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Notes to Accounts of Max Financial Services Ltd.

Mar 31, 2023

22. Commitments and contingent liabilities				('' in Lakhs)
Particulars		As at 31.03.2023	As at 31.03.2022
A.	Capital commitments
	Estimated amount of contracts remaining to be executed on tangible assets and not provided for (net of advances)
B.	Contingent liabilities
	Claims against the Company not acknowledged as debts*
	(i) Demands raised by custom authorities	485.12	473.99
	(ii) Demands raised by service tax authorities *	352.58	352.58
	* Amount deposited under protest	12.00	12.00
* No provision considered necessary since the Company expects a favourable decisions.

23. Segment information

The Company is primarily engaged in the business of growing and nurturing business investments and providing management advisory services to group companies in India. the Board of Directors of the Company, which has been identified as being the Chief operating Decision Maker (CoDM), evaluates the Company''s performance, allocates resources based on the analysis of the various performance indicators of the Company as a single unit. therefore there is no reportable segment for the Company, in accordance with the requirements of Ind AS 108- ''operating Segment Reporting; notified under the Companies (Indian Accounting Standard) Rules, 2015, as amended.

24. Employee benefit plans

(i) Defined contribution plans

The Company makes National Pension Scheme contributions which is defined contribution plan for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.

(ii) Defined benefit plans A Gratuity:

The Company makes annual contribution to the Max Financial Services Limited Employees Group Gratuity Fund of the Life Insurance Corporation of India, a funded defined benefit plan for eligible employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of 6 months. Vesting occurs upon completion of 5 years of service.

The present value of the defined benefit obligation and the related current service cost were measured using the Projected Unit Credit Method with actuarial valuations being carried out at each balance sheet date.

The gratuity plan typically exposes the Company to actuarial risks such as: interest rate risk, longevity risk and salary risk.

Interest risk

A decrease in the bond interest rate will increase the plan liability.

Longevity risk

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability

Salary risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

No other post-retirement benefits are provided to these employees

In respect of the plan in India, the most recent actuarial valuation of the present value of the defined benefit obligation was carried out as at March 31, 2023 by Manohar Lal Sodhi, Consulting Actuary, Fellow of the Institute of Actuaries of India. the present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

The current service cost and the net interest expense for the year are included in the employee benefits expense line item in the Statement of Profit and loss.

The remeasurement of the net defined benefit liability is included in other comprehensive income.

(g) Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. Th e sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

i) If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by '' 4.11 lakhs (increase by '' 4.49 lakhs) [as at March 31, 2022: decrease by '' 5.15 lakhs (increase by '' 5.43 lakhs)].

ii) If the expected salary growth increases (decreases) by 1.00%, the defined benefit obligation would increase by '' 4.33 lakhs (decrease by '' 4.04 lakhs) [as at March 31, 2022: increase by '' 5.26 lakhs (decrease by '' 5.09 lakhs)].

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

(h) the average duration of the benefit obligation represents average duration for active members at March 31, 2023: 9.73 years (as at March 31, 2022: 8.42 years).

B Provident Fund:

the Company is contributing in a provident fund trust "Max Financial Services Limited Employees Provident Trust Fund" which is a common fund for Max Group companies. The provident fund trust requires that interest shortfall shall be met by the employer, accordingly it has been considered as a defined benefit plan.

The interest rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952, and shortfall, if any, shall be made good by employer. The actuary has accordingly provided a valuation for "Max Financial Services Limited Employees Provident Trust Fund" which is a common fund for the Group.

26 Employee Stock Option Plan26.1 Employee Stock Option Plan - 2003 ("the 2003 Plan"):

The Company had instituted the 2003 Plan, which was approved by the Board of Directors on August 25, 2003 and by the shareholders on September 30, 2003. the 2003 plan provides for grant of stock options aggregating not more than 5% of number of issued equity shares of the Company to eligible employees of the Company. the 2003 plan is administered by the Nomination and Remuneration Committee appointed by the Board of Directors. under the plan, the employees receive shares of the Company upon completion of vesting conditions such as rendering of services across vesting period. Vesting period ranges from one to five years and options can be exercised within two years from vesting date. As amended in the 2003 plan and approved the shareholders in Annual General Meeting held on September 30, 2014, the option price will be determined by the nomination and Remuneration Committee, from time to time, in accordance with the provisions of applicable law, provided that the option price shall not be below the face value of the equity shares of the Company.

For the current year, the weighted average share price at the exercise date was '' nil (previous year : '' 393.12).

the weighted average exercise price for stock options outstanding as at March 31, 2023 was '' nil per share (March 31, 2022: '' 393.12 per share).

the expected life of the stock is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. the expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.

Company as a Lessor

The Company has entered into agreements of leasing out the properties. These are in the nature of operating leases and lease arrangements contain provisions for renewal. The total lease income in respect of such lease recognised in Statement of profit and Loss for the year ended March 31, 2023 is '' 58.19 lakhs (March 31, 2022: '' 43.80 lakhs).

1. ) As the future liability for gratuity and leave encashment is provided on actuarial basis for the

Company as a whole, the amount pertaining to the directors is not ascertainable and, therefore, not included above. The figures do not include accrual recorded for Employee Share Based payments.

2. ) payments made to Mr. Analjit Singh on his extensive involvement in the strategic developments at

the Company are with the approval of shareholders

3. ) the remuneration paid to aforesaid KMp''s in FY 2022 includes one - time special incentive of ''

7.75 crores paid for their valued contribution in consummation of Max Financial - Axis transaction. This includes payment of '' 5 crores made to Mr. Mohit Talwar, MD of the company with the approval of shareholders.

E. Terms and conditions of transactions with related parties

Transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. The Company has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

30. Financial Instruments

(a) Capital management

The capital management objectives of the Company are:

- to ensure that the Company complies with externally imposed capital requirements and maintains strong credit ability and healthy capital ratios

- to ensure the ability to continue as a going concern

- to provide an adequate return to shareholders

Management assesses the capital requirements of the Company in order to maintain an efficient overall financing structure. the Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.

(b) financial risk management objective and policies financial assets and liabilities:

the accounting classification of each category of financial instruments, and their carrying amounts, are set out below:

The Company is exposed to market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

the objective of the Company''s risk management framework is to manage the above risks and aims to:

- improve financial risk awareness and risk transparency

- identify, control and monitor key risks

- provide management with reliable information on the Company''s risk exposure

- improve financial returns

(i) Market risk

Market risk is the risk that the fair value of financial instrument will fluctuate because of change in market price.

the Company''s activities expose it primarily to interest rate risk, currency risk and other price risk such as equity price risk. the financial instruments affected by market risk includes : Fixed deposits, current investments, borrowings and other current financial liabilities.

(ii) Liquidity risk

the Company requires funds both for short-term operational needs as well as for long-term investment needs.

the Company remains committed to maintaining a healthy liquidity, gearing ratio, deleveraging and strengthening the balance sheet. the maturity profile of the Company''s financial liabilities based on the remaining period from the date of balance sheet to the contractual maturity date is given in the table below. the figures reflect the contractual undiscounted cash obligation of the Company (other than derivative financial liability and lease liabilities).

(iii) Foreign currency risk

Foreign exchange risk comprises of risk that may arise to the Company because of fluctuations in foreign currency exchange rates. Fluctuations in foreign currency exchange rates may have an impact on the Statement of profit and Loss. As at the year end, the Company was exposed to foreign exchange risk arising from foreign currency payables.

(iv) Interest rate risk

The Company is exposed to interest rate risk on fixed deposits outstanding as at the year end. The Company invests in fixed deposits to achieve the Company''s goal of maintaining liquidity, carrying manageable risk and achieving satisfactory returns.

(v) Other price risk

the Company is exposed to price risks arising from fair valuation of Company''s investment in mutual funds. the investments in mutual fund are held for short term purposes.

(vi) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. the Company''s exposure to credit risk primarily arises from trade receivables, balances with banks and security deposits. the credit risk on bank balances is limited because the counterparties are banks with good credit ratings. the Company''s exposure and credit worthiness of its counterparties are continuously monitored.

33. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

34. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and protection Fund by the Company.

35. the Company is primarily engaged in the business of growing and nurturing business investments in its subsidiary. the investments (financial assets) and dividend income (financial income) on the same has resulted in financial income to be in excess of 50% of its total income and its financial assets to be more than 50% of total assets. the management is of the view supported by legal opinion that the Company is an unregistered Core Investment Company (unregistered CIC) as laid down in the "Master Direction - Core Investment Companies (Reserve Bank) Directions, 2016''; as amended. Hence, registration under Section 45-IA of the Reserve Bank of India Act, 1934 is not required.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

38. the Board of Directors of the Company in its meeting held on March 3, 2020, had approved entering into a put/Call arrangement for acquisition of balance shares held by Mitsui Sumitomo Insurance Company Limited (MSI) in Max Life Insurance Company Limited (''MLIC'') and matters incidental thereto at a price of '' 85 per share ("MSI put/Call option"). the shareholders of the Company approved the said MSI put/Call option on May 27, 2020. In this regard the Company had executed definite agreement, which was subject to receipt of requisite regulatory approvals.

The Company received approval from Insurance Regulatory and Development Authority of India (''IRDAI'') vide its letter dated November 25, 2022. Pursuant to the approval, on December 8, 2022, the Company acquired residual 99,136,573 equity shares of face value of '' 10 each constituting 5.17% equity stake held by MSI in MLIC at a price of '' 85 per share. On acquisition of the aforesaid stake in MLIC, the shareholding held by the Company in MLIC increased to 87%.

39. The Board of Directors of the Company in its meeting held on April 27, 2020 approved entering into definitive agreements with Axis Bank for the sale of equity share capital of MLIC, a subsidiary of the Company, to Axis Bank, subject to receipt of shareholders'' approval and other requisite regulatory approvals. The shareholders of the Company approved the transaction on June 16, 2020.

On October 30, 2020, the Company, MLIC, Axis Bank and its subsidiaries (together "Axis Entities"), i.e. Axis Capital Limited and Axis Securities Limited ("Axis Bank subsidiaries") entered into agreements for acquisition of upto 19.002% of the equity share capital of MLIC ("Agreements"). Pursuant to receipt of all approvals, Axis Bank had acquired 9.002% of the equity share capital of MLIC and Axis Bank subsidiaries acquired 3% of the share capital of MLIC as per Rule 11UA valuation of the Income-tax Rules, 1962 upto March 31, 2022.

On January 9, 2023 the Company has executed revised agreements with the parties in terms of which Axis Entities have the right to purchase the balance 7% equity stake of MLIC from the Company at Fair Market Value using Discounted Cash Flows instead of valuation as per Rule 11UA of the Income Tax Rules, 1962. This revision has been done consequent to the guidance received by MLIC from IRDAI.

The acquisition of 7% of equity share capital of MLIC by Axis Entities is subject to receipt of requisite regulatory approvals. pending receipt of requisite approvals, the said transaction cannot be considered concluded at the current date and hence, no adjustments have been made in the financial year.

40. The Company does not have any transactions with struck off Companies under section 248 or section 560 of Companies Act, 2013.

Reason for variance:

Current Ratio - lower due to decrease in current investments and decrease in trade payables Return on Equity (ROE) - lower due to decrease in revenue

Trade payable turnover ratio - higher due to decrease in trade payables and decrease in legal and professional expenses

Net capital turnover ratio - lower due to decrease in net working capital and revenue Net profit ratio - lower due to higher % decline in revenue

Return on capital employed (ROCE) - Lower due to decrease in earnings when compared with the previous year; as the company has not earned any dividend income during the current year.

42. pursuant to sections 135(5) of Companies Act, 2013 and rule made thereunder, the Company need to ensure that at least 2% of average net profit of the preceding three financial years is spent on CSR activities.

The Company does not have turnover of rupees one thousand crore or more or a net profit of rupees five crore or more as computed under section 135 of the Act during the immediately preceding financial year and hence, provisions of Section 135 of the Act are not applicable to the Company during the year.

43. No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

44. The Company has not declared or paid any dividend during the year and has not proposed final dividend for the year.

45. The figures for the previous year have been regrouped/reclassified wherever necessary, to make them comparable.

46. The standalone financial statements were approved for issue by the Board of Directors on May 12, 2023.

Mar 31, 2022

During the current year, the Company has reclassified immovable property, held by the Company from Property, Plant and Equipment to Investment Property considering the current plans of the Company. The same was given to former employee who was providing consultancy services upto previous year.

Based on the current valuation report, obtained by the Company, the value of property is higher than the carrying value in the books of account and accordingly, the management has concluded that there is no risk of further impairment other than those provided for in previous years.

Refer notes (i) to (v) below

(i) The Company has only one class of equity shares having a par value of '' 2 each. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, holder of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(v) Shares reserved for issuance

As at March 31,2022 - Nil (As at March 31,2021 : 65,865) shares, face value of ''2 each were reserved for issuance towards outstanding employee stock options granted under Employee Stock Option Plan 2003 (ESOP) of the Company. (See note 27.1).

The Company had issued 2,386,634 equity shares (during the year 31 March, 2021 : 2,648,215) during the period of five years immediately preceding the reporting date on exercise of options granted under the ESOP plan wherein part consideration was received in the form of employee services.

(e) During the year, the Company has elected to the option permitted under section 115BAA of the Income - tax Act, 1961 as introduced by the Taxation Laws ( Amendment) Ordinance, 2019 dated September 20,2019. Accordingly, the Company has recognised provision of Income tax and remeasured its deferred tax asset/liabilities basis the rate prescribed in the said section and taken the full effect to Statement of profit and loss in the current year.

C. Other commitments

(i) The Company through a call/put option has to acquire the remaining shareholding held by MSI at '' 85 for every equity share of '' 10 each held by MSI in Max Life ("MSI Put/Call Option") (See note 41).

(ii) Axis Entities have a right to acquire upto 7% (previous year 10.02%) of the equity share capital of Max Life held by the Company, in one or more tranches (See note 42).

* No provision is considered necessary since the Company expects a favourable decisions.

24. Segment information

The Company is primarily engaged in the business of growing and nurturing business investments and providing management advisory services to group companies in India. The Board of Directors of the Company, which has been identified as being the Chief Operating Decision Maker (CODM), evaluates the Company''s performance, allocates resources based on the analysis of the various performance indicators of the Company as a single unit. Therefore there is no reportable segment for the Company, in accordance with the requirements of Ind AS 108- ''Operating Segment Reporting'', notified under the Companies (Indian Accounting Standard) Rules, 2015, as amended.

25. Employee benefit plans(i) Defined contribution plans

(ii) Defined benefit plans A Gratuity:

The gratuity plan typically exposes the Company to actuarial risks such as: interest rate risk, longevity risk and salary risk.

Interest risk

A decrease in the bond interest rate will increase the plan liability.

Longevity risk

Salary risk

No other post-retirement benefits are provided to these employees

In respect of the plan in India, the most recent actuarial valuation of the present value of the defined benefit obligation was carried out as at March 31,2022 by Manohar Lal Sodhi, Consulting Actuary, Fellow of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

(g) Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

i) If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by '' 5.15

Lakhs (increase by '' 5.43 Lakhs) [as at March 31,2021: decrease by '' 15.57 Lakhs (increase by '' 17.23 Lakhs)].

ii) If the expected salary growth increases (decreases) by 1.00%, the defined benefit obligation would increase by '' 5.26 Lakhs (decrease by '' 5.09 Lakhs) [as at March 31, 2021: increase by '' 16.48 Lakhs (decrease by '' 15.22 Lakhs)].

(h) The average duration of the benefit obligation represents average duration for active members at March 31, 2022: 8.42 years (as at March 31, 2021: 10.80 years).

B Provident Fund:

The Company is contributing in a provident fund trust "Max Financial Services Limited Employees Provident Trust Fund" which is a common fund for Max Group companies. The provident fund trust requires that interest shortfall shall be met by the employer, accordingly it has been considered as a defined benefit plan.

27 Employee Stock Option Plan27.1 Employee Stock Option Plan - 2003 ("the 2003 Plan"):

The Company had instituted the 2003 Plan, which was approved by the Board of Directors on August 25, 2003 and by the shareholders on September 30, 2003. The 2003 Plan provides for grant of stock options aggregating not more than 5% of number of issued equity shares of the Company to eligible employees of the Company. The 2003 Plan is administered by the Nomination and Remuneration Committee appointed by the Board of Directors. Under the plan, the employees receive shares of the Company upon completion of vesting conditions such as rendering of services across vesting period. Vesting period ranges from one to five years and options can be exercised within two years from vesting date. As amended in the 2003 Plan and approved the shareholders in Annual General Meeting held on September 30, 2014, the Option Price will be determined by the Nomination and Remuneration Committee, from time to time, in accordance with the provisions of applicable law, provided that the Option Price shall not be below the face value of the equity shares of the Company.

The weighted average exercise price for stock options outstanding as at March 31,2022 is '' 393.12 per share (March 31,2021: ''392.09 per share).

The weighted average remaining contractual life for the stock options outstanding as at March 31,2022 is Nil (March 31,2021: 2.02 years). The range of exercise prices for options outstanding at the end of the year was Nil (March 31,2021: 2.00 to 404.45).

The expected life of the stock is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.

28. Leases

Effective April 1,2019, the Company adopted Ind AS 116 "Leases", applied to all lease contracts existing on April 1,2019 using the modified retrospective method along with the transition option to recognise Right-of-use assets (ROU) at an amount equal to the lease liabilities. The Company recorded the lease liabilities at the present value of the lease payments discounted at the incremental borrowing rate and the right of use asset at its carrying amount as if the standard had been applied since the commencement date of the lease.

Consequently, the nature of expenses in respect of Operating Leases had changed from lease rent to depreciation cost for the ROU assets and finance cost for the interest accrued on lease liabilities.

The Company has entered into short term lease arrangements for certain facilities and office premises. Rent expense of '' 90.17 Lakhs (March 31,2021: '' 149.62 Lakhs) in respect of obligation under cancellable operating leases has been charged to the Statement of Profit and Loss for these short term lease arrangements.

31. Financial Instruments (a) Capital management

The capital management objectives of the Company are:

- to ensure that the Company complies with externally imposed capital requirements and maintains strong credit ability and healthy capital ratios

- to ensure the ability to continue as a going concern

- to provide an adequate return to shareholders

Management assesses the capital requirements of the Company in order to maintain an efficient overall financing structure. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.

The Company is exposed to market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The objective of the Company''s risk management framework is to manage the above risks and aims to :

- improve financial risk awareness and risk transparency

- identify, control and monitor key risks

- provide management with reliable information on the Company''s risk exposure

- improve financial returns

(i) Market risk

Market risk is the risk that the fair value of financial instrument will fluctuate because of change in market price.

The Company''s activities expose it primarily to interest rate risk, currency risk and other price risk such as equity price risk. The financial instruments affected by market risk includes : Fixed deposits, current investments, borrowings and other current financial liabilities.

(ii) Liquidity risk

The Company requires funds both for short-term operational needs as well as for long-term investment needs.

The Company remains committed to maintaining a healthy liquidity, gearing ratio, deleveraging and strengthening the balance sheet. The maturity profile of the Company''s financial liabilities based on the remaining period from the date of balance sheet to the contractual maturity date is given in the table below. The figures reflect the contractual undiscounted cash obligation of the Company (other than derivative financial liability and lease liabilities).

