1 Max India Limited Investor Presentation Disclaimer This presentation is a compilation of unaudited financial and other information. This may also contain statements that are forward looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from our expectations and assumptions. We do not undertake any responsibility to update any forward looking statements nor should this be constituted as a guidance of future performance.
Transcript
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Max India Limited
Investor Presentation
DisclaimerThis presentation is a compilation of unaudited financial and other information. This may alsocontain statements that are forward looking. These statements are based on currentexpectations and assumptions that are subject to risks and uncertainties. Actual results coulddiffer materially from our expectations and assumptions. We do not undertake any responsibilityto update any forward looking statements nor should this be constituted as a guidance of futureperformance.
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Max India Limited is a multi-business corporate, driven by the spirit of Enterprise,focused on Knowledge, People and Service oriented businesses of Life Insurance,Healthcare and Clinical Research. Max’s other businesses are Speciality Plastic Productsfor the packaging industry and Healthcare Staffing
Core Others
VISION
“To be one of India’s Most Admired Corporates for Service Excellence”
MISSIONEstablish niche service businesses in Life Insurance, Healthcare and Clinical ResearchLife Insurance and Healthcare……..convergence!Rank amongst top 3 players in each nichePartner with best-in-class world leadersCreate service excellence in all businesses
Max India – An Introduction
BSE Scrip Code: 500271, NSE Ticker: Max, Bloomberg: Max IN
Net Sales 13.8 9.3 48%Service Income 125.3 66.1 90%Total Revenue 172.9 81.7 112%Net Profit/(Loss) (3.5) (4.2) NACash Generated from Operations 84.0 24.2 247%
FDI – Warburg Pincus13.5%
274.4172.7
492.2
(12.3)(20.1)(27.8)
2004-05 2005-06 2006-07Revenue Profitablity
Max India – Key Highlights
Performance Summary Consolidated trend
Share Price (Adjusted for Stock Split)
FII – Warburg Pincus9.1%
FII – Others30.5%
Others13.5%
Promoter Group –Analjit Singh
33.4%
Shareholding Pattern – June 30, 2007
US$ Mn
* Excludes one-time profit before tax of US$ 99.2 Mn (profit after tax US$ 90.7 Mn) on sale of stake in Hutchison Essar Ltd.
US$ Mn
*
100
140
180
220
260
300
Jul-06
Aug-06
Sep-06
Oct-06
Nov-06
Dec-06
Jan-07
Feb-07
M ar-07
Apr-07
M ay-07
Jun-07
US$ 1 = INR 40.50
*
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n The issue was subscribed 2.3 times at price of Rs. 240 per Share
n Investors having long-term horizon subscribed around 80% of theoffering
n FII holding in the company increases from around 26% earlier toaround 39% after the issue
n About 40% of the allocation went to US based investors while theremainder was split evenly between Asia and Europe basedinvestors
Max India raises Rs. 1,000 Crore through Qualified Institutional Placement (“QIP”)
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Max India – Group Structure
TRADITIONAL BUSINESS
MSP
Division of MAX:• BOPP• FOIL
LIFE INSURANCE
MNYL
Life Insurance
73.25%
New York Life
26%
HEALTHCARE
70.06%*
MAX HEALTHCARE
Healthcare Facilities
MAX MEDICAL
Max Devki Devi Hospital Project
100%
MAX HEALTHSTAFF
Training and placement of nursing staff
100%
CLINICAL RESEARCH
100%
NEEMAN BV
100%
Holding Company
NEEMAN NV
Holding Company
NEEMAN INC, USA
Global BD Office
NEEMAN ICIC
Inactive
74.25%
100%
MAX UK
100%
Key:
Investment VehicleOperating EntityJV Partner
NEEMAN ASIA
Clinical Trials
100%
ALPS Hospital
Gurgaon Hospital Project
100%
HEALTHCARE STAFFING
REAL ESTATE
PHARMAX
Owns real estate in
Okhla
85.20%
OTHERS
MAX ATEEV
Max India
UK Liaison Office
Inactive
ESOPs
0.75%MAX Devki Devi Heart & Vascular
Institute
Service Agreement
MAX Balaji Hospital
Service Agreement
* Warburg Pincus holds 20.08%, IFC, Washington holds3.83% and other investors hold 6.03% of Max Healthcare
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Max India – Board of DirectorsDirector Profile
