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Notes to Accounts of Talwalkars Better Value Fitness Ltd.

Mar 31, 2018

Company Overview:

Talwalkars Better Value Fitness Limited (the ‘Company’) is a public limited company domiciled in India and is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The Corporate Identity Number (CIN) of the Company is L92411MRS.2003PLC140134.

The Company, which is popularly known as ‘Talwalkars’ has pioneered the concept of gyms in India and today, is the largest chain of health centers in India offering a diverse suite of services in fitness including gyms, spas, aerobics, yoga and health counseling. Talwalkar’s growth can be attributed directly to the trust their customers have in them, and the benefits they derive from their expert advice, personalized supervision, on-going facility upgrades, result-oriented approach, and above all from Talwalkar’s know- how and experience in this field.

Note 1 : Disclosures as required by Indian Accounting Standard (Ind AS) 101 First time adoption of Indian Accounting Standard

These are the Company’s first financial statements prepared in accordance with Ind AS. The Company has adopted all the Ind AS and the adoption was carried out in accordance with Ind AS 101 First time adoption of Indian Accounting Standards. The transition was carried out from Generally Accepted Accounting Principles in India (Indian GAAP) as prescribed under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, which was the “Previous GAAP”

The Significant Accounting Policies set out in Note No. 1 have been applied in preparing the financial statements for the year ended March 31, 2018, March 31, 2017 and the opening Ind AS Balance Sheet on the date of transition i.e. April 1, 2016.

In preparing its Ind AS Balance Sheet as at April 1, 2016 and in presenting the comparative information for the year ended March 31, 2017, the Company has adjusted amounts previously reported in the financial statements prepared in accordance with Previous GAAP. This note explains the principal adjustments made by the Company in restating its financial statements prepared in accordance with Previous GAAP, and how the transition from Previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows.

I) Explanation of transition to Ind AS

Set out below are the Ind AS 101 optional exemptions availed as applicable and mandatory exceptions applied in the transition from Previous GAAP to Ind AS.

A. Optional Exemptions availed Fair valuation of Property, Plant and Equipment

The company has elected the option of fair value as deemed cost for property, plant & equipment on the date of transition to Ind AS instead of carrying value under previous Indian GAAP as on April 1, 2016.

Investment in Subsidiaries

The Company has elected either the Indian GAAP carrying amount or fair value at the date of transition as deemed cost for its investment in each subsidiary.

Business combinations

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date.The Company has availed the said exemption and elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Accordingly, business combinations occurring prior to the transition date have not been restated.

B. Applicable Mandatory Exceptions Estimates

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with Previous GAAP (after adjustments to reflect any difference in accounting policies).

Ind AS estimates as at April 1, 2016 are consistent with the estimates as at the same date made in conformity with Previous GAAP,

The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Investment in equity instruments carried at FVTPL or FVTOCI;

- Investment in debt instruments carried at FVTPL;

- Impairment of financial assets based on expected credit loss model

Derecognition of Financial Assets and Liabilities

Financial Assets and Liabilities derecognized before April 1, 2016 are not re-recognized under Ind AS. The company has not choosen to apply the Ind AS 109 Financial Instruments derocognizing criteria to an earlier date. No significant arrangements were identified that has to be assessed under this exception.

Impairment of Financial Asset

Ind AS 101 requires an entity to assess and determine the impairment allowance on financial assets as per Ind AS 109 using the reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments which were initially recognised and compare that to the credit risk at the date of transition to Ind AS. The Company has applied this exception prospectively. The company has applied the impairment requirements of Ind AS 109 retrospectively based on facts and circumstances at the date of transition to Ind AS

Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortised cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.

Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of financial assets accounted at amortised cost has been done retrospectively except where the same is impracticable.

C. Transition to IND AS-Reconciliations

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from Previous GAAP to Ind AS as required under Ind AS 101:-

I) Reconciliation of Balance sheet as at April 1, 2016 (Transition Date) and March 31,2017

II) Reconciliation of Total Comprehensive Income for the year ended March 31, 2017

III) Reconciliation of Equity as on March 31, 2017 & April 1, 2016

IV) Notes to Reconciliation

The presentation requirements under Previous GAAP differs from Ind AS. Hence, Previous GAAP information has been regrouped for ease of reconciliation with Ind AS. The Regrouped Previous GAAP information is derived from the Financial Statements of the Company prepared in accordance with Previous GAAP.

IV) Notes to reconciliation of Balance Sheet as at April 1, 2016 and March 31, 2017 and the total comprehensive income for the year ended March 31, 2017 Note A : Property, Plant and Equipment

(a) The Company has elected to consider fair value of property, plant & equipment and other intangible assets as its deemed cost on the date of transition to Ind AS. Accordingly, depreciation on such revalued items has been calculated on deemed cost with corresponding increase in deferred tax liability.

(b) Under the previous GAAP, the intangible assets were amortized using the straight-line method. Under Ind AS, the useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with indefinite useful life are not amortised, hence the same is written-off.

Note A : Amortised cost of financial assets and financial liabilities (i) Loan to subsidary

Under the previous Indian GAAP, the interest free inter-company loans were carried at nominal amount. Under Ind AS such loans are measured at fair value on initial recognition. The discounting rate to be used is the borrowing rate applicable to the borrower on the date of the loan. The difference between the fair value and the nominal value of loan is considered as investment in subsidiaries .Subsequently such loans are measured at amortised costs. The unwinding of discount is treated as interest income and is accrued as per the EIR method.

(ii) Borrowings

Under the previous GAAP, transaction costs incurred in connection with borrowings are amortized upfront and charged to profit or loss for the period. Under Ind AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method.

(iii) Corporate Gaurantee

Under Ind AS, corporate financial guarantee given are measured at their fair value on initial recognition. Subsequently these contracts are measured at the higher of amount of impairment loss allowance as per Ind AS 109 and amount initially recognised less, where appropriate,cumulative amortisation recognised.

Note C : Deferred Tax

Under Ind-AS accounting for deferred taxes is done using the Balance Sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base.

(i) Terms/ Rights attached to Equity Shares

(a) The Company has only one class of shares namely Equity Shares having a face value of Rs. 10 per share.

(b) In respect of every Equity Share (Whether fully paid or partly paid), voting right shall be in the same proportion as the capital paid up on such Equity Share bears to the total paid up Equity capital of the Company.

(c) The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

The Board of Directors of the Company has proposed dividend of Rs. 0.50 per equity share for the financial year 2017-18. The payment of dividend is subject to approval of the shareholders in the ensuing Annual General Meeting of the Company.

(d) In the event of liquidation, the shareholders of Equity Shares are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholdings.