(iii) Foreign currency risk

Foreign exchange risk comprises of risk that may arise to the Company because of fluctuations in foreign currency exchange rates. Fluctuations in foreign currency exchange rates may have an impact on the Statement of Profit and Loss. As at the year end, the Company was exposed to foreign exchange risk arising from foreign currency payables.

(iv) Interest rate risk

(v) Other price risk

The Company is exposed to price risks arising from fair valuation of Company''s investment in mutual funds. The investments in mutual fund are held for short term purposes.

(vi) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company''s exposure to credit risk primarily arises from trade receivables, balances with banks and security deposits. The credit risk on bank balances is limited because the counterparties are banks with good credit ratings. The Company''s exposure and credit worthiness of its counterparties are continuously monitored.

34. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

35. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

36. The Company is primarily engaged in the business of growing and nurturing business investments in its subsidiary. The investments (financial assets) and dividend income (financial income) on the same has resulted in financial income to be in excess of 50% of its total income and its financial assets to be more than 50% of total assets. The management is of the view supported by legal opinion that the Company is an Unregistered Core Investment Company (Unregistered CIC) as laid down in the "Master Direction - Core Investment Companies (Reserve Bank) Directions, 2016", as amended. Hence, registration under Section 45-IA of the Reserve Bank of India Act, 1934 is not required.

39. The Code on Social Security, 2020 ("Code") relating to employee benefits during employment and post-employment benefits received Presidential assent in September, 2020. The Code has been published in Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

40. Gain/(loss) on fair value changes for the year ended March 31,2021 on derivative financial instruments represents gain/(loss) arising out of the Option arrangements relating to equity shares of Max Life Insurance Company Limited (Max Life), executed during the year ended March 31,2016, amongst the Company, Axis Bank Limited and Mitsui Sumitomo Insurance Company Limited (MSI) and accounted for Fair Value Through Profit or Loss account (FVTPL) in standalone financial statements of the Company as per Ind AS 109.

On March 15, 2021, the Company acquired balance 0.74% equity shares of Max Life from Axis Bank Limited at a price of ''166 per share (being fair value of Max Life determined on the date of transaction). Pursuant to such purchase and termination Letter to the Option Agreement entered among Axis Bank Limited, MSI, Max Life and the Company, balance equity share options of Max Life were cancelled.

41. The Board of Directors of the Company in its meeting held on March 3, 2020, had approved entering into a Put/Call arrangement for acquisition of balance shares held by Mitsui Sumitomo Insurance Company Limited (MSI) in Max Life Insurance Company Limited (''Max Life'') and matters incidental thereto at a price of '' 85 per share ("MSI Put/Call Option"). The shareholders of the Company approved the said MSI Put/Call Option on May 27, 2020.

In this regard the Company had executed definite agreement, which is subject to receipt of requisite regulatory approvals.

During the current year, Max Life had filed an application for approval with IRDAI for acquisition of 99,136,573 equity shares constituting 5.17% equity stake in Max Life (balance shares held by MSI) of Max Life by the Company under MSI Put/Call option. Pending receipt of requisite approvals, the said transaction cannot be considered concluded at the current date and hence, no adjustments have been made in the financial year.

42. The Board of Directors of the Company in its meeting held on April 27, 2020 approved entering into definitive agreements with Axis Bank for the sale of equity share capital of Max Life, a subsidiary of the Company, to Axis Bank, subject to receipt of shareholders'' approval and other requisite regulatory approvals. The shareholders of the Company approved the transaction on June 16, 2020.

On October 30, 2020, the Company, Max Life, Axis Bank and its subsidiaries (together "Axis Entities"), i.e. Axis Capital Limited and Axis Securities Limited ("Axis Bank subsidiaries") entered into agreements for acquisition of upto 19.002% of the equity share capital of Max Life ("Agreements"). Under the Agreements, Axis Bank will acquire upto 9.002% of the equity share capital of Max Life and Axis Bank subsidiaries will acquire upto 3% of the share capital of Max Life. In addition, Axis Entities will have a right to acquire upto 7% of the equity share capital of Max Life, in one or more tranches.

Pursuant to receipt of all the approvals, the Company had transferred 38,376,257 equity shares of '' 10 each of Max Life to Axis Capital Limited and 19,188,128 equity shares of '' 10 each of Max Life to Axis Securities Limited on March 26, 2021, fully paid up at a price of '' 31.51 per share for consideration aggregating to '' 181.39 crores. The weighted average carrying value of such investments was '' 37.22 per share and hence, a loss on sale of investments of '' 32.89 Crores was recorded during the year ended March 31,2021.

On April 6, 2021, the Company transferred 172,731,531 equity shares of '' 10 each of Max Life to Axis Bank, fully paid up at a price of '' 32.12 per share for consideration aggregating to '' 554.81 crores. The Company had accounted for an impairment loss of '' 88.16 crores in the value of such investments during the year ended March 31,2021, being the difference between weighted average carrying value of such investments i.e. '' 37.22 per share and the transaction price. The transaction price of '' 31.51 and '' 32.12 per share, for the aforesaid transfer of shares effected on March 26, 2021 and April 6, 2021 respectively were computed based on the valuation of Max Life conducted as per Rule 11 UA read with Rule 11 UAA of the Income-tax Rules, 1962 (herein referred to as ''Transaction Price''). The methodology of computation of transaction price was approved by 99.90% shareholders through postal ballot and also stated in the definitive agreements entered with Axis Entities.

In respect of right of Axis entities to acquire 7% of equity share capital of Max Life, the Company had executed definitive agreement with the parties, which is subject to receipt of requisite regulatory approvals. Pending receipt of requisite approvals, the said transaction cannot be considered concluded at the current date and hence, no adjustments have been made in the financial year.

43. Estimation of uncertainties relating to COVID-19 global health pandemic:

The Company has assessed the impact of COVID-19 on its operations as well as its standalone financial, including carrying amounts of trade receivables, investments and property, plant and equipment, as at March 31,2022. In assessing the carrying value of these assets, the Company has used internal and external sources of information up to the date of approval of these standalone financial, and based on current estimates, expects the net carrying amount of these assets to be recovered. The Company will continue to closely monitor any material changes to the business and financial due to COVID-19.

Reason for variance:

Current Ratio - higher due to increase in current investments and decrease in trade payables and lease liability

Return on Equity (ROE) - lower due to increase in average shareholder''s equity

Net capital turnover ratio - lower due to increase in current investment and decline in revenue

Net profit ratio - higher due to decline in revenue

Return on Investment(ROI) - higher due to increase in treasury investments

46. Pursuant to sections 135(5) of Companies Act, 2013 and rule made thereunder, the Company need to ensure that at least 2% of average net profit of the preceding three financial years is spent on CSR activities. The Company does not have turnover of rupees one thousand crore or more or a net profit of rupees five crore or more as computed under section 135 of the Act during the immediately preceding financial year and hence, provisions of Section 135 of the Act are not applicable to the Company during the year.

47. No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

48. The Company has not declared or paid any dividend during the year and has not proposed final dividend for the year.

49. The figures for the previous year have been regrouped/reclassified wherever necessary, to make them comparable.

50. The standalone financial statements were approved for issue by the Board of Directors on May 10, 2022.

Mar 31, 2021

Buildings include property owned by the Company, given to a former employee on an operating lease. The former employee has a right to purchase the property at an amount equivalent to the cost of acquisition for the Company. Such right will be settled by way of transfer of property at a future date. Considering the current market value, the management believes that exercising of such right cannot be concluded at the current date.

During the previous year, the Company had recognised impairment loss of Rs. 671.99 lakhs due to decline in value of the property held by the Company, as determined based on the valuation reports obtained by the Company from external certified valuer.

The Company has only one class of equity shares having a par value of Rs. 2 each. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, holder of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(iii) Shares reserved for issuance

As at March 31,2021 - 65,865 (As at March 31,2020 : 154,737) equity shares of Rs. 2 each were reserved For issuance towards outstanding employee stock options granted under Employee Stock Option Plan 2003 (ESOP) of the Company. (See note 29.1).

(iv) The Company has issued 2,648,215 equity shares (As at 31 March, 2020 : 3,006,714) during the period of five years immediately preceding the reporting date on exercise of options granted under the ESOP plan wherein part consideration was received in the form of employee services.

In addition, on December 8, 2020, the Company has issued and allotted 75,458,088 equity shares of face value of Rs. 2 each, fully paid up at a price of Rs. 565.11 per share on a preferential basis to MSI for consideration other than cash, i.e. through swap of 394,775,831 equity shares of Rs. 10 each of Max Life Insurance Company Limited at a price of Rs. 108.02 per share. (See note 43)

(e) During the current year, the Company has received dividend aggregating to Rs. 18,578.09 lakhs from its subsidiary, Max Life Insurance Company Limited. Finance Act, 2020, made amendment in Section 10(34) in the Income Tax Act, 1961, due to which dividend income is not exempt for the Company. Pursuant to such amendment, dividend received by the Company is taxable and accordingly, the Company has recorded provision for current tax of Rs. 3,660.96 lakhs (net of deferred tax adjustment) in the current year. The Company has not opted for reduced new tax regime (reduced corporate tax rate) introduced by the taxation laws (Amendment) Ordinance 2019.

As at March 31, 2020, the Company had recognised deferred tax asset only to the extent of deferred tax liability of Rs. 65.34 Lakhs. The Company has carry forward losses and MAT Credit Entitlement (as per income tax returns of the past years), on which deferred tax asset was not

recognised due to lack of reasonable certainty of Future taxable profits against which such deferred tax asset could be realised. Pursuant to amendment in Finance Act, 2020, the Company has estimated the taxable profits available to allow all or part of the deferred tax assets to be recovered / adjusted and accordingly, accounted For deferred tax asset (including items on which deferred tax asset was not created uptill March 31,2020) as at March 31,2021.

C. Other commitments

(i) The Company through a call/put option has to acquire the remaining shareholding held by MSI at Rs. 85 for every equity share of Rs. 10 each held by MSI in Max Life ("MSI Put/Call Option") (See note 43).

(ii) Axis Entities have a right to acquire upto 7% of the equity share capital of Max Life held by the Company, in one or more tranches (See note 44).

Notes :

a. Based on the discussions with the solicitor/ expert opinions taken/status of the case, the management believes that the Company has strong chances of success in above mentioned cases and hence no provision there against is considered necessary at this point in time as the likelihood of liability devolving on the Company is less than probable.

b. The Company had received notices from National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) in respect of non-compliance with Regulation 17(1) of SEBI (Listing obligations and Disclosure requirements) 2015, pertaining to composition of Board. The Company had deposited Rs. 11.40 lakhs under protest and requested NSE and BSE for waivers. During the current year,

both NSE and BSE has declined the waiver request of the Company and accordingly, the Company has accordingly expensed off the same.

c. Litigation in an erstwhile subsidiary of the Company, Max Telecom Ventures Limited ("MTVL") (since merged with the Company with effect from December 1, 2005) (Also, See note below)

S. No.

Assessment

Year

Brief Description

AY 1998-1999 and AY 19992000

Gains arising from stake sale of shares held by MTVL in Hutchison Max telecom Limited ["HMTL''j during AY 1998-99 (1st stake sale) amounting to Rs. 47,493.09 Lakhs, were returned as capital gains and claimed as tax exempt under Section 10(23G) of the Act. The said exemption claim made by MTVL was denied to it by the Assessing Officer, but subsequently allowed in favour of MTVL by the CIT(A), which is currently being contested by the Department before the ITAT, Amritsar. Further, a Writ petition filed by MTVL, is also pending before the Hon''ble Punjab & Haryana High Court on the action of ITAT of recalling its own order passed in relation to appeal filed by MTVL on the issue of the year of taxability of the stake sale being AY 1999-2000 and not AY 1998-1999.

In AY 1999-00, the above-mentioned stake sale transaction was once again brought to tax on a protective basis by the Assessing Officer, as MTVL had claimed that the transaction pertained to AY 1999-2000 and not AY 1998-1999. The issue was once again held in favour of MTVL by the CIT(A), against which the Department is into appeal before the ITAT, Amritsar, which is pending as on date.

AY 2006-2007

In AY 2006-2007, the Assessing Officer proceeded to tax the gains arising from sale of balance shares held by MTVL in HMTL (2nd stake sale) amounting to Rs. 41,153.88 lakhs as business income and denying the capital gains exemption u/s 10(23G) in the hands of MTVL, an entity which by that time had merged with the Company and hence, had ceased to exist. The issue of assessment being made in the name of non-existant entity has since been allowed in favour of the Company and is now pending as Department''s appeal before the Hon''ble Punjab & Haryana High Court.

Subsequently reassessment proceedings were again initiated under Section 147 r.w.s 148 of the Act by the Department and the assessment was framed on the Company, as successor of MTVL, denying the capital gains exemption u/s 10(23G). In further appeal, the CIT(A) decided the issue in favour of the Assessee and currently the matter is pending before the ITAT, Amritsar. Assessee has also filed cross objections on the technical issue of validity of reassessment proceedings initiated under Section 148 of the Act before ITAT, Amritsar.

In March 2020, the Company had filed application(s) with the income tax authorities under the ''The Direct Tax Vivad se Vishwas Act, 2020'' (''the Scheme''), enacted vide the Gazette of India on March

17, 2020 regarding settlement of the ongoing tax litigation pertaining to Telecom stake sale made by its erstwhile subsidiary Max Telecom Ventures Limited (since merged with the Company w.e.f December 1, 2005). The said litigation was being contested both by the Company and the Income Tax Department for multiple years and pending before various Appellate Authorities, which were previously disclosed as contingent liabilities.

The settlement proposed by the Company under the Scheme has been accepted by the Tax Department for all the years under dispute viz. Assessment Years 1998-99, 1999-2000 and 200607. The Company had made a provision of Rs. 12,378.21 lakhs for the same disclosed as ''current tax'' during the year ended March 31, 2020 and the same was paid in May 2020. During the year ended March 31, 2021, the Company has received final orders of settlement and an intimation to pay Rs. 247.79 lakhs towards full and final settlement for Assessment Year 2006-07. The same was paid in the month of September, 2020 and has been disclosed as ''current tax''.

26. Segment information

27. Employee benefit plans Defined benefit plans A Gratuity:

The gratuity plan typically exposes the Company to actuarial risks such as: interest rate risk, longevity risk and salary risk.

Interest risk

A decrease in the bond interest rate will increase the plan liability.

Longevity risk

Salary risk

No other post-retirement benefits are provided to these employees

In respect of the plan in India, the most recent actuarial valuation of the present value of the defined benefit obligation was carried out as at March 31, 2021 by Manohar Lal Sodhi, Consulting Actuary, Fellow of the Institute of Actuaries of India. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

(g) Significant actuarial assumptions For the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

i) If the discount rate is 100 basis points higher (lower), the defined benefit obligation would decrease by Rs. 15.57 lakhs (increase by Rs. 17.23 lakhs) [as at 31 March, 2020: decrease by Rs. 11.29 lakhs (increase by Rs. 12.43 lakhs)].

ii) If the expected salary growth increases (decreases) by 1.00%, the defined benefit obligation would increase by Rs. 16.48 lakhs (decrease by Rs. 15.22 lakhs) [as at 31 March, 2020: increase by Rs. 11.90 lakhs (decrease by Rs. 11.04 lakhs)].

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting

period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

(h) The average duration of the benefit obligation represents average duration for active members at March 31, 2021: 10.80 years (as at March 31, 2020: 11.33 years).

B Provident Fund:

The Company is contributing in a provident fund trust "Max Financial Services Limited Employees Provident Fund Trust" which is a common fund for Max Group companies. The provident fund trust requires that interest shortfall shall be met by the employer, accordingly it has been considered as a defined benefit plan.

29 Employee Stock Option Plan29.1 Employee Stock Option Plan - 2003 (âthe 2003 Plan"):

For the current year, the weighted average share price at the exercise date was Rs. 525.56 (Previous year: Rs. 509.29).

The weighted average exercise price for stock options outstanding as at March 31, 2021 was Rs. 2.00 per share (March 31,2020: Rs 352.94 per share).

The weighted average remaining contractual life for the stock options outstanding as at March 31,2021 is 1.40 years (March 31,2020: 0.66 years). The range of exercise prices for options outstanding at the end of the year was 382.40 to 404.45 (March 31, 2020: 2.00 to 404.45).

The expected life of the stock is based on historical data and current expectations and is not necessarily

indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.

29.2 Employees Phantom Stock Plans (PSP Plans)

The Company had instituted PSP Plans, which were approved by the Board of Directors. The PSP Plans provide for issue of units to eligible employees of the Compay. Under the Plans, eligible employees receive cash equivalent to fair market value of units upon completion of vesting conditions, as administered by the Nomination and Remuneration Committee including rendering of services across vesting period. Vesting period ranges from 1 to 4 years.

30. Leases

Effective April 1,2019, the Company had adopted Ind AS 116 ""Leases"", applied to all lease contracts existing on April 1,2019 using the modified retrospective method along with the transition option to recognise Right-of-use assets (ROU) at an amount equal to the lease liabilities. The Company recorded the lease liabilities at the present value of the lease payments discounted at the incremental borrowing rate and the right of use asset at its carrying amount as if the standard had been applied since the commencement date of the lease. Consequently, the nature of expenses in respect of Operating Leases had changed from lease rent to

depreciation cost For the ROU assets and finance cost For the interest accrued on lease liabilities.

The Company has entered into short term lease arrangements For certian Facilities and office premises. Rent expense of Rs. 149.62 lakhs (March 31, 2020: Rs. 230.18 lakhs) in respect of obligation under cancellable operating leases has been charged to the Statement of Profit and Loss for these short term lease arrangements.

Company as a Lessor

The Company has entered into agreements of leasing out the properties. These are in the nature of operating leases and lease arrangements contain provisions for renewal. The total lease income in respect of such lease recognised in Statement of Profit and Loss for the year ended March 31, 2021 is Rs. 45.45 lakhs (March 31, 2020: Rs. 46.68 lakhs).

33. Financial Instruments(a) Capital management

The capital management objectives of the Company are:

- to ensure that the Company complies with externally imposed capital requirements and maintains strong credit ability and healthy capital ratios

- to ensure the ability to continue as a going concern

- to provide an adequate return to shareholders

(b) Financial risk management objective and policies Financial assets and liabilities:

The accounting classification of each category of financial instruments, and their carrying amounts, are set out below:

The Company is exposed to market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The objective of the Company''s risk management framework is to manage the above risks and aims to:

- improve financial risk awareness and risk transparency

- identify, control and monitor key risks

- provide management with reliable information on the Company''s risk exposure

- improve financial returns

(i) Market risk

Market risk is the risk that the Fair value of financial instrument will fluctuate because of change in market price.

(ii) Liquidity risk

The Company requires funds both for short-term operational needs as well as for long-term investment needs.

(iii) Foreign currency risk

Foreign exchange risk comprises of risk that may arise to the Company because of fluctuations in Foreign currency exchange rates. Fluctuations in Foreign currency exchange rates may have an impact on the Statement of Profit and Loss. As at the year end, the Company was exposed to Foreign exchange risk arising From Foreign currency payables.

