Max India Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting the fourth Boards Report of Max India Limited (the Company) along with the audited Statement of Accounts for the financial year ended March 31, 2019. This Boards report is prepared on the basis of standalone financial statements of the Company for the year ended March 31, 2019.

Standalone Results

The highlights of the stand-alone financial results of your Company along with previous years results are as under:

Particulars For the year ended March 31, 2019 For the year ended March 31, 2018
Income
Revenue from operations 55.95 63.76
Other income 0.52 1.74
Total revenue 56.47 65.50
Expenditure
Employee benefits expense 28.20 26.68
Depreciation & Amortisation 1.23 0.87
Other expenses 43.97 26.19
Total expenses 73.40 53.74
Profit/(Loss) before tax (16.93) 11.76
Tax expense 1.55 6.09
Profit/(Loss) After Tax (18.48) 5.67
Other comprehensive income/ (loss) 0.04 (0.03)
Total comprehensive income/ (loss) (18.44) 5.64

Your Company is engaged in the activity of holding and nurturing of investments in its subsidiaries and joint venture Company and also providing Management Consultancy Services to group companies.

Consolidated Results

In accordance with the Companies Act, 2013 ("the Act") and Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the audited consolidated financial statements are provided as part of this Annual Report and shall also be laid before the ensuing Annual General Meeting of the Company.

The Standalone and Consolidated Financial Statements have been prepared in accordance with the Indian Accounting Standards (IND AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time).

The Financial statements for the financial year ended March 31, 2019 are the Companys first IND-AS compliant annual financial statements with comparative results for the year ended March 31, 2018 also under IND-AS. The date of transition is April 1, 2017.

The highlights of the consolidated financial results of your Company and its subsidiaries are as under:

Particulars For the year ended March 31, 2019 For the year ended March 31, 2018
Income
Revenue from operations 155.76 240.02
Other Income 17.31 11.18
Total Revenue 173.07 251.20
Expenses
Cost of raw material and components consumed 7.36 41.25
(Increase)/ decrease in inventories of finished goods and work in progress 39.48 90.95
Employee benefits expense 84.37 79.46
Depreciation & Amortisation 5.21 4.49
Finance costs 24.09 26.07
Other expenses 60.24 62.73
Total Expenses 220.75 304.95
Loss before share of loss of joint ventures and tax from continuing operations (47.68) (53.75)
Share of loss of joint ventures (0.99) (5.82)
Loss before tax from continuing operations (48.67) (59.57)
Tax Expense 2.55 7.24
Loss after tax from continuing operations (51.22) (66.81)

 

Particulars For the year ended March 31, 2019 For the year ended March 31, 2018
Profit/ (loss) after tax from discontinuing operations (79.80) 33.58
Loss for the year (131.02) (33.23)
Other comprehensive income (OCI) (2.06) (731)
Total comprehensive income (133.08) (40.54)

Share Capital

The Authorized share capital of the Company as on March 31, 2019 was Rs. 60, 00, 00, 000/- (Rupees Sixty Crores only) comprising of 30, 00, 00, 000 equity shares of Rs. 2/- each.

During the year under review, 2, 32, 573 equity shares of rs. 2/- Each were allotted for cash, on exercise of stock options by eligible employees under the Max India Employee Stock Plan 2016.

The Paid up capital of the Company as on March 31, 2019 was Rs. 53, 72, 31, 276/- (Rupees Fifty three crores seventy two lakhs thirty one thousand two hundred seventy six only) comprising of 26, 86, 15, 638 equity shares of Rs. 2/- each.

Further, your Company allotted 49, 910 equity shares of Rs.2/- each to Mr. Mohit Talwar, Managing Director, for cash under the aforesaid Stock Plan post March 31, 2019 till the date of this Directors report.

