8. S
ON.
GROWTH.
ER _
19321932
Set up
1st health club
78 years ago
20032003
Set up TBVF to
expand rapidly
with systems and
training academy
20102010
1st IPO by a
fitness company
in India
20112011
Market leader
with 100
health clubs in
50+ cities
9.
10. Dear Shareholders,
Good Morning!
This is my greeting to every person I meet regardless of the time of day
because I truly believe that like the rising Sun we all must fill life’s moments
with sunshine and hope for a better tomorrow. Each day should be a
forerunner of good health, wisdom and wealth!
“Good health and good sense are two of life’s greatest blessings.”
We, at Talwalkars want to spread this awareness and create a “Healthy
India Fit India”! We have started this year with a total of 63 health clubs
in 32 cities and have successfully managed to grow to 100+ health clubs
in over 50 cities across the length and breadth of the country.
Stress is probably the number one factor today for a large percentage of
ailments, both physical, and mental. A healthy body leads to a healthy
mind and a healthy mind leads to perfection and progress both in material
and spiritual life. Various ancient Indian holistic and spiritual sciences reveal the essential link between the body,
mind and soul. Any imbalance in one affects the other, causing suffering. More and more people are now turning
to traditional and alternative systems of healing which are in harmony with nature to maintain well being in such
times. Your Company strives to make prevention of diseases a mission for its business.
I am delighted at your company’s rapid progress. As the Company treads its path to success cautiously it will aim
higher and innovate on its way so as to be the forerunner in the health and wellness space in India!
As the year progressed, the Company was able to achieve its dream of reaching the 100 health club mark.
Several factors contributed to this momentous occasion which I will briefly enumerate here below.
Your Company has been able to sustain momentum by building strong regional teams, decentralizing authority
and being responsive to the needs of the customer. It has been able to react to the changing needs of the
customer in a proactive and quick manner and has introduced several concepts within the health club space.
Your Company has several products such as Kiloburner : for weight loss, PEP training, spin cycle studios etc to
cater to its clientele apart from the standardized gym packages. The company has also ventured into Tier III and
IV towns in India under its sub brand “ HI FI” gyms which provides fitness and health at lower costs making it
accessible and a value proposition to the lower end of the spectrum.
As the Company expands its footprint, we realize the need for providing an integrated sports, fitness and
recreational area where the upper end of the spectrum can derive benefits and utilize it optimally. With this
concept in mind, your Company has plans of setting up such a development in highly populous urban areas so
as to become a holistic provider of fitness and recreation under one roof.
I would like to thank each and every employee of our 100+ branches spread all over the country for it is their
unflinching loyalty and hard work which makes your Company a brand leader in India today.
I wish to thank each and every one of our shareholders who have shown implicit belief in the Company’s promise
to deliver a healthy bottomline.
I conclude by thanking all my colleagues on the Board for their invaluable support and guidance.
Last, but not the least, I thank you all for your belief and continued support in the Company.
With warm regards
Mr Madhukar Talwalkar
Chairman
Chairman’s Speech
12. 11
No. of Gyms
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
0
200
1523
400
600
800
1600
1000
1200
1400
56
174
599
673
794
PROFIT AFTER TAX
Rs.(inLacs)
Profitaftertax
(onstandalonebasis)
Annual Report 2010-2011
73
8
11
9
Total Number of Health Clubs (as on 30th June, 2011)
Owned
Subsidiary
Trademark Licensed
Franchised
Financial Performance
13. Introduction:
For years India has been the second-fastest growing major economy in the world. According to World
Bank data that could soon change, with the Indian economy set to expand at a faster pace than the
Chinese economy in 2012. This is expected to result from continued high demand in India even as it
measures to combat overheating slow down the Chinese economy.The multilateral agency`s World
Economic Outlook has projected that India will grow at 8.7% in 2012 compared to China`s 8.4%.
The Indian economy has benefited from strong domestic demand and a revival in investor and consumer
sentiment although higher interest rates are expected to shave off a few basis points from the overall
growth rate. Improved external demand and stronger private capital inflows have also played a role.
This year, a favourable monsoon has helped the farm sector expand and has in the process boosted
rural demand as well. “For us, 8.7% is probably closer to our trend growth,” said Pronab Sen, senior
advisor in the Planning Commission. Currently at a $1.3 trillion economy size, India is poised to grow
in numbers as well.
These factors have had two major positive impacts on the operational performance of the Company
and its future strategy.
Firstly, steady acceleration in economic growth has meant that consumer confidence has improved
significantly. This has resulted in an increase in membership and the Company has crossed the 1,00,000
member mark in its flagship brand, Talwalkars Health clubs. Along with the growth in members, the
Company has developed a strong pipeline for new products for different socio economic segments of
the market which it plans to implement over the next few years.
Secondly, the increasing incidence of lifestyle diseases and increased awareness of health benefits has
made the Indian consumer across the country demand better facilities in improving their health and
fitness levels. This has played an important role in increasing membership for your Company.
Market Opportunities
Being fit and healthy has never been as popular or as necessary as it is today. With millions of people
eager to lose weight and get in shape the fitness and wellness industry is one of the fastest growing
industry today.
It is important to note that the contribution of the services sector to the Indian economy has been
manifold: a 55.2 % share in gross domestic product (GDP) growing by 10 per cent annually, contributing
to about a quarter of total employment.
However, market penetration in India is low compared to several developed and developing countries
of the world. The main reason for this is that the fitness industry in India is highly fragmented since
the majority of the market appears to be dominated by large number of unorganized gyms. Secondly
the market also appears to have a shortage of talent, since qualified personal trainers; nutrition
consultants and professional managers are scarce.
Further due to a strong and sustained growth in the economy, disposable incomes have increased at
a significant pace creating a huge demand for fitness centres, health clubs etc. According to a recent
research by the Mckinsey Global Institute, the number of household earning over 5 lakhs per annum
will increase from 3.6 million in 2005 to 8.8 million in 2015. Studies have shown that rural and
semi-urban population is increasing expenditure towards discretionary and luxury due to increase in
disposable income.
Management Discussion & Analysis
14. 13Annual Report 2010-2011
Company Overview
The Company has been expanding its reach and today has a presence in over 50 cities across India,
including Metros, Mini metros and Tier II & III cities, while maintaining the same level of quality,
training and equipments in all its health clubs. From 63 health clubs last year, the Company now
has over 100 health clubs on a consolidated basis with a customer base of 100000+ members.
Your company takes pride in the fact that each health club has the latest imported equipments, a
well trained and courteous staff and a welcoming ambience: all making for a facility that will look
after the health and wellness of its members. Your Company is also working towards flanking its
main Talwalkars Health Club brand on both sides of the value spectrum by creating a value gym
for smaller towns and a new wellness and sports complex for the rising affluent urban population.
* Map not to scale
Management Discussion & Analysis
15. Your Company has adopted various business models in the process of its growth and its over 100
health clubs today is a combination of Company operated health clubs, trademark licensed health
clubs , franchised health clubs and subsidiaries.
Performance Drivers
a. Favourable demographics
As per a recent study India currently has over 300 mn people in the 25-30 age bracket and by
2016, 40% of the population will be in the 20-44 age group. Thus even assuming a modest
1% of this population enrolls into a health club, in sheer numbers, the potential addition to the
fitness market in India is staggering.
b. Rigorous training through an in-house training academy :
Your Company is one of the first health clubs in India to have its own residential training
academy spread over 25000sq.ft in Thane, near Mumbai. The training academy also includes
well furnished residential accommodation along with the pantry. This ensures that staff recruited
16. 15Annual Report 2010-2011
from any part of India can comfortably stay here during the process of training and induction.
They are also paid a regular salary, during this period so as to ensure their full attention and
participation.
Imparting training in all aspects of the business has helped your Company to sustain nearly
the same environment between its branches in the metropolitan cities and the Tier II and III
counterparts, accounting for standardisation.
The training academy includes :
• An In-house gym :
Your Company has replicated an actual gym floor in its Training Academy equipped
with same quality of equipments, both for cardio, strength and free weights, so as to
ensure familiarity of usage and achieving maximum results for its users.
• Inhouse and visiting faculty
Your Company has a In-house faculty as well as experts who come as visiting faculty
to train our students on each and every aspect of health club operations from diet and
nutrition to exercise techniques.
Apart from gym training the staff is trained in grooming and etiquette. This ensures
that they are trained not only in equipment handling but also in dealing with members,
something that is critical in a service industry.
• Spa training as a Profit centre :
There is a dedicated floor in the training academy that is devoted to training the staff in
the Company’s spas. In order to reduce the cost of the training the spa at the academy
also offers services on a commercial basis to customers under the brand “Sparsh”.
c. Hub and Spoke model
The Company follows a hub and spoke model wherein the day to day operations are
decentralized and headed by local teams. This is then supervised by roaming managers who
ensure strict and stringent quality checks and balances. This model has helped the Company
rapidly expand its footprint in smaller towns in India, where the local knowledge of customer
profiles aided by a technical quality check and system control has ensured benefits for both the
customer and the Company.
d. Pan India Presence
• Customer Knowledge : Having a pan- India presence helps the Company to know what
a customer is looking for in a health club and what his expectations are. The Company
has been able to take benefits of local traditions and customs of a particular area and
use it effectively to market its product to the customer in that region. For example, in
Ahmedabad during Uttarayan the local health clubs ran several open air competitions
in the stadium, gave out free branded kites to its members thus using a knowledge
of local customs to effectively widen brand presence in the city during that period.
Management Discussion & Analysis
17. With a formidable network of over 100 outlets,
Talwalkars’ mission to promote fitness has
gathered momentum. Make no mistake,
India is getting healthier!
19. • AppropriateLocations:TheCompany’shasdevisedsetparameterswhichhelplocatebest
possible location in any new city which ensures brand visibility and high memberships.
Further because of the strength of your Company’s reach and brandrecall it has been
able to lock in attractive rental rates for a long tenure.
• Fragmented Industry: India has today a fragmented health and fitness industry, where
even though the demand for quality services is high the supply is largely unorganized
and non-standardized.Your Company benefits immensely due to its pan- India presence
and being a national player with a formidable strength in numbers and reach.
e. Proven track record of services offered driven by experienced management team
Your Company is Professionally run with a board comprising of independent directors who are
stalwarts in their domain. The Company has a high brand recall , which enables it to be ahead
of its competitors.
Business Strategy
Introduction of a new business modela.
