Talwalkars Healthclubs Ltd.
|BSE: 541545||Sector: Others|
|NSE: TALWGYM||ISIN Code: INE627Z01019|
|BSE 00:00 | 22 Mar||Talwalkars Healthclubs Ltd|
|NSE 05:30 | 01 Jan||Talwalkars Healthclubs Ltd|
|BSE: 541545||Sector: Others|
|NSE: TALWGYM||ISIN Code: INE627Z01019|
|BSE 00:00 | 22 Mar||Talwalkars Healthclubs Ltd|
|NSE 05:30 | 01 Jan||Talwalkars Healthclubs Ltd|
Your Directors are pleased to present the Second Annual Report onbusiness and operations with the audited financial statement for the year ended 31stMarch 2018:
A major development in 2016-17 was the decision to demerge business ofTalwalkars Better Value Fitness Limited. The total business was restructured in two partsGym Business and Lifestyle Business. The Gym business consists of world class gymmingexperience backed by professional trainers. Fitness centres in four di3erent formats whichare Talwalkars Gym Talwalkars Premium Gym HiFi and Power World Gyms. Whereas theLifestyle Business provides value added services like Nuform (Timee3cient weightloss program) Reduce (Easy Diet based program) Transform (Holistic fitness program)Mickey Mehta 360 degrees wellness centres Zumba Merchandise and Zumba (Aerobics and Latindance inspired fitness program) Zorba (Yoga) Spa Massage and Aerobics along with clubbusiness venture.
The National Company Law Tribunal Mumbai Bench (NCLT) as per its orderdated 9th March 2017 directed convening a meeting of shareholders for the purpose ofconsidering and if thought fit approving the Scheme of Arrangement between TalwalkarsBetter Value Fitness Limited ("Demerged Company") and Talwalkars LifestylesLimited ("Resulting Company") and their respective shareholders. A CourtConvened Meeting was held on 27th April 2017 wherein the Shareholders of the Companyapproved the said Scheme of Arrangement. Subsequently NCLT approved the Scheme ofArrangement vide its order dated 21st December 2018. The Scheme became e3ective from 20thFebruary 2018.
Accordingly the Demerged Company named as Talwalkars Better ValueFitness Limited ("TBVFL") transferred the entire Gym Business to TalwalkarsLifestyles Limited ("TLL") the resulting company and the cost of acquisition ofTLL shares was 71.04%.
In consideration of the Scheme TLL has issued and allotted equityshares to the shareholders of TBVFL in the share entitlement ratio of 1:1 i.e. one (1)equity share of Rs 10/- (Rupees Ten only) each in TLL for every one (1) equity share ofRs10/- (Rupees Ten only) each in TBVFL held by each shareholder as on record date of 28thMarch 2018.
Subsequently application for listing of the equity shares allottedpursuant to the Scheme of Arrangement was made to The National Stock Exchange of IndiaLimited ("NSE") and BSE Limited ("BSE Ltd").
TLL received in principle approval from NSE on 19th April 2018 BSE on4th May 2018 and letter confirming relaxation from Rule 19(2)(b) of the SecuritiesContracts (Regulation) Rules 1957 from Securities and Exchange Board of India("SEBI") on 20th June 2018. The Final listing and trading approval for theequity shares of TLL were received from NSE and BSE on 27th June 2018.
The Equity shares of TLL were listed and admitted to dealings on NSEand BSE with e3ect from 29th June 2018.
Pursuant to the Scheme of Arrangement the entire gym business wastransferred to the Company with e3ect from 20th February 2018. The below table summarizesthe Financial Results of the Gym Business.
The Company has adopted Indian Accounting Standards (IndAS') pursuant to notification issued by the Ministry of Corporate A3airs dated 16thFebruary 2015 and as prescribed under Section 133 of the Companies Act 2013("Act") read with the relevant rules made thereunder from 1st April 2016 beingthe date of transition as per Ind AS101.
Financial statement for the year ended and as at 31st March 2017 hasbeen restated to conform to Ind AS. The highlights of your Company's standalonefinancial performance for the year ended 31st March 2018 are summarised below:
Your Company continues its leadership position as largest Fitness Chainwith 251 fitness centres on consolidated basis across 84 cities and towns. At Talwalkarswe possess multiple gym models that includes core gymming and personalised training
Review of Operations
Riding on brand goodwill and management competence our Income fromOperations (Net) on a standalone basis grew at a 2-year CAGR (FY17 - FY18) of 11.05%achieving Rs2307.38 millions during Financial Year 17-18. Similarly our EBITDA andProfits after
Tax on a standalone basis for the year ended 31st March 2018 were
Rs 1351.44 millions and Rs 686.76 millions respectively growing at a2-year CAGR (FY 17 - FY 18) of 11.25% and 30.85% 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 21.21% and 19.94% respectively. The volume of the businessalso displayed an increase of 9.69% over last year.
