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Notes to Accounts of Titan Company Ltd.

Mar 31, 2015

NOTE 1

Contingent liabilities not provided for - Rs. 29,793 lakhs (2014: Rs. 23,357 lakhs) comprising of the following:

Sales Tax - Rs. 2,557 lakhs (2014: Rs. 2,500 lakhs)

(relating to the applicability of rate of tax, computation of tax liability, submission of certain statutory forms)

Customs Duty - Rs. 467 lakhs (2014: Rs. 317 lakhs)

(relating to compliance with the terms of notification, exemptions, export obligations)

Excise Duty - Rs. 19,348 lakhs (2014: Rs. 15,163 lakhs)

(relating to denial of exemption by amending the earlier notification, computation of the assessable value, denial of input credit on service tax and excise duty on jewellery)

Income Tax - Rs. 6,850 lakhs (2014: Rs. 4,914 lakhs) (relating to disallowance of deductions claimed)

Others - Rs. 571 lakhs (2014: Rs. 463 lakhs) (relating to miscellaneous claims)

The above amounts are based on the notice of demand or the Assessment Orders or notification by the relevant authorities, as the case may be, and the Company is contesting these claims with the respective authorities. Outflows, if any, arising out of these claims would depend on the outcome of the decisions of the appellate authorities and the Company''s rights for future appeals before the judiciary. No reimbursements are expected.

NOTE 2

Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 16,172 lakhs (2014: Rs. 9,852 lakhs).

NOTE 3

The Company has received show cause notices from the Excise authorities aggregating to Rs. 34,819 lakhs (2014: Rs. 21,335 lakhs) without quantifying interest and penalty, relating to the disallowance of cenvat credit availed. The Company has been legally advised that the notice is not sustainable.

NOTE 4 OTHER COMMITMENTS

a) Non-fund based facilities availed of Rs. 112,891 lakhs (2014: Rs. 14,755 lakhs) from banks are secured by a first charge by way of hypothecation of current assets including book debts and inventories, both present and future. The security covered rank pari passu with the security for the cash credit facility.

b) Estimated amount of contracts remaining to be executed on revenue account and not provided for is Rs. 427 lakhs (2014: Rs. 223 lakhs).

(b) Defined Benefit Plans

i) Funded

The Company makes annual contributions to The Titan Industries Gratuity Fund. The scheme provides for lump sum payment to vested employees at retirement, death while in employment, or on termination of employment as per the Company''s Gratuity Scheme. Vesting occurs upon completion of five years of service.

VIII The employees are assumed to retire at the age of 58 or 60 or 65 years.

IX The mortality rates considered are as per the published rates in the Indian Assured Lives Mortality (2006-08) ULT table.

X Expected rate of return on plan assets is based on expected average long term rate of return on investments of the fund during the estimated term of the obligations. The Company is expected to contribute Rs. 2,690 lakhs to the gratuity fund next year.

The discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

NOTE 5

Auditors remuneration comprises fees for audit of statutory accounts Rs. 122 lakhs (Previous year: Rs. 122 lakhs), taxation matters Rs. 32 lakhs (Previous year: Rs. 29 lakhs), audit of consolidated accounts Rs. 9 lakhs (Previous year: Rs. 9 lakhs), other services Rs. 29 lakhs (Previous year: Rs. 32 lakhs) and reimbursement of levies and expenses Rs. 31 lakhs (Previous year: Rs. 33 lakhs).

NOTE 6

Rates and taxes include Rs. 6,056 lakhs (Previous year: Rs. 5,536 lakhs) being the excise duty paid on watch components transferred from Hosur factory to Dehradun, Roorkee and Pantnagar factories.

a) Gold futures / forward contracts outstanding as at the year end - 4,458 kgs, Rs. 116,284 lakhs (2014: 6,246 Kgs, Rs. 175,224 lakhs)

b) The Company has 13 forward exchange contracts for US Dollars 108 lakhs equivalent to Rs. 6,778 lakhs (2014: 4 forward exchange contracts for US Dollars 14 lakhs equivalent to Rs. 809 lakhs), Nil forward exchange contracts for HKD Nil equivalent to Rs. Nil (2014: 4 forward exchange contracts for HKD 135 equivalent to Rs. 1,042 lakhs) and 3 forward exchange contracts for Euro 4 lakhs equivalent to Rs. 282 lakhs (2014: Nil forward exchange contracts for Euro Nil equivalent to Rs. Nil) for firm commitment of purchases.

