Your Directors are pleased to present 15th Annual Report on business
and operations with the audited financial statement for the year ended 31st March, 2018:
Demerger
The National Company Law Tribunal (NCLT), Mumbai Bench by its order
dated 9th March, 2017 directed the Company to convene a meeting of Shareholders.
Accordingly a Court Convened Meeting of Shareholders was held on 27th April, 2017 for the
purpose of considering and if thought fit, approving, the Scheme of Arrangement between
Talwalkars Better Value Fitness Limited ("Demerged Company") and Talwalkars
Lifestyles Limited ("Resulting Company") and their respective shareholders. As
per the Scrutinisers Report dated 27thApril, 2017, the Shareholders of the Company
approved the said Scheme of Arrangement. The Scheme of Arrangement was sanctioned by the
Honble National Company Law Tribunal, Mumbai Bench on 21st December, 2017. The
certified true copy of order of Honble National Company Law Tribunal was filed with
the Registrar of Companies on 20th February, 2018 and accordingly, the scheme has become
effective from 20thFebruary, 2018.
Accordingly, the Resulting Company named as on the date of this report
as Talwalkars Lifestyles Limited (TLL), is the Company to which the entire Gym business is
transferred and the cost of acquisition of its share is 71.04%. The existing Company i.e.
Talwalkars Better Value Fitness Limited (TBVFL) has retained all other business other than
the Gym business and its cost is 28.96%.
In consideration of the demerger scheme, Talwalkars Lifestyles Limited
has issued and allotted equity shares to the shareholders of Talwalkars Better Value
Fitness Limited in the share entitlement ratio of 1:1 i.e. one (1) equity share of 10/-
(Rupees Ten only) each in TLL for every one (1) equity share of 10/- (Rupees Ten only)
each in TBVFL, held by each shareholder as on record date of 28th March, 2018.
Financial Highlights
The Company has adopted Indian Accounting Standards (‘IndAS)
pursuant to notification issued by the Ministry of Corporate Affairs dated 16th February,
2015 and as prescribed under Section 133 of the Companies Act, 2013 read with the relevant
rules made thereunder from 1st April, 2016 being the date of transition as per IndAS.
Financial statement for the year ended and as at 31st March, 2017 has
been restated to confirm to IndAS. The highlights of your Companys standalone
financial performance for the year ended 31st March, 2018 are summarised below:
|
|
in millions |
| Summarized Financial Results |
March 31, 2018 |
March 31, 2017 |
| Revenue from operations |
572.83 |
493.49 |
| Other Income |
31.98 |
30.53 |
| Total Income |
604.81 |
524.02 |
| Profit before interest, depreciation and taxation |
421.45 |
343.46 |
| Financial Expenses |
103.22 |
78.49 |
| Depreciation |
178.72 |
126.17 |
| Exceptional Items |
- |
- |
| Profit before tax |
139.51 |
138.80 |
| Provision for taxation |
26.17 |
21.50 |
| Deferred Tax |
11.13 |
26.18 |
| Profit after tax but before minority interest |
102.21 |
91.12 |
| Share of minority interest |
- |
- |
| Profit after tax |
102.21 |
91.12 |
| Excess provision of Income Tax written back |
- |
- |
| Balance brought forward |
617.34 |
526.22 |
| Total available for appropriation |
719.55 |
617.34 |
| Proposed Dividend |
- |
- |
| Corporate Dividend Tax |
- |
- |
| Debenture Redemption Reserve |
- |
- |
| General Reserve |
- |
- |
| Balance carried forward |
719.55 |
617.34 |
Our Business
Vide the Scheme of Arrangement between Talwalkars Better Value Fitness
Limited ("Demerged Company") and Talwalkars Lifestyles Limited ("Resulting
Company") and their respective shareholders, the management of Demerged Company has
demerged the Gym Business by transferring the same to Talwalkars Lifestyles Limited. Post
sanction of the Scheme of Arrangement by NCLT, the business of your Company is to render
different types of healthcare and beauty services including diet, nutrition-based
weight-loss programs like Reduce, Nuform, yoga, physiotherapy, Zumba, Zorba, and other
allied lifestyle and wellness activities etc.
Review of Operations
Riding the brand goodwill and management competence, our Income from
Operations (Net) on a standalone basis grew at a 2 year CAGR (Financial Years 2016-17 and
2017-18) of 16.08% achieving 572.83 millions during financial year. Similarly, our EBITDA
and Profits after Tax on a standalone basis for the year ended 31st March, 2018, were
389.47 millions and 102.20 millions respectively, growing at a 2 year CAGR (Financial
Years 2016-17 and 2017-18) of 24.47% and 12.18% respectively.
