Your Directors are pleased to present 15th Annual Report on businessand operations with the audited financial statement for the year ended 31st March 2018:
The National Company Law Tribunal (NCLT) Mumbai Bench by its orderdated 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 thepurpose of considering and if thought fit approving the Scheme of Arrangement betweenTalwalkars Better Value Fitness Limited ("Demerged Company") and TalwalkarsLifestyles Limited ("Resulting Company") and their respective shareholders. Asper the Scrutiniser's Report dated 27thApril 2017 the Shareholders of the Companyapproved the said Scheme of Arrangement. The Scheme of Arrangement was sanctioned by theHon'ble National Company Law Tribunal Mumbai Bench on 21st December 2017. Thecertified true copy of order of Hon'ble National Company Law Tribunal was filed withthe Registrar of Companies on 20th February 2018 and accordingly the scheme has becomeeffective from 20thFebruary 2018.
Accordingly the Resulting Company named as on the date of this reportas Talwalkars Lifestyles Limited (TLL) is the Company to which the entire Gym business istransferred 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 thanthe Gym business and its cost is 28.96%.
In consideration of the demerger scheme Talwalkars Lifestyles Limitedhas issued and allotted equity shares to the shareholders of Talwalkars Better ValueFitness 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.
The Company has adopted Indian Accounting Standards (IndAS')pursuant to notification issued by the Ministry of Corporate Affairs dated 16th February2015 and as prescribed under Section 133 of the Companies Act 2013 read with the relevantrules 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 hasbeen restated to confirm to IndAS. The highlights of your Company's standalonefinancial performance for the year ended 31st March 2018 are summarised below:
| || || |
|Summarized Financial Results || |
March 31 2018
March 31 2017
|Revenue from operations || |
|Other Income || |
|Total Income || |
|Profit before interest depreciation and taxation || |
|Financial Expenses || |
|Depreciation || |
|Exceptional Items || |
|Profit before tax || |
|Provision for taxation || |
|Deferred Tax || |
|Profit after tax but before minority interest || |
|Share of minority interest || |
|Profit after tax || |
|Excess provision of Income Tax written back || |
|Balance brought forward || |
|Total available for appropriation || |
|Proposed Dividend || |
|Corporate Dividend Tax || |
|Debenture Redemption Reserve || |
|General Reserve || |
|Balance carried forward || |
Vide the Scheme of Arrangement between Talwalkars Better Value FitnessLimited ("Demerged Company") and Talwalkars Lifestyles Limited ("ResultingCompany") and their respective shareholders the management of Demerged Company hasdemerged the Gym Business by transferring the same to Talwalkars Lifestyles Limited. Postsanction of the Scheme of Arrangement by NCLT the business of your Company is to renderdifferent types of healthcare and beauty services including diet nutrition-basedweight-loss programs like Reduce Nuform yoga physiotherapy Zumba Zorba and otherallied lifestyle and wellness activities etc.
Review of Operations
Riding the brand goodwill and management competence our Income fromOperations (Net) on a standalone basis grew at a 2 year CAGR (Financial Years 2016-17 and2017-18) of 16.08% achieving `572.83 millions during financial year. Similarly our EBITDAand 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 (FinancialYears 2016-17 and 2017-18) of 24.47% and 12.18% respectively.
During the year along with the financial performance yourCompany's profit before tax as well as profit after tax and minority interestrecorded a healthy growth of 0.53% and 12.18% respectively. The volume of the businessalso displayed an increase of 16.08% over last year.
No material changes affecting the financial position of the Companyhave occurred between the end of the financial year 2017-18 and the date of this Report7th May 2018.
During the year the Company issued 1300000 Equity shares of
` 10/- each at a premium of ` 308.33/- on a preferential basis in termsof 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 capitalrequirement of the business on one hand and to support the future growth plans of theCompany on the other.
Your Directors are pleased to recommend for the consideration ofshareholders a dividend @5% (Re.0.50/- per equity share of `10/-) for the year ended on31st March 2018. The dividend has been recommended in accordance with your Company'spolicy of balancing dividend pay-out with the requirement of funds for its growth plans.
The Directors have decided to retain the entire amount of ` 719.55millions in the Profit and Loss Account.
During the year under review Company has not accepted any fixeddeposits from the public falling within the purview of Section 73 of the Companies Act2013 (herein after referred to as "the Act") and rules framed there under.
The Company has two subsidiaries as on 31st March 2018. There has beenno material change in the nature of the business of the subsidiaries. There are noAssociate Companies or Joint Venture Companies within the meaning of Section 2(6) of theAct.