(iv) Interest rate risk

(v) Other price risk

The Company is exposed to price risks arising From Fair valuation of Company''s investment in mutual Funds. The investments in mutual Fund are held For short term purposes.

(vi) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company''s exposure to credit risk primarily arises From trade receivables, balances with banks and security deposits. The credit risk on bank balances is limited because the counterparties are banks with good credit ratings. The Company''s exposure and credit worthiness oF its counterparties are continuously monitored.

36. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

37. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

38. The Company is primarily engaged in the business of growing and nurturing business investments in its subsidiary. The investments (financial assets) and dividend income (financial income) on the same has resulted in financial income to be in excess of 50% of its total income and its financial assets to be more than 50% of total assets. The management is of the view supported by legal opinion that the Company is an Unregistered Core Investment Company (Unregistered CIC) as laid down in the "Master Direction - Core Investment Companies (Reserve Bank) Directions, 2016", as amended. Hence, registration under Section 45-IA of the Reserve Bank of India Act, 1934 is not required.

41. The Code on Social Security, 2020 ("Code") relating to employee benefits during employment and postemployment benefits received Presidential assent in September, 2020. The Code has been published in Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

42. Gain/(loss) on fair value changes on derivative financial instruments represents gain/(loss) arising out of the Option arrangements relating to equity shares of Max Life Insurance Company Limited (Max Life), executed during the year ended March 31, 2016, amongst the Company, Axis Bank Limited and Mitsui

Sumitomo Insurance Company Limited (MSI) and accounted For Fair Value Through Profit or Loss account (FVTPL) in standalone financial statements of the Company as per Ind AS 109.

On March 15, 2021, the Company has acquired 0.74% equity shares (previous year : 0.74% equity shares) of Max Life from Axis Bank Limited at a price of Rs. 166 per share (being fair value of Max Life determined on the date of transaction). Pursuant to such purchase and termination Letter to the Option Agreement entered among Axis Bank Limited, MSI, Max Life and the Company, balance equity share options of Max Life have been cancelled.

Necessary adjustments are made against the option value in the books of account and balance is restated at the end of each year.

43. The Board of Directors of the Company in its meeting held on March 3, 2020, had considered and approved the issuance and allotment of up to 75,458,088 equity shares of the Company of face value of Rs. 2 each, fully paid up, on a preferential basis to Mitsui Sumitomo Insurance Company Limited (MSI) for consideration other than cash, i.e. through swap of 394,775,831 equity shares of Rs. 10 each of Max Life Insurance Company Limited (''Max Life'')["MSI Swap"], based on the valuation report obtained by the Company in accordance with applicable laws. In addition, the Company through a call/put option has to acquire the remaining shareholding held by MSI at Rs. 85 for every equity share of Rs. 10 each held by MSI in Max Life ("MSI Put/Call Option"). The shareholders of the Company approved the said MSI Swap and MSI Put/Call Option on May 27, 2020.

The Company had received approvals from all requisite regulatory authorities for MSI Swap as of November 27, 2020, namely Competition Commission of India, the stock exchanges, Department of Economic Affairs (''DEA'') and Insurance Regulatory and Development Authority of India (''IRDAI''). Pursuant to receipt of all the approvals, the Company has allotted 75,458,088 equity shares of face value of Rs. 2 each, fully paid up at a price of Rs. 565.11 per share on a preferential basis to MSI for consideration other than cash, i.e. through swap of 394,775,831 equity shares of Rs. 10 each of Max Life at a price of Rs. 108.02 on December 8, 2020. Post the MSI Swap transaction, MSI holds 21.87% equity shares of the Company and the Company''s investment in equity shares of Max Life has increased from 72.52% to 93.10%. Further, Mr. Hideaki Nomura and Mr. Mitsuru Yasuda, nominees of MSI, were appointed as non- executive nonindependent additional directors of the Company.

In respect of MSI Put/Call Option, the Company had executed definitive agreement with the parties, which is subject to receipt of requisite regulatory approvals. Subsequent to the year end, the Company has filed an application for approval with IRDAI for acquisition of 99,136,573 equity shares of Max Life held by MSI constituting 5.17% equity stake in Max Life under MSI Put/Call option. Pending receipt of requisite approvals, the said transaction cannot be considered concluded at the current date and hence, no adjustments have been made in the standalone financial statements.

44. On February 20, 2020, the Company and Axis Bank Limited (''Axis Bank'') executed Confidentiality and Exclusivity Agreement to explore a long-term strategic partnership. The Board of Directors of the Company in its meeting held on April 27, 2020 approved entering into definitive agreements with Axis Bank for the sale of 29% of the equity share capital of Max Life Insurance Company Limited (''Max Life''), a material subsidiary of the Company, to Axis Bank, subject to receipt of shareholders'' approval and other requisite regulatory approval. The shareholders of the Company approved the transaction on June 16, 2020.

Application for approval of Insurance Regulatory and Development Authority of India (''IRDAI'') was submitted on May 20, 2020. Based on correspondence with RBI and IRDAI, the Company, Max Life, and Axis Bank made certain changes to the agreements, subject to regulatory approvals and as maybe permitted under applicable laws. On August 24, 2020, the Company, Max Life, and Axis Bank executed revised agreements whereby the Axis Bank proposed to acquire 17.002% of the equity share capital of Max Life and submitted fresh proposal with the regulators. Further, in response to Axis Bank''s application for directly acquiring 17.002% of the equity share capital of Max Life, the Reserve Bank of India has advised Axis Bank to be guided by Para 5(b) of Master Direction - Reserve Bank of India (Financial Services provided by Banks) Directions, 2016 dated May 26, 2016 as updated from time to time ("Para 5(b)"). Pursuant to Para 5(b), Axis Bank and its subsidiaries (together "Axis Entities"), i.e. Axis Capital Limited and Axis Securities Limited ("Axis Bank subsidiaries"), on October 30, 2020 entered into revised agreements with the Company for acquisition of upto 19.002% of the equity share capital of Max Life ("Revised Agreements"). Under the Revised Agreements, Axis Bank will acquire upto 9.002% of the equity share capital of Max Life and Axis Bank subsidiaries will acquire upto 3% of the share capital of Max Life. In addition, Axis Entities will have a right to acquire upto 7% of the equity share capital of Max Life, in one or more tranches. The Revised Agreements supersedes the previous agreements entered between the parties.

In this regard, Max Life has received approval from IRDAI vide its letter dated February 24, 2021 granting approval for transfer of 12.002% equity shares of Max Life held by the Company to Axis Entities, as promoters. Pursuant to receipt of all the approvals, the Company has transferred 38,376,257 equity shares of Rs. 10 each of Max Life to Axis Capital Limited and 19,188,128 equity shares of Rs. 10 each of Max Life to Axis Securities Limited on March 26, 2021, fully paid up at a price of Rs. 31.51 per share for consideration aggregating to Rs. 18,138.54 lakhs. The weighted average carrying value of such investments was Rs. 37.22 per share and hence, a loss on sale of investments of Rs. 3,289.17 lakhs has been recorded in the current year.

On April 6, 2021, the Company has transferred 172,731,531 equity shares of Rs. 10 each of Max Life to Axis Bank, fully paid up at a price of Rs. 32.12 per share for consideration aggregating to Rs. 55,481.37 lakhs. Consequently, the Company has accounted for an impairment loss of Rs. 8,816.05 lakhs in the value of such investments in the current year, being the difference between weighted average carrying value of such investments i.e. Rs. 37.22 per share and the transaction price.

The transaction price of Rs. 31.51 and Rs. 32.12 per share is computed based on the valuation of Max Life conducted as per Rule 11 UA read with Rule 11 UAA of the Income-tax Rules, 1962 (herein referred to as ''Transaction Price''). The methodology of computation of transaction price was approved by 99.90% shareholders through postal ballot and also stated in the definitive agreements entered with Axis Entities.

Post the Axis Bank stake sale transaction, Axis Entities hold 13% equity shares of Max Life and the Company''s investment in equity shares of Max Life has decreased from 90.83% to 81.83%.

45. Estimation of uncertainties relating to COVID-19 global health pandemic:

The Company has considered the impact of COVID-19 on its operations as well as its standalone financial

statements, including carrying amounts of trade receivables, investments, property, plant and equipment and other assets, as at March 31, 2021. In assessing the carrying value of these assets, the Company has used internal and external sources of information up to the date of approval of these standalone financial statements, and based on current estimates, expects the net carrying amount of these assets will be recovered. The Company will continue to closely monitor any material changes to the business and financial statements due to COVID-19, wherever required.

46. Expenditure on Corporate Social Responsibility (CSR)

a. Gross amount required to be spent by the Company during the year ended March 31, 2021 is Rs. Nil (Previous year Rs. Nil).

b. Amount spent during the year ended March 31, 2021 is Rs. Nil (Previous year Rs. Nil)

47. The figures for the previous year have been regrouped/ reclassified wherever necessary, to make them comparable.

48. The standalone financial statements were approved for issue by the Board of Directors on June 8, 2021.

Mar 31, 2018

Notes :

a. Claims against the Company not acknowledged as debts represent the cases pending with judicial forums / authorities. Based on management estimation and opinions from legal advisors, management believes that its position is likely to be upheld in appellate process. No tax has been accrued in the financial statements for tax / legal case demands. The management believes that the ultimate outcome of the proceedings will not have material adverse effect on the Company''s financial position and result of operations.

b. The Company has not made any provision for the demands in service tax cases as the Company believes that they have a good case based on existing judicial pronouncements. Advance paid against the same is Rs. 12.00 lakhs (previous year: Rs. 12.00 lakhs).

c. Income tax cases represent the cases pending with income tax authorities / appellate authorities. Based on management estimation, future cash outflow in respect of these cases are determinable only on receipt of judgments / decisions pending with various courts / authorities. The Company has not made any provision for the demands in income tax cases as the Company believes that they have a good case based on existing judicial pronouncements.

d. During the year 2006, the Ministry of Corporate Affairs had carried out an inspection, wherein certain technical offences were alleged by the Inspection Officer based on which prosecution proceedings were initiated against the Company, its erstwhile Whole-time Directors and the Company Secretary at Chief Judicial Magistrate, Chandigarh. The Company filed writ petition against the prosecution proceedings with the Hon''ble High Court of Punjab and Haryana. The High Court stayed the proceedings and listed the case for arguments.

e. Litigation in an erstwhile subsidiary of the Company, Max Telecom Ventures Limited ("MTVL") (since merged with the Company with effect from December 1, 2005)

25. Retirement benefit plans

(i) Defined contribution plans

The Company makes provident fund contribution to a defined contribution retirement benefit plan for eligible employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions as specified under the law are paid to the provident fund trust set up by the Company. The Company is liable for annual contributions and any deficiency in interest cost compared to interest computed based on the rate of interest declared by the Central Government under the Employees'' Provident Fund Scheme, 1952 ("Scheme") and recognizes as an expense in the year it is determined.

As of 31 March, 2018, the fair value of the assets of the fund and the accumulated members'' corpus is Rs. 1,772.54 lakhs (previous year: Rs. 1,540.89 lakhs) and Rs. 1,748.07 lakhs (previous year: Rs. 1,521.10 lakhs) respectively. In accordance with an actuarial valuation, there is no deficiency in the interest cost as the present value of the expected future earnings on the fund is greater than the expected amount to be credited to the individual members based on the expected guaranteed rate of interest of 8.55% (previous year: 8.65%). The actuarial assumptions include discount rate of 7.18% (Previous year: 6.67%) and an average expected future period of 27.11 years (previous year: 27.11 years).

The Company recognized Rs. 93.82 lakhs (previous year: Rs. 84.05 lakhs) for provident fund contribution in the Statement of Profit and Loss. The contributions payable to the plan by the Company is at the rates specified in rules to the Scheme.

(ii) Defined benefit plans

The following tables set out the funded status of the defined benefit scheme and amounts recognized in the Company financial statements as at March 31, 2018:

Notes:

a. The discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of obligations.

b. The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

c. The planned assets of the Company are managed by the Life Insurance Corporation of India in terms of an insurance policy taken to fund obligations of the Company with respect to its gratuity plan. Information on categories of plan assets is not available with the Company.

d. Experience on actuarial gain/(loss) for benefit obligations and plan assets:

1. Employee Stock Option Plan

1 Employee Stock Option Plan - 2003 ("the 2003 Plan"):

The Company had instituted the 2003 Plan, which was approved by the Board of Directors in August 25, 2003 and by the shareholders in September 30, 2003. The 2003 Plan provides for grant of stock options aggregating not more than 5% of number of issued equity shares of the Company to eligible employees of the Company. The 2003 Plan is administered by the Nomination and Remuneration Committee appointed by the Board of Directors. Under the plan, the employees receive shares of the Company upon completion of vesting conditions such as rendering of services across vesting period. Vesting period ranges from one to five years and options can be exercised within two years from vesting date. As amended in the 2003 Plan and approved the shareholders in Annual General Meeting held on September 30, 2014, the Option Price will be determined by the Nomination and Remuneration Committee, from time to time, in accordance with the provisions of applicable law, provided that the Option Price shall not be below the face value of the equity shares of the Company.

For the period, the weighted average share price at the exercise date was Rs. 601.93 (previous year: Rs. 531.30)

The weighted average remaining contractual life for the stock options outstanding as at March 31, 2018 is 1.14 years (March 31, 2017: 1.63 years). The range of exercise prices for options outstanding at the end of the year was 2.00 to 311.34 (March 31, 2017: 2.00 to 311.34).

Stock compensation expense under the Fair Value method has been determined based on fair value of the stock options. The fair value of stock options was determined using the Black Scholes option pricing model with the following assumptions.

3. Employees Phantom Stock Plans (PSP Plans)

For the period, the weighted average share price at the exercise date was Rs. 765.90 (previous year: Rs. Nil)

The weighted average remaining contractual life for the stock options outstanding as at March 31, 2018 is 1.00 years (March 31, 2017: 1.59 years).

Stock compensation expense under the fair value method has been determined based on fair value of the stock options. The fair value of stock options was determined using the Black Scholes option pricing model with the following assumptions.

4. Leases

The Company has entered into operating lease arrangements for certian facilities and office premises. Rent expense of Rs. 378.22 lakhs (previous year Rs. 313.35 lakhs) in respect of obligation under cancellable operating leases has been charged to the Statement of Profit and Loss.

5. Segment Reporting

Being a holding company, the Company is having business investments and is primarily engaged in growing and nurturing the business investments and providing management advisory services to group companies. Accordingly, the Company views these activities as one business segment, therefore there are no separate reportable segments as per Accounting Standard 17 prescribed under Section 133 of the Companies Act, 2013.

6. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

7. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

8. The Company is primarily engaged in the business of making business investment in its subsidiaries. The investments (financial assets) and dividend income (financial income) on the same has resulted in financial income to be in excess of 50% of its total income and its financial assets to be more than 50% of total assets. The Company is of the view supported by legal opinion that the Company is a ''Core Investment Company'' (''CIC'') and does not meet the criteria for Systemically Important Core Investment Company (''CIC-SI'') as laid down in the CIC Master Circular dated July 1, 2015. Hence, registration under Section 45-IA of the Reserve Bank of India Act, 1934 is not required.

9. In terms of Companies (Indian Accounting Standards) Rules 2015, as amended, the Non Banking Finance Companies (NBFCs), including Core Investment Companies (CIC), having a net worth of Rs. 500 crores or more are required to prepare Ind-AS based financial statements for accounting periods beginning on or after April 1, 2018 with comparatives for the periods ending March 31, 2018 or thereafter. Hence, the current financials have been drawn in accordance with Indian GAAP as Ind-AS provisions are not applicable to the Company for the current accounting year, the Company being a Core Investment Company (non-systemically important CIC) under the Non Banking Finance Company (NBFC) rules as defined under the RBI Act, 1934.

10. The previous year''s figures have been regrouped / reclassified, wherever necessary to correspond with the current year''s classification / disclosure.

Mar 31, 2017

1. Corporate information

Max Financial Services Limited [formerly known as MAX INDIA LIMITED] (âthe Companyâ) is a public company domiciled in India. Its shares are listed on two stock exchanges in India. The Company is primarily engaged in making business investment in its subsidiary and providing management advisory services to the group companies.

The name of the Company has been changed from MAX INDIA LIMITED to Max Financial Services Limited with effect from February 1, 2016.

2. Share capital

Refer note (i) to (v) below

(i) Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period:

(ii) The Company has only one class of equity shares having a par value of Rs. 2 each. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, holder of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(iii) Details of shares held by each shareholder holding more than 5% shares:

(iv) shares reserved for issuance

As at March 31, 2017 22,46,745 (previous year: 25,03,560) shares of Rs. 2 each were reserved for issuance towards outstanding employee stock options granted under Employee Stock Option Plan 2003 (ESOP) of the Company. (Refer note 28.1)

(v) Aggregate number of share issued for consideration other than cash during the period of five years immediately preceding the reporting date

The Company has issued total 2,700,939 shares (previous year: 2,419,889 shares) during the period of five years immediately preceding the reporting date on exercise of options granted under the ESOP plan wherein part consideration was received in the form of employees services.

3. Reserves and surplus

* During the previous year ended, the corporate dividend tax paid by the Max Life Insurance Company Limited (subsidiary company) on dividend paid to the Company was in excess of companyâs obligation of corporate dividend tax on dividend paid/declared by the Company. Accordingly, the Company has taken credit of corporate dividend tax as per section 115O of the Income Tax Act, 1961 and no provision of corporate dividend tax has been recognised in the financial statements.

4. Deferred tax liabilities (net)

The Company has carried out its tax computation in accordance with the mandatory standard on accounting, Accounting Standard 22 âAccounting for Taxes on Incomeâ. In view of absence of virtual certainty of realisation of unabsorbed tax losses, deferred tax assets have been recognised only to the extent of deferred tax liabilities. The major components of deferred tax assets / liabilities as recognised in the financial statements are as follows:

Note :

a. Claims against the Company not acknowledged as debts represent the cases pending with judicial forums / authorities. Based on management estimation and opinions from legal advisors, management believes that its position will likely to be upheld in appellate process. The Company has not made any provisions for the demand since the management believes that the ultimate outcome of the proceedings will not have material adverse effect on the Companyâs financial position and result of operations.

b. The Company has not made any provision for the demands in service tax cases as the Company believes that they have a good case based on existing judicial pronouncements. The advance paid against the same is Rs. 12.00 Lacs (Previous year: Rs. 12.00 Lacs).

c. During the year 2006, the Ministry of Corporate Affairs had carried out an inspection, wherein certain technical offences were alleged by the Inspection Officer based on which prosecution proceedings were initiated against the Company, its erstwhile Whole-time Directors and the Company Secretary at Chief Judicial Magistrate, Chandigarh. The Company filed writ petition against the prosecution proceedings with the Honâble High Court of Punjab and Haryana. The High Court stayed the proceedings and listed the case for arguments.

d. Income tax cases represent the cases pending with income tax authorities/appellate authorities. Based on management estimation, future cash outflow in respect of these cases are determinable only on receipt of judgments / decisions pending with various courts/authorities. The Company has not made any provision for the demands in income tax cases as the Company believes that they have a good case based on existing judicial pronouncements.

e. Litigation in an erstwhile subsidiary of the Company, Max Telecom Ventures Limited (âMTVLâ) (since merged with the Company with effect from December 1, 2005)

5. Retirement benefit plans

(i) Defined contribution plans

The Company makes provident fund contribution to a defined contribution retirement benefit plan for eligible employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions as specified under the law are paid to the provident fund trust set up by the Company. The Company is liable for annual contributions and any deficiency in interest cost compared to interest computed based on the rate of interest declared by the Central Government under the Employeesâ Provident Fund Scheme, 1952 and recognises, if any, as an expense in the year it is determined.

