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Directors Report of Timex Group India Ltd.

Mar 31, 2017

To the Members of Timex Group India Limited

The Directors are pleased to present the Twenty-Ninth Annual Report and Audited Statement of Accounts for the ended 31st March 2017.

Rs. In Lakh

FINANCIAL RESULTS

2016-17

2015-16

Revenue from operations (including other income)

9,995

7338

Profit before Interest and Depreciation

1G5

(292)

Less: Interest

277

357

Less: Depreciation

2G9

278

Add: Exceptional item

-

-

Profit/ Loss for the year

(381)

(927)

The year 2016-17 was another year of improved operating performance, financial growth and new initiatives for Timex Group. The Revenue from Operations (including other income) during the financial year 2016-17 has increased by 5% over the previous year, and the loss for the year has reduced by 59% over the previous year. With the issuance Cumulative Redeemable Non-Convertible Preference Shares amounting to Rs. 3500 Lakh to the Holding Company, the net worth of the Company has become positive.

The growth has been driven by increased sales to all sales channels. Timex has been one of the few brands register in double digit growth consistently. The new products developed by the Company have been well accepted, not only in the domestic market but also in the international markets. The Company has received good orders from group companies globally.

During the year, the Company reinforced the American heritage of the brand by a high decibel TV advertising campaign, supported by digital and social media, PR and local promotions. The Timex Metropolitan collection heralded the advertising campaign for the year. This was followed by the in-movie placement and association with the Salman Khan blockbuster Sultan, which won rave reviews and created impact in India and abroad. The sales campaign for the festival season was supported by an impactful multimedia advertising campaign. Other licensed watch brands like Versus, Versace and Salvatore Ferragamo grew significantly, backed by in-store presence and selective advertising and PR campaigns. All these efforts resulted in creating more salience for Timex and licensed brands, expanding distribution and increased sales.

With continued focus on increasing operational efficiencies, better working capital management, increased supply chain capability and efficiency and cost control efforts resulted in improved performance metrics. Driving low cost manufacturing helped the Company become a leading supplier of Timex watches to other group companies across the World.

Employees continue to remain the Company’s most important assets. Several efforts were undertaken to improve employee capability, build greater engagement with the company and provide opportunities for growth. These resulted in industry leading benchmarks for attrition and performance.

The dealer, distributor, retail and institutional network partners showed greater commitment and support to which resulted in retail commitment, increased market share and positive share of mind.

Dividend

In view of the losses for the year ended March, 2017 and accumulated losses, the Board of Directors has not recommended any dividend for this year.

CHANGES IN CAPITAL STRUCTURE

The Authorized Share Capital of the Company was re-classified and now stands at Rs. 17,000 Lakh, divided into 9,000 Lakh Equity Shares of Re. 1- each and 800 Lakh preference shares of Rs. G/- each.

During the year, the Company issued and allotted 5% Cumulative Redeemable Non-Convertible Preference Share: amounting to Rs. 3,500 Lakh to its Holding Company i.e. Timex Group Luxury Watches B.V., Nederland for working capital requirements. Pursuant to the above allotment, the issued and paid-up share capital of the Company has increase to Rs. 8,619.5 Lakh, divided into 1009.5 Lakh Equity Shares of Re. 1- each and 761 Lakh Preference Shares 10/ Rs. each.

MANAGEMENT DISCUSSION AND ANALYSIS

INDIAN ECONOMY

Despite demonetization impact, the Indian economy has performed well during the year 2016-17 as compared to other countries. The World Bank expects Indian economic growth rate to be 7% during the financial year 2016-17. However, the International Monetary Fund expects the Indian economy to grow at 6.8% during this year due to the temporal disruptions caused by demonetization. The growth is expected to rebound quickly to 7.2% in 2017-18. Tailwinds from favourable monsoon, low oil prices and continued progress in resolving supply-side bottlenecks, as well as robust consumer confidence, will support near-term growth and ease cash shortages.

Goods and Services Tax (GST) is expected to be introduced from 1st July, 2017. Industry will have to reorganize its business as the country switches to the GST regime, which will bring more small companies into the tax net. While low GST may lead to a decline in inflation, the transition to the new GST system will affect economic growth in the short term even though it will benefit both industry and the government in the medium term.

OVERVIEW OF WATCH INDUSTRY

Watch industry has seen sluggish growth due to lower than expected performance of bigger players. The luxury watch market has been affected on account of demonetization and PAN card disclosure for purchase of watches of value above Rs. 200,000 New introductions of luxury watch brands has seen innovative distribution practices and realignment of market share within the industry.

Future of watch industry looks bright as the economy is expected to regain its consumption momentum. This will be function of new brand introductions and wearable technology supporting larger customer needs. Improved distribution in 3 and 4 markets is helping the Industry to acquire new customers. This is supported by the increased of online e-commerce players who offer deep distribution and significant discounts to create greater excitement for the watch category.

The young customer who is driven by fashion considerations is increasingly buying watches which suit their lifestyles Supported by large format department store, boutique and mall led distribution and larger advertising spends, this category has shown resilience and is the fastest growing segment in the watch industry.

GROWTH DRIVERS OF THE COMPANY

The Company has put in place plans for achieving sustained growth, keeping in view the fast-changing business environment and the growing competition. The industry is growing at a modest pace while the Company’s growth is faster. The Company is focused at maintaining this growth while ensuring returns for all its stakeholders. The Comp has identified the key growth drivers as:

Strengthening the Product portfolio:

The Company believes that a good product is the most important way to approach, acquire and retain the consumer. T( this end, the Company has adopted two-pronged approach viz. refreshing the existing product portfolio by introduction of new products in terms of design, technology and innovation that match the ever-changing taste and trends of the consumer and launch of new products for the fashion oriented consumer segment.

The new products launched by the Company have been well appreciated, both in the Indian and international markets. Brand Versus from the house of Versace, priced between Rs.120000, has been doing well among the fashion conscious consumer segments. The Company has also been introducing international products in the Indian market to offer more choice to the consumer. The Company has recently launched IQ Move in the connected style segment which combines the benefits of an activity tracker with beauty of a traditional analog quartz watch. In the past, the Company had also introduced activity trackers for the tech savvy consumer, such as the Runx 20 and Metropolitan . The Company believes that the market for the wearable products is growing and has drawn up a robust and exciting technology to cater to this segment.

Enhancing the distribution footprint and increasing points of Sale:

The Company continues to focus on growth by further increasing its distribution footprint. Special focus on Tier 2 and 3 markets has yielded better than expected results. Franchisee led expansion will increase Showrooms in their 2 cities. The Company is investing significantly in retail fixtures and visual merchandising to improve retail presence and increase consumer shopping experience. Increased brand perception amongst consumers has helped increase market share in large retail formats like department stores.

E-commerce business has seen exponential growth. In order to strengthen this business, the Company plans to introduce exclusive products for the E-commerce channel. The Company is also working on an channel strategy to unlock greater value.

Increasing Marketing initiatives:

The Company plans to introduce new marketing campaigns in 207 to become the preferred choice of consumers. The company will continue to use traditional media like print & TV and also leverage new media vehicles to smartly connect with the core target group.

The in-store visibility of Timex Group brands is a key focus area to help improve brand presence. The Company will innovative consumer campaigns, without diluting brands perceived value.

Strengthening our manufacturing capability:

The Company continues to improve upon domestic manufacturing capability as part of the Make in India effort of the Government. Improved productivity and efficiency have resulted in higher production of watches per day. The Company has been able to export watches to other Group companies. There is growing recognition within the Global Supply Chain that India can become an important supplier in the future and efforts to support this drive are being undertaken.

Internal and External stakeholder support:

Employees have supported the building of the Company and will continue to drive its performance improvement. Suppliers and trade and institutional sales partners are committed to building this Company further.

Managing Regulatory changes:

The Company has taken steps to maintain business continuity despite introduction of new regulations like GST an transition from Excise exemption at Baddi. Vendors have been educated on documentation requirements and trained in new laws such as GST to ensure that there is no disruption in supplies. Key vendors have also been taken to Cebu, Philippine a key manufacturing centre for Timex Global, to sensitize them to global manufacturing and supply chain practices.

OPPORTUNITIES AND CHALLENGES

The Indian watch industry has strong growth potential which is substantiated by the following factors:

1 With increasing disposable income and purchasing power of Indian population, the watch industry is expected to grow at a higher rate. With the increase in number of millionaires and high net worth individuals (HNI), the demand f consumer products including watches is expected to increase.

2. The watch industry in India has potential to grow, with only 35% of our population wearing wristwatches and only 5% of them owning multiple watches.

3. Premium priced and Fashion categories are the fastest growing categories, which are expected to help the Company achieve better prices and product margins.

4. Online and Omni channels will fuel the growth of watch industry

5. Fitness trackers and Smart watches, though at a nascent stage in development, will continue to aid the growth of the Watch industry.

6. Timex is one of the few brands registering consistent double digit revenue growth, and this is expected to continue.

7. Entry of new brands including international brands, and their marketing efforts are attracting new customers to the Industry.

The Excise benefit from the Company’s Baddi plant has ceased in May 2017. The Company has taken efforts to maintain its margins despite this change. The proposed GST rates can also impact prices adversely, but the Company is taking to ensure that margins will not be affected despite these changes.

RISKS & THREATS

The Company has set up a well-defined risk management mechanism to identify and assess the potential risks and determine the processes to mitigate the same. A Committee comprising of senior management executives has been constituted to periodically review and assess the key risks in consultation with the functional managers. Detailed exercise has been carried out to identify, evaluate, manage and monitor the potential risks to the operations of the Company. T! Board periodically reviews the risks and suggests steps to be taken to mitigate the same.

