ACKNOWLEDGEMENT

History

Titan Industries is the world's fifth largest and India's leading manufacturer of watches. The company has manufactured more than a 100 million watches till date; and has a customer base of over 80 million. The umbrella brand Titan is one of India's leading watch brands that brought about a paradigm shift in the Indian watch market, offering quartz technology with international styling. The brand Titan is committed to offering its consumers watches that represent the compass of their imagination. Titan's customers are therefore consistently introduced to exciting new collections, which connect, with various facets of their deeprooted yearnings for self-expression. The new brand philosophy of Titan, encapsulated in the words "Be More", touches this as well as all other aspects of the brand. The Titan brand architecture comprises several collection and subbrands, each of which is a leader in its segment. Notable among them are: Titan Edge The world's slimmest watch which stands for the philosophy of "less is more"; Titan Raga the feminine and sensuous accessory for today's woman, Nebula crafted in solid 18k gold and precious stones. Several other popular collections like Heritage, Aviator, Regalia, Octane & WWF also form a part of the Titan wardrobe. Today, the Titan portfolio has over 60% of the domestic market share in the organised watch market. The company has 247 exclusive showrooms christened World of Titan', making it amongst the largest chains in its category backed by 700 aftersalesservice centers. The company has a worldclass design studio that constantly invents new trends in wrist watches.

OBJECTIVE
The objective of the project is to know the financial planning and current financial performance of the company and to evaluate and analyse it. To know the financial progress and functioning of an organisation. To do the SWOT analysis To give recommendations

COMPANY PROFILE
Titan Industries is the organization that brought about a paradigm shift in the Indian watch market when it introduced its futuristic quartz technology, complemented by international styling. With India's two most recognized and loved brands Titan and Tanishq to its credit, Titan Industries is the fifth largest integrated watch manufacturer in the world. The success story began in 1984 with a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation. Presenting Titan quartz watches that sported an international look, Titan Industries transformed the Indian watch market. After Sonata, a value brand of functionally styled watches at affordable prices, Titan Industries reached out to the youth segment with Fastrack, its third brand, trendy and chic. The company has sold 100 million watches world over and manufactures 12 million watches every year. With a license for premium fashion watches of global brands, Titan Industries repeated its pioneering act and brought international brands into Indian market. Tommy Hilfiger, Hugo Boss and f c u k as well as the Swiss made watch Xylys owe their presence in Indian market to Titan Industries. Entering the largely fragmented Indian jewellery market with no known brands in 1995, Titan Industries launched Tanishq, Indias most trusted and fastest growing jewellery brand. Gold Plus, the later addition, focuses on the preferences of semiurban and rural India. Completing the jewellery portfolio is Zoya, the latest retail chain in the luxury segment.

Titan Industries has also made its foray into eyewear, launching Fastrack eyewear and sunglasses, as well as prescription eyewear. The organization has leveraged its manufacturing competencies and branched into precision engineering products and machine building. With over 624 retail stores across a carpet area of over 7,70,848 sq. ft. Titan Industries has Indias largest retail network. The company has over 300 exclusive World of Titan' showrooms and over 650 after-sales-service centers. Titan Industries is also the largest jewellery retailer in India with over 119 Tanishq boutiques and Zoya stores, over 28 Gold Plus stores and over 120 Titan Eye+ stores. The company has two exclusive design studios for watches and jewellery Backed by 4,934 employees, two exclusive design studios for watches and jewellery, 11 manufacturing units, and innumerable admirers world over, Titan Industries continues to grow and sets new standards for innovation and quality. The organization is all geared to repeat the Titan and Tanishq success story with each new offering.

Product Profile

Titan manufactures Watches, Jewellery, Eye wear & Precision Engineering

TIME PRODUCTS DIVISION

The Time Products division is where the Titan story began. Today, this division has placed Titan Industries among the worlds largest retail networks and earned the company the place of fifth largest integrated watch manufacturer in the world. With over 2350 employees spread over 3 business units in Bangalore, India, a manufacturing unit at Hosur and 3 assembly plants located in the north of India, the division continues to add world-class brands to the companys portfolio.

