings 0.62 0.66

ii) Foreign Exchange Outgo

CIF Value of Imports

- Capital Goods 0.64 2.99

- Trading Goods - -

Others 1.00 1.64 0.67 3.66

HUMAN CAPITAL

The Company continues to attract eminent physicians from the

NCR of Delhi as well as from abroad. As on 31 March 2009, MHC

had a base of around 1,200 physicians, including several doctors of

international repute, 1,600 nurses, 350 paramedic staff and 1,120

other support staff.

The particulars of employees as required under Section 217 (2A) of

the Companies Act, 1956 are given in a separate annexure to this

report. This Annexure is not being sent along with this Report to

the members of the Company in line with the provisions of Section

219 (b) (iv) of the Companies Act. Members who are interested in

obtaining these particulars may write to the Company Secretary at

the Registered Office of the Company. None of the employees listed

in the said Annexure is a relative of any Director of the Company.

None of the employees hold (by himself or along with his spouse

and dependent children) more than 2% of the equity shares of the

Company.

SUBSIDIARY COMPANIES


relating to subsidiaries of the Company as of March 31, 2009 are

annexed to this Report as Annexure–A.


Your Company has not accepted any deposits from the public during


Directors’ Report

4 Healthcare.p65 8/19/2009, 12:31 PM259



AUDITORS

M/s Price Waterhouse, Chartered Accountants, the Statutory

Auditors of the Company, retires at the conclusion of the ensuing

Annual General Meeting and is eligible for re-appointment. The

Company has received from them a certificate to the effect, that

their re-appointment, if made, will be in conformity with the limits

specified under Section 224 (1B) of the Companies Act, 1956.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation to all the

employees of the Company, valued customers, bankers, financial

institutions and shareholders for their support and confidence in

the Company. Your Directors also place on record their sincere

gratitude to Singapore General Hospital for their cooperation and

guidance.

On Behalf of the Board of Directors


JULY 29, 2009 Chairman

Directors’ Report

4 Healthcare.p65 8/19/2009, 12:31 PM260



Annexure

- ‘A

’ST

ATE

MEN

T R

EGA

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ING

SU

BSI

DA

RY C

OM

PAN

IES

PUR

SUA

NT

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956

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the

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/per

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Curr

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Finan

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Yea

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(Rs.

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(Rs.

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Max

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and

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AN

ALJ

IT S

ING

H

JULY

29, 2009

Chai

rman

4 Healthcare.p65 8/19/2009, 12:31 PM261



TO THE MEMBERS OF MAX HEALTHCARE INSTITUTE LIMITED

1. We have audited the attached Balance Sheet of Max

Healthcare Institute Limited, as at March 31, 2009, and the

related Profit and Loss Account and Cash Flow Statement for

the year ended on that date annexed thereto, which we have


statements are the responsibility of the company’s


these financial statements based on our audit.

2. We conducted our audit in accordance with the 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 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



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

terms of sub-section (4A) of Section 227 of ‘The Companies

Act, 1956’ of India (the ‘Act’) and on the basis of such checks

of the books and records of the company as we considered

appropriate and according to the information and

explanations given to us, we further report that:

i. (a) The company is maintaining proper records

showing full particulars including quantitative

details and situation of fixed assets.

(b) The fixed assets are physically verified by the

management according to a phased programme

designed to cover all the items over a period of

three years, which in our opinion, is reasonable

having regard to the size of the company and the

nature of its assets. Pursuant to the programme,

a portion of the fixed assets has been physically

verified by the management during the year and

no material discrepancies between the book

records and the physical count have been noticed.

(c) In our opinion and according to the information

and explanations given to us, a substantial part

of fixed assets have not been disposed of by the

company during the year.

ii. (a) The inventory has been physically verified by the

management during the year. In our opinion, the

frequency of verification is reasonable.

(b) In our opinion, the procedures of physical

verification of inventory followed by the

management are reasonable and adequate in

relation to the size of the company and the nature

of its business.

(c) On the basis of our examination of the inventory

records, in our opinion, the company is

maintaining proper records of inventory. The

discrepancies noticed on physical verification of

inventory as compared to book records were not

material.

iii. (a) The company has not granted any loans, secured

or unsecured, to companies, firms or other parties

covered in the register maintained under Section

301 of the Act.

(b) The company has not taken any loans, secured or

unsecured, from companies, firms or other parties


301 of the Act.

iv. In our opinion and according to the information and

explanations given to us, having regard to the

explanation that certain items purchased are of special

nature for which suitable alternative sources do not exist

for obtaining comparative quotations, there is an

adequate internal control system commensurate with

the size of the company and the nature of its business

for the purchase of fixed assets and for the sale of goods

and services. Further, on the basis of our examination

of the books and records of the company, and according

to the information and explanations given to us, we

have neither come across nor have been informed of

any continuing failure to correct major weaknesses in

the aforesaid internal control system.

v. In our opinion and according to the information and

explanations given to us, the Company has not entered

into any contracts or arrangements referred to in Section

301 of the Act.

Auditors’ Report

4 Healthcare.p65 8/19/2009, 12:31 PM262



vi. The company has not accepted any deposits from the

public within the meaning of Sections 58A and 58AA

of the Act and the rules framed there under.

vii. In our opinion, the company has an internal audit system

commensurate with its size and nature of its business.

viii. The Central Government of India has not prescribed the

maintenance of cost records under clause (d) of sub-

section (1) of Section 209 of the Act for any of the

products of the company.

ix. (a) According to the information and explanations

given to us and the records of the company

examined by us, in our opinion, the company is

generally regular in depositing the undisputed

statutory dues including provident fund, investor

education and protection fund, income-tax, sales-

tax, wealth tax, service tax, customs duty, excise

duty, cess and other material statutory dues as

applicable with the appropriate authorities.

(b) According to the information and explanations


examined by us, there are no dues of income-tax,

sales tax, wealth tax, service tax, customs duty,

excise duty and cess which have not been

deposited on account of any dispute.

x. The company has accumulated losses, as at March 31,

2009. It has not incurred cash losses during the current

financial year ended on that date or in the immediately

preceding financial year.

xi. According to the records of the company examined by

us and the information and explanation given to us,

the company has not defaulted in repayment of dues to

any financial institution or bank as at the balance sheet

date.

xii. The company has not granted any loans and advances

on the basis of security by way of pledge of shares,

debentures and other securities.

xiii. The provisions of any special statute applicable to chit

fund / nidhi / mutual benefit fund/societies are not

applicable to the company.

xiv. In our opinion, the company has maintained proper

records of transactions and contracts relating to dealing

or trading in shares, securities, debentures and other

investments during the year and timely entries have been

made therein. Further, such securities have been held

by the company in its own name.

xv. In our opinion, and according to the information and

explanations given to us, the company has given

guarantee for loans taken by other healthcare services

provider. However, this is not considered prejudicial by

the company to its interests.

xvi. In our opinion, and according to the information and

explanations given to us, on an overall basis, the term

loans have been applied for the purposes for which they

were obtained.

xvii. On the basis of an overall examination of the balance

sheet of the company, in our opinion and according to

the information and explanations given to us, there are

no funds raised on a short-term basis which have been

used for long-term investment.

xviii. The company has not made any preferential allotment

of shares to parties and companies covered in the

register maintained under Section 301 of the Act during

the year.

xix. The company has not issued any debentures during the

year.

xx. The company has not raised any money by public issues

during the year.

xxi. During the course of our examination of the books and

records of the company, carried out in accordance with

the generally accepted auditing practices in India, and

according to the information and explanations given to

us, we have neither come across any instance of fraud

on or by the company, noticed or reported during the

year, nor have we been informed of such case by the

management.

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

that:


which to the best of our knowledge and belief were

necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by

law have been kept by the company so far as appears

from our examination of those books;

Auditors’ Report

4 Healthcare.p65 8/19/2009, 12:31 PM263



(c) The Balance Sheet, Profit and Loss Account and Cash

Flow Statement dealt with by this report are in

agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss

Account and Cash Flow Statement dealt with by this

report comply with the accounting standards referred

to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from

the directors, as on March 31, 2009 and taken on record

by the Board of Directors, none of the directors is

disqualified as on March 31, 2009 from being appointed

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 and

according to the explanations given to us, the said

financial statements together with the notes thereon

and attached thereto give in the prescribed manner the

information required by the Act and give a true and fair

view in conformity with the accounting principles

generally accepted in India:

(i) in the case of the Balance Sheet, of the state of

affairs of the company as at March 31, 2009;

(ii) in the case of the Profit and Loss Account, of the

profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the

cash flows for the year ended on that date.

V.NIJHAWAN

Partner

Membership Number F-87228




Auditors’ Report

4 Healthcare.p65 8/19/2009, 12:31 PM264



(RS. LACS)



62427.59 62344.80LOAN FUNDS 3Secured Loans 23508.60 24315.01Unsecured Loans 88.95 103.26

23597.55 24418.27Deferred Tax Liability (Net) 4 - 1638.19

86025.14 88401.26



24011.98 20760.07

INVESTMENTS 6 10450.06 21250.29

CURRENT ASSETS, LOANS AND ADVANCES 7Inventories 1055.58 927.48Sundry Debtors 10983.60 9678.51Cash and Bank Balances 3202.83 170.24Other Current Assets 86.21 0.12Loans and Advances 32062.09 25968.59


6638.80 5855.82



PROFIT AND LOSS ACCOUNT 10740.57 15501.70

86025.14 88401.26





V. NIJHAWAN DR. PERVEZ AHMED CEO & Managing DirectorPartner K.K. MATHUR DirectorMembership No. F 87228 ARVIND KAKAR Vice President-Finance

For and on behalf ofLALJI KUMAR Company Secretary

Price WaterhouseChartered Accountants

Gurgoan New DelhiJUNE 25, 2009 JUNE 25, 2009

4 Healthcare.p65 8/19/2009, 12:31 PM265



(RS. LACS)


INCOME

Income from Healthcare Services 11 26718.32 22143.78

Other Income 12 5030.19 2863.22

31748.51 25007.00

EXPENDITURE

Medical Supplies Consumed/Traded 13 9008.17 7544.18

Personnel, Operating and Administrative Expenses 14 15876.30 13056.04

Financial Expenses 15 2379.57 2696.79

Depreciation 5 1298.45 1363.76

28562.49 24660.77

PROFIT BEFORE TAX 3186.02 346.23

Tax Expense 16 (1575.12) 737.24

PROFIT/(LOSS) AFTER TAX 4761.14 (391.01)

(LOSS) BROUGHT FORWARD (15501.71) (15044.18)

Transitional liability recognized pursuant to adoption of

Accounting Standard-15 (Revised) “Employee Benefits” - 66.52

Loss carried forward to the Balance Sheet (10740.57) (15501.71)

Earnings Per Share (Rs. Per equity share of Rs. 10/- each)

(Refer Note C15 on Schedule 17)

- Basic 2.01 (0.17)

- Diluted 1.79 (0.31)

Number of shares used in computing earnings per share:

- Basic 237,106,740 234,163,599

- Diluted 238,577,179 235,758,189









4 Healthcare.p65 8/19/2009, 12:31 PM266



(RS. LACS)


A. CASH FLOW FROM OPERATING ACTIVITIESNet Profit before Tax 3186.02 346.24Adjustments for:Depreciation 1298.45 1363.76Interest Expense 2311.33 2636.40Interest Income (2989.11) (2287.49)Net (Profit)/Loss on Sale of Fixed Assets 6.74 169.13Net (Profit)/Loss on Sale of Investments (1624.55) (289.40)Miscellaneous Expenditure Written Off 6.85 0.03Deferred Revenue Expenditure Written Off - 6.01Fixed Assets Written off - 47.25Bad Debts - 2.65Provision for Bad and Doubtful Debts 208.12 132.69Liabilities No Longer Required Written Back (155.47) (63.98)Provision for Gratuity and Leave Encashment 48.46 65.16Provision for Doubtful Advances 61.47 21.21TDS on Technical/Service/Other operating income (147.80) (220.71)

Operating Profit Before Working Capital Changes 2210.51 1928.95

Adjustments for:Trade Receivables (1513.22) (3688.74)Other Receivables (604.54) (1016.48)Inventories (128.10) (94.37)Trade Payables 897.96 452.37Other Current Assets (86.10) -

Cash Generated From Operations 776.51 (2418.27)

Direct Taxes (Paid)/Refunded (Net) (63.57) (47.89)

Cash From/(Used in) Operating Activities 712.94 (2466.16)

B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed Assets (4478.81) (2430.61)Capital Work in Progress (162.14) 555.93Increase Pre-operative Expenses - 28.26Proceeds from Sale of Fixed Assets 45.15 41.76Proceeds from Sale of Investments 30489.62 44937.35Purchase of Investments (Others) (18064.84) (63804.00)Advances to Group Companies (1171.81) (2524.50)Loan given to other Healthcare Service providers (3131.60) (898.00)Interest Received (Revenue) 1889.89 1334.08

Cash From/(Used In) Investing Activities 5415.46 (22759.73)


4 Healthcare.p65 8/19/2009, 12:31 PM267



C. CASH FLOW FROM FINANCING ACTIVITIESShare Capital 5.00 30000.00Share Issue Expenses - (94.61)Repayment of Long Term Loans (1065.30) (438.90)Working Capital Funding (net) 258.89 753.91Repayment of Bridge Loan - (3000.00)Proceeds from Short Term Loans - 45.68Repayment of Short Term Loans (14.30) (49.72)Interest Paid (2280.11) (2652.71)

Cash From/(Used In) Financing Activities (3095.82) 24563.65

Net Increase/(Decrease) in Cash and Cash Equivalents 3032.59 (662.24)

Cash and Cash Equivalents - Opening Balance 170.24 832.48Cash and Cash Equivalents - Closing Balance 3202.83 170.24

Net Increase/(Decrease) in Cash and Cash Equivalents 3032.59 (662.24)

Notes:1 The above Cash Flow statement has been prepared under the “Indirect Method” as set out in the Accounting Standard-3 on Cash

Flow Statements notified u/s 211 (3C) of the Companies Act, 1956.2 Figures in brackets indicate cash outgo.3 Cash and Cash Equivalents at the end of the year consist of Cash, Cheques in hand and Balances with Scheduled Banks:

(RS. LACS)


Cash in Hand 37.60 22.70Cheques in Hand 83.14 17.51Balance with Scheduled Bank- In Margin Accounts* 10.25 10.60- In Deposit Accounts 2500.00 -- In Current Accounts 571.84 119.43

Total 3202.83 170.24

* Not available for use by the Company since under lien.


(RS. LACS)








4 Healthcare.p65 8/19/2009, 12:31 PM268



(RS. LACS)


SCHEDULE-1

SHARE CAPITAL

AUTHORISED

350,000,000 Equity Shares of Rs. 10/- each 35000.00 35000.00

(Previous year 350,000,000 Equity Shares of Rs. 10/- each)

250,000,000 Cumulative Preference Shares of Rs. 10/- each 25000.00 25000.00

(Previous year 250,000,000 Cumulative Preference Shares of Rs. 10/- each)

60000.00 60000.00

ISSUED, SUBSCRIBED AND PAID UP

(Refer Notes C4 & C5 on Schedule 17)

237,144,548 Equity Shares of Rs. 10/- each 23714.45 23709.45


250,000,000, 2% Cumulative Convertible Preference Shares of Rs. 10/- each 25000.00 25000.00

(Previous year 250,000,000, 2% Cumulative Convertible Preference Shares of Rs.10/- each)

48714.45 48709.45

Note:

1. As at March 31, 2009, 166,100,000 (Previous year 166,100,000) equity shares are held by

Max India Limited, the holding Company along with its nominees of which 103,779,127

(Previous year 103,779,127) equity shares were issued for consideration other than cash.

2. 50,000 Equity Shares of Rs. 10/- each (Previous Year Nil) allotted under Employee Stock Option Plan

SCHEDULE-2

RESERVES AND SURPLUS


a) Securities Premium Account


Movement during the year

Additions - 4090.91

Utilisation - 94.61


b) Capital Reserve


Movement during the year - -


c) Employee Stock Option Outstanding

Opening Balance - -

Movement during the year

Additions 77.79 -

Utilisation - -

Closing Balance 77.79 -

13713.14 13635.35


4 Healthcare.p65 8/19/2009, 12:31 PM269



(RS. LACS)


SCHEDULE-3

LOAN FUNDS

SECURED LOANS


Term Loans from Financial Institutions* 22495.80 23561.10

Fund based Working Capital Facility 1012.80 753.91

23508.60 24315.01

* Amount repayable within one year Rs. 1687.50 Lacs (Previous year Rs.1065.30 Lacs)

UNSECURED LOANS

Other loans from Banks ** 88.95 103.26

88.95 103.26

** Amount repayable within one year Rs. 39.48 Lacs (Previous year Rs. 38.57 Lacs)

SCHEDULE-4

DEFERRED TAX LIABILITY


a) Deferred Tax Liability

- Opening Balance 1928.99 1157.85

- Movement during the year

Additions 458.41 866.09

Utilisation (294.51) (94.95)

- Closing Balance 2092.89 1928.99

b) Deferred Tax Asset

- Opening Balance (290.80) (203.97)

- Movement during the year

Additions (1802.09) (103.55)

Utilisation - (16.72)

- Closing Balance (2092.89) (290.80)

Net Deferred Tax Liability - 1638.19


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SCHEDULE-5

FIXED ASSETS(Refer Notes C2 & C14(B) on Schedule 17) (RS. LACS)


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 1740.10 4515.70 - 6255.80 - - - - 6255.80 1740.10Building 6425.79 8.22 - 6434.01 195.13 104.84 - 299.97 6134.04 6230.66Building (Leasehold 2441.66 29.08 - 2470.74 1316.87 209.22 - 1526.09 944.65 1124.79Improvement)Plant and Machinery 2450.94 13.70 - 2464.64 375.61 117.53 - 493.14 1971.50 2075.33Furniture and Fixture 863.12 16.36 - 879.48 277.43 51.74 - 329.17 550.31 585.69Office Equipment and 1524.77 150.50 7.54 1667.73 717.17 126.93 6.87 837.23 830.50 807.60ComputersMedical Equipment 8237.66 398.96 - 8636.62 1780.57 592.09 - 2372.66 6263.96 6457.09Motor Vehicles 267.39 34.52 65.17 236.74 50.00 22.56 13.95 58.61 178.13 217.39

Intangible AssetsSoftware 565.09 2.94 - 568.03 222.37 73.54 - 295.91 272.12 342.72

TOTAL 24516.52 5169.98 72.71 29613.79 4935.15 1298.45 20.82 6212.78 23401.01 19581.37

Previous Year 24232.76 729.19 445.44 24516.51 3758.69 1363.76 187.30 4935.15

Capital Work in Progress including Capital Advances Rs. 428.75 Lacs (Previous year Rs. 1158.62 Lacs) 610.97 1178.70

24011.98 20760.07

Notes :1. Capital Work in Progress includes preoperative expenditure pending allocation Rs Nil (Previous year Rs 0.14 Lacs).2. Of the above, motor vehicles hypothecated amount to Rs. 129.66 Lacs (Previous year Rs. 176.60 Lacs).3. Land is under perpetual Lease.4. Leasehold improvements consists of civil and other improvements at premises taken on long term lease by the Company.5. Capital Advances includes an amount of Rs. 365.42 Lacs (Previous year Rs Nil) paid to Greater Noida Development Authority as Earnest Money against allotment of a hospital

plot in Greater Noida (UP).

(RS. LACS)


SCHEDULE-6

INVESTMENTS (Non Trade)


a) Subsidiary, at cost

(Unquoted)

Equity Shares

Max Medical Services Limited

14,142,535 (Previous year 14,142,535) Equity Shares of Rs. 10/- each 2094.25 2094.25

b) Current Investments

(Unquoted), at cost

Units in Mutual Funds 8355.81 19156.04

10450.06 21250.29


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(RS. LACS)


SCHEDULE-7

CURRENT ASSETS, LOANS AND ADVANCES

INVENTORIES

Stock of Medicines and Consumables 745.47 641.31

Medical and Surgical Instruments 310.11 1055.58 286.17 927.48

1055.58 927.48

SUNDRY DEBTORS

(Unsecured)

Debts Exceeding Six Months

- Considered Good 7023.47 5487.40

- Considered Doubtful 505.69 284.21

Less: Provision for Doubtful Debts (505.69) 7023.47 (284.21) 5487.40

Other Debts



Less: Provision for Doubtful Debts (0.14) 3960.13 (13.51) 4191.11

10983.60 9678.51

Amounts outstanding from companies under the same management:

- Max India Ltd. 3.88 9.33

- Max New York Life Insurance Company Ltd. 3.58 3.56



- Alps Hospital Ltd. 725.11 415.49

736.69 434.74

Amount outstanding from Directors - 0.45

Maximum amount outstanding during the year from companies under

the same management:

- Max India Ltd. 5.44 9.33

- Max New York Life Insurance Company Ltd. 3.68 4.31




748.48 435.49

Maximum amount outstanding from Directors during the year 0.85 0.54

CASH AND BANK BALANCES

Cash in Hand 37.60 22.70

Cheques in Hand 83.14 17.51

Balances with Scheduled Banks

- In Current Accounts 571.84 119.43

- In Deposit Accounts 2500.00 -

- In Margin Accounts 10.25 10.60

3202.83 170.24

OTHER CURRENT ASSETS

Interest Accrued on Deposit and Margin Accounts 86.21 0.12

86.21 0.12

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SCHEDULE-7 (Continued)

LOANS AND ADVANCES(Considered good, unless otherwise stated)

(Refer Note C14A on Schedule 17)

UNSECURED

Due from Subsidiary Companies:

Inter Corporate Deposit 13113.46 11941.65

Advances

- Pre-operative expenses recoverable 1565.65 1565.65

- Interest Recoverable 3599.61 3113.94

- Others 33.98 6.50

Lease Rent Receivable 2802.03 2994.47

Less: Unearned Income (1745.90) 1056.13 (1810.53) 1183.94

Due from Other Healthcare Service Providers:

- Loan 7690.09 4558.49

- Interest Recoverable 1025.80 424.05

- Others 392.32 501.88

Due from Others:

Advances Recoverable in Cash or kind or Value to be Received



Less: Provision for Doubtful Advances (100.82) 1164.61 (39.34) 279.09

Prepaid Expenses 169.80 137.27

Security Deposits 636.08 596.92

Advance Income Tax 1267.31 1406.23

Income Accrued 347.25 252.98

32062.09 25968.59

Amount due from Directors 141.21 135.73

Amounts due from companies under the same management:

- Max Medical Services Ltd. 17612.34 15929.51


Maximum amount outstanding from Directors during the year 141.21 135.73

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

- Max Medical Services Ltd. 17578.37 16007.91


(RS. LACS)



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(RS. LACS)


SCHEDULE-8CURRENT LIABILITIES(Refer Note C7 on Schedule 17)

Sundry Creditors:- Total outstanding dues of micro enterprises and small enterprises - -- Total outstanding dues of creditors other than micro enterprises and small enterprises 5336.38 4805.84Advance from Customers 289.93 238.54Advance Income Received 15.51 -Other Liabilities 521.99 415.61Interest accrued but not due on:- Term Loan 80.94 49.12- Other Loan 0.92 1.52

6245.67 5510.63

SCHEDULE-9PROVISIONS(Refer Note C11 on Schedule 17)

Provision for Leave Encashment 323.46 300.04Provision for Gratuity 60.94 35.90Provision for Wealth Tax 1.12 0.98Provision for Fringe Benefit Tax 208.74 97.06Less: Advance Fringe Benefit Tax (201.13) 7.61 (88.79) 8.27

393.13 345.19



- Preliminary Expenses 0.05 0.08- Deferred Employee Compensation 70.97 -

71.02 0.08

(RS. LACS)


SCHEDULE-11INCOME FROM HEALTHCARE SERVICES(Refer Note C18(d) on Schedule 17)

Revenue from Healthcare Facilities* 20475.54 16706.33Less: Discount (275.99) 20199.55 (270.58) 16435.75Trading Sales:- Drugs, Pharmaceuticals and Medical Supplies 4736.96 4080.43Income earned from Other Healthcare Service Providers** 1721.50 1625.00Sponsorships and Educational Income 60.31 2.60

26718.32 22143.78

* Includes tax deducted at source Rs. 224.57 Lacs (Previous year Rs. 201.78 Lacs)** Includes tax deducted at source Rs. 26.91 Lacs (Previous year Rs. 16.30 Lacs)

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(RS. LACS)


SCHEDULE-12

OTHER INCOME

(Refer Notes C14(A) & C14(B) on Schedule 17)

Interest on:

- Bank Deposits* 392.20 205.48

- Loans Given to Subsidiaries** 1753.21 1577.77

- Assets given on Finance Lease to Subsidiary 64.64 14.78

- Loans Given to Other Healthcare Service Providers*** 706.73 489.41

- Income Tax Refund 72.33 -

- Loans/Advances - 0.05

Lease Rentals 48.00 36.00

Profit on Sale of Non Trade Investments-Current 1624.55 289.40

Liabilities/Provisions No Longer Required Written Back 155.47 63.98

Income from Laundry Services**** 114.06 91.34

Gain on Foreign Exchange Fluctuation 0.12 14.81

Less: Loss on Foreign Exchange Fluctuation - (1.64)

Net Gain on Foreign Exchange Fluctuation 0.12 13.17

Miscellaneous Income 98.88 81.84

5030.19 2863.22

* Includes tax deducted at source Rs 83.09 Lacs (Previous year Rs. 46.53 Lacs)

** Includes tax deducted at source Rs 1.96 Lacs (Previous year Rs.13.81 Lacs)

*** Includes tax deducted at source Rs.Nil (Previous year Rs. 7.12 Lacs)

**** Includes tax deducted at source Rs. 2.24 Lacs (Previous year Rs. 2.63 Lacs)

SCHEDULE-13

MEDICAL SUPPLIES CONSUMED/TRADED

Consumption of Medical Consumables 4441.85 3595.35

Cost of Traded Goods Sold:

- Drugs, Pharmaceuticals and Medical Supplies 4566.32 3948.83

9008.17 7544.18


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(RS. LACS)


SCHEDULE-14

PERSONNEL, OPERATING AND ADMINISTRATIVE EXPENSES

(Refer Notes C8,C9, C11, C14(C),C14(D),C18(a) & C18(c) on Schedule 17)

Personnel

Salaries, Wages and Bonus 4832.53 3948.31

Contribution to Provident and Other Funds 231.74 177.39

Recruitment Expenses 41.53 22.70

Staff Welfare 178.32 137.57

5284.12 4285.97

Other Operating and Administration Expenses

Professional and Consultation Fees 4329.28 3357.20

Outside Lab Investigations 248.69 153.28

Patient Catering Expenses 268.47 244.64

Rent 917.71 908.97

Insurance 181.66 150.64

Rates and Taxes 34.39 51.14

Facility Maintenance Expenses 1037.88 909.20

Power and Fuel 676.71 701.56

Repairs and Maintenance:

- Building 223.58 124.77

- Plant and Machinery 230.30 133.86

- Others 316.85 319.18

Printing and Stationery 215.65 243.95

Travelling and Conveyance 327.33 209.08

Communication 163.02 169.46

Legal and Professional 409.83 225.33

Directors’ Fee 2.70 0.40

Watch and Ward 129.91 128.79

Advertisement and Publicity 263.76 155.88

Software Expenses 51.90 128.00

Charity and Donation 199.40 0.73


Equipment Hiring Charges 10.75 25.63

Bad Debts - 2.65

Provision for Doubtful Debts 208.12 132.69

Provision for Doubtful Advances 61.47 21.21

Loss on Sale/Disposal of Fixed Assets 6.74 169.17

Less: (Gain) on Sale/Disposal of Fixed Assets - (0.04)

Net Loss on Sale/Disposal of Fixed Assets 6.74 169.13

Fixed Assets Written Off - 47.25

Miscellaneous Expenses 49.90 30.22

Amortization of Miscellaneous Expenditure 0.03 6.04

10592.18 8770.07

15876.30 13056.04

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(RS. LACS)


SCHEDULE-15FINANCIAL EXPENSESInterest on:

Term Loans- Banks - 240.48- Financial Institutions 2231.89 2297.06Working Capital Loan 70.14 66.40Others 9.30 32.46

Bank Charges 68.24 60.39

2379.57 2696.79

SCHEDULE-16TAX EXPENSE(Refer Note C16 on Schedule 17)

Current YearWealth Tax 0.75 0.98Fringe Benefit Tax 62.32 51.95Deferred Tax (1638.19) 684.31

(1575.12) 737.24

SCHEDULE – 17

A. NATURE OF BUSINESS

The Company has completed Phase-I of its plans which included setting up of a network of healthcare facilities in the National

Capital Region, comprising of primary care clinics, secondary care hospitals/med centers and tertiary care facilities. Subsequent

phases, currently underway, are for expanding these facilities and setting up other healthcare facilities.

The financials of the Company include the performance of hospitals and centres, which are operational and the central support

team, which is meant to support the current operations and on going expansion. Healthcare facilities have long gestation periods

from the commencement of its operations and accordingly require significant cash outlay.

Also, as part of the plan, the Company had entered into long term service contracts either directly or through its subsidiaries with

other Healthcare Service Providers and a down stream subsidiary to provide support/services to them in their hospital operations.

Accordingly, amounts recoverable against these contracts are disclosed under sundry debtors and loans and advances.

B. SIGNIFICANT ACCOUNTING POLICIES

1. Accounting Convention

The Financial Statements are prepared on an accrual basis to comply in all material aspects with all the applicable accounting

principles in India, the applicable accounting standards notified under section 211(3C) of the Companies Act, 1956 and the

relevant provisions of the Companies Act, 1956.

2. Revenue Recognition

a. Revenue from Healthcare facilities is recognised on the performance of related services and includes services for patients

undergoing treatment and pending for billing, which is shown as income accrued under loans & advances.

b. Income from Healthcare Service Providers is recognised on the performance of related services as per terms of contracts.

c. Income from Educational Programmes is recognised on accrual basis.


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3. Fixed Assets

a. Fixed Assets are stated at their original cost including freight, duties, taxes and other incidental expenses relating toacquisition and installation.

b. Assets acquired under the business transfer agreement are stated at amounts based on a valuation report.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. Intangibleassets are stated at cost less accumulated depreciation.

d. Expenses of revenue nature, which can be regarded as incidental and related to project setup are transferred to“Preoperative expenses pending Capitalisation”. These expenses are allocated to fixed assets in the year of commencementof the related project.

4. Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalisedas part of the cost of that asset in accordance with Accounting Standard 16 on “Borrowing Costs”. Interest on working capitalis charged to the Profit & Loss Account.

5. Depreciation

a. Depreciation is charged on straight-line method on a pro-rata basis at rates prescribed under Schedule XIV to theCompanies Act, 1956

b. Leasehold improvements are depreciated over respective Lease Periods.c. Assets costing not more than Rs. 5,000/- individually have been depreciated at 100%.d. Softwares in the nature of intangible assets are depreciated over a period of six years.

6. Investments

a. Investments are classified into current investments and long-term investments. The cost of investments includesacquisition charges such as brokerage, fees and duties.

b. Long-term investments are valued at cost. Provision for diminution is made to recognise a decline, other than temporaryin nature.

c. Current investments are carried at lower of cost or fair value.

7. Inventories

Inventories are valued at lower of cost or net realisable value. Cost for this purpose is calculated on a ‘First In First Out’method.

8. Taxation

Income taxes are computed using the tax effect accounting method, where taxes are accrued in the same period in which therelated revenue and expenses arise. Provision for tax consists of current tax and deferred tax. A provision is made for incometax annually based on the tax liability computed, after considering tax allowances and exemptions. Provisions are recordedwhen 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 areidentified, and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences namely the differencesthat originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount beingconsidered. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based onprevailing enacted or substantially enacted regulations. Deferred tax assets are recognized only if there is virtual certaintythat they will be realized and are reviewed for the appropriateness of their respective carrying value at each balance sheetdate.

9. Employee Benefits

a. Gratuity

In accordance with the Payment of Gratuity Act, 1972, the Company provides gratuity, a benefit plan (the “GratuityPlan”) covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement,death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and thetenure of employment. Liabilities with regard to the Gratuity Plan are determined by an actuarial valuation, based upon

which, the Company contributes to a Master policy with Life Insurance Corporation of India.

4 Healthcare.p65 8/19/2009, 12:31 PM278



b. Superannuation

Certain employees of the Company are participants of a defined benefit superannuation contribution plan. The Company

makes contributions under the superannuation plan to “Max Healthcare Institute Limited Superannuation Fund” based

on a specified percentage of each covered employee’s salary.

c. Provident Fund

Eligible employees receive benefits from a provident fund, which is a defined contribution plan. The Company makes

contributions under Provident Fund to “Max India Limited Employees Provident Fund Trust”. The Company and the

employees make monthly contributions to the provident fund trust equal to a specified percentage of the covered

employee’s salary.

d. Leave Encashment

Accrual for leave encashment is made on the basis of actuarial valuation done at the year end.

10. Employee Stock Option Scheme

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. 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.

c. Exchange differences in respect of liabilities incurred to acquire fixed assets are recognised in the profit and loss

account.

12. Miscellaneous Expenditure

a. Preliminary expenses are amortised over a period of 10 years.

b. Deferred employee compensation expense is amortised over the vesting period.

c. Other Deferred Revenue Expenditure is amortised from the year it is incurred/ related projects commence operations,

over 3 to 5 years based on the period over which future benefit are expected to be received.

13. Leases

Where the Company is Lessor

a. Finance Lease

Assets given under finance lease are recognised as receivables at an amount equal to the net investment in lease. Lease

rentals are apportioned between principal and the interest on the basis of computed internal rate of return. The principal

amount received is reduced from the net investment in the lease while lease income is recognised over the period of the

lease so as to yield a constant rate of return on the net investment in the lease.

b. Operating Lease

The assets given under operating lease are shown in the Balance Sheet under fixed assets and depreciated on a basis

consistent with the depreciation policy of the Company. The lease income is recognised in the Profit and Loss Account

on an accrual basis. The initial direct cost incurred for finalising the lease arrangement is recognised as expense immediately

in the Profit and Loss Account.

Where the Company is Lessee

c. Finance Lease

Assets acquired under finance leases are recognised as an Asset and a Liability at the lower of the fair value of the

leased assets at inception of the lease and the present value of minimum lease payments. Lease payments are apportioned

between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to periods


4 Healthcare.p65 8/19/2009, 12:31 PM279



during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability and

the charge to the Profit and Loss Account.

d. Operating Lease

Payment made under Operating Leases is charged to Profit and Loss Account on a straight line basis over the period of

the lease.

14. Provisions and Contingencies

A provision is recognized when there is a present obligation as a result of past event, 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 aspect of the matter involved.

C. NOTES TO THE ACCOUNTS

1. Contingent Liabilities (RS. LACS)


a) Corporate guarantees* 8000.00 8000.00

b) Claims against the Company not acknowledged as debts 834.78 626.77

c) Letter of Credit outstanding 3.24 -

d) Arrears of dividend on 2% Cumulative Convertible Preference Shares 839.73 338.80

e) Corporate Dividend tax thereon 142.71 57.58

f) Liability on assumed IRR (Also refer Note 4 below) 4053.42 1594.31

g) Income Tax (Refer Note 3 below)

* Guarantees given on behalf of another healthcare services provider is not considered prejudicial to the Company’s interest

as it provides opportunities for growth and increase in operations.

2. Capital Commitments (RS. LACS)


Estimated amount of contracts remaining to be executed on capital

account and not provided for 1595.47 4367.01


Balance Value of Contracts 1166.72 3208.39

3. Income Tax Cases

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

Appeal against the disallowance pending Before CIT (Appeals) CIT (Appeals) CIT (Appeals) CIT (Appeals)

Demand (if any) NIL NIL NIL NIL

The Company is hopeful that the above appeals would be disposed off in its favour.

4. During the previous year, the Company together with Max India Limited (the Holding 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 had subscribed to the share capital of the Company amounting to Rs. 30,000 Lacs on July 28, 2007,

as detailed below:


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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 the Company, subject to a maximum of 7.5% equity stake in the Company 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.

The Company 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, the Company had entered into another tripartite “put option” agreement

together with Max India Limited (the Holding Company) and International Finance Corporation, USA. As per the said agreement

IFC has a right to exercise the put option in respect of the said preference shares on Max India Limited as under:-

i) At any time after 3 years from date of subscription; or

ii) At any time after giving due notice, in the event of non-performance of certain obligation by the Company and/or Max

India Limited.

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 at present, hence the provision for the said liability has

not been made.

5. Employee Stock Option Plan

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 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


March 31, 2009 March 31, 2008

Options outstanding, beginning of the year 1,620,000 1,670,000

Options granted during the year 5,35,000 100,000

Options forfeited/lapsed during the year (12,00,000) (150,000)

Exercised during the year (50,000) -

Options outstanding, end of the year 9,05,000 1,620,000


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6. Loans

(a) The Company has availed term loans from financial institutions to finance its hospital project. The details of loans

outstanding till date are as follows:

• Rs. 9183.30 Lacs (Previous year Rs.10061.10 Lacs) from Housing Developing Finance Corporation Ltd.

• Rs.6000.00 Lacs (Previous year Rs.6000.00 Lacs) from Infrastructure Development Finance Company Limited

• Rs.7312.50 Lacs (Previous year Rs.7500.00 Lacs) from Export Import Bank of India

The above loans from financial institutions are secured by way of:

• Equitable mortgage of the immovable properties of the Company and a Society

• Hypothecation of moveable fixed assets of the Company and its subsidiary

• Corporate guarantees by the Holding Company

(b) Fund based working capital facility from Yes Bank for Rs. 1012.80 Lacs (Previous year Rs.753.91 Lacs) (sanctioned amount

Rs. 1500 Lacs) (Previous year Rs.800 Lacs) is secured by way of hypothecation of all current assets of the Company.

7. Micro, Small and Medium Enterprises

The Company has initiated the process of identifying the Micro, Small and Medium Enterprises as defined under the “Micro,

Small and Medium Enterprises Development Act, 2006”. However, as per the information received from creditors, there is no

creditor covered under the said act.

