To the Members of Max India Limited
Report on the Audit of the Standalone Ind AS Financial Statements
Opinion
We have audited the accompanying standalone Ind AS financial statements of Max India
Limited ("the Company"), which comprise the Balance sheet as at March 31, 2019,
the Statement of Profit and Loss, including the statement of Other Comprehensive Income,
the Cash Flow Statement and the Sstatement of Changes in Equity for the year then ended,
and notes to the financial statements, including a summary of significant accounting
policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid standalone Ind AS financial statements give the information
required by the Companies Act, 2013 ("the Act") in the manner so required and
give a true and fair view in conformity with the accounting principles generally accepted
in India, of the state of affairs of the Company as at March 31, 2019, its loss including
other comprehensive income its cash flows and the changes in equity for the year ended on
that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial statements in accordance with
the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our
responsibilities under those Standards are further described in the Auditors
Responsibilities for the Audit of the Standalone Ind AS Financial Statements section of
our report. We are independent of the Company in accordance with the Code of Ethics
issued by the Institute of Chartered Accountants of India together with the ethical
requirements that are relevant to our audit of the financial statements under the
provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the Code of Ethics. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion on the standalone Ind AS financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the standalone Ind AS financial statements for the financial
year ended March 31, 2019. These matters were addressed in the context of our audit of the
standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters. For each matter below, our
description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be
communicated in our report. We have fulfilled the responsibilities described in the
Auditors responsibilities for the audit of the standalone Ind AS financial statements
section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks
of material misstatement of the standalone Ind AS financial statements. The results of our
audit procedures, including the procedures performed to address the matters below, provide
the basis for our audit opinion on the accompanying standalone Ind AS financial
statements.
| Key audit matters |
How our audit addressed the key audit matter |
| Impairment of investments in subsidiary companies (as described in note 2(e) of
the standalone Ind AS financial statements) |
|
| During the current year, impairment indicators were identified in Companys
investments in certain subsidiaries namely Max Bupa Health Insurance Limited ("Max
Bupa") and Antara Senior Living Limited ("ASLL"). |
Our audit procedures include the following: |
| As a result, an impairment assessment was required to be performed by comparing the
carrying value of these subsidiaries to their recoverable amount to determine whether an
impairment was required to be recognized. The recoverable amount was determined in
accordance with IND AS 36 Impairment of Assets to be the higher of the fair value less
cost of disposal, represented by the fair value of these subsidiaries, and the value in
use, determined by discounting future cash flows. |
• we involved valuation specialists, to assess the Companys valuation
methodology applied in determining the recoverable amounts. |
|
• We involved valuation specialists to assess the assumptions, drivers of the
cash flow forecasts |
| There are uncertainties involved in estimating the recoverable amount of investment in
subsidiaries, which principally arose from the inputs in both forecasting and discounting
future cash flows new senior living projects launched by ASLL. To determine the
recoverable amount of the investment in subsidiary companies was one of the key judgement
area in preparing the standalone financial statements due to a combination of the
significance of the investments in the subsidiaries and the inherent uncertainty in the
assumptions supporting the recoverable amount of these investments. Accordingly, the
impairment of investments in subsidiary companies has been identified to be a key audit
matter in our audit of the standalone financial statements. |
• In making this evaluation, we also assessed the objectivity and independence of
Companys specialists involved in the process. |
|
• We have read the binding sale agreement entered between the Company and True
North Fund VI LLP for the proposed sale of Companys stake in Max Bupa. |
We have determined that there are no other key audit matters to communicate in our
report.
Information Other than the Financial Statements and Auditors Report Thereon
The Companys Board of Directors is responsible for the other information. The other
information comprises the information included in the director report, but does not
include the standalone Ind AS financial statements and our auditors report thereon.
Our opinion on the financial statements does not cover the other information and we
will not express any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind AS financial statements, our
responsibility is to read the other information and, in doing so, consider whether such
other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If, based
on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of Management for the Standalone Ind AS Financial Statements
The Companys Board of Directors is responsible for the matters stated in section
134(5) of the Act with respect to the preparation of these standalone Ind AS financial
statements that give a true and fair view of the financial position, financial performance
including other comprehensive income, cash flows and changes in equity of the Company in
accordance with the accounting principles generally accepted in India, including the
Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the
Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also
includes maintenance of adequate accounting records in accordance with the provisions of
the Act for safeguarding of the assets of the Company and for preventing and detecting
frauds and other irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and prudent; and the design,
implementation and maintenance of adequate internal financial controls, that were
operating effectively for ensuring the accuracy and completeness of the accounting
records, relevant to the preparation and presentation of the standalone Ind AS financial
statements that give a true and fair view and are free from material misstatement, whether
due to fraud or error.
