Annual Report-FY 2011-12

Transcription

Director(s)
As on 31 May, 2012
Kapil Kapoor
V D Wadhwa
Daya Dhaon
Gagan Singh (Ms.)
Pradeep Mukerjee
Bijou Kurien
Arthur Joseph Morissette
Non-Executive Director & Chairman
Managing Director
Non-Executive & Independent Director
Non-Executive Director
Company Secretary
Shilpa Verma
Bankers
The Hongkong & Shanghai Banking Corporation Limited
HDFC Bank Limited
Auditors
BSR & Co.,
Chartered Accountants
Registered Office
117 G.F. World Trade Centre,
Babar Road, New Delhi – 110001.
Works
Plot No.10
Baddi Industrial Area
Katha Bhatoli
Baddi, Distt. Solan (H.P)
Share Registrar &
Transfer Agent
Alankit Assignment Limited
2E/21 Alankit House
Jhandewalan Extension
New Delhi-110 055
Tel.: 011-42541234
Fax: 011-42541967
Email.: rta@alankit.com
Website : www.alankit.com
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NOTICE
Notice is hereby given that the Twenty-fourth Annual General Meeting of the Members of TIMEX GROUP INDIA LIMITED
will be held on Friday, 3 August 2012 at 10.00 A.M. at the Air Force Auditorium, Subroto Park, New Delhi - 110010, to transact
the following business:
ORDINARY BUSINESS
1.
To receive, consider and adopt the Balance Sheet as at 31 March 2012, the Profit and Loss Account for the year
ended on that date and the Report of the Auditors’ and Directors’ thereon.
2.
To declare dividend on Redeemable Preference Shares for the financial year 2011-12.
3.
To appoint a Director in place of Ms. Gagan Singh who retires by rotation and being eligible, offers herself for reappointment.
4.
To appoint Auditors to hold office from the conclusion of this Annual General Meeting until the conclusion of the
next Annual General Meeting and to fix their remuneration and to pass the following resolution thereof.
“RESOLVED THAT M/s. BSR & Co., Chartered Accountants (Firm Registration No. 101248W), be and are hereby
re-appointed as the Auditors of the Company to hold office from the conclusion of this Annual General Meeting to
the conclusion of the next Annual General Meeting of the Company at remuneration to be fixed by the Board of
Directors in consultation with the Auditors in addition to reimbursement of all out of pocket expenses.”
SPECIAL BUSINESS
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Appointment of Mr. Bijou Kurien as a Director, liable to retire by rotation:
To consider and, if thought fit, to pass with or without modification(s), the following resolution as an ORDINARY
RESOLUTION.
“RESOLVED THAT Mr. Bijou Kurien, who was appointed as an Additional Director of the Company pursuant to
Section 260 and other relevant provisions of the Companies Act, 1956 and Article 103(a) of the Articles of Association
of the Company with effect from 29 July 2011, holds office up to the date of this Annual General Meeting and in
respect of whom, the Company has received a notice in writing pursuant to Section 257 of the Companies Act,1956,
proposing his candidature for the office of Director, be and is hereby appointed as a Director of the Company, liable
to retire by rotation.
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Appointment of Mr. Arthur Joseph Morissette as a Director, liable to retire by rotation :
To consider, and if thought fit, to pass with or without modification(s), the following resolution as an ORDINARY
RESOLUTION.
“RESOLVED THAT Mr. Arthur Joseph Morissette, who was appointed as an Additional Director of the Company
pursuant to Section 260 and other relevant provisions of the Companies Act 1956 and Article 103(a) of the Articles
of Association of the Company with effect from 27 January 2012, holds office up to the date of this Annual General
Meeting and in respect of whom, the Company has received a notice in writing pursuant to Section 257 of the
Companies Act,1956 , proposing his candidature for the office of Director, be and is hereby appointed as a Director
of the Company, liable to retire by rotation.
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Re-Appointment of Mr. V.D. Wadhwa as the Managing Director of the Company.
To consider, and if thought fit, to pass with or without modification(s), the following resolution as a SPECIAL
RESOLUTION.
“RESOLVED THAT pursuant to the provisions of Section 198,269,309,311 read with Schedule XIII and all other
applicable provisions of the Companies Act, 1956, and subject to the approval of Central Government, if necessary,
and such other approvals as may be required, the consent of the Company be and is hereby accorded for the reappointment of Mr. V D Wadhwa as the Managing Director of the Company for a period of two years with effect
from 29 April, 2012, upon the terms and conditions mentioned in the explanatory statement attached herewith and
as set out in the draft agreement to be executed between the Company and Mr. Wadhwa which is hereby specifically
approved with the liberty to the Board of Directors to alter and vary the terms and conditions of the said reappointment
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and / or Agreement in such manner as may be agreed to between the Board of Directors and Mr. Wadhwa within the
parameter as provided in the Explanatory Statement and that the Company also accords its approval for the
action(s) taken / to be taken by Board of Directors in this regard.
Registered Office :
117, Ground Floor,
World Trade Centre,
Babar Road,
New Delhi – 110 001
Dated: 31 May 2012
By Order of the
Board of Directors
Sd/
Shilpa Verma
Company Secretary
NOTES
1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE
INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY. A blank Proxy Form is
enclosed with this notice and if intended to be used, the form duly completed should be deposited at the Registered
Office of the Company not later than 48 hours before the commencement of the Annual General Meeting. Proxies
submitted on behalf of Companies, societies etc. must be supported by appropriate resolution/ authority as applicable.
2. The Members/ Proxies attending the meeting are requested to bring the enclosed Attendance Slip and deliver the same
after filling in their folio number at the entrance of the meeting hall. Admission to the Annual General Meeting venue will
be allowed only on verification of the signature(s) on the Attendance Slip.
3. Duplicate attendance slip shall not be issued at the Annual General Meeting venue. The same shall be issued at the
Registered Office of the Company up to a day preceding the day of the Annual General Meeting.
4. Corporate Members are requested to send a duly certified copy of the Board resolution/ Power of Attorney authorizing
their representative to attend and vote at the Annual General Meeting.
5. In case of joint holders attending the meeting, only such joint holders who are higher in the order of names will be
entitled to vote.
6. As a measure of economy, copies of the Annual Report will not be distributed at the venue of the Annual General
Meeting. The Members are, therefore requested to bring their copies of the Annual Report to the meeting. Those
members who have not received copies of Annual Report can collect their copies from the Corporate/ Registered Office
of the Company.
7. The Register of Members and Share Transfer Books of the Company will remain closed from Thursday, 28 June 2012 to
Friday, 29 June 2012, both days inclusive.
8. The Explanatory Statement pursuant to Section 173 of the Companies Act, 1956, in respect of the business under Item
No. 5 to 7 is annexed hereto. Relevant details, in terms of Clause 49 of the Listing Agreement, in respect of Director
retiring by rotation and proposed to be re-appointed and other Directors proposed to be appointed are disclosed in the
Corporate Governance Report.
9. The dividend declared by Board of Directors on 1,57,00,000 Cumulative Redeemable Non-Convertible Preference Shares
issued on 27 March 2004 and 2,29,00,000 issued on 21 March 2006 and also 25,00,000 Non-cumulative Redeemable
Preference shares issued on 25 March 2003 in favour of Timex Group Luxury Watches BV (formerly known as Timex
Watches BV) will be paid/ distributed within the statutory period of 30 days after declaration by Members in this Annual
General Meeting.
10. The members are requested to inform changes, if any, in their Registered Address along with Pin Code Number to the
Company at the following Address:
TIMEX GROUP INDIA LIMITED
(Investors Relation Department)
117, Ground Floor, World Trade Centre
Babar Road, New Delhi – 110 001
11. The Register of Directors’ shareholding maintained under section 307 of the Companies Act, 1956, will be available for
inspection by the members at the Annual General Meeting.
12. The Members desirous of seeking any information on the Accounts are requested to write to the Company at least a
week before the meeting to enable the management to keep the information ready.
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13. All documents referred to in the accompanying notice and the Explanatory Statement are available for inspection at the
Registered Office of the Company during working hours between 10.00 A.M. to 1.00 P.M. except holidays up to the date
of Annual General Meeting.
14. The Non Resident members are advised to provide their correspondence address in India and to give mandate for
remittance of dividend directly to their bank account(s) in future.
15. Important Communication to Members
The Ministry of Corporate Affairs has taken a “Green Initiative in the Corporate Governance” by allowing paperless
compliances by the Companies and has issued circulars stating that service of notices/ documents including Annual
Report can be sent by e-mail to its members. To support this green initiative of the Government in full measure, members
who have not registered their e-mail addresses, so far, are requested to register their e-mail addresses, in respect of
electronic holdings with the Depository through their concerned Depository Participants. Members who hold shares in
physical form are requested to fill the appropriate column in the members business reply form (refer page 55 of the
Annual Report) and register the same with Alankit Assignment Limited. Postage for sending the business reply form
will be borne by the Company.
EXPLANATORY STATEMENT UNDER SECTION 173 (2) OF THE COMPANIES ACT, 1956
Item No 5
In terms of the provisions of Section 260 and other relevant provisions of the Companies Act, 1956 and Article 103(a) of the
Articles of Association of the Company, Mr. Bijou Kurien was appointed as an Additional Director of the Company by the
Board of Directors at their meeting held on 29 July 2011. Mr. Kurien holds office up to the date of this Annual General
Meeting.
The Company has received a notice from a member signifying his intention to propose the appointment of Mr. Kurien as a
Director of the Company along with a deposit of Rs.500/-(Rupees Five Hundred only) which shall be refunded to the member,
if Mr. Kurien is elected as a Director.
Mr. Bijou Kurien has 30 years of experience in the Consumer Products Industry. He is currently President & CE of Reliance
Retail Limited. Prior to this he has worked with Titan Industries and Hindustan Unilever Limited. He has also held the
position of Chairman of the India Retail Forum, Member of CII National Retail Committee and Member of Advisory Board of
the World Retail Congress. He is a science graduate and also did PG Diploma in Business Management from XLRI, Jamshedpur.
The Directors commend the Resolution for acceptance by the Members.
None of the Directors, other than Mr. Kurien himself, are deemed to be concerned or interested in this resolution, as it relates
to his appointment.
Item No 6
In terms of the provisions of Section 260 and other relevant provisions of the Companies Act, 1956 and Article 103(a) of the
Articles of Association of the Company, Mr. Arthur Joseph Morissette was appointed as an Additional Director of the
Company by the Board of Directors at their meeting held on 27 January 2012. Mr. Morissette holds office up to the date of
this Annual General Meeting.
The Company has received a notice from a member signifying his intention to propose the appointment of Mr. Morissette as
a Director of the Company along with a deposit of Rs.500/-(Rupees Five Hundred only) which shall be refunded to the
member, if Mr. Morissette is elected as a Director.
Mr. Arthur Joseph Morissette is a seasoned financial executive with more than 30 years of hands-on senior management
experience most recently as Chief Financial Officer of Timex Group USA Inc. He is experienced in cash flow forecasting,
managing internal costing systems, internal and external financial reporting, implementing cost reduction initiatives, and
rationalization of headcount and plant facilities. Mr. Morissette has also handled business acquisitions with responsibility
for integrating all accounting and financial operations.
The Directors commend the Resolution for acceptance by the Members.
None of the Directors, other than Mr. Morissette himself, are deemed to be concerned or interested in this resolution, as it
relates to his appointment
Item No 7
Mr. V D Wadhwa was appointed as Managing Director of the Company w.e.f. 29 April 2010 for a period of two years up to 28
April 2012.
In view of his vast experience and valuable contribution towards the growth of the Company, the Board of Director of the
Company, on the recommendation of the Remuneration Committee approved the re-appointment of Mr. V D Wadhwa as a
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Managing Director of the Company for a further period of two years commencing from 29 April, 2012 on the terms and
conditions set out in the Agreement between the Company and Mr. V D Wadhwa. Such re-appointment is subject to the
approval of members of the Company and Central Government, if necessary.
The Agreement between the Company and Mr. Wadhwa contains the following main terms and conditions;
(A) Period of Appointment : Two years with effect from 29 April 2012
(B) Terms of Appointment:
1. As Managing Director of the Company, Mr. Wadhwa shall exercise such powers to manage the day to day affairs
of the Company as may be delegated to him by the Board of Directors from time to time. Mr. Wadhwa will serve
diligently and faithfully and will comply with all applicable laws and regulations and with all business policies and
standards of the Company in his performance of services under this Agreement. Mr. Wadhwa will perform such
services personally at such reasonable times and places as the Company may direct in connection with the
business.
2. During the term of this Agreement, Mr. Wadhwa will not engage in or accept any other assignment or employment
except the responsibilities entrusted upon him as Director of Timex Group Precision Engineering Limited.
Mr. Wadhwa shall devote sufficient time and attention to and exert his best efforts in the performance of his duties
hereunder, so as to promote the business of the Company.
3. Mr. Wadhwa shall perform his obligations subject to the supervision, control and direction of the Board of
Directors and to regularly report to the Board of Directors on the activities of the Company in respect of the
matters delegated to him by the Board.
(C ) Terms of Remuneration
1. The following terms of remuneration shall be applicable to Mr. Wadhwa, effective 29 April 2012
2.
The Board of Directors of the Company is empowered to fix the remuneration payable to Mr. Wadhwa in the slab
of Rs. 1,00,00,000 to Rs. 2,00,00,000 per annum, with the base salary in the scale of Rs. 40,00,000 to Rs. 75,00,000 per
annum, subject, however to deduction of all applicable taxes and / or levies etc.
3.
Remuneration payable to Mr. Wadhwa, shall be fixed by the Board of Directors of the Company in accordance with
the approval given by the shareholders of the Company which shall constitute the minimum remuneration payable
to him irrespective of the fact that the Company has inadequate profits/ or has losses. Further, Mr. Wadhwa shall
be eligible for compensation for loss of office for the purposes of Section 318 of the Act.
4.
Mr. Wadhwa’s performance shall be reviewed by the Board annually and his remuneration shall be revised within
the overall range as mentioned above.
5. Mr. Wadhwa shall also be entitled to all other employee benefits with respect to Provident Fund, Superannuation
Fund, Gratuity, leave rules, Club Membership etc. as per Company’s policy. In addition, he shall be entitled to
reimbursement of all business related expenses incurred by him on actual basis as per Company’s policy, practice
and procedure as is in effect from time to time, as an employee in continuation of his employment with the
Company.
6. The draft of agreement between the Company and Mr. Wadhwa is available for inspection at the Registered Office
of the Company between 11.00 A.M. and 1.00 P.M. on any working day of the Company.
The Statement pursuant to Schedule –XIII of the Companies Act, 1956 for the appointment of Mr. V D Wadhwa as
Managing Director is attached in the Notice.
This Explanatory Statement together with the accompanying Notice may also be regarded as an abstract under
Section 302 of the Companies Act, 1956.
The Board recommends the Special Resolution set fourth at Item No. 7 of the Notice for approval of the members.
None of the Directors, other than Mr. Wadhwa himself, are deemed to be concerned or interested in this resolution,
as it relates to his appointment.
Registered Office :
By Order of the
117, Ground Floor,
Board of Directors
World Trade Centre,
Sd/
Babar Road,
Shilpa Verma
New Delhi – 110 001
Company Secretary
Dated: 31 May 2012
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1.
2.
3.
4.
5.
6.
GENERAL INFORMATION
Nature of Industry: Manufacturing of Wrist Watches
Date or expected date of Commencement of Commercial Production: The Company commenced its business from 4
October 1988.
In case of new companies, expected date of commencement of activities as per project approved by financial institutions
appearing in the prospectus:
Not Applicable
Financial Performance of the Company based on given indicators
The Financial Performance of the Company for the year 2010 – 2011 & 2011-12 are as follows:
Particulars
F.Y. 2010-11
F.Y.2011-12
Amount
Amount
(Rs. in lakhs)
(Rs. in lakhs)
Sales and other Income
17,391
18,391
Less:- Total Expenditure
15,633
17,786
Profit (Loss) Before Tax
1,758
605
Profit(Loss) After Tax
1,401
453
Export Performance and Net Foreign Exchange Collaborations: Earnings in foreign currency
(Rs. In Lakh)
Particulars
Year ended
Year ended
31 March 2012
31 March 2011
Exports on F.O.B basis
564
527
Service income
177
261
741
788
Foreign Investment or Collaborators, if any:Out of Rs.10,09,50,000/-(10,09,50,000 Equity shares of Re. 1/- each) Paid up capital, Rs.7,56,45,100/-(7,56,45,100 Equity
Shares of Re. 1/- each) is held by Timex Group Luxury Watches B.V.