The Company has 4 forward exchange contracts for US Dollars 31 lakhs equivalent to Rs. 1,906 lakhs (2014: Nil forward exchange contracts for US Dollars Nil equivalent to Rs. Nil) for firm commitment on sales.

Marked to Market loss of Rs. Nil (2014: loss Rs. 23 lakhs) has been recognized in the statement of profit and loss on these outstanding contracts.

Related party disclosures :

Names of related parties and description of relationship:

a) Promoters

Tamilnadu Industrial Development Corporation Limited Tata Sons Limited

b) Subsidiaries

Titan TimeProducts Limited

Favre Leuba AG

Titan Watch Company Limited (100% subsidiary of Favre Leuba AG) (w.e.f. August 12, 2014)

Titan Engineering and Automation Limited (w.e.f. March 24, 2015)

c) Associate Green Infra Wind Power Theni Ltd

d) Key Management Personnel Mr. Bhaskar Bhat, Managing Director

NOTE 7

The figures of the previous year have been regrouped/ recast, where necessary, to conform to the current year classification.


Mar 31, 2012

Note 1.1 SHARE CAPITAL

2012 2011

No. of Amount No. of Amount Shares Shares in lakhs Rs.lakhs in lakhs Rs.lakhs

a) Authorised share capital Equity share of Rs.1 (2011: Rs.10) each 12000.00 12000.00 800.00 8000.00

Redeemable cumulative preference shares of Rs. 100 each 40.00 4000.00 40.00 4000.00

b) Issued, subscribed and fully paid up share capital

Equity share of Rs.1 (2011: Rs.10) each fully paid up 8877.86 8877.86 443.89 4438.93

c) Rights of shareholders :

The Company has only one class of equity shareholders. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to approval by the shareholders at the ensuing Annual General Meeting.

ii) No interest payments have been made during the year.

iii) The above information regarding dues to Micro Enterprises and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

a) Advances from customers include advances received of Rs.85663.80 lakhs (2011: Rs.58779.77 lakhs) towards sale of jewellery products under various sale initiatives / retail customer programmes.

b Current liabilities do not include any amount to be credited to Investor Education and Protection Fund except where there are pending legal cases amounting to Rs.1.40 lakhs (2011: Rs.1.39 lakhs) and therefore, amounts relating to the same could not be transferred.

c) The 6.75% debentures redeemable at par at the end of five years from the dates of allotment on May 12, 2006 and June 09, 2006 and secured by way of legal mortgage on the immovable properties and plant and machinery situated at Hosur were redeemed during the year.

b) The Board of Directors, in their meeting on April 30, 2012, proposed a dividend of Rs.1.75 per equity share. The proposal is subject to the approval of shareholders at the Annual General Meeting to be held on 31 July, 2012, and if approved, would result in a cash outflow of approximately Rs. 18056.63 lakhs inclusive of corporate dividend tax of Rs. 2520.37 lakhs.

Dividend recognized as distributions to equity shareholders for the year ended March 31, 2011 was Rs. 25 per share.

c) Others include

(i) Provision for warranty - Rs. 373.95 lakhs (2011: Rs. 264.88 lakhs).

The Company gives warranty on all products except jewellery, undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. Warranty provisions are made for expected future outflows and determined based on past experience. No reimbursements are expected. Provision made and utilised/reversed during the year is Rs. 373.95 lakhs (2011: Rs. 264.88 lakhs) and Rs. 264.88 lakhs (2011: Rs. 228.48 lakhs) respectively.

(ii) Provision for Customer Loyalty programmes - Rs. 3606.54 lakhs (2011: Rs. 2330.17 lakhs)

The Company has a scheme of reward points on purchase of certain products by customers which can be redeemed at the time of future purchases. Provision is made based on past experience. Additional provision made and utilised/reversed during the year is Rs. 3787.51 lakhs (2011: Rs. 3311.74 lakhs) and Rs. 2511.14 lakhs (2011: Rs. 1969.01 lakhs) respectively.