(iv) Aggregate number and class of shares allotted to fully paid up pursuant to contract without payment being received in cash, bonus shares, and shares brought back for the period of five years immediately preceeding the Balance Sheet date is Nil

(v) Forfeited shares and calls unpaid- Nil

Notes:

a) All the secured Non-covertible debentures are secured by first pari passu charge on the specified assets of the Company as identified in the Debenture Trust Deed.

b) All loans are sanctioned by Axis Bank Ltd.and The South Indian Bank Ltd. secured primarily against the first hypothecation / mortgage charge on the entire movable and immovable fixed assets and current assets of the Company including Gymnasium Equipments, Furniture & Fixtures and any other equipment installed in the Gymnasiums, equitable mortgage or registered mortgage of immovable premises of the Company, corporate guarantee and collateral security by way of equitable mortgage or registered mortgage of premises of third parties situated at Tardeo and Mahalaxmi, Mumbai.

2. Related Party disclosure

A Name of related party and nature of its relationship:

(a) Related parties where control exists Subsidiaries

Talwalkars Club Pvt.Ltd Talwalkars Club Systems Pvt.Ltd

(b) Name of KMP and their relatives with whom transactions have taken place during the year

Mr. Madhukar Talwalkar

(c) Additional related parties as per Companies Act, 2013 with whom transactions have taken place during the year

Mr. Girish Nayak Ms. Avanti Sankav

In accordance with the scheme of demerger, company has bifurcated its assets and liabilities between the demerged and resultant companies. Company has assured its lenders that necessary documents and guarantees have been issued to ensure security creation for facilities granted to them, its subsidiaries and associates.

3. Segment Reporting

a) Primary (Business) Segment:

(i) Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (“CODM”) of the Company. The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Cheif Finance Officer of the Company. The Company operates only in one Business Segment i.e. “Lifestyle Business” hence does not have any reportable Segments as per Ind AS 108 “Operating Segments”.

As the Company’s business consists of one reportable business segment and hence, no separate disclosure pertaining to attributable Revenues, Profits, Assets, Liabilities and Capital employed are given.

(ii) The company does not have revenue from external customer outside India and assets located outside India ,hence not disclosed seperately.

(iii) Further, the Company does not have revenue more than 10% of total revenue from single external customer.

Geographical Information:

Secondary segmentation based on geography has not been presented as the company operates primarily in India and the Company perceives that there is no significant difference in its risk and returns in operating from different geographic areas within India.

4. Business Combination: Scheme of arrangement with Talwalkars Better Value Fitness Limited

The Board of directors of the Talwalkars Better Value Fitness Limited” (“TBVFL”) on November 24, 2016 approved the Scheme of Arrangement under Sections 391 - 394 of the Companies Act, 1956 (‘the Scheme’) between Talwalkars Better Value Fitness Limited (“TBVFL”or ‘Demerged Company’) and Talwalkars Lifestyles Limited (“TLL” or ‘Resulting Company’ or ‘Company’) & their respective shareholders & creditors for the demerger of gymnasium business into the Company. The Scheme of Arrangement for Demerger has been approved by National Company Law Tribunal (NCLT), Mumbai Bench on December 21, 2017 and it came into effect on February 20, 2018 (the “Effective Date”), the date on which the Order from National Company Law Tribunal (NCLT) was filed with the Registrar of Companies. Pursuant to the scheme of arrangement (‘the scheme’), with effect from the Appointed date ie., April 01, 2016 the Gymnasium business of the company stands transferred to the newly formed company namely “Talwalkars Lifestyles Limited”. The scheme has been considered in these results by transferring the assets and liabilities as identified by the management as pertaining to the Gymnasium business with effect from the Appointed Date. Also, the Income and Expenses of the Demerged Company have been determined based on management evaluation of relevant business activities to be continued in the Demerged Company.

Pursuant to the scheme, all assets, liabilities, rights, business operations and activities forming part of the Demerged undertaking have been transferred to the Resulting Company at their respective Book value as follows:

As a consideration for the value of net assets transferred, the Company shall issue 1 (One) fully paid up equity shares of INR 10 each in resulting Company for every 1 (One) Equity share of INR 10 each held in the demerged undertaking to the existing shareholders of the demerged undertaking as on the record date, aggregating to shares of INR 1 each. There is no contingent consideration payable on this acquisition.

Further, as per the Scheme, the excess of book value of assets over the book value of liabilities of the demerged undertaking shall be adjusted against the securities premium account/ capital reserve/general reserve/ balance in the statement of profit /loss of demerged undertaking.

C. Financial Risk Management

i. Risk management framework

The Company’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company’s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

ii. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s trade and other receivables, cash and cash equivalents and other bank balances.The maximum exposure to credit risk in case of all the financial instruments covered below is restricted to their respective carrying amount.

(a) Trade and other receivables from customers

Credit risk in respect of trade and other receivables is managed through credit approvals, establishing credit limits and monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available external and internal credit risk factors such as credit ratings from credit rating agencies, financial condition, ageing of accounts receivable and the Company’s historical experience for customers.

Financial Assets are considered to be of good quality and there is no significant increase in credit risk

(b) Cash and cash equivalents and Other Bank Balances

The Company held cash and cash equivalents and other bank balances of Rs. 539.46 million at March 31, 2018 (March 31, 2017: Rs. 71.10 million, April 1, 2016 : Rs. 159.63 million). The cash and cash equivalents are held with bank with good credit ratings and financial institution counterparties with good market standing. Also, Company invests its short term surplus funds in bank fixed deposit, which carry no / low mark to market risks for short duration therefore does not expose the Company to credit risk.

iii. Market risk

Market Risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk.

a Currency risk

Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company does not have significant foreign currency exposure and hence, is not exposed to any significant foreign currency risk.

b Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk through the impact of rate changes on interest-bearing liabilities and assets. The Company manages its interest rate risk by monitoring the movements in the market interest rates closely.

Exposure to interest rate risk

Company’s interest rate risk arises primarily from borrowings. The interest rate profile of the Company’s interest-bearing financial instruments is as follows.

Cash flow sensitivity analysis for variable-rate instruments

The sensitivity analysis below have been determined based on the exposure to interest rates for financial instruments at the end of the reporting year and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in the case of instruments that have floating rates. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates :

c Other price risk

The Company invests its surplus funds in various Equity and debt instruments . These comprise of mainly liquid schemes of mutual funds (liquid investments), Equity shares and fixed deposits. This investments are susceptible to market price risk, mainly arising from changes in the interest rates or market yields which may impact the return and value of such investments. However due to the very short tenor of the underlying portfolio in the liquid schemes, these do not pose any significant price risk.

iv. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset.

Liquidity risk is managed by Company through effective fund management of the Company’s short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and other borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted.

5. Capital Management

The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to its shareholders. Management monitors the return on capital as well as the debt equity ratio and make necessary adjustments in the capital structure for the development of the business. The capital structure of the Company is based on management’s judgement of the appropriate balance of key elements in order to meet its strategic and day - to - day needs. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

Note : For the purpose of computing debt to equity ratio, equity includes Equity share capital and Other Equity and Debt includes Long term borrowings, Short term borrowings and current maturities of long term borrowings.