Employee Stock Option Plan

Your Company has adopted an employee stock option plan viz. Max India Employee Stock Plan 2016 (ESOP Plan) at its first Annual General Meeting held on September 27, 2016. The ESOP Plan provides for grant of stock options aggregating not more than 5% of equity share capital of the Company to eligible employees and Directors of the Company. The ESOP Plan is administered by the Nomination and Remuneration Committee constituted by the Board of Directors of the Company.

Pursuant to the Composite Scheme of Arrangement amongst Max Financial Services Limited (formerly Max India Limited) (MFSL), Max India Limited (formerly Taurus Ventures Limited) (the Company) and Max Ventures and Industries Limited (formerly Capricorn Ventures Limited) and their respective shareholders and creditors, sanctioned

by the Honble High Court of Punjab and Haryana vide order dated December 14, 2015, the stock option-holders of MFSL were granted 25, 03, 560 stock options of the Company in proportion to the options held by them in MFSL with similar vesting schedule. Till date, the Company has issued and allotted 16, 17, 060 Equity shares of Rs. 2/- each, on the exercise 7, 30, 560 stock options at an exercise price of Rs.2/- per option and 8, 86, 500 stock options at an exercise price of Rs.77.80/- per option by the stock optionholders of MFSL. Further, 6, 65, 000 options lapsed as of March 31, 2019 as detailed in Annexure- 1 to this Report.

In addition to above, the Nomination and Remuneration Committee of the Company granted 1, 08, 749 stock options to Mr. Mohit Talwar, Managing Director of the Company, of which 64, 489 equity shares of Rs. 2/- each have been issued and allotted to him till date upon exercise of 64, 489 stock options of Rs.2/- each.

There is no change in the ESOP plan during the financial year under review. The ESOP plan is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

Details of options granted upto March 31, 2019 and other disclosures as required under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and Rule 12(9) of Companies (Share Capital & Debentures) Rules, 2014 for the financial year 2018-19 are enclosed as Annexure-1 and are also available on the Companys website at www.maxindia.com

Cancellation of Convertible Warrants

The Company allotted 19, 384, 584 Convertible Warrants to a promoter entity on June 20, 2017 at an issue price of Rs. 154.76 per warrant, upon receipt Rs. 75 crores, being 25% of the upfront warrant Subscription Amount. Each warrant was convertible into 1 equity share in terms of applicable SEBI guideline at any time before expiry of 18 months from the date of allotment i.e. on or before December 19, 2018.

In-view of uncertain market situations and more particularly, as the share price of the Company was quoting substantially below the conversion price, the Promoter group decided not to opt for conversion of aforesaid warrants. Therefore, pursuant to applicable SEBI guidelines, the Board of directors of the Company on December 17, 2018, took note of cancellation of aforesaid warrants and forfeiture of upfront warrant Subscription Amount of Rs.75 Crore paid earlier by the Promoter entity on such warrants.

Extracts of Annual Return

Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extracts of the Annual Return as at March 31, 2019 (MGT-9) is enclosed as Annexure - 2 to this report and is also available on the Companys website viz.www.maxindia.com

Subsidiaries, Associates and Joint Ventures

During the year under review, your Company incorporated a Wholly-owned Subsidiary namely Advaita Allied Health Services Limited ("Advaita"). Advaitas current Authorized and Paid-up Capital is Rs. 5, 00, 000 comprising of 50, 000 Equity Shares of Rs. 10 each. The first financial year of Advaita has commenced from the date of its incorporation i.e. January 23, 2019 and shall end on March 31, 2020.

As of March 31, 2019, your Company had ten (10) subsidiaries and one (1) Associate Company, out of which seven (7) Subsidiary Companies are direct Subsidiaries. Further, the Company owns 100% of the share capital in residual three (3) subsidiaries, on a pass through basis.

The requisite details of these companies form part of the extracts of Annual Return given in Annexure-2.

A report on the performance and financial position of these subsidiaries and Associate Company, included in the consolidated financial statements and presented in Form AOC-1 is enclosed as Annexure - 3 to this report. The said Form AOC-1 does not contain the requisite details of Advaita as the first audited financial figures of Advaita shall be made available only after its first financial year ending on March 31, 2020.