* Shares cancelled on amalgamation

a) The Company has given an undertaking not to sell or encumber in any manner its investments in TVS Wind Power Limited in accordance with the Equity Participation agreement.

b) A Petition has been filed by the Company's subsidiary Titan Properties Limited as the Transferor Company, seeking sanction to the Scheme of Amalgamation with the Company on the appointed date i.e. 1 April 2011. No shares of the Company are to be issued pursuant to the Scheme. Based on the application made under section 391 of the Companies Act, 1956, the Chennai High Court having jurisdiction over the Transferor Company has granted dispensation of the meetings of shareholders and creditors of the Transferor Company. The final order sanctioning the said scheme of Amalgamation as aforesaid is awaited.

Excise duty of Rs. 13248.03 lakhs (2011: Rs. 4996.87 lakhs) reduced from gross revenue from operations in the statement of profit and loss represents excise duty on sale of products.

Pursuant to the Scheme of amalgamation of Tanishq (India) Limited (TQL) (wholly owned subsidiary of the Company carrying on trading activities) with the Company as sanctioned by the High Court of Karnataka, all assets and liabilities have been transferred to and vested in the Company retrospectively with effect from April 1, 2010.

The amalgamation has been accounted for under the "pooling of interests" method as prescribed by Accounting Standard (AS) 14 - Accounting for Amalgamations notified by the Central Government of India under the Companies (Accounting Standards) Rules, 2006. Accordingly, the assets, liabilities and reserves have been recorded at their respective book values in the accounts of the Company.

Contingent Liabilities not provided for - Rs. 15845.16 lakhs (2011: Rs. 5805.51 lakhs) comprising of the following:

Sales Tax - Rs. 543.25 lakhs (2011: Rs. 412.72 lakhs) (relating to the applicability of rate of tax, computation of tax liability, submission of certain statutory forms)

Customs Duty - Rs. 316.94 lakhs (2011: Rs. 316.94 lakhs) (relating to compliance with the terms of notification, export obligations)

Excise Duty - Rs. 10482.86 lakhs (2011: Rs. 3331.58 lakhs) (relating to denial of exemption by amending the earlier notification, computation of the assessable value, denial of input credit on service tax and excise duty on jewellery)

Income Tax - Rs. 4027.21 lakhs (2011: Rs. 1289.78 lakhs) (relating to disallowance of deductions claimed)

Others - Rs. 474.90 lakhs (2011: Rs. 454.49 lakhs) (relating to miscellaneous claims)

The above amounts are based on the notice of demand or the Assessment Orders or notification by the relevant authorities, as the case may be, and the Company is contesting these claims with the respective authorities. Outflows, if any, arising out of these claims would depend on the outcome of the decisions of the appellate authorities and the Company's rights for future appeals before the judiciary. No reimbursements are expected.

Note 2

Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 3271.38 lakhs (2011: Rs. 3500.99 lakhs).

Note 3

The Company had received show cause notice from the Excise authorities for Rs. 2016.93 lakhs without quantifying interest and penalty, relating to the methodology of allocation and apportionment of input service tax credit. The Company has been legally advised that the notice is not sustainable.

Note 4 Other Commitments

a) Non-fund based facilities availed of Rs. 21603.00 lakhs (2011: Rs. 25801.32 lakhs) from banks are secured by a first charge by way of hypothecation of current assets including book debts and inventories, both present and future. The security covered rank pari passu with the security for the cash credit facility.

b) Estimated amount of contracts remaining to be executed on revenue account and not provided for is Rs. 8845.89 lakhs (2011: Rs. 5302.06 lakhs).