8. Miscellaneous Expenditure represents:

(RS. LACS)

Particulars As at Addition Amortised As at

April during during March

1, 2008 the year the Year 31,2009

Preliminary and Issue Expenses 0.08 - 0.03 0.05

Deferred Employee Compensation - 77.79 6.82 70.97

0.08 77.79 6.85 71.02

9. Directors’ Remuneration

(RS. LACS)

Current Year* Previous Year

a) Directors’ remuneration paid/provided in the accounts:

(i) Salary and Allowances 71.27 42.93

(ii) Perquisites 21.15 5.07

(iii) Contribution to Provident Fund and Superannuation Fund 3.60 4.86

96.02 52.86

b) Professional Fees paid to Directors 14.23# 65.83

Total 110.25 118.69

The above includes leave encashment for Rs.1.98 Lacs (Previous year Rs.Nil) and does not include gratuity.

*During the year, the Company paid remuneration to Executive Directors in accordance with the resolution passed by Boardof Directors and shareholders. With regard to Directors an amount of Rs. 64.96 Lacs (Previous year Rs. 70.17 Lacs) is paid inexcess of limits prescribed under Section II of Part II of Schedule XIII of Companies Act, 1956. The Company is in the processof taking approval from Central Government for this excess amount.

In view of aforesaid, the excess amount of Rs. 64.96 Lacs (Previous year Rs. 70.17 Lacs) received by the concerned Directorsis held in trust for the Company.

Remuneration for current year also includes an amount of Rs. 65.45 Lacs (Previous year Nil) relating to earlier years for whichthe Company has received Central Government Approval during the year.

#Includes an amount of Rs. Nil (Previous year Rs. 21.08 Lacs) relating to services rendered in the previous year for which anagreement has been entered in the current year.


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10. Investments

The details of Investments in the nature of Current Non Trade (Unquoted), at cost are given below

Name of the Investment Face value As at As at

per unit March 31, 2009 March 31, 2008

Units Value Units Value

(Rupees) (Numbers) (Rs. Lacs) (Numbers) (Rs. Lacs)


a) DSP Black Rock Strategic Bond Fund 1000 182270 1854.40 - -

- Institutional Plan Growth

b) ICICI Prudential Floating Rate Plan D Growth 10 15546303 2000.42 - -

c) IDFC Liquid Plus Fund - Treasury Plan 10 19744159 2000.48 - -

- Super Inst Plan C – Growth

d) Kotak Floater Long Term Growth 10 18207380 2500.51 - -

e) Birla Sun Life Liquid Plus Inst. – Growth 10 - - 20479195 3000.65

f) DSP Merrill Lynch Cash Plus – Institutional – Growth 1000 - - 505068 5158.82

g) HSBC Liquid Plus – Inst. - Plus – Growth 10 - - 39771183 4237.48

h) ICICI Prudential Institutional Liquid Plan 10 - - 4986950 571.29

- Super Institutional Growth

i) Reliance Liquid Plus Fund Institutional Option 1000 - - 193806 2045.00

-Growth Plan

j) TATA Floater Fund-Growth 10 - - 36573556 4142.80

8355.81 19156.04

Details of movement of Current Non Trade Investments (Unquoted) during the year:

Name of the Investment Face value Purchases Sales

per unit Units Value Units Value

(Rupees) (Numbers) (Rs. Lacs) (Numbers) (Rs. Lacs)

a) Birla Sun Life Liquid Plus-Instl. – Growth 10 - - 20479195 3000.65

b) DSP ML Cash Plus-Institutional-Growth 1000 6043 63.00 511112 5221.82

c) DSP Black Rock Cash Plus Fund 1000 224255 2500.00 224255 2500.00

- Institutional Plan-Growth

d) DSP Black Rock Strategic Bond Fund 1000 245768 2500.43 63499 646.03

- Institutional Plan Growth

e) HSBC CF Liq Plus-Inst 10 - - 39771183 4237.49

f) ICICI Prudential Institutional Liquid Plan 10 15575596 2000.00 20562546 2571.29

- Super Institutional Growth

g) ICICI Prudential Floating Rate Plan D Growth 10 15546303 2000.42 - -

h) IDFC Cash Fund - Super Inst Plan C – Growth 10 19126127 2000.00 19126127 2000.00

i) IDFC Liquid Plus Fund - Treasury Plan 10 19744159 2000.48 - -

- Super Inst Plan C - Growth

j) Kotak Liquid (Institutional Premium) – Growth 10 14182627 2500.00 14182627 2500.00

k) Kotak Floater Long Term Growth 10 18207380 2500.51 - -

l) Reliance Liquid Plus Fund-Institutional Option 1000 - - 193806 2045.00

-Growth Plan

m) Tata Floater Fund-Growth 10 - - 36573556 4142.80


4 Healthcare.p65 8/19/2009, 12:31 PM283



11. Employees Benefit

Gratuity and Leave Encashment plans:

The following tables sets out disclosure in respect of define benefit plans.

Profit and Loss account

Net employee benefit expense (recognized in Employee Cost)

(RS. LACS)


Current Previous Current Previous

Year Year Year Year

Current service cost 32.33 27.12 100.43 105.16

Interest cost on benefit obligation 7.74 5.31 24.00 18.21


Net actuarial( gain) / loss recognized in the year (9.46) 2.70 (68.47) (20.05)

Past service cost - - - -

Net benefit expense 25.04 29.88 55.96 103.32

Actual return on plan assets

Balance sheet


(RS. LACS)



Year Year Year Year



(60.94) (35.90) (323.46) (300.04)

Less: Unrecognized past service cost - - - -

Plan asset / (liability) (60.94) (35.90) (323.46) (300.04)

Changes in the present value of the defined benefit obligation are as follows

(RS. LACS)



Year Year Year Year

Opening defined benefit obligation 96.86 66.33 300.04 227.66

Interest cost 7.74 5.31 24.00 18.21

Current service cost 32.33 27.12 100.43 105.16

Benefits paid (3.05) (4.67) (32.54) (30.94)

Actuarial (gains) / losses on obligation (9.56) 2.77 (68.47) (20.05)

Closing defined benefit obligation 124.32 96.86 323.46 300.04


4 Healthcare.p65 8/19/2009, 12:31 PM284



Changes in the fair value of plan assets are as follows:

(RS. LACS)



Year Year Year Year

Opening fair value of plan assets 60.96 58.96 - -

Expected return 5.57 5.25 - -

Contributions by employer - 1.35 - -

Benefits paid (3.05) (4.67) - -

Actuarial gains / (losses) (0.10) 0.07 - -

Closing fair value of plan assets 63.38 60.96 - -

The Company expects to contribute Rs. NIL to gratuity in 2009-10.




Year Year Year Year

% % % %

Life Insurance Corporation of India 100 100 - -

The principal assumptions used in determining benefit obligations for the Company’s plans are shown below:



Year Year Year Year

% % % %

Discount rate 7.80 8.00 7.80 8.00

Expected rate of return on assets 9.15 9.15 - -

Employee turnover 40.00 40.00 40.00 40.00

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.


(RS. LACS)



Year Year Year Year


Plan assets 63.38 60.96 - -

Surplus / (deficit) (60.94) (35.90) (323.45) (300.04)

Experience adjustments on plan liabilities 10.18 (2.77) (69.27) (20.05)



During the year, the Company contributed Rs. 181.04 Lacs (Previous year Rs. 151.52 Lacs) for provident fund and Rs. 22.07

Lacs (Previous year Rs. 25.06 Lacs) for superannuation fund which represent contribution to defined contribution plans.


4 Healthcare.p65 8/19/2009, 12:31 PM285



12. Segment Reporting

As the Company operates in a single business and geographical segment of Healthcare services, the provisions of Accounting

Standard 17 on “Segment Reporting” notified under section 211(3C) of the Companies Act 1956 are not applicable to the

Company.

13. Related Parties (as identified by the Management) are classified as:

Holding Company Max India Ltd.

Subsidiaries Max Medical Services Ltd., Alps Hospital Ltd.

Fellow Subsidiaries Max New York Life Insurance Company Ltd., Max Ateev Ltd., Neeman Medical

International BV Netherlands, Neeman Medical International NV Netherlands, Max

Neeman Medical International Inc., USA, Max UK Ltd. UK, Pharmax Corporation

Ltd., Max Neeman Medical International Ltd., Max HealthStaff International Ltd.

Key Management Personnel (Directors) Mr. Analjit Singh, Mr. B Anantharaman (till June 30, 2008), Dr. Ashok Seth (till

August 23,2008), Dr. R.P. Soonawala, Dr. Pervez Ahmed(Effective February 1,2009).

Relatives of Key Management Personnel Mrs. Neelu Analjit Singh (Wife of Mr. Analjit Singh), Ms. Piya Singh (Daughter of Mr.

Analjit Singh), Ms. Tara Singh (Daughter of Mr. Analjit Singh), Mr. Veer Singh (Son

of Mr. Analijit Singh).

Enterprises over which key New Delhi House Services Ltd., Malsi Estates Ltd., Max India Foundation, Max Bupa

Management Personnel have Health Insurance Ltd.( Effective September 5, 2008).

Significant Influence

Employee benefit funds Max India Ltd. Employees Provident Fund Trust, Max Healthcare Institute Ltd.

Superannuation Fund.


Summary of significant related party transactions (as identified by management) carried out in ordinary course of business are as follows:

(RS. LACS)

S. Particulars Holding Subsidiaries Fellow Key Relatives Of Key Enterprise over Employee

No. Company Subsidiaries Management Management which Key Benefit

Personnel Personnel Management Funds

Personnel

have Significant

Influence

1 Fixed assets transferred/sold 45.54 - - - - - -

(-) (-) (-) (-) (-) (-) (-)

2 Fixed Assets Purchased - 15.43 - - - 82.69 -

(-) (-) (-) (-) (-) (-) (-)

3 Loans given - 1,171.81 - - - - -

(-) (2,524.50) (-) (-) (-) (-) (-)

4 Income and Reimbursements

Interest income - 1,817.85 - - - - -

(-) (1,592.55) (-) (-) (-) (-) (-)

Sale of Goods - 517.66 6.64 - - - -

(-) (406.66) (3.06) (-) (-) (-) (-)

Services rendered 15.98 348.69 6.43 0.35 1.49 15.51 -

(29.68) (149.09) (7.32) (0.19) (0.62) (8.81) (-)

Reimbursement of Expenses - 128.63 - - - - -

(-) (145.01) (-) (-) (-) (-) (-)

4 Healthcare.p65 8/19/2009, 12:31 PM286



14. Leases

Accounting for leases has been made in accordance with Accounting Standard-19 issued by the Institute of Chartered

Accountants of India. Following are the details of lease transactions for the year:

A. Finance Lease (As a Lessor)

i) Description of significant leasing arrangements

The Company has entered into a finance lease agreement for medical equipments with a down stream subsidiary

the period July 01, 2007 to March 31, 2017. The contract is renewable on mutual agreement.

ii) Reconciliation between the total gross investment in the lease and the present value of minimum lease payments

receivable as at the balance sheet date

(RS. LACS)


Total Gross Investment in Lease 2802.03 2994.47

Less:

Residual Value 53.62 12.96

Gross Investment in Lease 2748.41 2981.51

Less:

Unearned Income 1745.90 1810.53

Present value of minimum lease payments 1002.51 1170.98

(RS. LACS)

S. Particulars Holding Subsidiaries Fellow Key Relatives Of Key Enterprise over EmployeeNo. Company Subsidiaries Management Management which Key Benefit

Personnel Personnel Management FundsPersonnel

have SignificantInfluence

5 Expenses Service received 293.53 0.54 350.00 - - 107.22 -

(306.94) (12.84) (244.40) (-) (-) (96.77) (-) Other Expenses 30.95 1.79 13.95 - 4.62 48.09 - (including reimbursement expenses) (70.35) (-) (-) (-) (2.40) (-) (-) Director's Remuneration - - - 110.25 - - -

(-) (-) (-) (118.69) (-) (-) (-) Co's contribution to Superannuation - - - - - - 22.07

(-) (-) (-) (-) (-) (-) (25.06) Company's contribution to PF trust - - - - - - 212.71

(-) (-) (-) (-) (-) (-) (151.52)6 Amount Outstanding

Corporate Guarantee 24,000.00 - - - - - - (24,000.00) (-) (-) (-) (-) (-) (-)

Against Loan given - 14,679.11 - - - - - (-) (13,507.30) (-) (-) (-) (-) (-)

Interest Receivable - 3,599.61 - - - - - (-) (3,113.94) (-) (-) (-) (-) (-)

Other Receivable - 1,090.12 - 141.21 - - - (-) (6.50) - (135.62) - (2.86) (-)

Other Payable 1,229.80 3.67 77.30 - 0.33 15.37 51.48 (971.90) (-) (28.63) (-) (-) (7.27) (29.77)

Debtors 3.88 725.11 7.70 0.08 1.50 7.16 - (9.33) (415.49) (9.92) (0.19) (0.55) (-) (-)



4 Healthcare.p65 8/19/2009, 12:31 PM287




iii) Present value of minimum lease payments receivable are as follows:

(RS. LACS)

Particulars Gross Investment Present value of

in Lease minimum lease

payments receivable


(233.10) (168.47)

Later than one year and not later than five years 1385.02 573.02

(1317.89) (636.73)

Later than five years 1072.89 251.01

(1430.52) (365.78)

Total 2748.41 1002.51

(2981.51) (1170.98)


B. Operating Lease (As a Lessor)

i) Description of significant leasing arrangements

The Company has given certain medical equipments on operating lease to a down stream subsidiary at lease rental

of Rs. 4.00 Lacs p.m. for the period July 01, 2007 to June 30, 2009, the contract is renewal on mutual agreement.

ii) Details of Assets given under operating lease are as under:

(RS. LACS)

Particulars Gross Carrying Depreciation Accumulated

Amount for the year Depreciation

Medical Equipments 660.44 46.69 (324.42)

(660.44) (45.12) (277.73)


iii) The total of future minimum lease payments under non-cancellable leases is as follows:

(RS. LACS)


March 31, 2009 March 31, 2008


Later than one year and not later than five years - 12.00

Later than five years - -

Total 12.00 60.00

C. Operating Lease (As a Lessee)

The Company has acquired vehicles on operating leases. The total minimum lease payments and maturity profile of

operating leases at the Balance Sheet date, and the present value of the minimum lease payments as of March 31, 2009

are as follows:

(RS. LACS)


March 31, 2009 March 31, 2008

Not later than one year 3.22 -

Later than one year and not later than five years 4.57 -

Later than five years - -

Total 7.79 -

4 Healthcare.p65 8/19/2009, 12:31 PM288



D. Operating Lease (As a Lessee)The Company leases office spaces and accommodation for its employees under operating lease agreements. The leaserental expense recognized in the Profit and Loss account for the year is Rs. 917.71 Lacs (Previous Year Rs.908.97 Lacs)

Future minimum lease payments and the payment profile of non-cancellable operating leases are as follows:(RS. LACS)


Not later than one year 379.57 318.21Later than one year and not later than five years 588.04 456.06Later than five years - 228.81

Total 967.61 1003.08

15. Earnings Per ShareCalculation of EPS (Basic and Diluted)

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

BasicProfit/(Loss) after tax (Rs. Lacs) 4761.14 (391.00)Weighted average number of equity shares 237106740 234163599Earnings Per Share (Rs.) 2.01 (0.17)

Equity Share Details (Nos.)Outstanding as at the beginning of the year 237094548 228003639Issued on Jan 2, 2009 50000 -Issued on July 28, 2007 - 9090909Outstanding as at the end of the year 237144548 237094548

DilutedProfit/(Loss) after tax (Rs. Lacs) 4761.14 (391.00)Less: Dividend on Cumulative Preference Shares (Rs. Lacs) 500.00 338.80Net Profit/(Loss) after adjustment (Rs. Lacs) 4261.14 (729.80)Weighted average number of equity shares 238577179 235758189Earning Per Share (Rs.) 1.79 (0.31)

Equity Share Details (Nos.)*Outstanding as at the beginning of the year 238714548 229673639ESOPs granted under the 2006 Plan 535000 100000ESOPs forfeited/lapsed during the year (1200000) (150000)ESOPs Exercise during the year (50000) -Issued on Jan 2, 2009 50000 -Issued on July 28, 2007 - 9090909Outstanding as at the end of the year 238049548 238714548

* Since the rate at which the Preference Shares will be converted is not presently determinable, the same has not been considered.

Reconciliation of denominators used for calculating basic and diluted earnings per share

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

Denominator used for computing basic Earnings Per Share 237106740 234163599Dilutive impact of ESOPs granted under the 2006 Plan 2054659 1956328Dilutive impact of ESOPs lapsed under the 2006 Plan (584220) (331410)

Denominator used for computing diluted Earnings Per Share 238577179 235788517


4 Healthcare.p65 8/19/2009, 12:31 PM289



16. The movement of provision for deferred tax is given below:

(RS. LACS)

Opening as at Addition Deletion/ Closing as at

April 1, 2008 Adjustment March 31, 2009


Depreciation related 1928.96 458.41 (294.50) 2092.87

Preliminary expense 0.03 - (0.01) 0.02

1928.99 458.41 (294.51) 2092.89

Deferred Tax Asset

Deduction u/s 43B of the Income Tax Act (108.85) (39.24) - (148.09)

Other Provisions (181.95) (147.61) - (329.56)

B/F Unabsorbed depreciation carried forward - (1615.24) - (1615.24)

(290.80) (1802.09) - (2092.89)

Net Deferred Tax Liability 1638.19 (1343.68) (294.51) -

Deferred Tax Assets are created to the extent of deferred tax liability.

17. 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 recommended a contribution an amount not

exceeding Rs. 16.67 crores to this initiative over a period of 3-4 years, subject to the shareholders approval, out of the total

commitment of Rs.50 crores from Max India Group. Of the above, a sum of Rs. 1.45 Crores has been contributed by the

company during the year and included under the head Charity & Donation.

ADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PARAGRAPH 3, 4C AND 4D OF PART II OF SCHEDULE VI TO

THE COMPANIES ACT, 1956:

18. a. Material consumed consists of items of varied nature. Accordingly it is not feasible to give details as required under part

II of Schedule VI to the Companies Act, 1956.

(RS. LACS)


b. Value of Imports calculated on CIF Basis

- Capital Goods 64.55 299.31

- Trading Goods - -

Total : 64.55 299.31

c. Expenditure in Foreign Currency

- Professional Fee 73.58 38.17

- Others 26.65 28.06

Total : 100.23 66.23

d. Income in Foreign Currency

- Consultation fees 61.69 66.35

- Sponsorship received - 0.12

Total : 61.69 66.47


4 Healthcare.p65 8/19/2009, 12:31 PM290



19. Auditors Remuneration

(RS. LACS)


Audit fees (including service tax) 18.75 19.10

Reimbursement of out of pocket expenses 1.10 0.90

Total : 19.85 20.00

20. Details of utilisation of Preferential Issue Proceeds is as follows:

(RS. LACS)


(Cumulative)

Amount received on preferential allotment of shares 30000.00 30000.00

Utilisation:

Repayment of Loans 8000.68 7538.90

Working capital 1006.81 854.50

Purchase of land (including Advances) 4818.48 1080.00

New Projects 1253.94 (-)

Loan to subsidiaries 1627.84 682.02

Loan to other healthcare services provider 3730.64 688.54

Sub-total 20438.39 10843.96

Invested in Units of Mutual Fund 8355.81 19156.04

Deposit with Scheduled Bank 1205.80 -

21. Utilisation of Securities Premium account is as follows:

(RS. LACS)



Add: Premium received during the year on preferential allotment of shares - 4090.91

Less: Expenses incurred on issue of share capital - 94.61


22. Comparative Figures

Previous year’s figures have been regrouped / reclassified, wherever considered necessary, to conform to current year’s

classification.


DR. PERVEZ AHMED CEO & Managing DirectorK.K. MATHUR Director

New Delhi ARVIND KAKAR Vice President-FinanceJUNE 25, 2009 LALJI KUMAR Company Secretary


4 Healthcare.p65 8/19/2009, 12:31 PM291







Date Month Year



N I L N I L

Bonus Issue Others

N I L 5 0 0


8 6 0 2 5 1 4 8 6 0 2 5 1 4

SOURCES OF FUNDPaid-up Capital Reserve & Surplus

4 8 7 1 4 4 5 1 3 7 1 3 1 4

Secured Loans Deferred Tax Liability

2 3 5 0 8 6 0 0

Unsecured Loans

8 8 9 5


2 4 0 1 1 9 8 1 0 4 5 0 0 6


4 0 7 5 1 5 1 7 1 0 2

Accumulated Losses

1 0 7 4 0 5 7


3 1 7 4 8 5 1 2 8 5 6 2 4 9

+ - Profit /Loss before tax + - Profit /Loss after tax

3 1 8 6 0 2 4 7 6 1 1 4

Earning per share in Rs.+ - Basic Dividend Rate (%)

2 . 0 1 N I L

+ - Diluted

1 . 7 9


Product Description H E A L T H C A R E

R E L A T E D

S E R V I C E S

��

�

�

4 Healthcare.p65 8/19/2009, 12:31 PM292

MAX MEDICAL SERVICES LIMITED

(Previously MAX MEDICAL SERVICES PRIVATE LIMITED)


Your Directors are pleased to present their Fifteenth Annual Report,

along with the Audited Accounts for the financial year ended March

31, 2009.

OPERATIONS

The Company recorded an operational income of Rs. 33.03 crore

during the year 2008-09, 34% up from its previous year income of

Rs. 24.69 crore. Besides leasing of assets, this income also includes

the earnings from its construction & trading activities.

During the year under review, your Company registered a profit of

Rs. 1.42 crore as against a last year profit of Rs. 3.91 crore.

DIVIDEND

In view of the carry forward losses, your Directors do not recommend

any dividend for the year under review.

INVESTMENT

During the year under review, your Company has subscribed to

9,300 equity shares of Rs.10/- each of its 100% subsidiary, Alps

Hospital Limited, aggregating to Rs.93,000/-.


During the year under review, your Company has not accepted any

deposits from the public.


As your Company does not carry on any manufacturing activity,

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


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

not furnished herewith.


As per the provisions of Section 217(2AA) of the Companies Act,

1956, the Directors confirm that:



explanation relating to material departures;




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;





and detecting fraud and other irregularities; and


concern basis.


The Company does not have any employee who is covered under

the provisions of Section 217 (2A) of the Companies Act, 1956,

read with the Companies (Particulars of Employees) Rules, 1975.

DIRECTORS

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

Mr. Arvind Kakar and Mr. Mukesh Shivdasani are liable to retire by

rotation at the ensuing Annual General Meeting and being eligible

offer themselves for re-appointment.

Mr. Mohit Talwar and Mrs. Sujatha Ratnam were appointed as

Additional Directors of the Company on January 14, 2009 to hold

office up to the ensuing Annual General Meeting. The Company has

received notices under Section 257 of the Companies Act, 1956 from

members proposing the candidature of Mr. Mohit Talwar and Mrs.

Sujatha Ratnam for being appointed as Directors of the Company.

Mr. Analjit Singh resigned from the Board of Directors of the

Company effective January 14, 2009. The Board places on record,

its appreciation for the valuable contribution made by Mr. Analjit

Singh during his association with the Company.

AUDIT COMMITTEE

During the year under review, the Audit Committee of your Company

was reconstituted and the Committee currently comprises of Mr.

Arvind Kakar, Mr. Mukesh Shivdasani and Mr. Neeraj Basur. The

role and terms of reference of the Audit Committee covers the

areas mentioned under Section 292A of the Companies Act, 1956

besides other terms, as may be referred to it by the Board of Directors

of the Company.

SUBSIDIARY COMPANY


relating to Alps Hospital Limited, the subsidiary of your Company,

is annexed to this Report as Annexure–A.

AUDITORS




Company has obtained from them a Certificate to the effect that

their re-appointment if made, will be in conformity with the limits


For and on Behalf of the Board of Directors

New Delhi ARVIND KAKAR Director

July 23, 2009 SUJATHA RATNAM Director

Directors’ Report

5 MMSL.p65 8/24/2009, 5:24 PM295




Annex

ure

- A

STA

TEM

EN

T REG

ARDIN

G S

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ARY C

OM

PA

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S P

URSU

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T TO

SECTI

ON

212(3

) A

ND 2

12(5

) O

F TH

E C

OM

PA

NIE

S A

CT,

1956

Nam

e of

the

Subs

idar

y Com

pan

yFi

nan

cial

Yea

rH

old

ing C

om

pan

ie’s inte

rest

at

the

close

of

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Aggre

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e am

ount

of

Net

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e am

ount

of

Hold

ing

to w

hic

hFi

nan

cial

yea

r of

Subs

idar

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pan

ySubs

idar

y Com

pan

y’s

pro

fits

Subs

idar

y Com

pan

y’s

pro

fits

Com

pan

y’s

Acc

ounts

afte

r ded

uct

ing, it

s lo

sses

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-af

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ing, it

s lo

sses

or

Inte

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atre

late

vers

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o f

ar a

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om

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/per

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For

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ent

Pre

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(Rs.

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JULY

23, 2009

Direc

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5 MMSL.p65 8/24/2009, 5:24 PM296




TO THE MEMBERS OF MAX MEDICAL SERVICES LIMITED

1. We have audited the attached Balance Sheet of Max Medical

Services Limited, as at March 31, 2009, and the related Profit

and Loss Account and Cash Flow Statement for the year ended

on that date annexed thereto, which we have signed under

reference to this report. These financial statements are the

responsibility of the company’s management. Our

responsibility is to express an opinion on these financial

statements based on our audit.



























having regard to the size of the company and

the nature of its assets. Pursuant to the

programme, a portion of the fixed assets has been

physically verified by the management during the

year and no material discrepancies between the

book records and the physical count have been

noticed.












of its business.






material.




301 of the Act.




301 of the Act.

iv. In our opinion and according to the information

and explanations given to us, having regard to

the explanation that certain items purchased are

of special nature for which suitable alternative

sources do not exist for obtaining comparative

quotations, there is an adequate internal control

system commensurate with the size of the

company and the nature of its business for the

purchase of fixed assets and for the sale of goods

and services. Further, on the basis of our

examination of the books and records of the

company, and according to the information and

explanations given to us, we have neither come

across nor have been informed of any continuing

failure to correct major weaknesses in the

aforesaid internal control system.

v. In our opinion and according to the information

Auditors’ Report

5 MMSL.p65 8/19/2009, 12:31 PM297




and explanations given to us, the Company has

not entered into any contracts or arrangements

referred to in Section 301 of the Act.

vi. The company has not accepted any deposits from

the public within the meaning of Sections 58A

and 58AA of the Act and the rules framed there

under.

vii. In our opinion, the company has an internal audit

system commensurate with its size and nature of

its business.

viii. The Central Government of India has not

prescribed the maintenance of cost records under

clause (d) of sub-section (1) of Section 209 of the

Act for any of the products of the company.

















2009 more than fifty percent of its net worth and has

not incurred any cash losses in the financial year ended

on that date. The Company has not incurred cash losses

in the immediately preceding financial year.

xi. According to the records of the company examined by



any financial institution or bank as at the balance sheet

date.







xiv. In our opinion, the company is not a dealer in shares,

securities, debentures and other investments.


explanations given to us, the company has not given

any guarantee for loans taken by others from bank of

financial institutions during the year.

xvi. The Company has not taken any term loans.






xviii. The company has not made any preferential allotment of

shares to parties and companies covered in the register

maintained under Section 301 of the Act during the year.


year.


during the year.








management.











Auditors’ Report

5 MMSL.p65 8/19/2009, 12:31 PM298



























V.NIJHAWAN

Partner





Auditors’ Report

5 MMSL.p65 8/19/2009, 12:31 PM299




RUPEES


SOURCES OF FUNDSSHAREHOLDERS’ FUNDSShare Capital 1 141,425,350 141,425,350

RESERVES AND SURPLUSShare Premium 2,999,650 2,999,650

LOAN FUNDSUnsecured Loan 2 1,402,634,889 1,286,270,476

DEFERRED TAX LIABILITY (NET) 3 5,912,661 58,234,799

1,552,972,550 1,488,930,275

APPLICATION OF FUNDSFIXED ASSETS 4Gross Block 438,080,074 438,080,074Less : Accumulated Depreciation 124,596,536 95,558,413

Net Block 313,483,538 342,521,661Capital Work in Progress 13,923,525 1,190,000

327,407,063 343,711,661

INVESTMENTS 5 134,758,781 134,665,781

CURRENT ASSETS, LOANS AND ADVANCESInventories 6 30,000 -Sundry Debtors 7 547,923,097 417,188,519Cash and Bank Balances 8 5,050,319 3,132,413Other Current Assets 9 58,100,007 24,911,696Loans & Advances 10 841,218,166 786,886,867

1,452,321,589 1,232,119,495Less : CURRENT LIABILITIES AND PROVISIONS 11Current Liabilities 433,393,149 330,682,455Provisions 1,876,994 1,876,994

435,270,143 332,559,449

NET CURRENT ASSETS 1,017,051,446 899,560,046

MISCELLANEOUS EXPENDITURE 12 8,687,526 20,928,602(To the extent not written off or adjusted)

PROFIT AND LOSS ACCOUNT 65,067,734 90,064,185

1,552,972,550 1,488,930,275





V. NIJHAWAN SUJATHA RATNAM DirectorPartner ARVIND KAKAR DirectorMembership No. F 87228 ROHIT GANDHI Company Secretary

For and on behalf ofPrice WaterhouseChartered Accountants


5 MMSL.p65 8/19/2009, 12:31 PM300




RUPEES


INCOME

Income from Lease and Maintenance Activities 13 155,765,013 196,482,773

Income from construction and Trading Activities 14 110,401,049 2,412,204

Other Income 15 64,111,472 47,968,312

330,277,534 246,863,289

EXPENDITURE

Stores and Spares Consumed 16 110,401,703 2,412,204

Personnel, Administrative and Other expenses 17 51,279,532 49,395,247

Financial Expenses 18 166,883,863 151,688,257

Depreciation 4 29,038,123 29,117,682

357,603,221 232,613,390

PROFIT/(LOSS) BEFORE TAX (27,325,687) 14,249,899

Provision for Taxation

- Income Tax - 1,614,514

- Deferred Tax (Refer Note C7 on Schedule 19) (52,322,138) 2,005,850

PROFIT/(LOSS) FOR THE YEAR AFTER TAX 24,996,451 10,629,535

(LOSS) BROUGHT FORWARD FROM THE PREVIOUS YEAR (90,064,185) (100,693,720)

BALANCE CARRIED FORWARD TO THE BALANCE SHEET (65,067,734) (90,064,185)

Earning Per Share (Rs per equity share of Rs 10 each)


- Basic 1.77 0.75

- Diluted 1.77 0.75

Number of Shares used in computing Earning per Share

- Basic 14,142,535 14,142,535

- Diluted 14,142,535 14,142,535








5 MMSL.p65 8/19/2009, 12:31 PM301




RUPEES


A. CASH FLOW FROM OPERATING ACTIVITIES

Net Loss before tax and extraordinary items (27,325,687) 14,249,899

Adjustments for:

Depreciation 29,038,123 29,117,682Interest Expense 166,832,965 151,681,834Interest Income (39,574,569) (22,723,978)Miscellaneous Expenditure written off 1,076 1,076Deferred revenue expenditure written off 12,240,000 12,240,000

Operating Profit Before Working Capital Changes 141,211,908 184,566,513

Adjustments for:

Trade receivables (130,734,579) (143,768,680)Other receivables (72,935,638) 13,271,752Inventories (30,000) 2,412,204Trade payables 57,587,075 (18,528,839)

Cash Generated from Operations (4,901,234) 37,952,950

Direct taxes refunded/(paid) - Net 35,831,746 (18,425,557)

Cash From/(Used in) Operating Activities 30,930,512 19,527,393

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets - (35,010,653)Capital Work in Progress (12,733,525) 7,582,046Loan given (17,227,407) -Interest on Inter company deposits - (129,852,051)Interest Received (Revenue) 6,386,258 5,388,695Purchase of Investment (93,000) -

Cash From/(Used In) Investing Activities (23,667,674) (151,891,963)

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from Long term borrowings 116,364,413 187,990,529Interest Paid (121,709,345) (55,842,141)

Cash from/(used in) Financing Activities (5,344,932) 132,148,388

Net Increase/(Decrease) in Cash and Cash Equivalents 1,917,906 (216,181)

Cash and Cash Equivalents - Opening Balance 3,132,413 3,348,595

Cash and Cash Equivalents - Closing Balance 5,050,319 3,132,413

(1,917,906) 216,181


5 MMSL.p65 8/19/2009, 12:31 PM302




Notes:

1 The above Cash Flow statement has been prepared under the “Indirect Method” as set out in the Accounting Standard-3 on

Cash Flow Statements notified U/S 211(3C) of Companies Act 1956.

2 Cash and Cash Equivalents at the end of the year consist of Cash, Cheques in hand and balances with banks:

3 Figures in bracket indicate cash outgo.

RUPEES


Cash in Hand 15,075 20,592Balance with banks 5,035,244 3,111,821

Total 5,050,319 3,132,413







5 MMSL.p65 8/19/2009, 12:31 PM303




RUPEES


SCHEDULE-1SHARE CAPITALAUTHORISED35,000,000 (Previous year 35,000,000) Equity Shares of Rs 10/- each 350,000,000 350,000,000

350,000,000 350,000,000

ISSUED , SUBSCRIBED AND PAID UP14,142,535 (Previous year 14,142,535) Equity Share of Rs 10/- each 141,425,350 141,425,350 held by Max Healthcare Institute Limited (The Holding Company) and it’s nominees

141,425,350 141,425,350


-From Max Healthcare Institute Ltd. (The Holding Company) 1,402,634,889 1,286,270,476(Repayable on Demand)

1,402,634,889 1,286,270,476

SCHEDULE 3DEFERRED TAX LIABILITY(Refer Note C7 on Schedule 19)

Deferred Tax LiabilityOpening Balance 58,234,799 56,228,949Movement during the Year (52,322,138) 2,005,850

5,912,661 58,234,799


SCHEDULE-4

FIXED ASSETS(Refer Notes B3, B4, B5 & C6 on Schedule 19) RUPEES


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

2008 during the year 2009 2008 during the year 2009 2009 2008

TANGIBLE ASSETSPlant & Machinery (PM) 124,485,581 - - 124,485,581 18,922,816 5,913,065 - 24,835,881 99,649,700 105,562,765Medical Equipments 256,808,665 - - 256,808,665 56,942,358 18,129,179 - 75,071,537 181,737,128 199,866,307Office Equipments 22,646,532 - - 22,646,532 8,552,173 2,506,543 - 11,058,716 11,587,816 14,094,359Furniture & Fixtures 28,344,569 - - 28,344,569 8,879,118 1,550,011 - 10,429,129 17,915,440 19,465,451

INTANGIBLE ASSETSComputer Software 5,794,727 - - 5,794,727 2,261,948 939,325 - 3,201,273 2,593,454 3,532,779

TOTAL 438,080,074 - - 438,080,074 95,558,413 29,038,123 - 124,596,536 313,483,538 342,521,661

CAPITAL WORK IN PROGRESS 13,923,525 1,190,000

GRAND TOTAL 438,080,074 - - 438,080,074 95,558,413 29,038,123 - 124,596,536 327,407,063 343,711,661

Previous Year 428,189,584 9,890,490 - 438,080,074 66,440,731 29,117,682 - 95,558,413 343,711,661 371,951,689

Notes :1. Capital work in progress includes Capital Advances of Rs. 4,440,212/- (Previous year Rs. 1,190,000/-)2 Capital work in progress includes interest capitalised of Rs. 330,566/- (Previous Year Rs. Nil) .

