TALWALKARS BETTER VALUE FITNESS LIMITED...Talwalkars Better Value Fitness Limited (the “Issuer”...
Transcript of TALWALKARS BETTER VALUE FITNESS LIMITED...Talwalkars Better Value Fitness Limited (the “Issuer”...
Placement Document
Not for Circulation Private and Confidential
Serial No: ___
TALWALKARS BETTER VALUE FITNESS LIMITED
Talwalkars Better Value Fitness Limited (the “Issuer” or "our Company") was incorporated in the Republic of India under the provisions of the Companies Act, 1956 on
April 24, 2003 with Registration no. 140134. Our Company’s Corporate Identification Number is L92411MH2003PLC140134. For details of change of our name, see
“General Information” beginning on page 167 Our Registered Office: 801- 813, Mahalaxmi Chambers, 22, Bhulabhai Desai Road, Mumbai – 400 026. India. Tel: +91 22
6612 6300. Fax: +91 22 6612 6363. Email: [email protected]. Website: www.talwalkars.net.
Our Company is issuing 3,523,968 equity shares of face value of `10/- each (the "Equity Shares") at a price of ` 305.00 per Equity Share (“Issue Price”) including a
premium of ` 295.00 per Equity Share, aggregating to ` 1,074.81 million (the "Issue").
ISSUE IN RELIANCE UPON CHAPTER VIII OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE
REQUIREMENTS) REGULATIONS, 2009, AS AMENDED (THE “SEBI ICDR REGULATIONS”) AND SECTION 42 OF THE COMPANIES ACT, 2013
READ WITH THE COMPANIES (PROSPECTUS AND ALLOTMENT OF SECURITIES) RULES, 2014, EACH AS AMENDED.
THIS ISSUE AND THE DISTRIBUTION OF THIS PLACEMENT DOCUMENT IS BEING MADE TO QUALIFIED INSTITUTIONAL BUYERS AS
DEFINED UNDER THE SEBI ICDR REGULATIONS (“QIBS”) IN RELIANCE UPON CHAPTER VIII OF THE SEBI ICDR REGULATIONS AND SECTION
42 OF THE COMPANIES ACT, 2013, READ WITH RULE 14 OF THE COMPANIES (PROSPECTUS AND ALLOTMENT OF SECURITIES) RULES, 2014.
THIS PLACEMENT DOCUMENT IS PERSONAL TO EACH PROSPECTIVE INVESTOR AND DOES NOT CONSTITUTE AN OFFER OR INVITATION
OR SOLICITATION OF AN OFFER TO THE PUBLIC OR TO ANY OTHER PERSON OR CLASS OF INVESTORS WITHIN OR OUTSIDE INDIA OTHER
THAN TO QIBS. THIS PLACEMENT DOCUMENT WILL BE CIRCULATED ONLY TO SUCH QIBS WHOSE NAMES ARE RECORDED BY OUR
COMPANY PRIOR TO MAKING AN INVITATION TO SUBSCRIBE TO EQUITY SHARES.
YOU MAY NOT AND ARE NOT AUTHORIZED TO (1) DELIVER THIS PLACEMENT DOCUMENT TO ANY OTHER PERSON; OR (2) REPRODUCE
THIS PLACEMENT DOCUMENT IN ANY MANNER WHATSOEVER OR (3) RELEASE ANY PUBLIC ADVERTISEMENT OR UTILIZE ANY
MEDIA, MARKETING OR DISTRIBUTION CHANNELS OR AGENTS TO INFORM THE PUBLIC AT LARGE ABOUT THIS ISSUE. ANY
DISTRIBUTION OR REPRODUCTION OF THIS PLACEMENT DOCUMENT IN WHOLE OR IN PART IS UNAUTHORIZED. FAILURE TO COMPLY
WITH THIS INSTRUCTION MAY RESULT IN A VIOLATION OF THE SEBI ICDR REGULATIONS OR OTHER APPLICABLE LAWS OF INDIA AND
OTHER JURISDICTIONS.
THE ISSUE IS MEANT ONLY FOR QIBS ON A PRIVATE PLACEMENT BASIS AND IS NOT AN OFFER TO THE PUBLIC OR TO ANY OTHER CLASS
OF INVESTORS.
Invitations and subscription of the Equity Shares to be issued pursuant to the Issue shall only be made pursuant to the Preliminary Placement Document together with the
Application Form, the Confirmation of Allocation Note and the Placement Document. For further information, see the section titled “Issue Procedure” beginning on page
120. The distribution of this Placement Document or the disclosure of its contents without our Company's prior consent to any person other than QIBs and persons retained
by QIBs to advise them with respect to their purchase of the Equity Shares is unauthorized and prohibited. Each prospective investor, by accepting delivery of this
Placement Document agrees to observe the foregoing restrictions and to make no copies of this Placement Document or any documents referred to in this Placement
Document.
INVESTMENTS IN EQUITY SHARES INVOLVE A HIGH DEGREE OF RISK AND PROSPECTIVE INVESTORS SHOULD NOT INVEST IN THIS ISSUE
UNLESS THEY ARE PREPARED TO RISK LOSING ALL OR PART OF THEIR INVESTMENT. PROSPECTIVE INVESTORS ARE ADVISED TO
CAREFULLY READ THE SECTION TITLED “RISK FACTORS” BEGINNING ON PAGE 35 BEFORE MAKING AN INVESTMENT DECISION IN THIS
ISSUE. EACH PROSPECTIVE INVESTOR IS ADVISED TO CONSULT ITS OWN ADVISORS ABOUT THE PARTICULAR CONSEQUENCES TO IT OF
AN INVESTMENT IN THE EQUITY SHARES PROPOSED TO BE ISSUED PURSUANT TO THE PRELIMINARY PLACEMENT DOCUMENT.
Our Company’s Equity Shares are listed on BSE Limited (the “BSE”) and the National Stock Exchange of India Limited (the “NSE”) (the BSE and NSE are collectively the
“Stock Exchange”). The closing price of the Equity Shares on the BSE and the NSE on June 16 2015 was ` 303.30 and ` 306.45 respectively per Equity Share,
respectively. We have received the in-principal approval under Clause 24(a) of the Listing Agreement to list our Equity Shares from the BSE and NSE on June 17, 2015.
Applications shall be made for the listing of the Equity Shares offered through the Preliminary Placement Document on the Stock Exchanges. The Stock Exchanges assume
no responsibility for the correctness of any statements made, opinions expressed or reports contained herein. Admission of the Equity Shares to trading on the Stock
Exchanges should not be taken as an indication of the merits of our Company or the Equity Shares.
OUR COMPANY HAS PREPARED THIS PLACEMENT DOCUMENT SOLELY FOR PROVIDING INFORMATION IN CONNECTION WITH THE
PROPOSED ISSUE.
A copy of the Preliminary Placement Document (which includes disclosures prescribed under Form PAS-4 (as defined hereinafter)) has been delivered to the Stock
Exchanges. A copy of the Placement Document (which includes disclosures prescribed under Form PAS-4 will also be filed with the Stock Exchanges. Our Company shall
also make the requisite filings with the Registrar of Companies, Mumbai, Maharashtra (the “RoC”) and the Securities and Exchange Board of India (“SEBI”) within the
stipulated period as required under the Companies Act, 2013 and the Companies (Prospectus and Allotment of Securities) Rules, 2014.
This Placement Document has not been reviewed by SEBI, the Reserve Bank of India (“RBI”), the Stock Exchanges, the RoC or any other regulatory or listing
authority. The Equity Shares offered in this Issue have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this
Placement Document. This Placement Document has not been and will not be registered as a prospectus with any Registrar of Companies in India, and will not be
circulated or distributed to the public in India or any other jurisdiction and will not constitute a public offer or any other jurisdiction. This Placement Document
will be circulated or distributed to QIBs only and will not constitute an offer to any other class of investors in India or any other jurisdiction.
Information on our Company’s website or any website directly or indirectly linked to our Company’s website or the websites of the Book Running Lead Managers or their
affiliates does not form part of this Placement Document and prospective investors should not rely on such information contained in, or available through, such websites for
their investment in this Issue.
The Equity Shares in this Issue have not been and will not be registered under the U.S. Securities Act, 1933 as amended (the“U.S. Securities Act”), and, may not be offered
or sold within the United States of America (the “Unites States” or the “US”) except pursuant to an exemption from, or in a transaction not subject to, the registration
requirements of the U.S. Securities Act and applicable state securities laws in the United States. Accordingly, the Equity Shares are being offered and sold only outside the
United States in offshore transactions in reliance on Regulation S under U.S. Securities Act (“Regulation S”) and the applicable laws of the jurisdictions where those offers
and sales occur. For a description of these and certain further on offers, sales and transfers of the Equity Shares and distribution of this Placement Document, see sections
titled “Notice to Investors”, “Selling Restrictions” and “ Transfer Restrictions” beginning on pages 1, 132 and 139, respectively.
This Placement Document is dated June 19, 2015.
BOOK RUNNING LEAD MANAGERS TO THE ISSUE
IIFL HOLDINGS LIMITED
8th
Floor, IIFL Centre Kamala City, Senapati Bapat Marg
Lower Parel (West), Mumbai 400 013, Maharashtra, India
CENTRUM CAPITAL LIMITED
Centrum House, CST Road, Vidyanagari Marg, Kalina, Santacruz – East
Mumbai – 400098, Maharashtra, India.
TABLE OF CONTENTS NOTICE TO INVESTORS........................................................................................................................................................ 1
REPRESENTATIONS BY INVESTORS ................................................................................................................................. 3
OFF-SHORE DERIVATIVE INSTRUMENTS ........................................................................................................................ 8
DISCLAIMER CLAUSE OF THE STOCK EXCHANGES ..................................................................................................... 9
PRESENTATION OF FINANCIAL AND OTHER INFORMATION ................................................................................... 10
EXCHANGE RATES .............................................................................................................................................................. 11
INDUSTRY AND MARKET DATA ...................................................................................................................................... 12
FORWARD LOOKING STATEMENTS ................................................................................................................................ 13
ENFORCEMENT OF CIVIL LIABILITIES ........................................................................................................................... 15
CERTAIN DEFINITIONS AND ABBREVIATIONS ............................................................................................................ 16
DISCLOSURE REQUIREMENTS UNDER FORM PAS-4 PRESCRIBED UNDER THE COMPANIES ACT, 2013 ........ 21
SUMMARY OF THE ISSUE .................................................................................................................................................. 24
SUMMARY OF BUSINESS ................................................................................................................................................... 27
SELECTED FINANCIAL INFORMATION .......................................................................................................................... 31
RISK FACTORS ..................................................................................................................................................................... 35
USE OF PROCEEDS .............................................................................................................................................................. 52
CAPITALIZATION AND INDEBTEDNESS ........................................................................................................................ 53
CAPITAL STRUCTURE ........................................................................................................................................................ 54
MARKET PRICE INFORMATION........................................................................................................................................ 57
DIVIDEND POLICY .............................................................................................................................................................. 59
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
................................................................................................................................................................................................. 60
INDUSTRY OVERVIEW ....................................................................................................................................................... 74
OUR BUSINESS ..................................................................................................................................................................... 78
REGULATIONS AND POLICIES ......................................................................................................................................... 96
BOARD OF DIRECTORS AND SENIOR MANAGEMENT .............................................................................................. 101
PRINCIPAL SHAREHOLDERS .......................................................................................................................................... 115
ISSUE PROCEDURE............................................................................................................................................................ 120
PLACEMENT ....................................................................................................................................................................... 130
SELLING RESTRICTIONS .................................................................................................................................................. 132
TRANSFER RESTRICTIONS .............................................................................................................................................. 138
INDIAN SECURITIES MARKET ........................................................................................................................................ 139
DESCRIPTION OF EQUITY SHARES ............................................................................................................................... 143
STATEMENT OF TAX BENEFITS ..................................................................................................................................... 148
LEGAL PROCEEDINGS ...................................................................................................................................................... 158
INDEPENDENT AUDITORS ............................................................................................................................................... 165
GENERAL INFORMATION ................................................................................................................................................ 166
FINANCIAL STATEMENTS ............................................................................................................................................... 167
DECLARATION IN ACCORDANCE WITH FORM PAS-4............................................................................................... 168
DECLARATION ................................................................................................................................................................... 169
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NOTICE TO INVESTORS
Our Company has furnished and accepts full responsibility for the information contained in this Placement
Document and to the best of its knowledge and belief, having made all reasonable enquiries, confirms that this
Placement Document contains all information with respect to our Company, its Subsidiaries and the Equity
Shares, which is material in the context of this Issue. The statements contained in this Placement Document
relating to our Company, its Subsidiaries and the Equity Shares are in all material respects, true and accurate and
not misleading. The opinions and intentions expressed in this Placement Document with regard to our Company,
its Subsidiaries and the Equity Shares are honestly held, have been reached after considering all relevant
circumstances are based on information presently available to our Company and are based on reasonable
assumptions. There are no other facts in relation to our Company, its Subsidiaries and the Equity Shares, the
omission of which would, in the context of this Issue, make any statement in this Placement Document
misleading in any material respect. Further, all reasonable enquiries have been made by our Company to
ascertain such facts and to verify the accuracy of all such information and statements.
The Book Running Lead Managers (“BRLMs”) have not separately verified all the information contained in this
Placement Document (financial, legal or otherwise). Accordingly, neither the BRLMs nor any of their respective
shareholders, directors, , employees, legal counsels, officers, representatives, agents or affiliates make any
express or implied representation, warranty or undertaking and no responsibility or liability is accepted by the
BRLMs or any of its directors, members, shareholders, employees, counsel, officers, representatives, agents or
affiliates make any express or implied representation , warranty or undertaking, and no responsibility or liability
is accepted in connection with its investigation of as to the accuracy or completeness of the information
contained in this Placement Document or any other information supplied in connection with the Equity Shares
or their distribution. Each person receiving this Placement Document acknowledges that such person has relied
neither on the BRLMs nor on any of its directors, shareholders, employees, legal counsels, officers,
representatives, agents or affiliates or on any person affiliated with the BRLMs in connection with its
investigation of the accuracy of such information or its investment decision and each such person must rely on
its own examination of our Company, its Subsidiaries and the merits and risks involved in investing in the
Equity Shares issued pursuant to the issue. Any prospective investor should not construe anything in this
Placement Document as legal, business, tax, accounting or investment advice.
No person is authorized to give any information or to make any representation not contained in this Placement
Document and any information or representation not so contained must not be relied upon as having been
authorized by or on behalf of our Company or the BRLMs. The delivery of this Placement Document at any
time does not imply that the information contained in it is correct as at any time subsequent to its date.
The Equity Shares have not been approved, disapproved or recommended by any regulatory authority.
No regulatory authority has passed on or endorsed the merits of the Issue or the accuracy or adequacy of
this Placement Document. Any representation to the contrary is a criminal offence in certain
jurisdictions.
The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other
jurisdiction outside India and may not be offered or sold and Bids may not be made by persons in any
jurisdiction, except in compliance with the applicable laws of such jurisdiction.
The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933, as
amended (“U.S. Securities Act”) and may not be offered or sold within the United States except pursuant
to an exemption from or in a transaction not subject to, the registration requirements of the U.S.
Securities Act and applicable state securities laws. The Equity Shares are only being offered and sold
outside the United States in reliance on Regulation S and the applicable laws of the jurisdictions where
those offers and sales occur. The Equity Shares are transferable only in accordance with the restrictions
described in the sections “Selling Restrictions” and “Transfer Restrictions” on pages 132 and 139 of this
Placement Document. Subscribers of the Equity Shares will be deemed to make the representations set
forth in the sections “Representations by Investors” and “Transfer Restrictions” on page 3 and 139,
respectively of this Placement Document.
The distribution of this Placement Document and this issue of the Equity Shares in certain jurisdictions may be
restricted by law. As such, this Placement Document does not constitute and may not be used for or in
connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not
authorized or to any person to whom it is unlawful to make such offer or solicitation. In particular, no action has
been taken by our Company and the BRLMs that would permit an offering of the Equity Shares or distribution
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of this Placement Document in any country or jurisdiction, other than India, where action for that purpose is
required. Accordingly, the Equity Shares in this Issue may not be offered or sold, directly or indirectly and
neither this Placement Document nor any Issue material in connection with the Equity Shares issued pursuant to
this Issue may be distributed or published in or from any country or jurisdiction, except under circumstances that
will result in compliance with any applicable rules and regulations of any such country or jurisdiction. Please
refer to the section titled “Transfer Restrictions” beginning on page 139 and “Selling Restrictions” on page
132 of this Placement Document.
The information contained in this Placement Document has been provided by our Company and other sources
identified herein. Distribution of this Placement Document to any person other than the investors specified by
the BRLMs or its representatives and those persons, if any, retained to advise such investor with respect thereto,
is unauthorised and any disclosure of its contents, without prior written consent of our Company, is prohibited.
Any reproduction or distribution of this Placement Document, in whole or in part and any disclosure of its
contents to any other person is prohibited. Each prospective investor, by accepting delivery of this Placement
Document agrees to observe restrictions contained in this Placement Document and to make no copies or
circulation of this Placement Document or any documents referred to in this Placement Document.
In making an investment decision, prospective investors must rely on their own examination of our Company,
its Subsidiaries and the terms of this Issue including merits and risk involved. Investors should not construe the
contents of this Placement Document as business, legal, tax, accounting or investment advice. Investors should
consult their own counsels and advisors as to business, legal, tax, accounting and related matters concerning the
Issue. In addition, neither our Company nor the BRLMs is making any representation to any investor, purchaser,
offeree or subscriber of such Equity Shares pursuant to the Issue, regarding the legality of an investment in the
Equity Shares by such offeree or subscriber under applicable legal, investment or similar laws or regulations.
Each investor, purchaser, offeree or subscriber of the Equity Shares in this Issue is deemed to have
acknowledged, represented and agreed that it is eligible to invest in India and in our Company under Indian law,
including Chapter VIII of the SEBI ICDR Regulations and Section 42 of the Companies Act, 2013, and that it is
not prohibited by SEBI or any other statutory authority from buying, selling or dealing in the securities
including the Equity Shares or otherwise accessing the capital markets in India. Each subscriber of the Equity
Shares in this Issue also acknowledges that it has been afforded an opportunity to request from our Company
and review information relating to our Company and the Equity Shares.
This Placement Document contains summaries of certain terms of certain documents, which summaries are
qualified in their entirety by the terms and conditions of such document. All references herein to “you” or
“your” is to the prospective investors of the Issue.
The information on our Company's website www.talwalkars.net or any website directly or indirectly linked to
our Company's website or the website of the BRLMs or its affiliates does not constitute or form part of this
Placement Document. Prospective investors should not rely on such information contained in, or available
through, such websites.
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REPRESENTATIONS BY INVESTORS
All references herein to "you" or "your" is to the prospective investors in this Issue.
By bidding for and/or subscribing to any Equity Shares under the Issue, you are deemed to have represented,
warranted, acknowledged and agreed to our Company and the BRLMs, as follows:
You (i) are a qualified institutional buyer as defined in Regulation 2(1)(zd) of the SEBI ICDR
Regulations ("QIB") and not excluded pursuant to Regulation 86(1)(b) of the SEBI ICDR Regulations,
(ii) having a valid and existing registration under applicable laws and regulations of India (iii) undertake
to acquire, hold, manage or dispose of any Equity Shares that are allocated to you for the purposes of
your business in accordance with Chapter VIII of the SEBI ICDR Regulations, (iv) undertake to comply
with the SEBI Regulations, Companies Act and all other applicable laws, including reporting obligations
if any;
You are authorized to consummate the subscription of the Equity Shares in this Issue in compliance with
all applicable laws and regulations;
If you are not a resident of India, but a QIB, you are an Eligible FPI (as defined hereinafter) including
an FII (including a sub-account other than a sub-account which is a foreign corporate or a foreign
individual) having a valid and existing certificate of registration with SEBI under the applicable laws in
India or a multilateral or bilateral development financial institution or an FVCI (as defined hereinafter),
in each case having a valid and existing registration with the SEBI under the applicable laws in India or
a multilateral or bilateral development financial institution and are eligible to invest in India under
applicable law, including the Foreign Exchange Management (Transfer or Issue of Security by a Person
Resident Outside India) Regulations, 2000, as amended, and any notifications, circulars or clarifications
issued there under, and have not been prohibited by the SEBI or any other regulatory authority, from
buying, selling or dealing in securities;
You will make all necessary filings with appropriate regulatory authorities including RBI, as required
pursuant to applicable laws;
If you are allotted Equity Shares pursuant to this Issue, you shall not, for a period of one year from date
of Allotment, sell the Equity Shares so acquired, except on the floor of the Stock Exchanges, see the
section " Transfer Restrictions" on beginning page 139 of this Placement Document;
You have made or been deemed to have made, as applicable, the representations set forth under the
section " Transfer Restrictions" and "Selling Restrictions" beginning on pages 139 and 133,
respectively of this Placement Document;
You are aware that the Preliminary Placement Document has not been verified or affirmed by the SEBI,
RBI, the Stock Exchanges, RoC or any other regulatory or listing authority and will not be filed with the
Registrar of Companies or any other regulatory or listing authority and is intended only for use by QIBs.
The Preliminary Placement Document has been filed with the Stock Exchanges and displayed on the
websites of our Company and the Stock Exchanges. Our Company shall make the requisite filings with
the RoC and the SEBI within the stipulated period as required under the Companies Act, 2013 and the
Companies (Prospectus and Allotment of Securities) Rules, 2014;
You are entitled to subscribe for such Equity Shares under the laws of all relevant jurisdictions which
apply to you and that you have fully observed such laws and obtained all such governmental and other
consents in each case which may be required there under and complied with all necessary formalities, to
enable you to commit to participation in this Issue and to perform your obligations in relation thereto
(including, without limitation, in the case of any person on whose behalf you are acting, all necessary
consents and authorizations to agree to the terms set out or referred to in this Placement Document) and
will honour such obligations;
You confirm that either: (i) you have not participated in or attended any investor meetings or
presentations by our Company or our agents ("Company Presentations") with regard to our Company
or this Issue; or (ii) if you have participated in or attended any Company Presentations: (a) you
understand and acknowledge that the BRLMs may not have knowledge of the statements that our
Company or our agents may have made at such Company Presentations and are therefore unable to
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determine whether the information provided to you at such Company Presentations may have included
any material misstatements or omissions and accordingly, you acknowledge that the BRLMs has advised
you not to rely in any way on any information that was provided to you at such Company Presentations,
and (b) you confirm that, to the best of your knowledge, you have not been provided any material
information that was not publicly available;
Neither our Company nor the BRLMs or their shareholders, directors, officers, employees, counsel,
representatives, agents or affiliates are making any recommendation to you or advising you regarding the
suitability of any transactions that you may enter into in connection with this Issue. Your participation in
this Issue is on the basis that you are not and will not be a client of the BRLMs. None of the BRLMs or
their directors, shareholders, officers, employees, counsel, representatives, agents or affiliates have any
duty or responsibility to you for providing the protection afforded to its clients or customers or for
providing advice in relation to this Issue and is in no way acting in a fiduciary capacity;
You are a sophisticated investor and have such knowledge and experience in financial, business and
investment matters as to be capable of evaluating the merits and risks of an investment in the Equity
Shares. You are experienced in investing in private placement transactions of securities of companies in
a similar nature of business, similar stage of development and in similar jurisdictions. You or any
accounts for which you are subscribing for the Equity Shares (i) are each able to bear the economic risk
of your investment in the Equity Shares, (ii) will not look to our Company and/or the BRLMs or any of
their respective directors, shareholders, officers, employees, counsel, representatives, agents or affiliates
for all or part of any such loss or losses that may be suffered in connection with this Issue, including
losses arising out of non-performance by our Company of any of its obligations or any breach of any
representations and warranties by our Company, whether to you or otherwise, (iii) are able to sustain a
complete loss on the investment in the Equity Shares, (iv) have no need for liquidity with respect to the
investment in the Equity Shares and (v) have no reason to anticipate any change in your or their
circumstances, financial or otherwise, which may cause or require any sale or distribution by you or
them of all or any part of the Equity Shares. You acknowledge that an investment in the Equity Shares
involves a high degree of risk and that the Equity Shares are, therefore, a speculative investment. You
are seeking to subscribe to the Equity Shares in this Issue for your own investment and not with a view
to resell or distribute;
You are aware and understand that the Equity Shares are being offered only to QIBs and are not being
offered to the general public. Further, you are aware and understand that the allotment of the Equity
Shares shall be on a discretionary basis at the discretion of our Company and the BRLMs;
You have made, or been deemed to have made, as applicable, the representations set forth under "Selling
Restrictions" and " Transfer Restrictions" beginning on pages 132 and 139, respectively;
You are aware that additional requirements would be applicable if you are in jurisdictions other than
India, as set forth under the sections titled “Selling Restrictions” and “Transfer Restrictions” on pages
132 and 139, respectively. You are entitled to subscribe for and acquire the Equity Shares under the laws
of all relevant jurisdictions that apply to you and that you have fully observed such laws and you have
necessary capacity, have obtained all necessary consents, governmental or otherwise, and authorisations
and complied with all necessary formalities, to enable you to commit to participation in this Issue and to
perform your obligations in relation thereto (including, without limitation, in the case of any person on
whose behalf you are acting, all necessary consents and authorisations to agree to the terms set out or
referred to in this Placement Document), and will honour such obligations;;
You have been provided a serially numbered copy of the Preliminary Placement Document and have
read the Preliminary Placement Document in its entirety; including, in particular, the section titled "Risk
Factors" beginning on page 35 of the Preliminary Placement Document;
All statements other than statements of historical fact included in this Placement Document, including,
without limitation, those regarding our Company’s financial position, business strategy, plans and
objectives of management for future operations (including development plans and objectives relating to
our Company’s business), are forward-looking statements. Such forward-looking statements involve
known and unknown risks, uncertainties and other important factors that could cause actual results to be
materially different from future results, performance or achievements expressed or implied by such
forward-looking statements. Such forward- looking statements are based on numerous assumptions
regarding our Company’s present and future business strategies and environment in which our Company
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will operate in the future. You should not place undue reliance on forward-looking statements, which
speak only as at the date of this Placement Document. Our Company assumes no responsibility to update
any of the forward looking statements contained in this Placement Document;
That in making your investment decision, (i) you have relied on your own examination of our Company,
its Subsidiaries and the terms of this Issue, including the merits and risks involved, (ii) you have made
and will continue to make your own assessment of our Company, its Subsidiaries, the Equity Shares and
the terms of this Issue, (iii) you have relied upon your own investigations and resources in deciding to
invest in the Equity Shares, (iv) you have consulted with your own independent counsel and advisors or
otherwise have satisfied yourself concerning, without limitation, the effects of local laws, including any
applicable securities law and (v) you have relied solely on the information contained in the Preliminary
Placement Document and no other disclosure or representation by our Company or any other party and
(vi) you have received all information that you believe is necessary or appropriate in order to make an
investment decision in respect of our Company and the Equity Shares;
You are aware that if you, together with any other QIBs belonging to the same group or under common
control, are allotted more than five per cent of the Equity Shares in this Issue, our Company shall be
required to disclose your name and the number of the Equity Shares allotted to you to the Stock
Exchanges and the Stock Exchanges will make the same available on their websites and you consent to
such disclosures; also, if you are a top ten shareholder in our Company, our Company will be required to
make a filing with the RoC within 15 days of the change, as per Section 93 of the Companies Act, 2013;
You agree that in terms of Section 42(7) of the Companies Act, 2013, we shall file the list of QIBs (to
whom the Placement Document are circulated) along with other particulars with the RoC and SEBI
within 30 days of circulation of this Placement Document and other filings required under the
Companies Act, 2013.
Neither the BRLMs nor any of their respective directors, shareholders, officers, employees, legal
counsels, representatives, agents or affiliates, have provided you with any tax advice or otherwise made
any representations regarding the tax consequences of the Equity Shares (including but not limited to
this Issue and the use of the proceeds from the Equity Shares). You will obtain your own independent
tax advice from a reputable service provider and will not rely on the BRLMs or any of their respective
directors, shareholders, officers, employees, counsel, representatives, agents or affiliates when
evaluating the tax consequences in relation to the Equity Shares (including but not limited to this Issue
and the use of the proceeds from the Equity Shares). You waive, and agree not to assert, any claim
against our Company, the BRLMs, or any of their shareholders, directors, officers, employees, counsel,
representatives, agents or affiliates with respect to the tax aspects of the Equity Shares or as a result of
any tax audits by tax authorities, wherever situated;
If you are acquiring the Equity Shares to be issued pursuant to this Issue, for one or more managed
accounts, you represent and warrant that you are authorized in writing by each such managed account to
subscribe to the Equity Shares for each managed account and to make (and you hereby make) the
representations, warranties, acknowledgements and agreements herein for and on behalf of each such
account, reading the reference to "you" to include such accounts;
You are not a "Promoter" (as defined under the SEBI ICDR Regulations) of our Company or any of its
affiliates and are not a person related to the Promoters, either directly or indirectly and your bid does not
directly or indirectly represent the Promoter or Promoter Group Entities or person related to the
Promoters of our Company;
You have no rights under a shareholders' agreement or voting agreement with the Promoters or persons
related the Promoters, no veto rights or right to appoint any nominee director on the Board of Directors
of our Company other than such rights acquired in the capacity of a lender not holding any Equity
Shares of our Company, which shall not be deemed to be a person related to the Promoter;
You have no right to withdraw your Bid after the Bid/Issue Closing Date (as defined hereinafter);
You are eligible including without any limitation under any applicable law or regulation, to apply for
and hold the Equity Shares Allotted to you together with any Equity Shares held by you prior to this
Issue. You further confirm that your aggregate holding upon such issue of the Equity Shares shall not
exceed the level permissible, as per any applicable law or regulation;
6
The Bids submitted by you would not eventually result in triggering a tender offer under the Securities
and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, as
amended (the "Takeover Code");
To the best of your knowledge and belief, together with other QIBs in this Issue that belong to the same
group or are under common control as you, the allotment under the present Issue shall not exceed 50%
of this Issue. For the purposes of this representation: (a) the expression 'belong to the same group' shall
derive meaning from the concept of 'companies under the same group' as provided in sub-section (11) of
Section 372 of the Companies Act, 1956; and (b) "control" shall have the same meaning as is assigned to
it by Regulation 2(1)(e) of the Takeover Code;
You shall not undertake any trade in the Equity Shares credited to your depository participant account
or beneficiary account until such time that the final listing and trading approvals for the Equity Shares is
issued by the Stock Exchanges, as applicable;
You are aware that in-principle approval under Clause 24(a) of the Listing Agreement has been received
from the Stock Exchanges and application for final listing and trading approval shall be made after
allotment of Equity Shares. There can be no assurance that such final approvals for listing and trading in
the Equity Shares will be obtained in time, or at all. Our Company shall not be responsible for any delay
or non-receipt of such final approvals or any loss arising from such delay or non-receipt;
You are aware and understand that the BRLMs has entered into a Placement Agreement with our
Company whereby the BRLMs has, subject to the satisfaction of certain conditions set out therein,
agreed to manage this Issue and use reasonable efforts to procure subscriptions for the Equity Shares on
the terms and conditions set forth therein;
That the contents of this Placement Document are exclusively the responsibility of our Company and
that neither the BRLMs nor any person acting on its behalf has, or shall have, any liability for any
information, representation or statement contained in this Placement Document or any information
previously published by or on behalf of our Company and will not be liable for your decision to
participate in the Issue based on any information, representation or statement contained in this Placement
Document or otherwise. By accepting a participation in this Issue, you agree and confirm that you have
neither received nor relied on any other information, representation, warranty or statement made by or
on behalf of the BRLMs or our Company or any other person and, to the greatest extent permitted by
law, neither the BRLMs nor our Company nor any other person will be liable for your decision to
participate in this Issue based on any other information, representation, warranty or statement that you
may have obtained or received, whether contained in this Placement Document or otherwise;
As stated in the preceding clause herein, the only information you are entitled to rely on, and on which
you have relied on, in committing yourself to acquire the Equity Shares is contained in this Placement
Document, such information being all that you deem necessary to make an investment decision in
respect of the Equity Shares. You have neither received nor relied on any other information given or
representations, warranties or statements made by the BRLMs (including any view, statement, opinion
or representation expressed in any research published or distributed by the BRLMs or its affiliates or any
view, statement, opinion or representation expressed by any staff (including research staff) of the
BRLMs or its affiliates) or our Company or any of their respective shareholders, directors, officers,
employees, counsels, advisors, representatives, agents or affiliates and the neither the BRLMs nor the
Company will be liable for your decision to accept an invitation to participate in this Issue based on any
other information, representation, warranty or statement or opinion;
You agree to indemnify and hold our Company and the BRLMs and its directors, officers, affiliates,
associates and representatives harmless from any and all costs, claims, liabilities and expenses (including
legal fees and expenses) arising out of or in connection with any breach of the representations and
warranties in this section and the sections titled "Selling Restrictions" and " Transfer Restrictions"
beginning on pages 132 and 139, respectively. You agree that the indemnity set forth in this paragraph
shall survive the resale of the Equity Shares by or on behalf of the managed accounts;
You understand that the Equity Shares have not been and will not be registered under the U.S. Securities
Act or with any securities regulatory authority of any state of the United States and accordingly, may not
be offered or sold within the United States, except in reliance on an exemption from the registration
7
requirements of the Securities Act. Accordingly, the Equity Shares are being offered and sold outside the
United States in “offshore transactions”, as defined in, and in reliance on, Regulation S;
You are, at the time the Equity Shares are purchased, located outside of the United States (within the
meaning of Regulation S) and you are not an affiliate of our Company or a person acting on behalf of
such an affiliate of our Company.
You are purchasing the Equity Shares in offshore transactions meeting the requirements of Rule 903 or
904 of Regulation S and you shall not offer, sell, pledge or otherwise transfer such Equity Shares except
in an offshore transaction complying with Regulation S or pursuant to any other available exemption
from registration under the U.S. Securities Act and in accordance with all applicable securities laws of
the states of the United States and any other jurisdiction, including India;
You shall comply with all applicable laws and regulations including making of necessary filings with
any Governmental authority having jurisdiction with regard thereto;
That each of the representations, warranties, acknowledgements and agreements set forth above shall
continue to be true and accurate at all times up to and including the Allotment and listing and trading of
the Equity Shares;
That our Company, the BRLMs and its and its officers, directors, affiliates, associates and
representatives and others will rely on the truth and accuracy of the foregoing representations,
warranties, acknowledgements and undertakings, which are irrevocable;
That you are eligible to invest in India under applicable law including the Foreign Exchange
Management (Transfer or Issue of Security by Person Resident Outside India) Regulations, 2000, as
amended from time to time, and any notifications, circulars or clarifications issued there under,
("Security Regulations") and have not been prohibited by the SEBI from buying, selling or dealing in
securities;
You understand that neither the BRLMs nor their affiliates have any obligation to purchase or acquire all
or any part of the Equity Shares purchased by you in this Issue or to support any losses directly or
indirectly sustained or incurred by you for any reason whatsoever in connection with the Issue including
non-performance by our Company of any of our respective obligations or any breach of any
representations or warranties by our Company, whether to you or otherwise;
That each of the acknowledgements and agreements set out above shall continue to be true and accurate
at all times up to and including the allotment of the Equity Shares and the listing and commencement of
trading of Equity Shares, wherever the context may require.
You agree that any dispute arising in connection with this Issue will be governed by and construed in
accordance with the laws of India, and the courts in Mumbai, India shall have exclusive jurisdiction to
settle any disputes which may arise out of or in connection with the Preliminary Placement Document
and the Placement Document.
8
OFF-SHORE DERIVATIVE INSTRUMENTS
Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in terms of
Regulation 22 of the SEBI FPI Regulations (as defined hereinafter), FPIs (which includes FIIs), other than
Category III Foreign Portfolio Investor (as defined hereinafter) and unregulated broad based funds, which are
classified as Category II foreign portfolio investor (as defined under the SEBI FPI Regulations) by virtue of their
investment manager being appropriately regulated, may issue, subscribe or otherwise deal in offshore derivative
instruments (as defined under the SEBI FPI Regulations as any instrument, by whatever name called, which is
issued overseas by an FPI against securities held by it that are listed or proposed to be listed on any recognized
stock exchange in India, as its underlying) (all such offshore derivative instruments are referred to herein as "P-
Notes") directly or indirectly, only in the event that (i) such offshore derivative instruments are issued only in
favour of those entities which are regulated by any appropriate foreign regulatory authorities in the countries of
their incorporation; and (ii) such offshore derivative instruments are issued after compliance with “know your
client” norms. An FPI is also required to ensure that no further issue or transfer of any offshore derivative
instrument is made by or on behalf of it to any persons that are not regulated by an appropriate foreign regulatory
authority.
P-Notes have not been and are not being offered or sold pursuant to this Placement Document. Neither the
Preliminary Placement Document nor the Placement Document contains or will contain any information
concerning P-Notes, or the issuer(s) of any such P-Notes, including, without limitation, any information regarding
any risk factors relating thereto.
Any P-Notes that may be issued are not securities of our Company and do not constitute any obligations of,
claims on, or interests in our Company. Our Company has not participated in any offer of any P-Notes, or in the
establishment of the terms of any P-Notes, or in the preparation of any disclosure related to any P Notes. Any P-
Notes that may be offered are issued by and are solely the obligations of, third parties that are unrelated to our
Company. Our Company and the BRLMs do not make any recommendation as to any investment in P-Notes and
do not accept any responsibility whatsoever in connection with any P-Notes.
Any P-Notes that may be issued are not securities of the BRLMs and do not constitute any obligations of, or
claims on, the BRLMs. Affiliates of the BRLMs which are FPIs may purchase, to the extent permissible under
law, the Equity Shares in the Issue, and may issue P-Notes in respect thereof.
In terms of the SEBI FPI Regulations, the issue of Equity Shares to a single FPI or an investor group (which
means the same set of ultimate beneficial owner(s) investing through multiple entities) is not permitted to be 10%
or above of our post-Issue Equity Share capital. As per the circular issued by SEBI on November 24, 2014, these
investment restrictions shall also apply to subscribers of offshore derivative instruments. Two or more subscribers
of offshore derivative instruments having a common beneficial owner shall be considered together as a single
subscriber of the offshore derivative instruments. In the event an investor has investments as a FPI and as a
subscriber of offshore derivative instruments, these investment restrictions shall apply on the aggregate of the FPI
and offshore derivative instruments investments held in the underlying company.
Prospective investors interested in purchasing any P-Notes have the responsibility to obtain adequate
disclosure as to the issuer(s) of such P-Notes and the terms and conditions of any such P-Notes from the
issuer(s) of such P-Notes. Neither SEBI nor any other regulatory authority has reviewed or approved any
P-Notes or any disclosure related thereto. Prospective investors are urged to consult with their own
financial, legal, accounting and tax advisors regarding any contemplated investment in P-Notes, including
whether P- Notes are issued in compliance with applicable laws and regulations.
9
DISCLAIMER CLAUSE OF THE STOCK EXCHANGES
As required, a copy of the Preliminary Placement Document was submitted to the Stock Exchanges and a copy of
this Placement Document has been filed with the Stock Exchanges. The Stock Exchanges do not in any manner: 1. warrant, certify or endorse the correctness or completeness of any of the contents of this Placement
Document;
2. warrant that our Equity Shares issued pursuant to this Issue will be listed or will continue to be listed on the
Stock Exchanges; or
3. take any responsibility for the financial or other soundness of the Company, its Promoters, its management or
any scheme or project of our Company, and
The filing of this Placement Document should not for any reason be deemed or construed to mean that this
Placement Document has been cleared or approved by the Stock Exchanges. Every person who desires to apply
for or otherwise acquires any Equity Shares of our Company pursuant to this Issue may do so pursuant to an
independent inquiry, investigation and analysis and shall not have any claim against the Stock Exchanges
whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such
subscription/acquisition, whether by reason of anything stated or omitted to be stated herein or for any other
reason whatsoever.
10
PRESENTATION OF FINANCIAL AND OTHER INFORMATION
Certain Conventions In this Placement Document, unless the context otherwise indicates or implies, references to “you”, “offeree”,
“purchaser”, “subscriber”, “recipient”, “investors” and “potential investor” are to the prospective investors of the
Equity Shares issued pursuant to this Issue. All references to the “Company”, “Issuer”, “TBVFL”, “we”, “our”
and “us” are to Talwalkars Better Value Fitness Limited. References in this Placement Document to “India” are
to the Republic of India and the “Government” or the “Central Government” or the “State Government” are to the
Government of India, central or state, as applicable.
Currency Presentation
In this Placement Document references to “USD”, “$” and “U.S. dollars” are to the legal currency of the United
States and references to “`”, “Re.” “Rs.” and “Rupees” are to the legal currency of the Republic of India and all
references to “GBP” are to the pound sterling, the official currency of the United Kingdom. All references herein
to the “U.S.” or the “United States” are to the United States of America and its territories and possessions, and all
references to “India” are to the Republic of India and its territories and possessions, and all references to “UK” or
the “United Kingdom” are to the United Kingdom and its territories and possessions. Financial Data
Our Company publishes its financial statements in Indian Rupees. Our Company's financial statements included
herein have been prepared in accordance with Standards on accounting principles generally accepted in India or
Indian GAAP and the Companies Act, 2013 and have been audited by the Auditors in accordance with the
applicable generally accepted auditing standards in India prescribed by ICAI. Our Company's Fiscal commences on
April 1 of each year and ends on March 31 of the succeeding year; so all references to a particular Fiscal are to the
twelve-month period ended on March 31 of that year. Unless otherwise indicated, all financial data including the
audited consolidated financial statements as of and for Fiscals 2013, 2014 and 2015and related notes thereto
included in this Placement Document (collectively, the “Financial Statements”) have been prepared in
accordance with the generally accepted accounting principles in India (“Indian GAAP”) and have been audited
or reviewed, as applicable, by the Auditors in accordance with the applicable generally accepted auditing and/or
limited review standards in India prescribed by ICAI.
Indian GAAP differs in certain significant respects from International Financial Reporting Standards (“IFRS”)
and U.S. GAAP. We have not attempted to quantify the impact of U.S. GAAP or IFRS on financial data included
in this Placement Document nor do we provide a reconciliation of our financial statements to those of U.S. GAAP
or IFRS. Accordingly, the degree to which the financial statements prepared in accordance with Indian GAAP
included in this Placement Document will provide meaningful information is entirely dependent on the reader’s
familiarity with the respective accounting practices. We have not attempted to explain those differences or
quantify their impact on the financial data included herein, and we urge you to consult your own advisors
regarding such differences and their impact on our financial data. Our Company publishes its financial statements
in Indian Rupees Any reliance by persons not familiar with the respective accounting practices on the financial
disclosures presented in this Placement Document should accordingly be limited. See the section titled “Risk
Factors” beginning on page 35 of this Placement Document. In this Placement Document, certain monetary amounts have been subject to rounding adjustments; accordingly,
figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which precede them.
Further, for the purpose of maintaining standardization in the presentation of data in this Placement Document,
figures and amounts have been reflected as “million”, except as expressly stated, and may have been subjected to
rounding off adjustments upto two places.
11
EXCHANGE RATES
Fluctuations in the exchange rate between the Rupee and foreign currencies will affect the foreign currency
equivalent of the Rupee price of the Equity Shares on the Stock Exchanges. These fluctuations will also affect the
conversion into foreign currencies of any cash dividends paid in Rupees on the Equity Shares. The exchange rate
as at June 16, 2015 was ` 64.15 = U.S. Dollar 1.00. The following table sets forth, for the periods indicated, information with respect to the exchange rate between
the Rupee and the U.S. dollar (in ` per US$), for the periods indicated. The exchange rates are based on the
reference rates released by RBI, which are available on the website of the RBI. (` per U.S.$ 1.00)
Period End Average(1)
High Low
FY Ended:
March 31, 2015 62.59 61.15 63.75 58.43
March 31, 2014 60.10 60.50 68.36 53.74
March 31, 2013 54.39 54.45 57.22 50.56
Quarter Ended:
March 31, 2015 62.59 62.25 63.45 61.41
December 31, 2014 63.33 62.00 63.75 61.04
September 30, 2014 61.61 60.59 61.61 59.72
June 30, 2014 60.09 59.77 61.12 58.43
Month ended:
May 31, 2015 63.76 63.80 64.20 63.52
April 30, 2015 63.58 62.75 63.61 62.16
March 31, 2015 62.59 62.45 62.82 61.82
February 28, 2015 61.79 62.04 62.43 61.68
January 31, 2015 61.76 62.23 63.45 61.41
December 31, 2014 63.33 62.75 63.75 61.85
Source: www.rbi.org.in
(1)
Represents the average of the reference rates released by the Reserve Bank of India on closing of each day
during the period for each year, quarter and month presented.
No representation is made that the Rupee amounts actually represent such amounts in U.S. dollars or could have
been or could be converted into U.S. dollars at the rates indicated, any other rates or at all.
12
INDUSTRY AND MARKET DATA
Information regarding markets, market size, market share, market position, growth rates and other industry data
pertaining to our Company's business contained in this Placement Document consists of estimates/forecasts
based on data reports compiled by professional organizations and analysts, on data from recognized industry
sources, other external sources, and on our Company's knowledge of the markets in which our Company
operates. The statistical information included in this Placement Document has been reproduced from various
trade, industry and Government publications and websites. Our Company confirm that such information and
data has been accurately reproduced, and that as far as we are aware and are able to ascertain from information
published by third parties, no facts have been omitted that would render the reproduced information inaccurate
or misleading. This data is subject to change and cannot be verified with complete certainty due to limits on the availability and
reliability of the raw data and other limitations and uncertainties inherent in any statistical survey. In many
cases, there is no readily available external information (whether from trade associations, government bodies or
other organizations) to validate market-related analyses and estimates, thus requiring our Company to rely on
internally developed estimates. For further details, please refer to the section titled “Industry Overview” on page
74 of this Placement Document
Neither our Company nor the BRLMs nor any of their respective affiliates and advisors or any other person
connected with this Issue has independently verified such data and neither our Company nor the BRLMs make
any representation regarding the accuracy of such data. Industry sources and publications generally state that the
information contained therein has been obtained from sources believed to be reliable, but their accuracy,
completeness and underlying assumptions are not guaranteed and their reliability cannot be assured and
accordingly, investment decisions should not be based on such information. Industry sources and publications
are also prepared based on information as of specific dates and may no longer be current or reflect current
trends. Several reports also expressly disclaim legal responsibility and liability of the person/ organization
preparing the report for any loss or damage resulting from the contents of such reports.
Accordingly, our Company and the BRLMs do not take any responsibility for the data, projections, forecasts,
conclusions or any other information as described in this Placement Document. Certain information contained
herein pertaining to periods prior to the date of Placement Document is presented in the form of estimates as
they appear in the respective reports/ source documents. The actual data for those years may vary significantly
and materially from the estimates so contained. Similarly, while our Company believes its internal estimates to
be reasonable, such estimates have not been verified by any independent sources and our Company cannot
assure potential investors as to their accuracy, correctness or completeness. The extent to which the market and industry data used in this Placement Document is meaningful
depends on the reader’s familiarity with and understanding of the methodologies used in compiling such
data.
13
FORWARD LOOKING STATEMENTS
All statements contained in this Placement Document that are not statements of historical fact constitute “forward-looking statements”. These statements express views of the management of our Company and
expectations based upon certain assumptions regarding trends in the Indian and international financial markets
and regional economies, the political climate in which our Company operates and other factors. Prospective
investors can identify forward-looking statements by the use of forward-looking terminology, including the
words "aim", "anticipate", "believes", "continue", "can", "could" "estimates", "expects", "intends", "may",
"will", "plans", "objective", "potential", "project", "pursue", "shall", "will likely result", "will continue", "will
achieve", "is likely" or "should" or, in each case, their negative or other variations or comparable terminology or
by discussions of strategies, plans, objectives, goals, future events or intentions. However, these are not the
exclusive means of identifying forward- looking statements. All statements regarding our Company’s expected financial condition and results of operations, business plans,
including potential acquisition and prospects are forward-looking statements. These forward-looking statements
include statements as to our business strategy, our revenue and profitability and other matters discussed in this
Placement Document regarding matters that are not historical facts. They appear in a number of places
throughout this Placement Document and include statements regarding the intentions, beliefs or current
expectations of our Company concerning, among other things, the results of operations, financial condition,
liquidity, prospects, growth, strategies and dividend policy of our Company and the industry in which we
operate.
Forward-looking statements are not guarantees of future performance. Our Company's actual results of
operations, financial condition, liquidity, dividend policy and the development of the industry in which we
operate may differ materially from the impression created by the forward-looking statements contained in this
Placement Document. In addition, even if the results of operations, financial condition, liquidity and dividend
policy of our Company and the development of the industry in which we operate are consistent with the
forward-looking statements contained in this Placement Document, those results or developments may not be
indicative of results or developments in subsequent periods. These forward-looking statements and any other
projections contained in this Placement Document (whether made by us or any third party) are predictions and
involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance
or achievements to be materially different from any future results, performance or achievements expressed or
implied by such forward-looking statements or other projections.
Additional factors that could cause actual results, performance or achievements to differ materially including but
are not limited to those discussed inter alia under the section titled “Risk Factors”, “Management’s Discussion
and Analysis of Financial Condition and Results of Operations”, “Industry Overview” and “Our Business”
beginning on pages 35, 60, 74 and 78, are: Our ability to maintain and enhance the “Talwalkars” brand
Change in our accounting policies;
General economic and business conditions in the markets in which we operate and in the local, regional and
national economies;
Changes in laws and regulations relating to the sectors/areas in which we operate;
Increased competition or other factors affecting the industry segments in which our Company operates;
Our ability to successfully implement our growth strategy and expansion plans, and to successfully launch
and implement various projects and business plans including those for which funds are being raised through
this Issue;
Our ability to meet our capital expenditure requirements and/or increase in capital expenditure;;
Fluctuations in operating costs and impact on the financial results;
Our ability to attract and retain qualified personnel;
Any adverse outcome in the legal proceedings in which we are involved;
any changes in competitors’ pricing, loss of any significant customer and other competitive strategies and
industry dynamics beyond our control;
Occurrence of natural disasters or calamities affecting the areas in which we have operations; and
Other factors beyond our control and as discussed in this Placement Document including “Risk Factors”
beginning on page 35 of this Placement Document.
14
Additional factors that could cause actual results, performance or achievements to differ materially include, but
are not limited to, those discussed under sections "Risk Factors", "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Our Business" beginning on pages 35, 60 and 78,
respectively. These forward-looking statements speak only as of the date of this Placement Document. Our
Company and the BRLMs expressly disclaim any obligation or undertaking to release publicly any updates or
revisions to any forward-looking statement contained herein to reflect any changes in our Company's
expectations with regard thereto or any change in events, conditions or circumstances on which any such
statements are based.
All forward-looking statements are subject to risks, uncertainties and assumptions about our Company that could
cause actual results and property valuations to differ materially from those contemplated by the relevant
statement. The forward-looking statements contained in this Placement Document are based on the beliefs of
management, as well as the assumptions made by, and information currently available to management. Although
our Company believe that the expectations reflected in such forward-looking statements are reasonable at this
time, our Company cannot assure investors that such expectations will prove to be correct. Given these
uncertainties, investors are cautioned not to place undue reliance on such forward-looking statements. In any
event, these statements speak only as of the date of this Placement Document or the respective dates indicated in
this Placement Document and our Company undertakes no obligation to update or revise any of them, whether
as a result of new information, future events, changes in assumptions or changes in factors affecting these
forward looking statements or otherwise. If any of these risks and uncertainties materialize, or if any of our
underlying assumptions prove to be incorrect, our actual results of operations or financial condition could differ
materially from that described herein as anticipated, believed, estimated or expected. All subsequent written and
oral forward-looking statements attributable to us are expressly qualified in their entirety by reference to these
cautionary statements.
15
ENFORCEMENT OF CIVIL LIABILITIES
Our Company is a public limited company incorporated under the laws of India. The Board of Directors of our
Company comprising of thirteen (13) Directors and our Key Managerial Person are residents of India and all or
substantial portion of the assets of our Company and such persons are located in India. As a result, it may be
difficult or may not be possible for investors outside India to affect service of process upon our Company or
such persons in India or to enforce judgments obtained against such parties in court outside India.
Recognition and enforcement of foreign judgments is provided for under Section 13 and Section 44A of the
Code of Civil Procedure, 1908 (the "Civil Code") on a statutory basis. Section 13 of the Civil Code provides
that a foreign judgment shall be conclusive regarding any matter thereby directly adjudicated upon between the
same parties or parties litigating under the same title, except:
(a) where the judgment has not been pronounced by a court of competent jurisdiction;
(b) where the judgment has not been given on the merits of the case;
(c) where it appears on the face of the proceedings that the judgment is founded on an incorrect view of
international law or a refusal to recognize the law of India in cases to which such law is applicable;
(d) where the proceedings in which the judgment was obtained were opposed to natural justice;
(e) where the judgment has been obtained by fraud; or
(f) where the judgment sustains a claim founded on a breach of any law in force in India.
Under the Section 14 of the Civil Code, a court in India shall, upon the production of any document purporting
to be a certified copy of a foreign judgment, presume that the judgment was pronounced by a court of
competent jurisdiction, unless the contrary appears on record India is not a signatory to any international treaty in relation to the recognition or enforcement of foreign
judgments. Section 44A of the Civil Code provides that where a foreign judgment has been rendered by a
superior court, within the meaning of such Section, in any country or territory outside India which the
Government has by notification declared to be a reciprocating territory, it may be enforced in India by
proceedings in execution as if the judgment had been rendered by the relevant court in India. However, Section
44A of the Civil Code is applicable only to monetary decrees not being of the same nature as amounts payable
in respect of taxes or other charges of a like nature or of a fine or other penalties and is not applicable to
arbitration awards, even if such an award is enforceable as a decree of judgment.
A few countries like the United Kingdom of Great Britain and Northern Ireland, Republic of Singapore and
Hong Kong, amongst others, have been declared by the Central Government to be reciprocating territories for
the purposes of Section 44A and do not include arbitration awards.
A judgment of a court of a country which is not a reciprocating territory may be enforced only by a suit upon
the judgment and not by proceedings in execution. Such a suit has to be filed in India within three years from
the date of the judgment in the same manner as any other suit filed to enforce a civil liability in India. It is
unlikely that a court in India would award damages on the same basis as a foreign court if an action was brought
in India. Furthermore, it is unlikely that an Indian court would enforce foreign judgments if that court were of
the view that the amount of damages awarded was excessive or inconsistent with public policy. A party located
outside of India, who seeks to collect a money judgments payable in a foreign currency, must make an
application before the Indian court specifying the value of the foreign judgment in Indian rupees, since Indian
courts will only grant decrees in terms of Indian rupees. In such an event the party seeking to enforce a foreign
judgment in India is required to obtain approval from the RBI to execute such a judgment or to repatriate
outside India any amount recovered, and we cannot assure that such approval will be forthcoming within a
reasonable period of time, or at all, or that conditions of such approvals would be acceptable. It is uncertain as
to whether an Indian court would enforce foreign judgments that would contravene or violate Indian law. We
cannot assure you that Indian courts and/or authorities would not take a longer amount of time to adjudicate and
conclude similar proceedings in their respective jurisdictions.
16
CERTAIN DEFINITIONS AND ABBREVIATIONS
Definitions of certain capitalized terms used in this Placement Document are set forth below. The terms defined
in this section shall have the meaning set forth herein, unless specified otherwise in the context thereof, and
references to any statute or regulations or policies shall include amendments thereto, from time to time. The following list of certain capitalized terms used in this Placement Document is intended for the convenience
of the reader/prospective investor only and is not exhaustive Company Related Terms
Terms Description
TBVFL”, “our Company”,
“the Company”, “the
Issuer Company”, “the
Issuer”, “we”, “us” and
“our”
Unless the context otherwise requires, refers to Talwalkars Better Value Fitness
Limited, a public limited company incorporated under the Companies Act,
1956 having its registered office at 801-813, Mahalaxmi Chambers, 22,
Bhulabhai Desai Road, Mumbai – 400 026, Maharashtra, India and includes its
Subsidiaries.
Articles / Articles of
Association (AoA)
The articles of association of our Company, as amended from time to time.
Auditors M.K. Dandeker & Co., Chartered Accountants.
Board of Directors / Board The Board of Directors of our Company or a duly constituted committee
thereof.
Committee The Committee duly constituted by the Board of Directors.
Director(s) The Director(s) of our Company.
Equity Shares / Shares The equity shares of our Company of face value ` 10 each.
Gawande Group Mr. Vinayak Ratnakar Gawande, Ms. Madhuri Vinayak Gawande, Vinayak
Ratnakar Gawande (HUF), Mr. Anant Ratnakar Gawande, Ms. Yamini Anant
Gawande, Anant Ratnakar Gawande (HUF), Ratnakar Gawande (HUF), Mr.
Harsha Ramdas Bhatkal, Ms. Smeeta Harsha Bhatkal, Better Value Leasing and
Finance Limited, Gawande Consultants Private Limited.
Memorandum /
Memorandum of
Association
The memorandum of association of our Company, as amended from time to
time.
Our Group Companies Includes those companies, firms, ventures, promoted by our promoters,
irrespective of whether such entities are covered under section 370 (1)(B) of the
Companies Act, 1956.
Our Promoter(s)/ Promoter
Director(s) Unless the context otherwise requires, refers to Mr. Madhukar Vishnu
Talwalkar; Mr. Prashant Sudhakar Talwalkar; Mr. Vinayak Ratnakar Gawande;
Mr. Girish Madhukar Talwalkar; Mr. Harsha Ramdas Bhatkal and Mr. Anant
Ratnakar Gawande.
Our Subsidiaries Includes Aspire Fitness Private Limited, Denovo Enterprises Private Limited,
Jyotsna Fitness Private Limited, Talwalkars Club Private Limited and a step
down subsidiary, Equinox Wellness Private Limited.
Promoter Group Entities Promoter group of our Company as per the definition provided in Regulation
2(1)(zb) of the SEBI ICDR Regulations.
QIP Committee The QIP committee of the Board of Directors as described in the section titled
“Board of Directors and Senior Management” beginning on page 101.
Registered Office The registered office of TBVFL is located at 801-813, Mahalaxmi Chambers,
22, Bhulabhai Desai Road, Mumbai – 400 026, Maharashtra, India.
Talwalkars Group Mr. Madhukar Vishnu Talwalkar, Ms. Usha Madhukar Talwalkar, Madhukar
Vishnu Talwalkar (HUF), Mr. Girish Madhukar Talwalkar, Ms. Nanda Girish
Talwalkar, Girish Madhukar Talwalkar (HUF), Mr. Prashant Sudhakar
Talwalkar, Ms. Nalina Ann Talwalkar, Prashant Sudhakar Talwalkar (HUF).
Trademark Licensed
Gyms
6 Fitness Centres that are managed by our Promoter Group Entities i.e. M/s
Talwalkars (one Fitness Center), M/s Talwalkars Health Complex (one Fitness
Centre), M/s Talwalkars Health and Leisure (two Fitness Centres), M/s
Talwalkars Health Club (one Fitness Centre), and M/s. Talwalkars Nutrition
Centre (one Fitness Centre).
17
Terms Description
“you”, “your” or “yours” Prospective investors in this Issue
Issue related Terms
Term Description
Allocated or Allocation The allocation of Equity Shares following the determination of the Issue Price
to QIBs on the basis of Application Forms submitted by such QIBs, in
consultation with the BRLMs and in compliance with Chapter VIII of the SEBI
ICDR Regulations
Allottee(s) Successful Bidders to whom Equity Shares are issued and Allotted pursuant to
the Issue.
Allotment or Allotted The Issue and allotment of Equity Shares pursuant to this Issue.
Application Form or Bid Indication of interest from a QIB, including all revisions and modifications of
interest as provided by them, to subscribe for a specified number of Equity
Shares in this Issue on the terms set out in the Application Form to our
Company.
Application Form or Bid
cum Application Form
The form, including all revisions and modifications thereto, pursuant to which a
QIB submits an Application.
Bidder
Any prospective investor, being a QIB, who makes a Bid pursuant to the terms
of the Preliminary Placement Document and the Application Form.
Bidding / Issue Period The period between the Bid/Issue Opening Date and Bid/Issue Closing Date,
inclusive of both dates, during which prospective Bidders can submit Bids.
Book Running Lead
Manager/BRLMs
IIFL Holdings Limited and Centrum Capital Limited
BSE BSE Limited.
CDSL Central Depository Services (India) Limited.
CAN or Confirmation of
Allocation Note
Note or advice or intimation to successful Bidders confirming Allocation of
Equity Shares to such successful Bidders after determination of the Issue Price
and requesting payment for the entire applicable Issue Price for all Equity
Shares Allocated to such successful Bidders.
Closing Date On or about June 24, 2015, the date on which the Allotment is expected to be
made.
Cut-off Price The Issue Price of the Equity Shares, which shall be determined by our
Company, in consultation with the BRLMs.
Eligible FPIs FPIs that are eligible to participate in the Issue and does not include qualified
foreign investors and Category III Foreign Portfolio Investors (who are not
eligible to participate in the Issue).
Escrow Agreement The Escrow Agreement dated June 17, 2015 by and between our Company,
Escrow Bank and the BRLMs in relation to the Issue.