After considerable expansion in Metros, Mini Metros and Tier II cities in India , your Company
is all set to take its expansion to the next level with a new concept in gyms which will enable the
middle income population in the smaller towns and cities across India to avail of high quality
gyms at reasonable prices. The new concept Healthy India Fit India Movement was launched
through its new value brand “HI FI”. The first HI FI gym was opened on 9th
June,2011 at Pune,
to test this concept.
HI FI will make your Company’s dream of making fitness facilities available to the masses
across India a reality. HI FI is an integral part of the way forward, and its development will lead
to a Healthy India Fit India movement, will become a part of the national psyche going ahead.
HI FI will enable your Company to reach out and gain success in small towns. It will have all
the key facilities of the existing health clubs including imported equipment, air-conditioning,
generator back up, excellent ambience, high quality personal trainers etc. though at a lower
capex cost. Considerable research has gone into evolving a model, which aided by the significant
economies of scale that have been planned for HI FI, will mean that each gym is expected to
cost only between ` 75 lakhs to ` 95 lakhs .
This will mainly be franchised yet a value added concept. This will enable our Company to
consolidate its position firmly across India and generate high revenues from both royalty and
franchisee fees.
Management Discussion & Analysis
20. 19Annual Report 2010-2011
Brand Promotion and Enhancementb.
After being the Official Fitness partner for the Standard Chartered Mumbai Marathon in 2008
and 2009 and the Femina Miss India Contest in 2009, your Company has become the official
fitness partner of one of the most awaited events in India – The Kingfisher Calendar Girl
Hunt .The Kingfisher Calendar Hunt 2010 was a strategic step towards defining our brand
positioning and enhancing the brand recall. We are looking forward to creating many more
such brand associations in the rapidly expanding wellness segment in India.
Marketingc.
This year the marketing approach towards spreading awareness about opening of the
Company’s new health clubs, attractive offers, launch of new products etc. was geared towards
making a significant impact in the minds of the target consumer. The idea was to promote the
brand through various interactive media, as well to create many consumer focused events,
promotions and branded programmes.
Several promotional schemes ran throughout the year associated with national events with
a focus on brand building. The Company has actively used web based promotions on social
network sites, TV and print media for its marketing efforts.
The New Year’s Resolution offer was targeted to create mass consciousness within consumers
about the benefits of healthy living and there was no better occasion to start that with than the
New Year.
Womens Day Offer Café Coffee day Offer New Year Offers
Kiloburner
During the year the Company launched Kiloburner, which is a systematic weight
loss programme wherein a group of nutritional and fitness experts assess the
physical condition of the member and taking in to account the member’s
habits, preferences and lifestyle and chalk out a special diet-n-exercise routine
for them while monitoring their progress. There are assorted weight loss and
weight administration programmes under the Kiloburner brand that would
suit different age groups and would reduce weight as per the member’s
requirement. Kiloburner is being actively promoted by an array of television
commercials, digital media, mobile and sms marketing.
Management Discussion & Analysis
21. Market Leadership
Scaleability of the modela.
Your Company has set up 100+ health clubs in over 50 cities in India in a short span of 7
years from inception. It is determined to make its presence felt strongly not only in metros, mini
metros but also in Tier – III and IV towns through various formats of its health clubs. Majority
of the health clubs operated by the Company are on a ownership model and some are on a
joint venture franchised and subsidiary models. The Company has acquired a majority stake
in its Joint Venture partner companies, so as to ensure consolidation of the business and rapid
expansion into newer locations. This ensures quality controls and standardized formats for all
its health clubs across the country.
Systems drivenb.
Your Company has a lean and efficient organisational structure, which enables it to forge
ahead in a competitive environment. Various types of reports such as qualitative, quantitive,
organizational, financial etc are generated on a monthly basis which enables the management
to take timely decisions. The Company has a multi layered staffing structure, where regional
managers undertake responsibility of a cluster of health clubs and report to the management.
Budgets are made at the beginning of each year and any variances are reported immediately
through software integration and action is taken on a priority basis, so as to ensure higher
revenues from each health club and revenue generated per member.
Internal Auditc.
Your Company has a strong internal audit system, which is undertaken on a monthly basis. The
Company has set up several checks and balances to ensure that there are no leakages in the
system. Each branch has a independent internal auditor who reports to the management on
any irregularities or discrepancies in the systems at branch level.
Rapid expansiond.
Your Company follows a hub & spoke model for enlarging its footprint in the Indian subcontinent.
The has enabled the Company to open over 100 outlets in over 50 cities in a very short span.
Plans for further expansion of owned health clubs are on track and consolidation of franchised
outlets is also on schedule.
Value and Volume growth drivene.
It is your Company’s motto to “spread fitness” and with this motto, it has grown to over 100
locations across India, resulting into both volume growth as well as providing an array of
services within the health club leading to value growth.
Internal Control and their adequacyf.
Your Company has its internal controls placed in a structured manner across all the branches
of the Company and provides a high degree of assurance with regard to effectiveness and
efficiency of the following:
Management Discussion & Analysis
22. 21Annual Report 2010-2011
Business operations
Safeguarding of Company Assets and
Compliance with various laws & regulations
It is empowered to examine the adherence to policies and plans, as well as statutory obligations.
It also reviews the adequacy of controls in ongoing projects involving significant expenditures
in addition to regular operations. A quarterly review of the audit findings is conducted by the
management, as also the audit committee of the Board.
Discussion on Operational Reporting & Financial Analysis
Operating Performancea.
As a conscious strategy of building a network of branches with effective penetration, your
Company continued to enlarge its geographical coverage of centres with potential for
growth, especially in untapped areas in Tier – II and Tier- III cities, with a population of at
least 5,00,000 and with potential for low-cost rentals, good infrastructure etc.
The Company has consolidated all its joint venture franchise company into the main
Company and has presented results on that basis. Due to a significant improvement in
earnings, there has been an all-round improvement in various financial metrics, which is
enumerated below in the financial reporting segment.
Financial Reporting on Standalone Basisb.
Total Income :
The Company has registered a total income of ` 8,841.46 lakhs marking a growth of
32.96% in comparison to the last year income of ` 6,649.84 lakhs .This growth can be
attributed to the robust expansion of our health clubs across India as also due to new
products introduced during the year. Out of this, revenue from operations contribute a
growth of 30.86% and other income due to treasury management constitutes the balance.
The CAGR of the Total Income over the last 6 years is 56.79%
Operating costs
It is the constant endeavor of the Company to reduce and control costs. The operating cost
for the current year is ` 5,003. 94 lakhs in comparison to last year’s ` 4,051.95 lakhs , even
though the number of health clubs has gone up substantially. On a comparative basis to
income from operations the costs have actually gone down by 3.5% over last year.
PBDIT
Profit before depreciation, interest and taxes and extraordinary items, increased from
` 2,597.89 lakhs in the previous year to ` 3,837.52 lakhs in the current year marking a
significant growth of 47.72%. This is attributable to various factors like stringent internal
controls, effective cost cutting strategies, economies of scale etc.
The CAGR of PBDIT over the last 6 years is 63.44%
Management Discussion & Analysis
23. Financial Expenses
There is noteworthy decline in the weighted average cost of borrowings of around 9%, which
is attributable to the constant efforts of the management which is constantly negotiating with
the bankers for benefit of lower interest rates on the advances, negotiating for better LC
margins etc. The effect of equity funds raised in the IPO has also had a salutary impact on
the overall expense head. The Financial expenses for the current year is ` 808.76 lakhs in
comparison to last year’s ` 735.95 lakhs
Depreciation
Depreciation is provided on Straight Line Method at the rates prescribed in Schedule XIV
of the Companies Act,1956. Depreciation is higher at ` 833.36 lakhs in comparison to
` 608.90 lakhs in F.Y 2009-10 . The same is on account of new health clubs having been
set up in the current year.
Profit Before Tax
Profit Before tax has accelerated from ` 1,158.91 lakhs in F.Y 2009-10 to ` 2231.76 lakhs
in the current year. It has registered an increase of 92.57% over last year.
The CAGR of PBT over the last 6 years is 103.05%
Profit after Tax
Profit after tax has also accelerated from ` 793.69 lakhs in F.Y 2009-10 to ` 1,522.69
lakhs in the current year, resulting an increase of 91.85%. There is an increase in margin of
PAT to Income from Operations margin of 5.6% over last year.
The CAGR of PAT over the last 6 years is 93.38%
Human Resources
People are the most important source for your Company. The staff is the Company’s
principal point of contact with customers. The Company always believes good staff attracts
good business. It has designed practices to attract and retain skilled talent and its HR
processes and policies are aligned to enable employees to meet their career objectives.
Your Company strives to maintain standardization and upgrades the knowledge base of its
manpower through intensive training at its Training academy at Thane, near Mumbai. Your
Company also regularly sends its senior personnel to USA and Europe to attend trade fairs
and seminars to keep them abreast of latest techniques and to offer them industry insight.
Management Discussion & Analysis
24. 23Annual Report 2010-2011
Information Technology
Your Company continuously endeavors to strengthen its infrastructure and technology. In this
technology intensive environment any disruption of service could have adverse effects.
Risk Management and Internal control
Your Company has a strong risk management framework which is constantly reviewed for
its relevance and assessment
of risk. Your Company has
established an audit process
comprising internal audits
to ensure adequacy and
effectiveness of the controls
across IT systems and
compliance with the operating
systems, internal policies and
regulatory requirements.
Environment, Health and
Safety
Environment,HealthandSafety
(EHS) is one of the primary
concerns for your Company.
To mitigate risk to its members
and damage to equipments
from serious electrical
fluctuations your Company
employs electronic devices like
UPS and automatic panels.
Safety systems and processes
developed and implemented
across the sites creates a safe
workplace. Based on periodic safety audits necessary corrective and preventive measures are
undertaken on priority basis.
Your Company also gives priority and attention to the health and safety of its employees and
trains all its employees to work as per the prescribed procedures.
Energy Conservation
Your Company is highly committed to the cause of protecting the environment. Consistent
efforts are made to conserve energy through use of efficient air conditioners using eco-friendly
refrigerants and lighting systems. In some of the health clubs of the Company solar panels has
been installed for certain part of the power requirements.
Management Discussion & Analysis
25. Risk , Concerns, Threats
Global players entering the marketa.
Your Company operates in the competitive market and faces stiff competition from other players
operating both in the organized and the un- organized sector. Some foreign players have also
entered the Indian market. Pricing plays an important role in the customer’s selection of the
Company’s services. There are several strategies adopted by competitors to increase their
market share. A highly competitive market will lead to an adverse effects on the Company’s
profitability.