As of 31 March, 2017, the fair value of the assets of the fund and the accumulated membersâ corpus is Rs. 37,607.05 lacs (previous year: Rs. 33,513.81 lacs) and Rs. 37,042.76 lacs (previous year: Rs. 33,280.53 lacs) respectively. In accordance with an actuarial valuation, there is no deficiency in the interest cost as the present value of the expected future earnings on the fund is greater than the expected amount to be credited to the individual members based on the expected guaranteed rate of interest of 8.65% (previous year: 8.75%). The actuarial assumptions include discount rate of 6.67% (previous year: 8.75%) and an average expected future period of 27.11 years (previous year: 26.80 years).

The Company has recognised Rs. 84.05 lacs (previous year: Rs. 73.73 lacs) for provident fund contribution in the Statement of Profit and Loss. The contribution payable to the plan by the Company is at the rates specified in rules to the scheme.

(ii) Defined benefit plans

The Company makes annual contribution to the Employees Gratuity Fund maintained with Life Insurance Corporation of India, a funded defined benefit plan for eligible employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of 6 months. Vesting occurs upon completion of 5 years of service.

a. The discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of obligations.

b. The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

d. Experience on actuarial gain/(loss) for benefit obligations and plan assets:

6. Employee Stock Option Plan

6.1. Employee Stock Option Plan - 2003 (âthe 2003 Planâ):

The weighted average remaining contractual life for the stock options outstanding as at March 31, 2017 is 1.63 years (March 31, 2016: 1.69 years). The range of exercise prices for options outstanding at the end of the year was 2.00 to 394.00 (March 31, 2016: 2.00 to 394.00).

6.2 Employees Phantom Stock Plan (PSP Plan)

The Company had instituted the PSP Plan, which was approved by the Board of Directors in January 15, 2016. The PSP Plan provides for issue of units to eligible employees of the Company. The PSP Plan is administered by the Nomination and Remuneration Committee approved by the Board of Directors. Under the Plan, eligible employee receives cash equivalent to fair market value of units upon completion of vesting conditions such as rendering of services across vesting period. Vesting period ranges from 1 to 5 years.

Accordingly Rs. 380.42 Lacs (previous year: Rs. Nil) has been accrued as expense in the Statement of Profit and Loss account as applicable. The details of the units granted during the year are as under:

For the period, the weighted average share price at the exercise date was Rs. Nil (previous year: Rs. Nil)

The weighted average remaining contractual life for the stock options outstanding as at March 31, 2017 is 1.59 years (March 31, 2016: Nil).

The Company measures the cost of ESOP and PSP using intrinsic value method. Had the company used the fair value model to determine compensation, its profit after tax and EPS as reported would have changed to amount indicated below:

7. Leases

The Company has entered into operating lease arrangements for certian facilities and office premises. Rent expense of Rs. 313.35 lacs (previous year Rs. 293.73 lacs) in respect of obligation under cancellable operating leases has been charged to the Statement of Profit and Loss.

8. Segment Reporting

9. The Board of Directors of the Company approved a composite scheme of amalgamation and arrangement on August 8, 2016 (âProposed Schemeâ), which inter-alia contemplates (a) merger of the Companyâs subsidiary, viz. Max Life Insurance Company Limited (âMax Lifeâ) with the Company (with a share exchange ratio of one share of the Company for approximately five shares held in Max Life for shareholders other than the Company); (b) demerger of the life insurance undertaking of the Company and merger of the said undertaking with HDFC Standard Life Insurance Company Limited (âHDFC Lifeâ) (share exchange ratio of approximately seven shares of HDFC Life for every three shares held in the Company); and (c) merger of the Company (holding the non-life insurance business) with Max India Limited (with a share exchange ratio of one share of Max India Limited for 500 shares held in the Company).

The parties to the Proposed Scheme have applied for various regulatory approvals as required for the Proposed Scheme.

On November 11, 2016, Insurance Regulatory and Development Authority of India (âIRDAIâ) issued a letter raising concerns over the Proposed Scheme in its current form. Max Life has made representation to the IRDAI in this regard and awaits a response from IRDAI.

10. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

11. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

12. The Board of Directors of Max Financial Services Limited (âthe Companyâ/erstwhile âMax India Limitedâ) in their meeting held on January 27, 2015 had approved the Corporate Restructuring plan to vertically split the Company through a Composite scheme of arrangement (âSchemeâ), into three separate listed companies.

The Honâble High Court of Punjab and Haryana vide its order dated December 14, 2015, had sanctioned the Scheme under Sections 391 to 394 read with Sections 100 to 104 of the Companies Act, 1956 between Max Financial Services Limited (âMFSLâ) (âthe Companyâ/ erstwhile Max India Limited), Max India Limited (âMAXâ - erstwhile Taurus Ventures Limited) and Max Ventures and Industries Limited (âMVILâ - erstwhile Capricorn Ventures Limited) and their respective shareholders and creditors for transfer of all the assets and liabilities pertaining to each of the demerged undertakings (i.e MAX and MVIL) with effect from April 1, 2015 (Appointed date). The Scheme is effective from January 15, 2016 i.e. the date of filing of the certified copy of the order of the Honâble High Court of Punjab and Haryana with the Registrar of Companies, Chandigarh and Shimla.

Upon the scheme becoming effective, the authorised share capital of the Company was authomatically reduced to Rs. 60,00,00,000 (Rupees sixty Crores), as on the Effective Date, without any further act or deed. The entire authorised share capital of the Company had been classified as equity share capital.

In terms of the Scheme, MAX and MVIL are required to issue and allot shares to each member of the Company, whose name is recorded in the register of members and records of the Company, as on the Record Date i.e. January 28, 2016 in the following ratio:

- One equity share of Rs. 2 each in MAX for every one equity share of Rs. 2 each held by equity shareholders in the Company;

- One equity share of Rs. 10 each in MVIL for every five equity shares of Rs. 2 each held by equity shareholders in the Company.

The value of net assets transferred effective from April 1, 2015 had been adjusted in Reserves and surplus of the Company. The details of net assets transferred and adjustment to Reserve and Surplus is as under:

Post receipt of approval from the Foreign Investment Promotion Board (FIPB), vide its letter dated February 19, 2016, MVIL had issued and allotted the shares to the Companyâs shareholders as on the record date i.e. January 28, 2016. MVIL had issued and allotted 5,33,96,800 equity shares of Rs. 10 each on March 7, 2016 and the existing equity capital of MVIL of Rs. 5 lacs which was fully held by the Company, had been cancelled pursuant to the provisions of the Scheme.

During the previous year, MAX had received the approval from the Foreign Investment Promotion Board (FIPB), vide its letter dated May 06, 2016 to issue and allot shares to the Companyâs shareholders as on the record date i.e. January 28, 2016. MAX had issued and allotted 26,69,83,999 equity shares of Rs. 2 each on May 14, 2016 and the existing equity capital of MAX of Rs. 5 lacs which was fully held by the Company, had been cancelled pursuant to the provisions of the Scheme.

Further, with respect to employeeâs stock options granted by the Company to its employees (irrespective of whether they continue to be employees of the Company or become employees of MAX/MVIL) each option holder has been allotted stock option by MAX/MVIL under the new ESOP scheme for every stock option held in the Company. Accordingly, ESOP outstanding as on the Effective Date (i.e January 15, 2016) in the Company was allocated between the Company, MAX and MVIL.

13. The Board of Directors of the Company in its meeting held on October 23, 2015 had approved the proposal to transfer certain equity shares of Max Life Insurance Company Limited (âMLICâ) held by the Company to Axis Bank Limited (âAxisâ) (along with Mitsui Sumitomo Insurance Company Limited (âMSIâ)), subject to approval from Insurance Regulatory and Development Authority of India (âIRDAIâ). On February 29, 2016 (pursuant to receipt of approval from IRDAI), the Company and Mitsui Sumitomo Insurance Company Limited (MSI) had transferred 76,560,635 equity shares (3.99% of equity stake in MLIC) and 19,188,127 equity shares (1% of equity stake in MLIC) respectively of MLIC to Axis Bank at face value of Rs. 10 per equity share. Consequent to this transaction, the equity stake of the Company in MLIC had reduced to 68.01%. Further, the Company along with MSI had entered into an Option agreement with Axis on October 23, 2015, whereby the Company and MSI have agreed to offer a âput optionâ to Axis and Axis had agreed to grant âcall optionâ to repurchase / sell the aforesaid equity shares in the ratio as mutually agreed upon between MSI and the Company in 5 equal tranches at a price linked to fair market value.

During the year, the Company acquired 19,150,000 equity shares of Max Life Insurance Company Limited (âMLICâ) at a consideration of Rs. 14,650 lacs from Infrastructure Development Finance Company Limited (âIDFCâ) and 19,150,000 equity shares of MLIC at a consideration of Rs. 21,256 lacs from Axis Bank Limited, thereby increasing its stake in MLIC from 68.01% to 70.01%.

14. The Company is primarily engaged in the business of making business investment in its subsidiaries. The investments (financial assets) and dividend income (financial income) on the same has resulted in financial income to be in excess of 50% of its total income and its financial assets to be more than 50% of total assets. The Company is of the view supported by legal opinion that the Company is a âCore Investment Companyâ (âCICâ) and does not meet the criteria for Systemically Important Core Investment Company (âCIC-SIâ) as laid down in the CIC Master Circular dated July 1, 2015. Hence, registration under Section 45-IA of the Reserve Bank of India Act, 1934 is not required.

15. In terms of Companies (Indian Accounting Standards) Rules 2015, as amended, the Non Banking Finance Companies (NBFCs), including Core Investment Companies (CIC), having a net worth of Rs 500 crores or more are required to prepare Ind-AS based financial statements for accounting periods beginning on or after April 1, 2018 with comparatives for the periods ending March 31, 2018 or thereafter. Hence, the current financials have been drawn in accordance with Indian GAAP as Ind-AS provisions are not applicable to the Company for the current accounting year, the Company being a Core Investment Company (non-systemically important CIC).

16. Payment to auditor (excluding service tax) (included in legal and professional)

17. The previous yearâs figures have been regrouped / reclassified, wherever necessary to correspond with the current yearâs classification / disclosure.

Mar 31, 2016

(i) The Company has only one class of equity shares having a par value of Rs. 2 each. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, holder of equity shares will be entitled to receive remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(ii) Shares reserved for issuance

As at March 31, 2016 25,03,560 (previous year 30,39,166) shares of Rs. 2 each towards outstanding employee stock option (ESOP) plan of the Company. (Refer note 26)

(iii) Aggregate number of share issued for consideration other than cash during the period of five years immediately preceding the reporting date The Company has issued total 2,419,889 shares (March 31, 2015: 2,048,340 shares) during the period of five years immediately preceding the reporting date on exercise of options granted under the ESOP plan wherein part consideration was received in the form of employees services.

* Based on the information available with the Company, the balance due to Micro and small enterprises as defined under the MSMED Act, 2006 is Rs. Nil (Previous year Rs. Nil) and no interest has been paid or is payable under the terms of the MSMED Act, 2006. Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

*The corporate dividend tax paid by the Max Life Insurance Company Limited (subsidiary company) on dividend paid to the Company was in excess of company''s obligation of corporate dividend tax on dividend paid/declared by the Company. Accordingly, the Company has taken credit of corporate dividend tax as per section 115O of the Income Tax Act, 1961 and no provision of corporate dividend tax has been recognised in the financial statements.

(c) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

(d) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

(e) The Company has entered into tripartite agreement between Axis Bank Limited, Mitsui Sumitomo Insurance Company Limited and the Company, whereby the Company will buy back the stake held by Axis Bank Limited in Max Life. (Refer to note 33)

Note :

a. Claims against the Company not acknowledged as debts represent the cases pending with judicial forums/authorities. Based on management estimation and opinions from legal advisors, management believes that its position will likely to be upheld in appellate process. No tax has been accrued in the financials statements for tax/legal case demands. The management believes that the ultimate outcomes of the proceedings will not have material adverse effect on the group financial positions and result of operations.

b. Guarantees given by the Company on behalf of subsidiaries/joint ventures are not considered as prejudicial to the interest of the Company as it provides opportunities for growth and increase in operations of subsidiaries/joint ventures.

c. During the year 2006, the Ministry of Corporate Affairs had carried out an inspection, wherein certain technical offences were alleged by the Inspection Officer based on which prosecution proceedings were initiated against the Company, its erstwhile Whole-time Directors and the Company Secretary at Chief Judicial Magistrate, Chandigarh. The Company filed writ petitions against the prosecution proceedings with the Hon''ble High Court of Punjab and Haryana. The High Court stayed the proceedings and listed the case for arguments.

d. Income tax cases represent the cases pending with income tax authorities/appellate authorities. Based on management estimation, future cash outflow in respect of these cases are determinable only on receipt of judgments / decisions pending with various courts/authorities. The Company has not made any provision for the demands in income tax cases as the Company believes that they have a good case based on existing judicial pronouncements.

1. Retirement benefit plans

(i) Defined contribution plans

The Company makes provident fund contribution to defined contribution retirement benefit plans for eligible employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions as specified under the law are paid to the provident fund set up as a trust by the Company. The Company is generally liable for annual contributions and any deficiency in interest cost compared to interest computed based on the rate of interest declared by the Central Government under the Employees'' Provident Fund Scheme, 1952 and recognises, if any, as an expense in the year it is determined.

As of 31 March, 2016, the fair value of the assets of the fund and the accumulated members'' corpus is Rs. 33,513.81 lacs and Rs. 33,280.53 lacs respectively. In accordance with an actuarial valuation, there is no deficiency in the interest cost as the present value of the expected future earnings on the fund is greater than the expected amount to be credited to the individual members based on the expected guaranteed rate of interest of 8.75%. The actuarial assumptions include discount rate of 7.72% and an average expected future period of 26.80 years The Company recognised Rs. 71.04 lacs (Previous year Rs. 151.16 lacs) for provident fund contributions in the Statement of Profit and Loss. The contributions payable to the plan by the Company is at the rates specified in rules to the scheme.

(ii) Defined benefit plans

The Company makes annual contribution to the Max India Limited Employees Group Gratuity Fund of the Life Insurance Corporation of India, a funded defined benefit plan for eligible employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of 6 months. Vesting occurs upon completion of 5 years of service.

The present value of the defined benefit obligation and the related current service cost were measured using the Projected Unit Credit Method with actuarial valuations being carried out at each balance sheet date.

The following tables set out the funded status of the defined benefit scheme and amounts recognised in the Company financial statements as at March 31, 2016:

Notes:

a. The discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of obligations.

b. The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

c. The planned assets of the Company are managed by the Life Insurance Corporation of India in terms of an insurance policy taken to fund obligations of the Company with respect to its gratuity plan. Information on categories of plan assets is not available with the Company. d. Experience on actuarial gain/(loss) for benefit obligations and plan assets:

2 Employee Stock Option Plan

2.1 Employee Stock Option Plan - 2003 ("the 2003 Plan"):

The Company had instituted the 2003 Plan, which was approved by the Board of Directors in August 25, 2003 and by the shareholders in September 30, 2003. The 2003 Plan provides for grant of stock options aggregating not more than 5% of number of issued equity shares of the Company to eligible employees of the Company. The 2003 Plan is administered by the Nomination and Remuneration Committee appointed by the Board of Directors. Under the plan, the employees receive shares of the Company upon completion of vesting conditions such as rendering of services across vesting period. Vesting period ranges from one to five years and options can be exercised within two years from vesting date. As amended in the 2003 Plan and approved the shareholders in Annual General Meeting held on September 30, 2014, the Option Price will be determined by the Nomination and Remuneration Committee, from time to time, in accordance with the provisions of applicable law, provided that the Option Price shall not be below the face value of the equity shares of the Company. For the period, the weighted average share price at the exercise date was Rs. 540.68 (March 31, 2015: Rs. 286.78)

The weighted average remaining contractual life for the stock options outstanding as at March 31, 2016 is 1.69 years (March 31, 2015: 3.51 years). The range of exercise prices for options outstanding at the end of the year was 2.00 to 394.00 (March 31, 2015: 2.00 to 394.00). Stock compensation expense under the Fair Value method has been determined based on fair value of the stock options. The fair value of stock options was determined using the Black Scholes option pricing model with the following assumptions.

3. Segment Reporting

Being a holding company, the Company is having business investments and is primarily engaged in growing and nurturing the business investments and providing management advisory services to group companies. Accordingly, the Company views these activities as one business segment, therefore there are no separate reportable segments as per Accounting Standard 17 prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.

4. Lease

Operating lease: Company as lessor

The company has entered into operating lease arrangements for certian facilities and office premises. Rent expense of Rs. 1,135.45 lacs (Previous year Rs. 1,110.48 lacs) in respect of obligation under non-cancellable operating leases and cancellable operating lease has been charged to the Statement of Profit and Loss.

The expected life of the stock is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.

5. Related parties disclosures

Names of related parties where control exists irrespective of whether transactions have occurred or not Subsidiary companies 1 Max Life Insurance Company Limited Names of other related parties with whom transactions have taken place during the year

Key Management Personnel (KMP)

1 Mr. Rahul Khosla (Managing Director) -upto January 14, 2016

2 Mr. Mohit Talwar (Managing Director) - w.e.f. January 15, 2016

3 Mrs. Sujatha Ratnam (Chief Financial Officer) - w.e.f. June 01, 2015

4 Mr. Rahul Ahuja (Chief Financial Officer) - upto May 31, 2015*

5 Mr. V Krishnan (Company Secretary) - upto February 29, 2016* Enterprises owned or significantly influenced by 1 Max India Limited

key management personnel or their relatives 2 Max Bupa Health Insurance Company Limited

3 Antara Purukul Senionr Living Limited

4 Max Speciality Films Limited

5 Max Venture and Industries Limited

6 Pharmax Corporation Limited

7 Max UK Limited

8 Max Healthcare Institute Limited

9 New Delhi House Services Limited

10 Delhi Guest House Private Limited Employee benefit funds 1 Max India Ltd. Employees'' Provident Fund Trust Relatives of Key Management Personnel 1 Mr. Veer Singh

* Mr Rahul Ahuja and Mr V Krishnan were Key Managerial Personnel of the Company for part of the financial year 2015-16. Subsequent to the Scheme of Arrangement becoming effective on January 15, 2016, their remuneration has been charged to Max India Limited with effect from the appointed date i.e April 1, 2015.