Escrow Bank Deutsche Bank AG
Escrow Cash Account/
Escrow Account
The non-interest bearing, no-lien, escrow bank account without any cheque or
overdraft facilities opened by our Company with the Escrow Bank under the
arrangement between our Company and the Escrow Bank for receiving the
share application amount from the successful Bidders.
Floor Price The floor price of ` 319.26 per Equity Share, calculated in accordance with
Regulation 85 of the SEBI ICDR Regulations. Our Company offered a discount
of 4.47% on the Floor Price i.e. `14.26 per share in terms of Regulation 85 of
the SEBI Regulations.
Issue The offer, issue and allotment of 3,523,968 Equity Shares of face value of `10
each at a price of ` 305.00 to QIBs, pursuant to Chapter VIII of the SEBI ICDR
Regulations and the provisions of Companies Act, 2013 and Private Placement
Provisions who are outside of the United States acquiring Equity Shares in an
offshore transaction in reliance on Regulation S.
Issue Closing Date or Bid
Closing Date
June 19, 2015, the date on which our Company (or the BRLMs on behalf of our
Company) shall cease acceptance of Application Forms.
Issue Opening Date or Bid
Opening Date
June 17, 2015, the date on which our Company (or the BRLMs on behalf of our
Company) shall commence acceptance of Application Forms.
Issue Price The price per Equity Share of ` 305.00.
18
Term Description
Issue Size The issue of 3,523,968 Equity Shares aggregating ` 1,074.81 million.
Listing Agreement The agreement entered into between our Company and the Stock Exchanges in
relation to listing of the Equity Shares on the Stock Exchanges.
NSDL The National Securities Depository Limited.
NSE The National Stock Exchange of India Limited.
Pay-in Date The last date specified in the CAN for payment of application monies by the
QIBs.
Placement Agreement The Placement Agreement dated June 17, 2015 entered between our Company
and the BRLMs.
Placement Document The placement document dated June 19, 2015 being issued by our Company in
accordance with Chapter VIII of the SEBI ICDR Regulations and Section 42 of
the Companies Act, 2013 and the rules there under, as amended.
Preliminary Placement
Document
The preliminary placement document June 17, 2015 issued in accordance with
Chapter VIII of the SEBI ICDR Regulations and Section 42 of the Companies
Act, 2013 and the rules there under, as amended.
QIB or Qualified
Institutional Buyer
Any Qualified Institutional Buyer as defined under Regulation 2(1) (zd) of the
SEBI ICDR Regulations and the rules there under, as amended and not
excluded pursuant to Regulation 86 of the SEBI ICDR Regulation.
QIP Private placement to QIBs under Chapter VIII of the SEBI ICDR Regulations
and Section 42 of the Companies Act, 2013 and the rules made there under, as
amended.
Regulation S Regulation S, as defined under the U.S. Securities Act.
Relevant Date June 17, 2015 date of the meeting of the QIP Committee duly authorised by the
Board of Directors deciding to open the Issue.
SCRA Securities Contracts (Regulation) Act, 1956 as amended from time to time.
SCRR Securities Contracts (Regulation) Rules, 1957 as amended from time to time.
SCR(SECC) Regulations Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations)
Regulations, 2012 as amended from time to time.
SEBI The Securities and Exchange Board of India.
SEBI Act The Securities and Exchange Board of India Act, 1992 as amended from time
to time.
SEBI FPI Regulations Securities and Exchange Board of India (Foreign Portfolio Investors)
Regulations, 2014 as amended from time to time.
SEBI ICDR Regulations The Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009, as amended from time to time.
SEBI Prohibition of
Insider Trading
Regulations
SEBI (Prohibition of Insider Trading) Regulations, 2015 as amended from time
to time.
SENSEX Index of 30 stocks traded on BSE representing a sample of large and liquid
listed companies.
Stock Exchanges BSE and NSE.
STT Securities Transaction Tax.
U.S. Securities Act The United States Securities Act of 1933 as amended from time to time.
Business and Industry Related Terms
Terms Description
BMR Basal Metabolic Rate
EMS Electro Muscle Stimulation
Fitness Center Means and includes all Gymnasium(s) / Gym(s) in different formats and
exercise studios.
Gymnasium(s)/Gym(s) A premise with facilities for exercise and sports. A facility that contains a
health and fitness room with resistance training and / or cardiovascular
equipment. The facility must be open to the general public on either a pay-and-
play or membership basis.
HiFi Healthy India Fit India.
PEP Personal Exercise Programme.
19
Terms Description
Sq.Ft/sq.ft Square Feet.
Sq.Mtr(s)/sq.mtr(s) Square Meter(s).
Talwalkars Refers to logo and trademark/trade name registered in the name of our
Company.
Y-O-Y Year Over Year
Conventional and General Terms
Terms Description
AGM Annual General Meeting.
AIF(s) Alternate Investment Funds (as defined under the Securities and Exchange
Board of India (Alternative Investment Fund) Regulations, 2012) registered
with the SEBI under applicable laws in India.
AS Accounting Standards as issued by the Institute of Chartered Accountants of
India.
CAGR Compounded Annual Growth Rate.
Chapter VIII Refers to Chapter VIII of the SEBI ICDR Regulations, 2009 that deals with
Qualified Institutions Placement and as amended from time to time.
CIN Corporate Identification Number.
Civil Code or Code The Code of Civil Procedure, 1908 of India, as amended from time to time.
Companies Act The Companies Act, 1956 or the Companies Act, 2013, as applicable.
Companies Act, 1956 The Companies Act, 1956 and the rules made there under (without reference to
the provisions thereof that have ceased to have effect upon notification of the
Notified Sections).
Companies Act, 2013 The Companies Act, 2013 and the rules made thereunder, to the extent in force
pursuant to notification of the Notified Sections.
CSR Corporate Social Responsibility.
CWIP Capital Work in Progress
Depositories Act The Depositories Act, 1996 as amended from time to time.
Depository A depository registered with SEBI under the SEBI (Depositories and
Participant) Regulations, 1996 as amended from time to time
DP/ Depository
Participant
A depository participant as defined under the Depositories Act.
DIN Director Identification Number.
EBITDA Earnings before interest, tax, depreciation and amortization.
EGM Extraordinary General Meeting.
FDI
Foreign Direct Investment in an Indian company, in accordance with applicable
law.
FEMA
The Foreign Exchange Management Act, 1999 as amended from time to time
and the Regulations framed thereunder.
FEMA Regulations The Foreign Exchange Management (Transfer or Issue of Security by a Person
Resident Outside India) Regulations, 2000 as amended from time to time.
FII
Foreign Institutional Investor as defined under Section 2(f) of the Securities and
Exchange Board of India (Foreign Institutional Investors) Regulations, 1995, as
amended from time to time, registered with SEBI under applicable laws in
India.
FII Regulations
Securities and Exchange Board of India (Foreign Institutional Investors)
Regulations, 1995 as amended from time to time.
Financial Year or Fiscal
Year or Fiscal or FY
A period of twelve months ending March 31 of that particular year, unless
otherwise stated.
Form PAS-4 Form PAS-4 as prescribed under the Companies (Prospectus and Allotment of
Securities) Rules, 2014
FPI Foreign Portfolio Investors, as defined under Regulation 2(1)(h) of the
Securities And Exchange Board of India (Foreign Portfolio Investors)
Regulations, 2014.
FPI Regulations Securities and Exchange Board of India (Foreign Portfolio Investors)
Regulations, 2014.
20
Terms Description
FVCI Any foreign venture capital investor (as defined under the Securities and
Exchange Board of India (Foreign Venture Capital Investors) Regulations,
2000, as amended) registered with the SEBI under applicable laws in India.
GAAP Generally Accepted Accounting Principles
GDP Gross Domestic Product
GoI or Government Government of India, unless otherwise specified
ICAI The Institute of Chartered Accountants of India
IFRS International Financial Reporting Standards
Income Tax Act or IT Act The Income Tax Act, 1961 of India as amended from time to time
India The Republic of India
Indian GAAP Generally accepted accounting principles followed in India
KMP Key Managerial Personnel
Lakh/ Lac/Lacs One hundred thousand
MCA Ministry of Corporate Affairs
Mn/Million Million
Minimum Wages Act Minimum Wages Act, 1948 as amended from time to time
Mutual Fund
A mutual fund registered with SEBI under the Securities and Exchange Board
of India (Mutual Funds) Regulations, 1996 as amended from time to time
Non-Resident Indian(s) or
NRI
Non-Resident Indian as defined under FEMA.
Notified Sections Sections of the Companies Act, 2013 that have been notified by the
Government of India
p.a./ per annum Per Annum
PAN Permanent Account Number
PAT Profit after tax
PBT Profit before tax
Portfolio Investment
Scheme/PIS
The portfolio investment scheme of RBI specified in Schedule 2 of the Foreign
Exchange Management (Transfer or Issue of Security by a Person Resident
Outside India) Regulations, 2000 as amended from time to time
Private Placement
Provisions
Section 42 of the Companies Act, 2013, read with Rule 14 of the Companies
(Prospectus and Allotment of Securities) Rules, 2014
` or Re. or Rs. or Rupees
or INR
Indian Rupee
RBI The Reserve Bank of India
RoC The Registrar of Companies, Mumbai.
State Any state in the Republic of India
State Government Government of a State
Takeover Code The Securities and Exchange Board of India (Substantial Acquisition of Shares
and Takeovers) Regulations, 2011 as amended from time to time
UK United Kingdom of Great Britain and Northern Ireland
USA or U.S. United States of America
$ or U.S. dollar or USD or
US$ The currency of the United States
VAT Value Added Tax
VCF A venture capital fund as defined under the erstwhile Securities and Exchange
Board of India (Venture Capital Funds) Regulations, 1996
21
DISCLOSURE REQUIREMENTS UNDER FORM PAS-4 PRESCRIBED UNDER THE COMPANIES
ACT, 2013
The table below sets out the disclosure requirements as provided in Form PAS-4 and the relevant pages in this
Placement Document where these disclosures, to the extent applicable, have been provided.
Sr.
No.
Disclosure Requirements Relevant Page
of this
Placement
Document
1. GENERAL INFORMATION
a. Name, address, website and other contact details of our Company indicating both
Registered Office and corporate office
Cover Page and
171
b. Date of incorporation of our Company 167
c. Business carried on by our Company and its subsidiaries with the details of
branches or units, if any.
78 – 95
d. Brief particulars of the management of our Company. 101 - 114
e. Names, addresses, DIN and occupations of the Directors. 101 – 104
f. Management’s perception of risk factors 35 – 51
g. Details of default, if any, including therein the amount involved, duration of
default and present status, in repayment of:
NIL
(i) Statutory dues;
(ii) Debentures and interest thereon; NIL
(iii) Deposits and interest thereon; and NIL
(iv) Loan from any bank or financial institution and interest thereon. NIL
h. Names, designation, address and phone number, email ID of the nodal/
compliance officer of our Company, if any, for the private placement offer
process.
167
2. PARTICULARS OF THE OFFER
a. Date of passing of board resolution. 167
b. Date of passing of resolution in the general meeting, authorising the offer of
securities.
167
c. Kinds of securities offered (i.e. whether share or debenture) and class of security. Cover page and
24 – 26
d. Price at which the security is being offered including the premium, if any, along
with justification of the price.
Cover page and
24 – 26
e. Name and address of the valuer who performed valuation of the security offered. Not Applicable
f. Amount which our Company intends to raise by way of securities. Cover Page and
52
g. Terms of raising of securities:
(i) Duration, if applicable; Not Applicable
(ii) Rate of dividend; Not Applicable
(iii) Rate of interest; Not Applicable
(iv) Mode of payment; and Not Applicable
(v) Repayment. Not Applicable
h. Proposed time schedule for which the offer letter is valid. 17
i. Purposes and objects of the offer. 52
j. Contribution being made by the promoters or directors either as part of the offer
or separately in furtherance of such objects.
52
k. Principle terms of assets charged as security, if applicable. Not Applicable
3. DISCLOSURES WITH REGARD TO INTEREST OF DIRECTORS,
LITIGATION ETC
a. Any financial or other material interest of the directors, promoters or key
managerial personnel in the offer and the effect of such interest in so far as it is
different from the interests of other persons.
109 and 113
b. Details of any litigation or legal action pending or taken by any Ministry or
Department of the Government or a statutory authority against any promoter of
the offeree company during the last three years immediately preceding the year
of the circulation of the offer letter and any direction issued by such Ministry or
159 – 165
22
Sr.
No.
Disclosure Requirements Relevant Page
of this
Placement
Document
Department or statutory authority upon conclusion of such litigation or legal
action shall be disclosed.
c. Remuneration of Directors (during the current year and last three financial
years).
107
d. Related party transactions entered during the last three financial years
immediately preceding the year of circulation of offer letter including with regard
to loans made or, guarantees given or securities provided.
69
e. Summary of reservations or qualifications or adverse remarks of auditors in the
last five financial years immediately preceding the year of circulation of offer
letter and of their impact on the financial statements and financial position of our
Company and the corrective steps taken and proposed to be taken by our
Company for each of the said reservations or qualifications or adverse remark.
72
f. Details of any inquiry, inspections or investigations initiated or conducted under
the Companies Act or any previous company law in the last three years
immediately preceding the year of circulation of offer letter in the case of
company and all of its subsidiaries. Also if there were any prosecutions filed
(whether pending or not) fines imposed, compounding of offences in the last
three years immediately preceding the year of the offer letter and if so, section-
wise details thereof for our Company and all of its subsidiaries.
165
g. Details of acts of material frauds committed against our Company in the last
three years, if any, and if so, the action taken by our Company.
165
4. FINANCIAL POSITION OF THE COMPANY
a. The capital structure of our Company in the following manner in a tabular form:
(i)(a) The authorised, issued, subscribed and paid up capital (number of securities,
description and aggregate nominal value);
54
(b) Size of the present offer; and 54
(c) Paid up capital: 54
(A) After the offer; and 54
(B) After conversion of convertible instruments (if applicable); N.A.
(d) Share premium account (before and after the offer). 54
(ii) The details of the existing share capital of the issuer company in a tabular form,
indicating therein with regard to each allotment, the date of allotment, the
number of shares allotted, the face value of the shares allotted, the price and the
form of consideration.
54 – 56
Provided that the issuer company shall also disclose the number and price at
which each of the allotments were made in the last one year preceding the date of
the offer letter separately indicating the allotments made for considerations other
than cash and the details of the consideration in each case.
Not Applicable
b. Profits of our Company, before and after making provision for tax, for the three
financial years immediately preceding the date of circulation of offer letter.
32
c. Dividends declared by our Company in respect of the said three financial years;
interest coverage ratio for last three years (Cash profit after tax plus interest
paid/interest paid).
59
d. A summary of the financial position of our Company as in the three audited
balance sheets immediately preceding the date of circulation of offer letter.
31
e. Audited Cash Flow Statement for the three years immediately preceding the date
of circulation of offer letter.
33
f. Any change in accounting policies during the last three years and their effect on
the profits and the reserves of our Company.
73
5. A DECLARATION BY THE DIRECTORS THAT
a. Our Company has complied with the provisions of the Act and the rules made
thereunder.
169
b. The compliance with the Act and the rules does not imply that payment of
dividend or interest or repayment of debentures, if applicable, is guaranteed by
the Central Government.
23
Sr.
No.
Disclosure Requirements Relevant Page
of this
Placement
Document
c. The monies received under the offer shall be used only for the purposes and
objects indicated in the Offer letter.
24
SUMMARY OF THE ISSUE
The following is a general summary of the terms of the Issue. This summary should be read in conjunction with,
and is qualified in its entirety by, more detailed terms appearing elsewhere in this Placement Document,
including under section titled “Risk Factors”, “Use of Proceeds”, “Placement”, “Issue Procedure” and
“Description of the Equity Shares” beginning on pages 35, 52, 130,120 and 144.
Issuer Talwalkars Better Value Fitness Limited
Face Value ` 10 per Equity Share
Issue Price per Equity Share ` 305.00 per Equity Share
Issue Size 3,523,968 Equity Shares aggregating ` 1,074.81 million.
A minimum of 10 % of the Issue Size i.e. at least 352,397 Equity
Shares shall be available for Allocation to Mutual Funds only, and
the balance 3,171,571 Equity Shares shall be available for Allocation
to all QIBs, including Mutual Funds. In case of under-subscription in
the portion available for Allocation to Mutual Funds, such portion or
part thereof may be Allocated to other eligible QIBs.
Date of Board Resolution
authorizing this Issue
April 08, 2015
Date of Shareholders’
Resolution authorizing this Issue
May 12, 2015
Floor Price ` 319.26 per Equity Share, calculated in accordance with Regulation
85 of the SEBI ICDR Regulations. Under the SEBI ICDR
Regulations, the Issue Price cannot be lower than the Floor Price
subject to discount of not more than 5% on the Floor Price which
may be considered by our Company.
Equity Shares issued and
outstanding immediately prior
to this Issue
26,180,888 Equity Shares at a face value of `10 per share.
Equity Shares issued and
outstanding immediately after
this Issue
29,704,856 Equity Shares at a face value of `10 per share.
Eligible Investors QIBs as defined in regulation 2(1)(zd) of the SEBI ICDR
Regulations to whom this Placement Document and the Application
Form is delivered by BRLMs in consultation with our Company, at
their sole discretion and who are eligible to bid and participate in this
Issue and QIBs not excluded pursuant to Regulation 86(1)(b) of the
SEBI ICDR Regulations.
For further details, see the sections “Issue Procedure” and “Transfer
Restrictions” beginning on pages 120 and 139 respectively.
Minimum Offer Size The minimum value of offer or invitation to subscribe to each QIB is
` 20,000 of the face value of the Equity Shares.
Listing Our Company has obtained in-principle approvals in terms of Clause
24(a) of the Listing Agreements, for listing of Equity Shares issued
pursuant to the Issue from BSE and NSE on June 17, 2015 and June
17, 2015 respectively.
The applications for final listing and trading approval, for listing and
25
admission of the Equity Shares and for trading on the Stock
Exchanges, will be made only after Allotment
Issue Procedure This Issue is being made only to QIBs in reliance on Section 42 of
the Companies Act, 2013, read with Rule 14 of the Companies
(Prospectus and Allotment of Securities) Rules, 2014 and Chapter
VIII of the SEBI ICDR Regulations. For further details, see the
section titled “Issue Procedure” beginning on page 120.
Transferability Restrictions The Equity Shares being allotted pursuant to this Issue shall not be
sold for a period of one year from the date of Allotment, except if
sold on the floor of the Stock Exchanges. For further details, see the
section “Transfer Restrictions” beginning on page 139.
Ranking The Equity Shares being issued in this Issue are subject to the
provisions of our Memorandum and Articles of Association and shall
rank pari passu in all respects with the existing Equity Shares,
including with respect to dividend rights. Shareholders will be
entitled to dividends and other corporate benefits, if any, declared by
us after the Closing Date, in compliance with the Companies Act,
2013, the Listing Agreements and other applicable laws and
regulations. Shareholders may attend and vote in shareholders’
meetings in accordance with the provisions of the Companies Act,
2013. Please see the section titled “Description of the Equity
Shares” beginning on page 144.
Use of Proceeds The gross proceeds of this Issue are expected to be approximately
` 1,074.81 million. The net proceeds from this Issue, after deducting
fees, commissions and expenses of this Issue, will be approximately
` 1007.30 million. For further details, please see the section titled
“Use of Proceeds” beginning on page 52.
Lock-up Our Company has agreed that it will not, without the prior written
consent of the BRLMs (which such consent shall not be
unreasonably withheld), for the period commencing from the date of
the Placement Agreement and ending 90 days from the Closing Date,
directly or indirectly: (a) issue, offer, lend, sell, pledge, contract to
sell or issue, sell any option or contract to purchase, purchase any
option or contract to sell or issue, grant any option, right or warrant
to purchase, lend or otherwise transfer or dispose of, directly or
indirectly, any Equity Shares, or any securities convertible into or
exercisable or exchangeable for Equity Shares or publicly announce
an intention with respect to any of the foregoing; (b) enter into any
swap or other agreement that transfers, directly or indirectly, in
whole or in part, any of the economic consequences of ownership of
Equity Shares or any securities convertible into or exercisable or
exchangeable for Equity Shares; or (c) publicly announce any
intention to enter into any transaction whether any such transaction
described in (a) or (b) above is to be settled by delivery of Equity
Shares, or such other securities, in cash or otherwise.
Our Promoters have agreed that without the prior written consent of
the BRLMs (which such consent shall not be unreasonably withheld),
it will not, during the period commencing from the date of the
Placement Agreement and ending 90 days after the date of allotment
of this Issue Shares, directly or indirectly: (a) sell, lend, pledge,
contract to sell, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend or otherwise transfer or
dispose of, directly or indirectly, any Equity Shares, or any securities
convertible into or exercisable or exchangeable for Equity Shares or
publicly announce an intention with respect to any of the foregoing;
(b) enter into any swap or other agreement that transfers, directly or
26
indirectly, in whole or in part, any of the economic consequences of
ownership of Equity Shares or any securities convertible into or
exercisable or exchangeable for Equity Shares; or (c) deposit Equity
Shares with any other depositary in connection with a depositary
receipt facility, or (d) enter into any transaction (including a
transaction involving derivatives) having an economic effect similar
to that of an issue, offer, sale or deposit of the Equity Shares in any
depository receipt facility; or (e) publicly announce any intention to
enter into any transaction whether any such transaction described in
(a) to (d) above is to be settled by delivery of Equity Shares, or such
other securities, in cash or otherwise; provided however that the
foregoing restrictions will (i) not be applicable to any pledge or
mortgage of the Equity Shares already existing on the date of the
Placement Agreement or transfer of such existing pledge or
mortgage; and (ii) not restrict the existing shareholders of our
Company from acquiring or purchasing any Equity Shares in our
Company, directly or indirectly, in accordance with and subject to
applicable laws.
Closing Date The Allotment is expected to be made on or about June 24, 2015.
Pay-In Date
The last date specified in the CAN for payment of application monies by the
QIBs in relation to the Issue.
Risk Factors For a discussion of certain risks in connection with an investment in
the Equity Shares, please see the section titled “Risk Factors”
beginning on page 35.
Security Codes: ISIN: INE502K01016
BSE Code: 533200
NSE Symbol: TALWALKARS
27
SUMMARY OF BUSINESS
The following information is qualified in its entirety by, and should be read together with, the more detailed
financial and other information included in this Placement Document, including the information contained in
the section titled “Risk Factors”, beginning on page 35 of this Placement Document.. Unless the context
otherwise requires, references to “we”, “us”, or “our” refers to our Company and its Subsidiaries taken as a
whole. Overview
We are one of the largest fitness chains in India offering a diverse suite of services in fitness including Gym,
spas, aerobics and health counseling under the brand “Talwalkars”. “Talwalkars” has pioneered the concept of
Gyms in India. Today, it is a recognized name in the health and fitness industry with a strong brand and pan
India presence, providing health and fitness solutions to all categories of customers across all age groups.
Our first Gym was setup in the year 1932 by late Mr. Vishnu Talwalkar in Mumbai. Mr. Madhukar Vishnu
Talwalkar, eldest son of late Mr. Vishnu Talwalkar, carried on with the legacy and started his first Gym in
Bandra, Mumbai by the name “Talwalkars Gymnasium”. Mr. Madhukar Vishnu Talwalkar has been
instrumental in creating the brand “Talwalkars” over the past several decades. Our Company, Talwalkars Better
Value Fitness Limited, was co-promoted in the year 2003 by the Talwalkars Group and the Gawande Group
with the object of developing “Talwalkars” brand as a leader in Fitness Centers. Through the industry expertise
of Mr. Madhukar Vishnu Talwalkar and guidance of our co-promoters namely, Mr. Girish Madhukar Talwalkar,
Mr. Prashant Sudhakar Talwalkar, Mr. Vinayak Ratnakar Gawande, Mr. Anant Ratnakar Gawande and Mr.
Harsha Ramdas Bhatkal, we have enhanced our brand equity and pan-India presence.
As on May 31, 2015, there are 152 Fitness Centers operating in 80 cities across 21 states serving over 155,000
members in India. Out of these 152 Fitness Centers, 96 are managed by our Company, 14 are operated through
our Subsidiaries, 28 are operated through our franchisees which includes 9 full service Fitness Centers and 19
HiFi Gyms, 8 are NuForm exercise studios and 6 Trademark Licensed Gyms in Mumbai which are managed by
our Promoter Group Entities.
We have demonstrated a consistent growth in our business and profitability. Our Income from Operations (net of
service tax) has grown at a CAGR of 22.31%, from `1,508.52 million for the year ended March 31, 2013 to
`1,872.73 million for the year ended March 31, 2014 to `2,256.55 million for the year ended March 31, 2015.
Our EBITDA has grown at a CAGR of 30.99%, i.e. from `725.71 million for the year ended March 31, 2013 to
` 927.11 million for the year ended March 31, 2014 to `1,245.27 million for the year ended March 31, 2015.
Our PAT (after extraordinary income / (loss) and Minority Interest) has grown at a CAGR of 23.82%, i.e. from
`300.50 million for the year ended March 31, 2013 to `365.89 million for the year ended March 31, 2014 to
`460.75 million for the year ended March 31, 2015.
Our EBITDA margins have improved from 48.11% for the year ended March 31, 2013 to 49.51% for the year
ended March 31, 2014 to 55.18% for the year ended March 31, 2015. Our PAT margins have improved from
19.92% for the year ended March 31, 2013 to 19.54% for the year ended March 31, 2014 to 20.42% for the year
ended March 31, 2015
Our Competitive Strengths:
We believe that the following are our principal competitive strengths which have contributed to our current
position in the industry:
Strong Brand
Brand “Talwalkars” relates to the concept of Gym in India. Late Mr. Vishnu Talwalkar, father of one of our
promoters, Mr. Madhukar Vishnu Talwalkar, had set up his first Gym way back in 1932. Our Company owns
this brand as its registered trade name since the year 2005. We believe the long existence of our brand and the
strength of our brand equity enables us to stay ahead of competition in the industry. Today, we are one of the
largest fitness chains in India. Our brand “Talwalkars” is known for consistent, standardized and quality
offerings and has a good brand recall which helps in breaking the competitive clutter within the industry.
Market Leadership
28
We are one of the largest fitness chains in India. We have grown rapidly since our inception and as on May 31,
2015 we have 152 Fitness Centers in 80 cities across the country serving over 155,000 members. Our Company
has its roots in the vision of our Promoters. Mr. Madhukar Vishnu Talwalkar has been associated with this
industry for nearly five decades. While he stepped down from the position of Executive Chairman, he continues
to act as a mentor to the Company and its management. Through the industry expertise of our Promoters, we
have enhanced our brand equity and pan-India presence. Being a pioneer in the health and fitness industry, we
enjoy a significant lead over our competitors. We believe that the above factors demonstrate our leading position
which we can capitalize on to attract potential members and grow our revenues.
Pan India Presence
In a fragmented health and fitness industry, where the demand for quality services is high while the supply is
largely unorganized (primarily from single city operators) and non-standardized, we benefit immensely due to
our pan India presence. Our Company has been able to achieve a country wide footprint, which we believe may
be very difficult to replicate. We are currently present in 80 cities across 21 states of the country and we believe
our continuous expansion plans through our Talwalkars brand, HiFi Gyms and other value added services will
further enhance our brand visibility across pan India.
Diverse Service Offerings
Over the last 12 years of our existence we have dominated and led the Gymnasium business in India. In the
process we have widened the fitness concepts into areas beyond gyms and we have been constantly innovating
and expanding our offerings. We also provide spa facilities in 13 of our Fitness Centers, aerobics and spinning
facility in 30 of our Fitness Centers we also provide personalised fitness training programs and personal sessions
with our dieticians for weight management program. In our pursuit to become a holistic fitness player we are
broadening our scope of fitness solutions to our customers, be it in the form of NuForm exercise studios,
Reduce, a customised meal plan and the recently introduced Transform. This has distinguished us as a leading
player in the industry with a strong brand and pan India presence, providing health and fitness solutions to all
categories of customers across all age groups. In the current Fiscal, we are also looking to expand our service
offerings and presence through leisure and sports clubs in high-end residential developments, gated community
townships and corporate campuses. In view of this expansion our Company has acquired land, through
Talwalkars Club Private Limited, our Subsidiary, in Wakad, Pune for setting up a health club
Standardized and Quality Offering
In an unorganized and fragmented service industry with a large untapped demand, we provide quality service
consistently across all our locations. One of the key investments in a gym is the fitness equipment. We maintain
high quality standards by procuring our equipment from reputed international manufacturers. Several other
requirements such as flooring, air conditioners, generator back up, wet area designs, etc. are benchmarked to a
model gym and quality guidelines followed and these equipments are purchased from various reputed
companies.
We have a training academy at Thane where we offer a 4-6 weeks induction training for our gym trainers. This
ensures that all our gym trainers are trained to offer the same kind of services across all our locations. We
believe that this consistency factor in providing quality service across all our gyms gives us a substantial edge in
this competitive and unorganized market.
Proven Track Record
Over the last 12 years of our existence we have consistently grown the number of gyms we operate to reach 152
Fitness Centers as on May 31, 2015. Over the last 5 years, our total number of Fitness Centers has increased
from 63 to 152. By achieving this level of growth we have proved our expertise to enhance our presence and our
ability to continue growing further from here, broadening our member base and revenues.
Promoters’ experience and expertise
Our Company credits its growth to the extensive experience and expertise of our Promoters who have been the
back bone of our Company. Mr. Madhukar Vishnu Talwalkar has over 50 years of experience and the
Talwalkars Group has several decades of experience in the fitness industry. Mr. Madhukar Vishnu Talwalkar is
the Vice President of the Indian Body Builders Federation and is also the President of Maharashtra Body
Building Association. Similarly, Mr. Girish Madhukar Talwalkar and Mr. Prashant Sudhakar Talwalkar both
29
have also been associated with this industry for more than two decades. Mr. Vinayak Ratnakar Gawande, Mr.
Anant Ratnakar Gawande and Mr. Harsha Ramdas Bhatkal have varied experience in several areas of business
including finance, marketing and legal. Our Company draws on this healthy blend of expertise to manage the
challenges of growth effectively.
Our Business Strategies:
Our Company is pursuing the following growth strategies in order to expand our presence pan India:
Geographic Spread and Penetration
We continuously explore attractive business opportunities in potential locations in pursuit of enhancing our
geographic spread. We intend to increase our presence pan India by not only setting up new gyms in cities
where we already have our presence but also in other untapped cities across the country. We believe there is a
potential for growth in Tier 2 and3 cities. We have expanded our presence in several Tier 1 and Tier 2 cities in
the last few years and we will continue to explore newer markets to tap opportunities strategically beneficial for
us. We have recently opened two premium Fitness Centers, 1 each in Banjara Hills, Hyderabad and South
Mumbai. We have also launched relatively smaller and affordable HiFi Gyms with the intention to tap
opportunities in Tier 3 cities as well also rolled out gyms in Metro and Tier 1/Tier 2 cities to enhance our
existing presence. Affordability factor of a HiFi gym membership would benefit us from this market
opportunity. Our strategy lies in achieving a distinct size and scale, covering our presence pan India.
Location Entry Strategy
We are following multiple market entry strategies to enhance our presence in the country, i.e. either directly, or
through our Subsidiaries, or through franchisee route. There are 96 Fitness Centers which are owned and
managed by our Company, 14 which operate through our Subsidiaries, 9 which operate as our franchisee Fitness
Centers and 6 Trademark Licensed Gyms operating under the Talwalkars brand, Further, we have 19 HiFi Gyms
and 8 NuForm exercise studios. We have also entered into a letter of intent for a master franchise arrangement
for opening 30 HiFi gyms on pan India basis under which currently we have 1 operating HiFI Gym. Further, we
have also entered into letters of intent to open 6 new HiFi Gyms.
Our preferred strategy is to enter a new market on our own, however, we are also constantly on the lookout for
partnering with strong local players in cities where we do not have presence presently. For instance, for our HiFi
gyms, we are expanding through the franchisee route in various cities. Hub & Spoke model will continue to
remain a strategy to enter newer locations and deepen our presence across India. We believe in having a nimble
attitude in our gym rollout strategy to ensure profitability from both, our owned as well as franchised gyms.
Continuous Broadening of Service Offerings and Increasing share of Value Added Services
We believe in keeping pace with current trends and overall customer satisfaction which allows us to attract more
members and to increase revenue potential and retain existing members. It is one of our core growth strategies to
continue to innovate and explore opportunities to broaden our service offerings within the ambit of fitness
industry. We provide value added services to our customers such as spa facilities, aerobics, spinning and health
and diet counseling. Our pursuit is to become a holistic fitness player and constantly strive to offer innovative
fitness solutions. We provide various services including personalized fitness training, diet counseling for weight
management, spa, aerobics and spinning in our gyms. Over the years we have been widening our offerings in
fitness solutions. We launched exercise studios under the brand NuForm, an alternate fitness solution using EMS
based technology. We also introduced an alternative for weight loss through a dance fitness program. Reduce is
a weight loss solution through a customized meal plan which is available to both our gym members and non-
members.
Further, in order to reach out to maximum customers and to make our services more affordable, we have
recently introduced an Equated Monthly Installment (EMI) system which allows our customers to avail our
service at a relative ease with 3, 6, 9 and 12 monthly installments. We are planning to introduce a loyalty
program for our customers where we will offer attractive offers and discounts.
Inorganic initiatives
As our growth strategy, we continue growing through roll out of our Fitness Centers and broadening our service
offerings. There are several regions in India where our Company does not have adequate number of Gyms. In
30
such regions, we propose to not only set up new Gyms but also acquire the existing running Gyms and gym
chains to achieve significant market presence quickly. We believe that we have achieved significant scale and
size to achieve growth through inorganic initiatives. We may explore opportunistically certain inorganic
initiatives that can give us either access to newer markets, strengthen our presence in existing markets or help us
achieve a larger scale in a relatively shorter time. We believe we may come across potential inorganic
opportunities and we can selectively evaluate such acquisition opportunities.
Setting up Talwalkar Clubs
Our Company has made progress with its plan to set up a leisure club by acquiring land for opening our first
club in Pune and commencing work on the project. Our Company sees the leisure club business as a great
opportunity in many of the markets in India due to a large gap between demand and supply and therefore, has
plans to set up several such clubs in different cities over the next few years. Our Company expects this to be of
the highest international standards and intends to tie up or work with leading international companies to ensure
the same. In this pursuit, our Company intends to enter create a 50:50 joint venture with David Lloyd Leisure
Limited for establishing and managing leisure clubs in India.
31
SELECTED FINANCIAL INFORMATION
The summary of selected financial information set forth below is derived from the audited consolidated financial
statements of our Company for Fiscals 2013, 2014 and 2015. The selected financial data have been derived
from the financial statements of our Company included elsewhere in this Placement Document. The financial
information included in this Placement Document does not reflect our Company’s results of operations,
financial position and cash flows for the future and its past operating results are no guarantee of its future
operating performance.
Our Company’s financial statements are prepared and presented in accordance with Indian GAAP. For a
summary of our Company’s significant accounting policies and the basis of presentation of its financial
statements, see the notes to the financial statements under the section titled “Financial Statements”, beginning
on page 168 of this Placement Document. The selected financial information set forth below should be read in
conjunction with section titled “Management’s Discussion and Analysis of Financial Condition and Results
of Operations” on page 60 of this Placement Document and the audited consolidated financial statements of the
Company for the Fiscals 2013, 2014 and 2015.
CONSOLIDATED BALANCE SHEET
Particulars As at 31st
March, 2015
As at 31st
March, 2014
As at 31st
March, 2013
` In Million ` In Million ` In Million
I. EQUITY & LIABILITIES
1) Shareholders' Funds
(a)Share Capital 261.81 261.81 261.81
(b)Reserves and Surplus 2,506.63 2,143.11 1,823.16
2) Minority Interest 135.55 112.52 80.62
3) Non-Current Liabilities
(a)Long Term Borrowings 2,778.56 1,373.15 1351.80
(b)Deferred Tax Liabilities (Net) 253.48 237.51 192.14
(c)Other Long Term Liabilities 11.44 131.69 165.88
4) Current Liabilities
(a)Short Term Borrowing 6.95 307.54 47.93
(b)Trade Payables 146.23 98.22 80.34
(c)Other Current Liabilities 403.33 414.07 347.44
(d)Short Term Provisions 159.88 177.03 154.86
TOTAL 6,663.86 5,256.65 4,505.98
II. ASSETS
1) Non- Current Assets
(a)Fixed Assets
(i)Tangible Assets 4,395.26 4,012.44 3,112.16
(ii)Intangible Assets 35.01 39.45 40.54
(iii)Capital Work In Progress 779.20 449.93 421.80
(iv)Intangible Assets under Development 3.32 3.32 3.32
(b)Non-Current Investments 50.50 87.79 226.59
(c)Long Term Loans and Advances 299.61 241.61 251.79
(d)Other Non-Current Assets 1.50 1.58 2.12
2) Current Assets
(a)Current Investments 0.22 0.22 0.22
(b)Inventories 0.42 0.63 1.55
(c)Trade Receivables 340.98 320.45 177.48
(d)Cash and Cash Equivalents 465.57 60.03 229.24
(e)Short Term Loans and Advances 292.28 39.20 39.17
TOTAL 6,663.86 5,256.65 4,505.98
32
CONSOLIDATED STATEMENT OF PROFIT AND LOSS
Particulars
For the year
Ended March
31, 2015
For the year
Ended March
31, 2014
For the year
Ended March
31, 2013
` In Million ` In Million ` In Million
1. REVENUE
a. Revenue from operations 2,525.60 2,094.56 1,687.83
Less: Service tax 269.05 221.83 179.31
2,256.55 1,872.73 1,508.52
b. Other Income 8.56 10.77 13.06
Total Revenue 2,265.11 1,883.50 1,521.58
2. EXPENSES
(a) Changes in inventories 0.21 0.92 (1.55)
(b) Purchase of stock in trade - 1.18 2.87
(c) Employee benefit expenses 369.20 358.61 311.74
(d) Financial costs 127.79 119.66 107.91
(e)Depreciation and amortization expenses 397.29 241.77 146.47
(f) Other expenses 641.87 584.91 469.77
Total Expenses 1,536.36 1,307.05 1,037.21
3. Profit before exceptional and extraordinary items
and tax (1 - 2) 728.75 576.46 484.37
4. Exceptional Items - (0.28) -
5. Profit before extraordinary items and tax (3 + 4) 728.75 576.18 484.37
6. Extraordinary Items - - -
7. Profit before tax for the year (5 + 6) 728.75 576.18 484.37
8. Tax expense:
(a) Current tax 208.76 125.19 111.63
(b) MAT Credit Reversal / (Entitlement) 20.17 7.87 (3.64)
(c) Deferred tax 16.53 45.38 50.23
(d) Prior Year tax (0.49) (0.04) -
9. Profit(Loss) from the period from continuing
operations (7 - 8) 483.78 397.79 326.15
10. Profit/(Loss) from discontinuing operations - - -
11. Profit/(Loss) for the period (9 + 10) 483.78 397.79 326.15
12. Share of Minority Interest 23.03 31.90 25.65
13. Profit/(loss) after Minority Interest 460.75 365.89 300.50
14. Earning per equity share (of `. 10 each) :
(1) Basic 17.60 13.98 12.15
(2) Diluted 17.60 13.98 12.15
33
CONSOLIDATED CASH FLOW STATEMENT
Particulars Year ended
31.03.2015
Year ended
31.03.2014
Year ended
31.03.2013
` In Million ` In Million ` In Million
A
CASH FLOW FROM OPERATING
ACTIVITIES:
Net Profit Before Taxes 728.75 576.17 484.37
Non-cash expenses 397.36 241.77 146.55
Finance cost (Net) 127.84 119.66 107.91
Income from investment activity (0.38) (1.93) (3.45)
(Profit)/Loss on sale of assets - 0.28 -
Interest income (0.25) (0.68) (0.03)
524.57 359.10 250.98
Operating Profit before Working capital
changes 1,253.32 935.27 735.35
(Increase)/Decrease in Current Assets (337.67) (10.29) (55.31)
(Increase)/Decrease in Non-Current Assets (0.36) 0.02 (4.61)
(Increase)/Decrease in Trade and other
receivables (26.79) (152.41) 2.67
Increase/(Decrease) in Trade and other payables 27.35 48.19 75.79
Increase/(Decrease) in Current liabilities (2.76) 9.09 (2.41)
(340.23) (105.40) 16.13
Cash generated from operations 913.09 829.87 751.48
Direct taxes paid (223.63) (103.33) (62.02)
Share of Minority Interest (51.34) (67.71) (60.76)
Net cash from operating activities 638.12 658.83 628.70
B
CASH FLOW FROM INVESTING
ACTIVITES:
Investment in Subsidiary (0.10) - -
Investment in Joint Venture - - (3.35)
Payment towards purchase of Fixed Assets,
CWIP (1,368.37) (1,129.75) (1,032.60)
Proceeds from sale of fixed assets 306.83 44.95 -
Dividend received 0.38 1.93 3.07
Purchase of short term investments (216.30) (412.80) (452.07)
Proceeds from sale of short term investments 253.59 568.86 401.23
Interest income 0.25 0.68 0.03
Share of Minority Interest 42.20 53.10 97.28
Net cash (used in)/from Investing activities (981.52) (873.03) (986.41)
C
CASH FLOW FROM FINANCING
ACTIVITIES:
QIP Share issue proceeds - - 423.74
Proceeds from Share Capital / Application 0.10 - 1.35
Share issue proceeds (net of refund including
security premium) - - 5.60
Issue proceeds from NCD 500.00 250.00 -
NCD interest (65.15) (62.77) (64.44)
Repayment of NCD (300.00) (250.00) -
QIP related expenses (0.68) - (37.07)
34
Borrowings done 3,161.32 995.40 848.62
Repayment of long term and other borrowings (2,325.69) (702.81) (580.74)
Finance cost paid (184.16) (154.28) (134.91)
Dividend paid (39.27) (39.27) (30.15)
Dividend tax paid (6.67) (6.37) (4.89)
Share of Minority Interest 8.58 22.67 (45.91)
Net cash used in Financing Activities 748.38 52.56 381.20
NET INCREASE IN CASH AND CASH
EQUIVALENTS (A+B+C) 404.97 (161.62) 23.49
CASH AND CASH EQUIVALENTS AT
THE BEGINNING OF THE PERIOD 51.14 212.76 189.27
Cash & Bank Balances including Fixed Deposits 466.71 61.17 230.84
Less : Share Of Minority Interest (10.60) (10.03) (18.08)
CASH AND CASH EQUIVALENTS AT
THE END OF THE PERIOD 456.11 51.14 212.76
35
RISK FACTORS
An investment in the Equity Shares involves a high degree of risk. You should carefully consider all the risks
described below as well as other information in this Placement Document before making an investment in our
Equity Shares. To obtain a complete understanding of our Company, you should read this section in conjunction
with the sections titled “Our Business” and “Management’s Discussion and Analysis of Financial Condition
and Results Operations” beginning on pages 78 and 60, respectively, of this Placement Document. Prior to
making an investment decision, prospective investors should carefully consider all of the information contained
in the section titled “Financial Statements” beginning on page 168 of this Placement Document. Unless stated
otherwise, the financial data in this section is as per our financial statements prepared in accordance with
Indian GAAP and Indian Companies Act. Any of the following risks discussed in this Placement Document could have a material adverse impact on our
business, financial condition and results of our operation and could cause the trading price of our Equity Shares
to decline which could result in the loss of all or part of your investment. These risks are not the only ones that
we face. Our business operations could also be affected by additional factors that are not presently known to us
or that we currently consider to be immaterial to our operations. Unless specified or quantified in the relevant
risk factors below, we are not in a position to quantify financial or other implication of any risks mentioned
herein. This Placement Document also contains forward looking statements that involve risks and uncertainties. Our
actual results could differ materially from those anticipated in these forward-looking statements as a result of
certain factors, including the considerations described below and elsewhere in this Placement Document. In making an investment decision, prospective investors must rely on their own examination of our Company
and the terms of the offering, including the merits and risks involved.
INTERNAL RISK FACTORS
Risks related to our Company, our Business and our Industry
1. There are legal proceedings currently outstanding involving our Company, our Promoters, our Directors
and our Subsidiaries. Any adverse decision may render us liable to liabilities/penalties and may adversely
affect our business, results of operations and profitability.
There are legal proceedings currently outstanding involving our Company, our Promoters, our Directors and
our Subsidiaries. Our Company is involved in certain legal proceedings and claims in relation to certain
civil, criminal and taxation matters incidental to our business and operations. These legal proceedings are
pending at different levels of adjudication before various courts and tribunals. Any adverse decision may
render us liable to liabilities/penalties and may adversely affect our business, results of operations and
profitability.
For further details on the outstanding litigations pertaining to our Company, Directors, Promoters, and our
Subsidiaries refer to section titled “Legal Proceedings” beginning on page 159 of this Placement
Document.
2. Our Company has certain contingent liabilities and our financial condition could be adversely affected,
if any of these contingent liabilities materializes.
As of March 31, 2015, contingent liabilities disclosed in the notes to our audited consolidated financial
statements aggregated ` 29.69 million. Set forth below are our contingent liabilities as of March 31, 2015:
Nature of Contingent liability Amount (` in million)
Claim from a landlord, case pending before the
judiciary – Hyderabad
29.49
Cases pending before consumer courts 0.20
If any of these contingent liabilities materilizes, our financial condition will be adversely affected. For
details please refer to section titled “Financial Statements” beginning on page 168 of this Placement
Document.
3. Our Company has in the past entered into related party transactions and will continue to do so in the
36
future. Such transactions or any future transactions with related parties may potentially involve conflict
of interest and impose certain liabilities on our Company.
For the Fiscals 2015, 2014, 2013 our Company has entered into certain related party transactions. A
summary of these related party transactions on a standalone basis is as follows:
(` in million)
Nature of transactions Subsidiaries Associates Key Managerial
Personnel
2015 2014 2013 2015 2014 2013 2015 2014 2013
Investments including
Share Application Money
0.10 - 5.95 - - - - - -
Incomes 7.80 7.36 9.32 - 1.39 1.39 - - -
Expenses - - - 25.80 17.67 12.60 2.56 2.25 2.42
Interest on unsecured loans - - - - - 1.15 - - -
Director's Remuneration - - - - - - 24.15 25.20 25.20
Loans repaid / (taken) net - - - - - (1.54) - - -
Loans & Advances (given)/
repaid Net
72.96 8.70 11.85 0.61 1.41 0.65 - - -
While we believe that all such transactions have been conducted on an arms-length basis and are accounted
as per Accounting Standard 18, there can be no assurance that we could not have achieved more favourable
terms had such transactions not been entered into with related parties. Furthermore, it is likely that we will
continue to enter into related party transactions in the future. There can be no assurance that such
transactions, individually or in the aggregate, will not have an adverse effect on our financial condition and
results of operations. For further details please refer to section titled “Financial Statements” beginning on
page 168 of this Placement Document.
4. Our Company has experienced negative cash flows in recent Fiscals and may experience the same in
future.
We have had negative cash flows from investing activities for Fiscals 2015, 2014 and 2013, as per our
audited consolidated financial statements. This has been primarily due to payments towards purchase of
fixed assets and CWIP. Further, the net increase in cash and cash equivalents is positive in consolidated
financials in Fiscal 2015. The detail of cash flows is given below:
(` in million)
Consolidated
Particulars Year Ended March
31, 2015
Year Ended March 31,
2014
Year Ended
March 31, 2013
Net cash from / (used in)
Operating Activities
638.12 658.83 628.70
Net Cash from / (used in)
Investing Activities
(981.52) (873.03) (986.41)
Net cash from / (used in)
Financing Activities
748.38 52.56 381.20
Net increase in Cash & Cash
Equivalents
404.97 (161.62) 23.49
There can be no assurance that we will not have negative cash flows in the future. For further details please
refer to section titled “Financial Statements” beginning on page 168 of this Placement Document.
5. The success of our business depends on our ability to attract and retain customers and maintain
consistency in customer service.
Our Company’s ability to offer contemporary products to our customers and maintain our standards of
customer service in our Fitness Centers is critical to attract and retain customers. Our Company undertakes
regular advertising and marketing activities to create visibility, stimulate demand and promote our Fitness
Center operations, through various mediums of mass communication. Our ability to attract customers and
provide high standards of customer service further depends on our ability to attract and hire the right
37
personnel and also train the personnel in the implementation of our business processes. We cannot assure
you that we will be able to recruit and retain the right personnel or our advertising and marketing campaign
will be successful in meeting its objectives and provide returns commensurate to the investments made. Any
failure to attract new customers or expand our customer base, may materially affect our growth and
financial performance.
6. There exists a private limited company which owns and operates certain Fitness Centers under the same
or similar name as our Company and which can claim the history of our brand. Further, any deficiency
in the quality of services, equipments, training, etc. provided by these Fitness Centers may adversely
affect our brand image and thereby our business and our results of operations / financial condition.
There are certain Fitness Centers operated by the company “Talwalkars Fitness Solutions Private Limited”
(TFSPL) which is controlled by relatives of our Promoters. TFSPL owns and operates Fitness Centers
under the same or similar name and can claim the history of our brand.
Since the operations of TFSPL and the Talwalkars Group were / are independent to each other there has not
been any separation agreement / understanding between them. Since our incorporation till the year 2005,
TFSPL and our Company had been using the same logo. Subsequently, we have designed a new logo and
trademark which we currently use and same is registered with us.
As on May 31, 2015, our Company has not signed any non-compete or such other agreement / document
with TFSPL or its owners/managers and they may expand their business in the future that may compete
with us. The interests of TFSPL may conflict with our Company’s interests. Further, any deficiency in the
quality of services, equipments, training, etc. provided by TFSPL through their Fitness Centers may
adversely affect our brand image as they operate under the same or similar name and thereby affecting our
business.
7. There are 6 Trademark Licensed Gyms operating under our registered trade name “Talwalkars” which
are owned and operated by our Promoter Group Entities. Further, there are certain Fitness Centers
which are owned and managed by our franchisees under specific franchisee agreements and our
Company may enter into similar franchisee agreements in the future. Since our Company is not a part of
the day to day management of these Fitness Centers, any deficiency in the quality of services,
equipments, training, etc. provided by these Fitness Centers may adversely affect our brand image and
thereby our business and our results of operations / financial condition.
As on May 31, 2015, there are 6 Trademark Licensed Gyms operating under our registered brand
‘Talwalkars’ which are owned and operated by our Promoter Group Entities. These 6 Trademark Licensed
Gyms are independently managed by the Promoter Group Entities and our Company is not responsible for
its management. Further, our Company has a total of 28 Gyms which are operated by our franchisees which
includes 9 full service gyms and 19 HiFi Gyms on terms and conditions as set out under separate franchisee
agreements. Though we provide our franchisees with guidance including for the set-up of Gym, equipment,
staffing, etc., we cannot assure that our franchisees will adhere to the timelines for setting up and will set up
the required number of Fitness Centers as agreed upon therein. Since our Company is not responsible in the
day to day management of the Fitness Centers operated both under the franchisee model and that of the 6
Trademark Licensed Gyms any deficiency in the quality of services, equipments, training, etc. provided by
these Fitness Centers may adversely affect our brand image and thereby our business and our results of
operations / financial condition.
The Fitness Centers operated under the franchisee agreements are generally for a fixed term of 10 years.
Upon expiry of this term, the franchisee may opt to not renew the arrangement and we cannot assure if it
will be renewed or whether the renewed franchisee arrangements will be as beneficial to our Company.
For further details relating to Fitness Centers managed by Promoter Group Entities and our franchisees
please refer to section titled “Our Business” beginning on page 78 of this Placement Document.
8. Our indebtedness and the conditions and restrictions imposed by our financing and other agreements
could adversely affect our ability to conduct our business and operations.
As on March 31, 2015 our Company has sanctioned limits aggregating to ` 2,925.30 million out of which `
2,217.31 million is outstanding. These loans are secured by way of hypothecation of movable goods,
Fitness Center equipments and charge on certain immovable properties of our Company. Also, TBVFL has
38
issued non convertible debentures aggregating for ` 750 million which are subscribed by Axis Bank and
Union Bank of India. Some of our financing and debt arrangements require us to obtain prior approval
and/or impose certain restrictions on our Company which inter alia include alteration of capital structure,
declaration of dividends, amalgamation or reconstruction, undertake any new major project, implement any
scheme of major expansion or acquire major fixed assets except those indicated in funds flow statement,
change in management control, alter the provisions of its memorandum or articles of association, buy-back
of shares, dispose any of its assets or proposed assets resulting in asset cover falling below 1.25.
9. Any downgrading of TBVFL's debt ratings could impact our ability to raise finance on favorable terms
or at all, which in turn could adversely affect our business, financial condition and results of operations.
As at March 31, 2015, our Company had total borrowings of ` 3,089.31 million, which includes short term
borrowings of ` 6.95 million, long term borrowings of `3,082.35 million. TBVFL’s long-term debt is rated
by ICRA Limited and CARE Rating as ‘AA-’.
Any failure to service our indebtedness, maintain the required security interests, comply with a requirement
or otherwise perform our obligations under our financing agreements could lead to a termination of one or
more of our credit facilities, penalties and acceleration of amounts due under such facilities which may lead
to downgrading of TBVFL’s debt ratings which could impact our ability to raise finance on favorable terms
or at all and in turn adversely affect our business, financial condition and results of operations.
10. We have entered into trademark license agreements for Trademark Licensed Gyms, the terms and
conditions of which may not be commercially favourable to our Company.
There are 6 Trademark Licensed Gyms operating under our registered brand “Talwalkars” which are owned
and operated by our Promoter Group Entities. These six Fitness Centers are held by three of our Promoter-
Directors Madhukar Vishnu Talwalkar, Mr. Girish Madhukar Talwalkar and Mr. Prashant Sudhakar
Talwalkar through their proprietary undertakings and partnership firms.
We have entered into Trademark License Agreements, to provide royalty-free license for use of the brand
name “Talwalkars” by the Trademark Licensed Gyms by sharing the relevant marketing, promotion and
advertisement expenses with us. Thus to that extent, these terms and conditions may not be commercially
favourable to our Company.
11. Some of our Group Companies and Trademark Licensed Gyms are in similar line of business as our
Company. One of our promoters has pecuniary or equity interests in other companies which offer
services similar to that of our business. Such companies may be a potential source of conflict of interest
for us and may have an adverse effect on our operations
Some of our Group Companies namely, M/s. Talwalkars Health Complex, M/s. Fitness India Investments,
M/s. Talwalkars Fitness Products, M/s. Talwalkars Spa Systems, M/s. Talwalkars Nutrition Centre and M/s.
Talwalkars Fitness Enterprises are engaged in a similar line of business as that of our Company and are also
enabled by the main object clause of their respective memorandum of association to carry on activities
which may be same or similar to that of our Company. Further, there are entities namely Talwalkars
Omnifitness Private Limited, M/s. Club Business Systems and M/s. Talwalkars Health Commune which,
pursuant to our acquiring their businesses, continue to exist with main object clause of their respective
memorandum of association conflicting with our Company. Mr. Madhukar Vishnu Talwalkar is a director
in Pinnacle Fitness Private Limited, one of our franchisees which operate one Fitness Center in Delhi. As a
result, conflicts of interest may arise in allocating or addressing business opportunities and strategies
amongst our Company and other companies/entities in which the Promoter Directors hold equity shares or
are the directors.
Further, the Talwalkars Group and Gawande Group vide shareholder’s agreement dated July 1, 2003, have
agreed that except for the Trademark Licensed Gyms they will not engage in any other business activity
directly or indirectly competing with our Company for a period of three years following termination of the
shareholders agreement. However, there can be no assurance that following the termination of this
agreement and expiry of three years from the date of termination of the shareholders’ agreement Promoter
Directors or any companies/entities including Promoter Group Entities promoted by them or in which they
are directors will not compete with our Company ’s existing business or any future business.
Further, as agreed with our Company, 80% of the franchisee fee in respect of the Fitness Center situated at
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Alipore, Kolkata and owned by Equinox Wellness Private Limited (our step down subsidiary), 100% of the
franchisee fee of our franchised Fitness Center operating in Vashi, Maharashtra managed by our franchisee
Khandarkar & Shinde Associates and 80% of the franchisee fee of two of our franchised Fitness Centers
operating in Nagpur, Maharashtra by our franchisee Jyotsna Shinde Associates is remitted by our Company
to Talwalkars Omnifitness Private Limited, in which Mr. Madhukar Vishnu Talwalkar and Mr. Girish
Madhukar Talwalkar are directors and 100% of the equity share capital is held by them along with their
spouses.
However, on May 07, 2015, the Board of Directors of our Company has authorised Denovo to sell its entire
stake in Equinox. As on May 31, 2015, Denovo has not sold its stake in Equinox.
As a result of commonality in business between our Company and some of the entities managed by our
Promoter Group Entities, there could be possibilities where business opportunities which could be available
to us may be directed to these affiliated companies instead. Thus, all these may be a potential source of
conflict of interest for us and may have an adverse effect on our operations. For further details please refer
to section titled “Our Business” beginning on page 78 of this Placement Document.
12. Our Company does not have any definitive arrangement / agreement with any supplier to provide
equipments for our Fitness Centers including NuForm exercise studios. In the absence of any such
definitive arrangement/ agreement, there is no assurance that there will be a consistent supply of
equipments to our Fitness Centers.
We continue rolling out Fitness Centers in different formats and with different equipment requirements. We
procure equipments for our Fitness Centers from various suppliers however, we neither have any definitive
arrangement / agreement with any of the supplier to provide equipments to our Fitness Centers. In the
absence of such definitive arrangement / agreement, there is no assurance that there will be consistent
supply of equipments to our Fitness Centers.
For further information please refer to the section titled “Our Business” beginning on page 78 of this
Placement Document.
13. TBVFL has issued corporate guarantees/ undertakings on behalf of its Subsidiaries, which if claimed or
acted upon, may affect our business and results of operations
As on March 31, 2015, TBVFL has issued corporate guarantees aggregating to ` 559.75 million on behalf
of its Subsidiaries, details of which are as follows:
(` in million)
Sr.
No.
Name of the Subsidiary Amount of corporate guarantee
1. Denovo Enterprises Private Limited 19.75
2. Aspire Fitness Private Limited 40.00
3. Talwalkars Club Private Limited 500.00
TOTAL 559.75
In the event, the parties whose obligations TBVFL has guaranteed, do not perform their respective
obligations under any of the guarantees, the lenders of such facilities may require alternate guarantees or
acceleration or repayment of the amounts guaranteed. TBVFL may not be successful in procuring alternate
guarantees satisfactory to the lenders and as a result may need to repay the outstanding amounts under such
guarantees which could adversely affect our business, cash flows and financial condition.
14. We offer Zumba, a dance inspired fitness program to our members through trainers who are certified by
Zumba Fitness, LLC and have the right to use the Zumba® trademark. These certified trainers are either
appointed on contractual basis or as professional consultants. If we fail to retain these trainers it may
lead to disruption in providing this service to our members and accordingly impact our revenues.
Further, our Company does not have any direct arrangement with Zumba Fitness LLC, covering the
commercial understanding, the use of trademark, etc.
We are offering Zumba, a dance inspired fitness program at some of our Fitness Centers to our members
through trainers who are certified by Zumba Fitness, LLC and have the right to use the Zumba® trademark.
We incur the initial training and subsequent recurring membership costs for the certification of these
trainers. Since these certified trainers are either appointed on contractual basis or as professional
consultants, these trainers may opt not to continue working with us and if we fail to retain them, it may lead
40
to disruption in providing this service to our members and accordingly lead to loss of costs incurred in
training them and also impact our revenues.
Since our Company does not have any direct or exclusive arrangement with Zumba Fitness LLC, regarding
the commercial understanding, the use of trademark, etc, we face competition from other certified trainers
of Zumba Fitness LLC.
For further information please refer to the section titled “Our Business” beginning on page 78 of this
Placement Document.
15. Our Promoters and Promoter Group Entities will continue to hold a majority of our Equity Shares after
the Issue and can therefore continue to determine the outcome of shareholders’ voting and influence our
operations.
As of March 31, 2015, 43.32% of the issued and outstanding Equity Shares of our Company are owned by
the Promoters and Promoter Group Entities. Consequently, they will be able to exercise a significant degree
of influence over us and will be able to control the outcome of any proposal that can be passed with a
majority shareholders’ vote. In addition, our Promoters have the ability to block any resolution by our
shareholders, including the alterations of the Articles of Association, issuance of additional shares of capital
stock, commencement of any new line of business and similar significant matters. Our Promoters and
Promoter Group Entities will be able to control most matters affecting us, including the appointment and
removal of officers, our business strategies and policies, dividend payouts and capital structure and
financing, delay or prevent a change in our control, impede a merger, consolidation, takeover or other
business combination involving us, or discourage a potential acquirer from making a tender offer or
otherwise attempting to obtain control of us even if such action was in the best interests of the shareholders
as a whole.
Our Promoters and Promoter Group Entities will also continue to have the ability to cause us to take actions
that are not in, or may conflict with, our interests and or the interests of our minority shareholders, and there
can be no assurance that such actions will not have an adverse effect on our future financial performance
and the price of our Equity Shares.
16. We have capital commitments to our Subsidiaries and any failure in performance, financial or
otherwise, of any of our Subsidiaries in which we have made investment could have a material adverse
effect on our reputation, business prospects, financial condition and results of operations.