Further, a detailed update on the business performance and contribution of your Companys key operating subsidiaries and Associate Company in the performance of the Company is furnished as part of Management Discussion and Analysis section which forms part of the Report.

As provided in Section 136 of the Act, the financial statements and other documents of the subsidiary companies are not attached with the financial statements of the Company. The complete set of financial statements including financial statements of the subsidiaries of the Company is available on our website www.maxindia.com. These documents will also be available for inspection during business hours at the Registered and Corporate Office of the Company and shall also be made available to the shareholders of the Company in hard copy, on demand.

During the year under review, your Company made further investments of Rs. 38.45 crore in Antara Senior Living Limited by subscribing to 38, 45, 000 Compulsory Convertible Preference Shares (CCPS) of Rs.100/- each and Rs. 28.50 crore in Max Bupa Health Insurance Company Limited by subscribing to 2, 80, 50, 000 equity shares of Rs. 10/- each.

Dividend

The Board of Directors did not recommend any dividend for the financial year ended March 31, 2019, on the Equity Share Capital of the Company.

In terms of regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), the Companys dividend distribution policy is enclosed as Annexure - 4 to the boards report.

Transfer to Reserves

The Company has not transferred any amount to the General Reserves for the financial year ended March 31, 2019.

Directors

As on March 31, 2019, the Board of Directors comprised of 8 (eight) members with 1 (one) Executive Director and 7(seven) Non-Executive Directors of which 4 (four) were Independent.

Mr. Dipankar Gupta, an Independent Director of the Company resigned from the Board of Directors of the Company with effect from April 11, 2018.

Mr. K. Narasimha Murthy (DIN: 00023046) and Mrs. Sharmila Tagore (DIN: 00344638) were appointed as Additional Directors holding the position of Independent Director on the Board of Directors of the Company, effective December 24, 2018 and February 26, 2019, respectively.

Mr. Rahul Khosla, who was the Chairman of the Company, has resigned from the Board of Directors of the Company effective closing of business hours of March 31, 2019. The Board places on record its deep appreciation for the valuable contribution made by Rahul Khosla as the Chairman of the Company.

Mr. Analjit Singh, Promoter of the Company was appointed as an Additional Director on the Board of the Company holding the position of Non Executive Director, not liable to retire by rotation, designated as Chairman of the Company with effect from April 1, 2019.

The above directors were appointed as Additional Directors and therefore, their term of office expires on the date of ensuing Annual General Meeting. The Company has received notices under Section 160 of the Companies Act, 2013 from members proposing the candidature of these directors for being appointed as directors of the Company. The Board of Directors on recommendation of Nomination and Remuneration Committee recommend to the shareholders for their appointment as Directors of the Company. The brief particulars of all such directors form part of the notice of the ensuing Annual General Meeting.

As per the provisions of Act, Independent Directors were appointed for a term of five consecutive years and shall not be liable to retire by rotation. Accordingly, resolutions proposing appointment of Mr. K. Narasimha Murthy and Mrs. Sharmila Tagore, as Independent Directors of the Company, form part of the notice of the ensuing Annual General Meeting.

In terms of Section 152 of the Act and the Articles of Association of the Company, Mrs. Tara Singh Vachani and Mr. Ashwani Windlass are liable to retire by rotation at the ensuing Annual General Meeting. Mrs. Tara Singh Vachani and Mr. Ashwani Windlass being eligible have offered themselves for re-appointment at the ensuing Annual General Meeting. The Board recommends their re-appointment for consideration of the members of the Company at the forthcoming Annual General Meeting. Brief profiles of these directors form part of the Notice convening Annual General Meeting.

