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Respected Shareholders of Max India Limited,
I am pleased to share the following highlights with you:
Max India's consolidated net revenue increased by 24% to Rs.10,624 crore. This translates to a consolidated top–line of almost US$ 1.9 billion
Consolidated earnings before depreciation, interest, tax and amortisation (EBIDTA) rose by 182% to Rs.1,213 crore Consolidated Profit Before Tax (PBT) grew by 310% to Rs.991 crore
Consolidated net profit (after minority interest) was Rs.784 crore in FY2013 – which represented a 406% growth
Net worth increased by 16% to Rs.2,903 crore as on March 31, 2013
Your Company's Board of Directors has recommended a dividend of 610% for FY2013
As a Company that is in the 'businesses of life', with a fundamental desire to serve and a quest for excellence delivered through competence and expertise, I am pleased to report that Max India now looks after the needs of 5.7 million customers through 16,000 employees, more than 2,100 doctors, and 44,000 insurance agents. Despite difficult economic circumstances within India, your Company, with its resilient and diversified business model, has moved along a rapid growth trajectory. Its portfolio of businesses has started generating returns and, in doing so, has demonstrated intrinsic values.
Let me now touch upon different aspects of the business.
Life insurance through Max Life: This is a joint venture in which your Company owns 71% while MS&AD Insurance Group Holdings of Japan, through their Company Mitsui Sumitomo Insurance (MSI) holds 26%. MSI paid Rs.2,731 crore (US$ 535 million) for the stake, making it the second largest foreign investment in the Indian life insurance market.
Despite a complex environment due to frequent and material changes in regulations since September 2010, Max Life performed well in FY2013, solidifying its position as the largest non–bank owned private life insurer in the country and registering a growth in premium while growth for most private life insurers and overall private life insurance market was negative.
Gross written premium grew by 4% to Rs.6,639 crore, with a 6% increase in renewal premium to Rs.4,739 crore
Assets Under Management rose by 19% to Rs.20,458 crore
Sum assured stood at Rs.1,69,167 crore an increase of 11% over the previous financial year
Solvency ratio was 521%, more than three times the mandatory 150%
The conservation ratio, an indicator of customer retention, was 78% one of the best among private life insurers Enterprise Level Profit Before Tax of Rs.860 crore, and Shareholder Profit Before Tax was of Rs.475 crore
It declared its maiden dividend of Rs.259 crore to shareholders as well as a bonus of approximately Rs.297 crore to participating policyholders and a one–time special bonus of Rs.130 crore
Healthcare through Max Healthcare: With 12 hospitals in Delhi–NCR, Punjab and Uttarakhand that offer services in over 30 medical disciplines, Max Healthcare (MHC) is a leading provider of international class healthcare in India. It is committed to the highest standards of medical and service excellence, patient care, scientific research and medical education.
FY2013 saw the hiring of over 950 new doctors, more than 1,500 new nurses and over 1,100 other staff. The total staff strength increased by 27% to over 6,400 people
Total revenues grew by 39% to Rs.1,149 crore in FY2013
EBIDTA increased over 5 times from Rs.12 crore in FY2012 to Rs.72 crore in FY2013
Health Insurance through Max Bupa: Your Company's presence in the growing health insurance market is through Max Bupa Health Insurance (Max Bupa), which is a joint venture with BUPA (British United Provident Association) Plc., UK. The Company completed three years of operations in March 2013. Today, Max Bupa offers quality health insurance services with a team of over 1,050 people and a network of 21 offices across 13 cities. Through direct distribution and its indirect presence in 300 plus cities, Max Bupa has rapidly grown to now cover over 1.2 million customers across a network of 1,800 hospitals.
Antara, is your Company's newest venture that focuses on 'improving the quality of life of seniors' by creating vibrant residential communities with comprehensive services; its first community is well into its project schedule and will open in 2015. Max Speciality Films, which produces bi–axially oriented polypropylene films for niche applications in flexible packaging has performed well despite a tough market environment for packaging materials and Max Neeman, which conducts specialised clinical research for global pharmaceutical companies, continued to perform despite regulatory challenges.
Please read more about these in the chapter on Management Discussion and Analysis.
Let me end by touching upon some core values.
Like you, I am delighted with your Company's financial and operational results. I am also confident that the highly professional teams across each of the businesses, united by a top class leadership at Max India will continue generating good results for your Company's stakeholders.
But what is dearest to me is creating a strong organisation with enduring values.
To my mind, this can only happen with a relentless 'others–before–self' focus on service excellence and customer satisfaction. I am your chief fiduciary to ensure that Max India's activities are driven by a sense of social responsibility and commitment. I want to see each business setting high service benchmarks and having the best operational standards. I want Max India to be one of India's most admired corporates for service excellence. I want our customers to think so well of us that they feel proud to refer us to others. I want each of our customers to be delighted by our services and thus become a friend and a well–wisher.
I want us to say, day in and day out, "Our way of conducting business is by focussing on core customer values, by being fair and honest, and by treating our customers and employees as we would like to be treated". These are the things that will make Max India a laudable venture. Values that will stand the test of time.
There is another aspect of customer care that is just as important to me, and to all of us at Max India. We think of each of you, our shareholders, as a valued customer. After all, you have the choice of investing elsewhere, but have chosen to place your trust on us. This is why we are 'Your Company'.
This trust can be kept at its highest level so long as we maintain the best standards of corporate governance. This is the reason why your Company is proud of its Board of Directors – not just in Max India but in each of its subsidiary companies; of their professionalism, independence and competence; of the Board practices that are followed; and of your Directors' and management's determination as ethical fiduciaries to create sustained growth in corporate value – for you, the owner and customer.
Thank you for your support and goodwill.
With best wishes,