II. Information about Mr. V. D. Wadhwa, :
1. Background details
Mr. V D Wadhwa is an alumnus of Harvard Business School & a fellow member of the Institute of Company
Secretaries of India. Mr. Wadhwa has over 25 years of working experience in various industries/business. He has
been associated with the Company since the year 1992 in various capacities and largely credited with the reestablishment of the entire distribution and retail base after the Company ceased to be the Timex JV with Tata’s.
Subsequently he played a major role in the profitable turnaround of the Company’s operations through business
and financial restructuring
2. Past Remuneration:
Organization
Designation
Duration
Total cost to the Company (In Rs.)
Timex Group India Limited Managing Director W.e.f. 29 April, 2010
1,07,74,525/-per annum
for a period of two years
3. Recognition or awards:
Mr. Wadhwa has been awarded with two of the Most Prestigious Awards-”Movers of Time Award” and “The
Man of the Year Award” by the Trade Post Journal of India at the opening ceremony of India International Watch
Clock Fair ‘Samay Bharati 2012’
4. Job Profile & his Suitability:
As Managing Director of the company, Mr. V.D. Wadhwa is responsible for the overall performance of the
company.
Since his joining, Mr. Wadhwa has very ably handled many challenges and helps stabilize the company’s growth
& the team. Because of his advice and interventions, the Company was able to solve all the challenges of company’s
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5.
6.
7.
III.
•
•
•
IV.
working. He put in rigorous systems & processes in place to regularly review performance of the company,
generate timely MIS, fulfil all compliance & related obligations, etc. He set up internal controls & processes and
delegated responsibilities effectively to his teams.
In addition, his advice and counsel was found to be very valuable by the management of Timex Group India Ltd in
various organizational matters ranging from managing & improving profitability to investment decisions to employee
development & assessment of their performance.
Keeping in view of his contribution to the Company since his appointment, the Board considers his re-appointment
to be in the best interests of the Company. The Board is confident that Mr. V.D. Wadhwa’s management capabilities
will enable the Company progress further.
Remuneration Proposed:
As set out in the above Notice.
Comparative remuneration profile with respect to industry, size of the Company, profile of the position and person
(in case of expatriates the Relevant details would be w.r.t. the country of his origin):
The Company conducts the annual compensation bench marking exercise for determining the industry norms and
finalizes the remuneration basis the same. The Company takes a conservation approach while finalization of
remuneration.
Taking into account Mr. V.D. Wadhwa invaluable contribution to the Company, his role in placing the Company in
eminent position in the Industry, his strategic role in turning around the Company from its difficult position, the
remuneration paid to the appointee was found to be reasonable and in parlance with the remuneration levels in the
Industry, across the country and befits his position.
Pecuniary relationship, directly or indirectly, with the Company or relationship with the managerial personnel,
if any:
Mr. V.D. Wadhwa has no pecuniary relationship with the company, except to the extent of the remuneration as
proposed to be paid to him.
Further he has no relationship with any of the managerial personnel of the company
Other Information
Reasons of loss or inadequate profits:
The Company has been operating successfully and earning profits since past few years. Since the Company is in
the growth mode, it has been ploughing back the profits and making investments in the marketing front. Spends
have gone up on Brand building and expansion of retail front for betterment of long term profitability.
In the year 2010-2011, the Company delivered its highest ever volume, revenue and profitability performance with
sales revenue up by 25% at Rs. 174 crores and profit after tax grew by 203% at Rs. 14 crores.
In the year 2011-12, the economy witnessed a sharp depreciation of Indian Rupee during the year, which in turn has
significantly impacted the operating margins for the business. However, the Company grew marginally over the last
year on overall business but our trade channel, which is a better barometer for business equity witnessed approx
20% growth over the last year.
Steps taken or proposed to be taken for improvement:
Going forward the Company has set clear goals and objectives to ensure the sales and profit evolution is in line
with the Company’s strategic plan. The Company intends to continue making investments on marketing and brand
building to improve the future profitability.
Expected Increase in productivity and profits in measurable terms:
The performance of the Company is expected to improve in the year ahead in terms of higher turnover, better
productivity and profitability as a result of above measures taken for improvement in performance.
Disclosures
The Remuneration package of the managerial personnel has been provided in the Notice and the Company shall
make appropriate disclosures as required under Schedule XIII of the Companies Act, 1956 in the Corporate Governance
Report forming part of the Directors’ Report of the Company every year.
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DIRECTORS’ REPORT
To the Members of Timex Group India Limited
Your Directors are pleased to present the Twenty-fourth Annual Report and Audited Statement of Accounts for the year
ended 31 March 2012.
FINANCIAL RESULTS
2011-12
18,391
17,786
911
109
197
605
152
453
Income
Expenditure
EBIDTA
Interest
Depreciation
Profit before tax (PBT)
Provision for Taxes
Profit after Tax
Rs. in Lakhs
2010- 11
17,391
15,633
1,927
0.47
169
1,758
357
1,401
The year under review had been a tough year due to slowdown of the economic growth. The GDP growth projection of 9%
fell short of expectations and the year closed with GDP growth of under 7%. This coupled with high inflation and borrowing
costs adversely impacted the consumer demand in most categories and your Company was no exception.
In addition, the economy witnessed a sharp depreciation of Indian Rupee during the year, which in turn had significantly
impacted the operating margins for the business. Your Company had taken aggressive price increases across brands to
minimize the impact of adverse exchange rate; however the full benefit of these price changes will only be seen in the next
year. The rupee continues to be weak and necessary steps are being taken to mitigate the future risk in this regard.
Regardless of these challenges, the focus of the Company had been to deliver results and continue to invest in the long term
growth drivers for the business. The year 2011-12 saw the Company growing marginally over the last year on overall business
but our trade channel, which is a better barometer for business equity witnessed approx 20% growth over the last year.
The year 2012-2013 shall continue to be a challenging year. However, we have no doubt that the fundamentals of the Indian
economy shall continue to be strong over the longer term. Going forward the Company has set itself clear goals and
objectives to ensure the sales and profit evolution is in line with the Company’s strategic plan.
In the last year, your Company had initiated synchronized action on multiple fronts – people leadership, brand presence and
innovations in terms of products. Some of the key initiatives taken were as under:
• Improved Brand salience by building a stronger consumer connects through a multimedia Communication program.
• Key positions in the Company were filled in to help address some of the competency gaps.
• Revamped the product portfolio and introduced new styles with improved aesthetics and at the same time generated a
higher gross unit margin for the business. This will serve us well in future
• Launched iconic Timex products such as Intelligent Quartz – the world’s smartest analog watch & Heart Rate Monitor.
• Partnered with 3 Gold Label Marathons (SCMM-Mumbai, ADHM-Delhi & TCS Bangalore 10K) as “Official Timekeeper”.
• Visual Merchandising development: Introduced new VM concepts and techniques to amplify brand visibility across verticals.
• Expanded retail chain and launched 100th “Time Factory” store.
• Started E-Commerce and Face book fan page for our youth brand – HELIX
MANAGEMENT DISCUSSION AND ANALYSIS
THE INDIAN WATCH MARKET
The present size of the Indian time industry is currently estimated at INR 4,600 crore. The industry has witnessed a growth
of 8-10 percent in the past few years. The watch industry has a promising future as it is expected to grow at 12-15 percent in
the next few years. A large part of this growth is expected from youth, women and luxury segment of the consumers. While
the unit growth is driven by low price unbranded products, the growth at the mid and higher price points is driven by
creating higher value through improved styling and technology. The growth in the market has been led by marketing
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investments made by several Indian and global brands (including the launch of several new brands) which are increasing
their focus on the Indian market. It is estimated that the watch penetration in India is 27 per cent only with just 3.5 per cent of
the Indian population owning multiple watches.
The economy and mass segments form close to 80 per cent of the market by volume and contribute only 40 per cent of the
market by value. Whereas affordable luxury and luxury segments are estimated to contribute around 20 per cent of the market
by value and have a small volume of around one lakh pieces. Around 60 per cent of the market by value is controlled by
organized players. The gender segmentation shows a bent towards men with 60 per cent of the market catering to them.
The growth factors are changing consumer dynamics, increase in disposable income, growth of organized retail and entry of
international brands. The emerging trends show youth and women consumers as the primary growth segments in the watch
industry. Additionally on account of increasing maturity of the Indian consumer and on account of the concerted effort of the
organized sector branded Time wear has been growing rapidly at the expense of the unorganized sector.
Currently, the major challenges faced by the industry are stringent government regulations, slower than anticipated change
in the consumer behavior in terms of channels where they shop being quite undercapitalized, and a large unorganized market.
OUTLOOK/ OPPORTUNITIES AND CHALLENGES
The economic growth of India and the changing life style of the Indian consumers who are aspiring to a more international
way of life on account of the growing awareness of the global fashion trends bode well for the growth of the watch industry.
Your company is well positioned to take advantage of this.
The factors like growing economy in the long term, increasing consumerism, favorable demographics, 300 million strong
middle class and more than a million high net worth individuals, hold a lot of promise for the Time wear industry in near future.
The new rule which allows 100% foreign direct investment in single brand retail trading will further open up the Indian market
for foreign investments and accelerate retail market growth.
The new age watch buyer is a young, aspiring individual with a high disposable income. The consumer does not see the
watch merely as an instrument for keeping time; a watch is now considered a fashion accessory and the brand name a fashion
& style statement, and a reflection of his or her personality. This has created a trend of multiple watch ownership “A different
watch for different occasions.” This encouraging development for the industry could propel industry growth significantly in
future years and Timex Group India Limited (TGIL) with its wide array of brands and styles, ranging from Fashion to Classics
and Sports to Jewellery can take full advantage of this.
The Company has a unique advantage of having several international brands and domestic manufacturing capabilities. This
allows international products to be sold in India at prices which offer tremendous “Value for Money” to the consumer. The
company also boasts of a portfolio of seven brands and the presence of its own franchised retail chain, “The Time Factory”,
comprising of 100 stores. This allows TGIL to participate at all ends of the value chain which in turn enhances margins. By
doing so, the company is also better positioned to control its own destiny more effectively and this provides a sustainable
growth platform for the business in the years ahead.
In addition, your Company continues to leverage the skills reposed at the Timex Group Global Design Centre located in Milan
and also Global Supply Chain organization to support the business in India which has resulted in improved technology and
styling of the products.
TGIL has been recognized by the industry for its commitment to the Indian Time wear Industry. It has been selected twice in
a row in the last 2 years in the Brand Equity’s most trusted brands list in the consumer durables segment.
RISKS/ THREATS
The slowing down of the economy, high inflation, high borrowing costs and depreciation of Indian rupee and their resultant
impact on the consumer sentiments are major risk for the future consumer demand for the products across all categories.
Indian Time wear industry is not devoid of bottlenecks and there are key challenges owing to the government policies and
regulations. Economic growth slowdown coupled with rising inflation continues to be great challenge. High duties and
complex & varied taxation structure are proving to be key impediments to its growth. The latest revision of Excise Duty from
10% to 12% is a new challenge. Taxes such as VAT, Octroi fall under the jurisdiction of the state government and many of these
states have imposed a different rate of tax. The current import duty structure is also impacting the operations and profitability
of both Indian and international watch companies, posing as hindrances to the growth of the Indian Time wear industry.
The increase in the commodities prices, increased cost of sourcing from China and limited vendor capacity for the critical
watch parts in India are resulting in the increase in the sourcing costs of key components. The rising input costs shall have
an adverse impact on the operating margins, unless mitigated through various measures to cut costs (without compromising
quality). Several initiatives are being developed to address this risk.
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Organized retail in India is still in the nascent stage and watches need a very high service led customer interface to close the
transaction with the customer. High rentals and unavailability of skilled sales staff is a big challenge that the industry is
facing. Unorganized sector also poses a big challenge to the organized watch retailers. Counterfeiting is a major issue that
brands in the mass market and economy watch segment face in the country. Watches as an instrument for time keeping device
is facing threat from increasing penetration and use of mobile phones.
INDIA AS A MANUFACTURING HUB: STRENGTHS & OPPORTUNITIES
India is one of the few countries that have watch manufacturing capabilities. Competitive Prices and Quality of products, increased
entry of new brands and rising cost of sourcing from China, accounts for increased opportunities for making India the manufacturing
base of time-keeping devices. Allotting SEZ’s, promoting skill development amongst labor and infrastructural development could
be a boon as it would also mean availability of raw materials such as stainless steel, metals at a relatively lower prices.
External Factors
Although labor wage in China is increasing, the component of wage in total cost of a watch being less, shifting of manufacturing
from China to India will take time. India imports most of the raw material used in watch component manufacturing such as
stainless steel, leather and synthetics.
Internal Factors
The capacity of the existing manufacturers is not enough even to cater to the requirement of existing watch companies. It will
require huge investments to ramp up capacities to cater to global demand. Achieving the required quality standards with the
current set up is a great challenge for the current manufacturers
At Timex, a concentrated global sourcing initiative is in place with the world looking to develop a sustainable vendor base in
India. Higher lead time is required to cater to global needs from a single location. There is a need to diversify production risk
amongst different locations.
GOVERNMENT POLICY
Your Company has been actively involved with the “All India Federation of Horological Industries” (AIFHI), an apex body
of Horological Industry in India. Your Company together with AIFHI has been taking up issues concerning the Watch
Industry and your Company in particular, with the various government agencies. With the active participation by majority of
brands in the Category, AIFHI has released a white paper on the industry, highlighting the key issues for which a change in
Government Policy is recommended and taken up with the respective authorities for the overall growth of the industry. We
shall continue our efforts to represent the interests of the Industry and your own Organisation.
FINANCE
The Company does not hold any fixed deposits from the public, shareholders & employees. There were no overdue /
unclaimed deposits as on 31 March 2012.
During the year under review, the Company made payment aggregating to Rs. 41.96 Crore by way of Central, State and local
sales taxes and duties as against Rs. 32.58 Crore in the previous year.
Your Company is paying dividend on its Preference Shares at the agreed coupon rate.
SEGMENT WISE REPORTING
The segment wise information for watches and other activities are provided in the Notes to the Accounts.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has endeavoured to continuously improve the internal controls both relating to financial reporting and operations.
Your Company has well established procedures for internal control, which are commensurate with its size and operations.
The internal control mechanism comprises of a well-defined organization, who undertake time bound audits and report their
findings to the Audit Committee, documented policy guidelines, predetermined authority levels and processes.
The systems and operations are regularly reviewed by the Audit Committee to ensure and review their effectiveness and
implementation. The Statutory Auditors of the Company also attend these meetings and convey their views on the adequacy
of internal control systems as well as financial disclosures. The Audit Committee also issues directives for enhancement in
scope and coverage of specific areas, wherever felt necessary.
HUMAN RESOURCES
“Human Resources” continues to be a major thrust area in your Company, which is highly critical for business expansion and
growth. Your Company provide a challenging work environment that encourages meritocracy at all levels and has believed in
an environment that fosters accomplishment, ownership, creativity and mutual respect. Over the last few years, your company
10
has sharpened its bell curve to improve the differentiation between high and low performers and inculcated a performance
driven culture which will help drive more profitable growth.
Your Company comprises a small team of professionals, who are result oriented, committed and loyal. As on 31 March 2012,
your Company had 312 employees on the Company rolls.
Attracting and retaining the bright talent and improvement in the quality of manpower at retail stores are identified as key
challenges and being addressed accordingly through various training initiatives and retention tools.
The information required as prescribed under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars
of Employees) Rules, 1975 is annexed herewith forming part of this report. However, as per provisions of Section 219 (1) (b)
(iv) of the Companies Act, 1956, only the report and accounts are being sent to all the shareholders excluding the statement
of particulars of employees under Section 217 (2A) of the Act. Any shareholder interested in obtaining a copy of the said
statement may write to the Company Secretary at the Registered Office address of the Company.