5 MMSL.p65 8/19/2009, 12:31 PM304




RUPEES


SCHEDULE-5

INVESTMENTS(Refer Note B8 on Schedule 19)

Subsidiary, at cost(Unquoted)Alps Hospital Limited, a Subsidiary Company50,000 (Previous year 40,700) Equity Shares of Rs. 10/- each 134,758,781 134,665,781

134,758,781 134,665,781

Aggregate value of unquoted investments 134,758,781 134,665,781

CURRENT ASSETS, LOANS AND ADVANCESSCHEDULE-6INVENTORIES(Refer Note B7 on Schedule 19)

- Stock of Medical Supplies (in Transit) 30,000 -

30,000 -

SCHEDULE-7SUNDRY DEBTORS(Refer Notes C3 & C4 on Schedule 19)

(Unsecured)Debtors exceeding six months-Considered Good 447,040,370 314,112,513Other Debts-Considered Good 100,882,727 103,076,006

547,923,097 417,188,519

SCHEDULE-8CASH AND BANK BALANCESCash-in-hand 15,075 20,592Balance with Banks-In Current Accounts 5,035,244 3,111,821

5,050,319 3,132,413


Interest Receivable * 58,100,007 24,911,696

58,100,007 24,911,696

* Amounts due from subsidiary company Rs. 54,457,103/- (Previous Year Rs. 24,911,696)


5 MMSL.p65 8/19/2009, 12:31 PM305




SCHEDULE-10

LOANS AND ADVANCES(Considered good, unless otherwise stated)

(Refer Notes C3, C4, C5 & C13 on Schedule 19)

UnsecuredAdvances Recoverable in Cash or kind or value to be received 5,000 104,852Recoverable from Subsidiary Company- Loan 257,056,446 239,829,039- Others 1,127,513 1,127,513Recoverable from other Healthcare services provider-Loan 29,646,937 31,750,701-Deferred Credit 50,349,172 42,287,318-Construction Cost Recoverable 268,262,388 202,105,704-Expenses Recoverable 111,488,795 117,866,017-Security Deposits 78,300,000 78,300,000Advances to suppliers 7,294,305 -Prepaid Expenses 3,243,793 3,240,160Tax Receivable 34,443,817 70,275,563

841,218,166 786,886,867* Amounts due from subsidiary company:

For Loan Rs. 257,056,446 (Previous Year Rs. 239,829,039)

For Others Rs. 1,127,513 (Previous Year Rs. 1,127,513)

SCHEDULE-11

CURRENT LIABILITIES AND PROVISONS

CURRENT LIABILITIESSundry Creditors-Total outstanding dues of Micro Enterprise & Small Enterprise - --Total outstanding dues other than Micro Enterprise & Small Enterprise* 44,934,184 7,031,505- Acceptances 7,775,725 --Interest Accrued (to The Holding Company) 351,803,455 306,679,835-Other Liabilities 28,879,785 16,971,115

433,393,149 330,682,455

PROVISIONSProvisions for Taxation 1,876,994 1,876,994Provision for current year Income Tax - -

1,876,994 1,876,994

435,270,143 332,559,449

* Payable to Holding Company is Rs. 3,398,190/- (Previous Year Rs. Nil)

SCHEDULE-12

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


a) Deferred Revenue Expenditure 8,685,370 20,925,370b) Preliminary Expenses 2,156 3,232

8,687,526 20,928,602

RUPEES



5 MMSL.p65 8/19/2009, 12:31 PM306




RUPEES


SCHEDULE-13

INCOME FROM LEASE AND MAINTENANCE ACTIVITIES

(Refer Notes C3, C4 & C10 on Schedule 19)

Income from Lease* 97,151,867 122,801,730

Income from Maintainence of Healthcare facility ** 58,613,146 73,681,043

155,765,013 196,482,773

* Tax Deducted at Source Rs. 2,985,790/- (Previous year Rs 16,051,355/-)

** Tax Deducted at Source Rs. 1,159,703/- (Previous year Rs 1,866,499/-)

‘

SCHEDULE-14

INCOME FROM CONSTRUCTION AND TRADING ACTIVITIES


Income from Construction Activities* 71,593,539 -

Income from Trading Activities 38,807,510 2,412,204

110,401,049 2,412,204

* Tax Deducted at Source Rs.1,774,401 /- (Previous year Rs Nil)

SCHEDULE-15

OTHER INCOME


Income from Deffered Credit * 23,470,009 24,560,347

Interest

-On Loans ** 35,403,265 22,723,978

-On Tax Refund 4,171,304 683,987

Provision no longer required written back 1,066,894 -

64,111,472 47,968,312

* Tax Deducted at Source Rs. 398,755/- (Previous year Rs 3,246,681/-)

** Tax Deducted at Source Rs. 2,214,952/- (Previous year Rs 2,960,934/-)

SCHEDULE-16

CONSTRUCTION COST AND STORES CONSUMED

Cost of Trading Goods Sold 38,808,164 2,412,204

Cost of Construction Activities 71,593,539 -

110,401,703 2,412,204


5 MMSL.p65 8/19/2009, 12:31 PM307




RUPEES


SCHEDULE-17

PERSONNEL, ADMINISTRATIVE AND OTHER EXPENSES

Personnel Expenses

Salaries Wages and Bonus 2,645,792 2,432,535

Contribution to Provident and other funds 97,390 70,792

Administrative and Other Expenses

Legal and Professional 107,591 68,382

Rates and Taxes 306,064 461,111

Insurance 1,437,183 1,453,020

Donation 442,000 -

Repair and Maintenance

- Building 5,623,603 3,855,218

- Plant and Machinery 15,526,396 17,847,756

- Others 10,746,204 10,483,189

Lease Rentals 21,865 -

Foreign Exchange Fluctuation Exp. 416,530 -

Audit Fees 466,508 466,294

Advances Written off 1,190,000 -

Miscellaneous Expenditure 11,330 15,874

Deffered Revenue Expenditure Written Off 12,241,076 12,241,076

51,279,532 49,395,247

SCHEDULE-18

FINANCIAL EXPENSES

Interest on Inter Corporate Loans 166,832,965 151,681,834

Bank Charges 50,898 6,423

166,883,863 151,688,257


5 MMSL.p65 8/19/2009, 12:31 PM308




SCHEDULE-19


The Company is in the business of construction of hospitals, leasing of medical & other equipment and trading of goods to

customers.


1. Accounting Conventions

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

the applicable accounting standards notified under section 211(3C) of the Companies Act, 1956 and the relevant provisions

of the Companies Act, 1956.


a) The Company is in the business of constructing and leasing of medical and other equipments. Income from leasing

activity is recognized on straight line basis over the period of contract. Contingent lease rent is recognized based on the

occurrence of the contingency.

b) Revenue on sales of goods is recognized on the transfer of all the risk and reward of the property to purchaser subject

to reasonable certainty of sales consideration.

3. Fixed Assets

a) Fixed Assets are stated at their original cost including freight, duties, taxes and other incidental expenses relating to

acquisition and installation.

b) Expenses of revenue nature, which can be regarded as incidental and related to the fixed assets are transferred to

“Preoperative Expenditure Pending Capitalisation”. These expenses are allocated to fixed assets in the year of

commencement of the related project.

4. Depreciation

a) Depreciation is charged on the straight line method at the rates specified in schedule XIV of the Companies Act, 1956

on a prorata basis.

b) Assets costing not more than Rs 5,000/- each individually have been depreciated at 100%.

5. Borrowing Cost

Borrowing cost that are directly attributable to the acquisition, installation of the fixed assets have been capitalized in

accordance with the Accounting Standard 16 “Borrowing Cost”. Other borrowing costs are recognized as an expense in the

period in which they are incurred. Capitalization of the borrowing costs ceases when substantially all activities necessary to

prepare the qualifying assets for its intended use or sale are complete.

6. Taxation


related revenue and expenses arise. Provision for tax consists of current 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 recognized only if there is virtual certainty

that they will be realized and are reviewed for the appropriateness of their respective carrying value at each balance sheet

date.


5 MMSL.p65 8/19/2009, 12:31 PM309




7. Inventories

Inventories are valued at lower of cost or net realizable value. Cost for this purpose is calculated on a “First In First Out”

method.

8. 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.

b) Long-term investments are valued at cost. Provision for diminution is made to recognize a decline, other than temporary

in nature.

c) Current Investments are carried at lower of cost or fair value.

9. Leases

Operating Lease

The assets given under Operating lease are shown in Balance Sheet under fixed assets and depreciated on a basis consistent

with the depreciation policy of the Company. The lease income is recognized in the Profit & Loss Account on accrual basis. The

initial direct cost incurred for finalizing the lease arrangement is recognized as expense immediately in the Profit & Loss

Account.

10. Miscellaneous Expenditure

a) Preliminary expenses are amortised over a period of 10 years.

b) Deferred Revenue Expenditure includes consultancy charges for structuring the business and is being amortised over a

period of 5 years.

11. Provision and Contingencies

A provision is recognized when there is a present obligation as a result of past events and it is probable that an outflow of a


each Balance Sheet date and adjusted to reflect the current estimates.

Contingent liabilities are disclosed after an evaluation of facts and legal aspects of the matter involved.

C. NOTES TO ACCOUNTS

1. Capital Contracts

RUPEES


Estimated value of Contracts remaining to be executed 174,716,868 1,700,000

Less: Capital Advances 4,440,212 1,190,000

Net Amount 170,276,656 510,000

2. In the Financial year 2001-02, the Company had paid Non Compete fees as per the agreement, amounting to Rs. 61,200,000/-.

In accordance with the stated accounting policy, the same is being amortized over a period of five years.

3. As at December 10, 2001 the Company had entered into an agreement with a healthcare service provider to construct ahospital building. The construction, as aforesaid had been completed and the building handed over as on March 31, 2005 tothe healthcare service provider for a consideration of Rs. 243,100,018/-. The said consideration is repayable in equal installmentsover 26.5 years from the handover date.As of March 31, 2009, out of the aforesaid consideration an amount of Rs. 35,232,962/- (Previous year Rs. 26,424,722/-) hasfallen due for payment. Of which the unpaid amount has been shown under the head sundry debtors. The balance amount notdue amounting to Rs. 193,297,464/- (Previous year Rs. 202,105,704/-) has been disclosed under Loans and Advances. Inaddition, since the receipt of the consideration of Rs. 243,100,018/- is spread over 26.5 years, an income amounting toRs. 23,470,009/- (Previous year Rs. 24,560,347/-), which is receivable based on a fixed percentage of the turnover of thehealthcare service provider has been accrued and disclosed under Loans and Advances as deferred credit.The Company has started to construct new building in current financial year, and progress billing for the said building has

been made amount to Rs. 74,964,924/- up to 31st March’2009.


5 MMSL.p65 8/19/2009, 12:31 PM310




4. The Company had entered into a lease 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. 97,151,867/- (Previous year

Rs. 122,801,730/-) has been accrued as lease rentals for the current year. The lease rent is contingent on turnover, and

therefore cannot be quantified for any future periods. The amount outstanding as at March 31, 2009 amounting to

Rs. 292,245,736/- (Previous year Rs. 232,180,445/-) has been disclosed under Sundry Debtors.

5. Performance Guarantee of Rs. 78,300,000/- had been deposited with the healthcare service provider, in earlier years, as per

the agreements mentioned in point 3 and 4 above and disclosed under Loans & Advances.

6. The Movable Fixed Assets of the company are hypothecated by way of a first charge against loan taken by the holding

company, Max Healthcare Institute Limited.

7. The movement of provision for deferred taxes is given below:

(RUPEES)

Particulars Opening as at Addition Deletion/ Closing as at



Depreciation related 51,124,158 1,749,894 - 52,874,052

Preliminary & Deferred Revenue Expenses 8,600,856 - (4,160,741) 4,440,115

Unabsorbed Depreciation - - (49,911,291) (49,911,291)

Reversal due to Tax Rate (1,490,215) - - (1,490,215)

Total 58,234,799 1,749,894 54,072,032 5,912,661

Deferred Tax assets are created to the extent of their realisability.

8. Earning Per Share:


a) Profit after tax (Rs.) 24,996,451 10,629,535

b) Weighted Average Number of Equity Shares 14,142,535 14,142,535

c) Earning Per Share (Rs.) 1.77 0.75

d) Number of Shares Outstanding at the beginning of the Year 14,142,535 14,142,535

e) Number of Shares Outstanding at the end of the Year 14,142,535 14,142,535

9. Related Parties (as identified by the Management) are classified as under

Ultimate Holding Company Max India Limited

Holding Company Max Healthcare Institute Limited

Subsidiary ALPS Hospital Limited



Neeman Medical International Inc., USA, Max UK Ltd. UK, Pharmax Corporation Ltd.,

Max Neeman Medical International Ltd., Max HealthStaff International Ltd.


5 MMSL.p65 8/19/2009, 12:31 PM311




Summary of significant related party transactions (as identified by management) carried out in ordinary course of

business are as follows:

RUPEES

S.No Particulars Max Healthcare ALPS Hospital

Institute Limited Private Limited

(Holding Company) (Subsidiary Company)

1. Loan Taken 116,364,413 -

(187,990,529) (-)2. Purchase of Investment - 93,000

(-) (-)3. Expenses : Services Received 3,398,190 -

(2,323,094) (-)4. Sales 1,500,315 -

(-) (-)5. Loan Given - 17,227,407

(-) (129,901,380)6. Interest Expenses/Capitalised* 167,163,531 -

(151,681,834) (-)7. Interest Income - 31,697,398

(-) (22,723,978)8. Amount Outstanding

a. Against Loan taken 1,402,634,889 -

(1,286,270,476) (-)b. Sundry Creditors Balance 3,398,190 -

(-) (-)c. Interest Payable 351,803,455 -

(306,679,835) (-)d. Against Loan Given - 257,056,446

(-) (239,829,039)e. Interest Receivable - 54,457,103

(-) (24,911,696)f. Other Receivable 367,203 1,127,513

(-) (1,127,513)


* Of which the interest capitalized amount of Rs. 330,566/-(Previous Year Rs. Nil) payable to Max Healthcare Institute Ltd.

10. Leases

Accounting for leases has been made in accordance with Accounting Standard-19 issued by the Institute of CharteredAccountants of India. Following are the details of lease transactions for the year:

Finance Lease

The Company has not entered into any finance lease agreement.

Operating Lease

Income from lease rentals recognized for the year is Rs. 97,151,867/- (Previous Year Rs. 122,801,730/-) As mentioned above,the company has entered into an agreement for supply of equipment on lease. The lease rent is entirely contingent onturnover, hence cannot be quantified for any future periods (Refer point C 4 above).Details of Assets given under operating Lease are as under:

(RUPEES)

Particulars Gross Carrying Depreciation Accumulated

Amount for the Year Depreciation

Assets 438,080,074 29,038,124 124,596,537(438,080,074) (29,117,682) (95,558,413)



5 MMSL.p65 8/19/2009, 12:31 PM312




11. As the Company operates in a single business segment of construction of hospitals and leasing of medical & other equipment,

the provisions of Accounting Standard 17 on Segment Reporting is not applicable to the Company.

The Company operates in single geographical segment.

12. Auditors Remuneration:

(RUPEES)

Particulars Current Year Previous year

Audit Fees* 441,200 449,440

Out of Pocket Exp.* 16,854 16,854

Total 458,054 466,294

* Including Service Tax and Education Cess

13. During the previous year, ALPS Hospital Private Limited (the subsidiary company) has set up a multi specialty healthcare

facility at Gurgaon on July 2, 2007. To fund the said project, an amount of Rs. 17,227,407/- has been given to the subsidiary

as unsecured loan.

14. The Company has initiated the process of identifying the Micro, Small and Medium Enterprises as defined under the “Micro,


such creditor covered under the said act.

The previous year figures in relation to disclosures for small scale industrial (SSI) undertakings have been reclassified and

grouped with other creditors.

15. Additional Information pursuant to the provisions of paragraphs 3 of Part – II of Schedule VI of the Companies Act, 1956.

Purchase, Sales and Stock of Goods Purchased for Sale

(As certified by the Management)

Sl. No Description Opening Stock Purchases Sales Closing Stock

Qty. Rs. Qty. Rs. Qty. Rs. Qty. Rs.

1 Stunt - - 329 20,653,792 328 20,623,792 1 30,000

(-) (-) (-) (-) (-) (-) (-) (-)

2 Medical Equipment - - 23 9,633,891 23 9,633,237 - -

(-) (-) (-) (-) (-) (-) (-) (-)

3 IT Equipment - - 1 8,550,481 1 8,550,481 - -

(-) (-) (-) (-) (-) (-) (-) (-)

4 Others - - - - - - - -

(-) (2,412,204) (-) (-) (-) (2,412,204) (-) (-)


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

17. Other disclosure requirements of Schedule VI to the Companies Act, 1956 are not applicable to the Company.


SUJATHA RATNAM DirectorNew Delhi ARVIND KAKAR DirectorJUNE 24, 2009 ROHIT GANDHI Company Secretary


5 MMSL.p65 8/19/2009, 12:31 PM313








Date Month Year



N I L N I L

Bonus Issue Others

N I L N I L


1 5 5 2 9 7 3 1 5 5 2 9 7 3


1 4 1 4 2 5 3 0 0 0


N I L 1 4 0 2 6 3 5


5 9 1 3


3 2 7 4 0 7 1 3 4 7 5 9


1 0 1 7 0 5 1 8 6 8 8

Accumulated Losses

6 5 0 6 8


3 3 0 2 7 8 3 5 7 6 0 3

+ - Profit/Loss before Tax + - Profit/Loss after Tax

2 7 3 2 6 2 4 9 9 6

+ - Earning per Share in Rs. Dividend Rate (%)Basic and Diluted N I L

1 . 7 7


Product Description C O N S T R U C T I O N

L E A S I N G &

T R A D I N G

√ √

√

5 MMSL.p65 8/19/2009, 12:31 PM314

ALPS HOSPITAL LIMITED

(Previously ALPS HOSPITAL PRIVATE LIMITED)


Your Directors are pleased to present their Twentieth Annual Report


31, 2009.

OPERATIONS

During the second year of operations of your Company, the income

from healthcare services increased by 120% from Rs.14 crore in

2007-08 to Rs.31 crore in 2008-09. The Company has witnessed a

turn around in Operating profits or profit before depreciation,

interest and tax (PBDIT), from a loss of Rs.1.50 crore in 2007-08 to

a profit of Rs.1.4 crore in 2008-09.

The highlights of operations in 2008-09 are given below:

• The Company performed over 180 Ortho-surgeries, over 700

Obstetrics & Gynaecology surgeries and over 1070 other

surgeries and procedures.

• The average number of operational beds at hospital increased

from 53 in 2007-08 to 74 in 2008-09, with an average

occupancy gone up from 41% to 45%.

• Number of patient episodes (measured by number of invoices

issued to a patient during any period) recorded over 2.45 lacs

in 2008-09.

DIVIDEND

In view of accumulated losses, your Directors do not recommend


ISSUANCE OF FURTHER SHARES

During the year under review, your Company issued and allotted

9,300 Equity Shares of Rs. 10/- each to Max Medical Services

Limited, on Right basis. With the aforesaid allotment, the paid up

Share Capital of your Company stood increased to Rs. 5,00,000/-.

CONVERSION OF THE COMPANY INTO A PUBLIC LIMITED

COMPANY

As informed last year, your Company was converted into a public

Company. The Registrar of Companies, National Capital Territory

of Delhi and Haryana had issued a fresh Certificate of Incorporation

on February 23, 2009 reflecting the change of name of the Company

as Alps Hospital Limited.


During the year under review, your Company has not accepted any

deposits from the public.





as follows:

A. Conservation of Energy :



incorporating latest technology and regular maintenance.

B. Research & Development and Technology Absorption : Nil


(Rs)

For the For the


March 31, 2009 March 31, 2008

i) Foreign Exchange Earnings Nil Nil



- Capital Goods Nil Nil

- Trading Goods Nil Nil

Others Nil Nil Nil Nil


















concern basis.

Directors’ Report

6 ALPS.p65 8/19/2009, 12:31 PM317





The Company does not have any employee who is covered under



DIRECTORS


Mr. Arvind Kakar is liable to retire by rotation at the ensuing Annual

General Meeting and being eligible, offers himself for

re-appointment.

AUDITORS




Company has obtained from them a Certificate to the effect, that




New Delhi ARVIND KAKAR Director

July 23, 2009 NEERAJ BASUR Director

Directors’ Report

6 ALPS.p65 8/19/2009, 12:31 PM318




TO THE MEMBERS OF ALPS HOSPITAL LIMITED

1. We have audited the attached Balance Sheet of Alps Hospital

Limited as at March 31, 2009, and the related Profit and Loss

Account and Cash Flow Statement for the year ended on that

date annexed thereto, which we have signed under reference

to this report. These financial statements are the responsibility

of the company’s management. Our responsibility is to express

an opinion on these financial statements based on our audit.



























having regard to the size of the company and the

nature of its assets. Pursuant to the programme,

a portion of the fixed assets has been physically

verified by the management during the year and

no material discrepancies between the book

records and the physical count have been noticed.












of its business.






material.




301 of the Act.




301 of the Act.








for the purchase of fixed assets and for the sale of goods

and services. Further, on the basis of our examination

of the books and records of the company, and according






explanations given to us, the Company has not entered

into any contracts or arrangements referred to in Section

301 of the Act.

vi. The company has not accepted any deposits from the



Auditors’ Report

6 ALPS.p65 8/19/2009, 12:31 PM319




vii. In our opinion, the company has an internal audit system























incurred cash losses in the financial year ended on that

date and in the immediately preceding financial year.

xi. According to the records of the company examined by us

and the information and explanation given to us, the

company has not defaulted in repayment of dues to any

financial institution or bank as at the balance sheet date.







xiv. In our opinion, the company is not a dealer in shares,

securities, debentures and other investments


explanations given to us, the company has given

guarantee for loans taken by other healthcare services

provider. However, this is not considered prejudicial by

the company to its interests.

xvi. In our opinion, and according to the information and


any guarantee for loans taken by others from bank of

financial institutions during the year






xviii. The company has not made any preferential allotment



the year.


year.


during the year.








management.
















Auditors’ Report

6 ALPS.p65 8/19/2009, 12:31 PM320



















loss for the year ended on that date; and



V.NIJHAWAN

Partner





Auditors’ Report

6 ALPS.p65 8/19/2009, 12:31 PM321




RUPEES


SOURCES OF FUNDSSHAREHOLDERS’ FUNDSShare Capital 1 500,000 407,000

LOAN FUNDSUnsecured Loan 2 427,946,000 422,682,307

428,446,000 423,089,307

APPLICATION OF FUNDSFIXED ASSETS 3Gross Block 462,235,202 440,961,118Less: Depreciation 44,108,990 21,253,596

Net Block 418,126,212 419,707,522Capital Work In Progress 682,554 4,380,245

418,808,766 424,087,767CURRENT ASSETS, LOANS AND ADVANCES 4Inventories 20,304,192 17,811,635Sundry Debtors 19,992,469 11,715,687Cash and Bank Balances 13,664,314 7,613,933Loans and Advances 8,379,378 4,499,756

62,340,353 41,641,011Less : CURRENT LIABILITIES AND PROVISIONS 5Current Liabilities 172,473,664 106,218,994Provisions 1,364,257 661,903

173,837,921 106,880,897

NET CURRENT ASSETS (111,497,568) (65,239,886)


428,446,000 423,089,307





V. NIJHAWAN ARVIND KAKAR DirectorPartner NEERAJ BASUR DirectorMembership No. F 87228



6 ALPS.p65 8/19/2009, 12:31 PM322




RUPEES


INCOME

Income from Healthcare Services 6 306,915,563 139,262,936

Other Income 7 1,291,007 479,031

308,206,570 139,741,967

EXPENDITURE

Stores and Spares Consumed 8 61,928,506 30,612,196

Personnel, Operating and Administrative 9 231,784,948 124,238,961


Depreciation 3 22,855,394 21,253,596

364,508,467 203,032,576

(LOSS) BEFORE TAXATION (56,301,897) (63,290,609)

Tax Expense 11 591,479 390,534

(LOSS) AFTER TAXATION (56,893,376) (63,681,143)

(LOSS) BROUGHT FORWARD (64,241,426) (560,283)

BALANCE CARRIED FORWARD TO BALANCE SHEET (121,134,802) (64,241,426)

Earning Per Share (Rs per equity share of Rs 10/- each)(Refer Note C6 on Schedule 12)

- Basic and Diluted (1,307.81) (1,564.65)

No. of Shares used in computing earning per share

- Basic and Diluted 43,503 40,700





V. NIJHAWAN ARVIND KAKAR DirectorPartner NEERAJ BASUR DirectorMembership No. F 87228



6 ALPS.p65 8/19/2009, 12:31 PM323




RUPEES

Schedule For the year ended For the year endedMarch 31, 2009 March 31, 2008

A. CASH FLOW FROM OPERATING ACTIVITIESNet (Loss) before tax and extraordinary items (56,301,897) (63,290,609)Adjustments for:Depreciation 22,855,394 21,253,596Interest Expense 46,318,855 26,151,171Interest Income (51,843) (6,518)Provision for Doubtful Debts 1,377,115 -Provision for Leave encashment and Gratuity 739,630 605,149

Operating Profit Before Working Capital Changes 14,937,254 (15,287,211)Adjustments for:Trade receivables (9,653,896) (11,715,687)Other receivables (3,797,488) (3,053,940)Inventories (2,492,557) (17,811,635)Trade payables 33,265,737 58,153,319Other payables - 6,541,437

Cash Generated From Operations 32,259,050 16,826,283

Direct taxes refunded/(paid) - Net (710,890) -FBT( Paid) - (333,000)Direct taxes refunded/(paid) - Net - (64,341)

Cash From / (Used in) Operating Activities 31,548,160 16,428,942B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets (21,140,283) (310,082,013)Capital Work in Progress 4,380,245 80,895,851Increase in Preoperative expense - 25,612,867Interest Received (Revenue) 51,843 6,500Finance Lease Rent Payment (12,780,068) -

Cash From/ (Used In) Investing Activities (29,488,263) (203,566,795)C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from Long term borrowings 17,320,407 194,299,659Interest Paid (6,866,283) -Interest on Finance Lease (6,463,640) -

Cash From/ (Used In) Financing Activities 3,990,484 194,299,659

Net Increase/(Decrease) in Cash and Cash Equivalents 6,050,381 7,161,806

Cash and Cash Equivalents - Opening Balance 7,613,933 452,127Cash and Cash Equivalents - Closing Balance 13,664,314 7,613,933Notes:1 The above Cash Flow statement has been prepared under the “Indirect Method” as set out in the Accounting Standard-3 on

Cash Flow Statements notified U/S 211(3C) of Companies Act 1956.2 Cash and Cash Equivalents at the end of the year consist of Cash, Cheques in hand and balances with banks.

RUPEES


Cash in Hand 539,719 641,785Fixed Deposits 1,500,000 100,000Balance with banks 11,624,595 6,872,148

Total 13,664,314 7,613,933



The Schedules referred to above form an integral part of the For and on behalf of the Board of DirectorsCash Flow StatementThis is the Cash Flow Statement referred to in our report of even dateV. NIJHAWAN ARVIND KAKAR DirectorPartner NEERAJ BASUR DirectorMembership No. F 87228For and on behalf ofPrice WaterhouseChartered AccountantsGurgaon New DelhiJUNE 24, 2009 JUNE 24, 2009

6 ALPS.p65 8/19/2009, 12:31 PM324




RUPEES


SCHEDULE-1SHARE CAPITALAUTHORISED1,250,000 (Previous year 1,250,000) Equity Shares of Rs 10/- each 12,500,000 12,500,000

12,500,000 12,500,000ISSUED, SUBSCRIBED AND PAID UP50,000 (Previous year 40,700) Equity Share of Rs 10/- each 500,000 407,000- 50,000 Equity Shares (Previous year 40,700 Equity Shares) areheld by Max Medical Services Limiited, the holding company and it’s nominees.

500,000 407,000

SCHEDULE-2LOAN FUNDS(Refer Note C10 on Schedule 12)

UNSECURED LOANS-From Max Medical Services Limited, Holding Company * 257,056,446 239,829,039-From Max Healthcare Institute Limited, 65,275,962 64,459,608 Holding company of Max Medical Services Limited *Finance Leased Assets Obligation 105,613,592 118,393,660

427,946,000 422,682,307

* Repayable on Demand


SCHEDULE-3

FIXED ASSETS(Refer Notes B3, B4, B5,B9, C2 & C11 on Schedule 12) RUPEES


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

2008 2009 2008 2009 2009 2008

Building 196,250,612 8,568,648 - 204,819,260 2,243,352 3,310,038 - 5,553,390 199,265,870 194,007,260Plant & Machinery 91,032,647 3,003,373 - 94,036,020 2,945,332 4,590,299 - 7,535,631 86,500,389 88,087,315Furniture & Fixtures 14,638,894 2,561,438 - 17,200,332 4,201,209 1,092,182 - 5,293,391 11,906,941 10,437,685Office Equipments & Computers 4,212,640 480,519 - 4,693,159 369,402 560,746 - 930,148 3,763,011 3,843,238Medical Equipments 8,047,900 2,593,813 - 10,641,713 408,521 658,384 - 1,066,905 9,574,808 7,639,379

SUB TOTAL (A) 314,182,693 17,207,791 - 331,390,484 10,167,816 10,211,649 - 20,379,465 311,011,019 304,014,877

LEASED ASSETSTangible AssetsPlant & Machinery 13,152,056 1,400,000 - 14,552,056 927,988 1,317,949 - 2,245,937 12,306,119 12,224,068Furniture & Fixtures 9,955,915 451,984 - 10,407,899 2,989,109 752,852 - 3,741,961 6,665,938 6,966,806Office Equipments & Computers 10,201,270 - - 10,201,270 1,074,511 1,431,732 - 2,506,243 7,695,027 9,126,759Medical Equipments 91,336,924 2,214,308 - 93,551,232 5,911,959 8,877,510 - 14,789,469 78,761,763 85,424,965Vehicles 1,221,133 - - 1,221,133 72,710 116,008 - 188,718 1,032,415 1,148,423Intangible AssetsComputer Software 911,128 - - 911,128 109,503 147,694 - 257,197 653,931 801,625

SUB TOTAL (B) 126,778,426 4,066,292 - 130,844,718 11,085,780 12,643,745 - 23,729,525 107,115,193 115,692,646

TOTAL ( A) + ( B) 440,961,119 21,274,083 - 462,235,202 21,253,596 22,855,394 - 44,108,990 418,126,212 419,707,523

Capital WIP 682,554 4,380,245

GRAND TOTAL 418,808,766 424,087,768

Notes :1. Capital work in progress includes Capital Advances of Rs. 6,82,554 (Previous year Rs. 1,646,848)2 Additions include interest capitalised of Rs. Nil (Previous year Rs. 10,784,866) and other preoperative expenses capitalised Rs. Nil (Previous year Rs. 25,259,234)

6 ALPS.p65 8/19/2009, 12:31 PM325




RUPEES


SCHEDULE-4


A. CURRENT ASSETS

INVENTORIES

(Refer Notes B6 on Schedule 12)

Stock of Medicines and Consumables 10,933,025 7,812,050

Medical and Surgical Instruments 9,371,167 9,999,585

20,304,192 17,811,635

Sundry Debtors

(Unsecured)

Debtors exceeding Six Months

-Considered Good 1,503,278 383,095

-Considered Doubtful 1,377,115 -

Less : -

Provision for Doubtful Debts (1,377,115) -

Other Debts

-Considered Good 18,489,191 11,332,592

19,992,469 11,715,687

Cash and Bank Balances

Cash-in-hand 539,719 641,785

Balance with Scheduled Banks

-In Current Accounts 11,524,595 6,872,148

-In Margin Accounts 100,000 100,000

-In FDR Accounts 1,500,000 -

13,664,314 7,613,933

B. LOANS AND ADVANCES

(Considered good, unless otherwise stated)

Unsecured

Tax Deducted at Source 774,451 63,561

Interest Accured but not Due 36,678 695

Security Deposit 1,955,876 2,015,124

Staff Advances 44,214 75,170

Prepaid Expenses 2,259,765 624,263

Income Accrued 2,624,933 477,115

Other Advances 683,461 1,243,828

8,379,378 4,499,756


6 ALPS.p65 8/19/2009, 12:31 PM326




SCHEDULE-5

CURRENT LIABILITIES AND PROVISIONS

A. CURRENT LIABILITIES

(Refer Notes B10 & C8 on Schedule 12)

Sundry Creditors

-Total outstanding dues of Micro & Small Enterprises - -

-Total outstanding dues of other than Micro Enterprise & Small Enterprises* 102,571,719 67,344,240

Advance from Customers 2,169,033 856,032

Interest Accured but not Due** 62,614,920 29,625,988

Other Liabilities 5,117,992 8,392,734

172,473,664 106,218,994

B. PROVISIONS

(Refer Notes B7, B8 & C8 on Schedule 12)

Leave encashment 1,132,424 542,485

Gratuity 212,355 62,664

Provision for Fringe Benefit Tax 981,233 389,754

Less : Advance Fringe Benefit Tax (961,755) 19,478 (333,000) 56,754

1,364,257 661,903* Payable toMax Medical Services Limited , Holding Company , Rs. 11,27,513/- ( Previous year Rs. 11,27,513/-)Max Healthcare Institute Limited, Holding Company of Max Medical Service Limited Rs. 72,511,421/-(Previous year Rs. 40,232,208/-)** Payable toMax Medical Services Limited , Holding Company , Rs. 29,545,407/- ( Previous year Rs. 24,911,695/-)Max Healthcare Institute Limited, Holding Company of Max Medical Service Limited Rs. 8,157,818/-

(Previous year Rs. 4,714,293/-)

RUPEES

For the year ended For the year endedMarch 31, 2009 March 31, 2008

SCHEDULE-6

INCOME FROM HEALTHCARE SERVICES

Revenue From Hospital 291,275,873 132,915,615

Less : Discount (4,260,969) 287,014,904 (1,788,053) 131,127,562

Trading Sales :

- Drugs, Pharmaceuticals and Medical Supplies 19,900,659 8,135,374

306,915,563 139,262,936

RUPEES



6 ALPS.p65 8/19/2009, 12:31 PM327





RUPEES


SCHEDULE - 7

OTHER INCOME

Interest on Bank Deposits 51,843 6,518

Miscellaneous Income 1,160,000 472,513

Provision no longer required written back 79,164 -

1,291,007 479,031

SCHEDULE-8

STORES AND SPARES CONSUMED

Consumption of Medical Consumables 46,755,447 24,275,137

Cost of Traded goods sold

- Drugs, Medicines and Consumables 15,173,059 6,337,059

61,928,506 30,612,196

SCHEDULE-9


A. PERSONNEL

(Refer Notes B8 & C8 on Schedule 12)

Salaries 51,477,073 28,094,381

Contribution to Provident and Other Funds 2,140,425 1,180,006

Recruitment 150,074 246,890

Staff Welfare 4,210,281 3,106,845

57,977,853 32,628,122

B. OPERATING AND ADMINISTRATIVE EXPENSES(Refer Note C10(b) on Schedule 12)

Professional and Consultancy Fees 71,448,232 36,416,565Outside Lab Investigations 14,399,861 4,838,193Patient Catering Expenses 4,818,556 1,753,143Rent 282,679 145,788Lease Rentals 4,800,000 3,744,000Insurance 1,147,147 850,883Rates and Taxes 1,215,262 705,352Repairs and Maintenance- Building 1,819,248 314,320- Plant and Machinery 10,729,047 2,933,717- Others 1,259,259 637,491Facility Maintenance Expenses 18,100,653 14,376,230Watch and Ward 3,355,448 1,927,322Power and Fuel 14,544,000 10,681,389Printing and Stationery 3,293,475 2,513,626Travelling and Conveyance 1,562,540 1,182,804Communication 1,747,382 1,213,686Provision for Doubtful Debts 1,377,115 -

6 ALPS.p65 8/19/2009, 12:31 PM328





Legal and Professional Charges 742,505 519,544Service Charge 15,182,365 5,061,800Advertisement and Publicity 1,468,753 761,876Equipment Hiring Charges 165,191 544,040Charity and Donation 278,000 -Miscellaneous Expenses 70,377 489,070

Total 173,807,095 91,610,839

TOTAL ((A) + (B)) 231,784,948 124,238,961

SCHEDULE-10FINANCIAL EXPENSES(Refer Notes B9(a) & C10(a) on Schedule 12)

Interest on:Inter Corporate Loan 39,855,215 24,672,937On Finance Lease 6,463,640 1,478,234

Bank Charges 1,620,764 776,652

47,939,619 26,927,823

SCHEDULE - 11TAX EXPENSE(Refer Notes B7 & C5 on Schedule 12)

Fringe Benefit Tax 591,479 389,754Income tax for earlier year - 780

591,479 390,534

RUPEES


SCHEDULE-9 (Contd.)

6 ALPS.p65 8/19/2009, 12:31 PM329




SCHEDULE – 12


The financials of the Company include the performance of a hospital launched in the previous year. Healthcare facilities have long

gestation periods, ranging from three to five years from the commencement of its operations and accordingly require significant

cash outlay.


1. Accounting Convention

The financial statements are prepared on an accrual basis to comply in all material aspects with all the applicable accounting

principles in India, the applicable accounting standards notified under section 211(3C) of the Companies Act, 1956 and the

relevant provisions of the Companies Act, 1956.


a. Revenue from Hospital is recognised on the performance of related services and includes services for patients undergoing

treatment and pending for billing.

b. Revenue from trading sales is recognised on delivery of goods.

3. Fixed Assets

a. Fixed Assets are stated at their original cost including freight, duties, taxes and other incidental expenses relating to

acquisition and installation.

b. 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 depreciation.

c. The assets taken on Finance Lease has been capitalised in accordance with the Accounting Standard 19 on “Accounting

for Leases”.

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 on “Borrowing Cost”,. Interest on working capital

is charged to Profit and Loss Account.

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) Assets acquired on Finance Lease are depreciated over the period of Lease term or at rates prescribed under Schedule

XIV to the Companies Act, 1956, whichever is higher.

c) Assets costing not more than Rs. 5,000/- each individually have been depreciated at 100%.

6. Inventories

Inventories are valued at lower of cost or net realisable value. Cost for this purpose is calculated on a ‘First In First Out’ method.

7. Taxation









prevailing enacted or substantially enacted regulations. Deferred tax assets are recognized only if there is virtual certainty

that they will be realized and are reviewed for the appropriateness of their respective carrying value at each balance sheet date.


6 ALPS.p65 8/19/2009, 12:31 PM330




8. Employee Benefits

a) Gratuity

In accordance with the Payment of Gratuity Act, 1972, the Company provides gratuity, a benefit plan (the “Gratuity

Plan”) covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement,

death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the

tenure of employment. The Company has made a provision of Gratuity for its employees, based on the actuarial valuation

made by an independent actuary as at the Balance Sheet date.

b) Provident Fund

Eligible employees receive benefit from Provident Fund, which is a defined contribution plan. The Company and the

employees make monthly contribution equal to a specified percentage of the covered employee salary. The Company

makes contribution to the Government’s Provident Fund.

c) Leave Encashment

Liability in respect for Leave encashment is made based on the actuarial valuation made by an independent actuary as

at the Balance Sheet date.

9. Leases

a) Finance Lease

The Assets acquired under Finance Lease are recognised as an assets and a liability at the lower of the fair value of the

leased assets at the inception of the lease and the present value of minimum lease payments. Lease payments are

apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated

to periods during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the

liability and the charge to Profit and Loss Account.

b) Operating Lease

Lease Rentals accrued under Operating Lease arrangement are charged to Profit and Loss Account on a straight line

basis over the period of the lease.

10. Provisions and Contingencies

A provision is recognized when there is a present obligation as a result of past event, it is probable that an outflow of a


each Balance Sheet date and adjusted to reflect the current tax estimate.

C. NOTES TO THE ACCOUNTS

1. Contingent Liabilities

RUPEES


Bank Guarantees 16,00,000 100,000

2. Capital Commitments

RUPEES


Estimated amount of contracts remaining to be executed on

capital account and not provided for 682,554 4,382,915

Less: Capital Advances 682,554 1,646,848

Balance Value of Contracts NIL 2,736,067

3. The company has in its favour a sub lease for a plot of land in Gurgaon, for an initial period of 97 years, which can be further

renewed for two terms of 97 years each. The plot of land measures 1.23 acres, and the designated usage is for healthcare

facility.

4. During the previous year, the company has entered into a long term service agreement with Max Healthcare Institute Limited,

for availing services in the nature of medical operations & non medical operations.