Mr. Analjit Singh Executive Chairman
Mr. Singh has been the driving force behind Max Group’s sustained growth and success since the early 80’s.Mr. Singh a prominent industrialist is an alumnus of Doon School; University of Delhi, and the GraduateSchool of Management, Boston University
Mr. B. Anantharaman Joint Managing Director
Mr. Anantharaman joined the Company in February 2001 as Group Finance Director bringing with him 24years of rich and wide international experience in the area of Finance and Business majorly with theGoodyear Tyre & Rubber Company, U.S.A. A graduate from Madras University, he is a CharteredAccountant, Cost and Works Accountant and Company Secretary
Dr. S.S. Baijal Dr. Baijal, a Director of the Company since 1988, has been actively involved in the formation of theCompany’s joint ventures. Prior to this he was with ICI (India) Limited for over 30 years where he retired asChairman
Mr. Ashwani Windlass Mr. Windlass was the Joint Managing Director of Max India from 1995 to 1998. Prior to this, he wasassociated with Max Group in various capacities since inception and had played a pivotal role in turning MaxIndia into a multi business enterprise. He is currently an Entrepreneur
Mr. N.C. Singhal Mr. Singhal was Vice Chairman and Managing Director of SCICI. He was also associated with ICICI Ltd,Government of India and Asian Development Bank
Mr. Bharat Sahgal Mr. Sahgal is with Gilford Securities in New York since November 2004. Prior to this he was associated withBrean Murray as Director of Research
Mr. Rajesh Khanna –Warburg Pincus
Mr. Khanna is one of the Managing Directors of Warburg Pincus India Pvt. Ltd. (WPIPL). WPIPL is controlledby Warburg Pincus LLC, which is a major global private equity firm headquartered in New York
Mr. N. Rangachary Mr. Rangachary served in various capacities in Government of India since 1960 including Chairman, CentralBoard of Direct Taxes and most recently the first chairman of Insurance Regulatory and DevelopmentAuthority
Mr. Piyush Mankad Mr. Mankad is a retired civil servant from the prestigious Indian Administrative Service. He was educated atDelhi University, India and later at Cambridge, U.K. He retired as the finance secretary Government of Indiaand subsequently was posted to the Asian Development Bank as Executive Director
Mr. Anuroop Singh Mr. Anuroop Singh, an eminent banker, was the Managing Director and CEO of MNYL. Prior to that he wasthe CEO of ANZ Grindlays Bank and Country General Manager at Bank of America, in India
Enable retention of patient trafficEnable ‘start-to-finish’ comprehensive, seamless care: Consult and Diagnostics,
Diagnostic tests, surgeries, post-surgical care
Max Healthcare Model
Tertiaryn Heart and Vascular Instituten Super Speciality Hospital
Heart and VascularNeurosciencesJoint Replacement and OrthopaedicsObstetrics and GynaecologyPaediatrics
Secondaryn Hospitals – 4n Speciality Centres – 2
Surgery and inpatient facilitiesHigh-end Diagnostics:MRI, CTDoctor ConsultationEye and Dental Care
Primary n Clinics/Implants – 9Specialist doctor consultation and a full time nurse.Basic diagnostics like Pathology Collection
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VISIONDeliver world class healthcare with a service focus, by creating an institution committed to the highest standards of medical & service excellence, patient care, scientific knowledge and medical education.
MISSION
GOALS• Profitable without profiteering.• Seamless linkage between secondary and tertiary care.• Innovate to address wider market.
KEY OBJECTIVES
STRATEGIES
WHAT – Medical USP’s ; Best in class ; Comprehensive care ; Convenience & accessibility ; Seamless service ; Patient records ; Consistent and customised care ; Service excellence ; Preventive health ; Caring place to work.
HOW – Train train train ; Partnership with Medical community ; Principal choice for physicians ; Never ending focus on medical and service excellence ; Build lasting customer relationships ; Primary, Secondary and Tertiary care through Co. managed / partnership; No franchising.