CAUTIONARY STATEMENT
Statements in the Management Discussion and Analysis, outlining the Company’s objective, expectations or predictions may be
‘forward looking statements’ within the meaning of applicable laws and regulations. Actual results could differ materially from those
expressed or implied in the statements. The important factors that could influence the Company’s operations include demand and
supply conditions affecting sale price of finished goods, input availability and prices, changes in government regulation, tax laws,
economic developments within the country and abroad and such other factors such as litigation and industrial relation etc.
DEMATERIALISATION
Since year 2000, the equity shares of your Company are being compulsorily traded in dematerialization form. As on date,
30988 number of shareholders representing 96.97% of the Equity Share are holding shares in the dematerialized form.
DIRECTORS
In accordance with Section 255 and 256 of the Companies Act, 1956 and Articles of Association of the Company, Ms. Gagan
Singh retires by rotation as a Director of the Company and being eligible offer herself for re-appointment.
Mr. V. D. Wadhwa was appointed as the Managing Director of the Company with effect from 29 April 2010 for a period of two
years up to 28 April 2012. The Board of Directors on the recommendation of the Remuneration Committee approved reapointment of Mr. V.D. Wadhwa as the Managing Director of the Company for a further period of two years commencing from
29 April 2012 subject to the approval of shareholders and such other approval as may be required.
Mr. Bijou Kurien was appointed Additional Director during the year to hold office up the date of forthcoming shareholders
meeting. Your Company has received a notice from shareholder seeking his appointment as a Director of your Company
pursuant to section 257 of the Companies Act, 1956.
Mr. Arthur Joseph Morissette was appointed Additional Director during the year to hold office up the date of forthcoming
shareholders meeting. Your Company has received a notice from shareholder seeking his appointment as a Director of your
Company pursuant to section 257 of the Companies Act, 1956.
Mr. Frank Sherer, Director of the Company resigned on 27 January 2012. The Board wishes to place on record their appreciation
for the valuable guidance provided by Mr. Sherer during his Directorship
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, your Directors confirm as under:
(i) That in preparation of the Balance Sheet and the Profit & Loss Account of the Company, the applicable accounting
standards has been followed along with proper explanation relating to material departures.
(ii) The Directors had selected such accounting policies and applied them consistently and made judgments and estimates
that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the profit of the Company for that period.
(iii) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance
with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities.
(iv) That the Directors have prepared the Annual Accounts on a going concern basis.
CORPORATE GOVERNANCE
As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Corporate Governance together with
a certificate from the practicing Company Secretary confirming compliance is set out in the Annexure forming part of this report.
11
CONSERVATION OF ENERGY
Information required as per Section 217 (1) (e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988, regarding conservation of energy, technology absorption and foreign
exchange earnings and outgo is given in the Annexure forming part of this report.
AUDITORS
The auditors, M/s BSR & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed
their eligibility and willingness to accept office, if re-appointed.
AUDITORS’ REPORT
Your Board has duly examined the Report issued by the Statutory Auditor’s of the Company on the Accounts for the
financial year ended 31 March 2012 and their comment about the managerial remuneration. The Company’s application for
approval of the excess remuneration paid to the Managing Director of the Company is pending before the Central Government.
ACKNOWLEDGEMENTS
Your Directors wish to place on record their appreciation for the support and cooperation, which the Company continues to
receive from its customers, the watch trade, the New Okhla Industrial Development Authority, the Governments of Uttar
Pradesh and Himachal Pradesh, and finally the Members of the Company and its employees.
For and on behalf of the Board of Directors
Sd/Kapil Kapoor
Chairman
Noida
31 May 2012
ANNEXURE TO THE DIRECTOR’S REPORT
(Additional Information given in terms of notification no.1029 of 31 December, 1988 issued by the Department of Company Affairs)
PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY
POWER AND FUEL CONSUMPTION
Particulars
2011-12
2010-11
UPSEB/ HPSEB Power purchase (units)
Total Amount (in Rs.)
Rate per unit (in Rs.)
Own generation (units)
Cost per unit (in Rs.)
Units per litre of diesel
664224
3587468
5.40
67139
10.12
3.91
650084
3289479
5.06
81902
9.95
3.62
TECHNOLOGY ABSORPTION
Research and Development (R&D)
Areas in which R&D carried out by the Company
Development 1)
Conversion of Movements VX3N/ VX3P/ VX3S from open-type toolings to line toolings.
2)
Automation of threaded case back closing tool
3)
New fixture development for temporary crown and stem removal from fit-up, standardized as per movements.
Future plan of action
1)
Automation of E-testers for 930/ 905/ 916 movements
2)
Installation of timer and auto pressure release circuit on Aquavac
3)
Installation of conveyor system for empty watch head carrier.
Technology Absorption, Adoption and Innovation Benefits
Upgraded process automations will help improve productivity and quality and reduce assembly costs.
Foreign Exchange Earned
The Company has earned Rs. 7.42 Crores in Foreign exchange and used Rs. 55.15 Crores.
12
REPORT ON CORPORATE GOVERNANCE
Your Company appreciates the need of upholding highest standard of Corporate Governance in its Operation. It has always
been an endeavor of the Company to adopt & implement best Practices of Corporate Governance, disclosure standards and
enhancing shareholder value while protecting the interests of other stakeholders, clients, suppliers and its employees.
As mandatory under Clause 49 of the Listing Agreement, the Company has complied with the conditions of Corporate
Governance by establishment of a framework for compliance with SEBI Regulations.
A. MANADATORY REQUIREMENTS
CORPORATE GOVERNANCE PHILOSOPHY
Corporate Governance assumes a significant role in the business life of Timex. The driving forces of Corporate Governance
at Timex are its vision and core values, as described hereunder:
VISION
The Timex Group vision is anchored in our rigorous focus on long lasting relationships with our customers and our
commitment to build the power of our brands, underpinned by our peoples will to win.
By transforming ourselves into a truly Global Company and intent on globalizing the mindset of our people, we are
building one of the most powerful portfolios of brands in the watch and jewelry industry.
Our vision for the future goes way beyond timekeeping. We will delight and surprise our customers through innovation
in design, technology and application of our brands and deliver a superior customer experience. This will lead to
enhanced values for our shareholders and increase returns on investments and assets.
Deeply committed to our Corporate Social Responsibility and our values, we will build pride in our people and win the
best future talent for our Group.
VALUES
•
•
•
•
•
•
•
•
•
The customer is our most important asset,
Corporate Social Responsibility is our foundation,
Truth, transparency and respect for our differences are our pillars of strength,
We work together to achieve Group goals,
Our core values encompass integrity, responsibility and courage,
We reward performance and results and we value a culture of discipline,
We are fair and listen to our people and we expect them to always look for a better way,
We protect our assets,
We want to win.
BOARD OF DIRECTORS
(a) Composition of the Board
The Board of Directors of the Company consists of seven Directors. The Directors are well qualified professionals in
business, finance and corporate management and the Company is in compliance with the Clause 49 of the Listing
Agreement as regards composition of the Board. The number of Independent Directors is more than one half of the total
strength of the Board. The composition and the category of Directors on the Board of the Company as on 31 March 2012
was as under:
Names of the Directors
Category
Mr. Kapil Kapoor
Chairman and Non-Executive – Director
Mr. V.D. Wadhwa
Managing Director
Mr. Arthur Joseph Morissette*
Mr. Daya Dhaon
Non- Executive- Independent Director
Ms. Gagan Singh
Mr. Pradeep Mukerjee
Mr. Bijou Kurien
*Mr. Ryan Todd Roth is an Alternate Director to Mr. Arthur Joseph Morissette.
13
(b) Appointment/ Re-appointment of Director(s)
In terms of the provisions of the Companies Act, 1956 (the “Act”) and the Articles of Association of the Company,
Ms. Gagan Singh retire by rotation as Director of the Company at the ensuing Annual General Meeting and being
eligible, offers herself for re-appointment. Mr. V.D. Wadhwa is proposed to be re-appointed as Managing Director of the
Company with effect from 29 April 2012 for a further period of two years. Further, Mr. Bijou Kurien and Mr. Arthur Joseph
Morissette appointed as Additional Directors of the Company with effect from 29 July 2011 and 27 January 2012
respectively are proposed to be appointed as Directors at the ensuing Annual General Meeting.
The Brief Profile of the above named Directors seeking appointment/ re-appointment is given below:
Ms. Gagan Singh
Ms. Gagan Singh is an Independent Director on the Board of Timex Group India Limited. She has more than 30 years of
experience across several industries. She is currently the Chief Executive Officer - Business of Jones Lange Lasalle India.
Ms. Singh is a Trustee of Salaam Baalak Trust and Founder Member and Vice President of Youth reach. She served as
Managing Director of Benetton India Private Limited until May 2007. In this position, she played a key role in the
transition of Benetton India Private Ltd from a joint venture to a 100% subsidiary of Benetton Group.
Ms. Gagan Singh does not hold any shares in the Company as on date.
Other Directorship/Committee Membership
Directorship in other Companies
Private Limited Companies
1.
Gamma Pizzakraft Pvt Ltd
2.
Gamma Brand Mgmt. Services Pvt Ltd
3.
Jones Lang Lasalle Residential Private Limited
4.
Gama Pizzakraft (Overseas) Pvt Ltd
Foreign Companies
1.
Jones Lang Lasalle Lanka Private Limited
Mr. V. D. Wadhwa
Mr. V. D. Wadhwa is an alumnus of Harvard Business School and a fellow member of the Institute of Company Secretaries
of India. Mr. Wadhwa has over 25 years of working experience in various industries/business. He has been associated
with the Company since its inception in various capacities and largely credited with the re-establishment of the entire
distribution and retail base after the Company ceased to be the Timex JV with Tata’s. Subsequently he played a major role
in the profitable turnaround of the Company’s operations through business and financial restructuring.
Mr. Wadhwa holds 600 shares of Timex Group India Limited
Public Limited Companies
1.
Timex Group Precision Engineering Limited
1. Time Master India Private Limited
2. Jumbo Securities and Finlease Private Limited
Companies registered under Section 25 of the Companies Act, 1956
1. All India Federation of Horological Industries
14
Committee Membership
1. Timex Group Precision Engineering Limited
Member - Audit Committee
Mr. Bijou Kurien
Mr. Bijou Kurien has 30 years of experience in the Consumer Products Industry. He is currently President & CE of
Reliance Retail Limited. Prior to this he has worked with Titan Industries and Hindustan Unilever Limited. He has also
held the position of Chairman of the India Retail Forum, Member of CII National Retail Committee and Member of
Advisory Board of the World Retail Congress. He is a science graduate and also did PG Diploma in Business Management
from XLRI, Jamshedpur.
He holds 3800 shares of Timex Group India Limited.
Public Limited Companies
1. Reliance Gems and Jewels Limited
2. Reliance Leisures Limited
3. Reliance Lifestyle Holdings Limited
4. Reliance-Grand Optical Private Limited
1. Marks and Spencer Reliance India Private Limited
2. Office Depot Reliance Supply Solutions Private Limited
3. Reliance-GrandVision India Supply Private Limited
4. Reliance-Vision Express Private Limited
5. Stella Treads Private Limited
6. Oceanic Rubber Works Private Limited
7. Oriental Tapes Private Limited
Companies registered under Section 25 of the Companies Act, 1956
1. Retailers Association’s Skill Council of India
Mr. Arthur Joseph Morissette
Mr. Arthur Joseph Morissette is a seasoned financial executive with more than 30 years of hands-on senior management
experience most recently as Chief Financial Officer of Timex Group USA Inc. He is experienced in cash flow forecasting,
managing internal costing systems, internal and external financial reporting, implementing cost reduction initiatives, and
rationalization of headcount and plant facilities. Mr. Morissette has also handled business acquisitions with responsibility
for integrating all accounting and financial operations.
Mr. Morissette does not hold any shares in the Company as on date.
Foreign Companies
1. Sequel AG
2. Sequel International, Inc.
3. Timex Group USA, Inc.
4. Vincent Berard S.A.
5. Timex Trustee Corporation
(c) Board Meetings
The Board met five times during financial year 2011-2012 on 14 April 2011, 26 May 2011, 29 July 2011, 31 October 2011 and
27 January 2012 to consider amongst other business matters, the quarterly performance of the Company and financial
results. Directors attending the meeting actively participated in the deliberations at these meetings.
(d) Composition and Category of Directors
The details of the composition and category of Directors as on 31 March 2012 are given in the table below:
15
Name
Category
Designation
No. of
Shares
Held
No of
Meetings
held
during
the last
financial
year
No. of
Meetings
attended
No. of
Directorships
in other
public
Companies
(1)
No. of
Membership/
Chairmanship
of the other
Board
Commitees (2)
Member Chair
ship
manship
Attendance
at last AGM
Mr. Kapil Kapoor
Chairman
2100
5
5
2
1
1
Yes
Mr. V D Wadhwa
Executive Director
Managing
Director
600
5
5
1
1
-
Yes
Mr. Daya Dhaon
Independent Director
Director
-
5
5
-
-
-
Yes
Ms. Gagan Singh
Director
-
5
4
-
-
-
No
Mr.Pradeep Mukerjee
Director
-
5
5
1
-
1
Yes
Mr. Bijou Kurien (3)
Director
3800
5
2
4
-
-
N/A
Mr. Arthur Joseph
Morissette (4)
Director
-
5
1
-
-
-
N/A
Mr. Ryan Todd Roth (5)
Alternate
Director
-
5
-
-
-
-
N/A
Mr. Frank Sherer (6)
Director
-
5
0
-
-
-
No
1.
2.
3.
4.
5.
6.
Does not include directorships / committee position in Companies incorporated outside India, Private Limited Companies
and the Companies registered under Section 25 of the Companies Act, 1956.
Only Audit Committee and Shareholders/ Investors Grievance Committee have been considered for the purpose of
ascertaining no. of membership & Chairmanship of Committee across all the public companies.
Mr. Bijou Kurien was appointed as an Additional Director of the Company with effect from 29 July 2011
Mr. Arthur Joseph Morissette was appointed as an Additional Director of the Company with effect from 27 January,
2012.
Mr. Ryan Todd Roth was appointed as an Alternate Director to Mr Arthur Joseph Morissette with effect from 27 January,
2012
Mr. Frank Sherer had resigned with effect from 27 January, 2012
Code of Conduct
The Company has formulated and adopted a Code of Conduct for its Board of Directors and senior management and has put
the same on the Company’s website www.timexindia.com. The Code has been circulated to all members of the Board and
Senior Management and they have affirmed the compliance of the same. A declaration signed by the Managing Director of
the Company is annexed hereto.
Policy on Prevention of Insider Trading
The Company has formulated a Code of Conduct for Prevention of Insider Trading (Code) in accordance with the guidelines
specified under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992. The Company’s
code, inter alia, prohibits purchase and/or sale of shares of the Company by an insider, while in possession of unpublished
price sensitive information in relation to the Company and also during certain prohibited periods. The Company’s updated
Code is available on the Company’s website.
Audit Committee
The Audit Committee of the Company was constituted in July 1999 in line with the provisions of Clause 49 of the Listing
Agreement with the Bombay Stock Exchange read with Section 292A of the Companies Act, 1956. The Company Secretary of
the Company acts as the Secretary of the Committee.
The Company has adequately qualified and independent Audit Committee. The Committee comprises of six Non-Executive
Directors: Mr. Kapil Kapoor, Mr. Daya Dhaon, Ms. Gagan Singh, Mr. Pradeep Mukerjee, Mr. Bijou Kurien and Mr. Arthur
Joseph Morissette. Four of the six members on the Committee are independent. The Committee is chaired by Ms. Gagan
Singh, who is an Independent Director having vast experience and expertise in the area of finance and accounts.
The charter of role and responsibilities of the Audit Committee includes the following major areas;
16
Reviewing the adequacy of internal control system and the Internal Audit Reports, and their compliance thereof.
Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure that
the financial statements are correct, sufficient, and credible.
Recommending the appointment of external auditors and fixation of their audit fee, and also approval for payment for
any other services.
Reviewing with Management the quarterly and annual financial statements before submission to the Board, focusing
primarily on:
Any changes in accounting policies and practices.
Major accounting entries based on exercise of judgment by management.