The Company has recognized the below specific key risks -

- Financial Risk

The Company has increased capital by issuing Cumulative Redeemable Non-Convertible Preference Shares amounting to Rs. 3,500 Lakh to the Parent Company, thereby addressing the concern of negative net worth.

The Company has taken various measures to improve its operational efficiency and growth rate. As per the business plans of the Company, the funding requirements of the company will be met through internal accruals, borrowings from Bank and affiliate Companies. With growth in revenue, the Company is confident of achieving breakeven.

While the Indian Rupee has strengthened against the US Dollar, and a bulk of the Company’s imports designated US Dollars, there has been an improvement in product margins. Continued efforts to indigenize will help protect the Company from any adverse exchange rate fluctuations.

- External Environment

Wearable technology is the buzzword in watch industry. Mobile handset manufacturers and technology companies are investing on wearable technology. Wellness companies also are launching bands which are an extension to their health apps. Technology companies are tying up with various watch manufacturers to integrate technology with watches. The Company believes that continuous innovation is key to success. Timex Group Global Design Centre located in Milan, and the Global Supply Chain organization supports the Company to create differentiation and bring cutting edge technology and designs to a highly competitive marketplace. By thinking and acting both locally and globally, we are constantly challenging ourselves to look at the future.

- Internal Environment

Dependency on China, which is a procurement hub for raw material, may get affected due to external environment. To combat this risk, the Company is integrating with Timex Global supply chain to develop alternate vendors.

- Other Risks

Risks relating to retention of key personnel, compliance to various laws, contractual obligations, risks relating to the general macroeconomic environment including risks associated with political and legal changes, changes in tax structures, commercial rules & laws, information technology, business continuity and disaster management are analyzed regularly and measures taken to mitigate the same.

DIRECTORS

Composition

The Company has eight (8) Directors consisting of four (4) Independent Directors, three (3) Non-Executive Director and One (1) Managing Director.

Appointment/ Resignation from the Board of Directors/Key Managerial Personnel

Mr. David Thomas Payne was appointed as a Director by the shareholders in their annual general meeting held o August 3, 2016.

In accordance with Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Anil Malhotra retires by rotation as a Director of the Company, and being eligible, offers himself for re-appointment. The Directors recommend his re-appointment.

There was no change in the Key Managerial Personnel during the year.

Declaration by the Independent Directors

The Company has received declarations from all Independent Directors of the Company confirming that they continue to meet the criteria of independence, as prescribed under Section1 49(6) of the Companies Act, 2013 and Regulation B(l) (b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 The Independent Directors have confirmed that they have complied with the Company’s code of conduct.

Number of meetings of Board of Directors

The Board met six times during the financial year 2016-2017 on 26th May, 2016, 1st July, 2016;, 3rdAugust, 2016, 24th August, 2016, 10th November, 2016 and 2nd February, 2017. Directors attending the meeting actively participated in the deliberations at these meetings. The intervening gap between any two meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. More details of the Board meetings have been provided in the Report on Corporate Governance.

COMMITTEES OF THE BOARD

The Company has constituted various Committees pursuant to the requirements of SEBI (Listing Obligations a Disclosure Requirements) Regulations, 2015 and Companies Act, 2013. Presently, the Company has following Committees of the Board in place-1 Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

4. Corporate Social Responsibility Committee

5. Share Allotment and Transfer Committee

The details with respect to the composition, powers, roles, terms of reference, etc. of these Committees are given in t Report on Corporate Governance )of the Company which forms part of this Annual Report.

REMUNERATION POLICY

The Policy on Directors appointment and remuneration, including criteria for determining qualifications, positive attributes and independence of the Directors and other matters provided under sub-section (3) of Section 78 of the Companies Act, 2013 adopted by the Board, is attached Annexure A and forms an integral part of this Report.

EMPLOYEE REMUNERATION

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report, which forms part of this Report.

Disclosures relating to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report, which forms part of this Report.

Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection a the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

FORMAL ANNUAL EVALUATION

The Board has carried out performance evaluation of itself, its Committees and each of the Directors (without participate of the concerned director).Independent Directors collectively evaluated the Boards performance, performance of the Chairman and other non-independent Directors. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors.

The performance evaluation concluded on the note that each of the individual directors, Committees and the Board as a whole, were performing efficiently and effectively and shared a common vision to turning organization goals into reality.

VIGIL MECHANISM

The Whistle Blower Policy of the Company provides a mechanism for employees / Board Members and others t( raise good faith concerns about violation of any applicable law/ Code of Conduct of the Company, gross wastage or misappropriation of funds, substantial or specific danger to public health and safety, abuse of authority or unethical behavior and to protect the individuals who take such actions from retaliation or any threat of retaliation and al provides for direct access to the Chairman of the Audit Committee, in exceptional cases. The functioning of the Vig mechanism is reviewed by the Audit Committee from time to time.

The Whistle Blowers are not denied access to the Audit Committee of the Board. The details of the Whistle Blower are given in the Report on Corporate Governance and are also available on the website of the Company at the following link: www.timexindia.com.

POLICY ON PREVENTION OF INSIDER TRADING

In terms of the SEBI (Prohibition of Insider Trading) Regulations, 205, the Company has framed a) Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders and b) Code of Fair Disclosure The Company’s Code, inter alia, prohibits dealing in the 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.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

There were no loans, guarantees or investments made by the Company under Section B6 of the Companies Act, 20B during the year under review and hence the said provision is not applicable.

RELATED PARTY TRANSACTIONS

The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the Rules there under and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This Policy has been uploaded on the website of the Companyvatw.timexindia.com.

All related party transactions entered into during the year under review were in the ordinary course of business, arms length basis and were in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. For transactions which are foreseen and repetitive in nature, omnibus approval of Audit Committee is obtained at the beginning of the financial year. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the value and terms and conditions of the transactions.

The Company has issued preference shares to Timex Group Luxury Watches B.V., its Holding Company, at arms-lengt terms and conditions. As this transaction does not fall in the ambit of Section 188(l) of the Companies Act, 2013 and there is no other material related party transaction, the disclosure required under section 134(3) (h) of the Companies A 2013 in Form AOC-2 is not applicable to the Company. The details of the related party transactions entered during the year are given in the financial statements of the Company.

FINANCE

The Company has not invited nor does it hold any fixed deposits. There were no overdue / unclaimed deposits as on 31st March 2017.

During the year under review, the Company made payment aggregating to Rs. 4356 Lakh by way of Central, State and local sales taxes and duties as against Rs. 4,555 Lakh in the previous year.

SEGMENT WISE REPORTING

The segment wise information for watches and other activities are provided in the Notes to the Accounts.

LISTING

The Equity Shares of the Company are listed on the BSE Ltd. The annual listing fee for the year 2017- 2018 has been paid to the Exchange.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has put in place adequate internal control systems, commensurate with size, scale and complexity of its operations, to ensure compliance with policies and procedures. The Company has also adopted policies and procedures for ensuring the orderly and efficient conduct of its business, safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

The internal control mechanism comprises a well-defined organization, which undertakes time bound audits and reports its findings to the Audit Committee, documents policy guidelines and determines authority levels and processes.

With a view to ensure and review the effectiveness and implementation of the systems and operations, the Audit Committee regularly reviews them. The Internal Auditors and Statutory Auditors regularly attend Audit Committee meetings a convey their views on the adequacy of internal control systems as well as financial disclosures. The Audit Committee is briefed about the corrective actions taken by the management on the audit observations. The Audit scope is regular reviewed by the Audit Committee for enhancement/ modification of scope and coverage of specific areas.

The Company has implemented internal financial controls with the help of M/s Deloitte Haskins & Sells LLP. These systems have also been checked by M/s BSR & Co., LLP, the Statutory Auditors.

AUDITORS AND AUDITORS’ REPORT

a. Statutory Auditors

The Statutory Auditors of the Company, M/s BSR & Co. LLP, Chartered Accountants, hold office until the conclusion of the ensuing Annual General Meeting of the Company. In terms of the provisions of the Companies Act, 2013 relating to rotation of Auditors, the Company is required to appoint a different firm of Chartered Accountants as Statutory Auditors of the Company.

The Board of Directors has, in its meeting held on May 25, 2017, on the recommendations of the Audit Committee, recommended to the shareholders the appointment of M/s Deloitte Haskins & Sells LLP, Chartered Accountant (Firm Registration No. 1173 66W/W-10018), as the Statutory Auditors of the Company for a term of 5 consecutive years from the conclusion of ‘Annual General Meeting till the conclusion of Annual General Meeting. The Company has received their written consent and a certificate that they satisfy the criteria provided under section 141 of the Act and that the appointment, if made, shall be in accordance with the applicable provisions of the Act and the rules framed there under.

During the year under review, the Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act. The Report given by M/s BSR & Co. LLP, Statutory Auditors on the financial statement of the Company for the year 2016-17 is part of the Annual Report. There has been no qualification, reservation or adverse remark or disclaimer in their Report.

b. Secretarial Auditors and Secretarial Audit Report

The Secretarial Audit was carried out by M/s. NKJ and Associates, Company Secretaries (Certificate of Practice No. 5233) for the financial year 2016-17. The Report given by the Secretarial Auditors is annexed as Annexure B and forms integral part of this Report. There has been no qualification, reservation or adverse remark or disclaimer in their Report. During the year under review, the Secretarial Auditors had not reported any matter under Section 143 (12) c the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act.

In terms of Section 2014 of the Companies Act 2013, the Audit Committee recommended and the Board of Directors appointed M/s.NKJ & Associates, Company Secretaries (Certificate of Practice No. 5233) as the Secretarial Auditors of the Company in relation to the financial year 2017-18. The Company has received their consent for appointment.