EMPLOYEE BENEFITS (Contd.)

ii) Contributions are made to the Company's Employees Provident Fund Trust at predetermined rates in accordance with the Fund rules. The interest rate payable by the Trust to the beneficiaries is as notified by the Government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate and recognizes such shortfall as an expense. Based on the actuarial valuation, there is no shortfall in the interest payable by the Trust to the beneficiaries as on the balance sheet date.

b. Defined Benefit Plans

(i) Funded

The Company makes annual contributions to The Titan Industries Gratuity Fund. The scheme provides for lump sum payment to vested employees at retirement, death while in employment, or on termination of employment as per the Company's Gratuity Scheme. Vesting occurs upon completion of five years of service.

VIII. The employees are assumed to retire at the age of 58 or 60 years.

IX. The mortality rates considered are as per the published rates in the LIC (1994-96) mortality tables.

Expected rate of return on plan assets is based on average yield on investments. The Company is expected to contribute Rs. 800.00 lakhs to the gratuity fund for the year ending 31 March 2013.

The discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

Note 5

Auditors remuneration comprises of fees for audit of statutory accounts Rs. 102.00 lakhs (2011: Rs. 85.00 lakhs), taxation matters Rs. 31.29 lakhs (2011: Rs. 24.77 lakhs), audit of consolidated accounts Rs. 8.40 lakhs (2011: Rs. 7.00 lakhs), other services Rs. 27.88 lakhs (2011: Rs. 21.90 lakhs) and reimbursement of levies and expenses Rs. 17.44 lakhs (2011: Rs. 19.13 lakhs).

Note 6

Rates and Taxes include the following:

i) Rs. 1909.72 lakhs (2011: Rs. 1763.99 lakhs) being the difference in excise duty included in closing stock and opening stock of finished goods.

ii) Rs. 4180.50 lakhs (2011: Rs. 3650.94 lakhs) being the excise duty paid on watch components transferred from Hosur factory to Dehradun, Baddi, Roorkee and Pantnagar factories.

Note 7

Finance costs include gold on lease charges of Rs. 3834.04 lakhs (2011 : Rs. 2630.76 lakhs) and interest on income tax of Rs. 117.95 lakhs (2011: Rs. 68.23 lakhs).

Revenue expenditure directly attributable to research and development is estimated at Rs. 330.26 lakhs (2011: Rs. 301.69 lakhs)

b) The Company has taken the above operating leases for non-cancellable periods ranging from 1 year to 6 years. The leases are renewable by mutual consent.

c) Lease rentals recognised in the statement of profit and loss in respect of the above operating leases is Rs. 3542.66 lakhs (2011: Rs. 4101.83 lakhs).

a) Gold futures/forwards contracts outstanding as at the year end - 978 kgs, Rs. 27890.60 lakhs (2011: 26 Kgs, Rs. 547.51 lakhs)

b) The Company has an outstanding swap to hedge its foreign currency and interest rate exposures relating to foreign currency loan of US Dollars 2.22 million (2011: US Dollars 3.33 million) equivalent to Rs. 1131.11 lakhs (2011: Rs. 1487.33 lakhs).

The Company has Nil forward exchange contracts outstanding for US Dollars Nil equivalent to Rs. Nil (2011: 12 forward exchange contracts for US Dollars 1.75 million; equivalent to Rs. 779.68 lakhs), Nil forward exchange contract for Euros Nil equivalent to Rs. Nil (2011: 1 forward exchange contract for Euros 0.09 million equivalent to Rs. 53.98 lakhs) and Nil forward exchange contracts for HKD Nil equivalent to Rs. Nil (2011: 3 forward contracts for HKD 1.8 million equivalent to Rs. 102.98 lakhs) to hedge foreign currency risk of firm commitment of sales. Further, the Company also has 3 forward exchange contracts for US Dollars 8.70 million equivalent to Rs. 4457.60 lakhs (2011: 16 forward exchange contracts for US Dollars 22.83 million equivalent to Rs. 10185.30 lakhs), 3 forward exchange contracts for HKD 60 million equivalent to Rs. 3969.50 lakhs(2011: Nil), Nil forward exchange contract for in Swiss Francs Nil equivalent to Rs. Nil (2011: 1 forward exchange contract for in Swiss Francs 0.13 million equivalent to Rs. 61.41 lakhs) and six foreign exchange contracts for Japanese Yen 143.40 million equivalent to Rs. 918.18 lakhs (2011: Nil) for firm commitment of purchases.

