max financial services ltd share price Directors report


Dear Members,

Your directors have the pleasure of presenting the 35th (Thirty-fifth) Boards Report of Max Financial Services Limited ("MFSL" or "the Company") along with the audited Financial Statements for the financial year ended March 31, 2023.

STANDALONE RESULTS

The highlights of the standalone financial results of your Company along with the previous years figures are as under:

( in crore)

Year ended 31.03.2023

Year ended 31.03.2022

Dividend income

Nil

144.46

Treasury Income

30.24

34.18

Sale of services

20.32

20.64

Rental Income

0.56

0.42

Gain on sale of investment property

6.69

-

Revenue from operations

57.81

199.70

Other income

0.42

2.36

Total income

58.23

202.06

Expenses
Employee benefits expenses

9.22

21.62

Legal and professional expenses

15.63

13.85

Other expenses

10.92

15.89

Depreciation and amortization expense

3.10

3.48

Finance costs

0.11

0.14

Total expenses

38.98

54.98

Profit before tax

19.25

147.08

Tax expense

5.37

44.46

Profit after tax for the year

13.88

102.62

Other comprehensive income for the year

(0.07)

0.36

Total comprehensive income

13.81

102.98

 

Your Company is primarily engaged in the business of making and holding investments in its subsidiary, Max Life Insurance Company Limited ("Max Life") and providing management consultancy services to group companies and accordingly, in terms of extant RBI guidelines, your Company is an Unregistered Core Investment Company (unregistered CIC) as it does not meet the criteria stipulated by RBI for registration as a Systematically important CIC. Further, there is no change in the nature of Business during the FY 2022-23.

The net worth of your Company on a standalone basis grew marginally by 0.2% to 6,763 crore as of March 31, 2023 as against 6750 crore as of March 31, 2022. The increase in the net worth was mainly on account of profits.

CONSOLIDATED RESULTS

In accordance with the Companies Act, 2013 ("the Act") and applicable accounting standards, the audited consolidated financial statements are enclosed as part of this Annual Report.

In FY 2022-23, MFSL reported consolidated revenues of 31,431 crore, which grew by 1%, due to lower investment income. Excluding Investment Income, consolidated revenues grew 13%. The Gross Premiums at 25,432 crore, grew by 13% compared to the previous year. The Company reported a consolidated profit after Tax of 452 crore, which grew 42% compared to the previous year.

Max Life AUM as of March 31, 2023, stood at 1,22,857 crore, a rise of 14% over the previous year, owing to the increased scale of business. The Market Consistent Embedded value of Max Life as of March 31, 2023, was 16,263 crore, with an Operating Return on Embedded Value (RoEV) of 22.1% and the value of a new business at 1,949 crore has grown 28%, achieved the highest ever VNB margins of 31.2%, 380 bps improvement year on year.

The highlights of the consolidated financial results of your Company, and its subsidiaries, viz., Max Life Insurance Company limited, Max life pension Fund Management limited, and Max Financial Employees Welfare trust are as under:

( in crore)

Year ended 31.03.2023

Year ended 31.03.2022

Policyholders Income from Life Insurance operations

31,050.62

30,849.16

Interest Income

302.12

226.52

Net gain on fair value changes

39.34

95.95

Dividend Income

3.10

2.69

Rental Income

6.46

2.25

Gain on sale of investment property

6.69

0.00

Sale of services

4.34

4.64

Revenue from operations

31,412.67

31,181.21

Other income

18.39

6.37

Total income

31,431.06

31,187.58

Expenses
Policyholders Expenses of Life Insurance operations

30,788.75

30,687.55

Employee benefits expenses

29.23

36.77

Legal and professional expenses

15.78

13.85

Other expenses

28.60

32.75

Impairment on financial instruments

(0.59)

(1.73)

Finance costs

37.46

24.74

Depreciation and amortization expense

4.63

5.00

Total expenses

30,903.86

30,798.93

Profit before tax

527.20

388.65

Tax expense

75.31

70.25

Profit after tax for the year (including noncontrolling interests)

451.89

318.40

Other comprehensive income for the year

(7.97)

(11.91)

Total comprehensive income (after tax)

443.92

306.49

Total comprehensive income attributable to
Owners of the company

372.12

243.66

Non-controlling interests

71.80

62.83

 

MATERIAL CHANGES AFFECTING FINANCIAL POSITION

There are no material changes and commitments affecting the financial position of the Company, which occurred between the end of the financial year of the Company i.e., March 31, 2023, and the date of the Directors report i.e., May 12, 2023.