HUMAN RESOURCES

The Company considers its employees as most valuable resource and ensures strategic alignment of Human Resource practices to business priorities and objectives. Our constant Endeavour is to invest in people and processes to improve human capital for the organization and service delivery to our customers. Attracting, developing and retaining the talent will continue to be a key strategic initiative and the organization continues its undivided attention towards the Given growth plans of the Company, an important strategic focus of the Company is to continue to not only nurture : human capital, but also proactively focus on preparing all employees for the challenges of the future. The Company strive to provide a conducive and competitive work environment to help the employees excel and create new benchmarks of productivity, efficiency and customer delight.

The Company comprises a small team of professionals, who are result oriented, committed and loyal. As March 23rd 2017 the Company had 367 employees on its rolls.

The Company has reinforced a culture of performance and meritocracy by deploying transparent and agreed upon smart KRAs and KPIs. These KRAs and KPIs cascade from the Company’s growth strategy and plans. The Company has implemented an online performance management system i.e. Workday ’ for setting up of goals and objectives of all employees and thereby tracking it on a regular basis. Appraisals are also completed based on these goals and objectives filled by the employees. The Company has also introduced a rewards and recognition policy for all employees i.e. Employee of the Month Award.

Attracting and retaining bright talent and improvement in the quality of manpower at retail stores are identified as key challenge and being addressed accordingly through product training and retention initiatives.

MATERIAL CHANGES

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year of the Company i.e. 31st March, 2017 and the date of Directors )Report i.e.20th May, 2017.

Further, there were no significant or material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future.

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return of the Company is annexed and forms an integral part of this Report.

CORPORATE GOVERNANCE

As per Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 205, 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.

CONSERVATION OF ENERGY

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo, as required to be disclosed under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is provided in Annexure D to this Report forming an integral part of this report.

DEMATERIALISATION

The equity shares of the Company are being compulsorily traded in dematerialized form. As March 31st 2017, 26145 shareholders representing 97.18% of the Equity Share Capital are holding shares in dematerialized form.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the directors to the best of their knowledge and ability confirm that-

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) the directors have selected such accounting policies and applied 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 and loss of the company for that period;

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud a other irregularities;

(d) the directors have prepared the annual accounts on a going concern basis; and

(e) the directors have laid down proper internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(f) The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CAUTIONARY STATEMENT

Statements in the Board’s Report and the Management Discussion & Analysis Report describing the Company^ objectives, expectations or forecasts may be forward looking within the meaning of applicable laws. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company’s operations include global and domestic demand and supply conditions affecting selling prices, raw material availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation for the support and cooperation, which the Company continue to receive from its customers, the watch trade, the New Okhla Industrial Development Authority, the Governments Uttar Pradesh and Himachal Pradesh, the Banks / Financial Institutions and other stakeholders such as - shareholding customers and suppliers, among others, and its employees. The Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the Company’s success. The Directors look forward to their continued support in future.

For and on behalf of the Board of Directors

Sd/-

Place : Noida, U.P Colin Davis Arsenault

Date: May 25, 207 Chairman

DIN: 07156629


Mar 31, 2016

To the Members of Timex Group India Limited

The Directors are pleased to present the Twenty-eighth Annual Report and Audited Statement of Accounts for the year ended March 20)6.

Rs. in Lakh

FINANCIAL RESULTS

2015-16

2014-15

Revenue from operations (including other income)

7,338

4,243

Profit before Interest and Depreciation

(292)

(792)

Less: Interest

357

253

Less: Depreciation

278

224

Add: Exceptional item

-

171

Profit/ Loss for the year

(927)

(1098)

Fiscal 205-6 was a year of improved performance, recovery, consolidation and new explorations for Timex Group. The Revenue from Operations (including other income) has increased during the financial year 2015-16 by 22% over the previous year and the Loss for the year has reduced by 16% over the previous year.

The revenue growth is contributed by improvement in both traditional distribution channel and the new upcoming E-Commerc business. A good institutional order also helped. This financial year we have introduced a new brand Versus from the house of Versace, which is positioned at the fastest growing price segment of 10,000/- to 15,000/-. Versus watches are urban, youthful, dynamic and confident.

The Company is in line of its defined strategic direction of providing financial stability through rigorous management of credit facility, accounts receivables, inventory management, product margin management and cost control.

The Company has invested in the ERP package Oracle in its front end [order to sales] to help it make faster decisions and pro complete transparency and accountability.

Employees continue to be the most important assets and the Company continues to invest in their development and growth. Dividend

In view of the losses for the year ended 3tt March, 206 and accumulated losses, the Board of Directors has not recommended any dividend for this year.

MANAGEMENT DISCUSSION AND ANALYSIS INDIAN ECONOMY

The Indian economy has performed well during the year 205-6 as compared to other parts of the World. The World Bank expects the Indian economy’s growth rate at 7.5% during the financial year 2015-16. However, the International Monetary Fund expects the Indian economy to grow at 7.3% during this year. The GDP growth is driven by private consumption and low energy prices. Weak exports and delayed economic reforms weigh down the economy. The one significant upside possibility is a good monsoon. This would increase rural consumption and improve consumer sentiments.

OVERVIEW OF WATCH INDUSTRY

The watch industry has witnessed an average CAGR of 7-8% due to the factors including increasing disposable income; internet penetration, technologically advanced electronic gadgets and smart phones and tablets bringing in a new set of consumers into th fore; wearable technology and smart watches offering benefits such as ease of use, mobility and robust fitness-tracking acquiring new consumers across demography, increased spending from top e-commerce portals etc.

Amongst various segments, lifestyle & entry fashion segment is growing the fastest due to increasing aspiration to own brand timepieces as lifestyle accessory. Brands operating in this segment are increasing spends to improve brand visibility.

Luxury watch segment which was previously struggling for growth has taken a turn for the worse on account of the new manda'' PAN card disclosures for purchase above INR 2 Lakh. Poor retail has led to rethink of business model in India.

GROWTH DRIVERS OF THE COMPANY

The Company has well adapted itself to the changing dynamics of the watch industry owing to the increased consumption an disposable income, coming from Tier 2 cities. The Company has identified the key growth drivers as:

Product Offering:

The Company will protect and grow its existing consumer base by continuously refreshing the product portfolio, in terms design, technology and innovation to cater to the changing consumer taste and trends and offer the right ’value of the product to the consumers.

The Company is also increasing its consumer base by offering products for the growing fashion ’conscious consumer at the pric point of 10000/- to 15000/-. The Company has introduced ‘Versus ‘from the house of Versace to cater to this market.

In the past year, the Company has successfully introduced activity trackers for the tech savvy consumer, for example: the R 20 and Metropolitan^ Going forward the Company has a robust and exciting technology roadmap to cater to the growing markel for wearable products.

Strengthening Company’s traditional distribution channel and growing the E-Commerce channel:

The Company will grow by increasing its point of sales in the growing Tier 2 cities by strengthening its distribution in th markets. The Company is also investing in opening company owned showrooms in these markets. The Company ended the last fiscal year with 64 showrooms and is targeting to add 20 new showrooms this year. In the modern retail channel, the Company has grown with large format retailers and is making significant investments to improve its retail visibility.

The Company will continue to invest and grow in the E-commerce space along with all the key players in this space.

Increased Investment in Marketing:

In line with its strategic intent, the Company will be investing in improving its market share. The Company has defined its target market and will be communicating with them through television commercials and digital advertising. The objective is to be th preferred brand choice for consumers.

The Company plans to achieve double digit growth in the year ahead with investments in increasing brand pull and marks share.

OPPORTUNITIES AND CHALLENGES

The following factors show that there is a strong growth potential in the Indian watch industry:

1. Wrist watch penetration is under 35% in India.

2. Ownership of multiple watches is lagging at less than 5%.

3. Purchasing power of Indian population is increasing, thereby fuelling the growth of watch industry. With the increase number of millionaires and high net worth individuals (HNI), the demand for consumer products including watches i increasing.

4. Average selling price in fashion and lifestyle segment has been increasing continuously thereby improving the margins.

5. E-commerce has made the products more accessible to consumers. It ensures cost effective reach to consumers.

6. Increased number of brands including foreign brands and marketing activity is attracting consumers.

7. As a result of innovation and new technologies, advanced hi tech products are hitting the market and luring new customer Multipurpose products like wearables are an attraction as well as useful products.

The watch industry is expected to witness significant growth in future years and the Company with its wide array of brands and styles, ranging from Fashion to Classics and Sports, can take full advantage of these consumer trends by addressing their specific needs. The Company shall continue to invest in its product portfolio and strengthen the communication of its brand attributes

With constant product and marketing innovation becoming the need of the hour and most brands raising their game in agility a customer insight, these potent engagement initiatives from the house of Timex clearly signals the watch makers corporate inti to embrace the ongoing retail revolution.

RISKS & THREATS

The Company has in place a well defined Risk Management Policy and Risk Assessment and Minimization Committee comprising of senior management to periodically review and assess the key risks. A detailed exercise is carried out to identify, evaluating manage and monitor the potential risks to the strategy of the Company. The Board periodically reviews the risks and surge steps to be taken to mitigate the same.

Based on detailed review, the Company has recognized the below specific key risks relating to the Company-

- Financial Risk

The net worth of the Company has fully eroded with the accumulated losses sitting at Rs. 784 Lakh as at 31 March 206. However, the Company has taken various measures to improve its operational efficiency and growth trajectory. As per the business plans of the Company, the funding requirements of the company will be met through funds from operations, operational efficiency, bank borrowings, borrowing from affiliate Company and the proposed issuance of the preference shares. With the consistent double digit growth in revenue by increasing market share, the Company is confident of achieving breakeven soon.

Dollar is expected to be range bound from here on. However, any adverse movement in exchange rate can seriously impact th margin of the Company in the short and medium term. However, the Company is working towards localization of imported'' parts/ goods.