Staff selection in cities across Indiab.
Your Company is in the service industry, hence human resources is as a vital factor in its success
or failure. Since we are expanding all over India selection of the staff in remote areas becomes
a challenge.
People are still hesitant to disclose that they are working in a gym, though a bulk of fitness
trainers came from a less affluent class of society. Further in India fitness is still not a priority for
women, hence finding women trainers who are fit to pose as examples is difficult. This trend
however, is changing gradually.
Even as staffing challenges persist, recruiting senior management has been anything but easy.
In this business, a manager has to look after clients 365 days a year and this is something that
few people are willing to do.
There is a significant need for professionals with skills necessary to perform the services we
offer to clients. We are overcoming this weakness by giving the staff full fledged training at our
Training Academy. Apart from training on fitness techniques your Company also educates the
trainees with regards to manners, etiquette etc.
Government regulations :c.
The health and wellness Industry as a whole lacks government support. The services provided
by your Company is a cost effective way for the nation to prevent several kinds of diseases.
Government backing in terms of subsidies, reduction of duties on import of equipment are
some of the steps the government could take to promote the growth of the industry thereby
saving substantial resources on healthcare.
Macroeconomic risks:d.
Factors such as recession, inflation, deflation, stock market performance and unemployment
influence income levels and eventually shape the consumers purchasing patterns thereby
influencing consumer demand for the company’s products. There is a direct linkage between
consumer confidence and spending that is determined by general economic conditions and
discretionary income levels.
The Company has initiated measures to curtail its impact.
Management Discussion & Analysis
26. 25Annual Report 2010-2011
Operational Risks:e.
Operational risks mainly relate to meeting the customer expectations in terms of quality of
service and maintaining a balance between rapid expansion and membership numbers. These
assume significance given the importance of quality service offerings.
To set up new health clubs your company has identified a pipeline of excellent potential new
sites and its strong operational cash flows enable it to continue to open new clubs.
f. Financial risks:
The Company is involved in setting up health clubs for its operations. These expose the Company
to risks in terms of having adequate funds at competitive rates to finance its growth.
The current tight liquidity scenario wherein the RBI is raising the BPLR on a constant basis is an
area of concern for the entire economy.
The Company has an A+ rating to mitigate this problem and has also sought better terms
from its bankers for all transactions.
Outlook
It is your Company’s objective to create sustainable long term growth for its business operations.
Your Company will strive to maintain its position as the leading player in the fitness and wellness
industry. We have over the years developed capabilities and acquired strength to take full
advantage of the opportunities presented in the fitness market. The thrust will remain on health
club expansion and providing qualitative and standardized services, marketing strategies and
achieving overall operational excellence.
The customer is the key focus of your organization. An analysis of drivers explain growth factors
such as increasing health and fitness consciousness amongst Indians, increasing spending
power, increase in number of sports events, unsaturated market etc, thus presenting a huge
opportunity for the health and fitness industry in over 80 towns having a population greater
than 500000. Some of the recent measures taken by your Company like providing new offers,
launch of the new concept – HI FI, have been important path changing moves. This is viewed
as a significant move to make your Company’s network stronger and widely spread across the
country.
The Company has also planned forays into other integrated sports and fitness activity centre in
densely populated urban clusters to reach out to the top end of the spectrum.
Management Discussion & Analysis
27. As a responsible player in the wellness industry,
Talwalkars is more than just a gymnasium chain.
We are a provider of total health and fitness
solutions ranging from weight loss consultation to
nutrition counselling and behaviour modification.
Spreading
fitness and
wellness to
every corner
of India
29. To,
The Members of
Talwalkars Better Value Fitness Limited.
Your directors are pleased to present 8th Annual Report together with the audited financial statements
for the year ended 31st
March, 2011:
Financial Results:
The financial performance of the Company for the financial year ended 31st
March, 2011 is summarised
below:
Summarised Financial Results (Rs. In Lacs)
Standalone Consolidated
31st
March, 2011 31st
March, 2010 31st
March, 2011
Total Income 8,841.46 6,649.84 10,434.37
Profit before interest, depreciation and taxation 3,837.52 2,597.89 4213.68
Financial Expenses 735.95 808.76 859.34
Depreciation 833.36 608.90 895.47
Add: Extraordinary Items (36.44) (21.32) (36.44)
Profit before tax 2,231.77 1,158.91 2,421.48
Provision for taxation 447.20 212.31 459.19
Add/( Less): Deferred Tax 261.88 152.90 277.98
Profit after tax but before minority interest 1,522.69 793.70 1,684.31
Share of minority interest - - 81.21
Profit after tax 1,522.69 793.70 1,603.10
Add: Balance brought forward 1,822.44 1522.86 1810.43
Total available for appropriation 3,345.13 2,316.56 3,413.53
Less: General Reserve
Effect of Change in AS-11 - 23.86 -
Effect of previous year’s Deferred Tax Liability - 329.19 -
Proposed Dividend 241.16 120.58 241.16
Corporate Dividend Tax 40.03 20.49 40.03
Debenture Redemption reserve 22.60 - 22.60
Balance carried forward 3,041.34 1,822.44 3,109.74
Director’s Report
30. 29Annual Report 2010-2011
Dividend:
The directors recommend for consideration of the shareholders at the ensuing annual general meeting,
payment of a dividend of Re. 1/- per equity share (10%) for the year ended 31st
March, 2011. The
amount of dividend and tax thereon aggregates to Rs. 2,81,18,874/-.
Operations:
The operations of the Company are elaborated in the annexed Management Discussion and Analysis
Report.
IPO:
The Company made an Initial Public Offer (IPO) of 60,50,000 equity shares of Rs. 10/- each at the
price band of Rs. 123/- to Rs. 128/-. The issue was opened on 21st
April, 2010 and was closed on 23rd
April, 2010. There was overwhelming response from all categories of the investors and the Company’s
shares were oversubscribed by 28.21 times. The category wise subscription details are given below:
Category No. of
Applications
Received
No. of Equity
Shares
No. of times
Subscribed
Qualified Institutional Buyers 101 10,71,70,250 35.4282
Non Institutional Investors 83 4,61,61,200 50.8663
Retail Individual Investors 36,204 1,73,58,550 8.1977
Total 36,388 17,06,90,000 28.2132
The Company, in consultation with India Infoline Limited, Book Running Lead Manager determined the
price of Rs. 128/- per equity share (including a share premium of Rs. 118/- per equity share) for cash
aggregating to Rs. 77,44,00,000/-. The issue constituted 25.09% of the fully diluted post issue paid up
capital of the Company.
The Company had appointed National Stock Exchange of India Limited (NSE) as its designated stock
exchange. The Company applied to National Stock Exchange of India Limited (NSE) and Bombay Stock
Exchange Limited (BSE) for listing approval. The Company’s equity shares were listed on both the Stock
Exchanges on Monday, 10th
May, 2010 at a premium to the Issue Price.
Utilization of Public Issue Proceeds:
The details of the utilization of funds out of the proceeds of the Issue as on 31st
March, 2011 are as
stated below:
Particulars Fund requirement as
stated in Prospectus
Deployment of Funds as on
31st March, 2011
(Rs. In Lacs)
Setting up of additional health clubs 5,022.00 3,950.00
Repayment of unsecured loans 2,059.20 2,059.20
Meeting Issue related expenses 662.80 662.80
Total 7,744.00 6,672.00
Director’s Report
31. Listing of Securities:
The Company’s equity shares are listed on the National Stock Exchange of India Limited (NSE) and on
the Bombay Stock Exchange Limited (BSE). Further, the Company’s Non-Convertible Debt Securities
(NCDs) are listed on the Bombay Stock Exchange Limited (BSE).
Share Capital:
The paid-up equity share capital of your Company has been increased from Rs.18,06,56,720 to Rs.
24,11,56,720 on account of the Initial Public Offer.
Private Placement of Non Convertible Debt Securities (NCDs)
The Company pursuant to approvals granted by the Board of Directors and Members, allotted, on
Private Placement basis, 300 Non-Convertible Debt Securities of Rs. 10,00,000/- each aggregating
to Rs. 30,00,00,000/-. The proceeds of which are utilised for general corporate purpose of the
Company.
Subsidiary Companies:
Your Company has (03) Three subsidiaries as on 31st
March, 2011, which are as under:
(1) Denovo Enterprises Private Limited
(2) Equinox Wellness Private Limited.
(3) Aspire Fitness Private Limited.
All the above stated subsidiaries are active in the same business of running the health clubs.
Denovo Enterprises Private Limited (DEPL).1.
Denovo Enterprises Private Limited, incorporated on 8th
February, 2005, was the joint venture
Company. DEPL was converted from the JVC to Subsidiary Company vide approval of the Board of
Directors granted in the Meeting held on 28th October, 2010.
Equinox Wellness Private Limited (EWPL).2.
Equinox Wellness Private Limited, incorporated on 8th
June, 2004, is step-down subsidiary of your
Company (Subsidiary of DEPL). EWPL was converted to subsidiary company vide approval of the
Board of Directors granted in the Meeting held on 28th October, 2010.
Aspire Fitness Private Limited (AFPL).3.
Aspire Fitness Private Limited, incorporated on 5th
December, 2009, was the joint venture company.
AFPL was converted from JVC to Subsidiary Company vide approval of the Board of Directors
granted in the Meeting held on 28th October, 2010.
Director’s Report
32. 31Annual Report 2010-2011
Fixed Deposits:
During the year under review Company has not accepted any fixed deposits from the public falling within
the purview of Section 58A and 58AA of the Companies Act, 1956 and rules framed thereunder.
Disclosure under Section 274(1)(G):
None of the Directors of the Company are disqualified being appointed as directors as specified u/s
274(1) (g) of the Companies Act, 1956 as amended by the Companies (Amendment) Act, 2000.
Directors:
In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the
Company, Mr. Anant Ratnakar Gawande, Mr. Manohar Gopal Bhide and Dr. Avinash Achyut Phadke,
Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible,
have offered themselves for re-appointment.