During the year along with the financial performance, your
Companys profit before tax as well as profit after tax and minority interest
recorded a healthy growth of 0.53% and 12.18% respectively. The volume of the business
also displayed an increase of 16.08% over last year.
No material changes affecting the financial position of the Company
have occurred between the end of the financial year 2017-18 and the date of this Report,
7th May, 2018.
Share capital
During the year, the Company issued 13,00,000 Equity shares of
10/- each at a premium of 308.33/- on a preferential basis in terms
of Chapter VII of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.
The funds have been used to finance the short term and long term working capital
requirement of the business on one hand and to support the future growth plans of the
Company, on the other.
Dividend
Your Directors are pleased to recommend for the consideration of
shareholders, a dividend @5% (Re.0.50/- per equity share of 10/-) for the year ended on
31st March, 2018. The dividend has been recommended in accordance with your Companys
policy of balancing dividend pay-out with the requirement of funds for its growth plans.
Reserves
The Directors have decided to retain the entire amount of 719.55
millions in the Profit and Loss Account.
Deposits
During the year under review, Company has not accepted any fixed
deposits from the public falling within the purview of Section 73 of the Companies Act,
2013 (herein after referred to as "the Act") and rules framed there under.
Subsidiaries
The Company has two subsidiaries as on 31st March, 2018. There has been
no material change in the nature of the business of the subsidiaries. There are no
Associate Companies or Joint Venture Companies within the meaning of Section 2(6) of the
Act.
Pursuant to the provisions of Section 129(3) of the Act, a statement
containing the salient features of financial statements of the Companys Subsidiaries
in Form AOC-1 is attached to this Report as Annexure-I. Further, pursuant to the
provisions of Section 136 of the Act, the financial statement of the Company, consolidated
financial statement and the financial statements of subsidiaries, are available on the
website of the Company. The Company has formulated a policy for determining material
subsidiaries. The Policy may be accessed at the link:
http://www.talwalkars.net/admin/investor/Po
licyforMaterialSubsidiary12716164544408-7249c.pdf
Management Discussion and Analysis
A detailed Management Discussion and Analysis forms part of this Annual
Report.
Corporate Social Responsibility (CSR)
The CSR policy of your Company is aimed at exhibiting care and concern
for the Society. The Company broadly undertakes the activities related to health
awareness, education, medical checkups, promotion of Art and culture etc. The Board plans
to increase CSR expenses.
The initiatives undertaken by the Company on CSR activities during the
year are set out in Annexure - II of this Report in the format prescribed in the Companies
(Corporate Social Responsibility Policy) Rules, 2014. The policy on CSR as approved by the
Board has been uploaded on the Companys website. CSR Policy may be accessed at
http://www.talwalkars.net/admin/investor/ CSRPolicy12716164414123-0a542.pdf
Secretarial Standards
The Company complies with all the applicable Secretarial Standards.
Directors and Key Managerial Personnel
In accordance with the provisions of the Act and the Articles of
Association of the Company, Mr. Vinayak Gawande (DIN: 00324591) and Mr. Girish Talwalkar
(DIN: 00341675), Directors of the Company retire by rotation at the ensuing Annual General
Meeting and being eligible, offer themselves for reappointment. Resolutions for their
re-appointment will be placed for your approval at the ensuing Annual General Meeting.
During the year Mr. Girish Talwalkar (DIN: 00341675), Executive
Chairman of the Company was re-designated as Non-Executive Chairman with effect from 29th
March, 2018.
Mr. Dinesh Afzulpurkar (DIN:05313394), Independent Director of the
Company of the Company resigned from the Board with effect from 29th March, 2018 due to
preoccupation. Your Directors placed on record its heartfelt gratitude for his valuable
contribution towards the success of the Company.
Mr. Prashant Talwalkar, Managing Director and Chief Executive Officer,
Mr. Madhukar Talwalkar, Mr. Girish Talwalkar, Mr. Anant Gawande, Mr. Vinayak Gawande, Mr.
Harsha Bhatkal, Whole-time Directors, Mr. Girish Nayak, Chief Financial Officer and Ms.
Avanti Sankav, Company Secretary and Compliance Officer of the Company are the Key
Managerial Personnel of the Company in terms of Section 2 (51) read with Section 203 (1)
of the Companies Act, 2013.
During the year, the non-executive directors of the Company had no
pecuniary relationship or transactions with the Company, other than sitting fees,
commission and reimbursement of expenses incurred by them for the purpose of attending
meetings of the Company.