TBVFL has made and may continue to make investments and other commitments towards its Subsidiaries
for augmenting their respective businesses. These investments and commitments may include capital
contributions to enhance the financial condition or liquidity position of these Subsidiaries. TBVFL may
make capital investments in the future, which may be financed through additional debt. If the business and
operations of these Subsidiaries deteriorate, TBVFL’s consolidated financial position will be adversely
affected. The aggregate value of investments made by TBVFL to it’s Subsidiaries as on March 31, 2015 is
as follows:
( `in million)
Particulars March 31, 2015
Denovo Enterprises Private Limited 5.01
Aspire Fitness Private Limited 5.00
Jyotsna Fitness Private Limited 0.10
Talwalkars Club Private Limited 0.10
17. As on May 31, 2015 there are 36 trademark applications and 1 copyright application which are pending
for registration. Our success depends on our trademarks and proprietary rights and any failure to protect
our intellectual property rights may adversely affect our competitive position.
Our Company has built its goodwill and reputation in the field of health and fitness under its brand
“Talwalkars”. Our Company owns intellectual property rights, in particular, trademarks, which are
fundamental to our brand, which gives us a competitive advantage. Our Company uses its intellectual
property rights to promote and protect the goodwill of our brand, enhance our competitiveness and
otherwise support our business goals and objectives. As on May 31, 2015, our Company has obtained 23
trademark registrations. Further, our Company has made 36 applications for registration of various
41
trademarks and logos which are currently pending registration and we have also made an application for
registration of our logos for “Transform” and “HIFI” before the Registrar of Copyrights which is pending
for registration. Further, our Company has received a notice of opposition with respect to trademark
registration application for its logo and trade name under class 25. In the event that the Company fails to
receive the trademark registrations and copyrights, the Company may not be able to use the aforementioned
trademarks and logos.
18. Our Company’s Fitness Centers are operating in different cities under varied local/ municipal/ state
laws. Non-renewal and failure to obtain statutory and regulatory permissions and approvals required to
operate our business may have a material adverse effect on our business.
As on May 31, 2015, the Company has 152 Fitness Centers operating, in 80 cities across 21 states. Setting
up of Fitness Centers under jurisdiction of different states is governed by both central and state enactments
such as the Shops and Establishment Act, Contract Labour (Regulation and Abolition) Act, 1970, Indian
Performing Right Society Limited, Food Safety and Standards Act, 2006, etc. Our Company is required to
renew some of the approvals and licenses, which may expire, from time to time, in the ordinary course
Accordingly, our Company has made requisite applications for statutory and regulatory approvals, licenses,
registrations and permissions to operate our business, some of which our Company has either received,
applied for or is in the process of making applications/renewal applications.
Any failure by us to apply in time, to renew, maintain or obtain the required permits, licenses or approvals,
or the cancellation, suspension or revocation of any of the permits, licenses or approvals may result in delay
in the rollout plan/operations of the Fitness Centers and may have a material adverse effect on the business.
If we fail to comply with all applicable regulations or if the regulations governing our business or their
implementation change, we may incur increased costs which could adversely affect our results of
operations. There can be no assurance that the relevant authorities will issue any of such permits or
approvals in the time-frame anticipated by us or at all. For further details relating to the regulations and
policies applicable to our business, please see section titled “Regulations and Policies” beginning on page
96 of this Placement Document.
19. Our registered office from where we operate is not owned by us and a substantial number of our Fitness
Centers, exercise studios, additional offices, training center, godown and guest houses are established on
premises which are operational on leave and license/ lease basis. Some of these leave and license/ lease
agreements for our Fitness Centers and guest houses are not registered and adequately stamped and in
case of any dispute these agreements may not be admissible as evidence in a court of law, until the
relevant stamp duty is paid and the same is registered. Further, our Company may not be able to renew
these agreements at all or may not be able to renew the same on the terms and conditions that are
acceptable and favourable to us.
Our registered office is situated on the premises currently owned by Gawande Consultants Private Limited,
one of our Group Company, in which Mr.Vinayak Ratnakar Gawande and Mr. Anant Gawande directly,
indirectly and collectively hold 80.35% of its outstanding equity share capital as on May 31, 2015. Our
Company has entered into an arrangement with Gawande Consultants Private Limited, whereby our
Company is permitted to operate its registered office for a period of 12 months commencing from April 02,
2015 until April 01, 2016. The arrangement provides for a renewal clause for a period of 12 months on
certain conditions and in the event, both the parties are unable to renew this arrangement, our Company
may have to vacate the premise and relocate its registered office.
Further, our Company has entered into a leave and license agreement with Mr. Prashant Sudhakar Talwalkar, our Managing Director, for the premise in Sangli, admeasuring 6,600 sq. ft. carpet area, from
where we operate our Fitness Center, on a monthly license fee amounting to ` 1,66,750 for a period commencing from May 01, 2013 until April 30, 2018. Likewise, for our Fitness Center located in Ulsoor Road, Bengaluru, admeasuring 5,753.956 sq. ft., our Company has also entered into a leave and license
agreement with Better Value Properties Private Limited, on a monthly license fee amounting to is ` 580,428 for a period commencing from April 01, 2013 until March 31, 2018.
As on May 31, 2015, except for 8 Fitness Center premises which are owned by our Company all other
Fitness Centers, exercise studios, additional offices, training centers, godown and guest houses are
operating on leave and license/ lease/conducting agreement basis. Some of these leave and license/ lease
agreements are not registered and adequately stamped. Further, some of the leave and license/lease
agreements for our properties have expired and our Company is the process of renewing the agreements for
the same. In the event our Company faces litigation pertaining to these properties, these lease / leave and
42
license agreements may not be admissible as evidence in a court of law, until the relevant stamp duty is paid
and the same is registered. Besides, the leave and license/ lease agreements for all these premises are
renewable on mutual consent upon payment of such rates as stated in these agreements. Our Company may
not be able to renew these leave and license / leases agreements at all or on the terms and conditions that
may be acceptable and favourable to us, as a result of which we may have to close a Fitness Center or suffer
a disruption in our operations and could ultimately have an adverse effect on our business, financial
conditions and results of operations. Any dispute relating to the title and ownership of these properties
could result in relocating and incurring additional expenses for the same. For further details on all of our
owned/ leave and license/leased premises please refer to paragraph titled “Our Properties” in the section
titled “Our Business” beginning on page 78 of this Placement Document.
Further, one of our property taken on lease or leave and license basis is under litigation. There may be a
possibility of further litigations/dispute pertaining to our current leave and license/ leased properties for
reasons involving payment of rent/ inability to obtain requisite approval on time, etc. In the event of any
unfavourable decision/ order/ judgment passed by the courts/ relevant authorities, our Company may have
to vacate these premises which may adversely affect our business, results of operations and profitability.
For further details on litigation pertaining to the leave and license property, please refer to section titled
“Legal Proceedings” beginning on page 159 of this Placement Document.
20. Our Company may not be able to penetrate new geographies for expanding its business operations.
As on May 31, 2015, out of the 152 Fitness Centers, 54 Fitness Centers are located in Tier 1 cities, 59
Fitness Centers in Tier 2 cities and 39 Fitness Centers in Tier 3 cities. Pursuant to our expansion plan, Our
Company has penetrated into Tier 2 and Tier 3 cities and selected city suburbs through setting up smaller
format and affordable Gyms without compromising the quality of services under the name “HiFi”. The
success of our business expansion depends not only on our marketing and promotional activities but also on
other factors which may not be under our control to penetrate new geographies. We cannot assure you that
we will be able to penetrate new geographies or will be successful in new geographies.
For further information please refer to the section titled “Our Business” beginning on page 78 of this
Placement Document.
21. Our insurance coverage may not adequately protect us against possible risk of loss.
Our Company has obtained various insurance policies inter alia including standard fire and special perils
policies, fidelity guarantee policy, future money insurance policy, burglary insurance policy, public liability
insurance, errors and omissions policy, director’s & officers liability policy, group gratuity policy etc.
covering our Fitness Centers, guest houses, training center, offices etc.
We believe that we maintain insurance coverage in amounts consistent with industry norms, our insurance
policies do not cover all risks. If any or all of our facilities are damaged in whole or in part and our
operations are interrupted for a sustained period, there can be no assurance that our insurance policies will
be adequate to cover the losses that may be incurred as a result of such interruption or the costs of repairing
or replacing the damaged facilities. Furthermore, there can be no assurance that we will be able to maintain
adequate insurance coverage in the future at acceptable costs. If we suffer a large uninsured loss or any
insured loss suffered by us significantly exceeds our insurance coverage, our business, financial condition
and results of operations may be materially and adversely affected. For details relating to our insurance,
please refer to section titled “Our Business” beginning on page 78 of this Placement Document.
22. Our growth will depend on our ability to sustain our brand and failure to do so will have a negative
impact on our ability to compete in this industry.
Our Company believes that our brand is well recognized in the industry in which we operate. Continuing
efforts towards building and sustaining our brand will be critical for the recognition of our services.
Promoting and positioning our brand will depend largely on the success of our marketing efforts and our
ability to back that with high quality services. Brand promotion activities may /may not result in
incremental revenue, and even if they do, any incremental revenue may not offset the expenses we incur in
building our brand. If we fail to promote and maintain our brand, our business and operations could be
adversely affected.
23. Our inability to manage our growth could disrupt our business and reduce our profitability.
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Our Income from Operations (net of service tax) has grown at a CAGR of 22.31%, during the Fiscal 2013-
2015. Our Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) have grown at a CAGR
of 30.99% and our Profits After Tax (after extraordinary income/(loss) and Minority Interest) has grown at
a CAGR of 23.82%, during the Fiscal 2013- 2015.
A principal component of our strategy is to continue growing by expanding the size and geographical scope
of our business. Although we plan to continue to expand our scale of operations through organic growth and
investments in other entities, there could be a possibility that we may not grow at a rate comparable to our
growth rate in the past, either in terms of income or profit. Further, such growth strategy will place
significant demands on our management, financial and other resources. It will require us to continuously
develop and improve our operational, financial and internal controls and more importantly adhering to
quality and high standards that meet customer expectations. Any inability on our part to manage such
growth could disrupt our business prospects, impact our financial condition and adversely affect our results
of operations.
24. Our Company cannot assure you that we will be able to secure adequate financing in the future on
acceptable terms, in time, or at all.
Our Company may require additional funds in connection with future business expansion and development
initiatives. In addition to the net proceeds of this offering and our internally generated cash flow, we may
need additional sources of funding to meet these requirements, which may include entering into new debt
facilities with lending institutions or raising additional debt in the capital markets. If we decide to raise
additional funds through the incurrence of debt, our interest obligations will increase, and we may be
subject to additional covenants. Such financings could cause our debt to equity ratio to increase or require
us to create charges or liens on our assets in favour of lenders. We cannot assure you that we will be able to
secure adequate financing in the future on acceptable terms, in time, or at all. Our failure to obtain sufficient
financing could result in the delay or abandonment of any of our business development plans and this may
affect our business and future results of operations.
25. Majority of the staff in our Fitness Centers, such as our trainers and operational managers, are either
appointed on contractual basis or as professional consultants. We may fail to attract and retain adequate
sufficiently trained staff needed to support our operations and growth.
In the health and fitness industry the success, to a significant extent, depends on one’s ability to provide
quality services to its customers on a continuous basis. To deliver this it is necessary to attract, hire, train
and retain qualified staff. We have a residential training academy at Thane, where all our potential Fitness
Center staff undergoes intense six week training in soft skills and service delivery. We view this process as
a necessary tool to maximize the performance of our employees. This, however, would increase our
recruiting and training costs and decrease our operating and profit margins. Presently, majority of our
general trainers and operational managers are sourced from various agencies on contractual basis on such
terms as agreed to with the contractors in the agreements entered into with them. We also engage
professionals who provide us consultancy services for our add-on services like spa, massage and personal
training, etc. on revenue sharing basis. Thus, if we fail to attract and retain sufficiently trained staff needed
to support our operations and growth which could result in poor service quality leading to a material
adverse effect on our business, results of operations, financial condition and cash flows. Besides, there is
significant need for professionals with skills necessary to perform the services we offer to our clients.
26. We do not have any definitive arrangement / agreement with the manufacturer of food products for our
Reduce diet program. Hence, we cannot ensure you that there will be an uninterrupted and timely supply
of the products, protection of the composition and nutrition value of the diet products against disclosure
to third parties and any enforcement of our rights against the manufacturer for any deficiency in the
products etc.
Our Company has introduced Reduce, a personalized diet based weight loss program. As on May 31, 2015,
our Company is providing 56 products under this Reduce diet plan. We have outsourced the manufacturing
of Reduce products to some manufacturers. However, we do not have any definitive arrangement /
agreement with these manufacturers. In the absence of such arrangement / agreement, there is no assurance
that the manufacturer will deliver the products as per our scheduled requirements, or the composition and
nutritional value of these products be disclosed to our competitors etc. Further, we may have to incur
additional expenditure to meet our quality requirements and in the absence of such definitive agreement we
may have difficulties in enforcing our rights against the manufacturers. In such circumstance(s), we may be
exposed to risks associated with its consequences and this in turn will affect our business reputation, growth
44
and results of operations. While we impose stringent quality checks and supervision for manufacturing of
these products, we cannot assure whether the final product will adhere to the prescribed quality standards.
For further information please refer to the section titled”Our Business” beginning on page 78 of this
Placement Document.
27. We continue exploring potential growth areas for our business and to achieve this we may pursue both
organic and inorganic initiatives. We cannot assure whether these initiatives will be successful and / or
generate results as expected by us.
As our growth strategy, we continue growing through roll out of our Fitness Centers and broadening our
service offerings. There are several regions in India where our Company does not have adequate number of
Fitness Centers. In such regions, we propose to not only set up new Fitness Centers but also acquire the
existing running gyms and gym chains to achieve significant market presence quickly. We believe that we
have achieved significant scale and size to achieve growth through inorganic initiatives. We may explore
opportunistically certain inorganic initiatives that can give us either access to newer markets, strengthen our
presence in existing markets or help us achieve a larger scale in a relatively shorter time. We believe we
may come across potential inorganic opportunities and we can selectively evaluate such acquisition
opportunities.
Our value added services have significantly contributed towards growth in our revenues and we will
continue to focus on widening our value added services. Our products under the Reduce program are
currently available to both our members and non members through our Fitness Centers. We are evaluating
other alternatives to market this brand through several channels including kiosks and other retail formats.
There is currently a spurt in products and services being purchased online and there is growing acceptance
of the same. To benefit from this, we also provide Reduce online through our website. In this manner, the
Talwalkars brand can be experienced even in areas where our Company presently does not have a Fitness
Center.
Our Company has made progress with its plan to set up a leisure club by acquiring land for opening our first
club in Pune and commencing work on the project. Our Company sees the leisure club business as a great
opportunity in many of the markets in India due to a large gap between demand and supply and therefore,
has plans to set up several such clubs in different cities over the next few years. Our Company expects this
to be of the highest international standards and intends to tie up or work with leading international
companies to ensure the same. To this purpose, we intend to enter in to a 50:50 joint venture with David
Lloyd Leisure Limited.
We have recently opened two premium Fitness Centers, 1 each in Banjara Hills, Hyderabad and South
Mumbai. Such premium Fitness Centers are typically in larger formats with area ranging from 8,000 sq. ft.
to 12,000 sq. ft. and would provide special services like Wi-Fi, juice bars, coffee shops, valet parking,
merchandised products, etc. and thus require relatively higher capex as compared to our regular Fitness
Centers. In the last Fiscal, we have also launched Transform whereby, we offer our members both NuForm
and Reduce programs under one umbrella for them to achieve holistic results. We have also incurred capex
towards refurbishment and renovation for integrating NuForm in our existing Fitness Centers. Any failure
to earn adequate revenues from these capital expenditures may result in a loss of capital as well as operating
losses thereby adversely affecting the profits of our Company.
While we consider these growth avenues we cannot assure you whether these initiatives will be successful
and / or generate results as expected by us.
For further information, please refer to the section titled “Our Business” and “Use of Proceeds” on pages
78 and 52 of this Placement Document.
28. Our success depends significantly upon our Promoters and management team. Any inability on our part
to retain their involvement and association with us may adversely affect our business and results of
operations. Further, our existing strength of management team may face limitation in managing growth
in the future.
Our Company is highly dependent on our Promoters, executive directors and our senior managerial
personnel for our business. Our business model is reliant on the efforts and initiatives of our Promoters,
senior level management and our key managerial personnel. Our ability to successfully function and meet
45
future business challenges depends on our ability to retain them. Our future performance will depend upon
the continued services of these persons. In this regard, we cannot assure you that we will be able to retain
our executive Directors and our senior managerial personnel or continue to attract new talents in the future.
Further, our Promoters have been instrumental in the expansion of our Company and have contributed to
our solidification as a leader in the industry of health and fitness. Our Company has grown significantly
under the guidance and mentorship of our Promoters. Our Company may be adversely affected by such acts,
including dilution in their shareholding, disassociation, etc. of any of our Promoters.
29. Our ability to pay dividends in the future may be affected by any material adverse effect on our future
earnings, financial condition or cash flows.
Our Company has paid ` 39.27 million for each of the Fiscals 2013 and 2014 respectively and an amount of
` 39.27 million is proposed for Fiscal 2015, as dividend to our shareholders. Our ability to pay dividends in
future will depend on our earnings, financial condition and capital requirements and capital expenditure. We
are required to obtain consents from our lenders prior to the declaration of dividend as per the terms of the
agreements executed with them. We may be unable to pay dividends in the near or medium term, and our
future dividend policy will depend on our capital requirements and financing arrangements in respect of our
operations, financial condition and results of operations. For further details, please refer to the section titled
“Dividend Policy” beginning on page 59 of this Placement Document.
30. Our Company may face claims / liabilities / suits from our customers should they perceive any deficiency
in service or in the event of bodily harm / injury whether external or injury to them while in our Fitness
Centers.
Our Company believes in providing quality customer service and due care is taken while providing services.
We attempt to mitigate the associated risks which may happen due to factors beyond our control. However
our Company may not be able to cover all such risks and may face financial liabilities or loss of reputation,
in the event of accidents / mishaps in our Fitness Centers. While we endeavour to take maximum possible
precautions, any mishap, accident during physical training and work-outs, which may or may not lead to
personal injuries, may take place due to factors which are beyond our control. Occurrence of such events
may have an adverse implication on our business. For details pertaining to such claims, please refer to the
section titled “Legal Proceedings” beginning on page 159 of this Placement Document.
31. Our Company may be unable to utilize the funds raised under this Issue for the existing or intended
businesses
Our Company is proposing to raise funds through this Issue for purposes set out in the section titled “Use of
Proceeds” beginning on page 52 of this Placement Document. In the event our Company is unable to utilize
the proceeds of the Issue for the purpose mentioned therein, the proceeds of the Issue may remain unutilized
for indefinite period which could adversely affect our business and our results of operations/financial
condition.
32. Our Company operates in a highly competitive and fragmented market and the competition from the
unorganized sector may adversely aaffect our operations and profitability.
Our Company operates in a highly competitive market and face stiff competition from other players
operating both in organized and un-organized sectors. Some foreign players have also entered the Indian
market. Pricing is one of the factors that play an important role in our customers’ selection of our services.
There are several strategies adopted by our competitors to increase their market share i.e. through
advertising, pricing, service and new product introductions among others. This increased competition by
both traditional and new players may affect our margins. In order to protect our existing market share or
capture market share, we may be required to increase expenditure for advertising and promotions and to
introduce and establish new products. Due to inherent risks in the marketplace associated with advertising
and new product introductions, including uncertainties about consumer response, increased expenditure
may not prove successful in maintaining or enhancing our market share and could result in lower
profitability.
33. Our evolving business may make it difficult to evaluate our business and future operating results on the
basis of our past performance, and our future results may not meet or exceed our past performance.
46
Our business is growing and the results and amounts set forth in section titled “Selected Financial
Information” beginning on page 31 of this Placement Document may not provide a reliable indication of
our future performance. Accordingly, you should evaluate our business and prospects in light of the risks,
uncertainties and difficulties frequently encountered by companies as they grow. Our failure to address
these risks and uncertainties successfully could adversely affect our business and operating results, and a
decline in the trading price of our Equity Shares.
EXTERNAL RISK FACTORS
34. Significant differences exist between Indian GAAP and other accounting principles, such as U.S. GAAP
and IFRS, which may be material to the financial statements prepared and presented in accordance with
Indian GAAP contained in this Placement Document.
Our audited financial statements contained in this Placement Document have been prepared and presented
in accordance with Indian GAAP. Indian GAAP differs from accounting principles and auditing standards
with which prospective investors may be familiar in other countries, such as U.S. GAAP and IFRS.
Significant differences exist between Indian GAAP and U.S. GAAP and IFRS, which may be material to
the financial information prepared and presented in accordance with Indian GAAP contained in this
Placement Document. Accordingly, the degree to which the financial information included in this
Placement Document will provide meaningful information and is dependent on your familiarity with Indian
GAAP and the Companies Act. Any reliance by persons not familiar with Indian GAAP on the financial
disclosures presented in this Placement Document should accordingly be limited.
35. There are restrictions on daily movements in the price of the Equity Shares, which may adversely affect a
shareholder’s ability to sell, or the price at which it can sell, Equity Shares at a particular point in time.
We are subject to a daily “circuit breaker” imposed by stock exchanges in India, which does not allow
transactions beyond specified increases or decreases in the price of the Equity Shares. This circuit breaker
operates independently of the index-based market-wide circuit breakers generally imposed by SEBI on
Indian stock exchanges. The maximum movement allowed in the price of the Equity Shares before the
circuit breaker is triggered is determined by the Stock Exchanges based on the historical volatility in the
price and trading volume of the Equity Shares.
The Stock Exchanges do not inform us of the triggering point of the circuit breaker in effect from time to
time, and may change it without our knowledge. This circuit breaker limits the upward and downward
movements in the price of the Equity Shares. As a result of this circuit breaker, no assurance may be given
regarding your ability to sell your Equity Shares or the price at which you may be able to sell your Equity
Shares at any particular time.
36. The price of our Equity Shares may be highly volatile.
The Equity shares of our Company are currently listed on BSE and NSE. The price of our Equity Shares
may fluctuate after this issue as a result of several factors including:
Volatility in Indian and global securities market;
Our results of operations and performance;
Performance of our competitors;
Adverse media reports, if any, on our Company or the sector;
Changes in the estimates of our performance or recommendations by financial analysts;
Significant development in India’s economic liberalization and de-regulation policies;
Economic developments in India and globally; and
Significant development in India’s Fiscal and environmental regulations.
There can also be no assurance that the price at which our Equity Shares are currently trading will
correspond to the prices at which our Equity Shares will trade in the market subsequent to this issue.
37. There is no guarantee that the Equity Shares will be listed on the BSE and the NSE in a timely manner
or at all.
In accordance with Indian law and regulations and the requirements of the Stock Exchanges, in principle
and final approvals for listing and trading of the Equity Shares issued pursuant to this Issue will not be
47
applied for or granted until after the Equity Shares have been issued and allotted. Approval for listing and
trading will require all relevant documents authorizing the issuing of Equity Shares to be submitted.
Accordingly, there could be a failure or delay in listing the Equity Shares on the Stock Exchanges. If there
is a delay in obtaining such approvals, we may not be able to credit the Equity Shares allotted to the
investors to their depository participant accounts or assure ownership of such Equity Shares by the investors
in any manner promptly after the Closing Date. In any such event, the ownership of the investors over
Equity Shares allotted to them and their ability to dispose of any such Equity Shares may be restricted. For
further information on issue procedure, see section titled "Issue Procedure" beginning on page 120 of this
Placement Document.
38. The market value of an investor's investment may fluctuate due to the volatility of the Indian securities
markets.
Indian securities markets are more volatile than the securities markets in certain countries which are
members of the OECD. Stock Exchanges in India have in the past experienced substantial fluctuations in
the prices of listed securities. For example, in May 2006, Indian stock exchanges witnessed substantial
volatility as the BSE and the NSE, India’s main stock exchanges, halted trading for one hour on May 22,
2006 after their respective indices fell more than 10%. The market price of our Ordinary Shares could
fluctuate significantly as a result of market volatility. The Indian Stock Exchanges have experienced
problems which, if they were to continue or recur, could affect the market price and liquidity of the
securities of Indian companies, including the equity shares. These problems have included temporary
exchange closures, broker defaults, settlement delays and strikes by brokerage firm employees. In addition,
the governing bodies of the Indian Stock Exchanges have from time to time imposed restrictions on trading
in certain securities, limitations on price movements and margin requirements. Furthermore, from time to
time, disputes have occurred between listed companies and stock exchanges and other regulatory bodies,
which in some cases may have had a negative effect on market sentiment.
39. Any future issuance of equity shares by us may dilute your shareholding and adversely affect the trading
price of the Equity Shares.
Any future issuance of equity shares by us or any other primary offering or pursuant to a preferential
allotment will dilute your shareholding in our Company, adversely affect the trading price of our equity
shares and could impact our ability to raise capital through an issue of our securities. In addition, any
perception by investors that such issuances or sales might occur could also affect the trading price of our
Equity Shares.
Additionally, the disposal of Equity Shares by any of our major shareholders, any future issuance of equity
shares by us or the perception that such issuance or sales may occur may significantly affect the trading
price of the Equity Shares. We cannot assure you that we will not issue equity shares or that such
shareholders will not dispose of, pledge or encumber their equity shares in the future.
40. An investor will not be able to sell any of the Equity Shares purchased in this Issue other than Stock
Exchanges for a period of 12 months from the date of the allotment of the Equity Shares.
Our Company’s Equity Shares are currently listed on BSE and NSE. Pursuant to the SEBI ICDR
Regulations, for a period of 12 months from the date of the issue of the Equity Shares under this Issue, QIBs
subscribing to the Equity Shares may only sell their Equity Shares through Stock Exchanges mechanism
and may not enter into any off market trading in respect of these Equity Shares. Further, allotment to
FVCIs, VCFs and AIFs are subject to applicable rules and regulations, including in relation to lock- in. We
cannot be certain that these restrictions will not have an impact on the price and liquidity of the Equity
Shares.
41. Economic developments and volatility in securities markets in other countries may cause the price of our
Equity Shares to decline.
The Indian economy and its securities markets are influenced by economic developments and volatility in
securities markets in other countries. Investors’ reactions to developments in one country may have adverse
effects on the market price of securities of companies located in other countries, including India. For
instance, the economic downturn globally has adversely affected market prices in the world’s securities
markets, including the Indian securities markets. Negative economic developments, such as rising Fiscal or
trade deficits, or a default on sovereign debt, in other emerging market countries may affect investor
confidence and cause increased volatility in Indian securities markets and indirectly affect the Indian
48
economy in general.
42. Holders of Equity Shares outside India could be restricted in their ability to exercise pre-emptive rights
under Indian law and could thereby suffer future dilution of their ownership position.
Under the Companies Act, any company incorporated in India must offer its holders of equity shares pre-
emptive rights to subscribe and pay for a proportionate number of shares to maintain their existing
ownership percentages prior to the issuance of any new equity shares, unless the pre-emptive rights have
been waived by the adoption of a special resolution by holders of three-fourths of the shares voted on such
resolution, unless the company has obtained Government approval to issue without such rights. However, if
the law of the jurisdiction that you are in does not permit the exercise of such pre-emptive rights without us
filing an offering document or registration statement with the applicable authority in such jurisdiction, you
will be unable to exercise such pre-emptive rights unless we make such a filing. We may elect not to file a
registration statement in relation to pre-emptive rights otherwise available by Indian law to you. To the
extent that you are unable to exercise pre-emptive rights granted in respect of the Equity Shares, your
proportional interest in the company would be reduced.
43. A third party could be prevented from acquiring control over us because of anti-takeover provisions
under Indian law.
There are provisions in Indian law that may discourage a third party from attempting to take control of us,
even if a change in control would result in the purchase of our Equity Shares at a premium to the market
price or would otherwise be beneficial to our shareholders. Indian takeover regulations contain certain
provisions that may delay, deter or prevent a future takeover or change in control of us. Disclosure and
mandatory bid obligations for listed Indian companies under Indian law are governed by the specific
regulations in relation to substantial acquisition of shares and takeover under the Takeover Code. Since we
are an Indian listed company, the provisions of the Takeover Code apply to us. For details refer to section
titled “Indian Securities Market” on page 140 of this Placement Document.
44. Investors may have difficulty enforcing foreign judgments against our Company or its management
The enforcement by investors of civil liabilities, including the ability to affect service of process and to
enforce judgments obtained in courts outside of India may be affected adversely by the fact that we are
incorporated under the laws of the Republic of India, and most of our executive officers and directors reside
in India. All of our assets and most of the assets of our executive officers and directors are also located in
India. As a result, it may be difficult to affect service of process upon us and any of these persons outside of
India or to enforce judgments obtained against us and these persons, in courts outside of India.
Section 44A of the Civil Code, provides that where a foreign judgment has been rendered by a court in any
country or territory outside India, which the Government has by notification declared to be a reciprocating
territory, it may be enforced in India by proceedings in execution as if the judgment had been rendered by
the relevant court in India. The United Kingdom has been declared by the Government to be a reciprocating
territory for the purposes of Section 44A. However, the United States has not been declared by the
Government to be a reciprocating territory for the purposes of Section 44A. A judgment of a court in the
United States may be enforced in India only by a suit upon the judgment, subject to Section 13 of the Civil
Code and not by proceedings in execution.
The suit must be brought in India within three years from the date of the judgment in the same manner as
any other suit filed to enforce a civil liability in India. Generally, there are considerable delays in the
disposal of suits by Indian courts. It is unlikely that a court in India would award damages on the same basis
as a foreign court if an action is brought in India. Furthermore, it is unlikely that an Indian court would
enforce foreign judgments if it viewed the amount of damages awarded as excessive or inconsistent with
Indian practice. A party seeking to enforce a foreign judgment in India is required to obtain prior approval
from the RBI under FEMA to repatriate any amount recovered. For further details, please refer the section
titled “Enforcement of Civil Liabilities” on page 15 of this Placement Document.
45. Our investors resident outside India are subject to foreign investment restrictions under Indian law which may
adversely affect our Company's operations and its ability to freely sell the Equity Shares. SEBI has notified the SEBI (Foreign Portfolio Investors) Regulations, 2014 on January 7, 2014, repealing
the SEBI (Foreign Institutional Investors) Regulations 1995. SEBI notified the SEBI FPI Regulations
49
pursuant to which the existing classes of portfolio investors namely “foreign institutional investors” and
“qualified foreign investors” will be subsumed under a new category namely “foreign portfolio investors”
or “FPIs”. RBI on March 13, 2014 amended the FEMA Regulations and laid down conditions and
requirements with respect to investment by FPIs in Indian companies. An FII who holds a valid certificate
of registration from the SEBI shall be deemed to be an FPI until the expiry of the block of three years for
which fees have been paid as per the Securities and Exchange Board of India (Foreign Institutional
Investors) Regulations, 1995. An FII or a sub-account may participate in the Issue, until expiry of its
registration as an FII or sub-account or until it obtains a certificate of registration as an FPI, whichever is
earlier. If the registration of an FII or sub-account has expired or is about to expire, such FII or sub-account
may, subject to payment of conversion fees as applicable under the SEBI FPI Regulations, participate in the
Issue. An FII or sub-account shall not be eligible to invest as an FII after registering as an FPI under the
SEBI FPI Regulations.
46. Your ability to sell your Equity Shares to a resident of India may be subject to delays if RBI or any other
Government agency’s approval is required.
Under current Indian regulations and practice, approval of the RBI is required for the sale of Equity Shares
by a non-resident to a resident of India unless the sale is made on a recognized stock exchange in India
through a stock broker or a merchant banker registered with SEBI at the market price in accordance with the
terms of the pricing guidelines specified by the RBI in case of an off-market transfer. The conversion of the
Rupee proceeds from such sale into foreign currency and the repatriation of that foreign currency from India
under certain circumstances also require the approval of the RBI. As foreign exchange controls are in effect
in India, the RBI will approve the price at which Equity Shares are transferred based on a specified formula
and a higher price per Equity Share may not be permitted. Approvals required from the RBI or any other
government agency may not be obtained on terms favorable to a non-resident investor or at all. Further,
prior to the repatriation of sale proceeds, a no objection/tax clearance certificate from the income tax
authority or the provision of an undertaking in the prescribed format along with a certificate from an
accountant would be required. We cannot guarantee that any approval will be obtained in a timely manner
or at all. Because of possible delays in obtaining requisite approvals, investors in the Equity Shares may be
prevented from realizing gains during periods of price increases or limiting losses during periods of price
declines.
47. Because our Equity Shares are quoted in Indian rupees in India, investors may be subject to potential
losses arising out of exchange rate risk on the Indian rupee and risks associated with the conversion of
Indian rupee proceeds into foreign currency.
Investors are subject to currency fluctuation risk and convertibility risk since the Equity Shares are quoted
in Indian rupees on the Indian stock exchanges on which they are listed. Dividends on the Equity Shares
will also be paid in Indian rupees. In addition, non resident investors that seek to either buy or sell Equity
Shares will have to obtain approval from RBI, unless the sale is made on one of the Stock Exchanges or in
connection with an offer made under regulations regarding takeovers. The volatility of the Indian rupee
against the U.S. dollar and other currencies subjects investors who convert funds into Indian rupees to
purchase our Equity Shares to currency fluctuation risks.
48. Holders may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares.
Capital gains arising from the sale of our Equity Shares are generally taxable in India. Any gain realized on
the sale of our Equity Shares on a stock exchange held for more than 12 months will not be subject to
capital gains tax in India if the securities transaction tax has been paid on the transaction. However, the
securities transaction tax will be levied on and collected by an Indian stock exchange on which our Equity
Shares are sold. Any gain realized on the sale of our Equity Shares held for more than 12 months to an
Indian resident, which are sold other than on a recognized stock exchange and as a result of which no
securities transaction tax has been paid, will be subject to capital gains tax in India. Further, any gain
realized on the sale of our Equity Shares held for a period of 12 months or less will be subject to capital
gains tax in India. For details please refer to section titled “Statement of Tax Benefits” beginning on page
149 of this Placement Document.
49. The Companies Act, 2013 has effected significant changes to the existing Indian company law
framework and the SEBI has introduced changes to the listing agreement, which are effective from
October 1, 2014, which may subject us to greater compliance requirements and increase our compliance
costs
50
A majority of the provisions and rules under the Companies Act, 2013 have recently been notified and have
come into effect from the date of their respective notification, resulting in the corresponding provisions of
the Companies Act, 1956 ceasing to have effect. The Companies Act, 2013 has brought into effect
significant changes to the Indian company law framework, such as in the provisions related to issue of
capital (including provisions in relation to issue of securities on a private placement basis), disclosures in
offer document, corporate governance norms, accounting policies and audit matters, related party
transactions, introduction of a provision allowing the initiation of class action suits in India against
companies by shareholders or depositors, a restriction on investment by an Indian company through more
than two layers of subsidiary investment companies (subject to certain permitted exceptions), prohibitions
on loans to directors, insider trading and restrictions on directors and key managerial personnel from
engaging in forward dealing. We may also need to spend, in each financial year, at least 2% of our average
net profits during the three immediately preceding financial years towards corporate social responsibility
activities and disclose our corporate social responsibility policies and activities on our website. As a result
of the changes brought about by the Companies Act, 2013 to the provisions relating to accounting policies,
going forward, we may also be required to apply a different rate of depreciation. Further, the Companies
Act, 2013 imposes greater monetary and other liability on our Company and Directors for any non-
compliance. To ensure compliance with the requirements of the Companies Act, 2013, we may need to
allocate additional resources, which may increase our regulatory compliance costs and divert management
attention.
The Companies Act, 2013 has introduced certain additional requirements which do not have corresponding
provisions under the Companies Act, 1956. Accordingly, we may face challenges in interpreting and
complying with such requirements due to limited jurisprudence in respect of the relevant provisions. In the
event our interpretation of such provisions of the Companies Act, 2013 differs from, or contradicts with,
any judicial pronouncements or clarifications issued by the Government in the future, we may face
regulatory actions or we may be required to undertake remedial steps. Additionally, some of the provisions
of the Companies Act, 2013 overlap with other existing laws and regulations (such as the corporate
governance norms and insider trading regulations issued by the SEBI). Recently, the SEBI issued revised
corporate governance guidelines which are effective from October 1, 2014. We may face difficulties in
complying with any overlapping requirements. Further, we cannot currently determine the impact of the
provisions of the Companies Act, 2013 or the revised SEBI corporate governance norms, which are yet to
come in force. Any increase in our compliance requirements or in our compliance costs may have an
adverse effect on our business and results of operations.
50. Political instability or changes in the Government in India or in the Government of the states where we
operate could cause us significant adverse effects.
Our Company is incorporated in India and all of our operations, assets and personnel are located in India.
Consequently, our performance and the market price and liquidity of the Equity Shares may be affected by
changes in government policies, taxation, social and ethnic instability and other political and economic
developments affecting India. The central government has traditionally exercised, and continues to exercise,
a significant influence over many aspects of the economy. Our business is also impacted by regulation and
conditions in the various states in India where we operate. Our business, and the market price and liquidity
of the Equity Shares may be affected by changes in central government policy, taxation, social and civil
unrest and other political, economic or other developments in or affecting India. Since 1991, successive
central governments have pursued policies of economic liberalization and economic reforms. However,
there can be no assurance that such policies will be continued. A significant change in the central state
government‘s policies, could adversely affect our business, financial condition and results of operations and
could cause the price of our Equity Shares to decline.
51. Terrorist attacks, civil disturbances, wars, regional and communal conflicts, natural disasters, fuel
shortages, epidemics and labour strikes in India and elsewhere in Asia may have a material adverse
effect on our Company's business and on the market for securities in India.
India has experienced civil and social unrest, terrorist attacks such as the attacks in November 2008 and
July 2011 in the city of Mumbai, and other acts of violence. If such tensions occur in places where we
operate or in other parts of the country, leading to overall political and economic instability, it could
adversely affect our business, future financial performance, cash flows and the market price of our Equity
Shares. Southern Asia has also, from time to time, experienced instances of civil unrest, political tensions
and hostilities among neighboring countries. Additionally, any of these events could lower confidence in
India’s economy and create a perception that investments in companies with Indian operations involve a
high degree of risk, which could have a material adverse effect on the price of the Equity Shares. Any
51
discontinuation of business or loss of profits due to such extraneous factors may affect our operations.
Further, our operations are dependent on our ability to protect our facilities and infrastructure from fire,
explosions, floods, typhoons, earthquakes, power failures and other similar events. India has experienced
natural disasters such as earthquakes, a tsunami, floods and droughts in the past few years.
52. Compliance with fresh and changing corporate governance and public disclosure requirements may add
compliance requirements.
Changing laws, regulations and standards relating to accounting, corporate governance and public
disclosure, SEBI regulations and Indian stock market listing regulations have increased the complexity of
our compliance obligations. These new or changed laws, regulations and standards may be subject to
varying interpretations. Their application in practice may evolve over time as new guidance is provided by
regulatory and governing bodies. Ongoing revisions to such governance standards could result in continuing
uncertainty regarding compliance matters and higher costs of compliance. Our efforts to comply with
evolving laws, regulations and standards in this regard may result in increased general and administrative
expenses and cause a diversion of management resources and time. If we fail to comply with new or
changed laws, regulations or standards, our reputation and business may be harmed.
53. Statistical and industry data in this Placement Document may be incomplete or unreliable
Statistical and industry data used throughout this Placement Document has been obtained from various
government and industry publications. We believe the information contained herein has been obtained from
sources that are reliable, but we have not independently verified it and the accuracy and completeness of
this information is not guaranteed and its reliability cannot be assured. The market and industry data used
from these sources may have been reclassified by us for purposes of presentation. In addition, market and
industry data relating to India, its economy or its industries may be produced on different bases from those
used in other countries. As a result data from other market sources may not be comparable. The extent to
which the market and industry data presented in this Placement Document is meaningful will depend upon
the reader's familiarity with and understanding of the methodologies used in compiling such data.
Further, this market and industry data has not been prepared or independently verified by us or the BRLMs
or any of their respective affiliates or advisors. Such data involves risks, uncertainties and numerous
assumptions and is subject to change based on various factors. Accordingly, investment decisions should
not be based on such information.
52
USE OF PROCEEDS
The total proceeds of the Issue will be ` 1,074.81 million. After deducting the Issue expenses of approximately `
67.51 million the net proceeds of the Issue will be approximately ` 1,007.30 million. In accordance with the policies approved by the Board of Directors from time to time and as permissible under
applicable laws and government policies, we intend to use the net proceeds of this Issue towards meeting the
likely investment requirements for various business projects among others, setting up new Fitness Centers,
acquiring the existing operating gyms and gym chains, setting up of leisure clubs, introducing Transform in
many of our existing Fitness Centers including towards capex and advertising and promotion, investments
towards alternatives to market the Reduce brand through several channels including online channels, kiosks and
other retail formats, long term resources for the capital expenditure related to our Company’s business, financing
of capital goods, investment in land and building, infrastructure, upgradation and modification of existing
Fitness Centers, investment in joint venture/ wholly owned subsidiary companies, working capital, new business
activity, general corporate purposes and for such other purposes as may be permitted by applicable regulations.
As on May 31, 2015, we have not entered into any definitive commitment or binding agreement for any material
acquisition or initiation of new business activity. Subject to review of the Audit Committee and the Board as required under the provisions of the Listing
Agreement, the management of our Company will have the flexibility in deploying the proceeds received from
this Issue. Pending utilization for the purposes described above, our Company intends to use the proceeds to
temporarily invest in credit worthy instruments, including money market mutual funds and deposits with banks
and corporates. Such investments would be in accordance with the investment policies approved by the Board of
Directors from time to time.
Our Promoters or Directors are not making any contribution either as part of the Issue or separately in
furtherance of the objects of the Issue.
53
CAPITALIZATION AND INDEBTEDNESS
The Board of Directors has at its meeting held on April 08, 2015 and shareholders vide a special resolution
passed through postal ballot dated May 12, 2015 have approved this Issue. Upon the completion of this Issue,
the Board of Directors or a committee duly authorized by them shall pass a resolution authorizing the Allotment
of the Equity Shares pursuant to this Issue.
The following table sets forth our Company’s capitalisation and total borrowings as per the Consolidated
Financial Statements as on March 31, 2015 and as adjusted to give effect to this Issue. This table should be read
with the section titled “Management’s discussion and analysis of financial condition and results of
operations” and other financial information contained in the section titled “Financial Statements” beginning on
pages 60 and 168 of this Placement Document.
Particulars Pre-Issue (as on March 31, 2015)
In ` million
As adjusted after the Issue
In ` million
Indebtedness
Long term borrowings# 2,781.95 2,781.95 Current Maturities of Long
Term Borrowings**
300.41 300.41
Short term borrowings 6.95 6.95
Total Indebtedness (A) 3,089.31 3,089.31
Shareholder’s Fund
Equity Share Capital 261.81 297.05
Reserves and Surplus1 2,506.63 3,478.69
Total Shareholder’s Funds
(B)
2,768.44 3,775.74
Total Capitalisation
(A)+(B)
5,857.75 6,865.05
# including acceptances of ` 9.44 million and excluding long term maturities of finance lease obligations of `
6.05 million
**not including current maturities of finance lease obligations of `4.58 million
¹ Reserves and surplus is net of adjustments for estimated issue expenses of approximately ` 67.51
54
CAPITAL STRUCTURE
The Equity Share capital of our Company as on the date of this Placement Document is set forth below:
No. Particulars Amount (In ` million)
Aggregate nominal value
A. Authorised Share Capital
32,000,000 Equity Shares of ` 10 each 320.00
B. Issued, Subscribed and Paid-Up Share Capital before this
Issue
26,180,888 Equity Shares of ` 10 each 261.81
C. Present Issue in terms of this Placement Document(a)
Issue of 3,523,968 Equity Shares of ` 10 each 35.24
D. Issued, Subscribed and Paid-Up Share Capital after this Issue
29,704,856 Equity Shares of ` 10 each 297.05
E. Securities Premium Account
Before this Issue 1,065.59
After this Issue(b)
2,037.65
Notes:
(a) This Issue has been authorised by the Board of Directors vide a resolution passed at its meeting held on
April 08, 2015 and by the shareholders of our Company vide a special resolution passed pursuant to
sections 42 and 62(1)(c) of the Companies Act through postal ballot results announced on May 12, 2015.
(b) The Securities Premium Account after this Issue is calculated net of adjustments for estimated issue
expenses of approximately ` 67.51 million.
NOTES TO THE CAPITAL STRUCTURE
1. History of Equity Share Capital of our Company
Date of
Allotment /
Fully Paid-up
No. of Equity
Shares allotted
Face
value
(`)
Issue Price
(`)
Nature of
consideration
Nature of Allotment
April 25, 2003 1,000 100 100 Cash Subscription to
Memorandum
June 09, 2003 1,001 100 100 Cash Further Allotment
July 15, 2003
55,000 100 100 Other than
Cash **
Further Allotment
July 15, 2003 120,000 100 100 Cash Further Allotment
March 25, 2004 17 100 100 Cash Further Allotment
January 12,
2006
12,643 100 1,581.90 Cash Further Allotment
December 07,
2007*
7,026 100 2,220.30 Cash Further Allotment
against Redemption of
Preference Shares*
Sub-division of nominal value of Equity shares of our Company from ` 100 per Equity Share to ` 10
per Equity Share vide AGM dated September 30, 2008.
October 05,
2009***
291,339 10 635 Cash Further Allotment
November 16,
2009****
15,807,463 10 NIL Other than
Cash
Bonus Issue
May 4, 2010 6,050,000 10 128 Cash Initial Public Offering
December 13,
2012
2,065,216 10 205.18 Cash Qualified Institutional
Placement
55
*Pursuant to resolution of the Board of Direction passed in their meeting held on December 07, 2007, 156,000
0.1% Optionally Convertible Cumulative Preference Shares of ` 100/- each were converted to 7,026 Equity
Shares of ` 100/- each at a premium of ` 2,120.30 per share.
**Allotment made in consideration to taking over of business of M/s. Talwalkar Health Unlimited as a going
concern, pursuant to Memorandum of Understanding dated June 30, 2003, executed between Mr. Madhukar
Vishnu Talwalkar, Mr. Prashant Sudhakar Talwalkar, Mr. Girish Madhukar Talwalkar and our Company.
However, the nature of payment of consideration has been inadvertently mentioned as for cash in form 2 filed
with RoC Mumbai.
*** The Company vide its Board Resolution dated October 05, 2009, issued 291,339 equity shares of `10 each
at a premium of ` 625 per equity share on preferential basis, including to five of its Promoters (4,000 equity
shares each) namely, Mr. Prashant Sudhakar Talwalkar, Mr. Vinayak Ratnakar Gawande, Mr. Girish
Madhukar Talwalkar, Mr. Harsha Ramdas Bhatkal and Mr. Anant Ratnakar Gawande.
**** The Company vide its Board Resolution dated November 16, 2009, issued 15,807,463 equity shares of `10
each as bonus shares to the existing shareholders in the ratio of 7 equity shares for every 1 equity share held by
them.
2. Equity Shares issued for consideration other than cash by our Company
In the last one year preceding the date of the Preliminary Placement Document, our Company has not issued
any Equity Shares for consideration other than cash.
3. Secured, Taxable, Redeemable and Non-Convertible Debentures issued by our Company:
As on May 31, 2015, our Company has following outstanding Secured, Taxable, Redeemable and Non-
Convertible Debentures which are listed on BSE:
Sr.
No
Issue price (per
security)
Face Value(per
security)
Allotment
date
Redemptio
n date
Coupo
n Rate
Per
Annu
m
Nos.
of
Secu
ritie
s
Name of
Subscriber/D
ebenture
holder
Listed
Effective
from
Security
Details
1 `.1000,000/-
(Rupees one
million only)
`.1,000,000/-
(Rupees one
million only)
January
03, 2014
03.01.2018
03.01.2019
03.01.2020
11.75
%
250 Axis Bank Ltd 21.01.14 Scrip
Code:
949795
Scrip
ID:
1175TBV
FL20
ISIN:
INE502K
07039
2 `.1,000,000/-
(Rupees one
million only)
`.1,000,000/-
(Rupees one
million only)
April 25,
2014
25.04.2018
25.04.2019
25.04.2020
11.75
%
250 Union Bank of
India
09.05.14 Scrip
Code:
950237
Scrip
ID:
1175TBV
F20A
ISIN:
INE502K
07047
56
Sr.
No
Issue price (per
security)
Face Value(per
security)
Allotment
date
Redemptio
n date
Coupo
n Rate
Per
Annu
m
Nos.
of
Secu
ritie
s
Name of
Subscriber/D
ebenture
holder
Listed
Effective
from
Security
Details
3 `.1,000,000/-
(Rupees one
million only)
`.1,000,000/-
(Rupees one
million only)
March 04,
2015
04.03.2019
04.03.2020
04.03.2021
9.80% 250 Axis Bank Ltd 13.03.15 Scrip
Code:
951764
Scrip
ID:
980TBVF
L21
ISIN:
INE502K
07054
57
MARKET PRICE INFORMATION
Our Equity Shares are listed and traded on the BSE and the NSE since May 10, 2010. As on May 31, 2015,
26,180,888 Equity Shares of face value of ` 10 each are issued, subscribed and paid up.
The closing price of the Equity Shares on the BSE and the NSE on June 16, 2015 was `303.30 and `306.45
respectively per Equity Share, respectively.
(i) The following tables set forth the reported high, low, the number of Equity Shares traded and the total trading
volume on the dates on which such high and low prices were recorded and the average closing prices of the
Equity Shares, on the BSE and the NSE for Fiscals 2013, 2014 and 2015.
BSE
Fiscal High
* (`)
Date
of
High
Numbe
r
of
Equity
Shares
traded
on
date of
high
Volum
e
on
date of
high
(` In
Millio
n)
Low
(`)
Date
of low
Number
of
Equity
Shares
traded on
date of
low
Volum
e on
date of
low
(` In
Million
)
Aver
age
price
for
the
year
(`)*
Total
numb
er of
equit
y
share
s
trade
d
Total
volum
e (` In
Millio
n)
2015 394.4
0
March
13, 2015
71,723 27.98 162.05 April 1,
2014
11,514 1.86 241.5
1
11,806,
217
3,111.03
2014 173.50 March
27, 2014
401,516 70.96 112.6
0
August
30, 2013
9,292 1.06 140.5
5
7,142,9
85
1,033.17
2013 217.35 Octobe
r 26,
2012
388,257 82.35 141.0
5
March
22, 2013
13,959 1.99 170.25 9,519,7
78
1,756.18
Source: market price information is sourced from www.bseindia.com.
*High, low and average prices are of the daily closing prices. In case the price is the same on 2 dates then the date on which the volume is higher has been considered.
NSE Fisca
l
Hig
h (`)
Date
of
High
Numbe
r
of
Equity
Shares
traded
on
date of
high
Volum
e
on
date of
high
(` In
Millio
n)
Low
*(`)
Date
of
low
Numbe
r of
Equity
Shares
traded
on
date of
low
Volum
e on
date of
low
(` In
Million
)
Averag
e
price
for
the
year
(`)*
Total
numbe
r of
equity
shares
traded
Total
volum
e (` In
Millio
n)
2015 395.8
5
March
17,
2015
191,224 76.05 162.1
5
April
1,
2014
51,790 8.39 241.69 44,944,99
5
11,707.8
2
2014 174.65
March 27,
2014
1,290,695 228.82 113.30
August 30,
2013
32,963 3.75 140.59 18,419,257
2,713.23
2013 218.20
October 26,
2012
1,132,508
239.76 141.45
March 22,
2013
30,480 4.37 170.31 2,932,204 4,578.92
Source: market price information is sourced from www.nseindia.com.
*High, low and average prices are of the daily closing prices. In case the price is the same on 2 dates then the date on which the volume is higher has been considered.
(ii) The following tables set forth the reported high, low, the number of Equity Shares traded and the total trading
volume on the dates on which such high and low prices were recorded and the average closing prices of the
Equity Shares, on the NSE and the BSE during the last six months:
58
BSE
Month High
(`)*
Date of
High
Number
of
Equity
Shares
traded
on
date of
high
Volum
e
on
date of
high
(`In
Millio
n)
Low (`)* Date of
low
Number
of
Equity
Shares
traded
on
date of
low
Volume
on
date of
low
(` In
Million)
Average
price for
the
month
(`)*
Total
number of
equity
shares
traded
Total
volume
(`In
Million)
May 2015 353.70 May 4, 2015
44,458 15.40 320.90 May 12, 2015
20,312 6.62 338.97 835,901 284.28
April 2015
366.20 April 10, 2015
38,471 14.04 327.70 April 27, 2015
12,463 4.19 349.06 557,735 196.86
March 2015
394.40 March 13, 2015
71,723 27.98 331.00 March 09, 2015
17,140 5.74 364.03 943,016 347.59
February 2015
350.30 February 19, 2015
38,277 13.26 313.90 February 12, 2015
44,433 14.06 331.15 939,553 311.02
January
2015
365.65 January
22, 2015
61,516 22.24 284.60 January
06, 2015
42,163 12.14 329.71 2,103,457 700.67
December
2014
291.95 December
31, 2014
51,552 15.15 232.85 December
04, 2014
8,513 2.00 263.97 1,605,799 435.14
Source: market price information is sourced from www.bseindia.com.
*High, low and average prices are of the daily closing prices. In case the price is the same on 2 dates then the date on which the volume is higher has been considered.
NSE
Month High
(`)*
Date of
High
number
Numbe
r
of
Equity
Shares
traded
on
date of
high
Volume
on date
of
high
(`In
Million
)
Low
(`)*
Date of
low
Numbe
r of
Equity
Shares
traded
on
date of
low
Volume
on
date of
low
(` In
Million
)
Averag
e
price
for
the
month
(`)*
Total
number
of equity
shares
traded
Total
volume
(`In
Million)
May 2015
354.50
May 4,2015
180,268 63.06 320.9
0 May 12, 2015
146,090 47.59 339.62 4,156,90
0
1,419.31
April
2015
366.5
5
April 10,
2015 137,159 49.94
327.8
0
April 27,
2015 67,219 22.51 349.79
2,956,95
8
1,044.9
5
March
2015
395.8
5
March
17, 2015 191224 76.05 330.9
March
09, 2015 60,456 20.26 364.84
41,86,32
0
1,549.6
8
February 2015
351.30
February 19, 2015
19,4495 67.66 314.5 February 12, 2015
64,997 20.58 331.70 3,270,10
8 1091.15
January 2015
364.15
January 22, 2015
192,544 69.78 286.2
5
January 06, 2015
79,704 23.14 329.85 6,374,84
1
2,112.62
December 2014
292.10
December 31,
2014
177,974 52.29 233.7
0
December 04,
2014
97,735 23.11 263.78 70,31,13
6
1,860.34
Source: market price information is sourced from www.nseindia.com.
*High, low and average prices are of the daily closing prices. In case the price is the same on 2 dates then the date on which the volume is higher has been considered.
(iii) The following table sets forth the market price on the Stock Exchanges on April 09, 2015, the first working
day following the approval of the Board of Directors for the Issue:
Dated BSE NSE
April 9, 2015 Open High Low Close Open High Low Close
Price of the Equity Shares (`) 363.00 363.00 352.00 355.40 362.50 362.90 351.60 355.30
Volume (number of equity
shares)
11,421 87,938
Source: www.bseindia.com and www.nseindia.com
59
DIVIDEND POLICY
Under the Companies Act, an Indian company pays dividends upon a recommendation by its board of directors
and approval by a majority of the shareholders, who have the right to decrease but not to increase the amount of
the dividend recommended by the board. Further, dividends may be paid out of profits of a company in the year in
which the dividend is declared or out of the undistributed profits or reserves of previous Fiscal years. Dividends are payable within 30 days of approval by shareholders at our Company's annual general meeting
which is held not later than six months from the close of the Fiscal year (or as extended for up to another three
months by permission of the Indian Government). The Articles of Association also give the Board the discretion
to declare and pay interim dividends without any shareholder approval at an annual general meeting. The dividend
so declared and approved by the shareholders is required to be deposited in a separate bank account within five
days of the date of declaration of the dividend, and the amount deposited may be used only for the payment of the
dividend. Under the Companies Act dividend can only be paid in cash to shareholders listed on the register of
shareholders including the list of shareholders submitted by National Securities Depositories Limited (“NSDL”)
or Central Depository Services (India) Limited (“CDSL”) for the shares held in electronic form on the date, which
is specified as the “record date” or “book closure date”.
The following table details the dividend paid by our Company on the Equity Shares for the Fiscal 2013 and 2014
and proposed dividend for Fiscal 2015:
Particulars Fiscal 2013 Fiscal 2014 Fiscal 2015
Face value of equity share (`) 10.00 10.00 10.00
Dividend per equity share (``) 1.50 1.50 1.50
Dividend on equity shares
(in ` Million)
39.27 39.27 39.27
Dividend rate (%) 15 15 15
Corporate dividend tax (in ` million) 6.37 6.67 7.85
The declaration and payment of any future dividends by our Company and the amount will depend upon our
Company’s results, financial position, cash requirements, future prospects, profits available for distribution and
other factors deemed by the Board of Directors to be relevant at the time. Hence, there is no guarantee that any
future dividends will be declared or paid. For a summary of certain Indian tax consequences of dividend distributions to shareholders, see the section titled
“Statement of Tax Benefits” beginning on page 149 of this Placement Document.
Certain of our financing agreements stipulate conditions to the payment of dividends by our Company. Under
certain of these agreements, we are also required to obtain the consent of our lenders to pay any dividends. For
risks relating to restrictive covenants under the loan agreements please refer to section titled “Risk Factors”
beginning on page 35 of this Placement Document.
60
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations
together with our audited financial statements prepared in accordance with paragraph B of Part II of Schedule II
to the Companies Act and SEBI Regulations, including the schedules, annexure and notes thereto and the reports
thereon on and consolidated basis for each of the Financial Years ended March 31, 2013, 2014 and 2015, in the
section titled “Financial Statements” beginning on page 168. You are also advised to read the section titled
“Risk Factors” beginning on page 35 which discusses a number of factors and contingencies that could impact
our financial condition and result of operations and cash flows. The following discussion relates to our Company
on a consolidated basis and unless otherwise stated, is based on our financial statements, which have been
prepared in accordance with Indian GAAP, the Accounting Standards and other applicable provisions of the
Companies Act and the SEBI Regulations. Our Fiscal year ends on March 31 of each year so accordingly all
references to a particular Financial Year are to the twelve months ended March 31 of that year.
Overview:
We are one of the largest fitness chains in India offering a diverse suite of services in fitness including Gym, spas,
aerobics and health counseling under the brand “Talwalkars”. “Talwalkars” has pioneered the concept of Fitness
Centers in India. Today, it is a recognized name in the health and fitness industry with a strong brand and pan
India presence, providing health and fitness solutions to all categories of customers across all age groups. As on
May 31, 2015, there are 152 Fitness Centers operating in 80 cities across 21 states serving over 155,000 members
in India.
Factors Affecting Our Results of Operations
Our financial condition and results are affected by numerous factors including the following:
Brand Image
The recognition and acceptance of our brand has significantly contributed to the success of our business. Our
business is significantly dependent on the continued establishment and promotion of our brand through which we
offer our service offerings. Promoting and positioning our brand largely depends on the success of our marketing
efforts and our ability to provide a consistent, high-quality customer experience. If we are unable to respond in a
timely and appropriate manner to changing consumer demand, our brand name and brand image may be impaired.
Competition
We believe that our Company can sustain any pressure from our direct competitors. Health and Fitness industry is
highly fragmented with presence of global, regional, local and unorganized sector players. There are different
players that compete with us in various market segments. With our long presence, vast experience and capabilities
to retain our customers with our personalized services and competitive pricing, we are confident of facing
competition.
Pricing Pressures
Since our Company is operating in a highly competitive environment and has to compete with national and
international players there is always a pressure to correctly price the services of our Company.
Consumer Demographics
India has a very large population of over 1 billion people and a very large part of the population is comprised of
middle-income consumers. Owing to GDP growth over the years, Indian consumers benefited from increases in
their level of disposable income. Health and Fitness industry has benefited from middle-income consumers the
most as it has enabled them to spend more on health, fitness, wellness and lifestyle. Besides, there are changing
attitudes among Indian consumers as they become more willing to spend their disposable income on health and
fitness products. As Indian consumers become more demanding and more discerning about health and fitness, we
will need to provide superior quality of services in order to appeal to them and this will create a need for more
creative and affordable offerings.
61
Ability to grow our number of Fitness Centers and broaden the base of our customers
Our revenues are dependent on growth in number of our Fitness Centers and the base of our customers. We
believe that our track record of quality of service has allowed us to establish long and stable relationships with
several of our customers, and we have achieved revenue growth from increased sales to our customers. We seek to
leverage our long term relationships with our existing customers to gain new customers. We also enter into
competitive pricing structures with our new customers in the initial stages of our relationship to establish the
rapport and may continue to do so in the future.
General Economic and Business Conditions
Our business performance is dependent upon national and global growth.. The structure of India’s economy has
changed over the last ten years with increasing contribution of the services sector to the GDP.
For more information on these and other factors/developments which have or may affect us, please refer to section
titled “Risk Factors”, “Industry Overview” and “Our Business” beginning on pages 35, 74 and 78, respectively.