6 ALPS.p65 8/19/2009, 12:31 PM331




5. The movement of provision for deferred tax is given below:

RUPEES

Particulars Opening as at Addition Deletion/ Closing as at



Depreciation related 7,967,559 7,522,370 - 15,489,929

Grand Total (A) 7,967,559 7,522,370 - 15,489,929

Deferred Tax Asset

Leased Assets related (35,749,029) 7,855,958 (36,183,169) (64,076,240)

Deduction u/s 43B of the Income Tax Act (203,857) (637,208) - (841,065)

Grand Total (B) (35,952,886) 7,218,750 (36,183,169) (64,917,305)

Net Deferred Tax Liability/ (Assets)(A+B) (27,985,325) 14,741,120 (36,183,169) (49,427,374)

Less: Valuation Allowance (49,427,374)

Net Deferred Tax Liability/ (Assets) NIL

In view of no virtual certainty, the above Deferred Tax Asset is not recognised. Deferred Tax Asset are created to the extent

of their realisability.

6. Earning Per Share:



(Loss) after tax (Rs.) (56,893,376) (63,681,143)

Weighted Average number of Equity Shares 43,503 40,700

Earning Per Share (Rs.) (1,307.81) (1,564.65)

Equity Shares Outstanding at the beginning of the year (No.) 40,700 40,700

Equity Shares Outstanding at the end of the year (No.) 50,000 40,700

7. Micro, Small and Medium Enterprises

The Company has initiated the process of identifying the Micro, Small and Medium Enterprise as defined under the “Micro,


creditor covered under the said act.

The previous year figures in relation to disclosures for small scale industrial (SSI) undertakings have been reclassified and

grouped with other creditors.

8. Gratuity and other post-employment benefit plans:

The following tables summaries 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.

Profit and Loss account


RUPEES


Current Year Previous Year Current Year Previous Year

Current service cost 147,161 62,664 810,185 542,485

Interest cost on benefit obligation 5,013 — 43,399 —

Expected return on plan assets — — — —

Benefit Paid — — (3,55,740) (54,582)

Net actuarial( gain) / loss recognised in the year (2,483) — 92,095 54,582

Past service cost 62,664 — 542,485 —

Net benefit expense 212,355 62,664 1,132,424 542,485


6 ALPS.p65 8/19/2009, 12:31 PM332




Balance sheet

Details of Provision for gratuity and Leave Encashment Benefits.

RUPEES



Defined benefit obligation 212,355 62,664 1,132,424 542,485

Fair value of plan assets — — — —

Less: Unrecognised past service cost — — — —

Plan asset / (liability) (212,355) (62,664) (1,132,424) (542,485)

Changes in the present value of the defined benefit obligation are as follows:

RUPEES



Opening defined benefit obligation 62,664 — 542,485 —

Interest cost 5,013 — 43,399 —

Current service cost 147,161 62,664 810,185 5,42,485

Benefits paid — — (355,740) (54,582)

Actuarial (gains) / losses on obligation (2,483) — 92,095 54,582

Closing defined benefit obligation 212,355 62,664 1,132,424 5,42,485




% % % %

Investments with insurer — — — —

The principal assumptions used in determining gratuity and leave encashment benefit obligations for the Company’s plans are

shown below:



% % % %

Discount rate 7.8 8 7.8 8

Expected rate of return on assets — — — —

Employee turnover — — — —

Healthcare cost increase rate — — — —

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.


6 ALPS.p65 8/19/2009, 12:31 PM333





RUPEES



Defined benefit obligation 212,388 62,664 1,132,424 542,485

Plan assets — — — —

Surplus / (deficit) — — — —

Experience adjustments on plan liabilities — — — —

Experience adjustments on plan assets — — — —

9. Segment Reporting

As the Company operates in a single business segment of Healthcare services, the provisions of Accounting Standard 17 on

“Segment Reporting” are not applicable to the Company.

10 Leases

a) Finance Lease

The company has taken on Finance Lease assets, having an aggregate value of Rs. 130,844,718 which has been reflected

in the financial statements in compliance with Accounting Standard 19 on “Accounting for Leases”. The same have been

depreciated at rates prescribed under Schedule XIV to the Companies Act, 1956, whichever is higher. The total minimum

lease payments and maturity profile of finance leases at the Balance Sheet date, the element of interest included in

such payments , and the present value of the minimum lease payments as of March 31,2009 are as follows :

RUPEES

Particulars Total Minimum Interest included Present Value of

Lease Payments in Minimum Minimum Lease

outstanding Lease Payments Payment

Not Later than One Year 29,050,000 11,201,906 17,848,094

(23,310,000) (6,463,640) (16,846,360)

Later than One Year but not later than Five Years 138,502,000 81,200,381 57,301,619

(131,789,000) (68,115,729) (63,673,271)

Later than Five Years 107,289,000 82,187,439 25,101,561

(143,052,000) (106,473,997) (36,578,003)

Total 274,841,000 174,589,726 100,251,274

(298,151,000) (181,053,366) (117,097,634)


b) Operating Lease

During the accounting year 2007-08 the company has taken on Operating Lease, Medical Equipments having an aggregate

value of Rs. 66,044,164. Lease rental of Rs 4,800,000 has been charged to revenue and the future obligation for lease

rental for the same, amounts to Rs. 1,200,000.

Future minimum lease payments and the payment profile of non cancelable operating leases are as follows :

RUPEES


March 31, 2009 March 31,2008

Not later than One Year 1,200,000 4,800,000

Later than One Year not later than Five years — 1,200,000

Later than Five Years — —

Total 1,200,000 6,000,000


6 ALPS.p65 8/19/2009, 12:31 PM334




11 Related Parties (as identified by the Management) are classified as:

Ultimate Holding Company Max India Limited

Holding Company Max Medical Services Limited, Max Healthcare Institute Limited (Holding Company

for Max Medical Services Limited) .



Neeman Medical International Inc., USA, Max UK Ltd. UK, Pharmax Corporation Ltd.,

Max Neeman Medical International Ltd., Max HealthStaff International Ltd.

Enterprises over which key New Delhi House Services Ltd., Trophy Resorts & Guest Houses Pvt. Ltd., Malsi Estates

management personnel have Ltd., Max India Foundation

significant influence

Summary of significant related party transactions (as identified by management) carried out in ordinary course of

business are as follows:

RUPEES

S. Particulars Max Medical Max Healthcare

No Services Limited Institute Limited

(Holding Company) (Holding Company

of Max Medical

Services Limited)

1. Loan Taken 17,227,407 816,354

(129,901,380) (64,459,608)

2 (a) Finance Lease liability undertaken - 4,066,292

(-) (126,778,424)

(b) Finance Lease Instalment * - 16,846,360

(-) (8,384,766)

(c) Operating Lease Instalment ** - 4,800,000

(-) (3,600,000)

3 (a) Expenses:

For Services Received - 24,532,928

(-) (18,499,539)

(b) For Management Services Received - 15,182,365

(-) (5,061,800)

(c) Purchases of Medicines and Consumables - 52,879,691

(-) (41,886,004)

(d) Interest Expensed/Capitalized *** 31,697,398 14,621,458

(22,723,978) (7,573,777)

4. Income:

Services Rendered - 54,496

(-) (1,284,042)

5. Amount Outstanding-Against Loan taken 257,056,446 65,275,962

(239,829,039) (64,459,608)

6 Finance Leased Assets Obligation - 105,613,592

(-) (118,393,660)

7 Interest accrued but not due 54,457,102 8,157,818

(24,911,695) (4,714,293)

8 Payable for Goods/ Services 1,127,513 31,166,708

(1,127,513) (28,097,564)

9 Payable for Lease Rent - 41,344,713

(-) (12,134,644)

Previous years figures are given in brackets


6 ALPS.p65 8/19/2009, 12:31 PM335




* Excluding applicable taxes on Finance Lease instalments amounting to Rs. 908,069/-, (Previous year Rs. 493,512/-) and

interest shown separately Rs. 6,463,640/- ( Previous year Rs. 1,478,234/-)

** Excluding applicable taxes on Operating Lease instalments amounting to Rs.192,000/- (Previous year Rs. 144,000/-)

*** Of which the interest capitalized amount of Rs. Nil (Previous year Rs. 3,848,903) and Rs. Nil (Previous year Rs. 297,681/-)

paid/payable to Max Medical Services Ltd. and Max Healthcare Institute Ltd. respectively.

12 Material consumed consists of items of varied nature. Accordingly it is not feasible to give details as required under part II of

Schedule VI to the Companies Act, 1956.

13 Auditors Remuneration

RUPEES


Audit fees * 220,600 224,720

Out of pocket expenses * 22,472 22,472

Total 243,072 247,192

* Including Service Tax

14 Comparative Figures

Previous year’s figures have been regrouped / reclassified, wherever considered necessary, to conform to current year’s

classification.


New Delhi ARVIND KAKAR DirectorJUNE 24, 2009 NEERAJ BASUR Director


6 ALPS.p65 8/19/2009, 12:31 PM336








Date Month Year



N I L N I L

Bonus Issue Others

N I L 9 3


4 2 8 4 4 6 4 2 8 4 4 6


5 0 0 N I L


N I L 4 2 7 9 4 6


N I L


4 1 8 8 0 9 N I L


( 1 1 1 4 9 8 ) N I L

Accumulated Losses

1 2 1 1 3 5


3 0 8 2 0 7 3 6 4 5 0 8


5 6 3 0 2 5 6 8 9 3

+ - Earning per Share in Rs. Dividend Rate (%)

1 3 0 7 . 8 1 N I L


Product Description H O S P I T A L

√ √

√

6 ALPS.p65 8/19/2009, 12:31 PM337




6 ALPS.p65 8/19/2009, 12:31 PM338

MAX HEALTHSTAFF INTERNATIONAL LIMITED


Your Directors have pleasure in presenting their Sixth Annual Report

along with the Audited Accounts for the year ended March 31,

2009.

OPERATIONS

To work in US, nurses have to obtain an immigration visas (EB-3

visa) which allows them to migrate and work in a healthcare

institute in US. The numbers of such visas, which are provided in

the usual course of US immigration 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 led to visa retrogression. Due to

the enforcement of visa retrogression, Company has considerably

scaled down its operations till the clarity on immigration laws

emerges and thus, it is totally dependent on Max India Ltd (holding

company) for financial support to sustain its operations.

FINANCIAL RESULTS

Gross revenue for the year under review was Rs. 156.73 lacs against

Rs. 256.46 lacs in the previous year. The Company incurred a net

loss after tax of Rs. 270.49 lacs during the current year against a

loss of Rs. 423.11 lacs in the previous year.

DIVIDEND

In view of the accumulated losses, your Directors are unable to

recommend any dividend for the year under review.








as follows:







(Rs. In crore)

For the For the


March 31, 2009 March 31, 2008






Others 0.17 0.53


The Company does not have any employee, who is covered under



DIRECTORS


the Company’s Articles of Association, Mr. Mukesh Shivdasani is

due to retire by rotation and is eligible for re-appointment.

Mrs. Sujatha Ratnam was appointed as an Additional Director of

the Company on October 24, 2008 to hold office up to the ensuing

Annual General Meeting. The Company has received a notice under

Section 257 of the Companies Act, 1956, from a member proposing

the candidature of Mrs. Sujatha Ratnam for being appointed as a

Director of the Company.

Mr. Analjit Singh resigned from the Board of Directors of the

Company effective October 24, 2008. The Board places on record,

its appreciation for the valuable contribution made by Mr. Analjit

Singh during his association as a Director of the Company.




i in the preparation of annual accounts, the applicable

accounting standards have been followed along with proper


ii the Directors had selected such accounting policies and applied


Directors’ Report

7 Health Staff.p65 8/19/2009, 12:31 PM341



are reasonable and prudent so as to give a true and fair view



iii the Directors had taken proper and sufficient care for the





iv the Directors had prepared the annual accounts, on a going

concern basis.

AUDITORS

M/s Nangia & Co., Chartered Accountants, Auditors of the Company

retires at the conclusion of the ensuing Annual General Meeting

and is eligible for re-appointment. The Company has received from

them a Certificate to the effect that their re-appointment, if made,

will be in accordance with the limits specified under Section 224(1B)



New Delhi P. Dwarakanath Director

July 24, 2009 Sujatha Ratnam Director

Directors’ Report

7 Health Staff.p65 8/19/2009, 12:31 PM342



1 We have audited the attached Balance Sheet of Max

HealthStaff International Limited, New Delhi as at March 31,

2009 and the related Profit and Loss Account and Cash Flow

Statement for the year ended on that date annexed thereto,

which we have signed under reference to this report. These

financial statements are the responsibility of the Company’s



2 We conducted our audit in accordance with auditing standards



about whether the financial statements are free of material

misstatement. An audit includes examining on a test basis,



accounting principles used and significant estimates by


presentation. We believe that our audit provides a reasonable

basis for our opinion.

3 We draw your attention to Note II(a) on Schedule ‘13’ of Notes

to Accounts, regarding the appropriateness of the “going

concern” basis used for preparation of these accounts, because

the cumulative losses of the company are more than 50% of

its “net worth” and the validity of the “going concern” basis

would depend upon the continuance of the existing financial

support by the Holding Company. These accounts do not

include any adjustments that would result from the

discontinuance of the existing financial support by the Holding

Company.

4 As required by the Companies (Auditors’ Report) (Amendment)

Order, 2004, issued by the Central Government in terms of

sub-section 4A of section 227 of the Companies Act, 1956,

(hereinafter referred to as the ‘Act’) we give in an annexure, a

statement on the matters specified in paragraphs 4 and 5 of

the said order, to the extent applicable.

5 Further to our comments in the annexure referred to in

paragraph (3) above, we report that:

(a) We have obtained all the information and explanations


necessary for the purpose of our audit;

(b) In our opinion, proper books of accounts as required by

law have been kept by the Company, so far as appears

from our examination of the books;






report comply with the requirements of Accounting

Standards referred to in sub-section (3C) of Section 211

of the Act, to the extent applicable.


the Directors of the Company and taken on record by

the Board of Directors, none of the Directors is


as a Director of the Company in terms of clause (g) of

sub-section (1) of Section 274 of the Act.



financial statements read together with ‘Significant

Accounting Policies & Notes to Accounts’ in Schedule

‘13’, give the information required by the Act, in the


conformity with the accounting principles generally

accepted in India:

(i). in the case of the Balance Sheet, of the state of

affairs of the Company as at March 31, 2009;

(ii). in the case of the Profit and Loss Account, of the

loss of the Company for the year ended on that

date; and

(iii). In the case of Cash Flow Statement, of the cash

flows for the year ended on that date.

RAKESH NANGIA

FCA, Partner

Membership No. 70776

For & on behalf of

Nangia & Company

New Delhi Chartered Accountants

JUNE 15, 2009

Auditors’ Report

7 Health Staff.p65 8/19/2009, 12:31 PM343



ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDITORS’

REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR

THE YEAR ENDED MARCH 31, 2009.

On the basis of such checks as we considered appropriate and

according to the information and explanation given to us during

the course of audit, we report that: -

1. (a) The Company is maintaining proper records showing

full particulars, including quantitative details and

situation of fixed assets.

(b) As explained to us, all the fixed assets have been

physically verified by the management according to a

regular program of verification which in our opinion is

reasonable having regard to the size of the Company

and the nature of its assets. No material discrepancies

between book records and the physical inventory have

been noticed on such verification.

(c) In our opinion and according to the information and

explanations given to us, a substantial part of fixed

assets has not been disposed off/sold during the year

covered by our report and the validity of the “going

concern” basis would depend upon the continuance of

the existing financial support by the holding company.

2. The Company being a service company engaged in the field

of health-care staffing, carries no inventories, hence the

provisions of Clause 4(ii)(a) to 4(ii)(c) of the Companies

(Auditors’ Report) (Amendment) Order, 2004 are not

applicable.

3. (a) In our opinion and according to the information and

explanations given to us, the Company has not granted

any loans, secured or unsecured, to companies, firms or

other parties listed in the register maintained under

Section 301 of the Act.

(b) As the Company has not granted any loans, secured or

unsecured, to companies, firms or other parties listed

in the register maintained under Section 301 of the Act,

the provisions of clause 4(iii)(b), 4(iii)(c) & 4(iii)(d) are

not applicable.


explanations given to us, the Company has not taken

any loans, secured or unsecured, from companies, firms

or other parties listed in the Register maintained under

Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and

explanations given to us, there are adequate internal control

procedures commensurate with the size of the Company and

the nature of its business for purchase of fixed assets and for

sales of services. Further, on the basis of our examination

and according to the explanations given to us, we have neither

come across nor have we been informed of any instance of

major weaknesses in the aforesaid internal control system of

the Company.

5. Based on the information and explanations given to us, there

are no transactions that need to be entered into the register

in pursuance of Section 301 of the Act.

6. In our opinion and according to information given to us, the

Company has not accepted deposits from the public within

the meaning of Section 58A and 58AA of the Companies Act,

1956 and rules framed there under.

7. In our opinion, the Company has an internal audit system,

which is commensurate with the size and nature of its

business.

8. The Central Government of India has not prescribed the

maintenance of cost records under Section 209(1)(d) of the

Act, for any of the products of the Company.


explanations given to us and according to the books

and records as produced and examined by us, the

Company is regular in depositing undisputed statutory

dues including Provident Fund, Employees’ State

Insurance, Income-Tax, Wealth Tax, Service Tax, Cess

and any other statutory dues as applicable with the

appropriate authorities.

According to the information and explanations given

to us, there were no undisputed amounts payable in

respect of Provident Fund, Employees’ State Insurance,

Income-Tax, Wealth Tax, Service Tax, Cess and any other

statutory dues as applicable, outstanding as at the last

day of the financial year concerned for a period of more

than six months from the date they became payable.

(b) According to the records of the Company, there are no

dues of Provident Fund, Employees’ State Insurance,

Income-tax, Service Tax, Cess and any other statutory

dues as applicable to it, which have not been deposited

on account of any dispute.

Auditors’ Report

7 Health Staff.p65 8/19/2009, 12:31 PM344



10. In our opinion the accumulated losses of the Company are

more than fifty percent of its net worth. The Company has

incurred cash losses during the financial year covered by our

audit and during the immediately preceding financial year.

11. Based on our audit procedures and according to the

information and explanations given by the management, we

are of the opinion that the Company has not defaulted in

repayment of its dues of any financial institution or bank

during the year.

12. The Company has not granted any loans and advances on the

basis of security by way of pledge of shares and other

securities.

13. The provisions of any special statute applicable to chit fund/

nidhi/mutual benefit fund/societies are not applicable to the

Company.

14. Based on our examination of the records and documents of

the Company, and according to the information and

explanation given to us, we are of the opinion that the

Company is not dealing or trading in shares, securities,

debentures and other investments, and therefore clause (xiv)

of The Companies (Auditors’ Report) (Amendment) Order, 2004

is not applicable to the Company.

15. Based on our examination of the records of the Company and

according to the information and explanation given to us, we

are of the opinion that the Company has not given guarantee

for loans taken by others from banks or financial institutions.

16. The Company has not obtained any term loans that were not

applied for the purposes for which these were raised.

17. Based on the information and according to the information

and explanations given to us and on an overall examination

of the balance sheet of the Company, in our opinion, there

are no funds raised on a short term basis which have been

used for long term investment or vice versa.

18. The Company has not made any preferential allotment of

shares to parties and companies covered in the Register

maintained under section 301 of the Companies Act, 1956

during the year.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by public issue during

the year.

21. Based upon audit procedures performed and information and

explanations given by the management of the Company, we

report no fraud on or by the Company has been noticed or

reported during the course of our audit.

RAKESH NANGIA

FCA, Partner



Nangia and Company

New Delhi Chartered Accountants

JUNE 15, 2009

Auditors’ Report

7 Health Staff.p65 8/19/2009, 12:31 PM345



RUPEES


SOURCES OF FUNDS

SHAREHOLDERS’ FUNDS

Share Capital 1 39,450,000 39,450,000

LOAN FUNDS

Unsecured Loans 2 181,428,704 162,674,013

Total 220,878,704 202,124,013


FIXED ASSETS 3Gross Block 19,114,155 32,550,586Less : Accumulated Depreciation 15,711,165 18,737,951

Net Block 3,402,990 13,812,635

CURRENT ASSETS, LOANS AND ADVANCES 4Interest Accrued on Investment 237,888 178,008Sundry Debtors 3,891,834 4,709,823Cash and Bank Balances 1,464,360 1,495,317Loans and Advances 1,661,376 4,343,492

7,255,458 10,726,640LESS : CURRENT LIABILITIES AND PROVISIONS 5Current Liabilities 5,912,721 11,391,879Provisions 142,113 304,040

6,054,834 11,695,919

NET CURRENT ASSETS 1,200,624 (969,279)

MISCELLANEOUS EXPENDITURE 6 - 54,786(To the extent not written off or adjusted)

Profit and Loss Account 216,275,090 189,225,871

Total 220,878,704 202,124,013



Schedule 1 to 13 form an integral part of Accounts. For and on behalf of the Board of Directors


RAKESH NANGIA P DWARAKANATH Director

FCA, Partner SUJATHA RATNAM Director

Membership No. 70776 ABHISHEK ANAND Company Secretary

For Nangia and Company

Chartered Accounants

New Delhi

JUNE 15, 2009

7 Health Staff.p65 8/19/2009, 12:31 PM346



RUPEES


INCOME

Income From Operations 7 11,448,379 25,177,194

Other Income 8 4,225,486 468,618

Total 15,673,865 25,645,812

EXPENDITURE

Candidate Related Expenses 9 2,903,185 8,116,942

Personnel Expenses 10 16,356,223 26,665,294

General and Administrative Expenses 11 19,184,825 28,187,979

Financial Expenses 12 29,787 56,520

Depreciation 3 3,929,243 5,548,506

Amortization of Preliminary Expenses 54,786 1,314,885

(Refer Note II (d) on Schedule 13)

Total 42,458,049 69,890,126

LOSS BEFORE TAX 26,784,184 44,244,314

Tax Expense

-Fringe Benefits Tax 265,035 493,149

-Deferred tax for the year - (2,426,024)

265,035 (1,932,875)

LOSS AFTER TAX 27,049,219 42,311,439

Loss Brought Forward 189,225,871 147,038,405

Less: Transitional Liability Reversed pursuant

to adaption of AS-15 (Revised) on “Employee Benefits” - (123,973)

LOSS CARRIED FORWARD TO THE BALANCE SHEET 216,275,090 189,225,871

Earning Per Share (Rs. per equity share of Rs. 10 each)

(Refer Note II (g) on Schedule 13)

-Basic and Diluted (6.86) (10.73)

Number of Shares used in computing earning per share

-Basic and Diluted 3,945,000 3,945,000





RAKESH NANGIA P DWARAKANATH DirectorFCA, Partner SUJATHA RATNAM DirectorMembership No. 70776 ABHISHEK ANAND Company Secretary

For Nangia and CompanyChartered Accounants

New DelhiJUNE 15, 2009

7 Health Staff.p65 8/19/2009, 12:31 PM347




RUPEES


CASH FLOW FROM OPERATING ACTIVITIES

Loss before Tax (26,784,184) (44,244,314)

Adjustments for:

Depreciation 3,929,243 5,548,506Amortization of Preliminary Expenses 54,786 1,314,885Provision for Gratuity (337,963) (164,296)Provision for Leave Encashment (161,927) 53,050Provision for Doubtful Debt 248,432 -Net Loss on Sale of Fixed Assets 5,276,891 40,225Interest Income (75,416) (70,817)Liability/Provision no Longer Required Written Back (3,586,179) (291,428)Unrealised Foreign Exchange Loss/(Gain) (286,576) (7,556)

Operating Loss Before Working Capital Changes (21,722,893) (37,821,746)

Adjustments for:

Accounts Receivable 1,055,592 543,609Other Current Assets 3,147,061 363,881Accounts Payable and Accrued Expenses (2,092,438) (1,462,639)

Cash Used In Operations (19,612,678) (38,376,894)Direct Taxes Paid (376,483) (575,682)

Cash Used In Operating Activities (19,989,161) (38,952,576)

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets (45,362) (2,739,781)Sale of Fixed Assets 1,248,874 20,000

Cash Used In Investing Activities 1,203,512 (2,719,781)

CASH FLOW FROM FINANCING ACTIVITIES

Loan from Parent Company 18,754,692 41,011,834

Cash From Financing Activities 18,754,692 41,011,834

Increase in Cash and Cash Equivalents (30,957) (660,523)Cash and Cash Equivalents at the Beginning of the Year 495,317 1,155,840Cash and Cash Equivalents at the End of the Year 464,360 495,317

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 and Balances with Banks (Refer Schedule-4).




RAKESH NANGIA P DWARAKANATH DirectorFCA, Partner SUJATHA RATNAM DirectorMembership No. 70776 ABHISHEK ANAND Company Secretary

For Nangia and CompanyChartered Accounants


7 Health Staff.p65 8/19/2009, 12:31 PM348



RUPEES


SCHEDULE-1

SHARE CAPITAL

AUTHORISED CAPITAL

5,000,000 Equity Shares of Rs. 10/- each 50,000,000 50,000,000


ISSUED, SUBSCRIBED AND PAID UP:

3,945,000 Equity Shares of Rs. 10/- each fully paid up 39,450,000 39,450,000

(Previous year 3,945,000 Equity Shares of Rs. 10/- fully paid up)

(Of the above, 3,945,000 (Previous year 3,945,000) equity shares are held by Max India Limited,

the holding company)

Total 39,450,000 39,450,000

SCHEDULE-2

UNSECURED LOANS

Loan from Max India Limited (the holding company) 181,428,704 162,674,013

(Repayable on demand)

Total 181,428,704 162,674,013


SCHEDULE-3FIXED ASSETS RUPEES


Particulars As at Additions Deletions As at As at Additions Deletions As at As at As atApril 1, 2008 March 31, 2009 April 1, 2008 March 31, 2009 March 31, 2009 March 31, 2008

Tangible assets

Leasehold Improvements 5,476,464 40,032 5,516,496 - 1,330,754 887,070 2,217,824 - - 4,145,710

Computers 6,627,615 - 4,372,653 2,254,962 2,562,993 891,185 2,535,448 918,730 1,336,232 4,064,622

Furniture and Fixtures 2,093,911 - 1,751,348 342,563 1,825,929 16,872 1,613,052 229,749 112,814 267,982

Office Equipments 2,527,852 5,330 1,189,696 1,343,486 519,719 101,901 347,355 274,265 1,069,221 2,008,133

Vehicles 651,600 - 651,600 - 200,969 41,381 242,350 - - 450,631

Intangible Assets

Business Development 13,773,144 - - 13,773,144 12,015,643 1,757,501 - 13,773,144 - 1,757,501

Software 1,400,000 - - 1,400,000 281,944 233,333 - 515,277 884,723 1,118,056

TOTAL 32,550,586 45,362 13,481,793 19,114,155 18,737,951 3,929,243 6,956,029 15,711,165 3,402,990 13,812,635

Previous year 29,320,400 3,305,186 75,000 32,550,586 13,204,221 5,548,506 14,776 18,737,951

7 Health Staff.p65 8/19/2009, 12:31 PM349



RUPEES

As at As at

March 31, 2009 March 31, 2008

SCHEDULE-4


Interest Accrued on Investment 237,888 178,008

Sundry Debtors

(Unsecured)

Debts exceeding six months

- Considered good 1,851,876 405,471

Other Debts

- Considered good 2,288,390 4,304,352

4,140,266 4,709,823

Less : Provision for Doubtful Debt 248,432 -

3,891,834 4,709,823


Cash in Hand 34,746 12,531

Balances with Scheduled Banks

- In Current Accounts 429,614 482,786

- In Fixed Deposit Accounts* 1,000,000 1,000,000

1,464,360 1,495,317

Loans and Advances

(Considered Good, unless otherwise stated)

Unsecured

Advances recoverable in cash or in kind or for value to be received 773,554 2,199,576

Income Tax 180,763 53,778

Prepaid Expenses 70,322 386,479

Gratuity Fund Value (Net) 544,071 153,581

(Refer Note II (k) on Schedule 13)

Security Deposits 92,666 1,550,078

1,661,376 4,343,,492

Total 7,255,458 10,726,640

Note:

* Fixed Deposits are held under lien by Canara Bank against guarantees given to The President of India,

acting through the Protector General of Emigrants, Ministry of Overseas Indian Affairs, New Delhi.


Malsi Estates Limited 33,775 -


Malsi Estates Limited 216,204 -

Max Neeman Medical International Ltd - 16,000


7 Health Staff.p65 8/19/2009, 12:31 PM350




RUPEES


SCHEDULE-5


Current Liabilities

Sundry Creditors- Total outstanding dues of Micro Enterprises and Small Enterprises - -- Total outstanding dues of creditors other than Micro Enterprises and Small Enterprises 2,000,493 3,474,962Other Liabilities 3,912,228 7,916,917

5,912,721 11,391,879Provisions

(Refer Note II (k) on Schedule 13)

Leave Encashment 142,113 304,040

142,113 304,040

Total 6,054,834 11,695,919


(Refer Note I(j) on Schedule 13)

- Preliminary Expenses - 54,786

Total - 54,786


SCHEDULE-7

INCOME FROM OPERATIONS

Placement Revenue 7,914,295 24,055,579Training & Coaching Fee 2,395,865 1,121,615HR Solution 1,138,219 -

Total 11,448,379 25,177,194

SCHEDULE-8

OTHER INCOME

Interest on Fixed Deposits with Bank 75,416 70,817

(Tax Deducted at Source Rs.15,536 (Previous Year Rs 7,294))

Liabilities/Provisions No Longer Required Written Back 3,586,179 291,428

Gain on Foreign Exchange Fluctuation 556,366 106,373

Miscellaneous Income 7,525 -

Total 4,225,486 468,618

7 Health Staff.p65 8/19/2009, 12:31 PM351




SCHEDULE-9CANDIDATE RELATED EXPENSESTraining Costs 162,068 624,463Examination Fees 1,095,045 3,452,017Immigration Costs 1,529,707 2,282,894Lodging Charges 45,538 1,089,000Library Books 7,002 395,397Candidate Travelling 56,825 252,771Other Expenses 7,000 20,400

Total 2,903,185 8,116,942

SCHEDULE-10PERSONNEL EXPENSESSalaries, Wages and Bonus 15,333,072 23,126,209Contribution to Provident and Other Funds 588,224 1,072,932Recruitment Expenses 118,049 1,224,637Training & Management Development 7,400 575,926Staff Welfare 309,478 665,590

Total 16,356,223 26,665,294

SCHEDULE-11GENERAL AND ADMINISTRATIVE EXPENSESRent 5,601,674 7,888,509Repairs and Maintenance - Others 2,552,609 5,273,030Insurance 31,595 29,037Electricity and Water Charges 1,248,559 2,129,978Printing and Stationery 271,446 705,029Traveling and Conveyance 1,478,717 3,257,588Communication Expenses 875,420 1,619,180Legal and Professional Expenses 688,582 2,827,869Business Promotion 108,344 105,446Conference Expenses - 449,790Advertisement and Publicity 363,396 2,856,534Books and Periodicals 53,257 84,932Membership and Subscription 23,435 26,334Website Development Charges 48,708 71,888Loss on Foreign Exchange Fluctuation 253,142 720,643Loss on sale/disposal of Fixed Assets 5,276,891 40,225Miscellaneous Expenses 60,618 101,967Provision for Doubtfull Debts & Advances (Expense) 248,432 -

Total 19,184,825 28,187,979

SCHEDULE-12FINANCIAL EXPENSESBank Charges 29,787 56,520

Total 29,787 56,520

RUPEES


7 Health Staff.p65 8/19/2009, 12:31 PM352



I. SIGNIFICANT ACCOUNTING POLICIES:

a) Accounting basis and convention

The accompanying financial statements are prepared in accordance with Generally Accepted Accounting Principles in India

(“GAAP”), under the historical cost convention, on the accrual basis. GAAP comprises mandatory accounting standards issued

by the Institute of Chartered Accountants of India (“ICAI”) and the provisions of the Companies Act, 1956, as adopted

consistently by the Company.

b) Revenue Recognition

a) Revenue from overseas placement of Healthcare staff is recognized on the basis of time sheets received from Alliance

Partners on accrual basis.

b) Revenue from Training is recognized at the time of enrolment on accrual basis.

c) 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.

c) 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

“Preoperative expenses pending capitalization”. These expenses are allocated to fixed assets in the year of commencement

of the related project.

d) Intangible Assets

Intangible assets are recognized as per the criteria specified in Accounting Standard (AS) 26 issued by the Institute of

Chartered Accountants of India and are amortized as follows –

(a) The expenses incurred for purposes of business development including consultancy (commercial, legal and technical)

and overseas traveling (market related) is capitalized under the Head “Business Development” as an intangible asset, to

be amortized proportionately over a period of five years.

(b) Costs relating to acquisition of computer software are capitalized as Intangible Asset and amortized on a straight line

basis over a period of six years.

e) Borrowing Costs

Borrowing costs, other than those that are directly attributable to the acquisition, construction or production of a qualifying

asset, are recognized as an expense in the period in which they are incurred.

f) 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 the respective lease periods.

c) Assets costing not more than Rs. 5,000/- each are depreciated at hundred percent in the year of capitalization.

g) Taxation










SCHEDULE-13

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS

7 Health Staff.p65 8/19/2009, 12:31 PM353



prevailing enacted or substantially enacted regulations. Deferred tax assets are recognized 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.

h) Employee benefits

a) Provident Fund


contributions under Provident Fund to “Max India Limited Employees Provident Fund Trust”. Both the employee and the

Company make monthly contributions to the provident fund trust equal to a specified percentage of the covered

employee’s salary.

b) Gratuity

In accordance with the Payment of Gratuity Act 1972, the Company provides gratuity, a defined benefit plan (the

“Gratuity Plan”) covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at

retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s

salary and the tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation,

based upon which, the Company contributes to a Master policy with Life Insurance Corporation of India.

c) Leave Encashment

Accrual for leave encashment is made on the basis of actuarial valuation done at the year end.

The company recognises actuarial gains and losses as and when the same arise. The charge in respect of the same is

taken to the Profit and Loss account.

i) 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 realized gains and losses on foreign exchange

transactions are recognized in the Profit and Loss account.

j) Miscellaneous Expenditure

Preliminary expenses are amortized over a period of 5 years.

k) 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

lease.

II. NOTES TO ACCOUNTS

a) Going Concern

Max HealthStaff International Ltd, a wholly owned subsidiary of Max India Ltd is engaged in healthcare staffing in India and

abroad, more particularly in USA. The placement of healthcare personnel in USA is subject to availability of immigrant visas

which are currently unavailable given the visa retrogression in force. Accordingly the Company has scaled down its operations

and its cumulative losses are greater than 50% of its net worth. Thus the Company is dependent on financial support from its

holding company for sustenance of its operations. The holding company has confirmed its commitment to continue to fund

the operations and liabilities of the Company in the future and accordingly, the financial statements have been prepared

using the Going Concern assumption.

b) Contingent Liabilities not provided for in respect of

RUPEES


Bank Guarantees 1,000,000 1,000,000

Claims against the Company not acknowledged as Debts# 18,116,000 13,965,000

#(USD 350,000 @ Rs 51.76)

c) Estimated amount of contracts remaining to be executed on Capital Account and not provided for Nil (Previous Year: Nil).


7 Health Staff.p65 8/19/2009, 12:31 PM354



d) Preliminary Expenses

RUPEES


Balance at beginning of the year 54,786 1,369,671

Add: Additions - -

Less: Amount Amortized 54,786 1,314,885

Balance at end of the year - 54,786

e) Leases

Accounting for leases has been done in accordance with the Accounting Standard 19 issued by the Institute of Chartered

Accountants of India. Following are the details of lease transactions for the year.

a. Financial Lease

The company does not have any Finance Lease arrangement.

b. Operating Lease

RUPEES


Lease rentals recognized in the Profit and Loss Account 5,601,674 7,888,509

The total of future minimum lease payments under non-cancellable leases is Nil.

f) No deferred tax assets has been created on account of the carry-forward business losses as there is no reasonable certainty

of utilizing them at a future date

g) Earnings per Share

RUPEES


Basic and Diluted

- Loss After Tax (Rs.) 27,049,219 42,311,439

- Weighted average number of equity shares 3,945,000 3,945,000

- EPS (Rs.) (6.86) (10.73)


Outstanding as at the beginning of the year 3,945,000 3,945,000

Outstanding as at the end of the year 3,945,000 3,945,000

h) There are no sums payable to Micro Enterprises and Small Enterprises which are overdue. Payments against supplies from

Micro Enterprises and Small Enterprises, if any, are made in accordance with agreed terms. Accordingly, no interest is paid or

accrued and remaining unpaid to these suppliers.

i) Related Parties (as identified by the management) are classified as

Holding company Max India Ltd.

Fellow subsidiaries Max New York Life Insurance Co. Ltd., Max Healthcare Institute Ltd., Max Medical Services Ltd.,

Neeman Medical International BV, Netherlands, Neeman Medical International NV, Netherlands,

Max Neeman Medical International Inc, USA, Neeman Medical International, Latin America (till

October 26, 2007), Max Neeman Medical International Ltd., Pharmax Corporation Ltd., Max

Ateev Ltd., Max UK Ltd., UK, ALPS Hospital Ltd.