Significant adjustments arising out of audit.
Qualifications in draft audit report.
The going concern assumption.
Compliance with accounting standards.
Compliance with stock exchange and legal requirements concerning financial statements.
Any related party transactions i. e. transactions of the Company of material nature, with promoters or the management,
their subsidiaries or relatives etc, which may have potential Conflict with the interests of Company at large.
During the year under review, the Audit Committee met four times on 26 May 2011, 29 July 2011, 31 October, 2011 and 27
January 2012. The details of member’s attendance at the Audit Committee Meetings are as under;
Name of Director
Designation
Total no of Meetings held
in 2011-12
No of meetings
attended
Ms. Gagan Singh
Chairman & Independent Director
4
3
Mr. Frank Sherer*
4
0
Mr. Daya Dhaon
Non-Executive Independent Director
4
4
4
4
Mr. Bijou Kurien**
4
2
Mr. Kapil Kapoor**
4
2
Mr. Arthur Joseph Morissette*** Non-Executive Director
4
0
*
**
***
Mr. Frank Sherer had resigned with effect from 27 January, 2012
Mr. Bijou Kurien and Mr. Kapil Kapoor were appointed members of Audit Committee with effect from 29 July 2011
Mr. Arthur Joseph Morissette was appointed as a Member of Audit Committee with effect from 27 January 2012.
The Chief Financial Officer, Head of Internal Audit function/ Internal Auditor and the Statutory Auditors were invited and
they duly attended the Audit Committee meetings. The Committee held discussions with the management of the Company
and with the Statutory Auditors to review the quarterly, half-yearly and annual audited financial statements and to recommend
its views to the Board of Directors of the Company. The Committee also reviewed the internal control systems and the
effectiveness of Internal Audit function.
REMUNERATION COMMITTEE
The Remuneration Committee was constituted in May 2003, to decide and recommend the remuneration of Directors including
the Managing Director of the Company. The remuneration of all the Senior Management of the Company with direct
reporting to the Managing Director of the Company is also reviewed and recommended by the Remuneration Committee.
The Committee comprises of four Non- Executive Directors, namely Mr. Daya Dhaon, Ms. Gagan Singh, Mr. Pradeep
17
Mukerjee and Mr. Kapil Kapoor. Mr. Daya Dhaon, an Independent Director is the Chairman of the Committee. The Committee
meets periodically as and when required. None of the Directors, except Managing Director draws remuneration from the
Company.
The details of member’s attendance at the Remuneration Committee Meetings are as under;
Name of Director
Designation
Total no. of Meetings held
in 2011-12
No of meetings
attended
Mr. Daya Dhaon
2
2
Mr. Frank Sherer*
2
0
Ms. Gagan Singh
2
2
2
2
Mr. Kapil Kapoor**
2
0
* Mr. Frank Sherer had resigned with effect from 27 January, 2012
** Mr. Kapil Kapoor was appointed as member of Remuneration Committee with effect from 29 July 2011.
SHAREHOL DERS/INVESTORS GRIEVANCE COMMITTEE
A Shareholders / Investors Grievance Committee headed by a Non-Executive Director was formed in January 2002 which was
subsequently merged with the Share Transfer Committee on 31 July 2002 in view of the commonalities of area of work and
was renamed as Share Transfer & Shareholders / Investors Grievance Committee, to approve all matters pertaining to share
transfers, transmissions, issuance of duplicate shares, transposition etc and also to provide the shareholders of the Company
with additional assurance that sufficient information is being provided to enable them to form a reasoned opinion on the
working of the Company and to ensure speedy redressal of their grievances pertaining to share related issues.
Constitution and Composition
The Committee comprises of six Non-Executive Directors namely Mr. Daya Dhaon, Ms. Gagan Singh, Mr. Pradeep Mukerjee,
Mr. Bijou Kurien, Mr. Kapil Kapoor and Mr. Arthur Joseph Morissette. The Chairman of the meeting is elected by majority at
each meeting. The Company Secretary is the Secretary of the Committee and attends its meetings. She/He addresses
shareholders complaints, monitors share transfer process and liaisons with the regulatory authorities, as required.
The details of member’s attendance at the Investor Grievance Committee Meetings are as under;
Name of Director
Designation
Total no of Meetings held
in 2011-12
No of meetings
attended
Mr. Daya Dhaon
4
4
Mr. Frank Sherer*
4
0
Ms. Gagan Singh
4
3
4
4
Mr. Kapil Kapoor**
4
2
Mr. Bijou Kurien **
4
2
4
0
Mr. Arthur Joseph Morissette*** Non-Executive Director
*
**
***
Mr. Frank Sherer has resigned w.e.f. 27 January, 2012
Mr. Bijou Kurien and Mr. Kapil Kapoor were appointed member of Investor Grievance Committee with effect from
29 July 2011
Mr. Arthur Joseph Morissette was appointed as a Member of the Investor Grievance Committee effective 27
January 2012.
18
The Committee was formed specifically to look into the redressal of shareholders & investors grievances pertaining to:
1)
2)
3)
4)
5)
Transfer of shares and its timelines
Transmission of shares
Issuance of duplicate shares
Investors / shareholders grievance(s) pertaining to all type of matters concerning their dealing with the Company with
respect to their investment in the securities of the Company, more specifically pertaining to non-receipt of Annual
Reports, delay in transfers, non redressal of complaints, non receipt of dividend, dematerialization related issues etc.
All other day-to-day matters governing the relationship between the Company and its shareholders.
Designated e-mail address for investor services
In terms of Clause 47 (f) of the Listing Agreement designated email address for investor complaints is
investor.relations@timex.com
DISCLOSURES
(a) Related Party Transactions: The Audit Committee has been reviewing the disclosure of Related Party Transactions
periodically. There is a cross charge of expenses which is established between your Company and Timex Group
Precision Engineering Limited (Group Company) on account of Manpower Cost and Rentals respectively. Beside this
transaction, the Company does not have any related party transactions, which are material in nature that would have a
potential conflict with the interests of the Company at large.
(b) Details of Non-compliance: There have been no cases of penalties, strictures imposed on the Company by Stock
exchange or SEBI or any other statutory authority, on any matter relating to capital markets, during the last three years.
(c) Risk Management: The Company has laid down procedures so as to ensure that the executive management controls
risk through means of a properly defined framework and to inform the Board members about the same and has engaged
the services of a leading Chartered Accountant’s firm to carry out this activity on a regular basis and inform the Board
members about the risk assessment and minimization procedures.
(d) Secretarial Audit : Pursuant to Clause 47( c ) of the Listing Agreement with the Stock Exchanges, certificates on halfyearly basis, have been issued by a Company Secretary-in-Practice for due compliance of share transfer formalities by
the Company. Pursuant to SEBI (Depositories and Participants) Regulations, 1996 certificates have also been received
from a Company Secretary-in-Practice reconciling the total shares held in both the depositories, viz. NSDL and CDSL
and in physical form with the total issued / paid-up capital of the Company and submitted the same to the Stock
Exchanges where the securities of the Company are listed within 30 days of the end of each quarter.
(e) Disclosure of Accounting Treatment: The Company follows Accounting Standards issued by the Institute of Chartered
Accountants of India and in the preparation of financial statements, the Company has not adopted a treatment different
from that prescribed in any Accounting Standard.
(f)
Proceeds from Issue of Preference Shares: The Company has raised funds through issues of preference shares during
financial year 2002 -2003, 2003-2004, and 2005 -2006. The proceeds of the preference share issue have been fully utilized
towards the object for which it was raised.
(g) CEO/CFO Certification : The Managing Director (CEO) and Chief Financial Officer(CFO) have placed before the Board
of Directors a certificate relating to the financial statements, in accordance with clause 49 (V) of the Listing Agreement
for the financial year ended 31 March 2012 which is annexed hereto.
DIRECTORS’ REMUNERATION
Non-Executive Directors including Independent Directors do not have any pecuniary relationship or transactions with the
Company. However, they were paid only the sitting fees for attending the meetings of the Board of Directors or Committees
within the limits as prescribed under the Companies Act, 1956. Further, there were no other pecuniary relationships or
transactions of the Non-Executive Directors vis-à-vis the Company.
19
Remuneration of Executive Director is decided by the Board based on recommendation of Remuneration Committee.
Remuneration paid to the Managing Director for the year ended 31 March 2012 and the disclosure as per the requirement of
Schedule XIII of the Companies Act, 1956, are as follows:
Break up of Annual Remuneration
INR Per Annum
Effective from 29 April,2011
Basic Salary
HRA @ 50% of Basic Salary
Annual Reimbursements towards Car Lease, Fuel & Maintenance,
Leave Travel Allowance and Medical Exp.
Performance Bonus
Contribution to Provident fund as applicable
Gratuity Fund as applicable
Superannuation Fund as applicable
Total
40,87,392
20,43,696
14,94,996
18,48,336
4,90,487
1,96,509
6,13,109
1,07,74,525
MEANS OF COMMUNICATION
Website, where results are displayed
:
Quarterly/Annual Results
:
Newspaper in which results are normally Published
Whether Management Discussion &
Analysis is a part of the Annual Report
The financial results are displayed on
www.timexindia.com
Financial Results are published in the Newspapers as required
under the Listing Agreement.
: The Business Standard, Business Standard, Vernacular
published (Hindi) Newspaper.
:
Yes
All Financial Results and other material information about the Company are promptly sent through fax to the Bombay Stock
Exchange and the same is then either hand delivered or sent by courier to the Stock Exchange.
GENERAL SHAREHOLDERS’ INFORMATION
AGM: Date, time and venue
:
Friday, 3 August 2012 at 10:00 a.m. at Air Force Auditorium,
Subroto Park New Delhi -110010.
Financial Year
:
1 April, 2011 to 31 March, 2012
Directors seeking appointment/re-appointment
:
As required under Clause 49(IV) (G), particulars of Directors
seeking appointment/re-appointment are given in the Report
on Corporate Governance forming part of the Annual Report.
Tentative calendar of events for the financial
year 2012-13 (April – March)
: To review and approve unaudited Financial Results for the quarter
First quarter
- ended July 2012
Second quarter
- ended October 2012
Third quarter
- ended January 2013
Fourth quarter
- ended May 2013
28 June 2012 and 29 June 2012 (both days inclusive)
Book closure Date
:
Listing of shares on Stock Exchanges
:
Registered Office
: 117, Ground Floor, World Trade Centre, Babar Road, New
Delhi-110001.
Bombay Stock Exchange, Phiroze Jeejeebhoy Towers, Dalal
Street, Mumbai – 400001
20
Listing Fees
:
Listing fees as prescribed has been paid to the Stock Exchange
up to 31 March 2012
Share Registrar & Transfer Agents
:
Alankit Assignment Limited 2E/21 Alankit House, Jhandewalan
Extension, New Delhi – 110055 of the Company for both
physical and electronic mode of share transfers.
Contact Person
Fax
Email
:
:
:
:
Website
:
Mr. J K Singla
Phones 011-42541234,
011-23552001
rta@alankit.com
info@alankit.com
www.alankit.com
SHARE TRANSFER SYSTEM
The Company has appointed Alankit Assignment Limited, as Registrar and Shares Transfer Agent. Shares sent for
transfer in physical form are registered by the Registrar and Share Transfer Agents within fifteen days of receipt of the
documents, if found in order. Shares under objection are returned within two weeks. All requests for dematerialization of
shares are processed, if found in order and confirmation is given to the respective depositories i.e. National Securities
Depository Limited (NSDL) and Central Depository Services Limited (CDSL) within twenty-one days.
All the transfers received are processed and approved by the Share Transfer & Shareholders / Investors Grievance
Committee at its meetings. For redressal of transfer related grievances, shareholders may contact Ms. Shilpa Verma Company Secretary at the registered office address of the Company
INVESTOR SERVICES
Number of Complaints received, not solved & shares pending transfer
Complaints outstanding as on 1 April, 2011
Complaints received during the year ended 31 March, 2012
Complaints resolved during the year ended 31 March, 2012
Complaints pending as on 31 March, 2012
0
3
3
0
OTHERS
Name and designation of compliance officer: Ms. Shilpa Verma - Company Secretary.
Venue and Time of the Last Three General Body Meetings
Date
Category
Venue
Time
No. of
Special
Resolutions
Members
present by
Representative of
Body Corporate
Person
Proxy
30.07.2009
AGM
FICCI
Auditorium,
Tansen Marg,
New Delhi
10.00
AM
-
2447
51
1
22.07.2010
AGM
Air Force
Auditorium,
Subroto Park,
New Delhi
10.00
AM
-
2506
1
1
29.07.2011
AGM
Sri Fort
Auditorium
August Kranti
Marg, New Delhi
11.00
AM
-
3140
8
1
21
The resolutions were (including special resolution) passed on show of hands with requisite majority. The venue of the
General Meeting of the Company has been chosen for its location, prominence, and capacity.
Postal Ballots
No Special Resolution was required to be put through a Postal Ballot during last financial year
STOCK PERFORMANCE
Market price data
: The monthly high and low stock quotations during the last financial year at the Bombay Stock
Exchange and performance in comparison to BSE Sensex are given below:
Month
High
Low
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
40.80
39.25
47.75
45.80
45.60
31.15
28.75
28.00
25.95
24.75
29.00
27.85
31.50
33.40
36.60
38.60
27.90
26.50
25.80
21.80
18.00
17.50
22.65
21.75
STOCK CODE
The stock code of the Company at BSE
: 500414
ISIN allotted by National Securities Depository Limited and
Central Depositories Securities Limited for Equity Shares
: INE064A01026
The Company’s shares are covered under the compulsory dematerialization list and are transferable through the depository
system. Shares received for physical transfers are registered within a maximum period of two weeks from the date of receipt,
if the documents are clear in all respects.
As on 31 March 2012, the distribution of Company’s shareholding was as follows: No. of Shares
No. of Share
holders
% of Share
holders
UPTO - 2500
54691
98.11
11492651
11.384
2501 - 5000
525
0.942
2015538
1.997
5001 - 10000
288
0.517
2220424
2.2
10001 - 20000
123
0.221
1844030
1.827
20001 - 30000
50
0.09
1269522
1.258
30001 - 40000
15
0.027
507787
0.503
40001 - 50000
21
0.038
1003306
0.994
50001 - 100000
20
0.036
1401726
1.389
100001 AND ABOVE
13
0.023
79195016
78.45
TOTAL
55746
100.00
100950000
100.00
22
Share Amount
% of Amount
DEMATERIALISATION OF SHARES
Dematerialization of shares: The Company appointed M/s Alankit Assignments Limited as depository registrar and signed
tripartite agreements with NSDL/CDSL to facilitate dematerialization of shares. Shares received for dematerialization are
generally confirmed within a maximum period of two weeks from the date of receipt, if the documents are clear in all respects.
There are 30988 no. of shareholders holding their shares in dematerialized form, which represent 96.97% of the paid up
capital of the Company.
PLANT LOCATION
Timex Group India Limited,
Plot No-10, Baddi, Ind. Area Katha, Near Fire Station Baddi, Nalagarh, Solan, Himachal Pradesh.
Address for correspondence:
Timex Group India Limited, 117, GF, World Trade Centre, Babar Road, New Delhi -110 001
B. NON MANDATORY
REMUNERATION COMMITTEE
The details are given under the heading “Other Sub-Committee of Board of Directors”
CORPORATE POLICY MANUAL
The Timex Group has a Corporate Policy Manual outlining the policies applicable to the Group Companies so that it
promotes ethical and moral behavior in all its business activities. Employees are free to report a violation of any law,
mismanagement, gross waste or misappropriation of funds, a substantial and specific danger to public health and safety, or
an abuse of authority without fear of retribution or even can request advice when in doubt about the propriety of some
action. Employees also may, if they wish, make anonymous reports of violations or other irregularities. Employees may also
call the compliance line, toll free 24 hours a day. The Corporate Policy Manual is available on Timex group website at below
stated link.
http://intranet.timexgroup.com/
The Company also has in place a “Women’s Committee” since 01 October 2003, to take care of cases of sexual harassment
in workplace. This Committee is chaired by a woman running an independent NGO and is assisted by a team of women
employees.
TRAINING OF BOARD MEMBERS: The Company’s Board of Directors consists of professionals with expertise in the
respective fields. They endeavor to keep themselves updated with the global economic changes and various legislations.
