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Notes to Accounts of Talwalkars Better Value Fitness Ltd.

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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