Employee Benefit Fund Max India Ltd. Employees Provident Fund Trust


7 Health Staff.p65 8/19/2009, 12:31 PM355



Summary of significant related party transactions (as identified by the management) carried out in ordinary course of business:

RUPEES

S. No. Particulars Holding Company Fellow Subsidiaries Employee

Benefit fund

1 Fixed Assets Purchased - - -(2400) (-) (-)

2 Fixed Asset Sold 262,216 11,100 -(-) (-) (-)

3 Loans taken 17,700,000 - -(37,200,000) (-) (-)

4 Incomes and reimbursement- Reimbursement of expenses 19,196 - -

(-) (31,341) (-)5 - Other expenses 1,542,103 3,088,330 -

(4,080,754) (5,378,955) (-)- Company’s contribution to PF Trust - - 325,599

(-) (-) (511,986)6 Amount outstanding

- Against loan taken 181,428,704 - -(162,674,013) (-) (-)

- Other payable - 4,14,001 -(-) (340,807) (-)

Figures in bracket are for previous year.

j) Additional information pursuant to the provisions of paragraph 3, 4C and 4D of Part II of Schedule VI of the Companies Act, 1956,together with notes thereon:

a. Expenditure in Foreign Currency:

RUPEES


Other matters:Examination Fees 611,424 2,198,197Traveling and Conveyance - 540,477Immigration Expenses 1,076,467 2,182,510Communication Expenses 52,363 44,970Conference Expenses - 276,640Business Promotion - 3,613Membership and Subscription - 40,000

Total 1,740,254 5,286,407

b. Earnings in Foreign Currency:

RUPEES


Placement Revenue 7,914,295 24,055,579


7 Health Staff.p65 8/19/2009, 12:31 PM356



c. Amount paid / payable to Auditors:

RUPEES


Audit Fees 45,000 39,326

Tax Audit Fee 10,000 11,236

k) Employee Benefits


The Company has adopted Accounting Standard, AS-15 (revised 2005), on employee benefits with effect from April 1, 2007. The

following table sets out disclosures in respect of defined benefit plans:

RUPEES


Reconciliation of present value of the defined benefits obligation :

Obligations as at April 1, 2008 430,053 304,040

Service Cost 36,486 59,549

Interest cost 34,404 24,323

Benefits settled (37,762) (263,871)

Actuarial (gain)/loss (371,091) 18,072

Obligations as at March 31, 2009 92,090 142,113

Change in plan assets

Fair value of plans assets as at April 1, 2008 583,634 -

Expected return on plan assets 52,527 -

Actuarial gain/(loss) - -

Contribution - -

Benefits paid - -

Fair value of plan assets as at March 31, 2009 636,161 -

Reconciliation of present value of the obligation and fair value of the plan assets:

Fair value of plan assets as at March 31, 2009 636,161 -

Present value of the obligation as at March 31, 2009 92,090 142,113

(Asset)/Liability recognized as at March 31, 2009 (544,071) 142,113

Cost for the year

Service cost 36,486 59,549


Expected return on plan assets (52,527) -

Actuarial (gain)/loss (371,091) 18,072

Net cost (352,728) 101,944

Assumptions

Interest rate 8% 8%

Discount rate 8% 8%

Estimated rate of return on plan assets 9% 9%

Salary Increase 10% 10%

Leave availment in the service - 40%

Retirement age 58 58


7 Health Staff.p65 8/19/2009, 12:31 PM357




Defined Contribution Plan

During the year, the Company contributed Rs. 570,200 (Previous year Rs. 934,897) for provident fund which represents contribution

to defined contribution plan.

l) Other disclosure requirements of schedule VI to the Companies Act, 1956 are not applicable to the Company.

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



RAKESH NANGIA P DWARAKANATH Director

FCA, Partner SUJATHA RATNAM Director

Membership No. 70776 ABHISHEK ANAND Company Secretary

For Nangia and Company

Chartered Accounants

New Delhi

JUNE 15, 2009

7 Health Staff.p65 8/19/2009, 12:31 PM358







Date Month Year



N I L N I L

Bonus Issue Others

N I L N I L

III POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs. Thousand)Total Liabilities (including share capital) Total Assets

2 2 0 8 7 9 2 2 0 8 7 9


3 9 4 5 0 N I L


N I L 1 8 1 4 2 9


3 4 0 3 N I L

+ - Net Current assets Misc. Expenditure

1 2 0 1 N I L

Accumulated Losses

2 1 6 2 7 5


1 5 6 7 4 4 2 4 5 8

+ - Profit /Loss before Tax + - Profit /Loss after Tax

2 6 7 8 4 2 7 0 4 9

Earning per Share in Rs.+ - Basic Dividend Rate (%)

6 . 8 6 N I L

+ - Diluted

6 . 8 6


Product Description 8 5 1 9 9

Product Description H E A L T H C A R E S T A F F I N G

��

�

�

�

7 Health Staff.p65 8/19/2009, 12:31 PM359



7 Health Staff.p65 8/19/2009, 12:31 PM360

NEEMAN MEDICAL INTERNATIONAL B.V.


Your Directors have pleasure in presenting their Annual Report along

with the Audited Accounts for the financial year ended March 31,

2009.

OPERATIONS

The principal activity of the Company was that of an intermediate

holding company for a group that provides clinical research services

to various pharmaceutical companies around the world. During the

year under review, the Company reported a net loss of Rs.11.35

lacs (previous year net loss was Rs. 12.11 lacs).

DIVIDEND

Your Directors do not recommend any dividend for the year under

review.

DIRECTORS

The Board currently comprises of Mr. Analjit Singh, Mr. Neeraj Basur

and Maprima Management BV.

Particulars of Deposits




As per the provisions of Section 217(2AA) of the Companies

Act,1956, the Directors confirm that:

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



(ii) the Directors had selected such accounting policies and applied





(iii) the Directors had taken proper and sufficient care for the





(iv) the Directors had prepared the annual accounts, on a going

concern basis.

OTHER PARTICULARS

Information pertaining to Section 217 (1) (e) and 217 (2A) of the

Companies Act, 1956 are not applicable.

AUDITORS

M/s Price Waterhouse, Chartered Accountants, Auditors of the

Company retires at the conclusion of the ensuing Annual General

Meeting and is eligible for re-appointment.


New Delhi NEERAJ BASUR Director

June 18, 2009 ANALJIT SINGH Director

Directors’ Report

8 NMI BV.p65 8/19/2009, 12:31 PM363



TO THE MEMBERS OF NEEMAN MEDICAL INTERNATIONAL B.V.

1. We have audited the attached Balance Sheet of Neeman

Medical International B.V., as at March 31, 2009, and the


























i The Company does not have fixed assets.

ii There are no stocks with the Company and third parties

iii (a) The company has not granted any loans, secured



301 of the Act.




301 of the Act.

iv In our opinion and according to the information and







for the sale of services. Further, on the basis of our

examination of the books and records of the company,

and according to the information and explanations given

to us, we have neither come across nor have been

informed of any continuing failure to correct major

weaknesses in the aforesaid internal control system.

v According to the information and explanations given

to us, there have been no contracts or arrangements

referred to in Section 301 of the Act during the year to

be entered in the register required to be maintained

under that Section. Accordingly, commenting on

transactions made in pursuance of such contracts or

arrangements does not arise.

vi The company has not accepted any deposits from the



vii In our opinion, the company has an internal audit system


viii The Central Government of India has not prescribed the




ix (a) According to the information and explanations





education and protection fund, employees’ state

insurance, income-tax, sales-tax, wealth tax,

service tax, customs duty, excise duty, cess and

other material statutory dues as applicable with

the appropriate authorities.









incurred cash loss in the financial year ended on that

Auditors’ Report

8 NMI BV.p65 8/19/2009, 12:31 PM364



date and in immediately preceding financial year.

xi According to the records of the company examined by



any financial institution or bank or debenture holders

as at the balance sheet date.

xii The company has not granted any loans and advances



xiii The provisions of any special statute applicable to chit



xiv In our opinion, the company is not a dealer in shares,


xv In our opinion, and according to the information and


any guarantee for loans taken by others from banks or


xvi The company has not taken any term loans.

xvii On the basis of an overall examination of the balance





xviii The company has not made any preferential allotment



the year.

xix The company has not issued any debentures during the

year.

xx The company has not raised any money by public issues

during the year.

xxi During the course of our examination of the books and







management.


































V.NIJHAWAN

Partner





Auditors’ Report

8 NMI BV.p65 8/19/2009, 12:31 PM365



RUPEES


SOURCES OF FUNDS


Share Capital 1 825,994 825,994

Share Application Money Pending Allotment 72,324,900 72,324,900

Reserves and Surplus 2 1,040,542,676 905,540,571

1,113,693,570 978,691,465


INVESTMENTS 3 492,203,992 376,410,211

CURRENT ASSETS, LOANS AND ADVANCES 4

Bank Balances 403,933 407,608

Loans and Advances 81,644,534 63,459,385

82,048,467 63,866,993

LESS: CURRENT LIABILITIES AND PROVISIONS 5 1,091,577 982,623

NET CURRENT ASSETS 80,956,890 62,884,370


1,113,693,570 978,691,465





V. NIJHAWAN ANALJIT SINGH DirectoriPartner NEERAJ BASUR DirectorMembership No. F 87228



8 NMI BV.p65 8/19/2009, 12:31 PM366




RUPEES


INCOME

Interest Income 772 17,459

Miscellaneous Income - 17,678

Profit on Foreign Exchange Fluctuation 116,306 3,060

117,078 38,197

EXPENDITURE

Administrative and Other Expenses 6 1,246,152 1,238,797

Finance Charges 7 6,730 10,751

1,252,882 1,249,548

(LOSS) FOR THE YEAR (1,135,804) (1,211,351)

(LOSS) BROUGHT FORWARD (539,396,884) (538,185,533)


Earnings per Share


- Basic and Diluted (29,890) (31,878)

Number of ordinary shares used in computing earnings per share

- Basic and Diluted 38 38







8 NMI BV.p65 8/19/2009, 12:31 PM367




RUPEES

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

A. CASH FLOW FROM OPERATING ACTIVITIESProfit/(Loss) Before Exceptional Items (1,135,804) (1,211,351)

Adjustments for:Interest Income (772) (17,459)Unrealised Foreign Exchange (Gain)/Loss (116,306) (3,060)

Operating (Loss) Before Working Capital Changes (1,252,882) (1,231,870)Adjustments for:Other Receivables (14,014) (150,509)Trade Payables 108,954 885,922

Cash From/(Used in) Operating Activities (1,157,942) (496,457)

B. CASH FLOW FROM INVESTING ACTIVITIESInterest Income 772 17,459Sale of Investments 1,164,348 -Purchase of Investments - (28,644)

Cash From/(Used in) Investing Activities 1,165,120 (11,185)

C. CASH FLOW FROM FINANCING ACTIVITIESCash From Financing Activities - -

Increase/(Decrease) in Cash and Cash Equivalents 7,178 (507,642)Impact of Foreign Exchange Fluctuations (10,853) (51,888)

Net Increase/(Decrease) in Cash and Cash Equivalents (3,675) (559,530)Cash and Cash Equivalents As At March 31, 2008 407,608 967,138Cash and Cash Equivalents As At March 31, 2009 403,933 407,608

Net Increase/(Decrease) in Cash and Cash Equivalents (3,675) (559,530)

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 Balance with Bank:

RUPEES


Balance with Bank Rabo Bank NV (The Netherlands) 403,933 407,608




V. NIJHAWAN ANALJIT SINGH DirectorPartner NEERAJ BASUR DirectorMembership No. F 87228



8 NMI BV.p65 8/19/2009, 12:31 PM368



RUPEES


SCHEDULE-1SHARE CAPITALAuthorised180 (Previous year 180) Ordinary Shares of Euro 500 each 3,837,376 3,837,376

Issued, Subscribed and Paid Up38 (Previous year 38) Ordinary Shares of Euro 500 each(Held by Max India Limited, the Holding Company) 825,994 825,994

SCHEDULE-2RESERVES AND SURPLUS

As at Additions Delitions/ As atApril 1, 2008 Utilisations March 31, 2009

Share Premium 1,000,896,148 - - 1,000,896,148Foreign Currency Transalation Reserve (95,355,577) 135,002,105 - 39,646,528

905,540,571 135,002,105 - 1,040,542,676


SCHEDULE-3INVESTMENTS(Refer Note A5 on Schedule 8)

Long Term-Trade (Unquoted)Subsidiaries, at cost125 (Previous year 125) Ordinary Shares of Euro 500 eachin Neeman Medical International NV 1,234,283,545 943,911,340Less : Provision For Diminution (742,079,553) 492,203,992 (567,501,129)

492,203,992 376,410,211

SCHEDULE-4CURRENT ASSETS, LOANS AND ADVANCESBank BalancesWith Non-Scheduled Bank in Current Accounts - Rabo Bank NV* 403,933 407,608

403,933 407,608Loans and Advances(Unsecured, Considered good, Unless Otherwise Stated)

Share Application Money Pending Allotment 81,480,011 63,308,876Prepaid Expenses 164,523 150,509

81,644,534 63,459,385

82,048,467 63,866,993

* Maximum amount outstanding during the year Rs 526,846/- (Previous year Rs. 945115/-)


8 NMI BV.p65 8/19/2009, 12:31 PM369




RUPEES


SCHEDULE - 5CURRENT LIABILITIES AND PROVISIONSSundry Creditors** -Total Outstanding Dues of Creditors Other Than Micro Enterprises & Small Enterprises 1,091,577 982,623

1,091,577 982,623** There are no dues to creditors under the definition of Micro

Enterprises & Small Enterprises as at March 31, 2009 and March 31, 2008


SCHEDULE - 6ADMINISTRATIVE AND OTHER EXPENSESLegal and Professional 1,220,443 1,216,080Auditor’s Remuneration 25,709 22,717

1,246,152 1,238,797

SCHEDULE - 7FINANCE CHARGESBank Charges 6,730 10,751

6,730 10,751

8 NMI BV.p65 8/19/2009, 12:31 PM370




SCHEDULE - 8


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


1956.


(i) Revenue represents amounts invoiced during the year, exclusive of value added tax.

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

3 Expenditure

Expenses are accounted for on the accrual basis and provisions are made for all known losses and liabilities.

4 Borrowing Costs

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

part of the cost of that asset in accordance with Accounting Standard 16 issued by ICAI on “Borrowing Costs”. Other borrowing

costs are recognized as an expense in the year in which they are incurred. Capitalization of borrowing costs ceases when substantially

all activities necessary to prepare the qualifying asset for its intended use or sale are complete.

5 Investments

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

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

(ii) Long-term investments are carried out at cost and provisions are recorded to recognize any decline, other than temporary, in


6 Taxation

Provision for tax consists of current tax and deferred tax. Current tax provision is computed on current income based on the tax

liability after considering allowances and exemptions. Deferred tax assets and liabilities are computed on the timing differences at

the balance sheet date between the carrying amount of assets and liabilities and their respective tax bases. Deferred tax assets are

recognized based on management estimates of available future taxable income and assessing its certainty.


(i) Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated

at year-end rates.

(ii) The difference in translation of monetary assets and liabilities and realized gains and losses on foreign exchange transactions,

are recognized in the profit and loss account.


1 Country of Incorporation

Neeman Medical International B.V. (“Neeman B.V.”) is incorporated and operates under the applicable laws of The Netherlands.

2 Basis of Preparation and Translation into Indian Rupees

(i) These financial statements have been prepared for the purpose of compliance with the provisions of Section 211 and Section

212 of the Indian Companies Act, 1956 and have been translated to Indian Rupees (Rs.) in accordance with Accounting

8 NMI BV.p65 8/19/2009, 12:31 PM371




Standard-11 issued by ICAI on ‘The Effects of Changes in Foreign Exchange Rates’. The functional currency of the Company is

United States Dollar (US$).

(ii) The translation of foreign currency into Rs. has been carried out:

a) For assets and liabilities (both monetary and non-monetary items) using the rate of exchange prevailing on the balance

sheet date (1US$ = Rs.52.1743 as at March 31, 2009 and 1US$ = Rs. 39.9000 as at March 31, 2008).

b) For revenues and expenses using average exchange rates prevailing during the reporting period (1US$ = 46.5739 for the

year April 1, 2008 to March 31, 2009 and 1US$ = 40.4221 for the year April 1, 2007 to March 31, 2008).

c) Resulting exchange differences are taken into foreign currency translation reserve as required under Accounting Standard-

11.

3 Contingent Liabilities – Rs. Nil

4 The Company operates in a single business segment, viz. Clinical Research. In view of the general clarification issued by the

Institute of Chartered Accountants of India for companies in single segment, the disclosure requirements as per Accounting Standard

– 17 on “Segment Reporting” are not applicable.

5 Deferred Tax:

Deferred tax liability/asset is not recognized since there are no timing differences between the carrying amount of assets and

liabilities and their respective tax bases.


(i) Holding Company Max India Limited, India

(ii) Subsidiaries Neeman Medical International NV, Max Neeman Medical International Inc., USA.

(iii) Fellow Subsidiaries Max New York Life Insurance Company Ltd., Max Healthcare Institute Ltd., Max Medical Services Ltd.,

Alps Hospital Ltd., Max Neeman Medical International Ltd., Pharmax Corporation Ltd., Max Ateev Ltd.,

Max UK Ltd., Max HealthStaff International Ltd, .


are as follows:

RUPEES

Holding Company Subsidiaries

(i) Share application money paid - -

(-) (28,644)

(ii) Received against share application money pending allotment - 1,164,348

(-) (-)

(iii) Amount Outstanding

Against share application money paid - 81,480,011

(-) (63,380,876)

Against share application money received 72,324,900 -

(72,324,900) (-)


8 NMI BV.p65 8/19/2009, 12:31 PM372







March 31, 2009 March 31, 2008

Basic and Diluted

Profit/(Loss) after tax (1,135,804) (1,211,351)


EPS (Rupees) (29,890) (31,878)




8 The Company does not have any finance/operating lease arrangement.

9 Other disclosure requirements of Schedule VI to the Companies Act, 1956 are not applicable to the Company.



New Delhi ANALJIT SINGH DirectorJUNE 18, 2009 NEERAJ BASUR Director

8 NMI BV.p65 8/19/2009, 12:31 PM373





Registration No. 8 1 0 7 . 3 3 . 8 8 2 State Code N A


Date Month Year



N I L N I L

Bonus Issue Private Placement/Others

N I L N I L


1 1 1 3 6 9 4 1 1 1 3 6 9 4

SOURCES OF FUNDPaid-up Capital Share Application Money

8 2 6 7 2 3 2 5

Reserve and Surplus Unsecured Loans

1 0 4 0 5 4 3 N I L


N I L 4 9 2 2 0 4


8 0 9 5 7 N I L

Accumulated Losses Foreign Currency Translation Reserve

5 4 0 5 3 3 N I L


1 1 7 1 2 5 3

+ - Profit /Loss for the year - Exceptional Item

1 1 3 6 N I L

Basic + - Earning per Share in Rs. Dividend Rate (%)

2 9 8 9 0 N I L

Diluted + -

2 9 8 9 0


Product Description C L I N I C A L R E S E A R C H

√

√

√

√

8 NMI BV.p65 8/19/2009, 12:31 PM374

NEEMAN MEDICAL INTERNATIONAL N.V.




2009.

OPERATIONS

Your Company’s principal activity is that of an intermediate holding

company for a group that provides clinical research services to

various pharmaceutical companies around the world. During the

year under review, your Company posted a net profit of Rs.5.17 lacs

(previous year loss was Rs. 896.88 lacs).

DIVIDEND

In view of the carry forward losses, your Directors do not recommend


DIRECTORS

The Board currently comprises of Mr. Analjit Singh, Mr. Neeraj Basur

and Maprima Management BV.





As per the provisions of Section 217(2AA) of the Indian Companies

Act, 1956, the Directors confirm that:















concern basis.

OTHER PARTICULARS


Companies Act, 1956 are not applicable to your Company.

AUDITORS






June 18, 2009 ANALJIT SINGH Director

Directors’ Report

9 Neeman NV.p65 8/19/2009, 12:31 PM377



TO THE MEMBERS OF NEEMAN MEDICAL INTERNATIONAL N.V.

1. We have audited the attached Balance Sheet of Neeman

Medical International N.V., as at March 31, 2009, and the











material misstatement. An audit includes examining, on a test

basis, evidence supporting the amounts and disclosures in the








Order, 2004, issued by the Central Government of India in terms

of sub-section (4A) of Section 227 of ‘The Companies Act,

1956’ of India (the ‘Act’) and on the basis of such checks of

the books and records of the company as we considered

appropriate and according to the information and explanations

given to us, we further report that:

i The Company does not have fixed assets.

ii There are no stocks with the Company and third parties

iii (a) The company has not granted any loans, secured or

unsecured, to companies, firms or other parties

covered in the register maintained under Section 301

of the Act.



covered in the register maintained under Section 301

of the Act.

iv In our opinion and according to the information and

explanations given to us, having regard to the explanation

that certain items purchased are of special nature for

which suitable alternative sources do not exist for

obtaining comparative quotations, there is an adequate

internal control system commensurate with the size of

the company and the nature of its business for the sale

of services. Further, on the basis of our examination of

the books and records of the company, and according to

the information and explanations given to us, we have

neither come across nor have been informed of any

continuing failure to correct major weaknesses in the

aforesaid internal control system.

v According to the information and explanations given to

us, there have been no contracts or arrangements referred

to in Section 301 of the Act during the year to be entered

in the register required to be maintained under that

Section. Accordingly, commenting on transactions made

in pursuance of such contracts or arrangements does not

arise.

vi The company has not accepted any deposits from the

public within the meaning of Sections 58A and 58AA of

the Act and the rules framed there under.

vii In our opinion, the company has an internal audit system


viii The Central Government of India has not prescribed the




ix (a) According to the information and explanations given

to us and the records of the company examined by

us, in our opinion, the company is generally regular

in depositing the undisputed statutory dues including

provident fund, investor education and protection

fund, employees’ state insurance, income-tax, sales-




(b) According to the information and explanations given


us, there are no dues of income-tax, sales tax, wealth

tax, service tax, customs duty, excise duty and cess

which have not been deposited on account of any

dispute.

x The company has accumulated losses, as at March 31,


not incurred cash loss in the financial year ended on that

Auditors’ Report

9 Neeman NV.p65 8/19/2009, 12:31 PM378



date. The Company has incurred cash losses in the

immediately preceding financial year.

xi According to the records of the company examined by us

and the information and explanation given to us, the

company has not defaulted in repayment of dues to any

financial institution or bank or debenture holders as at

the balance sheet date.

xii The company has not granted any loans and advances on

the basis of security by way of pledge of shares,


xiii The provisions of any special statute applicable to chit



xiv In our opinion, the company is not a dealer in shares,


xv In our opinion, and according to the information and

explanations given to us, the company has not given any

guarantee for loans taken by others from banks or


xvi The company has not taken any term loans.

xvii On the basis of an overall examination of the balance





xviii The company has not made any preferential allotment of


maintained under Section 301 of the Act during the year.

xix The company has not issued any debentures during the

year.

xx The company has not raised any money by public issues

during the year.

xxi During the course of our examination of the books and




us, we have neither come across any instance of fraud on

or by the company, noticed or reported during the year,

nor have we been informed of such case by the

management.








(c) The Balance Sheet, Profit and Loss Account and Cash Flow

Statement dealt with by this report are in agreement with

the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account

and Cash Flow Statement dealt with by this report comply

with the accounting standards referred to in sub-section

(3C) of Section 211 of the Act;


directors, as on March 31, 2009 and taken on record by

the Board of Directors, none of the directors is disqualified

as on March 31, 2009 from being appointed as a director

in terms of clause (g) of sub-section (1) of Section 274 of

the Act;



financial statements together with the notes thereon and

attached thereto give in the prescribed manner the




(i) in the case of the Balance Sheet, of the state of affairs

of the company as at March 31, 2009;



(iii) in the case of the Cash Flow Statement, of the cash

flows for the year ended on that date.

V.NIJHAWAN

Partner





Auditors’ Report

9 Neeman NV.p65 8/19/2009, 12:31 PM379



RUPEES


SOURCES OF FUNDS


Share Capital 1 2,680,703 2,680,703

Share Application Money Pending Allotment 70,589,282 71,842,827

Reserves and Surplus 2 1,114,041,439 1,037,366,452

1,187,311,424 1,111,889,982


INVESTMENTS 3 39,130,725 29,925,000


Cash and Bank Balances 4 8,316,877 8,335,141

Loans and Advances 5 295,391,789 225,923,886

303,708,666 234,259,027

LESS: CURRENT LIABILITIES AND PROVISIONS 6 17,690,397 14,974,303



1,187,311,424 1,111,889,982





V. NIJHAWAN iPartner ANALJIT SINGH DirectorMembership No. F 87228 NEERAJ BASUR DirectorFor and on behalf ofPrice WaterhouseChartered Accountants


9 Neeman NV.p65 8/19/2009, 12:31 PM380




RUPEES


INCOME

Other Income 7 4,040,980 2,892,146

4,040,980 2,892,146

EXPENDITURE

Administration and Other Expenses 8 3,504,066 92,551,744

Finance Charges 9 19,086 29,013

3,523,152 92,580,757

PROFIT/(LOSS) FOR THE YEAR 517,828 (89,688,611)


BALANCE TRANSFERRED TO THE BALANCE SHEET (862,162,430) (862,680,258)

Earnings per Share


- Basic and Diluted 4,143 (717,509)

Number of ordinary shares used in computing earnings per share







9 Neeman NV.p65 8/19/2009, 12:31 PM381




RUPEES


A. CASH FLOW FROM OPERATING ACTIVITIESProfit/(Loss) for the year 517,828 (89,688,611)

Adjustments for:Interest Income (31,007) (2,892,146)Debit Balances Written Off - 65,857,744Loss on Sale of Investments - 20,404,801Unrealised Foreign Exchange (Gain)/Loss (4,009,973) 792,991

Operating (Loss) Before Working Capital Changes (3,523,152) (5,525,221)

Adjustments for:Other Receivables (69,467,903) 23,170,536Trade Payables 6,732,500 107,651

Cash From/(Used in) Operating Activities (66,258,555) 17,752,966

B. CASH FLOW FROM INVESTING ACTIVITIESSale of Investments - 10,509,746Interest Received 31,007 140,088

Cash From investing Activities 31,007 10,649,834

C. CASH FLOW FROM FINANCING ACTIVITIESShare Application Money Received/(Refunded) (1,253,545) 28,280

Cash From/(Used in) Financing Activities (1,253,545) 28,280

Increase/(Decrease) in Cash and Cash Equivalents (67,481,093) 28,431,080

Impact of Foreign Exchange Fluctuations 67,462,829 (23,855,574)

Net Increase/(Decrease) in Cash and Cash Equivalents (18,264) 4,575,506

Cash and Cash Equivalents As At March 31, 2008 8,335,141 3,759,635


Net Increase/(Decrease) in Cash and Cash Equivalents (18,264) 4,575,506

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 Balance with Bank: RUPEES


Balance with Bank-Rabo Bank NV (The Netherlands) 8,316,877 8,335,141






9 Neeman NV.p65 8/19/2009, 12:31 PM382



RUPEES


SCHEDULE-1SHARE CAPITAL

Authorised

225 (Previous year 225) Ordinary Shares of Euro 500 each 4,796,660 4,796,660

Issued, Subscribed and Paid Up

125 (Previous year 125) Ordinary Shares of Euro 500 each 2,680,703 2,680,703

Of the above 125 (Previous year 125) Ordinary Shares of Euro 500 each

are held by Neeman Medical International BV, the Holding Company

(Ultimate Holding Company, Max India Limited)

SCHEDULE-2RESERVES AND SURPLUS

As at Additions Delitions/ As atApril 1, 2008 Utilisations March 31, 2009

Share Premium 1,097,542,697 - - 1,097,542,697

Foreign Currency Translation Reserve (60,176,245) 76,674,987 - 16,498,742

1,037,366,452 76,674,987 - 1,114,041,439


SCHEDULE-3INVESTMENTS

(Refer Note A5 on Schedule 10)

Long Term-Trade (Unquoted)

Subsidiaries, at cost

325 (Previous year 325 ) shares having no par value in Max Neeman

Medical International Inc. 39,130,725 29,925,000

39,130,725 29,925,000

SCHEDULE - 4


Balance with Non-Scheduled Banks in Current Accounts

Rabo Bank NV* 8,316,877 8,335,141

8,316,877 8,335,141

* Maximum amount outstanding during the year Rs. 10,859,308/- (Previous year Rs. 11,553,067/-)


9 Neeman NV.p65 8/19/2009, 12:31 PM383




(RS. LACS)


SCHEDULE-5

LOANS AND ADVANCES(Considered Good, Unless Otherwise Stated)

Unsecured

Advances to Subsidiary

- Max Neeman Medical International Inc.** 384,832,020 294,298,104

Less: Provision for Diminution (89,604,754) 295,227,266 (68,524,727)


295,391,789 225,923,886

** Maximum amount outstanding during the year Rs. 384,832,020/- (Previous year Rs. 294,298,104/-)

SCHEDULE-6


Sundry Creditors***

-Total Outstanding Dues of Creditors Other Than Micro Enterprises

& Small Enterprises 4,935,447 5,081,845

Utlimate Holding Company - Max India Limited 9,256,986 9,256,986

Other Liabilities 3,497,964 635,472

17,690,397 14,974,303*** There are no dues to creditors under the definition of Micro Enterprises &

Small Enterprises as at March 31, 2009 and March 31, 2008


March 31, 2009 March 31, 2008

SCHEDULE-7

OTHER INCOME

Interest

- Loan - 2,752,058

- Others 31,007 140,088

Profit on Foreign Exchange Fluctuation 4,009,973 -

4,040,980 2,892,146

SCHEDULE-8

ADMINISTRATION AND OTHER EXPENSES

Legal and Professional 1,120,355 5,473,491

Auditors’ Remuneration 25,709 22,717

Rates and Taxes 2,358,002 -

Debit Balances Written Off - 65,857,744

Loss on Sale of Investment - 20,404,801

Loss on Foreign Exchange Fluctuation - 792,991

3,504,066 92,551,744

SCHEDULE-9

FINANCE CHARGES


19,086 29,013

9 Neeman NV.p65 8/19/2009, 12:31 PM384




SCHEDULE-10




1956.




3 Expenditure


4 Borrowing Costs




all activities necessary to prepare the qualifying asset for its intended use or sale are complete.

5 Investments

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

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

(ii) Long-term investments are carried out at cost and provisions are recorded to recognize any decline, other than temporary, in


6 Taxation

Provision for tax consists of current tax and deferred tax. Current tax provision is computed on current income based on the tax


the balance sheet date between the carrying amount of assets and liabilities and their respective tax bases. Deferred tax assets are




at year-end rates.





Neeman Medical International N.V. is incorporated and operates under the applicable laws of The Netherlands.








sheet date (1US$ = Rs. 52.1743 as at March 31, 2009 and 1US$ = Rs. 39.9000 as at March 31, 2008).

9 Neeman NV.p65 8/19/2009, 12:31 PM385




b) For revenues and expenses using average exchange rates prevailing during the reporting period (1US$ = Rs. 46.5739 for

the year April 1, 2008 to March 31, 2009 and 1US$ = Rs. 40.4221 for the year April 1, 2007 to March 31, 2008).

c) Resulting exchange differences are taken into foreign currency translation reserve as required under Accounting

Standard-11.

3 Consequent to an audit conducted by VAT authorities of Netherlands for the period between December 6, 2001 and December 31,

2005, an assessment report raising a demand of Rs. 10,900,529/- had been earlier raised on the company for which objection was

filed. During the financial year an amount of Rs. 2,660,515/- was paid as full and final settlement and the matter in dispute has

been resolved.

4 Segment Reporting:

Business Segments (Primary)

The Company operates only in one business segment viz. Clinical Trial Services. Accordingly there are no reportable business

segments.

Geographical Segments (Secondary)

Netherlands North America Total

(i) Revenue from external customers - - -

(-) (-) (-)

(ii) Carrying amount of segment assets by location of assets 8,481,400 334,357,991 342,839,391

(8,485,650) (255,698,377) (264,184,027)

(iii) Cost to acquire tangible and intangible fixed assets by

location of assets - - -

(-) (-) (-)


5 Deferred Tax:

Deferred tax liability/asset is not recognized since there are no timing differences between the carrying amount of assets and

liabilities and their respective tax bases.


(i) Holding Company Neeman Medical International BV, Netherlands

(ii) Ultimate Holding Company Max India Limited, India

(iii) Subsidiary Max Neeman Medical International Inc., USA

(iv) Fellow Subsidiaries Max New York Life Insurance Company Ltd., Max Healthcare Institute Ltd., Max Medical

Services Ltd., Alps Hospital Ltd, Max Neeman Medical International Ltd., Pharmax Corporation

Ltd., Max Ateev Ltd., Max UK Ltd., Max HealthStaff International Ltd.,

9 Neeman NV.p65 8/19/2009, 12:31 PM386





are as follows:

RUPEES

Holding Ultimate Subsidiaries Fellow

Company Holding Company Subsidiaries

(i) Interest Income - - - -

(-) (-) (2,752,058) (-)

(ii) Reimbursement of Expenses - - - -

(-) (503,996) (1,758) (-)

(iii) Share Application Money Received - - - -

(28,280) (-) (-) (-)

(iv) Share Application Money Refunded 1,253,545 - - -

(-) (-) (-) (-)

(v) Loan Given - - - -

(-) (-) (1,657,306) (-)

(vi) Amount Outstanding

- Other Receivables - - 384,832,020 -

(-) (-) (294,298,104) (-)

- Other Payables - 9,256,986 - 3,796,933

(-) (9,256,986) (-) (4,075,800)

- Against share application money received 70,589,282 - - -

(71,842,827) (-) (-) (-)





March 31, 2009 March 31, 2008

Basic and Diluted

Profit/(Loss) after tax (Rupee) 517,828 (89,688,611)


EPS (Rupees) 4,143 (717,509)




8 The Company does not have any Finance/Operating Lease arrangement.





9 Neeman NV.p65 8/19/2009, 12:31 PM387





Registration No. 1 . 1 8 4 . 3 6 3 State Code N A


Date Month Year



N I L N I L


N I L 2 8


1 1 8 7 3 1 1 1 1 8 7 3 1 1

SOURCES OF FUNDPaid-up Capital Share Application Money

2 6 8 1 7 0 5 8 9

Reserve and Surplus Unsecured Loans

1 1 1 4 0 4 1 N I L


N I L 3 9 1 3 1


2 8 6 0 1 8 N I L

Accumulated Losses

8 6 2 1 6 2


4 0 4 1 3 5 2 3

+ - Profit for the Year

5 1 8

Basic + - Earning per Share in Rs. Dividend Rate (%)

4 1 4 3 N I L

Diluted + - Earning per Share in Rs.

4 1 4 3


Product Description C L I N I C A L R E S E A R C H

√

√

√

9 Neeman NV.p65 8/19/2009, 12:31 PM388

MAX NEEMAN MEDICAL INTERNATIONAL INC.

(formerly Neeman Medical International INC.)




2009.

PRINCIPAL ACTIVITY /OPERATIONS

The Principal activity of your Company is to develop new business

opportunities in the field of Clinical Trials for Contract Research

Organizations (CRO) and provide business development support in

US, Europe and Canada to Max Neeman Medical International

Limited (“Max Neeman”), a group company, which is also a CRO.

Your Company’s business developments efforts brought lots of

valuable clients to Max Neeman Medical International Limited in

various therapeutic areas such as oncology, cardiology, infectious

diseases, endocrinology, medical devices, ophthalmology and rescue

studies amounting to approx. US$ 1.0 million. Yours Company is

also looking to find business partners in USA and Europe for Max

Neeman.

During the year under review, your Company incurred a net loss of

Rs.4.04 lacs as against previous year profit of Rs.62.33 lacs.

DIVIDEND

In view of the losses, your Directors do not recommend any dividend

for the year under review.

DIRECTORS

The Board currently comprises of Mr. Analjit Singh and Mr. Neeraj

Basur.






Act,1956, the Directors confirm that:




(ii) the Directors had selected such accounting policies and


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



that period;







concern basis.

OTHER PARTICULARS


Indian Companies Act, 1956 are not applicable.

AUDITORS




ACKNOWLEDGEMENTS

Your Directors would like to place on record their gratitude for the

co-operation and support extended to the Company by its

employees, customers and the Government.


New Delhi Neeraj Basur Director

JUNE 18, 2009 Analjit Singh Director

Directors’ Report

10 Neeman INC.p65 8/19/2009, 12:31 PM391




Auditors’ Report

TO THE MEMBERS OF MAX NEEMAN MEDICAL INTERNATIONAL Inc.

1. We have audited the attached Balance Sheet of Max Neeman

Medical International Inc. as at March 31, 2009, and the




statements are the responsibility of the Company’s



















of the books and records of the Company as we considered



i. (a) The Company is maintaining proper records



(b) The fixed assets of the Company have been



book records and the physical inventory have been

noticed. In our opinion, the frequency of

verification is reasonable.



of fixed assets has not been disposed of by the

Company during the year.

ii. There are no stocks with the Company and third parties.

iii. (a) The Company has not granted any loans, secured



301 of the Act.

(b) The Company has not taken any loans, secured or



301 of the Act.







the size of the Company and the nature of its business

for the purchase of fixed assets and for the sale and

services. Further, on the basis of our examination of

the books and records of the Company, and according





v. (a) In our opinion and according to the information

and explanations given to us, the particulars of

contracts or arrangements referred to in Section

301 of the Act have been entered in the register

required to be maintained under that section.

(b) In our opinion and according to the information

and explanations given to us, there are no

transactions made in pursuance of such contracts

or arrangements and exceeding the value of

Rupees Five Lakhs in respect of any party during

the year, which have been made at prices which

are not reasonable having regard to the prevailing

market prices at the relevant time.

vi. The Company has not accepted any deposits from the



vii. The Company did not have an internal audit system

during the year.



10 Neeman INC.p65 8/19/2009, 12:31 PM392





products of the Company.


given to us and the records of the Company

examined by us, in our opinion, the Company is


statutory dues, investor education and protection

fund, income-tax, sales-tax, wealth tax, service tax,

customs duty, excise duty, cess and other material

statutory dues as applicable with the appropriate

authorities. As informed, the provisions relating to

Employees Provident Fund and Miscellaneous

Provisions Act, 1952 and Employees State Insurance

are not applicable to the Company.


given to us and the records of the Company





x. The Company has accumulated losses, as at March 31,



date. The Company has not incurred cash losses in the


xi. According to the records of the Company examined by


the Company has not defaulted in repayment of dues

to any financial institution or bank or debenture holders


xii. The Company has not granted any loans and advances





applicable to the Company.

xiv. In our opinion, the Company is not a dealer or trader in

shares, securities, debentures and other investments.


explanations given to us, the Company has not given

any guarantee for loans taken by others from banks or


xvi. The Company has not obtained any term loans.


sheet of the Company, in our opinion and according to




xviii. The Company has not made any preferential allotment



the year.

xix. The Company has not issued any debentures during the

year.

xx. The Company has not raised any money by public issues

during the year.


records of the Company, carried out in accordance with




on or by the Company, noticed or reported during the


management.