In preparing the standalone Ind AS financial statements, management is responsible for
assessing the Companys ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Companys financial
reporting process.
Auditors Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind AS
financial statements as a whole are free from material misstatement, whether due to fraud
or error, and to issue an auditors report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these standalone Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the standalone Ind AS
financial statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
• Obtain an understanding of internal control relevant to the audit in order to
design audit procedures that are appropriate in the circumstances. Under section 143(3)(i)
of the Act, we are also responsible for expressing our opinion on whether the Company has
adequate internal financial controls system in place and the operating effectiveness of
such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of managements use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditors
report. However, future events or conditions may cause the Company to cease to continue as
a going concern.
• Evaluate the overall presentation, structure and content of the standalone Ind
AS financial statements, including the disclosures, and whether the standalone Ind AS
financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the standalone Ind AS financial
statements for the financial year ended March 31, 2019 and are therefore the key audit
matters. We describe these matters in our auditors report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2016 ("the Order"),
issued by the Central Government of India in terms of sub-section (11) of section 143 of
the Act, we give in the "Annexure 1" a statement on the matters specified in
paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations 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 it appears from our examination of those books;
(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of
Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity
dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with
the Accounting Standards specified under Section 133 of the Act, read with Companies
(Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on March
31, 2019 taken on record by the Board of Directors, none of the directors is disqualified
as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the
Act;
(f) With respect to the adequacy of the internal financial controls over financial
reporting of the Company with reference to these standalone Ind AS financial statements
and the operating effectiveness of such controls, refer to our separate Report in
"Annexure 2" to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2019 has
been paid/ provided by the Company to its directors in accordance with the provisions of
section 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in
our opinion and to the best of our information and according to the explanations given to
us:
i. The Company has disclosed the impact of pending litigations on its financial
position in its standalone Ind AS financial statements - Refer Note 28(c) to the
standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to
the Investor Education and Protection Fund by the Company
For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Sanjay Vij
Partner
Membership No. 095169
Place of Signature: : Gurugram
Date: May 29, 2019
Annexure referred to in paragraph 1 under the heading "Report on Other Legal and
Regulatory Requirements" of our report of even date.
Re: Max India Limited (the Company)
(i) (a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of property plant and equipment.
(b) Property plant and equipment have been physically verified by the management during
the year and no material discrepancies were identified on such verification.
(c) According to the information and explanations given by the management, there are no
immovable properties, included in property, plant and equipment of the Company and
accordingly, the requirements under paragraph 3(i)(c) of the Order are not applicable to
the Company and hence not commented upon.
(ii) The Companys business does not involve inventories and, accordingly, the
requirements under paragraph 4(ii) of the Order are not applicable to the Company and
hence not been commented upon.
(iii) 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 covered in
the register maintained under section 189 of the Companies Act, 2013. Accordingly, the
provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company
and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us,
provisions of section 185 and 186 of the Companies Act 2013 in respect of loans and
advances given, investments made and, guarantees, and securities given have been complied
with by the Company.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76
of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended).
Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) To the best of our knowledge and as explained, the Central Government has not
specified the maintenance of cost records under Section 148(1) of the Companies Act, 2013,
for the products/services of the Company.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed
statutory dues including provident fund, income-tax, sales-tax, service tax, goods and
services act, value added tax, and other material statutory dues applicable to it. The
provisions relating to duty of excise, employees state insurance, duty of custom, cess
are not applicable to the Company.
(b) According to the information and explanations given to us, no undisputed amounts
payable in respect of provident fund, income-tax, service tax, goods and services tax,
value added tax, and other material statutory dues were outstanding, at the year end, for
a period of more than six months from the date they became payable. The provisions
relating to duty of excise, employees state insurance, duty of custom, cess are not
applicable to the Company.
(c) According to the information and explanations given to us, there are no dues of
income tax, value added taxes, service tax, goods and services tax which have not been
deposited on account of any dispute. The provisions related to employees state insurance,
duty of excise, duty of customs and are not applicable to the Company.
viii) The Company did not have any outstanding dues in respect of debenture holders,
financial institutions, banks, or Government during the year.
(ix) According to information and explanation given by the management, the Company has
not raised any money by way of initial public offer/further public offer/debt instruments
and term loans, hence reporting under clause (ix) is not applicable to the Company and
hence not commented upon.