VALUES & BELIEFS OPERATING PRINCIPLESMETRICS &
STANDARDSPERFORMANCEMGMT PROCESS
• Create unparalleled standards of Medical & Service Excellence• Care provider of FIRST CHOICE• Principal Choice for Physicians• Ethical Practices • Create National Centre of Excellence for select Super Specialties.• Build towards international ‘reach’ by creating patient confidence through
• Courtesy & Caring always• Customer comes first• Do it right first time• International image standards• Efficient process management• Direct & open communications • Create trust• Fun at work• Compliance
• ISO 9001 : 2000• JCIA Accreditation• Credentialing / Grant
of privileges• Employee productivity• Employee Engagement survey• Service Dashboard - Sparsh• NABH Accreditation• NABL certified Lab system.
INITIATIVES• WHAT- HOW - WHEN - COST - LINKAGE• Shared responsibility with single accountability.• Unique approach through: - International benchmarking. - Walk the Talk - IT Capability- Medical – Management Alignment. - Rehearse rehearse - Cost Efficiency- Train train train. - Mystery customers - Attrition Management
Focused NCR centric delivery – for operational excellenceClose to customer – geographyComprehensiveness of medical services (except organ transplant and radio therapy)Leadership in 5 super-specialties in tertiary care-‘Star’ physicians supported by a group of high quality physiciansEthicsMemorable brand experience-‘Star’ and quality physicians-Infrastructure and equipment-No surprises – cost of care, pricing, medication-Signage-Look – feel – smell - touchInnovation to bring in walk-in customers-Location location-Max Health Plan-Other new programs ie Golden Years, Life Membership, PrepaidHigh quality nursing and paramedic care supported by nursing and paramedic collegeExtensive emphasis on training
Key Public MessagesMedical ExcellenceService Excellence – Total ExperienceIn your community - near youHigh-end tertiary care in Private
sectorComprehensivenessReferral system – National & International
Value for moneyPartnering with medical communityCaring place to work Corporate Social Responsibility
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Mr. Analjit Singh Chairman and Managing Director
Mr. B Anantharaman Joint Managing Director, Max India Limited
Dr. Ashok Seth
Mr. KK Mathur
Dr. RP Soonawala
Mr. Aman Mehta
Mr. Anuroop Tony Singh
Mr. Rajesh Khanna Warburg Pincus
Max Healthcare – Board of Directors
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Revenue (Q1’FY07-08) US$ 20 Mn, 63% y-o-y growth
Occupancy Approx. 66%
Staff Strength 2,400*
Physicians 1,250**
Patient Base Over 450,000
Patient Transactions Over 100,000 per month
Beds 770
ICU Beds 188
OTs 19
Cathlabs 3
MRIs 4
CTs 4
Fact Sheet
*Does not include 390 physicians on Rolls**Includes 390 physicians on Rolls
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Indian Healthcaren Healthcare spending in India is expected to grow at 15% p.a. and estimated
to contribute 6.1% of GDP in 2012
n Revenues generated by private hospitals currently estimated at around US$15.5 billion, likely to increase to US$ 35.9 billion by 2012 at a CAGR of 15%
n Industry expected to add 1 million beds over next six yearsPrivate sector expected to contribute approx. 89% of these beds at an investment ofaround US$ 70 billion by 2012Government expected to contribute approx. 11% of these beds at an investment ofaround US$ 8 billion by 2012
n Shift in disease profiles from Infectious to Lifestyle diseasesCardiovascular, Asthma and Cancer have become the most important segments andInpatient spending is expected to increase from 39% to 50%
n Growth to be powered by…Changing Spending PatternsInfrastructure NeedsHealth Tourism
n Target Segment – More than 200 million upper and middle class
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MAX HEART AND VASCULAR INSTITUTE – SAKET [South Delhi]
n 200 patient bedsn 3 Operation Theatres, 2 Cardiac
Catheterization Labsn Post Surgery Critical Care Unitn High Dependency Unitn Apex Coronary Caren Advanced Coronary Care Unitn Exclusive well equipped ‘Observation Bay’
and ‘Post Cath. Recovery’n Nuclear Diagnostic Services with Variable