6. Other Notes

Previous year figures have been regrouped, re-arranged and re-classified wherever necessary to conform to current year’s classification.


Mar 31, 2016

(i) Terms/ Rights attached to Equity Shares

(a) The Company has only one class of shares namely Equity Shares having a face value of H10 per share.

(b) In respect of every Equity Share (Whether fully paid or partly paid),voting right shall be in the same proportion as the capital paid up on such Equity Share bears to the total paid up Equity capital of the Company.

(c) The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

(d) In the event of liquidation, the shareholders of Equity Shares are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholdings.

Notes:

a) Secured Taxable ,Redeemable Non Convertible fixed rate debentures (Privately placed)

i) 250,11.75% debentures of face value Rs. 1 million each aggregating Rs. 250 millions are redeemable at par in 3 equal annual installments commencing from 3rd January, 2018

ii) 250,11.75% debentures of face value Rs. 1 million each aggregating Rs. 250 millions are redeemable at par in 3 equal annual installments commencing from 25th April, 2018

iii) 250,9.80% debentures of face value Rs. 1 million each aggregating Rs. 250 millions are redeemable at par in 3 equal annual installments commencing from 4th March, 2019

iv) 250,9.85% debentures of face value Rs. 1 million each aggregating Rs. 250 millions are redeemable at par in 3 equal annual installments commencing from 6th November, 2019

v) 250,10% debentures of face value Rs. 1 million each aggregating Rs. 250 millions are redeemable at par on 7 th December, 2018

All the secured Non-convertible debentures are secured by first pari passu charge on the specified assets of the Company as identified in the Debenture Trust Deed

b) All loans are sanctioned by State Bank of India and are secured primarily against the first hypothecation / mortgage charge on the entire movable and immovable Fixed Assets and Current Assets of the Company including Gymnasium Equipments, Furniture & Fixtures and any other equipment installed in the Gymnasiums, equitable mortgage or registered mortgage of immovable premises of the Company, corporate guarantee and collateral security by way of equitable mortgage or registered mortgage of premises of third parties situated at Tardeo and Mahalaxmi, Mumbai.

Note 1: Disclosure Pursuant to Accounting Standard (AS)-17:

- There is only one reportable business segment as envisaged by (AS)-17 ''Segment Reporting''. Accordingly, no separate disclosure for the segment reporting is required to be made in the financial statement of the Company.

- Secondary segmentation based on geography has not been presented as the company operates primarily in India and the Company perceives that there is no significant difference in its risk and returns in operating from different geographic areas within India.

Note 2: Estimated amounts of contracts remaining to be executed on capital accounts and not provided for were Rs. 7.64 million during current year. (Previous year Rs. 6.23 million)

Note 3: Sale & Lease Back:

The Company has taken various assets/ equipments under cancellable operating lease.

- Profit or loss on sale and lease back transactions, resulting in operating leases, are recognized immediately whereas in case of finance leases, are deferred and amortized over the lease term.

- Quarterly lease rentals are paid in form of fixed rentals.

- The Company does not have an option to buyback nor does it generally have an option to renew the leases.

- In case of delayed payments, penal charges are payable as stipulated.

Note 4: Based on the intimations regarding their status under Micro, Small & Medium Enterprises Development Act, 2006, there are no amounts due and payable to suppliers covered under the above category

Note 5: Previous year''s figures have been regrouped / rearranged wherever necessary to confirm to the current year''s classification.


Mar 31, 2015

CORPORATE INFORMATION:

1. Terms/ Rights attached to Equity Shares

(a) The Company has only one class of share capital namely Equity Shares having a face value of Rs.10 per share.

(b) In respect of every Equity Share (Whether fully paid or partly paid),voting right shall be in the same proportion as the capital paid up on such Equity Share bears to the total paid up Equity capital of the Company.

(c) The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

(d) In the event of liquidation, the shareholders of Equity Shares are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholdings.

* Talwalkars Better Value Fitness Limited (the 'Company') is a public limited Company domiciled in India and is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The Corporate Identity Number (CIN) of the Company is L92411MH2003PLC140134.

* The Company, which is popularly known as 'Talwalkars' has pioneered the concept of gyms in India and today, is the largest chain of health centers in India offering a diverse suite of services in fitness including gyms, spas, aerobics and health counseling. Talwalkar's growth can be attributed directly to the trust their customers have in them, and the benefits they derive from their expert advice, personalized supervision, on-going facility upgrades, result-oriented approach, and above all from Talwalkar's know-how and experience in this field.

2. Contingent Liabilities:

Contingent liabilities not provided for in Rs. in Million respect of:

Particulars As at March As at March 31st, 2015 31st, 2014

Bank Guarantee given on behalf of 559.75 102.83 Subsidiaries

Claim from a landlord, case pending 29.49 32.38 before the Judiciary - Hyderabad

Claim pending before statutory - 80.63 authorities - Income Tax

Cases pending before consumer courts 0.20 -

* The operations of one of our Fitness Centers at Hyderabad had to be shifted due to some disputes. The Company has already filed legal cases against the same and on the basis of the advice of its legal counsel, is confident of favorable outcome and early recommencement of operations of the branch. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company's financial position and results of operations.

* The Income Tax demand was raised for A.Y. 2010-11 on account of adhoc additions. The Company had filed an appeal against the same and paid Rs. 25 million under protest. The appeal is partly allowed and the Company is eligible for a refund of Rs. 25 million paid under protest.

3: Disclosure Pursuant to Accounting Standard (As)-17:

* There is only one reportable business segment as envisaged by (AS)17 'Segment Reporting'. Accordingly, no separate disclosure for the segment reporting is required to be made in the Financial Statement of the Company.

* Secondary segmentation based on geography has not been presented as the company operates primarily in India and the Company perceives that there is no significant difference in its risk and returns in operating from different geographic areas within India.

3: Related Party Disclosures:

* Disclosure as required by the Accounting Standard-18, (AS) "Related Party Disclosures" is given below:

List of Related Parties:

Key Management Personnel

* Mr. Anant Gawande (Whole-time Director & Chief Financial Officer)

* Mr. Girish Talwalkar (Executive Chairman)

* Mr. Harsha Bhatkal (Whole-time Director)

* Mr. Madhukar Talwalkar (Whole-time Director)

* Mr. Prashant Talwalkar (Managing Director & Chief Executive Officer)

* Mr. Vinayak Gawande (Whole-time Director)

Relatives of Key Management Personnel

* Mrs. Yamini Anant Gawande Subsidiaries

* Aspire Fitness Private Limited

* Denovo Enterprises Private Limited

* Jyotsna Fitness Private Limited

* Talwalkars Club Private Limited Step-down Subsidiary

* Equinox Wellness Private Limited

Enterprises over which Key Management Personnel & their relatives exercise significant influence:

* Anant Gawande (HUF)

* Anfin Investments Private Limited

* Better Value Brands Private Limited

* Better Value Leasing & Finance Ltd

* Better Value Properties Private Limited

* Better Value Restaurants Private Limited

* Empower Systech Pvt. Ltd.