Statement of Significant Accounting Policies:
a) Basis of preparation of Consolidated Financial Statements:
The individual Balance Sheet and Statement of Profit and Loss of Talwalkars Better Value Fitness Limited
(the “Company”) and its subsidiaries, collectively referred to as the “Group”, have been consolidated as per
the principles of consolidation enunciated in Accounting Standard (AS) 21- 'Consolidated Financial
Statements' issued by the Council of The Institute of Chartered Accountants of India. These Consolidated
Financial Statements of the Company are prepared in accordance with Generally Accepted Accounting
Principles in India (“Indian GAAP”) under the historical cost convention on an accrual basis. GAAP
comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013
(‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent
notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies
have been consistently applied except where a newly issued accounting standard is initially adopted or a
revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
b) Use of estimates:
The preparation of financial statements in conformity with Indian GAAP requires management to make
judgments, estimates and assumptions that affect the reported amounts of income and expenses of the period,
the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as at the date
of the financial statements. These estimates are based upon management’s best knowledge of current events
and actions. The difference between the actual results and estimates are recognized in the period in which the
results are known / materialized. Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognized in the year in which the estimate is revised and future years
affected.
c) Principles of Consolidation:
The Consolidated Financial Statements of Fiscal 2013 and 2014, relate to the Company, its four partially
owned subsidiaries. For Fiscal 2015 the Consolidated Financial Statements relate to the Company, its four
partially owned subsidiaries and one wholly owned subsidiary. The financial statements of the subsidiary
companies used in consolidation are drawn up to the same reporting date as of the Company.
The Consolidated Financial Statements of the Group have been prepared on the following basis:
i) The financial statements of the Company and its subsidiaries have been consolidated on a line-by-line
basis by adding together the book values of like items of assets, liabilities, income and expenses, after
fully eliminating intra-group balances and intra-group transactions resulting in unrealized profits or
losses.
ii) The Consolidated Financial Statements have been prepared using uniform accounting policies for like
transactions and other events in similar circumstances and are presented to the extent possible, in the
same manner, as the Company’s separate financial statements.
62
The subsidiaries considered in the Consolidated Financial Statements are:
Name of the
Company
Country of Incorporation % ownership interest
As at March
31, 2013
As at March 31,
2014
As at March
31, 2015
Denovo Enterprises
Private Limited
India 50.10 50.10 50.10
Equinox Wellness
Private Limited
India 33.33 * 33.33 * 33.33 *
Aspire Fitness
Private Limited
India 50.001 50.001
50.001
Jyotsna Fitness
Private Limited
India
50.10
50.10 50.10
Talwalkars Club
Private Limited
India - - 100.00
*effective ownership due to 66.67% holding of Denovo Enterprises Private Limited in Equinox Wellness
Private Limited
1) Fixed Assets:
Tangible fixed assets are stated at original cost, net of tax / duty credits availed if any, less accumulated
depreciation / amortization. Costs include all expenses incurred to bring the assets to its present location
and condition. Assets acquired by way of slump sale are recorded at book value in the books of the
transferor as on the date of transfer. Revenue expenses incurred in connection with project implementation
in so far as such expenses relate to the period prior to the commencement of commercial activity are
treated as part of the fixed assets and capitalized.
Intangible assets are recorded at the consideration paid for acquisition and are carried at cost less
accumulated amortization.
Capital work-in-progress comprises of outstanding advances paid to acquire fixed assets, and the cost of
fixed assets that are not yet ready for their intended use at the balance sheet date.
2) Depreciation/Amortization:
For Fiscal 2013 and 2014, depreciation on all fixed assets is provided pro-rata from / up to the date of
acquisition / disposal using the straight line method at the rates prescribed by Schedule XIV of the
Companies Act, 1956 and in line with the useful life of the assets. For Fiscal 2015, depreciation on all
fixed assets is provided pro-rata from / up to the date of acquisition / disposal using the straight line
method in line with the useful lives prescribed by Schedule II to the Companies Act, 2013 except one of
our subsidiary company Jyotsna Fitness Private Limited who has provided depreciation as per the
provisions of Companies Act, 1956.
3) Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement are recognized if there is a present
obligation as a result of past events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized in the financial statements but are disclosed in the notes to
accounts. Contingent assets are neither recognized nor disclosed in the financial statements.
4) Revenue Recognition:
Income from fees and subscriptions, recorded net of discounts and rebates have been recognized as
income for the year irrespective of the period, for which these are received. However, the fees receivable
from existing members as at the end of the year has been recognized as income for the year.
The costs relating to rendering of these services being unascertainable are charged off to revenue in the
year in which they become legally payable.
Input credit availed on service tax through revenue expenses paid are accounted for separately as income,
thus accounting the expenses at their gross values inclusive of service tax. Expenses on which service tax
is paid in subsequent year are booked net of the un-availed service tax at end of the year.
Income by way of franchisee fees (including up-front fees) received pursuant to franchisee agreements
entered are recognized as income of the period in accordance with terms of the agreement, and as per data
63
submitted by the franchisees.
Interest income is recognized on a time-proportion basis taking into account the amount outstanding and
the rate applicable.
Any other income i.e. from juice bar sales, consumables etc. are recognized on receipt basis since the
realizations there-from are immediate and no credit is allowed to the customers / members.
5) Impairment of Assets:
The management periodically assesses using, external and internal sources, whether there is an indication
that an asset may be impaired.
An impairment loss is charged to the Statement of Profit and Loss in the year in which the asset is
identified as impaired.
At each balance sheet date, the management reviews the carrying amounts of its assets included in each
cash generating unit to determine whether there is any indication that those assets were impaired. If any
such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of
impairment loss.
The impairment loss recognized in prior accounting periods is reversed if there has been a change in the
estimate of recoverable amount.
6) Employees benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as short
term employee benefits. Benefits such as salaries, wages, contractual labour charges and short term
compensated absences, etc. is recognized 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 the 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.
7) Borrowing Cost:
Borrowing cost incurred for qualifying assets is capitalized up to the date; the asset is ready for intended
use, based on borrowings incurred specifically for financing the asset. In determining the amount of
borrowing cost eligible for capitalization during a period, any income earned on the temporary investment
on those borrowings is deducted from the borrowing cost incurred.
Other financing / borrowing costs are charged off as revenue expenditure in the year in which they are
incurred.
8) Foreign Currency Transactions:
Exchange differences are recorded on initial recognition in the reporting currency, using the exchange rate
at the date of the transaction. At each balance sheet date, foreign currency monetary items are reported
using the closing rate.
Exchange differences that arise on settlement of monetary items or on reporting at each balance sheet date
of the Company’s monetary items at the closing rate are adjusted in the cost of fixed assets specifically
financed by the borrowings to which the exchange differences relate.
9) Taxes on Income:
Current Tax is the amount of tax payable on the taxable income for the year as determined in accordance
with the provisions of the Income Tax Act, 1961.
Deferred Taxation is recognized for all timing differences between accounting income and taxable income
and is quantified using enacted / substantial enacted tax rates as at balance sheet date. Deferred Tax asset
are recognized subject to the management’s judgment that the realization is virtually / reasonably certain.
10) Investments:
Long term investments are stated at cost, less any provision for diminution (other than temporary) in
value. Current investments are stated at lower of cost and fair value.
11) Inventories:
64
Inventories of stock-in-trade are valued at lower of cost and net realizable value.
12) Segment Reporting:
In the opinion of the management, 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.
13) Leases:
Assets taken on lease by the Group in its capacity as lessee, where the Group has substantially all the
risks and rewards of ownership are classified as finance lease. Such leases are capitalized at the inception
of the lease at lower of fair value or the present value of the minimum lease payments and a liability is
recognized for an equivalent amount. Each lease rental paid is allocated between the liability and the
interest cost so as to obtain a constant rate of interest on the outstanding liability for each year.
Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vests
with the lessor, are recognized as operating lease. Lease rentals under operating lease are recognized in
the Statement of Profit and Loss.
14) Earnings per share:
Basic and diluted earnings per share is computed by dividing the net profit or loss for the year attributable
to equity shareholders, by weighted average number of equity shares outstanding during the year.
15) Cash Flow Statement:
The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard (AS-3) on
Cash Flow Statements and presents the cash flows by operating, investing and financing activities of the
Company.
Cash and cash equivalents presented in the Cash Flow Statement consists of cash on hand, balances in
Current, Fixed deposit and Cash Credit Accounts with Bank.
16) Debenture Redemption Reserve:
For Fiscal 2013, transfer to Debenture Redemption Reserve is made pro-rata over the life of Debentures in
terms of the requirement of provisions of Companies Act, 1956. For Fiscal 2014 and 2015, transfer to
Debenture Redemption Reserve is made in terms of the requirement of Circular No. 04/2013 dated
11/02/2013 issued by the Ministry of Corporate Affairs.
Discussion on Results of Operations
Summary of our Results of Operations
All the figures discussed below are in INR Million (rounded off to the nearest 2 decimal places) and all the
percentages given below have been rounded off to the nearest 2 decimal places for the purpose of discussion.
CONSOLIDATED STATEMENT OF PROFIT AND LOSS
Particulars
Year ended 31.03.2015 Year ended 31.03.2014 Year ended 31.03.2013
Amount
(in INR
Million)
As % of
Income from
Operations
(Net)
Amount
(in INR
Million)
As % of
Income from
Operations
(Net)
Amount
(in INR
Million)
As % of
Income
from
Operations
(Net)
65
Income from Operations
2,525.60
2,094.56
1,687.83
Less: Service tax
269.05
221.83
179.31
Income from Operations
(Net)
2,256.55 100.00%
1,872.73 100.00%
1,508.52 100.00%
y-o-y growth in % 20.50% 24.14%
Less:
Changes in Inventories
0.21 0.01%
0.92 0.05%
(1.55) -0.10%
Purchase of Stock-in-Trade
- 0.00%
1.18 0.06%
2.87 0.19%
Employee Benefit Expenses
369.20 16.36%
358.61 19.15%
311.74 20.67%
Administrative & Other
Expenses
616.53 27.32%
559.04 29.85%
432.72 28.69%
Selling & Marketing Cost
25.34 1.12%
25.87 1.38%
37.03 2.45%
EBITDA
1,245.27 55.18%
927.11 49.51%
725.71 48.11%
Less:
Financial Costs
127.79 5.66%
119.66 6.39%
107.91 7.15%
Depreciation &
Amortisation Expenses
397.29 17.61%
241.77 12.91%
146.47 9.71%
Add:
Other Income
8.56 0.38%
10.77 0.58%
13.06 0.87%
Profit Before Tax
728.75 32.29%
576.46 30.78%
484.37 32.11%
Less: Tax
244.97 10.86%
178.39 9.53%
158.22 10.49%
Profit After Tax before
Extra-Ordinary Items
483.78 21.44%
398.07 21.26%
326.15 21.62%
Add: Extra-Ordinary Items
(net)
- 0.00%
(0.28) -0.01%
- 0.00%
Profit After Tax after
Extra-Ordinary Items
483.78 21.44%
397.79 21.24%
326.15 21.62%
Less: Minority Interest
23.03 1.02%
31.90 1.70%
25.65 1.70%
Profit After Tax
460.75 20.42%
365.89 19.54%
300.50 19.92%
Note: All percentages are calculated as a percentage of Income from Operations (Net of Service Tax)
CONSOLIDATED FINANCIALS:
Our Income from Operations (net of service tax) has grown at a CAGR of 22.31%, from `1,508.52 million for the
year ended March 31, 2013 to `1,872.73 million for the year ended March 31, 2014 to `2,256.55 million for the
year ended March 31, 2015.
Our EBITDA has grown at a CAGR of 30.99%, i.e. from `725.71 million for the year ended March 31, 2013 to
`927.11 million for the year ended March 31, 2014 to `1,245.27 million for the year ended March 31, 2015. Our
Profits After Tax (after extraordinary income/(loss) and Minority Interest) has grown at a CAGR of 23.82%, i.e.
from `300.50 million for the year ended March 31, 2013 to `365.89 million for the year ended March 31, 2014 to
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`460.75 million for the year ended March 31, 2015.
Our EBITDA margins have improved from 48.11% for the year ended March 31, 2013 to 49.51% for the year
ended March 31, 2014 to 55.18% for the year ended March 31, 2015. Our PAT margins have improved from
19.92% for the year ended March 31, 2013 to 19.54% for the year ended March 31, 2014 to 20.42% for the year
ended March 31, 2015.
Comparison of Fiscal 2015 with Fiscal 2014:
Income from Operations (Net)
Our net income from operations for the year ended March 31, 2015 was `2,256.55 million as against `1,872.73
million for the year ended March 31, 2014 recording a y-o-y growth of 20.5%. This growth is primarily
attributable to increase in our revenues on account of our value added services from the existing Fitness Centers.
We saw significant increase in revenues from our value added services for the Fiscal 2015; it comprised 23-24% of our net income from operations vis-à-vis 22-23% for the Fiscal 2014.
Other Income
Our other income is primarily comprised of interest on bank term deposits, other non-operating income, etc. For
the year ended March 31, 2015 our other income was `8.56 million while for year ended March 31, 2014 it was
`10.77 million.
Expenditures:
Personnel Cost
Our personnel cost for the year ended March 31, 2015 was `369.20 million, a marginal increase of 2.95% over
previous year’s figure of `358.61 million. Personnel cost declined to 16.36% of our net income from operations
for the Fiscal 2015 vis-à-vis 19.15% for the Fiscal 2014. This is primarily because of increase in our revenues
from the existing Fitness Centers.
Administrative & Other Expenses
Our administrative & other expenses for the Fiscal 2015 were `616.53 million, an increase of 10.28% over
previous year’s figure of `559.04 million. This amount is 27.32% of our net income from operations for the Fiscal
2015 compared to 29.85% for the Fiscal 2014. For the Fiscal 2015, this amount comprised mainly of ‘Rent’ of
`224.20 million and ‘Electricity & Fuel Expenses’ of `85.14 million i.e. 9.94% and 3.77% respectively of our net
income from operations.
Selling & Marketing Cost
Our selling & marketing cost for the year ended March 31, 2015 was `25.34 million, a decrease of 2.05% over
previous year’s figure of `25.87 million. This amount as a percentage of our net income from operations was
1.12% vis-à-vis 1.38% that of the previous fiscal.
EBITDA
Our EBITDA for the year ended March 31, 2015 was `1,245.27 million, an increase of 34.32% over previous
year’s figure of `927.11 million. Our EBITDA margins improved by 5.68%, i.e. it improved from 49.51% for the
Fiscal 2014 to 55.18% of our net income from operations for the Fiscal 2015. This improvement in EBITDA is
primarily on account of lower personnel costs and administrative & other expenses in Fiscal 2015 vis-à-vis the
previous fiscal.
Financial Costs
Our financial costs as a percentage of net income from operations decreased from 6.39% in Fiscal 2014 to 5.66%
in Fiscal 2015. In absolute terms, however, our financial costs for Fiscal 2015 were `127.79 million marginally
increasing from previous year’s figure of `119.66 million. During the Fiscal 2015, we issued NCDs worth `500
67
million and repaid NCDs worth ` 250 million. Our borrowings from banks also increased from ` 1,228.20 million
as at the end of Fiscal 2014 to `2,211.87 million as at the end of Fiscal 2015. Despite significant increase in
borrowings the finance costs were flat because major increase in borrowings happened to be close to the year-end,
repayment of short term borrowing were made during the year and also due to savings in NCD interest by
repayment of NCDs @ 12%worth ` 250 million and issuing fresh NCDs worth ` 250 million at a comparatively
lower rate of 9.80%
Depreciation &Amortization
Our depreciation & amortization for the year ended March 31, 2015 was `397.29 million vis-à-vis previous year’s
figure of `241.77 million, a significant increase of 64.33% in absolute terms and from 12.91% in Fiscal 2014 to
17.61% in Fiscal 2015, as a percentage of our net income from operations. This is primarily due to application of
depreciation provisions of the Companies Act, 2013 and addition of ` 378.38 million in fixed assets.
PAT (after extraordinary income/(loss) and Minority Interest)
Our profits after tax for the year ended March 31, 2015 was `460.75 million, an increase of 25.93% over previous
year’s figure of `365.89 million. Our profits after tax margins improved from 19.54% of our net income from
operations in Fiscal 2014 to 20.42% in Fiscal 2015 as depreciation cost significantly offset the improvement in
EBITDA margins.
Comparison of Fiscal 2014 with Fiscal 2013:
Income from Operations (Net)
Our net income from operations for the year ended March 31, 2014 was `1,872.73 million as against `1,508.52
million for the year ended March 31, 2013 recording a y-o-y growth of 24.14%. This growth is primarily
attributable to increase in our revenues due to addition of 14 Fitness Centers during the fiscal and on account of
our value added services from the existing Fitness Centers.
We saw marginal increase in revenues from our value added services for the Fiscal 2014; it comprised 22-23% of
our net income from operations vis-à-vis 20-22% for the Fiscal 2013.
Other Income
Our other income is primarily comprised of interest on bank term deposits, other non-operating income, etc. For
the year ended March 31, 2014 our other income was `10.77 million while for year ended March 31, 2013 it was
`13.06 million.
Expenditures:
Personnel Cost
Our personnel cost for the year ended March 31, 2014 was `358.61 million, an increase of 15.03% over previous
year’s figure of `311.74 million, primarily due to addition of 14 Fitness Centers during the Fiscal 2014. Personnel
cost however, as a percentage of our net income from operations declined to 19.15% for the Fiscal 2014 from
20.67% for the Fiscal 2013 with increase in our revenues.
Administrative & Other Expenses
Our administrative & other expenses for the Fiscal 2014 were `559.04 million, an increase of 29.19% over
previous year’s figure of `432.72 million. This amount is 29.85% of our net income from operations for the Fiscal
2014 compared to 28.69% for the Fiscal 2013. For the Fiscal 2014, this amount comprised mainly of ‘Rent’ of
`215.87 million and ‘Electricity & Fuel Expenses’ of `96.57 million i.e. 14.31% and 6.4% respectively of our net
income from operations.
Selling & Marketing Cost
Our selling & marketing cost for the year ended March 31, 2014 was `25.87 million, a decrease over previous
year’s figure of `37.03 million. This amount as a percentage of our net income from operations was 1.38% vis-à-
vis 2.45% that of the previous fiscal. This can be attributable to the Fitness Center additions during the respective
68
fiscals, i.e. 20 Fitness Centers in Fiscal 2013 vis-à-vis 14 Fitness Centers in Fiscal 2014.
EBITDA
Our EBITDA for the year ended March 31, 2014 was `927.11 million, an increase of 27.75% over previous year’s
figure of `725.71 million. Our EBITDA margins improved by 1.4%, i.e. it improved from 48.11% for the Fiscal
2013 to 49.51% of our net income from operations for the Fiscal 2014. This improvement in EBITDA is primarily
on account of lower personnel costs and marketing costs in Fiscal 2014 vis-à-vis the previous fiscal.
Financial Costs
Our financial costs as a percentage of net income from operations decreased from 7.15% in Fiscal 2013 to 6.39%
in Fiscal 2014. In absolute terms, however, our financial costs for Fiscal 2014 were `119.66 million marginally
increasing from previous year’s figure of `107.91 million. During the Fiscal 2014, our bank borrowings increased
from ` 1,220.39 million as at the end of Fiscal 2013 to ` 1,533.26 million as at the end of Fiscal 2014.
Depreciation &Amortization
Our depreciation & amortization for the year ended March 31, 2014 was `241.77 million vis-à-vis previous year’s
figure of `146.47 million, a significant increase of 65.06% in absolute terms and from 9.71% in Fiscal 2013 to
12.91% in Fiscal 2014, as a percentage of our net income from operations. This is primarily due to addition in
fixed assets of ` 899.19 million.
PAT (after extraordinary income/(loss) and Minority Interest)
Our profits after tax for the year ended March 31, 2014 was `365.89 million, an increase of 21.75% over previous
year’s figure of `300.50 million. Our profits after tax margins were 19.54% of our net income from operations in
Fiscal 2014 vis-à-vis 19.92% in Fiscal 2013 as depreciation cost offset the improvement in EBITDA margins
earned during the fiscal.
Liquidity and Cash Flow:
Cash Flows (Consolidated)
(` in million)
Particulars Year ended
March 31, 2015
Year ended
March 31, 2014
Year ended
March 31, 2013
Net cash from /(used in) Operating Activities 638.12 658.83 628.70
Net cash from /(used in) Investing Activities (981.52) (873.03) (986.41)
Net cash from /(used in) Financing Activities 748.38 52.56 381.20
Net increase in Cash & Cash Equivalents 404.97 (161.62) 23.49
Cash Flows from Operating Activities
Our net cash flows from operating activities increased from `628.70 million for the Fiscal 2013 to `658.83
million for the Fiscal 2014 and then decreased to `638.12 million for the Fiscal 2015. Our operating profit before
working capital changes was `735.35 million, `935.27 million and `1,253.32 million for the Fiscal 2013, 2014
and 2015, respectively. Our Profits after Tax (after extra-ordinary items and minority interest) was `300.50
million, `365.89 million and `460.75 million for the Fiscal 2013, 2014 and 2015, respectively. Working Capital
changes for the Fiscal 2013, 2014 and 2015 were decrease of `16.13 million, increase of `105.40 million and
increase of `340.23 million, respectively.
Cash Flows from Investing Activities
We had negative cash flows from investing activities for Fiscals 2013, 2014 and 2015 of `986.41 million, `873.03
million and `981.52 million, respectively. This has been primarily due to purchase of fixed assets and CWIP of
`1,032.60 million, `1,129.75 million and `1,368.37 million in Fiscal 2013, 2014 and 2015 respectively. This
addition of our fixed assets is primarily on account of furniture & fittings, Fitness Center equipment, etc. towards
addition of 20 Fitness Centers in Fiscal 2013 and 14 Fitness Centers in Fiscal 2014. In Fiscal 2015, the cash
69
outflows were towards purchase of land and capex of `204.06 million for the Talwalkars club project at Pune,
further capex towards furniture and fittings, Fitness Center equipments, etc. for setting up new Fitness Centers
including our 2 premium Fitness Centers, rolling out various value added services like Transform, free floor
exercises, etc. across our Fitness Centers requiring revamp and refurbishment of the existing facilities.
Cash Flows from Financing Activities
Our net cash flows from financing activities were `381.20 million in Fiscal 2013, `52.56 million in Fiscal 2014
and `748.38 million in Fiscal 2015. The cash flows in Fiscal 2014 were primarily attributable to the increase in
our short term borrowings of `300 million. In Fiscal 2015, the cash flows were primarily attributable to increase
in our long term borrowings on account of availment of new facilities for redemption of NCDs, repayment of
short term loans, takeover of existing term loans and towards capex for new Fitness Centers, including our 2
premium Fitness Centers, Talwalkars club project at Pune, renovation and refurbishment of existing Fitness
Centers.
Related Party Transactions
We have in the past engaged, and in the future may engage, in transactions with related parties. Such transactions
could be for, among other things, the purchase and sale of services, dividends, interest and remuneration. We
believe each of these arrangements has been entered into in the ordinary course of business and are on arm’s
length terms, or on terms that we believe are at least as favourable to us as similar transactions with unrelated
parties. Additional details of our related party transactions on standalone basis are as under:
Nature of transactions Subsidiaries Associates KMP
2015 2014 2013 2015 2014 2013 2015 2014 2013
Investments incl. Share
Application Money
0.10 - 5.95 - - - - - -
Incomes 7.80 7.36 9.32 - 1.39 1.39 - - -
Expenses - - - 25.80 17.67 12.60 2.56 2.25 2.42
Interest on unsecured loans - - - - - 1.15 - - -
Director's Remuneration - - - - - - 24.15 25.20 25.20
Loans repaid / (taken) net - - - - - (1.54) - - -
Loans & Advances (given)/
repaid Net
72.96 8.70 11.85 0.61 1.41 0.65 - - -
Indebtedness
Our total indebtedness on consolidated basis as on March 31, 2015 was `3,089.31 million
(` in million)
Particulars As on March 31, 2015 As on March 31, 2014 As on March 31, 2013
Long-term borrowings:
Secured 2,661.47 1,459.86 1,468.72
Unsecured 120.48 34.43 43.42
Total# 2,781.95 1,494.29 1,512.14
Current Maturities of long
term debts** 300.41 318.34 258.50
Short-term borrowings
Secured 5.43 5.06 43.17
Unsecured 1.52 302.48 -
Total 6.95 307.54 43.17
Total Borrowings 3,089.31 2,120.17 1,813.81 # including acceptances of ` 9.44 million and excluding long term maturities of finance lease obligations of `
6.05 million: **not including current maturities of finance lease obligations of ` 4.58 million
The increase in borrowings in Fiscal 2014 were primarily attributable to the increase in our short term borrowings
of `300 million. In Fiscal 2015, long term borrowings primarily comprised outstanding from State Bank of India
70
against redemption of NCDs, repayment of short term loans, takeover of existing term loans and towards capex
for new Fitness Centers and refurbishment of existing Fitness Centers. Further in Fiscal 2015, our wholly owned
subsidiary, Talwalkars Club Private Limited had an outstanding of `226.02 million from Axis Bank, primarily on
account of land purchased of `140.41 million and other capex towards club project at Pune.
Interest Coverage Ratio
Set forth below is the information in respect of our interest coverage on consolidated basis for the Fiscal 2015,
2014 and 2013:
Particulars Fiscal 2015 Fiscal 2014 Fiscal 2013
A Profit after Tax* 460.75 365.89 300.50
B Depreciation / Amortization 397.29 241.77 146.47
C Cash Profits (A+B) 858.04 607.66 446.97
D Financial Costs 127.79 119.66 107.91
E=(C+D)/D Interest Coverage Ratio 7.71 6.08 5.14
*Profit after Tax after extra-ordinary items and minority interest
Net Worth
Our net worth as on March 31, 2015 on consolidated basis is `2,768.44 million. The net worth as at March 31,
2014 and March 31, 2013 was `2,404.92 million and `2,084.97 million respectively.
Contingent Liabilities
(` in million)
Particulars As on March 31, 2015 As on March 31, 2014 As on March 31, 2013
Claim from a landlord, case
pending before the Judiciary
- Hyderabad
- Koramangala*
29.49
-
32.38
-
27.97
12.58
Claim by advertising agency# - - 0.47
Claim pending before statutory
authorities
- Income Tax
-
80.63
-
Cases pending before consumer
courts
0.20 - -
*The claim has been settled during Fiscal 2014.
#The claim has been time –barred by law in Fiscal 2014.
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 branches. 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 ` 25 million under protest. The Appeal is partly allowed and the
Company is eligible for a refund of ` 25 million paid under protest.
For further details on our financial position, assets and liabilities on consolidated basis, refer the section titled
“Financial Statements” beginning on page 168.
Capital Commitments and Advances
NIL
71
Leases
Assets taken on lease by the Group in its capacity as lessee, where the Group has substantially all the risks and
rewards of ownership are classified as finance lease. Such leases are capitalized at the inception of the lease at
lower of fair value or the present value of the minimum lease payments and a liability is recognized for an
equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a
constant rate of interest on the outstanding liability for each year.
Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vests with the
lessor, are recognized as operating lease. Lease rentals under operating lease are recognized in the Statement of
Profit and Loss.
Off Balance Sheet Arrangements
We do not have any off-balance sheet arrangements, derivative instruments, swap transactions or relationships
with unconsolidated entities or financial partnerships that would have been established for the purpose of
facilitating off-balance sheet transactions.
Quantitative and Qualitative Disclosure about Market Risk
Market risk is the risk of loss related to adverse changes in market prices, including interest rate risk, foreign
exchange risk, inflation and commodity risk. We are exposed to different degrees of these risks in the normal
course of our business.
We are specifically exposed to market risk from changes in interest rates and foreign exchange fluctuation.
Interest Rate Risk
Our financial results are subject to changes in interest rates, which may affect our debt service obligations. We
currently have floating rate indebtedness and also maintain deposits of cash and cash equivalents with banks and
other financial institutions and thus are exposed to market risk as a result of changes in interest rates. Moreover,
the interest rates on certain of our indebtedness are subject to periodic resets. Upward fluctuations in interest rates
would increase the cost of both existing and new debts. It may happen that in the current Fiscal and in future
periods our borrowings rise given our growth plans. We do not currently use any derivative instruments to modify
the nature of our exposure to floating rate indebtedness or our deposits so as to manage interest rate risk.
Foreign Exchange Risk
Fluctuations in exchange rates may have direct impact on our business to the extent of equipments that we import.
To the extent that our income and expenditures are not denominated in Indian rupees, exchange rate fluctuations
could affect the amount of income and expenditure we record. Our future capital expenditures, including
equipment and machinery, may be denominated in currencies other than Indian rupees. Therefore, declines in the
value of the rupee against such other currencies could increase the rupee cost of making such purchases. Any
depreciation of the rupee against the currency in which we have an exposure will increase the rupee costs to us of
servicing and repaying our expenditure and indebtedness.
Inflation
Although India has experienced fluctuation in inflation rates in recent years, inflation has not had a material
impact on our business or results of operation.
Analysis of other factors affecting items of income and expenditure:
1. Unusual or Infrequent Events or Transactions.
Except as described in this Placement Document, there have been no other events or transactions that, to our
knowledge, may be described as “unusual” or “infrequent”.
2. Significant economic changes that materially affected or are likely to affect income from continuing
operations.
There are no significant economic changes that materially affected our Company’s operations or are likely to
72
affect income from continuing operations except, as detailed in the preceding paragraph and as described in
the section titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” beginning on pages 35 and 60, respectively.
3. Known trends or uncertainties that have had or are expected to have a material adverse impact on
sales, revenue or income from continuing operations.
Other than as described in the section titled “Risk Factors” beginning on page 35 and as described under this
section, to our knowledge there are no known trends or uncertainties that have or had or are expected to have
a material adverse impact on our income from continuing operations.
4. Future changes in relationship between costs and revenues.
Other than as described in the section titled “Risk Factors” beginning on page 35 and as described under this
section, to our knowledge there are no future relationship between costs and revenues that have or had or are
expected to have a material adverse impact on our operations and finances.
5. The extent to which material increases in net sales or revenues are due to increased sales volume,
introduction of new products or services or increased sales prices.
Our net income from operations for the year ended March 31, 2015 was `2,256.55 million as against
`1,872.73 million for the year ended March 31, 2014 recording a y-o-y growth of 20.5%. This growth is
primarily attributable to increase in our revenues on account of our value added services.
We saw significant increase in revenues from our value added services for the Fiscal 2015; it comprised 23-24% of our net income from operations vis-à-vis 22-23% for the Fiscal 2014.
6. Total turnover of each major industry segment in which our Company operates
We operate only in one segment which has been discussed in the section titled “Industry Overview”
beginning on page 74.
7. Status of any publicly announced new products or business segment
On June 09, 2015, our Company has announced it’s intention, subject to formal documentation and necessary
statutory approvals, to create a 50:50 joint venture with David Lloyd Leisure Limited for establishing and
managing leisure clubs in India. It envisages developing 7 to 10 clubs across a number of cities in India over
the next 5 to 7 years with a planned investment of `500 crores.
8. Seasonality of Business
There is no seasonality in the business we operate.
9. Any significant dependence on a single or few suppliers or customers
We have a broad base of over 155,000 members as on May 31, 2015 and we do not have any dependence on
any single customer or a set of customers for our business.
10. Competitive Conditions
We believe that we can sustain any pressure from our direct competitors. Health and Fitness industry in India
is highly fragmented with presence of global, regional, local and unorganized players. There are different
players that compete with us in various markets. Hence reliable/verifiable data for a comprehensive analysis
of the competitive scenario is not available. However, with our long presence, vast experience and
capabilities to retain our customers due to our personalized services and competitive pricing, we are confident
of facing the competition.
Summary of reservations or qualification or adverse remarks in the auditor’s report in the last five
Financial Years immediately preceding the year of filing the Preliminary Placement Document and of their
impact on the financial statements and financial position of our Company and the correct steps taken and
proposed to be taken by our Company for each of the said reservations or qualifications or adverse remark
73
Nil
Change in Accounting Policies during the last three years and their effect on the profits and the reserves of
our Company
Nil
Recent Developments
To our knowledge, except as otherwise disclosed in this Placement document, there is no subsequent development
after the date of our financial statements contained in this Placement document which affects, or is likely to affect,
our operations or profitability, or the value of our assets, or our ability to pay our material liabilities within the
next 12 months except as mentioned below:
On May 07, 2015, the Board of Directors of TBVFL has authorised Denovo to sell its entire stake in
Equinox. As on May 31, 2015, Denovo has not sold its stake in Equinox.
On June 09, 2015, our Company has announced it’s intention, subject to formal documentation and
necessary statutory approvals, to create a 50:50 joint venture with David Lloyd Leisure Limited for
establishing and managing leisure clubs in India. It envisages developing 7 to 10 clubs across a number
of cities in India over the next 5 to 7 years with a planned investment of `500 crores.
74
INDUSTRY OVERVIEW
Unless otherwise stated, all the information in this section is derived from various publicly available documents
and government and industry sources. Neither we nor the BRLMs nor any other person connected with the Issue
have independently verified this information. The information contained herein has been obtained from sources
generally believed to be reliable, but the accuracy, completeness and underlying assumptions of this information
is not guaranteed and its reliability cannot be assured. Further, the data may have been reclassified by us for the
purpose of presentation. Accordingly, investment decisions should not be based on the information contained
herein.
Indian Fitness and Slimming Industry
The Indian Fitness & Slimming Industry is set to ride high with all levers in place. Growing disposable income of
the people coupled with rising awareness of a healthy body augur well for the Industry. Significant changes in
lifestyle related to lack of physical activity and increased consumption of fast food among both affluent and
working class population has led to greater need for healthy lifestyles Indian fitness and slimming industry is
expected to reach USD 2.4 Billion by 2015. Organized fitness services account for merely 25% of the overall
fitness industry. (Source: as per the statistics of International Chamber for Service Industry,
http://www.icsiindia.in/sectors/gym.html)
Indian fitness industry is a hugely underpenetrated market compared to several developed and developing
countries in the world. The Fitness industry in India, viz Gyms, is experiencing healthy growth rates and currently
has an estimated market size of USD 113 million. With a population of around a billion, which is growing at a
rate of about 1.7%; the age group 20-44 can be mainly identified as prime market for fitness clubs. The proportion
of people in the age group of 20-44 is projected to go up from 37% in 2006 to 39% in 2011 and 40% in 2016. This
is an addition of approximately another 4.6 crore and 4.2 crore in terms of population between 2006-11 and 2011-
16 respectively. About 16 per cent of the US population has fitness club memberships in contrast to a mere 0.4 per
cent for Indian markets in top seven cities. The numbers indicate that the industry is in a nascent stage and would
take time to evolve. (Source: as per the statistics of International Chamber for Service Industry,
http://www.icsiindia.in/sectors/gym.html)
SWOT Analysis of the Indian Fitness and Slimming Industry
(Source: as per the statistics of International Chamber for Service Industry,
http://www.icsiindia.in/sectors/gym.html)
Key Success factors for the Health & Fitness Industry:
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Many factors have contributed to the increased public awareness of health and wellness. Higher rates of heart
disease, increases in the incidence of cancer, record numbers of clinically obese people, and various other health
scares have all drawn attention to the need for healthy lifestyle choices.
Further location, availability of quality gym equipment, range of add-on facilities, skills and experience of gym
staff, membership pricing and club ambience are some of the key success factors in the industry. A fitness club
taking care of all these factors can expand its membership base very rapidly.
Rising Population: The youth population is expected to increase considerably, creating a strong
potential market for alternative source of fitness like aerobics, yoga, dance and holistic dietary regimes.
Rising Urbanization: The rate of urbanization in India is on an exponential rise. Cities hold tremendous
potential as engines of economic and social development, creating jobs and generating wealth. Almost
300 million Indians currently live in town and cities. Within 20-25 years, another 300 million people will
get added to Indian towns and cities ( Source: Planning Commission )
High Prevalence of lifestyle diseases in India : India’s unfitness is relatively visible with the clear
increase in obesity. India, with 41 million obese, ranks third after the US and China in the highest
number of overweight people in the world.
Location: A dominant driver for gym selection is convenience of location. In fitness industry, a 15-
minute driving distance in metro cities is considered as the maximum anyone would travel for a gym.
Hence, to target a particular locality, setting up a gym in near proximity is essential.
Facilities: Gym equipment like cardio, strength and free weights from reputed suppliers are an integral
part of quality service offering. Additionally, basic facilities like separate area for warm up and free style
exercise, locker rooms for customers and juice bars are necessary to create a differentiated product
offering. Advanced facilities like aerobics, spas, spinning equipment, sauna bath, massage and personal
training programs etc can help attract more members as well as enhance revenues from existing members
thus increasing profitability of the gyms.
Quality Gym staff: The most important success factor in a service industry is the quality of the service
staff. It is essential that gym trainers are knowledgeable, experienced, has good communication skills and
are soft-spoken. In absence of any accrediting body for gym trainers and instructors, a customer is quick
to form his own perception of the service levels at a particular fitness club. The ability of the local club
management to maintain the service quality levels has a major impact on a club’s success.
Viral Marketing: In a locality with more than one gym, most people make a decision of which gym to
join based on word of mouth recommendations by existing members who could be
friends/families/acquaintances. Additionally, fitness industry has a very peculiar characteristic that
enrolment often happens in groups of two or more, which could be either friends or relatives. Thus,
service quality offered to existing members has a direct and major impact on future potential of garnering
more memberships.
Price: Customers tend to look for best price and quality proposition. With the increase in spending
capacity , price is not a major constraint for today’s generation to spend on a gym providing quality
services, better equipments and value added services .
Challenges for the Health & Fitness Industry:
Lack of Standardization
The Industry faces a paucity of skilled and trained personnel. Further the industry does not have established
standards for the infrastructure facilities, trainer’s qualification, quality of services, type of equipment etc. There
are no accreditation agencies in India for regulating the quality of service offerings being offered. Thus, the
unorganized sector suffers from this customer perception of variable standards in service offering.
High cost of Equipment
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Most of the high quality gym equipments are imported. The duty structure on the imported gym equipment
inflates the cost, which leads to higher service cost for the members. Thus, majority of the industry comprising of
the unorganized gyms are not able to provide such world-class equipment.
Lack of Accredited Training Institutes
Industry is facing a shortage of properly trained and skilled professionals. There is no ready pool of trained staff
available. This is a critical problem area in a service industry which relies on knowledge, expertise and good soft-
spoken skills of the gym staff.
High real estate rentals/prices
In this sector, rental cost forms a major part of the operating cost. Real estate rentals/prices are increasing
significantly, which makes it difficult to find a suitable location for the health club. This prevents a new entrant
from ramping up and gaining scale very rapidly.
Latest trends in the Indian Fitness and Slimming Industry
Franchising
Burgeoning Investments
Innovative Formats
Training Trends
(Source: as per the statistics of International Chamber for Service Industry,
http://www.icsiindia.in/sectors/gym.html)
Upcoming Health clubs formats: The concept of ‘only for women’ fitness centers, gyms in gated communities/
high residential complexes, fitness training/ counseling at the doorstep etc are also emerging. Fitness centers have
also started renting the equipments and providing personal trainers to the health clubs in societies. The organized
players are also experimenting with opening gyms in high footfall locations like a high street or a
shopping/entertainment mall.
Focus on Corporate Sector: Some chains are also targeting the fitness needs of big corporate. Smaller corporates
with fewer employees generally opt for corporate membership at the local health club, whereas larger corporates
opt for an on-campus fitness center, managed either by the professional gym staff or by the corporate client.
Peer influence: Fitness has become a fashion statement. Celebrities and sportsmen have played a vital role in
creating awareness for a strong beautiful body and overall a healthier India. A larger audience is aspiring to be fit
and identical of their role model- thus generating demand for more health clubs in the nation. Another trend which
has picked up in recent times is competing on the physical fitness front with peers. This is creating a need for
more niche fitness services and demand for personal training.
Levels of Service and Offerings
Health clubs offer many services, and as a result the monthly membership prices can vary greatly. Costs can vary
through the purchase of a higher-level membership, such as a Founders or a Life membership. Such memberships
often have a high up-front cost but a lower monthly rate, making them potentially beneficial to those who use the
club frequently and hold their memberships for years.
A fitness centre or a gym usually consists of the following facilities:
Main workout area
Most health clubs have a main workout area, which primarily consists of free weights including dumbbells,
barbells and exercise machines. This area often includes mirrors so that exercisers can monitor and maintain
correct posture during their workout. A gym which predominately or exclusively consists of free weights
(dumbbells and barbells), as opposed to exercise machines, is sometimes referred to as a black-iron gym, after the
traditional color of weight plates.
Cardio area/Theatre
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A cardio theater or cardio area includes many types of cardiovascular training-related equipment such as rowing
machines, stationary exercise bikes, elliptical trainers and treadmills. These areas often include a number of audio-
visual displays (either integrated into the equipment, or placed on walls around the area itself) in order to keep
exercisers entertained during long cardio workout sessions
Sports facilities
Some health clubs offer sports facilities such as a swimming pools, squash courts or boxing areas. In some cases,
additional fees are charged for the use of these facilities.
Personal training
Most health clubs employ personal trainers who are accessible to members for training/fitness/nutrition/health
advice and consultation. Personal trainers can devise a customized fitness routine, sometimes including a nutrition
plan, to help clients achieve their goals. They can also monitor and train with members. More often than not,
access to personal trainers involves an additional hourly fee.
Other services
Newer health clubs generally include health-shops, snack bars, restaurants, child-care facilities, member lounges
and cafes. It is usual for a health club to provide sauna, steam shower, or wellness areas. Health clubs generally
charge a fee to allow visitors to use the equipment, courses, and other provided services. A fairly new trend is the
advent of eco friendly health clubs which incorporate principles of "green living" in its fitness regimen.
Group exercise classes
Most newer health clubs offer group exercise classes that are conducted by certified fitness instructors. Many
types of group exercise classes exist, but generally these include classes based on aerobics, cycling (spin cycle),
boxing or martial arts, high intensity training, step, regular and yoga, pilates, muscle training, and self-defense
classes. Health clubs with swimming pools often offer aqua aerobics classes. The instructors often must gain
certification in order to teach these classes and ensure participant safety.
.
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OUR BUSINESS
Some of the information contained in the following discussion, including information with respect to our growth
plans and strategies, contain forward-looking statements that involve risks and uncertainties. You should read the
section titled “Forward Looking Statements” beginning on page 13 for the risks and uncertainties related to
those statements and also the section titled “Risk Factors” beginning on page 35 for certain factors that may
affect our business, financial condition or results of operations. Our actual results may differ materially from
those expressed in or implied by these forward-looking statements.
Overview
We are one of the largest fitness chains in India offering a diverse suite of services in fitness including Gym, spas,
aerobics and health counseling under the brand “Talwalkars”. “Talwalkars” has pioneered the concept of Gyms in
India. Today, it is a recognized name in the health and fitness industry with a strong brand and pan India presence,
providing health and fitness solutions to all categories of customers across all age groups.
Our first Gym was setup in the year 1932 by late Mr. Vishnu Talwalkar in Mumbai. Mr. Madhukar Vishnu
Talwalkar, eldest son of late Mr. Vishnu Talwalkar, carried on with the legacy and started his first Gym in
Bandra, Mumbai by the name “Talwalkars Gymnasium”. Mr. Madhukar Vishnu Talwalkar has been instrumental
in creating the brand “Talwalkars” over the past several decades. Our Company, Talwalkars Better Value Fitness
Limited, was co-promoted in the year 2003 by the Talwalkars Group and the Mr. Vinayak Ratnakar Gawande,
Mr. Anant Ratnakar Gawande and Mr. Harsha Ramdas Bhatkal have with the object of developing “Talwalkars”
brand as a leader in Fitness Centers. Through the industry expertise of Mr. Madhukar Vishnu Talwalkar and
guidance of our co-promoters namely, Mr. Girish Madhukar Talwalkar, Mr. Prashant Sudhakar Talwalkar, Mr.
Vinayak Ratnakar Gawande, Mr. Anant Ratnakar Gawande and Mr. Harsha Ramdas Bhatkal, we have enhanced
our brand equity and pan-India presence.
As on May 31, 2015, there are 152 Fitness Centers operating in 80 cities across 21 states serving over 155,000
members in India. Out of these 152 Fitness Centers, 96 are managed by our Company, 14 are operated through
our Subsidiaries, 28 are operated through our franchisees which includes 9 full service Fitness Centers and 19
HiFi Gyms, 8 are NuForm exercise studios and 6 Trademark Licensed Gyms in Mumbai which are managed by
some of our Promoter Group Entities (Mr. Madhukar Vishnu Talwalkar, Mr. Girish Madhukar Talwalkar, Mr.
Prashant Sudhakar Talwalkar through their entities i.e. M/s Talwalkars (one Fitness Center), M/s Talwalkars
Health Complex (one gym), M/s Talwalkars Health and Leisure (two gyms), M/s Talwalkars Health Club (one
gym), and M/s. Talwalkars Nutrition Center (one gym).
We roll out our Fitness Centers under different formats. We follow hub and spoke model for rolling out our full
service “Talwalkars” Fitness Centers. Our Gyms under the HiFi brand are relatively of smaller formats, targeting
Tier 3 cities where “Talwalkars” Fitness Centers are not present and select Metro and Tier 1 / Tier 2 cities to
enhance our existing presence. We believe that there is a lot of potential for an affordable Fitness Center facility in
Tier 3 and Tier 4 cities and some congested pockets in larger cities. We have recently opened two premium
Fitness Centers, 1 each in Banjara Hills, Hyderabad and South Mumbai. Such premium Fitness Centers are
typically in larger formats with area ranging from 8,000 sq. ft. to 12,000 sq. ft. and would provide special
services like Wi-Fi, juice bars, coffee shops, valet parking, merchandised products, etc.
We pursue to become a holistic fitness player and constantly strive to offer innovative fitness solutions. We
provide various services including personalized fitness training, diet counseling for weight management, spa,
aerobics and spinning in our Fitness Centers. Over the years we have been widening our offerings in fitness
solutions. We launched exercise studios under the brand NuForm, an alternate fitness solution using Electric
Muscle Stimulation (“EMS”) based technology. We also introduced an alternative for weight loss through a dance
fitness program. Reduce is a weight loss solution through a customized meal plan which is available to both our
Fitness Center members and non-members through our Fitness Centers and our website. This has distinguished us
as a market leader with a strong brand to provide health and fitness solutions to all categories of customers across
all borders of age and gender.
In Fiscal 2015, we had introduced Transform which is a new combination package bringing together NuForm and
Reduce. Transform is a unique combination of weight loss and fitness model, uniting the benefits of weight
training and calorie burning. It is an effective platform to speedy transformation and this package perfectly blends
together weight loss and muscle toning to deliver overall fitness. This package provides our members luxury of
time and convenience. NuForm and Reduce effortlessly complement each other by restricting unwanted calorie
intake and burning of calories through an active form of exercise, equivalent to 4-5 days of Fitness Center
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workouts. The combination of NuForm and Reduce increases the metabolism rate consequently facilitating body
toning and weight loss. Presently, Transform is available in 10 locations and can also be provided to our
customers at their homes.
We have demonstrated a consistent growth in our business and profitability. Our Income from Operations (net of
service tax) has grown at a CAGR of 22.31%, from `1,508.52 million for the year ended March 31, 2013 to
`1,872.73 million for the year ended March 31, 2014 to `2,256.55 million for the year ended March 31, 2015.
Our EBITDA has grown at a CAGR of 30.99%, i.e. from `725.71 million for the year ended March 31, 2013 to ` 927.11 million for the year ended March 31, 2014 to `1,245.27 million for the year ended March 31, 2015. Our
PAT (after extraordinary income / (loss) and Minority Interest) has grown at a CAGR of 23.82%, i.e. from
`300.50 million for the year ended March 31, 2013 to `365.89 million for the year ended March 31, 2014 to
`460.75 million for the year ended March 31, 2015.
Our EBITDA margins have improved from 48.11% for the year ended March 31, 2013 to 49.51% for the year
ended March 31, 2014 to 55.18% for the year ended March 31, 2015. Our PAT margins have improved from
19.92% for the year ended March 31, 2013 to 19.54% for the year ended March 31, 2014 to 20.42% for the year
ended March 31, 2015
Our Competitive Strengths:
We believe that the following are our principal competitive strengths which have contributed to our current
position in the industry:
Strong Brand
Brand “Talwalkars” relates to the concept of Gym in India. Late Mr. Vishnu Talwalkar, father of one of our
promoters, Mr. Madhukar Vishnu Talwalkar, had set up his first Gym way back in 1932. Our Company owns this
brand as its registered trade name since the year 2005. We believe the long existence of our brand and the strength
of our brand equity enables us to stay ahead of competition in the industry. Today, we are one of the largest
fitness chains in India. Our brand “Talwalkars” is known for consistent, standardized and quality offerings and has
a good brand recall which helps in breaking the competitive clutter within the industry.
Market Leadership
We are one of the largest fitness chains in India. We have grown rapidly since our inception and as on May 31,
2015 we have 152 Fitness Centers in 80 cities across the country serving over 155,000 members. Our Company
has its roots in the vision of our Promoters. Mr. Madhukar Vishnu Talwalkar has been associated with this
industry for nearly five decades. While he stepped down from the position of Executive Chairman, he continues to
act as a mentor to the Company and its management. Through the industry expertise of our Promoters, we have
enhanced our brand equity and pan-India presence. Being a pioneer in the health and fitness industry, we enjoy a
significant lead over our competitors. We believe that the above factors demonstrate our leading position which
we can capitalize on to attract potential members and grow our revenues.
Pan India Presence
In a fragmented health and fitness industry, where the demand for quality services is high while the supply is
largely unorganized (primarily from single city operators) and non-standardized, we benefit immensely due to our
pan India presence. Our Company has been able to achieve a country wide footprint, which we believe may be
very difficult to replicate. We are currently present in 80 cities across 21 states of the country and we believe our
continuous expansion plans through our Talwalkars brand, HiFi Gyms and other value added services will further
enhance our brand visibility across pan India.
Diverse Service Offerings
Over the last 12 years of our existence we have dominated and led the Gymnasium business in India. In the
process we have widened the fitness concepts into areas beyond gyms and we have been constantly innovating
and expanding our offerings. We also provide spa facilities in 13 of our Fitness Centers, aerobics and spinning
facility in 30 of our Fitness Centers we also provide personalised fitness training programs and personal sessions
with our dieticians for weight management program. In our pursuit to become a holistic fitness player we are
broadening our scope of fitness solutions to our customers, be it in the form of NuForm exercise studios, Reduce,
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a customised meal plan and the recently introduced Transform. This has distinguished us as a leading player in the
industry with a strong brand and pan India presence, providing health and fitness solutions to all categories of
customers across all age groups. In the current Fiscal, we are also looking to expand our service offerings and
presence through leisure and sports clubs in high-end residential developments, gated community townships and
corporate campuses. In view of this expansion our Company has acquired land, through Talwalkars Club Private
Limited, our Subsidiary, in Wakad, Pune for setting up a health club
Standardized and Quality Offering
In an unorganized and fragmented service industry with a large untapped demand, we provide quality service
consistently across all our locations. One of the key investments in a gym is the fitness equipment. We maintain
high quality standards by procuring our equipment from reputed international manufacturers. Several other
requirements such as flooring, air conditioners, generator back up, wet area designs, etc. are benchmarked to a
model gym and quality guidelines followed and these equipments are purchased from various reputed companies.
We have a training academy at Thane where we offer a 4-6 weeks induction training for our gym trainers. This
ensures that all our gym trainers are trained to offer the same kind of services across all our locations. We believe
that this consistency factor in providing quality service across all our gyms gives us a substantial edge in this
competitive and unorganized market.
Proven Track Record
Over the last 12 years of our existence we have consistently grown the number of gyms we operate to reach 152
Fitness Centers as on May 31, 2015. Over the last 5 years, our total number of Fitness Centers has increased from
63 to 152. By achieving this level of growth we have proved our expertise to enhance our presence and our ability
to continue growing further from here, broadening our member base and revenues.
Promoters’ experience and expertise
Our Company credits its growth to the extensive experience and expertise of our Promoters who have been the
back bone of our Company. Mr. Madhukar Vishnu Talwalkar has over 50 years of experience and the Talwalkars
Group has several decades of experience in the fitness industry. Mr. Madhukar Vishnu Talwalkar is theVice
President of the Indian Body Builders Federation and is also the President of Maharashtra Body Building
Association. Similarly, Mr. Girish Madhukar Talwalkar and Mr. Prashant Sudhakar Talwalkar both have also
been associated with this industry for more than two decades. Mr. Vinayak Ratnakar Gawande, Mr. Anant
Ratnakar Gawande and Mr. Harsha Ramdas Bhatkal have varied experience in several areas of business including
finance, marketing and legal. Our Company draws on this healthy blend of expertise to manage the challenges of
growth effectively.
Our Business Strategies:
Our Company is pursuing the following growth strategies in order to expand our presence pan India:
Geographic Spread and Penetration
We continuously explore attractive business opportunities in potential locations in pursuit of enhancing our
geographic spread. We intend to increase our presence pan India by not only setting up new gyms in cities where
we already have our presence but also in other untapped cities across the country. We believe there is a potential
for growth in Tier 2 and 3 cities. We have expanded our presence in several Tier 1 and Tier 2 cities in the last few
years and we will continue to explore newer markets to tap opportunities strategically beneficial for us. We have
recently opened two premium Fitness Centers, 1 each in Banjara Hills, Hyderabad and South Mumbai. We have
also launched relatively smaller and affordable HiFi Gyms with the intention to tap opportunities in Tier 3 cities
as well also rolled out gyms in Metro and Tier 1/Tier 2 cities to enhance our existing presence. Affordability
factor of a HiFi gym membership would benefit us from this market opportunity. Our strategy lies in achieving a
distinct size and scale, covering our presence pan India.
Location Entry Strategy
We are following multiple market entry strategies to enhance our presence in the country, i.e. either directly, or
through our Subsidiaries, or through franchisee route. There are 96 Fitness Centers which are owned and managed
by our Company, 14 which operate through our Subsidiaries, 9 which operate as our franchisee Fitness Centers
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and 6 Trademark Licensed Gyms operating under the Talwalkars brand, Further, we have 19 HiFi Gyms and 8
NuForm exercise studios. We have also entered into a letter of intent for a master franchise arrangement for
opening 30 HiFi gyms on pan India basis under which currently we have 1 operating HiFI Gym. Further, we have
also entered into letters of intent to open 6 new HiFi Gyms.
Our preferred strategy is to enter a new market on our own, however, we are also constantly on the lookout for
partnering with strong local players in cities where we do not have presence presently. For instance, for our HiFi
gyms, we are expanding through the franchisee route in various cities. Hub & Spoke model will continue to
remain a strategy to enter newer locations and deepen our presence across India. We believe in having a nimble
attitude in our gym rollout strategy to ensure profitability from both, our owned as well as franchised gyms.
Continuous Broadening of Service Offerings and Increasing share of Value Added Services
We believe in keeping pace with current trends and overall customer satisfaction which allows us to attract more
members and to increase revenue potential and retain existing members. It is one of our core growth strategies to
continue to innovate and explore opportunities to broaden our service offerings within the ambit of fitness
industry. We provide value added services to our customers such as spa facilities, aerobics, spinning and health
and diet counseling. Our pursuit is to become a holistic fitness player and constantly strive to offer innovative
fitness solutions. We provide various services including personalized fitness training, diet counseling for weight
management, spa, aerobics and spinning in our gyms. Over the years we have been widening our offerings in
fitness solutions. We launched exercise studios under the brand NuForm, an alternate fitness solution using EMS
based technology. We also introduced an alternative for weight loss through a dance fitness program. Reduce is a
weight loss solution through a customized meal plan which is available to both our gym members and non-
members.
Further, in order to reach out to maximum customers and to make our services more affordable, we have recently
introduced an Equated Monthly Installment (EMI) system which allows our customers to avail our service at a
relative ease with 3, 6, 9 and 12 monthly installments. We are planning to introduce a loyalty program for our
customers where we will offer attractive offers and discounts.
Inorganic initiatives
As our growth strategy, we continue growing through roll out of our Fitness Centers and broadening our service
offerings. There are several regions in India where our Company does not have adequate number of Gyms. In
such regions, we propose to not only set up new Gyms but also acquire the existing running Gyms and gym chains
to achieve significant market presence quickly. We believe that we have achieved significant scale and size to
achieve growth through inorganic initiatives. We may explore opportunistically certain inorganic initiatives that
can give us either access to newer markets, strengthen our presence in existing markets or help us achieve a larger
scale in a relatively shorter time. We believe we may come across potential inorganic opportunities and we can
selectively evaluate such acquisition opportunities.
Setting up Talwalkar Clubs
Our Company has made progress with its plan to set up a leisure club by acquiring land for opening our first club
in Pune and commencing work on the project. Our Company sees the leisure club business as a great opportunity
in many of the markets in India due to a large gap between demand and supply and therefore, has plans to set up
several such clubs in different cities over the next few years. Our Company expects this to be of the highest
international standards and intends to tie up or work with leading international companies to ensure the same. In
this pursuit, our Company intends to enter create a 50:50 joint venture with David Lloyd Leisure Limited for
establishing and managing leisure clubs in India.
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Our Service Offerings:
GYM:
In our Gyms, we offer wide range of services to cater to our customers as per their requirements, a brief
description of which is as under:
PEP Training:
We have consistently gone through research and improvisation to design health programs that target specific
requirements of our members to help them achieve the desired results. Our teams of experts analyze, formulate
and customize the required programs for our members accordingly.PEP is for those members who require
individual attention as well as workout on specialized equipment. We have a team of trained personal trainers who
can cater to personal training regimes of different individuals. A personal trainer is assigned to each member who
enrolls for this program who monitors the specific member and keeps them motivated and also encourages such
member to achieve the desired results. The one-to-one attention given by the trainer creates a rapport between the
member and the trainer enabling the trainer to understand each member's requirements, limits and potential.
Nutrition Center:
The Nutrition Center is an inherent part of our gyms. Under Nutrition Centers we offer specialized programs like
Kiloburners, weight loss, weight maintenance and weight gain programs. Each of our Fitness Centers has 2-4
qualified dieticians working in shifts. These dieticians not only cater to overweight, obese, and underweight cases,
but also prescribe diets to customers with various health conditions such as diabetes, heart diseases, hypertension,
hypercholesterolemia, gout, etc. Dieticians, by way of diet counseling, effective diet planning and weight
monitoring, motivate our customers and guide them towards achieving their weight management goals.
- Weight Loss and Maintenance Program
Talwalkars Nutrition Center provides a simple and effective way to lose weight, which includes daily diet
counseling, gym, steam/sauna, etc. We offer two different programs i.e. a weight loss program, which targets
at losing the undesired weight and a weight maintenance program which helps to maintain the weight. The
weight loss program ranges from the 5 kgs - 1 month plan to the 30 kgs - 8 month plan. These programs are
recommended and offered to the customers only after a careful study of each customer’s medical history. In
addition to this, our Company also offers a focused weight loss and weight maintenance program under a
brand called Kiloburner in some of its gyms.
- Weight Gain Program
This program is for our customers who are underweight and desire to gain weight and achieve a healthy body
along with a good figure or physique. The program also includes diet counseling, natural high protein power
packed food supplement, massage and steam/sauna. The Nutrition Center not only brings the customer in
shape but also reforms their eating patterns and changes one’s attitude towards a healthy diet.
Other Value Added Services:
We offer other value added services at our Fitness Centers, details of which are provided below:
Spa / Massage facility
In the spas at some of our gyms, we offer therapeutic facilities and beauty correctional treatments. Additionally,
we offer a variety of passive fitness regimes through ayurveda, body touch, face touch and hair touch. Our skilled
masseurs are also trained in giving head and face massage as well as aroma therapy sessions to make our
customers feel revitalized and rejuvenated physically and mentally. A massage stimulates and peps up the entire
nervous system, improves blood circulation and rejuvenates tired and aging skin. It also has an invigorating effect
on the digestive system leading to better digestion and absorption.
Aerobics
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Aerobics is a form of physical exercise which combines dance with stretching and strengthening exercise routines.
Aerobics is a moderate exercise routines which, if performed for extended periods of time, increases one's heart
and breathing rates. It confers many health benefits such as building stamina and flexibility, apart from burning
calories very effectively. We also provide low impact aerobics, bench workout, circuit training, interval training
and cross training.
Spinning
Spinning classes are conducted in our fitness studios, with appropriate music and lighting settings to create an
energized atmosphere. The instructors guide the customers through different workout phases such as warm-up,
steady up-tempo cadences, sprints, climbs and cool-downs. Spinning is a relatively recent phenomenon, where
participants take part in group workouts on exercise bikes and each session typically lasts between 30 to 75
minutes.
Our Offerings in Fitness:
TRANSFORMING FROM A GYM PLAYER TO A FITNESS PLAYER
Dance Inspired Fitness Program
We are offering Zumba, a dance inspired fitness program at some of our Fitness Centers to our members through
trainers who are certified by Zumba Fitness, LLC. This program is a muscle strengthening, full-body cardio, body
toning, and stress relieving fitness dance style. A typical session of about one hour of this program burns 500 –
1000 calories and uses music from hip hop, soca, samba, salsa, merengue, mambo, bollywood dance, belly dance
and many more and also includes squats and lunges.