SUBSIDIARIES, ASSOCIATES & JOINT VENTURE COMPANIES

As of March 31, 2023, your Company had two operating subsidiaries viz., Max life Insurance Company limited and Max life pension Fund Management Limited. Further, the Company has also incorporated one special purpose entity, Max Financial employees Welfare trust in April 2022. there were no other associate or joint venture companies.

The report containing salient features of the financial statement of Max life, included in the consolidated financial statements, presented in Form AOC-1 is attached to this report as Annexure 1, as per Rule 5 of the Companies (Accounts) Rules, 2014.

Further, a detailed update on the business achievements of Max Life, is furnished as part of the Management Discussion and Analysis section which forms part of this Annual Report.

As provided in Section 136 of the Act, the financial statements and other documents of the subsidiaries of the Company are not attached to the financial statements of the Company. The complete set of financial statements, including financial statements of the subsidiaries of the Company is available on the website of the Company at www.maxfinancialservices.com. These documents will also be available for inspection during business hours at the registered office of the Company.

MATERIAL UNLISTED SUBSIDIARY

In terms of the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations), your Company has a policy for determining Material Subsidiary and the said policy is available on the Companys website at https://www. maxfinancialservices.com/corporate-policies

Your Company has one material subsidiary, viz., Max Life Insurance Company Limited.

DIVIDEND

Your Directors have not recommended any dividend for the financial year 2022-23.

The Board of Directors of your Company has approved a Dividend Distribution policy in line with Regulation 43A of SEBI Listing Regulations. the said policy is available on the website of the Company at https://www.maxfinancialservices.com/corporate-policies

TRANSFER TO RESERVES

The Company has not transferred any amount to reserve during the year under review.

SHARE CAPITAL

The Company did not issue any fresh issue of shares during the current year under review. the paid-up share capital of the Company as of March 31, 2023, stood at 69,02,29,542/-(Rupees Sixty-nine crore two lakhs twenty-nine thousand five hundred forty-two only) comprising 34,51,14,771 equity shares of 2/- each.

EMPLOYEE STOCK OPTION PLANS

Your Company has two employee stock option plans viz. Max employee Stock plan (the 2003 plan) and Max Financial Employees Stock Option Plan - 2022 (2022 Plan). the 2003 Plan provides for the grant of stock options aggregating not more than 5% of the number of issued equity shares of the Company to eligible employees and Directors of the Company.

Max Financial Employees Stock Option Plan - 2022 was approved by the Shareholders of the Company on May 9, 2022. this 2022 Plan does not contemplate the issue of any fresh shares. the Company established a separate trust, viz., Max Financial Employees Welfare trust (trust). the trust shall acquire shares of the Company in the secondary market, hold and transfer to option holders upon exercise of vested options. the Company granted 15,04,623 options on June 22, 2022, to the employees of Max Life, which would entitle the option-holders to acquire one equity share of 2/- each for cash from Max Financial Employees Welfare trust at an Exercise Price of 808.97 per option payable to ESOP trust and that the aforesaid options shall be vested in a graded manner. the 2003 & 2022 Plans are administered by the Nomination and Remuneration Committee constituted by the Board of Directors of the Company. Disclosures as required under SEBI (Share Based Employee Benefits) Regulations, 2014 are enclosed in this report as Annexure-2.

The 2003 Plan came into effect on October 1, 2003, and is valid for a period of 20 years up to September 30, 2023. the Board of Directors of the Company in its meeting held on May 12, 2023, decided not to extend the validity of the 2003 plan. there is no outstanding option in terms of the 2003 Plan. 2003 Plan shall automatically expire on September 30, 2023.