Directors’ Responsibility Statement:
As required under Section 217 (2AA) of the Companies Act, 1956, your Directors hereby state and
confirm that:
in preparation of the Annual Accounts, the applicable accounting standards have been followed(a)
along with proper explanation relating to material departures;
the Directors have selected such accounting policies and applied them consistently and made(b)
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 ended on 31st
March, 2011 and of
the profit of the Company for that year;
the Directors have taken proper and sufficient care for the maintenance of adequate accounting(c)
records for the year ended 31st
March, 2011 in accordance with the provisions of the Companies
Act, 1956 for safeguarding the assets of the Company and for prevention and detection of fraud
and other irregularities;
the Directors have prepared the Annual Accounts on a going concern basis.(d)
Information pursuant to Section 217 (2A) of the Companies Act, 1956:
The Information regarding particulars of employees as required under Section 217 (2A) of the
Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, and Companies
(Particulars of Employees) Amendment Rules, 2011 is not applicable to the Company.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:
The particulars as required under Section 217(1)(e) of the Companies Act, 1956 read with Companies
Part A & B pertaining to conservation of energy and technology absorption are not applicable1.
to the Company.
(Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are as under:
Director’s Report
33. Foreign Exchange earnings and outgo:2.
Earnings - NIL
Outgo - Rs. 1113.2 Lacs
Corporate Governance:
Transparency is the cornerstone of your Company’s philosophy and all requirements of Corporate
Governance are adhered to both in letter and spirit. The Audit Committee, shareholders/ Investors
as required in terms of Clause 49 of the Listing Agreement. Your Board of Directors has taken all
necessary steps to ensure compliance with all statutory and listing requirements. The Directors and key
management personnel of your Company have complied with the code of conduct which was put in
place by the Board of Directors. Apart from being in compliance with all requirements of clause 49 of
the Listing Agreement, your Company has voluntarily adopted certain governance principles. Setting
up of the Remuneration Committee of Directors and introduction of a Model code for Insider Trading
are some of the initiatives taken by your Company towards this end.
The Report on Corporate Governance as required under the Listing Agreement forms part of this
Report. A Certificate from Practicing Company Secretary on compliance with Corporate Governance
requirements along with a certificate from the CEO and CFO as required under Clause 49 of the
Listing Agreement are annexed with this Report.
Auditors:
You are requested to appoint the statutory auditors for the ensuing year 2011-12.
Reply: The Auditors have qualified their Report stating that the Statements have been consolidated based
on unaudited financial statements. This relates to Denovo Enterprise Private Limited which expressed
its inability to provide audited financial accounts as it is not following 31st March as its year end and
hence its accounts are not audited as on that date. The Management of the Company, however, has
provided the accounts of the Subsidiary as on 31st
March, 2011 duly certified by its management and
the statutory auditors.
Acknowledgement:
The Board wishes to place on record its appreciation of sincere efforts put in by the employees of the
Company, in helping it reach its current growth level.
Grievance, Share Allotement and Share Transfer Committee; of the Board meet at regular interval
Clause 2: Unaudited Financial Statements of a Subsidiary:
Auditors’ Report on Consolidated Financial Statements:
Director’s Report
34. 33Annual Report 2010-2011
Your Directors place on record their appreciation for the support and assistance received from the
investors, customers, vendors, bankers, financial institutions, business associates, regulatory and
government authorities.
For and on behalf of the Board
Talwalkars Better Value Fitness Limited.
Prashant Talwalkar Anant Gawande
Managing Director & CEO Whole-time Director & CFO
Date: 14th
June 2011
Place: Mumbai
Director’s Report
35. The scalability of our business model has
demonstrated a winning formula of acumen and
commitment, and seen Talwalkars set up over
100 health clubs in more than 50 towns in India.
Add experience
and technical
know-how to
ambition to
multiply
the results
37. The Report on Corporate Governance in compliance with Clause 49 of the Listing Agreement with the
Stock Exchanges is as follows:
Company’s Philosophy on Corporate Governance:
Talwalkars Better Value Fitness Limited believes that good Corporate Governance is essential to achieve
long-term corporate goals, enhance shareholders’ value and attain highest level of transparency. The
Company is committed to achieve the highest standard of Corporate Governance, accountability and
equity in all facets of its operations and in all interaction with stakeholders. The Company believes that
all its operations and actions must serve the underlined goal of enhancing customers’ satisfaction and
shareholders’ value over a sustained period of time.
Your Secretarial Compliance Report comprises of the following:
I. Board of Directors.
II. Board Committees.
III. General Body Meetings.
IV. Subsidiary Companies.
V. Other Disclosures.
I. Board of Directors:
A. The Board of Directors comprises six Whole-time Directors (one is Executive Chairman; one is
Managing Director & CEO and one is Whole-time Director & CFO, three are Whole-time Directors)
and six Independent Directors making it optimal combination of knowledge, experience and
professionalism.
During the year, eight Board Meetings were held on 15th
April, 2010, 28th
April, 2010, 4th
May,
2010, 7th
July, 2010, 12th
August, 2010, 23rd
September, 2010, 28th
October, 2010 and 27th
January, 2011.
B. The Composition of the Board of Directors, their attendance at the board meeting during the year
and at the last Annual General Meeting along with number of other directorships, committee
chairmanship/memberships is as follows:
Name of Directors Category of No. of
Board
Meetings
Attended
Attendance
at last AGM
held on
23.09.2010
No. of
Directorships
in all other
Companies *
Committee
Memberships/
Chairmanship in all
Companies **
Member Chairman
Mr. Madhukar Talwalkar EC 07 Yes Nil Nil Nil
Mr. Prashant Talwalkar MD & CEO 08 Yes Nil Nil Nil
Mr. Vinayak Gawande WTD 07 Yes 01 Nil Nil
Mr. Girish Talwalkar WTD 07 Yes Nil 01 Nil
Mr. Harsha Bhatkal WTD 08 Yes 01 Nil Nil
Mr. Anant Gawande WTD & CFO 08 Yes 01 02 Nil
Directorship
Report on Corporate Governance
38. 37Annual Report 2010-2011
Mr. Manohar Bhide ID 07 Yes 04 03 01
Mr. Raman Maroo ID 07 No 01 Nil Nil
Mr. Mohan Jayakar ID 05 Yes 07 Nil Nil
Dr. Avinash Phadke ID 08 Yes Nil 01 Nil
Mr. Abhijeet Patil ID 06 Yes Nil 02 02
Mr. Glenn Saldanha ID 04 No 03 01 Nil
Note:
* Directorships across all the companies excluding Private Companies, Foreign Companies and
Companies registered under Section 25 of the Companies Act, 1956.
** Chairmanship and Membership of Audit Committee and Shareholders/ Investors Grievance, Share
Allotment and Share Transfer Committee only for membership across all the companies excluding
Private Companies, Foreign Companies and Companies registered under Section 25 of the Companies
Act, 1956.
EC – Executive Chairman, MD & CEO – Managing Director & Chief Executive Officer WTD & CFO
– Whole-time Director & Chief Financial Officer, WTD – Whole-time Director, ID – Independent
Director
Except sitting fees, no other remuneration is paid to Independent Directors. Leave of absence is granted
to the directors absent for meetings.
C. Relationship between Directors:
Mr. Madhukar Vishnu Talwalkar, Executive Chairman of the Company and Mr. Girish Madhukar
Talwalkar, Whole-time Director of the Company, being father and son, are related to each other.
Mr. Vinayak Ratnakar Gawande, Whole-time Director and Mr. Anant Ratnakar Gawande, Whole-time
Director & Chief Financial Officer of the Company being brothers, are related to each other.
Mr. Madhukar Vishnu Talwalkar, Executive Chairman of the Company and Mr. Prashant Sudhakar
Talwalkar, Managing Director and Chief Executive Director, being uncle and nephew, are related to
each other.
D. Appointment of Directors retiring by rotation:
The following Directors retire by rotation in accordance with the provisions of the Companies Act,
1956 and being eligible, have offered themselves for re-appointment at the ensuing Annual General
Meeting:
Mr. Anant Ratnakar Gawandei)
Mr. Manohar Gopal Bhideii)
Dr. Avinash Achyut Phadkeiii)
Report on Corporate Governance
39. E. Code of Conduct:
The Company has adopted a Code of Conduct (“the code”) for Directors and Senior Management on 7th
July, 2010, which is in compliance with the requirements of Clause 49 of the Listing Agreement entered
into with the Stock Exchanges. The Code of Conduct is also posted on the Company’s website.
All the Directors and Members of the Senior Management have affirmed the compliance with the Code
of Conduct for the year under review. The Declaration to this effect signed by the Managing Director &
Chief Executive Officer is annexed to this report.
F. Remuneration paid to Managing Director/ Whole-time Directors for the year ended 31st
March,
2011.
Details of remuneration paid to Managing Director/ Whole-time Directors is as follows:
Names of Managing Director /
Whole-time Directors
Gross
Salary
(Rs.)
Commi-
ssion
(Rs)
Perquisites
(Rs.)
Retirement
Benefits
(Rs.)
Stock
Option
Mr. Madhukar Vishnu Talwalkar 42,00,000 -- -- -- --
Mr. Prashant Sudhakar Talwalkar 42,00,000 -- -- -- --
Mr. Vinayak Ratnakar Gawande 42,00,000 -- -- -- --
Mr. Girish Madhukar Talwalkar 42,00,000 -- -- -- --
Mr. Harsha Ramdas Bhatkal 42,00,000 -- -- -- --
Mr. Anant Ratnakar Gawande 42,00,000 -- -- -- --
G. Sitting Fees to Independent Directors:
The Independent Directors are paid sitting fees @ Rs. 10,000/-per meeting of the Board or its
Committees. Details of sitting fees paid to Independent Directors for the period from 1st
April, 2010 to
31st
March, 2011 are as follow:
Names of the Independent Directors Sitting Fees (In Rs.)
Mr. Manohar Gopal Bhide 80,000
Mr. Raman Hirji Maroo 70,000
Mr. Mohan Motiram Jayakar 50,000
Dr. Avinash Achyut Phadke 1,10,000
Mr. Abhijeet Rajaram Patil 1,40,000
Mr. Glenn Mario Saldanha 40,000
Report on Corporate Governance
40. 39Annual Report 2010-2011
H. Details of shares held by Independent Directors:
Details of Shares held by the Independent Directors as on 31st
March, 2011 are as follows:
Names of the Independent Directors No. of Shares held
Mr. Manohar Gopal Bhide 6,296
Mr. Raman Hirji Maroo --
Mr. Mohan Motiram Jayakar --
Dr. Avinash Achyut Phadke 64,000
Mr. Abhijeet Rajaram Patil --
Mr. Glenn Mario Saldanha --
II. Board Committees:
The Board has constituted five Committees:
1) Audit Committee;
2) Remuneration/ Compensation Committee;
3) Shareholders/ Investors Grievance, Share Allotment and Share Transfer Committee;
4) IPO Committee; and
5) Management Committee.