NuForm
As on May 31, 2015, we have 8 NuForm exercise studios wherein we have introduced a fitness program using the
EMS for workouts. EMS technology works on electrical impulses which targets deeper muscles resulting in
improving BMR, muscle formation and strengthening and weight loss. This machine assisted dynamic form of
activity not only helps to strengthen and tone muscles but leads to a long term exercise habit. In EMS method of
working out all muscle groups are targeted at the same time thus reducing the amount of time spent on the
workout. EMS method of work out trains the muscles in 20 minutes, just once a week. In addition, it gives the
member a great mind-body connection, training both muscular system and establishing a better neural connection
to muscle fiber.
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NuForm exercise studios are set up in affluent areas with very high visibility of Tier 1 cities. Typically set up in
an average area of about 750 sq. ft, these studios have a tasteful ambience with installed EMS technology
machines. Each studio has 2-3 EMS machines along with a nutrition counseling room. Unlike gymming, in
NuForm a customer has to work out only 20 minutes a week to get the same level of workout. NuForm has helped
us to target those customers who do not have enough time to work out in a gym or those who have health and
aging related issues. The staff in our NuForm studios is trained for four weeks in our training academy for both
operational as well as soft skills required for handling our customers.
Reduce
“Reduce” is a personalized weight loss program using diet meals, which tackle weight issue without having to
starve, do strenuous workout or spend time on cooking low calorie meals. It is a special weight reduction program
through controlled diet. This program aims at providing an easy way to reduce weight without compromising on
health. As a part of the program we provide personal counseling sessions with our dietitians and accordingly low
calorie and high fiber based food products are recommended and provided to the customers in their daily meal
plans. These diet meals are provided to the customers after carefully planning the daily menu for each customer
keeping in mind medical history and requirements. Our dieticians customize a daily diet plan which targets to fuel
the body with required nutrients and at the same time also reducing ones cravings and keep hunger away, thereby,
resulting in an effective weight loss.
Our products under the Reduce program are currently available to both our members and non members through
our Fitness Centers. As on May 31, 2015, we offer the Reduce weight loss program in over 100 of our Fitness
Centers and offer 56 products under this program. We are evaluating other alternatives to market this brand
through several channels including kiosks and other retail formats. There is currently a spurt in products and
services being purchased online and there is growing acceptance of the same. To benefit from this, we also
provide Reduce online through our website. In this manner, the Talwalkars brand can be experienced even in areas
where our Company presently does not have a Fitness Center.
Transform
Transform is a unique combination of weight loss and fitness model, uniting the benefits of weight training and
calorie burning. It is an effective platform that blends together weight loss and muscle toning to deliver overall
fitness. This package provides our members luxury of time and convenience. NuForm and Reduce effortlessly
complement each other by restricting unwanted calorie intake and burning of calories through an active form of
exercise, equivalent to 4-5 days of gym workouts. This combination increases the metabolism rate consequently
facilitating body toning and weight loss.
Our Company has introduced “Transform” in 10 Fitness Centers. Based on the response Transform has received,
we would like to roll this out nationally in the coming year through the existing Fitness Center network. This
would mean investment in consulting rooms, separate rooms for NuForm routines as well as also in advertising
and promotion to take the brand national.
Talwalkars Club
In 2012, we had entered into an agreement with David Lloyd Leisure Limited for consulting, execution,
management and operations of leisure and sports clubs in India. Our Company has made progress with its plan to
set up a leisure club by acquiring land for opening our first club in Pune and plans for construction already drawn
up. Our Company sees the leisure club business as a great opportunity in many of the markets in India due to a
large gap between demand and supply and therefore, has plans to set up several such clubs in different cities over
the next few years. Our Company expects this to be of the highest international standards and intends to tie up or
work with leading international companies to ensure the same. On June 09, 2015, our Company announced it’s
intention, subject to formal documentation and necessary statutory approvals, to create a 50:50 joint venture with
David Lloyd Leisure Limited for establishing and managing leisure clubs in India.
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Others
We offer to our members a functional training program using TRX suspension equipments that leverages gravity
and body weight to perform several exercises. Kettle Bell, another offering of our Company, combines the
benefits of dumbbells training with high intensity cardio work out.
Different Formats of our Fitness Centers:
We operate our Fitness Centers under different formats viz., the full service gyms rolled out under the Talwalkars
brand either with our 100% ownership or through our Subsidiaries or through franchisees, NuForm studios and
HiFi gyms for deeper penetration, faster rollouts and capital efficiency.
Below is a summary of our Fitness Centers Rollout Strategy:
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On May 31, 2015; the Company has a right to buy out 3 gyms operated through our Subsidiaries and 5 of our franchisee gyms;
Talwalkars Fitness Center
Our Talwalkars Fitness Center typically occupies an average area of about 5,000 sq ft. It is typically divided into
sections such as a gym hall consisting of cardio facility, free weights, physical training, massage, steam/sauna,
nutritional counseling, changing rooms with locker facility. The targets for such Fitness Centers are Metros, Tier 1
and Tier 2 cities. The entire capex for this concept is borne by our Company. We have grown diametrically
through this format with focus and control on quality maintenance and training.
In certain geographies where we want to mark our presence and have immediate access, we partner with a local
franchisee or set up gyms through a subsidiary. For gyms with this format, the capex is shared and we receive an
incremental royalty for the management of the gyms and brand usage. This can help us enhance our EBITDA
margins and increase RoCE. We also reserve the right to buy 3 of our gyms operated through our Subsidiaries and
5 of our franchisee gyms.
HiFi Gyms
Unlike a full service Talwalkars Fitness Center, a HiFi gym would typically be of smaller format, with an average
area of about 2,500 sq. ft. A HiFi gym will have all the key facilities of a full service gym including imported
fitness equipments, well trained personal trainers, air-conditioning, and generator back up and quality ambience.
A HiFi gym format enables us to penetrate Tier 3 cities and some congested pockets in larger cities, depending on
location and space availability. Considering these being franchised small format gyms, we do not incur any capex
like the usual capex of Gym. We collect an upfront fee and an annual royalty payment as an agreed share of these
Gyms’ revenues. With no capex and only franchisee income we aim to improve our RoCE. While it takes 14-16
weeks to setup a Talwalkars gym, a HiFi gym would typically be rolled out in 8-10 weeks from the time a gym
location is finalized.
Premium Fitness Centers
We have recently opened two premium Fitness Centers, 1 each in Banjara Hills, Hyderabad and South Mumbai.
Such premium Fitness Centers are typically in larger formats with area ranging from 8,000 sq. ft. to 12,000 sq. ft.
and would provide special services like Wi-Fi, juice bars, coffee shops, valet parking, merchandised products, etc.
Gym Rollout Strategy:
Gym Rollout Activity Flowchart:
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Setting up a full-service gym is a two phase process. The planning phase involves finalizing of the site location
and once this is done, it typically takes 14-16 weeks for setting up the gym.
Planning Phase
Planning phase involves identifying the city/town and short listing of a locality within the city for the proposed
gym. A few critical parameters such as income distribution, population density and demographic profile of the
local area are studied. After a detailed feasibility study, the site in the chosen area is identified. Estimates of
various revenue and cost items like lease rents for the premise, market demand, etc are made. A business plan
capturing revenue, cost projections, breakeven time, etc. is submitted to the management for discussion. If the
project looks viable, management gives an in-principle approval and the execution phase begins.
Execution Phase
From the time when the management accords its approval, it usually takes 14-16 weeks to set up a gym.
A1
A2
City and region/area identification for the proposed gym
Feasibility study based on critical parameters
Site identification in the chosen city region
Preparation of Business Plan – Revenue projections, Costing (lease rent, physical
infrastructure etc.)
In-principle management consent
Gym Rollout Flowchart - Planning Phase
A1
A2
City and region/area identification for the proposed gym
Feasibility study based on critical parameters
Site identification in the chosen city region
Preparation of Business Plan – Revenue projections, Costing (lease rent, physical infrastructure etc.) In-
principle management consent
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Stage 1:
Execution phase begins with a few critical actions. A detailed due diligence is carried out on the identified site.
Clear title and permissions/conformance with various local laws for conducting business are verified. Terms and
conditions of the lease agreement are negotiated. After the management gives a final consent, lease agreement is
signed and security deposit is paid to the concerned party.
Stage 2:
This stage involves several processes simultaneously such as:
(i) An Architect is appointed who finalizes the designs for the Gym;
(ii) Contractors for job work are appointed after evaluating quotations from few vendors.
(iii) Sourcing of Equipment: Orders are placed for gym equipment like cardio, strength and free weights.
(iv) Process of receiving utility connections is initiated.
Stage 3:
Typical expected time for shipping of equipment and completion of construction is about 7-8 weeks. Towards the
end of this period, other accessories like balance of gym equipment, generators, air conditioners etc are also
ordered. Recruitment and Training and Promotional Activities are the two most important activities in this stage.
Recruitment and Training:
Recruitment and Training for a new Gym is about a six week process. All new recruits undergo intense six week
training at our training center in Thane. A gym would typically have general trainers as well as operational staff
like branch manager and accountants. Our Company recruits local people as trainers and operational staff
requirements and train them before employing them in the gym. Apart from this, a gym can have several experts
including cardio trainer, personal trainer, dietician, fitness expert, masseur, aerobics instructor, spa therapist and
yoga trainer.
Promotional Activity:
Launch related promotional activities begin at this stage. Awareness about the gym launch in the neighborhood is
built through various media like newspaper inserts, poster, banners etc. Once the above activities are completed, it
is ensured that all the relevant business licenses according to the local by-laws are obtained. Before the gym is
fully operational and open to members, the equipments are installed and tested to ensure smooth operations.
Our Pan India Footprint:
We have grown rapidly since our inception and as on May 31, 2015, we have 152 Fitness Centers in 80 cities
across 21 states of the country serving over 155,000 members.
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Fitness Centers # of Centers
Talwalkars Gyms
Company Owned 94
Subsidiary Owned 14
Franchised 9
Premium Category Owned 2
HiFi Gyms (Franchised) 19
NuForm Exercise Studios (Owned) 8
Trademark Licensed Gyms 6
Total 152
A detailed tier-wise and region wise breakup of our presence as on May 31, 2015 is as given below:
We are a national player with presence across north, east, west and south of India. We have a strong presence in
the west of India with 56 Fitness Centers in Maharashtra and 11 Fitness Centers in Gujarat. We have penetrated
several cities and towns across India like Mumbai (34 Fitness Centers), Pune (10 Fitness Centers) and Ahmedabad
(5 Fitness Centers) in the west, Hyderabad (7 Fitness Centers), Chennai (6 Fitness Centers) and Bangalore (5
Fitness Centers) in the south, We have presence in the north and central parts of India in cities like Jaipur (5
Fitness Centers) and Faridabad, Lucknow and Indore with 2 Fitness Centers each and Kolkata (4 Fitness Centers
in the east of India. We believe that there is a considerable demand in Metros and Tier 1 cities and we
continuously try to tap this lucrative business opportunity through our full-service Talwalkars gyms. We are also
looking to penetrate aggressively into Tier 2 and Tier 3 cities and selected city suburbs through our HiFi gyms to
expand our network and make quality fitness affordable in these areas.
There are several other regions in India where our Company does not have adequate number of Gyms. In such
regions, we propose to not only set up new Gyms but also acquire the existing running Gyms and gym chains to
achieve significant market presence quickly. We believe that we have achieved significant scale and size to
achieve growth through inorganic initiatives. We may explore opportunistically certain inorganic initiatives that
can give us either access to newer markets, strengthen our presence in existing markets or help us achieve a larger
scale in a relatively shorter time. We believe we may come across potential inorganic opportunities and we can
selectively evaluate such acquisition opportunities.
Details of our pan- India presence as on May 31, 2015 is set out in the map* below:
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*Cities highlighted in red have more than one Fitness Centers. The above map is not to scale and not intended to mean
political map of India.
Our proven success in all the locations where we have presence has further strengthened our belief that we should
replicate our business model and take our Fitness Centers to other cities in India as well. We believe that the
strength of our brand coupled with our quality facilities and affordable pricing would help us to penetrate into
unexplored markets and we are in a position to implement our hub & spoke model to its complete advantage.
Our Track Record
The execution cycle of a gym comprises of several activities in close coordination. Negotiation with architects,
contractors, equipment suppliers, etc is conducted almost on a simultaneous basis. Recruitment, training,
promotional activities, etc, follow in constricted timelines. Speed and execution capabilities are of utmost essence
in executing several gyms at the same time. Our management team has consistently proven its execution track
record, which is evident from the number of gyms that we have rolled out in the past couple of years. The
following charts exhibits our growth track record of our gyms and the members we serve:
Fitness Centers rollout – Track Record
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*net additions; adjusting for closure of a Gym each located inPune and Delhi in FY13 and FY15 respectively.
As on May 31, 2015, the Company has a total of 152 Fitness Centers. There are 96 Fitness Centers which are
owned and managed by our Company, 14 which operates through our Subsidiaries, 9 which operate as our
franchisee Fitness Center and 6 Trademark Licensed gyms operating under the Talwalkars brand, Further, we
have 19 HiFi Gyms and 8 NuForm exercise studios. We have also entered into a letter of intent for a master
franchise arrangement for opening 30 HiFi gyms on pan India basis under which currently we have 1 operating
HiFI Gym. Further, we have also entered into letters of intent to open 6 new HiFi Gyms.
Other Initiatives:
Talwalkars Training Academy
We have a training academy at Thane, in order to impart training to our fitness trainers both, newly recruited as
well as the existing ones. The course duration typically ranges from 30 days – 45 days. A significant part of the
training is focused on the nuances of fitness, incorporating both practical and theoretical aspects covering weight
training, cardio vascular fitness, special cases and nutrition. On job training is provided to the recruits at various
gyms after completion of the theory classes at the academy. We also engage with international agencies to provide
both physical and theoretical training to our trainers from time to time. We intend to transform the academy into a
profit center by providing fitness certification courses to the outside trainees for a fee. Additionally, we have also
taken 9 residential flats adjoining this academy on leave and license/lease basis to accommodate 40-60 recruits at
a time during the course duration.
Corporate Segment
We have started focusing on tapping the revenue potential from the corporate segment recently. Many corporate
are increasingly focusing on ensuring general wellness of their employees. This concern is addressed by way of
having dedicated on-campus gym or indoor sports section. Smaller corporate premises which do not have these
facilities on campus are looking at subscribing to corporate membership schemes in our various Fitness Centers.
To tap this segment, we have set up a dedicated corporate sales team which deals with such clients on a pan-India
level. We can leverage our pan-India network to cater to these corporate clients who could be sitting out of
multiple locations in India. This new initiative has gathered pace and we have seen interest from prestigious
clients.
Marketing and Advertising
We are constantly looking for opportunities to promote our brand on a nationwide platform. Our Company offers
several marketing and promotional campaigns such as new year scheme, valentines scheme, women’s day scheme
and annual august scheme 2014. We have also introduced new products to help consumers stay fit and lose weight
through NuForm exercise studios and Reduce diet plan and also a newly introduced combo package named
Transform. In a country of large number of internet users, we have taken various initiatives in digital marketing,
and social media marketing. Our Company is active on various social media platforms like Facebook, Twitter and
YouTube to promote our brand and services. We have also explored various mediums like Webinars, Google,
Wikipedia and Blogs to create awareness and promote our brand and services among people. In future as well, we
will continue to look out for similar regional or national campaigns and events which can give us a stage to
showcase our brand across the country.
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We have, from time to time, carried out mega promotional campaigns and are associated with national and state
events with focus on brand building such as:
Sponsorship and stall at 6th
World Body Building & Physique Sports Championship;
Losers Challenge 2014;
Pinkathon – tie-up to create awareness about breast cancer 2014
Social Initiatives carried out by us such as Talwalkars Fitness Awareness Camp, World Environment
Day, World Health day, World Heart Day, World Diabetes Day, Anti Obesity Day; World No Tobacco
Day etc.
Talwalkars Classique 2013 organized by our Company and Maharashtra Body Building Association,
under the aegis of Indian Body Builders Federation
Corporate Social Responsibility (“CSR”)
Our Company‘s CSR Policy was adopted in November 06, 2014 in accordance with Section 135 of the
Companies Act, 2013, Companies (Corporate Social Responsibility Policy) Rules, 2014 and Schedule VII of the
Companies Act, 2013. The objective of the CSR Policy is to set guiding principles for carrying out CSR activities
by the Company and also to set up process of execution, implementation and monitoring the CSR activities to be
undertaken by the Company.
The Companies Act, 2013 introduced provisions relating to CSR, pursuant to which our Company is required
tospend, in each financial year, at least 2% of its average net profits during the three immediately preceding
financial years towards one of the specified CSR activities. As required by the Companies Act, 2013, our
Company is required to spend `7.55 million on the CSR activities during the Fiscal 2015. During Fiscal 2015, our
Company has already spent an amount of `2.5 million towards various CSR activities like sponsorship of classical
Indian music concerts, donations to educational institutes, charitable foundations, fitness championships, chamber
of commerce and industry. There is a provision in our accounts for the balance obligation.
Our Company may undertake the CSR activities through a registered trust or society or any company, established
by our Company, its holding or subsidiary company under Section 8 of the Companies Act for such non profit
objectives.
Our Subsidiaries
Wholly-Owned Subsidiary
Step-down Subsidiary
Denovo Enterprises Private Limited (“Denovo”)
Denovo Enterprises
Private Limited
(50.10%)
Aspire Fitness
Private Limited.
(50.00%)
Equinox Wellness
Private Limited
(66.67%)
Jyotsna Fitness
Private Litmited
(50.02%)
TBVFL
Talwalkars Club
Private Limited.
(100%)
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Denovo was incorporated on February 08, 2005 as a private limited company, vide Certificate of Incorporation
issued by the Registrar of Companies, Maharashtra, Mumbai. The Company Identification Number of Denovo is
U55100MH2005PTC151128.
Our Company and Palestra Enterprises Limited (“Palestra”) held 50% equity shares each in the joint venture
company, Denovo, which was incorporated pursuant to Memorandum of Understanding (MoU) dated November
14, 2005 and Shareholders Agreement dated August 10, 2006 between our Company, Palestra, Ms. Apurva
Shanghavi, Mr. Rajesh Mehta and Mr. Vipul Doshi. Denovo became our Company’s subsidiary pursuant to the
resolution passed by the Board of Directors of our Company at their meeting held on October 28, 2010. As on
May 31, 2015 our Company holds 50.10% equity stake in Denovo.
As on May 31, 2015 Denovo operates four Fitness Centers i.e. one each in Indore, Jamnagar, Bhavnagar and
Gandhinagar.
Equinox Wellness Private Limited (“Equinox”)
Equinox was incorporated on June 08, 2004 as a private limited company vide Certificate of Incorporation issued by
the Registrar of Companies, West Bengal. The CIN of Equinox is U85199MH2004PTC211696. Equinox became our
step down subsidiary with effect from October 28, 2010, following increase in our equity holding in Denovo. As
on May 31, 2015, Denovo holds 66.67% of equity shares in Equinox. As per the terms of the Share Subscription
Agreement dated August 24, 2006, Denovo shall have the right to buy equity shares held by other shareholders in
Equinox at any time.
As on May 31, 2015 Equinox operates one Fitness Center in Kolkata. On May 07, 2015, the Board of Directors of
TBVFL has authorised Denovo to sell its entire stake in Equinox. As on May 31, 2015, Denovo has not sold its
stake in Equinox.
Aspire Fitness Private Limited (“Aspire”)
Aspire was incorporated on December 05, 2009 as a private limited company vide Certificate of Incorporation
issued by the Registrar of Companies, Maharashtra, Mumbai. The CIN of Aspire is U85100MH2009PTC197625.
Aspire was incorporated pursuant to Memorandum of Understanding dated November 5, 2009 (MoU) and
Shareholders Agreement dated April 26, 2010 (SHA) between our Company and Life Fitness India Private
Limited (“LFIPL”) as joint venture company with 50% equity stake between Company and LFIPL each. Aspire
became our Company’s subsidiary pursuant to the resolution passed by the Board of Directors of our Company at
their meeting held on October 28, 2010. As on May 31, 2015 our Company holds 50.001% equity stake in
Aspire. As per the terms of MoU and SHA, our Company shall have the right to acquire shares from LFIPL in
Aspire in full or in part at the sole discretion of our Company at any time after March 31, 2013.
As on May 31, 2015 Aspire operates 6 Fitness Centers in Pune.
Jyotsna Fitness Private Limited (“Jyotsna”)
Jyotsna was incorporated on July 05, 2011 as a private limited Company vide Certificate of Incorporation issued
by the Registrar of Companies, Maharashtra, Mumbai, with Mr. Vishwas Shinde and Mrs. Jyotsna Shinde as the
original shareholders. The CIN of Jyotsna is U85190MH2011PTC219468. Jyotsna became a subsidiary of our
Company pursuant to the resolution passed by the Board of Directors of our Company at their meeting held on
November 14, 2011. As on May 31, 2015 our Company holds 50.10% equity stake in Jyotsna.
As on May 31, 2015 Jyotsna operates 3 Fitness Centers i.e. one each in Nanded, Jalgaon and Navi Mumbai.
Jyotsna also has one more property at Amravati which is not operational as on May 31, 2015.
Talwalkars Club Private Limited (“TCPL”)
TCPL was incorporated on March 21, 2014, vide Certificate of Incorporation issued by the Registrar of
Companies, Maharashtra, Mumbai. The CIN of TCPL is U93000MH2014PTC254851. TCPL became wholly-
owned subsidiary of our Company pursuant to the resolution passed by the Board of Directors of our Company at
their meeting held on May 08, 2014. TCPL will be setting up a sports and recreation health club in Pune offering
activities like gym, sports training, swimming pool, racquet sports, restaurants, banquet hall, and entertainment
zone. With the parent entity TBVFL engaged in operating Fitness Centers, catering to lower and middle income
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group through its large format and affordable gyms (HiFi Franchisees), TCPL is a logical extension from Fitness
Centers to health and recreation centers for the Talwalkars Group.
As on May 31, 2015, TCPL is not carrying on any business activities.
Human Resources
We have a residential training academy at Thane, where all our potential gym staff undergoes intense six week
training in soft skills and service delivery. We view this process as a necessary tool to maximize the performance
of our employees. We have policy of hiring fresh graduates. Our workforce consists of (i) permanent employees,
(ii) contractual staff and (iii) fitness experts.
Permanent Employees: We have core team of managers which is involved in identifying potential new locations
and overall project management of the expansion projects. We conduct periodic reviews of our employee’s job
performance and determine salaries and discretionary bonuses based upon these reviews. In addition, we offer
internal training programs tailored to different job requirements to enhance our employees’ talents and skills. As
on May 31, 2015 we had 17 permanent employees.
Contractual Staff: The staff at the gym is on the payrolls of various agencies with whom we have exclusive
arrangement for sourcing the manpower. All the general trainers and operational managers are sourced from these
agencies. Our Company offers an incentive by way of certain percentage of revenues on the achievement of
targets by the branch staff. Reputed hospitality service providers are engaged to maintain good ambience and
hygiene in our Fitness Centers. As on May 31, 2015 we had about 4000 staff on contractual basis including over
1,700 fitness experts.
Fitness Experts: We also utilize the services of professionals for add-on services like spa, massage, personal
training, etc. on revenue sharing basis. Our Company does not pay them a fixed salary, but shares with them a
certain percentage of the fee charged to a customer. As on May 31, 2015 we had over 1,700 fitness experts.
Our Trademark Licensed Gyms
As on May 31, 2015 there are 6 Gyms that are managed by some of our Promoter Group Entities i.e. M/s Talwalkars (one gym), M/s Talwalkars Health Complex (one gym), M/s Talwalkars Health and Leisure (two gyms), M/s Talwalkars Health Club (one gyms), and M/s. Talwalkars Nutrition Center (one gym).
Further, our Company has entered into a Trademark License Agreement with some entities permitting them to use
our licensed Trademark “Talwalkars” as a logo and our trade name for marketing, promotion and advertisement
on a non-transferable and royalty-free basis along with other terms and conditions stipulated in the Trademark
License Agreements, the list of which is as under:
1. M/s. Talwalkars Health Complex (partnership firm) dated November 13, 2009; 2. M/s. Talwalkars (partnership firm) dated November 13, 2009;
3. M/s. Talwalkars Health Club (proprietary undertaking) dated November 13, 2009; 4. M/s. Talwalkars Health and Leisure (partnership firm) dated November 13, 2009;
5. M/s Talwalkars Nutrition
Our Franchisees:
We believe in partnering with strong local players with good management record in entering newer areas. As on May 31, 2015, we have 28 franchised Fitness Centers which include 19 HiFi Gyms and 9 Talwalkars Fitness Centers.
Our Properties
Our Registered Office is situated at 801-813, Mahalaxmi Chambers, 22 Bhulabhai Desai Road, Mumbai 400 026
which has been taken from one of our Group Companies i.e. Gawande Consultants Private Limited through an
arrangement dated April 02, 2015, whereby we have been permitted to use the premise for a period of 12 months
from the date of this arrangement and such further period as mutually agreed between the parties.
Summary of our owned and leave and license/lease agreements with respect to our operational Fitness Centers and
other properties as on May 31, 2015 are set out below:
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Description of Properties
No. of
Properties
A . Properties for Fitness Centers
i Properties Owned By Company
Owned and Operated by the Company 7
Owned and Operated by the Franchise 1
ii Properties taken on Lease / Leave and License By the Company 97
iii Properties taken on Lease/ Leave and License by Subsidiaries
Denovo Enterprises Private Limited 4
Equinox Wellness Private Limited 1
Aspire Fitness Private Limited 6
Jyotsna Fitness Private Limited * 4
B. Land owned by Talwalkars Club Private Limited 1
C Training Academy
Training Center 1
Guest House 9
Staff Canteen 1
D Others
Guest Houses 4
Offices (including our registered office) 6
Godown 1 *This property includes one property at Amravati which is non –operational as on May 31, 2015.
Intellectual Property Rights As on May 31, 2015, our Company has 23 trademarks and logos registered in its name under various classes. Further, we have made 36 applications for registration of various trademarks and logos before the Trademarks Registry which are currently pending for registration. We have the copyrights registrations for our logos “Talwalkars”, Reduce” and “NuForm”. Additionally, we have also applied for copyright registration of our logos for “Transform” and “HI FI” before the Registrar of Copyrights. For risk relating to our intellectual property, please refer to section titled “Risk Factors” beginning on page 35 and “Legal Proceedings” beginning on page 159 of this Placement Document.
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REGULATIONS AND POLICIES
The following description is a summary of certain relevant regulations and policies applicable to our Company in
India and other regulatory bodies that are applicable to our Company. The information detailed below has been
obtained from various legislations, including rules and regulations promulgated by regulatory bodies, and the bye
laws of the respective local authorities that are available in the public domain. The information below are based
on the current provisions of law in India, and the judicial and administrative interpretations thereof, which are
subject to change or modification by subsequent legislative, regulatory, administrative or judicial decisions. The
laws set out herein below and their description are not exhaustive, and are only intended to provide general
information to Investors and is neither designed nor intended to be a substitute for professional legal advice.
LABOUR AND INDUSTRY LAWS State specific Shops and Commercial Establishments Acts as applicable Under various Central and State laws dealing with shops and establishments, any shop or commercial
establishment has to obtain a certificate of registration from the supervising inspector and also has to comply with
certain rules laid down in the act governing that particular State. These rules and regulations regulate the opening
and closing hours of shops and commercial establishments, daily and weekly work hours, closing dates and
holidays, health and safety of persons working in shops and commercial establishments, payment of wages and
maintenance of records and registers by the employers, among others. Our Company is governed by various Shops and Establishment Acts as applicable in the states where we have
gyms and training centers. The following among other are the acts and rules and regulations there under are
applicable to our gyms and training centers. The Andhra Pradesh Shops and Establishments Act, 1988;
The Andhra Pradesh Factories and Establishments (National, Festival and other Holidays) Act, 1974;
The Assam Shops and Establishments Act, 1971;
The Bombay Shops and Establishments Act, 1948;
The Karnataka Shops and Commercial Establishments Act, 1961;
The Madhya Pradesh Shops and Establishments Act, 1958;
The Orissa Shops & Commercial Establishments Act, 1956
The Punjab Shops and Commercial Establishment Act, 1958;
The Uttar Pradesh Shops and Commercial Establishments Act, 1962;
The West Bengal Shops and Commercial Establishment Act, 1963;
The Rajasthan Shops and Commercial Establishment Act, 1958;
The Tamil Nadu Shops and Establishment Act 1947;
The Mumbai Municipal Corporation Act 1888;
The Karnataka Municipal Corporation Act 1976;
The Haryana Municipal Corporation Act 1955;
The New Delhi Municipal Council Act 1994;
The Kerala Shops and Commercial Establishments Act 1960;
The Uttrakhand Shops and Commercial Establishments Act, 1962
The Pondicherry Shops and Establishments Act, 1964;
The Tamil Nadu Fire Services Act 1985;
The Tamil Nadu Industrial Establishments (National and Festival Holidays) Act 1958; and
The Telangana Shops and Establishments Act, 2014
LABOUR LAWS
Contract Labour (Regulation and Abolition) Act, 1970 The Contract Labour (Regulation and Abolition) Act, 1970, as amended (“CLRA”), requires establishments that
employ or have employed on any day in the previous 12 months, 20 or more workmen as contract labour to be
registered and prescribes certain obligations with respect to the welfare and health of contract labour. In the
absence of registration, contract labour cannot be employed in the establishment. Likewise, every contractor to
whom the CLRA applies is required to obtain a license and not to undertake or execute any work through contract
labour except under and in accordance with the license issued. In order to ensure the welfare and health of the
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contract labour, the CLRA imposes certain obligations on the contractor including the establishment of canteens,
rest rooms, drinking water, washing facilities, first aid facilities, other facilities and payment of wages. CLRA also
levies penalties, including imprisonment, for contravention of any of its provisions. Employee’s State Insurance Act, 1948 Employees State Insurance Act, 1948 (“ESI Act”) provides for certain benefits to employees in case of sickness,
maternity and employment injury. All employees in establishments covered by the ESI Act are required to be
insured, with an obligation imposed on the employer to make certain contributions in relation thereto. In addition,
the employer is also required to register itself under the ESI Act and maintain prescribed records and registers. Equal Remuneration Act, 1976 (“Equal Remuneration Act”) The Constitution of India provides for equal pay for equal work for both men and women. To give effect to this
provision, the Equal Remuneration Act was implemented. The Equal Remuneration Act provides that no
discrimination shall be shown on the basis of sex for performing similar works and that equal remuneration shall
be paid to both men and women when the same work is being done. Maternity Benefit Act, 1961 (“Maternity Benefit”)
Maternity Benefit provides that a woman who has worked for at least 80 days in the 12 months preceding her
expected date of delivery, is eligible for payment of maternity benefits. Under the Maternity Benefit Act, a woman
working in an establishment as defined under Maternity Benefit may take leave for six weeks immediately
preceding her scheduled date of delivery and for this period of absence she must be paid maternity benefit at the
rate of the average daily wage. The maximum period during which a woman shall be paid maternity benefit is 12
weeks. Women entitled to maternity benefit are also entitled to a medical bonus of `. 2,500, if no prenatal and
post-natal care has been provided free of charge by the employer.
Minimum Wages Act, 1948 (“Minimum Wages Act”) Minimum Wages Act provides for minimum rate for payment of wages to the employers under employment. The
Act enables the State governments to stipulate the minimum wages applicable to a particular industry situated
within its State. The minimum wages may consist of a basic rate of wages and a special allowance; or a basic rate
of wages and the cash value of the concessions in respect of supplies of essential commodities; or an all-inclusive
rate allowing for the basic rate, the cost of living allowance and the cash value of the concessions, if any. Wages
Act also levies penalty including fines and imprisonment on employer for contravention of the provisions of
Wages Act. Payment of Wages Act, 1936 The Payment of Wages Act, 1936 is a central legislation which applies to the persons employed in the factories
and to persons employed in industrial or other establishments specified in the Act. This Act has been enacted with
the intention of ensuring timely payment of wages to the workers and for payment of wages without unauthorized
deductions
Workmen's Compensation Act, 1923 (“WCA”) WCA has been enacted with the objective to provide for the payment of compensation to workmen by employers
for injuries by accident arising out of and in the course of employment, and for occupational diseases resulting in
death or disablement. WCA makes every employer liable to pay compensation in accordance with the WCA if a
personal injury/disablement/loss of life is caused to a workman (including those employed through a contractor)
by accident arising out of and in the course of his employment. In case the employer fails to pay compensation
due under the WCA within one month from the date it falls due, the commissioner appointed under the WCA may
direct the employer to pay the compensation amount along with interest and may also impose a penalty. INTELLECTUAL PROPERTY Copyright Act, 1957
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Our gyms and training centers also require a license for playing music under the provisions of the Copyright Act,
1957 (“Copyright Act”). The Copyright Act covers registration of copyrights of original literary, dramatic,
musical and artistic works, cinematographic films and sound recordings. A copyright board has been constituted
under the Copyright Act, which ordinarily hears all proceedings instituted before it under the Copyright Act.
Licensing and assignment of copyright is permitted in accordance with the provisions of the Copyright Act.
Infringement of copyright may amount to either a civil or criminal offence, depending on the circumstances in
which the offence was committed. We have also obtained licenses from Indian Performing Right Society Limited
(IPRS) and Public Performance Licenses from Phonographics Performance Limited for playing music in our
gyms. The society is a non-profit making Organisation and is a company limited by guarantee and registered
under the Companies Act, 1956. It is also registered under Section 33 of the Copyright Act, 1957 as the only
copyright society in the Country to do business of issuing Licenses for usage of Music. In other words, IPRS is the
only National Copyright Society in the Country which is permitted to commence and carry on the Copyright
Business in Musical Works and any Words or any Action intended to be sung, spoken or performed with the
music. Trade Marks Act, 1999 Our brand names are also required to be registered under the Trademarks Act, 1999 (“Trademark Act”). The
Trademark Act governs the statutory protection of trademarks in India. In India, trademarks enjoy protection
under both statutory and common law. Indian trademark law permits the registration of trademarks for goods and
services. Certification marks and collective marks can also be registered under the Trademark Act. An application
for trademark registration may be made by individual or joint applicants and can be made on the basis of either
use or intention to use a trademark in the future. Applications for a trademark registration may be made for in one
or more international classes. Once granted, trademark registration is valid for ten years unless cancelled. If not
renewed after ten years, the mark lapses and the registration would then have to be restored. Our Company is also
required to comply with local/municipal regulations in respect of each of its gyms and training centers as given
below. LAND LAWS
Transfer of Property Act, 1882 (“TOPA”) TOPA establishes the general principles relating to the transfer of property including, amongst other things,
identifying the categories of property that are capable of being transferred, the persons competent to transfer
property, the validity of restrictions and conditions imposed on the transfer and the creation of contingent and
vested interest in the property. The transfer of property, as provided under TOPA, can be through various modes
such as sale, gift etc., while an interest in the property can be transferred by way of a lease or mortgage. FISCAL REGULATIONS In accordance with the Income Tax Act, 1961 any income earned by way of profits by a company incorporated in
India is subject to tax levied on it in accordance with the tax rate as declared as part of the annual Finance Act.
Our Company, like other companies, avails of certain benefits available under the Income Tax Act, 1961. For
details of the tax benefits, please refer to the section titled “Statement of Tax Benefits” beginning on page 149 of
this Placement Document. Income Tax Act, 1961 (“IT Act”)
Depending upon the residential status and the kind of revenue taxable under the IT Act and the Rules made
thereunder, every company assessable under the IT Act is required to register themselves under the IT Act and
comply with the relevant provisions thereof, including but not limited those relating to Tax Deduction at Source,
Advance Tax and Minimum Alternative Tax.
Service tax Service tax is charged on “taxable services‟ as defined in Chapter V of Finance Act, 1994, which requires a
service provider of taxable services to collect service tax from the recipient of such services and pay such tax to
the Government. According to Service Tax Rules, every assessee is required to pay return of service tax on
monthly basis and the company is liable to file return of service taxes on half yearly basis.
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Value added tax (“VAT”) VAT is a system of multi-point levy on each of the entities in the supply chain with the facility of set-off input tax
whereby tax is paid at the stage of purchase of goods by a trader and on purchase of raw materials by a
manufacturer. Only the value addition in the hands of each of the entities is subject to tax. VAT is based on the
value addition of goods and the related VAT liability of the dealer is calculated by deducting input tax credit for
tax collected on the sales during a particular period. VAT is essentially a consumption tax applicable to all
commercial activities involving the production and distribution of goods. Certain States and Union territories of
India has introduced their own VAT Act, under which, entities liable to pay VAT must register themselves and
obtain a registration number.
OTHER APPLICABLE LEGISLATIONS Food Safety and Standards Act, 2006 (“FSSA”) The Food Safety and Standards Act, 2006 (“FSS Act”) provides for the establishment of the Food Safety and
Standards Authority of India, which establishes food safety standards and the manufacture, storage, distribution,
sale and import of food. It is also required to provide scientific advice and technical support to the Government of
India and Indian state governments in framing the policy and rules relating to food safety and nutrition. The FSS
Act also sets forth requirements relating to the license and registration of food businesses, general principles for
food safety, responsibilities of food business operators and liability of manufacturers and sellers, and provides for
adjudication of such issues by the Food Safety Appellate Tribunal.
Indian Electricity Rules, 1956 The Indian Electricity Rules,1956 are framed under Section 37 of the Indian Electricity Act, 1910 to regulate the
supply, transmission, generation, and use of electricity. These are primarily necessary measures required to be
adopted in construction, installation and maintenance of transmission, distribution, generation and use of
electricity and precautions to be observed in carrying out any work in relation to such installations to avoid any
sort of electrical accident.
Indian Stamp Act, 1899 Stamp duty in relation to certain specified categories of instruments, as specified under Entry 91 of the Union list,
are governed by the provisions of the Indian Stamp Act, 1899 (the “Stamp Act”) which is enacted by the
Government of India. Certain states in India have enacted their own legislation in relation to stamp duty, while the
other states have amended the Stamp Act, as per the rates applicable in the state. The stamp duty in relation to the
lease or conveyancing of any immovable property is prescribed by the respective states in which the land is
situated and it varies from state to state. Instruments, which are not duly stamped, are incapable of being admitted
in court as evidence of the transaction contained therein. Further, the state government also has the power to
impound insufficiently stamped documents.
Legal Metrology Act, 2009 (“Metrology Act”) Metrology Act, was brought into force vide notification, dated December 31, 2010, issued by the Ministry of
Consumer Affairs, Food and Public Distribution, Government of India, replacing the Standard of Weights and
Measures Act, 1976 with effect from March 1, 2011. The Metrology Act was enacted with the purpose to
establish and enforce standards of weights and measures and regulate trade and commerce in weights, measures
and other goods, which are sold or distributed by weight, measure or number.
Registration Act, 1908 (“Registration Act”) Registration Act has been enacted with the object of providing a method of public registration of documents so as
to give information to people regarding legal rights and obligations arising or affecting a particular property. The
Registration Act also mentions the documents that require compulsory registration which includes, amongst other
things, any non-testamentary instrument which purports or operates to create, assign, limit or extinguish, any
right, title or interest in an immovable property of the value of `100 or more, and a lease of immovable property
for any term exceeding 11 months or reserving a yearly rent. An unregistered document, which as per the
provisions of the Registration Act requires compulsory registration, will not affect the property comprised in it,
nor will it be treated as evidence of any transaction affecting such property (except as evidence of a contract in a
100
suit for specific performance or as evidence of part performance under the TP Act or as collateral), unless it has
been registered.
101
BOARD OF DIRECTORS AND SENIOR MANAGEMENT
Our Board of Directors is responsible for our overall management and supervision of our Company. Our
Chairman and Whole time Directors are responsible for our day-to-day management under the direction and
control of our Board of Directors. As on the date of this Placement Document, our Board of Directors comprises of thirteen (13) Directors, of which
six (6) are Whole-time Directors and six (6) are Independent Directors and one (1) Additional Director. The
composition of our Board of Directors is governed by the provisions of the Companies Act and the Listing
Agreement with the Stock Exchanges and the norms of the code of corporate governance as applicable to listed
companies in India. The Companies Act, 2013, provides that not less than two-thirds of the total number of directors, excluding the
independent directors, shall be liable to retire by rotation. One-third of the directors shall automatically retire
every year at the annual general meeting and shall be eligible for re-appointment. The directors to retire by
rotation shall be decided based on those who have been longest in office, and as between persons appointed on the
same day, the same shall be decided by mutual agreement or by draw of lots. The independent directors may be
appointed for a maximum of two terms of up to five consecutive years; however, such directors are eligible for re-
appointment after the expiry of three years of ceasing to be an independent director (whether or not each term is
for a period of five years) provided that such directors are not, during the three year period, appointed in or
associated with the company in any other capacity, either directly or indirectly. Any reappointment of independent
directors, inter alia, shall be on the basis of performance evaluation report and requires the approval of the
shareholders by way of a special resolution. None of the Directors on the Board of Directors of our Company are
members of more than ten committees or chairman of more than five committees across all the public companies
in which they are directors.
Our Board of Directors
The following table sets forth details regarding the Board as on the date of this Placement Document:
Sr.
No.
Name, Address, Designation, Occupation,
DIN, Term and Nationality
Age (in
years)
Other Directorships
1. Mr. Girish Madhukar Talwalkar
Address: D-22, New Juhu, Park Co-
operative Housing Society, 3rd floor, Opp.
ISKON Temple, Juhu, Mumbai 400 049.
Designation: Chairman and Whole-time
Director
Occupation: Business
DIN: 00341675
Term: October 01, 2014 to September 30,
2019
Nationality: Indian
53 1. Talwalkars Omnifitness Private
Limited
2. Denovo Enterprises Private Limited
3. Aspire Fitness Private Limited
2. Mr. Prashant Sudhakar Talwalkar
Address: 26, Sheesh Mahal, D’Monte Park
Road, Bandra (West), Mumbai 400 050.
Designation: Managing Director and Chief
Executive Officer
Occupation: Business
DIN: 00341715
Term: June 18, 2014 to June 17, 2019
52 1. R2 Infrastructure Private Limited
2. Talwalkars Club Private Limited
102
Nationality: Indian
3. Mr. Madhukar Vishnu Talwalkar
Address: C-37/40, Pandurang Society, Dr.
A. B. Nair Road, Juhu, Mumbai 400 049.
Designation: Whole-time Director
Occupation: Business
DIN: 00341613
Term: October 01, 2014 to September 30,
2019
Nationality: Indian
81 1. Talwalkars Omnifitness Private
Limited
2. Life Fitness India Private Limited
3. Denovo Enterprises Private Limited.
4. Pinnacle Fitness Private Limited
5. Aspire Fitness Private Limited
6. Jyotsna Fitness Private Limited
7. United Health and Fitness Forum
4. Mr. Vinayak Ratnakar Gawande
Address: A-231, Twin Towers, Twin
Tower Lane, Opp. Siddhivinayak Temple,
Prabhadevi, Mumbai – 400 025
Designation: Whole-time Director
Occupation: Business
DIN: 00324591
Term: October 01, 2014 to September 30,
2019
Nationality: Indian
56 1. Better Value Leasing & Finance
Limited
2. Gawande Consultants Private
Limited
3. SK Restraurants Private Limited
4. Talwalkars Club Private Limited
5. Mr. Harsha Ramdas Bhatkal
Address: N-5, Prathamesh CHS, Off. Veer
Savarkar Road, Prabhadevi, Mumbai- 400
025.
Designation: Whole-time Director
Occupation: Business
DIN: 00283946
Term: October 01, 2014 to September 30,
2019
Nationality: Indian
52 1. Better Value Leasing & Finance
Limited
2. Popular Prakashan Private Limited
3. Indian Cookery.Com Private
Limited
4. Popular Institute of Art Private
Limited
5. Corner Bookstore Company Private
Limited
6. SK Restaurants Private Limited
Foreign Companies:
1. Popular Educational Enterprise
Private Limited
6. Mr. Anant Ratnakar Gawande
Address: A/173, Twin Tower, Twin Tower
Lane, Off. Veer Savarkar Marg, Prabhadevi,
Mumbai- 400 025,
Designation: Whole-time Director and
Chief Financial Officer
Occupation: Business
DIN: 00324734
47 1. Better Value Leasing & Finance
Limited
2. SK Restaurants Private Limited
3. Anfin Investments Private Limited
4. Gawande Consultants Private
Limited
103
Term: October 01, 2014 to September 30,
2019
Nationality: Indian
7. Mr. Manohar Gopal Bhide
Address: A/5, Bageshree, Shankar
Ghanekar Marg, Prabhadevi, Mumbai- 400
025.
Designation: Non- Executive, Independent
Director
Occupation: Professional
DIN: 00001826
Term: September 18, 2014 to September
17, 2019
Nationality: Indian
76 1. J P Morgan Securities India Private
Limited
2. Mahindra Shubhlabh Services
Limited
3. Mahindra & Mahindra Financial
Services Limited
4. Mahindra Trustee Company Private
Limited
8. Mr. Raman Hirji Maroo
Address: 21/A, Woodland, 67 Dr. G.
Deshmukh Marg, Mumbai 400 026.
Designation: Non- Executive, Independent
Director
Occupation: Business
DIN: 00169152
Term: September 18, 2014 to September
17, 2019
Nationality: Indian
64 1. Shemaroo Entertainment Limited
2. Shemaroo Holdings Private Limited
3. Shemaroo Films Private Limited
4. Novatech Finvest (India) Private
Limited
5. Mitoch Pharma Private
6. Limited
7. Atlas Equifin Private Limited
8. Think Walnut Digital Private
9. Limited
10. Namaste America -Indo American
Association for Art & Culture
11. Malabar Hill Club Limited
1.
9. Mr. Mohan Motiram Jayakar1
Address: 12, Makani Manor, Peddar Road,
Mumbai- 400 026.
Designation: Non- Executive, Independent
Director
Occupation: Professional
DIN: 00925962
Term: September 18, 2014 to September
17, 2019
Nationality: Indian
61 1. Photoquip India Limited
2. Everest Kanto Cylinder Limited
3. Sahaya Tours and Travels Private
Limited
4. Mysore Petro Chemicals Limited
5. Glide Car Rentals and Trading
Private Limited
6. Macrocosm Infrastructure & Power
Private Limited
7. Centerac Technologies Limited
10. Dr. Avinash Achyut Phadke
Address: A-Flat No. 41, 4th Floor, The
Shrieesh CHS, 187, V.S. Marg, Mahim,
Mumbai – 400016.
62 1. Dandekar Inks and Adhesives
Limited
2. India Venture Advisors Private
Limited
1 As per his latest Form MBP-1 filing with our Company dated April 01, 2015.
104
Designation: Non- Executive, Independent
Director
Occupation: Business
DIN: 00799476
Term: September 18, 2014 to September
17, 2019
Nationality: Indian
11. Mr. Abhijeet Rajaram Patil
Address: 3rd Floor, 214, Sweet Home, L.J
Road, Mahim (West), Mumbai 400 016.
Designation: Non- Executive, Independent
Director
Occupation: Business
DIN: 00356630
Term: September 18, 2014 to September
17, 2019
Nationality: Indian
48 1. Raja Rani Travels Private Limited
2. Raja Rani Retail Tourism Private
Limited*
3. Raja Rani Heath Alliance Private
Limited**
4. RR Global Project Advisory
Services Private Limited
12. Mr. Dinesh Kishanrao Afzulpurkar
Address: P-11, 5 Buena Vista, General
Jagannath BhosaleMarg, Mumbai – 400021.
Designation: Non- Executive, Independent
Director
Occupation: Professional
DIN: 05313394
Term: September 18, 2014 to September
17, 2019
Nationality: Indian
76 NIL
13. Mrs. Mrunalini Deshmukh
Address: 8, Abhang Sahitya Sahawas,
Kalekar Marg, Bandra East, Mumbai,
400051, Maharashtra, India
Designation: Additional Director
Occupation: Professional
DIN: 07092728
Term: March 24, 2015 until conclusion of
the next AGM
Nationality: Indian
57 1. Aquamall Water Solutions Limited
105
* Raja Rani Retail Tourism Private Limited and Raja Rani Health Alliance Private Limited have been assigned a
“defaulting status” by MCA for not filing annual returns and balance sheet for the financial years 2007-2008,
2008-2009 and 2009-2010.
Brief Biographies of our Directors 1. Mr. Girish Madhukar Talwalkar
Mr. Girish Madhukar Talwalkar is the Chairman of our Company. He has 24 years experience in setting up and
running of health clubs. He is responsible for strategic planning, project management, execution, corporate tie ups
and human resource (HR) function of our Company and other promotional activities. His expertise in project
management and execution has helped in the growth of our Company.
2. Mr. Prashant Sudhakar Talwalkar
Mr. Prashant Sudhakar Talwalkar is the Managing Director and Chief Executive Officer of our Company. He has
over 30 years experience in marketing of health clubs. The health clubs and spas of Talwalkars Pantaloon Fitness
Private Limited are pioneered and supervised by him. He has been a key person to expand the brand-name of our
Company in events like the Pantaloons Femina Miss India 2009 and Standard Chartered Mumbai Marathon 2008
and 2009. He is also responsible for corporate tie ups and other promotional activities of our Company.
3. Mr. Madhukar Vishnu Talwalkar
Mr. Madhukar Vishnu Talwalkar is the Whole-time Director of our Company. He has 54 years of experience in
health and fitness industry.Mr. Madhukar Vishnu Talwalkar is theVice President of the Indian Body Builders
Federation and is also the President of Maharashtra Body Building Association He has been instrumental in the
expansion of our Company and has contributed to our solidification as a leader in the industry of health and
fitness. He was the Chairman of the Company since inception and our Company has grown significantly under his
guidance and mentorship. While he stepped down from the position of Executive Chairman on November 17,
2014; he continues to act as a mentor to the Company and its management.
4. Mr. Vinayak Ratnakar Gawande
Mr. Vinayak Ratnakar Gawande is the Whole-time Director of our Company. He has 34 years experience in
taxation, law and finance industry. He also manages a section of hospitality sector of the group, managing a 3 star
hotel at Khandala. He is currently in charge of direct and indirect tax and legal matters of our Company.
5. Mr. Harsha Ramdas Bhatkal
Mr. Harsha Ramdas Bhatkal is a Whole-time Director of our Company. He has 29 years experience in the
publishing and marketing industry. He has worked as a business journalist for Update magazine pursuant to which
he joined Popular Prakashan Private Limited – a family run enterprise - as sales manager. He took over Value
Added News Service a fledgling business database service and went on to create Vans Information, considered as
one of the pioneers in the electronic information services in India. He has been conferred the Paul Hamlyn
scholarship for Young Indian Publishers and an Award for Excellence in Publishing given by the Federation of
Indian Publishers. He is responsible for brand strategy and overall marketing of the brand of our Company.
6. Mr. Anant Ratnakar Gawande
Mr. Anant Ratnakar Gawande is a Whole-time Director and the Chief Financial Officer of our Company. He has
over 24 years experience in the finance industry with specialization in leasing and hire purchase finance,
investment banking, portfolio advisory services and general banking service. He has promoted Anfin Investments
Private Limited and Better Value Leasing and Finance Limited and, in the past, has been associated with Vans
Information Limited, Brainworks Learning Systems Private Limited and Popular Institute of Art Private Limited.
As Whole-time Director and CFO of our Company he is actively in charge of the entire finance operations
including budgets and controls of our Company.
7. Mr. Manohar Gopal Bhide
Mr. Manohar Gopal Bhide is a Non- Executive and Independent Director of our Company. He has an experience
of 52 years in the area of banking and finance. Mr. Bhide has served as the Chairman and Managing Director of
106
Bank of India and was also associated with the State Bank of India as Managing Director and Group Executive
(National Banking Division). Prior to that, he served State Bank of India as Deputy Managing Director and Chief
Credit Officer. He has also worked as Chief Executive Officer – State Bank of India (London), Chairman –
National Institute of Bank Management, Pune, Chairman – Bank of India Shareholding Limited, Chairman – Bank
of India Asset Management Company Limited and Chairman Bank of India (Africa) Limited. He has been a
member of a high level committee set up to investigate activities of Unit Trust of India and an expert committee
appointed by the Government of India to review the system of administered interest rates and other related issues.
8. Mr. Raman Hirji Maroo
Mr. Raman Hirji Maroo is is the Non- Executive and Independent Director of our Company. He has completed his
higher secondary studies from Mumbai post which he joined the Shemaroo Group. He has been associated with
the Shemaroo Group since 1974 is currently the Managing Director of Shemaroo Entertainment Limited
(“Shemaroo”). Mr. Maroo has approximately 40 years of business experience, out of which, he has been
associated with the media and entertainment industry for more than 32 years. He has been instrumental in
Shemaroo Group’s expansion into television rights syndication as well as transformation of Shemaroo into a
content house. He has valuable relationships with various key players within the Indian entertainment industry,
including film producers, television broadcasters, amongst others. In the year 1987, he acquired Hindi Film Video
Rights for Home Video and cable and satellite distribution. He was responsible for Shemaroo’s joint venture
partnership with Sony Pictures Entertainment (LS, USA) to set up Sony Entertainment Television in India. 9. Mr. Mohan Motiram Jayakar
Mr. Mohan Motiram Jayakar is the Non- Executive and Independent Director of our Company. He was a partner
with M/s. Gagrat & Co. for 24 years, having attended to all the aspects of law and specialized in customs, central
excise and foreign exchange matters including writs and criminal procedure. He was a member of the Shipping
Committee of the Bombay Chamber of Commerce and has attended International Commercial Commodity
Arbitrations and Shipping and other Maritime Arbitrations in this capacity. He was also a member of the panel of
Arbitrators of Bombay Incorporated Law Society. He has experience in commercial litigations, writ litigations,
election petitions, Public Interest Litigations and has appeared before various courts including Board of Industrial
and Financial Reconstruction & Appellate Authority of Industrial and Financial Reconstruction and
Commissionerates of both customs and central excise, Customs, Excise and Gold Control (Appellate) Tribunal,
appellate tribunal of Forex, arbitrations before Grain and Feed Trade Association, Federation of Oil, Seeds and
Fats Association and arbitrations held as per the rules of the Indian Chamber of Commerce and Singapore
International Arbitration Centers. He is presently the senior partner in M/s. Khaitan, Jayakar, Sud and Vohra and
heads the entire operations of the Mumbai branch of the firm.
10. Dr. Avinash Achyut Phadke
Dr. Avinash Achyut Phadke is a Non- Executive and Independent Director of our Company.Mr. Phadke has 33
years of experience in pathologic practice. He is an Honorary Secretary to Prince Aly Khan Hospital and President
of the Executive Committee and an advisor to Prince Aly Khan Hospital and Aga Khan Health Foundation. He
serves as a faculty member at the Tata Institute of Social Science, M.D. Pathology in University of Mumbai,
Bhabha Atomic Research Center and as an advisor to the Family Planning Association of India, Dhanwantari
Hospital.
11. Mr. Abhijeet Rajaram Patil
Mr. Abhijeet Rajaram Patil is a Non- Executive and Independent Director of our Company. He has 28 years of
experience in tourism industry. He has worked with Eli Lily’s global marketing team, USA and has also been
involved in the family travel business. Currently, he is the Chairman and Chief Executive Officer of Raja Rani
Travels Private Limited.
12. Mr. Dinesh Kishanrao Afzulpurkar
Mr. Dinesh Kishanrao Afzulpurkar is a Non- Executive and Independent Director of our Company. He has
approximately 43 years of experience in the administrative services and has served the Government of
Maharashtra. He has also held offices as the Chairman of Bombay Port Trust and Collector of Pune and is also the
Chairman of Heritage Committee, Mumbai.
13. Mrs. Mrunalini Deshmukh
107
Mrs. Mrunalini Deshmukh is an Additional Director of our Company since March 24, 2015. She holds a
Bachelors degree in Commerce from St. Xavier’s College, Mumbai and a LLB degree from Mumbai University.
In the past Mrs. Deshmukh has been a professor of Constitutional law at K.C College and was a visiting faculty of
the department of law, University of Mumbai. She has been a practicing advocate since 1981 and specializes in
family law. Mrs. Deshmukh has contributed in writing towards issues on sexual harassment at work place and
issues relating to safety of women and children. She recently addressed an international conference in Dubai on
wealth planning for global Indian families. She is the author of “Breaking-up Your Step-by-Step Guide to getting
Divorced” published by Penguin Publications which is an overview of various laws pertaining to marriage,
divorce, child custody, alimony etc. with illustrations of cases personally handled by her.
Borrowing powers of Board of Directors Pursuant to a special resolution passed at the Annual General Meeting of our Company held on September 18,
2014 our Directors were authorized to borrow money(s) on behalf of our Company in excess of the paid up share
capital and the free reserves of our Company from time to time, as per the provisions of Section 180(1)(c) of the
Companies Act, subject to an amount not exceeding `350 crores.
For further details of the provisions of our Articles of Association regarding borrowing powers, please refer to the
section titled “Description of Equity Shares” beginning on page 144 of this Placement Document. Remuneration/Compensation of Directors of our Company Whole-time Directors
Our Whole-time Directors were appointed for a term of 5 years pursuant to a resolution passed by the Board of
Directors at their meeting held on May 08, 2014 and resolution passed by the Shareholder’s on September 18,
2014. Below are the details of remuneration entitlement of our Whole-time Directors pursuant to their
appointment:
Name of Director Details of remuneration and term
Mr. Girish Madhukar Talwalkar ` 0.35 million per month from October 01, 2014 to
September 30, 2019
Mr. Prashant Sudhakar Talwalkar ` 0.35 million per month from June 18, 2014 to June
17, 2019
Mr. Madhukar Vishnu Talwalkar ` 0.35 million per month from October 01, 2014 to
September 30, 2019
Mr. Vinayak Ratnakar Gawande ` 0.35 million per month from October 01, 2014 to
September 30, 2019
Mr. Harsha Ramdas Bhatkal ` 0.35 million per month from October 01, 2014 to
September 30, 2019
Mr. Anant Ratnakar Gawande ` 0.35 million per month from October 01, 2014 to
September 30, 2019
Below are the details of remuneration paid to our Whole- time Directors in Fiscals 2013, 2014 and 2015:
(` in million) Name of Executive Directors Fiscal 2013 Fiscal 2014 Fiscal 2015 Mr. Madhukar Vishnu Talwalkar 4.20 4.20 4.20 Mr. Prashant Sudhakar Talwalkar 4.20 4.20 4.20 Mr. Vinayak Ratnakar Gawande 4.20 4.20 4.20 Mr. Girish Madhukar Talwalkar 4.20 4.20 3.15 Mr. Harsha Ramdas Bhatkal 4.20 4.20 4.20 Mr. Anant Ratnakar Gawande 4.20 4.20 4.20
Terms of appointment of Whole-time Directors
Below are the terms of appointment of our Whole-time Directors:
108
Gross Salary per month ` 0.35 million
Perquisites and Allowances Housing, medical reimbursement, electricity bill reimbursement, leave
travel concession, club fees, personal accident insurance, reimbursement
of expenses spent for business, company’s contribution towards provident
fund & family pension fund, gratuity, earned leave, car allowance, driver
allowance, telephone/mobile expenses. If in any financial year the
Company has no profits or inadequate profits, the Whole-time Directors
will be entitled to receive the same remuneration, perquisites and benefits
as above or as may be decided by the Board.
Termination The appointment may be terminated by either party by giving to the other
party, six months’ notice of such termination or the Company paying six
months’ remuneration in lieu thereof.
Sitting fee paid to our Independent Directors:
Our Independent Directors are entitled to sitting fees of `15,000 each for attending meetings of the Board, as fixed
vide resolution of our Board of Directors dated October 29, 2013. Further, the members of our Audit Committee,
Stakeholders Relationship Committee and the Nomination and Remuneration Committee are also entitled to
receive a sitting fee of ` 15,000.