A certificate from the Secretarial Auditors confirming that the ESOP plans of the Company, viz., (i) the 2003 Plan and (ii) 2022 Plan of the Company have been implemented in accordance with the applicable SEBI Regulations shall be placed before the members at the ensuing Annual General Meeting.

directors and key managerial personnel

As of the date of this report, the Board of Directors of your Company comprises of 10 (ten) members with all being Non-Executive Directors of which 6 (Six) are Independent Directors. Mr. Analjit Singh (DIN: 00029641), Chairman of the Company is a NonExecutive, Non-Independent Promoter Director.

Further, in terms of Section 152 of the Act and the Articles of Association of the Company, Mr. Mitsuru Yasuda is liable to retire by rotation at the ensuing Annual General Meeting. Mr. Mitsuru Yasuda, being eligible, has offered himself for re-appointment at the ensuing Annual General Meeting.

Brief profiles of the directors are given in the Annual Report.

The Board met five times during the financial year 2022-23 as detailed below:

date

Board Strength

No. of directors present

April 6, 2022

11

11

May 10, 2022

11

11

August 1, 2022

10

9

october 19, 2022

11

9

January 31, 2023

10

9

 

The details regarding the number of meetings attended by each Director during the year under review have been furnished in the Corporate Governance Report attached as part of this Annual Report.

During the year under review, the following changes in the Board composition/Key Managerial personnel have taken place:

• Mrs. Naina Lal Kidwai resigned from the Board from the closure of business hours on May 31, 2022, as part of her planned transition and to fulfill her several other responsibilities and professional commitments.

• Mrs. Gauri padmanabhan was appointed as a woman Independent Director on August 25, 2022.

• Mr. Mohit talwar retired as the Managing Director of the Company w.e.f from the closure of business hours on January 14, 2023;

• Mr. Mandeep Mehta resigned as Chief Financial officer of the Company w.e.f. from the closure of business hours on April 30, 2022; and

• Mr. Amrit pal Singh was appointed as Chief Financial officer of the Company w.e.f. May 01, 2022.

As of the date of this Report, Mr. Amrit pal Singh, Chief Financial officer, and Mr. V. Krishnan, Company Secretary are the Key Managerial personnel of the Company.

At the Board meeting of the Company held on May 12, 2023, the Board considered and approved the following:

(i) Acceptance of resignation of Mr. V Krishnan as the Company Secretary of the Company on the close of business hours on June 30, 2023;

(ii) Appointment of Mr. piyush Soni as the Company Secretary of the Company effective July 1, 2023; and

(iii) Appointment of Mr. V Krishnan as the Manager of the Company in terms of the provisions of the Companies Act, 2013 read with applicable provisions of SEBI listing Regulations effective July 1, 2023 for a period of three years subject to the approval of the Shareholders of the Company.

FORFEITURE OF STOCK OPTIONS:

There are no outstanding options in terms of Max employee Stock plan-2003 as of date. All options that were granted and vested with the option-holders have all been exercised during the year ended March 31, 2022.

STATEMENT OF DECLARATION BY INDEPENDENT DIRECTORS:

In terms of Section 149(6) of the Act and Regulation 25 of SEBI listing Regulations, the following non-executive Directors are categorized as Independent Directors of the Company: Mr. Aman Mehta (Din: 00009364), Mr. Dinesh Kumar Mittal (Din: 00040000), Mr. Jai Arya (DIN: 08270093), Sir Richard Stagg (DIN: 07176980), Mr. K. Narasimha Murthy (DIN: 00023046) and Mrs. Gauri padmanabhan (DIN: 01550668).

the Company has received confirmation of independence from all the above-mentioned Independent Directors as per Section 149(7) of the Act and applicable SEBI listing Regulations confirming that they continue to meet the criteria of independence. Further, pursuant to Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, all Independent Directors of the Company have confirmed their registration with the Indian Institute of Corporate Affairs (IICA) database.

COMMITTEES OF THE BOARD OF DIRECTORS:

The Company has the following committees which have been established as a part of the best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes. A detailed note on the same is provided under the Corporate Governance Report forming part of this Annual Report.