Angle Dual Head Gamma Cameran Centralized Emergency Command with
Advanced Cardiac Life Support Ambulancesand Air Evacuation Service
n Max Institute of Allied Medical Sciences(High-end General Surgery)
Brain Suite (first in Asia) and IntraOperative MRI
DSA Lab (for Neuro Sciences)
Emergency Services
High end Radiology facilities with 64 sliceCardiac CT
MAX SUPER SPECIALITY HOSPITAL – SAKET [South Delhi]
Current Facilities
Operational since May 2006
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SECONDARY CARE MAX HOSPITALS OPERATIONAL AT…
Current Facilities
PITAMPURA(February 2002)(North Delhi)
90 inpatient beds2 OTLithotripsyMother and Child careNon-Invasive CardiologyPlastic and Reconstructive surgeryPhysiotherapyFull range diagnosticsPHP, OPD and Dentistry
NOIDA(August 2002)(Suburb)
39 inpatient beds2 OTMother and Child careNon-Invasive CardiologyLaparoscopic SurgeryOrthopaedicsENT, OphthalmologyUrology and NephrologyFull range diagnosticsPHP, OPD and Dentistry
PATPARGANJ(May 2005)(East Delhi)
146 inpatient beds3 OTMother and Child careOrthopaedicsGeneral SurgeryCritical care incl. DialysisNon-invasive Cardiology (incl. Cardiac Catheterization Lab)ENT, OphthalmologyOther allied specialties
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SPECIALITY CENTRES – PANCHSHEEL [South Delhi]
Current Facilities
OPTHALMOLOGY AND DENTAL CARE(November 2005)
Lasik, OPD and DiagnosticsDental – 3 chambersSupport Services and Offices
SPECIALIST CONSULTS AND HIGH-END DIAGNOSTICS (August 2006)
GP and Specialist ConsultsFull Diagnostics (including MRI)Neurology (EEG and EMG)Preventive Health and Chronic CarePhysiotherapyMinor Procedures and Emergencies
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n 108 Inpatient beds with 2 OTsn Tower Specialties Include:
Ophthalmology (Anterior and Posterior)Woman and Child (including Infertility)OrthopaedicsNephrology and UrologyPlastic and Reconstructive SurgeriesGeneral and Minimally Invasive surgeries
New Facility
MAX HOSPITAL – GURGAON [Suburb]
Launched in July 2007
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n Issues Rs. 50 Crore equity at Rs. 55 per Share of Max Healthcare
n Another Rs. 250 Crore raised as Optionally Partially Convertible
Cumulative and Redeemable Preference Shares
n The proposed expansion will add 450 beds to the Company’s
existing 770 bed capacity. It will include adding 270 beds to the
Patparganj hospital; a new 100-bed secondary hospital in
Dehradun; and a new 85-bed tertiary hospital focused on
Obstetrics, Gynaecology and Paediatrics at Saket
Max Healthcare raises Rs. 300 Crore from IFC, Washington
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Second Phase of Expansion
n Around 270 inpatient beds with 6 OTs and 1 Cathlab – Launch expected by December 2008
n Tower specialties to include:OncologyIVFOrthopaedics and Joint ReplacementNeurosciencesCardiac CareCritical Care
Tertiary CareMax Balaji Hospital – Patparganj
Max Hospital – Saket South Block
n Around 85 inpatient beds with 2 OTs –Launch expected by June 2009
n Around 100 inpatient beds – Launch expected by December 2008
n Emergency and Trauma care n Non–invasive Cardiologyn Joint Replacement and Orthopaedicsn Minimally Invasive Surgeriesn All support Specialities
National Capital Region Outside National Capital Region
Tertiary Care
High-end Secondary CareMax Hospital – Dehradun
9 Centres in and around Delhi expected by 2009 with a capacity of around 1200 beds
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Strengths and Growth Strategy
Strengths…
Growth Strategy…
n Comprehensive, integrated and world-class healthcare services with state-of-the-artinfrastructure and facilities
n Seamless delivery of services at every level of care
n Established brand name throughout India with a network of specialist doctors
n Network of hospitals with a geographical spread that covers the entire NationalCapital Region
n Improve outpatient volumes through increased focus on health awareness andregular health screenings in addition to expanding the referral doctor network