6. The Board of Directors of Max Financial Services Limited (''the Company''/erstwhile ''Max India Limited'') in their meeting held on January 27, 2015 had approved the Corporate Restructuring plan to vertically split the Company through a Composite scheme of arrangement (''Scheme''), into three separate listed companies.

The Hon''ble High Court of Punjab and Haryana vide its order dated December 14, 2015, has sanctioned the Scheme under Sections 391 to 394 read with Sections 100 to 104 of the Companies Act, 1956 between Max Financial Services Limited (''MFSL'') (''the Company''/ erstwhile Max India Limited), Max India Limited (''MAX'' - erstwhile Taurus Ventures Limited) and Max Ventures and Industries Limited (''MVIL'' - erstwhile Capricorn Ventures Limited) and their respective shareholders and creditors for transfer of all the assets and liabilities pertaining to each of the demerged undertakings (i.e MAX and MVIL) with effect from April 1, 2015 (Appointed date). The Scheme is effective from January 15, 2016 i.e. the date of filing of the certified copy of the order of the Hon''ble High Court of Punjab and Haryana with the Registrar of Companies, Chandigarh and Shimla.

Upon the scheme becoming effective, the authorised share capital of the Company shall authomatically stand reduced to Rs. 60,00,00,000 (Rupees sixty Crores), as on the Effective Date, without any further act or deed. The entire authorised share capital of the Company will be classified as equity share capital.

In terms of the Scheme, MAX and MVIL are required to issue and allot shares to each member of the Company, whose name is recorded in the register of members and records of the Company, as on the Record Date i.e. January 28, 2016 in the following ratio:

- One equity share of Rs. 2 each in MAX for every one equity share of Rs. 2 each held by equity shareholders in the Company;

- One equity share of Rs. 10 each in MVIL for every five equity shares of Rs. 2 each held by equity shareholders in the Company.

Post receipt of approval from the Foreign Investment Promotion Board (FIPB), vide its letter dated February 19, 2016, MVIL has issued and allotted the shares to the Company''s shareholders as on the record date i.e. January 28, 2016. MVIL has issued and allotted 5,33,96,800 equity shares of Rs. 10 each on March 7, 2016 and the existing equity capital of MVIL of Rs. 5 lacs which was fully held by the Company, has been cancelled pursuant to the provisions of the Scheme.

Subsequent to the year end, MAX has received the approval from the Foreign Investment Promotion Board (FIPB), vide its letter dated May 06, 2016 to issue and allot shares to the Company''s shareholders as on the record date i.e. January 28, 2016. MAX has issued and allotted 26,69,83,999 equity shares of Rs. 2 each on May 14, 2016 and the existing equity capital of MAX of Rs. 5 lacs which was fully held by the Company, has been cancelled pursuant to the provisions of the Scheme.

Further, with respect to employee''s stock options granted by the Company to its employees (irrespective of whether they continue to be employees of the Company or become employees of MAX/MVIL) each option holder shall be allotted stock option by MAX/MVIL under the new ESOP scheme for every stock option held in the Company. Accordingly, ESOP outstanding as on the Effective Date (i.e January 15, 2016) in the Company is allocated between the Company, MAX and MVIL.

7. The Board of Directors of the Company in its meeting held on October 23, 2015 had approved the proposal to transfer certain equity shares of Max Life Insurance Company Limited (''MLIC'') held by the Company to Axis Bank Limited (''Axis'') (along with Mitsui Sumitomo Insurance Company Limited (''MSI'')), subject to approval from Insurance Regulatory and Development Authority of India (''IRDAI''). On February 29, 2016 (pursuant to receipt of approval from IRDAI), the Company and Mitsui Sumitomo Insurance Company Limited (MSI) have transferred 76,560,635 equity shares (3.99% of equity stake in MLIC) and 19,188,127 equity shares (1% of equity stake in MLIC) respectively of MLIC to Axis Bank at face value of Rs. 10 per equity share. Consequent to this transaction, the equity stake of the Company in MLIC has reduced to 68.01%. Further, the Company along with MSI had entered into an Option agreement with Axis on October 23, 2015, whereby the Company and MSI have agreed to offer a ''put option'' to Axis and Axis has agreed to grant ''call option'' to repurchase / sell the aforesaid equity shares in the ratio as mutually agreed upon between MSI and the Company in 5 equal tranches at a price linked to fair market value.

8. Current tax includes Rs. Nil (previous year Rs. 1,690.44 lacs) on account of reversal of MAT credit in absence of virtual certainty to realise the same in near future.

9. The Company is primarily engaged in the business of making business investment in its subsidiaries. The investments (financial assets) and dividend income (financial income) on the same has resulted in financial income to be in excess of 50% of its total income and its financial assets to be more than 50% of total assets. The Company is of the view supported by legal opinion that the Company is a ''Core Investment Company'' (''CIC'') and does not meet the criteria for Systematically Important Core Investment Company (''CIC-SI'') as laid down in the CIC Master Circular dated July 1, 2015. Hence, registration under Section 45-IA of the Reserve Bank of India Act, 1934 is not required.

10. The management is in the process of appointing a full time Company secretary (who had resigned on February 29, 2016) and accordingly the financial statements are signed by two Directors on behalf of the Board and the Chief Financial Officer.

11. Consequent to the Scheme of Demerger effective from 1st April 2015, the figures for the year ended March 31, 2016 are not comparable with the corresponding figures disclosed under previous year ended March 31, 2015. The previous year''s figures have been regrouped / reclassified, wherever necessary to correspond with the current year''s classification / disclosure.

Mar 31, 2015

1. Corporate information

Max India Limited (the Company) is a public company domiciled in India. Its shares are listed on two stock exchanges in India.

The Company has invested in multi-businesses which are engaged in the businesses of Life Insurance, Health Insurance, Healthcare, Senior Living, Speciality Films & Clinical Research.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared on accrual basis and under the historical cost convention.

3 Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 2/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuingAnnual General Meeting.

4 Shares reserved for issue under options

For details of shares reserved for issue under the employee stock option (ESOP) plan of the Company, refer note 29.

5 Aggregate number of share issued for consideration other than cash during the period of five years immediately preceding the reporting date

The Company has issued total 2,048,340 shares (March 31, 2014: 1,790,936 shares) during the period of five years immediately preceding the reporting date on exercise of options granted under the ESOP plan wherein part consideration was received in the form of employees services.

6. Other current liabilities

There is no Micro, Small and Medium Enterprise to which the Company owes dues, which are outstanding for more than 45 days during the year ended March 31, 2015 and March 31, 2014. This information as required to be disclosed under Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

7. Revenue from operations

The Company has a put option to transfer upto 24% of its shareholding in Max Bupa Health Insurance Co. Limited and Bupa Singapore Pte. Limited (Bupa Singapore) has a call option under which the Company would be required to transfer 24% of its shareholding in Max Bupa Health Insurance Co. Limited to Bupa Singapore subject to approval under applicable laws and regulations. As a consideration of the call option granted by the Company, Bupa Singapore is obliged to payan option fee, which is disclosed as above.

8. During the year, the Company has recognised dividend income of Rs. 20,309.83 Lacs (March 31, 2014: Rs. 20,447.99 Lacs) of its share of interim dividend declared during the year and final dividend declared in the previous year by Max Life Insurance Company Ltd, Company's subsidiary.

9. Excise duty on sales amounting to Rs. Nil (March 31, 2014: Rs. 5,460.62 Lacs) has been reduced from sales in statement of profit and loss and excise duty on (increase) / decrease in stock amounting to Rs. Nil (March 31, 2014: Rs. (14.12) Lacs) has been considered as expense in note 25 of financial statements.

The Company has a defined benefit gratuity plan. Every employee who has completed 5 years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Corporation of India in form of a qualifying insurance policy.

The following table summarises the component of net benefit expense recognised in statement of profit and loss, the funded status and the amount recognised in the balance sheet in respect of defined benefit plans.

Statement of profit and loss

Net employee benefit expense recognized in employee cost

10. Provident Fund

The Company has set up a provident fund trust "Max India Limited Employees Provident Trust Fund" which is a common fund for Max India Limited and its subsidiaries. The provident fund trust requires that interest shortfall shall be met by the employer, accordingly it has been considered as a defined benefit plan as perAS-15 (Revised).

The interest rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, and shortfall, if any, shall be made good by the Company and its subsidiaries.

The actuary has accordingly provided a valuation for "Max India Limited Employees Provident Trust Fund" which is a common fund for Max India Limited and its subsidiaries based on assumptions provided below.

11. Employee Stock Option Plan

Employee Stock Option Plan - 2003 ("the 2003 Plan"):

The Company had instituted the 2003 Plan, which was approved by the Board of Directors in August 25, 2003 and by the shareholders in September 30, 2003. The 2003 Plan provides for grant of stock options aggregating not more than 5% of number of issued equity shares of the Company to eligible employees of the Company. The 2003 Plan is administered by the Nomination and Remuneration Committee appointed by the Board of Directors. Under the plan, the employees receive shares of the Company upon completion of vesting conditions such as rendering of services across vesting period. Vesting period ranges from one to five years and options can be exercised within two years from vesting date. As amended in the 2003 Plan and approved the shareholders in Annual General Meeting held on September 30, 2014, the Option Price will be determined by the Nomination and Remuneration Committee, from time to time, in accordance with the provisions of applicable law, provided that the Option Price shall not be below the face value of the equity shares ofthe Company.

12. Leases

Operating lease: Company as lessee

The Company has entered into operating leases for its office spaces and accommodation for its employees under operating lease agreements. The lease rental expense recognized in the statement of profit and loss for the year is Rs. 516.50 Lacs (Previous year Rs. 547.75 Lacs). The Company has not entered into sublease agreements in respect of these leases and there are no restrictions placed upon the Company by entering into these leases.

13. Interest in a joint venture

During the year, the Company has sold 567,66,451 equity shares @ Rs.67.50 per share at an aggregate consideration of Rs.38,317.35 lacs to Life Healthcare Group (Proprietary) Ltd ("LHC"). Further, to maintain its equity stake at 7.50%, IFC, Washington has infused Rs. 31.15 crores in Max Healthcare Institute Limited (MHIL). Also, LHC has infused further capital in MHIL at a total consideration of Rs.38,300.00 lacs to increase its stake at 45.95% as equal with Max India's stake in MHIL. By virtue of this transaction, the Company's stake in MHIL diluted to 45.95% and thus MHIL ceases to be a subsidiary of the Company and has become a Joint venture effective November 10, 2014.

14. Segment Reporting

(a) Business Segments

Till previous year, the Company considered following business segments as primary segment:

* Speciality Plastic Products - The manufacturing facility located at Railmajra, Nawanshahr (Punjab), produces packaging films supported with polymers of propylene, leather finishing transfer foils and related products.

* Business Investments - The Company makes strategic business investments in companies operating in the areas of Life Insurance, Health Insurance, Healthcare, Senior Living and Clinical Research businesses. These investments along with its treasury investments have been combined to form Business Investment Segment.

Pursuant to sale of Speciality Plastic Products, the Company is having only one business segment i.e. business investments in the current year. The segment disclosure is given only for comparative purpose.

(b) Geographical Segments

The Company has considered geographical segment as secondary reporting segment for disclosure. For this purpose, the revenues are bifurcated based on location of customers in India and outside India.

The following table shows the distribution of the Company's consolidated revenue by geographical market, regardless of where the goods were produced.

15. Related parties disclosures

Names of related parties where control exists irrespective of whether transactions have occurred or not

Subsidiary companies

1 Max Life Insurance Company Limited

2 Max Bupa Health Insurance Company Limited

3 Max UK Limited

4 Pharmax Corporation Limited

5 Max Ateev Limited

6 Max Skill First Limited (formerly Max Health staff International Limited)

7 Max Neeman Medical International Limited

8 Neeman Medical International BV (till March 30, 2015)

9 Antara Senior Living Limited

10 Max Speciality Films Limited

11 Capricorn Ventures Limited (w.e.f. February 7, 2015)

12 Taurus Ventures Limited (w.e.f. February 7, 2015)

13 Max Healthcare Institute Limited (till November 9, 2014)

Step down subsidiary companies

1 Neeman Medical International NV (till March 30, 2015)

2 Max Neeman Medical International Inc

3 Antara Purukul Senior Living Limited

4 Antara Gurgaon Senior Living Limited

5 Max One Distribution and Services Limited

6 Alps Hospitals Limited (till November9, 2014)

7 Max Medical Services Limited (till November 9, 2014)

8 Hometrail Estates Limited (till November9, 2014)

9 Hometrail Buildtech Limited (till November9, 2014)

Names of other related parties with whom transactions have taken place during the year

Joint Venture

1 Max Healthcare Institute Limited (w.e.f November 10, 2014)

Key Management Personnel (KMP)

1 Mr. AnaljitSingh (Ceased to be KMP w.e.f. April 01, 2014)

2 Mr. Rahul Khosla (Managing Director)

3 Mr. Mohit Talwar (Deputy Managing Director)

4 Mr. Rahul Ahuja (Chief Financial Officer)

5 Mr. V Krishnan (CompanySecretary)

Relatives of key management personnel

1 Mr. Veer Singh (Son of Mr. AnaljitSingh)

Enterprises owned or significantly influenced by key management personnel or their relatives

1 New Delhi House Services Limited

2 Lakeview Enterprises

3 Delhi Guest House Private Limited

4 Piveta Estates Private Limited

5 Max Ventures Private Limited

6 Max India Foundation

7 Siva Realty Ventures Private Limited

Employee benefit funds

1 Max India Ltd. Employees' Provident Fund Trust

2 Max India Ltd. Superannuation Fund

3 Max India Limited Employees' Gratuity Fund

16. Contingent Liabilities not provided for

(Rs. In Lacs)

As at As at S. Particulars March 31, March 31, N0 2015 2Q14

i. Corporate guarantee given to financial institutions / banks in respect of financial assistance availed by subsidiaries/joint venture of the Company. (Refer note (a))

- Export-Import Bank of lndia 2,100.00 3,450.00

- Infrastructure Development 8,080.00 4,360.00 Finance Company Limited

ii. Claims against the Company not acknowledged as debts (Refer note (b))

- Excise Duty Demands - 2,732.31

- Custom Duty Demands 395.95 384.82

- Service Tax Demands 213.00 225.36

- Entry Tax - 2,877.34

iii. Liability on account of - 685.43 discounting of bills

iv. Letters of credit outstanding with - 334.55 various banks in favour of domestic and foreign suppliers for supply of raw materials and capital goods

v. Obligation arising from import of capital equipment at concessional - 87.57 rate of duty during the year under Export Promotion Capital Goods Scheme

vi. Put option liability of 11.25% - 13,375.43 Optionally Partially convertible preference shares allotted by a subsidiary

vii. Litigation against the Company on Company Law matters Refer note (c)

viii. Income tax cases (refer note (d))

viii.(a) Tax demands made for the 159.04 229.11 assessment years l999-00, 2000-01and2003-04*

viii.(b) Penalty levied undersection 628.02 628.02 271(l)(c) of the Income Tax Act, 1961, which are pending disposal for:

1. Assessment years 1992-93 to 1993-94 - 33.42 Lacs

2. Assessment years 2002-03 to 2005-06 - 586.44 Lacs**

3. Assessment Year 2009-10 - 8.16 Lacs

viii.(c) Litigation in an erstwhile subsidiary of the Company, Max Refer note (e) Telecom Ventures Limited ("MTVL") (since merged with the Company with effect from December 1, 2005)

* The matters for AY 1999-00 to AY 2008-09 are currently pending with Hon'ble Punjab & Haryana High Court. The remaining years are pending disposal attheCIT(Appeals) level.

** The penalty matters for AY 2002-03 to 2005-06 are currently pending with the Hon'ble Income Tax Appellate Tribunal, Amritsar. The remaining years AY 1992-93, AY 1993-94, AY 2009-10 are pending disposal at the CIT(Appeals) level.

Note:

a. Guarantees given by the Company on behalf of subsidiaries/joint ventures are not considered as prejudicial to the interest of the Company as it provides opportunities for growth and increase in operations ofsubsidiaries/jointventures.

b. Claims against the group not acknowledged as debts represent the cases pending with judicial forums/authorities. Based on management estimation and opinions from legal advisors, management believes that its position will likely to be upheld in appellate process. No tax has been accrued in the financials statements for tax/legal case demands. The management believes that the ultimate outcomes of the proceedings will not have material adverse effect on the group financial positions and result of operations.

c. On an inspection carried out by the Ministry of Corporate Affairs in the year 2006, certain technical offences were alleged by the Inspection Officer based on which prosecution proceedings were initiated against the Company, its erstwhile Whole-time Directors and the Company Secretary at Chief Judicial Magistrate, Chandigarh. The Company filed writ petitions against the prosecution proceedings with the Hon'ble High Court of Punjab & Haryana. The High Court stayed the proceedings and listed the case for arguments. The amount of liability/fine or penalty on account of the above is currently unascertainable.

d. Income tax cases represent the cases pending with income tax authorities/appellate authorities. Based on management estimation, future cash outflow in respect of these cases are determinable only on receipt of judgments / decisions pending with various courts/authorities. The Company has not made any provision for the demands in income tax cases as the Company believes that they have a good case based on existing judicial pronouncements.

e. Litigation in an erstwhile subsidiary of the Company, Max Telecom Ventures Limited ("MTVL") (since merged with the Company with effect from December 1, 2005)

11. Corporate restructuring

The Board of Directors in meeting held on January 27, 2015 have approved the Corporate Restructuring plan to vertically split the Company through a Scheme of demerger ('Scheme'), into three separate listed companies. The proposed appointed date is April 01, 2015.

Upon approval of the scheme of demerger by Hon'ble High Court of Punjab and Haryana, the existing company, Max India Limited, is proposed to be renamed as 'Max Financial Services Limited' and will focus solely on the group's life insurance activity. The second vertical, will be named as Max India Limited (Resulting Company 1), which will manage investments in the high growth potential Health and Allied businesses, primarily comprising of Max Healthcare Institute Ltd. and its subsidiaries, Max Bupa Health Insurance Co. Ltd., Antara Senior Living Ltd. etc. The third vertical will house the investment activity in the group's manufacturing business, Max Speciality Films Ltd., and will be named Max Ventures and Industries Limited (Resulting Company 2).

The Company's shareholders will retain one equity share of Rs. 2/- in Max Financial Services Limited (existing Max India, as renamed). In addition, the shareholders will get shares in the new companies on a Record Date, to be specified for this purpose, after the Scheme is approved by the Hon'ble High Court, as detailed below:

* one equityshare of Rs. 2/- each of Resulting Company 1 for every one equity share of Rs. 2/- each held in the Company; and

* one equity share of Rs. 10/- each of Resulting Company 2 for every 5 equity shares of Rs. 2/- each held in the Company.

Subsequently, the Company has received the approvals from stock exchanges (BSE & NSE), SEBI & CCI and scheme has been filed with the Hon'ble High Court of Punjab and Haryana for its consideration and approval.