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

that:





law have been kept by the Company so far as appears













Auditors’ Report

10 Neeman INC.p65 8/19/2009, 12:31 PM393














affairs of the Company as at March 31, 2009;

Auditors’ Report





V.NIJHAWAN

Partner





10 Neeman INC.p65 8/19/2009, 12:31 PM394




RUPEES


SOURCES OF FUNDS


Share Capital 1 36,607,500 36,607,500

Reserves and Surplus 2 - 37,008,485

LOAN FUNDS

Unsecured Loans 3 384,832,020 294,298,104

421,439,520 367,914,089


FIXED ASSETS 4

Gross Block 3,999,661 3,753,663

Less: Depreciation 3,545,818 2,661,716

Net Block 453,843 1,091,947


Sundry Debtors 5 - -

Bank Balances 6 987,878 739,019


9,864,912 4,842,329

Less: CURRENT LIABILITIES AND PROVISIONS

Current Liabilities 8 9,635,625 5,065,486

NET CURRENT ASSETS 229,287 (223,157)


FOREIGN CURRENCY TRANSLATION RESERVE 2 53,306,784 -

421,439,520 367,914,089








10 Neeman INC.p65 8/19/2009, 12:31 PM395





RUPEES


INCOME

Service Income 9 26,693,681 27,350,118

Other Income 10 112,240 4,435,971

26,805,921 31,786,089

EXPENDITURE

Personnel, Operating and Administration Expenses 11 26,693,956 24,888,918

Depreciation 4 516,272 663,907

27,210,228 25,552,825

PROFIT / (LOSS) FOR THE YEAR (404,307) 6,233,264



Earnings Per Share (Rs. per Common Share)

- Basic and Diluted (1,244) 19,179


Number of shares used in computing earning per share



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





10 Neeman INC.p65 8/19/2009, 12:31 PM396





RUPEES


A. CASH FLOW FROM OPERATING ACTIVITIESNET PROFIT/(LOSS) For the year (404,307) 6,233,264

Adjustments for:Depreciation 516,272 663,907Liabilities written back (37,678) (3,898,646)Debit balances written off 25,181Net (Profit)/Loss on Fixed Assets Sold (74,562) -

Operating Profit/(Loss) Before Working Capital Changes (275) 3,023,706Adjustments for:Trade Receivables - 1,593,553Trade Payables 4,607,817 (2,449,115)Other Current Assets (4,773,724) (2,779,282)

Cash From/(Used in) Operating Activities (166,182) (611,138)

B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed Assets (63,456) -Proceeds from Sale of Fixed Assets 491,235 12,405

Cash From/(Used In) Investing Activities 427,779 12,405

C. CASH FLOW FROM FINANCING ACTIVITIESAdvances from Group Companies 90,533,916 (25,690,671)

Cash From/(Used In) Financing Activities 90,533,916 (25,690,671)

Net Increase/(Decrease) in Cash and Cash Equivalents 90,795,513 (26,289,404)Impact of Foreign Exchange Fluctuations (90,546,654) 26,659,161

248,859 369,757

Cash and Cash Equivalents at the beginning of the year 739,019 369,262Cash and Cash Equivalents at the closing of the year 987,878 739,019

Net Increase/(Decrease) in Cash and Cash Equivalents 248,859 369,757

Notes:1 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 Balance with Bank: RUPEES


Balance with Bank 987,878 739,019987,878 739,019





For and on behalf ofPrice WaterhouseChartered AccountantsGurgaon New DelhiJUNE 18, 2009 JUNE 18, 2009

10 Neeman INC.p65 8/19/2009, 12:31 PM397




RUPEES



Authorised

Common Stock having no par value, 1,500 shares - -

Issued, Subscribed and Paid Up

325 (Previous year 325) shares having no par value 36,607,500 36,607,500

(Held by the Holding Company, Neeman Medical International, NV )

(Ultimate holding company, Max India Limited)

36,607,500 36,607,500

SCHEDULE - 2RESERVES AND SURPLUS

Foreign Currency Translation Reserve

(Refer Note B2(ii) on Schedule 12)

Opening Balance 37,008,485 10,496,771

Adjustment during the year (90,315,269) 26,511,714

(53,306,784) 37,008,485

SCHEDULE - 3

UNSECURED LOANS

Unsecured Loan from the Holding Company (Repayable on Demand) 384,832,020 294,298,104

384,832,020 294,298,104


SCHEDULE - 4

FIXED ASSETS

(Refer Notes A4, A5 and A6 on Schedule 12)

RUPEES


Particulars As at Additions Deletions Translation As at As at Additions Deletions Translation As at As at As at

April 1, during during Reserve March 31, April 1, during during Reserve March 31, March 31, March 31,

2008 the year the year 2009 2008 the year the year 2009 2009 2008

Tangible Assets

Computers 1,389,972 58,044 - 434,572 1,882,588 1,145,562 288,084 - 387,019 1,820,665 61,923 244,410

Furniture and Fittings 1,745,241 5,431 152,763 519,164 2,117,073 1,198,818 193,258 52,620 385,697 1,725,153 391,920 546,423

Vehicles 618,450 - 721,895 103,445 - 317,336 34,930 405,346 53,080 - - 301,114

Total 3,753,663 63,475 874,658 1,057,181 3,999,661 2,661,716 516,272 457,966 825,796 3,545,818 453,843 1,091,947

Previous year 4,103,123 - 15,138 (334,322) 3,753,663 2,187,417 663,907 2,733 (186,875) 2,661,716 1,091,947

10 Neeman INC.p65 8/19/2009, 12:31 PM398





RUPEES


SCHEDULE - 5

SUNDRY DEBTORS

(Unsecured, Considered Good)

Debts exceeding six months - -

Other Debts - -

- -

SCHEDULE - 6

BANK BALANCE

With Non-Scheduled Bank in Current Account

- Wachovia Bank, North Carolina, USA* 987,878 739,019

987,878 739,019

*Maximum balance during the year Rs. 4,705,633 (Previous year - Rs. 3,195,710)

SCHEDULE - 7

LOANS AND ADVANCES


Advances to Companies under the Same Management ** 8,112,218 3,742,351

Less: Provision for doubtful advances - -

Advances Recoverable in Cash or in Kind or for Value to be Received 12,245 481

Security Deposits 116,649 93,196


8,877,034 4,103,310

**Amounts due from companies under the same management

- Max HealthStaff International Ltd. 47,092 47,092

- Max Neeman Medical International Ltd. 8,065,126 3,695,259

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

- Max HealthStaff International Ltd. 47,092 47,092

- Max Neeman Medical International Ltd. 8,065,126 3,659,259

SCHEDULE - 8

CURRENT LIABILITIES

Sundry Creditors***

-Total Outstanding Dues of Creditors Other Than Micro

Enterprises and Small Enterprises 487,290 131,540

Advances From Customers 8,881,795 4,739,673

Other Liabilities 266,540 194,273

9,635,625 5,065,486

***There are no dues to creditors coming under the definition of micro

Enterprises and small enterprises as at March 31, 2009 and March 31, 2008

10 Neeman INC.p65 8/19/2009, 12:31 PM399




RUPEES


SCHEDULE - 9

SERVICE INCOME

Business Development Services 26,693,681 27,350,118

26,693,681 27,350,118

SCHEDULE - 10

OTHER INCOME

Liabilities No Longer Required Written Back 37,678 3,898,646

Miscellaneous Income - 537,325

Profit on Sale of Fixed Assets 74,562 -

112,240 4,435,971

SCHEDULE - 11

PERSONNEL, OPERATING AND ADMINISTRATION EXPENSES

Personnel

Salaries, Wages and Bonus 15,205,126 14,323,763

Employee Benefits and Taxes 134,099 753,007

Staff Welfare 42,333 62,916

Recruitment 1,170,932 16,647

16,552,490 15,156,333

Operating and Administration

Rent 1,609,814 1,782,943

Repair and Maintenance-Others 489,593 619,695


Printing and Stationery 104,931 161,981

Advertisement and Publicity 1,278,995 680,624

Travelling and Conveyance 3,800,796 3,353,812

Communication 926,143 911,200

Insurance 211,134 260,660

Rates and Taxes 1,201,443 1,169,259

Bank Charges - 41,352

Debit Balances written off - 25,181

Miscellaneous Expenses 89,942 38,385

10,141,466 9,732,585

26,693,956 24,888,918


10 Neeman INC.p65 8/19/2009, 12:31 PM400





SCHEDULE - 12



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


1956.


Revenue from clinical trial services is recognised by reference to the stage of completion of clinical study projects subscribed with

pharmaceutical companies.

Revenue from business development services is recognised on accrual basis.

3 Expenditure


4 Fixed Assets

Fixed assets are stated at their original cost including freight, duties, taxes and other incidental expenses relating to acquisition

and installation.

5 Depreciation

Depreciation is charged on straight-line method over the estimated useful lives of the respective assets as follows:

Estimated

Useful Lives in Years

Furniture and fixtures 10

Computer equipment 4-10

Equipment 7-10

Vehicles 3

6 Borrowing Costs




all activities necessary to prepare the qualifying assets for its intended use or sale are complete.

7 Taxation


related revenue and expenses arise. Provision for tax consists of current 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 United Sates of America 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

10 Neeman INC.p65 8/19/2009, 12:31 PM401





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.

8 Employee Benefits

The Company used to maintain a 401(k) retirement savings plan for substantially all employees. Participation was subject to the

employee’s age and length of employment with the Company.

With effect from January 31, 2008, the Company has terminated its 401k plan completely.

The Company provides a comprehensive benefits package to all employees, which consist of health, life and disability insurance.


(i) Monetary assets and liabilities related to foreign transactions remaining unsettled at the end of the year are translated at

year-end rates.



10 Leases




Preliminary expenses represent expenses in connection with incorporation of the Company and are written off over a period of 5

years.



Neeman Medical International Inc. is incorporated and operates under the applicable laws of The United States of America.








sheet date (1US$ = Rs.52.1743 as on March 31, 2009 and 1US$ = Rs. 39.9000 as on March 31, 2008).

b) For revenues and expenses using average exchange rates prevailing during the reporting period (1US$ = 46.5739 for the

year April 1, 2008 to March 31, 2009 and 1US$ = 40.4221 for the year April 1, 2007 to March 31, 2008).


11.

3 Contingent liabilities: Rs. Nil

4 The Company leases office space and office equipments under various operating leases.

(i) Lease rentals recognized in the Profit and Loss account for the year are Rs. 1,609,814 (Previous year – Rs. 1,782,943).

(ii) The Company leases its corporate office under an operating lease which will be expiring on January 31, 2011.

(iii) Minimum rental commitments payable in future years under operating leases having an initial or remaining non-cancellable

terms of one year or more at March 31, 2009 are as follows:

10 Neeman INC.p65 8/19/2009, 12:31 PM402





RUPEES

March 31, 2009 March 31, 2008

Not later than one year 1,469,837 1,312,608

Later than one year and not later than five years 1,255,329 2,182,673

Total Minimum Rentals 2,725,166 3,495,281

5 Deferred Taxes:

The Company has not recognized the deferred tax assets as it is not probable that immediate future taxable profits will be available

against which the deductible temporary differences and unused tax losses can be utilized.


(i) Ultimate Holding Company Max India Ltd.

(ii) Holding Company Neeman Medical International NV

(iii) Fellow subsidiaries Max New York Life Insurance Company Ltd., Max Ateev Limited, Neeman Medical

International BV, Max Neeman Medical International Limited, Neeman Medical

International Latin America, S.A. (till October 26, 2007), Max Medical Services Ltd.,

Max Healthcare Institute Ltd, Max UK Ltd., Pharmax Corporation Ltd, Max HealthStaff

Intenational Limited, Alps Hospital Ltd. (w.e.f. April 6, 2006)


as follows:

RUPEES

Particulars Holding Company Fellow Subsidiaries Key Management

Personnel

Service Fees - 26,693,681 -

(-) (27,350,118) (-)

Loans taken - - -

(25,690,671) (-) (-)

Amount outstanding

- Other receivables - 8,112,218 -

(-) (3,742,351) (-)

- Against loan taken 384,832,020 - -

(294,298,104) (-) (-)

Figures in bracket are for previous year

7 Earnings per share (EPS)

Calculation of EPS (Basic and Diluted) RUPEES

Particulars For the year ended For the year ended

March 31, 2009 March 31, 2008

Basic and Diluted

Profit / (Loss) for the year (404,307) 6,233,264

Common Stock Outstanding 325 325

EPS (Rs.) (1,244) 19,179

Share Details (Nos.)



10 Neeman INC.p65 8/19/2009, 12:31 PM403






8 Auditors’ Remuneration RUPEES


- Audit Fee 46,574 20,211

Total 46,574 20,211

9 Segment Reporting

The Company operates only in one business segment viz. Business Development Services in United States of America. Accordingly

there are no reportable business segments.




10 Neeman INC.p65 8/19/2009, 12:31 PM404






Registration No. 0 5 6 5 2 5 5 State Code N A


Date Month Year



N I L N I L


N I L N I L


4 2 1 4 4 0 4 2 1 4 4 0


3 6 6 0 7 N I L


N I L 3 8 4 8 3 3


4 5 4 N I L


2 2 9 N I L

Accumulated Losses

4 2 0 7 5 7


2 6 8 0 6 2 7 2 1 0


4 0 4 4 0 4


1 2 4 4 N I L

+ - Diluted

1 2 4 4


Product Description B U S I N E S S D E V E L O P M E N T

√

√

√

√

√

10 Neeman INC.p65 8/19/2009, 12:31 PM405




10 Neeman INC.p65 8/19/2009, 12:31 PM406

MAX NEEMAN MEDICAL INTERNATIONAL LIMITED

(formerly NEEMAN MEDICAL INTERNATIONAL (ASIA) LIMITED)


Your Directors are pleased to present their Tenth Annual Report,


31, 2009.

FINANCIAL RESULTS

Your Company recorded a revenue of Rs 15 crore during the year

under review against Rs.11.05 crore for the previous year; an

increase of 36%. Your Company recorded a profit of Rs.1.18 crore

during the current year against a profit of Rs 0.08 crore for the

previous year. Your Company added 5 new clients during the year

under review, to take its total client base to 48.

BUSINESS PERFORMANCE

Max Neeman Medical International (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 800 ICH

GCP trained investigators. The team of over 120 clinical research

coordinators/clinical research associates present in 22 cities across

India gives it access to patients and investigator sites for various

therapeutic areas. Since commencement of its Indian operations,

over 5,800 subjects have been enrolled at over 200 sites out of

which over 2,100 patients were enrolled in fiscal 2008-09. An

impressive operating standard has 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.

Max Neeman is also awarded its 150th trial during the fiscal 2008-09.

MNMI built three two-way alliances in US and Europe with mid-

sized CROs and two strategic alliances for outsourcing business

development efforts in US.

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 whose 4 sites have been audited

successfully by USFDA for highest enrollment globally. MNMI has

been certified for ISO 9001:2000 for site management, monitoring,

and data management. All the activities and operations are governed

by robust Standard Operating Procedures (SOPs).

Clinical research industry is highly people-oriented requiring a lot

of focus on training and development. MNMI has 207 full time

employees, with majority holding medical and pharmacological

degrees. Extensive training program combined with best industry

practices resulted in best retention rates and helped MNMI attract

qualified personnel.

Patient retention rate, a critical business driver in clinical trials, is

at approximately 98% in MNMI. MNMI’s prestigious customers

include large pharmaceutical companies such as Merck,

GlaxoSmithKline, Bristol Myers Squibb, Sanofi-Aventis, Johnson &

Johnson, Novartis, AstraZeneca, Dabur and Wyeth as well as other

medium sized companies such as Achillion, Actelion, GlobeImmune,

AP Pharma, ORA, KV Pharmaceuticals and Onconova.

DIVIDEND

In view of the accumulated losses, your Directors do not recommend




the year under review. There were no unclaimed/overdue deposits

as at March 31, 2009.





as follows:







(Rs. crore)

For the For the


March 31, 2009 March 31, 2008






Others 2.78 2.84

Directors’ Report

11 MNMI.p65 8/19/2009, 12:32 PM409





The particulars of employees as required under Section 217 (2A) of

the Companies Act, 1956 are given in a separate annexure to this

report. This Annexure is not being sent along with this Report to

the members of the Company in line with the provisions of Section

219 (b) (iv) of the Companies Act. Members who are interested in

obtaining these particulars may write to the Company Secretary at

the Registered Office of the Company. None of the employees listed

in the said Annexure is a relative of any Director of the Company.

None of the employees hold (by himself or along with his spouse

and dependent children) more than 2% of the equity shares of the

Company.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, Mr.

Analjit Singh is liable to retire by rotation at the ensuing Annual

General Meeting and being eligible offer himself for re-appointment.







(ii) The Directors had selected such accounting policies and





that period;







concern basis.

AUDITORS


Auditors of the Company, retire at the conclusion of the ensuing

Annual General Meeting and are eligible for re-appointment. The

Company has obtained from them a Certificate to the effect, that





JULY 29, 2009 Chairman

Directors’ Report

11 MNMI.p65 8/19/2009, 12:32 PM410




TO THE MEMBERS OF MAX NEEMAN MEDICAL INTERNATIONAL

LIMITED

1. We have audited the attached Balance Sheet of Max NeemanMedical International Limited , as at March 31, 2009, and therelated Profit and Loss Account and Cash Flow Statement forthe year ended on that date annexed thereto, which we havesigned under reference to this report. These financialstatements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion onthese 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 atest basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessingthe accounting principles used and significant estimates madeby management, 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 interms of sub-section (4A) of Section 227 of ‘The CompaniesAct, 1956’ of India (the ‘Act’) and on the basis of such checksof the books and records of the Company as we consideredappropriate and according to the information andexplanations given to us, we further report that:

i. (a) The Company is maintaining proper recordsshowing full particulars including quantitativedetails and situation of fixed assets.

(b) The fixed assets of the Company have beenphysically verified by the management during theyear and no material discrepancies between thebook records and the physical inventory have beennoticed. In our opinion, the frequency ofverification is reasonable.

(c) In our opinion and according to the informationand explanations given to us, a substantial partof fixed assets have not been disposed of by theCompany during the year.

ii. There are no stocks with the Company or with the thirdparties.

iii. (a) The Company has not granted any loans, securedor unsecured, to companies, firms or other partiescovered in the register maintained under Section301 of the Act.

(b) The Company has not taken any loans, secured orunsecured, from companies, firms or other partiescovered in the register maintained under Section301 of the Act.

iv. In our opinion and according to the information andexplanations given to us, having regard to the explanationthat certain items purchased are of special nature for whichsuitable alternative sources do not exist for obtainingcomparative quotations, there is an adequate internal controlsystem commensurate with the size of the Company and thenature of its business for the purchase of fixed assets and forthe sale of goods and services. Further, on the basis of ourexamination of the books and records of the Company, andaccording to the information and explanations given to us,we have neither come across nor have been informed of anycontinuing failure to correct major weaknesses in the aforesaidinternal control system.

v. (a) In our opinion and according to the information andexplanations given to us, the particulars of contracts orarrangements referred to in Section 301 of the Act havebeen entered in the register required to be maintainedunder that section.

(b) In our opinion and according to the information andexplanations given to us, there are no transactions madein pursuance of such contracts or arrangements andexceeding the value of Rupees Five Lakhs in respect ofany party during the year, which have been made atprices which are not reasonable having regard to theprevailing market prices at the relevant time.

vi. The Company has not accepted any deposits from the publicwithin the meaning of Sections 58A and 58AA of the Act andthe 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 prescribed themaintenance of cost records under clause (d) of sub-section(1) of Section 209 of the Act for any of the products of theCompany.

ix. (a) According to the information and explanations givento us and the records of the Company examined by us,in our opinion, the Company is generally regular indepositing the undisputed statutory dues includingprovident fund, investor education and protection fund,employees’ state insurance, income-tax, sales-tax,wealth tax, service tax, customs duty, excise duty, cessand other material statutory dues as applicable withthe appropriate authorities.


Auditors’ Report

11 MNMI.p65 8/19/2009, 12:32 PM411




to us and the records of the Company examined by us,there are no dues of income-tax, sales tax, wealth tax,service tax, customs duty, excise duty and cess as atMarch 31,2009 which have not been deposited onaccount of any dispute.

x. The Company has accumulated losses, as at March 31, 2009more than fifty percent of its net worth and has not incurredcash loss in the financial year ended on that date. TheCompany had not incurred any cash losses in the immediatelypreceding financial year.

xi. According to the records of the Company examined by usand the information and explanation given to us, the Companyhas not defaulted in repayment of dues to any financialinstitution or bank or debenture holders as at the balancesheet date.

xii. The Company has not granted any loans and advances on thebasis of security by way of pledge of shares, debentures andother securities.

xiii. The provisions of any special statute applicable to chit fund/nidhi/ mutual benefit fund/ societies are not applicable tothe Company.

xiv. In our opinion, the Company has maintained proper records oftransactions and contracts relating to dealing or trading inshares, securities, debentures and other investments during theyear and timely entries have been made therein. Further, suchsecurities have been held by the Company in its own name.

xv. In our opinion, and according to the information andexplanations given to us, the Company has not given anyguarantee for loans taken by others from banks or financialinstitutions during the year.

xvi. The Company has not obtained any term loans.

xvii. On the basis of an overall examination of the balance sheetof the Company, in our opinion and according to theinformation and explanations given to us, there are no fundsraised on a short-term basis which have been used for long-term investment.

xviii. The Company has not made any preferential allotment ofshares to parties and companies covered in the registermaintained under Section 301 of the Act during the year.

xix. The Company has not issued any debentures during the year.

xx. The Company has not raised any money by public issues duringthe year.

xxi. During the course of our examination of the books and recordsof the Company, carried out in accordance with the generallyaccepted auditing practices in India, and according to theinformation and explanations given to us, we have neither

come across any instance of fraud on or by the Company,noticed or reported during the year, nor have we beeninformed of such case by the management.

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

(a) We have obtained all the information and explanations,which to the best of our knowledge and belief werenecessary 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 on recordby the Board of Directors, none of the directors isdisqualified as on March 31, 2009 from being appointedas a director in terms of clause (g) of sub-section (1) ofSection 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 manner theinformation required by the Act and give a true and fairview in conformity with the accounting principlesgenerally 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, of theprofit 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.NIJHAWAN

PartnerMembership Number F-87228

For and on behalf ofPrice Waterhouse

Chartered Accountants

GurgaonJUNE 18, 2009

Auditors’ Report

11 MNMI.p65 8/19/2009, 12:32 PM412




RUPEES


SOURCES OF FUNDS


Share Capital 1 42,168,130 42,168,130

LOAN FUNDS

Unsecured Loans 2 88,804,987 66,083,013

Deferred Tax Liability (Net) 3 - 103,097

130,973,117 108,354,240


FIXED ASSETS 4

Gross Block 33,414,338 30,435,585

Less: Depreciation 14,552,160 9,272,766

18,862,178 21,162,819

INVESTMENTS 5 - 1,345,641

Deferred Tax Asset (Net) 3 3,905,641 -


Sundry Debtors 6 75,104,831 28,855,806

Cash and Bank Balances 7 12,869,231 7,280,780

Other Current Assets 8 7,629,821 8,518,648


109,042,524 56,183,299

Less: CURRENT LIABILITIES AND PROVISIONS

Current Liabilities 10 56,526,519 41,289,087

Provisions 11 5,132,116 2,068,032

61,658,635 43,357,119



130,973,117 108,354,240





V. NIJHAWAN DR. PERVEZ AHMED DirectorPartner NEERAJ BASUR DirectorMembership No. F 87228 REENA ANEJA Company SecretaryFor and on behalf ofPrice WaterhouseChartered Accountants


11 MNMI.p65 8/19/2009, 12:32 PM413





RUPEES


INCOME

Income from Operations 12 139,702,463 102,992,455

Other Income 13 10,170,264 3,066,822

149,872,727 106,059,277

EXPENDITURE

Personnel, Operating and Administrative Expenses 14 134,600,130 99,060,730


Depreciation 4 5,279,394 4,957,336

139,910,018 104,338,687

PROFIT/(LOSS) BEFORE TAX 9,962,709 1,720,590

Tax Expense

- Fringe Benefit Tax 898,622 740,637

- Income Tax 874,633 -

- Deferred Tax (4,008,737) 141,335

PROFIT/(LOSS) AFTER TAX 12,198,191 838,618


Less : Transitional liability recognized pursuant to adoption

of AS-15 (Revised) on “Employee Benefits” - (74,260)

BALANCE CARRIED FORWARD TO BALANCE SHEET (60,821,409) (73,019,600)

Earning Per Share (Rs. per equity share of Rs. 10/- each)

- Basic and Diluted 2.93 0.20

(Refer Note B(6) on Schedule 16)

Number of shares used in computing earning per share

- Basic and Diluted 4,166,813 4,166,813






11 MNMI.p65 8/19/2009, 12:32 PM414





RUPEES



NET PROFIT/(LOSS) BEFORE TAX 9,962,709 1,720,590

Adjustments for:

Depreciation 5,279,394 4,957,336

Interest Income (147,188) (246,051)

Income from Investment - Dividend (73,858) (197,264)

Net (Profit)/Loss on Sale of Investments - 11,713

Liability no Longer Required Written Back - (1,534,565)

Unrealised Foreign Exchange (Gain)/Loss (2,251,949) (51,652)

Other Provisions 3,064,084 1,275,632


Adjustments for:

Trade Receivables (42,559,774) (21,660,385)

Other Receivables (3,119,911) (2,875,961)

Trade Payables 13,800,129 5,263,140

Other Current Assets (1,910,576) (7,494,538)

Cash Generated From Operations (17,956,939) (20,832,005)

Direct taxes refunded/(paid) 2,235,482 (778,875)

Cash From / (Used in) Operating Activities (15,721,457) (21,610,880)


Purchase of Fixed Assets (2,978,753) (4,206,301)

Proceeds from Sale of Investments 1,345,641 34,800,000

Purchase of Investments - (34,197,265)

Interest Received 147,188 246,051

Dividend Received 73,858 197,264

Cash From/ (Used In) Investing Activities (1,412,066) (3,160,251)


Unsecured loans 22,721,974 29,348,777

Cash From/ (Used In) Financing Activities 22,721,974 29,348,777


Cash and Cash Equivalents - As At March 31, 2008 7,280,780 2,703,134

Cash and Cash Equivalents - As At March 31, 2009 12,869,231 7,280,780


Notes

1 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 consists of cash and balances with banks:

11 MNMI.p65 8/19/2009, 12:32 PM415




RUPEES


Cash 54,644 70,237

Balances with Banks 12,814,587 7,210,543

12,869,231 7,280,780

3 Previous years’ figures have been regrouped wherever necessary to confirm to current years’ classification.






11 MNMI.p65 8/19/2009, 12:32 PM416





RUPEES


SCHEDULE-1SHAREHOLDERS’ FUNDS

SHARE CAPITAL

Authorised

4,250,000 (Previous year 4,250,000) Equity Shares of Rs. 10/- each 42,500,000 42,500,000

1,00,000 (Previous year 100,000) 13% Non-Cumulative 1,000,000 1,000,000

Redeemable Preference Shares of Rs. 10/- each

Issued, Subscribed and Paid up

4,166,813 (Previous year 4,166,813) Equity Shares of Rs. 10/- each 41,668,130 41,668,130

(held by Max India Limited, the holding company)

50,000 (Previous year 50,000) 13% Non-cumulative 500,000 500,000

Redeemable Preference Shares of Rs. 10/- each

(held by Max India Limited, the holding company)

(Refer Note B(2) on Schedule 16)

42,168,130 42,168,130

SCHEDULE - 2

UNSECURED LOANS

Unsecured Loan

-From Max India Limited [(the Holding Company) (repayable on demand)] 88,804,987 66,083,013

88,804,987 66,083,013

SCHEDULE - 3

DEFERRED TAX LIABILITY (NET)

(Refer Notes A(6) and B(3) on Schedule 16)


Opening Balance 3,924,755 1,433,527

Movement during the year (1,434,761) 2,491,228

Closing Balance 2,489,994 3,924,755

Deferred Tax Asset

Opening Balance (3,821,658) (1,433,527)

Impact of transitional liability on employee benefits - (38,238)

Movement during the year (2,573,977) (2,349,893)

Closing Balance (6,395,635) (3,821,658)

Net Deferred Tax Liability/(Asset) (3,905,641) 103,097

11 MNMI.p65 8/19/2009, 12:32 PM417





SCHEDULE - 4

FIXED ASSETS

(Refer Notes A(3), and A(4) on Schedule 16)

RUPEES


Particulars As at Additions As at As at For the As at As at As at

April 01, 2008 During the Year March 31, 2009 April 01, 2008 year March 31, 2009 March 31, 2009 March 31, 2008

Tangible Assets

Leasehold Improvements 2,995,760 180,000 3,175,760 2,039,623 345,213 2,384,836 790,924 956,137

Plant and Machinery 563,739 38,727 602,466 27,377 28,334 55,711 546,755 536,362

Furniture and Fixtures 1,136,685 199,581 1,336,266 361,635 145,014 506,649 829,617 775,050

Office Equipment 1,746,502 1,007,658 2,754,160 378,702 125,962 504,664 2,249,496 1,367,800

Computers 7,220,061 1,477,335 8,697,396 1,773,051 1,271,934 3,044,985 5,652,411 5,447,010

Intangible Assets

Software 11,043,994 75,452 11,119,446 3,072,606 2,217,168 5,289,774 5,829,672 7,971,388

Technical Know-How 5,728,844 - 5,728,844 1,619,772 1,145,769 2,765,541 2,963,303 4,109,072

Total 30,435,585 2,978,753 33,414,338 9,272,766 5,279,394 14,552,160 18,862,178 21,162,819

Previous year 26,229,284 4,206,301 30,435,585 4,315,430 4,957,336 9,272,766

Note: Leasehold improvements include civil and other improvements at Company’s Office.

RUPEES


SCHEDULE - 5

INVESTMENTS

(Refer Notes A(5) and B(8) on Schedule 16)

Current Non Trade (Unquoted), at Cost

Units in Mutual Fund - 1,345,641

- 1,345,641

Aggregate value of unquoted investments - 1,345,641

SCHEDULE - 6

SUNDRY DEBTORS

(Unsecured)


- Considered good 2,836,586 74,999

- Considered doubtful 1,511,650 591,969

Less: Provision for doubtful debts (1,511,650) (591,969)

2,836,586 74,999

Other Debts

- Considered good 72,268,245 28,780,807

75,104,831 28,855,806

11 MNMI.p65 8/19/2009, 12:32 PM418




RUPEES


SCHEDULE - 7


Cash in Hand 54,644 70,237

Balance with Scheduled Banks

-In Current Accounts 11,111,113 5,710,543

-In Fixed Deposit Accounts* 1,703,474 1,500,000

*held by Yes Bank Limited in lien of Bank Guarantee

(Refer Note B(1) on Schedule16) 12,869,231 7,280,780

SCHEDULE - 8

OTHER CURRENT ASSETS

Unbilled Income 7,519,660 8,320,845

Interest Receivable 110,161 197,803

7,629,821 8,518,648

SCHEDULE - 9

LOANS AND ADVANCES

(considered good)

Unsecured

Advances to companies under the same management * 549,356 -

Less: Provision made for doubtful advances - -

Advances recoverable in cash or in kind

or for value to be received 9,667,602 5,975,068

Less: Provision made for doubtful advances 6,435,296 3,232,306 -

Advance Income Tax [net of provision for tax

of Rs 1,780,198 (Previous year Rs 130,565)] 6,681,601 3,269,257

Prepaid Expenses 2,537,996 2,120,358


13,438,641 11,528,065*Amount recoverable from Pharmax Corporation Limited; maximum amount outstanding during the year being Rs 1,416,482 (Previous year Rs NIL)

SCHEDULE - 10

CURRENT LIABILITIES

Sundry Creditors

-Total Outstanding Dues of micro enterprises and small enterprises* - -

-Total Outstanding Dues of creditors other than micro enterprises

and small enterprises 32,562,237 20,082,180

Advances From Customers 19,518,306 16,038,310

Other Liabilities 4,445,976 5,168,597

56,526,519 41,289,087

*As certified by the management.


11 MNMI.p65 8/19/2009, 12:32 PM419




RUPEES


SCHEDULE - 11

PROVISIONS

(Refer Note A(7) and B(11) on Schedule 16)

Gratuity 1,183,803 671,325

Leave Encashment 3,948,313 1,396,707

5,132,116 2,068,032


SCHEDULE - 12

INCOME FROM OPERATIONS

(Refer Note A(2) on Schedule 16)

Clinical Trial Services * 126,439,199 96,348,964

Clinical Data Management Services 8,989,293 3,341,290

Others 4,273,971 3,302,201

139,702,463 102,992,455

* Tax deducted at source of Rs. 4,256,925 ( Previous year Rs. 2,472,074)

SCHEDULE - 13

OTHER INCOME

Interest (Gross) on :

-Fixed Deposits* 145,884 107,101

-Others 1,304 138,950

Dividend income from Non Trade Investments-Current 73,858 197,264

Liabilities no longer required written back - 1,534,565

Gain on Foreign Exchange Fluctuation (Refer Note A(8) on Schedule 16) 7,466,982 51,652

Miscellaneous Income 2,482,236 1,037,290

10,170,264 3,066,822

*Tax deducted at source of Rs. 30,052 (Previous year Rs. 22,063)


11 MNMI.p65 8/19/2009, 12:32 PM420




RUPEES


SCHEDULE - 14


Personnel Expenses

Salaries, Wages and Bonus 64,943,998 43,860,100

Contribution to Provident and Other Funds 2,289,189 1,545,983

Staff Welfare 2,178,861 1,262,966

Recruitment 177,832 2,160,170

69,589,880 48,829,219

Operating and Administrative Expenses

Clinical Trial Expenses 150 12,356

Rent 5,278,515 4,209,487

Electricity and Water 1,195,831 993,855

Repair and Maintenance-Others 5,919,337 3,885,092

Legal and Professional 2,411,362 2,357,492

Printing and Stationery 1,677,921 1,082,737

Business Promotion 628,425 516,504

Travelling and Conveyance 5,604,898 5,114,271

Communication Expenses 4,059,487 2,742,304

Training and Seminar Expenses 505,599 118,234

Insurance 1,771,574 1,278,828


Charity and Donation 208,185 332,000

Loss on sale of Non Trade Investments-Current - 11,713

License Fee-Software 1,426,064 101,863

Business Development Fee 26,705,453 27,182,937

Provision for Doubtful Debts 919,681 -

Provision for Doubtful Advances 6,435,296 -

Membership and Subscription 236,073 285,063


65,010,250 50,231,511

134,600,130 99,060,730

SCHEDULE - 15

FINANCIAL EXPENSES

Interest - Others 4,834 290,194


30,494 320,621


11 MNMI.p65 8/19/2009, 12:32 PM421





SCHEDULE - 16




1956.


Revenue from clinical trial services is recognised with reference to the stage of completion of clinical study projects subscribed

with pharmaceutical companies.

Revenue from clinical data management services is recognised with reference to the stage of completion of clinical data management

service projects subscribed with pharmaceutical companies.

3 Fixed Assets

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


(b) Expenses of revenue nature, which are related to project set-up, are transferred to “Pre operative 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 Depreciation / Amortisation

(i) Depreciation on fixed assets is provided on Straight-line method on a pro-rata basis as per rates prescribed under Schedule

XIV to the Companies Act, 1956.

(ii) Leasehold improvements are amortised over the respective periods of lease.

(iii) Assets costing not more than Rs. 5,000 each individually are depreciated at 100% in the year of addition.

(iv) Software/Technical Know-how in the nature of intangible assets are depreciated over a period of five years.

5 Investments

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


6 Taxation


related revenue and expense arise. Provision for tax consists of current tax and deferred tax. A provision is made for the 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 reversed 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 the prevailing enacted or substantially

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

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

7 Employee Benefits

(i) Gratuity

In accordance with the Payment of Gratuity Act, 1972, the Company provides gratuity, a benefit plan (the “Gratuity Plan”)

11 MNMI.p65 8/19/2009, 12:32 PM422





covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death,

incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of

employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, based upon which, the Company

contributes to a Master policy with the Life insurance Corporation of India.

(ii) Provident Fund


contributions under Provident Fund to “Regional Provident Fund Commissioner”. Both the employee and the Company make

monthly contributions to the above said office equal to a specific percentage of the covered employee’s salary.

(iii) Leave Encashment

Accrual for Leave encashment is made on the basis of actuarial valuation done at the year-end.



at year-end rates.

(ii) The difference in translation of monetary assets and liabilities and realised gains and losses on foreign exchange transactions


9 Leases





RUPEES


Bank Guarantees 1,500,000 1,500,000

2 The Company had issued 50,000 13% Non Cumulative Redeemable Preference shares of Rs. 10 each amounting to Rs. 500,000 on

December 9, 2002, which were due for redemption on December 09, 2006. With the consent of the Preference Shareholder and the

holding company i.e. Max India Limited; the Company had extended the date of redemption to December 09, 2009.

Also, the Company has not provided for any dividend on the above said Redeemable Preference Shares.

3 Deferred Tax

The break up and movement of deferred tax assets and deferred tax liabilities into major components is given below:

RUPEES

Particulars Opening as Movement Closing as at

at April 1, 2008 during the period March 31, 2009

Deferred Tax Asset

Deduction u/s 43B 1,299,793 286,031 1,585,824

Provision for Doubtful Debts/Advances 220,960 2,234,646 2,455,606

Bonus 2,300,905 53,300 2,354,205

Sub Total 3,821,658 2,573,977 6,395,635

Deferred Tax (Liability)

Depreciation (3,924,755) 1,434,761 (2,489,994)

Sub Total (3,924,755) 1,434,761 (2,489,994)

Net Deferred Tax (Liability)/Asset (103,097) 4,008,738 3,905,641

Note: Deferred tax assets are created to the extent of their realisability in future.

11 MNMI.p65 8/19/2009, 12:32 PM423





4 Accounting for leases has been done in accordance with Accounting Standard-19 issued by the Institute of Chartered Accountants

of India. Following are the details of lease transactions for the year:

(a) Finance Lease


(b) Operating Lease

(i) Lease rentals recognized in the Profit and Loss Account for the year are Rs. 5,278,515 (Previous year Rs. 4,209,487).