n Grow with a flexible expansion program – utilizing existing experience in building,operating, servicing and acquiring hospitals to continue a high rate of growth
n Deliver service focused, world-class healthcare by creating institutions committed tothe highest standards of medical and service excellence
n Joint Venture between Max India and New York Life International [ NYL ]
n NYL, one of Fortune 100 companies provides insurance domain expertise
n NYL is one of the oldest mutual life insurance company in the US with over $200billion in assets under management
n Max India and NYL jointly drive the growth strategy
n Max provides Indian industry perspective and manages the regulatory environment
n US$ 181 Mn already infused
Max New York Life Insurance [ MNYL]
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ExcellenceHonestyKnowledge
MNYL road map to becoming India’s most admired Life Insurance Company
Key Public Messages
A trusted life insurance specialistCustomer centricFinancially responsible and strongA great place to workAn admired member of the community
VISION Become the most admired Life Insurance Company in India
MISSION
GOALS1 Billion $ in Premiums in 10th yearIRR–20% plus; Dominate MDRT in India; Profitable by 2008
KEY
OBJECTIVES
STRATEGIES
WHAT – Comprehensive suite of products, competitive pricing, extensive distribution, persistency, customer service excellence, profitable portfolios
HOW – Talented People, Professional & Productive Agents, Performance Metrics, Leverage Technology, Teamwork, Customer Centric, Innovative Distribution and Marketing
INITIATIVESWhat-When-Who-How-Cost linkage plans at Departmental and Individual levels
Customer comes firstInternational quality standardsDo it right the first timeFact based decisionsBias for result oriented actionFinancial strength & disciplineDirect and open communicationRespect Max & NYLI values & parentageFun at work
InputOutputExternalInternalAbsoluteRatios
GMPR RatingsTEC/TTR – TemplatesPrimary, Shared and ContributoryBalanced scorecardCore, Functional and Leadership Competencies
Part of top quartile new Life Insurance CompaniesNational PlayerBrand of FIRST choiceEmployer of ChoicePrincipal of Choice for Agents
Key DifferentiatorsFinancial Strength & SecurityQuality of agentsFlexible ProductsService ExcellenceFair Terms of Business
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Mr. Analjit Singh Chairman
Mr. B Anantharaman Joint Managing Director, Max India Limited
Mr. N. C. Singhal
Mr. Rajesh Khanna Warburg Pincus
Mr. Joseph Gilmour
Mr. Ted Mathas
Mr. Anuroop Tony Singh
Mr. Ravi Akhoury
Mr. Gary R. Bennett Chief Executive Officer and Managing Director
Mr. Sunil Sharma Executive Director and Chief Operating Officer
MNYL – Board of Directors
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Indian Life Insurance Industry An Opportunity
Strong Growth to be driven by…
n Low Penetration Level
n Increasing Per Capita Income
n Increasing Awareness
n Better Distribution
n Availability of Multiple Products
n Increased Life Expectancy
Strong GDP growth to further expand the industry potential
Life Insurance Premium as % of GDP
Rus
sia
Bra
zil
Chi
na
Indi
a
Can
ada
Ger
man
y US
Japa
n UK
0.11.3 1.8
2.5 3.1 3.14.1
8.38.9
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Strengths and Growth Strategy
Strengths
Strategy
n One of India's leading private providers of life insurance with a well recognized brand name
n Strong and extensive distribution channels with 172 field offices and around 28,000 exclusivesales agents
n Partnership with 17 banks, current access covers 350+ branches across 40+ locations
n Highly productive agency led sales force
n Superior and innovative customer support network which enables us to provide superior andinnovative services to the customers
n Continue to focus on protection oriented, long tenor life insurance products and enhanceproduct offerings
n Continue to penetrate into areas where there is little or no distribution of life insurance products
n Build a top group of well trained, efficient and highly motivated life insurance agents
n Develop large, alternate distribution channels to maximize distribution strength
n Seek and join a large bancassurance partner with a pan India presence