. Sale of Speciality Films Division (MSF Division) on slump sale

During the year, the Company has transferred its MSF business division/undertaking, engaged in the business of manufacturing and sale of Biaxially Oriented Polypropylenes (BOPP) Films by way of a slump sale on going concern basis to its subsidiary, Max Speciality Films Limited ("MSFL"), vide Business Transfer Agreement (BTA) dated July 10, 2013, as amended by Amendment Letter dated April 01, 2014. The MSF division has been transferred at a consideration of Rs. 27,700.00 lacs on which gain of Rs. 163.72 lacs has been recognised in the books of accounts under the head "Other Income". MSFL has discharged the purchase consideration of Rs. 27,700.00 lacs by way of issuance of 334,00,000 equity shares of Rs. 10/- each issued at a share premium of Rs. 40/- per equity share of Rs. 16,700.00 lacs and balance by way of interest bearing loan of Rs. 11,000.00 lacs.

12. Subsequent to the year end, the Company has divested its 100% stake in the clinical research business of Max Neeman Medical Interna- tional Limited to JSS Medical Research, a Canadian contract research organisation for a consideration of Rs. 942.90 lacs. The Company had over the years invested Rs. 1,448.68 lacs in this business. Accordingly, the Company has made a provision of Rs. 505.78 lacs in the current financial year towards impairment of its investment in Max Neeman Medical International Ltd. Accordingly, the net investment has been shown as current investment in note 15.

46. During the year, the Company has sold 5,67,66,451 equity shares @ Rs. 67.50 per share in Max Healthcare Institute Limited (MHIL) to Life Healthcare Group (Proprietary) Ltd ("LHC") for a consideration of Rs. 38,317.35 Lacs. On this transaction, a gain of Rs. 29,620.73 Lacs has been recognised and disclosed under "Income from investment activities". By virtue of the above transactions and equity infusion by IFC Washington to maintain its equity share at 7.50% in MHIL, the Company's share holding diluted to 45.95% and MHIL has become a joint venture of the Company w.e.f. November 10, 2014.

13. During the year, the Company sold 2,361 Ordinary Shares, representing its entire 100% stake in Neeman Medical International B.V., to Maprima Management B.V. for a sales consideration of Rs. 20.74 lacs. Over the years, a total amount of Rs. 4,057.93 Lacs had been invested in Neeman Medical International B.V.. This amount was fully provided on account of diminution in the value of investment. The net profit on the said transaction is Rs. 20.74 lacs and the same is disclosed under the head "Income from Investing activities".

14. Current tax includes Rs. 1,690.44 Lacs on a/c of reversal of MAT credit in absence of virtual certainty to realise the same in near future.

15. Previous year figures have been regrouped/reclassified to conform to the current year's classification. However, on account of slump sale of Max Speciality Films division on April 01, 2014, the figures for previous year are not comparable.

Mar 31, 2014

1. Leases

Operating lease: Company as lessee

The Company has entered into operating leases for its offce spaces and accommodation for its employees under operating lease agreements. The lease rental expense recognized in the statement of proft and loss for the year is Rs. 547.75 Lacs (Previous year Rs. 424.94 Lacs). The Company has not entered into sublease agreements in respect of these leases and there are no restrictions placed upon the Company by entering into these leases.

2. Segment Reporting

(a) Business Segments

The Company has considered business segment as the primary segment for disclosure. The products/ services included in each of the reported business segments are as follows:

- Speciality Plastic Products - The manufacturing facility located at Railmajra, Nawanshahr (Punjab), produces packaging flms supported with polymers of propylene, leather fnishing transfer foils and related products.

- Business Investments - The Company makes strategic business investments in companies operating in the areas of Life Insurance, Health Insurance, Healthcare, Senior Living and Clinical Research businesses. These investments along with its treasury investments have been combined to form Business Investment Segment.

The above segments have been identifed considering:

(i) The nature of products and services

(ii) The differing risks and returns

(iii) Organisational structure of the group, and

(iv) The internal fnancial reporting systems.

(b) Geographical Segments

The Company has considered geographical segment as secondary reporting segment for disclosure. For this purpose, the revenues are bifurcated based on location of customers in India and outside India.

The following table shows the distribution of the Company''s consolidated revenue by geographical market, regardless of where the goods were produced.

b) The Company has entered into tripartite agreement between Axis Bank Limited, Max Life and the Company, whereby the Company will buy back the stake held by Axis Bank Limited in Max Life in 4 tranches from 2014 to 2016.

c) The Company has provided fnancial support to Max Ateev Limited, Neeman Medical International BV and Neeman Medical International N V, wholly owned subsidiaries of Company in order to meet its future fnancial obligations.

3. Related parties disclosures

Names of related parties where control exists irrespective of whether transactions have occurred or not

Subsidiary companies

and step down subsidiary companies

1. Max Life Insurance Company Limited

2. Max Healthcare Institute Limited

3. Max Bupa Health Insurance Company Limited

4. Max UK Limited

5. Pharmax Corporation Limited

6. Max Ateev Limited

7. Max Healthstaff International Limited

8. Max Neeman Medical International Limited

9. Neeman Medical International BV

10. Neeman Medical International NV

11. Max Neeman Medical International Inc

12. Max Medical Services Limited

13. Alps Hospital Limited

14. Hometrail Estate Private Limited

15. Hometrail Buildtech Private Limited

16. Antara Senior Living Limited

17. Antara Purukul Senior Living Limited

18. Antara Gurgaon Senior Living Limited

19. Max Speciality Films Limited (w.e.f. May 30, 2013)

20. Max One Distribution and Services Limited (w.e.f. September 30, 2013) (Held through Max Neeman Medical International Limited)

Key Management Personnel

1. Mr. Analjit Singh

2. Mr. Rahul Khosla

3. Mr. Mohit Talwar

Relatives of key management personnel

1. Mr. Veer Singh (Son of Mr. Analjit Singh)

Enterprises owned or signifcantly infuenced by key management personnel or their relatives

1. New Delhi House Services Limited

2. Lakeview Enterprises

3. Delhi Guest House Private Limited

4. Piveta Estates Private Limited

5. Malsi Estates Limited

6. Max India Foundation

7. Max Ventures Private Limited

Employee beneft funds

1. Max India Ltd. Employees'' Provident Fund Trust

2. Max India Ltd. Superannuation Fund 3.Max India Limited Employees'' Gratuity Fund

4. Contingent Liabilities not provided for

(Rs. in Lacs)

As at As at S. No Particulars March 31, 2014 March 31, 2013

i. Corporate guarantee given to financial institutions / banks in respect of fnancial assistance availed by subsidiaries of the Company. (Refer note (a))

- Export-Import Bank of India 3,450.00 4,650.00

- Housing Development Finance Corporation Limited - 14,689.20 - Infrastructure Development Finance Company Limited 4,360.00 -

ii. Claims against the Company not acknowledged as debts (Refer note (b))

- Excise Duty Demands 2,732.31 2,129.18

- Custom Duty Demands 384.82 373.68 - Service Tax Demands 225.36 223.08

- Entry Tax 2,877.34 1,198.84

iii. Liability on account of discounting of bills 685.43 576.15

iv. Letters of credit outstanding with various banks in favour of domestic and foreign 334.55 370.68 suppliers for supply of raw materials and capital goods

v. Obligation arising from import of capital equipment at concessional rate of duty 87.57 76.65 during the year under Export Promotion Capital Goods Scheme (Refer note (c))

vi. Put option liability of 11.25% Optionally Partially convertible preference shares 13,375.43 22,955.80 allotted by a subsidiary (Refer note (d))

vii. Litigation agaisnt the Company on Compnay Law matters Refer note (f) viii. Income tax cases (note e and f)

viii.(a) Disallowances made during assessments for the assessment years 1999-00 to 229.11 - 2011-12*

viii.(b) Penalty levied under section 271(1)(c) of the Income Tax Act, 1961, which are 628.02 628.02 pending disposal for:

1. Assessment years 1992-93 to 1993-94 - 33.42 Lacs

2. Assessment years 2002-03 to 2005-06 - 586.44 Lacs**

3. Assessment Year 2009-10 - 8.16 Lacs viii. (c) Litigation in an erstwhile subsidiary of the Company, Max Telecom Ventures Limited Refer note (g) ("MTVL") (since merged with the Company with effect from December 1, 2005)

* The matters for AY 1999-00 to AY 2008-09 are currently pending with Hon''ble Punjab & Haryana High Court. The remaining years are pending disposal at the CIT(Appeals) level. The Ta x department had originally raised a demand of Rs.734.81 lacs on the disallowances made for AY 1999-00 to 2011-12. ** The penalty matters for AY 2002-03 to 2005-06 are currently pending with the Hon''ble Income Tax Appellate Tribunal, Amritsar. The remaining years AY 1992-93, AY 1993-94 and AY 2009-10 are pending disposal at the CIT(Appeals) level.

Note:

a. Guarantees given by the Company on behalf of subsidiaries are not considered as prejudicial to the interest of the Company as it provides opportunities for growth and increase in operations.

b. Claims against the Company not acknowledged as debts represent the cases pending with judicial forums/authorities. Based on management estimation, future cash outfow in respect of these cases are determinable only on receipt of judgments / decisions pending with various forums/authorities. The Company has not made any provision for the demands in Excise, Service Tax, Customs and Entry Tax as the Company believes that they have a good case based on existing judicial pronouncements.

c. The export obligation undertaken by the Company for import of capital equipment under Export Promotion Capital Goods Scheme of the Central Government at concessional or zero rate of custom duty are in the opinion of the management expected to be fulflled within the respective timelines.

d. In 2007-08, the Company had granted a put option to International Finance Corporation ("IFC"), in respect of its subscription to the Company''s subsidiary Max Healthcare Institute Limited''s Optional Cumulative Partially Convertible Redeemable Preference Shares. The put option aggregates Rs. 6,546.87 Lacs (Previous year Rs. 12,500.00 Lacs) together with an assured IRR of 11.25%. The Company''s obligation on the above put option is exercisable by IFC any time after July 20, 2011 or in the event of non performance of certain obligations by Max Healthcare Institute Limited and/or by the Company. No such event has happened that necessitates provision of such obligation in books of account.

e. On an inspection carried out by the Ministry of Corporate Affairs in the year 2006, certain technical offences were alleged by the Inspection Offcer based on which prosecution proceedings were initiated against the Company, its erstwhile Whole-time Directors and the Company Secretary at Chief Judicial Magistrate, Chandigarh. The Company fled writ petitions against the prosecution proceedings with the Hon''ble High Court of Punjab & Haryana. The High Court stayed the proceedings and listed the case for arguments. The amount of liability/fne or penalty on account of the above is currently unascertainable.

f. Income tax cases represent the cases pending with income tax/authorities/ High Court/ Supreme Court. Based on management estimation, future cash outfow in respect of these cases are determinable only on receipt of judgments / decisions pending with various courts/authorities. The Company has not made any provision for the demands in income tax cases as the Company believes that they have a good case based on existing judicial pronouncements.

g. Litigation in an erstwhile subsidiary of the Company, Max Telecom Ventures Limited ("MTVL") (since merged with the Company with effect from December 1, 2005)

5.0 Consequent to the approval of the Board of the Directors of the Company on May 29, 2013, to re-structure Max Speciality Films Division (''MSF Division''), the Company has transferred the MSF Division as a going concern and on a slump sale basis to its 99% owned subsidiary, Max Speciality Films Limited on April 1, 2014.

6.0 During the year, the Company has recovered on cost basis expenses amounting to Rs. 1,089.00 Lacs incurred by it for providing functional support to its subsidiaries.

7.0 Previous year figures have been regrouped / reclassifed, wherever necessary, to conform to current year''s classification.

Mar 31, 2013

1. Corporate information

Max India Limited (the Company) is a public company domiciled in India and incorporated under the provisions ofthe Companies Act, 1956. Its shares are listed on two stock exchanges in India.

The Company is engaged in manufacture of a wide range of sophisticated Packaging unmetallised BOPP films and metallised BOPP films including High Barrier films, Thermal Lamination films and Leather finishing foils. It caters to the needs of diverse packaging industries includingfood packaging, overwrapping, consumer products, labels and textile industries.

The Company has invested in multi-businesses engaged in the businesses of Life Insurance, Health Insurance, Healthcare, Senior Living & Clinical Research.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified by Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis and under the historical cost convention.

The accounting policies adopted in preparation offinancial statements are consistent with those of previous year.

3.1 Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed 5 years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Company of India in form of a qualifying insurance policy.

The following table summarises the component of net benefit expense recognised in statement of profit and loss, the funded status and the amount recognised in the balance sheet in respect ofdefined benefit plans.

3.2 Provident Fund

The Company has set up a provident fund trust "Max India Limited Employees Provident Trust Fund" which is a common fund for Max India Limited and its subsidiaries, which is managed by the Company. The provident fund trust requires that interest shortfall shall be met bythe employer, accordingly it has been considered as a defined benefit plan as perAS-15 (Revised).

The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities during the year ended March 31, 2012. The actuary has accordingly provided a valuation for "Max India Limited Employees Provident Trust Fund" which is a common fund for Max India Limited and its subsidiaries based on assumptions provided below, there is no shortfall as at March 31, 2013.

4. Employee Stock Option Plan

4.1 Employee Stock Option Plan - 2003 ("the 2003 Plan"):

The Company had instituted the 2003 Plan, which was approved bythe Board of Directors in August 25,2003 and bythe shareholders in September 30, 2003. The 2003 Plan provides for grant of stock options aggregating not more than 5% of number of issued equity shares of the Company to eligible employees of the Company. The 2003 Plan is administered by the Remuneration Committee appointed by the Board of Directors. Under the plan, the employees receives shares of the Company upon completion of vesting conditions such as rendering of services across vesting period. Vesting period ranges from one to five years and options can be exercised within two year from vesting date.

5. Leases

Operating lease: Company as lessee

The Company has entered into operating leases for its office spaces and accommodation for its employees under operating lease agreements. The lease rental expense recognized in the statement of profit and loss for the year is Rs. 424.94 Lacs (Previous year Rs. 242.48 Lacs). The Company has not entered into sublease agreements in respect ofthese leases and there are no restrictions placed upon the Company by entering into these leases. The Company has not entered into any non-cancellable leases.

6. Segment Reporting (a) Business Segments

The Company has considered business segment as the primary segment for disclosure. The products/ services included in each of the reported business segments are as follows:

- Speciality Plastic Products - The manufacturing facility located at Railmajra, Nawanshahr (Punjab), produces packaging films supported with polymers of propylene, leatherfinishingtransfer foils and related products.

- Business Investments - The Company makes strategic business investments in companies operating in the areas of Life Insurance, Health Insurance, Healthcare, Senior Living and Clinical Research businesses. These investments along with its treasury investments have been combined to form Business Investment Segment.

The above segments have been identified considering:

(i) The nature of products and services

(ii) The differing risks and returns

(iii) Organisational structure ofthe group, and

(iv) The internalfinancial reportingsystems.

7. Related parties disclosures

Names of related parties where control exists irrespective of whether transactions have occurred or not

Subsidiary companies

and step down subsidiary companies

1. Max Life Insurance Company Limited

2. Max Healthcare Institute Limited

3. Max Bupa Health Insurance Company Limited

4. Max UK Limited

5. Pharmax Corporation Limited

6. MaxAteev Limited

7. Max Healthstafflnternational Limited

8. Max Neeman Medical International Limited

9. Neeman Medical International BV

10. Neeman Medical International NV

11. Max Neeman Medical International Inc

12. Max Medical Services Limited

13. Alps Hospital Limited

14. Hometrail Estate Private Limited

15. Hometrail Buildtech Private Limited

16. Antara Senior Living Limited (w.e.f. June 29, 2012)

17. Antara Purukul Senior Living Private Limited (w.e.f. March 11, 2013)

Names of other related parties with whom transactions have taken place during the year

1. Mr. Analjit Singh

Key Management Personnel 2. Mr. Rahul Khosla

3. Mr. MohitTalwar

Relatives of key management personnel 1. Mr. Veer Singh (Son of Mr. Analjit Singh)

Enterprises owned or significantly influenced by key management personnel or their relatives

1. New Delhi House Services Limited

2. Lakeview Enterprises

3. Delhi Guest House Private Limited

4. Dynavest India Private Limited

5. Malsi Estates Limited

6. Max India Foundation

7. MaxVentures Private Limited

1. Max India Ltd. Employees'' Provident Fund Trust Employee benefit funds 2. Max India Ltd. Superannuation Fund

3. Max India Limited Employees'' Gratuity Fund

7. During the year, the Board of Directors of the Company at their meeting held on September 10, 2012, accorded in principle approval for sale of Max Speciality Films (MSF) division of the Company to the identified third party and accordingly the Company informed the same to the stock exchanges. The Company has decided not to pursue the plan for disposal to the third party and in its meeting of Board of Directors held on May 29, 2013, the Board of Directors approved the same. This has no financial impact on the financial statements of the Company.

Subsequent to the year end the Board of Directors in its meeting held on May 29,2013 has approved the restructuring of Max India Limited with respect to its MSF division, by way oftransfer of business ofthis division to a subsidiary ofthe Company.

8. Previous year figures have been regrouped / reclassified, wherever necessary, to conform to current year''s classification.

Mar 31, 2012

1. Corporate information

Max India Limited is a Company registered under the Companies Act, 1956, listed on National Stock Exchange and Bombay Stock Exchange. Max India Limited is a leading manufacturer of speciality plastic film products for packaging industry. Further, the Company has invested in various subsidiaries in diversified businesses such as healthcare, life insurance, health insurance, clinical research, etc.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis and under the historical cost. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year, except for the change in accounting policy explained below.

3.1 The Company has a put option to transfer upto 24% of its shareholding in Max Bupa Health Insurance Co. Limited and .. Bupa Singapore Pte. Limited (Bupa Singapore) has a call option under which the Company would be required to transfer 24% of its shareholding in Max Bupa Health Insurance Co. Limited to Bupa Singapore subject to approval under applicable laws and regulations. As a consideration of the call option granted by the Company, Bupa Singapore is obliged to pay an option fee, which is disclosed as above.

3.2 Excise duty on sales amounting to Rs. 4,695.85 Lacs (March 31, 2011: Rs. 3,104.86 Lacs) has been reduced from sales in statement of profit and loss and excise duty on decrease in stock amounting to Rs. 55.05 Lacs (March31, 2011: Rs. 41.75 Lacs) has been considered as expense in note 26 of financial statements.

i. The Company has paid remuneration to a director in accordance with the resolution passed by Board of Directors and Shareholders but the same was in excess of the limits prescribed under Schedule XIII of the Companies Act, 1956 for which the Company is in the process of obtaining the necessary approval from the Central Government.

ii. In view of aforesaid, the excess amount of Rs. 30.36 Lacs (March 31, 2011: Nil) received by the concerned Directors till March 31, 2012 is held in trust.

4.1. Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed 5 years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Company of India in form of a qualifying insurance policy.

The following table summarises the component of net benefit expense recognised in statement of profit and loss, the funded status and the amount recognised in the balance sheet in respect of defined benefit plans.

4.2 Provident Fund

The Company has set up a provident fund trust "Max India Limited Employees Provident Trust Fund" which is a common fund for Max India Limited and its subsidiaries, which is managed by the Company. The provident fund trust requires that interest shortfall shall be met by the employer, accordingly it has been considered as a defined benefit plan as per AS-15 (Revised).