Below are the details of the sitting fees paid to our Independent Directors in Fiscals 2013, 2014 and 2015:
Name of the Director Fiscal 2013 Fiscal 2014 Fiscal 2015
Mr. Abhijeet Rajaram Patil 1,26,000 85,000 1,89,000
Dr. Avinash Achyut Phadke 54,000 63,000 94,500
Mr. Dinesh Kishanrao Afzulpurkar 27,000 22,500 27,000
Mr. Manohar Gopal Bhide 46,112 40,500 81,000
Mr. Mohan Motiram Jayakar 27,000 9,000 13,500
Mr. Raman Hirji Maroo 9,000 22,500 40,500
Shareholding of our Directors
As per our Articles, our Directors are not required to hold any Equity Shares in our Company. Save and except as
below, our Directors do not hold any Equity Shares in our Company as on the date of this Placement Document:
Sr. No. Name of the Directors Number of Equity Shares % of Pre Issue
Paid-up
Capital 1. Mr. Girish Madhukar Talwalkar 2,864,280 10.94
2. Mr. Prashant Sudhakar Talwalkar 2,876,080 10.99
3. Mr. Madhukar Vishnu Talwalkar 100 ,000 0.38
4. Mr. Vinayak Ratnakar Gawande 1,920,200 7.33
5. Mr. Harsha Ramdas Bhatkal 1,560,200 5.96
6. Mr. Anant Ratnakar Gawande 1,920,200 7.33
7. Mr. Manohar Gopal Bhide 6,296 0.02
Relationship between Directors
Except as stated below, none of our other Directors are related to each other:
Mr. Madhukar Vishnu Talwalkar Father of Mr. Girish Madhukar Talwalkar and uncle of Mr. Prashant
Sudhakar Talwalkar
Mr. Prashant Sudhakar Talwalkar Nephew of Mr. Madhukar Vishnu Talwalkar and cousin of Mr. Girish
Madhukar Talwalkar
Mr. Vinayak Ratnakar Gawande Brother of Mr. Anant Ratnakar Gawande
Mr. Girish Madhukar Talwalkar Son of Mr. Madhukar Vishnu Talwalkar and cousin of Mr. Prashant Sudhakar Talwalkar
Mr. Anant Ratnakar Gawande Brother of Mr. Vinayak Ratnakar Gawande
109
None of our Directors are appointed pursuant to any arrangement or understanding with major shareholders,
customers or suppliers. Interest of Directors All of our Directors may be deemed to be interested to the extent of fees payable to them for attending meetings
of the Board or a committee thereof as well as to the extent of remuneration payable to them for their services as
Whole-time Director of our Company and reimbursement of expenses as well as to the extent of commission and
other remuneration, if any, payable to them under our Articles of Association. Some of the Directors may be
deemed to be interested to the extent of consideration received/paid or any loan or advances provided to any body
corporate including companies and firms, and trusts, in which they are interested as directors, members, partners
or trustees.
All our Directors may also be deemed to be interested to the extent of Equity Shares, if any, already held by them
or their relatives in our Company, and also to the extent of any dividend payable to them and other distributions in
respect of the said Equity Shares.
All our Directors may be deemed to be interested in the contracts, agreements/ arrangements entered into or to be
entered into by our Company with any Director himself, other company in which they hold directorships or any
partnership firm in which they are partners, as declared in their respective declarations.
The Directors may also be regarded as interested in the Equity Shares, if any, held or that may be subscribed by
and allocated to the companies, firms and trusts, if any, in which they are interested as directors, members,
partners, and / or trustees.
Our Directors may also be regarded interested to the extent of dividend payable to them and other distributions in
respect of the Equity Shares, if any, held by them or by the companies / firms / ventures promoted by them or that
may be subscribed by or allotted to them and the companies, firms, in which they are interested as Directors,
members, partners and Promoters, pursuant to this Issue.
Our Company has entered into a leave and license agreement with Mr. Prashant Sudhakar Talwalkar, our
Managing Director, for the premise in Sangli, admeasuring 6,600 sq. ft. carpet area, from where we operate our
Fitness Center, on a monthly license fee amounting to ` 191,760 for a period commencing from May 01, 2013
until April 30, 2018. Likewise, for our Fitness Center located in Ulsoor Road, Bengaluru, admeasuring 5,753.95
sq. ft., our Company has also entered into a leave and license agreement with Better Value Properties Private
Limited, on a monthly license fee amounting to is ` 580,428 for a period commencing from April 01, 2013 until
March 31, 2018. Our Promoter Directors, viz., Mr. Vinayak Ratnakar Gawande, Mr. Anant Gawande and Mr.
Harsha Ramdas Bhatkal collectively hold 84% in Better Value Brands Private Limited as on May 31, 2015 which
holds 99.80% stake in Better Value Properties Private Limited.
There are 6 gyms operating under our registered brand ‘Talwalkars’ which are owned and operated by our
Promoter Group Entities. These 6 gyms are held by three of our Promoter-Directors Madhukar Vishnu Talwalkar,
Mr. Girish Madhukar Talwalkar and Mr. Prashant Sudhakar Talwalkar through their proprietary undertakings and
partnership firms. The operations of these gyms conflicts with the operations of our business. We entered into
Trademark License Agreements, to provide the usage of the brand name “Talwalkars” by these 6 gyms by sharing
the relevant marketing, promotion and advertisement expenses with us. Any advertising / marketing / brand
building by us takes place in three levels viz. national level, city level and locally. As per the terms of these
agreements, the agreement would be valid until terminated by occurrence of "bankruptcy" with respect to licensee,
his failure to perform in accordance with any of the material terms and condition and / or his breach of any
material representation or warranty made in these agreements.
In addition some of our Group Companies in which some of our Promoter Directors have an interest or stake are
such as Life Fitness India Private Limited, Pinnacle Fitness Private Limited, Talwalkars Omnifitness Private
Limited, M/s. Talwalkars, M/s. Talwalkars Fitness Club, M/s. Talwalkars Health Complex, M/s. Fitness India
Investments, M/s. Club Business Systems, M/s. Talwalkars Health & Leisure, M/s. Talwalkars Health Commune ,
M/s. Talwalkars Fitness Products, M/s. Talwalkars Spa Systems, M/s. Talwalkars Health Club, M/s. Talwalkars
Nutrition Center, and M/s. Talwalkars Fitness Enterprises are in the same line of business as our Company. As a
result, conflicts of interest may arise in allocating or addressing business opportunities and strategies amongst our
Company and other companies/entities in which the Promoter Directors hold equity shares or are the directors.
Though the Talwalkars Group and Gawande Group vide shareholder’s agreement dated July 1, 2003 which is
valid and subsisting as on date, have agreed upon certain terms of non compete clauses regarding the Talwalkars
110
Licensed Gyms and other allied business there can be no assurance that following the termination of this
agreement and expiry of three years from the date of termination of the shareholders agreement Promoter
Directors or any companies/entities including Promoter Group Entities promoted by them or on which they are
directors will not compete with our Company’s existing business or any future business.
As agreed with our Company, 80% of the franchisee fee in respect of the gym situated at Alipore, Kolkata and
owned by Equinox Wellness Private Limited (our step down subsidiary), 100% of the franchisee fee of our
franchised gym operating in Vashi, Maharashtra managed by our franchisee Khandarkar & Shinde Associates and
80% of the franchisee fee of two of our franchised gyms operating in Nagpur, Maharashtra by our franchisee
Jyotsna Shinde Associates is remitted by our Company to Talwalkars Omnifitness Private Limited, in which Mr.
Madhukar Vishnu Talwalkar and Mr. Girish Madhukar Talwalkar are directors and 100% of the equity share
capital is held by them along with their spouses.
Save and except as above, our Directors do not have any interest in the business of our Company or in any
property acquired by our Company as on the date this Placement Document or proposed to be acquired by us as
on May 31, 2015. For further details please refer to paragraph titled “Our Properties” in the section titled “Our
Business” beginning on page 78.
Further, save and except as stated otherwise in the sector titled “Our Business” and “Financial Statements”
beginning on page 78 and 168, our Directors do not have any other interests in our Company as on the date of
filing of this Placement Document with the Stock Exchanges. Our Directors are not interested in the appointment of or acting as Registrar and Bankers to the Issue or any such
intermediaries registered with SEBI. Changes in our Board of Directors during the last three years Save and except as mentioned below, there have been no changes in our Board of Directors during the last three
(3) years:
Name and Designation of the Director Date of Appointment Date of Resignation Reasons Mrs. Mrunalini Deshmukh March 24, 2015 - Appointment
Corporate Governance
Our Company is required to comply with applicable corporate governance requirements, including the Listing
Agreements with the Stock Exchanges and the SEBI ICDR Regulations in respect of the constitution of the Board
and committees thereof. The corporate governance framework of our Company is based on an effective,
independent Board of Directors, separation of the supervisory role of the Board of Directors from the executive
management team and proper constitution of the committees of the Board of Directors, as required by law.
The Board of Directors function either as a full Board or through various committees constituted to oversee
specific operational areas. The executive management of our Company provides the Board of Directors with
detailed reports on the performance of our Company periodically.
Committee of the Board of Directors
The Board of Directors has eight committees, which have been constituted and function in accordance with the
relevant provisions of the Companies Act and the Listing Agreement: (i) Audit Committee, (ii) Nomination and
Remuneration Committee, (iii) Stakeholders Relationship Committee, (iv) CSR Committee (v) QIP Committee (vi)
Management Committee (vii) Risk Management Committee (viii) Sexual Harassment Committee
The following table sets forth the compositions of the various Committees of our Company
Name of the Committee Members
Audit Committee Mr. Abhijeet Rajaram Patil (Chairman)
Dr. Avinash Achyut Phadke (Member)
Mr. Anant Ratnakar Gawande (Member)
Nomination and Remuneration Committee Mr. Manohar Gopal Bhide (Chairman)
Dr. Avinash Achyut Phadke (Member)
111
Mr. Abhijeet Rajaram Patil (Member)
Stakeholders Relationship Committee Mr. Abhijeet Rajaram Patil (Chairman)
Mr. Girish Madhukar Talwalkar (Member)
Mr. Anant Ratnakar Gawande (Member)
CSR Committee Mr. Raman Hirji Maroo (Chairman)
Mr. Vinayak Ratnakar Gawande (Member)
Mr. Girish Madhukar Talwalkar (Member)
QIP Committee Mr. Vinayak Ratnakar Gawande (Chairman)
Mr. Prashant Sudhakar Talwalkar (Member)
Mr. Anant Ratnakar Gawande (Member)
Mr. Manohar Gopal Bhide (Member)
Management Committee Mr. Girish Madhukar Talwalkar (Chairman)
Mr. Prashant Sudhakar Talwalkar (Member)
Mr. Vinayak Ratnakar Gawande (Member)
Mr. Harsha Ramdas Bhatkal (Member)
Mr. Anant Ratnakar Gawande (Member)
Mr. Manohar Gopal Bhide (Member)
Mr. Abhijeet Rajaram Patil (Member)
Risk Management Committee Mr. Prashant Sudhakar Talwalkar (Chairman)
Mr. Anant Ratnakar Gawande (Member)
Mr. Harsha Ramdas Bhatkal (Member)
Sexual Harassment Committee* Ms. Avanti Sankav (Chairperson)
Ms. Anupa Kamble (Member)
Ms. Akanksha Vaidya (Member)
Dr. Smita Sukhtankar (Member)
*All are non Board members
112
Organization structure
Mr. Girish Talwalkar Executive Chairman
Mr. Vinayak Gawande
Whole-time Director
Mr. Prashant Talwalkar Managing Director & CEO
Mr. Anant Gawande Whole-time Director & CFO
Mr. Girish Nayak SVP - Finance &
Banking
Finance Function Operations
Mr. Latif Mohammed VP - Operations
Audit & Legal Function
Ms. Avanti Sankav Company Secretary &
Compliance Officer
Mr. Madhukar Talwalkar Whole-time Director
Operations
Mr. Harsha Bhatkal Executive Director
Marketing Function
Our Key Managerial Personnel (KMP):
In addition to our Whole-time Directors, the following are our key managerial employees. All of our key
managerial employees are permanent employees of our Company. None of the above mentioned key managerial
personnel are related to each other or to our Directors and none of them are appointed pursuant to any
arrangement or understanding with major shareholders, customers or suppliers. The details under this section are
as on May 31, 2015. Brief Profiles of our Key Managerial Personnel 1. Mr. Girish Nayak
Mr. Girish Nayak, aged 44, is the Senior Vice President (Finance & Banking) of our Company. He has an
experience of 21 years in field of finance. He joined our Company in October 2009 as Senior Vice-President
(Banking and Finance) and has been working with our group since 1996. Prior to joining our company he was the
Senior Vice President of Better Value Leasing and Finance Limited, and has also worked with Nucleus Securities
Limited. Currently he is responsible for the overall banking and financial functions of our Company and handling
projects from the initial stage of assessing the feasibility of the locations to negotiation with the suppliers.
2. Ms. Avanti Sankav
Ms. Avanti Sankav, aged 34, is the Company Secretary and Compliance officer of our Company. She holds a LLB
degree from the University of Mumbai. Ms. Sankav has over 11 years experience in Corporate, Legal and
Secretarial Compliances and has been with us since December, 2010 as Assistant Company Secretary. Prior to
this, she has worked for N.L. Bhatia and Associates and Chandni Textiles Engineering Industries Limited as
Company Secretary. At present, Ms. Sankav is presently monitors the secretarial and compliance assignments of
our Company.
3. Mr. Abdul Latif Mohammed
Mr. Abdul Latif Mohammed, aged 40, is the Vice President Operations - North of our Company. He has an
experience of 18 years in operating gymnasiums. He has been associated with our Company since 2002. In
October 2009, he was employed as a permanent employee of our Company and was promoted to Head Operations
– North. He is currently responsible for finalization of project sites, planning equipment and equipment layout for
new branch, recruitment for new branch, training and supervising staff, implementation of fees structure, planning
of annual targets and incentives for new and existing branch, planning the annual advertisement and marketing
plan and budget of the new and existing branch, overseeing the overall management of the branch and monitor
113
and meeting budget commitments.
Further, the key managerial personnel as disclosed above are not key managerial personnel as defined under
Accounting Standard 18. Bonus and/or Profit Sharing Plan for the Key Managerial Personnel Our Company does not have any bonus or profit-sharing plan for its key managerial personnel save and except the
bonus paid including under the Payment of Bonus Act to our key managerial personnel. Except as stated otherwise in this Placement Document, no amount or benefit has been paid or given within the
two preceding years or are intended to be given to any of our key managerial personnel except the normal
remuneration for services rendered as directors, officers or employees. Interest of Key Managerial Personnel All our key managerial personnel may be deemed to be interested to the extent of the remuneration and other
benefits in accordance with their terms of employment for services rendered as officers or employees to our
Company. Further, if any Equity Shares are allotted to our key managerial personnel in terms of this Issue, they
will be deemed to be interested to the extent of their shareholding and / or dividends paid or payable on the same.
Furthermore, no amount or benefit has been paid or given during the preceding year to any of our key managerial
personnel. Mr. Girish Nayak is a director in 3 of our subsidiaries namely Aspire Fitness Private Limited, Jyotsna Fitness
Private Limited and Equinox Wellness Private Limited and may be deemed to be interested to the extent of fees
payable to him for attending meetings of the board or a committee thereof. Shareholding of our Key Managerial Personnel
As on May 31, 2015, Mr. Girish Nayak and Ms. Avanti Sankav hold 1 share each in our Company.
Employees We believe that a motivated and empowered employee base is integral to our competitive advantage. Our
Company has 17 employees as on May 31, 2015 comprising key managers responsible for our operations, finance
and overall administration. Our core team of these managers is involved in identifying potential new locations and
overall project management of the expansion projects. We conduct periodic reviews of our employee’s job
performance and determine salaries and discretionary bonuses based upon these reviews. In addition, we offer
internal training programs tailored to different job requirements to enhance our employees’ talents and skills. Apart from salary and usual perquisites, and group benefits under the group gratuity scheme and the employee
provident fund scheme no other benefits have been offered to the officers of our Company. Employees Stock Option Scheme Our Company does not have any Employee Stock Option Scheme or other similar scheme giving options in our
Equity Shares to our employees. Payment of Benefits to Officers of our Company (non-salary related)
Except for the payment of salaries and perquisites/sitting fees, lease rent and reimbursement of expenses incurred
in the ordinary course of business, and the transactions as enumerated in the section titled “Financial
Statements” and “Our Business” beginning on pages 168 and 78, respectively, we have not paid /given any
benefit to the officers of our Company, within the two preceding years nor do we intend to make such
payment/give such benefit to any officer as on May 31, 2015. Except statutory benefits upon termination of their employment in our Company or superannuation, no officer of
our Company is entitled to any benefit upon termination of his employment in our Company.
114
Code of Conduct Our Company has laid down a Code of Conduct (“Code”) applicable to all its Board members and the senior
management, officers and employees of our Company and the Code is available on its website
www.talwalkars.net. In compliance with the Clause 49 of the Listing Agreement, the Code has taken effect from
July 07, 2010, as approved by the Board in its meeting held on that date.
Policy on disclosure and internal procedure for prevention of insider trading
Chapter IV of the SEBI Prohibition of Insider Trading Regulation applies to our Company and its employees and
requires our Company to implement a code of internal procedures and conduct for the prevention of insider trading. Our
Company has implemented a code of conduct for prevention of insider trading in accordance with the SEBI Prohibition
of Insider Trading Regulations effective from May 15, 2015.
Other Confirmations
Except as stated above in “Interest of our Directors” and “Interests of Senior Managerial Personnel”, none of our
Directors or any senior managerial personnel of our Company has any financial or other material interest in this
Issue and there is no effect of such interest in so far as it is different from the interests of other persons.
115
PRINCIPAL SHAREHOLDERS
The table below represents the shareholding pattern of our Company in accordance with clause 35 of the Listing
Agreement, as on March 31, 2015:
Sr.
no.
Category of
shareholder
Number of
shareholders
Total
number of
shares
Number of
shares held in
dematerialized
form
Total shareholding as a
percentage of total
number of shares
Shares Pledged or
otherwise
encumbered
As a
percentage
of (A+B)1
As a
percentage
of
(A+B+C)
Number
of
shares
As a
percentage
(A) Promoter and Promoter Group2
(1) Indian
(a) Individuals/Hindu
Undivided Family
7 11,333,128 11,333,128 43.29 43.29 0 0.00
(b) Central
Government/State
Government(s)
0 0 0 0.00 0.00 0 0
(c) Bodies Corporate 1 7,683 7,683 0.03 0.03 0 0.00
(d) Financial
Institutions/Banks
0 0 0 0.00 0.00 0 0
(e) Any Other (Total) 0 0 0 0.00 0.00 0 0
Sub-Total (A)(1) 8 11,340,811 11,340,811 43.32 43.32 0 0.00
(2) Foreign
(a) Individuals (Non-
Resident
Individuals/Foreign
Individuals)
0 0 0 0.00 0.00 0 0.00
(b) Bodies Corporate 0 0 0 0.00 0.00 0 0.00
(c) Institutions 0 0 0 0.00 0.00 0 0.00
(d) Qualified Foreign
Investor
0 0 0 0.00 0.00 0 0.00
(e) Any Other (Total) 0 0 0 0.00 0.00 0 0.00
Sub-Total (A)(2) 0 0 0 0.00 0.00 0 0.00
Total
Shareholding of
Promoter and
Promoter Group
(A)= (A)(1)+(A)(2)
8 11,340,811 11,340,811 43.32 43.32 0 0.00
(B) Public shareholding3
(1) Institutions
(a) Mutual Funds/UTI 12 2,529,238 2,529,238 9.66 9.66 0 0
(b) Financial
Institutions/Banks
2 62,412 62,412 0.24 0.24 0 0
(c) Central
Government/State
Government(s)
0 0 0 0.00 0.00 0 0
(d) Venture Capital
Funds
0 0 0 0.00 0.00 0 0
(e) Insurance
Companies
0 0 0 0.00 0.00 0 0
(f) Foreign
Institutional
Investors
11 3,007,914 3,007,914 11.49 11.49 0 0
(g) Foreign Venture 0 0 0 0.00 0.00 0 0
116
Sr.
no.
Category of
shareholder
Number of
shareholders
Total
number of
shares
Number of
shares held in
dematerialized
form
Total shareholding as a
percentage of total
number of shares
Shares Pledged or
otherwise
encumbered
As a
percentage
of (A+B)1
As a
percentage
of
(A+B+C)
Number
of
shares
As a
percentage
Capital Investors
(h) Qualified Foreign
Investor
0 0 0 0.00 0.00 0 0
(i) Any Other (Total) 0 0 0 0.00 0.00 0 0
Sub-Total (B)(1) 25 5,599,564 5,599,564 21.39 21.39 0 0
(2) Non-institutions
(a) Bodies Corporate 298 3,273,665 3,273,665 12.50 12.50 0 0
(b) Individuals - i.
Individual
Shareholders
Holding Nominal
Share Capital Up
To >`. 1 Lakh.
8,153 1,929,617 1,919,381 7.37 7.37 0 0
Individuals - ii.
Individual
Shareholders
Holding Nominal
Share Capital In
Excess Of `. 1
Lakh
46 2,685,221 2,685,221 10.26 10.26 0 0
(c) Qualified Foreign
Investor
0 0 0 0.00 0.00 0 0
(d) Any Other (Total) 475 1,352,010 1,352,010 5.16 5.16 0 0
(d1) Clearing Member 123 526,961 526,961 2.01 2.01 0 0
(d2) Foreign Portfolio
Investor
(Corporate)
2 133,977 133,977 0.51 0.51 0 0
(d3) Non-Resident
Indians (Non-
Repat)
71 151,281 151,281 0.58 0.58 0 0
(d4) Non-Resident
Indians (Repat)
278 506,101 506,101 1.93 1.93 0 0
(d5) Trusts 1 33,690 33,690 0.13 0.13 0 0
Sub-Total (B)(2) 8,972 9,240,513 9,230,277 35.29 35.29 0 0
Total Public
Shareholding (B)=
(B)(1)+(B)(2)
8,997 14,840,077 14,829,841 56.68 56.68 0 0
TOTAL (A)+(B) 9,005 26,180,888 26,170,652 100.00 100.00 0 0.00
(C) Shares held by
Custodians and
against which
Depository
Receipts have been
issued
0 0 0 0 0.00 0 0
C1 Promoter and
Promoter Group
0 0 0 0 0.00 0 0
C2 Public 0 0 0 0 0.00 0 0
GRAND TOTAL
(A)+(B)+(C)
9,005 26,180,888 26,170,652 0 100.00 0 0.00
117
1For determining public shareholding for the purpose of Clause 40A.
2For definitions of "Promoter" and "Promoter Group", refer to Clause 40A.
3For definitions of "Public Shareholding", refer to Clause 40A.
The following table contains information as on March 31, 2015 concerning persons belonging to the Promoter and
Promoter Group category:
Sr.
No
.
Name of
the
shareholde
r
(II)
Total Shares
held
Shares pledged or
otherwise encumbered**
Details of
warrants
Details of convertible
securities
Total
shares
(including
underlyin
g shares
assuming
full
conversio
n of
warrants
and
convertibl
e
securities)
as a % of
diluted
share
capital
(XIII)
Number
(IV)
as a
% of
gran
d
total
(A) +
(B) +
(C)
(V)
Numbe
r
(VI)
as a
percentag
e
(VII) =
(VI) /
(IV)*100
as a
% of
gran
d
total
(A) +
(B) +
(C) of
sub-
claus
e
(I)(a)
(VIII
)
Number
of
warrant
s held
(XI)
As a %
total
number
of
warrant
s of the
same
class
(X)
Number
of
convertibl
e
securities
held
(XI)
As a %
total
number of
convertibl
e
securities
of the
same class
(XII)
1 Prashant
Sudhakar
Talwalkar
2,876,08
0
10.99 0 0.00 0.00 0 0 0 0 0
2 Girish
Madhukar
Talwalkar
2,864,28
0
10.94 0 0.00 0.00 0 0 0 0 0
3 Madhukar
Vishnu
Talwalkar
192,168 0.73 0 0.00 0.00 0 0 0 0 0
4 Anant
Ratnakar
Gawande
1,920,20
0
7.33 0 0.00 0.00 0 0 0 0 0
5 Vinayak
Ratnakar
Gawande
1,920,20
0
7.33 0 0.00 0.00 0 0 0 0 0
6 Harsha
Ramdas
Bhatkal
1,560,20
0
5.96 0 0.00 0.00 0 0 0 0 0
7 Better
Value
Leasing &
Finance
Ltd.
7,683 0.03 0 0.00 0.00 0 0 0 0 0
TOTAL 1,340,81
1
43.32 0 0.00 0.00 0 0.00 0 0.00 0.00
(**) The term “encumbrance” has the same meaning as assigned to it in regulation 28(3) Takeover Code.
The following table contains information as on March 31, 2015 concerning each person in the “Public” category,
who holds more than 1% or more of the total number of Shares:
Sr.
No.
Name of the
Shareholder
No. of
Shares
Shares
as % of
Details of warrants Details of convertible
securities
Total shares
(including
118
held Total
No. of
Shares
Number
of
warrants
held
As a %
total
number
of
warrants
of the
same
class
Number of
convertible
securities
held
% w.r.t
total
number of
convertible
securities of
the same
class
underlying shares
assuming full
conversion of
warrants and
convertible
securities) as a % of
diluted share
capital
1. SmallCap
World Fund,
Inc.
1,694,000 6.47 0 0 0 0 0
2. Laxmi
Shivanand
Mankekar and
Kedar
Shivanand
Mankekar
1,573,520 6.01 0 0 0 0 0
3. Bajaj Allianz
Life Insurance
Company
Limited
1,097,233 4.19 0 0 0 0 0
4. Reliance
Capital Trustee
Co Ltd-A/C
Reliance
Monthly
Income Plan
933,816 3.57 0 0 0 0 0
5. Franklin India
Smaller
Companies
Fund
657,119 2.51 0 0 0 0 0
6. American
Funds
Insurance
Series Global
Small
Capitalisation
Fund
650,000 2.48 0 0 0 0 0
7. L and T
Mutual Fund
Trustee Ltd. -
L and T India
Special
Situations
Fund
640,553 2.45 0 0 0 0 0
8. Long Term
India Fund
326,145 1.25 0 0 0 0 0
9. ICICI
Lombard
General
Insurance
Company Ltd.
280,001 1.07 0 0 0 0 0
Total: 7,852,387 29.99 0 0.00 0 0.00 0
The following table contains information as on March 31, 2015 concerning persons (together with PAC)
belonging to the category “Public” and holding more than 5% of the total number of Equity Shares:
Sr.
No.
Name of the
shareholder
Number of
shares
Shares as a
percentage of
total number
of shares {i.e.,
Grand
Details of warrants Details of convertible
securities
Total shares
(including
underlying
shares
assuming full
Number
of
As a %
total
Number of
convertible
% w.r.t total
number of
119
Total
(A)+(B)+(C)
warrants
held
number of
warrants
of the
same class
securities
held
convertible
securities of
the same
class
conversion of
warrants and
convertible
securities) as a
% of diluted
1 SmallCap
World Fund,
Inc.
1,694,000 6.47 0 0 0 0 0
2 Laxmi
Shivanand
Mankekar
and Kedar
Shivanand
Mankekar
1,573,520 6.01 0 0 0 0 0
TOTAL 3,267,520 12.48 0 0.00 0 0.00 0.00
The table below represents the details of the shareholding of our Promoters as on May 31, 2015 to be locked-in
pursuant to this Issue:
Sr. No. Name of the Directors Number of Equity Shares % of Pre Issue
Paid-up
Capital 1. Mr. Girish Madhukar Talwalkar 2,864,280 10.94
2. Mr. Prashant Sudhakar Talwalkar 2,876,080 10.99
3. Mr. Madhukar Vishnu Talwalkar 100 ,000 0.38
4. Mr. Vinayak Ratnakar Gawande 1,920,200 7.33
5. Mr. Harsha Ramdas Bhatkal 1,560,200 5.96
6. Mr. Anant Ratnakar Gawande 1,920,200 7.33
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ISSUE PROCEDURE
The following is a summary intended to present a general outline of the procedure relating to the application,
bidding, payment, Allocation and Allotment of the Equity Shares to be issued pursuant to the Issue. The procedure
followed in the Issue may differ from the one mentioned below, and investors are presumed to have apprised
themselves of the same from our Company or the BRLMs. Investors that apply in this Issue will be required to
confirm and will be deemed to have represented to our Company, the BRLMs and their respective directors,
officers, agents, advisors, affiliates and representatives that they are eligible under all applicable laws, rules,
regulations, guidelines and approvals to acquire Equity Shares and will not offer, sell, pledge or transfer the
Equity Shares to any person who is not eligible under applicable laws, rules, regulations, guidelines and
approvals to acquire Equity Shares. Our Company and the BRLMs and their respective directors, officers, agents,
advisors, affiliates and representatives accept no responsibility or liability for advising any investor on whether
such investor is eligible to acquire Equity Shares. Investor is advised to inform themselves of any restrictions or
limitations that may be applicable to them. See the section titled “Selling Restrictions” and “Transfer
Restrictions” beginning on pages 132 and 139, respectively.
Qualified Institutions Placement
The Issue is being made to QIBs in reliance upon Chapter VIII of the SEBI ICDR Regulations and Private
Placement Provisions, through the mechanism of a QIP. Under Chapter VIII of the SEBI ICDR Regulations and
Private Placement Provisions, a company may issue equity shares to QIBs provided that certain conditions are met
by our Company. Certain of these conditions are set out below:
the shareholders of the issuer have passed a special resolution approving such QIP. Such special
resolution must specify (a) that the allotment of securities is proposed to be made pursuant to the QIP;
and (b) the Relevant Date;
equity shares of the same class of such issuer, which are proposed to be allotted through the QIP, are
listed on a recognised stock exchange in India having nation-wide trading terminals for a period of at
least one year prior to the date of issuance of notice to its shareholders for convening the meeting to pass
the above-mentioned special resolution;
the aggregate of the proposed issue and all previous QIPs made by the issuer in the same financial year
does not exceed five times the net worth (as defined in the SEBI ICDR Regulations) of the issuer as per
the audited balance sheet of the previous financial year;
the issuer shall be in compliance with the minimum public shareholding requirements set out in the
SCRR and the Listing Agreement;
the issuer shall have completed allotments with respect to any prior offer or invitation made by the issuer
or shall have withdrawn or abandoned any prior invitation or offer made by the issuer;
the issuer shall offer to each Allottee at least such number of the securities in the issue which would
aggregate to at least ` 20,000 calculated at the face value of the securities;
the offer must be made through a private placement offer letter and an application form serially
numbered and addressed specifically to the QIB to whom the offer is made and is sent within 30 days of
recording the names of such QIBs;
Prior to circulating the private placement offer letter, the issuer must prepare and record a list of Eligible
QIBs to whom the offer will be made. The offer must be made only to such persons whose names are
recorded by the issuer prior to the invitation to subscribe;
the offering of securities by issue of public advertisements or utilisation of any media, marketing or
distribution channels or agents to inform the public about the issue is prohibited.
At least 10% of the equity shares issued to QIBs must be allotted to Mutual Funds, provided that, if this portion or
any part thereof to be allotted to mutual funds remains unsubscribed, it may be allotted to other QIBs.
Prospective purchasers will be deemed to have represented to us and the BRLMs in order to participate in the
Issue that they are outside the United States and purchasing the Equity Shares in an offshore transaction in
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accordance with Regulation S and the applicable laws of the jurisdictions where those offers and sales occur. For
further details, please refer to the sections titled “Selling Restrictions” and “Transfer Restrictions” beginning on
pages 132 and 139, respectively.
Bidders are not allowed to withdraw their Bids after the Issue Closing Date.
Additionally, there is a minimum pricing requirement under the SEBI ICDR Regulations. The Floor Price shall
not be less than the average of the weekly high and low of the closing prices of the Equity Shares of the same
class of the Equity Shares of the Issuer quoted on the stock exchange during the two weeks preceding the
Relevant Date. However, a discount of up to 5% of the Floor Price is permitted in accordance with the provisions
of the SEBI ICDR Regulations.
The “Relevant Date” referred to above, for Floor Price, will be the date of the meeting in which the Board of
Directors or any committee duly authorised by the Board of Directors decides to open the Issue and “Stock
Exchange” means any of the recognised stock exchanges in India on which the equity shares of the issuer of the
same class are listed and on which the highest trading volume in such equity shares has been recorded during the
two weeks immediately preceding the Relevant Date.
Our Company has applied for and received the in-principle approval of the Stock Exchanges under Clause 24 (a)
of its Listing Agreements for the listing of the Equity Shares on the Stock Exchanges. Our Company has also
delivered a copy of the Preliminary Placement Document to the Stock Exchanges and the Placement Document
will be delivered to each of the Stock Exchanges.
Our Company shall also make the requisite filings with the RoC and SEBI within the stipulated period as required
under the Companies Act, 2013 and the Companies (Prospectus and Allotment of Securities) Rules, 2014.
The Issue has been authorized by (i) the Board pursuant to a resolution passed on April 08, 2015, and (ii) the
shareholders of our Company, vide a special resolution passed pursuant to Sections 42 and 62(1)(c) of the
Companies Act through postal ballot results announced on May 12, 2015.
The Equity Shares will be Allotted within 12 months from the date of the shareholders’ resolution approving the
QIP and within 60 days from the date of receipt of subscription money from the successful Bidders. For details of
refund of application money, please see the section titled “Issue Procedure” beginning on page 120.
The Equity Shares issued pursuant to the QIP must be issued on the basis of the Preliminary Placement Document
and the Placement Document that shall contain all material information including the information specified in
Schedule XVIII of the SEBI ICDR Regulations and the requirements prescribed under Form PAS-4 of the
Companies (Prospectus and Allotment of Securities) Rules, 2014. The Preliminary Placement Document and the
Placement Document are private documents provided to only select investors through serially numbered copies
and are required to be placed on the website of the concerned Stock Exchanges and of our Company with a
disclaimer to the effect that it is in connection with an issue to QIBs and no offer is being made to the public or to
any other category of investors.
The minimum number of allottees for each QIP shall not be less than:
two, where the issue size is less than or equal to ` 2,500 million; and
five, where the issue size is greater than ` 2,500 million Lacs.
No single allottee shall be allotted more than 50 % of the issue size or less than ` 20,000 of face value of Equity
Shares.
QIBs that belong to the same group or that are under common control shall be deemed to be a single allottee. For
details of what constitutes “same group” or “common control”, please see the section titled “Issue Procedure”
beginning on page 120.
Securities allotted to a QIB pursuant to a QIP shall not be sold for a period of one year from the date of allotment
except on the floor of a recognised stock exchange in India. Allotments made to FVCIs, VCFs and AIFs in the
Issue are subject to the rules and regulations that are applicable to them, including in relation to lock-in
requirements.
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The Equity Shares offered hereby have not been and will not be registered under the U.S. Securities Act or
registered, listed or otherwise qualified in any other jurisdiction outside India, and unless so registered, may not be
offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the U.S. Securities Act and applicable state securities laws in the United States.
Accordingly, the Equity Shares are being offered and sold outside the United States in offshore transactions in
reliance on Regulation S and the applicable laws of the jurisdictions where those offers and sales occur. For a
description of certain restrictions on transfer of the Equity Shares, please see section titled “Transfer
Restrictions” beginning on page 139.
The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other
jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in any such
jurisdiction, except in compliance with the applicable laws of such jurisdiction.
This Placement Document is a private document provided to investors through serially numbered copies and
required to be placed on the website of the concerned stock exchange and of the Company with a disclaimer to the
effect that it is in connection with an issue to QIBs and no offer is being made to the public or any other category
of investors.
Issue Procedure
1. Our Company and BRLMs shall circulate serially numbered copies of the Preliminary Placement
Document and the serially numbered Application Form, either in electronic or physical form, to the QIBs
and the Application Form will be specifically addressed to such QIBs. In terms of Section 42(7) of the
Companies Act, 2013, our Company shall maintain complete records of the QIBs to whom the
Preliminary Placement Document and the serially numbered Application Form have been dispatched.
Our Company will make the requisite filings with the RoC and SEBI within the stipulated time period as
required under the Companies Act, 2013 and the Companies (Prospectus and Allotment of Securities)
Rules, 2014.
2. The list of QIBs to whom the Bid-cum-Application Form is delivered shall be determined by our
Company in consultation with the BRLMs. Unless a serially numbered Preliminary Placement Document
along with the serially numbered Application Form is addressed to a particular QIB, no invitation to
subscribe shall be deemed to have been made to such QIB. Even if such documentation were to come
into the possession of any person other than the intended recipient, no offer or invitation to offer shall be
deemed to have been made to such person and any application that does not comply with this
requirement shall be treated as invalid. Our Company shall intimate the Bid/Issue Opening Date to the
Stock Exchanges.
3. Bidders shall submit Bids for, and the Company shall issue and Allot to each Allottee, at least such
number of Equity Shares in this Issue which would aggregate to ` 20,000 calculated at the face value of
the Equity Shares.
4. QIBs may submit an Application Form, including any revisions thereof, during the Bidding Period to the
BRLMs.
5. Bidders will be required to indicate the following in the Application Form:
name of the QIB to whom Equity Shares are to be Allotted;
number of Equity Shares Bid for;
price at which they are agreeable to subscribe for the Equity Shares, provided that QIBs may
also indicate that they are agreeable to submit a Bid at “Cut-off Price”; which shall be any price
as may be determined by our Company in consultation with the BRLMs at or above the Floor
Price or the Floor Price net of such discount as approved in accordance with SEBI ICDR
Regulations;
details of the demat account(s) to which the Equity Shares should be credited; and
a representation that it is outside the United States at the time it places its buy order for the
Equity Shares, it is acquiring the Equity Shares in an offshore transaction in reliance on
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Regulation S and it has agreed to certain other representations set forth in the sections titled
“Representations by Investors” and “Transfer Restrictions” beginning on pages 3 and 139,
respectively, of this Placement Document, and it has agreed to certain other representations
made in the Application Form.
Note: Each sub-account of an FII other than a sub-account which is a foreign corporate or a
foreign individual will be considered as an individual QIB and separate Application Forms would
be required from each such sub-account for submitting Bids.
6. Once a duly completed Application Form (including the revision of bids) is submitted by a QIB, such
Application Form constitutes an irrevocable offer and cannot be withdrawn after the Issue Closing Date.
The Issue Closing Date shall be notified to the Stock Exchanges and the QIBs shall be deemed to have been
given notice of such date after receipt of the Application Form.
7. The Bids made by asset management companies or custodians of Mutual Funds shall specifically state the
names of the concerned schemes for which the Bids are made. In case of a Mutual Fund, a separate Bid can
be made in respect of each scheme of the Mutual Fund registered with SEBI.
8. Upon receipt of the Application Form, after the Issue Closing Date, our Company shall determine the final
terms, including the Issue Price of the Equity Shares to be issued pursuant to the Issue in consultation with
the BRLMs. Upon determination of the final terms of the Equity Shares, the BRLMs will send the serially
numbered CAN along with the Placement Document to the QIBs who have been Allocated the Equity
Shares. The dispatch of a CAN shall be deemed a valid, binding and irrevocable contract for the QIB to pay
the entire Issue Price for all the Equity Shares Allocated to such QIB. The CAN shall contain details such as
the number of Equity Shares Allocated to the QIB and payment instructions including the details of the
amounts payable by the QIB for Allotment of the Equity Shares in its name and the Pay-In Date as
applicable to the respective QIB. Please note that the Allocation will be at the absolute discretion of our
Company and will be based on the recommendation of the BRLMs.
9. Pursuant to receiving a CAN, each successful Bidder shall be required to make the payment of the entire
application monies for the Equity Shares indicated in the CAN at the Issue Price, only through electronic
transfer to our Company’s designated bank account by the Pay-In Date as specified in the CAN sent to the
respective successful Bidder.
10. No payment shall be made by successful Bidder in cash. Please note that any payment of application money
for the Equity Shares shall be made from the bank accounts of the relevant QIBs applying for the Equity
Shares. Monies payable on Equity Shares to be held by joint holders shall be paid from the bank account of
the person whose name appears first in the application. Pending Allotment, all monies received for
subscription of the Equity Shares shall be kept by our Company in a separate bank account with a scheduled
bank and shall be utilised only for the purposes permitted under the Companies Act, 2013.
11. Upon receipt of the application monies from the QIBs, our Company shall Allot Equity Shares as per the
details in the CANs sent to the successful Bidder. Our Company and BRLMs will circulate serially
numbered copies of the Placement Document to the successful Bidders and will intimate the details of the
Allotment to the Stock Exchanges.
12. After passing the resolution for Allotment and prior to crediting the Equity Shares into the depository
participant accounts of the successful Bidders, our Company shall apply to the Stock Exchanges for listing
approvals. Our Company will intimate to the Stock Exchanges the details of the Allotment and apply for
approvals for final listing of the Equity Shares on the Stock Exchanges prior to crediting the Equity Shares
into the beneficiary account maintained with the Depository Participant by the successful Bidder.
13. After receipt of the listing approvals of the Stock Exchanges, our Company shall credit the Equity Shares
Allotted pursuant to this Issue into the Depository Participant accounts of the respective Allottees.
14. Our Company will then apply for the final listing and trading approvals from the Stock Exchanges.
15. The Equity Shares that would have been credited to the beneficiary account with the Depository Participant
of the QIBs shall be eligible for trading on the Stock Exchanges only upon the receipt of final listing and
trading approvals from the Stock Exchanges.
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16. Upon receipt of intimation of final trading and listing approval from the Stock Exchanges, our Company
shall inform the Allottees of the receipt of such approval. Our Company and the BRLMs shall not be
responsible for any delay or non-receipt of the communication of the final trading and listing permissions
from the Stock Exchanges or any loss arising from such delay or non-receipt. Final listing and trading
approvals granted by the Stock Exchanges are also placed on their respective websites. QIBs are advised to
apprise themselves of the status of the receipt of the permissions from the Stock Exchanges or our
Company.
Qualified Institutional Buyers
Only QIBs as defined in Regulation 2(1)(zd) of the SEBI ICDR Regulations and not otherwise excluded pursuant
to Regulation 86(1)(b) of the SEBI ICDR Regulations are eligible to invest. Currently, under Regulation 2(1)(zd)
of the SEBI ICDR Regulations, a QIB means:
alternate investment funds registered with SEBI;
Eligible FPIs;
foreign venture capital investors registered with SEBI;
insurance companies registered with Insurance Regulatory and Development Authority;
insurance funds set up and managed by army, navy or air force of the Union of India;
insurance funds set up and managed by the Department of Posts, India;
multilateral and bilateral development financial institutions;
Mutual Fund;
pension funds with minimum corpus of ` 250 millions;
provident funds with minimum corpus of ` 250 millions;
public financial institutions as defined in Section 4A of the Companies Act, 1956 (Section 2(72) of the
Companies Act, 2013);
scheduled commercial banks;
state industrial development corporations;
the National Investment Fund set up by resolution no. F. No. 2/3/2005-DDII dated November 23, 2005 of the
Government published in the Gazette of India; and
venture capital funds registered with SEBI;
FIIs (other than a sub-account which is a foreign corporate or a foreign individual) and Eligible FPIs are
permitted to participate through the portfolio investment scheme under Schedule 2 and Schedule 2A of
FEMA, respectively, in this Issue. FIIs and Eligible FPIs are permitted to participate in the Issue subject to
compliance with all applicable laws and such that the shareholding of the FPIs do not exceed specified
limits as prescribed under applicable laws in this regard.
In terms of the SEBI FPI Regulations, the issue of Equity Shares to a single FPI or an investor group (which
means the same set of ultimate beneficial owner(s) investing through multiple entities) is not permitted to exceed
10% of our post-Issue Equity Share capital. Further, in terms of the FEMA, the total holding by each FPI shall be
below 10% of the total paid-up Equity Share capital of our Company and the total holdings of all FPIs put
together shall not exceed 24% of the paid-up Equity Share capital of our Company. The aggregate limit of 24%
may be increased up to the sectoral cap by way of a resolution passed by the Board of Directors followed by a
special resolution passed by the shareholders of our Company. Accordingly our Company vide shareholders’
resolution at the EGM dated November 9, 2009, has increased the FII investment limit from 24% to 49%.
Eligible FPIs are permitted to participate in the Issue subject to compliance with conditions and restrictions which
may be specified by the Government from time to time.
An FII who holds a valid certificate of registration from SEBI shall be deemed to be an FPI until the expiry of the
block of three years for which fees have been paid as per the SEBI FII Regulations. An FII or sub-account (other
than a sub-account which is a foreign corporate or a foreign individual) may participate in the Issue, until the
expiry of its registration as a FII or sub-account, or until it obtains a certificate of registration as FPI, whichever is
earlier. If the registration of an FII or sub-account has expired or is about to expire, such FII or sub-account may,
subject to payment of conversion fees under the SEBI FPI Regulations, participate in the Issue. An FII or sub-
account shall not be eligible to invest as an FII after registering as an FPI under the SEBI FPI Regulations.
In terms of the FEMA 20, for calculating the aggregate holding of FPIs in a company, holding of all registered
FPIs as well as holding of FIIs (being deemed FPIs) shall be included. FPI’s investing in this Issue should ensure
that they are eligible under the applicable law or regulation to apply in this Issue.
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Allotments to FVCIs, VCFs and AIFs in the Issue are subject to the rules and regulations that are applicable to
them, including in relation to lock-in requirements.
Under Regulation 86(1)(b) of the SEBI ICDR Regulations, no Allotment shall be made pursuant to the Issue,
either directly or indirectly, to any QIB being, or any person related to, the Promoter. QIBs which have all or any
of the following rights shall be deemed to be persons related to the Promoter:
rights under a shareholders’ agreement or voting agreement entered into with the Promoter or persons related
to the Promoter;
veto rights; or
a right to appoint any nominee director on the Board.
Provided, however, that a QIB which does not hold any shares in our Company and which has acquired the
aforesaid rights in the capacity of a lender shall not be deemed to be related to the Promoter.
Our Company and the BRLMs and any of their respective shareholders, directors, partners, officers,
employees, counsel, advisors, representatives, agents or affiliates are not liable for any amendment or
modification or change to applicable laws or regulations, which may occur after the date of this Placement
Document. QIBs are advised to make their independent investigations and satisfy themselves that they are
eligible to apply. QIBs are advised to ensure that any single application from them does not exceed the
investment limits or maximum number of Equity Shares that can be held by them under applicable law or
regulation or as specified in this Placement Document. Further, QIBs are required to satisfy themselves
that their Bids would not eventually result in triggering a tender offer under the Takeover Code, and the
QIB shall be solely responsible for compliance with the provisions of the Takeover Code, SEBI (Prohibition
of Insider Trading) Regulations and other applicable laws, rules, regulations, guidelines and circulars.
A minimum of 10% of the Equity Shares in the Issue shall be allotted to Mutual Funds. If no Mutual Fund is
agreeable to take up the minimum portion as specified above, such minimum portion (or part thereof not so taken
up) may be allotted to other QIBs.
Note: Affiliates or associates of the BRLMs who are Eligible QIBs may participate in the Issue in compliance with
applicable laws
Application Process
Application Form
QIBs shall only use the serially numbered Application Forms (which are addressed to them) supplied by our
Company and the BRLMs in either electronic form or by physical delivery for the purpose of making a Bid
(including revision of a Bid) in terms of the Preliminary Placement Document.
By making a Bid (including the revision thereof) for Equity Shares through Application Forms and pursuant to the
terms of the Preliminary Placement Document, the QIB will be deemed to have made the following
representations and warranties and the representations, warranties and agreements made under the sections titled
“Notice to Investors”, “Representations by Investors”, “Selling Restrictions” and “Transfer Restrictions”
beginning on pages 1, 3, 132 and 139, respectively, of this Placement Document:
1. The QIB confirms that it is a QIB in terms of Regulation 2(1)(zd) of the SEBI ICDR Regulations and is
not excluded under Regulation 86 of the SEBI ICDR Regulations, has a valid and existing registration
under the applicable laws in India (as applicable) and is eligible to participate in this Issue;
2. The QIB confirms that it is not a Promoter and is not a person related to the Promoter, either directly or
indirectly and its Application Form does not directly or indirectly represent the Promoter or Promoter
Group Entities or persons related to the Promoter;
3. The QIB confirms that it has no rights under a shareholders’ agreement or voting agreement with the
Promoter or persons related to the Promoter, no veto rights or right to appoint any nominee director on
the Board other than those acquired in the capacity of a lender which shall not be deemed to be a person
related to the Promoter;
4. The QIB acknowledges that it has no right to withdraw its Application after the Issue Closing Date;
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5. The QIB confirms that if Equity Shares are Allotted through this Issue, it shall not, for a period of one
year from Allotment, sell such Equity Shares otherwise than on the Stock Exchanges;
6. The QIB confirms that the QIB is eligible to Bid and hold Equity Shares so Allotted. The QIB further
confirms that the holding of the QIB, does not and shall not, exceed the level permissible as per any
applicable regulations applicable to the QIB;
7. The QIB confirms that its Bids would not eventually result in triggering a tender offer under the
Takeover Code;
8. The QIB confirms that to the best of its knowledge and belief, the number of Equity Shares Allotted to it
pursuant to the Issue, together with other Allottees that belong to the same group or are under common
control, shall not exceed 50 per cent of the Issue Size. For the purposes of this representation:
The expression ‘belong to the same group’ shall derive meaning from the concept of ‘companies
under the same group’ as provided in sub-section (11) of Section 372 of the Companies Act,
1956; and
‘Control’ shall have the same meaning as is assigned to it by Regulation 2(1)(e) of the Takeover
Code;
9. The QIBs shall not undertake any trade in the Equity Shares credited to its beneficiary account
maintained with the Depository Participant until such time that the final listing and trading approvals for
the Equity Shares are issued by the Stock Exchanges.
10. The QIB confirms that it is purchasing the Equity Shares in an offshore transaction meeting the
requirements of Rule 903 or 904 of Regulation S and it shall not offer, sell, pledge or otherwise transfer
such Equity Shares except in an offshore transaction complying with Regulation S or pursuant to any
other available exemption from registration under the U.S. Securities Act and in accordance with all
applicable securities laws of the states of the United States and any other jurisdiction, including India. It
also confirms all other applicable representations and warranties included under sections titled “Notice to
Investors”, “Representations by Investors”, “Selling Restrictions” and “ Transfer Restrictions”
beginning at pages 1,3, 132 and 139 of this Placement Document, respectively.
QIBS MUST PROVIDE THEIR DEPOSITORY ACCOUNT DETAILS, PERMANENT ACCOUNT
NUMBER, THEIR DEPOSITORY PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT
IDENTIFICATION NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE APPLICATION
FORM. QIBS MUST ENSURE THAT THE NAME GIVEN IN THE APPLICATION FORM IS
EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. FOR
THIS PURPOSE, ELIGIBLE SUB ACCOUNTS OF AN FII WOULD BE CONSIDERED AS AN
INDEPENDENT QIB.
IF SO REQUIRED BY THE BRLMs, THE QIB SUBMITTING A BID, ALONG WITH THE
APPLICATION FORM, WILL ALSO HAVE TO SUBMIT REQUISITE DOCUMENT(S) TO THE
BRLMs TO EVIDENCE THEIR STATUS AS A "QIB" AS DEFINED HEREINABOVE.
IF SO REQUIRED BY THE BRLMs, COLLECTION BANK(S) OR ANY STATUTORY OR
REGULATORY AUTHORITY IN THIS REGARD, INCLUDING AFTER ISSUE CLOSURE, THE QIB
SUBMITTING A BID AND/OR BEING ALLOTTED EQUITY SHARES IN THE ISSUE, WILL ALSO
HAVE TO SUBMIT REQUISITE DOCUMENT(S) TO FULFILL THE KNOW YOUR CUSTOMER
(KYC) NORMS.
Demographic details such as address and bank account will be obtained from the Depositories as per the
Depository Participant account details given above.
The submission of an Application Form by a QIB shall be deemed a valid, binding and irrevocable offer for the
QIB to pay the entire Issue Price for the Equity Shares (as indicated by the CAN) and becomes a binding contract
on the QIB upon issuance of the CAN by our Company in favour of the QIB.
Bids by Mutual Funds
The bids made by the asset management companies or custodian of Mutual Funds shall specifically state the
127
names of the concerned schemes for which the Bids are made. Each scheme/fund of a mutual fund registered with
SEBI, will have to submit separate Application Form.
Each mutual fund will have to submit separate Application Forms for each of its participating schemes. Such
applications will not be treated as multiple bids provided that the bids clearly indicate the scheme for which the
bid has been made. However, for the purpose of calculating the number of allotters/applicants, various schemes of
the same mutual fund will be considered as a single allottee/applicant.
Demographic details like address, bank account among other will be obtained from the Depositories as per the
demat account details given above. As per the current regulations, the following restrictions are applicable for
investments by Mutual Funds: No Mutual Fund scheme shall invest more than 10% of its net asset value in Equity
Shares or equity related instruments of any company provided that the limit of 10% shall not be applicable for
investments in case of index funds or sector or industry specific funds. No Mutual Fund under all its schemes
should own more than 10% of any company's paid-up capital carrying voting rights.
The above information is given for the benefit of the Bidders. We and the BRLMs are not liable for any
amendments or modification or changes in applicable laws or regulations, which may happen after the date of this
Placement Document. Bidders are advised to make their independent investigations and ensure that the number of
Equity Shares Bid for do not exceed the applicable limits under the applicable laws and regulations.
Submission of Application Form
All Application Forms must be duly completed with information including the number of Equity Shares applied
for. All Application Forms duly completed along with payment and a copy of the PAN card or PAN allotment
letter shall be submitted to the BRLMs either through electronic form or through physical delivery at the
following address:
Name Address Contact Person Contact Details
IIFL Holdings Limited 8th
Floor, IIFL Centre
Kamala City, Senapati
Bapat Marg
Lower Parel (West)
Mumbai - 400 013
Mr. Pinkesh
Soni and
Mr. Gaurav
Singhvi
Tel: + 91 22 4646 4600
Fax:+ 91 22 2493 1073
Email: [email protected]
Centrum Capital Limited
Centrum House, CST
Road, Vidyanagari
Marg, Kalina,
Santacruz – East
Mumbai – 400098,
Ms. Sugandha
Kaushik
Tel : +91 22 42159000
Fax: +91 22 42159736
Email: [email protected]
The BRLMs shall not be required to provide any written acknowledgement of receipt of the Application Form.
Permanent Account Number or PAN
Each QIB should mention its PAN allotted under the IT Act in the Application Form. Applications without this
information will be considered incomplete and are liable to be rejected. QIBs should not submit the GIR number
instead of the PAN as the Application Form is liable to be rejected on this ground.
Pricing and Allocation
Build-up of the Book
The QIBs shall submit their Bids (including the revision of bids) within the Bidding Period to the BRLMs. Such
Bids cannot be withdrawn after the Issue Closing Date. The book shall be maintained by the BRLMs.
Price Discovery and Allocation
Our Company, in consultation with the BRLMs, shall determine the Issue Price, which shall be at or above the
Floor Price. However, our Company may offer a discount of not more than five per cent on the Floor Price in
terms of Regulation 85 of the SEBI ICDR Regulations.
.
128
After finalization of the Issue Price, our Company has updated the Preliminary Placement Document with the
Issue details and file the same with the Stock Exchanges as the Placement Document.
Method of Allocation
Our Company shall determine the Allocation in consultation with the BRLMs on a discretionary basis and in
compliance with Chapter VIII of the SEBI ICDR Regulations. Bids received from the QIBs at or above the Issue
Price shall be grouped together to determine the total demand.
The Allocation to all such QIBs will be made at the Issue Price. Allocation shall be decided by us in consultation
with the BRLMs on a discretionary basis. Allocation to Mutual Funds for up to a minimum of 10 % of the Issue
Size shall be undertaken subject to valid Bids being received at or above the Issue Price.
THE DECISION OF OUR COMPANY IN CONSULTATION WITH THE BRLMS IN RESPECT OF
ALLOCATION SHALL BE FINAL AND BINDING ON ALL QIBS. QIBS MAY NOTE THAT
ALLOCATION OF EQUITY SHARES IS AT THE SOLE AND ABSOLUTE DISCRETION OF OUR
COMPANY IN CONSULTATION WITH THE BRLMs AND QIBS MAY NOT RECEIVE ANY
ALLOCATION EVEN IF THEY HAVE SUBMITTED VALID APPLICATION FORMS AT OR ABOVE
THE ISSUE PRICE. NEITHER OUR COMPANY NOR THE BRLMS ARE OBLIGED TO ASSIGN ANY
REASON FOR ANY NON-ALLOCATION.
CAN
Based on the Application Forms received, our Company, in consultation with the BRLMs, in their sole and
absolute discretion, shall decide the successful Bidder to whom the serially numbered CAN shall be sent, pursuant
to which the details of the Equity Shares Allocated to them and the details of the amounts payable for Allotment
of such Equity Shares in their respective names shall be notified to such successful Bidder. Additionally, a CAN
will include details of the relevant Escrow Cash Account into which such payments would need to be made,
address where the application money needs to be sent, Pay-In Date as well as the probable designated date, being
the date of credit of the Equity Shares to the respective successful Bidder’s account.
The successful Bidders would also be sent a serially numbered Placement Document and CAN either in electronic
form or by physical delivery. The dispatch of the serially numbered Placement Document and CAN to the QIBs
shall be deemed a valid, binding and irrevocable contract for the QIB to furnish all details that may be required by
Company and the BRLMs and to pay the entire Issue Price for all the Equity Shares Allocated to such QIB.
QIBs are advised to instruct their Depository Participant to accept the Equity Shares that may be Allotted
to them pursuant to the Issue.
Bank Account for Payment of Application Money
Our Company has opened an escrow bank account; the “Talwalkars Better Value Fitness Limited – QIP Escrow
Account” with the Escrow Bank in terms of the arrangement among our Company, the BRLMs and Deustche
Bank AG as escrow bank. The QIB to whom CAN is sent will be required to deposit the entire amount payable for
the Equity Shares Allocated to it by the Pay-In Date as mentioned in, and in accordance with, the respective CAN.
Payments are to be made only through electronic fund transfer.
Note: Payments through cheques are liable to be rejected.
If the payment is not made favoring “Talwalkars Better Value Fitness Limited – QIP Escrow Account” within the
time stipulated in the CAN, the Application Form and the CAN of the QIB are liable to be cancelled. Pending
Allotment, our Company undertakes to utilise the amount deposited in “Talwalkars Better Value Fitness Limited –
QIP Escrow Account” only for the purposes of (i) adjustment against Allotment of Equity Shares in the Issue; or
(ii) repayment of application money if our Company is not able to Allot Equity Shares in the Issue.
In case of cancellations or default by the QIBs, our Company, the BRLMs has the right to reallocate the Equity
Shares at the Issue Price among existing or new QIBs at their sole and absolute discretion.
Designated Date and Allotment of Equity Shares
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The Equity Shares will not be Allotted unless the QIBs pay the amount payable as mentioned in the CAN issued
to them to the “Talwalkars Better Value Fitness Limited – QIP Escrow Account” as stated above. The Equity
Shares in the Issue will be issued and Allotment shall be made only in dematerialized form to the Allottees.
Allottees will have the option to re-materialize the Equity Shares, if they so desire, as per the provisions of the
Companies Act and the Depositories Act. Post the Allotment, the Allottees would be sent a serially numbered
Placement Document either in electronic form or by physical delivery.
Our Company, at its sole discretion, reserves the right to cancel the Issue at any time up to Allotment without
assigning any reason whatsoever. Post the Allotment and credit of Equity Shares into the QIBs’ Depository
Participant accounts, our Company will apply for final trading and listing approvals from the Stock Exchanges.
In the case of QIBs who have been Allotted more than five (5) per cent of the Equity Shares in the Issue, our
Company shall disclose the name and the number of the Equity Shares Allotted to such QIB to the Stock
Exchanges and the Stock Exchanges will make the same available on their website. Our Company shall make the
requisite filings with the RoC and the SEBI within the stipulated period as required under the Companies Act,
2013 and the Companies (Prospectus and Allotment of Securities) Rules, 2014. If QIBs are allotted any Equity
Shares, our Company is required to disclose details such as your name, address and the number of Equity Shares
allotted to the RoC and the SEBI.
The Escrow Bank shall release the monies lying to the credit of the Escrow Cash Account to our Company after
Allotment of Equity Shares to QIBs.
In accordance with the Companies Act, 2013, in the event that our Company is unable to issue and Allot the
Equity Shares offered in the Issue or there is a cancellation of the Issue within 60 days from the date of receipt of
application money from a successful Bidder, our Company shall repay the application money within 15 days from
expiry of 60 day period, failing which our Company shall repay that money to such successful Bidders with
interest at the rate of 12 per cent per annum from expiry of the 60th
day. The application money to be refunded by
us shall be refunded to the same bank account from which application money was remitted by the QIBs.
Other Instructions
Right to Reject Applications
Our Company, in consultation with the BRLMs, may reject Bids, in part or in full, without assigning any reason
whatsoever. The decision of our Company and the BRLMs in relation to the rejection of Bids shall be final and
binding.
Equity Shares in Dematerialized form with NSDL or CDSL
The Allotment of the Equity Shares in the Issue shall be only in dematerialized form (i.e., not in physical
certificates but be fungible and be represented by the statement issued through the electronic mode). A QIB
applying for Equity Shares to be issued pursuant to the Issue must have at least one beneficiary account with a
Depository Participant of either NSDL or CDSL prior to making the Bid. Allotment to a successful QIB will be
credited in electronic form directly to the beneficiary account (with the Depository Participant) of the QIB.
Equity Shares in electronic form can be traded only on the stock exchanges having electronic connectivity with
NSDL and CDSL. The Stock Exchanges have electronic connectivity with NSDL and CDSL. The trading of the
Equity Shares to be issued pursuant to the Issue would be in dematerialised form only for all QIBs in the demat
segment of the respective Stock Exchanges.
Our Company and the BRLMs will not be responsible or liable for the delay in the credit of Equity Shares to be
issued pursuant to the Issue due to errors in the Application Form or otherwise on part of the QIBs.
Release of funds to our Company
The Escrow Bank shall not release the monies lying to the credit of the “Talwalkars Better Value Fitness Limited
– QIP Escrow Account” till such time, that it receives an instruction in pursuance to the Escrow Agreement, along
with the Listing approval of the Stock Exchanges for the Equity Shares offered in the Issue.