The Board met seven times during the financial year 201819:

S. No. Date Board Strength No. of Directors present at the meeting
1 May 29, 2018 6 5
2 August 10, 2018 6 6
3 November 2, 2018 6 6
4 December 24, 2018 7 6
5 February 11, 2019 7 6
6 February 26, 2019 8 3
7 March 22, 2019 8 7

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

Statement of Declaration by Independent Directors

All Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. In the opinion of the Board, the Independent Directors, fulfil the conditions of independence specified in Section 149(6) of the Act and Regulation 16(1) (b) of the Listing Regulations. The Independent Directors have also confirmed that they have complied with the Companys Code of Conduct and the inlaid policies and applicable laws.

Committees of the Board of Directors

The Company has various 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. Details of these committees along with their charter, composition and meetings held during the year, are provided in the Corporate Governance Report, which forms part of this report.

1. Audit Committee:

The Audit Committee met six times during the financial year 2018-19, viz. on May 29, 2018, August 10, 2018, November 2, 2018, December 24, 2018, February 11, 2019 and March 22, 2019. The Committee as on March 31, 2019 consisted of Mr. Ashok Kacker (Chairman), Mr. Dinesh Kumar Mittal and Mr. Mohit Talwar.

2. Nomination and Remuneration Committee:

The Nomination and Remuneration Committee met six times during the financial year 2018-19, viz. on May 29, 2018 August 10, 2018, December 24, 2018, February 11, 2019, February 26, 2019 and March 22, 2019. The Committee as on March 31, 2019 consisted of Mr. Ashok Kacker (Chairman), Mr. D. K. Mittal and Mr. Rahul Khosla. Consequent to the resignation of Mr. Rahul Khosla, he ceased to be a member of the Committee effective March 31, 2019. Mr. Analjit Singh has been co-opted as a member of this Committee with effect from April 1, 2019.

3. Investment & Finance Committee:

The Investment & Finance Committee met six times during the financial year 2018-19, viz. on May 29, 2018, August 10, 2018, November 2, 2018, December 24, 2018, February 11, 2019 and March 22, 2019. The Committee as on March 31, 2019 consisted of Mr. Ashwani Windlass (Chairman), Mr. Rahul Khosla, Mr. Ashok Kacker, Mr. D.K. Mittal, Mrs. Tara Singh Vachani and Mr. Mohit Talwar. Consequent to the resignation of Mr. Rahul Khosla, he ceased to be a member of the Committee effective March 31, 2019.

4. Corporate Social Responsibility Committee:

The Committee met once during the financial year 2018-19, viz. on August 10, 2018, with the presence of all its members. The Committee as on March 31, 2019 consisted of Mr. Ashok Kacker, Mr. Dinesh Kumar Mittal and Mrs. Tara Singh Vachani.

5. Stakeholders Relationship Committee:

The Committee met six times during the financial year 2018-19, viz. on May 29, 2018, August 10, 2018, November 2, 2018, December 24, 2018, February 11, 2019 and March 22, 2019. The Committee as on March 31, 2019 consisted of Mr. Ashwani Windlass (Chairman), Mr. Ashok Kacker and Mr. Mohit Talwar.

6. Committee of Independent Directors:

The Committee of Independent Directors as on March 31, 2019 consisted of Mr. Ashok Kacker, Mr. Dinesh Kumar Mittal, Mr. K. Narasimha Murthy and Mrs. Sharmila Tagore.

The Independent Directors had a separate meeting on May 29, 2019 in the presence of all four Independent directors and without the presence of Executive Directors to evaluate the performance of directors of the Company, the Chairman, the board as a whole and committees thereof for the year under review. Mr. Ashok Kacker chaired the meeting. At the meeting, the independent directors also assessed the quality, quantity and timeliness of flow of information between the Companys management and the board which enables the board to effectively and reasonably perform its duties. The independent directors also discussed the strategy and risks pertaining to the Company and its subsidiaries and associate companies.

Performance Evaluation of the Board

As per the requirements of the Act and Listing Regulations, formal Annual Evaluation process has been carried out for evaluating the performance of the Board, the Committees of the Board and the Individual Directors including Chairperson for the financial year ended March 31, 2019.