1) Audit Committee:
The Audit Committee was constituted vide Board Resolution dated 11th
November, 2009 under the
Chairmanship of Mr. Abhijeet Rajaram Patil, who comes with finance and accounting background.
The terms of reference of the Audit Committee cover the matters specified under Section 292A of the
Companies Act, 1956 and Clause 49 of the Listing Agreement. The Audit Committee consists of the
following Directors:
Name of the Director Designation in the
Committee
Nature of Directorship
Mr. Abhijeet Rajaram Patil Chairman Independent Director
Dr. Avinash Achyut Phadke Member Independent Director
Mr. Anant Ratnakar Gawande Member Whole-time Director and CFO
The Audit Committee enjoys following powers: -
To invite such of the executives, as it considers appropriate (and particularly the head of finance1.
function) to be present at the meetings of the Committee;
To investigate any activity within its terms of reference;2.
To seek information from any employee;3.
Report on Corporate Governance
41. To obtain outside legal or other professional advice; and4.
To secure attendance of outsiders with reasonable expertise, if considered necessary.5.
The scope of Audit Committee shall include but shall not be restricted to the following:
1) Overseeing Company’s financial reporting process and the disclosure of its financial
information to ensure that the financial statement is correct, sufficient and credible.
2) Recommending to the Board, the appointment, re-appointment and, if required, the
replacement or removal of the statutory auditor and the fixation of audit fees.
3) Approval of payment to statutory auditors for any other services rendered by the statutory
auditors.
4) Appointment, removal and terms of remuneration of internal auditors.
5) Reviewing, with the management, the annual financial statements before submission to the
Board for approval, with particular reference to:
• Matters required to be included in the Director’s Responsibility Statement to
be included in the Board’s report in terms of clause (2AA) of Section 217 of the
Companies Act, 1956;
• Changes, if any, in accounting policies and practices and reasons for the same;
• Major accounting entries involving estimates based on the exercise of judgment by
management;
• Significant adjustments made in the financial statements arising out of audit
findings;
• Compliance with listing and other legal requirements relating to the financial
statements;
• Disclosure of any related party transactions;
• Qualifications in the draft audit report;
6) Reviewing, with the management, the quarterly financial statements before submission to
the Board for approval;
7) Reviewing, with the management, the statement of uses / application of funds raised
through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds
utilized for purposes other than those stated in the offer document/prospectus/notice and
the report submitted by the monitoring agency monitoring the utilisation of proceeds of a
public or rights issue, and making appropriate recommendations to the Board to take up
steps in this matter;
8) Monitoring the use of the proceeds of the proposed initial public offering of the
Company.
9) Reviewing, with the management, performance of statutory and internal auditors, and
adequacy of the internal control systems;
Report on Corporate Governance
42. 41Annual Report 2010-2011
10) Reviewing the adequacy of internal audit function, if any, including the structure of the
internal audit department, staffing and seniority of the official heading the department,
reporting structure, coverage and frequency of internal audit;
11) Reviewing management letters / letters of internal control weaknesses issued by the statutory
auditors;
12) Discussion with internal and statutory auditors on any significant findings and reviewing
findings of internal investigations by internal auditors, like matters of fraud or irregularity
or failure of internal control systems, if any;
13) Reviewing the findings of any internal investigations by the internal auditors into matters
where there is suspected fraud or irregularity or a failure of internal control systems of a
material nature and reporting the matter to the Board;
14) Discussion with the statutory auditors before the audit commences, about the nature and
scope of audit as well as post-audit discussion to ascertain any area of concern;
15) To look into the reasons for substantial defaults in the payment to the depositors, debenture
holders, shareholders (in case of non payment of declared dividends) and creditors;
16) To review the functioning of the Whistle Blower mechanism, when the same is adopted by
the Company and is existing;
17) Carrying out any other function as may be statutorily required to be carried out by the Audit
Committee;
The Audit Committee shall mandatorily review the following information:
Management discussion and analysis of financial condition and results of operations;a.
Statement of significant related party transactions (as defined by the audit committee),b.
submitted by management;
Management letters / letters of internal control weaknesses issued by the statutory auditors;c.
Internal audit reports relating to internal control weaknesses; andd.
The appointment, removal and terms of remuneration of the Chief internal auditor shall bee.
subject to review by the Audit Committee.
The recommendations of the Audit Committee on any matter relating to financial management, including
the audit report, are binding on the Board. If the Board is not in agreement with the recommendations
of the Committee, reasons for disagreement shall have to be minuted in the Board Meeting and the
same has to be communicated to the shareholders. The Chairman of the committee has to attend
the Annual General Meetings of the Company to provide clarifications on the matters relating to the
audit.
During the year four Audit Committee meetings were held on 24th
June, 2010, 12th
August, 2010, 28th
October, 2010 and 27th
January, 2011.
Report on Corporate Governance
43. The attendance record of the Audit Committee members is given below:
Name of the Members No. of Meetings
Held Attended
Mr. Abhijeet Rajaram Patil 04 04
Dr. Avinash Achyut Phadke 04 04
Mr. Anant Ratnakar Gawande 04 04
2) Remuneration Committee/ Compensation Committee:
For Remuneration of Directors, our Company has constituted Remuneration/ Compensation Committee
vide Board Resolution dated 11th
November, 2009. Committee has powers of recommending
remuneration package to all Directors as per the requirements of the Clause 49 of the Listing Agreement
for Corporate Governance.
The composition of the Remuneration / Compensation Committee is as follows:
Name of the Director Designation in the
Committee
Nature of Directorship
Mr. Manohar Gopal Bhide Chairman Independent Director
Dr. Avinash Achyut Phadke Member Independent Director
Mr. Abhijeet Rajaram Patil Member Independent Director
The scope of Remuneration/Compensation Committee shall include but shall not be restricted to the
following:
To recommend to the Board, the remuneration packages of Company’s Managing/Joint1)
Managing/ Deputy Managing/ Whole-time / Executive Directors, including all elements of
remuneration package (i.e. salary, benefits, bonuses, perquisites, commission, incentives,
stock options, pension, retirement benefits, details of fixed component and performance linked
incentives along with the performance criteria, service contracts, notice period, severance fees
etc.);
To be authorised at its duly constituted meeting to determine on behalf of the Board of Directors2)
and on behalf of the shareholders with agreed terms of reference, Company’s policy on specific
remuneration packages for Company’s Managing/Joint Managing/ Deputy Managing/
Wholetime/ Executive Directors, including pension rights and any compensation payment;
To implement, supervise and administer any share or stock option scheme of the Company;3)
To attend to any other responsibility as may be entrusted by the Board within the terms of4)
reference.
During the year, no meeting of Remuneration/ Compensation Committee of the Board was held.
Report on Corporate Governance
44. 43Annual Report 2010-2011
3) Shareholders’ / Investors’ Grievance, Share Allotment and Share Transfer Committee:
For redressing the Shareholder/ Investor complaints, the Company had first constituted Shareholders’/
Investors Grievance, Share Allotment and Share Transfer Committee vide resolution dated 16th
November, 2009 as per the requirements of the Clause 49 of the Listing Agreement for Corporate
Governance. The present committee consists of the following members:-
Name of the Director Designation in the
Committee
Nature of Directorship
Mr. Abhijeet Rajaram Patil Chairman Independent Director
Mr. Girish Madhukar Talwalkar Member Whole-time Director
Mr. Anant Ratnakar Gawande Member Whole-time Director and CFO
This committee will address all grievances of Shareholders/Investors in compliance of the provisions
of clause 49 of the Listing Agreements with the Stock Exchanges and its terms of reference include the
following:
Efficient transfer of shares; including review of cases for refusal of transfer/transmission of1)
shares and debentures;
Redressing of shareholders and investor complaints such as non-receipt of declared dividend,2)
annual report, transfer of Equity Shares and issue of duplicate/split/ consolidated share
certificates;
Monitoring transfers, transmissions, dematerialization, re-materialization, splitting and3)
consolidation of Equity Shares and other securities issued by our Company, including review of
cases for refusal of transfer/ transmission of shares and debentures;
Allotment and listing of shares in future;4)
Review of cases for refusal of transfer / transmission of shares and debentures;5)
Reference to statutory and regulatory authorities regarding investor grievances;6)
Ensure proper and timely attendance and redressal of investor queries and grievances; and7)
To do all such acts, things or deeds as may be necessary or incidental to the exercise of the8)
above powers.
During the year, four Shareholders/ Investors Grievance, Share Allotment and Share Transfer Committee
Meetings were held on 15th
June, 2010, 6th
July, 2010, 28th th
October, 2010 and 27 January, 2011.