Marked to Market loss of Rs. 33.92 lakhs (2011 : Rs. 118.08 lakhs) has been recognized in the statement of profit and loss on these outstanding contracts.

Pursuant to the approval of the shareholders through postal ballot, the Board of Directors of the Company at its Meeting held on 14 June 2011 had approved the sub-division of its equity share of the face value of Rs. 10 each into 10 (ten) equity shares of Rs.1 each and also for the capitalisation of an amount of Rs. 4438.93 lakhs from General reserve account of the Company towards issue and allotment as fully paid-up bonus shares in the ratio of 1 (one) equity share for every existing equity share held by the equity shareholders on the Record date i.e., 24 June 2011.

Consequently, the Earnings per Share (EPS) has been adjusted as required under AS-20 Earnings Per Share.

The operating facilities of the Company are commonly employed for both the domestic and export business, hence it is not possible to report segment assets and capital expenditure by geographical segments.

Details of secondary geographical segments for individual markets outside India are not disclosed as the same do not account for more than 10% of the total segment revenues or results or assets.


Mar 31, 2010

1. Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 1867.53 lakhs (2009: Rs. 2662.96 lakhs).

2. Consequent to the adoption of hedge accounting for gold, for a more accurate reflection of the operational performance and appropriate presentation of the financial statements, the Company has adopted First-in-First-Out (FIFO) method of valuing gold from April 1, 2009 as against weighted average method adopted up to March 31, 2009. This change has resulted in a higher profit before taxes of Rs 1341.23 lakhs during the year ended March 31, 2010.

3. During the year, the Company reviewed the expected pattern of economic benefits from the use of trademarks. Consequent to such review a further amount of Rs. 2403.97 lakhs has been amortised.

4. As per AS 29, Provisions, Contingent Liabilities and Contingent Assets given below are movements in provision for Warranty and Customer Loyalty programme.

(a) Provision for warranty - Rs. 228.48 lakhs (2009: Rs. 239.98 lakhs).

The Company gives warranty on all products except jewellery, undertaking to repair or replace the items that fail to . perform satisfactorily during the warranty period. Warranty provisions are made for expected future outflows and determined based on past experience. No reimbursements are expected. Provision made and utilised/reversed during the year is Rs. 228.48 lakhs (2009: Rs. 201.96 lakhs) and Rs. 239.98 lakhs (2009: Rs. 192.29 lakhs) respectively.

(b) Provision for Customer Loyalty programme - Rs. 987.44 lakhs (2009: Rs. 480.99 lakhs)

The Company has a scheme of reward points on purchase of certain products by customers which can be redeemed at the time of future purchases. Provision is made based on past experience. Additional provision made and utilised/ reversed during the year is Rs. 1150.15 lakhs (2009: Rs. 296.36 lakhs) and Rs. 643.70 lakhs (2009: Rs. 245.62 lakhs) respectively.

(c) Contingent liabilities not provided for - Rs. 5351.17 lakhs (2009: Rs. 3883.28 lakhs) comprising of the following:

Sales Tax - Rs. 307.30 lakhs (2009: Rs. 323.10 lakhs) (relating to the applicability of rate of tax, computation of tax liability, submission of certain statutory forms) Customs Duty - Rs. 316.94 lakhs (2009: Rs. 447.89 lakhs) (relating to compliance with the terms of notification, export obligations)

Excise Duty - Rs. 3397.79 lakhs (2009: Rs. 2779.35 lakhs)

(relating to denial of exemption by amending the earlier notification, computation of the assessable value, denial of input credit on service tax)

Income Tax - Rs. 1238.60 lakhs (2009: Rs. 263.25 lakhs) (relating to disallowance of deductions claimed)

Others - Rs. 90.54 lakhs (2009: Rs. 69.69 lakhs) (relating to miscellaneous claims)

The above amounts are based on the notice of demand or the Assessment Orders or notification by the relevant authorities, as the case may be, and the Company is contesting these claims with the respective authorities. Outflows, if any, arising out of these claims would depend on the outcome of the decisions of the appellate authorities and the Companys rights for future appeals before the judiciary. No reimbursements are expected.