The performance evaluation was carried out by obtaining feedback from all Directors through a confidential online survey mechanism through Diligent, a secured electronic medium through which the Company interfaces with its Directors. The outcome of this performance evaluation was placed before the Nomination and Remuneration Committee, Independent Directors and the Board 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 commitment to good governance by ensuring a constant improvement of processes and procedures and contributed their best in overall growth of the organization.

Key Managerial Personnefi

In terms of the provisions of Section 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Mohit Talwar, Managing Director, Mr. Jatin Khanna, Chief Financial Officer and Mr. V. Krishnan, Company Secretary are the Key Managerial Personnel (KMP) of the Company.

Nomination & Remuneration Policy

In terms of the provisions of Section 134 (3)(e) of the Act, the Board of Directors on the recommendation of the Nomination and Remuneration Committee approved a policy on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided and the same is enclosed as Annexure - 5 to this report and is also available on our website www.maxindia. com.

Corporate Social Responsibility Policy (CSR policy)

In terms of the provisions of section 135 of the Act, read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company, on the recommendation of Corporate Social Responsibility Committee ("CSR Committee"), approved a CSR policy which is available on the website of the Company at www. maxindia.com.

Report on CSR Activities of the Company for the financial year ended March 31, 2019 is enclosed as Annexure - 6 to this Report.

Human Resources

As on March 31, 2019, there were 48 employees on the rolls of the Company. The remuneration of our employees is competitive with the market and rewards high performers across levels. The remuneration to Directors, Key Managerial Personnel and Senior Management are a balance between fixed, incentive pay and 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 the Rule 5(1) and Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are enclosed as Annexure-7a and Annexure-7b to this report.

Prevention of Sexual Harassment of Women at workplace

Your Company has requisite policy for prevention of Sexual Harassment of Women at workplace, which is available at www.maxindia.com. The comprehensive policy ensures gender equality and the right to work with dignity. An Internal Complaints Committee (ICC) has been constituted as per provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. No case under the said Act was reported to the Committee during the year under review.

Loans, Guarantees or Investments in Securities

The Company has pursuant to the provisions of Section 186 of the Act given loans, made guarantees and investments during the year under review and the details of such loans, guarantees and investments are provided in Note No 39 to the financial statements of the Company for the FY 201819.

Management Discussion & Analysis

In terms of Regulation 34 of Listing Regulations, a review of the performance of the Company, including those of your Companys subsidiaries and Associate Company, 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 M/s Sanjay Grover & Associates, Practicing Company Secretaries regarding compliance with the regulations of Corporate Governance pursuant to Part E of Schedule V of Listing Regulations and a certificate from the Managing Director and Chief Financial Officer on compliance of Part B of Schedule II of Listing Regulations, form part of the Corporate Governance Report.

Public Deposits

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

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. There is no material contract or arrangement in terms of Listing Regulations. Hence, the requirement of furnishing the particulars of contracts or arrangements entered into by the Company with related parties referred to in section 188(1) of the Act, in Form- AOC-2 is not applicable to the Company.

All Related Party Transactions are placed before the Audit Committee for approval. Omnibus approval was obtained on a yearly basis for transactions which are of repetitive nature. Transactions entered into pursuant to omnibus approval are placed before the Audit Committee and the Board for information and noting on a quarterly basis.

The details of all the Related Party Transactions entered during Financial Year 2018-19 form part of Note No. 31 to the financial statements attached to this Annual Report.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companys website www. maxindia.com

Statutory Auditors and Auditors Report_

Pursuant to Sections 139 & 142 of the Act, M/s S.R. Batliboi & Co., LLP, Chartered Accountants (FRN 301003E), were appointed as the Statutory Auditors of the Company at the first Annual General Meeting held on September 27, 2016 to hold office from the conclusion of first Annual General Meeting till the conclusion of the 5th Annual General Meeting of the Company to be held in the year 2020.