- External Environment

Various segments of the industry are focusing on wearable technology. Handset/IT/Telecom/CD companies as part of their convergence strategy are investing heavily on wearable technology & Watches are the primary device on which a majority of the investments are being made. Wellness companies also are launching bands which are an extension to their health app Technology companies are tying up with various watch manufactures to integrate handsets to provide unparalleled consume experience across walks of life.

Innovation is a key and to be profitable there has to be continuous improvement. Timex Group Global Design Centre located in Milan and also Global Supply Chain organization renders support to the business in India in terms of improved technology a styling of the products. Our global resources give Timex Group India a true advantage in a highly competitive marketplace By thinking and acting both locally and globally, we are constantly challenging ourselves to look at the future.

The Company has already forayed into wearable technology through Timex Ironman Move x2Q and Timex Ironman Run x20 in Q1 of FY 2015-2016 to cater to the current age of fitness enthusiasts and tech-savvy audience. The Company has also entered smart watch market through Metropolitan-h

III. Internal Environment

Other players in the industry are setting up their own manufacturing base. This may impact the economies of scale of w industry vendors and may lead to increase in the cost of procurement. To combat this risk, the Company is integrating with glc supply chain to develop alternate vendors.

IV. Other Risks

Other risks including the risks relating to retention of key personnel, compliance to various laws, contractual obligations, ri; relating to the general macroeconomic environment including risks associated with political and legal changes, changes in tax structures, and commercial rules & laws are analyzed and measures are taken to mitigate the same, if required.

KEY INITIATIVES BY TIMEX

The Company has laid down the growth strategy for the current year which includes the following key initiatives:

- The Company continues to invest in brand building to reposition Timex as an Authentic, Iconic, and American brand through advertising and marketing initiatives.

- With a view to bring consumers closer to the international trends, the Company has been introducing its international range of products. The Company will also focus on local product development to meet market specific requirements. New product launches, improved quality and service levels shall be the core focus.

The company has forayed into wearable technology with the successful launch of Ironman fitness tracker bands last year followed by successful launch of Metropolitan— this year.

- Offer value for money to the consumers and build solid brand perception by executing effective marketing.

The Company recently launched some the international best sellers in India and the Company has planned to launch its late exciting international collection for Indian consumers.

- City centric demand generation marketing campaigns and sometimes seasonal & regional sales led promo-off campaigns.

Use international imagery; focus on growing lifestyle of consumers. The company has increased investment on marketing; driving brand imagery through global best sellers and harping on truly the American connect.

- On the Channel segmentation front, e-commerce was the focused channel to reach-out to larger consumer base across cities.

Modern trade & showrooms drive imagery. Distribution lead mass markets will drive volumes and share.

The Companies visibility and sales are increasing on each channel, especially online & retail. The Company has planned to expand further to untapped segments.

- The Company has invested in the ERP package Oracle in front end [order to sales] to help make faster decisions and provide complete transparency and accountability.

DIRECTORS Composition

The Company has eight (8) Directors consisting of four (4) Independent Directors, three (3) Non Executive Directors and ( () Managing Director.

Appointment/ Resignation from the Board of Directors

Mr. David Thomas Payne was appointed as an additional director of the Company with effect from May 12, 206. He holds the office until the forthcoming Annual General meeting. The Company has received requisite notice pursuant to Section 160 of the Companies Act, 23B from a member proposing candidature of Mr. David Thomas Payne as the Director of the Company. Th Directors recommend his appointment as Director of the Company, liable to retire by rotation.

Ms. Sharmila Sahai has been re-appointed as the Managing Director of the Company for a term of two years with effect from November, 205 which has been approved by the shareholders through postal ballot on 5th April, 206.

Mr. Ryan Todd Roth resigned from the directorship with effect from 2ht March, 206.

Further, in accordance with Section 52 of the Companies Act, 20B and Articles of Association of the Company, Mr. Colin Davis Arsenault retires by rotation as a Director of the Company, and being eligible, offers himself for re-appointment. The Direct recommend his re-appointment.

Appointment / Resignation of Key Managerial Personnel

Mr. Dhiraj Kumar Maggo has been appointed as the General Manager - Legal & Company Secretary and Compliance Officer of the Company with effect from 30th March, 2016 in place of Ms. Shilpa Verma who resigned from this position with effect from 28th March, 206.

Declaration by the Independent Directors

Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 203 and the relevant rules.

Number of meetings of Board of Directors

The Board met five times during the financial year 2015-2016 on 21st May, 2015, 6th August, 2015, 3rd November, 2015, 4th February, 206 and 30th March, 206. Directors attending the meeting actively participated in the deliberations at these meetings. The intervening gap between any two meetings was within the period prescribed under the Companies Act, 203 and the SEB] (Listing Obligations and Disclosure Requirements) Regulations, 2015. More details of the Board meetings have been provided in the Report on Corporate Governance.

COMMITTEES OF THE BOARD

The Company has constituted various Committees pursuant to the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Companies Act, 2013. Presently, the Company has following Committees in place-1 Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

4. Share Transfer Committee

5. Corporate Social Responsibility Committee

The details with respect to the compositions, powers, roles, terms of reference, etc. of relevant Committees are given in Report on Corporate Governance ’of the Company which forms part of this Annual Report.

REMUNERATION POLICY

The Policy on Directors appointment and remuneration, including criteria for determining qualifications, positive attributes and independence of the Directors and other matters provided under sub-section (3) of Section 78 of the Companies Act, 203 adopted by the Board, is attached as Annexure A.

EMPLOYEE REMUNERATION

Statement pertaining to remuneration and other details as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5 () and (2) of Companies (Appointment and Remuneration of Managerial personnel) Rules, 204 is attached as Annexure B.

FORMAL ANNUAL EVALUATION

Nomination and Remuneration Committee of the Board had prepared draft parameterized feedback forms for evaluation of t Board, Board Committees, Directors and Chairman.

Independent Directors evaluated the Boards performance, performance of the Chairman and other non-independent Directors. The Board subsequently evaluated performance of the Board as a whole, the Committees and Independent Directors (without participation of the concerned director).

VIGIL MECHANISM

The Company has implemented a Whistle Blower Policy to provide a mechanism for employees / Board Members and others to raise good faith concerns about violation of any applicable law/ Code of Conduct of the Company, gross wastage or misappropriation of funds, substantial or specific danger to public health and safety, abuse of authority or unethical behavior and to protect the individuals who take such actions from retaliation or any threat of retaliation and also provides for direct ac to the Chairman of the Audit Committee, in exceptional cases. The functioning of the Vigil mechanism is reviewed by the Audit Committee from time to time.

None of the Whistle Blowers have been denied access to the Audit Committee of the Board. The details of the Whistle Blow'' Policy are explained in the Report on Corporate Governance and also available on the website of the Company at the following link: www.timexindia.com.

POLICY ON PREVENTION OF INSIDER TRADING

Pursuant to SEBI (Prohibition of Insider Trading) Regulations, 20)5, the Company has framed a) Code of Internal Procedure and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders and b) Code of Fair Disclosure. The Company Code, inter alia, prohibits dealing in the 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.

FAMILIARISATION PROGRAMME

The details of familiarization programmes arranged for the Independent Directors have been disclosed on the website of t company and are available at the following link-www.timexindia.com.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

There were no loans, guarantees or investments made by the Company under Section )86 of the Companies Act, 203 during the year under review and hence the said provision is not applicable.

RELATED PARTY TRANSANCTIONS

All related party transactions entered into during the year under review were in the ordinary course of business, on arms length 1 and were in compliance with the applicable provisions of the Companies Act, 203 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. No material related party transactions was entered during the financial year. Accordingly, the disclosure required under section 134(3) (h) of the Companies Act, 2013 in Form AOC-2 is not applicable to the Company. The details of the related party transactions entered during the year are given in the financial statements of the Company.

The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Ac 2013, the Rules made there under and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This Policy has been uploaded on the website of the Company at www.timexindia.com.

FINANCE

The Company does not hold any fixed deposits. There were no overdue / unclaimed deposits as on 31st March 2016.

During the year under review, the Company made payments aggregating to Rs. 45.55 Crore by way of Central, State and local sales taxes and duties as against Rs 35.35 Crore in the previous year.

SEGMENT WISE REPORTING

The segment wise information for watches and other activities are provided in the Notes to the Accounts.

LISTING

The Equity Shares of the Company are listed on the BSE Ltd. The annual listing fee for the year 2016- 2017 has been paid to the Exchange.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companies policies, safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

The internal control mechanism comprises of a well-defined organization, which undertakes time bound audits and reports its findings to the Audit Committee, documents policy guidelines and determines authority levels and processes.

The systems and operations are regularly reviewed by the Audit Committee to ensure and review their effectiveness a implementation. The Statutory Auditors of the Company also regularly attend these meetings and convey their views on t adequacy of internal control systems as well as financial disclosures. The Audit Committee, Statutory Auditors and the Function Heads are periodically apprised of the internal audit findings. Corrective actions taken by the management on the audit observations are presented to the Audit Committee. The Audit Committee also issues directives for enhancement in scope and coverage specific areas, wherever felt necessary.

In order to further strengthen the internal controls, the Company has implemented an ERP package-Oracle in front end [ore sales] at all its locations during the year. Further, the Company has also implemented internal financial controls with the help of M/s Deloitte Haskins & Sells. These systems have also been checked by M/s BSR & Co., LLP, the Statutory Auditors.

AUDITORS AND AUDITORS’ REPORT a. Statutory Auditors

M/s BSR & Co. LLP, Chartered Accountants, Statutory Auditors of the Company shall hold office till the conclusion of the ensuing Annual General Meeting of the Company and are eligible for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Companies Act, 203 an ‘that they are not disqualified for re-appointment. It is recommended that they may be re-appointed as Statutory Auditors of the Company from the conclusion of the ensuing Annual General meeting of the Company till the conclusion of next Annual General meeting.

