Talwalkars Auditor Issues Disclaimer on FY25 Results

Nature of the Event or Disclosure

This document is an Independent Auditor's Report issued by K Bhavsar & Co. Chartered Accountants on the audited annual standalone financial results of Talwalkars Better Value Fitness Limited for the quarter and year ended March 31, 2025, prepared pursuant to Regulation 33 of the SEBI (LODR) Regulations, 2015.

The auditor has issued a Disclaimer of Opinion on the financial results.

Basis for Disclaimer of Opinion

The auditor was unable to obtain sufficient appropriate audit evidence to provide an opinion due to several significant matters:

The Company was under liquidation proceedings until it was acquired as a going concern on November 7, 2024 (Transfer Date).
The Company adopted Fresh Start Accounting effective the Transfer Date, writing back pre-transfer liabilities to Capital Reserve and recording transferred assets at management-determined values.
Due to the non-availability of complete historical records during the liquidation period (April to November 2024), the auditor could not independently verify:
The opening balances.
The exact quantum of pre-transfer liabilities written back to Capital Reserve.
The valuation of assets transferred (recorded at management-determined values without a formal independent valuation).
The physical condition of assets for potential impairment.
Tax implications of the liability writebacks.
Residual closing balances (receivables, payables, loans).
Provisions for employee benefits, contingent liabilities, and past SEBI compliances.
The cumulative financial impact of these matters on the financial statements for the year ended March 31, 2025, remains unascertainable.

Emphasis of Matter

The auditor draws attention to the following notes in the financial results:

NCLT Relief Order (Post Balance Sheet Event): The Hon'ble NCLT Relief Order (I.A. No. 840 of 2025) was pronounced on February 26, 2026. This order, a material non-adjusting post-balance sheet event, legally confirms:
Extinguishment of existing equity share capital.
Regularization of statutory non-compliances.
Grants immunity under Section 32A of the IBC.
Capital Structure & Listing Status: The entire existing equity share capital stands cancelled effective the Transfer Date. Trading in the company's equity shares remains suspended on BSE and NSE as of March 31, 2025. The company is seeking regulatory approvals for the issuance of new shares and resumption of trading.

Key Financial Figures (Year Ended March 31, 2025 - Audited)

(Rs. in Lakh, except per share data)

Total Revenue: ₹3.62 (Entirely from Other Income; Revenue from Operations was ₹0.00)
Total Expenses: ₹2,096.48
Depreciation and Amortization: ₹2,026.80
Liquidation Expenses: ₹69.68
Net Loss before tax: ₹(2,092.85)
Tax Expenses: ₹0.00
Net Loss for the period: ₹(2,092.85)
Total Comprehensive Income for the period: ₹(2,092.85)
Paid-up Equity Share Capital: ₹3,100.49 lakh
Face Value per Equity Share: ₹10.00
Reserves (excluding revaluation reserves): ₹(855.89) lakh
Earnings Per Share (EPS) - Basic & Diluted: ₹(0.68)

Key Financial Figures (Quarter Ended March 31, 2025 - Audited)

Total Revenue: ₹3.62
Total Expenses: ₹574.18
Net Loss for the quarter: ₹(570.55)
EPS for the quarter: ₹(0.18)

Statement of Assets & Liabilities (As at March 31, 2025 - Audited)

(Rs. in Lakhs)

Total Assets: ₹27,187.59
Non-Current Assets: ₹23,198.68
Property, Plant and Equipment: ₹5,435.31
Capital Work-in-Progress: ₹2,268.10
Investments: ₹7,653.00
Loans: ₹7,038.98
Other Non-Current Assets: ₹803.30
Current Assets: ₹3,988.90
Inventories: ₹27.90
Trade Receivables: ₹556.00
Cash and Cash Equivalents: ₹3,056.42
Other Current Assets: ₹348.58
Total Equity and Liabilities: ₹27,187.59
Equity: ₹2,244.60
Equity Share Capital: ₹3,100.49
Other Equity: ₹(855.89)
Non-Current Liabilities: ₹20,805.59
Borrowings: ₹17,579.59
Deferred Tax Liabilities: ₹3,226.00
Current Liabilities: ₹4,137.40
Borrowings: ₹1,000.00
Trade Payables: ₹1,386.00
Other Current Liabilities: ₹1,434.00
Current Tax Liabilities: ₹317.40

Cash Flow Statement (Year Ended March 31, 2025 - Audited)

(Rs. in Lakhs)

Net Cash from Operating Activities: ₹265.35
Net Cash Used in Investing Activities: ₹728.71
Net Cash from Financing Activities: ₹(1,012.42)
Net Decrease in Cash and Equivalents: ₹(18.36)
Cash and Equivalents at Opening: ₹3,074.78
Cash and Equivalents at Closing: ₹3,056.42

Corporate Background and Key Events

Corporate Insolvency Resolution Process (CIRP): Initiated on January 11, 2021, by order of NCLT Mumbai on an application filed by Axis Bank Ltd. No resolution plan was received, and the CoC resolved to liquidate the company.
Liquidation: NCLT passed the Liquidation Order on April 28, 2022. Mr. Gajesh Labhchand Jain was appointed Liquidator. The company had no active operations during liquidation (April 28, 2022, to November 7, 2024).
Going Concern Sale: The liquidator sold the company as a going concern via e-auction under IBBI regulations.
Sale Certificate: Dated January 23, 2025, confirmed:
Completion of sale effective November 7, 2024 (Transfer Date).
Receipt of entire consideration.
Extinguishment and cancellation of entire existing equity share capital without payment.
Transfer of ownership and management to the Successful Bidder.
Completion of distribution to creditors under Section 53(1) of IBC on November 28, 2024.
Assets Transferred: Included immovable property in Mumbai and machinery (21 X-Body Newave Med Machines) at 18 locations across India.

Capital Structure Impact

The entire existing equity share capital of ₹3,100.49 lakh was cancelled effective November 7, 2024, as per the Sale Certificate.
A post-balance sheet NCLT Relief Order (Feb 26, 2026) confirmed this cancellation.
The company proposes to issue a new capital structure post-March 31, 2025:
95,00,000 equity shares (95%) to new promoters/acquirer at ₹10 face value.
5,00,000 equity shares (5%) to public/strategic investors at ₹10 face value.
Total new paid-up capital: ₹10,00,00,000.
The new shares had not been allotted as of March 31, 2025. This is a non-adjusting event.

Regulatory and Listing Status

Trading in equity shares remains suspended on BSE and NSE as of March 31, 2025.
The company could not comply with SEBI LODR Regulation 33 from Q1 FY22 onwards due to CIRP, liquidation, and suspension of the Board of Directors.
The NCLT Relief Order (Feb 26, 2026) regularizes these past non-compliances and waives penalties.
The company is process of seeking approvals from SEBI and stock exchanges for lifting the trading suspension and resuming trading.

Approval

The financial results were reviewed by the Audit Committee and approved by the Board of Directors at their meeting held on May 30, 2026.