The Ministry of Corporate Affairs (MCA) vide its notification dated 7 May 2018, has omitted the requirement under first proviso to section 139 of the Act and rule 3(7) of the Companies (Audit and Auditors) Rules, 2014, regarding ratification of the appointment of statutory auditors by shareholders at every subsequent AGM.

Consequently, M/s. S R Batliboi & Co. LLP, Chartered Accountants, continues to be the statutory auditors of the Company till the conclusion of 5th AGM, as approved by shareholders at first AGM held on September 27, 2016.

There are no audit qualifications or reporting of fraud in the Statutory Auditors Report given by M/s S.R. Batliboi & Co., LLP, Statutory Auditors of the Company for the FY 2018-19 as annexed elsewhere in this Annual Report.

Secretarial Auditors and Secretarial Audit Report

Pursuant to Section 204 of the Act, your Company had appointed M/s Sanjay Grover and Associates, Practicing Company Secretaries (Firm Registration No.P2001DE052900) as its Secretarial Auditors to conduct the Secretarial Audit of the Company for the FY 2018-19. The Report of Secretarial Auditor for the Financial Year ended March 31, 2019 is enclosed as Annexure-8 to this report.

There are no audit qualifications, reservations or any adverse remark in the said Secretarial Audit Report.

Further, your Company complies with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

Cost Records

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

Business Responsibility Report

A detailed Business Responsibility Report as required under regulation 34 of the Listing Regulations, is annexed to this report as Annexure-9.

Internal Auditors

The Company follows a robust Internal Audit process and audits are conducted on a regular basis, throughout the year in accordance with the Audit Plans. During the year under review, M/s MGC and KNAV, Global Risk Advisory LLP were re-appointed as Internal Auditors for conducting the Internal Audit of key functions and assessment of Internal Financial Controls as required under applicable regulations.

Risk Management

Your Company considers that risk as an integral part of its business and therefore, it takes proper steps to manage all risks in a proactive and efficient manner. The Company management periodically assesses risks in the internal and external environment and incorporates suitable risk treatment processes in its strategy, and business and operating plans.

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 key operating subsidiaries & Associate Company have been dealt in detail in the Management Discussion and Analysis section of respective companies forming part of this Annual Report. A copy of the same can also be accessed at Companys website www.maxindia.com.

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 have reviewed the existence of various risk- based controls in the Company and also tested the key controls towards assurance for compliance for the present fiscal. Further, the testing of such controls shall also be carried out independently by the Statutory Auditors as mandated under the provisions of the Act.

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.

During the year under review, there were no instances of fraud reported by the auditors under section 143(12) of the Act to the Audit Committee or the Board of Directors.

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 Companys Code of Conduct.

The said Policy covering all employees, Directors and other persons having association with the Company is hosted on the Companys website www.maxindia.com

A brief note on Vigil Mechanism/ Whistle Blower Policy is also provided in the Report on Corporate Governance, which forms part of the Annual Report.

Particulars of Conservation Of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo

The information on 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 conservation of energy: Regular efforts are made to conserve the energy through various means such as use of low energy consuming lightings, 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 source 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. Further, 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 Rs. 2.23 Crore

Directors Responsibility Statement

Pursuant to the requirement under Section 134(3)(c) 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;

(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 loss 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.

Material Changes Affecting Financial Position

There are no material changes and commitments, affecting the financial position of the Company which has occurred between the end of the financial year of the Company i.e. March 31, 2019 and the date of the Directors report i.e. May 29, 2019. However, the proposal of a composite scheme of amalgamation and arrangement and divestment of equity shares of Max Bupa Health Insurance Company Limited are explained in detail in subsequent paragraphs.

Proposed Composite Scheme of Amalgamation and Arrangement

The Board of Directors of the Company, at its meeting held on December 24, 2018, approved a composite scheme of amalgamation and arrangement amongst Max India Limited ("Max India" or the Company), Max Healthcare Institute Limited (Max Healthcare), Radiant Life Care Private Limited (Radiant Life) and a wholly owned subsidiary (WOS) of the Company to be incorporated for this purpose (NewCo) and their respective shareholders and creditors ("Scheme").