The Board has examined the Report issued by the Statutory Auditors of the Company on the Accounts for the financial year ended 3ht March 206 and their comment about the managerial remuneration. The Company is taking necessary steps for recovery of this amount from the erstwhile Managing Director.

b. Secretarial Auditors and Secretarial Audit Report

Pursuant to Section 204 of the Companies Act, 203 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 204, the Board of Directors had appointed M/s. NKJ and Associates, Company Secretaries, as the Secretary: Auditors of the Company to carry out Secretarial Audit for the Financial Year 2315-6. The report of Secretarial Auditor: annexed to this Report a Annexure- C. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

The Board has re-appointed M/s. NKJ & Associates as Secretarial Auditors for the Financial Year 206-7.

HUMAN RESOURCES

The Company believes that experienced, talented and motivated manpower is an essential pre-requisite for successful operations as well as achieving the growth plans of the Company. Employees of all ranks contribute towards the Companies growth in the form of leading, thinking, working, creating, processing, dealing, motivating, and encouraging the workforce to meet work challenges. The management is committed to strengthen this human force by providing it with better tools, technology, techniques, and terms as well as a conducive ambiance at the work place. Given growth plans of the Company, an important strategic foci of the Company is to continue to not only nurture its human capital, but proactively focus on preparing all employees for t challenges of the future.

The Company comprises a small team of professionals, who are result oriented, committed and loyal. As on 3 kt March 206, the Company had 363 employees on its rolls.

The Company has reinforced a culture of performance and meritocracy by deploying transparent and agreed upon smart KRAs t KPIs. These KRAs and KPIs cascade from the Companies growth strategy and plans. The Company has implemented an online performance management system i.e. Workday ’ for setting up of goals and objectives of all employees and thereby tracking it on a regular basis. Appraisals are also completed basis these goals and objectives filled by the employees. The Company has also introduced a rewards and recognition policy for all employees i.e. Employee of the Month Award.

Attracting and retaining bright talent and improvement in the quality of manpower at retail stores are identified as key challenges and being addressed accordingly through product training and retention initiatives.

MATERIAL CHANGES

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year of the Company i.e. 3 feet March, 206 and the date of Directors ’Report i.e. 26th May, 206.

Further, there were no significant or material orders passed by the regulators or courts or tribunals impacting the going concern status and companies operations in future.

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return of the Company under the provisions of Section 92 of the Companies Act, 203 read with t Companies (Management and Administration) Rules, 20)4, is annexed herewith as Annexure- D.

CORPORATE GOVERNANCE

As per Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, 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.

CONSERVATION OF ENERGY

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo, as required to be disclosed under Section 34 (3)(m) of the Companies Act, 203 read with Rule 8 of the Companies (Accounts) Rules, 204, is provided in Annexure E to this Report.

DEMATERIALISATION

The equity shares of the Company are being compulsorily traded in dematerialization form. As on 31st March 2016, 27536 no. of shareholders representing 97.13% of the Equity Share Capital are holding shares in the dematerialized form.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the directors to the best of their knowledge and ability confirm that-

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that ar 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 and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with

the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and ot] irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors had laid down proper internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provision of all applicable laws and that such system were adequate and operating effectively.

CAUTIONARY STATEMENT

Statements in the Board’s Report and the Management Discussion & Analysis Report describing the Companies objectives, expectations or forecasts may be forward looking within the meaning of applicable laws. Actual results may differ materially fri those expressed in the statement. Important factors that could influence the Company’s operations include global and domestic demand and supply conditions affecting selling prices, raw material availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation for the support and cooperation, which the Company continues to race from its customers, the watch trade, the New Okhla Industrial Development Authority, the Governments of Uttar Pradesh Himachal Pradesh, the Banks / Financial Institutions and other stakeholders such as, shareholders, customers and supplied among others, and its employees. The Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the Companies success. The Directors look forward to their continued support in future.

For and on behalf of the Board of Directors

Sd/-

Place : Noida U.P. Colin Davis Arsenault

Date : May 26, 2016 Chairman DIN: 07156629


Mar 31, 2015

Dear Members,

The Directors are pleased to present the Twenty-seventh Annual Report and Audited Statement of Accounts for the year ended 31 March 2015.

FINANCIAL RESULTS Rs. in Lakh

2014-2015 2013-2014

Revenue from operations (including 14,243 12,367 other income)

Profit before Interest and Depreciation (792) (2,947)

Less: Interest 253 117

Less: Depreciation 224 234

Add: Exceptional item 171 -

Profit/ Loss for the year (1,098) (3,298)

Your Company has grown during the financial year 2014-2015 by 15% over the previous year and the losses have reduced by 66% over the previous year. This has been possible due to the initiatives taken in the previous years to reposition its brand, rationalizing the spends, improving the product portfolio, improvement in merchandising and retailing presence and improved employee productivity.

Your Company continues to pursue its strategy to reposition TIMEX as American, Iconic brand. The Company celebrated group''s 160th anniversary during the year. On the occasion, the Company felicitated Indian football icon Mr. Bhaichung Bhutia and World and Olympic champion Mr. Abhinav Bindra with its exclusive limited Waterbury collection.

The Company also forayed into the wearable segment in Q1 of the current financial year with the launch of its smart watch and fitness band-Move x20 and Run x20 GPS to cater to the current age of fitness enthusiasts and tech-savvy audience.

The Company laid great emphasis to connect well with the consumers during the year by establishing brand stores on various e-commerce platforms besides setting up its franchisee stores ''Timex World'' and ensuring its presence in NTO/ MBO''s. Your Company started the Timex Call centre to address consumer queries.

Your Company won Gold in highly acclaimed POPAI awards held in February 2015 for its Indiglo retail concept. POPAI is a global platform to promote world-class retail practices. Incorporated in the USA in 1936, POPAI has now more than 1700 members worldwide covering 40 countries.

The Company continues to focus on the improvement of top and bottom line financial growth performance and to tap the overall optimism in the Indian economy with a renewed vigour and enthusiasm while ensuring good corporate governance practices.

Dividend

In view of the losses for the year ended March 31, 2015 and accumulated losses, the Board of Directors of your Company is constrained not to recommend any dividend for the year under review.

DIRECTORS

Composition

Your Company has eight (8) Directors consisting of four (4) Independent Directors, three (3) Non Executive Directors and One (1) Managing Director.

In terms of the provisions of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a company shall have at least one Woman Director on the Board of the company. Your Company has two woman Directors on the Board of the Company - Ms. Gagan Singh since 31 January 2007 and Ms. Sharmila Sahai since 18 November 2013.

Appointment/ Resignation from the Board of Directors

Mr. Ryan Todd Roth was appointed as an Additional Director and Vice Chairman with effect from 13 November, 2014.

Further, Mr. Colin Davis Arsenault was appointed as an Additional Director and Chairman of the Company with effect from 21 May 2015.

They hold the office until the forthcoming Annual General Meeting. The Company has received requisite notice pursuant to Section 160 of the Companies Act, 2013 from the members of the Company proposing Mr. Ryan Todd Roth and Mr. Colin Davis Arsenault as Directors of your Company.

Mr. M K Bandyopadhyay and Mr. Robert Obed Barberi resigned from the directorship with effect from 20 November, 2014 and 27 February, 2015 respectively.

Further, in accordance with Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Anil Malhotra retires by rotation as a Director of the Company, and being eligible, offers himself for re-appointment.

Appointment / Resignation of Key Managerial Personnel

Mr. Amit Jain has been appointed as Chief Financial Officer of the Company with effect from 2 March, 2015.

Mr. M.K. Bandyopadhyay, whole time director resigned with effect from 20 November, 2014.

Declaration by the Independent Director

Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

Number of meeting of Board of Directors

The Board met five times during financial year 2014-2015 on 29 May, 2014, 14 August, 2014, 13 November, 2014, 29 January, 2015 and 2 March, 2015 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.

COMMITTEES OF THE BOARD

Your Company has constituted various committees pursuant to the requirement of Listing Agreement and Companies Act 2013. Your Company has the following committees of the Board-

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

4. Share Transfer Committee

5. Corporate Social Responsibility Committee

The details with respect to the compositions, powers, roles, terms of reference, etc. of relevant committees are given in detail in the ''Report on Corporate Governance'' of the Company which forms part of this Annual Report.

REMUNERATION POLICY

The policy of the Company on Director appointments and remunerations, including interest for determining qualification positive atribute independence of the directors and other matter provided under sub-section (3) of section 178 of the Companies Act 2013 adopted by the board, is attached as Annexure A.

EMPLOYEE REMUNERATION

Statement pursuant to the requirement of Section 197 (12) read with Rule 5 of Companies (Appointment and Remuneration) Rules, 2014 is attached as Annexure B.

FORMAL ANNUAL EVALUATION

1. Nomination and Remuneration Committee of the Board had prepared draft parameterized feedback forms for evaluation of the Board, Board Committees, Directors and Chairman.

2. Independent Directors at a meeting without anyone from the non independent directors and management, considered/ evaluated the Board''s performance, performance of the Chairman and other non-independent Directors.

3. The Board subsequently evaluated performance of the Board, the Committees and Independent Directors (without participation of the relevant director)

VIGIL MECHANISM

Your Company has implemented a Whistle Blower Policy to provide a mechanism for employees / Board Members and others to raise good faith concerns about violation of any applicable law/ Code of Conduct of the Company, gross wastage or misappropriation of funds, substantial or specific danger to public health and safety, abuse of authority or unethical behavior and to protect the individuals who take such actions from retaliation or any threat of retaliation and also provides for direct access to the Chairman of the Audit Committee, in exceptional cases. The functioning of the Vigil mechanism is reviewed by the Audit Committee from time to time.