http://www.titan.co.in/business-divisions

JEWELLERY DIVISION
Tanishq Titans flagship line of jewellery is today a resounding success with discerning customers. Tanishq has performed exceedingly well and has set standards, in what could best be described as a largely unorganised and unscrupulous jewellery market. The growth of the brand has once again been a testament to our customer focus. Tanishq is today a hallmark of trust, an island of purity. It is a certified division under the ISO 9001:2000 Quality Management System Standards. Established to addresses the urban market, its growth has transformed Titan into the largest integrated jewellery manufacturer and outsourcing company of India. Tanishq is India's fastest growing jewellery brand with a premium range of jewellery, studded with diamonds or coloured gems in 18-karat gold, 22-karat pure gold and platinum jewellery. We are now one of India's largest speciality retailers and are transforming Indias jewellery market with a pan - India presence. Titan felt a need and created a means to offer elegant gold jewellery to smaller towns and rural markets. The recent launch of a retail initiative Goldplus caters to the need. Both brands contributed to over Rs.450 million USD, and are still flourishing. Truly a phenomenon in itself, Tanishq is our pioneering Indian brand storming a market of over 300, 000 independent jewelers. The brand is evolving faster than the market and is either leading or closing gaps between competitors in urban markets where we have a presence. The trust connotations that the Tata - Titan association evokes, never fails to attract increasing numbers of jewellery seekers to the fledgling designer brand. Titan ensures that they are spoilt for choice, transparency and a great shopping experience with Tanishq, the jewel of its crown. Tanishq is a trustworthy, popular jewellery brand from Indias largest integrated jewellery manufacturer. Zoya, by Tanishq is a chain of luxury jewellery boutiques which targets elite, discerning ladies seeking designer wear of international standards. Zoya is a bestin-class shopping experience. Stores offer exquisite, artistically styled masterpieces, studded in diamonds, apart from traditional, fusion polki and kundan jewelry. There are magnificent designs to choose from, all in ultrapremium luxury, these outlets showcase luxury unsurpassed. Zoya creations are world-class in terms of quality and have been crafted in India and abroad. It boasts the finest quality in India and is on par with the best in the world. Zoya stores are located in GK I, M Block - Delhi and Warden Road Mumbai

EYEWEAR DIVISION
Titan Eye+, the third major venture of consumer business by Titan Industries, launched into the organized eyewear segment in March 2007. Titan Eye Plus offers Indian consumers a world class optical retail experience through products which showcase the best in contemporary design & style, coupled with optical expertise guaranteed thanks to the technical collaboration with Sankara Nethralaya, Indias premier eye care institute. Benchmarked against the best in the world, Titan Eye Plus has redefined the way the organized optical retail market in India operates through pioneering concepts such as the open touch-feel-browse format, complete transparency in pricing, Style Sections , free insurance on spectacles etc. All of this is backed by the high levels of quality & trust that customers have come to expect from the House of Tata and Titan Industries Limited in particular.

PRECISION ENGINEERING DIVISION

Leveraging precision engineering core competencies from watch making, Titan initiated a PRECISION ENGINEERING DIVISION in 2002, catering to global majors across industry verticals like aerospace, automotive, oil & gas, engineering, hydraulics, solar and medical instruments. With an investment of over $10 million, the setup has four main business units

Precision Engineering Components & Sub-Assemblies (PECSA) Machine Building & Automation Solutions Tooling Solutions Electronic sub-assemblies

http://www.titanworld.com/collections

SWOT Analyses

Strengths
a)

The varied offerings to diverse segments with a clear cut positioning. The quality of watches is impressive.

b)
c)

Good retail network by WORLD OF TITAN. The company has now 283 stores of World of Titan spread over 122 cities across the country. Excellent customer service. The companys Service Philosophy: The 3 R's Repair the hurt feelings of the customer Repair the watch Repair the damage to TITAN reputation
d)

e) f) g)

International tie-ups with Hugo Boss and Tommy Hilfiger. Reported PAT has shown a good progress. The loans have decreased but risks seem to be increasing.

Weaknesses a) Waterproof watches not a part of its kitty. b) Rural India does not form a substantial part of customer base as the cost and design of the watches have been set according to its status and standard which may not be acceptable by rural people. Opportunities a) Under-penetrated market for watches as only 35% (approximately) of Indian population possesses watches. b) Watches positioned as a fashion wear rather than just utility products. c) Introducing waterproof watches. d) Rural market may be tapped by offering them sober designs and that too at an affordable price.