After incorporation of NewCo namely Advaita Allied Health Services Limited ("Advaita"), the said scheme was revised and approved by the Board of directors of the Company on March 1, 2019, to inter-alia, include the details of Advaita in it.

The Scheme inter alia, provides for:

(a) Demerger of the activity of making, holding and nurturing investments in allied health and associated activities, inter alia comprising of underlying investments of the Company in Max Bupa Health Insurance Co Limited and Antara Senior Living Limited, along with corporate management services (collectively known as "Demerged Undertaking 1") from the Company into Advaita. The shareholders of the Company as on record date (to be specified subsequently) shall be issued 1 Equity share of Rs. 10/- each of Advaita for every 5 equity shares of Rs.2/- each held in the Company. The shares of Advaita shall be listed on the stock exchanges post effectiveness of the Scheme;

(b) Demerger of healthcare business of Radiant Life ("Demerged Undertaking 2") into Max Healthcare, pursuant to which shareholders of Radiant Life as on record date (to be specified subsequently) shall be issued 9074 equity shares of Max Healthcare of Rs. 10/- each, for every 10 equity shares, of Rs. 10/- each held in Radiant Life; and

(c) Amalgamation of residual Max India (post demerger of the Demerged Undertaking 1), which comprises of healthcare activities (including its underlying investment in Max Healthcare) with Max Healthcare. The shareholders of the Company as on record date (to be specified subsequently) shall be issued 99 equity shares of Rs.10/- each of Max Healthcare for every 100 equity shares of Rs.2/- each held in Max India. The shares of Max Healthcare shall be listed on stock exchanges post effectiveness of the Scheme.

The aforesaid scheme has been contemplated to consolidate the healthcare business activities carried on by Radiant Life and Max Healthcare and thereby, creating a standalone listed entity, which will exclusively be engaged in healthcare activities. The scheme shall also lead to unlock maximum value for the shareholders of Max India and therefore, ensure standalone focus on the allied health and associated activities of Max India, which will be demerged into a separate company namely Advaita, to be listed on the Stock Exchanges.

The Scheme is subject to the receipt of requisite approvals from the statutory authorities including Security and Exchange Board India (SEBI), Stock Exchanges (NSE and BSE), Competition Commission of India (CCI), the Insurance Regulatory and Development Authority of India (IRDAI), the National Company Law Tribunal (NCLT), and respective shareholders and creditors of parties to the Scheme.

Shifting of Registered Office of the Company from the State of Punjab to Mumbai, Maharashtra

Arising from the Scheme of Amalgamation and Arrangement referred above and further, in order to exercise better administrative control and enable the Company to rationalize and streamline its management of affairs, the Board of Directors of the Company in its meeting held on December 24, 2018 has recommended the proposal for shifting of the Registered Office of the Company from the State of Punjab to Mumbai, State of Maharashtra.

In terms of the provisions of Section 12, 13, 110 and other applicable provisions of the Act and the Rules made thereunder, the aforesaid proposal of shifting of registered office has been approved by the members of the Company with requisite majority through Postal Ballot/ e-voting on February 11, 2019.

The Company is in the process of filing the requisite application for seeking approval of Central Government in this regard.

Divestment of Equity Shares of Max Bupa Health Insurance Company

In-order to rebalance the portfolio of Companys businesses and keeping in view the significant capital requirements for the health insurance business going forward, the Board of Directors ("Board") of the Company at its meeting held on February 26, 2019, had approved a proposal relating to divestment of entire shareholding of the Company held in its material subsidiary viz. Max Bupa Health Insurance Company Limited ("Max Bupa") (equivalent to 51% of Max Bupas total issued and paid-up share capital) to True North Fund VI LLP and / or any of its affiliates ("Proposed Transaction"), subject to the receipt of requisite approvals including the approval of the Insurance Regulatory and Development Authority of India (IRDAI) and Shareholders of the Company.