Report on Corporate Governance
45. The attendance record of the Shareholders/ Investors Grievance, Share Allotment and Share Transfer
Committee members is given below:
Name of the Members No. of Meetings
Held Attended
Mr. Abhijeet Rajaram Patil 04 03
Mr. Girish Madhukar Talwalkar 04 03
Mr. Anant Ratnakar Gawande 04 04
4) IPO Committee:
The IPO Committee was constituted vide Board Resolution dated 9th
November, 2009 to oversee and
inform the Audit Committee when money is raised through prospectus or rights or preferential issues
and shall inform of funds received, utilized, pending for project implementation etc. for the information
of the Stock Exchanges and Investors and shall keep the information up dated through our Company’s
website. The composition of the IPO Committee is as follows:
Name of the Director Designation in the
Committee
Nature of Directorship
Mr. Manohar Gopal Bhide Chairman Independent Director
Mr. Vinayak Ratnakar Gawande Member Whole-time Director
Mr. Girish Madhukar Talwalkar Member Whole-time Director
Mr. Anant Ratnakar Gawande Member Whole-time Director and CFO
The terms of reference of the IPO Committee of our Company includes:
to decide on the actual size of the Issue, including any reservation shareholders of promoting1)
companies or shareholders of group companies and/or any other reservations or firm allotments
as may be permitted, timing, pricing and all the terms and conditions of the Issue of the shares,
including the price, and to accept any amendments, modifications, variations or alterations
thereto;
to appoint and enter into arrangements with the Book Running Lead Manager, Co-Managers2)
to the Issue, Underwriters to the Issue, Syndicate Members to the Issue, Advisors to the Issue,
Stabilizing Agent, Brokers to the Issue, Escrow Collection Bankers to the Issue, Registrars, Legal
Advisors to the Issue, Legal Advisors to our Company, Legal Advisors as to Indian and overseas
jurisdictions, advertising and/or promotion or public relations agencies and any other agencies
or persons;
to finalize and settle and to execute and deliver or arrange the delivery of the offering3)
documents (Draft Red Herring Prospectus, Red Herring Prospectus, Final Prospectus) (including
the international wrap and final international wrap, if required, for marketing of the Issue in
jurisdictions outside India), syndicate agreement, underwriting agreement, escrow agreement,
stabilization agreement and all other documents, deeds, agreements and instruments as may
be required or desirable in connection with the Issue of shares or the Issue by our Company;
Report on Corporate Governance
46. 45Annual Report 2010-2011
to open one or more separate current account(s) in such name and style as may be decided,4)
with a scheduled bank to receive applications along with application monies in respect of the
Issue of the shares of our Company;
to open one or more bank account of our Company in such name and style as may be decided5)
for the handling of refunds for the Issue;
to make any applications to the RBI, FIPB and such other authorities, as may be required, for the6)
purpose of Issue of shares by our Company to non-resident investors including but not limited
to NRIs, FIIs, FVCI’s and other non-residents;
to make applications for listing of the equity shares of our Company in one or more stock7)
exchange(s) and to execute and to deliver or arrange the delivery of the listing agreement(s) or
equivalent documentation to the concerned stock exchange(s);
to settle all questions, difficulties or doubts that may arise in regard to the Issue or allotment of8)
shares as it may, in its absolute discretion deem fit; and
to do all such acts, deeds, matters and things as it may, in its absolute discretion, deem necessary9)
or desirable for such purpose, or otherwise in relation to the Issue or any matter incidental or
ancillary in relation to the Issue, including without limitation, allocation and allotment of the
shares as permissible in law, issue of share certificates in accordance with the relevant rules.
During the year, one IPO Committee Meeting was held on 26th
April, 2010.
The attendance record of the IPO Committee members is given below:
Name of the Members No. of Meetings
Held Attended
Mr. Manohar Gopal Bhide 01 01
Mr. Vinayak Ratnakar Gawande 01 01
Mr. Girish Madhukar Talwalkar 01 01
Mr. Anant Ratnakar Gawande 01 01
5) Management Committee:
The Management Committee was constituted vide Board Resolution dated 23rd
March, 2010 to review
the operations of the committee. The composition of the Management Committee is as follows:
Name of the Director Designation in the
Committee
Nature of Directorship
Mr. Madhukar Vishnu Talwalkar Chairman Whole-time Director
Mr. Prashant Sudhakar Talwalkar Member Managing Director and CEO
Mr. Vinayak Ratnakar Gawande Member Whole-time Director
Mr. Girish Madhukar Talwalkar Member Whole-time Director and CFO
Mr. Harsha Ramdas Bhatkal Member Whole-time Director
Report on Corporate Governance
47. Mr. Anant Ratnakar Gawande Member Whole-time Director
Mr. Manohar Gopal Bhide Member Independent Director
Mr. Abhijeet Rajaram Patil Member Independent Director
The terms of reference of the Management Committee of the Company includes:
To review ongoing operations of the Company.1.
To carry out such business as has been delegated by the Board in so far as:2.
To open new bank account(s) in the name of the Company or to close any existinga.
bank account(s) as and when required and to authorise directors and / or executives to
operate such bank account and with such limits as are approved by the Management
Committee from time to time.
To open domestic or international Letters of Credit (LC) from time to time, on behalf ofb.
the Company for its CAPEX or other requirements.
To open or close any Fixed Deposit Account(s) with any of the banks or any otherc.
financial institutions.
To discuss, negotiate and to give permission to enter into any franchise agreementd.
with any of the existing Franchisee to start new gym(s) as a franchisee of the Company
or cancel any existing franchise agreement with any of the existing franchisee for any
reason; or to appoint as franchise.
To shortlist and enter into the Leave and License Agreement or Lease Agreement as thee.
case may be for the proposed new Gyms as well as guest house for the Company or
renew any expiring licenses / leases for the existing gyms or guest house.
To appoint any authorised person and to give authority by execution of Special Powerf.
of Attorney on behalf of the Company to enter into and register with the Registrar
of Assurances the leave and license or lease agreement as the case may be for the
execution of agreement for new gyms or guest house or for renewal of the existing
agreement(s).
To authorise or appoint any outside professional or consultant for and on behalf ofg.
the Company for such work as the Management Committee may deem fit and fix their
remuneration.
During the year one Management Committee Meeting was held on 16th
July, 2010.
Report on Corporate Governance
48. 47Annual Report 2010-2011
The attendance record of the Management Committee members is given below:
Name of the Members No. of Meetings
Held Attended
Mr. Madhukar Vishnu Talwalkar 01 01
Mr. Prashant Sudhakar Talwalkar 01 01
Mr. Vinayak Ratnakar Gawande 01 01
Mr. Girish Madhukar Talwalkar 01 01
Mr. Harsha Ramdas Bhatkal 01 01
Mr. Anant Ratnakar Gawande 01 01
Mr. Manohar Gopal Bhide 01 Nil
Mr. Abhijeet Rajaram Patil 01 01
III. General Body Meetings:
A. Annual General Meeting (AGM):
The date, time and venue of the Annual General Meetings held in last three (03) years are as under:
Financial
Year
Date Time Venue Special Resolutions Passed
2007-2008 30th
September,
2008
10.30
a.m.
801-813, Mahalaxmi
Chambers, 22,
Bhulabhai Desai Road,
Mumbai - 400 026.
• Re-organisation of
Authorised Share Capital.
• Sub-division of Shares.
• Alteration of Clause
V of Memorandum of
Association.
2008-2009 10th
September,
2009
11.00
a.m.
801-813, Mahalaxmi
Chambers, 22,
Bhulabhai Desai Road,
Mumbai - 400 026.
• Revision of term of
remuneration, re-
designation & re-
appointment of Executive
Directors
(5 separate resolutions for
5 Executive Directors).
• Revision of term of
remuneration & re-
designation of Managing
Director.
Report on Corporate Governance
49. 2009-2010 23rd
September,
2010
11.30
a.m.
M.C. Ghia Hall,
Bhogilal Hargovindas
Building, 2nd Floor
Kala Ghoda, 18/20, K.
Dubash Marg, Mumbai
- 400 001.
No Special Resolution was
passed
B. Extra Ordinary General Meeting (EGM):
The date, time and venue of the Extra-Ordinary General Meetings held in last 3 years are as under:
Financial
Year
Date Time Venue Special Resolutions Passed
2009-2010 8th
July, 2009 11.00 a.m. 801-813, Mahalaxmi
Chambers, 22,
Bhulabhai Desai Road,
Mumbai - 400 026.
• Appointment of Managing
Director.
2009-2010 4th
August, 2009 11.00 a.m. 801-813, Mahalaxmi
Chambers, 22,
Bhulabhai Desai Road,
Mumbai - 400 026.
• Alteration of Articles of
Association by addition of
Depository Clause.
2009-2010 24th
August,
2009
11.00 a.m. 801-813, Mahalaxmi
Chambers, 22,
Bhulabhai Desai Road,
Mumbai - 400 026.
• Alteration / Addition in
Object Clause.
2009-2010 1st
October,
2009
11.00 a.m. 801-813, Mahalaxmi
Chambers, 22,
Bhulabhai Desai Road,
Mumbai - 400 026.
• Conversion of Company
from Pvt. Ltd. to Public Ltd.
2009-2010 9th
November,
2009
12.00 p.m. 801-813, Mahalaxmi
Chambers, 22,
Bhulabhai Desai Road,
Mumbai - 400 026.
• Approval u/s. 81(1A) of the
Companies Act, 1956.
• Investment in Equity Shares
of the Company by FIIs.
2009-2010 14th
November,
2009
1.00 p.m. 801-813, Mahalaxmi
Chambers, 22,
Bhulabhai Desai Road,
Mumbai - 400 026.
• Issue of Bonus Shares.
• Increase in Borrowing Limits
of the Company.
• Creation of Charge.
• Re-appointment of
Executive Chairman for
further period of 5 years
aged above Seventy Years.
• Commission to Non-
Executive Directors.
Report on Corporate Governance
50. 49Annual Report 2010-2011
C. Postal Ballot:
No special resolution was passed through postal ballot during the year 2010 – 11.
IV. Subsidiary Companies:
Your Company has three subsidiaries as on 31st
March, 2011, which are as under:
Denovo Enterprises Private Limited1)
Equinox Wellness Private Limited.2)
Aspire Fitness Private Limited.3)
All the above stated subsidiaries are active in the same business of running the health clubs.
Denovo Enterprises Private Limited (DEPL).1.
Denovo Enterprises Private Limited, incorporated on 8th
February, 2005, was the joint venture Company.
DEPL was converted from the JVC to 50.1% Subsidiary Company vide approval of the Board of Directors
granted in the Meeting held on 28th
October, 2010.
As at 31st
March, 2011, we hold 50,100 equity shares of Rs. 100/- (Rupees One Hundred only) each
i.e. 50.1% of paid-up capital of DEPL.
Equinox Wellness Private Limited (EWPL).2.
Equinox Wellness Private Limited, incorporated on 8th
June, 2004, is step-down subsidiary of your
Company. As at 31st
March, 2011, we hold 50.1% of paid-up capital of Denovo Enterprises Private
Limited which, in turn, holds 4,00,000 equity shares of Rs. 10/- (Rupees Ten only) each i.e., 66.67% of
the paid-up capital of Equinox Wellness Private Limited.
Accordingly, we 33.4% of the paid-up capital of the Equinox Wellness Private Limited. (50.1% of the
66.67% of the paid-up capital). EWPL was converted to subsidiary company vide approval of the Board
of Directors granted in the Meeting held on 28th
October, 2010
Aspire Fitness Private Limited (AFPL).3.
Aspire Fitness Private Limited, incorporated on 5th
December, 2009, was the joint venture company.
AFPL was converted from JVC to the 50.001% Subsidiary Company vide approval of the Board of
Directors granted in the Meeting held on 28th
October, 2010.
As at 31st
March, 2011, we hold 50,001 equity shares of Rs. 100/- (Rupees One Hundred only) each
i.e., 50.001% of the paid-up capital of AFPL.