* Gawande Consultants Private Limited

* G R Bhatkal Foundation

* S K Restaurants Private Limited

* Indian Cookery.com Private Limited

* Life Fitness India Private Limited

* Nitin Gawande (HUF)

* Pinnacle Fitness Private Limited

* Popular Institute of Arts Private Limited

* Popular Prakashan Private Limited

* R2 Infrastructure Private Limited

* R2 Spa Systems

* Raja Rani Travels Private Limited

* Radhika Hotels Private Limited

* Ratnakar Krishnaji Gawande (HUF)

* Talwalkars

* Talwalkars Spa System

* Talwalkars Fitness Club

* Talwalkars Health & Leisure

* Talwalkars Health Club

* Talwalkars Health Commune

* Talwalkars Health Complex

* Talwalkars Nutrition Centre

* Vrindavan

* Vinayak Gawande (HUF)

* Vrindavan Restaurant Private limited

4: Sale & Lease Back:

The Company has taken various assets/ equipments under cancellable operating lease.

* Profit or loss on sale and lease back transactions, resulting in operating leases, are recognized immediately whereas in case of finance leases, are deferred and amortized over the lease term.

* Quarterly lease rentals are paid in form of fixed rentals.

* The Company does not have an option to buyback nor does it generally have an option to renew the leases.

* In case of delayed payments, penal charges are payable as stipulated.

* The lease rental expenses of Rs. 168.64 million are recognized (Previous year Rs. 118.34 million) on account of sale and lease back of assets.

5: Based on the intimations regarding their status under Micro, Small & Medium Enterprises Development Act, 2006, there are no amounts due and payable to suppliers covered under the above category.

6: Previous year's figures have been regrouped / rearranged wherever necessary to conform to the current year's classification.


Mar 31, 2014

CORPORATE INFORMATION:

Talwalkars Better Value Fitness Limited (the ''Company'') is a public limited company domiciled in India and is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The Corporate Identity Number (CIN) of the Company is L92411 MH2003PLC140134.

The Company, which is popularly known as ''Talwalkars'' has pioneered the concept of gyms in India and today, is the largest chain of health centers in India offering a diverse suite of services in fitness including gyms, spas, aerobics and health counseling. Talwalkar''s growth can be attributed directly to the trust their customers have in them, and the benefits they derive from their expert advice, personalized supervision, on-going facility upgrades, result-oriented approach, and above all from Talwalkar''s know-how and experience in this field.

Note 1 : Contingent Liabilities

Contingent liabilities not provided for in respect of: Rs in Millions

Particulars As at As at March 31, March 31 2014 2013

Bank Guarantee given on behalf of Subsidiaries 102.83 100.33

Claim from a landlord, case pending before the Judiciary

Hyderabad 32.38 27.97

Koramangala * - 12.58

Claim by Advertising agency # - 0.47

Claim pending before statutory authorities

Income Tax 80.63 -

- The operations of the Belgaum branch have been temporarily suspended due to some disputes. The Company has already filed legal cases against the same and on the basis of the advice of its legal counsel, is confident of favourable outcome and early recommencement of operations of the branch.

- The Income Tax demand has been raised for A.Y 201 0-11 which is basically on account of adhoc additions and the same is not tenable as per company''s view. We have filed an appeal against the same and paid Rs. 20 millions under protest.

Note 3: Disclosure Pursuant To Accounting Standard (AS)17

- There is only one reportable business segment as envisaged by (AS) 17 ''Segment Reporting''. Accordingly, no separate disclosure for the segment reporting is required to be made in the Financial Statement of the Company.

- Secondary segmentation based on geography has not been presented as the company operates primarily in India and the Company perceives that there is no significant difference in its risk and returns in operating from different geographic areas within India.

Note 4 : Related Party Disclosures

- Disclosure as required by the Accounting Standard (AS)18, "Related Party Disclosures" is given below: List of Related Parties:

Key Management Personnel

- Mr. Anant Gawande (Whole-time Director & Chief Financial Officer)

- Mr. Girish Talwalkar (Whole-time Director)

. Mr. Harsha Bhatkal (Whole-time Director)

- Mr. Madhukar Talwalkar (Executive Chairman)

- Mr. Prashant Talwalkar (Managing Director & Chief Executive Officer)

- Mr. Vinayak Gawande (Whole-time Director) Relatives of Key Management Personnel

- Mr. Sudhakar Talwalkar

- Mrs. Yamini Anant Gawande Subsidiaries

- Aspire Fitness Private Limited

- Denovo Enterprises Private Limited

- Equinox Wellness Private Limited

- Jyotsna Fitness Private Limited

Enterprises over which Key Management Personnel & their relatives exercise significant influence

- Anant Gawande (HUF)

- Anfin Investments Private Limited

- Better Value Brands Private Limited

- Better Value Leasing & Finance Ltd

- Better Value Properties Private Limited

- Better Value Restaurants Private Limited

- Brainworks Learning Systems Private Limited

- Empower Systech Private Limited

- Gawande Consultants Private Limited

- Indian Cookery Private Limited

- Indian Cookery.com Private Limited

- Life Fitness India Private Limited Nitin Gawande (HUF)

- Pinnacle Fitness Private Limited

- Popular Institute of Arts Private Limited

- Popular Prakashan Private Limited

- R2 Infrastructure Private Limited

- R2 Spa Systems

- Raja Rani Travels Private Limited

- Radhika Hotels Private Limited

- Splendor Fitness Private Limited

- Talwalkars

- Talwalkars Fitness Club

- Talwalkars Health & Leisure

- Talwalkars Health Club

- Talwalkars Health Commune

- Talwalkars Health Complex

- Talwalkars Nutrition Centre

- Vinayak Gawande (HUF)

- Vrindavan Restaurants Private Limited

Note 5 : Sale & Lease Back

The Company has taken various Assets/Equipments under cancellable operating lease.

- Profit or loss on sale and lease back transactions, resulting in operating leases, are recognised immediately.

- Quarterly lease rentals are paid in form of fixed rentals.

- The Company does not have an option to buyback nor does it generally have an option to renew the leases.

- In case of delayed payments, penal charges are payable as stipulated.

- The lease rental expenses of Rs. 11 8.34 millions are recognized (Previous year Rs. 55.63 millions) on account of sale and lease back of assets.

Note 6 : Based on the intimations regarding their status under Micro, Small & Medium Enterprises Development Act, 2006, there are no amounts due and payable to suppliers covered under the above category.

Note 7 : Previous year''s figures have been regrouped/ rearranged wherever necessary to conform to the current year''s classification.