None of the Whistle Blowers have been denied access to the Audit Committee of the Board. The details of the Whistle Blower Policy are explained in the Report on Corporate Governance and also available on the website of the Company at the following link: www.timexindia.com

POLICY ON PREVENTION OF INSIDER TRADING

Pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has framed a) Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders and b) Code of Fair Disclosure. 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.

FAMILIARISATION PROGRAMME

The details of familiarization programmes arranged for the Independent Directors have been disclosed on the website of the company and are available at the following link-www.timexindia.com

LOANS AND GUARANTEE U/S 186

There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable

PARTICULAR OF CONTRACT AND ARRANGEMENT U/S 188

Related party transactions that were entered during the financial year were on an arm''s length basis and were in the ordinary course of business. There were no materially significant related party transactions except the transactions that were approved by the shareholders of the Company at the last Annual General Meeting and disclosed in the Form AOC- 2 enclosed herewith as Annexure C.

The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the Rules there under and the Listing Agreement. This Policy as considered and approved by the Board has been uploaded on the website of the Company at www.timexindia.com.

FINANCE

The Company does not hold any fixed deposits from the public, shareholders & employees. There were no overdue / unclaimed deposits as on 31 March 2015.

During the year under review, the Company made payment aggregating to Rs. 35.35 Crore by way of Central, State and local sales taxes and duties as against Rs30.35 Crore in the previous year.

SEGMENT WISE REPORTING

The segment wise information for watches and other activities are provided in the Notes to the Accounts.

LISTING

The Equity Shares of the Company are listed on Bombay Stock Exchange Limited. The annual listing fee for the year 2015- 2016 has been paid to the Exchange.

INTERNAL FINANCIAL 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 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 regularly attend these meetings and convey their views on the adequacy of internal control systems as well as financial disclosures. The Audit Committee, Statutory Auditors and the Function Heads are periodically apprised of the internal audit findings. Corrective actions taken by the management on the audit observations are presented to the Audit Committee. The Audit Committee also issues directives for enhancement in scope and coverage of specific areas, wherever felt necessary.

AUDITORS and AUDITORS'' REPORT

a. Statutory Auditors

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 2015 and their comment about the managerial remuneration. The Company is in the process of recovering the excess remuneration paid to a former Managing Director of the Company.

The auditors, M/s BSR & Co., LLP Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

b. Secretarial Auditors and Secretarial Audit Report

Pursuant to the Companies Act, 2013, M/s NKJ and Associates were appointed as the Secretarial Auditors to conduct Secretarial Audit for the Financial Year 2014 - 2015. The report of the Secretarial Auditor for the FY 2014-2015 is attached as Annexure D.

There were no qualifications, reservations or adverse remarks made by the Secretarial Auditors in their report.

HUMAN RESOURCES

Your company believes that its People are its most critical assets. To keep them challenged and motivated your Company provides a challenging and remunerative work environment that encourages high performance, ownership and team work. Your Company believes that a winning culture is essential to its success. This begins with the way employees are treated, protecting their health and safety, rewarding their performance, developing their potential, seeking their counsel and promoting diversity and inclusiveness. To support this, the Company has established the principles of good labor standards, equal opportunity for employment, ethical work environment, respect and health regard for diversity and believes in following a code of conduct in order to further cultivate a culture of social responsibility at all levels.

Your Company comprises a small team of professionals, who are result oriented, committed and loyal. As on 31 March 2015, your Company had 345 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 product training and retention initiatives.

MATERIAL CHANGES

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year of the Company i.e. 31 March 2015 and the date of Directors'' Report i.e. 21 May 2015.

Further, there were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future.

EXTRACT OF ANNUAL RETURN U/S 92

The extracts of Annual Return pursuant to the provisions of Section 92 of Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure E and is attached to this Report

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.

CONSERVATION OF ENERGY

Information required as per Section 134 (3)(m) read with Companies (Accounts) Rules, 2014, regarding the conservation of energy, technology absorption, foreign exchange earnings and outgo is given in Annexure F forming part of this report.

DEMATERIALISATION

Since year 2000, the equity shares of your Company are being compulsorily traded in dematerialization form. As on 31 March 2015, 28764 no. of shareholders representing 97.09% of the Equity Share are holding shares in the dematerialized form.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, your directors confirm as under—

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) 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 and loss of the company for that period;

(c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) The directors had prepared the annual accounts on a going concern basis; and

(e) The directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) the directors had devised proper systems to ensure compliance with the provision of all applicable laws and that such systems were adequate and operating effectively.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis, outlining the Company''s objectives, 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 relations etc.

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/- Chairman Annexure-F


Mar 31, 2014

To the Members of Timex Group India Limited

The Directors are pleased to present the Twenty-sixth Annual Report and Audited Statement of Accounts for the year ended 31 March 2014.

FINANCIAL RESULTS Rs. in Lakhs

2013-2014 2012-2013

Income 12,367 12,168

Less: Expenditure 15,665 16,364

EBIDTA (2,948) (3,875)

Less: Interest 117 98

Less: Depreciation 234 223 profit Before Tax (PBT) (3,298) (4,196)

Provision for Taxes

profit after Tax (3,298) (4,196)

As per our plans and as mentioned in the last year Annual Report, 2013-2014 has been a transition year wherein significant progress has been achieved in terms of liquidation of slow moving inventory and improvement in overall trade collection.

Although, the revenues improved marginally, the losses have declined by 21% as compared to previous year. The losses were driven by combination of factors including weaker economic environment and sharp devaluation of Rupee.

The transition towards healthier & profitable business is still continuing through greater focus on top and bottom line financial growth performance by focusing on the following agenda: 1) Generate positive cash to reinvest in profitable growth, 2) Grow revenues by more closely aligning product offerings with consumer demand, 3) Rationalize and realign spending to drive profitable growth, 4) Improve the brand imagery, and 5) Improve the employee productivity.

In line with your Company''s Product strategy , many new international products have been launched in the recent past with many more in the pipeline. Your Company has launched its largest-ever marketing and rebranding initiative entitled "WEAR IT WELL". Watches of your Company allow people to express their true personal style. Unpretentious and timeless, our passion for style, fashion and sport comes across in a clear, conversational tone as if we''re talking amongst friends. These efforts will lead to improved domestic brand equity which will have a positive impact on market share and revenue growth.

TIMEX ranked 76th in the list of brands featured in Brand Equity''s Most Exciting Brands in 2014. Further, your Company has also re-branded its franchisee stores under the title ''Timex World''. With the new identity of the stores as ''Timex World'', the brand hopes to achieve a compelling repositioning in the watch industry vis-à-vis the constantly evolving market. The new name will not only serve to reposition and reinforce the brand as one of the prominent players in the watch industry but also further enhance its retail imagery.

During fiscal 2013-2014, Ms. Sharmila Sahai was appointed as the Managing Director of the Company.

DEMATERIALISATION

Since year 2000, the equity shares of your Company are being compulsorily traded in dematerialization form. As on 31 March 2014, 31338 no. of shareholders representing 97.04% of the Equity Share are holding shares in the dematerialized form.

DIRECTORS

Mr. Robert Obed Barberi was appointed Additional Director during the year to hold office upto the date of forthcoming shareholders meeting. Mr. Barberi has been subsequently appointed as Chairman of the Board of Directors pursuant to the provisions of Articles of Association of the Company. Your Company has received a requisite notice from a member proposing Mr. Barberi as a a Director of your Company.

Mr. Anil Malhotra was appointed Non-Executive Additional Director during the year to hold office upto the date of forthcoming shareholders meeting. Your Company has received a requisite notice from a member proposing Mr. Malhotra as a Director of your Company.

Ms. Sharmila Sahai was appointed Additional Director during the year to hold office upto the date of forthcoming shareholders meeting. She was also appointed as a Managing Director of your Company. Your Company has received a requisite notice from a member proposing Ms. Sahai as a Director of your Company

Mr. M.K. Bandyopadhyay was re-appointed as Managing Director-Operations and Supply Chain of the Company with effect from 1 February 2014 for a period of six months. The Board of Directors, on the recommendation of Remuneration Committee and subject to the approval of shareholders and such other approvals as may be required, approved the appointment of Mr. Mandyopadhyay as Whole time Director with effect from 1 August 2014 until 20 November 2014.

The Company had, pursuant to the provisions of clause 49 of the Listing Agreements entered with the Stock Exchanges, appointed Mr. Pradeep Mukerjee, Ms. Gagan Singh, Mr. Bijou Kurien and Mr. Daya Dhaon, as Independent Directors at various times, in compliance with the requirements of the clause.

Pursuant to the provisions of section 149 of the Act, which came in to effect from April 1, 2014, every listed public company is required to have at least one-third of the total number of directors as independent directors, who are not liable to retire by rotation.

In terms of Section 149 and other applicable provisions of the Companies Act, 2013, and Clause 49 of the Listing Agreement, Mr. Pradeep Mukerjee, Ms. Gagan Singh, Mr. Bijou Kurien and Mr. Daya Dhaon, are proposed to be appointed as Independent Directors of the Company for a term of five years.

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 have been followed along with proper explanation relating to material departures.

(ii) The Directors have 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 have taken proper and suffcient 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 certifcate from the practicing Company Secretary confirming compliance is set out in the Annexure forming part of this report.

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., LLP 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 2014 and their comment about the managerial remuneration. The Company is in the process of fling an application for seeking waiver of excess remuneration paid to a former Managing Director of the Company.

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/- Chairman


Mar 31, 2013

To the Members of Timex Group India Limited

The Directors are pleased to present the Twenty-ffth Annual Report and Audited Statement of Accounts for the year ended 31 March 2013.