No material changes a3ecting the financial position of the Company haveoccurred between the end of the financial year 2017-18 and the date of this Report.
Based on the Company's performance your Directors are pleased torecommend for approval of the members a dividend @ 10% (Re. 1/- per equity share ofRs10/-) for the year ended 31st March 2018. The dividend has been recommended inaccordance with your Company's policy of balancing dividend pay-out with therequirement of funds for its growth plans.
Transfer to Reserves
The Directors have decided to retain the entire amount of Rs 2441.48millions in the retained earnings.
Subsidiaries and Associate Company
The Company has 3 Subsidiaries as on 31st March 2018. There are 6Associate companies / Joint Ventures The Subsidiaries Associate companies and JointVentures have been classified based on criteria specified under Ind As. There has been nomaterial change in the nature of the business of the subsidiaries.
Pursuant to the provisions of Section 129(3) of the Act a statementcontaining the salient features of financial statements of the Company'sSubsidiaries/Associate Companies/Joint Ventures in Form AOC-1 is attached to this Reportas Annexure - I. Further pursuant to the provisions of Section 136 of the Act thefinancial statement of the Company consolidated financial statement and the financialstatements of subsidiaries are available on the website of the Company. The Company hasformulated a policy for determining material subsidiaries. The Policy may be accessed atthe link: https://talwalkarslifestyles.com/wp-content/uploads/2018/08/Policy-on-Determinig-Material-Subsidiaries.pdf
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 a3airs 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 su3cient 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 operatinge3ectively;
(f ) The Directors have devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating e3ectively;
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 e3ective during financial year 2017-18.
Directors and Key Managerial Personnel
Your Company has four Directors including Non-Executive ChairmanExecutive Director and two Independent Directors including a Woman Director in accordancewith Corporate Governance norms of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (herein after referred to as "SEBI ListingRegulations") and the provisions of the Act.
Mr. Prashant Talwalkar relinquished the o3ce of Executive Director andwas re-designated as Non Executive Chairman of your Company. Further in accordance withthe provisions of the Act and the Articles of Association of the Company Mr. PrashantTalwalkar Director of the Company retires by rotation at the ensuing Annual GeneralMeeting and being eligible o3ers himself for reappointment.
Mr. Dinesh Afzulpurkar and Ms. Farzana Tavadia were appointed asAdditional Directors in the Non-Executive Independent Category with e3ect from 29thMarch 2018 subject to confirmation by members at the ensuing Annual General Meeting.
Resolutions for appointment / re-appointment of Directors will beplaced for your approval at the ensuing Annual General Meeting.
Mr. Harsha Bhatkal resigned from the Board of Directors with e3ect from30th March 2018 due to pre occupation. The Board places on record its appreciation forhis invaluable contribution and guidance provided by him.
Independent Directors of your Company have given declaration confirmingtheir independence and fair conduct in performance as provided in Section 149 of the Actand the Listing Requirements of the Stock Exchanges.
During the year the Non-Executive Directors of the Company had nopecuniary relationship or transactions with the Company.
The Board appointed Ms. Gayatri Valan Prasad as the Company Secretaryand Compliance O3cer with e3ect from 15th December 2017.
Mr. Girish Talwalkar Executive Director and Ms. Gayatri Valan PrasadCompany Secretary and Compliance O3cer of the company are the Key Manegerial Personnel ofCompany in terms of Section 2(51) read with section 203(1)of the companies Act 2013.
Number of Meetings of the Board
Nine 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 devised a policy for annual evaluation ofthe performance of the Board its Committees and of individual directors (includingIndependent Directors) pursuant to the provisions of the Act and the Corporate Governancerequirement as prescribed by SEBI Listing Regulations. The performance of the Board areevaluated after seeking inputs from all the Directors on the basis of criteria such as theBoard composition and structure e3ectiveness of Board processes information andfunctioning etc. as provided by the Guidance Note on Board Evaluation issued by theSecurities and Exchange Board of India on 5th January 2017.
The Board and the Nomination & Remuneration Committee review theperformance of individual Directors on the basis of criteria such as the contribution ofthe individual Director to the Board and Committee meetings like preparedness on theissues to be discussed meaningful and constructive contribution and inputs in meetingsetc. The performance of the Committees are evaluated by the Board after seeking inputsfrom the Committee Members on the basis of criteria such as the composition of Committeese3ectiveness of Committee Meetings etc.