Threats From competitors a) Japanese- Citizen, Casio b) Swiss- Rolex, Omega, Rado, Tissot, Tag Heur, etc. c) Chinese watches d) Unorganized sector/ Grey market. e) Mobile phones and wall clocks are a substitute to watches. f) The fashion trend keeps on changing.

http://www.titancare.co.in/TS_Customer.aspx http://www.marketing91.com/swot-titan

Financial Statements of Titan Industries

Profit and Loss

Rs. CR. Period & months INCOME Net Operating Income EXPENSES Material Consumption Manufacturing Expenses Personel Expenses Selling Expenses Adminstrative Expenses Capitalised Expenses Cost of Sales Reported PBDIT Other Recuring Income Adjusted PBDIT Depreciation Other Write-offs Adjusted PBIT Finanical Expenses Adjusted PBT Tax Charges Adjusted PAT Non-recurring Items Other Non-cash Adjustments REPORTED PAT Equity Dividend Preference Dividend Retained Earnings . 2010/03 4,674.42 3,449.39 23.58 275.64 358.21 131.34 -0.04 4,238.12 436.30 11.78 448.08 60.08 0.00 388.00 63.52 324.48 68.08 256.40 -3.16 -2.92 250.32 2009/03 3,881.75 2,762.19 25.10 234.20 308.29 131.34 -0.09 3,535.06 346.68 5.26 351.94 41.76 0.00 310.18 68.46 241.73 60.68 181.05 -11.17 -10.92 158.96 2008/03 3,050.85 2,133.90 19.87 189.66 248.94 131.34 -0.02 2,785.58 265.27 1.77 267.05 29.73 0.00 237.32 39.44 197.87 44.02 153.86 -6.16 2.57 150.27 35.51 0.00 239.65 2007/03 2,135.47 1,374.43 17.15 157.40 213.43 131.34 -0.52 1,949.86 185.61 7.75 193.36 25.59 0.00 167.77 33.07 134.70 37.32 97.38 -3.04 -0.20 94.33 22.19 0.39 145.22 2006/03 1,468.73 909.05 13.48 109.41 154.83 131.34 -0.89 1,320.73 148.00 31.71 155.15 19.66 0.00 135.49 31.71 103.78 12.34 91.45 -16.90 -0.93 73.62 13.32 2.72 84.95

APPROPRIATIONS 66.58 44.39 0.00 383.71 0.00 325.58 Balance Sheet

Rs. CR. Period & Months SOURCES OF FUNDS Owned Funds Equity Share Capital Share Application Money Preferential Share Capital Reserves & Surplus 44.39 0.00 0.00 679.99 44.39 0.00 0.00 506.85 44.39 0.00 0.00 391.78 44.39 0.00 0.00 283.06 42.28 0.00 40.00 150.30 2010/03 2009/03 2008/03 2007/03 2006/03

Loan Funds Secured Loans Unsecured Loans TOTAL USES OF FUNDS Fixed Assets Gross Block Accumulated Depreciation Less: Revaluation Reserve Net Block Capital Work-in-progress Investments Net Current Assets Current Assets, Loans & Advances Less: Current Liabilities & Provisions Total Net Current Assets Miscellaneous Expenses not written off TOTAL Number of Equity shares outstanding (Cr.) Bonus component in Equity Capital Notes: Book Value of Unquoted Investments Market Value of Quoted Investments Contingent liabilities 7.53 0.25 72.19 7.57 0.10 65.46 46.64 0.75 58.41 26.27 0.75 76.01 26.27 0.76 64.22 1,821.65 1,307.02 514.63 1,492.42 1,067.44 424.98 1,280.79 916.58 364.21 999.33 723.22 276.10 653.76 390.61 263.15 624.33 361.70 0.00 262.63 12.29 7.63 593.04 318.56 0.00 274.48 19.52 7.66 558.07 285.61 0.00 272.46 9.99 47.39 515.48 264.34 0.00 251.15 15.97 27.02 420.42 243.97 0.00 176.46 19.56 27.02 72.79 0.00 797.17 116.76 58.65 726.65 188.11 69.78 694.06 172.67 74.34 574.45 148.84 119.09 500.50

0.00 797.17 4.44 0.00

0.00 726.65 4.44 0.00

0.00 694.06 4.44 0.00

4.21 574.45 4.44 0.00

14.31 500.50 4.23 0.00

Profit and Loss ( In Crores)

HORIZONTAL ANALYSIS OF TITAN INDUSTRIES PROFIT AND LOSS STATEMENT

Period & months Ddddd INCOME Net Operating Income EXPENSES Material Consumption Manufacturing Expenses Personel Expenses Selling Expenses Adminstrative Expenses Cost of Sales Reported PBDIT Other Recuring Income Adjusted PBDIT Depreciation Other Write-offs Adjusted PBIT Finanical Expenses Adjusted PBT Tax Charges Adjusted PAT REPORTED PAT

