placement document not for circulation … pd twl.pdfplacement document not for circulation private...

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.

http://www.talwalkars.net/

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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;

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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).

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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

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Sr. No.


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.


c. The monies received under the offer shall be used only for the purposes and objects indicated in the Offer letter.

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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

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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

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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

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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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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

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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

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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)

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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

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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

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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

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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

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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

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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.


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

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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

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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.


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

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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

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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.

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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

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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

Redemption date

Coupon Rate

Per Annu

m

Nos. of

Securitie

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:

INE502K07039

2 `.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:

INE502K07047

56

Sr. No

Issue price (per security)

Face Value(per security)

Allotment date

Redemption date

Coupon Rate

Per Annu

m

Nos. of

Securitie

s

Name of Subscriber/D

ebenture holder

Listed Effective

from

Security Details

3 `.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:

INE502K07054

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

Number of Equity Shares traded on date of high

Volume on date of high (` In Million)

Low (`)

Date of low

Number of Equity Shares traded on date of low

Volume on date of low (` In Million)

Average price for the year (`)*

Total number of equity shares traded

Total volume (` In Million)

2015 394.40

March 13, 2015

71,723 27.98 162.05 April 1, 2014

11,514 1.86 241.51

11,806,217

3,111.03

2014 173.50 March 27, 2014

401,516 70.96 112.60

August 30, 2013

9,292 1.06 140.55

7,142,985

1,033.17

2013 217.35 October 26, 2012

388,257 82.35 141.05

March 22, 2013

13,959 1.99 170.25 9,519,778

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

Fiscal

High (`)

Date of High


Volume on date of high (` In Million)

Low *(`)

Date of low



Average price for the year (`)*


Total volume (` In Million)

2015 395.85

March 17, 2015

191,224 76.05 162.15

April 1, 2014

51,790 8.39 241.69 44,944,995

11,707.82

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:

http://www.bseindia.com/

http://www.nseindia.com/

58

BSE

Month High (`)*

Date of High


Volume on date of high (Ìn Million)

Low (`)* Date of low



Average price for the month (`)*


Total volume (Ìn 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


Volume on date of high (Ìn Million)

Low (`)*

Date of low



Average price for the month (`)*


Total volume (Ìn 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 1,419.3

1 April 2015

366.55

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

395.85

March 17, 2015 191224 76.05 330.9 March

09, 2015 60,456 20.26 364.84 41,86,320

1,549.68

February 2015

351.30

February 19, 2015 19,4495 67.66 314.5 February

12, 2015 64,997 20.58 331.70 3,270,108 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 2,112.6

2

December 2014

292.10

December 31, 2014

177,974 52.29 233.70

December 04, 2014

97,735 23.11 263.78 70,31,136

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





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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.

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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.

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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.

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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:

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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)


As % of Income from Operations

(Net)


As % of Income

from Operations

(Net)

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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

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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

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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

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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

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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

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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

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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

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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.

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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:

http://www.icsiindia.in/sectors/gym.html

http://www.icsiindia.in/sectors/gym.html

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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

http://www.wikinvest.com/wiki/Heart_disease

http://www.wikinvest.com/wiki/Heart_disease

http://www.wikinvest.com/wiki/Incidence_of_cancer

http://www.wikinvest.com/wiki/Obesity

http://www.wikinvest.com/wiki/Health_scares

http://www.wikinvest.com/wiki/Health_scares

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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

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suit for specific performance or as evidence of part performance under the TP Act or as collateral), unless it has been registered.

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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


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


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

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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

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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:

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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

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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

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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)

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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

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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

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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.

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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.


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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

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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

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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 shareholder (II)

Total Shares held

Shares pledged or otherwise encumbered**

Details of warrants

Details of convertible securities

Total shares (including underlying shares assuming full conversion of warrants and convertible securities) as a % of diluted share capital (XIII)

Number (IV)

as a % of grand total (A) + (B) + (C) (V)

Number (VI)

as a percentage (VII) = (VI) / (IV)*100

as a % of grand total (A) + (B) + (C) of sub-clause (I)(a) (VIII)

Number of warrants held (XI)

As a % total number of warrants of the same class (X)

Number of convertible securities held (XI)

As a % total number of convertible securities of the same class (XII)

1 Prashant Sudhakar Talwalkar

2,876,080

10.99 0 0.00 0.00 0 0 0 0 0

2 Girish Madhukar Talwalkar

2,864,280

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

1,920,200

7.33 0 0.00 0.00 0 0 0 0 0

5 Vinayak Ratnakar Gawande

1,920,200

7.33 0 0.00 0.00 0 0 0 0 0

6 Harsha Ramdas Bhatkal

1,560,200

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 1,340,811

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

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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

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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

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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. .

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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.

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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.

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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.

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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 nationwide. 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

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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.



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.


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.






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.


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.


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.


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.





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

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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

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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

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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

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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.

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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.

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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.


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FINANCIAL STATEMENTS Sr. No.

Contents Page No.

1. Auditor’s Report and Consolidated Financial Statements for the year ended March 31, 2013

F1


F39


F75

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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.