They attend various workshops and seminars to keep themselves abreast with the changing business environment.
23
Chief Executive Officer (CEO) and Chief Financial Officer (CFO)
Certification as per Clause 49(V) of the Listing Agreement
The Board of Directors
Timex Group India Limited
New Delhi
This is to certify that;
a)
We have reviewed financial statements and the cash flow statement for the year and that to the best of our knowledge
and belief:
i)
these statements do not contain any materially untrue statement or omit any material fact or contain statements
that might be misleading;
ii)
These statements together present a true and fair view of the Company’s affairs and are in compliance with
existing accounting standards, applicable laws and regulations.
(b)
There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year
which are fraudulent, illegal or violative of the Company’s Code of Conduct.
(c)
We accept responsibility for establishing and maintaining internal controls for financial reporting and we have
evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting and we
have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of internal controls,
if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.
(d)
We have indicated to the auditors and Audit Committee;
i)
significant changes in internal control during the year over financial reporting during the year;
ii)
significant changes in accounting policies during the year and that the same have been disclosed in the notes
to the financial statements; and
iii)
Instances of significant fraud of which we have become aware and the involvement therein, if any, of the
management or an employee having a significant role in Company’s internal control system over financial
reporting.
Sd/V.D.Wadhwa
Managing Director
Sd/Amit Jain
Head Accounts
Dated: 31 May, 2012
DECLARATION BY THE CEO UNDER CLAUSE 49 I (D) OF THE LISTING AGREEMENT REGARDING
ADHERENCE TO THE CODE OF CONDUCT
I hereby confirm that:
The Company has obtained from all the members of the Board and Senior Management, affirmation that they have complied
with the Code of Conduct in respect of the financial year 2011-2012.
Sd/
V.D.Wadhwa
Managing Director
24
CERTIFICATE
To the Members of Timex Group India Limited
We have examined the compliances of the conditions of Corporate Governance by Timex Group of India Limited, for the
financial year ended on 31 March 2012 as stipulated in Clause 49 of the Listing Agreement of the said Company entered with
Bombay Stock Exchange Limited
The Compliances of the conditions of Corporate Governance is the responsibility of the management. Our examination was
limited to procedure and implementation thereof, adopted by the Company for insuring the compliances of the conditions of
Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us and the representation made
by the Directors and the management, we certify that the Company has complied with the conditions of Corporate Governance
as stipulated in the above mentioned Listing Agreement.
We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or
effectiveness with which the management has conducted the affairs of the Company.
For K. K. MALHOTRA & CO.
Company Secretaries
Sd/K.K. MALHOTRA
C. P. No. : 446
31 May 2012
New Delhi
25
Auditors’ Report
To the Members of
1. We have audited the attached Balance Sheet of Timex Group India Limited (‘the Company’) as at 31 March 2012, the
Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, annexed thereto. These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003 (‘the Order’), issued by the Central Government of India
in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we report that:
(a) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary
for the purposes of our audit;
(b) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from
our examination of those books;
(c) the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in
agreement with the books of account;
(d) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this
report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act,
1956, to the extent applicable;
(e) on the basis of written representations received from the directors as on 31 March 2012, and taken on record by the
Board of Directors, we report that none of the directors is disqualified as on 31 March 2012 from being appointed as
a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;
(f) Managerial remuneration of Rs 7.46 lakhs provided by the Company in the current year is in excess of the limits
specified in the relevant provisions of the Companies Act,1956 and the amount approved by the Central Government.
Further, we are informed that as required by the relevant provisions of the Act, the Company is taking necessary
steps to seek approval from the Central Government for such excess remuneration. Pending approval from the
Central Government in this regard, the impact thereof on the profit of the Company for the current year, to the extent
of amount of excess remuneration that may be disallowed by the Central Government, if any, is presently
unascertainable;
(g) subject to our comments in paragraph (f) above, the impact of which in absence of Central Government decision
is not ascertainable, in our opinion, and to the best of our information and according to the explanations given to
us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2012;
(ii) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.
Place: Gurgaon
Date: 31 May, 2012
For B S R & Co.
Firm Registration No.: 101248W
Rakesh Dewan
Partner
Membership No.: 092212
26
Annexure referred to in para 3 of the Auditors’ report to the members of Timex Group India Limited on the financial
statements for the year ended 31 March 2012
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of
fixed assets.
(b) As explained to us, the Company has a regular programme of physical verification of its fixed assets by which all
fixed assets are verified in a phased manner over a period of three years. According to this programme, the Company
has verified certain fixed assets at its factory at Baddi and its corporate office during the year. In our opinion, this
periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its
assets. As informed to us, no material discrepancies were noticed on such verification. For assets lying with third
parties at the year-end, written confirmations have been obtained.
(c) In our opinion, and according to information and explanations given to us, fixed assets disposed off during the year
are not substantial and therefore, do not affect the going concern assumption.
(ii) (a) According to the information and explanations given to us, the inventories, except goods-in-transit and stocks
lying with third parties, have been physically verified by the management during the year. In our opinion, the
frequency of such verification is reasonable. For stocks lying with third parties at the year-end, written confirmations
have been obtained.
(b) In our opinion and according to the information and explanations given to us, the procedures for the physical
verification of inventories followed by the management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) On the basis of our examination of the records of inventories, we are of the opinion that the Company is maintaining
proper records of inventories. As confirmed to us, the discrepancies noticed on physical verification of inventories
as compared to book records were not material and have been properly dealt with in the books of account.
(iii) According to the information and explanations given to us, the Company has neither granted nor taken any loans,
secured or unsecured, to or from companies, firms or other parties covered in the register maintained under section 301
of the Companies Act, 1956. Accordingly, paragraphs 4(iii)(b) to (g) of the Order are not applicable.
(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that
purchases of certain items of inventories and fixed assets are for the Company’s specialised requirements and similarly certain
goods and services sold are for the specialised requirements of the buyers and suitable alternative sources are not available
to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and
the nature of its business with regard to purchase of inventories and fixed assets and with regard to the sale of goods and
services. Further, on the basis of our examination and according to the information and explanations given to us, we have
neither come across nor have been informed of any instances of major weaknesses in the aforesaid internal control system.
(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be
maintained under that section.
(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance
of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 lakh are for the specialized
requirements of the Company/buyers for which suitable alternative sources are not available to obtain comparable
quotations. However, on the basis of information and explanations provided, the same appear to be reasonable.
(vi) The Company has not accepted any deposits from public during the year.
(vii) In our opinion and according to the information and explanations given to us, the Company has an internal audit
system commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the
Central Government for maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 in respect of
the products covered and are of the opinion that, prima facie, the prescribed accounts and records have been made and
maintained. However, we have not made a detailed examination of the records with a view to ensure whether they are
adequate or complete.
27
(ix)
(a) According to the information and explanations given to us and on the basis of our examination of the records of
the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues
including Provident Fund, Employees’ State Insurance, Income tax, Sales tax, Service tax, Customs duty, Excise
duty, Investor Education and Protection Fund and other material statutory dues, as applicable, have generally
been regularly deposited during the year by the Company with the appropriate authorities. As explained to us,
the provisions of Wealth tax are not applicable to the Company.
According to the information and explanations given to us, no undisputed amounts payable in respect of
Provident Fund, Employees’ State Insurance, Income tax, Sales tax, Service tax, Customs duty, Excise duty,
Investor Education and Protection Fund and other material statutory dues, as applicable, were in arrears as at
31 March 2012 for a period of more than six months from the date they became payable.
(b)
According to the information and explanations given to us, there are no dues in respect of Service tax and
Wealth tax which have not been deposited with the appropriate authorities on account of any dispute. According
to the information and explanations given to us, the following dues of Income tax, Sales tax, Customs duty and
Excise duty have not been deposited by the Company on account of disputes:
Name of the
Statute
Nature of
the dues
Amounts
(Rs. lakhs)
Amounts paid
under protest
(Rs. lakhs)
Period to
which the
amount
relates
(Financial year)
Forum where
dispute is pending
Central Excise
Act, 1944
Excise duty
(Cenvat credit)
Penalty
Excise duty
Penalty
Excise duty
43
7
1995-96 to
1998-99
CESTAT, New Delhi
43
16
1
6
Supreme Court
Sales Tax
59
-
1999-2000 to
2000-01
1992-93 and
1996-97
1994-95
Sales Tax
1
-
1995-96
Sales Tax
8
-
Sales Tax
1
-
1992-93 to
1993-94
1995-96
Cess
1
-
1995-96
Sales Tax
9
9
2002-03
Customs duty
8
8
1995-96
Income Tax Act, 1961 *
Income Tax
610
-
2001-02
Income Tax
658
-
2002-03
Income Tax Act,
1961 */ **
Income Tax
397
-
2003-04
Income Tax
329
-
2004-05
Income Tax
341
-
2005-06
Income Tax
75
-
2006-07
Income Tax
2,000
-
2007-08
Central Excise
Act, 1944
Central Excise
Act, 1944
Central Sales
Tax Act, 1956
The Kerala Sales
Tax Act, 1963
Tamil Nadu General
Sales Tax Act, 1959
Andhra Pradesh
Sales Tax Act, 1957
Karnataka Sales
Tax Act, 1957
Tamil Nadu General
Sales Tax Act, 1959
Customs Act,1962
5
28
Deputy Commissioner,
Central Excise
Deputy Commissioner –
Commercial tax
Assistant Commissioner –
Sales Tax
Commercial
taxation officer
Commercial
taxation officer
Deputy Commissioner –
Commercial taxes
High Court, Chennai
Commissioner, Customs
(Appeals)
Income tax
Appellate Tribunal
Income tax
Appellate Tribunal
Income tax
Appellate Tribunal
Commissioner of Income
Tax, (Appeals)
Tax, (Appeals)
Tax, (Appeals)
Tax, (Appeals )
* Represents additions made to the total taxable income of the Company by the tax authorities which have been disputed by
the Company. No demand has been raised by the tax authorities as any additions to the income will be adjusted against the
brought forward losses / unabsorbed depreciation.
** Total addition of Rs. 397 lakhs made to the total income of the Company for the financial year 2003-04, out of which
Commissioner of Income Tax, (Appeals) has passed an order dated 23 March 2012 allowing a partial relief in favour of the
Company and has directed the Assessing Officer (AO) / Transfer Pricing Order (TPO) to make necessary adjustments. As
informed to us, the Company has not received the amended tax order from the AO/TPO after incorporation of the above
changes. Further, we have been informed that subsequent to the year end, neither the Company nor the tax department have
preferred an appeal in Income tax Appellate Tribunal against the order of Commissioner of Income Tax, (Appeals).
(x)
The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses
during the financial year and in the immediately preceding financial year.
(xi)
The Company did not have any outstanding dues to any financial institution, banks or debenture holders during the
year.
(xii)
According to the information and explanations given to us, the Company has not granted any loans and advances on
the basis of security by way of pledge of shares, debentures and other securities.
(xiii)
According to the information and explanations given to us, the Company is not a chit fund or a nidhi/ mutual benefit
fund/ society.
(xiv)
According to the information and explanations given to us, the Company is not dealing or trading in shares, securities,
debentures and other investments.
(xv)
According to the information and explanations given to us, the Company has not given any guarantees for loans
taken by others from banks or financial institutions.
(xvi)
According to the information and explanations given to us, the Company did not have any term loans outstanding
during the year.
(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the
Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.
(xviii) The Company has not made any preferential allotment of shares during the year to companies/firms/parties covered
in the register maintained under Section 301 of the Companies Act, 1956.
(xix)
The Company did not have any outstanding debentures during the year.
(xx)
The Company has not raised any money by way of public issues during the year.
(xxi)
According to the information and explanations given to us, no fraud on or by the Company has been noticed or
reported during the course of our audit for the year.
For B S R & Co.
Rakesh Dewan
Partner
Place: Gurgaon
Date: 31 May, 2012
29
BALANCE SHEET
as at 31 March 2012
Notes
Equity and liabilities
Shareholders’ funds
Share capital
Reserves and surplus
3
4
Long-term provisions
5
Current liabilities
Short-term borrowings
Trade payables
Other current liabilities
Short-term provisions
TOTAL
Assets
Non-current assets
Fixed assets
Tangible assets
Intangible assets
Capital work-in-progress
Year ended
31 March 2012
(Rs. in lakhs)
Year ended
31 March 2011
5,120
2,123
7,243
275
275
5,120
1,989
7,109
255
255
6
7
8
5
865
5,990
1,810
674
9,339
16,857
4,880
1,544
841
7,265
14,629
9
10
1,419
17
1,436
392
324
2
718
1,280
14
55
1,349
408
230
638
4,131
9,928
326
318
14,703
16,857
3,366
7,520
1,267
488
1
12,642
14,629
Long-term loans and advances
Trade receivables
Other non-current assets
11
14
12
Current assets
Inventories
Trade receivables
Cash and bank balances
Short-term loans and advances
Other current assets
13
14
15
11
12
TOTAL
Significant accounting policies
2
The accompanying notes are an integral part of the financial statements
As per our report attached
For and on behalf of the Board of Directors of Timex Group India Limited
For B S R & Co.
Rakesh Dewan
Partner
Place: Gurgaon
Date: 31 May 2012
Kapil Kapoor
Chairman
Place : Noida
Date: 31 May 2012
V D Wadhwa
Managing Director
Place : Noida
Date: 31 May 2012
30
Shilpa Verma
Company Secretary
Amit Jain
Head Accounts
Place : Noida
Date: 31 May 2012
Place : Noida
Date: 31 May 2012
Statement of Profit and Loss for the year ended 31 March 2012
(Rs. in lakhs)
Notes
Year ended
31 March 2012
Year ended
31 March 2011
18,586
235
18,351
40
18,391
17,568
252
17,316
75
17,391
18
19
9,896
471
9,227
156
20
21
22
23
24
(630)
1,887
109
197
5,856
(72)
1,618
169
4,535
17,786
15,633
605
1,758
155
(3)
357
-
453
1,401
0.13
1.07
Income
Revenue from operations (gross)
Less: Excise duty
Revenue from operations (net)
Other income
Total revenue
16
17
Expenses
Cost of raw materials and components consumed
Purchase of traded goods
(Increase)/decrease in inventories of finished
goods, work in progress and traded goods
Employee benefits expense
Finance costs
Depreciation and amortisation expense
Other expenses
Total expenses
Profit before tax
Tax expense
Current tax (Minimum Alternate Tax)
Fringe benefit tax for prior years written back
Profit for the year
Basic and diluted earnings per equity share
fully paid up Re.1 each.
28
Significant accounting policies
2
For B S R & Co.
Rakesh Dewan
Partner
Place: Gurgaon
Date: 31 May 2012
Kapil Kapoor
Chairman
Place : Noida
Date: 31 May 2012
V D Wadhwa
Managing Director
Place : Noida
Date: 31 May 2012
31
Shilpa Verma
Company Secretary
Amit Jain
Head Accounts
Place : Noida
Date: 31 May 2012
Place : Noida
Date: 31 May 2012
Cash Flow Statement for the year ended 31 March 2012
(Rs. in lakhs)
Year ended
31 March 2012
Year ended
31 March 2011
Cash flows from operating activities
Profit before tax
605
1,758
Non cash adjustments :
Depreciation and amortisation
197
169
Assets written off
1
Loss on sale of assets (net)
3
Unrealised foreign exchange loss
348
35
Advances written off
16
Interest expense
109
- #
Liabilities/provisions no longer required written back
(24)
(10)
Interest income
(10)
(39)
Operating profit before working capital changes
1,229
1,929
Movements in working capital:
Increase/(decrease) in trade payables
632
361
Increase/(decrease) in long term provisions
20
71
Increase/(decrease) in short term provisions
24
19
Increase/(decrease) in other current liabilities
254
278
Decrease/(increase) in inventories
(765)
(129)
Decrease/(increase) in trade receivables
(2,253)
(1,242)
Decrease/(increase) in non-current trade receivables
(94)
(230)
Decrease/(increase) in long term loans and advances
18
(3)
Decrease/(increase) in short term loans and advances
170
(216)
Decrease/(increase) in other current assets
- #
Cash generated from/(used) in operations
(765)
838
Income taxes paid (net of refunds)
(351)
(161)
Net cash generated from/(used in) operating activities (A)
(1,116)
677
Cash flows from investing activities
Purchase of fixed assets
(270)
(246)
Proceeds from sale of fixed assets
- #
Interest received
11
39
Tax on interest received
- #
(3)
Investment in fixed deposits with original maturity period exceeding 3 months
(1)
Net cash generated from/(used in) investing activities (B)
(260)
(210)
Cash flows from financing activities
Increase in short term bank borrowings
865
Interest paid
(109)
Dividend paid on preference shares
(274)
(274)
Tax paid on preference dividend
(46)
(47)
Net cash generated from/(used in) financing activities ( C)
436
(321)
Net increase/ (decrease) in cash and cash equivalents (A+B+C)
(940)
146
Cash and cash equivalents at the beginning of the year
1,266
1,120
Cash and cash equivalents at the end of the year
326
1,266
Notes :
Component of cash and cash equivalents :
Cash on hand
5
8
Cheques on hand
285
288
Balances with banks:
On current accounts
36
270
Deposits with original maturity of less than 3 months
700
Cash and cash equivalents at the end of the year
326
1,266
# Amount is below rounding off threshold adopted by the Company.
Note: The Cash Flow Statement has been prepared in accordance with the ‘Indirect Method’ specified in Accounting Standard 3, Cash Flow Statement, notified
by Central Government in the Companies (Accounting Standard) Rules, 2006.