Mar 31, 2013

Corporate Information:

Talwalkars Better Value Fitness Limited (the ''Company'') is a public limited company domiciled in India and is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The Corporate Identity Number (CIN) of the Company is L92411MH2003PLC140134.

The Company, which is popularly known as ''Talwalkars'' has pioneered the concept of gyms in India and today, is the largest chain of health centers in India offering a diverse suite of services in fitness including gyms, spas, aerobics and health counseling. Talwalkar''s growth can be attributed directly to the trust their customers have in them, and the benefits they derive from their expert advice, personalised supervision, on-going facility upgrades, result-oriented approach and above all from Talwalkar''s know-how and experience in this field.

Note 1 : Disclosure Pursuant to Accounting Standard (AS) 17

- There is only one reportable business segment as envisaged by Accounting Standard (AS) 17 ''Segment Reporting''. Accordingly no separate disclosure for the segment reporting is required to be made in the Financial Statement of the Company.

- Secondary segmentation based on geography has not been presented as the Company operates primarily in India and the Company perceives that there is no significant difference in its risk and returns in operating from different geographic areas within India.

Note 2 : Related Party Disclosures

- Disclosure as required by the Accounting Standard (AS)18, "Related Party Disclosures" is given below:

List of Related Parties:

Key Management Personnel

- Mr. Anant Gawande (Whole-time Director & Chief Financial Officer)

- Mr. Girish Talwalkar (Whole-time Director)

- Mr. Harsha Bhatkal (Whole-time Director)

- Mr. Madhukar Talwalkar (Executive Chairman)

- Mr. Prashant Talwalkar (Managing Director & Chief Executive Officer)

- Mr. Vinayak Gawande (Whole-time Director)

Relatives of Key Management Personnel

- Mr. Sudhakar Talwalkar

- Mrs. Yamini Anant Gawande

Subsidiaries

- Aspire Fitness Private Limited

- Denovo Enterprises Private Limited

- Equinox Wellness Private Limited

- Jyotsna Fitness Private Limited

Enterprises over which Key Management Personnel & their relatives exercise significant influence:

- AnantGawande(HUF)

- Anfin Investments Private Limited

- Better Value Brands Private Limited

- Better Value Leasing & Finance Limited

- Better Value Properties Private Limited

- Brainworks Learning Systems Private Limited

- Gawande Consultants Private Limited

- India Cookery Private Limited

- Indian Cookery.com Private Limited

- Life Fitness India Private Limited

- Nitin Gawande (HUF)

- Pinnacle Fitness Private Limited

- Popular Institute of Arts Private Limited

- Popular Prakashan Private Limited

- R2 Infrastructure Private Limited

- R2 Spa Systems

- Radhika Hotels Private Limited

- Splendor Fitness Private Limited

- Talwalkars

- Talwalkars Fitness Club

- Talwalkars Health & Leisure

- Talwalkars Health Club

- Talwalkars Health Commune

- Talwalkars Health Complex

- Talwalkars Nutrition Centre

- Vinayak Gawande (HUF)

Note 3 : Estimated amounts of contracts remaining to be executed on capital accounts and not provided for was 7 48.03 millions during current year (Previous year Nil).

Note 4 : Sale & Lease Back

The Company has taken various Assets / Equipments under cancellable operating lease.

- Profit or Loss on sale and lease back transactions, resulting in operating leases, are recognised immediately.

- Quarterly lease rentals are paid in form of fixed rentals.

- The Company does not have an option to buyback nor does it generally have an option to renew the leases.

- In case of delayed payments, penal charges are payable as stipulated.

- The lease rental expenses of 7 55.63 millions is recognised (Previous year 7 17.36 millions) on account of sale and lease back of assets.

Note 5: Based on the intimations regarding their status under Micro, Small & Medium Enterprises Development Act, 2006, there are no amounts due and payable to suppliers covered under the above category.

Note 6: The Company raised X 423.74 millions by issuing 20,65,216 Equity Shares of X 10 each for cash at a premium of Rs. 195.18 per Equity Share through Qualified Institutional Placement.

Note 7: The operations of the Belgaum and Koramangala branches have been temporarily suspended due to some disputes. The Company has already filed legal cases against the same and on the basis of the advice of its legal counsel, is confident of favourable outcome and early recommencement of operations of the branches.

Note 8: Previous year''s figures have been regrouped / rearranged wherever necessary to conform to the current year''s classification.


Mar 31, 2012

Corporate Information

Talwalkars Better Value Fitness Limited which is popularly known as Talwalkars, is one of the India's largest chain of health centres.

Talwalkar's growth can be attributed directly to the trust our customers have in us, and the benefits they derive from our expert advice, personalised supervision, on-going facility upgrades, result-oriented approach, and above all from Talwalkar's know- how and experience in this field.

Notes:

a) The Company has issued 11.5% and 12% Redeemable Secured Non-Convertible Debentures, Face Value Rs 10 lacs each aggregating to Rs 30 crores and Rs 25 crores respectively through private placement. The principal amount of the Non- Convertible Debentures, interest due and any other monies payable by the Company in respect of the Non-Convertible Debentures will be secured by first pari passu charge on the specified assets of the Company as identified in the Debenture Trust Deed such that a fixed asset cover of 1.25 times is maintained at all times during the tenor of the Non-Convertible Debentures.

b) All loans are sanctioned by Union Bank of India are secured primarily against the first hypothecation/mortgage charge on the entire movable and immovable Fixed Assets and Current Assets of the Company including Gymnasium Equipments, Furniture and Fixtures and any other equipment installed in the Gymnasiums, equitable mortgage of immovable premises of the Company, corporate guarantee and collateral security by way of equitable mortgage of premises situated at Tardeo and Mahalaxmi, Mumbai of third parties and the personal guarantee of three Directors of the Company. (Amount repayable in the next 12 months Rs 139.5 million, Previous year Rs 129.3 million)

a) Based on the intimation regarding their status under Micro,Small and Mediu Enterprises Development Act, 2006, there are no amounts due and payable to suppliers covered under the above category.

b) Refundable security deposit from Franchisee of Rs 0.5 millions.

c) Acceptances by Union Bank of India are secured primarily against the first hypothecation / mortgage charge on the entire movable and immovable Fixed Assets and Current Assets of the Company including Gymnasium Equipments, Furniture and Fixtures and any other equipment installed in the Gymnasiums, equitable mortgage of immovable premises of the Company, corporate guarantee and collateral security by way of equitable mortgage of premises situated at Tardeo and Mahalaxmi, Mumbai of third parties and the personal guarantee of three Directors of the Company.

a) Cash Credit facility from Union Bank of India has been paid off during the current year

b) Short Term drawdown facility has been availed from Deutsche Bank against Pledge on Deutsche Investments India Private Limited approved mutual funds held in the name of the company.

a. All employee benefits payable wholly within twelve months of rendering the service are classified as a short-term employee benefits. Benefits such as salaries, wages, contractual labour charges and short-term compensated absences, etc. is recognised in the period in which the employee/contractual labour renders the related service.