The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities during the year ended March 31, 2012. The actuary has accordingly provided a valuation for "Max India Limited Employees Provident Trust Fund" which is a common fund for Max India Limited and its subsidiaries based on assumptions provided below, there is no shortfall as at March 31, 2012. As per the valuation in respect of active members as against the liability of Rs. 16,224.61 Lacs, the trust fund has assets amounting to Rs. 16,327.19 Lacs. Also, yield on existing funds is earned at the rate of 9.09% per annum as against guaranteed interest at the rate of 8.60% per annum.

5.1 During financial year 2008-09, a Memorandum of Understanding (MOU) dated November 12, 2008 has been entered between Government of Punjab ("GOP"), Max India Group and Others ("the Founder Supporters") and Indian School of Business, Hyderabad ("ISB"). As per the MOU, a second campus of ISB is proposed to be established in the Knowledge city at Mohali, with an equal contribution from each of the Founder Supporters. The Shareholders' of the Company approved contribution for an amount not exceeding Rs. 1,700.00 Lacs from the Company to this initiative. During the year, balance contribution of Rs. 758.00 Lacs (March 31, 2011 : Rs. 589.00 Lacs) has been contributed by the Company and disclosed under the head Charity and Donation.

6 Employee Stock Option Plan

6.1 Employee Stock Option Plan Ã 2003 ("the 2003 Plan"):

The Company had instituted the 2003 Plan, which was approved by the Board of Directors in August 25, 2003 and by the shareholders in September 30, 2003. The 2003 Plan provides for grant of stock options aggregating not more than 5% of number of issued equity shares of the Company to eligible employees of the Company. The 2003 Plan is administered by the Remuneration Committee appointed by the Board of Directors. Under the plan, the employees receives shares of the Company. Vesting period ranges from one to four years and options can be exercised within two year from vesting date.

7. Leases

Operating lease: Company as lessee

The Company has entered into operating leases for its office spaces and accommodation for its employees under operating lease agreements. The lease rental expense recognized in the statement of profit and loss for the year is Rs. 242.48 Lacs (Previous year Rs. 237.75 Lacs). The Company has not entered into sublease agreements in respect of these leases and there are no restrictions placed upon the Company by entering into these leases. The Company has not entered into any non-cancellable leases.

8. Segment Reporting

(a) Business Segments

The Company has considered business segment as the primary segment for disclosure. The products/ services included in each of the reported business segments are as follows:

- Speciality Plastic Products - The manufacturing facility located at Railmajra, Nawanshahr (Punjab), produces packaging films supported with polymers of propylene, leather finishing transfer foils and related products.

- Business Investments - The Company makes strategic business investments in companies operating in the areas of Life Insurance, Health Insurance, Healthcare and Clinical Research businesses. These investments along with its treasury invest ments have been combined to form Business Investment Segment.

The above segments have been identified considering:

(i) The nature of products and services

(ii) The differing risks and returns

(iii) Organisational structure of the group, and

(iv) The internal financial reporting systems.

9. Contingent Liabilities not provided for

(RS. IN LACS)

As at As at S. No. Particulars March 31, 2012 March 31, 2011

i. Corporate guarantee given to financial institutions / banks in respect of financial assistance availed by a subsidiary of the Company. (Refer note (a))

- Export-Import Bank of India 5,625.00 6,375.00

- Housing Development Finance Corporation Limited 17,336.40 19,563.60

ii. Claims against the Company not acknowledged as debts (Refer note (b))

- Excise Duty Demands 1,867.86 1677.31

- Custom Duty Demands 362.54 363.36

- Service Tax Demands 323.75 333.86

- Entry Tax 20.19 -

iii. Liability on account of discounting of Bills 533.90 609.99

iv. Letters of credit outstanding with various banks in favour of domestic 271.10 1,482.49 and foreign suppliers for supply of Raw materials and capital goods

v. Obligation arising from import of capital equipment at concessional rate of duty 1,985.84 2,995.33 during the year under Export Promotion Capital Goods Scheme (Refer note (c))

vi. Put option liability of 2% Optionally Partially convertible preference shares 20,634.05 36,997.51 allotted by a subsidiary (Refer note (d))

vii. Income Tax cases (note e and f)

vii.(a) Disallowances made during assessments for the assessment years 1999-00 to 2009-10 83.87 749.31

vii.(b) Penalty levied under section 271(1) (c) of the Income Tax Act, 1961, which are 686.47 100.06 pending disposal for assessment years 1992-93, 1993-04 and 2002-03 to 2007-08

vii.(c) Litigation in an erstwhile subsidiary of the Company, Max Telecom Ventures - - Limited ("MTVL") (since merged with the Company with effect from December 1, 2005)

Note:

a. Guarantees given by the Company on behalf of a subsidiary is not considered as prejudicial to the interest of the Company as it provides opportunities for growth and increase in operations

b. Claims against the Company not acknowledged as debts represent the cases pending with judicial forums/authorities. Based on management estimation, future cash outflow in respect of these cases are determinable only on receipt of judgements / decisions pending with various forums/authorities. The Company has not made any provision for the demands in Excise, Service Tax and Customs as the Company believes that they have a good case based on existing judicial pronouncements.

c. The export obligation undertaken by the Company for import of capital equipment under Export Promotion Capital Goods Scheme of the Central Government at concessional or zero rate of custom duty are in the opinion of the management expected to be fulfilled within the respective timelines.

d. In 2007-08, the Company had granted a put option to International Finance Corporation ("IFC"), in respect of its subscription to the Company's subsidiary Max Healthcare Institute Limited's Optional Cumulative Partially Convertible Redeemable Preference Shares. The put option aggregates Rs. 12,500.00 Lacs (Previous year Rs. 25,000.00 Lacs) together with an assured IRR of 11.25%. The Company's obligation on the above put option is exercisable by IFC any time after July 20, 2011 or in the event of non performance of certain obligations by Max Healthcare Institute Limited and/or by the Company. As confirmed by the management, no such event has happened that necessitates provision of such obligation in books of account.

e. Income tax cases represent the cases pending with income tax/authorities/ High Court/ Supreme Court. Based on management estimation, future cash outflow in respect of these cases are determinable only on receipt of judgments / decisions pending with various courts/authorities. The Company has not made any provision for the demands in income tax cases as the Company believes that they have a good case based on existing judicial pronouncements.

f. Litigation in an erstwhile subsidiary of the Company, Max Telecom Ventures Limited ("MTVL") (since merged with the Company with effect from December 1, 2005)

10. The Company has reclassified previous year figures to conform to this year's classification as per revised Schedule VI.

Mar 31, 2011

A. NATURE OF OPERATIONS

Max India Limited is a Company registered under the Companies Act, 1956, listed on National Stock Exchange and Bombay Stock Exchange. Max India Limited is a leading manufacturer of speciality plastic film products for packaging industry. Further, the Company has invested in various subsidiaries in diversified businesses such as healthcare, life insurance, health insurance, clinical research, etc.

1. Contingent Liabilities not provided for

(RS. IN LACS)

S.No. Particulars As at As at

March 31, 2011 March 31, 2010

i. Corporate guarantee given to financial institutions / banks in respect of financial assistance availed by a subsidiary of the Company. (Refer note (a))

- Export-Import Bank of India 6,375.00 6,937.50

- Housing Development Finance Corporation Limited 19,563.60 21,370.80

ii. Claims against the Company not acknowledged as debts (Refer note (b))

- Excise Duty Demands 1,677.31 744.53

- Custom Duty Demands 363.36 376.43

- Service Tax Demands 333.86 339.02

iii. Liability on account of discounting of Bills 609.99 Nil

iv. Letters of credit outstanding with various banks in favour of domestic and foreign suppliers for supply of raw materials and capital goods 1,482.49 8,111.16

v. Obligation arising from import of capital equipment at concessional rate of duty during the year under Export Promotion Capital Goods Scheme (Refer note (c)) 2,995.33 1,810.75

vi. Put option liability of 2% Optionally Partially convertible preference shares allotted by a subsidiary (Refer note (d)) 36,997.51 33,256.15

vii. Income Tax cases (Refer note (e))

Note:

a. Guarantees given by the Company on behalf of a subsidiary is not considered as prejudicial to the interest of the Company as it provides opportunities for growth and increase in operations.

b. Claims against the Company not acknowledged as debts represent the cases pending with judicial forums/authorities. Based on management estimation, future cash outflow in respect of these cases are determinable only on receipt of judgements / decisions pending with various forums/authorities. The Company has not made any provision for the demands in Excise, Service Tax and Customs as the Company believes that they have a good case based on existing judicial pronouncements.

c. The export obligation undertaken by the Company for import of capital equipment under Export Promotion Capital Goods Scheme of the Central Government at concessional or zero rate of custom duty are in the opinion of the management expected to be fulfilled within the respective timelines.

d. In 2007-08, the Company had granted a put option to International Finance Corporation ("IFC"), in respect of its subscription to the Company's subsidiary Max Healthcare Institute Limited's Optional Cumulative Partially Convertible Redeemable Preference Shares aggregating Rs. 25,000.00 Lacs together with an assured IRR of 11.25%. The Company's obligation on the above put option is exercisable by IFC any time after July 20, 2010 or in the event of non performance of certain obligations by Max Healthcare Institute Limited and/or by the Company. As confirmed by management, no such event has happened that necessitates provision of such obligation in books of account.

ii. Apart from demands as stated above, in the case of an erstwhile subsidiary of the Company, Max Telecom Ventures Limited ("MTVL") (since merged with the Company with effect from December 1, 2005), a demand of Rs. 9,503.93 Lacs (Previous year Rs. 9,503.93 Lacs) was raised by the Income Tax Authorities for the Assessment year 1998-99 in connection with capital gains realized by MTVL from the sale of shares of Hutchison Max Telecom Limited ("HMTL") by holding that the sale transaction pertains to previous year relevant to assessment year 1998-99 and by denying exemption under section 10(23G) of the Income Tax Act, 1961 ("the Act"). On appeal by MTVL, the CIT (Appeals), while holding that the sale transaction pertains to previous period relevant to assessment year 1998-99, quashed the order of the Assessing Officer regarding denial of exemption under section 10(23G) and the demand was cancelled. The Tax Authorities filed an appeal against this order with the Income-Tax Appellate Tribunal ("ITAT") which is pending as on date.

Subsequently, in the next assessment year i.e. 1999-00, the above-mentioned transaction was once again sought to be taxed both as capital gains and under a different head of income (i.e., business income) on a protective basis by the Assessing Officer as MTVL had asked the Tax Authorities to treat the transaction as that arising in Assessment year 1999-00 and not in Assessment year 1998-99. This, along with a few other additions, resulted in creation of a further demand of Rs. 24,993.19 Lacs (Previous year Rs. 24,993.19 Lacs) which included the demand of Rs. 24,368.00 Lacs (Previous year Rs. 24,368.00 Lacs) on protective basis. On appeal by MTVL, the CIT (Appeals) decided in favour of MTVL and the demand was cancelled. The Tax Authorities have filed appeal against ITAT, which is pending as on date.

MTVL had also filed an appeal before ITAT for assessment year 1998-99 contending that the aforesaid sale transaction pertains to previous period relevant to assessment year 1999-2000. This appeal had been disposed off by ITAT by applying a circular of Tax Department applicable only to capital gains and holding, as a result, that the transaction of sale of shares pertains to previous period relevant to assessment year 1998-99. However, the Tax Authorities filed a petition before the ITAT requesting a review of the said order of the ITAT on the ground that all the three appeals pertaining to the aforesaid sale transaction should have been clubbed and heard together. The said petition of the Department was accepted by the ITAT which recalled its earlier order in the Company's appeal for Assessment year 1998-99. Aggrieved, the Company filed a writ petition to the Hon'ble High Court of Punjab and Haryana challenging the above action of ITAT on the ground that the same was beyond jurisdiction. The Hon'ble High Court of Punjab and Haryana has admitted the writ petition and stayed the operations of the order of ITAT accepting the petition filed by the Department. The ITAT has in the meanwhile adjourned sine-die all the three appeals pending operation of the stay imposed by the Hon'ble High Court (HC). The Department in turn had moved in Special Leave Petition (SLP) to Hon'ble Supreme Court against the stay granted by Hon'ble HC. The said SLP has now been dismissed by the Hon'ble Supreme Court. However, the Hon'ble Supreme Court has instructed the Hon'ble HC to expeditiously dispose the writ petition filed by MTVL.

Again, in the case of the erstwhile subsidiary of the Company, Max Telecom Ventures Limited ("MTVL") (since merged with the Company with effect from December 1, 2005), a demand of Rs. 15,585.17 Lacs (Previous year Rs. 15,585.17 Lacs), had been raised by the Income Tax Authorities for the Assessment year 2006-07 in connection with capital gains realized by MTVL from the sale of remaining shares of Hutchison Max Telecom Limited ("HMTL") by holding the gains from sale transaction to be in the nature of business income and not capital gains and as a consequence denying exemption under Section 10(23G) of the Act. MTVL had filed an appeal before CIT (Appeals) against the said order. Further, on application by MTVL, the outstanding demand of Rs 14,885.17 Lacs had been stayed by the Tax Authorities till the disposal of first appeal by CIT(Appeals) [The Company had paid Rs. 700.00 Lacs during the year for stay of balance demand]. The CIT(Appeals) has, now, vide order dated March 22, 2011, quashed the assessment order framed by the Assessing Officer, holding that the assessment was nullity in law and cannot survive in view of the fact that the order was framed in the name of MTVL, an entity which had ceased to exist w.e.f. December 1, 2005. As a consequence, the previously raised demand of Rs. 15,585.17 Lacs stands deleted. The Department has now sought to reinitiate proceedings u/s 147 read with section 148 of the Income Tax Act, 1961, on Max India Limited as Successor of MTVL, vide notice dated April 26, 2011.

The Company is hopeful that above appeals will be disposed off in its favour.

2. Loans

(a) Term loan from Kotak Mahindra Bank Ltd amounting to Rs. 2,470.00 Lacs (Previous year Nil) is secured by a first pari passu charge on all existing and future movables (excluding vehicles) and immovable fixed assets of the company and second pari passu charge on all existing and future current assets of the Company.

(b) Term loan from IndusInd Bank Ltd amounting to Rs. 5,267.36 Lacs (Previous year Nil) is secured by a first pari passu charge on the all movable fixed assets (excluding vehicles) of the company and first pari passu charge on immovable properties of the Company. Further the loan is secured by a second pari passu charge on the current assets of the Company, both present and future.

(c) Term loan from Yes Bank Ltd amounting to Rs. 2,340.47 Lacs (Previous year Nil) is secured by a first pari passu charge on all existing and future movables (excluding vehicles) and immovable fixed assets and second pari passu charge on the current assets of the Company, both present and future.

(d) Term Loan from Punjab National Bank amounting to Rs Nil (Previous year Rs. 2,600 Lacs) was secured by a first pari pasu charge on the fixed assets of the Company and second pari pasu charge on the current assets of the company, both present and future.

(e) Term Loan from Oriental Bank of Commerce amounting to Rs Nil (Previous year Rs. 2,600 Lacs) was secured by a first pari pasu charge on the fixed assets of the Company and second pari pasu charge on the current assets of the company, both present and future.

(f) Fund based working capital facilities from banks are secured by a first pari passu hypothecation charge on all current assets and a second charge on immovable and movable fixed assets of the Company, both present and future.

(g) Vehicle Loans Rs. 138.57 Lacs (Previous year Rs. 99.00 Lacs) are secured by way of hypothecation of respective vehicles.

3. During the previous year, the Company has allotted 2,000,000 warrants of the face value of Rs. 867/- each to Dynavest India Private Limited, one of the promoter group companies. Each warrant entitles the holder thereof to subscribe to four equity shares of Rs. 2/- each in the Share Capital of the Company at a premium of Rs. 214.75 per equity share. Each warrant is convertible into four Equity Share as per prevalent SEBI guidelines at any time before expiry of 18 months from the date of allotment i.e. February 6, 2010. In consideration of the warrants, the Company had received a deposit of Rs. 8,670.00 Lacs (Previous year Rs. 8,670.00 Lacs) (being 50% of the consideration for the issue of shares arising upon conversion of the warrants).

4. During previous year, the Company has allotted 6,019,925 Compulsorily Convertible Debentures ('CCDs') of the face value of Rs. 867/- each for an aggregate consideration of Rs. 52,192.75 Lacs to Xenok Limited, a wholly owned indirect subsidiary of GS Capital Partners VI Fund, L.P. and certain affiliated funds which are controlled by The Goldman Sachs Group Inc., on a preferential basis in the Extra Ordinary General meeting held on January 22, 2010. The aforesaid CCDs bearing a coupon of 12% per annum will have to be compulsorily converted into four equity shares of face value of Rs. 2/- each at a premium of Rs. 214.75 per equity share on or before 15 months from the date of issue of CCDs.

5. Employees Benefit

i) Gratuity:

The company has a defined benefit gratuity plan. Every employee who has completed 5 years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Corporation of India in form of a qualifying insurance policy.

The following table summarises the component of net benefit expense recognised in Profit and Loss account, the funded status and the amount recognised in the balance sheet in respect of defined benefit plans.

ii) Provident Fund:

The Company has set up a provident fund trust, which is managed by the Company and as per the Guidance Note on AS-15, Employee Benefits (revised 2005) issued by the Accounting Standard Board (ASB), provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. Pending the issuance of the Guidance Note from the Actuarial Society of India, the Company's actuary has expressed his inability to reliably measure the provident fund liability. However, the Company has duly provided for the shortfall in the interest liability payable by the Provident Fund Trust.

6. Employee Stock Option Plan

Employee Stock Option Plan Ã 2003 ("the 2003 Plan")

The Company has instituted the 2003 Plan, which was approved by the Board of Directors on August 25, 2003 and subsequently by the shareholders on September 30, 2003. The 2003 Plan provides for grant of stock options aggregating not more than 5% of number of issued equity shares of the Company to eligible employees of the Company. The 2003 Plan is administered by the Remuneration Committee appointed by the Board of Directors. Vesting period ranges from one to four years and options can be exercised after one year from vesting date.

7. Segment Reporting

(a) Business Segments

The Company has considered business segment as the primary segment for disclosure. The products / services included in each of the reported business segments are as follows:

- Speciality Plastic Products - The manufacturing facility located at Railmajra, Nawanshahr (Punjab), produces packaging films supported with polymers of propylene, leather finishing transfer foils and related products.

- Business Investments - The Company makes strategic business investments in companies operating in the areas of Life Insurance, Health Insurance, Healthcare and Clinical Research businesses. These investments along with its treasury investments have been combined to form Business Investment Segment.

The above segments have been identified considering:

(i) The nature of products and services

(ii) The differing risks and returns

(iii) Organisational structure of the group, and

(iv) The internal financial reporting systems.

(b) Geographical Segments

The Company has considered geographical segment as secondary reporting segment for disclosure. For this purpose, the revenues are bifurcated based on location of customers in India and outside India (primarily Europe and North America).

The following table shows the distribution of the Company's consolidated sales by geographical market, regardless of where the goods were produced.