(x) Based upon the audit procedures performed for the purpose of reporting the true and
fair view of the financial statements and according to the information and explanations
given by the management, we report that no fraud by the Company or on the Company by the
officers and employees of the Company has been noticed or reported during the year.
(xi) Based on our audit procedures performed for the purpose of reporting the true and
fair view of the financial statements and according to the information and explanations
given by the management, we report that the managerial remuneration has been paid /
provided in accordance with the requisite approvals mandated by the provisions of section
197 read with Schedule V to the Companies Act, 2013.
(xii) In our opinion, the Company is not a nidhi Company. Therefore, the provisions of
clause 3(xii) of the order are not applicable to the Company and hence not commented upon.
(xiii) Based on our audit procedures performed for the purpose of reporting the true
and fair view of the financial statements and according to the information and
explanations given by the management, transactions with the related parties are in
compliance with section 177 and 188 of Companies Act, 2013 where applicable and the
details have been disclosed in the notes to the financial statements, as required by the
applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall
examination of the balance sheet, the Company has not made any preferential allotment or
private placement of shares or fully or partly convertible debentures during the year
under review and hence, reporting requirements under clause 3(xiv) are not applicable to
the company and, not commented upon.
(xv) Based on our audit procedures performed for the purpose of reporting the true and
fair view of the financial statements and according to the information and explanations
given by the management, the Company has not entered into any non-cash transactions with
directors or persons connected with him.
(xvi) According to the information and explanations given to us, the provisions of
section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
For S.R. Batliboi & CO. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Sanjay Vij
Partner
Membership Number: 095169
Place of Signature : Gurugram
Date: May 29, 2019
ANNEXURE TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL
STATEMENTS OF MAX INDIA LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Max India
Limited ("the Company") as of March 31, 2019 in conjunction with our audit of
the standalone financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys Management is responsible for establishing and maintaining internal
financial controls [based on the internal control over financial reporting criteria
established by the Company considering the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting
issued by the Institute of Chartered Accountants of India. These responsibilities include
the design, implementation and maintenance of adequate internal financial controls that
were operating effectively for ensuring the orderly and efficient conduct of its business,
including adherence to the Companys policies, the safeguarding of its assets, the
prevention and detection of frauds and errors, the accuracy and completeness of the
accounting records, and the timely preparation of reliable financial information, as
required under the Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting with reference to these standalone financial statements
based on our audit. We conducted our audit in accordance with the Guidance Note on Audit
of Internal Financial Controls Over Financial Reporting (the "Guidance Note")
and the Standards on Auditing as specified under section 143(10) of the Companies Act,
2013, to the extent applicable to an audit of internal financial controls and, both issued
by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note
require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether adequate internal financial controls over financial
reporting with reference to these standalone financial statements was established and
maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls over financial reporting with reference to these
standalone financial statements and their operating effectiveness. Our audit of internal
financial controls over financial reporting included obtaining an understanding of
internal financial controls over financial reporting with reference to these standalone
financial statements, assessing the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal control based on the
assessed risk. The procedures selected depend on the auditors judgement, including the
assessment of the risks of material misstatement of the financial statements, whether due
to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the internal financial controls over financial
reporting with reference to these standalone financial statements.
Meaning of Internal Financial Controls Over Financial Reporting With Reference to these
Financial Statements
A companys internal financial control over financial reporting with reference to these
standalone financial statements is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting
principles. A companys internal financial control over financial reporting with reference
to these standalone financial statements includes those policies and procedures that (1)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with
authorisations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorised acquisition, use, or
disposition of the companys assets that could have a material effect on the financial
statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting With
Reference to these Standalone Financial Statements
Because of the inherent limitations of internal financial controls over financial
reporting with reference to these standalone financial statements, including the
possibility of collusion or improper management override of controls, material
misstatements due to error or fraud may occur and not be detected. Also, projections of
any evaluation of the internal financial controls over financial reporting with reference
to these standalone financial statements to future periods are subject to the risk that
the internal financial control over financial reporting with reference to these standalone
financial statements may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, adequate internal financial
controls over financial reporting with reference to these standalone financial statements
and such internal financial controls over financial reporting with reference to these
standalone financial statements were operating effectively as at March 31, 2019, based on
the internal control over financial reporting criteria established by the Company
considering the essential components of internal control stated in the Guidance Note on
Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of
Chartered Accountants of India.
For S.R. Batliboi & CO. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Sanjay Vij
Partner
Membership No. 095169
Place of Signature: Gurugram
Date: May 29, 2019
+91-9892691696