Pursuant to the provisions of Section 129(3) of the Act a statementcontaining the salient features of financial statements of the Company's Subsidiariesin Form AOC-1 is attached to this Report as Annexure-I. Further pursuant to theprovisions of Section 136 of the Act the financial statement of the Company consolidatedfinancial statement and the financial statements of subsidiaries are available on thewebsite of the Company. The Company has formulated a policy for determining materialsubsidiaries. The Policy may be accessed at the link:http://www.talwalkars.net/admin/investor/PolicyforMaterialSubsidiary12716164544408-7249c.pdf
Management Discussion and Analysis
A detailed Management Discussion and Analysis forms part of this AnnualReport.
Corporate Social Responsibility (CSR)
The CSR policy of your Company is aimed at exhibiting care and concernfor the Society. The Company broadly undertakes the activities related to healthawareness education medical checkups promotion of Art and culture etc. The Board plansto increase CSR expenses.
The initiatives undertaken by the Company on CSR activities during theyear 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 theBoard has been uploaded on the Company's website. CSR Policy may be accessed athttp://www.talwalkars.net/admin/investor/ CSRPolicy12716164414123-0a542.pdf
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 ofAssociation 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 GeneralMeeting and being eligible offer themselves for reappointment. Resolutions for theirre-appointment will be placed for your approval at the ensuing Annual General Meeting.
During the year Mr. Girish Talwalkar (DIN: 00341675) ExecutiveChairman of the Company was re-designated as Non-Executive Chairman with effect from 29thMarch 2018.
Mr. Dinesh Afzulpurkar (DIN:05313394) Independent Director of theCompany of the Company resigned from the Board with effect from 29th March 2018 due topreoccupation. Your Directors placed on record its heartfelt gratitude for his valuablecontribution towards the success of the Company.
Mr. Prashant Talwalkar Managing Director and Chief Executive OfficerMr. 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 KeyManagerial 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 nopecuniary relationship or transactions with the Company other than sitting feescommission and reimbursement of expenses incurred by them for the purpose of attendingmeetings of the Company.
Independent Directors of your Company have given declaration confirmingtheir independence and fair conduct in performance as provided in Section 149 of the Actand the SEBI Listing Regulations Requirements of the Stock Exchanges.
Ten Board meetings were held during the Financial Year 2017-18 withrequisite quorum present for each of them the details of which are given in the CorporateGovernance Report.
The Board of Directors has carried out an annual evaluation of its ownperformance as well as that of its Committees and individual Directors pursuant to theprovisions of the Act and the corporate governance requirements as prescribed by SEBIListing Regulations. The performance of the Board was evaluated after seeking inputs fromall the Directors on the basis of criteria such as the Board composition and structureeffectiveness of Board processes information and functioning etc. The Guidance Noteissued by the Securities and Exchange Board of India on Board Evaluation was dulyconsidered while conducting the evaluation.
In a separate meeting of Independent Directors performance ofnon-Independent Directors and the Board as a whole was evaluated taking into account theviews of Executive Directors and Non-Executive Directors. The same was discussed in theBoard Meeting that followed the meeting of the Independent Directors at which theperformance of the Board its Committees and individual Directors was also discussed.Performance evaluation of independent Directors was done by the entire Board excludingthe independent Director being evaluated.
Company's Policy on Directors' Appointment and Remuneration
The Company's policy on Directors' appointment andremuneration and other matters provided in Section 178(3) of the Act has been disclosed inthe Corporate Governance Report which forms part of this report.
The details pertaining to composition functions performed and meetingsof Audit Committee are included in the Corporate Governance Report which forms part ofthis report.
Your Directors highly value the suggestions of the Audit Committee andhave never turned down any of it.
Related Party Transactions
In line with the requirements of the Companies Act 2013 and SEBIListing Regulations your Company has formulated a Policy on Related Party Transactionswhich is also available on the Company's website athttp://www.talwalkars.net/admin/investor/PolicyonRelatedPartyTransactions12716165958474-995fe.pdf
The Policy intends to ensure that proper reporting approval anddisclosure processes are in place for all transactions between the Company and RelatedParties.
All Related Party Transactions are placed before the Audit Committeefor review and approval. Prior omnibus approval is obtained for Related Party Transactionson a quarterly basis for transactions which are of repetitive nature and / or entered inthe ordinary course of Business and are at Arm's Length basis. These transactionswere entered as per the Company's Policy on Related Party transactions. No relatedparty transaction was in conflict with the interests of the Company.
No Significant Material Related Party Transactions were entered duringthe year by your Company. Accordingly the disclosure of Related Party Transactions asrequired under Section 134(3)(h) of the Companies Act 2013 in Form AOC-2 is notapplicable.