1. Audit Committee:

the Audit Committee met five times during the financial year 2022-23, viz. on April 27, 2022, May 10, 2022, August 1, 2022, october 19, 2022, and January 31, 2023. As of the date of this report, the Committee comprises Mr. Dinesh Kumar Mittal (Chairman), Mr. Aman Mehta, Mr. Mitsuru Yasuda, and Mr. K Narasimha Murthy. All the recommendations by the Audit Committee were accepted by the Board.

2. Nomination and Remuneration Committee:

the nomination and Remuneration Committee met three times during the financial year 2022-23, viz. on April 6, 2022, May 10, 2022, and January 31, 2023. As of the date of this report, the Committee comprises Mr. Aman Mehta (Chairman), Mr. Analjit Singh, Mr. Dinesh Kumar Mittal, Mr. Hideaki Nomura Mr. Jai Arya and Sir Richard Stagg.

3. Stakeholders Relationship Committee:

the Committee met twice during the financial year 2022-23, viz. on May 10, 2022, and January 31, 2023. As of the date of this report, the Committee comprises of Mr. Sahil Vachani (Chairman), Mr. Dinesh Kumar Mittal, and Mr. Mitsuru Yasuda.

4. Risk Management Committee:

As of the date of this report, the Committee comprises Mr. Aman Mehta (Chairman), Mr. Dinesh Kumar Mittal, Mr. Jai Arya, and Mr. Mitsuru Yasuda. this Committee met twice during the year under review on April 27, 2022 and October 19, 2022.

5. Corporate Social Responsibility Committee:

the provision under section 135 of the Act, w.r.t. constitution of CSR Committee, is not applicable to the Company and that CSR functions for the Company are discharged directly by its Board of Directors as and when required.

6. Independent directors:

the Board of Directors includes six Independent Directors as of March 31, 2023, viz. Mr. Aman Mehta, Mr. Dinesh Kumar Mittal, Mr. Jai Arya, Sir Richard Stagg, Mr. K. Narasimha Murthy, and Mrs. Gauri Padmanabhan.

the Independent Directors had separate meetings on May 10, 2022, and May 12, 2023. the meetings were conducted to:

a) Review the performance of Non-Independent Directors and the Board as a whole;

b) Review the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors; and

c) Assess the quality, quantity, and timeliness of the flow of information between the Company management and the Board that is necessary for the Board to perform their duties effectively and reasonably.

PERFORMANCE EVALUATION OF THE BOARD

As per the requirements of the Act and SEBI Listing Regulations, a formal Annual Evaluation process has been carried out to evaluate the performance of the Board, the Committees of the Board, and the Individual Directors including the Chairperson.

the Board of Directors has evaluated the performance of Independent Directors during the year 2022-23 and opined that the integrity, expertise, and experience (including proficiency) of the Independent Directors are satisfactory.

the performance evaluation was carried out by obtaining feedback from all Directors through an

online survey mechanism through Diligent Boards, a secure electronic medium through which the Company interfaces with its Directors. The outcome of this performance evaluation was placed before the meetings of the Nomination and Remuneration Committee and Independent Directors and the Board meeting for the consideration of the members.

the review concluded by affirming that the Board as a whole as well as its Chairman, all of its members, individually, and the Committees of the Board continued to display a commitment to good governance by ensuring a constant improvement of processes and procedures and contributed their best in the overall growth of the organization.

HUMAN RESOURCES

Your Company is primarily engaged in growing and nurturing business investment as a holding company in the business of life insurance and providing management advisory services to group companies. the remuneration of employees is competitive with the market and rewards high performers across levels. the remuneration to Directors, Key Managerial personnel, and Senior Management is a balance between fixed, incentive pay, and a long-term equity program based on the performance objectives appropriate to the working of the Company and its goals and is reviewed periodically and approved by the nomination and Remuneration Committee of the Board.

Details pursuant to Section 197(12) of the Act, read with Rule 5(1) and Rule 5(2) of Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014 are attached to this report as Annexure 3A and Annexure 3B.

As of March 31, 2023, there were 11 (Eleven) employees on the rolls of the Company.