V. Other Disclosures:
A. Disclosure of Related Party Transactions:
All related party transactions have been entered into in the ordinary course of business and were
placed periodically before the Audit Committee and the Board. All transactions with the related parties
or others were on an arm’s length basis.
Report on Corporate Governance
51. B. Disclosure of Accounting Treatment:
All Accounting Standards mandatorily required have been followed in preparation of financial statements
and no deviation has been made in following the same.
C. Risk Management Framework:
The company has in place mechanisms to inform the Board Members about the Risk Assessment
and Minimization procedures and periodical reviews to ensure that risk is controlled by the Executive
Management through the means of a properly defined framework.
D. Details of Utilisation of the funds out of the proceeds from the Public Issue:
The details of the utilization of funds out of the proceeds of the Issue as on 31st
March, 2011 are as
stated below:
Particulars Fund requirement as stated
in Prospectus
Deployment of Funds as on 31st
March, 2011
(Rs. In Lacs)
Setting up of additional health clubs 5,022.00 3,950.00
Repayment of unsecured loans 2,059.20 2,059.20
Meeting Issue related expenses 662.80 662.80
Total 7,744.00 6,672.00
The Company utilised Rs. 66,72,00,000/- till 31st
March, 2011 out of the total proceeds from the
Public Issue of Rs. 77,44,00,000/-.
E. Details of Unclaimed Shares Allotted in the (IPO) Initial Public Offering
The Company has in it’s IPO allotted 60,50,000 Equity Shares of Rs. 10/- each at a price of Rs. 128/-
per equity share (including a share premium of Rs. 118/- per equity share) to the Shareholders out of
which Unclaimed Shares are transferred to a Special Account opened by the Company viz. Unclaimed
Shares Demat Suspense Account.
Details of the Shares in the Unclaimed Shares Demat Suspense Account is as follows:
Report on Corporate Governance
52. 51Annual Report 2010-2011
The voting rights on the said unclaimed shares shall remain frozen till the rightful owners of such shares
claims the shares. The respective shareholders may approach the Company Secretary or M/s. Link
Intime India Private Limited, Registrar and Transfer Agents of the Company for claiming their shares.
* The unclaimed shares Demat Suspense Account is Opened by the Company on 15th
September,
2010 and shares have been subsequently transferred to the said account on 21st
September, 2010 and
23rd
September, 2010 respectively.
F. Means of Communication:
Quarterly and Audited Financial Results are published in the following Newspapers:i)
The Economic Times
The Free Press Journal
Maharashtra Times
NavShakti
The Company’s website at www.talwalkars.net is regularly updated with the financial results.ii)
The Management Discussion and Analysis Report, in Compliance with the requirements of Clause 49iii)
of the Listing Agreement is annexed to the Annual Report and forms part of this Annual Report.
G. General Shareholders Information:
i. Annual General Meeting
Date and Time
Venue Garware Club House, 1st Main Building,
Wankhede Stadium, D Road, Churchgate,
Mumbai – 400020
ii.Financial Calendar 2011-12
(Tentative) Results
Reporting
Unaudited Results for the quarter ending
30th June, 2011
On or before 15th
August, 2011.
Unaudited Results for the quarter ending
30th September, 2011
On or before 15th
November, 2011
Unaudited Results for the quarter ending
31st December, 2011
On or before 15th
February, 2012
Unaudited Results for the quarter and year
ending 31st March, 2012
On or before 15th
May, 2012
Audited Results for the year ending 31st
March, 2012
On or before 15th
July, 2012
AGM for the approval of the Audited ac-
counts for the year ended 31st March,
2012
On or before 30th
September, 2012
Friday, 12th August, 2011 at 12.00 p.m.
Report on Corporate Governance
53. Financial Year 1st
April to 31st
March
iii. Book Closure Date 6th August, 2011 to 12th August, 2011
(both days inclusive)
iv. Dividend payment date On or after 12th
August, 2011
H. Listing:
Equity
Equity Shares of the Company are Listed on National Stock Exchange of India Limited (NSE) and
Bombay Stock Exchange Limited (BSE) with effect from 10th May, 2010.
STOCK CODES
BSE: 533200
NSE: TALWALKARS
ISIN Number for NSDL and CDSL for Dematerialised Shares: INE502K01016
Debt Securities
300Non-ConvertibleDebtSecurities(NCDs)ofRs.10,00,000/- eachaggregatingtoRs.30,00,00,000/-
issued and allotted on 25th January, 2011 on Private Placement basis are listed with the Bombay Stock
Exchange Limited (BSE) in the List of securities of “F - Group - Debt Instruments” effective from 24th
February, 2011
STOCK CODES
BSE: Scrip Code: 947096 Scrip ID: TBVFL250111
ISIN Number for NSDL and CDSL for Dematerialised Shares: INE502K07013
The Company has paid the listing fees in full for the year 2011-12 to the aforesaid Stock Exchanges
within the stipulated time.
I. Outstanding GDRs/ADRs/Warrants or any convertible instruments, conversion date and likely
impact on equity:
The Company has not issued any GRDs, ADRs, Warrants or any other convertible instruments.
Report on Corporate Governance
54. 53Annual Report 2010-2011
J. Stock Market price data for the year on NSE & BSE:
The Monthly High and Low Prices of the Equity on NSE & BSE during the year are as under:
Month NSE(#) BSE(#)
High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)
April 2010 (*) (*) (*) (*)
May 2010 230.20 132.00 203.00 132.00
June 2010 196.50 162.35 197.00 162.20
July 2010 187.70 164.55 187.50 165.10
August 2010 222.00 170.60 222.00 171.15
September 2010 259.70 200.55 259.90 200.60
October 2010 268.70 218.20 245.00 218.50
November 2010 297.90 233.20 297.25 234.50
December 2010 306.80 247.05 305.80 247.70
January 2011 281.40 197.65 281.95 197.00
February 2011 232.30 168.30 233.00 170.00
March 2011 233.85 191.00 234.50 191.10
(#) Source NSE and BSE web-site.
(*) The Company got listed on 10th
May, 2010, hence the figures for said period are not applicable.
K. Share Price in Relation to BSE Sensex:
180.00
220.00
260.00
300.00
340.00
380.00
M
ay-10Jun-10Jul-10
Aug-10Sep-10O
ct-10N
ov-10D
ec-10Jan-11
Feb-11
M
ar-11
16000.00
17000.00
18000.00
19000.00
20000.00
21000.00
22000.00
TALWALKARS BSE HIGH BSE Sensex
Share Price in Relation to BSE Sensex for the month of April -2010 is not provided as the Company got listed on
10th
May, 2010.
Report on Corporate Governance
55. L. Share Transfer System:
The share transfers/ transmissions are approved by the Shareholders/ Investors Grievance, Share
Allotment and Share Transfer Committee. There are no share transfer requests pending as on 31st
March, 2011.
The Company’s Shares are required to be compulsorily traded in the Stock Exchanges in the
dematerialized form. Shares in the physical mode which are lodged for transfer are processed and
returned within the stipulated time.
The Board of Directors of the Company has delegated the power to approve the share transfers to
Registrar and Share Transfer Agents M/s. Link Intime India Private Limited having its office at C-13,
Pannalal Silk Mills Compound, L. B. S. Marg, Bhandup (West), Mumbai – 400 078.
M. Distribution of Shareholding as on 31st
March, 2011.
No. of equity shares held No. of Shareholders No. of Shares held % of Share holding
Upto 500 5,490 4,28,989 1.78
501 to 1,000 155 1,24,804 0.52
1,001 to 2,000 63 1,02,776 0.43
2,001 to 3,000 19 48,897 0.20
3,001 to 4,000 20 72,931 0.30
4,001 to 5,000 15 72,411 0.30
5,001 to 10,000 37 2,73,316 1.13
More than 10,000 90 2,29,91,548 95.34
Total 5,889 2,41,15,672 100
N. Shareholding Pattern as on 31st
March, 2011.
Category No. of Share held % of Share holding
Promoters & Promoters Group 14,346,656 59.49
Other Directors & their relatives 70,296 0.29
Clearing Member 80,118 0.33
Other Bodies Corporate 14,60,216 6.06
Foreign Institutional Investors (FII’s) 13,64,897 5.66
Mutual Funds 26,83,472 11.13
Non Resident Indians 1,08,233 0.45
Non Resident Indians (Non Repatriable) 1,02,979 0.43
Public 38,98,805 16.17
Total 2,41,15,672 100
Report on Corporate Governance
56. 55Annual Report 2010-2011
O. Dematerialisation of Shares:
As on 31st
March, 2011, 99.46% of the total paid up capital representing 2,39,85,814 shares, was
held in dematerialized form and the balance 0.54% representing 1,29,858 shares was held in physical
form.
P. Address for correspondence:
Registered Office Address:
Talwalkars Better Value Fitness Limited
801-813, Mahalaxmi Chambers,
22, Bhulabhai Desai Road,
Mumbai - 400 026.
Tel. No.: (022) 6612 6300 (324)
Fax No.: (022) 6612 6363 / 6612 6314
The Company has an exclusive e-mail id viz. ig@talwalkars.net to enable investors to register their
complaints, if any.
Shareholders correspondence may be directed to the Company’s Registrar and Share Transfer Agent,
whose address is given below:
Link Intime India Private Limited
(Unit - Talwalkars Better Value Fitness Ltd.)
C-13, Pannalal Silk Mills Compound,
L.B.S. Marg, Bhandup (West),
Mumbai - 400 078.
Tel No: (022) 2594 6970
Fax No:(022) 2596 2691
E-Mail: rnt.helpdesk@linkintime.co.in
Report on Corporate Governance
57. Q. Non-Mandatory Requirements:
The Company has an Executive Chairman on its Board.1.
The Remuneration/ Compensation Committee is constituted by the Board, the details of which are2.
provided under the heading “Remuneration/ Compensation Committee”.
Management.
For and on behalf of the Board
Talwalkars Better Value Fitness Limited.
Prashant Talwalkar Anant Gawande
Managing Director & CEO Whole-time Director & CFO
Date: 14th
June, 2011
Place: Mumbai
3. The qualification in the Auditors Report for the year 2010-11 has been adequately replied by the
Report on Corporate Governance
58. 57Annual Report 2010-2011
Certificates under Report on Corporate Governance
Declaration on Compliance of the Company’s Code of Conduct.
To,
The Shareholders
Talwalkars Better Value Fitness Limited
Mumbai.