The Salient features of the Proposed Transaction are as under

1. The Proposed Transaction is an all-cash transaction and it values Max Bupa at an enterprise value of Rs 1013 crores as on March 13, 2019. Accordingly, subject to certain adjustments contemplated under the terms of the Share Purchase Agreement dated March 13, 2019 executed between the Company, Max Bupa and True North Fund VI LLP ("SPA"), the purchase consideration for all shares held by the Company in Max Bupa would be Rs. 516,63,00,000 (Rupees Five Hundred Sixteen Crores and Sixty Three Lakhs) ("Initial Purchase Consideration").

2. The Initial Purchase Consideration is subject to certain adjustments under the SPA including but not limited to: (i) upward adjustment to the extent of any capital that is invested by the Company into Max Bupa between the date of execution of the SPA and the date of completion of the Proposed Transaction; and (ii) if the completion of the Proposed Transaction takes place after September 30, 2019, downward adjustment to the extent of 51% of the aggregate of (a) the gross provisions made in the books of accounts of Max Bupa, as on the quarter end preceding the date of completion of the Proposed Transaction, for diminution in the value of any investment made by the Company, if any and (b) any write-off of any investment made by the Company, in whole or in part, in the books of accounts of the Company after July 1, 2018 and until the quarter end preceding the date of completion of the Proposed Transaction. Any provision for diminution or writeoff or indemnity on the investments made by the Company, in whole or in part, in the books of accounts is capped at an aggregate amount of INR 40,00,00,000 (Indian Rupees Forty Crores). Further, any subsequent recovery made against such investments written-off or provided for, will be made good to the Company as per the mechanism set out in the SPA.

3. However, irrespective of the adjustments contemplated under the SPA, the Company will receive as the purchase consideration for all shares held by the Company in Max Bupa, an amount of at least INR 510,51,00,000 (Rupees Five Hundred Ten Crores and Fifty-One Lacs) on the date of completion of the Proposed Transaction.

4. As part of the SPA, the Company has provided certain customary representations and warranties and corresponding indemnities to True North Fund VI LLP. The Company has also provided to True North Fund VI LLP, certain specific indemnities pertaining to any diminution in the value of certain investments made by Max Bupa as more particularly set out in the SPA.

Pursuant to the requirement of Regulation 24 of Listing Regulations, the shareholders of the Company had accorded approval by way of Special Resolution passed through Postal Ballot/e-voting on May 22, 2019, in respect of aforesaid divestment of equity shares of Max Bupa. The transaction will be completed on receipt of requisite approval from IRDAI.

Significant and material orders passed by the regulators or courts or tribunals

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

Unclaimed Shares

The status of unclaimed equity shares of the Company transferred to the demat account, Max India Limited -Unclaimed Suspense Account, in accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is as follows:

S. No. Particulars No. of shareholders No. of equity shares held
1 Aggregate number of shareholders and the outstanding shares lying in the Unclaimed suspense account as on April 1, 2018 2257 500774
2 Number of shareholders who approached the Company (with complete documentation) during the year for transfer of shares from the Unclaimed Suspense Account 19 5530
3 Number of shareholders to whom shares were transferred during the year from the Unclaimed Suspense Account 19 5530
4 Aggregate number of shareholders and the outstanding shares lying in the Unclaimed Suspense Account as on March 31, 2019 2238 4, 95, 244

Voting rights in respect of the aforesaid 4, 95, 244 shares will remain frozen till the time such shares are transferred from the Unclaimed Suspense Account to the concerned Shareholders.

Cautionary Statement

Statements in this Report, particularly those which relate to Management Discussion and Analysis describing the Companys 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.

Acknowledgements

Your Directors acknowledge with thanks the co-operation 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. 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.

On behalf of the Board of Directors
Max India Limited
New Delhi Mohit Talwar Ashok Kacker
Date: May 29, 2019 Managing Director Director
(DIN:02394694) (DIN01647408)