Significant accounting policies (refer note 2)
For B S R & Co.
Rakesh Dewan
Partner
Kapil Kapoor
Chairman
V D Wadhwa
Managing Director
Place: Gurgaon
Date: 31 May 2012
Place : Noida
Date: 31 May 2012
Place : Noida
Date: 31 May 2012
32
Shilpa Verma
Company Secretary
Place : Noida
Date: 31 May 2012
Amit Jain
Head Accounts
Place : Noida
Date: 31 May 2012
Notes to the financial statements for the year ended 31 March 2012
1. General information
Timex Group India Limited (‘TGIL’ or the ‘Company’), a subsidiary of Timex Group Luxury Watches B.V., is a limited
liability company incorporated on 4 October 1988 under the provisions of the Companies Act, 1956. The Company is
listed on Bombay Stock Exchange in India.
The Company is engaged in the business of manufacturing and trading of watches and rendering of related after sales
service. The Company’s manufacturing facilities are located at Baddi, Himachal Pradesh. The Company also provides
accounting and information and technology support services to group companies.
2. Basis of preparation of financial statements
The financial statements are prepared and presented under the historical cost convention, on accrual basis of accounting
in accordance with the Generally Accepted Accounting Principles (‘GAAP’) in India and comply with the accounting
standards prescribed by the Companies (Accounting Standards) Rules, 2006 and the presentational requirements of
the Companies Act, 1956, to the extent applicable
All the assets and liabilities have been classified as current and non-current as per the Company’s normal operating
cycle and other criteria set out in the revised schedule VI to the Companies Act, 1956.Based on the nature of products
and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the
Company has ascertained its operating cycle being a period within 12 months for the purpose of classification of assets
and liabilities as current and non-current.
2.1 Significant accounting policies
a. Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities
on the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. Examples of such estimates include estimated provision for doubtful debts, warranties, future obligations
under employee retirement benefit plans and estimated useful life of fixed assets, classification of assets/liabilities
as current or non current in certain circumstances etc. Differences between actual results and estimates are
recognised in the year in which the actual results are known or materialised. Any revision to accounting estimates
is recognised in accordance with the requirements of the respective accounting standard.
b. Fixed assets and depreciation
Fixed assets are carried at cost of acquisition less accumulated depreciation. Cost is inclusive of freight, duties,
taxes and any other directly attributable costs to bring the assets to their working condition for intended use.
Depreciation on tangible assets other than leasehold land and leasehold improvements is provided under the
straight line method over the useful life as estimated by the management or the derived useful life as per Schedule
XIV of the Companies Act, 1956, whichever is lower. Depreciation on the following categories of fixed assets is
provided at rates that are higher than the corresponding rates prescribed in Schedule XIV:
· Plant and machinery (including office equipment) at rates ranging from 4.75% per annum to 100% per annum
based on technical evaluation.
· Furniture and fixtures at the rate of 20% per annum.
· Tools and moulds are fully depreciated in the year of manufacture / purchase.
Depreciation on additions is provided on a pro-rata basis from the date of acquisition/installation.
Depreciation on sale/deduction from fixed assets is provided for upto the date of sale/adjustment, as the case
may be.
Leasehold land is amortised over the period of lease.
Leasehold improvements are depreciated under the straight line method over the lowest of the following:
· period of the lease
· useful life as estimated by management
· derived useful life as per Schedule XIV.
Assets costing upto Rs. 5,000 are fully depreciated in the year of purchase.
33
c.
d.
e.
f.
Gain or loss arising from derecognition of fixed assets are measured as the difference between the net disposal
proceeds and the carrying amount of the assets and are recognised in the Statement of Profit and Loss when assets
are derecognised.
Fixed assets under construction are disclosed as capital work in progress.
Intangible assets and amortisation
Intangible assets comprising software are carried at cost of acquisition less accumulated amortisation. Cost is
inclusive of freight, duties, taxes and any other directly attributable costs to bring the assets to their working
condition for intended use.
Software is amortised over their estimated useful life of 5 years.
Assets costing upto Rs. 5,000 are fully depreciated in the year of purchase.
Gain or loss arising from derecognition of intangible assets are measured as the difference between the net disposal
proceeds and the carrying amount of the assets and are recognised in the Statement of Profit and Loss when assets
are derecognised.
Impairment
The carrying amounts of assets are reviewed at each balance sheet date in accordance with Accounting Standard
– 28 on ‘Impairment of Assets’ to determine whether there is any indication of impairment. If any such indication
exists, the recoverable amount of the asset is estimated. An impairment loss is recognised whenever the carrying
amount of an asset or cash generating unit exceeds its recoverable amount. Impairment losses are recognised in the
Statement of Profit and Loss. An impairment loss is reversed if there has been a change in the estimates used to
determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying
amount does not exceed the carrying amount that would have been determined net of depreciation or amortisation,
if no impairment loss had been recognised.
Inventories
Inventories are valued at the lower of cost and net realisable value. Cost of inventories includes all costs incurred
in bringing the inventories to their present location and condition.
In determining the cost, the weighted average cost method is used. Fixed production overheads are allocated on
the basis of normal capacity of production facilities. Finished goods and work-in-progress include appropriate
share of allocable overheads.
Finished goods held for the purpose of demonstration are amortised over a period of three years after deducting
estimated residual value.
Employee benefits
The Company’s obligations towards various employee benefits have been recognised as follows:
Short term benefits
All employee benefits payable/available within twelve months of rendering the service are classified as short-term
employee benefits. Benefits such as salaries, wages and bonus etc., are recognised in the Statement of Profit and
Loss in the period in which the employee renders the related service.
Post employment benefits
In respect of the defined contribution plan in the form of Superannuation, the Trustees of the Scheme have
entrusted the administration of the Scheme to the Life Insurance Corporation of India (LIC). Annual contribution to
the LIC is recognised as an expense in the Statement of Profit and Loss.
Charge for the year in respect of unfunded defined benefit plan in the form of gratuity has been ascertained based
on actuarial valuation carried out by an independent actuary as at the year end using the Projected Unit Credit
Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement
and measures each unit separately to build up the final obligation. The obligation is measured at the present value
of the estimated future cash flows. The discount rate used for determining the present value of the obligation under
defined benefit plans, is based on the market yields on Government securities as at the valuation date having
maturity periods approximating to the terms of related obligations. Actuarial gains and losses are recognised
34
immediately in the Statement of Profit and Loss.
Provident Fund (PF): The Company deposits certain portion of the Provident Fund contribution with the Regional
Provident Fund Commissioner and will have no obligation to pay further amounts. Accordingly, this plan is
considered as a defined contribution plan.
For the remaining portion of Provident Fund, the Company contributes to the PF Trust which is administered by
trustees of an independently constituted Trust recognised by the Income-tax Act, 1961. Contributions, including
shortfall, if any, to the Trust are charged to the Statement of Profit and Loss on an accrual basis. As the provident
fund scheme has a guaranteed return linked with that under EPF Scheme, 1952, the same has been considered as a
defined benefit plan. The present value of obligation has been determined based on actuarial valuation done by
independent actuary using the Projected Accrued Benefit Method. Under this method, the Defined Benefit Obligation
is calculated based on deterministic approach in respect of all accrued and accumulated provident fund contributions
as at the valuation date. The cost of interest rate guarantee, if any, in respect of future provident fund contributions
is not taken into consideration. This approach determines the present value of the interest rate guarantee under
three interest rate scenarios: base case scenario, rising interest rate scenario and falling interest rate scenario. The
Defined Benefit Obligation of the interest rate guarantee is set equal to the average of the present values determined
under these scenarios in respect of accumulated provident fund contributions as at the valuation date.
Gains or losses on the curtailment or settlement of any defined benefit plan are recognised when the curtailment or
settlement occurs.
Other long term benefits
Compensated absences are in the nature of other long term employee benefits. Cost of long term benefit by way of
accumulating compensated absences that are expected to be availed after a period of 12 months from the year end
are recognised when the employees render the service that increases their entitlement to future compensated
absences. The liability in respect of compensated absences is provided on the basis of an actuarial valuation done
by an independent actuary at the year end. Actuarial gains and losses are recognized immediately in the Statement
of Profit and Loss.
g. Revenue recognition
Revenue from sale of goods is recognised on delivery of goods to the buyer which coincides with transfer of all
significant risks and rewards of ownership. The amount recognised as sale is inclusive of excise duty and excludes
sales tax and trade and quantity discounts.
Revenue from services is recognised on rendering of services to customers on accrual basis.
Interest income is recognised on a time proportion basis considering the rate of interest and amount invested.
h. Foreign currency transactions
Foreign exchange transactions are recorded using the exchange rate prevailing on the date of the transaction.
Exchange differences arising on foreign exchange transactions settled during the year are recognised in the Statement
of Profit and Loss of the year.
Monetary assets and liabilities denominated in foreign currencies remaining unsettled as at the balance sheet date
are translated at the exchange rates on that date and the resultant exchange differences are recognised in the
Statement of Profit and Loss.
i. Warranties
Warranty costs are estimated by the management on the basis of past experience. Provision is made for the
estimated liability in respect of warranty costs in the year of sale of goods.
j. Taxation
Income tax expense comprises current tax (i.e amount of tax for the year determined in accordance with the Incometax Act, 1961) and deferred tax charge or credit (reflecting the tax effects of timing difference between accounting
income and taxable income for the period). The deferred tax charge or credit and the corresponding deferred tax
liability or deferred tax asset is recognised using the tax rates that have been enacted or substantially enacted as at
the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty of
realisation. Such assets are reviewed at each balance sheet date to reassess realisation. However, where there are
35
carried forward losses or unabsorbed depreciation under taxation laws, deferred tax assets are recognised only if
there is virtual certainty of realisation of such assets.
The credits arising from Minimum Alternate Tax paid are recognised as receivable only if there is reasonable
certainty that the Company will have sufficient taxable income in future years in order to utilize such credits.
k. Leases
Lease rentals in respect of assets taken on operating lease are charged on a straight-line basis to the Statement of
Profit and Loss.
Lease income from operating leases is recognised in the Statement of Profit and Loss on a straight line basis over
the lease term.
l. Other Provisions and Contingent Liabilities
A provision arising from claims, litigation, assessment, fines, penalties, etc. is recognised when the Company has
a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
These are reviewed at each balance sheet date and adjusted to reflect current management estimates. Contingent
liabilities are disclosed in respect of possible obligations that have risen from past events and the existence of
which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the enterprise. When there is a possible obligation or present obligation where the
likelihood of an outflow is remote, no disclosure or provision is made.
m. Provision for sales returns
Provision for sales returns is recognised to the extent of estimated margin on expected returns based on past
trends.
n. Cash and cash equivalents
Cash and cash equivalents for the purpose of Cash Flow Statement comprise cash at bank and in hand and short
term investments with original maturity of less than three months.
o. Earnings per share
Basic earnings per share are computed using the weighted average number of equity shares outstanding during
the year. Diluted earnings per share are computed using the weighted average number of equity and dilutive
potential equity shares outstanding during the year, except where the results would be anti- dilutive.
36
3.
Year ended
31 March 2012
(Rs. in lakhs)
Year ended
31 March 2011
12,500
4,500
12,500
4,500
17,000
17,000
1,010
1,010
250
250
157 (previous year 157), 7.1% Cumulative redeemable non
convertible preference shares of Rs. 10 each fully paid up
1,570
1,570
229 (previous year 229), 7.1% Cumulative redeemable non
2,290
2,290
5,120
5,120
Share capital
Authorised (No. lakhs)
12,500 (previous year 12,500) equity shares of Re. 1 each
450 (previous year 450) preference shares of Rs. 10 each
Issued, subscribed and paid up (No. Lakhs)
1,009.5 (previous year 1,009.5), equity shares of Re. 1
each, fully paid up
25 (previous year 25), 0.1% Non cumulative redeemable non
a.
Reconciliation of the shares outstanding at the beginning
and at the end of the reporting period
As at 31 March 2012
No. lakhs
Amount
Rs. in lakhs
Equity shares
At the beginning and end of the year
1,010
1,010
1,010
1,010
As at 31 March 2012
No. lakhs
Amount
Rs. in lakhs
As at 31 March 2011
No. lakhs
Amount
Rs. in lakhs
1,010
1,010
1,010
1,010
As at 31 March 2011
No. lakhs
Amount
Rs. in lakhs
Preference shares
At the beginning and end of the year
0.1%, Non cumulative redeemable non convertible preference
shares of Rs. 10 each fully paid up
7.1%, Cumulative redeemable non convertible preference
7.1%, Cumulative redeemable non convertible preference
b.
c.
25
250
25
250
157
1,570
157
1,570
229
411
2,290
4,110
229
411
2,290
4,110
Terms / rights attached to equity shares
The Company has only one class of equity shares having a par value of Re. 1 per share. Each holder of equity shares
is entitled to one vote per share.
In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets
of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of
equity shares held by the shareholders.
Terms / rights attached to preference shares
- 0.1% Non-cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 0.1%
37
d.
e.
per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared and
distributed and the dividend liability on the preference shares for the respective year’s shall lapse.
- 7.1% Cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 7.1%
per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared
and distributed in the respective year but the dividend liability on the preference shares for that respective year’s
shall be cumulated and paid to the holders of the preference shares.
- 7.1% Cumulative redeemable non-convertible preference shares shall be entitled to dividend at the rate of 7.1%
per annum. In case of insufficiency of profits /no profits, the dividend on preference shares shall not be declared
and distributed in the respective year but the dividend liability on the preference shares for that respective year’s
shall be cumulated and paid to the holders of the preference shares.
Terms of redemption of preference shares
- Maturity period for redemption of 0.1% preference shares amounting to Rs. 250 (Previous year Rs. 250) is ten
years from the date of allotment i.e. 25 March 2003, with an option to the Company of an earlier redemption after
24 March 2005.
- Maturity period for redemption of 7.1% preference shares amounting to Rs. 1,570 (previous year Rs. 1,570) is ten
27 March 2006. (Refer note 27)
- Maturity period for redemption of 7.1% preference shares amounting to Rs. 2,290 (previous year Rs. 2,290) is ten
27 March 2006. (Refer note 27)
Shares held by holding / ultimate holding company and /or their subsidiaries/associates
As at 31 March 2012
As at 31 March 2011
Amount % holding
Amount
% holding
Rs. in lakhs
Rs. in lakhs
Timex Group Luxury Watches B.V., the holding Company *
- Equity shares [756 (previous year 756 )
of Re. 1 each fully paid up]
756
74.93
756
74.93
- Preference shares
0.1% non cumulative redeemable non convertible
preference shares of Rs. 10 each fully paid up
250
100
250
100
7.1% cumulative redeemable non convertible preference
1,570
100
1,570
100
7.1% cumulative redeemable non convertible preference
2,290
100
2,290
100
* There is no other shareholders holding more than 5% shares in the company.