The gratuity liability is provided and charged off as revenue expenditure based on actuarial valuation. The Company has subscribed to the group gratuity scheme policy of LIC of India.

Any other payments under the relevant labour statutes, wherever applicable are reimbursed to the Outsourced Agency as and when applicable.

Disclosure pursuant to Accounting Standard (AS) 15 (Revised):

The Company's liability towards Gratuity as per provision of Accounting Standard (AS) 15 (Revised) on the basis of actuarial valuation has been covered by a LIC Group Gratuity Scheme. The Company does not allow carry forward of compensated absences to employees. Accordingly, no provision has been made for compensated absences.

B. The employees long-term benefits like Gratuity, Ex-Gratia and other terminal benefits are valued on actuarial basis and recognized in the profit and loss account. The assumption in the actuarial valuation of the gratuity provision is as under:

i) Nature of Gratuity - Gratuity is payable to all eligible employees at the rate of 15 days of last drawn salary for each completed year of service subject to the maximum of Rs 1 million for all employees who were on the roll as on 31.03.2012.

ii) The retirement age is taken as 60 years.

iii) Progression of future salary is taken into account while calculating the liability.

iv) Valuation Method: Projected unit credit method.

v) Basis of Valuation:

1. Contingent Liabilities:

Contingent liabilities not provided for in respect of Rs in Millions

Particulars As at As at 31.03.2012 31.03.2011

Income Tax demands (net of amount paid in protest) A.Y 2006-07 NIL 1.9

Bank Guarantee given on behalf of Joint Ventures/Subsidaries 85.32 47.25 Claim from a landlord, case pending before the Judiciary

- Hyderabad 36.55 30.65

- Koramangala 8.78 7.21

Claim by Advertising agency # 0.72 0.64

# 8800 GBP @ Rs 81.79 (as on 31.03.2012)

2. Disclosure pursuant to Accounting Standard (AS)11:

In line with the amendment to Accounting Standard (AS) 11 as per the Notification No. G.S.R. 225 (E) dated 31st March, 2009, the foreign exchange gain/loss has been adjusted to the cost of the fixed assets as on 31st March, 2012.

3. Disclosure pursuant to Accounting Standard (AS)17:

- There is only one reportable business segment as envisaged by Accounting Standard (AS) 17 'Segment Reporting'. Accordingly, no separate disclosure for the segment reporting is required to be made in the financial statement of the Company.

- Secondary segmentation based on geography has not been presented as the Company operates primarily in India and the Company perceives that there is no significant difference in its risk and returns in operating from different geographic areas within India.

4. Related Party Disclosures:

Disclosure as required by the Accounting Standard (AS) 18, "Related Party Disclosure" is given below:

List of Related Parties:

Key Management Personnel

- Mr. Madhukar Talwalkar (Executive Chairman)

- Mr. Prashant Talwalkar (Managing Director & Chief Executive Officer)

- Mr. Girish Talwalkar (Whole-time Director)

- Mr. Vinayak Gawande (Whole-time Director)

- Mr. Harsha Bhatkal (Whole-time Director)

- Mr. Anant Gawande (Whole-time Director & Chief Financial Officer)

Relatives of Key Management Personnel

- Ms. Yamini Anant Gawande

- Mr. Sudhakar Talwalkar

Subsidiaries/Associates

- Denovo Enterprises Private Limited

- Equinox Wellness Private Limited

- Aspire Fitness Private Limited

- Jyotsna Fitness Private Limited

Enterprises over which Key Management Personnel and their relatives exercise significant influence:

- Anfin Investments Private Limited

- Better Value Leasing & Finance Limited

- Better Value Brands Private Limited

- Better Value Properties Private Limited

- Brainworks Learning Systems Private Limited

- Gawande Consultants Private Limited

- Life Fitness India Private Limited

- Popular Prakashan Private Limited

- Popular Institute of Art Private Limited

- Radhika Hotels Private Limited

- Pinnacle Fitness Private Limited

- Talwalkars Fitness Club

- Talwalkars Health & Leisure

- Talwalkars Health Club

- Talwalkars Health Complex

- Talwalkars Health Commune

- Talwalkars Nutrition Centre

- Talwalkars

- Anant Gawande (HUF)

- Vinayak Gawande (HUF)

- Nitin Gawande (HUF)

- R2 Infrastructure Private Limited

- R2 Spa Systems

- Indian Cookery.com Private Limited

- India Cookery Private Limited

b) Corporate Guarantees given:

i) Denovo Enterprises Private Limited

The Company has given a Corporate Guarantee amounting to Rs 61.58 millions to the said Joint Venture Company (Previous year Rs23.5 millions)

ii) Equinox Wellness Private Limited

The Company has given a Corporate Guarantee amounting to Rs 3.75 millions to the said Joint Venture Company (Previous year Rs 3.75 millions)

iii) Aspire Fitness Private Limited

The Company has given a Corporate Guarantee amounting to Rs 20.00 millions to the said Joint Venture Company (Previous Year Rs 20.00 millions)

5 Estimated amounts of contracts remaining to be executed on capital accounts and not provided for was Rs Nil during current year (Previous year Rs 58.60 millions).

6 Directors' Remuneration: includes paid to Six Directors of the Company, amounting to Rs 25.20 millions. (Previous year Rs 25.20 millions).

7. Sale & Lease Back:

- During the year, the Company sold and Leased back some of its Assets. The Company earned profit of Rs 3.68 millions on the transaction.

- Profit or loss on sale and lease back arrangements, resulting in operating leases, are recognised immediately.

- Quarterly rentals are paid in the form of fixed rental.

- The Company does not have an option to buyback nor does it generally have an option to renew the leases.

- In case of delayed payments, penal charges are payable as stipulated.

- The lease rental expense recognised Rs 17.36 millions (Previous year Rs NIL) on account of sale and lease back of assets.

8. The operations of the Belgaum and Koramangala Branches have been temporarily suspended due to some disputes. The Company has already filed legal cases against the same and on the basis of advice of its legal counsel, is confident of favourable outcome and early recommencement of operations of the branches.

9. Previous year's figures have been regrouped / re-arranged wherever necessary to confirm to the current year's classification.

10. The Company was using the Pre-revised Schedule VI to the Companies Act, 1956, for the preparation and presentation of its financial statements till the year ended 31st March 2011. During the year ended 31st March, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the company. The Company has reclassified the previous year figures to confirm to this year's classification.