NOMINATION AND REMUNERATION POLICY

In adherence to the provisions of Sections 134(3(e) and 178(1) & (3) of the Act, the Board of Directors on the recommendation of the nomination and Remuneration Committee had approved a policy on Directors appointment and remuneration. the said policy includes terms of appointment, criteria for determining qualifications, performance evaluation, and other matters. A copy of the same is available on the website of the Company at https://www. maxfinancialservices.com/corporate-policies

CORPORATE SOCIAL RESPONSIBILITY ("CSR")

the Company is not required to constitute a CSR Committee under section 135 of the Act, and a copy of the duly adopted CSR policy is available on the website of the Company at https://www. maxfinancialservices.com/corporate-policies

the CSR policy comprises a Vision and Mission Statement, philosophy, and objectives. It also explains the governance structure along with clarity on roles and responsibilities.

In terms of Section 135 of the Act read with Companies (Corporate Social Responsibility policy) Rules, 2014, all Companies meeting the prescribed threshold criteria, i.e., a net worth of 500 crore or more or a turnover of 1,000 crore or more or net profits of 5 crore or more during the immediately preceding financial year are required to spend at least 2% of the average net profits of the Company for the immediately preceding three financial years.

As per rule 2(h) of the Companies (Corporate Social Responsibility policy) Rules, 2014, any dividend received from other companies in India, which are already covered and comply with the provisions of the CSR, shall not be included for the purposes of computation of net profits for a company.

Accordingly, dividend income received by MFSL from Max Life for FY 2021-22 is not included in computing the limits for CSR contribution to be made by the MFSL as Max Life already contributes to CSR. Based on the average net profits of the 3 preceding FYs, MFSL has incurred an average net loss in the last 3 years. MFSL is therefore not required to make any CSR contribution.

POLICY FOR PREVENTION OF SEXUAL HARASSMENT

Your Company has a requisite policy for the Prevention of Sexual Harassment, which is available on the website of the Company at https://www.maxfinancialservices.com/corporate-policies. The comprehensive policy ensures gender equality and the right to work with dignity for all employees (permanent, contractual, temporary, and trainees) of the Company. Your company has complied with provisions relating to the constitution of the Internal Complaints Committee under the Sexual Harassment of Women at Workplace (prevention, prohibition and Redressal) Act, 2013. No case was reported to the Committee during the year under review.

LOANS, GUARANTEES, OR INVESTMENTS IN SECURITIES

The details of loans given, and investments made by the company pursuant to the provisions of Section 186 of the Act are provided in note No. 29 to the standalone financial statements of the Company for FY 2022-23.

MANAGEMENT DISCUSSION & ANALYSIS

In terms of Regulation 34 of SEBI Listing Regulations, a review of the performance of the Company, including those of your Companys subsidiaries, viz., Max life and Max life pension Fund Management limited, is provided in the Management Discussion & Analysis section, which forms part of this Annual Report.

REPORT ON CORPORATE GOVERNANCE

the Company has complied with all the mandatory requirements of Corporate Governance specified by the Securities and exchange Board of India through part C of Schedule V of listing Regulations. As required by the said Clause, a separate report on Corporate Governance forms part of the Annual Report of the Company.

A certificate from the non-executive Director and Chief Financial officer on compliance with part B of Schedule II of SEBI listing Regulations forms part of the Corporate Governance Report as Annexure-2.

Further, a certificate from M/s Chandrasekaran Associates, practicing Company Secretaries regarding compliance with the conditions of Corporate Governance pursuant to part E of Schedule V of SEBI listing Regulations is Annexed to the Corporate Governance Report as Annexure-3.

Copies of various policies adopted by the Company are available on the website of the Company at https://www.maxfinancialservices.com/corporate- policies

STATUTORY AUDITORS AND AUDITORS REPORT

pursuant to Sections 139 & 142 of the Act, M/s Deloitte Haskins and Sells, LLp, Chartered Accountants (Firm Registration number: 117366W/W-100018), were appointed as the Statutory Auditors of the Company at the 32nd Annual General Meeting ("AGM") held on December 30, 2020, for a period of five years. They continue as the Statutory Auditors of the Company.

There are no audit qualifications, reservations, disclaimers or adverse remarks, or reporting of fraud in the Statutory Auditors Report given by M/s Deloitte Haskins and Sells, LLp, Statutory Auditors of the Company for the financial year 2022-23 annexed in this Annual Report.