4.
Reserves and surplus
Securities premium account
Balance at the beginning and at the end of the year
Surplus in the Statement of Profit and Loss
Balance at the beginning of the year
Add: Profit for the year
Less: Appropriations
- Dividend on preference shares
- Tax on dividend
Balance at the end of the year
38
Year ended
31 March 2012
(Rs. in lakhs)
Year ended
31 March 2011
351
351
351
351
1,638
453
557
1,401
274
45
1,772
2,123
274
46
1,638
1,989
5.
Provisions
Long-term
Short-term
Year ended
Year ended
Year ended
Year ended
31 March 2012 31 March 2011 31 March 2012 31 March 2011
(Rs. in lakhs) (Rs. in lakhs) (Rs. in lakhs) (Rs. in lakhs)
Provision for employee benefits
Provision for gratuity (refer note 40)
Provision for compensated absences (refer note 40)
Other provisions
Provision for warranties (refer note 38)
Proposed preference dividend
Provision for tax on proposed preference dividend
Provision for sales returns (refer note 38)
Provision for income tax [net of advance tax
of Rs.203 lakhs (previous year Rs. 203 lakhs)]
Provision for litigations (refer note 38)
6.
147
128
275
133
122
255
7
10
17
3
9
12
-
-
69
274
45
216
10
96
274
46
182
200
275
255
43
657
674
31
829
841
Short-term borrowings
Cash credit from banks (unsecured)*
Year ended
31 March 2012
(Rs. in lakhs)
Year ended
31 March 2011
(Rs. in lakhs)
865
865
-
Year ended
31 March 2012
(Rs. in lakhs)
Year ended
31 March 2011
(Rs. in lakhs)
5,990
5,990
4,880
4,880
Year ended
31 March 2012
(Rs. in lakhs)
Year ended
31 March 2011
(Rs. in lakhs)
985
18
174
154
463
1
15
1,810
923
29
18
115
130
284
42
3
1,544
* Timex Group Luxury Watches BV, the holding company, has provided
a standby letter of credit amounting to Rs. 1,780 lakhs (previous year
Rs. 1,780 lakhs) to the bankers of the Company as a guarantee for use
of cash credit and overdraft facilities. The cash credit is repayable on demand.
7.
8.
Trade payable
- total outstanding dues to micro and small enterprises (refer note 26)
- others
Other current liabilities
Discount, selling and other expenses
Unearned income
Security deposits received from dealers
Advance received from customers
Dues to employees
Statutory dues payable
Book overdraft
Capital creditors
39
9.
Tangible Assets
As at 31 March 2012
(Rs. in lakhs)
Gross block
Description
Accumulated depreciation/amortisation
As at Additions Deletions
As at
Up to For the year
31 March 2011
31 March 2012 31 March 2011
Leasehold land
155
-
-
155
Buildings*
334
-
-
Leasehold improvements
155
-
-
2,066
23
410
272
96
5
406
36
- **
3,622
336
Plant and machinery #
Furniture and fixtures
Office equipment
Computer equipment
Total
Deletions/
adjustments
8
2
-
334
43
11
155
149
2
92
1,997
1,566
43
2
680
232
94
- **
101
33
4
- **
442
311
37
- **
3,864
2,342
193
94
Net block
Up to
As at
As at
31 March 2012 31 March 2012 31 March 2011
10
145
147
-
54
280
291
-
151
4
6
88
1,521
476
500
2
324
356
178
37
64
63
348
94
95
2,445
1,419
1,280
90
* Building is constructed on leasehold land
# Plant and machinery includes machinery given on operating lease
Gross block Rs. 853 (previous year Rs. 853)
Depreciation charge for the year Rs. 25 (previous year Rs. 25)
Accumulated depreciation Rs. 729 (previous year Rs. 704)
Net block Rs. 124 (previous year Rs. 149)
** Amount is below rounding off threshold adopted by the Company.
As at 31 March 2011
(Rs. in lakhs)
Gross block
Description
Accumulated depreciation/amortisation
As at
Up to For the year
31 March 2010
31 March 2011 31 March 2010
Deletions/
adjustments
Net block
Up to
As at
As at
Leasehold land
155
–
–
155
6
2
–
8
147
149
Buildings*
334
–
–
334
32
11
–
43
291
302
Leasehold improvements
155
–
–
155
140
9
–
149
6
15
2,036
30
–
2,066
1,524
42
–
1,566
500
512
287
123
–
410
173
59
–
232
178
114
86
10
– **
96
30
3
33
63
56
389
24
7
406
279
39
7
311
95
110
3,442
187
7
3,622
2,184
165
7
2,342
1,280
1,258
Plant and machinery #
Furniture and fixtures
Office equipment
Computer equipment
Total
–**
* Building is constructed on leasehold land
# Plant and machinery includes machinery given on operating lease
Gross block Rs. 853 (previous year Rs. 853)
Depreciation charge for the year Rs. 25 (previous year Rs. 32)
Accumulated depreciation Rs. 704 lakhs (previous year Rs. 679)
Net block Rs. 149 (previous year Rs. 174)
** Amount is below rounding off threshold adopted by the Company.
10. Intangible Assets
As at 31 March 2012
(Rs. in lakhs)
Gross block
Description
Accumulated amortisation
As at
Up to For the year
31 March 2011
31 March 2012 31 March 2011
Deletions/
adjustments
Net block
Up to
As at
As at
Computer Software
25
7
–
32
11
4
–
15
17
14
Total
25
7
–
32
11
4
–
15
17
14
40
As at 31 March 2011
(Rs. in lakhs)
Gross block
Description
Accumulated amortisation
As at
Up to For the year
31 March 2010
31 March 2011 31 March 2010
Deletions/
adjustments
Net block
Up to
As at
As at
Computer Software
25
–
–
25
7
4
–
11
14
18
Total
25
–
–
25
7
4
–
11
14
18
11. Loans and advances
Non current
Current
Year ended
Year ended
Year ended
Year ended
Capital advances
Unsecured, considered good
Security deposits
Unsecured, considered doubtful
Less: Provision for doubtful security deposits
Other loans and advances
Unsecured, considered good, unless stated otherwise
Advance income-tax [net of provision for tax
Rs. 620 lakhs (previous year Rs. 107 lakhs)]
Prepaid expenses
Advances to employees (refer note 34)
Vehicle loans to employees *
Balances with government authorities
Advances to vendors
Others
22
22
27
27
-
-
342
31
373
31
342
359
359
359
-
-
27
20
-
-
1
28
392
2
22
408
42
10
1
148
110
7
318
318
30
12
1
169
257
19
488
488
* Secured by hypothecation of respective vehicles
12. Other assets
Unsecured, considered good, unless stated otherwise
Non current
Current
Year ended
Year ended
Year ended
Year ended
Fixed deposits with original maturity of more
2
-#
than 12 months *
Interest accrued on fixed deposits
-#
1
2
1
*Pledged with bank as security for guarantees issued on behalf of the Company.
41
As at 31
March 2012
As at 31
March 2011
1,329
1,191
224
2,557
111
2,037
21
4,131
23
4
3,366
13. Inventories (valued at lower of cost and net realizable value)
Raw materials and components [includes goods in transit Rs. 26 lakhs
(previous year Rs. 38 lakhs)]
Work-in-progress
Finished goods [includes goods in transit Rs. Nil
(previous year Rs. 66 lakhs)]
Traded goods
Stores and consumables
14. Trade receivables
Non-current
Current
Year ended
Year ended
Year ended
Year ended
Debts outstanding for a period exceeding
six months from the date they are due for payment
Debts due from related parties, unsecured
(refer note 29)
Unsecured, considered doubtful
Less: Provision for doubtful debts
Other debts
Debts due from related parties, unsecured (refer note 29)
Less: Provision for doubtful debts
15. Cash and bank balances
324
324
324
230
230
230
151
87
403
641
403
238
8
52
323
383
323
60
324
230
315
9,375
9,690
9,690
9,928
184
7,276
7,460
7,460
7,520
Non-current
Current
Year ended
Year ended
Year ended
Year ended
Cash and cash equivalents
Balances with banks:
On current accounts
Deposits with original maturity of less than 3 months
Cheques on hand
Cash on hand
-
36
285
5
326
270
700
288
8
1,266
2
-#
(2)
-#
*Pledged with bank as security for guarantees issued on behalf of the Company.
326
1
1,267
Other bank balances
Margin money deposits*
Amount disclosed under non current assests (refer note 12)
42
-
16. Revenue from operations
Sale of products
Finished goods
Traded goods
Sale of services
Other operating revenue
- Scrap sales
- Dealers signing fees
- DEPB income
- Lease rent
- Liabilities/provisions no longer required written back
Revenue from operations (gross)
Less: Excise duty
Revenue from operations (net)
Details of products sold
Finished goods
- Watches
- Components and others
Traded goods
- Watches
Details of services rendered
- Support charges
- Customer services
17. Other income
Interest income on
- bank deposits
- dues from customers
Foreign exchange gain (net)
Profit on sale of assets (net)
Miscellaneous income
Year ended
31 March 2012
(Rs. in lakhs)
Year ended
31 March 2011
(Rs. in lakhs)
17,696
532
18,228
305
16,984
142
17,126
383
3
15
1
10
24
18,586
235
18,351
3
11
26
9
10
17,568
252
17,316
16,914
782
17,696
16,315
669
16,984
532
532
142
142
274
31
305
353
30
383
2
8
10
30
40
34
5
39
34
-#
2
75
1,191
10,034
11,225
1,329
9,896
1,133
9,285
10,418
1,191
9,227
18. Cost of raw materials and components consumed
Inventory at the beginning of the year
Add: Purchases
Less: Inventory at the end of the year
Cost of raw material and components consumed
43
Details of raw materials and components consumed
Movements
Straps
Others materials
Details of inventory
Raw materials and components
Movements
Straps
Others materials
19. Purchase of Traded goods
Watches
Details of purchases
Traded goods
20. (Increase)/decrease in inventories
Inventory at the end of the year
Traded goods
Work-in-progress
Finished goods
Inventory at the beginning of the year
Traded goods
Work-in-progress
Finished goods
(Increase)/decrease during the year
Details of inventory
Traded Goods
Watches
Work in progress
Watches
Finished goods
Watches
21. Employee benefit expense
Salaries, wages and bonus*
Contribution to provident and other funds
Gratuity expense
Staff welfare expenses
*Employee cost for the year ended 31 March 2012 include prior period
expense amounting to Rs. 20 lakhs (previous year Rs. Nil).
44
Year ended
31 March 2012
(Rs. in lakhs)
Year ended
31 March 2011
(Rs. in lakhs)
1,879
1,328
6,689
9,896
1,928
2,000
5,299
9,227
170
381
778
1,329
204
295
692
1,191
471
471
156
156
471
471
156
156
21
224
2,557
2,802
23
112
2,037
2,172
23
112
2,037
2,172
(630)
858
293
949
2,100
(72)
21
21
23
23
224
224
112
112
2,557
2,557
2,037
2,037
1,584
118
24
161
1,887
1,320
100
54
144
1,618
22. Finance cost
Interest on borrowings
Interest on delayed payment of statutory dues
23. Depreciation and amortization expense
Depreciation on tangible assets
Amortization on intangible assets
(refer note 9 and 10)
24. Other expenses
Advertising, marketing and brand building expenses*
Warranty
Selling and distribution
Power and fuel
Repairs and maintenance
- Building
- Machinery
- Others
Rent
Rates and taxes, excluding taxes on income
Insurance
Travelling
Communication
Bank charges
Director’s sitting fees
Legal and professional (refer note 30)
Commission
Advances written off
Purchased services
Consumption of stores and spare parts
Excise duty expense
Provision for doubtful debts
Provision for doubtful advances
Provision for contingencies
Assets written off (net)
Loss on sale of assets (net)
Margin loss on sale return
Foreign exchange loss (net)
Miscellaneous expenses
Year ended
31 March 2012
(Rs. in lakhs)
Year ended
31 March 2011
(Rs. in lakhs)
90
19
109
-#
-
193
4
197
165
4
169
2,367
157
473
51
2,076
122
411
50
23
29
24
357
195
25
455
83
12
9
187
153
344
15
11
81
31
11
1
3
34
422
303
5,856
26
20
30
337
179
24
413
87
14
10
127
169
16
191
14
1
33
185
4,535
*Advertising and marketing expenses for the year ended 31 March 2012 include prior period expense amounting
Rs. 6 lakhs (previous year Rs. Nil).
45
25. (a) Capital and other commitments
Particulars
Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances)
(b) Contingent liabilities
Particulars
Claims against the Company not acknowledged as debts
a) Sales tax
b) Excise duty
c) Customs duty
d) Income tax
e) Others
Bills discounted
As at
31 March 2012
1
As at
31 March 2012
79
92
8
144
462
(Rs. in lakhs)
As at
31 March 2011
5
(Rs. in lakhs)
As at
31 March 2011
79
92
8
67
128*
457
*During the previous years, the Company had received a notice from the relevant Government authorities for non
payment of stamp duty on a lease entered into by the Company. The demand order of the same has not been received
by the Company in the previous year and the liability on this account could not be ascertained. During the current
year, the aforesaid demand order has been received and the amount has been settled.
26. The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which
recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the
Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, the disclosure in
respect of the amounts payable to such enterprises as at 31 March 2012 and as at 31 March 2011 has been made in the
financial statements based on information received and available with the Company. Based on the information currently
available with the Company, there are no dues payable to Micro and Small Suppliers as defined in the Micro, Small and
Medium Enterprises Development Act, 2006.
27. The dividend liability on 15,700,000 2.9% cumulative redeemable non-convertible preference shares of Rs.10 each and
22,900,000 5.4% cumulative redeemable non-convertible preference shares of Rs. 10 each, payable until 31 March 2009,
was waived off as per the consent of the holders of these preference shares vide their letter dated 15 March 2009. The
coupon rate applicable to these series of preference shares was revised to 7.1% effective 1 April 2010 till the date of
maturity.
28. Earnings per share
The computation of basic/diluted earnings per share is set out below:
(Rs. in lakhs)
Year ended
Year ended
Particulars
31 March 2012
31 March 2011
Profit as per Statement of Profit and Loss
453
1,401
Less: Preference dividend and tax thereon
319
320
Net profit attributable to equity shareholders – (A)
134
1,081
Basic/weighted average no. of equity shares outstanding
during the year – (No. in lakhs.) – (B)
1,010
1,010
Nominal value of equity shares (Rs.)
1.00
1.00
Basic/diluted earnings per share (Rs.) – (A)/(B)
0.13
1.07
29. Related parties
a. Related parties and nature of related party relationship where control exists:
Description of Relationship
Ultimate Holding Company
Holding Company
Name of the Party
Timex Group B.V.
Timex Group Luxury Watches B.V (formerly
Timex Watches B.V)
46
b. Other related parties with whom transactions have taken place:
Description of Relationship
Name of the Party
Fellow Subsidiaries
Timex Group B.V. T/A Mersey Manufacturers
Fralsen Horlogerie S.A.
TMX Limited NV
TMX Limited NV (International Sales Division)*
Timex Corporation (Germany)
Timex Limited NV
Timex Group UK *
Timex Nederland B.V.
Timex Group USA Inc.
Timex Group Luxury Watches B.V. (Ferragamo)
Timex Group Precision Engineering Limited (TGPEL)
Timex Hong Kong Limited*
Timex Portugal *
Timex Hungary Limited*
Verstime S.A.
Key Management Personnel
V.D. Wadhwa, Managing Director
(w.e.f. 29 April 2010)
Gopalratnam Kannan (upto 28 April 2010)
* No transactions during the current year.
c. Transactions and outstanding balances with related parties
Party Name
Ultimate holding company
Timex Group B.V
IT
Support
expenses
Purchase
of goods
Reimbursement
(Rs. in lakhs)
Service
income
Paid
Received
Service
charges
paid
Sale
of goods
Payable
Receivable
-
-
-
2
119
123
-
-
-
262
122
2
-#
-
-
-
-
-
-
2
-#
-
-
125
133
-
1
9
-
-
-
61
50
9
38
18
-
172
166
1,707
1,192
-#
3
18
32
-
58
138
-
-
-55
-
361
357
4,243
2,963
119
38
55
--#
-
-#
1
-
-
39
8
-
-
70
24
-
--
Timex Group Luxury
Watches B.V. (Ferragamo)
-
82
53
-#
-
-
-
14
18
-#
15
TMX Limited NV
(International Sales Division)
-
-
-
-
-
-
49
-
-
Holding company
Timex Group Luxury
Watches B.V.