2010/03 4,674.42 3,449.39 23.58 275.64 358.21 131.34 4,238.12 436.30 11.78 448.08 60.08 0.00 388.00 63.52 324.48 68.08 256.40 250.32

2009/03 3,881.75 2,762.19 25.10 234.20 308.29 131.34 3,535.06 346.68 5.26 351.94 41.76 0.00 310.18 68.46 241.73 60.68 181.05 158.96

Rupee Change 681.170 687.200 (1.520) 41.44 49.92 703.06 89.620 6.52 96.44 18.32 77.82 (4.94) 82.75 8.60 75.35 91.36

Percent Change 17.548 24.88 (6.05) 17.70 16.20 19.8 25.85 123.95 27.4 43.86 25.08 (7.21) 34.23 14.17 41.61 57.47

Material Consumption: The consumption of material has been increased by 24.88% which is a good thing for the company as there is more utilisation of raw material and hence, more production. Manufacturing Expenses: The manufacturing expenses have been decreased by 6.05 % which is a good thing for a company as expenses on manufacturing has been reduced.

Personel Expenses: these are the expenditure on the company itself which is not a good thing as it is not making any profit in return and should be decreased or constant. Cost of Sales: these have also been increased which indicates that more money is spent on advertisement etc

VERTICAL ANALYSIS OF THE BALANCE SHEET

2010 ASSETS Inventory Sundry Debtors Cash & Bank balance TOTAL CURRENT ASSETS Gross Block Investments Capital Work in Progress Accumulated Depreciation TOTAL ASSETS LIABILITIES
Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 44.39 44.39 0.00 0.00 679.99 724.38 116.76 0.00 72.79 797.17
1,340.33 93.61 61.72 --------------1,495.66 624.33 7.63 12.29 361.70 --------------2501.61

2009
1,202.69 106.22 54.69 -------------1,363.60 593.04 7.66 19.52 318.56 --------------2302.58

Common size- percents* 2010 2009 53.5 3 2 24 0 0 14 52 4 2 25 0 0 13

44.39 44.39 0.00 0.00 506.85 551.24 72.79 58.65 175.41 726.65

5 5 0 0

6 6 0 0

14 0 9

10 8 24

For the year 2010 Variable Cost= 3449 + 23.58 + 275.64 + 68.08 = 3816.69 Fixed Cost= 358.21 + 131.34 -0.04 + 60.08 + 63.52 + 3.16 + 2.92 = 667.11 Sales= 4674.42 + 11.78 = 4686.2 Contribution Margin = Sales Variable Cost = 4686.2 3816.69 = 869.51 Contribution Margin Percentage = Contribution Margin / Sales X 100 = 869.51/ 4686.2 X 100 = 18.55 % Break-even Point = Fixed Cost/ Contribution Margin Ratio = 0.76

For the year 2009

Variable Cost= 2,762.19+ 25.10+ 234.20+60.68 = 3082.17 Fixed Cost= 308.29+ 131.34+ 0.09+ 41.76 = 481.48 Sales= 3,881.75+ 5.26
= 3887.01

Contribution Margin = Sales Variable Cost = 3887.01-3082.17 = 804.04 Contribution Margin Percentage = Contribution Margin / Sales X 100 = 804.04/3887.01X100

= 20.68
Break-even Point = Fixed Cost/ Contribution Margin Ratio

= 0.59

Financial Leverage
Degree of Financial Leverage = Earning Before Interest and Taxes/ Earning Before Tax For the year 2009 = 340.77/321.32
= 1.060

For the year 2010= 444.92 /230.55

= 1.92

As, we notice that in year 2010 degree of financial leverage has been increased to 1.92 which indicates higher risk.

Operating Leverage= Contribution Margin/ Earning Before Interest and Taxes For year 2009= 804.04/340.77 =1144.81 For the year 2010= 869.51+444.92 = 1314.43

As we notice that Operating Leverage has increased to 1314.43, it means that there is a higher operating risk. Combined Leverage= Operating Leverage X Degree of Financial Leverage For year 2009= 1144.81 X 1.060 = 1213.50 For year 2010=1314.43 X 1.92 = 2523.70

As we notice that Combined Leverage has increased to 2523.70, it means that there is a higher risk.

Recommendations Titan Industries has shown 17.5% growth of net operating income which is a good thing. But looking at the other things it can be noticed that other expenses have been increased as compared to last year. The industry has well managed the liabilities and if we have a look at the investments that have been decreased instead of being increased. The company should make good investments in order to get profitable returns.