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Protection Oriented, Longer Tenor Life Insurance
36
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36
1DEFERRED ANNUITY
18MONEY BACK
35UNIT LINKED
4TERM
24WHOLE LIFE
PROPORTION OF POLICIES (%, by
number)PRODUCT TYPE
Tenure (Years)
Age of Insured(Years)
25 34
MNYL Average MNYL Average
16
19
40
As on Jun 30, 2007
37
3522
12
42
ENDOWMENT 18 25
30
Established Ourselves amongst the Leading Agency Sales Force
Source: IRDA Journal, media reports and company’s internal estimates
New Business Apr – Jun 2007
(Agency) (US$ Mn)Agents Premium per Agent * ($) Cases per Agent *
122 234,000 174 0.45
105 156,000 225 0.80
41 65,000 210 0.39
30 30,000 335 0.94
18 24,000 249 0.47
15 22,500 222 0.41
14 35,000 132 0.49
13 14,000 304 0.55
9 10,000 296 0.43
Adjusted Single premium
* In terms of highest new business premium (Agency)
47 24,709 634 1.35Rank 3 Rank 1Rank 1
27 25,000 360 0.59
22 22,000 335 0.79
US$ 1 = INR 40.50
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Company Individual New Business Premium (Apr'07-Jun'07)
Individual Policies (‘000)(Apr'07-Jun'07)
ICICI Prudential 200 451Bajaj Allianz 162 537HDFC Standard Life 74 127Max New York Life 61 163
Aviva38 106
Tata AIG
36 66Reliance Life
31 103All Others 80 167
Total Private Life Insurers 778 1,892
MS of Private Players (%) 40 23
Market Position – Q1’07-08Insurance Sales (US $ Mn)
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Source: Insurance Regulatory & Development Authority, Adjusted to include only 10% of Single PremiumAll Others include: Kotak Life, ING Vysya, Metlife, Shriram Life, Sahara, Bharti AXA, 1 US$ = Rupees 40.50
60 99SBI Life
36 73Birla Sunlife
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MNYL Footprint
Geographic Coverage expands to 172 offices across 120 locations
Hyderabad
Bangalore
Ahmedabad
Mumbai
Chennai
Kolkata
Jaipur
Surat
Noida
Gurgaon
Rajkot
Jodhpur
Coimbatore
Udaipur
Aurangabad
Baroda
Cochin
Trivandrum
Thane
IndoreNagpur
ChandigarhPunjab
Visakhapatnam
Wide Reach EstablishedFaridabad
Mangalore
Lucknow
Pune
Nasik
Vijaywada
Bhopal
Bhubaneswar
Meerut
Jamshedpur
HO
Patna
Dehradun
RanchiAsansol
Raipur
Siliguri
Guwhati
KarnalKanpur
Rajahmundry
Madurai
Panaji
BhavnagarVapi
Kohlapur
Gwalior
Varanasi
Dehradun
Delhi
Jalgaon
Solapur
Kota
Mehsana
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Max New York Life Insurance
*
* Conservation Ratio = Renewal Premium for the current period/(First Year+Renewal Premium for the previous period)
Key Business Drivers UnitJun-07 Jun-06 Mar-07 Mar-06
a) Sales Value (Annualized first year premium) US$ Mn 76 43 77% 240 132 82%
b) Average case size US$ 539 473 14% 539 407 32%
c) Case rate per agent per month No. 1.44 1.75 -18% 1.63 1.88 -13%
d) Number of agents No. 27,727 16,922 64% 25,048 15,285 64%
Neeman Medical International Contract Research Organization (CRO)
Business Overview Performance Summary
Industry Prospects
Growth Strategy
n Service offerings include…Project ManagementSite ManagementData Management, includes Bio-Statisticsand Report WritingMonitoring ServicesClinical Trial Material Supply ChainManagement Services
n Concludes a two-way strategic alliance foroutsourcing clinical trials with a mid-sized CROin the US
n India set to emerge as key destination forclinical trials
n Many players already activen Industry expected to grow at steady pacen Cost arbitrage and huge talent pool to be India’s
key strengthn Favorable Patent Regulations to catalyze
exponential growth…and improving
n Neeman becomes a first full-fledged CRO tosecure ISO 9001:2000 certification across allservice offerings
n Current Order Book of US$ 4.0 Mn against US$2.3 Mn as of 31st Mar’07
n Neeman strengthens its business developmentefforts in the US
Increases resources in the BD teamConcludes strategic alliance for outsourcingits BD efforts
n Database of 600 GCP/ICH Principal Investigators
n Position India as a destination for clinical trials
n Target medium and small-sized biotech andpharma companies for clinical trials
n Identify mid-sized CROs for exclusive strategicalliances in US and Europe