FINANCIAL RESULTS Rs. in Lakhs

2012-13 2011-12

Income 12,168 18,391

Expenditure 16,364 17,786

EBIDTA (3,875) 911

Interest 98 109

Depreciation 223 197

Proft before tax (PBT) (4,196) 605

Provision for Taxes 152

Proft after Tax (4,196) 453

2012-13 was a very diffcult fnancial year. Revenues and proft declined 34% and 46 crores, respectively. These declines were driven by a combination of a weaker economic climate and higher costs due to the devaluation of the Rupee. Additionally, revenues were reduced as we implemented improved credit controls and new strategies against some of our trade channels. These changes were necessary to ensure a healthy long term business and we are already beginning to show positive results.

The Company is committed to improving its top and bottom line fnancial performance through three focused and simple strategies. In the near-term, the Company''s focus will be on the following: 1) Generate positive cash to reinvest in proftable growth, 2) Grow revenues by more closely aligning product offerings with consumer demand, and 3) Rationalize and realign spending to drive proftable growth

As part of its focus on cash, over the past two quarters the Company instituted more stringent Credit Management policies as well as efforts aimed at eliminating unproductive investments in Working Capital. While the Credit Management policies tempered revenues somewhat, they were necessary in order to balance revenues with collection of accounts receivable to generate cash. And within Operations, a more closely integrated sales forecasting and production process was implemented to ensure maximum productivity of investments in inventory. These initiatives will be a critical enabler to provide the cash necessary to permit business-critical investments in new products, advertising and store openings going forward.

In terms of leadership, during fscal 2012-2013, Mr. M.K. Bandyopadhyay was appointed Acting Managing Director, replacing Mr. V.D. Wadhwa who resigned on January 31, 2013.

By placing greater focus on the above short-term objectives, the Company expects future fnancial performance to improve substantially. However, fscal 2013-2014 will be a transition year. While it is expected that signifcant progress will be achieved in fscal 2013-2014, it is also expected to be a year of depressed fnancial performance as comparatively weak economic conditions persist and as the costs associated with the transition to a healthier business continue.

DEMATERIALISATION

Since year 2000, the equity shares of your Company are being compulsorily traded in dematerialization form. As on 31 March 2013, 32359 no. of shareholders representing 97.02% 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, Mr. Daya Dhaon retires by rotation as a Director of the Company, and being eligible,offers himself for re-appointment.

Mr. Gary Piscatelli was appointed as an Additional Director during the year to hold offce up the date of forthcoming shareholders meeting. Mr. Piscatelli has been subsequently appointed as Chairman of the Board of Directors pursuant to the provisions of Articles of Association of the Company. 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. M.K. Bandyopadhyay was appointed as an Additional Director of the Company to hold offce up to the date of the forthcoming shareholders meeting. Mr. Bandyopadhyay was subsequently appointed as Acting Managing Director of the Company in place of Mr. V D Wadhwa who resigned from the directorship and the post of Managing Director with effect from 31 January 2013. Your Company has received a notice from a shareholder seeking his appointment as a Director of your Company pursuant to section 257 of the Companies Act 1956.

Mr. Kapil Kapoor and Mr. Arthur Morissette resigned from the directorship of the Company with effect from 30 May 2013 and 1 March 2013 respectively.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, your Directors confrm as under:

(i) That in preparation of the Balance Sheet and the Proft & 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 fnancial year and of the proft of the Company for that period.

(iii) The Directors had taken proper and suffcient 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 certifcate from the practicing Company Secretary confrming compliance is set out in the Annexure forming part of this report.

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 confrmed their eligibility and willingness to accept offce, if re-appointed.

COST AUDITORS

Pursuant to the Order as notifed by the Ministry of Corporate Affairs (Cost Audit Branch) vide circular dated 6 November 2012 read with Cost Audit Report Rules 2011, the Company has appointed, M/s H. Tara and Company, Cost Accountants, as the Cost Auditor of the Company for the fnancial year 2013-14 for conducting the audit of the Cost Records of the Company.

AUDITORS'' REPORT

Your Board has duly examined the Report issued by the Statutory Auditor''s of the Company on the Accounts for the fnancial year ended 31 March 2013 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 fnally the Members of the Company and its employees.

For and on behalf of the Board of Directors

Chairman


Mar 31, 2012

To the Members of Timex Group India Limited

The Directors are pleased to present the Twenty-fourth Annual Report and Audited Statement of Accounts for the year ended 31 March 2012.

FINANCIAL RESULTS

Rs. in Lakhs

2011-12 2010- 11

Income 18,391 17,391

Expenditure 17,786 15,633

EBIDTA 911 1,927

Interest 109 0.47

Depreciation 197 169

Profit before tax (PBT) 605 1,758

Provision for Taxes 152 357

Profit after Tax 453 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

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 re- appointment of Mr. VD. 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.

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/-

Noida Kapil Kapoor

31 May 2012 Chairman


Mar 31, 2011

To the Members of Timex Group India Limited

The Directors are pleased to present the Twenty-third Annual Report and Audited Statement of Accounts for the year ended 31 March 2011.

FINANCIALRESULTS Rs. in Thousands

2010-11 2009- 10

Income 1739082 1400709

Expenditure 1563321 1341958

EBIDTA 192734 83311

Interest 47 1679

Depreciation 16926 22881

Profit before tax (PBT) 175761 58751

Provision for Taxes 35663 12518

Profit after Tax 140098 46233

The economic environment for the domestic business continued to remain conducive for most part of the year and all major players in the watch industry witnessed strong growth, which was largely driven by fashion and youth segment and expansion of the retail footprint. The high inflation rate and rising cost of commodities prices, if not contained, is likely to adversely impact the consumer sentiment and the overall economic growth environment in the year ahead.

The year 2010-11 has been a year of major transformation, during which, your Company has delivered its highest ever volume, revenue and profitability performance. Sales Revenue grew by 25% at Rs 174 Crore and Profit before tax grew by 203% at Rs 14 Crore.

The year begun with a leadership change in the management team and the subsequent finalization of your Company's three years strategic plan. Under the new leadership, several key initiatives were taken to drive efficiencies across the organization and also align all stakeholders of the Company with the goals to create a strong sense of vision and focus for the business.

Some of the key marketing initiatives taken were as under;

- Revamped the product portfolio and introduced new styles with improved aesthetics and at the same time generated a higher gross margin for the business.

- Launched New Brands - to target different consumer segments and widen the appeal of the Timex Group Portfolio. The brands launched this year were;

- Mark Ecko : in the fashion segment

- Versace : in Luxury fashion segment

- Tarun Tahiliani : in the premium women's segment

- Helix : in the fast growing youth segment

- Partnered with "ICC Cricket World Cup 2011" event as the "Official Product Licensee"

- Increased media spend with a focus on Television Advertising. A new brand television commercial was developed for the Timex brand during the year to reinforce the "conversation starters" theme. This campaign was well received by trade and consumers.

- Visual Merchandising development. A marketing toolkit was conceptualized and executed across points of sale in the different store formats. This has helped build a consistent image for the different brands across the country.

- Expanded the number of franchised retail stores, "The Time Factory", to 76 during the last year.

MANAGEMENT DISCUSSION AND ANALYSIS

THE INDIAN WATCH MARKET

The size of Indian watch market is estimated to be at Rs 5000 Crores of which 60% of the business is contributed by the organized sector. The brands at the premium end of the market and in the fashion and youth segments continue to grow significantly faster than other brands. 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 features. The growth in the market has been led by marketing investments made by several Indian and Global brands (including the launch of several new brands) which are increasing their focus on the Indian market. This increased competition and marketing investment is a good sign; since we believe this will drive the growth of the industry, which is still in a nascent stage when compared to penetration in developed countries.

The entry of several brands especially in the Fashion and Luxury segments of the market has resulted in increased competition for the rather limited retail space available in the multi brand watch retail environment. And in turn this has led to further investment and development of "modern retail" channels to meet the increased demand. The industry has overall witnessed an increase in the contribution of "modern retail" to the overall business. The development of this channel, while enhancing the consumer buying experience in terms of an international environment to shop in, is leading to an increase in margin expectations from the branded companies. In view of this, companies which are in a position to offer a portfolio of brands are better positioned for faster and profitable growth.

OUTLOOK/OPPORTUNITES & KEY CHALLENGES

The economic growth of India and the changing life style of the Indian consumers (especially the relatively younger consumers) who are aspiring to a more international way of life on account of the growing awareness of the global fashion trends, bodes well for the growth of the watch industry. And your company is well positioned to take advantage of this.

The company has an unique advantage of having several international brands with 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 Global brands and the presence of its own franchised retail chain, "The Time Factory", comprising of 76 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 enjoy the support of 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.

The watch industry has changed significantly over the last few years and watches are being used as a fashion accessory more than a time telling device. This has resulted in a trend for multiple watch ownership;" A different watch for different occasions". This is an encouraging trend for the industry and could propel industry growth significantly in future years and TGIL with its wide array of brands and styles, ranging from Fashion and Classics to Sports can take full advantage of this.

In addition, India continues to be a key strategic market for the Timex Group and therefore enjoys easy access to its global resources across all functional areas, which should help improve our operational efficiencies due to the scale of the Group's global operations.

Finally, at TGIL, we are benefiting from the operating leverage we now enjoy as a business and this means that future growth will be more profitable.

RISKS /THREATS

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.

The 'Tsunami' in Japan has severely impacted the supply of watch movements in the last few months, which has since improved. Re-occurrence of such disasters in future could cause a supply chain risk for the Category.

In addition to this, increasing consumer preference for usage of mobile phones as a time keeping device instead of watches also pose a major threat especially with the category of consumers who still use a watch to tell time. This is being suitably addressed by several marketing initiatives by promoting watches as a fashion accessory as indicated in the section above.