Mar 31, 2011

1. Contingent Liabilities :

Contingent liabilities not provided for in respect of (Rs. in lacs)

2010 -11 2009-10

income fax demands (net of amount 19.00 19.00 paid in protest) AY 2006-07

Bank Guarantee given on behalf of Joint 472.50 1245.50

Claim from a landlord case pending before the Judiciary

- Hyderabad 306.50 Not ascertainable

- Korajmangala 72.11

[Claimby Advertising agency # 6.39 5.97

#.8800 GBP @Rs.72.59 (as on 31.03.2011)

2. Security against Secured Loans Availed : [Refer Schedule B' to accounts]

- All loans, which include sub limit of Inland and Foreign Letter of credit and cash credit facility are sanctioned by Union Bank of India are secured primarily against the first hypothecation / mortgage charge on the entire movable and immovable Fixed Assets & Current Assets of the Company including Gymnasium Equipments,Furniture & Fixtures and any other equipment installed in the Gymnasiums, equitable mortgage of immovable premises of the Company, corporate guarantee and collateral security by way of equitable mortgage of premises situated at Tardeo and Mahalaxmi,Mumbai of third parties and the personal guarantee of three Directors of the Company.

(Amount repayable in the next 12 months Rs. 1293.00 lacs, Previous year Rs. 849.58 lacs)

- The abovementioned Foreign / Inland Letters of Credit availed by the Company have been shown under "Acceptances" under the head "SECURED LOANS".

3. Disclosure pursuant to Accounting Standard fAS) 11:

In line with the amendment to Accounting Standard (AS) 11 as per the Notification No. G.S.R. 225 (E) dated 31st March 2009, the foreign exchange gains has been adjusted to the cost of the fixed assets as on 31st March 2011.

4. Disclosure pursuant to Accounting Standard (AS) 15 (Revised):

The company's liability towards Gratuity as per provision of Accounting Standard (AS) 15 (Revised) on the basis of actuarial valuation has been covered by a LIC Group Gratuity Scheme. The company does not allow carry forward of compensated absences to employees. Accordingly, no provision has been made for compensated absences.

B. The employees long term benefits like Gratuity, Ex-Gratia and other terminal benefits are valued on actuarial basis and recognized in the profit and loss account. The assumption in the actuarial Valuation of the gratuity provision is as under:

i) Nature of Gratuity - Gratuity is payable to all eligible employees at the rate of 15 days of last drawn salary for each completed year of service subject to the maximum of Rs.10 Lacs for all employees who were on the roll as on 31.03.2011.

ii) The retirement age is taken as 60 years.

iii) Progression of future salary is taken into account while calculating the liability.

iv) Valuation Method: Projected unit credit method.

5. Disclosure pursuant to Accounting Standard (AS) 17:

- There is only one reportable business segment as envisaged by AS-17 'Segment Reporting'. Accordingly, no separate disclosure for the segment reporting is required to be made in the financial statement of the company.

- Secondary segmentation based on geography has not been presented as the company operates primarily in India and the Company perceives that there is no significant difference in its risk and returns in operating from different geographic areas within India.

6. Related Party Disclosures:

Disclosure as required by the Accounting Standard 18, "Related Party Disclosure" is given below:

List of Related Parties:

Key Management Personnel

- Mr. Madhukar Talwalkar (Executive Chairman)

- Mr. Prashant Talwalkar (Managing Director & Chief Executive Officer)

- Mr. Girish Talwalkar (Whole-time Director)

- Mr. Vinayak Gawande (Whole-time Director)

- Mr. Harsha Bhatkal (Whole-time Director)

- Mr. Anant Gawande (Whole-time Director & Chief Financial Officer)

Relatives of Key Management Personnel

- Mrs. Yamini Anant Gawande

- Mr. Sudhakar Talwalkar

Subsidaries / Associates

- Denovo Enterprises Private Limited

- Equinox Wellness Private Limited

- Aspire Fitness Private Limited

Enterprises over which Key Management Personnel & their relatives exercise significant influence:

- Anfin Investments Private Limited

- Better Value Leasing & Finance Ltd

- Better Value Brands Private Limited

- Better Value Properties Private Limited

- Bra in works Learning Systems Private Limited

- Gawande Consultants Private Limited

- Life Fitness India Private Limited

- Popular Prakashan Private Limited

- Popular Institute of Arts Private Limited

- Radhika Hotels Private Limited

- Pinnacle Fitness Private Limited

- Talwalkars Fitness Club

- Talwalkars Health & Leisure

- Talwalkars Health Club

- Talwalkars Health Complex

- Talwalkars Health Commune

- Talwalkars Nutrition Centre

- Talwalkars

- Anant Gawande (HUF)

- Vinayak Gawande (HUF)

- Nitin Gawande (HUF)

- R2 Infrastructure Private Limited '

- R2 Spa Systems

- Indian Cookery.com Private Limited

- India Cookery Private Limited

- Splendor Fitness Private Limited

b) Corporate Guarantees given:

i) Denovo Enterprises Private Limited

The Company has given a Corporate Guarantee amounting to Rs. 235 lacs to

the said Joint Venture Company (Previous year Rs.125 lacs)

ii) Equinox Wellness Private Limited

The Company has given a Corporate Guarantee amounting to Rs. 37.50 lacs to the said Joint Venture Company (Previous year Rs. 37.50 lacs) iii) Aspire Fitness Private Limited

The Company has given a Corporate Guarantee amounting to Rs. 200.00 lacs to the said Joint Venture Company (Previous Year Rs. NIL)

7.Events occurring after Balance Sheet date:

- The company launched a low cost gym concept - Healthy India Fit India (HiFi) in April 2011. Unlike a typical full service Talwalkar Health Gym Format, the Hi-Fi Gyms is a "no-frills" gym providing quality and affordable health and fitness solution catering to the Tier III and Tier IV cities/towns. The Company depending on location and space availability may set up Hi-Fi Gyms in Tier I and Tier II cities. A Hi-Fi Gym would typically be smaller in size, with an average area of 2,500 to 2,800 sq ft. A Hi-Fi gym will have all the key facilities of the existing gyms including imported fitness equipments, air-conditioning, generator back up, excellent ambience and high quality personal trainers.

8.Directors' Remuneration: includes paid to Six Directors of the Company, amounting to Rs. 252.00 lacs. (Previous year Rs. 142.90 lacs)

9. Additional information as prescribed under Part II of Schedule VI of the Companies Act, 1956 in respect of production / inventories are not applicable since the Company does not undertake any trading or manufacturing activity.

10.Non Convertible Debentures:

The Company has issued 11.5% Redeemable Secured Non Convertible Debentures, Face Value Rs.10 lacs each aggregating to Rs.30 Crores through private placement. The principal amount of the NCDs, interest due and any other monies payable by the company in respect of the NCDs will be secured by first pari passu charge on the specified assets of the Company as identified in the Debenture Trust Deed such that a fixed asset cover of 1.25 times is maintained at ail times during the tenor of the NCD.

11.Based on the intimations regarding their status under Micro, Small & Medium Enterprises Development Act, 2006 there are no amounts due and payable to suppliers covered under the above category.