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PLACEMENT
Placement Agreement
The BRLMs has entered into a placement agreement dated June 17, 2015 with our Company (the “Placement
Agreement”), pursuant to which the BRLMs has agreed to procure, on a reasonable efforts basis, QIBs to
subscribe for Equity Shares to be issued pursuant to the Issue, pursuant to Chapter VIII of the SEBI ICDR
Regulations and Section 42 of the Companies Act, 2013 and other applicable provisions of the Companies Act
and Rules made thereunder.
The Placement Agreement contains customary representations and warranties as well as indemnities from us and
is subject to certain conditions and termination provisions contained therein.
Applications will be made to list the Equity Shares and admit them to trading on the Stock Exchanges. No
assurance can be given as to the liquidity or sustainability of the trading market for the Equity Shares, the ability
of holders of the Equity Shares to sell their Equity Shares or the price at which holders of the Equity Shares will
be able to sell their Equity Shares.
This Placement Document has not been, and will not be, registered as a prospectus with the Registrar of
Companies in India and no Equity Shares will be offered in India or overseas to the public or any members of the
public in India or to any class of investors other than QIBs.
The Equity Shares have not been and will not be registered under the U.S. Securities Act and may not be offered
or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S)
except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S.
Securities Act and applicable state securities laws. Accordingly, the Equity Shares are being offered and sold
outside the United States in reliance on Regulation S. The Equity Shares are transferable only in accordance with
the restrictions described under “Selling Restrictions” and “Transfer Restrictions” beginning on page 132 and
139 respectively, of this Placement Document.
In connection with this Issue, the BRLMs (or their affiliates) may, for their own accounts, enter into asset swaps,
credit derivatives or other derivative transactions relating to the Equity Shares at the same time as the offer and
sale of the Equity Shares, or in secondary market transactions. As a result of such transactions, the BRLMs may
hold long or short positions in such Equity Shares. These transactions may comprise a substantial portion of the
Issue and no specific disclosure will be made of such positions. Affiliates of the BRLMs may purchase Equity
Shares and be allocated Equity Shares for proprietary purposes and not with a view to distribution or in
connection with the issuance of offshore derivative instruments.
The BRLMs and certain of their affiliates have in past provided, currently provide and may in the future from time
to time provide, investment banking, general financing and banking and advisory services to our Company and
our affiliates for which they have in the past received, currently receive and may in the future receive, customary
fees.
Lock-up
Our Company has agreed that it will not, without the prior written consent of the BRLMs (which such consent
shall not be unreasonably withheld), for the period commencing from the date of the Placement Agreement and
ending 90 days from the Closing Date (“Lock-up Period”), directly or indirectly: (a) issue, offer, lend, sell,
pledge, contract to sell or issue, sell any option or contract to purchase, purchase any option or contract to sell or
issue, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly,
any Equity Shares, or any securities convertible into or exercisable or exchangeable for Equity Shares or publicly
announce an intention with respect to any of the foregoing; (b) enter into any swap or other agreement that
transfers, directly or indirectly, in whole or in part, any of the economic consequences of ownership of Equity
Shares or any securities convertible into or exercisable or exchangeable for Equity Shares; or (c) deposit Equity
Shares with any other depositary in connection with a depositary receipt facility, or (d) enter into any transaction
(including a transaction involving derivatives) having an economic effect similar to that of an issue, offer, sale or
deposit of the Equity Shares in any depository receipt facility; or (e) publicly announce any intention to enter into
any transaction whether any such transaction described in (a) or (b) above is to be settled by delivery of Equity
Shares, or such other securities, in cash or otherwise.
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Our Promoters have agreed that without the prior written consent of the BRLMs (which such consent shall not be
unreasonably withheld), it will not, during the period commencing from the date of the Placement Agreement and
ending 90 days after the date of allotment of the Issue Shares, directly or indirectly: (a) sell, lend, pledge, contract
to sell, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise
transfer or dispose of, directly or indirectly, any Equity Shares, or any securities convertible into or exercisable or
exchangeable for Equity Shares or publicly announce an intention with respect to any of the foregoing; (b) enter
into any swap or other agreement that transfers, directly or indirectly, in whole or in part, any of the economic
consequences of ownership of Equity Shares or any securities convertible into or exercisable or exchangeable for
Equity Shares; or (c) deposit Equity Shares with any other depositary in connection with a depositary receipt
facility, or (d) enter into any transaction (including a transaction involving derivatives) having an economic effect
similar to that of an issue, offer, sale or deposit of the Equity Shares in any depository receipt facility; (e) publicly
announce any intention to enter into any transaction whether any such transaction described in (a) or (b) above is
to be settled by delivery of Equity Shares, or such other securities, in cash or otherwise; provided however that the
foregoing restrictions will (i) not be applicable to any pledge or mortgage of the Equity Shares already existing on
the date of the Placement Agreement or transfer of such existing pledge or mortgage; and (ii) not restrict the
existing shareholders of our Company from acquiring or purchasing any Equity Shares in our Company, directly
or indirectly, in accordance with and subject to applicable laws.
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SELLING RESTRICTIONS
The distribution of this Placement Document and the offer, sale or delivery of the Equity Shares is restricted by
law in certain jurisdictions. Persons who come into possession of this Placement Document are advised to take
legal advice with regard to any restrictions that may be applicable to them and to observe such restrictions. This
Placement Document may not be used for the purpose of an offer or sale in any circumstances in which such offer
or sale is not authorized or permitted. General
No action has been taken or will be taken that would permit a public offering of the Equity Shares to occur in any
jurisdiction, or the possession, circulation or distribution of this Placement Document or any other material
relating to the Company or the Equity Shares in any jurisdiction where action for such purpose is required.
Accordingly, the Equity Shares may not be offered or sold, directly or indirectly, and neither this Placement
Document nor any offering materials or advertisements in connection with the Equity Shares may be distributed
or published in or from any country or jurisdiction except under circumstances that will result in compliance with
any applicable rules and regulations of any such country or jurisdiction. The Issue will be made in compliance
with the applicable SEBI Regulations. Each purchaser of the Equity Shares in the Offer will be required to make,
or be deemed to have made, as applicable, the acknowledgments and agreements as described under “Transfer
Restrictions” on page 139 of this Placement Document.
Australia
This Placement Document is not a disclosure document under Chapter 6D or Part 7.9 of the Corporations Act
2001 of the Commonwealth of Australia (the “Australian Corporations Act”), has not been and will not be
lodged with the Australian Securities and Investments Commission (the “ASIC”) as a disclosure document for the
purposes of the Australian Corporations Act and does not purport to include the information required of a
disclosure document under the Australian Corporations Act. ASIC has not reviewed this Placement Document or
commented on the merits of investing in the Equity Shares, nor has any other Australian regulator.
No offer of the Equity Shares is being made in Australia, and the distribution or receipt of this Placement
Document in Australia does not constitute an offer of securities capable of acceptance by any person in Australia,
except in the limited circumstances described below relying on certain exemptions in the Corporations Act.
Accordingly,
(i) the offer of the Equity Shares in Australia under this Placement Document may only be made to those
select persons who are able to demonstrate that they are “Wholesale Clients” for the purposes of Chapter
7 of the Australian Corporations Act and fall within one or more of the following categories:
“Sophisticated Investors” that meet the criteria set out in Section 708(8) of the Australian Corporations
Act, “Professional Investors” who meet the criteria set out in Section 708(11) and as defined in Section 9
of the Australian Corporations Act, experienced investors who receive the offer through an Australian
financial services licensee where all of the criteria set out in section 708(10) of the Australian
Corporations Act have been satisfied or senior managers of the Company (or a related body, including a
subsidiary), their spouse, parent, child, brother or sister, or a body corporate controlled by any of those
persons, as referred to in section 708(12) of the Australian Corporations Act; and
(ii) this Placement Document may only be made available in Australia to those persons who are able to
demonstrate that they are within one of the categories of persons as set forth in clause (i) above.
The Equity Shares may not be directly or indirectly offered for subscription or purchased or sold, and no
invitations to subscribe for or buy the Equity Shares may be issued, and no draft or definitive Placement
Document, advertisement or other offering material relating to any of the Equity Shares may be distributed in
Australia except where disclosure to investors is not required under Chapter 6D or Chapter 7 of the Australian
Corporations Act or is otherwise in compliance with all applicable Australian laws and regulations. As any offer
of the Equity Shares under this Placement Document will be made without disclosure in Australia under the
Australian Corporations Act, the offer of those Equity Shares for resale in Australia within 12 months may, under
sections 707 or 1012C of the Australian Corporations Act, require disclosure to investors under the Australian
Corporations Act if none of the exemptions in the Australian Corporations Act apply to that resale.
133
Accordingly, any person who acquires the Equity Shares pursuant to this Placement Document should not, within
12 months of acquisition of the Equity Shares, offer, transfer, assign or otherwise alienate those Equity Shares to
investors in Australia except in circumstances where disclosure to investors is not required under the Australian
Corporations Act or unless a complaint disclosure document is prepared and lodged with the Australian Securities
and Investments Commission. Any person who accepts an offer of the Equity Shares under this Placement
Document must represent that, if they are in Australia, they are such a person as set forth in clause (i) above and
acknowledge the restrictions on the on-sale of the Equity Shares set out above.
The provisions that define the exempt categories of person as set forth in clause (i) above are complex, and, if you
are in any doubt as to whether you fall within one of these categories, you should seek appropriate professional
advice regarding those provisions. This Placement Document is intended to provide general information only and
has been prepared without taking into account any particular person's objectives, financial situation or needs.
Investors should, before acting on this information, consider the appropriateness of this information having regard
to their personal objectives, financial situation or needs. Investors should review and consider the contents of this
Placement Document and obtain financial advice specific to their situation before making any decision to make an
application for the Equity Shares.
Cayman Islands
No offer or invitation to purchase Equity Shares may be made to the public in the Cayman Islands.
Dubai International Financial Centre
This Placement Document relates to an exempt offer (an “Exempt Offer”) in accordance with the Offered
Securities Rules of the Dubai Financial Services Authority (the “DFSA”). This Placement Document is intended
for distribution only to persons of a type specified in those rules. It must not be delivered to, or relied on by, any
other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with
Exempt Offers. The DFSA has not approved this Placement Document nor taken steps to verify the information
set out in it, and has no responsibility for it. The Equity Shares to which this Placement Document relates may be
illiquid and/or subject to restrictions on their resale. Prospective purchasers of the Equity Shares offered should
conduct their own due diligence on the Equity Shares. If you do not understand the contents of this Placement
Document, you should consult an authorized financial adviser. For the avoidance of doubt, the Equity Shares are
not interests in a “fund” or a “collective investment scheme” within the meaning of either the Collective
Investment Law (DIFC Law No. 2 of 2010) or the Collective Investment Rules Module of the Dubai Financial
Services Authority Rulebook.
European Economic Area
This Placement Document has been prepared on the basis that this Issue will be made pursuant to an exemption
under the Prospectus Directive as implemented in member states of the European Economic Area (“EEA”) from
the requirement to produce and publish a prospectus which is compliant with the Prospectus Directive, as so
implemented, for offers of the Equity Shares. Accordingly, any person making or intending to make any offer
within the EEA or any of its member states (each, a “Relevant Member State”) of the Equity Shares which are
the subject of the Allotment referred to in this Placement Document must only do so in circumstances in which no
obligation arises for the Company or any of the BRLMs to produce and publish a prospectus which is compliant
with the Prospectus Directive, including Article 3 thereof, as so implemented for such offer. For EEA jurisdictions
that have not implemented the Prospectus Directive, all offers of the Equity Shares must be in compliance with
the laws of such jurisdictions. None of the Company or the BRLMs have authorized, nor do they authorize, the
making of any offer of the Equity Shares through any financial intermediary, other than offers made by the
BRLMs, which constitute a final Allotment of the Equity Shares.
In relation to each Relevant Member State, each Book Running Lead Manager has represented and agreed that
with effect from and including the date on which the Prospectus Directive is implemented in that Relevant
Member State (the “Relevant Implementation Date”), it has not made and will not make an offer of the Equity
Shares which are the subject of the Offer contemplated by this Placement Document to the public in that Relevant
Member State other than:
(i) to any legal entity which is a qualified investor as defined in the Prospectus Directive;
(ii) to fewer than 100 natural or legal persons or, if the Relevant Member State has implemented the relevant
provision of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified
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investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive subject to
obtaining the prior consent of the BRLMs nominated by the Company for any such offer; or
(iii) in any other circumstances falling within Article 3(2) of the Prospectus Directive;
provided that no such offer of the Equity Shares shall result in a requirement for the publication by the Company
or the BRLMs of a prospectus pursuant to Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an “offer of Equity Shares to the public” in relation to any
Equity Shares in any Relevant Member State means the communication in any form and by any means of
sufficient information on the terms of the offer and the Equity Shares to be offered so as to enable an investor to
decide to purchase or subscribe for the Equity Shares, as such expression may be varied in the Relevant Member
State by any measure implementing the Prospectus Directive in that Relevant Member State. For the purposes of
this provision, the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto,
including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and
includes any relevant implementing measure in the Relevant Member State; and the expression “2010 PD
Amending Directive” means Directive 2010/73/EU.
Each subscriber for, or purchaser of, the Equity Shares in the Offer located within a Relevant Member State will
be deemed to have represented, acknowledged and agreed that it is a “qualified investor” within the meaning of
Article 2(1)(e) of the Prospectus Directive. The Company, each Book Running Lead Manager and their affiliates
and others will rely upon the truth and accuracy of the foregoing representation, acknowledgment and agreement.
Germany
This Placement Document has not been prepared in accordance with the requirements for a sales prospectus under
the German Securities Prospectus Act (Wertpapierprospektgesetz), the German Sales Prospectus Act
(Verkaufsprospektgesetz), or the German Investment Act (Investmentgesetz). Neither the German Federal
Financial Services Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht - BaFin) nor any other
German authority has been notified of the intention to distribute the Equity Shares in Germany. The Equity Shares
may therefore not be distributed in the Federal Republic of Germany by way of public offering, public advertising
or in a similar manner. The Equity Shares are being offered and sold in Germany only to (i) qualified investors in
the meaning of Section 3, paragraph 2 no. 1, in connection with Section 2, no. 6, of the German Securities
Prospectus Act, or (ii) a limited number of individualized, unqualified investors that are being preselected and
specifically addressed. This Placement Document is strictly for use of the person who has received it. It may not
be forwarded to other persons or published in Germany.
Hong Kong
No Equity Shares have been offered or sold, and no Equity Shares may be offered or sold, in Hong Kong by
means of any document, other than to persons whose ordinary business is to buy or sell shares or debentures,
whether as principal agent; or to “professional investors” as defined in the Securities and Futures Ordinance (Cap.
571) of Hong Kong and any rules made under that Ordinance; or in other circumstances which do not result in the
document being a “prospectus” as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not
constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32) of Hong Kong. No
document, invitation or advertisement relating to the Equity Shares has been issued or may be issued, which is
directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if
permitted under the securities laws of Hong Kong) other than with respect to the Equity Shares which are intended
to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the
Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance.
Japan
The offering of the Equity Shares has not been and will not be registered under the Financial Instruments and
Exchange Law of Japan, as amended (the “Financial Instruments and Exchange Law”). No Equity Shares have
been offered or sold, and will not be offered or sold, directly or in directly, in Japan or to, or for the benefit of, any
resident of Japan (which term as used herein means any person resident in Japan, including any corporation or
other entity organized under the laws of Japan) or to others for reoffering or re-sale, directly or indirectly in Japan
or to, or for the benefit of, any resident of Japan except pursuant to an exemption from the registration
requirements of the Financial Instruments and Exchange Law and otherwise in compliance with the Financial
Instruments and Exchange Law and any other applicable laws, regulations and ministerial ordinances of Japan.
135
Korea
The Equity Shares have not been registered under the Korean Securities and Exchange Law, and the Equity
Shares acquired in connection with the distribution contemplated hereby may not be offered or sold, directly or
indirectly, in Korea or to or for the account of any resident thereof, except as otherwise permitted by applicable
Korean laws and regulations, including, without limitation, the Korean Securities and Exchange Law and the
Foreign Exchange Transaction Laws.
Kuwait
The Equity Shares have not been authorized or licensed for offering, marketing or sale in the State of Kuwait. The
distribution of this Placement Document and the offering and sale of the Equity Shares in the State of Kuwait is
restricted by law unless a license is obtained from the Kuwaiti Ministry of Commerce and Industry in accordance
with Law 31 of 1990.
Malaysia
No approval of the Securities Commission of Malaysia has been or will be obtained in connection with the offer
and sale of the Equity Shares in Malaysia nor will any prospectus or other offering material or document in
connection with the offer and sale of the Equity Shares be registered with the Securities Commission of Malaysia.
Accordingly, the Equity Shares may not be offered or sold, directly or indirectly, nor may any document or other
material in connection therewith be distributed in Malaysia.
Mauritius
Our shares may not be offered, distributed or sold, directly or indirectly, in Mauritius or to any resident of
Mauritius, except as permitted by applicable Mauritius securities law. No offer or distribution of securities will be
made to the public in Mauritius.
New Zealand
This Placement Document is not a prospectus. It has not been prepared or registered in accordance with the
Securities Act 1978 of New Zealand (the “New Zealand Securities Act”). This Placement Document is being
distributed in New Zealand only to persons whose principal business is the investment of money or who, in the
course of and for the purposes of their business, habitually invest money, within the meaning of section 3(2)(a)(ii)
of the New Zealand Securities Act (“Habitual Investors”). By accepting this Placement Document, each investor
represents and warrants that if they receive this Placement Document in New Zealand they are a Habitual Investor
and they will not disclose this Placement Document to any person who is not also a Habitual Investor.
Oman
By receiving the Placement Document, the person or entity to whom it has been issued understands,
acknowledges and agrees that the Placement Document has not been approved by the Capital Market Authority of
Oman (the “CMA”:) or any other regulatory body or authority in the Sultanate of Oman (“Oman”), nor have the
Book Running Lead Managers or any placement agent acting on their behalf received authorisation, licensing or
approval from the CMA or any other regulatory authority in Oman, to market, offer, sell, or distribute interests in
the Equity Shares within Oman.
No marketing, offering, selling or distribution of any interests in the Equity Shares has been or will be made from
within Oman and no subscription for any interests in the Equity Shares may or will be consummated within
Oman. Neither the Book Running Lead Managers nor any placement agent acting on their behalf is a company
licensed by the CMA to provide investment advisory, brokerage, or portfolio management services in Oman, nor a
bank licensed by the Central Bank of Oman to provide investment banking services in Oman. Neither the Book
Running Lead Managers nor any placement agent acting on their behalf advise persons or entities resident or
based in Oman as to the appropriateness of investing in or purchasing or selling securities or other financial
products.
Nothing contained in the Placement Document is intended to constitute Omani investment, legal, tax, accounting
or other professional advice. The Placement Document is for your information only, and nothing herein is
intended to endorse or recommend a particular course of action. You should consult with an appropriate
professional for specific advice on the basis of your situation.
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People’s Republic of China
This Placement Document, may not be circulated or distributed in the People‘s Republic of China and the Equity
Shares may not be offered or sold directly or indirectly to any resident of the People‘s Republic of China, or
offered or sold to any person for reoffering or resale directly or indirectly to any resident of the People‘s Republic
of China except pursuant to applicable laws and regulations of the People‘s Republic of China. The BRLMs have
represented and agreed that neither they nor any of their respective affiliates has offered or sold or will offer or
sell any of the Equity Shares in the People‘s Republic of China (excluding Hong Kong, Macau and Taiwan) as
part of the Issue. We do not represent that this Placement Document may be lawfully distributed, or that any
Equity Shares may be lawfully offered, in compliance with any applicable registration or other requirements in the
People‘s Republic of China, or pursuant to an exemption available thereunder, or assume any responsibility for
facilitating any such distribution or offering. In particular, no action has been taken by us which would permit a
public offering of any Equity Shares or distribution of this document in the People‘s Republic of China.
Accordingly, the Equity Shares are not being offered or sold within the People‘s Republic of China by means of
this Placement Document or any other document. Neither this Placement Document nor any advertisement or
other offering material may be distributed or published in the People‘s Republic of China, except under
circumstances that will result in compliance with any applicable laws and regulations.
Qatar
The Equity Shares have not been offered, sold or delivered, and will not be offered, sold or delivered at any time,
directly or indirectly, in the state of Qatar in a manner that would constitute a public offering. This Placement
Document has not been reviewed or registered with Qatari Government Authorities, whether under Law No. 25
(2002) concerning investment funds, Central Bank resolution No. 15 (1997), as amended, or any associated
regulations. Therefore, this Placement Document is strictly private and confidential, and is being issued to a
limited number of sophisticated investors, and may not be reproduced or used for any other purposes, nor
provided to any person other than recipient thereof.
Singapore
The BRLMs have acknowledged that this Placement Document has not been registered as a prospectus with the
Monetary Authority of Singapore. Accordingly, the BRLMs have represented and agreed that it has not offered or
sold any Equity Shares issued pursuant to the Issue or caused such Equity Shares to be made the subject of an
invitation for subscription or purchase and will not offer or sell such Equity Shares issued pursuant to the Issue or
cause such Equity Shares to be made the subject of an invitation for subscription or purchase, and have not
circulated or distributed, nor will they circulate or distribute, this Placement Document or any other document or
material in connection with the offer or sale, or invitation for subscription or purchase, of such Equity Shares
issued pursuant to the Issue, whether directly or indirectly, to persons in Singapore other than (i) to an institutional
investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (“SFA”), (ii) to a relevant
person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the
conditions specified in Section 275 of the SFA, or (iii) otherwise pursuant to, and in accordance with the
conditions of, any other applicable provision of the SFA.
Where the Equity Shares are subscribed or purchased under Section 275 by a relevant person which is:
a corporation (which is not an accredited investor) (as defined in Section 4A of the SFA) the sole
business of which is to hold investments and the entire share capital of which is owned by one or more
individuals, each of whom is an accredited investor; or
a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and
each beneficiary of the trust is an individual who is an accredited investor,
securities (as defined in Section 239(1) of the SFA) of that corporation to the beneficiaries’ rights and
interest (howsoever described) in that trust shall not be transferred within 6 months after that corporation
or that trust has acquired the Equity Shares pursuant to an offer made under Section 275 except:
to an institutional investor under Section 274 of the SFA or to a relevant person defined in Section 275(2)
of the SFA, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B)
of the SFA;
where no consideration is or will be given for the transfer;
where the transfer is by operation of law; or
as specified in Section 276(7) of the SFA.
Switzerland
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This Placement Document does not constitute an issue prospectus pursuant to Art. 652a of the Swiss Code of
Obligations. The Equity Shares will not be listed on the SWX Swiss Exchange, and therefore, this Placement
Document does not comply with the disclosure standards of the Listing Rules of the SWX Swiss Exchange.
Accordingly, the Equity Shares may not be offered to the public in or from Switzerland, but only to a selected and
limited group of investors, which do not subscribe the Shares with a view to distribution to the public. The
investors will be individually approached by the BRLMs. This Placement Document is personal to each offeree
and does not constitute an offer to any other person. This Placement Document may only be used by those persons
to whom it has been handed out in connection with the offer described herein and may neither directly nor
indirectly be distributed or made available to other persons without the express consent of our Company. It may
not be used in connection with any other offer and shall in particular not be copied and/or distributed to the public
in or from Switzerland.
United Arab Emirates
This Placement Document is not intended to constitute an offer, sale or delivery of shares or other securities under
the laws of the United Arab Emirates (the “UAE”). The Equity Shares have not been and will not be registered
under Federal Law No. 4 of 2000 Concerning the Emirates Securities and Commodities Authority and the
Emirates Security and Commodity Exchange, or with the UAE Central Bank, the Dubai Financial Market, the
Abu Dhabi Securities market or with any other UAE exchange. the Issue, the Equity Shares and interests therein
do not constitute a public offer of securities in the UAE in accordance with the Commercial Companies Law,
Federal Law No. 8 of 1984 (as amended) or otherwise. The Placement Document is strictly private and
confidential and is being distributed to a limited number of investors and must not be provided to any person other
than the original recipient, and may not be reproduced or used for any other purpose. The interests in the Equity
Shares may not be offered or sold directly or indirectly to the public in the UAE.
By receiving the Placement Document, the person or entity to whom this Placement Document has been issued
understands, acknowledges and agrees that the Equity Shares have not been and will not be offered, sold or
publicly promoted or advertised in the Dubai International Financial Centre other than in compliance with laws
applicable in the Dubai International Financial Centre, governing the issue, offering or sale of securities. The
Dubai Financial Services Authority has not approved this Placement Document nor taken steps to verify the
information set out in it, and has no responsibility for it.
United Kingdom
The Book Running Lead Managers have represented and agreed that each of them:
is a person who is a qualified investor within the meaning of Section 86(7) of the Financial Services
and Markets Act 2000 (the “FSMA”), being an investor whose ordinary activities involve it in
acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of its
business;
has not offered or sold and will not offer or sell the Equity Shares other than to persons who are
qualified investors within the meaning of Section 86(7) of the FSMA or who it reasonably expects will
acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their
businesses where the issue of the Equity Shares would otherwise constitute a contravention of Section
19 of the FSMA by us;
has only communicated or caused to be communicated and will only communicate or cause to be
communicated an invitation or inducement to engage in investment activity (within the meaning of
Section 21 of the FSMA) received by it in connection with the issue or sale of the Equity Shares in
circumstances in which Section 21(1) of the FSMA does not apply to it; and
has complied and will comply with all applicable provisions of the FSMA with respect to anything
done by it in relation to the Equity Shares in, from or otherwise involving the United Kingdom.
United States of America
The Equity Shares have not been and will not be registered under the Securities Act, and may not be offered or
sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act. Accordingly, the Equity Shares are being offered and sold outside
the United States in offshore transactions in reliance on Regulation S. Each purchaser of the Equity Shares will be
deemed to have made the representations, agreements and acknowledgements as described under section
“Transfer Restrictions” beginning on page 139 of the Placement Document.
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TRANSFER RESTRICTIONS
The Equity Shares Allotted in the Issue are not permitted to be sold for a period of one year from the date of
Allotment, except on the Stock Exchanges. Due to the following restrictions, Investors are advised to consult legal
counsel prior to making any offer, resale, pledge or transfer of the Equity Shares, except if the resale of the Equity
Shares is by way of a regular sale on the Stock Exchanges. Subject to the foregoing, by accepting this Placement
Document and purchasing any Equity Shares under the Issue, you are deemed to have represented, warranted,
acknowledged and agreed with the Company and the BRLMs as follows:
you have received a copy of the Preliminary Placement Document and such other information as you deem
necessary to make an informed decision and that you are not relying on any other information or the
representation concerning the Company or the Equity Shares and neither the Company nor any other person
responsible for this document or any part of it or the BRLMs will have any liability for any such other
information or representation;
you are purchasing the Equity Shares in an offshore transaction meeting the requirements of Rule 903 or 904
of Regulation S and you agree that you will not offer, sell, pledge or otherwise transfer such Equity Shares
except in offshore transactions complying with Regulation S or pursuant to any other available exemption
from registration under the U.S. Securities Act and in accordance with all applicable securities laws of the
states of the United States and any other jurisdiction, including India;
you are authorised to consummate the purchase of the Equity Shares in compliance with all applicable laws
and regulations;
you acknowledge (or if you are a broker-dealer acting on behalf of a customer, your customer has confirmed
to you that such customer acknowledges) that such Equity Shares have not been and will not be registered
under the U.S. Securities Act;
you certify that either (A) you are, or at the time the Equity Shares are purchased will be, the beneficial owner
of the Equity Shares and are located outside the United States (within the meaning of Regulation S) or (B)
you are a broker-dealer acting on behalf of your customer and your customer has confirmed to you that (i)
such customer is, or at the time the Equity Shares are purchased will be, the beneficial owner of the Equity
Shares, and (ii) such customer is located outside the United States (within the meaning of Regulation S); and
the Company, the BRLMs, their respective affiliates and others will rely upon the truth and accuracy of your
representations, warranties, acknowledgements and undertakings set out in this document, each of which is
given to (a) the BRLMs on its own behalf and on behalf of the Company, and (b) to the Company, and each
of which is irrevocable and, if any of such representations, warranties, acknowledgements or undertakings
deemed to have been made by virtue of your purchase of the Equity Shares are no longer accurate, you will
promptly notify the Company.
Any resale or other transfer, or attempted resale or other transfer, of the Equity Shares made other than in
compliance with the above-stated restrictions will not be recognized by our Company.
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INDIAN SECURITIES MARKET
The information in this section has been extracted from documents available on the website of SEBI and the Stock
Exchange and has not been prepared or independently verified by our Company or the BRLMs or any of their
respective affiliates or advisors.
India has a long history of organized securities trading. In 1875, the first stock exchange was established in
Mumbai.
Indian Stock Exchanges
Indian stock exchanges are regulated primarily by SEBI, as well as by the Government acting through the
Ministry of Finance, Capital Markets Division, under the Securities and Exchange Board of India Act, 1992, as
amended (the "SEBI Act"), the Securities Contracts (Regulation) Act, 1956, as amended (the "SCRA") and the
Securities Contracts (Regulation) Rules, 1957, as amended (the "SCRR"). On June 20, 2012, SEBI, in exercise of
its powers under the SCRA and the SEBI Act notified the Securities Contracts (Regulation) (Stock Exchanges and
Clearing Corporations) Regulations, 2012 (the "SCR (SECC) Rules"), which regulate inter alia the recognition,
ownership and internal governance of stock exchanges and clearing corporations in India together with providing
for minimum capitalisation requirements for stock exchanges. The SCRA, the SCRR and the SCR (SECC) Rules
along with various rules, bye-laws and regulations of the respective stock exchanges, regulate the recognition of
stock exchanges, the qualifications for membership thereof and the manner, in which contracts are entered into,
settled and enforced between members of the stock exchanges.
The SEBI Act empowers SEBI to regulate the Indian securities markets, including stock exchanges and
intermediaries in the securities markets, promote and monitor self-regulatory organisations and prohibit fraudulent
and unfair trade practices. Regulations and guidelines concerning minimum disclosure requirements by public
companies, investor protection, insider trading, substantial acquisitions of shares and takeover of companies, buy-
backs of securities, employee stock option schemes, stockbrokers, merchant bankers, underwriters, mutual funds,
foreign institutional investors, foreign portfolio investors, credit rating agencies and other securities market
participants have been notified by the SEBI.
Most of the stock exchanges have their own governing board for self regulation. The BSE and the NSE together
hold a dominant position among the stock exchanges in terms of the number of listed companies, market
capitalization and trading activity.
Listing and delisting of Securities
The listing of securities on a recognised Indian stock exchange is regulated by the applicable Indian laws
including the Companies Act, the SCRA, the SCRR, the SEBI Act and various guidelines and regulations issued
by the SEBI and the Listing Agreements of the respective stock exchanges. The SCRA empowers the governing
body of each recognised stock exchange to suspend trading of or withdraw admission to dealings in the securities
of a listed company for a breach of or non - compliance with, any of the conditions or breach of company’s
obligations under such Listing Agreement or for any reason, subject to the issuer receiving prior written notice of
the intent of the exchange and upon granting of a hearing in the matter. SEBI also has the power to amend such
Listing Agreements and bye-laws of the stock exchanges in India, to overrule a stock exchange’s governing body
and withdraw recognition of a recognized stock exchange.
SEBI has notified the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 in
relation to the voluntary and compulsory delisting of equity shares from the stock exchanges. In addition, certain
amendments to the SCRR have also been notified in relation to delisting. SEBI has, in its board meeting on
November 19, 2014, approved certain amendments to the Delisting Regulations, pursuant to which delisting shall
be considered successful only when the shareholding of the acquirer together with the shares tendered by public
shareholders reaches 90% of the total share capital of the company, and if at least 25% of the number of public
shareholders, holding shares in dematerialized mode as on the date of the meeting of the board of directors of the
company approving the delisting proposal, tender in the reverse book building process. Among other
amendments, timelines for completing the delisting process have been reduced from 137 calendar days
(approximately 117 working days) to 76 working days, and an option has been provided to the acquirer to delist
the shares of the company directly through the Delisting Regulations pursuant to triggering the Takeover Code has
been provided. In addition, certain amendments to the SCRR have also been notified in relation to delisting.
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Minimum level of public shareholding
All listed companies are required to maintain a minimum public shareholding of 25% and in this regard, SEBI has
amended the listing agreement and has provided several mechanisms to comply with this requirement.The SCRR
also provides that if the public shareholding in a listed company falls below 25 % at any time, such company is
required to bring the public shareholding to 25% within a maximum period of 12 months from the date of such
fall in the manner prescribed by the SEBI. Consequently, a listed company may be delisted from the stock
exchanges for not complying with the minimum public shareholding requirement. Our Company is in compliance
with this minimum public shareholding requirement.
Disclosures under the Companies Act, 2013 and Listing Agreements
Public limited companies are required under the Companies Act and the Listing Agreements to prepare, file with
the registrar of companies and circulate to their shareholders audited annual accounts which comply with the
disclosure requirements and regulations governing their manner of presentation and which include sections
relating to corporate governance under the Companies Act, related party transactions and management’s
discussion and analysis as required under the Listing Agreement. In addition, a listed company is subject to
continuing disclosure requirements pursuant to the terms of its Listing Agreement with the relevant stock
exchange.
Index-Based Market-Wide Circuit Breaker System
In order to restrict abnormal price volatility in any particular stock, the SEBI has instructed stock exchanges to
apply daily circuit breakers which do not allow transactions beyond a certain level of price volatility. The index
based market-wide circuit breaker system (equity and equity derivatives) applies at three stages of the index
movement, at 10%, 15% and 20%. These circuit breakers, when triggered, bring about a co-ordinate trading halt
in all equity and equity derivative markets nationwide. The market-wide circuit breakers are triggered by
movement of either the SENSEX of the BSE or the S&P CNX NIFTY of the NSE, whichever is breached earlier.
With effect from October 1, 2013, the Stock Exchanges, shall on a daily basis translate the 10 %, 15 % and 20 %
circuit breaker limits of market wide index variation based on the previous days’ closing level of the index.
In addition to the market-wide index-based circuit breakers, there are currently in place individual scrip-wise price
bands of 20 % movements either up or down for all scrips in the compulsory rolling settlement. However, no price
bands are applicable on scrips on which derivative products are available or scrips included in indices on which
derivative products are available.
The stock exchanges in India can also exercise the power to suspend trading during periods of market volatility.
Margin requirements are imposed by stock exchanges that are required to be maintained by the stockbrokers.
BSE
BSE was established in 1875 and is the oldest stock exchange in India. In 1956, it became the first stock exchange
in India to obtain permanent recognition from the Government under the SCRA. It has evolved over the years into
its present status as one of the premier stock exchanges of India. Pursuant to the BSE (Corporatisation and
Demutualisation) Scheme 2005 of the SEBI, with effect from August 19, 2005, the BSE was incorporated and is
now a company under the Companies Act.
NSE
NSE was established by financial institutions and banks to serve as a national exchange and to provide nationwide
online satellite-linked screen-based trading facilities with market-makers and electronic clearing and settlement
for securities including government securities, debentures, public sector bonds and units. The NSE was
recognized as a stock exchange under the SCRA in April 1993 and commenced operations in the wholesale debt
market segment in June 1994. The capital market (equities) segment commenced operations in November 1994
and operations in the derivatives segment commenced in June 2000. The NSE launched the NSE 50 Index, now
known as S&P CNX NIFTY, on April 22, 1996 and the Mid-cap Index on January 1, 1996. The securities in the
NSE 50 Index are highly liquid.
Stock Market Indices
There are several indices of stock prices on NSE, which include the S&P CNX Nifty, CNX Nifty Junior, S&P
CNX Defty, S&P CNX 500, CNX Midcap and CNX100. S&P CNX Nifty is a diversified 50 stock index
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accounting for various sectors of the economy. It is used for a variety of purposes such as benchmarking fund
portfolios, index based derivatives and index funds. S&P CNX Nifty is owned and managed by India Index
Services and Products Limited (IISL), which is a joint venture between the NSE and CRISIL.
The two indices which are generally used in tracking the aggregate price movements on BSE are the Sensex and
the BSE 100 Index. The BSE Sensitive Index, or the Sensex, consists of listed shares of 30 large market
capitalization companies. The companies are selected on the basis of market capitalization, liquidity and industry
representation. The Sensex was first compiled in 1986 with the fiscal year ended March 31, 1979. The BSE 100
Index (formerly the BSE National Index) contains listed shares of 100 companies, including the 30 in the Sensex,
with 1983-1984 as the base year.
Trading Hours
Trading on the BSE and NSE occurs from Monday to Friday, between 9:15 a.m. and 3:30 p.m. IST (excluding the
15 minutes pre-open session from 9:00 a.m. to 9:15 a.m. that has been introduced recently). BSE and NSE are
closed on public holidays. The recognized stock exchanges have been permitted to set their own trading hours (in
the cash and derivatives segments) subject to the condition that (i) the trading hours are between 9.00 a.m. and
5.00 p.m.; and (ii) the stock exchange has in place a risk management system and infrastructure commensurate to
the trading hours
Trading Procedure
In order to facilitate smooth transactions, the BSE replaced its open outcry system with the BSE Online Trading
(“BOLT”) facility in 1995. This totally automated screen based trading in securities was put into practice nation-
wide. This has enhanced transparency in dealings and has assisted considerably in smoothening settlement cycles
and improving efficiency in back-office work.
NSE has introduced a fully automated trading system called National Exchange for Automated Trading (or
“NEAT”), which operates on strict time/price priority besides enabling efficient trade. NEAT has provided depth
in the market by enabling large number of members all over India to trade simultaneously, narrowing the spreads.
Internet-based Securities Trading and Services
Internet trading takes place through order routing systems, which route client orders to exchange trading systems
for execution. Stockbrokers interested in providing this service are required to apply for permission to the relevant
stock exchange and also have to comply with certain minimum conditions stipulated by SEBI. Internet trading is
possible on both the "equities" as well as the "derivatives" segments of the NSE.
Takeover Code
Disclosure and mandatory bid obligations for listed Indian companies under Indian law are governed by the
Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, as
amended (the "Takeover Code"), which provides specific regulations in relation to substantial acquisition of
shares and takeover. Once the equity shares of a company are listed on a stock exchange in India, the provisions
of the Takeover Code will apply to any acquisition of the company’s shares/voting rights/control. The Takeover
Code prescribes certain thresholds or trigger points in the shareholding a person or entity has in the listed Indian
company, which give rise to certain obligations on part of the acquirer. Acquisitions up to a certain threshold
prescribed under the Takeover Code mandate specific disclosure requirements, while acquisitions crossing
particular thresholds may result in the acquirer having to make an open offer of the shares of the target company.
The Takeover Code also provides for the possibility of indirect acquisitions, imposing specific obligations on the
acquirer in case of such indirect acquisition.
Prohibition of Insider Trading Regulations
The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (“SEBI
Prohibition of Insider Trading Regulations”) have been notified by SEBI to prohibit and penalize insider trading
in India. An insider is, among other things, prohibited from dealing in the securities of a listed company when in
possession of unpublished price sensitive information. The definition of "insider" includes any person who is a
connected person or in possession of or having access to unpublished price sensitive information. As per SEBI
Prohibition of Insider Trading Regulations, a connected person is one who has a connection with the company that
is expected to put him in possession of unpublished price sensitive information. Immediate relatives and other
categories of persons specified above are also presumed to be connected persons but such a presumption is a
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deeming legal fiction and is rebuttable. This definition is also intended to bring into its ambit persons who may
not seemingly occupy any position in a company but are in regular touch with the company and its officers and
are involved in the know of the company’s operations. Since “generally available information” is defined, it is
intended that anyone in possession of or having access to unpublished price sensitive information should be
considered an “insider” regardless of how one came in possession of or had access to such information. The onus
of showing that a certain person was in possession of or had access to unpublished price sensitive information at
the time of trading would, therefore, be on the person leveling the charge after which the person who has traded
when in possession of or having access to unpublished price sensitive information may demonstrate that he was
not in such possession or that he has not traded or he could not access or that his trading when in possession of
such information was squarely covered by the exonerating circumstances. The board of directors, however, would
cause public disclosures of such unpublished price sensitive information well before the proposed transaction to
rule out any information asymmetry in the market.
The SEBI Prohibition of Insider Trading Regulations are primarily aimed at preventing abuse by trading when in
possession of unpublished price sensitive information and therefore, what matters is whether the person who takes
trading decisions is in possession of such information rather than whether the person who has title to the trades is
in such possession. Every person on appointment as a key managerial personnel or a director of the company or
upon becoming a promoter shall disclose his holding of securities of the company as on the date of appointment or
becoming a promoter, to the company within seven days of such appointment or becoming a promoter. Every
promoter, employee and director of every company shall disclose to the company the number of such securities
acquired or disposed of within two trading days of such transaction if the value of the securities traded, whether in
one transaction or a series of transactions over any calendar quarter, aggregates to a traded value in excess of `1
million or such other value as may be specified. Further, every company shall notify the particulars of such
trading to the stock exchange on which the securities are listed within two trading days of receipt of the disclosure
or from becoming aware of such information. The board of directors of every company, whose securities are listed
on a stock exchange, shall formulate and publish on its official website, a code of practices and procedures for fair
disclosure of unpublished price sensitive information. The board of directors of every listed company and market
intermediary shall formulate a code of conduct to regulate, monitor and report trading by its employees and other
connected persons towards achieving compliance with these regulations.
Depositories
In August 1996, the Indian Parliament enacted the Depositories Act 1996 (the "Depositories Act") which provides
a legal framework for the establishment of depositories to record ownership details and effect transfers in
electronic book-entry form. The SEBI framed regulations in relation to the formation and registration of such
depositories, the registration of participants and the rights and obligations of the depositories, participants,
companies and beneficial owners. The depository system has significantly improved the operation of the Indian
securities markets.
Derivatives (Futures and Options)
Trading in derivatives is governed by the SCRA, the SCRR and the SEBI Act. The SCRA was amended in
February 2000 and derivatives contracts were included within the term "securities", as defined by the SCRA.
Trading in derivatives in India takes place either on separate and independent derivatives exchanges or on a
separate segment of an existing stock exchange. The derivatives exchange or derivatives segment of a stock
exchange functions as a self-regulatory organization under the supervision of the SEBI.
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DESCRIPTION OF EQUITY SHARES
The following description of Equity Shares is subject to and qualified in its entirety by our Company’s
Memorandum and Articles of Association and by the provisions of the Companies Act, which governs its affairs,
and other applicable provisions of Indian law. General On the date of this Placement Document, our Company’s authorized share capital is ` 320,000,000 divided into
32,000,000 Equity Shares of `10 each. All of our Company’s issued and paid-up Equity Shares are in registered
form and substantially all are held in dematerialized form. As on May 31, 2015, 26,180,888 Equity Shares of ` 10
each have been subscribed and fully paid-up. Dividends Under the Companies Act, 2013, unless the board recommends the payment of a dividend, the shareholders at a
general meeting have no power to declare any dividend. Subject to certain conditions specified in the Companies
Act, 2013, no dividend can be declared or paid by a company for any financial year except out of the profits of our
Company for that year determined in accordance with the provisions of the Companies Act, 2013 or out of the
undistributed profits of previous Fiscal Years or out of both, arrived at in accordance with the provisions of the
Companies Act, 2013, or out of money provided by the Central Government or a state Government for payment of
dividend by our Company in pursuance of a guarantee given by that government. Pursuant to the Listing
Agreements, listed companies are required to declare and disclose their dividends on per share basis only. The
dividend recommended by the Board and approved by the shareholders at a general meeting is distributed and paid
to shareholders in proportion to the paid-up value of their equity shares as at the record date for which such
dividend is payable. In addition, the board may declare and pay interim dividends. Under the Companies Act, 2013,
dividends can only be paid in cash to shareholders listed on the register of shareholders on the date which is
specified as the “record date” or “book closure date”. No shareholder is entitled to a dividend while unpaid calls on
any of his equity shares are outstanding. Dividends must be paid within 30 days from the date of the declaration and
any dividend that remains unpaid or unclaimed after that period must be transferred within seven days to a special
unpaid dividend account held at a scheduled bank. Any money that remains unpaid or unclaimed for seven years
from the date of such transfer must be transferred by our Company to the Investor Education and Protection Fund
established by the Government and thereafter any claim with respect thereto will lapse.
Our Company may, before the declaration of any dividend in any financial year, transfer such percentage of its
profits for that financial year as it may consider appropriate to the reserves of our Company. The Companies Act,
2013 and the Companies (Declaration of Dividend) Rules, 2014, provide that if the profit for a year is insufficient,
the dividend for that year may be declared out of free reserves, subject to certain conditions prescribed under those
legislations.
Capitalization of Reserves Our Company's Articles state that at any general meeting, our Company may resolve that any amount standing to
the credit of the reserve fund or the Capital Redemption Reserve Fund or any monies, investments or other assets
forming part of the undivided profits (including profits or surplus monies arising from the realization and (where
permitted by law) from the appreciation in value of any capital assets of our Company) standing to the credit of the
general reserve or any reserve fund or any other fund of our Company or in the hands of our Company and available
for dividend be capitalized (a) by the issue and distribution as fully paid up of shares or (b) by crediting shares of
our Company which may have been issued to and are not fully paid up with the whole or any part of the sum
remaining unpaid thereon. Provided, that any amounts standing to the credit of the reserve fund or the Capital
Redemption Reserve Fund shall be applied only in crediting the payment of capital on shares of our Company to be
issued to the members of our Company as fully paid bonus shares. Our Company’s Articles further provide that the Board of Directors shall make all appropriations and applications
of the undivided profits resolved to be capitalized thereby, and all allotments and issues of fully paid up shares, if
any, and generally do all acts and things required to give effect thereto. Our Board of Directors shall have the full
power to make such provisions, by the issue of fractional certificates or by payment in cash or otherwise as it thinks
fit, in case of shares or debentures becoming distributable in fractions and to authorise any person to enter on behalf
of the members into an agreement with our Company providing for the allotment to them respectively, credited as
fully paid-up, of any further shares to which they may be entitled upon such capitalization, or (as the case may
require) for the payment up by our Company on their behalf, by the application thereto of their respective
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proportions of the profits resolved to be capitalized, of the amounts or any part of the amounts remaining unpaid on
their existing shares. Any issue of bonus shares would be subject to the guidelines issued by the SEBI in this regard. The relevant SEBI
ICDR Regulations prescribe that no company shall, pending conversion of convertible debt instruments at the time
of making the bonus issue, issue any equity shares by way of bonus, unless it has made reservation of equity shares
of the same class in favour of the holders of such outstanding convertible debt instruments in proportion to the
convertible part thereof. Further, for the issuance of such bonus shares, a company should not have defaulted in the
payment of interest or principal in respect of fixed deposits or debt securities issued by it or in respect of the
payment of statutory dues of the employees such as contribution to provident fund, gratuity and bonus.
Additionally, the bonus shares may be issued only if the partly paid up shares, if any outstanding on the date of
allotment, are made fully paid up. The declaration of bonus shares in lieu of dividend cannot be made. The bonus
issue must be made out of free reserves built out of genuine profits or securities premium collected in cash only and
reserves created by revaluation of fixed assets shall not be capitalized for the purpose of issuing bonus shares. Under the SEBI ICDR Regulations, a company announcing a bonus issue after the approval of its board of directors
and not requiring shareholders’ approval for capitalization of profits or reserves for making the bonus issue, shall
implement the bonus issue within fifteen days from the date of the approval of the issue by its board of directors. Provided, that where the company is required to seek shareholders’ approval for capitalization of profits or reserves
for making the bonus issue, the bonus issue shall be implemented within two months from the date of the meeting
of its board of directors wherein the decision to announce the bonus issue was taken subject to shareholders’
approval. Pre-Emptive Rights and Alteration of Share Capital Subject to the provisions of the Companies Act, 2013, our Company can increase its share capital by issuing new
equity shares. Such new equity shares must be offered to existing shareholders registered on the record date in
proportion to the amount paid-up on those equity shares at that date. The offer shall be made by notice specifying
the number of equity shares offered and the date (being not less than fifteen days and not exceeding thirty days from
the date of the offer) after which the offer, if not accepted, will be deemed to have been declined. After such date
the Board may dispose of the equity shares offered in respect of which no acceptance has been received, in such
manner as they think is not disadvantageous to the shareholders and our Company. The offer is deemed to include a
right exercisable by the person concerned to renounce the shares in favor of any other person provided that the
person in whose favor such shares have been renounced is approved by the Board in their absolute discretion.
However, under the provisions of the Companies Act, 2013 and the Companies (Share Capital and Debentures)
Rules, 2014, new shares may be offered to any persons, whether or not those persons include existing shareholders
or employees to whom shares are allotted under a scheme of employees stock options, either for cash or for
consideration other than cash, if a special resolution to that effect is passed by the shareholders of our Company in a
general meeting. The issue of the Equity Shares pursuant to the Issue has been approved by a special resolution of
our Company’s shareholders and such shareholders have waived their pre-emptive rights with respect to such
Equity Shares.
Our Company’s issued share capital may, among other things, be increased by the exercise of warrants attached to
any of our Company’s securities entitling the holder to subscribe for shares. The Articles of Association provide
that our Company may consolidate or sub-divide our Company’s share capital or cancel equity shares which have
not been taken up by any person and diminish the amount of its share capital by the amount of the Shares so
cancelled. Our Company can also alter its share capital by way of a reduction of capital, in accordance with the
Companies Act, 2013.
General Meetings of Shareholders In accordance with the provisions of the Companies Act, our Company must hold its Annual General Meeting each
year within 15 months of the previous Annual General Meeting or within six months after the end of each
accounting year, whichever is earlier, unless extended by the Registrar of Companies at the request of a company
for any special reason. Every member of our company shall be entitled to attend every general meeting either in
person or by proxy, and the auditor of a company shall have the right to attend and to be heard at any general
meeting on any part of the business which concerns him as auditor. The Board may convene an extraordinary
general meeting of shareholders when necessary or at the request of a shareholder or shareholders holding in the
aggregate not less than 10% of the issued paid-up capital of a company. Written notices convening a meeting
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setting out the date, hour, place and agenda of the meeting must be given to members at least 21 days prior to the
date of the proposed meeting. A general meeting may be called after giving shorter notice if consent is received
from all shareholders entitled to vote thereat, in the case of an Annual General Meeting, and from shareholders
holding not less than 95% of the paid-up capital of a company, in the case of any other meeting. A listed company intending to pass a resolution relating to matters such as, but not limited to, an amendment in the
objects clause of the memorandum of association, a buy-back of shares under the Companies Act, 2013, the giving
of loans or extending a guarantee in excess of limits prescribed under the Companies Act, 2013 is required to pass
the resolution by means of a postal ballot instead of transacting the business in the general meeting of our
Company. A notice to all the shareholders must be sent along with a draft resolution explaining the reasons thereof
and requesting them to send their assent or dissent in writing on a postal ballot within a period of thirty days from
the date of such notice. Shareholders may exercise their right to vote at general meetings or through postal ballot by
voting through e-voting facilities in accordance with the circular dated April 17, 2014 issued by the SEBI and the
Companies Act, 2013. Under the Companies Act, 2013, unless, the Articles of Association provide for a larger
number: (i) five shareholders present in person, if the number of shareholders as on the date of meeting is not more
than 1,000; (ii) 15 shareholders present in person, if the number of shareholders as on the date of the meeting is
more than 1,000 but up to 5,000; and (iii) 30 shareholders present in person, if the number of shareholders as on the
date of meeting exceeds 5,000, shall constitute a quorum for a general meeting of our Company. The quorum
requirements applicable to shareholder meetings under the Companies Act, 2013 have to be physically complied
with.
Voting Rights At a general meeting upon a show of hands, every member holding shares and entitled to vote and present in person
has one vote. Upon a poll, the voting rights of each Shareholder entitled to vote and present in person or by proxy is
in the same proportion to such Shareholder’s share of the paid-up equity capital of our Company.
Ordinary resolutions may be passed by simple majority of those present and voting. Special resolutions require that
the votes cast in favor of the resolution must be at least three times the votes cast against the resolution. The
Companies Act, 2013 provides that to amend the Articles of Association of a company, a special resolution is
required to be passed in a general meeting.
A shareholder may exercise his voting rights by proxy to be given in the form required by the Articles of
Association. The instrument appointing a proxy is required to be lodged with us not later than 48 hours before the
time of the meeting, or in case of a poll, not less than 24 hours before the time appointed for taking the poll. A
shareholder may, by a single power of attorney, grant a general power of representation regarding several general
meetings of shareholders. Any shareholder may appoint a proxy. A corporate shareholder is also entitled to
nominate a representative to attend and vote on its behalf at general meetings. A proxy may not vote except on a
poll and does not have a right to speak at meetings. A shareholder which is a legal entity may appoint an authorized
representative who can vote in all respects as if a member both on a show of hands and a poll.
The Companies Act, 2013 allows our Company to issue shares with differential rights as to dividend, voting or
otherwise, subject to certain conditions. In this regard, the law requires that for a company to issue shares with
differential voting rights, our Company must have, inter alia, had distributable profits in terms of the Companies
Act, 2013 for the last three financial years and our Company must not have defaulted in filing annual accounts and
annual returns for the immediately preceding three financial years.
Register of members and Record Dates Our Company is obliged to maintain a register of shareholders at its Registered Office, unless a special resolution is
passed in a general meeting authorizing the keeping of the register at any other place within the city, town or village
in which the Registered Office is situated or any other place in India in which more than one-tenth of the total
shareholders entered in the register of members reside. Our Company recognizes as shareholders only those persons
whose names appear on the register of shareholders and cannot recognize any person holding any share or part of it
upon any express, implied or constructive trust, except as permitted by law. In the case of shares held in physical
form, transfers of shares are registered on the register of shareholders upon lodgment of the share transfer form duly
complete in all respects accompanied by a share certificate or, if there is no certificate, the letter of allotment in
respect of shares transferred together with duly stamped transfer forms. In respect of electronic transfers, the
depository transfers shares by entering the name of the purchaser in its books as the beneficial owner of the shares.
In turn, the name of the depository is entered into our Company’s records as the registered owner of the shares. The
beneficial owner is entitled to all the rights and benefits as well as the liabilities with respect to the shares held by a
depository.
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For the purpose of determining the shareholders, the register may be closed for periods not exceeding 45 days in
any one year or 30 days at any one time at such times, as the Board may deem expedient in accordance with the
provisions of the Companies Act, 2013. Under the Listing Agreement of the Stock Exchanges on which our
Company’s shares are listed, our Company may, upon at least seven working days’ advance notice to stock
exchange, set a record date and/or close the register of shareholders in order to ascertain the identity of
shareholders. The trading of shares and the delivery of certificates in respect thereof may continue while the register
of shareholders is closed.
Under the Companies Act, 2013, our Company is also required to maintain a register of debenture holders and a
register of any other security holders.
Annual Report and Financial Results The Annual Report must be laid before the Annual General Meeting. This includes certain financial information
about a company such as the audited financial statements as of the date of closing of the Financial Year, Directors
Report, Auditors Report and Management's Discussion and Analysis and is sent to the shareholders of a company. Under the Companies Act, 2013, our Company must file its balance sheet and profit and loss account with the
Registrar of Companies within thirty days from the date of the annual general meeting. The Companies Act, 2013
also requires listed companies to place their financial statements, including consolidated financial statements, if any,
and all other documents required to be attached thereto, on their website. As required under the Listing Agreement,
copies are required to be simultaneously sent to the Stock Exchanges on which the shares are listed. Our Company
must also publish its financial results in at least one English language daily newspaper circulating in the whole or
substantially the whole of India and also in a daily newspaper published in the language of the region where the
registered office of our Company is situated.
Transfer of Equity Shares
Shares held through depositories are transferred in the form of book entries or in electronic form in accordance with
applicable SEBI regulations. These regulations provide the regime for the functioning of the depositories and their
participants and set out the manner in which the records are to be kept and maintained and the safeguards to be
followed in this system. Transfers of beneficial ownerships of shares held through a depository are exempt from
stamp duty. SEBI requires that for trading and settlement purposes shares should be in book-entry form for all
investors, except for transactions that are not made on a stock exchange and transactions that are not required to be
reported to the stock exchange.
The shares of our Company are freely transferable, subject to the provisions of the Companies Act, 2013. If a public
company without sufficient cause refuses to register a transfer of shares within thirty days from the date on which
the instrument of transfer or intimation of transmission, as the case may be, is delivered to our Company, the
transferee may appeal to our Company Law Board seeking to register the transfer. Our Company Law Board is
proposed to be replaced with the National Company Law Tribunal with effect from a date that is yet to be notified.
Pursuant to the Listing Agreement, in the event that a transfer of shares is not effected within 15 days or where our
Company has failed to communicate to the transferee any valid objection to the transfer within the stipulated time
period of 15 days, our Company is required to compensate the aggrieved party for the opportunity loss caused by
the delay.
A transfer may also be by transmission. Subject to the provisions of the Articles, any person becoming entitled to
shares in consequence of the death or insolvency of any member may, upon producing such evidence as may from
time to time properly be required by the Board, be registered as a member in respect of such shares, or may, subject
to the regulations as to transfer contained in the Articles, transfer such shares. Our Articles of Association provide
that our Company shall charge no fee for registration of transfer, transmission, probate, succession certificate and
letters of administration, certificate of death or marriage, power of attorney or other similar document.
Acquisition by a company of its own Shares A company is prohibited from acquiring its own shares unless the consequent reduction of capital is effected by an
approval of at least 75% of its shareholders, voting on the matter in accordance with the Companies Act and
sanctioned by the High Court of Judicature in the city where the company's registered office is located. Subject to
certain conditions, a company is prohibited from giving, whether directly or indirectly and whether by means of a
147
loan, guarantee, the provision of security or otherwise, any financial assistance for the purpose of or in connection
with a purchase or subscription made or to be made by any person for any shares in the company or its holding
company. However, pursuant to the Companies Act, 2013, a company has been empowered to purchase its own
shares or other specified securities out of its free reserves, or the securities premium account or the proceeds of the
issue of any shares or other specified securities (other than from the proceeds of an earlier issue of the same kind of
shares or other specified securities proposed to be bought back) subject to certain conditions, including: (i) the buy-back should be authorised by the articles of the company;
(ii) a special resolution has been passed in the general meeting of the company authorising the buy-back (in
case of a listed company, by means of a postal ballot);
(iii) the buy-back is limited to 25% of the total paid-up capital and free reserves;
(iv) the debt owed by the company is not more than twice the capital and free reserves after such buy-back; and
(v) the buy-back is in accordance with the Securities and Exchange Board of India (Buy-Back of Securities)
Regulation, 1998, as amended from time to time.
The condition mentioned above in (ii) would not be applicable if the buy-back is for less than 10% of the total paid-
up equity capital and free reserves of the company and provided that such buy-back has been authorized by the
board of directors of the company. A company buying back its securities is required to extinguish and physically
destroy the securities so bought back within seven days of the last date of completion of the buy-back. Further, a
company buying back its securities is not permitted to buy back any securities for a period of one year from the
buy-back and to issue securities for six months. Every buy-back must be completed within a period of one year
from the date of passing of the special resolution or resolution of the Board, as the case may be. A company is also prohibited from purchasing its own shares or specified securities through any subsidiary
company, including its own subsidiary companies, or through any investment company (other than a purchase of
shares in accordance with a scheme for the purchase of shares by trustees of or for shares to be held by or for the
benefit of employees of the company) or if the company is defaulting on the repayment of deposit or interest,
redemption of debentures or preference shares or payment of dividend to a shareholder or repayment of any term
loan or interest payable thereon to any financial institution or bank, or in the event of non-compliance with certain
other provisions of the Companies Act, 2013. Liquidation Rights Subject to the rights of creditors, of employees and of the holders of any other shares entitled by their terms of issue
to preferential repayment over the shares, in the event of a winding-up of the company, the holders of the shares are
entitled to be repaid the amounts of capital paid up or credited as paid up on such shares. All surplus assets after
payments due to employees, the holders of any preference shares and other creditors belong to the holders of the
equity shares in proportion to the amount paid up or credited as paid up on such shares, respectively, at the
commencement of the winding-up. In case assets available are insufficient to repay the whole of the paid up capital,
the assets shall be so distributed such that the losses are borne to the extent possible by the shareholders in the ratio
of capital contributed. In case any of the shares involve a liability to call or otherwise, any person may, within ten
days after the passing of the resolution, by notice in writing direct the liquidators to sell his proportion and pay him
the net proceeds and the liquidator shall, if practicable, act accordingly. The division of assets on winding up, if thought expedient, may subject to the provisions of the Companies Act, be
otherwise than in accordance with the legal rights of the contributories (except when unalterably fixed by the
Memorandum) and in particular, any class may be given preferential or special rights which may be excluded
altogether or in part but any contributory who is prejudiced by the same would have a right to dissent and possess
ancillary rights as though such determination were a special resolution under the Companies Act.
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STATEMENT OF TAX BENEFITS
To,
The Board of Directors,
TALWALKARS BETTER VALUE FITNESS LIMITED
Mumbai - 400 026
Dear Sirs,
Subject: Statement of Possible Tax Benefits available to the Company and its Shareholders
We hereby confirm that the enclosed statement, prepared by the Company, states the possible tax benefits available
to TALWALKARS BETTER VALUE FITNESS LIMITED ('the Company') and its shareholders under the
Income Tax Act, 1961 presently in force in India. Several of these benefits are dependent on the Company or its
shareholders fulfilling the conditions prescribed under the relevant provisions of the relevant tax laws. Hence, the
ability of the Company or its shareholders to derive the tax benefits is dependent upon fulfilling such conditions,
which based on the business imperatives, the Company may or may not choose to fulfill.
