MANAGEMENT DISCUSSION AND ANALYSIS

Mr. Sahil Vachani

Managing Director & CEO

Mr. Ashish Singla

Vice President – Investments – Max I. Limited

Mr. Arjunjit Singh

Chief Operating Officer - Max Estates Ltd.

Mr. Gopalakrishnan Ramachandran

Head – Legal & Company Secretary

Mr. Kishansingh Ramsinghaney

Senior Advisor – Projects, Max Estates Ltd.

Mr. Nitin Kumar Kansal

Chief Financial Officer

Mr. Rohit Rajput

Head – Human Capital & Business Strategy

Managing Director & CEO Mr. Sahil Vachani with Hon’ble Minister Sh. Manpreet Singh Badal at the inauguration of MSFL’s Line 5

Managing Director & CEO Mr. Sahil Vachani with Hon’ble Minister Sh. Manpreet Singh Badal at the inauguration of MSFL’s Line 5

Max Ventures & Industries Limited (‘MaxVIL’ or ‘the Company’) is part of the US$ 3 billion Max Group, and is one of the three listed entities in the Group. MaxVIL operates primarily in the areas of manufacturing and real estate. In addition to these, the Company also serves as the Group’s entrepreneurial arm to explore the ‘wider world of business’.

MaxVIL manages investments in four key subsidiaries:

  1. The first, Max Speciality Films Limited (MSFL), is an innovation leader in the Speciality Packagin Films business.

  2. Max Estates Limited (MEL), the real estate arm of the Max Group, was incorporated in 2016 with the vision to bring the Group’s values of Sevabhav, Excellence and Credibility to the Indian real estate sector.

  3. Max I. Limited, a fully owned special purpose vehicle, facilitates Intellectual & Financial Capital to promising and proven early-stage organizations across identified sunrise sectors.

  4. Max Learning Limited is focused on the education sector.

The latter three subsidiaries are wholly-owned subsidiaries of MaxVIL, while Max Speciality Films Limited is a 51:49 partnership with Japan-based Toppan Printing Co. Ltd. The Company has also a step down wholly owned subsidiary Wise Zone Builders Private Limited under Max Estates Limited.

In FY2018, the Company reported Consolidated Revenues of ₹ 75,031.49 Lakhs, and a Profit after tax of ₹ 335.56 Lakhs. For the financials of MSFL and MEL, please refer to their respective sections in Management Discussion & Analysis.

Corporate Developments

The Company announced the launch of a rights issue of ₹ 449.89 Cr. with rights for existing shareholders, leading to the issuance of 7,37,53,787 new equity shares with face value of ₹ 10 each. As part of the issue, the shareholders of the Company were entitled to subscribe for the new shares with pre-emptive rights, whereby 66 fully paid-up equity shares entitled the shareholders to subscription for 67 Rights Equity Shares. The issue price was ₹ 61 per share. The record date for the purpose of determining eligible shareholders for the rights issue was 22nd June 2018. The issue opened on July 10, 2018 and closed on July 31, 2018.

The capital raised through the rights issue will be deployed in the real estate construction and development activities being carried out by the subsidiary of the Company Max Estates Limited for further investment in Wise Zone Builders Private Limited, a step down subsidiary of the Company towards prepayment/ repayment of loan availed from IDFC Bank for payment of transfer of rights towards Max Towers as well as undertake purchase of a portion of land and an interest in property at Max House, Okhla. MEL intends to strengthen its focus on the Grade A office space segment. Its flagship project, Max Towers, a prime commercial tower of ~0.6 million sq. ft. located on the Delhi-Noida Direct flyway, will be ready in 2018. Meanwhile, the redevelopment of Max House in Okhla, New Delhi is set to commence in FY2019.

Employees

As of March 31, 2018, the Company had 10 employees on its rolls.

Outlook

In addition to the successful and timely execution of its ongoing Grade-A Commercial project in Delhi/NCR, Max Estates will also explore further opportunities in commercial real estate. Max Estates will look for opportunities to innovate the operations of commercial real estate across India.

The Company’s vertical ‘Pulse’ will focus on improving operations of CRE through its 3 pillars –

  1. Design - To improve occupants’ experience and space utilization of the built environment.

  2. Technology - Creating ‘smart offices’ to integrate next generation technologies such as A1, Analytics & Machine learning to reduce cost of operations of commercial Real Estate.

  3. Community - To help companies drive their employees’ engagement by creating communities around employees’ interests in arts, sports and learning.

Max Speciality Films Limited recently launched its fifth BOPP films manufacturing line (Line 5), significantly increasing its capacity from 46.35 KTPA to 80.85 KTPA. MSFL’s Line 5 is designed to meet trends for recyclability, ultra high barriers and print receptivity. The line will be able to manufacture thicker films with advanced properties making it environmentfriendly since it is conducive to recycling and reducing the usage of plastic per pack. Armed with a significantly augmented production capacity and Toppan’s expansive global sales network and cuttingedge technological capabilities, MSFL is ready for a new phase of long-term growth in new and existing markets. Line 5 will also multiply the company’s equity in BOPP films to significantly improve its global penetration and achieve economies of scale.

Max I. sees an opportunity to be a strategic investor in two sun-rise sectors

  1. Real Estate as a Service – This includes capital light model of Real Estate focused on providing access over ownership and the emerging shared and rental economy.

  2. Real Estate Technology – This includes companies that are at the intersection of Real Estate and Technology that disrupt the way we design, construct and transform the built environment.

Max Towers is expected to launch in FY2019

Real Estate has been a late adopter of technology. Given its large footprints as an industry – it presents a large potential opportunity. Max I. is also uniquely positioned to adopt some of these technologies in its assets.

Besides the focus on these areas, the Company will continue to scout for opportunities across sectors and geographies.