12.The Company made an Initial Public Offer of 60,50,000 equity shares of Rs 10 each for cash at a premium of Rs 118 per equity share, aggregating to Rs 7744 lacs of which Rs 6,672 lacs have been spent towards the object of the issue (Rs3950 lacs were utilised for setting up additional health clubs, Rs.2059.20 towards repayment of unsecured loans and Rs 662.80 lacs towards Issue expenses) and the balance has been invested in debt schemes of mutual fund.

13.The operations of the Belgaum and Koramangala Branches have been temporarily suspended due to some disputes. The company has already filed legal cases against the same and on the basis of advice of its legal counsel, is confident of favourable outcome and early recommencement of operations of the branches.

14.Previous year's figures have been regrouped / re-arranged wherever necessary to confirm to the current year's classification.


Mar 31, 2010

1. Contingent Liabilities: Contingent liabilities not provided for in respect of:

(Rs.in lacs) 2009-10 2008-09

Income Tax demands (net of amount paid in protest) 19 19

Bank Guarantee given on behalf of Joint Ventures 1245.50 1245.50 Claim from a landlord, appeal pending before the Judiciary Not ascertainable Not ascertainable

Claim by Advertising agency # 5.97 Nil

# 8,800 GBP @Rs. 67.81 (as on 31.03.2010)

2. Security against Secured Loans Availed: [Refer Schedule B to accounts]

- All loans, which include sub limit of Inland and Foreign Letter of Credit and Cash Credit facility are sanctioned by Union Bank of India are secured primarily against the first hypothecation / mortgage charge on the entire movable and immovable Fixed Assets & Current Assets of the Company including Gymnasium Equipments, Furniture & Fixtures and any other equipment installed in the Gymnasiums, equitable mortgage of immovable premises of the Company, Corporate Guarantee and collateral security by way of equitable mortgage of premises situated at Tardeo and Mahalaxmi, Mumbai of third parties and the personal guarantee of three Directors of the Company.

(Amount repayable in the next 12 months Rs. 849.58 lacs, Previous year Rs. 963.6 lacs)

- The abovementioned Foreign / Inland Letters of Credit availed by the Company have been shown under "Acceptances" under the head "SECURED LOANS".

3. Disclosure pursuant to Accounting Standard (AS) 11:

In line with the amendment to Accounting Standard (AS) 11 as per the Notification No. G.S.R. 225 (E) dated 31st March, 2009, the foreign exchange gains amounting to Rs. 23.86 lacs previously recognised in the Profit and Loss Account has been transferred from the Reserves and adjusted to the cost of the fixed assets as on 31 st March, 2010.

4. Disclosure pursuant to Accounting Standard (AS) 15 (Revised):

The Company has provided for the Gratuity as per provisions of Accounting Standard (AS) 15 (Revised) on the basis of amount certified by the Actuary. Since the Company does not have a system of leave encashment, the liability against the same is not provided. All leave entitlements lapse as at the end of the year and unutilised leaves are neither encashable nor allowed to be carried forward under the existing policy.

5. Disclosure pursuant to Accounting Standard (AS) 17:

The Company has no Segment defined under Accounting Standard (AS) 17.

6. Related Party Disclosures:

Disclosure as required by the Accounting Standard (AS) 18, "Related Party Disclosure" is given below:

List of Related Parties:

Key Management Personnel

- Mr. Madhukar Talwalkar (Executive Chairman)

- Mr. Prashant Talwalkar (Managing Director & Chief Executive Officer)

- Mr. Girish Talwalkar (Whole-time Director)

- Mr. Vinayak Gawande (Whole-time Director)

- Mr. Harsha Bhatkal (Whole-time Director)

- Mr. Anant Gawande (Whole-time Director & Chief Financial Officer)

Relatives of Key Management Personnel

- Mrs. Yamini Anant Gawande

- Mr. Sudhakar Talwalkar Joint Ventures / Associates

- Talwalkars Pantaloon Fitness Private Limited

- Denovo Enterprises Private Limited

- Equinox Wellness Private Limited

- Aspire Fitness Private Limited

Enterprises over which Key Management Personnel and their relatives exercise significant influence:

- Anfin Investments Private Limited . Talwalkars Fitness Club

- Better Value Leasing & Finance Limited . Talwalkars Health & Leisure

- Better Value Brands Private Limited . Talwalkars Health Club - Better Value Properties Private Limited . Talwalkars Health Complex

- Brainworks Learning Systems Private Limited . Talwalkars Health Commune

- Gawande Consultants Private Limited . Talwalkars Nutrition Centre

- Life Fitness India Private Limited . Talwalkars

- Popular Prakashan Private Limited . Anant Gawande (HUF)

- Popular Institute of Arts Private Limited . Vinayak Gawande (HUF)

- Radhika Hotels Private Limited . Nitin Gawande (HUF)

- Pinnacle Fitness Private Limited

b) Corporate Guarantees given:

i) Talwalkars Pantaloon Fitness Private Limited

The Company has given a Corporate Guarantee amounting to Rs. 1083 lacs to the said Joint Venture Company (Previous Year Rs. 1083 lacs).

ii) Denovo Enterprises Private Limited

The Company has given a Corporate Guarantee amounting to Rs. 125 lacs to the said Joint Venture Company (Previous Year Rs.125 lacs).

iii) Equinox Wellness Private Limited

The Company has given a Corporate Guarantee amounting to Rs. 37.50 lacs to the said Joint Venture Company (Previous Year Rs. 37.50 lacs).

7. Disclosure pursuant to Accounting Standard (AS) 21 and Accounting Standard (AS) 27:

As the Company does not own more than one half of the shareholding in any other Company, it is not required to consolidate its financial statements as per AS 21.

As no Consolidated Financial Statements are prepared by the Company, requirements of AS 27 are not applicable to the Company.

8. Events occurring after Balance Sheet date:

The Company made an Initial Public Offering of 60,50,000 Equity shares for cash at a price of Rs. 128/- per share (including share Premium of Rs. 118/- per equity share) aggregating to Rs. 7,744 lacs. The issue constituted 25.09% of the fully diluted post issue paid up capital of the Company. Subsequently the Companys share has been listed on 10th May, 2010 on NSE as well as BSE.

9. Directors Remuneration: includes paid to Six Directors of the Company, amounting to Rs. 142.90 lacs (Previous Year Rs. 234.97 lacs).

10. Additional information as prescribed under Part II of Schedule VI of the Companies Act, 1956 in respect of production / inventories are not applicable since the Company does not undertake any trading or manufacturing activity.

11. Based on the intimations regarding their status under Micro, Small and Medium Enterprises Development Act, 2006 there are no amounts due and payable to suppliers covered under the above category.

12. Previous years figures have been regrouped/re-arranged wherever necessary to conform with the current years classification.

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