M/s Deloitte Haskins & Sells LLp, after carrying out the audit for the financial year ended March 31, 2023, had resigned on May 12, 2023, to enable the Company to align its statutory auditors with the successor statutory auditors of Max Life, viz., M/s S. R. Batliboi and Co. LLp. The Board, after placing on record its appreciation for the contribution made by M/s Deloitte Haskins & Sells LLp over the last seven years accepted their resignation as statutory auditors in the meeting held on May 12, 2023.

Further, the Board took note of requisite declarations, consent letters and eligibility certificates received from M/s S.R. Batliboi and Co. LLp, the proposed Statutory Auditors. They have confirmed that their appointment as Auditors, if made, shall be in accordance with the conditions laid down in the Companies Act, 2013 and rules made thereunder, including the criteria provided

in Section 141 and Section 144 of the Companies Act, 2013 and SEBI Listing Regulations. Basis the above, the Board recommended the following for consideration of the shareholders:

(i) For the appointment of M/s S. R. Batliboi and Co. LLp as the statutory auditors of the Company to fill the casual vacancy caused by the resignation of existing statutory auditors till the next date of the ensuing annual general meeting through a postal ballot process; and

(ii) For the appointment of M/s S. R. Batliboi and Co. LLp as the statutory auditors for a five-year term from the date of the forthcoming Annual General Meeting to be held in 2023 till the conclusion of the 40th Annual General Meeting to be held in the year 2028 on such remuneration as may be mutually agreed between the statutory auditors and the Board of Directors of the Company, from time to time.

SECRETARIAL AUDITORS AND SECRETARIAL AUDIT REPORT

pursuant to Section 204 of the Act, your Company had appointed M/s Chandrasekaran Associates practicing Company Secretaries, New Delhi as its Secretarial Auditors to conduct the secretarial audit of the Company for FY 2022-23. The Company provided all assistance and facilities to the Secretarial Auditor for conducting their audit. the Report of Secretarial Auditor for FY 2022-23 is annexed to this report as Annexure 4.

there are no audit qualifications, reservations, disclaimers, or adverse remarks in the said Secretarial Audit Report.

Your Company complies with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and notified by the Ministry of Corporate Affairs.

Further, Max Life Insurance Company Limited, the material subsidiary of the Company has undergone a Secretarial Audit for the year ended March 31, 2023. the Secretarial Audit Report issued by

M/s Chandrasekaran Associates, practicing Company Secretaries, new Delhi is enclosed as Annexure-5. the Secretarial Auditors have mentioned the details of the penalty/fine levied by the Insurance Regulatory and Development Authority of India (IRDAI)/national Stock exchange of India Limited (NSE) respectively for FY 2023 on Max Life Insurance Company Limited and that there were no other qualification, reservation, disclaimers or adverse remarks in the Secretarial Audit Report for FY 2023. the Board of Max Life Insurance Company Limited while noting the above, instructed the Management to be more cautious in meeting the timelines of compliance with applicable laws, adhere to the instructions of IRDAI and comply with the provisions of applicable laws in letter and spirit.

INTERNAL AUDITORS

the Company follows a robust Internal Audit process and audits are conducted on a regular basis, throughout the year, as per the agreed audit plan. During the year under review, M/s MGC, Global Risk Advisory LLp was re-appointed as Internal Auditors for conducting the Internal Audit of key functions and assessment of Internal Financial Controls, etc.

INTERNAL FINANCIAL CONTROLS

the Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed. the Management has reviewed the existence of various risk-based controls in the Company and also tested the key controls towards the assurance of compliance for the present fiscal.

In the opinion of the Board, the existing internal control framework is adequate and commensurate with the size and nature of the business of the Company. Further, the testing of the adequacy of internal financial controls over financial reporting has also been carried out independently by the Statutory Auditors as mandated under the provisions of the Act.

During the year under review, there were no instances

of fraud reported by the auditors to the Audit Committee or the Board of Directors.