5. The Company has received show cause notices from the Excise authorities aggregating to Rs. 6391.14 lakhs (2009:4983.40 lakhs) without quantifying interest and penalty, towards excise duty on jewellery despatches. The Company has been legally advised that the notice is not sustainable.

6. The 6.75% debentures are redeemable at par at the end of five years from the dates of allotment on May 12,2006 and June 09,2006 and are secured by way of legal mortgage on the immovable properties and plant and machinery situated at Hosur.

7. The term loans from banks shown under secured loans include:

a) Loan of Rs. Nil (2009: Rs. 3332.33 lakhs) secured by a first charge by way of hypothecation of movable assets (save and except current assets) and secured by way of an equitable mortgage of immovable properties of the Company, both present and future.

b) Foreign currency loan of Rs.1996.44 lakhs (2009: Rs. 2537 lakhs) secured by a first charge over the Companys present and future fixed (movable and immovable) assets.

8. Non-fund based facilities availed of Rs. 25963.71 lakhs (2009: Rs. 25697.00 lakhs) from banks are secured by a first charge by way of hypothecation of current assets including book debts and inventories, both present and future.

9. The security covered under notes 7 and 8 above rank pari passu. The security covered under note 9 rank pari passu with the security for the cash credit facility.

10. Exchange loss (net) included in the profit and loss account is Rs. 104.20 lakhs (2009: gain - Rs. 97.11 lakhs).

11. Auditors remuneration comprises of fees for audit of statutory accounts Rs. 85.00 lakhs (2009: Rs. 65.00 lakhs), taxation matters Rs. 41.41 lakhs (2009: Rs. 30.97 lakhs), audit of consolidated accounts Rs. 7.00 lakhs (2009: Rs. 7.00 lakhs), other services Rs. 22.30 lakhs (2009: Rs. 23.70 lakhs) and reimbursement of levies and expenses Rs. 5.19 lakhs (2009: Rs. 6.76 lakhs).

12. Excise duty of Rs.2870.13 lakhs (2009: Rs. 4434.04 lakhs) reduced from gross sales in the profit and loss account represents excise duty on sale of products.

13. Rates and taxes include the following :

i) Rs. 360.13 lakhs (2009: Rs. (-) 88.67 lakhs) being the difference in excise duty included in closing stock and opening stock of finished goods.

ii) Rs. 2217.80 lakhs (2009: Rs. 3212.31 lakhs) being the excise duty paid on watch components transferred from Hosur factory to Dehradun, Baddi, Roorkee and Pantnagar factories.

14. Interest on fixed loans amounts to Rs. 1151.20 lakhs (2009: Rs. 1332.56 lakhs).

15. The Directors remuneration of Rs. 318.13 lakhs (2009: Rs. 252.32 lakhs), excluding provision for encashable leave and gratuity as separate actuarial valuation is not available, comprises of payments to the Managing Director which is inclusive of contribution to provident and other funds Rs. 9.56 lakhs (2009: Rs. 8.42 lakhs), perquisites Rs. 48.17 lakhs (2009: Rs. 42.69 lakhs), commission of Rs.110.00 lakhs (2009: Rs. 90.00 lakhs) and commission to non whole-time directors of Rs.115.00 lakhs (2009: Rs. 80.00 lakhs).

16. The provisions of Industries (Development and Regulation) Act, 1951, relating to licensed capacity are not applicable to the Company. The installed capacity is 14 million watches (2009:12 million watches), 0.32 million jewellery pieces (2009:0.32 million jewellery pieces), 0.30 million clocks (2009: 0.30 million clocks) and 0.30 million eyewear products (2009: Nil). The installed capacities are as certified by the management and relied upon by the auditors without verification, being a technical matter.

17. The Company produced 87,04,422 watches (2009: 88,12,268 watches) sold 93,45,356 watches - Rs. 80352.96 lakhs (2009: 82,69,424 watches - Rs. 72662.31 lakhs) and had a closing stock of 9,42,048 watches - Rs. 6937.46 lakhs (2009: 15,82,982 watches - Rs. 10318.94 lakhs, 2008: 10,40,138 watches - Rs. 6959.22 lakhs).