8. Related Parties

a. Names of related parties

Names of related parties where control exists irrespective of whether transactions have occurred or not

1. Max New York Life Insurance Company Limited

2. Max Healthcare Institute Limited

3. Max Bupa Health Insurance Company Limited

4. Max UK Limited

5. Pharmax Corporation Limited

6. Max Ateev Limited

Subsidiary Companies

7. Max Healthstaff International Limited

8. Max Neeman Medical International Limited

9. Max Neeman Medical International Inc.

10. Neeman Medical International BV

11. Neeman Medical International NV

12. Max Medical Services Limited

13. Alps Hospital Limited

14. Hometrail Estate Private Limited

15. Hometrail Buildtech Private Limited

Names of other related parties with whom transactions have taken place during the year

Key Management Personnel Mr. Analjit Singh

Relatives of key management personnel Ms. Tara Singh (Daughter of Mr. Analjit Singh)

Mr. Veer Singh (Son of Mr. Analjit Singh)

Enterprises owned or significantly influenced by key management personnel or their relatives

1. New Delhi House Services Limited

2. Lakeview Enterprises

3. Delhi Guest House Private Limited

4. Dynavest India Private Limited

5. Malsi Estates Limited

6. Max India Foundation

7. Bhai Mohan Singh Foundation

8. Max Bupa Health Insurance Company Limited (Upto December 16, 2009)

9. Max & Company Ventures Private Limited

Employee benefit funds 1. Max India Ltd. Employees' Provident Fund Trust

2. Max India Ltd. Superannuation Fund

3. Max India Limited Employees' Gratuity Fund

13. Leases

Operating Lease (As a Lessee)

The Company has entered into operating leases for its office spaces and accommodation for its employees under operating lease agreements. The lease rental expense recognized in the Profit and Loss account for the year is Rs. 237.75 Lacs (Previous year Rs. 231.38 Lacs). The Company has not entered into sublease agreements in respect of these leases. Further, the Company has not entered into any non-cancellable leases.

19. During the year, Rs. 24.57 Lacs (Previous year Rs. 21.47 Lacs) has been charged to the profit and loss account relating to Research and Development expenditure under the heads Raw Material Consumed and Power & Fuel.

20. During the year, the Company shared the services of some of its employees and facilities with group companies. Consequently, the share of costs attributable to these companies has been charged out to the relevant group companies.

21. As a consequence of the Company's investment of Rs. 11,174.01 Lacs during the previous year, Max Bupa Health Insurance Co. Limited became a 74% subsidiary on December 17, 2009. In addition, the Company has a put option to transfer and Bupa Singapore Pte. Limited (Bupa Singapore) has a call option under which the company would be required to transfer 24% of its shareholding to Bupa Singapore subject to approval under applicable laws and regulations. As a consideration of the call option granted by the Company, Bupa Singapore is obliged to pay an option fee to the Company. Accordingly, the Company has recognised "Option fee" income of Rs. 834.43 Lacs (Previous year Rs. 163.61 Lacs) during the year and disclosed the same under "Income from Investment Activities".

22. During financial year 2008-09, a Memorandum of Understanding (MOU) dated November 12, 2008 has been entered between Government of Punjab ("GOP"), Max India Group and Others ("the Founder Supporters") and Indian School of Business, Hyderabad ("ISB"). As per the MOU, a second campus of ISB is proposed to be established in the Knowledge city at Mohali, with an equal contribution from each of the Founder Supporters. The Shareholders' of the Company approved contribution for an amount not exceeding Rs. 1,700.00 Lacs from the Company to this initiative. A sum of Rs. 589.00 Lacs (Previous year Rs.190.00 Lacs) has been contributed by the Company disclosed under the head Charity and Donation during the year.

23. The Board of Directors of the Company in its meeting held on March 30, 2010 approved the proposal of MNYL, a 73.70% subsidiary to issue equity shares of approximately 4% of post issue equity base of MNYL to Axis Bank Ltd. ("Axis Bank") at par. Thereafter, on May 3, 2010, MNYL signed a Corporate Agency agreement with Axis Bank for a period of ten years whereby Axis Bank would be distributing life Insurance products of MNYL across India. Further, on May 10, 2011, MNYL has received the requisite approval from Insurance Regulatory and Development Authority of India to issue 4% stake to Axis Bank.

24. Pursuant to the settlement of a dispute between General Binding Corporation ("GBC") and the Company arising out of the breach of manufacturing and sale agreement by GBC, the Company and GBC have executed a settlement agreement on May 18, 2010. As per the terms of the settlement agreement GBC had paid Rs. 1,794.28 Lacs to the Company as a settlement amount and the same is disclosed under the head "Other Income".

25. Previous year Comparatives

The figures of previous year were audited by a firm of Chartered Accountants other than S.R. Batliboi and Co.

Previous year's figures have been regrouped where necessary to confirm this year's classification.

Mar 31, 2010

1 Contingent Liabilities (RS. LACS)

Current Year Previous Year

a) Corporate guarantees * 39000.00 24000.00

b) Claims against the Company not acknowledged as debts:

- Excise Duty 743.80 709.26

- Custom Duty 376.43 364.09 - Service Tax 339.02 334.83

- Income Tax --- Refer Note B4 ---

c) Letter of Credit outstanding 8111.16 202.14

2 Income Tax Cases

a) In the case of an erstwhile subsidiary of the Company, Max Telecom Ventures Limited ("MTVL") (since merged with the Company with effect from December 1, 2005), a demand of Rs. 9503.93 Lacs (Previous year Rs. 9503.93 Lacs) was raised by the Income Tax Authorities for the Assessment Year 1998-99 in connection with capital gains realized by MTVL from the sale of shares of Hutchison Max Telecom Limited ("HMTL") by holding that the sale transaction pertains to previous year relevant to assessment year 1998-99 and by denying exemption under section 10(23G) of the Income Tax Act, 1961 ("the Act"). On appeal by MTVL, the CIT (Appeals), while holding that the sale transaction pertains to previous period relevant to assessment year 1998-99, quashed the order of the Assessing Officer regarding denial of exemption under section 10(23G) and the demand was cancelled. The Tax Authorities filed an appeal against this order with the Income- Tax Appellate Tribunal ("ITAT") which is pending as on date.

Subsequently, in the next assessment year i.e. 1999-00, the above-mentioned transaction was once again sought to be taxed both as capital gains and under a different head of income (i.e., business income) on a protective basis by the Assessing Officer as MTVL had asked the Tax Authorities to treat the transaction as that arising in Assessment Year 1999-00 and not in Assessment Year 1998-99. This, along with a few other additions, resulted in creation of a further demand of Rs. 24993.19 Lacs which included the demand of Rs. 24368.00 Lacs on protective basis. On appeal by MTVL, the CIT (Appeals) decided in favor of MTVL and the demand was cancelled. The Tax Authorities have filed appeal against ITAT, which appeal is pending as on date.

MTVL had also filed an appeal before ITAT for assessment year 1998-99 contending that the aforesaid sale transaction pertains to Previous Period relevant to assessment year 1999-2000. This appeal had been disposed off by ITAT by applying a circular of Tax Department applicable only to capital gains and holding, as a result, that the transaction of sale of shares pertains to previous period relevant to assessment year 1998-99. However, the Tax Authorities filed a petition before the ITAT requesting a review of the said order of the ITAT on the ground that all the three appeals pertaining to the aforesaid sale transaction should have been clubbed and heard together. The said petition of the Department was accepted by the ITAT which recalled its earlier order in the Companys appeal for Assessment year 1998-99. Aggrieved, the Company filed a writ petition to the Honble High Court of Punjab and Haryana challenging the above action of ITAT on the ground that the same was beyond jurisdiction. The Honble High Court of Punjab and Haryana has admitted the writ petition and stayed the operations of the order of ITAT accepting the petition filed by the Department. The ITAT has in the meanwhile adjourned sine-die all the three appeals pending operation of the stay imposed by the Honble High Court (HC). The Department in turn had moved in SLP to Honble Supreme Court against the stay granted by Honble HC. The said SLP has now been dismissed by the Honble Supreme Court. However, the Honble Supreme Court has instructed the Honble HC to expeditiously dispose the writ petition filed by MTVL.

b) Again, in the case of the erstwhile subsidiary of the Company, Max Telecom Ventures Limited ("MTVL") (since merged with the Company with effect from December 1, 2005), a demand of Rs.15585.17 lacs, has been raised by the Income Tax Authorities for the Assessment Year 2006-07 in connection with capital gains realized by MTVL from the sale of remaining shares of Hutchison Max Telecom Limited ("HMTL") by holding the gains from sale transaction to be in the nature of business income and not capital gains and as a consequence denying exemption under section 10(23G) of the Act. MTVL has filed an appeal before CIT (Appeals) against the said order. Further, on application by MTVL, the entire outstanding demand of Rs 15585.17 lacs has been stayed by the Tax Authorities till the disposal of first appeal by CIT (Appeals).

3 Loans

(a) Term loan from Punjab National Bank amounting to Rs. 2600.00 Lacs (Previous year Rs. 3400.00 Lacs) is secured by a first pari passu charge on the fixed assets and second pari passu charge on the current assets of the Company, both present and future.

(b) Term loan from Oriental Bank of Commerce amounting to Rs. 2600.00 Lacs (Previous year Rs. 3400.00 Lacs) is secured by a first pari passu charge on the fixed assets and second pari passu charge on the current assets of the Company, both present and future.

(c) Fund based working capital facilities from banks are secured by a first pari passu hypothecation charge on all current assets and a second charge on immovable and movable fixed assets of the Company, both present and future.

(d) The Company has been sanctioned term loan of Rs. 6000.00 Lacs by IndusInd Bank and Rs. 2500.00 Lacs by Yes Bank Ltd. The Company has not availed any disbursement as at March 31, 2010. The said loans are secured by way of a first pari passu charge on the fixed assets and second pari passu charge on the current assets of the Company, both present and future.

4 Pursuant to shareholders approval in Extra Ordinary General Meeting held on June 12, 2009 , the Company has allotted 1,03,26,311 equity shares of Rs. 2/- each at a premium of Rs. 143.26 per equity share aggregating to Rs. 15000.00 Lacs, on June 19, 2009 on a preferential basis, to International Finance Corporation.

5 Pursuant to shareholders approval in Extra Ordinary General Meeting held on January 22, 2010, the Company has allotted 20,00,000 warrants of the face value of Rs. 867/- each to Dynavest India Private Limited, one of the promoter group companies on February 6, 2010. Each warrant entitles the holder thereof to subscribe to four equity shares of Rs. 2/- each in the Share Capital of the Company at a premium of Rs. 214.75 per equity share. Each warrant is convertible into four Equity Share as per prevalent SEBI guidelines at any time before expiry of 18 months from the date of allotment. In consideration of the warrants, the Company has received a deposit of Rs. 8670.00 Lacs (being 50% of the consideration for the issue of shares arising upon conversion of the warrants).

6 In 2007-08, the Company had given a put option to International Finance Corporation ("IFC"), in respect of its subscription to the Companys subsidiary Max Healthcare Institute Limiteds Optional Cumulative Partially Convertible Redeemable Preference Shares aggregating Rs. 25000.00 Lacs together with an assured IRR of 11.25%. The Companys obligation on the above put option is exercisable by IFC any time after 20th July, 2010 or in the event of non performance of certain obligations by Max Healthcare Institute Ltd. and/or by the Company.

7 Pursuant to shareholders approval in Extra Ordinary General Meeting held on January 22, 2010, the Company has allotted 60,19,925 Compulsorily Convertible Debentures (CCDs) of the face value of Rs. 867/- each for an aggregate consideration of Rs. 52192.75 Lacs to Xenok Limited, a wholly owned indirect subsidiary of GS Capital Partners VI Fund, L.P. and certain affiliated funds which are controlled by The Goldman Sachs Group, Inc., on a preferential basis. The aforesaid CCDs bearing a coupon of 12% per annum will have to be compulsorily converted into four equity shares of face value of Rs. 2/- each at a premium of Rs. 214.75 per equity share on or before 15 months from the date of issue of CCDs.

8 Employee Stock Option Plan - 2003 ("the 2003 Plan"):

The Company had instituted the 2003 Plan, which was approved by the Board of Directors in August 2003 and by the shareholders in September 2003. The 2003 Plan provides for grant of stock options aggregating not more than 5% of number of issued equity shares of the Company to eligible employees and directors of the Company. The 2003 Plan is administered by the remuneration committee appointed by the board of directors.

Notes:

During the year, the Company paid remuneration to the executive directors in accordance with the resolutions passed by the Remuneration Committee of the Board of Directors and the Shareholders. An amount of Rs. 284.15 Lacs (Previous year Nil) wa paid to the executive directors in excess of the limits prescribed under Section II of Part II of Schedule XIII to the Companies Act, 1956. The Company is in the process for obtaining requisite approvals from the Central Government for the same.

In view of the aforesaid, the excess amounts of Rs. 284.15 Lacs (Previous year Nil) received by the concerned directors, are held by them in trust for the Company.

9 Derivative Instruments

i) Forward cover for foreign currency debtors outstanding as of balance sheet date is Rs. 920.82 Lacs (Previous year Rs. 890.25 Lacs).

ii)Forward cover for foreign currency creditors outstanding as of balance sheet date is Rs. 158.80 Lacs (Previous year Rs. 166.87 Lacs).

iii)Forward cover for expected future purchases or highly probable forecast transaction as of balance sheet date is Rs. 7359.77 Lacs (Previous year Nil).

iv) Foreign currency exposure (net) that are not hedged by derivative instruments or otherwise is Rs. 67.17 Lacs (Previous year Rs. 328.48 Lacs).

10 Employee Benefits

Defined Benefit Plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

11 As per information received from the suppliers, few suppliers are identified as micro and small enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006. During the year, there is no instance of late payment or overdue and remaining unpaid to these suppliers. Accordingly, no interest is paid or accrued and remaining unpaid to these suppliers.

12 Segment Reporting

(a) Business Segments

The Company has considered business segment as the primary segment for disclosure. The products/ services included in each of the reported business segments are as follows:

- Speciality Plastic Products - The manufacturing facility located at Railmajra, Nawanshahr (Punjab), produces packaging films supported with polymers of propylene, leather finishing transfer foils and related products.

- Business Investments - The Company has business investments in companies operating in the areas of Life Insurance, Health Insurance, Healthcare and Clinical Research businesses. These investments along with its treasury investments have been combined to form Business Investment Segments.

The above business segments have been identified considering:

(i) The nature of products and services

(ii) The differing risks and returns

(iii) Organisational structure of the group, and

(iv) The internal financial reporting systems.

Segment Revenue consists of revenue from external customers only since there are no significant inter segment transfers.

Segment Result is the difference of segment revenue and segment operating expenses.

Unallocated Assets include assets pertaining to the corporate office such as loans, advance and deposits.

Unallocated Liabilities include tax provisions and interest bearing loans not directly related to any business segment.

Unallocated Expenses - Expenses incurred at corporate office relate to various business segments. As there is no reasonable basis of allocating this expenditure to various segments, the same are shown as unallocated reconcilingexpenses. Interest expense is not treated as part of a segment expense and is reflected as a separate line item, except interest on loans allocated to business segment.

12 Leases

Accounting for leases has been done in accordance with Accounting Standard-19 issued by the ICAI. Following are the details of lease transactions for the year:

(a) Finance Lease

The Company does not have any finance lease arrangement.

(b) Operating Lease

(i) Lease rentals recognised in the profit and loss account for the year is Rs. 231.38 Lacs (Previous year Rs. 223.33 Lacs).

(ii) The Company has entered into operating leases for its office and for employees residence that are renewable on a periodic basis and cancellable at Companys option. The Company has not entered into sublease agreements in respect of these leases. Further, the Company has not entered into any non-cancellable leases.

Additional information pursuant to the provisions of paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956:

Note:

* It is not practicable to furnish quantitative information in view of large number of items, each being less than ten percent in value of total.

# Excludes Nil (Previous year Rs. 51.90 Lacs) relating to consumption during trial run.

13.During the year, Rs. 21.47 Lacs (Previous year Rs. 16.51 Lacs) has been charged to the profit and loss account relating to Research and Development expenditure under the heads Raw Material - Consumed and Power & Fuel.

14.During the year, the Company shared the services of some of its employees and facilities with group companies. Consequently, the share of costs attributable to these companies has been charged out to the relevant group companies.

15.As a consequence of the Companys investment of Rs. 11174.01 Lacs, Max Bupa Health Insurance Co. Ltd. became a 74% subsidiary on December 17, 2009. In addition, the Company has a put option to transfer and Bupa Singapore Pte. Ltd (Bupa Singapore) has a call option under which the Company would be required to transfer 24% of its shareholding to Bupa Singapore, subject to approval under applicable laws and regulations. As consideration of the call option granted by the Company, Bupa Singapore is obligated to pay an option fee to the Company.

16.During the previous year, a Memorandum of Understanding (MOU) dated November 12, 2008 has been entered between Government of Punjab ("GOP"), Max India Group and Others ("the Founder Supporters") and Indian School of Business, Hyderabad ("ISB"). As per the MOU, a second campus of ISB is proposed to be established in the Knowledge city at Mohali, with an equal contribution from each of the Founder Supporters. The Shareholders of the Company approved contribution for an amount not exceeding Rs. 1700.00 Lacs from the Company to this initiative. Of the above, a sum of Rs. 190.00 Lacs (Previous year Rs. 130.00 Lacs) has been contributed by the Company during the current year and included under the head Charity and Donation.

17.The Company had invested Rs. 447.87 Lacs in the form of 39,45,000 equity shares of Rs. 10/- each and had extended loans of Rs. 1822.82 Lacs to its wholly owned subsidiary Max HealthStaff International Limited (MHS) till March 31, 2010. MHS is in the business of sourcing, training and placing healthcare personnel in India and abroad more particularly in the United States. The placement of healthcare personnel in United States is subject to availability of immigrant visas, which is currently unavailable given the visa retrogression in force. Consequently, MHS has considerably scaled down its operations till the time further clarity on immigration laws emerges. Accordingly, based on prudent accounting practices, the management has decided to provide for diminution in the balance value of investments and loans given to MHS for Rs. 8.53 Lacs (Previous year Rs. 2262.16 Lacs).

18.In line with the expansion plans of the Company, the Board of Directors of the Company in its meeting held on March 30, 2010 approved the proposal of MNYL, a 73.68% subsidiary to issue equity shares of approximately 4% of post issue equity base of MNYL to Axis Bank Ltd. ("Axis Bank) at par. The aforesaid equity issuance shall come into force post execution of definitive agreements and receipt of requisite regulatory approvals. Thereafter, on May 3, 2010, MNYL signed corporate agency agreement with Axis Bank for a period of ten years whereby Axis Bank would be distributing life Insurance products of MNYL across India.

19.Pursuant to the settlement of a dispute between General Binding Corporation ("GBC") and the Company arising out of the breach of manufacturing and sale agreement by GBC, the Company and GBC have executed a settlement agreement on May 18, 2010. As per the terms of the settlement agreement GBC is required to pay USD 3.75 Million (approx. 1700.00 Lacs) to the Company as a settlement amount. Subsequently, in May 2010, the Company has received 50% of this amount.

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