(ii) The company has entered into operating leases for its office and for employees’ residence that are renewable on a

periodic basis and cancelable at Company’s option. The company has not entered into sublease agreements in respect of

these leases.

(iii) There are no future commitments for lease payments for any of the above mentioned lease agreements.


(i) Holding Company Max India Ltd.

(ii) Fellow subsidiaries Max New York Life Insurance Company Ltd., Neeman Medical International BV, Neeman Medical

International NV, Max Neeman Medical International Inc. USA, Neeman Medical International,

Latin America, S.A. (till October 26, 2007), Pharmax Corporation Ltd., Max Ateev Limited, Max

UK Ltd., Max HealthStaff International Ltd., Max Healthcare Institute Limited, Max Medical

Services Limited, ALPS Hospital Limited (w.e.f. April 6, 2006).

(iii) Key Management Personnel Mr. B. Anantharaman


are as follows:

RUPEES

S No Particulars Holding Company Fellow Subsidiaries

1 Expenses

- Rent Expense 54,000 4,677,858

(54,000) (3,871,474)

- Business Development Fee - 26,705,453

(-) (27,182,937)

- Other Expenses - 1,109,015

(-) (3,589,168)

- Expenses Reimbursed 2,020,977 -

(2,307,788) (31,341)

2 Purchase of Fixed Assets 646,995 -

(-) (-)

3 Balance written off - -

(-) (1,524,064)

4 Loans taken 22,721,972 -

(29,348,777) (-)

5 Amount outstanding

- Against loan taken 88,804,985 -

(66,083,013) (-)

- Other receivables - 549,356

(-) (-)

- Other payables - 8,123,770

(-) (4,326,808)

Figures in brackets are for previous year.

11 MNMI.p65 8/19/2009, 12:32 PM424




6 Earnings per share (EPS)

Calculation of EPS (Basic and Diluted) RUPEES


March 31, 2009 March 31, 2008

Basic and Diluted

Profit/(Loss) after Tax (Rs.) 12,198,191 838,618

Weighted average number of Equity Shares 4,166,813 4,166,813

EPS (Rs.) 2.93 0.20

Share Details (Nos)


Issued during the year - -


7 Auditors’ Remuneration

RUPEES


- Audit Fee (including service tax) 45,000 44,944

8 Investments

The details of Investments are given below: RUPEES


Particulars Face Value Numbers as at Value as at Numbers as at Value as at

March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008

CURRENT NON TRADE

(UNQUOTED), AT COST


Kotak Liquid Fund – Dividend Scheme 10 - - 133,043 1,345,641

MOVEMENT IN CURRENT NON TRADE INVESTMENTS (UNQUOTED)

Purchase Sales

Name of Investment Face Value Unit (Numbers) Value Unit (Numbers) Value

Kotak Liquid Fund

- Dividend Scheme 10 1,805 73,858 134,848 1,419,499

9 Expenditure/Earning in Foreign Currency RUPEES


(a) Expenditure in Foreign Currency

Professional Fee and Business Development Fee 26,705,453 27,289,705

Travelling 1,056,146 1,135,643

(b) Earning in Foreign Currency

-Service Income 95,405,375 73,225,526


11 MNMI.p65 8/19/2009, 12:32 PM425





a) Business Segment: The Company has considered business segment as the primary segment for disclosure. The services considered

are Clinical Research and Clinical Data Management Services.

b) Geographical Segment: 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 RUPEES

Particulars Clinical Research Clinical Data Total

Management Services

a) Segment Revenue from:

- Service income from external customers 130,713,170 8,989,293 139,702,463

(100,797,531) (3,341,291) (104,138,822)

- Other Income 2,031,680 - 2,031,680

(1,002,671) (-) (1,002,671)

Total Segment Revenue 132,744,850 8,989,293 141,734,143

(101,800,202) (3,341,291) (105,141,493)

Add : Unallocated Income

Dividend, Interest Income and other Incomes 8,138,584

(917,784)

Total Revenue 149,872,727

(106,059,277)

b) Segment Results 10,829,392 (8,792,247) 2,037,145

(11,561,218) (9,736,308) (1,824,910)

Add : Unallocated Income

Dividend , Interest Income, and other Income 8,138,584

(529,587)

Less : Unallocated Expenses

Loss on sale of investments, Interest, and Donation 213,020

(633,907)

Profit/(Loss) before tax 9,962,709

(1,720,590)

Tax Expense (including provision for Deferred Tax Liabilities) (2,235,482)

(881,972)

Net Profit/(Loss) after tax 12,198,191

(838,618)

c) Carrying amount of segment assets 97,289,051 17,636,259 114,925,310

(58,179,315) (18,140,962) (76,320,277)

Add: Unallocated Assets 16,885,033

(3,043,444)


(79,363,721)

d) Segment Liabilities 47,095,657 1,046,320 48,141,977

(38,818,879) (2,924,117) (41,742,996)

Add: Unallocated Liabilities 102,321,643

(68,472,195)


(110,215,191)


11 MNMI.p65 8/19/2009, 12:32 PM426




e) Cost to acquire tangible and intangible 2,262,658 716,095 2,978,753

fixed assets during the year (3,104,932) (1,101,369) (4,206,301)

Total Addition 2,978,753

(4,206,301)

f) Depreciation and amortisation expense 1,314,525 3,964,869 5,279,394

(1,039,606) (3,917,730) (4,957,336)

Total depreciation and amortisation 5,279,394

(4,957,336)

g) Non-cash expenses other than depreciation and amortisation - - -

(-) (-) (-)

Total -

(-)

Secondary Segment RUPEES

Particulars India Europe, North Total

America and

Singapore

a) Revenue from external customers 44,297,088 95,405,375 139,702,463

(29,766,929) (73,225,526) (102,992,455)

b) Carrying amount of segment assets by location of assets 76,691,828 55,118,515 131,810,343

(52,500,025) (23,820,252) (76,320,277)

c) Cost to acquire tangible and intangible fixed 33,414,338 - 33,414,338

assets by location of assets (30,435,585) (-) (30,435,585)

(Figures in bracket are for previous year)



The Company has 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. 0.74 lacs (Net of tax of Rs. 0.38 lacs) towards gratuity and

leave encashment liability has been charged off to General Reserve in previous year.

The following table set out the status of the gratuity and leave liability as required under AS-15.


Present value of the defined benefit obligation:

Obligations at period at beginning 01.04.2008 965,510 1,396,707

Service Cost 679,393 1,725,324


Benefits paid (357,808) (484,500)

Actuarial (gain)/loss 290,661 1,199,045

Obligations at period at end 31.03.2009 1,654,997 3,948,313

Defined benefit obligation liability as at the balance sheet is not wholly funded by the company

Change in plan assets

Plans assets at period beginning, at fair value 01.04.08 294,185 -

Expected return on plan assets 39,530 -

Actuarial gain/(loss) - -


Primary Segment RUPEES

Particulars Clinical Research Clinical Data Total

Management Services

11 MNMI.p65 8/19/2009, 12:32 PM427




Contributions 495,287 -

Benefits paid (357,808) -

Plans assets at period end, at fair value 31.03.09 471,194 -

Reconciliation of present value of the obligation and the fair value of the plan assets:

Present value of the obligation 1,654,997 3,948,313

Fair value of plan assets at the end of the year 31.03.09 471,194 -

Liability recognized in the balance sheet 1,183,803 3,948,313

Costs

Service cost 679,393 1,725,324


Expected return on plan assets (26,918) -

Actuarial (gain)/loss 278,049 1,199,045

Net costs 1,007,765 3,036,106

Assumptions

Discount factor 8% 6%

Interest Rate 8% 8%

Estimated rate of return on plan assets 9.15% -

Salary Increase 10% 10%

Attrition rate

- Upto 30 years 10% 10%

- Between 31 and 44 years 10% 10%

- Above 44 years 5% 5%

Leave availment in the service N.A. 5%

Retirement age 58 years 58 years


During the year, the Company contributed Rs. 22.89 lacs (Previous year Rs. 15.46 lacs) for provident fund which represents contribution

to defined contribution plans.

12 In the Extra-ordinary General Meeting held on Feb 13, 2008, the shareholders have approved change of name of the Company to

“Max Neeman Medical International Limited” for which the company has got the necessary approval and fresh certificate of

incorporation w.e.f. May 1, 2008 from the concerned authority.

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


DR. PERVEZ AHMED Director


JUNE 18, 2009 REENA ANEJA Company Secretary



11 MNMI.p65 8/19/2009, 12:32 PM428








Date Month Year



N I L N I L


N I L N I L


1 3 0 9 7 3 1 3 0 9 7 3


4 2 1 6 8 N I L


N I L 8 8 8 0 5

Share Application Money Deffered Tax Liability

N I L N I L


1 8 8 6 2 N I L


4 7 3 8 4 N I L

Accumulated Losses Deffered Tax Asset

6 0 8 2 1 3 9 0 6


1 4 9 8 7 3 1 3 9 9 1 0


9 9 6 3 1 2 1 9 8

+ - Earning per Share in Rs. Dividend Rate (%)

2 . 9 3 N I L


Product Description C L I N I C A L T R I A L S E R V I C E S

C L I N I C A L D A T A M A N A G E M E N T

√

√

√

√

11 MNMI.p65 8/19/2009, 12:32 PM429




11 MNMI.p65 8/19/2009, 12:32 PM430

PHARMAX CORPORATION LIMITED


Your Directors have pleasure in presenting the Twentieth Annual

Report of the Company together with the Audited Annual Accounts

for the year ended March 31, 2009.

FINANCIAL RESULTS

During the year under review, your Company earned a total income

amounting to Rs. 717.60 lacs against Rs. 570.07 lacs in previous

year. The Company posted a profit after tax of Rs. 183.20 lacs for

the year ended March 31, 2009. Key highlights of the financial

results for the year under review are as follows:

(Rs. Lacs)


March 31, 2009 March 31, 2008

Rental income 425.57 543.34


Total Income 717.60 570.07

Total Expenditure 464.00 221.33

Profit / (Loss) before tax 253.60 348.74

Provision for Taxation 70.40 90.24

Profit / (Loss) after tax 183.20 258.50

DIVIDEND

In view of carry forward losses, your Directors do not recommend

any dividend either on Equity Shares or on Preference Shares.


Disclosure of information in accordance with the provisions of

Section 217(1)(e) of the Companies Act, 1956 is not applicable to

your Company.


The Company has not accepted any deposits under Section 58A of

the Companies Act, 1956.


As the Company had no employee on its roll, the particulars under

Section 217(2A) of the Companies Act, 1956 read with the

Companies (Particulars of Employees Rules) 1975 are not applicable.

DIRECTORS


Article 143 of the Articles of Association of the Company, Mr. K.S.

Ramsinghaney and Mrs. Sujatha Ratnam retire by rotation at the

ensuing Annual General Meeting, and being eligible offers

themselves for re-appointment.

AUDIT COMMITTEE

Currently the Audit Committee of the Company comprises of

Mrs. Sujatha Ratnam, Mr. P. Dwarakanath and Mr. Neeraj Basur.

The current terms of reference of this Committee fully conform to

the requirements of Section 292A of the Companies Act, 1956.





accounting standards have been followed along with

proper explanation relating to material departures;


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;


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;

and


concern basis.

AUDITORS

Nangia & Company, Chartered Accountants, the Statutory Auditors

of the Company, cease to hold office at the conclusion of the ensuing

Annual General Meeting and offer themselves for re-appointment.

The Company has received from them a Certificate to the effect

that their re-appointment, if made, would be in conformity with

the limits specified under Section 224(1B) of the Companies Act,

1956.

For and behalf of Board of Directors

New Delhi P. DWARAKANATH Director

July 24, 2009 SUJATHA RATNAM Director

Directors’ Report

12 Pharmax.p65 8/19/2009, 12:32 PM433



Auditors’ Report

1 We have audited the attached Balance Sheet of Pharmax

Corporation Limited, New Delhi as at March 31, 2009 and

the related Profit and Loss Account and Cash Flow Statement

for the year ended on that date annexed thereto, which we

have signed under reference to this report. These financial

statements are the responsibility of the Company’s



2 We conducted our audit in accordance with auditing standards



about whether the financial statements are free of material

misstatement. An audit includes examining on a test basis,



accounting principles used and significant estimates by


presentation. We believe that our audit provides a reasonable

basis for our opinion.

3 As required by the Companies (Auditors’ Report) (Amendment)

Order, 2004, issued by the Central Government in terms of

sub-section 4A of section 227 of the Companies Act, 1956,

(hereinafter referred to as the ‘Act’) we give in an annexure, a

statement on the matters specified in paragraphs 4 and 5 of

the said order, to the extent applicable to the Company.

4 Further to our comments in the annexure referred to in

paragraph (3) above, we report that:

(a) We have obtained all the information and explanations


necessary for the purpose of our audit;

(b) In our opinion, proper books of accounts as required by

law have been kept by the Company, so far as appears

from our examination of the books;






with the requirements of Accounting Standards referred

to in sub-section (3C) of Section 211 of the Act, to the

extent applicable.


Directors of the Company and taken on record by the

Board of Directors, none of the Directors is disqualified

as on March 31, 2009 from being appointed as a Director

of the Company in terms of clause (g) of sub-section (1)

of Section 274 of the Act.



financial statements read together with ‘Significant

Accounting Policies & Notes to Accounts’ in Schedule

‘10’, give the information required by the Act, in the


conformity with the accounting principles generally

accepted in India:

(i). in the case of the Balance Sheet, of the state of affairs

of the Company as at March 31, 2009;

(ii). in the case of the Profit and Loss Account, of the

profit of the Company for the year ended on that

date; and

(iii). In the case of Cash Flow Statement, of the cash flows

for the year ended on that date.

RAKESH NANGIA

FCA, Partner



New Delhi Nangia and Company


12 Pharmax.p65 8/19/2009, 12:32 PM434



ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDITORS’

REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR

THE YEAR ENDED ON MARCH 31, 2009.

On the basis of such checks as we considered appropriate and

according to the information and explanation given to us during

the course of audit, we report that: -

1. (a) The Company is maintaining proper records showing full

particulars, including quantitative details and situation

of fixed assets.

(b) As explained to us, all the fixed assets have been physically

verified by the management according to a regular

program of verification which in our opinion is reasonable

having regard to the size of the Company and the nature

of its assets. No material discrepancies between book

records and the physical inventory have been noticed on

such verification.

(c) During the year, the Company has not disposed off a

substantial part of the fixed assets. Based on the

information and explanation given by the management

of the Company and on the basis of audit checks

performed by us, we are of the opinion that the sale of

fixed assets during the year has not affected the going

concern status of the Company.

2. The Company being in the field of management of real estate,

carries no inventories, hence the provisions of Clause 4(ii)(a)

to 4(ii)(c) of the Companies (Auditors’ Report) (Amendment)

Order, 2004 are not applicable.


explanations given to us, the Company has not granted

any loans, secured or unsecured, to companies, firms or

other parties listed in the register maintained under

Section 301 of the Act.

(b) As the Company has not granted any loans, secured or

unsecured, to companies, firms or other parties listed in

the register maintained under Section 301 of the Act,

the provisions of clause 4(iii)(b), 4(iii)(c) & 4(iii)(d) are

not applicable.


explanations given to us, the Company has not taken any

loans, secured or unsecured, from companies, firms or other

parties listed in the Register maintained under Section 301


4. In our opinion and according to the information and

explanations given to us, there are adequate internal control

procedures commensurate with the size of the Company and

the nature of its business for purchase of fixed assets and for

sales of services. Further, on the basis of our examination and

according to the explanations given to us, we have neither

come across nor have we been informed of any instance of

major weaknesses in the aforesaid internal control system of

the Company.

5. Based on the information and explanations given to us, there

are no transactions with Parties covered under section 301 of

the Act.

6. In our opinion and according to information given to us, the

Company has not accepted deposits from the public within

the meaning of Section 58A and 58AA of the Companies Act,

1956 and rules framed there under.

7. In our opinion, the Company has an internal audit system,

which is commensurate with the size and nature of its business.

8. The Central Government of India has not prescribed the

maintenance of cost records under Section 209(1)(d) of the

Act, for any of the products of the Company.


explanations given to us and according to the books and

records as produced and examined by us, the Company is

regular in depositing undisputed statutory dues including

Provident Fund, Employees’ State Insurance, Income-Tax,

Wealth Tax, Service Tax, Cess and any other statutory

dues as applicable with the appropriate authorities.

According to the information and explanations given to

us, there were no undisputed amounts payable in respect

of Provident Fund, Employees’ State Insurance, Income-

Tax, Wealth Tax, Service Tax, Cess and any other statutory

dues as applicable, outstanding as at the last day of the

financial year concerned for a period of more than six

months from the date they became payable.

(b) According to the records of the Company, there are no

dues of Provident Fund, Employees’ State Insurance,

Income-tax, Service Tax, Cess and any other statutory

dues as applicable to it, which have not been deposited

on account of any dispute.

10. In our opinion the accumulated losses of the Company are not

more than fifty percent of its net worth. The Company has not

Auditors’ Report

12 Pharmax.p65 8/19/2009, 12:32 PM435



incurred any cash losses during the financial year covered by

our audit and during the immediately preceding financial year.

11. Based on our audit procedures and according to the

information and explanations given by the management, we

are of the opinion that the Company has not defaulted in

repayment of its dues of any financial institution or bank during

the year.

12. The Company has not granted any loans and advances on the

basis of security by way of pledge of shares and other securities.

13. The provisions of any special statute applicable to chit fund/

nidhi/mutual benefit fund/societies are not applicable to the

Company.

14. Based on our examination of the records and documents of

the Company, and according to the information and

explanation given to us, we are of the opinion that the

Company is not dealing or trading in shares, securities,

debentures and other investments, and therefore clause (xiv)

of The Companies (Auditors’ Report) (Amendment) Order, 2004

is not applicable to the Company.

15. In our opinion, the terms and conditions on which the Company

has given guarantees for loans taken by others from banks or

financial institutions are not prejudicial to the interests of the

Company.

16. Based on the information and explanations given to us by the

management, the Company has utilized the long-term loan

availed from Canara Bank for the purpose for which it was

borrowed.

17. Based on the information and according to the information

and explanations given to us and on an overall examination

of the balance sheet of the Company, in our opinion, there are

no funds raised on a short term basis which have been used

for long term investment or vice versa.

18. The Company has not made any preferential allotment of shares

to parties and companies covered in the Register maintained

under section 301 of the Companies Act, 1956 during the year.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by public issue during

the year.

21. Based upon audit procedures performed and information and

explanations given by the management of the Company, we

report no fraud on or by the Company has been noticed or

reported during the course of our audit.

RAKESH NANGIA

FCA, Partner



New Delhi Nangia and Company


Auditors’ Report

12 Pharmax.p65 8/19/2009, 12:32 PM436



RUPEES


SOURCES OF FUNDS


Share Capital 1 205,576,787 205,576,787

LOAN FUNDS 2

Secured Loans 84,802,577 103,136,733

Unsecured Loans 129,300,000 45,800,000

419,679,364 354,513,520


FIXED ASSETS 3

Gross Block 250,457,208 250,457,208

Less : Accumulated Depreciation 53,694,643 47,125,947

Net Block 196,762,565 203,331,261

INVESTMENTS 4 72,152,363 71,428,240


Sundry Debtors 8,376,606 1,085,394

Cash and Bank Balances 9,431,209 3,689,268


120,569,278 19,755,227

Less: CURRENT LIABILITIES AND PROVISIONS 6

Current Liabilities 41,994,749 30,511,385

41,994,749 30,511,385

NET CURRENT ASSETS 78,574,529 (10,756,158)


419,679,364 354,513,520





RAKESH NANGIA P DWARAKANATH DirectorFCA, Partner SUJATHA RATNAM DirectorMembership No.: 70776 SHWETA GUPTA Company Secretary

For Nangia and CompanyChartered Accountants


12 Pharmax.p65 8/19/2009, 12:32 PM437



RUPEES


INCOME

Lease Rentals* 42,557,035 54,333,800

Other Income 7 29,203,523 2,672,872

* Tax Deducted at Source Rs. 9,938,754 (Previous year Rs. 9,907,403) 71,760,558 57,006,672

EXPENDITURE

Administrative Expenses 8 2,615,936 2,385,674


Depreciation 3 6,568,696 6,571,100

46,400,288 22,132,556

PROFIT BEFORE TAX 25,360,270 34,874,116

Provision for Taxation

Current Year Tax 7,040,000 9,002,000

Add: adjustments related to earlier years - 21,706

Net 7,040,000 9,023,706

PROFIT AFTER TAX 18,320,270 25,850,410


(LOSS) CARRIED FORWARD TO THE BALANCE SHEET (72,189,907) (90,510,177)

Earnings Per Share (Re. per equity share of Re. 1 each)

-Basic 0.33 0.47

-Diluted 0.33 0.46

Number of Shares used in computing earnings per share

-Basic 55,305,852 55,305,852

-Diluted 55,939,952 55,939,952








12 Pharmax.p65 8/19/2009, 12:32 PM438



RUPEES



PROFIT BEFORE TAX 25,360,270 34,874,116

Adjustments for:

Depreciation 6,568,696 6,571,100

Net (Profit) / Loss on Sale of Investments (1,627) (4,233)

Interest Expense 41,413,402 13,175,782

Interest Income (27,440,256) (848,192)

Dividend Income (1,611,638) (1,804,150)

TDS on Service/other Operating Income (12,502,081) (10,547,750)

Liability/Provision No Longer Required Written Back (11,597) (10,000)


Adjustments for:

Trade and Other Receivables (89,610,029) 9,060,675

Trade Payables 11,494,961 (12,259,151)

Cash Generated From/ (Used In) Operations (46,339,899) 38,208,197

Direct Taxes Refunded / (Paid) - (6,027,875)

Cash From / (Used In) Operating Activities (46,339,899) 32,180,322

B CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Investments (103,855,088) (29,396,964)

Sale of Investments 103,132,592 13,592,815

Purchase of Fixed Assets - (668,200)

Sale of Fixed Assets - 116,954

Interest and Dividend Received (Net) 29,051,894 2,556,758

Cash From / (Used In) Investing Activities 28,329,398 (13,798,637)

C CASH FLOW FROM FINANCING ACTIVITIES

Interest Paid (41,413,402) (13,175,782)

Repayment of Long Term Loans (18,334,156) (16,251,782)

Proceeds from Borrowings 83,500,000 10,000,000

Cash From/(Used In) Financing Activities 23,752,442 (19,427,564)

Net Increase / (Decrease) In Cash and Cash Equivalents 5,741,941 (1,045,879)



Net Increase / (Decrease) In Cash and Cash Equivalents 5,741,941 (1,045,879)


12 Pharmax.p65 8/19/2009, 12:32 PM439



Notes:1) 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.

RUPEES


Cash in Hand 37,341 28,110

Cheques in Hand 2,377,913 1,660,712

Balances with Banks 7,015,955 2,000,446

9,431,209 3,689,268







12 Pharmax.p65 8/19/2009, 12:32 PM440



RUPEES


SCHEDULE-1

SHARE CAPITAL

Authorised Capital

60,000,000 Equity Shares of Re. 1/- each 60,000,000 60,000,000

(Previous year 60,000,000 Equity Shares of Re. 1/- each)

10% 470,000 Cumulative Convertible Preference Shares of Rs. 100/- each 47,000,000 47,000,000

(Previous year 10% 470,000 Cumulative Convertible Preference Shares of Rs. 100/- each)

9% 1,500,000 Cumulative Redeemable Preference Shares of Rs. 100/- each 150,000,000 150,000,000

(Previous year 9% 1,500,000 Cumulative Redeemable Preference Shares of Rs. 100/- each)

257,000,000 257,000,000

Issued, Subscribed and Paid Up:

55,305,852 Equity Shares of Re 1/- each fully paid up 55,305,852 55,305,852

(Previous year 55,305,852 Equity Shares of Re 1/- each fully paid up)

(Of the above Shares 9,113,982 Equity Shares were allotted as fully paid up for

consideration other than cash in terms of a Scheme of Arrangement approved by

the Hon’ble High Court of Punjab and Haryana in the year 1990-91)

(Of the above Shares 47,117,247 (Previous year 47,117,247) Equity Shares are held

by Max India Limited, the Holding Company)

6,341 10% Cumulative Convertible Preference Shares of Rs. 100/- each 634,100 634,100

(Previous year 6,341 10% Cumulative Convertible Preference Shares of Rs. 100/- each)

Less: Allotment Money To Be Received (363,165) (363,165)

(Refer Note 2 of Schedule 10B)

1,500,000 9% Cumulative Redeemable Preference Shares of Rs. 100/- each 150,000,000 150,000,000

(Previous year 1,500,000 9% Cumulative Redeemable Preference Shares of Rs. 100/- each)

Redeemable at par on or before 31st March, 2019 at the discretion of the board

(Held by Max India Ltd., the Holding Company)

205,576,787 205,576,787

SCHEDULE-2

LOAN FUNDS

SECURED LOANS

Loans From Banks 84,802,577 103,136,733(Secured against charge of monthly lease rentals receivable from various lessees and equitable

mortgage of undivided share of Freehold Property at Okhla)

84,802,577 103,136,733

Amount payable within one year Rs. 20,738,261 (Previous year Rs. 18,316,318)

UNSECURED LOANS

Other Loans

From Holding Company 113,800,000 35,800,000

From Others 15,500,000 10,000,000

129,300,000 45,800,000

Amount payable within one year Rs. 78,000,000 (Previous year Rs. 45,800,000)


12 Pharmax.p65 8/19/2009, 12:32 PM441




RUPEES


SCHEDULE-4

INVESTMENTS

Current Non Trade, (Unquoted), at cost

(Refer Note e of Schedule 10A and Note 5 of Schedule 10B)

Tata Mutual Fund (Liquid Fund) - 27,107,188

(No. of units Nil Previous year -1,804,632.16)

Tata Floater Fund-Growth 26,577,363 -

(No. of units 2,033,556.489 Previous year -Nil )

Birla Cash Plus Retail Daily Dividend - 4,246,052

(No. of units - Nil Previous year - 15,156.67)

26,577,363 31,353,240

Long Term-Trade, (Unquoted), at cost

Equity Shares 45,575,000 40,075,000

45,575,000 40,075,000

72,152,363 71,428,240

SCHEDULE-3

FIXED ASSETSRefer Note No. c, d, g, i of Schedule 10A and Note 3 of Schedule 10B.

RUPEES


Particulars As at Additions Deletions As at As at For the Deletions As at As at As at

April 1, March 31, April 1, Year March 31, March 31, March 31,

2008 2009 2008 2009 2009 2008

Land (Freehold) 84,296 - - 84,296 - - - - 84,296 84,296Land (Leasehold) 182,365 - - 182,365 - - - - 182,365 182,365Building 174,619,212 - - 174,619,212 14,955,177 2,845,378 - 17,800,555 156,818,657 159,664,035Plant & Machinery 70,042,639 - - 70,042,639 31,378,917 3,327,025 - 34,705,942 35,336,697 38,663,722Furniture and Fixtures 4,918,081 - - 4,918,081 578,522 309,794 - 888,316 4,029,765 4,339,559Computers 610,615 - - 610,615 213,331 86,499 - 299,830 310,785 397,284

TOTAL 250,457,208 - - 250,457,208 47,125,947 6,568,696 - 53,694,643 196,762,565 203,331,261

Previous year 249,237,328 1,343,630 123,750 250,457,208 40,561,643 6,571,100 6,796 47,125,947 203,331,261 208,675,685

12 Pharmax.p65 8/19/2009, 12:32 PM442




RUPEES


SCHEDULE-5


Sundry Debtors*


Debts exceeding six months - -

Other Debts 8,376,606 1,085,394

8,376,606 1,085,394


Cash in Hand 37,341 28,110

Cheques in Hand 2,377,913 1,660,712

Balances with Scheduled Banks in Current Accounts 7,015,955 2,000,446

9,431,209 3,689,268

Loans and Advances


Advances Recoverable In Cash or in Kind or For Value to be Received 2,574,959 3,438,525

Loans 83,800,000 5,800,000

Interest Receivable 5,355,069 92,104



Advance Income Tax 36,434,968 24,009,617

Less: Provision for Income Tax (25,832,000) (18,792,000)

102,761,463 14,980,565

*Includes debt due from companies under the same management

Max Healthcare Institute Ltd. 4,546,257 1,083,606

Max New York Life Insurance Company Ltd. 3,157,104 800

Max Healthstaff International Ltd. 24,990 -


Max India Limited 2,015,615 795,734

Max Healthcare Institute Ltd. 4,546,257 3,349,636

Max New York Life Insurance Company Ltd. 3,157,104 2,288,025

Max Healthstaff International Ltd. 69,942 1,367,867

Max Neeman Medical International Ltd. 56,822 893,730

12 Pharmax.p65 8/19/2009, 12:32 PM443



RUPEES



SCHEDULE-6CURRENT LIABILITIES AND PROVISIONS

Current LiabilitiesSundry Creditors*- Total Outstanding Dues of Creditors Other Than Micro Enterprises and Small Enterprises 246,504 248,792Other Liabilities 41,748,245 30,262,593

41,994,749 30,511,385

*There are no dues to creditors under the definition of micro enterprises and

small enterprises as at March 31, 2009 and March 31, 2008


SCHEDULE-7OTHER INCOME

Interest on Loans (Gross)* 27,440,256 464,000Other Interest - 384,192Dividend From Non-Trade Investments - Current 1,611,638 1,804,150Unclaimed Balances Written Back 10,000 10,000Miscellaneous Income 140,002 6,297Net profit on sale of Units 1,627 4,233

29,203,523 2,672,872

* Tax Deducted at Source Rs. 68,942 (Previous year Rs. 95,584)

SCHEDULE 8ADMINISTRATIVE EXPENSES

Rates and Taxes 1,076,007 1,076,119Insurance 154,892 179,135Legal and Professional (Refer Note 6 of Schedule 10B) 4,400,057 5,759,150Filing Fee 7,561 3,510Repair and Maintenance - Building 3,005,009 17,175Repair and Maintenance - Others 32,245 103,188Printing and Stationery 748,295 191,346Bank Charges 5,872 16,955Miscellaneous 13,617 82,786Less: Overheads Recovery* (6,827,619) (5,043,690)(Refer Note 9 on Schedule 10B)

2,615,936 2,385,674

*Tax deducted at source Rs. 544,524 (Previous year Rs. 544,763)

SCHEDULE-9

FINANCIAL EXPENSES

Interest on Term Loans 10,751,012 12,740,782

Other Interest 26,464,644 435,000

37,215,656 13,175,782

12 Pharmax.p65 8/19/2009, 12:32 PM444



SCHEDULE–10

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS


a. Accounting Basis and Convention

The accompanying financial statements are prepared in accordance with Generally Accepted Accounting Principles in India

(“GAAP”), under the historical cost convention, on the accrual basis. GAAP comprises mandatory accounting standards issued

by the Institute of Chartered Accountants of India (“ICAI”) and the provisions of the Companies Act, 1956, as adopted

consistently by the Company.

b. Revenue Recognition

(i) The revenue from lease rentals is recognised proportionately over the period of the related agreements.

(ii) The interest is recognised on time proportionate basis, taking into the account the amount outstanding and the rates

applicable.

c. Fixed Assets

Fixed assets are stated at their original cost including freight, duties, taxes and other incidental expenses relating to acquisition

and installation less accumulated depreciation.

d. Depreciation

(i) Depreciation on fixed assets is charged on straight-line method on a pro-rata basis at rates prescribed under schedule

XIV to the Companies Act, 1956.

(ii) Assets costing less than Rs. 5000/- each individually are depreciated at 100% in the year of capitalization.

e. Investments

(i) Investments are classified into current investments and long-term investments. The cost of investments includes

acquisition charges such as brokerage, fees and duties.

(ii) Long-term investments are valued at cost. Provision for diminution is made to recognize a decline, other than temporary.

f. Miscellaneous Expenditure

Preliminary expenditure represents cost incurred for incorporation of the Company and expenses incurred on rights issue.

These are amortized over a period of 10 years.

g. Accounting For Leases

The assets given under operating lease are shown in the Balance Sheet under fixed assets and depreciated on a basis consistent

with the depreciation policy of the Company. The lease income is recognised in the Profit and Loss Account on accrual basis.

The initial direct cost incurred for finalising the lease arrangement is recognised as expense immediately in the Profit and Loss

Account.

h. Taxation

Provision for tax consists of current tax and deferred tax, which is computed for current income based on the tax liability after

considering allowances and exemptions. Deferred tax assets and liabilities when applicable are computed on timing difference

at the balance sheet date between the carrying amount of assets and liabilities and their respective tax bases. Deferred tax

assets are recognised based on management estimates of available future taxable income and assessing its certainty.

The Company does not have any employees and hence the provisions of section 115WA of the Income Tax Act, 1961 are not

applicable. Accordingly, the Company is not liable to pay Fringe Benefit Tax under that section.

i. Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of the qualifying assets are

capitalized as part of the cost of that asset in accordance with Accounting Standard 16 issued by ICAI on “Borrowing Costs”.

Other borrowing costs are recognized as an expense in the period in which they are incurred.


12 Pharmax.p65 8/19/2009, 12:32 PM445





1 Contingent liabilities

(i) (a) Arrears of dividend on 10% Cumulative Convertible Preference Share is Rs. 339.06 Lacs (Previous year Rs. 338.42

Lacs). Corporate Dividend Tax thereon is Rs. 57.63 Lacs (Previous year Rs. 57.52 Lacs)

(b) Arrears of dividend on 9% Cumulative Redeemable Preference Share is Rs. 1,215.00 Lacs (Previous year Rs. 1,080.00

Lacs). Corporate Dividend Tax thereon is Rs. 206.49 Lacs (Previous year Rs.183.55 Lacs).

(ii) Claims against the Company not acknowledged as debts is Nil (Previous year Rs. Nil)

(iii) The Company has given a Corporate Guarantee of Rs. 11,500 Lacs (Previous year Rs. 11,500 Lacs) to various lenders for

securing Term Loan facilities to MAX Balaji Medical & Diagnostic Research Centre.

(iv) Estimated amount of contracts remaining to be executed on capital account and not provided (net off capital advances)

is Nil (Previous year Rs. Nil).

2 Pending reconciliation of the allotment money receivable for remaining 6,341 10% Cumulative Convertible Preference Share

of Rs. 100/- each, the conversion will be taken up at a later date to be decided by the Board.

3 Leases

Accounting for leases has been done in accordance with Accounting Standard -19 issued by the Institute of Chartered

accountants of India. Following are the details of the transactions for the year.

a) Finance Lease:


b) Operating lease Income

i) Details of assets given under operating lease are as under:

Particulars Gross value Additions/ Total value Depreciation Depreciation Net value

as at April (deletion) of assets during the reserve upto of assets as

01, 2008 during given on year March 31, at March

the year lease 2009 31, 2009

Land 266,661 NIL 266,661 NIL NIL 266,661

Building 165,843,380 8,775,832 154,757,605 2,057,327 12,870,545 141,887,060

(19,861,607)

Plant & Machinery 61,801,255 8,241,384 51,390,604 2,405,578 25,093,847 26,296,757

(18,652,035)

Total 227,911,296 17,017,216 206,414,870 4,462,905 37,964,392 168,450,478

(38,513,642)

Previous Year 243,844,889 1,083,623 227,911,296 5,419,215 40,664,018 187,247,278

(17,017,216)

ii) There are no leases entered into by the company, which are classified as non-cancelable lease.

iii) The company has entered into lease contracts (cancelable) for its assets as mentioned above with various parties

including group companies as under:

Name of Lessee

Max Bupa Health Insurance Ltd.

Max India Limited (the holding company)

Malsi Estates Ltd.


Max Neeman Medical International Limited

Max HealthStaff International Limited

12 Pharmax.p65 8/19/2009, 12:32 PM446



iv) Description of the significant leasing arrangements

The Company has given its assets on operating lease to different parties for various periods, renewable on mutual

agreement. A list of the significant lease arrangements is given below:

RUPEES

Name of Lessee Lease Rent (Per Month) Lease Period

Max Bupa Health Insurance Ltd. 809,600 15.11.2008 to 15.11.2011

Max India Limited (the holding company) 1,102,785 01.12.2008 to 31.03.2009

Malsi Estates Ltd. 269,785 01.11.2008 to 31.10.2009

Max Healthcare Institute Limited 659,323 01.04.2008 to 31.03.2009

Max Neeman Medical International Limited 383,944 01.04.2002 to 31.03.2011

Max HealthStaff International Limited 359,468 01.02.2007 to 31.01.2010

4 Deferred Tax

(a) Since the main income of the company (Lease Rentals) is taxed under the head “Income from House Property” and the

expenses are not claimed as business expenses therefore, there are no timing differences at the balance sheet date

between carrying amount of assets and liabilities and their respective tax bases. Thus, no deferred tax liability / asset

has been created.

(b) No deferred tax asset has been created on account of the carry-forward business losses as there is no reasonable

certainty of utilizing them at a future date.

5 Movement in Current Non Trade Investments (Unquoted)

Name of the Face Value Purchases Sales

Investment per share (Rupees) Units Value Units Value

(Numbers) (Rupees) (Numbers) (Rupees)

Tata Liquid Super High Investment Fund 10 20,640.55 23,004,301 20,640.55 23,004,301

- Daily Dividend

Tata Floating Rate Short Term Institutional 10 10,283.88 102,936 431,611.74 4,322,678

Plan-Daily Dividend

Tata Floater Fund Daily Dividend. 10 4,807,961.777 48,250,781 5,834,521.058 58,552,919

Tata Liquidity Management Fund Weekly Dividend 10 152.2992 153,137 7,520.38 7,561,773

Tata Liquidity Management Fund Daily Dividend 10 98.615 98,872 5,263.60 5,277,336

Birla Cash Plus Retail Daily Dividend 10 10,244.5697 167,697 269,624.1255 4,413,585

Tata Floater Fund- Growth 2,033,556.489 26,577,363 - -

6 Auditors’ Remuneration (included under Legal & Professional Charges in Schedule 8):

RUPEES

Description Current Year Previous Year

Audit Fees (including service tax) 44,120 44,944

Other Fees (Including service tax) 22,472 -

Total 66,592 44,944

7 Segment Reporting

The Company operates in single business segment viz Leasing of Estates. In view of general clarifications issued by the

Institute of Chartered Accountants of India for Companies operating in single segment, the disclosure requirements as per

Accounting Standard 17 “Segment Reporting” are not applicable.