18. The Company produced 22,775 clocks (2009: 44,889 clocks) sold 24,475 clocks - Rs. 202.26 lakhs (2009: 72,378 clocks - Rs. 413.84 lakhs) and had a closing stock of 1,498 clocks - Rs. Nil (2009: 3,198 clocks - Rs. Nil ,2008:30,687 clocks - Rs. Nil)

19. The Company produced 13,33,198 jewellery pieces (2009:12,43,717 jewellery pieces), purchased 94,805 jewellery pieces - Rs. 28871.26 lakhs (2009: 88,950 jewellery pieces - Rs.24509.05 lakhs), sold 14,21,645 jewellery pieces - Rs. 296126.39 lakhs (2009:13,64,813jewellery pieces - Rs. 226503.14 lakhs) and had a closing stock of 3,81,990 jewellery pieces - Rs. 85981.90 lakhs (2009: 3,75,632 jewellery pieces - Rs. 75808.74 lakhs, 2008: 4,07,778 jewellery pieces - Rs. 62966.35 lakhs).

20. The Company produced 6,40,411 coins (2009:8,17,162 coins), sold 6,69,746 coins - Rs. 53621.00 lakhs (2009: 7,71,953 coins

- Rs.49130.44 lakhs) and had a closing stock of 62,478 coins - Rs. 2906.33 lakhs (2009:91,813 coins - Rs. 1843.45 lakhs, 2008: 46,604 coins - Rs. 2090.10 lakhs)

21. The Company produced 23,535 eyewear products (2009: Nil) sold 14,542 eyewear products - Rs. 93.11 lakhs (2009: Nil) and had a closing stock of 8,993 eyewear products - Rs. 14.01 lakhs (2009: Nil, 2008: Nil)

22. The Company produced 60 machines (2009:115 machines), capitalised 1 machine (2009:1 machine), and sold 59 machines

- Rs. 2592.54 lakhs (2009:114 machines - Rs. 4280.00 lakhs), and had a closing stock of Nil (2009: Nil machine - Rs. Nil lakhs; 2008: Nil machine - Rs. Nil lakhs).

23. The Company purchased 15,73,886watches - Rs. 7873.36 lakhs (2009:15,79,562watches - Rs. 8284.18 lakhs), sold 16,90,916 watches - Rs. 18681.83 lakhs (2009: 14,24,498 watches - Rs. 16337.02 lakhs) and had a closing stock of 3,82,082 watches - Rs. 3471.28 lakhs (2009:4,99,112 watches - Rs. 4310.18 lakhs, 2008: 3,44,048 watches - Rs. 2553.05 lakhs).

24. The Company purchased Nil clocks (2009: Nil clocks), sold 271 clocks - Rs. Nil (2009:2,478 clocks - Rs. 0.67 lakhs) and had a closing stock of 841 clocks - Rs. Nil (2009:1112 clocks - Rs. Nil, 2008:3,590 clocks - Rs. Nil).

25. The Company purchased 16,34,029 eyewear products - Rs. 4252.17 lakhs (2009: 9,59,733 eyewear products - Rs. 2112.33 lakhs), sold 14,80,614 eyewear products - Rs. 9536.07 lakhs (2009:8,53,597 eyewear products - Rs. 6484.76 lakhs) and had a closing stock of 4,27,913 eyewear products - Rs. 1223.78 lakhs (2009: 2,74,498 eyewear products - Rs. 947.15 lakhs, 2008: 1,68,362 eyewear products - Rs. 619.70 lakhs).

Eyewear products include sunglasses, frames, ready readers and lenses.

26. Sales includes sale of scrap Rs. 591.98 lakhs (2009: Rs. 576.17 lakhs), sale of accessories Rs. 7870.00 lakhs (2009: Rs. 7313.84 lakhs), sale of tools and components Rs. 715.83 lakhs (2009; Rs. 593.14 lakhs), sale of gold Rs. 788.09 lakhs (2009: Rs. 4929.37 lakhs), sale of precious stones Rs 2017.95 lakhs (2009: Rs. 1568.43 lakhs), income from services provided Rs. 246.83 lakhs (2009: Rs. 254.02 lakhs) and is net of turnover based commission of Rs. 9553.38 lakhs (2009: Rs. 7246.03 lakhs) and all discounts, including cash discount of Rs. 644.17 lakhs (2009: Rs. 591.14 lakhs).