Fellow Subsidiaries
Timex Group B.V. T/A
Mersey Manufacturers
Timex Group USA
TMX Limited NV
Timex Nederland B.V.
Timex Group UK
Timex Group Precision
-
10
-
-
85
-
-
1
-
Engineering Limited
-
30
-
-
101
-
-
-#
-
Timex Hong Kong Limited
-
-
-
-
-
-
-
-
7
-
-
-
-
-
-
-
-
7
-
127
-
-
-
-
-
30
23
-
105
-
-
-
-
-
22
1
Others
Note: Current year figures are in bold
47
Besides the above, the Company has paid Rs. 274 lakhs (previous year Rs. 274 lakhs) to Timex Group Luxury Watches
B.V. as dividend during the year.
Timex Group Luxury Watches BV, the holding company, has provided a standby letter of credit amounting to Rs. 1,780
lakhs (previous year Rs. 1,780 lakhs) to the bankers of the Company as a guarantee for use of cash credit and overdraft
facilities.
(Rs. in lakhs)
Year ended
Year ended
Transactions with key management personnel:
31 March 2012
31 March 2011
Remuneration*
Gopalratnam Kannan
34
V. D Wadhwa
105
83
Advances given:
V. D Wadhwa
2
Amount repaid during the year
V. D Wadhwa
2
* Excludes gratuity and leave encashment as the same is determined for the Company as a whole and is not separately
ascertainable for any individual.
30. Payment to auditors (including service tax):
(Rs. in lakhs)
Year ended
31 March 2011
17
2
17
7
2
45
Year ended
31 March 2012
18
2
18
8
3
49
Patrticulars
a. Statutory audit
b. Tax audit
c. Limited review
d. Other services
e. Reimbursement of out of pocket expenses
Total
31. Details of imported and indigenous raw materials, components, spares and consumables consumed
Year ended
31 March 2012
Value
% of total
(Rs. lakhs)
consumption
Year ended
31 March 2011
Value
% of total
(Rs. lakhs)
consumption
Raw materials and components
Imported
Indigenous
5,717
4,179
58
42
4,523
4,704
49
51
Total
9,896
100
9,227
100
-#
15
15
2
98
100
-#
14
14
3
97
100
Stores and consumables
Imported
Indigenous
Total
48
32. Value of imports on CIF basis
Particulars
Raw material and components
Purchase of watches
Consumables
Total
Year ended
31 March 2012
4,274
1,143
-#
5,417
(Rs. in lakhs)
Year ended
31 March 2011
3,094
831
1
3,926
Year ended
31 March 2012
(Rs. in lakhs)
Year ended
31 March 2011
33.
Expenditure and earnings in foreign currency
a. Expenditure in foreign currency
Particulars
Travelling
Software license fees
Sales and marketing
Others
b.
19
40
39
17
19
31
5
98
72
Year ended
31 March 2012
564
177
741
Year ended
31 March 2011
527
261
788
Earnings in foreign currency
Particulars
Exports on F.O.B basis
Service income
34. Loans and advances include dues from Managing Director of the Company Rs. Nil (previous year Rs. 2 lakhs).
35. Taxation
The Company has significant unabsorbed depreciation. In view of the absence of virtual certainty of realisation of
carried forward tax losses and unabsorbed depreciation allowance, deferred tax assets are recognised only to the
extent of deferred tax liabilities.
The major components of deferred tax assets and liabilities are as follows:
(Rs. in lakhs)
As At
As At
Particulars
31 March 2012
31 March 2011
Deferred tax liabilities
Depreciation
43
55
Total deferred tax liability
43
55
Deferred tax assets
Gratuity
Leave encashment
Provision for doubtful debts and advances
Provision for warranty
Provision for sales returns
Provision for litigations
Disallowance under section 40(a) of the Income tax Act, 1961
Carried forward depreciation
Total deferred tax asset
Deferred tax asset recognised
(to the extent of deferred tax liability recognised above)
Net deferred tax asset/(liability)
49
50
45
141
23
70
14
6
640
989
44
42
105
31
59
1,583
1,864
43
Nil
55
Nil
36. The Company has taken land and building, office premises, showrooms, other business premises and residential
accommodation for some of its employees under operating lease arrangements, with an option of renewal at the end of
the lease term and escalation clause in some of the cases. Lease payments charged during the year to the Statement of
Profit and Loss aggregate Rs. 309 lakhs (previous year Rs. 296 lakhs). The future minimum lease payments under noncancellable operating leases are as follows:
(Rs. in lakhs)
As at
As at
Future lease payments due
31 March 2012
31 March 2011
Within one year
200
224
Later than one year and not later than five years
61
256
Total
261
480
37. The Company has given certain items of plant and machinery on operating lease, with an option of renewal at the end
of the lease term. However, the lease agreements entered into with the lessees do not provide for any escalation. Lease
rentals recognised during the year in the Statement of Profit and Loss account amount to Rs.10 lakhs (previous year Rs.
9 lakhs). The future lease payments receivable under non-cancellable operating leases are as follows:
As at
31 March 2012
4
4
Future lease payments receivable
Within one year
Later than one year and not later than five years
Total
(Rs. in lakhs)
As at
31 March 2011
5
4
9
38. a. Provision for warranties has been recognised for expected warranty claims on products sold during the year. The
provision has been created based on estimates and past trend. Following is the movement of the provision during
the year:
(Rs. in lakhs)
Year ended
Year ended
Particulars
31 March 2012
31 March 2011
Opening provision
96
128
Add: Provision for the year
157
122
Less: Utilised/reversal during the year
(184)
(154)
Closing provision
69
96
b. Provision for sales returns has been created for estimated loss of margin on expected sales returns in future period
against products sold during the year. The provision has been created based on management’s estimates and past
trends. Following is the movement in the provision during the year:
(Rs. in lakhs)
Year ended
Year ended
Particulars
31 March 2012
31 March 2011
Opening provision
182
149
34
42
(9)
Closing provision
216
182
c. Provision for litigations has been recognised for various litigations with the tax authorities. Although the Company
is contesting the cases at the relevant forum, the management believes that the outflow of resources embodying
economic benefits is probable and has accordingly, created a provision towards the obligations that may arise. The
table below gives information about movement in the provision for litigations:
(Rs. in lakhs)
Year ended
Year ended
Particulars
31 March 2012
31 March 2011
Opening provision
31
31
12
Closing provision
43
31
50
39. Segment information
The Company’s business segment comprises:
- Watches: Manufacturing and trading of watches;
- Others: Providing IT and finance related back office support to other group companies.
Segment revenue in the geographical segments considered for disclosure are as follows:
- Revenues within India (Domestic) includes sale of watches and spares to consumers located within India; and
- Revenues outside India (Overseas) includes sale of watches manufactured in India and service income earned from
customers located outside India.
Segments have been identified in line with the Accounting Standard 17 on “Segment Reporting” notified by the
Companies (Accounting Standards) Rules, 2006, taking into account the nature of products and services, the risks and
returns, the organisation structure and the internal financial reporting system.
Secondary segment reporting is performed on the basis of the geographical segments.
Primary segment reporting (by business segment):
(Rs. in lakhs)
Watches
Others
Total
2011-12
2010-11
2011-12
2010-11
2011-12
2010-11
Segment revenues
External sales (gross)
18,356
17,248
177
261
18,533
17,509
Excise duty
(235)
(252)
(235)
(252)
External sales (net)
18,121
16,996
177
261
18,298
17,257
Other business related income
83
62
83
62
Total revenue
18,204
17,058
177
261
18,381
17,319
Results
Segment results
Unallocated income
Unallocated expenses
Profit before interest and tax
Interest expense
Interest income
Profit before tax
Income taxes
- Minimum alternate tax
Net profit
Other information
Assets
Segment assets
Unallocated corporate assets
Total assets
1,214
1,845
23
18
1,214
1,845
23
18
1,214
1,845
23
18
15,985
12,611
388
142
1,237
(533)
704
(109)
10
605
1,863
32
(177)
1,718
-#
40
1,758
152
453
357
1,401
16,373
484
16,857
12,753
1,876
14,629
(Rs. in lakhs)
Watches
2011-12
2010-11
Liabilities
Segment liabilities
Unallocated corporate liabilities
Share capital (including share
premium amount and balance in
Statement of Profit and Loss)
Total liabilities
8,406
6,473
51
Others
2011-12
2010-11
13
13
Total
2011-12
2010-11
8,419
1,195
6,486
1,034
7,243
16,857
7,109
14,629
Watches
2011-12
2010-11
Others
Capital expenditure
Unallocated capital expenditure
Total capital expenditure
304
Others
2011-12
2010-11
188
Depreciation
157
128
Unallocated depreciation
Total depreciation
Secondary segment reporting (by geographical location of customer):
Total
2011-12
2010-11
-
-
304
39
343
188
28
216
4
6
161
36
197
134
35
169
(Rs. in lakhs)
India
2011-12
2010-11
17,559
16,538
16,379
14,353
343
216
Outside India
2011-12
2010-11
822
781
478
276
-
Total
2011-12
2010-11
18,381
17,319
16,857
14,629
343
216
Particulars
2011-12
Change in defined benefit obligations during the year
Present value of obligation at beginning of the year
136
Service cost
20
Interest cost
14
Actuarial (gain)/loss
(9)
Past Service Cost
(1)
Benefit paid
(6)
Present value of obligation at end of the year
154
Present value of unfunded obligation and liability recognised in Balance Sheet
Present value of defined benefit obligation as at the end of the year and liability
recognised in the Balance Sheet
154
2010-11
Segment revenue
Segment assets
Capital expenditure
Segment accounting policies
Besides the normal accounting policies followed as described in note 2, segment revenues, results, assets and liabilities
include the respective amounts directly identified to each of the segments and amounts allocated on a reasonable basis. The
description of segment assets and liabilities and the accounting policies in relation to segment accounting are as under:
a) Segment assets and liabilities
Segment assets include all operating assets used by a segment and consist principally of fixed assets, capital work in
progress, current assets and loans and advances. Segment liabilities include all operating liabilities in respect of a
segment and consist principally of creditors and accrued liabilities. Segment liabilities do not include share capital,
reserves, current tax and deferred tax liability. Segment assets do not include advance tax, deferred tax asset and fixed
deposits.
b) Segment revenue and expenses
Segment revenue and expenses are directly attributable to the segment and have been allocated to various segments on
the basis of specific identification. However, segment revenue and expenses do not include interest and other income/
expense in respect of non segmental activities.
40. Employee benefits
The Company primarily provide the following benefits to its employees:
(a) Gratuity
(b) Provident fund
(i) The amount recognised as an expense under defined contribution plans for employer contribution Rs. 118 lakhs
(previous year Rs. 100 lakhs).
(ii) The details of employee benefits with regard to provision/charge for the year on account of gratuity, which is in
the nature of an unfunded defined benefit are as under:
(Rs. in lakhs)
52
86
13
8
2
31
(4)
136
136
(Rs. in lakhs)
Particulars
Net liability is bifurcated as follows:
Current
Non Current
2011-12
2010-11
7
147
3
133
20
14
(9)
(1)
24
13
8
2
31
54
8.70%
8.70%
8.30%
8.30%
10%
8%
10%
8%
Gratuity cost recognised in the statement of profit and loss for the year
Current service cost
Interest cost
Actuarial (gain)/loss
Past service costs
Net gratuity cost
Assumptions
Discount rate
- For Timex Global Services
- Others
Expected rate of salary increase
- For Timex Global Services
- Others
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotions
and other relevant factors. Discount rate is based on market yields prevailing on government securities for the estimated
term of the obligations.
Demographic assumptions:
Particulars
As at31
March 2012
As at31
March 2011
Retirement age
Mortality table
58 years
LIC (1994-96)
58 years
LIC (1994-96)
Experience Adjustments:
(Rs. in lakhs)
Particulars
31 March
2008
31March
2009
31 March
2010
71
(7)
79
6
86
(12)
Defined Benefit obligation at the end of the year
Experience adjustments on plan liabilities
31 March 31March
2011
2012
136
2
154
1
The Company has an approved provident fund for its own employees, which is exempt from the Income tax Act 1961. In order
to comply with the provisions of the Act, the Company matches the interest declared by Regional Provident Fund (RPFC) to
its own subscribers. To the extent that the actual interest earned by the Company’s private fund falls short of the rate
declared by RPFC is met by the Company. The benefit valued is the interest shortfall, if any, for future years on the provident
fund balances of the employees.
The Defined Benefit Obligation of interest rate guarantee on exempt provident fund in respect of the employees of the
Company as at 31 March 2012 works out to Rs. Nil. The balance in the surplus account of the provident fund is Rs. 85 lakhs
and hence the net liability which needs to be provided for in the books of accounts of the Company is Rs. Nil.
Other long term benefits:
The amount recognised in the Statement of Profit and Loss in respect of compensated absences is Rs. 23 lakhs (previous
year Rs. 40 lakhs).
53
41. The Company’s foreign currency exposure on account of payables/ receivables not hedged is as follows:
(Rs. in lakhs)
Particulars
As at 31 March 2012
As at 31 March 2011
(in original
currency)
(in Rupees)
(in original
currency)
(in Rupees)
94
29
8
-
4,900
20
55
-
77
-#
7
-#
3,474
14
43
18
9
-
468
-
6
-#
265
15
Payables
- USD
- EURO
- HKD
- CHF
Receivables
- USD
- CHF
42. Amount remitted during the year ended 31 March 2012 in foreign currency on account of dividend was Rs. 274 lakhs
(previous year Rs. 274 lakhs).
Non Resident shareholders
(numbers)
One
Number of shares on which
dividend was due
41,100,000
Year to which dividend relates
2010-2011
43. The Company has established a comprehensive system of maintenance of information and documents as required by
the transfer pricing regulation under sections 92-92F of the Income-Tax Act, 1961. Since the law requires existence of
such information and documentation to be contemporaneous in nature, the Company continuously updates its
documentation for the international transactions entered into with the associated enterprises during the financial year
and expects such records to be in existence latest by such date as required under law. The management is of the opinion
that its international transactions are at arms length so that the aforesaid legislation will not have any impact on the
financial statements, particularly on the amount of tax expense and that of provision for taxation.
44. Managerial remuneration of Rs. 7 lakhs provided by the Company in the current year is in excess of the limits specified
in the relevant provisions of the Companies Act, 1956 and the amount approved by the Central Government. Further, we
are informed that as required by the relevant provisions of the Act, the Company is taking necessary steps to seek
approval from the Central Government for excess remuneration paid.
45. Till the financial year ended 31 March 2011, the Company was using pre-revised Schedule VI to the Companies Act,
1956, for preparation and presentation of its financial statements. During the year ended 31 March 2012, the revised
Schedule VI notified under the Companies Act, 1956, has become applicable to the company. The company has reclassified
previous year figures to conform to this year’s classification. The adoption of Revised Schedule VI for previous year
figures does not impact recognition and measurement principles followed for preparation of financial statements.
For B S R & Co.
Rakesh Dewan
Partner
Place: Gurgaon
Date: 31 May 2012
Kapil Kapoor
Chairman
Place : Noida
Date: 31 May 2012
V D Wadhwa
Managing Director
Place : Noida
Date: 31 May 2012
54
Shilpa Verma
Company Secretary
Amit Jain
Head Accounts
Place : Noida
Date: 31 May 2012
Place : Noida
Date: 31 May 2012
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Name & Joint Name s : ………………………………………………………………………………....................
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Address:…………………….........………………………………………………………………………..............…
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DPID. : …………………………………………….……………………………………………………….................
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Client ID :………………………………………………………………………………………………….................
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Folio No.:………………………………………………………………………………………………….................
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e-mail id for registration under “________________________________”.
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Note : In case you hold shares in demat mode, kindly get your email id updated with the depository
participant where you are maintaining the demat account
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Members are requested to send this Business Reply Form to the address given overleaf.
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INDIA

Annual Report-FY 2011-12

Transcription

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