RISK MANAGEMENT

Your Company considers that risk is an integral part of its business and therefore, it takes proper steps to manage all risks in a proactive and efficient manner. The Board has formed a Risk Management Committee to identify the risks impacting the business and formulate strategies/policies aimed at risk mitigation as part of risk management. Further, a core team of senior management has also been formed to identify and assess key risks, risk appetite, tolerance levels and formulate strategies for mitigation of risks identified in consultation with process owners.

the Company has adopted a Risk Management policy, whereby risks are broadly categorized into Strategic, operational, Compliance, and Financial & Reporting Risks. the policy outlines the parameters of identification, assessment, monitoring, and mitigation of various risks which are key to business performance.

there are no risks which, in the opinion of the Board, threaten the very existence of your Company. However, some of the challenges/risks faced by its subsidiary have been dealt with in detail in the Management Discussion and Analysis section, forming part of this Annual Report.

VIGIL MECHANISM

the Company has a vigil mechanism pursuant to which a Whistle Blower policy has been adopted and is in place. the policy ensures that strict confidentiality is maintained whilst dealing with concerns raised and also that no discrimination will be meted out to any person for a genuinely raised concern in respect of any unethical and improper practices, fraud, or violation of the Companys Code of Conduct.

the said policy, covering all employees, Directors, and other people having an association with the Company, is hosted on the Companys website at https://www. maxfinancialservices.com/corporate-policies

A brief note on Vigil Mechanism/Whistle Blower

policy is also provided in the Report on Corporate Governance, which forms part of this Annual Report.

COST RECORDS

Your Company is not required to maintain cost records as specified by the Central Government under Section 148(1) of the Act.

PUBLIC DEPOSITS

During the year under review, the Company has not accepted or renewed any deposits from the public.

COMPLIANCE WITH SECRETARIAL STANDARDS

pursuant to the provisions of Section 118 of the Act, the Company has complied with the applicable provisions of the Secretarial Standards issued by the Institute of Company Secretaries of India.

DETAILS OF THE APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANkRUPTCY CODE, 2016

During the period under review, no application was made by or against the company, and accordingly, no proceeding is pending under the Insolvency and Bankruptcy Code, 2016.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis, except an ongoing transaction with Max Life Insurance Company limited for allowing usage of trademarks without any consideration for which approval has already been obtained from shareholders of the Company in 2016 for the said transaction.

Further, the members of the Company in their 34th Annual General Meeting held on August 25, 2022, had approved the material-related party transaction by Max life Insurance with its related party, viz., Axis Bank limited for payment of fees/commission for distribution of the life insurance products, display of publicity materials, procuring banking services, and other related business in terms of SEBI listing

Regulations effective April 1, 2022, till the date of ensuing annual general meeting.

Form AoC-2 furnishing particulars of contracts or arrangements entered by the Company with related parties referred to in Section 188(1) of the Companies Act, 2013, is annexed to this report as Annexure 6.

The details of all the Related party Transactions form part of Note No. 28 to the standalone financial statements attached to this Annual Report.

the policy on the materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companys website at https://www. maxfinancialservices.com/corporate-policies

BUSINESS RESPONSIBILITY AND

SUSTAINABILITY REPORT

In terms of Clause 34(2)(f) of SEBI Regulations, a Business Responsibility and Sustainability Report, on various initiatives taken by the Company and its material subsidiary, Max Life, is enclosed in this report as Annexure-7.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION And Foreign ExCHANGE EARNINGS & OUTGO

The information on the conservation of energy, technology absorption and foreign exchange earnings & outgo as stipulated under Section 134(3)(m) of the Act read with Companies (Accounts) Rules, 2014 is as follows:

a) Conservation of Energy

(i) the steps taken or impact on the conservation of energy: Regular efforts are made to conserve energy through various means such as the use of low energy-consuming lighting, etc.

(ii) the steps taken by the Company for using alternate sources of energy: Since your Company is not an energy-intensive unit, utilization of alternate sources of energy may not be feasible.

(iii) capital investment on energy conservation equipment: Nil

b) Technology Absorption

Your Company is not engaged in manufacturing activities, therefore there is no specific information to be furnished in this regard.