The Company has framed a specific Code of Conduct for the members of the Board of Directors and
the Senior Management Personnel of the Company pursuant to Clause 49 of the Listing Agreement
with Stock Exchanges to further strengthen corporate governance practice in the Company.
All the members of the Board and Senior Management Personnel of the Company have affirmed
due observance of the said Code of Conduct in so far as it is applicable to them and there is no non
compliance thereof during the year ended 31st
March, 2011.
For and on behalf of the Board
Talwalkars Better Value Fitness Limited.
Prashant Talwalkar
Managing Director & CEO
Date: 14th
June, 2011
Place: Mumbai
Report on Corporate Governance
59. Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certification
To
The Board of Directors
Talwalkars Better Value Fitness Limited.
Dear Sirs,
Sub: CEO/CFO Certificate
(Issued in accordance with provisions of clause 49 of the Listing Agreement)
We, Prashant Sudhakar Talwalkar, Managing Director & CEO and Anant Ratnakar Gawande, Whole-
time Director & CFO of Talwalkars Better Value Fitness Limited, to the best of our knowledge and belief,
hereby certify that:
We have reviewed the Balance sheet as at 31st March, 2011 and Profit & Loss Account for the
year ended as on that date along with all it’s schedules, notes to the accounts and also the
Cash Flow statement for the year ended 31st March, 2011 and based on our knowledge and
information, confirm that:
i) these statements do not contain any materially untrue statement or omit any material
fact or contain any statement that may be misleading,
ii) these statements together present a true and fair view of the Company’s affairs and are
in compliance with existing accounting standards, applicable laws and regulations.
Based on our knowledge and information, there are no transactions entered into by theb.
Company during the year which are fraudulent, illegal or in violation of the Company’s code
of conduct.
We along with Company’s other certifying officers, accept responsibility forc.
establishing and maintaining internal controls and that we have:
A
B
C
Report on Corporate Governance
60. 59Annual Report 2010-2011
i) evaluated the effectiveness of internal control system of the company, and
ii) disclosed to the Auditors and the Audit Committee, deficiencies, in the design or
operations of internal controls, if any, of which we are aware and steps taken or
proposed to be taken for rectifying these deficiencies.
We, along with Company’s other certifying officers, have indicated to the Auditors and the AuditD.
Committee:
Significant changes in the internal control during the year,
Significant changes in the accounting policies during the year and that the same have(ii)
been disclosed in the notes to the financial statements, and
Instances of significant fraud of which they have become aware and the involvement(iii)
therein, if any, of the management or an employee having a significant role in the
Company’s internal control system over financial reporting.
Yours sincerely,
Prashant Talwalkar Anant Gawande
Managing Director & CEO Whole-time Director & CFO
Date: 14th
June, 2011
Place: Mumbai
(i)
Report on Corporate Governance
61. CERTIFICATE ON CORPORATE GOVERNANCE
To,
The Members of
Talwalkars Better Value Fitness Limited
We have examined the compliance of conditions of Corporate Governance by Talwalkars Better Value
Fitness Limited, for the year ended on 31st March 2011, as stipulated in Clause 49 of the Listing
Agreement of the said Company with stock exchanges in India.
The compliance of conditions of Corporate Governance is the responsibility of the Management. Our
examination has been limited to a review of the procedures and implementation thereof adopted by
the Company for ensuring compliance with the conditions of the Corporate Governance as stipulated
in the said Clause. It is neither an audit nor an expression of opinion on the financial statements of the
Company.
In our opinion and to the best of our information and according to the explanations given to us, we
certify that the Company has complied with the conditions of Corporate Governance as stipulated in
Clause 49 of the above-mentioned Listing Agreement.
We state that such compliance is neither an assurance as to future viability of the Company nor of the
efficiency or effectiveness with which the management has conducted the affairs of the Company.
For Geeta Canabar & Associates
Practicing Company Secretary
ACS 22908 CP 8330
Geeta Canabar
Proprietor
Place: Mumbai
Date: 10th
June, 2011
Report on Corporate Governance
63. With an impressive base of over 1,00,000
members and 5,00,000 square feet of floor
space across 100 outlets in more than 50 cities,
it’s little wonder that Talwalkars is among the top
20 health club brands globally.
Leadership and
widespread
presence leads
to undisputed
market
dominance
66. • Auditors’ Report ....................................................................................... 67
• Balance Sheet ......................................................................................... 70
• Profit and Loss Account.......................................................................... 71
• Cash Flow Statement.............................................................................. 72
• Schedules ................................................................................................. 74
• Notes to Accounts................................................................................... 79
• Balance Sheet Abstract and General Business Profile........................ 91
• Auditors’ Report on Consolidated Financial Statements ................... 92
• Consolidated Balance Sheet................................................................. 94
• Consolidated Profit and Loss Account ................................................. 95
• Consolidated Cash Flow Statement ..................................................... 96
• Schedules to Consolidated Financial Statements............................... 98
• Notes to Consolidated Financial Statements .................................... 103
Financial Information
67.
68. 67Annual Report 2010-2011
TO THE MEMBERS OF TALWALKARS BETTER VALUE FITNESS LIMITED
1. We have audited the attached Balance Sheet of TALWALKARS BETTER VALUE FITNESS LIMITED as at
31st March, 2011, the Profit and Loss Account and the Cash Flow Statement of the Company for the
year ended on that date, both annexed thereto. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these financial statements based
on our audit.
2. We conducted our audit in accordance with auditing standards generally accepted in India. These
Standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India
in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a
Statement on the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph (3) above, we report that:
(a) We have obtained all the information and explanations, which to the best of our knowledge and belief
were necessary for the purposes of our audit;
(b) In our opinion, proper books of account, as required by law, have been kept by the Company, so far,
as appears from our examination of the books;
(c) The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this Report
are in agreement with the books of account;
(d) In our opinion the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt
with by this report are in compliance with the Accounting Standards referred to in sub-section (3C) of
Section 211 of the Companies Act, 1956.
(e) On the basis of written representations received from the directors as on 31st March, 2011 and
taken on record by the Board of Directors, we report that none of the directors is disqualified as on
31st March, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section
274 of the Companies Act, 1956;
(f) In our opinion and to the best of our information and according to the explanations given to us, the
said accounts, together with the other notes appearing thereon, give the information required by the
Companies Act, 1956, in the manner so required and give a true and fair view:
i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011;
and
ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that
date; and
iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on
that date.
For Saraf Gurkar & Associates
Chartered Accountants
Firm Registration No. 126518W
S. L. Saraf
Dated: 14th June, 2011 Partner
Place : Mumbai Membership No. 030866
Auditors’ Report
69. ANNEXURE TO THE AUDITOR’S REPORT OF EVEN DATE ON THE ACCOUNTS OF TALWALKARS BETTER VALUE FITNESS
LIMITED FOR THE YEAR ENDED 31ST MARCH, 2011
(Referred to in Paragraph (3) of the above Report)
1. Fixed Assets:
(a) The Company is in the process of re-compiling its fixed asset register with a view towards reflecting full
particulars including quantitative details and situation of its fixed assets.
(b) As explained to us, physical verification of fixed assets has been carried out by the Management at
most of the branches in accordance with a program of verification which, in our opinion, provides
for physical verification of all the fixed assets at reasonable intervals. No material discrepancies were
noticed on such physical verification as informed by the management. In view of the fact that the fixed
asset register is in the process of re-compilation, the management has informed us that discrepancies,
if any, arising between the assets verified and the books and records would be dealt with in the year
in which such re-compilation of the register is completed.
(c) The fixed assets disposed off during the year, in our opinion, do not constitute substantial part of the
fixed assets of the Company and such disposal has, in our opinion, not affected the going concern
status of the Company.
2. The Company is a service Company primarily rendering services in respect of health and fitness centres.
Accordingly it does not hold any inventory. Thus, the provisions of Clause 4(ii) are not applicable to the
company for the year under review.
3. Loans:
(a) The Company has granted loans to its subsidiary Company listed in the register maintained under
Section 301 of the Companies Act, 1956. The maximum amount involved during the year in respect of
the said loans was ` 75 Lacs and at the year end the balance outstanding of the said loans taken was
` 16.17 Lacs. Other than the above, the Company has not granted any loans, secured or unsecured
to companies, parties or firms covered in the register maintained u/s. 301 of the Act.
(b) In our opinion, prima facie, the interest and other terms and conditions of the aforesaid loan granted
are not prejudicial to the interest of the Company.
(c) In case of the loan granted to the subsidiary Company listed in the register maintained u/s. 301, the
borrower has been regular in the payment of interest as stipulated. The terms of arrangement do not
stipulate any repayment schedule and the loan is repayable on demand. Accordingly paragraph
4(iii)(c) of the Order is not applicable to the Company in respect of repayment of the principal amount.
(d) There are no overdue amounts of more than rupees one lacs in respect of the loan granted to the
subsidiary Company.
(e) The Company has taken unsecured loans from 9 companies listed in the register maintained under
Section 301 of the Companies Act, 1956. The maximum amount involved during the year in respect of
the said loans was ` 2663.72 Lacs and at the year end the balance outstanding of the said loans taken
was ` 530.83 Lacs. Other than above, the Company has not taken any loans, secured or unsecured to
companies, parties or firms covered in the register maintain under Section 301 of the Act.
(f) In our opinion, prima facie, the interest and other terms and conditions of the aforesaid loan taken
from the Companies listed in the register maintained under Section 301 are not prejudicial to the
interest of the Company.
(g) As per the information and explanations furnished to us, for loans taken as above, repayment terms of
principal amount has not been stipulated/fixed as yet and the loans are repayable on demand. The
Company has been regular in the payment of interest. Accordingly paragraph 4(iii)(g) of the Order is
not applicable to the Company in respect of repayment of the principal amount.
4. In our opinion and based on the information and explanations given to us, the internal control procedures
need to be strengthened to be commensurate with the size of the Company and the nature of its business
with regard to purchases of fixed assets and sale of services. The activities of the Company do not involve
purchase of inventory and the sale of goods. We have not observed any major weakness in the internal
control system during the course of the audit.
5. Transactions:
(a) In our opinion and according to the information and explanations given to us, the transactions that
need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have
been so entered.
(b) Based on the information and explanations given to us, in our opinion these transactions have been
made at reasonable prices having regard to the prevailing market prices at the relevant time of
transactions.
6. The Company has not accepted any deposits from public within the meaning of Sections 58A and 58AA
of the Companies Act, 1956 and the rules made under Companies (Acceptance of Deposits) Rules,
Annexure to the Auditors’ Report