GOVERNMENT POLICY

Your Company has been actively involved with the "All India Federation of Horological Industries", 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

Your Company has been able to manage its cash flow through improved collections and utilized the surplus cash to reduce the borrowings and accounts payable, which has resulted in savings in Interest costs despite firming up of Interest Rates.

The Company does not hold any fixed deposits from the public, shareholders & employees. There were no overdue / unclaimed deposits as on 31 March 2011.

During the year under review, the Company made payment aggregating to Rs.32.58 Crore by way of Central, State and local sales taxes and duties as against Rs. 30.06 Crore in the previous year.

Your Company is also 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 provides a challenging work environment that encourages meritocracy at all levels and has believed in an environment that fosters accomplishment, ownership, creativity and mutual respect.

Your Company comprises a small team of professionals, who are result oriented, committed and loyal.

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 (2 A) 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.

CAUNONARYSTATEMENT

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.

DEMATERIALKATION

Since year 2000, the equity shares of your Company are being compulsorily traded in dematerialization form. As on date, 31802 no. of shareholders representing 21.96% 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, Mr. Frank A Sherer and Mr.Pradeep Mukerjee retire by rotation as Director of the Company and being eligible, offers themselves for reappointment.

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.

(v) That due to sudden demise of Mr. Raghu Pillai on 10lh April, 2011, who was one of the Director on the Board, representation u/s 274 (1) (g) was not received prior to the date of Audit Report, however, later representations u/s 274 (1) (g) have been received from two Companies, where he was a Director.

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 Company's Auditors confirming compliance is set out in the Annexure forming part of this report.

CONSERVATION OFENERGY

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

M/s BSR & Co., Chartered Accountants and Statutory Auditors of the Company retire and are eligible for reappointment.

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

New Delhi KapilKapoor

26 May, 2011 Chairman


Mar 31, 2010

The Directors are pleased to present the Twenty Second Annual Report and Audited Statement of Accounts for the year ended 31 March 2010.

FINANCIAL RESULTS Rs. in Thousands

2009-10 2008- 09

Income 1400709 1319639

Expenditure 1341958 1293229

EBIDTA 83311 56471

Interest 1679 6646

Depreciation 22881 23415

Profit before tax (PBT) 58751 26410

Profit on sale of PED Business - 63533

Provision for Taxes 12518 15401

Profit after Tax 46233 74542

The year 2009-10 witnessed a slow but definite sign of recovery in retail sentiment across most segments, after the slowdown of economy during 2008-9. For the year ended 31 March 2010, the sales revenue grew to Rs. 140 crores increasing by a modest 7% from Rs 131 crores. Profit before taxes grew by 122% to Rs 5.87 crores from Rs 2.64 crores during previous year and Net profit for the year was Rs 4.62 crore compared to Rs 7.45 crore in previous year, which was inclusive of one time profit of Rs 6.35 crore due to sale of PED business.

Your Company continues to drive its strategy of retail expansion through opening of "The Time Factory" stores and internalization of fast moving international styles for driving business growth in profitable segments, which is reflected in the increased profitability.

Your Company is also finalizing its plan for launching "Versace" and "Marc Ecko" watch brands from its International portfolio in the Indian Market to drive its portfolio strategy and offer multiple choices of brands across price points to the Indian Consumers.

MANAGEMENT DISCUSSION AND ANALYSIS THE INDIAN WATCH MARKET

The size of Indian watch market is estimated at 45 million watches. The brands at the premium end of the market and in the fashion segments continues to grow significantly faster than other brands. While the volume growth is driven by low price point products, the growth of most brands is driven by value and not volume. The growth has been led by marketing investments by several Indian and Global players including your Company. This augurs well for the growth of overall Industry.

The watch industry witnessed the entry of several luxury and fashion brands during the year, which resulted in increasing the competition for retail space in the multi brand outlets across the country. Companies, which are expanding their retail footprint and offering a portfolio of brands continue to grow faster. Your Company has the unique advantage of being the only international brand with its own domestic manufacturing capabilities, a portfolio of eleven international brands and the presence of its own retail chain, "The Time Factory", comprising of 69 stores.

OUTLOOK/OPPORTUNITES & KEY CHALLENGES

The current economic environment, the growing awareness of global fashion trends and the changing life style of the Indian consumers are indicative of high growth for life style brands with emphasis on outdoor & technology, fashion and luxury segments. Over the last several decades, the Timex Brand has come to be known for its technological superiority and large offering of outdoor and fashion products.

Your Company shall continue to invest in its product portfolio and strengthen the communication of its brand attributes of "Superior Technology", "Sporty" and "Fashionable". The younger segment has also been identified as a segment poised for high growth, which shall be largely addressed through product differentiation and offering an exclusive range crafted by International designers following the global trends.

The Timex Group now offers a portfolio of eleven international brands including Timex, i.e. Salvatore Ferragamo, Versace, Guess, Gc, Nautica, Marc Ecko, TX, Valentino, Versus and OPEX. During the year, your Company intends to introduce Salvatore Ferragamo, Versace and Marc Ecko to the Indian Consumers to pursue its portfolio strategy and, further strengthen its retail presence through expansion of "The Time Factory" stores and gain share in the Multi Brand Retail outlets. Your Company has identified these as key action points for driving business growth in the coming years.

RISKS/THREATS

Your Company is expanding its retail network through franchisees at the front end. This is an efficient way to expand rather than having Company owned/managed showrooms which is a costlier option. The relationships have to be actively managed to pre-empt shifting of loyalties of these franchisees to other product category/Brands.

The Company is addressing this risk by initiating a high level of engagement with the franchisees and addressing their reasonable business requirements in an empathetic manner, through both contractual arrangements and day to day interface with these business associates.

The increasing operating costs of retailing also pose as risk to the maintenance of operating margins.

The weakening rupee had a negative impact on the profitability of your Company being a net importer. Your Company continues to drive operating efficiencies to overcome and mitigate such risks.

GOVERNMENT POLICY

Your Company has been actively involved with the "All India Federation of Horological Industries", 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. We have made several representations to the government for reduction and rationalization of duties, increase in the rate of abatement on watches, and enhancement of DEPB credit rates relating to export of Quarts Analogue Watches including other export benefits etc. We shall continue our efforts to represent the interests of the Industry and your own Organisation.

FINANCE

Your Company has been able to manage its cash flow through improved collections and utilized the surplus cash to reduce the borrowings and accounts payable, which has resulted in savings in Interest costs despite firming up of Interest Rates.

The Company does not hold any fixed deposits from the public, shareholders & employees. There were no overdue / unclaimed deposits as on 31 March 2010.

During the year under review, the Company made payment aggregating to Rs.30.06 Crore by way of Central, State and local sales taxes and duties as against Rs. 27.39 Crore in the previous year.

Your Company is also paying dividend on its Preference Shares at the agreed coupon rate. The dividend liability on preference shares until March 2009 was waived by the Preference Share Holders.

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 structure, 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

Your Company is proud to have result oriented, committed & loyal employees, who are the key resource for the growth of its business. 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.

One of the key challenges in this area is to increase manpower productivity, through training and motivational programmes. The efforts are on to impart training to sales staff at our TTF Stores.

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 Companys 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 Companys 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, 33977 no. of shareholders representing 21.86% of the Equity Share are holding shares in the dematerialized form.

DIRECTORS

Mr. Daya Dhaon retires by rotation as Director of the Company and being eligible, offers himself for reappointment.

Mr. .Hans-Kristian Hoejsgaard resigned from directorship of the Company. The Company wishes to place on record its appreciation for the valuable guidance and support provided by Mr. Hoejsgaard during his tenure as Director and Chairman of the Board of Directors of the Company.

Mr. Sherer was appointed an Additional Director to hold office up to the date of the forthcoming shareholders meeting. Mr. Sherer has been subsequently appointed as Chairman of the Board of Directors pursuant to Articles of Association of the Company. Your Company has received notice from a shareholder seeking his appointment as Director of your Company pursuant to Section 257 of the Companies Act 1956.

Mr. Pradeep Mukerjee was appointed as an Additional Director during the year to hold office up the date of the forthcoming shareholders meeting. Your Company has received notice from a shareholder seeking his appointment as Director of your Company pursuant to Section 257 of the Companies Act 1956.

Mr. V.D.Wadhwa was appointed an Additional Director to hold office up the date of the forthcoming shareholders meeting. Mr. Wadhwa was subsequently appointed Managing Director of the Company in place of Mr. G. Kannan, who resigned from the directorship and the post of Managing Director effective 29 April 2010.Your Company has received notice from a shareholder seeking Mr. Wadhwas appointment as Director of your Company pursuant to Section 257 of the Companies Act 1956.

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.

(v) The Directors are pleased to recommend payment of dividend on 3,86,00,000 Cumulative Redeemable Preference Shares ( both the series) of Rs Ten each at the rate of Rs.0.71/- per share and on 25,00,000 Non- Cumulative Redeemable Preference Shares of Rs Ten each at the rate of Rs 0.01 per preference share, subject to approval by the shareholders at the Annual General Meeting,

As per Section 217 of the Companies Act, the Directors take note of the Auditors Report (Clause 4f) and share that the decision of the Central Government on the request made is awaited and the Company shall abide by the due legal process.

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 Companys Auditors confirming compliance is set out in the Annexure forming part of this report.

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

M/s BSR & Co., Chartered Accountants and Statutory Auditors of the Company retire and are eligible for reappointment.

ACKNOWLEDGEMENTS

Lastly, 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, the Companys bankers and finally the Members of the Company and its employees.

For and on behalf of the Board of Directors

Kapil Kapoor Vice-Chairman

New Delhi 27 May, 2010

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