12 Pharmax.p65 8/19/2009, 12:32 PM447




Holding Company Max India Ltd.

Fellow 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; Neeman Medical

International Latin America S.A. (till October 26, 2007); Max Medical Services Ltd.; Max Healthcare

Institute Ltd.; Max UK Ltd.; Max Neeman Medical International Ltd.; Max Healthstaff International

Ltd.; Alps Hospital Ltd.*

* with effect from April 6, 2006

Summary of significant related party transactions (as identified by the management) carried out in ordinary course of

business:

S. No. Particulars Holding Fellow Subsidiaries

1 Loans taken 555,000,000 -

(-) (-)

2 Loans Refunded 477,000,000 -

(-) (-)

3 Incomes and reimbursement

- Lease Income 13,444,036 14,550,662

(12,884,436) (15,208,076)

- Reimbursement of expenses 21,640,141 36,603,589

(10,413,266) (22,783,594)

4 Expense

- Interest paid 28,714,644 -

(2,685,000) (-)

- Other expenses - -

(-) (14,513)

5 Sale of Fixed Assets - -

(-) (116,954)

6 Amount outstanding

- Against loan taken 113,800,000 -

(35,800,000) (-)

- Other receivable - 7,728,351

(-) (1,084,406)

- Other payable 17,886,779 4,066,496

(5,802,480) (-)

Figures in bracket are for previous year.

9. During the year, the Company shared the services of some of its facilities with group Companies. Consequently, the share of

cost attributable to these companies has been charged in accordance with the respective service agreements.

10. No liability has been provided for leave encashment and other retirement benefits since there is no employee in the Company.


12 Pharmax.p65 8/19/2009, 12:32 PM448








11 Earnings Per Share (EPS)



March 31, 2009 March 31, 2008

Basic

Profit / (Loss) after tax (Rupees) 18,320,270 25,850,410

Weighted average number of Equity Shares (Nos) 55,305,852 55,305,852

EPS ( Rupees) 0.33 0.47



Issued on 27th January, 2006 - -

Issued on 22nd February, 2007 - -


Diluted

Profit after Tax (Rupees) 18,320,270 25,850,410

Weighted average number of Equity Shares (Nos) 55,939,952 55,939,952

EPS ( Rupees) 0.33 0.46

Reconciliation of denominators used for calculating basic and diluted earning per share


March 31, 2009 March 31, 2008

Denominator used for computing basic Earning Per Share 55,305,852 55,305,852

Add : Dilutive impact of :

(i) Convertible preference Shares 634,100 634,100

Denominator used for Computing diluted Earning per Share 55,939,952 55,939,952


13 Previous year’s figures have been regrouped and rearranged wherever necessary to conform to current year’s classification.

12 Pharmax.p65 8/19/2009, 12:32 PM449





Registration No. 9 7 4 1 State Code 1 6


Date Month Year



N I L N I L

Bonus Issue Others

N I L N I L


4 1 9 6 7 9 4 1 9 6 7 9


2 0 5 5 7 7 N I L


8 4 8 0 3 1 2 9 3 0 0

APPLICATION OF FUNDSNet Fixed assets Investments

1 9 6 7 6 3 7 2 1 5 2

+ - Net Current Assets Misc. Expenditure

7 8 5 7 5 N I L

Accumulated Losses

7 2 1 9 0

IV PERFORMANCE OF COMPANY (Amount in Rs. Thousand)Turnover Total Expenditure

7 1 7 6 0 4 6 4 0 0

+ - Profit /Loss before Tax + - Profit /Loss after Tax

2 5 3 6 0 1 8 3 2 0

Basic Earning per Share in Rs. Dividend Rate (%)+ -

0 . 3 3 N I L

+ - Diluted Earning per share in Rs.

0 . 3 3


Product Description L E A S I N G O F E S T A T E S

Item Code No. N . A

(IT Code)

��

�

�

�

12 Pharmax.p65 8/19/2009, 12:32 PM450

MAX ATEEV LIMITED


Your Directors have pleasure in presenting their Fifteenth Annual

Report along with the Audited Accounts for the financial year ended

March 31, 2009.

FINANCIAL RESULTS

During the year under review, your Company incurred a loss of

Rs.3.32 lacs.

OPERATIONS

Currently, the Company is not pursuing any business/commercial

operations. However, the Directors are evaluating potential business

opportunities for the Company.

DIVIDEND

In view of the losses, your Directors are unable to recommend any

dividend for the year under review.


Your Company has not accepted any deposit from the public during

the year under review. There were no unclaimed /over due deposit

as at March 31, 2009.


As your Company does not carry on any operations, information in

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

Companies Act, 1956 read with the Companies (Disclosure of

Particulars in the Report of Board of Directors) Rules, 1988 is not

furnished herewith.


The Company had no employee during the year under review.

DIRECTORS


Mrs. Sujatha Ratnam and Mr. Arvind Kakar are due to retire by

rotation and being eligible, offers themselves for re-appointment.

AUDIT COMMITTEE

Currently, the Audit Committee comprises of Mr. Neeraj Basur, Ms.

Sujatha Ratnam and Mr. Arvind Kakar. The terms of reference of

the Audit Committee fully conform to the requirements of Section

292A of the Companies Act, 1956.







(ii) the Directors had selected such accounting policies and


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



that period;







concern basis.

AUDITORS


Company retire at the conclusion of the ensuing Annual General

Meeting and are eligible for re-appointment. The Company has

received from them a Certificate to the effect that their re-

appointment, if made, will be in accordance with the limits specified

under Section 224(1B) of the Companies Act, 1956.


New Delhi Sujatha Ratnam Director

JULY 24, 2009 V. Krishnan Managing Director

Directors’ Report

13 Ateev.p65 8/19/2009, 12:32 PM453

MAX ATEEV LIMITED


TO THE MEMBERS OF MAX ATEEV LIMITED

1. We have audited the attached Balance Sheet of Max Ateev

Limited, as at March 31, 2009, and the related Profit and Loss


date annexed thereto, which we have signed under reference

to this report. These financial statements are the responsibility

of the Company’s management. Our responsibility is to express

an opinion on these financial statements based on our audit.




















(i) (a) The company is maintaining proper records



(b) The fixed assets of the company have been



book records and the physical inventory have been

noticed. In our opinion, the frequency of

verification is reasonable.



of fixed assets has not been disposed of by the


(ii) There are no stocks with the Company or third parties.

(iii) (a) The company has not granted any loans, secured



301 of the Act.




301 of the Act.

(iv) In our opinion and according to the information and







for the purchase of inventory, fixed assets and for the

sale of goods and services. Further, on the basis of our

examination of the books and records of the company,

and according to the information and explanations given

to us, we have neither come across nor have been

informed of any continuing failure to correct major

weaknesses in the aforesaid internal control system.

(v) According to the information and explanations given

to us, there have been no contracts or arrangements

referred to in Section 301 of the Act during the year to

be entered in the register required to be maintained

under that Section. Accordingly, commenting on

transactions made in pursuance of such contracts or

arrangements does not arise.

(vi) The company has not accepted any deposits from the



(vii) In our opinion, the company has an internal audit system


(viii) The Central Government of India has not prescribed the




(ix) (a) According to the information and explanations given


us, in our opinion, the company is regular in

depositing the undisputed statutory dues including

provident fund, investor education and protection

fund, employees’ state insurance, income-tax, sales-

tax, wealth tax, service tax, customs duty, excise duty,

cess and other material statutory dues as applicable

with the appropriate authorities.



Auditors’ Report

13 Ateev.p65 8/19/2009, 12:32 PM454

MAX ATEEV LIMITED


examined by us, the particulars of dues of income-

tax, sales-tax, wealth tax, service tax, customs duty,

excise duty and cess as at March 31, 2009 which

have not been deposited on account of a dispute

are disclosed in Notes 2(ii) on Schedule 9B.

(x) The company has accumulated losses, as at March 31,

2009 more than fifty percent of its net worth and it has


date and in immediately preceding financial year.

However, reference is drawn to Note 1 on Schedule 9B.

(xi) According to the records of the company examined by

us and the information and explanation given to us, the

company has not defaulted in repayment of dues to

any financial institution or bank or debenture holders


(xii) The company has not granted any loans and advances



(xiii) The provisions of any special statute applicable to chit



(xiv) In our opinion, the company is not a dealer or trader in

shares, securities, debentures and other investments.

(xv) In our opinion, and according to the information and

explanations give to us, the company has not given any

guarantee for loans taken by others from banks or


(xvi) The company has not obtained any term loans.

(xvii) On the basis of an overall examination of the balance





(xviii) The company has not made any preferential allotment of


maintained under section 301 of the act during the year.

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

(xx) The company has not raised any money by public issues

during the year.

(xxi) During the course of our examination of the books and







management.




















the Act;





information required by the Act and give subject to

Note B1 on Schedule 9 regarding preparation of these

accounts on a going concern basis a true and fair view

in conformity with the accounting principles generally

accepted in India:







V. NIJHAWAN

Partner





Auditors’ Report

13 Ateev.p65 8/19/2009, 12:32 PM455

MAX ATEEV LIMITED


RUPEES


SOURCES OF FUNDS


Share Capital 1 314,436,000.00 314,436,000.00

LOAN FUNDS

Unsecured Loans 2 67,406,470.56 67,540,458.56

381,842,470.56 381,976,458.56


FIXED ASSETS 3

Gross Block 76,727,845.57 78,092,445.57

Less: Depreciation 76,006,157.75 76,437,813.11

Net Block 721,687.82 1,654,632.46


Cash and Bank Balances 118,384.24 92,654.24

Loans and Advances 1,236,645.00 1,236,645.00

1,355,029.24 1,329,299.24

LESS: CURRENT LIABILITIES AND PROVISIONS 5 714,111.58 1,155,668.72

NET CURRENT ASSETS 640,917.66 173,630.52

PROFIT AND LOSS ACCOUNT 380,479,865.08 380,148,195.58

381,842,470.56 381,976,458.56





V. NIJHAWAN iPartner V KRISHNAN Managing DirectorMembership No. F 87228 SUJATHA RATNAM Director

For and on behalf of VISHAL GARG Company SecretaryPrice WaterhouseChartered Accountants


13 Ateev.p65 8/19/2009, 12:32 PM456

MAX ATEEV LIMITED



RUPEES


INCOME

Other Income 6 498,796.14 1,091,974.72

498,796.14 1,091,974.72

EXPENDITURE

Administration and Other Expenses 7 734,317.24 2,101,754.73

Financial Expenses 8 280.00 9,686.00

Depreciation 3 95,868.40 296,020.96

830,465.64 2,407,461.69

(LOSS) FOR THE YEAR (331,669.50) (1,315,486.97)

(LOSS) BROUGHT FORWARD (380,148,195.58) (378,832,708.61)

BALANCE CARRIED FORWARD TO THE BALANCE SHEET (380,479,865.08) (380,148,195.58)

Earnings Per Share (Rs. per equity share of Rs.10/- each)


- Basic and Diluted (0.01) (0.04)

Number of Shares used in computing earnings per share

- Basic and Diluted 31,443,600 31,443,600







13 Ateev.p65 8/19/2009, 12:32 PM457

MAX ATEEV LIMITED







Gurgaon New Delhi

JUNE 24, 2009 JUNE 24, 2009

RUPEES


A. CASH FLOW FROM OPERATING ACTIVITIES(LOSS) FOR THE YEAR (331,669.50) (1,315,486.97)

Adjustments for:Depreciation 95,868.40 296,020.96Interest Expenses - 5,382.00Net (Profit)/Loss on Sale of Fixed Assets 525,746.24 1,243,962.40Assets Written Off - 580,506.33Debit Balances Written Off - 22,537.00Liabilities/Provisions No Longer Required Written Back (498,796.14) (1,076,253.72)

Operating (Loss) Before Working Capital Changes (208,851.00) (243,332.00)

Adjustments for:Other Receivables - 50,500.00Trade Payables 57,239.00 33,802.00

Cash From/(Used in) Operating Activities (151,612.00) (159,030.00)


Proceeds from Sale of Fixed Assets 311,330.00 46,087.00

Cash From Investing Activities 311,330.00 46,087.00


Proceeds/ (Repayment) of Loan (133,988.00) 91,548.00

(133,988.00) 91,548.00

Increase/ (Decrease) in Cash and Cash Equivalents 25,730.00 (21,395.00)

Cash and Cash Equivalents - As At March 31, 2008 92,654.24 114,049.24Cash and Cash Equivalents - As At March 31, 2009 118,384.24 92,654.24

Net Increase/(Decrease) in Cash and Cash Equivalents 25,730.00 (21,395.00)

Notes

1 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 consists of Balances with Banks: RUPEES


Balance with Bank 118,384.24 92,654.24

118,384.24 92,654.24


13 Ateev.p65 8/19/2009, 12:32 PM458

MAX ATEEV LIMITED


RUPEES



Authorised

31,500,000 Equity Shares of Rs. 10/- each 315,000,000.00 315,000,000.00


Issued, Subscribed and Paid UP


31,443,600 (Previous year 31,443,600) Equity

Shares of Rs.10/- each fully paid up 314,436,000.00 314,436,000.00

(held by Max India Limited the holding company) 314,436,000.00 314,436,000.00

SCHEDULE - 2

UNSECURED LOANS

From Max India Limited [(The Holding Company)(repayable on demand)] 67,406,470.56 67,540,458.56

67,406,470.56 67,540,458.56


SCHEDULE - 3

FIXED ASSETS

(Refer Notes A4, A5 and B10 on Schedule 12)

RUPEES


Particulars As on Deletion As on As on During the Deletions As on As at As at

01.04.2008 31.03.2009 01.04.2008 Period 31.03.2009 31.03.2009 31.03.2009 31.03.2008

Tangible assets

Plant and Machinery 1,381,450.00 1,354,200.00 27,250.00 488,093.02 45,176.02 522,350.20 10,918.84 16,331.16 893,356.98

Computers 9,613,277.57 - 9,613,277.57 9,613,277.57 - - 9,613,277.57 - -

Furniture & Fixtures 10,400.00 10,400.00 - 4,884.19 289.37 5,173.56 - - 5,515.81

Office Equipments 1,038,442.00 - 1,038,442.00 282,682.33 50,403.01 - 333,085.34 705,356.66 755,759.67

Intangible assets

Technology Fees 66,048,876.00 - 66,048,876.00 66,048,876.00 - - 66,048,876.00 - -

Total 78,092,445.57 1,364,600.00 76,727,845.57 76,437,813.11 95,868.40 527,523.76 76,006,157.75 721,687.82 1,654,632.47

Previous Year 85,263,298.80 7,170,853.23 78,092,445.57 81,442,089.65 296,020.96 5,300,297.50 76,437,813.11 1,654,632.46 3,821,209.15

13 Ateev.p65 8/19/2009, 12:32 PM459

MAX ATEEV LIMITED



RUPEES


SCHEDULE - 4


BANK BALANCES

With Scheduled Banks

- in Current Accounts 118,384.24 92,654.24

118,384.24 92,654.24

LOANS AND ADVANCES

(Unsecured, Considered Good, Unless Otherwise Stated)

Security Deposit

- Considered Good 41,000.00 41,000.00

- Considered Doubtful 3,600,000.00 3,600,000.00

- Provision for Doubtful Advances (3,600,000.00) 41,000.00 (3,600,000.00)

Advance Income Tax 1,195,645.00 1,195,645.00

1,236,645.00 1,236,645.00

1,355,029.24 1,329,299.24

SCHEDULE - 5


Current Liabilities

Sundry Creditors*

-Total Outstanding Dues of Creditors Other Than Micro

Enterprises & Small Enterprises 171,115.00 122,615.00

Other Liabilities 19,320.00 12,375.00

190,435.00 134,990.00

Provisions

Provision for Diminution in Value of Fixed Assets 523,676.58 1,020,678.72


714,111.58 1,155,668.72* There are no dues to creditors under the definition of Micro Enterprises & Small

Enterprises as at March 31, 2009 and March 31, 2008

RUPEES


SCHEDULE - 6

OTHER INCOME

Profit on Sale of Assets - 15,721.00

Liabilities/Provisions No Longer Required Written Back 498,796.14 1,076,253.72

498,796.14 1,091,974.72

13 Ateev.p65 8/19/2009, 12:32 PM460

MAX ATEEV LIMITED


RUPEES


SCHEDULE - 7


Legal and Professional 203,911.00 204,996.00

Rates and Taxes 84.00 32,502.00

Filing Fee - 1,530.00

Printing and Stationery 4,576.00 -

Assets Written Off - 580,506.33

Debit Balances written Off - 22,537.00

Loss on Sale of Fixed Assets 525,746.24 1,259,683.40

734,317.24 2,101,754.73

SCHEDULE - 8

FINANCIAL EXPENSES

Bank Charges 280.00 4,304.00

Interest Paid - 5,382.00

280.00 9,686.00


13 Ateev.p65 8/19/2009, 12:32 PM461

MAX ATEEV LIMITED



SCHEDULE - 9



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


1956.


Revenue represents amounts invoiced during the year, exclusive of value added tax and other applicable taxes.

3 Expenditure


4 Fixed Asset and Depreciation

(i) Fixed assets are stated at cost of acquisition including freight, duties and other incidental expenses relating to acquisition

and installation.

(ii) Depreciation on fixed assets is provided under the straight-line method on a pro-rata basis at rates prescribed by Schedule

XIV to the Companies Act, 1956 except on computers which are depreciated over a period of three years i.e. useful life of asset

as estimated by the management and on Leasehold Improvements, which are depreciated over the period of the lease.

(iii) The technology fee capitalized is depreciated over a period of three years.

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 on “Borrowing Costs”. Other borrowing costs are charged

to revenue.

6 Investments

Long-term investments are valued at cost. Provision for diminution is made to recognise permanent erosion in value.

7 Income Tax

Provision for tax consists of current tax and deferred tax. Current tax provision is computed for current income based on the tax


the Balance Sheet date between the carrying amount of assets and liabilities and their respective tax bases and carry forward of

operating loss. Deferred tax assets are recognised based on management estimates of available future taxable income and assessing

their certainty.



at year-end rates.

(ii) The difference in translation of monetary assets and liabilities and realised gains and losses on foreign exchange transactions

are recognized in the Profit and Loss Account.

13 Ateev.p65 8/19/2009, 12:32 PM462

MAX ATEEV LIMITED




1 The Company is not carrying out any commercial operations and is in the process of settling remaining dues and completing

assessments with various authorities. However, these accounts have been prepared on a going concern basis on accrual basis in

accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India.

RUPEES



(i) Claims against the company not acknowledged as debts 244,000.00 244,000.00

(ii) There are certain income-tax proceedings pending against the Company at various stages of appeal, as per details given

below-

Assessment year Appeal Pending Before




The Company is hopeful that the above appeals will be disposed off in its favour.

3 Out of the total share capital of Rs. 314,436,000.00 as on March 31, 2009, Max India Limited holds Rs. 314,435,800.00 of the

share capital, consisting of 31,443,580 shares of Rs.10/- each. The remaining share capital of Rs. 200.00 consisting of 20 shares of

Rs. 10/- each are held by nominees of Max India Limited.

4 Net Deferred Tax Asset has not been recognized due to virtual uncertainty regarding future taxable profits.

5 Earnings per share

RUPEES



Basic and Diluted

(Loss) for the year (Rs.) (331,669.50) (1,315,486.97)

Weighted Average Number of Equity Shares 31,443,600 31,443,600

EPS (Rs.) (0.01) (0.04)

Share Details (Nos.)



6 Auditors’ Remuneration

Audit fee (Including Service Tax) 22,060.00 22,472.00

7 The Company does not have any finance lease/operating lease arrangement.


Holding Company Max India Limited

Fellow subsidiaries Max New York Life Insurance Company Ltd., Max Healthcare Institute Ltd., Max Medical Services

Ltd., Max Neeman Medical International Inc. USA, Neeman Medical International NV, Neeman Medical

International BV, Max Neeman Medical International Ltd., Max UK Ltd., Pharmax Corporation

Ltd., Max HealthStaff International Limited, Alps Hospital Ltd.,

13 Ateev.p65 8/19/2009, 12:32 PM463

MAX ATEEV LIMITED




as follows:

RUPEES

Particulars Holding Company Fellow Subsidiaries

Sale of Fixed Assets - -

(-) (14513)

Loan taken during the year 150,000.00 -

(1,00,000.00) (-)

Loan repaid during the year 350,000.00 -

(35,200.00) (-)

Expenses

- Others expenses 66,012.00 -

(26,748.00) (-)

Amount Outstanding

- Other payable 67,406,470.56 -

(67,540,458.56) (-)

Figures in bracket are for previous year

9 Segment Reporting

As the Company is not carrying any business activity, the disclosure requirements as per Accounting Standard 17 “Segment Reporting”

are not applicable to the Company.

10 Provision for diminution in value of Fixed Assets

RUPEES


Opening Balance 1,020,678.22 1,984,732.44

Add : Provided during the year - -

Less : Written back during the year 497,002.14 964,053.72

Closing Balance 523,676.08 1,020,678.72


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


V KRISHNAN Managing DirectorNew Delhi SUJATHA RATNAM DirectorJUNE 24, 2009 VISHAL GARG Company Secretary

13 Ateev.p65 8/19/2009, 12:32 PM464

MAX ATEEV LIMITED






Date Month Year



N I L N I L


N I L N I L


3 8 1 8 4 2 3 8 1 8 4 2

SOURCES OF FUND

Paid-up Capital Reserve and Surplus

3 1 4 4 3 6 N I L


N I L 6 7 4 0 6


7 2 2 N I L


6 4 0 N I L

Accumulated Losses

3 8 0 4 8 0


4 9 9 8 3 1


3 3 2 3 3 2


. 0 1 N I L


Product Description S O F T W A R E S E R V I C E S

√

√

√

√

13 Ateev.p65 8/19/2009, 12:32 PM465

MAX ATEEV LIMITED


13 Ateev.p65 8/19/2009, 12:32 PM466

MAX UK LIMITED


The Directors present their report and the financial statements of

the company for the year ended 31st March 2009.

PRINCIPAL ACTIVITIES AND BUSINESS REVIEW

Your company has been providing business and administrative

support services to officials of various group companies of Max

India Limited, the parent company at UK.

RESULTS AND DIVIDENDS

The results for the year and the Company’s financial position at the

end of the year are shown in the attached financial statements.

During the year under review, your Company earned a revenue of

Rs. 60.61 lacs and a profit of Rs.3.36 lacs as against previous year

revenue of Rs. 62.22 lacs and profit of Rs. 6.01 lacs. The directors

do not recommend a dividend.

DIRECTORS

The current directors of the Company are Mr. Neeraj Basur and Ms.

K. Stanley. None of the directors hold any interest in the shares of

the Company.






Act, 1956, the Directors confirm that:

i in the preparation of annual accounts, the applicable



ii the Directors had selected such accounting policies and applied





iii the Directors had taken proper and sufficient care for the





iv the Directors had prepared the annual accounts, on a going

concern basis.

OTHER PARTICULARS


Indian Companies Act, 1956 are not applicable to the company.

AUDITORS

M/s K.K. Mankeshwar & Co., Chartered Accountants, Auditors of

the Company retire at the conclusion of the ensuing Annual General

Meeting and are eligible for re-appointment.


New Delhi Karin Stanley Director

JUNE 18, 2009 Neeraj Basur Director

Directors’ Report

14 MAX UK.p65 8/19/2009, 12:32 PM469

MAX UK LIMITED


TO THE MEMBERS OF MAX UK LIMITED

1. We have audited the attached Balance Sheet of MAX UK

LIMITED as at March 31, 2009, and the related Profit and Loss


date annexed thereto. These financial statements are the

responsibility of the company’s management. Our responsibility

is to express an opinion on these financial statements based

on our audit.





material misstatement. An audit includes examining, on a test

basis, evidence supporting the amounts and disclosures in the








Order, 2004, issued by the Central Government of India in terms

of sub-section (4A) of Section 227 of ‘The Companies Act,

1956’ of India (the ‘Act’) and on the basis of such checks of

the books and records of the company as we considered

appropriate and according to the information and explanations

given to us, we further report that:

i. The Company has maintained proper records showing full

particulars including quantitative details and situation

of fixed assets.

ii. The fixed assets of the company have been physically

verified by the management during the year and no

material discrepancies between the book records and the

physical inventory have been noticed. In our opinion, the


iii. During the year, the Company has not disposed off a major

part of the fixed assets

iv. The company has neither granted nor taken any loans,

secured or unsecured, to/from companies, firms or other

parties covered in the register maintained under Section

301 of the Act.


explanations given to us, having regard to the explanation

that certain items purchased are of special nature for

which suitable alternative sources do not exist for

obtaining comparative quotations, there is an adequate

internal control system commensurate with the size of

the company and the nature of its business for the

purchase of fixed assets and for sale of services. Further,

on the basis of our examination of the books and records

of the company, and according to the information and

explanations given to us, we have neither come across

nor have been informed of any continuing failure to

correct major weaknesses in the aforesaid internal control

system.

vi. In our opinion, the Company has an internal audit system

commensurate with the size and nature of its business.

vii. The Central Government of India has not prescribed the




viii. (a) According to the information and explanations given


us, in our opinion, the company is generally regular

in depositing the undisputed statutory dues, investor




applicable with the appropriate authorities. As

informed, the provisions relating to Employees

Provident Fund and Miscellaneous Provisions Act,

1952 and Employees State Insurance are not




us, there are no dues of income-tax, sales tax, wealth

tax, service tax, customs duty, excise duty and cess

which have not been deposited on account of any

dispute.

ix. The company has accumulated losses, as at March 31,


not incurred cash losses in the financial year and the


x. During the course of our examination of the books and


Auditors’ Report

14 MAX UK.p65 8/19/2009, 12:32 PM470

MAX UK LIMITED




us, we have neither come across any instance of fraud on

or by the company, noticed or reported during the year,

nor have we been informed of such case by the

management.

xi. The other clauses of paragraph 4 of the Companies

(Auditor’s Report) Order 2003, as amended by the

Companies (Auditor’s Report) (Amendment) Order, 2004,

are not applicable in the case of the company for the

current year, since in our opinion there is no matter which

arises to be reported in the aforesaid order.













with the accounting standards referred to in sub-section

(3C) of Section 211 of the Act;






the Act;



financial statements together with the notes thereon and

attached thereto give in the prescribed manner the




(i) in the case of the Balance Sheet, of the state of affairs

of the company as at March 31, 2009;



(iii) in the case of the Cash Flow Statement, of the cash

flows for the year ended on that date

DINESH K. BACHCHAS

Partner


For and on Behalf of

New Delhi K K Mankeshwar & Co.


Auditors’ Report

14 MAX UK.p65 8/19/2009, 12:32 PM471

MAX UK LIMITED


RUPEES


SOURCES OF FUNDS


Share Capital 1 21,300,000 21,300,000

Reserves and Surplus 2 1,655,282 2,297,000

22,955,282 23,597,000


FIXED ASSETS 3

Gross Block 849,850 912,272

Less: Depreciation 849,850 912,272

Net Block - -


Cash and Bank Balances 1,181,781 519,581

Sundry Debtors 5,417,309 5,853,030


9,764,445 9,792,118

LESS: CURRENT LIABILITIES AND PROVISIONS

Current Liabilities 5 959,158 645,994

Provisions 66,075 101,337

1,025,233 747,331



22,955,282 23,597,000





DINESH K. BACHCHAS iPartner NEERAJ BASUR DirectorMembership No. 97820 KARIN STANLEY Director

For and on behalf ofK.K. Mankeshwar & Co.Chartered Accountants


14 MAX UK.p65 8/19/2009, 12:32 PM472

MAX UK LIMITED



RUPEES


INCOME

Overheads Recovered 6,046,568 6,173,564

Other Income 6 14,639 48,820

6,061,207 6,222,384

EXPENDITURE

Administration and Other Expenses 7 5,639,935 5,576,922


Depreciation 3 - 32,330

5,654,256 5,621,031

PROFIT BEFORE TAX 406,951 601,353

Provision for Taxation 70,808 325

PROFIT AFTER TAX 336,143 601,028


(LOSS) CARRIED FORWARD TO BALANCE SHEET (14,216,070) (14,552,213)

Basic and Diluted earnings per share

Profit after tax 336,143 601,028

Weighted average number of ordinary shares 299,742 299,742

Earning per ordinary share of GBP 1/- each 1.12 2.01

Number of Shares used in computing earnings per share 299,742 299,742

Outstanding at the beginning of the year 299,742 299,742

Outstanding at the end of the year 299,742 299,742







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MAX UK LIMITED



RUPEES


A. CASH FLOW FROM OPERATING ACTIVITIESNet Profit Before Tax 406,951 601,353Adjustments for:Depreciation - 32,330Interest Income (6,683) (20,389)

Operating Profit Before Working Capital Changes 400,268 613,294Adjustments for:Other Receivables 689,873 (1,243,459)Trade Payables 313,164 (220,540)

Cash Generated From/(Used in) Operations 1,403,305 (850,705)Direct Taxes (Paid) (106,070) (194,754)

Cash From/(Used in) Operating Activities 1,297,235 (1,045,459)


Cash From/(Used in) Investing Activities - -


Interest received on Deposit with Bank 6,683 20,389

Cash From/(Used in) Financing Activities 6,683 20,389Net Increase/(Decrease) in Cash and Cash Equivalents 1,303,918 (1,025,070)Foreign Currency Translation Reserve (641,718) (610,941)

662,200 (1,636,011)

Cash and Cash Equivalents As At March 31, 2008 519,581 2,155,592Cash and Cash Equivalents As At March 31, 2009 1,181,781 519,581

Net Increase/(Decrease) in Cash and Cash Equivalents 662,200 (1,636,011)

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 and Balances with Bank: RUPEES


- Cash in Hand 371 955- Balance with Bank 1,181,410 518,626

1,181,781 519,581







14 MAX UK.p65 8/19/2009, 12:32 PM474

MAX UK LIMITED



SCHEDULE - 3

FIXED ASSETS

(Refer Notes A4 and A5 on Schedule 9)

RUPEES


Particulars As on Additions Deletions Translation As on As on Additions Translation As at As at As at

April 1, Reserve March 31, April 1, Reserve March 31, March 31, March 31,

2008 2009 2008 2009 2009 2008

Tangible Assets

Furniture, Fixture and

Equipments

- Furniture and Fixture 499,919 - - (34,207) 465,712 499,919 - (34,207) 465,712 - -

- Office Equipment 412,353 - - (28,215) 384,138 412,353 - (28,215) 384,138 - -

Total 912,272 - - (62,422) 849,850 912,272 - (62,422) 849,850 - -

Previous year 977,025 - - (64,753) 912,272 943,093 32,330 (63,151) 912,272

RUPEES


SCHEDULE-1

SHARE CAPITAL

AUTHORISED

1,000,000 (Previous year 1,000,000) Ordinary shares of GBP 1/- each 71,061,111 71,061,111

ISSUED, SUBSCRIBED AND PAID UP

299,742 (Previous year 299,742) Ordinary Shares of GBP 1/- each 21,300,000 21,300,000

(held by Max India Limited, the Holding Company) 21,300,000 21,300,000

SCHEDULE - 2

RESERVE AND SURPLUS

FOREIGN CURRENCY TRANSLATION RESERVE

Opening Balance 2,297,000 2,909,218

Additions during the year (641,718) (612,218)

Closing Balance 1,655,282 2,297,000

14 MAX UK.p65 8/19/2009, 12:32 PM475

MAX UK LIMITED



RUPEES


SCHEDULE - 4



Cash in Hand 371 955

With Non-Scheduled Bank

- in Current Account (Barclays Bank Plc.) * 1,181,410 518,626

1,181,781 519,581

* Maximum balance outstanding during the year Rs. 3,898,014 (Previous year Rs. 4,447,524/-)

SUNDRY DEBTORS

Unsecured **


- Considered Good 3,796,931 4,075,850

Other Debts

- Considered Good 1,620,378 1,777,180

5,417,309 5,853,030

** Amounts due from companies under the same management

- Max Healthcare Institute Limited Rs. 1,620,378/- (Previous year Rs. 1,777,180/-)

- Neeman Medical International NV Rs. 3,796,931/- (Previous year Rs. 4,075,850/-)


- Max India Limited Rs. 1,620,378/- (Previous year Rs. 1,777,180/-)

- Max Healthcare Institute Limited Rs. 1,777,180/- (Previous year Rs. 1,777,180/-)

- Neeman Medical International NV Rs. 4,075,850/- (Previous year Rs. 4,365,151/-)

LOANS AND ADVANCES

Unsecured, Considered Good

Advances recoverable in cash or in kind or for value to be received 2,994,940 3,236,814


3,165,355 3,419,507

9,764,445 9,792,118

SCHEDULE - 5

CURRENT LIABILITIES

Sundry Creditors***

Total outstanding dues of creditors other than micro enterprises

and small enterprises 514,730 566,867

Other Liabilities 444,428 79,127

959,158 645,994

*** There are no dues to creditors coming under the definition of Micro Enterprises and

Small Enterprises as at March 31, 2009 and March 31, 2008

14 MAX UK.p65 8/19/2009, 12:32 PM476

MAX UK LIMITED


RUPEES


SCHEDULE - 6

OTHER INCOME

Interest on Fixed Deposit with Bank 6,683 20,389

Miscellaneous Income 7,956 28,431

14,639 48,820

SCHEDULE - 7


PERSONNEL


Salaries and Wages 3,182,404 3,249,244

ADMINISTRATION and OTHER EXPENSES

Power and Fuel 23,788 9,504


Travelling and Conveyance 8,354 23,395

Rent 665,918 647,249

Communication 400,028 365,540


Printing and Stationery 33,733 44,840

Repairs and Maintenance-Others 37,155 53,288

Insurance 389,685 398,357


5,639,935 5,576,922

SCHEDULE - 8

FINANCIAL EXPENSES


14,321 11,779


14 MAX UK.p65 8/19/2009, 12:32 PM477

MAX UK LIMITED



SCHEDULE - 9




1956.




3 Expenditure


4 Fixed Assets

Fixed Assets are stated at their original cost.

5 Depreciation

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.

6 Taxation

Provision for tax consists of current tax and deferred tax. Current tax provision is computed for current income based on the tax


the balance sheet date between the carrying amount of assets and liabilities and their respective tax basis. Deferred tax assets are



(i) Monetary assets and liabilities related to foreign transactions remaining unsettled at the end of the year are translated at

year-end rates.


are recognized in the Profit and Loss account.

8 Leases





Max UK Limited is incorporated and operates under the applicable laws of England and Wales.




Standard-11 issued by ICAI on ‘The Effects of Changes in Foreign Rates’. The functional currency of the Company is Pound

Sterling (GBP).

14 MAX UK.p65 8/19/2009, 12:32 PM478

MAX UK LIMITED





sheet date (1GBP = Rs. 74.1579 as on March 31, 2009 and 1GBP = Rs. 79.6049 as on March 31, 2008).

b) For revenues and expenses using average exchange rates prevailing during the reporting period (1GBP = Rs. 79.5601 for

the period April 1, 2008 to March 31, 2009 and 1GBP = Rs. 81.2311 for the period April 1, 2007 to March 31, 2008).


11.

3 Contingent Liabilities – Nil

4 Leases



a) Finance Lease


b) Operating Lease

(i) Lease rentals recognised in the profit and loss account for the year is Rs. 665,918/- (Previous year Rs. 647,249/-).

(ii) The Company has entered into operating leases 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.

(iii) The total of future minimum lease payments under non-cancellable leases are as follows:

RUPEES

March 31, 2009 March 31, 2008

Not later than one year 332,959 332,073

5 Segment Reporting:

The Company operates only in one business segment viz. to work as a representative office of Max Group companies. Accordingly

there are no reportable business segments.

6 Salaries and wages include an amount of Rs. 3,182,404 (Previous year Rs. 3,249,244) paid to a director of the Company.

7 Deferred Tax:

The net deferred tax asset has not been recognized due to virtual uncertainty regarding future taxable profits.


(i) Holding Company Max India Limited, India

(ii) Fellow 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., Pharmax Corporation

Ltd., Max Neeman Medical International Ltd., Max HealthStaff International Ltd.

(iii) Key Management Personnel Ms. Karin Stanley

14 MAX UK.p65 8/19/2009, 12:32 PM479

MAX UK LIMITED





JUNE 18, 2009 KARIN STANLEY Director


are as follows:

RUPEES

Holding Fellow Key Management

Company Subsidiaries Personnel

(i) Income

- Overhead Recovered 3,023,284 3,023,284 -

(3,086,782) (3,086,782) (-)

(ii) Salaries and Wages - - 3,182,404

(-) (-) (3,249,244)

(ii) Amount Outstanding

- Other Receivable - 5,417,309 -

(-) (5,853,030) (-)


10 RUPEES

Auditors’ Remuneration Current Year Previous Year

Audit Fees 318,240 203,078


14 MAX UK.p65 8/19/2009, 12:32 PM480

MAX UK LIMITED




Registration No. 3 6 2 5 9 0 4 State Code N A


Date Month Year



N I L N I L


N I L N I L


2 2 9 5 5 2 2 9 5 5

SOURCES OF FUND

Paid-up Capital Reserve and Surplus

2 1 3 0 0 1 6 5 5


N I L N I L


N I L N I L


8 7 3 9 N I L

Accumulated Losses

1 4 2 1 6


6 0 6 1 5 6 5 4

+ - Profit before Tax + - Profit after Tax

3 3 6 3 3 6


1 . 1 2 N I L

+ - Diluted Earning per Share in Rs. Dividend Rate (%)

1 . 1 2


Product Description N O T A P P L I C A B L E

√

√

√

√

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MAX UK LIMITED


14 MAX UK.p65 8/19/2009, 12:32 PM482

MAX UK LIMITED


Notes

14 MAX UK.p65 8/19/2009, 12:32 PM483

MAX INDIA LIMITED




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