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.
Pursuant to the provisions of Section 139 of the Act read withCompanies (Audit and Auditors) Rules 2014 as amended from time to time M/s Lakdawala& Associates Chartered Accountants (Firm Registration No. 105518W) were appointed asstatutory auditors from the conclusion of the first Annual General Meeting (AGM) held onSeptember 30 2017 till the conclusion of the sixth AGM of the Company subject to theratification of their appointment at every AGM if required under law. Accordinglynecessary resolution for ratification of appointment of auditors is included in the Noticefor ensuing AGM.
Auditor's Report and Secretarial Audit Report
The Auditor's Report and Secretarial Audit Report do not containany qualifications reservations or adverse remarks. Secretarial Audit Report is attachedto this report.
Your Company has Risk Management Policy to mitigate the risks. TheCompany manages and monitors the principal risks and uncertainties that can impact itsability to achieve its strategic objectives.
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.
Related Party Transactions
During the year under review all related party transactions enteredinto by the Company were in the ordinary course of business and on an arm's lengthbasis. No related party transaction was in conflict with the interests of the Company.Your Company has not entered into materially significant related party transactions withany of its related parties. Accordingly the disclosure of Related Party Transactions asrequired under Section 134(3)(h) of the Companies Act 2013 in Form AOC-2 is notapplicable.
In line with the requirements of the Companies Act 2013 and SEBIListing Regulations the Board has formulated a Policy on Related Party Transactions whichhas been uploaded on the Company's website athttps://talwalkarslifestyles.com/wp-content/uploads/2018/07/Policy-on-Related-Party-Transactions.pdf
The Policy intends to ensure that proper reporting approval anddisclosure processes are in place for all transactions between the Company and RelatedParties.
Corporate Social Responsibility (CSR)
The Board has designed a CSR Policy. Your Company aims at exhibitingcare and concern for the Society. The Company broadly aims to undertake the activitiesrelated to health awareness education medical check-ups promotion of Art and cultureetc.
Weblink of Company's CSR Policy: https://talwalkarslifestyles.com/wp-content/uploads/2018/08/CSR-Policy.pdf
Extract of the Annual Return
The extract of the Annual Return as provided under Section 92 (3) ofthe Companies Act 2013 and Rule 12 of the Companies (Management and Administration)Rules 2014 in Form No. MGT-9 is presented here under in Annexure III to thisAnnual Report.
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 Rs1.02 crores per year or Rs8.5 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 and Company Secretary during thefinancial year 2017-18:
*Resigned with e3ect from 30th March 2018
(ii) The percentage increase in the median remuneration of employees inthe financial year: Not Applicable
(iii) Permanent employees on the roll as on 31st March 2018 : 2
(iv) During the financial year 2017-18 average increase in thesalaries of employees other than the managerial personnel in the last financial year wasnot applicable and increase in Managerial Remuneration was also not applicable.
(v) We hereby a3rm that the remuneration paid is as per theremuneration policy of the Company.
As per SEBI Listing Regulations Corporate Governance Report with acertificate of Practicing Company Secretary is attached which forms part of this report.
Management Discussion and Analysis
A detailed Management Discussion and Analysis forms part of this AnnualReport.
The Company complies with all the applicable Secretarial Standards.
The Company has not accepted any deposits from public falling withinthe preview of Section 73 of Companies Act 2013 and rules framed thereunder.
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
Details of the statutory orders impacting the Company
Hon'ble National Company Law Tribunal Mumbai Bench Passed an order on21st December 2017 approving the scheme of Arrangement between Talwalkars Better ValueFitness Limited ("Demerged Company ") and Talwalkars Lifestyles Limited("Resulting Company") and their respective shareholders.
Other than one mentioned above no significant and material orders werepassed by the Regulator or Courts or Tribunals Impacting the going concern status and theCompany's operations in future.
Your Directors take this opportunity to place on record itsappreciation of sincere e3orts put in by the employees of the Company in making theCompany excel in the realm of health and fitness.
Your Directors sincerely thank all the investors members bankersfinancial institutions business associates regulatory and government authorities fortheir continued support assistance and valuable co-operation to set a brandTalwalkars' with di3erence.
For and on behalf of the Board
Talwalkars Lifestyles Limited
Executive Director DIN: 00341675
Chairman DIN: 00341715
Date: 12th July 2018 Place: Mumbai