Independent Directors of your Company have given declaration confirming
their independence and fair conduct in performance as provided in Section 149 of the Act
and the SEBI Listing Regulations Requirements of the Stock Exchanges.
Ten Board meetings were held during the Financial Year 2017-18 with
requisite quorum present for each of them, the details of which are given in the Corporate
Governance Report.
Board Evaluation
The Board of Directors has carried out an annual evaluation of its own
performance as well as that of its Committees and individual Directors pursuant to the
provisions of the Act and the corporate governance requirements as prescribed by SEBI
Listing Regulations. The performance of the Board was evaluated after seeking inputs from
all the Directors on the basis of criteria such as the Board composition and structure,
effectiveness of Board processes, information and functioning etc. The Guidance Note
issued by the Securities and Exchange Board of India on Board Evaluation was duly
considered while conducting the evaluation.
In a separate meeting of Independent Directors, performance of
non-Independent Directors and the Board as a whole was evaluated, taking into account the
views of Executive Directors and Non-Executive Directors. The same was discussed in the
Board Meeting that followed the meeting of the Independent Directors, at which the
performance of the Board, its Committees and individual Directors was also discussed.
Performance evaluation of independent Directors was done by the entire Board, excluding
the independent Director being evaluated.
Companys Policy on Directors Appointment and Remuneration
The Companys policy on Directors appointment and
remuneration and other matters provided in Section 178(3) of the Act has been disclosed in
the Corporate Governance Report, which forms part of this report.
Audit Committee
The details pertaining to composition, functions performed and meetings
of Audit Committee are included in the Corporate Governance Report, which forms part of
this report.
Your Directors highly value the suggestions of the Audit Committee and
have never turned down any of it.
Related Party Transactions
In line with the requirements of the Companies Act, 2013 and SEBI
Listing Regulations, your Company has formulated a Policy on Related Party Transactions
which is also available on the Companys website at
http://www.talwalkars.net/admin/investor/
PolicyonRelatedPartyTransactions12716165958474-995fe.pdf
The Policy intends to ensure that proper reporting, approval and
disclosure processes are in place for all transactions between the Company and Related
Parties.
All Related Party Transactions are placed before the Audit Committee
for review and approval. Prior omnibus approval is obtained for Related Party Transactions
on a quarterly basis for transactions which are of repetitive nature and / or entered in
the ordinary course of Business and are at Arms Length basis. These transactions
were entered as per the Companys Policy on Related Party transactions. No related
party transaction was in conflict with the interests of the Company.
No Significant Material Related Party Transactions were entered during
the year by your Company. Accordingly, the disclosure of Related Party Transactions as
required under Section 134(3)(h) of the Companies Act, 2013, in Form AOC-2 is not
applicable.
Risk Management
Your Company has constituted Risk Management Committee to identify and
mitigate various risks faced by the Company from time to time. The details of the Risk
Management Committee and its terms of reference are set out in the Corporate Governance
Report.
Particulars of loans, guarantees and Investments
The particulars of loans, guarantees and investments have been
disclosed in the financial statement forming part of this Annual Report and the same were
given for the principal business activities.
Particulars of Employees
Pursuant to Section 197 of the Act, read with Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, none of the employees
of the Company was in receipt of the remuneration during the financial year 2017-18, which
in aggregate was in excess of 1.02 crores per year or 8.5 lakhs per month or in excess
of the remuneration drawn by the Managing Director or Whole-time Director or Manager and
holds by himself or along with his spouse and dependent children two percent or more of
the equity shares of the Company.
The statement of particulars of appointment and remuneration of
managerial personnel pursuant to Rule 5 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 is as under:
(i) Ratio of the remuneration of each Director to the median
remuneration of the Employees of the Company for the financial year 2017-18 and the
percentage increase in remuneration of each Director, Chief Executive Officer, Chief
Financial Officer and Company Secretary during the financial year 2017-18:
| Name of Director/KMP |
Designation |
Ratio of remuneration of
each Director to median remuneration of Employees |
Percentage increase in
remuneration |
|
|
|
|
| 1 Girish Talwalkar |
Non-Executive Chairman |
-- |
-- |
| 2 Madhukar Talwalkar |
Whole-time Director |
6.07 |
-- |
| 3 Prashant Talwalkar |
Managing Director & CEO |
-- |
-- |
| 4 Vinayak Gawande |
Whole-time Director |
-- |
-- |
| 5 Anant Gawande |
Whole-time Director |
-- |
-- |
| 6 Harsha Bhatkal |
Whole-time Director |
-- |
-- |
| 7 Manohar Bhide |
Independent Director |
0.13 |
-- |
| 8 Raman Maroo |
Independent Director |
0.09 |
-- |
| 9 Mohan Jayakar |
Independent Director |
0.03 |
-- |
| 10 Avinash Phadke |
Independent Director |
0.07 |
-- |
| 11 Abhijeet Patil |
Independent Director |
0.28 |
-- |
| 12 Dinesh Afzulpurkar# |
Independent Director |
-- |
-- |
| 13 Mrunalini Deshmukh |
Independent Director |
0.06 |
-- |
| 14 Avanti Sankav |
Company Secretary |
Not Applicable |
15.32 |
| 15 Girish Nayak |
Chief Financial Officer |
Not Applicable |
32.41 |
# Mr. Dinesh Afzulpurkar has resigned as Independent Director w.e.f.
29th March, 2018
(ii) The percentage increase in the median remuneration of employees in
the financial year: 15.08%.
(iii) Permanent employees on the roll as on 31st March, 2018: 9
(iv) During the Financial year 2017-18, there was an average 19.05 %
increasein the salaries of employees other than the managerial personnel in the last
financial year. Managerial Remuneration rose by 23.86 % in line with the volume of the
Companys business and profits earned by it and their responsibilities.
(v) We hereby affirm that the remuneration paid is as per the
remuneration policy of the Company.
Directors Responsibility Statement
In accordance with the provisions of Section 134(5) of the Act, your
Directors confirm that:
(a) In the preparation of the annual accounts, the applicable
accounting standards have been followed and there are no material departures;
(b) The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the profit of the Company for that period;
(c) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of this Act
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
(d) The Directors have prepared the annual accounts on a going concern
basis;
(e) The Directors laid down internal financial controls to be followed
by the Company and that such internal financial controls are adequate and were operating
effectively;
(f ) The Directors have devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems were adequate and
operating effectively;
Based on the framework of internal financial controls and compliance
systems established by the Company, work performed by the internal, statutory and
secretarial auditors, including audit of internal financial controls over financial
reporting by the statutory auditors, the Board is of the opinion that the Companys
internal financial controls were adequate and effective during financial year 2017-18.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
Conservation of Energy and Technology absorption are not applicable to
the Company.
| Foreign Exchange earnings and Outgo |
|
|
|
|
In millions |
| Particulars |
2017-18 |
2016-17 |
| Total foreign exchange earnings |
- |
- |
| Total foreign exchange outgo |
1.27 |
1.05 |
Auditors
Statutory Auditor
M. K. Dandeker & Co., Chartered Accountants (Firm Registration
Number: 000679S) were appointed as Statutory Auditors of your Company at the Annual
General Meeting held on 8th September, 2016, for a term of five consecutive years. As per
the provisions of Section 139 of the Companies Act, 2013, the appointment of Auditors is
required to be ratified by Members at every Annual General Meeting.
Auditors report and Secretarial Audit Report
The Auditors Report and Secretarial Audit Report do not contain any
qualification, reservation or adverse remarks. Secretarial Audit Report is attached to
this report.
Details of the statutory orders impacting the Company
Honble National Company Law Tribunal, Mumbai Bench passed an
order on 21st December, 2017 approving the Scheme of Arrangement between Talwalkars Better
Value Fitness Limited ("Demerged Company") and Talwalkars Lifestyles Limited
("Resulting Company") and their respective shareholders.
Other than the one mentioned above, no significant and material orders
were passed by the Regulators or Courts or Tribunals impacting the going concern status
and the Companys operations in future.
Extract of the Annual Return
The extract of annual return in Form MGT-9 as required under Section
92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014
is appended as an Annexure -IV to this Annual Report.
Corporate Governance
As per SEBI Listing Regulations, Corporate Governance Report with a
certificate of Practicing Company Secretary is attached, which forms part of this report.
Acknowledgement
Your Directors take this opportunity to place on record its
appreciation of sincere efforts put in by the employees of the Company in making the
Company excel in its services.
Your Directors sincerely thank all the investors, members, bankers,
financial institutions, business associates, regulatory and government authorities for
their continued support, assistance and valuable co-operation in the growth of company.
For and on behalf of the Board
Talwalkars Better Value Fitness Limited
Anant Gawande
Whole-time Director DIN: 00324734
Prashant Talwalkar
Managing Director & CEO DIN: 00341715 Date:7th May, 2018 Place:
Mumbai
+91-9892691696