Your Company has constituted Risk Management Committee to identify andmitigate various risks faced by the Company from time to time. The details of the RiskManagement Committee and its terms of reference are set out in the Corporate GovernanceReport.
Particulars of loans guarantees and Investments
The particulars of loans guarantees and investments have beendisclosed in the financial statement forming part of this Annual Report and the same weregiven 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 employeesof the Company was in receipt of the remuneration during the financial year 2017-18 whichin aggregate was in excess of `1.02 crores per year or `8.5 lakhs per month or in excessof the remuneration drawn by the Managing Director or Whole-time Director or Manager andholds by himself or along with his spouse and dependent children two percent or more ofthe equity shares of the Company.
The statement of particulars of appointment and remuneration ofmanagerial personnel pursuant to Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is as under:
(i) Ratio of the remuneration of each Director to the medianremuneration of the Employees of the Company for the financial year 2017-18 and thepercentage increase in remuneration of each Director Chief Executive Officer ChiefFinancial 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 || |
|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 || |
|8 Raman Maroo ||Independent Director || |
|9 Mohan Jayakar ||Independent Director || |
|10 Avinash Phadke ||Independent Director || |
|11 Abhijeet Patil ||Independent Director || |
|12 Dinesh Afzulpurkar# ||Independent Director || |
|13 Mrunalini Deshmukh ||Independent Director || |
|14 Avanti Sankav ||Company Secretary || |
|15 Girish Nayak ||Chief Financial Officer || |
# Mr. Dinesh Afzulpurkar has resigned as Independent Director w.e.f.29th March 2018
(ii) The percentage increase in the median remuneration of employees inthe 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 lastfinancial year. Managerial Remuneration rose by 23.86 % in line with the volume of theCompany's business and profits earned by it and their responsibilities.
(v) We hereby affirm that the remuneration paid is as per theremuneration policy of the Company.
Directors' Responsibility Statement
In accordance with the provisions of Section 134(5) of the Act yourDirectors confirm that:
(a) In the preparation of the annual accounts the applicableaccounting standards have been followed and there are no material departures;
(b) The Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;
(c) The Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(d) The Directors have prepared the annual accounts on a going concernbasis;
(e) The Directors laid down internal financial controls to be followedby the Company and that such internal financial controls are adequate and were operatingeffectively;
(f ) The Directors have devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively;
Based on the framework of internal financial controls and compliancesystems established by the Company work performed by the internal statutory andsecretarial auditors including audit of internal financial controls over financialreporting by the statutory auditors the Board is of the opinion that the Company'sinternal financial controls were adequate and effective during financial year 2017-18.
Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo
Conservation of Energy and Technology absorption are not applicable tothe Company.
|Foreign Exchange earnings and Outgo || || |
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` In millions
|Particulars || |
|Total foreign exchange earnings || |
|Total foreign exchange outgo || |
M. K. Dandeker & Co. Chartered Accountants (Firm RegistrationNumber: 000679S) were appointed as Statutory Auditors of your Company at the AnnualGeneral Meeting held on 8th September 2016 for a term of five consecutive years. As perthe provisions of Section 139 of the Companies Act 2013 the appointment of Auditors isrequired 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 anyqualification reservation or adverse remarks. Secretarial Audit Report is attached tothis report.
Details of the statutory orders impacting the Company
Hon'ble National Company Law Tribunal Mumbai Bench passed anorder on 21st December 2017 approving the Scheme of Arrangement between Talwalkars BetterValue Fitness Limited ("Demerged Company") and Talwalkars Lifestyles Limited("Resulting Company") and their respective shareholders.
Other than the one mentioned above no significant and material orderswere passed by the Regulators or Courts or Tribunals impacting the going concern statusand the Company's operations in future.
Extract of the Annual Return
The extract of annual return in Form MGT-9 as required under Section92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules 2014is appended as an Annexure -IV to this Annual Report.
As per SEBI Listing Regulations Corporate Governance Report with acertificate of Practicing Company Secretary is attached which forms part of this report.
Your Directors take this opportunity to place on record itsappreciation of sincere efforts put in by the employees of the Company in making theCompany excel in its services.
Your Directors sincerely thank all the investors members bankersfinancial institutions business associates regulatory and government authorities fortheir continued support assistance and valuable co-operation in the growth of company.
For and on behalf of the Board
Talwalkars Better Value Fitness Limited
Whole-time Director DIN: 00324734
Managing Director & CEO DIN: 00341715 Date:7th May 2018 Place:Mumbai