There was no expenditure incurred on Research and Development during the period under review.

c) foreign Exchange Earnings and Outgo

the foreign exchange earnings and outgo are given below:

total Foreign exchange earned

nil

total Foreign exchange used

639.77 lakhs

 

ANNUAL RETURN

the Annual Return as of March 31, 2023, under Section 92(3) of the Act read with Companies (Management and Administration) Rules, 2014, can be accessed at the website of the Company at https://www. maxfinancialservices.com/static/uploads/financials/ pdf7b39741d007e8e46739bf90684b44ecb.pdf

DIRECTORS RESPONSIBILITY STATEMENT

pursuant to Section 134(5) of the Act, it is hereby confirmed that:

a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

b) 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 of the Company for that period;

c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The Directors had prepared the annual accounts on a going concern basis;

e) The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

During the year under review, there were no such significant and material orders passed by the regulators or courts or tribunals which could impact the going concern status and the companys operations in the future.

TRANSFER OF UNCLAIMED DIVIDEND AND SHARES TO THE INVESTOR EDUCATION AND PROTECTION FUND

the Company had paid a Final Dividend in FY 201415 and an Interim Dividend in FY 2015-16, and the unpaid dividend was transferred to two separate bank accounts in the same year for the aforesaid two dividends. After the completion of Seven years, the unpaid amounts still lying in the said accounts were transferred to the Investor Education and protection Fund, along with respective shares on which such dividend remained unpaid on october 23, 2022 and December 10, 2022, respectively.

UNCLAIMED SHARES

Regulation 39(4) of the SEBI Listing Regulations inter alia requires every listed company to comply with a certain procedure in respect of shares issued by it in physical form, pursuant to a public issue or any other issue and which remained unclaimed for any reason whatsoever.

the face value of the shares of the Company was split from 10/- each to 2/- each in the year 2007. Certain share certificates were returned undelivered and were lying unclaimed. The Company had sent necessary reminders to concerned shareholders, and subsequently, such shares were transferred to the Unclaimed Suspense Account.

The voting rights on the equity shares lying in the said Unclaimed Suspense Account shall remain frozen till the rightful owner claims such shares. Further, all corporate benefits in terms of securities accruing on the said unclaimed shares viz. bonus shares, split, etc., if any, shall also be credited to the said Unclaimed Suspense Account.

The concerned shareholder(s) are requested to write to the Registrar and Share Transfer Agent to claim the said equity shares. on receipt of such claim, additional documents may be called for and subject to its receipt and verification, the said shares lying in the said Unclaimed Suspense Account shall be transferred to the depository account provided by the concerned shareholder(s) or the physical share certificate shall be delivered to the registered address of the concerned shareholder(s).

The details of Equity Shares held in the Unclaimed Suspense Account are as follows:

S. No. Particulars

No. of Shareholders

No. of Equity Shares

1. The Aggregate number of shareholders and the outstanding shares originally lying in the Unclaimed Suspense Account (as at the beginning of the financial year i.e., April 1, 2022)

304

78,870

2. Number of shareholders who approached the listed entity for transfer of shares from the Unclaimed Suspense Account during the year

*104

21,035

3. Number of shareholders to whom the shares were transferred from the Unclaimed Suspense Account, during the year

*104

21,035

4. The aggregate number of shareholders and the outstanding shares in the Suspense Account (as of the end of the financial year i.e., March 31, 2023)

200

57,835

 

*This includes 18,355 equity shares comprising 100 shareholders which were transferred to the Investor Education and Protection Fund

Till the date of this report, the Company had approved 2003 such claims from shareholders for 4,17,475 shares, for transfer of the shareholding back to the shareholders from the unclaimed Suspense Account in Demat form.

CAUTIONARY STATEMENT

Statements in this Report, particularly those which relate to Management Discussion and Analysis, describing the Companys/subsidiarys objectives, projections, estimates and expectations may constitute "forward-looking statements" within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied in the statement depending on the circumstances.

ACKNOWLEDGMENTS

Your Directors would like to place on record their appreciation of the contribution made by its management and its employees, who through

their competence and commitment have enabled the Company to achieve impressive growth. Your Directors acknowledge with thanks the cooperation 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.

On behalf of the Board of Directors
Max Financial Services Limited
Analjit Singh Chairman
DIN:00029641
Place: South Africa
Date: May 12, 2023