27. Revenue expenditure directly attributable to research and development is estimated at Us. 257.01 lakhs (2009: Rs. 294.17 lakhs).

28. Current liabilities do not include any amount to be credited to Investor Education and Protection Fund except where there are pending legal cases amounting to Rs. 1.30 lakhs (2009: Rs. 1.13 lakhs) and therefore, amounts relating to the same could not be transferred.

29. Employee Benefits

Defined Benefit Plans

(i) Funded

(a) Contributions are made to the Companys Employees Provident Fund Trust at predetermined rates in accordance with the Fund rules. The interest rate payable by the Trust to the beneficiaries is as notified by the Government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate and recognizes such shortfall as an expense. There is no shortfall in the interest payable by the Trust to the beneficiaries as on the balance sheet date.

(b) The Company makes annual contributions to The Titan Industries Gratuity Fund. The scheme provides for lump sum payment to vested employees at retirement, death while in employment, or on termination of employment as per the Companys Gratuity Scheme. Vesting occurs upon completion of five years of service.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

30. a) Hitherto the Company recognised marked to market losses arising from outstanding derivative financial instruments taken to hedge gold price fluctuations in the profit and loss account, while net gains were ignored, in accordance with the Announcement issued by the Institute of Chartered Accountants of India on Accounting for Derivatives. Consequent to change in accounting for derivative financial instruments (refer note 1(vi)),the impact on profit before tax for the year is Nil and reserves and surplus is higher by Rs. 45.90 lakhs.

Gold futures/forwards contracts outstanding as at the year end - 390 kgs, Rs 6410.04 lakhs (2009: 2765 Kgs, Rs 41231.49 lakhs)

This being the first year of adoption of the principles of hedge and derivative accounting, the balance at the beginning of the year in hedging reserve and the amount reversed during the year and included in the profit and loss account is Rs. Nil.The balance in the hedging reserve is Rs 45.90 lakhs which is expected to be reclassified to the profit and loss account in the subsequent year.

b) The Company has an outstanding swap to hedge its foreign currency and interest rate exposures relating to foreign currency loan of US Dollars 4.44 million (2009: US Dollars 5 million) equivalent to Rs 1996.44 Lakhs (2009: Rs. 2537.00 lakhs). Marked to Market loss of Rs 238.53 lakhs (2009:Rs. 37.05 lakhs) has been recognized in the profit and loss account.

The Company has two forward exchange contracts outstanding for US Dollars 1.8 million equivalent to Rs 808.20 lakhs (2009:2 forward exchange contracts; US Dollars 0.05 million; Rs. 28.34 lakhs), one forward exchange contract for Euros 0.06 million equivalent to Rs 36.87 lakhs (2009: nil)) to hedge foreign currency risk of firm commitment of sales and one forward exchange contract for HKD 13.6 million equivalent to Rs 822.80 lakhs (2009: nil) and nil forward exchange contracts (2009: 1 forward exchange contract; US Dollars 5 million; Rs. 2537.00 lakhs), for purchases and borrowings respectively. Marked to Market gain relating to forward contracts credited to profit and loss account is Rs 13.67 lakhs (2009: Rs. (-) 52.00 lakhs).

31. Related party disclosures :

Names of related parties and description of relationship:

a) Promoters : Tamilnadu Industrial Development Corporation Ltd.

Tata Sons Ltd.

b) Subsidiaries : Titan TimeProducts Ltd.

Tanishq (India) Ltd.

Titan Properties Ltd.

Titan Mechatronics Ltd. (upto March 30,2010)

c) Key Management Personnel : Mr. Bhaskar Bhat, Managing Director

32. The figures of the previous year have been regrouped/recast, where necessary, to conform to the current year classification.

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