The benefits discussed in the enclosed statement (Annexure-I) are neither exhaustive nor conclusive and the
preparation of the contents stated is the responsibility of the Company's management. We are informed that this
statement is only intended to provide general information to the investors and hence is neither designed nor
intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences, the
changing tax laws, each investor is advised to consult his or her own tax consultant with respect to the specific tax
implications arising out of their participation in the proposed Qualified Institutions Placement of Equity Shares of
the Company. Our confirmation is based on the information, explanations and representations obtained from the
Company and on the basis of our understanding of the business activities and operations of the Company and the
interpretation of the current tax laws in force in India. We do not express any opinion or provide any assurance as to
whether:
the Company or its shareholders will continue to obtain these benefits in future; or
the conditions prescribed for availing the benefits, where applicable have been/would be met
that the revenue authorities/courts will concur with the views expressed in the enclosed statement
This report is intended solely for your information and for the inclusion in the Preliminary Placement
Document (the “PPD”) and Placement Document (the “PD”) collectively referred to as the “Offer
Documents” in connection with the proposed Qualified Institutions Placement of the Company and is not
to be used, referred to or distributed for any other purpose without our prior written consent
Yours faithfully,
For M. K. DANDEKER & Co;
Chartered Accountants
(ICAI Firm Reg. No. 000679S)
Deepali Gujarati
Partner
Membership No. 414585
Date: June 12, 2015
Place: Mumbai
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Annexure-I
The information provided below sets out the possible tax benefits available to the Company and the Equity
Shareholders in a summary manner only and is not a complete analysis or listing of all potential tax consequences
of the purchase, ownership and disposal of equity shares, under the current tax laws presently in force in India. It is
not exhaustive or comprehensive and is not intended to be a substitute for professional advice. Investors are
advised to consult their own tax consultant with respect to the tax implications of an investment in the Equity Shares
particularly in view of the fact that certain recently enacted legislation may not have a direct legal precedent or
may have a different interpretation on the benefits, which an investor can avail.
You should consult your own tax advisors concerning the Indian Tax implications and consequences of purchasing,
owning and disposing of equity shares in your particular situation.
Levy of Income Tax
As per the provisions of the Income Tax Act, 1961 (“Act”) taxation of a person is dependent on its tax residential
status. The Indian tax year i.e. financial year runs from April 1 to March 31.
In general, in the case of a person who is "resident'' in India in a tax year, its global income is subject to tax in India.
In the case of a person who is "non-resident'' in India, only the income that is received or deemed to be received or
that accrues or is deemed to accrue or arise to such person in India is subject to tax in India. In the instant case, the
income from the Equity Shares of the Company would be considered to accrue or arise in India, and would be
taxable in the hands of all persons irrespective of residential status. However, relief may be available under
applicable Double Taxation Avoidance Agreement (“DTAA”) to certain non-residents
An individual is considered to be a resident of India during any financial year, if he or she is in India in that year
for:
A period or periods amounting to 182 days or more; or
60 days or more if within the 4 preceding years, he/she has been in India for a period or periods amounting
to 365 days or more; or
182 days or more, in the case of a citizen of India or a person of Indian origin living abroad who visits
India; or
182 days or more, in the case of a citizen of India who leaves India for the purposes of employment outside
India in any previous year
A Hindu undivided Family (HUF), firm or other association of persons (AOP) is resident in India except where
the control and management of its affairs is situated wholly outside India in a financial year
A “company” is “resident” in India if it is formed and registered in accordance with the Indian Companies Act or
if the control and management of its affairs is situated wholly in India in a financial year.
A “firm” or “association of persons” is resident in India except where the control and management of its affairs is
situated wholly outside India in a financial year
A “Non-Resident” means a person who is not a resident in India.
A person is said to be not ordinarily resident in India in any financial year, if such person is:
a non-resident in India in 9 out of the 10 financial years preceding that year, or has during the 7 financial
years preceding that year been in India for a period of, or periods amounting in all to, 729 or less; or
a Hindu undivided family whose manager has been a non-resident in India in 9 out of the 10 financial
years preceding that year, or has during the 7 financial years preceding that year been in India for a period
of, or periods amounting in all to, 729 or less
Outlined below are the possible tax benefits available to the Company and its shareholders under the current direct
tax laws in India for the Financial Year 2015-16.
SPECIAL TAX BENEFITS:
BENEFITS TO THE COMPANY
There are no special tax benefits available to the Company.
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BENEFITS TO THE SHAREHOLDERS OF THE COMPANY
There are no special tax benefits available to the shareholders of the Company.
GENERAL TAX BENEFITS:
The Income Tax Act, 1961 (provisions of Finance Act, 2015) presently in force in India, make available the
following general tax benefits to companies and to their shareholders. Several of these benefits are dependent on the
companies or their shareholders fulfilling the conditions prescribed under the relevant provisions of the statute.
TAX BENEFITS TO THE COMPANY UNDER THE INCOME TAX ACT, 1961 (“THE ACT”):
1. Under Section 10(34) of the Act, dividend income (whether interim or final) in the hands of the company as
distributed or paid by any other Company referred to in Section 115-O on or after April 1, 2004 is completely
exempt from tax in the hands of the Company. Any domestic company receiving dividend from any subsidiary
company and declaring dividend in the same year will be allowed to reduce the amount of such dividend for
determining the liability of Dividend Distribution Tax if the subsidiary company has paid Dividend
Distribution Tax payable by it.
Any domestic company receiving dividend from any subsidiary company and declaring dividend in the same
year will be allowed to reduce the amount of such dividend for determining the liability of Dividend
Distribution Tax if the subsidiary company has paid Dividend Distribution Tax payable by it.
However, in view of the provisions of section 14A of the Act, any expenditure incurred in relation to earning
such dividend income which is exempt shall not be allowed as tax deduction. In case the Tax Authorities are
not satisfied by the disallowance considered by the Company, the quantum of disallowance shall be computed
in accordance with the provisions of section 14A read with Rule 8D of the Income-tax Rules, 1961.
Also, section 94(7) of the Act provides that losses arising from the sale/ transfer of shares purchased within a
period of three months prior to the record date and sold/ transferred within three months after such date, will be
disallowed to the extent of dividend income on such shares is claimed as exempt from tax.
2. Under Section 10(35) of the Act, income in respect of units of Mutual Funds specified under clause (23D) in
the hands of the company on or after April 1, 2004 is completely exempt from tax in the hands of the Company.
3. As per the provisions of Section 112 (1) (b) of the Act, long-term capital gains would be subject to tax at the
rate of 20% (plus applicable surcharge and education cess). However, as per the proviso to Section 112(1), the
long term capital gains resulting on transfer of listed securities or units (not covered by section 10(36) and
10(38)), would be subject to tax at the rate of 20% with indexation benefits or 10% without indexation benefits
(plus applicable surcharge and education cess) as per the option of the assessee.
4. Long term capital gains arising from transfer of an ‘Eligible Equity Share’ in a company Purchased on or after
the 1st day of March, 2003 and before the 1st day of March, 2004 (both days inclusive) and held for a period of
12 months or more is exempt from tax under section 10(36) of the Act.
5. Section 48 of the Act, which prescribes the mode of computation of Capital Gains, provides for deduction of
cost of acquisition/improvement and expenses incurred in connection with the transfer of a capital asset, from
the sale consideration to arrive at the amount of Capital Gains. However, in respect of long term capital gains,
it offers a benefit by permitting substitution of cost of acquisition/improvement with the indexed cost of
acquisition/improvement, which adjusts the cost of acquisition/improvement by a cost inflation index as
prescribed from time to time.
6. As per the provisions of section 10(38), long term capital gains arising from the sale of Equity Shares in any
company through a recognized stock exchange or from the sale of units of an equity oriented mutual fund shall
be exempt from Income Tax if such sale takes place after 1st of October 2004 and such sale is subject to
Securities Transaction tax.
7. Gains arising on transfer of short term capital assets are currently chargeable to tax at the rate of 30% (plus
applicable surcharge, education cess and secondary higher education cess). As per the provisions of section
111A, short term capital gains arising from the transfer of equity shares in any company through a recognized
stock exchange or from the sale of units of equity oriented mutual fund shall be subject to tax at the rate of 15%
provided such a transaction is entered into after the 1st day of October, 2004 and the transaction is subject to
Securities Transaction Tax.
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8. In accordance with and subject to the conditions and to the extent specified in Section 54EC of the Act, the
Company would be entitled to exemption from tax on gains arising from transfer of the long term capital asset
(not covered by section 10(36) and section 10(38)) if such capital gains are invested in any of the long-term
specified assets in the manner prescribed in the said section provided that the investment made on or after
1.4.2007 in the long term specified asset during any financial year does not exceed INR 5,000,000. Where the
long-term specified asset is transferred or converted into money at any time within a period of three years from
the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long
term capital gains in the year in which the long-term specified asset is transferred or converted into money.
9. As per provisions of Section 36(1)(xv) of the Act, Securities Transaction Tax paid in respect of the taxable
securities transactions entered into in the course of the business is allowed as a deduction if the income arising
from such taxable securities transactions is included in the income computed under the head ‘Profit and gains
of business or profession’. Where such deduction is claimed, no further deduction in respect of the said amount
is allowed while determining the income chargeable to tax as capital gains.
10. In case of delivery based purchase/sale of equity shares in a company/units of equity oriented fund entered into
a recognized stock exchange in India, the rate of securities transaction tax has been reduced from 0.125% to
0.10% w.e.f. 1st July 2012.
11. Subject to certain conditions, Section 35D of the Act provides for deduction of specified preliminary
expenditure incurred before the commencement of the business or after the commencement of business in
connection with the extension of the undertaking or in connection with the setting up a new unit. The
deduction allowable is equal to one-fifth of such expenditure incurred for each of the five successive previous
years beginning with the previous year in which the business commences.
12. Subject to compliance with certain conditions laid down in section 32 of the Act, the Company will be entitled
to deduction for depreciation in respect of tangible assets (being buildings, machinery, plant or furniture) and
intangible assets (being know-how, patents, copyrights, trademarks, licenses, franchises or any other business
or commercial rights of similar nature acquired on or after 1st day of April, 1998) at the rates prescribed under
the Income Tax Rules,1962;
13. A deduction equal to 100% or 50%, as the case may be, on sums paid as donations to certain specified entities
is allowable as per section 80G of the Act while computing the total income of the Company.
A deduction amounting to 100% of any sum contributed to a political party or an electoral trust, otherwise than
by way of cash, is allowable under section 80GGB of the Act while computing total income of the Company.
14. Section 71 of the Act provides for set-off of business loss (other than speculative loss), if any, arising during a
previous year against the income under any other head of income (other than income under the head salaries).
Balance business loss, if any, can be carried forward and setoff against business profits for eight consecutive
subsequent years as per the provisions of section 72 of the Act.
Unabsorbed depreciation under section 32(2) of the Act can be carried forward and set-off against any source
of income in subsequent years subject to provisions of section 72(2) of the Act.
15. Where the tax liability of the Company as computed under the normal provisions of the Act, is less than 18.5%
of its book profits after making certain specified adjustments, the Company would be liable to pay MAT at an
effective rate of 18.5% (plus applicable surcharge and cess) of the book profits.
16. MAT paid shall however be available as credit against the normal income tax liability in subsequent years to
the extent and as per the provisions of section 115JAA of the Act. Such credit can be carried forward for set off
upto 10 years.
17. The corporate tax rate is 30% and the same stands increased by surcharge, payable at the rate of 10% where the
taxable income of a domestic company exceeds INR 100,000,000 and by 5% where the taxable income of a
domestic company exceeds INR 10,000,000 but is less than INR 100,000,000. Further, education cess and
secondary and higher education cess on the total of income tax and surcharge at the rate of 2% and 1%,
respectively.
TAX BENEFITS AVAILABLE TO RESIDENT SHAREHOLDERS UNDER THE INCOME TAX ACT,
1961 (“THE ACT”):
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1. Under Section 10(34) of the Act, dividend (whether interim or final) declared, distributed or paid by the
Company on or after 1st April 2004 is completely exempt from tax in the hands of the shareholders of the
Company.
However, in view of the provisions of section 14A of the Act, any expenditure incurred in relation to
earning such dividend income which is exempt shall not be allowed as tax deduction. In case the Tax
Authorities are not satisfied by the disallowance considered by the Company, the quantum of disallowance
shall be computed in accordance with the provisions of section 14A read with Rule 8D of the Income-tax
Rules, 1961.
Also, section 94(7) of the Act provides that losses arising from the sale/ transfer of shares purchased within
a period of three months prior to the record date and sold/ transferred within three months after such date,
will be disallowed to the extent of dividend income on such shares is claimed as exempt from tax.
2. As per the provisions of Section 112 of the Act, long-term capital gains would be subject to tax at the rate
of 20% (plus applicable education cess and secondary higher education cess). However, as per the proviso
to Section 112(1), the long term capital gains resulting on transfer of listed securities or units (not covered
by sections 10(36) and 10(38)), would be subject to tax at the rate of 20% with indexation benefits or 10%
without indexation benefits (plus applicable education cess and secondary higher education cess) as per the
option of the assessee.
3. As per the provisions of section 10(38), long term capital gains arising from the sale of equity shares in any
company through a recognized stock exchange or from the sale of units of an equity oriented mutual fund
shall be exempt from Income Tax if such sale takes place after 1st of October 2004 and the sale is subject
to Securities Transaction tax.
4. As per the provisions of section 111A, short term capital gains arising from the transfer of equity shares in
any company through a recognized stock exchange or from the sale of units of equity oriented mutual fund
shall be subject to tax at the rate of 15% (plus applicable education cess and secondary higher education
cess) provided such a transaction is entered into after the 1st day of October, 2004 and the transaction is
subject to Securities Transaction Tax.
5. As per provisions of Section 36(1)(xv) of the Act, Securities Transaction Tax paid in respect of the taxable
securities transactions entered into in the course of the business is allowed as a deduction if the income
arising from such taxable securities transactions is included in the income computed under the head ‘Profit
and gains of business or profession’. Where such deduction is claimed, no further deduction in respect of
the said amount is allowed while determining the income chargeable to tax as capital gains.
6. In case of delivery based purchase/sale of equity shares in a company/units of equity oriented fund entered
into a recognized stock exchange in India, the rate of securities transaction tax has been reduced from
0.125% to 0.10% w.e.f. 1st July 2012.
7. In accordance with and subject to the conditions and to the extent specified in Section 54EC of the Act, the
shareholders would be entitled to exemption from tax on gains arising on transfer of their shares in the
Company (not covered by sections 10(36) and 10(38)), if such capital gains are invested in any of the long
term specified assets in the manner prescribed in the said section provided that the investment made on or
after 1.4.2007 in the long term specified asset during any financial year does not exceed INR 5,000,000.
Where the long-term specified asset is transferred or converted into money at any time within a period of
three years from the date of its acquisition, the amount of capital gains exempted earlier would become
chargeable to tax as long term capital gains in the year in which the long-term specified asset is transferred
or converted into money.
8. In accordance with and subject to the conditions and to the extent specified in Section 54ED of the Act, the
shareholders would be entitled to exemption from long term capital gains tax on transfer of their assets
being listed securities or units (not covered by sections 10(36) and 10(38)), to the extent such capital gain
is invested in acquiring Equity Shares forming part of an ‘eligible issue of share capital’ in the manner
prescribed in the said section.
9. In case of a shareholder being an individual or a Hindu Undivided Family, in accordance with and subject
to the conditions and to the extent specified in Section 54F of the Act, the shareholder would be entitled to
exemption from long term capital gains on the sale of shares in the Company (not covered by sections
10(36) and 10(38)), upon investment of net consideration in purchase /construction of a residential house.
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If part of net consideration is invested within the prescribed period in a residential house, then such gains
would not be chargeable to tax on a proportionate basis. Further, if the residential house in which the
investment has been made is transferred within a period of three years from the date of its purchase or
construction, the amount of capital gains shall be charged to tax as long-term capital gains in the year in
which such residential house is transferred.
10. As per section 70 read with section 74 of the Act, short term capital loss arising during a year is allowed to
beset-off against short term capital gains as well as long term capital gains. Balance loss, if any, shall be
carried forward and set-off against any capital gains arising during subsequent eight assessment years.
Long term capital loss arising during a year is allowed to be set-off only against long term capital gains.
Balance loss, if any, shall be carried forward and set -off against long term capital gains arising during
subsequent eight assessment years.
TAX BENEFITS AVAILABLE TO NON-RESIDENT INDIAN SHAREHOLDERS UNDER THE INCOME
TAX ACT, 1961 (“THE ACT”):
1. Under Section 10(34) of the Act, dividend (whether interim or final) declared, distributed or paid by the
Company on or after 1st April 2004 is completely exempt from tax in the hands of the shareholders of the
Company.
Section 14A of the Act restricts claim for deduction of expenses incurred in relation to income which does
not form part of the total income under the Act. Thus, any expenditure incurred to earn the said income
will not be tax deductible expenditure.
As per section 94(7) of the Act, losses arising from sale/ transfer of shares, where such shares are
purchased within three months prior to the record date and sold within three months from the record date,
will be disallowed to the extent such losses do not exceed the amount of exempt dividend.
2. In the case of shareholder being a Non-Resident Indian and subscribing to shares in convertible foreign
exchange, in accordance with and subject to the conditions and to the extent specified in Section 115D read
with Section 115E of the Act, long term capital gains arising from the transfer of an Indian company’s
shares (not covered by sections 10(36) and 10(38)), will be subject to tax at the rate of 10% (plus
applicable education cess and secondary higher education cess), without any indexation benefit but with
protection against foreign exchange fluctuation.
3. In case of a shareholder being a non-resident Indian, and subscribing to the share in convertible foreign
exchange in accordance with and subject to the conditions and to the extent specified in Section 115F of
the Act, the Non-Resident Indian shareholder would be entitled to exemption from long term capital gains
(not covered by sections 10(36) and 10(38)) on the transfer of shares in the Company upon investment of
net consideration in modes as specified in sub-section (1) of Section 115F.
4. In accordance with the provisions of Section 115G of the Act, Non-Resident Indians are not obliged to file
a return of income under Section 139(1) of the Act, if their only source of income is income from
investments or long term capital gains earned on transfer of such investments or both, provided tax has
been deducted at source from such income as per the provisions of Chapter XVII-B of the Act.
5. In accordance with the provisions of Section 115H of the Act, when a Non-Resident Indian become
assessable as a resident in India, he / she may furnish a declaration in writing to the Assessing Officer
along with his / her return of income for that year under Section 139 of the Act to the effect that the
provisions of Chapter XII-A shall continue to apply to him / her in relation to such investment income
derived from the specified assets for that year and subsequent assessment years until such assets are
converted into money.
6. As per the provisions of section 115I of the Act, a Non-Resident Indian may elect not to be governed by
the provisions of Chapter XII-A for any assessment year by furnishing his return of income for that year
under Section 139 of the Act, declaring therein that the provisions of Chapter XII-A shall not apply to him
for that assessment year and accordingly his total income for that assessment year will be computed in
accordance with the other provisions of the Act.
7. In accordance with and subject to the conditions and to the extent specified in Section 112 of the Act, tax
on long term capital gains arising on sale on listed securities or units not covered by sections 10(36) and
10(38) will be, at the option of the concerned shareholder, 10% of capital gains (computed without
indexation benefits) or 20% of capital gains (computed with indexation benefits) as increased by applicable
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education cess and secondary higher education cess on the tax so computed in either case.
8. As per the provisions of section 10(38), long term capital gains arising from the sale of equity shares in any
company through a recognized stock exchange or from the sale of units of an equity oriented mutual fund
shall be exempt from Income Tax if such sale takes place after 1st of October 2004 and such sale is subject
to Securities Transaction Tax.
9. As per the provisions of section 111A, short term capital gains arising from the transfer of equity shares in
any company through a recognized stock exchange or from the sale of units of equity oriented mutual fund
shall be subject to tax at the rate of 15% (plus applicable education cess and secondary higher education
cess) provided such a transaction is entered into after the 1st day of October, 2004 and the transaction is
subject to Securities Transaction Tax.
10. As per provisions of Section 36(1)(xv) of the Act, Securities Transaction Tax paid in respect of the taxable
securities transactions entered into in the course of the business is allowed as a deduction if the income
arising from such taxable securities transactions is included in the income computed under the head ‘Profit
and gains of business or profession’. Where such deduction is claimed, no further deduction in respect of
the said amount is allowed while determining the income chargeable to tax as capital gains.
11. In case of delivery based purchase/sale of equity shares in a company/units of equity oriented fund entered
into a recognized stock exchange in India, the rate of securities transaction tax has been reduced from
0.125% to 0.10% w.e.f. 1st July 2012.
12. In accordance with and subject to the conditions and to the extent specified in Section 54EC of the Act, the
shareholders would be entitled to exemption from tax on long term capital gains (not covered by sections
10(36) and 10(38)) arising on transfer of their shares in the Company if such capital gains are invested in
any of the long term specified assets in the manner prescribed in the said section provided that the
investment made on or after 1.4.2007 in the long term specified asset during any financial year does not
exceed INR 5,000,000. Where the long-term specified asset is transferred or converted into money at any
time within a period of three years from the date of its acquisition, the amount of capital gains exempted
earlier would become chargeable to tax as long term capital gains in the year in which the specified asset is
transferred or converted into money.
13. In case of a shareholder being an individual or a Hindu Undivided Family, in accordance with and subject
to the conditions and to the extent specified in Section 54F of the Act, the shareholder would be entitled to
exemption from long term capital gains (not covered by sections 10(36) and 10(38)) on the sale of shares
in the Company upon investment of net consideration in purchase / construction of a residential house. If
part of net consideration is invested within the prescribed period in a residential house, then such gains
would not be chargeable to tax on proportionate basis. Further, if the residential house in which the
investment has been made is transferred within a period of three years from the date of its purchase or
construction, the amount of capital gains tax exempted earlier would become chargeable to tax as long
term capital gains in the year in which such residential house is transferred.
14. As per provisions of Section 90(2) of the Act, non-resident shareholders can opt to be taxed in India as per
the provisions of the Act or the double taxation avoidance agreement entered into by the Government of
India with the country of residence of the non-resident shareholder, whichever is more beneficial.
TAX BENEFITS AVAILABLE TO OTHER NON-RESIDENTS (Other than Foreign Institutional Investors)
UNDER THE INCOME TAX ACT, 1961 (“THE ACT”):
1. Under Section 10(34) of the Act, dividend (whether interim or final) declared, distributed or paid by the
Company on or after 1st April 2004 is completely exempt from tax in the hands of the shareholders of the
Company.
Section 14A of the Act restricts claim for deduction of expenses incurred in relation to income which does
not form part of the total income under the Act. Thus, any expenditure incurred to earn the said income
will not be tax deductible expenditure.
As per section 94(7) of the Act, losses arising from sale/ transfer of shares, where such shares are
purchased within three months prior to the record date and sold within three months from the record date,
will be disallowed to the extent such losses do not exceed the amount of exempt dividend.
2. In accordance with and subject to the conditions and to the extent specified in Section 112 of the Act, tax
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on long term capital gains arising on sale on listed securities or units before 1st October 2004 will be, at the
option of the concerned shareholder, 10% of capital gains (computed without indexation benefits) or 20%
of capital gains (computed with indexation benefits) as increased by a surcharge and education cess and
secondaryhigher education cess at an appropriate rate on the tax so computed in either case.
3. As per the provisions of section 10(38), long term capital gains arising from the sale of Equity Shares in
any company through a recognized stock exchange or from the sale of units of an equity oriented mutual
fund shall be exempt from Income Tax if such sale takes place after 1st of October 2004 and such sale is
subject to Securities Transaction tax.
4. As per the provisions of section 111A, Short Term capital gains arising from the transfer of Equity Shares
in any company through a recognized stock exchange or from the sale of units of equity oriented mutual
fund shall be subject to tax at the rate of 15% provided such a transaction is entered into after the 1st day of
October, 2004 and the transaction is subject to Securities Transaction Tax.
5. In accordance with and subject to the conditions and to the extent specified in Section 54EC of the Act, the
shareholders would be entitled to exemption from tax on gains arising on transfer of their shares in the
Company (not covered by sections 10(36) and 10(38)) if such capital gains are invested in any of the long
term specified asset provided that the investment made on or after 1.4.2007 in the long term specified asset
during any financial year does not exceed INR 5,000,000. Where the long-term specified asset is
transferred or converted into money at any time within a period of three years from the date of its
acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term
capital gains in the year in which the specified asset is transferred or converted into money.
6. In case of a shareholder being an individual or a Hindu Undivided Family, in accordance with and subject
to the conditions and to the extent specified in Section 54F of the Act, the shareholder would be entitled to
exemption from long term capital gains (not covered by sections 10(36) and 10(38)) on the sale of shares
in the Company upon investment of net consideration in purchase/construction of a residential house. If
part of net consideration is invested within the prescribed period in a residential house, then such gains
would not be chargeable to tax on a proportionate basis. Further, if the residential house in which the
investment has been made is transferred within a period of three years from the date of its purchase or
construction, the amount of capital gains tax exempted earlier would become chargeable to tax as long
term capital gains in the year in which such residential house is transferred.
7. As per provisions of Section 90(2) of the Act, non-resident shareholders can opt to be taxed in India as per
the provisions of the Act or the double taxation avoidance agreement entered into by the Government of
India with the country of residence of the non-resident shareholder, whichever is more beneficial.
8. As per provisions of Section 36(1)(xv) of the Act, Securities Transaction Tax paid in respect of the taxable
securities transactions entered into in the course of the business is allowed as a deduction if the income
arising from such taxable securities transactions is included in the income computed under the head ‘Profit
and gains of business or profession’. Where such deduction is claimed, no further deduction in respect of
the said amount is allowed while determining the income chargeable to tax as capital gains.
9. In case of delivery based purchase/sale of equity shares in a company/units of equity oriented fund entered
into a recognized stock exchange in India, the rate of securities transaction tax has been reduced from
0.125% to 0.10% w.e.f. 1st July 2012.
TAX BENEFITS AVAILABLE TO FOREIGN INSTITUTIONAL INVESTORS (‘FII’) UNDER THE
INCOME TAX ACT, 1961 (“THE ACT”):
1. In case of a shareholder being a Foreign Institutional Investor (FII), in accordance with and subject to the
conditions and to the extent specified in Section 115AD of the Act, capital gains (not covered by sections
10(36) and 10(38)) arising from transfer of securities are taxable as follows, subject to conditions specifies
therein:
Nature of income Rate of tax (%)
LTCG on sale of equity shares not subjected to STT 10
STCG on sale of equity shares subjected to STT 15
STCG on sale of equity shares not subjected to STT 30
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2. It is to be noted that the benefits of Indexation and foreign currency fluctuation protection as provided by
Section 48 of the Act are not available to FII.
3. As per provisions of Section 90(2) of the Act, FIIs can opt to be taxed in India as per the provisions of the
Act or the double taxation avoidance agreement entered into by the Government of India with the country
of residence of the FII, whichever is more beneficial.
4. Short term capital loss computed for the given year is allowed to be set -off against short term/ long term
capital gains computed for the said year under section 70 of the Act. However, long term capital loss
computed for the given year is allowed to be set-off only against the long term capital gains computed for
the said year. Further, as per Section 71 of the Act, short term capital loss or long term capital loss for the
year cannot be set-off against income under any other heads for the same year.
5. As per the provisions of section 10(38), long term capital gains arising from the sale of Equity Shares in
any company through a recognized stock exchange or from the sale of units of an equity oriented mutual
fund shall be exempt from Income Tax if such sale takes place after 1st October 2004 and such sale is
subject to Securities Transaction tax.
6. As per provisions of Section 36(1)(xv) of the Act, Securities Transaction Tax paid in respect of the taxable
securities transactions entered into in the course of the business is allowed as a deduction if the income
arising from such taxable securities transactions is included in the income computed under the head ‘Profit
and gains of business or profession’. Where such deduction is claimed, no further deduction in respect of
the said amount is allowed while determining the income chargeable to tax as capital gains.
7. In case of delivery based purchase/sale of equity shares in a company/units of equity oriented fund entered
into a recognized stock exchange in India, the rate of securities transaction tax has been reduced from
0.125% to 0.10% w.e.f. 1st July 2012.
8. In accordance with and subject to the conditions and to the extent specified in section 54EC of the Act, the
shareholders would be entitled to exemption from tax on long term capital gains (not covered by sections
10(36) and 10(38)) arising on transfer of their shares in the Company if such capital gains are invested in
any of the long term specified assets in the manner prescribed in the said section provided that the
investment made on or after 1.4.2007 in the long term specified asset during any financial year does not
exceed INR 5,000,000. Where the long-term specified asset is transferred or converted into money at any
time within a period of three years from the date of its acquisition, the amount of capital gains exempted
earlier would become chargeable to tax as long term capital gains in the year in which the specified asset is
transferred or converted into money.
9. The Finance Act, 2015 provides that the following specified incomes of foreign companies will not be
subject to MAT under section 115JB of the Act with effect from FY 2015-16:
Capital gains (whether long term or short term) arising on transactions in securities;
Interest, royalty or fees for technical services chargeable to tax;
if such income is credited to Profit and Loss account and tax payable on such capital gains income under
normal provisions is less than the MAT rate of 18.5%. Consequently, corresponding expenses shall also be
excluded while computing MAT.
TAX BENEFITS AVAILABLE TO MUTUAL FUNDS UNDER THE INCOME TAX ACT, 1961 (“THE
ACT”):
In case of a shareholder being a Mutual fund, as per the provisions of Section 10(23D) of the Act, any income of
Mutual Funds registered under the Securities and Exchange Board of India Act, 1992 or Regulations made there
under, Mutual Funds set up by public sector banks or public financial institutions and Mutual Funds authorized by
the Reserve Bank of India would be exempt from Income Tax, subject to the conditions as the Central Government
may by notification in the Official Gazette specify in this behalf.
TAX BENEFITS AVAILABLE TO VENTURE CAPITAL COMPANIES /FUNDS UNDER THE INCOME
TAX ACT, 1961 (“THE ACT”):
In case of a shareholder being a Venture Capital Company / Fund, as per the provisions of Section 10(23FB) of the
Act, any income of Venture Capital Companies / Funds registered with the Securities and Exchange Board of India,
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would exempt from Income Tax, subject to the conditions specified.
Expenditure incurred on exempt income:
As per provision of Section 14A of the Act, expenditure incurred to earn an exempt income is not allowed as
deduction while determining taxable income.
TAX BENEFITS UNDER THE WEALTH TAX ACT, 1957
The Wealth Tax Act, 1957 has now been abolished from FY 2015-16 and is not applicable from AY 2016-17
onwards.
Note:
All the above possible tax benefits are as per the current tax laws as amended by the Finance Act, 2015. The
information provided below sets out the possible tax benefits available to the shareholders in a summary manner
only and is not a complete analysis or listing of all potential tax consequences of the purchase, ownership and
disposal of equity shares under the current tax laws presently in force in India. Several of these benefits are
dependent on us or our shareholders fulfilling conditions prescribed under relevant tax laws. We may not choose to
fulfill such conditions. This information is not exhaustive or comprehensive and is not intended to be a substitute for
professional advice. Investors are advised to consult their own tax consultant with respect to the tax implications of
an investment in the Equity Shares. Investors should note that a draft of the Direct Tax Code Bill has been placed
before the Indian Parliament. If that law comes into effect, there could be an impact on the tax provisions.
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LEGAL PROCEEDINGS
Except as described below, there are no outstanding litigations suits, civil or criminal prosecuting or
proceedings against our Company, our Directors, our Promoters and our Subsidiaries before any judicial, quasi-
judicial, arbitral or administrative tribunals or any disputes, tax liabilities, non-payment of statutory dues,
overdues to banks/ financial institutions, defaults against banks/ financial institutions, defaults in dues towards
instrument holders like debenture holders, fixed deposits, defaults in creation of full security as per terms of
issue/ other liabilities, proceedings initiated for economic/civil/ any other offences against our Company, our
Directors, our Promoters and our Subsidiaries, except the following: Details of litigations by and against our Company, our Directors, our Promoters and our Subsidiaries.
Outstanding litigations involving Our Company
A. Cases filed against our Company
1. Money Recovery and other Civil Suits
(a) Regular Civil Suit no. 173 of 2013 (“Suit”) filed by M/s. Nausheen Enterprises Private Limited and 2 others
(“Plaintiff”) against our Company (“Defendants”) before the Principal Senior Judge, Rajkot.
The above Suit has been filed by the Plaintiff praying for a permanent injunction against the Defendants from
running the gym from its premises in Rajkot on the grounds that the weights kept and utilized at the premises
are causing nuisance to the Plaintiffs. The Suit is presently pending before the Principal Senior Judge, Rajkot.
Our Company is in the process of an out of court settlement with the Plaintiffs with respect to the Suit.
(b) Complaint Case no. 430 of 2014 filed by Dipankar Das (“Complainant”) against our Company, through our
Managing Director and the manager at our Salt Lake, Kolkata branch (“Defendant”) before the Consumer
Dispute Redressal Forum, Unit-1 Kolkata.
The above case has been filed by the Complainant on the ground that the Complainant suffered bodily injury,
due to negligent and deficient services of the Defendant, while utilizing the services of the Defendant at its gym
branch in Salt Lake, Kolkata. The Complainant has prayed for (i) the Defendant to pay a sum of ` 2,825 (ii) the
Defendant to pay a sum of ` 8,00,000 as medical cost and mental agony and (iii) the Defendant to pay a sum of
` 25,000 towards cost of the petition.
Our Company has filed a written statement before the Forum, wherein we have denied all the allegations made
by the Complainant. The case is presently before the Consumer Dispute Redressal Forum, Unit-1 Kolkata.
(c) Complaint no. 184/2013 filed by Preethi Pai and K.B.A Kumar (“Complainant”) against our Company and
Mr. Prashant Sudhakar Talwalkar, the Chief Executive Officer of our Company (“Defendants”) before the
Consumer Redressal Forum, Mangalore.
The complaint has been filed alleging negligence and deficiency in our services due to lack of qualified and
certified trainers and that the services for which she has paid a sum of ` 59,000 is not commensuration as per
the brochure of our Company. The Complainant has claimed a refund of ` 59,000 and ` 100,000 towards
damages for mental agony with future interest at the rate of 18% per annum along with ` 1,000 towards costs.
Our Company has filed a written statement dated August 23, 2013 wherein we have denied the allegations made
against us.
The case is presently pending before the Consumer Redressal Forum, Mangalore.
(d) Complaint no. 248/2014 filed by Ms. Vrushali V. Kantikar (“Complainant”) against our Company
(“Defendant”) before the Consumer Redressal Forum, Solapur.
The complaint has been filed alleging negligence and deficiency in our services due to lack of qualified trainers
and has demanded a sum of ` 2,000,000/- towards medical expenses, `800,000 towards compensation for future
loss and the ` 10,000 towards legal cost.
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Our Company has filed a written statement before the Forum, wherein we have denied all the allegations made
by the Complainant. The case is presently before the Consumer Dispute Redressal Forum, Solapur.
(e) Complaint Case no. 153/2013 filed by Mr. Rajesh Rathi (“Complainant”) against our Company, through and
the manager at our Directors our Jodhpur branch (“Defendant”) before the District Consumer and
Redressal Forum (First), Jodhpur.
The above case has been filed by the Complainant on the ground that the Complainant suffered from asthma
after using the steam bath services at our Jodhpur branch, The Complainant has prayed for i) refund of his fees
i.e. ` 16,951 ii) ` 45,000 towards medical expenses, iii) ` 100,000 towards compensation and iv) ` 21,000
towards legal cost.
Our Company has filed an application and an affidavit of evidence before the Forum, wherein we have denied
all the allegations made by the Complainant and requested the forum to dismiss the complaint with cost. The
case is presently before the District Consumer and Redressal Forum (First), Jodhpur.
(f) Application No. 27 of 2013 before the Divisional Joint Registrar of Co-operative Societies, Mumbai Division,
Mumbai under Application under section 21A of the Maharashtra Co-operative Societies Act, 1960 by M/s
Pee Jay Enterprises & Others (“Applicants”) against the Mangal Simran Premises Co Operative Housing
Society Ltd. (“Society”), our Company and other members of the Society.
The said Application has been made by the Applicants challenging the order passed by the District Deputy
Registrar, Co-operative Society, Mumbai City (3) pertaining to registration of Mangal Simran Premises Co
Operative Housing Society Limited under section 6 of Maharashtra Co-operative Societies Act, 1960. The
Applicant has alleged that the District Deputy Registrar has incorrectly classified the Society as a ‘general
society’, which is covered by Rule 4(e) (xiv) of the Maharashtra Co-operative Societies Rules, 1961 whereas it
shall be classified as ‘housing society’ as covered by Rule 4(e)(vii) of the Maharashtra Co-operative Societies
Rules, the Applicant has prayed that (i) the application be admitted (ii) the records and proceedings be called
from the office of District Deputy Registrar and (iii) deregistration of the Society under Section 21A of the
Maharashtra Co-operative Societies Act, 1960.
The Application is presently pending before the Divisional Joint Registrar of Co-operative Societies, Mumbai
Division,
(g) Complaint (ULP) No. 24/2015 file by Girija S. Naik (“Complainant”) against our Company (“Defendant 1”)
and M/s Multicare Services Private Limited, Labour Contractor (“Defendant 2”) before the Labour Court at
Solapur.
The said complaint has been filed by the Complainant who is an ex- employee of Defendant 2. The
Complainant’s services had been terminated by Defendant 2 after our Company found that the Complainant had
misappropriated funds of our Company. The Complainant has challenged her termination and has prayed for
restoration of her service and demanding her salary from the date of termination and legal cost of filling this
application.
The case is presently pending before the Labour Court at Solapur.
(h) Complaint (ULP) No. 25/2015 filed by Vishda V. Patil (“Complainant” ) against our Company (“Defendant
1”) and M/s Multicare Services Private Limited, Labour Contractor (“Defendant 2”) before the Labour
Court at Solapur.
The said complaint has been filed by the Complainant who is an ex- employee of Defendant 2. The
Complainant’s services had been terminated by Defendant 2 after our Company found that the Complainant had
misappropriated funds of our Company. The Complainant has challenged her termination and has prayed for
restoration of her service and demanding her salary from the date of termination and legal cost of filling this
application.
(i) Appeal No. 70 of 2015 filed by our Company against M. Anand Reddy & Ors. (“Respondent”) before the
High Court of Juridicature at Hyderabad.
The above appeal has been filed by our Company against the Respondent challenging the decree and judgement
dated October 13, 2014 passed by the XIV Addl. Chief Judge directing our Company to pay a sum of ` 24,734,961 and further to pay damages / mesne profits ` 528,320 per month from July 01, 2014 to till date to
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the Respondent. The dispute is pertaining to the premises situated at Banjara Hills, Hyderabad, where our
Company had a Fitness Center earlier.
As on May 31, 2015, the matter is appeal before the Hon’ble High Court of Juridicature at Hyderabad.
(j) Appeal filed by our Company against the Sub-Registrar, Jodhpur (“Respondent”) before the Revenue Board,
Ajmer.
The above case has been filed by our Company against the Respondent challenging the order dated February 21,
2013 passed by the Defendant directing us to pay the deficit stamp duty on one of our registered lease
agreement for our Jodhpur Gym. The case has been filed by our Company on the grounds that the Defendant
has erroneously considered the security deposit amount as advance rent and that the lease agreement was
registered by the Defendant after evaluating the stamp duty and registration fee. Our Company has, under
protest, deposited the deficit stamp duty amounting to ` 201,120.
2. Trademark Related Cases and Oppositions
(a) Opposition No. MUM-723442 filed by M/s T T Industries against trademark application no. 1408464 filed by
our Company
M/s T T Industries has filed the aforesaid opposition dated April 07, 2008 opposing the registration of
trademark “TT” published under application no. 1408464 in class 25 in the Trademark Journal No. 1387 dated
March 01, 2008 in the name of Talwalkars Better Value Fitness Limited, which they allege is structurally,
visually and phonetically similar to the trademark “TT” registered by M/s TT Industries under 42 classes viz
3,4,5,7,8,9,10,11,14,15,16,17, 18, 19, 20, 23, 24, 25, 26, 27, 28, 30, 32, 33, 34, 35, 36, 38, 41 . TT Industries
further allege that they also own 25 copyrights registered at various points of time titled with the mark/work
“TT”. The opposition is pending before the trademark registry. Further, a counter- statement dated March 31,
2011 was filed by our Company in reply to the notice of opposition. Our Company has also filed an affidavit of
evidence in support of the application dated August 23, 2011. The matter is pending before the Registrar of
Trade Marks at the Trade Marks Registry, Mumbai.
3. Potential Litigation
(a) Notice dated July 14, 2011 received by our Company from Ami Joshi and Megha Shah through their
advocate Mr. Narendra D Kalal at Ahmedabad
Our Company is in receipt of notice dated July 14, 2011 from Ami Joshi and Megha Shah alleging that they
have been working with our Gym as dieticians since July 27, 2009 and August 14, 2010 respectively and they
had been over burdened with work and upon making a complaint to our Company, our Company terminated
their service without any prior intimation or notice. Ami Joshi and Megha Shah have demanded 6 months
compensation for their untimely termination of service.
Our company has forwarded the said notice to our recruiting intermediaries i.e. Multicare Services (India)
Private Limited since Ami Joshi and Megha Shah are not employees of our Company and have been in the
services of our Company on contractual basis. Multicare Services (India) Private Limited has replied to the
above notice vide letter dated July 27, 2011 denying all allegations and liabilities.
We have received no further communication in the matter.
(b) Notice dated August 27, 2014 received by our Company from Shah Ataur Rahman
Our Company is in receipt of Notice dated August 27, 2014 from Shah Ataur Rahman alleging that deficiency
in services in our Lucknow branch. Vide the said notice, he has demanded a refund of membership fee paid by
him amounting to ` 21,500 along with an additional sum of ` 10,000 towards mental stress and agony. Our
Company has replied to the said notice on September 23, 2014 wherein we have denied all the allegations raised
by him.
We have received no further communication from him in this regard.
B. Cases filed by our Company
161
1. Money Recovery and other Civil Suits
(a) Title suit bearing number 24 of 2010 filed by our Company (“Plaintiff”) against Mr. Srinath Daga,
(“Defendant”) before the Court of Learned Civil Judge (Senior Division) at Barast.
The suit has been filed against Mr. Srinath Daga before the Court of Learned Civil (Senior Division) at Barast
for declaration and permanent injunction.
The Plaintiff had entered into a tenancy agreement with the Defendant on February 23, 2007 for occupying the
premises situated at BE-72, Salt Lake City, Sector-I, Kolkata - 700 064. The Plaintiff states that, he received a
letter dated January 08, 2010 from the Defendant informing the Plaintiff that the Defendant has received a
notice from the Urban Development Department alleging that the premises is being used by the Plaintiff for
commercial purposes which is against the law and that the Plaintiff is liable to vacate the said premises within
ten days from the date of receipt of the aforesaid letter. The Plaintiff further states that it was agreed between
the Plaintiff and the Defendant that the Defendant would take the responsibility of obtaining all necessary
permissions from Bidhanagar Municipality and also from Urban Development Department, Government of
West Bengal which the Defendant has failed to obtain.
The Plaintiff has inter alia prayed for (i) a decree for declaration that the Plaintiff is a monthly tenant under the
Defendant of the said premises; (ii) a decree for declaration that the Plaintiff as tenant has got right to enjoy all
rights and facilities arising out of the said tenancy of the entire premises; (iii) a decree for declaration that the
Plaintiff is entitled to use and occupy the entire premises as tenants of the Defendants upon monthly payment of
rent without being disturbed by the Defendants and their men, agents and servants and (iv) an order of
permanent injunction restraining the Defendant and their men, agents and servants from creating any
disturbance to the Plaintiff in peaceful enjoyment of his tenancy in respect of the said premises
The matter is pending before the Court of Learned Civil (Senior Division) at Barast for filing the written
statement by the Defendants.
The case is currently pending before the Revenue Board.
2. Criminal case
(a) Complaint No. 354/SS/2015 filed by our Company against Uplavika Washimkar (“Accused”) under section
138 of Negotiable Instrument Act, 1938 before 27th
Metropolitan Magistrate at Mulund, Mumbai
Our Company has filed the case against the Accused on the grounds that the Accused was appointed through a
labour contractor as Councilor and during her service with the Company she had accepted the cash amounting
to `76,500 from one of the Customer of our company and misappropriated the funds. The Accused accepted the
misappropriation of funds and issued a cheque to our Company for the said amount however, on presenting the
cheque to the bank, the same was returned due to “stop payment” instructions issued by the Accused.
The case is presently pending before the 27th
Metropolitan Magistrate at Mulund, Mumbai
(b) FIR No 133 of 2015 filled by our Company at Sadar Bazar, Solapur against Chetan Padiyar, Sujata
Shelgikar, Vishada Patil and Girija Danke (collectively “Accused”) under section 420, 406, 465, 468 and
477A of the Indian Penal Code, 1860.
Our Company has lodged a FIR against the Accused who are employees of one of our labour contractor’s and
are providing services to our Company on contractual basis. The FIR has been lodged on the grounds that
during their service with our Company the Accused accepted cash amounting to ` 275,842 from one of our
customers and have misappropriated the funds. Hence the present FIR is lodged by the Company against them.
Outstanding litigations involving our Directors/ Promoters
C. Cases filed against our Directors/ Promoters
1. Civil Cases
(a) Mr. Prashant Sudhakar Talwalkar
162
For details of the cases filed against him, please refer to the cases summarized at point (c) and (d) above in the
section titled “Legal Proceedings” beginning on page 159 of this Placement Document.
(b) Mr. Girish Madhukar Talwalkar
Case No. 142 /PF of 2000 filed by R. R. Bhalekar, Provident Fund Inspector, Mumbai (“Complainant”)
before the Additional Chief Metropolitan Magistrate’s, 47th
Court at Esplanade, Mumbai against M/s.
Talwalkar’s Health Clubs, one of our Group Companies and Mr. Girish Madhukar Talwalkar
(“Respondent”)
The above case is file by the Complainant against the Respondent alleging that the Respondent failed to submit
a monthly consolidated statement in form no. 12-A every month within 25 days of the close of that month and
the contribution cards in form no. 3A together with a statement in form 6A in respect of the member employed
by the, at the end of each financial year within one month of the ending of financial year and therefore has
committed offences under Section 14(2) and 14A of the Employees Provident Fund Act read with para 76(b) of
the Employees Provident Fund Scheme. The Complainant has prayed for an order under section 14C(1) of the
Employees Provident Fund Act and for payment of compensation under section 357 of the Code of Criminal
Proceedings, 1973 to the Employees Provident Fund account no. 2 maintained by State Bank of India.
The Respondent has filed a reply stating that the complaint is not maintainable as the same is time barred and
the Complainant had already collected the returns from the Respondent and that the Complainant has hidden
this material fact from the court.
The case is pending before the Additional Chief Metropolitan Magistrate.
(c) Mr. Manohar Gopal Bhide
Criminal Application no. 1109 of 2006 filed by Mr. Manohar Gopal Bhide and others, in his capacity of
being a Director of Mahindra Shubhlabh Services Limited and others against State of Maharashtra before
the High Court of Bombay.
The above application was filed by our Independent Director, Mr. Manohar Gopal Bhide quashing the criminal
complaint filed by the authorities for violation of the provisions under the Shops and Establishment Act before
the High Court of Bombay. The court has passed an order staying the said criminal complaint.
(d) Mr. Raman Maroo
Company Petition (“Petition”) filed by Jackie Kakubhai Shroff (the “Petitioner”) against Mr. Raman Hirji
Maroo in his capacity as the director of Shemaroo Holdings Private Limited, Mr. Jayesh Parekh, Atlas
Equifin Private Limited (“Atlas”) and five others (collectively, the “Respondents”) before the Company Law
Board, Mumbai.
The Petition has been filed the Petitioner under Sections 397, 398, 399, 402 and 403 of the Companies Act,
1956. The Petitioner has alleged, inter alia, that he is a minority shareholder of Atlas, that the Respondents are
taking undue advantage of their position as majority shareholders of Atlas. The Petitioner has further alleged
that certain fraudulent acts which include, inter alia, mismanagement, not declaring dividend, not giving
inspection of records, non-refund of share application moneys, wasteful investments, under selling shareholding
of Atlas, have been perpetrated against him by the Respondents. The Petitioner has sought, inter alia, that the
Respondents be restrained from altering the capital structure of Atlas; dealing with the property, assets or
monies of Atlas; interfering with the ownership of the Petitioner in Atlas; creating any liabilities or giving any
loans through Atlas in any manner without the consent of the Petitioner and to return the sum of ` 10 lakhs
allegedly paid by the Petitioner as share application money with interest from February 2011. The Petitioner has
prayed for relief under Sections 397, 398, 399, 402 and 403 of the Companies Act, 1956 and has, inter alia,
sought the appointment of an administrator to carry on the business and manage the affairs of Atlas, the
appointment of special auditors to inspect Atlas’ books of accounts and the production of certain documents in
relation to the matter. The Petition is currently pending before the Company Law Board, Mumbai.
2. Criminal Proceedings
163
Criminal Complaint bearing number 2400285/SW/2011 (“Complaint”) filed by Ms. Ameesha Mukherjee (the
“Complainant”) against Mr. Raman Maroo and Mr. Vishal Bhardwaj (“Defendants”) before the Court of
the Additional Chief Metropolitan Magistrate, Borivali, Mumbai.
The Complaint has been filed by the Complainant alleging that misuse of her photograph in one of the movies
produced by the Defendants. The Defendants have filed a criminal revision application bearing number 1 of
2014 (“Revision Application”) before the Sessions Court, Dindoshi, Mumbai (“Sessions Court”), praying for
the dismissal of said complaint and seeking an interim stay of proceedings pending before the said Court of the
Additional Chief Metropolitan Magistrate, Borivali, Mumbai. The Sessions Court vide order dated September
29, 2014 (“Impugned Order”) has allowed the Revision Application and has also set aside the process issued
under the Complaint. The Complainant has filed a Criminal Writ Petition before the High Court of Bombay
challenging the Impugned Order. The Criminal Writ Petition is pending before the High Court of Bombay.
3. Potential Litigation:
Notice dated October 23, 2012 received from Mr Raman H. Maroo issued by the Assessing Officer to for
assessment year 2011-2012.
The above Notice has been issued by the Assessing Officer under section 143 (1) of the Income Tax Act, 1961
demanding sum of `129,660 Towards TDS claims Mr. Maroo has replied to the said Notice submitting facts
and has requested the Assessing Officer to rectify the demand and grant a refund of `9.61,900. No further
communication has been received from the Assessing Officer in this regard.
Outstanding litigations involving our Subsidiaries
D. Cases filed against our Subsidiaries
1. Labour Cases
(a) Application No. PWA 21/08 filed before Senior Officer, Jaipur , under section 15(2) of Payment of Wages
Act, 1936 by Nitendra Shukla (“Applicant”) against Managing Director/CEO of Multicare Services India
Private Limited (“Multicare”) and Managing Director/CEO of Denovo Enterprises Private Limited
(“Denovo”), (collectively referred to as “Respondents”)
Applicant filed the above application alleging non-payment of `155,600.50 by the Respondents pursuant to
resignation by him on March 04, 2008 and claimed payment of `155,600.50/- towards the daily wages,
`1,556,500/- towards compensation and `5000/- towards legal expenses. Respondents vide their reply have
denied all demands and allegations made by the Applicant in the said application. The Judicial officer, Jaipur,
passed an ex-parte order dated June 12, 2009 ordering the Respondents to pay to the Applicant a sum of
`2,99,640 towards payment of wages and overtime and compensation. Denovo filed an application under order
9 rule 13 of the civil procedure code before the Judicial Officer, Jaipur, for setting aside above impugned order
and providing Denovo a fair chance of hearing. The Court has set aside the ex- parte order on the condition of
depositing the 50% of claim amount, the same has been deposited by our Company. Our Company has also
filed a reply to the application lodged by the Applicant i.e. Nitesh Shukla.
Multicare has filed a review application before the authority under the Payment of Wages Act, Jaipur and
requested for retrial of the matter and the order on the same is pending.
Cases filed by our Subsidiaries
(a) First appeal bearing number 387 of 2015 filed by Aspire Fitness Private Limited and the Managing Director
of our Company (“Appellants”) against Harshwardhan Ashok Kadam (“Opponent”) before the State
Consumer Disputes Redressal Commission, Mumbai
The Appeal has been filed by the Appellant against the Opponent challenging the order dated February 09, 2015
passed by the Pune District Consumer Disputes Redressal Forum (“Impugned Order”) wherein the Appellants
have been directed to refund an amount of ` 27,000 to the Opponent and also to pay a sum of ` 15,000 towards
compensation for mental and physical harassment. The Appeal has been filed praying inter alia to (i) allow the
164
appeal (ii) to quash and set aside the Impugned Order and the Impugned order be stayed till the passing of the
final decision in the appeal.
The First Appeal is presently pending before the State Consumer Disputes Redressal Commission, Mumbai.
Proceedings under the Companies Act
There is no inquiry, inspections or investigations initiated or conducted under the Companies Act or any
previous company law in the last three years immediately preceding the year of circulation of offer letter in the
case of company and all of its subsidiaries. Also if there were any prosecutions filed (whether pending or not)
fines imposed, compounding of offences in the last three years immediately preceding the year of the offer letter
and if so, section-wise details thereof for our Company and all of its Subsidiaries.
Material Frauds against the Company
There have been no material frauds committed against the Company in the last three years
Other Confirmations
There are no litigation or legal action pending or taken by any Ministry or Department of the Government or a
statutory authority against any promoter of the offeree company during the last three years immediately
preceding the year of the circulation of the offer letter and any direction issued by such Ministry or Department
or statutory authority upon conclusion of such litigation or legal action shall be disclosed.
165
INDEPENDENT AUDITORS
Our Company’s current statutory auditors, M.K. Dandeker & Co., Chartered Accountants, are independent
auditors with respect to our Company as required by the Companies Act and in accordance with the guidelines
issued by the Institute of Chartered Accountants of India. Further, M.K. Dandeker & Co, Chartered
Accountants, have audited the consolidated financial statements as of and for the financial years ended March
31, 2013, 2014 and 2015 whose reports are included in this Placement Document. Please see the section titled
“Financial Statements” beginning on page 168 of this Placement Document.
166
GENERAL INFORMATION
1. Our Company was originally incorporated on April 24, 2003 as “Talwalkars Better Value Fitness
Private Limited” under the Companies Act and is registered with the Registrar of Companies in
Mumbai and subsequently converted in to a public limited company and a fresh certificate of
incorporation was issued on November 7, 2009. Our Company’s CIN is L92411MH2003PLC140134.
The website of our Company is www.talwalkars.net.
2. As on May 31, 2015 the authorized capital of our Company is ` 320 million divided into 32 million
Equity Shares of `10 each.
3. Our Company’s registered office is situated at 801-813, Mahalaxmi Chambers, 22, Bhulabhai Desai
Road, Mumbai – 400 026, Maharashtra, India.
4. Our Company Secretary and Compliance Officer is Ms. Avanti Sankav. Her contact details are as
under:
Ms. Avanti Sankav
801-813, Mahalaxmi Chambers,
22, Bhulabhai Desai Road,
Mumbai – 400 026, Maharashtra, India.
Tel: +91 22 6612 6300
Fax: +91 22 6612 6363
Email: [email protected]
5. Under our Memorandum of Association, our principal objects are to carry out the business described in
the section titled "Our Business" beginning on page 78.
6. The Equity Shares of our Company are listed on NSE and BSE with effect from May 10, 2010.
7. The Issue was authorized and approved by our Board of Directors by resolutions dated April 08, 2015
and approved by our shareholders vide a special resolution passed through postal ballot and results
announced on May 12, 2015.
8. Our Company has received in-principle approvals under Clause 24(a) of the Listing Agreement for the
issue of Equity Shares from the Stock Exchanges and shall apply for the final listing and trading
permissions to list and trade the Equity Shares on the BSE and the NSE after Allotment in the Issue.
9. Copies of the Memorandum and Articles of Association will be available for inspection during usual
business hours on any weekday (except Saturdays and public holidays) during the offering period at
the Registered Office of our Company.
10. Other than as set forth in this Placement Document, there has been no significant change in our
Company’s financial position since March 31, 2015, the date of its last audited financial results.
11. Our Company has obtained all consents, approvals and authorizations required in relation to this Issue.
12. Except as disclosed in this Placement Document, our Company is not involved in any legal proceeding
and our Company is not aware of any threatened legal proceeding, which if determined adversely,
could result in a material adverse effect on the business, financial condition or results of operations of
our Company.
13. M. K Dandeker & Co, Chartered Accountants, Statutory Auditors have audited our financial
statements as of and for the Financial Years ended March 31, 2013, 2014 and 2015 and have consented
to the inclusion of their reports in relation thereto in this Placement Document.
14. Our Company confirms that it is in compliance with the minimum public shareholding requirements as
required under the terms of the listing agreements with the Stock Exchanges.
15. The Floor Price for the Issue is ` 319.26 per Equity Share calculated in accordance with Regulation 85
of SEBI ICDR Regulations as certified by M. K. Dandeker & Company, the Statutory Auditors to our
Company. Our Company offered a discount 4.47% on the Floor Price i.e. `14.26 per share in terms of
Regulation 85 of the SEBI ICDR Regulations.
167
FINANCIAL STATEMENTS
Sr.
No.
Contents Page No.
1. Auditor’s Report and Consolidated Financial Statements for the year ended March 31,
2013
F1
2. Auditor’s Report and Consolidated Financial Statements for the year ended March 31,
2014
F39
3. Auditor’s Report and Consolidated Financial Statements for the year ended March 31,
2015
F75
168
DECLARATION IN ACCORDANCE WITH FORM PAS-4
We, the Board of Directors of our Company certify that:
i. Our Company has complied with all the provisions of the Companies Act, 2013 and the rules made
thereunder;
ii. the compliance with the Companies Act, 2013 and the rules does not imply that payment of dividend or
interest or repayment of debentures, if applicable, is guaranteed by the Central Government; and
iii. the monies received under this Issue shall be used only for the purposes and objects indicated in this
Placement Document (which includes disclosures prescribed under Form PAS-4).
Signed by:
_________________________________
Name: Vinayak Ratnakar Gawande
Designation: Director
I have been authorized by the QIP Committee of our Company vide resolution dated June 19, 2015 to sign this
form and declare that all the requirements of Companies Act, 2013 and the rules made thereunder in respect of
the subject matter of this form and matters incidental thereto have been complied with. Whatever is stated in
this form and in the attachments thereto is true, correct and complete and no information material to the subject
matter of this form has been suppressed or concealed and is as per the original records maintained by the
Promoters subscribing to the Memorandum of Association and the Articles of Association. It is further declared
and verified that all the required attachments have been completely, correctly and legibly attached to this form.
________________________________
Name: Vinayak Ratnakar Gawande
Designation: Director
Date: June 19, 2015
Place: Mumbai
169
DECLARATION
Our Company certifies that all relevant provisions of Chapter VIII read with Schedule XVIII of the SEBI ICDR
Regulations have been complied with and no statement made in this Placement Document is contrary to the
provisions of Chapter VIII and Schedule XVIII of the SEBI ICDR Regulations and that all approvals and
permissions required to carry on our business have been obtained, are currently valid and have been complied
with. Our Company further certifies that all the statements in this Placement Document are true and correct.
Signed by
Name: Vinayak Ratnakar Gawande
Designation: Director
Date: June 19, 2015 Place: Mumbai
170
TALWALKARS BETTER VALUE FITNESS LIMITED
REGISTERED OFFICE OF THE COMPANY
801-813, Mahalaxmi Chambers,
22, Bhulabhai Desai Road, Mumbai – 400 026, Maharashtra,
India.
Website: www.talwalkars.net; CIN: L92411MH2003PLC140134
ADDRESS OF THE COMPLIANCE OFFICER
Ms. Avanti Sankav 801-813, Mahalaxmi Chambers,
22, Bhulabhai Desai Road, Mumbai – 400 026, Maharashtra,
India. Tel: +91 22 6612 6300, Fax: +91 22 6612 6363, Email: [email protected]
BOOK RUNNING LEAD MANAGERS
IIFL Holdings Limited
8th Floor, IIFL Centre
Kamala City, Senapati Bapat Marg
Lower Parel (West)
Mumbai 400 013, Maharashtra, India
Centrum Capital Limited Centrum House,
CST Road, Vidyanagari Marg, Kalina, Santacruz (East),
Mumbai – 400 098, Maharashtra, India.
LEGAL ADVISER TO THE ISSUE
M/s. Crawford Bayley & Co. State Bank Buildings, 4th Floor
N.G.N. Vaidya Marg Fort, Mumbai 400 023
Maharashtra, India.
INTERNATIONAL COUNSEL AS TO SELLING AND TRANSFER RESTRICTIONS
Squire Patton Boggs Singapore LLP
10 Collyer Quay
#03-01/02 Ocean Financial Center
Singapore 049315
STATUTORY AUDITORS TO THE COMPANY
M.K. Dandeker & Co.
Chartered Accountants
No. 244 Angappa Naicken Street,
2nd Floor, Chennai- 600 001, Tamil Nadu, India.